Many lawyers are disciplined, and some are disbarred over the conversion of their ward’s funds.  Guardianships are necessary for those who cannot manage their own finances, and for the most part are beneficial to the wards.  Sometimes, however, the existence of money just sitting there can be too much of a temptation.  So it was in United States Fire Ins. Co. v Raia  2014 NY Slip Op 07146  Decided on October 22, 2014  Appellate Division, Second Department. 

"The defendant Camille A. Raia was appointed guardian of the property of Andrea S., an incapacitated person (hereinafter the IP). Raia obtained a guardianship bond through the plaintiff, United States Fire Insurance Company (hereinafter US Fire), as surety. Subsequently, Raia’s law partner, the defendant Steven T. Rondos, began to handle the guardianship. During the course of the guardianship, Cavalcante & Company (hereinafter C & C), an accounting firm, was retained to prepare annual tax returns on behalf of the IP. Ultimately, Raia was removed as the guardian of the IP’s property as a result of a criminal investigation into the wrongful conversion of funds by Rondos. The court accepted an account stated as Raia’s final account for the period she acted as guardian of the IP’s property, and surcharged her in a certain amount. US Fire and the IP, through a successor guardian, entered into a stipulation by which the IP released US Fire from further liability under the bond and assigned all rights and causes of action to it in exchange for a payment in the amount of $1,100,000.

US Fire, on its own behalf and as the IP’s subrogee/assignee, commenced this action against, among others, Raia, Raia & Rondos, P.C., Rondos, and C & C. US Fire alleged, with respect to C & C, that it committed professional malpractice by failing to detect unlawful withdrawals made from the IP’s investment account and to report the accounting regularities. In its answer, C & C asserted cross claims against Raia, Rondos, and Raia & Rondos, P.C., seeking contribution and common-law indemnification. US Fire settled with Raia, Rondos, and Raia & Rondos, P.C., and thereupon executed a release in favor of Raia, and a separate release in favor of Rondos and Raia & Rondos, P.C.

Raia moved, inter alia, for summary judgment dismissing C & C’s cross claims insofar as asserted against her and pursuant to 22 NYCRR 130-1.1 for an award of attorney’s fees. Rondos and Raia & Rondos, P.C., separately moved, inter alia, for summary judgment dismissing C & C’s cross claims insofar as asserted against them. C & C opposed the motions and cross-moved for summary judgment on its cross claims insofar as asserted against Raia, Rondos, and Raia & Rondos, P.C. The Supreme Court, in effect, granted those branches of the motions and denied the cross motion.

Raia, Rondos and Raia & Rondos, P.C., demonstrated their prima facie entitlement to judgment as a matter of law on C & C’s cross claim for contribution insofar as asserted against them. "A release given in good faith by the injured person to one tortfeasor as provided in [General Obligations Law § 15-108(a)] relieves him [or her] from liability to any other person for contribution as provided in article fourteen of the civil practice law and rules" (General Obligations Law § 15-108[b]). Here, US Fire, upon settling with Raia, Rondos and Raia & Rondos, P.C., executed a release in favor of Raia, and a separate release in favor of Rondos, and Raia & Rondos, P.C., and there is no evidence in the record indicating that the releases were not given in good faith. Thus, Raia, Rondos, and Raia & Rondos, P.C., established, prima facie, that they were released from liability to C & C for contribution (see Balkheimer v Spanton, 103 AD3d 603; Ziviello v Boyle, 90 AD3d 916, 917; Boeke v Our Lady of Pompei School, 73 AD3d 825, 826-827; Kagan v Jacobs, 260 AD2d 442, 442-443; Brown v Singh, 222 AD2d 392). In opposition, C & C failed to raise a triable issue of fact.

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