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A firm whose associate “stole” clients by impersonating a competing firm’s partner does not have to pay that firm punitive damages, a Manhattan judge has ruled. Last year a jury awarded the Manhattan personal injury firm, Rosenberg, Minc, Falkoff & Wolff, $100,000 in compensatory damages and $1.3 million in punitive damages after finding that Queens-based Mallilo & Grossman was responsible for the actions of its associate, Mason Pimsler. Mallilo & Grossman was apportioned $962,036 in punitive damages for misappropriating Rosenberg Minc’s clients. In setting aside that part of the award, Manhattan Supreme Court Justice Rosalyn Richter drew a distinction between the actions of Pimsler and his firm. “There was no evidence presented that Mallilo & Grossman had any involvement in initiating the theft of Rosenberg’s clients; the proof at trial showed that Pimsler came up with this idea,” Justice Richter wrote in Rosenberg Minc v. Mallilo & Grossman, 603967-00. The judge also cut Pimsler’s punitive damages for misappropriation from $343,750 to $105,000. But Richter denied both defendants’ applications to set aside the rest of the verdict. Pimsler continues to owe compensatory damages of $82,500 for unjust enrichment and $10,500 for misappropriation. Mallilo & Grossman is liable for $10,500 on the misappropriation claim. In the first five months of 1999, Pimsler, a 1997 graduate of Touro Law School, made 52 calls to Rosenberg Minc’s answering service pretending to be partner Daniel Minc. Intercepting messages intended for Minc, Pimsler would direct prospective clients to Mallilo & Grossman instead. Rosenberg Minc discovered its messages had been intercepted and contacted the Queens District Attorney’s Office. Pimsler was arrested in a sting operation in which a detective posed as a prospective client and left a message for Minc. Pimsler intercepted the message, called the detective and brought him to Mallilo & Grossman’s offices for a consultation. Pimsler pleaded guilty to criminal impersonation and was sentenced to three years’ probation. He was also disbarred. At his disciplinary hearing, Pimsler claimed he was driven to his actions by his firm’s “pressure cooker” atmosphere. At trial, Pimsler admitted calling Rosenberg Minc’s answering service but claimed the only person he successfully contacted was the undercover detective. The jury found that Mallilo & Grossman ratified and supported Pimsler’s actions. Mallilo & Grossman claimed in motions before Richter that the finding was against the weight of the evidence. But the judge agreed with the jury, noting that Pimsler, a first-year associate, brought in more than 100 cases, double the number of the next highest associate. “[N]o question exists that the firm was well-aware of the extraordinary volume of clients that Pimsler, a brand new associate, was bringing in,” Richter wrote. “In light of these facts, and other issues relating to Pimsler’s solicitation techniques, a jury could have rationally found that Mallilo & Grossman should have conducted a more thorough inquiry as to where the clients were coming from.” But Richter said the firm’s conduct did not meet the standard for the awarding of punitive damages. She said such an award would require “clear and convincing” evidence that Mallilo & Grossman’s actions were intentional and malicious. While she said Pimsler’s actions were “sufficiently egregious, reprehensible, intentional and outrageous to justify a punitive damage award,” Richter said she was reducing his punitive damages because they were more than 10 times his compensatory damages for the misappropriation claim and excessive according to standards suggested by the U.S. Supreme Court.

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