Title: Joseph Moray v. Koven & Krause, Esqs.

State: new-york

Issuer: New York Appellate Court

Document:

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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
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No. 127  
Joseph Moray,
            Appellant,
        v.
Koven & Krause, Esqs.,
            Respondent.
Ronald Cohen, for appellant.
Ronald W. Weiner, for respondent.
READ, J.:
On December 31, 2007, plaintiff Joseph Moray commenced
this action for legal malpractice, breach of contract and
professional negligence against defendant Koven & Krause, Esqs.
by filing a summons with notice, which identified Warren Goodman,
Esq. as plaintiff's attorney.  The summons with notice was
apparently served on defendant on February 5, 2008.
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No. 127
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On February 25, 2008, defendant served Goodman with a
notice of appearance and a demand for a complaint.  When the
demand did not prompt a response, defendant on April 22, 2008
moved to dismiss the action pursuant to CPLR 3012 (b).  
By letter dated May 6, 2008, attorney Preston Leschins
informed defendant's professional liability insurance carrier
that his office had been "consulted" by plaintiff "in connection
with" plaintiff's claim "with a view towards substituting for"
Goodman.  The letter characterized Goodman as plaintiff's "former
counsel" who was "no longer practicing law."  Leschins asked for
"the opportunity to speak with" the carrier about "resolution [of
the matter] in an amicable fashion," and at the carrier's
"earliest convenience."  Plaintiff was copied on this letter.    
On May 23, 2008 -- the motion's return date --
defendant's counsel had a conversation with Goodman, "who advised
that he had been suspended from the practice of law months
earlier"; at Goodman's request, defendant's counsel agreed to
adjourn the motion to dismiss until June 13, 2008.  Later that
day, he spoke to Leschins, "who confirmed that he had consulted
with plaintiff weeks earlier," but "refused to state whether he
would be appearing as attorney for plaintiff" in the lawsuit.  
On or near the adjourned return date, Goodman --
indicating that he was mindful that his license had been
"suspended on or about January 24, 2008" and was therefore "being
careful not to practice law" -- submitted a "factual" affidavit
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No. 127
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in opposition to the motion to dismiss.  Styling himself as
plaintiff's "former attorney," Goodman stated that he had
"advised [his] former client in writing of [his] situation and
told him to get new counsel"; however, he did not say when he did
this.  Goodman further represented that he "[understood] that
[plaintiff had] been diligently pursuing new counsel," but had
"not yet retained a new attorney" and was "still continuing to
look for a new lawyer."  
Goodman explained that the summons with notice was
served after his suspension because it had been given to the
process server beforehand; he annexed to his affidavit a draft
complaint that he claimed to have prepared prior to his
suspension.  The draft complaint alleged that defendant's
predecessor law firm had represented plaintiff "in a lawsuit
involving [his] efforts to purchase real property in Yonkers,
NY," which was dismissed pursuant to CPLR 3216 for want of
prosecution.  Goodman asked the court to deny defendant's motion
"in the interests of justice," and to grant plaintiff 30 days to
finalize the complaint with a new attorney.  
On June 19, 2008, Supreme Court granted the motion and
dismissed the action for non-service of the complaint, observing
that plaintiff had neither demonstrated a meritorious cause of
action nor proffered a reasonable excuse for his default, as was
required in order to forestall dismissal under CPLR 3012 (b). 
The judge noted that plaintiff had neglected to submit an
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No. 127
1As noted previously, the record reveals that Goodman was
suspended from the practice of law in late January 2008, but not
the date when Goodman advised plaintiff of the suspension, or
whether or when plaintiff may have otherwise learned about
Goodman's disability.
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affidavit of merits; further, although plaintiff had "learned
from Mr. Goodman on or about the end of January, 2008 of Mr.
Goodman's suspension and plaintiff's need to retain new counsel,"
he did not make "any efforts to retain new counsel before the
lapsing of the statutory period during which [he] was required to
serve his complaint."  Finally, Supreme Court declined to allow
plaintiff a brief period of time to retain new counsel on the
ground he had already enjoyed a grace period of "approximately
five months after his first having been [apprised] by Mr. Goodman
of his need to do [this]."1
On appeal, plaintiff was represented by counsel.  His
new attorney invoked CPLR 321 (c), which mandates that
"[i]f an attorney dies, becomes physically or
mentally incapacitated, or is removed,
suspended or otherwise becomes disabled at
any time before judgment, no further
proceeding shall be taken in the action
against the party for whom he appeared,
without leave of the court, until thirty days
after notice to appoint another attorney has
been served upon that party either personally
or in such manner as the court directs."
On May 12, 2009, the Appellate Division affirmed
Supreme Court's order, concluding that the trial court "did not
improvidently exercise its discretion in granting the defendant's
motion to dismiss the action" (62 AD3d 765, 765 [2d Dept 2009]). 
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No. 127
2Plaintiff suggests that Supreme Court "lost jurisdiction"
upon Goodman's suspension; however, the statute says that the
disability of a party's attorney creates an automatic stay -- not
that it divests the court of jurisdiction. 
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The court observed that because "plaintiff's contention that the
action was stayed pursuant to CPLR 321 (c) [was] raised for the
first time on appeal," it "[was] not properly before [the
Appellate Division]."  We subsequently granted plaintiff
permission to appeal, and now reverse.      
The command of CPLR 321 (c) is straightforward: if an
attorney becomes disabled, "no further proceeding shall be taken
in the action against the party for whom he appeared, without
leave of the court, until thirty days after notice to appoint
another attorney has been served upon that party either
personally or in such manner as the court directs" (emphasis
added).  As the Practice Commentaries explain, CPLR 321 (c)
brings about "an automatic stay of the action," which "goes into
effect with respect to the party for whom the [disabled] attorney
appeared" (Alexander, Practice Commentaries, McKinney's Cons Laws
of NY, Book 7B, CPLR C321:3, at 183).2  As a result,
"[d]uring the stay imposed by CPLR 321 (c), no
proceedings against the party will have any adverse
effect.  It lies within the power of the other side to
bring the stay to an end by serving a notice on the
affected party to appoint new counsel within 30 days .
. . If, at the end of the period, the party has failed
to obtain new counsel (or elected to proceed pro se),
the proceedings may continue against the party" (id.).
The stay is meant to "afford a litigant, who has, through no act
or fault of his own, been deprived of the services of his
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No. 127
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counsel, a reasonable opportunity to obtain new counsel before
further proceedings are taken against him in the action" (Hendry
v Hilton, 283 App Div 168, 171 [2d Dept 1953] [discussing Civil
Practice Act § 240, the predecessor statute to CPLR 321 (c)]).  
 This lawsuit was automatically stayed by operation of
CPLR 321 (c) on January 24, 2008, the date when plaintiff's
attorney was suspended from the practice of law.  Defendant never
acted to lift the stay by serving a notice upon plaintiff to
appoint new counsel within 30 days.  Thus, Supreme Court's order
dismissing the action must be vacated (see e.g. Galletta v Siu-
Mei Yip, 271 AD2d 486, 486 [2d Dept 2000] ["Since the judgment
entered upon the defendants' default in appearing at trial was
obtained without the plaintiff's compliance with CPLR 321 (c), it
must be vacated"]; McGregor v McGregor, 212 AD2d 955, 956 [3d
Dept 1995] ["The record reveals no compliance with the leave or
notice requirements of CPLR 321 (c).  The appropriate remedy for
a violation of CPLR 321 (c) is vacatur of the judgment"]).
Defendant resists this outcome on two grounds.  First,
he points out that CPLR 321 (c) permits further proceedings "by
leave of court."  Defendant contends that Supreme Court exercised
this "express statutory authority to hear and grant defendant's
motion to dismiss after [Goodman] was suspended from the practice
of law."  The drafter's notes on CPLR 321 (c), however, state
that the words "without leave of the court" were "designed to
allow the court to vary the [30-day] rule in cases where the stay
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No. 127
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of proceedings would produce undue hardship to the opposing
party, as where the time to take an appeal or other action would
run or where a provisional remedy is sought and speed is
essential" (Fourth Preliminary Report, Advisory Committee on
Practice and Procedure [1960 NY Legis Doc No. 20, at 191]).  No
remotely comparable situation existed at the time Supreme Court
dismissed this action.  Moreover, Supreme Court did not mention
CPLR 321 (c), much less articulate a basis for exercising its
discretion to relax the 30-day notice requirement.
Second, defendant argues that plaintiff is foreclosed
from bringing up CPLR 321 (c) for the first time on appeal, as
the Appellate Division concluded.  While we do not as a general
rule resolve cases on grounds not raised in the trial court, the
context here is unusual.  We are dealing with a statute intended
to protect litigants faced with the unexpected loss of legal
representation.  And there is no indication in this record that
plaintiff sought to raise CPLR 321 (c) only after having
conducted his lawsuit pro se for some period of time after his
attorney became disabled (cf. Telmark, Inc. v Mills, 199 AD2d
579, 580-581 [3d Dept 1993]).  As a general rule, unrepresented
litigants should not be penalized for failing to alert a trial
court to the existence of an automatic stay created for the very
purpose of safeguarding them against adverse consequences while
they are unrepresented.  And as the Practice Commentaries point
out, all it takes to end the automatic stay is service of a 30-
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No. 127
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day notice on the affected party. 
 
Accordingly, the order of the Appellate Division should
be reversed, with costs, the complaint reinstated, and the case
remitted to Supreme Court for further proceedings in accordance
with this opinion.
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *
Order reversed, with costs, complaint reinstated and case
remitted to Supreme Court, Westchester County, for further
proceedings in accordance with the opinion herein.  Opinion by
Judge Read.  Chief Judge Lippman and Judges Ciparick, Graffeo,
Smith, Pigott and Jones concur.
Decided October 26, 2010