BROOKS v. SHECHTMAN (2022)

Defendants move pursuant to CPLR 3211 (a) (5) and (7) to dismiss the complaint.

Plaintiff's complaint alleges that the decedent David Brooks (Brooks) was the Chief Executive Officer, Chairman, and majority shareholder of DHB Industries (DHB) and that at some point in 2006, Brooks learned that he or one or more executives of DHB were under investigation by the U.S. Securities Exchange Commission and that they were subjects of a federal grand jury investigation conducted by the U.S. Attorney's Office for the Eastern District of New York (NYSCEF Doc No 1, complaint at ¶¶ 5-6). The federal grand jury investigating DHB, Brooks and others was impaneled on April 5, 2006 (id. at ¶ 7).

In or about January 2007, Brooks consulted with and subsequently retained and hired defendants Paul Shechtman (Shechtman), the principal or member of defendant Stillman Friedman & Shechtman P.C. (SFS) (collectively, defendants) (id. at ¶3, 11). The complaint alleges that, pursuant to Federal Rule of Criminal Procedure 6 (g), the grand jury's lawful term lasts only eighteen months and therefore expired on October 6, 2007 (id. at ¶ 13). The complaint alleges that on or about October 24, 2007, Shechtman advised Brooks during a meeting that the federal grand jury that was investigating Brooks had or was about to expire (id. at ¶ 12). Nevertheless, Brooks was arrested and taken into custody on charges set forth in a superseding indictment on October 25, 2007 (id. at ¶ 15). The complaint alleges that defendants knew, or in the exercise of reasonable care should have known, that the grand jury's term had expired and therefore had no lawful authority to indict (see, e.g., id. at ¶ 17).

On or about July 9, 2009, a new grand jury returned a second superseding indictment adding another defendant. The charges against Brooks were identical as the first superseding indictment (id. at ¶ 20). Brooks was convicted of several of the alleged offenses on or about September 14, 2010 and Brooks pled guilty to certain offenses that were severed from the trial in the main case (id. at ¶ 21). Brooks was sentenced on August 15, 2013 to a lengthy term of imprisonment and the sentencing court also imposed a fine, a forfeiture money judgment and ordered restitution (id. at ¶ 21). Pending subsequent appeal of the convictions, Brooks died while in federal custody on October 27, 2016 (id. at ¶ 23). His counsel moved to abate his convictions, which was granted in part on September 20, 2017 by the U.S. Second Circuit Court of Appeals (id.). The complaint alleges that the Second Circuit's decision became final on October 1, 2018, when the U.S. Supreme Court declined to grant certiorari (id.).

In determining dismissal under CPLR Rule 3211 (a) (7), the “complaint is to be afforded a liberal construction” (Goldfarb v. Schwartz, 26 A.D.3d 462, 463, 811 N.Y.S.2d 414 [2d Dept. 2006]). The “allegations are presumed to be true and accorded every favorable inference” (Godfrey v. Spano, 13 N.Y.3d 358, 373, 892 N.Y.S.2d 272, 920 N.E.2d 328 [2009]). “[T]he sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail” (Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182, 372 N.E.2d 17 [1977]). “Whether a plaintiff can ultimately establish its allegations is not part of the calculus in determining a motion to dismiss” (EBC I, Inc. v. Goldman, Sachs & Co., 5 N.Y.3d 11, 19, 799 N.Y.S.2d 170, 832 N.E.2d 26 [2005]).

“In an action to recover damages for legal malpractice, a plaintiff must demonstrate that the attorney ‘failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession’ and that the attorney's breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages’ ” (Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 438, 442, 835 N.Y.S.2d 534, 867 N.E.2d 385 [2007], quoting McCoy v. Feinman, 99 N.Y.2d 295, 301-302, 755 N.Y.S.2d 693, 785 N.E.2d 714 [2002]). When the alleged negligent representation arises from a criminal proceeding, plaintiff must also “allege his innocence or a colorable claim of innocence of the underlying offense” (Carmel v. Lunney, 70 N.Y.2d 169, 173, 518 N.Y.S.2d 605, 511 N.E.2d 1126 [1987]; see Sgambelluri v. Ironman, 78 A.D.3d 924, 925, 911 N.Y.S.2d 427 [2d Dept. 2010]). “In order to open the door for even a colorable claim of innocence, criminal defendants must free themselves of the conviction, for the conviction precludes those potential plaintiffs from asserting innocence in a civil suit” (Britt v. Legal Aid Socy., Inc., 95 N.Y.2d 443, 447, 718 N.Y.S.2d 264, 741 N.E.2d 109 [2000]). Plaintiff must also “show that the attorney was the proximate cause of his or her conviction” (Britt v. Legal Aid Socy., 95 N.Y.2d 443, 446, 718 N.Y.S.2d 264, 741 N.E.2d 109 [2000]; see Dombrowski v. Bulson, 19 N.Y.3d 347, 350-351, 948 N.Y.S.2d 208, 971 N.E.2d 338 [2012]). More specifically, the law requires that the plaintiff “bear the unique burden to plead and prove that the client's conviction was due to the attorney's actions alone and not due to some consequence of his guilt” (id. at 447, 718 N.Y.S.2d 264, 741 N.E.2d 109; see Rudolf, 8 N.Y.3d at 442, 835 N.Y.S.2d 534, 867 N.E.2d 385 [“To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer's negligence”]).

Here, because Brooks plead guilty to certain tax evasion counts, those convictions were not abated by the Second Circuit in (United States v. Brooks, 872 F.3d 78, 87-88 [2d Cir. 2017]). Accordingly, the legal malpractice action may not be maintained as to those counts (see Sgambelluri, 78 A.D.3d at 925, 911 N.Y.S.2d 427 [“A plea of guilty bars recovery for legal malpractice, ‘[r]egardless of the plaintiff's subjective reasons for pleading guilty’ ”], quoting Casement v. O'Neill, 28 A.D.3d 508, 509, 812 N.Y.S.2d 649 [2d Dept. 2006] [internal citations omitted]).

As for the remaining convictions, plaintiff argues that the mere abatement of them due to Brooks’ death suffices for the purposes of a legal malpractice claim, given the significance of the abatement “ab initio” as if the convictions never happened (see NYSCEF Doc No 9, plaintiff's mem in opp at 7). However, the Court finds that the abatement of the conviction due to Brooks’ death, by itself, falls short of being construed as a “colorable claim of innocence” required for the legal malpractice claim. Notably, there are no allegations of innocence in the entire complaint and, without it, “public policy prevents maintenance of a malpractice action against his attorney” (Carmel, 70 N.Y.2d at 173, 518 N.Y.S.2d 605, 511 N.E.2d 1126 [1987]).

Accordingly, it is hereby ORDERED that the motion is granted for failing to state a claim and the complaint is dismissed in its entirety, with costs and disbursements to said defendants as taxed by the Clerk of the Court, and the Clerk is directed to enter judgment accordingly in favor of said defendants.

This constitutes the decision and order of the Court.

Alexander M. Tisch, J.