Judicial Estoppel and the Death of a Legal Malpractice Case
The audacity shown in this case makes the head spin. Two brothers battle over ownership of a Long Island Nissan dealership. More (or less) shocking is the cavalier manner in which they worked so that a divorcing wife would not get any part of the dealership in the divorce. Did the attorney help out? We'll never know.
Rubio v Rubio 2012 NY Slip Op 32858(U) November 26, 2012 Sup Ct, Suffolk County Docket Number: 24515-2012 Judge: Emily Pines is not a divorce. It's brother against brother.
"In response to the documentary evidence, Gary Rubio submitted an Affidavit in which he
claimed that although he had contemplated this transfer in order to raise funds in 2009 since he was n the midst of a divorce, the transfer was never consummated. Plaintiff sets forth that Defendants were aware of this fact because co-Defendant, Theodore Richman, Esq, counsel to Thomas Rubio and Joseph Rubio, so stated in a letter dated November 22.201 1 with regard to a lawsuit brought by Gary Rubio‘s ex-wife, Jennifer Giannelli, against Gary Rubio, Joseph Rubio and SmithtownNissan, Inc, seeking to set aside the October 2009 transfer. In such letter, Thomas Richman Esq advises his client not to state that a transfer of Gary Rubio’s interest had in fact occurred, since such would constitute perjury. Based upon these writings, Gary Rubio seeks sanctions against Thomas Rubio as well as the Richman Defendants for filing a frivolous motion. Gary Rubio also refers to 2009 and 2010 corporate tax returns for Smithtown Nissan, Inc, which set forth that Gary Rubio is a 25% shareholder of the corporation. Gary Rubio also asks for sanctions against Fina based upon the fact that Fina has claimed that Gary Rubio is liable to Fina for alleged violations of New York Labor Law 198-a and that such could only be possible if Gary Rubio were a shareholder of Fina’s former employer, Smithtown Nissan."
"“The well recognized doctrine of judicial estoppel is designed to protect the integrity of the
court system as a whole by prohibiting deliberate alteration of a stated position before the same or
different courts in order to obtain favorable treatment. New Hampshire v. Maine, 532 US 742 (200 1);
Festinger 11 Edrich, 32 AD 3d 412 (2nd Dep’t 2006). The doctrine prohibits a party who, having
obtained a favorable ruling based upon an asserted position, seeks to alter the position simply
because the litigant’s interests have changed. Jones Lcrng Wooten USA v Leboeuf Lamb, Greene & Mac Rae 2 43 AD 2d 168 (1” Dep’t 1998) leave to appeal dismissed, 92 NY 2d 962 (1998)”.
‘There is no question that what occurred in Watkins, supra, is akin to the scenario set forth
before the Court in the case at bar. Faced with a litigation commenced by his ex spouse, that Gary
Rubio had transferred his stock in Smithtown Nissan, Inc in 2009, in violation of the Debtor and
Creditor law, in order to avoid his obligations under the settlement of his matrimonial action, Gary
Rubio, both in sworn testimony and in verified pleadings before this Court’s colleague, Justice
Gerald Asher, stated that he had, indeed, transferred all of his shares of such entity to his father,
Joseph Rubio, in exchange for $188,509.87, which sum he utilized to make mortgage payments on the marital residence. Gary Rubio appended, in the pleadings before that Court, both a copy of the canceled check demonstrating that he had received and utilized the funds and a copy of the 2009stock transfer agreement. Now the same party states under oath before this Court that the transfer never occurred.
Gary Rubio‘s assertions that his statements do not fall within the judicial estoppel purview,
since the litigation by his ex-wife terminated in settlement as opposed to judgment are misplaced.
First, the settlement was approved by Justice Asher on the record; second, it is clear from the total
record in that case, that there was no dispute and indeed that both parties before Justice Asher
submitted sworn statements in the action before that jurist that Gary Rubio had transferred all his
shares in the corporation that is the subject of this lawsuit and was not an owner of the corporation
at the time he (appeared before Justice Asher and settled his ex-wife‘s claim of over $568.761.11 for approximately $200,000.00. The combination of the sworn pleadings and the deposition testimony
by Gar) Rubio in connection with the Giannelli action, were part of the record before another court
of coordinate jurisdiction. With regard to the statements by Thomas Richman, Esq, to his client,
Joseph Rubio, they are irrelevant, as they were never brought before the Court in that action and
because they are directly contradicted by the person seeking approval of the settlement before Justice Asher and seeking relief before this Court, upon totally contradictory bases. Indeed, the settlement of that matter before Justice Asher, in June 2012, allows the discontinuance of Ms. Giannelli’s action against the corporation, Smithtown Nissan, Inc, which she sued. There is no rational basis on which such could have occurred if Gary Rubio was still a shareholder of that entity when the stipulation was presented to the Court. The court is not unmindful of the issue of the 2010 corporate tax return. However, as damaging as that may appear and, in this Court’s opinion it should be corrected, it was not presented to a court in order to avoid a specific action, i.e. the invasion of corporate assets by the ex spouse of Gary Rubio.
Since the doctrine of judicial estoppel clearly applies to the case and prevents the Plaintiff;
Gary Rubio, from asserting that he is a shareholder of Smithtown Nissan, Inc., he lacks standing to
bring an action, incorporating any of the causes of action set forth in his complaint as each and every one of them is brought both on behalf of the corporation and is premised upon Gary Rubio’s status as a shareholder of such entity. Accordingly, the motions of Thomas Rubio, Craig Fina as well as the Richman Defendants to dismiss this action are granted. Based upon the above , there exists no cause of action against Defendants Greenbaum and Berman, Sosman & Rosenzweig LI,C as those causes of action are based solely upon alleged aiding and abbetting the other parties, against whom the action has been dismissed."