Rosenbaum v. Myers
| Decision Date | 14 February 2020 |
| Docket Number | 652971/2019 |
| Citation | 128 N.Y.S.3d 782,68 Misc.3d 867 |
| Parties | Thane ROSENBAUM, Plaintiff, v. Roslyn MYERS, Defendant. |
| Court | New York Supreme Court |
For Plaintiff: Benjamin A. Allee Esq., Yankwitt LLP, 140 Grand Street, White Plains, NY 10601
For Defendant: Robin Shifrin Esq., 1212 5th Avenue, New York, NY 10019, Robert S. Smith Esq., Friedman Kaplan, 7 Times Square, New York, NY 10019
Lucy Billings, J. Plaintiff sues for breach of a contract in which defendant agreed to pay plaintiff a percentage of the net proceeds from the sale of residential real property. Defendant moves to dismiss the complaint under C.P.L.R. § 3211(a)(1) and (7) and for attorneys' fees under 22 N.Y.C.R.R. § 130-1.1.
The Verified Complaint alleges that beginning on or about October 1, 2004, plaintiff, an attorney, assisted defendant to obtain full title to residential property at 202 Lenox Avenue, New York County, as part of her equitable distribution of marital assets in a divorce action. An Acknowledgment of Debt dated February 7, 2005, signed by defendant, and attached to the Verified Complaint, provides that she owes plaintiff a debt equal to 25% of the net proceeds eventually realized from the sale of the property, in exchange for his legal representation and advice.
In evaluating defendant's motion to dismiss the complaint under C.P.L.R. § 3211(a)(7), the court must accept plaintiff's allegations as true, liberally construe them, and draw all reasonable inferences in his favor. JF Capital Advisors, LLC v. Lightstone Group, LLC , 25 N.Y.3d 759, 764, 16 N.Y.S.3d 222, 37 N.E.3d 725 (2015) ; Miglino v. Bally Total Fitness of Greater NY, Inc. , 20 N.Y.3d 342, 351, 961 N.Y.S.2d 364, 985 N.E.2d 128 (2013) ; ABN AMRO Bank, N.V. v. MBIA Inc. , 17 N.Y.3d 208, 227, 928 N.Y.S.2d 647, 952 N.E.2d 463 (2011) ; Drug Policy Alliance v. New York City Tax Comm'n , 131 A.D.3d 815, 816, 15 N.Y.S.3d 784 (1st Dep't 2015). Dismissal is warranted only if the complaint fails to allege facts that fit within any cognizable legal theory. ABN AMRO Bank, N.V. v. MBIA Inc. , 17 N.Y.3d at 227, 928 N.Y.S.2d 647, 952 N.E.2d 463 ; Lawrence v. Graubard Miller , 11 N.Y.3d 588, 595, 873 N.Y.S.2d 517, 901 N.E.2d 1268 (2008) ; Nonnon v. City of New York , 9 N.Y.3d 825, 827, 842 N.Y.S.2d 756, 874 N.E.2d 720 (2007) ; Mill Financial, LLC v. Gillett , 122 A.D.3d 98, 103, 992 N.Y.S.2d 20 (1st Dep't 2014). A motion to dismiss based on documentary evidence pursuant to C.P.L.R. § 3211(a)(1) will succeed only if admissible documentary evidence completely refutes plaintiff's factual allegations, resolving all factual issues as a matter of law. Nomura Home Equity Loan, Inc., Series 2006-FM2 v. Nomura Credit & Capital, Inc. , 30 N.Y.3d 572, 601, 69 N.Y.S.3d 520, 92 N.E.3d 743 (2017) ; Goshen v. Mutual Life Ins. Co. of NY , 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190 (2002) ; Calpo-Rivera v. Siroka , 144 A.D.3d 568, 568, 42 N.Y.S.3d 19 (1st Dep't 2016).
Relying on the documents filed in the divorce action in this court where defendant obtained her equitable distribution, she maintains that plaintiff's noncompliance with the regulations governing matrimonial actions bars enforcement of a contract to recover compensation for his services in the divorce action. In particular, defendant claims that, in providing her legal representation and advice, plaintiff failed to (1) give her a statement of rights and responsibilities, 22 N.Y.C.R.R. § 1400.2 ; (2) obtain from her or file with the court a written retainer agreement, 22 N.Y.C.R.R. § 1400.3 ; (3) file a statement of her net worth with the court, 22 N.Y.C.R.R. § 202.16 ; or (4) obtain the court's approval to secure his attorney's fees with a security interest. 22 N.Y.C.R.R. § 1400.5. Although plaintiff may not be required in his complaint to allege compliance with the regulations governing matrimonial actions, an attorney's violation of these regulations precludes the attorney from collecting fees for services in a matrimonial action. Law Off. of Sheldon Eisenberger v. Blisko , 106 A.D.3d 650, 652, 965 N.Y.S.2d 501 (1st Dep't 2013) ; Edelman v. Poster , 72 A.D.3d 182, 184, 894 N.Y.S.2d 398 (1st Dep't 2010) ; Julien v. Machson , 245 A.D.2d 122, 122, 666 N.Y.S.2d 147 (1st Dep't 1997). Defendant also claims that enforcement of the Acknowledgment of Debt violates the Rules of Professional Conduct prohibiting contingent fees in matrimonial actions, 22 N.Y.C.R.R. § 1200.0, Rule 1.5(c) and (d)(5), thus invalidating the contract. Xiao Yang Chen v. Fischer , 6 N.Y.3d 94, 101, 810 N.Y.S.2d 96, 843 N.E.2d 723 (2005) ; Weinstein v. Barnett , 219 A.D.2d 77, 79, 640 N.Y.S.2d 103 (1st Dep't 1996) ; Medina v. Richard A. Kraslow, P.C. , 149 A.D.3d 928, 929-30, 53 N.Y.S.3d 116 (2d Dep't 2017) ; Law Off. of Howard M. File, Esq., P.C. v. Ostashko , 60 A.D.3d 643, 644, 875 N.Y.S.2d 502 (2d Dep't 2009). See Freeman Lewis LLP v. Financiera De Desarrollo Indus. y Commercial S.A. , 172 A.D.3d 574, 574-75, 102 N.Y.S.3d 554 (1st Dep't 2019) ; David v. Hack , 97 A.D.3d 437, 438, 948 N.Y.S.2d 583 (1st Dep't 2012).
The regulations governing matrimonial actions apply to plaintiff's legal representation and advice for three principal reasons. First, plaintiff filed an appearance on defendant's behalf in the divorce action. Aff. of Roslyn Myers Ex. 1 ¶ 14. See 22 N.Y.C.R.R. § 1400.1 ; Law Off. of Sheldon Eisenberger v. Blisko , 106 A.D.3d at 652, 965 N.Y.S.2d 501. ; Edelman v. Poster , 72 A.D.3d at 186, 894 N.Y.S.2d 398. Second, as alleged in the complaint, plaintiff provided legal services to defendant in the divorce action. Myers Aff. Ex. 1 ¶¶ 5, 13-14, 16, 34. In fact, the complaint extols plaintiff's extensive legal services in the divorce action, assisting defendant in obtaining valuable real property as part of her equitable distribution, which plaintiff oversaw to its resolution through a settlement and judgment in 2006. Id. ¶¶ 14, 16, 34. This assistance to defendant qualifies not only as legal services, but as one of the most significant services, in the divorce action. Third, the Acknowledgment of Debt itself specifies that the "debt arises as a consequence of the extensive representation and advice in all legal proceedings and negotiations with various parties," when the only "legal proceedings" in which plaintiff and defendant were involved was the divorce action. Because the Acknowledgment of Debt's plain terms provide that the debt arose from plaintiff's legal services, which plaintiff rendered in a divorce action, the matrimonial regulations govern those legal services and the contract to compensate plaintiff for them. Edelman v. Poster , 72 A.D.3d at 184, 894 N.Y.S.2d 398. See Coburn v. Coburn , 303 A.D.2d 281, 281, 755 N.Y.S.2d 615 (1st Dep't 2003).
The only violation of the regulations governing matrimonial actions that the documents filed in the divorce action establish is plaintiff's failure to file a retainer agreement. 22 N.Y.C.R.R. § 1400.3 ; Leary v. Bendow , 161 A.D.3d 420, 421, 76 N.Y.S.3d 519 (1st Dep't 2018) ; Matter of Part 60 RMBS Put-Back Litig. , 155 A.D.3d 482, 483, 65 N.Y.S.3d 133 (1st Dep't 2017) ; Bennett v. Gordon , 99 A.D.3d 539, 539, 952 N.Y.S.2d 166 (1st Dep't 2012) ; Yuppie Puppy Pet Prods., Inc. v. Street Smart Realty, LLC , 77 A.D.3d 197, 202, 906 N.Y.S.2d 231 (1st Dep't 2010). The Acknowledgment of Debt itself, attached to the complaint, establishes that "the payment or amount of the fee is ... determined by reference to the amount of ... equitable distribution, or property settlement," in violation of 22 N.Y.C.R.R. § 1200.0, Rule 1.5(d)(5)(i). To support the other violations, defendant relies on her affidavit, which the court may not consider as the type of documentary evidence to support a motion under C.P.L.R. § 3211(a)(1). Serao v. Bench-Serao , 149 A.D.3d 645, 646, 53 N.Y.S.3d 628 (1st Dep't 2017) ; Calpo-Rivera v. Siroka , 144 A.D.3d at 568, 42 N.Y.S.3d 19 ; Asmar v. 20th & Seventh Assoc., LLC , 125 A.D.3d 563, 564, 4 N.Y.S.3d 198 (1st Dep't 2015) ; City of New York v. VJHC Dev. Corp. , 125 A.D.3d 425, 426, 2 N.Y.S.3d 453 (1st Dep't 2015).
Although a single violation of the regulations in the context of substantial compliance with the regulations may not totally bar recovery, plaintiff falls far short of substantial compliance. Law Off. of Sheldon Eisenberger v. Blisko , 106 A.D.3d at 652, 965 N.Y.S.2d 501 ; Daniele v. Puntillo , 97 A.D.3d 512, 513, 949 N.Y.S.2d 365 (1st Dep't 2012) ; Moyal v. Moyal , 85 A.D.3d 614, 616-17, 927 N.Y.S.2d 19 (1st Dep't 2011) ; Flanagan v. Flanagan , 267 A.D.2d 80, 81, 699 N.Y.S.2d 406 (1st Dep't 1999). Taking the position that the regulations do not apply to him, he shows no compliance whatsoever. Edelman v. Poster , 72 A.D.3d at 184, 894 N.Y.S.2d 398 ; Julien v. Machson , 245 A.D.2d at 122, 666 N.Y.S.2d 147. The established violation of 22 N.Y.C.R.R. § 1400.3, moreover, is substantial in itself, because the requirements for a retainer agreement implicate the client's rights to cancel the agreement, to be informed of the attorney's hourly rate, to itemized billing every 60 days, and to arbitrate any dispute concerning the attorney's fee, none of which plaintiff afforded to defendant. Therefore, even though plaintiff may have obtained favorable results for defendant, his total failure to comply with the regulations governing his services bars enforcement of the contract providing for his recovery of compensation for those services.
Defendant does not dispute that plaintiff provided legal services collateral to the divorce action, such as assisting her in financing and developing the property obtained in the divorce action. The fact that the Acknowledgment of Debt may include legal services unrelated to the divorce action, however, does not permit plaintiff to recover for those separate services when his compensation for matrimonial services and non-matrimonial services is combined in a single...
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