Opinion
INDEX NO. 151876/2016
03-26-2018
TIFFANY THOMAS, Plaintiff, v. RAPHAEL WEITZMAN and WEITZMAN LAW OFFICES, LLC., WEITZMAN LAW OFFICES, L.L.C., TIFFANY THOMAS, THE PERECMAN FIRM, L.L.C., BARON ASSOCIATES, P.C., RICHMOND UNIVERSITY MEDICAL CENTER AKA RICHMOND MEDICAL CENTER, MARK BRANDON, Defendants, WEITZMAN LAW OFFICES, L.L.C., Third-Party Plaintiff, v. TIFFANY THOMAS, THE PERECMAN FIRM, P.L.L.C., BARON ASSOCIATES, P.C., RICHMOND UNIVERSITY MEDICAL CENTER AKA RICHMOND MEDICAL CENTER, and MARK L. BRANDON, MD, Third-Party Defendants.
NYSCEF DOC. NO. 91 PRESENT: HON. KATHRYN E. FREED , J.S.C. Justice MOTION SEQ. NO. 001, 002
DECISION AND ORDER
The following e-filed documents, listed by NYSCEF document number (Motion 001) 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 46, 49 were read on this motion to/for DISMISS. The following e-filed documents, listed by NYSCEF document number (Motion 002) 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88 were read on this motion to/for DISMISS. Upon the foregoing documents, it is ordered that the motions are decided as follows.
Motion sequence numbers 001 and 002 are consolidated for disposition.
Plaintiff Tiffany Thomas (Thomas) brings this legal malpractice action against her former attorneys, defendants Raphael Weitzman (Weitzman) and Weitzman Law Offices, L.L.C. (Weitzman Law, together with Weitzman, Weitzman Defendants), for their alleged failure to timely serve a summons and complaint in an underlying action for medical malpractice and personal injury (Underlying Action). The three-count complaint asserts causes of action for legal malpractice in connection with the underlying personal injury and medical malpractice claims (first and second causes of action, respectively) and a claim for treble damages pursuant to New York Judiciary Law § 487.
The Weitzman Defendants filed an answer asserting numerous affirmative defenses and cross claims against Thomas. Weitzman Law also commenced a related action in the Supreme Court of Monroe County, entitled Weitzman Law Offices, L.L.C. v Thomas, et al., under Index No. 00495/2017 (Monroe County Action), which has been consolidated, as a third-party action, with the instant suit. The six-count third-party complaint asserts claims for contribution, indemnification and/or a declaratory judgement declaring that Weitzman Law is entitled to such from third-party defendants the Perecman Firm, P.L.L.C. (the Perecman Firm) and Baron Associates, P.C. (Baron Associates), which previously represented Thomas, and third-party defendants Richmond University Medical Center, also known as Richmond Medical Center, and Mark L. Brandon, MD (Dr. Brandon), the medical malpractice defendants in the Underlying Action (first, fourth, fifth, and sixth causes of action, respectively). In addition, the third-party complaint asserts claims for interference with a prospective business relationship against the Perecman Firm (second cause of action) and defamation against Thomas (third cause of action).
The third-party complaint does not identify the causes of action it is asserting and the first, fourth, fifth, and sixth causes of action can be read as seeking indemnity, contribution and/or declaratory relief. The Weitzman Defendants' submissions on the instant motions do not clarify the matter.
The Weitzman Defendants now move (in motion sequence number 001) to dismiss the complaint for improper service and for failure to state a claim. In the alternative, they seek a change of venue to Monroe County. In addition, the Weitzman Defendants seek an order disqualifying Thomas's attorneys, the Perecman Firm.
Third-party defendant Baron Associates moves (in motion sequence number 002) to dismiss the third-party complaint for failure to state a claim and based upon documentary evidence. In addition, it seeks all costs, attorneys' fees, legal fees and disbursements incurred in connection with this litigation and sanctions against Weitzman Law, pursuant to 22 NYCRR 130-1.1.
I. Background and Procedural History
On November 20, 2011, Thomas was allegedly injured at premises owned by the New York City Housing Authority (NYCHA). According to Thomas, due to her injuries, she underwent surgery at Richmond University Medical Center, which Dr. Brandon performed. She alleges that she received treatment which fell below, and deviated from, proper and acceptable standards of care in the medical community.
Thomas retained third-party defendant Baron Associates to assert a personal injury claim against NYCHA. She also retained third-party defendant the Perecman Firm to pursue a medical malpractice claim against third-party defendants Richmond University Medical Center and Dr. Brandon.
On December 21, 2011, Baron Associates served and filed a notice of claim against NYCHA and the City of New York. According to Baron Associates, Thomas failed to appear for her initial General Municipal Law (GML) § 50-h examination, scheduled for February 21, 2012, as well as a rescheduled examination on April 30, 2012. Subsequently, Baron Associates sent Thomas a disengagement letter (Disengagement Letter), dated May 17, 2012. The Disengagement Letter advised Thomas that: Baron Associates would no longer represent her, due to her "lack of cooperation and failure to participate in the case"; the statute of limitations for a negligence claim against NYCHA was one year and 90 days and would expire on February 15, 2013; and her appearance at a 50-h examination was a prerequisite for commencing a lawsuit. McDonald affirmation, exhibit Q. Baron Associates asserts that it had no further contact with Thomas.
According to the Perecman Firm, it never commenced an action on Thomas's behalf. By letter dated April 26, 2012, Thomas informed the firm that she was discharging it and that she had retained the Weitzman Defendants. Enclosed was a "Consent to Change Attorney" form (Change of Attorney Form), already executed by Thomas and Weitzman, as well as a letter from Weitzman, instructing the Perecman Firm to contact Weitzman Law regarding the transfer of Thomas's file and payment of the Perecman Firm's disbursements. Rigelhaupt affirmation, exhibit 4. According to the Perecman Firm, it executed and returned the Change of Attorney Form, along with a request for payment of its disbursements. It allegedly sent follow-up requests for payment by letters dated August 9 and October 2, 2012, but Weitzman Law never paid.
Weitzman maintains that, on April 26, 2012, Weitzman Law sent letters to the Perecman Firm and Baron Associates, to substitute them as Thomas's attorneys. These letters allegedly went unanswered, and Weitzman Law faxed the letters on June 11, 2012 and contacted both firms by telephone on July 7, 2012. Weitzman states that the Perecman Firm did not return an executed Change of Attorney Form and that the Perecman Firm's subsequent demands for payment "confirm[] [that] no substitution or transfer of files [had] tak[en] place." Weitzman reply affirmation, ¶ 15.
Notably, the Weitzman Defendants do not submit any documentary evidence of their alleged communications with Baron Associates.
On February 17, 2013, the Weitzman Defendants commenced the Underlying Action on Thomas's behalf by filing a summons and complaint in the Supreme Court, Richmond County (under Index No. 0150118/2013), naming the NYCHA, Richmond University Medical Center and Dr. Brandon as defendants. Weitzman executed the attorney verification that accompanied the complaint, identifying the Weitzman Defendants as Thomas's "attorneys of record" in the Underlying Action, and "certif[ied] that [he] reviewed the facts of this case and [had] consulted with a physician . . . and that [he had] concluded, on the basis of such review and consultation, that there [was] a reasonable basis for the commencement of this action." McDonald affirmation, exhibit E at 11, 12. Weitzman now states that the Weitzman Defendants "mistakenly filed a Summons and Complaint on February 17, 2013, . . . while Plaintiff was represented by The Perecman Firm, P.L.L.C. and Baron Associates P.C." Weitzman affirmation, ¶ 17.
The Weitzman Defendants allegedly failed to serve the Underlying Action's summons and complaint on Richmond University Medical Center and Dr. Brandon, and did not serve NYCHA until April 28, 2014. They also allegedly failed to move for leave to extend the time to serve. NYCHA moved to dismiss the complaint and the Weitzman Defendants cross-moved to extend the time to plead or compel acceptance of a pleading untimely served. In the affirmation in support of the cross motion, Weitzman stated that the summons and complaint were properly and timely served, but that NYCHA refused to accept service "due to issue with legibility of the index number, which as a result of misfiling did not get addressed promptly." Complaint, ¶ 32 (internal quotation marks omitted). Thomas states, on information and belief, that this statement was false. The Weitzman Defendants failed to appear on the return date for the motions and, by order dated October 24, 2014, the court granted NYCHA's motion, dismissing the summons and complaint with prejudice.
The Weitzman Defendants then filed a motion for leave to renew and reargue. In his affirmation is support of the motion, Weitzman stated that he failed to appear on the return date of the original motions because "his . . . office sustained water damage when a water pipe broke halting operations of the office for over ten days, causing Plaintiff to miss argument of the motions." Id., ¶ 37 (internal quotation marks omitted). In addition, Weitzman stated that "'[c]ounsel for Plaintiff have been otherwise diligent in the prosecution of this matter, completing discovery in a timely manner and placing the case on the calendar in a timely manner." Id., ¶ 39 (internal quotation marks omitted). Thomas asserts, on information and belief, that these statements to the court were false. On December 8, 2014, Dr. Brandon filed a motion to dismiss the complaint in the Underlying Action based on the lack of service. By order dated January 9, 2015, the court granted Dr. Brandon's motion to dismiss, and denied the Weitzman Defendants' motion to renew and reargue. Although the Weitzman Defendants filed a notice of appeal, they failed to perfect the same.
Thomas maintains that the Weitzman Defendants never informed her that her claims against NYCHA and Dr. Brandon had been dismissed and that they failed to serve Richmond University Medical Center. She alleges that she "was falsely told that her case was proceeding without difficulty." Id., ¶ 48.
Thomas commenced the instant legal malpractice action on March 4, 2016. On April 8, 2016, the Weitzman Defendants filed their verified answer, which raised lack of personal jurisdiction as an affirmative defense. In addition, the Weitzman Defendants filed a demand to change venue from New York County to Monroe County, pursuant to CPLR 503, and filed a notice of removal seeking removal of the action to the United States District Court for the Western District of New York (Western District).
In the Western District, the Weitzman Defendants filed a third-party complaint against Baron Associates, the Perecman Firm, Richmond University Medical Center and Dr. Brandon (Western District Third-Party Complaint). On May 4, 2016, Thomas moved to remand the action back to state court and, on May 12, 2016, the Weitzman Defendants cross-moved, inter alia, to dismiss the action as against Weitzman, pursuant to Federal Rule of Civil Procedure (FRCP) 12 (b) (6). Baron Associates filed papers in support of Thomas's motion to remand and entered into a stipulation with the Weitzman Defendants, extending Baron Associates' time to respond to the Western District Third-Party Complaint to 30 days from receipt of the court's decision on either of the pending motions.
Baron Associates sought to convince the Weitzman Defendants to discontinue their third-party claim against it. By letters dated August 25 and November 2, 2016, Baron Associates explained that its brief representation of Thomas ended long before the Weitzman Defendants commenced the Underlying Action, and provided copies of the served notice of claim, the Disengagement Letter, and an executed closing statement. By email dated September 19, 2016, Weitzman claimed that the supporting documents were "incomplete and illegible" and requested access to the originals. McDonald affirmation, exhibit S.
By decision and order dated December 1, 2016, the Western District found that the basis for removal to federal court was improper, granted the motion to remand the action back to New York County Supreme Court, dismissed the Western District Third-Party Complaint without prejudice, and denied the remaining motions as moot.
By motion dated January 11, 2017, the Weitzman Defendants moved to dismiss the instant action.
On January 17, 2017, Weitzman Law commenced the Monroe County Action. On January 24, 2017, Weitzman Law sought to consolidate the Monroe County Action with the instant action and demanded that venue of the consolidated action be transferred to Monroe County. On March 23, 2017, Baron Associates cross-moved for an order to venue the consolidated action in New York County, or, in the alternative, dismissing the complaint. The other defendants also moved, among other things, to dismiss the complaint. By decision and order dated July 31, 2017, the court granted the motion to consolidate the Monroe County Action with the instant action as a third-party action, established New York County as the venue and denied the remaining motions without prejudice. By order dated August 14, 2017, the Supreme Court, Monroe County directed its Clerk to transfer the Monroe County action to New York County.
II. Analysis
A. The Weitzman Defendants' Motion (Motion Sequence Number 001)
i. Lack of Personal Jurisdiction
The Weitzman Defendants contend that the complaint should be dismissed because Thomas failed to properly serve the summons and complaint within 120 days from commencement of the action, as required by CPLR 306-b. They argue that service on Weitzman and Weitzman Law failed to comply with CPLR 308 and CPLR 311, respectively. Thomas counters that the motion to dismiss is not timely, that defendants chose to chart a different course by improperly removing this matter to federal court, and that they should not be rewarded with a second bite at the apple.
Notably, CPLR 311 provides for personal service upon a corporation. Because Weitzman Law is a limited liability company, CPLR 311-a is the pertinent provision.
Pursuant to CPRL 3211 (e) "an objection that the summons and complaint . . . was not properly served is waived if, having raised such an objection in a pleading, the objecting party does not move for judgment on that ground within sixty days after serving the pleading, unless the court extends the time upon the ground of undue hardship." In addition, "[a]n objection based upon a ground [of lack of personal jurisdiction] . . . is waived if a party moves on any of the grounds set forth in [CPLR 3211] (a) without raising such objection . . . ." Id. In this way, CPLR 3211(e) "require[s] a party with a genuine objection to service to deal with the issue promptly and at the outset of the action [to] ferret out unjustified objections and . . . provide for prompt resolution of those that have merit." Wade v Byung Yang Kim, 250 AD2d 323, 325 (2d Dept 1998) (internal quotation marks and citation omitted).
Generally, "defendants [do] not waive any defenses based on lack of personal jurisdiction by removing the action to federal court." Magwitch, L.L.C. v Pusser's Inc., 84 AD3d 529, 530 (1st Dept 2011). Indeed, "one of the very purposes of removal may be to have the federal court dispose of [an] objection to personal jurisdiction." Benifits by Design Corp. v Contractor Mgt. Servs., LLC, 75 AD3d 826, 828 (3d Dept 2010) (internal quotation marks and citation omitted); see also Magwitch, L.L.C., 84 AD3d at 531 (approving of Benifits By Design Corp., 75 AD3d 826).
Under the FRCP, "[a] defendant who wishes to raise the defense of no personal jurisdiction or improper venue must do so in its first defensive move, be it a Rule 12 motion or an answer." Hartling v Woodloch Pines, Inc., 1998 WL 575138, *1, 1998 U.S. Dist. LEXIS 14060, *2 (SD NY, Sept. 8, 1998, No. 97-Civ-2587 [JSM]). Pursuant to FRCP 12, a party may make a pre-answer motion to dismiss based on, among other things, lack of personal jurisdiction, insufficient process, insufficient service of process and failure to state a claim. FRCP 12 (b) (2), (4)-(6). However, one bringing a Rule 12 motion waives these defenses by failing to raise them. FRCP 12 (h) (1).
Here, the Weitzman Defendants served an answer asserting lack of personal jurisdiction as an affirmative defense. Instead of promptly moving to dismiss on that ground, they chose to remove this action to federal court. Although the removal did not waive their right to raise jurisdictional objections (see Magwitch, L.L.C., 84 AD3d at 530), their subsequent conduct did. In the Western District, the Weitzman Defendants made a Rule 12 motion to dismiss the action as against Weitzman only, on the ground that the complaint failed to state a claim against him. As in state court, under the FRCP, a failure to raise the defense of improper service in a motion to dismiss waives the said defense. Thus, the Weitzman Defendants waived the defense by failing to raise it. Compare FRCP 12 (h) (1), with CPLR 3211 (e). However, they ask that this Court grant them a second bite at the apple because the Western District denied their Rule 12 motion as moot.
It would appear that the motion in the Western District was also procedurally improper. A rule 12 motion is a pre-answer motion. However, the Weitzman Defendants served their answer prior to removing the action to the Western District.
While there are no cases addressing this particular scenario, instances where defendants have been allowed to raise a jurisdictional objection upon remand from federal court generally involve a defendant who acts with the utmost care to preserve his jurisdictional objection by asserting it at the first opportunity. For example, in Benifits By Design Corp., the Appellate Division, Third Department, held that the defendant in that action "did not submit itself to New York jurisdiction by removing the action to federal court," and "properly asserted its jurisdictional objection by motion as required by CPLR 3211 (e)," under the following circumstances:
It should be noted that the practice commentaries for CPLR 3211 (e) have anticipated this very scenario and have the following advice for the prudent litigant:
"If the ground of the jurisdictional objection is improper service and the defendant has chosen to assert it as a defense in the answer—and the answer has already been served at the time of removal . . . . the defendant should promptly, after removal, make a motion for judgment in the federal court based on the jurisdictional objection . . . . And if the defendant chooses to remove the case before answering, the defendant would do well to make a prompt motion to dismiss in the federal court after the removal, under Rule 12 (b) of the [FRCP], based on the improper service objection.John R. Higgitt, McKinney's Cons Laws of NY, 2017 Electronic Update, CPLR 3211.
"By so proceeding, the defendant should be able to preserve the objection through the process of removal to federal court, and even through the process of removal and remand, should the case be sent back."
"Defendant's notice of removal explicitly provided that the removal did not waive any available defenses or counterclaims. In federal court, defendant moved to dismiss the complaint for lack of personal jurisdiction; while that motion was pending, the parties remanded the action by a stipulation providing that all pending motions were 'disposed of as moot, without prejudice to any rights[d]efendants may have to move against [p]laintiffs' [a]mended [c]omplaint in the Supreme Court, Saratoga County.' Upon remand, defendant promptly reasserted its jurisdictional defense."75 AD3d at 828. Similarly, in Magwitch, L.L.C., the Appellate Division, First Department, affirmed dismissal for lack of personal jurisdiction, where: the plaintiff commenced an action in the Supreme Court, New York County, which the defendants removed to federal court before the expiration of their time to respond by answer or motion; the plaintiff then moved to remand the action back to state court and defendants moved to dismiss for lack of personal jurisdiction; the federal court remanded the matter, including the pending motion to dismiss, to state court; and, upon remand, the state court granted the motion to dismiss. 84 AD3d at 530-531 (1st Dept 2011). Here, unlike in Magwitch, L.L.C. and Benifits By Design Corp, the Weitzman Defendants failed to avail themselves of the first possible opportunity to challenge personal jurisdiction and, by failing to make such a prompt challenge, waived the defense.
Interestingly, the CPLR supplemental practice commentaries come to the same conclusion, noting that "the key to preservation of the personal jurisdiction objection in the removal-remand context should be a showing of compliance with both CPLR 3211(e) and Fed.R.Civ.P. 12(b) & (h)—rules that are similar in all relevant respects." Vincent C. Alexander, McKinney's Cons Laws of NY, 2017 Electronic Update, CPLR 320.
To the extent that the Weitzman Defendants argue that they raised the issue of improper service in federal court, but that the Western District did not consider these arguments, this is a mischaracterization of the record. In its decision and order granting the motion to remand, the Western District specifically noted that, although the Weitzman Defendants claimed that Thomas failed to comply with CPLR 308 and 311, "the brief indicated that Weitzman and Weitzman Law were raising the ineffective-service-of-process argument in order to show the Court that the third-party defendants were guilty of the same misconduct of which Weitzman and Weitzman Law were being sued by Thomas." McDonald affirmation, exhibit I at 11 n 7; see also Weitzman reply affirmation, exhibit K at 34-35. The Weitzman Defendants never made a timely motion to dismiss the complaint for lack of personal jurisdiction.
For the foregoing reasons, the Weitzman Defendants' motion to dismiss pursuant to CPLR 306-b is denied.
ii. Failure to State a Claim
The Weitzman Defendants argue that the complaint must be dismissed because Thomas's failure to submit to a GML § 50-h examination, prior to commencing the Underlying Action, means that she cannot demonstrate that, but for the Weitzman Defendants' alleged malpractice, she would have prevailed in the Underlying Action. In addition, they argue that Thomas's attorney-client relationship was with Weitzman Law, a limited liability company. Therefore, they contend, Thomas's claim against Weitzman must be dismissed, because the complaint fails to allege facts sufficient to pierce the corporate veil. Thomas counters that her alleged failure to appear for the 50-h examination is: irrelevant at this stage of the litigation; may be additional evidence of defendants' malpractice; and, in any event, would not have had any impact on her ability to pursue the medical malpractice claim in the Underlying Action. In addition, Thomas argues that Weitzman should not be dismissed from the action before discovery takes place, since it may demonstrate that Weitzman represented plaintiff in his individual capacity or that he dominated Weitzman law, allowing this Court to pierce the corporate veil. Thomas also points out that, at the very least, Weitzman cannot be dismissed from the action, because the third cause of action, for violation of Judiciary Law § 487, states a claim against Weitzman in his individual capacity.
"[O]n a motion to dismiss a complaint for failure to state a cause of action, the complaint must be construed in the light most favorable to the plaintiff and all factual allegations must be accepted as true." Allianz Underwriters Ins. Co. v Landmark Ins. Co., 13 AD3d 172, 174 (1st Dept 2004); see also Amaro v Gani Realty Corp., 60 AD3d 491, 492 (1st Dept 2009) ("[t]he court must . . . accord the plaintiff[] the benefit of every possible favorable inference"). The court is not permitted "to assess the merits of the complaint or any of its factual allegations, but only to determine if, assuming the truth of the facts alleged, the complaint states the elements of a legally cognizable cause of action." Skillgames, LLC v Brody, 1 AD3d 247, 250 (1st Dept 2003). "However, factual allegations that do not state a viable cause of action, that consist of bare legal conclusions, or that are inherently incredible or clearly contradicted by documentary evidence are not entitled to such consideration." Id.
A plaintiff alleging legal malpractice must "establish that counsel failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that 'but for' the attorney's negligence the plaintiff would have prevailed in the matter or would have avoided damages." Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 10 (1st Dept 2008) (internal quotation marks and citations omitted).
Here, Thomas's failure to appear at the 50-h examination does not prevent her from establishing that, but for the Weitzman Defendants' alleged malpractice, she would have prevailed in the Underlying Action. Generally, an appearance at a 50-h hearing is a prerequisite for commencing an action against a municipality, and noncompliance will result in dismissal. See General Municipal Law § 50-h (5) (stating that an action against a municipality "may not be commenced until compliance with the demand for examination . . ."); see also Ward v New York City Health & Hosps. Corp., 82 AD3d 471, 472 (1st Dept 2011) (refusing to vacate dismissal where the plaintiff "failed to comply with a precondition to commencing action by failing to appear at a General Municipal Law § 50-h hearing, after adjourning the hearing nine times"). However, the complaint alleges that the Weitzman Defendants were the ones who commenced the Underlying Action on Thomas's behalf. See complaint, ¶ 21. Thus, their argument for dismissal is, in essence, that: Thomas cannot establish that, but for the Weitzman Defendants' failure to timely serve the summons and complaint, she would have prevailed in the Underlying Action, because their failure to ensure compliance with General Municipal Law § 50-h, prior to commencing the Underlying Action, would have resulted in its dismissal. It may well be that the Weitzman Defendants were not at fault. However, they do not allege, much less present evidence of, circumstances that excuse their role in commencing the Underlying Action without first ensuring compliance with GML § 50-h. Therefore, assuming the truth of the allegations and affording Thomas the benefit of every favorable inference, her alleged failure to appear for a 50-h examination does not require dismissal of the malpractice claim at this time. See Allianz Underwriters Ins. Co., 13 AD3d at 174.
Additionally, to the extent that the Underlying Action was against non-municipal defendants Richmond University Medical Center and Dr. Brandon, Thomas's nonappearance at the 50-h hearings did not impact her ability to prevail in the Underlying Action.
Moreover, the complaint states a claim against Weitzman in his individual capacity. Weitzman may not be held personally "liable for [Weitzman Law's] obligations by virtue of his status as a member thereof." Retropolis, Inc. v 14th St. Dev. LLC, 17 AD3d 209, 210, 211 (1st Dept 2005) (internal quotation marks and citations omitted) (stating that, in order to pierce the corporate veil and hold a defendant personally liable for the actions of a corporation, the complaint must contain specific allegations demonstrating that the defendant "was actually doing business in [his] individual capacit[y], shuttling [his] personal funds in and out of the corporations 'without regard to formality and to suit [his] immediate convenience'"). However, the complaint does not seek to do so. Instead, it alleges that "Rafael Weitzman and/or Weitzman Law Offices, LLC" entered into an attorney-client relationship with Thomas and that "Rafael Weitzman and/or Weitzman Law Offices, LLC" committed legal malpractice. Complaint, ¶¶ 19-30, 50-72. Because the Weitzman Defendants do not offer any documentary evidence (i.e., a retainer agreement) to contradict these allegations, this Court must assume that they are true. Skillgames, LLC, 1 AD3d at 250. Therefore, at this preliminary stage of the litigation, this Court assumes that Weitzman and/or Weitzman Law were in an attorney-client relationship with Thomas, allowing her to maintain a legal malpractice claim against both. Cf. Shaya B. Pac., LLC v Wilson, Elser, Mokowitz, Edelman & Dicker, LLP, 38 AD3d 34, 39 (2d Dept 2006) (declining to "place on the plaintiff the initial burden of pleading sufficient evidentiary facts to establish that the scope of the defendant's representation" included matters relating to the alleged malpractice).
In addition, the complaint alleges that Weitzman made false statements to the court which, if true, may subject him to liability in his individual capacity. See Judiciary Law § 487 (providing that "[a]n attorney . . . who: (1) is guilty of deceit, . . . with intent to deceive the court or any party . . . forfeits to the party injured treble damages . . .").
For the foregoing reasons, the Weitzman Defendants' motion to dismiss the complaint is denied in its entirety.
This Court takes note of several arguments the Weitzman Defendants raise on reply. First, they argue that the complaint should be dismissed because they never substituted Thomas's original attorneys, Baron Associates and the Perecman Firm. Not only is the argument impermissibly raised for the first time on reply, but, as explained below, it is without merit. See Givoldi, Inc. v United Parcel Serv., 286 AD2d 220, 220 (1st Dept 2001) (rejecting an argument raised for the first time in a reply brief). In addition, they argue that Thomas's failure to dispute the disparaging statements that Weitzman makes about her in his affirmation in support of the motion to dismiss amounts to an admission that she was responsible for the injuries that gave rise to the Underlying Action. Thus, they argue, she cannot prove that, but for the alleged malpractice, she would have prevailed in the Underlying Action. Again, not only is the argument impermissibly raised for the first time on reply, but it is completely devoid of legal merit, since Weitzman's affirmation is neither a pleading nor a notice to admit requiring Thomas to admit or deny its contents. See CPLR 3123, 3018.
iii. Change of Venue
The Weitzman Defendants argue that New York County, designated in the summons and complaint as the place of trial, is improper because Weitzman, the only party with ties to New York City, has been wrongfully added as a party to this suit.
"Except where otherwise prescribed by law, the place of trial shall be in the county in which one of the parties resided when it was commenced . . . ." CPLR 503 (a).
Here, it is undisputed that Weitzman resides in New York County. See complaint, ¶ 3; answer, ¶ 4. Therefore, New York County is a proper venue for trial. Accordingly, the Weitzman Defendants' motion to change venue is denied.
iv. Disqualification of Plaintiff's Attorney
The Weitzman Defendants contend that Thomas may have a malpractice claim against her attorneys, the Perecman Firm, for its alleged failure to permit the Weitzman Defendants to take over as Thomas's attorneys of record in the Underlying Action. They argue that this necessitates the Perecman Firm's disqualification because: (1) there is a significant risk that its representation of Thomas will be materially limited by its own interest; (2) a lawyer from the Perecman Firm will be a witness in the action; and (3) the representation is violative of ethical, legal, and/or fiduciary duties to a client or a former client. Thomas responds that the argument is factually and legally without merit.
An attorney may not continue to represent a plaintiff in an action, if he "possesses a financial interest in a lawsuit akin to that of a defendant." Greene v Greene, 47 NY2d 447, 452 (1979). Nor may an attorney continue with a representation in violation of the advocate witness rule, when "it is obvious that he or a lawyer in his firm ought to be called as a witness on behalf of his client." H.H.B.K. 45th Street Corp. v Stern, 158 AD2d 395, 396 (1st Dept 1990) (internal quotation marks and citation omitted). To require disqualification, the attorney's testimony must be necessary, not merely relevant. See id. In addition, an attorney may not continue in his representation of a client where: "(1) [there exists] a prior attorney-client relationship between the moving party and opposing counsel, (2) . . . the matters involved in both representations are substantially related, and (3) . . . the interests of the present client and former client are materially adverse." Pellegrino v Oppenheimer & Co., Inc., 49 AD3d 94, 98 (1st Dept 2008) (internal quotation marks and citation omitted).
In a motion to disqualify opposing counsel, the movant bears the burden of "present[ing] facts which would support the allegation of a conflict . . . ." Strongback Corp. v N.E.D. Cambridge Ave. Dev. Corp., 32 AD3d 793, 794 (1st Dept 2006). "Courts adjudicating disqualification motions must be mindful of the possibility that the motion is made for improper reasons, to 'stall and derail the proceedings, redounding to the strategic advantage of one party over another.'" Id., quoting S & S Hotel Ventures Ltd. Partnership v 777 S. H. Corp., 69 NY2d 437, 443 (1987).
Here, the Weitzman Defendants fail to satisfy their burden of demonstrating that the Perecman Firm should be disqualified. The Weitzman Defendants state, in a conclusory manner, that "all the criteria's [sic] are present to disqualify Plaintiff's counsel" for a conflict with an existing or past client and that "the testimony of one or more of The Perecman Firm, P.L.L.C.'s attorneys is both necessary and substantially likely to prejudice [Thomas's] case." Weitzman Defendants' brief in support at 20. They make no attempt to demonstrate an existing conflict with a past or present client or to explain why the Perecman Firm's testimony would be necessary in the instant action. Therefore, the Weitzman Defendants fail to establish either ground for disqualification. See S & S Hotel Ventures Ltd. Partnership, 69 NY2d at 444-445 (internal quotation marks and citation omitted) (reversing disqualification, where movant failed to establish that the "case would be tainted by the participation of an attorney or a firm"); see also Rivas v Raymond Schwartzberg & Assoc., PLLC, 52 AD3d 401, 402 (1st Dept 2008) (holding that disqualification was "[un]warranted under the advocate-witness rule in light of defendant's failure to demonstrate that the attorney testimony was necessary"); Strongback Corp., 32 AD3d at 794 (denying defendant's motion to disqualify plaintiff's attorneys, whom defendant impleaded as additional defendants, where defendant failed to demonstrate that the attorney's testimony would be necessary).
In addition, the Weitzman Defendants fail to establish that disqualification is required due to the Perecman Firm's self-interest in avoiding a malpractice claim. Neither fact nor law supports the Weitzman Defendants' position that they were never substituted for the Perecman Firm as Thomas's attorneys in the Underlying Action.
The Weitzman Defendants' own submissions demonstrate that they took over as Thomas's attorneys. See Weitzman reply affirmation, exhibit B (letter from Weitzman Defendants, dated April 26, 2012, that: informed the Perecman Firm that they would be substituting as Thomas' counsel; enclosed a letter from Thomas, discharging the Perecman Firm as her attorneys; and enclosed the Change of Attorney Form). Importantly, the Change of Attorney Form, annexed to Weitzman's affirmation in reply, is executed by Thomas, Weitzman Law, as "incoming attorney," and the Perecman Firm, as "outgoing attorney." Id. Despite this evidence, the Weitzman Defendants deny that the Perecman Firm returned the executed Change of Attorney Form and insist that they were never substituted as attorney for Thomas. As evidence of this, they point to the fact that "Defendant Weitzman Law Offices LLC never paid The Perecman Firm's outstanding disbursements" (Weitzman reply affirmation, ¶ 16) and that the Perecman Firm never transferred Thomas's case file. However, none of this nullifies Thomas's discharge of the Perecman Firm or the executed Change of Attorney Form. See Farage v Ehrenberg, 124 AD3d 159, 165 (2d Dept 2014) ("[a]n affirmative discharge of an attorney by the client is immediate").
The Weitzman Defendants deny that the Perecman Firm returned an executed Change of Attorney Form, but submit the executed form in support of their motion. Weitzman reply affirmation, exhibit B. They do not explain this obvious discrepancy.
To the extent that defendants argue that the Perecman Firm never withdrew as the attorney of record, as required by CPLR 321, the argument is wholly without merit. Generally, "from the standpoint of adverse parties, counsel's authority as an attorney of record in a civil action continues unabated until the withdrawal, substitution, or discharge is formalized in a manner provided by CPLR 321." Id; see CPLR 321 (b) (providing that "an attorney of record may be changed by filing with the clerk [an executed] consent to the change" or by "by order of the court in which the action is pending"). Here, the Weitzman Defendants, and not the Perecman Firm, were Thomas' attorneys of record in the Underlying Action, because the Weitzman Defendants were the ones to commence and to litigate the Underlying Action on Thomas's behalf. See Rodriguez v City of New York, 66 NY2d 825, 827 (1985) (explaining that the appearance of an attorney's name on the retainer statement did not make him the attorney of record because his "name never appeared on any of the pleadings, motion papers, affidavits, briefs or record in plaintiff's action"); see also Cabukyuksel v Ascot Props., LLC, 99 AD3d 405, 407 (1st Dept 2012) (stating that a law firm "never commenced an action against [a defendant] and thus was never attorney of record" in that action). Therefore, CPLR 321 did not govern the Perecman Firm's discharge as Thomas's counsel. In any event,
"[t]he purpose of CPLR 321 (b) is to afford protection to adverse parties, by eliminating disputes and uncertainty as to whether and when the authority of an attorney representing an opponent terminated, and it has generally been construed to establish the
authority of discharged counsel as to adverse parties and not as to the very party who discharged the attorney."MacArthur v Hall, McNicol, Hamilton & Clark, 217 AD2d 429, 429-30 (1st Dept 1995) (internal quotation marks and citations omitted) (finding that, "notwithstanding the failure to comply with CPLR 321(b), [discharged attorney] was under no duty to continue litigating the assigned action on plaintiff's behalf, the assignment being clear that plaintiff had retained another attorney for that purpose and that defendant had consented to the substitution"). Therefore, the Weitzman Defendants replaced the Perecman Firm as Thomas's attorneys before commencing the Underlying Action. Thus, the Weitzman Defendants fail to demonstrate that Thomas has a malpractice claim against her attorneys requiring their disqualification.
For the foregoing reasons, the Weitzman Defendants' motion to disqualify the Perecman Firm as Thomas's counsel is denied.
B. Third-Party Defendant Baron Associates' Motion (Motion Sequence Number 002)
i. Motion to Dismiss the Third-Party Complaint
Baron Associates contends that the third-party complaint should be dismissed as against it, because it fails to state a claim for declaratory relief and fails to set forth facts to support Weitzman Law's claim for indemnification. It argues that Thomas' damages are attributable solely to the Weitzman Defendants and that the Disengagement Letter establishes that Baron Associates ended its attorney-client relationship with Thomas before the Weitzman Defendants commenced the Underlying Action. The Weitzman Defendants counter that the motion must be denied, because: information necessary to oppose the motion is not in their possession; the documents submitted in support of Baron Associates' motion are incomplete and illegible copies; and Baron Associates approached this Court with unclean hands.
As explained above, on a motion to dismiss for failure to state a claim, the court must give the plaintiff the benefit of every favorable inference (Allianz Underwriters Ins. Co., 13 AD3d at 174), unless the allegations "consist of bare legal conclusions, . . . or [are] clearly contradicted by documentary evidence . . . ." Skillgames, LLC, 1 AD3d at 250 (citation omitted). To dismiss the complaint based on documentary evidence, "the documentary evidence [must] utterly refute[] plaintiff's factual allegations, conclusively establishing a defense as a matter of law." Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 (2002) (citation omitted).
Pursuant to CPLR 3211 (d), the court may deny a motion to dismiss pending further discovery on the ground "that facts essential to justify opposition may exist but cannot be stated." The party opposing the motion to dismiss should "specify what facts warrant further discovery [and] how they are relevant to his opposition to the motion to dismiss . . . ." Warshaw Burstein Cohen Schlesinger & Kuh, LLP v Longmire, 106 AD3d 536, 537 (1st Dept 2013); see also Cracolici v Shah, 127 AD3d 413, 413 (1st Dept 2015) ("[t]he mere hope that discovery may reveal [helpful information], does not warrant denial of the motion").
"[A] third-party action for contribution or indemnification [is] not viable [where] third-party defendants [do] not share in defendant's responsibility for plaintiff's alleged loss . . . ." See Rivas v Raymond Schwartzberg & Assoc., PLLC, 52 AD3d 401, 401 (1st Dept 2008) (affirming dismissal of third-party complaint for contribution and indemnification, brought by defendant attorney being sued for malpractice, where third-party defendant did not represent plaintiff "as defendant's successor until after expiration of the limitations period on the [underlying] personal injury claim").
Here, the precise nature of Weitzman Law's claim against Baron Associates is vague. It may be read as seeking a declaration of its right to be indemnified by Baron Associates or a claim for indemnification and/or contribution against Baron Associates. Whatever the nature of the claim, the third-party complaint fails to state a viable cause of action against Baron Associates. The pleading is devoid of any factual allegations linking Baron Associates to Thomas's alleged injury in the instant malpractice action. In short, the third-party complaint's "bare legal conclusions" fail to state a claim against Baron Associates. Skillgames, LLC, 1 AD3d at 250.
Moreover, the Disengagement Letter demonstrates that Baron Associates ended its representation of Thomas approximately nine months before the Weitzman Defendants assumed that role and commenced the Underlying Action. As with the Perecman Firm, Baron Associates was not required to comply with CPLR 321 to withdraw as Thomas's attorneys, because it was not the attorney of record in the Underlying Action. Its "name never appeared on any of the pleadings, motion papers, affidavits, briefs or record." Rodriguez, 66 NY2d at 827. Nor was Baron Associates required to file a closing statement with the Office of Court Administration, pursuant to 22 NYCRR § 603.25 (b), to formally end its representation of Thomas. The rule is "regulatory in nature, . . . designed for the supervision of attorneys rather than to determine their status as the attorney of record." Rodriguez, 66 NY2d at 827. Accordingly, Baron Associates ended its representation of Thomas before the Weitzman Defendants commenced the Underlying Action and, thus, "did not share in defendant's responsibility for plaintiff's alleged loss." Rivas, 52 AD3d at 401.
Rodriguez discusses the application of NYCRR § 603.7, which was renumbered as 22 NYCRR § 603.25, effective October 1, 2016.
Next, the Weitzman Defendants contend that Baron Associates' motion should be denied, because it is in violation of Judiciary Law § 487, which provides penalties for intentionally deceiving the court. This Court can find no basis for this assertion. The third-party complaint does not contain a Judiciary Law § 487-based cause of action or any allegations to support such a claim. The Weitzman Defendants' opposition to the instant motion alludes to acts of fraud and deceit, without any factual allegations describing these acts. See Weitzman affirmation in opposition at 6-7. Accordingly, the Weitzman Defendants fail to demonstrate the applicability of Judiciary Law § 487. See Agostini v Sobol, 304 AD2d 395, 396 (1st Dept 2003) ("The court properly dismissed the cause of action alleging a violation of Judiciary Law § 487, since plaintiff did not sufficiently plead facts demonstrating that defendant attorneys had the 'intent to deceive the court or any party,'" quoting Judiciary Law § 487 [1]).
To the extent that the Weitzman Defendants argue that the motion is premature, they fail to "specify what facts warrant further discovery." Warshaw Burstein Cohen Schlesinger & Kuh, LLP, 106 AD3d at 537. Instead, this portion of the opposition merely quotes and cites extensively to cases discussing CPLR 3211 (a) (7) and 3211 (d), and concludes that "the above controlling authority" requires denial of the motion: Weitzman affirmation in opposition at 8.
For the foregoing reasons, third-party defendant Baron Associates' motion to dismiss the third-party complaint as against it is granted.
ii. Sanctions
Baron Associates seeks costs and sanctions against the Weitzman Defendants because, despite informing them, on several occasions, that the claim against Baron Associates was without merit, the Weitzman Defendants refused to discontinue the third-party action. The Weitzman Defendants counter that, to the extent Baron Associates seeks sanctions in connection with the Western District Action, such relief should have been sought in the federal court. In addition, they argue that Baron Associates is guilty of frivolous conduct because it refused to provide the original documents to demonstrate that it ended its attorney-client relationship with Thomas and failed make a reasonable inquiry into the viability of Thomas's claims in the Underlying Action.
The court has wide discretion in determining whether to award costs, including reasonable attorneys' fees, or impose sanctions for frivolous conduct. See 22 NYCRR 130-1.1 (a); see also Pickens v Castro, 55 AD3d 443, 444 (1st Dept 2008). "[C]onduct is frivolous if: (1) it is completely without merit in law . . .; (2) it is undertaken primarily to delay or prolong the resolution of the litigation . . .; or (3) it asserts material factual statements that are false." 22 NYCRR 130-1.1 (c). Among other factors, "[i]n determining whether the conduct undertaken was frivolous, the court shall consider . . . whether or not the conduct was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel or the party." Id.
Here, Baron Associates no longer represented Thomas at the time that the Weitzman Defendants commenced the Underlying Action. As explained above, the Weitzman Defendants' arguments to the contrary are completely without merit. Despite having had ample opportunity to do so, the Weitzman Defendants have yet to articulate any factual or legal basis for assigning any fault to Baron Associates. Even assuming that the Weitzman Defendants were unaware that their claim against Baron Associates was meritless, Baron Associates put them on notice of this fact on August 25, 2016, after the Weitzman Defendants brought a third-party action against it in the Western District. Nonetheless, the Weitzman Defendants opted to bring the Monroe County Action and to oppose Baron Associates' motion to dismiss.
The frivolity of the Weitzman Defendants' position is demonstrated by their submissions to this Court. Their opposition fails to respond to the arguments raised by Baron Associates and largely consists of, what appears to be, a sloppy "copy/paste" job of the pertinent legal standards, followed by conclusory statements that Baron Associates' motion should be denied. These conclusory assertions are interspersed with a liberal sprinkling of aspersions cast against their former client as well as Baron Associates, which allegedly conspired to mislead this court and to "inveigle [the Weitzman Defendants] in order to maliciously sue [the Weitzman Defendants] for professional malpractice." Weitzman affirmation in opposition at 6. No factual basis is provided for these allegations.
The Weitzman Defendants' opposition also contains vague, half-formed arguments, which only serve to underscore the frivolity of their position. For example, they argue that Baron Associates' submissions are incomplete or illegible, stating that: "[t]he alleged Notice of Claim is incomplete and has been improperly scanned. The Postage receipt too, is incomplete and was intentionally scanned on top of the Notice of Claim rather than on a separate page to obscure the notice of claim. The alleged closing Statement Lacks a filing stamp." Weitzman affirmation in opposition at 9. However, they do not explain how these alleged defects translate into a viable claim against Baron Associates. Another, and more disturbing, example is the Weitzman Defendants' contention that "Third Party Defendants never disputes [sic] [the Weitzman Defendants'] statements that Plaintiff Thomas' [sic] claims are statutorily, barred, fraudulent and failed to reasonably inquire into same, consistent with legal and ethical requirements." Id. at 11. This allegation is particularly troubling, as it implies that the Weitzman Defendants commenced the Underlying Action, certifying that that there was a reasonable basis for the action, knowing that it was "statutorily barred" and "fraudulent." Id.
The Weitzman Defendants have had ample time to investigate the legal and factual bases of their claim against Baron Associates. In pursuing a claim that "is completely without merit in law," Weitzman Law and Weitzman, as its attorney, are guilty of frivolous conduct. 22 NYCRR 130-1.1 (c); see Nachbaur v American Tr. Ins. Co., 300 AD2d 74, 75 (1st Dept 2002) (imposing sanctions and awarding attorneys' fees for prosecuting a frivolous appeal, where the briefs submitted, which were "completely devoid of relevant discussion, . . . vividly reflect[ed] . . . the appeal's utter lack of even arguable merit" and where the plaintiff's attorney insulted opposing counsel, "ma[de] baseless, serious accusations against the motion court, ma[de] unsupported accusations against defendant, seriously mischaracterize[d] the record and ma[de] no reference to recent adverse authority"); see also Cattani v Marfuggi, 26 Misc 3d 1053, 1059 (Sup Ct, NY County 2009), affd 74 AD3d 553 (1st Dept 2010) (awarding reasonable attorneys' fees and imposing sanctions, where "the lack of merit was brought to plaintiff's and his counsel's attention, and they persisted in maintaining the action"). Therefore, to the extent that Baron Associates seeks reasonable expenses and attorneys' fees arising from the Monroe County Action and the instant action, including expenses incurred in connection with the instant motion, its motion is granted. That branch of the motion seeking sanctions is denied.
Therefore, in light of the foregoing, it is hereby:
ORDERED that the motion of defendants Raphael Weitzman and Weitzman Law Offices, L.L.C., to dismiss the complaint, change venue and disqualify plaintiff's attorneys (motion sequence number 001) is denied in its entirety; and it is further
ORDERED that the branch of the motion by third-party defendant Baron Associates, P.C. to dismiss the third-party complaint (motion sequence number 002) is granted and the third-party complaint is dismissed in its entirety as against said third-party defendant, with costs and disbursements to said third-party defendant as taxed by the Clerk of the Court, and the Clerk is directed to enter judgment accordingly in favor of said third-party defendant; and it is further
ORDERED that the third-party action is severed and continued against the remaining third-party defendants; and it is further
ORDERED that the branch of the motion (motion sequence 002) by third-party defendant Baron Associates, P.C. seeking reasonable expenses and attorneys' fees incurred in connection with the Monroe County action and the instant action, including the instant motion, is granted and defendants Weitzman Law Offices, L.L.C. and Raphael Weitzman, Esq. and third-party plaintiff Weitzman Law Offices, L.L.C. shall, due to their frivolous conduct as defined in Section 130-1.1 (c) of the Rules of the Chief Administrator, jointly and severally reimburse third-party defendant Baron Associates, P.C. for such expenses and attorneys' fees; and it is further
ORDERED that the issue of reasonable expenses incurred and reasonable attorneys' fees incurred by Baron Associates, P.C. in defending the claims by Weitzman Law Offices, L.L.C. is referred to a Special Referee to hear and report; and it is further
ORDERED that counsel for the third-party defendant shall, within 30 days from the date of this order, serve a copy of this order with notice of entry, together with a completed Information Sheet (copies are available in Room 119M at 60 Centre Street and on the Court's website at www.nycourts.gov/supctmanh under "References") upon the Special Referee Clerk in the Motion Support Office (Room 119M), who is directed to place this matter on the calendar of the Special Referee's Part for the earliest convenient date; and it is further
ORDERED that counsel are directed to appear for a discovery conference at 80 Centre Street, Room 280, on June 26, 2018, at 2:15 P.M.; and it is further
ORDERED that this constitutes the decision and order of the court. 3/26/2018
DATE
/s/ _________
KATHRYN E. FREED, J.S.C.