Plaintiffs move for summary judgment. Defendants cross-move for summary judgment.

From 1997 through March 31, 1999. Plaintiff, Philip Floumanhaft ("Floumanhaft"), Plaintiff, Alan Glickenhouse ("Glickenhouse"), Defendant, Selwyn Karp ("Karp"), and Stephen Silver ("Silver") practiced law as a partnership under the name of Karp, Silver, Glickenhouse & Floumanhaft ("KSG&F").

On March 31, 1999, Karp withdrew as a partner in KSG&F.

By written agreement dated March 31, 1999 ("1999 Agreement"), Karp transferred his interest in KSG&F to a new partnership consisting of Silver, Glickenhouse, Floumanhaft and Plaintiff, Alan Queen ("Queen") known as Silver, Glickenhouse, Floumanhaft & Queen ("SGF&Q"). Pursuant thereto, Karp was to receive the agreed sum of $1.2 million for his interest in the practice.

Silver, Glickenhouse, Floumanhaft and Queen agreed to pay Karp the buy-out sum over an 8 year period with the first payment due on May 1, 1999 and with monthly payment due thereafter on the first day of each month. During the first three years, payment were allocated to a restrictive covenant, recoupment of prepaid expenses, good will, office equipment and furniture and work in progress.^[FN1] Over the final 5 years

of the 1999 Agreement, the payments were allocated to the restrictive covenant, good will and work in progress.

The 1999 Agreement has a provision for accelerating the payments should Silver cease to be an active member of SGF&Q or should Silver's equity share in the partnership fall below 20% or should SGF&Q cease to maintain its principal offices at 1600 Central Avenue, Far Rockaway. Silver, Glickenhouse, Floumanhaft and Queen personally guaranteed the payment due Karp pursuant to the 1999 Agreement.

By order of the Appellate Division, Second Department dated July 29, 1999, Karp was suspended from the practice of law based upon his having plead guilty to the crime of commercial bribing in the second degree (Penal Law §180.00). Commercial bribery in the second degree is a class A misdemeanor. Karp was sentenced to a conditional discharge and a $1,000 fine.

By decision and order of the Appellate Division, Second Department dated April 16, 2001, Karp was suspended from the practice of law for 3 years. See,Matter of Karp, 282 AD2d 127 (2nd Dept. 2001).

Glickenhouse, Floumanhaft, Queen and Karp entered in an agreement dated December 28, 2004 ("2004 Agreement") which modified the terms of the 1999 Agreement. The 2004 Agreement provided for Glickenhouse, Floumanhaft and Queen to pay to Karp certain sums in January 2005. Timely payment of these sums would constitute full payment to Karp of all money due him. If the payments provided for in the 2004 Agreement were not timely made, then Silver, Glickenhouse, Floumanhaft and Queen would owe Karp the balance due pursuant to the terms of the 1999 Agreement with credit being given for any payments made pursuant to the 2004 Agreement.

Plaintiffs have paid Karp over $1 million on account of the 1999 Agreement and the 2004 [*3]Agreement.

Plaintiffs allege that the 1999 Agreement and the 2004 Agreement are void ab initio because they are in violation of the common law and public policy and because they are in violation of the Code of Professional Responsibility. See, 22 NYCRR 1200 et. seq.

Plaintiffs seek to have the 1999 Agreement and the 2004 Agreement declared void and to recover the money paid to Karp in accordance with these agreements.Defendant cross-moves for summary judgment dismissing the complaint or, alternatively, if the 1999 Agreement and 2004 Agreement are declared void, requests an accounting of all cases of the firm to determine the amount due him on a quantum meruit basis.

A contract that in whole or in part violates the public policy of this state is void. Pecora v. Cirillo, 207 AD2d 215 (2nd Dept. 1995). However, parties to an agreement that is violative of public policy who are in pari delicto may not seek the aid of the court to undo their transaction. Miltenberg and Samton, Inc. v. Mallor, 1 AD2d 458 (1st Dept. 1956).

Plaintiffs have failed to establish that the 1999 Agreement and/or the 2004 Agreement are in violation of New York's public policy, common law or the Code of Professional Responsibility.

The Code of Professional Responsibility permits a retiring lawyer to sell a practice. 22 NYCRR 1200.15-a [DR 2-111] . This disciplinary rule specifically permits a lawyer retiring from private practice to include in the sale of the practice a value for good will. The agreement to sell a practice may contain provisions reasonably restricting the seller's private practice of law.

Retirement is defined as the cessation of the practice of law in a geographic area. This rule does not distinguish between voluntary and involuntary retirement.^[FN2]

At the time Karp sold his interest in KSG&F, he had not plead guilty and was not under suspension. The Agreement specifically states Karp was withdrawing from the firm and refers to him as the "Retiring Partner." Plaintiffs do not assert they were unaware of the criminal investigation and charges against Karp or that those charges, if proven, might result in Karp's suspension from the practice of law or disbarment.

New York permits a suspended or disbarred attorney to recover legal fees earned and disbursements incurred for legal services rendered prior to suspension or disbarment on a quantum meruit basis. Decolator, Cohen & DiPrisco, LLP v. Lysaght, Lysaght & Kramer, P.C., 304 AD2d 86 (1st Dept. 2003). Thus, it is clear that the public policy of New York is not offended by permitting a suspended or disbarred attorney from being paid for work performed and reimbursed for disbursements incurred prior to suspension or disbarment provided the attorney is compensated on a quantum meruit basis.

An attorney forfeits a right to compensation only if the attorney's misconduct relates to the representation for which the attorney seeks fees. Decolator, Cohen & DiPrisco, LLP v. Lysaght, Lysaght & Kramer, P.C., supra; and Pessoni v. Robkin, 220 AD2d 732 (2nd Dept. 1995). Plaintiffs do not allege and do not place before this Court any evidence that Karp's legal or disciplinary problems involve any of the matters involved in the 1999 Agreement or the 2004 Agreement.

Nor do Plaintiffs place before this Court any evidence that the amount they agreed to pay to [*4]Karp for "work in progress" is anything but the amount Karp would be entitled to for the work performed on pending office matter as of his date of withdrawal or suspension on a quantum meruit basis. See, Id.^[FN3]

The provision of the Code of Professional Responsibility which permits an attorney to sell an interest in a law firm, permits valuation of good will and a restrictive covenant. Thus, the provisions of the 1999 Agreement which assign a value to the restrictive covenant and Karp's good will are not in violation of public policy.

Even before the Code of Professional Responsibility permitted an attorney to sell a practice, an attorney was permitted to sell the tangible personal property associated with his/her practice.

Attorneys who practice as a partnership may enter into an agreement to purchase the interest of a partner who withdraws from the firm. See, Connolly v. Thuillez, 26 AD3d 720 (3rd Dept. 2006).

The 1999 Agreement incorporates all of the permissible items into the amount being paid to Karp as the value of his interest in KSG&F.

Plaintiffs have not cited a single case or reference a specific provision of the Code of Professional responsibility which prohibit this transaction or which would make it violative of the public policy or common law of this state.

A party who avails itself of the benefit of the bargain is estopped from contesting its willing participation in the agreement. Stecher v. 85th Estates Co., -A.D.3d-, 2007 WL 2728550 (1st Dept. 2007); and Schultz v. 400 Cooperative Corp., 292 AD2d 16 (1st Dept. 2002). Glickenhouse, Floumanhaft and Queen have received the benefit of the bargain. Six and a half years after the parties had entered into the Agreement and after substantially all the payments due under the terms have the agreement have been paid, Plaintiffs seek to void the agreement. This cannot be permitted. See, Id.

Any assertions regarding the 2004 Agreement are equally unavailing. The primary function of that agreement was to change the payment terms so as to permit the Plaintiffs to fully satisfy their obligations.

Plaintiffs' reliance upon Matter of Haber, 27 AD2d 576 (2nd Dept. 1966), affd., 23 NY2d 763 (1968) is misplaced. At that time, an attorney could not sell an interest in a law firm. However, the holding in Haber was overruled by implication by the adoption of 22 NYCRR 1200.15-a, which permits an attorney to sell a firm. Additionally, in Haber, the disbarred and/or suspended attorney was to receive payments over a period of 19 years which is long after any possible accruals by way of quantum meruit would exist.

Plaintiffs offer no evidence that the amount paid to Karp for "work in progress" is improper on a quantum meruit basis or that there are no cases still at the firm on which Karp did not perform work.

Plaintiffs' assertion that the agreement is void because it is based upon a mistake of law is equally unavailing. This argument presupposes that the law prohibited Karp from selling, and SGF&Q from purchasing, Karp's interest in KSG&F. However, since the Court has concluded that the law does not prohibit such a sale, the parties were not mistaken as to the law.

The party seeking summary judgment must establish an entitlement to judgment as a matter of [*5]law. Alvarez v. Propsect Hosp., 68 NY2d 320 (1986); and Zuckerman v.

City of New York, 49 NY2d 557 (1980). Plaintiffs have failed to make such a showing. Therefore, their motion for summary judgment must be denied.

Defendant cross-moved for summary judgment dismissing the complaint. The motion while designated one for summary judgment is more in the nature of a motion to dismiss for failure to state a cause of action. CPLR 3211(a)(7).

Plaintiff is seeking to rescind the 1999 Agreement and obtain restitution of the money paid on account thereof. However, since the Court has found the 1999 Agreement and the 2004 Agreement valid and enforceable, .they cannot be rescinded. Since the agreements are valid and enforceable, Plaintiffs cannot obtain restitution.

Accordingly, it is,

ORDERED, that Plaintiffs' motion for summary judgment is denied; and it is further,

ORDERED, that Defendants cross-motion for summary judgment is granted. The action is hereby dismissed.

This constitutes decision and Order of the Court.

Dated: Mineola, NY______________________________

October 3, 2007Hon. LEONARD B. AUSTIN, J.S.C.

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