| Shields v Carbone |
| 2010 NY Slip Op 08661 [78 AD3d 1440] |
| November 24, 2010 |
| Appellate Division, Third Department |
| Beverly Shields, as Delaware County Treasurer, Respondent, v RichardM. Carbone et al., Appellants, and O'Connell and Aronowitz, P.C.,Respondent. |
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McCarthy, J. Appeal from an order of the Supreme Court (Fitzgerald, J.), entered August 24,2009 in Delaware County, which, among other things, granted plaintiff's motion to dismiss thecounterclaims of defendants Richard M. Carbone and Sherry Kehl.
Defendant Richard M. Carbone was arrested and charged with criminal possession of a controlledsubstance in the first degree and criminal possession of marihuana in the second degree. To meet his$50,000 bail, he posted $18,500 by credit card and his girlfriend, defendant Sherry Kehl, paid $3,000in cash and put $28,500 on her credit card. This money was given to plaintiff in her official capacity ascounty treasurer. Carbone chose to have defendant O'Connell and Aronowitz, P.C. (hereinafter O&A)represent him and executed a written retainer agreement that provided for a $17,000 minimum fee tobe paid from the bail proceeds at the time of disposition of the criminal matter. Carbone gave O&A theoriginal bail receipt for his $18,500, but did not endorse the receipt in favor of O&A.
O&A secured a favorable plea bargain for Carbone, which he accepted. Following the plea, butprior to sentencing, O&A received notification that Carbone had retained different counsel, who thenunsuccessfully sought to withdraw his guilty plea. After the plea, but before County Court (Becker, J.)issued an order exonerating bail, Kehl—individually and on behalf of Carbone—andO&A each attempted to have the bail funds remitted. County Court issued two orders exonerating thebail posted by Kehl and Carbone but, instead of stating who should receive the money, the ordersdirected plaintiff to remit payment to the person she determined was entitled to it, less her lawful fees.Within two weeks, plaintiff commenced this interpleader action against Carbone, Kehl and O&Aseeking a determination regarding who should receive the bail proceeds. O&A and Carbone broughtcross claims against each other. Kehl advanced cross claims against O&A. Carbone and Kehl alsobrought counterclaims against plaintiff.
Kehl moved for dismissal of the complaint against her, and for summary judgment on hercounterclaim against plaintiff and her cross claim against O&A. Plaintiff cross-moved for dismissal ofKehl's and Carbone's counterclaims and for an order allowing deposit of the bail funds with SupremeCourt. O&A cross-moved for dismissal of Kehl's cross claims and for summary judgment againstCarbone. Carbone cross-moved to, among other things, compel disclosure from O&A.
Supreme Court partially granted Kehl's motion for summary judgment and directed that the bailmoney she posted be released to her, less plaintiff's statutory fees. Plaintiff prevailed on her crossmotion for dismissal of Kehl's and Carbone's counterclaims. The court granted O&A's motion forsummary judgment against Carbone and directed plaintiff to release to O&A the bail money posted byCarbone, less plaintiff's statutory fees, with O&A to keep the $17,000 legal fee plus disbursements andforward the balance to Carbone. The court did not address the remaining motions. Kehl and Carboneappeal.
Supreme Court correctly dismissed Kehl's and Carbone's counterclaims. Kehl and Carbonealleged that plaintiff violated their US Constitution 4th Amendment rights by unreasonably withholdingtheir money without authority, thus giving rise to causes of action pursuant to 42 USC § 1983.The 4th Amendment prohibits unreasonable searches and seizures of property; it does not addressunreasonably withholding property once a citizen voluntarily gives that property to the government.Kehl and Carbone voluntarily chose to give money to plaintiff for Carbone's bail. As plaintiff did notseize their money, the 4th Amendment was not implicated. Accordingly, the court properly dismissedthe counterclaims.
Kehl was not entitled to summary judgment on her cross claims against O&A.[FN1]In those cross claims, Kehl alleged fraud, mail fraud, prima facie tort and fraud upon the court and aparty under Judiciary Law § 487. These claims were based upon O&A's knowledge that it hadno claim to the bail money posted by Kehl, its letters sent to plaintiff and others threatening civil [*2]action and criminal prosecution to anyone who attempted to receive thebail money, plaintiff's alleged reliance on these letters in refusing to release the bail money to anyone,and Kehl's damages from not receiving her money in a timely fashion. O&A's letters did not addressbail money posted by Kehl separately from that posted by Carbone, but instead asserted a generalclaim to bail money to be exonerated in Carbone's criminal case. While Kehl sufficiently alleged fraudby stating that O&A knowingly misrepresented a material fact, that plaintiff relied on that fact towithhold the bail money and that Kehl was thereby damaged (see Klafehn v Morrison, 75 AD3d 808, 810 [2010]), she did notprovide proof of these allegations to support summary judgment in her favor. Proof of O&A mailing theletters was insufficient to prove mail fraud, as questions of fact exist concerning whether O&A mailedthem in furtherance of a fraudulent scheme (see Besicorp, Ltd. v Kahn, 290 AD2d 147, 152[2002], lv denied 98 NY2d 601 [2002]). Questions regarding O&A's intent similarly requiredenial of summary judgment on the Judiciary Law § 487 cause of action. On the other hand, asthe record contains evidence that O&A sent its letters in an effort to obtain payment of its legal fees,O&A was entitled to summary judgment dismissing the prima facie tort cross claim becausemalevolence was not O&A's sole motive (seeWhite v Ivy, 63 AD3d 1236, 1239 [2009]).[FN2]
The same results are required for Carbone's nearly identical cross claims against O&A.Additionally, O&A was entitled to dismissal of Carbone's legal malpractice cross claim becauseCarbone failed to allege his actual innocence of the criminal offense underlying the matter in which hewas represented by O&A (see Carmel v Lunney, 70 NY2d 169, 173 [1987]). Carbone hasappealed his criminal conviction but, at this point, his undisturbed determination of guilt precludes anyrecovery for negligent representation (see id.; Matter of Swain v County of Albany,268 AD2d 747, 748-749 [2000], lv denied 94 NY2d 764 [2000]).
Supreme Court erred in ordering plaintiff to release bail proceeds directly to O&A. By statute,when bail is exonerated, it "shall . . . be refunded to the person who originally depositedsuch money," less statutory fees (General Municipal Law § 99-m [1]; see Balter v County ofWyoming, 70 AD2d 1051 [1979]). While a person who posts bail can assign the right to receivethe bail proceeds, O&A did not provide proof of a perfected transaction between Carbone and O&Athrough which Carbone intended to vest in O&A a present right to his bail proceeds (cf. Zeman v Falconer Elecs., Inc., 55 AD3d1240, 1241 [2008]; Mele v Travers, 293 AD2d 950, 951 [2002]). The retaineragreement provides that Carbone "agrees to sign the cash bail over to" O&A and Carbone did giveO&A the original bail receipt, but there is no written assignment and Carbone did not endorse the bailreceipt over to O&A. Without proof of an assignment, the court should have directed plaintiff to releasethe bail proceeds to Carbone, the original depositor of those funds (compare Herman v State ofNew York, 126 Misc 2d 1019, 1020-1022 [1984]).
Supreme Court did not need to address Carbone's cross motion to compel disclosure. O&Across-moved for summary judgment only on its breach of contract cross claim against Carbone, and thedisclosure at issue dealt with its quantum meruit claim. Disclosure was stayed pending a determinationof the dispositive motions (see CPLR 3214 [b]), and the demanded disclosure was irrelevantto those motions. Thus, Carbone was not entitled to have its motion to [*3]compel determined prior to the court issuing the order that is on appeal(see CPLR 3212 [f]).
Supreme Court should not have granted O&A's cross motion for summary judgment againstCarbone on its breach of contract cause of action. We disagree with Carbone's arguments that theretainer agreement is invalid or unenforceable. The agreement does not contain an illegal contingencyfee or nonrefundable retainer, but instead includes a minimum fee, which is allowed by law (seeMatter of Cooperman, 83 NY2d 465, 476 [1994]; Rules of Professional Conduct [22 NYCRR1200.0] rule 1.5 [d] [1], [4]). Pursuant to the agreement, that fee is "to be paid at the time of thedisposition of the case" if the firm obtained a "disposition or resolution." The agreement also containsinformation concerning hourly rates, which would apply if the firm was not involved in obtaining adisposition or resolution (such as if Carbone discharged O&A prior to a disposition). Here, O&Arepresented Carbone through the entry of a guilty plea to one count of the indictment in exchange for anegotiated sentence. Carbone discharged O&A after the plea, however, and retained new counselprior to sentencing. The new counsel moved to withdraw the plea, then represented Carbone atsentencing. The phrase "disposition or resolution" is ambiguous, as it could refer to the guilty plea, whichconstitutes a conviction (see CPL 1.20 [13]), or the sentencing, which results in a judgment ofconviction (see CPL 1.20 [15]). This ambiguity creates a question of fact concerning whetherO&A obtained a "disposition or resolution" of Carbone's criminal case so as to entitle it to the minimumfee, or whether Carbone discharged the firm prior to a disposition or resolution such that O&A canonly recover a fee on an hourly basis. Thus, further proceedings are necessary on O&A's breach ofcontract cause of action.
We have reviewed the parties' remaining arguments and find them to be without merit.
Rose, J.P., Lahtinen, Stein and Garry, JJ., concur. Ordered that the order is modified, on the law,without costs, by reversing so much thereof as (1) denied the cross motion of defendant O'Connell andAronowitz, P.C. for dismissal of (a) defendant Sherry Kehl's cross claim against it for prima facie tortand (b) defendant Richard M. Carbone's cross claims against it for prima facie tort and legalmalpractice, (2) directed plaintiff to release bail proceeds paid by Carbone to O'Connell andAronowitz, and (3) granted the cross motion of O'Connell and Aronowitz for summary judgment on itsbreach of contract cross claim against Carbone; summary judgment awarded to O'Connell andAronowitz dismissing the prima facie tort and legal malpractice cross claims of Kehl and/or Carboneagainst it, and direct plaintiff to release bail proceeds to Carbone; and, as so modified, affirmed.
Footnote 1: Supreme Court did not specificallyrule on Kehl's motion for summary judgment on her cross claims or O&A's cross motion for dismissalof those cross claims. The court's failure to address those motions is deemed a denial (see Dickson v Slezak, 73 AD3d 1249,1251 [2010]).
Footnote 2: Although O&A did not appeal, thisCourt may search the record and grant summary judgment in favor of a nonappealing party(see CPLR 3212 [b]; PeterScalamandre & Sons, Inc. v State of New York, 65 AD3d 774, 777 [2009]).