December 3, 2007.
Defendants move, pursuant to CPLR 3211 (a) (5) and (a) (8), for an order dismissing the complaint on the grounds that plaintiff Chahee Pickard (Pickard) failed to properly serve them and that the instant action is barred by the doctrine of collateral estoppel and/or res judicata.
Defendant Tarnow and Juvelier, a law firm, is a New York limited liability partnership. Defendant Herman Tarnow (Tarnow) is an attorney and one of Tarnow and Juvelier's partners. On August 3, 2001, Pickard retained Tarnow to represent her in a matrimonial case against her soon-to-be ex-husband.
In this action, Pickard alleges that, during the course of Tarnow's representation, he committed multiple acts of legal malpractice. Specifically, the complaint alleges, inter alia, that (1) Tarnow failed to properly object to evidence and arguments regarding a Special Referee's decision that had been rejected by the court, (2) negligently allowed Pickard to lose the opportunity for her husband to pay her legal fees, (3) failed to offer expert testimony regarding the present value of her holdings in a marital asset, KP Holdings, (4) failed to offer evidence of tax implications affecting Pickard, (5) failed to offer sufficient proof to allow Pickard to obtain sufficient maintenance, (6) failed to establish Pickard's right to health insurance, (7) failed to make himself available to Pickard and berated and intimidated her, (8) was unprepared and neglectful and trials and hearings, (9) abandoned Pickard's case, (10) failed to procure a stipulation to enable Pickard to enforce an agreement by her husband to pay Pickard's rent and moving expenses, and (11) failed to pursue settlement negotiations.
Before she filed this action, Pickard sought to arbitrate a fee dispute with Tarnow who received $75,000 in fees from her former husband and sought an additional $96,640 from her. In her November 24, 2003 Request for Fee Arbitration, Pickard, who was pro se, maintained that Tarnow had committed various acts of malpractice, such that she should not have to pay him the legal fees. Specifically, she alleged,inter alia, that Tarnow abandoned her case, was abusive throughout his representation of her, refused to consult with her regarding documents submitted to the court, and failed to act or took action which caused her to lose money.
In a chronology submitted in the arbitrators, Pickard alleged substantially the same acts of malpractice that form the basis for this action, including Tarnow's failure to object to a Special Referee's decision which was rejected by the court, his failure to procure a stipulation to enable Pickard to enforce an agreement by her husband to pay Pickard's rent and moving expenses, his failure to protect her rights to health insurance, his negligent conduct during the trial, his failure to submit proof to support an appropriate award of maintenance, his failure to pursue settlement negotiations, his failure to quantify the value of Pickard's interest in KP Holdings, his neglect of Pickard's case and his eventual abandonment of it. A document submitted to the arbitrator entitled "Summary of Discounts" alleges, as does the complaint in this action, that Tarnow "abandoned her" and "berated and intimidated her."
By determination dated June 2, 2004, the arbitrators found that "based on a voluminous record," that Tarnow was entitled to $80,438.12 out of his original demand of $97,503.12.
Defendants argue that, as a threshold matter, the complaint should be dismissed because the court has no jurisdiction over them, due to Pickard's failure to properly serve them. Defendants further assert that, even if this court has jurisdiction over them, the action must nonetheless be dismissed, as it is barred by the doctrine of collateral estoppel and/or res judicata, which preclude a party from re-litigating in a subsequent action an issue clearly raised in a prior action and decided against that party.
Pickard counters that service upon defendants was proper, as established by the affidavits of service. Pickard further maintains that the doctrines of res judicata and collateral estoppel are not applicable as the issues of legal malpractice were not adjudicated in the fee arbitration. Pickard also argue that the arbitration was conducted pursuant to 22 NYCRR 137 (Part 137), which expressly states that it does not apply to substantial legal questions, including legal malpractice.
As for the threshold issue regarding personal jurisdiction, it appears from the submitted affidavit of service that Tarnow was served in accordance with CPLR 308(2) since the summons and notice were delivered to his actual place of business to a receptionist, who qualifies as a person of suitable age and discretion, and that follow-up mailing was made to him at his actual place of business in an envelope marked "personal and confidential."
With respect to the law firm of Tarnow and Juvelier, which is a limited partnership, service may be made by service on one of the general partners by the deliver and mail method set forth in CPLR 308(2). See CPLR 310-a ("personal service upon any . . . limited partnership shall be made by delivering a copy personally to any . . . general partner); Lamba v. LaSala, 10-19-01, NYLJ, 21 (col. 1). Since it appears that Tarnow is a general partner, service was properly made on the law firm as well.
Although the court has jurisdiction over the defendants, the action against them must be dismissed as barred under the doctrine of collateral estoppel based on the determination in the arbitration that Tarnow was entitled to recover fees for his legal services despite Pickard's assertion in that proceeding of defects in Tarnow's representation of her.
Collateral estoppel or "issue preclusion" prevents a party from relitigating an identical issue which has previously been decided against it in a prior action in which it had a fair opportunity to fully litigate the issue. See Allied Chemical v Niagara Mohawk Power Corp., 72 NY2d 271 (1988), cert denied, 488 US 1005 (1989). The party seeking to invoke the doctrine of collateral estoppel must show that the issue was necessarily decided in the earlier action, while the party who opposes the application of collateral estoppel must demonstrate that it did not have a full and fair opportunity to contest the prior determination. Buechel v Bain, 97 NY2d 295, 303-04 (2001).
Here, defendants have met their burden of demonstrating that the issue of malpractice was necessarily decided during the arbitration of the fee dispute in which Pickard contested the fee based on substantially the same alleged acts of malpractice that provide the basis for this action. See Weinstein v. Cohen, 2007 WL 3407107, ____ AD2d ____ (2nd Dept 2007) (holding that plaintiff's action alleging that defendants charged her excessive fees and committed legal malpractice in connection with their representation of her in a matrimonial action was precluded by prior determination that defendants were entitled to a substantial portion of the total fees they sought in a fee arbitration requested by plaintiff pursuant to 22 NYCRR Part 136); Altamore v Friedman, 193 AD2d 240, 244 (2nd Dept 1993), lv dismissed, 83 NY2d 906 (1994) (holding that client was barred from bringing a legal malpractice action against his attorney after an arbitration award was issued in attorney's favor in connection with a fee dispute since both the fee arbitration and the legal malpractice action shared "at the core, claims of attorney malpractice"); Kinberg v. Garr, 28 AD3d 245, 246(1st Dept 2006)("[p]laintiff's adverse determination in defendants' prior action to recover fees for the rendering of professional services precludes a finding of malpractice with regard to the same services); Djeddah v. Starr, 306 AD2d 59 (1st Dept), lv denied, 100 NY2d 516 (2003)(client's arguments based on claims of malpractice were barred by prior unappealed order recognizing attorney's charging lien and referring the matter for an assessment).
Moreover, although the arbitrators did not directly state whether their determination included the malpractice issues, all of the allegations set forth by Pickard in her Fee Dispute Application and in her supporting documentation focus on Tarnow's alleged misconduct in his representation of her in her divorce case. In addition, it can inferred from the arbitrators' statement that their decision was "based on a voluminous record," that they reviewed and considered all of the evidence before them.
Furthermore, Pickard does not argue that she did not have a full and fair opportunity to litigate the issue of Tarnow's alleged malpractice in the arbitration. In fact, the exhibits submitted by defendants in support of this motion, indicate that Pickard provided the arbitrators with detailed submissions to support her assertion that Tarnow had committed malpractice and therefore should not be awarded a fee.
Pickard maintains, however, that the arbitrators did not have authority to consider the issues of legal malpractice, such that there was no adjudication of those issues in the fee arbitration. Specifically, Pickard contends that the arbitration was conducted pursuant to 22 NYCRR 137 (Part 137), which "establishes the New York State Fee Dispute Resolution Program, which provides for the informal and expeditious resolution of fee disputes between attorneys and clients through arbitration and mediation," and which excludes "claims involving substantial legal questions, including professional malpractice or misconduct." ( 22 NYCRR 137.1(b)(3)).
This argument is unavailing. Since Part 137 is applicable to cases "where representation has commenced on or after January 1, 2002" ( 22 NYCRR 137.1(a)), it does not apply to the parties' fee arbitration, as it is undisputed that defendants commenced their representation of Pickard prior to that effective date. Rather, the provisions of 22 NYCRR 136 (Part 136) continue to apply to fee disputes in all domestic relations matters subject to that Part in which representation began prior to January 1, 2002.
Unlike the bar to adjudicating legal malpractice claims contained in Part 137, Part 136 contains no such limitation. Pursuant to Part 136.4(b), "[t]he Administrative Judge may decline to accept or continue to arbitrate a dispute in which substantial legal questions are raised in addition to the basic fee dispute." Here, as the arbitration was held despite the issues of malpractice raised by Pickard, the arbitrators were entitled to consider these issues.
Accordingly, as defendants have met their burden of demonstrating that the identical issue of malpractice was necessarily decided in connection with the arbitration, and as Pickard has not shown that she did not have a full and fair opportunity to be heard on the issue, the doctrine of collateral estoppel bars this action for legal malpractice.
In view of the above, it is
ORDERED that the motion to dismiss is granted and the complaint is dismissed with costs and disbursements to defendants as taxed by the Clerk of the Court; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly.