FILED: NEW YORK COUNTY CLERK 04/27/2016 05:12 PM INDEX NO. 651203/2013 NYSCEF DOC. NO. 66 RECEIVED NYSCEF: 04/27/2016 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x FRANCIS CARLING : Plaintiff, Index No. 651203/2013 : (Justice Schecter) -against- : KRISTAN PETERS : Defendant. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x PLAINTIFF S MEMORANDUM OF LAW IN SUPPORT OF HIS SECOND MOTION FOR SUMMARY JUDGMENT Preliminary Statement The plaintiff and defendant in this action had a lawyer-client relationship for some five months, from July 14, 2008 until December 19, 2008, in connection with an appeal defendant had pending in the Second Circuit Court of Appeals. (First Carling Aff. 2, 46) 1 At the conclusion of their relationship, defendant refused to pay the outstanding bills of plaintiff and a law firm he had associated with the case ( the Collazo Firm ). (Id. 44-48) Plaintiff and the Firm initiated an arbitration proceeding against defendant. (Id. 49) Subsequently, plaintiff s individual claims were removed from the arbitration, and brought first in federal court, and then in this action. (Second Carling Aff. 6) By decision and order filed on February 17, 2016, this Court dismissed the First Cause of Action in plaintiff s complaint. On March 10, 2016, defendant filed an Answer and Counterclaims herein. (See Ex. 17) On March 24, 2016, plaintiff 1 References to First Carling Aff. are to the affidavit of plaintiff sworn to on March 24, 2016, and submitted in support of his first Motion for Summary Judgment herein. References to Second Carling Aff. are to the affidavit of plaintiff sworn to on April 26, 2016, and submitted in support of this motion. References to Ex. are to exhibits attached to one or the other of those affidavits, which are numbered consecutively. 1 1 of 13
moved for summary judgment in his favor on the Second and Third Causes of Action in his complaint. Plaintiff now moves for summary judgment in his favor on defendant s twelve counterclaims. Summary of the Facts For purposes of this brief, and to prevent its growing to unmanageable length, plaintiff will assume the Court s familiarity with the First and Second Carling Affidavits, and the exhibits thereto. Set forth below are the most salient facts bearing on the present motion (but they are by no means all the relevant facts). The background of the fee disputes between defendant, on the one hand, and plaintiff and his former law firm, the Collazo Firm, on the other, are set forth in plaintiff s earlier affidavit (First Carling Aff. 19-48). On November 10, 2009, plaintiff initiated an arbitration proceeding against defendant before the New York City Bar Association, in accordance with an arbitration clause in the parties retainer agreement (First Carling Aff. 49 and Ex. 2, page 2). This proceeding resulted in an arbitration award against defendant that was confirmed by this Court (First Carling Aff. 50-51 and Exs. 12-14). Initially, plaintiff brought the arbitration proceeding on behalf of both himself and the Collazo Firm. (Second Carling Aff. 6) Defendant objected to plaintiff s individual claims against her being heard in arbitration, and the arbitrator agreed. Plaintiff then proceeded to bring a federal action on those claims (see First Carling Aff. 53) (the prior federal action ). Later, after a change in arbitrators due to defendant s refusal to pay the first arbitrator s fees, a second arbitrator allowed defendant to bring claims against plaintiff personally in the arbitration, but did not allow him to bring claims against defendant. (Second Carling Aff. 6) This last-minute change in defendant s position resulted in further proceedings in the federal court, resulting in an 2 2 of 13
order of December 3, 2010 permitting defendant to proceed against the Collazo Firm on claims arising from plaintiff s alleged misconduct, but not to proceed against him personally in the arbitration. (A copy of that order which gives further details of the background set forth in this paragraph is Exhibit 15 to this motion.) Plaintiff represented the Collazo Firm throughout the arbitration proceeding; defendant represented herself. (Second Carling Aff. 7) The arbitration hearing took place on three days (December 6, 2010, and January 6 and 24, 2011), and produced a transcript of 1,056 pages. The Collazo Firm offered 85 exhibits in evidence, and respondent (defendant here) offered 46. Apart from two relatively brief witnesses the managing partner of the Collazo Firm and defendant s husband the bulk of the hearing consisted of testimony and argument offered by the plaintiff and defendant here. All the witnesses were sworn, and subject to cross-examination. (Id.) Defendant filed extensive counterclaims against plaintiff and the Collazo Firm in the arbitration proceeding. (Second Carling Aff. 8) (A copy of those counterclaims is Exhibit 16 to this motion.) The three Counts alleged by defendant were each against both plaintiff and the Collazo Firm, and in each instance the supposed liability of the Collazo Firm was predicated upon plaintiff s alleged professional misconduct or the Firm s alleged failure to supervise plaintiff properly. (See Ex. 16 at pages 18-22) Though, as a consequence of the federal court order (Ex. 15), plaintiff was not personally a party in the arbitration, he was in privity with the Collazo Firm in that proceeding, on account of defendant s allegations against him and his extensive involvement in the proceeding and the hearing itself. (Second Carling Aff. 8) The parties had a full and fair hearing on the issues in the arbitration proceeding, as confirmed in the decisions of this Court enforcing the arbitrator s award (see First Carling Aff. 3 3 of 13
51 and Exs. 12-14; Second Carling Aff. 7). The arbitrator issued her award on March 2, 2011 (First Carling Aff. 50 and Ex. 11). In the award, the arbitrator found in favor of the Collazo Firm on its outstanding bills to defendant, and she dismissed all of defendant s counterclaims against the Firm, on the ground that the evidence does not support any of these counterclaims. (Exhibit 11 at page 8) ARGUMENT Summary of Argument Plaintiff contends on this motion that eight of defendant s twelve counterclaims those sounding essentially in legal malpractice are (i) barred by the arbitrator s award under the doctrines of res judicata and collateral estoppel, and (ii) lacking in substantial factual foundation. Three of the remaining counterclaims for extortion and attempted extortion are subject to dismissal because (i) there is no private right of action in New York on such alleged torts, and (ii) plaintiff s conduct as alleged by defendant does not constitute extortion or attempted extortion. Finally, defendant s eleventh claim for relief, for alleged tortious interference with business relations, is based on speculation and wholly lacking in any factual foundation, and subject to dismissal on the merits on that basis. POINT I DEFENDANT S SECOND THROUGH NINTH CLAIMS FOR RELIEF ARE BARRED BY THE DOCTRINES OF RES JUDICATA AND COLLATERAL ESTOPPEL The doctrines of res judicata and collateral estoppel preclude a party from re-litigating claims that have already been fairly litigated and resolved in a prior proceeding. The doctrines can be asserted as a bar to a later action by parties to the prior proceeding, and by those in privity with them. Gramatan Home Investors Corp. v. Lopez, 46 N.Y.2d 481, 485-86, 414 N.Y.S.2d 4 4 of 13
308 (1979) ( as to the parties in a litigation and those in privity with them, a judgment on the merits by a court of competent jurisdiction is conclusive on the issues of fact and questions of law necessarily decided therein in any subsequent action ); Feinberg v. Boros, 99 A.D.3d 219, 226, 951 N.Y.S.2d 110 (1st Dep t 2012) (same). The doctrines apply equally to prior decisions by courts and arbitrators. Feinberg, 99 A.D.3d at 226 ( collateral estoppel principles apply as well to awards in arbitration as they do to adjudications in judicial proceedings ); Mahler v. Campagna, 60 A.D.3d 1009, 1011, 876 N.Y.S.2d 143 (2nd Dep t 2009) (same). Plaintiff is entitled to the full benefit of the arbitrator s finding that defendant s claims that he committed malpractice were unsupported by the evidence adduced at the arbitration hearing. (See Ex. 11 at page 8) Moreover, the arbitrator s award to the Collazo Firm of its full fees charged to defendant necessarily precluded her claims for malpractice. Best v. Law Firm of Queller & Fisher, 278 A.D.2d 441, 718 N.Y.S.2d 397 (2nd Dep t 2000) (determination that law firm was entitled to its agreed-upon legal fee necessarily decided that there was no malpractice ). Thus, defendant s second through ninth claims for relief should not have been asserted in this action. 1. Defendant s Claims all Sound in Malpractice Claims by a client that her lawyer breached duties to her in the course of an attorney-client relationship are in their essence claims for legal malpractice; and a party may not allege breaches of multiple duties to proliferate causes of action against the lawyer. 2 Mahler, 60 A.D.3d at 1012 (breach of fiduciary duty and breach of contract causes of action are duplicative of legal malpractice cause of action); Best, 278 A.D.2d at 441 ( Supreme Court properly 2 Case law suggests that this is often done in an attempt to obtain a longer statute of limitations (say, the six years applicable to a breach of contract claim rather than the three years applicable to malpractice claims). Here, defendant s purpose seems to be just to insult and attack plaintiff in every way imaginable. (See Second Carling Aff. 12) Her proliferation of claims is of a piece with her assertion of no fewer than 24 affirmative defenses, most of which are redundant and frivolous on their face. (See Ex. 17 at pages 5 to 9) 5 5 of 13
dismissed the causes of action alleging fraud and breach of contract and for indemnification, since these arise from the same facts as the malpractice cause of action ); Daniels v. Lebit, 299 A.D.2d 310, 749 N.Y.S.2d 149 (2nd Dep t 2002) (same); Shivers v. Siegel, 11 A.D.3d 447, 782 N.Y.S.2d 752 (2nd Dep t 2004) (same); Levine v. Lacher & Lovell-Taylor, 256 A.D.2d 147, 151, 681 N.Y.S.2d 503 (1st Dep t 1998) (same). Thus, defendant s eight claims for various alleged breaches of duty and contract against plaintiff (the second through ninth Claims for Relief in her counterclaims) should properly be seen as a single claim for legal malpractice. 2. Defendant Had a Full and Fair Opportunity to Litigate Her Malpractice Claims Against Plaintiff in the Arbitration The malpractice claims that defendant litigated in the arbitration were intended to impose liability on the Collazo Firm on account of plaintiff s alleged legal malpractice and the Firm s purported failure to supervise him adequately. (Second Carling Aff. 8) Defendant s malpractice claims in the arbitration were substantially the same as those asserted in this action. (See Second Carling Aff. 11; compare Ex. 16 1-37, pages 3-18 with Ex. 17 1-29, at pages 9-22) The arbitration counterclaims were filed on November 16, 2010 (see Ex. 16 at page 23), almost two years after the events in question which was more than ample time for defendant to formulate and litigate every conceivable basis for liability. It matters not that defendant might assert her claims in slightly different terms in this action than she did in the arbitration: res judicata and collateral estoppel apply not only to claims actually litigated in the prior proceeding, but to claims which could have been resolved in the prior proceeding. Pitcock v. Kasowitz, Benson, Torres & Friedman, LLP, 80 A.D.3d 453, 454, (1st Dep t 2011) ( res judicata applies not only to claims actually litigated but also to claims that could have been raised in the prior litigation ); Mahler, 60 A.D.3d at 1012 (same). Defendant had a fair hearing on her claims, as established conclusively in the decisions of this Court upholding the arbitrator s award. (Second 6 6 of 13
Carling Aff. 7; Exs. 12-14) Of course, it may be that defendant is never satisfied with the fairness of any ruling that goes against her; but the fact that the arbitrator s ruling was enforced by this Court after vigorous litigation by defendant establishes as a matter of law that she had a full and fair hearing, and that the arbitrator s award is entitled to res judicata effect. 3. Plaintiff was in Privity with the Collazo Firm in the Arbitration, and Thus Entitled to the Res Judicata and Collateral Estoppel Effects of the Arbitrator s Award As noted above, plaintiff was in privity with the Collazo Firm in the arbitration proceeding: he served as the Firm s counsel in the case and as its principal witness at the hearing (see Second Carling Aff. 7-8); indeed, the hearing largely consisted of plaintiff and defendant giving their different versions of the facts (id. 7; see also subparagraph (d) at page 31). The arbitrator s award resolved those issues of fact against defendant (see Ex. 11). Defendant seems to be under the impression that, since plaintiff was not a party to the arbitration proceeding (thanks to the federal court order that is Ex. 15 to this motion), she is entitled to re-litigate here the fact issues that were resolved against her in the arbitration. She is mistaken: under the settled New York law cited above, res judicata and collateral estoppel apply equally to parties and to non-parties in privity with them. POINT II DEFENDANT HAS NO CLAIM FOR RELIEF FOR ALLEGED BREACHES OF THE ETHICAL RULES, AND HER EIGHTH CLAIM MUST BE DISMISSED 1. There is no private right of action for breach of the ethics rules for lawyers. Defendant s Eighth Cause of Action, for negligence per se, says that plaintiff s alleged conduct towards her violated the former Lawyer s Code of Professional Responsibility, and that she is entitled to damages on that account. (Ex. 17 62-67, at pages 26-27) However, New York does not recognize a private right of action for a violation of the disciplinary rules. 7 7 of 13
Weintraub v. Phillips, Nizer, Benjamin, Krim & Ballon, 172 A.D.2d 254, 254, 568 N.Y.S.2d 84 (1st Dep t 1991); accord, DeStaso v. Condon, Resnick LLP, 90 A.D.3d 809, 814, 936 N.Y.S.2d 51 (2nd Dep t 2011); Arkin Kaplan LLP v. Jones, 42 A.D.3d 362, 366, 840 N.Y.S.2d 48 (1st Dep t 2007); Kantor v. Bernstein, 225 A.D.2d 500, 501-02, 640 N.Y.S.2d 40 (1st Dep t 1996). Defendant knows this, because in the prior federal action similar claims were dismissed by the court on the basis of those very precedents. Nevertheless, she asserts the claims again. These claims are frivolous on their face, and their filing would appear to have violated Rule 3.1 of New York s Rules of Professional Conduct for lawyers, which proscribes the bringing of frivolous claims, defined as claims that are unwarranted under existing law. 2. Defendant s Claims Lack a Substantial Factual Basis As discussed more fully in the Second Carling Affidavit (at paragraphs 21-27, 34 and subparagraphs (b) through (f) at pages 31-32) and Point III below, there is no substantial factual basis for defendant s claims of unethical conduct on plaintiff s part: those claims were made up long after the fact; they were thoroughly refuted at the arbitration hearing, and they have never been the subject of any complaint by defendant to the proper disciplinary authorities. They are repeated here with the evident intent to besmirch plaintiff s reputation, in a manner that will insulate defendant from claims of defamation. It may not be sufficient that the claims be dismissed for the reasons set forth in the preceding paragraph; defendant will still be free to disseminate her pleading publicly, saying the claims were dismissed for technical reasons. Thus, the Court may wish to consider, in the interest of justice, and upon examination of the record, dismissing the claims on the further ground that they lack a substantial factual basis. 8 8 of 13
POINT III DEFENDANT S MALPRACTICE CLAIMS LACK A SUBSTANTIAL FACTUAL BASIS Since defendant s malpractice claims are barred by the doctrines of res judicata and collateral estoppel, the Court need not address whether she has provided any substantial factual basis for those claims in her pleading. However, in plaintiff s view the filing of those claims represents a wholly unwarranted effort to besmirch his professional reputation, which has hitherto, after more than 45 years in the practice of law, been unblemished. (See First Carling Aff. 2 and Second Carling Aff. 28-29) Typical of the frivolousness of her claims is the claim asserted long after the fact that plaintiff hid from her that he was of counsel to the Collazo Firm rather than a partner (see, e.g., Ex. 17 15, at page 13). This ignores the fact that the retainer agreement signed by plaintiff and defendant on July 29, 2008 only two weeks after the representation began (see Second Carling Aff. 21(d)) clearly disclosed that plaintiff was of counsel to the firm (see Ex. 2). Moreover, both plaintiff s own website and that of the Collazo Firm had promptly made the same disclosure after plaintiff resigned his partnership at the end of 2007 (see First Carling Aff. 21(b)). A party may not bring a claim for fraud in circumstances in which reasonable investigation on his part would have disclosed the true facts. Urstadt Biddle Properties, Inc. v. Excelsior Realty Corp., 65 A.D.3d 1135, 1137, 885 N.Y.S.2d 510 (2nd Dep t 2009) (where there is a conflict between a written agreement and an alleged oral representation, a claim of reliance on the oral representation is negated); Siemens Solar Industries v. Atlantic Richfield Co., 251 A.D.2d 82, 673 N.Y.S.2d 674 (1st Dep t 1998) (a sophisticated party s opportunities to obtain knowledge of the matters that are the subjects of the alleged misrepresentations preclude his claim of reasonable reliance); Feeney v. Manhattan Sports Club, Inc., 227 A.D.2d 293, 642 N.Y.S.2d 674 (1st Dep t 1996). 9 9 of 13
Similarly, the mere fact that plaintiff and defendant may have disagreed on some points about tactics for her appeal (see Second Carling Aff. subparagraph (f) at page 32) does not provide a basis for a claim of malpractice. Indeed, an objective observer would most likely agree that defendant would have been better off had she accepted plaintiff s advice: for a lawyer accused of hyper-aggressive litigation tactics to refuse to express remorse for her behavior, and to focus so much of her energies on attacking her former colleagues at Dorsey & Whitney, including Zachary Carter (now Corporation Counsel of New York City), would strike many litigators as potentially self-defeating. Certainly, that seems to have been the conclusion reached by the Maryland Court of Appeals, in its decision to disbar defendant. (See Ex. 21, at pages 21-23 and 31-32) POINT IV DEFENDANT S FIRST, TENTH AND TWELFTH CLAIMS FOR RELIEF MUST BE DISMISSED 1. Defendant s Claims Have No Legal Basis These claims are for alleged extortion (First Claim), attempted extortion (Tenth Claim) and attempted extortion/blackmail (Twelfth Claim). (Ex. 17 31-33, 74-76, and 84-88, at pages 22-23 and 27-29) Similar claims were brought by defendant in the prior federal action, and were dismissed by the Southern District on the ground that there is no private right of action in New York for extortion or attempted extortion. (Second Carling Aff. 39) See Minnelli v. Soumayah, 41 A.D.3d 388, 389, 839 N.Y.S.2d 727 (1st Dep t 2007) ( extortion and attempted extortion are criminal offenses... that do not imply a private right of action [citing cases]) Indeed, this precedent, and others, were cited to the parties by the court in the prior federal action (see Second Carling Aff. 39). Undeterred by the federal court s ruling (which is the law of the case in this litigation) and the controlling authorities which were cited to her by the 10 10 of 13
court and in apparent defiance of Rule 3.1 of the Rules of Professional Conduct defendant has re-filed the claims in this Court. They should be dismissed again, with an appropriate finding as to the impropriety of defendant s assertion of those claims for a second time in this action. 2. Defendant s Claims Have No Factual Basis Defendant s extortion claims suggest that she really has no idea what extortion or blackmail consist of. There is no principle of law or ethics that says that a party who has a legitimate legal claim against another party may not publicize that claim, or warn the other party that publicity might result from the debtor s failure to make good the debt. (See Second Carling Aff. 35-38). Moreover, defendant s claim that she suffered damage on account of plaintiff s alleged conduct is specious, because she has not made any payments to plaintiff or the Collazo Firm after the alleged threats other than what was ordered by the arbitrator and this Court (id. 36) and even those payments were less than the full amount ordered (First Carling Aff. 57). It should be apparent that defendant s claims were brought solely so that she can tell the world that plaintiff is guilty of criminal misconduct, not because she could possibly prevail on her claims. POINT V DEFENDANT S ELEVENTH CLAIM FOR RELIEF LACKS A SUBSTANTIAL FACTUAL BASIS Plaintiff and defendant served for a few months as co-counsel for an individual named Darin Demizio in a criminal prosecution in the Eastern District of New York. (The facts are set forth in the Second Carling Aff. at 32.) The trial in the case was set for February 2, 2009. It was understood by all that plaintiff could not represent Demizio in the trial, and that unless defendant succeeded in getting her suspension lifted in time, Demizio would have to obtain new 11 11 of 13
counsel. Plaintiff advised Demizio in November 2008 that it was far from certain that defendant s suspension from practice in the Eastern District would be lifted in time for the trial. (In fact, it was not lifted until many years later, if at all). Demizio concluded that he should obtain new counsel, and defendant found a new firm to represent him. She evidently expected that she would continue to serve as co-counsel with that firm; but on December 13, 2008 Demizio terminated his relationship with defendant and went ahead with the new firm as his sole counsel. (See Ex. 24) Defendant has decided, inexplicably, to blame plaintiff for these events, and has consequently concocted two claims against him: that he shared her client confidences with Demizio in advising him about the unlikelihood of an early end to defendant s suspension; and that he was guilty of tortious interference with business relations, in allegedly persuading Demizio to replace her as his counsel (see her Eleventh Claim for Relief, Ex. 17 78-82, at page 28). Both of these claims are based on pure speculation, not evidence or any actual knowledge on defendant s part; and in fact, they are factually untrue. (Second Carling Aff. 32(e)-(i)) Defendant was not a party to any of the alleged communications between Demizio and plaintiff, and she has decided simply to make up a version of those communications that she thinks will put plaintiff in a bad light. Plaintiff s advice to Demizio about the likelihood of any early end to defendant s suspension advice that turned out manifestly to be correct was not based on any client confidences he had obtained from defendant, but simply on his professional judgment, based on the courts reactions so far (which were matters of record) to his efforts on defendant s behalf to get her suspension lifted (and the Court may note that defendant does not identify any such confidences in her pleading). (Id.) As to Demizio s decision to replace defendant, she simply 12 12 of 13
assumes that plaintiff must have persuaded Demizio to make this decision. However, plaintiff in fact had nothing to do with this decision, and never criticized defendant to Demizio in any way (id.). Demizio himself confirmed this to defendant (id.), and documentary evidence supports plaintiff s assertions in this regard, and refutes defendant s speculation. (See Exs. 23 and 24) Apparently, the idea that she should lose anything is intolerable to defendant, and she must find someone else to blame for every setback. Be that as it may, it does not entitle her to sue plaintiff on the basis of nothing but pique and guesswork on her part. CONCLUSION For all the foregoing reasons, plaintiff s second Motion for Summary Judgment should be granted, and defendant s counterclaims should be dismissed, with prejudice. Dated: New York, New York April 27, 2016 Respectfully submitted, FRANCIS CARLING /s/ (electronic signature) (Pro Se) 174 East 74 th Street, Suite 12BC New York, NY 10021-3533 (212) 628-3026 fcarling@gmail.com 13 13 of 13