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Tokio Marine and Nichido Fire Insurance Co., Ltd., As Subrogee For v. Rosalie Calabrese and Louis Facciponti

November 28, 2011

TOKIO MARINE AND NICHIDO FIRE INSURANCE CO., LTD., AS SUBROGEE FOR MITSUBISHI MOTORS CREDIT OF AMERICA, INC., PLAINTIFF,
v.
ROSALIE CALABRESE AND LOUIS FACCIPONTI, DEFENDANTS, ROSALIE CALABRESE AND LOUIS FACCIPONTI, THIRD-PARTY PLAINTIFFS,
v.
RUSSO & APOZNANSKI, AND MONTFORT, HEALY, MCGUIRE & SALLEY, LLP THIRD-PARTY DEFENDANTS, RUSSO & APOZNANSKI, CROSS-CLAIMANT,
v.
MONTFORT, HEALY, MCGUIRE & SALLEY, LLP CROSS-CLAIM DEFENDANT, MONTFORT, HEALY, MCGUIRE & SALLEY, LLP, CROSS-CLAIMANT,
v.
RUSSO & APOZNANSKI CROSS-CLAIM DEFENDANT,



The opinion of the court was delivered by: A. Kathleen Tomlinson, Magistrate Judge:

MEMORANDUM AND ORDER

I. PRELIMINARY STATEMENT

Presently before the Court is Defendant/Third-Party Plaintiffs Rosalie Calabrese and Louis Facciponti's motion to amend the Third-Party Complaint pursuant to Fed. R. Civ. P. 15(a). Third-Party Plaintiffs seek to plead additional claims of legal malpractice against Third-Party Defendants Russo & Apoznanski ("Russo") and Montfort, Healy, McGuire & Salley, LLP ("Montfort Healy"). In addition, Third-Party Defendant Montfort Healy has cross-moved to strike Third-Party Plaintiffs' expert report and preclude the expert's testimony. For the foregoing reasons, Third-Party Plaintiffs' motion to amend is DENIED. Further, Third-Party Defendant Montfort Healy's cross-motion is GRANTED in part and DENIED in part.

II. BACKGROUND

On December 21, 1999, Defendant Calabrese entered into a lease agreement with Plaintiff Mitsubishi Motors Credit of America, Inc. ("MMCA") for a 2000 Mitsubishi Galant. On January 6, 2003, Facciponti, with the permission of Calabrese, was operating the vehicle when it was involved in an accident with a vehicle driven by Andrew Andreou. On October 20, 2004, Andrew Andreou (and his spouse, Margaret) commenced a personal injury action against Calabrese and Facciponti ("Andreou Action"). This action also sought damages from MMCA on a theory of vicarious liability. At the conclusion of the liability phase of the action, the jury found Facciponti 100% liable. Just after the conclusion of the damages phase, and before the jury returned their verdict, the action settled for the total sum of $1.5 million. Of the $1.5 million, $100,000 was contributed by Calabrese and Facciponti through their insurer, GEICO, and $1.4 million was contributed by MMCA through its insurer, Tokio Marine and Nichido Fire Insurance Co. ("Tokio Marine"). In consideration for the $1.4 million settlement (hereafter the "Andreou Settlement") from MMCA and Tokio Marine, Andrew and Margaret Andreou executed a General Release.

On June 21, 2007, Plaintiffs initiated this action against Calabrese and Facciponti on an indemnification claim to recover their $1.4 million contribution towards the Andreou Settlement. After receiving three extensions to the deadline for joinder of additional parties and amendment of pleadings, Calabrese and Facciponti filed a Third-Party Complaint against Russo and Montfort Healy, their counsel in the Andreou Action.*fn1 According to Third-Party Plaintiffs, Geico provided their defense, as per the contractual agreement between the parties. Third-Party Defendant Russo was assigned to the defense and continued as counsel throughout the discovery phase and Third-Party Defendant Montfort Healy was thereafter retained as trial counsel. Pursuant to the Third-Party Complaint, one cause of action in legal malpractice is brought against both Russo and Montfort Healy. Both causes of action are premised on the following alleged breaches of counsels' duty to provide competent legal services: (1) failing to conduct proper discovery that would have uncovered and allowed Third-Party Plaintiffs to obtain the information that Andrew Andreou maintained in his Dentrix program; (2) failing to follow proper New York State procedure to ensure that Dr. Goldman would not be precluded from testifying for the defense; and (3) failing to request, demand, or negotiate that the settlement agreement include Tokio Marine and MMCA's releasing Third-Party Plaintiffs from any liability.*fn2

III. MOTION TO AMEND

A. Standard of Review

Rule 15(a) of the Federal Rules of Civil Procedure provides that in cases where a party cannot amend as a matter of course, "a party may amend its pleading only with the opposing party's written consent or the court's leave." See Fed. R. Civ. P. 15(a); see also Lucente v. Int'l Bus. Machs. Corp., 310 F.3d 243, 258 (2d Cir. 2002); Branum v. Clark, 927 F.2d 698, 705 (2d Cir. 1991). A court "should freely give leave when justice so requires" and such leave is in the court's discretion.*fn3 See Fed. R. Civ. P. 15(a); Grace v. Rosenstock, 228 F.3d 40, 56 (2d Cir. 2000).

Notwithstanding the foregoing principle, leave to amend may be denied where there is "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment, etc." Rachman Bag Co. v. Liberty Mut. Ins. Co., 46 F.3d 230, 234 (2d Cir. 1995) (quoting Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962)); SCS Commc'n, Inc. v. Herrick Co., Inc., 360 F.3d 329, 345 (2d Cir. 2004) (under Rule 15(a), "leave to amend a pleading may only be given when factors such as undue delay or undue prejudice to the opposing party are absent")(emphasis in original). "The party opposing the motion for leave to amend has the burden of establishing that an amendment would be prejudicial." Fariello v. Campbell, 860 F. Supp. 54, 70 (E.D.N.Y. 1994); see also European Cmty. v. RJR Nabisco, Inc., 150 F. Supp. 2d 456, 502-03 (E.D.N.Y. 2001); Saxholm AS v. Dynal, Inc., 938 F. Supp. 120, 123 (E.D.N.Y. 1996). The opposing party likewise bears the burden of establishing that an amendment would be futile. See Blaskiewicz v. County of Suffolk, 29 F. Supp. 2d 134, 137-8 (E.D.N.Y. 1998) (citing Harrison v. NBD Inc., 990 F. Supp. 179, 185 (E.D.N.Y. 1998)).

B. Discussion

In Third-Party Plaintiffs' proposed Second Amended Third-Party Complaint, they seek to allege the following additional breaches of Third-Party Defendants' duty to provide competent legal services: (1) failing to retain a vocational rehabilitation expert to report on, testify to, or rebut Andreou's loss of earnings claims; (2) failing to retain a forensic accountant to counter Andreou's claims regarding the value of Andreou's dentistry practice; and (3) failing to retain an orthopedist and neurologist to conduct an independent medical examination of Andreou subsequent to surgery performed in December 2005. The Third-Party Defendants, separately and/or collectively, argue that leave to amend would: (1) be futile; (2) cause undue delay; (3) be in bad faith; and (4) cause undue prejudice. Each argument will be addressed in turn.

1. Futility

Third-Party Defendants allege that the proposed claims are futile on two grounds: (1) the claims are barred by the applicable statute of limitations; and (2) the claims fail to state a cause of action.

a. Statute of Limitations

A proposed amendment is futile when it fails to state a claim upon which relief can be granted. See Dougherty v. Town of N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 88 (2d Cir. 2002); Health-Chem Corp. v. Baker, 915 F.2d 805, 810 (2d Cir. 1990). "[An] amendment would likely be futile if, for example, the claims the plaintiff sought to add would be barred by the applicable statute of limitations." See Grace v. Rosenstock, 228 F.3d 40, 53 (2d Cir. 2000). For claims grounded in legal malpractice, the statue of limitations is three years. N.Y. C.P.L.R. § 214(6). In such actions, the claim accrues when the malpractice is committed, not when it is discovered. See Scantek Med., Inc. v. Sabella, 583 F. Supp. 2d 477, 489 (S.D.N.Y. 2008) (citing Shumsky v. Eisenstein, 96 N.Y.2d 164, 166, 726 N.Y.S.2d 365, 750 N.E.2d 67 (2001)). In this case, the proposed new claims of malpractice -- centered on Third-Party Defendants' failure to retain certain experts to refute the damages in the Andreou Action -- accrued, at the latest, on July 6, 2006. The underlying Andreou Action settled on July 6, 2006, directly after the completion of the damages phase of the trial. Therefore, generally speaking, those claims related to any alleged malpractice during the Andreou Action must have been brought by July 6, 2009. However, pursuant to the "relation back" doctrine:

A claim asserted in an amended pleading is deemed to have been interposed at the time the claims in the original pleading were interposed, unless the original pleading does not give notice of the transactions, occurrences, or series ...


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