Goldin v Tag Virgin Is. Inc. 2014 NY Slip Op 31308(U) May 20, 2014 Supreme Court, New York County
Docket Number: 651021/2013 Judge: Eileen Bransten is an example of overreaching. The law of legal malpractice in New York cleaves to a policy of strict privity. If you did not hire the attorney, and the attorney did not work for you, then your opportunities are strictly limited. The exception of malice, collusion, fraud or other “acts” is very hard to take advantage of.
“This action stems from investments made in brokerage accounts, managed by Defendant TAG, for which Plaintiffs are the beneficiaries or the co-trustees. Defendant TAG, formerly known as Taurus Advisory Group, is a Connecticut corporation owned by Defendants Tagliaferri and Cornell. (Compl. if 17) Collectively, the Complaint refers to Defendants TAG, Tagliaferri and Cornell as the “TAG Defendants.”
Plaintiffs now contend that the ‘TAG Defendants” began “scamming” Plaintiffs in mid-2007 by liquidating their more conservative investments and transferring Plaintiffs’ funds to TAG-affiliated companies through convertible note instruments. See Compl. ii 61. The notes were “mostly drafted” by Defendant Feiner. Id. According to Plaintiffs, these notes, while appearing legitimate, were 11 a fiction designed by the TAG Defendants and Feiner to defraud the Plaintiffs. 11 Id. Plaintiffs contend that pursuant to the terms of the notes, TAG was the payee and TAG-affiliated companies were the makers, purportedly responsible for repaying TAG the principal due plus interest on the maturity date. However, the Complaint alleges that the notes were drafted so that Plaintiffs were not the payees, limiting their ability to recover against the makers. Id.
Defendant Feiner was TAG’s legal counsel, and according to Plaintiffs, “mostly drafted” certain of the convertible note instruments through which Plaintiffs’ funds were transferred to TAG-related companies. In addition, Plaintiffs contend that Feiner was responsible for wiring Plaintiffs’ funds to the TAG-affiliated ~ompanies, including the IEAH Defendants. These allegations are all pleaded “on information and belief.” See Compl. if 81. Based on these allegations, Plaintiffs assert four claims against Feiner – legal malpractice, aiding and abetting breach of fiduciary duty, unjust enrichment, and fraud. Feiner now seeks dismissal of each of these claims pursuant to CPLR 321 l(a)(S) and (a)(7). In addition, Feiner contends that Plaintiffs’ aiding and abetting and fraud claims are not pleaded with the requisite specificity under CPLR 3016(b). Each of Finer’s arguments will be examined in turn below
Even if timely brought, Plaintiffs legal malpractice claim nonetheless would be dismissed for failure to state a cause of action. “A cse for legal malpractice cannot be stated in the absence of an attorney-client relationship.” Waggoner, 68 A.D.3d at 5. However, Plaintiffs here fail to plead that they had such a relationship with Defendant Feiner. As discussed above, Plaintiffs’ legal malpractice claim stems from Feiner’s representation of TAG in drafting the convertible notes. Since Feiner did not represent Plaintiffs and was performing services only on behalf of TAG, no attorney-client relationship has been stated. See Federal Ins. Co. v. North American Specialty Ins. Co., 47 A.D.3d 52, 59 (1st Dep’t 2007) (“New York courts impose a strict privity requirement to claims of legal malpractice; an attorney is not liable to a third party for negligence in performing services on behalf of his client. 11 )”