Morris v Zimmer 2024 NY Slip Op 02314 [227 AD3d 696] May 1, 2024
Appellate Division, Second Department appears to be a pro se litigation over unauthorized trading in a brokerage account. The case wended its way to US District Court, to the Second Circuit, to a certiorari request to the US Supreme Court, and thence back to state Supreme Courts in New York and Westchester.

The case ended with judgments, but claims for Judiciary Law 487 were denied and then lost.

“n or about 2000, the plaintiffs, Daniel Morris and Lucille Morris, retained the defendant, David Zimmer, an attorney then admitted to practice in Maryland, to represent them in a dispute regarding alleged unauthorized trading in their brokerage accounts. In 2004, a settlement was reached, and the defendant, as the plaintiffs’ attorney, received the settlement funds on their behalf. However, he failed to deliver those funds to the plaintiffs, in addition to other funds owed to them. In 2007, Daniel Morris filed a grievance complaint against the defendant with the Attorney Grievance Commission of Maryland. By order of the Court of Appeals of Maryland dated May 5, 2009, the defendant was disbarred by consent (see Attorney Grievance Commn. of Md. v Zimmer, 408 Md 486, 970 A2d 891 [2009]). The plaintiffs also alerted various law enforcement authorities of the defendant’s conduct. In 2009, the New York County District Attorney’s Office commenced a criminal action against the defendant, charging him with grand larceny in the second degree in violation of Penal Law § 155.40 (1). In May 2010, pursuant to the terms of a plea agreement, the defendant pleaded guilty to petit larceny in violation of Penal Law § 155.25 and was afforded the opportunity to replead to a lesser charge upon payment to the plaintiffs of the full amount owed. Although the defendant subsequently made a partial payment, he failed to pay the full amount owed and instead executed an affidavit of confession of judgment in the plaintiffs’ favor in the amount of $77,625.

In May 2010, days after the defendant pleaded guilty in the criminal action, the plaintiffs commenced an action against him, among others, in the United States District Court for the Southern District of New York (hereinafter the federal action). In the second amended complaint, the plaintiffs asserted causes of action alleging breach of contract, breach of fiduciary duty, fraud, conversion, and fraudulent misappropriation of funds stemming from the defendant’s failure to pay the plaintiffs the amount owed (see Morris v Zimmer, 2011 WL 5533339, *1, *6-8, 2011 US Dist LEXIS 130919, *1, *15-20 [SD NY, Nov. 10, 2011, No. 10 Civ 4146 (VB)]). The plaintiffs subsequently sought leave to amend the second amended complaint, inter alia, to add a cause of action pursuant to Judiciary Law § 487, but the District Court denied their request. The plaintiffs then moved for summary judgment on the second amended complaint insofar as asserted against the defendant. By memorandum decision dated March 21, 2014, the District Court, among other things, adopted a magistrate judge’s report and recommendation in its entirety and granted that branch of the plaintiffs’ motion which was for summary judgment on the issue of liability against the defendant, while also making certain determinations with regard to damages (see Morris v Zimmer, 2014 US Dist LEXIS 38640, *2-5 [SD NY, Mar. 21, 2014, No. 10 Civ 4146 (VB)], affd 637 Fed Appx 654 [2d Cir 2016]; see also Morris v Zimmer, 2014 WL 7474770, *5-6, 2014 US Dist LEXIS 39608, *14-19 [SD NY, Feb. 11, 2014, No. 10 Civ 4146 (VB) (LMS)]). On June 9, 2014, a judgment was entered, inter alia, in favor of the plaintiffs and against the defendant awarding damages in the principal sum of $92,625. The plaintiffs appealed from the judgment. By summary order dated February 5, 2016, the United States Court of Appeals for the Second Circuit affirmed the judgment (see Morris v Zimmer, 637 Fed Appx 654 [2d Cir 2016]). On October 3, 2016, the United States Supreme Court denied the plaintiffs’ petition for writ of certiorari (see Morris v Zimmer, 580 US 873 [2016]).”

“The plaintiffs’ various arguments in support of their contention that this action was not barred by the doctrine of res judicata are without merit. They assert, for example, that the judgment in the federal action did not have a preclusive effect on this action because federal courts lack jurisdiction over applications made pursuant to CPLR 3218. Putting aside the question of whether this fact, if true, would affect the res judicata analysis, no such jurisdictional impediment exists (see Alland v Consumers Credit Corp., 476 F2d 951, 952-955 [2d Cir 1973]; Xerox Corp. v West Coast Litho, Inc., 251 F Supp 3d 534, 537-538 [WD NY 2017]). Moreover, the plaintiffs’ assertion that the judgment in the federal action had no preclusive effect on the Judiciary Law § 487 cause of action, in particular, is without merit. Although the District Court denied their request for leave to amend their second amended complaint, inter alia, to assert such a cause of action, the doctrine of res judicata is nonetheless applicable. The plaintiffs chose the federal court as the forum to litigate their claims against the defendant, and they could have litigated the Judiciary Law § 487 cause of action in that forum if they had asserted it earlier (see Incredible Invs. Ltd. v Grenga, 125 AD3d 1362, 1363-1364 [2015]; Syncora Guar. Inc. v J.P. Morgan Sec. LLC, 110 AD3d 87, 91-92, 95 [2013]). Their contention that this cause of action was not yet ripe at the time they commenced the federal action because the defendant had not yet pleaded guilty is factually inaccurate, as he pleaded guilty days before they filed their original complaint. Regardless, a criminal conviction is not a condition precedent to a Judiciary Law § 487 cause of action (see Papa v 24 Caryl Ave. Realty Co., 23 AD3d 361, 362 [2005]; Laing v Cantor, 280 AD2d 519, 519 [2001]; Schindler v Issler & Schrage, 262 AD2d 226, 228 [1999]).“