There are some unique rules and principles in legal malpractice.  One of them is that damages have to be in the nature of pecuniary or economic loss.  Another is that damages have to be proximately linked to the departure by the attorney.

In Iannucci v Kucker & Bruh, LLP  2018 NY Slip Op 03514  Decided on May 16, 2018  Appellate Division, Second Department defendants called damages speculative.  This seemed to be good enough for Supreme Court, but not for the Appellate Division.

“In November 2002, the plaintiffs Robert Iannucci and Sonia Ewers, principals of the plaintiffs Clocktower Properties and Team Obsolete Promotions, Inc. (hereinafter collectively the plaintiffs), purchased property located at 325 Gold Street in Brooklyn (hereinafter the building), which, at that time, was zoned for commercial use. In connection with their purchase, Iannucci and Ewers assumed, among other things, the interest and rights in certain actions commenced by the previous owner to evict residential tenants located on the building’s second, fifth, and sixth floors, and in the south basement unit. Iannucci retained the defendants to represent the plaintiffs in the ongoing eviction actions and to take or maintain legal actions against subtenants in the building. During the time that the defendants represented the plaintiffs in the eviction actions, three of the four floors at issue were vacated either by settlement or as a result of an award of summary judgment. In January 2005, Iannucci retained new counsel. The remaining residential tenants eventually vacated the premises.

Subsequently, the plaintiffs commenced this action, inter alia, to recover damages for legal malpractice, alleging, among other things, that the defendants failed to prosecute the underlying eviction actions in a timely manner, which caused the plaintiffs to lose rental income in excess of $500,000. After the completion of discovery, the defendants moved, among other things, for summary judgment dismissing the legal malpractice cause of action. In the order appealed from, the Supreme Court, inter alia, granted that branch of the defendants’ motion which was for summary judgment dismissing that cause of action on the ground that the plaintiffs’ claim of loss was based [*2]on speculation. The plaintiffs appeal, as limited by their brief, from so much of the order as granted that branch of the defendants’ motion. We reverse the order insofar as appealed from.”

“Moreover, even if the plaintiffs’ damages cannot be precisely calculated at this stage, expenses to the client resulting from attorney delays are deemed to be ascertainable damages in connection with a legal malpractice cause of action (see e.g. VDR Realty Corp. v Mintz, 167 AD2d 986, 987 [noting that the plaintiff’s legal malpractice cause of action was validly grounded in allegations that the defendant attorney “unreasonably delayed the prosecution of a landlord-tenant holdover proceeding and engaged in dilatory tactics, thereby increasing the attorney’s fee and causing other consequential damages”]; accord Miuccio v Straci, 129 AD3d 515, 516 [motion for summary judgment dismissing legal malpractice cause of action was properly denied by the trial court where the plaintiff alleged that he sustained damages due to the defendant attorney’s delay]; see also Plato Gen. Constr. Corp./EMCO Tech Constr. Corp., JV, LLC v Dormitory Auth. of State of N.Y., 89 AD3d 819, 825-826 [noting that, regarding damages for delay, a “plaintiff must show that defendant was responsible for the delay; that these delays caused delay in completion of the contract (eliminating overlapping or duplication of delays); that the plaintiff suffered damages as a result of these delays; and plaintiff must furnish some rational basis for the court to estimate those damages, although obviously a precise measure is neither possible nor required” (internal quotation marks omitted)]; Manshul Constr. Corp. v Dormitory Auth. of State of N.Y., 79 AD2d 383, 387).”

Glaubach v PricewaterhouseCoopers, LLP  2018 NY Slip Op 30875(U)  May 9, 2018  Supreme Court, New York County  Docket Number: 157993/2016  Judge: O. Peter Sherwood is something of a nightmare.  Plaintiff is the founder, former president and a minority shareholder of a home health services company which is successful.  He takes a medical leave and all hell breaks loose.

“Numerous Personal Touch cxecutives, particularly chief executive officer David Slifkin (Slifkin), executive vice-president and general counsel Robert Marx (Marx), and vice-president Gertrude Balk (Balk), engaged in fraud, theft, looting, breach of fiduciary duty, corporate waste and
mismanagement (id.. ii 8). These executives fraudulently caused millions of dollars of payments to
he made by the company to them, which were then reported as ‘”continuing legal education·
reimbursements” (id.. 1 25, 27). ”

“Glaubach asserts that for years he had a “direct relationship of trust” with PwC, and that each
year PwC discussed the financial health of the company with Glaubach at Personal Touch’s offices
(id.,  57). He also asserts that he discussed with PwC his role as 27% shareholder, as a lender of
$10 million. and the importance of the audits to his own financial decisions (id). In 2013.  PwC v.’as
told of the fraud and improper activities. and following this, PwC reexamined and reevaluated the
previous years’ financial statements. purporting to address these issues (id,  60).
Glaubach asserts that since the fraud. looting. and accounting malpractice, the value of the
company has severely declined, and the value of his shares have plummeted. He states that he
loaned millions of dollars to the company, and that he has spent millions of dollars in legal foes to
try to repair the damage to the company, and to his own reputation (id., 62).”

Glaubach’ s first cause of action for accounting malpractice is asserted derivatively. Since
Personal Touch is incorporated in Dela\vare, Deb.ware law applies to the issue of whether Glaubach
has adequately pleaded that he demanded that the company bring the claim, or that such demand
would he futile for the purposes of his derivative claims (see Asbestos Workers Phila. Pension Fund v Rell, 137 AD3d 680, 681 p’1 Dept 2016). Under Delaware law, and Delaware Chancery Court
Rule 23.1. tu have standing to pursue a derivative claim on behalf of a company, a plaintiff ”must
make a pre-suit demand that the board pursue the contemplated action” (id. at 681-682 ). Such a presuit demand ‘·may be excused, however, if such a demand would have been futile” (id. [internal
quotation marks and citation omittcdl). Either presuit demand or demand futility must be pleaded
\vith particularity in order for a derivative claim to survive a dismissal motion (see Brehm v fasner,
746 A2d 244, 254 l Del 2000]).

ln the instant case, the amended complaint fails to allege that Glaubach ever demanded that
the Personal Touch board pursue an audit malp;acticc claim against P\VC. or that such a demand
would have been futile.”

Sexual misconduct in the educational and more especially the school sport arena has become omnipresent.  In Mulligan v Long Is. Fury Volleyball Club  2018 NY Slip Op 28132
Decided on May 1, 2018  Supreme Court, Suffolk County  Santorelli, J. we see the effects of decisions by sport officials in handling reports of sexual misconduct between the students and the coaches.

“The plaintiff claims that between January 2013 and April 2013 she had a sexual relationship with defendant Concepcion. Two of the dates on which the plaintiff claims they had sexual relations were during volleyball tournaments set up by defendant LIFVC where plaintiff and defendant Concepcion stayed with the volleyball team at hotels. The plaintiff was seeing defendant Brenner for therapy for several years before these incidents. The plaintiff alleges that sometime in early February 2013 she advised defendant Brenner that she was having a sexual relationship with defendant Concepcion, who was her assistant coach at the time for her travel volleyball team with LIFVC. The plaintiff claims that after she discussed the sexual relationship with defendant Brenner, Brenner encouraged her to tell her parents or that she would advise them of the relationship. The plaintiff advised her parents of the sexual relationship in April 2013. Defendant Concepcion was arrested in April 2013 based upon the underlying [*2]allegations contained in this complaint and pled guilty on April 4, 2014 to Endangering the Welfare of a Child. He was sentenced on July 11, 2014. The plaintiff’s birthday is in early February 1996. Defendant Brenner claims that at the time that the plaintiff advised her of the relationship with Concepcion she was already seventeen years old and had reached the age of consent for sexual activity.”

“Defendant LIFVC claims that the plaintiff remained in the physical custody and control of her parents during the volleyball tournaments where defendant Concepcion had sexual relations with the plaintiff and therefore it did not owe a duty to her. LIFVC claims that the plaintiff’s parent or parents went to all away tournaments, specifically the two where the plaintiff claims sexual encounters occurred and therefore plaintiff remained in her parents care and custody. In addition, LIFVC argues that the negligent infliction of emotional distress cause of action is duplicative of the breach of fiduciary duty cause of action and must be dismissed. In opposition, [*5]the plaintiff claims that she was separated from her parents and placed in rooms that were under the custody and control of LIFVC and its coaches. The plaintiff further alleges that her parents were in the same town for the tournaments but did not stay in the same hotels as the team. The plaintiff argues that the negligent infliction of emotional distress cause of action is not duplicative of the breach of fiduciary duty cause of action because it also encompasses the treatment of the plaintiff after the sexual contact with defendant Concepcion.

The Court concludes that, accepting as true the factual averments of the complaint and granting plaintiff every favorable inference which may be drawn from the pleading, the plaintiff has pled a cause of action for breach of fiduciary duty cognizable at law as against defendant LIFVC. However, the cause of action for negligent infliction of emotional distress is “essentially duplicative” of the breach of fiduciary duty cause of action and therefore cannot be asserted against defendant LIFVC. Therefore defendant LIFVC’s motion to dismiss is granted as to the negligent infliction of emotional distress cause of action and is otherwise denied.”

“Defendant Brenner acknowledges that she is a mandatory reporter under Soc Serv § 413 but argues that she did not have to report the sexual conduct that the plaintiff admitted to engaging in with defendant Concepcion. Brenner claims that the plaintiff advised her of the sexual contact in February 2013, when she was seventeen years old, after she had already attained the age of consent. Brenner also claims that it was not a mandatory reporting situation because defendant Concepcion was not a person legally responsible for the plaintiff. Defendant Brenner also states that she advised and convinced the plaintiff to report the sexual conduct to her mother, which the plaintiff did in April 2013. In opposition the plaintiff claims that she was under the care of defendant Brenner since she was in ninth grade and that she “disclosed to Defendant Brenner that she was being raped and sexually abused by Defendant Concepcion in January or February of 2013.”

The Court concludes that, accepting as true the factual averments of the complaint and granting plaintiff every favorable inference which may be drawn from the pleading, the plaintiff has not pled a cause of action for breach of fiduciary duty, negligent infliction of emotional distress or professional malpractice as against defendant Brenner. Brenner has shown that the plaintiff attained the age of consent before she advised Brenner of the sexual relationship she had with Defendant Concepcion. In addition, since defendant Concepcion was not a legally responsible person under the Family Court Act for plaintiff, defendant Brenner did not have a duty to report the relationship at that time. Therefore defendant Brenner’s motion to dismiss is granted and the complaint is dismissed as to defendant Brenner.”

Garcia v Polsky, Shouldice & Rosen, P.C.  2018 NY Slip Op 03339  Decided on May 9, 2018
Appellate Division, Second Department illustrates a common problem in legal representation.  Plaintiff is injured on the job, but may have a personal injury or product liability case as well.  Some firms specialize in WC work and don’t really do PI or Product liability work.  Client retains them and does not understand that the PI case will not be brought.  Then the statute runs.

Here, the case goes on against the law firm.

“”In an action to recover damages for legal malpractice, a plaintiff must demonstrate that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession’ and that the attorney’s breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages” (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442, quoting McCoy v Feinman, 99 NY2d 295, 301). “To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence” (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442).

Here, the law firm submitted documentary evidence in support of the motion establishing that its representation of the plaintiff was limited to his Workers’ Compensation claim. That submission did not utterly refute the plaintiff’s allegations, as augmented by his affidavit submitted in opposition to the motion, that the law firm gave him inaccurate legal advice. Accordingly, the Supreme Court properly denied that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(1) to dismiss the cause of action alleging legal malpractice insofar as asserted against the law firm.

Moreover, the complaint, as augmented by the plaintiff’s affidavit, sufficiently pleaded a cause of action to recover damages for legal malpractice against the law firm. The evidentiary submissions did not show that the material facts claimed by the plaintiff to be facts were not facts at all and that no significant dispute exists regarding them. Accordingly, the Supreme Court properly denied that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the cause of action alleging legal malpractice insofar as asserted against the law firm.”

Post-nuptual agreements are highly scrutinized and subject to strict rules.  In Barrett v Goldstein  2018 NY Slip Op 03325  Decided on May 8, 2018  Appellate Division, First Department we see a situation in which a post-nuptial agreement that is poor for plaintiff is left in place, and none of the reviewing attorneys can be held responsible.

“Plaintiff failed to state a claim for legal malpractice against defendant Lori H. Goldstein (Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 10 [1st Dept 2008]). The documentary evidence conclusively establishes that she was not acting as plaintiff’s attorney. Rather, the terms of the post-nuptial agreement which plaintiff now challenges, as well as numerous emails between plaintiff, his former wife, and Goldstein, reflect the parties’ understanding and agreement that Goldstein would draft the post-nuptial agreement, and the spouses’ separate counsel would review it before execution. Accordingly, plaintiff has not sufficiently alleged an attorney-client relationship between him and Goldstein, or that she was negligent and that her negligence was the “but for” cause of his alleged injuries (id.).

Neither has plaintiff stated a legal malpractice claim against the remaining defendants, who reviewed the post-nuptial agreement and/or served as his counsel in the divorce action. He cannot explain how their failure to challenge the terms of the post-nuptial agreement in the divorce action was the “but for” cause of his alleged damages, given that his subsequent counsel also did not challenge the terms of the agreement (id.). In any event, plaintiff concedes that he made a strategic decision not to challenge the terms of the agreement in the divorce action. The claims for fraud and breach of fiduciary duty are duplicative of the legal malpractice [*2]claim, since they all arose from identical facts and allege the same damages (Voutsas v Hochberg, 103 AD3d 445, 446 [1st Dept 2013], lv denied22 NY3d 853 [2013]).”

Justice Scarpula wades into a hotly contested multi-state, multi-party case to discuss, inter alia, Judiciary Law § 487.  In SPV-LS LLC v Citron  2018 NY Slip Op 30681(U)  April 16, 2018
Supreme Court, New York County  Docket Number: 152783/2017 she deftly describes the reach of Judiciary Law § 487 in the first department:

“An attorney may be civilly liable for treble damages to an injured party for a violation of Judiciary Law §487 if the attorney is found to be “guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party.” Judiciary Law §487(1). Allegations of the defendant attorney’s deceit “must be . stated with particularity.” Facebook, Inc. v DLA Piper LLP (US), 134 AD3d 610, 615 (1st Dept 2015) (internal citation omitted); Briarpatch Ltd., L.P. v Frankfurt Garbus Klein & Selz, P.C., 13 AD3d 296, 297 (1st Dept 2004).

Relief under this statute.”‘is not lightly given’ and requires a showing of ‘egregious conduct or a chronic and extreme pattern of behavior’ on the part of the defendant attorneys that caused damages.” Facebook, Inc., 134 AD3d at 615 citing Chowaiki & Co. Fine Art Ltd. v. Lacher, 115 A.D.3d 600, 601 (1st Dept 2014) and Savitt v. Greenberg Traurig, LLP, 126 A.D.3d 506, 507 (1st Dept 2015); see also Kaminsky v Herrick, Feinstein LLP, 59 AD3d 1, 13 (1st Dept 2008); Solow Mgt. Corp. v Seltzer, 18 AD3d 399, 399-400 (1st Dept 2005).

For conduct to be actionable under Judiciary Law §487, the alleged deceit must have either been directed at a court or have occurred during the pendency of a judicial proceeding. Costa/as v Amalfitano, 305 AD2d 202, 204 (1st Dept 2003); see also Jacobs v Kay, 50 AD3d 526, 527 (1st Dept 2008). Further, the “reach of [Judiciary Law §487] extends only to misconduct by attorneys in connection with proceedings before New York courts.” All. Network, LLC v Sidley Austin LLP, 43 Misc 3d 848, 864-65 (Sup Ct, NY County 2014) (internal citations omitted) citing Schertenleib v Traum, 589 F2d 1156, 1166 (2d Cir 1978); Weksler v. Kessler, 2008 WL 2563483 (Sup Ct, NY County 2008); S. Blvd. Sound, Inc. v Felix Storch, Inc., 165 Misc 2d 341, 344 (Civ Ct, NY County
1995), affd as mod, 167 Misc 2d 731 (App Term, 1st Dept 1996)  Accord A.R.K. Patent Intern., LLC v Levy, 50 Misc 3d 1204(A) (Sup Ct, Monroe County 2014), affd sub nom. A.R.K. Patent Intern., L.L.C. v Levy, 134 AD3d 1460 (4th Dept 2015); Kaye Scholer LLP v CNA Holdings, Inc., 2010 WL 1779917, at* 1 (SDNY 2010); Cindy Royce Creations, Ltd. v Simmons & Simmons, 1993 WL 288291, at *5 (SDNY 1993); Nardella v Braff, 621 F Supp 1170, 1172 (SDNY 1985). But see Cinao v.
Reers, 27 Misc 3d 195 (Sup Ct, Kings County 2010). “

Plaintiff was fired from a municipal job, but may have had a good defense on appeal.  The attorneys withdrew the appeal. Legal Malpractice?

Roth v. Ostrer , 2018 NY Slip Op 03218 Decided on May 3, 2018 Appellate Division, First  Department suggests that it may well have been a departure from good practice.

“Plaintiff alleges that defendants committed legal malpractice by withdrawing, without first consulting with him, his appeal from a November 2012 order of Supreme Court, Orange County (Lawrence H. Ecker, J.), that dismissed his article 78 petition to annul his summary termination from the Newburgh Police Department, without a pretermination hearing pursuant to Civil Service Law § 75 or Town Law § 155.

Defendants failed to demonstrate as a matter of law that their withdrawal of the appeal was not negligence but a reasonable strategic decision (see Rodriguez v Lipsig, Shapey, Manus & Moverman, P.C., 81 AD3d 551 [1st Dept 2011]). The withdrawal resulted in plaintiff’s forgoing a pretermination hearing, which would have entitled him to procedural safeguards and allowed for disciplinary measures less severe than termination. By contrast, the reinstatement hearing to which the Town of Newburgh consented upon vacatur of plaintiff’s conviction and his plea to harassment in the second degree, a violation (Penal Law § 240.26), and at which defendants represented plaintiff, was limited to whether, in the Town’s discretion, plaintiff should be reinstated to his position (see Civil Service Law § 75; Town Law § 155; Public Officers Law § 30[1][e]).

The allegations in the complaint establish that but for defendants’ conduct in withdrawing the appeal from Justice Ecker’s ruling, and in sending a different lawyer than the one promised to represent him at the reinstatement hearing, he would not have incurred damages (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]; see Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 271-272 [1st Dept 2004]). Plaintiff showed that he would have prevailed on the appeal had it not been withdrawn, because Justice Ecker erred in concluding that plaintiff’s conviction of assault in the third degree, based on criminal negligence (Penal Law §§ 15.05[4]; 120.00[3]), a misdemeanor, constituted a violation of his oath of office, i.e., arose from “knowing or intentional conduct indicative of a lack of moral integrity,” and warranted termination without a hearing pursuant to Public Officers Law § 30(1)(e) (Matter of Duffy v Ward, 81 NY2d 127, 135 [1993]). “