Court Opinion

ID: 5885239
Source: CourtListenerOpinion
Date Created: 2022-01-13 02:29:53.37996+00
Date Added: 2024-06-11T08:45:09.139909
License: Public Domain

OPINION OF THE COURT
Casey, J.
In March 1980, plaintiff was subpoenaed by the Attorney-General to give testimony at a hearing held pursuant to the Martin Act (General Business Law art 23-A). The purpose of the hearing was to investigate possible fraudulent or deceptive practices in the promotion and sale of participating interests in a limited partnership known as Michael Starbuck, Inc. and Associates, offered to the public through various stock brokerage firms. Plaintiff, a licensed securities broker, sold such interests to various persons through his employer, the firm of Fittin, Cunningham and Lauson, Inc. (Fittin, Inc.). Fittin, Inc. arranged for plaintiff to be represented at the Martin Act hearing by its attorneys, defendants herein. Plaintiff testified fully at the hearing. Subsequently, the Attorney-General presented evidence to a special Grand Jury and a multicount indictment was handed down charging plaintiff, among others, with several counts of grand larceny, State securities law violations and conspiracy, all stemming from allegedly fraudulent activities in selling interests in Michael Starbuck, Inc. and Associates. Although other principals in and employees of Fittin, Inc. were engaged in the same promotional activities, apparently plaintiff was the only one of them who was so indicted.
Following his indictment, plaintiff retained third-party defendants to defend him. After various pretrial motions, a plea bargain was negotiated, by virtue of which plaintiff was permitted to plead guilty to one misdemeanor count of violating the Martin Act (General Business Law § 352-c) for which he received a conditional discharge. Plaintiff then brought the instant action against defendants for malpractice arising out of their representation of him in connection with the Martin Act hearing.
In essence, the complaint alleges that defendants failed properly to prepare, advise and direct plaintiff as to the possible consequences of the hearing, his right to invoke his *52privilege against self-incrimination and to seek immunity from prosecution in exchange for cooperating with the Attorney-General in furnishing evidence against the actual principals in the scheme. Plaintiff further charges that these shortcomings in his representation were at least partly due to an undisclosed conflict of interest that defendants had in representing plaintiff’s employers and coemployees in the same investigation. Defendants brought third-party actions against third-party defendants. They then deposed plaintiff, following which they made the instant motion for summary judgment dismissing the complaint. Third-party defendants cross-moved for the same relief. Plaintiff opposed the motions on the merits and also argued that the motions were premature, since he had not yet had an opportunity to develop the evidence to support his claim through pretrial disclosure. Special Term denied the motions on the grounds of their prematurity and that there were outstanding issues of fact requiring a trial. This appeal by defendants and third-party defendants followed.
Special Term erred in denying the motions for summary judgment. Plaintiff’s conviction upon his plea of guilty, the validity of which cannot be attacked in this action, precludes him, as a matter of law, from establishing that defendants’ alleged malpractice was a proximate cause of the damages sustained by plaintiff. This conclusion may be obtained by following any one of three distinct but related paths of reasoning.
As in Claudio v Heller (119 Misc 2d 432), the damages sustained by plaintiff flow directly from his guilt of the criminal acts, conclusively established by his plea of guilty. At best, defendants’ inadequate and improper advice at the investigative stage of the criminal process was a contributing factor in the disclosure of plaintiff’s criminal conduct, but the criminal conduct remains the sole proximate cause of the ensuing investigation, indictment and conviction. Had plaintiff been innocent, defendants’ inadequate and improper advice would not have resulted in any of the damages claimed by plaintiff, for his testimony at the investigative hearing would not have revealed any wrongdoing. Conversely, had plaintiff received adequate and proper advice from defendants, plaintiff would still be a wrongdoer and it cannot be said that his criminal conduct would have gone undetected. Certainly, the law should not allow a wrongdoer to recover on such a premise.
Assuming that defendants’ alleged malpractice could be *53viewed as a cause of plaintiffs damages, the guilty plea entered by plaintiff constitutes a superseding cause. In view of the dramatic consequences of a guilty plea (see, People v Taylor, 65 NY2d 1, 5), and since plaintiff acted knowingly, voluntarily and intelligently when he entered his plea (see, People v Harris, 61 NY2d 9, 17), any causal link between defendants’ conduct and plaintiffs conviction must be considered as having been broken by plaintiffs own voluntary act resulting in the conviction.
In a similar vein, plaintiffs conviction upon his plea of guilty precludes him from establishing that he would have been successful in the underlying criminal action if defendants had exercised due care, a necessary element of his malpractice cause of action (see, Servidone Constr. Corp. v Security Ins. Co., 64 NY2d 419, 424). In particular, plaintiff cannot claim that he is innocent, for his plea of guilty signals an " 'intention not to litigate the question of his guilt’ ” (People v Taylor, supra, p 5, quoting People v Lynn, 28 NY2d 196, 201). Nor can plaintiff contend that he would not have entered his guilty plea if he had received proper advice from defendants, for such a claim constitutes an impermissible collateral attack upon the validity of the judgment of conviction (cf. Matter of Schacht v Allen, 20 AD2d 507, 511, lv denied 14 NY2d 485), which is subject to a presumption of regularity (see, People v Bell, 36 AD2d 406, 408, affd 29 NY2d 882). Plaintiff could have raised his claim of inadequate representation by way of postconviction motion (see, CPL 440.10).
To summarize, plaintiff stands convicted upon his plea of guilty in the criminal action, and the damages claimed by plaintiff flow directly and proximately from that conviction. Since plaintiff cannot collaterally attack the validity of his conviction and guilty plea in this action, the complaint must be dismissed for failure to establish that any alleged malpractice was a proximate cause of plaintiff’s damages. It follows that the third-party complaint must also be dismissed.