Opinion
Index No. 160342/2020 Motion Seq. Nos. 001 002
05-11-2022
ANU ALLEN Plaintiff, v. CHRISTOPHER THOMPSON, Defendant.
Unpublished Opinion
MOTION DATE May 12, 2022
DECISION + ORDER ON MOTION
SABRINA KRAUS JUSTICE
The following e-filed documents, listed by NYSCEF document number (Motion 001) 4, 5, 6, 7, 8, 9, 10, 13, 14, 15, 16, 18, 20 were read on this motion to/for DISMISSAL. The following e-filed documents, listed by NYSCEF document number (Motion 002) 22, 23, 24, 25, 26, 27, 28, 29, 30, 31 were read on this motion to/for REARGUMENT/RECONSIDERATION
BACKGROUND
In this action which asserts legal malpractice, defendant had made a pre-answer motion to dismiss on multiple grounds. The court (Kelly, J) issued an interim order, dated April 27, 2021 granting the portion of the motion that sought dismissal based on lack of personal jurisdiction, to the extent of setting the matter down for a traverse hearing. On June 4, 2021, the hearing commenced, and, after the testimony of the process server, defendant conceded that service was proper.
The balance of the motion to dismiss has not yet been addressed.
On March 17, 2022, defendant moved for an order to reargue the decision of the Hon. Shawn Timothy Kelly dated June 4, 2021, to the extent (1) it did not consider the portions of defendant's motion seeking dismissal pursuant to CPLR § 3211(a)(1), (5) and (7) dismissing plaintiffs first cause of action for legal malpractice, second cause of action for Breach of fiduciary duty, third cause of action for Breach of Contract, or alternatively, extending Defendant's time to respond to the complaint.
On May 12, 2022, this court heard argument and reserved decision.
The court will address the balance of the claims in Motion Seq No. 1 on the merits, thereby rendering Motion Seq No. 2 moot.
ALLEGED FACTS
Plaintiff alleges the following facts in her complaint. On or about February 28, 2012, Plaintiff was terminated from Chanel, Inc. after nineteen (19) years of employment. Plaintiff was offered a severance package of $21,789.20 and five (5) months of paid COBRA. Plaintiff was not satisfied with this arrangement and believed that her employment was terminated on the basis of discrimination. Plaintiff consulted with Defendant for guidance with regard to accepting the severance package, but still retained her legal right to file a discrimination lawsuit against Chanel, Inc. Defendant, as an attorney, agreed to represent Plaintiff, to negotiate a separation and release agreement (the "Agreement") from Chanel, Inc., that would permit Plaintiff to retain her legal right to move forward on her discrimination claim and represent her with respect to that claim as well.
After a few weeks of negotiation, Defendant received the final draft of the Agreement from Chanel, Inc. The Agreement that Defendant received contained language that excluded from the release any discrimination claims. Unbeknownst to Plaintiff at the time, Defendant unilaterally and without Plaintiffs consent, changed one word to the Agreement, changing the word "including" to "excluding" in reference to Plaintiff waiving any rights to sue for discrimination.
This one change to the Agreement made by Defendant, now made the Agreement read that Plaintiff released all of her rights as part of the settlement, except for any right arising under Title VII, the New York State Human Rights Law and the New York City Human Rights Law, thereby allowing Plaintiff to still file a lawsuit under these statutes. Plaintiff was sent this new document by overnight mail and was instructed by Defendant to initial each page and sign it. Defendant then directed Plaintiff to send the altered document back to Chanel, Inc.
On or about April 15, 2012, Plaintiff received her first severance check in the amount of $14,940.19. Subsequently, on or about September 6, 2012, Defendant filed a discrimination lawsuit on Plaintiffs behalf in the United States District Court for the Southern District of New York (Allen v. Chanel Inc., etal., 12-cv-6758 (LAP)) (the "Discrimination Suit"). The Discrimination Suit alleged that Plaintiff was terminated due to her age and race. Chanel, Inc. filed a motion to dismiss the case. United States District Judge Robert Patterson denied this motion on the grounds that Plaintiff had not knowingly or voluntarily waived any of her rights to file a discrimination lawsuit against Chanel, Inc.
On or about December 3, 2012, Defendant emailed to Plaintiff an affidavit that he had prepared and instructed Plaintiff to sign. The affidavit stated that Plaintiff, herself, was personally responsible for modifying the Agreement and not Defendant. Plaintiff questioned Defendant as to why the affidavit was worded that way and was told by Defendant that legally this is the way that it had to be done; and it was the only way that she could continue her discrimination lawsuit.
Plaintiff signed the Agreement.
On or about June 18, 2013, Chanel filed a counterclaim in the Discrimination Suit against Plaintiff. The counterclaim alleged that Plaintiff knowingly and fraudulently misrepresented the severance agreement to Chanel and demanded that they be reimbursed the amount already paid in severance as well as for the costs of defending the discrimination lawsuit. Chanel then filed a motion for summary judgment on their counterclaim as well as on the discrimination claims. On or about November 13, 2014, United States District Judge Loretta Preska ruled in favor of Chanel and dismissed Plaintiffs case and upholding and awarding damages to Chanel on the counterclaims.
In or about the beginning of December 2014, Plaintiff and Chanel entered into an agreement whereby Plaintiff was to repay the severance amount of $14,940.19, plus interest, and return the premium payments for COBRA, plus interest. Finally, Plaintiff was to return to Chanel any evidence that she may have had against them as well as waive any rights to appeal the decision by Judge Preska. Further, as part of the agreement, Plaintiff was to return documents relating to a sexual harassment incident from years prior. In exchange, Chanel would agree to refrain from suing Plaintiff for fraud with regard to the altered document.
Plaintiff expressed the importance of having this Discrimination Suit sealed upon completion, as it would harm Plaintiff s job and career opportunities. Plaintiff was continuously assured by Defendant that he would make sure it was sealed and there was nothing to worry about. Negotiations regarding the settlement agreement continued and on or about April 16, 2017, Defendant sent Plaintiff a new settlement agreement and general release from Chanel, Inc. that contained a new confidentiality provision stating that if Plaintiff or any other person acting as her agent ever discusses the claims or the settlement agreement, Plaintiff would be required to pay Chanel $10,000.00 for each and every breach of the confidentiality provision plus any attorney's fees.
Plaintiff requested numerous times that this provision be taken out of the agreement, but Defendant refused to negotiate with Chanel and stated that he wanted the case to be over with.
On or about April 21, 2017, Plaintiff contacted Peter Ginsberg, Esq., a friend, who agreed to review this new settlement and release agreement and address some of Plaintiff s concerns. Mr. Ginsberg's office then contacted Defendant in regard to certain changes to the agreement. Defendant informed Mr. Ginsberg that he did not believe that Chanel would go along with those changes but that he would pass along the revised version of the agreement.
In or about April 2018, Plaintiff was searching for new employment opportunities and realized that her lawsuit had never been sealed despite the fact that Defendant assured her on numerous occasions that he would make sure the case was sealed. This information about the case was harming Plaintiff s chances of finding new employment.
In or about February 19, 2019, Plaintiff contacted Defendant expressing surprise that the case was never sealed, and Defendant attempted to shift the blame and make other excuses for why it was not sealed. Defendant informed Plaintiff that the only way to now seal the case would be to file an Order to Show Cause with Judge Preska explaining the situation. Defendant proceeded to hang up the phone on Plaintiff. Plaintiff tried numerous other times to get in touch with Defendant but was unable to do so.
On or about February 19, March 5, March 11, and March 18 of 2019, Plaintiff left voicemail messages for Defendant which were never returned. On or about February 26 and March 5, of 2019, Plaintiff sent emails to Defendant which were also never returned. Finally, on or about August 13, 2019, Plaintiff sent a certified letter to Defendant inquiring about how Plaintiff should proceed which also went unanswered.
On or about November 30, 2020, Plaintiff filed the instant action.
DISCUSSION
It is well settled that "a court, when deciding whether to grant a motion to dismiss pursuant to CPLR § 3211, must take the allegations asserted within a plaintiffs complaint as true and accord plaintiff the benefit of every possible inference, determining only whether the facts as alleged fit within any cognizable legal theory." Samiento v. World Yacht Inc., 10 N.Y.3d 70, 79 (2008).
The Motion to Dismiss Based on Documentary Evidence is Denied
CPLR § 3211(a)(1) provides "(a) party may move for judgment dismissing one or more causes of action asserted against him on the ground that a defense is founded upon documentary evidence." Dismissal under CPLR 3211(a)(1) is warranted "only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law" (Leon v. Martinez, 84 N.Y.2d 83, 88; see generally Siegel, N.Y. Prac. § 269, at 428 [3d ed]).
The "documentary" evidence Defendant relies upon for this prong of the motion is alleged prior inconsistent statements by plaintiff in her deposition in the Federal Action. It is well settled that deposition testimony is not documentary evidence as contemplated by CPLR 3211(a)(1).
As this Court held in (Berger v. Temple Beth-El of Great Neck, 303 A.D.2d 346, 347, 756 N.Y.S.2d 94), affidavits are not documentary evidence (to the same effect, see Tsimerman v. Janoff, 40 A.D.3d 242, 835 NY.S.2d 146 [1st Dept], and Siegel, Practice Commentaries, McKinney's Cons. Laws of NY., Book 7B, CPLR C3211.10). In (Weil, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 10 A.D.3d 267, 271, 780 N.Y.S.2d 593), the Appellate Division, First Department, reversed the trial court's dismissal pursuant to CPLR 3211(a)(1), finding that e-mails and deposition and trial testimony were not the types of documents contemplated by the Legislature when it enacted this provision.Fontanetta v. Doe, 73 A.D.3d 78, 85 (2010).
Based on the foregoing, Defendant's motion to dismiss pursuant to CPLR §3211(a)(1) is denied.
The Complaint States a Cause of Action
In assessing a motion under CPLR § 3211(a)(7), "[u]nder modern pleading theory, a complaint should not be dismissed on a pleading motion so long as, when the plaintiff is given the benefit of every possible favorable inference, a cause of action exists." Rovello v. Oroflno Realty Co., 40 N.Y.2d 633 (1976). "[T]he criterion is whether the proponent of the pleading has a cause of action, not whether he has stated one." Leon v. Martinez, 84 N.Y.2d 83 (1994).
"Stated another way, the court's role in a motion to dismiss is limited to determining whether a cause of action is stated within the four corners of the complaint, and not whether there is evidentiary support for the complaint." Frank v. DaimlerChrysler Corp., 292 A.D.2d 118, 121 (1st Dep't 2002); see Weiss v. Lowenberg, 95 A.D.3d 405, 406 (1st Dep't 2012). "Whether a plaintiff can ultimately establish its allegations is not part of the calculus in determining a motion to dismiss." EBCI, Inc. v. Goldman, Sachs & Co., 5 N.Y.3d 11, 19 (2005).
"An action for legal malpractice requires proof of three elements: (1) that the attorney was negligent; (2) that such negligence was a proximate cause of plaintiff s losses; and (3) proof of actual damages" (Brooks v Lewin, 21 A.D.3d 731, 734 [2005], Iv denied 6 N.Y.3d 713 [2006]).LaRusso v. Katz, 30 A.D.3d 240, 243 (2006). Plaintiff alleges that Defendant failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that but for the defendant's negligence Plaintiff would have avoided damages (AmBase Corp. v. Davis Polk & Wardwell, 8 N.Y.3d 428, 434[2007]; see Barbara King Family Trust v. Voluto Ventures LLC, 46 A.D.3d 423, 424 [2007]; Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d 1, 10 (2008).
Plaintiffs specific factual allegations of negligence, causation, and damages are sufficient to state a cause of action for legal malpractice. Pyne v. Block & Assoc, 305 A.D.2d 213 (1 st Dep't 2003). See Between The Bread Realty Corp. v. Salans Hertzfeld Heilbronn Christy & Viener, 290 A.D.2d at 381; DweckLaw Firm v. Mann, 283 A.D..2d at 293;Greenwich v Markhoff, 234 A.D.2d 112, 114 (1st Dep't 1996); Gotay v. Breitbart, 14 A.D.3d 452, 454 (1st Dep't 2005).
The elements of a cause of action for breach of fiduciary duty are: "(1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the defendant's misconduct." Palmetto Partners, L.P. v. A JW Qualified Partners, LLC, 83 A.D.3d 804, 807 [2nd Dept 2011] (quoting Rut v. Young Adult Inst, Inc., 74 A.D.3d 776, 777 [2nd Dept 2010]). While the complaint does set forth allegations sufficient to make out a cause of action for breach of fiduciary duty, this cause of action is nevertheless still subject to dismissal as it is duplicative of the legal malpractice claim, and it is based on the same facts and occurrences as the legal malpractice claim, and asserts the same damages. Alphas v. Smith, 147 A.D.3d 557, 559 (2017).
The elements of a cause of action for breach of contract include the existence of a contract, the plaintiffs performance thereunder, the defendant's breach thereof, and resulting damages (see Morris v. 702 E. Fifth St. HDFC, 46 A.D.3d 478 [2007]). In this action the complaint sufficiently alleges the required elements and the claim is not duplicative of the legal malpractice claim because different damages are alleged. Additionally, as held by the Appellate Division, Second Department:
A cause of action to recover damages for breach of contract may be maintained against an attorney where there is a promise to perform and no subsequent performance, and such is not duplicative of a legal malpractice cause of action (seeRuffolo v. Garbarini & Scher, 239 A.D.2d 8, 9-10, 668 N.Y.S.2d 169; Kaplan v. Sachs, 224 A.D.2d 666, 667, 639 N.Y.S.2d 69; Saveca v. Reilly, 111 A.D.2d 493, 494-495, 488 N.Y.S.2d 876; see also Vogel v. Lyman, 246 A.D.2d 422, 423, 668 N.Y.S.2d 162; see generally Colucci v. O'Brien, 204 A.D.2d 257, 611 N.Y.S.2d 594; cf Ferdinand v. Crecca & Blair, 5 A.D.3d 538, 539, 774 N.Y.S.2d 714).Reidy v. Martin, 77 A.D.3d 903 (2010).
At oral argument, Defendant asserted that he had never ben paid by Plaintiff for the legal services rendered, and Defendant pointed out that the complaint herein is unverified, and no affidavit was submitted by Plaintiff in opposition to the motion. However, no evidentiary showing is required on a motion to dismiss. As held by the Court of Appeals:
... CPLR 3211 allows plaintiff to submit affidavits, but it does not oblige him to do so on penalty of dismissal, as is the case under CPLR 3212 when defendant has made an evidentiary showing that refutes the pleaded cause of action. If plaintiff chooses to stand on his pleading alone, confident that its allegations are sufficient to state all the necessary elements of a cognizable cause of action, he is at liberty to do so and, unless the motion to dismiss is converted by the court to a motion for summary judgment, he will not be penalized because he has not made an evidentiary showing in support of his complaint.Rovello v. Oroflno Realty Co., 40 N.Y.2d 633, 635 (1976).
Based on the foregoing, Defendant's motion for dismissal pursuant to CPLR §3211(a)(7) is granted only as to the cause of action or breach of fiduciary duty. l
The Motion to Dismiss Based on Collateral Estoppel is Denied
The doctrine of collateral estoppel "bars a party from re-litigating in a subsequent proceeding an issue clearly raised in a prior proceeding and decided against that party where the party to be precluded had a full and fair opportunity to contest the prior determination." Weiss v. Manfredi, 83 N.Y.S.2d 974 (1994). In Weiss, the Court found that collateral estoppel did not operate to bar a legal malpractice claim. 83 N.Y.S.2d at 326. The Court found there was no identity of issues between the denial in the underlying action of the motion to vacate the settlement and the action for legal malpractice predicated upon the negligence of the attorneys in handling the settlement. Id. The findings by the previous court that it was "satisfied with the amount of the settlement" were not "entitled to preclusive effect" to bar a claim that the plaintiffs attorneys negligently negotiated an inadequate settlement. Id. at 326-27.
Here, the doctrine of collateral estoppel is inapplicable and does not bar Plaintiffs claims. Plaintiff is alleging that Defendant negligently guided and directed her to change the severance agreement which ultimately led to the dismissal of her federal discrimination lawsuit, and resulted in Plaintiff having to pay back her severance pay; and resulting in as well, continuing harm in Plaintiffs inability to find meaningful employment. There was no prior action that precludes Plaintiff from bringing this action. As such, Defendant's motion to dismiss based on collateral estoppel is denied.
The Motion to Dismiss based on Statute of Limitations is Denied
The statute of limitations for legal malpractice is three years [CPLR § 214(6)].
However, Plaintiff relies upon the continuous representation doctrine in asserting this action is timely. For said doctrine to apply to an action sounding in legal malpractice, there must be clear indicia of an ongoing, continuous, developing, and dependent relationship between the client and the attorney which often includes an attempt by the attorney to rectify an alleged act of malpractice. Pittelli v. Schulman, 128 A.D.2d 600 (2d Dep't 1985). One of the predicates for the application of the doctrine is continuing trust and confidence in the relationship between the parties. Coyne v. Bersani, 61 N.Y.2d 939 (1984).
A person is not expected to jeopardize his pending case or his relationship with his attorney handling that case during the period that the attorney continues to represent the person. Since it is impossible to envision a situation where commencing a malpractice suit would not affect the professional relationship, the rule of continuous representation tolls the running of the Statute of Limitations on the malpractice claim until the ongoing representation is completed. Glamm v. Allen, 57 N.Y.2d 87 (1982).
In N & S Supply, Inc. v. Simmons, 305 A.D.2d 648 (2d Dep't 2003), the guarantor of corporate debt, as a defendant in an action to recover on a guaranty, brought a legal malpractice action against his former attorney. The court ruled that the former attorney, who drafted a buyout agreement for the client to terminate the client's relationship with the corporation, performed continuing legal services, thereby tolling the statute of limitations, where the attorney-initiated contact with the client on several occasions after drafting the agreement in an effort to effectuate the client's separation from the corporation and to discuss a strategy to defend the action.
In Mancino v. Levin, 268 A.D.2d 507 (2d Dep't 2000), the defendant represented the plaintiff in a matrimonial action which was settled in 1992 pursuant to a stipulation. In August 1997, the plaintiff commenced an action alleging legal malpractice. The court found that an ongoing representation of the plaintiff in connection with the enforcement of the stipulation of settlement of the matrimonial action tolled the statute of limitations.
In Shumsky v. Eisenstein, 96 N.Y.2d 164 (2001), the defendant-attorney was hired by the plaintiffs to pursue a breach of contract action against the inspector who they hired to inspect a home they were purchasing. The defendant failed to file the claim before the statute of limitations had expired. He then avoided the plaintiffs because he was embarrassed by his error. As a result, the plaintiffs did not file their legal malpractice claim until after the statute of limitations deadline had passed. The court ruled that the continuous representation doctrine was applicable because both sides understood that further services were needed on the matter in question and the plaintiffs were left with the reasonable impression that the defendant was actively addressing their legal needs. See also Town of Wallkill v. Rosenstein, 40 A.D.3d 972 (2d Dep't 2007).
In Luk Lamellen U. Kupplungbau GmbH v. Lerner, 166 A.D.2d 505 (2d Dept. 1990), the plaintiff retained an attorney to prepare a patent application. Some four years after the plaintiff discovered that the attorney made a mistake in the application, the plaintiff brought an action for legal malpractice and breach of contract. The attorney brought a motion to dismiss the complaint on the grounds that it was untimely filed. The trial court denied the motion. On appeal, the Appellate Division affirmed the order, holding that because the attorney continued to represent the client with respect to the same patent from which the alleged malpractice stemmed, the continuous representation doctrine extended the time for filing the action.
Finally, in Spitzer v. Newman, 163 A.D.3d 1026 (2d Dep't 2018), the defendant's motion to dismiss under the statute of limitations was based on the premise that his representation of the plaintiff in connection with underlying loan transactions ended in 2009. Accordingly, the defendant contended that the three-year statute of limitations for legal malpractice expired in 2012, before the legal malpractice action was commenced. In opposition, however, the plaintiff raised a question of fact as to whether the continuous representation doctrine tolled the statute of limitations. In holding that it did, the Appellate Division agreed with the trial court's determination that the complaint was not subject to dismissal pursuant to CPLR § 3211(a)(1) and (5).
The above cited authority supports denial of Defendant's motion at this time. Plaintiff alleges that while she retained Defendant to advise and negotiate a separation agreement from her former employer in 2012, that in no way ended the attorney-client relationship as Plaintiff continued to be represented by Defendant in a discrimination lawsuit against that same former employer. It is alleged that there was a clear ongoing trust and confidence relationship between the parties as Defendant continued to represent Plaintiff throughout her discrimination action in federal court. Plaintiffs action against her former employer, with Defendant representing her therein did not ultimately end until 2017 (when the parties executed a settlement agreement). Plaintiff therefore alleges that she was permitted to file this case up to and including 2020. Furthermore, the statute of limitation in New York had been tolled from March until November by Executive Order 202.8 signed by Governor Cuomo.
Once again on this 3211 motion the court must deem these allegations to be true.
Based on the foregoing the motion to dismiss based on statute of limitations is denied.
The court has considered Defendant's claim as to the statute of frauds and finds same to be without merit.
CONCLUSION
WHEREFORE it is hereby:
ORDERED that Defendant's motion to dismiss is granted to the extent of dismissing the cause of action for breach of fiduciary duty and otherwise denied; and it is further
ORDERED that Motion Seq No 2 is denied in its entirety; and it is further
ORDERED that defendant is directed to serve an answer to the complaint within 20 days after service of a copy of this order with notice of entry; and it is further
ORDERED that counsel are directed to appear for a virtual preliminary conference on June 30th, 2022, at 2:30 PM; and it is further
ORDERED that, within 20 days from entry of this order, plaintiff shall serve a copy of this order with notice of entry on the Clerk of the General Clerk's Office (60 Centre Street, Room 119); and it is further
ORDERED that such service upon the Clerk shall be made in accordance with the procedures set forth in the Protocol on Courthouse and County Clerk Procedures for Electronically Filed Cases (accessible at the "E-Filing" page on the court's website at the address www.nycourts.gov/supctmanh);]; and it is further
ORDERED that any relief not expressly addressed has nonetheless been considered and is hereby denied; and it is further
ORDERED that this constitutes the decision and order of this court.