United States District Court, S.D. New York
OPINION & ORDER
A. Engelmayer United States District Judge
diversity action, plaintiffs Yelena and Rolando Chaparro (the
"Chaparros") allege that defendant Nicholas W.
Kowalchyn ("Kowalchyn") committed legal malpractice
while representing them in a personal injury lawsuit. Dkt. 1
("Compl."). Kowalchyn, in turn, alleges that, if
there was any malpractice, third-party defendant Fredric
Lewis ("Lewis") is liable, or jointly-liable with
him, for it. Dkt. 11 ("Third-Party Compl.").
pending before the Court are Kowalchyn's motion for
summary judgment against the Chaparros' claims, Dkt. 32,
and Lewis's motion for summary judgment against
Kowalchyn's third-party claims, Dkt. 43. For the reasons
below, the Court denies both motions.
Rolando Chaparro worked as a porter at the Nederlander
Production Company. See Decl. Rolando Chaparro
("Chaparro Decl.") ¶ 1, Dkt. 53; Compl. ¶
8. Yelena Chaparro is married to Rolando. Chaparro Decl.
¶ 4. Together, the Chaparros claim that Kowalchyn
committed legal malpractice by settling their New York State
Supreme Court personal injury lawsuit for $52, 500. See
generally, Compl.; Rolando Chaparro v.
IESINYCorp., No. 304477/2009 (N.Y. Sup. Ct. Aug. 12,
2013) (the "personal injury suit"). They allege
that this settlement sum was "far less than the suit was
worth, " Compl. ¶ 68, and far less than the sum for
which the Chaparros would have settled had they known the
settlement fund would be used as an offset against some $269,
021.43 of liens outstanding against them, see Id.
¶¶ 1, 73-77.
and Lewis, both New York attorneys, represented the Chaparros
in the personal injury suit. See Decl. Nicholas
Kowalchyn ("Kowalchyn Decl.") ¶¶ 1-3,
Dkt. 38; Chaparro Decl. ¶ 1. While acknowledging that
they jointly represented the Chaparros, Kowalchyn and Lewis
dispute the nature of their employment relationship:
Kowalchyn states that he "was an employee attorney of
the Lewis Law Offices, " and worked under Lewis's
"supervision and direction." Kowalchyn Decl. ¶
3. Lewis states that Kowalchyn was at all times
"independent" of his law practice. Decl. Fredric
Lewis ("Lewis Decl.") ¶ 12, Dkt. 44.
The Personal Injury Suit
April 5, 2008, Rolando was injured by a garbage compactor
while working. See Kowalchyn Decl. ¶ 3;
Chaparro Decl. ¶ 1. In an attempt to recover for
personal injury and losses, the Chaparros hired Lewis to
represent them; on June 3, 2009, the Chaparros sued IESI
Corporation and PGREF I 1633 Broadway Land, L.P. (the
"personal injury defendants"). These two
corporations had "operated, managed, maintained, and
controlled" the compactor. Compl. ¶¶ 13-14;
see also, Kowalchyn Decl. ¶ 3; Chaparro Decl.
the Chaparros hired Lewis, Kowalchyn "undertook numerous
functions" on the lawsuit, "including preparing
pleadings and discovery materials, carrying out depositions,
and opposing [. . .] summary judgment motions."
Kowalchyn Decl. ¶ 3. Lewis appears to have been the
Chaparros' attorney of record during this
central event on which the Chaparros' legal malpractice
claim turns was a November 3, 2011 settlement conference. At
that conference, Kowalchyn met with the personal injury
defendants and-on behalf of the Chaparros-orally agreed to
settle the personal injury suit for $52, 500. Chaparro Decl.
¶¶ 7-8; see also, Dkt. 66-1 (January 3,
2012 email confirming settlement terms). Although it is
undisputed that the Chaparros agreed to settle the suit for
that sum, the parties dispute what legal advice was given
them in connection with it. Kowalchyn states that before he
agreed to the settlement, he phoned the Chaparros, who were
not present at the conference, and explained to them that any
settlement award would have to be used towards offsetting an
outstanding workers' compensation lien. Kowalchyn Decl.
¶¶ 3-4. In contrast, Ronaldo states that Kowalchyn
did not explain that "the Chubb Group of Insurance
Companies held a Workers' Compensation Lien in the amount
of $231, 947.00, " and that, as a result of the
offsetting, the Chaparros would not receive any sum from the
settlement. Chaparro Decl. ¶ 9. Lewis denies any
involvement with the settlement; he states that he had never
"authorized" or "discussed" settlement
with Kowalchyn. Lewis Decl. ¶ 7.
December 13, 2011, the Chaparros substituted Kowalchyn for
Lewis as their attorney of record. See note 1,
December 28, 2011, Kowalchyn states, he provided Lewis with a
second substitution-of-attorney form, which was intended to
once again make Lewis the Chaparros' attorney of record.
Kowalchyn Decl. ¶¶ 6-7. Neither Lewis nor the
Chaparros signed this second form. See Chaparro
Decl. ¶ 2; Kowalchyn Decl. Ex. D, Dkt. 38-4 (unsigned
second substitution-of-counsel form); Third-Party Def. 56.1
Statement ¶ 9, Dkt. 60. Kowalchyn also states that, as
of December 28, 2011, it was Lewis who represented the
Chaparros. See Kowalchyn Decl. ¶ 7.
the oral settlement agreement, it appears that neither Lewis
nor Kowalchyn executed the forms required to finalize the
settlement. See Chaparro Decl. ¶ 12; Kowalchyn
Decl. ¶ 7. The personal injury suit thus continued and
three motions were filed: (1) The personal injury defendants
moved to vacate a denial of their previous summary judgment
motion; (2) Lewis moved to have the personal injury
defendants pay the contemplated settlement fund to the
Chaparros, with Lewis receiving attorney's fees, or in
the alternative, to set aside the settlement and restore the
suit to the court's trial calendar; and (3) Kowalchyn,
separate from Lewis, cross-moved to have the personal injury
defendants settle the outstanding liens, and asked the Court
to determine his attorney's fees and compel Lewis to ...