This case, reported today is a dismissal of legal malpractice because the attorneys represented the company, and not the individual plaintiff shareholders.
"As a threshold matter, in order to establish a cause of action for legal malpractice, the plaintiff must demonstrate the existence of an attorney-client relationship (AG Capital Funding Partners, L.P. v. State Street Bank & Trust Co., 5 NY3d 582, 595 [2005]). A relationship of actual privity or one that closely resembles privity, is required (id.; Linden v. Moskowitz, 294 AD2d 114, 115 [1st Dept 2002], lv denied 99 NY2d 505 [2003]). The execution of a formal retainer agreement or the payment of a fee is not dispositive (Jane Street Co. v. Rosenberg & Estis, P.C., 192 AD2d 451, 451 [1st Dept], lv denied 82 NY2d 654 [1993]). Rather, courts typically consider the words and actions of the parties to ascertain the existence of such a relationship, and whether there was an explicit undertaking by the attorney to perform a specific task (Wei Cheng Chang v. Pi, 288 AD2d 378, 380 [2d Dept 2001], lv denied 99 NY2d 501 [2002]). Additionally, the plaintiff must allege that the attorney was aware that its services were being used for a specific purpose, that the plaintiff relied upon those services, and that the attorney engaged in some conduct evincing an understanding of the plaintiff’s reliance (Allianz Underwriters Ins. Co., 13 AD3d at 175). A plaintiff’s subjective belief alone as to the existence of such a relationship is not sufficient (Weadick v. Herlihy, 16 AD3d 223, 224 [1st Dept], lv denied 5 NY3d 707 [2005]).
The complaint fails to plead Facts establishing that an attorney-client relationship existed between Topor, individually, and the Counsel Defendants. In the complaint, Topor repeatedly alleges that the Counsel Defendants represented Flatiron and the single-purpose entities that Flatiron created, including 119th Street LLC, in order to acquire properties (see e.g. Complaint at ¶36). Otherwise, Topor does not allege any Facts, either in the form of words or actions, taken by Topor and the Counsel Defendants establishing that there was an explicit undertaking to perform a specific legal task on behalf of Topor personally (Wei Cheng Chang, 288 AD2d at 380), or that the Counsel Defendants knew that Topor was personally relying on their services (Allianz Underwriters Ins. Co., 13 AD3d at 175). "
"As a threshold matter, in order to establish a cause of action for legal malpractice, the plaintiff must demonstrate the existence of an attorney-client relationship (AG Capital Funding Partners, L.P. v. State Street Bank & Trust Co., 5 NY3d 582, 595 [2005]). A relationship of actual privity or one that closely resembles privity, is required (id.; Linden v. Moskowitz, 294 AD2d 114, 115 [1st Dept 2002], lv denied 99 NY2d 505 [2003]). The execution of a formal retainer agreement or the payment of a fee is not dispositive (Jane Street Co. v. Rosenberg & Estis, P.C., 192 AD2d 451, 451 [1st Dept], lv denied 82 NY2d 654 [1993]). Rather, courts typically consider the words and actions of the parties to ascertain the existence of such a relationship, and whether there was an explicit undertaking by the attorney to perform a specific task (Wei Cheng Chang v. Pi, 288 AD2d 378, 380 [2d Dept 2001], lv denied 99 NY2d 501 [2002]). Additionally, the plaintiff must allege that the attorney was aware that its services were being used for a specific purpose, that the plaintiff relied upon those services, and that the attorney engaged in some conduct evincing an understanding of the plaintiff’s reliance (Allianz Underwriters Ins. Co., 13 AD3d at 175). A plaintiff’s subjective belief alone as to the existence of such a relationship is not sufficient (Weadick v. Herlihy, 16 AD3d 223, 224 [1st Dept], lv denied 5 NY3d 707 [2005]).
The complaint fails to plead Facts establishing that an attorney-client relationship existed between Topor, individually, and the Counsel Defendants. In the complaint, Topor repeatedly alleges that the Counsel Defendants represented Flatiron and the single-purpose entities that Flatiron created, including 119th Street LLC, in order to acquire properties (see e.g. Complaint at ¶36). Otherwise, Topor does not allege any Facts, either in the form of words or actions, taken by Topor and the Counsel Defendants establishing that there was an explicit undertaking to perform a specific legal task on behalf of Topor personally (Wei Cheng Chang, 288 AD2d at 380), or that the Counsel Defendants knew that Topor was personally relying on their services (Allianz Underwriters Ins. Co., 13 AD3d at 175). "