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ROSENSTOCK v. FINK

December 1, 1972

Mark E. ROSENSTOCK, Jr., Plaintiff,
v.
Max FINK, Defendant


Brieant, District Judge.


The opinion of the court was delivered by: BRIEANT

MEMORANDUM

BRIEANT, District Judge.

 By personal service in this State, on April 6, 1972, of a summons in the Supreme Court of the State of New York, Westchester County, plaintiff, a resident of this District, sued defendant, a citizen of California, for damages in the amount of $250,000.00 arising out of an alleged breach by defendant, a California attorney, of the professional duty of confidentiality.

 The action was removed to this Court by defendant on or about May 26, 1972 on grounds of diversity of citizenship (28 U.S.C. § 1441).

 Briefly, plaintiff claims that an attorney-client relationship existed in 1968 between himself and defendant, through which defendant learned of the cancellation of a contract which plaintiff had for the shipment (sic) of 5,000 Oldsmobile automobiles. Whether such information was in fact confidential, or whether it was also known to others, does not appear.

 Subsequently, we are told by the complaint, the defendant undertook to represent plaintiff's then wife, Dale Rosenstock, in matrimonial litigation in the courts of California and elsewhere. We are not told whether plaintiff made a prompt protest of this apparent conflict of interest.

 Thereafter, it is alleged that defendant, while acting as Dale Rosenstock's attorney, in the course of a California state court hearing, made false and fraudulent representations to the state court in respect of the 5,000 Oldsmobiles, and revealed a letter to third parties pertaining to such sale, and did so as part of an effort to exaggerate plaintiff's financial resources.

 The action is not yet at issue. The complaint does not tell us how the claimed damages in the sum of one-quarter million dollars are computed. Indeed, it is hard to see how the plaintiff can show a good faith claim for more than $10,000.00 in damages. Presumably he was well able to show the California court that the Oldsmobile shipment, or sale, if that is what it was, had been cancelled without profit to him, if that in fact happened. Presumably too, the California court had full control over its officer and could have disqualified defendant from appearing before it adversely to his former client, or could have disciplined him, or both.

 It is a fanciful assumption that the California court could not perceive the underlying truth with respect to the Oldsmobiles, or that this plaintiff could not readily prove, by document, the exact status of the transaction, to the satisfaction of that court. More so is the suggestion that defendant's conduct, however unethical it may be, was the proximate cause of any actual financial damage to plaintiff.

 While plaintiff also claims exemplary, or punitive damages, such damages may not be recovered under California law in the absence of actual or compensatory damages. Such damages are regulated by § 3294 of the Civil Code of California which reads as follows:

 
"§ 3294. Exemplary damages; when allowable
 
In an action for the breach of an obligation not arising from contract, where the defendant has been guilty of oppression, fraud, or malice, express or implied, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant."

 That statute has been interpreted as follows:

 
"'The foundation for the recovery of punitive or exemplary damages rests upon the fact that substantial damages have been sustained and punitive damages are not given as a matter of right, nor can they be made a basis of recovery independent of a showing which would entitle the plaintiff to an award of actual ...

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