Moray v. Koven & Krause
938 N.E.2d 980, 15 N.Y.3d 384 (2010)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under CPLR 321(c), if a party's attorney becomes disabled (e.g., suspended), an automatic stay of proceedings takes effect against that party, meaning no further adverse proceedings can be taken without court leave until 30 days after the opposing party serves notice to appoint new counsel. A trial court's dismissal of an action during such a stay, without the opposing party lifting the stay or the court explicitly granting leave under the narrow hardship exception of CPLR 321(c), must be vacated.
Facts:
- Joseph Moray had a claim against Koven & Krause, Esqs. for legal malpractice, breach of contract, and professional negligence.
- Moray's claims stemmed from defendant's predecessor law firm's representation of Moray in a prior lawsuit involving his efforts to purchase real property, which was dismissed for want of diligent prosecution.
- Moray's attorney for the current lawsuit, Warren Goodman, Esq., had his license to practice law suspended on or about January 24, 2008.
- Goodman advised Moray in writing of his suspension and told him to obtain new counsel.
- Moray was diligently pursuing new counsel but had not yet retained a new attorney and was still looking.
- A summons with notice for Moray's action against Koven & Krause, Esqs. was served on February 5, 2008, after Goodman's suspension, because it had been prepared and given to a process server beforehand.
Procedural Posture:
- On December 31, 2007, Joseph Moray commenced an action against Koven & Krause, Esqs. by filing a summons with notice in Supreme Court (trial court).
- On February 25, 2008, Koven & Krause, Esqs. served Warren Goodman with a notice of appearance and a demand for a complaint.
- On April 22, 2008, Koven & Krause, Esqs. moved to dismiss Moray's action in Supreme Court pursuant to CPLR 3012(b) for failure to serve a complaint.
- On or near June 13, 2008, Goodman submitted an affidavit in opposition to the motion to dismiss.
- On June 19, 2008, Supreme Court granted Koven & Krause, Esqs.' motion and dismissed Moray's action for non-service of the complaint.
- Moray, now represented by new counsel, appealed the Supreme Court's order to the Appellate Division, Second Department.
- On May 12, 2009, the Appellate Division affirmed the Supreme Court's order, concluding that Moray's contention regarding CPLR 321(c) was raised for the first time on appeal and thus not properly before it.
- The Court of Appeals of New York granted Moray permission to appeal the Appellate Division's decision.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does CPLR 321(c) impose an automatic stay on proceedings when a plaintiff's attorney is suspended from practice, requiring the opposing party to serve notice to appoint new counsel before further adverse proceedings can be taken, or is a trial court's dismissal of the action during such a period valid if the plaintiff failed to diligently seek new counsel or invoke the statute?
Opinions:
Majority - Read, J.
Yes, CPLR 321(c) imposes an automatic stay on proceedings when a plaintiff's attorney is suspended, and the trial court's dismissal of the action during this stay, without the defendant lifting the stay or the court explicitly granting leave for undue hardship, must be vacated. The command of CPLR 321(c) is straightforward: if an attorney becomes disabled, "no further proceeding shall be taken in the action against the party for whom he appeared, without leave of the court, until thirty days after notice to appoint another attorney has been served upon that party." This statute brings about an "automatic stay of the action," which takes effect with respect to the party whose attorney is disabled. The purpose of this stay is to afford a litigant, who has, through no act or fault of their own, been deprived of counsel, a reasonable opportunity to obtain new counsel before further proceedings are taken against them. In this case, Warren Goodman's suspension on January 24, 2008, automatically stayed Moray's lawsuit. Koven & Krause, Esqs. never acted to lift this stay by serving the required notice upon Moray to appoint new counsel. Therefore, the Supreme Court's order dismissing the action must be vacated. The Court rejected Koven & Krause, Esqs.' argument that the Supreme Court implicitly exercised its statutory authority to hear the motion by granting "leave of the court," clarifying that this exception is narrowly designed for specific undue hardship situations (e.g., to prevent an appeal period from running or when a provisional remedy is sought) and was not present or articulated by the Supreme Court here. The Court also held that Moray was not foreclosed from raising CPLR 321(c) for the first time on appeal, as the statute is intended to protect unrepresented litigants, and they should not be penalized for failing to alert a trial court to an automatic stay designed for their safeguarding.
Analysis:
This case significantly clarifies the mandatory nature and broad protective scope of CPLR 321(c) in New York, establishing that an automatic stay immediately takes effect upon an attorney's disability. It places the affirmative burden on the opposing party to formally serve notice and wait 30 days to lift the stay, rather than on the unrepresented litigant to invoke it or demonstrate diligence. The ruling also narrowly construes the "leave of the court" exception, reinforcing that it applies only to specific undue hardship scenarios and not as a general justification for dismissals during a statutory stay. This decision protects vulnerable unrepresented litigants and ensures procedural fairness in cases where counsel is unexpectedly lost.
