Matos v Kucker & Bruh, LLP

2007 NY Slip Op 34216(U)

December 28, 2007
Supreme Court, New York County
Docket Number: 0603307/2006
Judge: Doris Ling-Cohan
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I
SUPREME COURT OF THE STATE OF NEW Y - NEW YORK COUNTY
bh bv 5 L / y - [& AN4
PR PART 3Lm
Index Number : 603307/2006
MATOS, BETTY
i X NO.
vs
KUCKER & BRUH, LLP [ION DATE ~

Sequence Number : 001

rlON SEQ. NO.
DISMISS ACTION
TlON CAL. NO.

The following papers, numbered 1 to were read on this motion tolfor

PAPERS NUMBERED

Notice of Motion/ Order t o Show Cause - Affidavits - Exhibits ...

Answering Affidavits - Exhibits -.

e plying Affidavit s -A-

Zross-Motion: I ' - Yes G-60

Check one: _ . FINAL DISPOSITION d N O N - F I N A L DISPOSITION

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SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORJS : IAS PART 36
l----___________l”____I_________________-

BETTY MATOS,
Plaintiff, INDEX NO.

-against-
’ZQ Motion Seq. No:
KUCKER & BRUH, LLP, 001 & 002
SILVERSMITH & VERAGA, LLP and
JASON S. GARBER, ESQ.,
Defendant. -
X
r _ - _ _ _ _ _ _ l l - _ _ _ _ _ _ _ _ _ _ _ r _ _ _ _ _ _ _ _ _ _ r _ _ _ _ _ -

DORIS LING-COHAN, J.:

Motion sequence numbers 001 and 002 are consolidated herein for disposition.

In mot. seq. no. 001 defendant Silversmith & Veraja, LLP (“S&V”) moves pursuant to
CPLR 321 l(a) (1) and (7) for an order dismissing plaintiffs complaint against it. In mot. seq.

no. 002 defendants Kucker & Bruh, LLP (“K&B”) and Jason S. Garber, Esq. (collectively the

“K&B defendants”) move pursuant to CPLR 321 l(a) (7) for an order dismissing plaintiffs

complaint.

This is an action for legal malpractice arising out of defendants’ representation of

plaintiff, Betty Matos, in connection with certain property damage to plaintiffs residence

allegedly caused by vibrations emanating from road work and construction on the abutting

thoroughfare.

In October 2003 plaintiff, through defendant Garber, retained S&V to represent her in the

underlying action against the City and the Metropolitan Transportation Authority. On March 4,

2004, S&V filed a complaint and an order to show cause on plaintiffs behalf in Supreme Court,

Richmond County. The cornplaint sought, inter alia, an injunction preventing the MTA from

running its buses over utility cuts in the roadway in front of plaintiff’s home at speeds in excess
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of those permitted by the City, a direction that the MTA reduce the number of buses passing on

the route in front of plaintiffs house, and an order requiring the City to repair the utility cuts.

The complaint also sought damages of $500,000, The order to show cause moved for an order

granting the injunctive relief sought in the complaint. On March 5 , 2004 Mr. Garber left S&V

and joined the firm of K&B taking plaintiffs case with him. K&B was formally substituted for

S&V on March 16, 2004.

By decision and order dated June 25,2004 the court (Mega, J) granted plaintiffs order to

show cause to the extent of directing the Transit Authority (which had been substituted for the

MTA) to monitor the speeds of its buses and to take all appropriate action to insure that

applicable speed limits were being observed (see motion sequence no. 00 1, Furman February 15,

2007 supporting affirmation, exhibit H). The court denied plaintiffs remaining requests holding

that she was not entitled to the drastic remedy of a mandatory injunction directing the City to

repave the road and reduce the number of express buses (id.). Both sides appealed. The

Appellate Division reversed that portion of Justice Mega’s decision which granted relief to

plaintiff, finding that she failed to sustain her burden to entitle her to such drastic and

extraordinary relief (see Matos v. Citv of New York, 21 AD3d 936 [2d Dept 20051). Plaintiff

was directed to pay costs to the Transit Authority (id.).

In April 2005 the Transit Authority moved for summary judgment. By decision and order

dated May 12,2005 Justice Mega granted the motion, finding that the complaint alleged a

nonjusticiable controversy with respect to the Transit Authority because the requested relief

would involve the court in the routing and scheduling of the Transit Authority’s buses (see

Furman affirmation, exhibit J). In July 2006, the City moved for summary judgment. Plaintiff

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cross-moved for leave to conduct additional discovery. By decision and order dated August 8,

2006, Justice Mega granted the City’s motion based on absence of proof of causation and denied

plaintiffs cross-motion (d.,

exhibit K).

Plaintiff commenced this action in September 2006. The complaint asserts 40 causes of

action alleging legal malpractice, violations of General Business Law (“GBL”) 5 349, violations

of Judiciary Law 4 487, and claims for disgorgement of fees and punitive damages (icJ.,exhibit

A). According to plaintiff:

The gravamen of Plaintiffs[sic] claim is premised on the over-all failure of

Defendants to obtain meaningful ‘informed consent’ from the Plaintiff throughout
[their representation of plaintiffl including wilfully misleading her concerning her
claim. This conduct, coupled with Defendants[sic] continued abuse of their
respective billing process. [sic] excessive, wantonly careless and abusive billing
practices, caused the Plaintiff to sustain significant economic damages in her
paying unnecessary and unneeded legal fees.

(see motion seq. no. 00 1, plaintiffs memorandum of law, p 2).

In support of its motion to dismiss the complaint, S&V contends that plaintiff has failed

to plead the necessaxy elements of a legal malpractice claim such as negligence, proximate cause

and actual damages resulting from the attorney’s actions. According to S&V, it cannot be found

liable for damages because it was substituted out before the underlying order to show cause was

even opposed and before a response to the underlying complaint was interposed. S&V contends

that plaintiffs claim that the underlying action was without merit is belied by the fact that Justice

Mega initially found some merit to plaintiffs claims. Next, S&V argues that plaintiff fails to

state a cause of action under GBL § 349 because that statute, which is aimed at protecting

consumers at large and the general public from fraud, is not applicable herein. S&V argues

further that the complaint fails to state a viable claim under Judiciary Law Q 487 because there is

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no allegation or evidence of any deceit of the court or deceit in a judicial proceeding. S&V

concludes that plaintiff cannot state a claim for disgorgement of fees because she accepted

S&V’s invoices without complaint. S & V further argues that she cannot state a claim for

punitive damages because a plaintiff suing in malpractice can recover only compensatory

damages and there is nothing to indicate that S&V’s conduct was so outrageous as to evidence a

high degree of moral turpitude or wanton dishonesty.

In support of their motion to dismiss the complaint, the K&B defendants proffer the

following arguments: (1) plaintiffs GBL 5 349 claims are “palpably defective as a matter of

law” because plaintiff cannot make a threshold showing that the act in question (inen,
the

provision of legal services) was consumer oriented; (2) the complaint fails to state a cause of

action for legal malpractice because plaintiff has failed to plead an actionable departure from the

standard of care; ( 3) the advice given by the K&B defendants involved matters of attorney

judgment; (4)the relief initially granted by Justice Mega shows that the underlying action was

not frivolous; ( 5 ) Judiciary Law 5 487 is applicable only to chronic, extreme patterns of legal

delinquency where a false statement is made to the party or to a court with the intent to deceive

and is not applicable to the giving of incorrect legal advice, which is the basis of plaintiffs claim

herein; and (6) plaintiffs claim for punitive damages is devoid of merit because she has no cause

of action for compensatory damages and she has not alleged and cannot establish that the K&B

defendants engaged in behavior involving a high degree of moral turpitude.

In opposition to S&V, plaintiff contends that the underlying action should never have

been commenced due to certain legal obstacles, including the burden required to obtain a

mandatory injunction and related statute of limitations issues, of which plaintiff was never

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informed. Plaintiff discounts Justice Mega’s granting of limited relief on her order to show cause

on the ground that such was reversed by the Appellate Division. Plaintiff defends her invocation

of GBL 9 349 by claiming that the attorney retainer constitutes a public interest area subject to

the statute’s provisions. Plaintiff defends her invocation of Judiciary Law 5 487 by claiming that

S&V engaged in numerous acts of deceit, misrepresentation and chronic delinquency.

Acccording to plaintiff, the alleged acts of deceit involved the adjournment of a hearing before

the Environmental Control Board in August 2003, failing to appear at an ECB hearing, limiting

damage to plaintiffs home to vibrations caused by express buses although damage was caused

by all heavy vehicles, and improperly billing plaintiff. Plaintiff concludes that S&V engaged in

improper and unnecessary billing practices and charges for unnecessary work warranting

disgorgement of the unnecessary fees and the imposition of punitive damages.

With respect to the K &B defendants, plaintiff contends that the “key” to her claims

against them “is not the result per se, but the manner of their representation and failing to

properly explain to her, in a meaningful way, the litigation, so that she could make an informed

decision of whether to proceed” (see motion seq. no. 002, plaintiffs memorandum of law, p 13,

emphasis in original), Plaintiff claims that “[s]imilar explanations were particularly lacking

during the subsequent motions for summary judgment, which Defendants opposed without

discussing with Ms. Matos” (d.).

In addition, plaintiff contends that “early on”, K&B

misrepresented the total cost of the litigation at $20,000 (K&B eventually billed over $60,000),

which is one of the examples called forth by plaintiff to support her Judiciary Law claim against

K&B. Plaintiff concludes that K&B must disgorge fees unnecessarily charged and that K&B is

liable for punitive damages because its billing conduct was unreasonable, reckless and improper

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and because attorney’s fees and billing practices are grave matters of public concern.

Upon moving to dismiss, S&V’s reliance on CPLR 321 l(a)( 1) (defense based on

documentary evidence) is misplaced. For this defense to succeed, the proffered documentation

must definitively dispose of the claim (see Demas v. 325 West End Avenue Corn., 127 AD2d

476,477 [ 1“ Dept 19871). Such is not the case herein. Although S&V no longer represented

plaintiff as of March 2004, it laid the groundwork for the underlying action and took the first step

in its prosecution. S & V also moves to dismiss pursuant to CPLR 321 1 (a)(7).

“On a motion addressed to the sufficiency of a complaint pursuant to CPLR 321 1 (a) (7),

the facts pleaded are presumed to be true and accorded every favorable inference. However,

allegations consisting of bare legal conclusions, as well as factual claims either inherently

incredible or flatly contradicted by documentary evidence, are not entitled to such consideration”

(Franklin v. Winard 199 AD2d 220 [1Jt Dept 1993J, citing Mark Hampton, Inc. u Bermeen, 173

AD2d 220 [Ist Dept 19911, lv denied 80 NY2d 788 [1992]).

“TOestablish a cause of action for legal malpractice, the plaintiff must show that the

attorneys were negligent, that their negligence was the proximate cause of the plaintiffs damages,

and that the plaintiff suffered actual damages as a direct result of the attorneys’ actions . ... [The

complaint must allege] that ‘but for’ the attorneys’ alleged malpractice, the plaintiff would not

have sustained some actual ascertainable damages [citations omitted]” (wv. Winard,

supra, 199 AD2d at 22 1). To establish the elements of proximate cause and actual damages, the

plaintiff must show that but for the attorney’s negligence, what would have been a favorable

outcome was an unfavorable outcome (see Zarin v. kid.& Pr&, 184 AD2d 385,386 [lAt
Dept

19921; see also, Russo v. Feder. Raszovitz. Issacson. Weber, Skala & Bass, 301 AD2d 63, 67 [lgt

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Dept 20021j.

The basis of plaintiffs claims herein is that defendants failed to obtain her informed

consent to the underlying action and the decisions made therein. She also complains of

defendants’ billing practices. Even if, arguably, defendants may have made mistakes in handling

plaintiffs case (for e.g., S&V’s initial failure to join the Transit Authority), the record is devoid

of allegations, sufficient to sustain a legal malpractice claim. Plaintiffs contention that the

underlying action should never have been commenced because of “legal obstacles” such as the

statute of limitations is based largely on theory and hindsight, For example, plaintiffs claims

were not dismissed on statute of limitations grounds, nor for want of a notice of claim, and her

failure to initially join the Transit Authority as a defendant was easily remedied. There is no

objective showing that defendants’ were unaware of the high burden of proof required for

injunctive relief.

In addition, there is a distinction between misconduct and malpractice. Plaintiff alleges

specific instances of misconduct by defendants. These allegations, if true, may violate the duty

defendants owed plaintiff (see 22 NYCRR 5 1210.1j and the Code of Professional
Responsibility. However, they would not amount to malpractice, since plaintiff has not alleged

that she would have prevailed in the underlying action but for such misconduct RJltls v.

Goldenthal, 128 AD2d 687, 688 [2d Dept 19871). Based on the foregoing, the court finds that

plaintiffs malpractice claims cannot withstand defendants’ motions.

GBL 0 349 is a consumer protection statute that prohibits deceptive and misleading

business practices. Plaintiffs cause of action (35) pursuant to GBL 5 349 do not survive the

dismissal motions because the statute is directed at wrongs against the consuming public not

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I Midland Bank, N.A., 85 NY2d 20,25 [1995]). Plaintiffs arguments that GBL § 349 is triggered

because the rules regulating legal retainer agreements are aimed at the consuming public is

misplaced. However, plaintiff's arguments based on 22 NYCRR 5 1215.1 may be pertinent to

her disgorgement claim against the K&B defendants.

I Judiciary Law 0 487 provides in pertinent part that an attorney who is "guilty of any

deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or my

party; or, wilfully delays his client's suit with a view to his own gain; ... is guilty of a

misdemeanor, and ... forfeits to the party injured treble damages, to be recovered in a civil

action.'' To maintain a cause of action under Judiciary Law 5 487, the complaint must allege a

chronic and extreme pattern of legal delinquency (E Solow Management Coy. v. Seltzer, 18

AD3d 399,400 [la Dept 20051, lv den 5 NY3d 712 [2005]; see also b e c h t v. m,15 AD3d
626 [2d Dept 20051; Have11 v. Islam, 292 AD2d 210 [ 1 Dept 20021; $clindler v. Issler &

Scbsage. P,C., 262 AD2d 226,228 [l" Dept 19991, Iv dism 94 NY2d 791 [1999], reqrg den 94

NY2d 859 [ 19991). Plaintiffs Judiciary Law 6 487 claim, which is set forth in her fortieth cause

of action, does not allege the requisite pattern of wrongdoing or deceit necessary to sustain such

claim (cf.Pelleaino v. ,
&F 291 AD2d 60, 64 [l" Dept 20021).

Plaintiffs punitive damage claim cannot be sustained because such damages are not

recoverable for a private wrong and there are no allegations of fraud involving a high degree of

moral turpitude, wanton dishonesty, and conduct aimed at the public generally (see Rocanova v.

d States, 83 NY2d 603,613 [1994]; see also

Equitable Life Assurance Society of the Un~g

Williams v. Coppola, 23 AD3d 1012, 1013 [4IhDept 20051, rearg den 26 AD3d 904 [4'hDept

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20061, ~ p dism
p 7 NY3d 741 C2006-J).

Plaintiffs claims for disgorgement of fees already paid to defendants, are sufficiently

pleaded to warrant a denial of defendants’ motions to dismiss such claims. S&V ceased

representing plaintiff when Garber left them to join K&B. Since they were not discharged for

cause, they are entitled to be paid on a quantum meruit basis for their work on plaintiffs behalf.

Plaintiff alleges that, at the time she retained S&V to represent her in the underlying action, she

gave them a $7,500 retainer. In addition, she had a $565 credit from monies paid to S&V in

connection with their representation of her in a prior matter. S&V’s billing for their work in the

underlying action amounted to only $6,188.50; yet the unearned balance of her retainer and

credit appears not to have been returned to plaintiff, and may be considered a non-refundable

retainer in violation of public policy (see Matter of Coopeman, 83 NY2d 465 [1994]) and her

retainer agreement with S&V blaintiff’s exhibit E). In addition, plaintiff alleges other billing

improprieties by S&V, such as charging her for vacating a default judgment against her in the

administrative hearing which resulted from Garber’s failure to adjourn the hearing as promised.

Although, arguably, plaintiffs recovery from S&V on this claim may be curtailed by an account

stated, since she accepted many of their monthly billing statements without objecting within a

reasonable time (seeRosenman Colin F r e u d Lewis & Cohen v. Edelmm, 160 AD2d 626 [ 1’‘

D 77 NY2d 802 [ 1991]), her claim for disgorgement cannot be dismissed at

Dept 19901, ~ P den

this stage as facially insufficient.

With respect to K&B, plaintiff alleges that she complained about “each and every” bill

(see Matos May 16,2007 affidavit in opposition 7 60, see also 7 S l ) , particularly since Garber

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told her K&B’s fees would be under $20,000 and she was billed over $60,000. She also alleges

that the K&B defendants’ failure to apprise her of all the infirmities of her damages claim

deprived her of the ability to make an “informed consent” as to whether to continue with the

litigation.

Plaintiff has an additional argument against K&B, as to the lack of a retainer agreement.

It seems that after Garber took plaintiff with him to K&B, no retainer agreement was executed

with the new firm.Section 1215.1 of the Professional Disciplinary Rules (22 NYCRR 6 1215.1)
requires that attorneys who represent non-matrimonial clients for fees of more than $3,000 must

have a written letter of engagement or signed retainer agreement addressing the scope and cost of

the legal services to be provided. This requirement, however, and the mandated (‘client’s bill of

rights” [22 NYCRR 6 1210.11 (which would also be violated if plaintiffs allegations are proven
true) do not specifically provide for a penalty when a rule is violated other than attorney

discipline, despite the explict edict “[a] lawyer or law firm shall not ... [vliolate a Disciplinary

Rule” [22 NYCRR 8 1200.3[a](l). (Beech v. Gerald B. Lefcourt. PC, 12 Misc 3d 1167(A) [Civ

Ct, NY Co, Hagler, J, 20061). “[Tlhere is no private right of action for a violation of the Code of

Professional Responsibility” (Kantor v. Bernstein, 225 AD2d 500, 501 [ 1st Dept 19961).

Nonetheless, the courts have fashioned remedies for some of those violations.

The situation is ambiguous with respect to violation of 22 NYCRR 6 1215.1, a recently

enacted rule evoked by plaintiff. Trial-level courts have inconsistently held that noncompliance

with 22 NYCRR 5 1215.1 bars the collection of a fee for the legal representation (see, e.g..
Nadelrnan v. Goldman, 7 Misc 3d 1011(A) [Civ Ct, NY Co, Oing, J 20051); Brown Rudnick

Berlack Israel$ LLF v, Z e h mvitch,

~ 2006 WL 1173832, *2-*3 [Sup Ct, Kings Co, Schmidt, J

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20061) and does not bar recovery in quantum meruit (see, egg.,Matter of Estate of Fesoleto, 6

Misc 3d 680 [Sur Ct, Bronx Co, Holman, S 20041). Yet, others have held that the client may

use the aflorney’s noncompliance as a shield to defend against the attorney’s attempt to collect

fees, but not as a sword to compel disgorgement of fees already paid (see Beech v. Gerald B.

Lefcourt. PC, supra, 12 Misc 3d 1167(A); Lewh v. Law Qffices of Godfrev G. Brown, 8

Misc 3d 622, 625 [Civ Ct, Kings Co, Bluth, J, 20051). This is particularly relevant with respect

to plaintiffs claim against K&B, since it appears that she has paid only a portion of the fees

billed. Recently, another Justice of this court [Edmead, J] held that in a contingency fee case in

which the retainer agreement did not explicitly provide for additional fees for appellate work,

payment for such work must be deemed included in the contingency fee and ordered the attorney

to disgorge all fees beyond the agreed-upon contingency fee (Siagha v. David Katz & Associates

LLp,16 Misc 3d 1130(A), 2007 WL 241 8075 (Sup Ct, New York County 2007).

The issue has yet to be addressed by the First Department. Only two appellate courts

have tackled the issue, both in recent months. The Second Department reviewed the lower court

decisions and ruled that the attorney discharged without cause was not precluded from recovering

in quantum meruit the fair and reasonable value of the legal services provided, but did not

address the issue of whether fees already paid were disgorgeable (Seth Rubenstein. P.C. v.

Ganea, 41 AD3d 54 [2d Dept 20071). That issue was determined by the Appellate Term, 91h&

1Oth Judicial Districts, in Jorm v. -,(2007 WL 2247 199 [App Term, 9th & 10th JDs, July

2007]), where the court held that “while an attorney’s failure to comply with the provision does

not entitle a client to a return of legal fees where the services have already been rendered ... a

client may seek to recover a fee already paid if it appears that the attorney did not properly earn

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said fee.” This appears to be consistent with the well established principles that an attorney who

is discharged for cause does not have the right to recover legal fees (see Costello v. Kiaer, 278

AD2d 50 [lst Dept 20001; Martin v. AiBron J. Broder. P.C., 233 AD2d 229 [lst Dept 19961,

m.lv den 90 NY2d 84 1 [19971, rearg deu 90 NY2d 937 [19971) provided “the misconduct
relates to the representation for which the fees are sought” (Becolator, Cohen & DiPrisco, LLP v.

Lvsaght. Lvsaght & Gamer. P.C., 304 AD2d 86,91 [ 1st Dept 20031). In view of the foregoing,

the Court finds that, at this juncture, plaintiff has stated valid causes of action for disgorgement
T
of fees against both S&V and K&B.

Accordingly, the motion by S&V is granted to the extent that it is hereby

ORDERED that all claims against S&V are dismissed except for plaintiffs claim for

disgorgement of legal fees (the 3Sthcause of action).

The motion by the K&B defendants is granted to the extent that it is hereby

ORDERED that all claims against the K&B defendants are dismissed except for

plaintiffs claim for disgorgement of legal fees (the 39‘h cause of action).

All defendants are directed to serve their answers to the surviving causes of action in the

complaint within 30 days of entry of this order with notice of entry; it is further

ORDERED that within 30 days of entry of this order, defendants shall serve a copy upon

plaintiff with notice of entry.

The Clerk is directed to enter judgment accordingly.

This constitutes the decision and

DATED: December B 2 0 0 7 %
Hon. Doris Ling-Cohan, J.S.C.
G:\Supreme Court\DismissUlatos.kucker& bruh.wpd

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