JULIEN v. LIEBERT (1998)

Order, Supreme Court, New York County (Carol Huff, J.), entered on or about February 27, 1997, which, inter alia, granted plaintiff's motion to confirm the report of the Special Referee and directed entry of judgment in his favor, and judgment, same court and Justice, entered March 4, 1997 in favor of plaintiff in the total sum of $172,005.91, unanimously modified, on the law and the facts, to the extent of staying enforcement of $50,000 pending determination of defendant's malpractice counterclaim and further order of Supreme Court, and remanding the matter for further proceedings, and otherwise affirmed, without costs.

Since the findings of the Special Referee as to the amount of the fees and interest thereon were supported by the record, the report was properly confirmed (see, Namer v. 152-54-56 W. 15th St. Realty Corp., 108 A.D.2d 705, 485 N.Y.S.2d 1013).

Although defendant had properly interposed a counterclaim for malpractice to avoid being collaterally estopped from raising it at a later date (see, Matter of Sackler, 222 A.D.2d 9, 13, 644 N.Y.S.2d 796), and the Referee credited defendant's testimony with respect to the existence of underlying malpractice issues, in particular as to plaintiff's failure to protect defendant's rights with respect to prejudgment interest in the underlying action (see, Kleartone Transparent Prods. Co. v. Dun & Bradstreet, 118 A.D.2d 832, 500 N.Y.S.2d 316), the Referee concluded that the issue of malpractice was not before her.   Had the malpractice claim been sustained, damages thereon would have provided a substantial setoff against the award of outstanding legal fees owed.   Thus, we stay enforcement of an appropriate portion of the judgment and remand the matter for further proceedings, including a determination of the malpractice counterclaim.

MEMORANDUM DECISION.