Boye v. Rubin & Bailin, LLP

• Decision Date: 30 May 2017
• Citation: 152 A.D.3d 1,56 N.Y.S.3d 57
• Parties: Frank BOYE, Plaintiff–Appellant, v. RUBIN & BAILIN, LLP, etc., et al., Defendants, Eric Vaughn–Flam, P.C., et al., Defendants–Respondents.
• Court: New York Supreme Court — Appellate Division

152 A.D.3d 1

56 N.Y.S.3d 57

Frank BOYE, Plaintiff–Appellant,

v. RUBIN & BAILIN, LLP, etc., et al., Defendants,Eric Vaughn–Flam, P.C., et al., Defendants–Respondents.

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

May 30, 2017.

Andrew Lavoot Bluestone, New York, for appellant.

Ortoli Rosenstadt LLP, New York (Eric Vaughn–Flam of counsel), for respondents.

TOM, J.P., MOSKOWITZ, FEINMAN, GISCHE, KAPNICK, JJ.

TOM, J.P.

This action seeks damages for alleged legal malpractice committed by, as is relevant to this appeal, defendants Eric Vaughn–Flam, PC (the firm) and Eric Vaughn–Flam, Esq. We find that Supreme Court properly dismissed the legal malpractice claims against defendants based on, inter alia, defendants, alleged withdrawal of certain causes of action previously asserted on plaintiff's behalf in an underlying federal suit. Separately, our review of the history of this litigation contained in the record and this frivolous appeal persuades us to impose sanctions on plaintiff's counsel.

Plaintiff, a Danish citizen, owned or was the authorized agent for many works of fine art that he brought to New York to sell. He contracted with Jurdem Associates, Inc., a public relations firm, to facilitate the sales, and, on its recommendation, contracted with Jan Amory to display the art in her Manhattan apartment. In March 2003, plaintiff realized numerous works of art were missing from the apartment.

Plaintiff retained defendants to commence the underlying federal action. On March 20, 2006–more than three years after plaintiff discovered the missing art—defendants filed a complaint (the federal complaint) on his behalf in the Southern District of New York against Jurdem Associates, its sole shareholder, Arnold Jurdem (collectively the Jurdem defendants), and Amory, in connection with approximately 47 works of art that were improperly taken or lost. The federal complaint alleged fraud, conversion, and breach of the "Amory Contract" against all the defendants, and an additional claim of breach of the "Jurdem Contract" against the Jurdem defendants.

On November 1, 2006, after their relationship with plaintiff had deteriorated, the firm moved to withdraw as his counsel in the federal action, and on November 14, 2006, the Southern District granted the motion.

On January 18, 2007, successor counsel Jan Meyer of Jan Meyer & Associates P.C. filed a notice of appearance in the federal action on plaintiff's behalf. On August 2, 2007, Meyer filed an amended federal complaint, which alleged seven causes of action which included the four counts in the original complaint filed by Vaughn–Flam, and the additional claims of negligence, breach of fiduciary duty, and piercing the corporate veil against the Jurdem defendants.

On November 26, 2007 the Jurdem defendants moved for summary judgment dismissing all claims against them. On December 17, 2007, Meyer—plaintiff's successor counsel—opposed the motion in part, and voluntarily withdrew the conversion and breach of the Armory contract claims against the Jurdem defendants.

In an order dated August 27, 2008, the Southern District (Kevin Castel, J.), granted the Jurdem defendants' motion in part. Initially, the court deemed the voluntarily withdrawn conversion and breach of the Amory contract claims dismissed. The court also dismissed in part the negligence and breach of fiduciary duty claims against the Jurdem defendants as time-barred. Because the court found both were tort claims, and the statutes of limitations began to run "upon injury," the court dismissed as time-barred those negligence and breach of fiduciary duty claims "that are based on the sale or other removal of Artwork from Amory's apartment that occurred prior to March 20, 2003," i.e., more than three years before the complaint was filed. The Southern District also denied summary judgment on the breach of the Jurdem contract, fraud, and piercing the corporate veil claims against Jurdem Associates. However, it dismissed the breach of the Jurdem contract, negligence, breach of fiduciary duty, and fraud claims against Arnold Jurdem individually. On February 4, 2009 Boye settled the case with the Jurdem defendants.

In the meantime, Amory never appeared or answered the complaint, so claims against her were not addressed in the motion papers in the federal action. Yet, successor counsel never sought a default judgment against her on the conversion and breach of the Amory contract claims (which successor counsel had not withdrawn), or on the fraud claim.

On March 6, 2010, plaintiff, through his attorney, Andrew Lavoott Bluestone, who represents him on this appeal, commenced this action against defendants, alleging legal malpractice and breach of fiduciary duty. Significantly, the complaint alleges, inter alia, that defendants "negligently failed to render competent legal service when, they unilaterally, without notice and without consent, voluntarily withdrew all claims of conversion and breach of contract against [the Jurdem defendants]." It also alleges that they failed to file the federal complaint in a timely manner. The malpractice complaint alleges that, but for the withdrawal of the conversion and breach of contract claims, plaintiff would have prevailed in the federal action.

Defendants moved to dismiss the complaint pursuant to CPLR 3211(a)(1) and (7) based on documentary evidence and failure to state a claim, for leave to amend its verified answer to assert an affirmative defense of documentary evidence, and for sanctions pursuant to 22 NYCRR 130–1.1. With regard to both the grounds for dismissal and the basis for sanctions, defendants argued that the public record established that it was successor counsel (Meyer) who withdrew the conversion and breach of contract claims in the federal action and not defendants. Defendants also stressed that successor counsel also failed to move for a default judgment against Amory in the federal action and settled with the Jurdem defendants, and that such actions were the proximate cause of plaintiff's alleged damages.

Although plaintiff's counsel submitted opposition to the motion, he did not address the relevant points made by defendants regarding the facts established by the public record. Nor did he make any efforts to correct the record or withdraw claims he knew or should have known were frivolous.

Supreme Court granted defendants' motion in part to dismiss plaintiff's claim against defendants for unilaterally withdrawing the conversion and breach of contract claims pursuant to CPLR 3211(a)(1), based on documentary evidence, because it was brought against the wrong attorney, as it was successor counsel Meyer who withdrew those claims in the federal action.

However, Supreme Court denied the motion to dismiss the claims for failure to state a cause of action, and concluded that although defendants had "raised serious doubts about the accuracy of [plaintiff's] description of events including ... whether Boye would have been able to achieve a better result but for the actions of the [Firm]," such arguments raised issues of fact more appropriately dealt with on a motion for summary judgment.

The court also denied the request for sanctions, finding that although the withdrawal of certain claims in the federal action was clearly performed by successor counsel, plaintiff's "misstatements [do not] rise to a level sufficient to impose sanctions."

Defendants thereafter moved for summary judgment dismissing the complaint and for sanctions, arguing that the conversion and breach of contract claims it had alleged in the original federal complaint were not time-barred, and that, as the court had ruled, successor counsel had withdrawn those claims. They also argued that they were not legally obligated to accommodate all possible causes of action, including those that might be raised by successor counsel. Moreover, they noted that plaintiff had admitted in the verified complaint that the conversion and breach of contract claims would have been successful, which barred plaintiff from alleging legal malpractice against them.

Reiterating the frivolous nature of plaintiff's claims, defendants advised the court that there had been a "substantial cost" to defending the " recklessly, perhaps maliciously, filed action" and suggested that "it would be fair to compensate [defendants] for the legal fees expended in this wasteful exercise."

Once again, although plaintiff's counsel—Mr. Bluestone—opposed the motion for summary judgment, he focused his response on his position that there was no reasonable explanation for defendants' delay in commencing the federal action. He further claimed there were issues of fact presented in this matter, that further discovery was necessary, and that defendants' motion failed in the absence of an expert affidavit.

Notably, Mr. Bluestone did not address that it was well established by the record and Supreme Court's prior order that it had been successor counsel who had withdrawn the conversion and breach of contract claims in the federal action. Nor did he make any efforts to correct the record or withdraw claims he most certainly knew were frivolous. Moreover, in plaintiff's affidavit, plaintiff asserted that defendants were improperly asking for sanctions, and intimated that defendants might be subject to sanctions for "wrongfully asking over and over for sanctions."

Supreme Court granted the motion for summary judgment and dismissed the remaining claims against defendants. The court noted that it had previously dismissed that portion of the legal malpractice claims alleging that defendants had withdrawn the federal conversion and breach of contract claims.

Regarding any alleged malpractice arising from the failure to timely commence the federal complaint or plead other claims, the court held that there was merit to the conversion and breach of contract claims against Amory and Jurdem Associates, and fraud against all the federal action defendants, and it cited the Southern...