Opinion
Index No. 152026/2022 MOTION SEQ. No. 005
08-18-2023
ANDREW KADAH, Plaintiff, v. MAYADA KADAH, HOLLAND & KNIGHT LLP Defendant.
Unpublished Opinion
MOTION DATE 02/23/2023
PRESENT: HON. RICHARD LATIN, Justice
DECISION + ORDER ON MOTION
HON. RICHARD LATIN, J.S.C.
The following e-filed documents, listed by NYSCEF document number (Motion 005) 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 154, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 211, 212, 213, 214 were read on this motion to/for DISMISS.
In this action for malpractice, defendant Holland &Knight LLP (H&K) moves to dismiss the amended complaint filed by plaintiff pursuant to CPLR 3211(a)(7) or to dismiss pursuant to CPLR 327 on the grounds that New York is an inappropriate and inconvenient forum in which to litigate Kadah's legal malpractice claims relating to a Florida probate proceeding.
This action stems from alleged malpractice in the handling of a legal matter relating to plaintiff's ownership of International Controls and Measurements Corp. ("ICM"), specifically the alleged failure to file a claim that plaintiff owned 3,160 shares of ICM stock prior to the November 1, 2016 deadline to make such a claim. It is uncontested that no timely claim was filed. However, H&K argue that they were not retained to represent Kadah individually, but rather in his role as Administrator ad litem over the company. Defendant H&K further asserts that ownership of shares in ICM could not be established despite best efforts, due to significant issues with corporate records.
Defendant H&K alternatively moves to dismiss plaintiff's amended complaint pursuant to CPLR 327 by arguing that Florida is the appropriate venue for this action. It is uncontested that the probate proceeding was administered in Florida pursuant to Florida law and that H&K utilized Florida attorneys and maintained their files relating to the case in Florida. Lastly, if neither of these arguments are successful, defendant H&K moves to dismiss plaintiff's action for breach of fiduciary duty as duplicative.
"On a motion to dismiss the complaint pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory." (Breytman v Olinville Realty, LLC, 54 A.D.3d 703, 703-704 [2d Dept 2008]; see also, e.g., Leon v Martinez, 84 N.Y.2d 83, 87 [1994]; Elie v City of New York, 92 A.D.3d 716, 717 [2d Dept 2012]). "Whether a plaintiff can ultimately establish its allegations is not part of the calculus in determining a motion to dismiss." (EBC1, Inc. v Goldman, Sachs & Co., 5 N.Y.3d 11, 19 [2005]).
"In assessing the adequacy of a claim of negligent misrepresentation or attorney malpractice, a court must first look to the relationship of the parties. Where the relationship of the parties fails to reveal actual privity or a relationship that otherwise closely resembles privity, no cause of action exists for negligent misrepresentation. In terms of attorney malpractice, absent privity, plaintiff must set forth a claim of 'fraud, collusion, malicious acts or other special circumstances' in order to maintain a cause of action." (AG Capital Funding Partners, L.P. v State St. Bank &Trust Co., 5 N.Y.3d 582, 595 [2005] (citations omitted); see also Seaman v Schulte Roth & Zabel LLP, 176 A.D.3d 538, 539 [1st Dept 2019] ("absence of any attorney-client relationship bars an action for attorney malpractice.") (internal quotation marks and citations omitted)).
Defendant H&K first argues that dismissal is appropriate because there was no actual privity or a relationship that closely resembles privity. Defendant H&K asserts that it was retained for the limited purpose of assisting plaintiff in being appointed as Administrator ad litem over the company and to assist in locating records relating to ICM's capital structure. Plaintiff disputes this and has presented sufficient documentary support to make dismissal at this stage improper. For example, an engagement letter dated July 12, 2016 from defendant H&K states clearly:
"Thank you for retaining Holland &Knight LLP ("H&K") to represent you in connection with the administration of your father's estate. We will seek to have you appointed as the administrator of your father's estate and, once you are appointed, advise you in that role. We look forward to serving your needs in this matter and to establishing a mutually satisfactory relationship."
By clearly stating that H&K is representing "you" - in this case, plaintiff - the document can reasonably create the impression that H&K was first and foremost representing plaintiff's interests. A subsequent retainer agreement dated July 25, 2016 furthers this impression:
"Dear Andrew:
Thank you for retaining Holland & Knight LLP to represent you individually as a defendant in connection with the above-referenced action ...
As you know, we are also representing you in connection with the disputes involving your late father's estate. However, we see no conflicts with respect to our representation of you in these 2 capacities."
The clear statement that H&K was representing plaintiff and that no conflict existed with representing plaintiff in related litigation can also be reasonably interpreted as creating an attorneyclient relationship between H&K and plaintiff individually. In a subsequent filing dated October 28, 2016, H&K filed and signed a document representing "Andrew S. Kadah ("Andy"), individually as heir at law to decedent Hassan Bedri Kadah ("Decedent" or "Hassan") and as Court appointed Administrator Ad Litem." Finally, plaintiff points to a January 24, 2018 memo prepared by H&K which addresses "The validity of purported gifts Hassan Kadah made to his children in 1999 and 2001 of shares of International Controls &Measurements Corp." and ultimately concludes that:
"Therefore, we recommend that our client, Andrew Kadah, and his similarly-situated siblings, nieces, and nephews, not pursue this position any further, given that the legal arguments supporting a valid gift of the 1999 and 2001 shares would almost certainly fail, and given that there is no meaningful financial advantage in pursuing this position."
These documents create a question of fact as to whether H&K was representing plaintiff individually and defendant's arguments to the contrary are unpersuasive. Accordingly, defendant H&K's request to dismiss based upon the absence of an attorney-client privilege with plaintiff individually is denied. Similarly, Defendant H&K's assertions that the alleged malpractice fell outside of the expected role for defendant H&K has not been conclusively established at this time by the documents or arguments presented.
Defendant H&K next argues that dismissal is appropriate because the claims are refuted by clear documentary evidence.
"A motion.. .to dismiss a [claim] may be granted only if the documentary evidence submitted by the moving party utterly refutes the factual allegations underlying the [claim] and conclusively disposes of the [claim] as a matter of law. '[T]o be considered documentary, evidence must be unambiguous and of undisputed authenticity.. .that is, it must be essentially unassailable.'"JPMorgan Chase Bank, N.A. v Klein, 178 A.D.3d 788, 790 [2d Dept 2019] (citations omitted). Plaintiff's amended complaint asserts that defendant H&K admitted to its own error and submitted documents in support, most notably memoranda prepared by defendant H&K. Defendant argues that these memoranda do not establish what plaintiff claims and has submitted further documentation challenging plaintiff's assertions. It is unnecessary to determine whether either party has conclusively established what they are attempting to establish at this stage. In a motion to dismiss "the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory." (Breytman, 54 A.D.3d at 703-704). Plaintiff asserts that his allegations fit within the cognizable legal theory of legal malpractice:
"A cause of action to recover damages for legal malpractice requires proof of three elements: (1) that the defendant failed to exercise that degree of care, skill, and diligence commonly possessed and exercised by an ordinary member of the legal community, (2) that such negligence was the proximate cause of the actual damages sustained by the plaintiff, and (3) that, but for the defendant's negligence, the plaintiff would have been successful in the underlying action."(Cummings v Donovan, 36 A.D.3d 648, 648 [2d Dept 2007]. Defendant H&K has not "conclusively dispose[d]" of plaintiff's claim that, viewing the facts in the light most favorable to the plaintiff, defendant H&K did not exercise the degree of care, skill and diligence commonly possessed and exercised by an ordinary member of the legal community when it failed to timely challenge the probate court's conclusion that plaintiff had no shares in ICM nor the claim that, but for this negligence, plaintiff would not have suffered actual damage from the loss of his claims to the those shares (see Klein, 178 A.D.3d at 790). Accordingly, defendant H&K's motion to dismiss plaintiff's amended complaint is denied.
Defendant H&K argue that plaintiff cannot establish that the alleged negligence proximately caused the alleged damages. This is unpersuasive. An attorney's failure to file a timely claim can be the proximate cause of the loss of a claim and defendant has not established that this was beyond the scope of representation.
Defendant H&K also argues that New York is an improper forum pursuant to CPLR 327. CPLR 327 states that:
"When the court finds that in the interest of substantial justice the action should be heard in another forum, the court, on the motion of any party, may stay or dismiss the action in whole or in part on any conditions that may be just. The domicile or residence in this state of any party to the action shall not preclude the court from staying or dismissing the action."(see also Turay v Beam Bros. Trucking, Inc., 61 A.D.3d 964, 965 [2d Dept 2009] ("New York courts are not compelled to retain jurisdiction over any case which does not have a substantial nexus to New York."); Jackam v Nature's Bounty, Inc., 70 A.D.3d 1000, 10001 [2d Dept 2010] ("The common law doctrine of forum non conveniens, also articulated in CPLR 327(a), permits a court to stay or dismiss ... where it is determined that the action, although jurisdictionally sound, would be better adjudicated elsewhere.").
"In a motion to dismiss the complaint on the ground of forum non conveniens, the burden is on the defendant challenging the forum to demonstrate relevant private or public interest factors which militate against accepting the litigation in that forum. The court has discretion whether to retain jurisdiction. The court's determination will not be disturbed on appeal unless the court has failed to properly consider all of the relevant factors. Among the factors the court must weigh are 'the residency of the parties, the potential hardship to proposed witnesses, the availability of an alternative forum, the situs of the underlying action, and the burden which will be imposed upon the New York courts, with no one single factor controlling.'"(Rosenberg v Stikeman Elliott, LLP, 44 A.D.3d 840, 841 [2d Dept 2007] (citations omitted). However, "unless the balance is strongly in favor of the [moving party], the plaintiff's choice of forum should rarely be disturbed" (Swaney v Academy Bus Tours of N.Y., Inc., 158 A.D.3d 437, 438 [1st Dept 2018] (internal quotation marks and citation omitted)).
Defendant H&K argues that Florida is the appropriate venue because the legal malpractice claim arises out of a Florida probate proceeding and was decided pursuant to Florida law; H&K's lead attorneys on the case were based in Florida; H&K's case file is located in Florida; and plaintiff utilized separate counsel based in Florida. The facts presented closely mirror the facts present in Rosenberg v Stikeman Elliott, LLP wherein it was "undisputed that the plaintiff's legal malpractice and recoupment claims against the defendant all arose out of probate actions undertaken in Montreal, Canada, by Canadian attorneys, to which Canadian law would be applicable. Even if the plaintiff possesses residences or domiciles both in New York and Canada." (44 A.D.3d 840). The Second Department overturned a lower court ruling denying the defendant's motion to dismiss for forum non conveniens (id.).
Plaintiff argues that Defendant H&K is a multinational law firm with numerous offices, including the New York office that plaintiff interacted with when he first retained the firm and that the inconvenience of Florida for plaintiff, a New York resident, would render Florida the forum non conveniens. Plaintiff acknowledges that the probate court proceeding was in Florida and under Florida law but argues that the legal work performed during the period in which the malpractice was alleged to have occurred - between July 2016 and November 2016 - took place mostly in New York and submits billing documentation in support. Lastly, plaintiff argues that numerous ICM attorneys, accountant and board members who would be potential witnesses are based in New York.
After carefully weighing the relevant factors, the critical difference between this case and Rosenberg is that the plaintiff is not a resident or domiciled in Florida which sufficiently adjusts the calculus so as to necessitate a different result (id.). While the probate proceeding was in Florida, the legal work performed during the relevant period largely occurred in New York. Furthermore, it is uncontested that the relevant Florida filing deadline was missed and instead the dispute relates to the nature of the relationship between the parties created by the contractual relationship formed in New York and the performance of the obligations stemming therefrom - issues which do not require a New York court to apply or interpret Florida law to such an extent that a Florida court would be significantly better positioned to appropriately handle the matter.
Meanwhile the burden on requiring an individual plaintiff who does not have a residence or domicile in Florida to pursue this action in Florida is prejudicial and creates significant practical difficulties. Defendant H&K argues that plaintiff has already demonstrated that he can pursue litigation in Florida due to his conduct in the probate court proceeding and that plaintiff is currently pursuing litigation relating to the probate court pending in Florida, but plaintiff has no alternative than to pursue those actions in Florida. However, this action - unlike those actions - has a considerable and sufficient nexus to New York to pursue the action here and Plaintiff need not be prejudiced by an inconvenient forum where he did not elect to pursue this action simply because he had no choice but to litigate a separate action in that forum. "[U]nless the balance is strongly in favor of the [moving party], the plaintiff's choice of forum should rarely be disturbed." (Swaney, 158 A.D.3d at 438). Here, the balance is not strongly in defendant H&K's favor and plaintiff's choice of forum should not be disturbed - particularly where litigating this action in Florida would present a clear and prejudicial burden on plaintiff.
Lastly, Defendant H&K moves to dismiss plaintiff's claim for a breach of fiduciary duty as duplicative (see InKine Pharm. Co. v Coleman, 305 A.D.2d 151, 152 [1st Dept 2003] ("The breach of contract and breach of fiduciary duty claims were properly dismissed as duplicative, since they arose from the same facts as the legal malpractice claim and allege similar damages.")). Here, plaintiff has not demonstrated that the breach of fiduciary duty claim is distinct in any relevant manner from the legal malpractice claim (see, e.g., Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d 1, 7 [1st Dept 2008] ("the two claims arose from different facts - the malpractice claim from defendant's dual representation of plaintiff and Legion as claims counsel, and the breach of fiduciary duty claim from defendant's assistance to PIA...")). Accordingly, that branch of the motion to dismiss plaintiff's claim for breach of fiduciary duty is granted.
Accordingly, it is hereby ordered that defendant H&K's motion is granted solely to the extent that plaintiff's claim for breach of fiduciary duty is dismissed as duplicative and the remainder of the motion is denied in all other respects.
This constitutes the decision and order of the court.