A Brooklyn Legal Malpractice Mess
Try to sort through Tolmosova v Umarova 2012 NY Slip Op 51921(U) Decided on October 1, 2012 Supreme Court, Kings County Schmidt, J. and you will see two things. There is a reason such a large percentage of new businesses fail. The second is that the hearing on this case must have been amazing.
"The complaint alleges five causes of action - the first four with respect to the signatories to the agreement. The first cause of action is alleged against Benyaminova for repayment of the promissory note; the second cause of action is alleged against Benyaminova for her share of the Avenue D property and business and/or her share of defendant Kids Kingdom (another daycare business); the third cause of action is alleged against Umarova for fraud and conversation for representing to plaintiff that she (Umarova) was the only person capable of obtaining the certificate of occupancy; and the fourth cause of action is alleged against Umarova for a judgment transferring 100% of the shares of Skazka III, Inc. to plaintiff.
The fifth cause of action alleges legal malpractice and breach of fiduciary duty against Mr. Popik in the drafting of the August 24, 2000 agreement. Specifically, the complaint alleges that Mr. Popik failed to exercise reasonable skill and knowledge commonly possessed by a member of the legal profession in representing multiple parties with potential conflicts of interest; failed to inform plaintiff of her right to have independent counsel review and evaluate the agreement, and discouraged her from doing so; and failed to provide plaintiff with a general waiver or release regarding representation of multiple parties in connection with the agreement. The complaint further alleges that Mr. Popik's negligence and breach of fiduciary duty caused plaintiff to sustain damages, including the [*4]loss of ownership and interest in the Avenue D and Avenue I premises.
In August, 2003, defendant filed a verified answer. Shortly thereafter, plaintiff discontinued this action against Benyaminova and did not pursue default judgments against co-defendants Skazka III, Inc., Kids Kingdom, Losyev, and Lilly Godzhinsky.
By order dated October 19, 2004, Hon. Francois A. Rivera granted the motion of Umarova to dismiss the third cause of action to the extent it sought damages for conversion as time-barred, and dismissed the third cause of action to the extent it sought damages for fraud for failure to state a cause of action. Subsequently, plaintiff abandoned the complaint against now deceased defendant Timur Umarov. It is undisputed that since the commencement of this action, plaintiff has not served any discovery demands upon any other defendant nor did she seek the deposition of Mr. Popik. "
"Here, Mr. Popik has demonstrated that the complaint fails to state a cause of action for legal malpractice and has made a prima facie showing entitling him to summary judgment dismissing the complaint insofar as asserted against him. In this regard, the complaint, along with the testimony of plaintiff, fails to demonstrate that the advice provided by defendant to plaintiff was the proximate cause of plaintiff's alleged damages and that plaintiff sustained actual and ascertainable damages.
Specifically, the first cause of action alleges that Benyaminova failed to pay plaintiff the amount set forth in the April 12, 2000 promissory note: $60,700.00, plus interest, costs and attorney's fees. However, it is undisputed that the promissory note was prepared by another attorney, which was executed by Benyaminova three months before plaintiff represented defendant. Thus, Mr. Popik properly argues that there is no nexus between his representation of plaintiff and Benyaminova's failure to pay plaintiff. In any event, plaintiff testified at her deposition that she received full payment ($47,000.00) in full satisfaction of this debt alleged in the first cause of action.
Plaintiff's second cause of action alleges that if Benyminova failed to pay plaintiff back as agreed (in the Letter of Intent), Benyaminova's share in the Avenue D business would be transferred to Skazka III, Inc.; that Benyaminova's interest in Avenue D was in the form of a 50% ownership in Kids Kingdom; that plaintiff would be entitled to all the ownership interest in Skazka III, Inc. if plaintiff was not made the owner of the Avenue I premises and business; and that since plaintiff was not made the owner of the Avenue I premises and business, as set forth in the Letter of Intent, and since plaintiff was not made the owner of the Avenue I premises and business, and Benyaminova failed to pay plaintiff back, plaintiff is entitled to Benyaminova's share of the property and business at the Avenue D premises and/or Benyaminova's share of defendant Kids Kingdom Inc. Despite these allegations, plaintiff testified that she was not making a claim against Benyaminova "at this time." Plaintiff also testified that she was no longer interested in getting the shares of Skazka III, Inc. ("I don't want any Skazka or anything"). Similar to the first cause of action, the allegations of this cause of action fail to allege any breach by defendant or that any alleged breach proximately caused plaintiff to sustain any damages.
The third cause of action alleges that Umarova and Benyaminova fraudulently represented to plaintiff that Umarova was the only individual capable of obtaining the certificate of occupancy for a cost of $140,000.00 for the Avenue D premises; that the Avenue D premises already had a daycare certificate; and that therefore Umarova was liable to plaintiff for punitive damages. However, this cause of action has already been dismissed. In any event, plaintiff testified that defendant was not involved in making these purported fraudulent representations, thus this cause of action cannot serve as a basis for a legal malpractice claim against defendant.
The fourth cause of action has been dismissed as well. It alleges that if Umarova failed to purchase 50% of the Avenue I premises and business, the plaintiff would be entitled to 100% of the shares of Skazka III, Inc., and that Umarova failed to make that [*6]purchase. However, plaintiff testified that defendant was not required to purchase a part of the Avenue I premises. Thus, there is no basis for a claim for legal malpractice with respect to this cause of action - Mr. Popik was not involved in this transaction nor is there any connection between Mr. Popik and plaintiff's alleged damages.
The fifth cause of action for legal malpractice alleges that Mr. Popik drafted the August 24, 2000 Letter of Intent, creating an attorney/client privilege; that Mr. Popik failed to exercise reasonable skill and knowledge possessed by a member of the legal profession in representing multiple parties with conflicting interests, and that Mr. Popik failed to inform plaintiff of her right to have independent counsel review and evaluate the Letter of Intent, causing plaintiff to sustain damages - namely loss of ownership and interest in the Avenue D and Avenue I premises. Even liberally construed, plaintiff's claim of damages are bare legal conclusions. Even assuming they vaguely state a claim for damages, the allegation of Mr. Popik's negligence is unequivocally contradicted by documentary evidence. In this regard, plaintiff testified that Mr. Popik's only fault was his assurance to her that Umarova "was a very decent person" whom he had known for 17 years; that he made "this agreement between all of us because this is an agreement among honest people;" and that she had no evidence that Mr. Popik helped Umarova to defraud plaintiff.[FN2] Moreover, even assuming plaintiff sustained damages, she testified that Mr. Popik did not "have anything do to with" Umarova's failure to pay her a certain percentage of interest in the Avenue D and Avenue I premises. Further, plaintiff failed to show how the alleged malpractice caused any such damages since the Letter of Intent was not a binding contract but merely "effectuated the intent of the parties" (Weksler v Kane Kessler, P.C., 63 AD3d 529, 531).
In light of the foregoing, defendant has demonstrated that the complaint fails to allege that plaintiff would be able to prove that, but for the alleged malpractice, she would have prevailed on her claim that she lost her interest in the Avenue D and Avenue I premises.Stated otherwise, defendant has demonstrated that the complaint fails to state a viable cause of action sounding in legal malpractice and has made a prima facie showing entitling him to dismiss the complaint insofar as asserted against him.
In opposition, plaintiff has failed to raise a triable issue of fact. Plaintiff relies solely upon her 2004 affidavit in which she recounts her dealings with Mr. Popik in the drafting of the Letter of Intent. She states, among other things, that she met with Mr. Popik and five other of the defendants to settle a dispute among them; that Mr. Popik praised Umarova as a trustworthy individual; that Mr. Popik read the agreement and translated it into Russian, with all parties present; and that it was executed by all the parties. Plaintiff [*7]goes on to state that Mr. Popik convinced her and Benyaminova to sign a deed which caused plaintiff to sign over her one-half interest in a parcel of real estate to defendant Losyev; that he notarized the signatures; that he was paid by the parties for his services; and that when, two weeks later, plaintiff told Mr. Popik that she was nervous about the agreement because the parties were not fulfilling their obligations, Mr. Popik agreed to represent her against these parties, but now claims he did not have an attorney/client relationship with her.
Thus, counsel for plaintiff sums up plaintiff's claims as follows: Mr. Popik: (1) represented several parties simultaneously with differing interests; (2) prepared an agreement for said parties; (3) accepted payment for his services; (4) represented plaintiff against another party to the agreement; and (4) caused plaintiff to lose her interest in real property and business. He asserts that "[u]pn entering Mr. Popik's office [p]laintiff possessed real property and a business interest . . .[a]fter she left Mr. Popik's office, [p]laintiff neither had an interest in the real property nor an interest in her business," because Mr. Popik "prepared, notarized and record the documents." Counsel further asserts that "questions of material facts exist as to whether [d]efendant Popik corrupted the attorney-client relationship by representing multiple parties and, in doing so, acted negligently."
As defendant states in his reply, plaintiff has failed rebut his prima facie showing. Stated otherwise, neither plaintiff's affidavit or counsel's affirmation address the elements comprising a cause of action for legal malpractice. Plaintiff fails to identify any breach on defendant's part, or that any alleged breach proximately caused plaintiff to sustain actual or ascertainable damages. To establish causation, plaintiff was required to show that she would not have incurred any damages, but for Mr. Popik's negligence. Plaintiff utterly failed to make any such showing. In fact, she testified to the contrary and, as indicated above, her claims of damages are conclusory. Further, while plaintiff's counsel asserts that plaintiff entered Mr. Popik's office possessing real property and left without such interest, this representation is completely conclusory and devoid of any evidentiary support. Moreover, plaintiff's opposition is bereft of any discussion of plaintiff's deposition testimony, which undermines the allegations of her complaint, including the allegation that she was not advised that she could have the Letter of Intent reviewed by independent counsel. As noted above, plaintiff's only complaint against Mr. Popik was that he represented to plaintiff that Umarova was a very decent person.In sum, plaintiff has failed to rebut defendant's prima facie showing. "