Analysis of the “but for” portion of the legal malpractice equation is the richest part of the problem.  Departures tend to be obvious or patent; how they affect the viability of the case is the “but for” portion.

Russo v Rozenholc  2015 NY Slip Op 06029 [130 AD3d 492]  July 9, 2015  Appellate Division, First Department is the story of defendant trying to dismiss the case on a bunch of arguments that plaintiff could not have won the case in any event…and that he would have lost no matter what the attorney did.  The Court disagrees, and teases out the connection between the attorney’s mistake and the bad outcome.

“In May 2006, the nonparty building owner filed an application with the Department of Housing and Community Renewal (DHCR) seeking to demolish the building located at 220 Central Park South in Manhattan and evict the tenants. As a result, a group of rent-stabilized tenants formed a tenants’ association to rebuff the building owner’s efforts. One of those tenants was plaintiff’s decedent Ronald E. Pecunies (the decedent), who lived with his girlfriend Emel Dilek in apartment 16AB—a large unit created by converting two apartments into one.

The tenants retained defendants David Rozenholc and David Rozenholc and Associates (collectively, DR&A) to represent them in the DHCR proceeding and to negotiate with the building owner. In the retainer agreement, dated April 3, 2009, the tenants represented and warranted that they had “agreed to share equally in any settlement offer made by [the owner].” The retainer agreement also stated that each apartment represented a single share, but specifically stated, “it is further agreed that [decedent], who occupies combined apartment 16 AB[,] will receive two (2) shares and agrees to pay two (2) shares of any legal fees owed.”

In April 2009, DHCR issued an order permitting the building owner to evict the tenants. In February 2010, after unsuccessfully challenging the order, DR&A commenced a CPLR article 78 proceeding on behalf of the tenants, including decedent. However, decedent died on May 22, 2010, after the commencement of the article 78 proceeding but before any settlement could be reached with the building owner. On September 24, 2010, counsel for decedent’s estate wrote to DR&A, authorizing it to continue to represent the estate’s interest. According to the estate’s counsel, this authority came from plaintiff, who was the executor of decedent’s estate.”

“The tenants and the building owner ultimately settled the article 78 proceeding for more than $33 million. At approximately the same time, plaintiff, Dilek, and the building owner, entered into an agreement, dated December 2, 2010 (the Dilek buyout agreement), in which the plaintiff recited that as executor of the estate, he had no claim to apartment 16AB after decedent died on May 22, 2010. Plaintiff also recited that Dilek had occupied apartment 16AB before decedent’s death “and succeeded to his tenancy.” The signatories to the Dilek buyout agreement agreed that in exchange for Dilek’s vacating apartment 16AB, the building owner would pay her a single share’s worth of the $33 million settlement—namely, $1,562,500 ($1,700,000 less $187,500 in counsel fees). The Dilek buyout agreement further stated that DR&A represented plaintiff and Dilek in connection with that agreement.

In February 2012, plaintiff, on behalf of decedent’s estate, commenced this action against the DR&A defendants and the defendants-tenants,[FN*] asserting two causes of action—namely, legal malpractice (against the DR&A defendants) and breach of contract (against the DR&A defendants and the defendants-tenants).

As to the legal malpractice claim, the complaint alleged that DR&A breached its duty to the estate when it failed to inform the estate that there was a retainer agreement and that the retainer agreement contained an express agreement among the tenants to “share equally” in any settlement proceeds. Likewise, the complaint alleged that DR&A breached its duty to the estate by failing to inform it that the retainer agreement explicitly recognized decedent’s right to receive the two shares of the settlement proceeds based on his occupancy of two apartments. Thus, plaintiff concluded, DR&A committed legal malpractice when it failed to advise plaintiff of the estate’s rights under the retainer and instead advised plaintiff to sign the settlement documents, thus forfeiting its right to settlement proceeds.”

“As to the breach of contract claim, the IAS court properly denied the motion to dismiss that claim. Of course, on a motion to dismiss under CPLR 3211 (a) (7), a court must determine whether the factual allegations taken as a whole manifest any cause of action cognizable at law (see Ackerman v 305 E. 40th Owners Corp., 189 AD2d 665, 666 [1st Dept 1993]).

Despite defendants-tenant’s arguments otherwise, the breach of contract cause of action is not defeated by the provisions of the Rent Stabilization Code. On the contrary, the breach of contract action against defendants-tenants rests upon plaintiff’s allegation that by the retainer agreement’s express terms, the tenants, including decedent, agreed to “pool” the money they received from the building owner—that is, to share equally in any settlement—and then pay to decedent two shares of the pooled money. Plaintiff asserts that to the extent the defendants-tenants failed to pay decedent his two shares under the retainer agreement, they are in breach of the retainer agreement, or have been unjustly enriched.

These allegations are directed specifically to defendants-tenants’ actions with respect to the money they actually received in the settlement with the building owner; this issue is separate from a tenant’s rights of succession under the Rent Stabilization Code. Whether or not the decedent had succession rights is not relevant to the allegations of the complaint at this stage of the litigation; the tenants had already received settlement money and, according to the complaint, had agreed to share it equally. Given the allegations in the complaint—namely, that defendants-tenants, contrary to their express agreement, did not share equally in the money they received in settlement, and were unjustly enriched—plaintiff has sufficiently stated a claim for breach of contract.

Likewise, there is no merit to DR&A’s argument on appeal that for the purposes of the breach of contract claim, the estate was not a signatory to the retainer agreement and therefore cannot assert decedent’s rights under that agreement. Nor is there any merit to DR&A’s argument on appeal that the estate lacks standing to assert a malpractice claim against it. On the contrary, the estate stepped into decedent’s shoes and indeed, specifically authorized DR&A to represent the estate’s interests under the retainer agreement (see generally Estate of Schneider v Finmann, 15 NY3d 306 [2010]).

DR&A makes a similarly unavailing argument that the estate’s waiver of rights to decedent’s apartment operates as a binding judicial admission and a complete bar to the action. A party asserting a waiver of rights has the burden of establishing that the purported waiver constituted an intentional, voluntary relinquishment of a known right (see Jefpaul Garage Corp. v Presbyterian Hosp. in City of N.Y., 61 NY2d 442, 446 [1984]; White v Church of Our Lady of Sorrows, 255 AD2d 109 [1st Dept 1998]). Here, plaintiff alleges that DR&A never informed it of the retainer agreement’s existence and that, had plaintiff known of the agreement, he would not have consented to a transfer of its rights to Dilek. In light of these allegations, DR&A has not met its burden on its waiver defense.

Turning now to the legal malpractice claim, we find that the motion court properly allowed the cause of action for legal malpractice to proceed. A viable claim for legal malpractice requires that a complaint allege “ ’the negligence of the attorney; that the negligence was the proximate cause of the loss sustained; and actual damages’ ” (O’Callaghan v Brunelle, 84 AD3d 581, 582 [1st Dept 2011], lv denied 18 NY3d 804 [2012], quoting Leder v Spiegel, 31 AD3d 266, 267 [2006], affd 9 NY3d 836 [2007], cert denied 552 US 1257 [2008]). Here, the logic for the [*4]legal malpractice cause of action is similar to the logic in sustaining the breach of contract claim: whether decedent had rights under the Rent Stabilization Code is beside the point for purposes of the pleadings here. The relevant issue is not whether decedent had rights to the rent-stabilized apartment but whether decedent had rights to his two shares under the retainer agreement. Indeed, plaintiff does not argue that but for DR&A’s negligence, the estate would have prevailed in the article 78 proceeding; he argues that DR&A failed to tell him about the existence of the retainer agreement and to make sure that the estate received the settlement monies to which it was entitled under the settlement agreement.”

First words out of CLE lecturers in legal malpractice settings is “Don’t sue for fees!”  Reason? Legal malpractice counterclaims.  Tarshis & Hammerman, LLP v Hartig  2016 NY Slip Op  50393(U) Decided on March 18, 2016  Appellate Term, Second Department is a prime example. (Disclosure:  Both of the plaintiff attorneys were Kings County ADAs as was I at the time)

Mother retains plaintiff law firm to defend her son in a criminal matter.  They charge $10,000 up to trial, a fairly typical fee.  They defend, and one presumes that he was still convicted (pled guilty?).  Mother paid $ 5000 to start and then would not pay the balance.  Plaintiffs got their $ 5000 but had to go through a lot of telephone calls, a summons and complaint in Civil Court, a bench trial, and an appeal to the Appellate Term.  Was that worth $ 5000?  They had to hear the mother’s grief, have her call them minimally knowledgeable about criminal law, and the such.  They may even have trouble collecting.

From the decision:  “As a matter of public policy, courts pay particular attention to fee arrangements between attorneys and their clients (see Jacobson v Sassower, 66 NY2d 991, 993 [1985]), and the reasonableness of attorney’s fees is always subject to court scrutiny (see Matter of Bizar & Martin v U.S. Ice Cream Corp., 228 AD2d 588 [1996]).

The retainer agreement signed by defendant set forth “the scope of the representation and [*2]the basis or rate of the fee and expenses for which the client will be responsible” (Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.5 [b]), i.e., that defendant would be responsible for paying plaintiff the sum of $10,000, which would cover any legal services rendered by plaintiff in the criminal matter up until trial. The agreement was not ambiguous, and plaintiff demonstrated that substantial legal services had been rendered in the criminal matter resulting in a disposition before trial. In light of Hammerman’s testimony regarding the work he had performed, the nature of the issues involved in the case, the skill required to handle those issues and the results obtained (see Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.5 [a]), we find that the amount charged was reasonable. In view of the foregoing, the Civil Court did not err in awarding plaintiff the remaining balance due under the retainer agreement and in dismissing defendant’s counterclaims.

Although defendant contends that she was not able to adequately defend herself at trial, the record indicates the contrary. While she admits that she did not ask the court for an adjournment, she argues that, since she is not an attorney, she is entitled to a new trial. Her status as a self-represented litigant, however, does not entitle her to greater rights than any other litigant (see Roundtree v Singh, 143 AD2d 995 [1988]).”

Cusimano v Schnurr  2016 NY Slip Op 01758  Decided on March 15, 2016 Appellate Division, First Department is a case of husband and wife versus Wife’s father and sister, and in true NY fashion, its all about real estate.

“As a brief summary, this case involves a series of disputes among family members who own a group of real estate businesses. Plaintiffs Rita Cusimano and Dominic J. Cusimano are husband and wife, and intervenors Bernard V. Strianese and Bernadette Strianese are Rita’s father and sister respectively. Rita and the Strianeses own or formerly owned, in various degrees, certain entities that invest in commercial real estate. Defendants Andrew V. Schnurr, CPA and Michael Gerard Norman, CPA are certified public [*2]accountants who, along with Michael Gerard Norman, CPA, P.C., Norman’s accounting firm (collectively, the accountants), are alleged to have provided accounting and tax services to plaintiffs and the various entities. The first entity is the Strianese Family Limited Partnership (FLIP), which had owned commercial property in Deer Park, New York, and now owns commercial property in Florida leased to a CVS Drug Store. The second entity is Berita Realty, LLC (Berita), which owns an interest in an entity that owns a Marriott Hotel in New York State. The third consists of two entities known collectively as the Seaview Corporations (Seaview), which own two commercial buildings in New York State.”

Read through the decision to see how a family tears itself apart.  For our purposes, two bedrock principles emerge:  the statute of limitations for breach of fiduciary duty and how accounting statutes of limitation are calculated.

“Contrary to the motion court’s conclusion, we find that a six-year statute of limitations applies to the breach of fiduciary duty claims against Bernard, Bernadette, and the Norman defendants (and to the aiding and abetting breach of fiduciary duty against the Norman defendants). In Kaufman v Cohen (307 AD2d 113, 118 [1st Dept 2003]), this Court explained that the applicable statute of limitations for breach of fiduciary duty depends upon the substantive remedy sought. Where the relief sought is equitable in nature, the six-year limitations period of CPLR 213(1) applies, but if the claim is for monetary relief, a three-year limitations applies (see Kaufman at 118).

“Nevertheless, . . . a cause of action for breach of fiduciary duty based on allegations of actual fraud is subject to a six-year limitations period” (id. at 119, citing Goldberg v Schuman, 289 AD2d 8 [1st Dept 2001]; Matter of Kaszirer v Kaszirer, 286 AD2d 598, 598-599 [1st Dept 2001]; Heffernan v Marine Midland Bank, 283 AD2d 337, 338 [1st Dept 2001]; Unibell Anesthesia v Guardian Life Ins. Co. Of Am., 239 AD2d 248 [1st Dept 1997]). An exception to this rule exists ” if the fraud allegation is only incidental to the claim asserted'” (Kaufman at 119, quoting Powers Mercantile Corp. v Feinberg, 109 AD2d 117, 120 [1st Dept 1985], affd 67 NY2d 981 [1986]). Thus, “where an allegation of fraud is not essential to the cause of action pleaded except as an answer to an anticipated defense of Statute of Limitations, courts look for the reality, and the essence of the action and not its mere name” (Kaufman at 119 [internal [*3]quotation marks omitted]).

Here, although the fiduciary duty claims seek monetary relief, the six-year limitations period applies because the claims sound in fraud. Plaintiffs alleged that the accountants and Bernard and Bernadette induced Rita to sell her stake in Seaview below the fair market value of the interest. Plaintiffs also alleged that with regard to Berita, the accountants and Bernard and Bernadette conspired to falsify tax filings so that plaintiffs incurred phantom taxes and the inability to claim losses in some years. In addition, plaintiffs alleged the accountants and Bernard and Bernadette created fraudulent promissory notes that appear to have gutted Berita of its equity. Further, plaintiffs alleged with regard to FLIP, the accountants and Bernard and Bernadette engaged in similar acts of tax fraud resulting in similar consequences for plaintiffs. Plaintiffs also alleged that the accountants and Bernard and Bernadette forged Rita Cusimano’s signature of checks and bank documents to move funds out of the companies.

These allegations, which sound in fraud, are not merely incidental to the breach of fiduciary duty claims, and thus, the applicable limitations period for plaintiffs’ breach of fiduciary claims is six years (see Kaufman at 119-121; see e.g. AQ Asset Mgt., LLC v Levine, 119 AD3d 457 [1st Dept 2014] [claims that defendant deceived sellers into signing the stock and sales proceeds distribution, and failing to disclose and misrepresenting full benefits accruing to defendant, including defendant’s personal interest in the sale proceeds, were sufficient to allege fraudulent conduct that defendant breached his fiduciary duty as to warrant a six-year limitations period]; New York State Workers’ Compensation Bd. v Consolidated Risk Servs., Inc., 125 AD3d 1250 [3d Dept 2015] [breach of fiduciary duty claim is subject to a six-year limitations period despite not seeking equitable relief, because defendants breached their fiduciary duties to the trusts by fraudulently concealing or misrepresenting the financial condition of the trusts]; Monaghan v Ford Motor Co., 71 AD3d 848 [2d Dept 2010] [breach of fiduciary cause of action against defendant stated an actual claim of fraud, which was not merely incidental to the breach of fiduciary duty claim and was subject to six-year statute of limitations]; Klein v Gutman, 12 AD3d 417 [2d Dept 2004] [cause of action alleging breach of fiduciary duty was based on allegations of actual fraud, and the applicable statute of limitations was six years]).”

Statute of limitations

“Plaintiffs’ argument that their accounting malpractice claims against the Norman defendants are tolled because of the continuous representation doctrine also is unavailing. Plaintiffs’ allegations that the Norman defendants continued to provide accounting and tax services for the relevant entities and individuals amount to nothing more than a series of discrete and severable transactions, and are not sufficient enough to toll the running of the statute of limitations (see Booth v Kriegal, 36 AD3d 312 [1st Dept 2006]; see also Williamson v PricewaterhouseCoopers LLP, 9 NY3d 1 [2007]).”

Davis v Cohen & Gresser LLP  2016 NY Slip Op 50417(U)  Decided on March 24, 2016
Supreme Court, New York County  Ramos, J. presents a most complicated intertwined issue of tolling, statutes of limitation, successor-attorney problem, onset of statute issues, along with the Mental Health Law and guardianships.

The simple story is that Plaintiff became a judgment creditor or decedent after a fraudster tricked decedent and his companies into loaning millions, only to lose it.  Plaintiff obtained the judgment based upon guarantees, went after the fraudster, and then the entire case was lost.

The facts are too complicated to summarize in a blog entry.  The take away is that in legal malpractice, every element of every cause of action must be analyzed to determine whether it is timely, whether there are “but for” problems, and which of the attorneys might be liable.

As a small taste, we present the following:

“An action to recover damages arising from an attorney’s malpractice must be commenced within three years from accrual. A legal malpractice claim accrues when all facts necessary to the cause of action have occurred and an injured party can obtain relief in court (CPLR 214 [6]; McCoy v Feinman, 99 NY2d 295, 300-01 [2002]).

The death of a client severs the attorney-client relationship (Pace v Raisman & Assoc., Esq., LLP, 95 AD3d 1185 [2d Dept 2012]). Thus, a legal malpractice claim commenced more than three years after the client’s death is untimely as a matter of law (Id.). CRA died on March 9, 2011, and thus, the latest time that the malpractice claim could have accrued is at that time, which is more than three years before the instant action was commenced, on August 12, 2014. Because CG has demonstrated that the claim is untimely, the burden shifts to plaintiff to establish an exception to the applicable statute of limitations period (TIAA Global Invs., LLC v One Astoria Sq. LLC, 127 AD3d 75, 97-98 [1st Dept 2015]).

Plaintiff unpersuasively argues that the continuous representation doctrine tolls the limitations period. The “toll ceases to be operative when the representation in the particular matter comes to an end” (Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C214.6, at 168 [2003 ed]). As stated supra, the death of CRA in March 2011 severed the attorney-client relationship with CG and thus, the doctrine of continuous representation cannot apply.

Moreover, application of the doctrine of continuous representation is limited to those situations where the attorney continues to represent the client in the same matter in which the malpractice occurred, and the parties had a “mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim” (McCoy, 99 NY2d at 305-06).

Plaintiff’s allegations that CG led Luke to believe that it was representing the estate in the RICO action is belied by the relevant retainer agreements and court dockets from the time period at issue. The retainer agreements amongst the parties show that CG represented CRA, by Luke as his guardian, in the RICO case before CRA’s death. The 2008 retainer agreement was between CG and Luke, as CRA’s guardian; Luke’s authority as guardian expired at CRA’s death (see discussion below). After CRA’s death, CG represented the estate in the Excelsior action, and CG represented the estate in connection with the federal investigation of Devine pursuant to the 2011 retainer agreement. In the 2011 retainer agreement (which pertains to the federal investigation of Devine), it specifically states that the engagement of CG “does not encompass, nor does it engage the Firm to represent [Grace, CRA’s executrix] or the Estate of [CRA] in any matter not specifically described herein” (Exhibit I, annexed to the Stanley Aff.).

CG’s only role in the RICO action following CRA’s death was to represent Luke in his individual capacity as a third party defendant (Exhibit A, annexed to the Stanley Aff.). On March 17, 2011, CG filed a Suggestion of Death Upon the Record in the RICO [*4]action as the “Former Attorneys for C. Robert Allen, III” (emphasis added). On June 15, 2011 (the same date that the estate entered into the 2011 retainer agreement with CG with respect to the federal Devine investigation), the estate, represented by Reed P. Whitemore, Esq., moved to be substituted as plaintiff in the RICO action (Exhibit D, annexed to the Stanley Aff.). In December 2011 and April 2012, Farrell Fritz, P.C. and Camplo, Middleton & McCormick, L.L.P. also appeared on the estate’s behalf in the RICO action (Exhibit A, annexed to the Stanley Aff.). CG never formally appeared in the RICO action on behalf of the estate following CRA’s death. To the extent that the 2008 retainer agreement articulated a broader scope of representation on CG’s part and on CRA’s behalf, this representation ended at CRA’s death, in March 2011.”

Attorney is retained to handle a specific task.  Attorney handles that task.  That’s the end of that particular job.  Related complications arise later.  Plaintiff consults with the attorney on the issue, but the attorney is not retained to represent either party in the complications.  How does “continuing representation” handle this situation?

Mahran v Berger  2016 NY Slip Op 02187  Decided on March 25, 2016  gives some direction on how the Appellate Division, Fourth Department views this question.

“In late 2004, plaintiff Khalid S. Mahran (Mahran) offered a doctor, who was completing her residency, an opportunity to join his medical practice, plaintiff Kidney Care, P.C. The doctor, a noncitizen of the United States, subsequently entered into a retainer agreement with defendant for the purpose of obtaining legal assistance in acquiring certain immigration documents that would permit her to practice medicine in the United States. Defendant, among other things, filed an application for the immigration documents, stating that he represented the doctor as the prospective employee and plaintiffs as the sponsoring employer. The application was approved on November 7, 2005. At some point, a dispute arose between Mahran and the doctor over the terms of their employment agreement. When the dispute arose, the doctor’s employment with plaintiffs was jeopardized and, consequently, so was her immigration status. Defendant ultimately obtained government approval allowing the doctor to secure employment at a hospital in another state. Plaintiffs commenced this action on November 26, 2008, alleging that defendant committed legal malpractice and breach of contract. We conclude that Supreme Court properly granted defendant’s motion for summary judgment dismissing the complaint.”

“With respect to the cause of action for legal malpractice, we further conclude that the court properly granted that part of the motion seeking summary judgment dismissing it on the ground that it was time-barred. “A cause of action for legal malpractice accrues when the malpractice is committed” (Priola v Fallon, 117 AD3d 1489, 1489 [internal quotation marks omitted]), and must be interposed within three years thereafter (see CPLR 214 [6]; McCoy v Feinman, 99 NY2d 295, 301). Even assuming, arguendo, that there is no question of fact with respect to the existence of an attorney-client relationship between defendant and plaintiffs, we conclude that defendant established that any malpractice occurred, at the latest, on November 7, 2005, when his representation of plaintiffs ceased upon his successful completion of the specific task for which he was initially retained, i.e., acquiring the immigration documents necessary for [*2]the doctor to commence employment with plaintiffs (see Priola, 117 AD3d at 1489; International Electron Devices [USA] LLC v Menter, Rudin & Trivelpiece, P.C., 71 AD3d 1512, 1512). Defendant thus met his initial burden of establishing that this action, commenced on November 26, 2008, was time-barred (see International Electron Devices [USA] LLC, 71 AD3d at 1512).”

“Indeed, despite Mahran’s assertions, his unilateral belief that defendant continued to represent plaintiffs after the immigration application process was completed is insufficient to establish the existence of a continuing relationship (see Chinello v Nixon, Hargrave, Devans & Doyle, LLP, 15 AD3d 894, 895). Although the completion of that process provided the prerequisite conditions for the doctor’s employment, the dispute that arose between Mahran and the doctor with respect to the employment agreement constituted a separate contractual matter concerning those parties only, and we conclude that any evidence of subsequent contact between defendant and Mahran with respect to that dispute is not indicative of a continuing attorney-client relationship, and thus is insufficient to raise an issue of fact (see M.G. McLaren, P.C., 51 AD3d at 878). To the extent that plaintiffs contend that the statute of limitations should be tolled during the period of defendant’s continuing representation of the doctor, that contention is without merit (see Glamm v Allen, 57 NY2d 87, 94; TVGA Eng’g, Surveying, P.C. v Gallick [appeal No. 2], 45 AD3d 1252, 1257). We thus conclude that, “[i]nasmuch as the attorney-client relationship between plaintiff[s] and [defendant] ended more than three years before the action was commenced, the cause of action for legal malpractice was untimely” (TVGA Eng’g, Surveying, P.C., 45 AD3d at 1257).”

The proper response is admissible evidence to show that client timely objected and even better, to show that the attorneys made significant mistakes.  This is exactly what happened in Jaspan Schlesinger, LLP v Neuberg   2016 NY Slip Op 02057  Decided on March 23, 2016 Appellate Division, Second Department.  The Second Department does not take the time to outline what the appropriate penitentiary proffer might be.

“In this action to recover payment for legal services rendered by the plaintiff law firm to the defendants, the plaintiff demonstrated its prima facie entitlement to judgment as a matter of law on the causes of action to recover damages for breach of contract and on an account stated, and dismissing the defendants’ counterclaim, alleging legal malpractice, by submitting, inter alia, the parties’ retainer agreement, periodic invoices sent by the plaintiff to the defendants, and the affirmation of its managing partner (see Alvarez v Prospect Hosp., 68 NY2d 320, 324; Morrison Cohen Singer & Weinstein v Ackerman, 280 AD2d 355, 356). However, in opposition to the motion, the defendants submitted the affidavit of the defendant David Neuberg and certain documentary evidence which raised triable issues of fact as to whether the plaintiff committed legal malpractice in representing the defendants, and as to whether the defendants timely objected to the propriety of certain invoices they received. Under these circumstances, the Supreme Court properly denied the plaintiff’s motion for summary judgment on the complaint and dismissing the defendants’ counterclaim, alleging legal malpractice, and noted that discovery in the action is necessary (see e.g. Nowacki v Metropolitan Life Ins. Co., 242 AD2d 265, 266; Pastoriza v State of New York, 108 AD2d 605, 607).”

Oliveto Holdings, Inc. v Denis W. Light, PLLC  2016 NY Slip Op 02063  Decided on March 23, 2016  Appellate Division, Second Department  decided yesterday is a case much more complicated than the Second Department decision suggests, In the  Supreme Court decision and order  the court recognizes that there was a foreclosure action started and lost at trial, then reversed on appeal.  The reversal on appeal set up the legal malpractice case.

There are two lines of argument on when a legal malpractice action commences.  One is the traditional “date of the mistake” commencement and one recognizes that as of the date of the mistake not all the elements of legal malpractice yet exist, as in Ackerman v. Price Waterhouse.  There, the standard is when all of the elements exist so as to make out a prima facie case of legal malpractice and “an injured party can obtain relief in court.”  In Ackerman, an IRS assessment came more than three years after the mistake in filing.

Here, the Court simply says that more than three years has passed.  It wrote: “The defendants demonstrated, prima facie, that the plaintiff’s legal malpractice cause of action accrued more than three years prior to the time this action was commenced. In opposition, the plaintiff failed to raise a question of fact (see CPLR 214[6]; Benjamin v Allstate Ins. Co., 127 AD3d 1120; Landow v Snow Becker Krauss, P.C., 111 AD3d 795; Elstein v Phillips Lytle, LLP, 108 AD3d 1073;DeStaso v Condon Resnick, LLP, 90 AD3d 809; McCormick v Favreau, 82 AD3d 1537). Accordingly, the Supreme Court properly granted the defendants’ motion pursuant to CPLR 3211(a)(5) to dismiss the complaint on the ground that it was barred by the applicable statute of limitations.”

For the most part, in a legal malpractice setting, claims for Breach of Contract or Fraud are viewed as vestigial hangers-on to the most important part of the animal, the LM claim.  For the most part, that analysis is correct.  The Breach of Contract, or Breach of Fiduciary Duty or Fraud claims are generally restatements of the failure to adhere to a standard, with damages arising from the central loss in the case, whether it is a cause of action, or a contract, etc.

Here, in Stewart v Berger   2016 NY Slip Op 02072  Decided on March 23, 2016   the Appellate Division, Second Department recognizes a truly non-duplicitive claim.  After plaintiff failed to oppose the motion, Supreme Court accepted the excuse (law office failure) but dismissed anyway, on the basis that the dismissed claims were duplicitive.

“The second cause of action sought to recover damages for breach of fiduciary duty. Contrary to the plaintiff’s contention, the Supreme Court properly determined that the three-year limitations period of CPLR 214(6), rather than the six-year limitations period of CPLR 213(1), applied to this cause of action and that it was, therefore, time-barred (see IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d 132, 139-140; Elmakies v Sunshine, 113 AD3d 814, 815; cf. Loeuis v Grushin, 126 AD3d 761, 764). Since the plaintiff failed to demonstrate a potentially meritorious opposition to that branch of the defendants’ motion, the Supreme Court properly declined to vacate so much of the June order as directed the dismissal of the second cause of action (see generally Glauber v Ekstein, 133 AD3d at 713; U. Joon Sung v Feng Ue Jin, 127 AD3d 740, 741).

The Supreme Court also properly declined to vacate so much of the June order as directed the dismissal of so much of the complaint as sought punitive damages. Contrary to the plaintiff’s contention, the complaint failed to set forth any facts or allegations to support his contention that the defendants committed a fraud “evincing a high degree of moral turpitude, and demonstrating such wanton dishonesty as to imply a criminal indifference to civil obligations . . . where the conduct [is] aimed at the public generally” (Reads Co., LLC v Katz, 72 AD3d 1054, 1057 [internal quotation marks omitted]; see O’Keefe v Allstate Ins. Co., 90 AD3d 725, 726-727; Flores-King v Encompass Ins. Co., 29 AD3d 627, 627). Accordingly, the plaintiff failed to demonstrate a potentially meritorious opposition to that branch of the defendants’ motion.

However, the Supreme Court erred in declining to vacate so much of the June order as directed the dismissal of the third cause of action, alleging breach of contract, as time-barred. The plaintiff proffered a meritorious opposition to this branch of the defendants’ motion. The third cause of action alleged that the defendants charged the plaintiff excessive fees in violation of the express terms of the parties’ retainer agreement, stating a contract claim subject to the six-year limitations period of CPLR 213(2). Contrary to the defendants’ contention, the three-year limitations period of CPLR 214(6) for legal malpractice claims does not apply here because the plaintiff made no claim that the defendants deviated from accepted standards of legal practice in the handling of his legal matters (see Postiglione v Castro, 119 AD3d 920, 922; Loria v Cerniglia, 69 AD3d 583, 583; see generally Estrada v Selman, 130 AD3d at 563; Rockland Tr. Mix, Inc. v Rockland Enters., Inc., 28 AD3d 630, 630-631).

Similarly, the Supreme Court erred in declining to vacate so much of the June order as directed the dismissal of the fourth cause of action, alleging fraud, as time-barred. The plaintiff [*3]proffered a meritorious opposition to this branch of the defendants’ motion, demonstrating that this cause of action did not arise from the same facts as the legal malpractice cause of action, and that the complaint alleged distinct damages. Thus, the six-year limitations period of CPLR 213(8) for fraud claims applies, rather than the three-year limitations period of CPLR 214(6) (see Minsky v Haber, 74 AD3d 763, 764; see generally Estrada v Selman, 130 AD3d at 563; Rockland Tr. Mix, Inc. v Rockland Enters., Inc., 28 AD3d at 630-631).