Sanctions against attorneys for failing to notify the court that an appeal has been withdrawn

The Appellate Division made a decision regarding the request for sanctions against attorneys for failing to notify the court that an appeal has been withdrawn as moot. The court reminded counsel of the obligation to monitor the status of cases and keep the Appellate Division informed of developments in cases that may affect a pending appeal. In Guo-Bang Chen v Caesar and Napoli, P.C., 179 AD3d 46, 49-52 [2d Dept 2019], the court held:

This subdivision, by its plain language, imposes a continuing obligation on counsel to monitor the status of the case and to apprise the Appellate Division of certain developments that might affect a pending appeal (see 22 NYCRR 1250.2[c] ). Although, pursuant to this section, only one attorney needs to notify the Court of the relevant developments, all of the attorneys are independently responsible for ensuring that a timely notification actually takes place (see 22 NYCRR 1250.2[c] ). Where, as here, a timely notification is not given by any of the attorneys, they may each be held independently responsible and, absent a showing of good cause for the failure to ensure a timely notification, sanctioned for their respective conduct (see id.; Bank of N.Y. Mellon v. Smith, 176 A.D.3d 83, 108 N.Y.S.3d 193).

Here, the record demonstrates that the underlying action was settled on March 1, 2019, as confirmed in an email exchange between the Fixler firm, representing the appellants, and the Sim firm, representing the respondent. In one of those emails, an attorney from the Sim firm expressed his understanding that the Fixler firm would, among other things, withdraw the appeal pending in this Court. By email of March 5, 2019, to the Sim firm, an attorney with the Fixler firm stated that he would advise the appellants and their appellate counsel of the settlement and direct them to withdraw the appeal. However, the Fixler firm did not advise the appellants’ appellate counsel, the Mischel firm, of the settlement until March 26, 2019, at 4:55 p.m.

The Mischel firm, relying at the time exclusively upon its appellate printer for notification of the calendaring of the appeal, was unaware, on March 26, 2019, when notice of the settlement of the action was received, that the appeal had actually been calendared. The appellate printer concedes that, due to an error in entering information into its computerized court calendar tracking system, it failed to notify the Mischel firm that the appeal had been calendared. The appellate printer represents that this was the first time such an error had occurred in relation to the multitude of cases it has worked on with the Mischel firm since 1999. The Mischel firm likewise represents that this was the first time it had missed a calendar date in two decades of appellate practice.

Acting on the erroneous assumption that the appeal had not yet been calendared, the Mischel firm mailed a letter to this Court on Tuesday, April 2, 2019, advising this Court of the settlement and requesting withdrawal of the appeal. By letter dated April 9, 2019, this Court advised counsel that, because the appeal had already been on the calendar, a stipulation withdrawing the appeal and the approval of this Court would be required (see 22 NYCRR 670.2[a][3] ).

When counsel in the underlying action reached a settlement on March 1, 2019, the settlement triggered their mutual obligations to “immediately notify” this Court (22 NYCRR 1250.2[c] ). However, neither the Fixler firm nor the Sim firm ever notified this Court.

The Fixler firm, in its capacity as the appellants’ trial counsel during the pendency of this appeal, had a continuing obligation either to advise this Court directly of the settlement or to ensure that its clients’ appellate counsel, the Mischel firm, advised this Court of the settlement. It is undisputed that, on the very day of the settlement, the Sim firm expressed its understanding that the Fixler firm would take responsibility for securing the withdrawal of the appeal. Within a few days, the Fixler firm confirmed that it would notify its clients’ appellate counsel of the settlement. However, despite this representation, the Fixler firm did not notify the Mischel firm of the settlement until three weeks later.

The Fixler firm asserts that it filed a stipulation of discontinuance with the Supreme Court, on March 29, 2019, after the settlement funds had cleared, and that this Court was notified of the settlement within two business days thereafter. The Fixler firm’s contention that it could await the clearance of the settlement payment and the finalization of other paperwork before notifying this Court of the settlement is unavailing for several reasons.

We note that the Fixler firm committed in its March 5, 2019, email to notify the appellants’ appellate counsel without expressing an intent to delay notification for any period of time or for any reason. More important, 22 NYCRR 1250.2(c) of the statewide Practice Rules of the Appellate Division requires that this Court be notified “immediately” when there has been a settlement of the matter. One of the primary purposes of section 1250.2(c) is to protect the Appellate Courts from spending time reviewing and analyzing matters that have been rendered academic (see Bank of N.Y. Mellon v. Smith, 176 A.D.3d 83, 108 N.Y.S.3d 193). Delayed notification defeats that purpose; providing notification benefits the Court, the Bar, and the public generally by enabling the Court to suspend its review of an appeal that will become academic. There is no adverse impact to the parties and counsel on such an appeal as consideration of the appeal may be readily resumed should the settlement not be implemented.

Precisely in order to alert counsel that their obligation to give immediate notification of a settlement may not be postponed or delayed, this Court adopted its own local rule of practice which states that, for purposes of 22 NYCRR 1250.2(c), settlement includes “any oral or written agreement or understanding which may, once memorialized, render a determination of the cause unnecessary” (22 NYCRR 670.2[b] ). This local rule took effect March 4, 2019, and is thus applicable to the case at hand.

In this case, members of this Court were caused to devote hours of preparation and deliberation on an appeal which, unbeknown to them, had been settled nearly one month earlier. Had this Court been timely advised of the settlement in this case, it could have avoided wasting judicial resources on a settled case and could have redirected those resources to one of the many actual controversies that fill its docket. Since the Fixler firm had an independent obligation to give this Court notice of the settlement and assured the Sim Firm that, as between the attorneys, the Fixler firm would assume responsibility for notification, the imposition of sanctions upon the Fixler firm in the sum of $250 is warranted.

While the Sim firm had its own independent obligation to immediately notify this Court of the settlement, we conclude, under the circumstances, that the Sim firm reasonably relied upon the Fixler firm’s written commitment that the Fixler firm would discharge this obligation on behalf of all counsel. Also, while the Mischel firm did not notify this Court immediately of the settlement, it did act with sufficient promptness that, under the circumstances, renders the imposition of sanctions unwarranted. Accordingly, no sanctions are imposed as against the Sim firm and the Mischel firm.

R. A. Klass
Your Court Street Lawyer

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Appellate court reversed the court order dismissing the action on the law firm’s motion to dismiss.

In an action by a client against a law firm for legal malpractice, the appellate court reversed the court order dismissing the action on the law firm’s motion to dismiss. The court held:

“ To state a cause of action to recover damages for legal malpractice, a plaintiff must allege: (1) that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession; and (2) that the attorney’s breach of the duty proximately caused the plaintiff actual and ascertainable damages ” (Dempster v. Liotti, 86 A.D.3d 169, 176, 924 N.Y.S.2d 484 [internal quotation marks omitted]; see Leder v. Spiegel, 9 N.Y.3d 836, 837, 840 N.Y.S.2d 888, 872 N.E.2d 1194). Here, accepting the facts alleged in the complaint as true, and according the plaintiff the benefit of every possible favorable inference, the plaintiff stated a cause of action to recover damages for legal malpractice (see Tooma v. Grossbarth, 121 A.D.3d at 1095–1096, 995 N.Y.S.2d 593; Endless Ocean, LLC v. Twomey, Latham, Shea, Kelley, Dubin & Quartararo, 113 A.D.3d 587, 589, 979 N.Y.S.2d 84; Reynolds v. Picciano, 29 A.D.2d 1012, 1012, 289 N.Y.S.2d 436). The evidentiary submissions did not establish that a material fact alleged in the complaint is not a fact at all and that no significant dispute exists regarding it (see Bodden v. Kean, 86 A.D.3d at 526, 927 N.Y.S.2d 137). Contrary to the defendants’ contention, the plaintiff was entitled to commence this legal malpractice action even though the underlying personal injury action was still pending, as the legal malpractice action accrued, at the latest, in November 2014 (see Johnston v. Raskin, 193 A.D.2d 786, 787, 598 N.Y.S.2d 272).

Lopez v Lozner & Mastropietro, P.C., 166 AD3d 871 [2d Dept 2018]

R. A. Klass
Your Court Street Lawyer

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Court Upholds 25-Year Lease at Fixed $800 Rent

In Borough Park, there lived an elderly couple in a house (the Kimmels). Their neighbor (Twersky) was interested in renting the first floor apartment for her son and his family. At the time that she rented the apartment, it was in poor shape and in very poor condition; indeed, the entire house needed extensive renovations. In 1995, Twersky and the Kimmels entered into a lease agreement to rent the first floor apartment.The lease agreement provided that the monthly rental amount was to be $800, and the lease term was for 25 years. As indicated in the lease agreement, throughout this time, the rental amount would not increase. Unstated in the lease agreement, however, but alleged by Twersky as a material aspect of the 25-year term at a low fixed rent was the fact that she needed to invest over $100,000 into the extensive renovation of the house, including a complete gut renovation of the first floor apartment. Separate from the lease agreement, Twersky entered into an Option to Purchase Agreement with the Kimmels, which would allow Twersky to purchase the entire house for $325,000 less rent paid until exercise of the option but in no event less than $300,000 (which option agreement was held unenforceable by the court).

Unconscionability Argument Fails:

The matter wound up in litigation after the elderly couple passed away and the executor of the surviving spouse’s estate (Kazaks) brought a “holdover” proceeding in Housing Court to evict Twersky from the apartment. Twersky then filed an action in the Supreme Court seeking an injunction to prevent Kazaks from evicting her family. Twersky relied upon both the option and lease agreements in her Complaint. Kazaks, for her part, claimed that (a) the 25-year lease was unenforceable as a matter of law; and (b) the purchase option agreement was unenforceable because not all of the heirs at law of original owners of the house signed it but just the Kimmels (who owned a portion of the house). She put forth two arguments concerning the lease: that, by law, a lease of 25 years with no rent increases throughout the term was unconscionable; and that the elderly couple suffered from various ailments and diseases during and after the time of lease execution.In making his decision, the trial judge (Justice Knipel) properly found that the lease agreement between Twersky and the Kimmels was valid and enforceable. The arguments by the executor that the lease agreement was unconscionable and should not be enforced pursuant to Real Property Law §235-c was determined to be without merit, and not supported by the evidence presented at trial. As Justice Knipel observed, the executor was “doubtless correct that a residential lease for a 25-year term is unusual, especially where, as here, no increases were provided for the entire term.”Real Property Law §235-c provides as follows:

  1. If the court as a matter of law finds a lease or any clause of the lease to have been unconscionable at the time it was made the court may refuse to enforce the lease, or it may enforce the remainder of the lease without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.
  2. When it is claimed or appears to the court that a lease or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its setting, purpose and effect to aid the court in making the determination.

In Gillman v. Chase Manhattan Bank, N.A., 73 NY2d 1, 10 [1988], the NYS Court of Appeals (New York’s highest court) held, “An unconscionable contract has been defined as one which ‘is so grossly unreasonable or unconscionable in the light of the mores and business practices of the time and place as to be unenforceable according to its literal terms (See 1 Corbin on Contracts, § 128, p. 400.).’” As further enunciated by the Court, a determination of unconscionability generally requires a showing that the subject contract was both (a) procedurally and (b) substantively unconscionable when made, i.e., “some showing of an ‘absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.’” Gillman, supra at p. 10.At trial, Kazaks had not proven that the lease agreement was either procedurally or substantively unconscionable, by the standards set forth by the NYS Court of Appeals. There was no proof adduced at trial that there was an absence of meaningful choice or that the terms of the agreement were unreasonably unfavorable. On the contrary, all of the witnesses testified that the Kimmels were competent to act in their own affairs, and that the lease agreement was negotiated (including the 25-year term contained therein). Accordingly, Justice Knipel held “the court concludes that the lease is valid on its face and is enforceable.”

Appellate Division Ruling:

Richard A. Klass, Your Court Street Lawyer, was retained by Twersky to defend the appeal brought by Kazaks. By the decision of the Appellate Division, Second Department, Twersky v. Kazaks, 868 NYS2d 912 [12/16/08], the appellate court ruled that the executor could not prove that the estate was an “aggrieved” party because the two causes of action in the original action were dismissed. Accordingly, the Appellate Division dismissed the appeal of Kazaks. Further, the Court affirmed (upheld) the decision after trial by Justice Knipel.By affirming the decision of Justice Knipel, the Appellate Division held that the 25-year lease at a fixed rent of $800 will remain in effect, and that Twersky may enforce the same in any future Housing Court proceedings between the parties.

by Richard A. Klass, Esq.
©2009 Richard A. Klass. Art credits: page one, Image from Foster, Tony (2008-09). “John Romney, Artist-Engraver (1785-1863)”. Cheshire History. Showing a house in Watergate St., Chester, England.

copyr. 2011 Richard A. Klass, Esq.
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Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.comcreate new email with any questions.
Prior results do not guarantee a similar outcome.

R. A. Klass
Your Court Street Lawyer

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