This case is the sad story of bad medicine, bad guardianships and death. Sutch v Sutch-Lenz
2015 NY Slip Op 04692  Decided on June 4, 2015  Appellate Division, Third Department.  It starts off with medical malpractice, the death of a father-husband in a flight school training accident, success in the medical malpractice and a money quarrel between mother and son. None of it is good.  Plaintiff’s problem is the lack of privity.

“In 1996, plaintiff’s mother, defendant Debera C. Sutch-Lenz, and father, Alfred Sutch (hereinafter decedent), commenced a medical malpractice action based upon injuries allegedly sustained by Sutch-Lenz while undergoing breast reduction surgery. Defendants William J. Cade and Cade & Saunders, P.C. (hereinafter collectively referred to as defendants) ultimately came to represent Sutch-Lenz and decedent in that action. In March 2000, prior to the trial of the medical malpractice matter, decedent was killed in a light plane crash in Saratoga County and, in April 2000, Sutch-Lenz was granted limited letters of administration for purposes of pursuing both decedent’s derivative claim in the context of the medical malpractice action and a wrongful death action. The medical malpractice action subsequently proceeded to trial and, by judgment entered in August 2001, decedent’s estate was awarded $100,000 on his derivative claim (Sutch v Yarinsky, 292 AD2d 715 [2002]).”

In the interim, Sutch-Lenz, in her capacity as the administrator of decedent’s estate and while represented by defendants, commenced a wrongful death action against the aircraft’s manufacturer and the flight school where decedent had been taking lessons. A proposed settlement of that action subsequently was reached and, in conjunction therewith, Supreme Court appointed defendant James G. Snyder to serve as guardian ad litem for plaintiff (born in 1993) and his sister, Jessica Sutch (born in 1989). After reviewing the proposed distribution, Snyder issued a report to Supreme Court recommending that the settlement be approved. Supreme Court thereafter authorized Sutch-Lenz to settle the wrongful death action,^[FN1] and plaintiff’s share of the proceeds was used to purchase annuities in his name.

There is no question that a legal malpractice claim requires — in the first instance — “the existence of an attorney-client relationship” (Arnold v Devane, 123 AD3d 1202, 1203 [2014]). Plaintiff does not contend, and the record does not otherwise reflect, that he had a contractual relationship with defendants. Rather, plaintiff argues that because defendants represented Sutch-Lenz in her capacity as the administrator of decedent’s estate in both the medical malpractice and wrongful death actions and plaintiff, in turn, is a beneficiary of decedent’s estate, it necessarily follows that defendants were duty bound to represent plaintiff’s best interests in the context of those two actions. The flaw in plaintiff’s argument on this point is that “[i]n New York, a third party, without privity, cannot maintain a claim against an attorney in professional negligence, absent fraud, collusion, malicious acts or other special circumstances” (Estate of Schneider v Finmann, 15 NY3d 306, 308-309 [2010] [internal quotation marks and citation omitted]; accord Zinnanti v 513 Woodward Ave. Realty, LLC, 105 AD3d 736, 737 [2013]; cf. Leff v Fulbright & Jaworski, L.L.P., 78 AD3d 531, 532 [2010],lv denied 17 NY3d 705 [2011]). Although a limited exception has been carved out with respect to an action brought by the personal representative of an estate, “strict privity remains a bar against beneficiaries’ and other third-party individuals’ estate planning malpractice claims absent fraud or other circumstances” (Estate of Schneider v Finmann, 15 NY3d at 310; see Leff v Fulbright & Jaworski, L.L.P., 78 AD3d at 532).”

Today, we will examine the criminal conviction – legal malpractice case from Plaintiff’s point of view.  Dawson v Schoenberg
2015 NY Slip Op 04603  Decided on June 3, 2015  Appellate Division, Second Department is really a disheartening view of human interactions.  It seems that everyone in this story was poorly treated.

From the decision on Plaintiff’s motion for summary judgment:

“In a prior criminal proceeding, the plaintiff was convicted of three counts of course of sexual conduct against a child and one count of sexual abuse in the second degree based upon allegations that she sexually abused two of her children over a period of years. On appeal, this Court reversed the judgment of conviction on the grounds that the plaintiff was deprived of the effective assistance of counsel and that, when viewed as whole, the manner in which the trial was conducted deprived her of her right to a fair trial. Accordingly, this Court remitted the matter to the County Court, Nassau County, for a new trial before a different Judge (see People v Dean, 50 AD3d 1052). After the new trial, the plaintiff was acquitted of the charges against her.

To recover damages for legal malpractice, a plaintiff must establish that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (see McCoy v Feinman, 99 NY2d 295, 301-302; Biberaj v Acocella, 120 AD3d 1285, 1286). Even where a plaintiff establishes that his or her attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by members of the legal profession, the plaintiff must still demonstrate causation (see Di Giacomo v Michael S. Langella, P.C., 119 AD3d 636, 638).

For the reasons stated more fully in our decision and order in a companion appeal (see Dawson v Schoenberg, _____ AD3d _____ [Appellate Division Docket No. 2013-11367; decided herewith]), the plaintiff failed to demonstrate, prima facie, that her convictions were “due to the [*2]attorney’s actions alone and not due to some consequence of [her] guilt” (Britt v Legal Aid Socy., 95 NY2d 443, 447; see Dombrowski v Bulson, 19 NY3d 347, 350). Accordingly, the Supreme Court properly denied the plaintiff’s motion for summary judgment on the issue of liability, without regard to the sufficiency of the papers submitted in opposition (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851).”

Tomorrow, we’ll look at this case from Defendant’s side.

Central Parking Sys. of N.Y., Inc. v David Rozenholc  & Assoc.  2015 NY Slip Op   0926(U)  June 3, 2015  Supreme Court, New York County  Docket Number: 155526/13  Judge: Shlomo S. Hagler is a quintessential Manhattan story.  While one does not think of driving and parking as a natural occupation of the Manhattan fauna, in this case there is lots and lots of money involved.  A parking lot on West 28th Street  generated a lot of income, with which traveled a lot of litigation.

“This action pertains to a Jot located at 140 West 28th Street in Manhattan (“Premises”). Non-party 140 West 28th Street Associates, LLC (“Former Landlord”), was the owner of Premises. On March 16, 2007, Former Landlord executed a lease with non-party 140 West Associates, LLC (“Former Tenant”) (see Abbott Affidavit, sworn to on November 14, 2013 [“Abbott Aff.”], Exhibit “A” [“Lease Agreement”]).

In 2010, Former Tenant allegedly stopped making monthly rent payments to Former Landlord. In September 2010, Former Landlord commenced a holdover proceeding (“Holdover Proceeding”) against Former Tenant in the Civil Court, County of New York (Index No. L&T 82056/10) (see Shrewsberry Affirmation, dated September 13, 2013 [“Shrewsberry Aff.”], Exhibit “B” [Verified Holdover Petition]). The Verified Holdover Petition named Former Tenant as respondent and plaintiff as respondent-undertenant (see id.). In that proceeding, 2 [* 2] Former Landlord sought: (l) a judgment of eviction, awarding Former Landlord possession of Premises; (2) a judgment against Former Tenant for use and occupancy of not less than $50,000 a month from April 24, 20101 until the date of the judgment; and (3) an award oflegal fees (id.). Plaintiff and Former Tenant retained Rozenholc & Associates to represent them in the Holdover Proceeding (Complaint, ‘l]’l] 22-23). Apparently, Pritchard, Horowitz, and Rozenholc of Rozenholc & Associates were assigned to that case (id., ‘I] 26), and Roberts & Roberts worked with Rozenholc & Associates as co-counsel. Rozenholc & Associates’interposed an answer on behalfofplaintiffand Former Tenant (id., ‘1]’1] 26-27; see also Abbott Aff., Exhibit “E”).

On September 28, 2011, Former Tenant unilaterally assigned to non-party West 28th Street Ground Lease Corp. (“New Tenant”) all of Former Tenant’s “right, title and interest in and to that certain Agreement of Lease dated May 16, 2007” between Former Landlord and Former Tenant (Shrewsberry Aff., Exhibit “I”). Former Tenant also unilaterally assigned in writing to New Tenant “all of its rights, title and interest in” the Holdover Proceeding and authorized New Tenant “to proceed with the defense of such suit … and to execute all papers necessary for the continuation of said suit” (id., Exhibit “H”). Former Tenant also agreed “to fully cooperate with [New Tenant] in arranging for a substitution of counsel and, at [New Tenant’s] election, to substitution of [it] in and for [Former Tenant] in” the Holdover Proceeding (id.).

Plaintiff alleges that Kriss & Feuerstein: (I) advised it to execute the Stipulation even though plaintiff “had no obligation to pay rent or use and occupancy” (Complaint, ‘1[ 45); (2) “did not advise plaintiff that signing such a stipulation would potentially expose [it] to a claim for use and occupancy in the amount of$82,000 per month” (id., ‘1f 46); (3) informed plaintiff”that in signing the stipulation, the matter would be resolved” (id., ‘1[.48); and (4) did not advise the court that, from April 2010 to October 1, 2011, plaintiff made all requisite monthly payments to Former Tenant for a total of$525,812.40 (id., iii! 49-50). In November 2011, Former Landlord entered into a contract With non-party West 28th Street Land Owner LLC (“New Landlord”) for sale of the Premises (see Kartez Affirmation, dated November 22, 2013, Exhibit “F”). On February 2, 2012, Former Landlord executed a deed granting ownership of the Premises to New Landlord (id.). Kriss & Feuerstein represented New Landlord in this transaction (id.). On February 3, 2012, Kriss & Feuerstein allegedly sent a letter, signed by Kriss, to plaintiff, stating that Kriss & Feuerstein was counsel to New Landlord, ahd that New Landlord became the owner of Premises (see Kriss Affirmation, dated April 24, 2014, iii! 3-4; Exhibit “A”).

Plaintiff also maintains that there was a conflict of interest because the Rozenholc Defendants represented both Former Tenant and plaintiff. However, “[a] conflict of interest, even ifa violation of the Code of Professional Responsibility, does not by itself support a legal malpractice cause of action” (Schafrann v NV. Famka, Inc., 14 AD3d 363 [!st Dept 2005]). As stated previously, any damages asserted by plaintiffs occurred only after the conclusion of representation by the Rozenholc Defendants, and as a direct result of plaintiff entering into the Stipulation on October 12, 2011, when represented by new counsel Kriss & Feuerstein. Therefore, any alleged conflict could not have caused plaintiffs damages, and the complaint must be dismissed as to the Rozenholc Defendants.

It is undisputed that Kriss Defendants entered into the Stipulation, pursuant to which Former Landlord received a right to seek an entry of monetary judgment against plaintiff, a nominal party to the Holdover Proceeding. Plaintiff also claims that Kriss Defendants failed to oppose Former Landlord’s motion made on April 5, 2012, which was granted on default. Kriss Defendants have not conclusively demonstrated that they were no longer plaintiffs attorneys at the time of Former Landlord’s motion. A monetary judgment of$492,l 13.63 was entered against, and satisfied by, plaintiff. Hence, plaintiff has adequately pied a cause of action for legal malpractice, which survives Kriss Defendants’ motion (see Franklin, 199 AD2d at 221; Leder, 31 AD3d at 267-268).”

Weinberg v Sultan   2015 NY Slip Op 30932(U)  June 1, 2015  Supreme Court, New York County
Docket Number: 652273/2013  Judge: Cynthia S. Kern is the story of a building owner who let a valuable building on West 46th Street slip out of her hands after 40 years.  Is the attorney to blame?

“The following facts are not disputed. For forty years, up until 201,3, plaintiff was the owner of the Building. In 2008, plaintiff entered into a cash-out mortgage on the Building in the amount of $2,325,000.00. Plaintiff failed to make the required payments· on the loan secured by the mortgage and the default provisions of the mortgage, including a 24% penalty rate, were invoked in 2012. In January 2013, the holder of the mortgage on the Building commenced a  foreclosure action against plaintiff and a receiver was appointed for the Building with the  authority to manage the property and collect rents.

The plaintiff did not refinance the Building and the lender moved for summary judgment in the foreclosure action, by notice of motion dated April 10, 2013. After the lender brought the motion for summary judgment in the foreclosure action, plaintiff entered into a contract to sell the Building to the purchaser (the “Purchaser”) on April 22, 2014. The Purchaser purchased the Building from the plaintiff for $3,500,000.00 by deed dated May 22, 2013. Of that amount, approximately $2,800,000.00 was used to pay off the mortgage which was in the process of being foreclosed. The balance of the proceeds, after the payment of certain expenses, was placed in escrow for plaintiff and potentially for the Purchaser pursuant to two escrow agreements which were executed at the closing.

At the closing, plaintiff executed an escrow agreement whereby she agreed to deposit $100,000.00 in escrow, which she would receive when she vacated the building, which was ‘ supposed to be no later than two weeks after closing. The escrow agreement provided that the $100,000.00 would be held in escrow to secure plaintiffs removal from the Building which was to occur no later than May I 5, 2013. The agreement further provided that in the event plaintiff failed to vacate the Building, the $100,000.00 would be applied to all costs incurred by Purchaser in connection with removing plaintiff from the Building, including fair use and occupancy at the rate of $5,000 per month. Plaintiff continued to reside in the Building and did not pay any use and occupancy other than $5,000 ordered by the Housing Court. The court held in its previous decision that the Purchaser was entitled to the $100,000.00 held in escrow pursuant to the plaintiffs continued occupancy of the Building for more than 20 months after the closing. The second escrow agreement plaintiff executed at the closing set aside $62,152.00, representing the security deposit paid to plaintiff by the first floor commercial tenant. The escrow agreement provided that in the event that the security deposit was less than $62,152.00, plaintiff would be given six months to provide the Purchaser an estoppel letter from the tenant setting forth the correct amount. If plaintiff did not obtain the estoppel letter, the escrow amount was to be paid over to the Purchaser. The court held in its previous decision that the Purchaser was entitled to the $62, 152.00 being held in escrow because more than six months had passed since the closing and plaintiff had not provided the Purchaser with an estoppel letter.

In the instant case, the moving defendants have made a prima facie showing that even if they were negligent in their representation of plaintiff, plaintiff cannot make out a claim for legal malpractice because she cannot sufficiently establish that she has suffered any actual damages as a result of any alleged negligence in allowing the sale of the Building to go forward for an amount below market value. It is undisputed that the Building was the subject of a foreclosure action at the time of the sale based on plaintiffs failure to make the mortgage payments on her $2,325,000.00 first mortgage note secured by the Building and that a summary judgment motion for a judgment of sale and foreclosure was then pending. Plaintiff does not allege that she had any valid defense to the foreclosure action or that she had any basis for stopping the impending foreclosure. It is also undisputed that plaintiff was granted a thirty day stay of the foreclosure action to allow her the opportunity to refinance the Building and that she failed to do so. Based on the foregoing, defendants have sufficiently established that the only reason plaintiff sold the Building was to avoid the imminent foreclosure which was about to occur and not because of any deficient representation on the part of the defendants-she sold the Building because she did not have any other options to avoid the foreclosure. Moreover, plaintiff has failed to raise a disputed issue of fact with respect to her claim that she could have achieved a more favorable outcome to the foreclosure action but for the alleged negligence of the moving defendants. Her bare conclusory allegation that there were other options available to her other than the sale of the Building to avoid’foreclosure are insufficient to raise an issue of fact. Her allegation that it would have taken months to achieve a judgment of foreclosure, which would have given her an opportunity to sell the Building with a real estate broker or refinance the building rather than sell the Building to the Purchaser is insufficient as she fails to identify any evidence, other than mere speculation, that she would have been able to sell or refinance the Building in the time frame between the pending summary judgment motion and the foreclosure of the Building. She has not identified a single prospective purchaser who was willing to pay market value for the Building or a lender or investor who was willing to refinance the delinquent mortgage. To the contrary, plaintiff was unable to refinance the Building during the 30 day stay period provided by the court presiding over the foreclosure action. “

Many large law firm retainer agreements contain arbitration clauses.  It is our guess that the law firms believe that respondent has the better hand in arbitration, that arbitration is costly and not particularly beckoning to Plaintiffs, and that arbitrators will be kinder to the law firm than would a jury.  Arbitration clauses are enforceable, and little can be done after the retainer agreement is signed.

Menche v Meltzer, Lippe, Goldstein & Breitstone, LLP  2015 NY Slip Op 04617  Decided on June 3, 2015  Appellate Division, Second Department  demonstrates how the Appellate Division pays heed to an arbitration clause.

“The plaintiff retained the defendant law firm Meltzer, Lippe, Goldstein & Breitstone, LLP, to represent him in two matters involving his service as a trustee. An engagement letter executed by the parties contained an arbitration provision stating that in the event of “any dispute arising out of or relating to this agreement and/or the legal services rendered hereunder,” the parties agreed to binding arbitration before the Alternative Dispute Resolution Tribunal of the Bar Association of Nassau County, Inc. After a dispute arose, the plaintiff commenced this action in the Supreme Court to recover damages for legal malpractice, breach of fiduciary duty, and fraud. The defendant moved pursuant to CPLR 3211(a) to dismiss the complaint, and the Supreme Court granted the motion.

” To succeed on a motion to dismiss based upon documentary evidence pursuant to CPLR 3211(a)(1), the documentary evidence must utterly refute the plaintiff’s factual allegations, conclusively establishing a defense as a matter of law'” (M.H. Mandelbaum Orthotic & Prosthetic Servs., Inc. v Werner, 126 AD3d 857, 858, quoting Gould v Decolator, 121 AD3d 845, 847; see Goshen v Mutual Life. Ins. Co. of N.Y., 98 NY2d 314; Leon v Martinez, 84 NY2d 83). Contrary to the plaintiff’s contention, the arbitration provision of the engagement letter was clear, explicit, and unequivocal, and the legal malpractice and breach of fiduciary duty causes of action fall within the broad scope of this provision (see Nasso v Loeb & Loeb, LLP, 19 AD3d 465; Stoll Am. Knitting Mach. v Creative Knitwear Corp., 5 AD3d 586).”

Irony is a state of affairs or an event that seems disturbingly contrary to what one expects.  Legal malpractice concerns the effects of human error in the litigation of client’s cases.  It is highly ironic when mistakes are made in the litigation of legal malpractice cases.  Here is one example.

Yuan v Kaplan  2015 NY Slip Op 04637  Decided on June 3, 2015  Appellate Division, Second Department is a short opinion.  It is devastatingly forthright.

” In an action to recover damages for legal malpractice and breach of fiduciary duty, the plaintiff appeals from an order of the Supreme Court, Queens County (Brathwaite Nelson, J.), dated March 21, 2013, which granted the defendants’ unopposed motion pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action.

ORDERED that the appeal is dismissed, with costs.

The plaintiff did not submit papers to the Supreme Court in opposition to the defendants’ motion pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action, and the motion was granted on default. No appeal lies from an order or judgment granted upon the default of the appealing party (see CPLR 5511; Reynolds v Haiduk, 120 AD3d 656; HCA Equip. Fin., LLC v Mastrantone, 118 AD3d 850; J.F.J. Fuel, Inc. v Tran Camp Contr. Corp., 105 AD3d 908). Since the order appealed from was entered upon the plaintiff’s default in opposing the motion, the appeal must be dismissed (see Lumbermen’s Mut. Cas. Co. v Fireman’s Fund Am. Ins. Co., 117 AD2d 588).”