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FILED: ONONDAGA COUNTY CLERK 04/23/2021 03:58 PM INDEX NO. 003917/2021
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/23/2021
STATE OF NEW YORK
SUPREME COURT COUNTY OF ONONDAGA
COSTELLO, COONEY & FEARON, PLLC, Index No.
Plaintiff designates
Plaintiff,
Onondaga County as the
place of trial.
-vs-
The basis of the venue is
MELINDA BURDICK BOWE, Plaintiff's Business
SUMMONS
Defendant.
Plaintiff's business is
located in Syracuse, County
of Onondaga.
TO THE ABOVE-NAMED DEFENDANT:
YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve a
copy of your answer, or, if the complaint is not served with this summons, to serve a notice of
appearance, on the plaintiffs attorney within twenty (20) days after the service of this summons,
exclusive of the day of service (or within 30 days after the 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 appear
or answer, judgment will be taken against you by default for the relief demanded in the complaint.
DATED: April 2 1 , 2021
Atto neys for. e Plaintiff,
Costello, Cooney & Fearon, PLLC
Office and Post Office Address
211 West Jefferson Street
Syracuse, NY 13202
Telephone: (315) 422-1152
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TO: MELINDA BURDICK BOWE
124 Naples Road
Asheville, North Carolina 28804-1254
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STATE OF NEW YORK
SUPREME COURT COUNTY OF ONONDAGA
COSTELLO, COONEY & FEARON, PLLC, Index No.
Plaintiff,
-VSÂ COMPLAINT
MELINDA BURDICK BOWE,
Defendant.
The Plaintiff, Costello, Cooney & Fearon, PLLC, by and through the undersigned,
complaining of the Defendant, Melinda Burdick Bowe, states, alleges and shows to the Court as
follows:
The Parties
1. At all times hereinafter mentioned, the Plaintiff, Costello, Cooney & Fearon, PLLC
("CC&F") was and is a professional limited liability company organized under the laws of the
State of New York, with a principal place of business at 2 1 1 West Jefferson Street, Syracuse, New
York.
2. Upon information and belief, Defendant is an attorney admitted to practice law in
the State of New York with a primary residence at 1 2 4 Naples Road, Asheville, North Carolina.
3. Upon further information and belief, prior to November 17, 2020, Defendant
resided at 102 Morgan Lane, Oneida, New York. Thereafter, Defendant relocated to Asheville,
North Carolina.
4. Upon further information and belief, Defendant has and continues to derive
substantial income from the practice of law within the State of New York.
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Jurisdiction and Venue
5. This Court has jurisdiction and venue over this action based upon CC&F' s place of
business and the parties' transaction of business within the State of New York, which is the situs
of the contracts.
Facts Relevant to All Causes of Action
6. Effective March 17, 2017, Defendant entered into an Operating Agreement with
the other members of CC&F and became a member.
7. Pursuant to the terms of the Operating Agreement, members (or "partners") of
CC&F are compensated as a function of CC&F' s profits according to the membership points
assigned to each partner biannually.
8. Each partner also maintains a "Capital Account". CC&F's day-to-day working
capital is and has always been provided by withholding from distribution to the members certain
amounts as the Executive Committee determines as necessary for operating expenses.
9. Since each member's compensation varies by the terms of. the Operating
Agreement, operating expenses and profits fluctuate throughout each particular fiscal year.
10. CC&F's accountants do not maintain a constant running balance sheet of members'
capital accounts. Instead, as the accounting firm closes the books for each fiscal year, it determines
the balance of each member's capital account, based upon profits and allocation to each member
pursuant to the terms and provisions of the Operating Agreement. At the same time, the accounting
firm generates end-of-year tax documentation ( e. g . , K - 1 s ) for each CC&F member.
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11. Inasmuch as capital accounts are used for CC&F's operating expenses, and as a
matter of course and practice over many decades, CC&F does not allow members to maintain a
negative balance on capital accounts.
12. Instead, when it is determined that a capital account has a negative balance, in the
months immediately after CC&F's fiscal year (CC&F's fiscal year follows the calendar year),
members are required to immediately make arrangements to repay their negative capital account
balance and bring his or her balance(s) to zero. Remaining positive capital accounts for that year
are then paid out pursuant to the percentage an individual member's capital account compares to
the capital accounts of all members.
13 . On or about November 1 6 , 2020, Defendant sold her residence in New York State
and thereafter relocated to Asheville, North Carolina.
14. The following week, on November 23, 2020, Defendant withdrew as a partner of
CC&F and entered into an Of Counsel Agreement with CC&F to work as an independent
contractor effective December 1 , 2020.
15. Under the Of Counsel Agreement, Defendant was to be compensated at an hourly
rate of $ 1 0 0 . 0 0 per hour she billed individually on fees actually billed and received, plus twenty
percent (20%) of all fees generated by other CC&F timekeepers actually paid and received by
CC&F during the period of the Agreement for clients originated by Defendant. Such monies were
to be paid to Defendant upon a quarterly request by Defendant.
16. At Defendant's request, CC&F agreed to provide her with a bi-monthly advance
draw against her earned compensation under the Of Counsel Agreement.
17. At the end of each quarter, CC&F would determine actual compensation due to
Defendant, and then subtract out any advanced draw payments provided to Defendant. Defendant
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24. Inasmuch as Defendant was no longer a member, she was not entitled to any of the
aforesaid 2021 member advances. Thus, Defendant improperly received $40,230.00 to which she
was not entitled.
25. Upon realizing that the aforesaid 2021 advance distributions had been mistakenly
made to Defendant, due demand was made by CC&F for the return, repayment or reimbursement,
on terms to be agreed upon amicably, of such monies improperly received and retained by·
Defendant.
26. Despite repeated due requests, Defendant has wrongfully refused to return, repay
or reimburse CC&F for any portion of the improper distribution payments.
27. In addition to the foregoing, on or about March 17, 2021, upon closing CC&F's
books for 2020, CC&F's accountants determined Defendant had a negative capital account in the
amount of $ 2 , 6 4 0 . 1 2 .
28. Repeated due demand has been made to Defendant to remit payment of the negative
balance of her capital account, as a withdrawing member. Defendant has wrongfully refused to
remit any payment for her negative balance on her capital account.
29. By e-mail dated April 18, 2 0 2 1 , Defendant unilaterally terminated her Of Counsel
Agreement and discontinued any relationship between herself and CC&F. Defendant definitively
stated no monies for payment of her negative 2020 capital account or erroneous payments of the
2021 profit payments would be made.
30. All reasonable efforts by CC&F to avoid litigation have been rebuffed.
AS AND FOR A FIRST CAUSE OF ACTION FOR UNJUST ENRICHMENT
Improperly Received 2021 Partnership Advances
31. CC&F repeats and realleges the allegations contained in paragraphs enumerated
" 1 " through "3 O" as if more fully set forth and restated herein.
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32. Defendant, based upon the lack of accountant's determination of remaining
balances of 2020 members' capital accounts, erroneously received and retained advanced 2021
member distributions from CC&F on December 14, 2020, January 20, 2021, and March 9, 2021
in an amount totaling $40,230.00.
33. Defendant was not entitled to any the aforesaid distributions of CC&F 2021 profits
under the Operating Agreement, as she was no longer a member as of the end of 2020.
34. Defendant therefore erroneously received and wrongfully' retained the unearned
amount of $40,230.00.
35. Defendant has been unjustly enriched in such amount, to the detriment of CC&F
and its current members.
36. CC&F hereby demands judgment against Defendant in the amount of $40,230.00
based upon her unjust enrichment, together with costs and disbursements, statutory interest and
reasonable attorneys' fees.
AS AND FOR A SECOND CAUSE OF ACTION FOR UNJUST ENRICHMENT AND
BREACH OF OPERATING AGREEMENT
Negative Capital Account
3 7. CC&F repeats and realleges the allegations contained in paragraphs enumerated
" 1 " through "36" as if more fully set forth and restated herein.
38. Following calculation of CC&F's 2020 year-end figures on or about March 15,
2 0 2 1 , it became clear Defendant, as a withdrawing member, had a negative capital account balance
of $ 2 , 6 4 0 . 1 2 .
39. Pursuant to the Operating Agreement, upon determination that an existing or
withdrawing member has a negative capital account balance upon calculation of the year-end
profits, said member is required to bring such balance to zero as soon as practicable.
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40. Such practice of not allowing a negative capital account is a practice which has
persisted within CC&F for decades.
41. As a member of CC&F from 2 0 1 7 through 2020, Defendant was fully aware of said
custom and practice and was afforded information regarding other members' methods of
reimbursing CC&F to zero-out negative capital account balances during those years.
42. Despite due demand, Defendant has refused to remit any payment to CC&F, as a
withdrawing member, to reimburse the debt of her 2020 negative capital account.
43. Defendant has therefore breached the 2020 CC&F Operating Agreement and has
been unjustly enriched by retaining $2,640.12, which Defendant is obligated to reimburse.
44. CC&F demands further judgment against Defendant in the amount of $ 2 , 6 4 0 . 1 2 ,
together with its costs and disbursements, statutory interest and reasonable attorneys' fees.
AS AND FOR A THIRD CAUSE OF ACTION FOR CONVERSION
2021 Partnership Advances
45. CC&F repeats and realleges the allegations contained in paragraphs enumerated
" 1 " through "44" as if more fully set forth and restated herein.
46. On or about December 14, 2020, January 20, 2021 and March 9, 2021, Defendant
mistakenly received membership distributions in advance o f 2 0 2 1 payments totaling $ 4 0 , 2 3 0 . 1 2 .
47. Pursuant to the terms of the Operating Agreement and Defendant's Of Counsel
Agreement, she was not legally entitled to such distributions.
48. Defendant has recognized she had no right to any 2021 distributions.
49. Despite due demand, Defendant has refused to return any portion of the monies
improperly distributed to her in December 2020, January 2021 or March 2021.
50. Defendant has thus converted funds belonging to CC&F and its members in the
amount of $40,230.12.
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51. CC&F demands judgment against Defendant in the amount of $ 4 0 , 2 3 0 . 1 2 , together
with its costs and disbursements, statutory interest and its reasonable attorneys' fees.
AS AND FOR A FOURTH CAUSE OF ACTION FOR CONVERSION
CC&F Operating Funds
52. CC&F repeats and realleges the allegations contained in paragraphs enumerated
" 1 " through " 5 1 " as if more fully set forth and restated herein.
53. As set forth within the CC&F Operating Agreement, capital accounts are utilized
by CC&F for working capital and operating expenses.
54. Upon her withdrawal as a member of CC&F, Defendant carried a negative capital
account of $ 2 , 6 4 0 . 1 2
for 2020, as calculated in March 2021.
55. Defendant has not disputed she carried a negative capital account for 2020 upon
her withdrawal.
56. Nevertheless, despite due demand, Defendant has refused to reimburse CC&F for
its operating expenses and working capital expended on behalf of the firm and incurred during the
period when she was a member of CC&F.
57. Defendant is wrongfully in possession of $2,640.12 of funds properly belonging to
CC&F.
58. CC&F demands judgment against Defendant in the amount of $ 2 , 6 4 0 . 1 2 , together
with its costs and disbursements, statutory interest and its reasonable attorneys' fees.
AS AND FOR A FIFTH CAUSE OF ACTION
FOR BREACH OF FIDUCIARY DUTY
59. CC&F repeats and realleges the allegations contained in paragraphs enumerated
" 1 " through "5 8" as if more fully set forth and restated herein.
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60. As a former member of CC&F, Defendant owes a continuing fiduciary duty to
CC&F and its remaining members.
61. By failing or refusing to reimburse CC&F in the amount of her 2020 negative
capital account ($2,640.12), which sums were used by CC&F for its regular operating expenses
during Defendant's time as member, and by failing or refusing to return 2021 membership
advances erroneously paid to Defendant when she had no claim or entitlement to such distributions
of CC&F's 20201 profits, she has breached her fiduciary duty to CC&F and its remaining
members.
62. Defendant's withholding of her 2020 negative capital account funds and
erroneously retention of 2021 advanced distributions is a breach of Defendant's fiduciary duty to
CC&F and its members.
63. As a result of Defendant's intentional and willful breaches of her fiduciary duty to
CC&F and its members, CC&F has been damaged in the amount of $ 4 2 , 8 7 0 . 1 2 .
64. CC&F demands judgment against Defendant in the amount of said sum, together
with its costs and disbursements, statutory interest and reasonable attorneys' fees.
WHEREFORE, CC&F demands judgment against Defendant:
(a) In the amount of $40,230.00 for Defendant's unjust enrichment by receipt
of 2021 advances to which she was not entitled;
(b) In the amount of $2,640.12 for Defendant's unjust enrichment and breach
of the Operating Agreement based upon her failure to reimburse CC&F for
her negative capital account upon withdrawal as a member of CC&F;
(c) In the alternative, in the amount of $40,230.00 for Defendant's conversion
of 2021 advances wrongfully received and retained by Defendant;
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(d) In the alternative, in the amount of$2,640.12 for Defendant's conversion of
the amount of her negative capital account, wrongfully retained by
Defendant;
(e) In the alternative, in the amount of $ 4 2 , 8 7 0 . 1 2
for Defendant's breach of
her fiduciary duties to CC&F and its members through receipt and retention
of 2021 advances and the amount of her negative capital account;
(f) As a result of the foregoing, the costs and disbursements of this action,
statutory interest and CC&F's reasonable attorneys' fees and such other and
further relief as the Court may deem just and proper.
DATED: April 20, 2021
COST A , LC
- '
Attorneys for t e Plaintiff,
Costello, Cooney & Fearon, PLLC
Office and Post Office Address
211 West Jefferson Street
Syracuse, NY 13202
Telephone: (315) 422-1152
TO: MELINDA BURDICK BOWE
124 Naples Road
Asheville, North Carolina 28804-1254
-10Â
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STATE OF NEW YORK )
COUNTY OF ONONDAGA )ss.:
JOHN R. LANGEY, being duly sworn, deposes and says that deponent is Chief Financial
Officer of Costello, Cooney & Fearon, PLLC, that deponent has read the foregoing Complaint and
knows the contents thereof; that the same is true to the knowledge of the deponent, except as to
matters therein stated to be alleged upon information and belief, and that as to those matters,
. .
deponent believes them to be true. This verification is made by deponent because Costello,
Cooney & Fearon, PLLC is a professional limited liability company. Deponent is Chief Financial
Officer of said company. The grounds of deponent' s belief as to all matters not stated upon
deponent's own knowledge are as follows: Investigations which deponent has caused to be made
concerning the subject matter of this Complaint and information acquired by deponent in the
course of deponents duties as Chief Financial Officer of said company and from the books and
papers of said corporation.
R.
j61N
LANGEY
Subscribed and sworn to before me
this �:c-21.
2zfi..
Notary Public
PAUL G. FERRARA
otary Public, State of New York
'at%aimsein~non@aga counsy
No. o2FE608689° %a2..
commission Expires Jan.27,
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