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DE CARLO v. RATNER

April 30, 2002

PHILIP DE CARLO, PLAINTIFF
V.
JAMES T. RATNER, DEFENDANT



The opinion of the court was delivered by: Naomi Reice Buchwald, U.S. District Judge

  OPINION AND ORDER

Plaintiff pro se, Philip De Carlo ("plaintiff" or "De Carlo"), filed this action on November 14, 2001, alleging legal malpractice, breach of contract, fraud, and civil rights violations pursuant to 42 U.S.C. § 1985, arising out of his representation by defendant James T. Ratner ("defendant" or "Ratner") in the case United States of America ex rel and Philip De Carlo v. Kiewit/AFC Enterprises, 94 Civ. 5741 (SWK). Presently before the Court is defendant's motion to dismiss this action as time barred under the relevant statute of limitations. Further, defendant moves for an Order directing plaintiff to pay attorney's fees and costs incurred by defendant in this action and enjoining plaintiff from filing any further litigation against defendant without first obtaining written permission from the Court pursuant to 28 U.S.C. § 1651 (a). For the following reasons, defendant's motion to dismiss is granted and defendant's motion for injunctive relief and sanctions is denied.

BACKGROUND

As described in plaintiff's Amended Complaint, the facts are as follows. In April of 1998, De Carlo hired Ratner to replace his former counsel Blodnick, Blodnick, & Zelin ("the Blodnick firm"), in the representation of De Carlo in his capacity as relator in the qui tam action United States of America ex rel and Philip De Carlo v. Kiewit/AFC Enterprises, 94 Civ. 5741 (SWK). In June of 1998, Ratner began urging De Carlo to dismiss several of his claims, telling De Carlo that he and the Assistant United States Attorney Robert Sadowski ("Sadowski"), who represented the United States in the case,*fn1 agreed that these claims were without merit. On June 29, 1998, De Carlo agreed to dismiss the first group of claims. He alleges that when he obtained a copy of the dismissal from the Clerk's Office, he discovered it had been altered after he signed it by Ratner to include the statement, "Defendants consent, subject to a reservation of rights to pursue plaintiffs for attorneys fees and costs under applicable law with respect to all claims ever asserted by plaintiff, regardless of their dismissal hereunder." See Am. Compl. ¶ 9.

During October and November of 1998, settlement conversations between the parties to the action continued. In October of 1998, Ratner and De Carlo proposed the dismissal of a second group of claims with the stipulation that De Carlo would share in the fees that would be paid to the Blodnick firm under the settlement ("the fee sharing proposal"). On October 23, 1998, De Carlo signed a stipulation to this effect. De Carlo alleges that unbeknownst to him, the fee sharing proposal was never agreed to by the Government or filed with the Court. However, De Carlo does admit that on November 9, 1998, Ratner informed him that Kiewit would not agree to any fee splitting. Further, Ratner told De Carlo that AUSA Sadowski had decided to dismiss the balance of the action and that De Carlo was required to attend a conference with the Court scheduled for the next day.*fn2 The next day, prior to the conference, Sadowski himself informed plaintiff that based upon the Government investigation and in consideration of the Government's potential liability for Kiewit's attorney's fees and costs, he had decided to dismiss the case. In addition, Ratner informed plaintiff that he would not file an objection to the Government's dismissal, and that if De Carlo wished to do so, he would have to find another attorney to represent him. Subsequently, on the record at the November 10 conference before Magistrate Judge Peck, De Carlo agreed to the settlement of the case.*fn3 Under the terms of the settlement, the Blodnick firm itself did not receive a fee award.

Although plaintiff admits that Ratner notified him on November 9 that Kiewit would not agree to any fee sharing between the Blodnick firm and De Carlo, he asserts that he was "coerced and manipulated regarding the fee splitting issue." Compare Am. Compl. ¶ 12 with ¶ 16. De Carlo claims that he was manipulated into believing that the settlement provided for a fee award to the Blodnick firm in which De Carlo would share. After the settlement conference before Judge Peck on November 10, De Carlo asked Ratner to request that the Court set aside his oral settlement. When Ratner refused to do so, De Carlo wrote to Judge Peck in a letter dated November 13, 1999, notifying him of the alleged coercion and manipulation, and requesting that the settlement be set aside. See Am. Compl. ¶ 16. In this letter, De Carlo specifically states, "I have now learned that Kiewit has no intention of reimbursing the Blodnick firm for any legal fees, therefore my recovery in this matter will be virtually nil if you allow this to proceed." See Am. Compl. Ex. D. In response, Judge Peck informed De Carlo that any further action needed to be made by motion. However, Ratner refused to make the motion at De Carlo's request, raising his fear of liability for court sanctions. See also Am. Compl., Ex. E (letter from Ratner to De Carlo discussing grounds for refusing to move to set aside the settlement).

On December 4, 1998, De Carlo signed the Stipulation and Order of Settlement and Dismissal. De Carlo claims that although this agreement contained terms not included in the oral settlement of November 10, Ratner failed to protest their inclusion. More specifically, De Carlo alleges that although it should have been apparent to Ratner from the Stipulation and Order of Dismissal that "the Government was pursuing an alternate remedy," and he therefore should have demanded "disclosure of the collateral agreement between the Government and Kiewit," Ratner failed to do so and thereby failed to protect De Carlo's property interest in the settlement. See Am. Compl. ¶ 32.

On February 24, 1999, a conference was held before Judge Kram to address De Carlo's complaints about the fairness of the settlement agreement. After hearing from all the involved parties, Judge Kram found that De Carlo was informed prior to the November 10, 1998 settlement that the Government and Kiewit had rejected De Carlo's fee sharing proposal, and that De Carlo had entered the settlement with full knowledge of its terms. Accordingly, Judge Kram rejected De Carlo's arguments and so ordered the settlement. See Koenigsberg Decl. Ex. I, Tr. of Conference with Judge Kram, held Feb. 24, 1999.

DISCUSSION

A. Legal Malpractice and Contract Claims

The statute of limitations for a claim of legal malpractice is three years regardless of whether the underlying claim is based in tort or contract. See C.P.L.R. 214(6); Chase Scientific Research, Inc. v. NIA Group, Inc., 96 N.Y.2d 20, 24 (2001). Such an action accrues not when the plaintiff discovers the legal malpractice, but when the malpractice is committed. Shumsky v. Eisenstein, 96 N.Y.2d 164, 166 (2001). Ratner argues that De Carlo's claim is barred by the three year statute of limitations because his claim accrued no later than November 10, 1998, and this case was not filed until November 14, 2001. Further, with respect to plaintiff's argument that the settlement agreement signed by De Carlo on February 4 contained new terms that Ratner should have objected to, defendant argues that plaintiff's allegations fail to state a claim. We take each of these arguments in turn.

1. Any claim for malpractice with respect to the fee sharing proposal accrued no later than November 10, 1998.

Based on the facts alleged in the amended complaint, it is clear that the alleged injury of which De Carlo complains surrounding the fee sharing proposal occurred no later than the settlement conference with Judge Peck on November 10, 1998. According to De Carlo's own allegations, by that time Ratner had conducted settlement negotiations on De Carlo's behalf, notified De Carlo that Kiewit would not agree to any fee sharing provision, and recommended that De Carlo accept the proffered settlement. In fact, De Carlo admits in his Amended Complaint that Ratner told him on November 9 that Kiewit did not consent to his fee sharing with the Blodnick firm, and that Ratner told him on November 10 that he would not file an objection on De Carlo's behalf to the Government's dismissal. See Am. Compl. ¶¶ 13, 16. In addition, De Carlo's letter to Judge Peck dated November 13, 1998, describing De Carlo's dissatisfaction with the terms of the November 10 oral settlement, illustrates that any alleged malpractice surrounding the rejected fee sharing proposal had already occurred. Further, in ruling that the settlement should not be set aside, Judge Kram found that at the time De Carlo entered into the settlement before Judge Peck, he was fully aware that the Government and Kiewit had rejected the fee sharing proposal. See Koenigsberg Decl. Ex. I, Tr. of Conf., Feb. 24, 1999. These facts make clear that not only did any alleged malpractice surrounding the fee sharing proposal occur by November 10, but De Carlo was even aware of the terms of the settlement no later than November 13, 1998. For this reason, because the present action was not commenced until November 14, 2001. plaintiff's malpractice and contract claims are barred under the three year statute of limitations.

2. De Carlo's signing of a written settlement agreement on February 4, 1999, is not a basis for finding that De Carlo's malpractice claim is within ...

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