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May 12, 2003


The opinion of the court was delivered by: Shira A. Scheindlin, United States District Judge


Plaintiffs brought a legal malpractice action against Steefel, Levitt & Weiss, P.C. ("Steefel") in New York State Supreme Court by filing a Summons With Notice. Steefel removed the action to this Court based on diversity of citizenship and then moved to dismiss for lack of personal jurisdiction or, alternatively, to transfer the case to the Northern District of California pursuant to either 28 U.S.C. § 1404 (a) ("section 1404(a)") or 28 U.S.C. § 1406 ("section 1406"). This was done without the benefit of a Complaint and before any jurisdictional discovery. Hence, there are neither jurisdictional allegations nor any specific allegations regarding the nature and scope of the alleged malpractice. Given this dearth of information, there is no basis on which to decide whether Steefel is subject to jurisdiction in New York or whether a change of venue is warranted for the convenience of parties and witnesses. However, because venue in the Southern District of New York is improper, the action will be transferred to the Northern District of California pursuant to section 1406.


A. The Parties and Other Relevant Persons

Steven Plotnicki is the president and sole shareholder of Astor Holdings, Inc. ("Astor"), a New York corporation, and the managing member of Robot Wars LLC ("RW"), a New York limited liability company. See Affidavit of Steven Plotnicki ("Plotnicki Aff.") ¶¶ 1-2. Plotnicki resides in New York which is also the principal place of business for both Astor and RW. See Id. ¶ 2. Steefel is a California professional law corporation with its principal place of business in San Francisco, California. See Declaration of Michael Early in Support of Defendant Steefel, Levitt & Weiss' Motion to Dismiss or Transfer ("Early Decl.") ¶¶ 1-2. Steefel was founded in 1980 and employees approximately 75 attorneys, one of whom maintains an office in Stamford, Connecticut. See Id. ¶¶ 2-3. Harvey S. Schochet is a practicing attorney at Steefel. See Declaration of Harvey S. Schochet in Support of Defendant Steefel, Levitt & Weiss' Motion to Dismiss or Transfer ("Schochet Decl.") at ¶ 1.

Marc Thorpe was a former business partner of Plotnicki who, along with Plotnicki, formed a venture known as "Robot Wars," which involved combat events between radio-controlled robots. See Id. ¶ 2. Fran Jacobs is a member of the law firm Duane, Morris & Heckscher ("DMH"), a law firm that represented Plotnicki and Astor in a New York litigation against Thorpe. See id. William Pascoe is an attorney retained by Plotnicki to represent RW in Thorpe's bankruptcy proceedings. See Plotnicki Aff. ¶ 8.

B. Thorpe's Bankruptcy Proceedings

On May 27, 1998, Thorpe and his wife, both of whom are California residents, filed for bankruptcy in the United States Bankruptcy Court for the Northern District of California (In re Marc Thorpe and Denise Thorpe, Debtors, Chapter 11 Case No. 98-11963). See 8/8/00 Memorandum of Decision of United States Bankruptcy Judge Alan Jaroslovsky ("Adversary Decision"), Ex. A to Schochet Decl. at 2. On February 2, 1999, Astor and Thorpe reached a settlement regarding the Robot Wars venture. See Schochet Decl. ¶ 4. The Settlement Agreement was approved by Judge Jaroslovsky on March 5, 1999. See id. Shortly thereafter, each side accused the other of breaching the settlement agreement. See id. After a year of informal negotiations, Thorpe commenced an adversary proceeding against Astor (Marc Thorpe v. Profile Holdings, Adversary Proceedings No. 00-1031) seeking a declaration that Astor must pay him the $250,000 specified in the 1999 settlement agreement. See Adversary Decision at 2. After a trial on the adversary proceeding, Judge Jaroslovsky found Thorpe in breach of the settlement agreement, assessed Astor's damages at $225,000, and offset those damages against the $250,000 due Thorpe, resulting in a net judgment of approximately $25,000 against Astor. See id. at 4. Pascoe represented Plotnicki and Astor in the bankruptcy and adversary proceedings. See Schochet Decl. at ¶ 4.

Seeking to appeal Judge Jaroslovsky's decision, Jacobs contacted attorney Schochet, of the Steefel firm, on behalf of Plotnicki. See id. ¶ 5. Steefel accepted the engagement to prosecute the appeal. See id. Jacobs informed Schochet, however, that Steefel's role would be limited to the appellate proceedings and that Pascoe would continue to represent Plotnicki and Astor in the Thorpe bankruptcy proceedings. See id. ¶ 6. During the remainder of 2000, Schochet worked very closely with Jacobs, Plotnicki and Pascoe in briefing the appeal to the United States District Court for the Northern District of California. See id. In January 2001, while the appeal was still being briefed, Thorpe filed a Plan of Reorganization (the "Plan") in the main bankruptcy proceeding.*fn1 See id. ¶ 8. One of the Plan's provisions sought to change the jurisdictional provisions agreed to in the 1999 Settlement Agreement. See Plotnicki Aff. at ¶ 9.

C. The Action Against Thorpe

RW, which was a party to the 1999 Settlement Agreement, sought advice from Schochet regarding its rights under the Settlement Agreement. See id. ¶ 10. Schochet allegedly advised RW that in order to prevent the Bankruptcy Court from changing the jurisdictional terms of the Settlement Agreement, a separate action against Thorpe would have to be commenced in the Southern District of New York prior to the Plan's confirmation hearing. See id. From his office in San Francisco, Schochet participated in several conference calls with Jacobs and Plotnicki in which the viability of a separate New York action against Thorpe was discussed. See Schochet Decl. ¶ 11. After receiving a copy of the Complaint drafted by Jacobs, Schochet allegedly advised Plotnicki that the Complaint did not violate the Bankruptcy Code and authorized its filing. See Plotnicki Aff. ¶ 11. On April 16, 2001, prior to the confirmation hearing,*fn2 Jacobs filed an action on behalf of RW against Thorpe in the Southern District of New York (the "New York action"). See Schochet Decl. ¶ 12.

Thorpe's attorney informally asked Jacobs to dismiss the New York action by May 2, 2001. See Chandler Letter. Because the New York action was not dismissed,*fn3 Thorpe filed a second adversary proceeding on May 3, 2001, naming Astor, RW, Plotnicki and his New York counsel, Jacobs and DMH (Marc Thorpe v. Robot Wars, LLC, Fran Jacobs, Duane, Morris & Heckscher, LLP, Astor Holdings and Steven Plotnicki, Adversay Proceeding No. 01-1061).*fn4 See Schochet Decl. ¶ 14. This adversary proceeding sought a declaration that the New York action against Thorpe violated Judge Jaroslovsky's discharge order in connection with the Plan confirmation. See id. ¶ 15. Thorpe simultaneously applied for a temporary restraining order,*fn5 a development that was discussed by Schochet, Plotnicki, Jacobs and Pascoe during a telephone conference.*fn6 See id. ¶ 17. In May of 2001, while attending his son's graduation at an east coast college, Schochet met with Plotnicki and Jacobs for more than two hours at her New York City office. See Plotnicki Aff. ¶ 19; Schochet Decl. ¶ 7. The participants discussed various strategies regarding Thorpe's adversary proceeding and the temporary restraining order entered by Judge Jaroslovsky. See Plotnicki Aff. ¶ 19. According to Plotnicki, Schochet did not advise him during that meeting that the consequences of a discharge violation would be a civil contempt hearing. See id. On the eve of trial, Plotnicki decided to settle the second adversary proceeding, the details of which were handled by Pascoe. See id. ¶ 24.

Plotnicki now accuses Steefel of legal malpractice because Schochet failed to advise him that the filing of the New York action against Thorpe could be considered a violation of the discharge order entered in connection with the confirmation of the Thorpe Plan and that the penalty for such a violation would be a finding of civil contempt against Plotnicki and his companies. See Plotnicki Aff. ΒΆ 4. Had Plotnicki received proper advice from Schochet, he claims that he would never have filed the New York action or would have withdrawn it prior to the filing of any adversary proceeding. See id. ...

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