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Cardali v. Slater

Supreme Court, New York County

May 18, 2017

Robert A. Cardali and ROBERT A. CARDALI AND ASSOCIATES LLP, Plaintiffs,
Richard Slater and WINSBERT SPENCE, Defendants.

          For Petitioners: Arnold DiJoseph, New York, NY.

          For Defendant Slater: Richard Slater, Pro Se, New York, NY

          HON. ARLENE P. BLUTH, J.S.C.

         Motion Sequence Numbers 9, 10, 11, 12 and 13 are consolidated for disposition. Because motion sequence number 13 consists of dispositive motions, that motion and its cross-motion for summary judgment will be addressed first.


         Plaintiff Robert Cardali and defendant Richard Slater are both experienced attorneys who specialize in personal injury cases. Slater worked for Cardali's various firms for over twenty years. On August 19, 2010, the parties had an argument and Cardali fired Slater.

         When personal injury lawyers work on a contingency fee basis, they do not get paid for their efforts as the case progresses; instead, the lawyer collects his or her fee at the end of the case. That fee is usually one third of the net recovery. "Net recovery" as used here means the amount left over after the expenses are reimbursed. For example, if the lawyer has laid out $4, 000 in expenses and the case settles for $100, 000, then the net recovery is $96, 000. The lawyer would first be reimbursed for his out of pocket expenses, $4, 000 in this example, and the net recovery of $96, 000 would be distributed $64, 000 to the client and $32, 000 to the lawyer. In that example, the lawyer walks away with $36, 000 ($32, 000 for his labor and $4, 000 for his expenses) and the client gets $64, 000.

         On the other hand, if the expenses were $10, 000, then the net recovery would be $90, 000 which would be split $60, 000 to the client and $30, 000 to the lawyer. In this example, the lawyer would walk away with $40, 000 ($30, 000 for his labor and $10, 000 for expenses) and the client would only receive $60, 000.

         The more money that is attributable to expenses, the more money the lawyer gets and the less money the client gets. This creates an opportunity for an unscrupulous lawyer to pad expenses.

         Here, Mr. Cardali did more than just pad expenses. He engaged in double-dipping. That is, after entering into an agreement promising the client that his labor for the case would be capped at one-third of the net recovery, Mr. Cardali hired people outside his firm to do the work (for example, motion practice) and billed the client for that lawyer's fee. So the client ended up paying twice for the same work - the client paid Mr. Cardali one third of the net recovery plus the client was charged and paid the lawyer who actually did the work out of the expenses deducted from the recovery. It is this outrageous practice that is the root of this case.

         While at the Cardali firm, one of the clients Slater represented, and with whom he built a rapport, was Mr. Spence. After Slater left the firm, he discovered that Mr. Spence was a victim of Cardali's double-billing scheme; outside counsel costs for farmed-out trial-level legal work were billed and hidden as "appellate work" even though there was no appellate work on the case whatsoever. Mr. Spence was overcharged $8, 400 that Cardali paid to an outside firm on a motion for summary judgment; again, if Cardali wanted to pay someone to make or oppose a motion, that is allowable. But if Cardali paid another lawyer to make or oppose a motion, that lawyer's fee ought to have come out of Cardali's share of the recovery; that is, Cardali should have paid that lawyer himself. Clearly, charging the client for outside counsel fees and collecting the full contingency fee is double-billing. Slater wrote to Anthony Broccolo, another experienced attorney at the firm, the following note:

"Anthony - Rob [Cardali] put my reputation and career in jeopardy because of what he did, in my opinion on Spence. For that reason, he is nothing more than a common criminal. Feel free to show this to whoever you wish to. RNS [Richard Slater]."

         This handwritten note is the basis for the first through third causes of action in the complaint (libel and libel per se). The fourth cause of action is for slander because Slater left the following voice mail on the law firm's answering machine:

"I am making this phone call pursuant to specific instructions given to me by [two former clients of Cardali]. They wanted me to advise you that they are seriously considering promptly approaching the Rackets Bureau of the District Attorney's Office."

         And so started this litigation for defamation, which has lasted six years, many conferences and 13 motions. The First Department Disciplinary Committee investigated Cardali's tactics and determined that Cardali's firm violated ethics (Rule 1.5 and DR Code's 2-106 and 2-107) for its actions and sanctioned it by imposing an admonishment. The Disciplinary Committee stated that Cardali's firm received only an admonishment because it had relied, in part, upon the advice of an ethics attorney.


         To be entitled to the remedy of summary judgment, the moving party "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact from the case" (Winegrad v New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316');">487 N.Y.S.2d 316 [1985]). The failure to make such prima facie showing requires denial of the motion, regardless of the sufficiency of any opposing papers (id.). When deciding a summary judgment motion, the court views the alleged facts in the light most favorable to the non-moving party (Sosa v 46th St. Dev. LLC, 101 A.D.3d 490, 492, 955 N.Y.S.2d 589');">955 N.Y.S.2d 589 [1st Dept 2012]). Once a movant meets its initial burden, the burden shifts to the opponent, who must then produce sufficient evidence to establish the existence of a triable issue of fact (Zuckerman v City of New York, 49 N.Y.2d 557, 560, 427 N.Y.S.2d 595');">427 N.Y.S.2d 595 [1980]). The court's task in deciding a summary judgment motion is to determine whether there are bonafide issues of fact and not to delve into or resolve issues of credibility (Vega v Restani Constr. Corp., 18 N.Y.3d 499, 505, 942 N.Y.S.2d 13');">942 N.Y.S.2d 13 [2012]). If the court is unsure whether a triable issue of fact exists, or can reasonably conclude that fact is arguable, the motion must be denied (Tronlone v Lac d'Amiante Du Quebec, Ltee, 297 A.D.2d 528, 528-29, 747 N.Y.S.2d 79');">747 N.Y.S.2d 79 [1st Dept 2002], affd 99 N.Y.2d 647, 760 N.Y.S.2d 96');">760 N.Y.S.2d 96 [2003]).

         Here, there are cross-motions for summary judgment; both Cardali and Slater agree that there are no issues of fact. Slater admits he wrote the note and left the voice mail. The parties just disagree on the import of Slater's note to Broccolo and the message left on the firm's voice mail about being reported to the District Attorney.

         Defamation and ...

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