Opinion
INDEX NO. 161339/2019
01-13-2021
LASZLO HORVATH, Plaintiff, v. BUDIN, REISMAN, KUPFERBERG & BERNSTEIN LLP, Defendant.
NYSCEF DOC. NO. 36 PRESENT: HON. DAVID BENJAMIN COHEN Justice MOTION SEQ. NO. 002
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 002) 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 30, 31, 32, 33, 34, 35 were read on this motion to/for DISMISSAL.
In this legal malpractice action commenced by plaintiff Laszlo Horvath, defendant law firm Budin, Reisman, Kupferberg & Bernstein LLP moves, pursuant to CPLR 3211(a)(1) and (a)(7), to dismiss the complaint. Plaintiff opposes the motion. After a review of the parties' contentions, as well as the relevant statutes and case law, the motion is decided as follows.
FACTUAL AND PROCEDURAL BACKGROUND
In 2009, plaintiff filed a Chapter 13 Petition in the United States Bankruptcy Court for the District of New Jersey ("the Bankruptcy Court") under Case No. 09-38537-KCF. Doc. 22. Plaintiff was represented in the bankruptcy proceeding by Jules Rossi, Esq. Doc. 22. On September 15, 2010, plaintiff was allegedly injured while he was a passenger in an elevator in a building in Manhattan. Doc. 21 at par. 4. Plaintiff thereafter retained the Law Offices of Michael Lamonsoff ("Lamonsoff") to commence a personal injury action on his behalf against Gumley Haft Kleier Inc. ("GHK") and Eltech Industries ("Eltech"). The action against GHK and Eltech was commenced in the Supreme Court, Bronx County in 2010 under Index Number 310013/10 ("the Bronx County action"). Doc. 17 at par. 16. Lamonsoff also represented plaintiff in an unrelated personal injury action commenced in New York County in 2010 under Index Number 115395/10 ("the New York County action"). Doc. 17 at par. 17.
The Bankruptcy Court confirmed the Chapter 13 plan on December 28, 2011. Doc. 23.
In March 2012, plaintiff retained the defendant firm to represent him in the Bronx County action in place of Lamonsoff. Doc. 24. Defendant's retainer agreement allowed it "the exclusive right to take all legal steps to enforce" plaintiff's claim against GHK and Eltech. Doc. 24.
In June 2012, this Court stayed the New York County action due to plaintiff's bankruptcy. Doc. 17 at par. 20. On October 29, 2013, an Amended Schedule of Assets was filed in the bankruptcy matter to include plaintiff's New York County action as an asset. Doc. 17 at par. 21. The stay of the New York County action was then lifted pursuant to an order of this Court. Doc. 17 at par. 22.
In February 2014, plaintiff's bankruptcy attorney filed an Amended Schedule of Assets in the bankruptcy court to include the Bronx County action. Doc. 17 at par. 25. Plaintiff represented in the Amended Schedule of Assets that his "post-petition personal injury claim resulting from an elevator falling out of control" [the Bronx County action] was "not property of the estate because it [was] a post-petition claim." Doc. 25. Plaintiff also represented that the current value of the Bronx County action was "unknown" or $0.00. Doc. 25.
In 2014, Eltech moved to dismiss the complaint in the Bronx County action based on the pending bankruptcy matter. Doc. 17 at par. 26. By order dated December 2, 2014, the Supreme Court, Bronx County denied the motion to dismiss. Doc. 26. By order dated March 7, 2017, the Appellate Division, First Department reversed and dismissed the complaint in the Bronx County action, stating, inter alia, that:
Plaintiff's prolonged failure to disclose this lawsuit to the Bankruptcy Court renders him judicially estopped from pursuing it ... Plaintiff took an inconsistent position in the bankruptcy proceedings - that he did not have other legal claims than those listed on his schedule of assets and liabilities - and that position was adopted by the Bankruptcy Court when it confirmed the plan.Doc. 27 (citations omitted).
On November 21, 2019, plaintiff commenced the captioned legal malpractice claim against defendant alleging, inter alia, that it failed to timely amend the schedule of assets in Bankruptcy Court to include the Bronx County action, and that this resulted in the dismissal of that action. Doc. 1 at pars. 40, 48, 58. Defendant then moved (motion sequence 001) to dismiss pursuant to CPLR 3211(a)(1) (documentary evidence) and (a)(7) (failure to state a cause of action). Doc. 4.
Plaintiff filed an amended complaint on May 19, 2020 alleging, inter alia, that:
From March 12, 2012 until February 18, 2014, when the Amended Schedule of Assets identifying plaintiff's personal injury matter filed in Supreme Court State of New York, Bronx County under Index No. 310013/2010 was identified as an asset of the estate, defendant, BUDIN, REISMAN, KUPFERBERG & BERNSTEIN, LLP, took no steps to protect plaintiff's interests as they related to the Bankruptcy Matter.Doc. 21 at par. 42 (emphasis in original).
Specifically, plaintiff alleged that defendant failed to timely amend the schedule of assets in Bankruptcy Court to include the Bronx County action, and that this resulted in the dismissal of that action. Doc. 21. Plaintiff also alleged that defendant "failed to timely commence, or re-commence, an action against the defendants in the Bronx County action with the knowledge, consent or permission of the Bankruptcy Trustee" or the Bankruptcy Court. Doc. 21 at pars. 44-45, 47. Further, plaintiff claimed that defendant "failed to timely advise plaintiff that his personal injury claims must be identified in the Bankruptcy Matter or his personal injury action could or would be dismissed." Doc. 21 at par. 50. Additionally, plaintiff alleged that defendant committed legal malpractice by failing to commence a timely legal malpractice action against Lamonsoff. Doc. 21 at par. 74.
After the amendment of the complaint, defendant withdrew the motion to dismiss it had filed under motion sequence 001 and filed a new motion (motion sequence 002) seeking to dismiss the amended complaint. Doc. 18. In support of the motion, defendant argues that the complaint must be dismissed for failure to state a cause of action (CPLR 3211[a][7]) because it does not meet the requisite pleading standards for a legal malpractice claim. Defendant further asserts that the complaint must be dismissed based on documentary evidence (CPLR 3211[a][1]) since its retainer agreement did not require it to take any action in connection with plaintiff's bankruptcy.
Plaintiff opposes the motion, asserting that it properly pleaded a claim of legal malpractice against defendant.
LEGAL CONCLUSIONS
CPLR 3211 (a) (7) governs motions to dismiss for the failure to state a cause of action. "In determining a motion to dismiss pursuant to CPLR 3211(a) (7), the court must afford the pleading a liberal construction, accept the facts as alleged in the complaint as true, accord the plaintiff the benefit of every favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Ursino v 21/23 Ave. B Realty LLC, 2020 NY Slip Op 30474[U], 2020 NY Misc LEXIS 797, *8 [Sup Ct, NY County 2020] [internal quotation marks and citations omitted]).
A claim for legal malpractice requires that a plaintiff allege facts that, if proven at trial, would demonstrate that the attorney "failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the attorney's breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages" (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007] [internal quotation marks and
citation omitted]; see Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 271-272 [1st Dept 2004]).(Kaplan v Conway & Conway, 173 AD3d 452, 452 [1st Dept 2019]).
Here, as noted above, plaintiff claims that defendant's actions, or inaction, regarding his bankruptcy resulted in the dismissal of the Bronx County action. Specifically, he alleges that:
Defendant BUDIN, REISMAN, KUPFERBERG & BERNSTEIN, LLP committed legal malpractice by failing to exercise that degree of care, skill and diligence commonly possessed by a member of the legal community.Doc. 21 at par. 60.
Plaintiff also alleges that he would have succeeded on his claim in the Bronx County action "but for the defendant's negligence and legal malpractice." Doc. 21 at pars. 62, 78. Further, plaintiff alleges that he sustained damages as a result of defendant's negligence. Docs. 69, 82. Since the complaint, viewed in the light most favorable to plaintiff, pleads a viable claim sounding in legal malpractice, that branch of defendant's motion seeking dismissal pursuant to CPLR 3211(a)(7) is denied.
The branch of defendant's motion seeking dismissal pursuant to CPLR 3211(a)(1) is denied as well. Pursuant to CPLR 3211 (a) (1), a party may move to dismiss a complaint asserted against it if "a defense is founded upon documentary evidence." "A motion to dismiss founded upon documentary evidence may be granted 'only where the documentary evidence utterly refutes [the complaint's] factual allegations, conclusively establishing a defense as a matter of law'" (Siem v Farney Daniels, P.C., 2018 NY Slip Op 32768[U], 2018 NY Misc LEXIS 4955, *13 [Sup Ct, NY County 2018], quoting Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]).
In asserting that it is entitled to dismissal pursuant to CPLR 3211(a)(1), defendant relies on its retainer agreement with plaintiff. Doc. 10. That agreement provided, as noted above, that defendant had "the exclusive right to take all legal steps to enforce the [Bronx County action]." Doc. 10. Since the language of the retainer agreement is extremely broad, it does not resolve as a matter of law the factual issue of whether defendant had an obligation to take any action on plaintiff's behalf related to the bankruptcy proceeding or make any representations to the Supreme Court, Bronx County regarding his bankruptcy. Thus, this branch of the motion must also be denied.
The parties' remaining contentions are either without merit or need not be addressed given the findings above.
Therefore, it is hereby:
ORDERED that the motion by defendant Budin, Reisman, Kupferberg & Bernstein LLP seeking to dismiss the complaint pursuant to CPLR 3211 (a) (1) and (a)(7) is denied in all respects; and it is further
ORDERED that defendant shall serve its answer to the amended complaint filed as NYSCEF Doc. 21 within twenty (20) days after being served with a copy of this order with notice of entry; and it is further
ORDERED that the parties shall appear for a preliminary conference in this matter on February 22, 2021 at 3:00 p.m., which will be held by Microsoft Teams, with a link to the conference to be sent via a subsequent court notice, unless, prior to that day, the parties meet and confer in order to complete a bar coded preliminary conference form to be provided by the Part 58 Clerk, in which case the conference will be cancelled. 1/13/2021
DATE
/s/ _________
DAVID BENJAMIN COHEN, J.S.C.