Attorneys have duties to clients, in the nature of a fiduciary duty. Professionals other than doctors have duties to their clients/customers in varying levels.  Pharmacists, who are professionals owe an independent duty to persons for whom they fill a prescription…don’t they?  Well…not really, even though the profession of pharmacology is traced back to ancient Egypt and Babylonia where “a class of prepares of medicines existed separate from those who prescribed and administered drugs.”

Abrams v Bute 2016 NY Slip Op 01627 [138 AD3d 179]  March 9, 2016  Miller, J.  Appellate Division, Second Department tells us that they have roughly the same level of obligation to a customer as an intern has to a patient.  If they follow the supervising doctors’ instructions, and those instructions are not wildly off the mark, they will not be liable.

“This appeal and cross appeal require consideration of the duty owed by a pharmacist in filling a prescription issued by a{**138 AD3d at 181} physician. In view of our limited precedent on this subject, we take this opportunity to clarify the nature of a pharmacist’s duty and the means by which the appropriate standard of care may be established in any particular case. We conclude that when a pharmacist has demonstrated that he or she did not undertake to exercise any independent professional judgment in filling and dispensing prescription medication, a pharmacist cannot be held liable for negligence in the absence of evidence that he or she failed to fill the prescription precisely as directed by the prescribing physician or that the prescription was so clearly contraindicated that ordinary prudence required the pharmacist to take additional measures before dispensing the medication. Applying this standard here, the defendants Jessica “Smith,” CVS Pharmacy, and CVS Albany, LLC, are entitled to summary judgment dismissing the complaint insofar as asserted against them.”

Weinstein v CohnReznick, LLP  2016 NY Slip Op 08068  Decided on November 30, 2016
Appellate Division, Second Department is an example of the Second Department Appellate Division dicing a Suffolk County dismissal into component parts. and keeping one claim alive.

Plaintiffs essentially sued the accountants for a group that took them over.  Was there sufficient privity?  No.  Were there sufficient fraud allegations?  No.  Was there something?  Yes.

“The Supreme Court properly granted that branch of Cohn’s motion which was to dismiss the cause of action alleging accounting malpractice. Accepting the factual allegations in the complaint as true, and according the plaintiffs the benefit of every favorable inference, the complaint [*2]failed to adequately allege the existence of actual privity of contract between the plaintiffs and Cohn, or a relationship so close as to approach that of privity, sufficient to impose a professional duty upon Cohn for the benefit of the plaintiffs (see Security Pac. Bus. Credit v Peat Marwick Main & Co., 79 NY2d 695, 702-703; Credit Alliance Corp. v Arthur Andersen & Co., 65 NY2d 536, 551; Signature Bank v Holtz Rubenstein Reminick, LLP, 109 AD3d 465, 466-467). Inasmuch as the complaint failed to adequately allege the existence of a duty owed by Cohn to the plaintiffs, it failed to state a cause of action alleging accounting malpractice.

The Supreme Court also properly granted those branches of Cohn’s motion which were to dismiss the causes of action alleging fraud, fraudulent concealment, and aiding and abetting fraud, as those causes of action failed to satisfy the particularity requirements of CPLR 3016 (see CPLR 3016[b]; Moore v Liberty Power Corp., LLC, 72 AD3d 660, 661). With respect to the causes of action alleging fraud and fraudulent concealment, the plaintiffs failed to make specific factual allegations that would establish that Cohn knowingly misrepresented a material fact for the purpose of inducing the plaintiffs’ reliance, actual justifiable reliance on the part of the plaintiffs, and damages (see Theaprin Pharms., Inc. v Conway, 137 AD3d 1254, 1255; Fulton v Hankin & Mazel, PLLC, 132 AD3d 806, 807; Bannister v Agard, 125 AD3d 797, 798; Schwatka v Super Millwork, Inc., 106 AD3d 897, 900; Brualdi v IBERIA, Lineas Aereas de España, S.A., 79 AD3d 959, 960-961). Similarly, with respect to the cause of action alleging aiding and abetting fraud, the complaint failed to adequately allege the existence of an underlying fraud, knowledge of that fraud by Cohn, and substantial assistance by Cohn in perpetrating that fraud (see Matter of Woodson, 136 AD3d 691, 693; Nabatkhorian v Nabatkhorian, 127 AD3d 1043, 1043-1044; Goel v Ramachandran, 111 AD3d 783, 792-793; High Tides, LLC v DeMichele, 88 AD3d 954, 960-961).

The plaintiffs’ cause of action alleging breach of fiduciary duty also failed to satisfy the particularity requirements of CPLR 3016 (see CPLR 3016[b]; Palmetto Partners, L.P. v AJW Qualified Partners, LLC, 83 AD3d 804, 808), as the plaintiffs failed to make specific factual allegations that would establish that Cohn had a fiduciary obligation running to the plaintiffs (see Tal v Superior Vending, LLC, 20 AD3d 520, 521; see also Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 561; Atkins Nutritionals v Ernst & Young, 301 AD2d 547, 548).

Nevertheless, the Supreme Court improperly granted that branch of Cohn’s motion which was to dismiss the cause of action alleging aiding and abetting breach of fiduciary duty. “A claim for aiding and abetting a breach of fiduciary duty requires: (1) a breach by a fiduciary of obligations to another, (2) that the defendant knowingly induced or participated in the breach, and (3) that [the] plaintiff suffered damage as a result of the breach” (Kaufman v Cohen, 307 AD2d 113, 125; see AHA Sales, Inc. v Creative Bath Prods., Inc., 58 AD3d 6, 23). Here, the complaint adequately alleged that the Levines breached their fiduciary obligations to the plaintiffs, that Cohn knowingly participated in that breach, and that the plaintiffs suffered damages as a result (see Wallkill Med. Dev., LLC v Catskill Orange Orthopaedics, P.C., 131 AD3d 601, 604; Aranki v Goldman & Assoc., LLP, 34 AD3d 510, 512; Operative Cake Corp. v Nassour, 21 AD3d 1020, 1021).”

When reading an Appellate Division decision, the tone and subject matter rapidly indicate that the case is a pro-se legal malpractice litigation, as the participants spend inordinate amounts of time debating useless issues.  As an example, Hyman v Pierce 2016 NY Slip Op 08272 Decided on December 8, 2016 Appellate Division, Third Department deals entirely with appellate practice over the completely inane matter of whether some discovery was provided in paper or electronic form.  Plaintiff spend endless hours making motions and perfecting an appeal, when the same result could have been had by printing out the email.

“On January 5, 2015, plaintiff moved for an extension of time to complete discovery and to compel defendants to respond to certain document demands. In support of this motion, plaintiff submitted copies of correspondence wherein she requested that defendants produce a “copy of the complete file with an itemized table of contents of any and all unprivileged correspondences related in any manner” to her dealings with defendants and provide dates for depositions. Indisputably, defendants did not produce the requested documents, asserting that plaintiff already possessed the requested materials, and no depositions were completed. By an order entered in March 2015, Supreme Court denied plaintiff’s motion to compel defendants to produce the requested documents, extended the existing schedule to allow the parties to complete depositions and directed plaintiff to file a note of issue within 90 days. Plaintiff filed a notice of appeal from this order and an April 2015 order denying her motion to reargue.

On July 31, 2015, Supreme Court (Cercio Jr., J.) issued an order directing defendants to provide an electronic copy of the requested discovery material. Plaintiff does not dispute that defendants have complied with that order but, instead, asserts that she was entitled to a paper copy of the documents. Since plaintiff has obtained copies of the documents that she requested, albeit in electronic format, we agree with defendants that plaintiff’s appeal from the March 2015 order must be dismissed as moot (see Matter of Jewett v Ames, 276 AD2d 892, 893 [2000]; Matter of Franklin [International Bus. Machs. Corp.], 215 AD2d 759, 759 [1995]; Middleton v State of New York, 49 AD2d 989, 989 [1975]).”

One way to look at how legal malpractice cases come out is by applying Occam’s razor.  Which result will more likely be final…now, not later?   Optical Communications Groups, Inc. v Rubin, Fiorella & Friedman, LLP  2016 NY Slip Op 08180  Decided on December 6, 2016  Appellate Division, First Department is a fine example.  The case came out badly for Plaintiff, a pre-requisite for the legal malpractice case.  Plaintiff says case came out badly because certain evidence was not obtained and certain evidence was not precluded.  Attorneys say the case came out just fine, and let’s just rely on  the 2d Circuit Court of Appeals decision.  Application of the hypothesis indicates that simply relying on the 2d Circuit is the simpler and more final method.  Voila!

“n this legal malpractice action, plaintiff Optical asserts that its former attorneys, Rubin, Fiorella and Friedman, mishandled the litigation of a maritime action in which it sought to recover damages caused when its submarine fiber optical cable was struck and destroyed by an anchor inadvertently released from a cargo vessel owned by Marbulk Canada, Inc. Rubin Fiorella, on behalf of Optical, brought a maritime action in federal court against the vessel and Marbulk. In the maritime action, Optical alleged that the vessel dropped its anchor in an area designated for laying cable, and that Marbulk was therefore liable. The parties agreed that Marbulk would be liable only if the vessel was located in the designated cable area when its anchor dropped.

Marbulk successfully moved for summary judgment dismissing the complaint in the maritime action. The district court found, inter alia, that sonar data evidence submitted by plaintiff Optical showed that the vessel was outside the boundaries of the designated cable area (Optical Communications Group, Inc. v M/V Ambassador, 938 F Supp 2d 449 [SD NY 2013] [Optical I], affd. 558 Fed Appx 94 [2d Cir 2014] [Optical II]). The conclusion was also supported by evidence submitted by Marbulk, specifically, a screen shot of Simplified Vessel Data Radar (SVDR) data that pinpointed the location of the vessel outside the boundaries of the cable area. As indicated, that decision was affirmed on appeal by the Second Circuit.

In the instant action, plaintiff alleges that, as noted by the Second Circuit in Optical II, Rubin Fiorella failed to preserve an objection to the SVDR data submitted by Marbulk in support of its motion, and also failed to renew a discovery motion that had been denied without prejudice to renewal. Optical alleges that but for these failures, it would have defeated the motion for summary judgment and ultimately prevailed in the maritime action.

The motion court properly found that the Second Circuit’s order in Optical II, affirming [*2]Optical I, is documentary evidence within the meaning of CPLR 3211(a)(1), and that its holding flatly contradicts the legal conclusions and factual allegations in the complaint (see Amsterdam Hospitality Group, LLC v Marshall-Alan Assoc., Inc., 120 AD3d 431, 432 [1st Dept 2014]; Morgenthow & Latham v Bank of N.Y. Co., 305 AD2d 74, 78 [1st Dept 2003], lv denied 100 NY2d 512 [2003]).

Even assuming that Rubin Fiorella had successfully challenged the admissibility and authenticity of the SVDR data proffered by Marbulk, the district court found that plaintiff Optical’s own sonar data evidence, submitted through its expert, indicated that the vessel was outside the cable field when it released its anchor. Thus, plaintiff’s evidence submitted in the maritime action refutes its allegations in this action that, but for Rubin Fiorella’s negligence, it would have prevailed in the maritime action (see e.g. Brooks v Lewin, 21 AD3d 731, 734 [1st Dept 2005], lv denied 6 NY3d 713 [2006]).

The district court’s decision also refutes Optical’s allegation that, but for Rubin Fiorella’s failure to conduct further discovery, it would have prevailed in the maritime action, since that court found that the record with respect to the location of the vessel was “immutable and complete” so that “further discovery will not recreate the events underlying the anchor drop or enhance the existent evidence in any meaningful way” (Optical I, 938 F Supp 2d at 464; see Biondi v Beekman Hill House Apt. Corp., 257 AD2d 76, 81 [1st Dept 1999], affd 94 NY2d 659 [2000]).”

The privity rule in legal malpractice is both a policy and a substantive nightmare for peripheral clients.  These include the beneficiary, the individual in a corporate setting and others.  The exception permits a law suit when there is fraud, collusion, malice or special circumstances.  The exception is rarely invoked, and the “special circumstances” portion even more rarely.  Thus, Deep Woods Holdings LLC v Pryor Cashman LLP,  2016 NY Slip Op 08156 .  Decided on December 6, 2016   Appellate Division, First Department is very unusual.

“Defendant Pryor Cashman LLP represented nonparty David Lichtenstein in a transaction in which Lichtenstein was to purchase $10 million worth of stock in nonparty Park Avenue Bank. Before the transaction could close, nonparty Savings Deposit Insurance Fund of the Republic of Turkey (SDIF) sued the holder of 99% of the bank’s shares and obtained a restraining order preventing any transfer of the shares (Deep Woods Holdings, L.L.C. v Savings Deposit Ins. Fund of the Republic of Turkey, 745 F3d 619, 621 [2d Cir 2014], cert denied __ US __, 135 S Ct 964 [2015]).

On June 22, 2004, Lichtenstein and SDIF entered into a stipulation, pursuant to which Lichtenstein had the right to exercise a call option to buy shares of stock in the bank for a specified sum, provided Lichtenstein exercised his right within 45 days after SDIF was able to deliver the shares. SDIF was able to deliver the shares on July 12, 2005, but Pryor Cashman did not exercise Lichtenstein’s call option until November 2, 2005 (Deep Woods, 745 F3d at 623), and SDIF then refused to honor it.

Thereafter, Pryor Cashman recommended to Lichtenstein that he, together with nonparties Donald Glascoff, chairman of the bank, and Charles Antonucci, form plaintiff Deep Woods Holdings LLC, and that Lichtenstein assign the call option to Deep Woods, which would then sue SDIF to exercise the call option. In or about 2007, Pryor Cashman organized Deep Woods, drafted the assignment, and insisted on acting as counsel for Deep Woods in the litigation against SDIF. The assignment read in its entirety: “In consideration of the issuance to David Lichtenstein (“Assignor”) of a 75% interest in Deep Woods Holdings LLC, a Delaware limited liability company (“Deep Woods”), as described in the Deep Woods Operating Agreement dated February 6, 2007, the Assignor hereby assigns, transfers and delivers to Deep Woods his entire right, title and interest in and to the option contained in Paragraph 8 of that certain Stipulation dated June 22, 2004 between the Assignor and [SDIF].” Pryor Cashman did [*2]not draft the assignment so as to specifically assign any tort claims Lichtenstein might have in connection with the exercise of the call option to Deep Woods.

According to Mr. Glascoff, when Pryor Cashman formed Deep Woods and prepared the assignment, it acted on behalf of Lichtenstein, the other members of Deep Woods, and Deep Woods itself. Mr. Glascoff further alleges that, during this process, Pryor Cashman was silent on the issue of whether the assignment transferred tort claims, but that it was Mr. Glasscoff’s understanding that it did, and, if he had understood that it did not, he would have insisted on adding any necessary language so that it did.

At the trial level, Deep Woods won $25.3 million in damages. However, the Second Circuit reversed, finding that the call option had not been not exercised in a timely manner (Deep Woods, 745 F3d at 620).”

“However, accepting plaintiff’s affidavit in opposition to defendants’ motion as true, we find that plaintiff sufficiently pleaded that defendants should be equitably estopped from arguing that the assignment did not assign tort claims. Contrary to defendants’ contention, estoppel can be based on silence as well as conduct (see e.g. Rothschild v Title Guar. & Trust Co., 204 NY 458, 462 [1912]). Under these circumstances, where defendants drafted the assignment at a time when it represented both Lichtenstein and plaintiff, and that interpreting the assignment to exclude tort claims would mean that neither the assignor nor plaintiff, the assignee, would be able to sue defendants for malpractice for failing to exercise the call option in a timely manner, we find that the “special circumstances” exception to the privity requirement applies (see [*3]generally Estate of Schneider v Finmann, 15 NY3d 306, 308-309 [2010]; Good Old Days Tavern v Zwirn, 259 AD2d 300 [1st Dept 1999]). To do otherwise might insulate defendants from liability for their alleged wrongdoing.”

Real Estate in New York is always a hot topic.  Prices for apartments can reach $3000 per square foot in certain circumstances, and the value of landmarked real property cannot be overstated.  What happens when a building project goes badly wrong?  Litigation.

143 Bergen St., LLC v Ruderman  2016 NY Slip Op 07936  Decided on November 23, 2016
Appellate Division, Second Department is the story of an architect and his draftsman inexplicably losing focus.

“The plaintiffs, who are owners of a landmark building as defined by Administrative Code of the City of New York § 25-302, entered into an oral agreement with the defendant Herbert Ruderman. Pursuant thereto, Ruderman agreed to provide architectural services for construction on the plaintiffs’ building, including obtaining required approvals from the New York City Landmarks Preservation Commission (hereinafter LPC) and Department of Buildings (hereinafter DOB). Ruderman subsequently retained the services of the defendant George Restivo to complete the architectural drawings.

Ruderman and Restivo obtained approval from the LPC and the DOB for the initial construction. They subsequently submitted amended plans to the DOB to comply with various changes that the plaintiffs requested. However, they failed to submit the amended plans to the LPC or obtain approval from the LPC for the changes. When the construction was near completion, the LPC determined that the construction did not comply with the plans that it had approved. Ultimately, the LPC directed the plaintiffs to demolish aspects of the construction.

The plaintiffs commenced this action, inter alia, to recover damages for breach of contract against Ruderman and professional malpractice against both defendants. Ruderman asserted a counterclaim alleging that the plaintiffs had not paid the full contract price.

The Supreme Court granted the plaintiffs’ renewed motion for summary judgment on the first and second causes of action, which alleged breach of contract and professional malpractice, respectively, and dismissing Ruderman’s counterclaim.

Contrary to the defendants’ contentions, the Supreme Court properly granted that [*2]branch of the plaintiffs’ renewed motion which was for summary judgment on the first cause of action (see generally Alvarez v Prospect Hosp., 68 NY2d 320, 324). In the first cause of action, the plaintiffs sought to recover damages for breach of contract against Ruderman. The essential elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff’s performance pursuant to the contract, the defendant’s breach of its contractual obligations, and damages resulting from the breach (see Tudor Ins. Co. v Unithree Inv. Corp., 137 AD3d 1259, 1260; Legum v Russo, 133 AD3d 638, 639). Here, the plaintiff made a prima facie showing that Ruderman entered into an oral contract with the plaintiffs and pursuant thereto, the plaintiffs paid Ruderman certain monies. The plaintiffs also established, prima facie, that Ruderman breached this contract by failing to obtain the required approval from the LPC, which caused them damages. In opposition, the defendants failed to raise a triable issue of fact.”

He was my lawyer, why can’t I sue him?  Privity, or the direct contractual relationship between attorney and client is the bedrock of the legal malpractice system.  For policy reasons, (we think) this requirement is almost never excused.  The policy is most likely that of avoiding a legal malpractice case after each and every litigation.  If the opposing attorney could be sued easily, it is probable that every case would be followed by a legal malpractice case.

So, in Lewit v Fleishman  2016 NY Slip Op 32335(U)  November 28, 2016 Supreme Court, New York County  Docket Number: 152455/16  Judge: Barbara Jaffe we see how one participant in an estate proceeding that went sour lack the capacity to sue.

“This action arises from a Surrogate Court proceeding involving the probate of the estate and assets of plaintiffs mother and father. In March 2006, plaintiffs father, Robert Lewit, hired attorney Frank Julie to handle his estate and tax issues. After Robert died in 2007, plaintiff was appointed executor of his estate. Plaintiff commenced a proceeding in Queens County Surrogate’s Court, seeking to transfer all of the estate’s non-exempt assets to Robert’s surviving spouse, Mildred Lewit. In March 2007, soon after the decree issued authorizing the transfer to Mildred, she died intestate. Julie was retained to handle the probate of Mildred’s estate.

In November 2009, plaintiff and his siblings were appointed co-administrators of Mildred’s estate. In December 2009, plaintiff filed federal estate tax returns prepared by Julie, which plaintiff alleges, was untimely, thereby resulting in penalties and interest of approximately $170,000. Plaintiff also alleges that Julie failed to disclose that in 2008, the IRS denied his request for an extension of time to file (Id.).

In the fall of 2010, Julie began work on an estate accounting for Mildred’s estate. The accounting and stipulation settling the estate and distributing the assets were completed in early 2011. Plaintiffs siblings refused to agree to the stipulation and accounting, stopped communicating with him, retained counsel, and demanded copies of all relevant financial information. By then Julie had become unresponsive. (Id.).

On or about November 21, 2011, plaintiff, as executor of his father’s estate, hired defendant to perform legal services on behalf of his father’s and mother’s estates; plaintiff signed solely in his capacity as the executor of his father’s estate. (NYSCEF 6). Although plaintiff wanted to commence a malpractice action against Julie, he was unable to do so as the co-administrators of the Mildred’s estate refused to agree. Plaintiff asserts that he asked defendant to prepare a petition to either have the co-administrators removed or obtain permission from the Surrogate to proceed against Julie without the co-administrators’ participation, and that defendant agreed to prepare a removal petition. (NYSCEF 2).

Defendant never filed a petition for removal nor commenced a malpractice action against Julie. After defendant allegedly committed other acts constituting negligence, malpractice, and breach of contract, plaintiff terminated his services in May 2013.”

“An estate has standing to sue for malpractice an attorney hired to represent it. (Estate of Schneider v Finmann, 15 NY3d 306 [2010]; see also Russo v Rozenholc, 130 AD3d 492 [!51 Dept 2015] [estate had standing to sue law firm for malpractice as estate authorized firm to represent its interests under retainer agreement]). However, there is no authority permitting an executor or administrator of an estate to sue in his or her individual capacity where the alleged malpractice harmed the estate or where the attorney was retained by the estate. (See Estate of Schneider, 15 NY3d 306, 308-310 [while personal representative of estate may commence malpractice claim against attorney who allegedly caused harm to estate, he does so as representative of estate and not individually; “strict privity remains a bar against beneficiaries’ and other third-party individuals’ estate planning malpractice claims absent fraud or other circumstances.”]; 21A Carmody-Wait 2d § 129:87 [2016] [personal representative of estate has standing to sue, on behalf of estate, attorney for malpractice]). As the alleged malpractice was committed against the estate and not plaintiff in his individual capacity, and as the malpractice claim thus belonged to the estate and not plaintiff as an individual, he has no right or claim to damages resulting from the malpractice, and thus may not sue defendant here on his own behalf. (Compare Brown-Jodoin v Pirrotti, 138 AD3d 661 [2d Dept 2016] [plaintiff had standing to sue law firm for malpractice based on its alleged failure to properly probate her father’s will and finalize estate; evidence reflected that plaintiff as individual signed retainer agreement and paid retainer individually and that attorney had not billed her in her representative capacity, and plaintiff alleged that she had been personally harmed by defendants’ malpractice]; Newbach v Giaimo & Vreeburg, 209 AD2d 222 [!51 Dept 1994] [plaintiffs had viable claim for legal malpractice in capacity as representatives of decedent’s estate]). ”