Claims against a professional for negligence arise from policy reasons, not simply from breach of contract grounds.  So, a non-architect might still be liable for professional negligence.  Silverboys, LLC v Skordas    2015 NY Slip Op 31711(U)   September 4, 2015   Supreme Court, New York   County  Docket Number: 653874/2014  Judge: Saliann Scarpulla is the story of a large-scale residential construction and how things can go wrong, even with contracts, and checks / balances in place.

“The following allegations are drawn from the amended complaint. Silverboys is a Delaware limited liability company owned and managed by the Silvermans, and it “was created to acquire, own, and manage the [Silvermans’ property in the Bahamas].” On or about April 25, 2014, Henry Silverman signed a contract with Skordas, wherein “Skordas agreed to perform traditional architecture services” such as “coordinat[ing] all architectural, structural, MEP, and design drawings.” “Skordas promised to deliver costeffective, honest, and quality supervision and management of an estimated $8 million construction project that included extensive site work, renovation of an existing main residence, and construction of a guest house, pool, and staff residence.” Plaintiffs allege Skordas is responsible for many construction defects, including using inappropriate or inferior materials, installing a “jail-like fence around the property,” constructing “a door to nowhere,” and for failing to maintain proper records or make plans for some of the materials purchased. In addition to acting as an architect, Plaintiffs allege that “Skordas agreed to act as the owner’s representative and the project manager.” Skordas’s alleged responsibilities included, among other things “managing the bidding process for all general contractors and subcontractors, supervising the construction and making regular visits to the construction site, handling all shipments of materials and their clearance through customs, and approving payments to all contractors and subcontractors.” In addition to claims of mismanagement, Plaintiffs allege that Skordas was dishonest during their relationship. One of the alleged incidents of dishonesty occurred on July 21, 2014 when “Silverboys transferred $27,907 to Mr. Skordas as a deposit for a Veyko railing and as full payment for 3 Velux America skylights.” Rather than distributing the funds to and placing the orders with the vendors, the Plaintiffs allege that Skordas, himself, retained the funds. Plaintiffs further allege that Skordas proposed “subcontractors that quoted grossly inflated prices and with which he had undisclosed connections.” For example, Plaintiffs cite a particular instance when Skordas suggested a landscaper who estimated that his work would cost more than $480,000, but “a comparable landscaper, contacted independently by the Silvermans, bid only $270,000 for the same project.”  The Plaintiffs allege that Skordas never held a license to practice as an architect, which is required by New York Education Law §6512 and that Skordas presented himself as an architect and did not hire necessary engineers. ”

“In the second cause of action, Plaintiffs assert that Skordas agreed to perform professional architectural services on the Bahamian Property. I.n addition to performing architectural services without a valid license as required by New York Education Law §6512, Plaintiffs allege that Skordas deviated from acceptable standards of care for architects.  The “elements of [a] professional negligence cause of action … includ[ e] a departure from the applicable standard of care, causation, and damages.” See Health Acquisition Corp. v. Program Risk Mgmt., Inc., 105 A.D.3d 1001, 1004 (2d Dep’t 2013). While Skordas contends that he cannot be liable for malpractice because he is not a licensed architect, defendants who hold themselves out as licensed professionals when they are not may nonetheless be liable for malpractice. See Rudman v. Bancheri, 260 A.D. 957, 957 (2d Dep’t 1940) (“Recovery may be had in such an action as this only if the defendant’s treatment of the plaintiff fell short of the professional standards of skill and care prevailing among those who offer treatment lawfully.”). 1 Second, the Plaintiffs’ professional negligence cause of action is not duplicative of their breach of contract claim. “Professionals … may be subject to tort liability for failure to exercise reasonable care, irrespective of their contractual duties. In these instances, it is policy, not the parties’ contract, that gives rise to a duty of due care.” See Sommer v. Fed. Signal Corp., 79 N.Y.2d 540, 551 (1992) (internal citations omitted). Here, Plaintiffs sufficiently allege that Skordas held himself out as an architect while “fail[ing] to exercise reasonable care.” See id. Plaintiffs correctly note that New York courts have held that a party may sue both for breach of contract and professional malpractice. See 17 Vista Fee Assocs. v. Teachers Ins. & Annuity Assoc. of Am., 259 A.D.2d 75, 83 (I st Dept. 1999); see also City of Kingston Water Dept. v. Charles A. Manganaro Consulting Eng’rs, P.C., No. Ol-CV-1317 (LEK/DRH), 2003 WL 355763, at *4 (N.D.N.Y. Feb. 13, 2003) (“Whereas parties may not create a negligence claim simply by alleging that a contracting party was negligent, New York courts have allowed parties to assert professional malpractice claims together with breach of contract claims.”) “

Judiciary Law §487 is a really really old common law provision coming to us from medieval England.  Fraud on the Court has been happening since the first day a court was held anywhere.  They are similar, but have differences.   Tooker v Schwartzberg  2015 NY Slip Op 31620(U)
August 17, 2015  Supreme Court, Suffolk County  Docket Number: 9463/14  Judge: Paul J. Baisley discusses that difference.

“Other than her conclusory allegations, however, plaintiff has set forth no facts to establish that the movants, or any of the defendants, committed a fraud on the Court or violated Judiciary Law §487 in connection with the foreclosure action. With regard to the former, the Court of Appeals recently held that: “in order to demonstrate fraud on the court, the non-offending party must establish by clear and convincing evidence that the offending ‘party has acted knowingly in an attempt to hinder the fact finder’s fair adjudication of the case and his adversary’s defense of the action” [citations omitted). A court must be persuaded that the fraudulent conduct, which may include proof of fabrication of evidence, perjury, and falsification of documents concerns ‘issues that are central to the truth-finding process’ [citation omitted]. Essentially, fraud upon the court requires a showing ‘that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier or unfairly hampering the presentation of the opposing party’s claim or defense'” [citations omitted] (CDR Creances S.A.S v Cohen, 23 NY3d 307 [2014]). As to the latter, Judiciary Law §487 provides that “An attorney or counselor who: 1. Is guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party … [i]s guilty of a misdemeanor, and in addition to the punishment prescribed therefor by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action.” The plaintiff has the burden of pleading and proving that the attorney, whether in a physical appearance or by any oral or written statement communicated to the Court or any party, intended to deceive the Court or that party (Dupree v Voorhees, I 02 AD3d 912 [2d Dept 2013]; Amalfitano v Rosenberg, 533 F3d 117 [2d Cir 2008]). Plaintiff’s allegations herein fail to meet the foregoing standards (Godfrey v Spano, 13 NY3d 358 [2009]). ”

 

How does continuous representation interplay with claims of fraud by attorneys? Hansen-Nord v Youmans  2015 NY Slip Op 31684(U)  September 1, 2015  Supreme Court, New York County  Docket Number: 651924/2014  Judge: Anil C. Singh  discusses the unusual situation in which an attorney and a law firm are accused of aiding and abetting fraud, but not sued for legal malpractice.

“This case arises out of the commingling of funds between plaintiff, her ex-husband Stephen Fortier, and their restaurants, including Pasta La Vista, Inc. (“Pazza Notte”) and Pazza Notte Columbus, LLC (“Loft”). Several promissory notes were executed by the corporate restaurants in favor of defendant Youmans. Ultimately, defendant Youmans initiated a lawsuit against plaintiff’s husband Fortier in 2008 alleging breach of fiduciary duty and seeking the amount owed. Tove Hansen-Nord, Pazza Notte, and Fortier entered into a settlement agreement with Youmans dated June 5, 2008, as amended on June 27, 2008. Plaintiff Nord further executed a personal guaranty on June 13, 2008. Plaintiff now alleges, inter alia, fraudulent inducement in order to set aside that settlement agreement.”

“The crux of plaintiffs complaint stems from her assertion that “defendants Meister, Cohen, Federman and McAnneny lent active assistance to Youmans both in fraudulently inducing the settlement agreement, consulting agreements and Nord guaranty, and in the years which followed during which Pazza Notte was fleeced by these defendants and they each actively induced plaintiffs to make payments that Youmans was not entitled to.” (Second Am. Compl. at if 142). The settlement agreement is dated June 5, 2008, as amended on June 27, 2008. The consulting agreement is dated June 17, 2008. Applicable Statutes of Limitations Under the law of New York the claims herein for fraud, aiding and abetting, fraud, fraudulent inducement and unjust enrichment are subject to a six year statute of limitations (CPLR §213( I) and (8); Standard Realty Associates, Inc. v. Chelsea Gardens Corp .. 105 A.D.3d 510, 964 N.Y.S.2d 94 [I st Dept 2013] (six year statute oflimitations applies to a claim for unjust enrichment); Pike v. New York Life Insurance Co., 72 A.D.3d 1043 [2d Dept 20 IO] (six year statute of limitations applies to a claim of fraudulent inducement); CSAM Capital, Inc. v. Lauder, 67 A.D.3d 149 [1st Dept 2009] (six year statute of limitations applies to a claim for aiding and abetting fraud); Avalon, LLC v. Derfner & Mahler, LLP, 16 A.D.3d 209 [1st Dept 2005] (six year statute of limitations applies to claim of fraud.  A cause of action for breach of fiduciary, as herein, which seeks a monetary remedy, 4 [* 4] is subject to a three year statute oflimitations); CPLR 214(4); IDT Corp. v. Morgan Stanley Dean Witter & Co .. 12 N.Y.3d 132 [2009]). ”

“Likewise, plaintiff alleges that the continuous representation doctrine applies to defendants MSF and Cohen. The continuous representation doctrine tolls the statute of limitations only where there is a mutual understanding of the need for further representation on the specific subject matter. (McCoy v Feinman, 99 NY2d 295, 306 [2002]). However, the continuous representation doctrine only applies to legal malpractice claims. The First Department has explicitly held that when the continuous representation doctrine is available “the tolling it allows only applies to the specific matter out of which the malpractice claim arises” (Johnson v Proskauer Rose LLP, 2015 NY Slip Op 03626 [1st Dept Apr. 30, 2015]). 8  Here, plaintiff has not asserted a legal malpractice claim against defendants MSF and Cohen. Thus, the continuous representation doctrine is inapplicable herein. ”

 

Continuing to look at Tantleff v Kestenbaum & Mark  2015 NY Slip Op 06720  Decided on September 2, 2015   the Appellate Division, Second Department answers that discussion and a rational explanation for a decision may well make it strategic rather than negligence.

“Here, the cause of action to recover damages for legal malpractice accrued on October 3, 2001, when the plaintiffs, upon the defendants’ recommendation, executed IRS Form 4549-CG consenting to an assessment of over $1.5 million in tax liability as well as civil fraud and negligence penalties (hereinafter the consent agreement) (see Landow v Snow Becker Krauss, P.C., 111 AD3d 795; Weiss v Deloitte & Touche, LLP, 63 AD3d 1045). Based on that accrual date, the applicable three-year statute of limitations would have expired on October 3, 2004, approximately two years prior to the commencement of this action on September 15, 2006. However, it is undisputed that, pursuant to the doctrine of continuous representation, the three-year statute of limitations pertaining to the defendants’ alleged legal malpractice in October 2001 was tolled during the time period when the defendants continued to represent the plaintiffs before the IRS on the specific subject matter underlying the malpractice claim. Consequently, at issue is when that representation and tolling ceased and the three-year statute of limitations period began (see Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d at 735).”

“In any event, even if this action were timely commenced, the defendants established their prima facie entitlement to judgment as a matter of law by demonstrating that their recommendation that the plaintiffs execute the consent agreement was a reasonable strategic decision (see Leon Petroleum, LLC v Carl S. Levine & Assoc., P.C., 122 AD3d 686; Keeley v Tracy, 301 AD2d 502; Hart v Carro, Spanbock, Kaster & Cuiffo, 211 AD2d 617). Furthermore, the defendants demonstrated that the recommendation was made after extensive discussions with the plaintiffs, who agreed to the course of action (see Noone v Stieglitz, 59 AD3d 505; Holschauer v Fisher, 5 AD3d 553; cf. Estate of Nevelson v Carro, Spanbock, Kaster & Cuiffo, 259 AD2d 282). In opposition, the plaintiffs offered no evidence to raise a triable issue of fact as to whether the recommendation “was an unreasonable course of action that constituted legal malpractice” (Keeley v Tracy, 301 AD2d at 503; see Leon Petroleum, LLC v Carl S. Levine & Assoc., P.C., 122 AD3d at 687). The plaintiffs’ claims amounted to nothing more than their present dissatisfaction with the defendants’ strategic choice and thus, did not support a malpractice claim as a matter of law (see Pere v St. Onge, 15 AD3d 465, 466; Zarin v Reid & Priest, 184 AD2d 385, 385).”

Attorney gives advice to sign a certain tax document, and the result is additional or unnecessary tax liability.  When does the statute of limitations commence and under what circumstances might it be tolled?

Tantleff v Kestenbaum & Mark  2015 NY Slip Op 06720  Decided on September 2, 2015  Appellate Division, Second Department gives an answer to this question.

“A legal malpractice claim accrues when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court. In most cases, this accrual time is measured from the day an actionable injury occurs, even if the aggrieved party is then ignorant of the wrong or injury. What is important is when the malpractice was committed, not when the client discovered it” (McCoy v Feinman, 99 NY2d 295, 301 [internal quotation marks and citations omitted]).

The three-year limitations period applicable to causes of action to recover damages for legal malpractice (see CPLR 214[6]) may be tolled by the continuous representation doctrine where ” there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim'” (Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d 733, 735, quoting McCoy v Feinman, 99 NY2d at 306). “For the doctrine to apply, there must be clear indicia of an ongoing, continuous, developing, and dependent relationship between the client and the attorney. One of the predicates for the application of the doctrine is continuing trust and confidence in the relationship between the parties” (Beroza v Sallah Law Firm, P.C., 126 AD3d 742, 743 [internal quotation marks and citations omitted]; see Zorn v Gilbert, 8 NY3d 933, 934; Singh v Edelstein, 103 AD3d 873, 874). “It requires more than a continuing, general, professional relationship; it tolls the [s]tatute of [l]imitations only where the continuing representation pertains specifically to the matter in which the attorney committed the alleged malpractice'” (Deep v Boies, 121 AD3d 1316, 1318-1319, quoting Shumsky v Eisenstein, 96 NY2d 164, 168). “The essence of a continuous representation toll is the client’s confidence in the attorney’s ability and good faith, such that the client cannot be expected to question and assess the techniques employed or the manner in which the services are rendered” (Farage v Ehrenberg, 124 AD3d 159, 167-168, citing Shumsky v Eisenstein, 96 NY2d at 167; Glamm v Allen, 57 NY2d 87, 93-94; Greene v Greene, 56 NY2d 86, 94). “What constitutes a loss of client confidence is fact specific, varying from case to case, but may be demonstrated by relevant documentary evidence involving the parties, or by the client’s actions” (Farage v Ehrenberg, 124 AD3d at 167-168).

Here, the cause of action to recover damages for legal malpractice accrued on October 3, 2001, when the plaintiffs, upon the defendants’ recommendation, executed IRS Form 4549-CG consenting to an assessment of over $1.5 million in tax liability as well as civil fraud and negligence penalties (hereinafter the consent agreement) (see Landow v Snow Becker Krauss, P.C., 111 AD3d 795; Weiss v Deloitte & Touche, LLP, 63 AD3d 1045). Based on that accrual date, the applicable three-year statute of limitations would have expired on October 3, 2004, approximately two years prior to the commencement of this action on September 15, 2006. However, it is undisputed that, pursuant to the doctrine of continuous representation, the three-year statute of limitations pertaining to the defendants’ alleged legal malpractice in October 2001 was tolled during the time period when the defendants continued to represent the plaintiffs before the IRS on the specific subject matter underlying the malpractice claim. Consequently, at issue is when that representation and tolling ceased and the three-year statute of limitations period began (see Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d at 735).

The defendants established their prima facie entitlement to judgment as a matter of law dismissing this action as time-barred upon proof demonstrating that the representation and the tolling stopped, and the three-year statute of limitations period began, on August 25, 2003, following which no further legal representation was undertaken by the defendants with respect to the consent agreement (see Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d at 736; Farage v Ehrenberg, 124 AD3d at 166; Landow v Snow Becker Krauss, P.C., 111 AD3d at 796-797). Upon that showing, the burden then shifted to the plaintiffs to raise a triable issue of fact as to whether the tolling ceased on or after September 15, 2003, such that this action alleging legal malpractice was timely commenced (see Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d at 736). However, even when viewing the evidence submitted in opposition in a light most favorable to the plaintiffs, it was insufficient to raise a triable issue of fact (see Beroza v Sallah Law Firm, P.C., 126 AD3d at 743; Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d at 736; Farage v Ehrenberg, 124 AD3d at 167; Landow v Snow Becker Krauss, P.C., 111 AD3d at 797; cf. Ortiz v Allyn, Hausner & Montanile, LLP, 18 Misc 3d 34).”

Trustees, just like regular prople, put their trust in attorneys.  After all, the attorney can be trusted to take care of the details, no?  Anyway, the attorney is sure to send a bill.  In this situation, the trust in the attorneys rigor was misplaced.

Ianiro v Bachman  2015 NY Slip Op 06709  Decided on September 2, 2015  Appellate Division, Second Department determines that trustees have privity to sue an attorney for work performed for the trust.

“The defendant, who is a lawyer, was retained by the plaintiff Lowell Babington and his wife, Toni Babington, to create and fund a trust of which the plaintiffs Carol Ianiro, Thomas Babington, and Margaret Onody serve as trustees (hereinafter collectively the trustee plaintiffs). The trust was funded with several policies which insured the lives of Lowell and Toni and which were previously owned by the trustee plaintiffs. The plaintiffs allege that the defendant allowed one of the policies on the life of Toni, who is now deceased, to lapse due to nonpayment. The plaintiffs commenced this legal malpractice action to recover the amount of the face value of the policy from the defendant. The defendant moved to dismiss the amended complaint pursuant to CPLR 3211(a), asserting, among other things, that the trustee plaintiffs lack legal standing to maintain this action. The Supreme Court, inter alia, denied that branch of the motion which was to dismiss the complaint insofar as asserted by the trustee plaintiffs as trustees and owners of the trust.

The Supreme Court properly denied that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(7) to dismiss the amended complaint insofar as asserted by the trustee plaintiffs. As the court correctly found, the trustee plaintiffs stand in a position analogous to that of the personal representative of an estate, and therefore, possess the requisite privity, or a relationship sufficiently approaching privity, to maintain an action alleging legal malpractice against the defendant (see generally Estate of Schneider v Finmann, 15 NY3d 306).”

Augustus Butera is a photographer whose work was handled by the former MCA Creative Services, which self-immolated some time back.  In Augustus Butera Photography, Inc. v MCA Creative Servs., Inc.2014 NY Slip Op 32974(U) October 21, 2014   Supreme Court, New York County  Docket Number: 651984/11  Judge Nancy M. Bannon gives a primer on the difference between professional negligence and breach of contract.  In this case it appears that Butera received compensation for the use of his photographs and came up short in the final accounting.  He sued for loss of compensation, punitive damages and other claims, and he referenced other law suits against MCA and its principals in support of his claim.

“In this breach of contract action, the plaintiff corporation, Augustus Butera Photography, Inc., seeks, inter alia, to recover unpaid professional fees from defendant MCA Creative Services, a/k/a Marge Casey Associates (“MCA”), its former agent. The complaint includes causes of action for conversion and unjust enrichment and seeks damages of $45,000, punitive damages, an accounting and judgment declaring that the parties had a valid contract which was breached by the defendant. The defendant, who had had a 13-year business relationship with the plaintiff’s principal, the photographer Augustus Butera, answered and asserted a cross-claim seeking damages for tortious interference with prospective business relations. In a third-party action, MCA seeks damages in excess of $150,000 from Augustus Butera, individually, upon the same theory as well as breach of contract for failure to pay contractual commissions. Butera answered and asserted several counterclaims approximating the claims in the complaint. The action was commenced in 2011 and discovery has been ongoing.”

“The plaintiff alleges that the defendant was negligent in its “billing, invoicing and licensing of photographic works” which resulted in a loss to him of professional fees totaling $45,000. To the extent that the plaintiff is attempting to assert a type of “professional malpractice” claim, it provides no factual support or legal authority for doing so and thus states no cognizable tort claim. See Clark-Fitzpatrick, Inc. v Long Island R.R. Co., 70 NY2d 382 (1987); Harrogate House Limited v Jovine, 2 AD3d 108 (1″ Dept. 2003). To the extent the plaintiff is alleging that the defendant failed to meet its obligations under the parties’ agreement, it is duplicative of the breach of contract claim. See Clark-Fitzpatrick Inc. v Long Island R.R. Co., supra; Sebastion Holdings, Inc. v Deutsche Bank, AG., 108 AD3d 433 (1’1 Dept. 2013). The defendant is entitled to summary dismissal of that claim. “

Fidelity Natl. Tit. Ins. Co. v Smith Buss & Jacobs, LLP   March 17, 2015  Appellate Division, First Department is a reminder that behind many legal malpractice cases there lurks the hint that this was all fraud and not merely a mistake.

“The complaint alleges that the sponsor of 16 apartment units in a condominium development, Empire Builders of New York Corp., and other parties defrauded the purchasers of the units by falsely representing that part of the purchase price would be used to satisfy portions of a blanket mortgage allocated proportionally to the units and by diverting the funds meant to satisfy the mortgage for their own use. Empire also allegedly failed to disclose that six of the units were encumbered by mortgages held by Al Perna. Plaintiff defended the purchaser’s title and mortgagee Wells Fargo Bank’s mortgage loan against foreclosures of the mortgages, pursuant to title insurance policies that its policy-issuing agent, Imagine Title, had allegedly fraudulently issued on its behalf. Proceeding individually and as subrogee of the purchasers and Wells Fargo, plaintiff asserts claims for fraud, aiding and abetting fraud, aiding and abetting conversion, and breach of fiduciary duty against Empire’s attorney, defendant Smith Buss & Jacobs, LLP (SBJ) and a breach of contract claim against defendant Blomberg for breaching instructions that Wells Fargo had given him by failing to ensure that all liens of record were satisfied before disbursing Wells Fargo’s funds from escrow.

[*2] The complaint alleges that SBJ misrepresented that the subject units would not be encumbered by the mortgages in the offering plan and closing statements it drafted and that it deviated from normal practice by failing to obtain the necessary payoff letters from New York Community Bank (NYCB), which had been assigned the mortgages, before preparing the closing statements (which typically set forth the payoff amounts) and by directing the purchasers to pay a party named Michael Lease, instead of NYCB. These allegations raise a reasonable inference of fraudulent intent on SBJ’s part and justifiable reliance by the purchasers, and therefore state a claim for fraud against SBJ (see Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 559 [2009]).

The allegations of SBJ’s involvement are sufficient to establish its actual knowledge of the fraud scheme, as well as its substantial assistance therein, and thus state an aiding and abetting fraud claim (see Oster v Kirschner, 77 AD3d 51, 55-56 [1st Dept 2010]). These allegations also state a claim for aiding and abetting Imagine’s breach of fiduciary duty to Fidelity (see Kaufman v Cohen, 307 AD2d 113, 125-126 [1st Dept 2003]). In addition, they state a claim for aiding and abetting the conversion of funds by Empire and Imagine (see Weisman, Celler, Spett & Modlin v Chadbourne & Parke, 253 AD2d 721 [1st Dept 1998]).”

Further analysis of Sitomer v Goldweber Epstein, LLP  2015 NY Slip Op 31541(U)  August 14, 2015  Supreme Court, New York County  Docket Number: 158325/13  Judge: Barbara Jaffe continues today on the issue of whether it is legal malpractice not to take an appeal for the client.  The retainer agreement tends to serve as the deciding factor here.  Another issue is whether the law firm is billing by the hour or on a contingency.

“On April 1, 2005, plaintiff hired defendants to represent him in connection with an anticipated divorce action to be commenced against him. In signing the retainer agreement, plaintiff agreed, as pertinent here, that defendants would provide services in connection with [* 1] proceedings at the trial court level only. (NYSCEF 9). On April 11, 2005, plaintiffs ex-wife commenced the divorce action in New York County. (NYSCEF 10). At that time, in addition to his interest in ISI Ltd., plaintiff had an ownership interest in Blue Star Jets, LLC. (NYSCEF 8, 37). ”

“On September 20, 2010, the judgment of divorce was entered and served with notice of entry on September 21, 2010. The court directed the equitable distribution of plaintiffs ownership interests in Blue Star and ISI Ltd. in accordance with the December 2008 decision. (NYSCEF 20). By email dated October 5, 2010, Epstein alerted plaintiff that she would draft a notice of appeal to protect plaintiffs rights, and asked ifhe wanted “to proceed with an application before [the presidingjustice], as well?”(NYSCEF 22). By email dated November 29, 2010, defendants asked plaintiff, among other things, if he was “proceeding with the Appeal?” They also advised that there were deadlines to be met and a need to compile the record on appeal. (NYSCEF 25). By email dated April 13, 2010, Epstein reminded plaintiff of the approaching deadline, that she his decision as to whether he wanted to pursue the appeal, that it would cost between $20,000 and $30,000 for the record alone, and that a new retainer had to be signed by him for the appeal. She otherwise informed him that she had completed a motion for a downward modification but awaited his net worth statement. (NYSCEF 26). Later that same day, plaintiff inquired as to “where are our odds better??” Epstein replied that she did not believe an appeal would be successful, but advised him to obtain a second opinion. (NYSCEF 27). ”

“By email dated March 10, 2011, at 5:33 pm, Epstein advised plaintiff that she was “working on papers.” On the same day, at 5:35 pm, plaintiff emailed defendants, “Hi guys, what[‘]s doing with the appeal to [the presiding justice]?” (NYSCEF 46 [emphasis omitted]). By email dated June 7, 2011, defendants requested a $5,000 retainer fee to draft a prenuptial agreement in an unrelated matter and again alerted plaintiff of the deadline for filing the appeal, to which plaintiff replied that he “thought the appeal was well under way already.” Defendants promptly responded, “How can it be underway when we never got any funds for the record or to work drafting the appeal[.] I told you it would cost about $40,000 to get record and do briefl.] You need to pay up front[.]” (NYSCEF 28). On October 5, 2011, plaintiff obtained defendants’ consent to substitute counsel. (NYSCEF 29). ”

Generally, the Appellate Division is limited to reviewing the record on appeal and may not consider evidence dehors the record (Constantine v Premier Cab Corp., 295 AD2d 303, 304 [2d Dept 2002]), unless its accuracy is undisputed (Bravo v Terstiege, 196 AD2d 473, 476 [2d Dept 1993]). Here, the parties’ email exchanges reflect that defendants apprised plaintiff of his right to appeal, the deadline for pursuing it, and the attendant costs. Even if defendants’ March 10, 2011 email was written in reply to plaintiffs email, it only demonstrates that defendants were working on papers to be submitted to the trial court, not on an appeal from the judgment. And, if not sent in response to plaintiffs email, defendants’ email does not prove that defendants were working on an appeal of the judgment. Moreover, the correspondence reflects plaintiffs appreciation of the difference between relief at the trial court level and an appeal of the judgment. Even assuming that defendants failed to accede to plaintiffs request that they file an appeal of the judgment, the evidence on which plaintiff relies is dehors the record and inadmissible on appeal absent any evidence that it is undisputed. (See Gagen v Kipany Prods. Ltd., 289 AD2d 844, 846 [3d Dept 2001] [court did not consider arguments based on documents 20 [* 20] outside the record]). Thus, plaintiffs evidence is insufficient to establish that an appeal would have been successful, particularly where, as here, the trial court acted within its broad discretion in appraising his businesses. (See MacDonald v Guttman, 72 AD3d 1452, 1456 [3d Dept 2010] [notwithstanding plaintiffs claim of appeal’s likelihood of success based on her denial of evidentiary hearing, lower court had no obligation to hold such hearing and could accept or reject certain evidence on its own initiative]; Weiner v Hershman & Leicher, P.C., 248 AD2d 193, 193 [1st Dept 1998] [plaintiff failed to allege specific facts to show lower court had improperly resolved issues and thus an appeal would likely be successful]). For all of these reasons, defendants have satisfactorily demonstrated both the baselessness of plaintiffs allegation that they committed malpractice in failing to pursue an appeal, and that, in any event, there is no significant dispute that it would have been unsuccessful.”

We started discussing Sitomer v Goldweber Epstein, LLP  2015 NY Slip Op 31541(U)  August 14, 2015  Supreme Court, New York County
Docket Number: 158325/13  Judge: Barbara Jaffe on Tuesday.  Two witnesses were not called for plaintiff at the divorce trial.

“On September 25, 2007, the divorce trial commenced. (NYSCEF 37). By email dated October 11, 2007, defendants approached Gordon Wilde, a director of ISI Ltd., to testify “about the dilution of [plaintiffs] stock interest in [ISI Ltd.] from 100% to 50% and the call for infusion of capital into the [real estate development] project in the amount of $675,000 for [plaintiffs] share[s].” (NYSCEF 57). Defendants followed up by email on November 2 in order to meet with Wilde and prepare him for his testimony; Wilde responded shortly thereafter and directed defendants to review his fee and expenses. (NYSCEF 58). 2 [* 2] During the course of the trial, by letter dated November 7, 2007, counsel for the ISi Ltd. shareholders informed plaintiff that based on his failure to infuse capital into the company, they were “taking steps today to pay the sum of $575,000.00 into the Company’s account” and “to have the value of the shares professionally determined.” Annexed to the letter is a subscribed portion of a 2006 ISi Ltd. shareholder agreement, indicating that three entities, other than plaintiff, owned a combined 50 percent stake in ISi Ltd. (NYSCEF 45). On November 15, 2007, the Klein Liebman report was admitted in evidence. Defendant Epstein cross-examined Glenn Liebman, a Klein Liebman partner and coauthor of the report …”

Witness Vigna

“Absent a basis for refuting Klein Liebman’s valuation method, and given the court’s questioning and findings and the concern that calling Vigna would undermine plaintiffs credibility, defendants have demonstrated that their decision not to call Vigna as a witness constituted a matter of strategy that, as a matter of law, forms no basis for a finding of legal malpractice. (See O’Callaghan v Brunelle, 84 AD3d 581, 581-582 [l5t Dept 2011], Iv denied 18 NY3d 804 [2012] [prior NYSE and SEC decisions revealed that uncalled witness could not help plaintiff and thus plaintiff could not establish causation]; L.l C. Commercial Corp. v Rosenthal, 202 AD2d 644, 644-645 [2d Dept 1994], Iv dismissed 84 NY2d 841 [decision not to call witness strategic as potential testimony confusing and unfavorable to plaintiff]; see also A.H Harris & Sons v Burke, Cavalier, Lindy & Engel P.C., 202 AD2d 929, 930 [3d Dept 1994] [failure to call witness appropriate course of action absent allegation of how failure fell below attorney standard of care]). ”

Witness Wilde

For the reasons set forth (supra II.B.l.), plaintiffs allegation that defendants’ failure to call Wilde as a witness to corroborate his testimony resulted in an inflated ownership figure, states a cause of action for legal malpractice (see Iocovello v Weingrad & Weingrad, 262 AD2d 156, 157 [151 Dept 1999], abrogated on other grounds Brothers v Florence, 95 NY2d 290 [2000] [plaintiff sufficiently stated cause of action in legal malpractice whose gravaman was attorney’s failure, in personal injury action, to introduce certain documentary evidence that plaintiff had suffered “serious injury”]). Defendants’ evidence is too ambiguous to prove that Wilde decided on his own not to testify. Nor do they offer a strategic rationale for not calling him. (See Ackerman v Kesselman, 100 AD3d 577, 579 [2d Dept 2012] [defendants failed to offer reasonable strategic explanation for decision to subject plaintiff, a nonparty to a contract, to arbitration proceeding for breach of contract]).”