Civil Court of the City of New York, New York County, June 27, 2018

Law Office of Paul O'Dwyer, P.C. (Paul O'Dwyer of counsel) for plaintiff.

Law Office of Nestor Rosado (Nestor Rosado of counsel) for defendant.

Plaintiff/judgment creditor Jose Borges retained defendant/judgment debtor Alfred Placeres, an immigration attorney, for immigration proceedings. During the proceedings, defendant instructed plaintiff not to appear in immigration court on a specific date. Upon plaintiff's absence, an immigration court judge issued an in absentia deportation order which resulted in plaintiff's 14-month detention. Plaintiff consequently filed a legal malpractice action arguing, in sum and substance, that defendant's instruction was negligent (Borges v Placeres, 43 Misc 3d 61, 63 [App Term, 1st Dept 2014], affd 123 AD3d 611 [1st Dept 2014]). The jury found unanimously in favor of plaintiff that defendant committed malpractice and a judgment was entered of $1,250,206.37—including, as relevant here, damages for pain and suffering in the amount of $900,000.

Defendant subsequently engaged in several unsuccessful appeals, arguing, in relevant part, for vacatur of the verdict because damages for pain and suffering are unrecoverable for legal malpractice (43 Misc 3d 61 [App Term, 1st Dept 2014]; 123 AD3d 611 [1st Dept 2014]; 2015 NY Slip Op 77781[U] [1st Dept 2015]). The Appellate Term held that

"[w]ith respect to damages, it need be emphasized that our review of the jury's award may not be based on the recent decisional law relied upon by defendant—precedent holding that an award of nonpecuniary damages is generally unavailable to a plaintiff in an action for attorney malpractice. Notably, defendant did not raise an objection to the jury charge as given, instructing the jury that they could award plaintiff damages for pain and suffering, or to the corresponding question on the verdict{**60 Misc 3d at 1035} sheet, and, indeed, defendant raised no objection at trial to the introduction of evidence regarding the mental and emotional disturbance caused by plaintiff's detention" (43 Misc 3d at 64).

After defendant exhausted his appeals, on January 22, 2015, plaintiff served upon defendant an information subpoena pursuant to CPLR 5224 (a) (3) (plaintiff's exhibit A). Plaintiff contends that defendant never responded to the subpoena and, in any [*2]event, should update any response to include new assets because "[d]efendant's lot in life seems to have improved" (plaintiff's reply at 2).^[FN1] Defendant responds that he has provided full disclosure but, in any event, is willing to supplement that disclosure (defendant's aff ¶¶ 11-12, citing defendant's exhibit F).^[FN2]

On March 11, 2015, the Honorable Debra R. Samuels granted plaintiff's motion to hold defendant in contempt for his failure to respond to the subpoena (mot sequence No. 21). At the court's instruction, plaintiff submitted an order of settlement on notice, returnable March 31, 2015 (plaintiff's exhibit B). Defendant answered by informing plaintiff and the court that he had filed for chapter 7 bankruptcy on March 23, 2015, and requesting a stay (defendant's exhibit B; In re Placeres, US Dist Ct, SD NY, No. 15-10691 [SMB]). On June 16, 2015, Judge Samuels stayed all enforcement proceedings "pending resolution of the bankruptcy petition" and held that "either side may move for restoration of the instant motion and vacatur of stay" (defendant's exhibit A).^[FN3]

On August 5, 2015, "the chapter 7 trustee filed a report of no distribution, signaling that the estate was fully administered and there were no assets to administer for the benefit of creditors" (In re Placeres, 578 BR 505, 514 [Bankr SD NY 2017]). Plaintiff filed a motion to compel the trustee to abandon defendant's malpractice claim so that plaintiff could pursue it on defendant's behalf (id.). The bankruptcy court granted the abandonment motion over the objections of the trustee and defendant, but ordered abandonment to defendant rather than{**60 Misc 3d at 1036} plaintiff (id.). That day, defendant amended his bankruptcy schedules to list, for the first time, the malpractice cause of action, valuing the claim at $1 (id.).

Plaintiff then commenced an adversary proceeding on October 13, 2015, seeking dismissal of the chapter 7 petition. Plaintiff argued, in sum and substance, that defendant had intentionally omitted information about a potential cause of action for malpractice against his attorneys for failing to object to the improper jury charges. Plaintiff contended that defendant did so because at least one of defendant's attorneys, Torres, was a friend who represented him as a favor; for the same reason, plaintiff contended (and contends now) that defendant would never pursue any potential malpractice claim, in effect improperly withholding a potential avenue of recovery from plaintiff.

After dismissing various counts and conducting a trial, the bankruptcy court addressed, as relevant here, first, "whether Placeres' debt to Borges is not dischargeable because it resulted from a willful and malicious injury," and second, "whether Placeres should be denied a general discharge based on his knowing, fraudulent statements and omissions in his schedules and at his § 341 meeting regarding a malpractice claim against his state court attorneys" (id.). The bankruptcy court resolved the former in favor of defendant and dismissed that count (id. at 520).

With respect to the second question, however, the bankruptcy court found that "[t]he [*3]evidence demonstrates that Placeres knowingly omitted the malpractice claim [with a potential value of $900,000] to protect his long-time friend Torres, who did not actually try the case but served as Placeres' attorney of record at all relevant times" (id. at 521-522; plaintiff's reply, exhibit H at 4 et seq.). Specifically, the court found that

"[defendant] understood when [defendant's attorney] Torres and he were preparing his appeal that his trial attorney had made a mistake by failing to object. Furthermore, he was aware when he filed his bankruptcy petition that but for his trial counsel's error, [plaintiff] would not have recovered $900,000 for pain and suffering. Despite [defendant's] knowledge, he did not list the malpractice claim as an asset on Schedule 'B' where he was required to list his personal property, and when questioned at his § 341 meeting under oath, he told {**60 Misc 3d at 1037}his chapter 7 trustee that he did not have any reason to sue anyone for malpractice. . . .

"[Defendant] knew by the time he filed his bankruptcy case that his trial attorney had made a serious mistake that resulted in a $900,000 pain [and] suffering award. [Defendant] is an attorney who has been practicing law since 1976. Given his relative legal sophistication, it defies belief for him to say that he didn't know he had a legal malpractice claim, or that he honestly thought that any reference to malpractice or claims at his section 341 meeting referred only to medical malpractice or personal injury.

"It became clear at trial that [defendant] omitted any reference to a malpractice claim in his schedules and at his § 341 meeting to protect [defendant's attorney] Torres. [Defendant] and Torres had been friends since they had attended high school and college together. Torres represented [defendant] throughout for free. Torres was unable to conduct the trial for personal health reasons, and [defendant] retained Brian Robinson to serve as trial counsel. Nevertheless, Torres remained the attorney of record, Robinson was never formally substituted, and Torres handled the appeals. Most telling, at one point after the trustee had abandoned the malpractice claim, [plaintiff] offered to dismiss the adversary proceeding if [defendant] would assign the claim to him. [Defendant] refused because Torres was his friend since high school, he represented [defendant] for free, Torres did not represent him at trial and he was not going to throw Torres 'under the bus' " (578 BR at 522-523).

Accordingly, on December 5, 2017, the bankruptcy court denied the discharge because defendant had "failed to disclose the malpractice claim, a material asset, in his schedules and during his sworn testimony at his § 341 meeting" (id. at 523). Thus, defendant retained both the debt, as well as—pursuant to the bankruptcy court's abandonment ruling—the potential cause of action against his former attorneys.

Plaintiff/judgment creditor Jose Borges now moves: (1) to compel defendant to respond to the subpoena; (2) to hold defendant in contempt for his failure to respond to the subpoena; (3) to restrain defendant from selling, transferring, encumbering, concealing, assigning, removing, or in any way disposing{**60 Misc 3d at 1038} of any property or assets; (4) to compel assignment from defendant to plaintiff of a legal malpractice claim against the attorneys who represented defendant at trial; and (5) for such other and further relief as the court may deem proper.

Having considered the papers and arguments of the parties, plaintiff's motion is granted to the extent that defendant's interest in a cause of action for legal malpractice [*4]against his former attorneys shall be assigned to plaintiff; severed with respect to plaintiff's request that the court sign the order on notice requested by Judge Samuels; and respectfully referred to Judge Samuels for decision in accordance with her earlier directive(s).

I. Procedural Issues

Two threshold matters require resolution. First, after Judge Samuels granted the earlier contempt motion in March of 2015, she stayed the matter without signing plaintiff's proposed order and directed the parties to submit an order on notice in accordance with her decision. The stay imposed by Judge Samuels' June 16, 2015 order staying proceedings was never vacated. To the extent, however, that at least one condition which the order contemplated—that is, resolution of the bankruptcy proceedings—has been satisfied, and to the extent that neither party objects on these grounds to the court addressing the substantive arguments, this court vacates the June 16, 2015 stay.

Because, however, the motion remains substantively unresolved, and because plaintiff seeks to introduce new information about alleged changes to defendant's financial circumstances under the umbrella of Judge Samuels' original order, that portion of this motion is respectfully referred to Judge Samuels.^[FN4] As defendant never responded to plaintiff's proposed order, defendant is now afforded an additional 30 days to do so.^[FN5]

Second, defendant objects to plaintiff's motion on the grounds that plaintiff's counsel's affirmation is unsworn. However, as{**60 Misc 3d at 1039} plaintiff correctly notes, CPLR 2001 empowers the court to disregard any non-prejudicial error, omission, or defect in a party's papers. To the extent that the substantive portion of plaintiff's affirmation relies on facts and arguments which the court can independently verify through case law and various exhibits, the court finds it appropriate to disregard said defect here. Moreover, plaintiff's counsel, an officer of the court, made identical representations during oral argument which this court has no reason to doubt.

For similar reasons, the court also disagrees with defendant's argument that plaintiff's notice of motion and supporting papers are deficient pursuant to CPLR 2214 (a); that is, the substantive motion papers provide adequate notice to defendant of plaintiff's operative arguments (see Matter of Blauman-Spindler v Blauman, 68 AD3d 1105, 1106 [2d Dept 2009] ["there is no requirement that a movant identify a specific statute or rule in the notice of motion, only that the notice 'specify . . . the relief demanded and the grounds therefor' "]).

II. Assignment of Defendant's Cause of Action for Legal Malpractice against His Trial Attorneys

The parties agree that a cause of action for legal malpractice is generally assignable (6A NY [*5]Jur 2d, Assignments § 16; Chang v Chang, 226 AD2d 316 [1st Dept 1996]; Greevy v Becker, Isserlis, Sullivan & Kurtz, 240 AD2d 539, 541 [2d Dept 1997]; Molina v Faust Goetz Schenker & Blee, LLP, 230 F Supp 3d 279, 285 [SD NY 2017]; General Obligations Law § 13-101; defendant's mem of law at 12). Where the parties disagree, however, is whether this court can compel the assignment of a prospective cause of action to satisfy a debt.

Defendant fails to provide a credible argument that a debtor cannot be compelled to assign a prospective cause of action to satisfy a debt (see defendant's mem of law at 11). A money judgment may be enforced against any debt, including "a cause of action which could be assigned or transferred accruing within or without the state" (CPLR 5201 [a]; ABKCO Indus. v Apple Films, 39 NY2d 670, 673 [1976]). CPLR 5225 (a) provides that

"[u]pon motion of the judgment creditor, upon notice to the judgment debtor, where it is shown that the judgment debtor is in possession or custody of{**60 Misc 3d at 1040} money or other personal property in which he has an interest, the court shall order that the judgment debtor pay the money, or so much of it as is sufficient to satisfy the judgment, to the judgment creditor and, if the amount to be so paid is insufficient to satisfy the judgment, to deliver any other personal property, or so much of it as is of sufficient value to satisfy the judgment, to a designated sheriff" (emphasis added).

CPLR 5201 (b) further defines the property subject to turnover: "[a] money judgment may be enforced against any property which could be assigned or transferred, whether it consists of a present or future right or interest and whether or not it is vested, unless it is exempt from application to the satisfaction of the judgment" (emphasis added). By its explicit terms, and reading CPLR 5225 (a) and 5201 (b) together, CPLR 5201 (b) includes future and/or unvested rights, including, as relevant here, a legal malpractice claim which has not yet been filed, and which defendant has made clear he has no intention to file.

The preceding statutes and case law codify the principle that compels "the ultimate payment of a debt by one who in justice, equity and good conscience [should] pay it" (Arnold v Green, 116 NY 566, 571-572 [1889]; see CPLR 5240 ["The court may at any time, on its own initiative or the motion of any interested person, and upon such notice as it may require, make an order denying, limiting, conditioning, regulating, extending or modifying the use of any enforcement procedure"]; National Sur. Co. v National City Bank of Brooklyn, 184 App Div 771, 773-774 [1st Dept 1918] [citing the principle that "compel(s) the creditor to assign a cause of action which he had against a third person to sureties who have paid the debt of their principal"]; see also De Long Corp. v Lucas, 176 F Supp 104, 127 [SD NY 1959] [finding that "an assignment of future improvements to a patent which the inventor may thereafter produce" is effective so long as the "language of the contract (is) very plain and evidence unmistakably that such an agreement was in the mind of the inventor"], affd 278 F2d 804 [2d Cir 1960]; see also Cohen v Hughes, 38 NYS2d 874, 877 [Sup Ct, NY County 1942] [denying motion to dismiss cause of action seeking to compel assignment of interest in limited partnership], affd 266 App Div 658 [1st Dept 1943], affd 291 NY 698 [1943]). Several sister jurisdictions have also recognized such a remedy (see e.g. Cahaly v Benistar Prop. Exch. Trust {**60 Misc 3d at 1041}Co., Inc., 68 Mass App Ct 668, 678-679, 864 NE2d 548, 558-559 [2007], affd 451 Mass 343, 885 NE2d 800 [2008] [affirming trial judge's assignment of cause of action to judgment creditor to satisfy judgment]; Renger Mem. Hosp. v State, 674 SW2d 828, 830 [Tex App 1984]).

This conclusion is further buttressed by CPLR 5227, which provides for a special proceeding for a determination of whether or not a prospective garnishee is indebted to the [*6]judgment debtor, and seeks to effectuate CPLR article 52 enforcement, which "should be liberally construed to help reach any property interest that CPLR 5201 has declared to be available" (Richard C. Reilly, Practice Commentaries, McKinney's Cons Laws of NY, CPLR C5227:1). A CPLR 5227 proceeding will

"be akin to a direct action by the judgment debtor against the garnishee, but with the judgment creditor standing in the judgment debtor's position and prosecuting the judgment debtor's claim. If the proceeding adjudicates that the garnishee does owe a debt to the judgment debtor, the court will render a judgment to that effect in the special proceeding and further direct that the garnishee pay the debt—for a 'debt' is what the cause of action now becomes under the adjudication—to the judgment creditor. Or the court may simply render a judgment in favor of the judgment creditor directly against the garnishee" (Richard C. Reilly, Practice Commentaries, McKinney's Cons Laws of NY, CPLR C5201:2; see also C5227:1).

Rather than objecting to the availability of assignment as a remedy, defendant argues, under various theories, that the cause of action cannot be assigned because the issue has already been decided, or that the claim cannot be assigned because it will eventually fail.

Specifically, defendant argues that collateral estoppel precludes this court from compelling the assignment of any prospective malpractice cause of action because the bankruptcy court already ruled against assignment (defendant's mem of law at 16 et seq.). Indeed, the determination of a bankruptcy court, even if not final, binds this court provided that the parties had a "full and fair opportunity to litigate" the point (Aryeh v Altman, 36 AD3d 492, 493 [1st Dept 2007]).

"A determination whether the first action or proceeding genuinely provided a full and fair opportunity requires consideration of the realities of{**60 Misc 3d at 1042} the [prior] litigation, including the context and other circumstances which . . . may have had the practical effect of discouraging or deterring a party from fully litigating the determination which is now asserted against him" (Hickerson v City of New York, 146 F3d 99, 109 [2d Cir 1998]).

Doubts should be resolved against imposing preclusion to ensure that the party to be bound can be considered to have had a full and fair opportunity to litigate (Buechel v Bain, 97 NY2d 295, 305 [2001]).

However, defendant's citation is selective and incomplete; the transcript of the hearing on the underlying bankruptcy court motion reveals that the bankruptcy court determined only that the malpractice cause of action was abandoned to defendant, and therefore no longer of the bankruptcy estate and unassignable by the bankruptcy court. Most importantly, however, that motion practice and hearing occurred in early 2016, over one year before the bankruptcy court's subsequent determination that defendant had materially misrepresented the existence and value of the malpractice cause of action. The bankruptcy court explicitly noted that defendant did not amend his schedules until March 24, 2016—one year after the petition date and the same day that his chapter 7 trustee abandoned the malpractice claim to defendant—and that he continued to misrepresent the claim's potential value (and even its existence) as late as trial (In re Placeres, 578 BR at 522). Indeed, the bankruptcy court's ultimate decision to deny discharge of defendant's debt was premised largely upon defendant's persistent misrepresentations. Thus, it cannot be said that plaintiff had a "full and fair opportunity" to litigate the issue of whether the legal malpractice cause of action is assignable.

Defendant also argues that the cause of action is unassignable because it is subject to several affirmative defenses. First, though acknowledging that judicial estoppel "has never been raised as a defense in a New York State court where there was an assignment of a legal malpractice claim to a former litigation adversary," defendant nevertheless argues that plaintiff could never succeed on any malpractice claim because any such claim would be barred by [*7]judicial estoppel (citing Molina v Faust Goetz Schenker & Blee, LLP, 230 F Supp 3d 279, 287 [SD NY 2017]). In other words, defendant argues that plaintiff, as a prospective assignee of defendant's legal malpractice case against defendant's former attorneys, would be required to{**60 Misc 3d at 1043} make arguments irreconcilable with those made by plaintiff in prosecuting the underlying action. Defendant also argues that any claim is barred by the statute of limitations, as measured from March 2, 2012, the date that the jury returned an unfavorable verdict (defendant's mem of law at 18 et seq., citing CPLR 214 [6]).

Defendant does not cite any case law for the proposition that a prospective judgment creditor and assignee must demonstrate that a claim is not only ripe for litigation, but viable and, if defendant's argument is taken to its logical conclusion, legally infallible. Ultimately, the court need not address these arguments because the only issue before the court is the prospective cause of action's assignability, not its vitality. The former does not depend upon the latter, particularly where any actual defendants—that is, defendant's former attorneys—have not had any opportunity to either assert, or elaborate upon, any affirmative defenses. Any defenses, if they are indeed available or appropriate, can be asserted and addressed in that proceeding.^[FN6]

Based on the foregoing, it is hereby ordered that plaintiff's motion is granted to the limited extent that any and all rights to any prospective cause of action arising from the professional negligence and/or legal malpractice of defendant's attorneys in the scope of their representation in this action is hereby immediately assigned to plaintiff; and it is further ordered that the remainder of plaintiff's motion is severed, adjourned, and respectfully referred to the Honorable Debra Samuels.