Mid City Elec. Corp. v Peckar & Abramson 2023 NY Slip Op 01085 Decided on March 1, 2023 Appellate Division, Second Department cleanly lays out the most unique issue that arises in legal malpractice (and not in other) settings: “But for” the negligence, would there have been a better result? This is the “case within a case” legal malpractice issue. Here, the question is whether a missed appeal would have been won.

“The plaintiffs, Mid City Electrical Corporation (hereinafter Mid City) and its owners, Terric McFarlin and John J. Holzer, commenced this action, inter alia, to recover damages for legal malpractice against, among others, the defendants Peckar & Abramson, Charles E. Williams III, and Christopher Bletsch (hereinafter collectively the defendants). The plaintiffs alleged that by letter [*2]dated September 18, 2015, the New York State Department of Transportation proposed to terminate the status of Mid City as a disadvantaged business enterprise (hereinafter DBE). Thereafter, Mid City retained the services of the defendants to litigate a challenge to that proposal. After unsuccessfully appealing to the New York State Department of Transportation directly, the defendants commenced a proceeding pursuant to CPLR article 78 on behalf of Mid City to stay the termination of its status as a DBE. That proceeding was dismissed on the ground that Mid City failed to file an appeal with the United States Department of Transportation. The order and judgment dismissing that proceeding was affirmed by the Appellate Division, First Department (see Matter of Mid City Elec. Corp. v Metropolitan Transp. Auth., 148 AD3d 497, 498).”

“With respect to the legal malpractice cause of action insofar as asserted by Mid City against the defendants, the complaint was required to contain factual information showing that the attorneys’ actions, inter alia, proximately caused Mid City to sustain actual and ascertainable damages (see Gorbatov v Tsirelman, 155 AD3d 836, 838). “‘An attorney’s conduct or inaction is the proximate cause of a plaintiff’s damages if but for the attorney’s negligence, the plaintiff would have succeeded on the merits of the underlying action, or would not have sustained actual and ascertainable damages'” (Nill v Schneider, 173 AD3d 753, 755, quoting Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 50). “Conclusory allegations of damages or injuries predicated on speculation cannot suffice for a malpractice action, and dismissal is warranted where the allegations in the complaint are merely conclusory and speculative” (Denisco v Uysal, 195 AD3d 989, 991 [internal quotation marks omitted]).

Here, even accepting the facts alleged in the complaint as true, and according Mid City the benefit of every possible favorable inference (see Leon v Martinez, 84 NY2d 83, 87), the complaint failed to plead specific factual allegations demonstrating that, but for the defendants’ alleged negligence, there would have been a more favorable outcome regarding the termination of Mid City’s status as a DBE (see Rudovic v Law Off. of Timothy A. Green, 200 AD3d at 815; Denisco [*3]v Uysal, 195 AD3d at 991; Cusimano v Wilson, Elser, Moskowitz, Edelman & Dicker LLP, 118 AD3d 542, 542). The allegation that Mid City lost the opportunity to pursue an administrative appeal, without any indication that the appeal would be successful, is insufficient to state a claim (see Coccia v Liotti, 70 AD3d 747, 754). Similarly, the allegation that Mid City would have been recertified as a DBE had the defendants requested a hearing, rather than having filed a written response to the initial letter proposing termination of its status as a DBE, is speculative and conclusory (see Densico v Uysal, 195 AD3d at 991).

Accordingly, the Supreme Court properly granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a) to dismiss the legal malpractice cause of action insofar as asserted by McFarlin and Holzer against them, but should have granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a) to dismiss the legal malpractice cause of action insofar as asserted by Mid City against them.”