Published on:

CPLR 3211(a)(1) and (4)

Order, Supreme Court, entered September 3, 2010, which denied defendant’s motion to dismiss the complaint or, in the alternative, for summary judgment dismissing the complaint, unanimously modified, on the law, to grant partial summary judgment to defendant to the extent of dismissing the complaint save for plaintiff’s cause of action for quantum meruit, and otherwise affirmed, without costs.

In 2002, plaintiff, a newly admitted attorney, placed an advertisement in the New York Law Journal seeking a mentorship opportunity with an experienced solo practitioner in order to gain trial experience. Defendant responded to the advertisement and the parties met. Subsequently, plaintiff saw an advertisement in the Journal placed by a Bronx solo practitioner looking to refer cases out to other experienced attorneys. Defendant met with the Bronx practitioner and agreed to act as trial counsel for the Bronx attorney’s clients with a 40% referral fee payable to the Bronx attorney. It is further undisputed that plaintiff referred at least two cases to defendant’s law office, and that he conducted some depositions for cases on which defendant was working, and drafted some bills of particulars-even though plaintiff had not litigated any personal injury cases prior to meeting defendant. Plaintiff received some payments from defendant which defendant characterized as mostly for per diem work. Eventually, however, according to plaintiff, the payments ceased.

In August 2006, plaintiff filed a summons and complaint alleging 10 causes of action as follows: (1) breach of an oral partnership agreement; (2) breach of an oral agreement; (3) fraud; (4) an accounting; (5) unjust enrichment; (6) fraud in the inducement; (7) breach of fiduciary duty; (8) estoppel; (9) contract implied in the law based on past performance; and (10) quantum merit.
Plaintiff alleged, inter alia, that defendant had proposed that they should work together as partners in a personal injury law practice with each having an equal share of the profits gained from the cases they worked on jointly. Plaintiff further alleged that between 2002 and 2005 he worked on more than 100 personal injury cases for defendant, expended approximately 500 hours in connection with these cases, and contributed $5,000 in capital to the partnership.

In September 2006, defendant served a pre-answer motion to dismiss pursuant to CPLR 3211(a)(1) and (4). Defendant argued that no sustainable cause of action exists because no partnership agreement, oral or written, existed between him and plaintiff; that defendant did not intend to enter into a partnership; and “there is no evidence whether in the form of sharing losses, tax returns, written agreement or actions demonstrating that the parties held themselves out as a partnership.”

Plaintiff opposed, and on November 30, 2006, the motion court heard oral argument. The court declined to convert the motion into one for summary judgment, and found that the factual allegations of plaintiff sufficiently stated a cognizable cause of action. In May and June 2008, discovery was conducted, and the parties were deposed.

In June 2009, defendant again moved to dismiss the action pursuant to CPLR 3211(a)(1) and (4). Alternatively, defendant requested summary judgment dismissing the complaint. While defendant raised arguments similar to those in his pre-answer motion seeking dismissal of the complaint, this time, on the basis of plaintiff’s deposition transcript, he argued that [96 A.D.3d 468]plaintiff’s proof failed to raise a triable issue as to the existence of an oral partnership.

On September 3, 2010, the court denied defendant’s motion for summary judgment upon finding that the motion was precluded by the law of the case doctrine. The court found that the argument was identical to the prior motion, and defendant had a full and fair opportunity to argue the identical motion to dismiss. A bike accident was not involved.

Defendant appealed the case which is now under consideration. As a threshold matter, we note that the law of the case doctrine does not apply when a motion to dismiss is followed by a summary judgment motion, as is the case here. Defendant’s first motion was to dismiss under CPLR 3211; the court declined to convert that pre-answer motion to a summary judgment motion. Thus, the law of the case doctrine was inapplicable to defendant’s subsequent summary judgment motion pursuant to CPLR 3212.

Defendant’s statute of frauds argument, however, has no merit. The statute of frauds is inapplicable to an agreement to create a joint venture or partnership because an oral agreement for an indefinite period creates a partnership or joint venture at will. Additionally, the parties’ alleged agreement to share in the profits of certain cases, when reasonably interpreted, could have been performed within one year.

Nevertheless, for the reasons set forth below, we grant partial summary judgment to defendant dismissing plaintiff’s claims as to the existence of an oral partnership. We agree with defendant that there are no triable issues of fact as to the existence of such a partnership with plaintiff, or even of a partnership limited to a select group of clients.

Initially, we note that plaintiff has engendered confusion with his allegations: While he invokes New York partnership law in the summons and complaint, and refers to an alleged “partnership/joint venture” agreement throughout papers submitted in this action, he also argues that the parties had a partnership only to the extent of an agreement to equally share profits arising out of the legal representation of a select group of clients.

On plaintiff’s own admission therefore, there was no oral partnership agreement with defendant such that would establish a bona fide law practice partnership. As to plaintiff’s allegation that he and defendant had an oral agreement to equally share the fees from cases plaintiff brought in, the record reflects that there was a 50% fee split in only one of two referrals (a slip and fall action involving plaintiff’s aunt) acknowledged by defendant. In the other, plaintiff received one-third of the fee.

More significantly, we find that no triable issues of fact exist as to the traditional indicia of a valid oral partnership agreement. It is well established that in determining whether parties forged such an oral partnership agreement, a court will consider the intent of the parties, whether the parties shared joint control in the management of the business, whether the parties shared profits and losses and the existence of capital contribution. It is axiomatic that the essential elements of a partnership must include an agreement between the principals to share losses as well as profits.
Here, plaintiff does not allege joint control or any agreement to share in any of the losses either of the law practice in general, or appertaining just to the cases plaintiff brought in.

In the absence of a valid contract, plaintiff, however, does set forth a prima facie case for recovery in quantum meruit. Thus, plaintiff may recover based on quantum meruit for work he performed without compensation on behalf of defendant.

To provide excellent and of high quality services to clients lawyers in partnership must have a good and atmospheric relationship among themselves. At Stephen Bilkis Associates, our Bronx County Personal Injury Attorneys and Bronx County Injury Lawyers works hand in hand to provide high quality of legal services you deserve.

We always give due diligence in prosecuting and defending cases and personal issues are put on the least priority. That’s how we work at Stephen Bilkis. Should you have any inquiry, you may call us at our toll free number or visit our office near you.

Contact Information