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Acker v. Wilger

United States District Court, Second Circuit

January 10, 2014

LOREN ACKER, Plaintiff,
v.
ANTHONY WILGER, et al., Defendants.

OPINION AND ORDER

JESSE M. FURMAN, District Judge.

Plaintiff Loren Acker sues several of his former attorneys for legal malpractice and other claims in connection with what a state court judge described as "a disaster of a litigation caused primarily by [Acker's] attorneys" and an "appalling case of attorney misbehavior." (Decl. Eric M. Creizman (Docket No. 76) ("Creizman Decl."), Ex. LA-OO, at 24-25). Two Defendants, Daniel DiBenedetto and Alexander Chan, move pursuant to Rule 56 of the Federal Rules of Civil Procedure for summary judgment with respect to all claims asserted against them. For the reasons stated below, Defendants' motion is GRANTED in part and DENIED in part. In particular, the motion is denied except insofar as it seeks dismissal of Plaintiff's duplicative claims sounding in fraud and negligence, a stand-alone claim for punitive damages, and a claim for attorney's fees and costs associated with this lawsuit.

BACKGROUND

This case has a long and somewhat tortuous history, which will be summarized only to the extent relevant to this motion. The relevant facts, drawn from the Complaint and the admissible materials submitted by the parties, are uncontested except where noted; most were memorialized by clerks or court reporters in state court. In any event, the facts are viewed in the light most favorable to Plaintiff, as he is the non-moving party. See, e.g., Gould v. Winstar Commc'ns, Inc., 692 F.3d 148, 157-58 (2d Cir. 2012).

A. The Underlying State-Court Suit

Acker is an Arizona businessman who, with his son, owned and operated a luxury hotel for dogs called Woofspa & Resort, LLC ("Woofspa"). (Loren Acker's Rule 56.1 Resp. Statement Material Facts Defs. Daniel DiBenedetto and Alexander Chan (Docket No. 73) ("Pl.'s Rule 56.1 Statement") ¶ 1). On March 7, 2005, Mary Gentry - a former minority investor in Woofspa - filed suit against Woofspa, Acker, and his son in New York State Supreme Court in Manhattan. (Pl.'s Rule 56.1 Statement ¶¶ 5-9; Decl. Kenneth A. McLellan Supp. Defs. DiBenedetto and Alexander Chan's Mot. Summ. J. (Docket No. 70) ("McLellan Decl."), Ex. D). Gentry sought more than $300, 000 in damages. (Pl.'s Rule 56.1 Statement ¶ 9).

Acker's wife, Darla Acker, prepared the answer in the Gentry lawsuit, but Acker filed the answer pro se. ( Id. ¶ 10; McLellan Decl., Ex. A ¶ 9). On or about September 8, 2005, Acker's son retained Defendant DiBenedetto to represent Acker, Acker's son, and Woofspa in the Gentry lawsuit. (Pl.'s Rule 56.1 Statement ¶¶ 11-12; McLellan Decl., Ex. F).[1] DiBenedetto, in turn, retained Chan to perform legal services and serve as co-counsel in the case. ( See Pl.'s Rule 56.1 Statement ¶ 13; McLellan Decl., Ex. J, at 43). On July 12, 2007, Acker filed an executed "Consent to Change Attorney" form in New York State Supreme Court purporting to substitute Defendant Anthony Wilger as his attorney of record. (Pl.'s Rule 56.1 Statement ¶ 14; McLellan Decl., Ex. K). The parties disagree, however, about the relative importance of this event and the degree to which it ended DiBenedetto's and Chan's attorney-client relationships with Acker. (Pl.'s Rule 56.1 Statement ¶¶ 14, 16).

B. The State Default Judgment Proceedings

In June 2006, Gentry moved for summary judgment. (McLellan Decl., Ex N, at 2). The Ackers and Woofspa, represented at this point by some combination of DiBenedetto, Chan, and Wilger, defaulted on the motion. ( Id. at 3). On November 6, 2006, the Honorable Charles E. Ramos, New York State Supreme Court Justice, granted default judgment in Gentry's favor, in the amount of $56, 276.18. See Gentry v. Woofspa & Resort, LLC, No. 103127/05 (N.Y. Sup.Ct. Nov. 6, 2006) (McLellan Decl., Ex. N, at 5-7).

In June 2007, the Ackers and Woofspa, represented by Chan - as of counsel to DiBenedetto - moved to vacate the default judgment against them on the grounds that DiBenedetto had not been served with a copy of Gentry's summary judgment motion papers. (McLellan Decl., Ex. R, at 21). After expressing skepticism about the veracity of DiBenedetto's representation that he had not been served with the motion, Justice Ramos denied DiBenedetto's motion to vacate and referred the case for determination of whether the motion had been submitted in bad faith. ( Id. at 27-28). The referee determined that the motion had been submitted in bad faith. (Creizman Decl., Ex. LA-DD).[2]

In September 2007, Wilger filed a motion on Acker's behalf to renew the motion to vacate the default judgment. (McLellan Decl., Ex. Q, at 14). Justice Ramos denied the motion. ( Id. at 23). Wilger then filed a notice of appeal; Chan posted a bond in the amount of $70, 815.87, representing the Gentry default judgment plus interest, to stay enforcement of the judgment pending appeal. (McLellan Decl., Ex. O; McLellan Decl., Ex. N, at 8).

C. Appeal from the State Default Judgment

True to the theme of this case, the Ackers, through their attorneys, next defaulted on the appeal from the default judgment in the Gentry lawsuit by failing to perfect it. Because of this default, the cash bond posted by Chan was released to Gentry. (Creizman Decl., Ex. LA-II). Back before Justice Ramos, Gentry moved for, and was granted, additional attorney's fees in the amount of $1, 416.32 and costs in the amount of $5, 000.00. ( Id. at 4). Judgment in the amount of $6, 416.32 was entered on January 7, 2009 (the "January 2009 Judgment"). ( Id. ).[3] In addition, the judgment included a penalty of $100 per day that the judgment was not paid, and provided for interest at New York's statutory 9% interest rate. ( See id. ). See also N.Y. C.P.L.R. 5004.

It is this judgment that ultimately gives rise to Plaintiff's claims in this case. According to Acker, Defendants failed to inform him of the default on appeal and failed to satisfy the January 2009 Judgment for nearly three years, despite inquiries from the judgment creditor and Acker himself.[4] ((Pl. Loren Acker's Opp'n Defs. DiBenedetto and Chan's Mot. Summ. J. ("Pl.'s Mem.") 10); see also Compl. (Docket No. 1) ¶¶ 18, 43). Acker ultimately paid the judgment on May 24, 2012, by which time it had ballooned to $142, 541.01 because of penalties and interest. (McLellan Decl., Ex. X). Of this amount, $138, 673.76 represented the original $6, 416.32 January 2009 Judgment plus penalties and interest; an additional $3867.25 represents additional attorney's fees and costs in ...


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