Scarola Malone & Zubatov LLP v Ellner 2021 NY Slip Op 31199(U) April 8, 2021 Supreme Court, New York County Docket Number: 651324/2017 Judge: Anthony Cannataro pits a “sophisticated businessman, with degrees from Wharton and the University of Chicago” against the attorneys in a legal malpractice counterclaim. Sophisticated businessman loses.
“Where a sophisticated client imposes a strategic decision on counsel, the client’s action absolves the attorney from liability for malpractice (Town of North Hempstead v Winston & Strawn, LLP, 28 AD3d 746 ; Stolmeier v Fields, 280 AD2d 342 ). Additionally, with regard to strategic decisions “the selection of one among several
reasonable courses of action does not constitute malpractice” (Rosner v Paley, 65 NY2d 736, 738 ). “Attorneys may select among reasonable courses of action in prosecuting their clients’ cases without thereby committing malpractice … so that a purported malpractice claim that amounts only to a client’s criticism of counsel’s strategy may be dismissed” (Dweck Law Firm, LLP v Mann, 283 AD2d 292, 293 [2001 ]). Hindsight arguments concerning selection of one of several reasonable courses of action do not state a viable cause of action for malpractice (Brookwood Cos., Inc. v Alston & Bird LLP, 146 AD3d 662, 667 ).
In this case, the Lightbox defendants’ counterclaims stem from the Scarola firm’s representation of them in a business dispute and litigation related to a joint venture agreement between the Lightbox defendants and a nonparty entity named 3rd Home Limited. The counterclaims allege that the Scarola firm made several mistakes during the course of its representation of the Lightbox defendants, specifically: failing to advise the Lightbox defendants to accept a potential buyout from 3rd Home Limited; recommending that the Lightbox defendants litigate in an “uber aggressive” manner rather than advising them to settle, causing the Lightbox defendants to “waste” money Lightbox’ s allegations relate primarily to strategic decisions made during the course of the Scarola firm’s representation. Regarding the allegations that the Scarola firm took an overly aggressive approach, the documentary evidence shows that the
Lightbox defendants consistently rejected attempts to settle, for reasons having nothing to do with any advice received from the Scarola firm. While Mr. Ellner occasionally expressed interest in settling with 3rd Home Limited, when he did so, it was his settlement demands that could best be characterized as aggressive, and he rejected actual offers of settlement. Additionally, it is clear from the pleadings that when the Lightbox defendants retained the Scarola firm, they wanted to “preserve and grow” the joint venture business and were not interested in a buyout.”