Doviak v. Finkelstein & Partners, LLP

• Decision Date: 09 March 2016
• Citation: 27 N.Y.S.3d 164,137 A.D.3d 843
• Court: New York Supreme Court — Appellate Division
• Parties: Robert DOVIAK, et al., appellants, v. FINKELSTEIN & PARTNERS, LLP, et al., respondents, et al., defendant.

137 A.D.3d 843

27 N.Y.S.3d 164

Robert DOVIAK, et al., appellants,

v.FINKELSTEIN & PARTNERS, LLP, et al., respondents, et al., defendant.

Supreme Court, Appellate Division, Second Department, New York.

March 9, 2016.

Phillips & Paolicelli, LLP, New York, N.Y. (Steven J. Phillips, Aryeh L. Taub, and Yitzchak M. Fogel of counsel), for appellants.

Furman Kornfeld & Brennan, LLP, New York, N.Y. (A. Michael Furman and Brian R. Loucks of counsel), for respondents.

REINALDO E. RIVERA, J.P., JOHN M. LEVENTHAL, SANDRA L. SGROI and SYLVIA O. HINDS–RADIX, JJ.

In an action, inter alia, to recover damages for legal malpractice, the plaintiffs appeal (1) from an order of the Supreme Court, Orange County (Ecker, J.), dated December 3, 2012, which, sua sponte, referred the eighth cause of action to the Supreme Court, Ulster County, for determination, (2), as limited by their brief, from so much of an order of the same court dated February 15, 2013, as denied their motion for a new trial on the first seven causes of action and for the entry of a judgment in their favor on the eighth cause of action, and (3), as limited by their brief, from so much of a judgment of the same court, dated May 10, 2013, which, upon a jury verdict, is in favor of the defendants Finkelstein & Partners, LLP, Andrew G. Finkelstein, and Thomas C. Yatto and against them dismissing the first seven causes of action.

ORDERED that on the Court's own motion, the notice of appeal from the order dated December 3, 2012, is deemed to be an application for leave to appeal, and leave to appeal is granted (see CPLR 5701[c] ); and it is further,

ORDERED that the order dated December 3, 2012, is affirmed; and it is further,

ORDERED that the appeal from so much of the order dated February 15, 2013, as denied that branch of the plaintiffs' motion which was for a new trial on the first seven causes of action is dismissed; and it is further,

ORDERED that the order dated February 15, 2013, is affirmed insofar as reviewed; and it is further,

ORDERED that the judgment is affirmed insofar as appealed from; and it is further,

ORDERED that one bill of costs is awarded to the defendants Finkelstein & Partners, LLP, Andrew G. Finkelstein, and Thomas C. Yatto.

The appeal from so much of the order dated February 15, 2013, as denied that branch of the plaintiffs' motion which was for a new trial on the first seven causes of action must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment dismissing those causes of action (see Matter of Aho, 39 N.Y.2d 241, 248, 383 N.Y.S.2d 285, 347 N.E.2d 647 ). The issues raised on the appeal from that portion of the order dated February 15, 2013, are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1] ).

The defendants Andrew G. Finkelstein and Thomas C. Yatto, attorneys with the law firm Finkelstein & Partners, LLP (hereinafter collectively the defendants), represented the plaintiffs in an underlying personal injury action stemming from injuries that the plaintiff Robert Doviak (hereinafter Doviak) sustained when he fell from a height while working on the construction of a building for Lowe's Home Centers, Inc. (hereinafter Lowe's). Doviak and his wife, Zaytune Doviak (hereinafter Mrs. Doviak; hereinafter together the plaintiffs), engaged the defendants to represent them in the personal injury action against Lowe's and others (hereinafter collectively the personal injury defendants).

During the trial of the underlying injury action, the personal injury defendants extended settlement offers in the sums of $4 million, $8 million, $9.25 million, and $10 million, respectively, each of which the plaintiffs declined upon the defendants' advice. On the evening after the parties had rested, and prior to summations, the personal injury defendants extended a written settlement offer in the sum of $12 million, along with a structured settlement plan which would yield greater sums if invested as proposed (hereinafter the $12 million offer).

Yatto, who represented the plaintiffs at trial, testified that he communicated the $12 million offer to the plaintiffs and handed Mrs. Doviak the written document containing the offer (hereinafter the offer document) to review but that, the following morning, Mrs. Doviak explicitly rejected the $12 million offer and handed the offer document back to him. The plaintiffs, on the other hand, testified that they were never informed of the $12 million offer and that, had they been informed of it, they would have accepted it.

The jury in the personal injury action returned a verdict in favor of the plaintiffs in the sum of approximately $3.7 million. The defendants successfully sought additur from the Supreme Court, Ulster County, which increased the verdict to the sum of approximately $6.8 million. In November 2007, after the successful additur motion, the plaintiffs discharged the defendants and engaged successor counsel. Successor counsel obtained further additur from the Appellate Division, Third Department, for a total verdict in the sum of approximately $9.3 million (see Doviak v. Lowe's Home Ctrs., Inc., 63 A.D.3d 1348, 880 N.Y.S.2d 766 ).

The plaintiffs thereafter commenced this action against the defendants, alleging, inter alia, that the defendants committed legal malpractice by failing to communicate the $12 million offer to them. The plaintiffs also alleged a variety of other legal errors and sought, inter alia, a finding that they had discharged the defendants for cause and that, accordingly, the defendants were not entitled to recover fees in the personal injury action.

During Mrs. Doviak's deposition in this action, the defendants' counsel handed her the original offer document. The plaintiffs subsequently moved to impose sanctions on the defendants on the ground that the defendants had failed to preserve the offer document for fingerprint analysis and had made such analysis impossible. The plaintiffs maintained that, had the offer document been analyzed, it would have revealed that Mrs. Doviak's fingerprints were not on it and, therefore, would have been evidence that the defendants had not delivered the $12 million offer to them. The Supreme Court denied the plaintiffs' motion.

In an order dated December 3, 2012, the court, sua sponte, referred the eighth cause of action, seeking a declaration that the defendants were discharged for cause and were, therefore not entitled to recover fees, to the Supreme Court, Ulster County, so that the issues presented in that cause of action could be resolved in the context of the entry of the final judgment in the underlying action.

During the trial, the plaintiffs sought to present the testimony of two expert witnesses. Following hearings regarding each of the proposed experts, the Supreme Court precluded their testimony. Also during the trial, the court, in effect, denied the plaintiffs' request for leave to present the jury with an alternative theory of liability.

The jury ultimately rendered a verdict in favor of the defendants, finding that the defendants had communicated the $12 million offer to the plaintiffs. Thereafter, the plaintiffs moved, inter alia, for an order granting them a new trial on the first seven causes of action and for judgment in their favor on the eighth cause of action. In an order dated February 15, 2013, the Supreme Court denied that motion.

In a decision and order dated December 17, 2015, the Appellate Division, Third Department, among other things, affirmed a judgment of the Supreme Court, Ulster County, which determined that the defendants were not discharged for cause in the underlying action and, therefore, that the defendants were entitled to a fee (see Doviak v. Lowe's Home Ctrs., Inc., 134 A.D.3d 1324, 21 N.Y.S.3d 754 ).

"Under the common-law doctrine of spoliation, a party may be sanctioned where it negligently loses or intentionally destroys key evidence" (Morales v. City of New York, 130 A.D.3d 792, 793, 13 N.Y.S.3d 548 ; see CPLR 3126 ; Eremina v. Scparta, 120 A.D.3d 616, 617, 991 N.Y.S.2d 438 ; Biniachvili v. Yeshivat Shaare Torah, Inc., 120 A.D.3d 605, 606, 990 N.Y.S.2d 891 ). "The party requesting sanctions for spoliation has the burden of demonstrating that a litigant intentionally or negligently disposed of critical evidence, and fatally compromised its ability to prove its claim or defense" (Morales v. City of New York, 130 A.D.3d at 793, 13 N.Y.S.3d 548 [internal quotation marks omitted]; see Lentini v. Weschler, 120 A.D.3d 1200, 1201, 992 N.Y.S.2d 135 ). "[T]he Supreme Court has broad discretion in determining what, if any, sanction should be imposed for spoliation of evidence" and may, "under appropriate circumstances, impose a sanction even if the destruction occurred through negligence rather than wilfulness, and even if the evidence was destroyed before the spoliator became a party, provided the spoliator was on notice that the evidence might be needed for future litigation" (Biniachvili v. Yeshivat Shaare Torah, Inc., 120 A.D.3d at 606, 990 N.Y.S.2d 891 ; see Ortiz v. Bajwa Dev. Corp., 89 A.D.3d 999, 933 N.Y.S.2d 366 ; Awon v. Harran Transp. Co., Inc., 69 A.D.3d 889, 890, 895 N.Y.S.2d 135 ; but see Eremina v. Scparta, 120 A.D.3d at 618, 991 N.Y.S.2d 438 ). This Court will substitute its judgment for that of the Supreme Court only if that court's discretion was improvidently exercised (see Morales v. City of New York, 130 A.D.3d at 793, 13 N.Y.S.3d 548 ; Samaroo v. Bogopa Serv. Corp., 106 A.D.3d 713, 714, 964 N.Y.S.2d 255 ; Ortiz v. Bajwa Dev. Corp., 89 A.D.3d at 999, 933 N.Y.S.2d 366 ).

Here, the record supports the Supreme Court's conclusion that the plaintiffs failed to demonstrate that the defendants intentionally or negligently destroyed fingerprint evidence which was critical to their case. The plaintiffs failed to demonstrate that they requested that the offer document be tested for fingerprints, or that it be preserved for forensic testing...