Lee v Leeds, Morelli & Brown, P.C. 2024 NY Slip Op 06624 Decided on December 24, 2024 Appellate Division, Second Department is another case against the law firm of Leeds, Morelli & Brown, P.C., which developed a method of suing large companies on behalf of their employees, which drew at least two legal malpractice cases against it. In this case, as in Dowe v. Prudential Financial, Inc. and Leeds Morelli & Brown, the claims were for legal malpractice against the lawyers.

“In a putative class action, inter alia, to recover damages for legal malpractice and fraud, the plaintiff Cheryl Lee and purportedly Charles Roe appeal from an order of the Supreme Court, Kings County (Ingrid Joseph, J.), dated September 30, 2020. The order, insofar as appealed from, upon reargument, adhered to a prior determination in an order of the same court dated January 8, 2020, granting those branches of the motion of the defendants Leeds, Morelli & Brown, P.C., Leeds Morelli & Brown, LLP, Leeds, Morelli & Brown, Lenard Leeds, Steven A. Morelli, Jeffrey K. Brown, James Vagnini, Frederick David Ostrove, and Robert John Valli, Jr., which were pursuant to CPLR 3211(a) to dismiss the first, third, and sixth causes of action and denying, as academic, a cross-motion to substitute the administrator of the estate of Charles Roe as a plaintiff in place of Charles Roe.”

“On March 23, 2005, Lee and Roe commenced this action, individually and purportedly on behalf of class members similarly situated, against LMB, Leeds, Morelli & Brown, P.C., Leeds Morelli & Brown, LLP, six of LMB’s attorneys (hereinafter collectively the LMB defendants), and Bear Stearns, among others. The complaint alleged that LMB secretly entered into an agreement with Bear Stearns to resolve alleged employment discrimination claims through a global settlement process that would cap recovery by employees and protect Bear Stearns from negative publicity and liability for a number of employment discrimination claims, including claims of retaliation against employees who pursued employment discrimination claims against Bear Stearns. The complaint further alleged that, upon reaching such an agreement with Bear Stearns for a large payment to LMB, LMB recruited Lee, Roe, and other employees with valid employment discrimination claims, falsely agreeing to litigate the employment discrimination claims, and steered Lee, Roe, and the other employees into the global settlement process where they were advised to waive judicial and administrative remedies for a settlement amount that ultimately was very small. The first, third, and sixth causes of action sought to recover damages for breach of fiduciary duty, fraud, and legal malpractice, respectively, against the LMB defendants.

During the pendency of the action, Roe died. On February 14, 2018, Deborah Roe (hereinafter the administrator) obtained letters of administration to administer Roe’s estate.

Thereafter, the LMB defendants and Bear Stearns separately moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against each of them. Lee, and purportedly Roe, cross-moved to substitute the administrator as a plaintiff in place of Roe. In an order dated January 8, 2020, the Supreme Court granted the motions of the LMB defendants and Bear Stearns, and denied, as academic, the cross-motion.

Lee, and purportedly Roe, moved, among other things, for leave to reargue the opposition to those branches of the LMB defendants’ motion which were pursuant to CPLR 3211(a) to dismiss the first, third, and sixth causes of action and the cross-motion. In an order dated September 30, 2020, the Supreme Court, inter alia, upon reargument, adhered to its prior determination granting those branches of the LMB defendants’ motion and denying the cross-motion. Lee, and purportedly Roe, appeal.

“The death of a party divests the court of jurisdiction and stays the proceedings until a proper substitution has been made pursuant to CPLR 1015 (a)[, and] any determination rendered without such substitution will generally be deemed a nullity” (Singer v Riskin, 32 AD3d 839, 839-840 [citations omitted]; see Hemmings v Rolling Frito-Lay Sales, LP, 220 AD3d 754, 757; Vicari v Kleinwaks, 157 AD3d 975, 976). Here, the Supreme Court erred in considering the separate motions of the LMB defendants and Bear Stearns pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against each of them because the motions were made after Roe’s death and prior to any substitution of a personal representative of his estate (see id. § 1015; Matter of Einstoss, 26 NY2d 181; Neuman v Neumann, 85 AD3d 1138, 1139; Manto v Cerbone, 71 AD3d 1099, 1100). Accordingly, so much of the order dated January 8, 2020, as granted the separate motions of the LMB defendants and Bear Stearns pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against each of them must be vacated as a nullity (see CPLR 1015; Matter of Einstoss, 26 NY2d 181; Neuman v Neumann, 85 AD3d 1138), and the appeal taken by the plaintiff Cheryl Lee from so much of the order dated September 30, 2020, as, upon reargument, adhered to the determination in the order dated January 8, 2020, granting those branches of the LMB defendants’ motion which were pursuant to CPLR 3211(a) to dismiss the first, third, and sixth causes of action must be dismissed.

Furthermore, the death of a party also terminates an attorney’s authority to act on behalf of the deceased party (see Vicari v Kleinwaks, 157 AD3d at 976; Vapnersh v Tabak, 131 AD3d 472, 474; Lewis v Kessler, 12 AD3d 421, 422). Thus, Roe’s former attorneys lacked the authority to file either the cross-motion or this appeal on his behalf. Accordingly the appeal purportedly taken on Roe’s behalf must be dismissed (see Vicari v Kleinwaks, 157 AD3d 975).”

“Moreover, Lee established potential merit to the action sufficient to warrant substitution. In this respect, and contrary to the LMB defendants’ contention, the legal malpractice cause of action was not time-barred. A cause of action to recover damages for legal malpractice must be commenced within three years from the time of accrual (see CPLR 203[a]; 214[6]). “A legal malpractice claim accrues when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court” (McCoy v Feinman, 99 NY2d 295, 301 [internal quotation marks omitted]). Here, the legal malpractice claims accrued, at the latest, on March 6, 2002, and March 7, 2002, when Lee and Roe, respectively, executed agreements to settle their employment discrimination claims and release Bear Stearns for specified amounts (see Zorn v Gilbert, 8 NY3d 933, 934; Amodeo v Kolodny, P.C., 35 AD3d 773, 774). Pursuant to the doctrine of continuous representation, the statute of limitations is tolled for the period following the alleged malpractice until the attorney’s ongoing representation of the client on the particular matter is completed (see Grace v Law, 24 NY3d 203, 212; Shumsky v Eisenstein, 96 NY2d 164, 167-168; Farage v Ehrenberg, 124 AD3d 159, 164). Here, Lee established that LMB’s representation on the employment discrimination claims continued at least through March 29, 2002 (see Zorn v Gilbert, 8 NY3d at 934; Shumsky v Eisenstein, 96 NY2d at 170-171; Amodeo v Kolodny, P.C., 35 AD3d at 774; see also Grace v Law, 24 NY3d at 212). The legal malpractice cause of action, therefore, was not time-barred.

Since the action has potential merit, and in light of the strong public policy favoring the resolution of actions on the merits and the lack of any prejudice to the defendants, the cross-motion to substitute the administrator of the estate of Charles Roe as a plaintiff in place of Charles Roe should have been granted (see Hemmings v Rolling Frito-Lay Sales, LP, 220 AD3d at 757; Petion v New York City Health & Hosps. Corp., 175 AD3d at 520; Tokar v Weissberg, 163 AD3d at 1033; Reed v Grossi, 59 AD3d at 511).”