The Inflexible Statute of Limitations in Legal Malpractice

It's THREE years, and not a day more.  In legal malpractice, no matter whether your claim is based on negligence or breach of contract CPLR 214(6) states that one has 3 years in which to bring the action.

Tsafatinos v Law Off. of Sanford F. Young, P.C.  2014 NY Slip Op 07145  Decided on October 22, 2014  Appellate Division, Second Department is one more example of this harsh, bright-line rule.

"On a motion to dismiss a cause of action pursuant to CPLR 3211(a)(5) as barred by the applicable statute of limitations, a defendant must establish, prima facie, that the time within which to sue has expired (see Bullfrog, LLC v Nolan, 102 AD3d 719, 719). Once that showing has been made, the burden shifts to the plaintiff to raise a question of fact as to whether the statute of limitations has been tolled, an exception to the limitations period is applicable, or the plaintiff actually commenced the action within the applicable limitations period (see id.).

Here, the defendants sustained their initial burden by demonstrating that the cause of action alleging legal malpractice accrued, at the latest, on April 22, 2008, a date more than three years before the commencement of this action (see CPLR 214[6]; Landow v Snow Becker Krauss, P.C., 111 AD3d 795, 796; Bullfrog, LLC v Nolan, 102 AD3d at 719). In opposition, the appellant failed to raise a question of fact (see Bullfrog, LLC v Nolan, 102 AD3d at 719; Daniels v Turco, 84 AD3d 858, 858-859; Piliero v Adler & Stavros, 282 AD2d 511, 511-512). Accordingly, the Supreme Court properly granted that branch of the defendants' motion which was to dismiss, as time-barred, the legal malpractice cause of action insofar as asserted by the appellant.

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Hedge Funds, Insurance Companies and Legal Malpractice

Legal malpractice cases come up in all kinds of settings.  It may be the individual personal injury plaintiff whose case was not started on time; it may be the car accident in which the doctor's reports failed to give the necessary descriptions of the injury and the case was dismissed, and sometimes it can be hedge funds complaining about loans gone bad because of faulty legal advice.  Here, in Genesis Merchant Partner v. Gilbride Tusa, 653145/2014 we see some of the big boys at play.

Christine Simmons, in today's New York Law Journal reports that: "Two investment funds have sued 20-attorney Gilbride, Tusa, Last & Spellane for malpractice, claiming the firm failed to perfect the funds' security interest in life insurance policies, leading to more than $84 million in damages.
"This is an open-and-shut case of legal malpractice and gross incompetence by Gilbride Tusa," the funds claim in Genesis Merchant Partner v. Gilbride Tusa, 653145/2014 (See Complaint).
But Gilbride Tusa in a statement called the suit's allegations "false, inaccurate and distorted versions of the events that seek to blame others for an unsuccessful loan of approximately $3 million made by the plaintiffs."


"Gilbride, Tusa, Last & Spellane denies these baseless allegations and anticipates being totally vindicated in court. In addition, we expect to obtain a judgment against the plaintiffs for the substantial unpaid legal fees owed to the Gilbride firm," said Joseph Francoeur and Thomas Leghorn, partners at Wilson Elser Moskowitz Edelman & Dicker who represent the firm.
The plaintiffs are investment funds Genesis Merchant Partners LP and Genesis Merchant Partners II LP, created by hedge fund Sands Brothers Asset Management. They are suing Gilbride Tusa, which has offices in New York and Connecticut, and Connecticut-based partners Jonathan Wells, Kenneth Gammill Jr. and Charles Tusa.


Genesis claims the funds paid Gilbride Tusa about $60,000 in legal fees to draft secured loan documents for about $4.4 million in loans to Progressive Capital Solutions LLC.
Progressive was a buyer of "life settlement" policies, which are life insurance policies that have been sold by their initial owners and are traded on a secondary market."

 

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A New Rule For Legal Malpractice and Appeals

Up to today, the rule in legal malpractice litigation has been that Plaintiff was not required to appeal from a decision in order to sue his attorney.  That all changed today with the Court of Appeals decision in Grace v Law  2014 NY Slip Op 07089  Decided on October 21, 2014  Court of Appeals
Abdus-Salaam, J.  The rule is now that "prior to commencing a legal malpractice action, a party who is likely to succeed on appeal of the underlying action should be required to press an appeal. However, if the client is not likely to succeed, he or she may bring a legal malpractice action without first pursuing an appeal of the underlying action."

From the decision:  "We are presented with an issue of first impression for this Court:

What effect does a client's failure to pursue an appeal in an underlying action have on his or her ability to maintain a legal malpractice lawsuit? We hold that the failure to appeal [*2]bars the legal malpractice action only where the client was likely to have succeeded on appeal in the underlying action.

While this Court has not had occasion to enunciate the appropriate standard for bringing legal malpractice lawsuits in the circumstances presented here, the Appellate Division Departments have examined similar circumstances (see Rupert v Gates & Adams, P.C., 83 AD3d 1393 [4th Dept 2011]; Rodriguez v Fredericks, 213 AD2d 176 [1st Dept 1995]). Those decisions — presented in the settlement context — generally stand for the proposition that an attorney should be given the opportunity to vindicate him or herself on appeal of an underlying action prior to being subjected to a legal malpractice suit.

Defendants contend that a plaintiff forfeits his or her opportunity to commence a legal malpractice action when he or she fails to pursue a nonfrivolous or meritorious appeal that a reasonable lawyer would pursue (see Sands v State of New York, 49 AD3d 444, 444 [1st Dept 2008]; see also MB Indus., LLC v CNA Ins. Co., 74 So 3d 1173 [LA 2011]; Rondeno v Law Office of William J. Vincent, 111 So 3d 515, 524 [LA 4th CCA 2013]). In contrast, plaintiff urges us to adopt a "likely to succeed" standard. Courts applying the "likely to succeed" standard analyze whether a client can commence a legal malpractice action without taking an appeal in the underlying action based upon the likelihood of success on that underlying appeal. In Hewitt v Allen (118 Nev 216 [Nev 2002]), the Supreme Court of Nevada held that the voluntary dismissal of an underlying appeal does not constitute abandonment where the appeal "would be fruitless or without merit" (id. at 216). The United States District Court for the District of Nevada interpreted Hewitt to mean that a defendant would have to show that the pending appeal was "likely" to succeed (U-Haul Co. of Nevada, Inc. v Gregory J. Kramer, Ltd., 2013 WL 4505800, at *2 [D. Nev. 2013]). Florida courts have held that "[w]here a party's loss results from judicial error occasioned by the attorney's curable, nonprejudicial mistake in the conduct of the litigation, and the error would most likely have been corrected on appeal, the cause of action for legal malpractice is abandoned if a final appellate decision is not obtained" (Segall v Segall, 632 So 2d 76, 78 [Fla 2d DCA 1993]; see Technical Packaging, Inc. v Hanchett, 990 So 2d 309, 316 [Fla 2d DCA 2008]; Eastman v Flor-Ohio, Ltd., 744 So 2d 499, 504 [Fla 5th DCA 1999]).

Defendants argue that the "likely to succeed" standard should not be adopted because it requires courts to speculate on the outcome of the underlying appeal. They posit, nevertheless, that even were we to adopt the "likely to succeed" standard, plaintiff could have succeeded on an appeal of the underlying action and, thus, should not be allowed to sue them for legal malpractice.

Here, the Appellate Division adopted the likely to succeed standard employed by [*5]our sister states with a proximate cause element [FN2]. We agree that this is the proper standard, and that prior to commencing a legal malpractice action, a party who is likely to succeed on appeal of the underlying action should be required to press an appeal. However, if the client is not likely to succeed, he or she may bring a legal malpractice action without first pursuing an appeal of the underlying action.

On balance, the likely to succeed standard is the most efficient and fair for all parties. This standard will obviate premature legal malpractice actions by allowing the appellate courts to correct any trial court error and allow attorneys to avoid unnecessary malpractice lawsuits by being given the opportunity to rectify their clients' unfavorable result. Contrary to defendants' assertion that this standard will require courts to speculate on the success of an appeal, courts engage in this type of analysis when deciding legal malpractice actions generally (see Davis v Klein, 88 NY2d 1008, 1009-1010 [1996] ["In order to establish a prima facie case of legal malpractice, a plaintiff must demonstrate that the plaintiff would have succeeded on the merits of the underlying action but for the attorney's negligence"]; see also Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442-443 [2007]; McKenna v Forsyth & Forsyth, 280 AD2d 79, 82 [4th Dept 2001]). We reject the nonfrivolous/meritorious appeal standard proposed by defendants as that would require virtually any client to pursue an appeal prior to suing for legal malpractice."

 

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Is It Partnership Fraud or Individual Fraud in this Legal Malpractice Case?

Attorneys represent individual client for a personal injury case.  The attorneys also represent two companies that are run by the individual.  The PI case settles and the attorneys want to apply the settlement monies against the bills for the company's commercial litigation.  It all goes wrong thereafter. 

Salazar v Sacco & Fillas, LLP  2014 NY Slip Op 00980 [114 AD3d 745]  February 13, 2014
Appellate Division, Second Department  discusses what happens when fraud is brought against various individual attorneys and the firm.

'To state a cause of action sounding in fraud, a plaintiff must allege that "(1) the defendant made a representation or a material omission of fact which was false and which the defendant knew to be false, (2) the misrepresentation was made for the purpose of inducing the plaintiff to rely upon it, (3) there was justifiable reliance on the misrepresentation or material omission, and (4) injury" (Selechnik v Law Off. of Howard R. Birnbach, 82 AD3d 1077, 1078 [2011]; see McDonnell v Bradley, 109 AD3d 592, 592-593 [2013]). In the instant matter, the complaint alleged that Fillas, one of the attorneys representing the plaintiff and the Always companies, made certain false statements, including, inter alia, misrepresenting the amount of past-due attorney's fees owed by the Always companies, and falsely stating, in effect, that he could sue the plaintiff personally for the sums allegedly owed by the Always companies. The complaint further alleged that these statements were known by Fillas to be false at the time they were made, and were intended to deceive, coerce, and induce the plaintiff into entering into the settlement agreement, and that the plaintiff relied on these statements to his detriment. Accordingly, these allegations were sufficient to state a cause of action alleging fraud against Fillas and the law firm (see Partnership Law §§ 24, 25, 26 [e]; Rabos v R&R Bagels & Bakery, Inc., 100 AD3d 849 [2012]).

However, the complaint fails to state a cause of action sounding in fraud against Sacco. As a general matter, Partnership Law § 26 (a) (1) imposes joint and several liability upon all individual partners in a partnership for all obligations chargeable to the partnership under Partnership Law §§ 24 and 25, which are referable to wrongful acts committed by one or more partners of the partnership acting in the ordinary course of partnership business. Partnership Law § 26 (b), however, immunizes from individual liability any partner in a partnership registered as a limited liability partnership who did not commit the underlying wrongful act, except to the extent that Partnership Law § 26 (c) imposes liability on that partner where he or she directly supervised the person who committed the wrongful act and Partnership Law § 26 (d) imposes liability on that partner where he or she had previously agreed to assume individual liability for wrongs committed by another partner. Although, at this stage of the litigation, the plaintiff " 'need only set forth sufficient information to apprise defendants of the alleged wrongs' " (Selechnik v Law Off. of Howard R. Birnbach, 82 AD3d at 1079, quoting DDJ Mgt., LLC v Rhone Group L.L.C., 78 AD3d 442, 443 [2010]), the complaint fails to allege facts apprising Sacco of the basis of his individual liability. The complaint does not allege that Sacco personally committed a fraudulent act. Nor does the complaint allege that the law firm is a general partnership or that, as such, Sacco may be held individually liable pursuant to Partnership Law § 26 (a) (1). Furthermore, the complaint does not allege that the law firm is a registered limited liability partnership, but that Sacco supervised Fillas in the commission of a fraudulent act, thus rendering Sacco individually liable pursuant to Partnership Law § 26 (c), or that Sacco had previously agreed to assume personal liability for fraudulent acts committed by Fillas, thus rendering Sacco individually liable pursuant to Partnership Law § 26 (d). The allegations in the complaint particularizing Fillas's fraudulent conduct, standing alone, are insufficient to state a cause of action sounding in fraud against Sacco (see Partnership Law § 26 [b], [d]; Selechnik v Law Off. of Howard R. Birnbach, 82 AD3d at 1079). Accordingly, the Supreme Court should have granted that branch of the defendants' motion which was to dismiss the fraud cause of action insofar as [*3]asserted against Sacco."

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You Did Well Enough, Now Go Home

Courts do not apply legal malpractice law in a vacuum.  Far more than in other areas of the law, Courts engage in finding ways to explain the attorney's conduct, or in finding explanations.  Fielding v Kupferman  2013 NY Slip Op 02008 [104 AD3d 580]  March 26, 2013  Appellate Division, First Department is no exception.  Plaintiff points out mistakes by the attorney.  The Court then tells plaintiff that he did well enough in the case, please stop pointing out other mistakes and be happy with what he got.

"Defendants established their entitlement to judgment as a matter of law in this action alleging legal malpractice. Defendants submitted evidence showing that the divorce settlement, in which plaintiff achieved his goal of retaining the parties' marital residence, was advantageous to plaintiff, and resulted in his receiving consideration that more than compensated him for the allegedly unforeseen tax consequences of liquidating his Keogh account (see e.g. Kluczka v Lecci, 63 AD3d 796, 798 [2d Dept 2009]). Defendants also submitted evidence demonstrating that the subject tax consequences were discussed with plaintiff during the course of the settlement negotiations.

In opposition, plaintiff failed to raise a triable issue of fact. His argument that if he had been properly advised on the tax consequences, he would have reached a better settlement or outcome after trial, is speculative (see Kluczka at 798). Plaintiff failed to take into account the benefits he received in the actual settlement, including buying out his wife's share of the marital residence based on an outdated appraisal that assigned a value that was significantly lower than the actual value at the time the agreement was executed. Moreover, plaintiff failed to provide proof of any ascertainable actual damages sustained as a result of the alleged negligence (see Lavanant v General Acc. Ins. Co. of Am., 212 AD2d 450 [1st Dept 1995]). [*2]

Under the circumstances presented, plaintiff's claim for disgorgement of legal fees already paid was properly dismissed (see Reisner v Litman & Litman, P.C., 95 AD3d 858 [2d Dept 2012]; compare Boglia v Greenberg, 63 AD3d 973, 976 [2d Dept 2009]). Concur—Gonzalez, P.J., Sweeny, Renwick, Manzanet-Daniels and Román, JJ. [Prior Case History: 2011 NY Slip Op 31983(U).]

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Try to Determine Why This Legal Malparctice Case Was Dismissed

Sure, the Second Department is busy, and there is a constant and steady stream of cases coming before it, 20 every day.  Nevertheless, a couple of facts in the decision might help practitioners in their everyday legal lives.

Barker v Amorini  2014 NY Slip Op 06931  Decided on October 15, 2014  Appellate Division, Second Department is an example of a decision that fails to illuminate the path.  Case is dismissed in Supreme Court on a CPLR 3211 motion, and modified by the Second Department. Why?  We have no clue.

"The defendants, among other things, moved pursuant to CPLR 3211(a)(1) and (7) to dismiss the causes of action alleging conversion and legal malpractice. The Supreme Court, upon renewal, inter alia, granted those branches of the defendants' motion, concluding that the plaintiff was judicially estopped from asserting the cause of action alleging conversion and that, in any event, she failed to state a cause of action in that regard. The court also directed the dismissal of the cause of action alleging legal malpractice for failure to state a cause of action.

"On a pre-answer motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction and the plaintiff's allegations are accepted as true and accorded the benefit of every possible favorable inference" (Granada Condominium III Assn. v Palomino, 78 AD3d 996, 996; see Leon v Martinez, 84 NY2d 83, 87). However, on a motion to dismiss pursuant to CPLR 3211(a)(7), "bare legal conclusions are not presumed to be true" (Khan v MMCA Lease, Ltd., 100 AD3d 833, 833; see Goel v Ramachandran, 111 AD3d 783, 791-792). To prevail on a motion to dismiss a complaint pursuant to CPLR 3211(a)(1), the documentary evidence which forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claim (see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; Parekh v Cain, 96 AD3d 812, 815).

The Supreme Court also properly directed the dismissal of the cause of action alleging legal malpractice. To recover damages in a legal malpractice action, a plaintiff must establish "that the 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 plaintiff to sustain actual and ascertainable damages" (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442, quoting McCoy v Feinman, 99 NY2d 295, 301; see Benishai v Epstein, 116 AD3d 726, 727). "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 Benishai v Epstein, 116 AD3d at 727).

Here, affording the complaint a liberal construction, accepting all facts as alleged in the complaint to be true, and according the plaintiff the benefit of every possible favorable inference (see Leon v Martinez, 84 NY2d at 87-88), the complaint was insufficient to state a cause of action alleging legal malpractice. The plaintiff failed to specifically allege facts supporting a claim that, but [*2]for the defendants' alleged negligence, the plaintiff would not have incurred any damages (see Benishai v Epstein, 116 AD3d at 728; Keness v Feldman, Kramer & Monaco, P.C., 105 AD3d 812; Tortura v Sullivan Papain Block McGrath & Cannavo, P.C., 21 AD3d 1082, 1083). Accordingly, the Supreme Court, upon renewal, properly granted that branch of the defendants' motion which was to dismiss the cause of action alleging legal malpractice, which was asserted by the plaintiff both in her individual capacity and derivatively on behalf of the LLC."

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Decision To Dismiss Unloved Legal Malpractice Case Reversed

Plaintiff hires attorneys to file a disability claim.  Claim is denied.  Plaintiff sues attorneys on the theory that they failed to file important proofs of his disability.  Attorneys move to dismiss.  Outcome?  Motion granted and then reversed on appeal.  Is this just another reflexive dismissal of an unloved legal malpractice case?

Biro v Roth  2014 NY Slip Op 06790  Decided on October 8, 2014  Appellate Division, Second Department is another example of the AD applying the rules to pre-discovery motions to dismiss legal malpractice cases.

"The plaintiff commenced this action against the defendants, alleging a single cause of action sounding in legal malpractice. The defendants represented the plaintiff in connection with an application by which he sought disability retirement benefits in connection with his employment as a corrections officer with the New York State Department of Correctional Services (now known as the New York State Department of Corrections and Community Supervision). The complaint alleged, inter alia, that the defendants failed to incorporate certain documentary evidence of his disability into his application, and that their failure to do so was the proximate cause of his failing to secure the benefits he sought. Prior to answering the complaint, the defendants moved to dismiss the complaint pursuant to CPLR 3211(a)(1) and (7). The Supreme Court denied that branch of the motion which was to dismiss the complaint pursuant to CPLR 3211(a)(7), determining that the plaintiff stated a cause of action, but granted that branch of the motion which was to dismiss the complaint pursuant to CPLR 3211(a)(1).

A motion to dismiss a complaint pursuant to CPLR 3211(a)(1) on the ground that a defense is founded on documentary evidence "may be appropriately granted only where the documentary evidence utterly refutes [the] plaintiff's factual allegations, conclusively establishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; see Rodolico v Rubin & Licatesi, P.C., 114 AD3d 923; Endless Ocean, LLC v Twomey, Latham, Shea, Kelley, Dubin & Quartararo, 113 AD3d 587; Siracusa v Sager, 105 AD3d 937). Here, in their motion to dismiss, the defendants argued that they included all relevant documentation to support the plaintiff's application for disability retirement benefits. However, the evidence submitted by the defendants, including a doctor's report stating that the plaintiff was able to return to full duty, either did not constitute documentary evidence within the meaning of CPLR 3211(a)(1) or failed to utterly [*2]refute the plaintiff's allegations of malpractice or conclusively establish a defense as a matter of law (see Cives Corp. v George A. Fuller Co., Inc., 97 AD3d 713; Fontanetta v John Doe 1, 73 AD3d 78, 84-85). A party seeking relief pursuant to CPLR 3211(a)(1) on the ground that its defense is founded upon documentary evidence " has the burden of submitting documentary evidence that resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claim'" (Flushing Sav. Bank, FSB v Siunykalimi, 94 AD3d 807, 808, quoting Mazur Bros. Realty, LLC v State of New York, 59 AD3d 401, 402; see Leon v Martinez, 84 NY2d 83, 88; Camisa v Papaleo, 93 AD3d 623; Makris v Darus-Salaam Masjid, N.Y., Inc., 91 AD3d 729). Here, the defendants failed to meet their burden. Accordingly, the Supreme Court should have denied that branch of the defendants' motion which was to dismiss the complaint pursuant CPLR 3211(a)(1)."

 

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A Professional Negligence Case Falls on Professional Negligence

Attorneys suing land surveyors and then getting sued by attorneys.  It's a circular story, which discusses contribution and indemnity.  In the end defendant cannot pass off the liability to a third-party, and must answer to the plaintiff. Alva v Gaines, Gruner, Ponzini & Novick, LLP  2014 NY Slip Op 06785  Decided on October 8, 2014  Appellate Division, Second Department is the story of finger-pointing gone bad.

"The plaintiffs, Geralyn Alva and James Alva (hereinafter together the Alvas), retained Atzl, Scatassa & Zigler, Land Surveyors, P.C. (hereinafter Atzl), to perform land surveying work on a vacant lot in Tomkins Cove, New York. The work was performed in November 2005. Due to an alleged error in the work, the Alvas withheld payment. Atzl returned to the Alvas' lot on April 13, 2006, and performed additional work. Atzl did not charge the Alvas for the work performed in April 2006, but continued to bill for the November 2005 work. In March 2008, the Alvas retained the defendant third-party plaintiff Gaines, Gruner, Ponzini & Novick, LLP, to represent them in connection with a claim to recover damages for injury to property that they allegedly sustained as a result of Atzl's negligence. On or about February 5, 2009, Gaines, Gruner, Ponzini & Novick, LLP, referred the Alvas' case to the third-party defendant Robert B. Marcus, P.C.

On February 20, 2009, the Alvas, represented by the third-party defendants Robert B. Marcus, P.C., and Robert Marcus (hereinafter together the Marcus attorneys), commenced an action against Atzl to recover damages for injury to property, based on professional malpractice (hereinafter the underlying action). The complaint alleged two separate causes of action, referable to the November 2005 work and the April 2006 work, respectively. Atzl moved to dismiss the first cause of action on the ground that it was barred by the applicable three-year statute of limitations. In opposing the motion, the Marcus attorneys argued on behalf of the Alvas that the parties engaged in a continuous professional relationship, and that continuous professional services were rendered in connection with the issue that was the subject of the underlying action. In an order dated August [*2]17, 2009, the Supreme Court granted Atzl's motion to dismiss the first cause of action in the underlying action.

Thereafter, the Alvas commenced the instant action against Gaines, Gruner, Ponzini & Novick, LLP, and Ted Alan Novick (hereinafter together the GGP & N defendants) to recover damages for legal malpractice, alleging that the GGP & N defendants failed to timely commence the underlying action against Atzl, and referred the case to outside counsel after the statute of limitations had already expired on the majority of the Alvas' claims. Subsequently, the GGP & N defendants commenced a third-party action against the Marcus attorneys for contribution and common-law indemnification. The Marcus attorneys moved to dismiss the third-party complaint pursuant to CPLR 3211(a)(1) and (7). The GGP & N defendants cross-moved for leave to amend the third-party complaint. The Supreme Court granted the Marcus attorneys' motion, and denied the cross motion. We affirm.

The Supreme Court properly determined that the GGP & N defendants failed to state a cause of action against the Marcus attorneys for contribution. The third-party complaint failed to allege sufficient facts which, if true, would establish that any legal malpractice committed by the Marcus attorneys proximately caused the Alvas to sustain actual damages, thus rendering the Marcus attorneys liable to the GGP & N defendants for contribution. The GGP & N defendants allegedly allowed the statute of limitations to run on the cause of action arising from Atzl's November 2005 work before referring the case to the Marcus attorneys. The GGP & N defendants alleged that the Marcus attorneys could have cured this error by including only one cause of action in the underlying action that would have encompassed all of Atzl's visits to the subject property in November 2005 and April 2006. The GGP & N defendants further asserted that such a cause of action would have been deemed timely and, thus, would have survived a motion to dismiss in the underlying action. However, this assertion is a bare legal conclusion, which we do not deem to be true on the instant motion pursuant to CPLR 3211(a) (see Aqua NY of Sea Cliff v Buckeye Pipeline Co., L.P., 119 AD3d 829)."

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A Reflexive Dismissal Reversed

We have noted in the past that legal malpractice cases are negatively viewed.  They are dismissed, either on a CPLR 3211 basis or a CPLR 3212 basis more often than other negligence cases, and often reflexively.  Harris Beach PLLC v Eber Bros. Wine & Liq. Corp.  2014 NY Slip Op 06704 
Decided on October 3, 2014  Appellate Division, Fourth Department is one example.  Here, Supreme Court granted summary judgment to the law firm for legal fees, dismissed all of the malpractice counterclaims, only to have the 4th Department summarily reverse.

"It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs and the motion is denied in accordance with the following Memorandum: Plaintiff, the longtime general counsel for defendant, commenced this action seeking to recover approximately $750,000 in costs, disbursements, legal fees, and interest thereon for services rendered to defendant in the defense of a tort and breach of contract action in which defendant had been sued (underlying action). The underlying action was commenced on October 5, 2006, and, at that time, defendant was insured by Illinois National Insurance Company (Illinois National) pursuant to a policy of directors, officers and private company liability insurance (Illinois National policy) effective for the period from March 31, 2006 to March 31, 2007. The coverage under the Illinois National policy was limited to claims made and reported during the period in which that policy was effective, as was the coverage afforded defendant under a policy of directors, officers, and private company liability insurance issued by National Union Fire Insurance Company of Pittsburgh, Pa. (National Union) for the period from March 31, 2008 to March 31, 2009 (National Union policy). On August 7, 2008, i.e., approximately two years after the commencement of the underlying action, plaintiff wrote to M & T Insurance Agency, from which defendant had obtained the National Union policy, and, inter alia, tendered the defense of defendant in the underlying action pursuant to what the record reflects was the National Union policy. Both Illinois National and National Union are part of the AIG group of insurers, and by letter dated September 24, 2008, a claims analyst employed by AIG Domestic Claims, Inc. rejected plaintiff's tender on the ground that it was untimely.

In deciding this issue, we must examine the terms of the Illinois National policy, which was effective at the time of the commencement of the underlying action and pursuant to which plaintiff should have promptly tendered the defense and indemnification of defendant in the underlying action. That contract provides, inter alia, that Illinois National did not assume any duty to defend defendant, but that defendant had the option of either timely tendering its defense to Illinois National or seeking an advance of defense costs from Illinois National prior to the final disposition of the claim. If Illinois National advanced defense costs, it was entitled to recoupment of those costs to the extent that defendant was not entitled to payment of the loss in question under the terms of the Illinois National policy. The Illinois National policy also contains a clause requiring notice "as soon as practicable" and either "during the Policy Period or during the Discovery Period" as a condition precedent to coverage under that agreement.

In spite of that timely notice provision, plaintiff did not tender the defense of defendant to any insurer until August 7, 2008, and it appears from the record before us that plaintiff never tendered the defense of defendant or sought an advance of defense costs for defendant under the Illinois National policy. As a result of those omissions, plaintiff never asked Illinois National to take a position on coverage for defendant under the Illinois National policy, and thus the record is silent as to how Illinois National would have responded to such a tender. Indeed, this matter presents a question of claim handling, i.e., how Illinois National would have processed a request for coverage under the Illinois National policy. Consequently, we conclude that plaintiff did not meet its initial burden on the motion for partial summary judgment (see Utica Cutlery Co., 109 AD3d at 1162; see generally Zuckerman v City of New York, 49 NY2d 557, 562). We therefore reverse the order in its entirety, deny the motion for partial summary judgment, reinstate that part of defendant's counterclaim for professional negligence based on plaintiff's alleged failure to provide defendant's insurer with timely notice of the underlying claim, and reinstate defendant's fifth and sixth affirmative defenses. We decline to address defendant's remaining contention herein."

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Using the Correct Procedure Defeats a Judiciary Law 487 Claim

In the recent past, a claim that attorney lied in motion papers filed seeking to be relieved as attorney has survived motion practice. This decision likely prodded plaintiff to bring Brady v Friedlander  2014 NY Slip Op 06677  Decided on October 2, 2014  Appellate Division, First Department.  In this situation the First Department did not intervene, nor did it reverse.  The attorney made a proper motion to withdraw, and Civil Court's decision is not reviewable on a legal malpractice 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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