Both Collateral Estoppel and Res Judicata were applied to two different lawsuits each arising from a Bankruptcy Proceeding.  Plaintiff loses all around in Bauhouse Group I, Inc. v Kalikow  2021 NY Slip Op 00001
Decided on January 05, 2021 Appellate Division, First Department.

“In the first order, the court correctly concluded that plaintiffs’ legal malpractice claim was barred by the doctrine of collateral estoppel in light of the prior findings in a related bankruptcy proceeding. The doctrine of collateral estoppel will “preclude[] a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same” (Ryan v New York Tel. Co., 62 NY2d 494, 500 [1984]). The court properly concluded that plaintiffs were in privity with the debtors in the bankruptcy proceeding. Factual claims concerning the validity of certain loan transactions were asserted and decided against the plaintiffs in the bankruptcy proceedings. These are the same loan transactions and factual allegations underlying the claims made in the malpractice action.

Plaintiffs’ argument that collateral estoppel does not apply to these actions because defendants were not parties to the bankruptcy proceeding is not persuasive. The law is clear that a party seeking to invoke the doctrine of collateral estoppel need not have been a party to the prior action (Vavolizza v Krieger, 39 AD2d 446, 447-448 [1st Dept 1972], affd 33 NY2d 351 [1974]). Plaintiffs’ argument that their claims are not barred by collateral estoppel because there was no claim for legal malpractice before the Bankruptcy Court also fails. As the court found, collateral estoppel precludes the relitigation of factual issues that were necessarily decided in a prior action against the same party or its privies, regardless of whether the causes of action were the same (Korea First Bank of N.Y. v Noah Enters., Ltd., 12 AD3d 321, 323 [1st Dept 2004], lv denied 4 NY3d 710 [2005] ).”

“The second order is subject to dismissal for many of the same reasons as the first order. Most fundamentally, however[*2], the court there properly applied the doctrine of res judicata to preclude plaintiffs from re-litigating the same exact claims in the second action that were raised and dismissed, with prejudice, in the first action. The doctrine of res judicata dictates that “once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy” (Marinelli Assoc. v Helmsley-Noyes Co., 265 AD2d 1, 5 [1st Dept 2000]). The requirements of res judicata are plainly met here. The first action — which involved the exact same parties, transactions, and claims — was brought to a final conclusion by the first order, wherein the complaint was dismissed with prejudice. It is indisputable that plaintiffs’ claims in the second action arise out of the same facts and are, in fact, identical to those alleged in the first action. Considering the allegations of the bankruptcy proceeding, the second action was in fact plaintiffs’ third attempt to recover based upon the same set of facts arising from the same transaction.”

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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.