Cutie Pie Baby Inc. v Sasson Law PLLC  2022 NY Slip Op 31450(U)  May 2, 2022 Supreme Court, New York County Docket Number: Index No. 655055/2021 Judge: Margaret Chan is an interesting, and relatively rare application of Grace v. Law,  24 NY3d 203 (2014).  In a family setting, two of the family seek to remove the third member.  They did so in a manner which was found to be incorrect, and led to an arbitration.

“On August 19, 2021, plaintiffs filed this action asserting two legal  malpractice claims~ne against Sasson and the second against Akin Gump (NYSCEF # 1,  49-57; 58·67). The complaint alleges that defendants committed legal malpractice by failing to advise plaintiffs to send notice of the Special Meeting to JY which caused damages to plaintiffs (id., , 55, 67). Specifically, the complaint seeks to recover $4,844,451 consisting of (1) $2,186,932 for JY’s legal fees incurred in the arbitration, which CPI was required to pay as part of the arbitration panel’s Final Award, (2) $1,064,992 in legal fees that plaintiffs paid its counsel in connection with the arbitration proceeding, (3) $731,000 in costs and expenses
arising out of the arbitration, (4) $397,343.59 in legal fees paid by plaintiffs to Akin Gump, and (5) $464,513.56 in legal fees to Sasson (id. , 44·48) ”

“To satisfy the pleading requirement for causation, it must be alleged that ‘”but for’ the attorney’s conduct [or nonfeasance], the client would have prevailed in the underlying action or would not have sustained any ascertainable damages” ( Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 272 [1st Dept 2004]; Cosmetics Plus Group, Ltd. v Traub, 105 AD3d at 140). Regarding damages, “to survive a … pre-answer dismissal motion, a pleading need only state allegations from which damages attributable to the defendant’s conduct [or nonfeasance] may be reasonably inferred” (Lappin v Greenberg, 34 AD3d 277, 279 [1st Dept 2006] [internal citations omitted]).

Under these standards, the court finds that the complaint adequately pleads professional negligence based on allegations that Sasson failed to use “the level of skill and knowledge possessed common to my members of the legal profession” by incorrectly advising plaintiffs that JY could be removed at a special meeting and that they were not obligated to provide JY notice of the meeting (NYSCEF # 1,  50, 56). And contrary to Sasson’s position, dismissal is not warranted on the ground that the alleged failure to properly advise plaintiffs was a matter of professional judgment.

Regarding causation, the complaint alleges that because Sasson gave the wrong advice to plaintiffs·· that notice of the Special Meeting to JY was not necessary — CPB was forced into arbitration with JY, and it was Sasson’s improper legal advice on notice that caused the arbitrators ruled in JY’s favor id., ~,52-54). The complaint also alleges that “[a]s a result of [Sasson’s] improper legal advice, Plaintiffs have been damaged in the amount of $4,844,451.00” (id, , 55).

These allegations are sufficient to plead that “but for” the alleged malpractice, plaintiffs would not have been required to incur the legal fees, costs, and expenses associated with the arbitration proceeding. And while JY would have been entitled to payment for the value of his shares even if he were provided with notice, plaintiffs are not seeking to recover the $7,972,511 that the Award required them to pay for JY’s shares. Instead, plaintiffs seek legal fees, costs, and expenses resulting from the allegedly unnecessary arbitration (Rudolph v Shayne, Dachs, Stanisc1: Corker & Sauer, 8 NY3d 438, 443 [2007] [damages in a legal malpractice action may include “litigation expenses incurred in an attempt to avoid, minimize or
reduce the damage caused by the attorney’s wrongful conduct”). ”

“Next, Sasson’s argument that plaintiffs were required to exhaust appellate review in order to bring this action is unavailing, since Sasson has not shown that plaintiffs would have been likely to succeed on the appeal ( Grace v Law,· 24 NY3d 203, 211-212 [2014]; see also Florists’ Mut. Ins. Co., Inc. v Behman Hambelton, LLP, 160 AD3d 502, 502 [1st Dept 2018] [affirming trial court’s finding that an appeal to Workers’ Compensation Board was not required prior to filing a malpractice claim where such appeal was unlikely to succeed]). “