| Zayatz v Collins |
| 2008 NY Slip Op 01240 [48 AD3d 1287] |
| February 8, 2008 |
| Appellate Division, Fourth Department |
| Necole R. Zayatz, Appellant, v William B. Collins, Esq., et al.,Respondents, et al., Defendant. (Appeal No. 1.) |
—[*1] Harrington & Mahoney, Buffalo (James P. Harrington of counsel), fordefendants-respondents.
Appeal from an order of the Supreme Court, Erie County (Joseph R. Glownia, J.), enteredAugust 24, 2006. The order granted the motion of defendants William B. Collins, Esq. andCollins, Collins & Maxwell, L.L.P. for summary judgment dismissing the complaint againstthem.
It is hereby ordered that the order so appealed from is reversed on the law without costs, themotion is denied and the complaint against defendants William B. Collins, Esq. and Collins,Collins & Maxwell, L.L.P. is reinstated.
Memorandum: Plaintiff and defendant Jacob P. Myles, her former husband, commenced apersonal injury action prior to their divorce, seeking to recover damages for injuries sustained byMyles in a motor vehicle accident. They were represented in that action by defendants WilliamB. Collins, Esq. and Collins, Collins & Maxwell, L.L.P. (collectively, attorney defendants). Thepersonal injury action resulted in a settlement agreement pursuant to which an unallocated"up-front cash payment" was to be made payable to Myles, plaintiff and the attorney defendants,and Myles and plaintiff were to receive future periodic payments that were specifically allocatedbetween them. Myles thereafter commenced an action for divorce against plaintiff, and a defaultjudgment was entered based on plaintiff's failure to appear therein. In addition to dissolving themarriage, the judgment also distributed the parties' property and provided, inter alia, that Mylesand plaintiff would each retain as their separate property their respective future periodicpayments from the settlement of the personal injury action. Neither the judgment nor theReferee's report upon which it was based indicated whether the up-front cash payments from thesettlement were allocated between Myles and plaintiff, but the judgment did provide that thebank account of Myles, containing money that he had received from the settlement of thepersonal injury action, was to remain his separate property. We affirmed the order denyingplaintiff's motion to vacate the default judgment of divorce (Myles v Zayatz, 23 AD3d 1162 [2005]).[*2]
Plaintiff then commenced this action seeking damagesresulting from, inter alia, Myles' alleged forgery of the drafts of the up-front cash payments fromthe settlement of the personal injury action and the attorney defendants' alleged malpractice inallowing those payments to be distributed solely to Myles. According to plaintiff, she neverexecuted the up-front cash payment drafts or authorized anyone to execute them on her behalf,nor did she receive any share of the up-front cash payments.
The attorney defendants moved for summary judgment dismissing the complaint againstthem on the grounds that the action is barred by the doctrine of collateral estoppel and istime-barred. With respect to the merits of the action, the attorney defendants contended that thesettlement agreement in the personal injury action established that plaintiff was not entitled toany of the up-front cash payments. Myles moved for summary judgment dismissing thecomplaint against him on the grounds that the action is barred by the doctrines of res judicata andcollateral estoppel. In appeal No. 1, plaintiff appeals from an order granting the motion of theattorney defendants and, in appeal No. 2, she appeals from an order granting the motion ofMyles.Addressing first the order in appeal No. 2, we conclude that Supreme Court properly grantedthe motion of Myles based on the doctrine of res judicata. "Under res judicata, or claimpreclusion, a valid final judgment bars future actions between the same parties on the same causeof action" (Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 347 [1999]). "As ageneral rule, 'once a claim is brought to a final conclusion, all other claims arising out of thesame transaction or series of transactions are barred, even if based upon different theories or ifseeking a different remedy' " (id., quoting O'Brien v City of Syracuse, 54 NY2d353, 357 [1981]). Thus, res judicata applies "to an order or judgment taken by default which hasnot been vacated, as well as to issues which were or could have been raised in the prior [action]"(Matter of Eagle Ins. Co. v Facey, 272 AD2d 399, 400 [2000]). Because plaintiff couldhave challenged the allocation, or lack thereof, of the up-front cash payments in the context ofthe divorce action (see Domestic Relations Law § 234; Boronow vBoronow, 71 NY2d 284, 289-290 [1988]; see also Richmond v Richmond, 144AD2d 549, 551 [1988]; DeMarco v DeMarco, 143 AD2d 328, 331 [1988]), the doctrineof res judicata bars her instant action against Myles (see generally Boronow, 71 NY2d at290).
With respect to the order in appeal No. 1, however, we conclude that the court erred ingranting the motion of the attorney defendants. With respect to the doctrine of collateral estoppel,a party is precluded from relitigating an issue that has already been decided against that party(see Matter of Juan C. v Cortines, 89 NY2d 659, 667 [1997]). A party seeking to invokethe doctrine of collateral estoppel "must prove, [inter alia], that the identical issue wasnecessarily decided in the prior action and is decisive in the present action" (D'Arata v NewYork Cent. Mut. Fire Ins. Co., 76 NY2d 659, 664 [1990]). Thus, while res judicata barsclaims that were not actually decided in the prior action if they could have been decided in thataction, collateral estoppel bars litigation of an issue only if that issue was "actually litigated,squarely addressed and specifically decided" in the prior action (Ross v Medical Liab. Mut.Ins. Co., 75 NY2d 825, 826 [1990]; see D'Arata, 76 NY2d at 666-667; Matter ofHalyalkar v Board of Regents of State of N.Y., 72 NY2d 261, 268 [1988]). Although thedivorce judgment distributed Myles' bank account solely to Myles and that account containedproceeds from the up-front cash payments, the divorce judgment did not address whether thoseproceeds were properly allocated to Myles in the first instance. The attorney defendants thusfailed to meet their burden of establishing that the identical issue, decisive in this action, wasnecessarily decided in the divorce action.
We further conclude that the attorney defendants failed to meet their initial burden ofestablishing that the action is time-barred (see generally Zuckerman v City of New York,49 NY2d 557, 562 [1980]), inasmuch as they failed to establish the date on which the up-frontcash [*3]payment drafts were disbursed or executed. "[A]n actionfor malpractice accrues at the date of the malpractice, i.e., the date when the injury occurs," andhere the attorney defendants failed to establish the date on which the alleged injury occurred(Britt v Legal Aid Socy., 95 NY2d 443, 446 [2000]; see generally Glamm vAllen, 57 NY2d 87, 93 [1982]). Finally, the attorney defendants failed to meet their burdenof establishing their entitlement to judgment as a matter of law on the merits (see generallyZuckerman, 49 NY2d at 562). Contrary to the contention of the attorney defendants, thetranscripts concerning the settlement of the personal injury action do not indicate that theup-front cash payments were to be allocated solely to Myles and, indeed, as previously noted, thesettlement agreement itself provided for the up-front cash payment to be made payable to Myles,plaintiff and the attorney defendants. We therefore reverse the order in appeal No. 1, deny themotion of the attorney defendants and reinstate the complaint against them.
All concur except Gorski and Pine, JJ., who dissent and vote to affirm in the followingmemorandum.
Gorski and Pine, JJ. (dissenting). We respectfully dissent and would affirm because, in ourview, Supreme Court properly granted the motion of defendants William B. Collins, Esq. andCollins, Collins & Maxwell, L.L.P. (collectively, attorney defendants) for summary judgmentdismissing the complaint against them. We cannot agree with the majority that the doctrine ofcollateral estoppel does not apply to bar plaintiff's action against the attorney defendants. Theissue whether plaintiff was entitled to a portion of the up-front cash payment was "actuallylitigated, squarely addressed and specifically decided" in the prior divorce action betweenplaintiff and defendant Jacob P. Myles (Ross v Medical Liab. Mut. Ins. Co., 75 NY2d825, 826 [1990]; see D'Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659,665-667 [1990]; Matter of Halyalkar v Board of Regents of State of N.Y., 72 NY2d 261,268 [1988]). Indeed, plaintiff conceded in her complaint that, after the attorney defendants paidthemselves their legal fee, they "paid the entire balance of the settlement drafts . . .to Jacob P. Myles." It is undisputed that the judgment of divorce distributed Myles' brokerageaccount solely to Myles at the time of the divorce and that the proceeds in that brokerage accountcontained the funds from the disputed up-front cash payment, and the record establishes that thecourt in the divorce action awarded to Myles as his separate property all of the property in hisname at the time of the divorce. Although plaintiff alleges that the attorney defendants committedlegal malpractice, the gravamen of her complaint is merely that she is entitled to a portion of theup-front cash payment awarded to Myles in the divorce action. In our view, the second prong ofthe doctrine of collateral estoppel thus also is met, inasmuch as plaintiff "had a full and fairopportunity" in the divorce action to contest the issue of her entitlement to a portion of theup-front cash payment (D'Arata, 76 NY2d at 664; see Melnitzky v HSBC Bank USA, 33 AD3d 482, 482-483 [2006]).Present—Scudder, P.J., Hurlbutt, Gorski, Centra and Pine, JJ.