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Gyabaah v. Rivlab Transportation Corp.

Supreme Court of New York, First Department

January 10, 2013

Adwoa Gyabaah, Plaintiff-Appellant-Respondent.
Rivlab Transportation Corp., Defendant-Respondent-Appellant, John Doe, Defendant, Jeffrey A. Aronsky, P.C. Non-Party Respondent-Appellant.

Law Offices of Kenneth A. Wilhelm, New York (Barry Liebman of counsel), for appellant-respondent.

Kral, Clerkin, Redmond, Ryan, Perry & Van Etten, LLP, Melville (Elizabeth Gelfand Kastner of counsel), for Rivlab Transportation Corp., respondent-appellant.

Pollack, Pollack, Isaac & De Cicco, New York (Brian J. Isaac of counsel), for Jeffrey A. Aronsky, P.C., respondent-appellant.

Tom, J.P., Andrias, Renwick, DeGrasse, Abdus-Salaam, JJ.

Order, Supreme Court, Bronx County (Julia I. Rodriguez, J.), entered March 14, 2011, which, granted nonparty law firm Jeffrey A. Aronsky, P.C.'s (Aronsky) motion to the extent of granting Aronsky leave to place a lien against the action, and denied the motion insofar as it sought an order enforcing a purported settlement and setting Aronsky's fee accordingly, affirmed, without costs.

The issue that divides this panel is whether this action has been settled. Aronsky, plaintiff's outgoing attorney, commenced this personal injury action on plaintiff's behalf on August 25, 2010. By letter to Aronsky dated October 1, 2010, defendant's carrier tendered its $1 million policy limits for purposes of settlement. Aronsky explained the proposal to plaintiff who, at that time, chose to accept the settlement. Accordingly, plaintiff executed a general release on October 5, 2010 and a hold harmless agreement on October 12, 2010. Aronsky advised plaintiff that he would hold the release pending receipt of defendant's affidavit of no excess insurance and advice from plaintiff as to whether she preferred to have the settlement structured.

By December 9, 2010, plaintiff had retained new counsel, Kenneth A. Wilhelm, Esq. On that date, Wilhelm advised Aronsky that plaintiff did not wish to settle the case or have the release sent to defendant. Aronsky moved the court below for an order enforcing what he contended was a $1 million settlement and setting his firm's contingency fee at one-third of the recovery pursuant to plaintiff's retainer agreement. In making his motion, Aronsky did not allege that acceptance of the offer was ever communicated to defendant or its carrier. This omission is fatal to Aronsky's claim of a settlement for reasons that follow. Aronsky maintained that "plaintiff's signing of the General Release constituted a binding legal contract." The court denied the motion and vacated the release in what it perceived to be the interest of justice.

Although the motion court incorrectly invoked the interest of justice, the application of contract law nevertheless required the denial of Aronsky's motion. "[A] general release is governed by principles of contract law" (Mangini v McClurg, 24 N.Y.2d 556, 562 [1969]). Citing White v Corlies (46 NY 467, 469-470 [1871]), this Court has held that "it is essential in any bilateral contract that the fact of acceptance be communicated to the offeror" (Agricultural Ins. Co. v Matthews, 301 A.D.2d 257, 259 [1st Dept 2002]; see also D'Agostino Gen. Contrs. v Steve Gen. Contr., 267 A.D.2d 1059 [4th Dept 1999]; Church of God of Prospect Plaza v Fourth Church of Christ, Scientist of Brooklyn, 76 A.D.2d 712, 714 [2nd Dept 1980], affd 54 N.Y.2d 742 [1981]). Therefore, this action was not settled because the executed release was never forwarded to defendant nor was acceptance of the offer otherwise communicated to defendant or its carrier. This record does not contain a single affidavit by anyone asserting that either occurred. Although the dissent posits that a settlement was effected despite the lack of delivery or filing of the release, it avoids discussion of the critical absence of any claim that plaintiff's acceptance of the offer was ever communicated to defendant (see id.). We do not share the dissent's view that an October 6, 2010 letter from defendant's counsel to Aronsky "evidenced" an agreement to settle [1]. Defense counsel's statement in the letter that he was "advised" of a settlement does not suffice as evidence that such a settlement was effected. Moreover, the letter is devoid of probative value because it is unsworn (see e.g. Yonkers Ave. Dodge, Inc. v BZ Results, LLC, 95 A.D.3d 774, 775 [1st Dept 2012]). The dissent misplaces its reliance on Calavano v New York City Health & Hosps. Corp. (246 A.D.2d 317 [1st Dept 1998]) which it cites for the proposition that plaintiff was bound by the release despite the fact that it was never delivered or filed. Calavano lends no support to the dissent's conclusion because in that case the plaintiff was held to be bound by a stipulation of settlement and a general release which he signed and which "were then sent to defendants for a mutual release" (id. at 318). Because there has been no settlement, the amount of Aronsky's fee should be determined upon the disposition of this action in the manner prescribed by Matter of Cohen v Grainger, Tesoriero & Bell (81 N.Y.2d 655 [1993]).

Like the dissent, we see no need for a hearing to determine whether Aronsky was discharged for cause. The record discloses that plaintiff has not made a prima facie showing of any cause for Aronsky's discharge. Plaintiff stated in her affidavit that she signed the release and hold harmless affidavit because she felt "pressured" to do so. Plaintiff made no mention of what the pressure consisted of or, more importantly, what professional misconduct, if any, brought it about. To be sure, a hearing was not warranted by plaintiff's untenable argument that Aronsky disobeyed her instructions by making the instant motion albeit after he had already been discharged as her attorney. Also, we do not disturb the motion court's determination that Aronsky is entitled to a lien on plaintiff's recovery inasmuch as his charging lien automatically came into existence upon the commencement of this action (see Resnick v Resnick, 24 A.D.3d 238 [1st Dept 2005]).

All concur except Andrias, J. who dissents in a memorandum as follows:

ANDRIAS, J. (dissenting)

Because I believe that there was a binding settlement of plaintiff's claims against defendant Rivlab Transportation Corp. (Rivlab), which plaintiff sought to avoid simply because she changed her mind after she was told that she could get more money, I respectfully dissent and would reverse the order which denied the motion of nonparty appellant law firm Jeffrey A. Aronsky, P.C. (Aronsky) for an order enforcing the settlement and setting the legal fees to which Aronsky is entitled.

On August 11, 2010, plaintiff was hit by a bus owned by Rivlab. She retained Aronsky to represent her on a one-third contingency fee basis, and Aronsky filed this action that month. On October 1, 2010, after reviewing the medical records, a representative of Rivlab's insurance carrier sent Aronsky a letter confirming a conversation in which the carrier offered to tender the policy limit of $1 million in full settlement of plaintiff's claims.

On October 5, 2010, Aronsky and a structured settlement attorney visited plaintiff, who signed a general release in favor of Rivlab and its carrier, which released them from all causes of action and claims she had or may have against them, "[i]n particular for injuries sustained on August 11, 2009 [ sic ]." Plaintiff now claims that she felt pressured to sign the release and another unidentified document by Aronsky's insistence that she settle and because the structured settlement attorney told her that his proposals would only be good for a week. Plaintiff alleges that the next day, after she was told by "people" that she should not be pressured into ...

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