Kasowitz, Benson, Torres & Friedman LLP v. Amira Nature Foods, Ltd.
| Decision Date | 13 March 2017 |
| Docket Number | Index No. 158126/2016 |
| Citation | 2017 NY Slip Op 30488 (U) |
| Court | New York Supreme Court |
| Parties | KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, Plaintiff, v. AMIRA NATURE FOODS, LTD., Defendant. |
MEMORANDUM DECISION
This is an action for breach of contract, quantum meruit, and account stated based on unpaid legal fees.
Plaintiff, Kasowitz, Benson, Torres & Friedman LLP ("Plaintiff"), now moves for summary judgment of its breach of contract (First Cause of Action) and account stated (Third Cause of Action) pursuant to CPLR § 3212, and to dismiss the amended counterclaims of Defendant, Amira Nature Foods, LTD. ("Defendant"), pursuant to CPLR § 3016[b] and § 3211[a][1], [6]1, and [7].
On August 6, 2015, Bruce Wacha ("Wacha"), Defendant's Chief Financial Officer, engaged Plaintiff to represent Defendant in connection with a short selling attack against it.2 On August 7, 2015, the parties signed the written retention agreement ("Retention Agreement"), wherein Defendant agreed to "investigate, advise, advocate, and potentially litigate concerning, among other things, the dissemination of misinformation related to [Defendant], themanipulation of its securities, and harm caused to its business, reputation, and interests" (Retention Agreement, at p.1). The Retention Agreement further states that, ("IO") (id. at p.2). Further, the Retention Agreement identified the primary attorneys handling Defendant's matter and their fees, and required Defendant to pay a retainer in the amount of $100,000 (Id. at pp.1, 2). As to Plaintiff's right to withdraw as counsel, the Retention Agreement states, in relevant portion, that:
On August 19, 2015, Plaintiff withdrew as counsel with Defendant's consent.
On November 3, 2015, Defendant e-mailed plaintiff for the return of the remainder of the retainer fee. On November 5, 2015, Plaintiff sent Defendant its invoice-for the first time-for services provided from August 6, 2015 until August 21, 2015 (the "Invoice").3 The aggregate amount of Plaintiff's representation of Defendant totaled $237,603.98: fees of $143,236 for legal work, and costs of $94,367.98, of which $91,843.36 was attributable to investigative services by IO (Id.)
On November 16, 2015, Wacha sent an e-mail to Plaintiff stating:
[I] also meant to respond to your email from the other day [November 5]. I would like to discuss the invoices live when you have a moment as they were substantially higher than we anticipated due to the duration of the engagement.
Next, on December 9, 2015, Plaintiff sent the following e-mail to Wacha:
As you requested, I re-reviewed the bills. The charges were all in line with the extraordinary task, responsibilities, and risks you were asking us to undertake in an extremely short time frame. Frankly, they were a little light under the circumstances. (Siegel Aff. Ex. P, Dec. 9, 2015 e-mail from Plaintiff to Wacha)
Finally, on December 31, 2015, less than two months after Defendant received the Invoice, Wacha sent the following e-mail to Plaintiff:
When Defendant did not pay the Invoice, Plaintiff filed the instant Complaint alleging, first, that Defendant breached the Retention Agreement "by failing and refusing to pay the fees and disbursements incurred thereunder. . ."(Compl. ¶¶17, 18). Next, Plaintiff seeks relief under the theory of quantum meruit (Id. at 25). Finally, Plaintiff asserts an account stated claim, alleging that it "[r]endered to Defendant an invoice for services rendered and expensesgenerated, and such invoice was received by Defendant without objection, protest or rejection" (Id. 27).
Plaintiff argues that it is entitled to summary judgment for breach of contract. The Retention Agreement is an enforceable contract that Defendant breached by failing to pay the Invoice. Plaintiff, on the other hand, fulfilled its obligations by providing legal services to Defendant. Moreover, Defendant's Answer only submits general denials, which are insufficient to raise any issue of fact as to the reasonable value of Plaintiff's services.
Further, Plaintiff seeks summary judgment based on an account stated between the parties, arguing that Defendant's objections to the Invoice were nonspecific and "untimely" (Pla. MOL at p.9). The Invoice was issued to Defendant on November 5, 2015, and Plaintiff made numerous attempts to discuss the Invoice with Wacha thereafter. Further, Wacha's statements that the charges on the Invoice "were substantially higher than we had anticipated due to the duration of the engagement" and that he found the Invoice to be "excessive," failed to assert a specific objection (Id.). Moreover, Defendant's attempt to assert, objections to the Invoice in the Counterclaims are untimely and insufficient (Id. at p.10).
Plaintiff argues next that Defendant's counterclaims should be dismissed. First, Defendant fails to state a claim for legal malpractice, since the allegations that Plaintiff: i) engaged the services of an unnecessary expert without authorization from Defendant; ii) over billed; and iii) over charged Defendant, are not cognizable claims for legal malpractice. Second, Defendant fails to establish that Plaintiff's actions affected the outcome of the underlying litigation. Third, Defendant fails to allege it incurred damages resulting from Plaintiff's alleged malpractice.
Finally, Defendant failed to state a claim for breach of fiduciary duty, since it fails to allege that Plaintiff was the proximate a cause of Defendant's damages, and fails to allege cognizable damages. Moreover, Defendant's claim is duplicative of its claim for legal malpractice.
Defendant likewise fails to state its claim for negligent misrepresentation with the requisite particularity or allegations of damages caused by any alleged misrepresentation.
Defendant argues that plaintiff is not entitled to summary judgment on it breach of contract claim since Plaintiff withdrew as Defendant's counsel prior to the completion of services. Under such circumstance, the amount of attorney's fees must be determined on a quantum meruit basis and a hearing is necessary to determine the actual value of Plaintiff's alleged services, especially in light of Defendant's overbilling and breach of fiduciary duty claims.
Also, Plaintiff's claim for account stated should be denied because genuine issues of material fact exist as to whether Defendant retained the Invoice for a period of time to infer assent. Defendant received the Invoice on November 5, 2015, and its first and second objections were November 16, 2015 and December 31, 2015, respectively. Further, there is no inference of acceptance of the Invoice, as Defendant did not make partial payments attributable to the Invoice.
Finally, Plaintiff's motion to dismiss is abated, given that the Amended Answer filed thereafter contains affirmative defenses and counterclaims that supersede the Answer.5
Plaintiff reiterates that Defendant's amended counterclaims must be dismissed as a matter of law and that the filing of the amended counterclaims does not automatically abate Plaintiff's motion, despite the fact that the amended pleading imposes additional causes of action.
First, as to legal malpractice, Defendant's does not claim that Plaintiff's actions affected the underlying litigation. Further, Defendant fails to allege facts supporting its claim that Plaintiff engaged in "massive overbilling and billing for "duplicative and unnecessary investigative services" (Reply at p.6). Defendant commenced suit in New York State Court with the filing of the Summons with Notice, a procedure unavailable in Federal Court, because Wacha expressed a desire to commence litigation immediately. Further, Defendant failed to allege specific factual allegations that the New York State Court filing prejudiced the underlying litigation.
Second, as to breach of fiduciary duty, Defendant fails to allege an actionable breach by Plaintiff, since Defendant's conclusory allegation that Plaintiff was "billing Defendant for legal and expert services that were unnecessary, duplicative, or wasteful" are insufficient to support a cause of action for breach of fiduciary, as they are speculative and conclusory. Further,Defendant's counterclaim is duplicative of its legal malpractice counterclaim, as...
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