In Bethelite Community Baptist Church, Inc. v Shiryak, Bowman, Anderson, Gill & Kadochnikov, LLP 2025 NY Slip Op 32826(U) July 22, 2025 Supreme Court, New York County Docket Number: Index No. 160036/2022 Judge: Paul A. Goetz. Plaintiff threads the eye of the needle and obtains partial summary judgment on liability. Here is how it happened:

“Due to a dispute with the City, the church stopped paying its water and sewer charges in the early 1990s (id. ¶ 7). On June 17, 2002, the City placed a lien on the premises for $100,549.54 (id. ¶ 8; NYSCEF Doc No 80). Three days later, the City assigned the lien to NYCTL 2002-A Trust and Bank of New York (the lienholder), as collateral agent and custodian (id. ¶ 9; NYSCEF Doc Nos 81, 82).”

“On September 17, 2009, the lienholder commenced an action against the church to foreclose on the lien (id. ¶ 12; NYCTL 1998-2 Trust and the Bank of Mellon v Bethelite Community Baptist Church, Index No 113197/2009). The church had not yet appeared in the matter, however, on May 6, 2015, the referee issued a report finding that the church owed $1,028,939.34 on the lien; notably, the referee calculated this total by applying an interest rate of 18% (id. ¶ 14; NYSCEF Doc No 86 [the 2015 report]).”

“Plaintiff argues that defendants breached their duty of care in filing the SBAGK opposition without objecting to the 18% interest rate employed by the referee, and but for this failure, the court would have determined that plaintiff owed 7-9% interest, rather than 18%; and this caused an actual and ascertainable loss, as the amount owed can be recalculated with the lower interest rate applied (NYSCEF Doc No 73, pp. 9-19). Defendants argue that the 18% interest rate was correctly applied to the tax lien; plaintiff’s financial liability stems from its own noncompliance with City directives to pay its outstanding water and sewer charges and its failure to mitigate damages; and that Anderson exercised “reasonable professional judgment in declining to advance the meritless argument that Bethelite was entitled to a reduced interest rate” (NYSCEF Doc No 128, pp. 15-24). Initially, while defendants argue that “the courts repeatedly upheld the [18%] interest rate during the underlying litigation” and that “Plaintiff’s claims were consistently rejected on appeal” (NYSCEF Doc No 128), this mischaracterizes the history of the underlying case. In the June 18, 2019 order, the court specifically declined to confirm the 2015 report because plaintiff had not yet appeared in the action and directed recalculation of the interest rate (NYSCEF Doc No 96). In the January 29, 2020 order, the court confirmed the 2019 report because defendants “made no substantive argument regarding the referee’s calculations” (NYSCEF Doc No 117). The First Department affirmed, specifically noting that defendants “did not argue that the interest rate on the tax lien should be nine percent per annum” (NYSCEF Doc No 118). Finally, the trial court’s February 4, 2022 order denied the church’s motion to vacate because the church “failed to demonstrate the existence of ‘new evidence’ that would change the result reached and that it could not have been discovered with due diligence” (NYSCEF Doc No 119). Thus, the issue of the interest rate was never fully litigated and considered on the merits.”

“In the context of a motion for summary judgment, a movant’s “burden of proof in a legal malpractice action is a heavy one” because they “must prove [] the hypothetical outcome of the underlying litigation and, then, the attorney’s liability for malpractice in connection with that litigation” (Lindenman v Kreitzer, 7 AD3d 30, 34 [1st Dept 2004]). Plaintiff has met that heavy burden here. Had defendants raised the argument that plaintiff did not have an annual tax bill due to its tax-exempt status, the court would have determined that the lower interest rate applied. Defendants were negligent in failing to raise this argument, and this negligence proximately caused the entry of a significantly larger judgment amount against plaintiff.”

“Based on the foregoing, it is RECEIVED NYSCEF: 07/22/2025 CONCLUSION ORDERED that plaintiff’s motion for summary judgment on its sole cause of action for legal malpractice is granted on liability3, and defendant’s cross-motion is denied.”