| Mahler v Campagna |
| 2009 NY Slip Op 02570 [60 AD3d 1009] |
| March 31, 2009 |
| Appellate Division, Second Department |
| David J. Mahler, Appellant, v Thomas K. Campagna et al.,Respondents. |
—[*1] McManus, Collura & Richter, P.C., New York, N.Y. (Scott C. Tuttle of counsel), forrespondents.
In an action, inter alia, to recover the overpayment of legal fees and damages for legalmalpractice, the plaintiff appeals, as limited by his brief, from so much of an order of theSupreme Court, Nassau County (Feinman, J.), entered August 10, 2007, as, in effect, grantedthose branches of the defendants' motion which were pursuant to CPLR 3211 (a) (5) to dismissthe second, third, fourth, fifth, and sixth causes of action as barred by arbitration and award andby the doctrines of res judicata and collateral estoppel, and for summary judgment dismissingthose causes of action.
Ordered that the order is modified, on the law, (1) by deleting the provisions thereof grantingthose branches of the defendants' motion which were pursuant to CPLR 3211 (a) (5) to dismissthe third cause of action to recover damages for legal malpractice and for summary judgmentdismissing that cause of action and substituting therefor provisions denying those branches of themotion and (2) by deleting the provisions thereof granting those branches of the defendants'motion which were for summary judgment dismissing the second, fourth, fifth, and sixth causesof action and substituting therefor provisions denying those branches of the motion as academic;as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.
The plaintiff retained the defendant attorney Thomas K. Campagna on January 16, 2003, torepresent him in a matrimonial action. The matrimonial action was settled by stipulation datedApril 2, 2005. Subsequently, the plaintiff filed a grievance against Campagna with the GrievanceCommittee for the Tenth Judicial District, seeking, among other things, "fee arbitration." Anarbitration hearing was held and, in an arbitration award dated April 24, 2006, the arbitratorsdetermined that the amount in dispute was $34,500, and awarded the plaintiff a refund fromCampagna in the sum of $1,625. The plaintiff thereafter commenced this action on March 8,2007, [*2]against Campagna and his professional corporation,Thomas K. Campagna, P.C., to recover an alleged overpayment of legal fees, and to recoverdamages for breach of fiduciary duty, legal malpractice, breach of contract, fraud, and violationof Judiciary Law § 487.
The defendants moved, inter alia, pursuant to CPLR 3211 (a) (5) to dismiss the complaint asbarred by arbitration and award and by the doctrines of res judicata and collateral estoppel, andpursuant to CPLR 3211 (a) (7) to dismiss the second, fourth, fifth, and sixth causes of action forfailure to state a cause of action. The defendants simultaneously moved, pursuant to CPLR 3211(c), to convert the motion to dismiss the complaint into a motion for summary judgmentdismissing the complaint, if the court deemed conversion to be appropriate. In an order enteredAugust 10, 2007, the Supreme Court, in effect, granted those branches of the defendants' motionwhich were to dismiss the complaint pursuant to CPLR 3211 (a) (5) and for summary judgmentdismissing the complaint. We modify.
The doctrine of res judicata operates to preclude the reconsideration of claims actuallylitigated and resolved in a prior proceeding, as well as claims for different relief against the sameparty which arise out of the same factual grouping or transaction, and which should have orcould have been resolved in the prior proceeding (see Matter of Kafka v MeadowlarkGardens Owners, Inc., 34 AD3d 676, 677 [2006]; Luscher v Arrua, 21 AD3d 1005,1007 [2005]). The doctrine of collateral estoppel bars relitigation of an issue which hasnecessarily been decided in a prior action and is determinative of the issues disputed in thepresent action, provided that there was a full and fair opportunity to contest the decision nowalleged to be controlling (see Tydings v Greenfield, Stein & Senior, LLP, 11 NY3d 195,199 [2008]; Buechel v Bain, 97 NY2d 295, 303-304 [2001], cert denied 535 US1096 [2002]; York v Landa, 57 AD3d 980 [2008]). The party seeking the benefit of thedoctrine of collateral estoppel must establish that the identical issue was necessarily decided inthe prior action and is determinative in the present action (see Buechel v Bain, 97 NY2dat 304). Once the party invoking the doctrine discharges his or her burden in that regard, theparty to be estopped bears the burden of demonstrating the absence of a full and fair opportunityto contest the prior determination (id.).
The doctrines of res judicata and collateral estoppel apply to arbitration awards with thesame force and effect as they apply to judgments of a court (see QDR Consultants & Dev.Corp. v Colonia Ins. Co., 251 AD2d 641, 642 [1998]; Dimacopoulos v Consort Dev.Corp., 158 AD2d 658, 659 [1990]; Luppo v Waldbaum, Inc., 131 AD2d 443, 445[1987]).
The Supreme Court erred in granting those branches of the defendants' motion which were todismiss the third cause of action to recover damages for legal malpractice on the ground that itwas barred by arbitration and award, res judicata, and collateral estoppel, and awarding summaryjudgment to the defendants dismissing that cause of action. The defendants failed to sustain theirburden of demonstrating that all of the issues raised in the instant action which are or may bedeterminative thereof were necessarily decided in the arbitration proceeding, which, it isundisputed, was conducted pursuant to part 137 of the Rules of the Chief Administrator of theCourts (22 NYCRR 137.0-137.12; hereinafter part 137). Part 137, entitled "Fee DisputeResolution Program," sets forth the procedures for the resolution of fee disputes betweenattorneys and clients through arbitration and mediation (see 22 NYCRR 137.0) andapplies when, as here, an attorney's representation of a client commenced on or after January 1,2002 (see 22 NYCRR 137.1 [a]; Pickard v Tarnow, 18 Misc 3d 1102[A], 2007NY Slip Op 52377[U] [2007]). Under the program, an arbitrator "determine[s] thereasonableness of fees for professional services, including costs, taking into account all relevantfacts and circumstances" (22 NYCRR 137.0). However, part 137 expressly provides that it doesnot apply [*3]to "claims involving substantial legal questions,including professional malpractice or misconduct" (22 NYCRR 137.1 [b] [3]; see Lorin v501 Second St., 2 Misc 3d 646, 649 [2003]).
The allegations of the complaint, as amplified by the affidavit submitted by the plaintiff inhis opposing papers, do not relate solely to the reasonableness of the fees charged by thedefendants. The plaintiff also sets forth factual allegations of malpractice. Under part 137, theseallegations could not properly have been considered by the arbitrators (see 22 NYCRR137.1 [b] [3]).
Moreover, notwithstanding the defendants' failure to establish their entitlement to judgmentas a matter of law with respect to the legal malpractice cause of action, the plaintiffdemonstrated, in any event, that he lacked a full and fair opportunity to litigate all of the causesof action asserted in the complaint by presenting, in opposition to the motion, his own affidavitas well as the affirmation of the attorney who represented him at the arbitration proceeding. Boththe plaintiff and his former counsel stated that the arbitration panel heard only matters relating tofees, and specifically declined to hear any other issues, including issues of lawyer malpractice ormisconduct. Accordingly, the third cause of action was not subject to dismissal on grounds ofarbitration and award, res judicata, and collateral estoppel.
However, the defendants were entitled to dismissal of the remaining causes of action, albeiton a ground different than that articulated by the Supreme Court. As the defendants correctlyargue, the breach of fiduciary duty and breach of contract causes of action are duplicative of thelegal malpractice cause of action (see Shivers v Siegel, 11 AD3d 447 [2004]; Best vLaw Firm of Queller & Fisher, 278 AD2d 441, 442 [2000], cert denied sub nom. Best vSears, Roebuck & Co., 534 US 1080 [2002]), and the plaintiff failed to plead the fraud causeof action with the requisite particularity (see CPLR 3016 [b]). Finally, the cause ofaction alleging violation of Judiciary Law § 487 fails to state a cause of action because,even assuming that certain of the plaintiff's factual allegations could be construed as articulatingviolations of the statute, the statute applies only to wrongful conduct by an attorney in an actionthat is actually pending (see Tawil v Wasser, 21 AD3d 948, 949 [2005]; Henry vBrenner, 271 AD2d 647, 647-648 [2000]). Accordingly, the second, fourth, fifth, and sixthcauses of action to recover damages for breach of fiduciary duty, breach of contract, fraud, andviolation of Judiciary Law § 487, respectively, should have been dismissed for failure tostate a cause of action.
The plaintiff's remaining contention is not properly before this Court. Mastro, J.P.,Dickerson, Belen and Chambers, JJ., concur.