Owner A performs work in a NYC building.  Owner B is damaged.  Owner B sues Owner A as well as the building.  Lots of attorney fees are generated.  Owner B then sues the attorneys for the Board for legal malpractice.  Standing?  No.  Derivative claim on behalf of the Board.  No.  Second chance? Yes.

“This action arises from certain work performed pursuant to a certain Alteration Agreement (the
Alteration Agreement), dated January 2004, by and between Sandra Nunnerly and the Board of
Directors for 36 East 69th Corp. (the Board). ”

“When Ms. Nunnerley performed the work contemplated by the Alteration Agreement, damage
was incurred by Virginia Witbeck. Ms. Witbeck brought a lawsuit (the Underlying Lawsuit)
captioned Virginia Witbeck v. Sandra Nunnerley et al., Index No. 115086/2005 as against Ms.
Nunnerley, 36 East 39th Corp (the Co-op), Alexander Wolfe and Company, Inc. and TDC
Construction Inc (id., if 17). The Underlying Lawsuit was settled for $15,000 and the attorneys’
fees incurred were allegedly in excess of $150,000 (id., if 25). Significantly, at no time has the
Co-op made a demand that Ms. Nunnerly reimburse the Board for its $150,000 legal bill. Nor
has Ms. Jarmuth requested that the Board make any such demand. Instead, Ms. Jarmuth
commenced this action individually and derivatively on behalf of the Co-op for legal
malpractice, breach of contract and tort for breach of ethics concerning the Defendants’
representation of the Co-op in the Underlying Lawsuit. ”

“To the extent the claim is asserted by Ms. Jarmuth individually against the Defendants, Ms.
Jarmuth has no standing as an unrelated third party (see Green v Fischbein, Olivieri, Rozenholc
& Badillo, 135 AD2d 415, 418 [1st Dept 1987] [holding that “[u]nder New York law an attorney
generally cannot be held liable to third parties for actions taken in furtherance of his role as
counsel unless it is shown that he ‘did something either tortious in character or beyond the scope
of his honorable employment.”‘]). To the extent that the claim against the Defendants is made
derivatively on behalf of the Co-op, Ms. Jarmuth has not complied with BCL § 626( c) which
requires that shareholder derivative actions “set forth with particularity the efforts of the plaintiff
to secure the initiation of such action by the board or the reasons for not making such effort.”
While Ms. Jarmuth has pled that she serviced a notice on members of the Board regarding “legal
malpractice by the Wagner Berkow attorneys with regard to advice given and the action taken as
it pertained to a certain litigation brought by Virginia Witbeck against Sandra Nunnerley 36 East
69111 Owners Corp. and TD Construction Inc.” (NYSCEF Doc. No 1, if 3), there is no evidence
that the Board made a demand for reimbursement from Ms. Nunnerley or that Ms. Jarmuth
demanded that the Board should do so, accordingly, Ms. Jarmuth’s first cause of action for legal
malpractice is dismissed without prejudice. For the avoidance of doubt, should Ms. armuth demand that the Board seek reimbursement from Ms. Nunnerley, and should the Board refuse to
seek reimbursement from Ms. Nunnerley, Ms. Jarmuth is not precluded from seeking alternative
derivative relief.”


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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.