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We’re all familiar with the adage “If you do what you love, you’ll never work a day in your life.” Don Catalano, President and CEO of iOptimize Realty®, has really taken this message to heart: he’s seamlessly combined his passion for real estate, photography, and piloting airplanes into a rewarding career at the helm of one of Long Island’s most innovative companies.

A longtime client and friend of Campolo, Middleton & McCormick, Catalano recently invited Managing Partner Joe Campolo to the Commack headquarters of iOptimize Realty® for lunch and a demo of Catalano’s REoptimizer® software, a real estate optimization tool and commercial lease management software. Over sandwiches from the Sexy Salad, these business leaders and military veterans discussed what sets iOptimize apart and how their military service has shaped their leadership style.

Many companies offer commercial real estate services, but iOptimize is unique in exclusively representing corporate tenants. The concept was born when Catalano saw a gap in the market: corporate tenants, needing to renegotiate leases or look for new space only every five years or so, often assign the task to their CFOs. But these time-pressured CFOs, no matter how brilliant they may be, simply lack the experience to compete with real estate brokers who live and breathe the market year-round. To level the playing field, Catalano created iOptimize to serve as the corporate tenant’s expert and shoulder the due diligence burdens of finding and negotiating for space. Most brokers work for landlords, Catalano explains, making his approach incredibly different.

To start the process, Catalano spends time getting to know his clients, learning not just where they’re interested in leasing but what else they value – do they want buildings with amenities? Do they need hotels and restaurants nearby? iOptimize then serves as a fact-finder, presenting clients with dozens more options than traditional brokers who might be bound by exclusivity arrangements with landlords. This approach encourages landlords to compete for the tenant’s business, often saving the tenant up to 30 percent. But landlords benefit, too: iOptimize represents only creditworthy tenants, so landlords breathe easier when they see iOptimize at the table.

As a young man, Catalano joined the military seeking a challenge. He ultimately served in the U.S. Army Special Forces, undergoing high-altitude low-opening (HALO) parachuting training and scuba training. Catalano was elite within the elite, completing arduous training few could finish. Catalano says that the experience taught him that “you can have fear but you have to push through it and overcome it” – a lesson he now applies to business.

Perhaps it’s this extraordinary background that pushed Catalano to make iOptimize even more innovative and serve clients even better by translating his love of flying and photography into an additional client benefit. An accomplished pilot, Catalano flies his plane over potential sites and takes stunning aerial shots, offering clients a bird’s-eye view of potential properties. These photos give clients the invaluable opportunity to see everything they can’t readily see from the ground, such as structural systems, the condition of a roof, and environmental issues. Catalano’s photos of buildings representing some of the largest deals on Long Island line the walls of his office including Allstate, DealerTrack, and Sbarro. (iOptimize works all over the country, and Catalano is arguably the most licensed real estate professional in the industry.)

In his quest to deliver perfection in the client experience – another lesson he attributes to his military service – Catalano has also worked with his team to develop REoptimizer®, proprietary software to aid in the fact-finding process. The web-based program is a global system in multiple currencies designed for corporate users, allowing side-by-side comparisons in the market. Explaining that real estate is often underfunded and understaffed in the corporate setting, Catalano says that REoptimizer® was designed not only to save clients money but also to help them better utilize space, renegotiate leases, and find the ideal space based on their unique preferences. The program also helps clients manage existing leases by keeping track of deadlines and documents in one place, saving significant administrative burden. By putting the client in control of the process, REoptimizer® is a natural extension of the iOptimize way of servicing clients.

Learn more about this forward-thinking Long Island company at http://www.ioptimizerealty.com/ and check out REoptimizer® at http://www.reoptimizer.com/. You can also view a clip from Joe Campolo’s recent CMM Live interview with Don Catalano at https://www.youtube.com/watch?v=Kdor7LeGLPs.

 

 

CMM client and friend Don Catalano, President and CEO of iOptimize Realty®, recently welcomed CMM Managing Partner Joe Campolo to his beautifully designed headquarters on Vanderbilt Motor Parkway in Commack. Next photo: Catalano served in the U.S. Army Special Forces, undergoing high-altitude military parachuting (HALO) training as well as scuba training. Photos and keepsakes from his service line the shelves of his office.

 

A shelf of trophies, awards, and memorabilia in Catalano’s office. Next photo: Model airplanes on display. Catalano is an accomplished pilot who puts his flight skills to work for his clients, taking aerial shots of prospective properties to explore the location from all angles.

 

Catalano in his office. Next photo: These military veterans credit their service with shaping them into Long Island business leaders.

 

Catalano and colleagues welcomed Campolo to the office. Rich Boccard and Jason Brucella are responsible for iOptimize’s active social media presence as well as working with REoptimizer®, a real estate optimization tool and commercial lease management software that takes the pain out of real estate while saving customers money and time. Next photo: Catalano shows Campolo incredible aerial shots lining the walls of his office. Catalano combines his love of real estate, flight, and photography to give corporate clients a bird’s-eye view of commercial properties.

 

Aerial photograph of the headquarters of iOptimize Realty® in Commack. Next photo: iOptimize deal: Sbarro, Melville

 

iOptimize deals: Allstate in Garden City and Lake Success.

  

iOptimize deals: Dealertrack in Lake Success.

  

iOptimize deal: Festo in Mason, Ohio. Next photo: A view inside the sleek headquarters of iOptimize Realty®.

 

 

 

 

By Patrick McCormick

Attorney-client privilege is a bit of a misnomer. The name itself fails to convey the full breadth of communications protected (or not protected) by the privilege, one of the oldest common-law evidentiary privileges. The privilege applies to communications made “for the purpose of facilitating the rendition of legal advice or services, in the course of a professional relationship.” See, e.g., Spectrum Sys. Intl. Corp. v. Chemical Bank, 78 N.Y.2d 371, 377-378 (1991), quoting Rossi v. Blue Cross & Blue Shield of Greater N.Y., 73 N.Y.2d 588, 593 (1989). Indeed, not every communication is privileged – and determining whether the privilege applies is not always clear cut. For example, if a law firm has designated a particular attorney as their in-house counsel, and another attorney in the firm has an ethical question as it relates to a client, are communications between the two attorneys on the subject protected by the privilege?

In July 2016, the First Department, in Stock v. Schnader Harrison Segal & Lewis LLP, 142 A.D.3d 210 (1st Dep’t 2016), became the first appellate court (and so far the only) in New York State to recognize intra-firm privilege applying to certain communications between an attorney and his or her firm’s in-house counsel. In Stock, the Defendant law firm previously represented the Plaintiff in the negotiation of a separation agreement from Plaintiff’s former employer. Unbeknownst to Plaintiff, his vested stock options, allegedly worth more than $5 million, expired as a result of the negotiation. Plaintiff subsequently commenced a federal lawsuit and an arbitration proceeding against his former employer to recover the value of the lost options. Again, Plaintiff hired the Defendant firm to represent him in the federal litigation and arbitration. However, the Plaintiff’s former employer took the position that Plaintiff’s woes were caused by the Defendant firm’s representation in negotiating the separation agreement. To prove this, the former employer sought to call a Defendant firm lawyer as a fact witness at the arbitration. This progression prompted the Defendant firm to seek legal advice from its in-house counsel regarding ethical obligations under the lawyer-as-witness rule.

After the arbitration was decided in favor of the former employer, Plaintiff sued the Defendant firm for malpractice, claiming that it failed to advise him that his separation would significantly accelerate the expiration date of his stock options. During discovery, Plaintiff sought 24 documents concerning communications Defendant firm’s attorneys had with other lawyers at the firm, most notably including the firm’s in-house counsel. The firm withheld the documents, arguing they were protected from disclosure under attorney-client privilege. However, the trial court disagreed, holding that the documents were discoverable under the “fiduciary exception” to the attorney-client privilege. According to the trial court, the firm, as Plaintiff’s legal representative, was a fiduciary with special obligations to Plaintiff, and thus Plaintiff “ha[d] a right to disclosure from his fiduciaries of communications that directly correlate to his claims of self-dealing and conflict of interest.” Stock v. Schnader Harrison Segal & Lewis LLP, No. 651250/2013, 2014 WL 6879923 at *2 (Sup. Ct. N.Y. Co. Dec. 8, 2014).

On appeal, the First Department unanimously reversed, holding that the fiduciary exception did not apply and that the communications at issue were privileged. Key to the Court’s analysis was determining the “real client” – whether the communications seeking legal advice were sought to protect the individual interests of the attorneys or to guide the attorneys in rendering service to their clients. The Court reasoned that “the purpose of the consultation . . . was to ensure that the attorneys and the firm understood and adhered to their ethical obligations as legal professionals.” Stock, 35 N.Y.S.3d at 223. Despite the primary function of the attorney-client privilege being to facilitate candid discussion between attorneys and their clients, the Court reassured the legal profession that “[t]he protection afforded by the attorney-client privilege encourages lawyers to seek advice concerning their ethical responsibilities and potential liabilities in a timely manner so as to minimize any damage to the client from any conflict or error.” Accordingly, the Court found that “the attorneys and the firm, not plaintiff, were the ‘real clients’” during the consultation. Id. Thus the communications were privileged.

In a similar context involving in-house corporate counsel, it is important to remember that the “real client” is the corporation itself, not its directors, officers, or shareholders, and challenges arise when determining whether communications between a corporation’s in-house counsel and employees regarding both business and legal advice are privileged. The seminal New York Court of Appeals case Rossi v. Blue Cross and Blue Shield of Greater N.Y., 73 N.Y.2d 588, is instructive on this issue. In Rossi, the issue presented to the Court was whether an internal memorandum from a corporate staff attorney to a corporate officer was protected by attorney-client privilege. The contents of the memorandum referenced communications concerning both legal advice and nonlegal business communications. The mixed legal-business nature of the memorandum provided the Court an opportunity to opine on the contours of the attorney-client privilege in context of intra-firm communications. The Court noted that communications with in-house counsel often “blur the line between legal and non-legal communications.” Id. at 593. The Court acknowledged that no bright-line rule exists to distinguish protected legal communications from unprotected business or personal communications. Most importantly, the Court specified that a fact intensive inquiry is necessary to determine whether the nature of the communication is predominantly of a legal character. Applying that rule, the Court held that the content and context of the memorandum was to facilitate legal advice and privilege was not compromised merely because it also referred to certain nonlegal matter.

The attorney-client privilege has developed into a robust doctrine. Do not be fooled into thinking about it in a one-dimensional way. It protects intra-firm communications by attorneys seeking ethical advice, as well as corporate communications that are predominantly legal in character. Of course, not all intra-firm communications are privileged, but that is a small trade-off for the vast protection attorney-client privilege affords.

Patrick McCormick is a partner and the chair of the appellate practice group at Campolo, Middleton & McCormick, LLP, a premier law firm with offices in Ronkonkoma and Bridgehampton. He also serves as General Counsel to the firm and is the Dean of the Suffolk Academy of Law. Richard A. DeMaio is an associate at CMM, where he focuses on litigation, appeals, and the intersection of law and technology. They can be reached at pmccormick@cmmllp.com and rdemaio@cmmllp.com.

One of the more common “business tort” causes of action we see in the world of commercial litigation is a claim for tortious interference with a contract. Often a competing company, knowing that its competitor has a contract with a certain customer or employees, will intentionally and improperly interfere with that contract by causing the customer or employee to breach the contract, thus resulting in harm to the competing business.  This interference usually consists of improperly soliciting the customer or employee away from the competing business, making disparaging and/or defamatory comments about the competing business, or even fraudulently deceiving the customer or employee to induce a breach of the contract with the competing business.

When alleging a tortious interference claim, it is critical to include sufficient allegations in the Complaint that support the necessary elements of the claim itself. It is not enough to merely recite the elements without any specific factual allegations detailing the improper conduct of the company/individuals who allegedly committed the tortious interference.  A recent decision from Justice Garguilo in the Suffolk County Commercial Division provides a perfect example of a deficient tortious interference claim resulting in dismissal of the Complaint.

In Airweld, Inc. v. Airgas U.S.A., LLC d/b/a/ Airgas, Inc., Plaintiff Airweld, Inc. alleged that Defendant Airgas U.S.A., LLC tortiously interfered with contracts Airweld had with two of its customers. The Complaint alleges that Airgas “attempted to solicit” the two customers by providing the same products that Airweld was providing to these customers under the separate contracts Airweld had with the customers. Even after Airweld sent cease and desist letters concerning the two customers and the existence of the contracts for each customer, Airgas continued to solicit business from them, and Airweld stopped doing business with each customer due to the interference by Airgas.

The Court noted that to succeed on a claim for tortious interference with contractual relations, “a plaintiff must show the existence of a valid contract between the plaintiff and a third-party, and the defendant’s knowledge of such contract, the defendant’s intentional and improper procurement of the breach of such contract by the third-party, and damages.” See White Plains Coat & Apron Co., Inc. v. Cintas Corp., 8 N.Y.3d 422 (2007).

The Court acknowledged that Airweld had sufficiently alleged the existence of a contract and Airgas’s knowledge of the contacts at issue. However, the Court dismissed the tortious interference claim, finding that the Complaint failed to provide any specifics as to the improper conduct Airgas engaged in to solicit the customers. Mere solicitation by itself is not sufficient to satisfy a tortious interference claim. Id. Furthermore, the Court held that it was unclear and unknown based on the allegations in the Complaint whether the two customers at issue actually breached their contracts with Airweld as a result of any actions by Airgas.  Given the very vague, conclusory allegations set forth in the Complaint, the Court dismissed the action.

As an aside and perhaps as a word of advice at the end of the decision, the Court noted that it was curious why Airweld did not simply pursue breach of contract actions against the two customers who were allegedly in violation of the terms of their contracts with Airweld. This certainly could have been an easier path to recovery, as the Court noted.

A key takeaway from Justice Garguilo’s decision in Airweld is the importance of taking the time before filing the Complaint to make sure you have the necessary facts to withstand a motion to dismiss. Although a Court is required to take allegations in a Complaint as true on a motion to dismiss, it is not enough merely to recite basic elements of a claim. Without at least some specifics, the action will be short-lived.