Buried in the lede is the notion that legal malpractice claims were dismissed, and no appeal presented.  Breach of fiduciary duty claims in Jadidian v Goldstein  2022 NY Slip Op 06695
Decided on November 23, 2022  Appellate Division, Second Department were dismissed as well, but an appeal was attempted on the basis that the statute of limitations for Breach of Fiduciary Duty has two separate time-spans, three years or six.

“On March 24, 2021, the plaintiffs commenced this action against their former attorneys to recover damages for legal malpractice and breach of fiduciary duty. The plaintiffs alleged, inter alia, that the defendants committed legal malpractice in connection with their representation of the plaintiffs in three prior actions, each of which settled on October 16, 2015. The plaintiffs also alleged that “[i]n an attempt to cover up their . . . negligence” in connection with the three underlying actions, the defendants commenced a prior legal malpractice action on the plaintiffs’ behalf against prior counsel who had represented the plaintiffs in one of the underlying actions.

In May 2021, the defendants moved pursuant to CPLR 3211(a) to dismiss the complaint, asserting, among other things, that the plaintiffs’ causes of action were time-barred. The plaintiffs cross-moved pursuant to CPLR 3025(b) for leave to amend the complaint. In an order entered August 4, 2021, the Supreme Court granted the defendants’ motion and denied, as academic, the plaintiffs’ cross motion. The plaintiffs appeal from so much of the order as granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a) to dismiss the cause of action alleging breach of fiduciary duty and denied, as academic, the plaintiffs’ cross motion pursuant to CPLR 3025(b) for leave to amend the complaint.

Contrary to the plaintiffs’ contention, the Supreme Court properly granted that branch of the defendants’ motion which was to dismiss the cause of action alleging breach of fiduciary duty. There is no single statute of limitations for causes of action alleging breach of fiduciary duty (see IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d 132, 139; Matter of Hersh, 198 AD3d [*2]766, 769). “Where the relief sought is equitable in nature, the statute of limitations is six years, and where the relief sought is purely monetary, the statute of limitations is generally three years” (Matter of Hersh, 198 AD3d at 769). However, “regardless of the relief sought, ‘where an allegation of fraud is essential to a breach of fiduciary duty claim, courts have applied a six-year statute of limitations under CPLR 213(8)'” (id., quoting IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d at 139; see McDonnell v Bradley, 109 AD3d 592, 594). A cause of action alleging breach of fiduciary duty “accrues at the time of the [alleged] breach, even though the injured party may not know of the existence of the wrong or injury” (Matter of Hersh, 198 AD3d at 769 [internal quotation marks omitted]; see Sternberg v Continuum Health Partners, Inc., 186 AD3d 1554, 1557).

Here, the cause of action alleging breach of fiduciary duty was subject to a three-year statute of limitations since the relief sought was monetary in nature and the complaint failed to allege all the requisite elements of fraud, including justifiable reliance (see Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 562; IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d at 140; Oppedisano v D’Agostino, 196 AD3d 497, 499). As the plaintiffs maintain, the cause of action alleging breach of fiduciary duty began to run, at the latest, on January 11, 2016, when the defendants allegedly commenced the prior legal malpractice action “to cover up their . . . negligence.” Thus, since the plaintiffs did not commence the instant action until March 24, 2021, more than three years later, the cause of action alleging breach of fiduciary duty was time-barred.”

Rosenbaum v Myers, 2022 NY Slip Op 33975(U)  November 18, 2022  Supreme Court, New York County  Docket Number: Index No. 652971/2019  Judge: Lucy Billings is a most unusual story.  Attorney and divorce client meet, successfully obtain the divorce, fashion the attorney fee payment based upon investment advice given by the attorney to the client, purchase a Lennox Avenue property and live together for years.  The attorney is supposed to get a percentage of the sale price of the property, but, alas, is not paid.

“The parties lived together from approximately 2007 to 2019. Before then, defendant was married to non-party William Kaczmarek. Defendant and Kaczmarek litigated a divorce action between 2002 and 2006, when their divorce was finalized. According to the complaint in this action, during the divorce action, “Plaintiff provided advice to Defendant, appeared on Defendant’s behalf in the divorce proceeding, assisted in negotiating the settlement, and helped obtain the favorable resolution of the proceeding.”

“Plaintiff also helped defendant deal with the acquisition and development of residential property at 202 Lenox Avenue, New York County, an asset at issue in the divorce action. · Id. ii 14-15. Defendant did not pay plaintiff for his legal services, but she later signed a document titled “Acknowledgment of Debt” dated February 7, 2005, which, on its face, acknowled~~s a debt defendant owed to plaintiff for legal advice and services he previously provided equal to 25% of the net profit from the potential future sale 0£ the Lenox Avenue propeity. Aff. of Benjamin Allee Ex. 1, NYSCEF Doc. 85. The document describes the debt as owed for plaintiff’s “extensive representation and advice in all legal proceedings and negotiations with various parties, the City of New York, and the financing and development of the property.” Id. This advice and representation dated back to at least June 7, 2004, when plaintiff alleges that he advised defendant to consider obtaining the Lenox Avenue property in her divorce settlement and dealt with the City of New York and Astoria Bank to help her acquire the property, obtain a mortgage, and develop the property. The only legal proceedings were in the divorce action. In February 2016 defendant sold the property and did not pay plaintiff. ”

“After the parties’ romantic relationship ended in 2019, plaintiff sued on a single breach of contract claim to enforce the Acknowledgment of Debt .. Defendant counterclaimed for
plaintiff’s legal malpractice in his representation of her during her divorce action and for intentional infliction of emotional distress, alleging domestic violence and physical and verbal
abuse between January 13 and February 12, 2019. ”

“To establish breach of a contract, plaintiff must demonstrate a contract that plaintiff performed and that defendant breached and damages from defendant’s breach. Alloy Advisory, LLC v. 503 W. 33rd St. Assocs., Inc., 195 A.D.3d 436, 436 (1st Dep’t 2021). For a contract, plaintiff points to the Acknowledgment of Debt, which describes plaintiff’s consideration
as prior legal services. Allee Aff. Ex. 1. It is undisputed that plaintiff provided legal services to defendant and that defendant has not paid to plaintiff her consideration: 25% of
the net profit from the sale of the property described in the Acknowledgment of Debt. Therefore plaintiff has made a prima facie showing of d~fendant’s breach of· that 6ontract, shifting the burden to defendant to demonstrate the absence of at least one of the elements of the breach of contract claim . ”

“If this consideration, legal representation and counsel in defendant’s divorce action, were prospective consideration for a promised 25% of the net profits from the sale of the Lenox Avenue property, that consideration would be unenforceable. It is undisputed that plaintiff did not abide by the rules governing attorneys’ representation of clients in matrimonial actions, which require a written retainer agreement. 22 N.Y.C.R.R. § 1400.3; Rosenbaum v. Myers, 191 A.D.3d 445, 446 (1st Dep’t 2021).

An attorney’s failure to abide by the rules in matrimonial actions bars the attorney’s recovery of fees, invalidating the Acknowledgment of Debt. Law Off. of Sheldon Eisenberger v.
Blisko, 106 A.D.3d 650, 652 (1st Dep’t 2013); Edelman v. Poster, 72 A.D.3d 182, 184 (1st Dep’t 2010); Julien v. Machson, 245 A.D.2d 122, 122 (1st Dep’t 1997); Grecco v. Grecco, 161
A.D.3d 950, 951 (2d Dep’t 2018) (collecting decisions). Plaintiff insists that 22 N.Y.C.R.R. Part 1400’s client protective requirements do not apply to him, as 22 N.Y.C.R.R. §
1400.1 excepts attorneys who are not being paid by their client from those requirements. If plaintiff is not to be paid by his client, however, his legal services are not consideration for the purpose of validating the purported contract. On the other hand, were plaintiff’s legal services prospective consideration in the contract, the exception in 22 N.Y.C.R.R. § 1400.1 would not apply, and the contract would be unenforceable. Adjmi v. Tawil, 180 A.D.3d 435, 436 (1st Dep’t 2020); Law Off. of Sheldon Eisenberger v. Blisko, 106 A.D.3d at 651; Edelman v. Poster, 72 A.D.3d at 184. Plaintiff may not circumvent important measures for the protection of clients in matrimonial actions through the cunning use of a contract after the fact, having claimed his services were pro bono only when convenient. “

Cases are settled with releases, and more and more often, non-parties to the litigation are included in the release along with the parties.  Releases will be for the parties, their insurers, their agents, and often, their attorneys.  Such was the case in 179-94 ST LLC v Hassan  2022 NY Slip Op 33870(U)  November 16, 2022  Supreme Court, New York County
Docket Number: Index No. 155214/2015  Judge: Paul A. Goetz.

“Plaintiff 179-94 ST LLC (179-94 ST) is the owner of real property located at 179 East 94th Street, New York, New York (the building), it purchased from defendant Gago Properties
LLC on October 6, 2014. Plaintiff Michael Kaplan is a member of 179-94 ST and plaintiff Yashar Foundation Inc. is the net lessee of the building. After 179-94 ST purchased the
building, plaintiffs learned that one of the units was occupied by defendant Sania Hassan, who had entered into a 15-year lease with Gago Properties LLC, a month before the sale. As  a result, plaintiffs commenced three separate actions related to the sale, claiming, in relevant part, that defendants Gago Properties LLC and Robert Gago (Gago Defendants) and their attorney, defendant Brian Limmer, defrauded plaintiffs by failing to disclose Hassan’ s tenancy in the building and making misrepresentations in connection with the sale. Since then, the three related actions were consolidated into this action and some of the defendants have settled with plaintiffs. ”

“Limmer now moves pursuant to CPLR § 3212 for summary judgment seeking dismissal of the claims asserted against him by 179-94 ST as well as dismissal of the cross-claims for legal malpractice asserted by the Gago Defendants. Plaintiffs Michael Kaplan and Yashar Foundation have not asserted any claims against Limmer.
In support of his motion, Limmer argues that 179-94 ST’ s claims against him are barred by the broad release executed on October 14, 2014, which provides that releasor, 179-94 ST, for the sum of $160,000 and the transfer of the deed, “hereby releases and discharges Gago Properties LLC and Robert Gago, [and] its … attorneys … from all actions, causes of action … from the beginning of the world to the day of the date of this release” (Affm of Keith Roussel dated June 29, 2022, Exh. 31). 179-94 ST argues that despite its broad language, the release does not bar its claims against Limmer because the release was only meant to cover the assignment of the mortgage and the discontinuance of the pending foreclosure action against the property and not any claims arising from the sale of the property. In support, 179-94 ST cites to a contemporaneous email relating to the release as well as affidavits from its principals which explain the intended scope of the release.”

“The plain language of the release is clear and unambiguous and demonstrates the parties’ intent to settle all claims 179-94 ST had or could have against the
Gago Defendants and their agents, including their attorney, Limmer. Thus, because the language of the release is clear and unambiguous on its face, the extrinsic evidence offered by 179-94 ST cannot be examined (Goldberg v. Manufacturers Life Ins. Co., 242 A.D.2d 175, 181 [1 st Dep’t 1998] [“that plaintiffs now profess their subjective intention was not to surrender any rights under policy 2 does not defeat enforcement of the clear intent of the release.]; see also AckoffOrtega v. Windswept Pacific Entertainment, 120 F.Supp.2d 273,282 [S.D.N.Y. 2000]). Accordingly, 179-94 ST’s claims against Limmer must be dismissed.”

 

After a long hibernation period, Grace v. Law is now appearing more frequently in legal malpractice cases, mostly as a defense to statute of limitations arguments.  Kreutzberg v Law Offs. of John Riconda, P.C.  2022 NY Slip Op 06475  Decided on November 16, 2022  Appellate Division, Second Department is one example.  Not raised in Supreme Court, the argument that the legal malpractice case could not be brought was impermissible for the first time on appeal.

“On May 26, 2020, the plaintiff commenced the instant action to recover damages for legal malpractice, alleging that the defendants failed to first obtain the consent of the plaintiff’s workers’ compensation carrier, as required pursuant to Workers’ Compensation Law § 29(5), with regard to a settlement of a no-fault claim and personal injury action on July 2, 2009. The defendants moved, inter alia, pursuant to CPLR 3211(a)(5) to dismiss the complaint as time-barred. The Supreme Court granted that branch of the defendants’ motion. The plaintiff appeals.”

“The statute of limitations for a cause of action to recover damages for legal malpractice is three years (see CPLR 214[6]; Tulino v Hiller, P.C., 202 AD3d at 1135), which accrues at the time the malpractice is committed, not when the client discovers it (see Shumsky v Eisenstein, 96 NY2d 164, 166; Goodman v Weiss, Zarett, Brofman, Sonneklar & Levy, P.C., 199 AD3d 659, 661; Sclafani v Kahn, 169 AD3d 846, 848).

Here, the plaintiff’s cause of action accrued on July 2, 2009, when the no-fault claim [*2]and personal injury action were settled without first obtaining the consent of the plaintiff’s workers’ compensation carrier to the settlement, as required pursuant to Workers’ Compensation Law § 29(5) (see Amodeo v Kolodny, P.C., 35 AD3d 773, 774). Thus, the defendants established, prima facie, that the time in which to commence the instant action has expired. In opposition, the plaintiff failed to raise a question of fact.

The plaintiff’s contentions regarding Grace v Law (24 NY3d 203), and the doctrine of continuous representation were not advanced before the Supreme Court in opposition to that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(5) to dismiss the complaint as time-barred. Thus, these contentions are improperly raised for the first time on appeal and are not properly before this Court (see Matter of Ray v County of Suffolk, 204 AD3d 807Martinez v City of New York, 175 AD3d 1284, 1285).”

Earlier, we discussed the elements of a Breach of Fiduciary Duty Claim as enunciated in Shan Yun Lin v Lau  2022 NY Slip Op 06279  Decided on November 9, 2022  Appellate Division, Second Department.  Today, legal malpractice elements.

“The existence of an attorney-client relationship is an essential element of a cause of action to recover damages for legal malpractice (see Lindsay v Pasternack Tilker Ziegler Walsh Stanton & Romano LLP, 129 AD3d 790, 792). “An attorney-client relationship may exist in the [*2]absence of a retainer or fee” (Willoughby Rehabilitation & Health Care Ctr., LLC v Webster, 190 AD3d 887, 889). “In determining the existence of an attorney-client relationship, a court must look to the actions of the parties to ascertain the existence of such a relationship” (Wei Cheng Chang v Pi, 288 AD2d 378, 380). “[A] party’s unilateral belief does not confer upon him or her the status of client. Rather, to establish an attorney-client relationship, there must be an explicit undertaking to perform a specific task” (Willoughby Rehabilitation & Health Care Ctr., LLC v Webster, 190 AD3d at 889; see Volpe v Canfield, 237 AD2d 282, 283).

Here, in affidavits properly submitted to amplify the allegations in the complaint (see Leon v Martinez, 84 NY2d 83, 88), the plaintiffs averred that Lau met with them to form WRE I and orally informed them that he was representing them, instructed them to wire funds to his escrow account, committed to certain conditions of disbursement of those funds, and advised that he would continue to represent them on matters related to the property to be acquired by WRE I. Contrary to the Lau defendants’ contention, assuming these allegations to be true and affording the plaintiffs the benefit of every possible favorable inference (see J.P. Morgan Sec. Inc. v Vigilant Ins. Co., 21 NY3d 324, 334), they sufficiently alleged the existence of an attorney-client relationship (see Ripa v Petrosyants, 203 AD3d 770; Blank v Petrosyants, 203 AD3d 685Mawere v Landau, 130 AD3d 986, 990).

Further, since legal malpractice actions are not subject to special pleading requirements, “a legal malpractice plaintiff need not, in order to assert a viable cause of action, specifically plead that the alleged malpractice fell within the agreed scope of the defendant’s representation” (Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34, 39; see Fitzsimmons v Pryor Cashman LLP, 93 AD3d 497, 498). “Rather, a legal malpractice defendant seeking dismissal pursuant to CPLR 3211(a)(1) must tender documentary evidence conclusively establishing that the scope of its representation did not include matters relating to the alleged malpractice” (Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d at 39 [emphasis omitted]). Here, the Lau defendants failed to submit such documentary evidence.”

 

Shan Yun Lin v Lau  2022 NY Slip Op 06279  Decided on November 9, 2022  Appellate Division, Second Department gives a concise description of a good breach of fiduciary duty claim.

“The Supreme Court also properly denied dismissal of the breach of fidiciary duty cause of action as duplicative of the legal malpractice cause of action. “An attorney holding funds in escrow owes a fiduciary duty to anyone with a beneficial interest in the trust” (Baquerizo v Monasterio, 90 AD3d 587, 587 [internal quotation marks omitted]; see Levit v Allstate Ins. Co., 308 AD2d 475, 477; Takayama v Schaefer, 240 AD2d 21, 25). An escrow agent has a duty not to deliver the escrow funds to anyone except upon strict compliance with the conditions imposed (see Sasidharan v Piverger, 145 AD3d 814, 815; Baquerizo v Monasterio, 90 AD3d at 587; Matter of Ginzburg, 89 AD3d 938, 941). Here, the complaint sufficiently pleaded the existence of an oral escrow agreement (see Gargano v Morey, 165 AD3d 889, 891), invoking fiduciary duties even in the absence of an attorney-client relationship. Therefore, as the court correctly determined, the breach of fiduciary duty cause of action was properly pleaded in the alternative, in the event that it is ultimately determined that no attorney-client relationship existed or that the Lau defendants’ conduct related to the escrow funds was not within the scope of any such relationship.

Finally, contrary to the Lau defendants’ contention, an exculpatory clause in the limited liability company agreement of WRE I did not conclusively establish a defense to the breach of fiduciary duty cause of action as a matter of law. Insofar as the exculpatory clause is applicable to the Lau defendants’ actions taken in good faith as an escrow agent (cf. Baquerizo v Monasterio, 90 AD3d at 587), the complaint sufficiently alleges that the challenged disbursement was not made in good faith or was the result of the Lau defendants’ gross negligence, and the documentary evidence did not conclusively defeat those allegations (see Elbayoumi v TD Bank, N.A., 185 AD3d 786, 789; Lenoci v Secure Alarm Installations, LLC, 97 AD3d 800, 801).”

Besides the question of whether there was continuous representation, Basile v Law Offs. of Neal Brickman, P.C. 2022 NY Slip Op 06079 Decided on November 01, 2022 Appellate Division, First Department considers the question of how the defendant law office handled its move and forwarding of mail.

“The legal malpractice claim may not be barred by the three-year statute of limitations (CPLR 214[6]). Plaintiff contends that the claim was tolled by the continuous representation doctrine based on alleged emails and telephone conversations about collecting on plaintiff’s money judgment against the judgment debtor following its entry in 2010, at which time the judgment debtor did not have sufficient assets to satisfy the judgment. Defendants, however, assert that there was no continuous representation because plaintiff had no communication with them concerning collecting on the unsatisfied judgment until August 2019, when the limitations period on the instant claim had expired. These factual contentions concerning whether defendant continued to represent plaintiff during the relevant time period so as to toll the limitations period give rise to factual issues that cannot be resolved in this pre-answer motion to dismiss (see Boesky v Levine, 193 AD3d 403 [1st Dept 2021]; Johnson v Law Off. of Kenneth B. Schwartz, 145 AD3d 608, 612 [1st Dept 2016]).

Furthermore, the complaint’s allegations are sufficient to state a cause of action for legal malpractice. Plaintiff alleges that defendants were negligent in not objecting to the judgment debtor’s bankruptcy proceeding in 2015, which resulted in a discharge order that barred plaintiff from collecting on his money judgment against her. Defendants argue that they did not breach their duty to plaintiff by not intervening in the bankruptcy proceeding because they did not receive notice of the proceeding. Defendants submit the bankruptcy petition, which, in naming plaintiff as a creditor, included an outdated address for defendants and omitted the name of defendants’ law firm or a suite number. These undisputed facts, however, are not sufficient to find as a matter of law that defendants did not breach their duty to plaintiff. Defendants relocated to their new office in September 2014 and the judgment debtor filed her bankruptcy petition in January 2015, three months later. The bankruptcy petition included the name of the attorney who had assisted in plaintiff’s underlying action against the judgment debtor. At the very least, a factual issue exists as to whether the notice of the bankruptcy proceeding to object on plaintiff’s behalf was forwarded to defendants, which cannot be resolved at this juncture. As to proximate cause, contrary to defendants’ contention, proof of the collectability on a judgment is not an essential element of the legal malpractice claim, and arises after the “case within the case” has been proven (Lindenman v Kreitzer, 7 AD3d 30, 35 [1st Dept 2004]).”

Zi Kuo Zhang v Lau  2022 NY Slip Op 06287  Decided on November 9, 2022  Appellate Division, Second Department  is the story of escrow money gone astray.

“The plaintiffs commenced this action against the defendant Jay Lau and his law firm, the defendant Lau & Associates, P.C. (hereinafter together the Lau defendants), among others, asserting, as against the Lau defendants, causes of action to recover damages for legal malpractice and breach of fiduciary duty. The complaint alleged that the Lau defendants represented the plaintiffs in connection with the formation of Wong Real Estate Fund I, LLC (hereinafter WRE I), the receipt of investment funds to be held in escrow, and the disbursement of those funds.

According to the complaint, the purpose of WRE I was to purchase and develop certain property located on 41st Avenue in Flushing. However, the plaintiffs’ funds held in the Lau defendants’ escrow account were disbursed in connection with a different property, located on 77th Street in Elmhurst (hereinafter the 77th Street property), which was purchased by another client of the Lau defendants. The plaintiffs agreed to the disbursement but requested a security interest in the hotel on the 77th Street property. Neither WRE I nor the plaintiffs received any interest in the 77th Street property.”

“The existence of an attorney-client relationship is an essential element of a cause of action to recover damages for legal malpractice (see Lindsay v Pasternack Tilker Ziegler Walsh [*2]Stanton & Romano LLP, 129 AD3d 790, 792). “An attorney-client relationship may exist in the absence of a retainer or fee” (Willoughby Rehabilitation & Health Care Ctr., LLC v Webster, 190 AD3d 887, 889). “In determining the existence of an attorney-client relationship, a court must look to the actions of the parties to ascertain the existence of such a relationship” (Wei Cheng Chang v Pi, 288 AD2d 378, 380). “[A] party’s unilateral belief does not confer upon him or her the status of client. Rather, to establish an attorney-client relationship, there must be an explicit undertaking to perform a specific task” (Willoughby Rehabilitation & Health Care Ctr., LLC v Webster, 190 AD3d at 889; see Volpe v Canfield, 237 AD2d 282, 283).

Here, in an affidavit properly submitted to amplify the allegations in the complaint (see Leon v Martinez, 84 NY2d 83, 88), the plaintiff Jun Hong Zhang averred that Lau met with the individual plaintiffs to form WRE I and orally informed them that he was representing them, instructed them to wire funds to his escrow account, committed to certain conditions of disbursement of those funds, and advised that he would continue to represent them on matters related to the property to be acquired by WRE I. Contrary to the Lau defendants’ contention, assuming these allegations to be true and affording the plaintiffs the benefit of every possible favorable inference (see J.P. Morgan Sec. Inc. v Vigilant Ins. Co., 21 NY3d 324, 334), they sufficiently alleged the existence of an attorney-client relationship (see Ripa v Petrosyants, 203 AD3d 770; Blank v Petrosyants, 203 AD3d 685Mawere v Landau, 130 AD3d 986, 990).

Further, since legal malpractice actions are not subject to special pleading requirements, “a legal malpractice plaintiff need not, in order to assert a viable cause of action, specifically plead that the alleged malpractice fell within the agreed scope of the defendant’s representation” (Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34, 39; see Fitzsimmons v Pryor Cashman LLP, 93 AD3d 497, 498). “Rather, a legal malpractice defendant seeking dismissal pursuant to CPLR 3211(a)(1) must tender documentary evidence conclusively establishing that the scope of its representation did not include matters relating to the alleged malpractice” (Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d at 39 [emphasis omitted]). Here, the Lau defendants failed to submit such documentary evidence.

Accordingly, the Supreme Court properly denied dismissal of the legal malpractice cause of action.

The Supreme Court also properly denied dismissal of the breach of fidiciary duty cause of action as duplicative of the legal malpractice cause of action. “An attorney holding funds in escrow owes a fiduciary duty to anyone with a beneficial interest in the trust” (Baquerizo v Monasterio, 90 AD3d 587, 587 [internal quotation marks omitted]; see Levit v Allstate Ins. Co., 308 AD2d 475, 477; Takayama v Schaefer, 240 AD2d 21, 25). An escrow agent has a duty not to deliver the escrow funds to anyone except upon strict compliance with the conditions imposed (see Sasidharan v Piverger, 145 AD3d 814, 815; Baquerizo v Monasterio, 90 AD3d at 587; Matter of Ginzburg, 89 AD3d 938, 941). Here, the complaint sufficiently pleaded the existence of an oral escrow agreement (see Gargano v Morey, 165 AD3d 889, 891), invoking fiduciary duties even in the absence of an attorney-client relationship. Therefore, as the court correctly determined, the breach of fiduciary duty cause of action was properly pleaded in the alternative, in the event that it is ultimately determined that no attorney-client relationship existed or that the Lau defendants’ conduct related to the escrow funds was not within the scope of any such relationship.”

Privity is a keystone in the legal malpractice world.  Here. in Jarmuth v Wagner    2022 NY Slip Op 33698(U)  October 28, 2022  Supreme Court, New York County  Docket Number: Index No. 161816/2019 Judge: Dakota D. Ramseur a co-op shareholder sues the Co-op’s attorney derivatively on behalf of the Co-op.

“In December 2019, Plaintiff Sandra Jarmuth, on behalf of shareholders in 36 East 69th Corp. (the co-op), commenced this derivative suit to recover monetary damages arising from
defendants Steven Wagner, Bonnie Berkow, and the Law Offices of Wagner Berkow LLP’s representation of the co-op in an underlying property-damage action. Plaintiff asserts that
defendants committed legal malpractice when Wagner allegedly advised the co-op to drop a cross-claim for attorneys’ fees it had asserted in the underlying action. The malpractice, plaintiff alleges, prevented the co-op from recovering on $150,000 in legal fees. In Motion Sequence 001, defendants move to dismiss the action pursuant to CPLR 3211 (a) (1), {a) (5), and (a) (7). Likewise, in Motion Sequence 002, the co-op, as a nominal defendant, moves to dismiss pursuant to those same rules. For the following reasons, the motions are granted, and the complaint is dismissed.”

“As to defendants’ motion via CPLR 3211 (a) (7), to properly plead a cause of action for legal malpractice, a plaintiff must allege: (1) the existence of an attorney-client relationship; (2)
negligence on the part of the attorney or some other conduct in breach of that relationship; (3) the attorney’s conduct was the proximate cause of the injury to plaintiff; and (4) that plaintiff suffered actual and ascertainable damages. (Tinter v Rapaport, 253 AD2d 588 [1st Dept 1998].) Stated somewhat differently, a plaintiff must show that the attorney failed to exercise the ordinary reasonable skill and knowledge possessed by a member of the legal profession and the attorney’s breach is a proximate, or “but for,” cause of the plaintiffs injuries. (See Benishai v Epstein, 116 AD3d 726, 727 [2d Dept 2014].) Where a plaintiff fails to plead any element of the legal malpractice standard, the defendant is entitled to a dismissal of the complaint under CPLR 3211 (a) (7). (See Zarin v Reid & Priest, 184 AD2d 385,387 [1st Dept 1992].) Even viewing the complaint in the light most favorable to plaintiff, plaintiff has failed to demonstrate defendant’s negligent or incompetent conduct, that the alleged acts or omission forming the basis of plaintiffs cause of action were the proximate cause of plaintiffs injuries, or that plaintiff suffered ascertainable damages.

Plaintiff summarized the facts constituting her legal malpractice claim as follows: ( 1) the Alteration Agreement provides that Nunnerley would indemnify the co-op for any damages and attorneys’ fees arising from her renovation; (2) Witbeck suffered damages due to Nunnerley’s renovations and brought a claim; (3) upon defendants’ advice, the co-op asserted that a crossclaim against Nunnerley and advised the co-op it had a strong likelihood of success; ( 4) nevertheless, defendants-the attorneys-did not prosecute a claim for legal fees; and (5) the coop suffered $150,000 in damages because the settlement did not include reimbursement for the co-op’s attorney’s fees. (NYSCEF doc. no. 41, plaintiff memo of law; NYSCEF doc. no. 10 at ,r,r 20, 22, and 24, complaint.) Perhaps recognizing the above-stated allegations are entirely conclusory, plaintiff further alleges that defendants failed to prosecute (or advised the co-op not to prosecute) because they believed that the co-op would have to be the prevailing party in the Witbeck action to recover against Nunnerley-a position, plaintiff contends, that was demonstrably incorrect.

Still, after reading plaintiffs opposition papers, it is unclear to the Court which acts and omissions constitute plaintiffs claim for malpractice. As mentioned above, plaintiff highlights
the fact that defendants did not prosecute the co-op’s cross-claim but the Court is unsure where, specifically, the negligence is in “never pursuing a claim” when the co-op itself is responsible for those decisions.3 Similarly, the Court is unsure how plaintiff can argue that the co-op entered the settlement agreement-and forwent the cross-claim-based on erroneous advice provided by defendants when plaintiff acknowledges defendants provided correct advice about the availability of the cross-claim. (NYSCEF doc. no. 10 at ,r22 [“Defendants repeatedly and correctly advised the Shareholders and co-op that they had a strong cross-claim against Nunnerley.”])4 To resolve the tension here, plaintiff alleges that something changed, yet the pleadings require the court to attribute the change to defendants’ malpractice based solely on legal conclusions. From 2013 through 2015, defendants were allegedly giving faulty advice, apparently on an on-going basis, but the pleadings contain no factual allegations-no communications of any kind-that describe or relate to defendants’ advice.”

Sometimes a legal malpractice claim against attorney 1 can trigger disclosure of attorney-client communications with attorneys 2 and 3, if there is a sufficient relationship between the communications with other attorneys and the legal malpractice  claim.  Not so in 2138747 Ontario Inc. v Lehman Bros. Holdings, Inc.  2022 NY Slip Op 06087  Decided on November 01, 2022  Appellate Division, First Department.

“Order, Supreme Court, New York County (Andrea Masley, J.), entered on or about June 29, 2021, which, to the extent appealed from as limited by the briefs, granted defendant’s motion to compel disclosure of documents and communications between plaintiff and its current and former counsel relating to an assignment of a cause of action and to plaintiff’s litigation strategy in a prior lawsuit, unanimously reversed, on the law, with costs, and the motion denied.

This breach of contract action arises from an assignment, from defendant Lehman to plaintiff, of a misappropriation claim owned by Lehman’s subsidiary, LB SkyPower, a renewable energy developer. Pursuant to a nondisclosure agreement (NDA), LB SkyPower shared confidential information with Samsung to be used exclusively to evaluate a potential transaction between the parties. Plaintiff alleges, however, that Samsung misappropriated the confidential information and used it to launch a competing renewable energy project in violation of the NDA. LB SkyPower, subsequently, went bankrupt and was unwilling to prosecute a claim against Samsung.”

“Defendant Lehman’s motion to compel plaintiff to produce certain communications and documents that had been withheld, on the basis of attorney-client privilege, should have been denied. Plaintiff’s conduct in bringing a legal malpractice claim against its former counsel, Goodmans, did not trigger the “at issue” waiver doctrine with regard to plaintiff’s breach of contract claim against defendant Lehman. An “at-issue waiver” of the attorney-client privilege occurs where a party affirmatively places the subject matter of its own privileged communication at issue, such as by asserting a claim or defense that the party intends to prove by use of the privileged material (see Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 62 AD3d 581, 582 [1st Dept 2009]; Deutsche Bank Trust Co. of Ams. v Tri-Links Inv. Trust, 43 AD3d 56, 63 [1st Dept 2007]).

While plaintiff has waived the attorney-client privilege as to any [*2]information that has already been revealed in the pleadings of the malpractice claims against Goodmans, there is no subject matter waiver as a result of these limited disclosures (see Credit Suisse First Boston v Utrecht-America Fin. Co., 27 AD3d 253 [1st Dept 2006] [In breach of contract action, the plaintiff’s allegations concerning reasons for delay in closing did not impliedly waive privilege for related attorney-client communications; even if such waiver occurred, the defendant failed to show that information could not be obtained from other sources]). The advice of counsel is not at issue in plaintiff’s breach of contract claims against defendant Lehman. Nor is this a case where the holder of the privilege affirmatively seeks to use privileged communications while preventing his adversary from examining the remainder of the communications. Thus, the attorney-client communications cited by plaintiff, in the pleadings of the malpractice claims, against Goodmans did not waive plaintiff’s attorney-client privilege as to any confidential communications withheld.”