Opinion
Index No. 714212/17 Seq. No. 3
09-26-2019
PARDALIS & NOHAVICKA, LLP, Plaintiff, v. ETHAN GERBER, GERBER & GERBER, PLLC as predecessors-in-interest, and ABRAMS, FENSTERMAN, EISMAN, FORMATO, FERRARA, WOLF & CARONE, LLP, ABRAMS FENSTERMAN ENTERPRISES, LLC, and ABRAMS, FENSTERMAN, FENSTERMAN, EISMAN, FORMATO, FERRARA, WOLF & CARONE, LLP, as successors in interest, Defendants.
Unpublished Opinion
Motion Date:7/9/19
Present: Honorable Leonard Livote Acting Supreme Court Justice
Leonard Livote, A.J.S.C.
The following papers numbered 1 to 10 read on this motion by defendants for an Order granting summary judgement.
PAPERS NUMBERED
Notice of Motion, Affirmation, Affidavits and Exhibits.............................. 1-4
Cross Motion, Affirmation, Affidavits and Exhibits..............................
Answering Affirmations, Affidavits and Exhibits.................................. 5-7
Reply Affirmations, Affidavits and Exhibits.................................. 8-10
Other.....................................
Upon the foregoing papers, the motion is granted in part and denied in part.
Defendant Gerber & Gerber was previously a law firm that specialized in representing taxi cab entities in the self-insured market. Pursuant to the program, each month Gerber & Gerber would be paid a nominal fee by the vehicles in each of the taxi cab entities in the program, regardless of how many lawsuits were filed against the vehicle. The entities which owned these vehicles were responsible for any litigation expenses, including payment to outside counsel. Generally, outside counsel would conduct depositions and make court appearances.
Gerber & Gerber would refer the work to outside counsel. Outside counsel would then submit an invoice to Gerber & Gerber for services rendered. Gerber & Gerber would review the bill to ensure reasonableness of the fee, and forward same to the taxi cab entity. The taxi cab entity would thereupon issue a check to the outside counsel, and forward same to Gerber & Gerber. Gerber & Gerber would then log the check into its own records, and forward it to the outside counsel. In some cases, Gerber & Gerber would pay the service provider directly from an account funded by the taxi cab entity
Plaintiff was an outside counsel participant in the self-insured program. The program ceased when its largest client declared bankruptcy, and plaintiff was stuck with unpaid bills. Plaintiff commenced this action which states claims for account stated and conversion.
Summary judgment is a drastic remedy that should only be employed when there is no doubt as to the absence of any triable issues of a material fact (Kolivas v Kirchoff, 14 A.D.3d 493 [2nd Dept 2005]) . "Issue finding, rather than issue determination is the court's function. If there is any doubt about the existence of a triable issue of fact, or a material issue of fact is arguable, summary judgment should be denied" (Celardo v Bell, 222 A.D.2d 547 [2d Dept 1995]). "In the context of a motion for summary judgment, the court is obliged to draw all reasonable inferences in favor of the non-moving party, and may not pass on issues of credibility" (Rizzo v Lincoln Diner Corp., 215 A.D.2d 546 [2d Dept 2005]).
The party moving for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, offering sufficient evidence to demonstrate the absence of a triable issue of fact (CPLR Section 3212(b); Alvarez v Prospect Hosp., 68 N.Y.2d 320 [1986]; Zuckerman v City of New York, 49 N.Y.2d 557 [1980]; Megafu v. Tower Ins. Co. of New York, 73 A.D.3d 713 [2d Dept 2010]) . However, once the moving party has satisfied this obligation, the burden then shifts; "the party opposing the motion must demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action" (Zuckerman v. City of New York, supra).
With respect to the conversion claim, defendants argue that they are not liable on the account stated claim because they were acting as agents for a disclosed principal. "An agent who acts on behalf of a disclosed principal will generally not be liable for a breach of contract" (Matter of Anderson v. PODS, Inc., 70 A.D.3d 820, 821, 896 N.Y.S.2d 88; see Savoy Record Co. v. Cardinal Export Corp., 15 N.Y.2d 1, 4, 254 N.Y.S.2d 521, 203 N.E.2d 206; Yellow Book Sales & Distrib. Co., Inc. v. Mantini, 85 A.D.3d 1019, 1021, 925-N.Y.S.2d 646; Leonard Holzer Assoc. v. Orta, 250 A.D.2d 737, 672 N.Y.S.2d 915). "A principal is considered to be 'disclosed' if, at the time of a transaction conducted by an agent, the other party to the contract had notice that the agent was acting for the principal and of the principal's identity" (Matter of Anderson v. PODS, Inc., 70 A.D.3d at 821, 896 N.Y.S.2d 88; see Restatement [Third] of Agency § 6.01). "Knowledge of the real principal is the test, and this means actual knowledge, not suspicion" (Ell Dee Clothing Co. v. Marsh, 247 N.Y. 392, 397, 160 N.E. 651; see Tarolli Lbr. Co. v. Andreassi, 59 A.D.2d 1011, 1012; Louis Gendelman Rigging & Trucking v. Koeppel, 29 A.D.2d 540). "The defense of agency in avoidance of contractual liability is an affirmative defense and the burden of establishing the disclosure of the agency relationship and the corporate existence and identity of the principal is upon he [or she] who asserts an agency relationship" (Safety Envtl., Inc. v. Barberry Rose Mgt. Co., Inc., 94 A.D.3d 969, 969, 942 N.Y.S.2d 200, quoting Courthouse Corporate Ctr. LLC v. Schulman, 74 A.D.3d 725, 727; see Ingordo v. Square Plus Operating Corp., 276 A.D.2d 528; 12 Richard A. Lord, Williston on Contracts § 35:35, at 359 [4th ed. 1990]). "An attorney who is representing a client and who incurs litigation expenses with third parties, such as printers and process servers, acts as an agent for a disclosed principal and is not personally liable for contracts made on behalf of the client unless the attorney assumed responsibility for said expenses" (Yellon v Sirlin, 27 Misc.3d 129(A) [App Term 2010]).
In the instant case, plaintiff, as a law firm, had actual knowledge of the principal who it was representing. However, defendants concede that in some instances it retained plaintiff for work outside the self-insured program. In those cases there is an issue of fact as to whether Gerber and Gerber assumed the responsibility for paying plaintiff. Furthermore, defendants have failed to establish that the invoices in question, at least one of which identifies the City of New York as the defendant, arose from the self-insured program. Accordingly, defendants have not met their initial burden of establishing that they are not responsible.
With respect to the conversion claim,a plaintiff must establish: "(1) plaintiffs possessory right or interest in the property and (2) defendant's dominion over the property or interference with it, in derogation of plaintiffs rights." Defendants have established that they do not possess any property belonging to the plaintiff. This is sufficient to meet the defendants initial burden and plaintiff fails to raise an issue of fact in opposition.
Accordingly, the motion is granted to the extent that defendants are granted summary judgment on the conversion claim and it is, Ordered, that the cause of action for conversion is dismissed.
This constitutes the Order of the Court.