Opinion
Index No.: 30031/2012
12-29-2014
Louis S. Tassan, Plaintiff, v. Pugatch & Nikolis, Leonard J. Pugatch and Philip P. Nikolis, Defendants.
Attorney for Plaintiff: Ryan, Brennan & Donnelly LLP 131 Tulip Avenue Floral Park, NY 11001 Attorney for Defendants: Pugatch & Nikolis 220 Mineola Boulevard, Suite 4 Mineola, NY 11501
Short Form Order
PRESENT:
Motion Sequence No.: 002; MD
Motion Date: 5/14/14
Submitted: 9/10/14
Attorney for Plaintiff: Ryan, Brennan & Donnelly LLP
131 Tulip Avenue
Floral Park, NY 11001
Attorney for Defendants: Pugatch & Nikolis
220 Mineola Boulevard, Suite 4
Mineola, NY 11501
Clerk of the Court
Upon the following papers numbered 1 to 26 read upon this motion for preliminary injunction, declaratory relief and attachment: Order to Show Cause and supporting papers, 1-17; Answering Affidavits and supporting papers, 18-26; it is
ORDERED that the motion by the plaintiff brought on by order to show cause for: 1) a preliminary injunction pending the outcome of this litigation, enjoining the defendants from collecting any fee in a certain lawsuit without paying him his share, enjoining the defendants in that lawsuit from issuing any checks to themselves and directing them to deposit any settlement funds into Court, and restraining the defendants herein from disposing of any such funds collected; 2) for an order declaring that plaintiff is entitled to enforce his interest in a purported charging lien regarding that certain lawsuit and declaring that the defendants shall pay to the plaintiff his share of the fee recovered in that certain lawsuit; and 3) for an order pursuant to CPLR 6201 attaching any amount recovered by the defendants herein in said lawsuit is denied.
This is an action for money damages and an "accounting" regarding the dissolution of the partnership of the parties in 2006, and the plaintiff's alleged entitlement to a share of the legal fees recovered by the defendants thereafter. In his complaint the plaintiff alleges, among other things, that the written dissolution agreement between the parties provided that he would receive one-third of the net fees recovered in all "open personal injury matters" within ten days of the clearance of funds in the escrow account of the new partnership formed by the defendants, and that the defendants settled a specific personal injury case without paying over to him the share of the fee that he is entitled to receive. In his complaint, the plaintiff respectively sets forth seven causes of action for an accounting, breach of contract, conversion, breach of fiduciary duty, violation of Judiciary Law § 487, failure to file proper closing statements, and fraudulent concealment.
The first cause of action asks that the defendants be "compelled to account for the status of all 'open personal injury matters' of the dissolved firm." For the purposes of this determination only, the Court does not deem the pleading to require an equitable accounting procedure; rather it appears to require the defendants to reveal information regarding the status of files in which the plaintiff has an interest.
It is undisputed that the plaintiff and the defendants were equal partners in the law firm Tassan, Pugatch and Nikolis beginning in approximately 1998, that the parties entered into a written dissolution agreement dated December 5, 2006 (Agreement), and that the Agreement included a list of open personal injury matters from which each of the partners would be entitled to one-third of the net fee. It is also undisputed that the plaintiff has served a notice of lien upon the defendants in an action in which he claims a share of the legal fees entitled Shkreli v Boston Properties, Inc., Supreme Court, Bronx County, Index No. 05-17913 (Shkreli Action), and that the defendants herein paid the plaintiff his share of the fees generated for a number of years, and then decided to stop paying any further fees under the agreement.
The plaintiff now moves for an preliminary injunction and other relief. In support of the motion the plaintiff submits, among other things, the Agreement, his affidavit, and the transcript of his deposition and that of the defendant Phillip Nikolis. To be entitled to a preliminary injunction, the moving party has the burden of demonstrating (1) a likelihood of success on the merits, (2) irreparable injury absent granting the preliminary injunction, and (3) a balancing of the equities in the movant's favor (see CPLR 6301; Aetna Ins. Co. v Capasso , 75 NY2d 860, 552 NYS2d 918 [1990]; Dixon v Malouf , 61 AD3d 630, 875 NYS2d 918 [2d Dept 2009]; Coinmach Corp. v Alley Pond Owners Corp ., 25 AD3d 642, 808 NYS2d 418 [2d Dept 2006]). The purpose of a preliminary injunction is to maintain the status quo and prevent the dissipation of property that could render a judgment ineffectual (see Dixon v Malouf, supra; Ruiz v Meloney , 26 AD3d 485, 810 NYS2d 216 [2d Dept 2006]). The decision to grant or deny a preliminary injunction rests in the sound discretion of the Court (see Dixon v Malouf, supra; Ruiz v Meloney, supra). Further, preliminary injunctive relief is a drastic remedy that will not be granted unless the movant establishes a clear right to such relief which is plain from the undisputed facts ( Blueberries Gourmet v Aris Realty Corp ., 255 AD2d 348, 680 NYS2d 557 [2d Dept 1998]; see Hoeffner v John F. Frank , Inc ., 302 AD2d 428, 756 NYS2d 63 [2d Dept 2000]).
Here, the plaintiff has not sufficiently demonstrated his entitlement to injunctive relief pending the determination of the action by showing a likelihood of success on the merits, irreparable injury in the absence of a preliminary injunction, and a balance of the equities in his favor (see CPLR 6301). A review of the record indicates that the plaintiff has not shown a likelihood of success on the merits. The Court does not address the merits of the competing claims made by the parties but, instead, notes that there is sufficient competing evidence to call into question the plaintiff's ability to succeed on the merits of his claims. The parties have submitted conflicting documentary evidence as well as conflicting testimony regarding whether the Agreement was voluntarily entered into by the parties, and which party, if any, breached their fiduciary duty to the other first. Given the sharply disputed issues of fact, the plaintiff has failed to establish a clear right to preliminary injunctive relief (see Cooper v Board of White Sands Condominium , 89 AD3d 669, 931 NYS2d 696 [2d Dept 2011]; Matter of Advanced Digital Sec. Solutions , Inc. v Samsung Techwin Co ., Ltd ., 53 AD3d 612, 862 NYS2d 551 [2d Dept 2008]).
In addition, the record does not reveal irreparable harm in the absence of a preliminary injunction. A preliminary injunction is inappropriate where the movant has failed to demonstrate that an award of money damages will not make it whole (see Somers Assoc. v Corvino , 156 AD2d 218, 548 NYS2d 480 [1989]) or where its pleadings requests only an award of damages (see Credit Agricole Indosuez v Rossiyskiy Kredit Bank , 94 NY2d 541, 545-46,708 NYS2d 26 [2000]; Matter of Gebman v Pataki , 256 AD2d 854, 855, 681 NYS2d 701 [3d Dept 1998]). Significantly, the plaintiff, who did not assert a claim for injunctive relief in his complaint, failed to demonstrate that any harm he would suffer would not be compensable by money damages (see Lombard v Station Sq. Inn Apts. Corp ., 94 AD3d 717, 942 NYS2d 116 [2d Dept 2012]; Trump on the Ocean , LLC v Ash , 81 AD3d 713, 916NYS2d 177 [2d Dept 2011 ]; Mar v Liquid Mgt. Partners , LLC , 62 AD3d 762, 880 NYS2d 647 [2d Dept 2009]). The plaintiff has not established that he does not have an adequate remedy at law to recover any alleged damages due to the failure of the defendants to pay the subject legal fees should he be successful in his action against the defendants.
To the extent that plaintiff seeks declarations that he is entitled to enforce his interest in the aforesaid charging lien and that the defendants shall pay to the plaintiff his share of the fee recovered in the Shkreli Action, it is noted that the complaint does not include a cause of action for a declaratory judgment, and it includes allegations that the defendants are liable in damages for failing to pay the plaintiff regarding a number of matters in which he is due a share of the legal fees recovered. It is determined that these branches of the plaintiff's motion are part and parcel of the motion for a preliminary injunction and essentially duplications of the relief requested therein. It is well settled that the granting of the injunctive relief is not appropriate where it would confer upon the plaintiff the ultimate relief requested in the action or effect an alteration, rather than a preservation of the status quo (see Board of Mgrs. of Wharfside Condominium v Nehrich , 73 AD3d 822, 900 NYS2d 747 [2d Dept 2010]; SHS Baisley , LLC v. Res Land , Inc ., 18 AD3d 727, 795 NYS2d 690 [2d Dept 2005]). In addition, courts do not issue advisory opinions for the fundamental reason that the giving of such opinions is not the exercise of the judicial function. Thus, the Court may not issue a judicial decision which can have no immediate effect and may never resolve anything ( Simon v Nortrax N.E ., LLC , 44 AD3d 1027, 845 NYS2d 85 [2d Dept 2007] quoting Cuomo v Long Is. Light. Co ., 71 NY2d 349, 525 NYS2d 828 [1988] and New York Pub. Interest Research Group v Carey , 42 NY2d 527, 399 NYS2d 621 [1977]; see also Hirschfeld v Hogan , 60 AD3d 728, 874 NYS2d 585 [2d Dept 2009]). The parties have not had the opportunity to litigate the issues underlying the plaintiff's claim to a share of the legal fees in the Shkreli Action or his broader claims for damages contained in his complaint. Accordingly, those branches of the plaintiff's motion seeking declarations of his rights are denied.
The final branch of the plaintiff's motion seeks an order of attachment regarding the legal fees in the Shkreli Action. Because prejudgment attachment is a harsh remedy in derogation of common law, the courts have strictly construed CPLR Article 62 in favor of those against whom it may be employed (see Penoyar v Kelsey , 150 NY 77, 44 NE 788 [1896]; Michaels Elec. Supply Corp. v Trott Elec ., 231 AD2d 695, 647 NYS2d 839 [2d Dept 1996]). To obtain an order of attachment under CPLR 6201(3), a plaintiff must demonstrate that the defendant, with intent to defraud his or her creditors or to frustrate the enforcement of a judgment in favor of the plaintiff, has or is about to dispose of, encumber, or conceal property (see Benedict v Brown , 289 AD2d 433, 735 NYS2d 404 [2d Dept 2001]; Mineola Ford Sales v Rapp , 242 AD2d 371, 661 NYS2d 281 [2d Dept 1997]). A plaintiff seeking attachment must demonstrate, through affidavit or other written evidence, that a valid cause of action for a money judgment exists, that he will probably succeed on the merits, that he has satisfied one of the grounds enumerated in CPLR 6201, that the amount demanded from the defendant exceeds the amount of all counterclaims, and that such an order is needed (see CPLR 6212; A & M Exports v Meridien Bank Intl. Bank , 207 AD2d 741, 616 NYS2d 621 [1st Dept 1994]; Computer Strategies v Commodore Bus. Mach ., 105 AD2d 167, 483 NYS2d 716 [2d Dept 1984]).
Here, the application is premised on the conclusory assertion that, merely because the defendants failed to reveal the settlement of other matters and to pay plaintiff his share in the legal fees allegedly due, the defendants will somehow come into possession of the full settlement proceeds in the Shkreli Action and that they will dispose of or conceal those funds. Beyond the question whether the plaintiff will probably succeed in this action, the plaintiff has failed to establish that, even if the defendants obtain said funds, that will somehow defraud him or frustrate the enforcement of any judgment in this action. In addition, while not determinative, the Court notes that the defendants have asserted a counterclaim, which appears to be in excess of the amount of net legal fees due to the plaintiff in the Shkreli Action, in an action against the plaintiff which has been set down for joint trial with this action.
Accordingly, the plaintiff's motion is denied. Date: 12/29/2014
/s/_________
HON. WILLIAM B. REBOLINI, J.S.C.