Jonns v Fischbarg  2018 NY Slip Op 32353(U)  September 18, 2018  Supreme Court, New York  County  Docket Number: 150729/2017 Judge: Kathryn E. Freed which we discussed yesterday for its lesson on the statute of limitations is also worthwhile to read for how litigation costs can be part of legal malpractice damages.  In short, those damages can include litigation expenses incurred in an attempt to avoid, minimize or reduce the damage caused by the attorney’s wrongful conduct.

“To prevail on a claim for legal malpractice, a plaintiff must establish three elements: (1) that the attorney failed to exercise the degree of care, skill, and diligence commonly possessed and exercised by a member of the legal community, (2) that such negligent failure was a proximate cause of the loss in question, and (3) that the plaintiff sustained actual and ascertainable damages. (See Barbara King Family Trust v Voluto Ventures LLC, 46 AD3d 423, 424 [1st Dept 2007].)

The plaintiffs burden of proof in a legal malpractice action is a heavy one. (See Lindenman v Kreitzer, 7 AD3d 30, 34 [1st Dept 2004].) In regard to the element of proximate causation, 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.” (Gallet, Dreyer & Berkey. LLP v Basile, 141AD3d405, 405 [1st Dept 2016].) A plaintiffs damages in connection with such a claim may include “litigation expenses incurred in an attempt to avoid, minimize, or reduce the damage caused by the attorney’s wrongful conduct.” (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 443 [2007] (quotations omitted).) But mere “speculation of a loss resulting from an attorney’s alleged omissions … is insufficient to sustain a claim for legal malpractice.” (Gallet, _Dreyer & Berkey, LLP, 141 AD3d at 405-06 (quotations omitted).)”

“Here, Fischbarg argues that the purchase agreement that he drafted obligated Dorsia to assign the lease for the business premises to Jonns and to transfer the Charles Restaurant’s liquor license to Jonns. (Docs. 6 at 8, 23 at 2.) He argues that, because it was Dorsia’s responsibility to fulfill those obligations, Jonns’ complaint fails to state a legal malpractice cause of action against him. (Id. at 8-10.) Viewing the pleadings in a light favorable to plaintiff and affording him the benefit of every inference, which this Court must do on a motion to dismiss (see Leon, 84 NY2d at 87-88), this Court finds that the amended complaint sets forth sufficient factual allegations that Fischbarg did not use the reasonable degree of care, skill, and diligence commonly exercised by one in the legal community. Specifically, Jonns alleges in his amended complaint that Fischbarg failed to properly act as his attorney by, inter alia, allowing Jonns to sign the purchase agreement in his personal capacity, representing the investors and Dorsia during the business transactions, and by failing to file the necessary papers and applications for a liquor license with the SLA. (Doc. 21 at 9.) The amended complaint therefore alleges the first element of a professional malpractice claim. ”

“Because the underlying Dorsia action is still pending, Jonns cannot conclusively establish that he would have prevailed in that action but for Fischbarg’s negligence. However, Jonns claims in the amended complaint that he has suffered damages as a result of Fischbarg’s failure to draft the purchase agreement as being between Dorsia and an LLC because this caused Jonns to have to defend himself in the Dorsia action. (See Rudo([, 8 NY3d at 443 (litigation expenses to mitigate an
attorney’s negligence satisfy the element of actual damages in legal malpractice actions).)
Contrary to Fischbarg’s assertion, Jonns’ litigation costs in the Dorsia action are not speculative.
(Doc. 29 at 8-9.) Proximate causation is sufficiently alleged since Jonns would not have incurred
those litigation costs if he did not sign the purchase agreement in his personal capacity, i.e., if
Fischbarg had drafted the purchase agreement as being between Dorsia and an LLC, such as
Crazy Asylum. Therefore, this Court finds that Jonns’ amended complaint adequately alleges the
elements of proximate causation and actual damages. ”