Unincorporated LLCs and privity in Legal Malpractice.  Its an arcane area of law.  Here is an interesting analysis of a new case.

"New York Suit By LLC Minority Members Against Attorneys Representing Majority Members
Under New York law, a plaintiff may not allege attorney malpractice absent a showing of actual or near privity between the plaintiff and the attorney, with the exception that no showing of privity is required in claims for fraud, collusion, malicious acts, or other special circumstances. In Aranki v. Goldman & Assocs., LLP, 825 N.Y.S.2d 97, 98-99 (N.Y.A.D. 2 Dept. 2006), the minority members of an LLC sued a law firm for legal malpractice, breach of fiduciary duty, fraud, and breach of contract, contending that the law firm knowingly induced or assisted the LLC members who combined held a majority membership interest to breach their fiduciary duties to plaintiffs. A trial court dismissed plaintiffs’ claims for breach of fiduciary and legal malpractice.

On appeal, a New York appellate court reversed the dismissal, finding that, with respect to the legal malpractice claim, although the complaint did not plead specific facts indicating “the existence of an attorney-client relationship, privity, or a relationship that otherwise closely resembles privity” between the plaintiffs-minority members of the LLC and the defendant law firm, the complaint sufficiently alleged facts that, if proven, “would show that the defendants colluded with the majority members of [the LLC], inter alia, to freeze the plaintiffs out of [the LLC’s] management and profit sharing and force them to surrender, at a reduced price, their minority membership interest in [the LLC].” The court further found that although the complaint did not plead facts sufficient to show that defendants breached any fiduciary duty owed to plaintiffs, it did sufficiently allege that the law firm defendants aided and abetted a breach of fiduciary duty by the LLC’s majority members.

Email this postTweet this postLike this postShare this post on LinkedIn
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.