Plaintiff is married to a former movie star, and late in life she seeks to revoke an irrevocable trust.  The money in the trust was hers prior to marriage, and in the transaction plaintiff nets $2 Million rather than $50,000.  He sues nevertheless.

Gallet, Dreyer & Berkey, LLP v Basile  2016 NY Slip Op 05332 Decided on July 5, 2016
Appellate Division, First Department is an example of how the courts obsessively search through the details of legal malpractice cases to determine whether the “but for” or “case within a case” elements is proven.

“As a signatory to the settlement, Basile certainly had the right to be fully informed of the facts and provided with appropriate advice by his attorney before agreeing to its terms, and we cannot conclude as a matter of law on this record that the law firm’s advice to Basile was complete and free of incorrect information. However, nothing in Basile’s submissions shows that but for that claimed negligence, he “would not have sustained actual and ascertainable damages” (Nomura, 26 NY3d at 50 [internal quotation marks omitted]).

The irrevocable trust was created and funded with Holm’s assets before Basile’s marriage to Holm. Basile had no current interest in the trust’s assets at the time of the settlement; he had, at best, a potential interest in those assets if the trust were to be set aside and the assets became part of Holm’s estate, entitling Basile to an elective share. Similarly, the claims addressed in the stipulation regarding other, non-trust assets also concerned property that belonged to Holm alone, and Basile had no present possessory right to them. Notwithstanding Basile’s residuary interest in Holm’s eventual estate, and the possibility that if Holm reacquired property that was previously transferred she would gift him a present interest, he had no established right to make any disposition of that property, or to claim ownership of any portion of that property, while she was alive. His lack of a present possessory interest in the property at issue severely restricts any rights to claim that the law firm’s alleged failures proximately caused him to experience a financial loss in relation to those properties.

More importantly, Basile has not presented an evidentiary showing supporting a claim to “actual and ascertainable damages,” as Nomura requires (26 NY3d at 50 [internal quotation marks omitted]). In cases presenting a valid claim of legal malpractice, the claimed “actual and ascertainable damages” have been clearly calculable (see e.g. Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438 [2007]). In contrast, summary judgment dismissing the legal malpractice claim has been granted where the asserted damages are vague, unclear, or speculative (see Bellinson Law, LLC v Iannucci, 102 AD3d 563, 563 [1st Dept 2013]). Here, Basile essentially speculates that the information he lacked would have provided him with better leverage in negotiations, but he fails to show exactly how, if counsel had properly informed and advised him, the outcome of the litigation would have been more favorable to him. This is particularly so since the settlement netted him a distribution in excess of $2,000,000, as compared to the $25,000 he would have received under the trust alone, in the absence of the stipulation. The submissions simply do not justify a conclusion that Basile would have achieved a more favorable result in the absence of counsel’s claimed mistakes.”

Board of Mgrs. of 325 Fifth Ave. Condominium v Continental Residential Holdings LLC 2016 NY Slip Op 31230(U)  June 27, 2016  Supreme Court, New York County  Docket Number: 154764/12  Judge: Kelly A. O’Neill Levy is a very dense luxury high rise construction case arising from a building on 5th Avenue in Manhattan.  Justice O’Neill Levy briskly takes on a number of motion sequences involving a caption that takes up the entire page.  Interestingly, the case started with a summons with notice, which is a weak branch upon to rest this weak balcony case.

For our niche point of view, all the claims against the attorneys were dismissed as duplicitive of the legal malpractice claim.

“Plaintiff The Board of Managers of 325 Fifth Avenue Condominium (plaintiff) is an association of condominium apartment owners and is responsible for managing the condominium’s affairs. This is an action to recover damages for alleged construction defects, including: the balconies, the lack of vertical fire stops, loose support for the suspended piping in the mechanical room, missing or improperly installed floor and deck mounted vibration isolation systems, and improper design of the concrete floor slab in the mechanical penthouse. Prior to commencing this lawsuit, in exchange for the sum of$900,000.00, on May 17,2011, plaintiff executed a release of its balcony claims against the sponsor defendants. Plaintiff has also sued; the Board’s former counsel, Wolf Haldenstein for legal malpractice, the Cantor Seinuk defendants, as the engineer of record during the construction of the building, and FS Project Management, which was retained in 2009 by the then-sponsor controlled Board to investigate the balconies and to supervise replacement of the building’s glass panels and reinstall the balcony rails. The defendants have cross-claimed against each other. The complaint sets forth a total of 16 causes of action. The first and second causes of action against the sponsor defendants are for breach of contract. The third cause of action against all of the defendants is for breach of fiduciary duty. The fourth cause of action against all of the defendants is for fraud. The fifth cause of action against all of the defendants is for constructive fraud. The sixth cause of action against the sponsor defendants is for fraudulent inducement of the release. The seventh cause of action against Cantor Seinuk is for aiding and abetting the fraudulent inducement of the release. The eighth cause of action against FS Project Management is for aiding and abetting fraudulent inducement of the release. The ninth cause of action against FS Project Management is for breach of contract. The tenth cause of action against FS Project Management is for fraud. The eleventh cause of action against FS Project Management is for breach of fiduciary duty. The twelfth cause of action against FS Project Management is for breach of contract. The thirteenth cause of action against non-movant Basonas Construction Corp. is for breach of contract. The fourteenth cause of action against Wolf Haldenstein is for legal malpractice. The fifteenth cause of action against the sponsor defendants is for a declaratory judgment. The sixteenth, and final cause of action, against all of the defendants is for civil conspiracy. ”

“The breach of fiduciary duty, fraud, and constructive fraud claims, based upon Wolf Haldenstein’ s alleged failure to abide by general professional standards, must be dismissed, as they are all merely redundant of the legal malpractice claim. The alleged breaches “arose out of the same facts as the legal malpractice claim and did not involve any damages that were separate and distinct from those generated by the alleged malpractice” (Cosmetics Plus Group, Ltd. v Traub, 105 AD3d 134, 143 [I st Dept 2013]). Plaintiffs fail to plead their causes of action for fraud with sufficient specificity (CPLR 3016 [b]). No additional promise or duty on the part of Wolf Haldenstein is alleged which would extend beyond the duty a law firm owes its client. Nor is a fraud claim supported by plaintiffs conclusory allegations that Wolf Haldenstein was engaged in a scheme to deceive. Those allegations merely evidence plaintiffs’ dissatisfaction with the sum of money they received for executing the release. In addition, New York does not recognize a conspiracy to commit a tort as a separate cause of action (Brackett v Griswold, I 12 NY 454, 467 [1889]).

Finally, punitive damages are not available in an ordinary legal malpractice case (Walker v Sheldon, 10 NY2d 401, 405 [1961]). The pleading elements required to state a claim for punitive damages as an additional and exemplary remedy when the claim arises from a breach of contract are: (I) defendant’s conduct must be actionable as an independent tort; (2) the tortious conduct must be of an egregious nature; (3) the egregious conduct must be directed to plaintiff; and (4) it must be part ofa pattern directed at the public generally (New York Univ. v Continental Ins. Co., 87 NY2d 308, 316 [1995]). Clearly, the conduct alleged against Wolf Haldenstein is neither egregious, nor directed at the public generally. Therefore, Wolf Haldenstein’s motion, pursuant to CPLR 3211 (a) (7), for an order dismissing the third, fourth, fifth and sixteenth causes of action, and dismissing the claim for punitive damages (motion sequence number 002), must be granted. “

Loans were given and mortgages taken.  The mortgages were no properly recorded after closing. Some time passed, and the borrowers stopped paying.  An easy solution, no?  In this case, not an easy solution.  All of the claims discussed in this appeal are time barred.

Yarbro v Wells Fargo Bank, N.A.  2016 NY Slip Op 05236  Decided on June 30, 2016
Appellate Division, First Department shows how the passage of time works against the litigant.

“Contrary to plaintiffs’ contention, the breach of contract causes of action accrued at the time of the breach, not on the date of discovery of the breach (Ely-Cruikshank Co. v Bank of Montreal, 81 NY2d 399 [1993]), and the six-year statute of limitations applicable thereto had run before plaintiffs commenced this action. The negligence claims, which allege a failure to properly record certain mortgages, are governed by CPLR 214(4), a three-year statute of limitations (see First Am. Tit. Ins. Co. of New York v Fiserve Fulfillment Servs., Inc., 2008 WL 282019, *2, 2008 US Dist LEXIS 7344, *6 [SD NY 2008]). “[A]ccrual time is measured from the day [the] actionable injury occur[red], even [though] the aggrieved party [was] then ignorant of the wrong or injury'” (Nothnagle Home Sec. Corp. v Bruckner, Tillet, Rossi, Cahill & Assoc., 125 AD3d 1503, 1504 [4th Dept 2015], lv denied 25 NY3d 909 [2015] [quoting McCoy v Feinman, 99 NY2d 295, 301 [2002]). The mortgages at issue were recorded in 2007; this action [*2]was not commenced until 2014.

Plaintiffs’ attempt to extend the statute of limitations by equitable tolling is unsupported by any non-conclusory allegation that they were “actively misled” by any of the defendants (see Shared Communications Servs. of ESR, Inc. v Goldman, Sachs & Co., 38 AD3d 325, 325 [1st Dept 2007] [internal quotation marks omitted]). Nor do plaintiffs allege any facts that would support their “continued representation” claim.

The legal malpractice claim, which accrued at the time the mortgages were recorded after closing (Benedict v Estate of Noumair, 289 AD2d 71 [1st Dept 2001]) and is governed by a three-year statute of limitations (CPLR 214[6]), and the unjust enrichment claim, which accrued “upon the occurrence of the alleged wrongful act giving rise to restitution” (Kaufman v Cohen, 307 AD2d 113, 127 [1st Dept 2003]) and is governed by a six-year statute of limitations (CPLR 213[1]); see also Maya NY, LLC v Hagler, 106 AD3d 583, 585 [1st Dept 2013]), are time barred.”

In a dense (actually very dense) opinion, the First Department has determined that under certain circumstances, your attorneys are fee to discuss your case amongst themselves, and may do so in an air of confidentiality…they need not tell you what they discussed.

Stock v Schnader Harrison Segal & Lewis LLP   2016 NY Slip Op 05247  Decided on June 30, 2016  Appellate Division, First Department  Friedman, J., J. is the situation where the attorneys may have committed malpractice to the tune of $5 million, but then are called to testify to their actions in a securities arbitration.  When the subpoena comes, discussions ensue.  Are the conversations discoverable?

“The primary issue on this appeal is whether attorneys who have sought the advice of their law firm’s in-house general counsel on their ethical obligations in representing a firm client may successfully invoke attorney-client privilege to resist the client’s demand for the disclosure of communications seeking or giving such advice. We hold that such communications are not subject to disclosure to the client under the fiduciary exception to the attorney-client privilege (recognized in Hoopes v Carota, 142 AD2d 906 [3d Dept 1988], affd 74 NY2d 716 [1989]) because, for purposes of the in-firm consultation on the ethical issue, the attorneys seeking the general counsel’s advice, as well as the firm itself, were the general counsel’s ” real clients'” (United States v Jicarilla Apache Nation, 564 US 162, 172 [2011] [Apache Nation], quoting Riggs Natl. Bank of Washington, D.C. v Zimmer, 355 A2d 709, 711-712 [Del Ch 1976]). Further, we decline to adopt the “current client exception,” under which a number of courts of other jurisdictions (see e.g. Bank Brussels Lambert v Credit Lyonnais [Suisse] S.A., 220 F Supp 2d 283 [SD NY 2002]) have held a former client entitled to disclosure by a law firm of any in-firm communications relating to the client that took place while the firm was representing that client. Because we also find unavailing the former client’s remaining arguments for compelling the law firm and one of its attorneys to disclose the in-firm attorney-client communications in question, we reverse the order appealed from and deny the motion to compel.”

“In 2008, the defendant law firm, Schnader Harrison Segal & Lewis LLP (SHS & L), through the managing partner of its New York City office, defendant M. Christine Carty, Esq., represented plaintiff Keith Stock in the negotiation of his separation agreement from his former employer, MasterCard International. Unbeknownst to plaintiff during the negotiation of the separation agreement, his termination by MasterCard triggered the acceleration of the ending dates of the exercise periods of certain stock options granted to him under MasterCard’s Long-Term Incentive Plan (LTIP). Specifically, the termination of plaintiff’s employment caused the exercise periods of his vested stock options under the LTIP to shrink from 10 years to between 90 and 120 days. Although SHS & L negotiated a delay of the date of plaintiff’s termination for the purpose of allowing additional stock options to vest, the firm did not negotiate an extension of the truncated exercise periods of the vested options.

In January 2009, plaintiff learned from Morgan Stanley Smith Barney (MSSB), the administrator of the MasterCard LTIP, that all of his vested stock options, which allegedly had been worth more than $5 million in aggregate, had already expired under the terms of the LTIP as a result of the termination of his employment. Plaintiff thereupon consulted with SHS & L concerning possible remedies for this loss. Plaintiff, represented by SHS & L, subsequently commenced a lawsuit in federal court against MasterCard and an arbitration proceeding before the Financial Industry Regulatory Authority (FINRA) against MSSB. The SHS & L attorneys who [*3]represented plaintiff in these litigations were Theodore Hecht, Esq., and Cynthia Murray, Esq.^[FN1]

On January 8, 2011, 11 days before the hearing of plaintiff’s arbitral proceeding against MSSB was scheduled to begin, MSSB’s counsel gave notice that it intended to call Carty to testify as a fact witness at the arbitration ^[FN2]. This development prompted Carty, Hecht and Murray to seek legal advice from SHS & L’s in-house general counsel, Wilbur Kipnes, Esq ^[FN3]. The subject on which Carty, Hecht and Murray sought Kipnes’s advice was their and the firm’s ethical obligations, in light of MSSB’s demand for Carty’s testimony, under the lawyer-as-witness rule (see Rules of Professional Conduct [22 NYCRR 1200.0] [RPC] rule 3.7)^[FN4]. Kipnes never worked [*4]on any matter for plaintiff, and plaintiff was not billed for any of the time he devoted to the consultations with Carty and Hecht.”

“Plaintiff does not take issue with the right of SHS & L and Carty to invoke attorney-client privilege with respect to the January 2011 emails as against the rest of the world. Plaintiff contends, however, that these documents cannot be withheld from him, on the ground that the communications in question took place while the firm was still representing him and related to that representation. Plaintiff’s primary reliance in seeking to obtain the January 2011 emails is on a doctrine known as the fiduciary exception to the attorney-client privilege. Disagreeing with plaintiff and Supreme Court, we find that the fiduciary exception does not apply to the January 2011 emails.”

“The interests of SHS & L and its attorneys in adhering to their ethical obligations did not necessarily coincide with plaintiff’s interest in successfully and efficiently prosecuting the arbitration against MSSB. For example, an opinion by SHS & L’s in-house counsel that the firm should withdraw from representing plaintiff would have protected the professional interests of the firm and its attorneys but would not have directly advanced plaintiff’s claims in the arbitration or the federal court action. Indeed, the firm’s withdrawal from the representation likely would have significantly delayed the resolution of plaintiff’s claims and increased the expense of the arbitration. Any benefit to plaintiff from his attorneys’ adherence to their ethical [*9]obligations as a result of the consultation with the in-house counsel would have been indirect and incidental (cf. Riggs, 355 A2d at 713 [ordering disclosure of the trustee’s attorney-client communications to the trust beneficiaries, who were “not simply incidental beneficiaries who chance to gain from the professional services rendered”])^[FN9]. Thus, because the purpose of the consultation with Kipnes — for whose time, to reiterate, plaintiff was not billed — was to ensure that the attorneys and the firm understood and adhered to their ethical obligations as legal professionals, the attorneys and the firm, not plaintiff, were the “real clients” in this consultation.

We also reject plaintiff’s argument that the January 2011 emails are necessarily subject to the fiduciary exception because his relationship with SHS & L had not yet reached the stage of actual hostility as of the time of those communications. The considerations that support sustaining SHS & L’s invocation of attorney-client privilege as to these communications are not diminished by the fact that, when the communications took place, neither plaintiff nor SHS & L was threatening to sue the other. The protection afforded by the attorney-client privilege encourages lawyers to seek advice concerning their ethical responsibilities and potential liabilities in a timely manner so as to minimize any damage to the client from any conflict or error. Much of this benefit — to both lawyers and clients — would be lost if the attorney-client privilege could be invoked by a lawyer who sought legal advice to protect his or her own interests only for consultations that took place after the lawyer or the client had openly taken a position adverse to the other.”

Playing around with big corporations in a legal malpractice setting requires huge gulps of discovery.  One might expect 10,000+ emails, tons of testimony and millions of paper documents.  What happens when plaintiff produces only one e-mail?

Arbor Realty Funding, LLC v Herrick, Feinstein LLP  2016 NY Slip Op 05065 Decided on June 28, 2016 Appellate Division, First Department documents how the AD1 handles large spoliation of electronic data issues.

“In this action, plaintiff Arbor Realty Funding, LLC (Arbor) seeks damages for legal malpractice from defendant Herrick, Feinstein LLP (Herrick) in connection with Herrick’s representation of Arbor in negotiating a high rise construction loan with a developer. The loan closed on May 8, 2007 and the developer defaulted on the loan in or about July 2008. Arbor contends, inter alia, that Herrick gave it faulty advice in 2007 in connection with zoning issues, the existence of which led to the revocation of building permits following a crane collapse at the site, and the borrower’s default. Herrick argues, inter alia, that Arbor would have issued the loans regardless of any potential zoning issues and that Arbor later assigned the loans and/or failed to mitigate its damages.

The instant motion concerns Arbor’s alleged spoliation of evidence. It is undisputed that Arbor’s obligation to preserve evidence arose at least as early as June 2008, when Arbor retained counsel in connection with its claims against Herrick. However, Arbor did not issue a formal litigation hold until May 2010. As a consequence, Arbor’s internal electronic record destruction policies, including recycling of backup tapes, deletion of employees’ emails stored in their inboxes or sent items folders for 189 days, and erasure of employee hard drives and email accounts upon the employee’s departure from the firm, were not suspended until May 2010. In addition, Arbor’s CEO deleted his emails on a regular basis between June 2007 and June 2010, with the result that only one of his emails from the relevant period was produced. Arbor produced no emails from the relevant period from its Executive Vice President of Structured Finance, who was involved in the transaction.

Arbor commenced this action in 2011. In or about June 2014, Herrick filed a motion seeking dismissal of the complaint as a sanction for Arbor’s failure to preserve evidence, including the electronic records of six key witnesses. The court found that Arbor’s failure to preserve evidence constituted ordinary negligence, and granted Herrick’s motion only to the extent of directing that Herrick be entitled to an adverse inference at trial, citing PJI 1:77. Arbor did not appeal that order. Approximately six weeks later, Arbor produced to Herrick the minutes from a May 10, 2007 structured loan committee meeting, which identified eight additional Arbor employees who were involved in the loan transaction. Arbor claims that its failure to produce the minutes earlier was inadvertent. In or about January 2015, Herrick moved to renew its spoliation [*2]motion, based on the new information in the minutes, including the identification of additional witnesses, much of whose electronic records had been destroyed by Arbor, either due to its failure to timely institute a litigation hold, or deliberately, and Arbor cross moved for sanctions.”

“Where, as here, the spoliation is the result of the plaintiff’s intentional destruction or gross negligence, the relevance of the evidence lost or destroyed is presumed (Pegasus Aviation I, Inc. v Varig Logistica S.A., 26 NY3d 543, 547 [2015];VOOM HD Holdings LLC, 93 AD3d at 45). Plaintiff failed to rebut this presumption. Accordingly, the motion court properly determined an appropriate sanction should be imposed on plaintiff. However, the sanction must reflect “an appropriate balancing under the circumstances,” (Voom HD Holdings LLC, 93 AD3d at 47). Generally, dismissal of the complaint is warranted only where the spoliated evidence constitutes “the sole means” by which the defendant can establish its defense (Alleva v United Parcel Serv., Inc., 112 AD3d 543, 544 [1st Dept 2013]), or where the defense was otherwise “fatally compromised” (Jackson v Whitson’s Food Corp., 130 AD3d 461, 463 [1st Dept 2015]) or defendant is rendered “prejudicially bereft” of its ability to defend as a result of the spoliation (Suazo v Linden Plaza Assoc., L.P., 102 AD3d 570, 571 [1st Dept 2013] [internal quotation marks omitted]). The record upon renewal does not support such a finding, given the massive document production and the key witnesses that are available to testify, including the eight additional persons identified in the minutes, on whom Herrick had not yet served interrogatories or deposition notices at the time it filed its renewal motion. Accordingly, an adverse inference charge is an appropriate sanction under the circumstances (see id.; see also VOOM, 93 AD3d at 46-47;Ahroner v Israel Discount Bank of N.Y., 79 AD3d 481 [2010]), since it will permit the jury to: (1) find that the missing emails and other electronic records would not have supported Arbor’s position, and would not have contradicted evidence offered by Herrick, and (2) draw the strongest inference against Arbor on the issues of whether Arbor would have made the loans regardless of any potential zoning issues, and the measure of Arbor’s damages taking into account its assignment of the loans and/or failure to mitigate its damages (PJI 1:77). In addition, plaintiff shall be required to pay discovery sanctions of $10,000 to defendant Herrick, Feinstein, LLP for its failure to produce the loan committee meeting minutes until after the motion court had decided the initial spoliation motion (CPLR 3126). This court’s modification of the motion court’s order is without prejudice to Herrick seeking dismissal of the complaint or other spoliation sanctions in the future, should there be further revelations making such a motion appropriate.”

Plaintiffs, especially those who do not regularly dabble in legal malpractice tend to think that more is better…more causes of action, more theories of the case, etc.  Often these complaints have a nugget of meritorious fact, but they will be cleaned out by the court.  Such is the case in  Martin v Claude Castro & Assoc. PLLC  2016 NY Slip Op 31183(U)  June 24, 2016  Supreme Court, New York County  Docket Number: 161428/2014  Judge: Gerald Lebovits where the complaint lacks the basic “but for” allegation, yet has multiple duplicitive causes of action.  In the end the LM cause of action remains; all else is dismissed.

“Plaintiffs brought this action asserting seven causes of action – legal malpractice, breach of fiduciary duty, breach of written contract, negligence, breach of oral escrow agreement, conversion, and disgorgement of legal fees. Plaintiffs hired defendants to represent them in two summary nonpayment proceedings plaintiffs’ landlord brought against plaintiffs in 2010 in Housing Court (the L&T Matters). Defendants then advised plaintiffs to bring an action in Supreme Court, New York County, against plaintiffs’ landlord (the Supreme Court Action). Plaintiffs now claim that defendants failed adequately to defend plaintiffs’ cases in Housing and Supreme Court. Plaintiffs assert that defendants owed:a fiduciary duty to act in plaintiffs’ best interests and not to expose plaintiffs to any unnecessary risk. Plaintiffs maintain that defendants materially breached the written terms of the retainer agreement. Plaintiffs argue that defendants failed to exercise reasonable care in advising and representing plaintiffs. Plaintiffs state that defendants breached their obligation under the oral escrow agreement created by defendants to hold $93,040.00 paid by plaintiffs in the L&T Matters. Last, plaintiffs assert that defendants failed to perform the work for which they were paid. Defendants now move pre-answer to dismiss under CPLR 3211 (a) (1 ), (5), and (7). Defendants argue that documentary evidence belies plaintiffs’ claims that defendants failed to return all the escrow money. Defendants also assert that cause of actions II, III, IV, and VII should be dismissed as duplicative of the legal-malpractice claim. Defendants further argue that plaintiffs are unable to satisfy the pleading requirements to sustain their legal malpractice and breach of fiduciary duty claims. According to defendants, plaintiffs fail to show that “but for” defendants’ alleged negligence, they would have had a better result in the underlying proceedings and action. Defendants further argue that plaintiffs’ conversion claim is time barred. ”

“Plaintiffs’ landlord brought two nonpayment proceedings in Housing Court, New York County, stemming from unpaid rent for two apartments that plaintiffs had occupied. Plaintiffs retained defendants to defend them in the L&T Matters. At about the same time the L&T Matters were pending, defendants, on plaintiffs’ behalf, commenced an action in Supreme Court, New York County, Index No. 102197/10, against plaintiffs’ landlord asserting, among other things, breach of the warranty of habitability, constructive eviction, and damage to plaintiffs’ property because of an alleged bedbug infestation in plaintiffs’ apartments causing plaintiffs to vacate the premises. Plaintiffs’ alleged damages exceed $100,000. In the current action, plaintiffs allege that defendants failed to assert affirmative defenses – constructive eviction and warranty of habitability – in the L&T Matters resulting in plaintiffs’ landlord’s obtaining two judgments against plaintiffs: (1) $46,520 representing unpaid rent and (2) $37,253.03 representing the landlords’ attorney fees. By way of background, plaintiffs raised in their L&T answer affirmative defenses relating to defects in the rent demand and the petition as well as the defense of lack of personal jurisdiction. After plaintiffs’ landlord moved for summary judgment and plaintiffs cross-moved for summary judgment, Housing Court, the Hon. Brenda Spears, granted the landlord’s motion for summary judgment and dismissed plaintiffs’ affirmative defenses. When plaintiffs’ landlord obtained summary judgment in the L&T Matters, plaintiffs moved in Supreme Court to stay the Housing Court Matters and to consolidate the Housing Court Matters with the Supreme Court Action. Hon. Louis York denied plaintiffs’ motion. Judge York found that different legal issues were before the court in the various cases and therefore that consolidation was inappropriate. According to plaintiffs, defendants’ behavior had negative consequences for plaintiffs in the L&T Matters and in the Supreme Court Action. Plaintiffs allege that defendants failed to inform plaintiffs about the outstanding judgments against plaintiffs in the L&T Matters. Plaintiffs allege that defendants failed to return their phone calls and respond to correspondence. Plaintiffs allege that defendants failed to prosecute the Supreme Court Action. Plaintiffs assert that defendants failed to respond to disclosure in the Supreme Court Action and to obey court orders for disclosure. Plaintiffs also allege that, without their authority and knowledge, defendants discontinued the Supreme Court Action. According to plaintiffs, but for defendants’ behavior, plaintiffs would not have two outstanding judgments against them. Plaintiffs assert that because of the passage of time from 2011 – when the Supreme Court Action was discontinued – until now, plaintiffs no longer have access to witnesses and documents to assert a successful claim against their former landlord. Plaintiffs also contend that defendants paid money to plaintiffs’ landlord from an escrow account without plaintiffs’ knowledge and authority. At this preliminary pre-answer motion to dismiss phase, plaintiffs have asserted a cause of action for legal malpractice. A legal-malpractice claim calls for three elements: negligence of the attorney, that the negligence was the proximate cause of the damages sustained, and proof of actual damages. (Bishop v Maurer, 33 AD3d 497, 498 (1st Dept 2006).) Plaintiffs assert that but for defendants’ conduct, plaintiffs would not have lost the ability to assert warranty of habitability claim in the Supreme Court Action. Defendants argue that this was a trial-strategy choice and that trial strategies are not actionable. (Dweck Law Firm, LLP v Mann, 283 AD2d 292, 292 [1st Dept 2001].) However, it is unclear whether defendants’ failure to assert the affirmative defenses of breach of warranty of habitability and constructive eviction in the L&T Matters was litigation strategy – and therefore unactionable – or whether defendants were negligent in asserting the defenses in the L&T Matters, such that but for defendants’ negligence plaintiffs would not have incurred damages – therefore actionable. 1 This court cannot tell at this phase whether defendants intended to litigate plaintiffs’ landlord unpaid-rent claim separately from plaintiffs’ breach of warranty-of-habitability and constructive-eviction claims and whether plaintiffs understood the ramifications of that litigation decision. Also, this court cannot tell at this phase whether defendants intended to litigate all issues – unpaid rent, constructive eviction, breach of warranty of habitability, and damage to personal property – in the Supreme Court Action. Plaintiffs also assert that defendants have caused damages, namely the two judgments plaintiffs’ landlord obtained in the L&T Matters. Plaintiffs have asserted facts sufficient to allege a cause of action for legal malpractice. “