Candero v. Del Virginia

Full title: ALBERTO CANDERO and MAXINE CANDERO, Plaintiffs, v. GABRIEL DEL VIRGINIA…

Court: SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PART IAS MOTION 12EFM

Date published: Feb 26, 2019

2019 N.Y. Slip Op. 30436 (N.Y. Sup. Ct. 2019)

Opinion

INDEX NO. 151983/2018

02-26-2019

ALBERTO CANDERO and MAXINE CANDERO, Plaintiffs, v. GABRIEL DEL VIRGINIA and LAW OFFICE OF GABRIEL DEL VIRGINIA, Defendants. GABRIEL DEL VIRGINIA and LAW OFFICE OF GABRIEL DEL VIRGINIA, Third-Party Plaintiffs, v. LUBLINER KISH, PLLC, Third-Party Defendant.

HON. BARBARA JAFFE Justice

NYSCEF DOC. NO. 51 PRESENT: HON. BARBARA JAFFE Justice MOTION DATE __________ MOTION SEQ. NO. 001

DECISION AND ORDER

The following e-filed documents, listed by NYSCEF document number (Motion 001) 8, 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, 45, 46, 47, 48, 49, 50 were read on this motion to dismiss.

Third-party defendant Lubliner Kish moves pursuant to CPLR 3211(a)(7), (8), and (9) for an order dismissing the third-party complaint. Third-party plaintiffs oppose. Plaintiffs do not oppose.

I. PLAINTIFFS' CLAIM

Relying on the advice of third-party plaintiff Del Virginia, plaintiffs initiated a bankruptcy proceeding in New York to mitigate liability they faced in another action. Del Virginia also advised them that their Florida residence would be exempt from creditors' claims. Subsequently, the bankruptcy proceeding was transferred to Florida, where a non-party took over for Del Virginia.

Once in Florida, plaintiffs learned that their Florida residence was not exempt from creditors' claims, and they were forced to enter into a $200,000 settlement, most of which applied to their Florida residence. Plaintiffs assert that but for Del Virginia's negligence in advising them to initiate the bankruptcy proceeding, they would not have entered into the settlement and paid attorney fees. (NYSCEF 10).

II. BACKGROUND

In the course of the bankruptcy proceeding, by stipulation dated April 26, 2016, Del Virginia was substituted for Matthew S. Kish of Kish Law Firm, PLLC. (NYSCEF 15, 32). By stipulation dated November 4, 2016, Kish Law Firm was substituted for Greenstein & Lubliner, LLP, of which Kish had become a member. (NYSCEF 16, 33). By stipulation dated November 17, 2016, and signed by Kish as a member of Greenstein & Lubliner, the bankruptcy proceeding was settled. (NYSCEF 42). By letter dated August 4, 2017, Kish informed plaintiff Alberto Candero that he had left Greenstein & Lubliner and joined Lubliner Kish, and that he would continue to represent Candero if he so desired. (NYSCEF 17, 34).

On March 5, 2018, plaintiffs filed a complaint against Del Virginia for legal malpractice in connection with filing for bankruptcy protection in September 2015. (NYSCEF 10). On June 15, 2018, Del Virginia filed its third-party complaint against Lubliner Kish alleging that to the extent Del Virginia is liable to plaintiffs, Lubliner Kish should be held liable to Del Virginia for either the full amount awarded or a portion thereof. Specifically, Del Virginia alleges that Lubliner Kish was negligent in advising plaintiffs with regard to the settlement. (NYSCEF 11). On July 9, 2018, Lubliner Kish changed its name to Lubliner Law PLLC. (NYSCEF 26).

III. CONTENTIONS

A. Lubliner Kish (NYSCEF 8-18)

Lubliner Kish argues that the third-party complaint should be dismissed because the court lacks personal jurisdiction over it as a Florida entity with its principal place of business there. It alleges that it neither purposefully conducts nor solicits business in New York, and that the allegedly negligent attorney, Kish, is not admitted in New York.

Lubliner Kish also contends that Del Virginia fails to state a cause of action, as Lubliner Kish was not formed until July 19, 2017, after all of the events giving rise to Del Virginia's claim had transpired. It offers its articles of incorporation (NYSCEF 12), a screenshot of the Department of State's website's entity search for "Lubliner" (NYSCEF 14), and Kish's affirmation in which he states that Lubliner Kish never had a New York office, does not transact business in New York, and was formed after the events giving rise to the complaint. (NYSCEF 13).

B. Del Virginia (NYSCEF 20-45)

Del Virginia argues that as Lubliner Kish is a "mere continuation" of Kish Law Firm and Greenstein & Lubliner, and that all three firms share addresses and have the same members, it has stated a claim. He also alleges that all three firms continuously represented plaintiffs. In support, Del Virginia submits Lubliner Kish's articles of organization (NYSCEF 24), a screenshot of Lubliner Law's website (NYSCEF 25), a screenshot reflecting the former address of Greenstein & Lubliner (NYSCEF 27), a printout from the Florida Department of Corporations website reflecting the entity information for Kish Law Firm (NYSCEF 28), a screenshot of Matthew Kish's LinkedIn profile (NYSCEF 29), a screenshot of Richard Lubliner's LinkedIn profile (NYSCEF 30), and a screenshot of Lubliner Law's "Meet the team" page (NYSCEF 31).

According to Del Virginia, this court has jurisdiction over Lubliner Kish because it is authorized to practice law in New York, holds itself out as being authorized to practice in New York as evidenced by its advertisements and marketing materials, and maintains a New York office. To the extent that Lubliner Kish's connection to New York in unknown, Del Virginia has made a "sufficient start" to establish jurisdiction, thus entitling it to discovery on the issue. In support, he submits screenshots from Lubliner Law and Lubliner Kish reflecting that both firms had attorneys that were admitted in New York (NYSCEF 35), a screenshot from Lubliner Kish's LinkedIn profile reflecting that it has an office in New York (NYSCEF 36), a screenshot from Lubliner Kish's website reflecting that Richard Lubliner is admitted in New York (NYSCEF 37), a screenshot from Lubliner Kish's Facebook page reflecting that as of August 4, 2017, it maintains an office in New York City (NYSCEF 38), a business card of Lubliner Kish reflecting that it maintains a New York office (NYSCEF 39), a screenshot of LinkedIn reflecting that Lubliner Kish maintains a New York City office (NYSCEF 40), and a LinkedIn screenshot reflecting that Greenstein & Lubliner maintained an office in New York City (NYSCEF 41).

Del Virginia also asserts that Lubliner Kish agreed to represent plaintiffs, who were New York residents when the bankruptcy proceeding commenced in an action primarily involving New York creditors and that he and his law firm, the other alleged tortfeasors, are present in New York. Moreover, the settlement of the bankruptcy proceeding is "necessarily tied" to his alleged malpractice in New York. In support, Del Virginia submits the stipulation to compromise controversy in the bankruptcy proceeding, dated November 18, 2016 (NYSCEF 42), and an August 10, 2018 summary of assets and liabilities submitted by Alberto Candero in the bankruptcy proceeding. (NYSCEF 43).

According to Del Virginia, dismissal pursuant to CPLR 3211(a)(9) is unwarranted as jurisdiction is premised upon CPLR 302, not CPLR 314 or 315. In support, he submits an affidavit of service of the third-party summons and complaint, dated June 19, 2018. (NYSCEF 44).

C. Reply (NYSCEF 46-50)

Lubliner Kish denies that the three firms share an address. Rather, it asserts, they used a "virtual office" service and thus, the location found by Del Virginia is the address of "hundreds" of other companies. In support, plaintiff submits a printout from the Florida Department of Corporations website reflecting that the address for the Kish Law Firm was 1200 N Federal Highway, Suite 200 (NYSCEF 48), and provides a link to the website for "Davinci Virtual Office Solutions" reflecting that address as an available virtual office address. In addition, the three firms had different office locations, websites, telephone numbers, and were composed of different members. It maintains that the screenshots of websites and social media posts offered by Del Virginia are outdated and inaccurate. In support, it submits the affirmation of Richard Lubliner (NYSCEF 49).

III. ANALYSIS

A. Personal jurisdiction

Jurisdiction is a threshold issue that must be determined before any other defenses asserted in a motion to dismiss. (342 E. 67 Realty LLC v Jacobs, 106 AD3d 610, 611 [1^st Dept 2013]; Howard v Spitalnik, 68 AD2d 803 [1^st Dept 1979]). Pursuant to CPLR 3211(a)(8), a cause of action may be dismissed on the ground that the court lacks personal jurisdiction over the defendant.

The court may exercise personal jurisdiction over a non-domiciliary of New York, who in person or through an agent, as pertinent here, transacts business within the state or contracts to supply services in the state or commits a tortious act within the state. (CPLR 302[a][1], [2]). The court also has jurisdiction if the non-domiciliary commits a tortious act without the state causing injury to person or property within the state, if the defendant regularly does or solicits business in the state, derives substantial revenue from services rendered in the state, or expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce. (CPLR 302[a][3]).

If jurisdiction is challenged, the plaintiff bears the burden of establishing jurisdiction over the defendant (Arroyo v Mountain School, 68 AD3d 603 [1^st Dept 2009]), and must come forward with sufficient evidence, through affidavits and relevant documents, to prove the existence of jurisdiction (Fischbarg v Doucet, 9 NY3d 375, 381 n 5 [2007]). At this stage, plaintiff need not demonstrate, prima facie, jurisdiction but only a "sufficient start," showing that its position is not frivolous. (SNS Bank, N.V. v Citibank, N.A., 7 AD3d 352, 354 [1^st Dept 2004]). When the plaintiff, in opposition to a motion pursuant to CPLR 3211(a)(8), makes a "sufficient start" in establishing jurisdiction, the motion is to be denied without prejudice to renewal upon the completion of limited discovery on the issue of personal jurisdiction. (Lettieri v Cushing, 80 AD3d 574, 575-576 [2d Dept 2011], citing Peterson v Spartan Indus., Inc., 33 NY2d 463, 467 [1974]).

For solicitation within New York by a non-domiciliary to constitute a "transaction of business" for the purposes of CPLR 302(a)(1), it must be accompanied by business transactions occurring in New York or by sufficient permanence and continuity in New York. (O'Brien v Hackensack Univ. Med. Ctr., 305 AD2d 199, 201 [1^st Dept 2003]). Although the screenshots from Lubliner Kish's website reflect a targeted solicitation of legal services to New York residents, and its social media posts reflect that it advertises that its staff includes attorneys admitted in New York and that it maintains an office in New York, the screenshots are undated and disputed. Thus, they are not dispositive as to whether Lubliner Kish actually has a tangible presence in New York. (See Venegas v Capric Clinic, 147 AD3d 457, 458 [1^st Dept 2017] [contradicted website information alone is insufficient to establish jurisdiction]). The affirmations of Richard Lubliner and Matthew Kish raise an issue of fact and entitle Del Virginia to limited discovery on the issue. (Id. [contradictions between defendant's statements and those on his website regarding business transactions in New York warranted discovery]). Thus, although Del Virginia offers no definitive evidence that Lubliner Kish maintains an office in New York or has transacted business in New York with the requisite permanence and continuity, he nonetheless advances a "sufficient start" to show that there may be personal jurisdiction over defendant.

A non-domiciliary may also be subject to New York's long-arm statute if it commits a tort within the state. CPLR 302(a)(2). Here, Lubliner Kish is alleged to have engaged in malpractice entirely within Florida, as it was only substituted in as counsel after the proceeding had been transferred to Florida, and it is not alleged that Lubliner Kish travelled to New York or conducted any of the litigation or settlement negotiations in New York. In addition, New York's jurisdiction over Del Virginia does not extend to Lubliner Kish, absent any allegation that they were acting together or conspiring to commit a tortious act in New York. (Cf Wimbledon Fin. Master Fund, Ltd. v Weston Capital Mgmt. LLC, 160 AD3d 596, 597 [1^st Dept 2018] [court has jurisdiction over out-of-state defendant who conspired with in-state tortfeasor to commit tort in New York]; Lawati v Montague Morgan Slade Ltd., 102 AD3d 427, 428 [1^st Dept 2013] [same]). Thus, Del Virginia fails to demonstrate that Lubliner Kish committed a tort in New York.

To the extent Del Virginia argues that jurisdiction is premised on CPLR 302(a)(3), he must allege an injury to person or property within New York. Monetary damages are deemed to have occurred where "the critical events associated with the dispute took place." (Weiss v Greenburg, Traurig, Askew, Hoffman, Lipoff, Quentel & Wolff, P.A., 85 AD2d 861, 862 [3d Dept 1981], quoting Am. Eutectic Welding Alloys Sales Co. v Dytron Alloys Corp., 439 F2d 428, 433 [2d Cir 1971]). That plaintiffs may have been New York residents at the time the bankruptcy proceeding commenced does not establish injury in New York, as the bankruptcy proceeding, to the extent it was litigated by Lubliner Kish, was litigated entirely in Florida. (See e.g., Weiss, 85 AD2d at 861-862 [no personal jurisdiction over Florida law firm retained for Florida foreclosure action, even though plaintiff-client was New York resident and firm employees traveled to New York for depositions]). Moreover, the monetary damages suffered due to Del Virginia's alleged malpractice relate primarily to the Florida residence. Accordingly, Del Virginia fails to demonstrate that injury was suffered in New York.

Del Virginia cites no authority for the proposition that because Lubliner is admitted to the New York bar, Lubliner Kish is automatically within the state's long-arm statute.

B. Failure to state a cause of action

In considering a motion to dismiss pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the court must construe the pleading liberally, accept the facts alleged to be true, and afford the plaintiff "the benefit of every possible favorable inference." (JP Morgan Sec. Inc. v Vigilant Ins. Co., 21 NY3d 324, 334 [2013] [citation omitted]; AG Cap. Funding Partners, LP v State St. Bank & Trust Co., 5 NY3d 582, 591 [2005]; Leon v Martinez, 84 NY2d 83, 87 [1994]). "The motion must be denied if from the pleadings' four corners 'factual allegations are discerned which taken together manifest any cause of action cognizable at law.'" (511 W. 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 152 [2002], quoting Polonetsky v Better Homes Depot, Inc., 97 NY2d 46, 54 [2001]; Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]).

A law firm that takes over for another firm may be held liable for malpractice of the predecessor if it is a "mere continuation" of the predecessor. (Schumacher v Richards Shear Co., 59 NY2d 239, 245 [1983]). Factors suggesting that a law firm is a mere continuation of an earlier firm include "the retention of the same employees and the same supervisory personnel; retention of the same production facilities in the same location; production of the same product; retention of the same name; continuity of assets and general business operations; and whether the successor holds itself out as the continuation of the predecessor." (Kauir v American Transit Ins. Co., 2009 WL 5841635, *5 [Sup Ct, NY County 2009], mod 86 AD3d 455 [1^st Dept 2011], revd 19 NY3d 827 [2012]).

Here, as supervising attorney over the bankruptcy proceeding, Kish was counsel at all three firms leading up to the formation of Lubliner Kish, and Greenstein & Lubliner's dissolution coincided with its formation. Moreover, the stipulation of compromise in the bankruptcy proceeding was signed by Greenstein & Lubliner, and the client election letter reflecting Kish's transfer from Greenstein & Lubliner to Lubliner Kish, both of which had Lubliner as a partner, demonstrates the possibility of sufficient continuity over the handling of the bankruptcy proceeding to impose liability on Lubliner Kish.

That plaintiff seeks damages for Del Virginia's alleged negligence in filing the bankruptcy action does not preclude Del Virginia from seeking contribution. (See Soussis v Lazer, Aptheker, Rosella & Yedid, P.C., 66 AD3d 993, 995 [2d Dept 2009] [first retained attorney permitted to seek contribution from subsequently retained attorney "to the extent his alleged negligence in settling [...] may have contributed to or aggravated her injuries"]). Accordingly, Del Virginia has stated a cause of action.

C. CPLR 3211(a)(9)

Pursuant to CPLR 3211(a)(9), a complaint may be dismissed for lack of jurisdiction where service was made pursuant to CPLR 314 or 315. As Del Virginia contends that service was made under CPLR 302, and Lubliner Kish offers no arguments in support of its motion, that portion of the motion is denied.

IV. CONCLUSION

Accordingly, it is hereby

ORDERED, that Lubliner Kish's motion to dismiss the complaint, pursuant to CPLR 3211(a)(8), for lack of personal jurisdiction is denied without prejudice to renew upon the completion of discovery, and is otherwise, denied. If the parties desire to have an in-person conference to address the jurisdictional discovery, they may contact the court clerk to schedule it. 2/26/2019

DATE

/s/ _________

BARBARA JAFFE, J.S.C.