Katz v. Robinson Silverman Pearce Aronsohn & Berman, L. L. P.

277 A.D.2d 70, 717 N.Y.S.2d 13, 2000 N.Y. App. Div. LEXIS 12000
CourtAppellate Division of the Supreme Court of the State of New York
DecidedNovember 16, 2000
StatusPublished
Cited by12 cases

This text of 277 A.D.2d 70 (Katz v. Robinson Silverman Pearce Aronsohn & Berman, L. L. P.) 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
Katz v. Robinson Silverman Pearce Aronsohn & Berman, L. L. P., 277 A.D.2d 70, 717 N.Y.S.2d 13, 2000 N.Y. App. Div. LEXIS 12000 (N.Y. Ct. App. 2000).

Opinion

—Order, Supreme Court, New York County (Lorraine Miller, J.), entered April 27, 2000, which, in this action for legal malprac[71]*71tice, inter alia, denied plaintiffs motion to restore his action to the trial calendar, unanimously affirmed, without costs.

This legal malpractice action, begun in January 1992, arises out of the 1984 assignment of a contract for the construction of a hotel in Tennessee to a limited partnership, of which plaintiff was one of the general partners. The complaint identifies plaintiff as a graduate of Brooklyn Law School and a former partner in a law practice. It describes defendant as the law firm that “advised Mr. Katz on all legal issues necessary to take advantage of business, tax and legal opportunities” in connection with his real estate business. The complaint alleges that defendant was negligent in drafting the assignment of a hotel construction contract by failing to insert an exculpation clause to protect the personal assets of the general partners.

In 1986, the contractor, Hardin International, Inc., claimed that it was owed approximately $2 million for changes made during the course of the construction project, obtaining a 1990 Tennessee judgment against the limited partnership and its general partners in excess of $3.5 million. The judgment was docketed in New York, and enforcement proceedings have been brought against plaintiffs assets.

On June 17, 1997, plaintiff filed a voluntary petition under chapter 11 of the Bankruptcy Code (11 USC). The Bankruptcy Court imposed a stay of proceedings in the instant action commencing July 9, 1997. In October 1997, Hardin brought" an adversary proceeding before the Bankruptcy Court, claiming that the portion of plaintiffs debt represented by its Tennessee judgment was non-dischargeable. The record does not reflect the original grounds for the stay of the State court action, but it was extended by an order dated January 22, 1998, entered on consent of plaintiff and Hardin, which provided that the stay would terminate upon the earlier of (1) the conclusion of the adversary proceeding initiated by Hardin or (2) April 1, 1998.

Plaintiffs bankruptcy counsel delivered a letter to Supreme Court, enclosing a copy of the consent order imposing the stay. The letter notes that the parties were scheduled to appear on February 9, 1998 and requests “that the pre-trial conference be adjourned without date pending further action by the Bankruptcy Court.” The Clerk’s minutes for February 9 reflect that the matter was “marked off” by Supreme Court on that date.

The bankruptcy proceeding was not resolved until June 17, 1999, at which time plaintiff and Hardin stipulated that $700,000 of the $4.4 million (including interest) Tennessee judgment would be non-discharge able; that plaintiff would [72]*72make scheduled cash payments to the contractor, Hardin International, totaling $150,000; that plaintiff would engage counsel and advance up to $50,000 in fees, assigning to Hardin any recovery in this action as security for the balance of the non-dischargeable debt; and that plaintiff would prosecute this action diligently, advise Hardin monthly of its progress and obtain Hardin’s consent before entering into any settlement. Pursuant to the stipulation, the bankruptcy proceeding was dismissed by order dated August 30, 1999.

Meanwhile, on or about May 4, 1999, defendant served a demand to file a note of issue. In August, plaintiff, acting pro se, attempted to file the note of issue with the Clerk, who refused to accept it on the ground that the matter had been struck from the court’s calendar. Plaintiff then brought the subject motion dated February 9, 2000 to restore the case to the trial calendar, and defendant cross-moved to dismiss the action as abandoned pursuant to CPLR 3404. Supreme Court held that plaintiff’s delay in bringing his motion to restore until a year and ten months after the bankruptcy stay had been lifted and five months after learning that the case had been marked off the calendar, together with his failure to demonstrate the merit of his claim or a substantial likelihood of success on the merits did not support restoration pursuant to CPLR 3404.

On appeal, plaintiff assigns error to Supreme Court’s decision on three grounds: that the case was marked off calendar in violation of Federal law; that it was marked off due to no fault of plaintiff and, therefore, must be restored without regard to the factors for restoring a matter deemed abandoned pursuant to CPLR 3404; and that, in any event, the criteria for restoration of the case to the calendar have been met.

Plaintiff attempts to avoid the necessity to demonstrate grounds for vacating a default (Rodriguez v Middle Atl. Auto Leasing, 122 AD2d 720, 722, appeal dismissed 69 NY2d 874). He first contends that, in taking this case off its trial calendar, Supreme Court violated the stay imposed by Bankruptcy Court and that its action must therefore be deemed a nullity. He argues that “[w]hile the stay in this case was entered pursuant to 11 USC § 105, it advanced precisely the same interest as a § 362 stay and, therefore, should be treated no differently.” This argument is without merit.

In alluding to the automatic stay provided by 11 USC § 362, plaintiff implicitly recognizes that the equitable powers of the Bankruptcy Court pursuant to 11 USC § 105 “must and can only be exercised within the confines of the Bankruptcy Code” [73]*73(Norwest Bank Worthington v Ahlers, 485 US 197, 206; Matter of Fesco Plastics Corp., 996 F2d 152, 154 [7th Cir 1993] [“Under this section, a court may exercise its equitable power only as a means to fulfill some specific Code provision.”]). 11 USC § 362 (a) (1) precludes “the commencement or continuation * * * of a * * * proceeding * * * to recover a claim against the debtor.” The claim in this action is prosecuted by, not against, the debtor, whose assets are not threatened. In the absence of any counterclaim asserted by defendant law firm against plaintiff, the automatic stay provision is inapposite (McMillan v MBank Fort Worth, 4 F3d 362, 366 [5th Cir 1993]).

Parties are afforded great latitude in charting their procedural course through the courts (Stevenson v News Syndicate Co., 302 NY 81, 87; see also, Mitchell v New York Hosp., 61 NY2d 208, 214; Matter of Malloy, 278 NY 429), by stipulation or otherwise. The record reflects that plaintiff actively solicited and obtained the assistance of Bankruptcy Court in staying the prosecution of his own action against defendant law firm. Having sought to adjourn a scheduled pretrial conference in furtherance of the stay, plaintiff will not be heard to complain that Supreme Court acceded to his request.

Plaintiff has failed to demonstrate how any provision or policy of the Bankruptcy Code has been offended because Supreme Court undertook to place this matter into an inactive status. Removal of the case from its trial calendar was a measure in assistance, not in contravention, of the Bankruptcy Court’s order. Fault cannot be retrospectively assigned to Supreme Court’s ministerial act merely because unanticipated adverse consequences have arisen as the result of plaintiff’s inattention to this litigation. Furthermore, dismissal pursuant to CPLR 3404 does not take place until a year after the removal of a case from the calendar. It is undisputed that there was no stay in effect after April 1, 1998, and a dismissal deemed to have occurred on February 9, 1999 is therefore not precluded.

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Bluebook (online)
277 A.D.2d 70, 717 N.Y.S.2d 13, 2000 N.Y. App. Div. LEXIS 12000, Counsel Stack Legal Research, https://law.counselstack.com/opinion/katz-v-robinson-silverman-pearce-aronsohn-berman-l-l-p-nyappdiv-2000.