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).

In matrimonial litigation, cases routinely end with an in-court settlement which includes an allocution of the parties.  Husband and wife are both asked whether they understand the settlement, and importantly, whether they “are satisfied with the work of their attorney.”  In a line of cases the First Department has writeen (as in Harvey v. Greenberg) : “The trial judge in the underlying matrimonial action conducted a thorough allocution on the stipulation of settlement. Plaintiff acknowledged that she understood and agreed with the terms of the settlement and knew that it was a full and final agreement. She further stated that her attorney had answered her questions and that she was satisfied with the services he provided. Under these circumstances, the motion court properly dismissed the complaint (see Weissman v Kessler, 78 AD3d 465 [2010]; Katebi v Fink, 51 AD3d 424 [2008]).

Today, it decided differently in Tuppatsch v LoPreto  2016 NY Slip Op 02034  Decided on March 22, 2016  Appellate Division, First Department.

“Defendant moved to dismiss plaintiff’s malpractice claim, based on the express terms of the settlement agreement, in which plaintiff acknowledged that she was apprised of her rights and that she was not entering into the settlement agreement under duress. In opposition to defendant’s motion, plaintiff submitted her affidavit and several emails between the parties, in which plaintiff complains about defendant’s representation of her during settlement negotiations and defendant urges plaintiff to settle the matter and contemplates withdrawal as counsel.

Under the circumstances, the motion court correctly sustained the first cause of action because plaintiff has properly pleaded a cause of action for legal malpractice (see Fielding v Kupferman, 65 AD3d 437 [1st Dept 2009]). Her affidavit and attached emails are sufficient to support her allegations (see generally Global Bus. Inst. v Rivkin Radler LLP, 101 AD3d 651, 651 [1st Dept 2012]).”

From time to time the appellate divisions decide cases and introduce “stray” or previously unstated standards.  Whether this is merely a “restatement” of a previously enunciated standard of when the 487 claim may be brought in a new proceeding versus when it must be brought in the underlying proceedings is up in the air.  Previously, it appeared that the standard was whether the 487 claim attempted to undo a judgment or decision in the underlying case as against trying to obtain damages from the law firm because of its deceit in the underlying case.  Nevertheless, Little Rest Twelve, Inc. v Zajic  2016 NY Slip Op 01767  Decided on March 15, 2016  Appellate Division, First Department uses new and untested language.

“Order, Supreme Court, New York County (Marcy S. Friedman, J.), entered December 11, 2014, which, to the extent appealed from, granted third-party defendants’ motion to dismiss the third-party complaint with prejudice, and declined to disqualify third-party defendants as plaintiff’s counsel, unanimously modified, on the law, to make the dismissal without prejudice, and otherwise affirmed, without costs.

As discussed below, the motion to dismiss the third-party complaint was correctly granted. However, since it is based on a failure to state a cause of action, the dismissal should be without prejudice to apply upon a proper showing for leave to plead again (Morpheus Capital Advisors LLC v USB AG, 105 AD3d 145, 154 [1st Dept 2013], revd on other grounds 23 NY3d 528 [2014]).

Third-party plaintiffs fail to allege a duty owed them by third-party defendants that would support a claim for contribution or indemnification (see Raquet v Braun, 90 NY2d 177, 183 [1997]; Garrett v Holiday Inns, 86 AD2d 469, 471 [4th Dept 1982], mod on other grounds 58 NY2d 253 [1983]).

In support of the claim alleging a violation of Judiciary Law § 487, the third-party complaint contains no nonconclusory allegations that the alleged misconduct was “merely a means to the accomplishment of a larger fraudulent scheme” (Newin Corp. v Hartford Acc. & Indem. Co., 37 NY2d 211, 217 [1975]) “greater in scope than the issues determined in the prior proceeding” (Specialized Indus. Servs. Corp. v Carter, 68 AD3d 750, 752 [2d Dept 2009] [internal quotation marks omitted]). Thus, the claim is not properly asserted in this action but would be appropriately raised in the still pending underlying action, where the alleged [*2]misconduct occurred (see Seldon v Spinnell, 95 AD3d 779 [1st Dept 2012], lv denied 20 NY3d 857 [2013]; Melnitzky v Owen, 19 AD3d 201 [1st Dept 2005]).”

Legal malpractice litigation gets a bad name when critics can point to cases such as Lipin v Hunt
2016 NY Slip Op 01746  Decided on March 10, 2016  Appellate Division, First Department. More like Moby Dick than reasoned litigation, Plaintiff ends up prevented from starting any new cases about her father’s estate.  How did the litigants get here?

“The Supreme Court properly dismissed the complaint without leave to replead. In relevant part, the court properly dismissed claims against defendant Danske Bank as barred by res judicata (Matter of Josey v Goord, 9 NY3d 386, 389-390 (2007]; Marinelli Assoc. v Helmsley-Noyes Co., 265 AD2d 1, 5-6 [1st Dept 2000]; see also Smith v Russell Sage Coll., 54 NY2d 185, 192 [1981]). Plaintiff has repeatedly unsuccessfully litigated, or could have litigated, the claims she asserts against Danske Bank, which relate to the disputed coin collection and administration of her father’s estate (see Lipin v Hunt, __ F Supp 2d __, 2015 WL 1344406, *2, 2015 US Dist LEXIS 35700, *7-9 [SD NY 2015]).

The Supreme Court also properly dismissed claims against Judge Mazziotti on res judicata grounds. Plaintiff previously sued Mazziotti in Maine, and her suit was dismissed because her claims were based on actions Mazziotti had taken in his judicial capacity, for which he was “absolutely immune from suit” (Lipin v Ellis, __ F Supp2d __, 2007 WL 2198876, *9, 2007 US Dist LEXIS 54489, *32 [D Me July 26, 2007], affd __ F Supp2d __, 2007 WL 2701493, 2007 US Dist LEXIS 67417 [D Me Sept. 10, 2007], affd Lipin v Ellis, __ F3d __, 2008 US App LEXIS 28002 [1st Cir 2008]; see also Rosenstein v State of New York, 37 AD3d 208 [1st Dept 2007]). Plaintiff’s claims in the instant suit similarly arise from Mazziotti’s conduct as a judge who presided over proceedings regarding her deceased father’s estate in Maine.

The court properly dismissed claims alleging a violation of Judiciary Law § 487 and related attorney misconduct against defendant attorneys Mark. K. Anesh, David A. Berger, and Berger’s firm Allegaert Berger & Vogel LLP, who represented various defendants in prior suits brought by plaintiff, because plaintiff’s allegations were based on statements that were [*2]”absolutely privileged,” i.e., they were made in the course of judicial proceedings, and were material and pertinent to the issue to be resolved in those proceedings (Bisogno v Borsa, 101 AD3d 780, 781 [2d Dept 2012]). To the extent that plaintiff challenges dismissal of her claims alleging that Anesh violated criminal laws, those claims were properly dismissed for lack of standing, since “the district attorney [] generally retains sole authority to prosecute such criminal activity (Kinberg v Kinberg, 48 AD3d 387, 387 [1st Dept 2008], lv denied 11 NY3d 702 [2008]). The same is true to the extent that she asserts claims against Francis J. Earley, counsel for Danske Bank, who is not a named defendant in the action.

In light of defendants’ timely pre-answer motions to dismiss, plaintiff was not entitled to default judgments against any defendants (see CPLR 3012[a]; CPLR 3211[f]).

Finally, in light of plaintiff’s seemingly endless pursuit of the same frivolous claims in numerous courts, the court properly enjoined her from commencing any further actions without prior court approval (Bikman v 595 Broadway Assoc., 88 AD3d 455 [1st Dept 2011], lv denied 21 NY3d 856 [2013]; Jones v Maples, 286 AD2d 639 [1st Dept 2001], lv dismissed 97 NY2d 716 [2002]; see alsoLipin v Hunt, __ F Supp 2d __, 2015 WL 1344406, *1 n 1, *11, 2015 US Dist LEXIS 35700, *2-5 n 1, *35-36 [SD NY 2015] [listing over 10 suits commenced by plaintiff relating to her late father’s estate or its administration]).

OK, the title to this blog entry is a tad cynical, but what other course might plaintiffs in this case have had.  They purchased a residential property on Clinton Street in Brooklyn.  Let’s assume its a town house in Brooklyn Heights, and they spent, perhaps $ 5 million.  Then they discover that the prior seller had encumbered the property with a conservation easement in favor of a third party. That probably meant that they could not build an extension on the town house.  The seller lied! Their attorney did not pick up on the problem.  What to do?

Schottland v Brown Harris Stevens Brooklyn, LLC  2016 NY Slip Op 01823  Decided on March 16, 2016  Appellate Division, Second Department tells us that while it is difficult to sue the attorney, and the court will dig deep to reason out why/how the attorney might not be responsible, there are appropriate defendants left in the case.

“In 2010, the plaintiffs purchased a residential property located on Clinton Street in Brooklyn. After the sale, they discovered that the sellers had previously encumbered the property with a conservation easement in favor of a third party. The plaintiffs then commenced this action against, among others, their own attorney and the sellers, inter alia, to recover damages for legal malpractice. They moved for summary judgment on their cause of action alleging legal malpractice, and the Supreme Court denied the motion.”

“In order to sustain a legal malpractice cause of action, a plaintiff must prove “that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession’ and that the attorney’s breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages” (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442, quoting McCoy v Feinman, 99 NY2d 295, 301; see Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 49-50; Dombrowski v Bulson, 19 NY3d 347, 350). “To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence” (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442; see Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d at 50; Greene v Sager, 78 AD3d 777, 778).”

But, from the companion case: “This action arises out of the sale in 2010 of a residential property located on Clinton Street in Brooklyn, by the defendants third-party plaintiffs, Jenny Netzer and Carol R. Nezter (hereinafter together the sellers), to the plaintiffs. The deed for the property delivered to the plaintiffs contained a covenant against grantor’s acts, pursuant to which the sellers asserted that they had not done anything to encumber the property in any way (cf. Real Property Law § 253[6]). The deed did not acknowledge the existence of a conservation easement on the property which the sellers had previously executed in favor of a third party. The plaintiffs subsequently commenced this action against, among others, the sellers. The only cause of action remaining against the sellers alleges breach of the covenant against grantor’s acts set forth in the sellers’ deed to the plaintiffs (see Schottland v Brown Harris Stevens Brooklyn, LLC, 107 AD3d 684).

The sellers commenced a third-party action against the third-party defendant, Timothy M. Costello, the attorney who represented them with regard to the sale of the subject property and who drafted the deed. The third-party complaint asserted causes of action to recover from Costello any sum which the plaintiffs may recover against them in the main action on theories of common-law contribution and indemnification. Costello moved to dismiss the third-party complaint pursuant to CPLR 3211(a), and the Supreme Court denied the motion.”

“”[P]urely 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 NY2d 21, 26, quoting CPLR 1401). CPLR 1401 does not apply to a breach of contract cause of action where the only potential liability to the plaintiff is for the contractual benefit of the bargain (see Sommer v Federal Signal Corp., 79 NY2d 540, 557; Board of Educ. of Hudson City School Dist. v Sargent, Webster, Crenshaw & Folley, 71 NY2d at 28; Sound Refrig. & A.C., Inc. v All City Testing & Balancing Corp., 84 AD3d 1349, 1350). In the main action, the plaintiffs’ potential recovery against the sellers is limited to the purely economic loss, if any, resulting from the sellers’ alleged breach of the covenant against grantor’s acts by encumbering the property with a conservation easement (see McGuckin v Milbank, 152 NY 297, 302; 487 Elmwood v Hassett, 161 AD2d 1171; Nuzzo v Thornwood Acres B, 18 AD2d 1000). Consequently, the sellers cannot maintain a cause of action against Costello for contribution (see Children’s Corner Learning Ctr. v A. Miranda Contr. Corp., 64 AD3d 318, 324; Trump Vil. Section 3 v New York State Hous. Fin. Agency, 307 AD2d 891, 897; Rothberg v Reichelt, 270 AD2d 760, 762).

Common-law or implied indemnification ” permits one who has been compelled to pay for the wrong of another to recover from the wrongdoer the damages it paid to the injured party'” (Tiffany at Westbury Condominium v Marelli Dev. Corp., 40 AD3d 1073, 1077, quoting 17 Vista Fee Assoc. v Teachers Ins. & Annuity Assn. of Am., 259 AD2d 75, 80; see Bivona v Danna & Assoc., P.C., 123 AD3d 956, 957; Bedessee Imports, Inc. v Cook, Hall & Hyde, Inc., 45 AD3d 792, 796). However, in this case, any potential liability of the sellers in the main action would be the result of their own affirmative act of encumbering the property with a conservation easement in 2002, rather than Costello’s alleged negligent drafting of the deed. Since the sellers do not allege that Costello played any role in the conveyance of the conservation easement, which is the basis for their potential liability, the third-party complaint does not adequately plead a cause of action for common-law indemnification against him.

Finally, despite the sellers’ assertions to the contrary, the third-party complaint seeks recovery against Costello upon a theory sounding largely in legal malpractice. To the extent that it does, Costello demonstrated that any claim for legal malpractice would be time-barred by the expiration of the applicable statute of limitations (see CPLR 214[6]).”

This case is puzzling. Manhattan Sports Rests. of Am., LLC v Lieu  2016 NY Slip Op 01617
Decided on March 8, 2016  Appellate Division, First Department First, the attorneys.  Both plaintiff’s and defendant’s law firms are unusual for a case of this type.  Second, the facts are bizarre.

“Order, Supreme Court, New York County (Peter H. Moulton, J.), entered September 11, 2014, which, to the extent appealed from as limited by the briefs, denied defendant’s motion to dismiss the causes of action for tortious interference with business relations, trespass to land, trespass to chattels, violation of the New York City Human Rights Law, and fraud, and granted the motion as to the causes of action for conversion and violation of Judiciary Law § 487, unanimously affirmed, without costs.  Even more interesting is the comments made by an attorney and the Court’s dismissal of the JL cause of action.

The complaint states a cause of action for tortious interference with economic relations by alleging a course of conduct on defendant’s part that seemed designed to sabotage plaintiff’s restaurant business, which had come about through a sublease with nonparty RCSH, LLC, and that defendant’s alleged conduct was a significant factor in plaintiff’s decision to terminate the sublease (see e.g. Amaranth LLC v J.P. Morgan Chase & Co., 71 AD3d 40, 47 [1st Dept 2009], lv dismissed in part, denied in part 14 NY3d 736 [2010]).

The complaint states causes of action for trespass to land and trespass to chattels, arising, in part, from defendant’s conduct in preventing plaintiff from moving out of the premises, since that led to the spoiling of certain perishable items (see “J. Doe No. 1” v CBS Broadcasting Inc., 24 AD3d 215 [1st Dept 2005]). However, these allegations do not state a conversion claim since it is not alleged that defendant exercised dominion and control over the perishables (see Colavito v New York Organ Donor Network, Inc., 8 NY3d 43, 49-50 [2006]).

“Defendant’s alleged statement that she did not want “ghetto people from the Bronx” congregating in a sports bar in the building is sufficient to support a claim for violation of New York City Human Rights Law, as is her alleged prohibition against black employees taking breaks outside the premises (see Administrative Code of City of NY § 8-107[5][b][2]).

The Judiciary Law § 487 claim was correctly dismissed since, although defendant is an attorney, her affidavits were those of a fact witness, not counsel (see e.g. Oakes v Muka, 56 [*2]AD3d 1057, 1058 [3d Dept 2008]).”

Legal malpractice is the child of medical malpractice.  It seems that attorneys (long, long ago) helped forge the concept of professional responsibility for poor medical care, well before the same analysis was applied to legal care.  Long ago the quality of medical care varied widely between communities, and the “locality rule” was applied, so that courts measured the work of a doctor against a standard of local medical care.  The worry for doctors was that a rural physician would have his/her work unfairly compared to that of  a “big-city” doctor.

In legal malpractice, it can be fairly said that there is one standard for all of New York.  Doviak v Finkelstein & Partners, LLP  2016 NY Slip Op 01636  Decided on March 9, 2016  Appellate Division, Second Department is an example.

“During the trial of the underlying injury action, the personal injury defendants extended settlement offers in the sums of $4 million, $8 million, $9.25 million, and $10 million, respectively, each of which the plaintiffs declined upon the defendants’ advice. On the evening after the parties had rested, and prior to summations, the personal injury defendants extended a written settlement offer in the sum of $12 million, along with a structured settlement plan which would yield greater sums if invested as proposed (hereinafter the $12 million offer).

Yatto, who represented the plaintiffs at trial, testified that he communicated the $12 million offer to the plaintiffs and handed Mrs. Doviak the written document containing the offer (hereinafter the offer document) to review but that, the following morning, Mrs. Doviak explicitly rejected the $12 million offer and handed the offer document back to him. The plaintiffs, on the other hand, testified that they were never informed of the $12 million offer and that, had they been informed of it, they would have accepted it.

The jury in the personal injury action returned a verdict in favor of the plaintiffs in the sum of approximately $3.7 million. The defendants successfully sought additur from the Supreme Court, Ulster County, which increased the verdict to the sum of approximately $6.8 million. In November 2007, after the successful additur motion, the plaintiffs discharged the defendants and engaged successor counsel. Successor counsel obtained further additur from the Appellate Division, Third Department, for a total verdict in the sum of approximately $9.3 million (see Doviak v Lowe’s Home Ctrs., Inc., 63 AD3d 1348).

The plaintiffs thereafter commenced this action against the defendants, alleging, inter alia, that the defendants committed legal malpractice by failing to communicate the $12 million offer to them. The plaintiffs also alleged a variety of other legal errors and sought, inter alia, a finding that they had discharged the defendants for cause and that, accordingly, the defendants were not entitled to recover fees in the personal injury action.”

“The plaintiffs contend that, in evaluating the proffered testimony of their proposed expert on legal malpractice (hereinafter the malpractice expert), the Supreme Court improperly applied the “locality rule.” This is the concept that the quality of a professional’s work must be measured against that of professionals from a locality of comparable size, which is often applied to expert testimony regarding medical care (see Restatement [Second] of Torts: Undertaking in Profession or Trade § 299A, Comment g). The plaintiffs are correct that, in general, this rule does not apply to the work of legal professionals. The record, however, does not demonstrate that the court applied the locality rule.”