Salamone v Deily & Glastetter, LLP 2024 NY Slip Op 31569(U) May 3, 2024
Supreme Court, New York County Docket Number: Index No. 160104/2022
Judge: Shlomo S. Hagler is a complicated legal malpractice case arising from a $2 Million dollar demand note, sale of Apple stock, questions of usury and a few appellate decisions. In sum, Plaintiff got his loan back, failed to get a bonus on the loan and was determined not to have a good legal malpractice claim.

“Plaintiff engaged defendants to provide counseling, advice and drafting services in connection with a loan and subsequent forbearance agreement entered into between plaintiff and non-parties EIP Global Fund LLC (“EIP”) and Sridhar Chityala (“Sridhar”) (the “Non-Party Borrowers”).

On or about October 10, 2019, non-party Sridhar approached plaintiff and requested a 30-day loan of $5 million dollars (NYSCEF Doc. No. 1 [complaint],, 11). 1 After negotiations, plaintiff agreed to loan non-party Sridhar and his company EIP, $2 million by liquidating a portion of his stock in Apple, Inc. (“Apple”) (id.). Plaintiff engaged defendants to provide professional services in connection with said loan and asked defendants to draft a loan in the form of a Demand Note. The Demand Note provided that the Non-Party Borrowers would pay plaintiff the $2 million on demand or within thirty days, in addition to interest at a rate of ten percent per annum (id., ,r, 17-18). The Demand Note was executed on October 11, 2019 and plaintiff wired the funds to the Non-Party Borrowers on that day (id.,, 18).
The Non-Party Borrowers failed to pay back the Demand Note within the required thirty
days (id.,, 19). After numerous discussions between plaintiff and the Non-Party Borrowers, plaintiff agreed to not immediately file suit to collect on the loan and to provide the Non-Party Borrowers with additional time to repay the Demand Note (id., ,r 20). In connection therewith, plaintiff extended the deadline to repay the loan to December 17, 2019. The Non-Party Borrowers also agreed to “pay [p ]laintiff an additional $300,000 to compensate him [plaintiff] for the lost opportunity damages as a result of not being able to repurchase the Apple stock [plaintiff] liquidated to fund the 30-day loan” (id). Defendants counseled plaintiff to execute a forbearance agreement which included an increased interest rate of twenty per cent per annum, and the $300,000 which was referred to in the agreement as a Forbearance Fee (id., ,r 23).2

“Despite due demand, and repeated promises and assurances,” the Non-Party Borrowers failed to pay plaintiff the amounts due and owing by the extended deadline (id., , 26). As a result, plaintiff commenced an action on January 16, 2020 against the Non-Party Borrowers under Index Number 6503 7 4/2020 asserting six causes of action (“Borrower Litigation”) (id., ,27). On February 18, 2020, the Non-Party Borrowers filed a pre-answer motion to dismiss in the Borrower Litigation on grounds, inter alia that the Forbearance Fee was usurious rendering the Forbearance Agreement void (id,~ 28)””

“Giving plaintiff the benefit of every possible favorable inference, the complaint fails to
state a cause of action for legal malpractice. To begin, “an attorney is obligated to know the law relating to the matter for which he/she is representing a client and it is the attorney’s duty, if he has not knowledge of the statutes, to inform himself, for, like any artisan, by undertaking the work, he represents that he is capable of performing it in a skillful manner” (Fielding v Kupferman, 65 AD3d 437,440 [1st Dept 2009] [internal quotation marks and citations omitted]). Here, plaintiff complains that defendants failed to exercise the ordinary, reasonable skill and knowledge commonly possessed by a member of the legal community by drafting a facially usurious Forbearance Agreement (NYSCEF Doc No. 1 [complaint],~ 39). Plaintiff alleges further that “but for” defendants’ deficient drafting of said agreement, plaintiff would have immediately pursued his rights under the Demand Note and in addition would have separately
documented an agreement to compensate him for his lost opportunity to immediately repurchase Apple stock. Plaintiff argues that the part of the Forbearance Agreement that provided for a Forbearance Fee was intended to provide such reimbursement.”

“With respect to plaintiffs allegation of damages, the complaint alleges that he sustained damages because he (i) would have enforced his rights under the Demand Note; (ii) would have separately documented an agreement to compensate plaintiff for his lost opportunity, (iii) and incurred legal fees in minimizing the damage caused by the usurious Forbearance Agreement (NYSCEF Doc. No. 1 [complaint], ,r 40).

As to damages incurred on collecting on the Demand Note, plaintiff suffered no damages. On November 9, 2020, Justice Sherwood entered a Judgment in plaintiffs favor in the amount of $2,262,702.44 representing the total amount of the principal the Non-Party Borrowers owed to plaintiff under the Demand Note ($2 million), plus interest and attorneys’ fees and costs (NYSCEF Doc. No. 8). In addition, a Satisfaction of Judgment was filed on February 24,2021 stating that the Judgment was paid in full and the sum of $0.00 remains unpaid (NYSCEF Doc. No. 9).”

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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.