Opinion
Index No. 158110/2021 Motion Seq. Nos. 001 002
06-16-2022
ONE EDGEWATER EQUITIES LLC, SI FUNDING LLC and LL EDGEWATER HOLDINGS LLC, Plaintiffs, v. THE LAW FIRM OF HALL & HALL LLP, THOMAS J. HALL and YEVGENY RABINOVICH, Defendants.
Unpublished Opinion
PRESENT: HON. BARRY R. OSTRAGER, Justice
DECISION + ORDER ON MOTIONS
BARRY R. OSTRAGER, JUDGE
The Court held oral argument on June 16, 2022 via Microsoft Teams on two motions by defendants: seq. 002 for a discretionary change of venue to Richmond County and seq. 001for an order dismissing all claims pursuant to CPLR 32111(1) and (7) based on documentary evidence and failure to state a cause of action. In accordance with the June 16, 2022 transcript of proceedings, the motion to change venue is denied and the motion to dismiss is granted in part and denied in part as follows.
Defendants' motion to change venue to Richmond County (seq. 002) is denied. Defendants do not dispute that a proper statutory basis exists for venue in New York County. Instead, they ask the Court to exercise its discretion to change venue pursuant to CPLR 510(3) for "the convenience of material witnesses and the ends of justice will [allegedly] be served by the change." But defendants have failed to make the requisite showing. Defendants have the burden of demonstrating that the convenience of "material nonparty witnesses" would be served by the change in venue. Frey v. Fun Tyme Ski Shop, 163 A.D.2d 11, 12 (1st Dep't 1990) (emphasis added). "[The] convenience of the parties themselves or that of their employees will not be considered…." Stavredes v. United Skates of Am., 87 A.D.2d 502 (1st Dep't 1982). To meet this burden, Defendants must provide: (1) the identity of the material nonparty witnesses, (2) the manner in which they will be inconvenienced by a trial in New York County, (3) that the witnesses have been contacted and are available and willing to testify for Defendants, (4) the nature of the anticipated testimony, and (5) the manner in which the anticipated testimony is material to the issues raised in the case. See Cardona v. Aggressive Heating, 180 A.D.2d 572 (1st Dep't 1992); see also 10 Two Trees Lane LLC v. Mahoney, 192 A.D.3d 468 (1st Dep't 2021) (applying the Cardona test). Defendants do not even begin to make the required showing. Therefore, the Court denies the requested change of venue.
The motion to dismiss (seq. 001) is granted in part and denied in part. The Court dismisses without prejudice the third cause of action of respondeat superior. The principle that an employer is responsible for the conduct of its employee is a theory of law, not a cause of action.
The Court declines to dismiss the first cause of action for legal malpractice against the three defendants. It is undisputed that neither the associate nor anyone else at the firm filed a Notice of Appeal to preserve the client's rights, which was well within the scope of the Retainer Agreement. Efforts by successor counsel were limited as a result to motions before the same trial judge who had sua sponte issued the restraint, which was subject to a different standard than the standard for an appeal. While it is unclear whether plaintiff can ultimately prove that they would have prevailed "but for" the alleged malpractice of the defendants, enough has been shown at the pleading stage. Since the motion was on notice, the decision that included the restraint could have been challenged on appeal. And successor counsel was ultimately able to get the restraint vacated. However, successor counsel could not pursue a prompt appeal of the August 31, 2018 order because he was not substituted in until April 8, 2019, well beyond the 30-day deadline to file a notice of appeal. Nor can the Court find as a matter of law at this stage of the litigation that the manner in which successor counsel litigated the case was an "intervening cause" that relieved the Hall firm of liability. Damages have been sufficiently stated at the pleading stage. Therefore, based on the liberal construction of the pleadings and defendants' failure to produce documentary evidence that establishes a defense as a matter of law, dismissal of the claim is not warranted and plaintiff can pursue discovery. Leon v Martinez, 84 N.Y.2d 83, 87-88 (1994).
The Court declines to dismiss the second cause of action for negligent supervision by the firm and the partner Thomas Hall. It is undisputed that the firm has a duty to supervise the associate and remains liable for any negligence by the associate. As to the individual partner defendant Hall, Partnership Law 26(c)(i) imposes liability on a partner of a New York LLP as a result of a subordinate's negligence, stating that: "each partner … of a partnership which is a registered limited liability partnership shall be personally and fully liable and accountable for any negligent … act … committed … by any person under his or her direct supervision and control while rendering professional services on behalf of such registered limited liability partnership." Although the individual partner Thomas Hall denies that he supervised the associate, the affidavit at most creates an issue of fact under the circumstances presented.
Defendants shall efile an Answer to the remaining claims within thirty days of the date of this Decision and Order and meet and confer to prepare a proposed Preliminary Conference Order using the form available on the Part 61 website.
A preliminary conference is scheduled for August 25, 2022 at 11:00 a.m. via a dial-in number to be provided by plaintiff's counsel in a letter efiled by August 15, 2022, along with a copy of the proposed Preliminary Conference Order. If the proposed Preliminary Conference Order is acceptable, the Court will enter the Order, an appearance at the August 25 conference will be waived, and an appropriate compliance conference date will be set by the Court.
Counsel are urged to pursue a consensual resolution of the matter early in the litigation and to efile a letter if any referral or a settlement conference before the Court is requested.