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Swift Funding, LLC v. Isacc

Supreme Court, New York

August 2, 2013


Unpublished Opinion




Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion for: Summary Judgment in Lieu of Complaint

Papers Numbered

Notice of Motion and Affidavits Annexed.................................... 1

Notice of Cross Motion and Answering Affidavits....................... 2

Affirmations in Opposition to the Cross-Motion.......................... 3

Replying Affidavits...................................................................... 4

Exhibits...................................................................................... 5

Plaintiff commenced the instant action pursuant to Civil Practice Law and Rules ("CPLR") § 3213 with a summons and notice of motion for summary judgment in lieu of complaint against defendants to recover funds allegedly owed pursuant to two Funding Agreements. The court previously denied the motion for summary judgment in lieu of complaint and directed plaintiff to serve a complaint against defendants, which it has done. The individual defendant Peter Sim has now brought a motion to dismiss the complaint against him and the defendant Andrew Park has brought a cross motion seeking the same relief. For the reasons stated below, the motion and cross motion to dismiss are denied.

The relevant facts are as follows. Plaintiff, Swift Funding, LLC, is a company whose principal purpose is to advance money to plaintiffs involved in personal injury and related litigation. On February 11, 2009 and March 3, 2009, respectively, defendant Yousef Isacc a/k/a Yousef Isaac ("Isacc"), who was a plaintiff in a pending personal injury lawsuit at the time (the "lawsuit"), entered into two separate "Funding Agreements" with plaintiff. Pursuant to the terms of the agreements, plaintiff advanced to Isaac funds in the total amount of $10, 000, which were to be repaid by funds recovered from the lawsuit. The aforementioned agreements were also signed by attorneys from the law offices of Zohar & Larock, LLP, who were the trial attorneys for Isaac at the time the agreements were executed. The complaint alleges that trial counsel Zohar & Larock, LLP, under the direction of Andrew Park and the law firm Sim & Park, LLP ("S&P"), initially contacted plaintiff to request the financing. The complaint also alleges that the law firm of S&P represented Isacc in the underlying litigation, that Zohar and Larock LLP were retained as trial counsel and that they were subsequently relieved as trial counsel. Defendants Sim and Park were partners at S&P. It is undisputed that defendants Sim, Park and S&P are not signatories to the Funding Agreements. The lawsuit settled on or about October 8, 2009 and the settlement funds have been dispersed. According to the complaint, S&P distributed the proceeds of the settlement of the lawsuit to Isacc after they deducted their legal fees without paying plaintiff what it was owed pursuant to the Funding Agreements. In its complaint, the plaintiff has asserted a number of different causes of action, including conversion and tortious interference with contract.

On a motion to dismiss pursuant to CPLR § 3211(a)(7), the complaint is to be afforded a liberal construction and the court must "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory." Leon v. Martinez, 84 N.Y.2d 83, 87-88 (1994). However, "bare legal conclusions and factual claims, which are either inherently incredible or flatly contradicted by documentary evidence ... are not presumed to be true on a motion to dismiss for legal insufficiency." O'Donnell, Fox & Gartner, P.C. v. R-2000 Corp., 198A.D.2d l54(1st Dept l993).

Defendants Sim and Park both argue that the complaint must be dismissed against them individually pursuant to Partnership Law section 26 on the ground that the law firm S&P is a limited liability partnership. Partnership Law section 26 generally provides that partners are liable for the debts and obligations of the partnership. It further provides however, that except as provided by subdivision (C) and (D), no partner of a partnership which is a registered limited liability partnership is liable for the obligations of the limited liability partnership. Subdivision (C) provides that a partner in a limited liability partnership shall be held liable for any negligent or wrongful act or misconduct committed by him while rendering professional services on behalf of the partnership. Moreover, the courts have held that when the partnership assets are insufficient to satisfy a judgment that ...

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