Jeffrey M. Rosenblum, P.C. v Casano 2014 NY Slip Op 51629(U) [45 Misc 3d 1218(A)] Decided on November 19, 2014 District Court Of Nassau County, First District Fairgrieve, J. is a perfect example of what all the CLEs tell attorneys not to do. Don’t sue for small fees, because there will inevitably be a legal malpractice counterclaim. This fee had to be less than $ 15,000 because it was first subject to a fee arbitration and then was brought in Nassau District Court.
What of the collateral estoppel problem after an arbitration? Not here. “Initially, plaintiff’s counsel presses two arguments for dismissal of the first four counterclaims. First, she argues that pursuant to CPLR 3211(a)(2), this court lacks subject matter jurisdiction because “the monetary jurisdictional limit of the District Court is $15,000,” which these counterclaims exceed (Affirmation in Support, ¶ 22). To the contrary, however, this court “shall have jurisdiction of counterclaims … for money only, without regard to amount” (UDCA §208[b]). Accordingly, plaintiff’s argument characterizing the amount sought by defendant’s counterclaims as exceeding statutory authority, is rejected. Therefore, its requests for dismissal on this basis are denied.
Plaintiff’s second argument for dismissal of the first four counterclaims is premised upon the notion that this court lacks the equitable jurisdiction necessary to entertain the same. However, it is clear from review of defendant’s Answer that the first two counterclaims are based upon a theory of “Breach of Contract” (Defendant’s Exhibit E), and that they address two (2) written contractual retainer agreements between the parties. Although plaintiff attempts to characterize said claims as equitable in nature, defendant has clearly pled a different, cognizable legal theory. Accordingly, plaintiff’s request for dismissal of the first two counterclaims, as based upon equity considerations, is denied.”
“Lastly, plaintiff seeks dismissal of the fifth and final counterclaim on two grounds. The first is res judicata and identity of issues with the earlier arbitration proceeding herein. In this regard, it is uncontroverted that this case was previously arbitrated pursuant to 22 NYCRR Part 137, that said arbitration resulted in a decision in defendant’s favor and that plaintiff timely commenced a trial de novopursuant to 22 NYCRR 137.8. Given same, the arguments proferred by plaintiff to dismiss defendant’s fifth counterclaim are inapplicable to the present case.
The cases cited by plaintiff, Wallenstein v Cohen, 45 AD3d 674 (2d Dept 2007) and Altamore v Friedman, 193 AD2d 240 (2d Dept 1993), involved different arbitration statutes. Moreover, the arbitration statute in Wallerstein was repealed on January 1, 2002, and the Altamore case was specifically premised upon the binding nature of the arbitration involved in that proceeding. Unlike either of these cases, the arbitration provision used herein, explicitly provides a non-prevailing party with the opportunity to elect to proceed to a trial de novo, and plaintiff having done so, defendant can pursue her counterclaim. Therefore, that portion of plaintiff’s motion seeking dismissal of defendant’s fifth counterclaim, on res judicata grounds, is denied.”