In re Pu

37 A.D.3d 56, 826 N.Y.S.2d 43
CourtAppellate Division of the Supreme Court of the State of New York
DecidedDecember 12, 2006
StatusPublished
Cited by12 cases

This text of 37 A.D.3d 56 (In re Pu) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Pu, 37 A.D.3d 56, 826 N.Y.S.2d 43 (N.Y. Ct. App. 2006).

Opinion

OPINION OF THE COURT

Per Curiam.

Respondent was admitted to the practice of law in the State of New York by the First Judicial Department on April 24, 1978. At all times relevant to this proceeding, respondent has maintained an office within the First Department.

The Departmental Disciplinary Committee now seeks an order, pursuant to 22 NYCRR 603.3, suspending respondent for not less than six months predicated upon a six-month suspension issued by the United States District Court for the Southern District of New York, or, in the alternative, imposing a sanction that this Court deems just and proper.

By order filed June 1,. 2006, the Southern District of New York, based upon a stipulation, suspended respondent from the practice of law for a period of six months for advancing a theory in litigation and for making a representation to the court that he knew was false, both of which were deemed prejudicial to the administration of justice.

Respondent represented the plaintiffs in litigation entitled Food Mgt. Group, LLC (FMG) v QuesTech Fin., LLC, et al. that involved the question of who retained control over certain Dunkin’ Donut franchises owned by QuesTech. Expedited discovery was ordered by the court. QuesTech made discovery demands seeking certain franchise agreements and subsequently moved for sanctions based on, inter alia, QuesTech’s view that respondent and his clients engaged in bad-faith failure to comply with court-ordered discovery demands.

A sanction hearing was held before Magistrate Fox during which respondent and his clients invoked their Fifth Amendment privilege on advice of counsel and “declined to answer specific relevant questions.” In an order and decision dated March 8, 2005, Magistrate Fox imposed sanctions in the amount of $238,735.64 against respondent and Tom Gianopoulos (who controls FMG) jointly and severally, for serious misconduct that included the making of false statements, violating court orders and engaging in discovery abuses in order to avoid the disclosure of the identities of the holders of the Dunkin’ Donuts franchises.

The Magistrate found, among other things, that the abandoned-property theory advanced by the plaintiffs was a [58]*58“preposterous litigation position” which “compels the inference of attorney participation [in its creation],” and. that respondent’s client, in many instances, took contradictory positions as to whether or not FMG was a franchisee. In addition, the Magistrate found that respondent made a representation to the court indicating that the franchise agreements had already been produced in discovery when, in fact, at the time, respondent “knew that such an agreement(s) did not exist.” The Magistrate stated that in a separate sanction proceeding the court had sanctioned FMG $5,000 for its “malfeasance” in failing to produce the franchise agreements and he noted that this obfuscation “underscores the degree to which Tom and [respondent] were willing to go to conceal from QuesTech that FMG’s theory of the case had no basis in law or fact.” Respondent and Tom appealed.

By order dated April 7, 2005, District Judge Colleen McMahon affirmed the Magistrate’s findings as to respondent’s (and Tom’s) misconduct, but vacated the sanctions award and remanded the matter only for recalculation of the sanction amount. Judge McMahon’s decision provides a helpful summary of Magistrate Fox’s findings of misconduct:

“[Judge Fox] determined that Pu [respondent] should be sanctioned because he actively impeded QuesTech, during the course of this lawsuit, from obtaining evidence that would have advised QuesTech who held the collateral it here [sic] seeks to recover. ... I find no clear error in the Magistrate Judge’s report insofar as it concludes that misconduct, including perjury, misrepresentations to the court, and multiple discovery violations, was committed by both Pu and [Tom]. . . .
“The evidence in the record establishes beyond peradventure that Pu, an attorney, lied in pleadings submitted to this Court in this lawsuit. Pu began making misrepresentations in this action as early as the date on which he served his client’s Answer and RICO Counterclaim, which was March 9, 2004, and continued to make misrepresentations (including the statement that FMG was a “finder of lost property,” an assertion that Judge Fox correctly branded as “preposterous”), and to proffer testimony from [Tom] that he knew to be false until he was replaced as FMG’s counsel. Specifically, Pu signed [various [59]*59pleadings of FMG] . . . [that] contained material misstatements of fact, and Pu knew they contained material misstatements of fact.
“The evidence also establishes that Pu intentionally made numerous false statements to the Magistrate Judge in open court, as well as to this Court and to opposing counsel, concerning the production (or, to be more precise, the non-production) of the ‘FMG Franchise Agreement.’ Pu knew that there was no such document, because the evidence (which includes statements made or endorsed by Pu in other lawsuits, such as the January 2, 2004 letter) demonstrates that Pu knew perfectly well that FMG was not the holder of the relevant Dunkin Donuts franchises. Nonetheless, Pu did not apprise the Court (either me or Judge Fox) of this fact, but repeatedly insisted [that] the FMG Franchise Agreement (or agreements) had been produced by FMG during discovery (to the point of alleging in a hearing that QuesTech must have lost the box of documents to which this non-existent agreement had been produced). . . .
“Almost everything that occurred in this lawsuit between March 9 and FMG’s filing in bankruptcy—all the obfuscations and misrepresentations during discovery, all the motions to compel before Judge Fox, all the concealment and all the efforts that had to be expended to uncover the concealment—would never have happened if, in the original Answer and Counterclaims, Pu had forthrightly revealed that FMG was not the franchisee and did not possess the collateral. I agree completely with Judge Fox that the actions committed by Pu (and Gianopoulos) ‘are so completely without merit, as to require the conclusion that they must have been undertaken for some improper purpose such as delay.’ ”

Judge McMahon also referred the matter of respondent’s misconduct to the Grievance Committee of the Southern District of New York, which based on the findings made by Magistrate Fox on March 8, 2005, as affirmed by Judge McMahon on April 7, 2005, directed respondent to respond to allegations that he knowingly: (1) falsely represented that FMG was the franchisee [60]*60of Dunkin’ Donuts shops; (2) falsely represented to the court that FMG controlled the collateral at issue in FMG v QuesTech; (3) violated discovery orders by refusing to produce certain franchise agreements; (4) represented to the court the existence of documents the court later determined did not exist; (5) engaged in abuses for the purpose of delaying and misleading his adversary and the court; and (6) sponsored perjured testimony, in violation of Code of Professional Responsibility DR 1-102 (a) (1), (4), (5) and (7) and DR 7-102 (a) (1), (2), (3) and (5) (22 NYCRR 1200.3, 1200.33). On or about November 2, 2005, respondent submitted an extensive response wherein he denied the misconduct alleged.

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Cite This Page — Counsel Stack

Bluebook (online)
37 A.D.3d 56, 826 N.Y.S.2d 43, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-pu-nyappdiv-2006.