ADDITIONAL CASES Balestriere Fariello, Counterclaim-Plaintiff v. Ames Ray, Counterclaim-Defendant OPINION AND ORDER This case is but another chapter in the decades-long litigation saga of Plaintiff/Counterclaim-Defendant Ames Ray (“Ray”) and his former wife, Christina Ray (“Christina”). After a prior round of hotly-contested motion practice and protracted discovery, Ray seeks summary judgment as to his breach of fiduciary duty claim against his former attorneys — John G. Balestriere (“Balestriere”), the law firm Balestriere Fariello (“BF,” and with Balestriere, the “BF Parties”), and John Does 1-5 (collectively, “Defendants”)1 — as well as dismissal of BF’s counterclaims for breach of contract and account stated. Conversely, Defendant/Counterclaim-Plaintiff BF seeks summary judgment on its account stated counterclaim, and the BF Parties jointly seek dismissal of Ray’s claims for breach of fiduciary duty, violations of New York Judiciary Law (“JL”) §487, and conversion. In brief, Ray alleges that Defendants, who represented him in filing a fraudulent conveyance action against Christina in New York State Supreme Court, (i) failed to advise him of a conflict of interest that arose when it became likely that the state court judge would impose sanctions on both Ray and Defendants, (ii) pursued their own interests at the expense of Ray’s, despite purporting to represent him, and (iii) improperly withheld Ray’s litigation file following BF’s termination as Ray’s counsel. The BF Parties counter that no conflict of interest existed between Ray and BF and, instead, that Ray has improperly refused to pay BF $66,860.61 in accrued legal fees arising from the fraudulent conveyance action. For the reasons that follow, the Court denies both motions for summary judgment as to Ray’s breach of fiduciary duty claim and BF’s account stated claim; grants Ray’s motion as to BF’s breach of contract counterclaim; grants the BF Parties’ motion as to Ray’s JL §487 claim; and denies the BF Parties’ motion as to Ray’s conversion claim. BACKGROUND2 A. Undisputed Factual Background 1. Litigation History and Defendants’ Representation of Ray In 1998, Ray commenced a lawsuit against Christina for alleged breaches of promissory notes and contracts (the “1998 Action”). (BF 56.1 1). Ray was represented by Peter Alkalay (“Alkalay”) of McLaughlin & Stern, LLP in the 1998 Action. (Id. at 2). The trial court dismissed the 1998 Action, but on appeal the Appellate Division, First Department reversed and reinstated Ray’s complaint against Christina. (BF 56.1 6; Pl. Counter 56.1 6). In late September 2010, Ray retained BF to represent him in a lawsuit against Christina in which he alleged that she had made a series of fraudulent conveyances to her counsel and her business consulting company to avoid paying Ray at least $974,610.70 she owed him (the “First Fraudulent Conveyance Action”). (Pl. 56.1 1; BF 56.1 3; BF Counter 56.1 82). The First Fraudulent Conveyance Action was captioned Ray v. Ray, Index No. 652314/2010 (N.Y. Sup. Ct.), and proceeded before Justice Charles E. Ramos. (Pl. 56.1 2). The retainer agreement between BF and Ray in the First Fraudulent Conveyance Action stated in relevant part: “I [Balestriere] understand that Peter Alkalay, Esq., will continue as your litigation counsel and that I will be consulting with Charles J. Moxley, Jr., Esq. ["Moxley"], behind the scenes on a confidential basis. Charles Moxley will research the fraudulent conveyance issues and report to me on them.” (BF 56.1 5). During oral argument in the First Fraudulent Conveyance Action on April 28, 2011, Justice Ramos indicated that he intended to dismiss the case (Pl. 56.1 3), which he then did on July 14, 2011 (BF 56.1 7). In discussions with Ray regarding Justice Ramos’s decision in the First Fraudulent Conveyance Action, Balestriere wrote that “now we have seen that it is not only [a tough claim], but that Justice Ramos doesn’t like this case and that he even considers it brought in bad faith.” (Pl. 56.1 4). Accordingly, Balestriere recommended against appealing the decision, going so far as to say that it would be difficult for him to continue representing Ray in the matter if the case were returned to Justice Ramos following a successful appeal. (BF Counter 56.1
4-6; see also Pl. Counter 56.1 68). Specifically, Balestriere warned Ray: “I cannot put myself and my firm at the reputational risk when I am still in my 30s of having the judge practically promise that he will sanction me if I proceed.” (Pl. 56.1 5). Nevertheless, Ray decided to proceed with the appeal of Justice Ramos’s decision, and BF continued to represent him. (Id. at 7). The First Department affirmed the dismissal. (Id.; BF 56.1 7). See Ray v. Ray, 970 N.Y.S.2d 9 (1st Dep’t 2013). Following the dismissal of the First Fraudulent Conveyance Action, Ray and Defendants discussed the prospect of filing a second fraudulent conveyance lawsuit based on additional information Ray had ostensibly learned about Christina’s transfer of funds to her consulting company, Guarnerius Management, LLC (“Guarnerius”). (Pl. 56.1 8; BF 56.1 8). On July 15, 2013, after evaluating the potential claim, Defendants advised Ray that they believed he had “a meritorious suit.” (BF 56.1 8). However, Defendants also told Ray that if the case were filed in state court it would likely be assigned to Justice Ramos, who would probably view the matter unfavorably, dismiss the case, and impose sanctions against Ray and Defendants. (Id.; see also Pl. 56.1
