DISCHIAVI, GARY M. v. CALLI, JR., WILLIAM S. ( 2013 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
958
CA 13-00374
PRESENT: SMITH, J.P., FAHEY, PERADOTTO, AND LINDLEY, JJ.
GARY M. DISCHIAVI AND LINDA DISCHIAVI,
PLAINTIFFS-RESPONDENTS-APPELLANTS,
V MEMORANDUM AND ORDER
WILLIAM S. CALLI, JR., AS ADMINISTRATOR
CTA OF THE ESTATE OF WILLIAM S. CALLI,
ROBERT CALLI, HERBERT CULLY, CALLI, CALLI
AND CULLY, ANDREW S. KOWALCZYK, JOSEPH
STEPHEN DEERY, JR., THOMAS S. SOJA AND
CALLI, KOWALCZYK, TOLLES, DEERY AND SOJA,
DEFENDANTS-APPELLANTS-RESPONDENTS,
ET AL., DEFENDANTS.
KERNAN AND KERNAN, P.C., UTICA (LEIGHTON R. BURNS OF COUNSEL), FOR
DEFENDANT-APPELLANT-RESPONDENT WILLIAM S. CALLI, JR., AS ADMINISTRATOR
CTA OF THE ESTATE OF WILLIAM S. CALLI.
SMITH, SOVIK, KENDRICK & SUGNET, P.C., SYRACUSE (DAVID R. DUFLO OF
COUNSEL), FOR DEFENDANTS-APPELLANTS-RESPONDENTS ANDREW S. KOWALCZYK,
JOSEPH STEPHEN DEERY, JR. AND CALLI, KOWALCZYK, TOLLES, DEERY AND
SOJA.
HISCOCK & BARCLAY, LLP, SYRACUSE (ROBERT A. BARRER OF COUNSEL), FOR
DEFENDANTS-APPELLANTS-RESPONDENTS HERBERT CULLY AND CALLI, CALLI AND
CULLY.
GETNICK LIVINGSTON ATKINSON & PRIORE, LLP, UTICA (MICHAEL E. GETNICK
OF COUNSEL), FOR DEFENDANT-APPELLANT-RESPONDENT THOMAS S. SOJA.
GEORGE F. ANEY, HERKIMER, FOR DEFENDANT-APPELLANT-RESPONDENT ROBERT
CALLI.
LUIBRAND LAW FIRM, PLLC, LATHAM (KEVIN A. LUIBRAND OF COUNSEL), FOR
PLAINTIFFS-RESPONDENTS-APPELLANTS.
Appeals and cross appeal from an order of the Supreme Court,
Oneida County (James P. McClusky, J.), entered May 21, 2012. The
order, inter alia, dismissed plaintiffs’ legal malpractice causes of
action insofar as they are premised on the failure to commence a
personal injury action and dismissed plaintiffs’ legal malpractice
causes of action against defendants Herbert Cully and Calli, Calli and
Cully insofar as they are premised on the failure of those defendants
to commence a medical malpractice action.
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CA 13-00374
It is hereby ORDERED that the order so appealed from is
unanimously modified on the law by granting those parts of the motions
of defendants-appellants-respondents with respect to the third cause
of action in its entirety and those parts of the motions of all
defendants-appellants-respondents except Robert Calli with respect to
the claim for punitive damages against them, and as modified the order
is affirmed without costs.
Memorandum: Plaintiffs commenced this action seeking damages
for, inter alia, breach of contract, legal malpractice and fraud,
alleging, among other things, that defendants failed to commence
timely legal actions to recover damages arising from injuries
sustained by Gary M. Dischiavi (plaintiff). Plaintiffs allege in
their complaint that plaintiff was injured as the result of an
accident that occurred while he was on duty as a City of Utica police
officer in 1991, and that he was further injured as a result of his
ensuing medical treatment. Although plaintiffs retained defendant law
firm of Calli, Kowalczyk, Tolles, Deery and Soja (CKTDS) to represent
them with respect to possible claims arising from those injuries, no
action was ever instituted. Plaintiffs further allege that defendants
purported to have plaintiff examined by an expert physician but had a
lawyer examine him instead, purported to have other expert physicians
review plaintiff’s medical records but had a veterinarian perform that
review, misrepresented that they had commenced a personal injury
action on plaintiffs’ behalf, and created a fake settlement agreement
for that “action.” This case was previously before us on appeal, and
we determined, inter alia, that Supreme Court erred in granting the
motions and cross motion of various defendants for summary judgment
dismissing the complaint in its entirety against them (Dischiavi v
Calli [appeal No. 2], 68 AD3d 1691, 1692-1694).
Upon remittal and the completion of discovery, various defendants
again moved for summary judgment dismissing the complaint, cross
claims and/or counterclaims against them. The court dismissed the
complaint insofar as asserted against certain defendants and, as
relevant on appeal, the remaining defendants, i.e., defendants-
appellants-respondents (hereafter, defendants), now appeal and
plaintiffs cross-appeal from all or parts of an order that, inter
alia, denied plaintiffs’ cross motion for partial summary judgment and
granted defendants’ motions in part. Specifically, the court granted
those parts of the motions seeking summary judgment dismissing the
first and second causes of action insofar as they are premised on
defendants’ failure to commence a personal injury action. The court
also granted that part of the motion of defendant law firm Calli,
Calli and Cully and defendant Herbert Cully (collectively, CCC
defendants) for summary judgment dismissing the first and second
causes of action against them insofar as they are premised on their
failure to commence a medical malpractice action, thereby resulting in
the dismissal of those causes of action in their entirety against the
CCC defendants.
Defendants Andrew S. Kowalczyk, Joseph Stephen Deery, Jr., and
CKTDS (collectively, CKTDS defendants), along with defendant William
S. Calli, Jr. (Calli, Jr.), as administrator CTA of the estate of
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CA 13-00374
former defendant William S. Calli, Sr., contend that the court erred
in denying their motions insofar as they concern the underlying
medical malpractice claim. Specifically, the CKTDS defendants and
Calli, Jr., contend that the underlying medical malpractice claim
lacks merit, and thus that plaintiffs could not recover damages based
on the failure of those defendants to commence a timely action based
on that claim. We conclude, however, that the court properly denied
the motions to that extent inasmuch as the CKTDS defendants and Calli,
Jr. failed to meet their initial burden of establishing that
plaintiffs’ medical malpractice claim lacks merit (see generally
Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853; Welch v State
of New York, 105 AD3d 1450, 1451). In any event, plaintiffs raised a
triable issue of fact (see generally Zuckerman v City of New York, 49
NY2d 557, 562).
In addition, the CKTDS defendants and defendant Thomas S. Soja
contend that they may not be held liable under a theory of partnership
by estoppel because CKTDS was dissolved prior to any alleged legal
malpractice. Even assuming, arguendo, that those defendants met their
initial burden in that respect, we further conclude that the court
properly determined that plaintiffs raised a triable issue of fact
with respect to that issue (see generally id.).
To the extent that defendants sought summary judgment dismissing
the first and second causes of action on the ground that the
applicable three-year statute of limitations had expired prior to the
commencement of this action (see CPLR 214 [6]; see generally Zorn v
Gilbert, 8 NY3d 933, 933-934), we conclude that they met their initial
burden on their respective motions. We further conclude, however,
that plaintiffs raised a triable issue of fact whether the doctrine of
continuous representation tolled the statute of limitations (see
generally Shumsky v Eisenstein, 96 NY2d 164, 167-168). The court
therefore properly determined that defendants were not entitled to the
relief sought based on the statute of limitations.
We agree with all defendants that the court erred in denying
those parts of their motions seeking summary judgment dismissing the
third cause of action, for fraud, against them. Thus, we modify the
order accordingly. “The elements of a cause of action for fraud
require a material misrepresentation of a fact, knowledge of its
falsity, an intent to induce reliance, justifiable reliance by the
plaintiff[s] and damages” (Eurycleia Partners, LP v Seward & Kissel,
LLP, 12 NY3d 553, 559; see Ross v Louise Wise Servs., Inc., 8 NY3d
478, 488; Lama Holding Co. v Smith Barney, 88 NY2d 413, 421). “Where,
as here, a fraud [cause of action] is asserted in connection with
charges of professional malpractice, it is sustainable only to the
extent that it is premised upon one or more affirmative, intentional
misrepresentations . . . which have caused additional damages,
separate and distinct from those generated by the alleged malpractice”
(White of Lake George v Bell, 251 AD2d 777, 778, lv dismissed 92 NY2d
947; see Tasseff v Nussbaumer & Clarke, 298 AD2d 877, 878; see
generally Wells Fargo Bank, N.A. v Zahran, 100 AD3d 1549, 1550, lv
denied 20 NY3d 861). We agree with defendants that they met their
initial burden on their motions by establishing that plaintiffs did
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CA 13-00374
not sustain any additional damages as a result of the alleged fraud,
and plaintiffs failed to raise a triable issue of fact (see generally
Alvarez v Prospect Hosp., 68 NY2d 320, 324-325). Contrary to
plaintiffs’ contention, this Court’s prior order denying those parts
of the respective defendants’ initial motions and cross motions
“pursuant to CPLR 3211 (a) (7) to dismiss the complaint, which w[ere]
addressed to the sufficiency of the pleadings, did not establish the
law of the case for the purpose of their subsequent motion[s] pursuant
to CPLR 3212 for summary judgment, which [were] addressed to the
sufficiency of the evidence” (Thompson v Lamprecht Transp., 39 AD3d
846, 847).
We further conclude that the court erred in denying those parts
of the motions seeking summary judgment dismissing plaintiffs’ claim
for punitive damages except insofar as that claim is asserted against
defendant Robert Calli. Plaintiffs seek to hold all other defendants
liable for punitive damages under a theory of vicarious liability. It
is well settled that, in order for a partnership or its members “to be
held vicariously liable for punitive damages arising from the conduct
of its [partners], it must have ‘authorized, participated in,
consented to or ratified the conduct giving rise to such damages, or
deliberately retained the unfit [partner]’ such that it is complicit
in that conduct” (Melfi v Mount Sinai Hosp., 64 AD3d 26, 42, quoting
Loughry v Lincoln First Bank, 67 NY2d 369, 378; see 1 Mott St., Inc. v
Con Edison, 33 AD3d 531, 532). Here, the defendants other than Robert
Calli established that only Robert Calli may have engaged in conduct
giving rise to punitive damages and that they did not engage in any
acts that would render them complicit in such conduct. In response,
plaintiffs failed to raise a triable issue of fact whether defendants,
other than Robert Calli, engaged in conduct giving rise to punitive
damages or “ ‘authorized, participated in, consented to or ratified
the conduct giving rise to such damages, or deliberately retained the
unfit [partner]’ ” (Melfi, 64 AD3d at 42). Consequently, the court
erred in denying those parts of the motions seeking to dismiss the
claim for punitive damages except insofar as asserted against Robert
Calli. We therefore further modify the order accordingly.
On their cross appeal, plaintiffs contend that the court erred in
dismissing the first and second causes of action insofar as they are
premised upon defendants’ failure to commence a personal injury
action. The court granted defendants’ motions for summary judgment
dismissing those causes of action to that extent based on its
determination that the statute of limitations therefor had expired
before plaintiffs retained any of the defendants. Plaintiffs now
contend that the statute of limitations for those causes of action was
extended several times by amendments to General Municipal Law § 205-e
(2), which resulted in the revival of plaintiffs’ causes of action
until a time after they first retained CKTDS. That contention is not
properly before us because it is raised for the first time on appeal,
and “[a]n issue may not be raised for the first time on appeal . . .
where it ‘could have been obviated or cured by factual showings or
legal countersteps’ in the trial court” (Oram v Capone, 206 AD2d 839,
840, quoting Telaro v Telaro, 25 NY2d 433, 439, rearg denied 26 NY2d
751). The revival statute on which plaintiffs rely applies to causes
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of action that “would have been actionable on or after January [1,
1987] had this section been effective” (§ 205-e [2]), and we conclude
that defendants could have made a factual showing that plaintiffs’
first and second causes of action insofar as they are premised upon
defendants’ failure to commence a personal injury action were not
actionable because they were precluded by plaintiff’s receipt of
benefits pursuant to General Municipal Law § 207-c.
We have considered the further contentions of the parties and
conclude that they are without merit.
Entered: November 8, 2013 Frances E. Cafarell
Clerk of the Court