286 Corbin Owners Corp. v. Berger

2022 NY Slip Op 30018(U)

286 Corbin Owners Corp., Plaintiff, v. David Berger, Esq., Tenenbaum Berger & Shivers, LLP, Berger Fink LLP and Wishful Thinking Realty Corp., Defendants.

Index No. 513265/2020

Supreme Court, Kings County

January 3, 2022

Unpublished Opinion

PRESENT: HON. WAVNY TOUSSAINT, Justice,

Wavny Toussaint Judge

The following e-filed papers read herein: NYSCEF Doc Nos.

Notice of Motion/Order to Show Cause/ Petition/Cross Motion and Affidavits (Affirmations) Annexed __51 -73; 74-94; 110-115

Opposing Affidavits (Affirmations)__. 100-109; 118; 119-120

Reply Affidavits (Affirmations)__ 117; 121

Upon the foregoing e-filed papers in this legal malpractice dispute, defendants David Berger, Esq. (Berger), Tenenbaum Berger & Shivers, LLP (TB&S), and Berger Fink LLP (Berger Fink) move, in motion sequence 003, for an order (i) dismissing plaintiffs complaint pursuant to CPLR 3211 (a) (1) and (a) (7), and (ii) granting costs, legal fees and sanctions against plaintiff pursuant to 22 NYCRR 130-1.1. Defendant Wishful Thinking Realty Corp. (Wishful) moves, in motion sequence 004, for an order dismissing plaintiffs complaint pursuant to CPLR 3211 (a) (1) and (a) (7). Plaintiff opposes both motions and cross-moves, in motion sequence 005, for an order awarding it attorneys' fees and costs, pursuant to 22 NYCRR 130-1.1 for having to defend against defendants' motions.

Background Facts and Procedural History

The following facts are gleaned from plaintiffs amended verified complaint unless otherwise noted. Plaintiff is a co-op that owns and manages the lands and buildings located at 286 Corbin Place in Brooklyn, New York (hereinafter the Property). Nonparties Joglo Realties, LLC (Joglo) and Robert Toussie (Toussie) claimed to -own a strip of land, commonly referred to as the "esplanade," which runs southeast along 286 Corbin Place between the Property and the Atlantic Ocean.

After Hurricane Sandy struck on or around October 28, 2012, the Property allegedly sustained significant damage due to flood waters forcing boulders and other debris from the esplanade onto plaintiffs property. Plaintiff attributed the damage to Joglo and Toussie's failure to properly secure, care for and construct, the necessary protections, such as a seawall on the esplanade.

In or around March 2014, plaintiff retained Berger and his firm at the time, TB&S, to prosecute an action against Joglo and Toussie for trespass and negligence, among other causes of action (see NYSCEF Doc. No. 57, Verified Complaint for 2014 Actions). Plaintiff paid a $5, 000.00 retainer fee (NYSCEF Doc. No. 47, Amended Complaint, ¶ 70). Plaintiff also paid $975.00 for "pre-litigation research" in January 2014 (id at ¶ 112). By letter dated February 14, 201 [4], Berger advised plaintiff that he had conducted research on plaintiffs behalf and determined that the esplanade was titled to Joglo, an entity owned by Toussie, and that Plaintiff had viable causes of action for, inter alia, trespass, nuisance, negligence that would likely result in an award of damages (id. at ¶ 74).

On May 9, 2014, TB&S commenced two actions on behalf of plaintiff against Joglo and Toussie bearing Kings County Supreme Court Index Nos. 7143/14 and 7161/14 (id. at ¶ 75). Initial settlement negotiations were held by the parties' respective counsel between May 9, 2014 and September 19, 2014 (id. at ¶ 76). Joglo and Toussie never filed answers to plaintiffs two complaints (id. at ¶ 77).

By letter dated August 27, 2014, counsel for Joglo and-Toussie informed Rebecca A. Crance, Esq. (Crance) at TB&S that Joglo and Toussie did-not own, nor had they ever owned, or claimed" to have owned the portion of the esplanade referenced in plaintiffs complaint (NYSCEF Doc. No. 81, August 27, 2014 Letter). Said letter also demanded that plaintiff withdraw its complaint otherwise Joglo and Toussie would seek sanctions against plaintiff for prosecuting a frivolous action (id.).

Crance responded by letter dated September 4, 2014, stating that TB&S and plaintiff had "done their due diligence" and "a basic 'title/deed search, '" and determined that Joglo and Toussie "do in fact own at least a portion of the esplanade that borders [plaintiff s] property" and, further, that Joglo and Toussie "have held themselves out to be the owners to [plaintiff]..." (NYSCEF Doc. No. 79, September 4, 2014 Letter). Crance's letter further stated that if Joglo and Toussie were "willing to sign a settlement agreement that they do not own the esplanade that borders [plaintiff s] property...," then plaintiff would discontinue the action (id.).

Crance forwarded a copy of her letter to Arthur Wiener (Wiener), plaintiffs vice president, with a cover letter dated September 3, 2014 conveying her suspicion that Joglo and Toussie would either answer plaintiffs complaint or file a pre-answer motion to dismiss but that if they did not do either, TB&S would; be "filing a motion for default to move this matter along" (NYSCEF Doc. No. 103). According to plaintiff, the initial August 27, 2014 letter from Joglo and Toussie's counsel wherein he maintained that his clients were not the esplanade's owners was never forwarded to plaintiff.

In or about August 2018, Berger left TB&S to join Berger Fink. -

On or around December 31, 2018, Wiener, on behalf of plaintiff, purportedly complained to Berger that his firm had failed to timely seek a default judgment against Joglo and Toussie, among other things, and that the statute of limitations had expired. On January 2, 2019, Berger replied, via email, that he could still make the motion for default judgment, that the delay in doing so would not pose a problem, and "to that end" requested that Wiener sign a consent to change attorneys (NYSCEF Doc. No. 104, Berger Correspondence). Purportedly on that reassurance, plaintiff substituted Berger Fink as counsel for the 2014 Actions. However, a default judgment was never pursued by Berger Fink and, on March 22, 2019, plaintiff terminated Berger Fink as counsel.

On July 23, 2020, plaintiff commenced the instant action against Berger, TB&S, Berger Fink and Wishful alleging, in sum and substance: (1) malpractice for failing to obtain default judgments against Joglo and Toussie in the 2014 Actions (first cause of action); (2) malpractice for failing to sue the correct party within the statute of limitations period (second cause of action); (3) malpractice for collecting legal fees for the undertaking and commencement of the 2014 Actions when defendants knew or should have known said actions had no merit (third cause of action); (4) unjust enrichment for collecting legal fees but then failing to prosecute a viable action (fourth cause of action); and (5) entitlement to attorneys' fees for the instant action (fifth cause of action).

Plaintiff also seeks to recover against Wishful alleging that Wishful and Berger's previous and current law firms, TB&S and Berger Fink respectively, are alter egos of one another (Amended Complaint, ¶¶ 9, 10). Plaintiff alleges that Berger's law firms were/are undercapitalized in relation to their needs and thus were/are being financed by Wishful (id. at ¶¶ 16, 27). Further, that the entities share common office space, telephone numbers, employees and owners, and that corporate formalities are not observed (id. at ¶¶ 11-29).

Motions to Dismiss

In the instant motion, the Berger Defendants move, pre-answer, to dismiss plaintiffs complaint arguing that plaintiff cannot sustain a malpractice claim against them because the documentary evidence shows that the 2014 Actions against Joglo and Toussie were demonstratively without merit. In support, the Berger Defendants proffer the August 27, 2014 letter from Joglo and Toussie's counsel to Crance, as well as every recorded deed for the Property since 1968 which, the Berger Defendants contend shows that neither Joglo nor Toussie ever owned any portion of the esplanade abutting or adjacent to the Property at any time. The Berger Defendants posit that, based on these deeds, either plaintiff owns the esplanade or it is not owned by anyone. Because the 2014 Actions against Joglo and Toussie were meritless, the Berger Defendants contend that plaintiff cannot plead or prove that it would have recovered damages in the 2014 Actions "but for" their negligence.

To the extent that plaintiff claims that it was denied the opportunity to prosecute a r viable action against a different defendant, the Berger Defendants submit that same is insufficient to withstand their motion to dismiss because plaintiff fails to identify any such defendant against whom it would have obtained more advantageous results "but for" the Berger Defendants' negligence. Stated differently, the Berger Defendants contend that the issue is not whether plaintiff was deprived of an opportunity to sue a phantom defendant but whether plaintiff would have won against a specific defendant, which plaintiff fails to allege.

As for plaintiffs fourth cause of action sounding in unjust enrichment, the Berger Defendants contend that said claim is precluded by the express terms of the retainer agreements between plaintiff and the defendant law firms. Regarding plaintiffs fifth cause of action seeking attorneys' fees, the Berger Defendants argue that plaintiff fails to plead any facts showing a contractual or statutory basis to support an award of attorneys' fees incurred in this matter. Finally, the Berger Defendants seek sanctions against plaintiff pursuant to 22 NYCRR 130-1.1 for maintaining this action, which they argue is without merit in law and cannot be supported by any reasonable argument.

By way of a separate motion, Wishful also moves to dismiss plaintiffs complaint and joins in the Berger Defendants' arguments. In...