To Be Argued By:
Harris J. Zakarin
New York County Clerk’s Index No. 114 722/02
New York Supreme Court
APPELLATE DIVISION FIRST DEPARTMENT
RALPH H. SPEKEN, M.D. and STEPHANIE Z. SPEKEN, M.S.,
Plaintiffs-Appellants,
against
THOMAS R. MOORE, EsQ.,
Defendant-Respondent.
BRIEF FOR DEFENDANT-RESPONDENT
RIVKIN RADLER, LLP
Attorneys for Defendant-Respondent
EAB Plaza
Uniondale, New York 11556-011
516-357-3000
TABLE OF CONTENTS
TABLE OF AUTHORITIES……………………………………………………………………………………..4
PRELIMINARY STATEMENT…………………………………………………………………………………8
QUESTIONS PRESENTED……………………………………………………………………………………..10
WHETHER SUPREME COURT PROPERLY
GRANTED DEFENDANT’S MOTION TO DISMISS
PLAINTIFFS’ COMPLAINT?…………………………………………………………………………10
WHETHER SUPREME COURT PROPERLY
DECLINED TO AWARD PUNITIVE DAMAGES?…………………………………………..10
STATEMENT OF FACTS……………………………………………………………………………………….10
A. Nature Of The Action…………………………………………………………………………………10
B. The Underlying Action and Settlement…………………………………………………………11
C. Plaintiffs’ Motion to Vacate The Settlement………………………………………………..16
D. Plaintiffs’ Second Action Against The Hospital…………………………………………….20
E. Commencement Of The Instant Action………………………………………………………..21
F. Defendant’s Motion to Dismiss…………………………………………………………………….22
G. Plaintiffs’ Opposition………………………………………………………………………………….23
H. Defendant’s Reply………………………………………………………………………………………24
I. Supreme Court’s Order………………………………………………………………………………..24
ARGUMENT……………………………………………………………………………………………………………27
POINT I
SUPREME COURT PROPERLY DISMISSED
PLAINTIFFS’ COMPLAINT
A. General Legal Principles……………………………………………………………………………27
B. The Complaint Was Properly Dismissed
Pursuant to CPLR 3211……………………………………………………………………………..27
C. The Doctrine of Collateral Estoppel Bars
Plaintiffs’ Complaint………………………………………………………………………………….30
D. Plaintiffs’ Claims Are Barred By Waiver And Estoppel………………………………..45
E. The Prior Judicial Determination Acknowledging
Defendant’s Entitlement To A Fee Bars Any Claim
For Legal Malpractice Or Breach Of Fiduciary Duty……………………………………47
F. The Duplicative Causes Of Action Require Dismissal……………………………………49
POINT II
PLAINTIFFS ARE NOT ENTITLED TO PUNITIVE
DAMAGES…………………………………………………………………………………………………….50
CONCLUSION………………………………………………………………………………………………………….53
TABLE OF AUTHORITIES
CASES
Altamore v. Friedman, 193 A.D.2d 240, 602 N.Y.S.2d 894 (2d Dep’t 1993),
appeal dismissed…………………………………………………………………………………………………………..47
Arnav Industries, Inc. Retirement Trust v. Brown, Raysman, Millstein
Felder & Steiner, L.L.P., 96 N.Y.2d 300, 727 N.Y.S.2d 688 (2001)…………………………………..27
Bartkowski v. Friedman, 213 A.D.2d 873, 623 N.Y.S.2d 946 (3d Dep’
1995)………………………………………………………………………………………………………………………35,43
Beattie v. Brown & Wood, 243 A.D.2d 395, 663 N.Y.S.2d 199 (1st Dep’t
1997), appeal denied, 92 N.Y.2d 802, 677 N.Y.S.2d 72 (1998
(Lunney……………………………………………………………………………………………………………………..46
Between the Bread Realty Corp. v. Salans, Hertzfeld, Heilbronn, Christy &
Viener, 290 A.D.2d 380, 736 N.Y.S.2d 666 (1st Dep’t), appeal denied,
98 N.Y.2d 603, 745 N.Y.S.2d 502 (2002)………………………………………………………………………49
Black v. White & Case, 280 A.D.2d 407, 721 N.Y.S.2d 44 (1st Dep’t),
appeal denied, 96 N.Y.2d 714, 729 N.Y.S.2d 442 (2001)………………………………………………..35
Broad v. Conway, 675 F. Supp. 768 (N.D.N.Y. 1987), affd, 849 F.2d 1467
(2dCir.), cert. denied, 488 U.S. 927, 109 S. Ct. 313 (1988)………………………………………….. 45
CIS Air Corp. v. Express One International Inc., 298 A.D.2d 317, 748
N.Y.S.2d 501 (1st Dep’t 2002)……………………………………………………………………………………51
Chisholm-Ryder Co., Inc. v. Sommer & Sommer, 78 A.D.2d 143, 434
N.Y.S.2d 70 (4th Dep’t 1980)…………………………………………………………………………………….48
Conte v. City of New York, 294 A.D.2d 109, 741 N.Y.S.2d 403 (1st Dep’t
2002)………………………………………………………………………………………………………………………28
Excel Graphics Technologies, Inc. v. CFG/AGSCB 75 Ninth Ave., L.L.C.,
___ A.D.2d ___, 767 N.Y.S.2d 99(1st Dep’t 2003)……………………………………………………..28
Fekete v. GA Ins. Co. of New York, 279 A.D.2d 300, 719 N.Y.S.2d 52 (1st
Dep’t 2001)………………………………………………………………………………………….51
Frank v. DaimlerChrysler Corp., 292 A.D.2d 118, 741 N.Y.S.2d 9 (1st
Dep’t), appeal denied, 90 N.Y.2d 502, 752 N.Y.S.2d 589 (2002)……………….27
Hubbell v. Trans World Life Ins. Co., 50 N.Y.2d 899, 430 N.Y.S.2d 589
(1980)………………………………………………………………………………………………….50
Hutt v. Kanterman & Taub, P.C., 280 A.D.2d 379, 720 N.Y.S.2d 781 (1st
Dep’t), appeal denied, 96 N.Y.2d 713, 729 N.Y.S.2d 440 (2001)……………….49
Jaslow v. Pep Boys-Manny, Moe & Jack, 279 A.D.2d 611, 719 N.Y.S.2d
881 (2d Dep’t 200l)……………………………………………………………………………….28
John Grace & Co.. Inc. v. Tunstead, Schechter & Torre, 186 A.D.2d 15, 588
N.Y.S.2d 262 (1st Dep’t 1992)……………………………………………………………….48
Jung v. Gemmette, 249 A.D.2d 827, 671 N.Y.S.2d 862 (3d Dept’), appeal
denied, 92 N.Y.2d 807, 678 N.Y.S.2d 593 (1998)……………………………………..35
Kirsh v. City of New York, ___ A.D.2d ___, 768 N.Y.S.2d 819 (1st Dep’t
2003)…………………………………………………………………………………………………..28
Knolls Cooperative Section No. 2. Inc. v. Evans Development Corp., 169
A.D.2d 690, 565 N.Y.S.2d 489 (1st Dep’t 1991)……………………………………..51
Lefkowitz v. Schulte, Roth & Zabel, 279 A.D.2d 457, 718 N.Y.S.2d 859 (2d
Dep’t), appeal denied, 96 N.Y.2d 719, 733 N.Y.S.2d 371 (2001)……………….47
Levine v. Lacher & Lovell-Taylor, 256 A.D.2d 147, 681 N.Y.S.2d 503 (1st
Dep’t 1998)………………………………………………………………………………………….49
Lunney & Crocco v. Wolfe, 243 A.D.2d 348, 663 N.Y.S.2d 164 (1st Dep’t
1997)…………………………………………………………………………………………………..46
Marie Piping, Inc. v. Marie, 271 A.D.2d 507, 705 N.Y.S.2d 684 (2d Dep’t
2000)…………………………………………………………………………………………………..27
Misek-Falkoffv. American Lawyer Media, Inc., 300 A.D.2d 215, 752
N.Y.S.2d 647 (1st Dep’t 2002), appeal denied, 100 N.Y.2d 508, 764
N.Y.S.2d 385 (2003)…………………………………………………………………………….41
Morone v. Morone, 50 N.Y.2d 481, 429 N.Y.S.2d 592 (1980)………………………….27
National Broadcasting Co., Inc. v. Fire Craft Services, Inc., 287 A.D.2d 408,
731 N.Y.S.2d 722 (1st Dep’t 2001)……………………………………………………….50
New York Community Bank v. Snug Harbor Square Venture, 299 A.D.2d
329, 749 N.Y.S.2d 170 (2d Dep’t 2002)…………………………………………………28
Prote Contracting Co., Inc v. Board of Education, 276 A.D.2d 309, 714
N.Y.S.2d 36 (1st Dep’t 2000)……………………………………………………………….50
Rocanova v. Equitable Life Assurance Society, 83 N.Y.2d 603, 612
N.Y.S.2d 339 (1994)……………………………………………………………………………50
Roth v. Goldman, 254 A.D.2d 405, 679 N.Y.S.2d 92 (2d Dep’t 1998)……………..27
Rubens v. Tintle, 258 A.D.2d 385, 683 N.Y.S.2d 854 (1st Dep’t 1999)……………28
Ryan v. New York Telephone Co., 62 N.Y.2d 494, 478 N.Y.S.2d 823
(1984)………………………………………………………………………………………………41
Sage Realty Corp. v. Proskauer Rose, LLP, 251 A.D.2d 35, 675 N.Y.S.2d
14 (1st Dep’t 1998)…………………………………………………………………………..49
Schwarz v. Shapiro, 202 A.D.2d 187, 608 N.Y.S.2d 210 (1st Dep’t), appeal
denied, 83 N.Y.2d 760, 616 N.Y.S.2d 15 (1994)……………………………………35
Scott v. Bell Atlantic Corp., 282 A.D.2d 180, 726 N.Y.S.2d 60 (1st Dep’t
2001), appeal granted in part, 97 N.Y.2d 698, 739 N.Y.S.2d 95, and
aff’d in part and modified in part. sub. nom., Goshen v. Metropolitan
Life, 98 N.Y.2d 314, 746 N.Y.S.2d 858 (2002)……………………………………..28
Sei Young Choi v. Dworkin, 230 A.D.2d 780, 646 N.Y.S.2d 531 (2d Dep’t),
appeal denied, 89 N.Y.2d 805, 658 N.Y.S.2d 918 (1996)………………….35,42
Skillgames. LLC v. Brody, ___ A.D.2d ___, 767 N.Y.S.2d 418 (1st Dep’t
2003)………………………………………………………………………………………………….27
Speken v. Columbia Presbyterian Medical Center, 278 A.D.2d 154, 71
N.Y.S.2d 543 (1st Dep’t 2000)……………………………………………………………..44
Summit Solomon & Feldsman v. Matalon, 216 A.D.2d 91, 627 N.Y.S.
690 (1st Dep’t), appeal denied, 86 N.Y.2d 711, 635 N.Y.S.2d 9
(1995)…………………………………………………………………………………………………47
Teitler v. Max J. Pollack & Sons, 288 A.D.2d 302, 733 N.Y.S.2d 122
(2d Dep’t 2001)…………………………………………………………………………………..28
Vavolizza v. Krieger, 33 N.Y.2d 351, 352 N.Y.S.2d 919 (1974)……………………..42
PRELIMINARY STATEMENT
In this action for, inter alia, legal malpractice, defendant-respondent Thomas R. Moore, Esq. (“defendant”) submits this brief in opposition to the appeal by plaintiffs-appellants Ralph H. Speken, M.D. and Stephanie Z. Speken, M.S. (“plaintiffs”), from an order of Supreme Court, New York County (Tolub, J.), dated April 15, 2003, which granted defendant’s motion to dismiss the complaint.
As will be demonstrated below, Supreme Court properly dismissed plaintiffs’ complaint in its entirety. As the record reflects, the gravamen of plaintiffs’ complaint is their dissatisfaction with the settlement that they voluntarily entered into in an underlying medical malpractice/wrongful death action in which defendant served as their attorney. After an unsuccessful motion to vacate the settlement and an unsuccessful attempt to commence a second action against the underlying tortfeasor, plaintiffs commenced the instant action against their former attorney. Similar to their earlier attempts to undo the settlement, plaintiffs, in the instant action, allege that the settlement was the product of coercion and duress on the part of defendant. These allegations were fully explored and rejected in connection with their motion to vacate the settlement. Accordingly, the instant action is barred by the doctrine of collateral estoppel.
Moreover, inasmuch as plaintiffs voluntarily entered into the stipulation and stated, under oath in open court and on a transcribed record, that they fully understood and did not object to the terms of the settlement, they waived any arguments that the settlement was anything other than a product of their own free will. Finally, as will also be set forth below, as plaintiffs failed to allege any conduct that was directed at the public generally, they are not entitled to punitive damages.
Accordingly, the order of Supreme Court, New York County (Tolub, J.), should be affirmed, with costs.
QUESTIONS PRESENTED
WHETHER SUPREME COURT PROPERLY
GRANTED DEFENDANT’S MOTION TO DISMISS
PLAINTIFFS’ COMPLAINT?
This question should be answered in the affirmative.
WHETHER SUPREME COURT PROPERLY
DECLINED TO AWARD PUNITIVE DAMAGES?
This question should be answered in the affirmative.
STATEMENT OF FACTS
A. Nature Of The Action
This action for, inter alia, legal malpractice against defendant-respondent Thomas R. Moore (“defendant”) arises out of defendant’s representation of plaintiffs-appellants Ralph H. Speken, M.D. and Stephanie Z. Speken, M.S. (“plaintiffs”) in connection with an underlying medical malpractice/wrongful death action against Columbia Presbyterian Hospital (the “Hospital”) on behalf of their deceased son, Seth Speken. After plaintiffs agreed to settle the underlying action, they subsequently moved to vacate the settlement premised on allegations that defendant coerced them into settlement. Following the denial of that motion and the dismissal of a subsequent action against the Hospital, plaintiffs commenced the instant action against defendant.
B. The Underlying Action And Settlement
As alleged in the underlying complaint, the Hospital was negligent in its care and treatment of Seth Speken, plaintiffs’ son, resulting in his death on August 27, 1993. Seth Speken was admitted to the Hospital on August 21, 1993 as a psychiatric patient following a seizure episode. He suffered from Crohn’s disease, panic attacks and depression. Plaintiff Ralph Speken, plaintiffs father and a medical doctor, also treated his son’s panic disorders. While at the Hospital, Seth Speken allegedly became delusional and was placed in wrist and ankle restraints. He subsequently developed an embolism that caused his death.
Thereafter, plaintiffs retained defendant to commence a wrongful death action against the Hospital and, on or about October 11, 1994, an action was commenced. The Hospital counterclaimed, seeking indemnification and/or contribution, alleging that it was Ralph Speken’s own negligence in the treatment of his son that ultimately caused his son’s death.
At some point, plaintiffs created and began operating a website located at www.med-malpractice.com, titled “A Death in the Hospital.” The website recounts plaintiffs’ version of the facts and allegations of malpractice against the Hospital, its personnel, physicians and nurses involved in Seth Speken’s treatment.
After five years of litigation, the underlying action reached settlement. On July 8, 1999, plaintiffs and the Hospital executed a settlement, the terms of which were incorporated into a General Release. In addition, the terms of the settlement were transcribed and plaintiffs, on the record in open court, advised that they understood the terms of the settlement, that the settlement was voluntary and that it was not coerced. The settlement included the payment of $500,000 by the Hospital, complete confidentiality and the exchange of mutual releases.
In addition, the settlement also required plaintiffs to dismantle their website and refrain from creating any similar websites. In particular, the General Release provided that:
The Releasors agree that they shall
immediately and permanently expunge their
website located at www.med-
malpractice.com and shall not reissue, open
or create another Internet accessible site or
website concerning the allegations in this
lawsuit, the personnel, physicians, nurses
and hospital involved and/or the medical
care and treatment rendered to the decedent
by the defendant and its medical staff
In addition, in open court, plaintiffs both agreed that they voluntarily entered into the settlement. The court first questioned Ralph Speken as follows:
Q: Dr. Speken, do you understand the
terms of the settlement?
A: Yes.
Q: And do you agree to these terms, sir?
A: Yes.
Q: And do you understand, as your
attorney just indicated, that the full sum of
the settlement is $500,000 from which there
will be a reduction first of any
disbursements which were laid out on your
behalf by your counsel, and then the sum
will be reduced by your agreement that you
have with [defendant] in terms of his
retainer, and the balance will go to you?
A: Yes.
Q: Do you have any questions about that
financial arrangement at this point?
A: No.
Q: And, sir, are you doing this of your
own free will?
A: Yes.
Q: Has anybody forced you into this?
A: No.
Q: And have you taken any type of
medication or alcohol today that would have
in any way affected your judgment in
making this decision?
A: No
Q: Have you read what is referred to as
the General Release, sir, and is that your
signature on page 3?
A: Yes, it is.
Q: And do you have any questions with
regard to this release, sir?
A: No.
The court then questioned Stephanie Speken as follows:
Q: Mrs. Speken, do you understand the
financial agreement as your attorney has put
it on the record?
A: Yes.
Q: And you understand that from the
sum of $500,000 there will be a reduction of
disbursements and then attorney’s fees?
A: Yes.
Q: And have you entered into this
agreement of your own free will?
A: Yes.
Q: And have you taken any medication
or alcohol which would in any way affect
your judgment today?
A: No.
Q: Do you have any questions
whatsoever with regard to this settlement?
A: No.
Q: And did you read this General
Release, ma’am?
A: Yes.
Q: And is this your signature on page 3
of the General Release?
A: It is.
Q: And do you have any questions at all
with regard to this document?
A: No.
Finally, to again insure that plaintiffs did not have any questions regarding the settlement, the court inquired as follows:
Q: And I ask each of you again if there
are any questions with regard to either the
General Release which you have signed or
the settlement itself?
Dr. Speken: No.
Mrs. Speken: No.
Q: And you understand there is a
confidentiality agreement here with regard
to this incident in this hospital?
Mrs. Speken: Yes.
Q: Do you understand that, sir?
Dr. Speken: Yes.
C. Plaintiffs’ Motion To Vacate The Settlement
Despite the fact that plaintiffs acknowledged that they read and understood the terms of the settlement and that they entered into the settlement voluntarily, by notice of motion dated October 24, 1999, plaintiffs moved to vacate the settlement and defendant’s attorney’s fee lien, maintaining that the settlement was procured by fraud. Plaintiffs apparently had second thoughts about agreeing to confidentiality and dismantling their website and claimed that defendant coerced them into entering into the settlement.
Specifically, in support of their motion, plaintiffs maintained that they “had no choice but to accept the agreement [defendant] and’ the [H]ospital had worked out” because, according to plaintiffs, defendant told them that “if they refused to sign the agreement, he would immediately resign from the case” and that the case
would immediately go to trial and that the Hospital would immediately bring a defamation suit. In addition, plaintiffs also maintained that, absent coercion, they never would have agreed to refrain from “talking about what the [H]ospital had done.”
By decision and order dated March 31, 2000, Supreme Court, New York County (Heitler, J.) fully explored plaintiffs’ allegations and denied plaintiffs’ motion to vacate the settlement. The court specifically noted that the stipulation of settlement was preceded by the in-person testimony of both plaintiffs, who each agreed to the terms of the stipulation under oath. The court also noted that both plaintiffs executed the General Release, which specifically incorporated the terms of the settlement. The court explicitly found that the stipulation was not the product of fraud, duress or coercion.
Specifically, Supreme Court held that:
[A] review of the record discloses no
competent evidence of fraud, duress or other
cause sufficient to invalidate this settlement.
…Rather, it is clear that, at the time that
the stipulation was made, plaintiffs were
represented by counsel, knowingly and
voluntarily entered into the stipulation in
open court, and indicated that they were
satisfied with the agreement and that their
judgment was not impaired that day
Supreme Court further emphasized that plaintiffs could not prove any of their allegations of fraud. In particular, the court noted that:
Plaintiffs admit that they have no direct
proof that [defendant], or anyone else,
coerced them into signing the General
Release….
Moreover, it is clear that plaintiffs were
intimately involved in the settlement
process, and were represented at all times by
an attorney of their own choosing. These
circumstances do not constitute coercion or
duress…. Plaintiffs, who are both educated
and sophisticated individuals, personally
attended and participated in virtually all of
the eight settlement conferences held by this
Court….
In addition, plaintiffs clearly and
unequivocally testified in open court that
their decision to settle the case was made of
their own free will, and that they were not
forced to do so by anyone. It is thus clear
that plaintiffs’ decision to settle this case
was their own, and not [defendant’s]. .
Although plaintiffs also contend that their
fear that trial would begin immediately
spurred them to sign the General Release, a
court’s direction that the parties proceed to
trial does not constitute coercion or duress,
since courts have inherent power to control
their calendars and the disposition of court
business. . Plaintiffs further allege that the deceptive
actions of [defendant], designed for his own
financial gain, constitute fraud. Plaintiffs’
claim of fraud, however, is insufficient for
vacatur of this settlement….
Supreme Court continued, finding that plaintiffs did not establish coercion on the part of defendant and also finding that the explicit language of the General
Release refuted any claim that plaintiffs were coerced into agreeing to dismantling their website. The court found that:
Plaintiffs have not established that their
agreement to settle this case was procured
by fraud or coercion. If [defendant] had
threatened to resign if they did not accept
the settlement, that would not have trapped
plaintiffs into accepting an unwanted
settlement. Said information should have
been put before the court when a record was
being made re the settlement. [Plaintiffs]
were under oath and had the opportunity and
obligation to advise the court at that time
that they did not want to settle and/or that
they were under duress….
Plaintiffs also contend that they would never
have agreed to refrain from “talking about
what the [H]ospital had done” had their will
not been “overcome”. . . . However, the
clear wording of the General Release, which
both plaintiffs signed, and which both
plaintiffs testified that they had no questions
about, clearly prevented them from
publishing or continuing to publish their
version of the Hospital’s deficiencies in its
treatment of Seth Speken on their website
Finally, the court also rejected any claim that defendant’s lien should be vacated and specifically noted that the attorney fee in this action was established at a maximum of $137,500.
On appeal, this Court affirmed the denial of plaintiffs’ motion to vacate the settlement. See, Speken v. Columbia Presbyterian Medical Center, 278 A.D.2d 154, 717 N.Y.S.2d 543 (1st Dep’t 2000).
D. Plaintiffs’ Second Action Against The Hospital
Notwithstanding their unsuccessful attempt to vacate the settlement in their first litigation against the Hospital, plaintiffs commenced a second action, in which they sought to relitigate the validity of the settlement agreement and its confidentiality provisions. Plaintiffs alleged that the confidentiality provisions of the website, particularly the discontinuance of the website, was void as illegal because it required them to remain silent about what they characterized as a crime – – the reckless endangerment of their son. Plaintiffs also alleged that the confidentiality provisions were void as against public policy because “the right of the public to know about medical malpractice supercedes [the Hospital’s] right to enforcement” of the confidentiality provisions.
The Hospital moved to dismiss the second action, maintaining that the action was barred by res judicata because the validity of the settlement agreement was addressed in the first action.
By order dated March 8, 2002, Supreme Court, New York County (Bransten, J.), granted the Hospital’s motion to dismiss. In particular, the court held that:
[R]es judicata precludes [plaintiffs] from
maintaining this cause of action, which is
asserted against the same party and raises
the same issues and transactions as their
1999 action. [Plaintiffs] had an opportunity
to fully litigate, and indeed did fully litigate,
the validity of the settlement agreement. In
fact, [plaintiffs] concede that they raised the
very issues that are the subject of this action
in their earlier action before Justice Heitler.
If [plaintiffs] believed that in its March 2000
decision the court overlooked the issue of
whether the settlement agreement violated
public policy, their remedy was to seek
reargument or raise the issue on appeal in a
timely manner. Res judicata, however,
precludes them from bringing this second
action based on matters that the parties
litigated in the prior action
E. Commencement Of The Instant Action
By summons and complaint dated June 28, 2002, plaintiffs commenced the instant action against defendant. Despite the fact that the issue of the settlement had already been litigated twice, plaintiffs alleged that defendant coerced them into settlement and told them that they had no choice but to accept the settlement and to sign the General Release. They alleged that they felt “helpless and betrayed” and “ultimately succumbed to defendant’s duress, threats, intimidation, lies, false representations and coercion and informed the Trial Court in the Medical Malpractice Action that they accepted the settlement negotiated by defendant and had voluntarily executed general releases”. Plaintiffs also alleged that, but for defendant’s fraudulent and false promises, they would not have entered into the settlement agreement. Based on these allegations, plaintiffs asserted four causes of action. The causes of action sound in fraud, breach of fiduciary duty, breach of contract and legal malpractice.
Plaintiffs alleged damages representing the amount of the settlement and also sought punitive damages.
F. Defendant’s Motion To Dismiss
By notice of motion dated August 2, 2002, defendant moved, pursuant to CPLR 3211 (a) (1), (5) and (7), to dismiss the complaint. Defendant maintained that plaintiff, who had twice asserted similar claims regarding the settlement agreement, should be collaterally estopped from bringing an action against defendant based on the same allegations. In particular, defendant argued that the instant complaint contained factual claims of fraud, duress and coercion that were previously raised and rejected in the prior lawsuits against the Hospital. As such, defendant argued that the relitigation of these claims is barred by the doctrine of collateral estoppel. Similarly, defendant maintained that, since a determination had been made that he was entitled to his lien for legal fees, plaintiffs’ cause of action for legal malpractice required dismissal.
In addition, defendant argued that plaintiffs waived any issues regarding the procurement of the settlement since they expressly stated that it was entered into voluntarily and that the General Release explicitly incorporated the confidentiality provision and mandated the dismantling of the website. Defendant also argued that plaintiffs failed to set forth any facts that would entitle them to punitive damages. In addition, to the extent that plaintiffs sought damages for “anguish, aggravation and mental suffering” arising from defendant’s alleged legal malpractice, defendant argued that such items of damages are not recoverable in a cause of action for legal malpractice.
G. Plaintiffs’ Opposition
Plaintiffs opposed defendant’s motion to dismiss. Plaintiffs maintained that the doctrine of collateral estoppel does not preclude the instant action because Justice Heitler’s findings in the earlier litigation regarding defendant’s actions in procuring the settlement agreement were “gratuitous.”
In addition, plaintiff attacked the findings in the earlier litigation, maintaining that Justice Heitler’s reasoning was “circular and . . . totally incorrect.”
Plaintiffs further argued that they stated a valid claim for punitive damages.
H. Defendant’s Reply
Defendant replied, maintaining that plaintiffs failed to establish that they did not have a full and fair opportunity to litigate the issue of the voluntariness of their consent to the settlement agreement. In addition, defendant maintained that Justice Heitler’s findings that the settlement was knowingly and voluntarily consented to by plaintiffs were central to that decision and not merely “gratuitous.”
Finally, defendant maintained that plaintiffs failed to support any entitlement to punitive damages.
I. Supreme Court’s Order
By decision and order dated April 15, 2003, Supreme Court, New York County (Tolub, J.), granted defendant’s motion and dismissed plaintiffs’ complaint.
After reviewing the factual and procedural history of the case, Supreme Court determined that plaintiffs’ claims are barred. In particular, the court held that:
The gravamen of Plaintiffs’ Complaint
involves claims of fraud, breach of fiduciary
duty, breach of contract, negligence and
legal malpractice. Although plaintiffs
contend that the instant complaint is not
barred by the doctrine of res judicata, the
allegations contained within the Complaint,
most notably within the first and second
causes of action, admittedly arise directly
from the settlement of the original
malpractice action. Consequently, all of
plaintiffs’ claims made in the instant matter
have either already been litigated or could
have been litigated in the actions brought
before Justice Heitler and Justice Bransten.
Accordingly, the doctrine of res judicata
bars further claims on these issues.
Supreme Court further determined that, even if res judicata did not bar the legal malpractice or breach of contract claims, dismissal was still required. The court determined that plaintiffs’ fourth cause of action alleging negligence and legal malpractice was contained within the third cause of action. As such, the court dismissed the fourth cause of action as duplicative of the third cause of action.
Regarding the legal malpractice claim, Supreme Court found that defendant, who was hired to represent them in connection with an action against the Hospital, performed his duties. In particular, the court held that:
Plaintiffs hired defendant to represent them
in connection with the original malpractice
action against the Hospital. Defendant
prepared the case for trial, obtained
additional trial counsel, and when trial
counsel withdrew, obtained new trial
counsel. Defendant then facilitated
settlement negotiations and succeeded in
obtaining a $500,000 settlement in favor of
the plaintiffs conditioned on the dismantling
of plaintiffs’ website. The primary goal of
defendant’s engagement was to represent
plaintiffs’ action and in a best case scenario,
obtain a judgment in favor of the plaintiffs.
This, in fact, was accomplished when a
settlement agreement was reached. That
plaintiffs have not been able to collect the
settlement amount due to their own failure
to comply with the terms of the settlement
agreement is not evidence of either legal
malpractice or breach of contract on the part
of defendant. Accordingly, as plaintiffs
have not made the requisite showing
indicating either negligence or breach of
contract, plaintiffs’ third cause of action is
dismissed
As a final note, Supreme Court admonished plaintiffs, warning them to refrain from bringing any further lawsuits. The court stated that:
Lastly, this Court is cognizant of the tragic
nature of plaintiffs’ loss. However, as
frustrating as it may seem, future claims
made on a matter that has been fully
litigated, no matter how unique the theory,
will be barred under the doctrine of res
judicata, and may result in sanctions for
costs
Plaintiffs appeal.
ARGUMENT
POINT I
SUPREME COURT PROPERLY DISMISSED
PLAINTIFFS’ COMPLAINT
A. General LegaI Principles
On a motion to dismiss pursuant to CPLR 3211(a) (7) for failure to state a cognizable cause of action, the pleading is to be afforded a liberal construction.
The facts alleged in the complaint are accepted as true, the plaintiff is accorded the benefit of every possible favorable inference and the only determination is whether the facts alleged fit within any cognizable theory. See, Amav Industries, Inc.
Retirement Trust v. Brown, Raysman. Millstein, Felder & Steiner, L.L.P., 96 N.Y.2d 300, 303, 727 N.Y.S.2d 688 (2001); Morone v. Morone, 50 N.Y.2d 481, 484, 429 N.Y.S.2d 592 (1980); Skillgames. LLC v. Brody, ___ A.D.2d ___, 767 N.Y.S.2d 418, 421 (1st Dep’t 2003); Frank v. DaimlerChrvsler Corp., 292 A.D.2d 118, 120-21, 741 N.Y.S.2d 9 (1st Dep’t), appeal denied 90 N.Y.2d 502, 752 N.Y.S.2d 589 (2002); Marie Piping, Inc. v. Marie, 271 A.D.2d 507, 705 N.Y.S.2d 684 (2d Dep’t 2000); Roth v. Goldman, 254 A.D.2d 405, 406, 679 N.Y.S.2d 92 (2d Dep’t 1998).
Pursuant to CPLR 3211 (a) (1), where the documentary evidence flatly contradicts the factual claims asserted in the complaint, the entitlement to the presumption of truth and the favorable inferences are rebutted. Under such circumstances, where the documentary evidence that forms the basis of the defense resolves all factual issues as a matter of law and conclusively disposes of the plaintiffs claim, dismissal of the complaint is warranted pursuant to CPLR 3211 (a) (1). See, Excel Graphics Technologies, Inc. v. CFG/AGSCB 75 Ninth Ave., L.L.C., ___ A.D.2d ___, 767 N.Y.S.2d 99, 102 (1st Dep’t 2003); New York Community Bank v. Snug Harbor Square Venture, 299 A.D.2d 329, 749 N.Y.S.2d 170 (2d Dep’t 2002); Teitler v. Max J. Pollack & Sons, 288 A.D.2d 302, 733 N.Y.S.2d 122 (2d Dep’t 2001); Scott v. Bell Atlantic Corp., 282 A.D.2d 180, 183, 726 N.Y.S.2d 60 (1st Dep’t 2001), appeal granted part, 97 N.Y.2d 698, 739 N.Y.S.2d 95 and affd in part and modified in part sub. nom., Goshen v. Metropolitan Life, 98 N.Y.2d 314, 746 N.Y.S.2d 858 (2002); Jaslow v. Pep Boys- Manny, Moe & Jack, 279 A.D.2d 611, 612, 719 N.Y.S.2d 881 (2d Dep’t 2001).
CPLR 3211(a) (5) provides that a cause of action may be dismissed because of, among other things, collateral estoppel and res judicata. Where a party has had a full and fair opportunity to litigate issues in a prior action, the complaint will be dismissed pursuant to CPLR 3211(a) (5) based on collateral estoppel See Kirsh v. City of New York, ___ A.D.2d ___, 768 N.Y.S.2d 819 (1st Dep’t 2003); Conte v. City of New York, 294 A.D.2d 109, 741 N.Y.S.2d 403 (1st Dep’t 2002); Rubens v. Tintle, 258 A.D.2d 385, 683 N.Y.S.2d 854 (1st Dep’t 1999).
Application of the foregoing principles reveals that Supreme Court properly dismissed plaintiffs’ complaint.
B. The Complaint Was Properly Dismissed Pursuant To CPLR 3211
At the outset, plaintiffs argue that because the pleading requirements for each of their causes of action were met, Supreme Court erred in dismissing their complaint. Plaintiffs, however, ignore the fact that defendant’s motion to dismiss was not merely based on a failure to state a cause of action pursuant to CPLR 3211
(a) (7). Rather, the motion was also premised on CPLR 3211(a) (1) and CPLR 3211(a) (5). While it is true that, on a motion to dismiss, the pleading is to be given a liberal construction, where, as here, documentary evidence is presented that flatly contradicts the factual claims asserted in the complaint, the entitlement to the presumption of truth and favorable inferences is rebutted. See, Excel Graphics Technologies, 767 N.Y.S.2d at 102; Scott, 282 A.D.2d at 183.
Contrary to plaintiffs’ argument, defendant’s motion was not merely addressed to pleading deficiencies. Rather, as will be set forth in detail below, the motion, with its inclusion of documentary evidence, established as a matter of law that plaintiffs’ complaint required dismissal based on, among other things, collateral estoppel. Accordingly, plaintiffs’ argument that Supreme Court employed an improper standard in deciding the motion is misplaced and should be rejected.
C. The Doctrine Of Collateral Estoppel Bars Plaintiffs’ Complaint
In the instant action, plaintiffs’ complaint alleges fraud, breach of contract, breach of fiduciary duty and legal malpractice. All of plaintiffs’ causes of action are premised on allegations that defendant coerced or forced plaintiffs into executing the settlement agreement. Among other things, plaintiffs alleged that defendant informed them that they had no choice but to accept the settlement and to sign the General Release because:
(a) If plaintiffs did not sign releases, the
Trial Judge would immediately “close
down” the case;
(b) The Trial Judge was “corrupt” and
therefore it was no use talking to the
Judge and trying to do so would only
‘‘make matters worse’’ for plaintiffs;
(c) Columbia Presbyterian Medical Center
intended to commence a “multi-million
dollar” defamation suit against
plaintiffs with respect to their website
related to the events alleged in the
Medical Malpractice Action;
(d) Defendant would not represent
plaintiffs in the defense of the
defamation action;
(e) Defendant would have no choice but to
resign from the Medical Malpractice
Action if plaintiffs did not accept the
settlement and sign general releases;
(f) For the first time, defendant stated that
the did not have the skills and was not
prepared to try the case, and that Laura
Shapiro [Columbia Presbyterian’s
attorney] would “crush me;” and
(g) Defendant had negotiated the settlement
in such a way that plaintiffs would be
able to keep their website up and
running with only “minor” changes
(such as changing the names of the
doctors)
In sum, the gravamen of plaintiffs’ complaint is that defendant coerced them into signing the General Release and is best summarized by the following paragraphs:
32. At all times relevant hereto, plaintiffs
relied in good faith on defendant’s aforesaid
advice, promises, statements and
representations, and did not know that
defendant had lied to them in a fraudulent
and deceitful attempt to induce them to
accept the settlement of the Medical
Malpractice Action.
* * * * * * *
34. But for defendant’s fraudulent and
false promises, statements and
representations, on which plaintiffs relied in
good faith, plaintiffs would not have entered
into the settlement of the Medical
Malpractice Action
The issues surrounding these very allegations, however, were already fully and fairly litigated against plaintiffs. In particular, in plaintiffs’ attempt to vacate the settlement in the underlying action, they specifically argued that they “had no choice but to accept the agreement [defendant] and the [H]ospital had worked out”
because, according to plaintiffs, defendant told them that “if they refused to sign the agreement, he would immediately resign from the case” and that the case would immediately go to trial and that the Hospital would immediately bring a defamation suit. In addition, plaintiffs also maintained that, absent coercion, they never would have agreed to refrain from “talking about what the [H]ospital had done.”
By order dated March 31, 2000, Justice Heitler denied plaintiffs’ motion to vacate the settlement and rejected any arguments that plaintiffs were coerced or forced into the settlement by defendant and found that the settlement was not the product of fraud, duress or coercion. Specifically, the court found that:
[A] review of the record discloses no
competent evidence of fraud, duress or other
cause sufficient to invalidate this settlement.
… Rather, it is clear that, at the time that
the stipulation was made, plaintiffs were
represented by counsel, knowingly and
voluntarily entered into the stipulation in
open court, and indicated that they were
satisfied with the agreement and that their
judgment was not impaired that day
The court further emphasized that plaintiffs could not prove any of their allegations of fraud, either against defendant or against anyone else. As stated by the court:
Plaintiffs admit that they have no direct
proof that [defendant], or anyone else,
coerced them into signing the General
Release…
Moreover, it is clear that plaintiffs were
intimately involved in the settlement
process, and were represented at all times by
an attorney of their own choosing. These
circumstances do not constitute coercion or
duress…. Plaintiffs, who are both educated
and sophisticated individuals, personally
attended and participated in virtually all of
the eight settlement conferences held by this
Court….
In addition, plaintiffs clearly and
unequivocally testified in open court that
their decision to settle the case was made of
their own free will, and that they were not
forced to do so by anyone. It is thus clear
that plaintiffs’ decision to settle this case
was their own, and not [defendant’s]. …
Although plaintiffs also contend that their
fear that trial would begin immediately
spurred them to sign the General Release, a
court’s direction that the parties proceed to
trial does not constitute coercion or duress,
since courts have inherent power to control
their calendars and the disposition of court
business.
Plaintiffs further allege that the deceptive
actions of [defendant], designed for his own
financial gain, constitute fraud. Plaintiffs’
claim of fraud, however, is insufficient for
vacatur of this settlement….
In addition, the court specifically noted that if plaintiffs were under duress, they had an obligation to inform the court at the time that a record was being made.
The absence of such a record, together with the absence of any other evidence of fraud, established that no fraud existed. The court held that:
Plaintiffs have not established that their
agreement to settle this case was procured
by fraud or coercion. If [defendant] had
threatened to resign if they did not accept
the settlement, that would not have trapped
plaintiffs into accepting an unwanted
settlement. Said information should have
been put before the court when a record was
being made re the settlement. [Plaintiffs]
were under oath and had the opportunity and
obligation to advise the court at that time
that they did not want to settle and/or that
they were under duress….
It is clear that plaintiffs’ current allegations of fraud, coercion and duress against defendant were fully litigated and decided against them in their underlying action. As such, the instant complaint was properly dismissed based on the doctrine of collateral estoppel. See, e.g, Black v. White & Case, 280 A.D.2d 407, 721 N.Y.S.2d 44 (1st Dep’t), appeal denied, 96 N.Y.2d 714, 729 N.Y.S.2d 442 (2001); Sei Young Choi v. Dworkin, 230 A.D.2d 780, 646 N.Y.S.2d 531 (2d Dep’t), appeal denied, 89 N.Y.2d 805, 658 N.Y.S.2d 918 (1996); Jung v. Gemmette, 249 A.D.2d 827, 671 N.Y.S.2d 862 (3d Dep’t), appeal denied, 92 N.Y.2d 807, 678 N.Y.S.2d 593 (1998); Bartkowski v. Friedman, 213 A.D.2d 873, 623 N.Y.S.2d 946 (3d Dep’t 1995); Schwarz v. Shapiro, 202 A.D.2d 187, 608 N.Y.S.2d 210 (1st Dep’t), appeal denied, 83 N.Y.2d 760, 616 N.Y.S.2d 15 (1994).
In Sei Young Choi, supra, for example, the plaintiff commenced an action to recover damages for fraud, breach of fiduciary duty and breach of contract against his former attorney. In the underlying divorce action, the plaintiffs attorney negotiated a settlement of certain property issues. Thereafter, the plaintiff moved to vacate the settlement, maintaining that his attorney induced him to accept the settlement. The motion to vacate was denied. Because the issues regarding the attorney’s actions were raised in the application to vacate the settlement, the court held that the instant action was barred by the doctrine of collateral estoppel. In particular, the Appellate Division held that:
We agree with the Supreme Court that this
action is barred by the doctrine of collateral
estoppel. . . . The plaintiffs claims
regarding his attorney s conduct were
previously raised in his application to vacate
the stipulation of settlement in the
matrimonial action, and his application was
denied on the merits. . . . Here, as in the
matrimonial action, the plaintiff claimed that
the defendant, inter alia, misled him as to his
options, induced him under duress to accept
the settlement, and failed to protect his
interests
Bartkowski, supra, presents another example. There, the plaintiff brought a malpractice action to recover damages for the defendant’s allegedly negligent legal representation in connection with a private-placement adoption. In two prior Family Court proceedings, determinations were made finding that the plaintiff failed to establish fraud, duress or coercion in the execution of the extra-judicial consent to the adoption of the child. Although the plaintiff attempted to depict the allegations of the instant complaint as different from the factual circumstances surrounding the two underlying proceedings, the Appellate Division rejected those attempts. In particular, the court held that:
Contrary to plaintiffs contention, the
essential underpinning for her present action
is a factual issue that was presented,
considered and resolved against her in the
Family Court proceedings, i.e., whether
defendant faithfully discharged his
responsibility of providing her with
competent, independent legal counsel by
fully advising her of the legal effect of the
extrajudicial consent to adoption and her
rights and liabilities thereunder, including
her right to revoke the consent within 45
days of its execution and the fact that it
would be thereafter irrevocable….
Again, in Jung, supra, the defendant was the plaintiffs attorney in connection with an underlying divorce action. The action for divorce was ultimately settled by a stipulation incorporating certain terms regarding maintenance obligations. The plaintiff indicated that he understood that the maintenance obligation was unconditional and further indicated that he entered into the stipulation voluntarily. The plaintiffs wife subsequently remarried and the plaintiff thereafter moved for an order construing the stipulation such that the maintenance obligation had terminated upon his wife’s remarriage. His motion was denied. Thereafter, the plaintiff brought an action alleging malpractice on the part of the defendant based on the wording of the stipulation and for his failure to effectuate the plaintiffs intention that his maintenance obligation would cease upon his wife’s remarriage. In reversing Supreme Court’s denial of the defendant’s motion to dismiss the complaint, the Appellate Division held that the legal malpractice action was barred by collateral estoppel. The court determined that the plaintiffs understanding of the stipulation was heard and decided in the underlying action and, therefore, could not be relitigated. The court held that:
Because we agree with defendant that the
present action is barred by the doctrine of
collateral estoppel, we are constrained to
reverse Supreme Court’s order, award
summary judgment in favor of defendant
and dismiss the complaint. As aptly
characterized by plaintiff in his brief, “the
point of plaintiffs claim is that defendant’s
malpractice caused him to be bound by an
agreement that he misunderstood and did not
intend to make. . . . In fact, that very issue
was considered by this Court on the prior
appeal and decided against plaintiff….
In Schwarz, supra, the plaintiff commenced an action seeking to rescind a letter agreement. The cause for rescission was dismissed on the basis that the plaintiff had ratified the agreement and accepted the benefits thereunder.
Following that determination, the plaintiff asserted causes of action sounding in malpractice against his attorney who drafted the letter agreements. In affirming Supreme Court’s determination that the plaintiff was precluded from asserting claims of malpractice against his former attorney, this Court noted that the prior decision precluded the plaintiff from relitigating the issue. In particular, this Court held that:
The doctrine of collateral estoppel prevents
the plaintiff from now claiming that the
agreement which he ratified and accepted
did not express his understanding.
Accordingly, the agreement cannot now
serve as the basis for a claim of malpractice
or other misdeeds on the part of the attorney
who drafted the agreement.
Additionally, we note that the plaintiff was a
sophisticated businessman and that at all
times the party with whom he contracted
insisted on certain additional benefits and
that he entered into this agreement knowing
the benefits which were to be accorded to
his partner
Black, supra, presents another example. In Black, the plaintiff commenced an action for legal malpractice based on allegations that the defendant law firm misled the plaintiff into believing that it was neutral in the preparation and negotiation of a separation agreement. As the history of the case reveals, the plaintiff retained the defendant in 1979 to draft and negotiate a prenuptial agreement and, thereafter, the defendant provided the plaintiff and his spouse with legal services for a decade until their separation in 1990. During 1991, the plaintiffs spouse contacted the defendant about a separation agreement and the defendant prepared a separation agreement, which included a statement that each party had obtained the advice of separate counsel. The plaintiffs wife commenced a divorce action in Wyoming District Court and the plaintiff consented to entry of a divorce decree incorporating the earlier separation agreement.
Two years later, the plaintiff moved in Wyoming District Court to vacate the divorce decree based, in part, on the conduct of the defendant in its representation of the plaintiffs wife and implementing the separation agreement. The Wyoming court dismissed the plaintiffs motion and that decision was affirmed by the Wyoming Supreme Court. In affirming the dismissal of the complaint in the legal malpractice action, this Court found that the specific conduct upon which the plaintiff based his motion to vacate the divorce decree was the same conduct alleged as the basis for the instant legal malpractice action. In particular, this
Court held that:
In this action, plaintiff seeks monetary
damages from White & Case based on four
causes of action consisting of breach of
fiduciary duty, breach of contract resulting
from the conflict of interest, breach of
contract resulting from breach of a duty to
use due care in advising plaintiff, and fraud.
All of these causes of action are based on
the same factual allegations which formed
the foundation for plaintiffs motion to
vacate in the Wyoming litigation. The
Wyoming court’s rejection of plaintiffs
allegation that he was unaware that White &
Case represented only [the plaintiffs wife]
in preparation and negotiation of the
separation agreement collaterally estops
plaintiff from suing White & Case
Based on the foregoing case law, it is clear that plaintiffs are collaterally estopped from asserting that the settlement was obtained by fraud, duress or coercion. Plainly, the allegations that form the basis for the instant complaint against defendant were raised and litigated in the underlying action as well as a second action against the Hospital. As such, Supreme Court properly dismissed the instant action.
Plaintiffs, however, maintain that collateral estoppel does not present an obstacle for consideration of these issues because, according to them, Justice Heitler’s findings with respect to issues of defendant’s alleged coercion were “gratuitous.” Plaintiffs argue that Justice Heitler’s findings that there was no evidence of fraud by defendant were extraneous to her ultimate determination to not vacate the settlement.
Yet, plaintiffs wholly ignore the fact that the central reason why they requested vacatur of the settlement was based on their contention that defendant coerced them into agreeing to it. Justice Heitler’s findings, therefore, were not “gratuitous.” Rather, the findings that defendant did not coerce plaintiffs were fundamental to Supreme Court’s denial of plaintiffs’ motion to vacate.
Moreover, plaintiffs ignore the central tenets of application of the collateral estoppel doctrine. Application of the doctrine precludes a party from relitigating in a subsequent action “an issue clearly raised in a prior action or proceeding and decided against that party.” Ryan v. New York Telephone Co., 62 N.Y.2d 494, 500, 478 N.Y.S.2d 823 (1984); Misek-Falkoff v. American Lawyer Media, Inc., 300 A.D.2d 215, 752 N.Y.S.2d 647 (1st Dep’t 2002), appeal denied, 100 N.Y.2d 508, 764 N.Y.S.2d 385 (2003). As fully explored above, plaintiffs clearly raised the issue of defendant’s alleged coercion in the underlying action and the issue was decided against them. Plaintiffs, therefore, are precluded from relitigating this same issue in the instant litigation.
Plaintiffs’ suggestion that an evidentiary hearing was required before preclusive effect could be given to the findings in the underlying action is also incorrect. Plaintiffs have failed to cite any legal authority to support their position.
Instead, as the examples above illustrated, the doctrine applies in circumstances similar to those present here, without the requirement of an evidentiary hearing. See, e.g., Black, 280 A.D.2d 407 (collateral estoppel precludes relitigation of issues that were decided in connection with a motion to vacate a divorce decree);
Jung, 249 A.D.2d 827 (collateral estoppel precludes relitigation of issues that were decided in connection with a motion for an order clarifying a stipulation regarding maintenance obligations); Sei Young Choi, 230 A.D.2d 780 (collateral estoppel precludes relitigation of issues that were decided in connection with a motion to vacate a settlement). To be sure, the Court of Appeals has expressly held that, “an order made upon a motion provides such a ‘judgment’ as will bar relitigation under the doctrine of res judicata or collateral estoppel so long as the requisites of identity of issue and opportunity to contest are present.” Vavolizza v. Krieger, 33 N.Y.2d 351, 356, 352 N.Y.S.2d 919 (1974).
Plaintiffs also argue that collateral estoppel does not apply to the legal malpractice cause of action because Justice Heitler left open the issue of defendant’s professional negligence and a potential claim in that regard. While plaintiffs have generally pleaded causes of action sounding in legal malpractice and breach of fiduciary duty, the factual allegations supporting those causes of action are the assertions of defendant’s alleged coercion and fraud. Although he has attached a different label to his claim, the underlying allegations are exactly the same. Because the issues are identical and plaintiffs had a full and fair opportunity to litigate them, collateral estoppel applies. In fact, the court in Bartkowski, supra, addressed this very concern. Noting that the plaintiff brought a separate action with different legal theories, the court nonetheless found that she was collaterally estopped from asserting her claims. The Appellate Division held that:
The fact that the issue arises within an
entirely distinct cause of action . . . is no
impediment to a finding of collateral
estoppel. . . . Rather, with collateral
estoppel, the proper focus is on the questions
of whether there is an identity of issue and –
whether plaintiff had a full and fair
opportunity to litigate the issue. . . . In our
view, both elements have been established
here
Bartkowski, 213 A.D.2d at 874-75 (citations omitted). Similarly, the court in Jung, supra, held that:
The fact that the issue arose in a different
type of action (an action for divorce, as
opposed to the present malpractice action)
and supported a different ultimate
conclusion (that plaintiff was required to pay
maintenance beyond his former wife’s
remarriage, in contrast to the present
question of whether defendant’s alleged
malpractice was a proximate cause of
plaintiffs damages) is of no moment, for
“the doctrine of collateral estoppel will
permit any discrete factual issue necessarily
decided in the prior action to be given
preclusive effect, regardless of the over-all
legal context”
Jung, 249 A.D.2d at 829.
Finally, plaintiffs attack Justice Heitler’s denial of their motion to vacate the settlement See Plaintiffs’ Brief, at 21-25. However, this litigation cannot be used as a collateral attack on her prior order. The proper vehicle by which to address any deficiencies or errors is through the appellate process. In fact, plaintiffs appealed Justice Heitler’s order and this Court affirmed, finding that there was no basis to set aside the stipulation of settlement. See Speken v. Columbia Presbyterian Medical Center, 278 A.D.2d 154, 717 N.Y.S.2d 543 (1st Dep’t 2000).
Given the foregoing, it is clear that plaintiffs’ claims were already fully and fairly litigated in the underlying action and, accordingly, the instant complaint was properly dismissed.
D. Plaintiffs’ Claims Are Barred By Waiver And Estoppel
Separate and apart from the issue of collateral estoppel, plaintiffs otherwise waived any issues challenging the settlement agreement. By voluntarily entering into the settlement agreement in open court and having affirmatively stated that the agreement was entered into voluntarily without any coercion or duress, plaintiffs have ratified the agreement and waived any challenge to it. In fact, in similar factual circumstances, where the plaintiffs agreed to a settlement on the record, their later claims for legal malpractice based on allegations that the underlying settlement was coerced, failed. See, e.g., Broad v. Conway, 675 F. Supp. 768 (N.D.N.Y. 1987), affd, 849 F.2d 1467 (2d Cir.), cert. denied 488 U.S. 927, 109 S. Ct. 313 (1988). In that case, the court aptly explained why an earlier voluntarily settlement cannot be used as a basis to assert a later claim for legal malpractice premised on coercion. There, the court held that:
Under these circumstances, plaintiffs cannot
now disavow the plain and unequivocal
terms of the settlement, which they entered
into voluntarily on the record, in open court.
As defendants correctly noted, allowing
plaintiffs to disavow a voluntary settlement
made on the record in open court would
“wreak havoc” with the judicial system. Not
only would defense counsel be more
reluctant to settle, out of fear that those
settlements would later be set aside simply
because plaintiffs changed their minds, but
the attorney client relationship would also be
undermined. Plaintiffs’ attorneys would
also be more reluctant to settle, because
even if their clients agreed to a voluntary
settlement, plaintiffs’ counsel would be
concerned that plaintiffs would sue them for
malpractice at a later date.
Therefore, because the plaintiffs expressly
stated on the record, in open court, that they
were not coerced or influenced to settle,
plaintiffs are precluded here from claiming
that there is an issue of fact as to whether
they voluntarily settled the underlying
action. Thus, insofar as plaintiffs’ complaint
alleges a legal malpractice claim based upon
coercion, that claim must necessarily fail
Id., at 772 (emphasis added); see also, Beattie v. Brown & Wood, 243 A.D.2d 395, 663 N.Y.S.2d 199 (1st Dep’t 1997), appeal denied, 92 N.Y.2d 802, 677 N.Y.S.2d 72 (1998) (dismissing claim of legal malpractice based on dissatisfaction with settlement agreement because “plaintiff was competent to execute the settlement agreement, and. . . he is responsible for his signature and is bound to read and know what he signed”); Lunney & Crocco v. Wolfe, 243 A.D.2d~, 348, 663 N.Y.S.2d 164 (1st Dep’t 1997) (dismissing legal malpractice claim premised on attorney’s failure to detect unauthorized changes to settlement agreement because respondent “had been apprised of his legal rights and . . . all provisions of the agreement were fully and satisfactorily explained to him”).
Accordingly, given the foregoing, regardless of whether the doctrine of collateral estoppel applies, the fact that plaintiffs voluntarily agreed to the settlement agreement in open court and executed the General Release precludes them from now alleging that defendant committed legal malpractice by coercing them into signing the agreement.
E. The Prior Judicial Determination Acknowledging
Defendant’s Entitlement To A Fee Bars Any Claim For
LegaI Malpractice Or Breach Of Fiduciary Duty
As part of plaintiffs’ motion to vacate the settlement agreement, plaintiffs also moved to vacate defendant’s lien on the settlement amount.
Justice Heitler expressly denied plaintiffs’ motion to vacate the attorneys’ lien.
In addition, the court quantified the amount of attorneys’ fees recoverable in this action at a maximum of $137,500 (57).
Once a judicial determination fixing the value of a professional’s services has been made, a cause of action for malpractice or breach of fiduciary duty is precluded. Under established case law, “[a] judicial determination fixing; the value of a professional’s services necessarily decides that there was no malpractice.”
Altamore v. Friedman, 193 A.D.2d 240, 246, 602 N.Y.S.2d 894 (2d Dep’t 1993), appeal dismissed without op, 83 N.Y.2d 906, 614 N.Y.S.2d 387 (1994) (citations omitted); see Lefkowitz v. Schulte, Roth & Zabel, 279 A.D.2d 457, 718 N.Y.S.2d 859 (2d Dep’t), appeal denied, 96 N.Y.2d 719, 733 N.Y.S.2d 371 (2001); Summit Solomon & Feldsman v. Matalon, 216 A.D.2d 91, 627 N.Y.S.2d 690 (1st Dep’t), appeal denied 86 N.Y.2d 711,635 N.Y.S.2d 948 (1995); John Grace & Co., Inc. v. Tunstead, Schechter & Torre, 186 A.D.2d 15, 588 N.Y.S.2d 262 (1st Dep’t 1992); Chisholm-Ryder Co., Inc. v. Sommer & Sommer, 78 A.D.2d 143, 434 N.Y.S.2d 70 (4th Dep’t 1980).
For example, in Lefkowitz, supra, the plaintiff, in a prior proceeding in Surrogate’s Court, contested the defendant’s fee. In the prior proceeding, the Surrogate issued a decree fixing the value of the defendant’s services. The plaintiff then commenced an action sounding in legal malpractice. In affirming the dismissal of the plaintiffs complaint, the Appellate Division held that:
By virtue of the Surrogate’s decree fixing
the value of the defendant’s services, the
court necessarily concluded that there was
no malpractice. . Accordingly, the
plaintiffs malpractice claims based upon the
same services at issue before the Surrogate’s
Court are barred by the doctrines of
collateral estoppel and res judicata
Likewise, here, since Justice Heitler issued an order fixing the value of the attorneys’ services and refused to vacate the lien, the issue of whether defendant committed malpractice was necessarily decided. Accordingly, plaintiffs are estopped from asserting claims of legal malpractice and breach of fiduciary duty.
F. The Duplicative Causes Of Action Require Dismissal
As the foregoing discussion demonstrates, plaintiffs’ complaint was properly dismissed for a variety of reasons. As an additional basis for dismissal, all of the causes of action are premised on the same factual allegations. Under New York law, the redundant pleading of a malpractice claim under the guise of different legal theories will result in dismissal of the redundant causes of action. See Between the Bread Realty Corp. v. Salans, Hertzfeld, Heilbronn, Christy & Viener, 290 A.D.2d 380, 736 N.Y.S.2d 666 (1st Dep’t), appeal denied 98 N.Y.2d 603, 745 N.Y.S.2d 502 (2002); Hutt v. Kanterman & Taub, P.C., 280 A.D.2d 379, 720 N.Y.S.2d 781 (1st Dep’t), appeal denied 96 N.Y.2d 713, 729 N.Y.S.2d 440 (2001); Levine v. Lacher & Lovell-Taylor, 256 A.D.2d 147, 681 N.Y.S.2d 503 (1st Dep’t 1998); Sage Realty Corp. v. Proskauer Rose, LLP, 251 A.D.2d 35, 675 N.Y.S.2d 14 (1st Dep’t 1998).
Accordingly, in addition to other reasons warranting dismissal, those causes of action that are duplicative of the legal malpractice causes of action were properly dismissed.
POINT II
PLAINTIFFS ARE NOT ENTITLED TO PUNITIVE
DAMAGES
In the first instance, as the foregoing discussion demonstrates, plaintiffs’ complaint requires dismissal. As no valid causes of action remain that would entitle plaintiffs to any award for compensatory damages, any claim for punitive damages must likewise fail. See, Hubbell v. Trans World Life Ins. Co., 50 N.Y.2d 899, 901, 430 N.Y.S.2d 589 (1980) (holding that “absent a valid claim for compensatory damages, there could be none for punitive damages”); Prote Contracting Co., Inc v. Board of Education, 276 A.D.2d 309, 310, 714 N.Y.S.2d 36 (1st Dep’t 2000) (holding that “[a]bsent a valid claim for compensatory damages, there can be no claim for punitive damages”).
In any event, punitive damages are not warranted under the circumstances of this case. Awarding punitive damages is an extraordinary remedy and is available in only a limited number of instances. A private party seeking to recover punitive damages “must not only demonstrate egregious tortuous conduct by which he or she was aggrieved, but also that such conduct was part of a pattern of similar conduct directed at the public generally.” Rocanova v. Equitable Life Assurance Society, 83 N.Y.2d 603, 613, 612 N.Y.S.2d 339 (1994); see also, National Broadcasting Co., Inc. v. Fire Craft Services, Inc., 287 A.D.2d 408, 731 N.Y.S.2d 722 (1st Dep’t 2001); Fekete v. GA Ins. Co. of New York, 279 A.D.2d 300, 719 N.Y.S.2d 52 (1st Dep’t 2001).
Plainly and simply, plaintiffs’ complaint is bereft of any allegations that defendant’s conduct was part of a similar pattern that was directed at the public. Instead, plaintiffs’ complaint represents nothing more than their own dissatisfaction with the terms of their settlement, having nothing to do with how such conduct affected any other members of the public.
In an attempt to illustrate their entitlement to punitive damages, plaintiffs refer to matters that, in the first instance, are not part of the record on appeal.
Plaintiffs rely on an opinion regarding a tax matter, and two other cases in which defendant was accused of fraud or accused of improperly receiving money. See, Plaintiffs’ Brief, at 28-30. These matters were not a part of their opposition papers to defendants’ motion to dismiss and are not a part of the record on appeal.
Accordingly, these matters may not be considered by this Court. See, CIS Air Corp. v. Express One International Inc., 298 A.D.2d 317, 748 N.Y.S.2d 501 (1st Dep’t 2002); Knolls Cooperative Section No. 2, Inc. v. Evans Development Corp., 169 A.D.2d 690, 565 N.Y.S.2d 489 (1st Dep’t 1991).
In any event, none of these ancillary matters illustrate that defendant’s conduct in this case was egregious or that his conduct evinces a high degree of moral turpitude. In short, plaintiffs’ claim for punitive damages, similar to the other claims in their complaint, fails.
CONCLUSION
For all of the foregoing reasons, the order of Supreme Court, New York
County (Tolub, J.), dated April 15, 2003, should be affirmed, with costs.
Dated: Uniondale, New York
February 2, 2004
Respectfully submitted,
RIVKIN RADLER LLP
Attorneys for Defendant-Respondent
THOMAS R. MOORE
By:
Harris J. Zakarin
EAB Plaza
Uniondale, New York 11556
(516) 357-3000
Of Counsel: Evan H. Krinick
Janice J. DiGennaro
Cheryl F. Korman
Harris J. Zakarin