KLEJMONT v. DePROSPO PETRIZZIO LONGO BARTLETT (2002)

Judgment unanimously reversed without costs and matter remanded to the lower court for all further proceedings.

Plaintiff commenced the instant small claims action against the defendant law firm alleging that defendant improperly paid medical bills out of his settlement proceeds.   Prior to commencing this action, plaintiff filed a complaint with the Grievance Committee for the Ninth Judicial District alleging the same issue.   After conducting an investigation, the Grievance Committee determined that defendant had not breached the Code of Professional Responsibility.   Defendant moved for summary judgment dismissing the instant claim based on the doctrines of res judicata and collateral estoppel.   After a hearing on the motion, the court dismissed plaintiff's action finding it had been previously adjudicated.

Inasmuch as the lower court dismissed plaintiff's action based on the fact that the Grievance Committee had previously found no merit to plaintiff's claim, the court's decision was based solely on the doctrine of res judicata and/or collateral estoppel rather than on its own determination of the merits.   Since the Grievance Committee's decision was summary in nature and made without the benefit of a hearing at which plaintiff could have testified, it has no res judicata and/or collateral estoppel effect on the issues raised in the instant action (see Bennardo v. Equitable Land Servs., 244 A.D.2d 304, 663 N.Y.S.2d 892).   Accordingly, substantial justice requires that the judgment be reversed, the claim reinstated and the matter remanded to the lower court for all further proceedings (UJCA 1807).