SHORT FORM ORDER SUPREME COURT - STATE OF NEW YORK COUNTY OF NASSAU / t PRESENT: HON. IRA B. WARSHAWSKY, Justice. TRIAL/IAS PART 20 ROBERT F. VAN DER WAAG, - against - Plaintiff, INDEX NO.: 013077/2002 MOTION DATE: 03/28/2003 MOTION SEQUENCE: 01,02 & 03 JOHN B. AMROD and BANK OF NEW YORK, Defendants. The following papers read on this motion: Notice of Motion, Affmations & Exhibits Annexed... Summons & Verified Complaint & Exhibits Annexed..... Notice of Cross Motion, Affirmation & Exhibits Annexed..... Notice of Cross Motion, Affidavit, Aflirmation & Exhibits Annexed..... Plaintiffs Reply and Opposing Affidavit... Reply Affidavit on Cross Motion... Reply Affmation in Further Support... Plaintiffs Memorandum of Law..... Memorandum of Law in Opposition... Reply Memorandum of Law in Support of Cross Motion... Memorandum of Law in Support... 1 2 3 4 5 6 7 8 9 10 11 Motion by plaintiff for partial summary judgment against defendant, John B. Amrod (Amrod), directing him to account for the proceeds of attorneys fees awarded to the firm Amrod & Van der Waag LLP, by the Hon. Thomas C. Platt in a class action suit
pending in federal court, and for other ancillary relief, including a preliminary injunction, and the cross motion by defendant Amrod, inter alia, for summary judgment dismissing the complaint and to compel discovery or, in the alternative, for sanctions are determined as hereinafter provided. The cross motion by defendant The Bank of New York (Bank) pursuant to CPLR 3212 for summary judgment dismissing the complaint as to said defendant is granted. This action arises out of a dispute between former law partners with respect to an award of attorneys fees approving the settlement reached in the class action lawsuit pending in United States District Court for the Eastern District of New York entitled Weil. et al v Long; Island Savings Bank, et al No. 94-CV-1292. With respect to attorneys fees, the memorandum and order dated January 16,2002, per Hon. Thomas C. Platt, U.S.D.J., provides that [t]he Settlement contemplates that up to $5 million of the total Settlement Fund will be paid to Class Counsel in legal fees. Up to $600,000.00 of the total $15 million will be paid to Class Counsel to cover reasonable out of pocket expenses it incurred in funding the litigation. By further order of Mr. Justice Platt dated January 24,2002,which traces the history of the litigation and the various law firms and attorneys involved, attorneys fees were apportioned, after a hearing, between the law firms of Amrod and Van der Waag LLP and Hogan & Hartson, which had been engaged by Amrod 8z Van der Waag as lead Class Counsel on or about July 23, 1998. Hogan & Hartson was awarded the sum of $4,216,740.00 in attorneys fees and $504,538.23 in expenses. The sum of $700,079.58 in fees and expenses was awarded to Amrod & Van der Waag LLP including time charges of $558,033.14, and an additional amount or bonus of $142,046.44 in recognition of the fact that the firm had shouldered the litigation risks for four years and utilized its skill and experience to resolve complex issues in the Class favor, sustained the litigation until Hogan & Hartson was retained and supervised and monitored the case until its conclusion. -2-
In the instant action, plaintiff seeks to recover what he claims is his share, i.e. $100,000.00, of the aforementioned amount awarded to Amrod & Van der Waag LLP representing his time charges in the class action and a proportionate share of the bonus awarded. According to the complaint, from 1998 to 2000 plaintiff and defendant John B. Amrod practiced law in the same office suite independently of each other. Effective January 2000, they began working together under the name of Amrod & Van der Waag LLP. The alleged partnership relationship, which was never memoralized in writing, lasted until February 2002. Plaintiff claims that during the partnership, and prior thereto, he performed extensive work on the class action lawsuit, at defendant s request, for which he was to be paid pursuant to time records submitted and approved by the court. Plaintiff contends that he petitioned the federal court for legal fees in the amount of $115,000.00 as and for his time charges, which amount he alleges was granted by the court but converted by defendant John B. Amrod to himself. Although other attorneys who worked on the case were paid by defendant from the funds awarded by Justice Platt, plaintiff received only $15,000.00 of the approximately $115,000.00 he claims to be entitled to. Notwithstanding plaintiffs claim of entitlement to the sum of $115,000.00, the order upon which he relies does not contain a specific award to plaintiff for legal services rendered in the course of the class action. Rather, the fee award was to the law firm of Amrod & Van der Waag LLP which, it appears, was the successor in interest to two other partnership entities that had worked on the class action from March 1994 to January 2000 i.e., Amrod & Steinberg and Amrod & Ricci, LLP. The provision of the Statute of Frauds which bars enforcement of oral agreements, which by their terms are not to be performed within a year of their making, or before the end of a lifetime, General Obligations Law $5-701(a)(l), is not a bar to the instant action. An oral agreement to form a partnership for an indefinite period creates a partnership at will and is not barred by the Statute of Frauds. Prince v O Brien, 234 AD2d 12 (lst Dept 1996). The partnership is governed by an agreement, be it oral or written. Peirez v -3-
Oueens P.E.P. Associates Corn., 148 AD2d 596,598 (2d Dept 1989), appeal dismissed 74 NY2d 792, appeal denied 75 NY2d 704. While the parties do not dispute the absence of a written partnership agreement governing their relationship, there is rank disagreement as to the terms of their oral agreement. Defendant Amrod maintains that he is entitled to 99% of the partnership income as evidenced by partnership tax returns filed for tax years 2000 and 200 1. Plaintiff counters that the Amrod & Van der Waag relationship was underwritten with the understanding that each would share certain mutual expenses, such as rent, etc., and receive payment for their individual time on each matter they worked upon. In the face of the diametrically opposed contentions of the parties regarding their agreement as to allocation of partnership profits, and plaintiffs entitlement to a share in the legal fees awarded by Mr. Justice Platt, summary judgment may not be granted in favor of plaintiff. Nor may the complaint be summarily dismissed as Amrod requests by way of cross motion. Inasmuch as plaintiff alleges that defendant Amrod secretly transferred the proceeds of the court awarded legal fees into a new separate account belonging only him and has refused to turn over plaintiffs share of the proceeds to plaintiff, it does not appear that plaintiffs failure to join the requires dismissal as defendant John B. Amrod and Van der Waag partnership is fatal or Amrod contends. Notwithstanding plaintiffs assertion that on or about February 28,2002, Amrod secretly transferred the proceeds of the court awarded check into a new and separate account belonging only to Amrod, Plaintiff has failed to demonstrate entitlement to a preliminary injunction barring defendant John B. Amrod from access to a bank account with Bank of New York, or any other account in which the court ordered proceeds have been placed. In order to obtain a preliminary injunction, a movant must demonstrate a probability of success on the merits, irreparable injury in the absence of the requested relief, and balancing of the equities in its favor. Doe v Axelrod, 73 NY2d 748,750 to -4-
(1988). Irreparable harm is that injury which is so serious or unique that a monetary award cannot be adequate compensation. Walsh v Design Concents. Ltd., 221 (2d Dept 1995). The specter of harm must not be remote or speculative but actual and imminent. Borev v National Union Fire Ins. Co., 934 Merscom. Inc. v Romaine, 295 AD2d 43 1,432 (2d Dept 2002). relief is a drastic remedy which will not be granted burden of showing an undisputed right rests on the movant. Nalitt v Citv of New York, 138 AD2d 580, 581 (2d Dept 1988) quoting First Natl. Bank v Highland Hardwoods, 98 AD2d 924,926 an IOLA Account, was opened on January 10,200O and closed on December No monies remain on deposit at defendant Bank in the name of Amrod & Van der Waag LLP. The right to an accounting rests on the existence of a trust or fiduciary relationship with respect to the subject matter of the controversy (Chalasani v State Bank of India, New York Branch, 235 936), and a breach of duty imposed by that relationship with respect to property in which the party seeking an accounting has an interest. The relationship between a bank and its depositor, however, is that of a debtor and creditor, Merrill Lynch, Pierce. Fenner Smith v Chemical Bank, 57 (3rd Dept 1983). Having failed to demonstrate a clear right to the requested relief, plaintiffs application for a preliminary injunction must be denied. As defendant Bank argues, the fourth cause of action of the complaint which seeks an accounting of the proceeds of the court ordered funds and to enjoin defendant Bank from disbursing any further funds in its possession, cannot be sustained. It appears that the partnership checking account, No. 690-3083 156, which was opened on January 5, 2000, was closed on October 4,2002, and a second checking account, No. 690-3083 172, AD2d 449 (2d Dept F2d 30 (2d Cir. 1991). The decision to grant or deny such relief rests within the sound discretion of the court, Preliminary injunctive unless a clear right thereto is established under the law and the undisputed facts upon the moving papers, and the 1997), leave to appeal dismissed 90 NY2d 439,444 (1982), which, without more, is not a AD2d 454 9,2002. NY2d & -5-
fiduciary or special relationship. Nathan v J&I Enterprises. Ltd., 212 AD2d 677 (2d Dept 1995). Any claim that plaintiffs status as a depositor creates a fiduciary relationship with respect to all banking transactions is unsupported by law. Manufacturers Hanover Trust Co. v Yanakas, 7 F3d 3 10,3 18 (1993). In the absence of a fiduciary relationship between plaintiff and defendant Bank, or any allegation of wrongdoing on the part of said defendant, the fourth cause of action of the complaint must be dismissed. The fact that defendant Bank dishonored check no. 1243, drawn by plaintiff against the partnership checking account, based on the written stop payment order delivered by defendant John B. Amrod to defendant Bank, does not constitute an act of wrongdoing by the defendant Bank nor create a basis to require defendant Bank to account to plaintiff. Finally, plaintiff has failed to establish any grounds on which to disqualify Robert Steinberg, Esq. from acting as counsel to defendant John B. Hospital, 158 AD2d 132 (3rd Dept 1990). Testimony may be relevant, and even highly useful, but still not strictly necessary. A finding of necessity takes into account such factors as the significance of the matters, weight of the testimony and availability of other evidence. S&S Hotel Ventures Ltd. Partnership v 777 S.H. Corn., 69 NY2d 437 (1987). Inasmuch as plaintiff has failed to show any manner in which Mr. Steinberg would be strictly necessary, or that his participation in this lawsuit would result in unfairness or taint the proceedings, plaintiff has failed to meet its burden of proof to warrant disqualification. In sum, plaintiffs s motion for various relief including, inter alia, an order directing defendant Amrod to account for the proceeds of payment to Waag LLP is denied in all respects. Amrod and the application is denied. Motions to disqualify opposing counsel are generally viewed with disfavor. To disqualify opposing counsel, there must be a finding that the attorney s testimony is necessary. The attorney s relevant knowledge or involvement in the transaction at issue is not determinative of such necessity. Burdett Radiolopv Consultants, P.C. v Samaritan s testimony Amrod and Van der -6-
The cross motion by defendant Amrod for summary judgment dismissing the complaint and the imposition of sanctions, predicated on the failure of plaintiff to respond to defendant s notice for discovery and inspection is denied. Plaintiff is, however, directed to respond to defendant s Notice for Discovery and Inspection dated August 26, 2002 within 20 days of service of a copy of this order by defendant on plaintiffs counsel. The cross motion by defendant Bank for summary judgment dismissing the complaint is granted, and it is SO ORDERED. A Preliminary Conference (see NYCRR 202.12) shall be held on July 8,2003, at 9:30 A.M., before the undersigned in the Supreme Court of Nassau County. Counsel for the movant shall serve a copy of this order on all parties with proof of service filed with the court. Counsel for all parties are reminded that this matter has been assigned to the Commercial Division of the Supreme Court of Nassau County and the parties are directed to follow the Rules of this Division. Dated: June 5,2003 J.S.C. -7-