Lawsuit Funding LLC v Lessoff
Supreme Court of New York, New York County
December 4, 2013, Decided
Index No. 650757/2012
This case, involving alternative litigation financing, comes before the Court on Plaintiff Lawsuit Funding, LLC ("Funding") and Plaintiff Lawsuit Capital Advisors, LLC's ("Advisors," collectively, "Plaintiffs") motion for partial summary against Defendant Jeffrey Lessoff and Defendant The Law Firm of Jeffrey Lessoff (collectively, "Defendants"). Defendants oppose and cross-move for leave to amend their Answer to assert a statute of limitations defense and to dismiss the Complaint. For the reasons stated below, Plaintiffs' motion is granted, as to liability, and Defendants' cross-motion is granted, in part, and denied, in part.
Defendant Lessoff is an attorney, admitted to practice law in New York, who receives [*2] legal fees on a contingency basis. (Plaintiffs' Rule 19-a Statement of Undisputed Facts ("Stat.") ¶¶ 2, 3.) On January 16, 2007, Defendants entered into a litigation-funding agreement with Plaintiffs entitled "Sale of Contingent Proceeds Agreement" (the "Sale Agreement"). (Stat. ¶ 3.) The Sale Agreement called for Plaintiffs to receive a portion of the contingent legal fee that Defendants were expected to receive if five specifically named lawsuits were adjudicated in favor of Defendants' clients. (Affirmation of Matthew S. Aboulafia in Support of Plaintiffs' Motion ("Aboulafia Affirm.") Ex. C.) In exchange, Defendants received $108,500 as an advance on those expected legal fees. (Aboulafia Affirm. Ex. C.)
Defendant Lessoff failed to make any payments under the Sale Agreement. (Stat. ¶ 5.) On November 14, 2008, Plaintiff Funding filed an arbitration claim, pursuant to the Sale Agreement, seeking to compel Lessoff to surrender legal fees received in connection with the five named lawsuits. (Aboulafia Affirm. Ex. F at 1.) Lessoff unsuccessfully attempted to stay the arbitration. (Aboulafia Affirm. Ex. F at 1.) In August 2009, [**4] Funding and Lessoff settled the arbitration claim with a Stipulation [*3] of Settlement ("Stipulation") and a Consent Award ("Award"). (Aboulafia Affirm. Ex. F.)
In the Stipulation, Defendants acknowledged that they received $48,000 in legal fees from a named lawsuit and failed to pay Plaintiffs. (Aboulafia Affirm. Ex. F at 3 n.1.) Further, Defendants agreed to pay $7,000 plus interest to Advisors within two years of signing the Stipulation, as well as to pay Funding up to $238,700 based on legal fees Defendants expected to receive from eight specifically named lawsuits. (Aboulafia Affirm. Ex. F at 3.) Defendants also agreed to pay 25% of any other legal fees received from unrelated cases until the $108,500 advancement was fully paid. The Stipulation additionally provided that Defendants would pay $5,000 in liquidated damages, attorney's fees and other collection fees if they defaulted on the Stipulation. (Aboulafia Affirm. Ex. F at 3.) Finally, the Stipulation stated that the Award would not be final, and Plaintiffs would not be entitled to confirm the Award, until Defendants defaulted under the Stipulation. (Aboulafia Affirm. Ex. F at 4.)Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.
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2013 N.Y. Misc. LEXIS 5685 *; 2013 NY Slip Op 33066(U) **
[**2] LAWSUIT FUNDING, LLC, and LAWSUIT CAPITAL ADVISORS, LLC, Plaintiffs, - against - JEFFREY LESSOFF and THE LAW FIRM OF JEFFREY LESSOFF, Defendants.
Notice: THIS OPINION IS UNCORRECTED AND WILL NOT BE PUBLISHED IN THE PRINTED OFFICIAL REPORTS
summary judgment, attorney's fees, lawsuit, Notice, legal fees, unconscionable, Funding, Admit, cases, contingent, damages, cause of action, ethics, cross-motion, security interest, leave to amend, law firm, defaulted, first and second, further order, arbitration, settlement, discovery, breached, partial, parties