Olshan Frome Wolosky LLP v Kestenbaum 2025 NY Slip Op 33276(U) August 29, 2025 Supreme Court, New York County Docket Number: Index No. 656174/2023 Judge: Lyle E. Frank stands for the proposition that outside parties which are not part of the retainer agreement, and paid fees on behalf of the client might seek unjust enrichment claims against the attorney.

“Plaintiff Olshan Frome Wolosky, LLP, represented defendants Louis Kestenbaum, Joel Kestenbaum, Fortis Property Group, LLC, FPG Maiden Lane LLC, and FPG Maiden Holding
LLC (collectively, except for Louis Kestenbaum who is no longer part of this action,
“Defendants”) in three proceedings in New York County (the “Underlying Proceedings”). At one point, after tensions between the parties, they entered into a stipulation regarding Plaintiff’s substitution as counsel in the Underlying Proceedings. The present action is brought by Plaintiff who alleges that Defendants have failed to pay over $1 million in legal fees. Defendants answered and asserted four counterclaims, largely based on the position that Plaintiff caused them harm by prematurely abandoning representation. Plaintiff moved to dismiss the counterclaims in their entirety, based in large part upon the stipulation. The Court issued an Order on May 9, 2025, dismissing all four counterclaims.”

“Defendants bring the present motion for reargument, seeking restoration of the counterclaims for breach of contract, breach of fiduciary duty, and unjust enrichment. They are not challenging the dismissal of the claim for legal malpractice. Defendants argue that the Court overlooked material such as emails that were submitted with the original motion to dismiss and erred in applying the CPLR § 3211 standard. Plaintiff opposes the motion. For the reasons that follow, the motion is granted only as to the restoration of the unjust enrichment counterclaim.”

“Defendants argue that the Court overlooked affirmations that expanded on the pleadings
and emails submitted showing the context of the stipulation of withdrawal when dismissing the breach of contract claim based on the stipulation. They argue that there are factual issues going to whether Plaintiff’s behavior in the Underlying Proceedings and leading up to the substitution of counsel constituted a breach of the parties’ retainer agreement. But regardless of whether the Court considered the emails and affidavits, the breach of contract claim was still properly dismissed. As pointed out in the May Order, Defendants did not, and have still not, alleged that they performed under the contract. As this is an essential element of a breach of contract claim, the counterclaim was properly dismissed for failure to state a cause of action. See, e.g., Weintraub v. F.M.B. Realty Co., 196 A.D. 525, 528 [1st Dept. 1921] (complaint was fatally defective due to failure to allege plaintiff’s performance under the contract); ASKL Enters., Inc. v. NYNEX Long Distance Co., 7 A.D.3d 424, 425 [1st Dept. 2004] (plaintiff’s performance an “essential element” of a claim for breach of contract).”

“While a claim for breach of fiduciary duty normally has a “considerably lower standard of recovery” than one for legal malpractice, when the claim is centered around alleged attorney misfeasance the standard is the same and “the plaintiff must establish the ‘but for’ element of malpractice.” Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d 1, 10 – 11 [1st Dept. 2008]. As addressed in the May Order’s analysis of the dismissed legal malpractice claim, Defendants have failed to allege this element of attorney malpractice. Dismissal of this counterclaim was proper.”

“Defendants argue that the Court erred in dismissing the unjust enrichment counterclaim
based on the existence of a contract between the parties, as that counterclaim was pled in the alternative. Furthermore, they argue that the Court overlooked that several of the Defendants were not parties to the contract in question but made payments to Plaintiff that give them grounds to pursue an unjust enrichment counterclaim. When there is a dispute regarding the application of a retainer agreement as to the parties, unjust enrichment may be pursued as an alternative claim. Chowaiki & Co. Fine Art Ltd. v. Lacher, 115 A.D.3d 600, 601 [1st Dept. 2014]. The Court’s dismissal of this counterclaim was premature, and therefore reargument is granted to the extent that the unjust enrichment counterclaim is restored.”

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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.