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]).

In legal malpractice, the statute of limitations commences with the negligent act, which may be tolled for continuous representation.  With architects it is different, as shown in New York City School Constr. Auth. v Ennead Architects LLP  2017 NY Slip Op 02387  Decided on March 28, 2017  Appellate Division, First Department.

“On this CPLR 3211(a)(5) motion, defendant did not meet its initial burden of “establishing, prima facie, that the time in which to sue has expired” (Benn v Benn, 82 AD3d 548, 548 [1st Dept 2011]). A cause of action to recover damages against an architect for professional malpractice is governed by a three-year statute of limitations, which accrues upon “termination of the professional relationship” — that is, when it “completes its performance of significant (i.e., non-ministerial) duties under the parties’ contract” (Sendar Dev. Co., LLC v CMA Design Studio P.C., 68 AD3d 500, 503 [1st Dept 2009]). As this action was brought on February 27, 2015, plaintiff’s claims were timely so long as they accrued on or after February 27, 2012.

Here, defendant continued to carry out its contractual duties well after February of 2012 by, for example, assisting plaintiff with obtaining a final certificate of occupancy (see e.g. Seradilla v Lords Corp., 50 AD3d 345, 346 [1st Dept 2008]). Defendant was contractually obligated to review “as built” drawings under the relevant agreement, which it continued to do after February of 2012 (Parsons, Brickerhoff, Quade & Douglas, Inc. v EnergyPro Constr. Partners, 271 AD2d 233, 234 [1st Dept 2000]). The provisions of the parties’ contract that the IAS court relied upon in determining that the parties’ relationship ended in 2009 when the work was “substantially completed” were at best ambiguous, and certainly not sufficient to satisfy defendant’s threshold burden of establishing untimeliness (Benn, 82 AD3d at 548; Rosalie Estates v Colonia Ins. Co., 227 AD2d 335, 336 [1st Dept 1996]).

As an alternative holding, we conclude that the continuous representation doctrine toll applies, at least with respect to defendant’s attempts after February 2012 to remedy the faulty design of the custom etched-glass windows (City of New York v Castro-Blanco, Piscioneri & Assoc., 222 AD2d 226, 227-228 [1st Dept 1995]). Defendant does not dispute that it performed these services within three years of the action being commenced.”

Continuous representation tolls the running of the statute of limitations, and requires the dual mutual understanding that more work is required to be undertaken after the act of malpractice, and that there continues to be a relationship of trust and confidence between attorney and client.

Everyone agrees on those two principles, but the application can be strict or lenient.  Here is a lenient application in Stein Indus., Inc. v Certilman Balin Adler & Hyman, LLP 
2017 NY Slip Op 02688 Decided on April 5, 2017 Appellate Division, Second Department.

“In March 2010, the plaintiff Andrew Stein retained the defendant law firm to represent him in connection with the purchase of his brother’s interest in several companies, including the plaintiff Stein Industries, Inc. (hereinafter Stein Industries). The closing of the transaction occurred in April 2010. On March 27, 2015, the plaintiffs commenced this action against the defendant, inter alia, to recover damages for legal malpractice, alleging that the employees of Stein Industries were members of a union and that the defendant failed to discover that, upon the sale of the business, an “Unfunded Vested Pension Liability” became due and owing to the union, which caused the plaintiffs to be damaged in the sum of $500,000. In the order appealed from, the Supreme Court, inter alia, granted that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(5) to dismiss, as time-barred, the first cause of action, which was to recover damages for professional negligence, and the second cause of action, which was to recover damages for legal malpractice.”

“Here, the defendant satisfied its initial burden by demonstrating, prima facie, that the alleged legal malpractice occurred more than three years before this action was commenced in March 2015 (see Kennedy v H. Bruce Fischer, Esq., P.C., 78 AD3d 1016, 1017). In opposition, however, the plaintiffs raised a question of fact as to whether the applicable statute of limitations was tolled by the continuous representation doctrine. The plaintiffs submitted Andrew Stein’s affidavit, in which he averred that he met with members of the defendant on July 26, 2012, to determine how to rectify the pension liability issue. Andrew indicated that he was not satisfied with their recommendations concerning how to rectify the issue and directed them to formulate another idea. Andrew’s affidavit was sufficient to raise a question of fact as to whether the defendant engaged in a course of continuous representation intended to rectify or mitigate the initial act of alleged malpractice (see Melnick v Farrell, 128 AD3d 1371, 1372; DeStaso v Condon Resnick, LLP, 90 AD3d 809, 812-813; Gravel v Cicola, 297 AD2d 620, 621).

Accordingly, the Supreme Court should have denied that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(5) to dismiss the first and second causes of action.”