Mensch v Calogero 2023 NY Slip Op 30621(U) February 28, 2023 Supreme Court, New York County Docket Number: Index No. 155795/2022 Judge: Dakota D. Ramseur reaches an unusual outcome where the legal malpractice claim is dismissed yet the breach of contract claim remains viable.
“According to the complaint, on October 9, 2017, plaintiff retained defendant Cohen Clair, Lans Greifer, Thorpe Rottenstreich, LLP (law firm), including Michael Calogero and Bernard E. Clair in the underlying divorce action between plaintiff and her ex-husband in New York Supreme Court, New York County, entitled Peter Mensch v. Louise Mensch (index no. 309381/2017). The parties in the underlying divorce action contested the division of their assets. The divorce action settled pursuant to the July 19, 2019, filing of the so-ordered stipulation, providing for, among other things, the division of the parties’ marital property.
Plaintiff alleges that she discovered certain state and federal income tax overpayments in the total amount of $1.1 million made from accounts that were, at the time of the overpayment, parts of the marital estate, after entering into the stipulation. Plaintiff alleges that the law firm’s failure to discover the tax refund amounts and the omission of those amounts in the stipulation constitute legal malpractice. Plaintiff further alleges that defendants failed to adequately divide the estate as required by the retainer agreement between plaintiff and defendants. The retainer agreement drafted by defendants and executed by both parties, describes the scope of services to
be provided by defendants to plaintiff, including that defendants “[ w ]ill explain to you the laws pertinent to your situation, available options and the attendant risks.”
Plaintiff commenced this action alleging that defendants, through omission and negligent acts, failed to advise plaintiff that there was $1. l million in tax overpayments made from accounts which were part of the marital estate or that a potential tax refund would be an asset class to investigate. Plaintiff further alleges that completely failed to take into account any possibility of marital funds being held by any tax authority in the drafting and negotiation of the Settlement Agreement. As a result, plaintiff alleges, she entered into the settlement agreement without knowing the true value of the marital assets. Had she known, plaintiff alleges, she would not have ent.ered into the agreement.
In relevant part, the stipulation states that defendants have engaged in extensive
discovery in the underlying action. The stipulation further states that:
“[b ]oth parties expressly acknowledge that after due deliberation and careful
analysis, they have instructed their attorneys not to continue to trial in this
Action, or to seek further disclosure, inspection, depositions, or investigation of
the other’s assets and income. Each party acknowledges that he/she is sufficiently
satisfied with the disclosure received to date”.”
” Here, plaintiff states a cause of action for legal malpractice against defendants by alleging that plaintiff retained defendants to represent her interest in the underlying divorce action against her ex-husband, that defendants were negligent in failing to conduct a basic line of necessary investigations and inquiry regarding tax liabilities or obligations of the marital estate, and as a result, defendants were unable to properly advise plaintiff and limited the ability of plaintiff to knowledgeably participate in the negotiations in the division of marital assets-reducing her portion of the assets divided ..However, defendants demonstrate that plaintiffs claim is precluded by the settlement
agreement. In DeGregorio v Bender, 4 AD3d 384, 385 [2d Dept 2004]), Appellate Division, Second Department reversed the lower court’s denial of the defendants’ motion for summary dismissal of plaintiffs claims for legal malpractice, finding that the claim was “[b]elied by the terms of the stipulation and her approval of those terms in open court” (id.). Specifically, the court in DeGregorio determined that “[t]he parties explicitly acknowledged that they had been advised by their respective attorneys of their right to disclosure regarding the value of their property and business interests, that certain disclosure had been conducted, and that to the extent it had not been conducted, they waived their right to any further disclosure” (id. at 385).
Here, like in DeGregorio, the stipulation indicates that plaintiff was satisfied with the
discovery received as of the date of the settlement of the underlying action and further, plaintiff explicitly waived the opportunity to investigate further into the assets that made up the marital estate (see Karakash v Trakas, 163 AD3d 788, 790 [2d Dept 2018] [“stipulation of settlement in the divorce action, and a transcript from the divorce proceeding on the day the stipulation was signed by the parties” … “flatly refuted the plaintiff’s allegation that the defendant had failed to engage in the necessary due diligence to determine.the identity and value of the marital assets involved in the underlying divorce action”]).”
“The Court declined to dismiss plaintiff’s claim for breach of contract. Defendants’
arguments concerning plaintiffs breach of contract claim are focused on the circumstance where a legal malpractice claim is predicated upon the same fact and seeks the same relief as a breach of contract claim (see Sabo v Alan B. Brill, P.C., 25 AD3d 420, [1st Dept 2006]; Schulte Roth & Zabel, LLP v Kassover, 80 AD3d 500,501 [1st Dept 2011]). In those circumstances, the breach of contract duty claim is duplicative and should be dismissed. However, as discussed above, plaintiffs legal malpractice claim is dismissed. As defendants’ do not argue an independent basis
to dismiss the breach of contract claim, that branch of defendants’ motion is denied.”