Landau, P.C. v Larossa, Mitchell & Ross
Annotate this CaseDecided on April 17, 2003
Supreme Court, New York County
Landau, P.C., successor, by change of name, to MORRIS J. EISEN, P.C., and MORRIS J. EISEN, Plaintiff,
against
LaRossa, Mitchell & Ross, JAMES LaROSSA, JOHN W. MITCHELL, and MICHAEL ROSS, Defendants.
604476/01
Alice Schlesinger, J.
Plaintiffs Landau, P.C., as successor by change of name to Morris J. Eisen, P.C., and Morris J. Eisen individually commenced this action against LaRossa, Mitchell & Ross and their individual principals James LaRossa, John W. Mitchell and Michael Ross seeking approximately five million dollars based on defendants' alleged legal malpractice. The underlying facts, summarized below, are indeed unfortunate. They are discussed at length in the August 10, 2000 decision by Justice Eileen Bransten dismissing a prior action entitled Morris J. Eisen, P.C. and Morris J. Eisen v. LaRossa, Mitchell & Ross, et al., Index No. 112652/98, and in the February 24, 1995 decision by Justice Jane Solomon awarding plaintiff partial summary judgment against Eisen P.C. in a related action entitled City of New York v. Morris J. Eisen, P.C., et al., Index No. 20529/86.
Background
Morris J. Eisen, P.C. was a large Manhattan law firm specializing in personal injury lawsuits. The firm was the attorney of record for more than a dozen personal injury actions which were the subject of a federal prosecution pursuant to the Racketeer Influenced and Corrupt Organization Act ("RICO", 18 U.S.C. § 1961 et seq.) See, United States v. Eisen, et al., 90 Cr.018 (U.S. Dist. Ct., E.D.N.Y). In March 1991, defendant Morris J. Eisen and several other attorneys and investigators employed by or affiliated with Eisen, P.C. were convicted in the RICO action of racketeering and conspiracy charges for arranging and providing false testimony and fabricated evidence in some of the personal injury cases at issue. In three of the cases, the City of New York had been sued as a defendant.
In connection with these matters, plaintiff Eisen was convicted of a class D Felony and subsequently disbarred. In addition, and quite significantly here, plaintiff Eisen paid significant sums of money to the City of New York in connection with a Civil Recovery Action which the City had commenced to recover the monies which it had paid to settle some of the personal injury actions at issue in the RICO action. Those monies were paid when Justice Jane Solomon, presiding over the Civil Recovery Action, granted the City summary judgment. (See, City v. [*2]Eisen, et al., Index No. 20529/86). The decision was based, inter alia, on Justice Solomon's finding that collateral estoppel barred Eisen and Eisen P.C. from relitigating in the Civil Recovery Action the issues which had been determined against Eisen in the RICO action.
The basis of the malpractice alleged herein is as follows. The City, when moving for summary judgment before Justice Solomon, contended that it would not have settled some of the personal injury actions raised in the RICO case "but for" the false testimony facilitated by Eisen. Eisen's attorneys did not dispute that allegation, as evidenced by the following finding by Justice Solomon in her February 24, 1995 decision:
[N]one of these defendants challenges any of the City's contentions as to the underlying facts including that, but for the fabricated testimony and evidence there would have been no viable claim in any of the three law suits.
Eisen now contends that his counsel's failure to refute the City's allegation resulted in the court's finding of liability on Eisen's part and thus constitutes malpractice. In other words, plaintiffs urges that, had defendants herein advised Justice Solomon in the Civil Recovery Action that independent, "untainted" evidence existed supporting the City's settlements, Justice Solomon would not have awarded the City summary judgment as against Eisen and Eisen, P.C..
Also significant to the instant motion is the fact that Morris J. Eisen, P.C. and Morris J. Eisen individually commenced an action in 1998 against the same defendants sued here, also claiming legal malpractice. (Morris J. Eisen, P.C. and Morris J. Eisen v. LaRossa Mitchell & Ross, et al., Index No. 112652/98). In a lengthy decision and order dated January 10, 2000, Justice Eileen Bransten granted defendants' motion to dismiss that action based on a lack of standing or capacity to sue by Eisen or his firm. The Appellate Division affirmed Justice Bransten's decision by order dated April 10, 2001. In the interim, plaintiff moved to renew and reargue Justice Bransten's decision. By order dated August 10, 2000, Justice Bransten denied the motion in its entirety.
The Instant Motion
Defendants herein have moved to dismiss this action on a number of grounds. The most compelling ground, and the one on which defendants motion is now being granted, is res judicata. CPLR § 3211(a)(5).
The doctrine of res judicata, or claim preclusion, provides that an existing final judgment rendered upon the merits without fraud or collusion by a court of competent jurisdiction is conclusive of the rights, questions and facts in issue as to the parties and their privies in all other actions in the same or any other judicial tribunal of concurrent jurisdiction. 73A NY Jur 2d, Judgments § 328, citing Gramatan Home Investors Corp. v. Lopez, 46 NY2d 481 (1979).
The courts over the years have struggled with articulating precisely how to determine whether a second action involves the same cause of action as the earlier one. New York courts have long applied the "consequential test" articulated by Chief Judge Cardozo in Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 NY 304, 306-307 (1929), relying on Cromwell v. County of Sac, 94 U.S. 351. There Justice Cardozo defined the analysis as follows:
A judgment in one action is conclusive in a later one not only as to any matters actually litigated therein, but also as to any that might have been so litigated, when the two causes of action have such a measure of identity that a different judgment in a second would destroy or impair rights or [*3]interests established by the first.
While continuing to cite Schuylkill with approval, our Court of Appeals has long applied the "transactional test" in place of the consequential test. Under the transactional analysis approach, "once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy." O'Brien v. City of Syracuse, 54 NY2d 353, 357 (1981); citing Matter of Reilly v. Reid, 45 NY2d 24, 29-30 (1978); see also, Parker v. Blauvelt Volunteer Fire Co., Inc., 93 NY2d 343 (1999).
Whatever test is used, the public policy considerations are the same. As the Court of Appeals explained in Matter of Reilly v. Reid, 45 NY2d 24, 28 (1978):
Res judicata is designed to provide finality in the resolution of disputes to assure that parties may not be vexed by further litigation (see Matter of New York State Labor Relations Bd. v Holland Laundry, 294 NY 480, 493-494; Weiner v Greyhound Bus Lines, 55 AD2d 189, 191). The policy against relitigation of adjudicated disputes is strong enough generally to bar a second action even where further investigation of the law or facts indicates that the controversy has been erroneously decided, whether due to oversight by the parties or error by the courts (see Deposit Bank v Frankfort, 191 US 499, 510-511; Kiker v Hefner, 409 F2d 1067, 1068-1069). Considerations of judicial economy as well as fairness to the parties mandate, at some point, an end to litigation. Afterthoughts or after discoveries however understandable and morally forgivable are generally not enough to create a right to litigate anew.
Based on its application of the above principals of law, this Court concludes that plaintiffs' action herein is barred by res judicata. This action and the prior action heard by Justice Bransten involved the same exact parties. Landau P.C. is named as a plaintiff herein only by a change of name from Morris J. Eisen, P.C. Both actions seek money damages based on defendants' alleged legal malpractice. In both actions, the malpractice allegedly occurred when defendants represented plaintiffs in the Civil Recovery Action before Justice Solomon and failed to dispute an allegedly incorrect material statement by the City as discussed above.
Plaintiffs seek to distinguish the two actions, claiming that this action involved an assertion of a duty not previously litigated by the parties before Justice Bransten. In particular, plaintiffs point to ¶ 27-32 of the complaint in the instant action where plaintiffs allege a duty owed by defendants to plaintiff Eisen personally based on Eisen's assumptions of the P.C.'s liability. The assertion is that, because defendants did not properly defend the P.C. against the City's recovery claims, the burden of payment of any resulting judgment has fallen squarely on Eisen individually as a result of his assumption of the P.C.'s liability. (Complaint ¶ 31). Eisen contends that these present allegations of duty owed to him as the indemnitor of the P.C. were not pleaded in the complaint in the prior action and are therefore not barred by res judicata.
However, plaintiff Eisen concedes (at ¶ 49 of his affidavit in opposition to the motion to dismiss) that he attempted to raise the argument before Justice Bransten in his motion to renew or reargue the Court's January 10, 2000 order dismissing the action. Plaintiff proceeds to allege as follows (at ¶ 50): "Since the Court refused to consider the argument based on my status as the P.C.'s indemnitor, it cannot be the basis of res judicata or collateral estoppel so as to prevent me [*4]from having this meritorious argument considered by this Court and decided on the merits."
Plaintiffs' claim must fail for a number of reasons. First and foremost, it ignores the transactional analysis test noted above. Clearly, this action and the action heard by Justice Bransten involve claims arising out of the same transaction and occurrences. It matters not that a particular theory of liability (i.e., a duty owed to Eisen individually based on his assumption of the P.C.'s liabilities) was not determined by Justice Bransten. As the Court of Appeals recently reiterated in Parker v. Blauvelt Fire Company, 93 NY2d 343, 347 (1999): "As a general rule, once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or seeking a different remedy." See also, O'Brien v. City of Syracuse, 54 NY2d 353, 357; Matter of Reilly v. Reid, 45 NY2d 24, 30 (1978).
In addition, Eisen acknowledges (at ¶ 45 of his affidavit) that the assumption of the P.C.'s liability occurred in September of 1999. Thus, the relevant facts and the legal theories were available for plaintiff Eisen to argue before Justice Bransten. Because the argument could have been raised, and was raised in some sense in the motion to renew and reargue, plaintiff cannot relitigate the claim at this time, even if Justice Bransten declined to decide the claim on the merits.
Because this Court is granting the motion to dismiss based on res judicata or claim preclusion, it does not address the other issues raised in defendants' motion. Accordingly, it is hereby
ORDERED that defendants' motion to dismiss is granted to the extent of issuing an order pursuant to CPLR § 3211(a)(5) dismissing this action based on res judicata or claim preclusion. The Clerk is directed to enter judgment accordingly.
Dated: April 17, 2003
____________________________
J.S.C.
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