CANTON, NY:   George v Phippen  2018 NY Slip Op 50809(U)  Decided on June 5, 2018
Supreme Court, St. Lawrence County  Farley, J. is the story of a simple car accident encumbered by a number of missteps.  It is a cautionary tale for legal malpractice observers.  It all starts with a traffic accident with a municipal dump truck.

“On July 19, 2016, Plaintiff Douglas M. George (“George”) was involved in a motor vehicle accident with a truck owned by Defendant Town of Stockholm, New York (“Town”), and operated by Defendant Derec C. Phippen (“Phippen”) during the course of Phippen’s employment for the Town. George was operating a 2013 Toyota sedan owned by his wife, Plaintiff Joanne Shenandoah (“Shenandoah”). Because he did not timely serve a notice of claim under New York General Municipal Law (“GML”) § 50-e (1), George commenced a special proceeding (“Special Proceeding”) (Index No. 149142) by order to show cause (“OSC”) seeking leave to serve the Town and Phippen with a late notice of claim under GML § 50-e (5). This Court granted George’s application, and the Order (“Order”) was filed and entered with the St. Lawrence County Clerk on February 27, 2017. On Monday, November 27, 2017, George and Shenandoah filed a Summons and Complaint using the Index Number of the Special Proceeding. Now before the Court is Defendants’ motion to dismiss this action pursuant to NY C.P.L.R. § 3211 (a) (5) as barred by the one year and 90-day statute of limitations set forth in GML § 50-i (1). For the reasons which follow, the Court denies Defendants’ motion to dismiss with respect to George’s cause of action, and grants Defendants’ motion with respect to Shenandoah’s claims.”

“After counsel for Defendants advised the Court the Town and Phippen did not intend to [*2]oppose George’s Order to Show Cause, on January 25, 2017, this Court signed the Order [Ex. C to Brandi aff.] permitting George to serve the Notice of Claim upon them both. The Order was filed with the St. Lawrence County Clerk on February 27, 2017. See Hobaica aff. at ¶ 4 & Ex. 1 [date-stamped Order]; see Brandi Reply aff. at ¶ 6. The Notice of Claim alleged a claim for George only, and did not mention Shenandoah or assert a claim on her behalf.

On April 11, 2017, Defendants conducted an examination of George pursuant to GML § 50-h. George testified the accident took place July 19, 2016, as he was driving to Canada for the purpose of speaking at a cultural seminar, when Defendants’ dump truck veered to its left before making a right turn and striking the vehicle which George was operating. See Transcript of GML § 50-h hearing [Ex. E to Brandi aff.], at 12, 13. At this examination, George testified he had been married to Shenandoah for 25 years; they work “as a partnership” where “she does music and I do the cultural component”; and, his wife “experienced liver failure and [ ] hasn’t been working steadily since July of 2015.” Id. at 5, 10-11, 63. Shenandoah was not examined pursuant to GML § 50-h because she was not identified as a claimant in the Notice of Claim. See Brandi aff. at ¶ 13.

On Monday, November 27, 2017 — 496 days after the July 19, 2016, accident — Plaintiffs filed a Summons and Complaint [FN1] using the Index Number from the Special Proceeding, listing both George and Shenandoah as Plaintiffs, and setting forth a first cause of action for George’s injuries, and a second cause of action alleging a derivative claim on behalf of Shenandoah. By letter Order signed January 29, 2018, in the Special Proceeding [Ex. 2 to Hobaica aff.], the Court directed Plaintiffs to acquire a new index number and the Clerk to assign that index number nunc pro tunc to the November 27, 2017, filing of the Summons and Complaint. Plaintiffs’ Amended Complaint dated February 1, 2018 (“Complaint”), correctly identifies July 19, 2016 as the date of accident. Complaint [Ex. 3 to Hobaica aff.] at ¶¶ 6-9. Plaintiffs’ counsel acknowledges any earlier references that July 18, 2016, was the accident’s date were “typographical date errors.” Hobaica aff. at ¶ 10.”

“In the case at bar, the toll was in effect for forty (40) days — from January 18, 2017 (date of personal service of OSC) to February 27, 2017 (entry date of Order granting relief). Adding this toll to the 455-day statute of limitations results in the statute of limitations expiring November 26, 2017 — 495 days after the July 19, 2016, motor vehicle accident. Although he did not commence this action until the 496th day — November 27, 2017 — George’s claim is saved because November 26, 2017 was a Sunday. In pertinent part, New York Construction Law (“GCL”) § 25-a provides:

When any period of time, computed from a certain day, within which or after which or before which an act is authorized or required to be done, ends on a Saturday, Sunday or a public holiday, such act may be done on the next succeeding business day [ ].

Id. (emphases added).

See Cyens v. Town of Roxbury, 40 AD2d 915, 915 (3d Dep’t 1972) (citing GCL §25-a; “since the period within which appellants’ action [pursuant to GML § 50-i] had to be commenced expired on a Saturday, appellants had until [the following] Monday [ ] to commence their action”). Accordingly, the Court denies Defendants’ motion to dismiss with respect to George’s claim and cause of action.

Having found George’s claim and cause of action timely, the Court next addresses Shenandoah’s derivative cause of action. Shenandoah’s claim and cause of action differs from George’s in several key respects: (1) George’s original motion by order to show cause for leave to [*6]file late notice of claim concerned him only, and did not mention Shenandoah; (2) the resulting Order concerned George only, and did mention Shenandoah or any claim which she might have; and, (3) the Notice of Claim sets forth a claim for George only. In addition, and because George was the only person granted leave to serve late notice of claim, Defendants conducted the hearing pursuant to GML § 50-h of George only, and no testimony was offered by or taken from Shenandoah. Further, although opposing Defendants’ motion seeking dismissal of Shenandoah’s claim, Plaintiffs have not: (1) cross-moved under GML § 50-e (5) for leave to serve a late notice of claim with respect to Shenandoah; (2) provided a proposed notice of claim including Shenandoah’s claims; or, (3) cross-moved under GML § 50-e (6) to amend the original notice of claim on the ground of a “mistake, omission, irregularity or defect made in good faith in the notice [of claim].”

The Court grants Defendants’ motion and dismisses Shenandoah’s derivative cause of action for three reasons. First, and as noted above, “a court is without power to authorize the late filing of a claim or to order that a late filed claim be deemed timely nunc pro tunc where the statute of limitations has expired.” E.g., Schwinghammer v. Sullivan W. Cent. School Dist., 2 AD3d 1126, 1126-27 (3d Dep’t 2003) (citing Pierson, 56 NY2d at 954-55). The Second Department’s decision in Martin v. Village of Freeport, 71 AD3d 745 (2d Dep’t 2010), is instructive. In that case plaintiff, guardian of her daughter (an incapacitated person), had previously sought and obtained leave to serve a late a notice of claim, which “did not include a derivative claim.” 71 AD3d at 745. After commencing suit, plaintiff sought leave to amend her complaint to include a derivative claim, but did not move either: (1) for leave to serve a late notice of the derivative claim; or, (2) to amend the original notice of claim to include a derivative claim. Denying plaintiff’s motion to amend her complaint, the Second Department held “under these circumstances [ ] plaintiff was foreclosed from asserting a derivative claim against [defendant].” Id. See also: Boakye-Yiadom v. Roosevelt Union Free School Dist., 57 AD3d 929, 931 (2d Dep’t 2008) (“[a] plaintiff may not maintain causes of action for which he failed to serve a timely notice of claim”). As in Martin, George’s Notice of Claim — for which he received leave of court to serve, with the accompanying toll — did not include any derivative claim. Accordingly, Shenandoah is not entitled to any toll, and her cause of action is untimely.”

The statute of limitations is a significant issue for many litigants.  There is a delay or lapse time between when a mistake is made and when a legal malpractice case is commenced.  In some cases, plaintiffs wait to see whether a mistake can be fixed; sometimes new counsel don’t magically appear right away and there is once again, delay.  How does this all affect the commencement of the statute of limitations?

Mazario v Snitow Kanfer Holtzer & Millus, LLP  2018 NY Slip Op 31024(U)  May 24, 2018
Supreme Court, New York County  Docket Number: 152742/2017  Judge: Barbara Jaffe is an example of the subjective method of determining the onset of the statute of limitations.  She relies on the “lack of trust and confidence” line of cases rather than an objective “when was the consent to change attorneys filed” line of cases.

“In support of their defense based on the three-year statute of limitations for malpractice
actions, Milius relies on an email dated March 6, 2014, whereby PPL requested its legal file from
Milius (NYSCEF 19, 69), and on an email dated August 15, 2013, by which he advised Mazario
that it was “impossible” to continue to represent him and that he intended to move to withdraw
from the case, and recommended that Mazario obtain new counsel (NYSCEF 18). Defendants
thus argue that the action is time-barred, as it was commenced on March 23, 2017, which is more
than three years after the latest date on which the action accrued, March 6, 2014. (NYSCEF 23,
79).
Plaintiffs maintain that Milius continued to represent PPL until his motion to be relieved
was granted on April 22, 2014 (NYSCEF 10). They rely on Millus’s promises to provide
guidanc_e and assistance to any new counsel ret~ined by PPL and his delay in seeking to
withdraw from the action, and observe that they did not hire new counsel until after Milius was
relieved as counsel. They also complain of being deprived of the discovery required to establish
whether the relationship between PPL and Milius continued beyond March 6. Moreover, they
argue, the purported documentary evidence offered by defendants fail absent an affidavit of one
with personal knowledge of the pertinent events. (NYSCEF 62)”

” Here, defendants meet their initial burden by offering undeniable evidentiary proof that
the malpractice claim accrued, at the latest, on March 6, 2014, more than three years before this
action commenced, when PPL requested its legal file, thereby demonstrating a lack of trust and confidence in Millus. (See Farage, 124 AD3d at 168 [on motion for summary judgment,
retrieval of litigation file marked end of representation, and consent to change attorney form
executed later was “mere ministerial task” to inform others that representation ended]; Aseef. 106
AD3d at 1038 [on motion to dismiss claim as time-barred, trial court correctly concluded
relationship necessary to invoke continuous representation ceased to exist when plaintiff
surreptitiously removed his file from attorney’s office]).

While the order relieving Milius as counsel formalized the end of the attorney-client
relationship, it is not dispositive of when the representation ceased. (See Aaron v Roemer.
Waif ens & Mineaux. LLP, 272 AD2d 752, 755 [3d Dept 2000], Iv dismissed 96 NY2d 730 [2001]
[as plaintiff, in letter to court, did not contest attorney’s withdrawal and described relationship as
fractured, date of letter, as opposed to date on which withdrawal formalized, marked end of
representation]). Moreover, Millus’s offer to provide guidance to new counsel does not clearly
indicate that the relationship continued beyond March 6, 2014 (see id. at 755 [plaintiffs letter to
court stating he would not contest motion to withdraw and was seeking new counsel indicated he
perceived relationship with counsel broken]), nor does Mazario’s unilateral belief that
representation continued (see Davis v Cohen & Gresser, LLP, I 60 AD3d 484, 484 [1st Dept
2018] [statute of limitations not tolled as, inter afia, record reflected lack of mutual
understanding that defendant would continue to represent plaintiff]). Likewise, in these
circumstances, Millus’s delay in moving to withdraw from representation does not prove
continuous representation. (See Riley v Segan, Nemerov & Singer, P.C., 82 AD3d 572, 572-573
[I st Dept 20 I I] [not dispositive that attorney never moved to withdraw, as he sent client letter
stating he could not proceed with case, thereby severing relationship]).  “

47 Third Residential Invs. LLC v Georges  2018 NY Slip Op 30989(U)  May 22, 2018
Supreme Court, New York County  Docket Number: 155636/2017  Judge: Robert D. Kalish is the sad story of architectural work, of mistakes, and of tremendous losses, now probably not covered by insurance.

“Plaintiff commenced the instant action on June 21, 2017, bye-filing a summons and complaint. Plaintiff alleged in its complaint that it was the owner of a residential condominium unit comprising five floors and all development rights of the six-story building located at 101 East 10th Street, New York, New York 10003 (the “Building”). Plaintiff further alleged that it retained Defendant Gregory Georges in 2015 to investigate and determine the structural impact of adding new floors to the Building (the “Project”). Plaintiff then alleged that it relied on Defendant’s finding that the Building could support the addition of six new floors on top of the existing Building and purchased air rights from the neighboring property owner at 55 Third A venue in furtherance of the Project. Plaintiff next alleged that it commissioned structural and architectural drawings and other engineering services from Defendant in furtherance of the Project. Plaintiff then alleged that it added at least one floor to the Building based on Defendant’s services and conclusions. Plaintiff further alleged that it made several payments to Defendant.

Plaintiff alleged that, in or about March 2016, it retained three separate engineering firms-Active Design Group Engineering DPC, Rosenwasser Grossman Consulting Engineers, P.C., and Structural Engineering Technologies-to conduct a peer review of Defendant’s findings and study the structural impact of the proposed addition on the critical structural components of the Building. Plaintiff then alleged that the peer review resulted in unequivocal recommendations that differed greatly from Defendant’s in that other and additional major structural work not recommended by Defendant would be necessary to complete the Project. As a result, Plaintiff terninated Defendant from the project on February 29, 2016. Plaintiff then sued Defendant in the instant action for professional malpractice, alleging that Defendant has cost Plaintiff at least two years of delays on the Project, during which time it had paid for materials which would tum out to be useless and has had to continue paying substantial carrying costs on several vacant residential floors.

On October 12, 2017, this Court granted Plaintiffs September 1 1, 2017 motion pursuant to CPLR 3215 for an order directing the entry of a default judgment in favor of Plaintiff and against Defendant. (Affirmation of Skillman, exhibit A.) The Court found that Plaintiff had shown prima facie based upon an affidavit of service that Defendant had been served personally with process pursuant to CPLR 308 (1) on July 8, 2017, at 34 Wedgewood Drive, Coram, NY 11727. The Court found further that Defendant had failed to answer or appear in the instant action and his time to do so had expired. The Court found further that Plaintiff had submitted adequate proof of the facts constituting its claim by means of the affidavits of merit of Mr. Zampetti, an authorized representative of Plaintiff, and Mr. Nusbaum, a managing member of Plaintiff. As such, the Court directed the Clerk to enter a judgment in favor of Plaintiff and against Defendant on the issue of liability and further directed an assessment of damages.”

“On February 15, 2018, J.H.O. Gammerman held the inquest on damages. (See affirmation of Skillman, exhibit B [Tr].) Defendant appeared pro se at the inquest in his first appearance in
this action. J.H.O. Gammerman began by explaining to Defendant that a default judgment had
been entered against him as to liability establishing that Defendant was negligent in his profession. Defendant responded by asking to open the default judgment. J.H.O. Gammerman replied that Defendant would need to make a motion to do that. Defendant replied by saying he would like to move now, but J.H.O. Gammerman told Defendant that the issue was not before him.”

“Defendant stated that he had previously failed to appear in the instant action “[b Jecause
[he himself] was in the hospital.” (Tr at 7, line 3.) “

ALBANY:   The Third Department heard oral argument and rendered a decision in Mid-Hudson Val. Fed. Credit Union v Quartararo & Lois, PLLC  2017 NY Slip Op 07916 [155 AD3d 1218]
November 9, 2017  Appellate Division, Third Department, holding that in this legal malpractice case there were simply not enough allegations for the court to reach any deterioration at all.  Because there were two dissenters, this case might well show up in the Court of Appeals.

“A legal malpractice claim requires that the plaintiff show that “the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession which results in actual damages to a plaintiff, and that the plaintiff would have succeeded on the merits of the underlying action ‘but for’ the attorney’s negligence” (AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007] [citations omitted]; see Hinsdale v Weiermiller, 126 AD3d 1103, 1104 [2015]). The amended complaint alleged that, but for defendants’ failure to provide timely and competent legal services, plaintiff would have succeeded in the underlying debt collection and mortgage foreclosure actions. The amended complaint further alleged that “had [defendants] not failed to advise the cases in a timely and competent manner . . . , [plaintiff] would not have incurred a loss in time and value in the debt on the collection and foreclosure cases assigned to defendant[s].” Other than these vague and conclusory allegations, however, plaintiff failed to plead any specific facts, which, if accepted as true, would establish a legal malpractice claim. Absent from the amended complaint is any mention of an instance of deficient representation or any example of erroneous advice by defendants. Merely alleging the elements of a legal malpractice claim in a general fashion, without more, does not satisfy the liberal pleading standard of CPLR 3211. Furthermore, while a recitation of the elements of a cause of action may meet that component of CPLR 3013 requiring that the statements in a pleading provide notice of “the material elements of [a] cause of action,” the statute also requires that the pleading’s statements be “sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved” (CPLR 3013 [emphasis added]; cf. Matter of Garraway v Fischer, 106 AD3d 1301, 1301 [2013], lv denied 21 NY3d 864 [2013]; Eklund v Pinkey, 27 AD3d 878, 879 [2006]).

The statements in the amended complaint fail in this regard in that they do not allege a single transaction where defendants were retained to provide legal services or a single occurrence of negligent legal representation forming the basis of the legal malpractice claim, let alone the specific underlying foreclosure action or actions in which defendants allegedly committed legal malpractice. Other than stating that defendants represented plaintiff in foreclosure actions, the amended complaint does not allege, and, more critically, it cannot reasonably be inferred from such pleading, what defendants allegedly did or did not do in a negligent fashion. The amended complaint is not just sparse on factual details—rather, it is wholly devoid of them.[FN2] Given the [*3]absence of detailed facts, the legal malpractice cause of action should have been dismissed (see Janker v Silver, Forrester & Lesser, P.C., 135 AD3d 908, 910 [2016]; Rodriguez v Jacoby & Meyers, LLP, 126 AD3d at 1185-1186; Kreamer v Town of Oxford, 96 AD3d 1128, 1128 [2012]; compare Soule v Lozada, 232 AD2d 825, 825 [1996]).

Addressing the concerns raised by the concurrence/dissent, defendants certainly could have requested a bill of particulars or moved for a more definite statement under CPLR 3024.[FN3]Notwithstanding the favorable standard enjoyed by plaintiff, defendants nonetheless elected to challenge the legal sufficiency of the legal malpractice allegations under CPLR 3211 (a) (7).[FN4] Having been apprised of defendants’ challenge and being presented with an opportunity to particularize its allegations, plaintiff, in response, submitted an amended complaint that merely added two paragraphs consisting of bare legal conclusions. Plaintiff had avenues to withstand the motion to dismiss but “[chose] to stand on [its] pleading alone” (Rovello v Orofino Realty Co., 40 NY2d 633, 635 [1976]). Nor do we believe that our decision will lead to unpredictability or confusion given that it reiterates the proposition that bare legal conclusions in a pleading are not entitled to consideration when assessing a motion to dismiss under CPLR 3211 (a) (7) (see Myers v Schneiderman, 30 NY3d 1, 11 [2017]; Connaughton v Chipotle Mexican Grill, Inc., 29 NY3d at 141; Maas v Cornell Univ., 94 NY2d 87, 91 [1999]; Rodriguez v Jacoby & Meyers, LLP, 126 AD3d at 1185; Wiggins & Kopko, LLP v Masson, 116 AD3d 1130, 1131-1132 [2014]). Indeed, such a motion “is useful in disposing of actions in which the plaintiff . . . has identified a cognizable cause of action but failed to assert a material allegation necessary to support the cause of action” (John R. Higgitt, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3211:22).”

Despite the writing of one of the biggest names in legal circles, Appellant got absolutely nowhere in challenging Judge Kornreich.  As she is retiring, this may be one of her last opinions.

Shawe v Elting  2018 NY Slip Op 03644  Decided on May 22, 2018  Appellate Division, First Department is an example of how the First Department handles JL § 487 cases.  In the First Department, more than a single instance of deceit is required, and it better be “egregious.”

“Moreover, our rulings in Elting v Shawe (129 AD3d 648 [1st Dept 2015]) and Elting v Shawe (136 AD3d 536 [1st Dept 2016]), in which we held that the payroll access and corporate ownership assertions, made in support of the TRO and preliminary injunction applications in the 2014 action, were not material, collaterally estop Shawe from relying on those misstatements. Since those misstatements form the entire basis of Shawe’s current malicious prosecution claim, collateral estoppel constitutes a second, independent basis for dismissal of that cause of action.

The payroll access misstatements likewise form a substantial portion of Shawe’s current claim for violation of Judiciary Law § 487. Given especially that Elting was granted a TRO, the payroll access misstatements, which we have determined to be immaterial, “were not sufficiently egregious to support this claim” of § 487 violation (Mintz v Rosenberg, Minc, Falkoff & Wolff, LLP, 53 Misc 3d 132{A} [App Term 1st Dept 2016]). Shawe’s allegations that the attorney defendants deceptively backdated a retainer agreement primarily relates to privilege assertions in the Delaware action, and not in New York, and, as such, is not actionable under § 487 (see Doscher v Manatt, Phelps & Phillips, LLP, 148 AD3d 523, 524 [1st Dept 2017]). The remaining basis of Shawe’s claim under § 487 — the allegedly knowing filing of a baseless defamation counterclaim — is a “single alleged act of deceit … not sufficiently egregious to support a claim under” § 487 (Strumwasser v Zeiderman, 102 AD3d 630, 631 [1st Dept 2013]).”

Client is injured.  Attorney is hired.  Attorney negotiates a rate of pay.  Must the attorney look to see whether the client has insurance, and if so, how hard does the attorney have to look?  Remember, if there is insurance there may be an insurance lawyer lurking and about to take over from the inquiring attorney.

Matz v Aboulafia Law Firm, LLC  2017 NY Slip Op 32147(U)  October 10, 2017  Supreme Court, New York County  Docket Number: 15506/2016
Judge: Kathryn E. Freed discusses this question.

“On July 23 and 24, 2011, the premises sustained damage due to electrical fires covered under the Marine Policy. Id., at pars. 19-20. On July 25, 2011, plaintiffs entered into a public adjuster compensation agreement with defendants Klein and Klein Inc. pursuant to which those defendants agreed to adjust the claims arising from the fires. Id., at par. 21. Klein and Klein Inc. were unable to resolve the claims. Id., at par. 22.

On or about July 11, 2013, Klein, Klein Inc., and Bauer recommended that plaintiffs retain defendants Aboulafia and the Aboulafia Firm to commence an action against Marine. Id., at par. 23. On or about July 18, 2013, plaintiffs retained Aboulafia and the Aboulafia Firm for this . purpose, and an action was commenced against Marine demanding damages of $300,000 on the ground that the company improperly refused to indemnify plaintiffs for the damages caused by the fires. Id., at par. 24. Defendants Klein, Klein Inc., and Bauer allegedly failed to inform Aboulafia and the Aboulafia Finn about the existence of the Technology Policy, despite the fact that they knew about the said policy and the action commenced on behalf of plaintiffs by Aboulafia and the Aboulafia Finn against Marine. Id., at p. 25. Although plaintiffs assert that their claims were worth approximately $140,000, Aboulafia and the Aboulafia Finn allegedly failed to act in their best interests by bringing a suit on their behalf as against TIC. Id., at par. 26. Thus, maintain plaintiffs, they were forced to settle their claims with Marine for an amount Jess than the full value thereof. Id., at pars. 27, 34. ”

“Construing the complaint in a light most favorable to plaintiffs, they have set forth a claim for legal malpractice”

“Whether an attorney has an obligation to investigate insurance coverage depends, in large part, on the scope of the agreed representation by the  attorney. See Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34 (2d Dept 2006). Here, since the retainer
agreement executed between plaintiffs and the Aboulafia firm, which constitutes “documentary evidence” within the purview of that section (see generally Fontanetta v John Doe 1, 73 AD3d 78, 84-85 [2d Dept 2010]), clearly limits the firm’s representation only to commencing a property
damage claim against Marine. Doc. 26. That agreement further provides that the Aboulafia Firm “is to do no further work on this claim other than starting a suit against [Marine]. If further work is required, a separate retainer agreement must be executed by [plaintiffs].” Id. Given the express limitation on the scope of the Aboulafia firm’s representation, plaintiffs’ claim that Aboulafia and/or the Aboulafia Firm should have taken further steps to investigate other possible insurance coverage is thus without merit. See Rules of Professional Conduct (22 NYCRR 1200.0) Rule
I .2(c). “

ALBANY      The Court of Appeals addressed professional malpractice and duplicity.  Here we are discussing duplicitive causes of action, not deceit in the meaning of Judiciary Law § 487.

“The two questions on this appeal are whether plaintiff City of New York is an intended third-party beneficiary of the architectural services contract between plaintiff Dormitory Authority of the State of New York (DASNY) and defendant Perkins Eastman Architects, P.C. and whether DASNY’s negligence claim against Perkins is duplicative of its breach of contract claim. We hold that summary judgment should have been granted in defendant Perkins’ favor on both issues.

This action arose out of a construction project to build a forensic biology laboratory at 26th Street and First Avenue in Manhattan, adjacent to Bellevue Hospital, for use by the Office of the Chief Medical Examiner (OCME). The City (on behalf of OCME) and DASNY entered into a project management agreement, which provided that DASNY would finance and manage the design and construction of the laboratory (the project). DASNY was authorized to enter into contracts with the necessary contractors and consultants including, as relevant here, the architect, Perkins.

Pursuant to the contract between DASNY and Perkins (the Perkins contract), Perkins was to provide design, architectural, and engineering services for the project and supervise its construction. Perkins was also responsible for providing a site plan for the location of the laboratory in relation to the hospital. The contract further provides that Perkins would “indemnify and hold harmless” DASNY and the “Client” (that {**30 NY3d at 708}is, OCME, and the NYC Police and Fire Departments) from any claims arising out of Perkins’ negligent acts or omissions and that extra costs or [*2]expenses incurred by DASNY and the Client as a result of Perkins’ ”design errors or omissions shall be recoverable from [Perkins] and/or its Professional Liability Insurance carrier.”

Pursuant to a separate contract, DASNY retained Samson Construction Co., which is not a party to this appeal, as the contractor to provide excavation and foundation work for the project. Significantly, the contract executed between DASNY and Samson provides that the client—i.e., the City—”is an intended third party beneficiary of the Contract for the purposes of recovering any damages caused by [Samson].” Although there are passing references to the client in the Perkins contract, no analogous language providing that the City is an intended third-party beneficiary appears there.”

“The allegations set forth in the negligence cause of action are virtually identical in every respect, but with an introductory phrase that references Perkins’ failure “to comply with professional standards of care” instead of breach of contract. The damages for both claims are described as the “significant additional expenses” necessary to complete the project. Although the complaint’s ad damnum clause states a figure for Perkins’ negligence that is $4 million higher than for its breach of contract, there is no basis given for the additional amount. During early discovery, plaintiffs produced a binder and provided testimony showing that the total cost of fixing the damage was approximately $37 million, including repairs to the project site and the adjacent structures, with no distinction drawn between the two claims.

Perkins moved for summary judgment to dismiss the City’s breach of contract and negligence claims and to dismiss DASNY’s negligence claim as duplicative of its breach of contract claim. Supreme Court granted the motion in part, dismissing the City’s breach of contract and negligence claims (2013 NY Slip Op 34183[U] [2013]). The court held that the City was not an intended third-party beneficiary of the Perkins contract and that the City’s claim for simple negligence was therefore time-barred. The court allowed both of DASNY’s claims to proceed, finding that its negligence claim was not duplicative of its contract claim.

The Appellate Division modified by denying Perkins’ motion for summary judgment on the City’s breach of contract claim and, as so modified, affirmed (137 AD3d 433 [1st Dept 2016]). The Court held that the City had raised an issue of fact whether it was an intended third-party beneficiary of the parties’ contract. The Court also denied Perkins’ motion for summary judgment to dismiss DASNY’s negligence claim as duplicative of its breach of contract claim. The Court held there was an issue of fact whether Perkins assumed a duty of care to perform in accordance with professional standards that was independent of its contractual obligations.

[*3]One Justice dissented in part, and would have dismissed DASNY’s negligence claim as duplicative. The Appellate Division granted Perkins’ motion for leave to appeal to this Court,{**30 NY3d at 710} certifying the following question: “Was the order of this Court, which modified the order of the Supreme Court, properly made?” We answer the certified question in the negative.”

In the super-heated world of Manhattan real estate, $9.8 Million apartments are the middle children.  Not the biggest, not the smallest.  However, Riviera Prop. Holdings, LLC v Ferber Chan Essner & Coller, LLP  2017 NY Slip Op 27424 [58 Misc 3d 708]  July 31, 2017  Billings, J.
Supreme Court, New York County is an exceptional case.  Plaintiffs were induced to give the 10% downpayment in a unique form.  It did not go to a escrow agent; it mostly went to the sponsors as a loan. The transaction did not end well.

“Section 4.1 of the purchase agreement provided that the condominium unit’s purchase price was $9,850,000 and that the{**58 Misc 3d at 711} deposit was $985,000, 10% of the purchase price. In connection with the purchase, plaintiff, whose members were nonparties Neil Yaris, Alan Green, and Wendy Maitland, executed the second and third riders to the purchase agreement regarding the 10% deposit required by the agreement. The riders provided for payment of the deposit to the sponsor and its controlling owners, instead of the escrow agent as the purchase agreement specified. Specifically, the second rider required plaintiff to pay a nonrefundable deposit of 1% of the purchase price to the sponsor itself. The third rider required plaintiff to pay a deposit of the remaining 9% of the purchase price by making a loan to the sponsor’s majority owner and the majority owner’s individual members Marc Jacobs and Ira Shapiro.

Plaintiff contends that defendants committed legal malpractice by failing to advise plaintiff that the arrangement to pay the deposit directly to the sponsor and its controlling entity and individuals instead of to an escrow agent was void under the applicable statute and regulations. (General Business Law § 352-h; 13 NYCRR 20.3 [o] [2], [3] [xii].) Defendants do not dispute that, had plaintiff’s deposit complied with the law, plaintiff would have recouped its deposit from the escrow agent when plaintiff invoked its right to rescind the purchase and the sale never closed. Defendants contend that the statute and regulations were inapplicable and that plaintiff’s members were aware that the deposit arrangement with the sponsor posed heightened risks.

To establish legal malpractice, plaintiff must demonstrate that defendants failed to use the ordinary reasonable skill and knowledge of members of the legal profession and that the breach proximately caused plaintiff actual, ascertainable damages. (Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d at 49; Dombrowski v Bulson, 19 NY3d 347, 350 [2012].) Plaintiff establishes proximate cause by demonstrating that plaintiff would not have sustained ascertainable damages but for defendants’ negligence. (Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d at 50; LaRusso v Katz, 30 AD3d 240, 243 [1st Dept 2006]; Brooks v Lewin, 21 AD3d 731, 734 [1st Dept 2005]; see Stackpole v Cohen, Ehrlich & Frankel, LLP, 82 AD3d 609, 610 [1st Dept 2011].)

For defendants to prevail by summary judgment, they must show that they advised plaintiff with the due diligence and skill of members of the legal profession or that a breach of that{**58 Misc 3d at 712} standard was not the proximate cause of plaintiff’s damages. (Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d at 50.) While defendants’ failure to advise plaintiff of an inapplicable statute or regulation would not support a legal malpractice claim (Gabrielli v Dobson & Pinci, 51 AD3d 571, 572 [1st Dept 2008]) defendants fail to show that the statute or regulations on which plaintiff relies did not apply. (See Lichtenstein v Willkie Farr & Gallagher LLP, 120 AD3d 1095, 1098 [1st Dept 2014].)”

“Section 4.1 of the purchase agreement provided that the condominium unit’s purchase price was $9,850,000 and that the{**58 Misc 3d at 711} deposit was $985,000, 10% of the purchase price. In connection with the purchase, plaintiff, whose members were nonparties Neil Yaris, Alan Green, and Wendy Maitland, executed the second and third riders to the purchase agreement regarding the 10% deposit required by the agreement. The riders provided for payment of the deposit to the sponsor and its controlling owners, instead of the escrow agent as the purchase agreement specified. Specifically, the second rider required plaintiff to pay a nonrefundable deposit of 1% of the purchase price to the sponsor itself. The third rider required plaintiff to pay a deposit of the remaining 9% of the purchase price by making a loan to the sponsor’s majority owner and the majority owner’s individual members Marc Jacobs and Ira Shapiro.

Plaintiff contends that defendants committed legal malpractice by failing to advise plaintiff that the arrangement to pay the deposit directly to the sponsor and its controlling entity and individuals instead of to an escrow agent was void under the applicable statute and regulations. (General Business Law § 352-h; 13 NYCRR 20.3 [o] [2], [3] [xii].) Defendants do not dispute that, had plaintiff’s deposit complied with the law, plaintiff would have recouped its deposit from the escrow agent when plaintiff invoked its right to rescind the purchase and the sale never closed. Defendants contend that the statute and regulations were inapplicable and that plaintiff’s members were aware that the deposit arrangement with the sponsor posed heightened risks.”

 

Gorbatov v Tsirelman  2017 NY Slip Op 07979 [155 AD3d 836]  November 15, 2017  Appellate Division, Second Department is an example of allegations of legal malpractice and Judiciary Law § 487 that the Second Department find sufficient to avoid dismissal under CPLR 3211.

“The plaintiff Yevgeny Gorbatov is a licensed acupuncturist and the principal of the six corporate plaintiffs. The defendants Gary Tsirelman and the Law Office of Gary Tsirelman, P.C. (hereinafter together the Tsirelman defendants), and Leon Kucherovsky and the Law Office of Leon Kucherovsky, P.C. (hereinafter together the Kucherovsky defendants), are attorneys who represented some or all of the plaintiffs in hundreds of matters involving the collection of unpaid medical bills from insurers. The plaintiffs commenced this action against the defendants asserting causes of action [*2]to recover damages for legal malpractice, violation of Judiciary Law § 487, and unjust enrichment, and seeking accountings. The Tsirelman defendants and the Kucherovsky defendants separately moved pursuant to CPLR 3211 (a) to dismiss the complaint insofar as asserted against each of them. In the alternative, the Kucherovsky defendants sought severance of the action insofar as asserted against them pursuant to CPLR 603. The Supreme Court denied the motions without prejudice and with leave to renew upon the completion of discovery, pursuant to CPLR 3211 (d). The Tsirelman defendants and the Kucherovsky defendants separately appeal.”

“Contrary to the defendants’ contentions, the Supreme Court properly denied, without prejudice to renew upon the conclusion of discovery, those branches of their motions which were pursuant to CPLR 3211 (a) (1) and (7) to dismiss the legal malpractice and Judiciary Law § 487 causes of action. To plead a claim for legal malpractice, a plaintiff must allege (1) that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession; and (2) that the attorney’s breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages (see Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 49 [2015]). “An attorney’s conduct or inaction is the proximate cause of a plaintiff’s damages if ‘but for’ the attorney’s negligence the plaintiff would have succeeded on the merits of the underlying action, or would not have sustained actual and ascertainable damages” (id. at 50 [internal quotation marks and citation omitted]; see Dombrowski v Bulson, 19 NY3d 347, 350 [2012]; AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007]). Under Judiciary Law § 487, an attorney who “[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party; or . . . [w]ilfully delays his client’s suit with a view to his own gain; or, wilfully receives any money or allowance for or on account of any money which he has not laid out, or becomes answerable for, [i]s guilty of a misdemeanor, and [is liable for] treble damages, to be recovered in a civil action” (Judiciary Law § 487; see Amalfitano v Rosenberg, 12 NY3d 8, 14 [2009]). “Allegations regarding an act of deceit or intent to deceive must be stated with particularity” (Facebook, Inc. v DLA Piper LLP [US], 134 AD3d 610, 615 [2015]; see Putnam County Temple & Jewish Ctr., Inc. v Rhinebeck Sav. Bank, 87 AD3d 1118, 1120 [2011]). “[V]iolation of Judiciary Law § 487 requires an intent to deceive, whereas a legal malpractice claim is based on negligent conduct” (Moormann v Perini & Hoerger, 65 AD3d 1106, 1108 [2009] [citation omitted]).

Here, the complaint, as amplified by the plaintiffs’ submissions in opposition to the defendants’ motions (see Chanko v American Broadcasting Cos. Inc., 27 NY3d 46, 52 [2016]), alleged that the defendants conspired with the plaintiffs’ billing agent, nonparty Gary Shikman and his company the Denium Group, to convert funds received from insurers in recovery of the plaintiffs’ claims, or violated their duties to ensure that the plaintiffs received the funds, resulting in the plaintiffs incurring losses of those funds, and otherwise improperly handled the plaintiffs’ claims. These allegations generally state causes of action sounding in legal malpractice (see Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d at 49; Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.15 [c] [4]), and violation of Judiciary Law § 487 (see Melcher v Greenberg Traurig, LLP, 23 NY3d 10, 14 [2014]; cf. Gumarova v Law Offs. of Paul A. Boronow, P.C., 129 AD3d 911, 912 [2015]). Further, the affidavits, letters, and spreadsheets submitted by the defendants in support of their motions did not constitute documentary evidence pursuant to CPLR 3211 (a) (1) (see Cives Corp. v George A. Fuller Co., Inc., 97 AD3d 713, 714 [2012]; Berger v Temple Beth-El of Great Neck, 303 AD2d 346, 347 [2003]), and, in any event, did not conclusively establish a lack of legal malpractice or deception. [*3]To the extent that the plaintiffs’ allegations are insufficiently specific to each legal matter or particularized, the plaintiffs set forth a reasonable basis to believe that, with additional discovery, they would be able to develop sufficient facts to make more specific allegations (see Lemle v Lemle, 92 AD3d 494, 499-500 [2012]). Facts essential to the opposition of the motions were in the possession of the defendants, warranting denial of these branches of the motions without prejudice and with leave to renew upon the completion of discovery (see CPLR 3211 [d]; Peterson v Spartan Indus., 33 NY2d 463, 466 [1974]; Giunta’s Meat Farms, Inc. v Pina Constr. Corp., 89 AD3d 799, 800 [2011]).”

Matter of Aris  2018 NY Slip Op 03633  Decided on May 10, 2018  Appellate Division, First Department  Per Curiam is definitely not a jury case.  However, it speaks of a trial of Joran Jehudah Aris, with a successful jury verdict on Judiciary Law § 487.  We did not know of any jury verdicts for a JL § 487 claim.  The verdict can be seen here .

Plaintiff apparently got a $100,000 verdict, trebled to $ 300,000.  Collection seems to be a problem.

The Attorney is in serious difficulties in his disciplinary situation.