Grasso v Guarino 2024 NY Slip Op 02692 [227 AD3d 872] May 15, 2024
Appellate Division, Second Department demonstrates how rarely Judiciary Law 487 relief is permitted on motions to dismiss, and even more rarely applied after all motion practice. the AD recited the various standards of the need for “an intent to deceive” as opposed to mere negligence, the requirement of egregious conduct or a chronic and extreme pattern of behavior.

“In 2011, the defendant represented the Town of Babylon in an action (hereinafter the 2011 action) commenced in the District Court, Suffolk County, against the plaintiff, alleging violations of the Town Code. In November 2017, the plaintiff commenced this action against the defendant individually and in his capacity as principal owner of Law Offices of Jerry C. Guarino, P.C. The plaintiff asserted causes of action alleging a violation of Judiciary Law § 487, fraud, and intentional infliction of emotional distress. The basis for the plaintiff’s allegations was the defendant’s conduct in the 2011 action, consisting of, inter alia, an alleged deceitful representation by the defendant in response to the plaintiff’s discovery demands, wherein the defendant represented that there were no notes taken by Town employees related to the plaintiff’s alleged violations of the Town Code, and the defendant’s alleged deceitful statement in a letter to the District Court, asserting that the plaintiff’s counsel had been sanctioned when the defendant should have known that those sanctions had been vacated. The defendant moved pursuant to CPLR 3211 (a) to dismiss the amended complaint. In an order dated March 7, 2022, the Supreme Court granted the motion. The plaintiff appeals.

“On a motion to dismiss pursuant to CPLR 3211 (a) (7), the complaint must be afforded a liberal construction, the facts therein must be accepted as true, and the plaintiff must be accorded the benefit of every possible favorable inference” (Angeli v Barket, 211 AD3d 896, 897 [2022]; see Leon v Martinez, 84 NY2d 83, 87 [1994]).

A cause of action alleging a violation of Judiciary Law § 487 “requires, among other things, an act of deceit by an attorney, with intent to deceive the court or any party” (Shaffer v Gilberg, 125 AD3d 632, 636 [2015] [internal quotation marks omitted]; see Cordell Marble Falls, LLC v Kelly, 191 AD3d 760, 762 [2021]). “ '[V]iolation of Judiciary Law § 487 requires an intent to deceive’ as [*2]opposed to conduct which is negligent” (Cordell Marble Falls, LLC v Kelly, 191 AD3d at 762 [citation omitted], quoting Moormann v Perini & Hoerger, 65 AD3d 1106, 1108 [2009]). “Relief pursuant to Judiciary Law § 487 is not lightly given, and requires a showing of egregious conduct or a chronic and extreme pattern of behavior on the part of the defendant attorneys” (Kaufman v Moritt Hock & Hamroff, LLP, 192 AD3d 1092, 1093 [2021] [citation and internal quotation marks omitted]). “A cause of action alleging a violation of Judiciary Law § 487 must be pleaded with specificity” (id. [internal quotation marks omitted]). Here, even accepting the allegations in the amended complaint as true and according the plaintiff the benefit of every possible favorable inference, the amended complaint did not allege conduct that is actionable under Judiciary Law § 487 (see Kaufman v Moritt Hock & Hamroff, LLP, 192 AD3d at 1093).”

Lutin v Perlberger 2024 NY Slip Op 31879(U) May 29, 2024 Supreme Court, New York County Docket Number: Index No. 158734/2023 Judge: Dakota D. Ramseur is the story of attorney fees, pro-se plaintiffs, a judgment from 2000 and the aftermath. Plaintiff loses this round.

“Pro se plaintiff, Gary Lutin (plaintiff), commenced this action for extortion, fraud, and pursuant to Judiciary Law§ 487, against defendants, Ralph Perlberger, the Law Offices of Ralph Perlberger (collectively, the Perlberger defendants), Eric P. Schutzer (Schutzer) and The Schutzer Group, PLLC (collectively, the Schutzer defendants), stemming from Perlberger’s representation of plaintiff in another matter and the Schutzer defendants’ efforts to collect fees from plaitniff due to Perl berger. The Schutzer defendants now move pursuant to CPLR 321 l(a)(l), (5) and (7) to dismiss the complaint. The motion is opposed. For the following reasons, the motion is granted. As relevant to the instant motion, on July 2, 2001, the New York City Civil Court granted Perlberger a $37,043.75 money judgment against plaitniff in the action entitled Per/berger v Lutin, Index No. TS 1781-00/NY (the 2001 Judgment). The 2001 Judgment covered fees plaintiff owed the Perlberger defendants for legal services rendered in two commercial litigations: Lutin v New Jersey Steel Corporation, et al. and D.S. Atkinson, Inc. v Lutin Central Services Co., Inc. The Civil Court simultaneously dismissed plaintiffs counterclaims against the Perl berger defendants for legal malpractice in those matters. On May 24, 2018, Perl berger commenced an action in Supreme Court, New York County entitled Per/berger v Lu tin, Index No. 154885/2018, by the filing of a summons and motion for summary judgment in lieu of complaint, seeking to renew the 2001 Judgment (the Renewal Action). By order dated August 13, 2018, another justice of this court granted Perl berger’ s motion over plaintiffs opposition and directed the parties to settle an order on notice. On June 5, 2019, the County Clerk entered the renewal judgment against plaintiff in the amount of $97.594.11 (Renewal Judgment). On February 25, 2020, plaintiff filed a motion to vacate the Renewal Judgment for lack of jurisdiction. On April 27, 2020, another justice of this court denied the motion.”

“Claims for “[e]xtortion and attempted extortion are criminal offenses (see Penal Law§ 155.05[2][e]; § 110.00) that do not imply a private right of action” (Minnelli v Soumayah, 41 AD3d 388, 389 [1st Dept 2007]). Plaintiff’s opposition concedes that his allegations concerning extortion do not make out a cognizable claim, but instead requests leave to serve an amended complaint to change his fifth and sixth causes of action to caption them as “Harassment” instead of “Extortion.” Plaintiffs request is denied, as plaintiff has not moved to amend the complaint or otherwise presented any of the substance of the proposed amendments, and thus, the Court is unable to weight the sufficiency of the proposed amendments (see JP Morgan Chase Bank, NA. v Hall, 122 AD3d 576, 582 [2d Dept 2014] [holding that the lower court correctly denied plaintiff’s request for leave to amend was made in a footnote on the final page of the of the third party plaintiffs memorandum of law and “there is no indication, even in a conclusory fashion, as to what the new pleadings would be”]). Plaintiffs allegations that the Schutzer defendants forged documents tie directly into plaintiff’s allegations concerning extortion, that is, plaintiff alleges that the Schutzer defendants used forged documents to extort plaintiff. Thus, as plaintiffs facts alleging extortion do not state a claim, so too are plaintiff’s claims that the Schutzer defendants submitted a forged document insufficient to state a claim. To state a cause of action to recover damages for fraud, which must be pleaded with the requisite particularity under CPLR 3016(b), a plaintiff must allege “[a] misrepresentation or a material omission of fact which was false and known to be false by the defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury” (DeMartino v Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Wolf, LLP, 189 AD3d 774, 775 [2d Dept 2020] [internal quotation marks and citations omitted]).”Pursuant to Judiciary Law§ 487, an attorney who is guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party is guilty of a misdemeanor, and forfeits to the party injured treble damages, to be recovered in a civil action” (DeMartino at 775-76 [internal quotation marks and citations omitted]). A cause of action to recover damages for violation of Judiciary Law § 487 must be pleaded with specificity (see id.). Here, plaintiff fails to plead facts stating a claim for both “fraud on the court” and under Judiciary Law§ 487. Plaintiff essentially alleges that the Schutzer defendants falsely claimed they filed certain documents as part of the Renewal Action, and that those statements resulted “[i]n the improper impositions of costs and burdens not only on Plaintiff and the court but also on non-party organizations” and further that the court in the Renewal Action did not “hear evidence of a previous settlement of Perlberger’ s claims.” However, plaitniff [sic] fails to allege a deception as to material facts, the Schutzer defendants’ intention to deceive, “[o]r that that [plaintiff] suffered damages that were proximately caused by the alleged deceit” (id. at 776). Again, plaintiff requests that: “If the Complaint does not satisfy the pleading requirements established by that case, or by other relevant cases, Plaintiff requests the Court’s direction to amend the Complaint accordingly.” As discussed in the preceding section, plaitniff [sic] failed to provide any factual basis to support his request for leave to amend the complaint, and thus, the request is denied (see JP Morgan Chase Bank, NA. at 582). Accordingly, as plaitniff [sic] failed to plead facts suggesting that the Schutzer defendants intentionally deceived plaintiff or the Court, or any damages flowing therefrom, plaintiff’s claims for “fraud on the court” and under Judiciary Law § 487 are dismissed.”

Supreme Court, New York County dealt with a number of arguments on why the legal malpractice complaint should be dismissed in 538 Morgan Realty LLC v Law Off. of Aihong You, PC 2024 NY Slip Op 32300(U) July 2, 2024 Supreme Court, New York County Docket Number: Index No. 153886/2023 Judge: Richard G. Latin. Only one stuck, and that addressed the speculative issue of how a court would have decided a case had a specific motion actually have been made.

“Plaintiffs 538 Morgan Realty LLC, SD International Inc., Dian Kui Su, Qing Mei Zhao, and Tian Fang Su (“Plaintiffs”) were owners of a property located at 540 Morgan Avenue, Brooklyn, New York 1122 (the “Property”) (NYSCEF # 9 ¶ 14; NYSCEF # 31 at 2). On March 3, 2015, Plaintiffs entered into a contract to sell the Property to 538 Morgan Avenue Properties LLC and NY Stone Kitchen Depot, Inc. (“Buyers”) for $4 million (“Property Contract”) (NYSCEF # 9 ¶ 15). On the same day on March 3, 2015, the Buyers also entered into a contract to purchase Plaintiff SD International Inc.’s business assets for $702,793.00 (the “Business Contract”), which was located at the Property (NYSCEF # 9 ¶ 16). The Business Contract was fully performed (NYSCEF # 9 ¶ 16). Allegedly the Property Contract was not fully performed and on June 24, 2015, Buyers sued Plaintiffs in New York for the failed real estate deal (the “Underlying Litigation”) (NYSCEF # 9 ¶ 17). The action was captioned 538 Morgan Avenue Properties LLC, et all., v. 538 Morgan Realty LLC, et al., Index No. 507788/2015 (NYSCEF # 9 ¶ 18; NYSCEF # 31 at 3). The Underlying Litigation involved the Buyers suing Plaintiffs for breach of contract and sought the full $5 million liquidated damages amount stated in the Property Contract’s liquidated damages clause (NYSCEF # 9 ¶ 20). Additionally, Buyers sued Plaintiffs for conversion, seeking $1.8 million by alleging that Plaintiffs wrongfully took possession of that sum, which was purportedly made as a “cash down payment on the Property” (NYSCEF # 9 ¶ 20). In response, Plaintiffs denied these allegations and filed counterclaims regarding the alleged breach of contract claim (NYSCEF # 9 ¶ 20).”

“However, negligence alone is insufficient to establish legal malpractice. For the reasons stated below, the malpractice claim is dismissed for failure to adequately allege causation and damages. To satisfy the pleading requirement for causation, it must be alleged that “but for” the attorney’s conduct, the client would have prevailed in the underlying action or would not have sustained any ascertainable damages” (Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 272 [1st Dept 2004]; Cosmetics Plus Group, Ltd. v Traub, 105 AD3d 134, 140 [1st Dept 2013]). As to damages, “to survive a … pre-answer dismissal motion, a pleading need only state allegations from which damages attributable to the defendant’s conduct for nonfeasance] may be reasonably inferred” (Lappin v Greenberg, 34 AD3d 277, 279 [1st Dept 2006] [internal citations omitted]). But conclusory allegations of damages predicated on speculation cannot suffice for a legal malpractice action (Volpe v Munoz and Associates, LLC, 190 AD3d 661, 661 [1st Dept 2021] citing Bua v Purcell & Ingrao, P.C, 99 AD3d 843, 848 [2d. Dept 2012] lv denied 20 NY3d 857 [2013]). All of the Defendants argue that Plaintiffs’ allegations for failure to argue or file a motion against the liquidated damages provision fail to prove causation that “but for” this failure, Plaintiffs would not have suffered injury (NYSCEF # 31 at 6; NYSCEF # 37 at 11). Defendants also argue that Plaintiffs’ allegations are mere speculation (NYSCEF # 31 at 6; NYSCEF # 37 at 11). Plaintiffs respond that the claims are not speculative and satisfies the “but for” standard (NYSCEF # 61 at 5; NYSCEF # 62 at 10). In response to Aihong You’s motion, Plaintiffs aver that the allegations meet the burden to survive a motion to dismiss because Plaintiffs need to only plead facts that permit the inference of causation and need not to establish causation (NYSCEF # 61 at 5; [citing Voluto Ventures, LLC v Jenkens & Gilchrist Chapin LLP, 46 AD3d 354, 355 [1st Dept 2007]). Plaintiffs respond to Defendants Joseph & Smargiassi LLC’s speculation argument that had the motion been filed contesting the liquidated damages provision, it would be highly likely that the provision would have been deemed an enforceable penalty, thus sufficiently establishing causation that “but for” Defendants’ failure, Plaintiffs would have had a more favorable outcome (NYSCEF # 62 at 11). Even under the standard of a motion to dismiss, after affording Plaintiffs every favorable inference, the court finds that the complaint fails to adequately plead causation to survive the motion at this stage. Plaintiff sufficiently alleges that, “but for” defendants’ negligence, it would have obtained a more favorable result through litigation (see Katebi v Fink, 51 AD3d 424, 425 [1st Dept 2008] [finding malpractice not viable since the settlement of the underlying action was the client’s own choice and not compelled by the mistakes of counsel]). Alternatively, Plaintiffs claim but for Defendants’ negligence, they would still have settled but obtained a better settlement outcome (see Perkins v Norwick, 257 AD2d 48, 51-52 [1st Dept 1999] [finding that plaintiff’s allegations that he might have negotiated different terms but for defendant’s negligence is “entirely speculative”]).

Plaintiffs’ claim fails as it is based on mere speculation of uncertain future events (id.). Plaintiffs allege that if Defendants had argued against the liquidated damages provision, Plaintiffs would have won that argument, and therefore would have received a favorable outcome (NYSCEF # 61 at 5). The court disagrees. It is speculative that Plaintiffs would claim and assume that they would have prevailed if the argument against the liquidated damages clause was made (see Lisi v Lowenstein Sandler LLP, 170 AD3d 461, 462 [1st Dept 2019] [rejecting plaintiff’s claim of proximate cause as merely speculative]; see also Sherwood Group v Dornbush, Mensch, Mandelstam & Silverman, 191 AD2d 292, 294 [1st Dept 1993] [finding that hypothetical course of events on which any determination of damages would have to be based on constitutes “gross speculations on future events”]). Liquidated Damages Clause Plaintiffs’ argument regarding the liquated damages clause, stems from claiming that the liquidated damages clause would automatically be deemed unenforceable (NYSCEF # 61 at 7). Plaintiffs reference Justice Silber’s comments concerning Defendants’ failure to file any motions contesting the liquidated damages clause within seven years of litigation and 39 motions during the Underlying Litigation (NYSCEF # 61 at 7-8). The court disagrees. A liquated damages provision is not automatically considered unenforceable but rather it would be based on what was stated in the provision, such as if damages flowing from a breach in contract were easily ascertainable at the time of the execution or if the damages are conspicuously disproportionate to the probable losses (see JMD Holding Corp. v Cong. Fin. Corp., 4 NY3d 373, 380 [2005]). “

Silverstein v Nezhat 2024 NY Slip Op 32173(U) June 24, 2024 Supreme Court, New York County Docket Number: Index No. 109486/2006 Judge: Kathy J. King is a final attempt to increase the award in a medical malpractice case via a claim of violation of Judiciary Law 487. It fails.

“The instant medical malpractice action was commenced in 2006 against Mount Sinai Hospital and Dr. Farr Nezhat. Plaintiff, who is an attorney and proceeding pro se in this application, was represented by counsel at trial, in early 2016. The case was tried to verdict over the course of 15 days before the Honorable Eileen A. Rakower, and ultimately the jury ruled in favor of the defendants on plaintiff’s medical malpractice and lack of informed consent claims. Judgment was entered on June 1, 2016. The record reveals that a notice of appeal was filed on behalf of plaintiff; however, plaintiff never perfected her appeal, and according to defendants, the appeal was dismissed on defendants’ motion. In support of her motion, plaintiff argues that the judgment must be vacated because defense counsel engaged in fraudulent conduct at trial through “deceit and collusion” with the defendants, defense witnesses, and defense experts, resulting in a “fraudulent verdict.” In essence, plaintiff asserts, inter alia, that witnesses perjured themselves at the behest of defense counsel. Plaintiff also asserts that during the trial defense counsel used defamatory language when speaking about the plaintiff to the jury.”

“Here, the arguments presented by plaintiff demonstrate that she is seeking to relitigate the same claims raised at trial by her attorney, and that she simply disagrees with the jury’s verdict. Plaintiff has failed to submit a scintilla of evidence to support the speculative and specious claims of deceit and collusion and has “offered nothing more than broad, unsubstantiated allegations of fraud on the part of [the defendants]” (Aames Capital Corp. v Davidsohn, 24 AD3d 474, 475 [2d Dept 2005], quoting Miller v Lanzisera, 273 AD2d 866, 868 [4th Dept 2000]. As such, plaintiff’s argument must fail.”

“The Court further finds that plaintiff’s reliance on Judiciary Law § 487 is barred by collateral estoppel which gives conclusive effect to prior determinations when two conditions are met. There must be “an identity of issue which has necessarily been decided in the prior action and is decisive of the present action, and there must have been a full and fair opportunity to contest the decision now said to be controlling” (Lennon v 56th and Park (NY) Owner, LLC, 199AD3d 64, 69 [2d Dept 2021], quoting Buechel v Bain, 97 NY2d 295, 303-04 [2001] [internal quotation marks omitted]). Here, the issue as to whether defendants’ attorneys violated Judiciary Law § 487 prior to and during the trial of the instant medical malpractice action was determined in a plenary matter commenced by plaintiff. By Decision and Order dated May 30, 2023,bearing Index No. 151024/2022, the Court (J. Ramseur) denied plaintiff’s motion under Judiciary Law § 487. Thus, vacatur of the judgment and damages is barred by collateral estoppel.”

Brooklyn Tabernacle v Holland & Knight LLP 2024 NY Slip Op 31979(U) June 6, 2024 Supreme Court, Kings County Docket Number: Index No. 520533/2020 Judge: Leon Ruchelsman presents a fairly restricted view of the recurring question of what communications between Plaintiff and successor attorneys are discoverable in a legal malpractice claim against predecessor counsel.

“The plaintiff is a non-denominational Church located at 17 Smith Street in Kings County. According to the complaint this lawsuit asserts the defendant committed legal malpractice and breached its duty to the plaintiff regarding a series of real estate transactions. Specifically, the Church is the owner of a condominium unit located nearby at 180 Livingston Street in Kings County. The plaintiff -Sought to develop that property and on December 17, 2014 hired the defendant to provide legal services to help the plaintiff with “complex transaction” (see, Verified Complaint, ‘7 [NYSCEF Doc. No. 1]); The transaction consisted of a series of steps l whereby the plaintiff would transfer the unit to an entity called That 18.0 Livingston LLC, a subsidiary of Thor.”

“The defendant now seeks communications between the plaintiff and Starr. The defendant asserts they have the right to discover the communications between Starr and the plaintiff and whether such communications can minimize or . . completely eliminate any malpractice alleged against them. The plaintiff opposes: the motion arguing that any communications between Starr and the plaintiff are privileged and are protected by the attorney-client privilege.”

“The attorney-client privilege ”exists to ensure that one seeking legal advice will be able to confide fully and freely in his attorney, secure in the knowledge that his confidences will not later be exposed to public view to his embarrassment or legal detriment” (Matter of Priest v. Hennessy, 51 NY2d 62 431 NYS2d 511 [1980]). A waiver of the attorney-client privilege may be found when the client places the subject matter of any attorney client communications in issue ”or where invasion of the privilege is required to determine the validity of the client’s claim or defense and application of the privilege would-deprive the adversary of vital information” (see.,Kinqston Check Cashing Corp., v. Nussbaum Yates Berg Klein & Wolpow, LLP, 2.18 AD3d 760, 194. AD3d 495 (2d Dept., 2023J) . Thus, the attorney-client privilege is waived when a client asserts a malpractice claim against its former attorney (Buxton v. Ruden, 12 AD3d 47,5, 784 NYS2d 619 [2d Dept., 2004]). However, a defendant attorney may not obtain communications .from the plaintiff’s current counsel (see, Jakobleff v. Cerrato. Sweeney and Cohn, 97 AD3d 834, 468 NYS2d 895 [2d Dept., 1983]).”

“However, those cases have adopted a definition of the “at issue” waiver .doctrine that is ·far too broad,. According to those cases, any communication between counsel that is relevant is thereby waived; “But privileged information may be in some sense relevant ~n any lawsuit” (In re County of Erie, 54 F3d 222 [2d Cir. 2008]). Therefore, the privilege is only waived “where a party affirmatively places the subject matter of its own privileged communication at issue in the litigation, so that invasion of the privilege is required to determine the validity of a claim or defense o:E the party asserting the privilege, and application of the thereby waived; “But privileged information may be in some sense relevant in any lawsuit” (In re County of Erie, 54 F3d 222 [2d Cir. 2008]). Therefore, the privilege is only waived “where a party affirmatively places the subject matter of its own privileged communication at issue in litigation, so that invasion of the privilege is required to determine the validity of a claim or defense of the party asserting the privilege, arid application of the privilege would deprive the adversary of vital information” (see, Deutsche Bank Trust Company of Americas v. Tri-Links Investment Trust, 43 AD3d 56, 837 NYS2d 15 [1st Dept,, 2007]). “

Templeton v Roach 2024 NY Slip Op 03196 Decided on June 12, 2024 Appellate Division, Second Department does not explain the relationship between Plaintiff and J M & R Funding, LLC, but it definitely was not close enough for Plaintiff successfully to sue the attorneys.

“The defendant J M & R Funding, LLC (hereinafter J M & R Funding), originated a loan to nonparty Paulette Atkinson-Fuller, which was secured by a mortgage on certain real property located in Laurelton. The loan was funded by the plaintiff and serviced by J M & R Funding. After Atkinson-Fuller defaulted on the loan, J M & R Funding retained the defendant Law Offices of Matthew N.L. Roach, P.C. (hereinafter the Roach firm), to commence an action to foreclose the mortgage. J M & R Funding subsequently retained the defendant Steinvurzel & Levy Law Group (hereinafter the Steinvurzel firm) on an “of counsel” basis in the foreclosure action. In an order dated July 22, 2019, upon the failure of J M & R Funding’s counsel and process server to appear for a hearing to determine the validity of service of process, the Supreme Court determined that the foreclosure action must be dismissed for lack of personal jurisdiction.

The plaintiff subsequently commenced this action, inter alia, to recover damages for legal malpractice against the Roach firm and the defendant Matthew N.L. Roach (hereinafter together the Roach defendants), the Steinvurzel firm and the defendant Alexander M. Levy (hereinafter together the Steinvurzel defendants), and J M & R Funding. The plaintiff alleged, among other things, that the foreclosure action was dismissed as a result of the negligence of the Roach defendants and the Steinvurzel defendants. The Roach defendants and the Steinvurzel [*2]defendants separately moved pursuant to CPLR 3211(a) to dismiss the amended complaint insofar as asserted against each of them. The plaintiff cross-moved for leave to file a second amended complaint. In an order dated June 28, 2022, the Supreme Court granted the separate motions of the Roach defendants and the Steinvurzel defendants and denied the plaintiff’s cross-motion. The plaintiff appeals.

In considering a motion to dismiss for failure to state a cause of action pursuant to CPLR 3211(a)(7), the court must “‘accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory'” (Nonnon v City of New York, 9 NY3d 825, 827, quoting Leon v Martinez, 84 NY2d 83, 87-88).

In order to maintain a cause of action to recover damages for legal malpractice, the plaintiff must plead the existence of an attorney-client relationship (see Lombardi v Lombardi, 127 AD3d 1038, 1042). Although “an attorney-client relationship does not depend [upon] the existence of a formal retainer agreement” (Moran v Hurst, 32 AD3d 909, 911; see Ripa v Petrosyants, 203 AD3d 770, 772), the plaintiff must plead facts showing “either actual privity of contract between the parties or a relationship so close as to approach that of privity” (State of Cal. Pub. Employees’ Retirement Sys. v Shearman & Sterling, 95 NY2d 427, 434 [internal quotation marks omitted]; see Prudential Ins. Co. of Am. v Dewey Ballantine, Bushby, Palmer & Wood, 80 NY2d 377, 382). “‘Absent fraud, collusion, malicious acts, or other special circumstances, an attorney is not liable to third parties not in privity or near-privity for harm caused by professional negligence'” (Gorbatov v Tsirelman, 155 AD3d 836, 840, quoting Fredriksen v Fredriksen, 30 AD3d 370, 372).

Here, affording the amended complaint a liberal construction, accepting the facts alleged therein as true, and according the plaintiff the benefit of every possible favorable inference (see Leon v Martinez, 84 NY2d at 87-88), the amended complaint failed to plead specific facts from which it could be inferred that the plaintiff was in an attorney-client relationship, privity, or a relationship that otherwise closely resembles privity with the Roach defendants or the Steinvurzel defendants, who were retained to represent J M & R Funding in the foreclosure action (see DeMartino v Golden, 150 AD3d 1200, 1201; Fredriksen v Fredriksen, 30 AD3d at 371-372). Moreover, the amended complaint did not contain specific allegations that would place the plaintiff within an exception to the privity requirement (see Hinnant v Carrington Mtge. Servs., LLC, 172 AD3d 827, 829). Contrary to the plaintiff’s contention, the doctrine of “near privity” is limited to claims alleging negligent misrepresentation, and here, the plaintiff failed to allege that the Roach defendants or the Steinvurzel defendants made any misrepresentations upon which the plaintiff relied (see Century Prop. & Cas. Ins. Corp. v McManus & Richter, P.C., 226 AD3d 1, 6; Innovative Risk Mgt., Inc. v Morris Duffy Alonso & Faley, 204 AD3d 518, 518). Rather, the amended complaint set forth a legal malpractice cause of action based upon those defendants’ alleged breach of duty to J M & R Funding (see Federal Ins. Co. v North Am. Specialty Ins. Co., 47 AD3d 52, 62). Accordingly, the Supreme Court properly granted the separate motions of the Roach defendants and the Steinvurzel defendants pursuant to CPLR 3211(a) to dismiss the amended complaint insofar as asserted against each of them.”

Kugel v Reynolds 2024 NY Slip Op 03173 Decided on June 12, 2024 Appellate Division, Second Department is another example of how real estate transactions, especially in New York comprise a large part of the legal malpractice milieu.

“In 2012, the defendant Kenneth Reynolds entered into a contract to sell certain real property located in Brooklyn to the plaintiffs (hereinafter the plaintiffs’ contract of sale). Later that year, Reynolds entered into a separate contract to sell the property to the defendant Henry Ausch or an entity yet to be formed (hereinafter the Ausch contract of sale). Ultimately, Reynolds sold the property to the defendant Albany Marks, LLC, of which Henry Ausch was the sole member. The plaintiffs commenced this action against (1) Reynolds, (2) the defendant Sterling Palmer, (3) the defendants Arnold Treco, Jr., PLLC, and Arnold Treco, Jr. (hereinafter together the Treco defendants), and (4) Albany Marks, LLC, Henry Ausch, and the defendant Yaakov Ausch (hereinafter collectively the Ausch defendants). The plaintiffs asserted six causes of action: (1) for a judgment declaring that the plaintiffs’ contract of sale is in full force and effect, (2) for specific performance of the plaintiffs’ contract of sale, (3) alleging tortious interference with contract, (4) alleging fraud and negligent misrepresentation, (5) alleging unjust enrichment, and (6) to impose a constructive trust on the property.

Reynolds asserted cross-claims against the Treco defendants to recover damages for legal malpractice and against all other defendants for indemnification and contribution. The Treco defendants asserted cross-claims against Palmer and the Ausch defendants for indemnification and contribution. The Ausch defendants asserted cross-claims against all other defendants alleging fraud and negligence and for indemnification and contribution. Palmer filed two answers. In the first, he did not assert any cross-claims. In the second, he asserted cross-claims against all other defendants for indemnification and contribution.”

“However, upon reargument, the Supreme Court should have adhered to the prior determination granting that branch of the Treco defendants’ cross-motion which was for summary judgment dismissing the third cause of action insofar as asserted against them. “[I]nasmuch as the relationship created between an attorney and his [or her] client is that of principal and agent, an attorney is not liable for inducing his [or her] principal to breach a contract with a third person, at least where he [or she] is acting on behalf of his [or her] principal within the scope of his [or her] authority” (Asamblea De Iglesias Christianas, Inc. v DeVito, 210 AD3d 843, 844 [internal quotation marks omitted]). “Absent a showing of fraud or collusion, or of a malicious or tortious act, an attorney is not liable to third parties for purported injuries caused by services performed on behalf of a client or advice offered to that client” (id. at 845 [internal quotation marks omitted]). Here, the Treco defendants demonstrated, prima facie, that Treco was acting on Reynolds’s behalf and within the scope of Treco’s authority as Reynolds’s attorney (see id. at 844). In opposition, the plaintiffs failed to raise a triable issue of fact. The evidence cited by the plaintiffs did not support a finding that Treco’s acts in representing Reynolds were motivated by any self-interest or self-dealing or that the acts personally benefitted Treco (see id. at 845; Pancake v Franzoni, 149 AD2d 575, 575-576).

Upon reargument, the Supreme Court also should have adhered to the prior determination granting that branch of the Treco defendants’ cross-motion which was for summary judgment dismissing so much of the fourth cause of action as alleged negligent misrepresentation insofar as asserted against them. The Treco defendants submitted evidence that they did not have “a special or privity-like relationship” with the plaintiffs, who were represented by their own attorney in this “ordinary arm’s length business transaction” (Feldman v Byrne, 210 AD3d 646, 650). In opposition, the plaintiffs failed to raise a triable issue of fact. The plaintiffs’ new theory of liability with respect to this cause of action insofar as asserted against the Treco defendants is improperly raised for the first time on appeal, and therefore, we do not consider it (see TJG Realty of Rockland, LLC v Con Serv Constr., Inc., 218 AD3d 713).”

Payne v Rosenberg, Minc, Falkoff & Wolfe, LLP 2024 NY Slip Op 03341 Decided on June 18, 2024 Appellate Division, First Department demonstrates that in almost every setting where a client makes claims against an attorney the legal malpractice claim is primary, and potentially a breach of contract or a breach of fiduciary duty claim can stand, but consumer oriented misrepresentations rarely succeed.

“The legal malpractice claim should not have been dismissed insofar as it alleged malpractice based on defendant law firm’s failure to take steps to enforce and collect the judgment it had obtained on behalf of plaintiff in the underlying personal injury action. The terms of the contingency fee retainer agreement did not unambiguously provide that the representation in that action terminated upon entry of the judgment or otherwise make clear that the scope of the representation did not include enforcement and collection tasks (see e.g. TMB Communications v Preefer, 61 AD3d 450 [1st Dept 2009]).

The court correctly denied dismissal of the legal malpractice claim insofar as it alleged malpractice based on defendant law firm’s failure to name as a defendant in the underlying personal injury action a former deed owner who had an outstanding mortgage on the property which had not been satisfied. The elements of the malpractice claim were adequately pleaded at this stage of the proceedings (see Jarmuth v Wagner, 219 AD3d 1248 [1st Dept 2023]). The court declined to find that the claim was untimely asserted, correctly accepting as true the facts alleged by plaintiff concerning defendant’s continuous representation until such time as defendant advised her to retain collections counsel (see Encalada v McCarthy, Chachanover & Rosado, LLP, 160 AD3d 475, 475-476 [1st Dept 2018]).

Given that the retainer agreement did not unambiguously terminate the representation upon the entry of the underlying judgment, there is no basis at this juncture for dismissing any portion of the legal malpractice claim as time barred. The claim, including to the extent it is based on allegations that defendant acted in a dilatory manner in seeking a default in the underlying action, is otherwise well-pleaded. Thus, the malpractice claim, including those portions the court implicitly dismissed without explanation, should be reinstated in its entirety.

The court correctly dismissed the General Business Law § 349 claim. Plaintiff fails to show that defendant made statements on its website or in a standard form retainer agreement that promised the public that the scope of its representation in personal injury matters encompassed enforcement and collection proceedings[*2]. Defendant’s failure to provide language in such public-facing documents enumerating in detail the aspects of the scope of its representation and making clear that enforcement and collection tasks were not included does not rise to the level of a consumer-oriented misrepresentation or deceptive practice under General Business Law § 349 (see Kickertz v New York Univ., 110 AD3d 268, 273 [1st Dept 2013]; see also Loeb v Architecture Work, P.C., 154 AD3d 616, 616-617 [1st Dept 2017]; Plaza PH2001 LLC v Plaza Residential Owner LP, 98 AD3d 89, 104 [1st Dept 2012]).”

Bei Yang v Pagan Law Firm, P.C. 2024 NY Slip Op 03394 Decided on June 20, 2024 Appellate Division, First Department is a decision that is as short as possible. It comes in a case which seems to fit with those who would say that legal malpractice cases are all just “buyers’ remorse” or “dissatisfaction with the outcome” rather than demonstrations of departures by attorneys from good practice.

Here is the body of the decision: “Plaintiff cannot show that, but for defendants’ negligence, she would have obtained a verdict after trial that exceeded the $1.3 million settlement amount defendants negotiated (see Gallet, Dreyer & Berkey, LLP v Basile, 141 AD3d 405 [1st Dept 2016]; see also Schloss v Steinberg, 100 AD3d 476 [1st Dept 2012]).”

Getty v Schiavetta 2024 NY Slip Op 50697(U) Decided on May 18, 2024 Supreme Court, Westchester County Ondrovic, J. is a factually simple pro-se legal malpractice litigation with an interesting procedural twist. The legal malpractice claim comes after a mediated settlement. The issue is whether the attorney misled the client into thinking that the settlement provided a cash payment as well as promised repairs to a water-damaged apartment.

“In an action to recover damages for alleged legal malpractice, pro se plaintiff moves for an order granting default judgment against Russo & Gould LLP and Russo & Toner LLP (collectively, Russo defendants) (Motion Seq. 1), Russo defendants cross-move for an order extending their time to appear in the action (Motion Seq. 2), and Daniel M. Schiavetta, Jr and Murphy Higgins & Schiavetta, PLLC (collectively, Schiavetta defendants) cross-move to dismiss the complaint pursuant to CPLR 3211(a)(1) and (a)(7) (Motion Seq. 3).”

“By way of background, pro se plaintiff commenced this action by filing a summons and complaint on September 24, 2023, to recover damages for alleged legal malpractice. The complaint asserts claims for legal malpractice and violation of Judicial Law § 487. Plaintiff alleges that defendants committed legal malpractice in their representation of plaintiff in prior litigations for damages stemming from mold contamination in plaintiff’s cooperative unit located in Port Chester, New York.[FN1] The parties in the underlying litigations participated in private mediation and the litigations were settled by agreement in October 2020 (Settlement Agreement). Plaintiff alleges that he agreed to settlement terms on August 11, 2020, but defendants had “put plaintiff against a wall” and left “him with no choice but to agree to a different settlement” (i.e., the Settlement Agreement) (complaint at 4-5 [NYSCEF Doc. 1]).”

“Here, the complaint fails to allege facts establishing proximate cause, namely, that the defendants in the prior litigations would have executed an agreement requiring them to pay more than what was agreed to in the Settlement Agreement or to additionally repair plaintiff’s cooperative unit at their own expense. Moreover, the complaint fails to allege fraud with any particularity (see CPLR 3016[b]; see Browne v Lyft, Inc., 219 AD3d 445, 447 [2d Dept 2023]; Shah v Mitra, 171 ADed 971, 976 [2d Dept 2019]). These deficiencies warrant dismissal of the legal malpractice claim pursuant to CPLR 3211(a)(7), but the latter deficiency is also fatal to plaintiff’s opposition to relief pursuant to CPLR 3211(a)(1) premised on plaintiff’s execution of the Settlement Agreement.

The Settlement Agreement, signed by plaintiff, includes the following representation attributed to plaintiff as the releasor:

Releasor hereby declares that the terms of this Release have been completely read and are fully understood and voluntarily accepted for the purpose of making a full and final settlement of any and all claims (exhibit B to Oxenburg affirmation, Settlement Agreement at 3 [NYSCEF Doc. 49] [emphasis added]).

Given that the Settlement Agreement declares plaintiff “voluntarily accepted” the terms of the agreement, absent a sufficient pleading of fraud, coercion, or inducement, the Settlement Agreement utterly refutes plaintiff’s factual allegations (Miller v Brunner, 164 AD3d 1228, 1231 [2d Dept 2018] [“A signed release shifts the burden of going forward . . . to the plaintiff to show that there has been fraud, duress or some other fact which will be sufficient to void the release” [internal quotation marks, brackets, and citation omitted]).”

“Accordingly, Schiavetta defendants’ cross-motion for an order dismissing the complaint pursuant to CPLR 3211(a)(1) and (a)(7) is GRANTED, but as the dismissal is due to deficiencies in the pleading, the dismissal will be without prejudice (see Cadet-Duval v Gursim Holding, Inc., 147 AD3d 718, 720 [2d Dept 2017]).”