| Grace v Law |
| 2013 NY Slip Op 05383 [108 AD3d 1173] |
| July 19, 2013 |
| Appellate Division, Fourth Department |
| John W. Grace, Respondent, v Michael R. Law et al.,Appellants. |
—[*1] Smith, Sovik, Kendrick & Sugnet, P.C., Syracuse (Gregory D. Eriksen of counsel),for defendants-appellants Robert L. Brenna, Jr. and Brenna, Brenna & Boyce, PLLC. Lotempio & Brown, P.C., Buffalo (Brian J. Bogner of counsel), forplaintiff-respondent.
Appeals from an order of the Supreme Court, Erie Court (Shirley Troutman, J.),entered October 3, 2012. The order, insofar as appealed from, denied the motion ofdefendants Robert L. Brenna, Jr., and Brenna, Brenna & Boyce, PLLC for summaryjudgment and denied that part of the cross motion of defendants Michael R. Law andPhillips Lytle, LLP seeking summary judgment.
It is hereby ordered that the order so appealed from is affirmed without costs.
Memorandum: Plaintiff commenced this legal malpractice action seeking damagesfor the alleged negligence of defendants in their representation of him in a medicalmalpractice action arising from his treatment for an eye condition at the VeteransAdministration Outpatient Clinic in Rochester. In August 2006, defendants Robert L.Brenna, Jr. and Brenna, Brenna & Boyce, PLLC (hereafter, Brenna defendants)commenced an administrative tort claim against the United States on plaintiff's behalf byfiling an SF-95 form with the Veterans Administration (hereafter, VA). After six monthselapsed without a response from the government, Brenna recommended that plaintiffretain defendants Michael R. Law and Phillips Lytle, LLP (hereafter, Law defendants) topursue a medical malpractice claim in federal court. Plaintiff retained the Law defendantsin or about July 2007 and, on January 3, 2008, the Law defendants filed a complaint inthe United States District Court for the Western District of New York against the UnitedStates and the VA (collectively, government) under the Federal Tort Claims Act([FTCA] 28 USC § 2671 et seq.). The complaint alleged, inter alia, that theVA failed to monitor and/or treat plaintiff's eye condition in a proper and timely manner,thereby resulting in the loss of vision in plaintiff's right eye.
While preparing for the deposition of Dr. Shobha Boghani, the physician whoprimarily [*2]treated plaintiff at the VA, the governmentapparently discovered that Dr. Boghani was employed by the University of Rochester(hereafter, U of R). As a result, in October 2008, the government sought and was grantedleave to file a third-party action against Dr. Boghani and the U of R. The addition of theU of R created a conflict for the Law defendants and, as a result, the Brenna defendantsassumed sole responsibility for the medical malpractice action in December 2008. OnMay 22, 2009, Brenna filed an amended complaint in federal court naming the U of Rand Dr. Boghani as defendants and asserting state-law claims for medical malpractice. Byorder dated November 3, 2010, District Court granted the motion of the U of R and Dr.Boghani for summary judgment dismissing the amended complaint against them astime-barred. The court also granted the government's motion for summary judgmentdismissing the FTCA claims against it insofar as based upon the alleged negligence ofthe U of R and Dr. Boghani, concluding that Dr. Boghani was an independent contractorand not an employee of the VA. The only remaining claim in the amended complaint wasthat the VA was negligent in failing to reschedule an ophthalmology appointment after aJuly 2003 appointment was cancelled.
Shortly thereafter, plaintiff directed the Brenna defendants to discontinue the federalaction and, on December 16, 2011, a stipulation of discontinuance was entered in federalcourt. Plaintiff then commenced this legal malpractice action alleging, inter alia, thatdefendants were negligent in failing to name Dr. Boghani and the U of R in the initialcomplaint in federal court. The Brenna defendants subsequently moved for summaryjudgment dismissing the complaint against them, and the Law defendants cross-movedfor leave to amend their answer to add a statute of limitations defense and for summaryjudgment dismissing the complaint against them. Supreme Court denied the Brennadefendants' motion, granted that part of the Law defendants' cross motion seeking leaveto amend their answer, and denied that part of their cross motion for summary judgmentdismissing the complaint against them. We affirm.
"To establish a cause of action to recover damages for legal malpractice, a plaintiffmust prove that the defendant attorney failed to exercise 'the ordinary reasonable skilland knowledge commonly possessed by a member of the legal community, and that theattorney's breach of [that] duty proximately caused plaintiff to sustain actual andascertainable damages' " (Veliev Ellis Law, P.C., 48 AD3d 674, 675 [2008]). "To obtain summary judgmentdismissing a complaint in an action to recover damages for legal malpractice, a defendantmust demonstrate that the plaintiff is unable to prove at least one of the essentialelements of [his or her] legal malpractice cause of action" (Boglia v Greenberg, 63 AD3d973, 974 [2009]; seePignataro v Welsh, 38 AD3d 1320, 1320 [2007], lv denied 9 NY3d 849[2007]).
Initially, we reject defendants' contention that plaintiff waived or abandoned his legalmalpractice claim by voluntarily discontinuing what remained of his medical malpracticeaction and failing to take an appeal from District Court's November 2010 orderdismissing the bulk of his claims. In support of that contention, defendants primarily relyupon this Court's decision in Rupert v Gates & Adams, P.C. (83 AD3d 1393, 1396[2011]), in which we concluded that the plaintiff waived his right to raise certainallegations of legal malpractice in the context of a matrimonial action based upon hisexecution of a settlement agreement. Specifically, we concluded that, although certainallegations of legal malpractice had merit, Supreme Court in that case "did not err ingranting defendants' motion concerning those alleged errors because they could havebeen corrected on an appeal from the final judgment in the matrimonial action, andplaintiff consented to the dismissal on the merits of any appeal in the matrimonial actionas part of the global settlement resolving a bankruptcy proceeding in which he wasinvolved. In so doing, plaintiff precluded pursuit of the very means by whichdefendants' representation of plaintiff in the matrimonial action could have beenvindicated . . . We therefore conclude that plaintiff, by virtue of hisglobal settlement, waived the right to raise those shortcomings in this legalmalpractice action" (id. [emphasis added]).[*3]
Here, unlike in Rupert, plaintiff did not,as part of a settlement agreement or otherwise, waive his right to raise the claim thatdefendants committed malpractice in the underlying action by failing to sue theappropriate parties before the expiration of the applicable statute of limitations. Rather,plaintiff discontinued his federal medical malpractice action, which the court hadreduced to the claim that employees of the VA were negligent in failing to reschedule acancelled ophthalmology appointment, and commenced this legal malpractice action instate court. We reject defendants' invitation to extend the ruling in Rupert to a perse rule that a party who voluntarily discontinues an underlying action and forgoes anappeal thereby abandons his or her right to pursue a claim for legal malpractice. Indeed,we noted in Rupert that, in determining that the court erred in granting thedefendants' cross motion for summary judgment dismissing the complaint in the contextof a prior appeal (Rupert vGates & Adams, P.C., 48 AD3d 1221 [2008]), we "necessarily rejected the verypremise upon which the court denied the instant motion for summary judgment," i.e., that"this legal malpractice action is barred by [the] plaintiff's failure to perfect an appealfrom the judgment in the matrimonial action" (83 AD3d at 1395).
Although the precise question presented herein appears to be an issue of firstimpression in New York, we note that several of our sister states have rejected the per serule advanced by defendants herein (see e.g. MB Indus., LLC v CNA Ins. Co., 74So 3d 1173, 1176 [2011]; Hewitt v Allen, 118 Nev 216, 217-218, 43 P3d 345,345-346 [2002]; Eastman v Flor-Ohio, Ltd., 744 So 2d 499, 502-504 [1999];Segall v Segall, 632 So 2d 76, 78 [1993]). As has been noted, such a rule wouldforce parties to prosecute potentially meritless appeals to their judicial conclusion inorder to preserve their right to commence a malpractice action, thereby increasing thecosts of litigation and overburdening the court system (see Eastman, 744 So 2d at504). The additional time spent to pursue an unlikely appellate remedy could also resultin expiration of the statute of limitations on the legal malpractice claim (see MBIndus., 74 So 3d at 1181). Further, requiring parties to exhaust the appellate processprior to commencing a legal malpractice action would discourage settlements andpotentially conflict with an injured party's duty to mitigate damages (see CrestwoodCove Apts. Bus. Trust v Turner, 164 P3d 1247, 1254 [2007]; Eastman, 744So 2d at 504).
Here, we conclude that defendants failed to establish as a matter of law that anyalleged negligence on their part was not a proximate cause of plaintiff's damages (see Wilk v Lewis & Lewis,P.C., 75 AD3d 1063, 1066 [2010]; New Kayak Pool Corp. v Kavinoky Cook LLP, 74 AD3d1852, 1853 [2010]; Andzelv Cosgrove, 56 AD3d 1226, 1227 [2008]). Specifically, defendants failed toestablish that plaintiff was likely to succeed on an appeal from the November 2010 orderand, therefore, that their alleged negligence was not a proximate cause of his damages(see Crestwood Cove Apts. Bus. Trust, 164 P3d at 1252; Hewitt, 118Nev at 222, 43 P3d at 348; see also Technical Packaging, Inc. v Hanchett, 992So 2d 309, 316 [2008], review denied 6 So 3d 52 [2009]; cf. Bradley vDavis, 777 So 2d 1189, 1190 [2001], dismissed 805 So 2d 804 [2001],cert denied 535 US 926 [2001]). Notably, the record before us does not includethe full record from the underlying action, i.e., the record that would have been beforethe Second Circuit on an appeal (see Technical Packaging, Inc., 922 So 2d at315). Thus, while defendants "may be able to show that [their] representation of[plaintiff] did not preclude [him] from prevailing in the [underlying] lawsuit [or uponappeal], [they have] not done so at this time" (Lenahan v Russell L. Forkey, P.A.,702 So 2d 610, 612 [1997]).
The Law defendants also contended in support of that part of their cross motion forsummary judgment dismissing the complaint against them that the action wastime-barred. Even assuming, arguendo, that they met their initial burden on the crossmotion in that respect, we conclude that plaintiff raised a triable issue of fact whether thecontinuous representation doctrine applied to toll the statute of limitations (see Sobel v Ansanelli, 98AD3d 1020, 1023 [2012]; International Electron Devices [USA] LLC v Menter, Rudin &Trivelpiece, P.C., 71 AD3d 1512, 1512-1513 [2010]).[*4]
All concur except Whalen, J., who dissents andvotes to reverse the order insofar as appealed from in accordance with the followingmemorandum.
Whalen, J. (dissenting). I respectfully dissent because, in my view, plaintiff isprecluded as a matter of law from bringing this legal malpractice action based upon hisvoluntary discontinuance of the underlying federal action and failure to pursue anonfrivolous appeal. It is important to note that, if plaintiff had been successful in hisappeal in the underlying federal action, we would not have a subsequent legalmalpractice case.
In the underlying federal medical malpractice case, defendants failed to name acertain physician as a defendant, which is the basis of the subsequent legal malpracticeclaim. Defendants' contention is that the physician was a government employee and thuswas not required to be named individually as a defendant because the government wasalready a party. The federal trial court determined that the physician was an independentcontractor, not a government employee. I conclude that defendants would have had ameritorious argument had plaintiff taken an appeal from the federal order based uponcase law supporting defendants' position that the physician was a government employeeas opposed to an independent contractor. Federal courts have employed the "control test"to determine if an individual or other entity equitably should be considered an"employee" of the federal government for purposes of the Federal Tort Claims Act([FTCA] 28 USC § 2671 et seq.) because the FTCA waives sovereignimmunity for the torts of employees of the government but not for those of itsindependent contractors (see United States v Orleans, 425 US 807, 813-814[1976]). "[I]t is well settled that the question whether one is an employee of the UnitedStates is to be determined by federal law" (Lurch v United States, 719 F2d 333,337 [10th Cir 1983], cert denied 466 US 927 [1984]). Courts look to factors suchas which entity determined the amount of the individual's salary, who actually paid thatsum, whether the government exercised day-to-day control over the individual, whatentity determined the individual's work hours and provided for vacation leave, whetherthe government had the authority to review the individual's performance and any otherfactors relating to the government's exercise of control over the individual's work (seeLeone v United States, 910 F2d 46, 50 [2d Cir 1990], cert denied 499 US905 [1991]; see also Tivoli v United States, 1996 WL 1056005, *3-5, 1996 USDist LEXIS 22317, *8-14 [SD NY 1996], affd 164 F3d 619 [2d Cir 1998];Lurch, 719 F2d at 336-337 [reciting test and determining that the individual was anindependent contractor based on the contract itself]).
In Tivoli, physicians employed by Georgetown University (Georgetown)worked full-time at the National Institutes of Health (NIH) (1996 WL 1056005, *3, 1996US Dist LEXIS 22317, *11). The contract specified the names of the physicians whowould serve as "key personnel," and the government had to approve those key personnelso that it could ensure quality physicians (id.). Georgetown had no supervisionover any of the physician's day-to-day activities (id.). The NIH set forth bycontract the hours that the physicians worked and provided all medical equipment andfacilities necessary for the physicians to complete their work (id.). In fact, theonly factor demonstrating that the physicians were Georgetown employees was that theyreceived their salaries from Georgetown (1996 WL 1056005, *4, 1996 US Dist LEXIS22317, *12). The District Court found, based on the various factors, that the physicianswere under the control, direction and supervision of the government and thus wereemployees of the government despite language to the contrary in the contract. In the casebefore us now, the physician was mentioned by name in the contract but it is unclearwhether this was because the Veterans Administration (VA) requested her specifically orbecause the University of Rochester designated her as an available physician for the VA.Had the VA specifically designated the physician, that would be evidence of its havingexercised control and could weigh in favor of a finding that she was an employee of theVA.
In Williams v United States (2007 WL 951382, 2007 US Dist LEXIS 25240[SD NY 2007]), the District Court initially noted that, although the contract declared thatthe physician was not to be considered a government employee for any reason, the courtwas not bound by the language of the contract in [*5]determining whether the physician was a governmentemployee for purposes of the FTCA (see 2007 WL 951382, *10, 2007 US DistLEXIS 25240, *35). The court found that the physician, by contract, was to " 'beunder the direction of the Chief [of Bronx VA]' " and was required to provide hisservices " 'in accordance with VA policies and procedures,' " and that " 'personnelassignments [by the contracting entity] were subject to the approval of the Bronx VAChief of Staff' " (2007 WL 951382, *11, 2007 US Dist LEXIS 25240, *39-40). Finally,the court noted that the government "controlled not only [the physician's] work hours andvacation time . . . , but where he worked, who he saw, and what he didduring those hours" (2007 WL 951382, *12, 2007 US Dist LEXIS 25240, *40). Indenying the government's motion for summary judgment dismissing the complaint, thecourt determined that "a reasonable factfinder could conclude that [the physician]qualifie[d] under the FTCA as an 'employee' of the Bronx VA" (2007 WL 951382, *12,2007 US Dist LEXIS 25240, *42-43). In the case now before us, the physician wasrequired to work at the VA Outpatient Clinic six days per month. Additionally, otherphysicians could only be substituted for the named physician in the event that she becamepermanently or temporarily unavailable due to vacation, illness, emergencies ortermination of employment. That is additional evidence weighing in favor of classifyingthe physician as an employee of the VA.
The federal court in the underlying medical malpractice action herein found that,"[w]hile the fact that the VA provided the place of work, as well as the tools, for themost part, weighs in favor of finding that [the physician] was the VA's agent,"consideration of all of the other factors favored a finding that the physician was anindependent contractor. An appellate court could disagree with the District Court'sweighing of the various factors regarding whether the physician was a governmentemployee. Inasmuch as plaintiff's theoretical appeal to the Second Circuit would havebeen before a panel for de novo review of whether there was a "genuine factual dispute"for resolution by a jury, plaintiff may have succeeded on appeal in at least a reversal ofdefendants' respective motions for summary judgment (Vermont Teddy Bear Co.,Inc. v 1-800 Beargram Co., 373 F3d 241, 244 [2004]). Thus, plaintiff'sdecision to direct defendants to discontinue the federal action precluded defendants frombeing vindicated should the appeal have resulted in reversal.
We have held that a plaintiff in a legal malpractice action waived his right to raisecertain allegations of malpractice in the context of a matrimonial action based upon hisexecution of a settlement agreement (Rupert v Gates & Adams, P.C., 83 AD3d 1393 [2011]).We concluded there that Supreme Court "did not err in granting defendants' motionconcerning those alleged errors because they could have been corrected on an appealfrom the final judgment in the matrimonial action, and plaintiff consented to thedismissal on the merits of any appeal in the matrimonial action as part of the globalsettlement resolving a bankruptcy proceeding in which he was involved. In doing so,plaintiff precluded pursuit of the very means by which defendants' representation ofplaintiff in the matrimonial action could have been vindicated" (id. at 1396).
Our decision in Rupert was based upon sound policy and should be appliedhere for various reasons, the first being judicial economy. The majority is concerned thatforcing a party to pursue a potentially meritless appeal will result in increased costs oflitigation and overburdening the court system. As stated previously, I do not view theappeal as meritless here. I believe that allowing a plaintiff to discontinue his or herunderlying case in order to pursue a legal malpractice action will result in the increasedlitigation costs and overburdening of the court system that the majority seeks to avoid. Alegal malpractice case requires commencing a separate action that not only involveslitigating the legal malpractice action but also involves litigating the underlying action.This may result in additional expert witnesses being called and a more lengthy discoveryprocess because the parties are beginning the litigation of essentially two separate casesin state court as opposed to one in federal court. Importantly, the parties will have tolitigate the very issue that would have been decided on appeal in the underlying action inorder to resolve the legal malpractice case. This will obviously result in additional costs,attorney fees and use of court resources. However, should a litigant have to pursue anappeal that may correct [*6]a potentially erroneous trialcourt decision in the underlying litigation, a subsequent legal malpractice case may beavoided, thus saving costs and the use of court resources.
Additionally, allowing a litigant to choose to forego the appeal process andcommence a legal malpractice action against his or her attorney allows the litigant toselect a new defendant that he or she may feel is an easier target before a jury than aphysician or hospital would be. I cannot see the merit in allowing a litigant, who does notgive his or her attorney an opportunity to pursue a potentially meritorious appeal, toabandon his or her underlying case as a strategic decision in order to pursue a legalmalpractice claim against his or her attorney. The appellate review of disputed issues isan integral part of our judicial system, allowing for review, contemplation anddetermination of cases by a panel of justices or judges as opposed to a single one.Requiring the litigant to seek final determination of the disputed issue through theappellate process should not be looked upon as onerous, as argued by plaintiff.
I also disagree with the majority that the additional time spent pursuing an appealcould result in the expiration of the statute of limitations on a legal malpractice claim.That issue is easily remedied. Nothing prevents plaintiff from commencing a separatemalpractice action that may be stayed until the resolution of the underlying action, whichincludes resolution of any issues on appeal. Second, plaintiff may also obtain a waiver ofthe statute of limitations from defendants so that a subsequent legal malpractice actionwould not be time-barred.
I also disagree with the majority that requiring plaintiff to exhaust his appellateremedies interferes with settlement and potentially conflicts with an injured party's dutyto mitigate damages. It is speculative to assume that a certain litigation posture willinterfere with settlement over another litigation posture. Who is to say that a case is moredifficult to settle when there are outstanding appellate issues that may result in thereversal of the trial court's decision versus when there is a legal malpractice case thatmust resolve both legal malpractice issues and medical malpractice issues, as well asappellate issues. One may easily conclude that the latter interferes more with settlementthan the former. I also disagree with the majority that plaintiff's pursuit of an appeal hereconflicts with his duty to mitigate damages. The proper way to mitigate damages in thiscase would have been for plaintiff to pursue his appeal and also to continue to litigate hisremaining cause of action, which may have resulted in an award of some or all of hisdamages. In the event that he recovered all of his damages, a subsequent legalmalpractice case would be unnecessary. In the event that he recovered partial damages,the issues and damages recoverable in a subsequent legal malpractice case would belimited. Plaintiff violated his duty to mitigate by discontinuing his remaining cause ofaction and foregoing his appeal in the underlying action.
I therefore would reverse the order insofar as appealed from and grant defendants'motion and cross motion for summary judgment seeking dismissal of the complaint.Present—Scudder, P.J., Peradotto, Lindley, Sconiers and Whalen, JJ.