This is a sordid story of an attorney gone wrong, seriously wrong.  Whether getting precluded while handling a legal malpractice case was the straw or not, a wake of devastation has been left in his wake.

Matter of Pierre  2017 NY Slip Op 06999 Decided on October 5, 2017  Appellate Division, First Department  Per Curiam

“Respondent Alex H. Pierre was admitted to the practice of law in the State of New York by the First Judicial Department on June 10, 1991, under the name Alex Hugues Pierre. Respondent was also admitted to practice in Pennsylvania in 1993. Respondent’s last business address listed with the Office of Court Administration is in Manhattan. Since June 7, 1999, respondent has been suspended from the practice of law in New York State by this Court for failing to file and pay his biennial registration dues. He has not appeared in this matter.”

“In a report and recommendation dated June 13, 2005, the Board noted that there were two charges brought against respondent involving a total of 11 disciplinary violations and aggravating factors. With respect to the first charge, the Board found that: on July 9, 1998, a woman was injured while riding a Southeastern Pennsylvania Transportation Authority (SEPTA) bus and on July 14, 1998, she retained respondent by executing a 40% contingency fee arrangement. The client received medical care from NovaCare Outpatient Rehabilitation. In June 1999, NovaCare’s counsel sought payment of her medical bill totaling $4,106.25. Respondent was given copies of the bills and a Statement of Account from NovaCare’s counsel.

By letter dated June 1, 2000, respondent wrote to SEPTA’s Claims Department seeking a claim number. However, by letter dated July 14, 2000, a SEPTA claim supervisor informed respondent that the statute of limitations had expired for third-party benefits. Respondent did not inform his client that he had failed to commence an action before the statute of limitations expired. SEPTA erroneously closed its claim file, even though the statute of limitations for the client’s claim for first-party benefits had not expired.

By letter dated November 27, 2000, respondent requested that SEPTA pay the NovaCare outstanding medical bill as it was a claim for first-party benefits. From December 2000 to February 2001, respondent provided SEPTA with numerous documents in support. On July 9, 2001, respondent commenced a lawsuit against SEPTA to recover first-party benefits for his client.”

“In a report and recommendation dated December 21, 2005, the Board set forth two charges. With respect to the first charge, they found that in 1998 when respondent was an associate at a law firm he filed a legal malpractice complaint but repeatedly failed to answer [*3]expert interrogatories, resulting in defense counsel obtaining two court orders directing him to produce responses, which he failed to do. In May 2000, respondent finally provided responses, albeit more than three months after the court ordered deadline. In June 2000, defense counsel moved to prohibit presentation of any expert testimony, and in August 2000, the trial court granted the defendants’ summary judgment motion. The trial court denied reconsideration and its decisions were affirmed by Pennsylvania appellate courts.”

“While the Pennsylvania court did not disbar respondent for his actions, this Court has found that where the sanction imposed in the original jurisdiction substantially deviates from that of New York, a more severe penalty may be imposed (see Matter of Munroe, 89 AD3d 1 [1st Dept 2011]). In Munroe this Court found that an attorney, who had been suspended for 2½ years in Massachusetts for engaging in a pattern of fraud, forgery, filing frivolous lawsuits and conversion, should be disbarred in New York (id.).

Here, the Pennsylvania court disciplined respondent after finding that he willfully engaged in the unauthorized practice of law for 18 months as he accepted new clients, failed to notify his new or former clients of his status, filed legal documents, and appeared in court numerous times after he was moved to “inactive” status. Under this Court’s precedent, engaging in the unauthorized practice of law over an extended period of time following a disciplinary suspension has resulted in disbarment (Matter of Sampson, 145 AD3d 95 [1st Dept 2016]; Matter of Rosabianca, 131 AD3d 215 [1st Dept 2015]).”

“In light of all of the circumstances and the nature of disbarment versus the punishment imposed by the Supreme Court of Pennsylvania (a three-year suspension), the Committee’s motion for reciprocal discipline should be granted, and respondent is disbarred from the practice of law in the State of New York and his name stricken from the roll of attorneys and counselors-at-law, nunc pro tunc to August 30, 2005.”

It looks like Plaintiff came to dislike Supreme Court, New York County.  It wanted out, even after the Court dismissed on summary judgment, without prejudice.  They had the chance to re-file there, but instead took the case to Westchester County.  Forum shopping?  We don’t know. But EB Brands Holdings, Inc. v McGladrey, LLP  2017 NY Slip Op 06923  Decided on October 4, 2017  Appellate Division, Second Department tells us that it was a bad, a very bad decision.

“Prior to commencing this action in the Supreme Court, Westchester County, in 2013, the plaintiff brought an action against the defendant in the Supreme Court, New York County (hereinafter the New York County action) asserting similar contentions. An order dated August 14, 2014, in the New York County action granted the defendant’s motion for summary judgment dismissing that complaint, without prejudice, on the ground that the complaint failed to state a cause of action. The court granted the plaintiff leave to replead in that action.

Thereafter, rather than amending its complaint in the New York County action, on September 8, 2014, the plaintiff commenced this action in the Supreme Court, Westchester County. In a judgment entered January 26, 2015, the Supreme Court, New York County, dismissed the New York County action pursuant to the plaintiff’s voluntary discontinuance of that action without prejudice.

After the dismissal of the New York County action, the defendant moved pursuant to CPLR 3211(a) for dismissal of the complaint in this action, in Westchester County, alleging, among other things, that the action is barred by the statute of limitations. The Supreme Court granted the defendant’s motion and dismissed the complaint. The plaintiff appeals.

The Supreme Court properly dismissed this action as time-barred (see Zaborowski v Local 74, Serv. Empls. Intl. Union, AFL-CIO, 91 AD3d 768, 768-769; Naval v Lehman Coll., 303 AD2d 662, 662; Kourkoumelis v Arnel, 238 AD2d 313, 313). The plaintiff’s contention that the statute of limitations was extended pursuant to CPLR 205(a) is without merit, as the time extension provisions of CPLR 205(a) are inapplicable when, as here, a prior, timely commenced action was terminated by voluntary discontinuance (see Zaborowski v Local 74, Serv. Empls. Intl. Union, AFL-CIO, 91 AD3d at 768-769; Naval v Lehman College, 303 AD2d at 662; Kourkoumelis v Arnel, 238 AD2d at 313).”

Attorney fees are the driver of what could be a majority of legal malpractice cases.  CLE lecturers consistently warn of the attorney fee-legal malpractice reflex arc, and with good reason.  Glassman v Weinberg 2017 NY Slip Op 06885 Decided on October 3, 2017  Appellate Division, First Department is a prime example.  Here the account stated claim fails and the breach of fiduciary duty claim withstands attack.

“Nevertheless, plaintiff’s motion for partial summary judgment on the account stated claim cannot be granted as to the other amounts billed, because plaintiff has not demonstrated entitlement to dismissal of defendant’s legal malpractice counterclaims, which are sufficiently intertwined with the account stated claim so as to provide a bona fide defense (see Emery Celli Brinckerhoff & Abady, LLP v Rose, 111 AD3d 453, 454 [1st Dept 2013], lv denied 23 NY3d 904 [2014]). In support of his motion for summary judgment dismissing these counterclaims, plaintiff failed to make a prima facie showing that his representation of defendant met the applicable standard of professional care and/or did not proximately cause any damages (see Rojas v Paine, 125 AD3d 745, 746 [2d Dept 2015]). With respect to the services he provided in Weinberg v Sultan, plaintiff simply asserted that defendant and her daughter were unable to provide facts concerning the closing, but made no showing that his investigation of the case, preparation of the complaint, and conduct of the litigation met the standard of “ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession” (Rudolf v Shayne, Dachs, Stanisci, Corker, & Sauer, 8 NY3d 438, 442 [2007] [internal quotation marks omitted]). Similarly, with respect to the other three legal malpractice counterclaims, plaintiff made conclusory assertions that he acted properly, without addressing defendant’s allegations or submitting any evidentiary support. Since plaintiff did not meet his initial burden, the burden did not shift to defendant to raise an issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

The motion court correctly sustained the counterclaims alleging plaintiff’s breach of fiduciary duty. Plaintiff did not respond to the third counterclaim’s allegation that his efforts to delay turnover of the escrowed funds were contrary to his fiduciary duty as an escrow agent. Further, plaintiff did not dispute the fourth counterclaim’s allegation that he kept the escrowed funds in a noninterest bearing account, nor did he offer any legal support for his claim that this conduct did not breach a duty of care owed to defendant.

 

In the world of big lending, a simple omission can cause large damages.  So it went in Scopia Windmill LP v Olshan Frome Wolosky LLP  2017 NY Slip Op 32031(U)  September 26, 2017
Supreme Court, New York County  Docket Number: 650616/2016  Judge: Saliann Scarpulla.  Plaintiffs were investing in agriculture in order to get into the fracking business. Apparently a certain bean is useful in thickening fracking water.  So, the investors hire Olshan to do the loan documents.  At the end a UCC-1 is not filed, and big costs ensue.  Question:  who is the client, who may sue and how do the affidavits in related cases affect everything?

“In its complaint against Olshan Scopia alleges three causes of action: (1) legal malpractice, for failing to file a UCC-1 financing statement when the 2012 Loan and Security Agreement and 2012 Loan were executed and for “drafting the 2012 Loan Agreement with problematic provisions that increased the likelihood that a bankruptcy court would recharacterize the loan as equity; and . . . otherwise failing to draft the 2012 Loan and Security Agreement and 2012 Term Loan Note in a competent manner so as to establish Scopia’s position as a senior secured debtor,” (2) for breaching the retainer agreement; and (3) for breach of fiduciary duty. In its motion to dismiss, Olshan first argues that it has no attorney-client relationship with two of the three named plaintiffs – Holdings and Windmill – and that any claim of malpractice does not extend to these two plaintiffs because they are not in privity with Olshan. Olshan further argues that SCM’s main contention — that due to Olshan’s late filing of the UCC-1 it was prevented from filing a petition for reorganization and enjoying the undisputed status of secured creditor – is disproved as a matter of law by testimony and affidavits filed by the principals of SCM and WTG in other proceedings. Olshan also claims that Scopia’s damages are impermissibly speculative. ”

“On the legal malpractice claim, Olshan claims that it is not in privity with either Windmill or Holdings, thus, their malpractice claims must be dismissed. As Scopia concedes, only SCM signed the retainer agreement with Olshan. Thus, for Windmill and ” Holdings to maintain this action, they must plead facts showing near privity to Olshan. To show “near privity,” a plaintiff must allege that the attorney was aware that its services were used for a specific purpose, that the plaintiff relied upon those services, and that the attorney demonstrated an understanding of the plaintiffs reliance. Cal. Pub. Employees Ret. Sys. v. Shearman & Sterling, 95 N.Y.2d 427, 434 (2000). Scopia alleges that, although SCM retained Olshan, Windmill, the actual lender to WTG, was a “foreseeable third-party beneficiary” of the retainer agreement between Olshan and SCM. The 2012 loan documents submitted show that Windmill was the lender for whom Olshan prepared and/or reviewed loan documents. These documents support Scopia’s allegation that Windmill was in near privity with Olshan. ”

“Finally, with respect to the malpractice claim of SCM and Windmill, Olshan argues that testimony and documents submitted in the bankruptcy and other legal proceedings conclusively refute their allegations of proximate cause and damages. “Under CPLR 3211 (a) (1), a dismissal is warranted only ifthe documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter oflaw.” Leon v. Martinez, 84 N.Y.2d 83, 88 (1994). After reviewing the documents and testimony submitted by Olshan, and the affidavits submitted by Scopia, I find that Olshan has failed to ‘refute conclusively Scopia’s allegations of proximate cause and damages. Accordingly, I deny the motion to dismiss the legal malpractice claim against Olshan asserted by Windmill and SCM. “

Privity between client and attorney is mirrored by the doctrine of the lack of a doctor-patient relationship.  Forget that there was a failure to diagnose breast cancer, and that the result can be deadly.  Social policy of limiting suits between patients and remote medical providers as well as the social policy of limiting legal malpractice cases is supreme here.

Gormley v Estabrook  2017 NY Slip Op 32021(U)  September 25, 2017  Supreme Court, New York County  Docket Number: 805236/16, Judge Martin Shulman tells us that: “Contrary to Gormley’s claim, RadNet has established its prima facie entitlement to summary judgmerit dismissing the complaint by submitting Linden’s sworn affidavit. See Hanna v North Shore-LIJ Network, Irie., 2013 WL 6222918, at *3 (Sup Ct Nassau County) (affidavit from defendant’s employee averring that defendant does not render patient care, did not render care to plaintiff and was not a corporate member of co-defendant medical center established entitlement to summary judgment and shifted burden to plaintiff to establish a material issue of fact). Upon RadNet establishing its prima facie case the burden shifted to plaintiff to “present facts in admissible form sufficient to raise genuine, triable issues of fact.” Mazurek v Metropolitan Museum of Art, supra; Zuckerman v City of New York, supra. “

In one of the more confusing fact recitations we have come across, where Plaintiff in action 1 is Defendant in action 2 and where both parties are female, pronouns and party-designation does not help.  Whatever.  In Verkowitz v Ursprung  2017 NY Slip Op 06675  Decided on September 27, 2017  Appellate Division, Second Department the attorney represented the client in a divorce, and then later in litigation over her husband’s estate, where the divorce proceedings were material.  In the end legal malpractice claims about the divorce are too late, but claims about the second case are still timely.

“The Supreme Court properly denied that branch of the defendant’s motion which was for leave to renew her opposition to that branch of the plaintiff’s prior motion pursuant to CPLR 3211(a) which was to dismiss the defendant’s counterclaim alleging that the plaintiff committed legal malpractice while representing her in a divorce action which ended with the entry of a judgment of divorce on February 27, 2004. The court properly determined, in an order entered June 16, 2011, granting that branch of the plaintiff’s motion, that the continuous representation doctrine was not applicable to toll the statute of limitations, and the new facts relied upon in support of the defendant’s motion would not have changed that determination (see CPLR 2221[e][2]). There was no evidence that the parties contemplated further representation of the defendant by the plaintiff after the entry of the judgment of divorce in the divorce action (see McCoy v Feinman, 99 NY2d 295, 306). The fact that the defendant again retained the plaintiff in May 2007, to represent her in subsequent litigation with her former husband’s estate which involved, inter alia, the interpretation of the divorce settlement agreement drafted by the plaintiff, did not render the representation continuous for the purpose of tolling the statute of limitations (see Matter of Lawrence, 24 NY3d 320, 341-342; Byron Chem. Co., Inc. v Groman, 61 AD3d 909, 911).

Defendant attorney in Baram v Person 2017 NY Slip Op 06625 Decided on September 26, 2017
Appellate Division, First Department  tried to spread the blame in two ways, each of which failed.  A third-party action was wholly wiped out.  His arguments that papers were insufficient similarly failed.

“Plaintiffs alleged in their complaint that defendant attorney was negligent in failing to timely file an underlying malpractice claim in arbitration as against plaintiffs’ original attorneys, and that, as a result of such negligence, plaintiffs’ late-filed arbitration claim for actual and ascertainable damages was permanently stayed (see Herrick Feinstein LLP v Baram, 132 AD3d 499 [1st Dept 2015]). These factual allegations, as supplemented by plaintiffs’ papers in opposition to defendant attorney’s dismissal motion, sufficiently alleged a legal malpractice claim (see generally Leon v Martinez, 84 NY2d 83, 87-88 [1994]; see Brooks v Lewin, 21 AD3d 731, 734 [1st Dept 2005], lv denied 6 NY3d 713 [2006]; Escape Airports [USA], Inc. v Kent, Beatty & Gordon, LLP, 79 AD3d 437 [1st Dept 2010]).

Defendant attorney’s argument that plaintiffs’ papers in opposition to his motion to dismiss lacked evidentiary value because the annexed affidavits were notarized by the third-party defendant attorney (Feldman) and Feldman only submitted affirmations rather than affidavits, is unavailing. Feldman was not a party to plaintiffs’ action alleging malpractice, and as such, his submission of affirmations was appropriate, particularly since the causes of action in plaintiffs’ action and the third-party action were distinct and independent of one another (see CPLR 2106). Also, Feldman did not have a direct, pecuniary interest in the malpractice action, and thus was capable of acting as a notary in that action (see New York State, Department of State, Division of Licensing Services, Notary Public License Law at 7 [June 2016], http://www.dos.ny.gov/licensing/lawbooks/notary.pdf [accessed Aug. 28, 2017]).

The motion court correctly dismissed the third-party complaint, as the viability of its claims for, among other things, abuse of process, fraud on the court, and tortious interference with advantageous business relationships were wholly undermined by the submissions on the motions.”

In an otherwise run-of-the-mill contract case between an IT provider and a bank, Justice Kornreich illustrates a couple of interesting principles.  The first is that IT providers do not rise to the level of professional engineers for the purpose of allowing tort litigation against them.  The second is the “economic loss doctrine.”

 Cervalis LLC v RBS Holdings, USA, Inc.  2017 NY Slip Op 31973(U)  September 18, 2017
Supreme Court, New York County  Docket Number: 650405/2017  Judge: Shirley Werner Kornreich is a case about computers and a data center.  There were failures.

“Plaintiff provides computer information technology services, including colocation (rental, housing, and/or maintenance of computer servers), power and cooling, security, compliance, and network services. Answer at I ~ 2. Defendant is a Connecticut-based financial services provider who contracted for plaintiffs services, which were to be used by the global financial markets division of The Royal Bank of Scotland.”

“In its Counterclaims (Answer at 6-16), defendant alleges that on November 28, 2015, at approximately 12:50 P.M., plaintiff caused a power outage in the Data Center by failing to properly return the fire alarm control panel and related systems to normal operation following a test of the fire alarm system.~~ 10-18. Defendant contends that the power outage disrupted its computer systems, which were housed in the Data Center(~ 19); that plaintiff prolonged the outage by performing unnecessary troubleshooting (~ 20); that the outage lasted for more than eight hours (~ 23 ); and that plaintiff failed to promptly notify defendant of the power outage as it was required to do pursuant to contract.~ 25; Dkt. 20 at 8 (Addendum). Moreover, defendant claims that when defendant became aware of the outage, plaintiff refused certain access to defendant personnel, again in violation of contract.~ 27; Dkt. 20 at 7 (Addendum). Finally, defendant surmises that to avoid the contractual consequences of a power outage lasting longer than two hours (a “Catastrophic Failure,” discussed below), plaintiff attempted to restore power at the Data Center in an abrupt fashion, causing unnecessary damage to defendant’s equipment, data, and operations. At about 9: 15 P.M., normal operations at the Data Center were finally restored.”

Here are the interesting bits:

  1.  “[A] simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated.” Clark-Fitzpatrick, Inc. v Long Island R. Co., 70 NY2d 382, 389 (1987). Additionally, under the so-called economic loss doctrine, “a contracting party seeking only a benefit of the bargain recovery, viz., economic loss under the contract, may not sue in tort …. ” 17 Vista Fee Assocs. v Teachers Ins. & Annuity Ass ·n of Am., 259 AD2d 75, 83 (I st Dept 1999); see also Sommer v Fed. Signal Corp., 79 NY2d 540, 552 ( 1992) (“[W]here plaintiff is essentially seeking enforcement of the bargain, the acfion should proceed under a contract theory.”). 5 However, where a party to a contract breaches a “legal duty independent of contractual .obligations … imposed by law as an incident to the parties’ relationship,” that party “may be subject to tort liability for failure to exercise reasonable care, irrespective of their contractual duties.” Sommer, 79 NY2d at 551. “
  2. “While courts have recognized a professional duty for some engineers, see, e.g., Hydro Inv ‘rs, Inc. v Trafalgar Power, Inc., 227 F.3d 8 (2d Cir. 2000), operating a computing data center does not implicate the same policy concerns as traditional engineering professions. See Sommer, 79 NY2d at 551-52 (“In [some] instances, it is policy, not the parties’ contract, that gives rise to a duty of due care.”); see also Richard A. Rosenblatt & Co. v Davidge Data Sys. Corp., 295 AD2d 168, 169 (1st Dept 2002) (“[T]he courts of this State do not recognize a cause of action for professional malpractice by computer consultants.”).”

In this legal malpractice case, the attorney has the right to represent himself.  Question:  How does insurance filter into this?  In Herczl v Feinsilver  2017 NY Slip Op 06528 Decided on September 20, 2017 Appellate Division, Second Department

“In 2010, the defendant David Feinsilver, an attorney, commenced representing the plaintiff in a legal matter unrelated to this action. While that unrelated matter was pending, Feinsilver and the plaintiff entered into an arrangement to purchase properties and “flip” them for a profit. Feinsilver and the plaintiff agreed on the terms of the arrangement, which the plaintiff refers to as a “joint venture” and Feinsilver refers to as an “independent contractor” agreement. The agreement set out, among other matters, their roles and responsibilities, and the division and allocation of profits and losses.

A dispute arose with respect to two properties in Brooklyn, and, in August 2013, the plaintiff commenced this action against Feinsilver and other entities related to Feinsilver. The plaintiff alleged, among other things, breach of fiduciary duties, breach of contract, fraud, and legal malpractice. The defendants interposed various counterclaims.

In December 2013, as relevant here, the plaintiff moved to disqualify Feinsilver and his law firm, The Feinsilver Law Group, from representing the defendants in this action. In an order dated June 6, 2014, the Supreme Court, inter alia, granted the motion with respect to Feinsilver himself, disqualifying him from representing any of the defendants, including himself. The defendants appeal from so much of the order as disqualified Feinsilver from representing himself.

An attorney, like any other litigant, has the right, both constitutional (see NY Const, [*2]art I, § 6) and statutory (CPLR 321[a]), to self-representation (see Walker & Bailey v We Try Harder, 123 AD2d 256, 257). Although the right is not absolute, any restriction on it must be carefully scrutinized (see id. at 257; Oppenheim v Azriliant, 89 AD2d 522, 522). Here, the plaintiff failed to demonstrate any compelling reason why Feinsilver should not be allowed to represent himself in this action (see Old Saratoga Sq. Partnership v Compton, 19 AD3d 823, 825; Walker & Bailey v We Try Harder, 123 AD2d at 257; Oppenheim v Azriliant, 89 AD2d at 522). Accordingly, the Supreme Court erred in disqualifying Feinsilver from representing himself in this action (see Old Saratoga Sq. Partnership v Compton, 19 AD3d at 825; Walker & Bailey v We Try Harder, 123 AD2d at 257; Azriliant v Oppenheim, 91 AD2d 586, 587; Oppenheim v Azrilant, 89 AD2d at 522).

We’re proud to present our “Judiciary Law § 487 Suffers an Earthquake” article from today’s New York Law Journal.  It discusses the recent sweep of JL § 487 law, including Bounkhoun v. Barnes et al., Case No. 15-cv-631A,  which now awaits a decision by District Judge Joseph Arcara whether to accept the recommendation.

A recent Judiciary Law §487 case in the Western District of New York has violently shaken the basic understanding of the elements of this common-law cause of action. We predict a Second Circuit case, and potentially a Certified Question to the New York Court of Appeals. Here are the particulars.

Attorneys are interlaced throughout our country and world. In the United States litigation is rampant, all-encompassing and shot through with discontent. Clients are looking for superior work and fair pricing. Attorneys are interested in getting work, succeeding at that work and being paid. It is both obvious and simple to say that the two sets of desires do not always mesh.

When expectations are not met, there are a series of well-trodden paths down which the clients and the attorneys move. Legal malpractice claims are mirrored in attorney fee law suits. There is a symmetry to it all, from a perspective far enough above the fray to have a clear picture of the whole scene.