Schulman v Rea
Annotate this CaseDecided on November 8, 2012
County Court, Sullivan County
Mark Lewis Schulman, Plaintiff-Appellant,
against
Joseph Rea, Defendant-Appellee.
2238-12
Mark Lewis Schulman, Esq.
P.O. Box 945
Monticello, NY 12701
Attorney for Plaintiff-Appellant
Robert W. Fink, Esq.
P.O. Box 900
Goshen, NY 10924
Attorney for Defendant-Appellee
Glenn Kroll, Esq.
P.O. Box 10
Bloomingburg, NY 12721
Attorney for Defendant-Appellee
Frank J. LaBuda, J.
Plaintiff-Appellant (Appellant) appeals a Town of Delaware Justice Court decision rendered on July 16, 2012 (Hon. Eric J. Nystrom), dismissing Appellant's complaint. Appellant has submitted a notice of argument, brief and appendix.
Defendant-Appellee (Appellee) has submitted a reply brief in opposition.
This is a small claims action wherein Appellant, an attorney, alleges he was hired by Appellee to perform various legal services. Appellant claims legal services were performed and Appellee failed to pay him. This matter previously came up to this court on appeal, due to a technical error on the lower court's part in dismissing the action, and was remanded. On remand, the trial court again dismissed the complaint on the ground Appellant failed to comply with 22 [*2]NYCRR §137.6 in that he did not allege in his complaint that he (1) informed Appellee of Appellee's right to arbitrate the fee dispute and Appellee did not do so in a timely manner, or (2) that the fee dispute was exempt from compliance with 22 NYCRR §137.
Complying with 22 NYCRR §137.6 is necessary when bringing an action for fees.
....An attorney who institutes an action to recover a fee must allege in the complaint:(1) that the client received notice under this Part of the client's right to pursue arbitration and did not file a timely request for arbitration; or (2) that the dispute is not otherwise covered by this Part.
22 NYCRR §137.6(b). The failure of an attorney to comply with the rules "incurs dismissal." Bainton McCarthy. LLC v. CBC Capital Ventures, Inc., et al., 18 Misc 3d 1118A [Sup. Ct. Nassau Co. 2008]. Courts consider such compliance a threshold in any action brought by an attorney to recover fees. Mintz & Gold LLP v. Daibes, 2011 NY Misc LEXIS 1777, 2011 NY Slip Op 30985U [Sup. Ct. New York Co. 2011]. " Generally, where a plaintiff-attorney fails to satisfy the pleading requirements of 22 NYCRR 137.6(b), he appropriate remedy is dismissal of the action with leave to re-plead or without prejudice to a new action.'" Id., citing, Abramson Law Group, PLLC v. Bell, 28 Misc 3d 135A [App. Term 1st Dept. 2010].
When, however, a matter has already been arbitrated, the issues and concerns raised in Part 137 are "obviated." Zucker v. Russo, 2008 NY Slip Op 30581U, 2008 NY Misc LEXIS 8344. In such cases, even though the "complaint is in fact deficient and would be subject to dismissal for its failure to plead compliance with or an exemption from [Part 137]," dismissal is not required. Id.
Appellant argues (1) he had no obligation to comply with Part 137 because this matter was arbitrated before the Sullivan County Bar Association; and (2) Appellee is barred from raising the affirmative defense of noncompliance with Part 137 because he failed to raise it in his answer or other responsive pleading.
The parties agree that the Sullivan County Bar Association Grievance Committee conducted some type of arbitration of the matter in 2009.[FN1] Appellee then sought relief through arbitration by filing a request for fee arbitration with the Unified Court System, Third Judicial District in early April, 2012. The request was denied later that month due to time-related requirements in the rules. Therefore, regardless of whether the Sullivan County Bar Association arbitration complied with the requirements of part 137, Appellee was clearly aware of his right to arbitrate, thereby "obviating" Appellant's need to comply with Part 137. Zucker v. Russo, supra.
The trial court's decision to dismiss Appellant's complaint is hereby reversed.
As for Appellant's second issue on appeal, this Court will not reverse the trial court's [*3]denial of Appellant's motion for default judgment. The trial court, fully familiar with the proceedings and appearances in this matter, determined Appellee submitted sufficient explanation and defenses to the court as to why he did not timely file and serve a verified written answer. See, Mitchell v. Mid-Hudson Medical Associates, 213 AD2d 932 [3rd Dept. 1995]. There is no indication in the record on appeal that Appellee wilfully failed to file the written answer; to the contrary, it appears there was some confusion as to whether and at what point an answer was initially required.
Based upon the above, it is
ORDERED that the Town of Delaware Justice Court's decision dismissing the complaint is reversed, and it is further
ORDERED that the matter is remanded to the Town of Delaware Justice Court for further proceedings in accordance with this Decision and Order.
This shall constitute the Decision and Order of this Court.
DATED: November 8, 2012
Monticello, New York
______________________________
Hon. Frank J. LaBuda
Sullivan County Court Judge
and Surrogate
Footnotes
Footnote 1:Neither party has presented independent evidence or information as to whether that arbitration complied with the guidelines in the rules.
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