Opinion
Index No. 154149/2018 Motion Seq. Nos. 10 11
08-15-2022
BETH COPLAN KAUFMAN, Plaintiff, v. BOIES SCHILLER FLEXNER LLP, DINA KAPLAN, BENDER AND KAPLAN PC, JOEL C. BENDER ESQ. PC, BENDER ROSENTHAL ISAACS &RICHTER LLP and BENDER AND ROSENTHAL LLP, Defendants.
Unpublished Opinion
MOTION DATE 02/04/2022
DECISION + ORDER ON MOTION
HON. JAMES E. D'AUGUSTE, J.S.C.
The following e-filed documents, listed by NYSCEF document number (Motion 010) 171, 172, 173, 174, 175, 176, 177, 178, 179, 180, 181, 182, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 198 were read on this motion to/for RENEWAL.
The following e-filed documents, listed by NYSCEF document number (Motion 011) 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 211 were read on this motion to/for AMEND CAPTION/PLEADINGS.
Motion sequence nos. 010 and 011 are consolidated for disposition.
In motion sequence no. 010, plaintiff Beth Coplan Kaufman moves, pursuant to CPLR 2221 (e), for leave to renew the separate motions to dismiss brought by defendants Boies Schiller Flexner LLP (BSF), Bender and Kaplan P.C. (B&K), Dina Kaplan (Kaplan) and Joel C. Bender, Esq., P.C. (Bender) (B&K, Kaplan and Bender, collectively, Bender/Kaplan) and Bender & Rosenthal, LLP (B&R) and Bender Rosenthal Isaacs & Richter LLP (BRIR LLP) (together with B&K, BRIR).
In motion sequence no. 011, plaintiff moves, pursuant to CPLR 3211 (e), for leave to replead and file an amended complaint.
BACKGROUND
The facts underlying this action are detailed in this Court's prior decision, with which familiarity is presumed. Briefly, this action stems from defendants' representation of plaintiff in a contested matrimonial action captioned Kaufman v Kaufman, Sup Ct, Westchester County, Index No. 4815/2012 (the Divorce Proceeding). After settlement of the custody and financial issues in the Divorce Proceeding, plaintiff commenced this action for breach of contract for alleged overbilling and for a Judiciary Law § 487 violation against defendants. Defendants moved to dismiss the complaint. In a decision and order dated April 22, 2021 (the April Order), this Court granted the motions and dismissed the complaint as against all defendants (NYSCEF Doc. Nos. 134-136). Defendants served and filed separate notices of entry the same day. By notice of motion dated May 24, 2021, plaintiff moved to reargue the April Order (NYSCEF Doc. No. 144). This Court denied the motion in a decision and order dated July 21, 2021 (NYSCEF Doc. No. 167). Plaintiff now moves to renew the prior motions to dismiss and moves separately for leave to replead and to amend the complaint. Defendants all oppose the motions.
DISCUSSION
I. The Motion to Renew
CPLR 2221 (e) (2) allows a party to renew a prior motion "upon new facts not offered on the prior motion that would change the prior determination" or "a change in the law that would change the prior determination." "Renewal is granted sparingly and is not a second chance freely given to parties who have failed to exercise due diligence in making their first factual presentation" (Wade v Giacobbe, 176 A.D.3d 641, 641 [1st Dept 2019], lv dismissed 35 N.Y.3d 937 [2020]; see also Foley v Roche, 68 A.D.2d 558, 568 [1st Dept 1979]). The Court, though, may relax these "rigorous requirements" and grant renewal "so as not to defeat substantive fairness'" (Rancho Santa Fe Assn. v Dolan-King, 36 A.D.3d 460, 461 [1st Dept 2007]). That said, the party seeking renewal must still proffer a reasonable excuse for failing to submit the evidence on the prior motion (Henry v Peguero, 72 A.D.3d 600, 602 [1st Dept 2010], appeal dismissed 15 N.Y.3d 820 [2010], reconsideration denied 16 N.Y.3d 726 [2011] [stating that even if the Court were to relax the requirements in CPLR 2221 [e] [3], it may do so "only where the movant presents a reasonable excuse for the failure to provide evidence in the first instance"]).
Here, none of the evidence presented, which consists of invoices, transcripts, reports and letters from the underlying Divorce Proceeding, is considered "new" for purposes of CPLR 2221 (see Omansky v 160 Chambers St. Owners, Inc., 155 A.D.3d 460, 462 [1st Dept 2017] [denying renewal where the "new" documents were available at the time the earlier motion was submitted]). Nevertheless, plaintiff urges the Court to relax its "rigorous requirements" and grant renewal "so as not to defeat substantive fairness'" (Rancho Santa Fe Assn., 36 A.D.3d at 461). Plaintiff offers three reasons why this "new" evidence was not produced on the prior motion. First, plaintiff argues that her prior counsel reasonably believed the factual allegations in the complaint sufficient to withstand dismissal. Second, plaintiff contends that, given the amount of evidence, it was reasonable for her prior counsel to believe that defendants did not meet their burden on dismissal. Last, plaintiff points to ill-timed withdrawals of prior counsel.
These proffered reasons are insufficient (see Menkes v Delikat, 148 A.D.3d 442, 442 [1st Dept 2017] [denying renewal because the plaintiff failed to explain why she failed to offer the facts known to her on the prior motion]; CPA Mut. Ins. Co. of Am. Risk Retention Group v Weiss & Co., 80 A.D.3d 431, 432 [1st Dept 2011] [denying a motion to renew because the "defendants' speculation as to what their prior attorneys 'apparently believed' did not excuse their failure to submit Weiss's affidavit when the original motion was heard"]). Current counsel's statements that prior counsel could not retrieve documents from the sealed Divorce Proceeding, could not digest the documents because of time constraints and an inability to hire a forensic specialist to examine plaintiffs own computer for relevant documents are not supported. In sum, plaintiff has not proffered reasonable justification for failing to produce the new evidence (see LFR Collections LLC v Blan Law Offs., 117 A.D.3d 486, 487 [1st Dept 2014]; Henry, 72 A.D.3d at 602-603). The motion to renew defendants' three prior motions to dismiss is denied.
IL The Motion for Leave to Replead and Amend
On a motion for leave to replead under CPLR 3211 (e), "the standard to be applied ... is consistent with the standard governing motions for leave to amend pursuant to CPLR 3025" (Janssen v Incorporated Vil. of Rockville Ctr., 59 A.D.3d 15, 27 [2d Dept 2008]). Leave to amend under CPLR 3025 (b) "shall be freely given upon such terms as may be just." The "plaintiff does not need to establish the merit of the new claim but must simply show that it is not 'palpably insufficient' or 'clearly devoid of merit'" (Agbo v Constantin Assoc., LLP, - A.D.3d -, 2022 NY Slip Op 02861, *1 [1st Dept 2022] [citation omitted]). The party seeking leave to amend must submit evidence similar to that submitted on a summary judgment motion (see Velarde v City of New York, 149 A.D.3d 457, 457 [1st Dept 2017] [discussing CPLR 3025 (b)]; Hickey v National League of Professional Baseball Clubs, 169 A.D.2d 685, 685 [1st Dept 1991] [discussing CPLR 3211 (e)]), together with a proposed pleading (see HT Capital Advisors v Optical Resources Group, 276 A.D.2d 420, 420 [1st Dept 2000]). The party opposing the amendment bears a heavy burden of demonstrating that the "facts alleged and relied upon in the moving papers are obviously unreliable or insufficient to support the amendment" (Peach Parking Corp. v 346 W. 40th St., LLC, 42 A.D.3d 82, 86 [1st Dept 2007]). If the proposed amendment lacks merit, leave to amend should be denied (see Eighth Ave. Garage Corp. v H.K.L. Realty Corp., 60 A.D.3d 404, 405 [1st Dept 2009], lv dismissed 12 N.Y.3d 880 [2009]).
Plaintiff argues that her new 69-page complaint, supported by nearly 900 pages of exhibits, remedies the pleading deficiencies identified in the April Order (NYSCEF Doc. No. 203). Plaintiff also seeks leave to amend the complaint to assert nine new causes of action.
The PAC refers to defendant Boies Schiller Flexner LLP as BSF; Dina Kaplan as Kaplan; Bender and Kaplan PC as B&K; Joel C. Bender, Esq. PC as Bender; Bender Rosenthal Isaacs & Richter LLP as BRIR; and Bender and Rosenthal LLP as Rosenthal. The Court adopts these shortened names in discussing motion sequence no. 011.
Defendants argue the motion is procedurally improper because a complaint that has been dismissed cannot be amended (see Tanner v Stack, 176 A.D.3d 429, 429 [1st Dept 2019]). BSF and Bender/Kaplan also maintain that the motion is untimely because a party must request leave to replead before a complaint is dismissed (see Siegel & Connors, NY Prac § 275 [6th ed] [Note: online treatise]). Plaintiff, though, moves under CPLR 3211 (e) for leave to replead, and the dismissal of a complaint based on pleading defects is no impediment to a plaintiff later moving for leave to replead (see Guzman v Kordonsky, 177 A.D.3d 708, 709 [2d Dept 2019], affg 2016 NY Slip Op 32255[U] [Sup Ct. Kings County 2016] [granting leave to replead after a complaint had been dismissed]). Further, if leave is granted, the action shall be restored to the active calendar. In that event, the Court may grant leave to amend the complaint under CPLR 3025 because the complaint will not have been dismissed.
The Court now turns to whether plaintiff has cured the pleading deficiencies in the original complaint.
A. Breach of Contract against BSF, Kaplan, B&K and BRIR
Plaintiff has renumbered the breach of contract action for alleged overbilling from the first cause of action in the original complaint to the sixth cause of action in the PAC. Allegations of overbilling, padding of costs, and billing for unnecessary legal services can constitute a cause of action for breach of contract, provided the allegations do not directly challenge the quality of the attorney's work (Ullmann-Schneider v Lacher &Lovell-Taylor, P.C., 121 A.D.3d 415, 416 [1st Dept 2014]; O'Connor v Blodnick, Abramowitz and Blodnick, 295 A.D.2d 586, 587 [2d Dept 2002] [same]).
The PAC alleges that defendants routinely charged plaintiff for the presence of multiple attorneys at depositions, hearings and conferences even though not all the attorneys present contributed (NYSCEF Doc. No. 203, ¶¶ 183 and 398). In one instance, BSF billed $2,762 for an associate and two paralegals to transport banker's boxes to a pretrial conference (id, ¶ 188 and at 647 [Ex 18]). BSF and B&K allegedly engaged in duplicate billing whereby attorneys discussing the matter in person or by telephone or email billed separately for their time and billed for different amounts of time spent at the same meeting (id., ¶¶ 76-77, 185-186, 396 and 399-400). Attorneys at BSF and B&K purportedly billed for reviewing the same documents (id., ¶ 187). BSF allegedly failed to disclose that attorneys Charles Miller (CM), James Miller (JM) and Theodore Uno (Uno) were based in Florida (id., ¶ 301). BSF billed $139,982.89 for their travel expenses to New York and over $9,000 for local travel expenses (id., ¶ 182). BSF also billed $22,412.38 for its services before plaintiff had even signed a retainer (the BSF Retainer) (id., ¶ 391). The PAC alleges plaintiff first learned that Uno was not licensed to practice in New York at a Court conference on November 13, 2014 (id., ¶ 216). She asserts that Uno's $485,700 fee is an unnecessary expense because he was not permitted to participate in the Divorce Proceeding (id, ¶¶ 194, 197, 403 and 409). Plaintiff also complains that the hourly rates charged by JM, who is not licensed to practice in New York, and Uno are greater than the hourly rate charged by Kaplan, who is licensed to practice in this state (id, ¶¶ 202-203).
The cover letter accompanying the invoice for services performed in March 2012 is printed on BSF letterhead that lists a Hollywood, Florida address (NYSCEF Doc. No. 203 at 71 [Ex 1]).
These new allegations are unrelated to plaintiffs earlier complaints about the quality of defendants' legal work and are sufficient to overcome the pleading deficiencies in the original breach of contract action as against BSF, B&K and Kaplan, but not as to BRIR. While the PAC attributes overbilling to all defendants, a complaint that fails to distinguish between defendants is an improper group pleading (see Principia Partners LLC v Swap Fin. Group, LLC, 194 A.D.3d 584, 584 [1st Dept 2021]). Here, the PAC does not specifically allege that BRIR billed plaintiff for its services, and none of the exhibits reflect an invoice or bill delivered to plaintiff from BRIR. Critically, the PAC alleges that plaintiff never paid BRIR a retainer (NYSCEF Doc No. 203, ¶ 67) and that she had retained "Joel C. Bender, Esq., P.C.," not BRIR (id., ¶ 322). Accordingly, leave to replead the breach of contract cause of action for alleged overbilling, unnecessary billing and excessive fees is granted as to BSF, B&K and Kaplan. The action shall be restored to the active calendar.
B. Violation of Judiciary Law § 487 against All Defendants
Plaintiff has renumbered the Judiciary Law § 487 from the second cause of action in the original complaint to the to the seventh cause of action in the PAC. An attorney is liable for a violation of Judiciary Law § 487 if he or she "[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the Court or any party; or ... [w]ilfully delays his client's suit with a view to his own gain." A cause of action under the statute "requires a showing of 'egregious conduct or a chronic and extreme pattern of behavior' on the part of the defendant attorneys that caused damages" (Facebook, Inc. v DLA Piper LLP (US), 134 A.D.3d 610, 615 [1st Dept 2015], lv denied 28 N.Y.3d 903 [2016] [citation omitted]). Allegations of deceit or the intent to deceive must be pled with particularity (Bill Birds, Inc. v Stein Law Firm, P.C., 164 A.D.3d 635, 637 [2d Dept 2018], affd 35 N.Y.3d 173 [2020]; Facebook, Inc., 134 A.D.3d at 615 [dismissing a Judiciary Law § 487 claim where the allegations of scienter were conclusory and were not supported by specific facts]).
According to the April Order, plaintiff never addressed the merits of this cause of action in her opposing papers (NYSCEF Doc. No. 134 at 13).
The PAC alleges that BSF and Kaplan intentionally deceived plaintiff into signing the January 17, 2013, preliminary conference order/stipulation in which she relinquished her rights to various personal and marital property, and which directed her ex-husband, Thomas Kaufman (Kaufman), to pay her $2 million in cash and/or securities (NYSCEF Doc. No. 203, ¶¶ 416-419 at 449 [Ex 11]). BSF and Kaplan allegedly colluded to obtain an all-cash payment instead of stock so they could bill plaintiff for their own personal gain (id., ¶¶ 420-421). BSF and B&K are alleged to have intentionally prolonged the action by failing to re-file an order to show cause for pendente lite relief and discovery (id, ¶¶ 423-427), with BSF concealing its wrongdoing by refusing to provide an accounting of its services (id., ¶¶ 428-431), and by refusing to proceed with mediation even though CM had advised the Court of his intention to mediate (id, ¶¶ 435-437). After cancelling the mediation, BSF and B&K billed plaintiff an additional $892,023.18 (id., ¶ 442). Kaplan purportedly defamed plaintiffs parenting skills in an October 15, 2014, email to Joan Salwen (Salwen), the attorney representing her youngest daughter, which led her daughter to join Kaufman in Westchester (id., ¶¶ 249-252 and 450). Defendants allegedly undermined plaintiffs custodial rights so she and Kaufman would be forced to sell the marital home, the proceeds of which could be used to pay defendants' fees (id, ¶¶ 451-452). BSF also intentionally deceived the Court and plaintiff on Uno's unauthorized practice of law (id., ¶¶ 461 and 463). It is claimed that Kaplan and BSF were aware that plaintiff suffers from ADHD, dyslexia and a cognitive auditory disability and required a written copy of the settlement and "time to read, process and digest the written terms in order ... to understand [them]" (id., ¶¶ 265-268). The PAC alleges that the settlement terms, though, "had been drastically changed from the original letter Kaplan sent Plaintiff' (id., ¶ 269). The PAC further alleges that when plaintiff expressed her reservations about the settlement to Kaplan and CM, and Kaplan, in turn "told CM[ ] that Plaintiff did not understand the terms of the Settlement" (id, ¶¶ 276 and 282). It is alleged that "CM[ ] dismissed this concern, stating to Kaplan that if Plaintiff did not accept the Settlement that was being offered, she would never get out of the courtroom and Defendants would be wrapped up litigating this case forever" (id., ¶¶ 277 and 283). Plaintiff now claims defendants coerced her into entering into the settlement with Kaufman even though they knew she did not understand its terms (id., ¶ 287).
These allegations fail to remedy the deficiencies in the original complaint regarding the element of intentional deceit (see Lavelle-Tomko v As wad & Ingraham, 191 A.D.3d 1142, 1147 [3d Dept 2021] [denying a motion to amend a complaint to plead a cause of action under Judiciary Law § 487 where the proposed amendment failed to plead facts tending to prove the attorney's intent to deceive]; Genger v Genger, 135 A.D.3d 454, 454 [1st Dept 2016], lv denied 27 N.Y.3d 912 [2016] [reasoning that there was no basis to replead where the plaintiffs papers did not show that plaintiff would be able to state a viable cause of action]). Plaintiff liberally employs words or phrases such as "intentionally deceived" or "intentionally misled" or "deceitfully" throughout the PAC, but such catch phrases are too conclusory to plead intent with particularity. Nor does the PAC plead any specific facts from which deceit or the intent to deceive may be inferred (see Ehrenkranz v 58 MHR, LLC, 159 A.D.3d 872, 872 [2d Dept 2018]). More importantly, several of the purportedly deceitful acts - the defective order to show cause, a cancelled mediation, Kaplan's allegedly defamatory email, Uno's participation in the action, and the settlement - were addressed previously in the April Order, though now, plaintiff buttresses the allegations with additional documents. The Court transcripts, emails and other documents, however, are insufficient to plead the element of scienter with particularity or evince an egregious or chronic pattern of behavior.
As stated in the April Order, the Court declined to sign the order to show cause because the motion had been filed four days before a trial ready conference and because defendants failed to request a pre-motion conference (NYSCEF Doc. No. 134 at 12). In declining to sign, the Court (Ecker, J.) also determined the motion "would be held in abeyance" so the parties could appear for a pre-motion conference (NYSCEF Doc. No. 203 at 452 [Ex 13]). The Court transcripts show that Kaplan and CM repeatedly raised the issue of outstanding discovery with the court-attorney referee and with the Court after the Court declined to sign the order to show cause (NYSCEF Doc. No. 203 at 458-459 [Ex 14]; NYSCEF Doc. No. 203 at 510 [Ex 15]). Thus, the documents do not support the claim that defendants willfully delayed plaintiffs suit for their own gain (see Fleyshman v Suckle & Schlesinger, PLLC, 91 A.D.3d 591, 593 [2d Dept 2012], lv denied 19 N.Y.3d 801 [2012] [granting dismissal of a Judiciary Law § 487 (2) cause of action because the "allegation that the defendants 'willfully delayed [her] recovery with a view to their own ends and benefit' is a bare legal conclusion"]).
Plaintiff complains that defendants cancelled mediation so they could continue to bill for their services. But, as noted in the April Order, BSF objected to the tactics employed by Kaufman's attorney to unilaterally proceed with mediation without furnishing certain discovery (NYSCEF Doc. No. 134 at 12-13). The correspondence regarding the proposed mediation submitted with the PAC fails to reflect an intent to deceive on the part of defendants. The emails show that defendants and Kaufman's counsel never agreed on a specific mediator (NYSCEF Doc. No. 203 at 978 [Ex 26]). When Kaufman's counsel executed a retainer with a mediator and paid a $10,000 fee, Kaplan advised that plaintiff "never agreed to start mediation with Mr. Berman. [S]orry for the confusion. Husband jumped the gun" (id. at 980).
On the issue of custody, the PAC alleges, upon information and belief, that Kaplan has a history of disparaging clients and purposely disparaged plaintiff to Salwen for "the sole purpose of churning legal fees" (NYSCEF Doc. No. 203, ¶¶ 254-255). However, this allegation is speculative and entirely conclusory. As stated in the April Order, Kaplan's email concerning plaintiff's parenting skills is dated after the Court had decided the issue of custody (NYSCEF Doc. No. 134 at 11). Furthermore, earlier messages in the email thread show that Salwen had written to the Court about an incident involving plaintiffs daughter (NYSCEF Doc. No. 234 at 684 [Ex 21]). Kaplan wrote, "[s]o please before conclusions are made that this is all of our client's fault, please let us step off and find out the entire truth" (id.), to which Salwen responded, "I can assure you that the main cause of [redacted] distress was caused by your client and her unforeseen and unjustifiable decisions this past weekend" (id. at 683-684). Plaintiff complains that Kaplan's response to Salwen was defamatory, but Kaplan's email reads, in part, that "I will not allow anyone to point fingers at her now when she is doing and did the right thing ... Absolutely everyone in this Court matter took away her parental authority for many many months and created this situation" (id. at 683). These "statements, which consist mainly of simple advocacy, do not give rise to an inference that defendant acted with intent to deceive" (Nehmadi v Claude Castro & Assoc. PLLC, - A.D.3d -, 2022 NY Slip Op 02629, * 1 [1st Dept 2022]).
The PAC alleges that defendants devised a plan to divest plaintiff of custody of her youngest daughter so plaintiff and Kaufman would be forced to sell the marital residence in which Kaufman was then residing (NYSCEF Doc. No. 203, ¶¶ 235-237). The PAC refers to invoices which reflect emails and telephone calls between Salwen, Kaplan and/or Uno shortly before an October 10, 2014, appearance at which the Court held an "attorneys only conference" (NYSCEF Doc. No. 203, ¶ 242 and at 668-669 [Ex 19]). However, the fact that Salwen, Kaplan and Uno communicated with each other is insufficient to infer that defendants intended to deceive plaintiff.
Uno's participation was also discussed in the April Order, and the new allegations do not sufficiently plead scienter regarding his participation.
As for the settlement, plaintiff had previously argued that she did not understand the agreement and that Kaplan and BSF were aware that she did not understand it (NYSCEF Doc. No. 134 at 16). As explained in the April Order, plaintiff's allocution defeats any claim that she misunderstood its terms, and therefore, defendants' actions could not have caused her damages (see Maksimiak v Schwartzapfel Novick Truhowsky Marcus, P.C., 82 A.D.3d 652, 652 [1st Dept 2011] [granting dismissal where the complaint failed to plead that the attorneys' actions caused the plaintiffs damages]). Moreover, as noted in the prior order, another Justice of this Court had already denied plaintiffs attempt to set aside the settlement based on her lack of understanding of its terms (NYSCEF Doc. No. 179, decision and order dated August 14, 2019, in Coplan v Kaufman, Sup Ct. NY County, index No. 152865/2017).
As for the alleged misconduct concerning the preliminary conference stipulation/order dated January 17, 2013, a single act of deceit is not enough to trigger a Judiciary Law § 487 violation (Strumwasser v Zeiderman, 102 A.D.3d 630, 631 [1st Dept 2013]).
Accordingly, leave to replead the cause of action under Judiciary Law § 487 is denied.
C. Fraudulent Inducement against BSF, BRIR and Bender
The proposed first cause of action alleges that BSF, BRIR and Bender fraudulently induced plaintiff into executing the BSF Retainer and a retainer with BRIR (the BRIR Retainer). A cause of action for fraudulent inducement requires '"a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury'" (United States Life Ins. Co. in the City of N.Y. v Horowitz, 192 A.D.3d 613, 614 [1st Dept 2021] [citation omitted]). The claim must be pled with particularity under CPLR 3016 (b) (see PF2 Sec. Evaluations, Inc. v Fillebeen, 171 A.D.3d 551, 552 [1st Dept 2019]). As such, the allegations must identify "who made the representations, when they were made and their substance, and when" (Orange Orch. Props. LLC v Gentry Unlimited, Inc., 191 A.D.3d 609, 609 [1st Dept 2021]; Hamrick v Schain Leifer Guralnick, 146 A.D.3d 606, 607 [1st Dept 2017] [same]).
As against BSF, the amendment is palpably insufficient. The PAC alleges that on March 23, 2012, plaintiff met with three BSF attorneys - CM, JM and David Barrett (Barrett) - at her brother-in-law Richard Hurowitz's (Hurowitz) office (NYSCEF Doc. No. 203, ¶ 25). Hurowitz is a non-practicing attorney (id., ¶ 17). During that meeting, the attorneys "raved about BSF's strong New York based matrimonial practice"; told plaintiff that if she wished to proceed with the Divorce Proceeding, the total cost would be $135,000; told plaintiff they would hold the $135,000 retainer in escrow until she decided to proceed with the Divorce Proceeding; and advised plaintiff to retain local counsel, specifically BRIR, Bender and Kaplan, to help keep her legal fees down (id, ¶¶ 27, 28, 31, 87-88, 94-96, and 98). While the PAC alleges that BSF failed to disclose that none of its New York-based attorneys specialized in matrimonial law; its attorneys with matrimonial experience were based in Florida, of which only one was licensed to practice law in New York; and Bender operated a small law firm, where Kaplan was an associate, separate from BRIR, it also notes that BSF advised plaintiff to retain local counsel not only to allegedly keep her legal fees down, but because they were familiar with the Westchester Supreme Court Matrimonial part (id., ¶¶ 40, 45, 50, 98, 109, and 322). Thus, despite the PAC alleging plaintiff relied on these claimed misrepresentations in signing the BSF Retainer, to her detriment, it is clear, plaintiff, who was represented by independent counsel, Covington and Burling LLP, and advised by her brother-in-law, Hurowitz, a Columbia Law School graduate, at the time she met with BSF, was, or should have been aware that BSF did not specialize in matrimonial law, and could not rely on any alleged misrepresentations to her detriment (NYSCEF Doc. No.203). The PAC further alleges plaintiff was fraudulently induced to sign the BSF retainer agreement by making misrepresentations (NYSCEF Doc. No. 203, ¶ 289). Yet, the Court notes that plaintiff had several weeks to review BSF's retainer agreement; that she was advised by Hurowitz, and the agreement was additionally reviewed by Covington, with BSF making changes to same at Covington's request (NYSCEF Doc. No. 203).
As against BRIR and Bender the amendment fails to state the specific, material misrepresentation or omission made by them to plaintiff or when they made this alleged misrepresentation to her (see Orange Orch. Props. LLC, 191 A.D.3d at 609 [denying a motion to amend where the allegations of fraud were not sufficiently specific]). The PAC fails to describe a meeting or conversation between plaintiff, Bender or BRIR at which Bender or anyone at BRIR misrepresented Bender's position at the firm. Rather, the allegations center on BSF's alleged misconduct. The PAC alleges that BSF told plaintiff BRIR had connections with the Matrimonial Part in Westchester County Supreme Court; CM stressed the importance of retaining local counsel in his "preliminary conversations" with plaintiff in March 2012; CM provided plaintiff with the BRIR Retainer; and plaintiff executed the BRIR Retainer "at BSF's direction" (id., ¶¶ 47, 98, 109). Moreover, the BRIR Retainer lists Bender as "of counsel" to the firm. Thus, plaintiff has not pled specific facts showing that BRIR and Bender made a specific misrepresentation to her (Tsinias Enters. Ltd. v Taza Grocery, Inc., 172 A.D.3d 1271, 1273 [2d Dept 2019], affg 2017 NY Slip Op 32707[U] [Sup Ct, NY County 2017] [affirming dismissal of a cause of action for fraudulent inducement where the complaint failed to set forth the misrepresentations allegedly made by the defendants]) or that she justifiably relied on a false representation made by them (see ACA Fin. Guar. Corp. v Goldman, Sachs & Co., 25 N.Y.3d 1043, 1044 [2015] [stating that the plaintiff on a fraud in the inducement claim "must allege facts to support the claim that it justifiably relied on the alleged misrepresentations"]). Because the amendment as it pertains to BSF, BRIR and Bender is palpably insufficient, leave to add a proposed first cause of action for fraudulent inducement is denied.
D. Civil Conspiracy to Commit Fraudulent Inducement against BSF, Bender and BRIR
The proposed second cause of action seeks to assert a claim for civil conspiracy to commit fraudulent inducement. New York does not recognize an independent cause of action for civil conspiracy (Abacus Fed. Sav. Bank v Lim, 75 A.D.3d 472, 474 [1st Dept 2010]). However, a claim of civil conspiracy may be pled to connect actions by separate defendants to an underlying tort (Kovkov v Law Firm of Dayrel Sewell, PLLC, 182 A.D.3d 418, 418 [1st Dept 2020]). Thus, a civil conspiracy requires a "primary tort, plus the following four elements: (1) an agreement between two or more parties; (2) an overt act in furtherance of the agreement; (3) the parties' intentional participation in the furtherance of a plan or purpose; and (4) resulting damage or injury" (Abacus Fed. Sav. Bank v Lim, 75 A.D.3d at 474]).
The PAC alleges that BSF, Bender and BRIR agreed to charge plaintiff duplicative, excessive and improper legal fees, and in furtherance of this agreement, conspired to fraudulently induce plaintiff into signing the retainers (NYSCEF Doc. No. 203, ¶¶ 335 and 337-339). Because the underlying fraudulent inducement cause of action is devoid of merit, plaintiff may not plead allegations of civil conspiracy in connection with that tort. The second proposed cause of action for civil conspiracy cannot stand as an independent cause of action, and leave to amend is denied.
E. Aiding and Abetting Fraudulent Inducement against BSF
The proposed third cause of action alleges that BSF aided and abetted the fraudulent inducement of plaintiff to sign the BRIR Retainer. To state a cause of action for aiding and abetting fraudulent inducement, the plaintiff must plead the existence of the underlying fraud, knowledge of the fraud by the alleged aider and abettor, and substantial assistance by the alleged aider and abettor (Oster v Kirschner, 77 A.D.3d 51, 55 [1st Dept 2010]).
Since the proposed first cause of action as against BSF, Bender and BRIR is palpably insufficient, as decided above, the aiding and abetting claim against BSF cannot stand (see United States Life Ins. Co. in the City of N.Y., 192 A.D.3d at 613 [dismissing an aiding and abetting cause of action where the underlying fraud action could not be sustained]). Leave to add a proposed third cause of action for aiding and abetting fraudulent inducement is denied.
F. Fraudulent Inducement against BSF and Kaplan
The proposed fourth cause of action alleges that BSF and Kaplan misled plaintiff into signing a stipulation at a preliminary conference.
In the original complaint, plaintiff had alleged "Kaplan committed malpractice almost immediately ... [when she] agreed that 'jewelry; artwork; cars; personal property' were all Tom Kaufman['s] ... separate property ... [which] served to hamstring Plaintiffs efforts to obtain a proper equitable distribution of marital assets" (NYSCEF Doc. No. 66, ¶¶ 17-19). In the April Order, this Court wrote, "Plaintiff executed the preliminary conference stipulation, which demonstrates her agreement to the terms contained therein ... [, and] Plaintiff has not alleged that she was misled into signing the stipulation" (NYSCEF Doc. No. 134 at 11).
The PAC alleges that Kaplan and CM represented plaintiff at the January 17, 2013, preliminary conference (NYSCEF Doc. No. 203, ¶ 116). At the conference, Kaplan and CM presented plaintiff with a preliminary conference stipulation/order and allegedly directed her to sign it without informing her of its terms or explaining the consequences of what she had agreed to (id., ¶¶ 117-118). The PAC alleges that the final version of the preliminary conference stipulation/order differed from the one plaintiff signed (id., ¶ 120). These changes included the forfeit of plaintiffs rights to personal and marital property, such as "jewelry; artwork; cars; personal property," as CM and Kaplan allegedly failed to include a schedule in the preliminary conference stipulation/order listing the property in which she wished to retain an interest (id., ¶¶ 121-122 and 124). The PAC alleges that BSF and Kaplan failed to advise plaintiff that she would be surrendering this property. While the proposed amendment may not be palpably insufficient on its face, and a cause of action for fraudulent inducement may be predicated upon a material omission of fact (see United States Life Ins. Co. in the City of N. Y, 192 A.D.3d at 613), "generally a cause of action alleging that a plaintiff was induced to sign something different from what he or she thought was being signed arises if the signer is illiterate, blind, or not a speaker of the language in which the document is written" (see Ackerman v. Ackerman, 130 A.D.3d at 1279, 1280). While plaintiff now complains that CM and Kaplan allegedly misled her into signing the preliminary conference stipulation/order, she fails to raise a fact issue how she was misled to her detriment or whether she was incapable of understanding the document she admittedly signed. Plaintiffs allegations that she was allegedly misled and intentionally deceived given that she allegedly suffers from ADHD, dyslexia, and a cognitive auditory disability, of which she claims Kaplan and BSF were aware, thus, did not understand the terms of the settlement, are vague and conclusory and do not state a claim for fraudulent inducement. Additionally, like another Justice of this Court who already denied plaintiffs attempts to set aside a settlement agreement based on her lack of understanding of its terms (NYSCEF Doc. No. 179), this Court finds no potential merit in plaintiffs allegations of being misled into signing the preliminary conference stipulation/order claims due to not understanding its terms. Leave to add a proposed fourth cause of action for fraudulent inducement related to the preliminary conference stipulation/order is denied.
G. Breach of Contract against BSF, BRIR and B&K
The proposed fifth cause of action alleges that BSF, BRIR and B&K breached the BSF and BRIR Retainers by violating specific promises set forth in those agreements. A cause of action for breach of contract requires the existence of a valid contract, the plaintiff s performance, the defendant's breach and damages (Heijung Park v Nam Yong Kim, - A.D.3d -, 2022 NY Slip Op 02956, * 1 [1st Dept 2022]). A plaintiff may maintain a cause of action for breach of contract against an attorney if the attorney breached an express promise to achieve a specific result or perform a specific task (see Sage Realty Corp v Proskauer Rose L.L.P., 251 A.D.2d 35, 38 [1st Dept 1998]; Kaplan v Sachs, 224 A.D.2d 666, 667 [2d Dept 1996]).
The PAC alleges that BSF committed five separate breaches of the BSF Retainer when it: (1) assigned Uno, an attorney not named in the BSF Retainer, to work on the Divorce Proceeding (NYSCEF Doc. No. 203, ¶ 362-363); (2) failed to send monthly invoices to plaintiff (id., ¶¶ 364-366); (3) sent invoices to plaintiff at Hurowitz's office (id, ¶¶ 367-371); (4) paid $35,000 to third parties from the initial $135,000 paid to BSF (id, ¶¶ 372-375); and (5) increased the hourly rates charged by its attorney (id., ¶¶ 376-378).
However, four of these actions do not involve the breach of a specific promise. For instance, plaintiff complains that the BSF Retainer did not allow BSF to substitute other attorneys for those listed in the document, but the document does not state that only CM, JM and Barrett would work on plaintiffs matter. The BSF Retainer reads, in pertinent part, that "[w]e expect most of the work will be performed by ... [CM] and a senior associate" (NYSCEF Doc. No. 203 at 77 [Ex 2]). Similarly, the BSF Retainer does not identify a specific date by which monthly invoices would be delivered or where they would be sent. Next, plaintiff complains that BSF breached the "Outside Vendors Provision" by paying $35,000 to Bender and FRA, but according to the agreement, it was incumbent upon plaintiff to "make arrangements for the direct payment of expenses to outside vendors or others whose expenses are reasonably expected to exceed $5,000" (id). Thus, BSF could not have breached this specific promise. More importantly, the PAC fails to plead that plaintiff sustained any damages from these alleged breaches (see Landmark Ventures, Inc. v InSightec, Ltd., 179 A.D.3d 493, 495 [1st Dept 2020] [granting dismissal where the complaint does not plead damages from an alleged breach of contract]; Parker Waichman LLP v Squier, Knapp &Dunn Communications, Inc., 138 A.D.3d 570, 571 [1st Dept 2016] [dismissing a breach of contract claim where the complaint failed to allege that the breach caused an injury]).
Nonetheless, the amendment is not palpably insufficient as it pertains to the hourly rates charged by CM, JM and Barrett. The BSF Retainer expressly lists their hourly rates and, unlike the BRIR Retainer, does not contain a provision or mechanism allowing BSF to revisit those rates.
As against BRIR, the PAC alleges that BRIR breached the BRIR Retainer by failing to collect the initial $25,000 retainer from Bender and by allowing Bender to deposit the funds into his account or an account for Joel C. Bender, Esq. P.C. (NYSCEF Doc. No. 203, ¶¶ 383-384). BRIR's alleged failure to collect the initial $25,000 retainer from Bender, though, is not a breach of a specific promise made to plaintiff. The BRIR Agreement required plaintiff to pay BRIR a $25,000 retainer, not that BRIR was obligated to collect it from Bender.
The PAC includes a copy of the check given to FRA but not the check given to Bender (NYSCEF Doc. No. 203 at 81 [Ex 3]).
As against B&K, the PAC alleges that B&K breached the BRIR Retainer by requiring plaintiff to replenish the retainer in amounts greater than $25,000 (id., ¶¶ 222-228 and 387). While the BRIR Retainer required plaintiff to maintain a retainer "in the sum equal to the initial retainer," the agreement also stated that plaintiff "will be required to remit to this office additional funds in an amount determined to be sufficient under the circumstances of your particular matter" (id. at 409 [Ex 9]). Therefore, whether B&K asked plaintiff to replenish the retainer in an amount greater than $25,000 is not a breach of a specific promise to her.
Accordingly, leave to add a proposed fifth cause of action is granted to allow plaintiff to plead a breach of contract against BSF related to the rates charged by CM, JM and Barrett.
H. A Violation of Judiciary Law § 478 against All Defendants
The proposed eighth cause of action is predicated upon the alleged unauthorized practice of law by JM and Uno in violation of Judiciary Law § 478 (NYSCEF Doc. No. 203, ¶ 475). Judiciary Law § 478 makes it unlawful for a person who is not admitted to practice law in New York and who has not taken the constitutional oath to practice law in this state. A violation of this section qualifies as a misdemeanor (Judiciary Law § 485), and in certain instances, qualifies as a class E felony (Judiciary Law § 485-a). However, Judiciary Law § 476-a provides that only the New York State Attorney General or a bar association organized and existing under New York law may maintain a civil action for a violation of this section (see El Gemayel v Seaman, 72 N.Y.2d 701, 706 [1988]). Because the amendment is palpably insufficient, leave to add a proposed eighth cause of action is denied.
I. Aiding and Abetting the Unauthorized Practice of Law against BSF, Kaplan and B&K
The proposed ninth cause of action alleges that BSF, Kaplan and B&K aided and abetted the unauthorized practice of law by JM and Uno. In view of the above, leave to add a proposed ninth cause of action for aiding and abetting the unauthorized practice of law is denied.
J. Money Had and Received against All Defendants
The proposed tenth cause of action is one for money had and received. A cause of action for money had and received is based on principles of quasi-contract or a contract implied-in-law (Board of Educ. of Cold Spring Harbor Cent. School Dist. v Rettaliata, 78 N.Y.2d 128, 138 [1991]). Such a claim "lies only in the absence of an agreement" (Galopy Corp. Inti., N.V. v Deutsche Bank, A.G., 150 A.D.3d 416, 417 [1st Dept 2017], lv denied 30 N.Y.3d 912 [2018]; Melcher v Apollo Med. Fund Mgt., LLC, 105 A.D.3d 15, 27 [1st Dept 2013] [citation omitted] [stating that money had and received "requires proof that 'in the absence of an agreement... one party possesses money that in equity and good conscience [it] ought not to retain and that belongs to another'"]). Therefore, the plaintiff on a cause of action for money had and received must plead that "(1) the defendant received money belonging to the plaintiff, (2) the defendant benefitted from receipt of the money, and (3) under principles of equity and good conscience, the defendant should not be permitted to keep the money" (DeGroat v Whalen, 201 A.D.3d 875, 877 [2d Dept 2022] [internal quotation marks and citation omitted]).
At the outset, the PAC does not contain a specific allegation that BRIR or Rosenthal received any monies from plaintiff. The PAC alleges that BSF disbursed $25,000 to Bender in June 2012, who then deposited those funds into his personal account or into an account for Joel C. Bender, Esq., P.C., and that plaintiff never paid BRIR a retainer (NYSCEF Doc. No. 203, ¶¶ 60, 64 and 67). The PAC also alleges that B&K, the law firm Bender and Kaplan formed in 2014 (id., ¶ 221), demanded plaintiff replenish the retainer (id., ¶¶ 223-228). Similar claims have not been asserted against BRIR or Rosenthal. Absent specific allegations discussing the receipt of money by BRIR or Rosenthal, the proposed amendment as to these defendants is palpably insufficient (see Abrahami v UPC Constr. Co., 176 A.D.2d 180, 180 [1st Dept 1991] [dismissing a cause of action for money had and received where the complaint failed to allege that defendants had received any money]).
As against BSF, the PAC alleges that it would be inequitable for BSF to retain the monies paid to it in view of the decision by Special Referee Josephine Trovini invalidating the charging lien BSF had filed in the Divorce Proceeding based on BSF's failure to comply with 22 NYCRR §§ 1400.2 and 1400.3 (NYSCEF Doc. No. 203, ¶ 502 and at 438 [Ex 10]). But, the mere fact that the BSF Retainer failed to comply with 22 NYCRR §§ 1400.2 and 1400.3 does not require a return of any the monies plaintiff paid to BSF (see Medina v Richard A. Kraslow, P.C., 149 A.D.3d 928, 930 [2d Dept 2017] [stating that "despite the noncompliance with 22 NYCRR 1400.3, the defendant can retain properly earned fees that the plaintiff has already paid"]; Mulcahy v Mulcahy, 285 A.D.2d 587, 588 [2d Dept 2001] [reasoning that "[w]here there is noncompliance with 22 NYCRR 1400.3, a Court need not direct the return of a retainer fee already paid for properly-earned services"]). In that instance, the attorney may recover the reasonable value of the services rendered in quantum meruit (see Medina, 149 A.D.3d at 930).
However, a cause of action for money had and received will not be dismissed where the validity of an agreement is called into question because of fraud (Robinson v Day, 103 A.D.3d 584, 586 [1st Dept 2013]). Here, BSF argues the claim is duplicative of plaintiffs previously dismissed breach of contract claim, and as plaintiff has not pled a claim for fraudulent inducement against BSF, the cause of action for money had and received against BSF is palpably insufficient. Also, as the proposed cause of action for fraudulent inducement is palpably insufficient as against Bender/Kaplan and BRIR, and because the BRIR Retainer controls the dispute, the proposed cause of action for money had and received is palpably insufficient against them (see Mosaic Caribe, Ltd. v AllSettled Group, Inc., 117 A.D.3d 421, 423 [1st Dept 2014]). Leave to add a proposed tenth cause of action for money had and received is denied.
L. Breach of Fiduciary Duty against All Defendants
The proposed eleventh cause of action alleges defendants breached their fiduciary duty to plaintiff. An attorney has a fiduciary relationship with its client (Mutual Benefits Offshore Fund, Ltd. v Zeltser, 172 A.D.3d 648, 649 [1st Dept 2019], lv dismissed 35 N.Y.3d 933 [2020]). This "relationship imposes on the attorney' [t]he duty to deal fairly, honestly and with undivided loyalty ... including maintaining confidentiality, avoiding conflicts of interest, operating competently, safeguarding client property and honoring the clients' interests over the lawyer's'" (Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d 1, 9 [1st Dept 2008], quoting Matter of Cooperman, 83 N.Y.2d 465, 472 [1994]). A plaintiff pursuing a cause of action for an attorney's breach of his or her fiduciary duty must prove that it would not have suffered damages "but for" the breach (Ulico Cas. Co, 56 A.D.3d at 11-12, citing Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 A.D.3d 267, 272-273 [1st Dept 2004]). The cause of action must be pled with particularity (Parker Waichman LLP v Squier, Knapp &Dunn Communications, Inc., 138 A.D.3d 570, 571 [1st Dept 2016], citing CPLR 3016 [b]).
The PAC alleges that Kaplan and B&R breached their fiduciary duty when they disparaged plaintiffs parenting to Kaufman and to their youngest daughter's attorney; agreed to and actively litigated the surrender of custody of their youngest daughter against plaintiffs express wishes; advocated for the best interest of her daughter against plaintiffs interest; orchestrated the receipt of $2 million in cash, not stock, from Kaufman; surrendered plaintiffs personal property, marital property and other rights; and failed to obtain appraisal values for marital art and jewelry (NYSCEF Doc. No. 203, ¶ 517). The PAC alleges that BSF breached its fiduciary duty when it agreed to surrender custody of plaintiffs youngest daughter to Kaufman against her express wishes; orchestrated the receipt of $2 million in cash, not stock, from Kaufman; surrendered plaintiffs personal property, marital property and other rights; sent invoices to Hurowitz; and, divulged personal and confidential information to Hurowitz without plaintiffs consent or knowledge (id., ¶ 518).
Preliminarily, the PAC fails to plead a specific breach on the part of BRIR or Rosenthal, and a cause of action for breach of fiduciary duty must be pled with particularity. Because the proposed amendment against BRIR and Rosenthal is palpably insufficient, the motion insofar as it seeks leave to plead a breach of fiduciary duty claim against BRIR and Rosenthal is denied.
The proposed amendment is also palpably insufficient against the remaining defendants as plaintiff failed to plead but for causation with the requisite particularity or state what damages she suffered from the alleged breaches. As an example, plaintiff alleges that BSF, B&R and Kaplan engineered a payment of $2 million in cash, not stock, from Kaufman, but the preliminary conference stipulation/order reads, in part, that "Defendant/Husband shall pay the Plaintiff/Wife the sum of $2 million Dollars as either cash and/or securities, as an advance and partial settlement of the wife's right to Equitable Distribution" (NYSCEF Doc. No. 203 at 449). Thus, the preliminary conference stipulation/order granted Kaufman discretion in deciding whether to pay plaintiff in cash and/or stock, and the PAC fails to allege how plaintiffs damages flowed from defendants' actions. Plaintiff complains of Kaplan's email from October 15, 2014, allegedly disparaging her (id. at 683 [Ex 21]). Not only was the email discussed at length in the April Order, but by that time, the Court in the Divorce Proceeding had already determined that plaintiffs husband should retain custody of their youngest daughter. Nor has plaintiff alleged that, but for defendants' actions, she would have obtained sole custody of their youngest child. Furthermore, plaintiffs allocution in the Divorce Proceeding, defeats any claim of damages pertaining to her marital property, personal property and jewelry.
Accordingly, it is
ORDERED that the part of the motion brought by plaintiff Beth Coplan Kaufman for leave to renew (motion sequence no. 010) is denied; and it is further
ORDERED that the part of the motion brought by plaintiff for leave to replead (motion sequence no. 011) is granted to the extent that plaintiff is granted leave to replead the first cause of action in the original complaint (renumbered the sixth cause of action in the proposed amended complaint) against defendants Boies Schiller Flexner LLP (BSF), Dina Kaplan (Kaplan) and Bender and Kaplan P.C. (B&K); and it is further
ORDERED that the part of the motion brought by plaintiff for leave to amend (motion sequence no. 011) is granted, in part; and it is further
ORDERED that leave is granted to amend:
(1) the fifth cause of action as against BSF related to the hourly rates charged by BSF's attorneys; and
(2) the sixth cause of action as against BSF, B&K and Kaplan.
ORDERED that, to the extent described above, a proposed amended complaint shall be filed with NYSCEF within 30 days of service of a copy of this order with notice of entry; and it is further
ORDERED that leave to amend the complaint is denied with respect to the proposed first, second, third, fourth, seventh, eighth, ninth, tenth, and eleventh causes of action; and it is further
ORDERED that defendants shall answer the amended complaint or otherwise respond thereto within 30 days from the date of said service; and it is further
ORDERED that that balance of the motion is denied; and it is further ORDERED that this action is restored to the active calendar; and it is further
ORDERED that, within 7 days from entry of this order, plaintiff shall serve a copy of this order with notice of entry on the Clerk of the General Clerk's Office (60 Centre Street, Room 119); and it is further
ORDERED that such service upon the Clerk shall be made in accordance with the procedures set forth in the Protocol on Courthouse and County Clerk Procedures for Electronically Filed Cases (accessible at the "E-Filing" page on the Court's website at the address www.nycourts.gov/supctmanh); and it is further
ORDERED that upon receipt of the foregoing, the Clerk of the General Clerk's Office shall restore the case to the active calendar.
ORDERED that counsel are directed to appear for in-person status conference at 71 Thomas Street, Room 103, on October 26, 2022, at 2:30pm.