MVNY Holdings v Esses Law Group, LLC  2020 NY Slip Op 33380(U) October 15, 2020 Supreme Court, New York County Docket Number: 153853/2019 Judge: Carol R. Edmead ended very badly for plaintiffs.  Not only did they lose a slew of money in the underlying real estate transaction, but they found out when they went to sue the defendant attorneys that they lacked standing!  Judge Edmead explains:

“The lack of an attorney-client relationship bars a legal malpractice claim (Seaman v Schulte Roth & Zabel LLP, 176 AD3d 538, 539 [1st Dept 2019]). Here, CGR argues that documentary
evidence shows the absence of a relationship between CGR and plaintiffs (CPLR § 3211 [a] [1]). Among other things, CGR has provided the engagement letter and notice of appearance, both of which show that the firm was hired by the Romanoff parties alone and that CGR did not commence its representation of these parties until after the third-party action in Village Green had begun. CGR also shows, through court filings, that plaintiffs in this action engaged in motion practice in Village Green, and that they were represented by other counsel. In response, plaintiffs provide no evidence indicating that they ever communicated with CGR or relied on its guidance.  Moreover,  they do not assert that CGR “either affirmatively led [plaintiffs] to believe that they were acting as [their] attorney[s] or knowingly allowed [them] to proceed under that misconception” (Moran, 32 AD3d at 911). Even if plaintiffs held the subjective belief that CGR was their counsel – and plaintiffs have not shown that they held this belief – that would have been insufficient to establish an attorney-client relationship (see Matter of Segal v Five Star Elec. Corp., 165 AD3d 613, 613 [1st Dept 2018], lv denied 32 NY3d 919 [2019]). For the same reasons, plaintiffs fail to state a cause of action for legal malpractice, thus warranting dismissal under CPLR § 3211 (a) (7) as well (see Seaman, 176 AD3d at 539). Like CGR, Esses has shown that it did not represent plaintiffs in the Village Green litigation – in Esses’ motion, through copies of plaintiffs’ motion to intervene and proposed pleading in Village Green and the affidavit of Leo Esses (see Prudential-Bache Metal Co. v Binder, 121AD2d923, 926 [1st Dept 1986] [“When evidentiary material submitted in support of a complaint demonstrates that a material fact claimed by the plaintiff is not a fact at all, there is no bar to a dismissal of the complaint for failure to state a cause of action.”]; accord Ladera Partners, LLC v Goldberg, Scudieri & Lindenberg, P.C., 157 AD3d 467, 467 [1st Dept 2018]). Defendants also point out that the use of the words “on behalf of’ all ofVGM’s shareholders in the caption means that the claims, in part, are derivative (see Valyrakis v 346 West 48th St. Haus. Devel. Fund Corp., 161Ad3d404, 405 [1st Dept 2018]), and that this does not mean that the plaintiffs, in their own capacities, were clients of defendants in Village Green. Logic also militates against plaintiffs’ argument. If plaintiffs were correct, every unnamed shareholder in every shareholder’s derivative suit could assert a malpractice claim against the named shareholders’ attorneys in those actions.”