Opinion
Index Number: 653136/12
07-12-2013
IAN RUBINSTEIN Plaintiff, v. KRISS & FEURSTEIN AND JEROLD C. FEUERSTEIN, Defendants.
For Plaintiff: Saul Bienenfeld, Esq. Law Offices of Saul Bienenfeld PC For Defendants: Gordon & Silber, P.C.
DECISION and ORDER
For Plaintiff:
Saul Bienenfeld, Esq.
Law Offices of Saul Bienenfeld PC
For Defendants:
Gordon & Silber, P.C.
Papers considered in review of defendant's motion to dismiss/summary judgment (motion seq. no. 001):
+----------------------------------------------------------+ ¦Notice of Motion/Affirm. of Counsel/Memo of Law/Exhibits¦1¦ +--------------------------------------------------------+-¦ ¦Affirm. in Opp. to Motion ¦2¦ +--------------------------------------------------------+-¦ ¦Reply Affirm. in Supp/Exhibits ¦3¦ +----------------------------------------------------------+
HON SALIANN SCARPULLA, J.:
Plaintiff Ian Rubinstein ("Plaintiff") commenced this action against his attorneys Kriss & Feuerstein and Jerold C. Feuerstein ("Feuerstein") (collectively, "Defendants") for allegedly revealing confidential client information. Defendants now move to dismiss the complaint pursuant to CPLR §§ 3211(a)(7) and 3211(c).
In his complaint, Plaintiff alleges that he retained the Defendants to provide legal advice concerning certain debts incurred by his companies. Plaintiff alleges that he attended an initial client meeting with Feuerstein on April 23, 2010. Plaintiff discussed three legal matters with Feuerstein: two lawsuits filed against him and/or his companies concerning outstanding debts (one lawsuit by Bank of America and one lawsuit by Greystone Bank), and an outstanding judgment against him held by Valley National Bank ("Valley National Bank") in the amount of $205,299.53. Plaintiff sought legal advice on how to protect his assets from his creditors. Plaintiff also informed Feuerstein that he expected to receive an inheritance from his father's passing.
At the April 23 meeting, Feuerstein informed Plaintiff that he could represent him on the Bank of America and Greystone matters. However, Feuerstein stated that he could not represent him against Valley National Bank because the bank was a firm client.
On April 30, 2010, Plaintiff met Feuerstein at the Nassau County Courthouse for an appearance in the Bank of America case. On that day, Plaintiff alleges that Feuerstein questioned him "in great detail about his assets." In response to the questioning, Plaintiff informed Feuerstein that his house was listed under his wife's name. Plaintiff also emphasized to Feuerstein again that he wanted to protect his assets including the inheritance from his father.
For the Valley National Bank matter, Plaintiff hired attorney Isaac Schoenwald ("Schoenwald") to negotiate a settlement with Valley National Bank. Plaintiff alleges that Schoenwald reached a settlement with Valley National Bank in April 2010, in which the bank agreed to accept $70,000 in satisfaction of the original judgment of $205,299.53.
On May 4, 2010, Plaintiff alleges that he received an email from Feuerstein stating that he could no longer represent him because Plaintiff was in default of a loan to Valley National Bank. Feuerstein returned Plaintiff's retainer payment on May 6, 2010.
Plaintiff also alleges that, on May 6, 2010, Valley National Bank's attorney Paul Skurman ("Skurman") informed Schoenwald that the bank was no longer willing to settle for a reduced payment of the judgment and demanded the full amount of $205,299.53 from Plaintiff. Skurman informed Schoenwald that he knew that Plaintiff's house was in his wife's name, and asked for details about Plaintiff's inheritance from his father.
In his complaint, Plaintiff asserts three causes of action: (1) negligence; (2) legal malpractice; and (3) breach of fiduciary duty. In the first cause of action, Plaintiff claims that defendants acted negligently when they violated Rule 1.6 of the Rules of Professional Conduct by revealing confidential information. Specifically, Plaintiff claims that defendants revealed confidential information that: (a) Plaintiff's house was listed under his wife's name and (b) Plaintiff was expecting an inheritance from his father's passing.
In the second cause of action, Plaintiff claims that defendants committed legal malpractice by breaching confidentiality. Plaintiff alleges $177,000 in damages resulting from the loss of the negotiated settlement with Valley National Bank. He also alleges damages resulting from the freezing of his bank accounts, mental anguish, and pain and suffering.
In the third cause of action, Plaintiff alleges that defendants breached the fiduciary duties of loyalty and good faith by revealing the confidential information about his house and the inheritance from his father.
The Defendants now move to dismiss the complaint. First, the Defendants argue that the negligence claim should be dismissed because no private cause of action exists for a violation of the Rules of Professional Conduct.
Second, the Defendants argue that the legal malpractice claim should be dismissed because they never revealed any confidential information to Valley National Bank. Finally, the Defendants argue that the breach of fiduciary duty claim should be dismissed because it is duplicative of the legal malpractice claim.
In support of the motion, Feuerstein submits an affidavit stating that on "May 4, 2010, I sent the plaintiff an email advising him that I was unable to represent him because he was in default on the VNB loan." Feuerstein states "I never disclosed any information whatsoever regarding the plaintiff or his financial situation to anyone at or associated with VNB. I have no knowledge as to how they obtained any such information."
Defendants also submit an affidavit of David Jacques ("Jacques"), Vice President of Valley National Bank. Jacques states that "Valley National Bank's knowledge of the plaintiff's financial situation (including that he transferred ownership of his house to his wife and was expecting an inheritance from his father's estate) was based on information obtained by the bank's attorney, Paul S. Skurman, Esq., through his search of public records, in conversations with former employees of LibertyPointe Bank, or information provided by the plaintiff himself during his discussions with the bank." Jacques further states that "[n]either Jerold Feuerstein nor anyone else at Kriss & Feuerstein ever disclosed any information regarding the plaintiff or his personal financial situation to the bank."
In support of their motion, defendants also submit copies of: (1) Nassau County Clerk's record of the conveyance of Plaintiff s interest in his house to his wife dated February 26, 2009; and (2) a petition for Letters of Administration for the estate of Plaintiff's father that was filed with Nassau County Surrogate's Court on April 16, 2010.
In opposition to the motion, Plaintiff argues that material issues of fact exist as to whether the Defendants revealed confidential information to Valley National Bank.
Plaintiff submits an affidavit from Schoenwald. In the affidavit, Schoenwald states that on "May 6, 2012 I received a phone call from Paul Skurman the attorney for Valley National Bank and he informed me that the settlement that we previously had was off the table. He informed me that he had heard that Mr. Rubinstein had transferred his house into his wife's name and was expecting an inheritance from his fathers estate." Discussion
CPLR § 3211(a)(7) provides that a defendant may move for judgment dismissing the complaint on the grounds that "the pleading fails to state a cause of action." In determining whether to grant a motion to dismiss under CPLR § 3211(a)(7), the "court should accept as true the facts alleged in the complaint, accord plaintiff the benefit of every possible inference, and only determine whether the facts, as alleged, fit within any cognizable legal theory." Frank v. DaimlerChrysler Corp., 292 A.D.2d 118, 121 (1st Dep't 2002).
However, where the parties submit extrinsic evidence in connection with a CPLR § 3211(a)(7) motion to dismiss, the appropriate standard of review is "whether the proponent of the pleading has a cause of action, not whether he has stated one." IIG Capital LLC v. Archipelago, L.L.C., 36 A.D.3d 401, 402 (1st Dep't 2007) (quotations omitted). Affidavits submitted by a defendant will almost never warrant a dismissal unless they conclusively establish that the plaintiff has no cause of action, and it has been shown that a material fact as claimed by the pleader is not a fact at all and no significant dispute exists regarding it. Sokol v. Leader, 74 A.D.3d 1180, 1182 (2d Dep't 2010).
1. Negligence
In the first cause of action, Plaintiff alleges negligence based on Defendants' violation of Rule 1.6 of the Rules of Professional Conduct. I grant Defendants' motion to dismiss this claim. A private cause of action cannot be based on a violation of the professional rules of conduct. Weintraub v. Phillips, Nizer, Benjamin, Krim & Ballon, 172 A.D.2d 254, 254 (1st Dep't 1991).
2. Legal Malpractice
To prevail in a legal malpractice action, a plaintiff must demonstrate that he or she would have succeeded on the merits of the underlying action "but for" the attorney's negligence. Aquino v. Kuczinski, Vila & Assoc., P.C., 39 A.D.3d 216, 218 (1st Dep't 2007).
Here, I grant Defendants' motion to dismiss the legal malpractice claim. Based on the documentary evidence and affidavits submitted, Defendants demonstrated that Plaintiff does not have a cause of action for legal malpractice because Defendants did not reveal any confidential information about Plaintiff to Valley National Bank. Defendants submitted an affidavit from Valley National Bank's vice president David Jacques, in which Jacques states that the bank's knowledge of Plaintiff s financial situation came from search of public records, conversations with former employees, or information provided Plaintiff himself. Defendants also demonstrated that the information about Plaintiff's house and the inheritance from his father was available in public records prior to the initial client meeting between Plaintiff and Defendants on April 23, 2010.
Plaintiff claims that issues of fact exist as to whether Skurman learned the information about his financial situation from Defendants. However, Plaintiff fails to raise a material issue of fact. Although Schoenwald stated in his affidavit that Valley National Bank's lawyer Paul Skurman informed him over the phone that "he had heard that Mr. Rubinstein [Plaintiff] had transferred his house into his wife's name and was expecting an inheritance from his fathers estate" - this statement does not in any way establish that Skurman learned this information from Defendants. Plaintiff's allegation that Defendants revealed confidential information to Valley National Bank is vague and conclusory, and therefore his legal malpractice claim must be dismissed. Lester v. Braue, 25 A.D.3d 769, 769 (1st Dep't 2006).
For the above reasons, I grant Defendants' motion to dismiss the second cause of action for legal malpractice.
3. Breach of Fiduciary Duty
An "attorney stands in a fiduciary relationship to the client which relationship is imbued with ultimate trust and confidence that imposes a set of special and unique duties, such as maintaining confidentiality." Beltrone v. Gen. Schuyler & Co., 252 A.D.2d 640, 641 (3d Dep't 1998); Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d 1,9 (1st Dep't 2008).
Here, I grant the Defendants' motion to dismiss the breach of fiduciary claim because it is duplicative of the legal malpractice claim. Plaintiff claims that Defendants breached their fiduciary duties by revealing confidential information and he seeks economic damages resulting from the breach. This is a duplicative claim that must be dismissed because it is based on the same allegations as the legal malpractice claim and seeks identical relief. Nevelson v. Carro, Spanbock, Kaster & Cuiffo, 290 A.D.2d 399, 400 (1st Dep't 2002).
In accordance with the foregoing, it is
ORDERED that defendant Kriss & Feuerstein and Jerold C. Feuerstein's motion to dismiss plaintiff Ian Rubinstein's complaint pursuant to CPLR § 3211(a)(7) and 3211(c) is granted, and the complaint is dismissed; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly.
This constitutes the decision and order of the Court. Dated: New York, New York
July 12, 2013
ENTER:
______________________
Saliann Scarpulla, J.S.C.