| Giano v Ioannou |
| 2010 NY Slip Op 08064 [78 AD3d 768] |
| November 9, 2010 |
| Appellate Division, Second Department |
| Steve Giano, Esq., Respondent, v John Ioannou, Esq.,Appellant. |
—[*1] Joseph P. Ferri, Garden City, N.Y. (Louis A. Badolato of counsel), for respondent.
In an action, inter alia, to recover legal fees and to recover treble damages for violation ofJudiciary Law § 487, the defendant appeals (1), as limited by his brief, from so much of anorder of the Supreme Court, Nassau County (O'Connell, J.), entered December 7, 2007, asgranted that branch of the plaintiff's motion which was pursuant to CPLR 3124 to compeldisclosure to the extent of, in effect, conditionally striking his answer unless he providedspecified disclosure by a date certain, (2) from an order of the same court (Murphy, J.), enteredOctober 16, 2008, which granted the plaintiff's motion, in effect, to strike the answer and to setthe matter down for an inquest based upon his failure to comply with the order entered December7, 2007, (3) from a judgment of the same court (Cozzens, Jr., J.), entered March 24, 2009, which,upon a decision of the same court (Cozzens, Jr., J.), dated December 4, 2008, made after aninquest, finding that the plaintiff sustained damages in the principal sum of $197,054.22(representing $158,708.22 in legal fees and $38,346 in treble damages for fraudulentdisbursements), is in favor of the plaintiff and against him in the principal sum of $197,054.22,and (4) from an order of the same court (Cozzens, Jr., J.), dated May 4, 2009, which, in effect,denied his motion, in effect, pursuant to CPLR 2221 (a) to modify the order dated December 4,2008, on the ground that the plaintiff was only entitled to 50% of the $158,708.22 in legal fees.
Ordered that the appeals from the orders entered December 7, 2007, and October 16, 2008,are dismissed; and it is further,
Ordered that the judgment is reversed, on the law, the cause of action pursuant to JudiciaryLaw § 487 is dismissed, and the matter is remitted to the Supreme Court, Nassau County,for entry of an amended judgment in accordance herewith; and it is further,
Ordered that the order dated May 4, 2009, is affirmed; and it is further,[*2]
Ordered that one bill of costs is awarded to the plaintiff.
The appeals from the orders entered December 7, 2007, and October 16, 2008, respectively,must be dismissed because the right of direct appeal therefrom terminated with the entry ofjudgment in the action (see Matter of Aho, 39 NY2d 241, 248 [1976]). The issues raisedon the appeals from those orders are brought up for review and have been considered on theappeal from the judgment (see CPLR 5501 [a] [1]).
The plaintiff and defendant, both of whom are attorneys, entered into an agreement wherebythe plaintiff agreed to refer cases to the defendant who would "process [them] to completion" inexchange for 50% of the fee. The plaintiff became dissatisfied with the defendant's handling ofthe cases referred to him and brought an action against him alleging, inter alia, breach ofcontract. The plaintiff sought 100%, rather than 50%, of the fees, and treble damages forviolation of Judiciary Law § 487.
As a consequence of the defendant's repeated failure to comply with discovery orders, theSupreme Court granted the plaintiff's motion, in effect, to strike the defendant's answer and setthe matter down for an inquest on damages. The Supreme Court awarded the plaintiff 100% ofthe fees generated by the cases referred to the defendant and treble damages under Judiciary Law§ 487 based upon evidence that the defendant had charged the clients for undocumentedcosts in the cases referred to him.
Due to the defendant's failure to timely challenge the plaintiff's disclosure demands, thisCourt is limited to considering whether the requested material was privileged or whether therequest was palpably improper (seeDuring v City of New Rochelle, N.Y., 55 AD3d 533, 534 [2008]). Nonetheless, weconclude that the material requested by the plaintiff was not privileged and the request was notpalpably improper. Moreover, even if the defendant had timely challenged the disclosuredemands, the court providently exercised its discretion in ordering the defendant to produce therequested disclosure. " '[A] trial court is given broad discretion to oversee the discovery process'" (Maiorino v City of New York, 39AD3d 601, 601 [2007], quoting Castillo v Henry Schein, Inc., 259 AD2d 651, 652[1999]; see Olexa v Jacobs, 36AD3d 776, 777 [2007]; Byam vCity of New York, 68 AD3d 798, 800 [2009]). Since the disputed files were "crucial tothe [prosecution] of this action," limiting inspection and copying to the brief period in which thefiles had already been made available to the plaintiff would have been "overly[ ]restrictive"(Olexa v Jacobs, 36 AD3d at 777).
"The determination whether to strike a pleading for failure to comply with court-ordereddisclosure lies within the sound discretion of the trial court" (Fishbane v Chelsea Hall, LLC, 65 AD3d 1079, 1081 [2009]).However, the "sanction of striking a pleading should be imposed only where the failure tocomply with court-ordered discovery is shown to be willful and contumacious" (Byam v Cityof New York, 68 AD3d at 801; seeJenkins v Proto Prop. Servs., LLC, 54 AD3d 726, 726-727 [2008]; Carabello v Luna, 49 AD3d 679[2008]; Maiorino v City of New York, 39 AD3d at 602; Nunez v City of New York, 37 AD3d434 [2007]).
A finding that a party's conduct is willful and contumacious is warranted where that party has"repeated[ly] fail[ed] to comply with court-ordered discovery" and has offered "inadequateexplanations for the failures to comply" (Savin v Brooklyn Mar. Park Dev. Corp., 61 AD3d 954, 955 [2009][internal quotation marks omitted]; see Byam v City of New York, 68 AD3d at 801;Nunez v City of New York, 37 AD3d at 434-435). Here, willful and contumaciousconduct was properly inferred from the defendant's persistent failure to comply with properdisclosure demands, including his failure to attend court conferences, his failure to provideadequate responses to written disclosure demands, his untimely and nonspecific objections todisclosure demands, and his failure to appear for court-ordered depositions (see Byam v Cityof New York, 68 AD3d at 801; Nunez v City of New York, 37 AD3d at 434-435).Consequently, the Supreme Court providently exercised its discretion in striking the answer.
This Court's rules require every attorney practicing law in the Second Judicial Departmentwho is retained with respect to certain types of actions to file a retainer statement with [*3]the Office of Court Administration (hereinafter OCA) within 30days of being retained (see 22 NYCRR 691.20 [a] [1]). Filing a retainer statement withOCA is a prerequisite to receiving a fee for any case to which the regulation applies (see Micro-Spy, Inc. v Small, 69 AD3d687, 689 [2010]; Rabinowitz v Cousins, 219 AD2d 487, 488 [1995]). Although nuncpro tunc filing of retainer statements may be sufficient to preserve an attorney's right to recoverfees (see Fuentes v Brookhaven Mem.Hosp., 43 AD3d 992, 994 [2007]; Garrett v New York City Health & Hosps. Corp., 25 AD3d 424,425 [2006]), where the attorney fails to seek leave of court to file the statements nunc pro tunc,that late filing will not be sufficient (seeFishkin v Taras, 54 AD3d 260, 260-261 [2008]). Here, the defendant did not obtainleave of court to file the statements nunc pro tunc, and, indeed, filed the statements only after thejudgment against him had been entered. Moreover, the defendant failed to present any evidencejustifying his failure to comply with these regulations. Under these circumstances, the defendant'sbelated filing of retainer statements was insufficient to preserve his right to recover a fee(id.). Accordingly, the Supreme Court properly awarded the plaintiff 100% of the feesdespite the parties' 50%-50% fee-sharing agreement.
Judiciary Law § 487 (1) provides that an "attorney or counselor who: 1. [i]s guilty ofany deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court orany party . . . forfeits to the party injured treble damages, to be recovered in a civilaction." The purpose of this section is to protect clients against attorney overreaching and it doesnot apply in routine fee disputes between attorneys, as here (see Leskinen v Fusco, 18 AD3d 387, 389 [2005]; Liddle &Robinson v Shoemaker, 276 AD2d 335, 336 [2000]). Accordingly, although the plaintiff wasentitled to 100% of the fees at issue, he was not entitled to recover treble damages pursuant toJudiciary Law § 487.
In light of the above, we need not reach the parties' remaining contentions. Fisher, J.P.,Dillon, Florio and Lott, JJ., concur.