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October 24, 1995


The opinion of the court was delivered by: TRAGER

 TRAGER, District Judge,

 This case raises what appears to be the novel question of whether one is collaterally estopped from raising an issue which presumably need not have been addressed in an inquest proceeding, but, in this instance, was actually litigated. The question arises in the following context.


 The plaintiff, Lazar Levitin, brought this legal malpractice action in 1989 based on the defendants', Norman and Marshall Rosenthal, representation of Levitin in an action which was brought in 1984 based on events occurring in 1980. Hans Homburger v. Lazar Levitin, et. al., No. 84-5847, Order and Judgment (Sup. Ct., Kings Cty. Sept. 5, 1986), aff'd, 130 A.D.2d 715, 515 N.Y.S.2d 825 (2d Dep't. 1987), app. dismissed, 522 N.Y.S.2d 112 (1987). Consequently, the facts in this case are complicated by the multitude of proceedings that have occurred over this fifteen year time span.

 In 1980, Levitin entered into a limited partnership with Homburger called Ocean Parkway Medical Building (OPMB). The partnership leased the OPMB with the intent to renovate the building and sub-lease to medical-related tenants. After the renovations were completed, however, OPMB sued its architect, Ronald Goodman, for faulty design. OPMB settled the case for $ 300,000, and after its attorneys deducted their portion, OPMB eventually collected $ 228,000. Homburger v. Levitin, supra.

 Then, in 1984, Homburger sued Levitin and OPMB in state court for an accounting of the recovery obtained in the Goodman case. In this lawsuit, Levitin was represented by Norman Rosenthal and allegedly by Marshall Rosenthal, until they withdrew in August 1986. Pl's Amend. Complt. PP5-6. On September 11, 1986, Justice Gerald Held granted a default judgment to Homburger because Levitin refused to produce outstanding documents requested by a notice of discovery and inspection in July 1984. Justice Held's default was affirmed on appeal, Homburger v. Levitin, supra.

 Thereafter, in November 1986, following an extensive hearing, discussed below, a judgment was entered against Levitin for twenty-one percent of the amount recovered from Goodman, which percentage was exactly the share of the partnership that Homburger claimed was his. In addition, the judgment included an additional sum of $ 20,000 which the court found Levitin fraudulently induced Homburger to further invest, together with interest from the date of the commencement of the lawsuit.

 Now, the Rosenthals have moved for summary judgment again claiming that even if they were negligent and their negligence was the proximate cause of the default judgment, Levitin still would have lost the case because he had converted funds. Levitin responded that he had an affirmative defense to the state action which he did not have an opportunity to present because of the presumed negligence of the defendants. His affirmative defense was that Homburger was no longer a partner when the Goodman recovery was received *fn1" and, therefore, even if Levitin converted the funds, Homburger had no right to these funds. Levitin claims that he should, consequently, now be given the opportunity to establish this affirmative defense which he was prevented from doing because of the defendants' legal malpractice. The Rosenthals reply that Levitin's affirmative defense is without merit and, in any event, he is precluded from raising it. In answer to defendants' preclusion argument, plaintiff claims that summary judgment is not appropriate because he did not have a full and fair opportunity in the inquest to establish his affirmative defense and because the facts underlying the defense were never decided by the trial court.

 However, because of the extensive fact-finding of the prior proceeding, this court concludes that the plaintiff had a full and fair opportunity to raise his affirmative defense at the inquest, and this defense -- even if it was not necessary to Justice Held's decision -- was, in fact, actually decided against Levitin at that hearing. Alternatively, the state court justice, who would have been the trier of fact in this equitable action, made it abundantly clear that he found no merit in plaintiff's affirmative defense. Consequently, this affirmative defense should be precluded, and, accordingly, the defendants' renewed motion for summary judgment should be granted because even if the defendants' attorneys were negligent, their negligence was not the "but for" cause of plaintiff's damages.



 Federal courts must give the same preclusive effect to state court judgments as would be given by the courts of the judgment-rendering state. See Allen v. McCurry, 449 U.S. 90, 96, 66 L. Ed. 2d 308, 101 S. Ct. 411 (1980) Because the issue now argued to be precluded arose from a New York state court decision, New York's collateral estoppel rules apply.

 The doctrine of collateral estoppel precludes a party from re-litigating "an issue which has previously been decided against him in a proceeding in which he had a fair opportunity to fully litigate the point." Gilberg v. Barbieri, 53 N.Y.2d 285, 441 N.Y.S.2d 49, 50, 423 N.E.2d 807 (1981). In order to preclude an issue two requirements must be met. First, the identical issue necessarily must have been decided in the prior action, and second, the party to be precluded from re-litigating the issue must have had a full and fair opportunity to contest the prior determination. Kaufman v. Eli Lilly and Co., 65 N.Y.2d 449, 492 N.Y.S.2d 584, 588, 482 N.E.2d 63 (1985); Gilberg, 441 N.Y.S.2d at 50.

 The party seeking the benefit of collateral estoppel, here, the defendants, the Rosenthals, must prove the identity of the issues in the present litigation with the past action. Then, to refute the presumption of estoppel, the opposing party, here, the plaintiff, Levitin, must demonstrate the absence of a full and fair opportunity to litigate the issue in the prior action. Ryan v. New York Tel. Co., 62 N.Y.2d 494, 501, 478 N.Y.S.2d 823, 467 N.E.2d 487 (1984); Schwartz v. Public Administrator, 24 N.Y.2d 65, 298 ...

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