The primary lesson to be learned from Salans LLP v VBH Props. S.R.L. 2019 NY Slip Op 02611 Decided on April 4, 2019 Appellate Division, First Department is that courts will deem a studied prediction on what would have happened if counsel had actually gone to court and made certain arguments is that they will almost always call it “speculation” and dismiss a legal malpractice case.
The second less to learn is that limited scope retainer agreements are permissible, but ambiguous ones are construed in favor of the client. Lastly, representing the president and the company at the same time is permissible sometimes.
“Contrary to plaintiff’s argument, the scope of the work it performed under the 2008 retainer agreement, which included not only numerous contracts and negotiations but also employment litigation in the U.K., makes it at least reasonable to construe the agreement as authorizing plaintiff to represent Luxury and Hoeksema in the underlying loan action (see Shaw v Manufacturers Hanover Trust Co., 68 NY2d 172, 177  [where there is ambiguity in retention agreement, agreement is construed in favor of client]).
However, plaintiff demonstrated prima facie entitlement to judgment in the legal malpractice counterclaim by showing that defendants could not prove that but for plaintiff’s failure to appear at the TRO hearing the hearing court would have denied the TRO or set a shorter return date (see Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 272 [1st Dept 2004] [holding that to establish a claim for litigation malpractice the client “must meet the case within a case’ requirement, demonstrating that but for’ the attorney’s conduct the client would have prevailed in the underlying matter or would not have sustained any ascertainable damages”]). Defendants speculate that had plaintiff appeared at the TRO hearing, injunctive relief may have been denied or the hearing court may have adjourned the case to an earlier date. Such speculation is insufficient to sustain a claim for legal malpractice (see Freeman v Brecher, 155 AD3d 453, 453 [1st Dept 2017]; Brooks v Lewin, 21 AD3d 731, 734-735 [1st Dept 2005], lv denied 6 NY3d 713 ).”
“Luxury and Hoeksema contend that there is a conflict of interest in plaintiff’s [*2]representation of both of them. However, as Hoeksema is the sole owner, director and officer of Luxury, there is no conflict (see Topic: Concurrent Representation of Corporation and Sole Shareholder, Director and Officer (NY St Bar Assn Comm on Prof Ethics Op 868 [May 31, 2011]). Moreover, Luxury and Hoeksema failed to show any injury caused by the alleged conflict.”