Guzik v. Lendit Conference, LLC et al
Filing
204
OPINION AND ORDER: re: 190 LETTER MOTION for Leave to File Surreply to Reply of Dara S. Albright re Albright's Cross Motion for Summary Judgment (Dkt 187) addressed to Judge J. Paul Oetken from R. Joseph Decker dated December 18, 2017 filed by Samuel S. Guzik, 175 MOTION for Summary Judgment filed by Dara S. Albright, 160 MOTION for Summary Judgment filed by Samuel S. Guzik. For the foregoing reasons, Guzik's motion for summary judgment is GRANTED IN PART. Specifically, Albrig ht's counterclaims for malpractice, tortious interference with contract, and breach of confidentiality are dismissed. In all other respects, both parties' motions for summary judgment are DENIED. The claims that remain for trial are (1) Guz ik's claim for quantum meruit and (2) Albright's counterclaims for (a) tortious interference with business relations, (b) defamation, and (c) intentional infliction of emotional distress. The parties shall appear for a conference on October 5, 2018, at 3:00 p.m. for the purpose of scheduling the trial and setting deadlines for pretrial filings. The conference will be held in Courtroom 706 of the Thurgood Marshall Courthouse, 40 Foley Square, New York, New York. The Clerk of Court is di rected to close the motions at Docket Numbers 160, 175, and 190. SO ORDERED., ( Status Conference set for 10/5/2018 at 03:00 PM in Courtroom 706, 40 Centre Street, New York, NY 10007 before Judge J. Paul Oetken.) (Signed by Judge J. Paul Oetken on 9/14/2018) (ama)
Case 1:16-cv-02257-JPO-DCF Document 204 Filed 09/14/18 Page 1 of 24
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SAMUEL S. GUZIK, d/b/a GUZIK &
ASSOCIATES,
Plaintiff,
16-CV-2257 (JPO)
OPINION AND ORDER
-vDARA S. ALBRIGHT,
Defendant.
J. PAUL OETKEN, District Judge:
This is a dispute between a lawyer and his former client. Plaintiff Samuel S. Guzik seeks
to recover in quantum meruit for legal services rendered prior to his resignation. Defendant Dara
Albright filed counterclaims against Guzik for (1) legal malpractice, (2) tortious interference
with contract, (3) tortious interference with business relations, (4) breach of confidentiality, (5)
defamation, and (6) intentional infliction of emotional distress. Both parties move for summary
judgment on Guzik’s quantum meruit claim and Albright’s first four counterclaims. For the
reasons that follow, Guzik’s motion for summary judgment is granted as to Albright’s
counterclaims for malpractice, tortious interference with contract, and breach of confidentiality.
Both motions are denied as to all other claims and counterclaims.
I.
Background
Familiarity with the factual background of this dispute is presumed, based on this Court’s
two prior Orders and Opinions. See Guzik v. Albright, No. 16 Civ. 2257, 2017 WL 3601244, at
*1−2 (S.D.N.Y. Aug. 21, 2017) (“Guzik II”); Guzik v. Albright, No. 16 Civ. 2257, 2016 WL
6952347, at *1 (S.D.N.Y. Nov. 28, 2016) (“Guzik I”). The following additional facts are drawn
from the parties’ Rule 56.1 statements. They are not subject to genuine dispute unless otherwise
noted.
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Albright is co-founder of LendIt Conference LLC (“LendIt”) and another company called
NowStreet LLC. (Dkt. No. 177 (“Albright Decl.”) ¶ 6.) Albright sold her interest in NowStreet,
which owns a one-third interest in LendIt, to Goodworld Creations LLC d/b/a Crowdnetic
(“Crowdnetic”). In 2014, she sought rescission of the sale of NowStreet to Crowdnetic.
(Albright Decl. ¶ 6.) Guzik represented Albright in her suit against Crowdnetic and in her
pursuit of related claims against LendIt. (Dkt. No. 179 (“Defs. CSOF”) ¶¶ 3, 9.)
Guzik maintains that Albright orally agreed to compensate him on a contingency basis
for representing her in these disputes with LendIt and Crowdnetic. (Dkt. No. 164 ¶ 12.)
Albright disputes the existence of a formal contingency agreement but acknowledges that she
intended to pay Guzik based on “his relative contribution to the final outcome” of the
Crowdnetic litigation. (Defs. CSOF ¶ 12.) In December 2015, however, Guzik resigned as
Albright’s counsel. (Defs. CSOF ¶ 13.) He claims that he had a “fundamental disagreement”
with Albright over how to litigate the case and whether to pursue settlement with LendIt. 1 (Defs.
CSOF ¶¶ 28, 31; Dkt. No. 183 (“Pls. CSOF”) ¶ 22.) Soon after Guzik’s resignation, Albright
reached a settlement with LendIt. (Defs. CSOF ¶ 15.) By February 2016, Albright had resolved
her disputes with Crowdnetic as well. (Defs. CSOF ¶ 18.)
After Guzik’s resignation, Albright hired new counsel, and in February 2016, Guzik sent
a letter to Albright’s new lawyer stating that Guzik intended to “seek redress from the LendIt
parties . . . through all lawful means.” (Defs. CSOF ¶ 35.) Guzik also emailed Albright’s
counsel, stating that Guzik “intend[ed] to hold the LendIt associates fully accountable . . . for all
1
Notably, Guzik had resigned as Albright’s counsel once before in August 2014,
during the Crowdnetic litigation. (Defs. CSOF ¶ 37.)
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harm proximately caused by their misconduct” and to “empty their pockets.” (Defs. CSOF ¶ 36.)
LendIt then added an indemnification clause to its settlement with Albright. (Defs. CSOF ¶ 40.)
On March 8, 2016, LendIt agreed to employ Albright as an at-will consultant with a
substantial salary. (Defs. CSOF ¶ 44.) LendIt canceled this employment agreement, however,
on March 10, 2016, after LendIt realized that Guzik had filed a charging lien against Albright.
(Defs. CSOF ¶ 45; Dkt. No. 162-23 at 230:17–231:12.) (Albright maintains that cancellation of
the contract was motivated by Guzik’s emails, sent on March 8, notifying LendIt of his intention
to name it as a relief defendant in his collection action. (Defs. CSOF ¶ 45; Albright Decl., Ex.
U.)) On March 22, LendIt provided Albright with a new consulting agreement, which added a
provision for the escrow of Albright’s consulting fees until resolution of unspecified “legal
matters.” (Defs. CSOF ¶ 46.) Because of this escrow provision, Albright decided to reject the
amended consulting agreement. (Defs. CSOF. ¶ 48.)
After his resignation in December 2015, Guzik began to seek compensation from
Albright for his legal services, and he sent Albright an invoice in March 2016 for all services
rendered from May 2014 to December 2015. (Defs. CSOF ¶¶ 22−23.) On March 28, 2016,
Guzik filed this lawsuit against Albright for his legal fees. (Defs. CSOF ¶ 24.) Albright,
proceeding pro se, filed counterclaims against Guzik for (1) legal malpractice, (2) tortious
interference with contract, (3) tortious interference with business relations, (4) breach of
confidentiality, (5) defamation, and (6) intentional infliction of emotional distress. (Dkt. No. 41
¶¶ 81–107 of counterclaims.)
Guzik now moves for summary judgment on his claim for quantum meruit and on four of
Albright’s counterclaims: tortious interference with contract, tortious interference with business
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relations, legal malpractice, and breach of confidentiality. (Dkt. No. 160.) Albright’s crossmotion seeks summary judgment on the same claim and counterclaims. (Dkt. No. 175.)
II.
Legal Standard
“Summary judgment is warranted when, after construing the evidence in the light most
favorable to the nonmoving party and drawing all reasonable inferences in its favor, there is no
genuine issue as to any material fact.” Sledge v. Kooi, 564 F.3d 105, 108 (2d Cir. 2009) (citing
Fed. R. Civ. P. 56(c)); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–52 (1986).
The Court may grant summary judgment only when the record discloses “no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a).
“The moving party bears the burden of disproving the existence of any genuine issue of
material fact.” Loccenitt v. City of New York, No. 10 Civ. 8319, 2012 WL 5278553, at *3
(S.D.N.Y. Oct. 22, 2012) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). “Once the
moving party has asserted facts showing that the non-movant’s claims cannot be sustained, the
opposing party must ‘set out specific facts showing a genuine issue for trial,’ and cannot ‘rely
merely on allegations or denials’ contained in the pleadings.” Toshiba Corp. v. Am. Media Int’l,
LLC, No. 12 Civ. 800, 2012 WL 3822759, at *4 (S.D.N.Y. Sept. 4, 2012) (quoting Fed. R. Civ.
P. 56(e)). “[A] party may not rely on mere speculation or conjecture as to the true nature of the
facts to overcome a motion for summary judgment.” Hicks v. Baines, 593 F.3d 159, 166 (2d Cir.
2010) (alteration in original) (quoting Fletcher v. Atex, Inc., 68 F.3d 1451, 1456 (2d Cir. 1995))
(internal quotation mark omitted). And although a document filed pro se is construed liberally to
raise the strongest argument it suggests, see McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir.
1999), “mere ‘conclusory statements, conjecture, or speculation by the party resisting the motion
will not defeat summary judgment,’” Cruz v. Midwood Ambulance & Oxygen Serv., Inc., 136 F.
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App’x 414, 415 (2d Cir. 2005) (quoting Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir.
1996)).
New York law governs the parties’ common law claims. See Fed. Ins. Co. v. Am. Home
Assurance Co., 639 F.3d 557, 566 (2d Cir. 2011) (explaining that it “is sufficient to establish
choice of law” if “the parties agree that New York law controls”).
III.
Discussion
A.
Plaintiff’s Quantum Meruit Claim
Guzik moves for summary judgment on his claim for quantum meruit. As this Court
previously explained, a quantum meruit claim has four elements under New York law: “(1) the
performance of services in good faith, (2) the acceptance of the services by the person to whom
they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of
the services.” Guzik II, 2017 WL 3601244, at *2 (quoting Mid-Hudson Catskill Rural Migrant
Ministry, Inc. v. Fine Host Corp., 418 F.3d 168, 175 (2d Cir. 2005)). An attorney who resigns
from representation, however, forfeits “any right to recover damages for services rendered on the
basis of quantum meruit” unless the resignation was for good cause. Allen v. Rivera, 509
N.Y.S.2d 48, 50 (App. Div. 2d Dep’t 1986); see also Stair v. Calhoun, 722 F. Supp. 2d 258, 267
(E.D.N.Y. 2010) (“[A]ttorneys who terminate their representation are still entitled to enforce
their charging liens, as long as the attorney does not withdraw without ‘good cause’ and is not
discharged for ‘good cause.’”). Because it is undisputed that Guzik resigned from representing
Albright, he must establish that he had good cause to withdraw.
Guzik argues that he had good cause to withdraw for two reasons: (1) Albright failed to
cooperate and rendered representation unreasonably difficult, and (2) Albright insisted on a
course of action with which Guzik fundamentally disagreed. (Dkt. No. 161 at 13−14). Both of
these reasons are based on the same underlying client conduct: Albright was eager to “settle [her]
5
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claim” and “wanted to move on.” (Albright Decl., Ex. D, at 119:25−120:1, 120:8–9.) Guzik
maintains that, following an unsuccessful settlement meeting with LendIt on December 16, 2015,
he advised Albright to “put pressure on LendIt” by propounding discovery and moving to
intervene in an arbitration between Crowdnetic and LendIt. (Dkt. No. 162 (“Guzik Decl.”)
¶¶ 40–41.) He claims that Albright refused to allow him to implement his proposed litigation
and settlement strategy and foreclosed his ability to propound discovery to LendIt or to request
permission to intervene in the LendIt-Crowdnetic arbitration. (Guzik Decl. ¶ 43.) Based on this
disagreement over strategy, Guzik resigned. (Guzik Decl. ¶ 45.)
Albright’s version of the events is substantially similar: She wanted to settle her dispute
with LendIt, while Guzik wanted to pursue a more aggressive strategy. Albright submits e-mails
from Guzik following the unsuccessful December 16 meeting to illustrate his more
confrontational approach:
If you want to throw in the towel today with LendIt, and hope that
Crowdnetic wants to settle, that is your decision. But I have done
all this work to weaken Crowdnetic, so that you - and not LendIt would get the benefit of my hard labor. I have no desire to go
forward working to advance the interests of Lendit, while they screw
you and me - and line their pockets. I am not wired that way. Never
will be. Would rather walk away from this trainwreck and chalk it
up to life experience.
(Albright Decl., Ex. H, at 5.) Guzik also told Albright that he intended “to get real nasty with
[LendIt]” and “inflict some pain” because “they need to see some consequences to their actions if you don’t agree you will need to find a new attorney. I cannot be undercut by my client after
all this - would rather just walk away.” (Albright Decl., Ex. H, at 4.)
Guzik has failed to meet his burden to demonstrate that, as a matter of law, Albright’s
conduct gave him good cause to resign. “Under New York law, good cause for withdrawal
exists where there are ‘irreconcilable differences . . . with respect to the proper course to be
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pursued in [the] litigation,’ where ‘the client flatly challenged [counsel’s] loyalty and
professional integrity,’ or where ‘the relationship between plaintiff[s] and [their] attorney ha[s]
deteriorated to the point where further representation [is] inappropriate.’” Karimian v. Time
Equities, Inc., No. 10 Civ. 3773, 2011 WL 1900092, at *4 (S.D.N.Y. May 11, 2011) (alterations
in original) (quoting Lake v. M.P.C. Trucking Inc., 718 N.Y.S.2d 903, 904 (App. Div. 3d Dep’t
2001)). However, withdrawal based on a client’s “unreasonably difficult” behavior is permitted
only in relatively extreme situations where, for example, the client hired “new or additional
counsel who interferes with the strategies of the original attorney” or subjected the attorney to
“insults, lying, foul language, accusations of unprofessional behavior, lack of cooperation, and
[a] failure to communicate.” Louima v. City of New York, No. 98 Civ. 5083, 2004 WL 2359943,
at *61 (E.D.N.Y. Oct. 5, 2004) (first quoting N.Y. Comp. Codes R. & Regs. tit. 22, § 1200; last
quoting Casper v. Lew Lieberbaum & Co., No. 97 Civ. 3016, 1999 WL 335334, at *2 (S.D.N.Y.
May 26, 1999)), aff’d sub nom. Roper-Simpson v. Scheck, 163 F. App’x 70 (2d Cir. 2006).
Critically, the relevant “good cause” standard “is a higher standard than the ‘satisfactory reason’
requirement of Local Civil Rule 1.4 and requires a determination of which side is in fact
responsible for the attorney-client conflict.” Diarama Trading Co. v. J. Walter Thompson
U.S.A., Inc., No. 01 Civ. 2950, 2005 WL 1963945, at *3 (S.D.N.Y. Aug. 15, 2005). 2
Here, a genuine factual dispute exists as to whether Guzik’s resignation was justified.
See Fischbarg v. Doucet, 883 N.Y.S.2d 25, 25 (App. Div. 1st Dep’t 2009). First, the record does
not establish that Albright “render[ed] the representation unreasonably difficult for the lawyer to
carry out employment effectively.” Karimian, 2011 WL 1900092, at *5 (quoting N.Y. Comp.
2
Local Civil Rule 1.4 governs when an attorney who has appeared as attorney of
record before this Court may be granted leave to withdraw.
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Codes R. & Regs. tit. 22, § 1200) (internal quotation marks omitted) (deferring decision whether
to confirm a charging lien in light of material issues of fact as to good cause). Although there is
evidence that Albright and Guzik disagreed over certain tactics, including whether to propound
third-party discovery or to intervene in the Crowdnetic-LendIt arbitration, it is not clear that
these two relatively minor strategic issues “rise to the . . . level of good cause required to
overcome an attorney’s responsibility to persist in a representation already begun.” Karimian,
2011 WL 1900092, at *5 (holding that it was “not clear” whether lawyer’s allegations that client
“sought to dictate the course of the litigation,” without much evidentiary support, and that client
“criticized him or was hostile” several times, were sufficient to establish good cause); see also
Borup v. Nat’l Airlines, Inc., 159 F. Supp. 808, 810 (S.D.N.Y. 1958) (“The mere fact that clients
refuse to accept a settlement recommended by the attorney is not ground for his withdrawal.”).
Moreover, a reasonable factfinder could conclude that Guzik’s threats to resign if Albright did
not follow his preferred course of action were unduly coercive, especially given that Guzik
resigned less than two weeks before a summary judgment motion was due. (See Dkt. No. 1621.) See also Brooks v. Lewin, 853 N.Y.S.2d 286, 287–88 (App. Div. 1st Dep’t 2008) (denying
charging lien because “demand by [attorneys] for a new engagement agreement while opposition
papers were due, coupled with the threat that [they] would stop working on the matter, was
coercive”). Finally, even assuming that the differences between Guzik and Albright were truly
irreconcilable in December 2015, a reasonable factfinder could conclude, on the basis of Guzik’s
emails—which include aggressive (and, at times, offensive) language (see Albright Decl., Ex. H,
at 6)—that Guzik was responsible for the deterioration of the attorney-client relationship.
Because genuine disputes of fact exist as to whether Albright rendered representation
unreasonably difficult and whether any irreconcilable differences were in fact attributable to
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Albright, both parties’ motions for summary judgment on Guzik’s quantum meruit claim are
denied. 3
B.
Defendant’s Tortious Interference Counterclaims
Albright asserts counterclaims for tortious interference with contract and for tortious
interference with business relations. (Dkt. No. 41 ¶¶ 86–97.) “Under New York law, the
elements of tortious interference with contract are (1) the existence of a valid contract between
the plaintiff and a third party; (2) the defendant’s knowledge of the contract; (3) the defendant’s
intentional procurement of the third party’s breach of the contract without justification; (4) actual
breach of the contract; and (5) damages resulting therefrom.” Restis v. Am. Coal. Against
Nuclear Iran, Inc., 53 F. Supp. 3d 705, 727 (S.D.N.Y. 2014).
In contrast, claims for tortious interference with business relations face “a higher burden
than . . . claim[s] of interference with an existing contract, as a plaintiff must show ‘more
culpable conduct on the part of the defendant.’” Hadami, S.A. v. Xerox Corp., 272 F. Supp. 3d
587, 602 (S.D.N.Y. 2017) (quoting NBT Bancorp Inc. v. Fleet/Norstar Fin. Grp., Inc., 87
N.Y.S.2d 614, 621 (1996)). A plaintiff suing for tortious interference with business relationship
must prove that: “(1) there is a business relationship between the plaintiff and a third party; (2)
the defendant, knowing of that relationship, intentionally interferes with it; (3) the defendant acts
with the sole purpose of harming the plaintiff, or, failing that level of malice, uses dishonest,
3
Guzik’s motion to file a surreply (Dkt. No. 190) is denied as moot. Guzik
requested leave to file a surreply on the basis that Albright argued, for the first time on reply, that
the parties had an “agreement” about fees. For the aforementioned reasons, neither party is
entitled to summary judgment, regardless of whether this agreement governed Albright and
Guzik’s relationship.
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unfair, or improper means; and (4) the relationship is injured.” Id. (quoting Goldhirsh Grp., Inc.
v. Alpert, 107 F.3d 105, 108–09 (2d Cir. 1997)). 4
Both parties seek summary judgment on Albright’s claims for tortious interference with
contract and tortious interference with business relations. Two distinct incidents provide the
factual predicates for both causes of action: Albright claims that (1) Guzik tortiously interfered
with her employment as a consultant for LendIt, and (2) Guzik tortiously interfered with her
LendIt settlement agreement. The Court addresses each incident in turn.
1.
Tortious Interference with Albright’s Employment as a Consultant
As a threshold matter, Guzik argues that Albright’s tortious interference with contract
claim fails as a matter of law because the consulting agreement was terminable at will. (Dkt. No.
161 at 22.) “However, New York law recognizes that the at will relationship entails certain
limited rights, including the right to maintain an action for tortious interference in certain limited
situations.” Finley v. Giacobbe, 79 F.3d 1285, 1295 (2d Cir. 1996) (internal citation omitted).
In particular, New York law recognizes a claim for tortious interference with an at-will contract
provided that the at-will employee “allege[s] that a third party used wrongful means to effect the
termination such as fraud, misrepresentation, or threats, that the means used violated a duty owed
by the defendant to the plaintiff, or that the defendant acted with malice.” Cohen v. Davis, 926
F. Supp. 399, 403 (S.D.N.Y. 1996).
In other words, Guzik is incorrect that Albright cannot as a matter of law bring a claim
for tortious interference with an at-will employment contract. But because such a claim is
subject to an extra element—in this case, a showing that Guzik either used wrongful means,
4
Courts use the terms “tortious interference with business relations” interchangeably with
“tortious interference with prospective economic advantage.” See, e.g., Hadami, 272 F. Supp. 3d
at 602.
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violated a duty to Albright, or acted with malice in effecting the termination of her at-will
agreement—the New York Court of Appeals has explained that it should be treated as a claim for
“interference with prospective contractual relations,” Guard-Life Corp. v. S. Parker Hardware
Mfg. Corp., 50 N.Y.2d 183, 192 (1980) (emphasis added), which is essentially synonymous with
tortious interference with business relations, see, e.g., Perros v. Cty. of Nassau, 238 F. Supp. 3d
395, 403 (E.D.N.Y. 2017).
Because Albright’s claim for tortious interference with her at-will contract is duplicative
of her claim for tortious interference with business relations, the former is dismissed.
The Court now turns to the question whether Guzik tortiously interfered with Albright’s
business relationship as a consultant for LendIt. Guzik puts forth three reasons why Albright’s
claim for tortious interference with her consulting relationship should be dismissed: (1) Albright
failed to demonstrate that Guzik had knowledge of the agreement; (2) Albright failed to establish
that Guzik acted with a wrongful purpose; and (3) Guzik’s actions did not cause injury to the
consulting agreement. Genuine disputes of material fact regarding all three elements preclude
summary judgment for either party.
First, the parties genuinely dispute whether Guzik knew of Albright’s imminent
employment as a LendIt consultant. “In a tortious interference action, a plaintiff is not required
to prove that the defendant had perfect or precise knowledge of the terms and conditions of the
contracts in issue. It is enough that the defendant who interfered have ‘[k]nowledge of the
existence of the contract’” or business relationship. Don King Prods., Inc. v. Douglas, 742 F.
Supp. 741, 775 (S.D.N.Y. 1990) (internal citation omitted) (quoting Am. Cyanamid Co. v.
Elizabeth Arden Sales Corp., 331 F. Supp. 597, 608 (S.D.N.Y. 1971)). Guzik maintains that he
had no knowledge of Albright’s consulting agreement: He avers that Albright never provided
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him with any information regarding this new employment relationship prior to the parties’ fee
arbitration in California in June 2016. (Guzik Decl. ¶ 54.)
Albright responds that Guzik was “well aware” of her “ongoing business relationship
with LendIt.” (Albright Decl. ¶ 32.) She relies on the following evidence to support this
contention: First, since February 2015, Guzik was aware of Albright’s previous involvement as a
co-founder of LendIt. (Albright Decl., Ex. J. at 304:5–18.) Second, Albright cites e-mails that
Guzik sent following his resignation, in which he references Albright’s prior “relationship with
LendIt” and her “personal goals regarding the outcome” of her dispute with LendIt. (Albright
Decl., Ex. X, at 3.) In February 2016, for example, Guzik wrote: “I sincerely hope that by April
2016 you are able to reclaim what is rightfully yours - being reunited with the company you have
founded - something you deserve.” (Albright Decl., Ex. X, at 5.) Based on these facts, a
reasonable factfinder could conclude that Guzik was aware of Albright’s business relationship
with LendIt when Albright and LendIt entered into the consulting contract in March 2016.
Second, a genuine factual dispute remains as to whether Guzik “act[ed] with the sole
purpose of harming the plaintiff, or, failing that level of malice, use[d] dishonest, unfair, or
improper means” to interfere Albright’s business relationship. Hadami, 272 F. Supp. 3d at 602.
The key factual question can be framed more precisely, as Albright cannot seriously contend that
Guzik acted with the sole purpose of harming her when he filed a charging lien and a lawsuit
against Albright to collect fees. Guzik was indisputably motivated, at least in part, by his own
economic interest. See RFP LLC v. SCVNGR, Inc., 788 F. Supp. 2d 191, 196 (S.D.N.Y. 2011)
(dismissing tortious interference claim where “the only plausible inference to be made . . . [was]
that the Counter–Defendants were motivated at least in part by their own economic interest”).
Therefore, the question is whether Guzik used dishonest, unfair, or improper means.
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Albright argues that Guzik used improper “litigation threats” to interfere with her
consulting agreement. (Dkt. No. 176 at 17.) For purposes of a tortious interference claim,
“‘[l]itigation or the threat of litigation’ is a wrongful means if (1) ‘the claimant has no belief in
the merit of the litigation’ or, (2) ‘having some belief in the merit of the suit, the claimant
nevertheless institutes or threatens to institute litigation in bad faith, intending only to harass the
third parties and not to bring his claim to definitive adjudication.’” RFP LLC, 788 F. Supp. 2d at
197 (brackets omitted) (quoting Universal City Studios, Inc. v. Nintendo Co., 797 F.2d 70, 75 (2d
Cir. 1986)). Here, Albright claims that Guzik threatened to name LendIt as a “relief defendant”
in his action to recover fees and to enforce his charging lien against Albright. (Albright Decl.,
Ex. U, at 4.) She attributes the termination of her consulting agreement, which had been
finalized a few days earlier, to Guzik’s emails to LendIt on those topics. (Dkt. No. 176 at 17–
18.)
Albright has not introduced any evidence demonstrating that Guzik disbelieves the merits
of his charging lien or lawsuit, but she has at least raised a genuine factual dispute as to whether
Guzik’s litigation threats were lodged in bad faith. Based on Guzik’s emails expressing his
vitriol for LendIt and his irritation with Albright (see Albright Decl., Ex. H.), 5 a reasonable
factfinder could conclude that Guzik’s litigation threats were motivated, at least in part, by a
desire to harass them or otherwise interfere with their settlement after his resignation. Therefore,
5
For example, Guzik referred to LendIt as “fraudsters” and “crooks in suits” who
were “screw[ing]” him and Albright and “lin[ing] their pockets.” (Albright Delc., Ex. H at 2, 3,
5.) As to Albright, Guzik told her he believed she was being “play[ed]” by LendIt, and that she
was “undercut[ting] and “disappoint[ing]” him. (Id. at 4, 5.) In essence, Guzik’s emails reflect a
sense that Albright betrayed him, from which a reasonable factfinder could infer a vindictive
motive underlying his subsequent actions.
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a factual dispute also exists as to whether Guzik’s litigation over his fees was instituted in good
faith.
Finally, a genuine dispute of fact exists as to whether Guzik’s threats of litigation caused
harm to Albright’s consulting relationship with LendIt. To prevail on a claim for tortious
interference, a plaintiff must establish causation by demonstrating “that she would have entered
into an economic relationship but for the defendant’s wrongful conduct.” A.V.E.L.A., Inc. v.
Estate of Marilyn Monroe, LLC, 241 F. Supp. 3d 461, 486 (S.D.N.Y. 2017) (quoting Tucker v.
Wyckoff Heights Med. Ctr., 52 F. Supp. 3d 583, 598 (S.D.N.Y. 2014)); see also Union Car
Advert. Co. v. Collier, 263 N.Y. 386, 401 (1934) (“A cause of action has also been recognized
where a party would have received a contract but for the malicious, fraudulent and deceitful acts
of a third party, such, for instance, as materially lying about him.”). 6
Here, Albright has adduced sufficient evidence of causation to survive summary
judgment. Albright signed the at-will consulting agreement with LendIt on March 8, 2016.
(Albright Decl., Ex. J, at 174:9–12.) LendIt canceled this employment agreement, however, on
March 10, 2016, after Guzik notified it of his lien against Albright and his intent to name LendIt
as a relief defendant. (Defs. CSOF ¶ 45; Dkt. No. 162-23 at 231:2–12.) In fact, LendIt’s
representative testified that there was a direct causal connection between notice of Guzik’s lien
and the termination of Albright’s contract. (Albright Decl., Ex. J at 230:17–232:13.) In light of
6
As courts in this circuit have previously noted, “[e]arlier cases hold that the
plaintiff must prove that it ‘would have received the contract’ but for the interference. Some
later cases, however, appear to have adopted the less stringent ‘reasonable certainty,’ or
‘reasonable expectation’ test.” Davidcraft Corp. v. Danu Int’l, Inc., No. 90 Civ. 6578, 1992 WL
162997, at *4 (S.D.N.Y. June 24, 1992) (internal citation omitted). “But for” causation does
appear to be the dominant standard, and it has been endorsed by the New York Court of Appeals
(albeit in a timeworn case). See Union Car Advert. Co., 263 N.Y. at 401. Nonetheless, because
the Court concludes that genuine factual disputes as to causation remain under either standard, it
need not decide between the two standards of causation at this juncture.
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this evidence, causation is a question for the factfinder. See Perry v. Int’l Transp. Workers’
Fed’n, 750 F. Supp. 1189, 1207 (S.D.N.Y. 1990).
Because genuine disputes of fact remain regarding three elements of Albright’s claim for
tortious interference with her consulting agreement, the parties’ cross-motions for summary
judgment are both denied.
2.
Tortious Interference with Albright’s Settlement Agreement
The analysis is similar for Albright’s claim for tortious interference with her LendIt
settlement agreement. Again, Guzik argues that Albright’s claim for tortious interference with
contract must fail given that the draft settlement agreement was never signed and therefore was
not a valid contract. (Dkt. No. 161 at 23.) That is correct, and this claim is dismissed insofar as
it purports to survive as a claim for tortious interference with contract.
However, it is well established that “the tortious interference prohibition extends to mere
negotiations,” based on “[t]he principle . . . that he who has a reasonable expectancy of a contract
has a property right which may not be invaded maliciously or unjustifiably.” Morse v. Swank,
Inc., 459 F. Supp. 660, 667 (S.D.N.Y. 1978) (second quoting Hardy v. Erickson, 36 N.Y.S.2d
823, 826 (Sup. Ct. 1942)) (collecting cases). Interference with negotiations is actionable,
however, only if it satisfies the elements of a claim for tortious interference with prospective
contractual relations. See Union Carbide Corp. v. Montell N.V., 944 F. Supp. 1119, 1141
(S.D.N.Y. 1996). Consequently, as with Albright’s claim with respect to the consulting
agreement, Albright’s claim regarding the settlement is legally viable if it is construed as a
tortious interference with business relations claim predicated on Guzik’s alleged tortious
interference with her prospective contractual relations.
To prevail on her claim for tortious interference with the settlement, Albright must
establish (1) she had a prospective contractual relationship with LendIt; (2) Guzik knowingly and
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intentionally interfered with that relationship; (3) Guzik interfered for the sole purpose of
harming Albright, or used dishonest, unfair, or improper means; and (4) the interference caused
injury to her contractual relationship. See Hadami, 272 F. Supp. 3d at 602. Because genuine
factual disputes exist, neither party is entitled to summary judgment on Albright’s settlementagreement claim.
First, Guzik argues that there is no evidence he engaged in wrongful conduct, pointing to
the fact that his only communications with LendIt during the relevant time were (1) his notice of
lien on February 27, 2016, and (2) his February 2016 emails to Albright and her counsel. (Dkt.
No. 182 at 14.) Guzik contends that “bare threats of litigation, without more, . . . are not . . .
sufficient to establish a claim for tortious interference . . . especially where . . . there was
substantial justification for these claims – to collect fees.” (Dkt. No. 182 at 15.) But as
explained above, a genuine factual dispute exists as to whether Guzik’s notice of lien and
litigation threats against LendIt were made in bad faith, even if they were justified in part by his
fee dispute with Albright.
Second, Guzik challenges causation based on the fact that he “threatened (only) Albright
and her attorney with litigation against LendIt.” (Dkt. No 182 at 15 (emphasis omitted).)
Genuine factual disputes exist regarding causation as well. A reasonable factfinder could
conclude that that Guzik’s notice of lien, which was communicated to LendIt directly, was a butfor cause of LendIt’s addition of an objectionable indemnification clause to the settlement
agreement. Moreover, a reasonable factfinder could conclude that Guzik’s litigation threats,
even if communicated to Albright only, were a but-for and proximate cause of the harm to
Albright’s settlement based on the “probable and foreseeable” eventuality that she would
communicate those threats to LendIt during settlement discussions. Cf. FLB, LLC v. 5Linx, 821
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F. Supp. 2d 548, 561 (W.D.N.Y. 2011) (“A defendant intentionally procures a breach when he
‘knows of a valid . . . contract’ and ‘commits an intentional act whose probable and foreseeable
outcome is that one party will breach the contract, causing the other party damage.’” (alteration
in original) (quoting Leventhal v. Franzus Co., Inc., No. 88 Civ. 3547, 1988 WL 132868 at *7
(S.D.N.Y. Dec. 6, 1988))), aff’d sub nom. FLB, LLC v. Cellco P’ship, 536 F. App’x 132 (2d Cir.
2013).
In light of the factual disputes regarding whether Guzik acted in good faith and whether
Guzik caused any injury, both parties’ motions for summary judgment are denied.
C.
Defendant’s Malpractice Counterclaim
“There are three elements to a claim of legal malpractice in New York: ‘(1) the
negligence of the attorney; (2) that the negligence was the proximate cause of the loss sustained;
and (3) proof of actual damages.’” Carvel v. Ross, No. 09 Civ. 0722, 2011 WL 856283, at *13
(S.D.N.Y. Feb. 16, 2011) (quoting Baker v. Dorfman, 239 F.3d 415, 420 (2d Cir. 2000)), report
and recommendation adopted, No. 09 Civ. 722, 2011 WL 867568 (S.D.N.Y. Mar. 11, 2011). “In
other words, a plaintiff in a legal malpractice action must demonstrate that the attorney failed to
exercise that degree of skill commonly exercised by an ordinary member of the legal community,
and that but for the failure to exercise that requisite degree of skill the result sought by the
plaintiff would or could have been achieved.” Zeitlin v. Greenberg, Margolis, Ziegler, Schwartz,
Dratch, Fishman, Franzblau & Falkin, P.A., 619 N.Y.S.2d 289, 290 (App. Div. 2d Dep’t 1994).
Albright bases her malpractice counterclaim on three predicate acts of negligence: (1) Guzik
forwarded an unredacted copy of the complaint in Goodworldcreations, L.L.C. v. Albright, 14
Civ. 3848, to a reporter; (2) Guzik was “belligerent” during the December 16, 2015, settlement
meeting between LendIt and Albright; and (3) Guzik breached his duty of confidentiality to
Albright. (Dkt. No. 176 at 22–24.) The Court addresses each theory in turn.
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1.
The Goodworldcreations Complaint
Guzik is entitled to summary judgment on the question whether he committed
malpractice by forwarding the Goodworldcreations complaint to the media. First, it is not clear
that he breached any duty to Albright when he sent this document to the media: Although the
complaint was eventually sealed at LendIt’s request to protect its confidential financial
information (see Goodworldcreations, L.L.C., 14 Civ. 3848, Dkt. Nos. 8 & 9), at the time Guzik
forwarded the document, it was publicly accessible. Second, Albright has failed to introduce any
evidence that Guzik’s action injured her. Albright’s theory is that Guzik “caused an initial strain
in Albright’s business relationship with LendIt” by publicizing the Goodworldcreations
complaint. (Dkt. No. 176 at 22.) But “[m]ere speculation of a loss resulting from an attorney’s
alleged omissions is insufficient to sustain a prima facie case sounding in legal malpractice.”
Luniewski v. Zeitlin, 591 N.Y.S.2d 524, 526 (App. Div. 2d Dep’t 1992). The speculative nature
of Albright’s claim renders it insufficient as a matter of law to establish causation. See PhillipsSmith Specialty Retail Grp. II, L.P. v. Parker Chapin Flattau & Klimpl, LLP, 696 N.Y.S.2d 150,
151 (App. Div. 1st Dep’t 1999).
2.
Guzik’s Belligerent Conduct
Albright claims that Guzik’s threat to “inflict some pain” on LendIt at the December 16,
2015, meeting was professionally negligent. (Albright Decl., Ex. H, at 4.)
To survive summary judgment, a plaintiff in a malpractice case “cannot rest on [her]
‘allegations of what [she] views as deficiencies in defendant’s conduct as his attorney,’ but must
offer ‘evidence to establish the standard of professional care and skill that [defendant] allegedly
failed to meet.” Hatfield v. Herz, 109 F. Supp. 2d 174, 179 (S.D.N.Y. 2000) (last alteration in
original) (quoting Thaler & Thaler v. Gupta, 617 N.Y.S.2d 605, 606 (App. Div. 3d Dep’t 1994)).
“The courts generally require malpractice plaintiffs to ‘proffer expert opinion evidence on the
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duty of care to meet their burden of proof in opposition to a properly supported summary
judgment motion.’” Joseph DelGreco & Co. v. DLA Piper L.L.P. (U.S.), 899 F. Supp. 2d 268,
278 (S.D.N.Y. 2012) (quoting Hatfield, 109 F. Supp. 2d at 179) (collecting cases), aff’d sub
nom. In re Joseph DelGreco & Co., 535 F. App’x 31 (2d Cir. 2013). This requirement applies
even if a plaintiff proceeds pro se, see, e.g., Wolfson v. Bruno, 844 F. Supp. 2d 348, 356
(S.D.N.Y. 2011), and is generally excused only in “the unusual case, in which the facts are ‘so
egregious’ as to make expert evidence unnecessary,” Joseph DelGreco & Co., 899 F. Supp. 2d at
278 (quoting Nobile v. Schwartz, 265 F. Supp. 2d 282, 290 (S.D.N.Y. 2003)). Examples of such
egregious conduct include “failure to follow direct orders from a court” and the “disregard or
ignorance of . . . a clearly defined and firmly established rule.” Joseph DelGreco & Co., 899 F.
Supp. 2d at 278 (alteration in original) (second quoting Northrop v. Thorsen, 848 N.Y.S.2d 304,
308 (2007)).
Albright has failed to introduce any expert evidence on Guzik’s duty of care, nor does she
allege any conduct that is so egregious as to make expert testimony unnecessary. Her allegations
are based solely on Guzik’s threat to inflict “pain” on LendIt, a litigation adversary. A
reasonable factfinder could not conclude that “pain” in this context meant to anything other than
Guzik’s intent to vigorously, perhaps aggressively, pursue Albright’s claims against LendIt in the
course of litigation. (See Albright Decl., Ex. H, at 4.) Guzik is entitled to summary judgment on
the question whether his allegedly belligerent conduct breached his professional duty of care to
his client.
3.
Breach of Confidentiality
Finally, Albright alleges that Guzik breached his duty of confidentiality to her. Albright
identifies the following alleged breaches of confidentiality: (1) disclosure of the
Goodworldcreations complaint, (2) Guzik’s threat to release confidential information from the
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parties’ fee arbitration in California, (3) Guzik’s disclosure of the California arbitration award to
the Court, (4) Guzik’s breach of a confidentiality agreement with LendIt regarding settlement
discussions on December 16, 2015, and (5) Guzik’s disclosure of confidential information in his
Answer to Albright’s counterclaims.
At the outset, the Court notes that, besides Guzik’s disclosures relating to the fee
arbitration, none of these alleged breaches appears in Albright’s counterclaim. (See Dkt. No. 41
¶¶ 76–78.) As such, those allegations are not properly before the Court, see, e.g., Batts v.
Richards, 4 F. Supp. 2d 96, 97 n.1 (D. Conn. 1998)), and Albright has explicitly disclaimed any
desire to amend her counterclaim (see Dkt. No. 187 at 17). Nonetheless, in light of Albright’s
pro se status, the Court addresses each of her specific allegations.
First, as explained above, Guzik did not breach any duty to Albright, or cause her any
non-speculative damage, by disclosing the Goodworldcreations complaint.
Second, Guzik’s alleged (and apparently unconsummated) threat to disclose confidential
information obtained during the fee arbitration did not amount to an actual breach of any duty, as
no actual disclosure is alleged. Moreover, Albright has identified neither the specific
information Guzik wrongfully threatened to disclose nor the harm it caused her.
Third, Guzik did not breach any duty to Albright when he furnished a copy of the
arbitration award to the Court. At the initial pretrial conference on January 24, 2017, Guzik
provided a copy of the arbitration award to the Court at the Court’s request. (See Dkt. No. 55.)
Rule 1.6(b)(6) of the New York Rules of Professional Conduct permits an attorney to disclose
confidential information “to comply with . . . [a] court order.” N.Y. Comp. Codes R. & Regs. tit.
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22, § 1200.0. 7 In addition, the arbitration award does not qualify as “confidential information”
for purposes of Guzik’s duty of confidentiality because that information was not “gained during
or relating to the representation of” Albright. Id. (Rule 1.6(a)). Therefore, Guzik’s disclosure to
the Court was permissible.
Fourth, Guzik’s disclosures in his summary judgment brief regarding the December 16,
2015, LendIt settlement discussions did not violate a duty to Albright. Under Rule 1.6(b)(5) of
the New York Rules of Professional Conduct, “[a] lawyer may reveal or use confidential
information to the extent that the lawyer reasonably believes necessary: . . . (i) to defend the
lawyer or the lawyer’s employees and associates against an accusation of wrongful conduct; or
(ii) to establish or collect a fee.” N.Y. Comp. Codes R. & Regs. tit. 22, § 1200.0. Here, the
settlement discussions, and Guzik’s comportment during those discussions, are directly relevant
to Albright’s malpractice claim, which is based in part on allegations of belligerent conduct at
7
The parties dispute whether New York’s or California’s Rules of Professional
Conduct govern Guzik’s duty of confidentiality. (See, e.g., Dkt. No. 182 at 21–22; Dkt. No. 176
at 24–25.) Because federal jurisdiction in this case is based on diversity, the Court applies New
York’s conflict of laws rules. New York Rule of Professional Conduct 8.5(b) governs choice of
law regarding attorney discipline. See N.Y. Comp. Codes R. & Regs. tit. 22, § 1200.0. Rule
8.5(b)(1) provides:
For conduct in connection with a proceeding in a court before which
a lawyer has been admitted to practice (either generally or for
purposes of that proceeding), the rules to be applied shall be the rules
of the jurisdiction in which the court sits, unless the rules of the court
provide otherwise.
Id. Here, the underlying proceeding, Goodworldcreations, L.L.C. v. Albright, 14 Civ. 3848,
occurred in New York. Therefore, the Court applies New York’s Rules of Professional Conduct
to Albright’s malpractice claim.
Moreover, even if California’s rules governed, the Court concludes that those rules would
also permit disclosure of confidential client information pursuant to the authority of a federal
court. See CA ST RPC Rule 3-100, cmt. 13 (explaining that other exceptions to confidentiality
may be recognized under California law, in addition to the explicit exception for preventing a
client from undertaking a criminal act).
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that meeting. Moreover, the December 16, 2015, settlement discussions are likely relevant to
determining whether Guzik is entitled to collect legal fees, as Guzik contends he resigned for
good cause based on a disagreement with his client over litigation and settlement strategy. Guzik
therefore did not breach any duty to Albright by referencing these discussions in his brief.
Fifth, and finally, Guzik did not breach any duty to Albright by disclosing confidential
information about a medical issue in his Answer to her counterclaim. Of Albright’s five
allegations, this is the most troubling: One should certainly be able to trust her attorney to
maintain her medical condition in confidence. Nonetheless, even though a lawyer’s duty of
confidentiality is of paramount importance and perpetual duration, see People v. Twedt, 794
N.Y.S.2d 823, 828 (Sup. Ct. 2005), it is “not absolute or impermeable,” Schaefer v. Gen. Elec.
Co., No. 07 Civ. 858, 2008 WL 649189, at *7 (D. Conn. Jan. 22, 2008). As explained above, a
lawyer may disclose confidential information to the extent that information is reasonably
necessary to his ability to establish or collect a fee. N.Y. Comp. Codes R. & Regs. tit. 22,
§ 1200.0 (Rule 1.6). In her motion to dismiss, Albright put at issue Guzik’s reasons for resigning
after the December 16, 2015, settlement meeting with LendIt. (See Dkt. No. 26 at 12.) And the
medical issue is central to her explanation as to why she suddenly became more amenable to
settlement. (See, e.g., Dkt. No. 176 at 11.) Although perhaps it would have been prudent for
Guzik to use less specific language when discussing this issue in his Answer, it was not
unreasonable for Guzik to believe this disclosure was necessary to pursue his claim for legal fees
and his defense against Albright’s counterclaims. See In re Koeppel, 939 N.Y.S.2d 741, 2011
WL 4375059, *12 (Sur. Ct. 2011) (explaining that Rule 1.6(b)(5) justified former attorney’s
disclosures about client’s finances where client put ability to pay at issue), aff’d, 944 N.Y.S.2d
48 (App. Div. 1st Dep’t 2012). In fact, Guzik’s quantum meruit claim is based on the theory that
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Albright and LendIt conspired against Guzik before the settlement meeting to reach a settlement
that excluded his fee and thereby maximized Albright’s proceeds. (Dkt. No. 182 at 9.) Whether
Guzik’s narrative of conspiratorial duplicity is more credible than Albright’s story is for the
factfinder to decide. But Guzik’s discussion of this issue in his Answer was not unreasonable
under Rule 1.6(b)(5) as a matter of law.
In sum, Albright has not adduced sufficient evidence that Guzik breached a professional
duty to her. Therefore, Guzik’s motion for summary judgment is granted on Albright’s
malpractice counterclaim.
D.
Defendant’s Breach-of-Confidentiality Counterclaim
Albright’s breach of confidentiality counterclaim is based on her allegation that Guzik
violated the confidentiality agreement governing the California fee arbitration proceedings
between the parties. This claim differs from Albright’s claim for breach of the professional duty
of confidentiality because it sounds in breach of contract. See Health All. Network, Inc. v. Cont’l
Cas. Co., 245 F.R.D. 121, 125–26 (S.D.N.Y. 2007), aff’d, 294 F. App’x 680 (2d Cir. 2008).
However, the only alleged breach she has identified is Guzik’s disclosure of the arbitration
award to the Court at the Court’s request. As discussed above, this disclosure is not actionable
under the rules of professional conduct. Moreover, equity prohibits the imposition of liability on
Guzik for his compliance with a directive from this Court. Because Albright has failed to adduce
any other evidence of breach, Guzik is entitled to summary judgment on Albright’s breach of
confidentiality counterclaim.
E.
Albright’s Motion for Sanctions
Albright requests sanctions against Guzik for making “outrageously and flagrantly” false
allegations against her. (Dkt. No. 176 at 26.) Albright previously moved for sanctions against
Guzik on the same basis (see Dkt. No. 119), and that motion was denied by Magistrate Judge
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Freeman (see Dkt. No. 158). Albright did not object to Judge Freeman’s ruling. For the reasons
given by Judge Freeman, Albright’s motion for sanctions is denied.
IV.
Conclusion
For the foregoing reasons, Guzik’s motion for summary judgment is GRANTED IN
PART. Specifically, Albright’s counterclaims for malpractice, tortious interference with
contract, and breach of confidentiality are dismissed. In all other respects, both parties’ motions
for summary judgment are DENIED.
The claims that remain for trial are (1) Guzik’s claim for quantum meruit and (2)
Albright’s counterclaims for (a) tortious interference with business relations, (b) defamation, and
(c) intentional infliction of emotional distress.
The parties shall appear for a conference on October 5, 2018, at 3:00 p.m. for the purpose
of scheduling the trial and setting deadlines for pretrial filings. The conference will be held in
Courtroom 706 of the Thurgood Marshall Courthouse, 40 Foley Square, New York, New York.
The Clerk of Court is directed to close the motions at Docket Numbers 160, 175, and
190.
SO ORDERED.
Dated: September 14, 2018
New York, New York
____________________________________
J. PAUL OETKEN
United States District Judge
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