Legal Malpractice Towards A Third-Party

Law firm is retained by A and knows that A and B have a contractural relationship. During the representation A notifies the law firm that if the case is settled some money will be given to B. By the time that the case is actually settled, A rescinds the advice and tells the law firm to give all the money to A and none to B. Does B have a cause of action against the law firm for non-payment?

In Ulu v Turkotrans Intl. Transp. Co., Ltd   ;2011 NY Slip Op 31803(U) ; Sup Ct, NY County; Judge: Barbara R. Kapnick sets the rules:
"Next, the third cause of action for breach of contract alleges that "defendants have breached their agreement to pay the Balance Due to Plaintiff from the Settlement Amount." (Compl. ¶ 34.) Defendant Law Firm argues that if plaintiff is alleging a breach of a contract between himself and the Law Firm, the claim fails because plaintiff never had an agreement directly with the Law Firm with respect to the monies at issue in this case, or any matter relevant thereto, and that plaintiff has not provided any evidentiary support for the existence of such an agreement. If on the other hand, plaintiff is alleging a breach of a contract that existed between himself and Sensoz/Turkotrans, then the defendant argues that the claim cannot stand as against the Law Firm, because the Law Firm was not party to such an agreement. In his motion papers, plaintiff argues that an agreement
existed between plaintiff and the Law Firm, based on a series of emails, which required the Law Firm to transfer a portion of the settlement funds to plaintiff. Plaintiff cites the following deposition testimony of Mr. Vengrow, to show that there was a contract between plaintiff and the Law Firm:

Plaintiff also argues that he performed all of his obligations under the alleged agreement by paying the legal fees and expenses, but that t h e Law Firm failed to perform when it declined to transfer a portion of the settlement funds to him and that he sustained damages as a result. The issue here is whether a contract was actually formed between plaintiff and the Law Firm by virtue of the e-mail
communications between the parties and/or plaintiff's payment of legal fees. "The elements of a breach of contract claim are formation of a contract between the parties, performance by the plaintiff, the defendant's failure to perform, and resulting damage (citation omitted) .


The requirements for the formation of a contract are at least two parties with legal capacity to contract, mutual assent to the terms of the contract and consideration. 2 P J I 4:l at 638-39 (2011) ; see also Maas v . Cornell Univ . , 94 NY2d 8 7 , 93-4 (1999)* Consideration exists if
there is "a benefit to the promisor or a detriment to the promisee" and "it is enough that something is promised, done, forborne or suffered by the party to whom the promise is made as consideration for the promise made to him." Weiner v. McGraw-Hill, I n c . , 57 NY2d 458, 464 (1982) (internal citations omitted). In the instant case, the February 28th E-mail is clearly not
a contract between Ulu and the Law Firm; it is a communication from Sensoz to the Law Firm, which confirms Sensoz's instructions to the Law Firm. To the extent that plaintiff is alleging that there was an o r a l agreement between himself and the Law Firm, the Court rejects this contention as well, finding that Ulu did not receive consideration from the Law Firm for his payment of the legal fees.

There is no evidence that Ulu paid the legal fees in exchange for either (1) a promise that the Law Firm would do something for him; (2) the Law Firm had done something for him; or (3) the Law Firm's forbearance of any acts. See Weiner v. McGraw-Hill, Inc., supra at 464. Accordingly, the Court finds that the Law Firm has established its entitlement to summary judgment dismissing the
fourth cause of action, insofar as it is pled against it.

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