Sadly, mistakes in a legal malpractice case seem to appear larger than in other areas of litigation.  “The cobbler’s child is shoeless” is an older variant of the same issue.  In Brown v Sanders
2016 NY Slip Op 05967 Decided on September 14, 2016 Appellate Division, Second Department we see a legal malpractice that was not served on the defendants.  No service…no case.

“In an action, inter alia, to recover damages for conversion and legal malpractice, the plaintiff appeals, as limited by her brief, from so much of an order of the Supreme Court, Kings County (Velasquez, J.), dated March 28, 2014, as granted that branch of the motion of the defendants Brauner Baron Rosenweig and Klein and David Brauner which was pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against them for lack of personal jurisdiction and denied her cross motion pursuant to CPLR 306-b to extend the time to serve the summons and complaint on those defendants.

ORDERED that the order is affirmed insofar as appealed from, with costs.

Contrary to the plaintiff’s contention, the Supreme Court did not acquire personal jurisdiction over the defendants Brauner Baron Rosenweig and Klein and David Brauner (hereinafter together the Brauner defendants) when they first appeared by pre-answer motion in this action approximately one year after the action was commenced, since an objection to personal jurisdiction pursuant to CPLR 3211(a)(8) was asserted in their motion (see CPLR 320[b]; 3211[e]; Skyline Agency v Coppotelli, Inc., 117 AD2d 135, 140; cf. Countrywide Home Loans Servicing, LP v Albert, 78 AD3d 983, 984). Furthermore, the court properly granted that branch of the Brauner defendants’ motion which was pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against them for lack of personal jurisdiction, since it is undisputed that service upon the Brauner defendants was not made within 120 days after the filing of the summons and complaint (see CPLR 306-b).”

What happens when professionals take on a job, issue reports telling the client that all is well, only to have a governmental authority say that all is not well, and that the statutory reports understate a liability by $37 Million?

Leading Ins. Group Ins. Co., Ltd. v Friedman LLP 2016 NY Slip Op 30375(U) March 3, 2016
Supreme Court, New York County Docket Number: 651049/15 Judge: Saliann Scarpulla is one example.

“”LIGUSB is the U.S. Branch of a foreign insurance company and LIS is the United States Manager of LIGUSB pursuant to applicable New York law.” Licensed as an insurance company in New York, LIGUSB is monitored by the New York Department of Financial Services (“NYDFS”) and must submit annual financial statements (“Statutory Financial Statements”) that conform with New York’s Statutory Accounting Practices (“SAP”). The Statutory Financial Statements are required to be audited by an independent certified public accountant according to Generally Accepted Auditing Standards (“GAAS”) and SAP. The Statutory Financial Statements must be accompanied by the accountant’s opinion letter, “certifying, among other things, that the Statutory Financial Statements are fairly stated in all material respects in accordance with SAP.” The Statutory Financial Statements include a statement of the insurance company’s Joss reserves, which “include the estimated liability for investigating and settling unpaid insurance claims or losses, both known … and unknown.” LIG used an internal actuary to establish the loss reserves for LIGUSB ‘s 2012 Statutory Financial Statements. Pursuant to an engagement Jetter (“Engagement Letter”), dated October 24, 2012, Friedman agreed to perform an independent audit of LIGUSB ‘s Statutory Financial Statements for the year ending in December 21, 2012. In pertinent part, the Engagement Letter stated that: Friedman would “plan and perform the audit to obtain reasonable assurance about whether financial statements are free from material misstatement;” “[t]he objective of [the] audit is the expression of an opinion about whether [LIG’s] financial statements are fairly presented, in all material respects, in conformity with accounting practices prescribed or permitted by the [NYDFS];” and the “audit [would] be conducted in accordance with auditing standards generally accepted in the United States of America.” The Engagement Letter also contained the following qualifications, that: LIG “[was] responsible for establishing and maintaining internal controls, including monitoring ongoing activities;” “[b]ecause of the inherent limitations of an audit, combined with the inherent limitations of internal control, and because [Friedman would] not perform a detailed examination of all transactions, there [was] a risk that material misstatements may exist and not be detected by [Friedman], even though the audit is properly planned and performed in accordance with U.S. generally accepted auditing standards;” and the “audit is not designed to provide assurance on internal control or to identify deficiencies in internal control.” ”

“On or about May 3 I, 2013, Friedman delivered the final, audited Statutory Financial Statements and Schedules, provided an independent auditors’ report regarding these documents, and submitted its “Accountant’s Qualification an Internal Control letter to LIGUSB’s Board of Directors and Stockholders.” LIG alleges that it relied on Friedman’s representations to satisfy it “that (i) LIG’s internal controls and accounting policies, including its procedures and methods for establishing Joss reserves, were reasonable and appropriate and (ii) LIGUSB’s statutory financial statements were free of material misstatement and fairly presented LIGUSB ‘s statutory financial condition.” Subsequent to the 2012 audit, LIG avers that it used “Friedman to perform various other accounting, consulting, advisory and tax-related services, for which LIG paid Friedman substantial fees.” “On or around September 13, 2013, LIG again engaged Friedman to perform the independent audit of LIGUSB’s financial statements for the year end[ing] December 31, 2013.” In approximately October 2013, “NYDFS advised LIG that red flags existed in LIG’s loss reserve estimates in its recent financial statements and required that LIG engage an independent external actuary to conduct a peer review of LI G’s internal actuary’s findings at LIG’s own expense.” LIG complied and, in approximately February 2014, “LIG discovered that its carried loss reserves were inadequate, contrary to what Friedman had concluded and reported in connection with its audit.” According to LIG, because its prior loss reserves were considerably understated, it had “to take immediate action to increase its reserves by approximately $37,000,000” and to “take aggressive and immediate measures to increase and improve its related internal controls and procedures.”  ”

“LIG alleges that “[i]n or around April of 2014, LIG discontinued its use of Friedman’s services.” On approximately June 3, 2014, “Friedman announced to the NYDFS that it was withdrawing its 2012 audit opinion of LIGUSB.” LIG alleges that the withdrawal of Friedman’s opinion “was inconsistent with SAP and insurance industry standards concerning the correction of errors in financial statements previously filed with regulating authorities,” and that “Friedman also knew, or should have known, that its action to recall its audit opinion would be damaging to LIG.” ”

“Here, Friedman contends that the complaint fails to specify how Friedman allegedly deviated from acceptable standards of practice. In particular, it points to the allegation that a subsequent, independent actuary identified certain “red flags” that Friedman “inexplicably failed to identify,” without identifying those red flags or describing what Friedman should have done differently. However, the complaint contains numerous allegation detailing the ways in which LIG believes Friedman deviated from professional standards of care, including that it failed to comply with GAAS and SAP by, among other things, failing to implement appropriate and adequate audit procedure to verify the accuracy of the Statutory Financial Statements. See complaint, ilil 6, 37-41, 57, 59-63, 98-101. Moreover, this is a pre-answer motion to dismiss. Therefore, LIG need not “pro[ ve] that there was a departure from accepted standards of practice,” but rather, it need only make the necessary allegations. See D.D. Hamilton Textiles, 269 AD2d at 214- 215 (finding, in the context of a motion for summary judgment, that plaintiffs failed to prove defendant accountant’s work fell below applicable standards of care); see also EEC I, Inc., 5 NY3d at 19. Ultimately, LIG alleges that Friedman failed to identify deficiencies with LI G’s loss reserves; whether this failure “was [due to] a departure from professional accounting standards … is a question that requires expert evidence for its resolution.” Berg v Eisner LLP, 94 AD3d 496, 496 (1st Dept 2012) (reversing dismissal). “

Plattsburgh Hous. Auth. v Cantwell  2015 NY Slip Op 51832(U) [49 Misc 3d 1221(A)] Decided on September 23, 2015 Supreme Court, Clinton County  Muller, J. is the story of an upstate  city which had a housing authority.  Once upon a time it hired an attorney to be its outside counsel.  Then she was hired as a general counsel.  Her pay ramped up.  Then the Executive director retired and the general counsel asked to be considered.  At the end of this progression, the general counsel had been appointed both GC and Executive Director, and the pay had now gone through the roof.  Was this a breach of fiduciary duty?

“Following this meeting, defendant drafted a “Plattsburgh Housing Authority Executive Director Employment Agreement” (hereinafter the Employment Agreement) and gave it to Morris for his review. Morris then raised certain concerns including, inter alia, that the termination provision in the Employment Agreement did not give plaintiff “the option to renew or not renew [the] contract” at the conclusion of every term. According to Morris, “[defendant] advised [him] that she included a provision that either party could terminate the [Employment Agreement] upon [60]-days notice,” which alleviated his concern. The Employment Agreement was then executed on October 1, 2011, with both Morris and Lucia signing on plaintiff’s behalf.

Defendant began working as Executive Director on that same date, shadowing Lucia until her retirement on December 31, 201l. During this transition period, defendant continued to serve as General Counsel with the Board’s knowledge and consent. With that said, the Board apparently believed that defendant would no longer hold the position of General Counsel once she became the sole Executive Director on January 1, 2012. She continued to do so, however, and from October 1, 2011 to September 2012 she was paid a salary of $84,831.00 per year as Executive Director and $42,342.00 per year as General Counsel, for a total annual salary of $127,173.00.

At some point prior to September 2012, defendant reviewed plaintiff’s Basic Salary Schedule and advised Jean Etesse, plaintiff’s in-house accountant, that her rate of pay should be higher as a result of her 14 years of service with the organization. In this regard, the Employment Agreement provided that, as “compensation for services rendered by Employee as Executive Director . . . , the Authority agrees to pay the Employee a starting salary of $85,000.00 to be placed on the on the [sic] Plattsburgh Housing Authority Basic Salary Schedule, . . . .” Several paragraphs later, the Employment Agreement then states that, “[f]or purposes of benefits calculations the Employee shall be considered to have 14 years of service with the Employer as of 12/30/11 . . . .” According to plaintiff, defendant interpreted this provision as applying to her compensation and advised Etesse that her starting salary should have been more than $85,000.00. [*3]Morris then authorized this increase in salary — allegedly feeling “bound by the terms of the [Employment] Agreement” — and defendant’s salary as Executive Director was increased to $108,807.00 per year and her salary as General Counsel was increased to $50,332.00 per year, for a total annual salary of $159,139.00. Defendant further directed Etesse to make the salary increase retroactive to her October 1, 2011 start date and, as a result, was paid a lump sum of $32,454.01.”

“With respect to the first cause of action alleging a breach of fiduciary duty, “the attorney-client relationship imposes on the attorney [t]he duty to deal fairly, honestly and with undivided loyalty . . . including maintaining confidentiality, avoiding conflicts of interest, operating competently, safeguarding client property and honoring the clients’ interests over the lawyer’s'” (Country Club Partners, LLC v Goldman, 79 AD3d 1389, 1391 [2010], quoting Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 9 [2008] [internal quotation marks and citations omitted]; see Krouner v Koplovitz, 175 AD2d 531, 532 [1991]). “To recover on its claim, plaintiff is required to prove both the breach of a duty owed to it and damages sustained as a result'” (Country Club Partners, LLC v Goldman, 79 AD3d at 1391, quoting Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d at 10 [citation omitted]). “That is, a client must establish actual and ascertainable damages that would not have occurred but for the attorney’s conduct” (Country Club Partners, LLC v Goldman, 79 AD3d at 1391 [citations and internal quotation marks omitted]).

Here, the Court finds that plaintiff has established its prima facie entitlement to judgment as a matter of law relative to its first cause of action. Defendant was undisputably employed as General Counsel to plaintiff at all relevant times and, in her capacity as General Counsel, had a duty to deal with plaintiff fairly, honestly and with undivided loyalty. Morris states under oath that defendant drafted the Employment Agreement and presented it to him for review without recommending that plaintiff retain independent counsel to review it prior to signature. Morris [*5]further states under oath that defendant later interpreted the Employment Agreement as providing for an increase in her salary, again without recommending that the issue be reviewed by independent counsel. There was a blatant conflict of interest in both instances that defendant either failed to recognize or simply ignored. Plaintiff has further demonstrated actual and ascertainable damages.

In opposition, defendant contends that she was not acting as General Counsel to plaintiff when she drafted the Employment Agreement. Rather, she was negotiating the terms of her employment as Executive Director and acting solely on her own behalf. According to defendant, plaintiff was well aware of this fact. Interestingly, Lucia has submitted an affidavit in support of this contention, stating as follows:

“At no time did Mr. Morris ever state to me that he believed that when Lori was negotiating her contract that she was acting on behalf of the Plattsburgh Housing Authority or providing housing authority legal advice as its counsel in negotiating and preparing the contract. I signed the contract at the instruction of Mr. Morris and I understood and believed it was clear that Lori was acting for herself on one side of the negotiating table and Mr. Morris was representing the housing authority on the other side of the negotiating table.”

Lucia further states that Morris was aware that defendant would be acting as both the Executive Director and General Counsel following January 1, 2012, and in fact directed her to contact “the executive director of another housing agency, [who] was also an attorney . . . to discuss the role of Executive Director/attorney.” She did so and then reported back to Morris, informing him that “it was [her] understanding that HUD did not approve of a housing authority having an employee hold two full-time positions.”

Defendant next contends that her increase in salary did not require contract interpretation but, rather, resulted from application of plaintiff’s normal policies and procedures. In this regard, Lucia states as follows:

“An issue has been raised about Lori Cantwell’s salary as Executive Director. As long as I had been with the Plattsburgh Housing Authority, it was always the policy and practice of the organization that management personnel would receive longevity pay according to the longevity schedule maintained by the organization. . . .

“It was also the policy and practice of the Plattsburgh Housing Authority that when a person moved from one management position to another, their longevity time would follow to the new position. . . . This practice was followed for all employees moving from one management position to another.

“Lori Cantwell was in the management pay category in her position as Attorney to the Plattsburgh Housing Authority. Thus, when she was named as the Executive Director of the Authority, she was credited the longevity she had earned in her capacity of Attorney as was established practice.”

Thus, according to Lucia, defendant was appropriately given credit for 14 years of service [*6]— dating back to 1997 when she was retained as counsel — and her salary was appropriately increased based upon plaintiff’s longevity schedule.

Under the circumstances, the Court finds that defendant has raised an issue of fact as to whether she breached her fiduciary duty to plaintiff. If in fact defendant was not acting in her capacity as General Counsel when she drafted the Employment Agreement and plaintiff was aware of this, then she may not have violated her fiduciary duty to plaintiff (see Kallman v Krupnick, 67 AD3d 1093, 1095 [2009], lv denied 14 NY3d 703 [2010]; Beltrone v General Schuyler & Co., 252 AD2d 640, 641 [1998]; see Greene v Greene, 56 NY2d at 92—93, 451 N.Y.S.2d 46, 436 N.E.2d 496). To the extent that Morris reached out to the Executive Director of another housing agency who was also an attorney, there appears to be some question in this regard. Similarly, if defendant’s increase in salary resulted not from an interpretation of her Employment Agreement but rather from application of plaintiff’s normal policies and procedures, then again — she may not have violated her fiduciary duty. Given the standard applicable to motions for summary judgment — issue finding and not issue determination — the Court declines to grant plaintiff summary judgment as a matter of law relative to its first cause of action.^[FN2]“

A big construction of a supermarket is marred when the floor settles in an unsettling manner.  The architect is sued, and motion practice ensues.  It appears that there is a limitation of liability agreement which would severely undermine the case against the architect…or is there?  This case highlights the necessity of using more words, rather than fewer words in contracts.  It’s all about Schedule A.

Maines Paper & Food Serv., Inc. v Keystone Assoc., Architects, Engrs., & Surveyors, LLC   2015 NY Slip Op 09346 [134 AD3d 1340]  December 17, 2015  Appellate Division, Third Department  reaches the conclusion that more is needed to dismiss the case.

“In 2009, plaintiff retained defendant to perform architectural consulting services related to the construction of a new supermarket. Following the completion of construction, plaintiff’s employees discovered that the supermarket floor had begun to settle in an irregular manner. Thereafter, plaintiff commenced this action sounding in breach of contract and professional malpractice, alleging that the floor defect stemmed from construction methods that were inappropriate for the conditions at the site. Following joinder of issue, defendant moved for partial summary judgment on the issue of damages, arguing that, in the event that it was found liable, the prospective damages should be capped by application of a limitation of liability clause. This clause was contained within a schedule purportedly attached or incorporated into the parties’ contract (hereinafter Schedule A). Supreme Court denied defendant’s motion, finding that triable issues of fact existed as to whether Schedule A—and the limitation of liability clause contained therein—was included in the parties’ contract. Defendant appeals.

Defendant submits that Supreme Court erred in that the evidence established as a matter of law that plaintiff received Schedule A, or, in the alternative, that Schedule A was incorporated [*2]into the contract by reference. The proponent of a motion for summary judgment bears the initial burden of showing the absence of material issues of fact; once made, the burden shifts to the opposing party “to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact” (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; see Phoenix Signal & Elec. Corp. v New York State Thruway Auth., 90 AD3d 1394, 1396 [2011]). In support of its motion, defendant submitted the parties’ contract with an attached Schedule A containing a limitation of liability clause. The contract states that “[t]his Proposal, along with the attached Standard Terms and Conditions, Schedule A, Schedule B, and the Billing Rate Schedule represents the entire understanding between the Client and Architect.” Defendant also submitted an affidavit from its managing member in which he asserts that Schedule A “[was] attached to, and a part of, [defendant’s] agreement with [plaintiff].” He further stated that it is defendant’s normal business practice for it to send an accompanying copy of Schedule A to all prospective clients whenever a proposed contract is sent. These submissions met defendant’s prima facie burden, and thus required plaintiff to demonstrate triable issues of fact.”

“The doctrine of incorporation by reference “is grounded on the premise that the material to be incorporated is so well known to the contracting parties that a mere reference to it is sufficient” (Chiacchia v National Westminster Bank, 124 AD2d 626, 628 [1986]). The document is required to also be described in the contract such that it is identifiable “ ’beyond all reasonable doubt’ ” (Kenner v Avis Rent A Car Sys., 254 AD2d 704, 704 [1998], quoting Matter of Board of Commrs. of Washington Park of City of Albany, 52 NY 131, 134 [1873]; accord Unclaimed Prop. Recovery Serv., Inc. v UBS PaineWebber Inc., 58 AD3d 526, 526 [2009]). Here, defendant failed to submit any evidence to show that the Schedule A referenced in the contract was understood by the parties to be coextensive with the Schedule A attached to the prior unexecuted contracts. Instead, as set forth above, the evidence submitted undermines this assertion. Thus, viewing the evidence in the light most favorable to plaintiff (see e.g. William J. Jenack Estate Appraisers & Auctioneers, Inc. v Rabizadeh, 22 NY3d 470, 475 [2013]), we find that defendant failed to conclusively establish as a matter of law that Schedule A was sufficiently identified in the executed contract so as to be incorporated by reference (see County of Orange v Carrier Corp., 57 AD3d 601, 602 [2008]; Kenner v Avis Rent A Car Sys., 254 AD2d at 704-705; Chiacchia v National Westminster Bank, 124 AD2d at 628).”

Plaintiffs signed a consent agreement with the IRS agreeing to more than  $ 1.5 Million as well as civil fraud and negligence penalties.  That’s a lot of money.  The attorneys who represented them continued on for a period of time and then wrapped up the IRS matter.  Plaintiffs sued, and faced both a statute of limitations defense as well as a strategic choice defense.  They ultimately lost on the strategic choice issue.  Tantleff v Kestenbaum & Mark  2015 NY Slip Op 06720 [131 AD3d 955]
September 2, 2015  Appellate Division, Second Department  discusses the concept that the clients were fully informed and agreed to a difficult strategic choice.

“In any event, even if this action were timely commenced, the defendants established their prima facie entitlement to judgment as a matter of law by demonstrating that their recommendation that the plaintiffs execute the consent agreement was a reasonable strategic decision (see Leon Petroleum, LLC v Carl S. Levine & Assoc., P.C., 122 AD3d 686 [2014]; Keeley v Tracy, 301 AD2d 502 [2003]; Hart v Carro, Spanbock, Kaster & Cuiffo, 211 AD2d 617 [1995]). Furthermore, the defendants demonstrated that the recommendation was made after extensive discussions with the plaintiffs, who agreed to the course of action (see Noone v Stieglitz, 59 AD3d 505 [2009]; Holschauer v Fisher, 5 AD3d 553 [2004]; cf. Estate of Nevelson v Carro, Spanbock, Kaster & Cuiffo, 259 AD2d 282 [1999]). In opposition, the plaintiffs offered no evidence to raise a triable issue of fact as to whether the recommendation “was an unreasonable course of action that constituted legal malpractice” (Keeley v Tracy, 301 AD2d at 503; see Leon Petroleum, LLC v Carl S. Levine & Assoc., P.C., 122 AD3d at 687). The plaintiffs’ claims amounted to nothing more than their present dissatisfaction with the defendants’ strategic choice and thus, did not support a malpractice claim as a matter of law (see Pere v St. Onge, 15 AD3d 465, 466 [2005]; Zarin v Reid & Priest, 184 AD2d 385, 385 [1992]).”

Well known attorney has a longtime relationship with a CPA.  CPA moves from firm to firm and takes the attorney’s tax business with him.  It seems that he then files falsified tax returns, takes the attorney’s money and holds on to it, and does so while using his firms’ computer tax programs.  CPA is indicted and pleads guilty.  Will the firm be responsible?

Targum v Citrin Cooperman & Co., LLP 2016 NY Slip Op 31628(U) August 25, 2016 Supreme Court, New York County Docket Number: 650665/2014 Judge: Saliann Scarpulla does not reach an answer, but posits many questions.

“Defendant Citrin is the accounting firm of which Weber was a partner when his misconduct was discovered. Also named as a defendant is Lorraine Weber, Weber’s wife. After discovering Weber’s misconduct, Citrin and the Targum plaintiffs have each alleged claims against the other, seeking to recover some of the losses each sustained as a result of Weber’s unlawful conduct. Targum and Weber were longstanding friends. In 1989, Weber became employed by the accounting firm Richard Friedman & Associates, C.P.A., P.C. (“Friedman”). In 1990, Weber began providing tax preparation and related services for the Targums, and Weber continued to prepare the Targums’ taxes through 1999, while Weber was at Friedman. In 2000, Weber began working for Financial Appraisal Services, Ltd. (“FAS”). During his years at FAS, Weber continued to do accounting work for the Targums. Weber left FAS, and in August 2004, became a partner at Citrin. At Citrin, Weber was under the direct supervision of Gary Karlitz (“Karlitz”), the leader of Citrin’ s Valuation Services, Forensic Services, and Forensic Accounting Group (“VSFSFA Group”). At Citrin, Weber signed Partnership and Admission Agreements. The Admission Agreement provided that “Weber shall provide professional services only on behalf of [Citrin].” . The Amended and Restated Partnership Agreement, dated as of January 1, 2007, states, “[ t ]he Partnership shall charge reasonably for all professional services rendered by it following generally the policies of the firm as to the fees charged from time to time. However, each Partner may serve professionally, without charge, any individual member of his own immediate family.”

“After that meeting, also on February 28, 2012, Cooperman sent a form letter to Targum and Seeman. In the letter, Targum and Seeman were advised that Citrin had recently learned that Weber, who was no longer affiliated with the firm, had been independently performing tax-related and perhaps other services, all in violation of his Partnership Agreement, without the firm’s knowledge or authorization, and without each letter’s recipient having been a firm client. Citrin advised Targum and Seeman that Weber had informed the firm that he may not have filed certain of their tax returns and may not have made tax payments to the appropriate authorities and “suggest[ ed] that [they] immediately consult with an independent accountant and/or attorney.” Weber pied guilty in February 2013 to an indictment in connection with his unlawful conduct toward the Targums, Bardach, and a receivership that benefitted two children, as well as for his own failure to file taxes. He agreed to pay restitution to those individuals for the sums taken, including $828,128 to Targum. ·Weber admitted that he had stolen the Targums’ wired tax payments, used up much of it, and had transferred some to accounts in his or his wife’s name. Weber also conceded, during his allocution, that he had misrepresented to Targum that the account was a Citrin account, and “created the impression that this [payment] process was both known to and accepted by Citrin Cooperman, and more efficient for the taxpayer.” Weber also admitted some of his misdeeds as to the filing and failure to file, including the falsification of certain tax returns·. ”

“”It is well established that before a defendant may be held liable for negligence it must be shown that the defendant owes a duty to the plaintiff. In the absence of duty, there is no breach and without a breach there is no liability.” See Pulka v Edelman, 40 NY2d 781, 782 (1976) (internal citations omitted). An accountant owes a duty “to the party contracting for the accountant’s services,” see William Jselin & Co., Inc. v Landau, 71 NY2d 420, 425 (1988),4 but “accountants do not have a duty to the public at large.” Parrot v Coopers & Lybrand, L.L.P., 263 AD2d 316, 319 (1st Dept 2000), aff’d 95 NY2d 479 (2000). Similarly, an accountant-client relationship is a necessary element to the Targum plaintiffs’ fiduciary duty claim. See Tai v Superior Vending, LLC, 20 AD3d 520, 521 (2d Dept 2005). Thus, the Targum plaintiffs’ negligence claims, as well as its claim for breach of fiduciary duty, depend entirely upon a finding that the Targum plaintiffs were Citrin clients. ”

“Accordingly, although I originally determined to convert this motion to a summary judgment motion, I decline at this time to dismiss the Targum plaintiffs’ negligence, breach of fiduciary duty, professional negligence, and negligent supervision claims. Instead, I direct the parties to exchange discovery related to whether or not the Targum plaintiffs were clients of Citrin, and invite the parties to remake their summary judgment motions at the close of discovery. Additionally, I decline to rule on the issue of the scope of the alleged duty and foreseeability until I determine that a duty actually exists Finally, to the extent that the Targum plaintiffs oppose Citrin’s motion on the ground that they have a negligence and accounting malpractice claim against Citrin because, after the plaintiffs learned of Weber’s theft, Citrin failed adequately and promptly to respond to their document requests, I note that the Targum plaintiffs have not asserted that claim in their complaint.”

Weinberg v Sultan   2016 NY Slip Op 05939  Decided on September 1, 2016  Appellate Division, First Department is an example of legal malpractice issues that will arise and continue to arise as the baby boomer generation divests itself of assets gathered during the past 50 years.

Here, the former son-in-law of plaintiff intervened in the sale of a building which was in foreclosure. Could it have been sold for the appraised value or was it doomed?

“Order, Supreme Court, New York County (Cynthia S. Kern, J.), entered on or about February 23, 2015, which, to the extent appealed from as limited by the briefs, upon defendants’ motions to dismiss, dismissed plaintiff’s third, fourth, fifth, and sixth causes of action in the amended complaint; converted the motions to dismiss the first and second causes of action in the amended complaint to motions for summary judgment, with leave to further brief the motions; and granted defendant purchaser’s counsel leave to disburse $66,152 held in escrow for the purchaser, unanimously affirmed, without costs. Order, same court and Justice, entered on or about June 3, 2015, which, upon the remaining defendants’ motions for summary judgment, dismissed the first and second causes of action in the amended complaint, unanimously affirmed, without costs.

The motion court correctly dismissed the third and fourth causes of action. We have some concerns over the manner in which the sale of the building owned by the elderly plaintiff was orchestrated by defendant Kaminsky, her former son-in-law. Kaminsky, an attorney, procured the purchaser and referred plaintiff to the attorneys who represented her in the transaction and assisted her at the closing. It is unclear from the record whether these attorneys ever met with plaintiff before the closing or what role defendant Asher, the self-described “estate attorney,” played; that is, what advice, if any, he provided regarding her estate. It is also unclear how the purchase price for the building was arrived at and whether the representations made to plaintiff regarding the sale proceeds were accurate. Also, Kaminsky collected a $200,000 consulting fee for his work on the transaction, paid by the buyer.

Nonetheless, the amended complaint is barebones. It fails to allege any “material misrepresentation,” which is a required element of a fraud claim (see Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 559 [2009]; Nicosia v Board of Mgrs. of the Weber House Condominium, 77 AD3d 455, 456 [1st Dept 2010]). Further, plaintiff does not allege how defendant purchaser Linda Salamon and her company, defendant 22 West 30th St. Properties, LLC (together Salamon), exerted any undue influence over plaintiff (see Franklin v Winard, 199 AD2d 220, 220 [1st Dept 1993]) or coerced her into a transaction that she alleges made no [*2]economic sense. The amended complaint also failed to plead the fraud and undue influence claims with sufficient particularity, as required by CPLR 3016(b) (see id.). In addition, there is no private right of action against an attorney or law firm for violations of the Code of Professional Responsibility or disciplinary rules (Kantor v Bernstein, 225 AD2d 500, 501 [1st Dept 1996]; see Schwartz v Olshan Grundman Frome & Rosenzweig, 302 AD2d 193, 199 [1st Dept 2003]). Plaintiff failed to address her breach of contract claim in her opening appellate brief, so it can be deemed abandoned (see Bridgers v West 82nd St. Owners Corp., 114 AD3d 606, 607 [2014]). In any event, plaintiff provides no indication of how the contract was breached.”

“The motion court correctly granted the motions for summary judgment dismissing the first and second causes of action, for legal malpractice. The moving defendants made a prima facie showing of a lack of proximate cause, which is an essential element of a legal malpractice claim (see Sabalza v Salgado, 85 AD3d 436, 437 [1st Dept 2011]; Brooks v Lewin, 21 AD3d 731, 734 [1st Dept 2005], lv denied 6 NY3d 713 [2006]). In opposition, plaintiff failed to raise a triable issue of fact, since she merely speculated that the building she formerly owned, which was in foreclosure at the time of its sale, could have been sold for its appraised value (see Heritage Partners, LLC v Stroock & Stroock & Lavan LLP, 133 AD3d 428, 428-429 [1st Dept 2015], lv denied __NY3d __, 2016 NY Slip Op 71804 [2016]).”

Caesar’s wife must be above suspicion; legal malpractice practitioners are subject to greater scrutiny.  That is the lot of those who work in the negligence fields.   G. Willi-Food Intl. Ltd. v Herzfeld & Rubin, P.C. 2016 NY Slip Op 31625(U) August 26, 2016 Supreme Court, New York County Docket Number: 161053/2014 Judge: Kelly A. O’Neill Levy is the sad example of a legal malpractice case dismissed for discovery failures.

“Plaintiff commenced this action on or about November 6, 2014. The complaint contains allegations of legal malpractice, breach of contract, and breach of fiduciary duty arising out of defendants’ representation of plaintiff in a consolidated action also litigated in Supreme Court, New York County. On March 25, 2015 the parties appeared at a preliminary conference, where a preliminary conference order was signed (Singh, J.) providing that all interrogatories were to be served on or before April 9, 2015, with responses due by May 11, 2015. ”

“On or about January 25, 2016, plaintiff provided a.second response to defendants’ interrogatories. Defendants allege that the second response was still not sufficient pursuant to the order for more particularization. During the parties’ subsequent status conference on February 24, the court ordered, among other things, that plaintiff to provide a copy of its verification to interrogatory responses on or before March 7, 2016 and the original on or before March 14, 2016, in recognition that the verification would be coming from overseas. Plaintiff still has not provided a verification, and according to defendants, has failed to provide particularized responses. As a result, defendants have brought this motion to strike the pleadings, dismiss the complaint, and award attorney’s fees due to plaintiffs failure ~o comply with numerous court orders pursuant to CPLR § 3126. Plaintiff opposes the motion and asserts that it complied with the orders for particularization and is attempting in good faith to satisfy the court’s order for verification.”

“Plaintiffs failure to comply with three court orders, including a conditional order issued on default, made over the course of approximately one year evidences willful and contumacious behavior. See Bryant v. New York City Hous. Auth., 69 AD3d 488, 489 (1st Dep’t 20 I 0). The court provided plaintiff with numerous opportunities to remedy the deficiencies in its discovery responses and it failed to do so, warranting dismissal of the complaint. See FDIC v. Al/city Ins. Co., 228 AD2d 275 (I st Dep’t 1996), Gal-Ed v. I 53rd St Assoc. LLC, 73 AD3d 438, 438-39 (I st Dep’t 2010), Gale v. Delmonico Hotel Co., 260 AD2d 276, 276 (1st Dep’t 1999). Accordingly, the complaint is dismissed pursuant to CPLR 3126. The court declines to grant the remainder of the relief requested. Accordingly, it is · hereby ORDERED t~at the motion is granted to the extent that the complaint is dismissed. The Clerk is directed to enter judgment accordingly. “