Trundle v. Garr Silpe, P.C.
| Decision Date | 18 December 2020 |
| Docket Number | Index No. 159437/2019 |
| Citation | 2020 NY Slip Op 34233 (U) |
| Parties | EDWARD R. TRUNDLE, Plaintiff v. GARR SILPE, P.C., Defendant |
| Court | New York Supreme Court |
DECISION AND ORDER
Plaintiff claims that defendant law firm's legal malpractice in an underlying divorce action damaged him in the amount of $3,000,000, plus interest, attorneys' fees, and costs. Defendant moves to dismiss the amended complaint pursuant to C.P.L.R. § 3211(a)(7).
The amended complaint alleges as follows. After plaintiff retained defendant in August 2014, it committed legal malpractice during its five years representing plaintiff by wholly failing to pursue his expressly identified goal of removing his wife as the trustee and administrator of the pension plan established by his corporation Trundle & Company, Inc. Defendant did not introduce relevant evidence in the divorce action against his wife, in particular by (1) excluding from his witness list a handwriting expert who would have testified about his wife's fraud and (2) failing to lay a foundation for the admission of stamps of plaintiff's signature that his wife used to misappropriate pension funds. Defendant unnecessarily issued fourteen subpoenas after the Note of Issue had been filed, inflating defendant's bills for its legal services to plaintiff, and causing $30,000 to be assessed against plaintiff. Defendant's further dishonest conduct included misrepresenting whether child support would be included in the final divorce settlement and failing to apply promised discounts to its bills to plaintiff. In sum, defendant's overall inaction and billing practices amounted to legal malpractice.
Upon defendant's motion to dismiss the amended complaint pursuant to C.P.L.R. § 3211(a)(7), defendant bears the burden to establish that the amended complaint "fails to state a viable cause of action." Connolly v. Long Island Power Auth., 30 N.Y.3d 719, 728 (2018). In evaluating defendant's motion, the court must accept plaintiff's allegations as true, liberally construe them, and draw all reasonable inferences in his favor. Id.; JF Capital Advisors, LLC v. Lightstone Group, LLC, 25 N.Y.3d 759, 764 (2015); Miglino v. Bally Total Fitness of Greater N.Y., Inc., 20 N.Y.3d 342, 351 (2013); M & E 73-75 LLC v. 57 Fusion LLC, 189 A.D.3d 1, 5 (1st Dep't 2020). The court will not give such consideration, however, to allegations that consist of only barelegal conclusions, Simkin v. Blank, 19 N.Y.3d 46, 52 (2012); M & E 73-75 LLC v. 57 Fusion LLC, 189 A.D.3d at 5; Doe v. Bloomberg L.P., 178 A.D.3d 44, 47 (1st Dep't 2019). Instead, the court accepts as true only plaintiff's factual allegations that set forth the elements of a legally cognizable claim and from them draws all reasonable inferences in his favor. Dismissal is warranted if the amended complaint fails to allege facts that fit within any cognizable legal theory. Faison v. Lewis, 25 N.Y.3d 220, 224 (2015); ABN AMRO Bank, N.V. v. MBIA Inc., 17 N.Y.3d 208, 227 (2011); Lawrence v. Graubard Miller, 11 N.Y.3d 588, 595 (2008); Nonnon v. City of New York, 9 N.Y.3d 825, 827 (2007).
To plead legal malpractice, plaintiff must allege that defendant's negligence proximately caused him actual damages. Leder v. Spiegel, 9 N.Y.3d 836, 837 (2007); Kaplan v. Conway & Conway, 173 A.D.3d 452, 452 (1st Dep't 2019); Brookwood Cos., Inc. v. Alston & Bird LLP, 146 A.D.3d 662, 666 (1st Dep't 2017); Excelsior Capitol LLC v. K&L Gates LLP, 138 A.D.3d 492, 492 (1st Dep't 2016). Specifically, plaintiff must show that defendant's failure to exercise the ordinary reasonable skill of a member of the legal profession adversely affected him in the divorce action. Darby & Darby v. VSI Intl., 95 N.Y.2d 308, 313 (2000); Genet v. Buzin, 159 A.D.3d 540, 540 (1st Dep't 2018); Brenner v. Reiss Eisenpress, LLP, 155 A.D.3d 437, 438 (1st Dep't 2017);O'Callaghan v. Brunelle, 84 A.D.3d 581, 582 (1st Dep't 2011). Plaintiff alleges the requisite proximate cause if he shows that he would not have sustained actual damages but for defendant's negligence. Waggoner v. Caruso, 14 N.Y.3d 874, 875 (2010); Courtney v. McDonald, 176 A.D.3d 645, 645 (1st Dep't 2019); Knox v. Aronson, Mayefsky & Sloan, LLP, 168 A.D.3d 70, 75 (1st Dep't 2018); Ladera Partners, LLC v. Goldberg, Scudieri & Lindenberg, P.C., 157 A.D.3d 467, 468 (1st Dep't 2018). Finally, plaintiff's damages must be actual economic losses. Kaplan v. Conway & Conway, 173 A.D.3d at 452-53; Freeman v. Brecher, 155 A.D.3d 453, 453-54 (1st. Dep't 2017); Estate of Feder v. Winne, Banta, Hetherington, Basralian & Kahn, P.C., 117 A.D.3d 541, 542 (1st Dep't 2014); Cohen v. Kachroo, 115 A.D.3d 512, 513 (1st Dep't 2014).
Plaintiff's identified primary goal was removing his wife as the trustee and administrator of his corporation's pension plan. Plaintiff alleges that defendant's lack of efforts to pursue this requested objective required him to pay a separate law firm additional attorneys' fees, totaling $150,000.
Plaintiff also alleges that, when his wife was not removed, she allowed the pension fund to become underfunded, requiring plaintiff to pay $300,000 in fines imposed by the Internal Revenue Service (IRS). According to plaintiff, defendantpromised to sue his wife for breach of her fiduciary duty, but failed ever to interpose such a claim. Had defendant made that claim, plaintiff alleges, he would have recovered the amount of the IRS fine.
Plaintiff further alleges that his wife, when not removed as the pension plan administrator, continued to misappropriate pension funds until 2017, paying $400,000 to her own business and $500,000 to repay a personal loan, and keeping an extra $500,000 for herself when closing the pension plan. Plaintiff alleges that defendant then failed to recover his 50% or more share of the remaining assets in the pension plan. Finally, plaintiff alleges that defendant unnecessarily conceded $205,000, the cash value of a life insurance policy, to his wife without consulting plaintiff.
In reply, defendant's attorney claims that defendant tried to remove plaintiff's wife as the trustee and administrator of the pension plan and performed a full accounting of the pension plan, pursuant to plaintiff's request. Reply Aff. of Mark K. Anesh ¶¶ 16-17. Defendant's attorney also maintains that plaintiff and his wife agreed to dissolve the pension plan. Id. ¶ 18. The court may not consider these allegations, however, even were they upon personal knowledge, in support of a motion to dismiss the amended complaint pursuant to C.P.L.R. § 3211(a)(7). Serao v. Bench-Serao, 149 A.D.3d 645, 646 (1st Dep't 2017);Calpo-Rivera v. Siroka, 144 A.D.3d 568, 568 (1st Dep't 2016); Asmar v. 20th & Seventh Assoc., LLC, 125 A.D.3d 563, 564 (1st Dep't 2015); City of New York v. VJHC Dev. Corp., 125 A.D.3d 425, 426 (1st Dep't 2015). Accepting plaintiff's allegations as true and drawing all reasonable inferences in his favor, as required upon defendant's motion pursuant to C.P.L.R. § 3211(a)(7), plaintiff shows how defendant's negligence adversely affected him in the divorce action and caused him actual financial damages.
Not all plaintiff's claimed damages, however, are attributable to defendant's negligence. First, the $150,000.00 paid to a separate law firm is not attributable to defendant's negligence because plaintiff would have paid an attorney to close the pension fund regardless whether the attorney was defendant or a new attorney, Brookwood Cos., Inc. v. Alston & Bird LLP, 146 A.D.3d at 666-67; Cohen v. Hack, 118 A.D.3d 460, 460 (1st Dep't 2014); Cohen v. Kachroo, 115 A.D.3d at 513, unless plaintiff shows that, due to defendant's conduct, he paid more fees to his new attorney than he would have paid to defendant. Exeter Law Group LLP v. Immortalana Inc., 158 A.D.3d 576, 577 (1st Dep't 2018); Macquarie Capital (USA) Inc. v. Morrison & Foerster LLP, 157 A.D.3d 456, 457 (1st Dep't 2018); Garnett v. Fox, Horan, & Camerini, LLP, 82 A.D.3d 435, 436 (1st Dep't 2011). Second, as plaintiff alleges that his wife began misappropriating funds in 2003, and he retained defendant for the divorce action in 2014,any of her misappropriations totalling the $400,000 and $500,000 alleged amounts before 2014 are not attributable to defendant. Knox v. Aronson, Mayefsky & Sloan, LLP, 168 A.D.3d at 75; Brenner v. Reiss Eisenpress, LLP, 155 A.D.3d at 438.
Plaintiff's damages of $300,000 from IRS fines, $500,000 kept by his wife when closing the pension plan, 50% or more of the remaining pension plan assets, and the $205,000 value of a life insurance policy, however, are attributable to defendant's negligence and thus survive defendant's motion. First, plaintiff sustains a legal malpractice claim by alleging that defendant's failure to file a claim against his wife for breach of her fiduciary duty eliminated his opportunity to recoup the $300,000 in fines. Liporace v. Neimark & Neimark, LLP, 162 A.D.3d 570, 570 (1st Dep't 2018); Trapp-White v. Fountain, 149 A.D.3d 466, 466 (1st Dep't 2017); Phoenix Erectors, LLC v. Fogarty, 90 A.D.3d 468, 469 (1st Dep't 2011); Garnett v. Fox, Horan, & Camerini, LLP, 82 A.D.3d 435, 436 (1st Dep't 2011). Plaintiff's further allegations that defendant failed to prevent his wife from misappropriating $500,000 when closing the pension plan and failed to pursue plaintiff's entitlement to 50% or more of the pension plan's remaining assets also sustain a legal malpractice claim. Trapp-White v. Fountain, 149 A.D.3d at 466; Facie Libre Assoc. I, L.L.C. v. Littman Krooks, L.L.P., 125 A.D.3d at 490; Russo v. Rozenholc, 130 A.D.3d 492, 497 (1st Dep't 2015).
Finally, plaintiff's allegations that defendant unilaterally and unnecessarily conceded $205,000 when negotiating the closure of the pension...
To continue reading
Request your trial