Opinion
22-CV-4453 (VEC) (JLC)
05-24-2023
JOSEPH PAGE, Plaintiff, v. ELLENOFF GROSSMAN & SCHOLE LLP, Defendant.
Honorable Valerie E. Caproni, United States District Judge.
REPORT AND RECOMMENDATION
JAMES L. COTT United States Magistrate Judge.
Joseph Page, proceeding pro se, has brought this action against the law firm Ellenoff Grossman & Schole LLP (“EGS”), alleging negligence, legal malpractice, breach of contract, and breach of fiduciary duty. Pending before the Court is EGS's motion to dismiss the first amended complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons set forth below, the motion should be granted.
I. BACKGROUND
A. Factual Background
The following facts, drawn from the first amended complaint (“FAC”), Dkt. No. 21, and the exhibits attached to it are assumed true for purposes of this motion. See, e.g., Ebomwonyi v. Sea Shipping Line, 473 F.Supp.3d 338, 344-45 (S.D.N.Y. 2020), aff'd, 2022 WL 274507 (2d Cir. Jan. 31, 2022).
Page, a self-described “highly experienced inventor and owner of a portfolio of inventions and other intellectual property relating to commerce on blockchain technologies,” FAC ¶ 31, is a Nevada resident. Id. ¶ 1. EGS is a law firm headquartered in New York. Id. ¶ 2. Their dispute stems from a 2018 business deal turned sour-the upshot of which has given rise to three lawsuits, including this one.
It began in 2017, when Page and four Danish businessmen decided to go into business using the “blockchain eCommerce” technologies that Page had invented. Id. ¶ 8. One of the businessmen, Gert Funk (“Funk”), was Page's “friend and neighbor of many years.” Id. ¶ 10. The other three, including Henrik Rouf (“Rouf”) and Henrik Oerbekker (“Oerbekker”), owned a shell company named B4MC Gold Mines, Inc. (“B4MC”) and “held themselves out as investment bankers” at PacificWave Partners (“PacificWave”). Id. ¶ 9. Together, Page and the four men devised a plan to create an intellectual property (“IP”) holding company, merge it with B4MC, and then assign Page's five patent applications to the newly created entity. Id.
The plan was memorialized in a proposal dated January 8, 2018. See Id. ¶ 10; Proposal, Dkt. No. 21, Exhibit (“Ex.”) A. In a reverse merger (“the Merger”) set forth in the proposal, B4MC would acquire a new Nevada corporation-to be called RocketFuel Blockchain Company (“RBC”)-that Funk and Page would create with the initial capital contributions of “patents, intellectual property” and “other assets.” Id. Once the Merger was finalized, B4MC would change its name to Rocketfuel Blockchain, Inc. (“RBI”), and it would be managed by Page (the chairman) Funk (the CEO and Director), and Bennett Yankowitz (“Yankowitz”) (the CFO and Director). Id. Page and Funk would together be assigned 90% of the shares of RBC, and the remaining 10% would be assigned to an outside investor who would finance the Merger, including by paying fees to EGS. FAC ¶ 25. Postmerger, RBC shareholders “would receive 75% of B4MC shares.” Id.
The first lines below the title on the Proposal clarify that it was “intended solely as a basis for further discussion and is not intended to be a legally binding agreement and does not give rise to any legally binding obligations.”
The Court takes judicial notice that “[i]n a reverse merger transaction, an existing public ‘shell company,' which is a public reporting company with few or no operations, acquires a private operating company-usually one that is seeking access to funding in the U.S. capital markets.” SEC, Investor Bulletin, June 2011, https://www.sec.gov/investor/alerts/reversemergers.pdf. See, e.g., Gen. Star Indem. Co. v. Driven Sports, Inc., 80 F.Supp.3d 442, 446 n.1 (E.D.N.Y. 2015) (dictionary definitions judicially noticeable facts under Fed.R.Evid. 201(b)); In re Frito-Lay N. Am., Inc. All Nat. Litig., No. 12-MD-2413 (RRM) (RLM), 2013 WL 4647512, at *4 (E.D.N.Y. Aug. 29, 2013) (taking judicial notice of “agency letters, policy and guidance documents, [and] websites”).
Page and Funk signed the Proposal and sent it to PacificWave. Id. ¶ 11. Four days later, on January 12, 2018, Yankowitz and Rouf incorporated RBC as an IP holding company in Nevada. Id. ¶¶ 12, 38. Funk, Rouf, and Page “were declared” as RBC's officers. Id. ¶ 38.
On March 2, 2018, EGS sent an “engagement agreement” to Funk. Engagement Agreement, Dkt. No. 21, Ex. B at 2. In it, EGS agreed to
The pagination of exhibits attached by Page to his FAC reflects the pagination generated by ECF.
act as counsel to Rocketfuel Blockchain Company and its affiliates (collectively the “Company”) with respect to (i) the reverse merger/capital contribution of the Company into B4MC Gold Mines, Inc. (the “Merger[”]), and (ii) ongoing corporate and securities matters for the Company following the Merger.Id. With respect to the Merger, EGS agreed to, inter alia, “prepare, review, and revise all documents necessary to consummate the Merger including the term sheet” and “supervise and manage all necessary due diligence.” Id.; see also FAC ¶ 13. Funk signed the agreement on March 5, 2018. Engagement Agreement at 3.
In paragraph 13 of the FAC, Page misquotes the Engagement Agreement. As Page attached the Engagement Agreement to his FAC, it is quoted from directly instead.
In March 2018, B4MC and EGS “caused to be transmitted to Page” a document entitled “Directors, Officers And Principal Stockholders Questionnaire” (“D&O Questionnaire”), see FAC ¶¶ 64-65, which begins:
All officers, directors, nominees for officers or directors, and affiliated 5% stockholders of B4MC Gold Mines, Inc., a Nevada corporation (the “Company”), are required to complete this request for information . . . in connection with the preparation of the merger transaction documents between the Company and Rocketfuel Blockchain Company as well as any materials to be filed with the Securities and Exchange Commission (“SEC”) in relation to such transaction. ...
If you have any questions regarding how to respond to any portion of this Questionnaire, please contact our outside legal counsel, Linda Kalayjian of Ellenoff Grossman & Schole LLP.D&O Questionnaire, Dkt. No. 21, Ex. E at 1. Below the subheading “Definitions,” “Company” is defined as “B4MC Gold Mines, Inc., a Nevada corporation, [which] shall include all of its consolidated subsidiaries (unless the context otherwise indicates).” Id.
Page alleges that the D&O Questionnaire “defines the ‘Company' to include: ‘All officers, directors, nominees for officers or directors, and affiliated 5% stockholders of B4MC Gold Mines, Inc.'” FAC ¶ 64. As the D&O Questionnaire is attached to the FAC, it is quoted from directly instead.
In “preparation for the upcoming Merger,” Rouf “initiated [a] patent due diligence effort on March 26, 2018.” FAC ¶ 49. He sent an email with “proposed patent application assignment documents” to EGS attorneys, who asked EGS senior patent attorney John Stellabotte “to review” them. FAC ¶¶ 49-50. Stellabotte then sent “a follow-up email” to Page, “correctly” informing him that “none of [the patent] applications [were] publicly available” on the U.S. Patent and Trade Office (“USPTO”) website and asking him to “provide the ‘entire file histories' for each of the five subject applications.” Id. ¶ 51. Stellabotte “pointed out defects in the proposed assignments and recommended changes that necessitated replacement documents be prepared under [his] guidance.” Id. ¶ 52. Page then “prepared and executed assignment documents on March 28, 2018, thereby transferring ownership of the patent applications to RBC.” Id. ¶ 53.
Page filed the patent “assignments in the USPTO on April 10, 2018.” Id. ¶ 54. In response to Stellabotte's “request for the entire file histories, Page informed him that the requested file histories were being prepared and would be available soon.” Id. ¶ 55. Page then downloaded the “complete” image file wrappers (“IFWs”) from the USPTO and sent them to Stellabotte in PDF format. Id. ¶¶ 56 57. “Unbeknownst to Page,” EGS did not share the IFWs or due diligence reports with B4MC. Id. ¶¶ 18-19.
EGS prepared a Contribution Agreement, dated June 27, 2018, which “was executed by all parties to formally bring about the Merger.” Id. ¶ 45; see also Contribution Agreement, Dkt. No. 21, Ex. C. On July 2, 2018, Page signed a power of attorney agreement identifying himself as the “Chief Technical Officer of B4MC Gold Mines, Inc.” and granting an EGS partner power of attorney “for the purpose[s] of” accessing his application on the USPTO website and “taking any other action in connection with the foregoing which, in the opinion of such attorneyin-fact, may be of benefit to, in the best interest of, or legally required by [Page].” Power of Attorney Agreement, Dkt. No. 27, Ex. B. “Soon thereafter, B4MC changed its name to” RBI. FAC ¶ 15.
Page attached the Power of Attorney Agreement to his Opposition Memorandum. The Court may consider allegations that appear in a pro se plaintiff's opposition papers. See, e.g., Freud v. N.Y.C. Dep't of Educ., No. 21-CV-2281 (MKV), 2022 WL 889213, at *4 (S.D.N.Y. Mar. 25, 2022) (courts “may also consider factual statements made in the pro se Plaintiff's opposition to the motion to dismiss”) (citing Walker v. Schult, 717 F.3d 119, 122 n.1 (2d Cir. 2013)); Henning v. N.Y.C. Dep't of Corr., No. 14-CV-9798 (JPO), 2016 WL 297725, at *3 (S.D.N.Y. Jan. 22, 2016) (“Although this allegation appears in his opposition papers, the Court--consistent with its duty to liberally construe pro se pleadings--will credit Plaintiff's assertion in evaluating the sufficiency of his complaint.”).
Almost one year later, “[o]n May 29, 2019[,] after failure to capitalize the company as expected, among other things, Page resigned and quit the failed project.” Id. ¶ 46. Sometime after Page left, RBC “allegedly learned that the patent applications he had assigned to [it] were legally deficient.” RocketFuel Blockchain Co. v. Ellenoff Grossman & Schole LLP, No. 21-CV-1764 (VEC), 2022 WL 80482, at *1 (S.D.N.Y. Jan. 7, 2022). On or about August 19, 2020, EGS “transmitted the IFWs to RBI for the first time . . . with: 1) admission of the error; 2) an explanation as to how the error occurred; and 3) an apology for committing the error.” FAC ¶ 22.
The Court takes judicial notice of the allegations that were the basis for a prior suit in a related action filed in this Court. See, e.g., Cnty. Vanlines Inc. v. Experian Info. Sols., Inc., 205 F.R.D. 148, 152 (S.D.N.Y. 2002) (“A court may also consider matters of which judicial notice may be taken under Fed.R.Evid. 201, including the decisions of other courts.”).
In October 2020, RBC and RBI sued Page in the Central District of California, bringing a slew of claims based on Page's alleged misrepresentations of the status of his patent applications. See Dkt. No. 21, Ex. D. RBC and RBI brought a second action against EGS in this District, alleging legal malpractice, breach of contract, and breach of fiduciary duty. See RocketFuel Blockchain Co. v. Ellenoff Grossman & Schole LLP, No. 21-CV-1764 (VEC).
The suit was transferred to the District of Nevada. See Rocketfuel Blockchain, Inc. et al v. Joseph Page et al, No. 20-CV-9270 (FLA) (AFM) (C.D. Cal.) at Dkt. No. 24; Rocketfuel Blockchain, Inc. and Rocketfuel Blockchain Company v. Joseph Page, No. 21-CV-103 (D. Nev.).
In this third action, Page brings his own legal malpractice claim and other related claims against EGS, alleging that in addition to causing him harm by failing to share the status of his patent applications with RBC and RBI, it “participated, likely knowingly, in various schemes to improperly assign 22.5% of B4MC shares to companies controlled by Rouf and his partners” instead of Page, Id. ¶ 24, for instance by drafting “numerics used in the Merger agreement . . . purely . . . in percentages and share totals for groups of parties,” Id. ¶ 27, to conceal and obfuscate Rouf's theft of 22.5% B4MC shares (11.25% from each Page and Funk).” Id. ¶ 26. Page further alleges that the Proposal “secretly included 15% allocations to each of two companies controlled by Rouf and Oerbekker,” which should have been assigned to Page and Funk. Id. ¶ 40 (emphasis in original).
Page alleges that he did not learn of EGS's “late and negligent handling of the IFWs” until RBC and RBI sued EGS. FAC ¶ 23. He maintains that until 2021, he “mistakenly believed” that EGS “had indeed provided a due diligence report including the IFWs to B4MC,” Id. ¶ 19, and that he “relied upon his attorneys at [EGS] to understand and prepare all necessary materials and disclosures that would be required to bring about the Merger properly.” Id. ¶ 20.
B. Procedural History
Page brought this action pro se on May 27, 2022. See Dkt. No. 1. On June 17, 2022, the case was referred to me for general pretrial supervision and any dispositive motions requiring a report and recommendation. Dkt. No. 3. On September 15, 2022, EGS moved to dismiss the complaint, Dkt. No. 20, and filed an accompanying memorandum of law. Dkt. No. 20-4. On October 6, Page filed the FAC, Dkt. No. 21, alleging causes of action for negligence, ¶¶ 94-105, legal malpractice, ¶¶ 106-12, breach of contract, ¶¶ 113-25, and breach of fiduciary duty. ¶¶ 126-34. EGS sought leave to file a renewed motion to dismiss the amended complaint on October 19, which was granted. Dkt. Nos. 22-23. On the following day, EGS moved to dismiss the FAC pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and filed a memorandum of law (“Def. Mem.”) and declaration of Philip Touitou with accompanying attachments. Dkt. Nos. 24-26. Page filed an opposition memorandum (“Pl. Mem.”) on November 7, 2022, Dkt. No. 27, and EGS filed a reply (“Def. Reply”) on November 17. Dkt. No. 30.
The motion to dismiss the original complaint, Dkt. No. 20, remains open on the docket.
Page's opposition memorandum appears at docket entry number 27 as a “Letter,” as he filed it one day late with an accompanying request for a one-day filing extension, which was granted. See Dkt. No. 29.
II. DISCUSSION
A. Legal Standards
1. Motion to Dismiss for Failure to State a Claim
In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See, e.g., Menaker v. Hofstra Univ., 935 F.3d 20, 30 (2d Cir. 2019). To survive a Rule 12(b)(6) motion, the plaintiff must plead sufficient facts “to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). A complaint that offers only “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.
As a threshold matter, EGS argues that Page “has no standing to assert a legal malpractice claim against EGS because he was never EGS'[s] client.” Def. Mem. at 8. Although “[a]n objection to standing is properly made on a Rule 12(b)(1) motion,” Tasini v. New York Times Co., 184 F.Supp.2d 350, 354-55 (S.D.N.Y. 2002), here, the argument that EGS characterizes as a lack of “standing” is essentially the same as the issue presented by the first element required for a legal malpractice claim, as is discussed, infra i.e., whether there was an attorney-client relationship. Therefore, for purposes of EGS's motion, the Court will not otherwise consider any application of Rule 12(b)(1) given that EGS moved to dismiss solely on 12(b)(6) grounds.
2. Standards for Pro Se Plaintiffs
“Pro se plaintiff filings are liberally construed, and a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.” Franklin v. X Gear 101, LLC, No. 17-CV-6452 (GBD) (GWG), 2018 WL 3528731, at *4 (S.D.N.Y. July 23, 2018) (cleaned up), adopted by 2018 WL 4103492 (Aug. 28, 2018); see also Hill v. Curcione, 657 F.3d 116, 122 (2d Cir. 2011) (review of pro se complaint for sufficiency requires “special solicitude, interpreting complaint to raise strongest claims that it suggests.” (cleaned up)). “However, even the pleadings of pro se plaintiffs ‘must contain factual allegations sufficient to raise a right to relief above the speculative level.'” Franklin, 2018 WL 3528731, at *4 (quoting Dawkins v. Gonyea, 646 F.Supp.2d 594, 603 (S.D.N.Y. 2009)); see also Chavis v. Chappius, 618 F.3d 162, 170 (2d Cir. 2010) (“Even in a pro se case . . . threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” (citation omitted)).
B. Analysis
Page argues that EGS breached a duty owed to him by failing to disclose files related to his patent application to RBC and RBI and by short-changing him in the Merger agreement. With respect to the legal malpractice claim, EGS contends that it owed no duty to Page in the first place, and that even if it did, his claim is time-barred. It adds that Page's other claims are duplicative and thus equally lacking in merit.
1. Because Page Was Never EGS's Client, His Attorney Malpractice Claim Is Not Cognizable
“In a diversity action based on attorney malpractice, state substantive law- here, that of New York-applies.” Makhoul v. Watt, Tieder, Hoffar & Fitzgerald, LLP, No. 11-CV-5108 (PKC), 2015 WL 5158477, at *3 (E.D.N.Y. Sept. 2, 2015) (quoting Rubens v. Mason, 527 F.3d 252, 254 (2d Cir. 2008), aff'd, 662 Fed.Appx. 33 (2d Cir. 2016). “In order to sustain a legal malpractice claim, a plaintiff must show: (1) the existence of an attorney-client relationship; (2) negligence; (3) proximate cause; and (4) actual damages.” Id. (citation omitted). In this case, Page fails to state an attorney malpractice claim because he had no attorney-client relationship with EGS.
Where the “parties' briefs assume that New York law controls[,] . . . such implied consent is sufficient to establish choice of law.” MIG, Inc. v. Paul, Weiss, Rifkind, Wharton & Garrison, L.L.P., 701 F.Supp.2d 518, 532 (S.D.N.Y. 2010) (quoting Motorola Credit Corp. v. Uzan, 388 F.3d 39, 61 (2d Cir. 2004)), aff'd, 410 Fed.Appx. 408 (2d Cir. 2011); see also Wolfson v. Bruno, 844 F.Supp.2d 348, 354 (S.D.N.Y. 2011) (same for case with pro se litigants). Here, EGS cites to New York cases in support of its position, and Page does not suggest that some law other than New York applies. See, e.g., Def. Mem. at 12.
Under New York contract law, “an attorney's representation of a corporation does not make that attorney counsel to the corporate officers and directors as individuals,” Correspondent Servs. Corp. v. J.V.W. Inv. Ltd., No. 99-CV-8934 (RWS), 2000 WL 1174980, at *13 (S.D.N.Y. Aug. 18, 2000), “[u]nless the parties have expressly agreed otherwise.” Talvy v. Am. Red Cross in Greater New York, 618 N.Y.S.2d 25, 29 (1st Dep't 1994), aff'd, 87 N.Y.2d 826 (N.Y. 1995). For instance, “plaintiffs[] who are not identified as clients in the written retainer agreement and did not sign the retainer in an individual capacity, fail[] to establish the existence of an attorney-client relationship.” Leggiadro, Ltd. v. Winston & Strawn, LLP, 119 A.D.3d 442, 442 (1st Dep't 2014).
In RocketFuel Blockchain Co. v. Ellenoff Grossman & Schole LLP, this Court previously determined that RBC was EGS's client, but RBI was not because “[a] company on the other side of a merger transaction has no attorney-client relationship with the other company's attorneys.” 2022 WL 80482, at *5. Although the Engagement Agreement, D&O Questionnaire, and Power of Attorney Agreement identify him as an officer of RBI, Page also alleges that he was an officer of RBC, see FAC ¶ 38, which the Court assumes to be true for purposes of this motion.
In the Engagement Agreement signed by EGS and Funk, EGS agreed to “act as counsel to Rocketfuel Blockchain Company and its affiliates (collectively the “Company”).” Engagement Agreement at 2. Although Page was not identified as a client nor did he sign the Engagement Agreement, he asserts that, as an officer of RBC, he was an “affiliate.” Pl. Mem. at 5-7; FAC ¶ 115. In his opposition papers, he provides the SEC glossary and Thompson Reuters Law Dictionary definitions of the word “affiliate,” which both include “person.” Pl. Mem. at 7.
Because the Engagement Agreement does not define affiliate, the Court “looks to the plain or ordinary meaning of the term.” Nat'l Union Fire Ins. Co. of Pittsburg v. Beelman Truck Co., 203 F.Supp.3d 312, 319 (S.D.N.Y. 2016). Black's Law Dictionary provides two definitions, neither of which include “person”: (1) “A corporation that is related to another corporation by shareholdings or other means of control; a subsidiary, parent, or sibling corporation;” (2) in the context of securities, “[o]ne who controls, is controlled by, or is under common control with the issuer of a security.” Black's Law Dictionary (10th ed. 2014); see Rothstein v. Am. Int'l Grp., Inc., 837 F.3d 195, 206 (2d Cir. 2016) (quoting same); Nat'l Union Fire, 203 F.Supp.3d at 319 (same); see also Giambrone v. Meritplan Ins. Co., 117 F.Supp.3d 259, 269 (E.D.N.Y. 2015) (A “lawyer who represents a corporation or other organization does not, by virtue of that representation, necessarily represent any constituent or affiliated organization, such as a parent or subsidiary.” (emphasis added) (citation omitted)); 15 U.S.C. § 6809(6) (“The term ‘affiliate' means any company that controls, is controlled by, or is under common control with another company.”). Moreover, if “Rocketfuel Blockchain Company and its affiliates” was intended to include any individuals, it would not have been abbreviated as “(collectively the “Company”).” Engagement Agreement at 2.
Page's argument that the language in the D&O Questionnaire document- “please contact our outside legal counsel”-implies that EGS represented the officers and directors likewise fails. In fact, it implies the opposite-that EGS was attempting to obtain information pursuant to its representation of the company.
Nor does the Power of Attorney agreement establish an attorney-client relationship, as it did nothing more than authorize EGS to access Page's patent applications on the USPTO's website, which was part of the due diligence effort that it was conducting on behalf of RBC. See, e.g., In re State St. Assocs., L.P., 323 B.R. 544, 556 (Bankr. N.D.N.Y. 2005) (“A [power of attorney] does not necessarily create an attorney-client relationship[.]”). Nor does the January 8, 2018 Proposal, by its own terms, “give rise to any legally binding obligations.” Proposal at 2. Moreover, “the absence of a fee arrangement is a general indication that no attorney-client relationship has been established,” Heine v. Colton, Hartnick, Yamin & Sheresky, 786 F.Supp. 360, 366 (S.D.N.Y. 1992), and Page has not alleged that he had any fee agreement with EGS.
In some circumstances, liability may be “extended to third parties, not in privity, for harm caused by professional negligence in the presence of fraud, collusion, malicious acts or other special circumstances.” Bayit Care Corp. v. Einbinder, No. 157134/2012, 2013 WL 5339967, at *4 (N.Y. Sup. 2013) (quoting Good Old Days Tavern, Inc. v. Zwirn, 686 N.Y.S.2d 414, 414 (1st Dep't 1999)). To determine whether this is one of those circumstances, the Court “look[s] to the words and actions of the parties to ascertain if an attorney-client relationship was formed.” C.K. Indus. Corp. v. C.M. Indus. Corp., 213 A.D.2d 846, 848 (3d Dep't 1995).
In Gregor v. Rossi, for example, investor-shareholders of a corporation “that was allegedly part of [a] fraudulent scheme” sued the attorneys retained by the corporation, alleging they were “complicit in the scheme by drafting documents and a shareholder agreement designed to give plaintiffs the impression that the corporation was legitimate and by dealing directly with plaintiffs in reviewing the documents and giving them accompanying legal advice and counsel.” 120 A.D.3d 447, 447 (1st Dep't 2014) (quotation omitted). That was found to be insufficient to allege “the requisite fiduciary or special relationship between plaintiffs and defendants.” Id. at 447-48.
Similarly, Page's allegations do not give rise to any suggestion that EGS attorneys held themselves out to be representing him. Per the Engagement Agreement, EGS agreed to “prepare, review, and revise all documents necessary to consummate the Merger” and “supervise and manage all necessary due diligence.” Engagement Agreement at 2. Accordingly, EGS required “[a]ll officers, directors, nominees for officers or directors, and affiliated 5% stockholders. . . to complete” the D&O Questionnaire “in connection with the preparation of the merger.” D&O Questionnaire at 2. None of the interactions with EGS attorneys that Page describes in the FAC-wherein he “cooperated with [EGS] and provided all information and materials requested by them to facilitate and perfect the anticipated merger” FAC ¶ 14-suggests more than assisting in the “necessary due diligence” on behalf of the company. See, e.g., Talvy, 205 A.D.2d at 149 (no attorney-client relationship between employee and employer's counsel where “communications . . . took place in the context of that representation”). Page's “subjective belief did not create an attorney-client relationship or a close relationship approaching privity that imposed upon [EGS] a duty.” Gregor, 120 A.D.3d at 448.
EGS argues that this Court “already determined” that Page was not its client. Def. Mem. at 9. But it reads the Court's earlier decision too broadly. In the prior case, the Court was not presented with the question of whether Page had an attorney-client relationship with EGS, and decided only that RBC and not RBI was EGS's client. See Rocketfuel Blockchain Co., 2022 WL 80482 at *5 (“RBI does not have standing to assert a legal malpractice claim arising from EGS's pre-merger due diligence.”).
In sum, without an attorney-client relationship, Page cannot assert a cognizable attorney malpractice claim. It should accordingly be dismissed.
2. Page's Negligence, Breach of Contract, and Breach of Fiduciary Duty Claims are Duplicative
“New York law requires dismissal of claims that are ‘premised on the same facts' and that ‘seek relief identical to that sought in a legal malpractice cause of action' because they are ‘redundant.'” RocketFuel, 2022 WL 80482, at *7 (quoting MIG, 701 F.Supp.2d at 532). Page's claims for negligence, breach of contract, and breach of fiduciary duty are all based on “exactly the same [alleged] conduct” as his legal malpractice claim-namely that EGS failed to disclose information about Page's patents to RBC and RBI in preparation for the Merger and assigned him a smaller percentage allocation of RBC in the Merger agreement than he believed he was owed. See FAC ¶¶ 95-98, 107-10, 115-19, 130-31; see also RocketFuel, 2022 WL 80482, at *7 (“Even alleging in passing that EGS's actions may have been ‘intentional' does not distinguish the breach of fiduciary duty claim from the legal malpractice claim.” (citation omitted)). These claims should therefore be dismissed as duplicative.
In his memorandum of law, Page addresses this argument only by stating in conclusory fashion that EGS was his “fiduciary” if not his counsel. See Pl. Mem. at 13-14. By failing to address EGS's argument that his negligence, breach of contract, and breach of fiduciary duty claims were duplicative, Page has effectively abandoned them, as EGS observes. See Def. Reply at 2; see also, e.g., Guity v. Uniondale Union Free Sch. Dist., No. 15-CV-5693 (SJF) (AKT), 2017 WL 11613156, at *3 (E.D.N.Y. July 27, 2017) (claim of pro se plaintiff deemed abandoned where not addressed in memorandum of law) (citing cases).
3. Page's Claims are Time-Barred
Even if Page could establish an attorney-client relationship, all of his claims would be time-barred. “The statute of limitations for a cause of action to recover damages for legal malpractice is three years, which accrues at the time the malpractice is committed,” Tulino v. Hiller, P.C., 164 N.Y.S.3d 157, 161 (2d Dep't 2022) (cleaned up), “not when the client discovered it.” Shumsky v. Eisenstein, 96 N.Y.2d 164, 166 (N.Y. 2001). Page's complaint was filed on May 27, 2022.
The same three-year statute of limitations applies to Page's duplicative negligence, breach of contract, and breach of fiduciary duty claims. See Dozier v. Willkie Farr & Gallagher LLP, No. 09-CV-9865 (LMM), 2011 WL 1886397, at *2 (S.D.N.Y. May 10, 2011) (“[T]he three-year statute of limitations . . . governs actions to recover damages for professional malpractice (with certain exceptions not relevant here) ‘regardless of whether the underlying theory is based in contract or tort.'” (quoting 6645 Owners Corp. v. GMO Realty Corp., 762 N.Y.S.2d 60, 61 (1st Dep't 2003)).
Page's allegations solely concern actions leading up to the Merger. He alleges that EGS engaged in “negligent mishandling of the IFWs,” “failed to convey the IFWs they had in their possession more than two months before the Merger,” FAC ¶ 23, “failed to faithfully draw the Merger agreement to the terms proposed,” “improperly assign[ed] 22.5% of B4MC shares to companies controlled by [Rouf] and his partners,” id. ¶ 24, and “purposefully omitted any direct accounting of shares allocations or capitalization tables showing parties receiving shares and the amounts thereof.” Id. ¶ 30. The Merger was finalized on June 27, 2018. Id. ¶ 45; see also Contribution Agreement at 2. Thus, given that Page filed this action almost four years later, any malpractice and related claims are time-barred.
EGS and RBC's agreement to a “Monthly Retainer [to] begin upon the closing of the merger,” see Engagement Agreement at 2, would not trigger the doctrine of continuous representation, which is “only applicable where the continuous representation pertains specifically to the matter in which the attorney committed the alleged malpractice.” MIG, 701 F.Supp.2d at 525 (cleaned up). As explained above, Page's allegations solely concern EGS's actions relating to the formation of the Merger, which was finalized in 2018. He does not allege that malpractice continued after that date.
4. The FAC Should be Dismissed with Prejudice
District courts “should not dismiss [pro se complaints] without granting leave to amend at least once when a liberal reading of the complaint gives any indication that a valid claim might be stated.” Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000) (quoting Gomez v. USAA Fed. Sav. Bank, 171 F.3d 794, 795 (2d Cir. 1999)). Here, Page has already had the opportunity to amend, and no reading of the FAC gives any such indication, as there was no attorney-client relationship and any legal malpractice (or related) claim would be time-barred. Thus, a “revised claim still ‘could not withstand a motion to dismiss,'” and the suit should be dismissed with prejudice. Brady v. IGS Realty Co. L.P., No. 19-CV-10142 (PAE), 2020 WL 5414683, at *12 (S.D.N.Y. Sept. 8, 2020) (quoting Dougherty v. Town of N. Hempstead Bd. Of Zoning Appeals, 282 F.3d 83, 88 (2d Cir. 2002)), aff'd, 2021 WL 4302737 (2d Cir. Sept. 22, 2021); see also Cuoco, 222 F.3d at 112 (where “problem with . . . causes of action is substantive” and “better pleading will not cure it[,] . . . [r]epleading would . . . be futile”).
III. CONCLUSION
For the foregoing reasons, EGS's motion to dismiss the first amended complaint, with prejudice, should be granted.
PROCEDURE FOR FILING OBJECTIONS
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file any objections. See Fed.R.Civ.P. 6(a), (b), (d). A party may respond to any objections within fourteen (14) days after being served. Such objections, and any responses to objections, shall be filed with the Clerk of Court, with courtesy copies delivered to the chambers of the Honorable Valerie E. Caproni, United States Courthouse, 40 Foley Square, New York, New York 10007. Any requests for an extension of time for filing objections must be directed to Judge Caproni.
FAILURE TO FILE OBJECTIONS WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72. See Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).