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Weisshaus v. Fagan

July 15, 2010


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


This Opinion addresses the parties' March 8, 2010 cross-motions for summary judgment on plaintiff's claims, plaintiff's motion to dismiss defendant's counterclaim, and defendant's May 19, 2010 motion to amend his counterclaim and for other relief. For the following reasons, plaintiff's claims and defendant's counterclaim are dismissed.


The following facts are not in dispute except as indicated. Plaintiff Gizella Weisshaus ("Weisshaus"), a Holocaust survivor, first met pro se defendant Edward Fagan ("Fagan") in 1992. Fagan served as Weisshaus' attorney between 1992 and 1998, representing her in a number of lawsuits during that time period. Most notably, Fagan initially represented Weisshaus in a 1996 lawsuit that was consolidated into In re Holocaust Victim Assets Litigation (the "Swiss Banks Litigation"), which alleged that, inter alia, certain Swiss institutions aided and abetted the Nazi regime and looted the assets of Holocaust victims. See In re Holocaust Victim Assets Litigation, 105 F. Supp. 2d 139 (E.D.N.Y. 2000). The Swiss Banks Litigation settled in 1998 for $1.25 billion.

In this action, Weisshaus accuses Fagan of various wrongdoings during the course of their attorney-client relationship between 1992 and 1998. For instance, after opting out of the settlement in the Swiss Banks Litigation, Weisshaus alleges that she discovered that Fagan and another attorney had deceived the court by "improperly manufactur[ing]" an amended complaint in 2000 in that matter and backdating it to 1997. Weisshaus also alleges that in 1996, Fagan misappropriated funds from an $82,583.04 escrow account that Weisshaus entrusted to Fagan on behalf of the estate of Weisshaus' cousin, Jack Oestreicher ("Oestreicher"), for which Weisshaus was administratrix. In addition, Weisshaus alleges that Fagan failed to prosecute several other lawsuits on her behalf, which resulted in the dismissal of those actions or the entry of judgment against Weisshaus.

In April 1998, Weisshaus filed a grievance against Fagan with the Departmental Disciplinary Committee ("DDC") of the Supreme Court of New York, Appellate Division, First Department. The grievance concerned, inter alia, Fagan's failure to prosecute Weisshaus' lawsuits diligently and the misappropriation of funds from the Oestreicher escrow account. In a September 8, 1998 letter to Judith Stein, the DDC Principal Attorney, Weisshaus complained of, inter alia, Fagan's "failure to prosecute cases which he was paid to handle, and the refusal to reveal the whereabouts of [the Oestreicher] escrow account and possible commingling of funds and/or worse." The letter further states that Fagan had refused to turn over the Oestreicher escrow funds to Weisshaus, which "further point[ed] to the likelihood of commingling and disappearance of monies." Weisshaus' grievance against Fagan was later summarily dismissed by the DDC.*fn1

A separate investigation by the New Jersey Office of Attorney Ethics ("OAE") was initiated in 1999 against Fagan after he failed to pay his required annual client security fund fee. In February 2004, Weisshaus contacted the OAE disciplinary auditor assigned to Fagan's case and expressed her belief that Fagan had misappropriated funds from the Oestreicher escrow account. After several days of hearings held between August 2005 and April 2007 --- which included testimony from Weisshaus in November 2005 -- the Special Master overseeing the disciplinary investigation found that Fagan had, inter alia, knowingly misappropriated funds from the Oestreicher escrow account. In a Disciplinary Action Report dated January 24, 2008, the Special Master recommended that Fagan be disbarred.*fn2

Weisshaus filed this action on April 30, 2008. Her complaint, amended on September 29, 2008, asserted claims against two groups of defendants: (1) the "State Defendants," who handled Weisshaus' DDC complaints against Fagan; and (2) three attorneys, including Fagan. Weisshaus charged all defendants with violations of the First and Fourteenth Amendments pursuant to 42 U.S.C. §§ 1983 and 1985, arguing that she had been deprived of her constitutional right to a fair and honest judicial system ("Count I"). Weisshaus also asserted claims against the three attorneys for breach of fiduciary duty ("Count III"), and against Fagan for breach of contract ("Count II").

With the exception of Fagan, who filed an answer and counterclaim on December 29, 2008, all of the other defendants moved to dismiss the amended complaint. In an Opinion dated August 20, 2009, Weisshaus' claims against the State Defendants and the other two attorneys were dismissed. See Weisshaus v. New York, et al., No. 08 Civ. 4053(DLC), 2009 WL 2579215 (S.D.N.Y. Aug. 20, 2009) (the "August 2009 Opinion").

Pursuant to a scheduling order, fact discovery between Weisshaus and Fagan was scheduled to close on October 30, 2009. Plaintiff's deposition and certain outstanding document discovery requests were not completed, however, until December 2009. By Order of January 25, 2010, summary judgment motions were scheduled to be served by February 12. After each party requested, and was granted, an adjournment of this deadline, cross-motions for summary judgment were served on March 8.*fn3 In her March 8 motion, Weisshaus also moved to dismiss Fagan's counterclaim. On March 26, Weisshaus served her opposition to Fagan's motion for summary judgment.

By letter dated April 4, Fagan requested an extension of the time to serve his opposition to Weisshaus' motion for summary judgment. An Order of April 6 granted Fagan's request and directed Fagan to serve and file his opposition to Weisshaus' motion for summary judgment and motion to dismiss by April 16. After Fagan failed to file any opposition by the April 16 deadline, the motions were considered fully submitted by Order dated April 27.

On May 19, over one month after the deadline for filing an opposition to Weisshaus' motions, Fagan filed a motion to, inter alia, strike Weisshaus' motion for summary judgment and opposition to his motion for summary judgment. In the May 19 motion, Fagan also requested leave to amend his counterclaim to incorporate additional facts purportedly obtained during Weisshaus' December 2009 deposition.*fn4 On May 24, Weisshaus filed an opposition to Fagan's May 19 motion, and on June 1, Fagan filed a reply.


1. Summary Judgment ...

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