Magder v Lee   2015 NY Slip Op 32254(U)   November 23, 2015   Supreme Court,   New York County Docket Number: 653917/14   Judge: Saliann Scarpulla is the story of a complicated movie deal gone sour.  Nestled within is a legal malpractice case.  Watch how the Court simplifies the proceedings in the face of a legal malpractice claim.

“Plaintiff Andrea Magder (“plaintiff’ or “Magder”) brings this action against defendants Belton Lee (“Lee”), Madhattan Film Company Global, LLC (“MFCG”), Christopher Bongime (“Bongime”), Marc Jacobson, P.C. (“MJPC”), Marc Jacobson (“Jacobson”) (Jacobson, together with MJPC, “Jacobson defendants”) and nominal defendant Dining with Alex LLC (“DWA” or “Company”). The complaint asserts causes of action for: (1) breach of DWA’ s Operating Agreement (“operating agreement”) against Lee and MFCG; (2) breach of the DWA Producer Agreement (“producer agreement”) against Lee and MFCG; (3) tortious interference with contract against Lee, Bongime and Jacobson; (4) breach of fiduciary duty against Lee; (5) breach of fiduciary [* 1] duty against the Jacobson Defendants; and (6) legal malpractice against the Jacobson Defendants. ”

“The third cause of action alleges tortious interference with contract against Lee, Bongirne and Jacobson. Jacobson contends that the tortious interference with contract claim is duplicative of the legal malpractice claim and that, in any event, the complaint fails to identify any specific actions taken by Jacobson that induced the alleged breaches of the producer agreement and the operating agreement. Bongirne likewise contends that the complaint fails to allege how he procured the purported breaches. In addition, Bongirne argues that the claim fails because neither the producer agreement nor the operating agreement was actually breached.

To establish a cause of action for tortious interference with contractual relations, plaintiff must allege: “(l) the existence of a valid contract between [plaintiff] and [a third-party]; (2) defendant[‘s] knowledge of that contract; (3) defendant[‘s] intentional procuring of the breach of that contract; and (4) damages. Specifically, a plaintiff must allege that the contract would not have been breached “‘but for’ the defendant’s conduct.” Burrowes v Combs, 25 AD3d 370, 373 (1st Dept 2006) (internal citations omitted). A claim that “[arises] out of the same facts as the legal malpractice action and [does] not involve any additional damages, separate and distinct from those generated by the alleged malpractice,” will be dismissed as duplicative. Lusk v Weinstein, 85 AD3d 445, 445-446 ( l st Dept 2011 ). “The key to determining whether a claim is duplicative of one for malpractice is discerning the essence of each claim.” Johnson v Proskauer Rose LLP, 129 AD3d 59, 68 (1st Dept 2015). Here, the complaint seeks damages in excess of $500,000 for the tortious interference with contract claim, whereas with respect to the legal malpractice claim, it seeks “other compensation,” as well as disgorgement of legal fees and punitive damages. Even assuming that the $500,000 is “separate and distinct,” (Lusk, 85 AD3d at 445) from the “other compensation,” the “essence” of both claims is that Jacobson facilitated Lee in ousting Magder from the project. Johnson, 129 AD3d at 68. Therefore, the tortious interference with contract claim against Jacobson is dismissed as duplicative of the legal malpractice claim. See Weksler v Kane Kessler, P.C., 63 AD3d 529, 531 (1st Dept 2009).”

“The fifth cause of action alleges breaches of fiduciary duties against the Jacobson defendants, and the sixth cause of action asserts a cause of action against the Jacobson defendants for liability based upon legal malpractice. The Jacobson defendants argue that the malpractice claim must be dismissed for lack of privity and failure to state actual damages proximately caused by the Jacobson defendants’ alleged negligence. Additionally, the Jacobson defendants assert that the complaint fails to states a claim for breach of fiduciary duty. “An action for legal malpractice requires proof of the attorney’s negligence, a showing that the negligence was the proximate cause of the plaintiffs loss or injury, and evidence of actual damages.” Pellegrino v File, 291AD2d60, 63 (1st Dept 2002). While “[p ]laintiff is not obliged to show, at this stage of the pleadings, that [she] actually sustained damages,” she must plead “allegations from which damages attributable to [defendant’s conduct] might be reasonably inferred.” lnKine Pharm. Co. v Coleman, 305 AD2d 151, 152 (1st Dept 2003) (internal quotation marks and citation omitted). “Moreover, [plaintiff] must plead specific factual allegations establishing that but for counsel’s deficient representation, there would have been a more favorable outcome to the underlying matter.” Dweck Law Firm v Mann, 283 AD2d 292, 293 (1st Dept 2001). Generally, “New York courts impose a strict privity requirement to claims of legal malpractice; an attorney is not liable to a third party for negligence in performing services on behalf of his client.” Lavanant v General Acc. Ins. Co. of Am., 164 AD2d 73, 81 ( 1990), afld 79 NY2d 623 ( 1992). However, courts will permit a malpractice claim, in the absence of privity, where the “relationship sufficiently approach[ es] privity,” (Estate of Schneider v Finmann, 15 NY3d 306, 309 [201 O]) or where a third party suffers harm as a result of “professional negligence in the presence of fraud, collusion, malicious acts or other special circumstances.” Good Old Days Tavern v Zwirn, 259 AD2d 300, 300 (1st Dept 1999); see also Green v Fischbein Olivieri Rozenholc & Badillo, 119 AD2d 345, 350 (1st Dept 1986) (“an attorney may be held liable to a nonclient as a consequence 1.1 [* 14] of the attorney’s wrongful or improper exercise of authority, or where the attorney has committed fraud or collusion or a malicious or tortious act” [internal quotation marks and citations omitted]). A claim of fraud or collusion must be stated with particularity. CPLR 3016 (b ); see Griffith v Medical Quadrangle, 5 AD3d 151, 152 (1st Dept 2004). To establish a breach of fiduciary duty claim, a plaintiff must allege: (1) the existence of a fiduciary relationship; (2) misconduct by the defendant; and (3) damages. Burry v Madison Park Owner LLC, 84 AD3d 699, 700 (1st Dept 2011). Where the claim for breach of fiduciary duty is “premised on the same facts and seek[ s] the identical relief sought in the legal malpractice cause of action, [it] is redundant and should be dismissed.” Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 271 (1st Dept 2004); see also lnKine Pharm. Co., 305 AD2d at 152. “