Billiard Balls Mgt. LLC v Mintzer Sarowitz Zeris Ledva & Meyers, LLP 2018 NY Slip Op 32019(U) August 17, 2018 Supreme Court, New York County Docket Number: 153477/2016 Judge: Carol R. Edmead is an interesting twist on the privity question.
“This is a legal malpractice action arising out of an automobile accident. Defendant Mintzer, Sarowitz, Zeris, Ledva & Meyers, LLP (Mintzer) briefly represented the plaintiff Billiard Balls Management (Billiard Balls) in an underlying action in Kings County, Gershman v Ahmad (index No. 18893/12) (the Gershman matter, or the underlying action), where the plaintiff Lizaveta Gershman (Gershman) alleged that Billiard Balls was liable under the Dram Shop Act.
Billiard Balls was insured at the time of the underlying accident by nonparty Capital Indemnity Corporation (Capital). Capital engaged Mintzer to represent Billiard Balls in the Gershman matter. Mintzer entered into two stipulations with counsel for Gershman, both of which extended Billiard Balls’ time to answer the complaint. However, Capital by letter dated December 28, 2012, denied coverage to Billiard Balls 1 and informed Mintzer that it would not be paying Billiard Balls’ legal bills. Mintzer, by letter dated January 25, 2013, informed Gershman’ s counsel that “we have been directed by the carrier not to interpose an Answer on behalf of Billiard Balls Management, LLC” (NYSCEF doc No. 62, ii 2).
On January 11, 2013, Billiard Balls’ time to answer Gershman’ s complaint expired. However, according to Aristotle Hatzigcorgiou (Hatzigcorgiou), a principal of Billiard Balls, Mintzer did not inform Billiard Balls about this deadline (Hatzigcorgiou aff, ii 9, NYSCEF doc No. 87). Nor did Mintzer move to be relieved as counsel. According to Billiard Balls, it did not learn of the deadline to answer until counsel for Gershman served a notice of motion, dated September 30, 2013, for a default judgment against Billiard Balls pursuant to CPLR 3215 (a) (b).
Only after it received the motion for a default against it did Billiard Balls retain thirdparty defendant Pillinger to defend against the motion (id., ii 1 O; see also NYSCEF doc Nos. 88 and 89 [emails between Billiard Balls and Pillinger exchanged in October 2013 ]). Pillinger opposed Gershmn’s motion and cross-moved to compel Gershman to accept Billiard Balls’ proposed answer. By an order dated May 7, 2014 (the May 2014 Order), the trial court in the underlying matter denied Gershman’s motion for a default and granted Billiard Balls’ motion to compel Gershman to accept its proposed answer. More than a year later, the Appellate Division, Second Department, reversed the May 2014 Order (Gershman v Ahmad, 131 AD3d 1104 [2d Dept 2015]). ”
“The salient fact related to Mintzer’s claim of legal malpractice against Pillinger is that Pillinger never represented Mintzer. Pillinger argues that the legal malpractice claim must be dismissed as it has no duty, except to clients, to practice law reasonably well. Indeed, the Appellate Division has held that “New York courts impose a strict privity requirement to claims of legal malpractice” and that “an attorney is not liable to a third party for negligence in performing services on behalf of his client” (Federal Ins. Co. v North Am. Specialty Ins. Co., 47 AD3d 52, 59 [1st Dept 2007]; but see Kumar v American Tr. Ins. Co. (49 AD3d 1353 [4th Dept 2008] [finding an exception to this strict-privity rule in cases involving equitable subrogation]).
Neither the Third-party Complaint, nor Mintzer’s opposftion alleges that an exception to the strict privity rule is appropriate because the doctrine of equitable subrogation is applicable. As Mintzer does not allege privity either, it has not stated a cause of action for legal malpractice against Pillinger. Nor does it have a cause of against Pillinger for legal malpractice. It is plain that Mintzer is not in privity with Pillinger and that equitable subrogation is not applicable to the relationship between the two law firms (see Fasso v Doerr, 12 NY3d 80  [noting that “[i]t is well established that when an insurer pays for losses sustained by its insured that were occasioned by a wrongdoer, the insurer is entitled to seek recovery of the monies it expended under the doctrine of equitable subrogation”]. Accordingly, the branch of Pillinger’ s motion that seeks dismissal of Mintzer’ s claim for legal malpractice must be granted.”