Chandy Bounkhoun, Plaintiff,  v.  Steven E. Barnes, Esq. et al., Defendants. No. 15-CV-631A.
United States District Court, W.D. New York.  April 11, 2017 is a stunning new decision from the Western District of New York.  Magistrate Scott takes us from Medieval England to colonial times to look at the the criminal law underpinnings of Judiciary Law § 487.

“Here is what the Appellate Division said about how the predecessor in question operated to expand the concept of attorney deceit beyond the bounds of the common law:

The common law, as well the statute, relating to the offense of obtaining property by false pretenses, were adequate to the punishment of all such offenses, whether committed by lawyers or laymen. Moreover such an offense being punishable by imprisonment in a State prison, comes under the statutory definition of a felony. At common law, also, fraud and damage gave a civil action to the party injured. There was no occasion, therefore, for another statute to punish, or to give an action for the `deceit’ of lawyers, unless the Legislature intended that that class of persons should be liable for acts which would be insufficient to establish a crime or a cause of action against citizens generally. The statute is limited to a peculiar class of citizens, from whom the law exacts a reasonable degree of skill, and the utmost good faith in the conduct and management of the business intrusted to them. An attorney or counsellor who advises ignorant adult owners of land that they are not competent to convey it, and thereby induces them to employ him to institute a suit in partition, and incur the expense thereof, for the purpose of effecting a sale of the [land] gives them erroneous advice, and thereby misleads them to their injury, and if he is qualified to perform the functions of an attorney, he does it knowingly. To mislead the court or [a] party is to deceive it; and, if knowingly done, constitutes criminal deceit under the statute cited.

Looff, 14 Hun 588, 1878 N.Y. App. Div. LEXIS 1, at *4-5, aff’d, 97 N.Y. 478, 480 (1884). Bringing the principles from Looff back to Section 487, by way of NY Amalfitano, the meaning of “deceit” in the statute now can be understood. As used in Section 487, “deceit” by an attorney means misleading a court or a party by saying or doing anything that exploits the trust that courts and parties place in attorneys as officers of the legal system. Looff and NY Amalfitano addressed affirmative conduct, but there does not appear to be any reason to exclude the absence or omission of something said or done if the absence or omission would result in the same exploitation of trust. Including absences and omissions is important to plaintiff’s case here. Plaintiff’s allegations have an element of affirmative conduct with respect to some conduct at trial and the inducement to sign the high-low agreement. The weight of plaintiff’s allegations, however, lie in defendants’ omission of information from plaintiff to the insurer about the possibility of settling the case for $150,000; and in the omission of information from the insurer to plaintiff about a willingness to continue negotiations. If those omissions caused the same misleading and the same exploitation of trust as affirmative conduct then their status as omissions by itself should make no difference.

Looff also addresses another term in the operative language of Section 487: “intent.” Simply put, when attorneys exploit the trust that courts and parties place at them and wind up misleading those courts or parties, as long as the attorneys are licensed and in good standing— “qualified to perform the functions of an attorney”—the conduct is done knowingly. The treatment of “intent” that the New York Court of Appeals has endorsed by embracing Looff again demonstrates the desire to expand the reach of Section 487 beyond what might have been available under the common law to address deceitful conduct from attorneys.

The last term to assess from the operative language of Section 487 is “guilty.” The word appears twice in Section 487, once in Section 487(1) as a condition of determining “deceit”; and once at the end of Section 487, when a finding of deceit with the requisite intent—among other conditions not relevant to this case—authorizes a factfinder to pronounce a misdemeanor conviction. The Judiciary Law does not give the term “guilty” any definition peculiar to that statute or to Section 487 in particular. Four other sources of information offer some guidance instead. In ordinary parlance, people use the word “guilty” literally to mean criminal guilt, whether they have an exact burden of proof in mind or not; they also use the word more generally to mean that someone is confirmed to have committed some kind of transgression against someone else. The more general understanding of the word “guilty” is not persuasive here, considering the consequences to an attorney’s reputation that would follow from a finding of deceit and a misdemeanor conviction. Black’s Law Dictionary offers some guidance as well, defining “guilty” as either “having committed a crime; responsible for a crime” or “responsible for a civil wrong, such as a tort or breach of contract.” Guilty, Black’s Law Dictionary (10th ed. 2014). The former definition carries more weight in this circumstance because the direct consequence for guilt under Section 487 is a misdemeanor conviction. Appendix A shows that Section 487, in all substantive respects, has not changed at all since it rested in the Penal Law, adding to the Court’s sense that “guilty” there means what it usually means in criminal prosecutions. See also Neroni v. Becker, No. 3:12-CV-1226 GLS/DEP, 2014 WL 2532479, at *4 (N.D.N.Y. June 5, 2014) (“Furthermore, in addition to the fact that the plain language of § 487 criminalizes deceitful or fraudulent conduct by attorneys, New York state courts have consistently recognized that § 487 is rooted in criminal law. Accordingly, the state could have sought to commence criminal proceedings under § 487.”) (citations omitted). Finally, a strong source of guidance comes from the widespread convention in statutes and common law that guilt refers to criminal wrongdoing while “liable” or something similar refers to civil wrongdoing. See, e.g., Elonis v. United States, ___ U.S. ___, 135 S. Ct. 2001, 2011 (2015) (“Elonis’s conviction, however, was premised solely on how his posts would be understood by a reasonable person. Such a `reasonable person’ standard is a familiar feature of civil liability in tort law, but is inconsistent with the conventional requirement for criminal conduct—awareness of some wrongdoing.”) (citation omitted); Resnick v. Resnick, 722 F. Supp. 27, 37 (S.D.N.Y. 1989) (“New York law provides, however, that a defendant may be held liable for a [civil] conspiracy to do an unlawful thing, or to do a lawful thing in an unlawful manner.”) (citations omitted); N.Y. Gen. Bus. Law § 815 (using the phrase “shall be liable” when assessing civil penalties); N.Y. Envtl. Conserv. Law § 71-2729 (same); N.Y. Workers’ Comp. Law Appx. § 316.5 (same). The above guidance persuades the Court to conclude that, for purposes of Section 487, “guilty” refers to establishing misdemeanor criminal liability beyond a reasonable doubt. Section 487, at its core, then, is a criminal statute like its immediate predecessor—former Penal Law section 273—and like its ancestor statutes dating back centuries.^[4] That the term “guilty” appears twice in the statute seems a little repetitive, but given that the statute operates to assess misdemeanors, the repetition simply is an explicit rendering of the principle in criminal law that every individual element of an offense must be established beyond a reasonable doubt. See, e.g., United States v. Viafara-Rodriguez, 729 F.2d 912, 913 (2d Cir. 1984)(citations omitted).”

“If the core of Section 487 operates as a criminal statute then what should the Court make of the civil clause attached at the very end? After pronouncing an attorney with the necessary elements guilty of a misdemeanor, Section 487 says that “in addition to the punishment prescribed therefor by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action” (emphasis added). “In addition to” suggests newer options that are layered or that open up alongside older, pre-existing ones. See, e.g., Medtronic, Inc. v. Lohr, 518 U.S. 470, 500 (1996) (finding that 21 U.S.C. § 360k(a) does not preempt common-law state tort claims because they are not state requirements for medical devices that are “different from, or in addition to” federal regulations); Leist v. Simplot, 638 F.2d 283, 313 (2d Cir. 1980) (holding that a private right of action under the Commodity Exchange Act was a new remedy in addition to older remedies); In re Roberts, 514 B.R. 358, 362 (Bankr. E.D.N.Y. 2014) (interpreting the definition of a bankruptcy estate in 11 U.S.C. § 1306(a) to add property “in addition to” property described in 11 U.S.C. § 541(a)(5)); Anemone v. Metro. Transp. Auth., 410 F. Supp. 2d 255, 269 (S.D.N.Y. 2006) (describing how the alteration of a plaintiff’s rights in “stigma plus” litigation—that is, the “plus”—”must be in addition to the stigmatizing statements”) (emphasis added). People who are wronged by a deceitful attorney thus have the option or pursuing criminal or civil redress, or both, but only after misdemeanor guilt is established. The plain language of the statute says that any civil penalty of treble damages comes on top of whatever the New York Penal Law authorizes as a punishment for misdemeanors. See Amalfitano v. Rosenberg (“SDNY Amalfitano“), 428 F. Supp. 2d 196, 210-11 (S.D.N.Y. 2006) (“The wording of the statute thus makes it clear that the civil remedy is in addition to the criminal sanction for the same conduct.”). If the statute does not allow a factfinder to reach criminal or civil remedies before first reaching a misdemeanor conviction then any civil remedies under Section 487 must require a misdemeanor conviction as a prerequisite. See Melcher v. Greenberg Traurig, LLP, 11 N.E.3d 174, 175 (N.Y. 2014) (“Judiciary Law § 487 exposes an attorney who is guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party to criminal (misdemeanor) liability and treble damages, to be recovered by the injured party in a civil action.”) (internal quotation and editorial marks omitted) (emphasis added). No particular criminal penalty would be required, just the conviction itself. The New York Court of Appeals in NY Amalfitano implicitly recognized the dependence of the civil penalty on the criminal conviction when it assessed the history of Section 487 and wrote that, in the late 19th century, “[t]he Legislature later codified this misdemeanor crime and the additional civil forfeiture remedy as section 148 of the Penal Code of 1881.” NY Amalfitano, 903 N.E.2d at 268 (emphasis added). Layering a civil penalty on top of a criminal conviction and penalty is not unheard of— federal asset forfeiture upon conviction is just one example—and is consistent with the idea that the New York Legislature considered attorney deceit especially repugnant.”

“Where does all of the above analysis leave plaintiff? Plaintiff has pled that defendants ignored her desire to settle her case, and walked away from ongoing negotiations without her knowledge. Plaintiff has pled further that defendants engineered a high-low agreement at trial that essentially gave their costs higher priority than her permanent loss of an eye. Whatever proof might emerge at discovery, the claim of legal malpractice in the amended complaint—Count IV, which defendants have not moved to dismiss—would appear to cover the full range of plaintiff’s allegations. The Court is not aware of any prosecution of defendants under Section 487, and plaintiff in any event has not pled nearly enough detail to show that defendants might have fulfilled all of the elements of Section 487 and might be guilty of a misdemeanor. Without fulfillment of the elements of a criminal offense under Section 487, and a resulting conviction, this case presents no criminal prerequisite that treble damages can be “in addition to.”

Under these circumstances, Count III of the amended complaint fails, and the Court thus recommends granting defendants’ motion with respect to Count III. Since Count III fails as a matter of law, the Court need not address plaintiff’s arguments about the need to obtain discovery.”

Chandy Bounkhoun, Plaintiff,  v.  Steven E. Barnes, Esq. et al., Defendants. No. 15-CV-631A.
United States District Court, W.D. New York.  April 11, 2017 is a stunning new decision from the Western District of New York.  Magistrate Scott takes us from Medieval England to colonial times to look at the the criminal law underpinnings of Judiciary Law § 487.

“Plaintiff Chandy Bounkhoun suffered permanent blindness in one eye when she was struck by a rock thrown from a lawnmower that her landlord was using. Plaintiff retained defendants Steven E. Barnes, Esq., Ross M. Cellino, Esq., Christopher D. D’Amato, Esq., and Cellino & Barnes, P.C. to pursue a personal injury action against the landlord. The case went to trial and ended in a defense verdict; under the terms of a high-low agreement, plaintiff was awarded $25,000 minus costs and fees.”

“N.Y. Jud. L. § 487 (Westlaw 2017). “[S]ection 487 is not a codification of a common-law cause of action for fraud. Rather, section 487 is a unique statute of ancient origin in the criminal law of England. The operative language at issue—`guilty of any deceit’—focuses on the attorney’s intent to deceive, not the deceit’s success. . . . Further, to limit forfeiture under section 487 to successful deceits would run counter to the statute’s evident intent to enforce an attorney’s special obligation to protect the integrity of the courts and foster their truth-seeking function.” Amalfitano v. Rosenberg, 903 N.E.2d 265, 268 (N.Y. 2009) (“NY Amalfitano“) (citation omitted). The operative language from Amalfitano is the same operative language that plaintiff invoked in paragraph 59 of the amended complaint, and it merits a closer look. What Section 487 proscribes, and what remedies it makes available, will help the Court determine the sufficiency of Count III.”

“The first term in Section 487(1) that requires closer examination is the term “deceit.” New York’s Judiciary Law does not define the term as used in any of its sections, including Section 487. That said, the New York Court of Appeals in NY Amalfitano traced the use of the term “deceit” in Section 487 all the way back to Magna Carta and noted the consistent understanding of that term as applied to attorneys representing clients in litigation. Specifically, the New York Court of Appeals quoted with approval two principles from an old Appellate Division case that interpreted a predecessor statute with substantially identical language.^[3] The first principle is that the prohibition against deceit in Section 487 and its ancestors applies to attorneys, “a peculiar class of citizens, from whom the law exacts a reasonable degree of skill, and the utmost good faith in the conduct and management of the business intrusted to them . . . To mislead the court or a party is to deceive it.” NY Amalfitano, 903 N.E.2d at 268 (ellipsis in original) (quoting Looff v. Lawton, 14 Hun 588, 589 (N.Y. App. Div. 1878)). The second principle is that “deceit” for purposes of Section 487 is more expansive than the meaning that developed under the common law. Since the New York Court of Appeals embraced the understanding of “deceit” from Looff, a full passage from that case is appropriate here. In Looff, the plaintiffs owned a parcel of real estate that they wanted to sell. They retained an attorney, who in short told them that their title was bad and that the sale would require judicial proceedings that netted the attorney a significant amount in costs and fees. The plaintiffs sued to recover the costs and fees, claiming that the attorney deceived them about the quality of their title. The trial court dismissed the case for failure to state a sufficient cause of action, but the Appellate Division reversed. Here is what the Appellate Division said about how the predecessor in question operated to expand the concept of attorney deceit beyond the bounds of the common law”

We will continue this tomorrow.

Chapman Steamer Collective LLC v Jones    2017 NY Slip Op 30722(U)  April 13, 2017
Supreme Court, Kings County  Docket Number: 501809/16  Judge: Ellen M. Spodek asks the question of what happens when an attorney takes on a very difficult case, offers the only (weak) defense and loses the case.  Was the effort without any merit?

“In August 2007, Wang purchased real property located at 179 Dubois Street, in Newburgh, New York (the property). In September 2008, Wang transferred the property to Chapman, a limited liability company formed by her in order to purchase and renovate the property, which was an old firehouse. Wang was the sole member of Chapman. Wang planned a mixed use for the property and sought financing for this construction project through Keybank National Association (Keybank). In 2008, Chapman applied for a long-term construction loan in the sum of$700,000 with _Keybank (the permanent construction loan), which was to be a community development loan involving the potential grant of tax credits. In order to finance interim construction while waiting for the application process for the permanent construction Joan to be completed, plaintiffs sought a line of credit bridge Joan from Keybank. On October 14, 2008, Chapman signed a loan agreement, a note, and a mortgage on the property securing the note for a line of credit loan from Keybank in the sum of$221,000 (the bridge loan), which was personally guaranteed by Wang pursuant to a written guaranty executed by her. The loan documents provided that the bridge loan wrui for a 12-month term at the interest rate of the prime rate plus one percent, and the unpaid principal and interest was required to be paid in full by November 1, 2009. In addition, paragraph 25 of the mortgage bridge loan and the guaranty provided that plaintiffs waived the right to interpose any defense, setoff or counterclaim whatsoever to any action brought by Keybank to enforce its rights under such mortgage and guaranty. Chapman drew the entire $221,000 line of credit from the bridge loan. ”

“When the bridge loan became due on November 1, 2009 pursuant to the tenns of the I note antl mortgage, Chapman defaulted on the note and Wang defaulted on the guaranty. Consequently, on August 3, 2010, Keybank commenced an action in the Supreme Court, Orange County (the foreclosure action), to foreclose the mortgage and to recover on the guaranty to the extent of holding Wang liable for any deficiency remaining after the foreclosure sale. Keybank filed a summons, complaint, and a notice of pendency in the foreclosure action. Plaintiffs then retained defendant to.represent them with respect to defending them in the foreclosure action.”

“Defendant interposed an answer, on behalf of plaintiffs, in the foreclosure action, dated October 15, 2010, asserting 13 affirmative defenses and a counterclaim. The seventh . affirmative defense alleged that although Chapman had complied with all of Keybank’s lending requirements, it failed to proceed to closing on the permanent construction loan. The ninth affirmative defense alleged that Keybank was barred from proceeding with the foreclosure action because it promised and enticed plaintiffs to accept the note and mortgage of the bridge loan with the express promise that it would write a construction loan for the benefit of Chapman to fund the final phase of construction. The counterclaim asserted that Keybank was negligent in failing to close the permanent construction loan and sought to recover damages, alleging, ainong other things, that Keybank, as part of a series of predatory lending practices, induced plaintiffs into mortgaging the property pursuant to the bridge loan based on unfulfilled promises of access to further development funding, i.e., the permanent construction loan. ”

“Plaintiffs’ theory of recovery for legal malpractice is predicated on their allegations that there was no defense to Keybank’s complaint in the foreclosure action due to the waiver of defenses and counterclaims contained in paragraph 25 of the bridge loan mortgage. Plaintiffs contend that there was absolutely no defense to the foreclosure action that could have been claimed at the time that defendant filed the answer on their behalf. ”

“Plaintiffs’ argument and Berlandi’s opinion are rejected. Plaintiffs sought representation from defendant in ·the foreclosure action, and he interposed the only cognizable defense to the foreclosure action available to plaintiffs by interposing a counterclaim and defenses sounding in fraudulent inducement. In these defenses and counterclaim, defendant alleged that Keybank fraudulently induced plaintiffs to enter into the bridge loan based on the unfulfilled promise to provide additional permanent financing pursuant to the contemplated permanent construction loan. Defendant’s attempt to defend plaintiffs in this manner was not an unreasonable course of action, but a strategic decision to pursue the only available defense. The fact that plaintiffs’ counterclaim and defenses of fraud were unsuccessful, despite defendant’s efforts, is not a ground for a claim of legal malpractice. Plaintiffs’ present dissatisfaction with defendant’s strategic choice does not support a legal malpractice claim as a matter o flaw (see Tantleff v Kestenbaum & Mark, 131 AD3d 955, 958 [2d Dept 2015], Iv denied 27 NY3d 906 [2016]). “[A]n attorney is not a guarantor of a particular result … and may not be held liable in negligence for … the exercise of appropriate judgment that leads to an unsuccessful result” (Bua, 99 AD3d at 846- 84 7 [internal quotation marks and citation omitted]; see also Rubinbergv Walker, 252 AD2d 466, 467 [1st Dept 1998])  “

Often, a Judiciary Law § 487 claim is mentioned, or even discussed, but not resolved in a case. Gerard v Cahill    2017 NY Slip Op 02779  Decided on April 12, 2017  Appellate Division, Second Department is such an example.  A real estate dispute with overtones of fraud, there is a 487 claim.  Was it decided?

“In an action, inter alia, in effect, for a judgment declaring the rights and obligations of the parties under an operating agreement of a limited liability company and to recover damages for fraud (Action No. 1), and a related action, inter alia, to recover damages for conversion (Action No. 2), which were joined for trial, (1) Catherine Cahill, as executrix of the estate of Marvin Hyman, a defendant in Action No. 1, appeals, as limited by her brief, from so much of a judgment of the Supreme Court, Suffolk County (Baisley, Jr., J.), dated May 20, 2014, as, upon a decision of the same court dated April 21, 2014, made after a nonjury trial, declared that she is required to restore the sum of $1,045,400 to the account of Buckskill Farm, LLC, a plaintiff in Action No. 1, and the plaintiffs cross-appeal, as limited by their brief, from so much of the same judgment as failed to award them treble damages for an alleged violation of Judiciary Law § 487, and (2) Catherine Cahill, individually, the defendant in Action No. 2, appeals, as limited by her brief, from so much of a judgment of the same court, also dated May 20, 2014, as, upon the decision, is in favor of Buckskill Farm, LLC, a plaintiff in Action No. 2 and against her in the principal sum of $1,045,400.”

“”Where the trial court’s findings of fact rest in large measure on considerations relating to the credibility of witnesses, deference is owed to the trial court’s credibility determinations” (Bennett v Atomic Prods. Corp., 132 AD3d 928, 930; see Neiss v Fried, 127 AD3d 1044, 1045). Here, contrary to Cahill’s contention, the Supreme Court’s determination that Hyman agreed to allow Buckskill to redeem his interest in the company for the sum of $850,000, or one lot, if the subject property was sold to the Town, was warranted by the facts. The court specifically found that Cahill’s testimony was not credible, and there is no basis to disturb the court’s determinations (see Lawson-Groome v Smalls, 144 AD3d 633, 634; Pappas v Liapes, 138 AD3d 943, 944).

The parties’ remaining contentions are without merit.”

Pick & Zabicki LLP v Wu  2017 NY Slip Op 30687(U)  April 4, 2017  Supreme Court, New York County  Docket Number: 155702/2016  Judge: Gerald Lebovits is interesting because, although a generic attorney-fee claim with generic defenses, it is a very complete generic listing.  So, read this case for the long discussion of 20 affirmative defenses and 4 potential counterclaims.  It is a road-map to the standards of each.

“Defendant’s answer raises the following defenses and/or affirmative defenses, numbered 1 through 20: (I) failure to state a cause of action, but plaintiff does not move to dismiss this defense; (2) unclean hands and/or in pari delecto; (3) lack of capacity to sue; ( 4) lack of standing to sue; (5) claim is barred or, in the alternative, plaintiffs damages are the result of its own breach of fiduciary duty, breach of certain agreements, and failure to complete the performance required; (6) lack of damages, or that the damages are inconsequential and de minimis; (7) failure to mitigate; (8) claims were not filed within the applicable statutes of limitations and/or administrative filling periods; (9) plaintiff failed timely and properly to exhaust all necessary administrative, statutory, and/or jurisdictional prerequisites to commence this action; (I 0) waiver and estoppel; (I I) !aches; (12) plaintiff failed to comply with its obligations under the agreement; (13) claims are barred in whole or in part by the existence of the agreement which sets forth the only representation on which the parties were entitled to rely, as well as the parties’ rights and obligations with respect to each other; (14) defendant’s performance was excused, and defendant would have performed its obligations under the contract but for plaintiffs interference with defendant’s ability to perform, to the extent that defendant is found in breach of the contract; (15) insufficiency of service of process; (16) invalid service of process; (17) defendant does not owe the alleged debt and demands proof of the debt and damages plaintiff claims under the alleged contract; (18) lack of capacity to maintain or defend an action in the courts of the State of New York because plaintiff is unlicensed to do business in the State of New York; (19) “[p ]laintiff presented the [ d]efendant a forged contract with his name”; and (20) the purported contract is a fraud because the defendant was absent when it was executed. ”

“Defendant submits a proposed Verified Counterclaim, which includes the following counterclaims:(!) breach of fiduciary duty; (2) legal malpractice; (3) unjust enrichment; and (4) fraud. ”

“Accordingly, it is ORDERED that plaintiffs motion to dismiss the second through the twentieth defenses and/or affirmative defenses is granted; and it is further ORDERED that defendant’s cross-motion to interpose counterclaims is denied; and it is further “

Hattem v Smith  2017 NY Slip Op 02872  Decided on April 13, 2017  Appellate Division, Third Department is a rare legal malpractice tried to verdict.  It involves the sale of a business and the aftermath.  Even more rare were the “comparative fault” and “mitigation of damages” defenses.  Here is how the Third Department explains:

“Plaintiff commenced this legal malpractice action in 2007 and, following a jury trial, defendants were found liable and directed to pay damages. This Court upheld the verdict as to liability but, pointing to questions regarding plaintiff’s comparative fault that had not been submitted to the jury, remitted for a new trial on the issue of damages (111 AD3d 1107, 1109-1110 [2013]). The subsequent jury trial resulted in a verdict finding that plaintiff had sustained $318,000 in damages. The jury found that 35% of the damages had flowed from plaintiff’s negligence, however, and reduced the award by $90,000 due to his unreasonable failure to mitigate them after the fact. Plaintiff appeals from the judgment entered thereon, as well as orders by Supreme Court that denied his motion to set aside the verdict and granted defendants’ motion to direct entry of judgment.

We affirm. Plaintiff asserts that the verdict should have been set aside with regard to the finding of comparative fault and the reduction in damages for his failure to mitigate ^[FN1]. In reviewing a verdict, we “may examine the facts to determine whether the weight of the evidence comports with the verdict, or [we] may determine [whether] the evidence presented was insufficient as a matter of law” (Killon v Parrotta, 28 NY3d 101, 107 [2016]). A verdict is against the weight of the evidence “where ‘the evidence so preponderate[d] in favor of the [moving party] that [the verdict] could not have been reached on any fair interpretation of the evidence'” (Johnstone v First Class Mgt. of N.Y., LLC, 138 AD3d 1222, 1223 [2016], quoting Grassi v Ulrich, 87 NY2d 954, 956 [1996] [internal quotation marks and citations omitted]; see Killon v Parrotta, 28 NY3d at 107). In contrast, the evidence is legally insufficient to support a verdict “[w]here ‘there is simply no valid line of reasoning and permissible inferences which could possibly lead rational [people] to the conclusion reached by the jury on the basis of the evidence presented at trial'” (Longtin v Miller, 133 AD3d 939, 940 [2015], quoting Cohen v Hallmark Cards, 45 NY2d 493, 499 [1978]; see Killon v Parrotta, 28 NY3d at 108).

Here, Smith sent the sale documents to counsel for OSC in the expectation that they would be executed by OSC’s principals and returned to him for plaintiff to sign. Plaintiff was aware of the need for a UCC-1 and was counting on Smith to file one in order to perfect his security interest in JMF’s equipment. Plaintiff and OSC’s principals nevertheless traveled to an NBT branch at plaintiff’s suggestion and executed the documents together, at which time OSC’s principals borrowed the funds for the down payment from NBT and opened a line of credit that was secured by the assets of JMF. Plaintiff made no effort to consult with Smith as to the import of this state of affairs, and Smith, who remained ignorant of it, did not obtain the executed sale documents until after NBT had filed a UCC-1. Plaintiff, in other words, created a situation where NBT would have had a superior security interest on JMF’s equipment even if Smith had filed a UCC-1 in a timely manner (see UCC 9-317, 9-324). The jury was by no means irrational in finding from the foregoing that plaintiff’s actions were negligent and contributed to his losses. Moreover, deferring to the jury’s interpretation of the trial evidence and noting that a [*3]”determination of comparative negligence is wholly within [its] province,” we cannot say that the apportionment of 35% fault to plaintiff was against the weight of the evidence (Mannello v Town of Ulster, Post 1748, Am. Legion, 272 AD2d 804, 804-805 [2000]).

As for plaintiff’s failure to mitigate damages, he recovered ownership and possession of JMF’s equipment and vehicles following the default of OSC in 2007. No vigorous action to enforce the federal tax liens or the NBT liens was underway and, as such, plaintiff’s then counsel suggested that he negotiate with the creditors, auction off some or all of the assets to satisfy the NBT and tax liens and keep the remaining proceeds. Plaintiff did not do so and, instead, enticed a third party into purchasing the commercial paper underlying the NBT lien as a prelude to redeeming it. Plaintiff still failed to auction off equipment or vehicles and did not fulfill his obligations under the agreement with the third party. Plaintiff’s inaction prompted the third party to commence a replevin action for all of the vehicles and equipment and, after plaintiff defaulted in appearance, the vehicles and equipment were awarded to the third party. A jury could readily find from the foregoing that plaintiff’s failure to sell some or all of the equipment and vehicles to satisfy the liens was unreasonable — and that the failure caused him to lose whatever assets or sale proceeds would have remained after satisfying the various liens — and the verdict with regard to mitigation was supported by legally sufficient proof and not against the weight of the evidence (see Pagnella v Action For a Better Community, 57 AD2d 1076, 1077 [1977]; see also Assouline Ritz1 LLC v Edward I. Mills & Assoc., Architects, PC, 91 AD3d 473, 474-475 [2012]).

Plaintiff’s remaining contentions deserve little discussion. His culpable conduct in acquiring JMF’s vehicles and equipment but failing to act to satisfy the liens on them “occurred after the alleged malpractice” and, as such, the jury was properly asked to separately consider it “in mitigation of damages” rather than as an aspect of comparative negligence (Schultz v Excelsior Orthopaedics, LLP, 129 AD3d 1606, 1608 [2015]; see Dombrowski v Moore, 299 AD2d 949, 951 [2002]). The jury’s finding that plaintiff had failed to mitigate his damages to the tune of $90,000 may be easily inferred from the difference between the found value of JMF’s equipment and vehicles and the liens that would have been satisfied had plaintiff sold some or all of those assets at auction. Supreme Court was lastly correct to issue a judgment that subtracted $90,000 from the already apportioned damages instead of vice versa, as doing otherwise would have disregarded the distinction between awarding those damages that flow from a defendant’s negligent conduct and reducing set damages that would have been lower but for the subsequent unreasonable conduct of a plaintiff (compare CPLR 1411 with Novko v State of New York, 285 AD2d 696, 697 [2001]).”

One sentence in 3rd & 6th, LLC v Berg  2017 NY Slip Op 02768  Decided on April 12, 2017
Appellate Division, Second Department opinion says two things.  When does the statute of limitations commence?  When the negligent act takes place or when all the elements come together?

“An action to recover damages arising from legal malpractice must be commenced within three years, computed from the time the cause of action accrued to the time the claim is interposed (see CPLR 214[6]; McCoy v Feinman, 99 NY2d 295; Rakusin v Miano, 84 AD3d 1051; Tsafatinos v Lee David Auerbach, P.C., 80 AD3d 749). ” A legal malpractice claim accrues when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court. In most cases, this accrual time is measured from the day an actionable injury occurs, even if the aggrieved party is then ignorant of the wrong or injury. What is important is when the malpractice was committed, not when the client discovered it'” (Tantleff v Kestenbaum & Mark, 131 AD3d 955, 956, quoting McCoy v Feinman, 99 NY2d at 301). Continuous representation may toll the statute of limitations, but “only where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim” (McCoy v Feinman, 99 NY2d at 306; see Shumsky v Eisenstein, 96 NY2d 164; Tantleff v Kestenbaum & Mark, 131 AD3d at 956-957; Pittelli v Schulman, 128 AD2d 600, 601).

On a motion to dismiss a complaint as time-barred, a defendant must establish, prima facie, that the time in which to commence the action has expired. The burden then shifts to the plaintiff to raise a question of fact as to whether the statute of limitations is tolled or is otherwise inapplicable (see Bullfrog, LLC v Nolan, 102 AD3d 719; Rakusin v Miano, 84 AD3d 1051, 1052).

Here, the defendants established, prima facie, that the action was time-barred by demonstrating that the closing for the sale of the business took place in December 2009, while the action was commenced in March 2014 (see Bullfrog, LLC v Nolan, 102 AD3d at 720; Rakusin v Miano, 84 AD3d at 1052). In opposition, the plaintiff failed to raise a question of fact as to whether continuous representation tolled the statute of limitations (see McCoy v Feinman, 99 NY2d at 306; Bullfrog, LLC v Nolan, 102 AD3d at 720).

Overbilling by an attorney as the basis of a breach of fiduciary duty claim.  It’s a good idea.  The Breach claim will not be dismissed as duplicitive, a positive finding leads to significant damages.  All-in-all not too bad?

In Genesis Merchant Partners, LP v Gilbride, Tusa, Last & Spellane LLC 
2017 NY Slip Op 02753  Decided on April 11, 2017  Appellate Division, First Department it did not work out so well.

“Defendants’ alleged failure to disclose their legal malpractice does not give rise to a separate action for breach of fiduciary duty (Garnett v Fox, Horan & Camerini, LLP, 82 AD3d 435, 436 [1st Dept 2011]). Plaintiffs have not sufficiently alleged defendants’ overbilling to support a separate cause of action (cf. Cherry Hill Mkt. Corp. v Cozen O’Connor P.C., 118 AD3d 514, 514 [1st Dept 2014] [breach of fiduciary duty claim was not duplicative where, among other things, the plaintiffs alleged that the defendants had overbilled the plaintiffs]).