JOSEPH G. HUGAR AND LKC, LLC, PLAINTIFFS-APPELLANTS, v DAMON & MOREY LLP, CHRISTOPHER T. GREENE, ESQ., ANTHONY L. EUGENI, ESQ., AND ROBERT J. PORTIN, ESQ., DEFENDANTS-RESPONDENTS.

596 CA 07-02311

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, FOURTH DEPARTMENT

2008 NY Slip Op 4167; 2008
May 2, 2008, Decided
May 2, 2008, Entered

When are attorneys treated the same as their clients? Here is an example of attorneys getting the benefit of the client’s release.

“Memorandum: Plaintiffs commenced this action seeking damages for breach of fiduciary duty and legal malpractice arising out of defendants’ representation of plaintiffs and two other individuals and their respective limited liability companies in the formation of Aurora Healthcare LLC (Aurora). When Aurora terminated the employment of Joseph G. Hugar (plaintiff), defendants continued to represent Aurora and its remaining principals in negotiations with plaintiff to resolve his claims against Aurora and its two remaining principals and their respective limited [**2] liability companies. Plaintiff and his own limited liability company, plaintiff LKC, LLC, retained new counsel during the negotiations, and their claims were eventually resolved. Plaintiff then, on behalf of both plaintiffs, executed a settlement agreement that included a general release (Settlement Agreement). Defendants moved to dismiss the complaint pursuant to CPLR 3211 (a) (1), (5) and (7), contending that the action is barred by the covenants and general release in the Settlement Agreement. We conclude that Supreme Court properly granted the motion.

We agree with plaintiffs that the terms of the general release do not apply to defendants because they were not "Grantees and their respective successors and assigns," and those were the only parties encompassed by the general release. We conclude, however, that the complaint was properly dismissed because the action is barred by the covenant not to sue in the Settlement Agreement. Pursuant to that covenant, plaintiffs agreed not to institute any action at law or equity or to assert any claim against various entities relating to any "Company Matters." The term "various entities" includes "Company Affiliates," and the Settlement Agreement [**3] defines [*2] Company Affiliates as, inter alia, the parties to the agreement, as well as "all agents and employees thereof."