Rudes v Heller

[*1] Rudes v Heller 2008 NY Slip Op 52597(U) [22 Misc 3d 1104(A)] Decided on December 1, 2008 Supreme Court, New York County Madden, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 1, 2008
Supreme Court, New York County

Saul Rudes, Plaintiff,

against

Kenneth Heller, Defendant.



114298/04

Joan A. Madden, J.

Defendant Kenneth Heller ("Heller") moves for an order (i) to set aside the jury verdict rendered against him after trial pursuant to CPLR 4404 as against the weight of evidence, (ii) dismissing the complaint, or alternatively, (iii)directing that a new trial or inquest be held. Plaintiff Saul Rudes ("Rudes") opposes the motion, which is denied for the reasons set forth below.

Background

In this action, Rudes seeks his share of a fee from Heller for legal services he rendered in connection with a lawsuit brought on behalf of S.M. Pires[FN1] ("Pires") who suffered injuries while he was employed as a seaman (hereinafter "the Pires action"). Pires retained Heller to represent him. According to the complaint, verified by Rudes, the Pires action resulted in a judgment in the sum of $4,000,000, plus interest, and Heller retained Rudes as appellate counsel to handle appeals in return for 10% of Heller's net fee in the Pires action.[FN2] The complaint further alleges that although Heller after years of appeal, recovered $8,329,720.65, the sum of the award and interest, he told Pires that the judgment was only $4,153,181, and gave him this amount and retained $4,176,539.54 for himself. Furthermore, [*2]the complaint alleges that Heller told Rudes that the entire amount of $8,329,720.65 had to be paid to Pires and no part of the money deducted and that therefore Heller could not pay Rudes any attorney's fees. The third cause of action, for breach of contract, alleges that Rudes is entitled 10% of the $4,000,000 retained by Heller as attorney's fees.

During discovery, Heller, who is a disbarred attorney,[FN3] refused to appear for depositions ordered to take place in the courthouse, asserting that there was an outstanding contempt warrant for his arrest for failing to turn over a client file in another action, and that if he appeared for deposition he would be arrested. Heller then requested that given the circumstances, that he be permitted to appear for deposition by videotape.

By order dated February 7, 2008, this court directed that Heller's deposition go forward on February 13, 2008, as previously ordered, and denied Heller's request to appear by videotape. The order also stated that the "[f]ailure to appear at the deposition will be deemed a waiver of the right to depose the party and/or would subject the non-complying party to sanctions per CPLR 3126 including, but not limited to, preclusion of the non-appearing party's testimony and/or striking the pleading[s]."

Heller then moved by order to show cause (motion sequence no. 009) for permission to appear for deposition by videotape and for vacatur of the February 7, 2008 order requiring him to appear at the courthouse for such deposition. This motion was made returnable on February 13, 2008, and due to this court's unavailability was heard by Justice Bransten. [*3]

Justice Bransten held that based on Heller's failure to appear, pursuant to this court's February 7, 2008 order, Heller waived Rudes' deposition. Justice Bransten also held that "[a]t Mr. Rudes' request and pursuant to CPLR 3216 and pursuant to Justice Madden's order, the court hereby strikes Mr. Heller's pleadings...."

Rudes then moved for an inquest for damages and plaintiff cross moved for renewal and reargument of this court's February 7, 2008 order and for vacatur of Justice Bransten's order. By decision and order dated April 3, 2008, this court denied Rudes' motion for an inquest without prejudice to renewal, finding that his papers were insufficient to establish a prima facie case for relief, and also denied Heller's cross-motion. The trial was set for May 13, 2008.

In the meantime, Rudes moved, by order to show cause, for renewal of his motion for an inquest as to damages, and the court made the order to show cause returnable on May 29, 2008.

On the May 13, 2008 trial date, the court reconsidered its ruling denying Rudes' motion for an inquest as to damages. After argument held on the record, the court, by order dated May 13, 2008, vacated that part of the April 8, 2008 order which denied Rudes' motion for inquest as to damages, and found that based on the order striking Heller's answer, "Heller is deemed to have admitted all traversable allegations in the complaint (Rokina Optical Co., Inc. v. Camera King, Inc., 63 NY2d 728)." The court then granted Rudes' motion for an inquest to the extent of finding that he was entitled to a judgment as to liability on his breach of contract claim as stated in the third cause of action, and set the matter down for a trial as to damages on this claim.

The court also granted Heller's request to have the amount of damages determined by a jury. It further ruled that since the third cause of action alleged that Rudes was entitled to 10% of the fee obtained by Heller in the Pires action, the only issue for the jury was the amount of such fee.

The jury trial was held on May 13 and 14, 2008, where evidence was introduced regarding the amount of the fee received by Heller in the Pires action, including testimony from Rudes who was subject to direct and cross examination, and affidavits submitted by Heller in related actions indicating the amount of fee received by him in the Pires action. In its special verdict form, the jury indicated that Heller received a fee of $4,153,181,11 for work performed on the Pires action. Based on the jury determination, the court awarded Rudes damages for [*4]breach of contract in the sum of $415,181.11 which is equal to10% of the fee that the jury found that Heller had received.[FN4]

The Motion

Heller now seeks to set aside the verdict on the grounds that (i) his pleadings were improperly stricken,(ii) the court erred in vacating its order denying Rudes' motion for an inquest as to damages, (iii) the court erred in finding that Rudes was entitled to 10% of any fee obtained by Heller in the Pires action,(iv) the court improperly refused to permit Heller to introduce testimony from an expert witness, (v) the court's advancing of Rudes' order to show cause to the date of trial resulted in surprise and prejudice to Heller, (vi) Rudes' failure to file a retainer statement should bar his ability to recover a fee, (vii) the verdict was premature as the issue of the amount of fees to which Heller was entitled has not been resolved, and (viii) the verdict was against the weight of evidence.

Rudes opposes the motion, and notes that while labeled as a motion to set aside the verdict the majority of Heller's arguments seek to reargue various decisions and trial rulings of the court.

A motion for reargument is addressed to the discretion of the court, and is intended to give a party an opportunity to demonstrate that the court overlooked or misapprehended the relevant facts, or misapplied a controlling principle of law. See Foley v Roche, 68 AD2d 558, 567 (1st Dept 1979). However, "[r]eargument is not designed to afford the unsuccessful party successive opportunities to reargue issues previously decided." William P. Pahl Equipment Corp. v. Kassis, 182 AD2d 22, appeal denied in part dismissed in part 80 NY2d 1005 (1992).

Under this standard, there is no basis for granting reargument with respect to whether Heller's pleadings were properly stricken based on his failure to appear for deposition. In particular, Heller's argument that his appearance for deposition should be excused and that he should be permitted to have his deposition videotaped were previously considered and rejected by this court in its decisions and orders dated February 7, 2008 and April 8, 2008 and by Justice Bransten's decision dated February 13, 2008.

Likewise, the court did not misapprehend the law or overlook [*5]any facts in determining that once Heller's answer was stricken, liability was established as to breach of contract action, and that the trial should be limited to an inquest as to damages. See Rokina Optical Co., Inc. v. Camera King, Inc., 63 NY2d at 730 (holding that "a defendant whose answer is stricken as a result of a default admits all traversable allegations in the complaint, including the basic allegation of liability, but does not admit plaintiff's conclusion as to damages").

As liability was established as to Rudes' claim asserting that Heller breached his agreement to pay Rudes 10% of any fee recovered in the Pires action, it cannot be said that the court erred its ruling that Rudes was entitled to this percentage of the fee. In addition, as liability was established there was no basis for contesting the 10% fee agreement, or for Heller to call an expert witness.

Moreover, Heller cannot show prejudice or surprise as a result of the court's ruling that liability was established on the breach of contract claim. Although Rudes' order to show cause to renew his motion for an inquest on damages was returnable after the trial date, it did not contain any stay of the trial scheduled for May 13, 2008, and Heller knew that he would have to at least contest the issue of damages at trial, irregardless of the outcome of the Rudes' renewal motion.

Next, Heller is barred from raising a defense based on Rudes' failure to file a retainer statement[FN5] as his answer has been stricken.[FN6]

Furthermore, Heller's assertion that the jury verdict is premature since the amount of his fee has been referred to a Special Referee based on 2004 Appellate Division decision (Pires v. Frota Oceanca Brasileira, S.A., 7 AD3d 270 (1st Dept 2004), is unavailing, since Pires withdrew his action against Heller. Moreover, a copy of Pires' agreement to pay Heller the fee was [*6]read to the jury during Rudes' testimony, and Heller admitted receiving the fee in his affidavits introduced at trial.

Finally, as the jury's verdict has ample support in the record and is based on a fair interpretation of the evidence, there is no basis for overturning it. Under these circumstances there also is no ground for dismissal of the complaint or for granting Heller's alternative request for a new trial or inquest.

In view of the above, it is

ORDERED that Heller's motion is denied.

DATED: December 1, 2008

J.S.C. Footnotes

Footnote 1:Pires was initially a co-plaintiff with Rudes but apparently discontinued his claims against Heller.

Footnote 2:While Heller asserts that Rudes only worked 13 hours on the matter, Rudes maintains that he handled two appeals before the Appellate Division and numerous motions in the trial courts and a motion before the Court of Appeals.

Footnote 3:In the order of disbarment the Appellate Division stated:

In light of the cumulative evidence of [Heller's] 24-year history of sanctions, his perverse and persistent refusal to accept adverse rulings, reflective of an utter contempt for the judicial system, and his consistent, reprehensible, unprofessional behavior, which has included screaming at, threatening and disparaging judges, adversaries and experts, intentionally defying court rulings, and disrupting and thwarting proper legal process through both physical and verbal aggression, we are of the opinion that the appropriate sanction here is disbarment.

Footnote 4:The court also found that Rudes was entitled to pre-judgment interest on the $415,181.11 from January 13, 2000 to the date of the verdict at the statutory rate of 9%.

Footnote 5:Notably, Heller does not deny Rudes' assertion that Heller did not file a retainer statement in connection with the Pires action.

Footnote 6:Moreover, the cases relied on by Heller are not on point as none of them hold that a defendant whose answer has been stricken can raise the issue of the failure to file a retainer statement. See e.g., Lavi v. Lavi, 256 AD2d 602 (2d Dept 1998)(although defendant's answer was stricken, its cross motion to dismiss plaintiff's fraud claim should have been granted for failure to state a cause of action since the fraud charged related to a breach of contract).