Soussis v. Lazer, Aptheker, Rosella Yedid, P.C.

Full title: JULIE SOUSSIS, Plaintiff, v. LAZER, APTHEKER, ROSELLA YEDID, P.C., MARK…

Court: Supreme Court of the State of New York, Nassau County

Date published: Oct 12, 2010

2010 N.Y. Slip Op. 32991 (N.Y. Sup. Ct. 2010)

Opinion

17936/05.

October 12, 2010.

Lazar, Aptheker, Rosella Yedid, P.C., New York, NY.

Stuart Blander, Esq., Heller, Horowitz Feit, P.C., New York, NY.

Wilson Elser, Moskowitz, Edelman Dicker, LLP, New York, NY.

HON. ANTHONY L. PARGA, Justice.

1 2 3 4-6 7-9

Notice of Motion, Affs. Exs ................................ Affirmation In Support Exs ................................. Reply Affirmation Exs ...................................... Affidavit ................................................... Memorandum of Law ...........................................

The motion by the defendants Lazer, Aptheker, Rosella Yedid, P.C. and Ralph A. Rosella, Esq. for an order pursuant to CPLR 3124 compelling the third-party defendant Benjamin Vinar to produce certain documents is denied.

The plaintiff in this action seeks to recover damages for legal malpractice. In her complaint, the plaintiff alleges that she retained the defendant law firm of which the defendant Goidell was a member to represent her in connection with her breach of contract claim against her former employer Stephens, Inc., based upon its failure to pay her all commissions due her, as well as her "discrimination claims against [Stephens, Inc.] for the way which it treated and terminated her." In her Bill of Particulars, the plaintiff alleges that her employment discrimination claim against Stephens, Inc., consisted of the following:

Her supervisor told [her] that being a single mother would interfere with her being able to do business for Stephens. He told her that as a single mother she would not be able to meet his expectations for coming in early and working hard because she would have to look after her children. He did not invite her to meetings and repeatedly made remarks about her single motherhood. Despite the fact that she greatly outperformed him and other salesmen at Stephens Inc. he took away many of plaintiff's accounts, narrowed her territorial responsibility and then fired her.

She alleges that her commissions claim was placed in danger of abandonment due to the defendant law firm's failure to actively pursue it in arbitration before the New York Stock Exchange ("NYSE") and that worse yet, her employment discrimination claim was not properly advanced before the Equal Employment Opportunity Commission ("EEOC") before the statute of limitations expired.

The defendant law firm has brought a third-party action against the plaintiff's successor attorney third-party defendant Benjamin Vinar who undertook her representation when it was terminated. The defendant law firm alleges and the plaintiff's Statement of Claim before the NYSE establishes that when Vinar assumed her representation, she had a claim pending before the NYSE arbitration panel seeking recovery of unpaid commissions totaling $400,000; unpaid business expenses totaling $15,000; reformation of Form U-5 which stated that she was terminated "for failure to follow company procedures;" and, defamation based on the U-5. The defendant law firm alleges and the plaintiff and her successor attorney third-party defendant Vinar do not dispute that her claim was settled for $150,000 without reformation of the U-5. Via its third-party claim, the defendant law firm alleges that if in fact the plaintiff sustained damages as alleged in her complaint, they were caused in whole or in part by her successor attorney third-party defendant Vinar. More specifically, the defendant law firm alleges that if the plaintiff suffered lost commissions and expenses, loss of employment on account of the U-5 and failed to recover for employment discrimination, those losses were caused in whole or in part by her successor attorney third-party defendant Vinar's negligence, malpractice, breach of duty, breach of fiduciary duty and his omissions and commissions. The defendant law firm seeks indemnification and contribution of the plaintiff's successor attorney the third-party defendant Vinar.

The third-party defendant Vinar's motion to dismiss the third-party complaint was denied by order of this Court. On appeal, the Appellate Division, Second Department held that the plaintiff's successor attorney third-party defendant Vinar's alleged negligence in failing to advance an employment discrimination claim on her behalf in her arbitration proceeding could not have been a proximate cause of the failure to advance that claim because it was time-barred when he assumed the plaintiff's representation. Soussis v Lazer. Aptheker, Rosella Yedid, P.C., 66 AD3d 993, 994-995 (2^nd Dept. 2009). However, the Appellate Division held that the defendant law firm is entitled to seek contribution or indemnification from the plaintiff's successor attorney third-party defendant Vinar "to the extent that his alleged negligence in settling the plaintiff's arbitration claim and in failing to seek reformation of the U-5 may have contributed to or aggravated her injuries." Suossis v Lazer, Optheker, Rosella Yedid, P.C., supra, at p. 995, citing Schauer v Joyce, 54NY2d 1, 3-6 (1981);Aljaro v Schwartz, 233 AD2d 281, 281-282 (2^nd Dept. 1996); Herkrath v Gaggin Mayo, 192 AD2d 487, 487-488 (1^st Dept. 1993).

The defendant law firm has sought discovery of the plaintiff's communications with her successor attorney third-party defendant Vinar. While the majority thereof have been produced, four which concern the settlement of her arbitration claim with Stephens, Inc. have not based upon the attorney-client privilege. In his Privilege Log, the plaintiff s successor attorney third-party defendant Vinar maintains that the subject matter of the documents is "settlement negotiations in connection with the arbitration proceeding and strategy with respect to the malpractice action against the defendants." The defendant law firm seeks via this motion to compel the production of those withheld documents.

Regarding privilege, "[t]he burden of establishing any right to protection is on the party asserting it; the protection claimed must be narrowly construed; and its application must be consistent with the purpose of the underlying immunity." Spectrum Systems Intern. Corp. v Chemical Bank, 78 NY2d 371, 377 (1991). The plaintiffs communications with her successor attorney regarding the settlement of her claim undoubtedly fall within the attorney-client privilege and are accordingly not subject to disclosure absent a waiver by the plaintiff.See CPLR 4503(a)(1); Lue v Finkelstein Partners, LLP, 67 AD3d 1187, 1188 (2^nd Dept. 2009), citing Raphael v Clune White Nelson, 146 AD2d 762, 763 (2^nd Dept. 1989); Jakobleff v Cerrato, Sweeney Cohn, 97 AD2d 834, 835 (2^nd Dept. 1983). Merely "'by commencing suit against [her] former attorneys, the plaintiff has not placed in issue privileged communications with [her] attorney who represented [her] in the settlement.'" Lue v Finkelstein Partners. LLP, supra, at p. 1188-1189, quoting Raphael v Clune White Nelson, supra, at p. 763. However, the privilege is waived where the "client places the subject matter of the privileged communication at issue or where invasion of the privilege is required to determine the validity of the client's claim or defense and application of the privilege would deprive the adversary of vital information (emphasis added)." Jakobleff v Cerrato. Sweeney Cohn, supra, atp. 835 citing People v Edney, 39 NY2d 620 (1976); Cornell v Bernstein-Macaulay, Inc., 407 F.Supp. 420 (SDNY 1976); Hearn v Rhay, 68 FRD 574 (ED Wash 1975); see also, Deutsche Bank Trust Co. of Americas v Tri-Links Inv. Trust, 43 AD3d 56, 64 (1^st Dept. 2007). "[T]hat a privileged communication contains information relevant to issues the parties are litigating does not, without more, place the contents of the privileged communication 'at issue' in the lawsuit; if that were the case, a privilege would have little effect." Deutsche Bank Trust Co. of Americas v Tri-Links Inv. Trust, supra at p. 64, citingLong Is. Light. Co. v Allianz Underwriters Ins. Co., 301 AD2d 23, 33 (1^st Dept. 2002); see also, Veras Investment Partners, LLC v Akin Gump, Strauss Hauer Feld LLP, 52 AD3d 370, 374 (1^st Dept. 2008). "Rather, 'at issue' waiver occurs 'when the party has asserted a claim or defense that he intends to prove by use of the privileged materials."Deutsche Bank Trust Co. of Americas v Tri-Links Inv. Trust,supra, at p. 64, citing North Riv. Ins. Co. v Columbia Cas. Co., 1995 WL 5792 (SDNY 1995) (citations omitted);Manufacturers Traders Trust Co. v Servotronics, Inc., 132 AD2d 392, 397 (4^th Dept. 1987); see also, Veras Investment Partners, LLC v Akin. Gump, Strauss Hauer Feld LLP,supra, at p. 374. "There is no 'at issue' waiver where the party asserting privilege 'does not need the privileged documents to sustain its cause of action.'" Carl v Cohen, 23 Misc3d 1110(A) (Supreme Court New York County 2009), quotingManufacturers Traders Trust Co. v Servotronics, Inc.,supra, at p. 397; Deutsche Bank Trust Co. of Americas v Tri-Links Investment Trust, supra at p. 64. "A client also waives the attorney-client privilege by placing the subject matter of a counsel's advice in issue and by making selective disclosure of such advice." IMO Industries v Anderson Kill Olick, P.C., 192 Misc2d 605 (Supreme Court New York County 2007), citing Orco Bank v Prosteinas DelPacifico, 179 AD2d 3 90 (1^st Dept. 1992).

Whether the defendant law firm's actions or inactions or the plaintiff's successor attorney third-party defendant Vinar's actions or inactions proximately caused the plaintiff's injuries is clearly at issue in this case. See, Carl v Cohen, supra, citing Perks v Lauto Garabedian, 306 AD2d 261, 262 (2^nd Dept. 2003); Golden v Cascione, Chechanover Purcigliotti, 286 AD2d 281 (1^st Dept. 2001).

In opposition to disclosure, the plaintiff maintains that she has "never 'placed in issue' anything relating to the settlement of the arbitration or the U-5" and that her "damages are based on the wrongful termination of [her] employment by Stephens Inc." She represents that she "do[es] not seek any damages relating to the U-5 which are separate and apart from the damages which were caused to [her] by the wrongful termination of [her] employment by Stephens Inc., such as, for example, a defamation action against Stephens, Inc. based on false statements in the U-5." That defamation claim, however, was advanced in the arbitration proceeding which the plaintiff's successor attorney third-party defendant Vinar is alleged by the defendant law firm to have negligently settled.

Having examined the pertinent documents, while they do in fact "shed light on why plaintiff did not seek reformation of the U-5 in the arbitration" and why she did not pursue her defamation claim, they consist of strategic negotiation tactics as opposed to facts determinative of the plaintiff's legal claims. They remain protected by the attorney-client privilege because the plaintiff will not rely on them in the prosecution of her claim. In fact, the defendant law firm does not need those communications to defend itself or to prosecute its third-party claim against the plaintiff s successor attorney third-party defendant Vinar. The fact remains and it simply cannot be disputed by the plaintiff or her successor attorney third-party defendant Vinar that her defamation claim as well as the amendment of the U-5 were in fact advanced in the arbitration proceeding; remained viable at the plaintiff's successor attorney third-party defendant Vinar's assumption of her representation; and, they were settled or abandoned by the plaintiff and Vinar. Therefore, the defendant law firm is free to attribute responsibility and concomitantly liability to the plaintiff's successor attorney third-party defendant Vinar for those claims regardless of the reasons underlying their settlement or abandonment.

Nor does the prohibition against selective disclosure constitute a waiver here and require the documents' production. The documents that have been produced were produced by Vinar, not the plaintiff. She accordingly has not waived her privilege.