Opinion
Index 158406/2020
02-01-2022
v. NANCY NEDERLANDER, LAUREN GORDON, and RENEE KAUFMAN, Defendants. Motion Seq. No. 001 NYSCEF Doc. No. 33
HON. LOUIS L. NOCK, JUSTICE.
Unpublished Opinion
MOTION DATE: 12/10/2020
DECISION + ORDER ON MOTION
HON. LOUIS L. NOCK, JUSTICE.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 32 were read on this motion to/for DISMISSAL . LOUIS L. NOCK, J.
Upon the foregoing documents, it is hereby ordered:
The motion by defendants Nancy Nederlander and Lauren Gordon to dismiss the complaint pursuant to CPLR 3211(a)(7) is granted in part, based upon the following memorandum decision.
Background
In this action to recover unpaid legal fees, plaintiff Morrison Cohen LLP ("plaintiff") asserts three causes of action: breach of contract (first cause of action), account stated (second cause of action), and quantum meruit (third cause of action). Defendants Nancy Nederlander ("Nederlander") and Lauren Gordon ("Gordon," and collectively, the "moving defendants") move to dismiss the complaint against them for failure to state a cause of action pursuant to CPLR 3211(a)(7). Defendant Renee Kaufman ("Kaufman") appeared and answered the complaint and does not join in the motion.
Plaintiff alleges that it was retained by all three defendants to provide legal services in connection with an action that defendants commenced under Article 81 of the Mental Hygiene Law to appoint a guardian for their mother, nonparty Sharon Burstyn Green (NYSCEF Doc. No. 1, ¶ 5). Pursuant to an engagement letter dated February 8, 2019, and signed by the moving defendants, plaintiff was to provide representation and counsel during the guardianship proceeding and other related matters (NYSCEF Doc. No. 23). The letter further provided that the moving defendants would pay monthly bills for plaintiff's services promptly (id.). Defendants assert that the letter does not reflect an agreement between the parties, as Kaufman did not sign it and, thus, no agreement between the parties existed (NYSCEF Doc. No. 16, ¶¶ 5-6).
As set forth in detail in the complaint, between February 2019 and September 2020, plaintiff rendered legal services on defendants' behalf, for which they invoiced Nederlander, and, from March 18, 2020, all three defendants, on a monthly basis (NYSCEF Doc No. 1, ¶¶ 8-29). Plaintiff alleges an outstanding balance owed by defendants of $113,721.56 (id., ¶ 33). Plaintiff commenced this action seeking to recover those fees by filing of a summons and complaint on October 9, 2020. Kaufman appeared and answered the complaint on November 30, 2020 (NYSECF Doc. No. 9). The moving defendants now move to dismiss the complaint against them for failure to state a cause of action.
Standard of Review
"On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction" (Leon v Martinez, 84 N.Y.2d 83, 87 [1994]). "[The court] accept[s] the facts as alleged in the complaint as true, accord[ing] plaintiffs the benefit of every possible favorable inference, and determin[ing] only whether the facts as alleged fit within any cognizable legal theory" (Id. at 87-88). Ambiguous allegations must be resolved in plaintiff's favor (JF Capital Advisors, LLC v Lightstone Group, LLC, 25 N.Y.3d 759, 764 [2015]). "The motion must be denied if from the pleadings' four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law" (511 West 232nd Owners Corp. v Jennifer Realty Co., 98 N.Y.2d 144, 152 [2002] [internal citations omitted]). "[W]here ... the allegations consist of bare legal conclusions, as well as factual claims either inherently incredible or flatly contradicted by documentary evidence, they are not entitled to such consideration" (Ullmann v Norma Kamali, Inc., 207 A.D.2d 691, 692 [1st Dept 1994]).
Discussion
Breach of Contract (First Cause of Action)
The moving defendants move to dismiss the first cause of action for breach of contract. A cause of action for breach of contract requires allegations of "the existence of a contract, the plaintiff's performance thereunder, the defendant's breach thereof, and resulting damages" (Harris v Seward Park Hous. Corp., 79 A.D.3d 425, 426 [1st Dept 2010]). Plaintiff must allege, in nonconclusory language, the essential terms of the contract and the specific provisions giving rise to defendant's liability (Sud v Sud, 211 A.D.2d 423 [1st Dept 1995]).
Plaintiff adequately alleges a contract between the parties, specifically the engagement letter; that plaintiff rendered legal services pursuant to the letter; and that defendants have failed to pay for said services (NYSCEF Doc No. 1, ¶¶ 5-29; NYSCEF Doc No. 23). The moving defendants argue that they did not come to an agreement with plaintiff for the provision of legal services, written or otherwise, because any agreement had to include all three defendants; and further, that plaintiff agreed to seek reimbursement via a fee application made in the guardianship proceeding, and that Nederlander had not agreed to accept invoices on Gordon's behalf, showing the lack of an enforceable written agreement in violation of 22 NYCRR 1215.1. The moving defendants' arguments raise a factual challenge to the allegations of the complaint, which cannot be resolved on a motion to dismiss made pursuant to CPLR 3211 (e.g. Williams v Citigroup, Inc., 104 A.D.3d 521, 522 [1st Dept 2013]). While the moving defendants may later establish that they should not be bound by the terms of the engagement letter, which the court notes, bears their signatures, their argument does not establish that plaintiff lacks a cause of action at this stage. Seth Rubenstein, P.C. v Ganea (41 A.D.3d 54 [2d Dept 2007]), cited by the moving defendants, is inapposite, as that motion was for summary judgment.
Account Stated (Second Cause of Action)
Plaintiff's second cause of action is for an account stated. An account stated claim requires proof that the parties came together and agreed on how much the defendant owes the plaintiff, allowing plaintiff to maintain an action for that amount (Herrick, Feinstein LLP v. Stamm, 297 A.D.2d 477, 478 [1st Dept 2002]). If the defendant receives a bill or invoice from the plaintiff and does not object in a sufficient amount of time, that can be grounds for an account stated claim (Russo v Heller, 80 A.D.3d 531, 532 [1st Dept 2011]).
Here, plaintiff adequately alleges that it regularly billed Nederlander, and that those bills were retained without objection (NYSCEF Doc. No. 1, ¶¶ 8-29). Nederlander's arguments to the contrary again raise factual issues that cannot be resolved on the instant motion (Williams, 104 A.D.3d at 522). With respect to Gordon, however, plaintiff has not adequately alleged a cause of action as to fees allegedly incurred prior to receiving invoices in March 2020. Plaintiff, while arguing that Nederlander was merely accepting the invoices on behalf of all three defendants, concedes that it only sent invoices to Gordon beginning on March 18, 2020 (NYSCEF Doc. No. 1, ¶ 23). In order to state a claim for an account stated, the bills or invoices must be directed to and received by the party to be charged (Morrison Cohen Singer & Weinstein, LLP v Brophy, 19 A.D.3d 161, 161-62 [1st Dept 2005]). Moreover, the invoices for services rendered prior to March 18, 2020, were not sent contemporaneously to Gordon, preventing her from timely objecting and violating the terms of the engagement letter relied on by plaintiff (id. at 162 ["It is of particular note that several of the invoices appear to have been dated years after services were rendered, a clear violation of the billing procedure described in the retainer agreement given as evidence of notification and consent"]). Thus, plaintiff has only stated a cause of action against Gordon for an account stated with respect to the $346.87 in fees reflected in invoices received after March 18, 2020 (NYSCEF Doc. No. 1, ¶¶ 25-29), and that cause of action is otherwise dismissed against her.
Quantum Meruit (Third Cause of Action)
Finally, though plaintiff does not expressly state this, its third cause of action sounds in quantum meruit. Plaintiff must show performance of services in good faith, acceptance of services by the person to whom they are rendered, expectation of compensation, and the reasonable value of the services rendered (Fulbright & Jaworski, LLP v Carucci, 63 A.D.3d 487 [1st Dept 2009]). Contrary to the moving defendants' argument, plaintiff may plead such a claim alternative to its claim for breach of contract (Loheac v Children's Corner Learning Ctr., 51 A.D.3d 476 [1st Dept 2008]).
Plaintiff sets forth that it rendered legal services to defendants, that defendants accepted such services, the plaintiff expected payment therefor, and that the value of those services is $153,721.56, less $40,000 already paid by defendants (NYSCEF Doc. No. 1, ¶¶ 8-29, 40-43). The moving defendants' argument that this claim is not definitely stated enough to discern a legally cognizable cause of action is simply unavailing.
22 NYCRR 137
Finally, the moving defendants allege that plaintiff failed to give them notice of their right to fee arbitration as set forth in Part 137 of the Rules of the Chief Administrative Judge (22 NYCRR 137, et seq.), necessitating dismissal of the complaint. The rules of the Fee Dispute Resolution Program provide that it is limited to, inter alia, amounts in dispute between $1,000 and $50,000 (22 NYCRR 137.1[b][2]). Plaintiff alleges that the amount in dispute between the parties is $113,721.56, and accordingly, this dispute is not eligible for arbitration. The moving defendants claim that they are each only eligible for 1/3 of the total claimed by plaintiff, yet the general rule under New York law is that when multiple parties enter into an agreement to pay a sum, they are jointly liable for that sum (Perez v Masonry Services, Inc., 189 A.D.3d 703 [1st Dept 2020] [imposing joint and several liability on all defendants when all defendants were alleged to have breached the contract together]). Towl v Estate of Block (145 Misc.3d 433 [Sup Ct, Erie County 1989]), relied on by the moving defendants, is unavailing, as the definition of the word "equally" as part of a will provision does not provide sufficient indication that the parties intended for defendants to be only severally liable. Moreover, the provisions of the engagement letter do not provide for several liability.
Accordingly, it is hereby
ORDERED that the motion to dismiss is granted in part and the second cause of action of the complaint is dismissed with respect to defendant Lauren Gordon as previously set forth herein; and it is further
ORDERED that defendants Nancy Nederlander and Lauren Gordon are 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 Microsoft Teams on March 2, 2022, at 10:00 AM.
This constitutes the Decision and Order of the court.