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.