Real Estate in Manhattan, whether in a pandemic or not, remains a very significant economic force.  Real estate transactions remain a very significant portion of the legal malpractice world in NYC.  Here, a multi-million dollar co-op purchase went sour over the next door building’s right to add several floors and a penthouse.  The addition would render the co-op basically valueless and force a large swath of rooms to be unusable as residential space.

Halperin v Van Dam  2020 NY Slip Op 31301(U) April 28, 2020 Supreme Court, New York County Docket Number: Index No. 652124/2019 Judge: Andrea Masley  explains why the attorneys remain in the case.  it is, in large part, because they sent out a questionnaire and then ignored the missing answers.

“Prior to March 2017, plaintiffs Steven Halperin and Jamie Berman Halperin sought to purchase a multi-bedroom cooperative apartment in New York City to accommodate their young child and planned additional children. (NYSCEF Doc. No. [NYSCEF) 12, Complaint at 1Mf 11, 14.) Plaintiffs engaged defendant Marshall, “a licensed Real Estate Broker and principal officer or agent of [defendant) Douglas Elliman.” (Id at 1] 12.) Steven Halperin had previously worked with Marshall in leasing and selling another NYC apartment. (Id) Pursuant to a Dual Agency Disclosure prepared and furnished by Marshall, on behalf of Douglas Elliman, Marshall expressly acted as a “Buyers Broker” for plaintiffs. (Id at 1] 13.)

As their broker, Marshall provided plaintiffs with one of Douglas Elliman’s brokerage listings (Brokerage Listing) for an apartment located in the Flatiron District of Manhattan at 32 West 20th Street, Apartment 8S (Apartment). (Id at 1]1] 1, 12.) The Brokerage Listing represented the Apartment as “[c)urrently configured with one bedroom … additional bedrooms and baths may be added to fit your own lifestyle.” (Id at 1] 12 [emphasis omitted].) The Elliman Defendants knew that plaintiffs required a multi-bedroom apartment and actively marketed the Apartment as suitable for alteration and renovation into a multi-bedroom apartment. (Id at~ 14.) The Elli man Defendants also assured plaintiffs that such renovations were lawful and consistent with the governing rules and would be authorized by defendant Thirty-Two West 20 th Street Inc. (Apartment Corporation) (Id at W 4, 14.)

Plaintiffs engaged in negotiations with the Sellers. (Id at~~ 1, 15.) Although Sellers allegedly authorized Douglas Elliman to market the Apartment as a one bedroom with ability to expand, they failed to mention during negotiations that in 2010 the NYC Landmarks and Preservation Commission approved the premises adjacent to the Apartment for the construction of two additional levels and a penthouse, which would completely block certain windows in the Apartment. (Id at~~ 15, 27.) Plaintiffs decided to purchase the Apartment and retained the HH Defendants as attorneys to handle the closing of the transaction. (Id at W 18, 4.) The HH Defendants utilized a form of questionnaire entitled “Coop/Condo Review Sheet” and requested specific information from the Apartment Corporation concerning the Apartment. (Id at~ 19.) Questions 21 and 22 of this questionnaire were “Is this a lot-line Unit?” and if so, “Which of the windows are affected?” (Id) Although the questionnaire was returned to the HH Defendants, questions 21 and 22 were not answered. (Id at~ 20.)
Nevertheless, the HH Defendants made no further inquiry and failed to communicate this omission or its significance to plaintiffs. (Id)”

“Malpractice
“To sustain a cause of action for legal malpractice, [plaintiff] must show that [the attorney] failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that [the attorney’s] breach of this duty proximately caused the client to sustain actual and ascertainable damages.” (Brookwood Cos., Inc. v Alston & Bird LLP, 146 AD3d 662, 666 [1st Dept 2017] [internal quotation marks and citation omitted].) Failing to advise a client on the risks associated with a transaction and failing to confirm relevant information may form the basis of a legal malpractice claim. (See Benitez v United Homes of N. Y., LLC, 142 AD3d 867, 867 [1st Dept 2016].)

Here, plaintiffs allege that the HH Defendants failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession by failing to advise plaintiffs that rooms containing lot-line windows could not be utilized as bedrooms for residential occupancy. (NYSCEF 1, Complaint at 1[ 33[a]- [b].) Additionally, they allege that the HH Defendants failed to exercise ordinary reasonable skill and knowledge by failing to observe or report that the Managing Agent on behalf of the Apartment Corporation left blank the portion of the “Coop/Condo Review Sheet” that inquired “Is this a lot-line unit?” and “Which of the windows are affected.” (Id at 33[d].) Plaintiffs also allege that these breaches proximately caused them to sustain actual and ascertainable damages in the amount of $5,000,000. (Id at 1[ 36.)

Although the HH Defendants submit a a diagram of the premises that plaintiffs received prior to signing the Contract of Sale, indicating the presence of lot-line  windows, this submission does not utterly refute the legal malpractice claim. (NYSCEF 29, Heermance affirmation~ 7; NYSCEF 34, Diagram.) Here, “on a pre-answer motion to dismiss,” “the information contained in the [diagram] cannot, at this stage, be described as explicitly putting plaintiff on notice and not requiring counsel’s interpretation of the information.” (Macquarie Capital [USA] Inc. v Morrison & Foerster LLP, 157 AD3d 456, 457 [1st Dept 2018].) The HH Defendants “may not shift to the client the legal responsibility [they were] specifically hired to undertake.” (Id. [internal quotation marks and citation omitted].) Additionally, the HH Defendants’ submission of an email from Steven Halperin allegedly about the “Coop/Condo Review Sheet” also does not utterly refute the malpractice claim. (NYSCEF 38, 4/12/2019 email, 2.) To the contrary, Steven Halperin states, “If … Marc confirms that he is comfortable with the answers in the questionnaire (I have read them and they seem fine to me), we should be clear to execute the agreement … ” ( /d.) Accordingly, the HH Defendants’ motion to dismiss the second cause of action on these grounds is denied.”

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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.