A real estate deal gone wrong…what could be more New York than that?  In our world, only a legal malpractice claim after the deal is more relevant.

83 Willow, LLC v Apollo 2019 NY Slip Op 31203(U)  May 2, 2019 Supreme Court, New York County Docket Number: 151266/2015 Judge: Barbara Jaffe is the story of a client, an attorney and a big problem.  The problem is a one-sided contract.  However, the court finds damages are speculative and dismisses.

“Plaintiff limited liability company was formed in New Jersey and has its principal place
of business there. Defendant’s principal place of business is in New York County.
In reliance on defendant’s asserted skill, knowledge, and experience as an attorney,
plaintiffs managing member retained him in connection with the development and sale of an
undeveloped parcel ofland it owned in a redevelopment area in New Jersey.”

“Defendant drafted, reviewed, and revised the contract of sale, which provided, inter alia,
for a sales price of $3.730 million for the property, a deposit of $50,000, and the contingency
that within six months, plaintiff obtain site-plan approval for the development of a structure of a
minimum size and/or nature, with a six-month extension. The contingency constituted a material
element of and material inducement for entering into the contract, and defendant recommended it
to plaintiff, who relied on his professional guidance and advice on the interpretation of the
Unbeknownst to plaintiff, the contingency provision permitted only the buyer to cancel
the contract in the event that the contingency remained unsatisfied and contained no date on
which the contract would be deemed cancelled if the closing did not occur. In effect, the buyer
was given a” de facto option contract, extending in perpetuity, with no remedy to cancel
available to [plaintiff] and at a cost of approximately 1 % of the agreed upon value of the Property.”

Defendant advised plaintiff that the contract allowed it to cancel upon expiration of the
contingency provision. Thus, when the contingency provision expired, and on defendant’s
advice, on or about March 15, 2013, defendant informed the buyer’s attorney that the contract
was terminated and cancelled. In response, the buyer’s attorney objected and advised that the
contract permitted only the buyer to cancel. ”

“Soon thereafter, the buyer filed an action against plaintiff in the New Jersey Superior
Court seeking specific performance of the contract of sale, and filed a notice of pendency against
the property, the value of which then exceeded $5.5 million. Plaintiff was unable to sell the
property for fair market value even though there were ready, able, and willing buyers for that
amount. It was thus forced to sell the property to the buyer for $3.540 million.
Had it not been for defendant’s malpractice, plaintiff would have been able to cancel the
contract and sell the property for not less than $5.5 million and would not have incurred 18
months of litigation which cost it more than $200,000 in legal fees. ”

“Here, plaintiff’s assertion that absent defendant’s negligence, it would have been able to
terminate the contract and sell the property is fatally conclusory, and defendant reasonably
observes that the buyer would not have agreed to such a provision, having paid a non-refundable
deposit and undertaken to obtain the funds needed for the transaction. Thus is revealed the
speculative nature of plaintiff’s case. Additionally, even if open to the idea, the buyer would
likely have sought to extract something in return from plaintiff, a possibility that plaintiff does
not address.
Thus, defendant satisfactorily shows, prima facie, that plaintiffs claim that but for his
failure to negotiate the inclusion in the contract of sale a clause affording it the right to terminate
in the event of a failure to obtain the requisite approvals, it would have been able to terminate the
contract and sell the property for a higher amount of money than that set forth in the contract is
too conclusory and speculative to prove that he was the proximate cause of plaintiff’s damages. “

Email this postTweet this postLike this postShare this post on LinkedIn
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.