Attorneys have their own special obligations in handling financial matters for their clients. When they are told to wire money to a third party, they have some obligation to check on the bona fides of the recipient. They may not blindly follow wrongful or fraudulent orders. This is the reason we see summary judgment fail on appeal in Fidelity Natl. Tit. Ins. Co. of N.Y. v Lite & Russell, P.C. 2015 NY Slip Op 07616 Decided on October 21, 2015 Appellate Division, Second Department.
“In 2005, the defendants, Lite & Russell, P.C., and Justin Lite (hereinafter together the Lite defendants), represented Albarano Holding Corp. (hereinafter Albarano), a private mortgage lender, at a closing for a loan transaction. After the closing, the Lite defendants wired certain proceeds of the loan transaction to a Swiss bank account in Zurich, allegedly acting under the instructions of the purported borrowers. The individuals purporting to be the borrowers were later discovered to be imposters. Albarano then filed a claim with the plaintiff to recover the subject proceeds. The plaintiff paid Albarano, and thereafter commenced the instant action, as subrogee of Albarano, against the Lite defendants to recover damages, inter alia, for legal malpractice. The Lite defendants moved for summary judgment dismissing the complaint, and the Supreme Court granted the motion. We reverse the order insofar as appealed from.”
“Here, in support of their motion, the Lite defendants established, prima facie, inter alia, that Lite did not fail to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession (see Feldman v Finkelstein & Partners, LLP, 131 AD3d 505; Schiff v Sallah Law Firm, P.C., 128 AD3d 668). However, in opposition, the plaintiff raised a triable issue of fact, inter alia, as to whether Lite’s conduct in wiring the subject funds constituted legal malpractice and whether this conduct was a proximate cause of Albarano’s damages (see Blanco v Polanco, 116 AD3d 892, 894-895). Accordingly, the Supreme Court should have denied the Lite defendants’ motion for summary judgment.”