Davis v. Farrell Fritz, P.C.
Decision Date | 26 January 2022 |
Docket Number | 2018–01215, 2018–01216,Index No. 603239/17 |
Citation | 201 A.D.3d 869,163 N.Y.S.3d 82 |
Parties | Richard DAVIS, etc., et al., appellants, v. FARRELL FRITZ, P.C., et al., respondents. |
Court | New York Supreme Court — Appellate Division |
Chipman Brown Cicero & Cole, LLP, New York, NY (Adam D. Cole of counsel), for appellants.
L'Abbate, Balkan, Colavita & Contini, LLP, Garden City, NY (Marian C. Rice of counsel), for respondents Farrell Fritz, P.C., and John R. Morken.
Rivkin Radler, LLP, Uniondale, NY (Cheryl F. Korman, Janice DiGennaro, and Shari Lewis of counsel), for respondents Campolo, Middleton & McCormick, LLP, Joseph N. Campolo, and Patrick McCormick.
BETSY BARROS, J.P., CHERYL E. CHAMBERS, PAUL WOOTEN, DEBORAH A. DOWLING, JJ.
DECISION & ORDER
In an action to recover damages for legal malpractice and breach of fiduciary duty, the plaintiffs appeal from (1) a clerk's judgment of the Supreme Court, Nassau County, dated December 14, 2017, and (2) a clerk's judgment of the same court dated December 21, 2017. The clerk's judgment dated December 14, 2017, upon an order of the same court (Timothy S. Driscoll, J.), dated November 20, 2017, inter alia, granting the motion of the defendants Farrell Fritz, P.C., and John R. Morken pursuant to CPLR 3211(a) to dismiss the amended complaint insofar as asserted against them, is in favor of those defendants and against the plaintiffs dismissing the amended complaint insofar as asserted against those defendants. The clerk's judgment dated December 21, 2017, upon the order dated November 20, 2017, inter alia, granting the motion of the defendants Campolo, Middleton & McCormick, LLP, Joseph N. Campolo, and Patrick McCormick pursuant to CPLR 3211(a) to dismiss the amended complaint insofar as asserted against them, is in favor of those defendants and against the plaintiffs dismissing the amended complaint insofar as asserted against those defendants.
ORDERED that one bill of costs is awarded to the plaintiffs payable by the respondents appearing separately and filing separate briefs.
In 2009, the plaintiffs’ decedent, Charles Robert Allen III (hereinafter Allen) through his son Luke Allen, as guardian for the property management of his father, commenced an action in federal district court against Christopher Devine, alleging, inter alia, that Devine fraudulently induced Allen to invest $70 million in a certain broadcast company and that Devine diverted such sum for his own personal use (hereinafter the Devine action). Following Allen's death on March 9, 2011, Grace Allen was appointed executrix of his estate and substituted as the plaintiff in the action. The executrix then retained the defendants Farrell Fritz, P.C., and John R. Morken (hereinafter together the Farrell Fritz defendants) and the defendants Campolo, Middleton & McCormick, LLP, Joseph N. Campolo, and Patrick McCormick (hereinafter collectively the CMM defendants), and substituted them as counsel in the action in place of Cohen & Gresser LLP (hereinafter C & G). The Devine action later settled for $750,000. The settlement agreement also encompassed a related action against Devine commenced in the Supreme Court, New York County, by Excelsior Capital, LLC (hereinafter Excelsior), a commercial lender controlled by Richard Davis (hereinafter the Excelsior action), which had been awarded damages in excess of $20 million on its breach of contract cause of action against Devine.
Thereafter, Davis and Thaddeus Mack Allen (hereinafter Thaddeus), as co-administrators of Allen's estate under limited letters of administration issued April 10, 2017, commenced the instant action against the Farrell Fritz defendants and the CMM defendants. The complaint alleged, inter alia, that the defendants committed legal malpractice by failing to assert causes of action against Devine's alleged co-conspirator, attorney Robert E. Neiman, and Neiman's law firm, Greenberg Traurig, LLP (hereinafter collectively the Neiman defendants), and against C & G for its failure to assert causes of action against Neiman. The Farrell Fritz defendants moved pursuant to CPLR 3211(a)(1), (5), and (7) to dismiss the amended complaint insofar as asserted against it, and the CMM defendants separately moved to dismiss the amended complaint insofar as asserted against it on similar grounds. In an order dated November 20, 2017, the Supreme Court granted the motions. Clerk's judgments were later entered upon the order dismissing the amended complaint. The plaintiffs appeal from the clerk's judgments.
Contrary to the Farrell Fritz defendants’ contention, although they were retained by the executrix, the plaintiffs, upon the consent of the executrix and as court-appointed co-administrators of the estate for the limited purpose of prosecuting this action, possess the requisite privity, or a relationship sufficiently approaching privity, with their law firm (see Estate of Schneider v. Finmann, 15 N.Y.3d 306, 309, 907 N.Y.S.2d 119, 933 N.E.2d 718 ; Ianiro v. Bachman, 131 A.D.3d 925, 926, 16 N.Y.S.3d 85 ).
The defendants failed to establish, prima facie, that the releases contained within the mutual release agreement dated as of August 29, 2013, entered into between Excelsior, Davis, the executrix, and others unambiguously encompassed the legal malpractice causes of action (see CPLR 3211[a][5] ; Centro Empresarial Cempresa S.A. v. Ame´rica Mo´vil, S.A.B. de C.V., 17 N.Y.3d 269, 276, 929 N.Y.S.2d 3, 952 N.E.2d 995 ; Gorunkati v. Baker Sanders, LLC, 179 A.D.3d 904, 906, 117 N.Y.S.3d 291 ; Chiappone v. North Shore Univ. Hosp., 164 A.D.3d 463, 465, 83 N.Y.S.3d 113 ).
The Supreme Court erred in concluding that the statute of limitations on the causes of action that the plaintiffs allege should have been asserted against Neiman expired prior to the defendants’ retention. A cause of action based upon fraud must be commenced within six years from the time of the fraud, or within two years from the time the fraud was discovered, or with reasonable diligence could have been discovered, whichever is longer (see CPLR 203[g] ; 213[8]; Coleman v. Wells Fargo & Co., 125 A.D.3d 716, 716, 4 N.Y.S.3d 93 ). Although the complaint alleges that Devine and Neiman induced Allen to lend money beginning in 2000, the continuing wrong doctrine (see Selkirk v. State of New York, 249 A.D.2d 818, 819, 671 N.Y.S.2d 824 ; Barash v. Estate of Sperlin, 271 A.D.2d 558, 706 N.Y.S.2d 439 ) applies such that the six-year statute of limitations "began to run from the commission of the last wrongful act" ( Community Network Serv., Inc. v. Verizon NY, Inc., 39 A.D.3d 300, 301, 834 N.Y.S.2d 119 ). The...
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