In general, the rule in legal malpractice claims after a criminal prosecution is that the plaintiff must show “actual innocence” in order to sue the criminal defense attorney.  This principal prevents 99% of criminal defendants from proceeding.   Meralla v Goldenberg   2015 NY Slip Op 01873   Decided on March 5, 2015   Appellate Division, First Department is the rare exception.  Plaintiff had his criminal conviction overturned and the prosecution declined to re-try him.  He successfully avoided the “pecuniary loss” problem.  Now, his case is ready for trial.  News excerpts suggest that the plaintiff is uninsured.

“In this legal malpractice action, plaintiff alleges that defendant attorney’s failure to move to sever plaintiff’s criminal trial from that of a codefendant, and to move to exclude certain evidence based on the collateral estoppel effect of a prior trial in which plaintiff was acquitted of a related crime, caused him to be convicted and incarcerated. Plaintiff served more than six years in prison before this Court overturned his conviction based on defendant’s ineffective assistance of counsel (People v Meralla, 228 AD2d 160 [1st Dept 1996], lv denied 88 NY2d 989 [1996]). After the prosecution determined that plaintiff could not be retried, he commenced this action to recover damages against defendant.

The motion court correctly concluded that plaintiff did not waive his claim for pecuniary damages, as the ambiguous colloquy during plaintiff’s deposition did not amount to “an intentional relinquishment” of his right to assert such damages (EchoStar Satellite L.L.C. v ESPN, Inc., 79 AD3d 614, 617 [1st Dept 2010] [internal quotation marks omitted]). After the deposition, plaintiff continued to respond to discovery requests related to his employment history, and the parties did not execute a stipulation evidencing plaintiff’s withdrawal of his claim for pecuniary damages. Further, plaintiff should not be equitably estopped from asserting a claim for pecuniary damages, since defendant failed to demonstrate that he detrimentally relied on plaintiff’s purported waiver (see generally River Seafoods, Inc. v JPMorgan Chase Bank, 19 AD3d 120, 122 [1st Dept 2005]).

As this Court held on the appeal overturning plaintiff’s conviction, defendant’s delay in moving to exclude evidence based on collateral estoppel, and failure to seek a severance before the second trial, “amounted to fundamentally flawed, less than meaningful representation” and “substantially impaired the defense” (Meralla, 228 AD2d at 161). Accordingly, drawing all inferences in favor of plaintiff as the nonmoving party (see Ortega v Everest Realty LLC, 84 AD3d 542, 545 [1st Dept 2011]), an issue of fact exists as to whether defendant’s alleged negligence was the proximate cause of plaintiff’s alleged injuries (see Kaminsky v Herrick,[*2]Feinstein LLP, 59 AD3d 1, 9 [1st Dept 2008], lv denied 12 NY3d 715 [2009]). It cannot be said, as a matter of law, that the outcome of the matter would have been substantially the same even if defendant had made the motions before trial and in writing (see id.).”

Leser v Multi Capital Group LLC  2015 NY Slip Op 50272(U)  Decided on March 2, 2015  Supreme Court, Kings County
Demarest, J. reads like a poorly conceived story of corporate greed.  It does teach several important lessons in legal malpractice.  The first is how essential privity of contract between the attorney and the client remains.  The second is how powerful the statute of limitations remains, and the rare, rare application of the exception that a cause of action remains vital until all elements of the claim exist.  Here, this argument did not work.

“Abraham Leser (plaintiff), an experienced real-estate investor, alleges that non-party Eli Verscheliser (Verscheliser), the principal of defendant mortgage broker, Multi Capital Group LLC (Multi), approached plaintiff in late 2006 concerning two projects: one residential tower in Philadelphia and another in Seattle. Verscheliser allegedly proposed that plaintiff serve as each project’s “sponsor,” which, plaintiff explains, required making no investment whatsoever, but acting as “the public persona of the project for underwriting purposes and for reassurance to other joint venture partners.” In return for this role, plaintiff alleges that he was promised 20% of the eventual profits. Verscheliser apparently assured plaintiff that he would not bear responsibility for any losses and would not have to sign any personal guaranties for the projects.”

“Verscheliser purportedly told plaintiff that he would act as an authorized signatory for VTE, but that VTE, Multi and its attorneys would carefully review any documents prior to plaintiff’s signing “to ensure that all parties involved were adequately protected and to make sure that this deal would not be a liability to [plaintiff].” Multi negotiated two loans from US Bank to finance the projects: $17.5 million for the Philadelphia project and $21 million for the Seattle project. Plaintiff explains that, in July and November 2007, respectively, Multi delivered to him, for signature, loan documents for[*2]the Philadelphia and Seattle projects. In both instances, plaintiff alleges that he received a large stack of documents with flags indicating locations where he should sign. He recounts that Multi represented to him that it and its attorneys had reviewed the documents and that he would not be signing anything in his personal capacity. Plaintiff explains that he signed both sets of documents alone, in his office, without any further review by himself or others, and returned the documents to Multi. Among the documents that plaintiff signed were agreements of guaranty and suretyship for the loans, which rendered plaintiff guarantor of each in his personal capacity. Plaintiff asserts that he later learned that Buchanan Ingersoll had acted as counsel for Multi and VTE throughout the course of these deals.

In February 2009, plaintiff learned, in a meeting with representatives from US Bank, that the loans were in default and that US Bank considered him as the loans’ personal guarantor. Plaintiff thereafter commenced an action in the United States District Court for the Eastern District of New York and sought a declaration that the guaranties were forged and not enforceable against him [FN1] . US Bank commenced a counterclaim seeking to enforce the guaranties against plaintiff. On January 14, 2013, the jury in that action returned a verdict finding the guaranties enforceable against plaintiff, and the court thereafter issued a judgment in favor of US Bank against plaintiff for $52,946,419.15.”

“Plaintiff argues that an attorney-client relationship does not require a formal retainer or payment of a fee and that the complaint adequately alleges that Buchanan Ingersoll performed legal work for plaintiff’s benefit by forming entities and listing plaintiff as the owner or managing member. He thus asserts that Buchanan Ingersoll “performed actual legal work on behalf of [plaintiff] (even if formally retained by [Buchanan Ingersoll]’s good friend Eli Verscheliser of [Multi]).” Plaintiff contends that Buchanan Ingersoll subsequently “represented US Bank in lending money to the Leser Entities and their affiliated entities, hid a personal guaranty from [plaintiff] within loan documents, did not alert [plaintiff] of the same, represented VTE . . . , and failed to communicate at all with [plaintiff][FN2] .” He characterizes his inability, during the declaratory-judgment action, to identify Buchanan Ingersoll by name as irrelevant, and he urges that only discovery of material exclusively within Buchanan Ingersoll’s possession can prove the extent to which it represented him. Plaintiff argues, in any case, that malpractice liability may accrue even without privity in a case involving fraud, which he [*5]has explicitly alleged.

Plaintiff argues that the statute of limitations does not bar his malpractice claim, because such a cause of action does not accrue until damages occur and legal relief becomes available. He contends that his damages were not “fully liquidated” until the judgment entered against him in the Eastern District of New York in May 2013. Plaintiff urges that he could not have sued before that date, as future damages are unrecoverable in legal-malpractice actions. In the alternative, plaintiff argues that the limitations period was tolled by Buchanan Ingersoll’s continuous representation, and he urges that the full length of its engagement is unknown.”

“Here, plaintiff essentially asserts that Buchanan Ingersoll’s failure to warn him about the presence of personal guaranties in the loan documents he signed constituted a breach of its duty to exercise reasonable knowledge and skill in representing him. He fails, however, to plead facts from which it could be inferred that an attorney-client relationship existed. Indeed, plaintiff states that he never had any communication or contact with Buchanan Ingersoll, and he admits that he was not aware of its identity until after he had signed the loan documents. Even if Verscheliser or Multi told plaintiff that its unidentified attorneys would review the loan documents for his benefit and that he need not hire his own attorney, such representations could not give rise to an attorney-client relationship between plaintiff and Buchanan Ingersoll. Similarly, plaintiff’s allegation that Multi retained Buchanan Ingersoll to form entities naming plaintiff as owner or managing member does not establish any direct relationship between plaintiff and Buchanan Ingersoll (see Federal Ins. Co. v North Am. Specialty Ins. Co., 47 AD3d 52, 60 [2007] [“(w)hile . . . third parties may be interested in the actions by another’s attorney and even benefit therefrom, that circumstance does not give rise to a duty on the part of the attorney to that third party”]; see also Fortress Credit Corp. v Dechert LLP, 89 AD3d 615, 616 [2011],lv denied 19 NY3d 805 [2012]).

In any event, even if plaintiff could establish that Buchanan Ingersoll owed him any sort of duty, all elements of the alleged cause of action had accrued, at latest, by February 2009, when US Bank informed plaintiff that it was planning to enforce the [*9]personal guaranties against plaintiff due to default on the loans (see McCoy v Feinman, 99 NY2d 295, 301 [2002]; Ackerman v Price Waterhouse, 84 NY2d 535, 541 [1994], amend denied 85 NY2d 836 [1995]). Hence, the three-year statute of limitations applicable to legal-malpractice claims requires dismissal of this claim (see CPLR 214 [6]; Zorn v Gilbert, 8 NY3d 933, 933-934 [2007]; Farage v Ehrenberg, 124 AD3d 159, 163-164 [2014]). Plaintiff’s argument that continuous representation should permit tolling of the limitations period lacks merit, as there is no evidence of any representation, particularly after 2007.”

Client has a problem selling his house in upstate New York because many many years before, his father did not record the deed.  He makes a deal with buyer and agrees to a reduction in price if he cannot present good title.  He hires an attorney to quiet title, and asks whether it can be done in the year-long period agreed to by the buyer.  Attorney says that he’s 90% sure it can be done.  Of course more than a year goes by before attorney succeeds.  Is that  malpractice?

Hinsdale v Weiermiller  2015 NY Slip Op 01854  Decided on March 5, 2015  Appellate Division, Third Department doesn’t answer the ultimate question, but it denies summary judgment.

“Defendant Mark A. Weiermiller (hereinafter defendant) represented plaintiff in a real estate transaction involving property where the deed had apparently been lost and never recorded by plaintiff’s father when he originally acquired the property. Because of the title defect, the terms of the April 2007 purchase and sale agreement included a provision that the price of $325,000 would be reduced by $100,000 to $225,000 if plaintiff could not obtain a judgment quieting title within one year, i.e., by April 10, 2008, with time being of the essence. According to defendant, he encountered several significant and

unanticipated difficulties in securing the judgment, which was not obtained until May 6, 2008. The buyer nonetheless agreed to pay part of the $100,000 reduction amount authorized by the agreement, resulting in plaintiff allegedly receiving $74,963 less than if a judgment had been obtained within one year. Plaintiff commenced this legal malpractice action against defendant and his law firm for the $74,963 loss he had sustained. Supreme Court denied plaintiff’s motion for summary judgment. Plaintiff appeals.

We affirm. “In an action to recover damages for legal malpractice, a plaintiff must demonstrate that the attorney ‘failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession’ and that the attorney’s breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages” (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007], quoting McCoy v Feinman, 99 NY2d 295, 301 [2002]). Here, defendant stated in his affidavit that, when plaintiff asked him before [*2]signing the agreement whether he “could be 90% sure” that title could be quieted within one year, he responded that he “could not give [plaintiff] any percentage of certainty but that in [his] judgment [he] thought [he] would be able to get it done in that time.” However, he thereafter allegedly encountered many unexpected difficulties in attempting to gather information necessary for the action. He explained that the person who had transferred the property to plaintiff’s father had died many years earlier, leaving numerous heirs scattered throughout the country. He eventually had to hire a private investigator to assist in locating heirs and, once located, some were uncooperative. Defendant’s time records substantiated work in every month, sometimes many hours, as he attempted to gather necessary information and meet the deadline. Since he submitted proof of ongoing efforts that were met with considerable problems, this case is different from the situation where, for example, an attorney simply fails to act in a timely fashion believing a longer statute of limitations controls (see e.g. Bergin v Grace, 39 AD3d 1017, 1018 [2007]). Viewing the evidence in a light most favorable to defendant (see M & R Ginsburg, LLC v Segal, Goldman, Mazzotta & Siegel, P.C., 90 AD3d 1208, 1210-1211 [2011]) and accepting for purposes of this motion his proof regarding the caution he gave at the outset, his efforts and the unanticipated difficulties, the issue of whether he exercised reasonable skill in light of all the circumstances cannot be determined as a matter of law.”

In a fairly normal fashion, without much to indicate why the pleading was good enough, Supreme Court, Kings County has denied a CPLR 3211 motion to dismiss in Farkas v Mascolo
2015 NY Slip Op 01605  Decided on February 25, 2015  Appellate Division, Second Department.

“On a motion pursuant to CPLR 3211(a)(7) to dismiss a complaint for failure to state a cause of action, the court must afford the pleading a liberal construction, accept the facts alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; Leon v Martinez, 84 NY2d 83, 87). “Whether the complaint will later survive a motion for summary judgment, or whether the plaintiff will ultimately be able to prove [his or her] claims, of course, plays no part in the determination of a prediscovery CPLR 3211 motion to dismiss” (Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34, 38; see EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19; Tooma v Grossbarth, 121 AD3d 1093, 1095).

Here, construing the complaint liberally, accepting the facts alleged in the complaint as true, and according the plaintiff the benefit of every possible favorable inference, as we are required to do, the plaintiff stated a cause of action to recover damages for a violation of Judiciary Law § 487 (see Palmieri v Biggiani, 108 AD3d 604, 609; Dupree v Voorhees, 102 AD3d 912, 913; cf. Schiller v Bender, Burrows and Rosenthal, LLP, 116 AD3d 756, 758-759). Accordingly, the Supreme Court properly denied that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action.”

Armstrong v Blank Rome LLP    2015 NY Slip Op 01755   Decided on March 3, 2015  Appellate Division, First Department is an example of a well-pled 487 claim.  It remains in the case after a motion to dismiss.  Note the small zinger at the end of the decision regarding “appealability.”

“The complaint states a claim for violation of Judiciary Law § 487 with sufficient particularity (see Flycell, Inc. v Schlossberg LLC, __ F Supp 2d __, 2011 WL 5130159, *5, 2011 US Dist LEXIS 126024 [SDNY 2011]; Greene v Greene, 47 NY2d 447, 451 [1979]). Specifically, the complaint alleges that defendants concealed a conflict of interest that stemmed from defendant law firm’s attorney-client relationship with Morgan Stanley while simultaneously representing plaintiff in divorce proceedings against her ex-husband, a senior Morgan Stanley executive, who participated in Morgan Stanley’s decisions to hire outside counsel (see New York Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.7[a]). Contrary to defendants’ argument, applying a liberal construction to the allegations in the complaint (see e.g. Leon v Martinez, 84 NY2d 83, 87-88 [1994]), plaintiff identifies the nature of the conflict as stemming from defendants’ interest in maintaining and encouraging its lucrative relationship with Morgan Stanley and the impact of that interest on defendants’ judgement in its representation of plaintiff in the divorce proceedings (see New York Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.7[a]).

Further, the complaint alleges numerous acts of deceit by defendants, committed in the course of their representation of plaintiff in her matrimonial action. Additionally, the complaint sufficiently alleges that the individual defendants knew of but did not disclose defendant law firm’s representation of Morgan Stanley to plaintiff, and it details the calculations of her damages.

The court did not improvidently deny defendants’ motion to strike allegations in the complaint regarding the conflict of interest, and it correctly found that the allegations complained of are relevant to the legal malpractice claim (see Kaufman & Kaufman v Hoff, 213 AD2d 197, 199 [1st Dept 1995]). Although an order denying a motion to strike scandalous or prejudicial [*2]matter from a pleading is not appealable as of right (see CPLR 5701[b][3]), we nevertheless reach this issue since plaintiff did not raise the issue of appealability (see Chowaiki & Co. Fine Art Ltd. v Lacher, 115 AD3d 600 [1st Dept 2014]).”

Greenberg v Hertzfeld & Rubin, P.C. 2015 NY Slip Op 30268(U)   February 25, 2015   Supreme Court, New York County Docket Number: 650960/2014   Judge: Debra A. James is a good example of the microscopic nature of Supreme Court’s review of a legal malpractice complaint for standing and retainer contract issues.  The case involves a web of will and estate matters, with several attorney firms getting in the mix.

“This action arises from plaintiff Mark Greenberg’s (Greenberg) retention of Hertzfeld, pursuant to a retainer letter agreement letter dated March 4, 2011, as supplemented by a March 28, 2011 letter, between Hertzfeld and Greenberg. Under the terms of the retainer agreements, Hertzfeld undertook to represent Greenberg in connection with litigation related to the estates of Greenberg’s father-in-law, Harry Yaros, who died in 2006, and Greenberg.’ s wife, Laura Yaros Greenberg (Laura Greenberg), who died in 2009. Both estates are currently being administered in· the Surrogate’s Court, Queens County.

The first retainer letter agreement described the services to be performed, as follows, in pertinent part: legal matters relating to litigation over [Harry Yaros’s] estate and related matters. [Hertzf eld] will undertake a comprehensive review of all current litigations and provide [Greenberg] with recommendations as to how to proceed. Thereafter, [Hertzfeld] will implement those recommendations, provided [Greenberg wishes] us to do so and we agree that it is appropriate for us to do so.

The supplemental retainer agreement notes that Hertzfeld had undertaken its review of pending litigation and states that Greenberg has retained Hertzf eld to represent him in the following matters: 1) seeking to have Greeriberg appointed as administrator of his wife’s estate; 2) representing Greenberg and his wife’s estate as beneficiaries of the estate of Harry Yaros, and in seeking to have a 2004 will admitted to probate in the Harry Yaros estate, or alternatively, representing them in regard to any other will admitted to probate; 3) representing Greenberg and Laura Greenberg’s estate as beneficiaries of a joint account with right of survivorship [the Joint Account] with Harry Yaros, and related controversies; 4) representing Greenberg in connection with any motion for sanctions against Greenberg in the Harry Yaros estate proceeding; and 5) representing Greenberg and his wife’s estate in seeking to have a permanent executor other being administered other than Neal Yaros appointed for the estate of Harry Yaros. The supplemental retainer agreement provides further: [e]xcept as set forth above, we are not at this time undertaking to represent you in connection with any other matters we discussed, including but not limited to claims you may have against other attorneys, tax issues relating to personal income taxes or gift tax returns you may have filed, or claims that you and your wife’s estate may have against third parties such as the guardian for your father-in-law in connection with a final accounting filed by him or otherwise.

The amended verified complaint and Greenberg’s affidavit are vague and imprecise, and are riddled with factual inconsistencies. Thus, it is difficult to ascertain the factual basis of the complaint, even under the lenient standards applicable to a CPLR 3211 motion to dismiss, in order to determine whether Greenberg has any cognizable cause of action. It is hornbook law that the determination on a motion based upon the complaint is limited to a review of the four corners of such pleading, which must be construed liberally, with all reasonable factual allegations accepted as true, and the plaintiff being [* 7]accorded the benefit of every reasonable inference (see Esposito v Noto, 90 AD3d 825 [2d Dept 2011]) . The test is whether the allegations of the complaint provide “‘sufficient notice of the transactions, occurrences, or series of transactions or occurrences intended to be proved and whether the requisite elements of any cause of action known to our law can be discerned from its averments’ [citations omitted]” (Moore v Johnson, 147 AD2d621, 621 [2d Dept 1989]).

Accordingly it is ORDERED that the motion of defendants Hertzfeld & Rubin, P.C., Edward L. Birnbaum, James S. Kaplan, Ian Ceresney, Bryan Lipsky, and Herbert Rubin, pursuant to CPLR 3211 (a) (1) and (7), and CPLR 3013, to dismiss the amended verified complaint, is granted; and it is further ORDERED that the amended verified complaint is dismissed; 19 [* 19]and it is further ORDERED that the Clerk shall enter judgment accordingly, with costs and disbursements, as taxed by the Clerk of the Court, upon presentment of an appropriate bill of costs.

Attorneys rely upon their legal malpractice insurance for stability and backup.  Clients rely upon the attorney’s legal malpractice insurance for safety and reassurance that when their human attorney makes a mistake, there will be someone who steps in and protects them.  What happens when the insurance company turns rogue?

Suckle Schlesinger PLLC v Ironshore Indem., Inc.   2015 NY Slip Op 30263(U)    February 24, 2015    Supreme Court, New York County    Judge: Cynthia S. Kern is a curious case of an insurer acting unpredictably, and shooting itself in the foot.

“The facts are as follows. Plaintiff was insured pursuant to a Lawy~rs Professional Liability Policy with lronshore. Plaintiff represented its client in a claim for property damage in a Supreme Court action, which action was settled for $600,000. This amount was pl~ced in plaintiffs escrow ·I account and was not released to plaintiffs client. Plaintiffs client then commenced an action for [* 1]legal malpractice against plaintiff. Plaintiff sent notice of the legal malpractice action commenced against it to lronshore. On July 11, 2013, York Pro, acting as defendant fronshore’s claim agent, sent plaintiff a letter, which stated as follows:

As such, we will provide coverage for this claim, subject to the following reservation of rights. Section I .B provides that the Insurer shall have the right and duty to defend any claim. As a result, Ironshore has facilitated the Insured’s retention of Robert Modica, Esq. of Gordon & Rees to provide a defense for the insured. We also direct your attention to Section VII.A of the Policy which 1 provides that the Insured shall not admit liability, offer to settle or agree to any settlement in connection with any Claim without the express prior written consent of the Insurer. As a result, we would ask that you limit discussions regarding this case to only those between you and Mr. Modica and his associates/partners.

After plaintiff received this letter, it alleges and defendants do not dispute, that it did not have any discussions with any persons other than the attorneys designated by the defendant insurance company about the case and the settlement of the case until after the settlement agreement was signed.

In November 2013, Mr. Beckman informed plaintiff that a settlement agreement had been reached in the legal malpractice action for the sum of $230,000.00. On November 21, 2013, Mr. Beckman sent an email to plaintiff in which he attached pdfs of the signed settlement agreement and indicated that he would be sending the originals for signature. On November 2, 2013, Gordon & Rees sent a written letter to plaintiff, which stated that two sets of the settlement agreement were enclosed for signature by plaintiff, which should then be returned to Gordon & 2 [* 2]1\ Rees. Plaintiff then signed the enclosed agreement, returned it to Gordon & Rees along with a check made payable to Ironshore in the amount of $5,000 as and for the policy deductible and a cover letter requesting that the insurance company Ironshore issue a check for $230,000 pursuant to the terms of the settlement agreement. In response to this letter, Gordon & Rees advised plaintiff that their contact person at York Pro was Collette Siesholtz and provided plaintiff with her email. Plaintiff then sent an email to York Pro, dated November 26, 2013, to the attention of Collette Siesholtz, requesting that she issue the settlement check pursuant to the terms of the settlement agreement. On November 27, 2013, Collette Siesholtz of York Pro sent an email to the plaintiff in which she stated that “I have requested the check and have noted the time constraint for payment.” The plaintiff then sent another email to Ms. Siesholtz asking for confirmation that the check was being processed. Ms. Siesholtz responded with another email, dated December 3, stating that “The claim was previously submitted last week with a request to expedite. I will follow up to see if the funding is being processed.” On December 4, the day before the settlement payment of $230,000 was due pursuant to the terms of the settlement agreement, Ms. Siesholtz of York Pro sent an email to plaintiff stating that Ironshore would not be making payment for the settlement as the $230,000.

Plaintiff has established that the settlement of the claim was made’ with the consent of the insurer and the insurer has failed to raise a disputed issue of fact with respect to its consent of the settlement. In the letter from defendants acknowledging that they would provide coverage for the claim, they clearly provided that they were retaining Robert Modica Esq. of Gordon & Rees to provide a defense for plaintiff.

Based on the foregoing, the court need not reach the other arguments raised by plaintiff; plaintiff is granted summary judgment on its claim for breach of contract and the clerk is directed to enter summary judgment in favor of plaintiff and against defendants for the amount of $230,000, plus costs and disbursements, plus interest from December 5, 2013. The foregoing constitutes the decision and order of the court.”

The first set of attorneys obtained dismissal in 2014. Hyman v. Schwartz, 2014 NY Slip Op 01362 [114 AD3d 1110].   “In August 2007, plaintiff—then a Cornell University graduate student—was charged with violating the University’s Campus Code of Conduct by allegedly harassing a professor. Following disciplinary proceedings, the University’s Hearing Board sustained the harassment charge and issued a penalty, which was, apart from a slight modification, affirmed by the University’s Review Board. Plaintiff then retained defendant Arthur Schwartz to represent her in a CPLR article 78 proceeding challenging the University’s determination. In addition, Schwartz represented plaintiff in a Title IX claim (see 20 USC § 1681 et seq.). After both of those matters were unsuccessful (Matter of Hyman v Cornell Univ., 82 AD3d 1309 [2011]; Hyman v Cornell Univ., 834 F Supp 2d 77 [2011]), plaintiff commenced the instant action against Schwartz, defendant Schwartz, Lichten & Bright, PC (hereinafter the law firm)—Schwartz’s former and now dissolved law firm—and defendants Stuart Lichten and Daniel Bright—his former partners—seeking damages for negligent and intentional infliction of emotional distress and legal malpractice. In the same complaint, plaintiff also challenged an arbitration award made in Schwartz’s favor in connection with a fee dispute between Schwartz and plaintiff.”

Now, the second (and last) attorneys have won dismissal. Hyman v Burgess  , 2015 NY Slip Op 01687, Decided on February 26, 2015 Appellate Division, Third Department.

“Plaintiff first asserts that Supreme Court erred in denying her motion to dismiss defendant’s counterclaims. A motion to dismiss for failure to state a cause of action can be granted only where the facts alleged do not “fit within any cognizable legal theory” (Leon v Martinez, 84 NY2d 83, 87-88 [1994]; see Lewis v DiMaggio, 115 AD3d 1042, 1043 [2014]; Brooks v Key Trust Co. N. A., 26 AD3d 628, 629-630 [2006], lv dismissed 6 NY3d 891 [2006])[FN2]. As to defendant’s breach of contract counterclaim, she alleged that the parties executed enforceable retainer agreements, defendant performed professional services under those agreements and plaintiff failed to perform, thereby causing defendant to sustain damages. Affording defendant’s counterclaims a liberal construction, accepting the allegations as true and giving defendant “the benefit of every possible inference,” we determine that she has stated a viable cause of action against plaintiff for breach of contract (EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]; see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]; Torok v Moore’s Flatwork & Founds., LLC, 106 AD3d 1421, 1422 [2013]). However, with regard to defendant’s counterclaim that plaintiff was unjustly enriched by her refusal to remit necessary payments for the legal services and related expenses that defendant provided, the assertions raised in defendant’s breach of contract counterclaim echo this equitable claim and, therefore, it must be dismissed (see Corsello v Verizon N.Y., Inc., 18 NY3d 777, 790-791 [2012]; Samiento v World Yacht Inc., 10 NY3d 70, 81 [2008]).

Defendant’s counterclaim of quantum meruit “requires a showing of ‘a [party]’s performance of services in good faith, acceptance of those services by [the other party], an expectation of compensation and proof of the reasonable value of the services provided'” (Rafferty Sand & Gravel, LLC v Kalvaitis, 116 AD3d 1290, 1291-1292 [2014], quoting DerOhannesian v City of Albany, 110 AD3d 1288, 1292 [2013], lv denied 22 NY3d 862 [2014]). Accepting defendant’s allegations as true, namely that she provided plaintiff with legal services, in good faith and with the understanding that payment would be remitted, and that such services were accepted by plaintiff without the provision of due compensation, we find that defendant stated a cognizable equitable claim for quantum meruit (see Rafferty Sand & Gravel, LLC v Kalvaitis, 116 AD3d at 1291-1292; Venture Silicones, Inc. v General Elec. Co., 14 AD3d 924, 925 [2005]).

Turning our attention to defendant’s cross motion seeking dismissal of the amended complaint, we conclude that Supreme Court properly dismissed plaintiff’s legal malpractice cause of action on the merits. “‘In order to sustain a claim for legal malpractice, a plaintiff must establish both that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession which results in actual damages to a plaintiff, and that the plaintiff would have succeeded on the merits of the underlying action “‘but for'” the attorney’s negligence'” (Leder v Spiegel, 9 NY3d 836, 837 [2007] cert denied sub nom Spiegel v Rowland, 552 US 1257 [2008], quoting AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007]; accord Hyman v Schwartz, 114 AD3d at 1112; see [*2]Kaufman v Medical Liab. Mut. Ins. Co., 121 AD3d 1459, 1460 [2014]). Although plaintiff maintains that defendant’s professional competence was deficient and failed to conform with

the requirements of the parties’ retainer agreements, she does not allege, to any degree, that defendant’s purported shortcomings precluded her success in the litigation at issue or caused her to sustain ascertainable damages (see Arnold v Devane, 123 AD3d 1202, 1204 [2014]; MacDonald v Guttman, 72 AD3d 1452, 1455 [2010]; Tabner v Drake, 9 AD3d 606, 610 [2004]). Having failed to plead an essential element of a legal malpractice cause of action, Supreme Court properly granted defendant’s motion to dismiss this claim (see Hyman v Schwartz, 114 AD3d at 1112; compare Snyder v Brown Chiari, LLP, 116 AD3d 1116, 1116-1117 [2014]; Alaimo v McGeorge, 69 AD3d 1032, 1034 [2010]). Likewise, the court’s dismissal of plaintiff’s claims sounding in, among other things, unjust enrichment, breach of contract and breach of fiduciary duty — all of which were encapsulated within and entirely duplicative of plaintiff’s legal malpractice cause of action — was correct (see Adamski vLama, 56 AD3d 1071, 1072-1073 [2008]; Guiles v Simser, 35 AD3d 1054, 1055 [2006]).

We must say that we’re puzzled over the Appellate Division’s reference to a CPLR 3211(a) motion “to dismiss the complaint insofar as asserted against them, or, in the alternative, for summary judgment dismissing the complaint insofar as asserted against them, or to compel additional discovery.”  Portilla v Law Offs. of Arcia & Flanagan  2015 NY Slip Op 01626
Decided on February 25, 2015  Appellate Division, Second Department, modifys the order of Supreme Court and allows discovery post-note of issue.

“The Supreme Court properly denied, as untimely, that branch of the appellants’ motion which was to dismiss the complaint pursuant to CPLR 3211(a)(1) insofar as asserted against them, as it was not made within the time period in which the appellants were required to serve an answer (see CPLR 3211[e]), and no extension of time to make the motion was requested by the appellants or granted by the court (see CPLR 2004; Lema v New York Cent. Mut. Fire Ins. Co., 112 AD3d 891; Clinkscale v Sampson, 74 AD3d 721; Bennett v Hucke, 64 AD3d 529; Bowes v Healy, 40 AD3d 566).

The Supreme Court also properly denied that branch of the appellants’ motion which was to dismiss the complaint pursuant to CPLR 3211(a)(7) insofar as asserted against them. “To state a cause of action to recover damages for legal malpractice, a plaintiff must allege: (1) that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and (2) that the attorney’s breach of the duty proximately caused the plaintiff actual and ascertainable damages” (Dempster v Liotti, 86 AD3d 169, 176 [internal quotation marks omitted]; see Keness v Feldman, Kramer & Monaco, P.C., 105 AD3d 812; Held v Seidenberg, 87 AD3d 616, 617). Here, accepting the facts as alleged in the complaint as true and according the plaintiff the benefit of every possible favorable inference (see Leon v Martinez, 84 NY2d 83, 87-88), [*2]the complaint alleged sufficient material facts giving rise to a cognizable cause of action to recover damages for legal malpractice.

Moreover, for a defendant in a legal malpractice case to succeed on a motion for summary judgment, evidence must be presented in admissible form establishing that the plaintiff is unable to prove at least one of the essential elements (see Verdi v Jacoby & Meyers, LLP, 92 AD3d 771, 772; Goldberg v Lenihan, 38 AD3d 598). Here, the appellants contend that the alleged breach of duty did not cause the plaintiff damages. However, their submissions failed to eliminate all triable issues of fact with respect to whether the plaintiff sustained damages proximately caused by their alleged malpractice. Accordingly, the Supreme Court properly denied that branch of the appellants’ motion which was for summary judgment dismissing the complaint insofar as asserted against the appellants.

However, the Supreme Court should have granted that branch of the appellants’ motion which was for additional discovery. A court may, in its discretion, grant permission to conduct additional discovery after the filing of a note of issue and certificate of readiness where the moving party demonstrates that “unusual or unanticipated circumstances” developed subsequent to the filing, requiring additional pretrial proceedings to prevent substantial prejudice (22 NYCRR 202.21[d]; see Lopez v Retail Prop. Trust, 84 AD3d 891; Audiovox Corp. v Benyamini, 265 AD2d 135, 140). Here, the appellants demonstrated the existence of unusual or unanticipated circumstances which warranted granting their request for post-note-of-issue discovery. Accordingly, the Supreme Court should have granted that branch of the appellants’ motion.”

USHA SOHA Terrace, LLC v Robinson Brog Leinwand Greene Genovese & Gluck, P.C. 2014 NY Slip Op 31813(U),  July 9, 2014,  Supreme Court, New York County , Judge: Melvin L. Schweitzer is a fairly typical Judiciary Law 487 case.  It is a legal malpractice and Judiciary Law 487 case in which plaintiffs assert direct and derivative claims against legal counsel for the owner and developer in a construction project in which plaintiff LLC was a minority investor.  On a motion to dismiss, the court dismissed.

“The motion to dismiss is granted. First, plaintiff Minority i\:’fember, as a member of a limited liability corporation, lacks standing to sue in its individual capacity for losses derived solely from injury to the limited liability company. See Yudell v Gilbert, 99 AD3d 108, 113-114 (1st Dept 2012]; Breslin Realty Dev. Corp. v Shaw, 72 AD3d 258, 266 (2d Dept 2010); Baker v Andover Assoc. Mgt. Corp., 30 Misc 3d 1218 [A], 2009 NY Slip Op 52788[U], * 16-17 (Sup Ct Westchester County 2009). To determine if a claim is direct or derivative, the court must look at the source of the claim of right. If the harm is from the defendants to the corporation, the harm to the shareholders or investors flows through the corporation, and is derivative. On the other , ~ hand, if the right flows from a breach of a duty owed directly to the shareholder, then the suit is direct. See Weber v King, 110 F Supp 2d 124, 132 (ED NY 2000); Baker v Andover Assoc. Mgt. Corp., 30 Misc 3d 1218 [A], 2009 NY Slip Op 52788 [U], * 16-17., A claim for diminution in ‘ value of the shares is harm to the corporation, the shareholder’s injury flows through the corporation, and the claim is derivative even if the decrease in value derives from a breach of fiduciary duty. See Yudell v Gilbert, 99 AD3d at 113-144; O’Neill v Warburg Pincus & Co., 39 AD3d 281, 281-282 (1st Dept 2007). Here, in the amended complaint, plaintiff asserts losses as any “monies owed to [2280 FDB] and [Developer], which were in tum paid to [RGS Holdings and Futterman] resulted in actual monetary losses to [plaintiff Minority Member], in that [plaintiff Minority Member] retains a fourteen percent ( 14%) inter~st in assets of Developer” (amended complaint,~ 43). This claim for diminution in the value of plaintiff’s shares involves harm to the corporation, and may only be pursued derivatively. In addition, the only other injury alleged is the failure of 2280 FOB to recover any portion of its aw~d against Racanelli, which is a direct injury only to 2280 FDB. ”

“Finally, the third claim in the amended complaint fails to sufficiently plead a claim under Judiciary Law § 487. Under that statute, the plaintiff needs to allege an extreme and chronic pattern of legal delinquency in order to recover. Solow Mgt. Corp. v Seltzer, 18 AD3d 399, 400 (1st Dept 2005]; Pellegrino v File, 291 AD2d at 63). The amended complaint here fails to allege the requisite pattern of wrongdoing or deceit necessary to sustain that claim, and fails to allege that any loss suffered by 2280 FDB was the proximate result of Legal Counsel’s alleged . collusion or deceit. “