| Steven L. Levitt & Assoc., P.C. v Balkin |
| 2008 NY Slip Op 06640 [54 AD3d 403] |
| August 19, 2008 |
| Appellate Division, Second Department |
| Steven L. Levitt & Associates, P.C., Plaintiff and CounterclaimDefendant-Respondent, v Ronald Balkin et al., Defendants and CounterclaimPlaintiffs-Appellants. Steven L. Levitt, Additional CounterclaimDefendant-Respondent. |
—[*1] L'Abbate, Balkan, Colavita & Contini, LLP, Garden City, N.Y. (Marie Ann Hoenings andLouis J. DelSignore, Jr., of counsel), for respondents.
In an action, inter alia, to recover damages for breach of contract for the payment of legalfees, the defendants and counterclaim plaintiffs appeal from an order of the Supreme Court,Nassau County (Diamond, J.) entered February 22, 2007, which granted the motion of theplaintiff and counterclaim defendant and the additional counterclaim defendant for summaryjudgment dismissing the counterclaims alleging legal malpractice, denied their cross motionpursuant to CPLR 3126, inter alia, to strike the complaint for the plaintiff's failure to comply withdiscovery demands, and directed the plaintiff to file a note of issue.
Ordered that the order is modified, on the law, (1) by deleting the provision thereof directingthe plaintiff to file a note of issue, and (2) by deleting the provision thereof granting the motionof the plaintiff and counterclaim defendant and the additional counterclaim defendant forsummary judgment dismissing the counterclaims alleging legal malpractice and substitutingtherefor a provision denying the motion; as so modified, the order is affirmed, with costs to theappellants; and it is further,
Ordered that the time for completion of discovery is extended until 90 days after the [*2]service upon the respondents of a copy of this decision and order.
The defendant Ronald A. Balkin (hereinafter Ronald) was the plaintiff in a prior matrimonialaction against Karen Balkin, his former wife (hereinafter Karen). Ronald was also the plaintiff,along with the defendant Dr. Ronald A. Balkin, M.D., P.C. (hereinafter together the appellants),in a related civil action against Karen and other parties (hereinafter the related civil action). Thematrimonial action and the related civil action were joined for trial and subsequently settledtogether by an oral stipulation read into the record in open court (see Balkin v Balkin, 43 AD3d 967[2007]).
The plaintiff in the instant matter is the law firm that represented the appellants in the relatedcivil action. The additional counterclaim defendant, Steven L. Levitt, is the plaintiff's principal.The plaintiff commenced the instant action, inter alia, to recover damages for the appellants'alleged breach of contract in failing to pay the legal fees incurred in litigating the related civilaction.
The Supreme Court should have denied that branch of the motion of the plaintiff andcounterclaim defendant and the additional counterclaim defendant (hereinafter together therespondents) which was for summary judgment dismissing the appellants' first counterclaimalleging legal malpractice, based upon allegations that the respondents misrepresented the scopeof the oral stipulation of settlement in the related civil action, and that the settlement of therelated civil action was not knowingly and voluntarily made. The respondents made a prima facieshowing of entitlement to judgment as a matter of law by submitting evidentiary proof, in theform of the transcript of the aforementioned oral stipulation (see Pacella v Whiteman Osterman & Hanna, 14 AD3d 545 [2005];Malarkey v Piel, 7 AD3d 681[2004]; Laruccia v Forchelli, Curto, Schwartz, Mineo, Carlino & Cohn, 295 AD2d 321[2002]). In response, the appellants raised a triable issue of fact as to whether or not they in factvoluntarily and knowingly entered into the terms of the stipulation, specifically with respect toRonald's receipt of a credit in the sum of only $500,000, rather than in the sum of $937,000, fromKaren's share of her equitable distribution award. The appellants raised a triable issue of fact byshowing that Ronald, in response to a question posed by the court during the proceeding in whichthe stipulation was placed on the record, changed his response from "no" to "yes," when asked bythe court if he understood that it would "not entertain any setting aside of the [settlement]without a showing of extreme circumstances." Ronald explained, in an affidavit, that he changedhis answer at the explicit instruction of an associate of the plaintiff law firm who was appearing on his behalf.This change in his answer was allegedly based upon statements in the record that the settlementof the related civil action would "be effective as of the date of execution of the documents," andnot the date of the court appearance. Ronald averred that he understood that "[t]he formalstipulation of settlement" would reflect his attorney's representation to him that the misstated sumof $500,000 was to be corrected to $937,000, that the correction would be worked out when thestipulation was put on paper, and that "[i]t would all be 'fixed' later."
Additionally, Ronald averred in his affidavit that on the evening prior to the settlementproceeding, i.e., on June 6, 2005, the respondents had assured him that he would receive a creditagainst Karen's equitable distribution award of $937,000. This contention was supported with anaffidavit from a Mr. Racanello, a friend of Ronald's, to the effect that he was present in court onJune 7, 2005, during a discussion between Ronald and the respondents. According to Racanello,at that time, they "told [Ronald] that his claims against [Karen] were to be settled for$937,000.00."
The Supreme Court also erred in granting that branch of the respondents' motion which wasfor summary judgment dismissing the appellants' second counterclaim. That counterclaim alleged[*3]that the plaintiff and its principal, the counterclaim defendantSteven L. Levitt, made several mistakes while representing the appellants in the related civilaction, including a failure to conduct necessary discovery, a failure to correct a forensicaccountant's report, and a failure to properly prepare for trial. In support of that branch of themotion, the respondents' sole evidentiary proof was the transcript of the aforementioned oralsettlement, and they relied only on the existence of the settlement itself. This proof wasinsufficient to make a prima facie showing of entitlement to judgment as a matter of law inconnection with the second counterclaim. The settlement of an underlying action does not,without more, preclude a subsequent action for legal malpractice if the settlement was effectivelycompelled by the mistakes of counsel (cf. Katz v Herzfeld & Rubin, P.C., 48 AD3d 640 [2008]; Tortura v Sullivan Papain Block McGrath& Cannavo, P.C., 21 AD3d 1082, 1083 [2005]). Since the respondents failed to makethe required prima facie showing, this branch of the motion should have been denied regardlessof the sufficiency of the opposing papers (see Winegrad v New York Univ. Med. Ctr., 64NY2d 851, 853 [1985]).
Contrary to the appellants' contention, there was no showing that the respondents willfully orcontumaciously failed to comply with the appellants' requests for disclosure so as to warrant thestriking of the complaint (see CPLR 3126; Conciatori v Port Auth. of N.Y. & N.J., 46 AD3d 501 [2007]; Sau Ting Cheng v Prime Design Realty,Inc., 44 AD3d 644 [2007]; Resnick v Schwarzkopf, 41 AD3d 573 [2007]). However, theSupreme Court erred in directing the plaintiff to file a note of issue when there had not yet beenany discovery actually conducted in this matter.
In light of our determination, we need not reach the parties' remaining contentions. Fisher,J.P., Ritter, Florio and Carni, JJ., concur.
[As amended by an unreported motion dated Jan. 21, 2010, see 2010 NY Slip Op 61688(U).]