Sometimes, a lawsuit is dismissed based upon the concept of claim preclusion or collateral estoppel, which was defined by the court in Sang Seok Na v Schietroma, 172 AD3d 1263 [2d Dept 2019]:
“ The doctrine of collateral estoppel, a narrower species of res judicata, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same ” (Ryan v. New York Tel. Co., 62 N.Y.2d 494, 500, 478 N.Y.S.2d 823, 467 N.E.2d 487). The doctrine of collateral estoppel applies when: “ (1) the issues in both proceedings are identical, (2) the issue in the prior proceeding was actually litigated and decided, (3) there was a full and fair opportunity to litigate in the prior proceeding, and (4) the issue previously litigated was necessary to support a valid and final judgment on the merits ” (Conason v. Megan Holding, LLC, 25 N.Y.3d 1, 17, 6 N.Y.S.3d 206, 29 N.E.3d 215 [internal quotation marks omitted] ).
Simon & Garfunkel, The 59th Street Bridge Song (Feelin’ Groovy)
A foreign company sued a New York State resident, seeking to force the sale of his house in order to satisfy its judgment. The company existed under New Jersey law with a New Jersey corporate address. The house was located in Nassau County.
Petition to Sell House
The judgment creditor’s petition to sell real property alleged that there was sufficient equity in the house exceeding the homestead exemption and existing mortgage lien. The petition further alleged that attempts to execute on the judgment debtor’s personal property failed and the creditor had otherwise been unable to satisfy its judgment. Combined, these allegations would normally be enough to satisfy the pleading requirements under CPLR 5203, 5206 and 5238.
In response to the petition, the debtor/homeowner retained Richard A. Klass, Your Court Street Lawyer, to defend the proceeding in order to retain his house. The defenses put up included the fact that the mortgage lender had already begun foreclosure proceedings and there was a question as to the validity of the claim that there was any net equity in the property. Further, since the house was owned by the debtor with his wife as a “ tenancy by the entirety, ” the house could not be sold without consideration of her property rights.
Stopping the Creditor in its tracks
Sometimes, a debtor needs a respite from the continual attacks by creditors. One way to accomplish this is by a bankruptcy filing, in which the automatic stay imposed upon filing stops the pecking at a debtor’s assets by creditors. Another way to slow down a creditor is to temporarily stay the lawsuit while the debtor and his family “ circle the wagons ” to either gather up strong defenses or develop an orderly plan in which debts will be repaid or settled. An effective method of getting this pause is by requesting that the judge stay the lawsuit of a non-New York State creditor until the plaintiff/creditor posts security for the costs of the action.
Security for Costs
New York court rules require nonresident plaintiffs maintaining lawsuits in New York courts to post security for the costs for which they would be liable if their lawsuits were unsuccessful. CPLR 8501(a) provides that, “ except where the plaintiff has been granted permission to proceed as a poor person or is the petitioner in a habeas corpus proceeding, upon motion by the defendant without notice, the court or judge thereof shall order security for costs to be given by the plaintiffs where none of them is a domestic corporation, a foreign corporation licensed to do business in the state or a resident of the state when the motion is made. ” CPLR 8502 provides that until security for costs is given pursuant to court order, all proceedings other than to review or vacate such order shall be stayed, and that if the plaintiff shall not have given security for costs at the expiration of 30 days from the date of the order, the court may dismiss the complaint upon motion by the defendant.
Security for costs is a device ordinarily used against a nonresident plaintiff to make sure if he loses the case, he will not return home and leave the defendant with a costs judgment that can be enforced only in the plaintiff’s home state. By directing a nonresident to post a bond, the defendant is protected from frivolous lawsuits and is assured that, if successful, he will be able to recover costs from the plaintiff.
In rebuffing a challenge to the constitutionality of the requirement of security for costs imposed upon a nonresident plaintiff, the court in Clement v. Durban, 147 AD3d 39 [2016] aff’d 32 NY3d 337 [2018] cert denied 139 S.Ct. 2649 [2019] held that the court rules do not deprive nonresident plaintiffs of reasonable and adequate access to New York courts and, thus, are constitutional. Where nonresidents are subject to different treatment than New York residents, there must be reasonable grounds for diversity of treatment (so as to prevent discrimination against citizens of other states). Disparity of treatment of nonresidents is permitted in situations where there are valid, independent reasons for it; in this situation, deterring frivolous or harassing lawsuits and preventing prevailing defendants from having to chase plaintiffs into foreign jurisdictions to collect their judgments are considered valid reasons.
Upon motion by the defendant requesting that the plaintiff post a bond as security for costs, the judge granted the motion and directed the nonresident plaintiff to post security in the amount of $10,000 for costs. The plaintiff did not do so within the 30 day period after the order and, accordingly, the court dismissed the lawsuit.
In Miami Capital, LLC v Hurwitz, 101 NYS3d 598 [1st Dept 2019], the court determined that the client’s legal malpractice case could not proceed since the damages claim was speculative, holding:
Defendant’s motion was properly granted because while plaintiff anticipates that it could be subject to a rescission claim at some point in the future, such alleged damages are purely speculative and not yet ripe. Since damages in a legal malpractice case are designed “ to make the injured client whole ” (Campagnola v. Mulholland, Minion & Roe, 76 N.Y.2d 38, 42, 556 N.Y.S.2d 239, 555 N.E.2d 611 [1990] ), having failed to plead actual damages, plaintiff’s complaint fails to state a claim (seeHeritage Partners, LLC v. Stroock & Stroock & Lavan LLP, 133 A.D.3d 428, 19 N.Y.S.3d 511 [1st Dept. 2015], lv denied 27 N.Y.3d 904, 2016 WL 1692057 [2016]; Lavanant v. General Acc. Ins. Co. of Am., 212 A.D.2d 450, 622 N.Y.S.2d 726 [1st Dept. 1995] ).
In Jadidian v Drucker, 171 AD3d 1146, 1147-48 [2d Dept 2019], the court denied the law firm’s motion to dismiss the complaint, holding:
On a motion to dismiss pursuant to CPLR 3211(a)(7), the court must afford the pleading a liberal construction, accept all facts as alleged to be true, accord the plaintiff the benefit of every favorable inference, and determine only whether the *1148 facts as alleged fit within any cognizable legal theory (see CPLR 3026; Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511; Santaiti v. Town of Ramapo, 162 A.D.3d 921, 924–925, 80 N.Y.S.3d 288; Berlin v. DeMarzo, 150 A.D.3d 1185, 52 N.Y.S.3d 878). A cause of action to recover damages for legal malpractice requires proof that the defendant “ 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 this duty proximately caused plaintiff to sustain actual and ascertainable damages (McCoy v. Feinman, 99 N.Y.2d 295, 301, 755 N.Y.S.2d 693, 785 N.E.2d 714 [internal quotation marks omitted]; seeDombrowski v. Bulson, 19 N.Y.3d 347, 350, 948 N.Y.S.2d 208, 971 N.E.2d 338; Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 438, 442, 835 N.Y.S.2d 534, 867 N.E.2d 385).
Here, accepting the facts alleged in the complaint as true, and according the plaintiffs the benefit of every possible favorable inference, the complaint sufficiently alleges a cause of action to recover damages for legal malpractice. The complaint alleges that the defendant failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession by failing to account for the potential outcome of the nuisance action on the use and occupancy of the premises and to protect the plaintiffs’ interests in relation thereto. The complaint further alleges that the defendant’s negligence proximately caused the plaintiffs to sustain actual and ascertainable damages in lost rent and in settling the action brought by the Hive, and thus, validly states a cause of action to recover damages for legal malpractice (seeRudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d at 443, 835 N.Y.S.2d 534, 867 N.E.2d 385; Bua v. Purcell & Ingrao, P.C., 99 A.D.3d 843, 847, 952 N.Y.S.2d 592; Wolstencroft v. Sassower, 124 A.D.2d 582, 507 N.Y.S.2d 728). Accordingly, we agree with the Supreme Court’s denial of that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(7) to dismiss the complaint.
Dismissal pursuant to CPLR 3211(a)(1) is warranted only if the documentary evidence “ utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law ” (Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190; seeKolchins v. Evolution Mkts., Inc., 31 N.Y.3d 100, 106, 73 N.Y.S.3d 519, 96 N.E.3d 784; Leon v. Martinez, 84 N.Y.2d at 88, 614 N.Y.S.2d 972, 638 N.E.2d 511). Here, the documentary evidence submitted by the defendant **76 failed to utterly refute the plaintiff’s factual allegations. Accordingly, we also agree with the Supreme Court’s denial of that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(1) to dismiss the complaint.
When a client alleges duplicative causes of action against an attorney based upon different theories of liability, the court can dismiss those duplicative causes of action.
“ To state a claim for breach of fiduciary duty, a plaintiff must allege the existence of a fiduciary relationship, misconduct by the other party, and damages directly caused by that party’s misconduct ” (Castellotti v Free, 138 AD3d 198, 209 [1st Dept 2016]). “ [A] fiduciary relationship arises between two persons when one of them is under a duty to act or give advice for the benefit of another upon matters within the scope of the relation ” (Oddo Asset Mgt. v Barclays Bank PLC, 19 NY3d 584, 593-594 [2012], rearg denied 19 NY3d 1065 [2012] [internal quotation marks and citation omitted]). The existence of a duty is essential and may not be imposed unilaterally (seeMarmelstein v Kehillat New Hempstead: The Rav Aron Jofen Community Synagogue, 45 AD3d 33, 36-37 [1st Dept 2008], affd 11 NY3d 15 [2008]). Whether a fiduciary relationship exists involves a fact-specific inquiry (seeEBC I, Inc. v Goldman Sachs & Co., 5 NY3d 11, 19 [2005]). A claim for breach of fiduciary duty also requires “ the violation of some duty due to an individual, which duty is a thing different from a mere contractual obligation ” (seeBatas v Prudential Ins. Co. of Am., 281 AD2d 260, 264 [1st Dept 2001] [internal quotation marks and citation omitted]).
A breach of fiduciary duty claim is duplicative of a legal malpractice claim when both are based upon the same facts and seek the same damages (see Barrett v Goldstein, 161 AD3d 472, 473 [1st Dept 2018]; accordCohen, 115 AD3d at 513). As applied herein, plaintiff has established that the fiduciary duty counterclaim is grounded upon the same facts as the legal malpractice counterclaim. Defendant has neither attempted to distinguish the two counterclaims nor addressed why the second counterclaim should not be dismissed.
Adam Leitman Bailey, P.C. v Pollack, 63 Misc 3d 1229(A) [Sup Ct 2019]
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