Brausch v Devery
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Brausch v Devery 2018 NY Slip Op 31929(U) August 7, 2018 Supreme Court, Suffolk County Docket Number: 11-28918 Judge: Denise F. Molia Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [* 1] SI IUIU H >R~I ORDl:R INDEX No. CAL. :o. 11-28918 l 6-020520T SUPREME COURT - STA TE OF NEW YORK l.A.S. PART 39 - SUFFOLK COUNTY PRESENT: MOTIO DE 1JSE F. MOUA Acting Justice of the Supreme Court Hon. DATE ADJ. DATE ..f-21-17 1:2-19-17 Mot. Seq. # 00 I - MotD ---------------------------------------------------------------)( RAPPAPORT GLASS GREENE & LEVINE. LLP Attorney for Plaintiff 1355 Motor Parkway Hauppauge. cw York 11749 DANIEL A. BR/\ USCH. Plaintiff. KAUFMAN DOLOWrCI l & VOLUCK. LLP Attorney for Defendants Devery I 35 Crossways Park Drive. Suite 201 Woodbury. New York I I 797 - against BRIA. S. DEVERY. STEPHA IE N. DEVERY, DEVERY & DEVERY. PLLC. T HE DEV ERY LAW GROUP, P.C., fRANK A. RACANO and FRANK A. RACANO, P.C., FRANK A. RACANO, P.C. Attorney for Defendants Racano P.O. Box 140131 Howard Beach. New York 11414-0 I 3 1 Ddendants. ---------------------------------------------------------------)( L pon the following papers numbt.:rcd I ro ~read on this motion for summan judgment: Notice of Motion Order to Show Cause and supporting papers I - 66 : 1nticc of Cross Motion and supporting papers _ : Ans\\'cring Affidavits and supporting papers 68 - 82 : Replying J\ f'fidavits and supporting papers _: Other memoranda of law 76. 83 - 8..J : (.111cl uftet !tearing counsel i11 st1pp01t a11d oppMcd to tlic: 111otio11) it is. ORDERED that the motion by the defendants Brian S. De\W). Stefanie >J. De,·ery. Den:r) & De,·er) . PLLC. and The Oe\'ery La\\· Group. P.C. for an order pursuant to CPLR 3212 granting summary judgment dismissing the plaintitrs complaint is granted to the extent that the complaint against the defendant Stefanie N. DeYery is dismissed. and all claims legal malpractice against said defcndunts. except those im·o h·ing the en tr) of ce11ain judgments in the underlying action indicated belO\\. are dismissed . and is othcrn ise denied. or This action \\·as commenced to recover damages sustained by the plaintiff due to the al kgeJ legal malpractice or the defendants. It is undisputed that the plaintiff retained the dcfenuant De,·ery & De,·ery, [* 2] Brausch ,. Devery Index No. 11-~89 l 8 Page 1 PLLC (the Den~ry lirm) to clefontl him. and to prosecute cenain causes or al:tion against third-parties. in an underlying action entitled Agnes DiChiarn and .!£.\I Technirnl .<;enices. Inc.. Plaintiffs. against .-/&A .·Iulo Sales. Inc. und Daniel .-1. Brnusch. De/e11do11rs Third-Por11 · Plaintiff.\·. a~uinsr £ m es! DiChiuru. . . . ' ~ Fleet .\ational Bank Bank of'Americu . .\'orth Furk Bank. C)·cle Financial Se1Tices. Inc.. Richard 801111C!r. and Chriswpher _\/archese. Third-Party Defe11da11fs. Supreme Court. Suffolk County. Index o. 0-f16T27 (the underlying actio n). Imrrn:<liatel) prior lu the cummencement of the underlying action. the plaintiff \Yas the O\\·ner and sole sharehokkr of the de fondant A&A Auto Sales. Inc. (A&A ). a used car dealership located in Ccntcreach. New York. A t that time. the third-party defendant Ernest DiChiara (E rnest) vvas emp loyed by A&A. A&A had t\\'O bank accounts with the third-party derendant Fleet Nationa l Bank/Bank of America (Fleet). A&A had three bank accounts '";ith the third-party defendant ·orth Fork Bank ( rFB). and A&A had retained the third-party defendants Cycle Financial Services. Inc., Richard Bonner, and Christopher Marchese (CFS) to provide certain accounting services to the corporation. In approximately June 2004. the plaintiff discovered what he believed to be financial improprieties by Ernest including alleged fo rgeries of /\&A checks. The plain ti ff filed affidavits '' ith Fleet indicating that he did not authorize or consent to the making of the signatures on the subject checks. Thereafter, the plaintiff discovered what he believed were additional financial improprieties by Ernest, and he filed affidavits with FB indicating that certain checks were forgeries made by Ernest. The plaintiff also discovered what he alleges is a fraudulent loan made to A&A by Ernest's mother, the plaintiff in the underlying action. Agnes Di Chiara (Agnes). which allegedly allowed l:rnest to misappropriate the loan proceeds. Agnes commenced the underl ying action in .January 2005. alleging that the plaintiff and A&A had failed to repay the loan, and that the loan proceeds were to be used. in part, fo r the plaintiffs personal use. Initially, the plaintiff herein was represented by a different law finn. which served an amended answer to Agnes· complaint asserting two co untercl aims against her. and served an amended third-party complaint asserting causes of action against Ernest. Fleet NFB. and CFS. On or about November 3. 2006. Agnes served an amended complaint in the underlying action which added JEM Technical Services. Inc. (.IEM). a corporati on \\hich :;he comrolku. as a plaintiff. ulkgine. that sh.:: had ddiYcred a portion of the loan proceeds out of a JEM bank account (collectively Agncs/.IEM). By order dated December 11. 1007. the plaintiffs prior counsel was permitted to withdraw. By order dated May 29. 2008. the C0urt (Pitts. .I.) directed .. new counsel for lA&A] and rthe plaintiffl to sern! and file a notice of appearance on counsel fln all parties before 6'2'08."" and said parties --w scn·c [a] reply to Flect"s counterclaim 011 or beti.m: 6/ 13/08."" B' letter dated .June 2. 2008. the defendant Frank A. Rm:ano (Raca no) . filed a notice or appearance. with service on all parties. wh ich indicated that the De\\!ry firm had been retained as counsel for the plaintiff and A&A in the underlying action. and that he appeared of counsel to the Den~n · ti rm. At a conrercnce held on September -f. 2008. the uttorne: for Fleet made an ornl appl ication for a default judgment based upon the alkged failure of A&t\ and the plaintiff to sen·e a reply to its counterclaim pursuant to the order of May 29. 2008. J\ so-ordered stipulation that date. executed by all parties. includin g Racano in his capac ity as or counsel to the Devery tirrn . directed counsel for /\&A and [* 3] l3rausch ,. Devery Index No. 11-28918 Page 3 the plaintiff to proYide proof or service of said repl y by September 9. 2008. and directed Agncs/JEM "to se1Ye the amended complaint [in the underlying action] which was the subject of the co urt' s 7/ 11/07 order on or before 91I I /08 ... Therealicr. Agncs/.IEM and rleet 1110\ed for default judgments based upon the alleged failure of the De,ery firm to serve responses to their respectin~ pleadings. In opposing the motions. Ra<.:ano submitted affidavits of service notarized by him and allegedly signed by a secretary employed by the Devery firm. By order dated May 8. 2009. the Court (Pitts. .I.) scheduled a traverse hearing t(.)r June I I. 2009 ro determine whether A&A and the plaintiff had timely served an answer to Agnes/JENI' s amended complaint and a reply to the counterc laim contained in Fleet' s verified answer. At the traYerse hearing held before .Justice Pitts on June 11. 2009, Michael A. D' Emidio. Esq. appeared on behalf of Racano. D' Emidi o stated Racano \\'as or counsel to the Devery firm. that Racano had a conflict and had asked him to appear on Racano 's behalf. and that he did not have any witnesses to prese nt. The Court stated that, in setting down the hearing. ··it was the Court' s expectation that the representatives from [A&A and the plaintiftl would be calling the legal secretary. who signed the affidavit of service so as to ... establish that service was made." After continuing the hearing. Justice Pitts verbally granted the respective motions for default judgment. and directed the parties to submit orders on notice. By short fo rm order dated October 29, 2009. the Court (Pitts. J. ) granted the respecti ve motions for default judgment. directed the clerk of the court to enter the judgments submitted by the parties. struck the ansv.·er of A&A and the plaintiff. and dism issed with prejudice all of the third-party actions and cross claims against the third -party defendants. The Devery firm and Racano did not take any action regarding the order of October 29. 2009 or the entry of the judgments against A&A and the plaintiff. The plaintiff commenced thi s action for legal malpractice by the tiling of a summons and complaint on September 13. 20 I I. In his complaint. the plaintiff alleges that the defendants failed to exercise reasonable care. skill and diligence on the plaintiffs behalf: failed to timely submit an unswcr to the amended comp laint: !'ailed to timely submit a reply to the counterclaim of Flet:t: failed to proper!) defend the plaintiff in the underlying action: foiled to propcrl) pi-oscc utc the third-p::irty ac ti on: failed to present testimony at the hearing before Justice Pitts held on .June 11. 2009: failed to attempt to adjourn said hearing to properly prepare fo r it: failed to mo ve to rearguc or to appeal the decision rendered hy .Justice Pitts at the conclusion or said hearing: permitted the subject judgments to be entered aga inst the plaintiff: alllrncd the rcspcctin: default motions to be granted: permitted the thi rd-party action to be dismissed in its entirdy: and tHhern isc acteJ careless ly. unskillfully. negligently. and not in accordance "·ith the accepted stamlards of care and the accepted standards or legal sen·ices ordinarily possessed by those holding themscln~s out to be attorneys licensed to practice la\\· in the State of Ne\\' York. The defendants Brian S. Dc\\:ry ( f)c,·ery). Stefanie :.J. De\ er:. the De,·ery fi rm. and The De,·cry I.m,· Group. P.C. (the Dc,·cry Group) (coll ectively. the Devt:ry clefrn<lants) now mo,·c for summary judgment dismissing the complaint and all cross claims against them . The proponent of a summary j udgmcnt motion must make a pri ma facie sho\\ ing of enti tlcmcnt to judgment as a matter or law. t<:nJeri ng sufficient e\ idcnce to eliminate any material issue of fact (see Alvarez v Prospect Hospital. 68 [* 4] Brausch \' De,·ery Index No. 11-289 l 8 Page .+ . Y2d 320. 508 >JYS2d 923 [ 1986]: ~J'i11egrad •·Ne"' York U11fr. Med. Ctr.. 64 >JY2d 851 . .+87 NYS::?.d 3·16 [ 1985 !). The burden then shifts to the party opposing the motion ,,·hich must produce eYidentiary proof in admissible form sufficient to require a trial of the material issues o!' !act (Roth v Barreto. 289 AD2d 557. 735 J\YS2d l 97 [2d Dept 2001 J: Rebecc/Ji v Whitmore. 1T2 !\02d 600. 568 NYS2d 423 [2d Dept 1991 j: O'Neill•• Town of Fisl1kill. 134 AD2d-l87. 521 . YS2d 2T2 [2d Dept 1987]). Furthermore. the parties· competing interest must be Yiewcd .. in a light most ftt\·orable to the party opposing the motion .. (Marine lV/idla11d Bank, N.A. •'Dino & Artie's Automatic Tm11smissio11 Co .. l 68 AD2d 610. 563 YS2d .+.+9 [2d Dept 1990] ). Hom~ver. mere cone Iusions and unsubstantiated al legations are insufficient to raise any triable issues of fact (see Zuckerman 1• Ci(r of New York. 49 NY]d 557. 427 NYS2d 595 ll 980): Perez v Grace Episcopal C!turclt. 6 /\D3cl 596. 774 NYS 2d 785 f2d Dept 2004]: Rebecchi v Whitmore. supra). In suppo rt of their motion. the DeYcry defendants submit. among other things. the rcle,·ant pleadings in this action and the underlying action. the transcripts of the deposition tc~timony ol' the plaintiff Devery. Racano. and nonparty Richard Bonner. 1 numerous documents assoc iated with A&A 's bank accounts and banking transactions. a number of affidavits from experts and notices of expert di sc losure. and copies of the relevant orders and judgments referenced herein. At his deposition. the plaintiff testi lied that he was the so le om1er of A&A. that Ernest was his brother-in-law and an employee or the corporation, and that he and Ernest would handle the books and records for A&A. He stated that Ernest paid the businesses· accounts payable by preparing checks fo r the plaintiff to sign. that Ernest did not have an official title, and that he never allowed Ernest to hold himself out as the general manager of A&A. He further stated that he was present at a court proceeding brought by the Town of Brookhaven against A&A. and that he did not object when Ernest identified himself as the general manager and operating officer of A&A. He indicated that in .June of 2004 he learned that three checks were written on an A&A Fleet checking account \\"ith ,,·hich he was not familiar. that he spoke with the branch manager at Fleet vvho apologized, told him that Ernest had opened the account. and suggested that he call the police. The plaintiff further testi lied that it is not his signature on the certi licate of authority for the Fleet checking account. that check num her 93 drawn on the Fleet checking account and 111ade out to cash in the amount of $17 .250 contains Ernest· s signature. and that. unti I June 2004. he was not aware of the subject checking account. He indicated that he had opened a line of credit account with Fleet in September 200.2 (Fleet LOC ). that he had personally guaranteed payment of the linc of credit. and that he later learned that Lrnest had obta ined an /\TM card for the Fleet LOC and had made ATM withdra\\'als from sa id account. I le stated that he filed artidm·its with Fleet indicating that certain checks dram1 on the Fleet checking account and the Fleet LOC were forgeries. and that some A&A employees \\ere paid with checks made out to cash. The plaintiff rurther testified that he opened three accounts at NFB: namely a checking account (\lFB checki ng). an >JFl3 eBay account. and a NFB rescn·e account. He stated that he visited I .iction. Bonner \HIS u third-part: c.lcll:ndant and u principal in the third-purl) defendant cr:s in the under!) ing [* 5] Brausch v Devery Index No. 11-28918 Page 5 NFB in .luni.:! 2004 and spoke \\'ith a \'ice president who indicated so meth ing to the effect that the bank knc\\· he was not signing all of the checks dnmn on the NFB accounts. and that Ernest left A&A two or three days after that meeting taking all of the corporate paperwork and hooks \rhen he ldi. He indicated that he tiled affidaYits ,,·ith NFB indi<.:ating that certain checks drawn on the three ~FB accounts were fo rgeries. and that some of the forgeries appear to reflect payment of legitimate A&A expenses. The plaintiff further testified that. at some point. Agnes commenced an action against him and A&A claiming that :-.he had loaned money tu t\&A. that the endorsements by A&A on the checks sent bj Agnes arc not in his handwriting. and that he did not know \\·hy the checks were <leposited into A&A" s NFB accounts. I le stated that he did not know if the JEM checks to A&/\.. alleged to be loans in the amendeJ complaint in the underlying action. were deposited into any A&A accounts. He indicated that. when confronted. Ernest confessed to misappropriating funds from the corporation. that Ernest's mother. Agnes. gave him a check for $ 15.000 to permit A&A to pay its i ew York State sales tax obligations. and that Agnes stopped payment on the check before it could be credited to A&A 's account. The plaintiff further testified that. after his prior attorney withdre'vv from representing him in the underlying action. he was referred to the Devery firm. that he spoke with Racano. and that he met with Devery and Racano two times at their offices. He stated that De\·ery and Racano told him that they were partners. that Devery "'worked with banks and Mr. Racano was the negotiator:· and that he signed a retainer agreement and gave them a retainer of$ I 0,000. He indicated that he did not meet or speak with the defendant Stefanie N. Devery regarding the underlying action, that. at some point. Racano told him that he ..had lost the [underlying action] because of my previous attorney that didn·t do something:· and that Racano would not give him his legal file. He asserts that he had a friend go to Riverhead to investigate. and that he learned that Racano 's statement regarding his prior attorney was not true. The plaintiff further testified that. beginning in 2002. CFS \\"aS on a month!) retainer to provide accounting services to A&A. that CFS was "supposed to come in every couple of months to go through everything and make sure everything was going smoothly." and that CFS did not write the checks to pay A&:r\·s t:Xpenscs. I k indil:cw.:u tllul Ernest hull told him thut t-\&A · s bunh. statements "ere bc ins moiled directly to CFS. that he requested copies of the bank statements in December ~ 003 or .January ~004. approximately six months before he discovered that Ernest was misappropriating /\.&A ·s fund s. and that he never received those hank statements. He stated that f:'.rncst did not have a job atlenvards. that he did not kno\\' if Ernest had any assets. that the judgments against him required him to iilc for bankruptcy. and that the subject juJgmenb ''ere discharged in bankruptcy. De' cry testi lied that he and his \\'ife \\ere partners in the Oe\·ery firm. that Racano \\'C:ls of counsel tu the lirrn for two \\eeks. and thnt Racano·s first \\·ork ol"cnunsel to the Devery firm \\'as fo r the plaintiff. He stated that Racano \\as listed as of counsel on the De\·cry firm·s letterhead. that he and Racano drO\·e to pick up the tile in the under I) ing action. anJ that he and Racano mec ,,·ith the plaintiff thereafter. I le indicated that he introduced himself to the plaintiff at that initial meeting. that he told the plaintiff that he did not practice in the area of liti gation and that Racano was the litigator, that he bclie\·es the part ies entered into a written retainer. and that he told the plaintiff that Racano would transfer the retainer to Racano·s office once Racano opened his practice. He indicated that he <li<l nothing furtht:r regarding the [* 6] Brausch \' Devery Index ·o. I l-~8918 Page 6 litigation afkr that initial meeting. that he first learned of the dcfoultjudgments entered against the plai nti IT \\·hc:n this action was commenced. and that he ne,·er sa,,· Racano· s affida,·it in opposition to Agncs/JEM" s motion for a default judgrm:nt. or the al'Ji<.!a\'it or sen ice attached to J\&A and the plaintiffs purported reply 10 Fleet's countcrdaim. Dc\'ery further testified that the subject affida\'it of serYice ''as signed b) an employee of the Dc\·cry lirm. that he nc\·er Sa\\· Racano· s artidm·it in opposition to the motion for a default judgment dated December 1. 2008. \\'bi ch vvas signed b) Racano. of counsel. and that he ncver infonned the plaintiff that Racano was no longer of counsel to the Devery fi rm. At his deposition. Racano testified that he opened his solo practice in 1005. that he acted of counsel to the Devery lirm. and that he first met the plaintiff when Devery called him into a conference at the firm's offices. He stated that the plaintiff signed a retainer agreement with the Devery firm. that he n;\'iewed the plaintiff's file and reported to Devery that he believed the plaintiffs claims had merit. and that Devery asked him to assist in the hand ling of the plaintiffs case. He indicated that he did not recall whether a reply to Fleet ·s co unterclaim was served on behalf of A&A and the plaintiff pursuant to the order of Justice Pitts dated May 29. 2008. that he did not personally provide proof of service of said reply as directed in the so-ordered stipulation created at the conference held on September 4. 2008. and that he cannot say whether the employee of the Devery firm he woul d have asked to serve said proof did so. Racano further testified that he did not recall receiving a letter to his attention at the Devery firm which included a copy of the amended complaint in the underlying action and stated ··kind ly interpose an answer on or before the next scheduled conference on October 2. 2008. ·· He stated that there was no written termination of his status as or counsel to the Devery firm. that he believes he was still of counsel at the time of the traverse hearing on June I I. 2009. and that he had spoken with De\'ery about the need for the secretary who signed certain affidavits of service to appear at the traverse hearing. He indicated that he met with the plaintiff after .I usticc Pitts granted the subject motions for defau lt judgment on June I I. '.2009. that he adYiscd the plaintiff of the options available. including an appeal. a motion to reargue. or bankruptcy. and that he believed the plaintiff was not able to continue litigating the matter due to a lack of financ es. Racano also tcsti tied that the plaintiff eventually requested his ti k from the De,·ery firm. that he met the plainti IT on March I. 20 I 0 to de! ivcr the file pursuant to Devery' s direction to return the file. and that he had the plaintifT sign a tile release form. He stated that a change or attorney from the Devery firm to his lirm ,,·as newr signed or tiled. that he belie,·es he was paid for his scn·ices in this matter by the Dc\'\!ry firm and not by the plain ti ff. and that De,·ery was al\\'ays kept informed about the plaintiffs matter. and may have rc\·iewed some of the documents prepared by him. In an aftidm·it dah.:d April 30. ~007. Ernest S\\Cars that he recei\·ed t\\enty per cent of the shares or stock in /\&A as an inducement to manage the corporation. and that he c\·entually \\"as responsible for running the operations or A&A. including purchasing ne\\' i11\'entory. selling motor vehic les. paying the hills and payroll. and conducting its banking transacti ons. I le states that. due to A&A ·s cash flo,,problems. he arranged for loans from his mother ,,·ith the plainti tr s consent. that the proceeds or said loans were deposited into A&A bunk accounts and used for its operations. and that the plaintiff would instruct him on occasion to cash corporate checks in order to wire runds to the plaintiff ,,·hen he \\as on [* 7] Brausch ,. Devery Index o. 11-28918 Page 7 extended stays outside the United States. I le indicates that the plaintiffs signature on checks \\'ritten by him \\ere authorized by the plaintiff and used for legitimate business purposes. At his deposition. Richard Bohner. incorrectly sued in the underlying acti on as Richard Bonner. te::.tified that he is the president of CFS. and that CFS proYicled tax preparation sen·ices. performed bank reconciliations. and created summaries of banking transactions for A&A from August ~002 to August ~005. He stated that CFS received A&A "s linancial in format ion from Ernest. that it did not co nduct audits of A&.\· s finances or re\ ie\\· ,,·ho ''as signing checks for the corporation. and that no one at CFS \\'US aware or any accounting irregularities regarding A&A. In his affidavit. Leonard Fliegel swears that he is a certified public accountant licensed in the State of 1 e,,. York. that he has reYiewed certain relevant documents re1.tarding this act ion and the underlvin!.! .. ..... action. and that it is hi s opinion \\'ith a reasonable degree of accounting practice certainty that the CFS defendants acted reasonably and within the standard or care regarding the services provided to A&A. He states that the standards set forth in the American Institute of Certified Public Accountants Statement on Standards for Tax Ser\'ices No. 3. Certain Procedural Aspects of Preparing Returns provides that an accountant preparing a company's ta.x returns may rely in good faith. without verifi cation, on the informat ion provided by the client. He indicates that. under the circumstances herein. an accountant does not conduct a forensic analysis of signanires or endorsements on checks. and that only inconsistencies in the information provided by the client wou ld require an accountant to conduct further inquiri es. ~ ~ In hi s affidavit, Richard Feinsilver swears that he is an attorney licensed to practice law in the State of Nev< York. that he has successful ly prosecuted more than 7.500 consumer and small business bankruptcy cases, and that he has reviewed ce rtain documents and pleadings regarding the plaintiffs bankruptcy case and this action. He states that, as a result of the filing of a petition in bankruptcy, the subject judgments entered against the plaintiff are unenforceable. that the plaintiff has been discharged from any obl igation to pay the judgments or the underlying debts. and that the plaintiffs homestead in no longer encumbered by said judgments. He indicates that it is his opini on wi th a reasonable degree of k:gal practice certainly lhul the pluintiff wa:s in:sol\'ent prior tu the entry of either jud~;i1·11:'!nt against him. In her affidavit dated February 1O. '.W<l7. Agnes swears that she had at least three telephone conn:rsations ,,.i th the plaintiff rcgarding the de! ivery of loans to hi 111 and his corporation. that he agreed to repay the monies together ,,·ith interest. and that he requested an additional loan of S 15.000 on July 9. 200-i. She states that the plaintiffs kno'' ledge of the loans is established b) an A&/\ check in repayment signed by the plai ntiff. In surrort of their motion. the De'-cr~ defendants also submit. among other things. copies of bank statements for the sub.icct accounts. the ··fraud arficlaYits"' filed by the plaintiff \\'ith Fleet and NFB. copies of the refund checks issued by Fket and \I FB to A&A for certain alleged unauthori/.ed withdra\\·als or transactions. the plainti tr s expert '' itness responses pursuant to CPLR 310 I (d) regarding forgery and damages. and the plaintifTs answers to the Den::r: delcndants· intl!rrogatories and first notice for discovery and inspection. The exhibi ts reveal that nei ther A&/\ nor the plaintiff notilied the banks of the alleged forgeries until .lune 200-l or later. and that the testimony of the plaintirrs experts \\OU!J not [* 8] Brausch ,. Oe,·ery Index No. I 1-28918 Page 8 ere establish if any of the checks signed by Ernest \V used for other than corporate purposes. The exhibits also re\·eal that the plaintiff has admitted he did not hm·e any contact ,,·ith the defendant Stefanie Den~ ry. and that he docs not have any documt·ntat ion n:garding Frnest·o:; a~sets or insurance. For a defendant in a legal malpractice case to succeed tH1 a motion for summary judgment. evidence must be prese nted in adm iss ible rorm establishing that the plaintiff is unable to pro ve at least one of the esse ntial ckments or a malpractice cause or action (Nap olitano v Alf arkotsis & Lieberman. 50 AD3cJ 657. 855 NYS2J 593 (:?J Dept 2008]: O/a~1 ·a l' Go/den. 45 A03d 823. 846 NYS2d 60.f (2d Dept 20071: Ippolito '' ~lcCormack, Damiani, Lowe & J life/1011, 265 AD2d 303. 696 NYS:?d '.W3 [2d Dept I 999 j ). To establish a cause or action to recover damages for lega l malpractice, a plaintiff must prove (I) that the defendant attorney failed to exercise that degree of care. skill. and diligence commonly possessed by a mem ber of the legal community. (2) proximate cause. (3) damages. and (-1.) that the pl aintifhvould have been success ful in the underlying action had the atcorncy exercised due care ( Tortura 1• S t1llil'lt11 Papai11 Block McGrath & Cannavo, P.C.. 21 AD3d I 082. 803 NYS2d 571 [2d Dept 2005]; Ippolito v ,.._,/cCormack, Da111ia11i, Lowe & Me/1011, s11pru: Volpe 11 Ca11.field, 137 J\02d 282. 654 ·ys2d 160 [2d Dept 1997]. fr denied 90 NY2d 802. 660 NYS2d 712 f 1997]). Ini tially. the Devery defendants contend that the plain ti ff lacks standing to bring thi s action. as the claims against the third-party defendants in the underlyi ng action belonged solely to A&A. and that he does not have stand ing to assert claims o~· legal malpractice on behalf or A&A. With respect to standing. it is u threshold determ ination. resting in part on policy considerations. that a person should be a llowed access to the courts to adj udicatc the merits of a particular dispute that satisfies the other justiciability criteria (see Society of Plastics /11d11s., In c. '' Coullly of Suffolk. 77 Y2d 761. 570 N YS2d 778 [ 19911). .. Standing ... requires an interest in the claim at issue in the lawsuit that the lav,1 wi II recognize as a sufficient predicate for determining the issue at the litigant's rcquc.!st ... Without ... standing. a party lacks authority to sue .. (Caprer 1• Nussbaum. 36 AD3d 176. 825 i YS2d 55 [2d Dept 2006] [internal citations and quotation marks omittecJ]). It is ·well settled that. in addition to the elements discussed alxn e. the clements or a cause of action for legal malpractice incluc.Je the existe nce or an attorney-cl ient n;lutionshi p lx:l ween th~ plaintiff uml the tll.:li.:ndant ( Li11dsay 1· Pm;ter11ack T i Ik e r Ziegl er Ul a/s ir S ta11to11 & Romano LLP. 129 AD3d 790. I 2 'YS3d 124 (2d Dept 2015: Terio ,. Spodek. 63 AD3d 7 19. 880 NYS2d 679 f2d Dept 2009 1). and that the relati onship must exist at the time of the alleged malpractice ( Tah11er '' Drake. 9 ADJ d 606. 780 NYS2d 85 [3d Dept 20041). I lcrc. it is undisputed that the plaintiff retained the Dcn~r~ firm to reprc.!scnt his corporation and him indh idually. and that said firm remained the altornc) of record at all times rek,·ant herein . The issue of the relati,·e culpability of the defendants docs not alter these basic fact that the plaintiff had an atLnrney-c lient relat ionship ,,·ith Devery and the DC\"Cr) tirm . 1-ln \H~\ er. is a lso m~f I settkd that. in genera l. ··a corporat ion has a separate legal existence from its shareholders e\·en whe re the corporal ion is wholly om1cd b~· n single.! individuar· (Matter of Queens H < De1•. Corp. f,Vixbot Real~rAssoc.f. 121ADJd903. 905. 995 NYS:?d 8-L 87 [2d Dept :?OJ.+): quoting Baccasli ,, Sayeglt . 53 ADJd 636. 639. 862 NYS2d 56..+. 567 [2d Dept 2008j). With respect to a claim of nttnrnc) malpractice. un attorney is not li able to third parties. not in privity. !"or harm caused by profcs~ i on:.11 negligence absent fraud . co llusion.malicious acts, or other special circumstances (sl!I! [* 9] !3rausch \' De\'ery Index No. I 1-28918 Puge 9 Gi11sh11rg Dev. Cos., LLC l ' Carbone. 85 AD3d 1110. 926 NYS2d 156 [2d Dept 2011 J: Breen l ' law Office of Bruce A . Barket, P.C.. 52 AD3d 635. 862 NYS2d 50 [2d Dept 2008)). It is determined that the De\·ery de l'endants ha,·e prima fa1cii.;: estab lished that the causes of action in the underlying acti on against Ernest. \JFB anJ CFS belonged solely to J\&A. I lo\\e\'er. the De\'ery ddendants have fa iled lo establish that the plaintiffs counterclaim against Agnes/JE\ l and cause or action against Fleet. or the defenses he may ha\'e haJ relatin~ lo said ach·erse parties. are not daims \\'hich belong to him as an indi\'idual. Thus. to the extent the plaintiff hacl an ind ividual causes or action or defenses in the underlying action he has standing in this action for legal malpractice. It is undisputeJ that Racano. of counsel to the Devery defendants who remained the altorncys of record for A&A and the plaintiff. failed to exercise that degree of care. skill. and diligence commonly possessed b) a member of the legal community. and permitted default judgments to be entered against the plaintiff based upon the bald assertion that he received proceeds of loans fro m Agnes and JEM when the record establishes that the checks from said parties arc all made payable to A&A. and when hi s sole obi igation to Fleet was based on his personal guarantee of the Fled LOC account held by A&A. Where a defendant seeks summary judgment in an action for legal malpractice. the burden is on the mc.)\'ant to establi sh through expert opinion that he or she did not perfo rm below the ordi nary reasonable skil l and care possessed by an average member of the legal community (see Cosmetics Plus Group, Ltd. v Traub , I 05 AD3d 134. 960 YS2d 388 [2d Dept 2013] : Suppiall v Kalish. 76 AD3d 829. 907 YS2d 199 [lst Dept 201 O] ). The Devery defendants have not submitted the opinion of an expert to establish that their performance or legal services. if any. met the standard of care appli cabl e he rein. I lm,·ever. an individual"s mere membership in a limited liability company does not make that member liable fo r the torti ous acts ol' another member (Limited Liability Company Law§ 609 [al). A member may be held individually liable i f they partic ipate in the comm iss ion of a tort in the f'urtherance of company business (Board of Jt,fgrs. of Beacon Tower Co11do111ini11111 v 85 A dams St., LLC 136 AD3d 680. 25 NYS3c.I 133. f2d Dept 20 16]: Bynum v /(eber. 135 AD3d 1066. 23 NYS3d 654 f I st Dept 20 16] ). The adduced ev idence establishes that Devery' s wife and partner did not parti cipate in representing the plaimiffor li1iga1ing the under!) ing action . Thu:;. th1.: D1.:' ery <l-:li..:n<lant::; hun: <.:stabli s h<.:c.l their prirna facie entitlement to summary judgment dismissing the complaint against the defendant Stefanie t\. De\·cr\'.: The undersigneJ no\\· turns to the De\'(·ry defendants· contentions that the plaintiff is unable to pru\e the remaining clements or his cause of action It)!' legal malpractice. Initially. the Dever) defendants contend that the plaintil'r:; cause ol"action foils as a matter of law because he has foiled to estahlish that he has suffered any proximately caused damages. A defendant moving for su mmary judgment cannot satisf~ its initial burden of establishing hi s or her entitlement thereto mere I) by pointing to gaps in the pluinti ff s case (Co astal Slieel Metal Corp. 1• Marlin Assoc., In c .. 63 AD3d 617. 881 NYS2d .+2.+ [l st ~ Th..: Dt.:\er: tkl'~ndanl~ du not submil an) evidcm: ~. neither do lhc make any foi.:tual or lega l arguments. 1<.::;;u·din:; th.: pv!>::.ibh: liubilit~ of the D~·' ""'') Group herein. [* 10] Brausch , . Dc\'cry Index No. I 1-28918 Page 10 Dept 2009]: 2011 )). \'c!<! also Tseklta11m•skaya 1• Starrelf Ci~I', Inc.. 90 :-\D3d 909. 935 . YS2d 128 l2d Dept or In order to establi s h a prima fac ie cast: legal malpractice. a plain ti ff must demonstrate that the breach of the attorney·s duty proximately caused the plaintiff actual and ascertainable damages (see Leder i• Spiegel. 9. YJd 836. 8-Hl NYS2d 888 [2007): R11dolf 1• Sllay11e, Dac/1s, Stanisci, Corker & Sauer. 8 ' Y3d -l.J8. 835 YS2d 53412007]). The Dc\·cry defendants contend that the affida\'it of their expert Richard Feinsiher and the bankruptcy petition filed by the: plaintiff confinn that the plaintifh,·as insolvent. and that the plaintiff ·-would have entered bankruptcy n:garclless of the entry of the judgments" in the underl ying action. It is nolt:worthy that Fc insi lver does not slate that the plaint iff s insolvency wo uld inevitably kd him lo file for bankruptcy iCthe su bjec t judgments had not bci.:n filed against him. They further contend that. as a result of the dischargi.: of those judgments in bankruptcy. the plaintiff has not suffered any ascertainable damages. Ho\\·cver. the Devery defendants have submitted the plaintiffs expert \\'itness disclosure. which indicates that said expert \\" testit)' that the plaintiff would not have ill had to declare bankruptcy absent the e ntry of the subject judgments. and that the filing of the petiti on required the plaintiff to s urrcnckr al I o f his non-exe mpt assets. Thus. there is an issue of fact whether the entry of the subject judgments req uired the plaintiff to declare bankruptcy. The! Devery defendants have fa iled to prima facie establish that the plaintiff cannot prove he has suffered actual and ascertainab le proximately caused damages. Moreover. the plaintiff is required to prove that. .. but for'. the attorney" s negligence, the plaintiff would have prevailed on the underlying cause of action (see A m B(lse Corp. v D(lvis Polk & W(lrdwell. 8 NY3d 428. 834 NYS2d 705 [20071: Leder v Spiegel. supra; S nolis 1• Clare. 81 AD3d 923. 917 NYS2d 299 [2d Dept 20 I I ]). The De,·ery defendants contend that A&A is unable to prove its claims fo r fraud or aiding and abetling fraud asserted against Agnes in the underlying action. and that A&A ·s cause of action against Fleet is barred by A&A ·s failure to exercise reasonable care in exami ning its bank statements. discovering rorgeries. and timel y notilying fleet or the issue (see ucc 4-406 ( 11. (2]. and [4]). Whether o r not said contentions a rc correct. they arc not dispositive he re in . The question is whether the * p luintiff could huve SLtcccssl"ul ly dcfondcd against •my claims ass erti n g personal liability on hi s part or regarding the business operations of A&A, the alleged failure A&A to exercise due care. or A&A 's interactions" ith Agnesf.IE:vt or the third-pany defendants in the underlying action. Here. the adduced e,·idcncc estab lishes that the Fleet LO(' account \\as not paid by A&A. that Fleet had issul!d a credit for the reimbu rsable losses tn said account due to impro per payments or \\'ithdra\\'als. and that the plaintiff had personall y guaranteed A&J\"s line of credit \\'ith Fleet. Thus. the De' ery defendants ha\·e prima facie established that the plaintiff cannot pro Ye that he \\·ould ha\·c pn~,·ailed on Fleel·s countcrdaim against him. I lom;:Yer. as noted abt)\·e . the De\·cry detendants hm·e not establi shed that the plaintiff cannot pro\·e that he had a defense against. and \\·o uld have prerniled regard ing. Agnl!s 1.IEM"s c la im s that he \\·as the recipient o f a ny loan proceeds individually. Because su mmary _ judgment dcpri\·es thc li tigant of hi s or her day in court. it is conside red n .. drastic remedy·· " ·hich should he im oked only when there is no doubt as to the absence of triable issues (A ndre 1• Pomeroy. 35 \JY2d 361. 364 . 362 \JYS2d 131 f1974]: £/zer l'Nas.w11 Cou 11 ~r. 111AD2d212. 489 '.\' YS2d 246 l2d Dept 1985] ). lndcl!d. "·here ther\! is any doubt as to the existence of' triable issues. or [* 11] Brausch ,. De,·ery Index o. 11-28918 Page 11 where the issue is cn.~n arguable. the Court must deny the motion (Cit iiberg ,. Cit ifberg. l3 A03cl I089. 788 NYS2d 533 [-Hh Dept 200..+J. rc:urgdrnic:d 161\03<.l 1181. 792 NYS2d 368 l-+th Dept 2005]: Barclay 1· Deuckla. 182 AD2d 658. 582 NYS2d 251 [2cl Dept 1992]: Colten 1• Herbal Concepts, /li e.. 100 AD2d 175. 473 >-JYS2d ..+261 lst Dept 1984]. c{ffi.163 l\'2d 379. 482 NYS2d 457 r198..fl). It is determined thm the DeYery defendants han! established their prima facie entitlement to summary judgment dismissing the complaint against the detendant Stefanie .. De,·ery. and dismissing all daims of legal malpractice except those inrnl\·ing the rntry of the judgments entered by Agnes and .JEM. I laYing established their entitlement to summary judgment dismissing the complaint against them to the extent noted. it is incumbent upon the plaintiff to prod Lice evidence in admissible form sufficient to require a trial of thi.! material issues of fact (R otlt v Barreto. suprn: R ebecclti v Whitmore. supra: 0 'Neill v Tow11 of Fishkill. supra). In opposition to the motion. the plaintiff submits. among other things. his affidaYit. and an affidavit from an expert witness. In his affidavit. the plaintiff swears that his damages herein include the loss of his equit) in two residential properties that he owned. that all of the attorneys representing him in the underlying action and this action haYe told him that the claims against him \\'Cre ,,·ithout merit. and that there is no merit to the claim that he did not sustain actual and ascertainable damages. Jn his affidav it. Steven G. Pinks (Pi nks), an attorney duly admi tted to practice in the courts of New York State. swears that. in his opinion to a reasonable degree of prolcssional certai nty. the defendants herein .. departed in multiple ways from the required standard of care." He states that his opinions are accurately set forth in the plaintiffs expert witness disclosure submitted by the plaintiff. In said disclosure. the plaintiff indicates that Pinks will testify that the defendants' failure to answer Agnes/JEM ' s amended complaint. to reply to the counterclaim in Fleet' s answer. to present proof of service at the traverse hearing before Judge Pitts. and to oppose the respective motions for default judgment \\·ere departures from good and acceptable legal practice. In addition. the disclosure states that the entry the subject judgments were the result of the negligence of the defendants. and that. absent said negligence and departures, the plaintiff 'vvould have prevailed on his counterclaim against Agnes and or his rhird- pany causes or a<.:tion against Ernest. Fkcl. NFB. and CFS. It is well settled that the opinion testimon) or an expert ··must be based on facts in the record or pcr-;onally kno\\'n fl) the '' itness.. <,.C!c: Hamhscll 1• New York Ci(I' Tr. Autll .. 63 Y2d 723 . ..+80 lYS 2cl I 95j1984) citing Cassano 1• llagstmm. 5 NY2d 6..+3. 6-+6. I 87 l\YS2d 1 [ J 959J: Slti Pei Fang 1• Heng Sang Real(I' Corp.. J8 1 \DJJ 520. 835 l\YS2d t 9..i l2d Dept 2007): Santoni 1· Bertels111<11111 Proper(r. Inc.. 21 l\D3d 7I1. 800 NYS2J 676 f I st Dept 2005 IJ. 1\n expert ··may not reach a conclusion by assuming material facts not supported by the evidence. and may not gul.!ss or speculate in dra\\·ing a conclusion" (sa Shi Pei Fang 1• Heng Sang Realty Corp. supra). The expert disc losure and Pinks. in setting l<.irth the undisputed failures or the defendants to meet the required standard or care. ha Ye failed to address the other important issues raised by the Dc\·cry ddendants and determined b) the Court as set forth abo,·e. Herc. to the extent that Pinks attempts to render an expert opinion that the plaintiff ,,ould han~ preH1iled on his counterclaim and third-part) causes or action. it primaril) consists of theoretical allegations'' ith no independent factual basis: therefore it is rejected as speculati\'\:~. unsubstantiated. and <.:onclusoo (sec: lWestric 1· 1 ilarti11e;: C/eanin.!: Co•. 306 AD2c.l -t-.J.9. 761 NYS2d 504 [2d Dept 2003]). [* 12] Brausch \. Oe\·ery Index . o. 11 -28918 Page 12 In addit ion. the pl ainti ff has failed to address. among other things. the iss ue of his standing. whether any of the checks signed by Ernest were used f()r purposes other than J\&A · s business operations. and whether he could ha\'e succeeded in establish ing that he \VOuld not hm·e been held liable undt.:r his personal guaranty regarding the Fleet LOC account. In addition. the plaintiff does not dispute that certain causes or action in the un<lerlvin!! action belon!!.ed solely to t\&J\. New York Courts ha\'C .. .. held that the failure to a<ldress arguments proffered by a movant or appellant is equirnknt to a concession or the issue (see McN amee Coustr. Corp. I ' Ci~)' of New R ocltelle. 29 AD3d 5.+.+. 817 T\YS2d 295 (2c.l Dcpt 20061: 1 ·Ve/de11 v Rhrera. 30 I AD2d 93.+. 75.+ NYS2d 698 (3d Dept 2003 j: Hajderl/i 1· JViljo/111 59 LLC. 2.+ Misc3d 12..+2rAI. 901NYS2d899 [Sup Ct. Ct. Ct. Bronx County 2009j). ~ '- A<.:cordingly. the Devery defendants motion for ::;ummary judgment is granted to the extent that the complaint against the defendant Stefanie N. Devery is dismissed. all claim::; or legal malpractice except those invoh·ing the judgments entered by Agm:s and JEM are dismissed. and is otherwise denied. A.J.S.C. PINAL DISPOSITION _ X_ NON-PINAL OI SPOS ITION
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