Deceased clients, deceased attorneys, and a disputed real estate transaction lead to Gourary v Green  2017 NY Slip Op 32158(U)  October 13, 2017  Supreme Court, New York County  Docket Number: 651932/10  Judge: Saliann Scarpulla.  At this point in the case, the attorneys have obtained dismissal of the legal malpractice claim, which has been affirmed by the AD1.  How might this affect the claims between two former partners in a real estate transaction?

“Gourary’s breach of fiduciary cause of action is based on Laster’s alleged failure to disclose information about the value of the property, the Corporation, and other details about the transaction underlying this dispute. Regardless of Laster’s duty as a fiduciary to disclose information that could bear on Gourary’ s consideration of the transaction, the breach of fiduciary duty claim fails because the complaint alleges that each of the nondisclosed facts was known to Green. See Complaint iii! 114, 115, 143-146. “The general rule is that knowledge acquired by an agent acting within the scope of his agency is imputed to his principal and the latter is bound by such knowledge although the information is never actually ~communicated to [him].” Seward Park Haus. Corp. v Cohen, 287 A.D.2d 157, 167 (1st Dep’t 2001). Unless Green had an adverse interest or acquired his knowledge in a confidential setting, Gourary cannot avoid imputation. See Farr v. Newman, 14 N.Y.2d 186, 188 (1964); see also Skiff-Murray v Murray, 17 A.D.3d 807, 810 (3d Dep’t 2005) (finding that attorney’s knowledge could be imputed to a client, “regardless of when or how it was obtained unless it was acquired confidentially”). Here, the law of the case is determinative. The First Department has already found that: “[t]he Green defendants established prima facie … that the sale was consistent with Gourary’s objectives”; “[t]here [was] no evidence that Green represented Macomber and Gourary dually in connection with the negotiations for the sale of Gourary’s share of the corporation”; and “Green’s structuring of the transaction favored Gourary’s interests· over those of Macomber.” Gourary, 143 A.D.3d at 580, 581. As the First Department’s decision makes clear, Green did not totally abandon Gourary’s interest and Gourary cannot avoid imputation by claiming the adverse interest exception. See Center v·Hampton Affiliates, 66 N.Y.2d 782, 785 (1985) (stating that adverse interest exception requires a total abandonment of the principal’s interests and “cannot be invoked merely because [the agent] ha[d] a conflict of interest or because he [was] not acting primarily for his principal.”). Nor can Gourary avoid imputation by speculating, as he does in his opposition papers, that Green may have acquired the information confidentially, as Laster’s attorney. Nowhere in the complaint does Gourary allege such dual representation. Gourary’s . . dismissed malpractice claim against Green was premised entirely on Green’s alleged dual representation of Paul Gourary and Oliver Macomber. Having had a full and adequate opportvnity to litigate the issue, Gourary may not now attempt to relitigate an issue “which [was] raised and determined against [him] or which could have been raised on a prior appeal.” Moran Enters., Inc., 96 A.D.3d at 916. Therefore, accepting the complaint’s factual allegations as true, Green’s knowledge concerning the transaction, ‘ . including that the offer allegedly was substantially below market value, must be imputed to Gourary. The imputation of Green’s knowledge t.o Gourary renders plaintiffs allegations, that Laster’s concealment of material facts proximately caused an injury to Gourary, “inherently incredible.” Skillgames, LLC, 1 A.D.3d at 250. Therefore, to the extent that the breach of fiduciary duty claim is premised on Laster’s alleged failure to make material disclosures, the complaint fails to state a cause of action. See, e:g., Laub v Faessel, 297 A.D.2d 28, 31 (1st Dep’t 2002) (stating that for breach of fiduciary, “plaintiff must establish that the alleged misrepresentations or other misconduct were the direct and proximate cause of the losses claim”); Pokoik v. Pokoik, 115 A.D.3d 428, 429 ‘· (1st Dep’t 2014).”

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Andrew Lavoott Bluestone

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened…

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened his private law office and took his first legal malpractice case.

Since 1989, Bluestone has become a leader in the New York Plaintiff’s Legal Malpractice bar, handling a wide array of plaintiff’s legal malpractice cases arising from catastrophic personal injury, contracts, patents, commercial litigation, securities, matrimonial and custody issues, medical malpractice, insurance, product liability, real estate, landlord-tenant, foreclosures and has defended attorneys in a limited number of legal malpractice cases.

Bluestone also took an academic role in field, publishing the New York Attorney Malpractice Report from 2002-2004.  He started the “New York Attorney Malpractice Blog” in 2004, where he has published more than 4500 entries.

Mr. Bluestone has written 38 scholarly peer-reviewed articles concerning legal malpractice, many in the Outside Counsel column of the New York Law Journal. He has appeared as an Expert witness in multiple legal malpractice litigations.

Mr. Bluestone is an adjunct professor of law at St. John’s University College of Law, teaching Legal Malpractice.  Mr. Bluestone has argued legal malpractice cases in the Second Circuit, in the New York State Court of Appeals, each of the four New York Appellate Divisions, in all four of  the U.S. District Courts of New York and in Supreme Courts all over the state.  He has also been admitted pro haec vice in the states of Connecticut, New Jersey and Florida and was formally admitted to the US District Court of Connecticut and to its Bankruptcy Court all for legal malpractice matters. He has been retained by U.S. Trustees in legal malpractice cases from Bankruptcy Courts, and has represented municipalities, insurance companies, hedge funds, communications companies and international manufacturing firms. Mr. Bluestone regularly lectures in CLEs on legal malpractice.

Based upon his professional experience Bluestone was named a Diplomate and was Board Certified by the American Board of Professional Liability Attorneys in 2008 in Legal Malpractice. He remains Board Certified.  He was admitted to The Best Lawyers in America from 2012-2019.  He has been featured in Who’s Who in Law since 1993.

In the last years, Mr. Bluestone has been featured for two particularly noteworthy legal malpractice cases.  The first was a settlement of an $11.9 million dollar default legal malpractice case of Yeo v. Kasowitz, Benson, Torres & Friedman which was reported in the NYLJ on August 15, 2016. Most recently, Mr. Bluestone obtained a rare plaintiff’s verdict in a legal malpractice case on behalf of the City of White Plains v. Joseph Maria, reported in the NYLJ on February 14, 2017. It was the sole legal malpractice jury verdict in the State of New York for 2017.

Bluestone has been at the forefront of the development of legal malpractice principles and has contributed case law decisions, writing and lecturing which have been recognized by his peers.  He is regularly mentioned in academic writing, and his past cases are often cited in current legal malpractice decisions. He is recognized for his ample writings on Judiciary Law § 487, a 850 year old statute deriving from England which relates to attorney deceit.