New York Attorney Malpractice Blog

New York Attorney Malpractice Blog

Duped or Not? Legal Malpractice or Not?

Posted in Legal Malpractice Cases

Looking back at Weinberg v Sultan  2016 NY Slip Op 05939 [142 AD3d 767]  September 1, 2016
the question before the Appellate Division, First Department seems to have been was whether plaintiff was duped or not, and whether her former son-in-law took a large “consulting fee” and did so to her detriment.  Whether former sons-in-law can be trusted in general, in this case the AD dismissed all legal malpractice claims against defendants for lack of proximate cause.

“The motion court correctly dismissed the third and fourth causes of action. We have some concerns over the manner in which the sale of the building owned by the elderly plaintiff was orchestrated by defendant Kaminsky, her former son-in-law. Kaminsky, an attorney, procured the purchaser and referred plaintiff to the attorneys who represented her in the transaction and assisted her at the closing. It is unclear from the record whether these attorneys ever met with plaintiff before the closing or what role defendant Asher, the self-described “estate attorney,” played; that is, what advice, if any, he provided regarding her estate. It is also unclear how the purchase price for the building was arrived at and whether the representations made to plaintiff regarding the sale proceeds were accurate. Also, Kaminsky collected a $200,000 consulting fee for his work on the transaction, paid by the buyer.

Nonetheless, the amended complaint is barebones. It fails to allege any “material misrepresentation,” which is a required element of a fraud claim (see Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 559 [2009]; Nicosia v Board of Mgrs. of the Weber House Condominium, 77 AD3d 455, 456 [1st Dept 2010]). Further, plaintiff does not allege how defendant purchaser Linda Salamon and her company, defendant 22 West 30th St. Properties, LLC (together Salamon), exerted any undue influence over plaintiff (see Franklin v Winard, 199 AD2d 220, 220 [1st Dept 1993]) or coerced her into a transaction that she alleges made no [*2]economic sense. The amended complaint also failed to plead the fraud and undue influence claims with sufficient particularity, as required by CPLR 3016 (b) (see id.). In addition, there is no private right of action against an attorney or law firm for violations of the Code of Professional Responsibility or disciplinary rules (Kantor v Bernstein, 225 AD2d 500, 501 [1st Dept 1996]; see Schwartz v Olshan Grundman Frome & Rosenzweig, 302 AD2d 193, 199 [1st Dept 2003]). Plaintiff failed to address her breach of contract claim in her opening appellate brief, so it can be deemed abandoned (see Bridgers v West 82nd St. Owners Corp., 114 AD3d 606, 607 [2014]). In any event, plaintiff provides no indication of how the contract was breached.”

“The motion court correctly granted the motions for summary judgment dismissing the first and second causes of action, for legal malpractice. The moving defendants made a prima facie showing of a lack of proximate cause, which is an essential element of a legal malpractice claim (see Sabalza v Salgado, 85 AD3d 436, 437 [1st Dept 2011]; Brooks v Lewin, 21 AD3d 731, 734 [1st Dept 2005], lv denied 6 NY3d 713 [2006]). In opposition, plaintiff failed to raise a triable issue of fact, since she merely speculated that the building she formerly owned, which was in foreclosure at the time of its sale, could have been sold for its appraised value (see Heritage Partners, LLC v Stroock & Stroock & Lavan LLP, 133 AD3d 428, 428-429 [1st Dept 2015], lv denied 27 NY3d 904 [2016]).”

Moral Victories and Practical Advice

Posted in Legal Malpractice Cases

Matter of Ginsburg  2016 NY Slip Op 07733 [144 AD3d 1357]  November 17, 2016  Appellate Division, Third Department is a sad story of despair overlaid with a sordid story of attorney fee grasping.  In the end, not a lot was accomplice.  The decision gives some practical advice on settlements and attorney retention.

“On February 17, 2010, Bradley Marc Ginsburg (hereinafter decedent), then a freshman at respondent Cornell University in Tompkins County, jumped to his death from the Thurston Avenue Bridge—one of several bridges extending across the gorges located on or near Cornell’s campus. The bridge in question, which spans Falls Creek Gorge and connects two portions of Cornell’s campus, is owned by respondent City of Ithaca. Petitioner, who is both decedent’s father and an attorney licensed to practice in this state, was granted letters of administration in May 2011 and thereafter retained respondent Leland T. Williams as counsel for the estate. In late 2011, Williams commenced an action upon petitioner’s behalf against, among others, Cornell and [*2]the City of Ithaca in the United States District Court for the Northern District of New York. The complaint set forth 14 causes of action sounding in, among other things, wrongful death and premises liability and sought damages in the amount of $180 million, including $12 million in punitive damages.

After District Court dismissed the punitive damages claim and all claims against those Cornell representatives or employees named in their individual capacities, petitioner terminated Williams’ representation and retained respondent McCallion & Associates, LLP (hereinafter the firm) as counsel.[FN1] Thereafter, Kenneth F. McCallion (hereinafter McCallion)—a principal therein—entered into settlement negotiations with Cornell and the City of Ithaca upon petitioner’s behalf. After much discussion, the parties devised a proposed settlement of the wrongful death claim—specifically, that petitioner would accept a monetary sum from the City of Ithaca and, as to Cornell, would agree that a scholarship would be established in decedent’s name.[FN2] While McCallion was not opposed to this resolution, he advised petitioner via email that, “[b]efore [he] sign[ed] onto any settlement proposal,” petitioner and the firm would need to “reach an understanding as to the allocation of any settlement funds”—namely, that “the balance of the net cash component of the settlement,” then anticipated to be $200,000, would be allocated to the firm as counsel fees. In response, petitioner advised District Court that he, in his capacity as co-counsel, would be handling all further negotiations, and McCallion was excluded from the settlement conferences that followed.

In September 2014, petitioner entered into stipulations of settlement with Cornell and the City of Ithaca resolving the wrongful death claim. Specifically, the City of Ithaca agreed to pay $100,000 in settlement of the District Court action against it, and Cornell agreed to establish a perpetual scholarship in memory of decedent. Although documentation in the record reflects that such scholarship, if funded by a private donor, would have required an endowment of approximately $1.6 million, the stipulation of settlement provided that the scholarship would be established “using existing financial aid funds” and, inasmuch as Cornell was neither “allocating any new money” to the scholarship nor otherwise making any payment to petitioner, the scholarship itself had “no monetary value”—except to the student recipients thereof. District Court thereafter signed off on the respective stipulations of settlement.”

“There is no question that a client “may at any time before judgment, if acting in good faith, compromise, settle, or adjust his [or her] cause of action out of court without [counsel’s] intervention, knowledge, or consent, notwithstanding any contingent fee agreement and even though he [or she] has agreed with [counsel] not to do so” (Dagny Mgt. Corp. v Oppenheim & Meltzer, 199 AD2d 711, 713 [1993] [internal quotation marks and citation omitted]; see Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.2 [a]). Similarly, “notwithstanding the terms of the agreement between them, a client has an absolute right, at any time, with or without cause, to terminate the attorney-client relationship by discharging the attorney” (Campagnola v Mulholland, Minion & Roe, 76 NY2d 38, 43 [1990]; see Doviak v Lowe’s Home Ctrs., Inc., 134 AD3d 1324, 1326 [2015], lv denied 27 NY3d 904 [2016]). Finally, “Surrogate’s Court is vested with broad discretion to fix the reasonable compensation of an attorney who renders legal services to a fiduciary of an estate, subject to modification only where that discretion has been abused” (Matter of Benware, 121 AD3d 1331, 1332 [2014] [citations omitted]). Notably, such authority is “independent of the terms of a retainer agreement or the consent of interested parties to the requested compensation” (Matter of Elenidis, 120 AD3d 1229, 1231 [2014], lvs denied 24 NY3d 910 [2014], 25 NY3d 904 [2015]; see Matter of Greenfield, 127 AD3d 1189, 1191 [2015], lv denied 26 NY3d 904 [2015]).

Contrary to respondents’ assertion, we discern no basis upon which to disturb the determination of Surrogate’s Court that petitioner, a licensed and experienced real estate attorney, exercised due diligence in the performance of his fiduciary duties relative to decedent’s estate, including giving careful consideration to the settlement offers at issue. Nor are we persuaded that petitioner’s ultimate decision to compromise and settle the wrongful death claim against Cornell and the City of Ithaca in exchange for $100,000 and the establishment of a perpetual scholarship in decedent’s memory evidenced bad faith or otherwise called into doubt the performance of his fiduciary duties. Hence, as to the award of counsel fees, the issue primarily distills to whether Surrogate’s Court abused its discretion in concluding that the subject scholarship had no monetary value to decedent’s estate.”

No Judiciary Law 487 Claim; No Explanation

Posted in Uncategorized

Dec v BFM Realty, LLC  2017 NY Slip Op 05936  Decided on August 2, 2017  Appellate Division, Second Department is a legal malpractice and fraud case dismissed (after a number of years of litigation) in Kings County.  It alleged fraud and judiciary law § 487 violation.  Summary judgment was granted against Plaintiff.  Trying to glean more details from the appellate decision is, at best, difficult.

“The plaintiff commenced this action alleging two causes of action. The first cause of action, alleging fraud, was asserted against the defendants BFM Realty, LLC, and Abraham Lichtenstein. The second cause of action, alleging a violation of Judiciary Law § 487, was asserted against the defendants Goldberg & Rimberg, PLLC, Israel Goldberg, and Brad Coven (hereinafter collectively the attorney defendants). The defendants moved pursuant to CPLR 3211(a)(4) to dismiss the first cause of action and for summary judgment dismissing the second cause of action. In an order dated January 8, 2016, the Supreme Court granted the motion. The plaintiff appeals.”

“The Supreme Court also properly granted that branch of the defendants’ motion which was for summary judgment dismissing the second cause of action alleging a violation of Judiciary Law § 487. “Judiciary Law § 487 exposes an attorney who [i]s guilty of any deceit or collusion . . . with intent to deceive the court or any party’ to criminal (misdemeanor) liability and treble damages, to be recovered by the injured party in a civil action” (Melcher v Greenberg Traurig, LLP, [*2]23 NY3d 10, 12-13, quoting Judiciary Law § 487[1]). Here, the defendants established, prima facie, that the attorney defendants did not commit deceit or collusion upon the court or any party (see Lawrence Ripak Co., Inc. v Gdanski, 143 AD3d 862, 863; Klein v Rieff, 135 AD3d 910, 912; Specialized Indus. Servs. Corp. v Carter, 131 AD3d 1162). In opposition, the plaintiff failed to raise a triable issue of fact.”

A Fee Sharing Agreement that Worked…Or Did It?

Posted in Legal Malpractice Cases

A personal injury takes place, and is litigated.  It goes to verdict which exceeds the insurance coverage.  What is a defendant to do?  Well, one solution is a bad faith litigation against the carrier, and an assignment to the plaintiff.  Plaintiff gets the chance to obtain the balance (over the policy limits) from the insurer, and the defendant gets out from the excess money claims.  So, the various attorneys enter into an agreement where they split portions of the fees.  What happens when the Appellate Divisions INCREASES the award?  Chaos.

Wolfe & Yukelson, PLLC v Davis, Saperstein & Salomon, P.C. 2017 NY Slip Op 05997
Decided on August 2, 2017  Appellate Division, Second Department determines that all the attorneys get paid.

“In October 2012, upon the defendant’s denial of the plaintiff’s request for payment pursuant to the fee-sharing agreement, the plaintiff commenced this action to recover damages for breach of contract seeking to enforce the fee-sharing agreement. The Supreme Court denied the defendant’s motion for summary judgment dismissing the complaint and the plaintiff’s cross motion for summary judgment on the complaint. Thereafter, the court granted the plaintiff’s motion for leave to reargue its prior cross motion for summary judgment and, upon reargument, granted the cross motion, finding that since the defendant violated rule 1.5(g) of the Rules of Professional Conduct (22 NYCRR 1200.0), it could not seek to void the fee-sharing agreement by which it agreed to be bound and of which it received the benefit. A judgment thereafter was entered in favor of the plaintiff and against the defendant in the principal sum of $208,257.94.

The appeals from the intermediate orders must be dismissed because the right of direct appeal therefrom terminated with the entry of the judgment in the action (see Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeals from the orders are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]).

In fee-sharing disputes between attorneys, “the courts will not inquire into the precise worth of the services performed by the parties as long as each party actually contributed to the legal work and there is no claim that either refused to contribute more substantially” (Benjamin v Koeppel, 85 NY2d 549, 556 [internal quotation marks omitted]). This Court has held that such an agreement is enforceable as long as the attorney who seeks his or her share of the fee “has contributed some work, labor or service toward the earning of the fee” (Witt v Cohen, 192 AD2d 528, 529 [internal quotation marks omitted]; see Reich v Wolf & Fuhrman, P.C., 36 AD3d 885, 886; Rozales v Pegalis & Wachsman, 127 AD2d 577, 578). Here, the Supreme Court correctly determined that the plaintiff provided sufficient legal services toward the earning of the fees generated by settlement of the claims at issue. Contrary to the defendant’s contention, the commencement of a bad faith action against Imperium or a legal malpractice action against Wilson Elser was not a condition precedent to recovery under the fee-sharing agreement. Thus, the court, upon reargument, properly determined that the plaintiff established its prima facie entitlement to a share of the legal fee as allocated in the fee-sharing agreement (see Reich v Wolf & Fuhrman, P.C., 36 AD3d at 886; Edelstein v Pirrotti, 286 AD2d 660; Sickmen v Birzon, Szczepanowski & Quinn, 276 AD2d 689).

In opposition to the cross motion, the defendant failed to raise a triable issue of fact. Moreover, the defendant, which is bound by the same Rules of Professional Conduct (22 NYCRR 1200.0) as the plaintiff, cannot be heard to argue that the fee-sharing agreement and the obligations thereunder must be voided on ethical grounds, when it freely agreed to be bound by, and received the benefit of, the same agreement, particularly since there is no indication that the client was in any way deceived or misled (see Samuel v Druckman & Sinel, LLP, 12 NY3d 205, 210; Benjamin v Koeppel, 85 NY2d 549, 556).”


Who’s In Charge and May The Attorney Rely on Authority?

Posted in Uncategorized

Plaintiff was working in the movie industry.  He and the movie company came to a parting, and a separation agreement was produced between him and the company, negotiated by the company’s CEO.  Later Plaintiff was not paid his equity investments and did not get certain credits.  Board is unhappy with the deal itself, and blames the attorneys hired by the CEO.

Morgan v Worldview Entertainment Holdings, Inc. 2017 NY Slip Op 31594(U) July 27, 2017 Supreme Court, New York County  Docket Number: 652323/2014 Judge: Eileen A. Rakower discusses apparent authority and whether the attorney may rely upon the CEO’s assurance that he has the power to initiate the agreement.

“Hoyt David Morgan (“Morgan”) commenced the first party action on July 28, 2014. The first party action arose from an alleged breach of an agreement entered between Morgan and Worldview Inc., on June 20,- 2013 (“the Separation Agreement”). The Separation Agreement identified the obligors of its terms as “Worldview Entertainment Holdings, Inc., its parents, successors, predecessors, divisions, affiliates, and assigns.” In the first party action, Morgan claimed that W orldview Inc. breached the terms of the Separation Agreement by failing to pay him for his non-recouped equity investments and provide him with Executive Producer credits on among other films, the film Birdman. Morgan also alleged that Holdings LLC, Partners VII, Conners, Cestone, and Sarah Johnson were jointly and severally liable to him for the alleged breach of the Separation Agreement as “affiliates” of Worldview, Inc. Specifically, Holdings LLC was alleged to “own 100% of the equity of Worldview Inc. and thus is its parent and affiliate.” Partners VII was alleged to be “a division and affiliate of Worldview Inc., being the investment vehicle specifically associated with the Worldview Inc. film Birdman.” Conners was alleged to be “an affiliate of Worldview Inc., as she owns a significant equity interest in Holdings, LLC, which in tum owns and controls Worldview Inc., and she controls Worldview Inc. as its Chief Executive Officer.” Cestone was alleged to be “an affiliate ofWorldview Inc., as she owns a significant equity interest in Holdings LLC, which in tum owns and controls Worldview Inc., and she controls Worldview Inc. as its co-founder and board member.” Defendants Holdings LLC, Partners VII, Conners, Cestone, and Johnson previously moved the Court to dismiss Morgan’s claims against them. They argued that they were not parties to the Separation Agreement and did not fall into the definition of “affiliates.” This Court denied their motions. The Appellate Division dismissed the tortious interference with·· contract claims as against the individual defendants, and otherwise affirmed the decision by order dated July 21, 2016. ”

“Third-Party Plaintiffs allege that “[t]he bylaws ofWorldview Inc. require that compensation provided to an officer of the corporation be fixed by its Board of Directors … or by the Chairman of the Board or the Chief Executive Officer (‘CEO’) acting under authority expressly delegated to such person by the Board of Directors.” They allege that “the Board of Directors did not give Woodrow authority to pay Morgan any additional compensation in connection with Worldview Inc.’s termination of Morgan’s employment” and “did not approve or authorize the Agreement at any time.” Third-Party Plaintiffs allege that the Goetz Third-Party Defendants breached the attorney-client duty and/or a fiduciary duty that they owed to them by “(i) failing to confirm whether the Board of Directors had approved or otherwise authorized Woodrow to enter into the Agreement; and (ii) violating the standard of care by negligently preparing the Agreement so as to allegedly make each of Holdings LLC, Partners VII and Conners an obligor under the Agreement, thereby potentially subjecting each of them to obligations that they were not otherwise required to undertake.” They allege that as a result of Goetz Third-Party Defendants’ breach, they have “(i) incurred and will continue to incur legal fees and expenses in connection with the defense of Morgan’s claims in this action; and (ii) may be subjected to liability to Morgan if it is determined that they are “affiliates” of Worldview Inc. and/or obligors under the Agreement.” They seek reimbursement of “(i) all of their legal fees and expenses incurred in connection with the defense of Morgan’s claims in this action; and (ii) any and all liabilities imposed upon any of the Third-Party Plaintiffs to Morgan as a result of any determination that they are ‘affiliates’ of Worldview Inc. and/or obligors under the Agreement.”

“The Goetz Third-Party Defendants argue that Based on Article 4, Section 2, of Worldview Inc.’ s bylaws, Woodrow was authorized to hire and terminate employees of the corporation and to sign contracts that would be binding on the corporation. They argue that the third-party allegations that board approval was required for the Separation Agreement is based on an inaccurate interpretation of Article 4, Section 10 of the Bylaws, which only states that “the compensation of all officers of the corporation shall be fixed by the board of directors.” They argue that the Third-Party Plaintiffs fail to explain how the Separation Agreement constitutes compensation that would trigger Article IV, Section 10 of the Bylaws. The Goetz Third-Party Defendants further argue that even if the Court were to accept Third Party Plaintiffs’ allegations that Woodrow’s acts with respect to the Separation Agreement were not authorized, Worldview Inc. should bear the risk of any loss arising from Woodrow, their then CEO, because they appointed him to act on its behalf. ”

“Third-party Plaintiffs and Cestone also allege that Boyajian acted negligently by drafting the Separation Agreement because it contained the language identifying its obligors as “Woodrow, its parents, successors, predecessors, divisions, affiliates and assigns.” Third-party Plaintiffs and Cestone fail to allege facts to substantiate how the inclusion of this provision is a deviation from the standard of care or negligent. While Third-Party Plaintiffs and Cestone argue that the provision may make them bound as obligors of the terms of the Separation Agreement, nowhere in the agreement does it specifically reference these parties or state that they are obligors. In fact, the Appellate Division January 30, 2015 decision stated, “The term ‘affiliates’ is not defined within the agreement, and neither its meaning, nor whether the parties intended for the individual defendants to be bound under the agreement, and neither its meaning, nor whether the parties intended for the individual defendants to be bound under the agreement, can be discerned on this pre-answer to dismiss.” Here, the mere use of the word “affiliate” in the Separation Agreement does not constitute negligence on Third-Party Defendants’ behalf – where at the time of making of the Separation Agreement – there was no apparent conflict between Worldview Inc. and the “affiliates” nor any allegation of such a conflict. “

The Slimmest of Legal Malpractice Allegations

Posted in Legal Malpractice Cases

In legal malpractice there are transactional representations and there are litigation representation.  It’s easier to show privity when the attorney has signed on as attorney of record.  It’s more difficult when the attorney may/may not be involved in a transactional setting.  Breslin v Raich, Ende, Malter & Co., LLP  2016 NY Slip Op 32015(U)  July 25, 2016  Surrogate’s Court, Nassau County
Docket Number: 290592J  Judge: Margaret C. Reilly probably reaches the outer edge of representation.  Dismissal is avoided based solely on the affidavit of plaintiff, with no particular document to show lawyering by the defendant.

“Robert Frankel (the decedent) died on April 21, 1995, survived by his wife, Adele Frankel-Loeb, and three adult children, Wendy Frankel, Richard Frankel and Lynn Frankel Fleetwood (Wendy, Richard and Lynn, collectively, the objectants). Under the terms of decedent’s will, each of the objectants is a beneficiary under Article III of the will and a beneficiary of 1/3 of decedent’s residuary estate. Prior to his death, the decedent owned a chain of stores and was a real estate investor and manager. The decedent and Breslin jointly owned a number of real estate ventures, and had personally and jointly guaranteed related bank debt of approximately $100,000,000.00.  At the time of the decedent’s death, some of these ventures were in financial distress. Shortly after the death of the decedent, an arrangement was reached among the preliminary executors of the decedent’s estate, Gerald Deutsch, Stephen Levy, Breslin, and the decedent’s children, whereby Breslin’s family purchased control over a portion of the decedent’s assets, and reserved the right to acquire the remaining assets for $2,500,000.00 (the Weary Option). Pursuant to this agreement, on December 11, 1995, Breslin was appointed as successor executor of the estate, taking over management of the real estate ventures that previously had been jointly owned by Breslin and the decedent, as well as the decedent’s assets and properties.”

“Breslin hired Tenzer in 1995, when Tenzer was associated with a prior accounting firm, and continued to utilize Tenzer’s services after Tenzer joined Raich Ende as a principal and accountant in 2002, pursuant to a retainer letter, dated November 7, 2002. The defendants, among other services, were to prepare a final accounting for the Frankel estate. On February 22, 2012, the defendants produced the accounting, which covered the period from April 21, 1995 through March 31, 2010.”

“The defendant further raises the Statute of Limitations and a failure to allege a timely claim against Tenzer for legal malpractice and against Raich Ende under the doctrine of respondent superior. The defendant argued that, in order to prevail in an action for legal malpractice, the plaintiff must show that the attorney failed to exercise ordinary reasonable skill and knowledge possessed by a member of the legal profession, and that the breach of duty caused damages. However, first the plaintiff must establish the existence of an attorney-client relationship. The defendant further posited that the plaintiff only offers conclusory allegations, without factual support, that Tenzer rendered both accounting and legal advice, and that Raich Ende operates solely as an accounting firm, in which capacity it cannot offer legal services.

The plaintiff submitted an affidavit and a memorandum of law in opposition to the motion to dismiss. Breslin states that he retained Tenzer as both his attorney and his accountant and claims that Tenzer held himself out to the plaintiff as having expertise as both a lawyer and an accountant, in which capacities he continuously provided the plaintiff with legal and accounting services in connection with the estate, including tax law advice. According to the plaintiff, the professional relationship rose to a fiduciary level between the plaintiff and the various partners, accounting firms and professionals who worked with Tenzer.

“In Breslin’s complaint, he states that the defendants were retained “to perform a variety of accounting, audit, tax, and consulting services with regard to Breslin’s role as both a major creditor and Successor Executor of the Frankel Estate.” Breslin asserts that “for many years prior to December 1995, Tenzer had already provided substantial legal, accounting and tax services to Breslin . . .” and that “Tenzer repeatedly induced Breslin to repose an extremely high degree of trust and confidence in Tenzer with respect to numerous legal, tax and accounting matters . . . .” In his claim for legal malpractice, Breslin asserts that Tenzer breached his “duty to exercise due professional care and to render reasonable and competent legal advice and legal services . . . .”

The court finds that the plaintiff’s complaint states a cause of action. The defendants’ motion to dismiss the cause of action for legal malpractice is DENIED.”

Voluntary Payment v. Overbilling in a Legal Malpractice Case

Posted in Uncategorized

There is a long history of doctor-lawyer litigations.  Often there seems to be a disconnect between the world-views of the protagonists.  Lawyers may seem avaricious and doctors naive and pedantic.  In Dubrow v Herman & Beinin  2017 NY Slip Op 31545(U) July 21, 2017 Supreme Court, New York County  Docket Number: 651605/2016  Judge: Ellen M. Coin  a doctor is terminated just before he turns 64.  He hires attorneys to sue for age discrimination.  The case is lost.  Focus of the case is on the billing practices of the attorneys.

“On March 1, 2013, defendants filed a lawsuit against BIMC and others in this court, entitled Alan Dubrow v Beth Israel Medical Center, et al., Index No. 151877/2013 (the BIMC Action). The complaint in the BIMC Action alleged, among other claims, a cause of action for age discrimination under the New York City Human Rights Law. In July 2014, BIMC filed a motion for summary judgment. Oral argument was held on November 6, 2014. In October 2015, Dr. Dubrow retained new counsel. On December 14, 2015, the BIMC Action was dismissed in its entirety by the Hon. Debra A. James. Justice James held that Dr. Dubrow had not established a prima facie case of employment discrimination based on age, even under the law’s extremely low threshold, and that she concurred with the defendants “that there is no evidence that age played any role whatsoever in defendants’ decision to terminate plaintiff’ (Herman moving affirmation, Ex. E, Decision at 7). By letter dated December 23, 2015, plaintiff’s new counsel requested an itemization of the legal fees that Dr. Dubrow paid to defendants. This action was commenced on March 14, 2016. The complaint alleges that Dr. Dubrow paid defendants “a monetary retainer over $3000″ in September 2012 (Cmplt., ,-i 7), and a total of$176,500 in legal fees. Dr. Dubrow paid this amount, despite the fact that defendants never provided him with a written retainer agreement, in violation of 22 NYCRR 1215; never provided the plaintiff with any billing statements for the hours that they worked; and never provided any explanation of how the amount collected was fair and reasonable for the legal services that were rendered. Dr. Dubrow sues to recover the $176,500 paid to defendants based on breach of contract, conversion and legal malpractice, and also seeks $500,000 in punitive damages.”

“The first cause of action alleges that the $176,500 Dr. Dubrow paid to defendants was a retainer for work performed in the BIMC Action, and that said retainer was to be used in the prosecution of the case and debited on an hourly basis of $300 per hour, as counsel’s time was expended. It was further allegedly understood that all retainer funds not exhausted would be returned to Dr. Dubrow after the BIMC Action was resolved. ”

” By this motion, defendants neither dispute the existence of an oral contract to perform legal services on Dr. Dubrow’s behalf, nor explain the circumstances surrounding the seventeen alleged voluntary payments by Dr. Dubrow or how these amounts were calculated. Dr. Dubrow may not have asked for an itemized bill from defendants at the time he was being asked to pay legal fees, but he certainly did so in December 2015. By court rule effective April 15, 2013, a client is “entitled to request and receive a written itemized bill from [the] attorney at reasonable intervals” (22 NYC RR § 1210 .1 ). The court interprets this rule as requiring an attorney to provide a client with an itemized bill, even after the representation has been concluded and after payment from the client has been forthcoming. “[A]s a matter of public policy, courts pay particular attention to fee arrangements between attorneys and their clients” (Jacobson v Sassower, 66 NY2d 991, 993 [1985]). Even where it is the client who commences an action to recover a portion of attorney’s fees that have already been paid, it is the attorney who must shoulder the burden of demonstrating the fair and reasonable value of the services rendered (id.). Defendants maintain that the “voluntary payment doctrine” bars Dr. Dubrow’s complaint. “That common-law doctrine bars recovery of payments voluntarily made with full knowledge of the facts, and in the absence of fraud or mistake of material fact or law” (Dillon v U-A Columbia Cablevision of Westchester, 100 NY2d 525, 526 [2003]). “The onus is on a party that receives what it perceives as an improper demand for money to ‘take its position at the time of the demand, and litigate the issue before, rather than after, payment is made'” (DRMAK Realty LLC v Progressive Credit Union, 133 AD3d 401, 403 [I st Dept 2015], quoting Gimbel Bros. v Brook Shopping Ctrs., 118 AD2d 532, 535 [2d Dept 1986]). In view of the fact that defendants admittedly failed to furnish Dr.Dubrow with a written retainer agreement and never once sent him an itemized bill documenting the hours spent on the BMIC Action, Dr. Dubrow may very well establish that the seventeen payments he made, totaling $176,500, were not made “with full knowledge of the facts.” However, such a factual ruling is completely inappropriate on a motion to dismiss pursuant to CPLR 321 l(a). “

Plaintiff Skates Over Summary Judgment; Finds the Perfect Snow Storm Explanation

Posted in Legal Malpractice Cases

Snow and ice cases are difficult.  Fall too soon and the landowner gets the benefit of the “strorm-in-progress” defense.  Fall at the right time, and you have to prove that the landowner created the situation.  Hire the wrong attorney, and your legal malpractice case difficulty rises to the Nth degree.  So, Balan v Rooney  2017 NY Slip Op 05801  Decided on July 26, 2017  Appellate Division, Second Department is a notable win for plaintiff.

“Shortly after a snowstorm, when attempting to enter the building in which she lived, the plaintiff allegedly slipped on ice and was injured. Three days after the accident, the plaintiff consulted with and hired the defendant to represent her in an action against the property owner. The defendant failed to commence an action prior to the expiration of the statute of limitations. The plaintiff then commenced this action to recover damages for legal malpractice and breach of contract. The defendant moved for summary judgment dismissing the complaint, and the Supreme Court granted the motion.”

“”[A] landowner generally cannot be held liable for injuries sustained as a result of slippery conditions that occur during an ongoing storm, or for a reasonable time thereafter'” (Weller v Paul, 91 AD3d 945, 947, quoting Mazzella v City of New York, 72 AD3d 755, 756; see Kantor v Leisure Glen Homeowners Assn., Inc., 95 AD3d 1177Salvanti v Sunset Indus. Park Assoc., 27 AD3d 546). “However, once a landowner elects to engage in snow removal activities, it is required to act with reasonable care so as to avoid creating a hazardous condition or exacerbating a natural hazard created by the storm” (Kantor v Leisure Glen Homeowners Assn., Inc., 95 AD3d at 1177; see Salvanti v Sunset Indus. Park Assoc., 27 AD3d at 546; Chaudhry v East Buffet & Rest., 24 AD3d 493).

Here, the defendant failed to demonstrate his prima facie entitlement to judgment as a matter of law dismissing the cause of action to recover damages for legal malpractice on the ground that the plaintiff could not have prevailed in an action against the property owner. While the defendant demonstrated, prima facie, through certified meteorological data and the plaintiff’s deposition testimony, that the accident occurred less than one hour after the snowstorm ceased, he did not eliminate triable issues of fact as to whether the property owner created or exacerbated a hazardous condition through negligent snow removal efforts (see Anderson v Landmark at Eastview, Inc., 129 AD3d 750, 751; Salvanti v Sunset Indus. Park Assoc., 27 AD3d at 546-547; Chaudhry v East Buffet & Rest., 24 AD3d at 494). In particular, in light of the plaintiff’s deposition testimony, a triable issue of fact exists as to whether the property owner, upon clearing snow from a small portion of the premises, had left a pile of snow that the plaintiff had to “lift [her] leg” to “cross” over, causing her to slip and fall. Accordingly, that branch of the defendant’s motion which was for summary judgment dismissing the legal malpractice cause of action should have been denied.”

A Sole Cause of Action Survives After Reversal on Appeal

Posted in Legal Malpractice Cases

Palmeri v Wilkie Farr & Gallagher LLP  2017 NY Slip Op 05794  Decided on July 25, 2017
Appellate Division, First Department is one of those rare cases where a subsidiary cause of action survives, while the major causes of action are all dismissed.  In the legal malpractice world, the major cause of action is LM, while the subsidiary causes are breach of contract or breach of fiduciary duty.  The latter two are often dismissed as “duplicitive” of the LM cause of action.  Here, the opposite obtains.

“Order, Supreme Court, New York County (Eileen Bransten, J.), entered November 5, 2015, which, to the extent appealed from as limited by the briefs, granted defendant’s motion for summary judgment dismissing the complaint, unanimously modified, on the law, to deny in part defendant’s motion for summary judgment, and reinstate the first cause of action for breach of fiduciary duty, and otherwise affirmed, without costs.”

“Defendant moved under CPLR 3212 to dismiss the complaint as time-barred and for failure to state a claim. Plaintiff cross-moved for summary judgment in his favor. In its decision, which it read into the record, the IAS court found that all six of plaintiff’s claims were premised on the same operative facts and sought identical monetary damages. Accordingly, the IAS court “merged” plaintiff’s claims for gross negligence, breach of contract and breach of the implied covenant of good faith and fair dealing into his legal malpractice claim, leaving for consideration only that claim and claims based on breach of fiduciary duty.

The IAS court then dismissed both claims as untimely. Because plaintiff sought purely monetary damages, the court applied the three-year statute of limitations to the breach of fiduciary duty claim, rather than the six-year period. The court held that the claim was time-barred, since plaintiff filed it in February 2013, more than three years after defendant represented him from January through June 2009.

To begin, the motion court properly dismissed plaintiff’s claims for gross negligence, breach of contract, and breach of the implied covenant of good faith and fair dealing as duplicative of his legal malpractice claim, given that they are all based on the same facts and seek the same relief (Sun Graphics Corp. v Levy, Davis & Maher, LLP, 94 AD3d 669 [1st Dept 2012]).

Plaintiff’s claim for legal malpractice, in turn, is untimely. Claims for legal malpractice are subject to a three-year statute of limitations and accrue when the malpractice is committed, not when the client learns of it (Lincoln Place, LLC v RVP Consulting, Inc., 70 AD3d 594 [1st Dept 2010], lv denied 15 NY3d 710 [2010]; CPLR 214[6]). Plaintiff’s legal malpractice claim first accrued on or about June 25, 2009, when defendant terminated its legal representation of him, but continued to represent Ramius in the ongoing FINRA investigation. He did not, however, file his claim until February 15, 2013, more than three years later.

In addition, the motion court correctly dismissed the claim for aiding and abetting a breach of fiduciary duty, as plaintiff is collaterally estopped from relitigating the question of whether an attorney-client relationship existed between him and his employer’s in-house counsel. The identical issue was decided in the FINRA proceeding and plaintiff had a full and fair opportunity to litigate it before FINRA (see Jeffreys v Griffin, 1 NY3d 34, 39 [2003]; Auqui v Seven Thirty One Ltd. Partnership, 22 NY3d 246, 255 [2013]).

However, the IAS court should have permitted the breach of fiduciary duty claim to proceed. The IAS court correctly noted that the claim was subject to a three-year statute of limitations. The court was mistaken, however, in finding that the allegedly wrongful conduct ended on June 25, 2009, when defendant unilaterally terminated its representation of plaintiff. On the contrary, defendant’s conduct extended through at least June 29, 2011, during which time it represented Ramius and its employees in their participation at plaintiff’s FINRA disciplinary hearing.”

“Here, plaintiff has presented evidence of a “continuing wrong,” which is “deemed to have accrued on the date of the last wrongful act” (Leonhard v United States, 633 F2d 599, 613 [2d Cir. 1980], cert denied 451 US 908 [1981]; Harvey, 34 AD3d at 364). Indeed, the record contains evidence sufficient to create an issue of fact as to whether defendant breached its fiduciary obligations to plaintiff after June 2009 and well into June 2011 during its ongoing representation of the Ramius parties.”

The Outcome Was Correct; The Process Was Flawed

Posted in Legal Malpractice Cases

When you tease out the underlying process of the summary judgment motion practice in Burbige v Siben & Ferber  2017 NY Slip Op 05704  Decided on July 19, 2017  Appellate Division, Second Department it becomes apparent that the Appellate Division saw less in the underlying motions than did Supreme Court.  Both, however, came to the same conclusion.  No one wins summary judgment.  Defendants did not even show prima facie entitlement to summary judgment, and the motion should have been denied outright.

“ORDERED that the order is affirmed insofar as appealed and cross-appealed from, without costs or disbursements.

Multiple summary judgment motions in the same action should be discouraged in the absence of a showing of newly discovered evidence or other sufficient cause (see Valley Natl. Bank v INI Holding, LLC, 95 AD3d 1108). However, under the circumstances of this case, the Supreme Court improvidently exercised its discretion in denying the plaintiff’s cross motion for summary judgment as a successive motion, and declining to reach the merits on the issue of liability (see Town of Angelica v Smith, 89 AD3d 1547, 1549).”

“Here, contrary to the Supreme Court’s determination, the defendants failed to establish their prima facie entitlement to judgment as a matter of law dismissing the complaint. The defendants’ submissions in support of their motion for summary judgment did not establish, prima facie, that the plaintiff will be unable to prove at least one element of his legal malpractice claim (see Kempf v Magida, 116 AD3d 736, 736; Barnave v Davis, 108 AD3d 582Alizio v Feldman, 82 AD3d 804). Furthermore, the defendants failed to establish, prima facie, that the plaintiff did not sustain “actual and ascertainable damages” as a result of the defendants’ alleged neglect of the underlying action (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442; see Suydam v O’Neill, 276 AD2d at 550).

In addition, the plaintiff’s opposition papers raised a triable issue of fact as to whether the defendants’ lengthy delay in prosecuting the underlying action was a proximate cause of the plaintiff’s loss (see Shopsin v Siben & Siben, 268 AD2d 578, 578-579). The plaintiff’s reliance upon the same evidence in support of that branch of his cross motion which was for summary judgment on the issue of liability was similarly insufficient to establish a prima facie case of legal malpractice (see Feldman v Finkelstein & Partners, LLP, 131 AD3d 505, 507). Accordingly, the Supreme Court properly denied the defendants’ motion for summary judgment dismissing the complaint and that branch of the plaintiff’s cross motion which was for summary judgment on the issue of liability.

Contrary to the plaintiff’s contention, he failed to establish that the conduct of the defendants’ counsel was frivolous. Accordingly, the Supreme Court providently exercised its discretion in denying that branch of his cross motion which was to impose sanctions upon the defendants’ counsel pursuant to 22 NYCRR 130-1.1.”