Moran Enters., Inc. v Hurst  2018 NY Slip Op 02321  Decided on April 4, 2018  Appellate Division, Second Department illustrates why secondary issues may lead to dismissal.  Here, the failure to list a claim on a bankruptcy schedule along with the failure to pay franchise taxes doomed a variety of legal malpractice claims.

“The plaintiff retained attorney Margaret Hurst to represent it in certain matters, including filing a second Chapter 11 petition for bankruptcy on its behalf. A few months later, Hurst left active practice and transferred her clients to another attorney. The bankruptcy proceeding was subsequently dismissed. The plaintiff thereafter retained new attorneys, who filed a third Chapter 11 bankruptcy petition on its behalf. The asset schedules filed with the plaintiff’s third bankruptcy petition stated that the plaintiff’s only asset was certain real property, and failed to list any causes of action against Hurst. After the mortgagee of the real property sought to vacate the bankruptcy stay, the bankruptcy court dismissed the plaintiff’s third bankruptcy petition based upon the lack of equity in the property or other assets with which to pay the creditors.”

“The doctrine of judicial estoppel precludes a party from taking a position in one legal proceeding which is contrary to that which it took in a prior proceeding, simply because its interests have changed (see Davis v Citibank, N.A., 116 AD3d 819, 820; Festinger v Edrich, 32 AD3d 412, 413). “The twin purposes of the doctrine are to protect the integrity of the judicial process and to protect judicial integrity by avoiding the risk of inconsistent results in two proceedings'” (Davis v Citibank, N.A., 116 AD3d at 821, quoting Bates v Long Is. R.R. Co., 997 F2d 1028, 1038 [2d Cir] [citation omitted]). “[T]he integrity of the bankruptcy system depends on full and honest disclosure by debtors of all of their assets” (Rosenshein v Kleban, 918 F Supp 98, 104 [SD NY]). By failing to list causes of action on bankruptcy schedules of assets, the debtor represents that it has no such claims (see Crawford v Franklin Credit Mgt. Corp., 758 F3d 473, 486 [2d Cir]). Thus, the doctrine of judicial estoppel may bar a party from pursuing claims which were not listed in a previous bankruptcy proceeding (see B.N. Realty Assoc. v Lichtenstein, 21 AD3d 793, 798; McIntosh Bldrs. v Ball, 264 AD2d 869, 870; Cafferty v Thompson, 223 AD2d 99, 102).

For the doctrine to apply, there must be “a final determination in the bankruptcy proceeding endorsing the party’s inconsistent position concerning his or her assets” (Koch v National Basketball Assn., 245 AD2d 230, 231). However, a discharge from bankruptcy is not required for the application of the doctrine. “The bankruptcy court may accept’ the debtor’s assertions by relying on the debtor’s nondisclosure of potential claims in many other ways” (Hamilton v State Farm Fire & Cas. Co., 270 F3d 778, 784 [9th Cir]; see In re Coastal Plains, Inc., 179 F3d 197, 210 [5th Cir]).”

“The plaintiff further contends that leave to amend the answer should have been denied because Hurst’s delay in asserting the defense would prejudice it due to the expiration of the statute of limitations for a legal malpractice cause of action against its subsequent bankruptcy attorneys who failed to list the claims against Hurst in the bankruptcy schedules. However, the plaintiff asserted a timely legal malpractice cause of action against the subsequent bankruptcy attorneys, which was dismissed because the plaintiff was dissolved by the Secretary of State for failure to pay franchise taxes, and the plaintiff lacked the capacity to enforce obligations arising out of the representation until it secured retroactive de jure status by payment of delinquent franchise taxes (see Moran Enters., Inc. v Hurst, 66 AD3d at 976). Thus, the plaintiff’s loss of any claims against those attorneys was due to its own failure to pay the delinquent franchise taxes and to timely recommence the action against those attorneys (see CPLR 205[a]), and was not the result of Hurst’s delay in asserting the defense (see generally CPLR 203[f]; Pendleton v City of New York, 44 AD3d 733, 736; [*3]cf. Daughtry v Rosegarten, 180 Misc 2d 102, 103-104 [App Term 2d Dept]).”

Sometimes the First Department writes a long opinion, sometimes only a paragraph.  Here, in Heth v Satterlee Stephens Burke & Burke LLP  2018 NY Slip Op 02307  Decided on April 3, 2018
Appellate Division, First Department the issues were distilled, the opinion was short.

“Plaintiff alleges that defendants, representing him pursuant to an engagement letter while simultaneously representing others with conflicting interests, in drafting a December 2009 agreement, negligently failed to include a provision whereby the obligations he owed to another party to the contract under a prior agreement would be superseded or released according to the alleged oral understanding between him and the other party, and that defendants negligently failed to advise him that the other party’s oral promises were unenforceable due to a written modification requirement in the prior agreement. These allegations state a cause of action for legal malpractice (see Brooks v Lewin, 21 AD3d 731, 734 [1st Dept 2005], lv denied 6 NY3d 713 [2006]). The documentary evidence submitted by defendants does not utterly refute plaintiff’s factual allegations (see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]).”

Sadly, there are a substantial number of legal malpractice cases brought by pro-se litigants.  While legal malpractice cases suffer a disproportionately high rate of dismissal  in all settings, in the pro-se area the dismissal rates are very high.  Knobel v Wei Group, LLP  2018 NY Slip Op 02292
Decided on April 3, 2018 Appellate Division, First Department is an example of the phenomenon.  The corporate plaintiff is dismissed for having no attorney, and the individual plaintiff suffers a similar fate.

“The motion court correctly dismissed, as a nullity, the claims of the corporate plaintiff, because the corporate plaintiff lacked representation by a licensed attorney when it brought the claims (seeCPLR 321[a]; Jimenez v Brenillee Corp., 48 AD3d 351, 352 [1st Dept 2008]).

The motion court correctly dismissed the claims against defendant Wei Group, LLP, as personal service of process was not properly effectuated with respect to this limited liability partnership (seeCPLR 310-a).

Plaintiffs failed to state a cause of action for fraud, as they never alleged that they paid the allegedly fraudulent bills and suffered injury as a result (see Small v Lorillard Tobacco Co., 94 NY2d 43, 57 [1999]).

The motion court correctly determined that the legal malpractice claim is barred by the three-year statute of limitations (see CPLR 214[6]). No triable issue of fact exists as to whether the doctrine of continuous representation tolled the statute of limitations. It is undisputed that on March 12, 2012, plantiff Steven M. Knobel sent defendant Eric Wei an email directing Wei “to cease all [ ] work” and that shortly thereafter, Knobel sent an email to the court indicating his desire to appear pro se. Contrary to plaintiffs’ contention, there is no indication of “an ongoing, continuous, developing and dependent relationship between the client and the attorney” or a “mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim” after March 12, 2012 (Matter of Merker, 18 AD3d 332, 332-333 [1st Dept 2005] [internal quotation marks omitted]).

Plaintiffs’ argument that the billing invoices show that defendants continued to represent them up until and after March 19, 2012 is unpersuasive. The invoices in the record do not indicate that after March 12, 2012 defendants performed any substantive legal work or provided any legal advice on the matters which plaintiffs allege defendants committed malpractice (see Shumsky v Eisenstein, 96 NY2d 164, 168 [2001]). Rather, the invoices show that plaintiffs were billed for work pertaining to communications with the court, client, and subsequent counsel, [*2]which did not toll the statute of limitations (see Rupolo v Fish, 87 AD3d 684, 685 [2d Dept 2011]).”

Thomas v Weitzman  2018 NY Slip Op 30528(U)  March 26, 2018  Supreme Court, New York County  Docket Number: 151876/2016  Judge: Kathryn E. Freed is the story of a plaintiff injured at at NYCHA premises.  Taken to the hospital for surgery, she claims medical malpractice.  These few facts immediately summon forth the questions of suing a municipal authority, the timing of service upon that authority and how a medical malpractice case arising from a negligent act is apportioned.  Sadly, fumbling of the preliminaries ended in no law suit at all.  The legal malpractice wranglings followed.

“Thon1as retained third-party defendant Baron Associates to assert a personal injury claim against NYCHA. She also retained third-party defendant the Perecman Firm to pursue a medical malpractice claim against third-party defendants Richmond University Medical Center and Dr. Brandon.
On December 21, 2011, Baron Associates served and filed a notice of claim against NYCHA and the City of New York. According to Baron Associates, Thomas failed to appear for her initial General Municipal Law (GML) § 50-h examination, scheduled for February 21, 2012, as well as a rescheduled examination on April 30, 2012. Subsequently, Baron Associates sent Thomas a disengagement letter (Disengagement Letter), dated May 17, 2012. The Disengagement Letter advised Thomas that: Baron Associates would no longer represent her, due to her “lack of cooperation and failure to participate in the case”; the statute of limitations for a negligence claim
against NYCHA was one year and 90 days and would expire on February 15, 2013; and her appearance at a 50-h examination was a prerequisite for commencing a lawsuit. McDonald
affirmation, exhibit Q. Baron Associates asserts that it had no further contact with Thomas. ”

“According to the Perecman Firm, it never commenced an action on Thomas’s behalf. By
letter dated April 26, 2012, Thomas informed the firm that she was discharging it and that she had
retained the Weitzman Defendants. Enclosed was a “Consent to Change Attorney” form (Change
of Attorney Form), already executed by Thomas and Weitzman, as well as a letter from Weitzman,
instructing the Pe.recman Firm to contact Weitzman Law regarding the transfer of Thomas’s file
and payment of the Perecman Finn’s disbursements. Rigelhaupt affirmation, exhibit 4. According
to the Perecman Firm, it executed and returned the Change of Attorney Form, along with a request
for payment of its disbursements. It allegedly sent follow-up requests for payment by letters dated
August 9 and October 2, 2012, but Weitzman Law never paid. ”

In a complicated series of motion events, Judge Freed denied dismissal and found frivolous conduct.  The details are too complicated and Judge Freed’s writing is too good for publishing only certain snippets.  We ask you to read the balance of the case, especially starting at page 8.

 

 

Legal malpractice is always an exercise in hindsight, since it is always a comparison of the actual outcome of attorney representation v. the hypothetical better outcome had the attorney not departed from good practice.  Nonetheless, Lisi v Lowenstein Sandler LLP  2017 NY Slip Op 32411(U)  November 16, 2017  Supreme Court, New York County  Docket Number: 160298/2016
Judge: Shirley Werner Kornreich is a good example of how the court treats a “hindsight” case.

“In May 2012, Lisi hired LS, a law firm with its principal office in New York City, to
negotiate the terms of his employment as a Senior Vice President with Avadel Pharmaceuticals
f/k/a as Flamel Technologies SA and Eclat Pharmaceuticals, LLC (Flamel). ” “On April 4, 2015, Lisi hired LS to negotiate the terms of his separation from Flamel. Lisi’s separation agreement, which was executed on April 7, 2015, accelerated the vesting of the 495,000 stock options granted to Lisi under his employment agreement and Flamel’s stock option plans, and extended the period in which Lisi could exercise his options.”

“Lisi’s malpractice claim nevertheless fails because his allegations are insufficient to show
that but for LS’s failure to give proper tax advice, his trading losses would have been avoided.
See Leder v Spiegel, 31 AD3d 266, 268 (I st Dept 2006) (“The failure to demonstrate proximate
cause mandates the dismissal of a legal malpractice action regardless of whether the attorney was negligent.”). Lisi does not (and cannot) allege that LS’s failure to advise him had any effect on
the nature of his tax liability-the exercise of his options was always going to be subject to
ordinary income tax. He does not allege that he would not have executed the separation
agreement had he been properly advised. Rather, Lisi’s theory of loss causation is that, absent
proper tax advice, he was unaware of the true amount of the tax liability incurred by the exercise
of his options, and was therefore unable to strategically manage his investment post-exercise in a
manner that minimized market risk and allowed him to realize “the optimal market value” of his
shares. AC iii! 68-71. He acknowledges that the exercise of his options exposed him to “market
fluctuations in the stock price of Flame!,” but asserts that, with proper advice, he would not have
been left vulnerable to such fluctuations because he “would have locked in his sales price for all
options exercised to allow and account for the fixed exercise price and tax basis,” and “would
have capitalized on the sale of the shares at a fixed and higher price.” iii! 74, 82-83.
Though vague, Lisi appears to allege that, properly advised, he would have: shorted more
Flame! stock, thereby eliminating market risk for a corresponding number of options by locking
in the price for those shares; only exercised options that he could hedge with a corresponding
short sale; and exercised his options and/or sold his shares at different, more opportune times.
Such speculative allegations of what Lisi might have done differently, made with the benefit of
hindsight, do not suffice to establish the causal link necessary to state a prima facia claim of legal
malpractice. See Heritage Partners, LLC v Stroock & Stroock & Lavan LLP, 133 AD3d 428,
429 (1st Dept 2015) (affirming dismissal of malpractice claim based on “allegations ‘couched in
terms of gross speculations on future events”‘), quoting Sherwood Group, Inc. v Dornbush,
Mensch, Mandelstam & Silverman, 191 AD2d 292, 294 (1st Dept 1993 ); Leff v Fulbright &
Jaworski, LLP, 78 AD3d 531, 533 (I st Dept 2010) (“[P]laintiff cannot recover damages that are  grossly speculative.”); Barbara King Family Trust v Voluto Ventures LLC, 46 AD3d 423, 424-25
(1st Dept 2007) (“mere speculation” insufficient to demonstrate proximate cause).
Lisi’s suggestion that he would have eliminated market risk by engaging in more short
sales is belied by his allegation that, when he exercised his shares, he had already shorted Flame)
stock “to his utmost capacity.” AC~ 56; Dkt. 50 (Lisi Aff.) ~ 11. He alleges no facts to suggest
that additional short sales were possible, but nevertheless speculates that he might have pursued
such a strategy. Equally speculative is Lisi’s suggestion that he might not have exercised option
shares that he could not hedge with a corresponding short sale. Such a course of action makes
sense only with hindsight knowledge that Flamel’s stock price was about to collapse. By not
exercising, Lisi would have potentially allowed more than half of his options to expire at a point
in time when the value of the associated shares well exceeded his tax liabilities. The
suggestion that Lisi would have left millions of dollars on the table to avoid exposure to market
risk is simply not credible. Lisi knowingly assumed the very market risk that he now, with the
benefit of hindsight, claims that he would have sought to avoid when he exercised all his options,
and not just those that were hedged by a corresponding short sale. “

Legal Malpractice claims accrue at the time a mistake is made.  The Statute of limitations  in legal malpractice, three years, is a difficult and high barrier to overcome.  Continuous representation may toll the running of the statute, but social policy has set a number of elements required for continuous representation to be permitted.  Stein Indus., Inc. v Certilman Balin Adler & Hyman, LLP  2017 NY Slip Op 02688 [149 AD3d 788]  April 5, 2017  Appellate Division, Second Department gives a cogent explanation.

“The statute of limitations for the cause of action alleging legal malpractice is three years (see CPLR 214 [6]; Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d 733, 735 [2015]). The cause of action to recover damages for professional negligence, which arose from the same facts as the legal malpractice claim and did not allege distinct damages, was likewise governed by the three-year statute of limitations (see Scott v Fields, 85 AD3d 756 [2011]; see also Farage v Ehrenberg, 124 AD3d 159, 159 [2014]). A claim to recover damages for legal malpractice accrues when the malpractice is committed (see Shumsky v Eisenstein, 96 NY2d 164, 166 [2001]; Aqua-Trol Corp. v Wilentz, Goldman & Spitzer, P.A., 144 AD3d 956, 957 [2016]). “However, pursuant to the doctrine of continuous representation, the time within which to sue on the claim is tolled until the attorney’s continuing representation of the client with regard to the particular matter terminates” (Aqua-Trol Corp. v Wilentz, Goldman & Spitzer, P.A., 144 AD3d at 957; see Shumsky v Eisenstein, 96 NY2d at 164; Pellati v Lite & Lite, 290 AD2d 544, 545 [2002]). For the continuous representation doctrine to apply, “there must be clear indicia of an ongoing, continuous, developing, and dependant relationship between the client and the attorney which often includes an attempt by the attorney to rectify an alleged act of malpractice” (Luk Lamellen U. Kupplungbau GmbH v Lerner, 166 AD2d 505, 506-507 [1990]; see Pellati v Lite & Lite, 290 AD2d at 545).

Here, the defendant satisfied its initial burden by demonstrating, prima facie, that the alleged legal malpractice occurred more than three years before this action was commenced in March 2015 (see Kennedy v H. Bruce Fischer, Esq., P.C., 78 AD3d 1016, 1017 [2010]). In opposition, however, the plaintiffs raised a question of fact as to whether the applicable statute of limitations was tolled by the continuous representation doctrine. The plaintiffs submitted Andrew Stein’s affidavit, in which he averred that he met with members of the defendant on July 26, 2012, to determine how to rectify the pension liability issue. Andrew indicated that he was not satisfied with their recommendations concerning how to rectify the issue and directed them to formulate another idea. Andrew’s affidavit was sufficient to raise a question of fact as to whether the defendant engaged in a course of continuous representation intended to rectify or mitigate the initial act of alleged malpractice (see Melnick v Farrell, 128 AD3d 1371, 1372 [2015]; DeStaso v Condon Resnick, LLP, 90 AD3d 809, 812-813 [2011]; Gravel v Cicola, 297 AD2d 620, 621 [2002]).”

What is discoverable and what is not discoverable in a professional negligence setting influences the viability of the claims.  Attorney-Client privilege, work-product privilege and burdensomeness are all considerations in whether the material is discoverable.  Judge Shulman gives a cogent explanation of the competing arguments in American Med. Alert Corp. v Evanston Ins. Co.
2018 NY Slip Op 30479(U)  March 23, 2018  Supreme Court, New York County  Docket Number: 655974/2016 .

“The question of whether insurance reserve information is discoverable is not easily answered. Preliminarily, Evanston never claimed that when it established a reserve (after AMAC notified insurer of the Lynch Action to which it was not a party in November 2015), insurer did so after consulting with coverage counsel which, in turn, would subject this information to attorney-client privilege. Rather, Evanston deems reserve information presumably referenced in the redacted claim notes not relevant to resolve the issue of coverage and not discoverable, because “the establishment of a reserve may merely reflect a prudent insurer’s recognition of the risks of inherent litigation rather than an admission of coverage or liability … ” National Union Fire Ins. Co. of Pittsburgh, Pa: v H&R Block, Inc., 2014 WL 4377845 at *3 (SONY, 2015).

As stated earlier, Evanston urges the court to simply presume the fact that every one of its adjusters’ claim note entries indisputably made on and after February 16, 2016 (retention of coverage counsel) and on and after April 27, 2016 (formal declination of defense coverage) is either protected as work product or by attorney-client privilege and/or prepared in anticipation of coverage litigation. Generally, there is case. law supporting this position and this court finds Bovis Lend Lease LMB, Inc. v Seasons Contracting Corp., 2002 WL 31729693 at *4 (SONY 2002) particularly instructive
(Exhibit B to Cohen Sur-Reply):

Insurance claim files may present difficult issues regarding where the line
should be drawn between documents prepared in the ordinary course of
the insurer’s business which, by its very nature, involves claim
investigation and analysis and documents prepared in anticipation of
litigation. As many courts have noted, it is often difficult to determine
whether documents prepared by an insurance company or its
representatives are entitled to work-product protection because the
insurers are in the business of investigating and adjusting claims. Where,
however, documents are generated after the insurer has declined
coverage of claim or after the insurer has referred the matter to counsel, it
can generally be said that insurer is fairly anticipating litigation and thus
product immunity will typically attach. Certainly, documents created after
litigation has already commenced, when the claims handlers’ work has
plainly shifted from investigating the initial claim to assisting in the defense
of the pending litigation and evaluating litigation exposure, are likely to be
covered by the work product doctrine (quotations, parentheses and
citations omitted).

However, Evanston’s adjusters’ unredacted claim notes for the period November 2015 through February 12, 2016, seemingly tell a different story prior to the formal declination of coverage under the Policy in April 2016. ”

“Evanston bears the burden of establishing that its claim note entries after these significant dates are subject to attorney-client privilege and/or protected as work product. Despite insurer choosing not to file any specific fact-based affidavit by its representative with personal knowledge of the relevant facts, this court can fairly conclude that claim note entries made after April 27, 2016 (when Evanston issued a formal letter to plaintiff declining coverage under the Policy) were made in anticipation of AMAC initiating coverage litigation for declaratory and related relief, are work product or privilege protected and not discoverable.

Despite retaining coverage counsel on February 16, 2016, the same cannot be said with presumptive certainty about Evanston’s adjusters’ claim note entries made between that date and April 27, 2016. Relying on insurer’s claim notes·entries made prior to February 16, 2016, AMAC has established a factual predicate for the court’s discretionary in camera review of Evanston’s adjusters’ claim notes made during this particular period to determine whether they are work product or protected by attorney client privilege. Spearin v Linmar, 129 AD3d 528 (1’1 Dept 2015); see generally, Forman
v Henkin, 134 AD3d 529, 533 (1’1 Dept 2015), Accordingly, this court grants the branch of AMAC’s order to show cause to deliver a copy of unredacted claim notes for this particular period to the courthouse at 60 Centre Street, Room 325, New York, New York 10007 within two business days after the issuance of this order. This court will then issue an order apprising the parties of its findings. “

There are a whole group of social policy roadblocks to legal malpractice litigation.  The additional element of “but for” causation is one; the requirement of privity is another; the exemption for strategic decisions is a third.  A very black and white limitation is that of legal malpractice by a criminal defense lawyer.  Put in short, it is required that the client be acquitted, have the conviction reversed on appeal or be exonerated before a legal malpractice suit may be brought.

This is the short lesson of Braxton v Segal  2018 NY Slip Op 50393(U)  Decided on March 26, 2018  Supreme Court, New York County  Reed, J. in which a pro-se claimant has the complaint dismissed.

“With regard to plaintiff’s motion for summary judgment as to Segal, “to state a cause of action for legal malpractice arising from negligent representation in a criminal proceeding, plaintiff must allege his innocence or a colorable claim of innocence of the underlying offense” (see Carmel v. Lunney, 70 NY2d 169). Plaintiff has not done so here. Instead, plaintiff alleges that Segal’s prior complaints, admonishments and suspensions from the practice are conclusive proof of malpractice in his case, entitling plaintiff to monetary relief. Such a clustering of unfortunate facts, however, does not translate into an articulable claim of legal malpractice. Segal was, it is true, suspended from the practice of law during the representation of plaintiff’s case. The Appellate Division of the First Judicial Department ordered Segal to transfer his cases to another attorney in good standing. While it certainly is an inconvenient and untimely disruption for any criminal defendant to receive a new attorney, this alone is not sufficient to sustain a cause of action for legal malpractice. Accordingly, plaintiff’s motion for summary judgment as against Segal is denied. Moreover, again searching the record pursuant to CPLR 3212(b), the court grants summary judgment to defendant Segal dismissing the complaint as against him — inasmuch as plaintiff fails to present anywhere in the record even a colorable claim of innocence in connection with the criminal matter for which defendant Segal provided him representation (see Carmel v. Lunney, supra; Merritt Hill Vineyards, supra).”

 

Court appoints a jewelry appraiser as a neutral, and the neutral then send retainer agreements to the parties.  Only one party signs the retainer agreement.  Appraiser then renders report which one party disputes.  Can there be a professional negligence claim?

Lintz v Aretz  2018 NY Slip Op 30455(U)  March 12, 2018  Supreme Court, New York County
Docket Number: 651766/2015  Judge: Barbara Jaffe says “no.”

“A party asserting a claim for professional malpractice or negligence must establish the
existence of a contractual .relationship or a bond between it and the professional that is the
functional equivalent of contractual privity. (Bullmore v Ernst & Young Cayman Is., 45 AD3d
461 [1st Dept 2007]). A relationship that constitutes the functional equivalent of contractual privity is one where there is: (1) awareness that information will be used for a particular purpose;
(2) reliance by a party in furtherance of that purpose; and (3) some conduct by the other party
linking them to the party and indicating their understanding of their reliance. (Ossining Union
Free School Dist. v Anderson LaRocca Anderson, 73 NY2d 417 [ 1989]).
Moreover, to the extent that a claim for negligent appraisal may be deemed one for
negligent misrepresentation, the party asserting the negligence must establish both reliance and
the existence of a special relationship between it and other party. (See e.g., Ravenna v Christie’s
Inc., 289 AD2d 15 [1st Dept 2001] [where plaintiff brought negligent misrepresentation claim
based on allegation that art specialist gave him wrong information about artwork’s origin,
causing damage, claim dismissed as no special relationship existed between them,
notwithstanding specialist’s awareness that plaintiff would rely on advice]).
Having inconsistently alleged that Aretz was both court-appointed and improperly
retained only by her husband and that only her husband was Aretz’s client, plaintiff thereby
demonstrates: 1) that there was no contractual relationship or its functional equivalent between
her and Aretz; and 2) that neither she nor her husband had either a special relationship or one ·
constituting the functional equivalent of privity with Aretz, as Aretz’s duty was to the court
rather than to either litigant. While she alleges that defendants failed to provide her with the
retainer agreement, thereby thwarting her from signing it and establishing a special relationship,
defendants prove that a copy of the agreement was faxed both to her and to her divorce attorney.
Thus, plaintiffs mere denial of receipt raises no triable issue of fact as to whether there was or
should have been a contractual relationship between her and defendants. To the extent she now
disputes the appointment, she does so in a fatally conclusory fashion, and fails to explain the
contrary allegation in her complaint.

There is also no evidence that plaintiff was unable to hire her own appraiser or that,
having received Aretz’s appraisal before the trial, she could not verify it before it was offered at
trial. And, while plaintiff alleges that Aretz’s retainer agreement with her husband violated his
ethical or expert duty to act as a neutral evaluator, that fact alone is insufficient to hold him
liable. (See e.g., Cohen v Kachroo, 115 AD3d 512 [l51 Dept 2014] [violation of rules of
professional conduct or ethical rules, in and of itself, does not constitute malpractice]).”

Judiciary Law §487 is an ancient part of the common law, so old that it was enacted merely 30 years after the Magna Carta.  That’s old!  Here, in Ehrenkranz v 58 MHR, LLC  2018 NY Slip Op 01902    Decided on March 21, 2018 Appellate Division, Second Department applied its version of JL 487 (which differs from the First Department’s version) and found that while there may have been some confusion, there was no intent to deceive.

“The Supreme Court properly granted that branch of LePatner’s motion which was to dismiss the 16th cause of action in the third-party complaint, although the dismissal should have been pursuant to CPLR 3211(a)(7) and not CPLR 3211(a)(1) (see Smalls v St. John’s Episcopal Hosp., 152 AD3d 629). Accepting the facts alleged in the third-party complaint as true, and according the third-party plaintiffs the benefit of every favorable inference (see Leon v Martinez, 84 NY2d 83, 88; Raach v SLSJET Mgt. Corp., 134 AD3d 792, 793), the third-party complaint failed to allege facts sufficient to find that LePatner acted “with intent to deceive the court or any party” (Judiciary Law § 487; see Klein v Rieff, 135 AD3d 910; Savitt v Greenberg Traurig, LLP, 126 AD3d 506; Fleyshman v Suckle & Schlesinger, PLLC, 91 AD3d 591, 592-593).”