Plaintiff was a well-0ff husband facing an upcoming divorce.  He retained attorneys well in advance of the proceedings and was girded for war.  Then, things fell apart.  How did this happen, and are the attorneys to blame?

Sitomer v Goldweber Epstein, LLP  2015 NY Slip Op 31541(U)  August 14, 2015  Supreme Court, New York County  Docket Number: 158325/13
Judge: Barbara Jaffe tells us certain things.  One, if the retainer agreement says that the law firm is not required to perfect an appeal, then it will not likely be successfully sued for not taking an appeal.  The second is that if a lawfirm has evidence of diminution of value, it had better use the evidence in favor of its client.  The third is that strategic use/non-use of a witness may be subject to dismissal if the attorney can state any reason at all.

“By letter dated May l, 2002, plaintiff, then married, signed a shareholder agreement whereby he transferred to several institutional investors 2,500 or his 5,000 shares in his holding company, International Star Investments Limited (ISI Ltd.) in exchange for capital contributions. (NYSCEF 44). On April 1, 2005, plaintiff hired defendants to represent him in connection with an anticipated divorce action to be commenced against him. In signing the retainer agreement, plaintiff agreed, as pertinent here, that defendants would provide services in connection with proceedings at the trial court level only. (NYSCEF 9). On April 11, 2005, plaintiffs ex-wife commenced the divorce action in New York County. (NYSCEF 10). At that time, in addition to his interest in ISI Ltd., plaintiff had an ownership interest in Blue Star Jets, LLC. (NYSCEF 8, 37). Although plaintiff waived his answer and did not object to the grounds for divorce, he contested, inter alia, the distribution of marital assets. On August 15, 2005, the justice presiding in the matrimonial action so ordered the appointment of Klein Liebman & Gresen, LLC, a neutral valuation expert recommended by plaintiff and agreed to by his wife to appraise Blue Star. (NYSCEF 11). On July 16, 2007, Klein Liebman submitted its report, concluding that plaintiff owned a 45 percent interest in Blue Star valued at $4,829,000. (NYSCEF 15). Dissatisfied with the Klein Liebman report, defendants retained Robert Vigna, another valuation expert, to review it. By email dated September 24, 2007, Vigna sent defendants a list of “critical deficiencies” in the report, claiming that Klein Liebman wrongly relied on projected gross revenue figures instead of the lower actual figures, and that it applied “subjective and speculative” discounts to adjust for the disparity. (NYSCEF 16). On September 25, 2007, the divorce trial commenced. (NYSCEF 37). By email dated October 11, 2007, defendants approached Gordon Wilde, a director of ISI Ltd., to testify “about the dilution of [plaintiffs] stock interest in [ISI Ltd.] from 100% to 50% and the call for infusion of capital into the [real estate development] project in the amount of $675,000 for [plaintiffs] share[s].” (NYSCEF 57). Defendants followed up by email on November 2 in order to meet with Wilde and prepare him for his testimony; Wilde responded shortly thereafter and directed defendants to review his fee and expenses. (NYSCEF 58).”

Not calling a witness

” By letter dated November 20, 2007, defendants sent Wilde a $3,000 check covering his fee to testify. On a copy of the letter is a handwritten undated annotation: “Returned check to R Sitomer as Wilde not to be called at trial.” (NYSCEF 59). The trial concluded on December 7, 2007. Defendants did not call Vigna as a witness (NYSCEF 8, 37), nor did they offer in evidence the 2002 shareholder agreement or 2007 letter. ”

“Absent a basis for refuting Klein Liebman’s valuation method, and given the court’s questioning and findings and the concern that calling Vigna would undermine plaintiffs credibility, defendants have demonstrated that their decision not to call Vigna as a witness constituted a matter of strategy that, as a matter of law, forms no basis for a finding of legal malpractice. (See O’Callaghan v Brunelle, 84 AD3d 581, 581-582 [l5t Dept 2011], Iv denied 18 NY3d 804 [2012] [prior NYSE and SEC decisions revealed that uncalled witness could not help plaintiff and thus plaintiff could not establish causation]; L.l C. Commercial Corp. v Rosenthal, 202 AD2d 644, 644-645 [2d Dept 1994], Iv dismissed 84 NY2d 841 [decision not to call witness strategic as potential testimony confusing and unfavorable to plaintiff]; see also A.H Harris & Sons v Burke, Cavalier, Lindy & Engel P.C., 202 AD2d 929, 930 [3d Dept 1994] [failure to call witness appropriate course of action absent allegation of how failure fell below attorney standard of care]). Morever, as matters concerning the date of valuation of marital assets and whether to consider projected or past income figures are committed to the court’s discretion (see generally 11 [* 11] McSparron v McSparron, 87 NY2d 275, 287 [1995]), a determination that the attorney’s negligence resulted in a less favorable result is too speculative to provide a legal or factual basis for a finding of malpractice (see Grant v LaTrace, 119 AD3d 646, 647 [2d Dept 2014] [defendants’ alleged failure to remedy defects in service turned on court’s discretion in granting extension and thus required speculation as to whether different result would obtain absent attorney’s failure]; Bua v Purcell & Jngrao, P.C., 99 AD3d 843, 848 [2d Dept 2012], Iv denied 20 NY3d 857 [2013] [whether attorney’s failure to properly effect termination of contract for sale resulted in buyer later bringing action in specific performance was too speculative “inasmuch as it (was) premised on decision that were within the sole discretion of the buyer”]; see also Sierra Holdings, LLC v Phillips, Weiner, Quinn, Artura & Cox, 112 AD3d 909, 910 [2d Dept 2013] [whether attorney’s failure to notify clients of upcoming foreclosure sale resulted in their inability to recoup losses was too speculative to support claim for legal malpractice]). “