There are legal malpractice cases, and then, there are world-class multi-million dollar cases of legal malpractice.  Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP  2015 NY Slip Op 07693  Decided on October 22, 2015  Court of Appeals  Rivera, J. is one of the latter types.  It involves commercial mortgage-backed securitization and this case was over a $67.5 million problem.  As the Court of Appeals found, Plaintiff made “immense” profits, and Cadwalader did not do so badly for itself, either.

“Now, almost two decades since the events leading to the original securitization, [*3]and almost ten years since Nomura filed this action, the case has reached this Court, and we are presented with the question whether Cadwalader is entitled to summary judgment as to all or part of the first cause of action. For the reasons set forth below, we conclude that Cadwalader has established, as a matter of law, that summary judgment and dismissal of the legal malpractice cause of action are merited in this case.”

“On a motion for summary judgment, the moving party must “make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact” (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). If the moving party produces the requisite evidence, the burden then shifts to the nonmoving party ” ‘to establish the existence of material issues of fact which require a trial of the action’ ” (Vega v Restani Const. Corp., 18 NY3d 499, 503 [2012], quoting Alvarez, 68 NY2d at 324). Viewing the evidence “in the light most favorable to the non moving party,” if the nonmoving party, nonetheless, fails to establish a material triable issue of fact, summary judgment for the movant is appropriate (Ortiz v Varsity Holdings, LLC, 18 NY3d 335, 339 [2011]; see Alvarez, 68 NY2d at 324).

To sustain its cause of action for legal malpractice, Nomura must “establish that [Cadwalader] 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” (Dombrowski v Bulson, 19 NY3d 347, 340 [2012] [internal citations and quotations omitted]). An attorney’s conduct or inaction is the proximate cause of a plaintiff’s damages if “but for” the attorney’s negligence “the plaintiff would have succeeded on the merits of the underlying action” (AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007]), or would not have sustained “actual and ascertainable” damages (Dombrowski, 19 NY3d at 340; Brooks v Lewin, 21 AD3d 731, 734 [1st Dept 2005], lv denied 6 NY3d 713 [2006]). Thus, in order for Cadwalader to prevail on its summary judgment motion, it must establish that it provided the advice, and conducted the due diligence expected of counsel “exercis[ing] the ordinary reasonable skill and knowledge [*8]commonly possessed by a member of the legal profession” (Dombrowski, 19 NY3d at 340). If Cadwalader fell short of this professional standard, it must demonstrate that its conduct was not the proximate cause of Nomura’s damages.”

“Essentially Nomura seeks to have us ignore the fact that it assumed the responsibility for ensuring that the loans complied with the 80% test based on independent appraisals that Cadwalader did not conduct or review. However, we cannot ignore that Nomura chose to run its business in this way, and that Cadwalader acted upon and relied on that business model in its representation of Nomura.

Nomura argues, alternatively, that even if Cadwalader did not have a general duty to confirm Nomura’s representations for all the D5 mortgage loans, it had such a duty in the case of the hospital loan. In support, Nomura relies on testimony from Adelman and Cadwalader’s experts that Cadwalader had a legal responsibility to confirm REMIC qualification where a “red flag” suggested that the appraisal valuation of the real property was inconsistent with Nomura’s representations. Cadwalader concedes this point, but argues that there was nothing in the D5 securitization to require that it confirm Nomura’s representations of REMIC qualification.

Nomura contends that the highlights document was a red flag because it contained statements that the loan was “secured by the land, building, and operations,” and that the collateral for the loan is the “land, building and property management (operations).” Nomura argues that this alerted Cadwalader to the possibility that the appraisal was based on the hospital’s operations, and not land and buildings, as required for REMIC qualification. As a consequence, Cadwalader should have taken steps to confirm that the property satisfied the 80% test.

Despite Nomura’s arguments to the contrary, the fact that the operational part of the hospital business may have factored in some way into the appraisal did not mean that Cadwalader should have considered Nomura’s representations unreliable. After all, the D5 securitization consisted of numerous commercial mortgages, all of which Nomura assessed in accordance with Cadwalader’s advice about how to determine REMIC qualification based on the 80%. Therefore, the hospital mortgage loan was no different from the others.”

“Nomura also argues that Cadwalader should not have ignored the fact that the highlights document includes a cost approach valuation of the hospital that is dangerously close to the 80% REMIC minimum. While it is true that the cost approach valued the hospital property at $40,600,000, that number is still above the $40 million required to meet REMIC qualification. [*12]In any case, and more to the point is the fact that the highlights document placed the hospital’s reconciled appraised value at $68 million, $28 million in excess of the $40 million required under the 80% test. That final appraisal was established only after the reconciliation of the three valuation approaches, two of which (the “income” and “sales” approaches) valued the property at over $60 million. Given such a large differential, Cadwalader did not have a basis to doubt Nomura’s representation that the hospital loan complied with the 80% test. Indeed, Adelman testified that in his experience, even if a property valued at $68 million included a significant amount of personal property, its real property valuation would not fall below $40 million dollars. Gershon similarly testified that in his experience in real estate, a $68 million appraisal based on the income approach (which was the case here) means the real estate value likely exceeded $40 million. Rather than establish that triable issues of fact exist, the evidence instead shows that these parties—sophisticated business entities in the securitization field—held similar views that a $68 million appraisal provided sufficient confidence that the property was REMIC-qualified.

Cadwalader, thus, met its burden to establish that it conducted the requisite due diligence, and that it “exercise[d] the ordinary and reasonable skill and knowledge commonly possessed by a member of the legal profession” when it relied on Nomura’s representations in issuing an opinion that the D5 securitization was REMIC-qualified (see Dombrowski, 19 NY3d at 340). In contrast, Nomura failed to meet its burden to establish the existence of a triable issue of fact.

VI.

For the foregoing reasons, the Appellate Division’s order should be modified, with costs to Cadwalader, by granting Cadwalader’s motion for summary judgment dismissing the first cause of action in its entirety and, as so modified, affirmed and the certified question answered in the negative.”

For this fine October day, we employ a baseball catch-phrase.  Defendants moved for summary judgment saying that plaintiffs could not prove at least one of the elements of legal malpractice.  Plaintiffs demonstrated that they could prove at least one of their claims.  Result?  The case went on to settlement.  Smith v Kaplan Belsky Ross Bartell, LLP  2015 NY Slip Op 02108 [126 AD3d 877]  March 18, 2015 Appellate Division, Second Department is a demonstration that if you wish to succeed at summary judgment, all bases must be covered.

“Ordered that the order is modified, on the law, by deleting the provision thereof granting that branch of the defendants’ motion which was for summary judgment dismissing the cause of action alleging legal malpractice, and substituting therefor a provision denying that branch of the motion; as so modified, the order is affirmed, with costs to the plaintiffs.

The plaintiffs were former executives of Odyssey Pictures Corporation (hereinafter Odyssey) and members of its Board of Directors. Upon their departure from Odyssey, the plaintiffs were given an agreement pursuant to which Odyssey promised to indemnify them in future litigation arising out of their tenure with Odyssey. At some point thereafter, the plaintiffs were sued for actions arising during their tenure with Odyssey. The plaintiffs allegedly evaluated their likelihood of being indemnified by Odyssey and based their litigation strategy in that action upon their belief that they would be indemnified by Odyssey for their litigation costs. At the end of the litigation against them, the plaintiffs sought approximately $455,000 in indemnification from Odyssey, at which time the plaintiffs learned that Odyssey did not have the assets portrayed in the financial reports prepared by Odyssey’s accountants, Want & Ender. In or about February 2004, the plaintiffs retained the defendants to prosecute an action against Want & Ender, and in or about April and June 2004, Want & Ender was served with a summons and notice. Want & Ender failed to answer or appear. However, the defendants did not move for a default judgment in the plaintiffs’ favor and against Want & Ender within a year of that default and, instead, moved for that relief about three years later. The plaintiffs’ action against Want & Ender was ultimately dismissed as abandoned.”

“The defendants failed to establish their prima facie entitlement to judgment as a matter of law dismissing the cause of action alleging legal malpractice (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). While the defendants argue that the plaintiffs could not have recovered on their action against Want & Ender because the plaintiffs were not in privity or near privity with Want & Ender (see Health Acquisition Corp. v Program Risk Mgt., Inc., 105 AD3d 1001, 1003 [2013]; Barrett v Freifeld, 64 AD3d 736, 738 [2009]), their submissions failed to eliminate all triable issues of fact with respect to this issue (cf. Security Pac. Bus. Credit v Peat Marwick Main & Co., 79 NY2d 695, 702 [1992]). In support of their motion, the defendants submitted, inter alia, the deposition testimony of the plaintiffs, who testified as to when and how they relied on the improperly prepared financial reports, and explained why they believed that the accountants knew or should have known that the plaintiffs would be relying on the prepared financial reports. Since the defendants failed to establish their prima facie entitlement to judgment as a matter of law dismissing the cause of action alleging legal malpractice, that branch of the defendants’ motion should have been denied, regardless of the sufficiency of the papers submitted in opposition (see Winegrad v New York Univ. Med. Ctr., 64 NY2d at 853; Delollis v Margolin, Winer & Evens, LLP, 121 AD3d 830 [2014]).”

 

Would a medical malpractice case be dismissed because the patient said (when coming out of anesthesia) that the surgeon seemed great?  Would an accounting malpractice case be dismissed when the client said that the numbers looked good?  No.  But legal malpractice cases (all in the matrimonial area) are being dismissed when the client is told (by his attorney) to say that he was “satisfied” with the representation at the settlement allocution.  By the way, when else is a settlement “allocuted” on the record?  Never.

Goldweber Epstein, LLP v Goldberg  2015 NY Slip Op 31916(U) October 14, 2015 Supreme Court, New York County Docket Number: 650807/2015 Judge: Cynthia S. Kern is the latest example in the Harvey line.

“On or about March 16, 2015, plaintiff commenced this fee action against defendant seeking to recover the alleged $49,464.65 in legal fees. In response, defendant served an answer asserting a counterclaim against plaintiff sounding in legal malpractice. Specifically, defendant alleges plaintiff: (a) failed to conduct adequate discovery regarding the defendant’s wife’s financial interests; (b) failed to competently negotiate two settlement agreements; (c) failed to competently negotiate a settlement spread on the record; ( d) incorrectly insisted that the “status quo” formula maintained for over 3 years was to defendant’s benefit; (e)’failed to understand the matrimonial part of Westchester County and the imminent withdrawal of Judge Wood; (f) wasted thousands of dollars in retaining a separate financial expert to assist plaintiff inasmuch as plaintiff could not understand the most basic financial concept; (g) lacked the ability to understand or explain the terms of a promissory note with an “equity kicker”; (h) lacked the ability to comprehend a law firm partnership agreement; and (i) refused;,despite persistent inquires by defendant, to address the financial impact of supporting a dis’abled daughter. Plaintiff now moves to dismiss this counterclaim. ”

“In the present case, plaintiff’s motion for an Order pursuant to CPLR § 3211 (a)(l) dismissing defendant’s counterclaim for malpractice is granted as the documentary evidence presented by plaintiff definitively disposes of defendant’s counterclaim. According to the First Department, “[a] claim for legal malpractice is viable, despite settlement of the underlying action, if it is alleged that settlement of the action was effectively compelled by the mistakes of counsel.” Bernstein v. Oppenheim, 160 A.D.2d 428, 430 (pt Dept 1990). However, courts have consistently held that where a client performs an allocution and acknowledges that he or she is satisfied with an attorney’s performance, there is no viable malpractice claim. See Harvey v. Greenberg, 82 A.D.3d 683, 683 (I5t Dept 2011); Weissman v. Kessler, 78 A.D.3d 465, 465- 466 (pt Dept 2010); Kate bi v. Fink, 51 A.D.3d 424, 425 (1st Dept 2008). Here, defendant allocuted in open Court that he was satisfied with the settlement of the Matrimonial Action and plaintiffs representation. Indeed, when explicitly asked by Justice Christopher “[a]re you … 3 [* 3] satisfied with the respective attorneys,” defendant responded with “Yes.” Thus, this allocution clearly contradicts defendant’s allegation of malpractice and defendant’s. counterclaim must be dismissed. Accordingly, plaintiffs motion is granted and it is hereby ORDERED that defendant’s counterclaim for malprac.tice is dismissed. This constitutes the decision and order of the court. “

Judiciary Law 487 is the lawyer deceit common law, imported from the Magna Carta era.  It is the oldest Anglo-American common law, and has recently been the subject of several NYS Court of Appeals rulings.  In Kuruwa v 130E. 18 Owners Corp. 2014 NYSlipOp 06880 [121 AD3d 472]
October 9, 2014 Appellate Division, First Department the Court held that mere false answers to an information subpoena and legal arguments could not support a JL 487 claim.

“The IAS court correctly found that respondent bank’s perfected, secured interest in the subject property has priority over petitioners’ unsecured money judgment (see Chrysler Credit Corp. v Simchuk, 258 AD2d 349 [1st Dept 1999]). The bank’s false answers to the information subpoena, in which it denied having a mortgage on the Meyers respondents’ apartment, did not prejudice petitioners; nor do they point to any detrimental reliance upon the statements (cf. Leber-Krebs, Inc. v Capitol Records, 779 F2d 895, 896 [2d Cir 1985]).

The court also correctly held that there could be no judicial sale of the cooperative apartment. The Meyers defendants had purchased the co-op before they were married, and they concede that they originally owned it as tenants in common (see EPTL 6-2.2). They refinanced the purchase money mortgage after they were married, and the bank required a name change on a newly issued stock certificate and proprietary lease. The change in title, made by the cooperative corporation, after the parties were married effectively changed ownership from tenants in common to tenants by the entirety.

[*2] The legal arguments made by the bank’s counsel and the Meyerses’ counsel do not give rise to claims under Judiciary Law § 487.”

Clients suing pro-se took two appeals from the denial of a motion for a default judgment.  Second appeal, which ate up quite a bit of time was dismissed, since one may not appeal from denial of a motion to re-argue.  Sometimes, even when you are suing an attorney, it just makes sense to hire an attorney?

Executor of N.Y. Estate of Celia Kates v Pressly  2015 NY Slip Op 07469  Decided on October 14, 2015  Appellate Division, Second Department tells us that appeals have a number of unique rules.

“In an action to recover damages for a violation of Judiciary Law § 487, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Diamond, J.), dated June 7, 2013, as denied their second motion, in effect, for leave to reargue their prior motion for the entry of a default judgment against the defendants, which was denied in an order of the same court dated August 23, 2010.

DECISION & ORDER

Cross motion by the defendants, inter alia, to dismiss the appeal on the ground that no appeal lies from an order denying reargument. By decision and order on motion of this Court dated June 24, 2014, that branch of the cross motion which is to dismiss the appeal was held in abeyance and referred to the Justices hearing the appeal for determination upon the argument or submission thereof, and the cross motion was otherwise denied.

Upon the papers filed in support of the cross motion, the papers filed in opposition thereto, and upon the submission of the appeal, it is

ORDERED that the branch of the cross motion which is to dismiss the appeal is granted; and it is further,  ORDERED that the appeal is dismissed, with costs.

The appeal must be dismissed, as no appeal lies from an order denying reargument (see Emigrant Mtge. Co., Inc. v Thevenin, 127 AD3d 919; Basile v Wiggs, 117 AD3d 766, 766; Naso v Naso, 102 AD3d 755, 756; Rosenfeld v Baker, 78 AD3d 810, 811; Peralta v All Weather Tire Sales & Serv., Inc., 58 AD3d 823, 823).”

We’ve written over and over that the statute of limitations in legal malpractice is 3 years pursuant to CPLR 214(6) and aside from continuing representation, there is no possible extension.  There is no discovery statute of limitations, and the statute is commenced when the mistake is made.  We have been absolutely solid on that until we read Herrick Feinstein LLP v Baram  2015 NY Slip Op 07552 Decided on October 15, 2015 Appellate Division, First Department.  Our world view shifted and sharply.

There are many attorney retention agreements with an arbitration clause.  Herrick uses one, and it can lead to an indeterminate statute of limitations, to be decided by the arbitrators.  Since their decision is given great deference, there is absolutely no certainty in an FAA arbitration setting.

“The IAS court correctly determined that the legal malpractice arbitration commenced by respondents was barred by the statute of limitations, having been commenced more than three years after the representation ended (CPLR 214[6]). The arbitration agreement did not implicate interstate commerce and the FAA does not apply, therefore respondents’ reliance on Cusimano v Schnurr (40 Misc 3d 1208[A] [Sup Ct, NY County 2013], revd 120 AD3d 142 [2014], lv granted 24 NY3d 909 [2014]) is unavailing.”

As is true in a large percentage of legal malpractice cases, there is strong evidence that the attorneys departed from good and accepted practice (a “mistake”).  Here, in Iannucci v Kucker & Bruh, LLP   2015 NY Slip Op 51490(U)   Decided on October 7, 2015   Supreme Court, Kings County
Rivera, J., there are indications that Plaintiff could make out a case with discernible departures by the attorney.  However, this case, as do so many others, founders on proving that but for these mistakes there would have been a better and more reasonable economic outcome for Plaintiffs.

“The verified complaint asserts the following salient facts, among others. In September 2002, Team Obsolete Promotions, Inc., which is owned by Robert Iannucci and Sonia Ewers, contracted with The Garden City Company (hereinafter GCC) to purchase 325 Gold Street, Brooklyn, New York (hereinafter the subject property).

On November 20, 2002, the closing date of the sale, GCC executed an assignment of all its interest in past due rent and all claims against past or future tenants of the subject property to Robert Iannucci and Sonia Ewers. On that date, the subject property was zoned for commercial and not residential use and had three of its seven floors illegally occupied by individuals for residential purposes. On that date, GCC already had ongoing eviction proceedings pending against the illegal residents of the subject property.

Sometime prior to November 20, 2002, the plaintiffs hired the defendants, who had been working for GCC at an hourly rate, to continue their ongoing eviction litigation for the subject property. The defendants Saul Bruh and Andrew Bittens are lawyers and partners in the law firm of Kucker and Bruh, LLP.

The first cause of action is for legal malpractice. The claim is based on the alleged failure to take prompt action when the defendants learned that several tenants had abandoned the premises or had divided their leaseholds without the consent of the owners. In addition, when the defendants became aware that the City of New York was in the process of changing the zoning status of the building and failed to take swift action. Plaintiffs’ claim that as a result of defendants’ dilatory behavior they lost substantial rental income.

The second cause of action is for an accounting and a refund. This claim is based on defendants’ alleged over-billing for the legal work it performed.”

“Plaintiff seeks to hold the defendants responsible for the rental income that it lost by the inability to lease the units that were illegally occupied by the individuals who were the subject of pending eviction proceeding. Plaintiff’s claim is that the pace of the defendants prosecution of evicting the illegal occupants resulted in the loss of the rental value of the those spaces. Plaintiff does not allege that tenants seeking to rent the illegally occupied units were known or actually existed prior to the eviction of the units in question.

The movants do not dispute that they were hired to represent the interest of the plaintiff in evicting the illegal tenants of the subject property. Nor do they dispute that the legal representation was at an hourly rate pursuant to an oral agreement. The thrust of their motion is [*2]that plaintiff is unable to prove that their legal representation proximately caused the plaintiff any ascertainable damage.

Indeed, plaintiff’s claim of the loss of rental income from potential future tenants is based on speculation. Conclusory allegations of damage based on speculation are insufficient to support a legal malpractice claim (see Siwiec v Rawlins, 103 AD3d 703 [2nd Dept 2013]; see also, Bua v Purcell & Ingrao, P.C., 99 AD3d 843 [2nd Dept 2012]).

The movants have made a prima facie showing that the plaintiff is unable to prove at least one of the essential elements of a legal malpractice cause of action (Duque v Perez, 95 AD3d 937 [2nd Dept 2012] thus shifting the burden to the plaintiff to raise a triable issue of fact.

Plaintiff’s voluminous opposition papers merely repeat and reassert the same conclusory and speculative claims of lost rental income purportedly due to the movants allegedly slow prosecution of eviction proceedings. Plaintiff’s opposition papers do not raise a triable issue of fact. Accordingly, plaintiff’s first cause of action for legal malpractice is dismissed.”

This is a fairly simple and straightforward legal malpractice case.  Worker falls from a ladder while working on an electrical light during construction.  Law firm fails to sue the owner, which in this case is the Dormitory Authority of the State of NY.  Nevertheless, summary judgment fails for both sides.  Here is the story in Ferrigno v Jaghab, Jaghab & Jaghab, P.C. 2015 NY Slip Op 51491(U)  Decided on October 7, 2015  Supreme Court, Kings County Rivera, J.

“The complaint sets forth forty-five allegations of fact in support of three causes of action. The first and second causes of action sound in legal malpractice. The third cause of action is for breach of contract. The summons and complaint allege that on August 10, 2009, plaintiff suffered injuries when he fell from an A-frame ladder after sustaining an electrical shock. At the time of the incident plaintiff was performing repairs to a light fixture at Medgar Evers College Prep School (hereafter MECPS), located at 1186 Carroll St., Brooklyn, New York (hereafter “the premises”). The premises is owned by the Dormitory Authority of the State of New York (hereafter DASNY). Prior to October 21, 2009, plaintiff retained Jaghab, P.C. to pursue an action to recover damages for those personal injuries.

The crux of plaintiff’s claim is that the defendants failed to include DASNY in the notice of claim as a defendant and therefore failed to bring a cause of action against a liable party. Plaintiff alleges that, had the defendants brought an action against DASNY, he would have prevailed under an action pursuant to Labor Law § 200, 240 (1), and 241(6).”

“Plaintiff relies solely on the fact that defendants failed to bring a claim against DASNY under Labor Law § 240 (1) in support of the allegation that defendants breached their duty to him. The following factors are not controverted. Defendants did not include DASNY in the notice of claim. Defendants failed to bring a claim against DASNY on plaintiff’s behalf. DASNY owned the premises at the time of plaintiff’s accident. Plaintiff is precluded from bringing an action against DASNY due to the failure to include DASNY in the notice of claim.

Plaintiff must establish that DASNY was a liable party and that he would have prevailed on the underlying claim against DASNY under Labor Law § 240 (1) to prevail on the motion.

In support of the motion the plaintiff submitted his deposition. Plaintiff testified that he was engaged in repairing a lighting fixture when he received an electric shock and [*5]fell from an A-frame ladder. This establishes, prima facie, that plaintiff was within the protective ambit of Labor Law § 240(1) at the time of the accident (see Eisenstein v Board of Mgrs. Of Oaks at La Tourette Condominium Sections I-IV, 43 AD3d 987, 842 NYS2d 72). As mentioned above, Labor Law § 240 (1) creates a nondelegable duty and absolute liability upon owners for failure to provide proper safety devices for workers subject to elevation-related risks (see Labor Law § 240 [1]). Accordingly, plaintiff meets his prima facie burden on legal malpractice by establishing that the defendants failed to sue DASNY when they were the owners of the premises where the accident occurred and that plaintiff’s activity was work contemplated within the protective ambit of Labor Law § 240 (1).

The burden now shifts to the defendant to come forward with sufficient evidence to raise a triable issue of fact (see Ernest v Pleasantville Union Free School Dist., 28 AD3d 419, 811 NYS2d 573 [2nd Dept 2006]). In opposition to plaintiff’s motion for summary judgment, defendants raise a triable issue of fact regarding whether plaintiff was engaged in an activity protected by Labor Law § 240 (1). Defendants submit the notice of claim to the City of New York. The notice of claim is signed and sworn to by the plaintiff as well as notarized. In pertinent part plaintiff states therein that he was “changing an overhead ballast” at the time of the accident. “[T]he task of replacing a ballast in a fluorescent light fixture falls within the category of routine maintenance” (Deoki v Abner Props. Co., 48 AD3d 510, 510). Work that “involve[s] replacing components that require replacement in the course of normal wear and tear… constitute[s] routine maintenance and not ‘repairing’ or any of the other enumerated activities” (Esposito v New York City Indus. Development Agency, 1 NY3d 526) and, therefore, is not protected activity under Labor Law § 240 (1).

As the motion papers contain different versions of the accident a triable issue of fact exists as to whether the plaintiff was engaged in work covered by Labor Law § 240 (1). Accordingly, plaintiff’s motion for summary judgment must be denied on these grounds.”

 

Fleisher v Ballon Stoll Bader & Nadler, PC  2015 NY Slip Op 31855(U)  October 5, 2015 Supreme Court, New York County  Docket Number: 158302/2012  Judge: Joan M. Kenney is another iteration of how difficult it is to sue an estates (or in this case a Medicaid planning) attorney.  On its face, the case seems simple.  Attorney is hired by Mrs. F to help plan for her mother’s medicaid situation, and to do a will for Mrs. F.  Then Mrs. F pre-deceases her mother, and her insurance policy and a totten trust now endanger the mother’s medicaid planning.

“Mrs. Litchman was a recipient of Medicaid benefits. She was in a nursing home towards the end of her life. Plaintiff alleges that defendants failed to identify the Policy and CD as assets owned by Mrs. Fleisher that would have an impact and effect on Mrs. Lichtman’s eligibility for Medicaid benefits, and failed to plan Mrs. Fleisher’s estate in a way that would maximize the value of her assets for her heirs and beneficiaries. Plaintiff contends that Mrs. Lichtman cannot accept the payment from Unum as it might be subject to a Medicaid lien and disqualify her from eligibility for certain medicaid benefits. Plaintiff further alleges that the Policy and CD would have been conveyed to Mrs. Fleisher’s estate and would have ultimately passed to plaintiff as the residuary beneficiary if defendants had prevented the transfer of these assets to Mrs. Lichtman. ”

“Here, plaintiff David Fleisher is suing both individually and as the proposed executor and beneficiary of the Estate of Marilyn R. Lichtman, also known as Marilyn Lichtman Fleisher, deceased. Individually as a beneficiary of the estate, plaintiff is not entitled to bring a cause of action against defendant attorneys due to lack of privity. Plaintiff is, however, entitled to bring a cause of action against defendant attorneys as a personal representative of the estate. Plaintiff submits a copy of a decision dated December 9, 2014, in which the Honorable Diana A. Johnson stated that “letters testamentary shall issue to David Fleisher and Ruby Erkkila upon duly qualifying according to law.” (See Plaintiffs Exhibit F). Unfortunately, plaintiff failed to demonstrate that the “letters testamentary” were formally issued pursuant to the Surrogate’s decision. Plaintiff, as a “proposed executor” (as noted in the caption of this case) is not entitled to maintain this action without the letters testamentary.”

“Even if the plaintiff were allowed to bring this action against defendant once the proper letters testamentary were issues, plaintiff must plead and prove actual, ascertainable damages to the estate as a result of an attorney’s alleged malpractice. A complaint in a legal malpractice action will be dismissed pursuant to CPLR 3211 (a)(7) where “it fails to plead specific factual allegations demonstrating that, but for the … defendant’s alleged negligence … the plaintiff would not have incurred any damages” (Rudolfv Shayne, Dachs, Stanisci, Corker & Saucer, 8 NY3d 438, 441, 835 NYS2d 534, 867 NE2d 385). Proximate causation is a requisite element of a legal malpractice claim ·and it must be based on more than “mere speculation.” Mere speculation about a loss resulting from an attorney’s alleged omission is insufficient to sustain a prima facie case of legal malpractice (Giambrone v Bank of NY, 253 AD2d 786 [1998]). ”

“In opposition, plaintiff argues that Mrs. Fleisher’s estate was damaged in the amount of $216,798.04, due to defendants’ failure to properly advise Mrs. Fleisher to change the beneficiary of the life insurance policy and CD in order to maximize the value of the estate’s assets for the benefit of its beneficiaries. Plaintiff alleges that defendant attorneys were hired for the purpose of both estate planning and Medicaid planning for both Mrs. Fleisher and her mother. Plaintiff also claims that, pursuant to the retainer agreement, defendants were to advise on and effectuate transfers of assets in order to maximize the value of the estate and to preserve Ms. Lichtman’s eligibility for Medicaid benefits, but failed to do so, which resulted in the loss of $216, 798.04 in assets to the estate and its beneficiaries. In order to establish proximate cause in a legal malpractice action, plaintiff must demonstrate that “but for” the defendants’ negligence, Mrs. Fleisher would not have transferred any assets to her mother, and instead that these assets would have become part of the estate and ultimately reach plaintiff as the beneficiary. Here, plaintiff cannot prove that “but for” the defendants’ advice, or lack thereof, Mrs. Fleisher would have changed the named beneficiary on the CD and trust from her mother to plaintiff. Plaintiffs complaint merely alleges, in a conclusory fashion, that defendants’ deviation from “good and accepted” legal practices resulted in the estate being devalued in the amount of$216,000.00. Accordingly, the legal malpractice 6 [* 6] action must be dismissed. “

Plaintiffs run a marina, and are hounded by the Town of Carmel.  Apparently the Town does not like how they are running the marina.  The problem for the town is that it does not have jurisdiction over the marina.  Hence, its criminal and civil zoning cases are defective.  Plaintiffs resist for years and then sue in Federal Court, only to have their case dismissed on timeliness grounds.  Is there a legal malpractice case?  Here are some excerpts from Melchner v Quinn Law Firm, PLLC
2015 NY Slip Op 31846(U)  October 3, 2015  Supreme Court, Putnam County  Docket Number: 382/15  Judge: Lewis J. Lubell.

“Plaintiffs, Charles Melchner and Lillian Melchner, commenced this legal malpractice action on March 9, 2015 against their former attorney, Andrew C. Quinn, Esq., and his law firm, The Quinn Law Firm, PLLC (collectively “Quinn”) alleging, among other things, that Quinn was negligent in his representation of Plaintiffs by permitting the applicable statute of limitations to expire with respect to federal and state law claims against the Town of Carmel and its elected officials (the “Town”). Plaintiffs further alleg that but for said negligence they would have recovered money damages against the Town in connection with multiple alleged frivolous criminal and civil actions initiated against them by the Town. The complaint alleges that it all started in July of 1998 when the Town filed a criminal information in Justice Court of the Town of Carmel charging Plaintiffs with three zoning violations with respect to their ownership, operation and control of the Mahopac Marina (hereinafter the “Marina”), a commercial marina located in the hamlet of Mahopac. In connection therewith, Plaintiffs retained Quinn to defend them. Quinn’s representation of the Plaintiffs would continue over the next fifteen years in connection with a series of criminal and civil actions filed against Plaintiffs by the Town in connection with the Marina and Plaintiffs’ use of certain related docks. All tolled, criminal actions were filed in 1998, 2003 and 2008; civil actions in 2000, 2006 and 2009. Plaintiffs allege that the criminal and civil actions were initiated by the Town despite the Town’s knowledge that it did not have jurisdiction over the docks.”

“The complaint makes specific reference to Plaintiffs’ appeal of the July 21, 2010 Decision & Order of the Supreme Court, Putnam County (Nicolai, J.), enjoining their use of certain docks in connection with the operation of the Marina. More specifically, by Decision & Order of February 27, 2013, the Appellate Division Second Department, modified, the July 21, 2010 Decision & Order….”

“The complaint makes note that the 2008 criminal action and the 2009 civil action (that gave rise to the 2013 Appellate Division vacatur of the stay) are still pending. Plaintiffs contend that, in reliance upon Quinn’s alleged assurances that they would be able to commence an action against the Town, Plaintiffs commenced an action in November 2013 in the United States District Court for the Southern District of New York (the “Federal Action”) wherein Plaintiffs alleged, among other things, a violation of their constitutional rights pursuant to 42 U.S.C. Section 1983 (the “1983 Action”). They also advanced several state law claims including tortious interference with business, abuse of process, selective enforcement of laws, breach of contract and intentional infliction of emotional distress. It should be noted that Quinn did not represent Plaintiffs in the Federal action. By then, Plaintiffs had retained other counsel.”

“The complaint alleges, and is not otherwise disputed, that the third criminal action instituted by the Town on September 2, 2008 and the civil action commenced by the Town on June 30, 2009 that gave rise to the February 27, 2013 Appellate Division Decision and Order, are still pending” (Compl. ¶15 [parentheticals as in original]). Therefore, contrary to Plaintiffs’ position, Plaintiffs are not precluded from bringing a “lawsuit”, a “claim” or an “action” against the Town. “The one-year statute of limitations applicable to a cause of action for malicious prosecution (see CPLR 215[3]) does not begin to run until favorable termination of the underlying criminal proceeding” (Roman v. Comp USA, Inc., 38 A.D.3d 751, 752 [2d Dept 2007][citations omitted]; see Williams v. CVS Pharm., Inc., 126 AD3d 890, 891 [2d Dept 2015]). Thus, additionally, a notice of claim is not yet due (Brownell v. LeClaire, 96 AD3d 1336, 1337 [3d Dept 2012]).”

“The Court is satisfied that upon consideration of the full and complete “record”, including the attachments annexed to the complaint such as the Appellate Division decision of Town of Carmel v. Melchner, supra), that the factual claims advanced by Plaintiffs in the body of the compliant are patently tailored and/or edited by Plaintiffs to convey such a false impression and succession of facts that they should be deemed “contradicted” by the record as a matter of law. Upon that contradicted record, the Court finds that Plaintiffs have failed to state a cause of action against Quinn The Court is satisfied that the documentary evidence before it, be it by way of attachment to the complaint or otherwise, sufficiently refutes Plaintiffs’ conveniently tailored allegations of fact such that a defense to the complaint has been established as a matter of law (see CPLR 3211[a][1]; Whitebox Concentrated Convertible Arbitrage Partners, L.P. v. Superior Well Servs., Inc., 20 N.Y.3d 59, 63 [2012]). Moreover, even though Plaintiffs’ Federal lawsuit was dismissed on statute of limitations grounds, the record establishes that Quinn’s assurance that Plaintiffs’ would be able to bring “a lawsuit” (Compl. ¶TWELFTH), “a claim” (Compl. ¶THIRTEENTH) or “an action” (Compl. ¶SIXTEENTH) against the Town once the criminal and civil proceedings initiated by the Town “had been resolved” does not, as a matter of law, constitute legal malpractice for the reasons hereinabove indicated and, in any event, it would be nothing more than conjecture to say that any damages sustainable in the federal action would have been any greater than that which Plaintiffs could have or would have been able to recover in a state action. ”