Argue about “duty” and “privity” as much as you wish, once an attorney agrees to undertake a task, they can be held responsible for not performing.  While the “privity” bar is quite high, in Nilazra, Inc. v Karakus, Inc.  2016 NY Slip Op 01302 [136 AD3d 994]  February 24, 2016  Appellate Division, Second Department the attorney voluntarily gave up that protection.

“The plaintiff commenced the instant action to recover damages arising from a sales tax lien that accrued after it purchased a restaurant from the defendant Karakus, Inc. (hereinafter the seller). The defendant/third-party plaintiff, Nellie Levitis, also known as Nelly Levitis (hereinafter Levitis), represented the plaintiff as the purchaser, and the defendant/third-party defendant, Erik Ikhilov, represented the seller. Tax Law § 1141 (c) requires that at least 10 days prior to the transfer of a business, the purchaser must file a notification of sale, transfer, or assignment in bulk (hereinafter the notification) with the New York State Department of Taxation and Finance (hereinafter the Department). The failure to timely file the notification results in the seller’s sales tax liabilities attaching to the purchaser (see Tax Law § 1141 [c]; Randazzo v Nelson, 128 AD3d 935 [2015]; Yiouti Rest. v Sotiriou, 151 AD2d 744, 745 [1989]).

Levitis alleges that Ikhilov had a preexisting relationship with the plaintiff’s principal, Emir Huner, and that he referred Huner to her to perform legal services in relation to the purchase of the restaurant. Levitis further alleges that Ikhilov assured her and her client that he would timely file the notification with the Department, and would hold the amount of the purchase price in escrow to pay any sales tax determined to be owed by the seller. In addition, Levitis alleges that Ikhilov promised to prepare, and in fact did prepare, all of the other documentation, including the contract of sale, riders, and schedules necessary to consummate the sale of the restaurant. Ikhilov did not file the notification with the Department until the closing date. As a result of the late filing, the seller’s tax liabilities in the amount of $83,333.33 attached to the purchaser. The total purchase price of the restaurant was $90,000.

The plaintiff thereafter commenced the main action against, among others, its attorney Levitis alleging, among other things, legal malpractice arising from her failure to verify that the notification had been timely filed by Ikhilov. Levitis commenced a third-party action seeking contribution and indemnification against Ikhilov alleging, among other things, that he had voluntarily assumed a duty to timely file the notification. Ikhilov moved pursuant to CPLR 3211 (a) (7) to dismiss the third-party complaint. The Supreme Court denied the motion.

The Supreme Court properly determined that the third-party complaint, as supplemented by Levitis’s affidavit, sufficiently pleaded a cause of action to recover damages for negligence, as it alleged, inter alia, that Ikhilov voluntarily assumed Levitis’s duty, as the attorney for the purchaser, to timely file the notification with the Department, and breached that duty (see AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 NY3d 582, 594 [2005]; see also Schwartz v Greenfield, Stein & Weisinger, 90 Misc 2d 882 [Sup Ct, Queens County 1977]; cf. Council Commerce Corp. v Schwartz, Sachs & Kamhi, 144 AD2d 422, 424 [1988]).”