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Chaparro v. Kowalchyn

United States District Court, S.D. New York

February 17, 2017

ROLANDO CHAPARRO and YELENA CHAPARRO, Plaintiffs,
v.
NICHOLAS W. KOWALCHYN, Defendant and Third-Party Plaintiff,
v.
FREDRIC LEWIS, Third-Party Defendant.

          OPINION & ORDER

          Paul A. Engelmayer United States District Judge

         In this 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.").

         Now 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.

         I. Background

         A. The Parties

         Plaintiff 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.

         Kowalchyn 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.

         B. The Personal Injury Suit

         On 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. ¶¶ 1-2.

         Although 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 time.[1]

         A 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.

         On December 13, 2011, the Chaparros substituted Kowalchyn for Lewis as their attorney of record. See note 1, supra.

         On 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.

         Notwithstanding 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 ...


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