New York Attorney Malpractice Blog

New York Attorney Malpractice Blog

Once in a While Courts Incorrectly Find For Plaintiff in a Legal Malpractice Case

Posted in Legal Malpractice Cases

Generally speaking, we find that Courts favor attorneys in legal malpractice settings.  Once in a while the opposite is true, and as always, the Appellate Division reviews these decisions and corrects any mistakes.

Jorge v Hector Atilio Marichal, P.C. 2016 NY Slip Op 04911  Decided on June 22, 2016
Appellate Division, Second Department discusses a case in which Supreme Court granted summary judgment to Plaintiff only to reverse.

“To sustain a cause of action alleging legal malpractice, a plaintiff must prove that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the attorney’s breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (see Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 49-50; Lieberman v Green, _____ AD3d _____, 2016 NY Slip Op 03717 [2d Dept 2016]). “Proximate cause” in the context of legal malpractice means that the plaintiff would have succeeded on the merits of the underlying action or that the plaintiff would not have sustained actual and ascertainable damages but for the attorney’s negligence (see Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d at 50).

Here, the defendant represented the plaintiff in the plaintiff’s unsuccessful attempt to purchase shares in a cooperative apartment. The plaintiff contends that the defendant committed malpractice by failing to give timely notice of the plaintiff’s intention to cancel the contract, and that the defendant’s failure to give such notice resulted in the loss of the plaintiff’s down payment and other damages.

The plaintiff failed to establish his prima facie entitlement to judgment as a matter of law, as the evidence he submitted in support of his motion demonstrated the existence of triable issues of fact as to whether he had complied with the provisions of the contract under which he would have had the right to cancel the contract (see Humbert v Allen, 89 AD3d 804, 806-807). Accordingly, the plaintiff failed to establish, prima facie, that any negligence by the defendant proximately caused his damages. Thus, the plaintiff’s motion for summary judgment on the complaint should have been denied, without regard to the sufficiency of the defendant’s opposition [*2]papers (see Lauinger v Surf’s Out at Kismet, LLC, 134 AD3d 681, 682).”

The Counterclaim Was Very Late, But Still has Some Power

Posted in Uncategorized

Plaintiff law firm sues for unpaid fees. Knowingly, they wait more than three years after the end of the relationship to do so.  Client files a legal malpractice counterclaim.  Is it too late?  The answer is “kinda.”

Balanoff v Doscher  2016 NY Slip Op 04896  Decided on June 22, 2016  Appellate Division, Second Department reminds us that even a late counterclaim can serve as an offset to any recovery by plaintiff.

“The defendant retained the plaintiff to provide legal services, but subsequently discharged him. The defendant allegedly failed to pay legal fees due and owing to the plaintiff. The plaintiff commenced this action to recover the unpaid fees. The defendant asserted counterclaims alleging legal malpractice, breach of fiduciary duty, breach of contract, and disgorgement.

The Supreme Court erred in granting that branch of the plaintiff’s motion which was to dismiss the counterclaim alleging legal malpractice, to the extent that counterclaim seeks to offset any award of legal fees to the plaintiff. Pursuant to CPLR 214(6), the statute of limitations for a cause of action to recover damages for legal malpractice is three years. The statute of limitations begins to run when the cause of action accrues (see CPLR 203[a]). The defendant did not assert his counterclaim alleging legal malpractice until after the statute of limitations had expired.

However, pursuant to CPLR 203(d), the defendant is entitled to seek equitable recoupment in a counterclaim. That statute provides, “[a] defense or counterclaim is interposed when a pleading containing it is served. A defense or counterclaim is not barred if it was not barred at the time the claims asserted in the complaint were interposed, except that if the defense or counterclaim arose from the transactions, occurrences, or series of transactions or occurrences, upon which a claim asserted in the complaint depends, it is not barred to the extent of the demand in the complaint notwithstanding that it was barred at the time the claims asserted in the complaint [*2]were interposed” (CPLR 203[d] [emphasis added]).

Under CPLR 203(d), claims and defenses that arise out of the same transaction as a claim asserted in the complaint are not barred by the statute of limitations, even though an independent action by the defendant might have been time-barred at the time the action was commenced. This provision allows a defendant to assert an otherwise untimely claim which arose out of the same transactions alleged in the complaint, but only as a shield for recoupment purposes, and does not permit the defendant to obtain affirmative relief (see Carlson v Zimmerman, 63 AD3d 772; Harrington v Gage, 43 AD3d 1393; DeMille v DeMille, 5 AD3d 428). The defendant’s counterclaim alleging legal malpractice relates to the plaintiff’s performance under the same retainer agreement pursuant to which the plaintiff would recover, and therefore this counterclaim falls within the permissive ambit of CPLR 203(d) (see United States Fd. & Guar. Co. v Delmar Dev. Partners, LLC, 22 AD3d 1017; Enrico & Sons Contr. v Bridgemarket Assoc., 252 AD2d 429). However, the counterclaim is permitted only to the extent that it seeks to offset any award of legal fees to the plaintiff and not to the extent that it seeks affirmative relief.”

No Harm, No Foul in Judiciary Law 487 World

Posted in Legal Malpractice Cases

A frequent sports simile is “no harm-no foul” which means that even if you are caught doing something wrong, if no one is harmed, it will be overlooked.  The same is true both in legal malpractice and in violations of Judiciary Law § 487.  In legal mal, if there is no “but for” (the mistake did not affect the outcome), then no recovery.  In Judiciary Law § 487. if there are no damages from the deceit, then no case.

In Gumarova v Law Offs. of Paul A. Boronow, P.C.  2015 NY Slip Op 05155 [129 AD3d 911]
June 17, 2015  Appellate Division, Second Department we see one example.  “Judiciary Law § 487 provides that an attorney who “[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party” is guilty of a misdemeanor, and “forfeits to the party injured treble damages, to be recovered in a civil action.” “Since Judiciary Law § 487 authorizes an award of damages only to ‘the party injured,’ an injury to the plaintiff resulting from the alleged deceitful conduct of the defendant attorney is an essential element of a cause of action based on a violation of that statute” (Rozen v Russ & Russ, P.C., 76 AD3d 965, 968 [2010]).

Here, the Supreme Court properly granted that branch of the defendants’ motion which was pursuant to CPLR 3211 (a) (7) to dismiss the cause of action alleging a violation of Judiciary Law § 487. The cause of action alleging a violation of Judiciary Law § 487 fails to sufficiently allege that the plaintiff suffered an injury proximately caused by any alleged deceit or collusion on the part of the defendants, and no such injury can reasonably be inferred from the allegations in the complaint (see Bohn v 176 W. 87th St. Owners Corp., 106 AD3d 598, 600 [2013]; Rozen v Russ & Russ, P.C., 76 AD3d at 968). Chambers, J.P., Hall, Cohen and Miller, JJ., concur.”

When And How The Statute of Limitations Defense is Engaged

Posted in Legal Malpractice Cases

In Meredith v Siben & Siben, LLP 2015 NY Slip Op 06120 [130 AD3d 791] July 15, 2015
Appellate Division, Second Department defendants waited until late in the case to move to dismiss on the statute of limitations.  Why?  Perhaps some evidence had to be obtained, or perhaps it was an oversight.  Result?  The statute of limitations may be asserted late in the game.

“Initially, contrary to the plaintiff’s contention, the defendant did not waive its statute of limitations defense, asserted in its answer, by failing to make a pre-answer motion to dismiss (see Rich v Lefkovits, 56 NY2d 276 [1982]). Rather, a statute of limitations defense may be asserted after joinder of issue in a motion for summary judgment pursuant to CPLR 3212 (see Rich v Lefkovits, 56 NY2d at 282). Although the defendant’s motion was made pursuant to CPLR 3211 (a) (5), the parties clearly charted a summary judgment course by submitting extensive documentary evidence and factual affidavits laying bare their proof (see One Monroe, LLC v City of New York, 89 AD3d 812, 813 [2011]; Tendler v Bais Knesses of New Hempstead, Inc., 52 AD3d 500, 502 [2008]; Harris v Hallberg, 36 AD3d 857, 858-859 [2007]; O’Dette v Guzzardi, 204 AD2d 291, 292 [1994]; see also Schultz v Estate of Sloan, 20 AD3d 520 [2005]; Kavoukian v Kaletta, 294 AD2d 646, 646-647 [2002]). Thus, the defendant’s motion is properly treated as a motion for summary judgment dismissing the complaint as time-barred.

Further, the Supreme Court properly concluded that the plaintiff’s legal malpractice cause of action is time-barred. The defendant met its prima facie burden of demonstrating that the action was commenced more than three years after the alleged malpractice occurred (see Farage v Ehrenberg, 124 AD3d 159, 164 [2014]; Fleyshman v Suckle & Schlesinger, PLLC, 91 AD3d 591, 592 [2012];Rupolo v Fish, 87 AD3d 684, 685 [2011]). In opposition, the plaintiff failed to raise a triable issue of fact as to whether the statute of limitations was tolled by continuous representation (see Farage v Ehrenberg, 124 AD3d at 165; Fleyshman v Suckle & Schlesinger, PLLC, 91 AD3d at 592). In that respect, the evidence demonstrated that after the plaintiff and her husband retained the defendant law firm to represent them in a personal injury action, the defendant law firm retained the law firm of Bauman & Kunkis, P.C. (hereinafter Bauman & Kunkis), to represent the plaintiff and her husband [*2]in that action, and thereafter had no contact with the plaintiff. All of the work on the case, from filing the pleadings to selecting a jury, was performed by Bauman & Kunkis. Before the case could be tried, it was dismissed based on willful default, and Bauman & Kunkis was substituted with a different law firm, which sought to restore the action. Even if the arrangement between the defendant and Bauman & Kunkis could be equated with joint representation, under the circumstances of this case, the defendant’s representation of the plaintiff would have terminated as of December 1, 2006, the date on which Bauman & Kunkis was substituted. Accordingly, the present legal malpractice cause of action, commenced on or about April 9, 2012, was untimely.”

A Simple Car Case Creates Chaos

Posted in Legal Malpractice Cases

This case illustrates the problem when a client hires a state-wide law firm which engages in TV advertising and then watches the case bounce all over the state.  Cellino & Barnes, P.C. v Law Off. of Christopher J. Cassar, P.C.  2016 NY Slip Op 04823  Decided on June 17, 2016
Appellate Division, Fourth Department is the story of hiring a law firm to handle a car case in Suffolk County only to see another case pop up between law firm 1 and law firm 2 in Buffalo.  There is not any greater distance between counties in New York than between Suffolk and Erie.

“This dispute between law firms over attorney’s fees arises from legal services provided to a client in a personal injury action against an allegedly negligent motorist. Over two years after she had retained plaintiff as counsel and nearly four months after plaintiff had commenced the personal injury action on her behalf in Supreme Court, Suffolk County, the client discharged plaintiff and retained defendants. Following substitution of counsel, plaintiff sent a letter to defendants asserting a charging lien pursuant to Judiciary Law § 475 to secure its interest in attorney’s fees. With defendants as counsel, the client subsequently commenced a legal malpractice action against plaintiff in Suffolk County alleging that plaintiff negligently failed to file a workers’ compensation claim for the client. Thereafter, defendants secured a settlement in the client’s personal injury action. Defendants then sought an order within that action directing that a portion of the settlement funds be held in escrow while the validity of the charging lien was resolved and that the remainder of the settlement funds be released to the client. Two days later, plaintiff commenced the instant action against defendants in Supreme Court, Erie County, i.e., the county in which plaintiff’s principal place of business is located, alleging in the first cause of action that it is entitled to attorney’s fees related to the settlement on a quantum meruit basis, and further alleging in the second and third causes of action that defendants engaged in frivolous and fraudulent conduct in commencing the legal malpractice action. On the same day, but after the instant action was commenced in Erie County, Supreme Court, Suffolk County, issued an order directing plaintiff to show cause why the order sought by defendants should not be granted. In appeal No.1, defendants appeal from an order denying their motion to dismiss the complaint in the instant action pursuant to CPLR 3211 and, in appeal No. 2, defendants appeal from an order denying their motion to transfer venue to Suffolk County.”

“We agree with defendants in appeal No. 1 that the court erred in failing to grant the motion to dismiss with respect to the second and third causes of action for failure to state a cause of action pursuant to CPLR 3211 (a) (7). We therefore modify the order in appeal No. 1 accordingly. To the extent that such is asserted in those causes of action, we note that New York does not recognize a separate cause of action to impose sanctions for frivolous conduct pursuant to 22 NYCRR 130—1.1 (see Young v Crosby, 87 AD3d 1308, 1309). To the extent that the second and third causes of action assert a cause of action for fraud, we conclude that plaintiff failed to allege the essential elements of such a cause of action (see Robertson v Wells, 95 AD3d [*2]862, 864).

Defendants’ contention in appeal No. 1 that the court should have dismissed the first cause of action for failure to state a cause of action is not properly before us because they did not seek dismissal of that cause of action on that ground in their motion (see Ciesinski v Town of Aurora, 202 AD2d 984, 985). We reject defendants’ further contention in appeal No. 1 that the court abused its discretion in denying their motion to dismiss the first cause of action pursuant to CPLR 3211 (a) (4). That provision “vests a court with broad discretion in considering whether to dismiss an action on the ground that another action is pending between the same parties on the same cause of action” (Whitney v Whitney, 57 NY2d 731, 732). “While complete identity of parties is not a necessity for dismissal under CPLR 3211 (a) (4) . . . , there must at least be a substantial’ identity of parties which generally is present when at least one plaintiff and one defendant is common in each action’ ” (Proietto v Donohue, 189 AD2d 807, 807-808; see Forget v Raymer, 65 AD2d 953, 954). Here, in the underlying personal injury action, the parties are the client and the motorist. The parties in the instant action, however, are plaintiff and defendants. There are thus no common parties to either action nor the requisite substantial identity of parties (see Winters v Dowdall, 63 AD3d 650, 651; Credit-Based Asset Servicing & Securitization v Grimmer, 299 AD2d 887, 887; Blank v Schafrann, 167 AD2d 745, 746; see generally Proietto, 189 AD2d at 808). Further, although we agree with the dissent that defendants were not required to commence a separate action to determine and enforce a charging lien pursuant to Judiciary Law § 475 (see Westfall v County of Erie, 281 AD2d 979, 980), we conclude that it does not follow that the court abused its broad discretion in refusing to dismiss the action properly commenced by plaintiff in Erie County before similar relief was sought within a pending action between different parties in Suffolk County (see generally Whitney, 57 NY2d at 732; Forget, 65 AD2d at 954).”

In Pari Delicto and Dismissal of Claims

Posted in Uncategorized

Was the wrongdoer a rogue or a trusted insider?  Should the professional have deduced that there was wrongful conduct which damaged the corporation?  If it was not discovered is there malpractice?

Stokoe v Marcum & Kliegman LLP  2016 NY Slip Op 00587 [135 AD3d 645]  January 28, 2016
Appellate Division, First Department answers some of these questions in an accountant malpractice setting.

“In this accounting malpractice action alleging that defendants failed to uncover fraudulent activity by plaintiffs’ insolvents’ investment manager, the motion court correctly declined to apply the doctrine of in pari delicto to bar the action; contrary to defendants’ understanding of the order on appeal, the doctrine is applicable to accounting malpractice claims (see Kirschner v KPMG LLP, 15 NY3d 446 [2010]).

The allegations by these plaintiffs in another action and in a Securities and Exchange Commission complaint, did not constitute documentary evidence conclusively demonstrating that the investment manager, as agent of the funds in liquidation, engaged in wrongful conduct that was not completely adverse to the interests of the funds (Concord Capital Mgt., LLC v Bank of America., N.A., 102 AD3d 406 [1st Dept 2013], lv denied 21 NY3d 851 [2013]). The pleading addressed in the dismissal motion alleged that the malefactors acted in the interest of the wronged entity as well as in their own personal interest, and is distinguishable from defendants’ attempt on the instant pre-answer dismissal motion to refute the allegations here with those in other pleadings. Moreover, the other pleading by the same plaintiffs is not clearly a conclusive admission. We note that New York requires complete adversity in order to fall within the exception to the imputation rule of the in pari delicto doctrine, and that New York law governs here based on the choice of law provision in the parties’ engagement letters.”

The Court of Appeals Sees A Question that the Appellate Division Did Not

Posted in Legal Malpractice Cases

The statute of limitations in legal malpractice is three years, with no “discovery” rule.  This harsh cut-off is ameliorated by the principle of continuous representation in which the statute of limitations is tolled while representation continues with a “continuing relationship of trust and confidence” and the joint understanding that more work is required and is to be performed.  In litigative work the grand scheme can be visualized as a case proceeds; in transactional work there may be long gaps between episodes of the continuing representation.  So it is in Red Zone LLC v Cadwalader, Wickersham & Taft LLP  2016 NY Slip Op 04249  Decided on June 2, 2016 where the Court of Appeals saw questions that the Appellate Division did not divine.

“The order of the Appellate Division should be modified, with costs, by denying plaintiff’s motion for summary judgment and reinstating defendant’s affirmative defenses of the statute of limitations and comparative negligence and, as so modified, affirmed.

Viewing the evidence in the light most favorable to defendant as the non-movant (see generally Vega v Restani Constr. Corp., 18 NY3d 499, 503 [2012]; Ortiz v Varsity Holdings, LLC, 18 NY3d 335, 339 [2011]), material triable questions of fact exist regarding whether defendant failed to exercise the ordinary reasonable skill and knowledge commonly possessed by members of the legal profession (see Dombrowski v Bulson, 19 NY3d 347, 350 [2012]). While a party may not create a feigned issue of fact to defeat summary judgment (see S.J. Capelin Assoc. v Globe Mfg. Corp., 34 NY2d 338, 341 [1974]), contrary to plaintiff’s assertion here, the affidavit of the attorney who represented plaintiff did not flatly contradict his prior deposition testimony. Therefore, the affidavit should have been considered in opposition to plaintiff’s motion.

Similarly, plaintiff did not meet its burden of demonstrating that defendant’s statute of limitations defense fails as a matter of law. Specifically, triable questions of fact exist regarding whether the statute of limitations was tolled by the continuous representation doctrine in light of: the significant gap in time between the alleged malpractice and the later communications between the parties; the changed nature of the alleged legal representation of plaintiff by defendant; the absence of any clear delineation of the period of such representation; and defendant’s submission of affidavits disclaiming any mutual understanding of legal representation after 2005 (see generally Grace v Law, 24 NY3d 203, 212 [2014]).”

Attorney-Client Privilege in the Age of Emails

Posted in Legal Malpractice Cases

Deep Woods Holdings LLC v Pryor Cashman LLP  2016 NY Slip Op 31077(U)  June 8, 2016  Supreme Court, New York County  Docket Number: 652886/2015  Judge: Saliann Scarpulla discusses the attorney-client privilege in the setting of joint representation.  This case is about the alleged failure to make a stock option call, and the loss of a large amount of money.

“In this action for legal malpractice and breach of fiduciary duty, plaintiff Deep Woods Holdings LLC (“Deep Woods”) moves to compel defendants Pryor Cashman LLP and Pincus Raice to produce certain portions of their client files for David Lichtenstein (“Lichtenstein”) and Park Avenue Bank that were withheld on the assertion of attorney/client privilege. This action arises out of the failure to exercise a call option originally held by Lichtenstein to purchase shares in Park A venue Bank from Savings Deposit Insurance Fund for the Republic of Turkey (“SDIF”). In 2005, Lichtenstein sought to exercise the call option, but SDIF refused to transfer the shares to him. After SDIF refused to transfer the shares, Lichtenstein and Donald Glascoff(“Glascoff’), the chairman of Park Avenue Bank, determined that a new entity should be created- Deep Woods – to litigate the enforcement of the call option. The defendants Pryor Cashman and Raice served as counsel to Lichtenstein and Park A venue Bank, and assisted them in creating Deep Woods and transferring the call option to the new entity. Thereafter, Deep Woods became a client of the defendants as well. Deep Woods’ original members, according to the defendants, were Lichtenstein, Glascoff, and Charles Antonucci, a former officer and director of Park Avenue Bank.   ”

“In this action, Deep Woods contends that defendants committed legal malpractice by failing timely to exercise the call option and by failing properly to litigate the timeliness issue in the SDIF litigation. 1 Deep Woods further claims that the defendants breached their fiduciary duties by failing to disclose facts underlying the SDIF litigation, including the fact that Raice failed to exercise the call option in a timely manner, which allegedly created a conflict of interest between the defendants and Deep Woods. ”

“The attorney-client privilege applies to confidential communications between attorneys and their clients made in the course of professional employment. CPLR §4503(a). For the privilege to apply, the attorney-client communication “must be made for the purpose of facilitating the rendition of legal advice or services·, in the course of a professional relationship.” Rossi v. Blue Cross & Blue Shield a/Greater New York, 73 N.Y.2d 588, 593 (1989). The parties do not dispute that the documents sought by Deep Woods from the defendants’ client files for Lichtenstein and Park Avenue Bank are attorney-client communications. Deep Woods contends, however, that these documents are not protected by attorney-client privilege because Lichtenstein, Park Avenue Bank, and Deep Woods were jointly represented by the defendants from 2007 to 2015. ”

“The attorney-client privilege also does not apply to the documents at issue because Lichtenstein and Park Avenue Bank waived the privilege by making selective disclosure of their attorney-client communications concerning the SDIF litigation to Deep Woods. Selective disclosure of privileged material “is not permitted as a party may not rely on the protection of the privilege regarding damaging communications while disclosing other self-serving communications.” Vil!. Bd. o/Vill. of Pleasantville v. Rattner, 130 A.D.2d 654, 655 (2d Dep’t 1987); Corrieri v. Schwartz & Fang, P.C., 106 A.D.3d 644, 645 (1st Dep’t 2013). Lichtenstein and Park Avenue Bank’s disclosure of their attorney-client communications during the SDIF litigation waived privilege as to other communications concerning the same subject matter. “

Tried the Claim and Lost; Trying Again

Posted in Legal Malpractice Cases

Pieroni v Phillips Lytle LLP  2016 NY Slip Op 04618  Decided on June 10, 2016  Appellate Division, Fourth Department is an example of the “try-try-try again” school of litiagation.  The case arises from a car dealership gone bad against a big upstate corporate law firm which, in this case, represented Ford.

“§ 487 action against two individual attorneys and their law firm in connection with their representation of Ford Motor Credit Company LLC, formerly known as Ford Motor Credit Company (Ford Credit), in an underlying action (2007 action) commenced by Ford Credit. In the 2007 action, Ford Credit sought damages for breach of a floor plan and security agreement with an automobile dealership. In connection with the 2007 action, Ford Credit obtained an order of seizure with respect to certain vehicles. Ford Credit later amended the complaint therein to add as defendants the plaintiffs in this action, who were the purported buyers or participants in the transfer of those vehicles. In 2010, plaintiffs commenced an action (2010 action) against Ford Credit alleging causes of action for intentional infliction of economic harm, conversion, fraud, and tortious interference with contractual relations. Plaintiffs alleged that Ford Credit knew of the bona fide claims of plaintiffs to the vehicles and submitted false statements in support of its order to show cause to seize the vehicles. Plaintiffs later moved for leave to amend the complaint to add defendants to the 2010 action and to add a cause of action pursuant to Judiciary Law § 487. Supreme Court (Bannister, J.) denied the motion with respect to the individual defendants, and denied the motion with respect to the law firm without prejudice for reconsideration in the event plaintiffs submitted additional proof, as set forth in the court’s bench decision. Plaintiffs did not submit any additional proof, and their subsequent motion for leave to reargue was denied. Although plaintiffs appealed, that appeal was not decided before both the 2007 action and the 2010 action were transferred to federal court.”

“In March 2013, plaintiffs commenced the present action. The complaint is essentially identical to the proposed amended complaint they submitted in support of their motion for leave to amend the complaint in the 2010 action. Supreme Court (Caruso, J.) granted defendants’ motion to dismiss the complaint, and we now affirm.

We agree with defendants that this action is barred by collateral estoppel, and thus that[*2]the court properly granted their motion. The doctrine of collateral estoppel has two requirements: “[f]irst, the identical issue necessarily must have been decided in the prior action and be decisive of the present action and second, the party to be precluded from relitigating the issue must have had a full and fair opportunity to contest the prior determination” (Kaufman v Eli Lilly & Co., 65 NY2d 449, 455; see Ackman v Haberer, 111 AD3d 1378, 1379). The proposed amended complaint in the 2010 action and the complaint in the present action raise identical issues, and the court decided those issues when it denied the motion for leave to amend.

It is well settled that ” [l]eave to amend a pleading should be freely granted in the absence of prejudice to the nonmoving party where the amendment is not patently lacking in merit’ ” (Holst v Liberatore, 105 AD3d 1374, 1374; see Tag Mech. Sys., Inc. v V.I.P. Structures, Inc., 63 AD3d 1504, 1505). A review of the decision of the court (Bannister, J.) shows that the court denied the motion because “the proposed amendment was palpably insufficient or patently devoid of merit” (Holst, 105 AD3d at 1374); the motion was not denied based on technical pleading defects (see Jericho Group Ltd. v Midtown Dev., L.P., 67 AD3d 431, 431, lv denied 14 NY3d 712; cf. Hodge v Hotel Empls. & Rest. Empls. Union Local 100 of AFL-CIO, 269 AD2d 330, 330-331). In addition, although the motion was denied without prejudice with respect to the law firm, plaintiffs never submitted any additional proof in their subsequent motion for leave to reargue. We reject plaintiffs’ further contention that they did not have a full and fair opportunity to contest the determination.”

Legal Malpractice and Contribution

Posted in Legal Malpractice Cases

Continuing with a further look at s a legal malpractice decision in which the law firm settled the case, yet the matter continues on.  Here, in  QBE Ins. Corp. v Maloof, Lebowitz, Connahan & Oleske, P.C.  2015 NY Slip Op 32113(U)  May 13, 2015  Supreme Court, New York County
Docket Number: 600412/2010  Judge: Carol R. Edmead we see the aftermath of a legal malpractice settlement amidst a squabble between insurers and their administrators and take a look at contribution after a claim for indemnification was denied.

Last week we saw that there was no situation in which QBE could claim indemnification from Maloof.  How about contribution?

“CPLR 1401, “Claim for contribution,” provides, in relevant part, that “two or more persons who are subject to liability for damages for the same personal injury, injury to property or wrongful death, may claim contribution among them whether or not an action has been brought or a judgment has been rendered against the person from whom contribution is sought.” The Court of Appeals has held that the legislative history of this statue makes clear “[t]hat purely economic loss resulting from a breach of contract does not constitute ‘injury to property’ within the meaning of New York’s contribution statute” (Board of Educ. of Hudson City School Dist. v Sargent, Webster, Crenshaw & Folley, 71 NY 2 d 21, 2 6 [ 19 8 7] ) . Courts have routinely upheld this principle (see e.g. Structure Tone, Inc. v Universal Servs. Group, Ltd., 87 AD3d 909, 911 [1st Dept 2011]; Children’s Corner Learning Ctr. v A. Miranda Contr. Corp., 64 AD3d 318, 324 [1st Dept 2009]). plain that “contribution is unavailable where . In short, it is . the underlying contractual claims seek purely economic damages” (Kleinberg v 516 W. 19th LLC, 121 AD3d 459, 460 [1st Dept 2014]). ”

General Obligations Law § 15-108 may intervene to end the discussion.

“As QBE and Maloof have settled, and QBE has stipulated to discontinue against Maloof in July 2014, Maloof argues that CSB’s contribution claim must be dismissed under General Obligations Law § 15-108 (b), which provides, in relevant part, that “release given in good faith by the injured person to one tortfeasor relieves him from liability to any other person for contribution.” CSB concedes that its contribution claim does not survive the settlement of QBE’s claims against Maloof. As such, the branch of Maloof’s motion seeking dismissal of QBE’s cross claim for contribution is also granted. “

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