COUNTY OF NASSAU. Plaintiff, Defendant.
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1 SCAN SHORT FORM ORDER SUPREME COURT - STATE OF NEW YORK COUNTY OF NASSAU PRESENT: CRONIN CRONIN HON. IRA B. WARSHAWSKY, Justice. & BYCZEK, LLP, formerly TRAGER, & BYCZEK, LLP, TRIAL/IAS PART 20 - against - Plaintiff, INDEX NO.: /2000 \ MOTION DATE: 0 l/27/2003 MOTION SEQUENCE: 04 & 05 PATROLMEN S BENEVOLENT ASSOCIATION OF THE CITY OF NEW YORK, INCORPORATED, Defendant. The following papers read on this motion: Notice of Motion, Affirmation & Exhibits Annexed... 1 Memorandum of Law in Support... 2 Notice of Cross Motion, Affirmation, Affidavit & Exhibits Annexed Memorandum of Law in Opposition... 4 Affidavit of Joseph Alejandro & Exhibits Annexed... 5 Affidavit of Frank Bruno & Exhibits Annexed... 6 Affidavit of Rosemary DiBenedetto & Exhibits Annexed... 7 Affidavit of Michael Ratner & Exhibit Annexed... 8 Reply Affirmation & Affidavits... 9 Plaintiffs Reply Memorandum of Law Defendant s Reply Memorandum of Law This motion by defendant Patrolmen s Benevolent Association of the City of New York, Incorporated ( PBA ), for an order pursuant to CPLR (e) granting partial
2 summary judgment limiting PBA s potential liability to the plaintiff Cronin & Byczek, LLP, formerly Trager, Cronin & Byczek, LLP ( Cronin& Byczek ) for only those services rendered on behalf of PBA from July 1, 1999, up to and through September 30, 1999, with certain specified exceptions, is granted. The cross motion by plaintiff Cronin & Byczek for an order pursuant to CPLR 3212(e) granting partial summary judgment with respect to the defendant PBA s liability for various legal services rendered to its members is denied. This is an action to recover for legal fees allegedly owed to the plaintiff law firm by the defendant PBA for services rendered to PBA s members. The plaintiff law firm seeks to recover on a theory of breach of contract, quantum meruit, unjust enrichment, breach of implied covenant of good faith and promissory estoppel. The defendant PBA has counterclaimed for legal malpractice, breach of contract and breach of fiduciary duty. In January, 1998, Lysaght, Lysaght and Kramer, the law firm handling the defendant PBA members legal business, ceased doing business. Pursuant to an agreement with the defendant PBA, its caseload was temporarily assumed by the plaintiff law firm which was formed by three attorneys who had worked at Lysaght, Lysaght and Kramer. After engaging in the competitive bidding process, the defendant PBA elected to contract with other law firms to handle its members legal work. PBA s members were so notified via letter dated November 9, 1998 of the new law firm and asked to substitute counsel or seek permission to stay with their present law firm. Transfer of the many pending matters being handled by the plaintiff law firm presented some obvious practical difficulties. As a consequence, meetings and negotiations were held and various agreements were reached, including two written agreements. The first, dated December 3, 1998, settled all claims through October 3 1, 1998, set hourly rates, and required written permission from the PBA for any continued representation. The aforesaid agreement specifically required mediation in the event of a dispute as a prerequisite to suit. -2-
3 The second agreement dated March 12, 1999, specifically stated that it superseded the December 3, 1998 agreement. It provided for a flat fee monthly retainer for various cases, and contained a sunset clause terminating the plaintiff law firm s services as of September 30, 1999, unless approved by the defendant PBA. While the March 12, 1999 agreement anticipated that an agreement as to future services might occur, none did. However, the plaintiff law firm was specifically permitted to handle certain cases beyond the September 30, 1999 sunset date. By letter dated September 27, 1999, the defendant PBA notified its members for the second time of the new law firm engaged to provide legal services and clearly declared that no other law firm would be paid by the PBA as of November 1 (1999) unless exceptional circumstances existed and the member would be substantially prejudiced by a change of counsel. Permission to continue with a law firm other than that hired by the PBA and to have its fees paid by the PBA was clearly required. When the defendant PBA refused to pay the plaintiff law firm for services rendered to its members, this action was commenced. Defendant PBA seeks summary judgment limiting its liability on the grounds that the parties agreed that Cronin & Byczek would not be paid for any services rendered after September 30, 1999, by the agreement of March 12, 1999, unless approved by the defendant PBA. PBA seeks to limit its liability in this action accordingly but acknowledges that the limitation does not apply to the 70th precinct case (PBA et al. v Citv of New York. et al., S.D.N.Y. No. 97 Civ. 9895), or to three other specific cases in which the plaintiff law firm was authorized to continue its representation after September 30, In opposition, the plaintiff law firm maintains that the March 12, 1999 agreement was never executed by the defendant PBA and is therefor not enforceable. Then it argues that the first agreement, dated December 3, 1998, placed no such limitation on the defendant PBA s liability for services rendered to PBA members. Plaintiff points out that not only did the PBA never execute the March 12, 1999 agreement, but earlier it also -3-
4 sought dismissal of the action pursuant to CPLR on the grounds that the December 3, 1998 agreement required mediation prior to suit and the March 12, 1999 agreement was unenforceable by reason of never having been executed. However, in resisting the PBA s attempt to have this action dismissed on the ground that mediation was required by the December 3, 1998 agreement, Cronin & Byczek relied on the March 12, 1999 agreement as superseding the December 3, 1998 agreement. Now, when the defendant PBA cites the March 12, 1999 agreement as a limit of its potential liability, plaintiff Cronin & Byczek disavows that agreement s enforceability, maintaining that the defendant PBA never executed it. In its decision dated January 16,2001, the court (O Connell, J.) found: there is a possibility that the defendant [PBA] performed the terms of the second retainer agreement [i.e., the March 12, 1999 agreement] by making payments for legal fees owed and accrued after December 1, Defendant PBA now concedes the enforceability of the March 1999 agreement. The issue of fact found by this court to be outstanding has been resolved. Thus having avoided mediation by relying on the March 12, 1999 agreement, the plaintiff law firm simply may not now adopt a diametrically opposed position and deny the enforceability of this agreement to create an issue of fact. Nestor v Britt, 270 AD2d 192 (1 Dept 2000); Clifton Countv Road Associates v Vinciguerra, 252 AD2d 792 (3d Dept 1998); Pace v Assessor of Town of Islin, 252 AD2d 88, Iv to arm den., 93 NY2d 805. Payment of the plaintiff law firm s fees up through June 30, 1999 is not in dispute. A contract which specifies the period of its duration terminates on the expiration of such period. 22A N.Y. Jut-. 2d Contracts $49 1; National Telecommunications Consultants Inc. v United Artists Theater Circuit, Inc., 225 AD2d 750 (2d Dept 1996). Pursuant to the parties written agreement, the plaintiff law firm s contractual entitlement to fees expired on September 30, Furthermore, in light of the written agreements which clearly encompass the -4-
5 services for which payment is sought, the plaintiff law firm may not recover under theories of unjust enrichment or quantum merit. Clark -Fitznatrick. Inc. v Long; Is. R.R. Co.. 70 NY2d 382 (1987).. Even if such a claim could be advanced, with the limited exceptions already conceded by the defendant PBA, there is no evidence that defendant ever agreed to pay for services in addition to those specifically addressed by the written agreements. Swan v Dolphin Lane Associates. Ltd., 92 AD2d 608,609 (2d Dept 1983); Binderman v Kazdan, 145 Misc.2d 628, citing to Matter of Loomis, 247 App. Div. 411 a.,273 N.Y. 76. Needless to say, the defendant PBA may not be held responsible to the plaintiff law firm for services which its members individually agreed to. Krehel v Eastern Orthodox Catholic Church in America, 10 NY2d 83 1 (196 1); comnare, Cooner v Cranin, 104 AD2d 550 (2d Dept 1984). Cronin & Byczek s third cause of action brought on the theory of promissory estoppel is similarly unavailing. To invoke this doctrine, there must be reliance on a promise. Here, it is clear that Cronin & Byczek was well aware of the defendant PBA s position regarding termination of their relationship before the September 30, 1999 expiration date, and therefore reasonable reliance could not exist. Cronin & Byczek s fourth cause of action alleging a breach of the implied covenant of good faith also fails. While such a duty is implicit in all contracts, it without limits, and no obligation can be implied that 384,389 (1995), (quoting Murphy v American Home Prods. Corn., 58 Since by its explicit terms, the parties -5- NY2d 293,304). agreement ended on September 30, 1999, this theory fails. Insofar as the plaintiff law firm alleges waste and mismanagement of resources by the defendant PBA, this claim, if there be one, belongs to PBA members, not the plaintiff law firm. Lastly, the court notes that there is no evidence that the plaintiff law would be inconsistent with other terms of the contractual relationship. Dalton v Educational Testing Service, 87 fum ever attempted to mitigate its damages despite its knowledge that the defendant PBA would NY2d is not
6 not pay for services rendered after September 30, 1999, with limited exceptions. As for Cronin & Byczek s contention that the defendant PBA had no right to dictate its members choice of counsel and that it is accordingly obliged to pay for whatever legal services are procured by its member, it is most questionable that the plaintiff law firm even has standing to advance this claim. It is not a member of the PBA, nor a party to the Legal Trust. The Agreement and Declaration of Trust which establishes the Legal Services Fund makes it clear that it is the Trust Fund s Board of Trustees that controls its operation, management and administration. It is specifically given the power to establish, maintain and defray the expenses of a prepaid group legal plan for the purposes of furnishing legal and related services; to determine all questions of the nature, amount and duration of benefits and of expenditures which may be provided for the purposes of financing the legal services plan; to determine the extent of the legal services plan and benefit which the Fund can provide without undue depletion; [and]& enter into contracts with nrivate law firms for the mu-noses of nroviding legal services... (emphasis added). The Trustees are the only ones authorized to pay for legal services and they have the exclusive authority to manage, control and dispose of assets. The members simply and clearly lack the ability to control the fund s assets. Furthermore, the court notes that in other settings, a PBA member s right to choose counsel paid for by the association has in fact been denied. (See, Suffolk Countv Patrolmen s Benevolent Ass n, Inc. v Suffolk Countv, 751 F.2d 550; Motherswell v Citv of Syracuse, 952 F. Supp. 112; Fanelli v Town of Harrison, 46 F. Supp. 2d 254). The plaintiff, Cronin & Byczek, does not dispute that it has been fully paid for all services rendered through June 30, It cannot avoid the time limitation contained in the March 12, 1999 agreement; the defendant PBA s contractual obligation to compensate the plaintiff law firm terminated on September 30, Cronin & Byczek has failed to raise an issue of fact as to any agreement by the defendant PBA to the contrary. Assuming, arguendo, that PBA representative Frank Bruno assured the plaintiff law firm -6
7 this is America, if you did work, you re gonna get paid, that statement was allegedly made at a meeting on September 8, 1999, and accordingly cannot be relied upon to establish an agreement by the defendant PBA to pay for services rendered after September 30, As for plaintiffs cross motion, it fails to set forth specifically what relief it seeks. Instead, it disconnectedly refers to various legal matters and periods of time and seeks summary judgment with respect to them. [Wlhen a viable counterclaim arises from the same underlying transaction as is involved in the main action and is inseparable from or inextricably intertwined with that transaction, summary judgment should be denied. yoi_ Lee Realtv Corp. v 177 h St. Realtv Assocs., 208 AD2d 185, 189 [citations omitted]; see also, MHA Inc. v Consulting; for Architects Inc., 244 AD2d 169. In this case, the defendant PBA has not yet completed discovery to which it is entitled. It has not yet examined the plaintiff law firm s files, deposed the attorneys who did the work or deposed its members for whom work was done. Summary judgment in favor of the plaintiff law firm at this juncture would be inappropriate. CPLR 3212 [fl; Yu v Forero, 184 AD2d 506. Finally, certain matters referred to by the plaintiff law firm need be addressed. - The plaintiff law firm has not specifically set forth what efforts were made---and when---with respect to the 70* precinct case. That information is crucial. Cronin & Byczek s entitlement to $640, for work allegedly done on this case has not been firmly established, particularly in view of the March 12, 1999 agreement s fee limitations. And, the plaintiff law firm has not addressed the status of its possible entitlement to a fee award pursuant to 28 USC (b) in that case. The plaintiff law firm appears to have sought fees in the 111 precinct case for services rendered before June 30, 1999, although its fees were seemingly paid in full through June 30, It also seeks fees after May, 2000, at which time the plaintiff law firm acknowledges that it was substituted. Lastly, a motion to dismiss that case was made -7-
8 before June 30, 1999, and ultimately granted. Thus, the very propriety of legal services is open to question. While the plaintiff law firm was authorized in a letter dated November 2, 1999 to continue work in the Piauette, Medina, and Niklas cases, what services were rendered and whether malpractice occurred precludes summary judgment with respect to those cases. Lastly, while the March 12, 1999 agreement contemplated payment for July, August and September, 1999, the proof indicates that the defendant PBA may have terminated the plaintiff law firm s services even sooner, thus leaving the plaintiff law firm entitled to a recovery based only on quantum merit only for the period between early termination and the sunset date, assuming that the discharge was without cause. Campag;nola v Mulholland. Minion & Roe, 76 NY2d 38,44 (1990). In conclusion, as required by the parties March 12, 1999 written agreement, the defendant PBA s potential liability is limited to services rendered by the plaintiff law firm from July 1, 1999 to September 30, 1999, with the exception of the aforementioned cases for which the defendant PBA agreed to continue compensating the plaintiff law firm. All other claims by the plaintiff law firm are dismissed, and it is SO ORDERED. Dated: March 6,2003 A:\Data\Warshawsky\Cronin.MLPwpd -8-
SUPREME COURT - ST ATE OF NEW YORK IAS TERM PART 12 NASSAU COUNTY. The following papers were read on Plaintiffs motion for summary
INDEX No. 13201-06 SUPREME COURT - ST ATE OF NEW YORK IAS TERM PART 12 NASSAU COUNTY PRESENT: HONORABLE DENNIS P. RAICO, - against - LEONARD B. AUSTIN Justice Motion RID: 11-20- Submission Date: 12-10-07
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