| Moses v Savedoff |
| 2012 NY Slip Op 04400 [96 AD3d 466] |
| June 7, 2012 |
| Appellate Division, First Department |
| Manuel Moses, Respondent, v Laurence M. Savedoff,Appellant. |
—[*1] Bridget Butler, New York, for respondent.
Order, Supreme Court, New York County (Debra A. James, J.), entered September 3, 2010,which denied defendant's motion to dismiss the complaint or, in the alternative, for summaryjudgment dismissing the complaint, unanimously modified, on the law, to grant partial summaryjudgment to defendant to the extent of dismissing the complaint save for plaintiff's cause ofaction for quantum meruit, and otherwise affirmed, without costs.
The following facts are undisputed: In 2002, plaintiff, a newly admitted attorney, placed anadvertisement in the New York Law Journal seeking a mentorship opportunity with anexperienced solo practitioner in order to gain trial experience. Defendant responded to theadvertisement and the parties met. Subsequently, plaintiff saw an advertisement in the Journalplaced by a Bronx solo practitioner looking to refer cases out to other experienced attorneys.Defendant met with the Bronx practitioner and agreed to act as trial counsel for the Bronxattorney's clients with a 40% referral fee payable to the Bronx attorney. It is further undisputedthat plaintiff referred at least two cases to defendant's law office, and that he conducted somedepositions for cases on which defendant was working, and drafted some bills ofparticulars—even though plaintiff had not litigated any personal injury cases prior tomeeting defendant. Plaintiff received some payments from defendant which defendantcharacterized as mostly for per diem work. Eventually, however, according to plaintiff, thepayments ceased.
In August 2006, plaintiff filed a summons and complaint alleging 10 causes of action asfollows: (1) breach of an oral partnership agreement; (2) breach of an oral agreement; (3) fraud;(4) an accounting; (5) unjust enrichment; (6) fraud in the inducement; (7) breach of fiduciaryduty; (8) estoppel; (9) contract implied in the law based on past performance; and (10) quantummeruit.
Plaintiff alleged, inter alia, that defendant had proposed that they should work together aspartners in a personal injury law practice with each having an equal share of the profits gainedfrom the cases they worked on jointly. Plaintiff further alleged that between 2002 and 2005 heworked on more than 100 personal injury cases for defendant, expended approximately 500 hoursin connection with these cases, and contributed $5,000 in capital to the partnership.
In September 2006, defendant served a pre-answer motion to dismiss pursuant to CPLR 3211(a) (1) and (4). Defendant argued that no sustainable cause of action exists because no [*2]partnership agreement, oral or written, existed between him andplaintiff; that defendant did not intend to enter into a partnership; and "there is no evidencewhether in the form of sharing losses, tax returns, written agreement or actions demonstratingthat the parties held themselves out as a partnership."
Plaintiff opposed, and on November 30, 2006, the motion court heard oral argument. Thecourt declined to convert the motion into one for summary judgment, and found that the factualallegations of plaintiff sufficiently stated a cognizable cause of action. In May and June 2008,discovery was conducted, and the parties were deposed.
In June 2009, defendant again moved to dismiss the action pursuant to CPLR 3211 (a) (1)and (4). Alternatively, defendant requested summary judgment dismissing the complaint. Whiledefendant raised arguments similar to those in his pre-answer motion seeking dismissal of thecomplaint, this time, on the basis of plaintiff's deposition transcript, he argued that plaintiff'sproof failed to raise a triable issue as to the existence of an oral partnership.
Defendant noted that there was no evidence or testimony offered to indicate that the partieshad shared earnings 50/50 in accordance with the alleged oral partnership arrangement, or thatplaintiff shared in law firm losses and/or expenses, or that plaintiff contributed capital to the lawfirm. Defendant further offered evidence that, in conducting depositions, plaintiff had deemedhimself to be "of counsel" or working independently. Defendant affirmed that the referred casesfrom the Bronx litigator comprised only 10% of his law firm practice.
Defendant referenced plaintiff's testimony at deposition where plaintiff conceded, inter alia,that he had full-time employment with another law firm during the relevant time period; that the"overhead" in defendant's office was "no concern of his"; that there was no letterhead evidencinga partnership; and that he did not know the name of the staff in defendant's law office. Inopposition, plaintiff produced, inter alia, a bank account statement to show that he had paiddefendant $750 which he claimed was part of a $5,000 contribution to the partnership.
On September 3, 2010, the court denied defendant's motion for summary judgment uponfinding that the motion was precluded by the law of the case doctrine. The court found that theargument was identical to the prior motion, and defendant had a full and fair opportunity to arguethe identical motion to dismiss.
On appeal, defendant argues that the motion court erred in summarily denying his motion forsummary judgment based on the law of the case doctrine. Defendant also argues that the statuteof frauds (General Obligations Law § 5-701) precludes plaintiff's claim for compensationpredicated on an alleged partnership agreement absent a writing, or evidence demonstrating apartnership agreement. Finally, defendant argues that there are no triable issues of fact as to anykind of partnership agreement with plaintiff.
As a threshold matter, we note that the law of the case doctrine does not apply when a motionto dismiss is followed by a summary judgment motion, as is the case here (see 191 Chrystie LLC v Ledoux, 82AD3d 681 [2011]; Riddick v Cityof New York, 4 AD3d 242, 245 [2004]). Defendant's first motion was to dismiss underCPLR 3211; the court declined to convert that pre-answer motion to a summary judgmentmotion. Thus, the law of the case doctrine was inapplicable to defendant's subsequent summaryjudgment motion pursuant to CPLR 3212.
Defendant's statute of frauds argument, however, has no merit. The statute of frauds isinapplicable to an agreement to create a joint venture or partnership because an oral agreementfor an indefinite period creates a partnership or joint venture at will (see Foster v Kovner,44 [*3]AD3d 23, 27 [2007]; Prince v O'Brien, 234 AD2d12 [1996]). Additionally, the parties' alleged agreement to share in the profits of certain cases,when reasonably interpreted, could have been performed within one year (Foster, 44AD3d at 26).
Nevertheless, for the reasons set forth below, we grant partial summary judgment todefendant dismissing plaintiff's claims as to the existence of an oral partnership. We agree withdefendant that there are no triable issues of fact as to the existence of such a partnership withplaintiff, or even of a partnership limited to a select group of clients.
Initially, we note that plaintiff has engendered confusion with his allegations: While heinvokes New York partnership law in the summons and complaint, and refers to an alleged"partnership/joint venture" agreement throughout papers submitted in this action, he also arguesthat the parties had a partnership only to the extent of an agreement to equally share profitsarising out of the legal representation of a select group of clients.
At deposition, plaintiff testified as follows:
"Q: Now [defendant] gave you the impression that you were in a partnership for the share ofthe entire practice?
"A: No.
"Q: What was this a partnership for, as you understood it?
"A: This was a partnership for specifically the cases that I would bring into the business."
On plaintiff's own admission therefore, there was no oral partnership agreement withdefendant such that would establish a bona fide law practice partnership. As to plaintiff'sallegation that he and defendant had an oral agreement to equally share the fees from casesplaintiff brought in, the record reflects that there was a 50% fee split in only one of two referrals(a slip and fall action involving plaintiff's aunt) acknowledged by defendant. In the other,plaintiff received one third of the fee.
Moreover, at deposition, plaintiff was unable to quantify, even approximately, how manycases he had brought in over and above the two referrals. Instead, plaintiff testified that theyincluded "in the main," cases referred to defendant by the Bronx practitioner whose ad plaintiffhad shown to defendant. However, plaintiff conceded that after setting up a meeting betweendefendant and the practitioner, he had nothing more to do with that practitioner. Indeed, plaintifftestified that it was defendant who met every week with the Bronx practitioner to discuss cases,and to meet with prospective clients in order for defendant to determine which clients he wouldrepresent.
More significantly, we find that no triable issues of fact exist as to the traditional indicia of avalid oral partnership agreement. It is well established that in determining whether parties forgedsuch an oral partnership agreement, a court will consider the intent of the parties, whether theparties shared joint control in the management of the business, whether the parties shared profitsand losses and the existence of capital contribution (see Baytree Assoc. v Forster, 240AD2d 305 [1997], lv denied 90 NY2d 810 [1997]; Prince v O'Brien, 256 AD2d208, 212 [1998] ["traditional indicia" of a partnership include joint control and sharing losses],citing Chanler v Roberts, 200 AD2d 489 [1994], lv dismissed in part and denied inpart 84 NY2d 903 [1994]). In Chanler, this Court held that "[i]t is axiomatic that theessential elements of a partnership must include an agreement between the principals to sharelosses as well as profits" (200 AD2d at 491).
Here, plaintiff does not allege joint control or any agreement to share in any of the losseseither of the law practice in general, or appertaining just to the cases plaintiff brought in. [*4]Moreover, while the record reflects a $750 payment by plaintiff todefendant (characterized by defendant as contribution towards an expert fee in plaintiff's aunt'scase), the record is essentially devoid of any admissible evidence supporting plaintiff's assertionthat he contributed $5,000 in capital to the law firm.
Plaintiff testified that the capital contribution was in the form of cash payments which herecorded in a "logbook" or "ledger," but he did not produce any such logbook or ledger. Rather,in opposition to defendant's summary judgment motion, plaintiff attempted to shift the burden todefendant by incomprehensibly arguing: "This is a fact in dispute where [p]laintiff acknowledgesthe contribution and [d]efendant denies it. This is a material fact in dispute for which [d]efendanthas no documentary evidence to back up his defensive denial." It is difficult to imagine preciselywhat type of documentary evidence defendant could produce to establish a negative, namelyplaintiff's non-contribution—even were it defendant's burden to do so. Thus,plaintiff failed to raise a triable issue of fact as to his capital contributions.
In the absence of a valid contract, plaintiff, however, does set forth a prima facie case forrecovery in quantum meruit. It is hornbook law that in order to establish a claim in quantummeruit, a claimant must establish "(1) the performance of services in good faith, (2) theacceptance of the services by the person to whom they are rendered, (3) an expectation ofcompensation therefor, and (4) the reasonable value of the services" (Soumayah v Minnelli, 41 AD3d390, 391 [2007]; see 22A NY Jur 2d, Contracts § 610). Defendant agreed thatplaintiff worked for him in some capacity on a certain number of cases. Further, plaintiff pointsto two e-mails purportedly sent by defendant to plaintiff in August 2005 acknowledging thatdefendant owes plaintiff certain fees on cases after they "come to trial." Thus, plaintiff mayrecover based on quantum meruit for work he performed without compensation on behalf ofdefendant.
We have considered plaintiff's other claims, and find them to be without merit.Concur—Mazzarelli, J.P., Friedman, Catterson, Renwick and DeGrasse, JJ.