Wow! Furgang & Adwar, LLP v S.A. Intl., Inc.  2018 NY Slip Op 31151(U)  June 6, 2018
Supreme Court, New York County  Docket Number: 651192/2014  Judge: Eileen A. Rakower is a primer on the elements of legal malpractice, breach of contract, breach of fiduciary duty, fraud, as well as how to decide a CPLR 3211 motion and when reargument may be had.  It’s practically a full course on legal malpractice and its siblings.  So, we’ll review the legal malpractice portion today.

“SAI’ s first counterclaim alleges that F &A and Furgang breached their fiduciary duty during their representation of SAI in the trademark dispute. Specifically, SAI claims that F&A and Furgang inter alia overcharged for work allegedly performed approximating $300,000 including costs. As a second counterclaim, SAI alleges that F&A and Furgang committed legal malpractice. The reason being that F &A and Furgang inter alia incorrectly assessed the strength of SAI’ s position in the trademark litigation, incorrectly assessed the strength of a motion to dismiss filed by SAI’s adversary and competitor, advised against negotiation and settlement efforts, and “embroil[ ed] SAi in costly litigation.” (SAI Answer at 15) SAI adds that “But for Furgang’s 1 departure from the ordinary standards of professional conduct and breach of Furgang’ s fiduciary duties, SAi would not have become embroiled in a costly lawsuit and would have benefitted by saving more than $300,000 in legal fees.” (SAi Answer at 15) As a third counterclaim, SAi alleged that that F &A and Furgang breached its contract with SAi by inter alia pursuing a costly and aggressive litigation strategy that avoided  settlement, charging exorbitant amounts that were not justified, and causing SAi to sustain losses in the amount of $300,000. As a fourth counterclaim, SAi alleges that F &A and Furgang breached the implied covenant of good faith and fair dealing by: pursuing resolution of the trademark litigation in a reckless manner that increased expenses and destroyed SAi’ s right to receive the fruits of the contract. This claim especially holds according to SAi because F&A’s agreement with SAi to pursue the trademark litigation in a matter that “did not cost a large sum of money constituted a contract.” (SAi Answer at 16) ”

“To sustain a cause of action for legal malpractice, the plaintiff must show that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the attorney’s breach of this duty proximately caused the client to sustain actual and ascertainable damages. (Brookwood Companies, Inc., v Alston & Bird LLP, 146 AD3d 662, 666
[1st Dept 201 7].) “An attorney’s conduct or inaction is the proximate cause of a plaintiffs damages if ‘but for’ the attorney’s negligence ‘the plaintiff would have succeeded on the merits of the underlying action’, or would not have sustained ‘actual and ascertainable’ damages.” (Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 50 [2015].) Accordingly, “the successful
conclusion of the underlying action does not preclude the maintenance of a malpractice action where a claim is made that the defendant attorney’s neglect increased litigation expenses.” (76 NY Jur 2d, Malpractice § 2) Indeed, in Skinner v Stone, Raskin & Israel (724 F2d 264, 265 [2d Cir 1983]), the Court noted, “Whether appellant wins or loses in the [underlying] action, he still will be out of pocket for his expenses in opposing enforcement of the defective default judgment … If these
expenses resulted from [the attorney’s] negligence and were reasonably incurred, they should be recoverable.” (see also VDR Realty Corp. v Mintz, 167 AD2d 986, 986 [4th Dept 1990]) (stating “Plaintiff VDR Realty Corp. may recover damages even though it was successful in the underlying action.”) ”

“SAi states a counterclaim for legal malpractice. Because SAi alleges that F &A incorrectly assessed the strength of SAi’ s position in the trademark litigation, incorrectly assessed the strength of a motion to dismiss filed by SAi’ s adversary and competitor, advised against negotiation and settlement efforts, and embroiled SAi in costly litigation, SAi alleges that F &A “failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession.”
(Brookwood Companies, Inc., v Alston & Bird LLP, 146 AD3d 662, 666 [1st Dept 2017]; SAi Answer at 15) In this regard, SAi’s counterclaim for legal malpractice is not solely based on the excessiveness of F&A’s fee because it is premised on the quality or content of F&A’s legal advice. (Johnson v Proskauer Rose LLP, 129 AD3d at 65) Because SAi claims that “[b]ut for Furgang’s2 departure from the ordinary standards of professional conduct, SAi would … have [saved] more than $300,000 in legal fees”, SAi states that “‘but for’ [F&A’s] negligence[,] [SAi] … would not have sustained ‘actual and ascertainable’ damages.” (Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 50 [2015].) That the underlying trademark litigation was dismissed in SAi’s favor does not preclude the maintenance of the malpractice action because the counterclaim alleges that F&A’s neglect “increased litigation expenses.” (76 NY Jur 2d, Malpractice§ 2) “If these [300,000] expenses resulted from [F&A’s] negligence and were reasonably incurred, they should be recoverable.” (Skinner v Stone, Raskin & Israel (724 F2d 264, 265 [2d Cir 1983]) Accordingly, SAi “may recover damages even though it was successful in the underlying action.” (VDR Realty Corp. v Mintz, 167 AD2d 986, 986 [4th Dept 1990].) “

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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.