The difference between legal malpractice and Breach of Fiduciary Duty can be important. In Ferrara v Amritt-Hall  2015 NY Slip Op 31228(U)  July 13, 2015  Supreme Court, Queens County  Docket Number: 22203/11  Judge: Allan B. Weiss the difference is whether an attorney’s conduct is subject to a 3 or a 6-year statute of limitations.

The case revolves around a practice of salesmen going door-to-door and selling home renovation.  They promise a low cost loan, with a cash-out feature.  Plaintiff thought that she was replacing her old mortgage with a lower interest mortgage, getting her bathroom renovated and getting $ 7,000 cash out.  Sadly it did not work out.  When an attorney called her and suggested that he represent her at the closing, sadly it did not work out for him either.

“To state a cause of action for a breach of fiduciary duty, a plaintiff must allege (1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the defendant’s misconduct (see Baumann v Hanover Community Bank, 100 AD3d 814 [2012]; Rut v Young Adult Inst., Inc., 74 AD3d 776 [2010]). Here, Amritt-Hall alleges that Horn was acting in his capacity as her attorney in the refinancing transaction, and that such fiduciary relationship continued beyond the subject closing due to his representations that he would obtain a traditional refinanced loan on her behalf at a more favorable rate and with a more favorable term. She further alleges that she was injured because Horn intentionally and willfully solicited her with false information, failed to represent her interests at closing, failed to ensure that she had the information necessary for making informed decisions, and misled her into believing that she would obtain a more favorable loan after the subject closing. In moving to dismiss, Horn argues that Amritt-Hall has mislabeled what is essentially a legal malpractice claim instead as a breach of fiduciary duty claim involving fraud (with a six-year statute of limitations) in order to avoid the three-year statute of limitations for malpractice claims (CPLR 213, 214), which he avers has expired. In determining whether the claim sounds in malpractice or arises from a fiduciary relationship, the court looks to the essence of the claim rather than the form in which it is pleaded (see State v Cortelle Corp., 38 NY2d 83, 86 [1975]). A fiduciary relationship is defined as one “founded upon trust or confidence reposed by one person in the integrity and fidelity of another” (see Penato v George, 52 AD2d 939, 942 [1976]), the hallmark of which is an imbalance of power between the parties (see Langford v Roman Catholic Diocese of Brooklyn, 271 AD2d 494, 504 [2000]). Although the allegations herein are similar, this cause of action is sufficiently based on a violation of the trust AmrittHall placed in Horn to represent her in the loan transaction and secure refinancing thereafter, rather than some lack of skill or negligence in performing his duties (see generally Malmsteen v Berdon, LLP, 477 F Supp 2d 655, 661-662 [SDNY 2007]; cf. Matter of R.M. Kliment & Frances Halsband, Architects [McKinsey & Co., Inc.], 3 NY3d 538, 542 [2004]). Moreover, the third-party action was timely commenced before the six-year statute of limitations for a breach of fiduciary duty claim based on fraud had expired (CPLR 213). The court further notes that the breach of fiduciary duty claim is not duplicative of the fraud claim asserted against him (see KS v ES, 39 Misc 3d 1219[A], 2013 NY Slip Op 50664[U], *8 [2013]; cf. Stein v McDowell, 74 AD3d 1323, 1326 [2010]). Rather, the alleged fraud Horn perpetrated against his client was one way in which he violated the trust placed in him by virtue of the fiduciary nature of their relationship. As Amritt-Hall correctly notes, Horn’s reliance on Mecca v Shang (258 AD2d 569 [1999]) is misplaced, as it merely stands for the proposition that a separate claim for fraud does not exist when it is duplicative of a legal malpractice claim because it is based on concealment or intentional failure to disclose the attorney’s own lack of competence or legal expertise (see id., citing White of Lake George v Bell, 251 AD2d 777 [1998]), which is not alleged here.”