State of New York
Supreme Court : County of Monroe

- against -

Index No. 98/7582

ANDREW V. SIRACUSE, J.

This is a legal malpractice case, and the defendants, a major law firm in the Rochester area and two of its attorneys, have moved for summary judgment. The plaintiff, Dr. Allan Robbins, was in an ophthalmology practice with Dr. James Aquavella, and the two physicians decided to merge their practices. They did so with separate counsel, defendant Paul Pineo representing Aquavella. Soon after this merger, the doctors decided to sell their practice to Equivision, a company which managed ophthalmology practices. The parties sought no representation at this time, but themselves negotiated an agreement memorialized in a letter of intent, dated August 9, 1995, which both Aquavella and Robbins signed. It was only then that Harris Beach became involved.

There were serious problems with the proposed contract, not least of which was a violation of the state law prohibiting non-medical corporations from scheduling or managing medical practices. This obstacle was overcome by contracting with Urban Oncology Services, P.C., a professional corporation run by Dr. Colkitt, the principal of Equivision. Urban Oncology contracted with Equivision to manage the practice, and Drs. Robbins and Aquavella were hired as employees of Urban Oncology.

It is clear beyond any cavil that involvement with Equivision was a major blunder. Dr. Colkitt committed the whole gamut of regulatory violations, including moving his assets offshore to avoid a $50 million suit by Federal agencies, false billing, and more. Dr. Robbins was seriously harmed by his involvement with Dr. Colkitt's companies, and his financial position suffered an additional setback when Dr. Aquavella eventually bought out the management contract and ended up being in full control of the firm he and Dr. Robbins had been working for. The question for the court, however, is whether any of this was the result of malpractice on the part of defendant Harris Beach or its individual attorneys. The court holds that there is no proof in admissible form that Dr. Robbins was damaged by any malpractice on the part of the defendants, and his complaint must therefore be dismissed.

As a preliminary matter, defendants claim that Dr. Robbins has no standing because they represented the partnership, not Dr. Robbins individually. The court does not agree; though the agreement was with the partnership, when the defendants undertook to represent Dr. Robbins in his signing of an individual employment agreement with the Colkitt corporations they assumed a duty to represent him fairly. What Dr. Robbins has not made out is how he was damaged by that representation.

A major part of Dr. Robbins's claim is that Harris Beach had a conflict of interest in representing him with respect to the Equivision deal. As noted above, Mr. Pineo had represented Dr. Aquavella separately in the negotiation of the partnership agreement, and he was a partner with Dr. Aquavella in some business deals--in fact, Dr. Robbins now rents space in a building owned by the two. These very facts, though, refute the plaintiff's claim, because it is only an undisclosed conflict of interest that gives rise to liability. Dr. Robbins obviously had to know at the time Harris Beach was hired by the partnership that Mr. Pineo had represented Dr. Aquavella in a context adverse to him, namely the original merger, in which he was separately represented.

Moreover, the relationship between Dr. Robbins and Equivision and Urban Oncology did not differ in any way from that between Dr. Aquavella and those entities, aside from the duration of the employment contracts. Indeed, while Dr. Robbins claims that he was exposed to liability for fee splitting, failure to pay sales tax, and the possible loss of his license because Harris Beach did not investigate the deal properly, it was Dr. Aquavella who was fined for certain violations in connection with the new practice. Dr. Robbins was not. Dr. Robbins claims that he left the practice because he would have lost his license had he stayed, but this claim is pure speculation. No document in the large record substantiates it. The court can see no harm that flowed to the plaintiff that could be construed as resulting from any conflict of interest that would have operated in Dr. Aquavella's favor.

It is certainly clear that Dr. Aquavella eventually acted in a way at least technically adverse to Dr. Robbins, and was able to salvage a better position from the wreck of Dr. Colkitt's enterprises by buying out the management contracts. This took place, however, at a later date, long after the instant contracts were signed and after Dr. Robbins had effectively terminated his relationship with Harris Beach by engaging other counsel, Geiger and Rothenberg, to secure his interests in the dispute with Equivision and Urban.

Even if there were proof of some undisclosed conflict, however, Dr. Robbins's complaint would still fail, because he has not shown any damages that could be causally connected with the alleged malpractice. His counsel has reiterated both in the papers and at oral argument that Harris Beach negotiated an "illegal contract," without significantly amplifying this claim. He claims, for example, that there was no provision that he be insured by a malpractice carrier licensed to do business in New York, though this is a provision that can surely be implied from the clause obligating Equivision to obtain malpractice insurance; and in any event Dr. Robbins can show no losses from any inadequacy of insurance coverage.

The plaintiff make claims that seem quite unrelated to the duties of the law firm: the replacement of the office computer system with one purportedly less efficient, for example. Dr. Robbins holds Harris Beach responsible for the many flaws in EquiMed's (Equivision's successor) performance which were either negligent or deliberate. He also complains that Harris Beach never reviewed the service agreement between Urban Oncology and EquiMed, which affected his income--though this was altered after the agreement was entered into, was between two parties not represented by Harris Beach, and was the basis for a substantial award in Dr. Robbins's favor when it was finally litigated. He argues that Harris Beach failed to investigate Dr. Colkitt and his corporations, though there is no evidence that either doctor requested this, and it was clear that when the two approached Harris Beach that they had already resolved to sell the practice to Colkitt's firms. At times, in fact, Dr. Robbins appears to blame Harris Beach for not telling him that he should not contract with Dr. Colkitt. This is not their responsibility; there were no evident legal issues that forbade this business decision at the time the two contracted and Harris Beach was not contracted to do an analysis of Colkitt's or his firms' honesty or management competence.

Another of Dr. Robbins's complaints is that EquiMed sold the practice's laser to St. Mary's Hospital, and that Mr. Pineo advised Robbins that this was within EquiMed's powers. Nonetheless, with his new representation, Dr. Robbins was able to block this move.

Dr. Robbins also claims that the employment contract failed to provide that a breach on the employer's side would justify vacation of the covenant not to compete. However, Dr. Robbins, with his new counsel, sent EquiMed and PRG (yet another of Dr. Colkitt's corporate shells) a Notice to Cure based on alleged breaches of contract that was intended to and did clear the way for a voiding of the non-competition clause. For tactical reasons, with counsel's advice, Dr. Robbins bought out the provision for $275,000 after Justice Stander referred the matter to arbitration. The costs of litigation were another $275,000. These are substantial expenses, but a clause such as Dr. Robbins contends should have been in the contract would not have guaranteed that the dispute would be resolved in any less costly way. The mere fact that litigation was necessary to void a clause such as this one is not the result of malpractice. Plaintiff has not shown that there was any error in the drafting that resulted in the litigation, nor any wording that would have avoided it, nor any damages that resulted from Mr. Pineo's initial disinclination to pursue the matter.

Further, the fact that Dr. Robbins paid $275,000 for settling this issue cannot be laid at Harris Beach's doorstep; Dr. Robbins may well have prevailed at trial. Harris Beach cannot be held responsible for this tactical decision.

A second lawsuit resulted in an arbitration award of $400,000 to Dr. Robbins for the Colkitt corporations' failure to live up to the terms of the very contract which he now claims was incompetently negotiated by Harris Beach. This sum was not collectible because Dr. Colkitt had been released from the suit--he was not made personally liable--and because the few assets of the shell corporations were well hidden. Geiger & Robbins compromised the award for $75,000.

This suggests that the agreement was not as poorly drafted as Robbins suggests. The sad fact that this judgment was not collectible is not Harris Beach's fault. There was no reason for Dr. Colkitt to sign in his individual capacity, as Dr. Robbins wants. The physicians did sign the agreement, because they were employees in their individual capacities; but they worked for Urban Oncology, a corporation.

Dr. Robbins also claims that Harris Beach's alleged malpractice resulted in his obligation to pay fees to Dr. Aquavella for use of the practice's laser, which amount to $152,100 so far. This is without merit. The sale of the laser to the Colkitt corporations in the first place was an indispensable part of the entire transaction, and its eventual purchase by Dr. Aquavella postdates the period of Harris Beach's representation. Dr. Robbins's two final points are even less persuasive. He seeks damages under a defamation theory, claiming that his reputation suffered after a campaign against him by PRG, Urban Oncology, and Dr. Aquavella. This is even more clearly not Harris Beach's fault. Finally, his claim for lost wages is impossibly speculative as a product of alleged malpractice.

In short, the plaintiff has not shown how he was materially damaged by any actions on Harris Beach's part. His career has admittedly suffered substantially, and the court is sympathetic to his position; but his misfortunes were not caused by the lawyers he and Dr. Aquavella chose. Those lawyers negotiated a contract that sustained a $400,000 verdict in his favor and could conceivably have supported a voiding of the non competition clause. In view of these facts it is clear to the court that he has failed to make out a prima facie case of legal malpractice. The complaint is dismissed, with costs, and Mr. Wolford is directed to prepare an order accordingly.

DATED: Rochester, New York

January 10, 2001

Andrew V. Siracuse, J.S.C.

On February 1, 2002, the Appellate Division reversed this decision in part, reinstating the claim for legal malpractice because the defendant had not disproved negligence.

Design © 1997 Michael Steinberg. No copyright subsists in the decision texts, which are government documents.

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