Martin-Trigona v. Brooks & Holtzman

• Decision Date: 09 December 1982
• Docket Number: No. 82 Civ. 4587.,82 Civ. 4587.
• Citation: 551 F. Supp. 1378
• Parties: Anthony R. MARTIN-TRIGONA, Plaintiff, v. BROOKS & HOLTZMAN and Daniel Brooks, Defendants.
• Court: U.S. District Court — Southern District of New York

551 F. Supp. 1378

Anthony R. MARTIN-TRIGONA, Plaintiff, v. BROOKS & HOLTZMAN and Daniel Brooks, Defendants.

No. 82 Civ. 4587.

United States District Court, S.D. New York.

December 9, 1982.

Anthony R. Martin-Trigona, pro se.

Brooks & Holtzman, New York City, for defendants; Daniel J. Brooks, New York City, of counsel.

OPINION

EDWARD WEINFELD, District Judge.

A common courtesy by Daniel J. Brooks, an attorney admitted to practice in this Court — the moving of the admission pro hac vice of Richard Coan, an out-of-state attorney, pursuant to General Rule 2(c) of the Southern District — has triggered this action. Rule 2(c) provides:

A member in good standing of the bar of any state or of any United States district court, may upon motion be permitted to argue or try a particular cause in whole or in part as counsel or advocate. Only an attorney of this court may enter appearances for parties, sign stipulations or receive payments upon judgments, decrees or orders.

Under this Rule it has been accepted practice in this district for a local attorney to move on oral application the admission pro hac vice of an out-of-state attorney either to argue a motion or to try a particular case, which upon compliance with the designation notice,¹ where required, is invariably granted.²

Plaintiff, Anthony R. Martin-Trigona ("Martin-Trigona"), seeks to recover from the movant attorney, Brooks, and his law partner, Holtzman, $600,000 on a claim, among others, that the motion to admit Coan under the Rule constituted "an abuse of the judicial process" whereby Brooks and his partner joined an existing conspiracy to defraud plaintiff of his property and injure him in his business.³

Recital of the events leading to this action is required. In December 1980 Martin-Trigona filed an individual Chapter 11 petition in the Bankruptcy Court of this district which was transferred by the Bankruptcy Judge on January 29, 1981, to the District of Connecticut, to which had previously been transferred from this district a Chapter 11 proceeding of the New Haven Radio, Inc. ("corporate debtor"), of which Martin-Trigona was the sole stockholder.

A notice of appeal was filed from the order transferring the Martin-Trigona proceeding to the District of Connecticut but the appeal was not perfected until some fourteen months thereafter. During the interval, Martin-Trigona had participated both in his individual and the corporate Chapter 11 proceedings in the Bankruptcy Court of Connecticut and various orders had been entered in those proceedings.⁴ Among the orders entered there was the appointment of Richard Belford as trustee to administer the Martin-Trigona estate and the authorization to retain the law firm of Coan, Lewendon & Royston of New Haven as attorneys for the trustee. Richard Coan of that firm was in charge.

When the Martin-Trigona appeal from the transfer order to Connecticut was finally noticed for argument, Belford and Coan sought to intervene and oppose the appeal on various grounds. Thereupon Martin-Trigona, by letter dated June 12, 1982, prior to the date scheduled for the argument of the appeal, notified them that they were not admitted to practice in the Southern District of New York and that "the rules of the Southern District require appearances only through local counsel with a local office." Coan then requested Brooks, a friend and a law school classmate, to move Coan's admission pro hac vice. Brooks agreed to do so, and both he and Coan co-signed a joint motion to this Court for leave for Coan to appear pro hac vice on behalf of the trustee to oppose Martin-Trigona's appeal.

Following receipt of that notice of motion, Martin-Trigona, by letter dated June 24, 1982, referred to hereafter, cautioned Brooks that unless he withdrew his appearance a professional disciplinary proceeding and legal action would follow, as indeed they did. In fact, Martin-Trigona commenced this action in the Supreme Court of the State of New York on June 24, 1982, even before the return date of the motion for leave to appear pro hac vice, which was returnable June 29, 1982, the same day when the appeal from the order transferring the Martin-Trigona Chapter 11 proceeding to Connecticut was scheduled. On that day, after hearing the respective parties, this Court, over Martin-Trigona's objection, granted the motion to admit Coan pro hac vice and the argument of the appeal proper was deferred and decided at a subsequent date.⁵ On July 14, 1982, Brooks and his law firm removed Martin-Trigona's action from the Supreme Court of the State of New York to this court pursuant to 28 U.S.C., section 1441(b).

Martin-Trigona now moves to remand the action to the state court on the ground that this court lacks subject matter jurisdiction over the controversy. Defendants oppose the motion to remand and cross-move for summary judgment and additional relief.

The Motion to Remand

28 U.S.C., section 1441(b), authorizes the removal of "any civil action of which the district courts have original jurisdiction founded upon a claim of right arising under the Constitution, treaties or laws of the United States." Martin-Trigona argues that this action was improperly removed because it does not "arise under" the laws of the United States but rather alleges common law torts under the law of New York State.

Paragraph 2 of the complaint, entitled "Summary of the Action," alleges that the defendants have engaged in fraud and abuse of process by purporting to be "local counsel" for Richard Belford without authorization by court order. The first claim is for abuse of process by filing "pleadings with courts within the County of New York making representations which were false and known to defendants to be false.... That defendants had been appointed counsel for one Belford, when in fact such pleadings were never authorized by federal rule and statute as required."⁶ The pleadings filed "with courts within the County of New York," referred to in the foregoing allegations obviously are those filed in this federal district court; the federal rule and statute referred to are the provisions of the federal bankruptcy code and bankruptcy rules which require that a trustee obtain court approval before employing an attorney to render professional services in the administration of a debtor's estate.⁷ The second and third claims repeat the allegations of the first and charge that the defendants' conduct also constitutes fraud, conspiracy to commit fraud, and prima facie tort. The relief sought in addition to $600,000 damages is an injunction "barring defendants from making false and fraudulent representations claiming to represent parties which in fact as a matter of law they do not represent."⁸

In American Well Works v. Layne & Bowler Co.,⁹ Justice Holmes stated that "a suit arises under the law that creates the cause of action." To be sure, the torts of abuse of process, fraud, and prima facie tort are causes of action created by the law of New York State rather than the United States. But that does not end the matter. The American Well Works formula is not the exclusive test for "arising under" jurisdiction. As Judge Friendly said in T.B. Harms Co. v. Eliscu:

It has come to be realized that Mr. Justice Holmes' formula is more useful for inclusion than for the exclusion for which it was intended. Even though the claim is created by state law, a case may "arise under" a law of the United States if the complaint discloses a need for determining the meaning or application of such a law.¹⁰

However worded, plaintiff's claims, although purporting to allege common law torts under New York law, involve the application and interpretation of the federal bankruptcy statute, a federal bankruptcy rule, a federal local rule governing the admission of attorneys, and a federal district court order in an action of which it had sole and exclusive jurisdiction. The alleged "abuse of judicial process and fraudulent conduct in purporting to be `local counsel' for one Richard Belford, Trustee"<sup>11</sup> involve acts and conduct which occurred in this court under federal statute and local rule. That it does not involve any act or conduct in the state courts is beyond dispute. Thus immediately after Brooks filed an affidavit for the admission of the Connecticut attorney, Martin-Trigona wrote to Brooks with respect to "your purported appearance in my bankruptcy litigation.... You have no right to appear, your appearance is void, and you have been sued for malicious abuse of process and fraud.... You claim in your affidavit to be local counsel for Richard Belford. No attorney may appear in bankruptcy court for another attorney, or for the debtor, without the prior approval of the court and full disclosure to the bankruptcy court. Mr. Coan cannot make you `local counsel' because he lacks the power to do so. Only the bankruptcy judge in Hartford can do so, if indeed he can do so."¹²

The hard core of plaintiff's claim centers about the employment of counsel for trustees under the federal bankruptcy law and the power of trustees to act thereunder, as well as local United States District Court rules pertaining to the admission of attorneys pro hac vice. Similarly, plaintiff's claim for injunctive relief barring the defendants from claiming to represent parties relates to representation in the United States District Court for this district or another federal district under the local rules. All claims center about and challenge an order of this Court which granted an application of an out-of-state attorney to appear in a proceeding pursuant to the local rules of the court. Since the complaint on its face requires determination of the meaning and application of federal law and related rules and local rules governing the admission of attorneys, and because the federal question in the case is a pivotal one, the action arises under federal law in the T.B. Harms sense. The motion to remand is denied.

Motion for Summary...