Ingvarsdottir v. Gaines, Gruner, Ponzini & Novick, LLP

• Decision Date: 30 November 2016
• Citation: 144 A.D.3d 1099,2016 N.Y. Slip Op. 08049,43 N.Y.S.3d 68
• Parties: Helga INGVARSDOTTIR, plaintiff-respondent, v. GAINES, GRUNER, PONZINI & NOVICK, LLP, et al., defendants third-party plaintiffs-appellants, et al., defendants; Jonathan R. Pearson, third-party defendant-respondent.
• Court: New York Supreme Court — Appellate Division

144 A.D.3d 1099

43 N.Y.S.3d 68

2016 N.Y. Slip Op. 08049

Helga INGVARSDOTTIR, plaintiff-respondent,

v. GAINES, GRUNER, PONZINI & NOVICK, LLP, et al., defendants third-party plaintiffs-appellants, et al., defendants;Jonathan R. Pearson, third-party defendant-respondent.

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

Nov. 30, 2016.

Traub Lieberman Straus & Shrewsberry, LLP, Hawthorne, N.Y. (Lisa L. Shrewsberry of counsel), for defendants third-party plaintiffs-appellants.

Jonathan R. Pearson, Pound Ridge, N.Y., third-party defendant-respondent pro se and for plaintiff-respondent (two briefs filed).

MARK C. DILLON, J.P., THOMAS A. DICKERSON, COLLEEN D. DUFFY, and FRANCESCA E. CONNOLLY, JJ.

In an action to recover damages for legal malpractice, the defendants third-party plaintiffs appeal (1) from so much of an order of the Supreme Court, Westchester County (Jamieson, J.), dated April 3, 2015, as denied their motion pursuant to CPLR 3211(a) to dismiss the complaint, and (2) from so much of an order of the same court dated September 18, 2015, as, in effect, upon reargument, adhered to its original determination in the order dated April 3, 2015, denying their motion to dismiss the complaint, and granted the third-party defendant's motion to dismiss the third-party complaint.

ORDERED that the appeal from the order dated April 3, 2015, is dismissed, as the portion of the order appealed from was superseded by the order dated September 18, 2015, made, in effect, upon reargument; and it is further,

ORDERED that the order dated September 18, 2015, is modified, on the law, by deleting the provision thereof, in effect, upon reargument, adhering to the original determination in the order dated April 3, 2015, denying the motion of the defendants third-party plaintiffs to dismiss the complaint, and substituting therefor a provision, upon reargument, vacating the determination in the order dated April 3, 2015, which denied the motion of the defendants third-party plaintiffs to dismiss the complaint and thereupon granting that motion; as so modified, the order dated September 18, 2015, is affirmed insofar as appealed from; and it is further,

ORDERED that one bill of costs is awarded to the defendants third-party plaintiffs payable by the plaintiff.

On May 19, 2011, the plaintiff retained the defendants third-party plaintiffs (hereinafter the law firm parties) to defend her in a civil action in which she was named as a defendant with her former employer, nonparty Datalink Computer Products, Inc. (hereinafter Datalink), and the president and sole shareholder of Datalink, nonparty Vickram Bedi. The plaintiff, a native of Iceland, allegedly worked as an employee of Datalink in the United States while on two H–1B nonimmigrant visas issued for the period of May 20, 2005, until May 15, 2011. The plaintiff informed the law firm parties that Datalink did not pay her any wages or a salary for her services, and they subsequently asserted a cross claim on her behalf in the civil action pursuant to Business Corporation Law § 630(a) against Datalink and Bedi to recover unpaid wages. On May 3, 2014, the plaintiff commenced this action against the law firm parties to recover damages for legal malpractice alleging, among other things, that they had mistakenly asserted in her cross claim for unpaid wages that her employment with Datalink had ended in 2009, when it had actually ended on a later date, and that they had failed to timely provide notice to Bedi that she intended to recover unpaid wages from him as required by Business Corporation Law § 630(a). Thereafter, the law firm parties commenced a third-party action against the attorney who represented the plaintiff in connection with certain immigration matters both before and during the period that they represented her in the civil action. The third-party complaint alleged that the law firm parties were entitled to common-law indemnification or contribution from the third-party defendant if they were held liable for legal malpractice to the plaintiff because the third-party defendant was involved in the drafting of the plaintiff's cross claim for unpaid wages against Bedi and Datalink, and owed a duty to her to provide notice to Bedi on her behalf pursuant to Business Corporation Law § 630(a).

In September 2014, the law firm parties moved pursuant to CPLR 3211(a) to dismiss the complaint, alleging that they could not be held liable for legal malpractice because the period in which the plaintiff was required to provide notice to Bedi pursuant to Business Corporation Law § 630(a) had expired before the plaintiff retained their services. The Supreme Court, inter alia, denied their motion. Thereafter, they moved for leave to reargue their motion. The third-party defendant moved pursuant to CPLR 3211(a) to dismiss the third-party complaint on the ground that two written retainer agreements between the plaintiff and the third-party defendant expressly limited the scope of his representation of the plaintiff to issues of immigration and a claim before the United States Department of Labor (hereinafter the Department of Labor). The Supreme Court, in effect, upon reargument, adhered to its original determination in the order dated April 3, 2015, denying the motion of the law firm parties to dismiss the complaint, and granted the third-party defendant's motion to dismiss the third-party complaint. The law firm parties appeal.

Upon reargument, the Supreme Court erred in denying that branch of the motion of the law firm parties which was to dismiss the complaint pursuant to CPLR 3211(a)(7). On a motion to dismiss a complaint pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the court must accept the facts alleged in the pleading as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190 ; Leon v. Martinez, 84 N.Y.2d 83, 87, 614 N.Y.S.2d 972, 638 N.E.2d 511 ). "To state a cause of action to recover damages for legal malpractice, a [party] must allege: (1) that the attorney ‘failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession’; and (2) that the attorney's breach of the duty proximately caused the [party] actual and ascertainable damages" (Dempster v. Liotti, 86 A.D.3d 169, 176, 924 N.Y.S.2d 484, quoting Leder v. Spiegel, 9 N.Y.3d 836, 837, 840 N.Y.S.2d 888, 872 N.E.2d 1194 ; see Lieberman v. Green, 139 A.D.3d 815, 32 N.Y.S.3d 239 ).

Here, the plaintiff alleged in paragraph 51 of her complaint that she actually worked for Datalink and Bedi until November 4, 2010.

Business Corporation Law § 630(a) requires that for any employee to assert a claim to, in effect, pierce the corporate veil and hold a shareholder of a corporation responsible for the "debts, wages or salaries due and owing to any of its ... employees," written notice of claim must be given to the shareholder within 180 days "after termination of [the employee's] services" (Business Corporation Law § 630[a] ; see Stuto v. Kerber, 26 Misc.3d 535, 537, 888 N.Y.S.2d 872 [Sup.Ct., Albany County], affd. 77 A.D.3d 1233, 910 N.Y.S.2d 215, affd. 18 N.Y.3d 909, 940 N.Y.S.2d 556, 963 N.E.2d 1257 ). Therefore, the plaintiff was obligated to provide her Business Corporation Law § 630(a) notice to Bedi not later than May 4, 2011. A party's failure to comply with the notice requirement of Business Corporation Law § 630(a) precludes an action against the shareholder (see Beam v. Key Venture Capital Corp., 152 A.D.2d 825, 544 N.Y.S.2d 35 ; Pope v. Halloran, 76 A.D.2d 770, 428 N.Y.S.2d 957 ). Since the complaint also alleges that the law firm parties were retained to represent her in the civil action on May 19, 2011, the complaint fails as a matter of law to state a cause of action to recover damages for legal malpractice, as the 180–day notice period of Business Corporation Law § 630(a) had already expired by the time the attorney-client relationship was formed.

The plaintiff contends that the 180–day notice period under Business Corporation Law § 630(a) did not begin to run until May 15, 2011, the date on which the Department of Labor found, in a separate proceeding, that the plaintiff's "termination" from employment was co-extensive with the expiration of her H–1B visa (see 8 U.S.C. § 1101 [a][15][H][i][B]; 8 U.S.C. § 1182 [n][1]; 20 C.F.R. 655.731 [c][7] ). Allegations are dispersed throughout the complaint that the plaintiff was employed by Datalink and Bedi until May 15, 2011. The Supreme Court, in effect, upon reargument, denied the motion to dismiss of the law firm parties on the ground that they did not address the "interaction" between the language of Business Corporation Law § 630(a) that wages are due employees for "services performed by them" until the "termination of such services" (i.e., November 4, 2010), and the language of 8 U.S.C. § 1101(a)(15)(H)(i)(b) that visa employees are entitled to wages until, inter alia, the expiration of the plaintiff's visa (i.e., May 15, 2011). In our view, there is no "interaction" between the language of the state and federal statutes. 8 U.S.C. § 1182, entitled "Inadmissible Aliens," designates those aliens who are eligible and ineligible to receive visas. The clear purpose of section 1182(n)(1)(A)(i) is to allow employers, upon application to the Secretary of Labor, to employ foreign workers who meet specific requirements for H–1B visa status and to pay them either the actual wage paid to all...