84 N.Y.2d 83, Leon v. Martinez

Citation:84 N.Y.2d 83, 614 N.Y.S.2d 972
Party Name:Leon v. Martinez
Case Date:July 07, 1994
Court:New York Court of Appeals
 
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Page 83

84 N.Y.2d 83

614 N.Y.S.2d 972

Xavier LEON et al., Respondents,

v.

Wilfredo MARTINEZ, Defendant, and Pearlman, Apat & Futterman et al., Appellants.

New York Court of Appeals

July 7, 1994.

Page 84

[Copyrighted Material Omitted]

Page 85

[614 N.Y.S.2d 973] Rivkin, Radler & Kremer, Uniondale (Evan H. Krinick and John M. Denby, of counsel), for appellants.

Razis & Ross, P.C., Long Island City (George J. Razis and Avery Friedman, of counsel), for respondents.

Page 86

OPINION OF THE COURT

LEVINE, Judge.

Plaintiffs brought this action against defendant Wilfredo Martinez and his attorneys to enforce plaintiffs' claim of entitlement to a portion of the proceeds of the settlement of a personal injury action by Martinez against the Hertz Corporation. The complaint alleges that, before the settlement of Martinez v. Hertz Corp., at the request of plaintiffs and in consideration for plaintiffs' care of Martinez following his accident, defendant attorney Ira Futterman drafted an agreement between plaintiffs and Martinez which Martinez executed. The agreement, annexed to the complaint, provided as follows:

"(1) I give to Gina Leon 5% of any recovery that I may get after deducting all disbursements, expenses and attorney's fees from the case of WILFREDO MARTINEZ v. HERTZ CORPORATION.

Page 87

"(2) I give to Xavier Leon 5% of any recovery that I may get after deducting all disbursements, expenses and attorney's fees from the case of WILFREDO MARTINEZ v. HERTZ CORPORATION.

"(3) I give to Maria Macia 15% of any recovery that I may get after deducting all disbursements, expenses and attorney's fees from the case of WILFREDO MARTINEZ v. HERTZ CORPORATION."

Plaintiffs alleged that the agreement constituted a "lien" upon the proceeds of the settlement. The complaint further alleged that, contrary to the agreement, when the personal injury action was settled, defendant Futterman disbursed the entire net proceeds to Martinez and in doing so had a conflict of interest and was guilty of professional misconduct.

Defendants Futterman and the law firm Pearlman, Apat & Futterman moved to dismiss the complaint as against them pursuant to CPLR 3211(a)(1) as barred by documentary evidence (i.e., the agreement between plaintiffs and Martinez) and CPLR 3211(a)(7) for failure to state a cause of action. Plaintiffs submitted an affidavit in opposition describing in greater detail the services rendered by them to Martinez, the circumstances [614 N.Y.S.2d 974] under which Futterman was requested to prepare the agreement, and their ongoing professional relationship with Futterman and his firm.

Supreme Court granted defendants' motion under CPLR 3211(a)(1), concluding that Futterman's preparation of the agreement did not create liability on the part of him and his law firm for Martinez's failure to honor it. Plaintiffs appealed and the Appellate Division reversed, with one Justice dissenting (193 A.D.2d 788, 598 N.Y.S.2d 274). The Court held that where attorneys have notice of an assignment of a portion of their client's recovery, they may be held liable to the assignees for paying out that recovery in...

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