RTW Retailwinds, Inc. v Colucci & Umans 2023 NY Slip Op 00831 Decided on February 14, 2023 Appellate Division, First Department represents a rare instance of the Appellate Division examining all of the reasons why a legal malpractice case is dismissed early on in a case. There were three or more acts by the defendant attorneys which were pled, with one claim remaining in the case after appeal.

“Order, Supreme Court, New York County (Joel M. Cohen, J.), entered on or about August 13, 2021, which, to the extent appealed from as limited by the briefs, granted defendants’ motions to dismiss the legal malpractice claim as against them, unanimously modified, on the law and the facts, to the extent of denying the motions as to plaintiffs’ claim based on defendants’ failure to produce discovery and present evidence at trial relevant to a “crowded field” defense, and the malpractice claim reinstated to that extent only, and otherwise affirmed, without costs.

Plaintiffs commenced this legal malpractice action on or about June 1, 2020 against defendant law firms and some of the individual attorneys who had represented plaintiffs before and/or during a federal copyright infringement action that resulted in a judgment against plaintiffs. Plaintiffs appeal from Supreme Court’s order entered on or about August 13, 2021, to the extent that it granted defendants’ motions to dismiss the legal malpractice cause of action against all defendants.”

“Third, documentary evidence establishes that defendants’ decision not to call witnesses, including plaintiffs’ employees to whom defendants had referred in opening statements, was a reasonable strategic decision and not malpractice (see Hand v Silberman, 15 AD3d 167, 167 [1st Dept 2005], lv denied 5 NY3d 707 [2005]). The supporting evidence includes defendants’ written legal opinion, delivered to plaintiffs’ in-house counsel just prior to the close of plaintiff’s case in the copyright infringement action, which examined the pros and cons of calling the witnesses. That correspondence advised that the risks of putting on plaintiffs’ witnesses included likely credibility issues and that evidence indicating plaintiffs’ “bad faith” use of the NY&C VELOCITY mark, which was not consistent with defendants’ original advice, might be brought out at trial. Moreover, plaintiffs’ claim that the outcome of the trial might have been favorable if defendants had presented witnesses is entirely speculative.

However, contrary to the motion court’s conclusions, and viewing the evidence in the light most favorable to plaintiffs, the documentary evidence submitted by defendants did not utterly refute plaintiffs‘ allegations that defendants failed to produce discovery relevant to a “crowded field” affirmative defense and that this led to the exclusion of certain evidence at trial. Moreover, defendants failed to present any evidence supportive of plaintiffs’ “crowded field” defense (see e.g. RiseandShine Corp. v PepsiCo, Inc., 41 F4th 112, 123 [2d Cir 2022][“[I]n a crowded field of similar marks, each member of the crowd . . . is relatively weak in its ability to prevent use by others in a crowd”] [internal quotation marks omitted]). Accordingly, defendants have not conclusively established a defense to these claims as a matter of law (see CPLR 3211[a][1]; Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314[*3], 326 [2002]). Therefore, the motion court should not have dismissed these claims. Contrary to defendants’ contention, at this early stage of the action, it is not speculative for plaintiffs to allege that, but for defendants’ negligence in this regard, the jury would have returned a favorable verdict, particularly where plaintiff had identified specific acts and omissions by defendants that resulted in documents relevant to a “crowded field” defense not being placed before the jury. The documentary evidence proffered by defendants also did not otherwise establish, as a matter of law, that the allegedly negligent acts or omissions of defendants in this regard were harmless.”