New York Attorney Malpractice Blog

New York Attorney Malpractice Blog

Both Motions Fail; One Side Rejoices More Than The Other

Posted in Legal Malpractice Cases

Ragunandan v Donado  2017 NY Slip Op 04306 [150 AD3d 1289]  May 31, 2017
Appellate Division, Second Department is a case in which both sides moved for summary judgment.  In Supreme Court, the attorney won.  On appeal, both lost.  Case continues; defendant is more unhappy than is plaintiff.

“Ordered that the order is modified, on the law, by deleting the provision thereof granting the motion of the defendant Marco A. Lozada for summary judgment dismissing the complaint insofar as asserted against him, and substituting therefor a provision denying the motion; as so modified, the order is affirmed, with costs to the plaintiff.

The plaintiff commenced this action to recover damages for legal malpractice against, among others, the defendant Marco A. Lozada (hereinafter the defendant), an attorney who represented her at a real estate closing. After discovery was completed, the defendant moved for summary judgment dismissing the complaint insofar as asserted against him. The plaintiff cross-moved for summary judgment on the complaint. The Supreme Court granted the defendant’s motion and denied the plaintiff’s cross motion.

To recover damages for legal malpractice, a plaintiff must establish, first, that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and, second, that the defendant’s failure was a proximate cause of the plaintiff’s damages (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]; Atiencia v Pinczewski, 148 AD3d 860 [2017]). In moving for summary judgment dismissing a complaint alleging legal malpractice, the defendant must establish, prima facie, the plaintiff’s inability to prove at least one of these elements (see Rojas v Paine, 125 AD3d 745, 746 [2015]). If the defendant satisfies that burden, the burden then shifts to the plaintiff to rebut the defendant’s prima facie showing (see Montero v Cohen, 104 AD3d 654, 655 [2013]; cf. Stukas v Streiter, 83 AD3d 18, 23-24 [2011]).

Here, the defendant’s motion papers addressed only the second element of a legal malpractice cause of action, contending that any deficiency in his skill and knowledge was not a [*2]proximate cause of the plaintiff’s damages. The defendant failed to establish, prima facie, the absence of proximate cause. The fact that another person may have taken advantage of the defendant’s allegedly deficient performance to cause damages to the plaintiff did not, under the circumstances of this case, establish, prima facie, that the defendant’s alleged deficiencies were not also a proximate cause of her damages (see Overseas Shipholding Group, Inc. v Proskauer Rose, LLP, 130 AD3d 415, 415 [2015]; Utica Cutlery Co. v Hiscock & Barclay, LLP, 109 AD3d 1161, 1162 [2013]). In light of the defendant’s failure to satisfy his prima facie burden on his motion for summary judgment, the Supreme Court should have denied the motion without regard to the sufficiency of the plaintiff’s opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Rojas v Paine, 125 AD3d at 746).

The Supreme Court, however, properly denied the plaintiff’s cross motion for summary judgment on the complaint. The plaintiff failed to establish, prima facie, that the defendant failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession (see Schottland v Brown Harris Stevens Brooklyn, LLC, 137 AD3d 995, 996-997 [2016]; Conklin v Owen, 72 AD3d 1006, 1007 [2010]; Eisenberger v Septimus, 44 AD3d 994, 995 [2007]). In light of the plaintiff’s failure to satisfy her prima facie burden, we need not consider the sufficiency of the defendant’s opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d at 853). Eng, P.J., Rivera, Balkin and Barros, JJ., concur. ”


“I Was Really Out Of It” Can Be A Valid Excuse

Posted in Legal Malpractice Cases

There are few really good excuses in life.  “The dog ate my ___” is one classic.  “Traffic” can serve as a reasonable excuse.  Temporary psychological inability to defend oneself does not seem like a good candidate, but in  Pierot v Leopold  2017 NY Slip Op 07154  Decided on October 11, 2017  Appellate Division, Second Department it succeeded.

“The plaintiffs commenced this action against their former attorney alleging legal malpractice, fraud, and breach of fiduciary duty. The plaintiffs alleged that the defendant, who represented them in the purchase of their home, committed malpractice by, among other things, failing to determine that the home had no access to a public road and was therefore landlocked. The defendant failed to answer the complaint, and the plaintiffs moved for leave to enter a default judgment. The Supreme Court granted the motion and, following an inquest, entered a judgment against the defendant in the total sum of $1,372,458.52, which represented the sum of the purchase price of the house and the cost of improvements the plaintiffs had made after the purchase, plus interest and costs. The defendant moved to vacate the judgment entered upon his default and for leave to serve a late answer, arguing that he had a reasonable excuse for his default and a potentially meritorious defense. The court granted the motion, and the plaintiffs appeal.”

“To prevail on a motion to vacate a judgment entered upon a default in appearing or answering the complaint, the defendant must demonstrate a reasonable excuse for the default and the existence of a potentially meritorious defense to the action (see CPLR 5015[a][1]; Codoner v Bobby’s Bus Co., Inc., 85 AD3d 843, 844; Westchester Med. Ctr. v Hartford Cas. Ins. Co., 58 AD3d 832, 832; Sound Shore Med. Ctr. v Lumbermens Mut. Cas. Co., 31 AD3d 743, 743). “Other factors which the court should consider include whether the default prejudiced the opposing party, whether it was willful or evinced an intent to abandon the litigation, and whether vacating the default would serve the strong public policy of resolving cases on their merits when possible” (Dimitriadis v Visiting Nurse Serv. of N.Y., 84 AD3d 1150, 1150-1151). Mental health issues during the relevant period, established by a doctor’s affidavit, may serve as a reasonable excuse sufficient to vacate a [*2]default (see National Union Fire Ins. Co. of Pittsburgh, Pa. v Diamond, 39 AD3d 360, 360 ; see also Loucks v Klimek, 108 AD3d 1037, 1038; Osman v Osman, 83 AD3d 1022, 1023-1024).

Here, the defendant demonstrated a reasonable excuse for his default through the affidavit of his treating psychologist, which established that his default was due to diagnosed psychological conditions that rendered him unable to defend himself in this action at the relevant time. He also demonstrated a potentially meritorious defense to the complaint by, inter alia, submitting evidence that the property was not and had never been landlocked. In light of the defendant’s showing and the strong policy favoring adjudication of cases on the merits, the Supreme Court providently exercised its discretion in granting the defendant’s motion to vacate his default and for leave to serve a late answer.”


Some Interesting Points on Continuous Representation

Posted in Uncategorized

An elderly couple sells some real estate and want to insulate the proceeds for estate planning purposes, specifically Medicare planning.  They have to make the transaction such that they keep the proceeds and shield them from a 5 year look-back review by Medicare.  As a reader of this blog, you surmise that something goes wrong.  Some years later they are told that the proceeds have not been shielded.  Is it too late to sue the attorneys?  In sum, yes.

Judge Freed, in Bonin v Wells, Jaworski & Liebman, LLP  2017 NY Slip Op 32097(U)
October 4, 2017  Supreme Court, New York County Docket Number: 153167/2016 tells us that the time has expired.
“The legal malpractice claim is not timely asserted. An action to recover for attorney malpractice is governed by a three-year statute of limitations, regardless of whether the underlying theory is based on contract or tort (McCoy v Feinman, 99 NY2d 295, 301 [2002]; see CPLR 214 [6]). The three-year limitations period accrues “when the malpractice is committed, not when the client discovers it” (Williamson v Price WaterhouseCoopers LLP, 9 NY3d 1, 7-8 [2007]). This is true even where the plaintiff is unaware of any malpractice, damages, or injury (McCoy v Feinman, 99 NY2d at 300- 301). For statute of limitations purposes, plaintiffs legal malpractice claim accrued no later than July 2008, when the Trust was fully funded. A legal malpractice claim accrues when the alleged injury to the client occurs, such as when the trust agreement was funded, regardless of the client’s awareness of the malpractice (Johnson v Proskauer Rose LLP, 129 AD3d 59, 67 [Pt Dept 2015]; Pace v Raisman & Assoc. Esqs., LLP, 95 AD3d 1185, 1187-1188 [2d Dept 2012]). Therefore, the legal malpractice claim should have been asserted no later than July 2011 for it to have been timely commenced. However, plaintiff commenced this action on April 13, 2016, almost five years after expiration of the limitations period. Contrary to plaintiffs argument, the continuous representation doctrine is not applicable here because, once the Trust was funded, the attorney/client relationship between the Bonins and defendants ended. ”

“To toll the legal malpractice limitations period on a theory of continuous representation, the plaintiff must establish that there existed a mutual understanding between the attorney and client of the need for further representation on the specific subject matter underlying the malpractice alleged; a clear indication of an ongoing, continuous, developing, and dependent relationship between them pertaining specifically to the representation from which the alleged malpractice stems, that is not sporadic or intermittent; and a continuing relationship of trust and confidence between the attorney and the client (Matter of Merker, 18 AD3d 332, 332-333 [1st Dept 2005]).”

“Plaintiff has failed to plead any facts that suggest the existence of a continuing attorney/client relationship between defendants and herself. After the funding of the Trust in July 2008, no contact regarding the trust agreement is alleged to have occurred between the Bonins and defendants, until the Trustee’s letter dated March 6, 2013, almost five years after the funding of the Trust and 11/i years after the expiration of the statutory limitations period. For purposes of the statute of limitations, an attorney/client relationship cannot be revived after the limitations period has expired (see Droz v Karl, 736 F Supp 2d at 527 [applying New York law]; Maurice W Pomfrey & Assoc., Ltd. v Hancock & Estabrook,50 AD3d 1531, 1533 [4th Dept 2008]). Therefore, the correspondence exchanged by the parties in 2013 does not constitute evidence of a continuing relationship, and cannot revive the relationship. Defendants’ reassurances that the Trust was properly created do not demonstrate the existence of a continuous representation. Repeated assurances by attorneys that they provided accurate advice and that they did nothing wrong do not constitute continuous representation, particularly where there exists no mutual understanding to maintain a professional relationship (Arnold v KPMG LLP, 543 F Supp 2d 230, 236 [SD NY 2008], affd334 Fed Appx 349 [2d Cir], cert denied 558 US 901 [2009] [applying New York law]).”

A Unique Cause of Action in a Legal Malpractice Setting

Posted in Legal Malpractice Cases

New, or unique causes of action rarely arise.  In Alrose Steinway, LLC v Jaspan Schlesinger, LLP 2017 NY Slip Op 32082(U) September 29, 2017  Supreme Court, New York County Docket Number: 151482/2017 we see a claim that failure to supervise a vastly experienced partner in an LLP  is negligence.  Supreme Court permits discovery on the issue, finding that it is both “interesting” and “unique.”

“In the complaint, p’laintiff alleges that on February 1, 2014, it entered a 10-year ground lease covering two properties in Astoria, Queens (the Premises). The lease contained an option to purchase the Premises for $11 million after February 1, 2023 (the Option), as well as a right of first refusal to match any third-party offer to purchase the Premises during the term of the lease (the ROFR). Any interim purchaser would purchase the Premises subject to the Option. On January 6, 2016, Allen Rosenberg, plaintiff’s principal, executed an amendment to the lease which voided the Option if plaintiff’s landlord sold the Premises to a third-party (the Amendment). Specifically, the Amendment states, “[t]enant’s option to purchase during the final lease year under Article XXX shall be void.” Plaintiff alleges that defendant Stephen P. Epstein, Esq., a real estate partner at defendant Jaspan Schlesinger, LLP, advised Mr. Rosenberg to sign the Amendment and told Mr. Rosenberg that the Amendment was for “housekeeping” purposes. In an November 17, 2015 email, Mr. Epstein writes, “[t]he attached shows the changes requested by [landlord]. The lease that was actually signed was the last version and I believe that is what we agreed to. However, this may be necessary for ‘shalom bayit.”‘ Plaintiff alleges that it relied on Mr. Epstein’s advice and, on January 6, 2016, executed the Amendment without reading it. On August 6, 2016, plaintiff exercised its ROFR and entered into a contract to purchase the Premises for $14.5 million. The purchase closed on November 1, 2016. Plaintiff opines that the Premises were worth $25 million on the date of the malpractice based on an unsolicited offer it received within months of the Amendment to purchase one of the two buildings for $11 million and its sale of the other building for $12.5 million, just one month after the November 2016 closing. ”

“In addition to malpractice, plaintiff asserts an interesting claim of failure to supervise in its third cause of action against defendants Jaspan Schlesinger LLP and Steven Schlesinger, the managing partner of the firm. There is no vicarious liability for a general partner in an LLP. New York Partnership Law§ 26 (b). Although plaintiff argues that Mr. Schlesinger is liable under New York Partnership Law§ 26 (c) (i), which provides that “each partner … shall be personally and fully liable and accountable for any negligent or wrongful act or misconduct committed by him or her or by any person under his or her direct supervision and control while rendering professional services on behalf of such registered limited liability partnership,” it is undisputed that Mr. Schlesinger never communicated with plaintiff nor supervised Mr. Epstein, another partner. Thus, this causes of action against Mr. Schlesinger are dismissed. Plaintiff also advances the argument that the absence of any supervisory structure of partners at the firm is malpractice under Partnership Law§ 26 (c) (i). It argues that the law firm, as a whole, has an obligation to make reasonable efforts to ensure that its partners are appropriately supervised. Under this theory, Mr. Epstein’s status as a partner and 39 years of experience is irrelevant. At this early stage, plaintiff may explore this unique theory against the firm alone. “


Problems Serving the Defendant? Look at “Good Cause” and “Interests of Justice”

Posted in Uncategorized

Wright v Kok-Min Kyan  2017 NY Slip Op 32057(U) September 28, 2017 Supreme Court, New York County Docket Number: 805475/2016 Judge: Eileen A. Rakower is a medical malpractice case that explains what to do when service of the summons and complaint has gone awry.

“Plaintiffs served the Summons with Notice upon Lenox Hill Hospital by service of process upon Ryann Cordaro (“Ms. Cordaro”) at 2000 Marcus Avenue, New Hyde Park, New York, on December 22, 2016. A process server’s affidavit constitutes prima facie evidence of proper service. (Matter of Nazarianv. Monaco Imports, Ltd., 255 A.D.2d 265 [1st Dept. 1998]). A defendant’s “sworn, nonconclusory denial of service” is sufficient to dispute the veracity or content of the process server’s affidavit. (NYCTL 1998-1 Trust v. Rabinowitz, 7A.D.3d 459 [1st Dept. 2004]). ”

“In her sworn affidavit, Ms. Cordero states that she is a Senior Executive Assistant in the Legal Department ofNorthwell Health. Ms. Cordero further states that she is “not an agent authorized to receive service on behalf of Lenox Hill Hospital, or any other hospital, nor [has she] ever been an employee of Lenox Hill Hospital.” Ms. Cordero states that the building located at 2000 Marcus Avenue, the location where service was made, is the address for the Northwell Health, and not Lenox Hill Hospital.

Plaintiffs do not challenge defendants’ claim that the service made upon Lenox Hill Hospital via delivery of the Summons with Notice to Ms. Cordero was defective. Instead, by way of cross motion, plaintiffs seek additional time pursuant to CPLR § 306-b to serve their pleading upon Lenox Hill Hospital. ”

“This Court may exercise its discretion to extend the 120-day period in CPLR §306-b to enable plaintiffs to properly serve Lenox Hill Hospital. CPLR §306-b provides that “[i]f service is not made upon a defendant within the [120-day period] provided in this section, the court, upon ~o~ion, shall dismiss the action without prejudice … or upon good cause shown or in the interest of justice, extend the time for service.”

A “good cause” extension requires a showing of reasonable diligence in trying to effect proper service upon a defendant. (Henneberry v. Borstein, 91 A.D.3d 493, 496 [1st Dep’t 2012]). Good cause has been found where “the plaintiffs failure to timely serve process is a result of circumstances beyond its control.” (Bumpus v. New York City Tr. Auth., 66 A.D.3d 26, 32 [1st Dep’t 2009]). The “good cause” extension, however, does notinclude conduct that is considered to be “law office failure.” (Henneberry, 91 A.D.3d at 496).

An extension “in the interest of justice” is broader and more flexible than a “good cause” extension and can include law office failures as long as there is no prejudice to the defendant. (Leader v. Maroney, Ponzini & Spencer, 97 N.Y.2d 95, 105 [2001] [“CPLR 306-b provides foran additional and broader standard, i.e., the ‘interest of justice,’ to accommodate late service that might be due to mistake, confusion or oversight, so long as there is no prejudice to the defendant”]). A court “may consider [plaintiffs] diligence, or lack thereof, along with any other relevant factor … , including expiration of the Statute of Limitations, the meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiffs request for the extension of time, and prejudice to defendant.” (Henneberry, 91 A.D.3d at 496, citing Leader, 97 N.Y.2d at 105-106). “

Suspended in Pennsylvania, Disbarred Here

Posted in Legal Malpractice Cases

This is a sordid story of an attorney gone wrong, seriously wrong.  Whether getting precluded while handling a legal malpractice case was the straw or not, a wake of devastation has been left in his wake.

Matter of Pierre  2017 NY Slip Op 06999 Decided on October 5, 2017  Appellate Division, First Department  Per Curiam

“Respondent Alex H. Pierre was admitted to the practice of law in the State of New York by the First Judicial Department on June 10, 1991, under the name Alex Hugues Pierre. Respondent was also admitted to practice in Pennsylvania in 1993. Respondent’s last business address listed with the Office of Court Administration is in Manhattan. Since June 7, 1999, respondent has been suspended from the practice of law in New York State by this Court for failing to file and pay his biennial registration dues. He has not appeared in this matter.”

“In a report and recommendation dated June 13, 2005, the Board noted that there were two charges brought against respondent involving a total of 11 disciplinary violations and aggravating factors. With respect to the first charge, the Board found that: on July 9, 1998, a woman was injured while riding a Southeastern Pennsylvania Transportation Authority (SEPTA) bus and on July 14, 1998, she retained respondent by executing a 40% contingency fee arrangement. The client received medical care from NovaCare Outpatient Rehabilitation. In June 1999, NovaCare’s counsel sought payment of her medical bill totaling $4,106.25. Respondent was given copies of the bills and a Statement of Account from NovaCare’s counsel.

By letter dated June 1, 2000, respondent wrote to SEPTA’s Claims Department seeking a claim number. However, by letter dated July 14, 2000, a SEPTA claim supervisor informed respondent that the statute of limitations had expired for third-party benefits. Respondent did not inform his client that he had failed to commence an action before the statute of limitations expired. SEPTA erroneously closed its claim file, even though the statute of limitations for the client’s claim for first-party benefits had not expired.

By letter dated November 27, 2000, respondent requested that SEPTA pay the NovaCare outstanding medical bill as it was a claim for first-party benefits. From December 2000 to February 2001, respondent provided SEPTA with numerous documents in support. On July 9, 2001, respondent commenced a lawsuit against SEPTA to recover first-party benefits for his client.”

“In a report and recommendation dated December 21, 2005, the Board set forth two charges. With respect to the first charge, they found that in 1998 when respondent was an associate at a law firm he filed a legal malpractice complaint but repeatedly failed to answer [*3]expert interrogatories, resulting in defense counsel obtaining two court orders directing him to produce responses, which he failed to do. In May 2000, respondent finally provided responses, albeit more than three months after the court ordered deadline. In June 2000, defense counsel moved to prohibit presentation of any expert testimony, and in August 2000, the trial court granted the defendants’ summary judgment motion. The trial court denied reconsideration and its decisions were affirmed by Pennsylvania appellate courts.”

“While the Pennsylvania court did not disbar respondent for his actions, this Court has found that where the sanction imposed in the original jurisdiction substantially deviates from that of New York, a more severe penalty may be imposed (see Matter of Munroe, 89 AD3d 1 [1st Dept 2011]). In Munroe this Court found that an attorney, who had been suspended for 2½ years in Massachusetts for engaging in a pattern of fraud, forgery, filing frivolous lawsuits and conversion, should be disbarred in New York (id.).

Here, the Pennsylvania court disciplined respondent after finding that he willfully engaged in the unauthorized practice of law for 18 months as he accepted new clients, failed to notify his new or former clients of his status, filed legal documents, and appeared in court numerous times after he was moved to “inactive” status. Under this Court’s precedent, engaging in the unauthorized practice of law over an extended period of time following a disciplinary suspension has resulted in disbarment (Matter of Sampson, 145 AD3d 95 [1st Dept 2016]; Matter of Rosabianca, 131 AD3d 215 [1st Dept 2015]).”

“In light of all of the circumstances and the nature of disbarment versus the punishment imposed by the Supreme Court of Pennsylvania (a three-year suspension), the Committee’s motion for reciprocal discipline should be granted, and respondent is disbarred from the practice of law in the State of New York and his name stricken from the roll of attorneys and counselors-at-law, nunc pro tunc to August 30, 2005.”

A Clever Tactic Turns Sour

Posted in Uncategorized

It looks like Plaintiff came to dislike Supreme Court, New York County.  It wanted out, even after the Court dismissed on summary judgment, without prejudice.  They had the chance to re-file there, but instead took the case to Westchester County.  Forum shopping?  We don’t know. But EB Brands Holdings, Inc. v McGladrey, LLP  2017 NY Slip Op 06923  Decided on October 4, 2017  Appellate Division, Second Department tells us that it was a bad, a very bad decision.

“Prior to commencing this action in the Supreme Court, Westchester County, in 2013, the plaintiff brought an action against the defendant in the Supreme Court, New York County (hereinafter the New York County action) asserting similar contentions. An order dated August 14, 2014, in the New York County action granted the defendant’s motion for summary judgment dismissing that complaint, without prejudice, on the ground that the complaint failed to state a cause of action. The court granted the plaintiff leave to replead in that action.

Thereafter, rather than amending its complaint in the New York County action, on September 8, 2014, the plaintiff commenced this action in the Supreme Court, Westchester County. In a judgment entered January 26, 2015, the Supreme Court, New York County, dismissed the New York County action pursuant to the plaintiff’s voluntary discontinuance of that action without prejudice.

After the dismissal of the New York County action, the defendant moved pursuant to CPLR 3211(a) for dismissal of the complaint in this action, in Westchester County, alleging, among other things, that the action is barred by the statute of limitations. The Supreme Court granted the defendant’s motion and dismissed the complaint. The plaintiff appeals.

The Supreme Court properly dismissed this action as time-barred (see Zaborowski v Local 74, Serv. Empls. Intl. Union, AFL-CIO, 91 AD3d 768, 768-769; Naval v Lehman Coll., 303 AD2d 662, 662; Kourkoumelis v Arnel, 238 AD2d 313, 313). The plaintiff’s contention that the statute of limitations was extended pursuant to CPLR 205(a) is without merit, as the time extension provisions of CPLR 205(a) are inapplicable when, as here, a prior, timely commenced action was terminated by voluntary discontinuance (see Zaborowski v Local 74, Serv. Empls. Intl. Union, AFL-CIO, 91 AD3d at 768-769; Naval v Lehman College, 303 AD2d at 662; Kourkoumelis v Arnel, 238 AD2d at 313).”

The Account Stated and Legal Malpractice

Posted in Legal Malpractice Cases

Attorney fees are the driver of what could be a majority of legal malpractice cases.  CLE lecturers consistently warn of the attorney fee-legal malpractice reflex arc, and with good reason.  Glassman v Weinberg 2017 NY Slip Op 06885 Decided on October 3, 2017  Appellate Division, First Department is a prime example.  Here the account stated claim fails and the breach of fiduciary duty claim withstands attack.

“Nevertheless, plaintiff’s motion for partial summary judgment on the account stated claim cannot be granted as to the other amounts billed, because plaintiff has not demonstrated entitlement to dismissal of defendant’s legal malpractice counterclaims, which are sufficiently intertwined with the account stated claim so as to provide a bona fide defense (see Emery Celli Brinckerhoff & Abady, LLP v Rose, 111 AD3d 453, 454 [1st Dept 2013], lv denied 23 NY3d 904 [2014]). In support of his motion for summary judgment dismissing these counterclaims, plaintiff failed to make a prima facie showing that his representation of defendant met the applicable standard of professional care and/or did not proximately cause any damages (see Rojas v Paine, 125 AD3d 745, 746 [2d Dept 2015]). With respect to the services he provided in Weinberg v Sultan, plaintiff simply asserted that defendant and her daughter were unable to provide facts concerning the closing, but made no showing that his investigation of the case, preparation of the complaint, and conduct of the litigation met the standard of “ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession” (Rudolf v Shayne, Dachs, Stanisci, Corker, & Sauer, 8 NY3d 438, 442 [2007] [internal quotation marks omitted]). Similarly, with respect to the other three legal malpractice counterclaims, plaintiff made conclusory assertions that he acted properly, without addressing defendant’s allegations or submitting any evidentiary support. Since plaintiff did not meet his initial burden, the burden did not shift to defendant to raise an issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

The motion court correctly sustained the counterclaims alleging plaintiff’s breach of fiduciary duty. Plaintiff did not respond to the third counterclaim’s allegation that his efforts to delay turnover of the escrowed funds were contrary to his fiduciary duty as an escrow agent. Further, plaintiff did not dispute the fourth counterclaim’s allegation that he kept the escrowed funds in a noninterest bearing account, nor did he offer any legal support for his claim that this conduct did not breach a duty of care owed to defendant.


Near Privity and Unfounded Assertions in an Olshan Malpractice Case

Posted in Legal Malpractice Cases

In the world of big lending, a simple omission can cause large damages.  So it went in Scopia Windmill LP v Olshan Frome Wolosky LLP  2017 NY Slip Op 32031(U)  September 26, 2017
Supreme Court, New York County  Docket Number: 650616/2016  Judge: Saliann Scarpulla.  Plaintiffs were investing in agriculture in order to get into the fracking business. Apparently a certain bean is useful in thickening fracking water.  So, the investors hire Olshan to do the loan documents.  At the end a UCC-1 is not filed, and big costs ensue.  Question:  who is the client, who may sue and how do the affidavits in related cases affect everything?

“In its complaint against Olshan Scopia alleges three causes of action: (1) legal malpractice, for failing to file a UCC-1 financing statement when the 2012 Loan and Security Agreement and 2012 Loan were executed and for “drafting the 2012 Loan Agreement with problematic provisions that increased the likelihood that a bankruptcy court would recharacterize the loan as equity; and . . . otherwise failing to draft the 2012 Loan and Security Agreement and 2012 Term Loan Note in a competent manner so as to establish Scopia’s position as a senior secured debtor,” (2) for breaching the retainer agreement; and (3) for breach of fiduciary duty. In its motion to dismiss, Olshan first argues that it has no attorney-client relationship with two of the three named plaintiffs – Holdings and Windmill – and that any claim of malpractice does not extend to these two plaintiffs because they are not in privity with Olshan. Olshan further argues that SCM’s main contention — that due to Olshan’s late filing of the UCC-1 it was prevented from filing a petition for reorganization and enjoying the undisputed status of secured creditor – is disproved as a matter of law by testimony and affidavits filed by the principals of SCM and WTG in other proceedings. Olshan also claims that Scopia’s damages are impermissibly speculative. ”

“On the legal malpractice claim, Olshan claims that it is not in privity with either Windmill or Holdings, thus, their malpractice claims must be dismissed. As Scopia concedes, only SCM signed the retainer agreement with Olshan. Thus, for Windmill and ” Holdings to maintain this action, they must plead facts showing near privity to Olshan. To show “near privity,” a plaintiff must allege that the attorney was aware that its services were used for a specific purpose, that the plaintiff relied upon those services, and that the attorney demonstrated an understanding of the plaintiffs reliance. Cal. Pub. Employees Ret. Sys. v. Shearman & Sterling, 95 N.Y.2d 427, 434 (2000). Scopia alleges that, although SCM retained Olshan, Windmill, the actual lender to WTG, was a “foreseeable third-party beneficiary” of the retainer agreement between Olshan and SCM. The 2012 loan documents submitted show that Windmill was the lender for whom Olshan prepared and/or reviewed loan documents. These documents support Scopia’s allegation that Windmill was in near privity with Olshan. ”

“Finally, with respect to the malpractice claim of SCM and Windmill, Olshan argues that testimony and documents submitted in the bankruptcy and other legal proceedings conclusively refute their allegations of proximate cause and damages. “Under CPLR 3211 (a) (1), a dismissal is warranted only ifthe documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter oflaw.” Leon v. Martinez, 84 N.Y.2d 83, 88 (1994). After reviewing the documents and testimony submitted by Olshan, and the affidavits submitted by Scopia, I find that Olshan has failed to ‘refute conclusively Scopia’s allegations of proximate cause and damages. Accordingly, I deny the motion to dismiss the legal malpractice claim against Olshan asserted by Windmill and SCM. “

A Medical Malpractice Illustrates How Strong the Privity Issue Remains

Posted in Legal Malpractice Basics

Privity between client and attorney is mirrored by the doctrine of the lack of a doctor-patient relationship.  Forget that there was a failure to diagnose breast cancer, and that the result can be deadly.  Social policy of limiting suits between patients and remote medical providers as well as the social policy of limiting legal malpractice cases is supreme here.

Gormley v Estabrook  2017 NY Slip Op 32021(U)  September 25, 2017  Supreme Court, New York County  Docket Number: 805236/16, Judge Martin Shulman tells us that: “Contrary to Gormley’s claim, RadNet has established its prima facie entitlement to summary judgmerit dismissing the complaint by submitting Linden’s sworn affidavit. See Hanna v North Shore-LIJ Network, Irie., 2013 WL 6222918, at *3 (Sup Ct Nassau County) (affidavit from defendant’s employee averring that defendant does not render patient care, did not render care to plaintiff and was not a corporate member of co-defendant medical center established entitlement to summary judgment and shifted burden to plaintiff to establish a material issue of fact). Upon RadNet establishing its prima facie case the burden shifted to plaintiff to “present facts in admissible form sufficient to raise genuine, triable issues of fact.” Mazurek v Metropolitan Museum of Art, supra; Zuckerman v City of New York, supra. “