Clients depend on attorneys to advise them on the law. Quick, what do you know about usury? Do you know enough competently to advise a client, or just enough to get yourself into trouble? Here is a legal malpractice story about the later.Theresa Striano Revocable Trust v Blancato 
71 AD3d 1122 ; Appellate Division, Second Department
 

Attorney is retained to perform two mortgage transactions, and notes that the interest rate is 17%. Usury, he wonders? He asks the borrower’s attorney, who tells him not to worry, its a commercial transaction. Naturally, it all falls apart soon enough.

"Before the closing documents were finalized, the defendant Richard T. Blancato, who was the plaintiffs’ attorney, observed that the 17% annual interest rate on the loans might be usurious under General Obligations Law § 5-501 and Banking Law § 14-a, which generally fix the maximum annual interest rate which may be charged for these types of transactions at 16%. He shared his concern with the borrower’s counsel, who assured him that the rate was not usurious because the loans were commercial in nature. Based on this explanation, the defendant was persuaded that no usury issue existed, and never notified Striano about the potential problem.
 

Here, the defendant’s reliance upon the advice of the borrower’s attorney reflects a failure to exercise ordinary reasonable skill (see Shopsin v Siben & Siben, 268 AD2d 578; McCoy v Tepper, 261 AD2d 592, 593; Logalbo v Plishkin, Rubano & Baum, 163 AD2d 511, 514). As the plaintiffs’ current counsel correctly notes, even a cursory review of the relevant statutes would have revealed that the proposed loans did not fall under any usury exceptions. Additionally, the defendant’s efforts to paint his actions in a favorable light are unavailing, as his recent averments directly contradict both his 2008 affirmation and the averments of Thomas Fatato, Striano’s brother, who submitted an affidavit on the defendant’s behalf (see Denicola v Costello, 44 AD3d 990; Telfeyan v City of New York, 40 AD3d 372, 373).

The defendant contends that Fatato ultimately was responsible for the decision to provide the loans despite the potential usury problem. Assuming, however, that Fatato acted as Striano’s agent and was aware of the borrower’s counsel’s advice (such that Fatato’s knowledge can be imputed to Striano), the defendant "may not shift to the client the legal responsibility [he] was specifically hired to undertake because of [his] superior knowledge" (Hart v Carro, Spanbock, Kaster & Cuiffo, 211 AD2d 617, 619).

Accordingly, the plaintiffs established, prima facie, that the defendant acted negligently with respect to the usury issue. Issues of fact exist, however, as to whether Striano was involved in certain decisions regarding the handling of the mortgage foreclosure actions filed against the borrower and, if so, whether those decisions constituted an intervening cause of the plaintiffs’ injuries (see Eisenberger v Septimus, 44 AD3d 994, 995; Brooks v Lewin, 21 AD3d 731, 734; Selletti v Liotti, 22 AD3d 739, 740; Blank v Harry Katz, P.C., 3 AD3d 512, 513). The Supreme Court’s denial of the plaintiffs’ motion was, therefore, proper. "