In a rather severe reading of a retainer agreement, Justice Freed of Supreme Court, New York County found that the attorneys were not responsible for any investigation into the insurance coverage of their clients.  In Matz v Aboulafia Law Firm, LLC    2017 NY Slip Op 32147(U)
October 10, 2017  Supreme Court, New York County Docket Number: 155506/2016 she determined:

“Construing the complaint in a light most favorable to plaintiffs, they have set forth a claim
for legal malpractice. To set forth a cause of action to recover damages for legal malpractice, a
plaintiff must allege 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 his or
her duty proximately caused the plaintiff actual and ascertainable damages. Leder v Spiegel, 9
NY3d 836, 837 (2007) (internal citation and quotation marks omitted), cert denied sub nom.
Spiegel v Rowland, 552 US 1257 (2008). Nev~rtheless, plaintiffs’ claim against Aboulafia and
the Aboulafia Firm are dismissed pursuant to CPLR 3211 (a) ( 1 ).

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). “

First Cent. Sav. Bank v Parentebeard, LLC  2017 NY Slip Op 30974(U)  May 10, 2017
Supreme Court, New York County  Docket Number: 653680/2014  Judge: Shirley Werner Kornreich discusses the burden a defendant has in a professional negligence case.

“In short, this case concerns the IRS’ s disallowance of $2,514, 143 in net operating losses
(the Tax Benefit) claimed by plaintiff First Central Savings Bank (the Bank) on its 2010 tax
return. The IRS disallowed the Tax Benefit because, despite promising to do so, Parente failed
to file a Form 7004 seeking a filing deadline extension on behalf of the Bank. The Bank was not
informed by the IRS of the disallowance of the Tax Benefit until 2012. Prior to that revelation,
in 2011, Parente prepared a September 30, 2010 financial statement for the Bank (the Financial
Statement) based on the assumption that the Bank was entitled to claim the Tax Benefit. The
Bank, relying on the Financial Statement, conducted a Preemptive Rights Offering (the PRO) in
which it sold stock to its shareholders – including the individual plaintiffs (the Shareholder
Plaintiffs), some of whom were on the Bank’s board of directors. The Shareholder Plaintiffs
allege that they relied on the value of the Bank, as depicted in the Financial Statement, in
deciding to purchase additional shares of the Bank at the offering price of $7 per share. ”

“Defendants’ motion to dismiss the second cause of action – the Bank’s claim that Parente
negligently prepared the Financial Statement – is denied. Defendants’ argument is that Parente
had no reason to know that the IRS would disallow the Tax Benefit at the time the Financial
Statement was prepared in 2011 (as noted, the Bank found out in 2012). The relevant inquiry
appears to be whether a reasonably prudent accountant who arguably should have known that the
Bank did not get a filing extension (because the Form 7004 was never received by the IRS) acts
negligently when it prepares a financial statement inaccurately portraying the Bank’s value, not with bad intent, but under a false premise of value (i.e., that the Bank would be able to maintain
the Tax Benefit). See D.D. Hamilton Textiles. Inc. v Estate of Mate, 269 AD2d 214, 215 (1st
Dept 2000) (“A clairri of professional negligence requires proof that there was a departure from
accepted standards of practice.”). To be sure, the parties do not dispute that the Financial
Statement would have been correct if the Bank had the right to the Tax Benefit. However, the
requisite form to receive such Tax Benefit had not been filed at the time the Financial Statement
was prepared. The question of whether, under the somewhat unique facts of this case, Parente
acted negligently in preparing the Financial Statement would appear to require, as in most
professional malpractice cases, expert testimony. 4 See Gert/er v Sol Masch & Co., 40 AD3d 282
(1st Dept 2007); Tung v Mui, 260 AD2d 294 (1st Dept 1999). Defendants, who bear the burden
on a motion to dismiss of demonstrating that the plaintiff has no claim, did not support their lack
of negligence argument with any citation to authority, let alone any analogous case that grappled
with similar facts. See Dkt. 30 at 8-9. Instead, defendants simply rely on some of the court’s
dicta in the Prior Decision. See id. at 7-8. 5

Defendants’ approach is unavailing. 6 If the court thought that the negligence allegations
could not sustain a viable claim, leave to replead would not have been granted. Indeed, in the
Prior Decision, the court did not purport to rule on the substantive viability of the negligence with bad intent, but under a false premise of value (i.e., that the Bank would be able to maintain
the Tax Benefit). See D.D. Hamilton Textiles. Inc. v Estate of Mate, 269 AD2d 214, 215 (1st
Dept 2000) (“A claim of professional negligence requires proof that there was a departure from
accepted standards of practice.”). To be sure, the parties do not dispute that the Financial
Statement would have been correct if the Bank had the right to the Tax Benefit. However, the
requisite form to receive such Tax Benefit had not been filed at the time the Financial Statement
was prepared. The question of whether, under the somewhat unique facts of this case, Parente
acted negligently in preparing the Financial Statement would appear to require, as in most
professional malpractice cases, expert testimony. 4 See Gert/er v Sol Masch & Co., 40 AD3d 282
(1st Dept 2007); Tung v Mui, 260 AD2d 294 (1st Dept 1999). Defendants, who bear the burden
on a motion to dismiss of demonstrating that the plaintiff has no claim, did not support their lack
of negligence argument with any citation to authority, let alone any analogous case that grappled
with similar facts. See Dkt. 30 at 8-9. Instead, defendants simply rely on some of the court’s
dicta in the Prior Decision. See id. at 7-8. 5 “

Judiciary Law §487, perhaps the oldest rule (it’s the common law, not a statute) comes up  in Unclaimed Prop. Recovery Serv., Inc. v Credit Suisse First Boston Corp.
2018 NY Slip Op 30150(U)  January 25, 2018  Supreme Court, New York County Docket Number: 653009/2013 Judge: Saliann Scarpulla, but then it disappears.  This is a contract action between an entity that seeks to recover unclaimed property which may belong to a bank, and Credit Suisse.

“Plaintiffs Unclaimed Property Recovery Service, Inc. (UPRS) and Bernard Gelb (Gelb), UPRS’s vice-president and general manager, bring this breach of contract action against defendants Credit Suisse First Boston Corporation and Credit Suisse First Boston LLC (collectively, Credit Suisse), alleging that Credit Suisse has refused to execute contractually required documents that would enable plaintiffs to recover unclaimed property held in Credit Suisse’s name by the N~w York State Office of Unclaimed Funds (NYS OUF).

Credit Suisse moves for summary judgment dismissing the complaint. Plaintiffs crossmove for summary judgment and an order, pursuant to CPLR 3126, Judiciary Law§ 487 and 22 NYCRR 130-1.1, imposing sanctions against Credit Suisse. ”

After a discussion of whether the agreement was limited to 2005 assets or applied to after-discovered assets, the Court determines:  “For the foregoing reasons, Credit Suisse has demonstrated its entitlement to summary judgment dismissing plaintiffs’ complaint, and plaintiffs have failed to raise an issue of fact in opposition. Plaintiffs argue that Credit Suisse is attempting to recover the unclaimed property on its own and through newly hired professionals (see Gelb aff,  20, exhibits 1, 2, 6), but this evidence is irrelevant because it is not the basis of plaintiffs’ breach of contract claim. See complaint,77-80 (alleging that Credit Suisse breached the 2005 Settlement Agreement by
refusing to cooperate and execute necessary documents). ”

As a defense to a claim of over-billing or breach of fiduciary duty, the attorneys often argue that the client paid some bills and then stopped, allowing for the “voluntary payment” doctrine to refute the claims.  Dubrow v Herman & Beinin  2018 NY Slip Op 00478  Decided on January 25, 2018
Appellate Division, First Department is a newly decided case on this issue.

“Plaintiff alleges that defendants, who represented him in an employment discrimination action, failed to return the unearned portion of his $176,500 retainer at the conclusion of that action. It is undisputed that defendants never provided plaintiff with a written agreement, as required under 22 NYCRR 1215.1, and failed to provide plaintiff with written billing statements, as required by 22 NYCRR 1210.1(4). In addition, defendants refused to provide an accounting of the time spent working on plaintiff’s case when requested by plaintiff’s new attorney. Defendants moved to dismiss, arguing that the breach of contract claim was not adequately pleaded and that plaintiff’s claim is barred by the “voluntary payment doctrine.”

The voluntary payment doctrine “bars recovery of payments voluntarily made with full knowledge of the facts, and in the absence of fraud or mistake of material fact or law” (Dillon v U-A Columbia Cablevision of Westchester, 100 NY2d 525 [2003]). In the context of an attorney-client relationship, the attorney bears the burden of showing that the parties’ fee agreement was fair, reasonable, and fully known and understood by plaintiff (Jacobson v Sassower, 66 NY2d 991, 993 [1985]; see also Seth Rubenstein, PC v Ganea, 41 AD3d 54, 64 [2d Dept 2007]).

Plaintiff has sufficiently alleged a claim for breach of contract based on defendants’ failure to return the unearned balance of his retainer, pursuant to the parties’ oral agreement (see Nevco Contr. Inc. v R.P. Brennan Gen. Contrs. & Bldrs., Inc., 139 AD3d 515 [1st Dept 2016]). While defendants assert that plaintiff voluntarily made payments to compensate them for their services, they have not established that plaintiff had full knowledge of the relevant facts, such as the number of hours spent by defendants in connection with their representation of him (see Dillon, 100 NY2d at 525). Nor did they submit any evidence to show that the amount of plaintiff’s payments was fair and reasonably related to the value of services rendered (see Jacobson, 66 NY2d at 993). Since defendants did not conclusively refute plaintiff’s allegations, their motion to dismiss was properly denied (see Rite Aid of N.Y., Inc. v Chalfonte Realty Corp., 105 AD3d 470, 470-471 [1st Dept 2013]; Kirby McInerney & Squire, LLP v Hall Charne Burce & Olson, S.C., 15 AD3d 233 [1st Dept 2005]).

Nor does defendants’ contention that plaintiff never questioned their legal fees until the underlying matter was dismissed on summary judgment warrant dismissal. Plaintiff alleges that defendants promised to return any balance at the resolution of the underlying action, and his attempts to obtain an accounting after dismissal of the action are in line with this alleged understanding.”

In one of the few applications of Grace v. Law to date, Supreme Court dismisses a legal malpractice case.  More than this rare application of  Grace, the court dismisses on a question of law.

The facts are simple in Dinerman v Fox  2018 NY Slip Op 30127(U)  January 16, 2018  Supreme Court, Kings County  Docket Number: 513181/2016  Judge: Bernard J. Graham .  Husband signs a stipulation to pay 50/50 for his daughter’s college.  When she reaches 21, he decides not to continue paying.  Wife is, as might be guessed, unhappy.

“Fox had represented Dinerman in a divorce proceeding between Dinerman and his spouse, Mary
Bergam (Supreme Court Kings Co., Index No. 52375/13). As part of the divorce proceedings, a preliminary conference was held on August 1, 2013. An order was entered upon stipulation of the parties providing for various interim relief and discovery to be conducted. The August 1, 2013 order (the “Preliminary Conference Order”) provides in the section entitled Pendente Lite Relief, the following:
“The parties shall pay 50/50 the following expenses: Carrying charges on the marital home; college
expenses for Katherine, tutoring and college prep fees for Daniel”.
The plaintiffs legalmalpractice case is rooted in the fact that there is no provision for the plaintiff to
discontinue the college expenses for his daughter Katherine after she turns 21 years of age. It is
plaintiffs contention that, while he voluntarily agreed to stipulate payment of his daughter’s college
tuition, he had been advised by his then attorney (Fox) that he would not be obligated to pay for expenses after his daughter turned 21.”

“The Court has reviewed the decision of Justice Thomas and, based on the well-thought reasoning
contained therein, it is this Court’s opinion that the decision allows for the possibility (or even
likelihood) that Justice Thomas would have ordered Dinerman to bear responsibility for the payment of his daughter Katherine’~ college expenses until she completed college, regardless of whether Dinerman sought to limit his responsibility for the period ending when his daughter turned 21 years of age. If this possibility exists, it would be impossible to find Dinerman’s attorney’s action to be the proximate cause of his alleged damages.

In any event, this Court is compelled to dismiss the action grounded in legal malpractice based upon the accepted case law in New York. As argued by defendant’s counsel, Dinerman can not establish a prima facie case for legal malpractice without establishing that he sought to appeal the decision of Justice Thomas. (See Grace v Law, 24 NY3d 203 [2014]; see also Buczek v Dell & Little, 127 AD3d 1121 [2d Dept. 2015]).

This argument is relevant given that the accepted rule is that a parent is not obligated to support a
child after the child turns 21 years of age (See Family Court Act sec. 413(1); Social Service Law sec.
101(1); Bani-Esraili v Lerman, 69 NY2d 807 [1987]). Based upon the statutory law limiting the
obligation to support his child until she turned 21 years of age and the fact that there was nothing
explicitly stated as to the cut-off of college obligations when his daughter turned 21 years of age, it is
entirely possible that Dinerman would be “likely to succeed” on an appeal of Justice Thomas’ decision.

Consequently his failure to appeal would bar a legal malpractice claim. (Grace v Law, 24 NY3d at 211). Dinerman can not establish that Fox’s alleged negligence proximately caused his damages. “

The decision in Krigsman v Goldberg  2018 NY Slip Op 30104(U)  January 19, 2018  Supreme Court, New York County  Docket Number: 151271 /16  Judge: Manuel J. Mendez reads like a Dickens novel in which litigation goes on until no one has any money left to litigate over.  Widow litigates over the will until she dies, and all for naught. At the end the law firm has billed $ 100,000 with no result in sight.  Now the question of discovery looms, and the attorneys would like to have the case dismissed.  Judge Mendez describes the limits of discovery.

“The essence of plaintiff’s complaint is that the moving defendants committed legal malpractice when they failed to exercise Dora’s right of election to her husband Shlomo’s estate in accordance with the EPTL§5-1.1-A. That instead of exercising the right of election the moving defendants filed objections against the Estate of Shlomo in a proceeding in Surrogate’s court to probate Shlomo’s Will, and commenced a separate action in New York State Supreme Court Kings County (Index 21521- 2003) on Dora’s behalf, against Shlomo’s Estate and his children, for the imposition of a
constructive trust and a declaration of Dora’s rights in Shlomo’s property. That Kings County action was transferred to Surrogates Court in October 2003. Dora died in November 2008 without exercising her right of election. ( see amended complaint ).”

The complaint alleges that “on July 23, 2013 the Kings County Surrogate granted a summary judgment motion filed by the executor of Shlomo’s estate, holding that since no notice complying with the statutory requirements of EPTL §5-1.1-A was served and filed before Dora’s death, her right of election was never exercised and her right of election died with her … ” that decision was appealed and “on July 15, 2015 the Appellate Division affirmed the Surrogate’s decision, holding that Dora ‘did not follow the procedure outlined in EPTL §5-1.1-A(d) for exercising a spouse’s right of election” (see amended complaint 1J1J63, 68 moving papers Exhibit A). The complaint further alleges that “despite approximately 13 years, the [constructive trust] action had gone nowhere. The Goldberg defendants failed to take adequate party and non-party discovery and otherwise prepare the action for trial prior to the discovery cut-off. In or around June 2015, when the action was finally scheduled for trial, the Goldberg defendants informed the Surrogate’s Court that they could not
try the action due to a scheduling conflict and sought an adjournment of the trial date.
The Surrogate’s Court rejected the Goldberg defendants’ eleventh hour request for an
adjournment and struck the action from the trial calendar. When the Goldberg defendants neglected the action and failed to move to restore the action to the trial calendar, the defendants in the action moved to dismiss the action for failure to prosecute. Despite having accomplished nothing for Dora or the Estate during the 13 years of legal representation, the Goldberg defendants managed to charge Dora and the Estate in excess of $100,000 for the Retained matters, most of which is attributable to litigating the Goldberg defendant’s own failure to take the necessary steps to
exercise Dora’s right of election and, to a lesser extent, working on the action which
was stricken from the trial calendar due to the Goldberg defendants’ negligent acts and
omissions. (see amended complaint 1[1[69-74 moving papers Exhibit A; decision/order
Hon. S. Johnson dated May 10, 2016 papers in opposition Exhibit A). ”

“CPLR 1[3101 (a) calls for the “production of all matter material and necessary in the prosecution or defense of an action … ” CPLR § 3124 grants the court the power to compel a party to provide discovery demanded. CPLR § 3126 grants the court the power to sanction a party that fails to comply with a court’s discovery order. However, While discovery should be liberal, information sought must be material and necessary, and meet the test of usefulness and reason (Manley v. New York City Housing Authority, 190 A.D.2d 600, 593 N.Y.S.2d 808 [1st. Dept. 1993)). The supervision of discovery and the setting of reasonable terms and conditions for disclosure are within the sound
discretion of the Supreme Court (Downing v. Moskovits, 58 A.D.3d 671, 873 N.Y.S. 2d 320 [2″d. Dept. 2009)). ”

“CPLR 1[3101 (a) calls for the “production of all matter material and necessary in the prosecution or defense of an action … ” CPLR § 3124 grants the court the power to compel a party to provide discovery demanded. CPLR § 3126 grants the court the power to sanction a party that fails to comply with a court’s discovery order. However, While discovery should be liberal, information sought must be material and necessary, and meet the test of usefulness and reason (Manley v. New York City Housing Authority, 190 A.D.2d 600, 593 N.Y.S.2d 808 [1st. Dept. 1993)). The supervision of discovery and the setting of reasonable terms and conditions for disclosure are within the sound
discretion of the Supreme Court (Downing v. Moskovits, 58 A.D.3d 671, 873 N.Y.S. 2d 320 [2″d. Dept. 2009)). “