A restaurant is sold without the owner’s permission and it sues the attorney whom it says was involved in the sale.  That case is dismissed, apparently on the ground that there was no attorney-client relationship between the corporation and the attorney.  This illustrates the principal of privity which requires that there be an actual attorney-client relationship, whether reduced to a writing or not, between plaintiff and defendant in a legal malpractice setting.

What’s a litigant to do?  Ricatto v Mapliedi  2015 NY Slip Op 08401  Decided on November 18, 2015  Appellate Division, Second Department provides one answer.  The individual (and presumed owner of the shares of the corporation) sues in his own name, “doing business as” the corporation.

“In a prior action, J & J Metro Restaurant, Inc., and Michael Ricatto alleged, among other things, that the defendant Robert F. Giusti had committed legal malpractice in connection with the sale of a restaurant owned by J & J Metro Restaurant, Inc. In an order dated July 31, 2013, the Supreme Court granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a) to dismiss the complaint in the prior action based upon the plaintiffs’ lack of standing. The plaintiffs’ motion for leave to reargue their opposition to that motion was subsequently denied.

Thereafter, Ricatto, doing business as J & J Metro Restaurant, commenced this action against, among others, Giusti, alleging the same causes of action as asserted in the prior action. As pertinent here, the complaint alleges that Riccatto was the owner of a restaurant which was sold without his permission and that Giusti committed legal malpractice in connection with the sale of the restaurant.

In the order appealed from, the Supreme Court granted that branch of Giusti’s motion which was pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against him as barred by the doctrine of res judicata, based upon the aforementioned orders issued in the prior action.

The doctrine of res judicata gives binding effect to the judgment of a court of [*2]competent jurisdiction and prevents the parties to an action, and those in privity with them, from subsequently relitigating any questions that were necessarily decided therein (see Moran Enters., Inc. v Hurst, 66 AD3d 972, 974). A party seeking to assert res judicata or claim preclusion must show the existence of a prior judgment on the merits (see Matter of Farkas v New York State Dept. of Civ. Serv., 114 AD2d 563, 554).

Here, Giusti has not demonstrated that a judgment on the merits exists between the same parties involving the same subject matter (see Laccone v Chalet, 128 AD3d 1020). Res judicata does not bar this action, as the disposition of the prior action was based upon a lack of standing only and the Supreme Court has not yet considered the merits of the allegations (see Landau, P.C. v LaRossa, Mitchell & Ross, 11 NY3d 8, 14; Matter of Schulz v State of New York, 81 NY2d 336). To the extent that Giusti argues, as an alternate ground for affirmance (see Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d 539), that the complaint should be dismissed insofar as asserted against him as barred by the doctrine of collateral estoppel, which issue had been asserted by Giusti in support of his motion to dismiss the complaint insofar as asserted against him, this contention is without merit. The dismissal of the prior action for lack of standing was not made on the merits and, therefore, a different judgment in the instant action would not “destroy or impair rights or interests established” in the prior action (Conason v Megan Holding, LLC, 25 NY3d 1, 18).

Accordingly, the Supreme Court should have denied that branch of Giusti’s motion which was pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against him as barred by the doctrine of res judicata.”

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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.