Genesis Merchant Partners, LP v Gilbride, Tusa, Last & Spellane LLC    2015 NY Slip Op 31080(U)    June 16, 2015 Supreme Court, New York County    Docket Number: 653145/2014    Judge: Nancy M. Bannon is as good an example of the “but for” rule as one might ever read.  Here is the story.  Plaintiff makes loans to a debtor, and hires Defendant attorneys to do the transactional work on the loan.  The loan has a security interest in real property, and the law firm forgets to file a mortgage for 18 months.  During that delay, other lenders file their liens, and “jump in line” ahead of Plaintiff.  When the foreclosure sale takes place there is not enough money to go around.

Problem for plaintiff is that it always knew it would be in second position, for a bank already had a first mortgage at the time of plaintiff’s loan.  At the foreclosure sale, no one except the bank received any money.  So, the Court held that no matter whether Defendant filed the mortgage on the day of the loan or 18 months later, Plaintiff would not have obtained any payment, either way.

“Gilbride produces the order of the Court of Common Pleas of Lancaster County, Pennsylvania, entitled “Absolute Confirmation of Distribution of Surplus Sale Proceeds,” from the Pennsylvania tax sale of the Pennsylvania property, which indicates that, of the $325,619.42 collected in the sale, $2,345.00 went to the Pennsylvania Department of Revenue, and $323,274.42 went to satisfy Farmer Boy’s lien placed on the property seven months before the closing of Loan 3. No other entity, including the mortgagees ahead of Genesis, obtained any sale proceeds. Although Genesis alleges that it received nothing as a result of the sale due to Gilbride’s failure to record the mortgage on the Pennsylvania property for a period of eighteen months, the documentation submitted by Gilbride establishes that Genesis did not suffer any losses due to Gilbride’s negligence. Rather, its losses were the result of the existence of a lienor with a greater claim to the sales proceeds than Genesis. Even if the mortgage had been recorded immediately after the closing of Loan 3, and even if Genesis’ lien sat directly after Farmer Boy as a lienor, Genesis would not have obtained any sale proceeds.

Because the documentary evidence establishes that there is no “but for” proximate cause, that portion of the first cause of action for legal malpractice seeking damages for Gilbride’s failure to record the mortgage is dismissed. See O’Callaqhan v Brunelle, 84 AD3d 581 (1st Dept. 2011 ). “

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Andrew Lavoott Bluestone

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened…

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened his private law office and took his first legal malpractice case.

Since 1989, Bluestone has become a leader in the New York Plaintiff’s Legal Malpractice bar, handling a wide array of plaintiff’s legal malpractice cases arising from catastrophic personal injury, contracts, patents, commercial litigation, securities, matrimonial and custody issues, medical malpractice, insurance, product liability, real estate, landlord-tenant, foreclosures and has defended attorneys in a limited number of legal malpractice cases.

Bluestone also took an academic role in field, publishing the New York Attorney Malpractice Report from 2002-2004.  He started the “New York Attorney Malpractice Blog” in 2004, where he has published more than 4500 entries.

Mr. Bluestone has written 38 scholarly peer-reviewed articles concerning legal malpractice, many in the Outside Counsel column of the New York Law Journal. He has appeared as an Expert witness in multiple legal malpractice litigations.

Mr. Bluestone is an adjunct professor of law at St. John’s University College of Law, teaching Legal Malpractice.  Mr. Bluestone has argued legal malpractice cases in the Second Circuit, in the New York State Court of Appeals, each of the four New York Appellate Divisions, in all four of  the U.S. District Courts of New York and in Supreme Courts all over the state.  He has also been admitted pro haec vice in the states of Connecticut, New Jersey and Florida and was formally admitted to the US District Court of Connecticut and to its Bankruptcy Court all for legal malpractice matters. He has been retained by U.S. Trustees in legal malpractice cases from Bankruptcy Courts, and has represented municipalities, insurance companies, hedge funds, communications companies and international manufacturing firms. Mr. Bluestone regularly lectures in CLEs on legal malpractice.

Based upon his professional experience Bluestone was named a Diplomate and was Board Certified by the American Board of Professional Liability Attorneys in 2008 in Legal Malpractice. He remains Board Certified.  He was admitted to The Best Lawyers in America from 2012-2019.  He has been featured in Who’s Who in Law since 1993.

In the last years, Mr. Bluestone has been featured for two particularly noteworthy legal malpractice cases.  The first was a settlement of an $11.9 million dollar default legal malpractice case of Yeo v. Kasowitz, Benson, Torres & Friedman which was reported in the NYLJ on August 15, 2016. Most recently, Mr. Bluestone obtained a rare plaintiff’s verdict in a legal malpractice case on behalf of the City of White Plains v. Joseph Maria, reported in the NYLJ on February 14, 2017. It was the sole legal malpractice jury verdict in the State of New York for 2017.

Bluestone has been at the forefront of the development of legal malpractice principles and has contributed case law decisions, writing and lecturing which have been recognized by his peers.  He is regularly mentioned in academic writing, and his past cases are often cited in current legal malpractice decisions. He is recognized for his ample writings on Judiciary Law § 487, a 850 year old statute deriving from England which relates to attorney deceit.