Kagan Lubic Lepper Findelstein & Gold LLP v 325  Fifth Ave. Condominium  2015 NY Slip Op 31470(U)  August 6, 2015  Supreme Court, New York County  Docket Number: 151878/15
Judge: Cynthia S. Kern is a goldmine of interesting writing on legal malpractice.  One question that frequently comes up is what to do when the statute of limitations is approaching yet the underlying case is still going on?

“The relevant facts according to the complaint are as follows. On or about February 25, 2015, Kagan Lubic filed its complaint against defendants seeking recovery of the attorney’s fees and expenses it allegedly incurred in its representation of defendants. Thereafter, defendants filed an answer to the complaint asserting various affirmative defenses and three counterclaims for legal malpractice, violation of Judiciary Law § 487 and a declaratory judgment that plaintiff committed legal malpractice and that plaintiff is not entitled to any legal fees for its representation of defendants.

Specifically, defendants’ answer alleges as follows. Defendants hired Kagan Lubic in October 2012 to represent them as general counsel and in an action against the sponsor of 325 Fifth and certain subcontractors arising from the defective design, construction, sale, marketing’ and management of the condominium building located at 325 Fifth Avenue, New York, New York (the “building”), which was allegedly plagued with defects from the outset. Defendants allege that Kagan Lubic failed to take even the most basic steps to secure remedies against those responsible for the defective design and construction of the Building and that for nearly two years, Kagan Lubic “churned the file” and generated enormous legal bills.through prolonged negotiations and other pre-litigation tactics that were time consuming, costly and entirely ineffective, including, inter alia, (i) retaining duplicative, superfluous experts which caused defendants to incur thousands of dollars in additional fees; (ii) engaging in futile settlement discussions for nearly eighteen months; (iii) generating enormous legal fees by spending countless hours addressing inconsequential maintenance issues in the building which, in many instances, cost Jess to remediate than the time spent addressing them; (iv) frustrating any progress toward reaching a settlement with the sponsor with respect to the maintenance issues by delaying nearly four months before responding to the sponsor’s offer to remediate certain conditions; (v) routinely raising additional maintenance issues which resulted in further delay and costs; and (vi) allowing nearly two years to lapse without filing a complaint in the action. Defendants further allege that “[b]ut for Kagan Lubic’s dilatory tactics, the defects in the Building would have been remediated by now, and the impaired value of the Condominium units in the Building resultingfrom the design and construction defects and ongoing litigation would have been restored.”

“Finally, plaintiffs assertion that defendants’ legal malpractice claim must be dismissed as premature on the ground that the underlying lawsuit in which the alleged negligent representation occurred is still ongoing is without merit. New York courts have routinely entertained malpractice actions prior to the resolution of the underlying claim which gave rise to the malpractice claim. See Rivas v. Raymond, Schwartzberg & Assoc., P LLC, 52 A.D.3d 40 (Dept 2008)(denying defendants’ motion to dismiss and allowing the legal malpractice claim to proceed “even though there has not been an adverse disposition of the action”); see also Johnston v. Raskin,  93 A.D.2d 786, 797 (2d Dept 1993)(reversing dismissal of legal malpractice claim on the basis that it was premature and holding that “contrary to the defendants’ assertions, the plaintiff could commence her action although her damages were, as yet, unconfirmed.”) Here, defendants’ counterclaim for legal malpractice is not premature notwithstanding the fact that defendants’ lawsuit against the sponsor is ongoing because defendants’ malpractice damages are not contingent on the resolution of the underlying action. “