Schindler v Lester Schwab Katz & Dwyer, LLP 2011 NY Slip Op 31519(U) June 6, 2011 Supreme Court, New York County Docket Number: /2010 Judge:
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1 Schindler v Lester Schwab Katz & Dwyer, LLP 2011 NY Slip Op 31519(U) June 6, 2011 Supreme Court, New York County Docket Number: /2010 Judge: Judith J. Gische Republished from New York State Unified Court System's E-Courts Service. Search E-Courts ( for any additional information on this case. This opinion is uncorrected and not selected for official publication.
2 [* 1] SCANNED ON t P, SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY HON. 4UDITf-l J. GISCHE D P E C E hl T - Index Number : /2010 SCHINDLER, RANDY vs LESTER SCHWAB KATZ & Sequence Number : 001 DISMISS COMPLAINT INDEX NO. MOTION DATE MOTION $Ea. NO. MOTION CAL. NO. PART i 0 The following papers, numbered 1 to were read on this motion to/for Notlce of Motion/ Order to Show Cause - Affidavits - Exhibits... Answering Affidavits - Exhibits PAPERS NUMBERED Replying Affidavit8 Cross-Motion: \Ayes 0 NO J Upon the foregoing papers, It is ordered that this motion Dated: FILED RllOflON IS DECIDED IN ACCORDAN- L THE ACCOMPANYING MEMORANDUM NEW YORK COUNTY CLERK'S OFFICE / FILED JUN NEW YORK COUNTY CLERK'S OFFICE Check one: &NnL DiSPOSiTiON NOkadAL D~SPOS~T~ON Check if appropriate: 0 DO NOT POST 0 REFERENCE 0 SUBMIT ORDER/ JUDG. n SETTLE ORDER/ JUDG.
3 [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IAS PART 10 Randy Schindler, Plaintiff (s), DECISION/ ORDER Index No.: Seq. No.: 001 -against- Lester Schwab Katz & Dwyer, LLP and Jonathan A. Murphy, Esq. PRESENT: Hon. Judith J. Gische J.S.C. FILED 3UN Recitation, as required by CPLR [a] of the papers consi&w&mwe review of this (these) motion(s): COUNTY CLERK S OFFICE Papers Numbered 1.- Defs n/m (321 I [a][5]) SBG affirm, exhs... I Pltfs x/m (compel) w/dsc affirm, exhs... 2 Defs opp and reply w/sbg affirm... 3 Upon the foregoing papers, the decision and order of the court is as follonls: This is an action for attorney malpractice, breach of fiduciary duty and violations of Judiciary Law 487 brought by Randy Schindler ( Schindler ), the former client of the defendants, who are an attorney and a law firm. Defendants (collectively Lester Schwab ) move for the pre-answer dismissal of the complaint on the basis that Schindler s claims are barred by the doctrine of collateral estoppel (CPLR [a] 51) and pursuant to CPLR Defendants also seek sanctions, claiming this action is frivolous (22 NYCRR [c]). Schindler has filed a late cross motion which the defendants urge the court to reject. Since defendants have addressed the cross motion -Page 1 of 13-.
4 [* 3].... on the merits and for other reasons that will soon be made clear, the cross motion is accepted and will be decided on the merits along with the defendants motion in chief. The Dispute 0 Plaintiff alleges the following in his complaint: Schindler was sued by non-party, Fish 8 Richardson, P.C. for unpaid legal fees in a prior action [Index no which appeared before Hon. Shirley W. Kornreich ( the legal fees action ). Defendants were Schindler s attorneys in the legal fees action. Schindler alleges they committed legal malpractice, breached their fiduciary duty to him and violated Judiciary Law by, among other things, failing to prepare and serve discovery responses on his behalf. By failing to do so, they violated court orders issue by the Hon. Shirley W. Kornreich. Eventually, defendants brought a motion to be relieved which was granted by order of Judge Kornreich, dated July 31, According to Schindler, it was defendants failure to comply with discovery that resulted in Fish & Richardson obtaining a default judgment against him because Judge Kornreich ordered his answer stricken. Schindler alleges further that after defendants were relieved as his attorneys, defendant Jonathan Murphy, Esq., ( Attorney Murphy ) submitted an affidavit in the legal fees action without Schindler s consent. According to Schindler, Attorney Murphy did this at the request of Fish & Richardson s attorney. The submission of that affidavit (dated November 26, 2008) is an alleged breach of defendants duty to plaintiff and an evidence that defendants had an inherent conflict of interest. Schindler contends he suffered damages as a result of these actions. Defendants paint a dramatically different picture of the events in the legal fees -Page 2 of 13-
5 [* 4] action: Despite court orders directing Schindler to provide Fish & Richardson with discovery, none was provided despite the passage of several months. The preliminary conference was held in December 2007 in the legal fees action and by June 2008, Lester Schwab moved by Order to Show Cause to be relieved as Schindler s attorneys. Hon. Sherry Klein Heitler directed that Lester Schwab serve Schindler with the motion to be relieved, at the only known address for Schindler, which was a post office box in Southampton, which they did. In his supporting affirmation, Attorney Murphy stated that Schindler had not only failed to pay Lester Schwab s fees, Schindler was not providing the firm any direction on how to proceed in the legal fees action. More importantly, Attorney Murphy stated that the firm had been [unable] to secure [Schindler s] cooperation to complete discovery in this matter, notwithstanding numerous request for such cooperation. The affirmation goes on to list all the discovery that Schindler had failed to provide, despite their entreaties that he comply. In her decision dated July 31, 2008, Judge Kornreich granted Lester Schwab s motion to be relieved, noting that the firm had filed proof of service, and directing Lester Schwab to serve a copy of her order with notice of entry on Schindler, which they did. The decision was rendered on default because Schindler did not appear or file opposition thereto. Judge Kornreich stayed the case to allow Schindler to obtain new counsel and scheduled a status conference for September 4, She also ordered Schindler to provide a residential mailing address as the only address for him was the P.O. Box in Southampton. -Page 3 of 13-
6 [* 5] Schindler defaulted in appearing for the status conference. The court issued a compliance order and scheduled a further conference for October 2, 2008, noting Schindler s default and failure to provide a residential address. Lester Schwab, as directed, served that order on Schindler via first class mail to the same P.O. Box on file for him. Schindler retained new counsel (the firm representing him on these motions) the morning of October 2, By Order to Show Cause dated October 20, 2008, Fish & Richardson brought a motion for entry of a default judgment against Schindler or, alternatively, discovery sanctions. Schindler opposed the motion stating, in effect, that it was Lester Schwab s fault that discovery had not been provided and that he had not been aware of the court s discovery orders. Schindler also stated that he was sick and on medication which had psychological side effects affecting his ability to more closely follow the legal fees action. Schindler vowed that he would have complied with discovery had he known of Judge Kornreich s orders, and that his nonappearance at the status conference was inadvertent. He stated that his default arose from [his] lack of legal representation and [his] misunderstanding of these proceedings. Judge Kornreich granted Fish & Richardson s motion for a default judgment in a nine (9) page decision and order dated March 20, 2009 ( default order ). In the default order, Judge Kornreich details Schindler s numerous discovery violations and the efforts made to enlist Schindler s cooperation with discovery before and after Lester Schwab was relieved as counsel. Judge Kornreich states that Schindler s continued violation of four separate court orders... over a period of approximately 10 months clearly constitutes wilful and contumacious conduct...i and that the excuses offered by him -Page 4 of 13-
7 [* 6] did not suffice. Notably, Judge Kornreich addressed Schindler s claims of illness, ruling that he had offered no medical documentation of his illness and therefore, it did not constitute a reasonable excuse for why he had not provided discovery. Judge Kornreich also rejected Schindler s claims, that Lester Schwab had failed in notifying him of outstanding discovery demands stating the following: Finally, Mr. Schindler cites the law office failure of his former counsel LSKD [Lester Schwab]. However, the documentary evidence repudiates this allegation... I Judge Kornreich also repudiated Schindler s other claims, that he had been improperly served with the orders that she had directed Lester Schwab to serve on him, noting that Schindler s mere denial of receipt does not on its own rebut the presumption created by [Lester Schwab s employee s] affidavit that proper service was effectuated. Khil, 94 NY2d at I Judge Kornreich noted that even after he obtained new counsel (the firm now representing ), Schindler still did not provide any of the discovery demanded or comply with her orders. Judge Kornreich s decision was unanimously affirmed on appeal shortly after defendants brought this motion (Fish & Richardson v. Schindler, 75 AD3d 219 [Ist Dept 2010]). Writing for the court, Hon. Rosalyn Richter found that Schindler had flouted court orders and despite due proof of service of those orders, not only by postal mail but also , Schindler had failed to appear in court to defend himself or provide the discovery demanded of him. Judge Richter also found that [Schindler s] continued failure to provide the outstanding discovery in response to [Fish & Richardson s] motion to strike belies any claim that it was his former lawyers [Lester Schwab] who were to -Page 5 of 13-
8 [* 7] blame for his noncompliance with the court s orders. The court also specifically addressed and rejected Schindler s claims of illness because they were not supported by any medical documentation. Based upon these events, defendants argue that all of plaintiffs claims are barred by the doctrine of collateral estoppel, because the issue raised in this proceeding had been previously adjudicated adverse to Schindler. Defendants argue that Schindler could have opposed their motion to be relieved in the legal fees action and litigated their claim, that he was being uncooperative. They argue further that the decision by Judge Kornreich to strike Schindler s answer as a discovery sanction and. direct entry of a default judgment collaterally estops Schindler from arguing in the case at bar that his non-compliance with Judge Kornreich s orders was excusable or attributable to actions by someone other than Schindler himself. Discuss 1 on Although plaintiff opposes this motiqn to dismiss as if it were based upon 3211 [a][7] (failure to state a cause of action), regardless of which subsection of CPLR 321 l[a] a motion to dismiss is brought under, the court must accept the facts alleged in the pleading as true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326 [2002]; Leon v. Martinez, 84 N.Y.2d 83, 87 [1994]). A complaint may be dismissed pre-answer on the basis of collateral estoppel (CPLR 3211 [a][5]). The doctrine of collateral estoppel precludes a party from re-litigating in a subsequent action or proceeding an issue clearly raised in a prior action -Page 6 of 13-
9 [* 8] or proceeding and decided against that party or those in privity (see Buechel v, Bain, 97 N.Y.2d 295, 303 [2001], cerf. denied 535 U.S [2002]; Ryan v. New York Tel. Co., 62 N.Y.2d 494, 500 [I9841). There are two requirements that must be met before collateral estoppel can be invoked. The first is that there must be an identity of issue which has necessarily been decided in the prior action and is decisive of the present action, and there must have been a full and fair opportunity to contest the decision now said to be controlling (Buechel v. Bain, 97 N.Y.2d at ). While CPLR 3211 [a][5] does not directly require the production of documents by the party seeking dismissal of a pleading like CPLR 3211 [a][l] does, this is implied because of the very nature of a collateral estoppel claim which requires that the court look beyond the pleadings before it (see, Bouquet Brands Div. of J & D Food Sales, Inc. v. Citibank (New York State). N.A., 97 A.D.2d 936 [3rd Dept 19831). Here, the issue in dispute is the defendants alleged legal malpractice. The doctrine of collateral estoppel is a flexible doctrine grounded in the facts and realities of a particular litigation which should not be rigidly or mechanically applied since it is, at its core, an equitable doctrine reflecting general concepts of fairness (Buechel v. Bain, 97 N.Y.2d at 303). Applying this legal principle, it is readily apparent that the issue of whether Lester Schwab capably represented Schindler in the legal fees action was decided, not only in Judge Kornreich s decision granting Lester Schwab s motion and in the decision granting Fish & Richardson s motion to strike Schindler s answer and allowing it to enter a default judgment against him, but also addressed in the decision of Judge Richter rendered on appeal. The decisions by Judge Kornreich were before the Appellate Division when Schindler appealed and it is clear from Judge Richter s -Page 7 of 137
10 [* 9] decision that the Appellate Division rejected all of Schindler s explanations and defenses for why he failed to provide discovery. In any event, even if the court were persuaded that Schindler s claims are not collaterally estopped by the events that preceded this action, based on this record, plaintiffs claims are entirely too speculative to support a recovery against the defendants, affording the plaintiff the benefit of every possible inference (Lombardi v. Giannattasio, 192 A.D.2d 512 [2nd Dept.,1993]). Although Schindler has the right to rest on his complaint in opposing the motion to dismiss, he has not provided a sworn affidavit in support of his cross motion explaining why he did not comply with Judge Kornreich s discovery orders once he obtained new counsel. His failure to make amends belies any claim that Schindler misunderstood the proceedings against him or was mislead by counsel about what his discovery responsibilities were. As for Schindler s claims against Attorney Murphy individually, they are entirely without any factual basis. Attorney Murphy provided the November 26, 2008 affidavit because he was ordered to by Judge Kornreich pursuant to her order of November 6, The order was issued in connection with Fish & Richardson s motion for leave to serve a subpoena on Schindler. She ordered that Fish & Richardson seek and obtain an affidavit from someone with knowledge from plaintiffs prior firm Lester Schwab, (Jonathan Murphy), as to whether a copy of my decision relieving them as counsel was served upon defendant and when. Thus, Attorney Murphy s affidavit was little more than an affidavit of service, not the destructive document that Schindler portrays it to be. Plaintiff contends that he should be permitted discovery so that he may uncover -Page 8 of 13-
11 [* 10] facts and necessary information that is necessary for him to bolster his claims against the defendants. To properly support a claim for legal malpractice action, the client must meet the case within a case requirement, demonstrating that but for the attorney s conduct the client would have prevailed in the underlying matter or would not have sustained any ascertainable damages (Weil. Gotshal 8 Manses, LLP v. Fashion Boutique of Short Hills, Inc., 10 A.D.3d 267 [Ist Dept 20041). Schindler presumes that discovery may help him establish that Lester Schwab was not in regular contact with him. However, the underlying issue in this malpractice action is that a default judgment was entered against him for legal fees he owed to Fish & Richardson. Consequently, Schindler s request for discovery is not a reason to deny defendants motion to dismiss because he offers no facts tending to show that but for the actions by Lester Schwab and Attorney Murphy, he would have defeated the legal fees action against him. Therefore, plaintiffs cross motion for discovery is denied. As for plaintiffs claim for breach of fiduciary duty, it is premised on the same facts and seeking the identical relief sought in the legal malpractice cause of action, making it redundant of that claim; it is dismissed for that reason (Weil, Gotshal & Manqes, LLP v. Fashion Boutique of Short Hills, Inc., supra). After careful consideration of defendants motion to dismiss and the circumstances of this case, the motion is granted and the complaint against them is dismissed in its entirety. While factual allegations contained in a complaint should be accorded a favorable inference, bare legal conclusions and inherently incredible facts are not entitled to preferential consideration ($ud v. Sud, 21 I A.D.2d 423 [Ist Dept 19951). -Page 9 of 13-
12 [* 11] Turning to the second branch of defendants motion, the court considers whether, as claimed by defendants, Schindler and his present attorneys, the firm of Danzig, Fishman & Decea, have engaged in frivolous conduct within the meaning of 22 NYCRR [c], such that sanctions should be imposed against either or both of them. Conduct is conduct is frivolous if: (I) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false. Frivolous conduct shall include the making of a frivolous motion for costs or sanctions under this section. In determining whether the conduct undertaken was frivolous, the court shall consider, among other issues the circumstances under which the conduct took place, including the time available for investigating the legal or factual basis of the conduct, and whether or not the conduct was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel or the party. In opposition to defendants motion for sanctions not only against their client, but against the firm itself, plaintiffs attorneys, Danzig, Fishman & Decea states, through the affirmation of Donald S. Campbell, Esq. ( Attorney Campbell ), that the claims by Schindler in this case are completely different from the issues that were before Judge Kornreich to decide. Attorney Campbell insists that Attorney Murphy was conflicted and breached his duty of fiduciary duty to Schindler by providing the sworn affidavit that he did, after he was relieved as counsel. According to Attorney Campbell, Attorney -Page 10 of 13-
13 [* 12] Murphy should have notified Schindler he was going to be providing the affidavit before he did so, even though Judge Kornreich ordered Attorney Murphy to do so, because the information Attorney Murphy was damaging and to Schindler's disadvantage. Sanctions pursuant to Part 130 are discretionary, but cannot be summarily imposed. An award must be based on a motion properly brought or upon the court's own initiative, after a reasonable opportunity to be heard. Schindler claims that Attorney Murphy engaged in attorney misconduct, as defined under Judiciary Law 5 487, because he provided the sworn affidavit that Judge Kornreich ordered him to provide. There is no proof that Attorney Murphy's affidavit was an act of disloyalty to his former client, in any way compromised Schindler's former confidences to him or was otherwise a breach of fiduciary duty or a conflict of interest such that Judiciary Law would be applicable (Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d I [Ist Dept ). Neither Schindler nor Attorney Campbell contend that any of the statements made in Attorney Murphy's affidavit are untrue. Nothing in the affidavit is of a confidential nature. None of the legal authority relied on by Attorney Campbell supports his legal argument, that Attorney Murphy should not have complied with Judge Kornreich's order or, at a minimum, notified Schindler before filing the affidavit he was ordered to provide. The affidavit is little more than an affidavit of service. Therefore, in asserting a claim (3'' cause of action) against the defendants for violations of Judiciary Law 487, Schindler and the firm of is frivolous, within the meaning of Part 130 sanctions. Defendants' motion for the imposition of sanctions pursuant to Part l[c] furnished Schindler and his attorneys with adequate notice that such relief would be -Page 11 of 13-
14 [* 13] I considered and renders a formal hearing unnecessary (Minister, Elders and Dewons of Reformed Protestant Dutch Church of Citv of New York v. 198 Broadwav, Inc., 76 N.Y.2d 41 1 [1990; Dubai Bank Ltd v. Ayvub 187 AD2d 373 [Ist Dept 19921). In deciding the what sanction should be imposed, the court has considered the time and attention this matter has involved and the severity (frivolity) of the claim made against defendants. The court orders that plaintiff Schindler and his attorneys, the firm of Danzig, Fishman & Decea, pay the sum of $5,000 as costs to Lester Schwab and Jonathan A. Murphy, Esq. The Clerk shall enter judgment against Schindler and his attorneys, jointly and severally, in the manner provided in the decretal section appearing directly below. Conclusion The motion by defendants for the pre-answer dismissal of the complaint is granted in its entirety. The second branch of defendants motion for Part 130 is granted to the extent provided. Plaintiffs cross motion for discovery is denied in its entirety. In accordance with the foregoing, It is hereby ORDERED that defendants motion for the pre-answer dismissal o this action is granted in all respects; the Clerk shall enter judgment in favor defendants Lester Schwab Katz & Dwyer, LLP and Jonathan A. Murphy, Esq., against plaintiff Randy Schindler, dismissing the complaint; and it is further further ORDERED that defendants motion for costs and/or sanctions is granted; and it is -Page 12 of 13-
15 [* 14] I ORDERED that defendants shall serve a copy of this order with notice of entry upon plaintiff Randy Schindler by regular first class mail and also upon plaintiffs law firm (Danzig, Fishman & Decea) in the same manner and file proof of service with the Clerk of the court; and it is further ORDERED that upon filing such proof of service, the Clerk shall enter a money judgment in favor of defendants Lester Schwab Katz & Dwyer, LLP and Jonathan A. Murphy, Esq., against plaintiff Randy Schindler and plaintiffs attorneys, Danzig, Fishman & Decea, jointly and severally, in the amount of Five Thousand Dollars ($5,000), as costs (22 NYCRR [c] and I.2); and it is further is further ORDERED that plaintiff's cross motion for discovery is denied in its entirety; and it ORDERED that any relief requested not expressly addressed is hereby denied; and it is further Dated: ORDERED that this constitutes the decision and order of the court. New York, New York June 6,201 I So Ordered: * Hon. Judit J. ische, JSC FILED JUN Page 13 of 13- NEW YORK COUNTY CLERKS OFFICE
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