Contrary to the belief of almost all attorneys, legal malpractice cases are rarely brought on a whim.  They are rarely brought on a reflex.  For the most part, everyone in the case, including the non-lawyer plaintiffs can identify a problem in the representation.  The actual, and often decisive battle is at the “but for” level.  The question to be answered there is whether there would have been a better economic outcome “but for” the mistake of the attorneys, or was it due to some other cause?

Rothman v McLaughlin & Stern, LLP  2015 NY Slip Op 03393  Decided on April 23, 2015 Appellate Division, First Department is a good example of how this question is resolved.  Was the money lost because the attorney did not perform due diligence or was the money lost because the attorney was told not to perform due diligence.  If it were the latter, then it cannot be said that there would have been a better outcome except for the attorney’s negligence.

“Defendants established their entitlement to judgment as a matter of law by submitting proof that plaintiff, an experienced investor, understood that the retainer agreement excluded due diligence from the scope of representation. Namely, the evidence demonstrates that plaintiff declined his accountant’s advice to conduct due diligence and that he advised defendants that none was needed because he trusted the companies’ owner and had engaged in numerous business transactions with her. Plaintiff’s statements that he did not want any due diligence conducted, set forth in affidavits by defendant Friedman and plaintiff’s accountant, are admissible as party admissions (see e.g. Delgado v Martinez Family Auto, 113 AD3d 426 [1st Dept 2014]).

Furthermore, plaintiff’s damages are not attributable to defendants. To the extent plaintiff sustained any non-speculative losses, the motion court correctly concluded that those losses were caused by the fraud committed by the owner of the companies and plaintiff’s own misjudgment of the business risks, not by defendants’ alleged conduct (see Garten v Shearman & Sterling LLP, 102 AD3d 436, 436-37 [1st Dept 2013], lv denied 21 NY3d 851 [2013]).”