| Duane Morris LLP v Astor Holdings Inc. |
| 2009 NY Slip Op 02544 [61 AD3d 418] |
| April 2, 2009 |
| Appellate Division, First Department |
| Duane Morris LLP, Respondent-Appellant, v AstorHoldings Inc. et al., Appellants-Respondents. (And a Third-PartyAction.) |
—[*1] Foley and Lardner LLP, New York (Todd C. Norbitz of counsel), forrespondent-appellant.
Order, Supreme Court, New York County (Joan A. Madden, J.), entered on or about October25, 2007, which, to the extent appealed from as limited by the briefs, in this action to recoverlegal fees, granted plaintiff's motion for summary judgment on its account stated cause of actionagainst defendant Astor Holdings Inc. (Astor) and dismissing part of defendants' legalmalpractice counterclaim, and denied plaintiff's motion for summary judgment dismissingdefendant Robot Wars LLC's malpractice counterclaim, unanimously modified, on the law, togrant plaintiff's motion for summary judgment dismissing Robot Wars' malpractice counterclaim,and otherwise affirmed, with costs in favor of plaintiff. Order, same court and Justice, enteredAugust 19, 2008, which, inter alia, granted plaintiff's motion for reargument and, uponreargument, granted plaintiff summary judgment on its account stated claim against Robot Wars,unanimously affirmed, with costs in favor of plaintiff.
The lack of discovery in this action does not require denial of plaintiff's summary judgmentmotion as premature (see e.g. VolutoVentures, LLC v Jenkens & Gilchrist Parker Chapin LLP, 44 AD3d 557 [2007]).Defendants failed to show that facts essential to justify opposition to the motion were withinplaintiff's exclusive knowledge or that discovery might lead to facts relevant to the issues(see id.; Bailey v New York City Tr. Auth., 270 AD2d 156, 157 [2000]).
The record shows that in December 2003, each defendant signed an agreement with plaintiff,acknowledging that it owed plaintiff a certain sum of money for their legal representation andagreeing to pay it within a certain amount of time. Although defendants contend that there is atriable issue of fact as to whether these agreements were signed under duress, "[r]epudiation ofan agreement on the ground that it was procured by duress requires a showing of both (1)a wrongful threat, and (2) the preclusion of the exercise of free will" (Fred Ehrlich, P.C. vTullo, 274 AD2d 303, 304 [2000]). Here, defendants have admitted that the December 2003agreements resulted from significant negotiations with plaintiff during which they wererepresented by separate counsel, and even if plaintiff threatened to cease representing defendantsunless it were paid, that is not a wrongful threat (id.). There is no need for discovery[*2]as to whether the December 2003 agreements areenforceable, as the existence of a wrongful threat and the overbearing of defendants' free will areboth matters within defendants' knowledge.
The affidavit of defendants' principal, which claimed that he orally protested plaintiff'sservices, does not serve to defeat plaintiff's motion. A client's "self-serving, bald allegations oforal protests [a]re insufficient to raise a triable issue of fact as to the existence of an accountstated" (Darby & Darby v VSI Intl., 95 NY2d 308, 315 [2000]), and defendants do notneed discovery as to whether they ever protested plaintiff's bills, since that is also a matter withintheir own knowledge.
Defendants' contention that the December 2003 agreements cannot form the basis of anaccount stated because they are not itemized billing statements, is raised for the first time in theirreply brief and is not entitled to consideration (see e.g. Meade v Rock-McGraw, Inc.,307 AD2d 156, 159 [2003]). In any event, plaintiff's account stated claims are not based solelyon the December 2003 agreements, but also on the detailed billing statements dated from January2004 through August 2004.
The part of defendants' malpractice counterclaim that dealt with the action against EdwardRoski III was properly dismissed. "[A] legal malpractice action is unlikely to succeed when theattorney erred because an issue of law was unsettled or debatable" (Darby, 95 NY2d at315 [internal quotation marks and citation omitted]). When the Southern District of New Yorkfound that some of Astor's claims in the Roski action were barred, it noted that "there appears tobe no federal authority directly on point" (Astor Holdings, Inc. v Roski, 325 F Supp 2d251, 262 [SD NY 2003]), and relied on a California state case that was decided in 2002 (seeid.), which was after the Roski action was filed. The e-mails of defendants' principal,summarizing the results of his consultations with lawyers from firms other than plaintiff, showthat the issue of whether Astor had to bring certain claims in Bankruptcy Court (as opposed tothe Southern District of New York) was unsettled, and defendants' attempt to distinguishgood/bad faith from preemption, is not availing. The basis for the Southern District's finding ofpreemption was that the Bankruptcy Court had exclusive jurisdiction to determine whether adebtor had filed for bankruptcy in bad faith (id. at 262-263).
Regarding defendants' argument that plaintiff was not forthright about the damages thatcould be recovered in the Roski action, this claim was not pleaded in either the original oramended counterclaims and should not be considered as a basis for defeating summary judgment(see e.g. People v Grasso, 54 AD3d180, 212-213 [2008]). In any event, the documentary evidence contradicts the claim.
Robot Wars' malpractice counterclaim should have been dismissed as time-barred. "Anaction to recover damages arising from an attorney's malpractice must be commenced withinthree years from accrual (see CPLR 214 [6])" (McCoy v Feinman, 99 NY2d 295,301 [2002]). The amended counterclaims allege that plaintiff's malpractice in the action thatRobot Wars filed against Marc Thorpe in April 2001 occurred between February and May 2001.However, Robot Wars did not assert its malpractice counterclaim until July 2006. Thecontinuous representation doctrine does not save Robot Wars' counterclaim about the Thorpeaction on the basis that plaintiff represented Astor in the Roski action until July 2004. "[I]n thecontext of a legal malpractice action, the continuous representation doctrine tolls the Statute ofLimitations only where the continuing representation pertains specifically to the matter in whichthe attorney committed the alleged malpractice" (Shumsky v Eisenstein, 96 NY2d 164,168 [2001]). [*3]Plaintiff's representation of Robot Wars in theThorpe action ceased in February 2002, more than three years before Robot Wars asserted itsmalpractice counterclaim. Concur—Mazzarelli, J.P., Friedman, Moskowitz and Acosta, JJ.