The opinion of the court was delivered by: Carolyn E. Demarest, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the printed Official Reports.
Upon the foregoing papers, defendants Ulmer & Berne L.L.P. (the Firm), Jeffrey S. Dunlap, Esq., and Christopher P. Fisher, Esq.*fn1 (collectively referred to hereinafter as the Ulmer defendants or the movants) move for an order: (1) pursuant to CPLR 3211(a)(8) dismissing the complaint of plaintiffs Louis V. Greco, individually and as trustee for the GRAMCREFK Trust (the Trust), and the Trust, on the basis of lack of personal jurisdiction; or (2) pursuant to CPLR 3211(a)(5), dismissing plaintiffs' complaint based upon the expiration of the Statute of Limitations.*fn2
Facts and Procedural Background
Plaintiffs commenced this action seeking to recover damages for legal malpractice, breach of contract, undue enrichment and attorneys' fees that allegedly resulted from the Ulmer defendants' representation of plaintiffs in the underlaying action captioned Brian Sullivan v Alain Kodsi, et al., which was commenced in the Circuit Court of Cook County, Illinois (Illinois Case no. 00 L 1973) (the Illinois Action). That action stemmed from a business relationship allegedly entered into between Sullivan, Kodsi and Antonio Gracias in 1996 for the purpose of finding and purchasing mid-sized companies. Therein, Sullivan alleges that after a suitable company that had manufacturing facilities in Ohio was located as available, Kodsi and Gracias informed him that they intended to purchase it, but intended to exclude him from the transaction. The company was purchased on June 15, 1998 for $22,000,000. Sullivan thereafter commenced the Illinois Action seeking to recover damages, including $13,000,000 which he claimed was his share of the value of the company acquired, premised upon claims of breach of a partnership agreement, breach of a joint venture agreement, breach of contract, violation of the wage and payment act, quantum meruit, breach of fiduciary duty and tortious interference with a contract. Sullivan also interposed claims of fraudulent transfer, alleging that Kodsi transferred all of his assets to the Trust in order to shield himself from liability, as well as a claim seeking to pierce the corporate veil of other companies allegedly owned and controlled by Kodsi.
On July 10, 2002, the Ulmer defendants appeared in the Illinois Action as counsel for Kodsi; a company controlled by him, M.G. Capital, LLC; and the Neuberger Berman Trust Company of Delaware (Neuberger Delaware), as trustee of the Trust. Dunlap was the partner in the Firm who handled the action; Fisher was an associate who assisted Dunlap. In October 2005, Greco replaced Neuberger Delaware as the trustee and Neuberger Delaware was dismissed from the Illinois Action. At Greco's request, the Firm continued to appear on his behalf until he obtained separate counsel in Chicago on February 27, 2006.
In the instant action, plaintiffs allege that the Firm failed to respond to certain requests to admit in the Illinois Action, which resulted in an agreement pursuant to which Kodsi and the Trust conceded certain points that ultimately forced them to settle for an amount that was greater than that which would have been otherwise necessary. Plaintiffs further contend that the Ulmer defendants failed to institute an action for contribution against the parties who ultimately settled with Sullivan; failed to appeal when the Illinois court ruled adversely with regard to the court's jurisdiction over the Trust; and that the Firm's continuing representation of the Trust constituted a conflict of interest since it did not consult with either Greco or Kodsi with regard to course of action to be followed.
In support of their motion, the Ulmer defendants rely upon an affirmation from counsel and affidavits from Dunlap and Fisher to argue that this court may not properly maintain personal jurisdiction over them. More specifically, they assert that the Firm is headquartered in Cleveland, Ohio, with other offices in Cincinnati and Columbus, Ohio and Chicago, Illinois. The Firm, Dunlap and Fisher do not maintain an office in New York, do not regularly conduct business in this state, do not advertise here and do not own any property here, both Dunlap and Fisher are residents of Ohio and neither attorney is licensed to practice law in New York. Further, the underlying action that forms the basis for the claim of malpractice was defended in Cook County, Illinois; Kodsi solicited the Firm there; no services were performed with regard to the Illinois Action in the State of New York; and the Firm never entered into a written retainer agreement with plaintiffs.*fn3 Dunlap and Fisher each aver that he never met with Greco and did not travel to New York in connection with the Illinois Action; their only communications with Greco were by telephone, email and letter.
In opposition, plaintiffs argue that this court may exercise jurisdiction over the Ulmer defendants because the Firm had "New York residents and businesses for clients and have visited New York" in connection with the Illinois Action. In so arguing, plaintiffs rely upon an affidavit submitted by Greco in which he alleges that he is a resident of Brooklyn and that he has been the trustee of the Trust since the fall of 2005. Prior to that time, Neuberger Delaware entered into a fixed fee agreement with the Firm to represent it in the Illinois Action for $133,000; Greco contends that he affirmed that agreement when he became trustee and he sent a check in the amount of $100,000 to Dunlap on September 30, 2005. Greco further avers that Kodsi acted as his agent and met with Dunlap, Fisher and other representatives of the Firm when they visited plaintiffs' offices in New York and in Brooklyn; Greco, however, was unable to attend any of the formal meetings regarding the Illinois Action or the dinners where legal matters were discussed because of conflicts in his schedule. Greco further claims that although the Firm did not maintain an office in New York, their actions in this state caused significant injury to the assets and property owned by the Trust and by him in New York. Finally, Greco alleges that he personally had extensive telephone conferences, electronic mail discussions and mail correspondences with the attorneys of the Firm. He further avers that throughout the litigation, the Trust was doing business in New York.
Plaintiffs also rely upon an affidavit submitted by Kodsi in which he alleges that he is a resident of Kings County and that he maintains an office there. He further avers that he was responsible for retaining the Firm to represent himself and the Trust in the Illinois Action and that the Firm first appeared therein in July 2002. He paid the Firm a retainer of $50,000 in January 2004 and he and the Firm entered into an agreement for a fixed fee of $67,000 in March 2004 to represent him through the trial. Kodsi further alleges that the trustee of the Trust also entered into a fee agreement for $133,00 with the Firm. On at least three occasions, during the winter of 2004 and the spring of 2005, Kodsi recalls that Dunlap came to New York to conduct meetings with him, in his individual capacity and as the agent for Greco, in his individual capacity and as trustee for the Trust, in connection with the Illinois Action and litigation conducted in Pennsylvania; Fisher was allegedly present at least one meeting in New York. Kodsi also avers that during these meetings, Dunlap discussed the Trust using the Firm for other legal matters.
Plaintiffs further argue that they should be afforded the opportunity to conduct discovery in order to establish jurisdiction before the court issues a decision granting the pending motion
In reply, defendants allege that in opposition to their motion, plaintiffs submit false affidavits regarding Dunlap's and Fisher's alleged visits to New York in connection with the Illinois Action. To support this assertion, defendants allege that Kodsi's affidavit is insufficient because he fails to identify any of the dates on which these meetings occurred. Defendants also attach an affidavit from Robert S. Horvath, the Chief Financial Officer of the Firm, to demonstrate that neither Dunlap nor Fisher traveled to New York for meetings with Kodsi in connection with the Illinois Action. Dunlap did travel to New York on one occasion, on August 3 and 4, 2005, in connection with another case. Although Fisher traveled in connection with the Illinois Action on twenty occasions, none of the trips were to New York and he did not travel into this state on any other matters during 2004 and 2005. Both Dunlap and ...