Totally unexpected players in an attorney-fee-legal-malpractice case have led to a very interesting decision by Justice Kern that touches on a number of legal malpractice issues.  Today, we will discuss the Judiciary Law § 487 claim for file churning in Kagan Lubic Lepper Findelstein & Gold LLP v 325  Fifth Ave. Condominium 2015 NY Slip Op 31470(U)  August 6, 2015 Supreme Court, New York County  Docket Number: 151878/15   Judge: Cynthia S. Kern.

“Specifically, defendants’ answer alleges as follows. Defendants ~ired Kagan Lubic in October 2012 to represent them as general counsel and in an action again~! the sponsor of 325 Fifth and certain subcontractors arising from the defective design, constr~ction, sale, marketing ·! ‘ and management of the condominium building located at 325 Fifth Avenue, New York, New York (the “building”), which was allegedly plagued with defects from th~ outset. Defendants allege that Kagan Lubic failed to take even the most basic steps to secure remedies against those responsible for the defective design and construction of the Building and ihat for nearly two i I years, Kagan Lubic “churned the file” and generated enormous legal bills.through prolonged ‘ negotiations and other pre-litigation tactics that were time consuming, costly and entirely I ineffective, including, inter alia, (i) retaining duplicative, superfluous experts which caused I defendants to incur thousands of dollars in additional fees; (ii) engaging i~ futile settlement discussions for nearly eighteen months; (iii) generating enormous legal feFs by spending countless hours addressing inconsequential maintenance issues in the buiIµing which, in many ‘ instances, cost Jess to remediate than the time spent addressing them; (iv) :frustrating any progress I toward reaching a settlement with the sponsor with respect to the mainten~nce issues by delaying nearly four months before responding to the sponsor’s offer to remediate certain conditions; (v) routinely raising additional maintenance issues which resulted in further delay and costs; and (vi) allowing nearly two years to lapse without filing a complaint in the action. Defendants further allege that “[b]ut for Kagan Lubic’s dilatory tactics, the defects in the Building would have been remediated by now, and the impaired value of the Condominium units in ~he Building resulting from the design and construction defects and ongoing litigation would ha~e been restored.”

Additionally, plaintiffs motion for an Order pursuant to CPLR § 32 I I(a)(7) dismissing defendants’ second counterclaim for a violation of Judiciary Law§ 487 on the ground that it fails to state a claim is denied. Judiciary Law§ 487(2) provides, in pertinent part, that an attorney who “willfully delays his client’s suit with a view to his own gain” is guilty of a misdemeanor and may be liable in treble damages. Jn order to sustain a cause of action for.a violation of Judiciary Law§ 487(2), the pleading must allege specific facts demonstrating the attorney’s alleged delay for his own gain and may not merely allege bare legal conclusions. See Bernstein v. Oppenheim & Co., P. C., 160 A.D.2d 428 (I st Dept 1990); see also Fleyshman v. Suckle & Schlesinger. PLLC, 91A.D.3d591 (2d Dept 2012). Here, defendants’ answer sufficiently states a claim for a violation of Judiciary Law§ 487(2). The second counterclaim alleges that plaintiff, instead of diligef\tly and vigorously pursuing defendants’ legal claims against the sponsor and the subcontractors, engaged in selfserving dilatory tactics that were designed to impede settlement discussions and the timely resolution of the dispute “in order to generate enormous legal fees with a ;view to its own gain.” Specifically, defendants allege that they retained plaintiff in October 2012, after an action had been commenced by Summons with Notice in July 2012, and that from t~e outset of the I representation, plaintiff”failed to take even the most basic steps to resolve [defendants’] claims” and that “[i]nstead, for nearly two years, [plaintiff] simply churned the file and generated enormous legal bills through prolonged negotiations and other pre-litigation tactics that were time consuming, costly, and entirely ineffective,” such as requiring additional unnecessary expert investigations, delaying filing a complaint for almost two years, stalling all opportunities to settle the underlying matter and continuing to attempt to settle the matter despite the knowledge that settlement attempts were futile. As these allegations are sufficient to state a claim for a violation of Judiciary Law§ 487, plaintiffs motion to dismiss the second counterclaim is denied. ”

Mr. Karp and Mr. Cangemi made an arrangement to purchase and fund some investment real estate.  Cangemi v Karp  2015 NY Slip Op 51185(U)  Decided on August 6, 2015  Supreme Court, Queens County  McDonald, J.  After a while Mr. Karp grew “weary” of the arrangement and sought to shake things up.  He sued not only his business partner, but the attorney too.  The case went badly for Karp.

“On or about September 2, 2013, defendant entered into an agreement to loan plaintiff the sum of $500,000.00. On September 3, 2013, plaintiff executed a mortgage in connection with the loan agreement. Both parties were represented by attorney Peter Mammis. An Escrow Agreement was executed on September 11, 2013 in which Mr. Mammis created an arrangement where the loan documents were held by him in escrow pending either repayment of the loan in full or a default by plaintiff.

Plaintiff transferred ownership of the subject property located at 31-17 Ditmars Boulevard on September 3, 2013 to Ditmars Properties LLC, a New York Limited Liability Company. Defendant held an 85% share of Ditmars Properties LLC and plaintiff held a 15% share of the Ditmars Properties LLC. Plaintiff collected rent and paid a monthly payment of interest to defendant.

The Escrow Agreement provides, inter alia, the mortgage has not and shall not be recorded; upon receipt of notice from defendant that plaintiff is in default of the Note, Mr. Mammis will release all documents held in escrow to defendant; and upon notice from defendant that plaintiff has satisfied in full his obligation pursuant to the Note, Mr. Mammis will destroy all documents held in escrow. The Note provides, inter alia, plaintiff shall make a monthly interest payment in the sum of $5,833.33 to defendant; the final balloon payment consisting of the principal sum of $500,000.00 shall be paid by plaintiff to defendant on or before October 1, 2015; and if plaintiff fails to make three consecutive installment payments when due or if he fails to make the balloon payment then the shares will be released to defendant and plaintiff will waive any rights or interest in such shares and any ownership interest in the subject premises.

At some point after executing the loan documents, defendant became weary of such arrangement and commenced an action on or about March 18, 2014 in Supreme Court, Queens County under Index Number 701835/2014 against Mr. Mammis and plaintiff for reformation of the loan documents and legal malpractice. Defendant also filed a notice of pendency against the subject property, recorded the mortgage, and paid the mortgage recording tax of $14,000.00 along with the recording fees.”

“The essential elements for pleading a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff’s performance pursuant to the contract, the defendant’s breach of his or her contractual obligations, and damages resulting from the breach (see Dee v Rakower, 112 AD3d 204 [2d Dept. 2013]; Elisa Dreier Reporting Corp. v Global NAPS Networks, Inc., 84 AD3d 122 [2d Dept. 2011]).

Here, it is undisputed that a contract exists. Plaintiff demonstrated his performance pursuant to the contract by tendering the monthly interest payments and by ultimately tendering the balloon payment. Although defendant alleges that plaintiff breached the contract by failing to make the May 1, 2014 and June 1, 2014 payments, pursuant to the loan documents, three months of nonpayment constituted a breach. As such, plaintiff demonstrated his compliance with the contract and also demonstrated defendant’s breach when defendant commenced the reformation action and filed the mortgage in direct contravention of the terms of the Escrow Agreement. Lastly, plaintiff alleged damages resulting from defendant’s breach including the $14,000.00 mortgage tax and the additional financing plaintiff incurred. As such, plaintiff sufficiently pled a cause of action for breach of contract.”

We’ve taken a look at Saviano v Corniccelo  2015 NY Slip Op 31447(U)  August 3, 2015
Supreme Court, New York County  Docket Number: 153168/2014  Judge: Kelly A. O’Neill Levy for the question of statute of limitations.  Now, when might an individual sue when he has already given his rights over to an LLC ?

On a motion to dismiss made pursuant to CPLR 3211, the court’s “task is to determine whether plaintiffs’ pleadings state a cause of aetion.” 51 I W 232nd Owners Corp. v .Jenn!fer Realty Co., 98 NY2d 144, 151-152 (2002). The court must construe Plaintiffs’ pleadings liberally, see Leon v Martinez, 84 NY2d 83, 88 (1994); CPLR 3026, and accept as true the facts alleged in the complaint and any submissions in opposition to the dismissal motion. 5 See 51 I W 232nd, 98 NY2d at 152. The Court must accord Plaintiffs “the benefit of every favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory.” Leon, 84 NY2d at 87-88. The dismissal motion must be denied if, from the pleading’s “four corners, factual allegations are discerned which taken together manifest any cause of action cognizable at law.” Guggenheimer v Ginzburg, 43 NY2d 268, 275 (1977).

Pursuant to CPLR 3211 (a)(3), a defendant may seek dismissal of an action where “the party asserting the cause of action has not legal capacity to sue.” See also Hecht v Andover Assoc. Mgt. Corp., 114 AD3d 638, 640 (2d Dept 2014). Standing is a threshold determination that the plaintiff has “an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” Caprer v Nussbaum, 36 AD3d 176, 182 (2d Dept 2006). “A plaintiff generally has standing only to assert claims on behalf of himself or herself.” Id. Under longstanding common law, a court has “no inherent power to right a wrong unless thereby the civil, property or personal rights of the plaintiff in the action or the petitioner in the proceeding are affected.” Socy. of Plastics Indus., Inc. v County of Suffolk, 77 NY2d 761, 772 (1991 )(internal citations omitted). In this regard, Defendants argue that Saviano, having assigned his rights and interests in the Contract to the LLC, never actually owned the Building, and as such cannot maintain any claims which flow “exclusively” from losses sustained by the LLC. (Defendants’ Memorandum of Law, dated Sept. 11, 2014, p. 14 ). The court disagrees. Defendants’ position interprets the standing issue too narrowly. The appropriate inquiry is whether Saviano has been aggrieved by Defendants’ actions such that he should be “allowed access to the courts to adjudicate the merits” of his individual claims. Caprer, 36 AD3d at 182. Assuming Defendants failed to advise Saviano of the air rights issue and the existence of the title report before the closing, and Saviano consequently lost the opportunity to exercise a termination clause in the Contract of Sale and the ability to live with his family in the Planned Duplex, there are sufficient facts to “cast [Saviano’s individual claims] in a form traditionally capable of judicial resolution” such that Saviano has standing to maintain them. Schlesinger v Reservists Comm. to Stop the War, 418 us 208, 220-221 (1974). “

Saviano v Corniccelo  2015 NY Slip Op 31447(U)  August 3, 2015  Supreme Court, New York County  Docket Number: 153168/2014  Judge: Kelly A. O’Neill Levy discusses how an individual commencing an action might toll the statute of limitations for an LLC which then joins in.

“Plaintiffs allege in their complaint that in or around September 2010, Saviano identified a four-story residential brownstone building located at 218 East 301 h Street, New York, New York (“the Building”), then owned by Dianova USA, Inc. (“Seller”), for purchase. Saviano intended to add a fifth floor to the Building, combining the fourth and fifth floors to create a duplex for himself and his family (“the Planned Duplex”). Saviano retained Defendants in connection with the purchase thereof. Saviano concedes that he did not sign a retainer agreement with Defendants.

In June of 2011 Defendants received a title report for the Building which showed that the air and development rights over the Building had already been sold, effectively preventing any upward construction. Plaintiffs allege that Defendants neither consulted the title report nor informed Saviano of the contents thereof prior to the closing. (Amended Complaint  26). On June 14, 2011, acting on the advice of the Defendants, Saviano assigned all rights and interests in the Contract to the LLC. Defendants told Saviano the assignment was “a nominal and ministerial act” designed to insulate Saviano from liability. (Amended Complaint 37). Saviano signed the Assignmen·t of Contract individually and as a managing member of the newly created LLC. Saviano did not sign a retainer agreement with Defendants on behalf of the LLC. The closing was held on June 21, 2011. In or around May 2012, during a “chance discussion with a neighbor,” Plaintiffs learned that the air and development rights over the Building had been sold, making it impossible to construct the Planned Duplex. (Amended Complaint 40).”

“Under CPLR 3211 (a)(5), a defendant may obtain dismissal of one or more causes of action on the ground that the cause of action is barred by the statute of limitations. In general, a legal malpractice action must be commenced within three years of the date of accrual of the claim. CPLR 214(6); see also Symbol Tech., Inc. v Deloitte & Touche, LLP, 69 AD3d 191, 194 (2d Dept 2009). Here, Defendants argue that the LLC’s legal malpractice claim is barred by the three-year statute of limitations. According to Defendants, the claim accrued on June 21, 2011, the date of the closing, and the Amended Complaint (filed June 21, 2014), which for the first time asserted claims on behalf of the LLC, is untimely. Taken together with Defendants’ assertion that Saviano has no standing to maintain his individual claims, Defendants argue that there are no valid pre-existing claims to which the LLC’s claims can relate back. Thus, Defendants claim that sustaining the LLC’s claims will “severely prejudic[e]” their defense and preparation of the case. (Defendants’ Reply Memorandum of Law, dated Nov. 11, 2014, p. 7). An otherwise untimely malpractice claim may survive a motion to dismiss ifthe claim relates back to an earlier duly filed complaint where (1) both claims arise out of the same transactions or occurrences, and (2) the new and original plaintiff are so closely related that the original plaintiffs claims would have given the defendant “notice of the transactions, occurrences … to be proved [by] the amended pleadings.” Giambrone v Kings Harbor Multicare Ctr., 104 AD3d 546, 548 (I st Dept 2013). For a defendant to be prejudiced, there must be some indication that the he was “hindered in the preparation of his case or has been prevented from taking some measure in support of his position.” Id. Although the court agrees that Plaintiffs’ malpractice action accrued on June 21, 2011, Defendants’ arguments are unavailing. Here, the LLC’s claims satisfy both elements of the relation-back standard. There can be no dispute that both sets of claims arise from the same transactions and occurrences inasmuch as the LLC’s allegations in the Amended Complaint are essentially identical to Saviano’s original, timely complaint. In this same vein, the LLC and Saviano are so closely related that Saviano’s original claims gave Defendants notice of the transactions or occurrences underlying the LLC’s claims. Notably, Plaintiffs allege that Saviano assigned his rights and interests to the LLC on Defendants’ advice. Moreover, Defendants concede that they informed Plaintiffs that the original complaint failed to name the LLC as a party. (Defendants’ Memorandum of Law, dated Sept. 11, 2014, p. 5). Therefore, it is evident that Defendants were aware of the LLC’s claims as the actual Building owner when Saviano filed his original complaint. “

It is often said (one sees this in legal malpractice insurance applications and literature) that law suits for attorney fees will invariably trigger a legal malpractice counterclaim.  This perception tarnishes the legal malpractice field in general, yet it has merit.  Godosky & Gentile, P.C. v Brown
2015 NY Slip Op 31462(U)  August 4, 2015  Supreme Court, New York County  Docket Number: 153605/14  Judge: Barbara Jaffe is a good example of how the “account stated” principal, whether pled or not, affects the outcome in these fee cases.

“This action arises from plaintiff’s representation of defendant in an attorney disciplinary matter. Sometime in late 2012, the Departmental Disciplinary Committee (Committee) for the Appellate Division, First Department, commenced an investigation into defendant’s affairs when checks written on her attorney escrow account were returned by her bank for insufficient funds. (NYSCEF 11, 30). On December 14, 2012, defendant hired plaintiff law firm to represent her in the matter, and signed an engagement letter whereby she agreed to pay plaintiff an initial retainer of $5,000 and an hourly rate of $600 plus disbursements. NYSCEF 11 ). Shortly thereafter, defendant sent plaintiff a check for the initial retainer fee of $5,000. (NYSCEF 10). On June 13, 2013 the Committee charged defendant with nine violations of the Rules of Professional Conduct, alleging, as pertinent here, that defendant had improperly used her attorney escrow account for personal and business purposes, that she had allowed her accountant, a nonattomey, to be a signatory on said account and issue checks therefrom to cash and pay her personal and business expenses, and that she used the escrow account to shield assets from the Internal Revenue Service (IRS). (NYSCEF 24, 30). On October 25, 2013, plaintiff sent defendant an invoice for $31,150 representing fees incurred to date. (NYSCEF 14). ”

“Plaintiff claims that it performed legal services for defendant between December 2012 and February 2014 in connection with the Committee’s investigation and prosecution, and alleges that defendant acknowledged receipt of the October 2013 and January 2014 invoices. According to plaintiff, defendant did not dispute the outstanding balance, and despite several warnings, failed to pay. It thus argues that summary judgment is appropriate on its unpleaded cause of action for an account stated, as there is no dispute that the parties entered a binding retainer agreement, that it rendered services thereunder, that invoices were sent to defendant, and that defendant registered no objection. (NYSCEF 7). In response, defendant alleges that she orally objected to the invoices as excessive in the context of plaintiffs failure to perform as promised under the agreement by failing to call her accountant as a key witness, and that when she discovered the impact this oversight had on the outcome of her case, she fired plaintiff. (NYSCEF 24). She also claims that the $30,000 plaintiff charged for reviewing her bank statement was excessive and unjustified. (NYSCEF 26). Defendant also accuses plaintiff of repeatedly assuring her that she would prevail in her case before the Committee, and specifically, that plaintiffs lead attorney bragged to her that he had close relationships with Committee members, which she claims was a pretext to engage her as a client. (Id.). Claiming a need to depose plaintiff attorneys in order to elicit facts to defeat its motion and inform her counterclaims, defendant asks that a decision on the motion be stayed pending the completion of discovery. (NYSCEF 24). In reply, plaintiff alleges that defendant’s opposition, in the form of an untimely cross motion for leave to amend, does not address its motion for summary judgment other than to baselessly assert legal malpractice. It argues that defendant’s allegation that she objected to the invoices does not constitute a defense to a cause of action for breach of contract and is, in any event, refuted by the annexed emails and letters. Plaintiff also claims that defendant fails to establish that further discovery would reveal facts allowing her to develop a defense to her failure to pay her legal bills or otherwise raise a triable issue as to defendant’s alleged breach of their agreement. (NYSCEF 32).”

“Plaintiff argues that it is entitled to summary judgment on an unpleaded cause of action for an account stated. If supported by sufficient facts, summary judgment may be awarded on an unpleaded cause of action. (Boyle v Marsh & McLennan Cos., Inc., 50 AD3d 1587, 1588 [4th Dept 2008], iv denied 11 NY3d 705). A party may maintain an action for an account stated upon submission of the underlying contract, the unpaid invoices, and evidence that the defendant received and retained the invoices without objection. (Salamone v Cohen, 129 AD3d 877, 879 [2d Dept 2015]. The reasonableness of the plaintiff’s fees is irrelevant as the “client’s act of holding the statement without objection will be construed as acquiescence as to its correctness.” (Lapidus & Assoc., LLP v Elizabeth St., Inc., 92 AD3d 405, 405-406 [1st Dept 2012]). Moreover, the non-movant’s conclusory allegations that oral objections were registered with the movant are insufficient to raise a triable issue. (Stephanie R. Cooper, P. C. v Robert, 78 AD3d 572, 573 [1st Dept 201 O]). Here, plaintiff offers undisputed evidence of the retainer agreement and two detailed invoices delivered to defendant, along with various emails wherein defendant acknowledged receipt of the invoices and expressed her intention to pay. Plaintiff therefore has established, prima facie, entitlement to summary judgment on its unpleaded cause of action for an account stated. (See Morrison Cohen Singer & Weinstein, LLP v Waters, 13 AD3d 51, 51-52 [Pt Dept 2004] [plaintiff entitlement to summary judgment upon showing that invoices were retained by defendant without objection for sufficient length of time]). While defendant alleges that she orally objected to the account upon receipt of the October 2013 and January 2014 invoices, she fails to specify the time and/or the content of the objections, or to whom she registered those objections, and her allegations are contradicted by her January 2014 emails wherein she not only acknowledged the sum owed, but praised the quality of plaintiff’s services. Defendant thus fails to raise a triable issue of fact. (See Morrison Cohen Singer & Weinstein v Ackerman, 280 AD2d 355, 356 [1st Dept 2001] [self-serving and conclusory allegation that defendant orally objected to invoices for legal fees insufficient to defeat motion for summary judgment]; see also Mintz & Gold LLP v Daibes, 125 AD3d 488, 489 [1st Dept 2015] [defendant’s conclusory assertion by sworn affidavit that he advised plaintiff that invoices were “incorrect” insufficient to raise triable issue]; cf Jaffe & Asher v Cushing, 289 AD2d 17, 17 [1st Dept 2001] [defendant raised triable issue of fact by setting forth “ample specifics of her objections, including when and to whom made, as well as circumstances surrounding the retainer and course of representation that tend to explain why the bills were objectionable”]). Furthermore, defendant’s allegation that the $30,000 charged was unreasonable in light of the work required is also insufficient to raise a triable issue, as the reasonableness of the fee charged on an account stated is irrelevant. (See A1intz & Gold LLP, 125 AD3d at 490 [defendant’s challenge to reasonableness of firm’s fees was irrelevant to defeat summary judgment on account stated]; cf Bomba v Silberfein, 238 AD2d 261, 262-263 [1st Dept 1997] [as question of fact existed on whether defendants’ retention of plaintiff’s invoices resulted in account stated, defendants’ challenge to reasonableness of plaintiff’s fees precluded summary judgment on damages]). “

Hahn v Dewey & Leboeuf Liquidation Trust  2015 NY Slip Op 31481(U)  August 3, 2015  Supreme Court, New York County  Docket Number: 650817/2014  Judge: Eileen Bransten is an example of how high-flying plaintiffs can lose a legal malpractice case through the passage of time.  The statute of limitations in legal malpractice highly favors the attorney, and these two plaintiffs lost their case because they were late.

“In this action, plaintiffs assert legal malpractice, fraud, and negligent representation claims against their former legal counsel, defendants Dewey & LeBoeuf Liquidation Trust (“Liquidation Trust0 ), Sidley Austin LLP ( 11Sidley11 ), and Proskauer Rose LLP ( 11Proskauer”). All defendants now seek dismissal of plaintiffs’ Corrected Amended Complaint (“Complaint”) in its entirety, pursuant to CPLR 321 l(a)(S) and (a)(7). In addition, defendants Liquidation Trust and Sidley also contend that the fraud claim asserted against them fails under CPLR 3016(b ). Plaintiffs oppose and request leave to fi]e a second amended complaint, omitting the negligent representation claim and adding a Judiciary Law§ 487 attorney misconduct claim, based upon newly discovered evidence. For the reasons that follow, defendants’ motions are granted, plaintiffs’ cross-motion is denied, and plaintiffs’ action is dismissed.”

“In late 2000, plaintiffs Roy E. Hahn and Larry J. Austin, tax-advantaged investment strategists working in the United States and Asian financial markets, created and developed an investment strategy involving Asian distressed debt that became known as the “Non-Performing Loan Investment Program11 ( 11NPL Program”). The NPL Program involved the purchase of the distressed debt of fundamentally sound companies from the Federal Deposit Insurance Corporation and the Resolution Trust Corporation that could be used to offset tax liabilities. Hahn and Austin sold the debt to investors through plaintiff Chenery Associates, Incorporated (“Chenery”). Plaintiffs retained Graham R. Taylor, a LeBoeuf tax attorney, to render tax advice to them regarding the NPL Program. Taylor advised plaintiffs that he believed that plaintiffs’ investment strategy was legally viable and “worked” from a tax perspective. Plaintiffs engaged LeBoeuf as their legal advisor with regard to the NPL Program Plaintiffs also contacted Sidley, which was their then-general legal counsel. Sidley advised plaintiffs that it also believed the NPL Program would work and agreed to render United States federal income tax benefit opinions to plaintiffs’ investors, if the NPL Program were appropriately structured. ”

“Section 321 l(a)(S) of the CPLR permits dismissal of a claim that is barred by the applicable statute limitations. “On a motion to dismiss a cause of action pursuant to CPLR 321 l(a)(5) on the ground that it is barred by the statute of limitations, a defendant bears the initial burden of establishing, prima facie, that the time in which to sue has expired.” Benn v. Benn, 82 A.D.3d 548, 548 (1st Dep1 t 2011). Defendants have met that burden. The legaJ malpractice claims are untimely asserted. An action to recover for attorney malpractice is governed by a three-year statute of limitations. regardless of whether the underlying theory is based on contract or tort. McCoy v. Feinman, 99 N.Y.2d 295, 301 (2002); see CPLR 214(6). The three-year limitations period accrues when the malpractice is committed, not when the client discovers it, even if the plaintiff is unaware of any malpractice, damages, or injury. McCoy v. Feinman, 99 N.Y.2d at 300-301; Williamson v. PricewaterhouseCoopers LLP, 9 N.Y.3d 1, 7-8 (2007). Contrary to plaintiffs’ suggestion, a legal malpractice claim does not accrue when the IRS assesses a deficiency. Instead, a tax-related legal malpractice claim accrues on the date that the defendants issued their tax opinion letter, even where the plaintiffs discover years later that their attorneys tax advice was incorrect. See Landow v. Snow Becker Krauss, P.C., 111A.DJd795, 795-796 (2d Dep1 t 2013) (citing Ackerman v. Price Waterhouse, 84 N.Y .2d 535, 541 (1994)). 11 [W]hat is important is when the malpractice was committed, not when the client discovered it.” Landow, 111 A.D.3d at 796; Arnold v. KPMG LLP, 334 Fed. App’x 349, 352 (2d Cir. 2009) (holding that, pursuant to New York law, plaintiffs’ legal malpractice claim was subject to three-year statute of limitations, and accrued when defendant law firm issued legal opinion letter at issue). As the Court of Appeals explained in Ackerman v Price Waterhouse: [w]e reject plaintiffs’ proposition on this appeal that a Statute of Limitations can only accrue in a malpractice action against an accountant when the IRS assesses a deficiency, a date that necessarily varies depending on the type of deficiency notice received by the taxpayer. The policies underlying a Statute of Limitations fairness to defendant and society’s interest in adjudication of viable claims not subject to the vagaries of time and memory – demand a precise accrual date that can be uniformly applied, not one subject to debate or negotiation … . Indeed, to base a limitations period on the potentiality of IRS action defies the essential premise of temporal finality embodied in Statutes of Limitations. Ackerman v. Price Waterhouse, 84 N.Y.2d 535, 541-542 (1994). “

You’ve put together a nice sum of money, and now you want to buy that townhouse in Manhattan.  Surely, its the crown of real estate…unless you are unable to put a 5th story on top because the prior owners already sold the air rights.  So, you find out, and unfortunately, cancel the contract?  Not in this case, where the allegations are that the law firm negligently failed to tell the contractee that the air rights were already sold, and failed to tell him while he could still cancel the contract.

Saviano v Corniccelo  2015 NY Slip Op 31447(U)  August 3, 2015  Supreme Court, New York County  Docket Number: 153168/2014  Judge: Kelly A. O’Neill Levy tells us how the initial motion practice comes out.

“Plaintiffs allege in their complaint that in or around September 2010, Saviano identified a
four-story residential brownstone building located at 218 East 301 h Street, New York, New York (“the Building”), then owned by Dianova USA, Inc. (“Seller”), for purchase. Saviano intended to add a fifth floor to the Building, combining the fourth and fifth floors to create a duplex for himself and his family (“the Planned Duplex”). Saviano retained Defendants in connection with the purchase thereof. Saviano concedes that he did not sign a retainer agreement with Defendants. In November 2010, Saviano placed a formal bid on the Building, which the Seller accepted. On or about February 3; 2011, they entered into a Contract of Sale (“Contract”) to purchase the Building for $2.2 million. Prior to entering into the Contract, Saviano “specifically and explicitly” told Defendants he intended to create the Planned Duplex. (Amended Complaint, ,-i 20). Saviano told Defendants that he was a first-time buyer, inexperienced in real property matters, and was fully reliant on Defendants’ knowledge, experience and expertise. (Amended Complaint , 26). Defendants “promised” Saviano that there were “no legal impediments” to construction of the Planned Duplex. (Amended Complaint ,-21)”

In June of 2011 Defendants received a title report for the Building which showed that the air and development rights over the Building had already been sold, effectively preventing any upward construction. Plaintiffs allege that Defendants neither consulted the title report nor informed Saviano of the contents thereof prior to the closing. (Amended Complaint~ 26). On June 14, 2011, acting on the advice of the Defendants, Saviano assigned all rights and interests in the Contract to the LLC. Defendants told Saviano the assignment was “a nominal and ministerial act” designed to insulate Saviano from li~bility. (Amended Complaint~ 37)°. Saviano signed the Assignmen·t of Contract individually and as a managing member of the newly created LLC. Saviano did not sign a retainer agreement with Defendants on behalf of the LLC. The closing was held on June 21, 2011. In or around May 2012, during a “chance discussion with a neighbor,” Plaintiffs learned that the air and development rights over the Building had been sold, making it impossible to construct the Planned Duplex. (Amended Complaint ~ 40). Plaintiffs assert that they would not have entered into any agreement to purchase the Building had they been aware ofthe title report, and that, but for the Defendants’ assurances and promises that construction of the Planned Duplex was permissible, Saviano would have exercised the termination option in the Contractto mitigate his losses prior to closing. Based on these allegations, Plaintiffs assert causes of action for professional malpractice and breach of contract. They seek to recover $3 .million in monetary damages for each cause of action and attorneys’ fees.”

“Standing is a threshold determination that the plaintiff has “an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” Caprer v Nussbaum, 36 AD3d 176, 182 (2d Dept 2006). “A plaintiff generally has standing only to assert claims on behalf of himself or herself.” Id. Under longstanding common law, a court has “no inherent power to right a wrong unless thereby the civil, property or personal rights of the plaintiff in the action or the petitioner in the proceeding are affected.” Socy. of Plastics Indus., Inc. v County of Suffolk, 77 NY2d 761, 772 (1991 )(internal citations omitted). In this regard, Defendants argue that Saviano, having assigned his rights and interests in the Contract to the LLC, never actually owned the Building, and as such cannot maintain any claims which flow “exclusively” from losses sustained by the LLC. (Defendants’ Memorandum of Law, dated Sept. 11, 2014, p. 14 ). The court disagrees. Defendants’ position interprets the standing issue too narrowly. The appropriate inquiry is whether Saviano has been aggrieved by Defendants’ actions such that he should be “allowed access to the courts to adjudicate the merits” of his individual claims. Caprer, 36 AD3d at 182. Assuming Defendants failed to advise Saviano of the air rights issue and the existence of the title report before the closing, and Saviano consequently lost the opportunity to exercise a termination clause in the Contract of Sale and the ability to live with his family in the Planned Duplex, there are sufficient facts to “cast [Saviano’s individual claims] in a form traditionally capable of judicial resolution” such that Saviano has standing to maintain them. Schlesinger v Reservists Comm. to Stop the War, 418 us 208, 220-221 (1974). ”

On Friday we started to talk about a case in which a construction worker suffered electrical shock and fell 150″ to his death.  The professionals in the case won dismissal, leaving the land owner and others to defend their actions.  Today, we look at the land owner in Mulhall v Archdiocese of N.Y.  2015 NY Slip Op 31378(U)  July 24, 2015  Supreme Court, New York County  Docket Number: 151656/12  Judge: Ellen M. Coin.

“On October 13, 201 l, Janusz Wojciech Zdybel (Zdybel) died while working for third-party
defendant West NY in a church on the upper west side. Along with his colleague, Ruslan
Brianyk (Brianyk), Zdybel was working from a ladder placed on a catwalk in the attic of the
church. Brianyk and Zdybel were installing safety equipment for a renovation job on the
church’s roof. More specifically, they each held one end of a bracket that they were trying to
drive through the roof (Brianyk dep at 115-118). A metallic sheathed electrical cable leaned
against the ladder as they worked (id. at 122, George Grenier aff, if 17). While Brianyk held
onto a beam next to the ladder with one hand and the bracket with the other, Zdybel held the
bracket with one hand and in the other he held a pipe that he used to hammer the bracket into
place (Brianyk dep. at 118). When Zdybel’s end of the bracket suddenly shifted into place, both
men received an electric shock (id. at 119). While Brianyk remained on the ladder, Zdybel was
convulsed, let go of everything, and fell to the floor 150 feet below (id. at 119 – 120, 142;
Complaint¶3 at 2 ). ”

“The roof renovation project that led to Zdybel’s death arose from an agreement between
the Church and West NY entitled “The Church of Saint Paul the Apostle Church Building, Phase
2, Roof Areas Restoration Project” (Ex W to the Affirmation of Cruz M. Williams dated Nov. 3,
2014). The Church owns the subject property. The Archdiocese, ABC, and the Finance Council
are affiliated with the Church. Old Structures provided structural engineering services to the
Church for exterior renovation. ”

“Labor Law § 200 “is a codification of the common-law duty imposed upon an owner or
general contractor to provide construction site workers with a safe place to work” (Comes v New York State Elec. & Gas Corp., 82 NY2d 876, 877 [ 1993 ]). Cases under Labor Law § 200 fall into two broad categories: those involving injury caused by a dangerous or defective condition at the worksite, and those caused by the manner or method by which the work is performed (Urban v No. 5 Times Sq. Dev., LLC, 62 AD3d 553, 556 [1st Dept 2009]).
Where, as here, the defect arises from a dangerous condition at the work site, instead of
the methods or materials used by plaintiff and his employer, an owner or contractor “is liable
under Labor Law§ 200 when [it] created the dangerous condition causing an injury or when [it] failed to remedy a dangerous or defective condition of which [it] had actual or constructive
notice” (Mendoza v Highpoint Assoc., IX, LLC, 83 AD3d 1, 9 [1st Dept 2011] [internal quotation marks and citation omitted]; see also Minorczyk v Dormitory Auth. of the State of NY, 74 AD3d 675, 675 [1st Dept 2010]). Constructive notice is generally found when the dangerous condition is visible and apparent, and exists for a sufficient period to afford a defendant an opportunity to discover and remedy the condition. A defendant demonstrates lack of constructive notice by producing evidence of its maintenance activities on the day
of the accident, and specifically that the dangerous condition did not exist when the area was last inspected or cleaned before plaintiff fell (Ross v Betty G. Reader Revocable Trust, 86 AD3d 419, 421 [1st Dept 2011] [citations omitted]).

Here, Zdybel’s accident arose from the Church’s faulty electrical system. The Church
argues for a narrow view of the defect; specifically, it contends that Zdybel’s accident arose from a defective light junction box that electrified a cable leaning against Zdybel’ s ladder.
If the defect is viewed broadly as the Church’s faulty electrical system, there is at least a
question of fact as to whether the Church had actual notice. In response to Stivale’s April 19,
2011 email expressing concerns about electrical problems in “vault areas” of the church,
Martinez, the pastor, referred to his own concern relating to the electrical system as a whole:
“Thank you for your comments about the electrical system. We have been aware of this problem for some time … A review of our electrical system is a very high priority for us in coming months” (Ex 2 to the Schacht Aff.). If the defect is viewed narrowly, as a defective light junction box, then the Church fails to make a prima facie showing that it did not have constructive notice of the defect. The Church fails to provide any evidence that it inspected the attic area where Zdybel was working and that, upon inspection, the defective light box was not apparent. Indeed, the Church fails to provide any evidence that it upheld its duty to inspect (see McLean v 405 Webster Ave. Assoc., 98 AD3d 1090, 1093 [2d Dept 2012] [“The owner’s duty to provide a safe place to work encompasses the duty to make reasonable inspections, and the question of whether the danger should have been apparent upon visual inspection is generally a question of fact”] [internal quotation marks and citation omitted]; see also Urban, 62 AD3d at 55 [holding that a property owner’s duty to provide a safe workplace “encompasses the duty to make reasonable inspections to detect unsafe conditions”]). In light of the failure of the Church defendants to make a prima facie showing of entitlement to judgment on this issue, the branch of their motion seeking dismissal of plaintiffs Labor Law § 200 and common-law negligence claims as against the Church is denied.

Plaintiff argues that the court, under CPLR 3212 (b ), should grant it summary judgment
as to liability under Labor Law § 241 ( 6) based on the violation of 12 NYC RR § 23-1.13 and 12
NYCRR § 23-1.21 (b) (7). Here, the applicability and violation of 12 NYCRR § 23-1.13 is so
clear as to warrant use of the court’s power under CPLR 3212 (b ). 12 NYCRR § 23-1.13 (b) ( 4),
“Electrical hazards, Protection of Employees,” provides, in a relevant part, that: No employer shall or permit an employee to work in such proximity to any part of an electric power circuit that he may contact such circuit in the course of his work unless the employee is protected against electric shock by de-energizing the circuit and grounding it or by guarding such circuit by effective insulation or other means.   12 NYCRR § 23-1.13 (b) ( 4) is sufficiently specific to serve as a predicate for liability under Labor Law § 241 (6) (De/Rosario v United Nations Fed. Credit Union, 104 AD3d 515, 516 [1st Dept 2013]). Moreover, it is plain that the Church violated this provision by failing to protect Zdybel from an electrical power circuit. While the Church defendants suggest that there may be an issue of fact as to comparative negligence, nothing in the record suggests that Zdybel was negligent. As such, plaintiff is entitled to summary judgment as to liability on his Labor Law § 241 ( 6) claim against the Church.”