Yesterday, we discussed privity in a real estate setting in 71 Park Ave. S., LLC v Fox Rothschild LLP 2018 NY Slip Op 32451(U) October 1, 2018 Supreme Court, New York County Docket Number: 158900/2017. Judge Saliann Scarpulla determined that one of the two plaintiffs lacked privity because it was formed after the representation was commenced, and the retainer agreement specifically ruled out representation of any related entities. While the second plaintiff in the action has a well pled claim against the law firm, today we discuss the concept of “near privity.” This comes up frequently in opinion letter settings where non-clients might seek to rely upon an opinion letter.
“Plaintiffs also argue that their malpractice claim should be sustained because they plead facts sufficient to establish a relationship approaching near privity. To sustain a claim for legal malpractice based on near privity, a plaintiff must allege that the professional was “aware that its services will be used for a specific purpose, the plaintiff must rely upon those services, and the professional must engage in some conduct evincing some understanding of the plaintiffs reliance.” Allianz Underwriters Ins. Co. v. Landmark Ins. Co., 13 A.D.3d 172, 175 (1st Dept 2004). Here, Plaintiffs fail to allege sufficient facts to show near privity. First, the documentary evidence contradicts Plaintiffs’ argument that 71 Park was in near privity with Fox. As stated above, the Engagement Letter disclaimer stated that Fox agreed to represent only NP, not 71 Park. Second, the Land Opinion letter, which 71 Park alleges that it relied upon to its detriment, was addressed to Savitar and stated that it could “only be relied upon by the entities to which it is addressed … and may not be relied upon by any other person or entity …. ” Lastly, the complaint is devoid of any allegations that 71 Park requested legal advice from Fox, that Fox agreed to perform a specific task for 71 Park, or that there was any direct contact between Fox and 71 Park after the latter entity was formed. In fact, Fox continued to address its invoices to NP as per the Engagement Letter through
2016. Thus, Fox and 71 Park did not have a relationship of near privity. See Wei Cheng Chang, 288 A.D.2d at 380-381.
The documents executed by the parties preclude a finding of an attorney-client relationship between Fox and 71 Park. Based upon this documentary evidence, I dismiss Plaintiffs’ cause of action for legal malpractice and do not address the remaining arguments in support of dismissal. ”