Strict privity of contract requirements make legal malpractice different from all other types of litigation. Even in products liability, which once rested completely and solely upon privity of contract as a prerequisite, things have loosened. Betz v Blatt, 2022 NY Slip Op 07430 Decided on December 28, 2022 Appellate Division, Second Department, which has a very rich appellate history, and is already widely cited for its previous decisions, defines the “fraud, collusion, malicious acts or other special circumstances” exception to privity.

“After a nonjury trial, the Supreme Court found that the defendant committed legal malpractice with respect to the decedent’s estate, but that the plaintiff did not establish a violation of Judiciary Law § 487. The court awarded the plaintiff damages as against the defendant in the principal sum of $1,856,699.36. The defendant appeals.

Although an attorney representing the executor of an estate, generally, is not liable to the beneficiaries of the estate (see Kramer v Belfi, 106 AD2d 615, 616), as the attorney does not represent the estate itself (see Betz v Blatt, 116 AD3d at 816; Matter of Hof, 102 AD2d 591, 593), when fraud, collusion, malicious acts, or other special circumstances exist, an attorney may be liable to those third parties, even though not in privity with them, for harm caused by professional negligence (see Davis v Farrell Fritz, P.C., 201 AD3d 869, 871; Betz v Blatt, 160 AD3d at 698).

Here, although the defendant was not in privity with the estate, the evidence nevertheless established the existence of special circumstances subjecting him to liability (see Betz v Blatt, 160 AD3d at 698; Betz v Blatt, 116 AD3d at 816). At trial, the defendant admitted that, even though he was “not competent to do accountings,” he did not arrange or direct the former executor to arrange for a professional accounting. Further, despite his admitted unfamiliarity with probate law, it was apparent to the defendant that the proposed accounting he circulated on behalf of the [*2]former executor was “terrible.” Nevertheless, the defendant neither alerted the Surrogate’s Court nor opposing counsel to the accounting problem.

Significantly, the defendant admitted that he was aware that the payment of estate funds by the former executor to the former executor and the former executor’s children amounted to self-dealing, but that the defendant took no action other than providing advice to the former executor—which the defendant further admitted he knew would be ignored. Moreover, although the defendant testified that the former executor’s conduct was “shocking,” he nonetheless continued to disburse estate funds to the former executor—including funds from the sale of a parcel of real property which formed the estate’s primary asset. The defendant’s failure to notify the Surrogate’s Court or withdraw as counsel upon discovering the self-dealing and misconduct of the former executor, together with the fact that the defendant fostered the former executor’s self-dealing and misconduct by continuing to disburse estate assets to the former executor despite his knowledge that the former executor was engaging in self-dealing and looting, constitutes the type of “fraud, collusion, malicious acts or other special circumstances” for which an attorney may be held liable to third parties not in privity (Betz v Blatt, 160 AD3d at 698).

“Damages in a legal malpractice action are designed ‘to make the injured client whole'” (Marinelli v Sullivan Papain Block McGrath & Cannavo, P.C., 205 AD3d 714, 716, quoting Campagnola v Mulholland, Minion & Roe, 76 NY2d 38, 42). “‘The plaintiff is required to plead actual, ascertainable damages that resulted from the attorneys’ negligence'” (Marinelli v Sullivan Papain Block McGrath & Cannavo, P.C., 205 AD3d at 716, quoting Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 847). Here, the plaintiff presented ample evidence establishing both her damages and the defendant’s contribution to them.”

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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.