Olshan Frome Wolosky LLP v. The Committee to Restore NYMOX Shareholder Value…

Background

Olshan Frome Wolosky LLP sued The Committee to Restore Nymox Shareholder Value Inc., M. Richard Cutler, Randall J. Lanham, and Christopher R. Riley for more than $700,000 in unpaid legal fees and related charges. Olshan alleged that it provided legal services concerning a proxy campaign and related litigation involving Nymox Pharmaceutical Corp., and that the defendants did not pay the amounts invoiced. Olshan asserted claims for breach of contract, unjust enrichment, quantum meruit, and account stated.

Cutler, who was representing himself, originally asserted a counterclaim against Olshan and claims against Lori Marks-Esterman and Adrienne Ward for legal malpractice and breach of fiduciary duty. He also asserted a claim against Riley for fraud and intentional material misrepresentation. Cutler later voluntarily dismissed those claims. The opinion states that the malpractice and fiduciary-duty claims were dismissed without prejudice, while it separately identifies the crossclaim against Riley as voluntarily dismissed without prejudice.

Cutler then asked for permission to reassert the malpractice and fiduciary-duty claims against Olshan, to join Esterman and Ward as defendants to those claims, and to file a third-party complaint against Ascella Health LLC, Oldham Global LLP, Bill Oldham, and Mario Patone. A third-party complaint is a pleading asserting that nonparties may be responsible for all or part of a defendant’s liability to the original plaintiff. Cutler alleged that the Ascella Defendants were responsible for funding costs and fees connected to the Nymox-related work and could be responsible for amounts claimed by Olshan.

Legal standards

The court applied Federal Rule of Civil Procedure 15(a)(2), which generally requires courts to freely allow an amended pleading when fairness requires. Leave to amend may be denied for substantial reasons such as undue delay, prejudice, bad faith, or futility. Futility means that the proposed claims would not survive a motion to dismiss.

For adding Esterman and Ward to the counterclaims, the court considered Rules 13(h), 19, 20, and 21. Those rules govern adding people to existing counterclaims and permit or require joinder when the claims arise from the same events and involve common legal or factual questions, subject to fairness, efficiency, and jurisdictional requirements.

For the Ascella Defendants, the court applied Rule 14(a). That rule allows a defending party, with the court’s permission when required, to bring in a nonparty that may be liable for all or part of the original plaintiff’s claim. The court considered delay, prejudice, trial complications, and whether the proposed third-party claims appeared legally supportable.

Rulings

The court denied Cutler’s request to reassert the legal-malpractice and breach-of-fiduciary-duty counterclaims against Olshan. It found undue delay because Cutler had voluntarily dismissed the original claims eight months earlier, had not identified new information obtained during that period, and waited until after discovery had closed to seek permission to reassert them. The court also found prejudice because the claims would require substantial additional discovery and would significantly delay Olshan’s claims. Because those grounds resolved the request, the court did not decide whether the proposed claims were futile or brought in bad faith.

The court also denied Cutler’s request to join Esterman and Ward as counterclaim-defendants. The ruling treated this request together with the denied request to reassert the counterclaims against Olshan.

The court granted Cutler’s request to file a third-party complaint against Ascella Health LLC, Oldham Global LLP, Bill Oldham, and Mario Patone. Although the request was late, the court found no indication that Cutler deliberately or carelessly delayed it. The court also found that the proposed claims related directly to Olshan’s claims and that limited additional discovery would cause minimal prejudice. Because Cutler had not provided the Ascella Defendants’ domiciles, the permission was subject to ordinary jurisdictional requirements. The court ordered Cutler to file the third-party complaint by April 4, 2025 and reminded him that he was responsible for timely serving each third-party defendant. The court directed the Clerk to close the motion.