Is This Legal Malpractice In Contract or Is It A Tort?

We have recently written about the conversion of legal malpractice from a tort to a contact action, and some of the changes that have been occasioned.  Here, in Salazar v Sacco & Fillas, LLP
2014 NY Slip Op 00980 [114 AD3d 745]  February 13, 2014 Appellate Division, Second Department the Court goes to some length to distinguish between the two.  Law firm settles cases and then seeks to get its bill paid.  How they went about it is a problem.

"The plaintiff retained the defendants Sacco and Fillas, LLP (hereinafter the law firm), and attorneys Tonino Sacco and Elias Nikolaos Fillas, who allegedly were partners in the law firm, to represent him as a plaintiff in a personal injury action and to represent two corporate entities that he controlled, Always First, Inc., and Always Fast, Inc. (hereinafter together the Always companies), in connection with certain commercial litigation.

The law firm settled the personal injury action on behalf of the plaintiff, and received certain settlement proceeds on the plaintiff's behalf. Thereafter, the plaintiff and the Always companies, as "the client," and the law firm entered into an agreement (hereinafter the settlement agreement). The settlement agreement provided that, in exchange for the law firm's agreement to "discount outstanding balances" due the law firm from the Always companies, "the client" agreed to give up all rights to certain sums due "the client" from three enumerated litigations.

The plaintiff thereafter commenced the instant action, seeking to recover damages he allegedly sustained as a result of the defendants' legal malpractice, breach of contract, and fraud. The plaintiff alleges, inter alia, that the defendants breached the retainer agreement relating to the personal injury action in that they intentionally failed to pay him the settlement funds from that [*2]action. The plaintiff also alleges that he was fraudulently induced into signing the settlement agreement. The defendants moved to dismiss the complaint pursuant to CPLR 3211 (a) (7). The Supreme Court, upon concluding that the complaint alleged intentional acts only, granted the defendants' motion only insofar as it sought to dismiss the first cause of action, sounding in legal malpractice. The defendants appeal."

"The complaint adequately states a cause of action against the defendants sounding in breach of contract."

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