Plaintiff brings a legal malpractice case against attorney and alleges that the attorney did not timely file a notice of appeal, that the underlying case was dismissed on discovery grounds ant that the mistake was by the attorney, and that the attorney failed to convey a settlement offer.  Supreme Court considers the motion and finds questions of fact.  Defendant does not use an expert.

The Appellate Division, with no reasoning presented, turns the decision on its head, and grants summary judgment.  Why?

Pedote v Kelly  2015 NY Slip Op 00737  Decided on January 28, 2015  is one in a series of cases the  Appellate Division, Second Department has summarily reversed and dismissed.  There is rarely any real explanation.    "The defendant attorney represented the plaintiffs in an action against the owner of a manufactured home park and in eviction proceedings. The plaintiffs commenced this action to recover damages for legal malpractice, alleging, inter alia, that the defendant failed to file a timely notice of appeal from an order adverse to them, failed to comply with discovery, and failed to communicate to them a settlement offer. The defendant moved for summary judgment dismissing the complaint and for the imposition of sanctions pursuant to 22 NYCRR 130-1.1(a), and the plaintiffs cross-moved to amend the complaint. The Supreme Court denied the defendant’s motion and granted the plaintiffs’ cross motion.

"In an action to recover damages for legal malpractice, a plaintiff must demonstrate that an attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the breach of such duty was the proximate cause of the plaintiff’s damages" (Portilla v Law Offs. of Arcia & Flanagan, 112 AD3d 901, 901; see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442; Soliman v O’Connor, McGuinness, Conte, Doyle & Oleson, 118 AD3d 866, 867). "To succeed on a motion for summary judgment dismissing the complaint in a legal malpractice action, the defendant must present evidence in admissible form establishing that the plaintiff is unable to prove at least one essential element of his or her cause of action alleging legal malpractice" (Scartozzi v Potruch, 72 AD3d 787, 789-790; see Biberaj v Acocella, 120 AD3d 1285, 1286).

Here, the defendant established his prima facie entitlement to judgment as a matter of law by demonstrating that he did not fail to exercise the skill and knowledge commonly possessed by a member of the legal profession. In that respect, the defendant demonstrated that he filed a timely notice of appeal from an order adverse to the plaintiffs, that the failure to comply with discovery was the result of the plaintiffs’ decision to retain a different attorney and concomitant failure to cooperate with him, and that no settlement offer was ever communicated to him. In opposition, the plaintiffs failed to raise a triable issue of fact.

Accordingly, the Supreme Court should have granted that branch of the defendant’s motion which was for summary judgment dismissing the complaint (see Guerrera v Zysk, 119 AD3d 647, 648; Soliman v O’Connor, McGuinness, Conte, Doyle & Oleson, 118 AD3d 866)."

OK, so you own a home in the NY Metropolitan area, and have some land.  Houses around here have a half-acre, or an acre or even 2-3 acres.  That’s a lot of land around here.  Now imagine you have so much land that you and the golf course next door are arguing over a mere 5 acres between you that the surveyors cannot agree upon.  Is it yours or theirs, and is it legal malpractice not to raise an adverse possession defense?

This is the situation in Owens v Andruschat  2015 NY Slip Op 30087(U)  January 26, 2015  Supreme Court, Wyoming County  Docket Number: 39094  Judge: Michael M. Mohun.  "In 2003, Thomas Brahaney, an adjoining landowner, sued the plaintiffs in an action to quiet title to his property [the underlying action]. At the time, the plaintiffs owned a parcel of land of a little less than 50 acres in Arcade, New York, on which they had been operating a public golf course. Brahaney’s similarly sized parcel lay immediately to the east. In the underlying action, the line that Brahaney claimed for his western boundary [the plaintiffs’ eastern boundary] was some 70 feet west from the place where the plaintiffs believed it to be. Significantly, Brahaney’s line encroached upon areas used by the plaintiffs for their golf course. Brahaney asked the Court to declare that he owned the disputed strip along the boundary line, and also that it award him damages for the plaintiff’s timber
cutting and other actions in the strip.

Both parties claimed to own the strip in the underlying action, the plaintiffs having interposed a counterclaim seeking a declaration in their favor. Notably, the deed descriptions of both parcels were entirely consistent with each other. It appears that the discrepancy in the placement of the boundary line was traceable to a large extent to a difference of opinion among the surveyors. This is shown clearly on the Map and Survey of James L. Brown, dated February 27, 2003, which the plaintiffs have attached as an exhibit to their complaint in this action. Notations in Brown’s map show both a "Deeded Division Line," and a "Division Line Between Owens and Brahaney per Gillen [a previous surveyor]." The "Deeded Division Line" on the map coincides with Brahaney’s claim in the underlying action, and the line "per Gillen" coincides with the plaintiffs’ claim. Brown’s map also includes reference to the remnants of an old barbed wire fence running along part of the "per Gillen" line. The plaintiffs’ surveyor, John Gillen, stated in his trial testimony that he viewed this fence as an important indicator of a longstanding line of occupation used by the property owners, and on this basis he concluded that the eastern boundary of the plaintiffs’ property should be placed on the line near where the remnants of the fence were found. 

The defendants, Thomas E. Andruschat, Esq., and his former law firm, represented the plaintiffs in the underlying action. After a non-jury trial, the Court found in favor of Brahaney, declaring him the owner of the disputed strip and awarding him damages. In their complaint, the plaintiffs allege that Mr. Andruschat committed malpractice by failing to raise the defense of adverse possession at the trial. The defendants deny that malpractice occurred and assert that adverse possession was not viable as a defense in the underlying action. 

The defendants contend that Mr. Andruschat skillfully handled the trial of the underlying action, and that he correctly determined that an adverse possession defense lacked merit and would not succeed. They argue that Andruschat’s decision to base the trial defense on the doctrine of
practical location of a boundary line, rather than on the doctrine of adverse possession, was a reasonable strategic choice under the circumstances. They further argue that due to the fact that the plaintiffs later lost ownership of their entire parcel through foreclosure, they are unable to prove that they sustained actual ascertainable damages as a result of the alleged malpractice.

Thus, the plaintiffs would not have been able to show actual possession of the strip after 1989, either. Moreover, at no time, either before or after 1989, did the plaintiffs activities within the strip fulfill the added requirement of former RPAPL §522 that the property in question must be either "usually cultivated or improved," or "protected by a substantial inclosure." Lastly, the fact that the plaintiffs offered the buy Brahaney’s entire parcel in May of 1996 presented an insurmountable obstacle to any attempt to raise at trial an adverse possession defense premised on the plaintiffs use of the strip after 1989. The purchase offer made within the limitations period constituted an "overt acknowledgment of title in another" which negated the element of hostility required to establish adverse possession (Walling, supra; Larsen v. Hanson, 58 A.D.3d 1003, 1004 [3rd
Dept., 2009]). "

Lawyers arguing over legal fees make up a surprising number of law suits.  When one reads down the list of AD cases to be argued, the number of law firms as parties is striking.  in Tassan v Pugatch & Nikolis  2014 NY Slip Op 33441(U)  December 29, 2014  Supreme Court, Suffolk County  Docket Number: 30031/2012  Judge: William B. Rebolini  we see a fight to the death relationship between former partners and an accusation of deceit under JL 487.  The Court pays it little heed.

"This is an action for money damages and an "accounting" regarding the dissolution of the
partnership of the parties in 2006, and the plaintiff’s alleged entitlement to a share of the legal fees
recovered by the defendants thereafter. In his complaint the plaintiff alleges, among other things,
that the written dissolution agreement between the parties provided that he would receive one-third
of the net fees recovered in all "open personal injury matters" within ten days of the clearance of
funds in the escrow account of the new partnership formed by the defendants, and that the defendants settled a specific personal injury case without paying over to him the share of the fee that he is entitled to receive. In his complaint, the plaintiff respectively sets forth seven causes of action for an accounting , breach of contract, conversion, breach of fiduciary duty, violation of Judiciary Law § 487, failure to file proper closing statements, and fraudulent concealment. It is undisputed that the plaintiff and the defendants were equal partners in the law firm Tassan, Pugatch and Nikolis beginning in approximately 1998, that the parties entered into a written dissolution agreement dated December 5, 2006 (Agreement), and that the Agreement included a list of open personal injury matters from which each of the partners would be entitled to one-third of the net fee. It is also undisputed that the plaintiff has served a notice of lien upon the defendants in an action in which he claims a share of the legal fees entitled Shkreli v Boston Properties, Inc., Supreme Court, Bronx County, Index No. 05-17913 (Shkreli Action), and that the defendants herein paid the plaintiff his share of the fees generated for a number of years, and then decided to stop paying any further fees under the agreement.

The plaintiff now moves for an preliminary injunction and other relief. In support of the motion the plaintiff submits, among other things, the Agreement, his affidavit, and the transcript of is  deposition and that of the defendant Phillip Nikolis. To be entitled to a preliminary injunction,the moving party has the burden of demonstrating (1) a likelihood of success on the merits, (2)
irreparable injury absent granting the preliminary injunction, and (3) a balancing of the equities in
the movant’s favor (see CPLR 6301; Aetna Ins. Co. v Capasso, 75 NY2d 860, 552 NYS2d 918 [1990]; Dixon v Malouf, 61AD3d630, 875 NYS2d 918 [2d Dept 2009]; Coinmach Corp. vAl/ey Pond Owners Corp., 25 AD3d 642, 808 NYS2d 418 [2d Dept 2006]). The purpose of a preliminary injunction is to maintain the status quo and prevent the dissipation of property that could render a  judgment ineffectual (see Dixon v Malouf, supra; Ruiz v Meloney, 26 AD3d 485, 810 NYS2d 216
[2d Dept 2006]). The decision to grant or deny a preliminary injunction rests in the sound discretion
of the Court (see Dixon v Malouf, supra,· Ruiz v Meloney, supra). Further, preliminary injunctive
relief is a drastic remedy that will not be granted unless the movant establishes a clear right to such relief which is plain from the undisputed facts (Blueberries Gourmet v Aris Realty Corp., 25 5 AD2d 348, 680 NYS2d 557 [2d Dept 1998]; see Hoeffner v John F. Frank, Inc., 302 AD2d 428, 756
NYS2d 63 [2d Dept 2000]). Here, the plaintiff has not sufficiently demonstrated his entitlement to injunctive relief pending the determination of the action by showing a likelihood of success on the merits, irreparable injury in the absence of a preliminary injunction, and a balance of the equities in his favor (see CPLR 6301 ). A review of the record indicates that the plaintiff has not shown a likelihood of success on the merits. The Court does not address the merits of the competing claims made by the parties but, instead, notes that there is sufficient competing evidence to call into question the plaintiffs ability to succeed on the merits of his claims. The parties have submitted conflicting documentary evidence as well as conflicting testimony regarding whether the Agreement was voluntarily entered into by the parties, and which party, if any, breached their fiduciary duty to the other first. Given the sharply disputed issues of fact, the plaintiff has failed to establish a clear right to preliminary injunctive relief (see Cooper v Board of White Sands Condominium, 89 AD3d 669, 931 NYS2d 696 [2d Dept 2011); Matter of Advanced Digital Sec. Solutions, Inc. v Samsung Techwin Co., Ltd., 53 AD3d 612, 862 NYS2d 551 [2d Dept 2008]). "

Judge Lewis of Supreme Court, Kings County decides a legal malpractice case coming from an motor vehicle negligence case.  Defendant attorneys brought the case in Civil Court in which jurisdiction is limited to $25,000.   They did not sue all the potential drivers and owners.  Client took the case away from defendants and gave it to new counsel who settled the case for $ 10,000.  They argued that the case was so damaged, that nothing better could be accomplished.  Hence, original attorneys were responsible for loss of further damages,

In Atiencia v Pinczewski  2015 NY Slip Op 50048(U)  Decided on January 22, 2015  Supreme Court, Kings County  Lewis, J. writes:  "The First Department has held that for the plaintiff to succeed in an action for legal malpractice where there was a settlement in the underlying case, she must "demonstrate that if not for the alleged acts of malpractice, [s]he would have been able to recover or proceed in a manner other than that which actually eventuated" (see Becker v Julien, Blitz & Schlesinger, P.C., 95 Misc 2d 64, 68 [1977]). "Where the termination [of a case] is by settlement rather than by dismissal or adverse judgment, malpractice by the attorney is more difficult to establish, but a cause of action can be made out if it is shown that assent by the client to the settlement was compelled because a prior misfeasance or nonfeasance by the attorneys left no other recourse (id. At 66). "As a matter of policy, cases once settled should not be readily relitigated as to their merits in another forum, where the original defendant has been released and the plaintiff’s original attorneys have become the defendants.Under those circumstances, the burden must be on the plaintiff seeking such recovery to demonstrate by evidence rather than by conclusory allegations, that he indeed suffered substantial financial loss because of misdeeds by his attorneys and not by second guessing as to their judgment" (see Becker, at 68). On appeal, the Appellate Division stated, "we agree with the Special Term that insofar as this action rests upon a claim [*4]that defendants’ misconduct resulted in an unfavorable settlement of plaintiff’s underlying claim against Zale Corporation, the complaint must be dismissed for the reason that it can only be the sheerest speculation whether a different handling of the case by defendants-attorneys, or participation by a particular member of the defendants’ firm, would have resulted more favorably to plaintiff than the settlement that was actually made. Accordingly, the second cause of action for malpractice was properly dismissed" (see Becker v. Julien, Blitz & Schlesinger, P.C., 66 AD2d 674, 19 [1978]). In the case at bar, the plaintiff has failed to demonstrate that she has suffered ascertainable damages or substantial financial loss proximately caused by the defendants’ breach of duty The plaintiff has also failed to demonstrate beyond the sheerest speculation whether a different handling of the case would have produced a more favorable outcome than the settlement that was actually made.

It is uncertain whether the defendants failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession. The fact that the defendants did not name Palaquibay as a party to the lawsuit and did not file the case in Supreme Court raise questions of fact as to whether or not they breached a duty to the plaintiff. However, a failure to exercise ordinary reasonable skill and knowledge is only one of four prongs that the plaintiff must prove in order to succeed on her claim. The plaintiff has failed, with more than conclusory allegations, to demonstrate ascertainable damages or substantial financial loss, let alone that they were proximately caused by the defendants. The medical records provided to the court, indicate that the plaintiff’s treatments following the accident totaled $11,441.39 (see Exhibit B of Defendant’s Affidavit). Those expenses were covered entirely by insurance approximately eight years prior to the $10,000.00 settlement. In her deposition dated March 26, 2012, the plaintiff states that she did not have to pay any money out-of-pocket and that she discontinued treatments when the insurance company stopped paying for them (see Plaintiff’s Deposition, at 73-74).With regards to the amount of time she missed from work, the plaintiff states that she had to take additional maternity leave to recover from the accident, that after returning to work she had to miss days to attend physical therapy, and that she lost salary because of the missed time (id, at 47-50). She contends that the $10,000.00 settlement was inadequate because it doesn’t cover the therapies that she would have undergone on her back, neck, shoulder, and knee which she says continued to be necessary as of the time of her deposition, (March 26, 2012). However, it is unclear what those therapies would be, if they are necessary, and how much they cost (id, at 87). The plaintiff has had adequate time to provide documentation indicating what further treatments are warranted, but has failed to do so. The plaintiff also says that she used some of the settlement money to undergo therapy in Staten Island but neither remembers the name of the facility where she treated, nor how much she spent on therapy (id, at 87-88). The plaintiff has provided no evidence to support the truth of her treatments, no documentation from a medical professional to support her contention of continued treatment after the settlement or need for treatment moving forward, and she provides no pay stubs or employers affidavits to support her claim of work-time or salary lost as a result of the accident. Simply put, the plaintiff has failed to prove the existence of ascertainable damages beyond the amount she received from the settlement.

In Perks v. Lauto, 760 N.Y.S.2d 231 (2003), where plaintiffs’ counsel failed to adequately investigate the assets and insurance coverage of a driver whose vehicle was involved in an accident with the plaintiff, the Second Department found that the appellants "submitting evidence establishing that the plaintiffs discharged them and hired new counsel two months before the plaintiffs settled their claim against the driver. Under such circumstances, subsequent counsel had a sufficient opportunity to protect plaintiffs’ rights, and any negligence by the appellants was not the proximate cause of the plaintiffs’ alleged damages." Here, subsequent counsel represented the plaintiff in the underlying matter for approximately four years prior to the settlement. This court finds four years to be a sufficient period of time to protect the plaintiff’s right and to relieve the defendants of proximate causation for alleged damages suffered by the [*5]plaintiff.

The court disagrees with plaintiff’s contention that this motion for summary judgment is barred by res judicata on the grounds that the defendants made similar arguments in a prior motion to dismiss that was denied. The court has the discretion to treat a CPLR 3211 motion to dismiss as a CPLR 3212 motion for summary judgment and the "disposition will as a rule be deemed a disposition on the merits and thus entitled to res judicata treatment. With such an impact, the treatment is not to be lightly indulged" (see CPLR § 3211, Commentary C3211:44). If the court intends to apply res judicata treatment to a motion to dismiss it should make the parties aware of its intent "so that an appropriate record may be made by the parties" (see Mareno v. Kibbe, 32 AD2d 825, 302 N.Y.S.2d 324 [2nd Dept 1969]). Here, the court never indicated to the parties that it intended to treat prior motion practice for the purposes of res judicata and finds that the plaintiff has failed to produce adequate evidence demonstrating that she has suffered ascertainable damages or that if she had suffered ascertainable damages, the defendants were the cause of those damages."

The Business Judgment rule protects condo and coop boards from many claims. Chief among them are the day-to-day decisions on how to run the building.  Do we fix the elevators?  Do we change the boiler?  Shall we give the super a raise?  Owners who are unhappy have a very limited number of options, as is illustrated by Pomerance v McGrath  2015 NY Slip Op 00466  Decided on January 20, 2015  Appellate Division, First Department. 

Of interest to us is the denial of plaintiff’s motion to amend the pleadings to add a JL 487 claim.  Here it is denied, not for the reason that it is brought in a separate action, but for lack of proper pleading.

"Order, Supreme Court, New York County (Barbara Jaffe, J.), entered June 30, 2014, which, to the extent appealed from as limited by the briefs, (1) granted plaintiff’s motion for leave to amend her amended complaint to the extent of accepting the first, third, fifth, eighth, tenth, eleventh, twelfth, thirteenth, fifteenth, and seventeenth causes of action in the proposed "Verified Second Amended Complaint (Revision 1)," (2) denied the motion to the extent of striking the second, fourth, sixth, and ninth causes of action without leave to replead and the seventh cause of action as against Robert J. Braverman without leave to replead, and (3) denied defendants’ motion for summary judgment on the fifth cause of action of the amended complaint, unanimously modified, on the law, to also strike the first, third, fifth, eighth, tenth, eleventh, twelfth, and seventeenth causes of action, and otherwise affirmed, without costs."

"Plaintiff’s sixth cause of action, alleging that Braverman and his firm aided and abetted the board’s allegedly fraudulent conduct, is insufficient. A plaintiff alleging an aiding-and-abetting fraud claim must allege, among other things, that the defendant substantially assisted in the underlying fraud (Oster v Kirschner, 77 AD3d 51, 55 [1st Dept 2010]). Plaintiff merely alleges that Braverman and his firm failed to act. "[T]he mere inaction of an alleged aider and abettor constitutes substantial assistance only if the defendant owes a fiduciary duty directly to the plaintiff" (Kaufman v Cohen, 307 AD2d 113, 126 [1st Dept 2003]). "[T]he fiduciary duties owed by a limited partnership’s attorney to that entity do not extend to the limited partners" (Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 561 [2009]). Hence, Braverman and his firm — the attorneys for the condominium, an unincorporated association — do not owe a fiduciary duty to plaintiff, a unit owner and member of the association.

While it was not improper for plaintiff to bring a Judiciary Law § 487 claim in this action even though it is based on alleged deceit in a prior action (see Newin Corp. v Hartford Acc. & Indem. Co., 37 NY2d 211, 217 [1975]; Specialized Indus. Servs. Corp. v Carter, 68 AD3d 750, 752 [2d Dept 2009]), the motion court properly denied leave to add this claim — the seventh cause of action — due to a failure to allege "a chronic and extreme pattern of legal delinquency" (Kaminsky v Herrick, Feinstein LLP, 59 AD3d 1, 13 [1st Dept 2008] [internal quotation marks omitted], lv denied 12 NY3d 715 [2009]).

"

In this legal malpractice action Estate of Alston v Ramseur  2015 NY Slip Op 00490  Decided on January 21, 2015 Appellate Division, Second Department the attorney is defending against a claim that there was a departure from good practice which proximately damaged the client.  In defense, the attorney allowed a conditional order to be entered, and then failed to show up for a deposition.  Result?  Answer stricken, assessment of damages.  Not a good outcome.

"In an order dated April 5, 2012 (hereinafter the conditional order), the Supreme Court, Kings County, directed that the defendant’s answer "shall be stricken unless" she appeared for a deposition on or before May 5, 2012. It is undisputed that the defendant failed to comply with the conditional order. In March 2013, the venue of this action was changed from Kings County to Queens County. The Supreme Court, Queens County, granted the plaintiff’s motion to strike the defendant’s answer for failure to comply with, inter alia, the conditional order, and to set the matter down for a hearing on the assessment of damages.

As a result of the defendant’s failure to appear for her deposition on or before May 5, 2012, the conditional order became absolute (see Wilson v Galicia Contr. & Restoration Corp., 10 NY3d 827, 830; Almonte v Pichardo, 105 AD3d 687, 688; Pugliese v Mondello, 67 AD3d 880, 881; Baturov v Marchewka, 10 AD3d 345; D’Aloisi v City of New York, 7 AD3d 750; Hall v Penas, 5 AD3d 549). To be relieved of the adverse impact of the conditional order, the defendant was required to demonstrate a reasonable excuse for her failure to appear for a deposition and a potentially meritorious defense (see Gibbs v St. Barnabas Hosp., 16 NY3d 74, 80; Almonte v Pichardo, 105 AD3d at 688; Panagiotou v Samaritan Vil., Inc., 66 AD3d 979, 980; Zouev v City of New York, 32 AD3d 850). The defendant did neither. Accordingly, the Supreme Court properly granted the plaintiff’s motion pursuant to CPLR 3126 to strike the defendant’s answer for her failure to comply with, inter alia, the conditional order, and to set the matter down for a hearing on the assessment of damages."

Clients sometimes exaggerate or have high hopes about  their damages.  They sometimes  do so in order to interest attorneys in taking their legal malpractice case.  Often, they will inform the potential attorney that the damages are in the MILLIONS!  Sometimes it’s true.  However, this story from the New York Law Journal today eclipses any of those calls.  It’s in the BILLIONS!  One never wants to read a story which starts, " A filing error…"

Mark Hamblett writes about the GM Bankruptcy and a filing mistake which renders a $2.5 Billion loan no longer secured.  In this setting, recovery may be entirely gone.  No matter what, it’s going to cost a lot to regain some of the secured assets…a lot.

"A filing mistake by attorneys that rendered a secured loan from JP Morgan to General Motors unsecured has left a group of creditors free to pursue a clawback of some $1.5 billion in the GM bankruptcy case.   The U.S. Court of Appeals for the Second Circuit held Wednesday that it did not matter that neither GM, nor its counsel at Mayer Brown, nor JP Morgan or its counsel at Simpson Thacher & Bartlett, intended a mistake that changed the secured status of a $1.5 billion loan to GM when preparing for and making a filing under the Uniform Commercial Code.
"We conclude that although the termination statement mistakenly identified for termination a security interest that the lender did not intend to terminate, the secured lender authorized the filing of the document, and the termination statement was effective to terminate the security interest," the Second Circuit said in In Re Motors Liquidation Company, 13-2187.
 

Judges Ralph Winter (See Profile), Richard Wesley (See Profile) and Susan Carney (See Profile) reversed Southern District Bankruptcy Judge Robert Gerber (See Profile), but only after having certified questions on intent under the Uniform Commercial Code, (UCC), answered by the Delaware Supreme Court.

General Motors had entered into a synthetic lease to obtain $300 million in financing from a syndicate that included JPMorgan in 2001. The lease was secured by liens on 12 pieces of real estate.

In 2006, GM obtained an unrelated term loan for about $1.5 billion that was secured by GM assets, including equipment and fixtures at 42 facilities in the United States.
In 2008, GM told its counsel responsible for the 2001 synthetic lease, now-retired Mayer Brown partner Robert Gordon, to prepare the documents to repay the lease and terminate the security interests associated with it. Gordon assigned some of the work to Mayer Brown associate RyanGreen, who, in turn, asked a paralegal at the firm to perform a search of UCC-1 initial financing statements that had been recorded against General Motors in Delaware.
The paralegal came up with three security interests that ultimately ended up on the closing checklist. The problem was that only two of the security interests applied to the synthetic lease and the third applied to the $1.5 billion term loan. So when Mayer Brown prepared draft UCC-3 amendment termination statements, it included a draft termination statement for the term loan, even though the unrelated UCC-3 statement never used the words "term loan.""

The 183 day rule in NYS taxation bobs to the surface from time to time.  In this accounting malpractice case, where plaintiff resided makes a difference of about $1 million in tax.  Client relied upon the CPAs explanation of how the 183 day rule is applied, to his detriment.  Was that advice the [or a] proximate cause of this problem?

Hamadeh v Spaulding   2015 NY Slip Op 30027(U)   January 8, 2015   Supreme County, New York County  Docket Number: 114060/09   Judge: Marcy S. Friedman  applies the legal malpractice rule on proximate cause to accounting malpractice. 

"In arguing that plaintiffs cannot establish that they committed malpractice, both Spaulding and Citrin contend that plaintiffs must prove not only that plaintiffs could have avoided taxation as statutory residents if Spaulding had provided different advice about the number of days they could spend in New York, but also that they could have avoided taxation as non-domiciliaries. They further contend that plaintiffs cannot establish that they changed their domicile from New York to Pennsylvania, as evidenced by the finding in the Report of Audit to that effect, as well as by defendants’ analysis of plaintiffs’ failure to satisfy the elements necessary to establish a change of domicile. (See Spaulding Memo. In Opp. to Ps.’ Motion at 12-14; Citrin Memo. In Support of Citrin Motion at 13-17.) Put another way, defendants argue that because plaintiffs cannot show that they changed their domicile, they would have been subject to taxation as New York residents, regardless of whether the NYSDTF concluded that they were statutory residents. Spaulding concludes that plaintiffs cannot establish that his advice was the "proximate cause" of their increased tax liability. (Spaulding Memo. In Opp. to Ps.’ Motion at 14.) Citrin posits that plaintiffs’ failure to change their domicile from New York was an "independent cause" of their tax liability. (Citrin Memo. In Reply to Citrin Motion at 6.) Defendants both argue in effect that Spaulding’s incorrect advice on the statutory residency must  have been the sole proximate cause of the NYSDTF’s assessment of deficiency and interest charges upon plaintiffs. Defendants do not cite any case law in the accountant malpractice context which holds that the malpractice must have been the sole proximate cause of the plaintiffs injury. As discussed above, cases in the accountant malpractice area have used the term "a proximate cause" in articulating the standard that the plaintiff must prove. In the legal malpractice context, an often-cited formulation of the standard of proof requires that three elements be established: "(I) the negligence of the attorney; (2) that the negligence was the proximate cause of the loss sustained; and (3) proof of actual damages. It requires the plaintiff to establish that counsel failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that ‘but for’ the attorney’s negligence, the plaintiff would have prevailed in the matter or would have avoided damages." (Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, I 0 [I st Dept 2008] [internal quotation marks omitted, citing AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 (2007].) In other legal malpractice cases, however, the courts have held that the attorney’s malpractice must have been "a" proximate cause of the plaintiffs injury. (See 180 E. 88th St. Apt. Corp. v Law Off. of Robert Jay Gumenick, P.C., 2010 NY Slip Op 33848 [U], 2010 NY Misc Lexis 6878 [Sup Ct, NY County] [discussing varying formulations of attorney malpractice standard], affd 84 AD3d 582 (1st Dept 2011].) The Second Department has expressly held that these varying
formulations of the proximate cause standard ("a" as opposed to "the" proximate cause) have "no
substantive import," and that the "but for" standard for attorney malpractice cases does not require proof that the defendant attorney’s negligence was the "sole proximate cause" of the plaintiffs losses. (Barnett v Schwartz, 4 7 AD3d 197, 203-205 (2d Dept 20071.) Although the First Department has not expressly so held, it recently approvingly cited the Second  Department’s holding. (See Borges v Placeres, 2014 NY Slip Op 08910, 2014 NY App Div Lexis 8822 [Dec. 23, 2014] [citing Barnett in holding that the trial court’s jury charge appropriately provided that defendant attorney’s malpractice must be a "substantial factor in causing plaintiffs harm"].) 1 The court assumes that the "but for" standard from the legal malpractice context applies equally to accountant malpractice claims. For purposes of this motion, however, the court need not reconcile the differing interpretations of this standard because, even in its most rigorous application, the standard is clearly satisfied by the evidence in the record. "