The client didn’t exercise a right of first refusal. Was it the attorney’s fault for not presenting a complete package to the client including a title report, or was it the client’s choice not to proceed?

In Sathyanarayanan v Moberg 2026 NY Slip Op 50237(U) Decided on February 27, 2026
Supreme Court, Suffolk County Pastoressa, J, the court finds for the attorneys.

“This is a legal malpractice action. Defendants, Michael Moberg and Moberg Law Group P.C., represented plaintiffs, Pranav Sathyanarayanan and Kaitlin Pranav, in a real estate transaction. Pursuant to a January 2022 contract, plaintiffs purchased the premises at 416 Oakwood Road in Port Jefferson, New York, from nonparties John Reiersen and Eugenia Reiersen. As pertinent here, paragraph 45 of the rider to the contract stated that “[t]he PURCHASERS shall have a Right of First Refusal with regard to the purchase of the adjacent lot (0206/66/1/1034) to be exercised, if at all, no later than 10 business days from the date they are served with notice of a valid purchase offer from a third party, by SELLERS.” Paragraph 38 of the rider to the contract stated that “[t]he parties hereby designate their respective attorneys as their agents to send or receive any notices pursuant to this contract.”

On March 30, 2022, the Reiersens’ counsel sent to defendants notice of a valid offer to purchase the adjacent lot for $232,000.00. The next day, defendants emailed plaintiffs with the Reiersens’ counsel’s letter. On April 4, defendants emailed plaintiffs again to ensure that they received the letter. Sathyanarayanan responded, stating that he had seen the letter. In an April 13 email, plaintiffs asked for an update on the title search for the adjacent lot (Amended Complaint, NYSCEF doc. 21, at ¶ 29 citing Emails, NYSCEF doc. 16). Defendants responded that he had still not received the title report for the adjacent lot and asked if April 29 was a good closing date for the main property (id.; Emails, NYSCEF doc. 16). Plaintiffs stated that they “aren’t really in a position to make an offer since without [sic] knowing its [sic] a pink elephant of an investment” (Amended Complaint, NYSCEF doc. 21, at ¶ 30), stated that April 29 was a good closing date for the main property, and that they were “[l]ooking forward to putting pen to paper on this!” (Emails, NYSCEF doc. 16).

Two years later, in March 2024, an entity named J & E Associates transferred the [*2]adjacent lot to M3K Development, LLC. Plaintiffs then commenced this action for legal malpractice and breach of fiduciary, all based on their failure to exercise their right of first refusal for the adjacent lot in 2022. Their amended complaint alleges, in broad terms, that defendants committed legal malpractice and breached their fiduciary duties by failing to demand proper service of the notice of purchase upon plaintiffs, as service on defendants was allegedly improper; failing to give plaintiffs an accurate date by which they had to exercise their right of first refusal; failing to object to the Reiersens’ counsel’s letter as insufficient; failing to draft a proper right of first refusal; and failing to record the contract of sale, with the right of first refusal, against the adjacent lot.”

“Defendants correctly argue that plaintiffs have not pleaded but-for causation, so the legal malpractice claim is dismissed. The emails between the parties, which were quoted in the complaint and referenced in the complaint by NYSCEF document number,^[FN1] reveal that plaintiffs declined to exercise their right of first refusal, at which point their right to do so was extinguished (Yudell Trust I v API Westchester Assoc., 227 AD2d 471, 473; McPeady & Co. v Chestnut St. Props., 179 AD2d 915, 917; Story v Wood, 166 AD2d 124, 129). The amended complaint pleads that without a title report, plaintiffs “[we]ren’t really in a position to make an offer since without [sic] knowing it’s a pink elephant of an investment” (Amended Complaint, at ¶ 30, citing Email, NYSCEF doc. 16). In other words, the amended complaint pleads that plaintiffs declined to exercise their right of first refusal.^[FN2] Without any allegation that defendants’ failure to procure a title report quicker constituted malpractice, plaintiffs’ decision not to purchase the adjacent lot eliminates any but-for causation.

A breach of fiduciary duty claim also requires but-for causation “in the context of an action asserting attorney liability” (Lambro Indus., Inc. v Gilbert, 233 AD3d 765, 767; see Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 10). For the reasons explained above, this claim is dismissed too.”