Attorneys – Page 58 – New York Appellate Digest

Attorneys, Civil Procedure, Contract Law

DEFENDANT OFFERED MORE TO SETTLE THE ACTION THAN WAS AWARDED PLAINTIFF AFTER TRIAL; DEFENDANT WAS THEREFORE ENTITLED TO ATTORNEY’S FEES PURSUANT TO CPLR 3220 (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined defendant was entitled to attorney’s fees pursuant to CPLR 3220 in this breach of contract action. The defendant offered $950,000 to settle the action before trial and the plaintiff was awarded about $525,000:

CPLR 3220 provides, in relevant part, that, in an action to recover damages for breach of contract, at any time at least 10 days prior to trial, a defendant may make “a written offer to allow judgment to be taken against [it] for a sum therein specified, with costs then accrued, if the [defendant] fails in his defense.” If the plaintiff rejects the offer and thereafter “fails to obtain a more favorable judgment, [the plaintiff] shall pay the expenses necessarily incurred by the [defendant], for trying the issue of damages from the time of the offer” (CPLR 3220 … ). Here, since the defendant’s offer of $950,000 exceeded the plaintiff’s award of $524,253.92 and the plaintiff rejected that offer, the court should have awarded the defendant its expenses, including attorneys’ fees, incurred in trying the issue of damages from the date of its offer pursuant to CPLR 3220 … . Kirchoff-Consigli Constr. Mgt., LLC v Dharmakaya, Inc., 2020 NY Slip Op 04468, Second Dept 8-12-20

August 12, 2020

Attorneys, Civil Procedure, Evidence

THE EVIDENCE SUBMITTED IN SUPPORT OF DEFENDANT’S SUMMARY JUDGMENT MOTION, INCLUDING AN ATTORNEY AFFIDAVIT, WAS NOT IN ADMISSIBLE FORM, THE MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s (CCC’s) motion for summary judgment should not have been granted because the supporting evidence, including an attorney affidavit, was not in admissible form:

The affirmation of CCC’s attorney was not based upon personal knowledge and, thus, was of no probative or evidentiary significance … . “The affidavit or affirmation of an attorney, even if he [or she] has no personal knowledge of the facts, may, of course, serve as the vehicle for the submission of acceptable attachments which do provide evidentiary proof in admissible form, e.g., documents, transcripts” … . Here, however, the submissions by CCC on the motion were not in admissible form … . The emails and letters were offered for the truth of their contents and, therefore, constituted hearsay … . CCC failed to establish that any exception to the hearsay rule applied … . Since CCC failed to submit admissible evidence or an affidavit by a person having knowledge of the facts, it failed to establish its prima facie entitlement to judgment as a matter of law (see CPLR 3212[b] …). United Specialty Ins. v Columbia Cas. Co., 2020 NY Slip Op 04511, Second Dept 8-12-20

August 12, 2020

Attorneys, Contract Law

PLAINTIFF BANK’S ATTORNEY’S FEES IN THIS BREACH OF CONTRACT ACTION SHOULD NOT HAVE BEEN AWARDED ABSENT PROOF OF THE ATTORNEY’S EXPERIENCE AND ABILITIES AND THE NATURE OF THE SERVICES RENDERED (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the court should not have awarded attorney’s fees to plaintiff bank in this breach of contract/guaranty action because the attorney’s experience and abilities and the nature of the services were not spelled out:

… [T]he Supreme Court should not have awarded the bank attorneys’ fees, costs, and disbursements based solely on the affirmation of legal services provided by the bank’s attorney. “An award of an attorney’s fee pursuant to a contractual provision may only be enforced to the extent that the amount is reasonable and warranted for the services actually rendered” … . “In determining reasonable compensation for an attorney, the court must consider such factors as the time, effort, and .skill required; the difficulty of the questions presented; counsel’s experience, ability, and reputation; the fee customarily charged in the locality; and the contingency or certainty of compensation” … . “While a hearing is not required in all circumstances, the court must possess sufficient information upon which to make an informed assessment of the reasonable value of the legal services rendered” … . “There must be a sufficient affidavit of services, detailing the hours reasonably expended . . . and the prevailing hourly rate for similar legal work in the community” … .

Here, the affirmation of services rendered submitted by the bank’s counsel “did not set forth counsel’s experience, ability, and reputation, and failed to detail the prevailing hourly rate for similar legal work in the community” … . Sterling Natl. Bank v Alan B. Brill, P.C., 2020 NY Slip Op 04418, Second Dept 8-5-20

August 5, 2020

Attorneys, Civil Procedure, Family Law

ABSENT PROOF OF SERVICE OF THE SUPPORT MAGISTRATE’S ORDER ON FATHER OR FATHER’S COUNSEL, THE TIME FOR FILING OBJECTIONS TO THE ORDER NEVER BEGAN RUNNING (SECOND DEPT).

The Second Department, reversing Family Court, determined the time for filing objections to the order of the Support Magistrate never started to run because there was no evidence the order was served or mailed, notwithstanding father’s possession of the order:

Pursuant to Family Court Act § 439(e), objections to an order of a Support Magistrate must be filed within 30 days after the date on which the order is provided to the objecting party in court or by personal service, or within 35 days after the date in which the order is mailed to the objecting party … . When a party is represented by counsel, the 35-day time requirement does not begin to run until the final order is mailed to counsel … . Here, the father and the father’s prior counsel indicated that neither of them received the Support Magistrate’s order by either personal service or mail. In addition, there is no evidence in the record demonstrating that the Support Magistrate’s order was mailed or personally served on the father’s counsel. Since there is no evidence in the record indicating that the Support Magistrate’s order was personally served or mailed to the father’s counsel … , the time in which the father was required to file his objections never began to run … . Contrary to the Family Court’s determination, the father’s actual possession of the Support Magistrate’s order, which prior counsel indicated was obtained from the Family Court record room, is not dispositive, as the time limitations of Family Court Act § 439(e) do not begin to run until service is effectuated in accordance therewith … . Hughes v Lugo, 2020 NY Slip Op 04308, Second Dept 7-29-20

July 29, 2020

Arbitration, Attorneys

THE ATTORNEY’S FAILURE TO NOTIFY THE CLIENT OF THE CLIENT’S RIGHT TO ARBITRATE A FEE DISPUTE WITHIN TWO YEARS OF WHEN THE LEGAL SERVICES WERE RENDERED PRECLUDES THE ATTORNEY’S ACTION FOR PAYMENT OF THE FEE (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Webber, in a matter of first impression, determined plaintiff-attorney’s failure to timely notify defendant-client of the right to arbitrate a fee dispute required dismissal of the attorney’s action seeking attorney’s fees. The Committee on Fee Disputes and Conciliation (Committee) can not hear fee disputes more that two years after legal services were rendered. Plaintiff-attorney did not notify defendant within two years and the Committee refused to hold the arbitration on that ground:

22 NYCRR 137 gives clients the right to demand arbitration of any fee dispute in an amount between $1,000 and $50,000 (22 NYCRR 137.1[b][2]). The failure of an attorney to participate in fee arbitration is a violation of the ethical rules (Rules of Professional Conduct 22 NYCRR 1200.00) rule 1.4; (see 22 NYCRR 137.11). 137.1 sets out the limitations on the disputes that will be heard by the Committee. This includes matters outside the dollar range, claims inextricably intertwined with malpractice claims, and as relevant here, claims where no legal services have been performed in the prior two years (22 NYCRR 137.1[b][6]). …

Fee arbitration is mandatory if requested by a client or a former client. It is a right of the client. Where, as in this case, an attorney, through their own delay deprives the client of that right, the attorney cannot in good faith claim compliance with the procedures of Part 137. Not only would this effectively give counsel the option of whether to arbitrate, because counsel could control whether the dispute began in two years or less, it would also be directly contrary to the rules, which provide that it is the client’s choice. Filemyr v Hall, 2020 NY Slip Op 04238, First Dept 7-23-20

July 23, 2020

Attorneys, Contract Law, Fiduciary Duty, Partnership Law

FORMER LAW FIRM PARTNER WAS ENTITLED TO AN ACCOUNTING; IN DETERMINING THE BUYOUT PRICE UPON THE PARTNER’S WITHDRAWAL FROM THE PARTNERSHIP, THE TERMS OF THE PARTNERSHIP AGREEMENT, RATHER THAN PARTNERSHIP LAW, CONTROL (SECOND DEPT).

The Second Department determined plaintiff, a former partner in a law firm, was entitled to an accounting and a buyout price calculated pursuant to the provisions of the partnership agreement:

” The right to an accounting is premised upon the existence of a confidential or fiduciary relationship and a breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest'” … . A plaintiff seeking an accounting has to show that he or she entrusted money or property to the defendant with respect to which he or she has an interest or which, in equity, ought to be divided … . Here, we agree with the Supreme Court’s determination awarding the plaintiff summary judgment on the cause of action for an accounting to determine the amount due to him pursuant to the terms of the partnership agreement. ” … [W]here . . . there is a fiduciary relationship between the parties, there is an absolute right to an accounting notwithstanding the existence of an adequate remedy at law” … Here, it is undisputed that there was a fiduciary relationship between the plaintiff and the defendants. …

… “[A] partnership is a voluntary, contractual association in which persons carry on a business for profit as co-owners. In the agreement establishing a partnership, the partners can chart their own course” … . … [W]hile New York’s Partnership Law provides certain default provisions where a partnership agreement is silent, where the agreement clearly sets forth the terms between the partners, it is the agreement that governs … .

Here, the partnership agreement expressly provides that the partnership “shall not be dissolved” upon the resignation of a partner. The terms of the partnership agreement take precedence over Partnership Law § 62, which permits a partnership to be dissolved at any time by any partner. The firm was not dissolved, but rather, the plaintiff withdrew from the firm on August 3, 2010. Accordingly, pursuant to the terms of the partnership agreement, the plaintiff was entitled to the buyout price, as defined in that agreement, and payable in accordance with the terms of that agreement. Zohar v LaRock, 2020 NY Slip Op 04202, Second Dept 7-22-20

July 22, 2020

Attorneys, Criminal Law

THE INITIAL PROSECUTOR IN DEFENDANT’S CASE BECAME THE TRIAL JUDGE’S LAW CLERK; DEFENDANT WAS NOT INFORMED AND WAIVED HIS RIGHT TO A JURY TRIAL; THE WAIVER WAS NOT ‘KNOWINGLY’ AND ‘INTELLIGENTLY’ MADE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined defendant’s motion to vacate his conviction after a bench trial should have been granted. The initial prosecutor in defendant’s case became the trial judge’s law clerk. Defendant was never informed and waived his right to a jury trial. Defendant argued he would not have waived a jury trial had he known the former prosecutor was the trial judge’s law clerk:

The evidence at the hearing established that the prosecutor who appeared for over six months on the People’s behalf during the preliminary proceedings in this case was subsequently appointed to serve as the trial court’s confidential law clerk. When the law clerk brought that conflict to the trial court’s attention, the trial court appropriately screened the law clerk off from any participation in this case. When defendant sought to waive his right to a jury trial and to be tried by the court alone, however, the trial court—which had recognized the conflict and had already taken steps to mitigate it—failed to inform defendant that its law clerk had previously prosecuted defendant in this case. Moreover, although defense counsel was aware of the law clerk’s prior role as prosecutor, it is undisputed that defense counsel failed to inform defendant of that fact. Defense counsel subsequently admitted that, had he recalled the fact that the prosecutor had become the trial court’s law clerk, he would have advised defendant to retain his right to a jury trial. Additionally, defendant testified at the posttrial hearing that he would not have waived his right to a jury trial had he been aware of the fact that his former prosecutor was now serving as the trial court’s law clerk. Contrary to the motion court’s determination, defendant’s testimony in that regard was not incredible. Indeed, defendant identified rational, case-specific reasons why he distrusted the fairness of the law clerk.

Under the unique circumstances of this case, we conclude that defendant’s waiver of his right to a jury trial, which was made when he was the only participant in the waiver proceeding who was ignorant of the fact that his former prosecutor had become the trial judge’s legal advisor, was not tendered “knowingly and understandingly” and was not “based on an intelligent, informed judgment” … . People v Mineccia, 2020 NY Slip Op 04028, Fourth Dept 7-17-20

July 17, 2020

Attorneys, Employment Law, Municipal Law

FIREFIGHTER WAS SOLELY RESPONSIBLE FOR THE DELAY IN HOLDING HIS DISCIPLINARY HEARING AND THEREFORE WAS NOT ENTITLED TO BACK PAY FOR THE PRE-HEARING PERIOD OF SUSPENSION (FOURTH DEPT).

The Fourth Department, reversing Supreme Court. determined a firefighter was not entitled to back pay for the suspension period while awaiting a disciplinary hearing because the firefighter (or his attorney) was responsible for the delay:

Civil Service Law § 75 provides that a public employee may be suspended without pay for a maximum of 30 days while awaiting a hearing on disciplinary charges (see § 75 [3]). Although an employee suspended without pay for a longer period under those circumstances is generally entitled to receive back pay, he or she waives any claim to back pay if a delay in the disciplinary hearing beyond the 30-day maximum is “occasioned by” his or her own conduct … .

We agree with respondents that petitioner is not entitled to reinstatement or back pay because petitioner was solely responsible for the delay. Petitioner’s attorney is an experienced practitioner familiar with Civil Rights Law § 50-a. As such, petitioner’s attorney either knew or should have known that, in order to secure production of the [the disciplinary file of Kelly, another firefighter], section 50-a required that he obtain either Kelly’s consent or a court order. Indeed, respondents publicly announced in multiple press releases several months before the arbitration that Kelly’s file was confidential pursuant to section 50-a. Moreover, petitioner’s attorney had specific knowledge of the contents of the file because he was involved professionally in the investigation of Kelly’s misconduct. Based on that experience and knowledge, petitioner could have taken steps to obtain the file long before the arbitration commenced, such as asking Kelly for his consent or commencing a proceeding to obtain a court order. Because petitioner failed to take any action, “the entire period of delay in holding the hearing resulted from his dilatory tactics” … . Matter of Carcone v City of Utica, 2020 NY Slip Op 04103, Fourth Dept 7-17-20

July 17, 2020

Attorneys, Criminal Law, Evidence

THE EX PARTE ORDER ALLOWING THE PROSECUTOR TO SEIZE AND READ DEFENDANT’S NON-LEGAL MAIL DID NOT REQUIRE DISQUALIFICATION OF THE PROSECUTOR OR A MISTRIAL; THE PROSECUTOR’S DEMONSTRATION OF THE OPERATION OF THE MURDER WEAPON (A KNIFE) DID NOT WARRANT A MISTRIAL; AND THE FAILURE TO NOTIFY THE COURT AND THE ATTORNEYS OF THE JURY NOTE REQUESTING THE EXAMINATION OF THE KNIFE WAS NOT AN O’RAMA VIOLATION AND DID NOT WARRANT A MISTRIAL (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Oing, affirmed defendant’s murder conviction after addressing several unusual issues in depth: (1) The prosecutor obtained a ex parte order allowing the opening and reading of defendant’s non-legal mail to determine whether defendant was threatening an eyewitness. After reading two batches of mail, the prosecutor determined no threats were being made, informed defense counsel of the order and turned the mail over to defense counsel. The First Department determined there were no related grounds for disqualifying the prosecutor or for granting a mistrial. (2) When the defendant was on the stand he denied knowing the knife (murder weapon) could be flipped open with one hand. During her questioning the prosecutor demonstrated that the knife could be flipped open. The Second Department determined the “prosecutor-as-an-unsworn witness” argument did not warrant a mistrial, in part because of the curative instructions to the jury. (3) The knife was brought into the jury room after a request from the jury about which the court and the attorneys were not made aware. The judge and the attorneys had agreed that the jury’s examination of the knife would be allowed and the examination was done according to the agreed procedure. This was not an O’Rama violation because it involved only the examination of a physical object, not an instruction or the substance of any trial evidence. Therefore a mistrial on this ground was not warranted. People v Jenkins, 2020 NY Slip Op 04014, First Dept 7-16-20

July 16, 2020

Attorneys

PLAINTIFF COULD NOT MOVE TO DISQUALIFY LAW FIRMS WHICH NEVER REPRESENTED PLAINTIFF (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff did not have standing to move to disqualify two law firms (SZA and ABZ), one of which represented defendant, on conflict of interest grounds in this foreclosure/property-ownership dispute because neither law firm ever represented plaintiff. Apparently there was some overlap of personnel in the two law firms:

The basis for a disqualification motion is the alleged breach of the fiduciary duty owed by an attorney to a current or former client … . When the law firm targeted by the disqualification motion has never represented the moving party, that firm owes no duty to that party. “[I]t follows that if there is no duty owed there can be no duty breached” … . Since plaintiff never had an attorney-client relationship with either SZA or ABZ, plaintiff had no standing to bring a motion to disqualify … .

To be sure, a court has the authority to act sua sponte to disqualify counsel if it finds a conflict of interest warranting disqualification … . However, the record before us does not support disqualification. The two defendants present a united front to plaintiff at this juncture. Their answers raise virtually the same affirmative defenses and counterclaims to the complaint, and the defenses and counterclaims of one defendant do not undermine the position of the other … . If defendants’ interests do come to diverge in this litigation then counsel of course has a duty to ensure compliance with rule 1.7 of the New York Rules of Professional Conduct (22 NYCRR 1200.0). HSBC Bank USA, N.A. v Santos, 2020 NY Slip Op 03976, First Dept 7-16-20