Plattsburgh New York is a city far away from most other places in NY.  It is at the extreme upper right corner of New York, on Lake Champlain and at the Canadian border.  Its so far away from everything else that the story in Plattsburgh Hous. Auth. v Cantwell  2017 NY Slip Op 50184(U) Decided on February 10, 2017  Supreme Court, Clinton County  Muller, J. does not really surprise.  An attorney works her way up in the Plattsburgh Housing Authority, eventually takes both the Executive Director and General Counsel positions, and works a salary over $ 160,000.  That had to put her in the top 1% of all upstate earners.  Here is the court decision:

I. LORI CANTWELL BREACHED HER FIDUCIARY DUTY TO THE PLATTSBURGH HOUSING AUTHORITY.

The PHA is entitled to a judgment in its favor on its cause of action for Ms. Cantwell’s breach of her fiduciary duties as the PHA’s attorney. To succeed on its claim for breach of fiduciary duty, the PHA was required to prove: (1) the existence of a fiduciary relationship between it and Ms. Cantwell; (2) misconduct by Ms. Cantwell; and (3) damages that were directly caused by Ms. Cantwell’s misconduct (see East Schodack Fire Co., Inc. v Milkewicz, 140 AD3d 1255, 1256 [2016]; see also Fitzpatrick House III, LLC v Neighborhood Youth & Family Servs., 55 AD3d 664, 664 [2008]).

A. A Fiduciary Relationship Existed Between the PHA and Ms. Cantwell.

Attorneys stand in a fiduciary relationship to their clients (see Graubard Mollen Dannett & Horowitz v Moskovitz 86 NY2d 112, 118 [1995]). The attorney-client relationship “imposes on the attorney [t]he duty to deal fairly, honestly and with undivided loyalty . . . including maintaining confidentiality, avoiding conflicts of interest, operating competently, safeguarding client property and honoring the clients’ interests over the lawyer’s” (Country Club Partners, LLC v Goldman, 79 AD3d 1389, 1391 [2010], quoting Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 9 [2008] [internal quotation marks and citations omitted]). “Any doubts [about the existence of an attorney-client relationship] should readily [be] resolved against the [attorney], absent proof of a clear and forthright statement to his [or her] clients that he [or she] was no longer their attorney and that they should obtain outside counsel before continuing any negotiations” (Howard v Murray, 43 NY2d 417, 422 [1977]).

Ms. Cantwell was first retained by the PHA as its attorney in 1997 (Trial Tr. 418:22-23). On March 1, 2003 she became an employee of the PHA and began serving as its General Counsel pursuant to the GC Agreement (Trial Tr. 413:8-11, Plaintiff’s Exhibit 2). As the PHA’s General Counsel, Ms. Cantwell worked for the PHA full time, attending PHA Board meetings and providing legal advice to both the PHA Board and the Executive Director (Trial Tr. 64:10-14, 65:18-22, 65:8-17, 237:3-24). Ms. Cantwell continued to serve as General Counsel until she was asked to resign on May 3, 2013. Therefore, at all relevant times, Ms. Cantwell had a duty to deal with the PHA fairly, honestly and with undivided loyalty.”

“Ms. Cantwell also breached her fiduciary duty to the PHA by advising the PHA that she [*19]was entitled to an increase in her salary of over $30,000. At the time the parties signed the ED Agreement, Ms. Cantwell understood that her base salary as Executive Director was $85,000 per year (Trial Tr. 469:24-25, 473:3-7, 727:1-6). Ms. Cantwell even sent an e-mail to the PHA accountant that her Executive Director salary should be reported to HUD as $85,000 (Trial Tr. 345:8-10, Plaintiff’s Exhibit 85).

Nonetheless, less than one year after she became Executive Director, Ms. Cantwell managed to increase her salary as Executive Director by over $30,000. First, Ms. Cantwell invited Ms. Etesse — the PHA accountant — to a meeting and suggested to her that she should be paid as an employee on step 11 of the PHA salary schedule for both her Executive Director and General Counsel salary rather than step two for her Executive Director salary and step four for her General Counsel salary (Trial Tr. 353:19-25, 354:1-5, 359:4-25, Plaintiff’s Exhibit 7, Plaintiff’s Exhibit 1).

The basis for this increase was the language in the “Other Benefits” section of the ED Agreement, which stated that Ms. Cantwell “should be considered to have 14 years of service with the [PHA] as of 12/30/11″ (Plaintiff’s Exhibit 1). Ms. Cantwell interpreted this language to mean that she should have started at an Executive Director salary of $98,378 (based upon the 2011 PHA salary schedule and 14 years of service) and that, by the time she met with Ms. Etesse, her salary should have been $108,807 (based upon the 2012 PHA salary schedule and 14.5 to 18.5 years of service) — rather than $87,125 (based upon the 2012 PHA salary schedule and 6 to 18 months of service). Notably, Ms. Cantwell’s salary at step eleven (14.5 to 18.5 years of service) of the 2012 PHA salary schedule was higher than what the 2011 PHA Salary Schedule provided for an Executive Director with over 18.5 years of service, the maximum salary that the Executive Director could reach in 2011 (Defendant’s Exhibit 78 p. 4). The 2012 PHA Salary Schedule set a higher maximum figure for the Executive Director because it started, in accordance with Ms. Cantwell’s ED Agreement, at a beginning salary of $85,000 effective January 1, 2012, approximately the time Ms. Cantwell became sole Executive Director (Defendant’s Exhibit 78 p. 5).”

“For the reasons set forth herein, the Court hereby awards judgment to the PHA on its causes of action for breach of fiduciary and rescission and directs that the $261,871.79 in funds paid by the PHA to Ms. Cantwell from October 1, 2011 to May 13, 2013 be returned by Ms. Cantwell forthwith, together with interest at 3% per annum from October 1, 2011 to the date of this Decision and Order.[FN6] The Court expressly declines to award attorneys’ fees to the PHA.

Ms. Cantwell’s counterclaims for breach of the ED Agreement and breach of the GC Agreement are dismissed in their entirety.

The Court has given consideration to each cause of action alleged in the complaint and, to the extent that they are not specifically addressed, each has been ruled upon in a manner not inconsistent with the findings of fact and conclusions of law herein.

The parties are directed to submit a jointly agreed upon Judgment consistent with the foregoing within fifteen (15) days of the date of service of this Decision and Order with notice of entry thereon.

The original of this Decision and Order has been filed by the Court. Counsel for plaintiff is hereby directed to promptly obtain a filed copy of the Decision and Order for service with [*25]notice of entry in accordance with CPLR 5513.”