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Trepel v. Dippold

October 27, 2006


The opinion of the court was delivered by: Denise Cote, District Judge


Plaintiff Martin Trepel ("Trepel") was the plaintiff in a prior federal civil action for fraud in this district brought against African art dealer Mourtala Diop ("Diop"). Trepel obtained a default judgment against Diop, but has seen only a part of the total judgment satisfied because Diop fled the district with most of his possessions and has not been located. Trepel has now filed suit against Diop's counsel Karen Dippold ("Dippold") and Dippold's law firm Beldock Levine & Hoffman LLP ("Beldock Firm"), claiming that Dippold assisted Diop in fleeing the jurisdiction with his assets, thus violating a restraining order and depriving Trepel of the opportunity to recover his damages. The defendants Dippold and the Beldock Firm brought third-party claims against the attorneys who represented Trepel in the underlying action, P. David Palmiere ("Palmiere"), Aidan McCormack ("McCormack"), and the law firm Hodgson Russ, LLP ("Hodgson Firm"), for contribution based on legal malpractice.

Dippold and the Beldock Firm have moved for summary judgment against Trepel on all claims. Trepel has moved for partial summary judgment against the defendants on three of their defenses. McCormack and the Hodgson Firm have moved for summary judgment against the defendants on all claims. For the following reasons, defendants' motion is granted in part and denied in part, plaintiff's motion is denied, and third-party defendants' motion is denied.


The following facts are not in dispute or are taken in the light most favorable to the party opposing summary judgment, unless otherwise noted. Plaintiff Trepel, a resident and citizen of Florida,*fn1 filed suit against Diop, a citizen of Senegal, on September 24, 2002 in the Southern District of New York for fraud stemming from Diop's sale of African tribal artwork to Trepel. Trepel alleged that reports assessing the authenticity of the artwork had been altered to hide the fact that the artwork was not as old as claimed, and that had he been aware of the true age and condition of the artwork, he would not have purchased it. Trepel paid Diop approximately $240,000 for the artwork, which Trepel alleged was essentially without value. Trepel subsequently filed a criminal complaint with the New York City Police Department, and Diop was arrested and later released on bail. Dippold and the Beldock Firm represented Diop in both the civil and the criminal matters.

In connection with the police investigation of the criminal complaint, the police executed a search warrant on Diop's cooperative apartment. Diop's art collection was stored in the apartment. After Diop was released on bail on October 23, 2002, he was prevented from returning to his apartment by the Assistant District Attorney assigned to the case, Daniel Zambrano ("ADA Zambrano"). The police department was going to execute another search warrant on the apartment, and they did not want Diop removing any of his possessions from the apartment. The following day, Dippold faxed a memo to ADA Zambrano asking for guidance regarding the cooperative apartment owned by Diop and another apartment rented by him, such as whether Diop could enter and occupy his apartments and "mov[e] household items during the course of performing the basic daily activities." Specifically, Dippold asked ADA Zambrano whether the "apartments and the contents therein are considered to be 'seized property.'" ADA Zambrano left a voicemail message on October 25, informing Dippold that the items were not considered seized.

In the meantime, on October 17, 2002, by an Order to Show Cause filed in this district, Trepel sought an order of attachment and restraining order on Diop's cooperative apartment and other assets. Dippold sought an adjournment of the hearing by letters dated October 18 and October 23, stating in both that Diop's apartment and assets had been seized by the police department. At a hearing held on October 28 before the Honorable Gerard E. Lynch, Dippold and her husband and colleague Myron Beldock ("Beldock") appeared on Diop's behalf. Dippold and Beldock opposed the attachment for various reasons, including the fact that there was "a seizure order from the criminal case which basically doesn't allow him to do anything."*fn2 Neither Dippold nor Beldock mentioned in the hearing or afterwards ADA Zambrano's directive that Diop's assets were not "seized." Judge Lynch found little prejudice to Diop from an attachment because "everything has been seized already," and ordered an attachment of Diop's apartment. As for the rest of the assets, Judge Lynch directed the attorneys to return with an appropriately worded order that would restrain Diop's assets other than those necessary for living expenses and legal fees. The parties ultimately could not agree on language, and on November 13, Judge Lynch signed an order of attachment of his own.

In addition, in late October 2002, Diop was prevented from scheduling a move-out date from his apartment by the building superintendent Rudy Bachraty ("Bachraty") based on Bachraty's understanding that the contents of Diop's apartment had been seized by the District Attorney's Office. On November 1, Dippold sent a letter to Bachraty assuring him that ADA Zambrano had told her that Diop's personal property was not being seized and that the "search warrant proceedings do not prevent Mr. Diop from removing such property as he wishes from his apartment."*fn3 The letter made no reference to the attachment hearing before Judge Lynch. Over several days in mid to late November, after Judge Lynch had signed the order of attachment, Diop moved all of his property out of the apartment.

Judge Lynch's order of attachment required Diop to provide an accounting of all sums expended for living expenses and attorney's fees by the 15th of each month. On December 6, Diop informed Dippold that he had shipped his three luxury vehicles to Africa, but that he would bring the proceeds back to the United States. It was later discovered that the vehicles had already been shipped out on November 29. Dippold did not inform Judge Lynch or Trepel's counsel that she had just learned that Diop had violated the November 13 attachment order, but did report the $15,000 shipping expenses Diop incurred in shipping the cars to Africa in the monthly accounting, which was provided on December 13. In the meantime, on December 4, Trepel amended his complaint in the Diop lawsuit to include other pieces of artwork previously purchased from Diop, for a total of over $700,000. Diop failed to appear for a scheduled court date on January 8, 2003. Trepel obtained a default judgment against Diop on February 19, in the amount of $940,694.53. The defendants opposed the default judgment by arguing that the sales between Diop and Trepel had been illegal contracts. Defendants did not dispute the amount of damages, however, and no inquest was conducted before default was entered.

Following entry of the default judgment, Judge Lynch ordered the sale of Diop's apartment at a public auction. The first sale was scheduled for July 2, 2003, and because it was a sale of personalty in the form of co-op shares rather than real estate, the Sheriff's office advised that it would not post notice of the sale and would only provide one day's notice by publication in one newspaper. The first sale was adjourned in order to allow Trepel and the apartment's co-op board to discuss the sale, because the co-op board took the position that the Sheriff's sale might be invalid if the co-op board did not approve it.*fn4 Trepel then directed his attorneys not to provide information about the rescheduled sale to other potential bidders.*fn5

On August 1, 2003, Trepel entered into an agreement with the co-op board, which provided that if Trepel were the successful bidder at the Sheriff's sale, he would not reside in the apartment, but sell the apartment subject to approval by the coop board. A new Sheriff's sale was held on August 8, after one day's notice by publication. Trepel was the only bidder at the sale and purchased the apartment for $150,000, which was credited against the judgment. More than one year later, on October 1, 2004, Trepel resold the apartment for $650,000.*fn6 After expenses associated with the sale, Trepel kept approximately $585,000.

Procedural History

Trepel filed this action against Dippold, the Beldock Firm, and his own former attorneys' law firm the Hodgson Firm, on October 21, 2004. Trepel claimed that Dippold had frustrated a restraining order by intentionally facilitating Diop's removal of his assets from the district and depriving Trepel of the opportunity to recover his damages. The Hodgson Firm was voluntarily dismissed from the action by stipulation on January 18, 2005. Defendants filed a motion to dismiss under Rule 12(b)(6), Fed. R. Civ. P., which was denied. Trepel v. Dippold, 04 Civ. 8310 (DLC), 2005 WL 1107010 (S.D.N.Y. May 9, 2005). Subsequently, the defendants were permitted to file a third-party complaint pursuant to Rule 14(a), Fed. R. Civ. P., against the Hodgson Firm and two of Trepel's attorneys in the underlying action against Diop, McCormack and Palmiere. Trepel v. Dippold, 04 Civ. 8310 (DLC), 2005 WL 2206800 (S.D.N.Y. Sept. 12, 2005). The defendants claimed that the Hodgson Firm, McCormack, and Palmiere were negligent in protecting Trepel against the risk that Diop would attempt to remove his assets from the jurisdiction, and that this gives rise to a claim for contribution. On October 27, 2005, Trepel filed an action against McCormack, but that action was voluntarily discontinued on August 14, 2006. After the close of fact discovery, Trepel sought to amend the complaint to add Beldock as a defendant, but his motion was denied. Trepel, 2006 WL 1359964.

Defendants have moved for summary judgment against Trepel on all claims raised by Trepel in his complaint. Trepel has moved for partial summary judgment against the defendants on three of their defenses regarding the calculation of damages. Third-party defendants the Hodgson Firm and McCormack have moved for summary judgment against the defendants on all claims. At this time, no motions have been filed by third-party defendant Palmiere.


Summary judgment may not be granted unless all of the submissions taken together "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), Fed. R. Civ. P. The moving party bears the burden of demonstrating the absence of a material factual question, and in making this determination the court must view all facts in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When the moving party has asserted facts showing that the non-movant's claims cannot be sustained, the opposing party must "set forth specific facts showing that there is a genuine issue ...

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