Cusimano v Wilson, Elser, Moskowitz, Edelman & Dickler, LLP

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Cusimano v Wilson, Elser, Moskowitz, Edelman & Dickler, LLP 2013 NY Slip Op 32148(U) September 9, 2013 Supreme Court, New York County Docket Number: 152754/2013 Judge: Cynthia Kern Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 09/10/2013 1] INDEX NO. 152754/2013 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 09/10/2013 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY CYNTHiA s. KERN J.s.c. kcYh PRESENT: PART Justice 55 INDEX NO. MonoNDATE~ -v- I 15 2JETt 13 MonON SEQ. NO. 00 I The following papers, numbered 1 to _ _ , were read on this motion tolfor _ _ _ _ _ _ _ _ _ _ _ __ Notice of Motion/Order to Show Cause - Affidavits Answering Affidavits - Exhibits Exhibits _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Replying Affidavits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ I No(s). _ _ _ _ __ I No(s). _ _ _ __ I No(s). _ _ _ __ Upon the foregoing papers, it is ordered that this motion is . h the an nexe d w decision . ·ded in accordance Wit u i= (/) 1s dee\ .., ::I g c W 0:: 0:: W u.. W 0:: )-..:.:. ...J!!!. ...J z ::I 0 u.. (/) I- ~ U ~ W 0:: (!) W W z (/) _ ~ 0 0:: - W ...J (/) ...J ~ 0 u u.. Z ~ o Ii= 0:: o 0 :E u.. _ _ _-:-l~~~-EE4S0a.uN.--', J.S.C. c--(N'T\-\\~ . J.s.c. o 1. CHECK ONE: ..................................................................... i'CASE DISPOSED 2. CHECK AS APPROPRIATE: ........................... MOTION IS: D GRANTED 3. CHECK IF APPROPRIATE: ................................................ D SETILE ORDER DDO NOT POST D DENIED NON-FINAL DISPOSITION D GRANTED IN PART D OTHER D SUBMIT ORDER o FIDUCI.\RY APPOINTMENT D REFERENCE [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: Part 55 -------------------------------------------------------------------x RITA S. CUSIMANO, I Plaintiff, Index 152754/2013 I -against- DECISION/ORDER WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKLER, LLP and ED BOYLE, Defendant. -------------------------------------------------------------------x HON. CYNTHIA S. KERN, J.S.c. Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion for: ------------------------------------Papers Nwnbered Notice of Motion and Affidavits Annexed.................................... Answering Affidavits............. ......................................................... Cross-Motion and Affidavits Annexed .......................................... . Answering Affidavits to Cross-Motion .......................................... . Replying Affidavits ..................................................................... . Exhibits...................................................................................... Plaintiff commenced the instant action alleging that defendants I :2 '3 n~gligently represented her in an underlying arbitration. Defendants now move pursuant to CPLR § 321 1(a)(1), (a)(5) and (a)(7) to dismiss plaintiff's complaint with prejudice on the grounds that: (1) the record from the underlying litigation unequivocally establishes that plaintiff's claim is without merit; (2) plaintiff is barred from asserting her claims by collateral estoppel; and (3) plaintiff's complaint fails to state a cause of action as a matter oflaw. For the reasons stated below, defendants' motion is granted. [* 3] The relevant facts are as follows. In April of2010, plaintiffretai~ed defendants Ed Boyle ! ("Ed Boyle") and Wilson, Elser, Moskowitz, Edelman & Dicker LLP ("~ilson Elser") to I represent her interests in connection with a family asset. Thereafter, Boyle and Wilson Elser initiated a special proceeding on behalf of plaintiff against her sister in Supreme Court, Nassau ,I 1 County seeking dissolution of the Strianese Family Limited Partnership ("FLIP"). Bernard and 1 Carmella Strianese, plaintiffs parents, intervened in the action for an accounting and dissolution, I I asserting that they remained the majority owners of the FLIP. They furtl].er asserted that the FLIP I Agreement governed the dispute and as such was subject to arbitration. !he Supreme Court, Nassau County permitted intervention by stipulation and order dated May 24,2010, and granted I interveners' motion to compel arbitration. In December 2010, arbitration commenced before the American Arbitration Association ! (the "AAA"). The issue on arbitration was whether the parents transferred 100% of the FLIP to .I their daughters. During arbitration, plaintiff argued that her parents gifte~ full ownership of the FLIP to herself and her sister Bernadette and no longer owned any part of the FLIP. Specifically, : plaintiff and her sister sought to invoke, inter alia, the doctrine of tax est?ppel on the ground that the tax returns of the FLIP did not reflect her parents' ownership and as such her parents should be estopped from claiming ownership during arbitration. In opposition to this argument, plaintiffs parents offered evidence demonstrating that the FLIP's accou~tant and plaintiffs sister Bernadette were responsible for preparing the FLIP's tax returns from 2001 on and that those tax returns were signed by Bernadette, not Bernard. Bernadette herself testified that the 2001-2009 i tax returns for the FLIP were signed by her in Bernard Stiranese's name. '; Only the FLIP's tax returns were offered into evidence. 2 [* 4] ;. On February 10, 2011, the AAA issued a decision and award, as modified, determining I 1 i that the parents retained roughly 91 % ownership in the FLIP, while plair).tiff and her sister had amassed 4.5% ownership interests each (the "Award"). Specifically, the, arbitration panel stated: "We did not find either [of respondent's] position[s] credible, nor the various tax and Florida filing documents they offered sufficient to equitably estop Claimants from asserting their rightful ownership interest or to legally effectuate a transfer." Following the arbitration decision, plaintiff terminated her relationship with defendants I Boyle and Wilson Elser and retained new counsel to continue litigating the matter. The Strianeses moved to confirm the Award and plaintiff and her sister cross~moved to vacate the Award on the ground that the arbitration panel should have applied the doctrine of tax estoppel to preclude the parents from asserting ownership in the FLIP. By decision ~ated August 10, 20 11, the Supreme Court, Nassau County denied the cross-motion in its entirety and confirmed the Award (the "Supreme Court Decision"). Specifically, the court noted th~t as to the tax estoppel 1 issue, the arbitrator could have denied the application of tax estoppel on any of the following grounds: (1) Bernadette and the FLIP's accountant's testimony confirming that Bernadette had provided all the information for and signed the FLIP's tax forms from 2001 through 2009; (2) the 1 ; fact that the 1998 FLIP tax return, the last one signed by Bernard, reported 50% partnership shares for each of plaintiffs parents; and/or (3) the arbitrators could hav~ believed that the partnership shares reported or the reported assets reflected error by the FLIP's accountant that were not known to either of plaintiffs parents. Additionally, in dicta, the court noted "neither is I there an already established precedent that the application of tax estoppel, is not subject to an , arbitrator's independent judgment." 'I 3 [* 5] Thereafter, plaintiff appealed the Supreme Court Decision to the Appellate Division, Second Department. The Second Department affirmed the trial court's decision. Plaintiff then moved for reargument and/or for permission to appeal to the Court of Appeals. Reargument was denied. On appeal, the Court of Appeals denied in part and dismissed in part, finally disposing I of plaintiffs underlying action. On or about March 26, 2013, plaintiff commenced the instant action asserting a claim for malpractice against defendants based on their failure to introduce her parent's individual tax returns during arbitration, which she contends would have estopped her parents from asserting I ownership of the FLIP as a matter oflaw during arbitration. On a motion addressed to the sufficiency of the complaint, the facts pleaded are assumed to be true and accorded every favorable inference. Morone v. Morone, 50 N. Y.2d 481 (1980). "[A] complaint should not be dismissed on a pleading motion so long as, when plaintiffs allegations are given the benefit of every possible inference, a cause of action exists." Rosen v. Raum, 164 A.D.2d 809 (151 Dept 1990). However, "'[i]n those circumstances where the legal conclusions and factual allegations are flatly contradicted by documentary evidence they are not presumed to be true or accorded every favorable inference. '" Morgenthow & Latham v. Bank of New York Company, Inc., 305 A.D.2d 74, 78 (l51 Dept 2003) (quoting Biondi v. Beekman Hill House Apt. Corp., 257 A.D.2d 76, 81 (151 Dept 1999), aff'd, N.Y.2d 659 (2000)). Additionally, I i "conclusory allegations-claims consisting of bare legal conclusions with no factual specificity-are insufficient to survive a motion to dismiss." Godfrey v. Spano, 13 N.y'3d 358, 373 (2009). In order to state a claim for legal malpractice, "the plaintiff must plead factual allegations '0' 4 [* 6] which, if proven at trial, would demonstrate that counsel had breached a duty owed to the client ; [i.e. acted negligently], that the breach was the proximate cause of the injuries, and that actual damages were sustained." Dweck Law Firm, LLP v. Mann, 283 AD.2d;292, 293 (1 sl Dept 2001). Specifically, "in order to survive dismissal, the complaint must show that but for counsel's alleged malpractice, the plaintiff would not have sustained some actual ascertainable damages." ; Pellegrino v. File, 291 AD.2d 60 (1 sl Dept 2002) (internal citations omi~ted). Stated another way, "the client must plead specific factual allegations establishing that ?ut for counsel's deficient representation, there would have been a more favorable outcome to the underlying matter. Dweck Law Firm, LLP, 283 AD.2d at 293. "Unsupported factual allegations, ! conclusory legal argument or allegations contradicted by documentation, do not suffice." Id In the present case, plaintiff cannot maintain a claim for legal malpractice against defendant as she cannot demonstrate that but for defendant's failure to introduce her parents' individual tax returns, she would have received a more favorable outcome in the underlying , arbitration as a matter oflaw. "[T]he doctrine of tax estoppel precludes a party from asserting a position in litigation when that position is contrary to the position taken by the party in their tax I I 1 returns." Mahoney-Buntzman v. Buntzman, 12 N.y'3d 415, 422 (2009). ,However, whether or ! not to apply the doctrine of tax estoppel is within an arbitrator's discretion as "arbitrators are not I bound by principles of substantive law or rules of evidence." Lentine v. Fundaro, 29 N.Y.2d ", , 382,385 (1972). Indeed, as the court noted in the Supreme Court Decision in this matter, there is not an "already established precedent that the application of tax estoppeLis not subject to an ·1 arbitrator's independent judgment." Accordingly, plaintiff cannot demonstrate as a matter of law that the introduction of her parents' individual tax returns would have changed the outcome of 5 [* 7] the arbitration. Instead, plaintiffs allegation that "[h]ad defendants obtai,ned [the] individual returns and submitted them into evidence, the Strianees, as a matter of law, would have been estopped from claiming an ownership interest in the FLIP," is merely speculative, which is insufficient to sustain a claim for legal malpractice. Moreover, while not dispositive of the issue, the arbitration record suggests that plaintiffs tax estoppel argument based on her parents' individual tax returns would have suffered the same fate as the FLIP return as plaintiffs father testified during the arbitration that his daughter Bernadette was solely responsible for providing the accountant the information to prepare his individual tax returns as weIl. Additionally, to the extent that plaintiff also argues in her opposi!ion papers that defendant committed malpractice by failing to procure FLIP distribution checks from her sister, such contention is without merit. As an initial matter, plaintiffs complaint is devoid of any allegations relating to these checks. Additionally, it is not clear in what way these checks could serve to demonstrate malpractice by defendants. , Based on the foregoing, defendants' motion to dismiss is granted. The Clerk is directed to enter judgment accordingly. This constitutes the decision and order ofthe court. Dated: Enter: l.S.C. CYNTH1A s. 6 Kf~~.

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