Castlewood Apparel Corp. v Davidoff Hutcher & Citron LLP  2018 NY Slip Op 30717(U)
April 23, 2018 Supreme Court, New York County  Docket Number: 150167/2017  Judge: Shlomo S. Hagler is a case which displays an unusual degree of latitude in denying a 3211 motion to dismiss.  We have written that these motions seem to get a greater degree of attention, and consequently a higher bar to plaintiffs in legal malpractice settings.  This case approaches what we believe is the norm across the legal world.

“Plaintiffs legal malpractice claim is based on the allegation that defendant should have informed it of the need to file Uniform Commercial Code financing statements (“UCC-1 Financing Statements”) in order to secure its interest in the consigned goods. The parties dispute whether DHC was retained solely to negotiate the License Agreement, or to also represent plaintiff with respect to the  subsequent consignment transaction with Sports Authority (Klein Affidavit, ii 3; Sutton Affidavit, dated 4110/17[the “Sutton Affidavit”]). It is undisputed that plaintiff never signed a retainer agreement with DHC (Klein Affidavit,  12; Sutton Affidavit,  14; Tr Oral Argument, 6/26117 at 4). Rather, by email dated May 1, 2014, from Sutton to Klein, Sutton requested that Klein review an attached proposed license agreement with Prince. Said email stated, “Charles-we are moving forward with the Prince license. Can you start to look at the.attached agreement as we will need to move quickly on this” (KleinAffidavit, Exhibit “3”). In opposition, Sutton, avers that a draft letter agreement sent by Klein to Sutton on June 3, 2014, outlining the terms of a consignment transacti<?n with Sports Authority regarding Prince apparel, is proof that defendant’s representation of plaintiff covered advice to plaintiff as a consignor (the “Letter Agreement”) (Sutton Affidavit, Exhibits “A”, “B”; Id., iiii 3-9). Defendant presents an email, dated June 2, 2014, from Sutton to Klein which sets forth the terms of an agreement with Sports Authority, and requests that Klein “put together a very short and brief agreement that_! can present. to them” (Klein Reply Affidavit, Exhibit “A”). Sutton avers that he and Klein also had discussions at the time regarding the proposed consignment deal (Sutton Affidavit, iiii 7–9). Klein attests, however, that thereafter he was never asked to take further action with respect to the Letter Agreement and was not aware whether plaintiff forwarded it to Sports Authority (Klein Reply Affidavit, ii 18). As plaintiffs counsel admitted during argument, the Letter Agreement was never signed (Tr of Oral Argument, 6/26117 at 21:13-22:8). ”

“Here, the complaint and the evidentiary material submitted by plaintiff, is sufficient to
state a cause of action for purposes.ofthis pre-discovery CPLR 321 l(a)(7) motion. The
Complaint alleges that defendant’s negligent conduct in failing to advise plaintiff of the need to
file UCC-1 Financing Statements caused plaintiff to suffer damages. The Sutton Affidavit
submitted by plaintiff in opposition, avers that several discussions took place between the parties
regarding the eventual consignment deal with Sports Authority, and it is undisputed that
defendant drafted the proposed Letter Agreement between plaintiffand the Sports Authority
(Sutton Affidavit, ‘iii! 3-8; Klein Reply Affidavit,iJ’i! 17-18). Said Letter Agreement drafted by
Klein specifically addresses a consignment deal between plaintiff and Sports Authority (Sutton
Affidavit, Exhibit “B”). “