Titsworth v. Mondo

• Decision Date: 28 June 1978
• Citation: 407 N.Y.S.2d 793,95 Misc.2d 233
• Parties: Raymond TITSWORTH, Plaintiff, v. John MONDO, Defendant.
• Court: New York Supreme Court

Page 793

407 N.Y.S.2d 793

95 Misc.2d 233

Raymond TITSWORTH, Plaintiff, v. John MONDO, Defendant.

Supreme Court, Monroe County.

June 28, 1978.

[95 Misc.2d 235] Robert F. Wood, P. C., Rochester, for plaintiff.

Lines, Wilkens, Osborn & Beck, Rochester (James A. Reed, Jr., Rochester, of counsel), for defendant.

DECISION

DAVID O. BOEHM, Justice.

The main issue on the motion before this court presents what appears to be a relatively new and unsettled question in New York. Broadly framed, the question is whether plaintiff is precluded from bringing an action against his former counsel for legal malpractice committed with respect to a personal injury action where plaintiff settled that action with the original defendant. Here, the plaintiff, Raymond Titsworth, settled the original action, accepted payment and is now suing defendant, his attorney in that action, for the difference he now claims he would have received from a jury but for defendant's malpractice. Having accepted payment and executed a general release without reservation of rights, the question is whether plaintiff has a cause of action against the defendant.

The pertinent facts are as follows. Titsworth, his wife Virginia, and her daughter, Michele Hudson, were injured in an automobile accident on December 27, 1972 with a car owned by Condor Electronics, Inc. and operated by Michael T. Corso. The accident occurred as the Titsworth vehicle was exiting from I-490 to Chili Avenue in the Town of Gates, and was struck by the Condor vehicle which was proceeding the wrong way on the exit ramp. Titsworth became permanently disabled as a result of the injuries he sustained.

Defendant, John Mondo, was retained by the Titsworths and he commenced two actions against Corso and Condor. One action, brought in the name of Virginia Titsworth, as parent of Michele Hudson, an infant, sought $10,000 as damages for the infant's personal injuries and $2500 as the derivative claim for expenses and loss of services. The other action of Raymond and Virginia included claims of $100,000 for Raymond's personal injuries, $10,000 for Virginia's personal injuries and $10,000 each for loss of the other spouse's services, or a total of $130,000.

Condor is a small electronics firm owned and operated by Corso. At the time of the accident, the Condor vehicle was insured by Empire Mutual, with coverage of $100,000/$300,000.

For reasons not pertinent here, the Titsworths discharged defendant on or about January 8, 1975 and retained attorney John A. Shields in his place. However, on January 31, 1975 Mondo caused a Note of Issue and Statement of Readiness to be filed. After receipt of $483.25, covering fees and disbursements, on February 13, 1975, defendant turned over the file to Shields, and an order of substitution was obtained on March 21, 1975.

Thereafter, Shields brought a motion to increase the ad damnum in Raymond's action from $100,000 to $500,000, but Special Term denied the application. Its order, dated July 22, 1975, does not recite the grounds for the denial, but may have been based upon the grounds raised by counsel for Condor and Corso; that the Note of Issue and Statement of Readiness having been filed, the Titsworths had failed to demonstrate, as required, any change in circumstances. For some reason not explained, no appeal was taken from this order.

Thereafter, on May 18, 1976, the Titsworths settled their actions for $90,000 and executed a general release without limitation or reservation which released Condor and Corso from all claims for damages and injuries arising out of the accident. Of this sum, $1,000 settled the daughter's claim and the unallocated balance of $89,000 settled the Titsworths' claims.

Two months later, in July 1976, Raymond brought this suit against the defendant for $150,000 in damages, contending, among other things, that defendant had sued for an inadequate amount in the personal injury action and had not only failed to increase the amount sued for right after receiving a report on January 8, 1975 from the attending physician as to the permanence of Raymond's injuries but had earlier failed to do so after receiving the neurosurgeon's report on August 30, 1974 which contained similar information. In addition, the complaint alleges that defendant had improperly filed the Note of Issue and Statement of Readiness after he had been discharged and had thereby effectively prevented plaintiff's new counsel from increasing the ad damnum.

Defendant now brings this motion for summary judgment. Plaintiff is cross-moving for the same relief and, further, for leave to add Virginia as a plaintiff and to increase the damage claim from $150,000 to $500,000.

There is much force to defendant's argument that the plaintiff, having accepted a settlement substantially less than the amount sued for where there was virtually no issue of liability, may not now require a court to speculate as to what a jury would have awarded. Further, as defendant points out, how can plaintiff claim damages as a result of the order denying his motion to increase the amount sued for when he himself allowed the matter to rest there without even troubling to appeal.

There is little law in this state as to what effect the settlement of the underlying action has upon an action against an attorney for legal malpractice committed during the course of his representation in that action.

At the outset one is met with the question of the effect of the plaintiff having executed a release without reservation. As to co-tort feasors, it was formerly the law that the release of one joint tort feasor without reservation released all (Milks v. McIver, 264 N.Y. 267, 190 N.E. 487; Wellander v. Brooklyn Hosp., 12 Misc.2d 432, 174 N.Y.S.2d 107). However, effective September 1, 1972, the common law was changed so that instead of releasing all of the other tort feasors liable for the same injury the settlement now reduces a claim against other tort feasors only to the extent of the amount of the settlement (Gen.Oblig.Law § 15-108(a); see, Rock v. Reed-Prentice, 39 N.Y.2d 34, 382 N.Y.S.2d 720, 346 N.E.2d 520).

Even before the enactment of § 15-108(a) of the General Obligations Law, there was a distinction which remains today when the tort feasors are successive and independent of each other and not liable "for the same injury." In such case, it was and is held to be a question of fact as to the intent of the parties (Wille v. Maier, 256 N.Y. 465, 176 N.E. 841; Derby v. Prewitt, 12 N.Y.2d 100, 236 N.Y.S.2d 953, 187 N.E.2d 556; Dury v. Dunadee, 52 A.D.2d 206, 383 N.Y.S.2d 748, app. dism'd 40 N.Y.2d 845).

In Wille v. Maier, the plaintiff had been sued in a prior action in which she unsuccessfully asserted that a contract had been fraudulently induced by the defendant. The defendant was acting at that time as a representative of the corporation which brought the first suit and obtained judgment against plaintiff, who then paid $10,000 in settlement of the judgment and gave the corporation a general release. She then sued defendant, alleging that he undertook to act as her attorney and erroneously advised her. Although the action was brought in fraud rather than malpractice, the Court of Appeals held that the release to the corporation did not also release the lawyer because no relationship of joint tort feasors existed when the release was signed.

Similarly, the release executed by the plaintiff, Titsworth, running to Corso and Condor without reservation should not also release the defendant, Mondo. Although the claim against the defendant for legal malpractice refers to the same injuries, physical and economic, suffered from the Corso and Condor accident, the wrong claimed is separate and independent. The damages result from the claimed negligence of a lawyer rather than from the negligence of an automobile operator, notwithstanding such damages stem from the same physical injuries and financial loss.

Nevertheless, two recent decisions, one by the Appellate Division, Second Department and the other by a New York County Supreme Court, have reached different conclusions.

In Kerson Co., Inc. v. Shayne, Dachs, Weiss, Kolbrenner, Levy, et al., 59 A.D.2d 551, 397 N.Y.S.2d 142 the Second Department reversed a judgment against the defendants, plaintiff's former counsel, for legal malpractice and dismissed the complaint. The plaintiff had entered into a settlement agreement prior to bringing the malpractice action. The court held that the action based upon the alleged mistake of counsel prior to settlement could not be brought since the plaintiffs' agreement to the settlement terminated the litigation.

In New York County shortly thereafter, Justice Greenfield refused to follow the Second Department. In an action for legal malpractice, the plaintiff claimed that he was obliged to settle an action in Federal Court for commissions for $45,000 but that had it not been for the malpractice of the defendants' handling of his case he would have recovered $5,000,000. The defendants moved for summary judgment, arguing that the settlement in Federal Court barred the malpractice action. Justice Greenfield held that execution of the release and retention of the settlement proceeds constituted ratification of the settlement as to the third party but did not in and of itself preclude a malpractice claim. In so holding, Justice Greenfield acknowledged that he was disagreeing with Kerson v. Shayne, et al., observing:

"Where the termination is by settlement rather than by a dismissal or adverse judgment, malpractice by the attorney is more difficult to establish, but a cause of action can be made out if it is shown that assent by the client to the settlement was compelled because prior misfeasance or nonfeasance by the attorneys left no other recourse. . . . (T)he cause of action for legal malpractice must stand or fall on its own merits with no automatic waiver of a plaintiff's right to sue for malpractice...