Landau, P.C. v LaRossa, Mitchell & Ross

[*1] Landau, P.C. v LaRossa, Mitchell & Ross 2010 NY Slip Op 50620(U) [27 Misc 3d 1207(A)] Decided on April 7, 2010 Supreme Court, New York County Schlesinger, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 April 7, 2010
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.



604479/01

Alice Schlesinger, J.

In June of 2008, the highest court of this State decided that a legal malpractice action instituted by Landau, P.C., as successor to Morris J. Eisen, P.C., should, for the first time, go forward on its merits. Accordingly, on July 30, 2008, this Court then directed that discovery should proceed. Discovery did proceed and when it was completed, first the plaintiff, and then the defendants, filed competing motions for summary judgment. In the plaintiff's case, the motion was for partial summary judgment on the issue of liability. It was understood that the issue of damages would have to be settled separately. The defendants opposed and cross-moved to dismiss the action.

This controversy began formally in August 1986 when the City of New York filed a civil action against Eisen, P.C. and others. The City alleged that they had been defrauded into reaching settlements with Eisen, P.C., due to false testimony. Eisen, P.C. retained the defendant law firm to defend it in the action. While this action was pending, Mr. Eisen and others were tried in Federal Court on RICO charges, as well as bribery and mail fraud. The same law firm represented Mr. Eisen there.

It should be noted that, the three civil actions, which formed the predicate for the City's action sounding in fraud against Mr. Eisen, were also part of the Government's evidence.[FN1] In 1991, Mr. Eisen was convicted of all of the federal charges, as were his co-defendants. He was then sentenced, disbarred and incarcerated.

It was the City's position that in two of the three cases named in their action, (the third was a Bronx case wherein no settlement occurred) Aboud and Rehberger, both of which settled, the former for $700,000, the latter for $15,000 (an additional $45,000 was paid by a private defendant), they were entitled to a return of this money (in fact tripled, pursuant to § 487 of the Judiciary Law) because their sole reason for settling was the [*2]introduction at trial by defendants of perjured testimony.[FN2]

The plaintiffs claim that the law firm committed malpractice in its failure to put into issue the factual under-pinnings of the City's claim, in the City's motion for summary judgment before Justice Jane Solomon. As stated earlier, the City claimed that its sole reason for settling these two matters was the perjured testimony presented at their respective trials. Since this testimony had been proven false at the Federal trial, the City argued that the defendant, Eisen, P.C. was collaterally estopped from challenging this falsity.

The sole opposition interposed by LaRossa, Mitchell & Ross was that collateral estoppel did not apply under these circumstances. However, the law firm never challenged the central premise of the motion, that the City's sole reason for settling was the perjured testimony. That is, they never challenged that premise, so plaintiff argues here, until it was too late.

Justice Solomon ruled in favor of the City in a Decision and Order dated February 24, 1995. In the course of that decision she made the following correct statements:

...none 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 lawsuits (pp 14-15)

and

The City argues that but for the criminal acts of defendants, it would not have paid any money in connection with these cases because there would have been no evidence of prior notice which was required to establish a prima facie case against the City... This contention is unrefuted (p. 27). [*3]

But the plaintiff very definitely in his complaint and papers accompanying this motion, refutes that. Plaintiff takes great pains to show that conclusion was not true, and in fact, that there was clear evidence to rebut said conclusion. Plaintiff asserts their was sufficient evidence without the use of perjured testimony to merit a jury trial, or alternatively to have convinced the City to settle the actions, albeit perhaps for lesser figures.

Further plaintiff argues, and it is a good argument, that by the defendants' firm's very own words and actions, taken soon after Justice Solomon's decision, it is clear the firm felt similarly.

What was that action? In May of 1995, the defendants moved for reargument/renewal of Justice Solomon's decision. That motion was supported with a nine-page affirmation by an associate of the law firm, Susan G. LaRossa. Eight of these pages addressed the defendant's position in detail. Ms. LaRossa argued that in fact the defendants were contesting the City's claim that but for the fabricated evidence and perjurious testimony, the cases had no value. The affirmant tried to explain why these new facts had not been argued earlier, that there had not been a conviction of mail fraud, merely bribery, which went to their argument why collateral estoppel was not applicable, and that true discovery had not yet occurred. However, the thrust of the affirmation, citing the deposition testimony of Daniel Loveglia from the City Department of Highways, read at the trial regarding a daily log for the Queensboro Bridge, as well as repair records, supported the plaintiff Aboud's position that there were potholes on the bridge and that only three days before the accident, repairs had begun to address these. The LaRossa deposition also referred to attached memoranda from the City evaluating the case as an extremely serious one and taking note of these repair records.

As to the Rehberger action, counsel also argued that there was evidence supporting their claim that the ice had been on the sidewalk for a sufficiently long enough time to have been noted and dealt with by the City.

Also, significantly, the affirmation contained a reference to part of a decision by Judge Sifton, the trial judge in the Federal Case. Counsel argued that, the fact that these cases:

had merit and would have resulted in settlement, despite the alleged misconduct, is perhaps best illustrated in Judge Sifton's decision regarding the City and Transit Authority's request for restitution in the criminal case. "In most of the cases at issue it is beyond question that the (City) would have paid some amount - often, a substantial one - to settle the cases even in the absence of misconduct ... Moreover, in some cases, a substantial factual issue exists as to whether the misconduct in fact caused the loss." United States v. Eisen, 1991 WL 180403, *2 (E.D.NY") (paragraph 7).

Judge Sifton in this decision had denied restitution to the Government, vis-a-vis the settlement moneys paid out.

Further, in the law firm's fifty-page Memorandum of Law supporting the reargument motion, similar arguments were made. For example, the law firm suggested that there was "overwhelming proof of notice to the City," which provided "prima facie evidence of constructive notice which rebuts the City's specious but for' claim."

However, in her July 28, 1995 one-page decision and order denying reargument/renewal, Justice Solomon, merely stated that she was correcting a [*4]typographical error by adding the words "and bribery". In other words, it was clear the judge was not prepared to seriously entertain any of the substantive arguments introduced for the first time in the reargument papers.[FN3]

In the defendants' opposition and cross-motion, counsel argues in the first instance that no prima facie case has been made by the plaintiff because of plaintiff's failure to produce an expert affidavit as to what constitutes legal malpractice. Defendants also urge that based on an earlier decision by Justice Bransten, which was affirmed on appeal, that the plaintiffs must be unsuccessful here. Regarding an expert, the defendants do include in their papers an affidavit from an attorney, Kenneth Mauro, expert in civil appellate work, who opines that there was no malpractice.

Addressing these points in their reverse order, there has never been, as recognized by the Court of Appeals here, a decision or finding addressing the merits of this case, i.e., the claim of malpractice, so there exists no "law of the case" on this most important issue.

Second, the lack of an expert affirmation in the moving papers is not fatal. The argument put forth by the plaintiff that his former attorneys failed to exercise ordinary reasonable skill and knowledge commonly possessed by members of the legal profession practicing this kind of law, is not a particularly esoteric or technical one. While an expert affirmation can serve a useful purpose in channeling the Court's focus as to the relevant issues, an experienced Court can usually detect whether or not there has been competent presentation of arguments to defeat a summary judgment motion. Also, Kenneth Mauro's affirmation, served not only to oppose the motion by the plaintiff but to support the defendants' cross-motion as well. In the latter case, the plaintiff appropriately responded with an expert affirmation of its own, one by Brian Shoot, an expert also in civil appellate advocacy.

But most important, this controversy will not now be decided by this Court on technical arguments. While such serve their purpose, and this Court is not in any way criticizing the multiple decisions made during the long pendency of this case by itself and others, again the overriding principle gleamed by this Court from the Court of Appeals is that Eisen, P.C. has yet to have its day in court on the merits of its legal malpractice claim.The second argument proferred by the defense is an exhaustive discussion of the Aboud and Rehberger actions concluding that, despite the arguments made by it in its reargument motion that, in fact there were no viable claims apart from the fraud and no viable case to be made for constructive notice of the alleged negligent conditions in either action. In other words, the same law firm is now agreeing with the City's position in the first instance, one they forcefully repudiated in their reargument motion. [*5]

This brings the Court to another argument put forth by the defense, that the original papers opposing the City's motion were discussed with Mr. Eisen who approved of them before they were submitted. This is presented in affirmations from a member of the firm, John W. Mitchell and from an associate, Susan LaRossa. They claim that it was Mr. Eisen who essentially directed the opposition.

Mr. Eisen in his Reply adamantly denies these assertions. Frankly, I believe these assertions not only diminish the overall arguments proferred by the defense, but are also irrelevant. At the time of the summary judgment motion, Mr. Eisen was not only not co-counsel to the firm he retained, but he was a disbarred lawyer as well. Therefore, to suggest that he not only aided the defense decisions but directed them is not only inappropriate (if it occurred) but more important, does not relieve the law firm from proffering the best arguments it could come up with to defeat the motion. Arguably one of those was that the central premise of the City's argument was wrong.

In Reply, the plaintiff, via Mr. Shoot's affirmation, similar to what Mr. Mauro argued in his, presents his own take on the Aboud/Rehberger actions. Innumerable trees have been sacrificed in both of these efforts and this Court will not join in any further destruction. I find that in both actions, there was additional evidence that the plaintiff could at least point to to show that untainted evidence and constructive notice existed. Thus, the argument could have and can be made that the City would have in fact settled, or that a verdict by a jury favoring the plaintiff could have occurred.

This brings the Court to its final discussion of what precisely the plaintiff has to prove to recover from the defendant, and whether either side is deserving of having its motion granted.

As everyone here acknowledges, because it is the law (!), a plaintiff in a legal malpractice case, must do more than simply allege and prove that his attorneys were negligent in representing him; he also must show that the negligence made a difference in the outcome, so that a plaintiff must show that he would have prevailed or received a greater award but for the negligence of his lawyer. [See, e.g., Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438 (2007)] Or in the case of a defendant, would not have suffered the damages he did. The latter situation is what the plaintiff argues here. He urges that because there was ample evidence to show the cases would have likely settled or been successfully tried without the tainted evidence, even if those awards might have been less than was actually received, the damages that he ultimately paid back to the City would have been less, and perhaps much less. The opposing sides differ as to how much the plaintiff has to prove on that point at this stage of the proceedings.

In this regard, a legal malpractice action has often been described as a trial within a trial. This is so because the plaintiff must adduce evidence that shows at least a likelihood that he would prevail on the underlying merits of the case. So, for example, in the First Department decision, Tanel v. Kreitzer & Vogelman, 293 AD2d 420 (2002) the Appellate Division found that the defendants' motion for summary judgment in the malpractice action should have been granted. While it was conceded that the defendant law firm was negligent in failing to move for a default judgment within one year of the hospital's default, the plaintiff had failed to successfully oppose the affidavit of the medical expert who opined that there was no medical malpractice. Therefore, the plaintiff was unable to show the underlying case had merit or that but for the negligence of the [*6]defendant, they would have prevailed. All that was required there, as suggested by the Court, was to successfully present competing proof to show that their claim had merit. But they did not and so the action was dismissed.

But here, the plaintiff does show, despite the contrary arguments made by defense counsel, that in both actions there was testimony and documents to prove a prima facie case on the issue of constructive notice, the only seriously contested issue, without the use of the tainted evidence. The 1995 reargument papers by the defendant, for which they must take responsibility, prove that point.

So has the plaintiff here done enough to satisfy the "but for" element of a legal malpractice case? I believe it has. As the Court said in Gladden v. Logan, 28 AD2d 1116 (1st Dep't, 1967):

Obviously it is impossible to show conclusively that had that action gone to trial it would have resulted in a verdict favorable to plaintiff. What plaintiff must do is to prove such facts in regard to the accident as enables a jury to find that she would have recovered.

As was said in Zarin v. Reid & Priest, 184 AD2d 385 (1st Dep't. 1992 citing to Carmel v. Lunnay, 70 NY2d 169). "The test is whether a proper defense would have altered the result of the prior action.' "The plaintiff maintains that it is likely here that it would. The defendants insists that it would not have. Thus, I find a classic dispute regarding the interpretation to be given to the same facts. This, then, should result in a denial of both motions, and it does.

Eisen, P.C. should finally have its day in court on its claim that the defense did not adequately oppose the City's motion leading to a settlement in the latter's favor for over a million dollars. There were factual contentions made by the City in that motion that were never challenged. That arguably was not simply a matter of judgment. I say that, because nowhere in the voluminous papers submitted by the defense, is the argument ever made that there were good reasons or any reasons for the omission. The only explanation proferred was that it was Mr. Eisen's idea and decision to exclude that argument. For reasons previously discussed, that is not good enough.

The plaintiff is not entitled to summary judgment on liability because it is part of its burden in a legal malpractice to show both aspects, i.e., that there was substandard representation which influenced the result in an unfavorable way. The defendants counter that they were not negligent, or that even if they were, there would have been no different result.

Accordingly, it is hereby

ORDERED that plaintiff's motion for partial summary judgment on liability is denied, and it is further

ORDERED that defendants' cross-motion for summary judgment is denied; and it is further

ORDERED that counsel shall appear in Room 222 on April 28, 2010 at 9:30 a.m. for a status conference.

This constitutes the decision and order of this Court.

Dated: April 7, 2010

___________________________ [*7]

J.S.C. Footnotes

Footnote 1:In total, the Government charged fraud in eleven personal injury actions and these three were part of that eleven.

Footnote 2:Aboud involved an automobile accident that occurred in the left lane, Manhattan-bound side of the Queensboro Bridge. The matter had proceeded to trial in May, 1984 wherein the plaintiff testified that his left front wheel had hit a pothole forcing the car across the double line. As a result, he suffered very severe injuries. At the trial, counsel for Aboud called a witness, Arnold Lustig, who testified that he observed the accident which was caused by Aboud's car hitting the very same pothole that Lustig had hit some five to seven days earlier. Lustig also produced photographs showing the pothole and damage to his own car. All of this was false evidence, including the photographs, that had been fabricated, and this falsity had been proved during the Federal trial.

Rehberger was tried in January 1984. It was a slip and fall case on an ice patch outside of co-defendant's Glenwood Racquet Club. There, the false testimony (also presented and proved in the Federal trial) consisted of Frederick Goldstein's statement that he observed Rehberger's accident. He also stated that the ice had formed as a result of a faulty pipe in the Club's wall which he had complained about on at least one prior occasion.

Footnote 3:In the first decision, Justice Solomon also granted the City summary judgment on the §487 claim, tripling damages. It appears the defendant made no argument against granting this relief. However, here plaintiff argues that judgment would not have been granted on that cause of action either because §487 requires both a finding that the attorney was deceitful but also that the deceit caused damages, which again had to be proved. This argument was responsive to defendants, in their cross motion that the §487 judgment had a justification outside of the "but for" issue, in the first cause of action. But plaintiff argues these two were inextricably tied.