Jeffrey M. Rosenblum, P.C. v Casano  2014 NY Slip Op 51629(U) [45 Misc 3d 1218(A)] Decided on November 19, 2014   District Court Of Nassau County, First District  Fairgrieve, J. is an example of what happens when law firms sue to obtain payments.  They trigger lots of litigation and almost always. a legal malpractice counterclaim.  Here, in this Nassau County District Court, where the jurisdictional limit is $ 15,000 the attorneys have triggered a much bigger legal malpractice counterclaim.

“Before the court is plaintiff’s motion to dismiss defendant’s five (5) counterclaims. Said motion is decided as provided herein.

In her Verified Answer with Counterclaims (Plaintiff’s Exhibit B), defendant sets forth [*2]and classifies each of the five (5) counterclaims raised therein. They are designated as Breach of Contract (First and Second Counterclaims), Unjust Enrichment (Third Counterclaim), Declaratory Judgment (Fourth Counterclaim), and Attorney Malpractice (Fifth Counterclaim).

Initially, plaintiff’s counsel presses two arguments for dismissal of the first four counterclaims. First, she argues that pursuant to CPLR 3211(a)(2), this court lacks subject matter jurisdiction because “the monetary jurisdictional limit of the District Court is $15,000,” which these counterclaims exceed (Affirmation in Support, ¶ 22). To the contrary, however, this court “shall have jurisdiction of counterclaims … for money only, without regard to amount” (UDCA §208[b]). Accordingly, plaintiff’s argument characterizing the amount sought by defendant’s counterclaims as exceeding statutory authority, is rejected. Therefore, its requests for dismissal on this basis are denied.”

“Lastly, plaintiff seeks dismissal of the fifth and final counterclaim on two grounds. The first isres judicata and identity of issues with the earlier arbitration proceeding herein. In this regard, it is uncontroverted that this case was previously arbitrated pursuant to 22 NYCRR Part 137, that said arbitration resulted in a decision in defendant’s favor and that plaintiff timely commenced a trial de novo pursuant to 22 NYCRR 137.8. Given same, the arguments proferred by plaintiff to dismiss defendant’s fifth counterclaim are inapplicable to the present case.

The cases cited by plaintiff, Wallenstein v Cohen, 45 AD3d 674 (2d Dept 2007) and Altamore v Friedman, 193 AD2d 240 (2d Dept 1993), involved different arbitration statutes. Moreover, the arbitration statute in Wallerstein was repealed on January 1, 2002, and the Altamore case was specifically premised upon the binding nature of the arbitration involved in that proceeding. Unlike either of these cases, the arbitration provision used herein, explicitly provides a non-prevailing party with the opportunity to elect to proceed to a trial de novo, and plaintiff having done so, defendant can pursue her counterclaim. Therefore, that portion of plaintiff’s motion seeking dismissal of defendant’s fifth counterclaim, on res judicata grounds, is denied.

Plaintiff also seeks dismissal of said fifth counterclaim based upon an alleged failure of defendant to state a claim. In considering a motion to dismiss a complaint pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the court must accept the facts alleged as true and make a determination as to whether the facts alleged are within any cognizable legal theory (see Holmes v Gary Goldberg & Co., Inc., 40 AD3d 1033 [2d Dept 2007]). The non-moving party is afforded “the benefit of every possible inference” (see Goshen v Mut. Life Ins. Co., 98 NY2d 314, 326 [2002], quoting Leon v Martinez, 84 NY2d 83, 87 [1994]). Therefore, if the pleading contains factual allegations which taken together manifest any cause of action cognizable at law, the motion must be denied (see Natural Organics, Inc. v Smith, 38 AD3d 628 [2d Dept 2007]).

In a legal malpractice action, the “plaintiff must prove (1) the negligence of the attorney, (2) that the negligence was the proximate cause of the loss sustained, and (3) proof of actual damages. Plaintiff must also prove that she would have succeeded on the merits of the underlying action but for’ the attorney’s negligence” (Tilton v Trezza, 2006 NY Slip Op 50867[U] [Sup Ct, Nassau Cty 2006], citing Davis v Klein, 88 NY2d 1008 [1996]). Review of ¶¶ 52-54 of defendant’s answer (Plaintiff’s Exhibit B), reveals that the above requisites for a claim sounding in legal malpractice have been satisfied. Accordingly, plaintiff’s request for dismissal of defendant’s fifth counterclaim, for failure to state a cause of action, is denied.”

Sometimes a cigar is simply a cigar, and sometimes plaintiffs have to produce wildly expensive trial props.  In Melcher v Greenberg Traurig LLP
2015 NY Slip Op 30855(U)  May 18, 2015  Supreme Court, New York County  Docket Number: 650188/2007  Judge: O. Peter Sherwood a scene not unlike the Pumpkin Papers case unfolded.  Here is Judge Sherwood on the replica kitchen.

“On January 27, 2004, Melcher’s counsel, Jeffrey Jannuzzo, requested that the original Amendment be produced for forensic testing ofits authenticity (Jannuzzo letter to Corwin dated Jan. 27, 2004, Plaintiffs Exhibit 9). On February l, Fradd informed Corwin that the original Agreement had been damaged-in a tea-making incident (Fradd e-mail to Corwin dated Feb. 1, 2004, Plaintiffs Exhibit 1 I). The first page was destroyed and the second page, with Fradd’s signature, was singed (id.; Plaintiffs Exhibit 12). On February 2, 2004, Corwin was informed that no record of creating 3 [* 3] the Amendment was found in Governale’s files, and that the Amendment lacked the standard footer used by Govemale’s firm (Corwin notes dated Feb. 2, 2004, Plaintiffs Exhibit 13). 1 Nonetheless, an undamaged copy of the Amendment was attached to Fradd’s February 13, 2004, affidavit, which was filed and submitted to the court in support of a motion to dismiss the Apollo Action (Plaintiffs Exhibit 27).

Plaintiffs arson expert the Apollo Action created a replica of Fradd’s kitchen in order to test whether the damage to the Amendment could have been done in the manner claimed. Plaintiff stored the replica kitchen, so that the defendants in this case could inspect it. Fradd no longer lives in the same apartment, so the original kitchen is no longer available for inspection. Plaintiff offered the replica kitchen to defendants, and has advised defendants that he intends to discard it if they do not take it. Defendants argues that plaintiff must preserve this evidence. Accordingly, plaintiff seeks an order instructing defendants to take the replica kitchen or waive the right to inspect it. He asserts that his obligation to produce pursuant to CPLR 3120 can be “satisfied by telling the party seeking 17 [* 12] the discovery where the materials are and providing a reasonable opportunity” to view them (Memo at 4, quoting Zegarelli v Hughes, 3 NY3d 64, 69 [2004 ]). The parties dispute whether expert testimony regarding the feasability ofFradd’s version of how the Amendment came to be damaged will be relevant at trial, and expert discovery has not yet begun. As Melcher has not shown any undue burden, the court directs that he preserve the replica kitchen at least until expert discovery is concluded.”

As we started discussing yesterday, Melcher v Greenberg Traurig LLP  2015 NY Slip Op 30855(U)  May 18, 2015  Supreme Court, New York County  Docket Number: 650188/2007  Judge: O. Peter Sherwood is a historic case.  In the Court of Appeals, it was determined that this deceit statute is not really a statute at all; it is part of the common law.  There are a number of lesser issues that are addressed in this second visit to Supreme Court.

“This action was commenced on June 25, 2007, with a single cause of action pursuant to Judiciary Law Section 487, which provides: “[a]n attorney or counselor who: I. Is guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party … , is 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.” Plaintiff James L. Melcher claims the defendants, Greenberg Traurig LLP (GT) and GT partner Leslie Corwin, deceived the court and the plaintiff in an earlier litigation. The defendants in this case represented defendants Apollo Medical Fund Management L.L.C. (Apollo) and Apollo principal Brandon Fradd in a suit brought by the plaintiff in 2003 (the Apollo Action).

The parties dispute whether Melcher may pursue this claim in a separate action, or is limited to bringing it in the underlying Apollo Action. Defendants argue that this action is barred by New York’s rule against claim splitting, citing Alliance Network LLC v Sidley Austin LLP, 43 Misc 3d 848 (Sup Ct, New York County 2014)(“The First Department has held that a party’s remedy for a violation of Section 487 stemming from an attorney’s actions in a litigation ‘lies exclusively in that lawsuit itself, … not a second plenary action”‘) quoting Yalkowsky v Century Apartments Assoc., 215 AD2d 214, 215 (1st Dept 1995). Melcher argues otherwise, relying on Amalfitano v Rosenberg, 12 NY3d 8 (2009) and Melcher v Greenberg Traurig, LLP, 23 NY3d 10, 15 (2014)(allowing this litigation to proceed and reversing the First Department decision granting a motion to dismiss on statute of limitations grounds).

In a similarly positioned case, Zimmerman v Kohn (Index No. 652826/2013, 2014 WL 1490936 [Sup Ct, NY County, April 11, 2014]), the court determined that the plaintiff in an underlying action could not subsequently bring an action based on Judiciary Law§ 487 against the underlying defendants’ counsel when the plaintiff had raised the deceit allegations in that action and settled the matter before the evidentiary hearing. The underlying action was brought in the United States District Court for the Eastern District of New York against Poly-Prep Day School for the alleged cover-up of sexual abuse of students by a coach (id. at 1 )(the Poly-Prep Action). During the course oflitigating the Poly-Prep Action, Zimmerman sought “sanctions for fraud committed on the Court” by the defendants’ counsel (id). Those issues were held in abeyance pending an evidentiary hearing (id.). The parties subsequently entered into a settlement agreement and stipulated to dismiss the action with prejudice (id.). In the Judiciary Law§ 487 claim Zimmerman subsequently brought in New York State Supreme Court, the court noted that”[ o ]nee a claim for violation of Judiciary Law [Section] 487 is raised in another action, the remedy lies exclusively in that lawsuit regardless of whether the attorneys are parties to the action” (id. at 2). Upon review, the Appellate Division First Department affirmed but not on grounds of estoppel as the Supreme Court had found. Instead, the Appellate Division concluded that plaintiff had suffered no damages and affirmed on that basis (see Zimmerman, 125 AD3d at 414). The Appellate Division did not address the issue of estoppel. Accordingly, there is no estoppel issue to be decided by this court. The claim has not been waived because Melcher specifically declined to release any claims against Corwin and GT in the Apollo Action settlement agreement (Reply Memo at 4, n 3; January 14, 2014 Settlement Agreement, Plaintiff’s Exhibit I 08).”

Melcher v Greenberg Traurig LLP  2015 NY Slip Op 30855(U)  May 18, 2015  Supreme Court, New York County  Docket Number: 650188/2007  Judge: O. Peter Sherwood is a very (very) important case in the Judiciary Law § 487  world.  When the case went to the NY Court of Appeals, it led to the decision  that JL 487 arrives directly from the common law and not from statute, hence it has a 6 year statute of limitations.

Melcher is back in the news, as the underlying JL  487 litigation continues.  This week, summary judgment was denied, and the Court threw in a few interesting tidbits.

Must the 487 case be brought in the underlying case?

“The parties dispute whether Melcher may pursue this claim in a separate action, or is limited
to bringing it in the underlying Apollo Action. Defendants argue that this action is barred by New
York’s rule against claim splitting, citing Alliance Network LLC v Sidley Austin LLP, 43 Misc 3d
848 (Sup Ct, New York County 2014)(“The First Department has held that a party’s remedy for a
violation of Section 487 stemming from an attorney’s actions in a litigation ‘lies exclusively in that
lawsuit itself, … not a second plenary action”‘) quoting Yalkowsky v Century Apartments Assoc.,
215 AD2d 214, 215 (1st Dept 1995). Melcher argues otherwise, relying on Amalfitano v Rosenberg,
12 NY3d 8 (2009) and Melcher v Greenberg Traurig, LLP, 23 NY3d 10, 15 (2014)(allowing this
litigation to proceed and reversing the First Department decision granting a motion to dismiss on
statute of limitations grounds). ”

“In a similarly positioned case, Zimmerman v Kohn (Index No. 652826/2013, 2014 WL
1490936 [Sup Ct, NY County, April 11, 2014]), the court determined that the plaintiff in an
underlying action could not subsequently bring an action based on Judiciary Law§ 487 against the
underlying defendants’ counsel when the plaintiff had raised the deceit allegations in that action and
settled the matter before the evidentiary hearing. The underlying action was brought in the United
States District Court for the Eastern District of New York against Poly-Prep Day School for the
alleged cover-up of sexual abuse of students by a coach (id. at 1 )(the Poly-Prep Action). During the
course oflitigating the Poly-Prep Action, Zimmerman sought “sanctions for fraud committed on the
Court” by the defendants’ counsel (id). Those issues were held in abeyance pending an evidentiary
hearing (id.). The parties subsequently entered into a settlement agreement and stipulated to dismiss
the action with prejudice (id.). In the Judiciary Law§ 487 claim Zimmerman subsequently brought
in New York State Supreme Court, the court noted that”[ o ]nee a claim for violation of Judiciary
Law [Section] 487 is raised in another action, the remedy lies exclusively in that lawsuit regardless
of whether the attorneys are parties to the action” (id. at 2). Upon review, the Appellate Division
First Department affirmed but not on grounds of estoppel as the Supreme Court had found. Instead,
the Appellate Division concluded that plaintiff had suffered no damages and affirmed on that basis
(see Zimmerman, 125 AD3d at 414). The Appellate Division did not address the issue of estoppel.
Accordingly, there is no estoppel issue to be decided by this court. The claim has not been
waived because Melcher specifically declined to release any claims against Corwin and GT in the
Apollo Action settlement agreement (Reply Memo at 4, n 3; January 14, 2014 Settlement
Agreement, Plaintiff’s Exhibit I 08).”

Legal malpractice insurance, which one might think is a subject reserved solely for the attorney, is truly a subject of interest to the plaintiff as well.  No insurance may lead to no settlement.  Hence…

Here the insurance company would like to disclaim on the basis that the attorney was actually doing business as an education maven while getting insurance as an attorney.  This is generally outside of the scope of legal malpractice insurance.  Now, the carrier and the attorney are battling over defense costs.

Law Offs. of Zachary R. Greenhill P.C. v Liberty Ins. Underwriters, Inc.  2015 NY Slip Op 04382  Decided on May 21, 2015  Appellate Division, First Department centers on an educational foray into China, which apparently did not go well.   “Plaintiffs, an attorney and his law firm, seek a declaration that defendants, which issued a lawyers professional liability insurance policy, were required to provide a defense and pay for all defense costs with respect to counterclaims asserted against Zachary Greenhill (Mr. Greenhill) in an underlying contract action (Zachary Greenhill and Judy Lee Greenhill v The Dwight School, The Dwight School in China LLC, Stephen H. Spahn and New York Preparatory School, Inc., Sup Ct, NY County, index No. 603653/09) (the underlying contract action). Before plaintiffs commenced this action, the underlying contract action settled and the counterclaims were dismissed. Accordingly, in this action, plaintiffs seek to recover defense costs incurred in connection with those counterclaims against them in the underlying action. Plaintiffs assert that they are entitled to such costs because defendants (the insurer) breached their duty to defend and the counterclaims do not fall within any policy exclusion.

Defendants contend that plaintiffs failed to establish any breach of the duty to defend, that plaintiffs’ motion is premature, and that they need discovery to determine whether the counterclaims fall within certain policy exclusions which apply to situations where an attorney is sued for legal malpractice, but the attorney has also engaged in certain outside business activities. We agree with defendants.”

“In the underlying contract action, the Greenhills sought to enforce a partially executed consulting agreement they claimed to have with Dwight China. Pursuant to that agreement, they were to receive semiannual consulting fees for the following services: “business development, sales and marketing appropriate to [Dwight China’s] business, legal services, contracting for legal services and government filings, contract negotiations, college and university guidance services and close and overall execution of the Company’s business plan” The consulting agreement was executed by Spahn on behalf of Dwight China and the Dwight School (Dwight entities), but neither of the Greenhills ever signed it.

In their answer to the second amended complaint in the underlying contract action, the Dwight entities and Spahn denied the enforceability of the consulting contract and alleged that Mr. Greenhill had enlisted the aid of outside counsel to structure the operating agreement in such a way that it personally benefitted the Greenhills’ interests. In addition to asserting a counterclaim against the Greenhills for repudiation of the consulting agreement, the Dwight entities and Spahn asserted a counterclaim against Mr. Greenhill for legal malpractice, alleging that “[Zachary] Greenhill had an attorney-client relationship” with them and that he breached his fiduciary duties to the Dwight entities by having them sign the consulting agreement “without fully informing [them] of his view of the possible consequences of such a signature absent the Greenhills’ signature, or advising them to seek independent counsel regarding the alleged Consulting Agreement.” The Dwight entities claimed further that Mr. Greenhill had engaged in self-dealing by using the consulting agreement as evidence of the operating agreement that had never been signed.”

“Mr. Greenhill, much like the attorneys in K2 and Lee & Amtzis, obtained a lawyer’s professional liability policy that specifically excludes coverage in where the attorney is serving two masters: his client and himself. Plaintiffs seek to distinguish K2 solely on the basis that it involved the issue of whether the insurer had to indemnify its insured as opposed to

providing a defense. If, however, coverage is excluded because of the hybrid nature of the legal representation, defense costs are also excluded (see Lee & Amtzis, 2015 NY Slip Opn 02919 *3). While the counterclaims are, in part, rooted in the legal services Mr. Greenhill provided, allegedly failed to provide, failed to provide, overall the counterclaims consist of intertwined allegations about Mr. Greenhill’s legal services to The Dwight School and Dwight China, the latter of which he appears to have had a financial interest in. Therefore, defendants have raised issues of fact whether Mr. Greenhill’s activities on behalf of the Dwight entities were of a hybrid nature, because of the allegations of self-dealing, the Greenhills’ alleged 49% ownership interest in Dwight China, and the Greenhills’ efforts in enforcing the consulting agreement, which personally benefitted them financially. At a minimum, discovery is necessary on the issue of Mr. Greenhill’s ownership interests and whether such interests come within the Equity Interests Exclusion.

Because plaintiffs have not established as a matter of law that defendants breached the policy or that the counterclaims do not fall within the policy exclusions and defendants seek discovery, the issue of whether plaintiffs are entitled to recover their defense costs from defendants is premature.”

Yesterday, we started a discussion of Randazzo v Nelson  2015 NY Slip Op 04299  Decided on May 20, 2015  Appellate Division, Second   Department which arose from the sale of a deli in Staten Island.  Deli’s make retail sales, and buyer’s attorney must know that there can be an audit by the NYS Tax Department of the sales taxes which are due.  There will almost always be some sales taxes due (from the current quarter), and the savvy buyer’s attorney will either follow the rules set forth by the Tax department, or hold a large enough escrow to survive any problems.

Unfortunately for buyer, this was not done, and a legal malpractice case ensued.

“The plaintiffs retained the defendant attorney to represent them in the purchase of a delicatessen known as Gentile’s, Inc. (hereinafter Gentile’s), in Staten Island. The transaction was consummated through a stock purchase agreement dated December 10, 2009. Prior to the February 25, 2010, closing, Gentile’s was dissolved by proclamation. The defendant drafted an indemnification and escrow agreement, which was executed at the closing, in which the seller agreed to indemnify the plaintiffs for claims relating to the period prior to closing. Funds were to be held in escrow by the seller’s attorney for seven days for the payment of liens. After receipt of a March 2, 2010, statement of tax liabilities from the Department of Taxation and Finance (hereinafter the Department), the seller paid the known outstanding tax liabilities, and the defendant authorized the release to the seller of the funds held in escrow. Almost two months later, the plaintiffs received notice from the Department that Gentile’s had outstanding sales tax liabilities, which had attached to their successor delicatessen pursuant to Tax Law § 1141(c).

The plaintiffs commenced this action against the defendant alleging, inter alia, legal malpractice. The defendant moved to dismiss the complaint pursuant to CPLR 3211(a)(1) and (7). The Supreme Court granted the motion, and the plaintiffs appeal.

On a motion to dismiss pursuant to CPLR 3211(a)(7), the complaint is to be afforded a liberal construction, the facts alleged are presumed to be true, the plaintiff is afforded the benefit [*2]of every favorable inference, and the court is to determine only whether the facts as alleged fit within any cognizable legal theory (see CPLR 3026; Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; Leon v Martinez, 84 NY2d 83, 87; Thompson Bros. Pile Corp. v Rosenblum, 121 AD3d 672, 673). Where a party offers evidentiary proof on a motion pursuant to CPLR 3211(a)(7), “the criterion is whether the proponent of the pleading has a cause of action, not whether he [or she] has stated one” (Guggenheimer v Ginzburg, 43 NY2d 268, 275;see Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 845; Peter F. Gaito Architecture, LLC v Simone Dev. Corp., 46 AD3d 530). ” [A] court may freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint'” (McGuire v Sterling Doubleday Enters., L.P.,19 AD3d 660, 661, quoting Leon v Martinez, 84 NY2d at 88; see Rovello v Orofino Realty Co.,40 NY2d 633, 635; Berman v Christ Apostolic Church Intl. Miracle Ctr., Inc., 87 AD3d 1094, 1096-1097).”

When a business that makes sales to the public, and collects sales tax is sold, the buyer may become liable for unpaid sales taxes of the seller.  There is a well-understood process by which the buyer can immunize himself.  Really, all it takes is following the rules.  Unfortunately, in Randazzo v Nelson  2015 NY Slip Op 04299  Decided on May 20, 2015  Appellate Division, Second Department the rules were not followed.

How does plaintiff defend against the CPLR 3211(a)(1) motion?  By showing that the documents submitted do not utterly refute the allegations of the complaint.  “Here, the complaint, as amplified by the affidavit of Richard Randazzo (see Leon v Martinez, 84 NY2d at 88), alleges that the defendant breached his duty of care, inter alia, by failing to ensure that certain tax liabilities of the seller did not attach to the plaintiffs’ successor delicatessen pursuant to Tax Law § 1141(c). It alleges that the defendant, inter alia, failed to await the final determination of the seller’s tax liabilities by the Department, and a notice by the Department that such tax liabilities had been wholly paid or satisfied, or no longer existed, before releasing the purchase funds to the seller. As a result, the outstanding tax liabilities of the seller attached to the plaintiffs, forcing them to close down the business.”

“Further, the documents submitted by the defendant did not conclusively establish a defense as a matter of law (see Endless Ocean, LLC v Twomey, Latham, Shea, Kelley, Dubin & Quartararo, 113 AD3d at 589). Contrary to the defendant’s contention, in the absence of evidence that the plaintiffs were made whole in their separate action against the seller pursuant to the indemnification agreement executed at the closing, such indemnification is no defense to the plaintiffs’ claim that had they been properly advised, the tax assessment would have been obviated entirely (see Yiouti Rest. v Sotiriou, 151 AD2d at 745).”

Commercial client hires a law firm to litigate its claims against a municipality.  The law firm fails to file a Notice of Claim and similarly fails to file a motion seeking leave to file a late notice of claim.  The worst is yet to come.  The law firm has allowed its malpractice insurance to lapse, and has no assets.  How can this happen?

Garrison Contr., Inc. v Medina, Torrey, Mamo & Camacho, P.C. 2015 NY Slip Op 30782(U) May 15, 2015 Supreme Court, Putnam County Docket Number: 603/13 Judge: Lewis J. Lubell is an example of just how badly a law firm can hurt its clients.

“Plaintiffs bring this action for legal malpractice against, among others, the Law Firm of Medina, Torrey, Mamo & Camacho, P.C. (the “Firm”) and one of its members in his individual capacity, By Decision & Order of February 17, 2015, the Court granted Torrey’s 1 motion to dismiss as unopposed. Thereafter, the Court was advised that the motion had in fact been adjourned. That decision is now vacated. [* 1] David Torrey (“Torrey”), who personally handled the underlying litigation in an action entitled Town of Philipstown v. Garrison Contracting Inc. (Putnam County Index No. 324/2008; [the “Underlying Action”]). The thrust of this legal malpractice 2 action is the failure of Defendants to have timely filed a notice of claim with the Town of Philipstown on behalf of Plaintiffs in connection with Plaintiffs’ allegations against Philipstown, by way of amended answer with counter-claims in the Underlying Action and, in any event, the failure of Defendants to have sought leave to file a late notice of claim in connection therewith. Plaintiffs note that it was the very absence of a notice of claim and failure to have sought leave to file a late notice of claim that ultimately lead to the dismissal of Plaintiffs’ counterclaim against Philipstown upon appeal (see Town of Philipstown v Garrison Contr., Inc., 85 AD3d 1014 [2d Dept 2011]).

“Plaintiffs failed to exercise due diligence in attempting to serve the summons and complaint upon Torrey within 120 days of the filing of the complaint, nor ever for that matter. It was only upon learning during the course of discovery that the Firm had allowed its malpractice insurance policy to lapse, had no assets and would not be able to satisfy any judgment, that Plaintiffs turned their attention to Torrey who had not yet been served with process. Despite Plaintiffs’ ongoing knowledge of Torrey’s whereabouts, availability and participation in the underlying lawsuit as a member of the Firm, Plaintiffs did not serve Torrey with process until November 20, 2014, some twenty months after the commencement of the action. “