Exeter Law Group LLP v Immortalana Inc.  2018 NY Slip Op 01269  Decided on February 22, 2018  Appellate Division, First Department  started as a fee dispute.  It now continues into the Appellate Division as a full blown legal malpractice case with third-party defendants.  Perversely, attorneys who gave favorable affidavits to Plaintiff are now third-party defendants.

The tone of the AD opinion is strikingly different from that of Supreme Court.  “Defendants/third-party plaintiffs (hereinafter referred to as the clients) sufficiently stated a claim for legal malpractice against the firm. In particular, the clients alleged an attorney-client relationship; the firm’s failure to exercise ordinary and reasonable skill and knowledge; and damages flowing from additional costs in retaining substitute counsel to restructure the client entities so as to avoid taxes, and the cost of taxes occasioned by the improper corporate structure (see generally AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007]). The engagement letter does not conclusively establish that the services rendered by the firm were outside the scope of the engagement (CPLR 3211[a][1]).”