Matz v Aboulafia Law Firm, LLC 2017 NY Slip Op 32147(U) October 10, 2017 Supreme Court, New York County Docket Number: /2016 Judge: Kathryn E.

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1 Matz v Aboulafia Law Firm, LLC 2017 NY Slip Op 32147(U) October 10, 2017 Supreme Court, New York County Docket Number: /2016 Judge: Kathryn E. Freed Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication.

2 [* FILED: 1] NEW YORK COUNTY CLERK 10/12/ :00 PM INDEX NO /2016 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. KATHRYNE. FREED Justice X WILFRIED MATZ, HELGA WOSTL, ESTATE OF ELLEN MATZ, - v - Plaintiffs, ABOULAFIA LAW FIRM, LLC, MATIHEW ABOULAFIA, SOL KLEIN P.A., INC., SOL KLEIN, and BAUER BROKERAGE INC., Defendants. :. x PART INDEX NO /2016 MOTION DATE MOTION SEQ. NO. 001 DECISION AND ORDER The following e-filed documents, listed by NYSCEF document number 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 23, 24, 25, 26,27, 28, 29, 30, 31, 32, 33, 34, were read on this application to/for DISMISSAL Upon the foregoing documents, it is ordered that the motion is granted in part. In this action by plaintiffs Wilfried Matz, Helga Wostl, and the Estate of Ellen Matz seeking damages against defendants Aboulafia Law Firm, LLC ("the Aboulafia Firm"), Matthew Aboulafia ("Aboulafia"), Sol Klein, P.A., Inc. ("Klein Inc."), Sol Klein ("Klein"), and Bauer Brokerage Inc. ("Bauer") for professional negligence arising from a property damage loss, defendants the Aboulafia Firm, Aboulafia, Klein P.A., and Klein move, pursuant to CPLR 3211 (I), (3), (7) and (8), to dismiss the complaint insofar as asserted against them. After oral argument, and after a review of the parties' motion papers and the relevant statutes and case law, the motion is granted in part. Page 1of11 1 of 11

3 [* FILED: 2] NEW YORK COUNTY CLERK 10/12/ :00 PM INDEX NO /2016 FACTUAL AND PROCEDURAL BACKGROUND Plaintiffs, the owners of 2455 Grand Avenue, Bronx, New York ("the premises"), purchased two insurance policies covering that location. Doc. 12, at par New York Marine and General Insurance Co. ("Marine") issued a policy to plaintiffs insuring the premises for the period of December 10, 20 I 0 through December 10, 2011 ("the Marine Policy"). Id., at Doc. I 3. The Marine Policy, which insured the premises in the amount of $2,835,000, had a deductible of $25,000. Id., at par. 14. Technology Insurance Company ("TIC") issued a policy to plaintiffs insuring the premises for the same period ("the Technology Policy"). Id., at par. 15. The Technology Policy "covered the [Marine Policy] in the amount of [$25,000] and contained a [$5,000] deductible." Id., at par. 16. Both policies were procured for plaintiffs by defendant Bauer, an insurance broker. Id., at par. 17. On July 23 and 24, 2011, the premises sustained damage due to electrical fires covered under the Marine Policy. Id., at pars On July 25, 2011, plaintiffs entered into a public adjuster compensation agreement with defendants Klein and Klein Inc. pursuant to which those defendants agreed to adjust the claims arising from the fires. Id., at par. 21. Klein and Klein Inc. were unable to resolve the claims. Id., at par. 22. On or about July 11, 2013, Klein, Klein Inc., and Bauer recommended that plaintiffs retain defendants Aboulafia and the Aboulafia Firm to commence an action against Marine. Id., at par. 23. On or about July 18, 2013, plaintiffs retained Aboulafia and the Aboulafia Firm for this. purpose, and an action was commenced against Marine demanding damages of $300,000 on the ground that the company improperly refused to indemnify plaintiffs for the damages caused by the fires. Id., at par. 24. Defendants Klein, Klein Inc., and Bauer allegedly failed to inform Aboulafia 1 Unless otherwise noted, all references are to the documents filed with NYSCEF in connection with this matter MATZ, WILFRIED vs. ABOULAFIA LAW FIRM, LLC Page 2of11 2 of 11

4 [* FILED: 3] NEW YORK COUNTY CLERK 10/12/ :00 PM INDEX NO /2016 and the Aboulafia Finn about the existence of the Technology Policy, despite the fact that they knew about the said policy and the action commenced on behalf of plaintiffs by Aboulafia and the Aboulafia Finn against Marine. Id., at p. 25. Although plaintiffs assert that their claims were worth approximately $140,000, Aboulafia and the Aboulafia Finn allegedly failed to act in their best interests by bringing a suit on their behalf as against TIC. Id., at par. 26. Thus, maintain plaintiffs, they were forced to settle their claims with Marine for an amount Jess than the full value thereof. Id., at pars. 27, 34. In their summons and complaint, plaintiffs alleged, inter alia, that Aboulafia and the Aboulafia Firm were negligent because "they failed to act in (plaintiffs'] best interest[s] and commence an action against [the Technology Policy] in order to pursue the amount properly owed to [p]laintiffs pursuant to the Technology Policy." Id., at par. 3 I; see also Id., at par. 35. Plaintiffs assert that Aboulafia and the Aboulafia Finn should have inquired as to whether plaintiffs had a second insurance policy, i.e., the Technology Policy, due to the magnitude of the deductible on the Marine Policy, and should have commenced an action against TIC to pursue the amount owed to plaintiffs pursuant to that policy. Id., at pars Plaintiffs claim that, as a result of the negligence of Aboulafia and the Aboulafia Finn, plaintiffs have been unable to recover against TIC for t.heir alleged Joss since the Statute of Limitations has expired. Id., at par. 36. They maintain that "a reasonably competent equivalent professional would surely have pursued the amount properly owed to [them] pursuant to the [TIC] policy" before the time to do so expired. Id., at par. 37. Plaintiffs claim damages against Aboulafia and the Aboulafia Finn in an amount no less than $50,000. Plaintiffs claim that Klein and Klein Inc. were negligent in failing to inform defendants Aboulafia and the Aboulafia Firm about the Technology Policy, thereby failing to act in the best Page 3of11 3 of 11

5 [* FILED: 4] NEW YORK COUNTY CLERK 10/12/ :00 PM INDEX NO /2016 interests of plaintiffs with respect to pursuing the money collectible under the Technology Policy. Id., at par. 44. They maintain that, as a result of the negligent failure by Klein and Klein Inc. to " notify Aboulafia and the Aboulafia Firm about the Technology Policy, plaintiffs are now precluded by the Statute of Limitations from pursuing insurance proceeds to which they are entitled from the Technology Policy. Id., at pars Finally, plaintiffs claim that Bauer, too, was negligent in failing to inform Aboulafia and the Aboulafia Firm about the Technology Policy, resulting in their inability to recover insurance proceeds pursuant to the said policy. Id., at pars Plaintiff commenced the instant action against defendants Aboulafia, the Aboulafia Firm, Klein, Klein Inc., and Bauer on June 30, 2016; Doc. 12. On September 15, 2016, defendants Aboulafia, the Aboulafia Firm, Klein, and Klein Inc. moved to dismiss the complaint pursuant to CPLR 321 l(a)(i) (documentary evidence), (a)(3) (lack of capacity to sue), (a)(7) (failure to state a claim), and (a)(8) (lack of personal jurisdiction). Doc. 8. In support of the motion, defendants submit an attorney affirmation, as well as affidavits by Aboulafia and Klein. Defendants assert that the claims by plaintiff Estate of Ellen Matz must be dismissed pursuant to CPLR 3211 (a)(3) since an estate is not a legal entity capable of bringing suit. They further contend that the claims against Klein and Aboulafia must be dismissed pursuant to CPLR 3211 (a)(7) since they have no personal liability and there are rio grounds for piercing the corporate veil of either the Aboulafia Firm or Klein Inc. They also maintain that the complaint must be dismissed pursuant to CPLR 3211 (a)(8) since plaintiffs failed to file affidavits of service with this.. Court. Additionally, defendants argue that the complaint must be dismissed pursuant to CPLR 3211 (a)( 1) and (7) because the documentary evidence establishes that Klein Inc. and the Aboulafia ~ Firm satisfied their obligations pursuant to their respective retainer agreements with plaintiffs and Page 4of11 4 of 11

6 [* FILED: 5] NEW YORK COUNTY CLERK 10/12/ :00 PM INDEX NO /2016 were under no further duty or responsibility to ensure that plaintiffs filed suit against Technology within the applicable Statute of Limitations, as well as because plaintiffs failed to allege a breach of contract against either of those defendants. In opposition to the motion, plaintiff argues that the Estate of Ellen Matz has standing to bring this actio.n because the estate's co-executors, Matz and Wostl, have the capacity to sue. Plaintiff further asserts that Klein and Aboulafia can be held personally liable for their professional malpractice. In addition, plaintiffs maintain that they properly served defendants with process and that, although there was a slight delay in filing proof of service with the court, the court can overlook this error nun pro tune. Plaintiffs further maintain that defendants Aboulafia and the Aboulafia Firm negligently failed to inquire regarding additional coverage for plaintiffs and that Klein and Klein Inc. negligently failed to inform Aboulafia and the Aboulafia Firm about the Technology Policy. LEGAL CONCLUSIONS "Regardless of which subsection of CPLR 3211 (a) a motion to dismiss is brought under, the court must accept the facts alleged in the pleading as true, accord the [pleader] the benefit of every possible inference, and determine only whether the facts as alleged fit wi_thin any cognizable legal theory." Ray v Ray, 108 AD3d 449, 451 (1st Dept 2013); see Sokoloffv Harriman Estates Dev. Corp., 96 NY2d 409, 414 (2001); Leon v Martinez, 84 NY2d 83, (1994). "However, factual allegations presumed to be true on a motion pursuant to CPLR 3211 may properly be negated by affidavits and documentary evidence." Facebook, Inc. v DLA Piper LLP (US), 134 AD3d 610, 613 (I st Dept 2015) (internal quotation marks, brackets and citations omitted). Page 5of11 5 of 11

7 [* FILED: 6] NEW YORK COUNTY CLERK 10/12/ :00 PM INDEX NO /2016 Capacity to Sue Contrary to defendants' contention, plaintiffs have the capacity to bring this action. Although defendants correctly assert that the Estate of Ellen Matz lacks such capacity, plaintiffs have established that they are co-executors of the Estate of Ellen Matz pursuant to "Letters of Office" granted to them by the Circuit Court of Cook County, Illinois in November of Doc. 27. Although Wost! and Matz should have commenced this action in their capacity as coexecutors, their failure to do so is 'a mere irregularity which can be corrected by this Court. Grippo v Di Vito, 7 AD2d 913, (2nd Dept 1959). Therefore, the caption is hereby amended to reflect that the plaintiffs are Wilfried Matz and Helga Wost!, as Co-Administrators of the Estate of Ellen Matz. Jurisdiction Defendants claim that the complaint must be dismissed pursuant to CPLR 3211 (a)(8) since they were not properly served with the summons with notice and/or the verified complaint. They further argue that plaintiffs failed to timely file affidavits of service with this Court. 2 Initially, this Court notes that affidavits of service of the summ~ms with notice on defendants were filed with this Court. Docs Even ifthe affidavits were filed in an untimely fashion, as defendants maintain, the failure to. file proof of service is a non-jurisdictional defect which, absent prejudice, can be cured by granting leave for such service to be effective nunc pro tune. See Rahi v Fang, 245 AD2d 13 (l5 1 Dept 1997). Here, since the affidavits of service have already been filed, this Court deems them timely served nunc pro tune. 2 Although defendants do not set forth authority for this assertion, it appears that they are referring to the 20-day limit set forth in CPLR 308(2). Page 6of11 6 of 11

8 [* FILED: 7] NEW YORK COUNTY CLERK 10/12/ :00 PM INDEX NO /2016 This Court rejects defendants' contention that they were not properly served with the complaint, given that the instant application seeks dismissal of the complaint which they rece ived. Claims Against Aboulafia and the Aboulafia Firm Construing the complaint in a light most favorable to plaintiffs, they have set forth a claim for legal malpractice. 3 To set forth a cause of action to recover damages for legal malpractice, a plaintiff must allege that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the attorney's breach of his or her duty proximately caused the plaintiff actual and ascertainable damages. Leder v Spiegel, 9 NY3d 836, 837 (2007) (internal citation and quotation marks omitted), cert denied sub nom. Spiegel v Rowland, 552 US 1257 (2008). Nev~rtheless, plaintiffs' claim against Aboulafia and the Aboulafia Firm are dismissed pursuant to CPLR 3211 (a) ( 1 ). Whether an attorney has an obligation to investigate insurance coverage depends, in large part, on the scope of the agreed representation by the attorney. See Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34 (2d Dept 2006). Here, since the retainer agreement executed between plaintiffs and the Aboulafia firm, which constitutes "documentary evidence" within the purview of that section (see generally Fontanetta v John Doe 1, 73 AD3d 78, [2d Dept 2010]), clearly limits the firm's representation only to commencing a property damage claim against Marine. Doc. 26. That agreement further provides that the Aboulafia Firm "is to do no further work on this claim other than starting a suit against [Marine]. If further work is required, a separate retainer agreement must be executed by [plaintiffs]." Id. Given the express 3 Although plaintiffs do not actually claim malpractice, their claim of negligence against defendants Aboulafia and the Aboulafia Firm is tantamount to one of legal malpractice given the allegation that the said defendants failed to represent them in a proper manner. Page 7of11 7 of 11

9 [* FILED: 8] NEW YORK COUNTY CLERK 10/12/ :00 PM INDEX NO /2016 limitation on the scope of the Aboulafia firm's representation, plaintiffs' claim that Aboulafia and/or the Aboulafia Firm should have taken further steps to investigate other possible insurance coverage is thus without merit. See Rules of Professional Conduct (22 NYCRR ) Rule I.2(c). Claims Against Aboulafia and Klein Individually The claims against Aboulafia and Klein in their individual capacities must be dismissed because plaintiffs have failed to pierce the corporate veil. so ~s to allow them to bring the same. "[P]iercing the corporate veil requires a showing that: (1) the owners exercised complete domination of the corporation i~1 respect to the transaction attacked; and (2) that such domination \Vas used to commit a fraud or wrong against the plaintiff which resulted in plaintiffs injury. Maller of Morris v New York State Dept. of Taxation & Fin., 82 NY2d 135, 141 (1993)." Cobalt Partners. L.P. v GSC Capital Corp., 97 AD3d 35, 40 (I st Dept 2012). Here, since plaintiffs have set forth no such allegations, the claims against Aboulafia and Klein in their individual capacities must be dismissed. Claims Against Klein Inc. Construing the complaint in a light most favorable to plaintiff, it sets forth a cause of action in negligence as against Klein Inc. based on its failure to properly adjust their claim. Specifically, as noted above, plaintiffs allege that Klein Inc. failed to inform Aboulafia and the Aboulafia Firm about the existence of the Technology Policy, despite the fact that they knew about the same. Klein Inc. asserts, in effect, that its retainer agreement constitutes "documentary evidence" precluding the claims against it because it only required the company to adjust the claim and not Page 8of11 8 of 11

10 [* FILED: 9] NEW YORK COUNTY CLERK 10/12/ :00 PM INDEX NO /2016 to notify the Aboulafia Firm of any course of action it should take. The agreement provides, inter alia, that it is "valid only if both it and [the] attached notice of cancellation are written in the same language as that principally used in the oral negotiations and presentation." Doc. 28. Since the agreement does not contain any details about any oral negotiations or presentation, it clearly cannot be considered "documentary evidence" pursuant to CPLR 3211 (a)(l ). Nor does Klein's affidavit in support of the motion constitute "documentary evidence." See, e.g.,.!a. Lee Electric. Inc. v City of New York, 119 AD3d 652 (2d Dept 2014); Flowers v 73rd Townhouse, LLC, 99 AD3d 431 (15 1 Dept 2012). In light of the foregoing, it is hereby: ORDERED that the motion is granted to the extent of dismissing plaintiffs' claims as against defendants Aboulafia Firm, LLC, Matthew Aboulafia, Esq. individually, and Sol Klein individually, and the Clerk is directed to enter judgment accordingly; and it is further ORDERED that the motion is otherwise denied and the remaining claims shall continue; and it is further ORDERED that all papers, pleadings and proceedings in the captioned action are amended to substitute as plaintiffs Wilfried Matz and Helga Wostl, as Co-Administrators of the Estate of Ellen Matz, in lieu of the currently named plaintiffs Wilfried Matz, Helga Wostl, and Estate of Ellen Matz; and it is further Page 9of11 9 of 11

11 [* FILED: 10] NEW YORK COUNTY CLERK 10/12/ :00 PM INDEX NO /2016 ORDERED that the caption shall hereinafter read as follows: ~ X WILFRIED MATZ and HELGA WOSTL, as Co Administrators of the ESTATE OF ELLEN MATZ, Plaintiffs, -V- SOL KLEIN P.A., INC. and BAUER BROKERAGE INC., Defendan~s X and it is further ORDERED that plaintiffs counsel shall serve a copy of this order with notice of entry upon all parties and upon the County Clerk (Room 141 B) and the Clerk of the Trial Support Office (Room 158) and the Clerks are directed to mark the court's records to reflect the amendment of the caption; and it is further ORDERED that the affidavits of service filed by plaintiffs with NYSCEF as documents are deemed to have been timely filed, nunc pro lune, and it is further Page10of of 11

12 [* FILED: 11] NEW YORK COUNTY CLERK 10/12/ :00 PM INDEX NO /2016 ORDERED that this constitutes the decision and order qf the court. 10/10/2017 DATE CHECK ONE: APPLICATION: CHECK IF APPROPRIATE: CASE DISPOSED GRANTED. SETTLE ORDER DO NOT POST D DENIED NON-FINAL DISPOSITION GRANTED IN PART SUBMIT ORDER FIDUCIARY APPOINTMENT D OTHER D REFERENCE Page 11of11 11 of 11

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