Opinion
03-CV-0074E(Sr).
August 10, 2004
ORDER
WHEREAS plaintiff ("BBOR") filed this action on January 28, 2003 to enforce a Stipulation Regarding Substitution Of Counsel Of Record that was "So Ordered" by Judge Curtin on April 4, 1998 ("Substitution Order"); and
WHEREAS BBOR filed a motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure ("FRCvP") on February 23, 2004; and
WHEREAS this Court, in an Order dated May 13, 2004, denied BBOR's motion on the ground that it failed to comply with Rule 7.1(e) of the Local Rules of Civil Procedure ("LRCvP"); and
Plaintiff's counsel indicated that he did not file a memorandum of law because he believed there to be no genuine issue of material fact. First, this explanation fails to address the mandatory language of LRCvP 7.1(e) ("Absent leave of Court * * * the moving party [seeking summary judgment] shall file * * * a memorandum of law * * *. Failure to comply with this subdivision may constitute grounds for resolving the motion against the non-complying party."). Second, taking plaintiff's counsel's argument to its logical extension, LRCvP 7.1(e) would be a dead letter in contract actions because every attorney seeking summary judgment to enforce a contract ostensibly believes there to be no genuine issue of material fact. Third, case law contained in BBOR's memorandum of law in support of reconsideration (i.e., granting summary judgment) demonstrates that a memorandum of law was not only feasible but helpful to the Court (i.e., the purpose of LRCvP 7.1(e)).
WHEREAS BBOR filed a motion for reconsideration on June 14, 2004 asking this Court to reconsider the May 13 Order and to award it summary judgment against Logan; and
WHEREAS this Court has ample discretion to reconsider the May 13 Order — discretion that this Court will elect to exercise; and
United States v. Lauersen, 348 F.3d 329, 338 (2d Cir. 2003) ("[A]ny interlocutory ruling can be reconsidered prior to the entry of a final judgment [under FRCvP 54(b)]."), cert. denied, 124 S.Ct. 2190 (2004); Sierra Club v. U.S. Army Corps of Eng'rs, 732 F.2d 253, 256 (2d Cir. 1984) ("A trial court's power to modify, like the power over all its orders, is inherent."); Kliszak v. Pyramid Mgmt. Group, Inc., 1998 WL 268839, at *1 (W.D.N.Y. 1998) (granting motion to reconsider denial of summary judgment and citing the advisory committee notes for the 1946 amendment of FRCvP 60 for the proposition that "interlocutory judgments are * * * left subject to the complete power of the court rendering them to afford such relief from them as justice requires"); D.A. Elia Constr. Corp. v. U.S. Fid. Guar. Co., 1997 WL 215526, at *2-3 (W.D.N.Y. 1997) (same).
WHEREAS BBOR is entitled to summary judgment because the Substitution Order is a Court Order that is not subject to Logan's asserted contract defenses; and
Cf. Scelsa v. City Univ. of N.Y., 76 F.3d 37, 42 (2d Cir. 1996) ("[A]lthough the Dismissal Order was drafted by the parties and stipulated to, it was not simply a stipulation or contract between them. When Judge Motley `so ordered' the dismissal, the document became an order of the district court.").
WHEREAS Logan cannot assert fraud as a basis for reconsideration of the Substitution Order because FRCvP 60(b)(3) would have required him to do so no later than one year after the Substitution Order was entered on April 4, 1998; and
See, e.g., Silverman v. Rosenfeld, 2004 WL 1259044, at *1 (2d Cir. 2004) (applying FRCvP 60(b)(3)).
WHEREAS, even assuming arguendo that the Substitution Order is merely a contract between, inter alios, Logan and BBOR, BBOR is nonetheless entitled to summary judgment because, even if the parties' contract was induced by BBOR's alleged fraud, (1) the contract would be voidable, not void, (2) Logan would have to affirm or disavow the contract, (3) Logan affirmed or ratified the Substitution Order because he has accepted the benefits thereunder and (4) Logan cannot accept the benefits of the Substitution Order while avoiding the corresponding obligations thereunder; and
Ferguson v. Lion Holding, Inc., 312 F. Supp. 2d 484, 498-500 (S.D.N.Y. 2004) (holding that a contract induced by fraud is voidable and that an aggrieved party must either affirm or disaffirm the contract and that the aggrieved party may not both retain benefit of contract while ignoring its obligations thereunder); cf. Turkish v. Kasenetz, 27 F.3d 23, 28 (2d Cir. 1994) ("A party who has been fraudulently induced to settle a claim may either (1) rescind the settlement or (2) ratify the settlement, retain the proceeds, and institute an action to recover fraud damages.").
WHEREAS there is no genuine issue of material fact that (1) the Substitution Order entitled BBOR to "20% of the gross legal fees paid to Logan" by settlement or judgment, (2) that Logan received a fee of $840,000 after settling Roll's personal injury case and (3) that Logan has refused BBOR's request for payment; and
Grasso v. Kubis, 198 A.D.2d 811, 812 (4th Dep't 1993) ("It is well established that an agreement between attorneys regarding the division of a legal fee is valid and enforceable in accordance with its terms, `provided that the attorney who seeks his share of the fee contributed some work, labor or service toward the earning of the fee'") (citation omitted). Although Logan asserts that BBOR fraudulently induced him to enter into the stipulation, his remedy if any would be an action for fraud damages because he has not asserted a counterclaim for fraud. Ferguson, supra note 5, at 498. This Court does not address the timeliness of such a claim.
WHEREAS Disciplinary Rule 2-107(A)(2) is inapplicable because the Substitution Order related to a substitution of counsel approved by Judge Curtin rather than a fee agreement governing joint representation by multiple attorneys; and
WHEREAS BBOR is entitled to $168,000 from Logan with interest; it is accordingly
ORDERED that plaintiff's motion for reconsideration is granted, that this Court's Order dated May 13, 2004 is vacated, that plaintiff's motion for summary judgment is granted, that the trial scheduled for September 20, 2004 is canceled, that defendant shall pay plaintiff $168,000 plus interest as calculated under 28 U.S.C. § 1961(a) by September 6, 2004, that this Court retains jurisdiction over this case for purposes of enforcing this Order and the Substitution Order and that the Clerk of this Court shall close this case.