Glaubach v PricewaterhouseCoopers, LLP  2018 NY Slip Op 30875(U)  May 9, 2018  Supreme Court, New York County  Docket Number: 157993/2016  Judge: O. Peter Sherwood is something of a nightmare.  Plaintiff is the founder, former president and a minority shareholder of a home health services company which is successful.  He takes a medical leave and all hell breaks loose.

“Numerous Personal Touch cxecutives, particularly chief executive officer David Slifkin (Slifkin), executive vice-president and general counsel Robert Marx (Marx), and vice-president Gertrude Balk (Balk), engaged in fraud, theft, looting, breach of fiduciary duty, corporate waste and
mismanagement (id.. ii 8). These executives fraudulently caused millions of dollars of payments to
he made by the company to them, which were then reported as ‘”continuing legal education·
reimbursements” (id.. 1 25, 27). ”

“Glaubach asserts that for years he had a “direct relationship of trust” with PwC, and that each
year PwC discussed the financial health of the company with Glaubach at Personal Touch’s offices
(id.,  57). He also asserts that he discussed with PwC his role as 27% shareholder, as a lender of
$10 million. and the importance of the audits to his own financial decisions (id). In 2013.  PwC v.’as
told of the fraud and improper activities. and following this, PwC reexamined and reevaluated the
previous years’ financial statements. purporting to address these issues (id,  60).
Glaubach asserts that since the fraud. looting. and accounting malpractice, the value of the
company has severely declined, and the value of his shares have plummeted. He states that he
loaned millions of dollars to the company, and that he has spent millions of dollars in legal foes to
try to repair the damage to the company, and to his own reputation (id., 62).”

Glaubach’ s first cause of action for accounting malpractice is asserted derivatively. Since
Personal Touch is incorporated in Dela\vare, Deb.ware law applies to the issue of whether Glaubach
has adequately pleaded that he demanded that the company bring the claim, or that such demand
would he futile for the purposes of his derivative claims (see Asbestos Workers Phila. Pension Fund v Rell, 137 AD3d 680, 681 p’1 Dept 2016). Under Delaware law, and Delaware Chancery Court
Rule 23.1. tu have standing to pursue a derivative claim on behalf of a company, a plaintiff ”must
make a pre-suit demand that the board pursue the contemplated action” (id. at 681-682 ). Such a presuit demand ‘·may be excused, however, if such a demand would have been futile” (id. [internal
quotation marks and citation omittcdl). Either presuit demand or demand futility must be pleaded
\vith particularity in order for a derivative claim to survive a dismissal motion (see Brehm v fasner,
746 A2d 244, 254 l Del 2000]).

ln the instant case, the amended complaint fails to allege that Glaubach ever demanded that
the Personal Touch board pursue an audit malp;acticc claim against P\VC. or that such a demand
would have been futile.”

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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.