A Legal Malpractice Case Lost on Technical Grounds

It is unfortunate to see a legal malpractice case be dismissed on technical grounds.  Here,in Cullin v Spiess  2014 NY Slip Op 07975  Decided on November 19, 2014   the Appellate Division, Second Department found that Plaintiff's summary judgment motion lacked an affidavit of a person with knowledge, and that there was insufficient opposition to Defendant's motion.

"The plaintiff failed to demonstrate her prima facie entitlement to judgment as a matter of law on the complaint. The plaintiff failed to submit, with her moving papers, an affidavit by a person with knowledge of the facts (see CPLR 3212[b]; Currie v Wilhouski, 93 AD3d 816, 817; Menzel v Plotnick, 202 AD2d 558, 559). The affirmation of the plaintiff's attorney, who did not have personal knowledge of the facts, was without probative value, and the remaining exhibits were insufficient to support the motion for summary judgment (see Zuckerman v City of New York, 49 NY2d 557, 563; Rivers v Birnbaum, 102 AD3d 26; 1911 Richmond Ave. Assoc., LLC v G.L.G. Capital, LLC, 60 AD3d 1021, 1022; Menzel v Plotnick, 202 AD2d at 559).

In contrast, the defendant demonstrated his prima facie entitlement to judgment as a matter of law dismissing the fourth, sixth, eighth, and twelfth causes of action alleging that he violated Judiciary Law § 487, by establishing that there was no evidence of his alleged intent to deceive the plaintiff in connection with the settlement (see Dupree v Voorhees, 102 AD3d 912; [*2]Boglia v Greenberg, 63 AD3d 973, 975; Pui Sang Lai v Shuk Yim Lau, 50 AD3d 758; Knecht v Tusa, 15 AD3d 626, 627). In opposition, the plaintiff failed to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324).

Accordingly, the Supreme Court properly denied the plaintiff's motion for summary judgment on the complaint and properly granted the defendant's cross motion for summary judgment dismissing the fourth, sixth, eighth, and twelfth causes of action."

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A Fee Claim, An Arbitration, A Lawsuit, A Counterclaim for Legal Malpractice

 One piece of advice repeated endlessly at CLEs is that attorney fee cases created legal malpractice counterclaims.  In Jeffrey M. Rosenblum, P.C. v Casano  2014 NY Slip Op 51629(U)  Decided on November 19, 2014  District Court Of Nassau County, First District  Fairgrieve, J. we see a sterling example of this problem.  Attorney lost attorney fee arbitration and started a trial de novo, once again seeking the fees.  This time there was a counterclaim, which Plaintiff fails to get dismissed.

"In her Verified Answer with Counterclaims (Plaintiff's Exhibit B), defendant sets forth [*2]and classifies each of the five (5) counterclaims raised therein. They are designated as Breach of Contract (First and Second Counterclaims), Unjust Enrichment (Third Counterclaim), Declaratory Judgment (Fourth Counterclaim), and Attorney Malpractice (Fifth Counterclaim).

Initially, plaintiff's counsel presses two arguments for dismissal of the first four counterclaims. First, she argues that pursuant to CPLR 3211(a)(2), this court lacks subject matter jurisdiction because "the monetary jurisdictional limit of the District Court is $15,000," which these counterclaims exceed (Affirmation in Support, ¶ 22). To the contrary, however, this court "shall have jurisdiction of counterclaims ... for money only, without regard to amount" (UDCA §208[b]). Accordingly, plaintiff's argument characterizing the amount sought by defendant's counterclaims as exceeding statutory authority, is rejected. Therefore, its requests for dismissal on this basis are denied.

The third counterclaim is clearly marked as one seeking relief from plaintiff's unjust enrichment. " The theory of unjust enrichment lies as a quasi-contract claim'" and contemplates "an obligation imposed by equity to prevent injustice, in the absence of an actual agreement between the parties (IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d 132, 142, 879 NYS2d 355, 907 NE2d 268 [2009], quoting Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 572, 807 NYS2d 583, 841 NE2d 742 [2005])" (Georgia Malone & Co., Inc. v Rieder, 19 NY3d 511, 516 [2012]). "The essential inquiry in any action for unjust enrichment or restitution is whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered" (Greenfield M.D., P.C. v Long Beach Imaging Holdings, LLC, 114 AD3d 888, 889, citing Paramount Film Distribution Corporation v State of New York, 30 NY2d 415, 421 [1972] [remainder of citation omitted]).

"Although a claim for unjust enrichment involves equitable considerations', it is essentially a claim for a money judgment which is covered within the jurisdictional boundaries contemplated for the Civil Court. A court, of course, has the inherent right to take equitable considerations into account (Dobbs, Remedies, § 2.1, p 28), and since they are merely reflections of fairness, no court, unless expressly limited by a statute, should deprive itself of the capacity to take them into account where the suit involves money damages only (Fiona Press, Inc. v Hewig & Marvic, Inc., 122 Misc 2d 680-681 [Civil Court, NY County 1984], emphasis added). Notably, "[t]he [New York City Civil Court Act ("NYCCCA")] is the original of the uniform acts. The second of them, also effective on September 1, 1963, is the Uniform District Court Act [*3](UDCA), which was modeled on and is in many instances identical to the NYCCCA" ( David D. Siegel, General Commentary on the Lower Court Acts (NYCCCA, UDCA, UCCA and UJCA) and Their Background, McKinney's Cons Laws of NY, Book 29A, p 9 [1989 ed])."

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Legal Malpractice and A Storybook Divorce

Reading between the lines,Manus v Flamm  2013 NY Slip Op 07683 [111 AD3d 525]  November 19, 2013  Appellate Division, First Department sounds like a 1930's romantic divorce movie.  Husband marries glamorous starlet, gives her beaucoup jewelery and then, The Divorce.  Starlet is caught between Husband and another woman.  His mother?  Anyway...

The complaint alleges that defendant committed legal malpractice while representing plaintiff in a replevin action brought against her in October 1998 by nonparty Family M. Foundation, Ltd., a Cayman Islands corporation formed by the late Allen Manus, plaintiff's former husband.

The first cause of action, which alleges that defendant was negligent in failing to assert certain defenses or move to dismiss the complaint in the replevin action, is belied by the seventh and eighth affirmative defenses, which assert that the loan agreement imposed no personal liability on plaintiff.

The second cause of action alleges that plaintiff "felt compelled" to sign the stipulation of settlement in the replevin action, which converted a $1,000,000 obligation from the corporation to her into a $400,000 obligation from her to the corporation. However, plaintiff's obligation arose in the context of the loan agreement she executed, not the stipulation of settlement. The stipulation did not impose personal liability on plaintiff for the debt created under the loan agreement; it merely directed that her shares in her cooperative apartment be substituted for her jewelry as collateral for the loan.

The third cause of action alleges that, but for defendant's insistence that the corporation's president and sole director, Elizabeth (Libby) Manus, had to execute the corporation's release of plaintiff's obligations to it and that Allen Manus's execution of the release would not be sufficient, Allen Manus would have signed the release and plaintiff would have been free of her obligations under the stipulation. However, this Court has found that the action by the corporation to enforce the stipulation upon plaintiff's default was properly maintained under Libby Manus's authority (see Family M. Found. Ltd. v Manus, 71 AD3d 598 [1st Dept 2010], lv dismissed 15 NY3d 819 [2010]). Even assuming that Allen Manus, who held a power of [*2]attorney for the corporation, was authorized to release plaintiff's obligations to the corporation, Libby Manus's refusal to sign the release would have revoked his authority (see Zaubler v Picone, 100 AD2d 620, 621 [2d Dept 1984]). Concur—Andrias, J.P., Friedman, Richter, Manzanet-Daniels and Feinman, JJ.

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False Answers on an Information Subpoena? Not Judiciary Law 487

Courts reserve the application of Judiciary Law 487, the Attorney Deceit Law to very few cases.  Put another way, courts are loathe to apply it.  In Kuruwa v 130E. 18 Owners Corp. 2014 NY Slip Op 06880 Decided on October 9, 2014  the Appellate Division, First Department merely sweeps the question away in a very short opinion.

"The IAS court correctly found that respondent bank's perfected, secured interest in the subject property has priority over petitioners' unsecured money judgment (see Chrysler Credit Corp. v Simchuk , 258 AD2d 349 [1st Dept 1999]). The bank's false answers to the information subpoena, in which it denied having a mortgage on the Meyers respondents' apartment, did not prejudice petitioners; nor do they point to any detrimental reliance upon the statements (cf. Leber-Krebs, Inc. v Capitol Records , 779 F2d 895, 896 [2d Cir 1985]).

The court also correctly held that there could be no judicial sale of the cooperative apartment. The Meyers defendants had purchased the co-op before they were married, and they concede that they originally owned it as tenants in common (see EPTL 6-2.2). They refinanced the purchase money mortgage after they were married, and the bank required a name change on a newly issued stock certificate and proprietary lease. The change in title, made by the cooperative corporation, after the parties were married effectively changed ownership from tenants in common to tenants by the entirety.

The legal arguments made by the bank's counsel and the Meyerses' counsel do not give rise to claims under Judiciary Law § 487."

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It's Almost Always the "But For" Part

Client buys some gas stations and believes that it was unfairly kept from sharing in some condemnation awards on the property that mostly (or all) went to seller.  Client sues attorneys for not obtaining the unpaid condemnation awards.  Defendants claim it was strategy.  Result?

In Leon Petroleum, LLC v Carl S. Levine & Assoc., P.C.  2014 NY Slip Op 07632  Decided on November 12, 2014  the Appellate Division, Second Department determined that this was strategy and not a simple mistake.  The standard?

"To establish a cause of action alleging legal malpractice, a plaintiff must show that the attorney failed to exercise the care, skill, and diligence commonly possessed and exercised by a member of the legal profession, and that such negligence was a proximate cause of the actual damages sustained (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442; Frederick v Meighan, 75 AD3d 528, 531). Under the attorney judgment rule, "selection of one among several reasonable courses of action does not constitute malpractice" (Rosner v Paley, 65 NY2d 736, 738; see Ackerman v Kesselman, 100 AD3d 577; Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 847). "To establish entitlement to the protection of the attorney judgment rule, an attorney must offer a reasonable strategic explanation' for the alleged negligence" (Ackerman v Kesselman, 100 AD3d at 579, quoting Pillard v Goodman, 82 AD3d 541, 542). "To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer's negligence" (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442; see Blanco v Polanco, 116 AD3d 892, 894).

Here, the defendants established their entitlement to judgment as a matter of law by demonstrating that the failure to draft clear, specific, and unambiguous language in an agreement for the purchase of assets, so as to provide that the subject assets included certain unpaid condemnation awards, was a reasonable strategic decision taken to avoid an increase in the purchase price, and that the drafting of more specific language would not have resulted in the inclusion of the condemnation awards in the sale without an increase in the purchase price. In opposition, the plaintiffs failed to raise a triable issue of fact with respect to either element of the legal malpractice cause of action (see Zuckerman v City of New York, 49 NY2d 557, 562). "A mere hope . . . that somehow or other on cross examination credibility of a witness . . . can be put in issue is not sufficient to resist a motion for summary judgment'" (Trails W. v Wolff, 32 NY2d 207, 221, quoting Hurley v Northwest Publ. Inc., 273 F Supp 967, 974 [D Minn], affd 398 F2d 346 [8th Cir]; see Angeles v Goldhirsch, 268 AD2d 217). Accordingly, the Supreme Court properly granted the defendants' motion for summary judgment dismissing the complaint (see Rodriguez v Lipsig, Shapey, Manus & Moverman, P.C., 81 AD3d 551, 552; Noone v Stieglitz, 59 AD3d 505, 507)."

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Attorney Fees Upon Termination and Judiciary Law 487

Here is the story of an attorney who is retained to commence an underinsured motorist arbitration against an auto insurance carrier.  Apparently he makes the claim for arbitration, becomes suspended from the practice of law, (later disbarred) and watches while another attorney settles the claim for the clients.  is he due a fee, and did the other attorney violate JL 487?

As to the JL 487 claim, there was no violation.  We cannot tell anything about the JL 487 claim because the AD's entire decision on this issue is:  "The Cassar defendants also showed that the plaintiff does not have a cause of action against them pursuant to Judiciary Law § 487 (see Judiciary Law § 487)."

As to attorney fees after termination, some explanation was given:

"In addition, the court properly determined that the plaintiff was not entitled to any attorney's fees from the Pogue defendants. A client has the right to discharge his or her attorney at any time (see Campagnola v Mulholland, Minion & Roe, 76 NY2d 38, 43; Schultz v Hughes, 109 AD3d 895, 896; Doviak v Finkelstein & Partners, LLP, 90 AD3d 696, 698). While an attorney who is discharged without cause before the completion of services may recover the reasonable value of his or her services in quantum meruit, an attorney who is discharged for cause is not entitled to any compensation or lien (see Campagnola v Mulholland, Minion & Roe, 76 NY2d at 44; Doviak v Finkelstein & Partners, LLP, 90 AD3d at 699; Callaghan v Callaghan, 48 AD3d 500, 500-501). Here, the court held a hearing pursuant to 22 NYCRR 603.13(b) with respect to the plaintiff's cross motion for attorney's fees. The court determined that the plaintiff was properly discharged for cause, and, therefore, was not entitled to recover in quantum meruit. The plaintiff does not argue that the evidence at the hearing was insufficient to support the court's determination. Thus, the evidence submitted by the Pogue defendants disproved the essential allegation of the complaint, i.e., that the plaintiff was not properly discharged for cause, and established that the plaintiff does not have a cause of action to recover attorney's fees from the Pogue defendants (see generally Campagnola v Mulholland, Minion & Roe, 76 NY2d 38; Schultz v Hughes, 109 AD3d 895; Doviak v Finkelstein & Partners, LLP, 90 AD3d 696). Therefore, the Supreme Court properly dismissed the complaint insofar as asserted against the Pogue defendants."


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Collateral Estoppel and Judiciary Law 487

A theme that is becoming somewhat popular is that of a Judiciary law 487 claim when counsel moves to be relieved.  Often, the attorney uses stock phrases (refusal to pay expenses, conflict over strategy, inability to communicate) while the plaintiff urges that the attorney is making this up in order to be rid of a troublesome case.  Attorneys have been held in Judiciary Law 487 cases on the basis that the client was actually up to date on payments. 

Here, in Brady v Friedlander  2014 NY Slip Op 06677  Decided on October 2, 2014  Appellate Division, First Department we see that Civil Court's decision to allow the attorney to withdraw guts the Judiciary law 487 claim. 

"On or about September 30, 2009, defendant moved in Civil Court, New York County (Samuels, J.), to withdraw as counsel in the underlying nonpayment proceedings (see IGS Realty Co., L.P. v James Catering, Inc., 99 AD3d 528 [1st Dept 2012]). Over plaintiffs' objection, the court granted the motion. Plaintiffs did not appeal from Civil Court's order. With respect to the cause of action for a violation of Judiciary Law § 487, the instant complaint alleges that defendant provided fabricated grounds in support of his motion, to wit, a conflict with plaintiffs regarding strategy and a lack of trust in defendant's representation, in order to conceal the true reason, which was an unfounded belief that plaintiffs could or would not pay future legal bills. However, while the parties' communications as quoted in the complaint reflect that defendant was remarkably concerned with billing, which may have informed his decision to withdraw, the complaint also reflects that plaintiff Brady expressed disagreement with defendant as to strategy and questioned defendant's honesty and competency, thus providing support for defendant's stated grounds for the motion (cf. Palmieri v Biggiani, 108 AD3d 604 [2d Dept 2013]).

In granting the motion, over plaintiffs' objection, Civil Court implicitly determined that defendant had shown "just cause" to be relieved. That issue may not be re-litigated via the instant misrepresentation claim (cf. Hass & Gottlieb v Sook Hi Lee, 11 AD3d 230 [1st Dept 2004]).


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Judiciary Law 487 and Matrimonial Allegations

One may not sue the opponent's attorney for legal malpractice, except for a very few and limited number of exceptions, yet the temptation to do so must be very high in matrimonial cases.  One tactic in custody proceedings is the false accusation of misconduct.  The wrongfully accused spouse would love to sue the other spouse's attorney.  Here, in Tenore v Kantrowitz, Goldhamer & Graifman, P.C2014 NY Slip Op 06811  Decided on October 8, 2014  Appellate Division, Second Department the case failed.

"The plaintiff commenced this action against the defendant law firm, which represented his former wife in a matrimonial action against him, alleging a violation of Judiciary Law § 487, fraud, and abuse of process. The plaintiff alleged, inter alia, that the defendant included in the underlying matrimonial action a cause of action to recover damages for assault that was without any factual basis, in an attempt to extract additional money from him in the course of that litigation. The defendant moved for summary judgment dismissing the complaint in the instant action, and the plaintiff cross-moved for leave to amend that complaint to add causes of action to recover damages for a violation of General Business Law § 349, prima facie tort, and malicious prosecution. The Supreme Court granted the defendant's motion and denied the plaintiff's cross motion.

The Supreme Court properly granted that branch of the defendant's motion which was for summary judgment dismissing the cause of action alleging a violation of Judiciary Law § 487. The defendant demonstrated its prima facie entitlement to judgment as a matter of law by establishing its lack of intent to deceive (see Dupree v Voorhees, 102 AD3d 912, 913). In opposition, the plaintiff failed to raise a triable issue of fact."

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Some But Not All of the Damages Remain in Play

Evedentaily, defendants made a well-intentioned but insufficient motion for summary judgment.  In this wrongful eviction case, the landlord turned to its attorney and made a legal malpractice claim.  Defendants moved to dismiss, but in Morad Assoc., LLC v Jay Sung Lee 2013 NY Slip Op 08204 [112 AD3d 463] December 10, 2013 Appellate Division, First Department  they could not convince the AD that all damages flowed from the landlord and none from the attorney.

"The evidence submitted by defendant attorney, while showing that he may not be liable for a large measure of the damages assessed against plaintiff, failed to establish as a matter of law that his alleged negligence was not the cause of at least some of those damages. In addition to the damage to the property of plaintiff's tenant, plaintiff was also assessed damages for wrongful eviction for which defendant may be held liable. We find no basis for holding defendant liable for any damages plaintiff incurred when its agents destroyed the tenant's property. Concur—Tom, J.P., Friedman, Acosta and Moskowitz, JJ."

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Duplication of Causes of Action and Election of Remedies

The typical triumvirate of claims in a legal malpractice setting is Legal Malpractice, Breach of Contract and Breach of Fiduciary Duty.  Defendants almost always move to dismiss the second and third claims on the basis that they duplicate the legal malpractice claim and must be dismissed as "duplicitive."

in Chowaiki & Co. Fine Art Ltd. v Lacher  2014 NY Slip Op 01992 [115 AD3d 600]  March 25, 2014
Appellate Division, First Department  we see the First Department noting that plaintiffs need not "elect their remedies."   As might be surmised, the two principals, duplication and election of remedies stand in stark contract to each other.

"In this action arising from defendant attorney and his law firm's representation of plaintiffs in an action brought against them by a former employee, plaintiffs allege that they were excessively billed for services rendered, and that they were harassed, threatened and coerced into paying the excessive and overinflated fees. The motion court properly dismissed plaintiffs' claim for breach of fiduciary duty as duplicative of the breach of contract claim, since the claims are premised upon the same facts and seek identical damages, return of the excessive fees paid (see CMMF, LLC v J.P. Morgan Inv. Mgt. Inc., 78 AD3d 562 [1st Dept 2010]; cf. Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1 [1st Dept 2008]). Although plaintiffs sufficiently allege an independent duty owed to them, arising from the attorney-client relationship, the fraud claim is similarly redundant of the breach of contract claim, since it also seeks the same damages (see Coppola v Applied Elec. Corp., 288 AD2d 41, 42 [1st Dept 2001]; Makastchian v Oxford Health Plans, 270 AD2d 25, 27 [1st Dept 2000]).

However, we find that, as a dispute exists as to the application of the retainer agreement as to defendant, plaintiffs need not elect their remedies and may pursue a quasi-contractual claim for unjust enrichment, as an alternative claim (see Wilmoth v Sandor, 259 AD2d 252, 254 [1st Dept 1999]).


Plaintiffs' claims of excessive billing and related conduct, which actions are not alleged to have adversely affected their claims or defenses in the underlying action, do not state a claim for legal malpractice (see e.g. AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007])."

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