SHAW, LICITRA, BOHNER, ESERNIO, SCHWARTZ PFLUGER, P.C. v. BALIN

Thursday, February 7, 2002

Supreme Court

Nassau County

Justice Austin

SHAW, LICITRA, BOHNER, ESERNIO, SCHWARTZ & PFLUGER, P.C. v. BALIN ” In this action, Plaintiff seeks to recover from Defendant the balance of one-half of the attorneys’ fees ($258,502.51) incurred by Plaintiff in connection with the bankruptcy filing of Beau Bres Realty Associates, LLC (“ Beau Bres”). The complaint identifies the parties alleging that Defendant is an attorney and a partner of Certilman, Balin, Adler & Hyman, LLP (the “Certilman Firm”); that Balin, partners of the Certilman Firm and clients of the Certilman Firm (collectively referred to as the “Balin Group”) owned a shell corporation which owned a fifty-percent interest in Beau Bres; and that the other fifty percent interest in Beau Bres was held by entities owned or controlled by another Certilman Firm client, Wilbur F. Breslin (collectively referred to as the “Breslin Group”).

The gravamen of the complaint is that in September, 1997, Balin, on behalf of the Balin Group, and Breslin, on behalf of the Breslin Group, met with J. Stanley Shaw, a partner in Plaintiff law firm, and retained Plaintiff to file a bankruptcy petition on behalf of Beau Bres in order to avoid the imposition of personal liability against the members of the Breslin Group and Balin Group. Plaintiffs fees and disbursements were to be paid on a 50/50 basis between the Breslin Group and Defendant, on behalf of the Balin Group. Plaintiff, in this action, seeks to recover the halt of its legal fees and disbursements which Balin agreed to pay.

The complaint alleges four causes of action, all seeking to recover the sum of $258,502.51, plus interest, They are: [1] breach of contract (first cause of action); [2] account stated (second cause of action; [3] quantum meruit (third cause of action); and [4) unjust enrichment (fourth cause of action).

Defendant denies personal liability claiming that there was never an agreement, oral or otherwise, to answer for legal fees of any of Plaintiff’s clients. In fact, Plaintiff has neither alleged nor produced any written retainer agreement. Thus, Defendant argues that, based upon the Statute of Frauds, the complaint should be dismissed.

In response, Plaintiff claims that its representation of Beau Bres. in its bankruptcy arose from a meeting in September, 1997, at which Balin & Wilbur Breslin were present. At that meeting, Balin, on his own behalf and on behalf of the Balin Group, and Breslin, on behalf of the Breslin Group, agreed to moving forward with the bankruptcy to avoid personal liability to equally pay Plaintiff’s legal fees and disbursements. Breslin, at the time of commencement of this action, met that commitment.

Clearly, there is a fundamental difference between Defendant’s description of the nature of the oral agreement Plaintiff is suing upon and Plaintiff’s characterization. Defendant describes the allegedly nonexistent oral agreement as one “whereby (he) allegedly agreed to answer for the legal debts of one or more of the Shaw Firm’s clients.” Plaintiff, on the other hand, describes the oral agreement as a retainer agreement whereby Defendant, on behalf of the Balin Group, retained the Plaintiff law firm to file a bankruptcy petition on behalf of Beau Bres and agreed to pay one half of the fees earned thereby. The oral agreement described by Defendant would be subject to the Statute of Frauds, specifically, General Obligations Law ?§5-701 (a) (2). However, the retainer agreement described by Plaintiff would not be subject to any such restrictions. Plaintiff has demonstrated that the Statute of Frauds may not be a defense to this action and that triable issues exist as to the nature of the oral agreement and its terms. Defendant’s motion pursuant to CPLR 3211 (a) (5) cannot, therefore, be granted based upon the Statute of Frauds.

Nor can Defendant’s motion insofar as it is based upon documentary evidence pursuant to CPLR 3211 (a) (1) be granted. In support of this motion, Defendant argues that Plaintiff was retained by Beau Bres and not Defendant himself. Further, Defendant argues that the counsel fee obligation should be recoverable from the Beau Bres partners. A careful review of Defendant’s documentary evidence submitted on this motion does not reveal anything which could be found to be inconsistent with the retainer agreement alleged by Plaintiff. Certainly, to prevail on documentary evidence under CPLR 3211 (a) (1), such evidence must irrefutable demonstrate the movant’s claim. See, e.g. Gephardt v. Morgan Guaranty Trust Co, of N.Y., 191 A.D. 2d 229, 594 N.Y.S. 2d 248 (1st Dept. 1993). The evidence submitted here does not rise to that level.

Likewise, Defendant’s motion to dismiss Plaintiffs causes of action pursuant to CPLR 3211 (a) (7) cannot be granted. The Court, in deciding a motion to dismiss for failure to state a cause of action under CPLR 3211 (a) (7), must view the allegations in the complaint and the submissions in opposition to the motion in the best light of the non-movant pleader. Leon v. Martinez, 84 N.Y. 2d 83, 614 N.Y.S. 2d 972 (1992). See also, Dye v. Catholic Med. Ctr. of Brooklyn & Queens, Inc., 273 A.D. 2d 193, 710 N.Y.S. 2d 83 (2nd Dept. 2000). If a cause of action can be discerned therefrom, the motion to dismiss must be denied. See, Rovello v. Orofino Realty Co., Inc., 40 N.Y. 2d 633, 389 N.Y.S. 2d 314 (1976).

With respect to Plaintiff’s first cause of action for breach of contract, Defendant essentially relies upon the same arguments relating to the Statute of Frauds and documentary evidence defenses. In Defendant’s memorandum of law, it is argued that Plaintiff cannot, as a matter of law, bear its burden of showing that Balin personally “retained” it in connection with the Beau Bres bankruptcy proceeding. The Court disagrees. Plaintiff may be able to meet its burden of showing that Defendant personally retained Plaintiff law firm through the testimony of Mr. Shaw. Defendant’s motion to dismiss Plaintiff’s first cause of action pursuant to CPLR 3211 (a) (7) cannot be sustained. As a breach of contract cause of action has been pleaded.

With respect to Plaintiff’s second cause of action based upon an alleged account stated, Defendant claims that Plaintiff’s invoices were directed to Breslin; not him. He argues that a letter dated March 13, 1998, which was not annexed to the papers submitted and is, thus, not considered by the Court, does not set forth an account to sustain this cause of action. The Court agrees that invoices addressed to Mr. Wilbur Breslin cannot in and of themselves form the basis of an account stated against Defendant.

However, Plaintiff is not relying upon the invoices alone. The eight (8) letters sent by Plaintiff to Defendant along with the invoices and their retention without objection are sufficient to establish an account stated. This case is unlike M. Paladino, Inc. v. J. Lucchese & Son Contr. Corp., 247 A.D. 2d 515, 669 N.Y.S, 2d 318 (2nd Dept. 1998) in that the Defendant was sent copies of the invoices because he had already agreed to pay one-half of Plaintiff’s expenses. They were not merely sent to solicit his assistance in obtaining payment from Mr. Breslin. A cause of action for an account stated has been sufficiently pleaded.

With respect to Plaintiff’s third cause of action based upon quasi-contract, seeking the reasonable value of Plaintiff’s legal services, the complaint is sufficient. Alternative pleading of a cause of action for the reasonable value of services rendered is permissible where the alleged oral agreement may not exist or may be unenforceable by reason of the Statute of Frauds. See, Farash v. Sykes Datatronics, Inc., 59 N.Y. 2d 500, 465 N.Y.S. 2d 917 (1983); Mirchel v. RMJ Sec. Corp., 205 A.D. 2d 388, 613 N.Y.S. 2d 876 (1st Dept. 1994); and Peters v. Morse, 96 A.D. 2d 662, 466 N.Y.S. 2d 504 (3rd Dept. 1983).

Finally, Plaintiff’s fourth cause of action (unjust enrichment) based upon Defendant’s alleged promises to pay for one-half of Plaintiff’s legal fees and disbursements cannot be sustained. This cause of action is duplicative of the first cause of action, Moreover, Plaintiff has not alleged that it performed services outside the scope of the retainer agreement or that the benefit conferred upon Defendant exceeded that contemplated by the agreement. See, Rab Contrs., Inc. v. Stillman, 266 A.D. 2d 70, 698 N.Y.S. 2d 454 (1st Dept. 1999); and Ridgeline Constructors, Inc. v. Elmira Glass Technology Corp., 183 A.D. 2d 1041, 583 N.Y.S. 2d 633 (3rd Dept. 1992).

As to Defendant’s request for sanctions, Defendant contends that Plaintiff’s conduct in bringing and pursuing this action against him personally is frivolous within the meaning of 22 NYCRR 130-1.1 (c). Accordingly, he requests the imposition of sanctions. This request must be denied. Plaintiff has demonstrated that it has legally sustainable causes of action even it it does not ultimately prevail on the merits. Frivolous conduct is not determined upon the basis of a party being unable to sustain its claims on the trial of an action. Rather, the focus must be on whether the claim or defense presented to the Court is done so in good faith based upon the law and facts or by a reasonable extension thereof. Certainly, Plaintiff’s claim herein is prosecuted in good faith .

Accordingly, it is,

ORDERED, that the branch of Defendant’s motion to dismiss Plaintiff’s fourth cause of action is granted; and it is further,

ORDERED, that Defendant’s motion to dismiss the remaining causes of action is denied; and it is further,

ORDERED, that this matter is set down for a Preliminary Conference on February 27, 2002, at 9:15 a.m.

This constitutes the decision and Order of the Court.