HON. KELLY O'NEILL LEVY, J.S.C.

Unpublished Opinion

RECEIVED NYSCEF: 01/03/2023

MOTION DATE 07/13/2020, 07/13/2020

PRESENT: HON. KELLY A. O'NEILL LEVY, Justice.

DECISION + ORDER ON MOTION

HON. KELLY O'NEILL LEVY, J.S.C.

The following e-filed documents, listed by NYSCEF document number (Motion 014) 243, 244, 245, 246, 247, 248, 249, 250, 251,252, 287, 291,292, 293, 295, 296, 297, 298, 300, 303, 309, 317, 321,323, 324, 333, 334, 335, 336, 337, 338, 344 were read on this motion for SUMMARY JUDGMENT.

The following e-filed documents, listed by NYSCEF document number (Motion 015) 270, 271, 272, 273, 274, 275, 276, 277, 278, 279, 280, 281,282, 283, 284, 285, 286, 299, 301, 304, 310, 316, 318, 325, 328, 329, 330, 331, 332, 339, 340, 341, 342, 343 were read on this motion for SUMMARY JUDGMENT.

Motion sequence numbers 014 and 015 are consolidated for disposition.

This is a legal malpractice action brought by plaintiffs Reem Contracting Corp. (Reem Contracting), Jona Szapiro (Szapiro), Reem Plumbing and Heating Corp. (Reem Plumbing), and the Estate of Steven Stein (Stein) (collectively, plaintiffs) against defendants Altschul &Altschul, Mark Altschul, Esq. (Altschul), and Cory Dworken, Esq. (Dworken) (collectively, defendants). Defendants represented plaintiffs in a federal action seeking recovery under section 515 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 USC § 1145 (the underlying action). Defendants have asserted a counterclaim for account stated. Defendants move, pursuant to CPLR 3212, for summary judgment on their account stated counterclaim (motion sequence number 014). Plaintiffs move, pursuant to CPLR 3212, for summary judgment on their legal malpractice claim (motion sequence number 015).

BACKGROUND

The following facts are gleaned from the submissions of the parties. Reem Plumbing and Reem Contracting are entities that performed plumbing work in New York City (NY St Cts Elec Filing [NYSCEF] Doc No. 273 ¶ 4; NYSCEF Doc No. 374, Szapiro tr at 17-18). Stein was the president and sole shareholder and office of Reem Plumbing (NYSCEF Doc No. 273 ¶ 1). Stein's brother-in-law, Szapiro, was the president of Reem Contracting (id., ¶ 2).

In 2004, plaintiffs were named as defendants in the underlying action, captioned Trustees of Plumbers Local Union No. 1 Welfare Fund v Reem Plumbing &Heating Corp., 04-CV-4698 (CBA) (ED NY) (id., ¶ 5). The trustees (the Trustees) alleged that Reem Plumbing and Reem Contracting were contractually obligated to contribute to certain union benefit funds (the Funds), as required by four collective bargaining agreements between the Association of Contracting Plumbers of the City of New York and Local Union No. 1 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (id.). The Trustees conducted an audit for the period of January 1, 2002 through December 31, 2004, believing that there had been a significant shortfall in contributions (id., ¶ 6). The Trustees sought unpaid contributions, interest, liquidated damages, and attorney's fees (id., ¶ 8). They also sought to hold Stein and Szapiro personally liable as fiduciaries of the Funds as defined under ERISA (id.). Altschul &Altschul represented plaintiffs in the underlying action (id., ¶ 9). Altschul and Dworken were tasked with defending plaintiffs (id, ¶ 10).

Altschul testified at his deposition that he was admitted to practice in New York in 1985 (NYSCEF Doc No. 277, Altschul tr at 9). Altschul was assigned the strategy of the case, while Dworken handled the "grunt work" of representing plaintiffs (id. at 13-14). Before his representation of plaintiffs in the underlying action, Altschul had only litigated one ERISA case that settled (id. at 13). According to Altschul, Stein brought him the complaint and "was confident that that he was going to settle the case with the Union and that he wanted to put in an answer and to help him to move towards settling the case" (id. at 31). Altschul stated that he repeatedly informed plaintiffs "that their case was exceptionally weak and that the exposure was very great" (id. at 146). After Szapiro and Reem Contracting were added to the case, "[t]here was a discussion as to what could be potentially a conflict," Altschul told them "they might want" separate counsel for the different defendants in the case, and plaintiffs "told [Altschul] they didn't want it" (id. at 155-156). However, he did not discuss a potential waiver of any conflict of interest (id. at 157). At some point, Altschul told "Mr. Stein and Mr. Szapiro that they probably should retain an ERISA and/or a Union lawyer to handle this" (id. at 19). Altschul later testified that there was "[a]t least one" or "[p]robably more than one" occasion where he recommended retaining an attorney experienced in ERISA matters (id. at 26).

Altschul stated that he believed his ethical obligations were to tell his clients "what their exposures were, what their options were"; "It was up to them to make decisions about what they wanted to do with the case and what happens is it's my obligation if there's something that I'm not familiar with to go and review such matters and maybe research such matters more deeply" (id. at 29). Altschul further testified that defendants did not conduct any party or nonparty depositions because his clients instructed him to save money (id. at 35-39, 112, 113, 120). According to Altschul, he told defendants that "we needed to be able to prepare for the case and that we needed to have better ammunition. [Stein] did not want to spend money for ammunition. [Stein] wanted to go and try to settle the case" (id. at 191). As Altschul recalled, he said:

"you need to have an expert to review the audit. [He] also at the same time discussed with him the possibility of retaining other counsel who was familiar with some of these Union issues. [Stein] was insistent that at that point in time that he' could settle the case with the Union"

Altschul further avers that he advised Stein and Szapiro that he thought that they needed an expert to do an audit of their books (NYSCEF Doc No. 329, Altschul aff, ¶ 6). Altschul states that "Plaintiffs insisted that they did not want to hire any experts," "they didn't have the money," and "that they had full confidence in [Altschul] and their ability to resolve the matter with the Union" (id, ¶¶ 6, 7).

Dworken testified that he recalled having a conference call with Stein and Szapiro, but did not recall "the sum and substance of what was discussed about litigation tactics or strategy" (NYSCEF Doc No. 279, Dworken tr at 118-119). He did not recall whether he was aware that state case law did not apply to ERISA cases (id. at 115).

Szapiro testified that Reem Plumbing and Reem Contracting were engaged in plumbing work, general contracting work, HVAC work, sprinkler work, and steamfitter work (NYSCEF Doc No. 274, Szapiro tr at 17, 18, 22, 28, 29, 66). Reem Plumbing and Reem Contracting performed both union and non-union work (id. at 67). The entities shared offices, tools, equipment, vehicles, and employees (id. at 18, 22, 29). Szapiro testified that he asked Altschul about deposing union delegates and the Association of Contracting Plumbers, to which Altschul replied "we didn't have a right to do that. We couldn't do that. They were suing us" (id. at 62). Szapiro testified that the first time that he learned about a conflict of interest was at his current counsel's office (id. at 87). Further, Szapiro stated that the first time that he learned that there was personal liability under ERISA was "when [he] read that [he] had lost the federal case in court, in federal court and it said that [he] owed it personally" (id.). He did not remember any discussion about hiring experts or their own auditors (id. at 89). According to Szapiro, when defendants sent bills, he "assume[d] that they would be paid" (NYSCEF Doc No. 247, Szapiro tr at 60). He stated that "[t]here could have been a time" when the bills went unpaid (id.). He did not recall ever voicing an objection to the bills (id.).

The Underlying Action

United States District Judge Carol Bagley Amon scheduled a trial in the underlying action for May 2008 (NYSCEF Doc No. 273 ¶ 49). As the trial in the underlying action approached, the parties advised the court that there were no material issues of fact (Trustees of Plumbers Local Union No. 1 Welfare Fund v Reem Plumbing &Heating Corp., 2009 WL 10700668, *4, 2009 U.S. Dist LEXIS 154698, *13 [ED NY, Mar. 31, 2009, No. 04-CV-4698 (CBA/VVP)], affd in part, vacated in part sub nom Reilly v Reem Contr. Corp., 380 Fed.Appx 16 [2d Cir 2010]). The parties stipulated before the District Court that Reem Plumbing and Reem Contracting were alter egos of each other (id.). Judge Amon adjourned the trial, and set a briefing schedule for the Trustees' motion for summary judgment (id.).

The Trustees moved for summary judgment, on the basis that Reem Plumbing was contractually obligated to contribute to the Funds during the audit period, and that Reem Contracting was responsible as Reem Plumbing's alter ego (2009 WL 10700668, *5, 2009 U.S. Dist LEXIS 154698, *13). The Trustees also argued that Stein and Szapiro were individually liable as fiduciaries of the Funds' assets (id.). Plaintiffs herein opposed the motion, arguing that there was no valid and binding collective bargaining agreement between the parties and that Stein and Szapiro could not be held individually liable for any damages as the entities' principals (id.).

By memorandum and order dated March 31, 2009, Judge Amon granted the Trustees' motion for summary judgment, finding that Reem Plumbing was obligated to make contributions to the Funds during the audit period (2009 WL 10700668, *8, 2009 U.S. Dist LEXIS 154698, *25). Judge Amon further held that, since plaintiffs admitted that Reem Plumbing and Reem Contracting were alter egos, Reem Contracting was bound to the same collective bargaining agreements as Reem Plumbing (id.). Judge Amon further held that Stein and Szapiro were fiduciaries of the Funds under ERISA, and that they were personally liable given their exclusive control of the entities (2009 WL 10700668, *10, 2009 U.S. Dist LEXIS 154698, *32). Finally, Judge Amon awarded damages against plaintiffs, jointly and severally, in the amount of $1,337,707.63 (2009 WL 10700668, *15, 2009 U.S. Dist LEXIS 154698, *44). In doing so, Judge Amon determined the amount of unpaid contributions based solely on a Marshall &Moss audit of Reem Plumbing and Reem Contracting (2009 WL 10700668, * 13, 2009 U.S. Dist LEXIS 154698, *40-41).

Plaintiffs allege that they terminated defendants upon receiving the District Court's decision, and retained their current counsel, who immediately filed an appeal (NYSCEF Doc No. 293 ¶ 3).

On appeal, the Second Circuit affirmed the District Court's judgment only as to the issue liability, but vacated and remanded the case on the issue of damages, finding that there were issues of material fact as to damages and that the Trustees' auditor's report submitted to establish the unpaid contributions "rested on a bald and unsupported assumption" that all work done by Reem Contracting was covered under the collective bargaining agreements (Reilly, 380 Fed.Appx at 20).

Plaintiffs allege that, upon remand to the District Court, the Magistrate Judge did not permit any further discovery, limiting them to the evidence presented on the motion for summary judgment (NYSCEF Doc No. 1, verified complaint ¶¶ 14-17). Plaintiffs assert that this was because defendants had previously agreed before Judge Amon that they had adequate discovery (id.). Plaintiffs allege that, as a result, they settled the case for an excessive amount (id.).

Procedural History

The complaint seeks recovery for legal malpractice, including all legal fees, costs, and expenses incurred in the underlying action, together with punitive damages and interest (id., ¶¶ 8-17).

Defendants allege in their answer and counterclaims that plaintiffs owe them $44,638.07 in unpaid legal fees (NYSCEF Doc No. 251, answer with counterclaims ¶¶ 18-20).

Defendants and plaintiffs previously moved for summary judgment. On January 4, 2022, the First Department reversed the court's grant of summary judgment as to liability on plaintiffs legal malpractice claim on default, and remanded for a determination on the merits (Reem Contr. v Altschul &Altschul, 201 A.D.3d 416, 416-417 [1st Dept 2022]).

The Parties' Contentions

Plaintiffs move for summary judgment on their legal malpractice claim, relying on an unsworn expert report from Bennett J. Wasserman, Esq. (Wasserman), which states that defendants' conduct fell below the standard of care (NYSCEF Doc No. 286, Wasserman report at 22-31). Specifically, Wasserman indicates that defendants: (1) failed to investigate and marshall the appropriate lay and expert evidence in a timely and appropriate fashion; (2) failed to properly oppose the Trustees' motion for summary judgment; (3) failed to communicate with plaintiffs; and (4) provided a negligent conflict of interest analysis (id.). Wasserman also opines that defendants' "failure to conduct a proper investigation, failure to retain a liability expert in a timely fashion, failure to secure a proper expert in a timely fashion, and failure to properly oppose the underlying plaintiffs' motion summary judgment, were all a substantial causative factor in the loss of plaintiffs' (underlying defendants') case" (id. at 32). According to Wasserman, "[a] full and appropriate effort in pre-trial discovery would have yielded expert evidence of the type set forth in the plaintiffs' informal audit which could easily have been utilized to defeat the underlying plaintiffs' motion for summary judgment" or to promote a settlement (id.).

In opposition to plaintiffs' motion, defendants argue that there are issues of fact as to whether Reem Plumbing and Reem Contracting were alter egos. Defendants contend that they cannot be faulted for failing to obtain evidence, given that Szapiro and Stein steadfastly refused to pay for this work. Defendants maintain that they were not ethically required to withdraw from representing plaintiffs in the underlying action. According to defendants, plaintiffs do not deny that they properly communicated with them. Defendants also assert that Wasserman's report is unsworn, and that plaintiffs cannot remedy this defect in their reply papers. Defendants contend that there is no ethical obligation for an attorney to have a written retainer agreement or malpractice insurance. Additionally, defendants' allegedly negligent conflict of interest analysis does not constitute legal malpractice. They further contend that the "informal audit" offered by plaintiffs is also unsworn and of zero evidentiary value. Further, according to defendants, defendants' alleged malpractice did not proximately cause plaintiffs' damages. Defendants argue that plaintiffs cannot demonstrate any damages since Reem Plumbing and Reem Contracting were alter egos. In their affirmation in opposition, defendants request dismissal of the complaint, arguing that plaintiffs fail to allege that any of their acts or omissions constitute legal malpractice.

In reply, plaintiffs argue that defendants are barred from relitigating the issue of whether Reem Plumbing and Reem Contracting are alter egos. In addition, defendants have failed to proffer contradictory evidence or their own expert report. According to plaintiffs, since defendants failed to retain an expert witness, they are barred from serving as their own expert witness.

Defendants also move for summary judgment on their account stated counterclaim, arguing that Szapiro admitted that he never objected to defendants' bills at any time. In response, plaintiffs argue that defendants were terminated for cause, committed legal malpractice, and are, therefore, barred from recovering legal fees. Plaintiffs submit that there is no dispute that defendants did not have a written retainer agreement.

DISCUSSION

It is well settled that "[t]he proponent of summary judgment must establish its defense or cause of action sufficiently to warrant a court's directing judgment in its favor as a matter of law" (Ryan v Trustees of Columbia Univ, in the City of NY, Inc., 96 A.D.3d 551, 553 [1st Dept 2012] [internal quotation marks and citation omitted]). "Thus, the movant bears the burden to dispel any question of fact that would preclude summary judgment" (id.). "Once this showing has been made, the burden shifts to the nonmoving party to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact that require a trial for resolution" (Giuffrida v Citibank Corp., 100 N.Y.2d 72, 81 [2003]). The court's function on a motion for summary judgment is "issue-finding, rather than issue-determination" (Sillman v Twentieth Century-Fox Film Corp., 3 N.Y.2d 395, 404 [1957], rearg denied 3 N.Y.3d 941 [1957] [internal quotation marks and citation omitted]).

A. Plaintiffs' Motion for Summary Judgment (Motion Sequence Number 015)

Legal malpractice is an attorney's failure to exercise "reasonable skill and knowledge commonly possessed by a member of the legal profession" (Darby &Darby v VSI Inti., 95 N.Y.2d 308, 313 [2000] [internal quotation marks and citation omitted]). To succeed on a claim for legal malpractice, the plaintiff must show: (1) the negligence of the attorney; (2) that the attorney's negligence was a proximate cause of the loss sustained; and (3) that the plaintiff was damaged as a result of the attorney's actions (Global Bus. Inst, v Rivkin Radler LLP, 101 A.D.3d 651, 651 [1st Dept 2012]; Tydings v Greenfield, Stein &Senior, LLP, 43 A.D.3d 680, 682 [1st Dept 2007], affd 11 N.Y.3d 195 [2008]; Bishop v Maurer, 33 A.D.3d 497, 498 [1st Dept 2006], affd 9 N.Y.3d 910 [2007]).

In order to prove proximate causation, the plaintiff must establish a "case within a case" -that "but for" the alleged negligence, the plaintiff would have prevailed in the underlying action, or would not have sustained any "ascertainable damages" (Brooks v Lewin, 21 A.D.3d 731, 734 [1st Dept 2005], Iv denied 6 N.Y.3d 713 [2006]). "A plaintiffs burden of proof in a legal malpractice action is a heavy one. The plaintiff must prove first the hypothetical outcome of the underlying litigation and, then, the attorney's liability for malpractice in connection with that litigation" (Lindenman v Kreitzer, 7 A.D.3d 30, 34 [1st Dept 2004]). The First Department has explained this standard as follows:

"[o]nly after the plaintiff establishes that he would have recovered a favorable judgment in the underlying action can he proceed with proof that the attorney engaged to represent him in the underlying action was negligent in handling that action and that the attorney's negligence was the proximate cause of the plaintiffs loss since it prevented him from being properly compensated for his loss"

Moreover, "[a] legal malpractice claim may arise out of the giving of faulty advice to a client" (Mortenson v Shea, 62 A.D.3d 414, 414 [1st Dept 2009]). And, "an attorney is obligated to know the law relating to the matter for which he/she is representing a client and it is the attorney's duty, 'if he has not knowledge of the statutes, to inform himself, for, like any artisan, by undertaking the work, he represents that he is capable of performing it in a skillful manner'" (Reibman v Senie, 302 A.D.2d 290, 291 [1st Dept 2003], quoting Degen v Steinbrink, 202 A.D. 477, 481 [1st Dept 1922], affd 236 NY 669 [1923]). Nevertheless, an attorney's error in judgment or in pursuing a reasonable course of action does not constitute legal malpractice (Hand v Silberman, 15 A.D.3d 167, 167 [1st Dept 2005], Iv denied 5 N.Y.3d 707 [2005]).

Ethical violations do not, by themselves, support a legal malpractice claim (Schwartz v Olshan Grundman Frame &Rosenzweig, 302 A.D.2d 193, 199 [1st Dept 2003]). Thus, "while a conflict of interest amounting to a violation of the Rules of Professional Conduct does not, in and of itself, amount to malpractice, 'liability can follow where the client can show that he or she suffered actual damage as a result of the conflict'" (Esposito v Noto, 132 A.D.3d 944, 945 [2d Dept 2015], quoting Tabner v Drake, 9 A.D.3d 606, 610 [3d Dept 2004]; accord Sumo Container Sta., Inc. v Evans Orr, Pacelli, Norton &Laffan, 278 A.D.2d 169, 170 [1st Dept 2000]).

"Damages in a legal malpractice case ... may include litigation expenses incurred in an attempt to avoid, minimize, or reduce the damage caused by the attorney's wrongful conduct" (Rudolf v Shayne, Dachs, Stanisci, Corker &Sauer, 8 N.Y.3d 438, 443 [2007] [internal quotation marks omitted]).

On a plaintiffs motion for summary judgment in a legal malpractice case, the plaintiff "will be entitled to summary judgment in a case where there is no conflict at all in the evidence, the defendant's conduct fell below any permissible standard of due care, and the plaintiff s conduct was not really involved" (Selletti v Liotti, 22 A.D.3d 739, 740 [2d Dept 2005]; see also Logalbo v Plishkin, Rubano &Baum, 163 A.D.2d 511, 514 [2d Dept 1990], appeal dismissed 77 N.Y.2d 940 [1991]). On the other hand, "[i]n order for a defendant to succeed on a motion for summary judgment, evidence must be presented in admissible form establishing that the plaintiff is unable to prove at least one of the three essential elements of legal malpractice" (Walker v Glotzer, 79 A.D.3d 737, 738 [2d Dept 2010]).

"'[U]nless the ordinary experience of the fact-finder provides sufficient basis forjudging the adequacy of the professional service, or the attorney's conduct falls below any standard of due care, expert testimony will be necessary to establish that the attorney breached a standard of professional care and skill'" (Estate of Ginor v Landsberg, 960 F.Supp 661, 672 [SD NY 1996], affd 159 F.3d 1346 [2d Cir 1998], quoting Greene v Payne, Wood &Littlejohn, 197 A.D.2d 664, 666 [2d Dept 1993]; accord Estate of Nevelson v Carro, Spanbock, Kaster &Cuiffo, 259 A.D.2d 282, 283 [1st Dept 1999]).

Here, plaintiffs have failed to meet their burden on summary judgment as to their legal malpractice claim. The court finds that expert testimony is necessary to establish that the adequacy of defendants' legal services fell below the standard of care, as acknowledged by plaintiffs. It is not within the ordinary jurors' experience to evaluate whether defendants failed to develop appropriate evidence, failed to secure a proper expert report in a timely fashion, failed to properly oppose the Trustees' motion for summary judgment, and failed to advise their clients of the nature of the claims made against them. However, as argued by defendants, plaintiffs submit an unsworn expert report from Bennett J. Wasserman, Esq., which opines that defendants' conduct fell below the standard of care in the underlying action (NYSCEF Doc No. 286, Wasserman report at 21-34). An unsworn report from an expert does not constitute competent evidence to support a motion for summary judgment (see Grasso v Angerami, 79 N.Y.2d 813, 814-815 [1991]). Plaintiffs did not attempt to cure this defect in their reply. While plaintiffs argue that defendants did not submit their own expert affidavit or report outlining the standard of care, this does not eliminate the requirement that plaintiffs make a prima facie showing on their legal malpractice claim by tendering evidence in admissible form (see Zuckerman v City of New York, 49 N.Y.2d 557, 562 [1980] [movant on summary judgment "must establish his cause of action .. . sufficiently to warrant the court as a matter of law in directing judgment in his favor .. . and he must do so by tender of evidentiary proof in admissible form"] [internal quotation marks and citation omitted]).

Moreover, the court finds that there are issues of fact as to whether plaintiffs would have prevailed or obtained a more favorable result in the underlying action (see Brooks, 21 A.D.3d 734). Plaintiffs' reliance on an unsworn "informal audit" that their counsel performed "for settlement discussion purposes only" is inadmissible and insufficient to demonstrate proximate cause (see CPLR 4547; CNP Meeh., Inc. v AlliedBldrs., Inc., 66 A.D.3d 1340, 1340 [4th Dept 2009]). In any event, Altschul testified that he did not conduct depositions because his clients instructed him to save money (NYSCEF Doc No. 277, Altschul tr at 35-39, 112, 113, 120). He further testified that he informed plaintiffs that "you need to have an expert to review the audit," but Stein "was insistent at that point in time that he could still settle the case with the Union" (id. at 191, 192). Thus, there are questions of fact as to whether plaintiffs' conduct contributed to the $1,337,707.63 judgment and Szapiro and Stein being held individually liable in the underlying action (see Selletti, 22 A.D.3d at 740).

Consequently, plaintiffs' motion for summary judgment is denied, "regardless of the sufficiency of [defendants'] opposing papers" (Winegrad v New York Univ. Med. Ctr., 64 N.Y.2d 851, 853 [1985]).

To the extent that defendants "cross-move" for summary judgment dismissing the complaint, defendants are not entitled to such relief. Defendants did not file a notice of cross motion, and only requested this relief in their affirmation in opposition to plaintiffs' motion for summary judgment (NYSCEF Doc No. 328 at 1, 59-66). "It is not as a rule sufficient to demand such relief in opposing affidavits or memoranda; an outright notice is required, to avoid any surprise at all to the original movant" (Guggenheim v Guggenheim, 109 A.D.2d 1012, 1012 [3d Dept 1985] [internal quotation marks and citation omitted]). In any case, there are issues of fact as to whether defendants committed legal malpractice in representing plaintiffs in the underlying action. Therefore, defendants are not entitled to dismissal of the complaint.

B. Defendants' Motion for Summary Judgment (Motion Sequence Number 014)

An "account stated" is "an agreement between the parties to an account based upon prior transactions between them with respect to the correctness of the separate items composing the account and the balance due, if any, in favor of one party or the other" (Shea &Gould v Burr, 194 A.D.2d 369, 370 [1st Dept 1993] [internal quotation marks and citation omitted]). The agreement is an acceptance of an amount due on an account that has been rendered (Interman Indus. Prods, v R. S. M. Electron Power, 37 N.Y.2d 151, 153-154 [1975]; M&A Constr. Corp, v McTague, 21 A.D.3d 610, 611 [3d Dept 2005]). To establish an account stated, there must be a mutual examination of the claims of the respective parties, a balance struck, an agreement either express or implied that the balance is correct, and that the party against whom it is found will pay it (Bank of New York-Del. v Sant ar elli, 128 Mise 2d 1003, 1004 [County Ct, Greene County 1985]).

A client has "an absolute right, at any time, with or without cause, to terminate the attorney-client relationship by discharging the attorney" (Campagnola v Mulholland, Minion Roe, 76 N.Y.2d 38, 43 [1990]). An attorney discharged without cause may seek recovery in quantum meruit for the reasonable value of his or her services (Butler, Fitzgerald &Potter v Gelmin, 235 A.D.2d 218, 219 [1st Dept 1997]). However, "[a]n attorney who is discharged for cause is not entitled to compensation or a lien" (Maher v Quality Bus Serv., LLC, 144 A.D.3d 990, 992 [2d Dept 2016]). In this regard, cases hold that "[a]n attorney who violates a disciplinary rule may be discharged for cause ..." (Doviak v Finkelstein &Partners, LLP, 90 A.D.3d 696, 699 [2d Dept 2011]). Moreover, "[m]isconduct that occurs before an attorney's discharge but is not discovered until after the discharge may serve as a basis for a fee forfeiture" (Orendick v Chiodo, 272 A.D.2d 901, 902 [4th Dept 2000]). "Th[is] rule * * * is well calculated to promote public confidence in the members of an honorable profession whose relation to their clients is personal and confidential" (Campagnola, 76 N.Y.2d at 44 [internal quotation marks and citation omitted]). Generally, "a hearing is required to determine whether discharge was for cause" (Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman &Dicker, 56 A.D.3d 1, 13 [1st Dept 2008]).

Defendants are not entitled to summary judgment on their account stated counterclaim, as their claim for legal fees is intertwined with plaintiffs' legal malpractice claim. Indeed, the alleged conduct which forms the basis for the malpractice occurred during the billing period at issue (see Glassman v Weinberg, 154 A.D.3d 407, 409 [1st Dept 2017] [attorney not entitled to summary judgment on account stated claim since he "has not demonstrated entitlement to dismissal of defendant's legal malpractice counterclaims, which are sufficiently intertwined with the account stated claim so as to provide a bona fide defense"]; Emery Celli Brinckerhoff &Abady, LLP v Rose, 111 A.D.3d 453, 454 [1st Dept 2013], Iv denied 23 N.Y.3d 904 [2014] [same]; cf Morrison Cohen Singer &Weinsten v Ackerman, 280 A.D.2d 355, 356-357 [1st Dept 2001] [noting that legal malpractice claim was not "so intertwined" with a claim for fees where "the vast majority, if not all, of the alleged conduct on plaintiffs part, which forms the basis of the malpractice claim, occurred prior to the billing period covered by the invoices in question"]). Altschul only states that "[t]he legal services were reasonably required to defend the Plaintiffs herein against claims for breach of a union collective bargaining agreement the Plaintiffs were a party to at the specific request of the Plaintiffs" (NYSCEF Doc No. 245, Altschul aff, ¶ 5).

Additionally, there are issues of fact as to whether defendants were discharged for cause (see Brill &Meisel v Brown, 113 A.D.3d 435, 436 [1st Dept 2014]). Contrary to plaintiffs' contention, defendants' failure to comply with the rules concerning retainer agreements (22 NYCRR 1215.1) does not preclude them from recovering in quantum meruit (Frechtman v Gutterman, 140 A.D.3d 538, 538 [1st Dept 2016]; Seth Rubenstein, P.C. v Ganea, 41 A.D.3d 54, 60-63 [2d Dept 2007]).

In light of the above, defendants' motion for summary judgment must be denied.

CONCLUSION

Accordingly, it is

ORDERED that the motion (sequence number 014) of defendants Altschul &Altschul, Mark Altschul, Esq., and Cory Dworken, Esq. for summary judgment is denied; and it is further

ORDERED that the motion (sequence number 015) of plaintiffs Reem Contracting Corp., Jona Szapiro, Reem Plumbing and Heating Corp., and the Estate of Steven Stein for summary judgment is denied.

This constitutes the decision and order of the court.