Healy v. Brotman

• Decision Date: 26 July 1978
• Parties: William A. HEALY, Jr., M.D., P.C., Plaintiff, v. Harold V. BROTMAN, Esq., Defendant.
• Court: New York Supreme Court

Page 72

409 N.Y.S.2d 72

96 Misc.2d 386

William A. HEALY, Jr., M.D., P.C., Plaintiff, v. Harold V. BROTMAN, Esq., Defendant.

Supreme Court, Special Term, Suffolk County, Part I.

July 26, 1978.

Curto, Meservey, Armstrong & Waller, Huntington, for plaintiff.

Wolff & Hass, Jamaica, for defendant.

LEON D. LAZER, Justice.

In this action, the plaintiff, a doctor, seeks to recover from the defendant, a lawyer, the sum of $1,830.00, representing services rendered in treating a patient for injuries received in an automobile accident. The plaintiff also seeks to impose a constructive trust on undistributed proceeds of the settlement of the patient's own action to recover for the injuries. According to the complaint, during the pendency of the patient's law suit in which she was represented by the instant defendant, the latter repeatedly promised the plaintiff that the medical bill would be paid from the recovery proceeds and that he would have the patient execute and would return the "lien" which the plaintiff had forwarded. The case ultimately was settled for $15,000.00 from which, after payment of welfare liens, the patient received only $1,500.00, the defendant apparently received his legal fee, and the plaintiff received nothing. The defendant now moves to dismiss the complaint pursuant to CPLR 3211 and the plaintiff cross moves for a deposition.

In his motion papers, the defendant contends that the current action is barred by the statute of frauds because it is based upon an alleged oral agreement to answer for the debt, default, or miscarriage of another person, and there is no writing evidencing the agreement subscribed by the party to be charged (see General Obligations Law § 5-701(a)(2)). The plaintiff responds that defendant's promise that payment to the plaintiff would be made from recovery proceeds was either an independent one or it constituted a novation and hence it is enforceable even though not in writing. The facts of the case do not appear to be disputed.

The statute of frauds applies to a promise which is collateral or secondary and merely superadded to that of another, but it has no application to a promise which constitutes an original or primary obligation (see Bulkley v. Shaw, 289 N.Y. 133, 44 N.E.2d 398; Richardson Press v. Albright, 224 N.Y. 497, 121 N.E. 362; First Nat. Bank of Sing Sing v. Chalmers, 144 N.Y. 432, 39 N.E. 331; Geller v. Tow, 261 App.Div. 773, 27 N.Y.S.2d 138; Antonio Altimari, Inc. v. Hochberg, 59 Misc.2d 601, 300 N.Y.S.2d 266; Culkin v. Smith, 57 Misc.2d 901, 293 N.Y.S.2d 913; Terminello v. Bleecker, 155 Misc. 702, 280 N.Y.S. 326; Block v. Greenfield, 137 Misc. 573, 243 N.Y.S. 117). A novation constitutes an original obligation (Lebolt & Co. v. Maloney, 241 App.Div. 98, 271 N.Y.S. 428) because it is not an agreement to answer the debt of another but is a new and separate agreement in itself by virtue of which the old debt is extinguished (Miles v. Houghtaling, 32 A.D.2d 714, 300 N.Y.S.2d 5). Since the consideration for the new agreement is the discharge of the original obligation (Town & Country Linoleum & Carpet Co. v. Welch, 56 A.D.2d 708, 392 N.Y.S.2d 517), it is necessary that the original debt be completely extinguished and the debtor fully discharged at the time the promise is made (37 C.J.S. Statute of Frauds § 25; see Schloss Bros. & Co. v. Bennett, 260 N.Y. 243, 183 N.E. 376; Claggett v. Donaldson, 238 App.Div. 831, 263 N.Y.S. 17, app. dism., 262 N.Y. 697, 188 N.E. 126; Albert v. Parking Stations of New York, 235 App.Div. 682, 255 N.Y.S. 266, aff'd, 260 N.Y. 532, 184 N.E. 80; Henderson v. Sheppard, 231 App.Div. 610, 248 N.Y.S. 89). The question always is whether the subsequent agreement, as a matter of intention express or implied, is a superceder of or substitution for the old agreement or whether it is merely an agreement to accept performance in futuro as future satisfaction of the old agreement (Goldbard v. Empire State Mutual Life Insurance Co., 5 A.D.2d 230, 171 N.Y.S.2d 194; see Restatement of the Law, 2d, Contracts (Rev. Tentative Draft 1973) § 183 (comment)). There must have been a mutual agreement made among the parties to both the old and the new obligations whereby the new is substituted for the old (Brooklyn Packing Co. v. Zasloff, Mun.Ct., 18 N.Y.S.2d 443).

Here the plaintiff asserts that the patient, who was indigent, instructed him to contact her attorney concerning the bill and that he thereafter looked solely to the defendant for remuneration. He does not assert, however, that he agreed that the patient's debt was extinguished at the time the defendant's alleged promise was made or that there was a mutual agreement among all the parties that this be done. In fact, he relies in part upon the allegation that defendant promised to obtain a "lien" upon the proceeds which could obviously only have been executed by the client herself. Thus, plaintiff negatives any suggestion that by accepting defendant's promise he intended to extinguish the original debt or to discharge the debtor.

Even if plaintiff could show that the defendant's promise constituted an original promise, although not a novation, he would not prevail because there is no indication that there was any consideration for the promise (see Keybro Enterprises v. Four Seasons Country Cl. Cat., 25 A.D.2d 307, 269 N.Y.S.2d 291; Newton v. Van Ingen, 21 A.D.2d 425, 250 N.Y.S.2d 874, aff'd, 16 N.Y.2d 596, 261 N.Y.S.2d 55, 209 N.E.2d 102; see also Richardson Press v. Albright, supra; Bulkley v. Shaw, supra). To suffice to take a promise out of the statute of frauds, the new consideration must constitute a direct benefit to the promisor rather than merely a detriment to the promisee (Adams-Flanigan Co. v. Kling, 234 N.Y. 497, 138 N.E. 421, cert. den., 260 U.S. 741, 43 S.Ct. 98, 67 L.Ed. 491 (1922); Becker v. Krank, 62 App.Div. 514, 71 N.Y.S. 78; Gibbs v. Holden, 137 Misc. 480, 244 N.Y.S. 10, aff'd, 237 App.Div. 862, 261 N.Y.S. 970; Terminello v. Bleecker, supra; see Restatement of the Law, 2d, Contracts (Rev. Tentative Draft 1973) § 184). There is no evidence of any consideration flowing from the plaintiff to the defendant here which constituted a direct benefit to the defendant. Even if plaintiff had pleaded forbearance to sue the original debtor, the allegation would not suffice as consideration which would remove the promise from the purview of the statute of frauds since it constitutes harm to the promisee rather than benefit to the promisor (Newton v. Van Ingen, supra; Kahn v. Naitove, 171 Misc. 504, 12 N.Y.S.2d 144; see Atlantic Macaroni Co. v. Schiaffino, 252 N.Y. 547, 170 N.E. 138; Carrolton Associates v. Abrams, 57 Misc.2d 617, 293 N.Y.S.2d 159; Mann v. Ewing, 156 Misc. 216, 281 N.Y.S. 515).

The fact that the alleged promise by defendant was to pay plaintiff out of funds in his hands belonging to his client rather than out of his own funds also does not take the promise out of the statute of frauds since it is not alleged that the money was deposited for the purpose of paying the plaintiff or that the debtor subsequently consented to such a payment (see 37 C.J.S. Statute of Frauds § 18; Restatement of the Law, 2d, Contracts (Rev. Tentative Draft 1973) § 182; Restatement of the Law, Security § 91). Where a promise to pay a debt of another is coextensive with a preexisting legal duty e. g., a promise to the debtor to pay the promisee out of the debtor's funds in the hands of the promisor the promise is not within the statute even though payment will discharge the debt (see 2 Corbin on Contracts § 363). Here plaintiff alleges in his complaint that his patient "informed" him that she was represented by the defendant's law firm; in his affidavit he states that she gave him the business card of her lawyer and "advised (him) to be in touch with them regarding her bills." He does not assert that she extracted a promise from the defendant to pay plaintiff out of the recovery funds or that she agreed to execute an assignment in plaintiff's favor. To the contrary, defendant...