document 1

27
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x BJ 3 REST CORP., P.G.M. RESTAURANT CORP., : JOHN FRASER, ANTOINETTE ALTIERI, and : REBEKAH ALTIERI, : : Plaintiffs, : Index No. : -against- : SUMMONS : BRUNO V. GIOFFRE, JR., ANTHONY J. DiFIORE, : THE QUINN LAW FIRM, P.L.L.C., GUY T. PARISI, : and LAW OFFICE OF BRUNO V. GIOFFRE, JR., LLC, : : Defendants. : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x To the above-named defendants: YOU ARE HEREBY SUMMONED to answer the annexed Complaint in this action and to serve a copy of your answer upon counsel for plaintiffs within 20 days after the service of this Summons, exclusive of the day of service (or within 30 days after service is complete if this Summons is not personally delivered to you within the State of New York) and in case of your failure to answer, judgment will be taken against you by default for the relief demanded in the Complaint. The action will be heard in the Supreme Court of the State of New York, New York County. The basis for venue is that plaintiffs BJ 3 Rest Corp. and P.G.M. Restaurant Corp. both have places of business in New York County. Dated: New York, New York October 26, 2011 SCHWARTZ & PONTERIO, PLLC Attorneys for Plaintiffs By: ___________________________ Matthew F. Schwartz 134 West 29th Street – Suite 1006 New York, New York 10001 Telephone: (212) 714-1200 FILED: NEW YORK COUNTY CLERK 10/26/2011 INDEX NO. 652945/2011 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 10/26/2011

Upload: amanda5910

Post on 02-Dec-2014

25 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: Document 1

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x BJ 3 REST CORP., P.G.M. RESTAURANT CORP., : JOHN FRASER, ANTOINETTE ALTIERI, and : REBEKAH ALTIERI, : :

Plaintiffs, : Index No. : -against- : SUMMONS : BRUNO V. GIOFFRE, JR., ANTHONY J. DiFIORE, : THE QUINN LAW FIRM, P.L.L.C., GUY T. PARISI, : and LAW OFFICE OF BRUNO V. GIOFFRE, JR., LLC, : :

Defendants. : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x To the above-named defendants:

YOU ARE HEREBY SUMMONED to answer the annexed Complaint in this action and to serve a copy of your answer upon counsel for plaintiffs within 20 days after the service of this Summons, exclusive of the day of service (or within 30 days after service is complete if this Summons is not personally delivered to you within the State of New York) and in case of your failure to answer, judgment will be taken against you by default for the relief demanded in the Complaint.

The action will be heard in the Supreme Court of the State of New York, New York

County. The basis for venue is that plaintiffs BJ 3 Rest Corp. and P.G.M. Restaurant Corp. both have places of business in New York County. Dated: New York, New York

October 26, 2011

SCHWARTZ & PONTERIO, PLLC Attorneys for Plaintiffs

By: ___________________________

Matthew F. Schwartz 134 West 29th Street – Suite 1006 New York, New York 10001 Telephone: (212) 714-1200

FILED: NEW YORK COUNTY CLERK 10/26/2011 INDEX NO. 652945/2011

NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 10/26/2011

Page 2: Document 1

1

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x BJ 3 REST CORP., P.G.M. RESTAURANT CORP., : JOHN FRASER, ANTOINETTE ALTIERI, and : REBEKAH ALTIERI, : :

Plaintiffs, : Index No. : -against- : COMPLAINT : BRUNO V. GIOFFRE, JR., ANTHONY J. DiFIORE, : THE QUINN LAW FIRM, P.L.L.C., GUY T. PARISI, : and LAW OFFICE OF BRUNO V. GIOFFRE, JR., LLC, : :

Defendants. : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

Plaintiffs BJ 3 Rest Corp., P.G.M. Restaurant Corp., Antoinette Altieri, John Fraser, and

Rebekah Altieri, as and for their Verified Complaint against defendants Bruno V. Gioffre, Jr.,

Anthony J. DiFiore, The Quinn Law Firm, PLLC, Guy T. Parisi, and Law Office of Bruno V.

Gioffre, Jr., LLC, hereby allege upon personal knowledge and upon information and belief:

The Parties

1. Plaintiff BJ3 Rest Corp. (“BJ3”) is, and at all times relevant to this lawsuit, was, a

corporation organized and existing under the laws of the State of New York.

2. Plaintiff P.G.M. Restaurant Corp. (“PGM”) is, and at all times relevant to this

lawsuit, was, a corporation organized and existing under the laws of the State of New York.

3. Plaintiff John Fraser (“Fraser”) is a resident of the State of New York.

4. Plaintiff Antoinette Altieri (“Antoinette”) is a resident of the State of New York.

5. Plaintiff Rebekah Altieri (“Rebekah) is a resident of the State of New York.

6. Upon information and belief, defendant Bruno V. Gioffre, Jr. (“Gioffre”) is a

resident of the State of New York.

Page 3: Document 1

2

7. At all times relevant to this lawsuit, defendant Gioffre was an attorney admitted to

practice law in the State of New York.

8. Upon information and belief, defendant Anthony J. DiFiore (“DiFiore”) is a

resident of the State of New York.

9. At all times relevant to this lawsuit, defendant DiFiore was an attorney admitted

to practice law in the State of New York.

10. Upon information and belief, defendant The Quinn Law Firm, PLLC (the “Quinn

firm”) is a professional limited liability company formed under the laws of the State of New

York.

11. Upon information and belief, defendant Guy T. Parisi (“Parisi”) is a resident of

the State of New York.

12. At all times relevant to this lawsuit, defendant Parisi was an attorney admitted to

practice law in the State of New York.

13. Upon information and belief, defendant Law Office of Bruno V. Gioffre, Jr. (the

“Gioffre firm”) is a limited liability company formed under the laws of the State of New York.

14. At all times relevant to this lawsuit, Gioffre was either a member, owner, counsel

to, or employee of the Gioffre firm and all the actions of defendant Gioffre described in this

Complaint were undertaken in such capacity.

15. At all times relevant to this lawsuit, Gioffre, the Gioffre firm, and DiFiore were

either employed by, members of, counsel to, or otherwise associated with, the Quinn firm and all

the actions of defendants Gioffre, the Gioffre firm, and DiFiore described in this Complaint were

undertaken in such capacity.

Page 4: Document 1

3

John Fraser’s Background

16. John Fraser is a premier New York chef. He began in the culinary industry

working as a bartender and line cook while pursuing a degree in Anthropology from the

University of California, San Diego. Fraser went on to cook for two notable Los Angeles

establishments, Cocco Pazzo and Raffles L’Ermitage Beverly Hills, rising through the ranks to

become sous chef at both locations.

17. In 2000, Fraser moved to Napa Valley to become a chef de partie under Thomas

Keller at French Laundry, where he worked for two years.

18. Fraser came to New York in 2003 and established Snack Taverna, an intimate

Greek trattoria, with a friend. Two years later, he moved to Compass where he drew critical

acclaim, and 2 stars from The New York Times. In 2006, John was named as one of only four

“young chefs to watch in America,” by Esquire magazine which called Compass, “the best

restaurant on the Upper West Side.”

19. Fraser’s passion and growth as a chef and restaurant owner were realized in

December, 2007 with the opening of Dovetail in New York. In addition to a slew of accolades,

Dovetail has received three stars from The New York Times as well as its first Michelin star in

the 2011 New York Guide.

Rebekah Altieri

20. Rebekah Altieri has an extensive background in accounting and in the New York

restaurant industry. Beginning in 1992, she oversaw operation of the family-owned restaurant

Champs Sport Rock Cafe in Croton, New York. From 1993 to 1995, she worked as a waitress at

Spiga in Scarsdale.

Page 5: Document 1

4

21. In 1995, she attended The Chubb Institute where she studied accounting and

computer programming. From 1996 to 1999, she was finance director for White Plains Hyundai

White Plains NY and Fuciello Dodge New Rochelle NY

22. From 2002 to present, she has been the owner and operator of R and R Tax

Service, a small business accounting and tax firm.

23. In 2006, Rebekah purchased an interest in Destino from Eytan Sugarman and

Justin Timberlake. Since then, she has operated Destino to excellent reviews.

24. In 2007, she assisted in the build out and grand opening of Justin Timberlake’s

new restaurant, Southern Hospitality. In 2008, she reorganized Islero restaurant and was

responsible for daily operations of the restaurant. In 2009, she worked on the reorganization of

Cain Leisure and took charge of all financial operations for three venues, including The Surf

Lodge in Montauk and Gold Bar in New York.

What Happens When

25. Fraser, Antoinette, and Rebekah came together to create a new restaurant and the

project developed into What Happens When. Their idea was to create a temporary restaurant

installation that was to transform every 30 days into an entirely new restaurant.

26. Plaintiffs found a location for the restaurant on the ground floor of 25 Cleveland

Place, the former home to the restaurant Le Jardin Bistro. Their plan was to have the space for 9

months in a reclaimed space in New York City and change focus with a new “movement” every

month in order to explore what it means to feed people within the traditional constructs of

dining, as well as creativity.

27. At the end of the initial nine months, plaintiffs planned to continue the operation

by picking one theme for the restaurant, either the most successful monthly movement or a more

Page 6: Document 1

5

traditional theme, perhaps operating as a steakhouse, for as long as their landlord would allow

them to remain in the space.

Le Jardin Bistro

28. In November, 2010, plaintiffs found the perfect location for their planned

restaurant, the space previously occupied by Le Jardin Bistro at 25 Cleveland Place (the

“Cleveland Place premises”).

29. In October, 2010, Gerald Katz (“Katz”) was the principal owner of PGM which

had operated Le Jardin Bistro. PGM held the On Premises Liquor License for le Jardin Bistro

(License No. 1025134)(the “PGM license”) issued by the New York State Liquor Authority

(“NYSLA”). A copy of the PGM license is annexed as Exhibit 1.

30. In October, 2010, PGM was losing its lease because the owner of the Cleveland

Place premises intended to redevelop the property. The Cleveland Place premises were therefore

available for a short term lease, through the fall of 2011 and on a month to month basis

thereafter.

31. In November, 2010, plaintiffs entered negotiations with Katz to purchase PGM,

and along with it, the PGM liquor license, and with PGM’s landlord, in order to lease the

Cleveland Place premises for What Happens When.

Retainer of Defendants Gioffre, DiFiore, and The Quinn firm

32. In or around November, 2010, plaintiffs retained Gioffre and the Gioffre firm, in

their capacities as attorneys, to represent and advise them in connection with the creation of

What Happens When, and related matters, including the purchase of PGM stock and liquor

license, the negotiation and execution of a lease for the Cleveland Place premises, and the

corporate change application for the PGM license and all related matters.

Page 7: Document 1

6

33. At that time, Gioffre was limited in his ability to practice before the NYSLA

because of a prior criminal conviction. Specifically, on or about December 10, 2009, Gioffre

pleaded guilty to violating New York State Public Officers Law § 73, a Class A misdemeanor.

As part of his plea, Gioffre agreed that he would “not directly or indirectly appear before the

SLA or file any documents or make any submissions to the SLA.”

34. Because of this restriction, upon information and belief, Gioffre had affiliated

himself with or otherwise enlisted DiFiore and the Quinn firm to assist him in matters before

then NYSLA and, specifically, in representing plaintiffs in connection with their NYSLA.

35. Gioffre, the Gioffre firm, DiFiore, and the Quinn firm agreed to provide plaintiffs

with the legal advice and representation necessary to protect their interests in connection with

the creation of What Happens When, and related matters, including the purchase of PGM stock

and liquor license, the negotiation and execution of a lease for the Cleveland Place premises, the

preparation and filing of a corporate change application with the NYSLA, the application for

continued use of the PGM license from the NYSLA and all related filings, the ensuing Article 78

proceeding, and all related matters.

36. Gioffre, the Gioffre firm, DiFiore, and the Quinn firm claimed to have the

experience necessary to handle these matters and, specifically, claimed to have experience in

handling liquor license matters.

37. Gioffre, the Gioffre firm, DiFiore, and the Quinn firm agreed to provide plaintiffs

with the legal advice and representation necessary to protect their interests in connection with the

creation and operation of What Happens When.

38. Initially, Gioffre said the legal fee for all the work, including the filings with the

NYSLA, would be a flat fee of $3,500, which plaintiffs paid. A copy of Gioffre’s e-mail setting

Page 8: Document 1

7

forth the terms of the retainer agreement is annexed as Exhibit 2. Plaintiffs later paid an

additional $2,500.

Formation and Structure of BJ3

39. Gioffre was well aware of plaintiffs’ plans for What Happens When. Plaintiffs

explained their business plan to Gioffre in detail and he understood the important business points

of the plan, specifically that the restaurant would only have a short term lease (approximately

nine months guaranteed with an offer to continue the lease on a month to month thereafter until

the landlord began redeveloping the premises) and that it was therefore essential for plaintiffs to

have a liquor license immediately in order to operate successfully.

40. Gioffre further understood that plaintiffs wanted to form a corporation for the

purpose of owning and operating What Happens When and assisted plaintiffs in the formation of

that corporation. In fact, defendant Gioffre prepared the certificate of incorporation which was

filed with the New York Secretary of State on or about November 24, 2010. A copy of the

Certificate of Incorporation is annexed as Exhibit 4.

41. Gioffre was also well aware that the parties intended that the corporation to be

formed would be owned by Fraser and Antoinette and that Rebekah would be employed by BJ3

as accountant and business manager for What Happens When.

42. Gioffre represented Antoinette in connection with the preparation, negotiation,

and execution of the Shareholder Agreement with Fraser. A copy of the Gioffre’s e-mail dated

November 29, 2010 conveying the Shareholder Agreement is annexed as Exhibit 5.

The Cleveland Place Lease

43. Gioffre was well aware that the plaintiffs intended that BJ3 would open and

operate What Happens When at the Cleveland Place premises and that plaintiffs intended to

Page 9: Document 1

8

undertake extensive renovations at the premises in order to prepare for the operation of their

restaurant.

44. In fact, Gioffre had visited the premises with plaintiffs during their planning and

had an opportunity to observe the condition of the premises following the closing of Le Jardin

Bistro, which condition is accurately depicted in this photograph:

45. Gioffre represented BJ3 in connection with negotiation and execution of a lease

for the Cleveland Place premises, which the parties executed on or about November 24, 2010 for

a term commencing December 15, 2010 and ending July 31, 2011 (the “Lease”). A copy of

Gioffre’s e-mail dated November 19, 2010 regarding the Lease is annexed as Exhibit 6. A copy

of the Lease is annexed as Exhibit 7.

46. The Cleveland Place premises are owned by Kenmare Square LLC (the

“landlord”) which plans to redevelop the property, possibly as a hotel. Because the Lease is

short term, plaintiffs were able to negotiate a rent substantially below market. In addition, the

Page 10: Document 1

9

Landlord made commitment to allow plaintiffs to continue to lease the premises on a month to

month basis after the end of the Lease, again at below market rent, so long as it did not interfere

with Landlord’s plan to redevelop the property. PGM was not a party to the Lease.

Purchase of PGM Stock

47. Gioffre knew that plaintiffs intended to operate What Happens When with a liquor

license and that the ability to serve wine and other alcoholic beverages was essential to plaintiffs’

business plan. In order for plaintiffs’ business plan to succeed, it was vital that they be permitted

to act under the liquor license previously granted to PGM. Indeed, the liquor license was the

only PGM asset that had any value.

48. Gioffre was well aware that plaintiffs intended to purchase the stock of PGM so

that they could acquire its liquor license for What Happens When. Gioffre further understood

that acquiring an existing liquor license was the only viable way for plaintiffs to proceed with

their plan for What Happens When.

49. Had plaintiffs applied for a new license, the process would have been longer and

more uncertain, since it would have required community review. Given the short term

availability of the property, plaintiffs’ only viable option was to acquire the PGM license.

50. Gioffre represented plaintiffs in the negotiation and execution of a Promissory

Note and Sale of Corporate Stock Agreement with Katz, which the parties executed on or about

December 8, 2010 (the “PGM Stock Agreement”). Copies of the Promissory Note and Sale of

Corporate Stock Agreement are annexed as Exhibits 8 and 9.

51. Under the terms of the PGM Stock Agreement, plaintiffs agreed to pay Katz

$21,000 ($3,000.00 at the time of closing and an $18,000.00 Promissory Note payable in nine

months) for 100% of the stock of PGM. In addition, if the restaurant continued to operate after

Page 11: Document 1

10

the initial nine months, plaintiffs agreed to pay Katz $1,500 per month for each month of

operation between ten and twenty one months after closing, and $750.00 per month for each

month of operation between twenty two and thirty-three months after closing.

52. The change in ownership of PGM contemplated under the PGM Stock Agreement

constituted a corporate change for which advance NYSLA approval was required. Under

Alcoholic Beverage Control Law § 99-d(2): “Before any… corporate change in stockholders,

stockholdings, alcoholic beverage officers, officers or directors… can be effectuated for the

purposes of this chapter, there shall be filed with the liquor authority an application for

permission to make such change…”

53. Gioffre never advised plaintiffs that they were required to obtain NYSLA

approval before the transfer of PGM stock. Nor did he advise them to structure the PGM Stock

Agreement such that the transfer would be conditioned upon NYSLA approval of the corporate

change. Instead, Gioffre drafted the agreement and allowed his clients to sign the agreement

before obtaining NYSLA approval, in direct violation of New York law.

54. Defendant Gioffre also knew that his clients planned renovations for the

Cleveland Place premises, including the backyard. In fact, he had negotiated a provision in the

Lease (Section 99 of the Rider) (Exhibit 7) stating that the landlord could not unreasonably

withhold consent to plaintiffs’ alterations.

55. Gioffre should have realized that, given their intention to make substantial

alterations, plaintiffs were required to obtain advance permission from NYSLA. Specifically,

under Alcoholic Beverage Control Law § 99-d(1): “Before any substantial alteration to a

licensed premises may be undertaken by or on the behalf of any licensee… the licensee shall

make an application to the liquor authority for permission to effect such alteration.”

Page 12: Document 1

11

56. Gioffre never advised plaintiffs that NYSLA approval was required for their

planned renovations. Nor did he advise them to structure the PGM Stock Agreement or Lease

such that those agreements would be conditioned on NYSLA approval of the renovations.

Instead, Gioffre allowed plaintiffs to proceed with their renovation plans without applying for or

obtaining NYSLA approval, in direct violation of New York law.

57. Further, following the purchase of the PGM stock, Rebekah Altieri received the

PGM license from Katz and asked Gioffre what steps she should take. Gioffre gave plaintiffs no

instructions and never advised plaintiffs that the law required plaintiffs to put the PGM license

into safekeeping pending approval of the corporate change application. Instead, Gioffre told

Rebekah only that he would be preparing the necessary papers to file with the NYSLA to allow

continuation of the PGM license. At no time did he ever advise plaintiffs to place the PGM

license in safekeeping as required by law.

58. Plaintiffs followed Gioffre’s instructions and advice and believed they had

complied fully with applicable law.

What Happens When Begins Operation

59. Gioffre agreed to continue the representation and continued to advise plaintiffs in

connection with matters relating to the opening of What Happens When.

60. Gioffre was well aware of plaintiffs’ plans to open the restaurant in January,

2011. In fact, on or about January 19, 2011, Gioffre wrote a letter to Empire Merchants, New

York’s leading wine and liquor distributor, a copy of which is annexed as Exhibit 10. In the

January 19, 2010 letter, Gioffre wrote:

Please be advised that the Law Office of Bruno V. Gioffre, Jr. has been retained to represent PGM Restaurant Corp. in preparing and filing the necessary Corporate Change Application with the New York State Liquor Authority.

Page 13: Document 1

12

61. Although he knew of their plans to open the restaurant, Gioffre never advised

plaintiffs that they were required to confirm NYSLA approval of the corporate ownership of

PGM before beginning their operations or serving alcohol.

62. Plaintiffs spent substantial money and effort to renovate the premises in

preparation for the restaurant opening planned for late January, 2011. Their efforts gained

immediate and positive publicity. On January 4, 2011, a lengthy article about the restaurant

appeared on the front page of the Dining Out section of the New York Times. A copy of the

New York Times article is annexed as Exhibit 11.

63. In late January, plaintiffs believed that they had complied fully with applicable

law and What Happens When opened for friends and family.

The Movements

64. Plaintiffs collaborated with many artistic professionals, including graphic and

industrial designers, interior designers, and composers to design the space.

65. Every month, the restaurant was transformed in a new “movement,” adopting a

new theme, underscored not only by a new menu but also by new décor, graphic icons, and

music.

66. Movement No. 1 was inspired by stark white of winter snow scenes which

plaintiffs incorporated in the restaurant’s décor and menu items as depicted in these photographs:

Page 14: Document 1

13

67. During Movement Number 2, the restaurant took on the ambiance of a dense

forest reminiscent of Where the Wild Things Are. Plaintiffs installed a large swath of emerald-

green sticks, representing swaths of oversize pine needles and the menu included theme-

appropriate dishes like forest mushrooms with salsify, hazelnuts, and barley as depicted in these

photographs:

68. The idea of blushing provided the theme for a Valentine’s Day transformation,

including a dramatic cloud of colorful fabric overhead as depicted in this photograph:

Page 15: Document 1

14

69. Movement Number 3 was inspired by Renoir’s 1881 painting, The Luncheon of

the Boating Party and the restaurant was transformed, drawing significant elements from the

Renoir painting to re-create an intimate, communal experience reminiscent of 19th century

France, including a 25 foot interior awning and “garden party” string lighting, as depicted in

these photographs:

70. For Movement Number 4, plaintiffs took their inspiration from jazz and the food

of New Orleans. Plaintiffs’ designer used 9,100 feet of string to create different volumes

throughout the space. The entryway welcomed guests with a collage of patterns and imagery

that mix old photographs from New Orleans with abstract patterns that visually represent the

tempo of jazz. The menu offered the food and flavors of New Orleans, the birthplace of

American jazz, including traditional dishes like gumbo and po’ boys as depicted in these

photographs:

Page 16: Document 1

15

71. Each movement built on the success of the last and resulted in new reviews and

more favorable publicity for What Happens When. The restaurant’s sales grew with each

passing month and plaintiffs looked forward to increasing success, particularly during the warm

weather months when they would be able to take full advantage of the outdoor space in the rear

of the building.

NYSLA Investigation

72. The NYSLA began an investigation into What Happens When in early 2011,

contemporaneously with the opening.

73. On February 1, 2011, NYSLA agents made a disclosed visit to What Happens

When and discovered that it had reopened under new owners-operators, but that the required

corporate change application had not yet been filed.

74. This constituted the violation of “availing” under Alcoholic Beverage Control

Law § 111 in that plaintiffs had effectuated a corporate change without the approval of the State

Liquor Authority in violation of ABCL § 99-d (2). Gioffre did not explain this law to plaintiffs

before they began operation.

75. Plaintiffs advised Gioffre of the NYSLA inquiry immediately and he told them

not to worry.

The Corporate Change Application

76. Notwithstanding that the Stock Sale Agreement had been executed on December

8, 2010, Gioffre delayed preparing the corporate change application until two months later.

77. On or about February 2, 2011, nearly two months after his clients had signed the

PGM Stock Agreement, a week after they had begun serving alcoholic beverages, and a day after

the NYSLA had inquired about the license, Gioffre finally prepared and provided plaintiffs with

Page 17: Document 1

16

a corporate change application for filing with the NYSLA. Copies of Gioffre’s February 2, 2010

e-mail and the corporate change application he prepared are annexed as Exhibit 12.

78. Plaintiffs followed Gioffre’s instructions and Fraser and Katz executed the

document as prepared by Gioffre.

79. DiFiore submitted the corporate change application to the NYSLA by letter on

Quinn firm letterhead dated February 4, 2011. A copy of DiFiore’s letter of transmittal is

annexed as Exhibit 13. The Quinn firm’s letterhead lists both Gioffre and DiFiore as members

of the firm.

80. Not only was the corporate change application untimely, it was incomplete in that

it did not properly disclose BJ3’s role in the transaction. For example, Fraser and Antoinette are

described on the corporate change application as principals of BJ3, but the application provided

no information about BJ3. Moreover, the application did not explain BJ3’s role in the

transaction, even though BJ3 paid the consideration to Katz for the PGM stock and BJ3 by then

had leased the premises under which the NYSLA had granted the license to PGM. BJ3 in effect

was an undisclosed corporation funding the proposed transaction.

81. In addition, the corporate change application made no mention of the new trade

name for the licensed premises – What Happens When – and neither Gioffre nor DiFiore ever

advised plaintiffs that they were required to obtain NYSLA approval for such a change.

82. The NYSLA never approved the corporate change application and never issued a

Corporate Change Endorsement.

The Renewal Application

83. The PGM license expired on March 31, 2011.

Page 18: Document 1

17

84. Gioffre, the Gioffre firm, DiFiore, and the Quinn firm agreed to continue the

representation and continued to advise plaintiffs in connection with license issues.

85. On or about February 8, 2011, Gioffre provided Rebekah with a renewal

application for the PGM License. Copies of Gioffre’s e-mail and attached renewal application

are annexed as Exhibit 14.

86. Gioffre never advised plaintiffs that the renewal application needed to be signed

by Katz since NYSLA had not approved the corporate change and Katz was the authorized

signatory for PGM.

87. Plaintiffs followed Gioffre’s instructions and executed the document as prepared

by Gioffre.

88. Gioffre arranged for the renewal application to be filed with the NYSLA,

presumably by defendant Fiore.

89. On March 7, 2011, Gioffre belatedly prepared and provided plaintiffs with an

endorsement application seeking to change the trade name on the PGM license to “What

Happens When”. Copies of Gioffre’s e-mail and attached endorsement application are annexed

as Exhibit 15. In his e-mail, Gioffre erroneously instructed plaintiffs to have either Fraser or

Antoinette sign the endorsement application, even though Katz was still the only authorized

signatory for PGM.

90. Plaintiffs followed Gioffre’s advice by having Fraser sign the endorsement

application. It was submitted to the NYSLA on or about March 17, 2011.

Page 19: Document 1

18

The NYSLA Denials

91. The NYSLA declined to endorse the Corporate Change Application. On or about

April 21, 2011, the NYSLA issued a letter denying the renewal application. A copy of the

Notice of Disapproval of Application issued by NYSLA is annexed as Exhibit 16.

92. In its letter of denial, the NYSLA cited several grounds for its decision: (a) an

authorized person did not sign the renewal application; (b) the licensee allowed persons not

approved by the Authority to avail its license; and (c) significant alterations were made to the

licensed premises without first obtaining NYSLA approval as required by the Alcoholic

Beverage Control Law.

93. In its letter of denial, the SLA also stated that it had declined to act on the

corporate change application because it had not been submitted until after plaintiffs had become

aware of the SLA’s investigation.

Retainer of Parisi

94. Gioffre, the Gioffre firm, DiFiore, and the Quinn firm agreed to continue the

representation and continued to advise plaintiffs in connection with an Article 78 proceeding by

which plaintiffs sought a court order directing NYSLA to grant renewal of the liquor license.

95. Gioffre arranged for plaintiffs to retain defendant Parisi and promised, in an e-

mail dated April 1, 2011, to “work together” with him in the Article 78 proceeding. A copy of

Gioffre’s e-mail is annexed as Exhibit 17.

96. Gioffre, Parisi, and the Quinn firm agreed to continue to provide plaintiffs with

the legal advice and representation necessary in the Article 78 proceeding and in the application

for a liquor license from the NYSLA, and all related matters.

Page 20: Document 1

19

97. Gioffre and Parisi claimed to have the experience necessary to handle these

matters.

98. Gioffre and Parisi told plaintiffs that they had a strong case, that they had done

nothing wrong, and that they would prevail in court.

99. Plaintiffs entered a retainer agreement with Parisi and paid him $10,000 for the

work relating to the Article 78 proceeding. A copy of the retainer agreement is annexed as

Exhibit 18.

The Article 78 Proceeding

100. Defendants Gioffre and/or Parisi drafted the papers for the Article 78 proceeding.

101. On or about April 11, 2011, Parisi filed an Article 78 proceeding captioned PGM

Restaurant Corp. v. New York State Liquor Authority (NY County Index No. 104335/11)(the

“Article 78 Proceeding”). Copies of the Petition and supporting memo of law filed by Parisi are

annexed as Exhibits 19-20.

102. NYSLA submitted opposition to plaintiff’s petition in the Article 78 Proceeding,

copies of which are annexed as Exhibit 21 and 22.

103. Parisi thereafter submitted a reply, a copy of which is annexed as Exhibit 23.

104. Defendants Gioffre and the Quinn firm continued to advise plaintiffs throughout

the Article 78 Proceeding, notwithstanding that they were not attorney of record.

105. Defendant Gioffre made belated attempts to correct the errors he had made with

respect to licensing issues. For example, on or about April 26, 2011, Gioffre prepared and

provided plaintiffs with a Management Agreement by which PGM would retain BJ3 to manage

the restaurant in apparent recognition that plaintiffs would be required to have PGM, the licensed

Page 21: Document 1

20

entity, continue to participate in the operation of the restaurant. Copies of Gioffre’s e-mail and

of the draft Management Agreement are annexed as Exhibit 24.

106. Also, on April 26, 2011, Gioffre provided plaintiffs with a certification for Katz to

sign to assist in their efforts to maintain the PGM license. Copies of Gioffre’s e-mail and

certification are annexed as Exhibit 25.

107. On or about April 27, 2011, the parties appeared in court for the first hearing in

the Article 78 Proceeding and the attorneys entered negotiations.

108. Upon information and belief, NYSLA’s attorneys indicated that the NYSLA

would be willing to settle the matter if plaintiffs would simply submit a proper renewal

application signed by Katz. Such a settlement would have allowed plaintiffs to continue to

operate their restaurant with a liquor license as planned.

109. Upon information and belief, the hearing was adjourned to allow plaintiffs the

opportunity to obtain Katz’s signature on the application.

110. On or about May 4, 2011, plaintiffs appeared in court for the continued hearing on

their petition in the Article 78 Proceeding.

111. Upon information and belief, NYSLA was still willing to settle the case, provided

that plaintiffs submitted a proper application executed by Katz. Katz had agreed to cooperate

with plaintiffs efforts to maintain the PGM license and had agreed to sign any papers necessary

for plaintiffs to continue operating the restaurant with the PGM license.

112. Katz was available in court on May 4, 2011 and would have signed any papers

necessary for plaintiffs to continue operating their restaurant with the PGM license.

113. Gioffre and Parisi failed to communicate this offer to plaintiffs and instead caused

the petition to be submitted to the court for decision.

Page 22: Document 1

21

114. On or about May 10, 2011, the court issued a decision and order denying

plaintiff’s petition in the Article 78 Proceeding, as copy of which is annexed as Exhibit 26. In

doing so, the court ruled as follows:

The petitioner, although represented by an attorney when filing the applications, waited approximately two months before filing the Corporate Change application with the respondent. The transfer of shares took place on December 8, 2010 and the Corporate Change application was filed February 4, 2011. Antoinette Altieri and John Fraser used the petitioner's liquor license before February 4, 2011, as indicated by the January invoices, even though they were required to notify the respondent before the transfer of shares on December 8, 2010. There was no notification by the petitioner of the planned renovations or alterations to the premises until the renewal inspection. The petitioner has not sufficiently established the need for a hearing or that the respondent's determinations were arbitrary and capricious. (emphasis added)

115. As a result of the foregoing, plaintiffs lost the liquor license for What Happens

When and were forced to cease operations.

Damages

116. Plaintiffs have sustained substantial damages as a result of the loss of their liquor

license.

117. Plaintiffs were able to operate What Happens When only from on or about

February 1, 2011 through May 23, 2011.

118. During this time, plaintiffs received great reviews and publicity. What Happens

When was featured prominently and favorably in reviews published in many publications.

Copies of some of these articles are annexed as Exhibits 7, 27, 28, and 29.

119. During the period of operation, What Happens When enjoyed great financial

success and its revenues and profits increased every month.

120. As a result of defendant’s malpractice as described above, plaintiffs lost their

ability to continue operating What Happens When for the remainder of the Lease. During the

Page 23: Document 1

22

upcoming summer months, plaintiffs anticipated increasing their revenues substantially because

they would have been able to use the outdoor space in the rear of the Cleveland Place premises.

Plaintiffs lost substantial profits for the time period remaining on the Lease.

121. In addition to the lost term of the Lease, the Landlord was willing to extend

plaintiffs’ occupancy on a month to month basis continuing after the expiration of the Lease until

such time as Landlord was able to proceed with its plans to redevelop the Cleveland Place

premises. Plaintiffs therefore claim lost profits for this period as well for as long as the landlord

would have allowed plaintiffs to lease the space.

122. In addition, plaintiffs suffered damages for: (a) the expenses incurred for rent

($8,000 per month) for the balance of the Lease after they were required to cease operating the

restaurant; (b) for food, beverages, and supplies on hand at the time they were required to cease

operating the restaurant; (c) legal fees and other expenses incurred after the dismissal of their

petition in the Article 78 proceeding in an effort to have the PGM license reinstated; (d) the

$18,000 paid the for the PGM stock; and (e) other expenses.

First Cause Of Action (Against Gioffre, the Gioffre firm, DiFiore, and the Quinn firm for Legal Malpractice)

123. Plaintiffs repeat and reiterate each and every allegation set forth above as though

fully set forth herein.

124. Plaintiffs retained Gioffre, the Gioffre firm, DiFiore, and the Quinn firm to advise

them with respect to all matters relating to establishing the restaurant What Happens When,

including their acquisition of and application for a liquor license and the preparation and filing of

a corporate change application with NYSLA.

125. Gioffre, the Gioffre firm, DiFiore, and the Quinn firm acted as plaintiffs’ attorney

beginning in November, 2010 and on a continuous basis thereafter through May 10, 2011.

Page 24: Document 1

23

126. Plaintiffs had an attorney-client relationship with Gioffre, the Gioffre firm,

DiFiore, and the Quinn firm. Each of these defendants owed plaintiffs a non-delegable duty and

the limitations of CPLR Article 16 are inapplicable.

127. As attorneys for plaintiffs, Gioffre, the Gioffre firm, DiFiore, and the Quinn firm

owed them a duty to render legal services in a competent and professional manner and to act

with ordinary and reasonable skill, care, and diligence.

128. Gioffre, the Gioffre firm, DiFiore, and the Quinn firm acted negligently under the

circumstances, failed to provide adequate legal services to plaintiffs in accordance with generally

accepted standards of the legal profession, and failed to act with ordinary and reasonable skill,

care, and diligence.

129. The negligence of defendants Gioffre, the Gioffre firm, DiFiore, and the Quinn

firm consisted of, among other things, failing to advise plaintiffs properly concerning the PGM

Stock Agreement; failing to make the PGM Stock Agreement and stock transfer contingent upon

NYSLA approval of the corporate change application; failing to advise plaintiffs not to begin

operation of the restaurant until NYSLA approved the corporate change application; failing to

submit a timely corporate change application; failing to submit a proper corporate change

application; failing to submit a proper renewal application; failing to advise plaintiffs concerning

the ABC Law provisions applicable to their proposed operation; failing to submit sufficient

evidence in the Article 78 Proceeding; failing to advise plaintiffs of the NYSLA’s offer to settle

the Article 78 Proceeding; failing to know and/or research applicable law; and failing to advise

plaintiffs properly.

Page 25: Document 1

24

130. Plaintiffs would have operated What Happens When for at least 9 months with a

valid NYSLA liquor license and would not have lost their liquor license but for the negligence of

defendants Gioffre, the Gioffre firm, DiFiore, and the Quinn firm as described above.

131. The breaches of duty of defendants Gioffre, the Gioffre firm, DiFiore, and the

Quinn firm described above constitute negligence and legal malpractice which have proximately

resulted in substantial damage to plaintiffs in an amount in excess of One Million Dollars

($1,000,000).

132. Plaintiffs are also entitled to the return of all fees paid to defendants.

133. By reason of the foregoing negligence of the Gioffre, the Gioffre firm, DiFiore,

and the Quinn firm, plaintiffs have been damaged in an amount to be determined at trial, but in

no event less than $1,000,000.

Second Cause of Action (Against Parisi for Legal Malpractice)

134. Plaintiffs repeat and reiterate each and every allegation set forth above as though

fully set forth herein.

135. Plaintiffs retained Parisi to advise them with respect to all matters relating to

establishing the restaurant What Happens When, including their acquisition of and application

for a liquor license.

136. Parisi acted as plaintiffs’ attorney beginning in April, 2011 and on a continuous

basis thereafter through h May 10, 2011.

137. Plaintiffs had an attorney-client relationship with Parisi and he owed plaintiffs a

non-delegable duty and the limitations of CPLR Article 16 are inapplicable.

Page 26: Document 1

25

138. As attorney for plaintiffs, Parisi owed them a duty to render legal services in a

competent and professional manner and to act with ordinary and reasonable skill, care, and

diligence.

139. Parisi acted negligently under the circumstances, failed to provide adequate legal

services to plaintiffs in accordance with generally accepted standards of the legal profession, and

failed to act with ordinary and reasonable skill, care, and diligence.

140. The negligence of Parisi consisted of, among other things, failing to advise

plaintiffs properly; failing to submit sufficient evidence in the Article 78 Proceeding; failing to

advise plaintiffs of the NYSLA’s offer to settle the Article 78 Proceeding; failing to know and/or

research applicable law; and failing to advise plaintiffs properly.

141. Plaintiffs would have operated What Happens When for at least 9 months with a

liquor license and would not have lost their liquor license but for defendant Parisi’s negligence

as described above.

142. Defendant Parisi’s breaches of duty constitute negligence and legal malpractice

which have proximately resulted in substantial damage to plaintiffs in an amount in excess of

One Million Dollars ($1,000,000).

143. Plaintiffs are also entitled to the return of all fees paid to Parisi.

144. By reason of the foregoing negligence of Parisi, plaintiffs have been damaged in

an amount to be determined at trial, but in no event less than $1,000,000.

Page 27: Document 1

26

WHEREFORE, plaintiffs BJ 3 Rest Corp., P.G.M. Restaurant Corp., Antoinette Altieri,

John Fraser, and Rebekah Altieri, by their attorneys Schwartz & Ponterio, PLLC, request that

judgment be entered against defendants Bruno V. Gioffre, Jr., Anthony J. DiFiore, The Quinn

Law Firm, PLLC, Guy T. Parisi, and Law Office of Bruno V. Gioffre, Jr., LLC, jointly and

severally, awarding compensatory damages in an amount to be determined, but in any event not

less than $1 million for each cause of action, plus prejudgment interest, at the legal rate, from

May 10, 2011, and awarding plaintiffs attorneys’ fees, and the costs and disbursements of this

action, together with such other and further relief as the Court deems just and proper.

Dated: New York, New York October 26, 2011

SCHWARTZ & PONTERIO, PLLC Attorneys for Plaintiffs

By: ___________________________

Matthew F. Schwartz 134 West 29th Street – Suite 1006 New York, New York 10001 Telephone: (212) 714-1200