As a reminder of the many and varied paths of law and law practice, here is a quote from today’s NYLJ Outside Counsel Column, written by T. James Bryan, of Herrick Feinstein. He discusses an arcane area of tax law coupled with condo sales.

The bottom line? Legal malpractice.

“You are asked to represent a purchaser of a condominium unit in a building that was recently converted into a condominium. The building was a commercial building before the sponsor purchased it for the purpose of converting it into residential use.

The building, a ministorage facility, was purchased by the sponsor on or about June 10, 1998. The sponsor rehabilitated the building for residential use and filed an offering plan with the attorney general to sell condominium units in the building. This offering plan was accepted for filing by the attorney general on Jan. 31, 2000. The closings for sales of the units did not start until sometime after May 11, 2001. Your client closed on the purchase of her unit in August 2001.

So far, nothing unusual. You agree to a standard fee of between $1,500 and $2,000 for your services. As part of your due diligence, you read the offering plan that was approved by the attorney general a year before, and a title report that you carefully scrutinized.

Everything appears in order and your client closes on the purchase of her unit. One year after the August 2001 closing, your client calls you and, in a distressed (perhaps hostile) tone, tells you that she has just been received a tax bill from the city of New York (the July 1, 2002 tax bill for 2002-’03) for her share of $338,339 in “deferred taxes.” The title report made no mention of “deferred taxes.” Nothing in the offering plan indicated or even hinted at such a potential liability.

‘7 Vestry LLC v. N.Y.C. Dept. of Finance’

According to a recent decision of the Appellate Division, First Department, you did not do your job. 7 Vestry LLC v. New York City Dept. of Finance, 22 AD3d 174, 800 N.Y.S.2d 398 (1st Dept. 2005), appeal denied, 2006 N.Y.App. LEXIS 596 (lst Dept. Jan. 19, 2006).

You should have examined the July 1, 2000 bill rendered to sponsor, and have seen a notation on that bill indicating that $6,046 of that bill was noted as being for “ICIP DEFERRED.” From this, you should have realized that your client would be liable for paying taxes that otherwise would have been paid by an owner of the building that was sold to the sponsor and converted from commercial to residential use. The court said that:

The individual unit owners had constructive notice [of their future tax liability] because a prudent purchaser would have scrutinized the tax bills for the current year and years prior to the purchase date and would have seen the ICIP deferral notation in 2000 and investigated further. Each purchaser who purchased his/her unit after the July 1, 2000 tax bill took title subject to the tax lien created by the ICIP tax deferral repayment requirement, which lien is enforceable against that purchaser. Id. at 184.

You never thought, as part of your due diligence, to ask for the July 1, 2000 tax bill since the offering plan contained the total taxes for 1999-’00 and 2000-’01, and made no mention that a portion of the 2000-’01 bill was for “deferred ICIP taxes.”

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Andrew Lavoott Bluestone

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened…

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened his private law office and took his first legal malpractice case.

Since 1989, Bluestone has become a leader in the New York Plaintiff’s Legal Malpractice bar, handling a wide array of plaintiff’s legal malpractice cases arising from catastrophic personal injury, contracts, patents, commercial litigation, securities, matrimonial and custody issues, medical malpractice, insurance, product liability, real estate, landlord-tenant, foreclosures and has defended attorneys in a limited number of legal malpractice cases.

Bluestone also took an academic role in field, publishing the New York Attorney Malpractice Report from 2002-2004.  He started the “New York Attorney Malpractice Blog” in 2004, where he has published more than 4500 entries.

Mr. Bluestone has written 38 scholarly peer-reviewed articles concerning legal malpractice, many in the Outside Counsel column of the New York Law Journal. He has appeared as an Expert witness in multiple legal malpractice litigations.

Mr. Bluestone is an adjunct professor of law at St. John’s University College of Law, teaching Legal Malpractice.  Mr. Bluestone has argued legal malpractice cases in the Second Circuit, in the New York State Court of Appeals, each of the four New York Appellate Divisions, in all four of  the U.S. District Courts of New York and in Supreme Courts all over the state.  He has also been admitted pro haec vice in the states of Connecticut, New Jersey and Florida and was formally admitted to the US District Court of Connecticut and to its Bankruptcy Court all for legal malpractice matters. He has been retained by U.S. Trustees in legal malpractice cases from Bankruptcy Courts, and has represented municipalities, insurance companies, hedge funds, communications companies and international manufacturing firms. Mr. Bluestone regularly lectures in CLEs on legal malpractice.

Based upon his professional experience Bluestone was named a Diplomate and was Board Certified by the American Board of Professional Liability Attorneys in 2008 in Legal Malpractice. He remains Board Certified.  He was admitted to The Best Lawyers in America from 2012-2019.  He has been featured in Who’s Who in Law since 1993.

In the last years, Mr. Bluestone has been featured for two particularly noteworthy legal malpractice cases.  The first was a settlement of an $11.9 million dollar default legal malpractice case of Yeo v. Kasowitz, Benson, Torres & Friedman which was reported in the NYLJ on August 15, 2016. Most recently, Mr. Bluestone obtained a rare plaintiff’s verdict in a legal malpractice case on behalf of the City of White Plains v. Joseph Maria, reported in the NYLJ on February 14, 2017. It was the sole legal malpractice jury verdict in the State of New York for 2017.

Bluestone has been at the forefront of the development of legal malpractice principles and has contributed case law decisions, writing and lecturing which have been recognized by his peers.  He is regularly mentioned in academic writing, and his past cases are often cited in current legal malpractice decisions. He is recognized for his ample writings on Judiciary Law § 487, a 850 year old statute deriving from England which relates to attorney deceit.