New York Attorney Malpractice Blog

New York Attorney Malpractice Blog

Statute of Limitations and the Relation-Back Doctrine

Posted in Legal Malpractice Cases

The statute of limitations for professional malpractice (other than medical malpractice) is three years.  What happens when further claims are added to a timely case, and defendants argue that these claims are time-barred?  Hustedt Chevrolet, Inc. v Jones, Little & Co.  2015 NY Slip Op 04611 [129 AD3d 669]  June 3, 2015  Appellate Division, Second Department gives us an idea.  In Hustedt, plaintiffs wished to supplement the cause of action for accounting malpractice.  The Court eventually said no.  Here is the reasoning:

“The plaintiffs moved pursuant to CPLR 3025 (b), inter alia, for leave to amend their first amended complaint to supplement the cause of action to recover damages for accounting malpractice. It is undisputed that the plaintiffs’ proposed supplemental claims of accounting malpractice were time-barred (see CPLR 214 [6]). The plaintiffs, however, contend that these proposed supplemental claims relate back to the allegations contained in the accounting malpractice cause of action in the first amended complaint. Contrary to that contention, the allegations in the first amended complaint gave no notice of the facts, transactions, and occurrences giving rise to the proposed supplemental claims of accounting malpractice and thus, the relation-back doctrine does not apply (see CPLR 203 [f]; Fisher v Giuca, 69 AD3d 671, 673 [2010]; Pendleton v City of New York, 44 AD3d 733, 736 [2007]; Sabella v Vaccarino, 263 AD2d 451, 452 [1999]; Bergman v Indemnity Ins. Co. of N. Am., 232 AD2d 271 [1996]; Smith v Bessen, 161 AD2d 847, 849 [1990]; Alpert v Shea Gould Climenko & Casey, 160 AD2d 67, 72-73 [1990]). The plaintiffs’ remaining contentions are without merit. Therefore, the Supreme Court properly denied that branch of their motion pursuant to CPLR 3025 (b) which was for leave to amend the first amended complaint to supplement the cause of action to recover damages for accounting malpractice.”

When there is Fraud in Addition to Legal Malpractice

Posted in Legal Malpractice Cases

In the distant past, breach of contract cases against attorneys carried a 6 year statute of limitations, but that all ended long ago.  A claim of fraud is also due a 6 year statute of limitations and may be rewarded by treble damages.  Clients often ask whether a claim can be made against the attorney for fraud in addition to one for legal malpractice. Caravello v One Mgt. Group, LLC  2015 NY Slip   Op 07000  Decided on September 30, 2015  Appellate Division, Second Department is one case where the fraud claim was for matters extrinsic to that of the legal malpractice.

“The complaint alleges that the defendants acted in concert, as part of a mortgage foreclosure rescue scheme, to deprive the plaintiffs of the net proceeds of the sale of their home at a closing which took place in February 2008. The defendant Elena R. Gelman was the attorney who represented the plaintiffs at the closing. The plaintiffs asserted causes of action against Gelman alleging, inter alia, legal malpractice and fraud. Gelman moved, inter alia, pursuant to CPLR 3211(a)(7) to dismiss the sixth cause of action, which alleged fraud, insofar as asserted against her, and so much of the seventh cause of action as alleged fraud insofar as asserted against her, or in the alternative, pursuant to CPLR 3212 for summary judgment dismissing the complaint insofar as asserted against her. The Supreme Court denied those branches of Gelman’s motion.

The Supreme Court properly denied those branches of Gelman’s motion which were pursuant to CPLR 3211(a)(7) to dismiss the sixth cause of action insofar as asserted against her and so much of the seventh cause of action as alleged fraud insofar as asserted against her. On a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), the pleading is afforded a liberal construction and the court must give the plaintiff “the benefit of every possible favorable inference, accept the facts alleged in the complaint as true, and determine only whether the facts as alleged fit within any cognizable legal theory” (High Tides, LLC v DeMichele, 88 AD3d 954, 956 [internal quotation marks omitted]; see Leon v Martinez, 84 NY2d 83, 87-88; McDonnell v Bradley, 109 AD3d 592, 593).

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 the defendant knew to be false, (2) the misrepresentation was made for the purpose of inducing the plaintiff to rely [*2]upon it, (3) there was justifiable reliance on the misrepresentation or material omission, and (4) injury” (McDonnell v Bradley, 109 AD3d at 592-593 [internal quotation marks omitted]; see Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 559; Pace v Raisman & Assoc., Esqs., LLP, 95 AD3d 1185, 1188-1189). To plead a cause of action to recover damages for aiding and abetting fraud, the complaint “must allege the existence of [the] underlying fraud, knowledge of the fraud by the aider and abettor, and substantial assistance by the aider and abettor in the achievement of the fraud” (Winkler v Battery Trading, Inc., 89 AD3d 1016, 1017). Moreover, pursuant to CPLR 3016(b), where a cause of action is based upon fraud or aiding and abetting fraud, the “circumstances constituting the wrong” must be “stated in detail.”

In this case, the complaint, in both the sixth and seventh causes of action, incorporated all prior allegations made therein. Viewing all of the allegations in the complaint as true and resolving all inferences in favor of the plaintiffs, we find that the Supreme Court properly determined that the complaint adequately stated causes of action against Gelman sounding in fraud and aiding and abetting fraud (see Goldson v Walker, 65 AD3d 1084, 1084-1085). The allegations adequately informed Gelman of the “complained-of incidents” (Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d at 559; see Pace v Raisman & Assoc., Esqs., LLP, 95 AD3d at 1189).”

Judiciary Law 487 and Changes Over Time

Posted in Legal Malpractice Cases

Today’s New York Law Journal has an interesting article which discusses the Pre- and Post-Amalfitano v. Rosenberg status of Judiciary Law § 487 cases.  The conclusion of Herrington and Miller is that JL § 487 cases are on the rise, and courts are less willing to dismiss them at the beginning of the case.  They were kind enough to cite our NYLJ article on Judiciary Law § 487 which appeared there on September 25, 2014.

From their article: “Although cases and success rates for claims invoking the attorney misconduct statute, N.Y. Judiciary Law §487, have risen—even doubled—over the past five years, there appears to be no change in the severity of misconduct required for an actionable claim. Given the clarification in 2009’s seminal Amalfitano v. Rosenberg, 903 N.E.2d 265, 266 (N.Y. 2009) that even attempted deceit was actionable, the post-Amalfitano consistency in the severity standard is arguably surprising and provides some comfort. It appears, keeping with the history of §487, that New York jurists will properly allow these claims to survive motions to dismiss and proceed to discovery only in true outlier cases. What could otherwise be inconsistent with the advocate’s duty to zealously advocate for her client is properly reserved for these circumstances.
In New York, an attorney who intentionally deceives a court or party during a judicial proceeding, and causes injury by that action, may be guilty of a misdemeanor, subject to penal law punishments, and liable for treble damages. N.Y. Jud. Law §487 (McKinney 2005).
Section 487 has been on the books for almost two centuries. See Amalfitano v. Rosenberg, 428 F.Supp.2d 196, 210 (S.D.N.Y. 2006), aff’d 572 F.3d 91 (2d Cir. 2009) (tracing the statute’s origin to the 1836 Revised Statutes of New York Sections 69 and 70, but noting the statute in its current form was enacted in 1965). The past five years have seen an increase both in the number of filings and the likelihood of Section 487 claims to survive motions to dismiss.”

“Commentators predicted that, as a result of the Amalfitano decision, plaintiffs would likely prevail with their Section 487 claims where they had not before.1 An (admittedly limited) empirical analysis shows these prognostications to have been correct. We examined 25 cases in both the pre-and post Amalfitano era. Both the rate of Section 487 filings and the ability of Section 487 plaintiffs to get past the pleadings stage appear to have increased markedly post-Amalfitano. Attorneys litigating in New York state and federal courts would be well-advised to keep Section 487 risk in mind both in litigating and settling cases where a vengeful opponent has a powerful tool to switch targets from their opponent to its counsel.”

Privity is a Very Inflexible Rule in Legal Malpractice

Posted in Uncategorized

Only clients may sue their attorney in legal malpractice.  It really does not matter (so much) whether the attorney made a mistake that hurt you.  What matters is whether you (and that means you, not your father) hired the attorney.  So, beneficiaries to estates that don’t get what they should can rarely sue the attorney who drew up the papers.

As an example, Rhodes v Honigman  2015 NY Slip Op 06907  Decided on September 23, 2015  Appellate Division, Second Department shows us that daughters who did not get the trust that their father intended for them may not sue the attorney who drew up the papers.  This is true even though the papers allowed their mother to step in between and divert the money to herself.

“In July 2007, the decedent and his wife retained the legal services of the defendant for estate planning purposes. On November 19, 2007, the decedent executed a revocable living trust (hereinafter the Trust), the terms of which included specific directives as to the proportional distribution of assets upon his and his wife’s respective deaths, and identified the wife as trustee and named one of the daughters as a successor trustee upon the happening of certain events. The Trust, which was prepared by the defendant, provided that, upon the decedent’s death, the remaining principal and accumulated income would be held in trust for the benefit of the decedent’s wife and that, upon his wife’s death, the remainder would be distributed in prescribed amounts to various named charities, and to the decedent’s daughters by a previous marriage, with two of the daughters each receiving a designated percentage, and another daughter receiving a specific sum of $25,000. The decedent died on July 15, 2009. Certain amendments to the Trust, executed shortly before the decedent’s death, are the subject of litigation in a proceeding that was pending in Surrogate’s Court, Nassau County, under File No. 357224, at the time this appeal was perfected.

The plaintiffs alleged that the defendant committed legal malpractice in his drafting of the Trust by providing that the wife would be a cotrustee of the Trust, whereby she would have the power to transfer all or part of the principal to herself, thereby divesting the decedent’s daughters of their dispositions.

The Supreme Court properly granted those branches of the defendant’s motion pursuant to CPLR 3211(a) which were to dismiss the causes of action asserted by the decedent’s three daughters in their individual capacities for lack of standing. Lack of privity with an estate planning attorney is a bar against a beneficiary’s claims of legal malpractice against that attorney [*2]absent fraud, collusion, malicious acts, or other special circumstances (see Estate of Schneider v Finmann, 15 NY3d 306, 310), none of which are alleged in this case.”

Drugs, Gambling and Legal Malpractice?

Posted in Legal Malpractice Cases

Kerley v Kerley  2015 NY Slip Op 06891  Decided on September 23, 2015   Appellate Division, Second Department is a tragic story.  What the Court portrays as a good mom, and a troubled dad ends in divorce and financial ruin.  Father blew through $1 Million and was in drug rehab, was a gambler and when it all started to end, wanted to sue the kid’s lawyer for legal malpractice.  How did that come up?

“The parties were married on August 14, 1993, and have three children in common. [*2]The first was born in 1998, and the second and third, twins, were born in 2001. During the marriage, the defendant worked as an account executive for a television network and consistently earned substantially more than the plaintiff, who worked as a public school teacher. The defendant earned $270,965.01 in 2010 and $448,388.99 in 2011, while the plaintiff earned $125,960.80 and $157,868.00 in each of those years. In April 2009, the plaintiff commenced this matrimonial action seeking, among other things, child support and equitable distribution. Following a nonjury trial, the Supreme Court, inter alia, awarded the plaintiff 70% of the marital assets, and the defendant 30%, upon consideration of the statutory factors enumerated in Domestic Relations Law § 236(B)(5)(d), including a finding that the defendant wastefully dissipated marital assets and awarded counsel fees to the plaintiff in the sum of $80,000.

The Supreme Court found the defendant’s testimony to be “devoid of any credibility, unsupportable, and utterly unreliable.” The assessment of credibility is a matter committed to the trial court’s sound discretion and deference is owed to the trial court’s credibility determinations (see Scher v Scher, 91 AD3d 842, 847; Papovitch v Papovitch, 84 AD3d 1045, 1046; Ivani v Ivani, 303 AD2d 639, 640).

Contrary to the defendant’s contentions, the Supreme Court providently exercised its discretion in making its determination as to equitable distribution (see DeGroat v DeGroat, 84 AD3d 1012, 1012;Alper v Alper, 77 AD3d 694, 695). The Supreme Court considered the various statutory factors enumerated in Domestic Relations Law § 236(B)(5)(d), which include, inter alia, the income and property of each party at the time of marriage and at the time of the commencement of the action, the duration of the marriage, the age and health of both parties, any award of maintenance, the probable future financial circumstances of each party, and the wasteful dissipation of assets by either spouse (see Holterman v Holterman, 3 NY3d 1, 7). The court identified as factors in its decision the plaintiff’s health problems, that the defendant is in good health but suffers from substance abuse, that there is a substantial disparity in income between the parties, that the defendant has depleted marital assets, and that the parties have almost no liquid assets. We also note that no maintenance was awarded to the plaintiff in this case.

The record supports the Supreme Court’s determination that the defendant wastefully dissipated substantial sums of money through his gambling and drug activity (see O’Sullivan v O’Sullivan, 247 AD2d 597, 597; Conceicao v Conceicao, 203 AD2d 877, 879; Wilner v Wilner, 192 AD2d 524, 525). Although the precise amount of marital funds dissipated through the defendant’s activities cannot be determined, the evidence presented at trial reveals, inter alia, that the defendant was in and out of rehabilitation facilities for substance abuse, both inpatient and outpatient, from mid-2009 through the time of trial. The defendant also acknowledged taking frequent trips to gambling casinos. The testimony also revealed that the defendant removed approximately $90,000 from the parties’ Fidelity investment account, which was in the defendant’s sole name but was marital property, and that, between 2009 and 2011, he also took over $90,000 out of an individual retirement account, and $30,000 from his Chase bank account, without being able to account for how he used the majority of such funds. In addition, despite the fact that the defendant earned over $1,000,000 from 2009 to 2012, by the time of the trial, as the Supreme Court noted, the parties were left with almost no liquid assets. Thus, the Supreme Court did not err in awarding a greater share of the remaining marital assets to the plaintiff (see Burnett v Burnett, 101 AD3d 1417, 1419; Franco v Franco, 97 AD3d 785, 786; Kaur v Singh, 44 AD3d 622, 623).

ontrary to the contention of the attorney for the children, under the circumstances of this case, the defendant’s arguments regarding the denial of those branches of his motion which were to disqualify the attorney for the children and disallow her attorney’s fee may properly be reviewed on appeal. However, the Supreme Court properly denied those branches of the defendant’s motion. The attorney for the child correctly contends, as she did in her papers filed in opposition to the defendant’s motion, that the defendant lacks standing to seek disqualification and disallowance of her fee on the ground of legal malpractice (see Drummond v Drummond, 291 AD2d 368, 369; see also Bluntt v O’Connor, 291 AD2d 106). Furthermore, even if the defendant had standing, the record supports the Supreme Court’s conclusion that his arguments are without merit (see Drummond v Drummond, 291 AD2d at 369).”

The “But For” Graveyard of Legal Malpractice Claims

Posted in Legal Malpractice Cases

The least understood part of legal malpractice litigation is the “but  for” standard, in which Plaintiff must demonstrate that “but for” the negligence (or departure) of the attorney, plaintiff would have enjoyed a better or more economically favorable outcome.  In most instances plaintiff correctly recognizes the departure, and the damages are often self-evident.  This is where otherwise good legal malpractices cases go to die.

Antonelli v Guastamacchia  2015 NY Slip Op 06870  Decided on September 23, 2015
Appellate Division, Second Department is today’s example.

“In an action, inter alia, to recover damages for legal malpractice and breach of fiduciary duty, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Richmond County (Maltese, J.), dated August 22, 2013, as granted that branch of the motion of the defendants Steven Decker, Esq., and Decker, Decker, Dito & Internicola, LLP, which was for summary judgment dismissing the complaint insofar as asserted against them.

ORDERED that the order is affirmed insofar as appealed from, with costs.

“In an action to recover damages for legal malpractice, a plaintiff must demonstrate 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 Rehberger v Garguilo & Orzechowski, LLP, 118 AD3d 767). “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 Quantum Corporate Funding, Ltd. v Ellis, 126 AD3d 866; Kutner v Catterson, 56 AD3d 437). To prevail on a summary judgment motion, a “defendant in a legal malpractice action must present evidence in admissible form establishing that the plaintiff is unable to prove at least one of these essential elements” (Alizio v Feldman, 82 AD3d 804, 804; see Smith v Kaplan Belsky Ross Bartell, LLP, 126 AD3d 877; Affordable Community, Inc. v Simon, 95 AD3d 1047).

Here, the plaintiffs alleged that the defendants Steven Decker, Esq., and Decker, Decker, Dito & Internicola, LLP (hereinafter together the Decker defendants), represented them in a real estate venture in which the plaintiff Nicholas Antonelli loaned the defendant Steven Guastamacchia the sum of $600,000, and that the plaintiffs sustained damages when Guastamacchia failed to repay the loan. In support of their motion for summary judgment dismissing the complaint, the Decker defendants established, prima facie, that even if they ” failed to exercise the ordinary [*2]reasonable skill and knowledge commonly possessed by a member of the legal profession'” (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442, quoting McCoy v Feinman, 99 NY2d at 301-302), any such failure was not a proximate cause of the plaintiffs’ alleged damages when Guastamacchia did not repay the loan. In opposition, the plaintiffs failed to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557, 562; Hashmi v Messiha, 65 AD3d 1193, 1195; see also Unger v Paul Weiss Rifkind Wharton & Garrison, 265 AD2d 156).”

Invoking Legal Malpractice as a Weapon

Posted in Legal Malpractice Cases

Attorneys who are the subject of counter-claims of legal malpractice often denigrate the quality of the counterclaim by arguing that it merely a reflexive way of not paying their bill.  Sometimes they are right, which devalues the balance of well-pleaded legal malpractice claims.  Sometimes the threat of a legal malpractice case has even shakier footing.  Here is an example.

Zappin v Comfort  2015 NY Slip Op 51339(U)  Decided on September 18, 2015  Supreme Court, New York County  Cooper, J. is the story of a husband-father-lawyer who was recently sanctioned for what the court found to be outrageous conduct, including threats of a legal malpractice case against the attorney for the child.  The entire decision deserves to be read.

“More often than not, it is a problem when lawyers choose to represent themselves in their own lawsuits. As no less an authority than the United States Supreme Court has written, “[t]he adage that a lawyer who represents himself has a fool for a client’ is the product of years of experience by seasoned litigators” (Kay v Ehrler, 499 US 432, 437 [1991]). In the words of the High Court, an attorney appearing pro se is “deprived of the judgment of an independent third party in framing the theory of the case, evaluating alternative methods of presenting the evidence, cross-examining hostile witnesses, formulating legal arguments, and making sure that reason, rather than emotion, dictates the proper tactical response to unforseen developments in the court room” (id.).

Despite the Supreme Court’s admonition, it is all too common for spouses who are lawyers to represent themselves in divorce proceedings. Because matrimonial practice is a specialized area of the law, with its own rules and ways, most lawyers who attempt to proceed pro se find themselves ill-equipped to competently handle the procedural and/or substantive aspects of their divorce cases on their own. And because a contested divorce is almost guaranteed to be emotionally charged, a self-represented lawyer may be hard-pressed to summon the level of rational thought and independent judgment that is required of a capable litigator.

This divorce case, unfortunately, presents a situation where an attorney has used his pro se status to inflict harm on his wife, their child and the court, and in so doing has caused significant harm to himself. Plaintiff, Anthony Zappin, an attorney admitted to practice in the courts of the State of New York, is a lawyer at a major law firm where he specializes in patent infringement litigation. He has chosen to be his own attorney in an action where his access to the parties’ infant son is a central issue and where there are allegations of domestic violence.[FN1] Rather than act in a constructive manner, plaintiff has done everything in his power to undermine the legal process and use his law license as a tool to threaten, bully, and intimidate. As will be discussed below in further detail, his ill-advised behavior seriously calls into question his fitness to practice law. It is also, according to defendant and the attorney for the child, indicative of a personality that makes plaintiff incapable of properly parenting the parties’ child.

As a direct result of plaintiff’s conduct in this case, the attorney for the child, Harriet N. Cohen, Esq., (the “AFC”) has been forced to bring the two motions that are now before the court. The first motion (Motion Sequence 19) is to quash a subpoena served on her by plaintiff. The second motion (Motion Sequence 21) is for permission to communicate with the New York State Office of Professional Medical Conduct (the “OPMC”) and to release court documents in connection with a disciplinary complaint plaintiff filed with the OPMC against the psychiatrist she retained as an expert witness, as well as to require plaintiff to bear responsibility for the legal fees her expert incurs and financial losses suffered with regard to plaintiff’s complaint. The AFC also asks the court to impose financial sanctions against plaintiff pursuant to 22 NYCRR 130-1.1 as a result of his actions with respect to her expert and his overall misconduct throughout the pendency of the divorce action.”

“Plaintiff’s efforts to rid himself of the AFC have not been limited to the multiple motions for disqualification that he has made to both Justice Kaplan and me — including part of his cross-motion here — but rather, those efforts have extended to tactics designed to extort, bully, and intimidate. The first was to intentionally violate Justice Kaplan’s order that he share the cost of Ms. Cohen’s services equally with defendant. He did so by refusing to pay even one dollar of the fees incurred by Ms. Cohen for her services, even as his onslaught of motions directed at her clearly caused her to expend substantial time and effort to oppose them. The idea, it appears, was to inflict financial hardship on the AFC, so that she would be unable to discharge her duty to represent the child’s interests.

When the AFC demanded payment, plaintiff responded with a threatening letter. The letter, dated February 12, 2015, which I referred to in my July 22, 2015 decision, contains the following passage:

I want to be clear, this letter is the first instance in which I am telling you that I will not pay your invoices. And, it is for the very justifiable reason that supervised visitation — which you have advocated for without any record in the case — has made me indigent.[FN4] More importantly, at each [*6]appearance, you have inappropriately threatened me with “judgments.” Putting aside the lack of respect and cordiality you have displayed to a fellow member of the bar, you are more than welcome to seek judgments against me if you feel it is appropriate. However, you should be aware that any such attempt will be swiftly and publicly met with claims against you and your firm for fraud, tortious interference with parental rights, legal malpractice and disgorgement, among others.

In spite of the threats made to her by plaintiff, the AFC pressed her claim by moving for an order directing plaintiff to pay her the many thousands of dollars that he owes. True to his word, plaintiff responded by “swiftly and publicly” retaliating against Ms. Cohen and her law firm. He did so by having Zappin Enterprises, a company which lists plaintiff and his father as its owners and plaintiff as its designated agent, and is run from the same West Virginia address where plaintiff claimed to have lived when he left New York, register the internet domain name “Harriet Newman Cohen” is the AFC’s full name.

The purpose of the website was chillingly clear from various postings made under the plaintiff’s father’s name. Illustrative of these postings, and indicative of the whole nature of the enterprise, are the following messages:

Harriet. You’re a very sick and greedy woman. I pray for you and hope you seek help.

I intend to keep the public apprised of your misconduct and disturbing behavior.

Quickly climbing up the Google rankings. Stay tuned for updates.”



An Attorney Fee Case Turns Into a Border War

Posted in Legal Malpractice Cases

Balestriere PLLC v Banxcorp   2014 NY Slip Op 32941(U)  November 17, 2014  Supreme Court, New York County  Docket Number: 650919/10  Judge: Joan A. Madden is yet another example of how an attorney fee-dispute can morph into a much larger case, and sometimes a real problem for the attorney.

“The Firm was retained by defendants in or about 2007, in connection with the New Jersey action, which is an antitrust suit arising out of Bankrate’s alleged misconduct, including price fixing and profit sharing agreements with competitors. This action arises out of the refusal of  defendants BanxCorp and Mehl to pay for legal services provided by plaintiff on their behalf in the New Jersey action. In support of its motion to compel defendants to produce the transcript of Mehl ‘s testimony in the New Jersey action, plaintiff argued that such transcript is relevant to the issue of the value of the services the Firm provided to defendants in the New Jersey action, and the issue of whether it was terminated for cause. Plaintiff also noted that the judge in the New Jersey action informed counsel during a conference call “that he would take no action with respect to the transcript until he received an order from this court compelling its production. Defendants opposed the motion to compel arguing, inter alia, that the transcript was the subject to the confidentiality order in the New Jersey action and was not relevant to the issues in this action. In the alternative, defendants argued that if the motion were granted, they should be able to amend their answer to reinstate their defense of termination for cause based on the Firm’s argument that the transcript was relevant to this issue.

Defendants now seek to serve a proposed amended answer which, in addition to a proposed first affirmative defense seeking to bar plaintiffs claim for quantum meruit based on allegations of termination for cause, also seeks to add a second affirmative defense that it has 2 [* 2] been damaged by the Firm’s alleged incompetence and poor work product, and a third and fourth defense alleging that certain evidence supporting plaintiff’s claims constitutes hearsay. The Firm opposes the motion, arguing that defendants now seek to add affirmative defenses not allowed by the June 6 order, which only gave defendants leave to renew with respect to the first of the four proposed affirmative defenses. The Firm al,so argues that the proposed affirmative defenses are without merit, noting that in its decision and order dated October 11, 2011, this court dismissed affirmative defenses and counterclaims based on the same or similar allegations made in support of the proposed affirmative defenses. As for the proposed third and fourth affirmative defenses, which allege, respectively, that plaintiff’s bill for services constitute inadmissible hearsay, and that plaintiff’s claim against Mehl is based on inadmissible hearsay, plaintiff argues that these affirmative defenses are improper as they relate to evidentiary issues.”

“The court also rejects the Firm’s argument that termination without cause is not a proper affirmative defense as plaintiff must show that it was not terminated for cause as part of its prima facie claim for recovery on the basis of quantum meruit. To state a cause of action for quantum meruit, a plaintiff must allege “( 1) the performance of services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services.” Fulbright & Jaworski, LLP v. Carucci, 63 AD3d 487, 489 (1st Dept 2009). While the reasons for the Firm’s termination may relate to the first element of the claim, the court finds that defendants should be permitted to assert termination for cause as an affirmative defense, particularly as such defense is not prejudicial to plaintiff. See generally Butler v. Cantinella, 58 AD3d 145 (2d Dept 2008); but see American Horse Show Ass’n Inc v. Ward, 186 Misc2d 571 (Sup Ct NY Co. 2000). ”

“Next, defendants’ request, pursuant to CPLR 5015(a)(3) 1 , to vacate the June 6 order directing Mehl to turn over his deposition transcript in the New Jersey action on the ground that it was procured by fraud and/or misconduct is without merit. Defendants argue that the June 6 order was procured by fraud as the attorneys for the Firm in this action did not inform this court or the Federal District Court in New Jersey that counsel was not licensed to practice law in New Jersey including in connection with their arguments made to the judge presiding over the New Jersey action. As counsel for plaintiff notes in opposition to the request to vacate the June 6 order, when addressing the court in the New Jersey action, counsel indicated that it represented plaintiff in this action and did not seek to appear in the New Jersey action. Notably, defendants do not argue that plaintiff sought relief from this court without knowledge of the New Jersey court. In fact, the record reveals otherwise. Accordingly, since defendants have not shown that the June 6 order was procured by fraud or misconduct, there is no basis for vacating the June 6 order under CPLR 5015(a)(3). See ~Jericho Group, Ltd. v. Midtown Dev., L.P., 47 AD3d 463 (1 51 Dept 2008)(vacatur of judgment under CPLR 5015(a)(3) is inappropriate in the absence of a showing that alleged fraud goes to the “very means by which the judgment is procured”)(internal citations omitted); Aames Capital Corp. v. Davidsohn, 24 AD3d 474 (2d Dept 2005)(defendant in foreclosure action not entitled to vacatur of default judgment where he offered only unsubstantiated allegations of fraud by plaintiff). “

First, the Attorney Must Prove It Did No Wrong

Posted in Legal Malpractice Cases

Harris Beach PLLC v Eber Bros. Wine & Liq. Corp.  2014 NYSlipOp 06704 [121 AD3d 1524]
October 3, 2014  Appellate Division, Fourth Department is an interesting case in which the Third Department briskly reversed the order of Supreme Court.  Harris Beach is a large powerful upstate law firm, and it sued for close to $1 Million in fees.  Supreme Court granted Harris Beach partial summary judgment, but the Third Department saw things differently.  It held that plaintiff law firm failed to demonstrated that it did no wrong, hence, partial summary judgment was inappropriate.

“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 its answer, defendant denied that it “failed to pay any legal bills justly due to [plaintiff].” Defendant also asserted 10 affirmative defenses, only two of which are relevant on appeal. In the fifth affirmative defense defendant alleged that plaintiff’s claims are barred by the doctrine of unclean hands, and in the sixth affirmative defense defendant alleged that any recovery by plaintiff must be reduced by sums presently owing or found to be owed to defendant arising from plaintiff’s professional negligence and breach of fiduciary duty. Defendant also asserted two counterclaims, including a counterclaim for professional negligence alleging, in relevant part, that plaintiff was negligent in failing to provide defendant’s insurer with timely notice of the claim that was the underlying action. Defendant alleged that, had plaintiff given timely notice of the claim, coverage for defendant in that matter would not have been denied and, “[defendant’s] insurer would have advanced the very defense costs that [plaintiff] now seeks to recover from [defendant].” Plaintiff thereafter moved for partial summary judgment dismissing the subject affirmative defenses as well as the subject counterclaim insofar as it is based on the alleged late reporting of the underlying action. Supreme Court granted the motion, and we reverse.

In order to establish legal malpractice by plaintiff, defendant “ ’must demonstrate that [plaintiff] failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession’ and that [plaintiff’s] breach of this duty proximately caused [defendant] to sustain actual and ascertainable damages . . . To establish causation, [defendant] must show that [it] would have prevailed in the underlying action or would not have incurred any damages, but for [plaintiff’s] negligence” (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]; see Utica Cutlery Co. v Hiscock & Barclay, LLP, 109 AD3d 1161, 1161 [2013]). In the context of this motion by plaintiff for partial summary judgment, the burden was on plaintiff to present “evidence . . . in admissible form establishing that [defendant] is unable to prove at least one of [the] essential elements of a malpractice cause of action” (Ippolito v McCormack, Damiani, Lowe & Mellon, 265 AD2d 303, 303 [1999]; see Compis Servs., Inc. v Greenman, 15 AD3d 855, 855 [2005], lv denied 4 NY3d 709 [2005]). More specifically, plaintiff was required to establish in this case that, even if plaintiff had timely tendered defendant’s defense in the underlying action, defendant’s insurer would nothave furnished defense dollars in the underlying action, and thus that defendant could not have been harmed by plaintiff’s untimely notice of the underlying action. We conclude that plaintiff failed to do so and that the court therefore erred in granting the motion.”

A One-Two Knockout in a Legal Malpractice Case

Posted in Legal Malpractice Cases

Sometimes what appears to be a clear and convincing description of a mistake by an attorney fails to elicit approval from Supreme Court or from the Appellate Division.  One reads the introduction to a decision, and it’s almost -wham- “that sounds like a real departure”.  Then you read the balance of the decision, and the Court is unmoved.  So, Barouh v Law Offs. of Jason L. Abelove
2015 NY Slip Op 06770  Decided on September 16, 2015  Appellate Division, Second Department and Barouh v Law Offs. of Jason L. Abelove   2015 NY Slip Op 06769  Decided on September 16, 2015  Appellate Division, Second Department tell a complete story of what the Courts thought was a speculative claim.

The facts are simple.  Plaintiff hired defendant attorney to represent him when he sued a corporation.  Plaintiff won the first case.  After the case, the attorney did some work for the corporation.  Somewhat later Plaintiff hired the attorney to sue the corporation again.  This time the corporation claimed that the conflict of interest poisoned the litigation.  Plaintiff had to pay legal fees but eventually won the right to sue.  He claimed the attorney did not disclose his conflict, which cost plaintiff money and time.  Good case, no?

When the court was presented with a motion to dismiss, it ended the Judiciary Law§ 487 claims but left the legal malpractice case intact.

When the Court was presented with a motion for summary judgment, it ended the case.

“To recover damages for legal malpractice, a plaintiff must establish that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (see Smith v Kaplan Belsky Ross Bartell, LLP, 126 AD3d 877). 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 attorney’s negligence” (id. at 878). “To succeed on a motion for summary judgment, the defendant in a legal malpractice action must present evidence in admissible form establishing that the plaintiff is unable to prove at least one of these essential elements” (Verdi v Jacoby & Meyers, LLP, 92 AD3d 771, 772 [internal quotation marks omitted]).

Here, the defendants met their initial burden of demonstrating, prima facie, that the plaintiff cannot establish that but for Abelove’s conduct, the plaintiff would not have incurred damages in defending against the BEA defendants’ motion to dismiss (see Alaimo v Mongelli, 93 AD3d 742, 744; Pistilli Constr. & Dev. Corp. v Epstein, Rayhill & Frankini, 84 AD3d 913, 914; see also Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 848). In opposition, the plaintiff failed to raise a triable issue of fact (see generally Zuckerman v City of New York, 49 NY2d 557, 562). In addition, [*2]the defendants established that they were entitled to summary judgment dismissing the cause of action alleging breach of fiduciary duty, as this claim is based upon the same alleged acts of legal malpractice (see Breslin Realty Dev. Corp. v Shaw, 72 AD3d 258, 261; Adamski v Lama, 56 AD3d 1071, 1072-1073; see also Boone v Bender, 74 AD3d 1111, 1113).

The plaintiff’s contention that the defendants’ motion for summary judgment was premature is improperly raised for the first time on appeal and, thus, not properly before this Court (see Aglow Studios, Inc. v Karlsson, 83 AD3d 747, 749).”