Plaintiff suffered a large loss in arbitration.  Several documents could have been offered, but were not.  Malpractice?

Supreme Court dismisses the claim in All Vision LLC v Paduano & Weintraub LLP  2022 NY Slip Op 30464(U) February 9, 2022 Supreme Court, New York County Docket Number: Index No. 653605/2021 Judge: Andrew Borrok finding that Federal Court considered the gist of the documents even absent the actual paper version of either of them.

“Upon the foregoing documents and for the reasons set forth on the record (2.7.22), Paduano & Weintraub LLP and Leonard Weintraub’s (collectively, the Defendants) motion pursuant to CPLR 3211 (a)(l) and (7) to dismiss must be granted. The plaintiff’s malpractice claim is based on the mistaken theory that the failure to submit either (i) the November 2016 Termination Letter or (ii) the 2017 audited financial statements would have changed United Stated District Court Judge (ret.) Shira A Scheindlin’s decision in an arbitration pursuant to which she, among other things, awarded $4,828,776.34 with post-judgment interest at the daily rate of $741.44 in favor of Mr. Micsak and $1,822,781.33 with post-judgment interest at the daily rate of $335.86 in favor of Mr. Andel and against All Vision LLC (All Vision), and $637,548 in favor of All Vision and against Mr. Andel. On the record before the court, each and every single of Mr. Andel’s alleged breaches set forth in the 2016 Termination Letter were squarely before Judge Scheindlin.

With respect to the claim that he breached the Contractor Agreement, Judge Scheindlin found that the agreement required notice and cure and Mr. Andel was provided with neither. Indeed, she found that Mr. Andel provided notice and an opportunity to cure under the Contractor Agreement that the plaintiff breached by failing to provide him his stock tracking agreement.

With respect to the Severance Agreement, Judge Scheindlin specifically found that there was no breach here either because the plaintiff was aware of Mr. Andel’s conduct when it occurred and may have condoned it and otherwise benefitted from it. Finally, with respect to the breach of fiduciary duty claim, Judge Sheindlin held that the plaintiff failed to meet its burden in showing that Mr. Andel in any way personally benefitted from the alleged conduct. Thus, the contents of the November 2016 Letter (i.e., the conduct and alleged breaches)  were considered by Judge Scheindlin, and the failure to provide the actual November 2016 Letter would not have changed the result. Judge Scheindlin’ s observation in footnote 5 in the decision that she does not see a retroactive termination in the record which the November 2016 Letter was nothing more than her observation that the plaintiff had seemed to rely solely on the breach of the Severance Agreement for the basis that Mr. Andel had forfeited his tracking stock which Severance Agreement required Mr. Andel to be in good standing under the Contractor Agreement. But, as stated above, because she specifically found that notice was required under the Contractor Agreement and that notice was not given, the result would have been the same, as no cure could have been effected as the November 2016 Letter was sent 6 months after termination.

The failure to submit the 2017 financial statements also can not serve as a predicate for a malpractice claim here because of a lack of proximate cause. As alleged, the plaintiff hired
replacement counsel after the initial award was issued and prior to the time that the final award was made. It is undisputed that the plaintiff made no attempt to submit the 2017 financial statements and otherwise made a strategic decision not to even attempt to expand the record. Had they made this request and Judge Scheindlin denied it then the plaintiff may well be able to address the nexus between the defendants’ failure to submit such statements and the impact it may have had on Judge Scheindlin’s decision. Stated differently, the claim fails because of the intervening independent representation of the replacement lawyers and their decision to make no attempt to have Judge Scheindlin consider the 2017 financial statements. As such, the nexus is simply too tenuous because Judge Scheindlin may well have permitted the submission of the 2017 financial statements. “