LaRusso v. Katz

• Decision Date: 15 June 2006
• Docket Number: 8509.,8510.
• Citation: 818 N.Y.S.2d 17,30 A.D.3d 240,2006 NY Slip Op 04925
• Parties: ANN LARUSSO, Appellant, v. HARRY I. KATZ, ESQ., et al., Respondents.
• Court: New York Supreme Court — Appellate Division

30 A.D.3d 240

818 N.Y.S.2d 17

2006 NY Slip Op 04925

ANN LARUSSO, Appellant, v. HARRY I. KATZ, ESQ., et al., Respondents.

8509.

8510.

Appellate Division of the Supreme Court of the State of New York, First Department.

June 15, 2006.

Judgment, Supreme Court, Bronx County (Howard R. Silver, J.), entered November 14, 2005, dismissing the complaint, and bringing up for review an order, same court and Justice, entered April 11, 2005, which granted defendants' motion for summary judgment dismissing the complaint, unanimously reversed, on the law, without costs, the motion denied and the complaint reinstated. Appeal from the aforesaid order unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Defendants represented plaintiff and her husband in a personal injury action in Bronx County captioned LaRusso v Valentine (the Valentine action). The facts of that action are relevant to the malpractice action that is the subject of this appeal.

Plaintiff was a passenger in a vehicle driven by her husband, John LaRusso. This vehicle was a "loaner" from nonparty Metro Toyota, which was performing repair work on the LaRusso vehicle. Mr. LaRusso told the police at the scene of the accident that he was traveling in the right lane of Pelham Parkway West when the car immediately in front of him "suddenly swerved to the left," revealing a vehicle operated by one Valentine "stopped in the road." He also told the police he did not have enough time or space to get out of the way and he struck the Valentine vehicle in the rear.

Defendant Katz initially represented both plaintiff and Mr. LaRusso in the Valentine action. When Valentine counterclaimed against Mr. LaRusso, he obtained separate counsel to represent him solely on that counterclaim.

At his deposition in the Valentine action, Mr. LaRusso testified that he was traveling westbound in the right lane of the three-lane Pelham Parkway. He was proceeding at approximately 40 miles per hour (mph) in light traffic when the vehicle traveling approximately two car lengths ahead of him "veered to the right to get off the exit at [Interstate] 95 North." He observed the Valentine vehicle approximately two car lengths away on the right shoulder of the road, "backing down off the shoulder" and into the right lane of Pelham Parkway in which he was traveling. He tried to swerve his car to the left to avoid the Valentine vehicle, but the right front end of his car struck the left rear bumper of the Valentine vehicle hard enough to deploy the airbags in his vehicle. Mr. LaRusso stated that approximately five seconds elapsed from the time he first observed the Valentine vehicle to the time he struck it.

Valentine refused to appear for a deposition despite repeated demands, and was ultimately precluded from offering testimony at trial. A note of issue was filed and the matter transferred to Bronx County Civil Court pursuant to CPLR 325 (d).

Counsel representing Mr. LaRusso on Valentine's counterclaim moved for summary judgment dismissing the counterclaim. This motion was opposed by defendant Katz, P.C., arguing that, based upon his deposition testimony, a jury could reasonably determine that Mr. LaRusso could have taken measures to avoid the accident, and thus could assess a percentage of liability against him. Katz also noted that Valentine's policy limits were $10,000 and that Mr. LaRusso's policy limits were $100,000. The IAS court denied the motion.

Defendants thereafter moved to withdraw as counsel for the LaRussos in the Valentine action because of threats made against defendant Katz by Mr. LaRusso. The unopposed motion was granted and new counsel for the LaRussos was substituted in the Valentine action. New counsel thereafter settled the Valentine action for $10,000, the full amount of the policy coverage.

Plaintiff commenced this action against defendants, arguing the failure to name Metro Toyota as a defendant in the Valentine action, or to commence a separate action against them on the theory of vicarious liability, constituted legal malpractice. Further, plaintiff argued that defendants' opposition to Mr. LaRusso's motion for summary judgment in the Valentine action was an admission that there was a basis in the record to conclude Mr. LaRusso was partly responsible for causing the accident that culminated in plaintiff's injuries, resulting in a conflict of interest.

Defendants moved for summary judgment dismissing the complaint, arguing, in an affirmation submitted by defendant Katz that plaintiff failed to demonstrate she sustained actual damage from the failure to commence an action against Metro Toyota. He also averred that the record in the Valentine action demonstrates Mr. LaRusso consistently maintained he was not responsible for the accident.

In opposition, plaintiff argued that defendants were aware of the potential conflict of interest in their representation of both LaRussos, particularly given the conflicting statements Mr. LaRusso made to the police at the scene, his deposition testimony and the allegations made by defendants in opposition to Mr. LaRusso's motion to dismiss the counterclaim against him. Plaintiff further argued that defendants violated Code of Professional Responsibility DR 5-105 (22 NYCRR 1200.24), particularly since they had never discussed the implications of dual representation with the clients. Plaintiff argued she suffered actual damages since the statute of limitations had run...