United States District Court, S.D. New York
THE LAW OFFICES OF BRUCE E. BALDINGER, LLC, Plaintiff,
SAILES BARCHHA, ALKA BARCHHA, and BROKERAGE ACCOUNTS 1-3, Defendants.
OPINION & ORDER
PAUL A. CROTTY, District Judge.
The Law Offices of Bruce E. Baldinger, LLC ("Plaintiff") brings this action against Sailes Barchha (individually, "Defendant"), his wife, Alka Barchha, and Brokerage Accounts 1-3 (collectively, "Defendants") for failing to pay Plaintiff's attorney fees and for secretly transferring the funds owed to offshore accounts and trusts.
Plaintiff initially filed this action against Defendants in the District of New Jersey, claiming (1) breach of contract; (2) accounts stated; (3) intentional fraudulent transfer; (4) constructive fraudulent transfer; and (5) unjust enrichment. On December 17, 2013, the District of New Jersey granted the Defendants' motion to transfer the action to this District.On April 3, 2014, the Court denied Defendants' motion to dismiss. Summ. Order, ECF No. 55 (Apr. 3, 2014).
Defendants now move for summary judgment regarding the entirety of Plaintiff's claims. Plaintiff cross moves for partial summary judgment regarding its breach of contract claim and its two fraudulent transfer claims. For the reasons below, Defendants' motion for summary judgment is DENIED and Plaintiff's motion for partial summary judgment is GRANTED.
On October 4, 2012, Defendant retained the Plaintiff law firm to pursue a claim against TapImmune Corporation for the recovery of 5.6 million TapImmune shares owed to Defendant. Defs.' R. 56.1 Statement ¶ 1. The retainer agreement, signed by both parties, contained the following terms:
Defendant will pay a "flat fee" comprised of "the first $100, 000 realized" from the sale of Defendant's Taplmmune shares;
Defendant will pay a $5, 000 "undertaking fee" should Defendant elect to proceed with arbitration;
Defendant will pay a "separate $5, 000 retainer" against Plaintiff's regular hourly fees should Defendant wish to bring any preliminary restraints against TapImmune in federal court; and
Defendant will pay Plaintiff's "regular hourly rate of $400 per hour" if Defendant wishes to bring any other collateral action or appeal or if this matter involves any other jurisdiction.
Baldinger Deel. in Supp., Ex. A. The parties' retainer agreement also provided that Plaintiff would render monthly bills, with 1% interest accruing on unpaid balances after thirty days, and permitted Defendant to terminate representation "at any time [Defendant] see[s] fit for any reason." Id.
On November 21, 2012, Plaintiff filed an action against TapImmune, seeking the release of Defendant's 5.6 million shares, worth approximately $0.10 per share. Defs.' R. 56.1 Statement ¶¶ 4-5. After failing to obtain an injunction against Taplmmune, Plaintiff voluntarily dismissed the action on behalf of Defendant. In the meantime, TapImmune filed for arbitration against Defendant and also sued in federal court. Id. at ¶¶ 7-8. Plaintiff represented Defendant in both proceedings. On February 27, 2013, a temporary restraining order ("TRO") was issued in TapImmune's federal action, preventing Defendant from recovering or selling his shares. Id. at ¶ 8. The TRO was conditioned on TapImmune posting a $90, 000 bond by April 2, 2013. Id.
On March 4, 2013, Plaintiff represented Defendant in mediation, reaching a partial settlement with TapImmune. Id. at ¶ 9. The settlement, memorialized in the federal court's Stipulation and Order, amended the TRO by (1) requiring that "TapImmune's transfer agent  transfer 5, 600, 000 shares by DWAC to [Defendant]'s designated brokerage account, " and (2) permitting Defendant "to sell no more than one million (1, 000, 000) of such shares, with the balance of such shares being enjoined from sale, lien, or other alienation or encumbrance" pursuant to the TRO. Baldinger Deel. in Supp., Ex. B 3.
On March 13, 2013, TapImmune transferred 5.6 million shares to Defendant's brokerage account. Within two weeks, Defendant had sold 877, 500 of the 1 million unrestricted shares he was permitted to sell under the settlement agreement, yielding $92, 058.90 in proceeds. Id. at Ex. P 3. On April 2, 2013, TapImmune failed to post the required bond and the TRO expired, leaving Defendant free to sell his remaining 4.6 million shares. Defs.' R. 56.1 Statement ¶ 11. Although frequently asked, Defendant continuously denied selling any TapImmune shares. Baldinger ...