The statute of limitations in legal malpractice is three years, with no “discovery” rule.  This harsh cut-off is ameliorated by the principle of continuous representation in which the statute of limitations is tolled while representation continues with a “continuing relationship of trust and confidence” and the joint understanding that more work is required and is to be performed.  In litigative work the grand scheme can be visualized as a case proceeds; in transactional work there may be long gaps between episodes of the continuing representation.  So it is in Red Zone LLC v Cadwalader, Wickersham & Taft LLP  2016 NY Slip Op 04249  Decided on June 2, 2016 where the Court of Appeals saw questions that the Appellate Division did not divine.

“The order of the Appellate Division should be modified, with costs, by denying plaintiff’s motion for summary judgment and reinstating defendant’s affirmative defenses of the statute of limitations and comparative negligence and, as so modified, affirmed.

Viewing the evidence in the light most favorable to defendant as the non-movant (see generally Vega v Restani Constr. Corp., 18 NY3d 499, 503 [2012]; Ortiz v Varsity Holdings, LLC, 18 NY3d 335, 339 [2011]), material triable questions of fact exist regarding whether defendant failed to exercise the ordinary reasonable skill and knowledge commonly possessed by members of the legal profession (see Dombrowski v Bulson, 19 NY3d 347, 350 [2012]). While a party may not create a feigned issue of fact to defeat summary judgment (see S.J. Capelin Assoc. v Globe Mfg. Corp., 34 NY2d 338, 341 [1974]), contrary to plaintiff’s assertion here, the affidavit of the attorney who represented plaintiff did not flatly contradict his prior deposition testimony. Therefore, the affidavit should have been considered in opposition to plaintiff’s motion.

Similarly, plaintiff did not meet its burden of demonstrating that defendant’s statute of limitations defense fails as a matter of law. Specifically, triable questions of fact exist regarding whether the statute of limitations was tolled by the continuous representation doctrine in light of: the significant gap in time between the alleged malpractice and the later communications between the parties; the changed nature of the alleged legal representation of plaintiff by defendant; the absence of any clear delineation of the period of such representation; and defendant’s submission of affidavits disclaiming any mutual understanding of legal representation after 2005 (see generally Grace v Law, 24 NY3d 203, 212 [2014]).”

Deep Woods Holdings LLC v Pryor Cashman LLP  2016 NY Slip Op 31077(U)  June 8, 2016  Supreme Court, New York County  Docket Number: 652886/2015  Judge: Saliann Scarpulla discusses the attorney-client privilege in the setting of joint representation.  This case is about the alleged failure to make a stock option call, and the loss of a large amount of money.

“In this action for legal malpractice and breach of fiduciary duty, plaintiff Deep Woods Holdings LLC (“Deep Woods”) moves to compel defendants Pryor Cashman LLP and Pincus Raice to produce certain portions of their client files for David Lichtenstein (“Lichtenstein”) and Park Avenue Bank that were withheld on the assertion of attorney/client privilege. This action arises out of the failure to exercise a call option originally held by Lichtenstein to purchase shares in Park A venue Bank from Savings Deposit Insurance Fund for the Republic of Turkey (“SDIF”). In 2005, Lichtenstein sought to exercise the call option, but SDIF refused to transfer the shares to him. After SDIF refused to transfer the shares, Lichtenstein and Donald Glascoff(“Glascoff’), the chairman of Park Avenue Bank, determined that a new entity should be created- Deep Woods – to litigate the enforcement of the call option. The defendants Pryor Cashman and Raice served as counsel to Lichtenstein and Park A venue Bank, and assisted them in creating Deep Woods and transferring the call option to the new entity. Thereafter, Deep Woods became a client of the defendants as well. Deep Woods’ original members, according to the defendants, were Lichtenstein, Glascoff, and Charles Antonucci, a former officer and director of Park Avenue Bank.   ”

“In this action, Deep Woods contends that defendants committed legal malpractice by failing timely to exercise the call option and by failing properly to litigate the timeliness issue in the SDIF litigation. 1 Deep Woods further claims that the defendants breached their fiduciary duties by failing to disclose facts underlying the SDIF litigation, including the fact that Raice failed to exercise the call option in a timely manner, which allegedly created a conflict of interest between the defendants and Deep Woods. ”

“The attorney-client privilege applies to confidential communications between attorneys and their clients made in the course of professional employment. CPLR §4503(a). For the privilege to apply, the attorney-client communication “must be made for the purpose of facilitating the rendition of legal advice or services·, in the course of a professional relationship.” Rossi v. Blue Cross & Blue Shield a/Greater New York, 73 N.Y.2d 588, 593 (1989). The parties do not dispute that the documents sought by Deep Woods from the defendants’ client files for Lichtenstein and Park Avenue Bank are attorney-client communications. Deep Woods contends, however, that these documents are not protected by attorney-client privilege because Lichtenstein, Park Avenue Bank, and Deep Woods were jointly represented by the defendants from 2007 to 2015. ”

“The attorney-client privilege also does not apply to the documents at issue because Lichtenstein and Park Avenue Bank waived the privilege by making selective disclosure of their attorney-client communications concerning the SDIF litigation to Deep Woods. Selective disclosure of privileged material “is not permitted as a party may not rely on the protection of the privilege regarding damaging communications while disclosing other self-serving communications.” Vil!. Bd. o/Vill. of Pleasantville v. Rattner, 130 A.D.2d 654, 655 (2d Dep’t 1987); Corrieri v. Schwartz & Fang, P.C., 106 A.D.3d 644, 645 (1st Dep’t 2013). Lichtenstein and Park Avenue Bank’s disclosure of their attorney-client communications during the SDIF litigation waived privilege as to other communications concerning the same subject matter. “

Pieroni v Phillips Lytle LLP  2016 NY Slip Op 04618  Decided on June 10, 2016  Appellate Division, Fourth Department is an example of the “try-try-try again” school of litiagation.  The case arises from a car dealership gone bad against a big upstate corporate law firm which, in this case, represented Ford.

“§ 487 action against two individual attorneys and their law firm in connection with their representation of Ford Motor Credit Company LLC, formerly known as Ford Motor Credit Company (Ford Credit), in an underlying action (2007 action) commenced by Ford Credit. In the 2007 action, Ford Credit sought damages for breach of a floor plan and security agreement with an automobile dealership. In connection with the 2007 action, Ford Credit obtained an order of seizure with respect to certain vehicles. Ford Credit later amended the complaint therein to add as defendants the plaintiffs in this action, who were the purported buyers or participants in the transfer of those vehicles. In 2010, plaintiffs commenced an action (2010 action) against Ford Credit alleging causes of action for intentional infliction of economic harm, conversion, fraud, and tortious interference with contractual relations. Plaintiffs alleged that Ford Credit knew of the bona fide claims of plaintiffs to the vehicles and submitted false statements in support of its order to show cause to seize the vehicles. Plaintiffs later moved for leave to amend the complaint to add defendants to the 2010 action and to add a cause of action pursuant to Judiciary Law § 487. Supreme Court (Bannister, J.) denied the motion with respect to the individual defendants, and denied the motion with respect to the law firm without prejudice for reconsideration in the event plaintiffs submitted additional proof, as set forth in the court’s bench decision. Plaintiffs did not submit any additional proof, and their subsequent motion for leave to reargue was denied. Although plaintiffs appealed, that appeal was not decided before both the 2007 action and the 2010 action were transferred to federal court.”

“In March 2013, plaintiffs commenced the present action. The complaint is essentially identical to the proposed amended complaint they submitted in support of their motion for leave to amend the complaint in the 2010 action. Supreme Court (Caruso, J.) granted defendants’ motion to dismiss the complaint, and we now affirm.

We agree with defendants that this action is barred by collateral estoppel, and thus that[*2]the court properly granted their motion. The doctrine of collateral estoppel has two requirements: “[f]irst, the identical issue necessarily must have been decided in the prior action and be decisive of the present action and second, the party to be precluded from relitigating the issue must have had a full and fair opportunity to contest the prior determination” (Kaufman v Eli Lilly & Co., 65 NY2d 449, 455; see Ackman v Haberer, 111 AD3d 1378, 1379). The proposed amended complaint in the 2010 action and the complaint in the present action raise identical issues, and the court decided those issues when it denied the motion for leave to amend.

It is well settled that ” [l]eave to amend a pleading should be freely granted in the absence of prejudice to the nonmoving party where the amendment is not patently lacking in merit’ ” (Holst v Liberatore, 105 AD3d 1374, 1374; see Tag Mech. Sys., Inc. v V.I.P. Structures, Inc., 63 AD3d 1504, 1505). A review of the decision of the court (Bannister, J.) shows that the court denied the motion because “the proposed amendment was palpably insufficient or patently devoid of merit” (Holst, 105 AD3d at 1374); the motion was not denied based on technical pleading defects (see Jericho Group Ltd. v Midtown Dev., L.P., 67 AD3d 431, 431, lv denied 14 NY3d 712; cf. Hodge v Hotel Empls. & Rest. Empls. Union Local 100 of AFL-CIO, 269 AD2d 330, 330-331). In addition, although the motion was denied without prejudice with respect to the law firm, plaintiffs never submitted any additional proof in their subsequent motion for leave to reargue. We reject plaintiffs’ further contention that they did not have a full and fair opportunity to contest the determination.”

Continuing with a further look at s a legal malpractice decision in which the law firm settled the case, yet the matter continues on.  Here, in  QBE Ins. Corp. v Maloof, Lebowitz, Connahan & Oleske, P.C.  2015 NY Slip Op 32113(U)  May 13, 2015  Supreme Court, New York County
Docket Number: 600412/2010  Judge: Carol R. Edmead we see the aftermath of a legal malpractice settlement amidst a squabble between insurers and their administrators and take a look at contribution after a claim for indemnification was denied.

Last week we saw that there was no situation in which QBE could claim indemnification from Maloof.  How about contribution?

“CPLR 1401, “Claim for contribution,” provides, in relevant part, that “two or more persons who are subject to liability for damages for the same personal injury, injury to property or wrongful death, may claim contribution among them whether or not an action has been brought or a judgment has been rendered against the person from whom contribution is sought.” The Court of Appeals has held that the legislative history of this statue makes clear “[t]hat purely economic loss resulting from a breach of contract does not constitute ‘injury to property’ within the meaning of New York’s contribution statute” (Board of Educ. of Hudson City School Dist. v Sargent, Webster, Crenshaw & Folley, 71 NY 2 d 21, 2 6 [ 19 8 7] ) . Courts have routinely upheld this principle (see e.g. Structure Tone, Inc. v Universal Servs. Group, Ltd., 87 AD3d 909, 911 [1st Dept 2011]; Children’s Corner Learning Ctr. v A. Miranda Contr. Corp., 64 AD3d 318, 324 [1st Dept 2009]). plain that “contribution is unavailable where . In short, it is . the underlying contractual claims seek purely economic damages” (Kleinberg v 516 W. 19th LLC, 121 AD3d 459, 460 [1st Dept 2014]). ”

General Obligations Law § 15-108 may intervene to end the discussion.

“As QBE and Maloof have settled, and QBE has stipulated to discontinue against Maloof in July 2014, Maloof argues that CSB’s contribution claim must be dismissed under General Obligations Law § 15-108 (b), which provides, in relevant part, that “release given in good faith by the injured person to one tortfeasor relieves him from liability to any other person for contribution.” CSB concedes that its contribution claim does not survive the settlement of QBE’s claims against Maloof. As such, the branch of Maloof’s motion seeking dismissal of QBE’s cross claim for contribution is also granted. “

It’s not that often that one sees a legal malpractice decision in which the law firm settled the case, yet the matter continues on.  Here, in  QBE Ins. Corp. v Maloof, Lebowitz, Connahan &
Oleske, P.C.  2015 NY Slip Op 32113(U)  May 13, 2015  Supreme Court, New York County
Docket Number: 600412/2010  Judge: Carol R. Edmead we see the aftermath of a legal malpractice settlement amidst a squabble between insurers and their administrators.

“This case arises from an underlying personal injury action in Kings County entitled Wright v AWL Industries, Inc. (index No. 26835/05) and a related coverage action in this county entitled AWL Indus., Inc. & Virginia Surety Co., Inc. v QBE Insur. Corp., index No. 600275/06. In the latter action, plaintiff, QBE Insurance Corporation (QBE), which was represented by Maloof, was found to owe coverage for two reasons: (1) the plaintiff in the coverage action, AWL Industries Inc., a general contractor, was an additional insured under the contract between the general contractor and a subcontractor insured by QBE; and (2) QBE’s answer was struck because of failures to comply with discovery. QBE, tendered the full amount of a $1,000,000 policy in order to settle the underlying personal injury action. After QBE commenced this action against Maloof for legal malpractice, 1 Maloof brought third-party claims against CSB (QBE’s third-party administrator) and Newman (who substituted as counsel for Maloof in the coverage action in February 2007. CSB brought a third-party claim against Rockville Risk Management (Rockville), alleging that Rockville took over from it as QBE’s third-party administrator starting in November 2006. QBE has since settled its claims against Maloof; all that remains of QBE’s complaint is its contractual claim against CSB. Further, Maloof has voluntarily discontinued its third-party action against Newman, and Rockville has discontinued its cross claims against Maloof. As for CSB’s claims against the moving parties, it seeks common-law indemnification and contribution against Maloof, Newman, and Rockville. ”

“Maloof argues that, if CSB is found liable to QBE, then the court will necessarily have found that CSB was actively at fault. As such, Maloof contends, CSB may not avail itself of common-law indemnification. In opposition, CSB argues two points: that the QBE/Maloof settlement does not extinguish its indemnification claim against Maloof and that Maloof’s application to dismiss that claim is premature. Maloof acknowledges that the indemnification claim against it is not extinguished by operation of General Obligations Law § 15-108 (b). And, as to the ripeness, CSB argues that Maloof’s application is premature because the court has not yet determined whether CSB is liable to QBE. CSB contends that if it is found liable, such liability would be triggered vicariously through the actions of Maloof and the other parties, rather than through its own fault. CSB is correct that the motion is premature if there is a possibility that CSB will be held liable solely for the fault of Maloof. However, for the reasons set forth below, this application is not premature, as there is no danger that Maloof will be unjustly enriched and no possibility that CSB will be entitled to common-law indemnification. ”

“Common-law negligence “is a restitution concept which permits shifting the loss because to fail to do so would result in the unjust enrichment of one party at the expense of the other” (Mas v Two Bridges Assoc., 75 NY2d 680, 690 [1990]). Thus, courts imply an indemnification agreement requiring the party “actively at fault in bringing about the injury” to indemnify another party that “is held responsible solely by operation of law because of [its] relation to the actual wrongdoer” (McCarthy v Turner Constr., Inc., 17 NY3d 369, 374, 375 [2011] [internal quotation marks and citation omitted]). ”

“It is clear that this provision is narrowly constructed to expose CSB to liability only for its own fault. The complaint alleges three predicates of liability under this provision based on three omissions: (1) failure to advise QBE of a defense to coverage based on late notice; (2) failure to notify QBE that the plaintiff’s in the coverage action were seeking to strike the answer; and (3) failure to provide Maloof with a copy of a statement by a principal of QBE’s insured which indicated that there was no contract between the insured and the general contractor at the time of the accident. CSB argues that none of these alleged omissions could possibly have given rise to QBE’s damages. Specifically, CSB argues that it did not cause QBE’s losses because QBE terminated CSB before the court struck QBE’s answer and the First Department subsequently relied on the striking of the answer in upholding the trial court’s declaration of coverage (see AWL Indus., Inc. v QBE Ins. Corp., 65 AD3d 904 [1st Dept 2009]). However, these arguments are better directed against QBE, rather than Maloof. There is no possibility that CSB will be held liable for Maloof’s wrongdoing: QBE alleges that CSB is directly, rather than vicariously, liable. Indeed, under the QBE/CSB contract, QBE must show active wrongdoing in order to recover against CSB. Thus, common-law indemnification is not applicable. ”

 

On its face a very straightforward if odd case.  Plaintiff serves a summons with notice and then fails to file a complaint when a demand is made. The case is dismissed.  But, a quick look at WebCivilSupreme indicates that plaintiff has sued many a law firm, including Steven Louros, Greenberg Traurig, LLP, Meltzer Lippe Goldstein along with a number of real estate brokerages.

“In this claim sounding in legal malpractice, defendant Meltzer, Lippe, Goldstein & Breitstone, LLP moves, pursuant to CPLR 3012(b), to dismiss the action due to plaintiffs failure to serve a complaint. Defendant also moves, pursuant to CPLR 3211 (a)(5), to dismiss based on the expiration of the statute of limitations. On January 26, 2015, plaintiffs Robert Malta, GMO 444 LLC, .and GMO Realty LLC commenced the captioned action against defendant Meltzer, Lippe, Goldstein & Breitstone, LLP, a law firm, by filing a summons with notice. Exs. A, D. The summons with notice alleged that plaintiffs sought $10 million due to defendant’s legal malpractice. Ex. A. Specifically, plaintiffs claimed that they had hired defendant to provide tax advice “regarding their purchase of a minority ownership interest in corporations holding shares in a commercial cooperative at 121 Varick Street, New York, New York in ·January 2012.” Id. The summons with notice, which was verified by Malta on behalf of all three plaintiffs, was served on defendant via the Secretary of State on May 14, 2015 and was filed with the court the following day. Exs. A, B, C. On June 11, 2015, defendant filed a notice of appearance and a demand for a complaint pursuant to CPLR 3012(b). Ex. C. However, plaintiff has not served a complaint. ”

“Pursuant to CPLR 3012(b ), a plaintiff who commences an action by service of a summons with notice and who has been served with a demand for the service of a complaint has 20 days in which to comply with that demand. See Wess v Olympia and New York Realty Corp., 201 AD2d 365 (1st Dept 1994 ). A plaintiff seeking to serve a complaint after the expiration of the 20-day period must demonstrate the merits of the cause of action and a reasonable excuse for the delay. See Barasch v Micucci, 49 NY2d 594, 599 (1980). Here, defendant’s notice of appearance and demand for a complaint was filed on June 11, 2015. Ex. C. However, nearly one year later, plaintiff has neither served a complaint nor even ‘ opposed this motion with any proffered reason why no complaint was served. Thus, the action is dismissed in the discretion of this Court pursuant to CPLR 30 l 2(b ). See Alvarado v New Y0rk City Hous. Auth., 192 AD2d 461 (1st Dept 1993). “

Disbarred lawyers, millions diverted, fraud, malpractice and missing money.  It’s a horrible story, and Plaintiffs are out $ 4.5 million.  They have been awarded summary judgment.  Will they ever collect?

135 Bowery LLC v Sofer  2016 NY Slip Op 31012(U)  June 2, 2016  Supreme Court, New York County  Docket Number: 108020/2011  Judge: O. Peter Sherwood is the story of NY real estate, attorney deceit, and a whole lot of money missing.

“This is one of two cases based on the same set of facts. Steven Seitzman and Judith Scitzman (the Seitzmans) are the sole members of 135 Bowery, LLC ( 135 Bowery). 135 Bowery owned the property located at 135 Bowery, New York, New York (the Property). In 2007, the plaintiffs sold the Property with the assistance of their attorney, Alan Young (Young, now deceased), a partner at Lindenbaum & Young, to fund the Seitzmans’ retirement. Plaintiff.o.; claim that Young diverted the proceeds of the sale, sent some of it to entities he controlled, used other monies to buy real property for his own benefit, and lied to the Seitzmans about the status of their investments. In the related case, 135 Bowery LLC. Steven Seitzrnan. and Judith Seitzman v Beach Channel Shoppers Mart Co. LLC, Index No. 156014/2013, the plaintiffs sued one of Young’s companies. According to the complaint in that case, $1,600,000 from the sale of the Property was diverted from the Lindenbaum & Young Interest on Lawyer Trust Escrow Account (LY IOLA Account) into a bank account of defendant Beach Channel Shoppers Mart Co., LLC (Beach Channel). ”

“Steven Seitzman (Stcven) and Judith Seitzman (Judith) are owners of 135 Bowery Street, LLC. In April of 2007, they hired attorney Alan Young to represent them in connection with the sale of the Property. Young counseled them in the attempt of an United States Internal Revenue Code § 1031 exchange (by which taxes would be deferred if the proceeds are invested in other. similar, real estate within a specified time after the sale). Liebman was the exchange trustee. The sale of the building closed on December 28, 2007. At the closing, plaintiffs received net proceeds of $4,513,711. This sum. was deposited in the LY IOLA Account and eventually $4,672.553.64 was transferred to Liebman, the Section 1031 Exchange Trustee (Steven aff at ii 10-12, NYSCEF Doc Nos. 106, 114, 115, J 19). A. Property Purchases On January 3, 2008, Young sent Liebman a letter instructing him lo transfer $3,500,000 to LY to be used for down payments on the purchase of two parcels of .land in Sullivan County, New York (NYSCEF Doc. No. 116). Young attached unsigned draft contracts which purportedly provided a basis for the transfer (id.). One contract was for an 83 .19 acre parcel (the “83 Acre Property,” id). The other was for a single family home (the “Mosquera Property,” id). Young was listed as counsel for the seller on both contracts (id.). Patrick Lucas, an associate at LY, appears on the draft contracts as representing the purchaser in both transactions (id.; Robert tr., NYSCEF Doc. No. 112, p.26). 10717 is named in the contract as the seller of the 83 Acre Property, with provision for Petri signing on behalf of that entity. According to the Sullivan County Tax Map and Records System, the 83 Acre Property was owned by a George Bagely (NYSCEr Doc. No. 117). Liebman transferred $3,500,000 to the LY IOLA account that day (NYSCEF Doc No. 118). On .January 4, 2008, a wire transfer was sent from the LY IOLA Account to the Ricciani & Jose LLP Attorney Escrow Account in the amount ot $ l, 738,664.10 (NYSCEF Docs. No. 123, 124 ). That money was used to purchase a different property from Robert Green in the name oi 10717 (the “18 Acre Property”) (NYSCEF Docs. No. 125, 126). Young is listed as the attorney for 10717. Additionally, $1,600,000 was transferred from the LY IOLA account to Beach Channel, which, as “” noted above, is the subject of the related litigation (NYSCEF Doc. Nos. 129-31 ). Beach Channel then transferred $1,200,000 to I 0717 and $355,00 to LY (NYSCEF Doc. No. 130). Additional facts relating to the diversion off funds to Beach Channel are set forth in the Decision and Order filed this day in the related case. ”

“The Sixth Cause of Action alleges legal malpractice against Young, LY, Robert, and I, YPC based on the same fal:ts that arc alleged against these parties for fraud (First Cause of Action), breach of fiduciary duty (Sel:ond Cause of Action). and constructive fraud (Third Cause of Adion). The same facts arc also asserted in support of the fourth (conversion), Fifth (unjust enrichment), and Tenth (negligent misrepresentations) Causes of Al:tion against Young and LY. The damages claimed in these Causes of Action are all essentially the same. In the malpractice claim, plaintiffs demand $4,500,000, arising from the misappropriation of funds entrusted to the la\vycrs and their law firms. Jn the first, Second, Third, fourth and Tenth Causes of Action, plaintiffs seek to recover the same amount (see Amended Complaint, NYSCEF Doc. No. 18 at pp. 49-52). In the Fifth Cause of Action, plaintiffs seek a portion of that amount, specifically $3,000,000. Accordingly, the first (fraud), Second (breach of fiduciary duty), Third (constructive fraud), Fifth (unjust enrichment) and Tenth (negligent misrepresentation) Causes of Action shall be dismissed as against Young and LY. The Fourth Cause of Action (conversion) shall be dismissed as against Young. All of these claims are duplicative of the malpractice claim asserted against these defendants. The above analysis cannot be applied to the claims against Robert and LYPC because plaintiffs have not established that an attorney client relationship existed between themselves and Robert or L YPC. As is discussed below, the plai ntifls · motion for summary judgment on the legal malpractice claim must be granted against Young and LY. It must be denied as against Robert and LYPC. ”

“In summary, plaintiffs’ motion for summary judgment is granted as against Young and LY as to the Sixth Cause (>f Action; as against Petri and 10717 as to the First, Third, fourth and Fifth Causes of Action; as against Hlock as to the first and Third Causes of Action and as against Mosquera under the Eleventh Cause of Action. The Motions for Summary Judgment of Robert and L YPC to dismiss the complaint as to them is granted except the Sixth Cause of Action against L YPC shall survive as there are material issues of fact based on the theory of successor liability. The . Second and Tenth Cause of Action are dismissed in their entirety. The complaint is dismissed as to 30. Accordingly, this Decision and Order disposes of all remaining claims except the Sixth Cause of Action against L YPC. ”

 

Justice Kornreich defends the integrity and reach of New York courts in GE Oil & Gas, Inc. v Turbine Generation Servs., L.L.C.  2016 NY Slip Op 50825(U)  Decided on May 27, 2016
Supreme Court, New York County  Kornreich, J. which is a high-level commercial case over the question of loan v. investment.  Of interest to us is her sua sponte invocation of Judiciary Law § 487 in foot note 6.  Here is a dire warning: ” Judiciary Law § 487 also prohibits attorneys from making knowingly false statements to deceive the court. As discussed at the May 18 oral argument, the TGS Parties’ claim in this court and in the Louisiana State Court Action that this court sua sponte dismissed their joint venture claim is false. The dismissal on March 30 was not a sua sponte dismissal without consideration of the merits or the allowance of an opportunity to brief the issues. Rather, the March 30 Order was issued because the joint venture claims were previously argued and ruled on, after extensive briefing, in connection with the summary judgment motion, and the claim was expressly rejected in the SJ Decision. Dismissal of the amended counterclaims in the March 30 Order was due to violation of an order contained in the SJ Decision. ”

Rather than go into the details of this loan v. investment, and forum selection issues, let’s just note that the court wrote: “An anti-suit injunction is warranted here. The TGS Parties’ commencement and continued maintenance of the Louisiana State Court Action is a clear violation of the parties’ forum selection clause. The issues in both cases are not merely duplicative and a waste of resources, but the risk of inconsistent judgments is very real. This court has considered the merits of the TGS Parties’ joint venture claims at length on three separate occasions (i.e., in the SJ Decision, and at the oral arguments on March 30 and May 18) and rejected them (as did Judge Doherty, the Louisiana federal judge). The issue had to be reached in the summary judgment decision because the TGS parties claimed the $25 million loan and guarantee, thoroughly papered by the counselled, sophisticated parties and signed by them, was really an investment in a joint venture. A judgment has been issued. Yet, the TGS Parties are seeking to collaterally challenge this court’s judgment in the Louisiana State Court Action by continuing to press the merits of the joint venture claim and by asking that court not to give res judicata or collateral estoppel effect to this court’s decision and judgment. Doing so not only violates the parties’ forum selection clause, it evinces an utter disregard for this court’s authority.

The court cannot allow the integrity of its judgment to be challenged. Litigants, such as the extremely sophisticated parties (aided by extremely sophisticated counsel) in this action, expressly agree to litigate in New York and apply New York law to their complex commercial disputes because this court is seen as capable of providing a level of certainty not found in other jurisdictions. The TGS Parties would see that certainty undermined.

Moreover, the TGS Parties violated the court’s March 30 Order by seeking to enjoin this action. Simply put, GEOG demonstrated by clear and convincing evidence that a lawful order of this court, clearly expressing an unequivocal mandate, was in effect; the TGS Parties had full knowledge of its terms and disobeyed it; and GEOG was prejudiced by their actions. See McCain v Dinkins, 84 NY2d 216, 226 (1994); Gottlieb v Gottlieb, 137 AD3d 614, 618 (1st Dept 2016); Lundgren v Lundgren, 127 AD3d 938, 939 (2d Dept 2015); Matter of Andrew B., 128 AD3d 1513, 1514 (4th Dept 2015); Hugh v Taylor, 121 AD3d 1363, 1364 (3d Dept 2014). That is contemptuous.”

Caso v Miranda Sambursky Slone Sklarin, Verveniotis LLP  2016 NY Slip Op 30965(U)
May 26, 2016  Supreme Court, New York County  Docket Number: 159192/2015  Judge: Carol R. Edmead is an example of a fact studded complaint which alleges a cause of action, but then shreds under analysis by the Court.  Was it because the wrong kind of expert was offered?  Why should an expert be required at the CPLR 3211 stage of the proceedings?  Is this a rule only for legal malpractice?

“Plaintiff Thomas Caso (“plaintiff’) alleges that on June 24; 2007, at approximately 4:45 a.m., he was hit by a truck in Manhattan and the driver of the vehicle left the scene. Within three weeks thereafter, plaintiff hired defendants as his attorneys to prosecute an action against responsible parties. On September 16, 2007, New York Police Department (“NYPD”) Detectives arrested Anibal Santos (“Santos”) as the driver of the hit-and-run accident, and closed its investigation. On September 20, 2007, defendants submitted a claim for benefits on plaintiffs behalf to the Motor Vehicle Accident Indemnification Corporation.

On October 8, 2007 the District Attorneys’ office declined to prosecute Santos.

Yet; defendants filed a complaint against, inter alia, Santos in the Bronx Supreme Court (the “underlying action”). After an eight-day jury trial, at which Santos and his co-defendants claimed that there was insufficient evidence that they were the owner/driver of the offending vehicle, a jury denied any recovery to plaintiff. Thereafter, this action for malpractice ensued, in which plaintiff claims that defendants’ failure to conduct a reasonable and prompt investigation of the accident by taking various, certain steps to correctly identify the driver, was a substantial contributing cause and substantial factor in plaintiffs non recovery of his damages. In support of dismissal, defendants argue that neither of plaintiffs malpractice claims sufficiently allege what actions or inactions form the basis of the alleged negligence, nor how said negligence caused plaintiffs losses. Plaintiff fails to allege any specific item of investigation that defendants failed to perform in the underlying action; or that defendants to the underlying action were incorrectly named. Plaintiffs inability to identify the “correct” party to the underlying action requires dismissal of the claim that defendants named the incon-ect party. ‘ And, the jury’s verdict does not mean that the incorrect parties were named, or that defendants were negligent in their prosecution of the case. Plaintiff also fails to plead that either of his theories ofliability was the “but for” proximate cause of his damages. Further, the record in the underlying action establishes that defendants fully investigated and prosecuted plaintiffs case, and that defendants undertook each of the investigative efforts that plaintiffs complaint now claims were not done. Plaintiffs claims amount to speculation and conjecture.”

“Such failures, according to plaintiff, were the substantial cause of his non-recovery of damages for his injuries, and his lost of his chance of a better outcome of the underlying action; plaintiff would have recovered compensation and damages for his injuries but lost his trial based on the defense that Santos and his co-defendants were not the driver or owner of the offending vehicle, which was proximately caused by defendants’ failures to timely and properly investigate the accident.

Accepting the above allegations as true, as this court must, it cannot be said that plaintiff failed to “allege” a cause of action for legal malpractice.”

“Plaintiffs reliance on the affidavit of an investigator is misplaced, as such investigator is not an attorney qualified to opine on the reasonable skill and knowledge commonly possessed by a member of the legal profession. Further, plaintiff cites no authority for the position that a law firm’s engagement of an independent investigation firm to assist in the preparation of a hit-and run investigation constitutes negligence. Therefore, based on the uncontroverted submissions, plaintiff does not have a legal malpractice claim against defendants. “

Caso v Miranda Sambursky Slone Sklarin, Verveniotis LLP   2016 NY Slip Op 30965(U)
May 26, 2016  Supreme Court, New York County  Docket Number: 159192/2015  Judge: Carol R. Edmead is an example of a well pled complaint which shreds at the CPLR 3211 stage.  Today, we  examine the underlying claimed departures and how the Court treated these claims.  Suggestion:  in no other area of the law are cases so closely examined at the pre-answer stage.

“Here, plaintiff alleged that defendants breached its duty to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession in that defendants “should have been aware of,” the NYPD and DA’s investigations and ultimate · decision to decline to prosecute Santos through October 8, 2007 (Complaint iJI 5). Specifically, defendants failed to (I) inquire of Detective Greene to determine the steps taken in the police investigation of the criminal matter, and to obtain relevant police reports and 911 records; (2) visit the hospital to interview the treating physician regarding a list and location of plaintiff’s injuries in order to determine the direction of travel and mechanisms of injury of the offending vehicle; (3) photograph and examine the injury pattern on plaintiff; ( 4) obtain the medical reports of and interview the EMT responders; (5) retain clothing plaintiff wore at the time of the Accident, with which to match trace elements against an examination of the offending vehicle; ( 6) photograph, inspect, and diagram the accident scene at or near the time of the accident; (7) conduct a I 0-14 day surveillance of the accident location between 3 AM and SAM to identify all private garbage removal carting trucks passing through the area, and pursue the records, logs, data and information relating thereto; (8) canvass the area between West 50th through 55th Streets and 8th through 10th Avenues for the names of all garbage removal carters making pickups between 3 AM and 5 AM, and pursuing the records, logs, data and information relating thereto; (9) contact local media sympathetic to pedestrian safety issues to bring public attention to the accident and possibly locate additional eyewitnesses; (10) obtain legal process to obtain pickup logs from all garbage removal carters making pickups in the area showing which of their trucks were operating in the vicinity of the accident at the time of the accident; (11) determine the final destination for any suspect vehicle, and obtaining logs of the vehicles that used such facilities in the hours following the accident; (l2) create a photo-array showing the various truck models potentially involved in the accident, for examination by eyewitness early in the investigation when his memory was fresh; ( 13) and take such other steps necessary to investigate properly and diligently plaintiffs accident and identifying the driver and owner of the vehicle which struck and injured the plaintiff. Such failures, according to plaintiff, were the substantial cause of his non-recovery of damages for his injuries, and his lost of his chance of a better outcome of the underlying action; plaintiff would have recovered compensation and damages for his injuries but lost his trial based on the defense that Santos and his co-defendants were not the driver or owner of the offending vehicle, which was proximately caused by defendants’ failures to timely and properly investigate the accident. ”

“However, in light of the numerous documents and transcripts generated in the underlying action, to which plaintiff had full and complete access, the inquiry is whether plaintiff “has” a cause of action for legal malpractice.

Defendants’ alleged failure to interview the treating physician to determine the direction of travel and mechanisms of injury, examine the injury pattern on plaintiff, obtain the medical reports of and interview the EMT responders, and retain clothing plaintiff wore at the time of the Accident to match trace elements against an examination of the offending vehicle is insufficient to support any claim that such failures were a proximate cause of plaintiffs inability to recover for his injuries. These claims are speculative in nature, and plaintiff does not allege the manner in which any of such information would have revealed or confirmed the identity of offending vehicle. And, the EMT report bears no information on the identity of the offending vehicle. In the absence of any specific factual allegations demonstrating that, but for the defendant’s alleged failures, there would have been a more favorable outcome in the underlying action, these claims do not support a legal malpractice claim against defendants.

As to plaintiffs allegation that defendants failed to inquire of Detective Greene to
determine the steps taken in the police investigation of the criminal matter, and to obtain relevant
police reports and 911 records, the letters of July 30, 2007, August 13, 2007, and December 31,
2007 from defendants’ investigator indicate the numerous attempts the investigator made to
obtain such records and information from Detective Greene (who was initially on vacation and
then upon his return, failed to return the investigator’s phone calls). Defendants’ investigator
ultimately obtained Detective Green’s notes (i.e., DD5s) pertaining to the accident: Detective
Greene’s trial testimony of the steps undertaken in his investigation indicate that the sole eye witness to the accident, Arenas, saw a dark green truck without any writing on it hit the plaintiff; that during Detective Greene’s surveillance on Saturday to Sunday from 3:00 AM to 5:30 AM a week following the accident, he saw a dark-green garbage truck; he did not notice any writing on the truck, until he pulled alongside of it and saw “Vanguard Carting” lettering “very hard to see” (pp. 20-21). Such information is consistent with the information defendants’ obtained independently, that the offending vehicle was (allegedly) a green, Vanguard Carting truck. ”

“Further, while plaintiff alleges that defendants failed to create a photo array of various truck models potentially involved in the accident to refresh the memory of eyewitnesses early in the investigation, Detective Greene’s DDS dated September 6, 2007 (approximately 2 112 months after the accident) indicates that Arenas initiated a call to advise Detective Greene that he “recalled the garbage truck as having a ‘flat front’ cab area, meaning a newer type cab (driver/passenger area) as opposed to an older garbage truck with an engine block in front of the cab/driver/passenger area.” Plaintiff fails to allege that the failure to use such a photo array, under the circumstances, was a proximate cause of plaintiffs non-recovery of damages for his injuries. ”

“Therefore, based on the uncontroverted submissions, plaintiff does not have a legal malpractice claim against defendants. Further, plaintiff’s claim for further discovery was obviated by virtue of this Court’s directive that defendants make available for discovery and inspection their entire litigation file for purposes of opposing this motion.”