In an ironic situation, two highly placed legal malpractice defense firms accuse each-other’s clients of legal malpractice, and seek to apportion blame between their clients in a case where it is clear that one or both of the clients committed legal malpractice.  It’s abundantly clear that service of a notice to individual shareholders did not take place.  The next question is which law firm is to blame.  In Rehberger v Garguilo & Orzechowski, LLP  2014 NY Slip Op 04182Decided on June 11, 2014 the Appellate Division, Second Department holds:

"The plaintiff commenced this action to recover damages arising from legal malpractice allegedly committed by Garguilo & Orzechowski, LLP, and Jerry Garguilo (hereinafter together the Garguilo defendants), while representing him in a declaratory judgment action to enforce the buy-out provision of a stock agreement. The plaintiff alleged, inter alia, that the Garguilo defendants failed to serve a notice required by the stock agreement upon the individual shareholders, which resulted in a judgment dismissing them from the action. The Supreme Court, among other things, denied Jerry Garguilo’s motion for summary judgment dismissing the complaint insofar as asserted against him, and denied that branch of the separate motion of Garguilo & Orzechowski, LLP, which was for summary judgment dismissing the complaint insofar as asserted against it."

"Here, the Garguilo defendants each failed to establish their prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted against each of them. The stock redemption agreement in the underlying action required that notice of redemption be mailed to each of the individual shareholders at the address listed in the agreement. As a result of the Garguilo defendants’ failure to send this notice to the individual shareholders, the individual shareholder defendants were dismissed from the underlying action. The Garguilo defendants’ submissions in support of their respective motions did not establish, prima facie, that the plaintiff will be unable to prove at least one element of his legal malpractice claim and, thus, they failed to demonstrate their entitlement to judgment as a matter of law (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438; Barnave v Davis, 108 AD3d at 583; Affordable Community, Inc. v Simon, 95 AD3d at 1048; cf. Bd. of Mgrs. of Bay Club v Borah, Goldstein, Schwartz, Altschuler & Nahins, P.C., 97 AD3d 612, 613-614; Frederick v Meighan, 75 AD3d at 531-532; Leach v Bailly, 57 AD3d 1286, 1289). Moreover, contrary to the Garguilo defendants’ contention, they failed to demonstrate, prima facie, that the plaintiff’s subsequent counsel, Dollinger, Gonski & Grossman, Esqs., and Matthew Dollinger (hereinafter together the Dollinger third-party defendants), had a sufficient opportunity to fully protect the plaintiff’s rights when it took over the case, as to establish that any alleged negligence on the part of the Garguilo defendants was not a proximate cause of the plaintiff’s damages (cf. Perks v Lauto & Garabedian, 306 AD2d 261; Albin v Pearson, 289 AD2d 272)."

"Furthermore, the Supreme Court properly denied that branch of the motion of Garguilo & Orzechowski, LLP, which was for summary judgment on the third third-party complaint, which alleged causes of action against the Dollinger third-party defendants for contribution and [*3]common-law indemnification. In the third third-party complaint, Garguilo & Orzechowski, LLP, alleged, inter alia, that if the plaintiff is able to establish that Garguilo & Orzechowski, LLP, committed malpractice, then the Dollinger third-party defendants are culpable for essentially the same conduct because they too failed to serve notice on the individual shareholders and to take action against those shareholders to enforce the buy-out provision of the stock agreement. Contrary to the contentions of Garguilo & Orzechowski, LLP, the Supreme Court properly denied that branch of its motion which was for summary judgment on the cause of action for common-law indemnification. Garguilo & Orzechowski, LLP, failed to establish, prima facie, that it was free from negligence or that its negligence was not a proximate cause of the plaintiff’s alleged damages (see Waggoner v Caruso, 14 NY3d 874; Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442; Raquet v Braun, 90 NY2d 177, 183; Barnave v Davis, 108 AD3d 582). "Since the predicate of common-law indemnity is vicarious liability without actual fault on the part of the proposed indemnitee" (Konsky v Escada Hair Salon, Inc., 113 AD3d 656, 658), Garguilo & Orzechowski, LLP, failed to establish its prima facie entitlement to indemnification from the Dollinger third-party defendants. The Supreme Court also properly denied that branch of the motion of Garguilo & Orzechawski, LLP, which was for summary judgment on the cause of the action for contribution, as Garguilo & Orzechawski, LLP, failed to eliminate triable issues of fact as to the relative culpability, if any, of the Dollinger third-party defendants (see Markey v C.F.M.M. Owners Corp., 51 AD3d 734, 738). Accordingly, the Supreme Court properly denied that branch of the motion of Garguilo & Orzechowski, LLP, which was for summary judgment on the third third-party complaint, regardless of the sufficiency of the Dollinger third-party defendants’ opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d at 853)."