Betz v Blatt  2018 NY Slip Op 02445 and 2444  Decided on April 11, 2018  Appellate Division, Second Department and   are two extensively explained and well-reasoned decisions in the otherwise barren trust and estates legal malpractice world, in which a Judiciary Law § 487 claim is upheld.  One reason for the relative lack of cases is the requirement that only the executor has standing to raise losses to the estate.  This precludes beneficiaries from successful litigation against an attorney.

Read the case for its discussion of JL § 487, aiding and abetting fraud and the obligations of the estate’s attorneys in reviewing accountings.

“Judiciary Law § 487 imposes civil and criminal liability on any attorney who “(1) [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, (2) [w]ilfully delays his client’s suit with a view to his own gain” (Judiciary Law § 487; see Gumarova v Law Offs. of Paul A. Boronow, P.C., 129 AD3d 911). A cause of action alleging a violation of Judiciary Law § 487 must be pleaded with specificity (see Betz v Blatt, 116 AD3d at 817; Putnam County Temple & Jewish Ctr., Inc. v Rhinebeck Sav. Bank, 87 AD3d 1118, 1120).

Judiciary Law § 487 “focuses on the attorney’s intent to deceive, not the deceit’s success” (Amalfitano v Rosenberg, 12 NY3d 8, 14). Accordingly, although injury to the plaintiff is an essential element of a Judiciary Law § 487 cause of action seeking civil damages (see Klein v Rieff, 135 AD3d 910, 913; Gumarova v Law Offs. of Paul A. Boronow, P.C., 129 AD3d at 911), “recovery of treble damages under Judiciary Law § 487 does not depend upon the court’s belief in a material misrepresentation of fact in a complaint” (Amalfitano v Rosenberg, 12 NY3d at 15). A party’s legal expenses in defending the lawsuit may be treated as the proximate result of the misrepresentation (see id.).

The Supreme Court properly denied that branch of Pieragostini’s motion which was for summary judgment dismissing the cause of action alleging a violation of Judiciary Law § 487 [*3]insofar as asserted against him because he failed to establish his prima facie entitlement to judgment as a matter of law (see Mazel 315 W. 35th LLC v 315 W. 35th Assoc. LLC, 120 AD3d 1106, 1107). In his deposition testimony submitted in support of his motion for summary judgment, Pieragostini admitted that, in the underlying proceeding, he sought approval from the Surrogate’s Court of an accounting and an addendum based on information provided by the former executor, as well as his accountant and former attorney, which he did not independently verify. Accordingly, Pieragostini did not eliminate triable issues of fact as to whether he acted with an intent to deceive the court or the plaintiff (see Judiciary Law § 487[1]; Mazel 315 W. 35 LLC v 315 W. 35th Assoc. LLC, 120 AD3d at 1107). Moreover, the plaintiff raised triable issues of fact by alleging that Pieragostini filed a blatantly deficient accounting which was inaccurate and incomplete, and that the addendum further delayed the administration of the estate, causing additional legal fees from the estate to Pieragostini, along with other financial injury to the plaintiff. Accordingly, the Supreme Court properly denied that branch of Pieragostini’s motion which was for summary judgment dismissing the cause of action alleging a violation of Judiciary Law § 487 insofar as asserted against him.”

“However, the Supreme Court erred in denying that branch of the Sirignano defendants’ motion which was for summary judgment dismissing the cause of action alleging that they aided and abetted fraud. The elements of a cause of action to recover damages for aiding and abetting fraud are (1) the existence of an underlying fraud, (2) knowledge of the fraud by the aider and abettor, and (3) substantial assistance by the aider and abettor in the achievement of the fraud (see Fox Paine & Co., LLC v Houston Cas. Co., 153 AD3d 678, 679; Swartz v Swartz, 145 AD3d 818, 824). “Substantial assistance requires an affirmative act on the defendant’s part” (Fox Paine & Co., LLC v Houston Cas. Co., 153 AD3d at 679 [internal quotation marks omitted]; see Smallberg v Raich Ende Malter & Co., LLP, 140 AD3d 942, 944). Mere inaction by an alleged aider or abettor constitutes substantial assistance only if the defendant owes a fiduciary duty directly to the plaintiff (see Smallberg v Raich Ende Malter & Co., LLP, 140 AD3d at 944).

The elements of an underlying fraud are (1) material representations that were false, (2) the actor knew the representations were false and made them with the intent to induce reliance by the plaintiff, (3) the plaintiff justifiably relied on the actor’s misrepresentations, and (4) the plaintiff was injured as a result of the misrepresentations (see Lee Dodge, Inc. v Sovereign Bank, N.A., 148 AD3d 1007, 1008; Cash v Titan Fin. Servs., Inc., 58 AD3d 785, 788).”

Bench and Bar read appellate decisions in order to understand how courts think, how they decide and for guidance in how to present cases.  Panos v Eisen  2018 NY Slip Op 02480  Decided on April 11, 2018  Appellate Division, Second Department could have been instructive, could have explained why Plaintiff”s proofs were lacking, could have illustrated the black-letter law.  The decision gives no explanation at all.

“To meet their initial burden on that branch of their motion which was for summary judgment dismissing the complaint, the defendants were required to “demonstrate, prima facie, either that they did not breach their duty to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession or that any breach of that duty did not proximately cause the plaintiff to suffer actual and ascertainable damages” (Montero v Cohen, 104 AD3d 654, 655; see Ferrigno v Jaghab, Jaghab & Jaghab, P.C., 152 AD3d 650, 652; Ragunandan v Donado, 150 AD3d 1289, 1290). The defendants established, prima facie, both the lack of a breach of duty and the lack of proximate cause. Therefore, in order to defeat the defendants’ motion, the plaintiff had “to demonstrate the existence of a triable issue of fact in connection with both matters” (Montero v Cohen, 104 AD3d at 655; see Stukas v Streiter, 83 AD3d 18, 25). Since the plaintiff failed to raise [*2]a triable issue of fact as to whether the defendants’ alleged breach of the duty of care proximately caused him to suffer actual and ascertainable damages, the Supreme Court should have granted that branch of the defendants’ motion which was for summary judgment dismissing the complaint.”

All too frequently a person is injured at work, retains an attorney, and a problem arises several years later.  Either there is a “consent” problem with the WC carrier, or there is a total failure to file a WC claim.  Sometimes, as in Encalada v McCarthy, Chachanover & Rosado, LLP  2018 NY Slip Op 02434  Decided on April 10, 2018  Appellate Division, First Department it is the opposite.  Here, the WC claim was brought, but the PI case was not.  How does it resolve?

“Plaintiff was injured in an accident while working as an asbestos remover on March 31, 2001. Within a few days thereof, he reached out to defendant law firm for legal assistance. The parties dispute whether defendant law firm told plaintiff that it would represent him in all claims related to the accident. Defendant served as legal counsel for plaintiff in the related workers’ compensation action until December 2004, when it withdrew as counsel. On November 27, 2007, plaintiff brought a legal malpractice action against defendant for failing to file a notice of claim within 30 days of the accident and failing to bring a personal injury lawsuit against municipal entities within 1 year and 90 days of the accident.

Defendant as movant met its prima facie burden on summary judgment by showing that plaintiff’s legal malpractice case was untimely as it was not commenced within three years of the date of accrual of each legal malpractice claim (see CPLR 214[6]).

However, plaintiff raised a triable issue of fact with respect to whether the three-year statute of limitations was tolled under the continuous representation doctrine. Under the continuous representation doctrine, a person seeking professional assistance is placed in a difficult position if required to sue his or her attorney while the attorney continues to represent them on a particular legal matter (Shumsky v Eisenstein, 96 NY2d 164, 167-168 [2001]). Accordingly, the doctrine tolls the running of the statute of limitations on malpractice claims until the ongoing representation is completed (id.). However, the application of this doctrine is limited “to the course of representation concerning a specific legal matter,” and is not applicable to the client’s “continuing general relationship with a lawyer … involving only routine contact for miscellaneous legal representation … unrelated to the matter upon which the allegations of malpractice are predicated” (id. at 168). The record presents an issue of fact as to whether defendant continuously represented plaintiff in connection with a personal injury claim based on the accident, such as to toll the statute of limitations during that time (see Glamm v Allen, 57 NY2d 87, 94 [1982]; Waggoner v Caruso, 68 AD3d 1, 6-7 [1st Dept 2009]).

Finally, defendant’s argument regarding the alleged contradiction in plaintiff’s deposition testimony and affidavit is unavailing. Whether plaintiff’s testimony about the initial conversation can support his malpractice claim is ultimately a credibility issue for the fact finder and not appropriate for resolution on summary judgment (see Ferrante v American Lung Assn., 90 NY2d 623, 631 [1997]; Glick & Dolleck v Tri-Pac Export Corp., 22 NY2d 439, 441 [1968]).”

In Gad v Sherman  2018 NY Slip Op 02316  Decided on April 4, 2018 Appellate Division, Second Department we see the Second Department pass up an invitation to endorse a First Department concept that expressing “satisfaction” with the attorney’s work at an allocution settling a matrimonial action precludes a later legal malpractice case against the attorney.  This concept was first enunciated in the First Department in Katebi v. Fink, 51 AD3d 424.  (“Moreover, as to all defendants, the evidence establishes that when entering into the settlement of the divorce action, plaintiff acknowledged in open court that she was satisfied with counsels’ representation….”).

Here, differently, “In an order dated June 18, 2013, the Supreme Court, Westchester County, assigned the defendant to represent the plaintiff in an underlying matrimonial action commenced against the plaintiff by his now former wife (hereinafter the wife). On April 11, 2014, the parties to the matrimonial action appeared with their attorneys before the court and agreed to resolve all issues pending in the action. As a result, the wife’s counsel read an outline of the parties’ agreement into the record, which included the understanding that a formal written stipulation would follow. In addition, both the plaintiff and the wife, in response to questions from the court, indicated that they understood the terms and conditions as placed on the record and that they were satisfied with their legal representation. Thereafter, in May 2014, the plaintiff and the wife signed the written stipulation of settlement (hereinafter the stipulation).”

“” A claim for legal malpractice is viable, despite settlement of the underlying action, if it is alleged that settlement of the action was effectively compelled by the mistakes of counsel'” (Schiff v Sallah Law Firm, P.C., 128 AD3d 668, 669, quoting Tortura v Sullivan Papain Block McGrath & Cannavo, P.C., 21 AD3d 1082, 1083; see Katz v Herzfeld & Rubin, P.C., 48 AD3d 640, 641).”

“Here, the documentary evidence submitted by the defendant, consisting of the transcript from the April 2014 court appearance, failed to utterly refute the plaintiff’s allegations of malpractice, thereby failing to conclusively establish a defense as a matter of law in this legal malpractice action (see Prott v Lewin & Baglio, LLP, 150 AD3d 908, 910; Palmieri v Biggiani, 108 AD3d 604, 607-6″

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.