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Middle Market Financial Corporation v. D'Orazio

United States District Court, S.D. New York
Sep 18, 2002
No. 96 Civ. 8138 (SWK) (HBP) (S.D.N.Y. Sep. 18, 2002)

Opinion

No. 96 Civ. 8138 (SWK) (HBP)

September 18, 2002


MEMORANDUM OPINION AND ORDER


I. Introduction

Plaintiff has moved for sanctions pursuant to Fed.R.Civ.P. 11 (Docket Item 120), and plaintiff and defendants have both made a number of non-dispositive in limine motions in this matter (Docket Items 125-29, 135, 136) which have been referred to me. This Memorandum Opinion and Order disposes of all pending motions.

Although this action was originally commenced in the name of both a corporate plaintiff and an individual, I recommended in a Report and Recommendation ("RR") dated August 24, 1999 (Docket Item 76) that the claims of the corporate plaintiff be dismissed for failure to prosecute. This RR was adopted by the Honorable Shirley Wohl Kram, United States District Judge, in an Order dated February 15, 2000 (Docket Item 90). In addition, in a Memorandum Opinion and Order dated June 8, 2000, Judge Kram denied a motion to reinstate the claims of the corporate plaintiff (Docket Item 103). Accordingly, although I have retained the caption as it was originally styled, Steven Brier, as an individual, is the only plaintiff remaining in this matter.

II. Facts

The facts underlying this action were set forth in my RR dated February 25, 1998 (Docket Item 35). Nevertheless, due to the lengthy history of this matter, I repeat the statement of above in order to minimize the burden on the reader.

A. The Bingaman Action and the Fee Action

In December of 1991, Middle Market retained the law firm of Spiegel, Pergament, Brown Basso ("Spiegel, Pergament"), with which Marino D'Orazio ("D'Orazio") was associated, to continue an action already commenced in New York Supreme Court, New York County ("the Bingaman Action"). In the Bingaman Action, Middle Market sought to recover damages for the alleged misappropriation of a corporate opportunity and for failure to pay on a promissory note executed by Steven Bingaman, Symbax Group, Ltd. and others (D'Orazio Affidavit in Support of Defendants' Motion For Summary Judgment, dated July 8, 1997 ("D'Orazio Aff.") ¶ 4).

D'Orazio left Spiegel, Pergament in May of 1993 and joined the firm of Mainetti Mainetti (D'Orazio Aff. ¶ 5). On June 2, 1993, Middle Market signed a consent to change attorneys and substituted Mainetti Mainetti for Spiegel, Pergament. Id.

The Supreme Court dismissed Middle Market's claims alleging misappropriation of a corporate opportunity. Middle Market did, however, prevail on its cause of action based on the promissory note and recovered a judgment for $390,615.05. The defendants in the Bingaman Action appealed (D'Orazio Aff. ¶ 7). Middle Market retained new counsel to defend the appeal and to file a cross appeal concerning the corporate opportunity claims.

The Supreme Court's Appellate Division, reversed the judgment in favor of Middle Market on the note and remanded the case for a new trial.Symbax, Inc. v. Bingaman, 219 A.D.2d 552, 631 N.Y.S.2d 829 (1st Dep't 1995). The Appellate Division's decision did not expressly address the dismissal of the corporate opportunity claim.

On January 10, 1994, Mainetti Mainetti brought an action in the New York Supreme Court, Ulster County, against Middle Market for its legal fees (the "Fee Action") (D'Orazio Aff. ¶ 8). Middle Market raised malpractice and fraudulent misrepresentations as defenses in the Fee Action and filed a third-party claim against D'Orazio claiming that he fraudulently misrepresented his firm's litigation experience (Id. at ¶¶ 10-12). The Supreme Court dismissed the third-party claim and limited Middle Market's defenses to the issue of whether the work was actually done. The Supreme Court held that Middle Market could pursue a separate malpractice action, but that it would "muddle the water" in the Fee Action to pursue all the issues together (Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment, Ex. 2 pp. 199-200).

Mainetti Mainetti prevailed in the Fee Action (D'Orazio Aff. ¶ 13), and Middle Market appealed from the dismissal of its third-party claim, as well as the judgment in favor of Mainetti Mainetti. Id. On October 16, 1997, the Appellate Division, Third Department, reversed the judgment for Mainetti Mainetti and remanded the case for a new trial finding that the Trial Court had improperly limited Middle Market's defenses when it precluded Middle Market from asserting fraud as a defense. The Appellate Division further held that the dismissal of Middle Market's third-party claim should have been "without prejudice," and that the Trial Court's decision to the contrary was error. Mainetti Mainetti v. Brier, 243 A.D.2d 879, 662 N.Y.S.2d 937 (3rd Dep't 1997).

On remand, Mainetti Mainetti recovered a judgment in the amount of $13,089.91 after Brier abandoned the action in the middle of his cross-examination of D'Orazio. That judgment was affirmed by the Appeallate Division. Mainetti Mainetti v. Brier, 281 A.D.2d 772, 722 N.Y.S.2d 279 (3rd Dep't 2001).

On October 30, 1996, plaintiffs filed the instant action claiming legal malpractice, fraudulent misrepresentation and ethical violations.

B. Proceedings to Date

Prior proceedings in this matter have narrowed the claims to some degree.

In an RR dated January 25, 1998 (Docket Item 35), I addressed defendants' motion for summary judgment and plaintiff's motion to strike certain defenses. In that RR, I recommended, among other things, (1) the denial of defendants' motion for summary judgment on the malpractice and fraud claims on the ground of res judicata (2) the granting of Spiegel, Pergament's motion for summary judgment dismissing all non-contract malpractice claims; (3) the granting of summary judgment dismissing that part of the malpractice claim based on alleged defects in the proposed judgment submitted in the Bingaman Action; (4) the denial of all other aspects of defendants' motion for summary judgment; (5) the denial of defendants' motion for a stay, and (6) the granting of plaintiff's motion to dismiss Spiegel Pergament's defense of insufficient service of process. My January 25, 1998 RR was adopted by the District Court on July 16, 1998 (Docket Item 44).

As noted above in footnote 1, all claims of the corporate plaintiff have been dismissed.

On August 24, 1999 I issued an RR on a second motion by defendants for summary judgment, recommending that the motion be denied in its entirety (Docket Item 76). That RR was also adopted by the District Court on February 15, 2000 (Docket Item 90).

Thus, as a result of the foregoing motion practice, all claims of the corporate plaintiff, plaintiff's non-contract claims against Spiegel, Pergament and its malpractice claims based on the form of the judgment submitted in the Bingaman Action have been eliminated from the action. All other claims asserted by plaintiff Brier individually remain in the action.

C. The Current Motions

Plaintiff, who is now proceeding pro se, has filed three motions: (1) a motion for sanctions under Rule 11 (Docket Item 120); (2) a "Motion in Limine for Expert Testimony" (Docket Item 135) and (3) a "Motion in Limine to [a] Preclude Inadmissible, Irrelevant, Character Prejudicial and Frivolous Evidence; [b] Preclude an Inadmissible Expert Report Devoid of Most Relevant Facts; [c] Preclude Inadmissible Re-Litigating of Dismissed Claims from the Opposite Position Argued by Defendant D'Orazio and [d] Preclude Arguing Dismissed Defendants' Positions in the Underlying Case" (Docket Item 136).

In addition to plaintiff's motions, defendants have filed five motions in limine seeking to preclude plaintiff from offering (1) evidence concerning defendants' billing for services provided by National Legal Research (Docket Item 125); (2) evidence against Spiegel, Pergament in connection with the second, third or fourth "causes of action" (Docket Item 126); (3) evidence concerning the form of the judgment submitted in the Bingaman Action (Docket Item 127); (4) the deposition of Omar Perazza and Carolyn Ritchey taken in the Bingaman Action (Docket Item 128) and (5) trial transcripts from the Fee Action (Docket Item 129).

III. Analysis

1. Rule 11 Motion (Docket Item 120)

A. Plaintiff's Motions

Although there does not appear to be any opposition on file to this motion, the manifold procedural and substantive defects in this motion require its denial.

Reading plaintiff's papers leniently, Haines v. Kerner, 404 U.S. 519, 520-21 (1972); Soto v. Walker, 44 F.3d 169, 173 (2d Cir. 1995), plaintiff appears to be seeking sanctions based on defendants' assertion of certain arguments that I found to be "frivolous" in my February 25, 1998 RR and defendants' alleged misconduct in connection with the preparation of the pretrial order. In connection with the latter category of alleged misconduct, plaintiff does not detail specific instances of alleged misconduct, but rather relies on broad-brush allegations that defendants have improperly attempted to include irrelevant exhibits and false statements in the pretrial order.

Plaintiff's motion must be denied. First, there is no evidence that the motion was ever served on defendants. The original motion on file with the Clerk's Office contains no affidavit of service, and there is no other evidence that the motion was ever served on defendants' counsel. That fact alone warrants dismissal of the motion. See generally Fed.R.Civ.P. 5(a).

Second, to the extent that plaintiff is relying on representations made and positions taken in connection with the preparation of the pretrial order, any misconduct is beyond the reach of Rule 11. Rule 11 reaches only "assertions contained in papers filed with or submitted to the court." 1993 Advisory Committee Notes to Rule 11, Subdivisions (b) and (c), reprinted at 146 F.R.D. 401, 585 (1993). See also United States v. International Bhd. of Teamsters, Chauffeurs, Warehousemen Helpers of America, AFL-CIO, 948 F.2d 1338, 1344 (2d Cir. 1991) ("The cornerstone of Rule 11 is the certification requirement; that is, Rule 11 sanctions must be based on the signature of an attorney or client on a pleading, motion, or other paper in a lawsuit."); Young v. Corbin, 889 F. Supp. 582, 585 (W.D.N.Y. 1995).

Third, plaintiff has not followed the procedure required by subparagraph (c)(1) of the Rule. Rule 11(c)(1)(A) requires service on the party against whom sanctions are sought at least twenty-one (21) days before filing, thereby affording the alleged violator a "safe harbor" to withdraw the allegedly improper representation or argument. See generally 1 Michael C. Silberberg, Civil Practice in the Southern District of New York, § 5.28 (2d ed. 2002). Plaintiff has ignored this requirement completely.

Fourth, to the extent the motion is based on misconduct concerning the preparation of the pretrial-order, the motion is deficient because it fails to set forth the specific conduct plaintiff claims is objectionable. Fed.R.Civ.P. 11(c)(1)(A); Hadges v. Yonkers Racing Corp., 48 F.3d 1320, 1331 (2d Cir. 1995); Weiss v. Weiss, 984 F. Supp. 682, 685 (S.D.N.Y. 1997).

Accordingly, plaintiff's motion for sanctions pursuant to Rule 11 must be denied.

2. Plaintiff's "Motion in L[i]mine for Expert Testimony" (Docket Item 135)

Plaintiff's "Motion in L[i]mine for Expert Testimony" is actually an application for relief from the mandatory disclosure requirements of Fed.R.Civ.P. 26(a)(2).

As set forth in plaintiff's motion, plaintiff was dissatisfied with the report produced by the expert retained by his former counsel. Plaintiff consequently discharged the expert, and now has no expert to testify at trial. Plaintiff seeks to remedy this situation by requesting an order permitting unidentified fact witnesses to testify to unidentified opinions. In effect, plaintiff seeks permission from the Court to ignore entirely the disclosure requirements of the Federal Rules of Civil Procedure concerning expert witnesses.

The required disclosures with respect to expert witnesses are set forth at length in Fed.R.Civ.P. 26(a)(2). Before an expert can testify at trial, the disclosures set forth in Rule 26(a)(2) must be made. The "automatic sanction" for a violation of Rule 26(a) is preclusion. Advisory Committee Notes to the 1993 Amendments to the Federal Rules of Civil Procedure, reprinted at 146 F.R.D. 401, 691 (1993). See also Fed.R.Civ.P. 37(c)(1); LaMarca v. United States, 31 F. Supp.2d 110, 122-23 (E.D.N.Y. 1998); Fund Comm'n Serv. II, Inc. v. Westpac Banking Co., 93 Civ. 8298 (KTD) (RLE), 1996 WL 469660 at *3 (S.D.N.Y. Aug. 16, 1996); 8 Charles A. Wright, Arthur R. Miller Richard L. Marcus,Federal Practice Procedure, § 2031.1 at 441 (2d ed. 1994).

Although a court must always bear in mind that procedural rules are "only the means to the end of achieving substantial justice and are not the ends in themselves," Perry v. Allen, 239 F.2d 107, 112 (5th Cir. 1956), and that the needs of justice must, at times, temper the application of the rules of procedure, the rules of procedure are not to be lightly disregarded simply because their application in a particular case is harsh or because their application results in the exclusion of what might otherwise be significant evidence. "[I]n the long run, experience teaches that strict adherence to the procedural requirements specified by the legislature is the best guarantee of evenhanded administration of the law." Mohasco Corp. v. Silver, 447 U.S. 807, 826 (1980); accord McNeil v. United States, 508 U.S. 106, 113 (1993);Halstrom v. Tillamook County, 493 U.S. 20, 31 (1990); Baldwin County Welcome Center v. Brown, 466 U.S. 147, 152 (1984) ("Procedural requirements . . . are not to be disregarded by courts out of a vague sympathy for particular litigants.").

Plaintiff's proposal to offer expert opinion from unidentified fact witnesses and from himself is also deficient because there has been no showing that the proffered "experts" are qualified. See Kranis v. Scott, 178 F. Supp.2d 330, 332-34 (E.D.N.Y. 2002) (disbarred attorney who had not practiced in thirty years not qualified to give expert opinion in legal malpractice case).

In this case, plaintiff has failed to comply with the requirements of Rule 26(a)(2) and seeks permission to ignore the rule in its entirety. Plaintiff has proffered no colorable justification for his radical departure from the Rule's requirements, and his application to permit fact witnesses to offer expert testimony is, therefore, denied.

3. Plaintiff's "Motion in L[i]mine to [a] Preclude Inadmissible, Irrelevant, Character Prejudicial and Frivolous Evidence; [b] Preclude an Inadmissible Expert Report Devoid of Most Relevant Facts; [c] Preclude Inadmissible Re-Litigating of Dismissed Claims from the Opposite Position Argued by Defendant D'Orazio and [d] Preclude Arguing Dismissed Defendants' Positions in the Underlying Case" (Docket Item 136)
a. Allegedly Inadmissible, Irrelevant, Character Prejudicial and Frivolous Evidence

In the first aspect of this motion, plaintiff seeks to preclude defendants from offering each of the sixty-plus exhibits defendants have listed in the pretrial order. Although plaintiff has provided me with his objections to each of defendants' exhibits, he has not provided me with the exhibits themselves, he does not address each exhibit in his memorandum of law and provides no legal authority supporting the exclusions of the vast majority of the exhibits listed by defendants. Accordingly, I limit my discussion here to the specific objections addressed in plaintiff's memorandum of law.

To the extent plaintiff is objecting to defendants' exhibits on the ground that defendants are attempting to relitigate the claims in the Bingaman Action, plaintiff's objections are without merit. In a legal malpractice action, a plaintiff must show that, but for counsel's malpractice, the plaintiff would have recovered in the underlying action. The merits of the underlying case are, therefore, an essential element of a legal malpractice case. Servidone Constr. Corp. v. Security Ins. Co., 64 N.Y.2d 419, 425, 477 N.E.2d 441, 445, 488 N.Y.S.2d 139, 143 (1985); McKenna v. Forsyth Forsyth, 280 A.D.2d 79, 82, 720 N.Y.S.2d 654, 656-57 (4th Dep't 2001); Alva v. Hurley, Fox, Selig, Capari Kelleher, 156 Misc.2d 550, 553-54, 593 N.Y.S.2d 728, 730 (Sup.Ct. Rockland Co. 1993); Titsworth v. Mondo, 95 Misc.2d 233, 242-43, 407 N.Y.S.2d 793, 798 (Sup.Ct. Monroe Co., 1978). Thus, to the extent plaintiff is objecting to exhibits on the ground that they are offered in an attempt to relitigate the Bingaman Action, his objections are without merit.

To the extent plaintiff is objecting to defendants' exhibits A B on the ground of relevance, his objection is overruled. These documents are memoranda of law submitted in the Bingaman Action. Whether or not these documents constitute proposed findings of fact and conclusions of law, they are relevant because they bear on the quality of defendant's representation in the Bingaman Action.

Plaintiff's relevance objection to defendants' exhibit C is also overruled. — Whether plaintiff desired to assert a claim against Bingaman individually is relevant to the issue of whether defendants were negligent in failing to do so.

Plaintiff's relevance objections to Exhibits L, M, N, O, P and T are overruled. These exhibits appear to bear on whether plaintiff ratified or directed the actions taken by defendants in the Bingaman Action. If the jury concludes that plaintiff directed or approved the strategic choices made in the Bingaman Action, defendants may have a defense to any claim challenging their strategic choices.

Plaintiff's objection to testimony or exhibits concerning plaintiff's relationships with other attorneys is sustained. What plaintiff knew as a result of his relationship with other attorneys has no relevance to the issue of whether defendants performed their work with reasonable professional care. Plaintiff does not specify which exhibits bear solely on this issue. It is, therefore, impossible to provide a more specific ruling.

b. Allegedly Deficient Expert Report

Plaintiff next claims that-defendants' expert report should be excluded. Plaintiff contends that the report should be excluded because its conclusions are "manifestly erroneous," it fails to consider certain facts and it purports to opine concerning domestic law.

Pursuant to Rule 26(a)(2), defendants have produced the expert report of Brian J. Gallagher, an attorney admitted to practice in New York State, the Southern and Eastern Districts of New York and the Courts of Appeal for the Second, Eleventh and District of Columbia Circuits. Mr. Gallagher's report summarizes the Bingaman Action from its inception through the decision by the Trial Court after remand from the Appellate Division, summarizes plaintiff's claims here and contains eight (8) opinions, namely (1) that there was no legal basis on which to hold Bingaman personally liable on the note at issue in the Bingaman Action and that defendants did not, therefore, depart from acceptable professional standards by failing to assert a viable claim against Bingaman in connection with the note; (2) that there was no additional evidence that could have been offered to sustain Bingamans personal liability on the note; (3) that there was no legal basis on which to impose liability on Asset Growth Partnership in the Bingaman Action and that defendants failure to obtain a judgment against Asset Growth Partnership was not, therefore, a departure from acceptable professional standards; (4) that the defendants' decision not to submit proposed findings of fact to the Trial Court in the Bingaman Action was an issue over which competent attorneys could reasonably differ because of the delay that such submissions would necessarily cause; (5) that the Trial Memoranda submitted by defendants were the functional equivalent of findings of fact; (6) that any error with respect to the submission of findings of fact was harmless because Symbax Group (the defendant in the Bingaman Action) was an assetless shell; (7) that the failure to file an appropriate order in the Bingaman Action and the failure to assert supplemental claims of replevin and conversion with respect to certain office equipment allegedly transferred from Symbax Group to Asset Growth Partnership was the result of plaintiff's instruction to defendants and that defendants' compliance with these instructions was consistent with acceptable standards of professional conduct; (8) that there was no additional evidence or theories of liability that would have resulted in an outcome more favorable to plaintiff.

Defendants' expert report is not listed in the Pretrial Order as an exhibit, and I interpret plaintiff's motion as a motion to preclude defendants' expert from testifying to the opinions expressed in the report.

To the extent that plaintiff claims that the opinions expressed by defendants' expert are "manifestly erroneous," he has failed to articulate a valid objection. Whether an expert's opinion is correct is a matter for the fact finder to determine; the allegedly erroneous nature of an experts' conclusions is simply not an objection that has a basis in the Federal Rules of Evidence.

To the extent plaintiff asserts that defendants' expert overlooked relevant facts, the objection goes to the weight, not the admissibility, of the opinions. Whether omitted facts should have been considered is a classic subject of cross-examination and is a matter for the fact finder to consider in determining what weight, if any, should be given to the expert's opinions.

Plaintiff's final objection — that defendants' expert improperly seeks to testify concerning matters of law — is the most troubling. Although there is ample case law establishing that expert testimony is ordinarily required in a legal malpractice case concerning the issue of defendant's departure from acceptable professional standards, e.g., Hoffenberg v. Meyers, 99 Civ. 4674 (RWS), 2002 WL 57252 at *4 (S.D.N.Y. Jan. 16, 2002); Ginor v. Landsberg, 960 F. Supp. 661, 672 (S.D.N.Y. 1996), aff'd without opinion, 159 F.3d 1346 (2d Cir. 1998);Greene v. Payne, Wood, Littlejohn, 197 A.D.2d 664, 666, 602 N.Y.S.2d 883, 885 (2d Dep't 1993); Clanton v. Vagianellis, 192 A.D.2d 943, 944, 596 N.Y.S.2d 593, 595 (3rd Dep't 1993), the case law concerning the permissible scope of the expert's opinion is far less developed.

Expert witnesses are not ordinarily permitted to testify to matters of domestic law. See generally United States v. Bilzerian, 926 F.2d 1285, 1294 (2d Cir. 1991); Note, Expert Legal Testimony, 97 Harv. L. Rev. 797, 798 n. 10 accompanying text (1984). However, in a legal malpractice action, the law applicable in the underlying action and the state of that law at the time of the alleged malpractice is almost always a consideration relevant to determining whether the malpractice plaintiff would have prevailed in the underlying action but for the alleged malpractice and whether the alleged malpractice did, in fact, constitute a departure from acceptable professional standards. Where, for example, the law is unsettled because of an ambiguity in a statute or a split of authority among intermediate appellate courts, a determination by counsel which subsequently proves to be erroneous may not constitute malpractice. On the other hand, an attorney's failure to comply with the statute of limitations applicable to a garden variety personal injury action will be substantially more difficult to defend. In either case, however, the clarity of the law applicable to the underlying action will be relevant to the fact finder's determination of the whether counsel departed from acceptable professional standards.

Fed.R.Civ.P. 44.1 expressly permits testimony and other evidence concerning the content of foreign law.

Although the case law discussing the permissible scope of an expert's testimony in a legal malpractice action is sparse, the extant case law suggests that an expert is permitted to testify concerning the law applicable to the underlying action, at least to the extent necessary to explain the expert's conclusion concerning the attorney's standard of conduct. For example, in Keller v. Albright, 1 F. Supp.2d 1279 (D. Utah 1997), aff'd without opinion, 141 F.3d 1185 (10th Cir. 1998), plaintiff alleged that his former counsel had been guilty of malpractice in failing to defend properly against a writ of attachment. Former counsel moved for summary judgment dismissing the malpractice claim, arguing that plaintiff's failure to identify an expert witness was fatal to his claim of malpractice. 1 F. Supp.2d at 1280-81. The court granted counsel's motion for summary judgment, stating:

In the instant case, Keller admits he has not retained an expert witness to support his legal malpractice claim. However, he argues expert witness testimony is not needed as his claim fails within the exception to the general rule. Keller contends Albright's alleged negligence in failing to prevent the seizure and loss of Keller's assets is so obvious that no reasonable lay juror could not comprehend Albright's breach of duty. The court disagrees.
Keller seems to assume that, because Albright had a copy of a writ of execution and Keller complained to him that more assets were being seized than required, Albright was obviously negligent in preventing the seizure. However, as Albright points out, f or lay jurors to reach this conclusion without the assistance of expert testimony, they must: understand the scope of the writ of attachment, the judgment, and other orders issued by the district court in the state action; interpret and understand law and procedure relative to attachment and execution; determine what alternatives to the actions taken by Albright on Keller's behalf would have been more appropriate; and, finally, determine whether Albright acted with the degree of skill and care ordinarily exercised by lawyers in Salt Lake County in 1991. The court is not persuaded these matters are "within the common knowledge and experience" of lay jurors, and Keller has not directed the court to any authority supporting this view.
1 F. Supp.2d at 1281-82 (emphasis added) Again, although the court did not expressly describe the permissible scope of the expert's testimony, its discussion of the jury's task in conjunction with the need for expert testimony makes sense only if the court contemplated expert testimony concerning attachment procedure.

Similarly, in Greene v. Payne, Wood, Littlejohn, supra, 197 A.D.2d 664, 602 N.Y.S.2d 883, plaintiff asserted a claim for legal malpractice based on defendants' failure to plead properly a pendent state law claim in an action in federal court. The trial court denied plaintiff's motion for summary judgment and the Appellate Division affirmed, finding that the determination of whether defendants' pleading failure constituted negligence required expert testimony and presented an issue of fact. 197 A.D.2d at 666-67, 602 N.Y.S.2D at 885. Although the Appellate Division did not expressly state that an expert would be permitted to explain federal pleading requirements to the jury, its decision clearly contemplated such testimony; unless the state of the underlying law was a question of fact, there would be no need for the submission of expert testimony.

I conclude that the foregoing authorities and logic dictate that in a legal malpractice action an expert should be permitted to testify to the substantive law applicable to the underlying proceeding, at least to the extent necessary to explain the expert's conclusion that the defendant did or did not exercise the appropriate standard of care. Whether an attorney exercised the appropriate standard of care in a particular case will almost always involve an inquiry into the substantive law governing the underlying claim. Whether an attorney acted improperly by failing to offer certain evidence or by failing to assert a particular claim can be determined only by understanding whether the evidence was admissible and whether the claim was at least colorable. If an expert is precluded from testifying as to the law applicable to the underlying action, he will not be able to explain the rationale for his opinion and the jury will be left with only the expert's naked conclusion with no basis for evaluating its validity or persuasiveness.

In this case, I conclude that all of the opinions offered by defendants' expert are admissible except his opinion that plaintiff instructed defendants not to pursue claims of replevin and conversion with respect to certain office equipment allegedly transferred from Symbax Group to Asset Growth Partnership. The expert has no first-hand knowledge of this putative fact and any information he has concerning this matter must be hearsay. Although the expert can testify that he assumed that plaintiff gave certain instructions to his counsel, he cannot testify that the instructions were in fact given.

c. Application to Preclude Inadmissible Re-Litigating of Dismissed Claims from the Opposite Position Argued by Defendant D'Orazio

Plaintiff's next argument is difficult to understand. Plaintiff seems to be seeking to preclude defendants from relitigating here counterclaims that were unsuccessfully asserted against plaintiff in the Bingaman Action. In other words, plaintiff here seems to be attempting to prevent his former attorneys from arguing that plaintiff prevailed on certain counterclaims in the Bingaman Action that he should have lost. Inexplicably, defendants do not address this aspect of plaintiff's motion.

I agree with plaintiff that the outcome of any counterclaims asserted in the Bingaman Action is irrelevant here. In an action involving multiple claims, a lawyer's diligent representation (or malpractice) with respect to some of the claims does not bear on the competence of his representation with respect to the remaining claims.

Accordingly, plaintiff's motion to preclude evidence concerning counterclaims that were dismissed in the Bingaman Action is granted.

d. Application to Preclude "Arguing Dismissed Defendants' Positions in the Underlying Case"

Although plaintiff's motion seeks on its cover page to preclude "arguing dismissed defendants' positions in the underlying case," plaintiff's memorandum of law does not address this aspect of his motion in any respect, and it is not at all apparent what relief plaintiff is seeking.

If plaintiff is seeking to preclude evidence concerning the merits of the Bingaman Action, his motion must be denied. As noted in Section III (A)(3)(a), above, one of the elements that a legal malpractice plaintiff must prove is that he would have prevailed in the underlying action but for the alleged malpractice. Thus, the merits of the underlying action are always at issue in a claim for legal malpractice.

Since the only cognizable aspect of this prong of plaintiff's motion lacks merit, this aspect of plaintiff's motion is denied.

B. Defendants' Motions to Preclude

1. Evidence Concerning Defendants' Billing Plaintiff for Outside Legal Research Services in Connection with the Bingaman Action (Docket Item 125)

Defendants first seek to preclude plaintiff from offering evidence concerning their billing plaintiff for the services they received from National Legal Research Services, an independent legal research company. Defendants do not base their motion on any rule of evidence. Rather, defendants claim that the outcome of Fee Action somehow precludes plaintiff from even offering these bills here.

Plaintiff argues in response that the invoices are admissible because, as I held in my February 25, 1998 RR, which was adopted buy Judge Kram on July 15, 1998, the malpractice and fraud claims were never adjudicated in the Fee Action and the invoices are relevant to those claims.

Defendants' argument is without merit. Although the issues that were actually determined in the Fee Action cannot be relitigated here, the Court in the Fee Action expressly declined to consider plaintiff's malpractice and negligence claims. Thus, the fee action can have no preclusive effect with respect to the claims asserted here.

I am aware of no rule of evidence that precludes the bills from being offered here. The bills may be relevant to show the quality of the work performed by defendants or whether they devoted sufficient resources to plaintiff's claims in the Bingaman Action. Accordingly, without prejudice to any other objection that may be made at trial, defendants' motion to preclude evidence concerning the bills from National Legal Research is denied.

To avoid any confusion, I rule here only on the specific objections made in the in limine motions. I am not ruling that any particular exhibit is, in fact, admissible, nor am I ruling on the possible merit of any objection not asserted in the parties' motion papers.

2. Evidence Against Spiegel, Pergament in Connection with Plaintiff's Second, Third and Fourth Claims (Docket Item 126)

Defendants next seek to preclude plaintiff from offering evidence against Spiegel, Pergament in connection with plaintiff's second, third and fourth claims for relief. Again defendants do not cite any rule of evidence, nor do they even identify the specific exhibits to which their motion is directed. Rather, defendants simply state that their motion should be granted because this Court's prior rulings on the statute of limitations defense precludes plaintiff from proceeding against Spiegel, Pergament on any theory other than breach of contract.

Although the statute of limitations does preclude plaintiff from proceeding against Spiegel, Pergament on any theory other than breach of contract, it is impossible to grant defendants' motion as it is made. In any trial, a particular piece of evidence may be relevant to more than one claim. The mere fact that a particular piece of evidence may be relevant to the second, third or fourth claims, which were dismissed as to Spiegel, Pergament, does not preclude admission of the evidence if it is also relevant to plaintiff's breach of contract theory. Since defendants do not identify any particular exhibit in connection with this motion, it is impossible to determine if any exhibit is relevant only to the dismissed claims and entirely irrelevant to plaintiff's breach of contract theory.

Accordingly, defendants' second motion in limine is denied.

3. Evidence Concerning the Form of Judgment Submitted in the Bingaman Action (Docket Item 127)

Defendants' third motion in limine seeks to preclude plaintiff from offering evidence concerning the form of judgment submitted in the Bingaman Action. Defendants' arguments in this respect are based on the prior rulings of this Court granting partial summary judgment and dismissing that part of the malpractice claims asserting defects in the proposed judgment submitted in the Bingaman Action (see Docket Items 35 and 44).

Plaintiff objects to defendants' motion, claiming that the form of judgment is "one element among many that Defendant D'Orazio committed two years [sic] of non-stop legal malpractice" (Plaintiff's Memorandum of Law in Response to Defendants' Motion in Limine, dated February 4, 2002, at 5).

Defendants' motion has merit. It has already been determined that plaintiff cannot assert any claim based on the form of judgment submitted in the Bingaman Action. Accordingly, the form of judgment submitted therein is irrelevant.

Accordingly, defendants' motion to preclude plaintiff from offering evidence concerning the form of judgment submitted in the Bingaman Action is granted.

4. The Transcripts of Oar Perazza and Carolyn Ritchey Taken in the Bingaman Action (Docket Item 128)

Defendants' fourth motion in limine seeks to preclude plaintiff from offering the transcripts of Omar Perazza and Carolyn Ritchey which were taken in the Bingaman Action. Defendants claim that these transcripts are hearsay as to them because they were not parties to the Bingaman Action and had no motive to cross-examine with respect to the issues raised in this action. See generally Li v. Canarozzi, 142 F.3d 83, 88 (2d Cir. 1998) ("Under Rule 804(b)(1), the prior testimony of a person who (a) is unavailable, and (b) has testified at a proper deposition at which the party against whom the testimony is offered had an opportunity and similar motive to cross-examine him, is not excluded by the hearsay rule."). Plaintiff contends that the depositions are admissible to impeach the defendants. It is not clear from plaintiff's papers how these deposition transcripts will serve to impeach the testimony of any of the defendants.

Whether the Perazza an Ritchey deposition transcripts should be precluded by the general prohibition against hearsay testimony depends on the purpose for which they are offered. If they are offered solely to prove the truth of the' matter asserted therein, they are hearsay because the defendants here had no motive to cross examine either of the witnesses in connection with the malpractice and other claims asserted herein. If, however, the transcripts are offered merely to prove the nature of the testimony that was available to defendants in the Bingaman Action, to prove that counsel was on notice or had knowledge of the testimony adduced at these two depositions, or to prove the manner in which the Bingaman Action was litigated by defendants, the transcripts would not be hearsay. In any of these latter situations, the transcripts would be offered merely to show the fact that certain testimony was given or that certain questions were asked; the truth of the testimony would not be implicated and the general prohibition against hearsay would, therefore, be inapplicable. See Mattson v. Schultz, 145 F.3d 937, 940 (7th Cir. 1998) ("[I]n fact, when the underlying action has already been tried, the use of the trial transcript in a subsequent malpractice trial is well established."); Best v. Rome, 858 F. Supp. 271, 277-78 (D. Mass. 1994) (In legal malpractice action, affidavit from witness concerning his conversation with counsel regarding underlying proceeding admissible; witness's conversation with counsel was not hearsay, but was relevant to show counsel's state of mind.). See also Fischl v. Armitage, 128 F.3d 50, 58 (2d Cir. 1997); United States v. Kanovsky, 618 F.2d 229, 231 (2d Cir. 1980); United States v. Anfield, 539 F.2d 674, 678 (9th Cir. 1976);Morales v. Lukens, Inc., 593 F. Supp. 1209, 1212 (S.D.N.Y. 1984).

Since there is no basis to conclude at this time that the testimony will be offered solely for hearsay purposes, defendants' motion to preclude plaintiff from offering the transcripts for the Perazza and Ritchey depositions is denied.

5. The Trial Transcripts of the Fee Action (Docket Item 129)

Finally, defendants' fifth and final in limine motion seeks to preclude plaintiff from offering the trial transcripts of the Fee Action. Defendants again claim that the transcripts are hearsay.

Defendants' motion is substantially without merit. To the extent that the transcripts of the Fee Action contains the statements of defendants or their agents, the statements in the transcript are not hearsay, but rather constitute admissions. Fed.R.Evid. 801(d)(2); United States v. Russo, Docket Nos. 99-1481(L), 99-1502, 2002 WL 1940714 at *4 (2d Cir. Aug. 22, 2002); Agricultural Ins. Co. v. Ace Hardware Corp., 98 Civ. 8708 (RJW), 2002 WL 1836750 at *1 (S.D.N.Y. Aug. 12, 2002); Rosen v. Brookhaven Capital Mgmt. Co., 194 F. Supp.2d 224, 231 (S.D.N.Y. 2002). Plaintiff's use of the transcript from the Fee Action would constitute an attempt to introduce hearsay only to the extent that plaintiff attempted to introduce his own statements (that were not admissible under the doctrine of completeness, see Fed.R.Evid. 106) to prove the truth of the matter asserted therein. Since defendant does not identify any specific portions of the transcript that would fit into this category, this motionin limine must also be denied.

IV. Conclusion

Accordingly, for all the foregoing reasons, (1) plaintiff's motion for sanctions pursuant to Rule 11 (Docket Item 120) is denied; (2) plaintiff's "Motion in L[i]mine for Expert Testimony" (Docket Item 135) is denied; (3) plaintiff's omnibus motion in limine (Docket Item 136) is granted to the extent it seeks to preclude (a) evidence concerning plaintiffs relationship(s) with other attorneys, (b) evidence concerning the counterclaims that were dismissed in the Bingaman Action and (c) testimony from defendants' expert that plaintiff instructed defendants not to pursue claims of replevin and conversion with respect to certain office equipment allegedly transferred from Symbax Group to Asset Growth Partnership; the motion is denied in all other respects; (4) defendants' motion to preclude plaintiff from offering evidence concerning defendants' billing plaintiff for outside legal research services in connection with the Bingaman Action (Docket Item 125) is denied; (5) defendants' motion to preclude plaintiff from offering evidence against Spiegel, Pergament in connection with plaintiff's second, third and fourth claims for relief (Docket Item 126) is denied; (6) defendants' motion to preclude plaintiff from submitting evidence concerning the form of judgment submitted in the Bingaman Action (Docket Item 127) is granted; (7) defendants' motion to preclude plaintiff from offering the transcripts of the depositions of Omar Perazza and Carolyn Ritchey taken in the Bingaman Action (Docket Item 128) is denied, and (8) defendants' motion to preclude plaintiff from submitting the trial transcripts from the Fee Action (Docket Item 129) is denied.

SO ORDERED.


Summaries of

Middle Market Financial Corporation v. D'Orazio

United States District Court, S.D. New York
Sep 18, 2002
No. 96 Civ. 8138 (SWK) (HBP) (S.D.N.Y. Sep. 18, 2002)
Case details for

Middle Market Financial Corporation v. D'Orazio

Case Details

Full title:MIDDLE MARKET FINANCIAL CORPORATION, successor to SYMBAX, INC. and STEVEN…

Court:United States District Court, S.D. New York

Date published: Sep 18, 2002

Citations

No. 96 Civ. 8138 (SWK) (HBP) (S.D.N.Y. Sep. 18, 2002)

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