The Appellate Division, First Department asks a question without an apparent answer:  Can an attorney be held liable of a voluntary assumption of a duty which is not reflected in a retainer agreement?  What happens if there is no actual retainer agreement?  For the moment there is no answer, but Genesis Merchant Partners, L.P. v Gilbride, Tusa, Last & Spellane, LLC
2018 NY Slip Op 00221  Decided on January 11, 2018 provides some illumination.

“At issue on this appeal is whether plaintiffs Genesis Merchant Partners, L.P. and Genesis Merchant Partners II, L.P. (collectively, Genesis) are entitled to summary judgment on liability in this legal malpractice action premised the failure of defendant Gilbride, Tusa, Last & Spellane, LLC, and defendant attorneys in that firm, Jonathan M. Wells, Kenneth M. Gammill, Jr., and Charles S. Tusa (collectively, Gilbride) to perfect security interests in life insurance policies. Because issues of fact exist, Supreme Court erred in granting Genesis summary judgment.”

“In May 2008, Genesis retained Gilbride to represent it in connection with the first of the loans, which Progressive repaid. Gilbride also represented Genesis in connection with three additional loans, issued on December 22, 2008, July 31, 2009, and February 3, 2011 (respectively, the second, third and fourth loans).

It is undisputed that Gilbride drafted the loan documents, including the Collateral Assignment of Contracts and the UCC-1 financing statements for each loan. Gilbride filed a UCC-1 financing statement on May 27, 2008, for the first loan, listing Progressive as the Debtor and Genesis as the Secured Party and broadly declaring a security interest in all of Progressive’s assets. The UCC-1 financing statements for the second, third and fourth loans, also filed by Gilbride, contained similar declarations. However, the UCC-1 financing statement for the fourth loan also listed, for the first time, the policy numbers of each insurer for seventeen life insurance policies pledged as additional collateral.”

“The crux of the factual dispute is whether Gilbride had a duty to perfect Genesis’s security interests in the collateral. Genesis alleges that Gilbride was retained to advise it on the loans, including drafting the loan documents and ensuring that Genesis’s security interests in the collateral were secured and perfected under applicable law. Gilbride maintains that it was retained only to draft the loan documents and that this limited representation was at the express instruction of Genesis.”

“Supreme Court granted Genesis summary judgment, rejecting Gilbride’s contention that perfecting the security interests was outside the scope of its representation. The court held — on a theory not raised by the parties in the briefing below — that even if Gilbride ultimately established that the scope of representation was limited at Genesis’s instructions, Gilbride “voluntarily assumed the obligation to perfect the security interests,” by filing the UCC-1 financing statements and billing Genesis for that work, and that Gilbride negligently discharged that duty. The court dismissed the counterclaims for unpaid attorneys’ fees, as Gilbride sought payment for the same work that constituted malpractice.”

“There is no engagement letter that defines the scope of Gilbride’s representation. Steven Sands, Senior Portfolio Manager of Genesis, states in an affidavit that “[Genesis] initially retained [Gilbride] to draft loan documents for a loan to [Progressive] that required collateral assignments of life insurance policies and other assets as collateral for the loan. This engagement included perfecting the collateral.”

“Turning next to whether Gilbride voluntarily assumed the duty to perfect the security [*3]interests, we note that the parties have not brought to our attention legal malpractice claims where an attorney voluntarily assumes a duty to act. The cases relied on by Supreme Court are distinguishable as they do not relate to a claim for legal malpractice arising from a dispute over the scope of the retainer (AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 NY3d 582, 594 [2005] [assumption of duty by underwriter or issuer of securities]; Applewhite v Accuhealth, Inc., 21 NY3d 420, 430-431, 434 [2013] [assumption of special duty by a municipality in a negligence claim]; Palka v Servicemaster Mgt. Servs. Corp., 83 NY2d 579 [1994] [maintenance contractor for hospital assumed duty to noncontracting nurse for injuries she sustained when fan dismounted from wall]; Podesta v Assumable Homes Dev. II Corp., 137 AD3d 767 [2d Dept 2016] [assumption of duty by vendors of real property to record partial satisfaction of mortgage]; Nilazra, Inc. v Karakus, Inc., 136 AD3d 994 [2d Dept 2016] [third-party action for contribution and indemnification by attorney defendant against another attorney, who voluntarily assumed a duty to file a notification with the state in connection with the purchase of a business]).

Even assuming that the duty principles in the aforementioned cases can be applied to a legal malpractice claim, Gilbride’s filing of the UCC-1 financing statements and billing Genesis for that work does not establish that summary judgment is warranted on this record.”

In one of the shortest decisions recently seen, the Appellate Division, First Department lays out the Successor Counsel doctrine which essentially immunizes the first attorney in Liporace v Neimark & Neimark, LLP  2018 NY Slip Op 00112  Decided on January 9, 2018.

“The Neimark defendants’ failure to serve a timely notice of claim on the New York City Department of Education in the underlying action is not the proximate cause of plaintiff’s alleged damages, because the statute of limitations had not yet expired when the Budin defendants were substituted as plaintiff’s counsel. This substitution of counsel was a superseding and intervening act that severed any potential liability for legal malpractice on the part of the Neimark defendants (Pyne v Block & Assoc. , 305 AD2d 213 [1st Dept 2003]).”

Supreme Court dismissed the complaint, but the First Department’s examination of the documents led to the opposite result in Macquarie Capital (USA) Inc. v Morrison & Foerster LLP ,  2018 NY Slip Op 00091  Decided on January 9, 2018 Appellate Division, First Department.

“Accepting plaintiff client’s allegations as true and drawing all reasonable inferences in its favor (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]), a legal malpractice claim was sufficiently alleged (see Fielding v Kupferman, 65 AD3d 437, 439 [1st Dept 2009]). Plaintiff, a lead underwriter on a public offering of a Chinese corporation, claimed that defendant law firm was negligent in failing to uncover material misrepresentations made by the corporation in connection with the offering. Plaintiff sufficiently asserted that but for defendant’s negligence, plaintiff would have ceased its involvement in the public offering and avoided the fees, expenses and other damages it incurred in defending against, as well as settling claims against it (see id.).

Defendant’s argument that an investigative report gave plaintiff prior constructive notice of the material misrepresentations is unavailing (cf. Ableco Fin. LLC v Hilson, 109 AD3d 438 [1st Dept 2013], lv denied 22 NY3d 864 [2014]). In Ableco, this Court granted the defendants’ motion for summary judgment, dismissing the plaintiff’s legal malpractice claim “on the basis of information plaintiff indisputably possessed” prior to the closing of the transaction at issue (id. at 439). Specifically, the plaintiff, the maker of commercial loans, received a press release that explicitly excluded certain property from the available inventory of a bankruptcy estate, and thus, the evidence refuted the plaintiff’s claim that it was unaware that it would not be getting a first priority lien on the entire inventory (id. at 438, 439). Moreover, this Court’s determination was founded not only upon the plaintiff’s possession of the press release, but also on the clear and explicit presentation of the information such that counsel’s legal interpretation was not required (id. at 439). Here, on a pre-answer motion to dismiss, although plaintiff acknowledges that it had possession of the investigative report, the information contained in the report cannot, at this stage, be described as explicitly putting plaintiff on notice and not requiring counsel’s interpretation of the information. Defendant “may not shift to the client the legal responsibility it was specifically hired to undertake” (Escape Airports [USA], Inc. v Kent, Beatty & Gordon, LLP, 79 AD3d 437, 439 [1st Dept 2010] [internal quotation marks omitted]).”

Negligence is negligence, no?  Well, they are different as Amendola v Brookhaven Health Care Facility, LLC

2017 NY Slip Op 04090 [150 AD3d 1061]  May 24, 2017  Appellate Division, Second Department points out.

“The plaintiff Raymond Amendola (hereinafter the plaintiff), and his wife suing derivatively, commenced this action against Brookhaven Health Care Facility, LLC (hereinafter Brookhaven), and The McGuire Group (hereinafter together the defendants) to recover damages for personal injuries the plaintiff contends he sustained during a physical therapy session conducted by a physical therapist at Brookhaven. Following discovery, the defendants moved for summary judgment dismissing the complaint. The Supreme Court denied the defendants’ motion.

The Supreme Court should have granted that branch of the defendants’ motion which was for summary judgment dismissing so much of the first cause of action as sought to recover damages for ordinary negligence, as the allegations in the complaint only support a cause of action to recover damages for professional malpractice (see Glasgow v Chou, 33 AD3d 959, 961 [2006]; see also D’Elia v Menorah Home & Hosp. for the Aged & Infirm, 51 AD3d 848, 850 [2008]). However, the court properly determined that the defendants failed to establish, prima facie, that they were not vicariously liable for the alleged professional malpractice of the physical therapists or physical therapy assistants administering rehabilitation services at their facility (see Sirignano v Jencik, 123 AD3d 1002, 1003 [2014]; Rivera v Fenix Car Serv. Corp., 81 AD3d 622, 623-624 [2011]; see also Diller v Munzer, 141 AD3d 628, 629 [2016]; Loaiza v Lam, 107 AD3d 951, 953 [2013]).

With respect to the allegations of professional malpractice, although the defendants [*2]made a prima facie showing that they did not deviate from good and accepted standards of physical therapy practice, through the submission of deposition testimony, medical records, and the affidavit of a licensed physical therapist (see Shank v Mehling, 84 AD3d 776, 777-778 [2011]), the affidavit of a licensed physical therapist submitted by the plaintiffs in opposition was sufficient to raise a triable issue of fact as to whether the treatment departed from good and accepted physical therapy practice (see Nisanov v Khulpateea, 137 AD3d 1091, 1094 [2016]; Guctas v Pessolano, 132 AD3d 632, 633 [2015]). Summary judgment is not appropriate in a malpractice action where, as here, the parties adduce conflicting expert opinions (see Henry v Sunrise Manor Ctr. for Nursing & Rehabilitation, 147 AD3d 739 [2017]; Elmes v Yelon, 140 AD3d 1009, 1011 [2016]).”

Legal malpractice cases, as we have said, cover events and issues all over the world.  Here, a land-owner was unhappy about trespassers over his property, trying to get to a beach.  The annoyance led to litigation, to appeals, to legal malpractice and judiciary law § 487 claims.  Palmieri v Perry, Van Etten, Rozanski & Prima Vera, LLP  2017 NY Slip Op 32694(U)  December 7, 2017
Supreme Court, Suffolk County  Docket Number: 15-18431  Judge: David T. Reilly is just another example of the extreme reach of legal malpractice and JL § 487 cases.

“The genesis of this action (Palmieri IT) lies in another matter entitled Paul Palmieri v. Town of Babylon, Suffolk County Supreme Court, Index No. 17598-1999 (Palmieri l). In Palmieri I, which has endured its own tortured history, the plaintiff commenced an action against the Town of Babylon seeking to recover damages for alleged trespass by unspecified individuals onto his property using a public access way from a public road. Plaintiff lives near the end off  Little East Neck Road which terminates at the Great South Bay. It is from that terminus that plaintiff alleges the unspecified individuals gained access to his property.

A short recitation of the procedural history of Palmieri I, as culled from the record currently before the Court, is necessary for a full understanding of the instant determination. Palmieri I was seemingly settled when the parties entered into a Stipulation dated July 17, 2004 which was filed in the County Clerk’s office on August 6, 2004. According to the Stipulation, the Town agreed to erect or cause to be erected an eight (8′) foot high chain-link fence having a gate secured by a lock essentially blocking off public access to plaintiff’s property. The fence was to be built within sixty (60) days of the signing of the Stipulation. On July 24, 2006 the Town of Babylon moved to vacate that Stipulation based upon their contention that the proposed fence was illegal because it blocked navigable waters. A Justice of this Court [Cohalan, J.l agreed and granted that motion on June 11 2007. Plaintiff then appealed to the Appellate Division, Second Department. The Appellate Division reversed this Court in a decision dated November 25, 2008. At that point in the litigation rather than comply with its obligations under the Stipulation, the Town of Babylon filed a motion pursuant to CPLR §3211 seeking dismissal of the plaintiffs’ Complaint. That motion was denied and the decision affirmed (see Palmieri v. Town of Babylon, 87 AD3d 625 [2011]). Of note, the Appellate Division, Second Department declined to impose sanctions against the Town of Babylon, as requested by the plaintiff. This Court is unaware of what, if anything, occurred in the next six (6) years, however, on May 16, 2014, plaintiff moved for contempt against the Town of Babylon, the Supervisor and the Town Council. It appears from the record before the Court that the defendants therein claimed that the Town’s failure to erect the fence was due to the changing topography or the subject area in that Hurricane Sandy caused sufficient erosion such that the location of the proposed fence was now underwater thereby invoking the jurisdiction of the Department of Environmental Conservation (DEC). The Town defendants maintained that approval from that agency was now necessary before the fence could be erected. On July 29th and 31st, 2015 that matter came to a hearing and in a decision dated October 29, 2015 the Court (Hudson, J.) denied the application for contempt based solely on an insufficiency of proof, but warned the parties that they should move expeditiously to fulfill the obligations imposed by the Stipulation.”

“After careful consideration, the Court finds that the plaintiffs causes of action sounding in tortious interference with a contract and violation of Judiciary Law §487 must be dismissed based upon the doctrine of collateral estoppel. Throughout the plaintiffs’ Complaint arc allegations that the defendants herein engaged in a scheme with the Town of Babylon to deny the plaintiff the relief afforded him within the 2004 Stipulation of Settlement. As the Palmieri I litigation endured the torturous history evidenced by the present record before the Court. certain factors occurred which operated to stall the Town’s obligation to construct the fence at issue, most notably the motions and appeals which litter the record. “

It doesn’t get much simpler than a legal malpractice claim that the attorneys failed to answer, and a default judgment was entered.  When does the statute of limitations commence?  Billiard Balls Mgt., LLC v Mintzer Sarowitz Zeris Ledva & Meyers, LLP  2018 NY Slip Op 00018
Decided on January 2, 2018  Appellate Division, First Department gives something of an answer.

“Plaintiff Billiard Balls Management (Billiard) sufficiently stated a claim for legal malpractice. The record clearly establishes an attorney-client relationship, as defendant entered into two stipulations extending Billiard’s time to answer in an underlying personal injury action, which were filed in court, and represented itself as Billiard’s attorney (see Cooke v Laidlaw Adams & Peck, 126 AD2d 453, 455 [1st Dept 1987]; compare Pellegrino v Oppenheimer & Co., Inc., 49 AD3d 94, 99 [1st Dept 2008]).

The motion court also properly determined that the action was timely commenced (CPLR 214[6]). Assuming that the malpractice claim accrued on January 11, 2013, when the time to answer the underlying complaint expired, or the earlier date of December 28, 2012, when the insurer disclaimed coverage, Billiard was prevented from exercising any legal remedy by virtue of the underlying motion court’s order, which denied the underlying plaintiff’s motion for a default judgment against Billiard, until that order was subsequently reversed by the Second Department in September 2015 (Gershman v Ahmad, 131 AD3d 1104 [2d Dept 2015]; see Coyle v Lefkowitz, 89 AD3d 1054, 1056 [2d Dept 2011]; Brown v State of New York, 250 AD2d 314, 319 [3d Dept 1998]).”

The concept is familiar, but the name of this particular doctrine is new to us.  The First Department, in  Palmeri v Willkie Farr & Gallagher LLP  Decided on December 28, 2017 enunciated the following:

“Here, plaintiff alleges not only that defendant breached its fiduciary duty when it terminated its professional relationship with him, but also when, until at least June 2011, it acted in a manner directly adverse to his interests. Where there is a series of continuing wrongs, the continuing wrong doctrine tolls the limitation period until the date of the commission of the last wrongful act (Harvey v Metropolitan Life Ins. Co., 34 AD3d 364 [1st Dept 2006]; see also Ring v AXA Fin., Inc., 2008 NY Slip Op 30637[U] [Sup Ct, NY County 2008] [applying continuing violations doctrine to General Business Law § 349 claim where initial payments occurred outside statute of limitations but “the insurer [] continued to bill, and … [plaintiff] … continued to pay” within three years of filing suit]).

Here, plaintiff has presented evidence of a “continuing wrong,” which is “deemed to have accrued on the date of the last wrongful act” (Leonhard v United States, 633 F2d 599, 613 [2d Cir. 1980], cert denied 451 US 908 [1981]; Harvey, 34 AD3d at 364). Indeed, the record contains evidence sufficient to create an issue of fact as to whether defendant breached its fiduciary obligations to plaintiff after June 2009 and well into June 2011 during its ongoing representation of the Ramius parties.

For example, as noted, the record contains evidence that in the early portion of 2011, defendant helped Ramius identify witnesses who would testify against plaintiff at his FINRA disciplinary hearing. Similarly, defendant was present on behalf of Ramius and Ramius employees who testified at plaintiff’s FINRA hearing on June 28 through 29, 2011 — a hearing at which the employees gave testimony that was generally adverse to plaintiff’s interests. This evidence is sufficient for a fact-finder to determine that defendant breached its duty of loyalty to plaintiff, a former client (see Cooke v Laidlaw, Adams & Peck, 126 AD2d 453, 456 [1st Dept 1987] [ethical standards applying to the practice of law impose a continuing obligation upon lawyers to refuse employment in matters adversely affecting a client’s interests, even if the client is a former client]).”

Attorney fee disputes reflexively lead to legal malpractice claims.  While that is true, the concept that all legal malpractice claims are dubious strongly overshadows the unassailable fact that attorneys are human, and that without any doubt, humans make mistakes.  That being said, Louis F. Burke PC v Aezah 2017 NY Slip Op 32670(U) December 14, 2017 Supreme Court, New York County Docket Number: 654778/2016 Judge: David B. Cohen is an example of not too much substance in a counterclaim.

” The Complaint alleges that defendants had made a payment on October 17, 2014, there remained an outstanding balance of $42,937.50. As plaintiff was still the attorney of record, it sought information from defendants relating to new counsel. As such information was not provided, LFB remained as the attorney of record, and incurred an additional $17,520 in legal fees until relieved by the Court in May of 2015, leaving a total outstanding balance of $60,457.50. ‘ Plaintiff sent and defendants received invoices on July: 28, 2015, September 10, 2015, and April 21, 2016 of the outstanding balance. On October 20, 2016, plaintiff filed the instant matter seeking to recover lost fees and alleged breach of contract, quantum meruit and accounts stated. Defendant answered and asserted six counterclaims for (1) breach of contract, (2) ordinary ; .! negligence, (3) breach of fiduciary duty, (4) professional malpractice, 1 (5) violation of Judiciary : Law, 487, and (6) “reasonable legal fees.” In the instant motion, plaintiff moved for partial summary judgment on the fourth cause of action of account stated and for dismissal pursuant to ; CPLR 3211 (a)(l) and (7) of all counterclaims. Following several attempts at resolving the motion and the action in its entirety, plaintiff has withdrawn the summary judgment portion of this motion and now only seeks the dismissal of the counterclaims portion. ”

“Although defendants have tried to re-write the, counterclaims, the first counterclaim is for ‘I breach of contract arising out plaintiff’s actions that allegedly led to defendants not having ·; i prop~r legal representation. The breach of contract cl~im is dismissed as duplicative of the malpractice counterclaim (Mamoon v Dot Net inc., 135 AD3d 656, 658 [1st Dept 2016]”

“Similarly, the second counterclaim for negligence is dismissed as duplicative of the legal malpractice claim (see Cusack v Greenberg Traurig. LLP, 109 AD3d 747, 748 [1st Dept 2013]. This point is not contested by defendants. In addition defendants have not stated any facts that give rise even to an allegation of negligence. ”

“The fifth cause of action is also dismissed. Juiciary Law § 487 provides recourse only 1! where there is a chronic and extreme pattern of legal delinquency (.Jaroslawicz v Cohen, 12 AD3d 16012004]; see also Dinluder v Med. Liab Mut. Ins. Co., 92 AD3d 480 [1st Dept 2012]. I! Givi;1g claimant every favorable inference, the counterclaims sets forth but one alleged misrepresentation by defendant and accordingly docs i~ot allege a cognizable claim under Judiciary Law § 487 (Solow 1\{‘?f. Corp. v Seltzer, 18 AD3d 399 [1st Dept 2005]. Based upon the forgoing, defendants’ counterclaim for attorney’s fees;is also dismissed. “{