New York Attorney Malpractice Blog

New York Attorney Malpractice Blog

Matrimonial and Custody Damages are Difficult to Monetize in Legal Malpractice Cases

Posted in Legal Malpractice Cases

One of the four elements in legal malpractice is “ascertainable damages.”  They are more easily provable in some settings than in others.  Custody and matrimonial economic damages are very hard to demonstrate, as Miazga v Assaf  2016 NY Slip Op 01025  Decided on February 11, 2016
Appellate Division, Third Department shows us.

“Plaintiff retained defendants in January 2011 to represent him in a custody proceeding and, thereafter, in a divorce action. In April 2012, after a breakdown in the parties’ relationship, defendant Michael D. Assaf requested that defendants be relieved as plaintiff’s counsel and, after a hearing, the application to withdraw was granted. Plaintiff proceeded pro se in his divorce action and custody proceeding and, thereafter, commenced this action against defendants. In his complaint, plaintiff alleges, among other things, nine causes of action with respect to defendants’ representation, including, among other things, breach of a fiduciary duty, legal malpractice, defamation and breach of contract. Defendants asserted a counterclaim for, among other things, unpaid legal fees. Defendants moved for summary judgment dismissing the complaint, which plaintiff opposed. Plaintiff also cross-moved seeking partial judgment on the issue of liability for the disclosure of an allegedly privileged confidential email, among other things. Supreme Court granted defendants’ motion for summary judgment with respect to plaintiff’s claims of legal malpractice and breach of a fiduciary duty, [*2]fraud, defamation and failure to communicate, but denied the motion regarding plaintiff’s breach of contract claim with respect to defendants’ billing rates. Supreme Court also denied plaintiff’s cross motion. Plaintiff then moved to reargue and/or renew, in addition to moving for Supreme Court’s recusal. Supreme Court denied plaintiff’s motion, adhering to its original order. Plaintiff now appeals from both orders,[FN1] and defendants cross-appeal from that part of Supreme Court’s order as denied their motion for summary judgment dismissing the complaint [FN2]. We affirm both orders.”

“Here, defendants have sufficiently demonstrated that plaintiff was unable to prove actual and ascertainable damages relating to Assaf’s representation. Specifically, in the affirmation in support of the motion for summary judgment, defense counsel points out that, despite repeated requests, plaintiff never produced evidence supporting the damages that he specified in his bill of particulars and, therefore, failed to show that any such losses occurred. As such, we agree that defendants carried their burden of producing competent evidence sufficient to shift the burden to plaintiff to raise a triable issue of fact. For his part, plaintiff claims that he incurred damages including, but not limited to, $55,000 in fees to defendants, payment of experts, $20,000 in expenses, an unspecified amount of lost income and the amount of money “expended to overcome [defendants’] actions.” However, absent any proof of same in the record, these statements remain speculative assertions, which are insufficient to defeat a motion for summary judgment (see Place v Grand Union Co., 184 AD2d 817, 817 [1992])[FN5]. Thus, plaintiff failed to meet his shifted burden.

Further, setting aside plaintiff’s inability to raise an issue of fact with respect to the element of damages, summary judgment remains an appropriate remedy here inasmuch as plaintiff is also unable to sufficiently demonstrate that he would have been successful on the merits of his underlying action. In support of his opposition, plaintiff provided an affirmation by an expert, who stated that it is “arguable” that the custody matter would have been resolved more quickly had depositions occurred earlier. However, the expert could not state that plaintiff would have been ultimately successful. Thus, because plaintiff failed to produce evidence suggesting that, but for Assaf’s actions or inaction, the underlying matrimonial litigation would have resulted in a more favorable outcome (see Marchell v Littman, 107 AD3d 1082, 1084 [2013], lv denied 22 NY3d 856 [2013]; Sevey v Friedlander, 83 AD3d at 1227), Supreme Court properly granted defendants’ motion for summary judgment with respect to plaintiff’s legal malpractice claim.


Continuous Representation Still Exists, But Not In This Case

Posted in Legal Malpractice Cases

The statute of limitations for legal malpractice is three years under CPLR 214(6).  That statute may be tolled during the period of continuous representation.  Continuous representation, for social policy reasons, tolls the running of the statute so that a client is not required to sue the attorney while the representation continues on, allowing for the attorney to perhaps fix the mistake.  There must be a continuing relationship of trust and confidence between the client and the attorney with a common understanding that more work is expected in the case.

So, when does the continuing representation end?  Often, on the day that  a substitution and change of counsel is filed.  Sometimes the date of the end of the relationship is not so clear. O.K. Petroleum Intl., Ltd. v Palmieri & Castiglione, LLP  2016 NY Slip Op 00945  Decided on February 10, 2016  Appellate Division, Second Department is a case where plaintiff missed the mark by three days.  Just as in Aaron v. Roemerfiling of the consent to change attorney (in Aaron issuing of the order granting withdrawal) was not the operative date.  That date was 9 days earlier.

“Contrary to the plaintiffs’ contentions, the Supreme Court properly granted that branch of the defendant’s motion which was for summary judgment dismissing the cause of action to recover damages for legal malpractice as untimely (see Farage v Ehrenberg, 124 AD3d 159, 164; Aseel v Jonathan E. Kroll & Assoc., PLLC, 106 AD3d 1037, 1038; Rupolo v Fish, 87 AD3d 684, 685; Piliero v Adler & Stavros, 282 AD2d 511, 512). The defendant demonstrated that the alleged legal malpractice occurred more than three years before this action was commenced on June 11, 2012, through evidence showing that the plaintiffs had substituted counsel by June 3, 2009 (see CPLR 214[6]; Rupolo v Fish, 87 AD3d at 685). In opposition, the plaintiffs failed to raise a triable issue of fact as to whether the statute of limitations was tolled by the continuous representation doctrine until the formal notice of substitution was executed on June 12, 2009 (see Farage v Ehrenberg, 124 AD3d at 166; Rupolo v Fish,87 AD3d at 685).

An Obscure Reference to Judiciary Law 487 in the Withdrawal of an Attorney

Posted in Legal Malpractice Cases

Hudson v Hahn Kook Ctr. (USA), Inc.  2016 NY Slip Op 00882  Decided on February 9, 2016
Appellate Division, First Department presents us with an unusual setting for a Judiciary Law 487 claim.  This claim came up within the underlying case, and took place during the withdrawal of the attorney and his claim under Judiciary Law 475 for a charging lien.  Plaintiff countered that the attorney had “abandoned” it, and left it facing motions to dismiss for failures in discovery.  Was the law firm or the client responsible?  We don’t know, but the AD set up a hearing in Supreme Court.  However, it also set up a hearing on whether the law firm was deceitful in withdrawing.

“Order, Supreme Court, New York County (Debra A. James, J.), entered June 4, 2014, which denied nonparty appellant’s (Bernstone) motion to restore the action for the purpose of a hearing, pursuant to Judiciary Law § 475, to determine and fix the amount of its charging lien and, pursuant to Judiciary Law § 487, for treble damages from nonparty respondent (Ressler), unanimously reversed, on the law, without costs, and the motion granted to the extent of remanding the matter for a hearing to determine whether Bernstone is entitled to enforce its charging lien, and, if so, the amount of the lien, and to determine whether Bernstone is entitled to treble damages.

The court erred in summarily denying Bernstone’s motion to determine and fix its charging lien on the ground that Bernstone had abandoned plaintiffs by seeking to withdraw as counsel at a time when there were pending motions to dismiss the complaint for failure to comply with discovery orders (see Klein v Eubank, 87 NY2d 459 [1996]; Uni-Rty Corp. v New York Guangdong Fin., Inc., 126 AD3d 429 [1st Dept 2015]). The record presents issues of fact as to whether Bernstone abandoned plaintiffs or plaintiffs’ own dilatory conduct in seeking new counsel was the sole cause of the dismissal. Plaintiffs signed consents to Bernstone’s withdrawal as counsel, and did not dispute Bernstone’s assertion that the withdrawal was necessitated by disagreements between them and counsel. At the time it sought to withdraw, Bernstone informed the court that there were motions pending, and, according to one of its attorneys at oral argument on February 26, 2013, also informed the court at that time, in an off-the-record exchange, that [*2]these motions were unopposed. Moreover, at the time it withdrew, Bernstone sought and received a stay on plaintiffs’ behalf to give them time to retain new counsel. However, approximately 3½ months after Bernstone was relieved, despite having received three adjournments of the motions, plaintiffs appeared in court without counsel, and the court granted the still unopposed motions.”

A Matrimonial Legal Malpractice Claim Dismissed

Posted in Uncategorized

It wasn’t the pleading of the claim, and it wasn’t merely that the claim was settled.  The Appellate Division, 4th Department found that Counter-claimant wife could not get past a speculative description of damages in Chamberlain, D’Amanda, Oppenheimer & Greenfield, LLP v Wilson  2016 NY Slip Op 00841  Decided on February 5, 2016  Appellate Division, Fourth Department.

“Plaintiff commenced this action to recover unpaid legal fees, and defendant interposed a counterclaim for legal malpractice alleging, inter alia, that plaintiff was negligent in representing her in the negotiation and settlement of her underlying matrimonial action. Defendant and her former husband settled the matrimonial action by a written separation agreement filed July 21, 2009, they were divorced by a judgment entered November 30, 2009, and the separation agreement was incorporated into the judgment of divorce. The findings of fact and conclusions of law underlying the judgment of divorce recited that the separation agreement was “fair and reasonable when made and is not unconscionable.” The separation agreement deferred resolution of any personal property issues, but afforded defendant and her former husband the opportunity to settle the issues on their own in “good faith.” They were unable to resolve the personal property issues on their own and therefore made an application to Supreme Court to determine the issues. In addition to resolving the personal property issues, the court denied defendant’s request for counsel fees, expert fees, and moving and storage costs. We affirmed that order on appeal (Wilson v Wilson, 128 AD3d 1326).”

“Defendant contends, inter alia, that but for plaintiff’s alleged negligence she would have received a more favorable result had she proceeded to trial. Generally, “to recover damages for legal malpractice, a [client] must prove (1) that the [law firm] failed to exercise that degree of care, skill, and diligence commonly possessed by a member of the legal community, (2) [*2]proximate cause, (3) damages, and (4) that the [client] would have been successful in the underlying action had the [law firm] exercised due care” (Iannarone v Gramer, 256 AD2d 443, 444; see Blank v Harry Katz, P.C., 3 AD3d 512, 513). In a legal malpractice action in which there was no settlement of the underlying action, it is well settled that, “[t]o obtain summary judgment dismissing [the] complaint . . . , a [law firm] must demonstrate that the [client] is unable to prove at least one of the essential elements of its legal malpractice cause of action” (Boglia v Greenberg, 63 AD3d 973, 974; Ehlinger v Ruberti, Girvin & Ferlazzo, 304 AD2d 925, 926). A settlement of the underlying action does not, per se, preclude a legal malpractice action (see Schiff v Sallah Law Firm, P.C., 128 AD3d 668, 669). Where, as here, however, the underlying action has been settled, the focus becomes whether “settlement of the action was effectively compelled by the mistakes of counsel” (Bernstein v Oppenheim & Co., 160 AD2d 428, 430; see Tortura v Sullivan Papain Block McGrath & Cannavo, P.C., 21 AD3d 1082, 1083, lv denied 6 NY3d 701). Where the law firm meets its burden under this test, the client must then provide proof raising triable issues of fact whether the settlement was compelled by mistakes of counsel, and “[m]ere speculation about a loss resulting from an attorney’s [alleged] poor performance is insufficient” (Antokol & Coffin v Myers, 30 AD3d 843, 845). Conclusory allegations that merely reflect a subsequent dissatisfaction with the settlement, or that the client would be in a better position but for the settlement, without more, do not make out a claim of legal malpractice (see Boone v Bender, 74 AD3d 1111, 1113, lv denied 16 NY3d 710).

Here, we conclude that plaintiff met its burden by establishing that it did not fail to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the separation agreement was not the product of any mistakes of counsel (see Schiff, 128 AD3d at 669; Boone, 74 AD3d at 1113; cf. Steven L. Levitt & Assoc., P.C. v Balkin, 54 AD3d 403, 406). The separation agreement recited, inter alia, that defendant understood the terms and conditions of the agreement, freely and voluntarily accepted such terms, and believed it to be fair, adequate, and reasonable. Plaintiff further established that the separation agreement was in many respects financially favorable to defendant. Thus, we conclude that plaintiff thereby shifted the burden to defendant to raise a triable issue of fact (see Schiff, 128 AD3d at 669-670).

We conclude that, on this record, defendant’s contentions that after a trial the court would have, inter alia: required her former husband to pay all of her counsel fees; awarded her a share of the alleged increased value of her former husband’s business; and awarded her lifetime maintenance, are speculative and conclusory (see Sevey v Friedlander, 83 AD3d 1226, 1227, lv denied 17 NY3d 707;Boone, 74 AD3d at 1113), and are insufficient to raise a triable issue of fact.”

Unexplained and Unusual Collateral Estoppel in a Legal Malpractice Case

Posted in Legal Malpractice Cases

Generally speaking, there is no collateral estoppel defense available to defendant attorneys in a legal malpractice case.  They often say, for example, that because a case was dismissed, it’s your fault, not theirs, and hence you should not be able to sue them for the bad outcome.  Their legal argument is that you are collaterally estopped from raising the fault argument because you had a full and fair opportunity to litigate the matter, and you lost.  The countervailing and generally successful argument, is that the defendant attorney had his hand in the dismissal, which would not have taken place except for mistakes made by the attorneys.

Kinberg v Schwartzapfel, Novick, Truhowsky, Marcus, PC     2016 NY Slip Op 00757  Decided on February 4, 2016 Appellate Division, First Department is the rare counter-example, and we guess (because the AD did not take the time to explain) that the defendant attorneys were succeeded by subsequent attorneys who were on the job when the dismissal occurred.  Out guess is buoyed by the term “which represented her in the course of her prior personal injury action.”

Anyway, the import of this case is that this law firm is not to blame for the failures in discovery, (maybe a subsequent law firm was) and so, obtains dismissal.

“Plaintiff asserts a cause of action for legal malpractice against defendant law firm, which represented her in the course of her prior personal injury action. That action was dismissed after plaintiff failed to comply with discovery demands in a conditional order of preclusion (see Kinberg v Shnay, 25 Misc 3d 138[A] [App Term, 1st Dept 2009]). The order dismissing plaintiff’s prior action based on her violation of the preclusion order is entitled to preclusive effect in this subsequent action (see Strange v Montefiore Hosp. & Med. Ctr., 59 NY2d 737 [1983]; Kanat v Ochsner, 301 AD2d 456, 458 [1st Dept 2003]; see also Santoli v 475 Ninth Ave. Assoc., LLC, 38 AD3d 411, 417 [1st Dept 2007]). Moreover, plaintiff’s motion to vacate the order dismissing her prior action was denied for failure, inter alia, to establish the merits of her underlying personal injury claim, and that order was affirmed by the Appellate Term. Plaintiff is collaterally estopped from relitigating the merits of her underlying personal injury claim, since she had a full and fair opportunity to litigate the issue in the prior action (see Ryan v New York Tel. Co., 62 NY2d 494, 500 [1984]; Rosenkrantz v Harriet M. Steinberg, P.C., 13 AD3d 88 [1st Dept 2004], lv dismissed in part denied in part 5 NY3d 729 [2005]). Therefore, plaintiff is unable to establish in this action that “but for” the attorney’s negligence, she would have prevailed in the underlying matter, and her legal malpractice action against defendants was properly dismissed (Brooks v Lewin, 21 AD3d 731, 734 [1st Dept 2005], lv denied 6 NY3d 713 [*2][2006]; and see AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007]).”

If You See Something Say Something Does Not Apply to Legal Malpractice Cases

Posted in Legal Malpractice Cases

The confluence of First Amendment rights, the overarching current need for celebrity and self-promotion appear to have collided in a case where plaintiff retained attorneys to represent him, then resolved the case, and decided to speak to the Wall Street Journal in violation of a non-disparagement provision of the underlying contract.  Result: bad for the client.

Barr v Liddle & Robinson, LLP  2016 NY Slip Op 00744  Decided on February 4, 2016
Appellate Division, First Department tells us that such conduce can be actionable.  “Plaintiff alleges that he would not have lost his contractual right to certain deferred compensation if his attorneys had not acted negligently in speaking to the Wall Street Journal, in violation of the non-disparagement provision of the contract. These allegations state a cause of action for legal malpractice (see Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 49-50 [2015]). The documentary evidence submitted by defendants fails to establish a defense as a matter of law (see Leon v Martinez, 84 NY2d 83, 88 [1994]). As the motion court found, neither the arbitration award nor the subsequent opinions submitted by defendants unequivocally contradict plaintiff’s claim that, but for defendants’ alleged negligent conduct, he would not have lost his contractual benefit. Moreover, it does not matter whether the arbitration decision was reached on the merits or under a procedural bar to considering the deferred compensation issue in the arbitration.”


In Pari Delicto and the World of Malpractice

Posted in Uncategorized

Whether in legal malpractice, accounting malpractice or legal malpractice about an accounting malpractice claim, In Pari Delicto is a powerful defense widely wielded by defendants.  They say, in essence, we sued a wrongdoer, but failed.  Now you (the wrongdoer’s employer) sue us.  Courts should not intervene between two wrongdoers, and that’s what you are asking them to do!

Stokoe v Marcum & Kliegman LLP  2016 NY Slip Op 00587  Decided on January 28, 2016
Appellate Division, First Department is opaque, and requires multiple readings, but its lesson is that “complete diversity” is required.  This does not refer to “diversity of citizenship” but rather to complete diversity that the wrongdoer’s acts were not performed in aid of the employer; they were performed solely in aid of the wrongdoer.

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

Legal Malpractice Gone; Other Claims Still Here

Posted in Legal Malpractice Cases

Skarla v NPSFT LLC   2016 NY Slip Op 30152(U)  January 27, 2016  Supreme Court, Queens   County  Docket Number: 90/14  Judge: Allan B. Weiss  takes a long time to explain, but its all about real estate, and the desire to take over some juicy properties.  Did the attorney wrongfully help out?   That’s still to be decided, but while the legal malpractice case is gone, breach of fiduciary duty and other claims remain.

“Plaintiff commenced this action on January 6, 2014, asserting various claims, including causes of action against defendants Golfinopoulos for breach of fiduciary duty, fraud in the inducement, constructive fraud, fraudulent concealment, unjust enrichment, and constructive trust. Plaintiff sought to set aside the judicial sale of the real properties known as 329 150 Street, Whitestone, New York (Block 4507, Lot 8) (the Whitestone property) th (a residential property) and 23-33 31 Street, Long Island City, New York (Block 835, Lot st 25) (the Long Island City property) (a commercial mixed-use property) (together “the mortgaged premises”) held on May 3, 2013 pursuant to the judgment of foreclosure and sale entered in the action entitled Eldridge Properties, Inc. v Skarla, (Supreme Court, Queens County, Index No. 10936/2007) (the foreclosure action), void the referee’s deed to Eldridge Properties, Inc. (Eldridge), and the deeds from Eldridge to NPSFT LLC (NPSFT) and NPSFT 1 LLC (NPSFT1) (the NPSFT entities), impose a constructive trust on the Whitestone and Long Island City properties, pierce the veils of the corporate defendants so as to recover damages individually from their officers, directors and employees, and for injunctive relief. Plaintiff alleged that due to the purported wrongful acts of defendants, she was unlawfully deprived of the Whitestone and Long Island City properties, and equity therein, through foreclosure and sale in the foreclosure action.”

“Thereafter, by order dated July 28, 2014, the action entitled Skarla v Golfinopoulos (Supreme Court, Index No. 7649/2014) was consolidated with the instant action. In that second action (Index No. 7694/2014), plaintiff Helen Skarla named Kostas Golfinopoulos, Esq. and Steven W. Stutman, Esq. as party defendants and asserted causes of action against defendant Golfinopoulos for legal malpractice and “attorney misconduct and deceit,” and sought compensatory, consequential, punitive and treble damages. By order dated December 8, 2014, the complaint insofar as asserted against defendant Steven Stutman, Esq. was dismissed and the remainder of the action was severed. Meanwhile, by order dated October 17, 2014 in the foreclosure action, the judicial sale of the Whitestone and Long Island City properties was vacated, and the referee’s deed to Eldridge, and the subsequent deeds dated June 5, 2013 from Eldridge were stricken from the records of the City Register. By virtue of the vacatur of the foreclosure sale and setting aside of the deeds, record title of the mortgaged premises was returned to plaintiff.”

“Defendants Golfinopoulos assert that because the foreclosure sale of the properties and the deeds have been set aside, plaintiff has suffered no cognizable injury to support the remainder of the causes of action (i.e., those portions not barred by the applicable statutes of limitations) based upon breach of fiduciary duty and fraud insofar as asserted against them. In an action for breach of fiduciary duty or fraud, injury is a required element of the cause of action (see Lama Holding Co. v Smith Barney, 88 NY2d 413, 421 [1996]; Channel Master Corp. v Aluminium Ltd. Sales, 4 NY2d 403, 407 [1958]; Kurtzman v Bergstol, 40 AD3d 588, 590 [2d Dept 2007]). Plaintiff alleges that during the period of the engagement of defendants Golfinopoulos, Golfinopoulos schemed with Steven Louros, Esq. to defraud her and enable defendants Eldridge and the NPSFT entities, companies with whom Golfinopoulos was purportedly associated, to acquire the mortgage loan and obtain the properties at a severely discounted value at foreclosure, and divest her of all ownership interest. Plaintiff also alleges that defendants Golfinopoulos breached their fiduciary duties to her by engaging in selfdealing and acting for the benefit of defendants Eldridge and the NPSFT entities rather than for her benefit. According to plaintiff, defendants Golfinopoulos conspired with Louros to acquire the note and mortgage on behalf of defendant Eldridge, and then received disbursed moneys from defendant Eldridge after the transfer of the parcels to the NPSFT entities. She alleges she suffered injuries including becoming homeless as a result of the reliance on the alleged advice of defendants Golfinopoulos to rent out her home in an effort to generate income, incurring legal fees to defendants Golfinopoulos relative to their representation of her in connection with the foreclosure action, incurring of expenses and legal fees related to the efforts to set aside the foreclosure sale and subsequent deeds, and incurring, during the period of her divestment of title, water damage to and building violations on the Whitestone property. Plaintiff hence has sufficiently alleged the element of injury to state causes of action based upon breach of fiduciary duty and fraud insofar as asserted against defendants Golfinopoulos.”

A Judiciary Law 487 Claim Survives

Posted in Legal Malpractice Cases

Kagan Lubic Lepper Findelstein & Gold LLP v 325 Fifth Ave. Condominium  2015 NY Slip Op 31470(U) August 6, 2015   Supreme Court, New York County  Docket Number: 151878/15  Judge: Cynthia S. Kern is an example which will likely be cited in this years Legal Malpractice continuing legal education seminars as a reason not to sue clients over fees.  Fee suits invite legal malpractice counterclaims.  This one survived motions to dismiss.

“Specifically, defendants’ answer alleges as follows. Defendants hired Kagan Lubic in October 2012 to represent them as general counsel and in an action against the sponsor of 325 Fifth and certain subcontractors arising from the defective design, constr~ction, sale, marketing ·! ‘ and management of the condominium building located at 325 Fifth Avenue, New York, New York (the “building”), which was allegedly plagued with defects from th~ outset. Defendants allege that Kagan Lubic failed to take even the most basic steps to secure remedies against those responsible for the defective design and construction of the Building and that for nearly two  years, Kagan Lubic “churned the file” and generated enormous legal bills.through prolonged  negotiations and other pre-litigation tactics that were time consuming, costly and entirely ineffective, including, inter alia, (i) retaining duplicative, superfluous experts which caused defendants to incur thousands of dollars in additional fees; (ii) engaging in futile settlement discussions for nearly eighteen months; (iii) generating enormous legal fees by spending countless hours addressing inconsequential maintenance issues in the building which, in many instances, cost less to remediate than the time spent addressing them; (iv):frustrating any progress  toward reaching a settlement with the sponsor with respect to the maintenance issues by delaying nearly four months before responding to the sponsor’s offer to remediate certain conditions; (v) routinely raising additional maintenance issues which resulted in further delay and costs; and (vi) allowing nearly two years to lapse without filing a complaint in the action. Defendants further allege that “[b]ut for Kagan Lubic’s dilatory tactics, the defects in the Building would have been remediated by now, and the impaired value of the Condominium units in the Building resulting from the design and construction defects and ongoing litigation would have been restored.”

“In the instant action, defendants’ answer sufficiently states a claim for legal malpractice. The first counterclaim alleges that plaintiff committed legal failing to exercise the skill and ability reasonably to be expected from a duly licensed attorney and/or law firm engaged in the practice of law within the State of New York by, among other things, engaging in self serving dilatory tactics that were ineffective and designed to impede settlement discussions and timely resolution of the dispute in order to generate enormous legal fees and that as a result of said breach, defendants have been damaged. Specifically, defendants’ answer alleges that plaintiff negligently delayed the resolution of their claims against the sponsor and subcontractors only to increase their legal fees and that as a result, defendants have sustained damages, including, but not limited to, enormous legal fees and increased costs to investigate and address the defective conditions throughout the building, which include expert fees and rental fees for safety bridges and construction equipment. Additionally, defendants allege that as a direct result of plaintiffs willful delay of the underlying claims, the building’s defects have yet to be remediated and that the building’s value and defendants’ access to credit financing has been impaired. It is well-settled that allegations that an attorney unreasonably delayed the resolution of his client’s claims are grounds for malpractice sufficient to defeat a motion to dismiss. See Lappin v. Greenberg, 34 A.D.3d 277, 280 (1st Dept 2006)(“the complaint sufficiently asserts that defendants inordinate delay … resulted in a loss of principal attributable to defendants’ lack of professional diligence”); see also VDR Realty Corp. v. Mintz, 167 A.D.2d 986, 986-87 (4th Dept 1990)(“[factual allegations of the complaint to the effect that defendant attorney unreasonably delayed the prosecution of a landlord-tenant holdover proceeding and engaged in dilatory tactics, thereby increasing the attorney’s fee and causing other consequential damages, state a cause of action for legal malpractice.”) ”

“Here, defendants’ answer sufficiently states a claim for a violation of Judiciary Law§ 487(2). The second counterclaim alleges that plaintiff, instead of diligently and vigorously pursuing defendants’ legal claims against the sponsor and the subcontractors, engaged in selfserving dilatory tactics that were designed to impede settlement discussions and the timely resolution of the dispute “in order to generate enormous legal fees with a ;view to its own gain.” Specifically, defendants allege that they retained plaintiff in October 2012, after an action had been commenced by Summons with Notice in July 2012, and that from the outset of the representation, plaintiff”failed to take even the most basic steps to resolve [defendants’] claims” and that “[i]nstead, for nearly two years, [plaintiff] simply churned the file and generated enormous legal bills through prolonged negotiations and other pre-litigation tactics that were time consuming, costly, and entirely ineffective,” such as requiring additional unnecessary expert investigations, delaying filing a complaint for almost two years, stalling all opportunities to settle the underlying matter and continuing to attempt to settle the matter despite the knowledge that settlement attempts were futile. As these allegations are sufficient to state a claim for a violation of Judiciary Law§ 487, plaintiffs motion to dismiss the second counterclaim is denied. ”


Mostly Duplicitive, But Legal Malpractice Claim Survives

Posted in Legal Malpractice Cases

Mamoon v Dot Net Inc.  2016 NY Slip Op 00600  Decided on January 28, 2016  Appellate Division, First Department  is a casually written yet decisive decision from the Appellate Division, which basically keeps the legal malpractice cause of action and jettisons everything else as inappropriate (civil conspiracy) or  duplicitive.  Note the short sentence about the need for verification and “red herrings.”

“Mr. Moss submitted an affirmation, denying that the Moss defendants ever said they [*2]would act as plaintiff’s attorney. However, an affidavit — let alone an affirmation [FN1] — is not documentary evidence (see e.g. Flowers v 73rd Townhouse LLC, 99 AD3d 431 [1st Dept 2012]).

The fact that the Moss defendants represented Mridha does not preclude the possibility that they also represented plaintiff (see Talansky v Schulman, 2 AD3d 355, 359 [1st Dept 2003]; see also Leon,84 NY2d at 86-87, 90).

The October 2011 letter that plaintiff sent the Moss defendants did not utterly refute her “factual allegations, conclusively establishing a defense as a matter of law” (Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]). First, the fact that there was a meeting in April 2011 does not preclude the possibility that there was another meeting in May 2011. Second, plaintiff may simply have misremembered the date; she said in her affidavit, “on or about May 1, 2011″(emphasis added). Her confusion is understandable because she executed documents on April 11, 2011 which became effective on May 1, 2011. Moreover, she stated that her understanding of English is limited.

“In order to state a cause of action for legal malpractice, the complaint must set forth three elements: the negligence of the attorney; that the negligence was the proximate cause of the loss sustained; and actual damages” (Leder v Spiegel, 31 AD3d 266, 267 [1st Dept 2006], affd 9 NY3d 836 [2007], cert denied 552 US 1257 [2008]). If one considers the allegations in the claims for breach of fiduciary duty and negligence (as opposed to just the conclusory allegations in the malpractice claim), the complaint satisfies the requirements of Leder. Contrary to the Moss defendants’ claim, the documentary evidence does not show that plaintiff was paid in full for her Dot Net shares and therefore sustained no damages.

Unless a plaintiff alleges that an attorney defendant “breached a promise to achieve a specific result” (Sage Realty Corp. v Proskauer Rose, 251 AD2d 35, 39 [1st Dept 1998]), a claim for breach of contract is “insufficient” (id.) and duplicative of the malpractice claim (id. at 38-39). Plaintiff does not allege that the Moss defendants breached a promise to achieve a specific result. Hence, her contract claim should have been dismissed as against those defendants.

Plaintiff’s claims for breach of fiduciary duty and fraud are also duplicative of her malpractice claim (see e.g. Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 271 [1st Dept 2004]; Sage Realty, 251 AD2d at 39).

“[C]ivil conspiracy is not recognized as an independent tort in this State” (Shared Communications Servs. of ESR, Inc. v Goldman Sachs & Co., 23 AD3d 162, 163 [1st Dept 2005]). Therefore, that claim should have been dismissed.

It is true that “in considering a motion to dismiss brought pursuant to CPLR 3211(a)(7), the court must presume the facts pleaded to be true and must accord them every favorable inference” (Leder,31 AD3d at 267). However, “factual allegations … that consist of bare legal conclusions, or that are inherently incredible …, are not entitled to such consideration (id.). Plaintiff makes only conclusory, incredible allegations that the Moss defendants converted her money and were unjustly enriched. Rather, the factual allegations of the complaint and the documentary evidence show that Mridha owed plaintiff $75,000 for her Dot Net shares and was unjustly enriched because he did not pay her for them.”