Attorney Sues Attorney; Where is the Client?
Client has a really horrible situation in her apartment. First there is a flood of raw sewerage. She hires law firm 1 to sue. They commence an action. Then, she has a water flood from the neighbor upstairs. She hires law firm 2 to handle that case. They commence an action. Law firm 2 settles the case for a big number. A release is signed, and there the trouble begins.
in Strougo & Blum, Esqs. v Zalman & Schnurman, Esqs, 2013 NY Slip Op 30559(U) March 15, 2013Supreme Court, New York County Docket Number: 603665/09 Judge: Eileen A. Rakower has to decide what happens after the release in case 2 ends case 1. Was the law firm in case 1 injured by the acts of law firm 2?
"Defendant states that, in or about December 2006, a mediation was held in the 2004 Hixon Action before JAMS, the purpose of which was to resolve the claims Ms. Hixon asserted in the 2004 Hixon Action. As a result of the mediation, a settlement agreement was reached, whereby Ms. Hixon agreed to settle her action for payment in the amount of $1,450,000. On December 7,2006, Ms. Hixon executed a General Release in the 2004 Hixon Action, which released 12-14, Goodman, Inc., and the Adams’ from:
all actions, causes of action, suits . . . specifically with respect to damages that RELEASOR sustained which were the subject of a lawsuit pending in the Supreme Court. . .
The defendants in the 2002 Hixon Action thereafter moved to amend their answer to add the release as an affirmative defense, and to dismiss the 2002 Hixon Action on collateral estoppel and res judicata grounds. By Order entered August 12, 2009, Judge Jose A. Padilla, Jr. granted all aspects of the motion and dismissed as to all defendants2 Thereafter, plaintiff brought the instant action against Defendant alleging that Defendant fraudulently induced Ms. Hixon to sign the General Release by reassuring her that it would not effect the 2002 Hixon Action. As such, plaintiff
alleges, Defendant tortiously interfered with the retainer agreement between plaintiff and Ms. Hixon, and alleges civil conspiracy with the former co-defendants by way of interference with plaintiffs retainer agreement.
“Tortious interference with contract requires the existence of a valid contract between the plaintiff and a third party, defendant’s knowledge of that contract, defendant’s intentional procurement of the third-party‘s breach of the contract without justification,’ actual breach of the contract, and damages resulting therefkom” (Havana Cent. NY2 LLC v. Lunney ’s Pub, Inc., 2007 N Y Slip Op 10509, * 5 [ 1 st Dept. 2007), citing Lama Holding Co, v Smith Barney, 88 N.Y.2d 413,424 [ 19961).
A retainer agreement between an attorney and a client is terminable at will because the client has an “absolute right . . to terminate the attorney client relationship at any time without cause . . .” (Demov, Morris, Levin & Shein v. Glantz, 53 NY2d 553,556-557[ 198 13). When alleging tortious interference with a contract that is terminable at will, plaintiff must also show that the alleged interference was achieved through “wrongful means,” such as fraudulent misrepresentations (see
Guard-Life Corporation v, S. Parker Hardware Manufacturing Corp., 50 NY2d 183).
Defendant has made a prima facie showing of entitlement of summary judgment. Defendant submits the affidavit of Benjamin Zalman. Mr. Zalman states that the 2006 General Release which Ms. Hixon executed expressly states that the claims being released are those with respect to the 2004 Hixon Action, not the 2002 Hixon Action. Mr. Zalman states that at all times Defendant represented to Ms. Hixon that her execution of the Release would only serve to release the defendants from the 2004 Hixon Action and that at no time did Defendant intend to defraud
Defendant or interfere with the retainer agreement. In opposition, Plaintiff fails to raise a triable issue of fact. Plaintiff submits only the affirmation of Robert I. Strougo, which annexes previous orders of the Court on former defendants’ motions to dismiss, a copy of the 2006 General Release, Judge Padilla’s 2009 decision dismissing the 2002 Hixon Action, and contends without any merit that these orders preclude summary judgment. Nor does Plaintiff contend that
Defendant’s motion is premature or that Plaintiff needs to conduct discovery in order
to allow it to obtain facts to oppose Defendant’s motion."