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Grayson v. Ressler & Ressler

United States District Court, S.D. New York

July 27, 2018



          Edgardo Ramos, U.S.D.J.

         Violet Elizabeth Grayson (“Grayson” or “Plaintiff”) brings this action against Ressler & Ressler, a law firm, Ellen Werther (“Werther”), and Bruce Ressler (“Ressler”) (together, “Defendants”). Before the Court is Defendants' motion to for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Doc. 144. For the reasons set forth below, Defendants' motion for summary judgment is GRANTED.

         I. BACKGROUND [1]

         This lawsuit centers on an August 15, 2013 meeting between Werther and Ressler and Robert Mayer (“Mayer”), counsel for the bankruptcy trustee for Grayson's client TradeWinds Airlines (“TW Airlines”).[2] At that time, Werther and Ressler represented Coreolis Holdings (“Coreolis”) and TradeWinds Holdings, Inc. (“TW Holdings”) in a veil piercing suit against George Soros (“Soros”) and Purnedu Chatterjee (“Chatterjee”), which was consolidated with TW Airlines' similar veil piercing suit.

         The gravamen of Grayson's suit against Defendants is that at Werther and Ressler's private meeting with Mayer on August 13, 2015, one or both of them made the following defamatory comments about Grayson:

• Grayson was violating rules of professional ethics and conduct by representing [TW Airlines], with whom she had a conflict of interest;
• Because of her conflict of interest, Grayson could not handle documents or take a leading role in depositions; and
• Grayson did not do her fair share of work on the veil piercing cases.

See Am Compl. (Doc. 97) ¶ 83; see Grayson, 271 F.Supp.3d at 514.

         A. Factual Background [3]

         1. History of the Consolidated Action

         In 2005, Grayson represented Jet Star Airlines (“Jet Star”) in a veil piercing action against Soros and Chaterjee as owners of C-S Aviation. See Declaration of Violet Elizabeth Grayson in Opposition to Defendants' Motion for Summary Judgment (“Grayson Decl.”) ¶ 5. Ultimately, that case was resolved through a settlement and confidentiality agreement, which required the parties and counsel to keep confidential “the existence, provisions, and substance of this Agreement, and the claims for relief sought against Mr. Soros and/or Dr. Chatterjee and the bases or asserted bases therefore.” Declaration of Bruce Ressler in Support of Defendants' Motion for Summary Judgment (“Ressler Decl.”) (Doc. 146) Ex. 26 (“Keenan Op.”), at 4-5. Years later, in 2008, TW Airlines secured a significant default judgment against C-S Aviation. Grayson Decl. ¶¶ 8-9. Grayson was retained to represent the trustee for TW Airlines in a veil piercing suit against Soros and Chatterjee and brought suit against them in this District in 2008.

         Id.; Defs.' 56.1 ¶ 14. In that action, Chatterjee and Soros each raised affirmative defenses relating to Grayson's earlier representation of Jet Star:

Plaintiff's claim is barred because it is based on information provided to plaintiff by its counsel in violation of a confidentiality order entered by the Court in the Jet Star Litigation and in violation of a settlement agreement entered into by plaintiff's counsel in connection with the Jet Star Litigation.

Defs.' 56.1 ¶¶ 25-26. In 2009, Soros also moved to disqualify Grayson as TW Airlines' counsel based on her alleged breach of the Jet Star confidentiality order and settlement agreement. Id. ¶ 36. Judge Keenan, before whom the case was pending, denied the motion, finding that while in one respect Grayson “plainly violate[d] her confidentiality obligations, ” her actions did not “affect or taint” the TW Airlines litigation. Id. ¶ 37; see also Keenan Op. at 16-17.[4]

         Coreolis and TW Holdings also made objections to Grayson's representation of TW Airlines in the Bankruptcy Court.[5] In late 2008, they objected to Grayson's appointment as special litigation counsel for TW Airlines. Id. ¶¶ 63-64. They alleged that Grayson held an adverse interest in the TW Airlines estate, arguing that “the mere possibility that Ms. Grayson may be using confidential and protected information gained in the [Jet Star] litigation against C-S Aviation in this case constitutes an actual or potential conflict of interest with the estate, because the estate may be exposed to claims for damages arising as a result of [TW Airline's] use of such information.” Id. ¶¶ 65-67. On January 7, 2009, the Bankruptcy Court authorized Grayson's appointment as special litigation counsel, notwithstanding Coreolis' and TW Holdings' objection. Id. ¶ 68. The Bankruptcy Judge did, however, state on the record:

We have a suggestion that the attorneys which the trustee in the trustee's business judgment wishes to engage may not be disinterested. If they were engaged and it turned out somewhere down the line that it was determined that they were not disinterested, then they might be barred from collecting a fee. So that is a risk that they probably need to be aware of it they're going forward with this matter . . . .

See Ressler Decl. Ex. 44 (Transcript of January 7, 2009 Hearing).

         In 2010, Ressler & Ressler represented Coreolis and TW Holdings in a veil piercing action against Soros and Chatterjee. Defs.' 56.1 ¶ 13. At some point, both veil piercing actions were consolidated by Judge Keenan. Id. ¶ 15. Coreolis, TW Holdings, and TW Airlines entered into a joint prosecution agreement. Id. ¶ 47. The agreement allowed the three parties to pursue their common interests in responding to legal issues raised by Soros and Chatterjee. Id. ¶ 48.

         According to Grayson, she did most of the work in the consolidated action, because she was more familiar with the facts, was an exceptional legal researcher and writer, and because Werther and Ressler were busy with a different case. Grayson Decl. ¶ 31. For example, she states that she assumed the lead at the deposition of C-S Aviation's first President, Bharat Bhise. Id. ¶ 34. In 2013, Werther informed Grayson that she wanted to hire her friend, Martin Bienenstock, to render an expert opinion on C-S Aviation's financial condition. Id. ¶ 37. Grayson did not think this was valuable, as she had obtained a declaration about C-S Aviation's insolvency in the Jet Star case. Id. ¶¶ 35, 37. Werther also asked Grayson to pay for half of Bienenstock's fee, and later pressed her to ask the trustee to fund the expenses. Id. ¶¶ 37, 39.

         On August 10, 2013, Ressler and Werther stopped answering Grayson's emails and phone calls. Id. ¶ 43. Mayer also informed Grayson that he wanted to meet with her, Ressler, and Werther. Id. ΒΆ 44. Ultimately, however, Grayson met with Mayer ...

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