Is Legal Malpractice a Tort, Property Damage or Contract?
The Court of Appeals has ruled that the only damages available in legal malpractice are purely economic. Dombrowski v Bulson 2012 NY Slip Op 04203 [19 NY3d 347] "We see no compelling reason to depart from the established rule limiting recovery [*4]in legal malpractice actions to pecuniary damages." "Wolkstein v Morgenstern, 275 AD2d 635, 637 [1st Dept 2000] ["A cause of action for legal malpractice does not afford recovery for any item of damages other than pecuniary loss so there can be no recovery for emotional or psychological injury"]).
Coming at the issue from a slightly different vantage point, CIT Lending Serv. Corp. v Morrison & Foerster LLP; 2013 NY Slip Op 31980(U); August 20, 2013 Sup Ct, New York County ; Docket Number: 653797/2012 Judge: Melvin L. Schweitzer discusses the effect of a law suit that seeks solely "pure economic loss".
""[P]urely economic loss resulting from a breach of contract does not constitute 'injury to property' within the meaning of New York's contribution statute [CPLR 1401]" Board of Educ. of Hudson City School Dist. v Sargent, Webster, Chrenshaw & Folley, 71 NY2d 21, 26 (1987). The nature of the industry here differs greatly from the one in Sommer. Insurers have an obligation to deal fairly
and protect the fiscal interest of those insured, not to protect the personal safety of citizens. NY Univ. v Continental Ins. Co., 87 NY2d at 317 (1995). Insurers' liability is based on contract law, and governed by agreements, terms, provisions, and conditions of the insurance policy. CWbank, NA. v
Commonwealth Land Tit. Ins. Co, 228 AD2d 635, 637 (2d Dept 1996). Though the Third-Party
Defendants' conduct, as alleged here, did violate NY Lien Law 22, statutory law regulates the insurer's performance of its contractual obligation, and it does not impose a separate duty of care. NY Univ, 87 NY2d at 317-318."
Morrison & Foerster argues that its contribution claim is not barred by the pure economic loss doctrine, because a tort claim remains pending against Third-Party Defendants, even if that claim may eventually fail. Sound Refrig. and A. C,Inc. v All City Testing & Balancing Corp., 84 AD3d 1349,1350 (2d Dept 2011). As previously mentioned, the Appellate Divisions have held that merely including an alternative tort claim in a breach of contract action will not create a right of contribution if the plaintiff s sole measure of damages is the lost benefit of the bargain. See e.g. Children's Corner Learning Center v A. Miranda Contracting Corp., 64 AD3d 318 [1 st Dept 2009]; Scalp & Blade, Inc. v Advest, Inc., 300 AD2d 1 068 (4th Dept 2002); Rothberg v Reichelt, 270 AD2d 760 (3d Dept 2000)."
Is legal malpractice still a tort?