Baker v. Comprehensive Mental Assessment

Full title: BAKER, SANDERS, BARSHAY, GROSSMAN, FASS, MUHLSTOCK NEUWORTH, LLC…

Court: Supreme Court of the State of New York, Nassau County

Date published: May 10, 2011

2011 N.Y. Slip Op. 31385 (N.Y. Sup. Ct. 2011)

Opinion

016008/2007.

May 10, 2011.

[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] IRA B. WARSHAWSKY, Justice.

The following papers read on this motion:

Notice of Pre-Answer Motion to Dismiss .................................. 1. Notice of Motion to Dismiss by Additional Defendants .................... 2. Motion to Dismiss Second Amended Complaint and Amend Caption ............ 3. Affirmation in Opposition to Dismiss Counterclaims against Individual Defs. 4. Affirmation in Opposition to Defendants' Motion to Dismiss 2nd Amend. Comp. 5. Reply Affirmation on behalf of Defendant medical practitioners and Minkin 6.

PRELIMINARY STATEMENT

This motion by the additional defendants Douglas Sanders, Marc Grossman and Todd Fass for an order pursuant to CPLR 3211(a)(8), 3019(d) dismissing the defendants' Comprehensive Mental Assessment Medical Care, P.C., All Mental Care Medicine, P.C., Points of Health Acupuncture, P.C., Horizon Psychological Services, P.C., and Art of Healing Medicine, P.C.,'s (the "defendants") cross-claims in their Second Amended Verified Answer against them is granted.

This motion by the additional defendant David Barshay for an order pursuant to CPLR 3211(a)(7) dismissing the Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth and Tenth cross-claims and part of the defendants' first cross-claim is granted to the extent that so much of the first cross-claim as seeks to hold Barshay personally liable for legal malpractice other than his own and the Second, Third, Fourth, Fifth, Sixth, Seventh, and Eighth cross-claims are dismissed.

This motion by the defendants for an order pursuant to CPLR 3211(a)(1), (3), (5), (7) and CPLR 3025 dismissing the plaintiffs' Sanders Grossman, P.C., Baker Barshay LLP; and Baker, Sanders, Barshay, Grossman, Fass, Muhlstock Neuwirth, a New York General Partnership's (the "Partnership") Second Amended Verified Complaint; and, an order pursuant to CPLR 2101, 2101(f) allowing them to amend the caption to add Sanders, Barshay, Grossman, Fass, Muhlstock, Neuwirth, LLC, as an additional defendant on their counterclaims is determined as provided herein.

BACKGROUND

This action has a rather tortured history. After the defendants — as plaintiffs — commenced an action in Kings County Supreme Court against Baker, Sanders, Barshay, Grossman, Fass, Muhlstock Neuwirth, Esqs. to recover for, inter alia, legal malpractice, Baker, Sanders, Barshay, Grossman, Fass, Muhlstock Neuwirth, LLC ("the LLC") commenced this action to recover legal fees based upon, inter alia, breach of contract and quantum meruit. The LLC sought to recover for the gain and the reasonable value of services rendered on claims it commenced, which were allegedly re-filed by the defendant Lubarsky Tarnovsky. This court (Bucaria, J.) consolidated those two actions and in so doing, converted the defendants' claims against Baker, Sanders, Barshay, Grossman, Fass, Muhlstock Neuwirth, Esqs. which had been brought in the Kings County action to counterclaims.

By order dated June 21, 2010, this court granted the defendants' motion to dismiss the LLC's complaint for lack of standing on the grounds that it never had a relationship with the defendants and denied the LLC's cross-motion to "correct the caption or amend its complaint" without prejudice to renewal on the grounds that neither a proposed amended complaint nor a corrected caption had been submitted. By order dated October 5, 2010, this court granted the LLC leave to amend its complaint thereby substituting Sanders Grossman, P.C., Baker Barshay, LLP and Baker, Sanders, Barshay Grossman Fass, Muhlstock Neuwirth, a General Partnership, as the plaintiffs in this action.

Presently, via their Second Amended Verified Complaint dated July 12, 2010, the plaintiffs Sanders Grossman, P.C., Baker Barshay, LLP and Baker, Sanders, Barshay, Grossman, Fass, Muhlstock Neuwirth, a New York General Partnership, seek to recover for breach of contract and quantum meruit. They allege that in or about 2001, the defendants engaged Sanders Grossman, P.C. and Baker Barshay, LLP separately to provide legal services to pursue collection actions on outstanding no-fault medical bills and that in 2004, the defendants executed a new retainer agreement with the Partnership as well as Sanders Grossman, P.C., and Baker Barshay, LLP for the same services. The plaintiffs allege that the retainer agreement afforded them authority to reasonably settle all claims as well as to endorse the defendants clients' names on settlement checks received by them. They allege that the retainer agreement provided that they were to be paid $90 per hour not to exceed 10% of the funds collected, with a handwritten notation stating "Sanders, Grossman, Fass, Muhlstock 5% principal only, Baker Barshay Neuwirth, LLP 3% principal only." The plaintiffs allege that after they commenced numerous actions to collect unpaid no-fault bills, the defendants purportedly terminated them and directed them to execute Consent to Change Attorney forms transferring the pending cases to the defendant Lubarsky Tarnovsky, P.C. The plaintiffs allege that the defendants nevertheless continued to authorize them to settle outstanding claims on their behalf and that despite their execution and delivery of Consent to Change Attorney forms, Lubarsky Tarnovsky, P.C. filed all new actions and procured new index numbers on claims for which actions had already been brought by them prior to their termination on account of the defendants' failure to inform Lubarsky Tarnovsky about the open case filings. The plaintiffs allege that the defendants breached their contracts when they terminated them. They seek to recover $90 per hour for their work on claims which were refiled by Lubarsky Tarnovsky, as well as their proportionate share of any statutory fee paid by insurance companies to Lubarsky Tarnovsky, P.C., as attorneys for the defendants.

Via their Second Amended Verified Answer, the defendants seek to recover on their counterclaims and cross-claims from the plaintiffs Sanders Grossman, P.C., Baker Barshay, LLP and the Partnership as well as the individual partners who are the additional defendants as follows: as and for their first counterclaim, for legal malpractice; as and for their second counterclaim, for gross negligence; as and for their third counterclaim, for negligent misrepresentation; as and for their fourth counterclaim, for fraud; as and for their fifth counterclaim, for breach of fiduciary duties; as and for their sixth counterclaim, for conversion; as and for their eighth counterclaim, for breach of agreement; and, as and for their tenth counterclaim, for violation of Judiciary Law § 487. They also seek via their seventh counterclaim an accounting and via their ninth counterclaim to impose a constructive trust.

The defendants allege that Baker Barshay performed collection work on their outstanding no-fault medical bills for which it was entitled to 3% of the principal recovered and that Sanders Grossman also performed collection services on their outstanding no-fault claims for which it was entitled to 5% of the principal recovered. The defendants allege that in 2003, Sanders Grossman merged with Fass Muhlstock, P.C., creating Sanders, Grossman, Fass Muhlstock, P.C.; that in 2004, Sanders, Grossman, Fass Muhlstock, P.C. created the LLP Baker, Sanders, Barshay, Grossman, Fass, Muhlstock Neuwirth, LLP ("LLP"); and, that they retained the LLP to represent them "in any and all matters related to the billing/collection of (their) outstanding no-fault medical bills including but not limited to arbitrating and/or litigating claims." The defendants allege that the LLP represented that no substantive changes would be made to their previous agreements. The defendants allege that they turned over in excess of 6,000 claims to the LLP and that the LLP and its partners — the additional defendants — failed to advise them of the status of their claims; received direct payments due them from insurance companies and failed to turn over funds collected; and/or failed to produce pertinent records. The defendants also allege that the LLP failed to make timely court and arbitration filings. The defendants allege that for those reasons, they fired the LLP on October 24, 2005, following which the LLP was dissolved and the LLC was formed on December 8, 2005. The defendants allege that the LLC proceeded to compromise their claims via bulk settlements with AIU Insurance Company and GEICO Insurance Company by unjustifiably and unreasonably reducing the amounts actually owed them, and that the plaintiffs confiscated the settlement funds which emanated therefrom. In seeking to impose personal liability on the additional defendants, the defendants allege that as partners, they abused the corporate form and dominated and exercised complete control over the LLP and LLC. The defendants further allege that the additional defendants as partners and members of the LLP and LLC committed fraud for which they are personally liable, as well as for their breach of fiduciary duties.

The defendants have counterclaimed against the defendant Lubarsky Tarnovsky, P.C. for negligence, contribution and indemnification. They allege that Lubarsky Tarnovsky, as legal counsel, was negligent in its representation of them with regard to their claims.

DISCUSSION

"[P]ursuant to CPLR 3019(a), when a counterclaim alleges that 'a person not a party is * * * liable, a summons and answer containing the counterclaim[s] * * * shall be filed, whereupon, he or she shall become a Defendant.'" Wyler v Wyler, 5 Misc3d 1031(A) (Supreme Court Nassau County 2004), quotingLinzer v Bal, 184 Misc2d 132, 135 (New York City Civil Court 2000), citing 84 N.Y. Jur. 2d Pleading §§ 175, 176. In the absence of such service, the additional defendants are not parties to the action. Wyler v Wyler, supra. However, when despite the absence of service of a summons and complaint on it, a non-party who is made a party replies to the cross-claim and participates in the defense, it is deemed to have submitted to the court's jurisdiction and waived any objection regarding in personam jurisdiction.Feola v Moore McCormack Lines, Inc., 173 AD2d 256 (1^stDept. 1991).

The additional defendants Sanders, Grossman Fass' motion for judgment dismissing the Second Amended Verified Answer against them pursuant to CPLR 3211(a)(8), 3019(d) is granted, without opposition.

The defendants seek dismissal of the plaintiffs Sanders Grossman, P.C., Baker Barshay, LLP, and Bakers, Sanders, Barshay, Grossman, Fass, Muhlstock Neuwirth, a Partnership's complaint as well as leave to amend their Answer to add the LLC as an additional defendant on their counterclaims.

The defendants' motion to add the LLC as an additional defendant is granted, without opposition.

Contrary to the plaintiffs' position, this court did not definitively determine their standing when it recently permitted their amendment of their complaint and their substitution as plaintiffs via its October 5, 2010 order. The plaintiffs' claims in this action post-date the 2003 dissolution of Sanders Grossman and the 2003 dissolution of Baker Barshay, LLP. None of the work for which attorneys' fees is sought here was done by those entities. Their complaint is dismissed.

The defendants' motion to dismiss the Second Amended Verified complaint for laches and as barred by the Statute of Limitations is denied.

The Relation-Back Doctrine

"A claim asserted in an amended pleading is deemed to have been interposed at the time the claims in the original pleading were interposed, unless the original pleading does not give notice of the transactions, occurrences or series of transactions or occurrences, to be proved pursuant to the amended pleading." CPLR 203(f). "This principle, termed the 'relation-back doctrine,' permits a plaintiff to interpose a claim or cause of action which would ordinarily be time barred, where the allegations of the original complaint gave notice of the transactions or occurrences to be proved and the cause of action would have been timely interposed if asserted in the original complaint (citations omitted)." Pendleton v City of New York, 44 AD3d 733 (2^nd Dept. 2007). "The sine qua non of the relation-back doctrine is notice" (Pendelton v City of New York, supra), because "notice within the limitations period is 'the "linchpin" of the relation-back doctrine" (Flederbach v Fayman, 57 AD3d 474, 475 [2^nd Dept. 2008], quoting Buran v Coupal, 87 NY2d 173, 180). Thus, "[w]here the allegations of the original [pleading] gave the defendants notice of the facts and occurrences giving rise to the new cause of action, the new cause of action may be asserted."Pendelton v City of New York,supra, at p. 735, citing Schutz v Finkelstin,Bruckman, Wohl. Most Rothman, 247 AD2d 460 (2^nd Dept. 1988). However, where nothing in the original pleading placed a defendant on notice of the conduct with which they are charged via the new untimely claims, those claims are not saved by the relation-back doctrine. August Bohl Contracting Co., Inc. v L.A. Swyer Co., Inc., 74 AD3d 1649, 1651 (3^rd Dept. 2010). That is, where "'pertinent underlying factual allegations' are not referred to in the original [pleading] . . . and constitute more than a mere expansion of the original . . . claim," the relation-back doctrine did not apply. August Bohl Contracting Co., Inc.,supra, at p. 1651, quoting Marpe v Dolmetsch, 246 AD2d 723 (3^rd Dept. 1998); citing A to Z Assoc. v Cooper, 215 AD2d 161, 162 (1^st Dept. 1995); Green v Irwin, 174 AD2d 879, 880-882 (3^rd Dept. 1991); Caffaro v Trayna, 35 NY2D 245, 249-251 (1974).

If the Statute of Limitations for the claims being advanced by the third-party plaintiffs in their third-party complaints has expired, they must demonstrate that those claims relate back to the filing of their original Answers. Buran v Coupal, supra;Miner v City of New York, 78 AD3d 669 (2^nd Dept. 2010); Comic v Justin's Restaurant, 78 AD3d 641 (2^nd Dept. 2010).

The defendants maintain that the recent substitution of the plaintiffs' Sanders Grossman, P.C., Baker Barshay, LLP, Baker, Barshay, Grossman, Fass, Muhlstock Neuwirth, a Partnership, as plaintiffs in this action (see Court Order dated October 5, 2010) renders their complaint barred by the doctrine of laches and the Statute of Limitations. The claims advanced by the present plaintiffs Sanders Grossman, P.C., Baker Barshay, LLP and Baker, Barshay, Grossman, Fass, Muhlstock Neuwirth, a Partnership, all relate back to the complaint originally filed by the LLC. Accordingly, the plaintiffs' complaint is timely and is not barred by laches. Furthermore, the defendants' cross-claims and counterclaims against the present plaintiffs relate back to the defendants' original complaint as well as the cross-claims and counterclaims advanced in their Answers against the LLC.

"On a motion to dismiss the complaint pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory (quotations omitted)." East Hampton Union Free School Dist. v Sandpebble Builders, Inc., 66 AD3d 122, 125 (2^nd Dept. 2009), aff'd, 16 NY3d 775 (2011), quoting Breytman v Olinville Realty, LLC, 54 AD3d 703, 703-704 (2^nd Dept. 2008) lv dism., 12 NY3d 378 (2009), citing Leon v Martinez, 84 NY2d 83, 87 (1994); Smith v Meridian Technologies, Inc., 52 AD3d 685, 686 (2^nd Dept. 2008). "Thus, a motion to dismiss made pursuant to CPLR 3211(a)(7) will fail if, taking all facts alleged as true and according them every possible inference favorable to the plaintiff, the complaint states in some recognizable form any cause of action known to our law (quotations omitted)." East Hampton Union Free School Dist. v Sandpebble Builders, Inc.,supra, at p. 125, quoting Shaya B. Pacific, LLC v Wilson, Elser, Moskowitz, Edelman Dicker, LLP, 38 AD3d 34, 38 (2^nd Dept. 2006); Leon v Martinez, supra, at p. 87-88; Fisher v DiPietro, 54 AD3d 892, 894 (2^nd Dept. 2008); Clement v Delaney Realty Corp., 45 AD3d 519, 521 (2^nd Dept. 2007). "[T]he sufficiency of a complaint must be measured against what the law requires of pleadings in the particular case."East Hampton Union Free School Dist., v Sandpebble Builders, Inc., supra, at p. 125. Generally,

[t]he complaint . . . is not required to meet any heightened level of particularity in its allegations ( cf. CPLR 3016). Instead, it need only contain "[s]tatements . . . sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action" East Hampton Union Free School Dist. v Sandpebble Builders, supra, at p. 125, quoting CPLR 3013.

"[E]ven under the liberal 'notice pleading' requirements of CPLR 3013, a complaint still must allege, inter alia, 'the material elements of each cause of action' asserted."East Hampton Union Free School Dist. v Sandpebble Builders,supra, at p. 125. However, CPLR 3016(b) requires "the circumstances constituting the wrong [to] be stated in detail" where a cause of action is based upon misrepresentation, fraud, mistake, wilful default, breach of trust or undue influence.

While the additional defendant Barshay may not be personally liable for the acts of the LLC pursuant to Limited Liability Company Law 609(1), 610, the defendants' cross-claims against him will not be dismissed in their entirety pursuant to CPLR 3211(a)(7) on that ground. The defendant Barshay's individual liability is not necessarily limited to his acts on behalf of or in conjunction with the LLC. Barshay's potential individual liability is also sought in conjunction with the acts of Baker Barshay, LLP and the Partnership, to which the Limited Liability Company Law does not apply.

Generally, "a corporation exists independently of its owners, who are not personally liable for its obligations, and . . . individuals may incorporate for the express purpose of limiting their liability." East Hampton Union Free School Dist. v Sandpebble Builders, supra, at p. 125, citing Bartle v Home Owners Co-op., 309 NY 103, 106 [1995]; Seuter v Lieberman, 229 AD2d 386, 387 (2^nd Dept. 1996). "The concept of piercing the corporate veil is an exception to this general rule, permitting, in certain circumstances, the imposition of personal liability on owners for the obligations of their corporation."East Hampton Union Free School Dist. v Sandpebble Builders,supra, at p. 125; Matter of Morris v New York State Dept. of Taxation Finance, 82 NY2d 135, 140-141 (1993). "A plaintiff seeking to pierce the corporate veil must demonstrate that a court in equity should intervene because the owners of the corporation exercised complete domination over it in the transaction at issue and, in doing so, abused the privilege of doing business in the corporate form, thereby perpetrating a wrong that resulted in injury to the plaintiff." East Hampton Union Free School Dist. v Sandpebble Builders, supra, at p. 125, citing Love v Rebecca Development, Inc., 56 AD3d 733 (2^nd Dept. 2008); Millennium Const., LLC v Loupolover, 44 AD3d 1016 (2^nd Dept. 2007).

However, "domination over corporate conduct in a particular transaction [is not] sufficient to support the imposition of personal liability on [a] corporate owner . . ." [T]he party seeking to pierce the corporate veil must also establish 'that the owners, through their domination, abused the privilege of doing business in the corporate form.'" East Hampton Union Free School Dist. v Sandpebble Builders, Inc., supra, at p. 126-127, citingMatter of Morris v New York State Dept. of Taxation and Finance, supra, at p. 142; Gateway I Group, Inc. v Park Ave. Physicians. P.C., 62 AD3d 141 (2^nd Dept. 2009); Lawlor v Hoffman, 59 AD3d 499 (2^nd Dept. 2009); Love v Rebecca Development. Inc., supra, at p. 733. "Conduct constituting an abuse of the privilege of doing business in the corporate form is a material element of any cause of action seeking to hold an owner personally liable for the actions of his or her corporation under the doctrine of piercing the corporate veil."East Hampton Union Free School Dist. v Sandpebble Builders, Inc., supra, at p. 127. Thus, the complaint must allege that the defendant corporate owner "in his dealings with [the plaintiff], acted other than in his capacity as [partner, officer or owner of the corporation], or that he failed to respect the separate legal existence of the corporation, or that he treated its corporate assets as his own, or that he undercapitalized the corporation, or that he did not respect corporate formalities, or that he, in any other way, abused the privilege of doing business in the corporate form." East Hampton Union Free School Dist. v Sandpebble Builders, Inc., supra., at p. 127, citing AHA Sales. Inc. v Creative Bath Products. Inc., 58 AD3d 6, 24 (2^nd Dept. 2008); Gateway I Group. Inc. v Park Ave. Physicians. P.C.,supra, at p. 141.

"Without any allegations that conduct constituted an abuse of the privilege of doing business in the corporate form, [a] complaint fails to allege a material element of a cause of action against [a partner, officer, or owner] under the theory of piercing the corporate veil." East Hampton Union Free School Dist. v Sandpebble Builders, Inc., supra, at p. 127, citingLawlor v Hoffman, supra.

In light of the absence of any material allegations that Barshay's conduct constituted an abuse of the privilege of doing business in the corporate form, the complaint fails to allege a material element of a cause of action against him under the theory of piercing the corporate veil (East Hampton Union Free School Dist. v Sandpebble Builders. Inc., supra, at p. 127, citing Lawlor v Hoffman, 59 AD3d 499 [2^nd Dept. 2009]) and the defendants' fifth and seventh cross-claims sounding in breach of fiduciary duty and accounting (AHA Sales. Inc. v Creative Bath Products. Inc., supra), sixth cross-claim sounding in conversion (Shimamoto v S F Warehouses, Inc., 257 AD2d 334 [1^st Dept. 1999], affd, 99 NY2d 165), second and third cross-claims sounding in gross negligence and negligent misrepresentation (Reidel v Steger Material Handling Co., 254 AD2d 819 [4^th Dept. 1998]; Matia ex rel. Palma v Mondo Properties, LLC, 43 AD3d 367 [1^st Dept. 207]), and eighth cross-claim sounding in breach of contract (Collins v E-Masine. LLC, 291 AD2d 350 [1^st Dept. 2002], lv den., 98 NY2d 605), are dismissed as against additional defendant Barshay.

In any event, the defendants' Second (gross negligence), Third (negligent misrepresentation), Fourth (fraud), Fifth (breach of fiduciary duty), and Eighth (breach of contract) cross-claims against Barshay are duplicative of their legal malpractice claims and as such, would be dismissed. Contrary to the defendants' characterization of those claims, they are indeed based on the same facts and result in the same damages as their legal malpractice claim. See, Mecca v Shane, 258 AD2d 569 (2^nd Dept. 1999) lv dism., 95 NY2d 791 (2000) (breach of fiduciary duties, fraud, negligent misrepresentation, gross negligence dismissed as duplicative of legal malpractice claim); Conklin v Owen, 72 AD3d 1006 (2^nd Dept. 2010) (breach of contract and negligent misrepresentation claim dismissed as duplicative of legal malpractice claim).

As for the defendants' tenth cross-claim, "[j]udiciary Law § 487(1) permits injured third parties to recover treble damages when an attorney engages in 'any deceit or collusion or consents to any deceit or collusion, with intent to deceive the court or any party.'" The plaintiffs must show evidence of either intent by the defendants to deceive or a chronic and extreme pattern of legal delinquency which proximately caused their damages. O'Connell v Kerson, 291 AD2d 386 (2^nd Dept. 2002). "Moreover, the alleged deceit when not directed at a court must occur during a pending judicial proceeding (citations omitted)." Elmowitz v McCormick Dunne Foley, 30 Misc 3d 1209(A) (Supreme Court New York County 2010), citing Jacobs v Kav, 50 AD3d 526, 527 (1^st Dept. 2008); Costalas v Amalfitano, 305 AD2d 202, 203-204 (1^st Dept. 2003). In view of the allegations of fraud and deceit, specific allegations are required when advancing a claim pursuant to Judiciary Law § 487. See, Briarpatch Ltd., L.P. v Frankfurt Garbus, Klein Selz, P.C., 13 AD3d 96 (1^st Dept. 2004),lv den., 4 NY3d 707 (2205); Goldner v Sullivan, Gough, Skipworth, Summers and Smith, 105 AD2d 1149 (4^th Dept. 1984); compare, Mahler v Campaena, 60 AD3d 1009 (2^nd Dept. 2009); Jaroslawicz v Cohen, 12 AD3d 160 (1^st Dept. 2004).

Contrary to Barshay's allegations, the defendants have adequately stated a claim against him to recover under Judiciary Law § 487. The defendants have alleged that "[t]he partners failed to provide business records and accounting[s];" "[t]he partners failed to hand over funds collected on settled cases;" "[plaintiffs] failed to make timely court and arbitration filings . . .;" "[c]hecks payable to defendants [were placed] in partner's accounts;" "[s]ettlement checks issued by insurance carriers . . . were deposited into Partnership's accounts;" "[p]aintiffs compromised defendants' causes of actions, particular in a bulk settlement with AIU Insurance Company, and a bulk settlement with GEICO Insurance Company;" "[P]artners took possession of the settlement funds from both Bulk Settlements;" and that "[P]artners failed to inform defendants of the receipt of funds resulting from both Bulk Settlements . . . [and] deposited settlement funds from Bulk Settlements into [plaintiff's] bank accounts." The defendants have alleged that Sanders Grossman, P.C., Baker Barshay, LLP and the Partnership as well as all of the additional defendants improperly represented to adversaries as well as the courts in the course of judicial proceedings related to their no-fault claims that they represented them and that they had the authority to settle their claims when they did not and that they settled those claims at a significant discounted rate causing them substantial damage. A claim pursuant to Judiciary Law § 487 has clearly been stated.

As for the defendants' ninth cross-claim, "[t]he imposition of a constructive trust requires proof of (1) a confidential or fiduciary relationship, (2) a promise, (3) a transfer made in reliance on the promise, and (4) unjust enrichment." Berger v Berger, 81 AD3d 765 (2^nd Dept. 2011); see also, Sharp v Kosmalski, 40 NY2d 119, 121 (1976). "A constructive trust may be imposed even in the absence of an express promise; 'a promise may be implied or inferred from the very transaction itself.'" Harbor Consultants Ltd. v Roth, 26 Misc 3d 1219(A) (Supreme Court New York County 2010), quotingSharpy Kosmalski, supra, at p. 122. The defendants have adequately stated a claim against Barshay for the imposition of a constructive trust. The plaintiff's and the additional defendants were allegedly the defendants' lawyers in the no-fault proceedings, thereby giving rise to a fiduciary relationship, implicitly promising to deal honestly with their assets; they allegedly made representations to fairly and vigorously represent them in those proceedings; via even the plaintiffs' own assertions, the defendants allegedly empowered them to do so; and, the plaintiffs allegedly failed to properly represent them and to disburse proceeds to which the defendants were entitled. Harbor Consultants Ltd. v Roth, supra, citing Majer v Schmidt. 169 AD2d 501, 503 (1^st Dept. 1991); see also. Dominquez v Morris, 77 AD3d 884 (2^nd Dept. 2010); compare, Carr v Neilson, 77 AD3d 877 (2^nd Dept. 2010), lv den., 16 NY3d 706 (2011). "[U]nder the circumstances where an attorney is alleged to have committed fraud on his client by misappropriating the client's settlement proceeds, a constructive trust 'will be erected wherever necessary to satisfy the demands of justice.'" Harbor Consultants Ltd. . v Roth,supra, at p. 9, quoting Majer v Schmidt,supra, quoting Latham v Father Divine, 299 N.Y. 22, 27 (1949), rears den., 299 N.Y. 599 (1949).

In conclusion:

(1) The additional defendants Douglas Sanders, Marc Goodman and Todd Fass' motion for an order pursuant to CPLR 3211(a)(8), 3019(d) dismissing the cross-claims against them is granted.

(2) The motion by additional defendant David Barshay for an order dismissing the defendants' cross-claims against him is granted to the extent that the defendants' Second, Third, Fourth, Fifth Sixth, Seventh and Eighth cross-claims against him and so much as of the defendants' first cross-claim as seeks to hold him personally liable for legal malpractice other than his own are dismissed.

(3) The defendants' motion for an order pursuant to CPLR 3212(a)(1), (3), (5), (7) and 3025 is granted to the extent that the complaint by Sanders Grossman, P.C. and Baker Barshay, LLP is dismissed and the LLC is added as an additional defendant on the counterclaim.