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CIOCCA v. NEFF

June 20, 2005.

GIACOMO A. CIOCCA, Plaintiff,
v.
GREGOR N. NEFF and WHITMAN, BREED, ABBOTT & MORGAN, LLP, Defendants.



The opinion of the court was delivered by: LAURA TAYLOR SWAIN, District Judge

MEMORANDUM OPINION AND ORDER

Before the Court are the motions of Defendants Gregor N. Neff ("Neff") and Whitman, Breed, Abbott & Morgan ("Whitman, Breed") (together, "Defendants") for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Plaintiff Giacomo A. Ciocca ("Plaintiff" or "Ciocca") brings four causes of action: (1) legal malpractice; (2) breach of contract; (3) breach of fiduciary duty; and (4) promissory estoppel. The Court has subject matter jurisdiction of Plaintiff's claims pursuant to 28 U.S.C. § 1332(a). For the following reasons, Defendants' motion for summary judgment is granted in part and denied in part.

  BACKGROUND

  The following facts are undisputed except where characterized as allegations or contentions. In the early 1990s, Ciocca was Chairman and CEO of Megatrend Telecommunications, Inc. ("Megatrend"), a telecommunications company. (Dep. of Giacomo A. Ciocca, Nov. 14, 2003 ("Ciocca Dep."), at 4.) In 1995, Megatrend filed for bankruptcy protection. (Aff. of Gregor Neff ¶ 13.) Megatrend had retained Neff (at the time a partner in the law firm of Curtis Morris & Safford) to prosecute a patent application. (Neff Aff. ¶ 11.) Megatrend was granted U.S. Patent No. 5,631,947 (the "Patent") in 1997, and the rights to the Patent were subsequently assigned to Ciocca in exchange for releasing his creditor claims against Megatrend in connection with the bankruptcy proceedings. (Decl. of Giacomo A. Ciocca ¶ 6.)

  Upon receiving a letter from Daniel A. DeVito, Esq., of Weil, Gotshal, & Manges LLP, who represented a party interested in purchasing Ciocca's rights to the Patent, Plaintiff retained Neff (who was by then a partner at Whitman, Breed) to negotiate the sale. (Ciocca Dep. at 36-38, Nov. 14, 2003.) During discussions with Ciocca about the representation, Neff informed Ciocca that Neff had never been fully paid for the patent prosecution, and that the outstanding debt was $60,000 ($42,000 in fees, $18,000 in interest). (Neff Aff. ¶ 29.) Ciocca and Neff agreed that the $60,000 would be paid from the proceeds of the Patent sale. (Defs.' Rule 56.1 Statement ¶ 39; Pl.'s Rule 56.1 Statement ¶ 39.)

  Topp Telecom, Inc. purchased the Patent for $850,000 on June 29, 1999. (Neff Aff. ¶ 47.) Topp Telecom, Inc., which subsequently changed its name to TracFone Wireless, Inc. ("TracFone"), sued Ciocca for breach of contract with respect to assignment of the Patent in an action styled TracFone Wireless, Inc. v. Giacomo (a/k/a Jack) A. Ciocca, No. 02-CV-1252 (S.D.N.Y.). That action was dismissed pursuant to a stipulation of the parties (the "TracFone Contract Litigation").

  Ciocca alleges in his Amended Complaint in this action that the Patent should have been appraised prior to the sale to TracFone. (Am. Compl. ¶ 18.) He contends that the Patent was undervalued at the time of sale. Ciocca further alleges that Neff, as his attorney, never suggested a valuation of the Patent, and that he would have agreed to have such a valuation performed. (Ciocca Decl. ¶ 11; Ciocca Dep. at 44, Nov. 14, 2003.) Neff contends that he suggested an "investigation of the market" to Ciocca, but that Ciocca never instructed him to pursue one. (Neff Aff. ¶¶ 20, 47; Dep. of Gregor Neff at 69.)

  Plaintiff also alleges that Neff created a conflict of interest by agreeing to represent TracFone prior to the conclusion of his representation of Ciocca in the sale of the Patent. Neff avers that his work for Plaintiff ended with the closing of the Patent sale and that, when he properly informed Plaintiff of his subsequent representation of TracFone, Plaintiff had no objection. (Neff Aff. ¶¶ 49, 52.) Plaintiff asserts that Neff and Whitman, Breed failed initially to disclose any understandings, agreements and/or discussions among Neff, Whitman, Breed and TracFone (Am. Compl. ¶ 14), and further alleges that Neff told him about representing TracFone prior to the execution of the Patent sale and that Ciocca never consented to the TracFone representation. (Ciocca Dep. at 30, July 18, 2002.)

  DISCUSSION

  Summary Judgment Standard

  Summary judgment shall be granted pursuant to Rule 56(c) of the Federal Rules of Civil Procedure where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The initial burden is on the moving party to show the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986); Am. Home Assurance Co. v. Zim Jamaica, 296 F. Supp. 2d 494, 498 (S.D.N.Y. 2003). To defeat a properly supported motion for summary judgment, the non-moving party "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. In deciding a motion for summary judgment, a court "must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor." Am. Cas. Co. of Reading, Pennsylvania v. Nordic Leasing, Inc., 42 F.3d 725, 728 (2d Cir. 1994) (internal citation omitted). Collateral Estoppel/Res Judicata

  Defendants contend that they are entitled to summary judgment because the prior resolution of similar claims raised by Ciocca in the TracFone Contract Litigation precludes Ciocca from raising the claims he seeks to prosecute in this action. In that breach of contract litigation, Ciocca asserted, but later withdrew, counterclaims alleging that TracFone had retained Neff in the course of negotiation of the Patent sale transaction in order to undermine the negotiation process and obtain the Patent for a more favorable price. The parties later settled their respective claims and counterclaims, and the TracFone Litigation was dismissed with prejudice pursuant to a so-ordered stipulation. (TracFone Wireless, Inc. v. Giacomo (a/k/a/ Jack) A. Ciocca, No. 02-CV-1252 (S.D.N.Y.), Stipulation and Order of Dismissal, Dec. 12, 2002.)

  Defendants assert that Plaintiff is precluded from litigating the claims he raised in the previous litigation with TracFone, which were withdrawn prior to disposition of the suit. As Plaintiff and Defendants use the terms "res judicata" and "collateral estoppel" interchangeably ...


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