The headline is the story in a nutshell.  When a retail business is sold to a new owner, there will always be old sales taxes due to the State, even if only for the last quarter. A procedure exists so that the buyer can immunize itself from being responsible for the unpaid sales taxes of the seller, and if one adheres to the rule, there will be no problems.  Mission Cantina v Pan Asian Bistro Les, Inc.  2016 NY Slip Op 31570(U)  August 16, 2016  Supreme Court, New York County  Docket Number: 653581/2014 Judge: Debra A. James is an example.  One rule is that papers have to be filed prior to the sale of the business.  In this case, a bulk sales filing was made late, with a “backdated” type of filing.  Supreme Court does not seem to have picked up on this.  However, unless one can show malice, fraud or other unusual circumstances, one may not sue the opponent’s attorney.

“As to its complaint against Ahn, Buyer alleges that prior to the closing of the bulk sale transaction, which took place on July 8, 2013, Ahn, the attorney for the Seller, sent an e-mail message to defendant Elke E. Hofmann (“Hofmann”), the Buyer’s attorney, to which was attached a bulk sale notice that stated that the closing date was August 8, 2013. Buyer asserts that such date was a misstatement of the actual closing date, which took place a full month before such date. The complaint further alleges that after the closing, Ahn held $10,000 in her escrow account, which Ahn “finally paid on July 15, 2014” to the New York State Taxation and Finance Department (“Taxation Department”) toward the outstanding balance of sales taxes. Buyer also alleges that on October 3, 2013, eight months before remitting such payment, Ahn falsely advised Buyer’s counsel that the sale taxes for the restaurant that Seller, her client, collected prior to the bulk sale had been paid in full to the Tax Department and that Seller would provide a copy of the release that Seller received from the Taxation Department to Buyer. Such e-mail is attached to and incorporated by reference in the complaint.”

“The complaint does not contain any assertions as to the type of claim interposed against any of the defendants. The third cause of action, which is its only claim against Ahn, sounds in either legal malpractice, negligent representation and/or fraud against Ahn. As for any claims of legal malpractice or negligent representation, “[a]n attorney does not owe a duty of care to his adversary or one with whom he is not in privity” (Aglira v Julien & Schlesinger, PC, 214 AD2d 178, 183 [1st Dept 1995]). As in Aglira where the appellate court reversed the lower court’s denial of defendant law firm’s motion to dismiss the complaint of the underlying medical malpractice plaintiff against such attorneys who represented the medical doctors in that underlying action, here, there is no question that Ahn acted exclusively for her client, Seller, with respect to the bulk sale transaction, and therefore owed a duty of reasonable care only to Seller and owed no duty to Buyer, who was represented by attorney Hofmann. As to any fraud cause of action, as a matter of law, Buyer was not justified in relying upon the legal opinions or conclusions of his or her adversary counsel. Aglira, supra, at 185. Nor can Buyer claim to have consummated the bulk sale in justifiable reliance upon an e-mail message that Ahn sent months after the closing. Moreover, this court concurs with Ahn that the content of the e-mail from Ahn, which merely states that her client, Seller, advised Ahn both that the taxes were paid and that Seller received the release that Seller was trying to locate, disproves any alleged fraud or negligent representation on her part. ”

 

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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.