Federal Ins. Co. v Lester Schwab Katz & Dwyer, LLP  2022 NY Slip Op 07149  Decided on December 15, 2022 Appellate Division, First Department is a case by the insurer versus its attorney arising from what was most likely a personal injury claim.  Overlooking the actual email sent by the law firm, Plaintiff sued for fraud.  That email ended the fraud claim, but the legal malpractice claim remains alive.

“Supreme Court correctly denied LSKD’s motion to dismiss the cause of action for legal malpractice. The verified complaint sufficiently alleges specific facts from which, if true, a factfinder could reasonably infer that, but for LSKD’s alleged negligence in conducting the insureds’ defense in the underlying action, plaintiff insurer would have achieved a better result in that litigation than the $4 million settlement to which it ultimately agreed. Stated otherwise, the question of proximate cause is not resolvable on this motion to dismiss (see Schroeder v Pinterest Inc., 133 AD3d 12, 26 n 7 [1st Dept 2015]).

The causes of action for fraud and negligent misrepresentation, however, should have been dismissed pursuant to CPLR 3211(a)(1). Both of these claims are based on the contention that LSKD obtained its assignment to defend the insureds in the underlying action by misrepresenting or omitting to disclose the fact that it had a conflict of interest as to the City of New York, a codefendant in the underlying action. This conflict prevented LSKD from pursuing a cross claim against the City, to the detriment of the insureds and their insurers. The theory that LKSD misrepresented or failed to disclose the existence of the conflict is conclusively refuted by documentary evidence, specifically, an April 16, 2013 email from LSKD to, inter alia, the claims adjuster who retained it, plainly stating:

“As discussed, we will accept this new assignment with the understanding that we will not assert cross claims against the City of New York. Our firm represents the City of New York in other matters and we are conflicted from asserting claims against them.”

In the context of the foregoing express disclosure of the conflict and consequent inability of LKSD to pursue a cross claim against the City, the communication of the same date that a search for possible conflicts had yielded negative results was not misleading. To the extent plaintiff contends that LKSD inaccurately minimized the

viability of a potential cross claim against the City, the complaint fails to allege particularized facts that this advice was given with deceptive intent so as to support a fraud claim.”

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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.