| Nichols v Curtis |
| 2013 NY Slip Op 01776 [104 AD3d 526] |
| March 19, 2013 |
| Appellate Division, First Department |
| Stevi Brooks Nichols, Appellant, v W. RobertCurtis et al., Respondents. Marian C. Rice, NonpartyRespondent. |
—[*1] Curtis & Associates, P.C., New York (W. Robert Curtis of counsel), for W. RobertCurtis, Curtis & Riess-Curtis, P.C., and Curtis & Associates, P.C., respondents. Cheryl L. Riess, respondent pro se. L'Abbate, Balkan, Colavita & Contini, LLP, Garden City (Matthew J. Bizzaro ofcounsel), for Marian C. Rice, respondent.
Order, Supreme Court, New York County (Melvin L. Schweitzer, J.), entered on orabout July 16, 2010, which granted defendants' motion to dismiss the complaint, subsilentio denied plaintiff's motion for sanctions against defendant W. Robert Curtis.(Curtis), denied plaintiff's motion for sanctions against nonparty Marian C. Rice, andgranted Rice's cross motion for sanctions against plaintiff, unanimously modified, on thelaw, to deny defendant's motion as to the first four causes of action and to deny Rice'scross motion, and otherwise affirmed, without costs. Order, same court and Justice,entered July 19, 2010, which denied plaintiff's motion for sanctions and granted Rice'scross motion for sanctions, unanimously modified, on the facts and in the exercise ofdiscretion, to deny Rice's cross motion for sanctions, and otherwise affirmed, withoutcosts. Judgment, same court (Edward H. Lehner, J.H.O.), entered February 18, 2011,against plaintiff in favor of Rice in the amount of $8,086.04, unanimously reversed, onthe facts and in the exercise of discretion, and the judgment vacated. Appeal from order,same court and J.H.O., entered December 9, 2010, unanimously dismissed, without costs,as subsumed in the appeal from the February 18, 2011 judgment. Order, same court(Melvin L. Schweitzer, J.), entered January 10, 2012, which denied plaintiff's motion tovacate the prior orders and [*2]judgments pursuant toCPLR 5015 (a) (2) and (3) and for renewal pursuant to CPLR 2221 (e), unanimouslyaffirmed, without costs. Order, same court and Justice, entered March 6, 2012, whichdenied plaintiff's motion for summary judgment dismissing the counterclaim of Curtis,defendant Curtis & Riess-Curtis, P.C. (C&R-C), and defendant Curtis & Associates, P.C.(C&A) (collectively, the Curtis defendants), unanimously affirmed, without costs.
In this action, plaintiff claims her former attorneys committed malpractice, breachedtheir fiduciary duty, and engaged in fraud, coercion and defamation in prosecuting amalpractice action against the attorneys who represented her in an action in 1988 againstnonparty Morris Sales, Inc. Notwithstanding the court's characterization of their motion,defendants moved to dismiss the fifth through ninth causes of action only. Curtis andC&A, against whom the first four causes of action are asserted, did not move to dismissthose causes of action, and, even though the court found them to have duplicated the fifththrough ninth causes of action, the court should not have dismissed them sua sponte (see e.g. Purvi Enters., LLC v Cityof New York, 62 AD3d 508, 509 [1st Dept 2009]; West Washington CutMeat Ctr., Inc. v Solomon, 260 App Div 741, 742 [1st Dept 1940]). Reinstatementof the first four causes of action is without prejudice to a motion for dismissal in view ofthe analysis set forth below.
Plaintiff's fraud claim is based on defendants' failure to tell her that C&R-C had beendissolved; she contends that, had she known that, she would not have retained C&R-C in1998 and/or would not have allowed defendants to continue representing her until 2003.However, where a dissolved "corporation carries on its affairs and exercises corporatepowers as before, it is a de facto corporation . . . and ordinarily noone but the state may question its corporate existence" (Garzo v Maid of MistSteamboat Co., 303 NY 516, 524 [1952]). Thus, defendants' failure to tell plaintiffthat C&R-C had been administratively dissolved and subsequently reinstated was not amaterial omission (see Lama Holding Co. v Smith Barney, 88 NY2d 413, 421[1996]; see also Global Mins. &Metals Corp. v Holme, 35 AD3d 93, 99 [1st Dept 2006] [materiality can bedisposed of summarily], lv denied 8 NY3d 804 [2007]). Furthermore, plaintifffailed to show that she was injured by the alleged fraud (see Lama, 88 NY2d at421). There is no indication that, had C&R-C not been dissolved, it would have providedbetter legal services to plaintiff. Plaintiff's request for at least $2 million in damages hasno relationship to the $87,000 in fees that she paid defendants.
Plaintiff contends that the statute of limitations on her breach of fiduciary dutyclaims should be six years instead of three because the claims are based on fraud (see e.g. IDT Corp. v MorganStanley Dean Witter & Co., 12 NY3d 132, 139 [2009]). However, since, asindicated, the complaint fails to state a cause of action for fraud, the statute of limitationsfor the breach of fiduciary duty claims, which seek money damages rather than equitablerelief, is three years (see Kaufman v Cohen, 307 AD2d 113, 119 [1st Dept2003]); thus, those claims are time-barred.
We also reject plaintiff's contention that defendants should be equitably estopped bytheir fraud from asserting the three-year statute of limitations defense to the malpractice,breach of contract (this claim is duplicative of the malpractice claim), and conversionclaims. First, the complaint does not state a cause of action for fraud. Second, the failureto disclose that underlies plaintiff's equitable estoppel argument is also the basis for herfraud claim (see Ross v LouiseWise Servs., Inc., 8 NY3d 478, 491 [2007]; see also Corsello v Verizon N.Y., Inc., 18 NY3d 777, 789[2012]). Third, plaintiff fails to allege specific actions by defendants that kept her fromtimely bringing suit (see Putterv North Shore Univ. Hosp., 7 NY3d 548, 553 [2006]); mere failure to disclosewrongdoing is not sufficient (see Ross, 8 NY3d at 491; see also Zumpano v [*3]Quinn, 6 NY3d 666, 675 [2006]). Fourth, withrespect to the malpractice and breach of contract claims, the complaint admits thatplaintiff realized by November 2003 that defendants' representation of her had fallenbelow the skill and knowledge commonly required of members of the legal profession(see Putter, 7 NY3d at 553; Zumpano, 6 NY3d at 674).
Plaintiff failed to support her request for leave to amend with an affidavit of meritsand such other evidence as is appropriate on a motion for summary judgment (seeNon-Linear Trading Co. v Braddis Assoc., 243 AD2d 107, 116 [1st Dept 1998]).
Plaintiff's motion for sanctions against Curtis and Rice for retaining her files must bedenied. Plaintiff had an opportunity to retrieve her files in 2005 when Curtis submittedan affidavit stating that plaintiff already had at least 99% of the case file from the actionsunderlying this malpractice case. In 2009, when plaintiff came to identify her files andbelongings, Rice, as Curtis's counsel, had an obligation to supervise their removal tomake certain that papers were properly duplicated and work product remained withCurtis or counsel. Thus, sanctions against her are not warranted. However, Rice's andCurtis's insistence on not returning original documents and requiring plaintiff todesignate each garment individually, needlessly involving intervention by the Court andits clerk, to obtain documents and garments that had been previously ordered returned,precludes them from obtaining costs or sanctions from plaintiff.
Plaintiff's motion to vacate and renew was correctly denied as to defendant Cheryl F.Riess, since nothing new nor any specific evidence offered was directed against Riess.
The branch of the motion based on CPLR 5015 (a) (3) (fraud, misrepresentation, orother misconduct) was correctly denied as to Rice and the Curtis defendants, sinceplaintiff did not show that either Rice or the Curtis defendants committed fraud inprocuring the July 2010 orders; she merely tried to show that the Curtis defendants hadcommitted fraud in the underlying transaction (see Jericho Group, Ltd. v Midtown Dev., L.P., 47 AD3d463 [1st Dept 2008], lv dismissed 11 NY3d 801 [2008]). In any event, weare vacating the award of sanctions.
The branch of the motion based on CPLR 5015 (a) (2) (newly-discovered evidence)was correctly denied as to the Curtis defendants and Rice because the evidence wouldnot have produced a different result (see Matter of Tamara B. v Pete F., 220AD2d 318 [1st Dept 1995]). Similarly, assuming, without deciding, that plaintiff offered"new facts" on her CPLR 2221 (e) motion, those facts would not have changed the priordetermination (see Mejia-Ortizv Inoa, 89 AD3d 514 [1st Dept 2011]).
As to plaintiff's motion for summary judgment dismissing the Curtis defendants'counterclaim, plaintiff and the Curtis defendants signed a stipulation that withdrew thecounterclaim with prejudice. Concur—Mazzarelli, J.P., Acosta, Freedman, Richterand Gische, JJ.