United States District Court, E.D. New York
L. Pollak, United States Magistrate Judge Eastern District of
Robert Toussie and Laura Toussie recently retained new
counsel after the Court allowed their prior attorneys to
withdraw. (See 1/9/2018 Order, ECF No. 144;
1/25/2018 Notices of Appearance, ECF Nos. 149, 2150). On
February 15, 2018, the parties filed a joint status report in
which they raise several issues for the Court's
consideration. (See generally Status Report, Feb.
15, 2018, ECF No. 153). The Court addresses each issue in
Former Counsel's Retaining Lien
Toussies' former attorneys from the firm Abrams,
Fensterman, Fensterman, Eisman, Formato, Ferrara, Wolf &
Carone, LLP (“Abrams Fensterman”) have asserted a
retaining lien over the files and papers related to this
action. (See Status Report at 1-2). On February 2,
2018, the Court entered a stay in the flood case to allow Mr.
Toussie to attempt to resolve his former attorney's
retaining lien. See Toussie v. Allstate Ins. Co.,
No. 14 CV 2705, Slip. Op. at 2 (E.D.N.Y. Feb. 2, 2018), ECF
Court explained in its Order granting a stay in the flood
case, in addition to the statutory charging lien and
quantum meruit recovery, New York law allows an
attorney who withdraws for “good cause” to assert
a retaining lien until the client's account is paid in
full. Melnick v. Press, No. 06 CV 6686, 2009 WL
2824586, at *11 (E.D.N.Y. Aug. 28, 2009) (quoting Theroux
v. Theroux, 145 A.D.2d 625, 626, 536 N.Y.S.2d 151 (2d
Dep't 1988)). The retaining lien is founded on physical
possession and “gives an attorney the right to keep,
with certain exceptions, all of the papers, documents and
other personal property of the client which have come into
the lawyer's possession in his or her professional
capacity as long as those items are related to the subject
representation.” Luca v. Giaccone, No. 16 CV
4975, 2017 WL 3669614, at *6 (E.D.N.Y. Aug. 24, 2017)
(quoting Universal Acupuncture Pain Servs., P.C. v.
Quadrino & Schwartz, P.C., 370 F.3d 259, 262 n.3 (2d
Cir. 2004)). Such retaining liens are fully enforceable in
the federal courts, which “have the responsibility to
exercise supplemental jurisdiction over an attorney's
claim for a lien “to protect its own officers in such
matters[.]” Haggar Int'l Corp. v. United Co.
for Food Indus. Corp., No. 03 CV 5789, 2013 WL 3356953,
at *2 (E.D.N.Y. July 3, 2013) (quoting Itar-Tass Russian
News Agency v. Russian Kurier, Inc., 140 F.3d 442, 449
(2d Cir. 1998)). Courts will grant an exception to the
retaining lien only where a party demonstrates extreme
hardship or other extraordinary circumstances. Melnick v.
Press, 2009 WL 2824586, at *11 (citing Pomerantz v.
Schandler, 704 F.2d 681, 683 (2d Cir. 1983)).
this Court did not issue a stay in this case when it issued
the stay in the related flood case, the Court agrees that to
require plaintiffs and their new counsel to respond to
written discovery and the pending motion filed by the
defendant to amend their Answer to add counterclaims for,
inter alia, fraud, without the benefit of files
exclusively in the possession of former counsel, poses an
unacceptable risk of undue prejudice to plaintiffs. Thus,
except as discussed below, all proceedings in this case are
stayed until March 9, 2018, during which time the
Toussies and their new counsel shall attempt to resolve the
retaining lien in good faith.
Inspection of CFASS
at least June 13, 2017, Allstate has sought to inspect the
boxes plaintiffs have stored at Christie's Fine Art
Storage Services (“CFASS” or
“Christie's”). (See Def.'s Mot.
to Compel, June 13, 2017, ECF No. 94). After a delay of
several months caused by the withdrawal of Mark E. Goidell,
Esq., who served as plaintiffs' counsel before Abrams
Fensterman, the Court held a conference regarding the
inspection of the boxes and premises at CFASS. (See
Minute Entry, Oct. 3, 2017, ECF No. 107). Thereafter, the
Court denied plaintiffs' motion to quash defendant's
subpoena directed to CFASS or for a protective order, and
directed defendant to submit a subpoena to be endorsed by the
Court to eliminate any doubt about the necessity of
compliance. See generally Toussie v. Allstate Ins.
Co., No. 15 CV 5235, 2017 WL 4773374 (E.D.N.Y. Oct. 20,
2017), ECF No. 110. After endorsing the subpoena on October
23, 2017 (see Order, Oct. 23, 2017, ECF No. 113),
the Court again rejected plaintiffs' attempts to prevent
or narrow discovery of the boxes at CFASS. See Toussie v.
Allstate, No. 15 CV 5235, 2017 U.S. Dist. LEXIS 178571,
at *2-3 (E.D.N.Y. Oct. 27, 2017), ECF No. 117.
Order marked the fourth time the Court had ruled on the
plaintiffs' concerns regarding the CFASS inspection.
See id. at 4. The Court observed that “the
arguments and issues raised in plaintiffs' motion are not
at all new, nor are the Court's concerns about
plaintiffs' conduct.” Id. at 3. The Court
was “deeply troubled by the pattern of seeking to
thwart proper discovery requests and to delay this
litigation.” Id. at 4.
new counsel, plaintiffs yet again attempt to revisit the
Court's earlier rulings regarding the scope of the
inspection at CFASS for a fifth time. (See Status
Report at 5-6). In light of counsel's recent appearance
and their lack of access to files of former counsel, the
Court assumes that plaintiffs' new counsel is not seeking
to perpetuate the pattern of improper discovery conduct and
frivolous arguments previously identified by this Court or to
ignore the Court's Orders. See, e.g.,
Toussie v. Allstate, 2017 U.S. Dist. LEXIS 178571,
at *5 (explaining that “[a]lthough sanctions have not
been requested at this time, the Court expects that going
forward, plaintiffs and their counsel will adhere to the
Federal Rules and this Court's prior Orders and will not
continue to re-litigate the same issues previously decided by
the Court”). Nonetheless, plaintiffs' counsel
should review the docket carefully on CM/ECF or PACER.
“The case does not start anew each time there is a
change in attorney.” Martinez v. City of New
York, 16 CV 79, 2017 WL 6403512, at *2 (E.D.N.Y. Dec.
eliminate any doubt and to avoid further disputes regarding
the inspection, the Court reaffirms its earlier rulings and
makes it clear that Allstate is entitled to inspect, open,
and photograph the exterior, interior, and contents of any of
the boxes at CFASS. See Toussie v. Allstate, 2017
U.S. Dist. LEXIS 178571, at *3. The parties agree that the
inspection of the boxes and premises at CFASS should continue
even though the rest of the case is stayed. (See
Status Report at 4-7). Accordingly, the parties are Ordered
to proceed with the inspection of the boxes and premises at
CFASS and shall endeavor to complete the inspection by
March 16, 2018.
the parties shall complete the inspection as quickly as
possible, the Court denies plaintiffs' request that
Allstate be required to finish the inspection in a single
day. (See Status Report at 6).
Payment of CFASS's Outside Counsel Fees
parties dispute whether CFASS has requested that the parties
pay its outside counsel's fees and whether any such
request was the result of Mr. Toussie's conduct at the
inspections. (See Status Report at 9-11). In the
absence of a ...