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.
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 ¶
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.)
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 ...