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Shandell, Blitz, Blitz & Brookson, L.L.P. v Schiff 2007 NY Slip Op 33509(U) October 23, 2007 Supreme Court, New York County Docket Number: 0600739/2007 Judge: Shirley W. Kornreich Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication.

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SCANNED ON 1012912007

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SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY

How. SHIRLEY WERNER KORNREICH

PART

vs

SCHIFF, SANDRA RUTH
Sequence Number : 001 CONSOLlDATlONlJOlNT TRIAL

AOTION DATE
AOTlON SEQ. NO.

E/Z/o7

'

I

hOTlON CAL. NO.

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Index No.: 600739/07
Plaintiff,
-against-

DECISION and ORDER

SANDRA RUTH SCHIFF, ESQ.,
Defendant.
--r_____C___lr____"__-r________1-___"__--___-_____-------_----_-_-__

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KORNREICH, SHIRLEY WERNER, J.:
T j breach of contract action between attorneys arises out of defendant Sandra Ruth h,

Schiff, Esq.'s ("Schiff ') alleged refusal to pay plaintiff Shandtll, Blitz, Blitz & Bookson, LLP
C`SBBB") participation and referral fees. Schiff now moves, pursuant to CPLR 4 602(a), to
consolidate the above captioned action ("theSBBB Action'? with Chet W. Kern, Esq., v.

Shandell, Blitz, Blitz & Bookson, U P ,Richard E. Shandell, Esq.,Arthur Blitz, Esq.. Bert A.
Blitz, Esq., Shoshana T. Bookson, Esq., Mitchell Ashley, Esq.. Helene Shandell, Marilyn Blitz,
Ronnie BZitz and Saul Stromer (Index No. 600483/07)("the Kern Action"). SBBB opposes and

cross-moves for summary judgment pursuant to CPLR 9 3212.
I.
Background

A.

I'he Kern Action

On or about April 30,1997, Chet W. Kern, Esq. ("Kem'3 and Richard E. Shandell, Esq.
("Shandell") executed an agreement ("`theAgreement") to resolve various claims Shandell had

against Katz, Katz & Erasmow ("Katz"), a dissolved law fr in which Shandell was a former im
partner. The Agreement called for Kern to pay Shmdell$325,000 88 follows: $25,000up-front
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and the balance of $3OO,OOO in six equal installments of $50,000 fiorn April 30,1998 through

April 30,2003 (the "Payment Term"). During the Payment Term, the agreement also stated that

Kern would give Shandcll a right of first refusal on all of the cases he elected to refer to outside
counsel. In return Kern would receive onc-lbird of my fees earned by Shandell on the rsferrad
cases,

On or about October 1, 1997, an EQuity Partnership Agreement (the "Partnership
Agreement") was executed detailing thhe terms under which Kern became a partner of SBBB. Pursuant to the Partnershp Agreement, Kern's capital contribution to SBBB was a list of

approxhately 146 cases (the "Referral List*')that he had been working on. The Referral List
was divided into three sections: one entitled "Re-Note In-Suit Cases and Cases not Yet in Suit";
a second entitled "Referred Out Cases"; and a third entitled "Note of Issue Filed.*' Following the

Partnership Agreement, Ktm and his fellow partners amended the original agreement Kern made

with Shandell in April 1997 (the "Amended Agreement"). The Amended Agreement called for

m fees earned by Kern in connection with 10 specifically identified case& from the Referral List y
to be directly applied to the $325,000 Kern had agreed to pay Shandcll. Kern would then receive
any excess fees that remained after the $325,000was paid,

On or about November 21,2001, Kern withdrew from SBBB and enter& into a
separation agreement (the "Separation Agreement") with its remaining partners. Paragraph 2 of
the Separation Agreement called for Kern to receive 1 1% of the net attorneys' fees received by

SBBB in connection with the "Referred Out Cases" outlined in the Referral List. The Separation
Agreement also contained a payout formula based upon Kern's equity in the firm. For all non
medical malpractice cases, Ram was to receive $3,000 and 113 of the net attorney' fees recover&
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per case. For medical malpractice cases, Kern was to receive 30% of the attorneys' fees on tho

first $250,000,25% on the next $250,000,20%on the next $500,000,15% on the next $250,000
and 10% on any amount over $1,250,000.

I August 2005, Wuolfalk v. NYCHA, one of the IO cases specifically identified from the n
Referral List from which fees would be applied against the remaining $300,000 Kern owed
Shandell, resolved in SBBB's favor for $4,800,000. Kern alleges that since he had already paid
Off

the entire $325,000he owed Shandeli, he was ontitlcd to hi6 share of the excess fees earned

which was approximately $500,000. SBBB disagreed and did not pay Kern any fms arising out of Woolfalk. Since payment was not made, Kern demanded that the disputed $500,000be held

i escrow pending a resolution of thc fee dispute. n
Kern also alleges that SBBB did not comply with either paragraph 2 or the payout
formula outlined i the Separation Agreement and therefore he is owed additional attorneys' fees n

from services rendered in connection with cases handled by SBBB fiom the Referral List.
8.
The SBBB Action

SBBB and Schiff allegedly mtered into an agreement where SBBB would refer Schiff

csrtain clients for further legal services i return for a participation fee, which was a percentage n
of the net attorneys' fees earned, upon disposition of each referred matter- The SBBB Action
alleges that Schiff breached her agreement with SBBB by providing legal services for multiple
cases it referred her and then failing to forward the required participation fM.

Schiff avers that she was referred cases by SBBB only when Kern was a partner. She
states that over the past four years she paid participation fees to SBBB from 10 cases SBBB sent

her fiom the Referral List. Schiff further avers that SBBB did not pay Kern for any of these
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cases. As a result, Kern wrote Schiff requesting that she place any fiuther fees she owed SBBB

from cases sent to her off the Referral List I escrow pending resolution of his fee dispute. Schiff n
states she placed the disputed fees i escrow and advised Shoshana Bookson, Esq. ("Bookson"), n

a partner at SBBB, of her actions. According to Schiff, once Bookson learned that the disputed

fees had been placed in escrow, she demanded that Schiff turn them over to her immediately.

Schiff refused, stating that she "was a stakeholder of the sum, which in fact is the center of the
dispute between the parties in [the Kern Action]" and that since she had two parties claiming

entitlement to the same funds, she could not "blindly" follow Bookson's demand.

II.

Conclusions o L f m A.

S c h t f s Motion for Consolidation/Joint Trial

CPLR 9 602(a) provides that where two actions involve a Gommon question of law or

fact, and are pending before a court, the court "may order a joint trial of any or all the matters in
issue [or] may order the actions consolidated[.]" Once the movant demonstrates commonality of law or fact, the opponent must show prejudice to a substantial right. See Berman v. Greenwood
Village Community Dev., Inc., 156 A.D.2d 326,327 (Znd Dept 1989). The mere desire for
separate adjudication will not suffice. Id.

Here, Schiff has demonstrated that both actions contain common questions of law and
fact. The Kern action revolves around Kern's allegation that SBBB did not pay him referral faes

pursuant to various agreements he executed with Shandell and SBBB before, during and after his
partnership with SBBB. The SBBB action centers on fees Schiff earned from cases referred to

her off of the Refertal List, and then placed in escrow. SBBB and Kern both claim entitlement to
those fees. Therefore, both actions concern B dispute over legal fees from cases arising from

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Kern's Referral List that SBBB claim it either is owed (the SBBB Action) or dots not owe (the

Kern Action). Accordingly, since both actions clearly involve common questions of law and fact
and SBBB has not demonatrated any prejudice that will result, both actions should be jointly
tried.

B.

SBBB 's Motion for Summary Jullgment

A party moving for summary judgment must make a prima facie showing of entitlement

to judgement as a matter of law by tendering sufficient evidence to demonstrate the absence of
any material issues of fact. Zuckerman v. City o f N Y., 49 N.Y.2d 557,562 (1980). Once movant

has made the requisite showing, the burden shifts to the nonmoving party to produce evidentiary
proof in admissible form sufficient to establish the existence of a triable issue of material fact.
Giutida v. Citibank COT., 100 N.Y.2d 72,81(2003).
Here, SBBB has not met its burden. It argues that since Schiff admitted to the allegations

made in the complaint, namely that she accepted cases SBBB referred her, resolved them, and failed to fully remit all o f the payments allegedly due, summary judgment is wananted.

However, Schiff claims that all of the cmes referred to her came from the Referral. List and that,
therefore, there is a dispute as to whether K m is entitled to a portion of the funds she placed in
escrow. At tlus stage, no discovery appears to have taken place. The partics have not submitted

the alleged agreement between Schiff and SBBB. As a result, the court cannot assess the

allegations made by either party relating to their alleged relationship. There is no way to know at
this point whether or not Schiff s failure to forward SBBB the funds she placed in csmow
violated her referral arrangement or whether K r is entitled to a portion of the fees. Second, it en

is unclear how much money Schiff is holding in escrow and what cases t h money actually h

relates to. These, and many other issues of fact remain at this stage in the proceeding. As a
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result, SBBB's motion f i r summary judgment is denied. See Exec. Aviation Servs. v. Flightways
q f h n g I s h d hac., 15 A.D.3d 61 1 (2"dD q t 2005) (summary judgment k breach of contract

action was premature where substantial discovery remained outstanding). Accordingly, it is
ORDEIiED that Sandra Ruth Schiff Esq.'s motion is granted and the above captioned
action (Indux No. 600739/07) shall be jointly tried in this court with Chef W. Kern, Esq., v.

Shandell, Blitz, Blitz & Bookson, LLP, Richard E, Shandd, Esq., Arthur Blitz, Esq., B d A.
Blitz, Esq., Shoshana T. Bookson, Esg.,Mitchell Ashley, Esq., Helene Shandell, Marilyn Blitz,
Ronnie Biitz and Saul Simmer (Index No. 600483/07) discovery for these actions shall be jointly

conducted and the caption on these cases shall read

Index No.: 600483107

Plaintiff,
-against-

SHANDELL, BLXTZ, BLITZ & BOOKSON, L.L.P., R I C W E. SHANDELL, ESQ., ARTHUR BLITZ., ESQ BERT A. BLITZ, ESQ., SHOSHANA T,BOOKSON, ESQ., HELENE SHANDELL, MARILYN BLJTZ, RONNJE BLITZ
Defendants.

SHANDELL, BLITZ, BLITZ & BOOKSON, L.L.P.,
Plaintiff,

Index No.: 600739/07

-againstSANDRA RUTH SCHIFF, ESQ.,

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and it is hrther
ORDERED that Shandell, Blitz, Blitz & Bookson, LLP's motion for summary judgment
is denied; and it is further

ORDERED that the parties to both actions shall appear before the court for a discovery
scheduling conference at 9:30a.m. on November 29,2007 at 111 Centre Street, Room 1227,

New York, N.Y. 10013; and it is hrthcr ORDERED that the Clerk shall notify the parties i both actions of the date for the n
discovery scheduling conference.

ENTER

DATE: October 23,2007 New York, N Y



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