Sometimes the question of legal malpractice is at the forefront of a case, and sometimes it is the least important part.  in K2 Inv. Group, LLC v American Guar. & Liab. Ins. Co.  2014 NY Slip Op 01102 [22 NY3d 578]  February 18, 2014  Judge Smith of the Court of Appeals makes the rare admission of their mistake, and agrees that on a motion to renew, the decision should be reversed.

"In K2-I, we affirmed an order granting plaintiffs summary judgment, holding that American Guarantee’s breach of its duty to defend barred it from relying on policy exclusions. We later granted reargument (21 NY3d 1049 [2013]), and we now vacate our prior decision and reverse the Appellate Division’s order.{**22 NY3d at 585}"

In Servidone—a case in which, as in this one, the insurer was relying on policy exclusions in defending against a suit for indemnification—we stated the question as follows:

"Where an insurer breaches a contractual duty to defend its insured in a personal injury action, and the insured thereafter concludes a reasonable settlement with the injured party, is the insurer liable to indemnify the insured even if coverage is disputed?" (64 NY2d at 421.)
We answered the question in Servidone no. In K2-I, we held that "when a liability insurer has breached its duty to defend its insured, the insurer may not later rely on policy exclusions to escape its duty to indemnify the insured for a judgment against him" (21 NY3d at 387). The Servidone and K2-I holdings cannot be reconciled.

In short, to decide this case we must either overrule Servidone or follow it. We choose to follow it.

There is much to be said for the rule of K2-I, as our previous opinion shows; but, as the Servidone opinion shows, there is also much to be said for the Servidone rule. Several states follow the Servidone approach (e.g. Sentinel Ins. Co., Ltd. v First Ins. Co. of Haw., Ltd., 76 Haw 277, 290-297, 875 P2d 894, 907-914 [1994]; Polaroid Corp. v Travelers Indem. Co., 414 Mass 747, 760-766, 610 NE2d 912, 919-923 [1993]), while others adopt a rule like that of K2-I (e.g. Employers Ins. of Wausau v Ehlco Liquidating Trust, 186 Ill 2d 127, 150-154, 708 [*4]NE2d 1122, 1134-1136 [1999]; Missionaries of Co. of Mary, Inc. v Aetna Cas. & Sur. Co., 155 Conn 104, 112-114, 230 A2d 21, 25-26 [1967]). A federal district judge, writing in 1999, said that "[t]he majority of jurisdictions which have considered the question" follow the Servidone rule (Flannery v Allstate Ins. Co., 49 F Supp 2d 1223, 1227 [D Colo 1999]).

Under these circumstances, we see no justification for overruling Servidone. Plaintiffs have not presented any indication that the Servidone rule has proved unworkable, or caused{**22 NY3d at 587} significant injustice or hardship, since it was adopted in 1985. When our Court decides a question of insurance law, insurers and insureds alike should ordinarily be entitled to assume that the decision will remain unchanged unless or until the legislature decides otherwise. In other words, the rule of stare decisis, while it is not inexorable, is strong enough to govern this case.

"

Plaintiff is on probation and gives an oral sample for drug testing.  Kroll labs tests the saliva and finds THC.  An independent urine drug test taken as a safety measure by Plaintiff is negative.  Plaintiff’s probation period is extended.  There are no pecuniary losses.  May Plaintiff recover. 

Here, yes.  If it were legal malpractice, no.  Why?  InLandon v Kroll Lab. Specialists, Inc.  2013 NY Slip Op 06597 [22 NY3d 1]  October 10, 2013 Lippman, J. , the Court of Appeals tells us that legal malpractice is different.

"In addition, we reject defendant’s argument that plaintiff failed to allege that he has suffered a cognizable harm (see e.g. Martinez v Long Is. Jewish Hillside Med. Ctr., 70 NY2d 697, 699 [1987] ["where there is a breach of a duty owed by defendant to plaintiff, the breach of that duty resulting directly in emotional harm is actionable"]). In this procedural posture, {**22 NY3d at 8}plaintiff’s allegations of the loss of freedom occasioned by the extension of his probation and the resulting emotional and psychological harm are sufficient to withstand a motion to dismiss. Defendant places too much weight upon our recent decision in Dombrowski v Bulson (19 NY3d 347 [2012]), characterizing it as holding that loss of freedom damages are not recoverable in negligence actions. In that case, we found that a legal malpractice action did not lie against a criminal defense attorney to recover nonpecuniary damages. The decision was based in part on policy considerations, including the potentially devastating consequences such liability would have on the criminal justice system and, in particular, the possible deterrent effect it would have on the defense bar concerning the representation of indigent defendants (see Dombrowski, 19 NY3d at 352). Similar policy considerations do not weigh in defendant’s favor here."

Not that many legal malpractice cases get tried, and fewer even in Civil Court, New York County.  here is one that went to defendant.  Milgram Thomajan & Lee, P.C. v Golden Gate Petroleum, P.C.    2014 NY Slip Op 24063 [43 Misc 3d 68]. 

"The action arises out of plaintiff’s representation of the first-named defendant, a petroleum importer, in connection with an administrative protest of a customs duty assessment imposed on a shipment of gasoline and related chemicals. The jury’s verdict, finding that plaintiff did not commit malpractice in its underlying representation of defendant, was not against the weight of the evidence. The trial evidence, fairly interpreted, supports the jury’s evident rejection of defendant’s contention that but for plaintiff’s advice, defendant would have prevailed in the underlying customs protest, one which, the record shows, defendant elected to pursue in the face of plaintiff’s frank admonition that it "may prove a tough fight, the outcome of which cannot be predicted with any certainty." The evidence, including the conflicting expert OPINION TESTIMONY, permitted the jury to conclude that, in advising defendant, the lawyers of plaintiff law firm did not disregard settled law (see Darby & Darby v VSI Intl., 95 NY2d 308, 313 [2000]) and would have permitted a jury finding that the advice itself was not the proximate cause of defendant’s losses (see Chadbourne & Parke v HGK Asset Mgt., 295 AD2d 208, 209 [2002]). And while defendant posits several alternative courses that plaintiff might have pursued in the underlying administrative protest, it FAILED to show that the tactical decisions made by the firm did not constitute "proper strategic legal decision-making" (Taylor v Paskoff & Tamber, LLP, 102 AD3d 446, 448 [2013]), or so the jury reasonably could find. Nor was the jury’s consideration of the LEGAL MALPRACTICE issue shown to have been compromised in any way [*2]by the form{**43 Misc 3d at 70} of the verdict sheet, particularly when that document is viewed in the context of the charge as a whole (see Plunkett v Emergency Med. Serv. of N.Y. City, 234 AD2d 162, 163 [1996]).

The record discloses no evidentiary error warranting reversal. The out-of-court statements made by defendant’s (now) deceased CHIEF FINANCIAL OFFICER were admissible under the "speaking agent" exception to the hearsay rule (see Loschiavo v Port Auth. of N.Y. & N.J., 58 NY2d 1040, 1041 [1983]). Further, in light of the voluminous evidence considered by the jury, including over 60 trial exhibits introduced by defendant, any error in the exclusion of the two documents now complained of by defendant would have been harmless (see Ramkison v New York City Hous. Auth., 269 AD2d 256, 256 [2000]).

We note finally that the court properly directed a verdict in favor of plaintiff on its main claim for unpaid legal services, a claim which, as one abandoned by plaintiff’s trustee in BANKRUPTCY, revested in plaintiff at the close of the bankruptcy proceeding (see Dynamics Corp. of Am. v Marine Midland Bank-N.Y., 69 NY2d 191, 195-196 [1987]; Culver v Parsons, 7 AD3d 931, 932 [2004])."

Student – Plaintiff is charged with harassing a Cornell professor, and loses at the disciplinary and College level.  Student then sues attorney for legal malpractice, breach of fiduciary duty and breach of contract.  Case is lost simply because Plaintiff does not allege and show how the attorney could have won the Article 78 case showing that the University was arbitrary and capricious.

"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."

"However, defendants correctly argue that Supreme Court should have granted their motion to dismiss the legal malpractice claim. It is well established that, "[i]n 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] [internal quotation marks and citation omitted]; accord Alaimo v McGeorge, 69 AD3d 1032, [*3]1034 [2010]; see Kreamer v Town of Oxford, 96 AD3d 1128, 1128-1129 [2012]; see also MacDonald v Guttman, 72 AD3d 1452, 1454-1455 [2010]; Bixby v Somerville, 62 AD3d 1137, 1139 [2009]). Here, although the complaint is replete with allegations of Schwartz’s alleged failures to use reasonable and ordinary skill in connection with both of plaintiff’s underlying claims, it contains no allegation that, but for these alleged failures, plaintiff would have been successful on either claim.[FN2] Therefore, even if we accept the allegations as true and liberally construe the complaint to allege negligent representation by Schwartz (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]; Moulton v State of New York, 114 AD3d 115, 119 [2013]; Scheffield v Vestal Parkway Plaza, LLC, 102 AD3d 992, 993 [2013]), the allegations are insufficient to make out a prima facie case of legal malpractice (see Kreamer v Town of Oxford, 96 AD3d at 1128; MacDonald v Guttman, 72 AD3d at 1455)."

Client hires attorney.  Attorney successfully bails out just before trial.  There is no expert.  Medical malpractice case is dismissed because there is no expert.  Attorney asserts a lien, and then when the lien is granted, defends a legal malpractice case on the basis of the lien.  Is this fair?

Snyder v Brown Chiari, LLP   2014 NY Slip Op 02363 [116 AD3d 1116]  April 3, 2014  Appellate Division, Third Department finds for plaintiff, but only because when the lien was litigated,plaintiff was precluded from arguing malpractice.

"Defendants urge as an alternative ground for affirmance the collateral estoppel argument that they unsuccessfully asserted before Supreme Court. They premise this argument upon the fact that Supreme Court permitted their lien on plaintiff’s file and the line of cases which hold that "where a client does not prevail in an action brought by counsel for the value of professional services, a subsequent action by the client for malpractice is barred by collateral estoppel" (Thruway Invs. v O’Connell & Aronowitz, 3 AD3d 674, 676 [2004] see e.g. Zito v Fischbein Badillo Wagner Harding, 80 AD3d 520, 521 [2011]). Here, at the appearance regarding the lien on the file, plaintiff was, as stated by Supreme Court in its decision, "expressly prevented by [Supreme] Court from asserting any claims relative to the actual services performed by [d]efendants, and strictly limited to a discussion of the accuracy of the amount of the disbursements made by [d]efendants on her behalf." We agree with Supreme Court’s characterization of the lien dispute and, under such circumstances, further agree with Supreme Court that plaintiff did not previously have a full and fair opportunity to litigate the issue of whether defendants were negligent so as to support invoking collateral estoppel (see generally Buechel v Bain, 97 NY2d 295, 303-304 [2001], cert denied 535 US 1096 [2002]). The remaining arguments, to the extent properly before us, are academic or without merit."

Suing an attorney for his handling of a medical malpractice case is among the most complicated cases in law.  Plaintiff must prove the negligence of two professionals and must do so with the use of experts in two separate fields.  One common scenario is the attorney who bails out just before trial, or at summary judgment time, because there is no expert.

Snyder v Brown Chiari, LLP  2014 NY Slip Op 02363 [116 AD3d 1116]  April 3, 2014  Appellate Division, Third Department is one case where plaintiff found an expert who had actually reviewed the file.

"In late 2002, plaintiff underwent a surgical procedure and shortly thereafter developed complications that resulted in three further surgeries, none of which was successful. She retained defendants, which commenced a medical malpractice action in March 2004 against the physician who had performed the initial surgery as well as that physician’s partnership. In late February 2007, and with a trial date scheduled for early March 2007, defendants attempted to withdraw as counsel to plaintiff because, among other things, an expert had not been retained. Supreme Court (Falvey, J.) denied defendants’ motion to withdraw as counsel to plaintiff, granted a motion by the defendants in the medical malpractice action to preclude plaintiff from offering expert testimony at trial and, because a prima facie case could not be established without expert proof, dismissed the medical malpractice action. When plaintiff attempted to obtain her file from defendants, Supreme Court permitted a lien for defendants’ disbursements of $7,500.45.

Plaintiff commenced the instant action in early 2009 alleging, among other things, legal malpractice. Defendants answered and eventually made a motion to dismiss pursuant to CPLR 3211 asserting various grounds including collateral estoppel and failure to state a cause of action. Supreme Court (Sherman, J.) found no merit in the collateral estoppel argument; however, the court determined that plaintiff failed to establish the legal malpractice claim because of a lack of proof that she would have been successful in the underlying medical malpractice action. Finding the remaining causes of action duplicative of the legal malpractice claim, the court dismissed the [*2]complaint. Plaintiff appeals.

Plaintiff stated a cause of action for legal malpractice. Elements of such a cause of action include "establish[ing] 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" (AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007] [citations omitted] accord Alaimo v McGeorge, 69 AD3d 1032, 1034 [2010]). In the procedural context of a motion to dismiss for failure to state a cause of action, "the court must afford the pleadings a liberal construction, take the allegations of the complaint as true and provide plaintiff the benefit of every possible inference" (EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]). "Whether the plaintiff will ultimately be successful in establishing those allegations is not part of the calculus" (Landon v Kroll Lab. Specialists, Inc., 22 NY3d 1, 6 [2013] [internal quotation marks and citations omitted]) and "a court may freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint" (Leon v Martinez, 84 NY2d 83, 88 [1994]).

Here, plaintiff submitted, among other things, an affidavit and attached memorandum from a physician licensed in New York. This physician had been consulted by defendants in 2003, and he produced his memorandum from such time which set forth in ample detail for purposes of opposing a motion to dismiss that plaintiff’s surgeon deviated from appropriate care. His affidavit reaffirmed that he believed there was malpractice in the treatment of plaintiff by her surgeon and, further, stated that he had been available to testify at the scheduled 2007 trial, but was never contacted by defendants. Such proof, together with the detailed allegations in the complaint, state a cause of action."

Very common to legal malpractice litigation is a dismissal of contract causes of action as duplicative of the negligence claim.  Postiglione v Castro  2014 NY Slip Op 05527
Decided on July 30, 2014  Appellate Division, Second Department is an example of how a contract cause of action survives.

"In the order appealed from dated March 21, 2012, the Supreme Court granted the defendants’ motion pursuant to CPLR 3211(a) to dismiss the complaint in its entirety. As relevant to this appeal, the Supreme Court granted those branches of the defendants’ motion which were to dismiss the breach of contract and fraud causes of action as duplicative of the legal malpractice cause of action, which it dismissed as barred by the statute of limitations.

The plaintiff moved pursuant to CPLR 5015(a) to vacate the order dated March 21, 2012, "in the interests of justice," and pursuant to CPLR 3025(b) for leave to amend the complaint to assert only two causes of action—one alleging breach of contract and one alleging fraud. In the order appealed from dated September 13, 2012, the Supreme Court denied the plaintiff’s motion.

As a general rule, where a cause of action alleging breach of contract or fraud arises from the same facts as a legal malpractice cause of action and does not allege distinct damages, the breach of contract or fraud cause of action must be dismissed as duplicative of the legal malpractice cause of action (see Financial Servs. Veh. Trust v Saad, 72 AD3d 1019, 1020; Kvetnaya v Tylo, 49 AD3d 608; Iannucci v Kucker & Bruh, LLP, 42 AD3d 436, 437; Town of Wallkill v Rosenstein, 40 AD3d 972; Town of N. Hempstead v Winston & Strawn, LLP, 28 AD3d 746, 749; Daniels v Lebit, 299 AD2d 310). Here, the plaintiff’s breach of contract cause of action makes no claim that the defendants provided inadequate representation in his legal matters. Rather, the plaintiff claims, among other things, that the defendants over-billed him and took money from his escrow account without his permission, in violation of the retainer agreement. Under these circumstances, the plaintiff’s breach of contract cause of action was not duplicative of the legal malpractice cause of action, and should not have been dismissed on that basis (see Loria v Cerniglia, 69 AD3d 583; Boglia v Greenberg, 63 AD3d 973, 976; Ideal Steel Supply Corp. v Beil, 55 AD3d 544, 545-546).

Similarly, the cause of action alleging fraud makes no claim of inadequate or negligent legal representation. Rather, the fraud cause of action essentially alleges that the defendants made material misrepresentations concerning the money that the plaintiff owed them. Thus, the fraud cause of action was not duplicative of the legal malpractice cause of action and should not have been dismissed on that ground."

Jacoby & Meyers and Finkelstein & Partners are players in the personal injury big leagues.  Finkelstein & Partners may be the biggest law firm in NY state.  In any event, they deal with a huge number of personal injury cases.  One of the biggest concerns in personal injury litigation is who will pay for the expenses as the cases move forward.  In Flomenhaft v Finkelstein  2014 NY Slip Op 51121(U)  Decided on July 22, 2014  Supreme Court, New York County   Jaffe, J. we see one attorney who moved to J&M and then left in a battle all over the state.  For the most part, the claims of legal malpractice and libel have something to do with litigation funding, and how it affects the plaintiffs.

"On May 2, 2005, non-party Joel Harrison retained defendant Finkelstein & Partners, LLP (F & P) to represent him in a personal injury case. Soon thereafter, F & P brought the action in Broome County Supreme Court. Plaintiff, who had moved his practice to defendant Jacoby & Meyers, LLP (J & M) in April 2009, was also named counsel to F & P, and was assigned as lead trial attorney on the Harrison matter.

Eight months later, on December 28, 2009, plaintiff abruptly resigned from J & M. Shortly thereafter, on January 25, 2010, Harrison discharged F & P and retained plaintiff to [*2]represent him on the personal injury matter.

In March 2010, J & M commenced an action against plaintiff and his law firm in Orange County, based on a loan it had allegedly made to him. That action was transferred to this court (Index No. 403550/10).

On June 16, 2010, Harrison discharged plaintiff and re-retained F & P on his personal injury action.

On August 6, 2010, during the pendency of the personal injury action, Harrison, represented by F & P, brought an action in Broome County Supreme Court against plaintiff, advancing in his verified complaint causes of action for conversion, breach of fiduciary duty, legal malpractice, and fraud, based on allegations that plaintiff had induced him to obtain litigation funding for the personal injury action and then converted the proceeds to his own use. (NYSCEF 9).

"By notice of motion, defendants move pursuant to CPLR 3211(a) for an order dismissing counts one and two of the complaint, striking the request for punitive damages, and imposing sanctions. Plaintiff opposes and by cross motion moves for an order granting him leave to amend his summons with notice and/or complaint."

"It is well-settled that "a statement made in the course of legal proceedings is absolutely privileged if it is at all pertinent to the litigation." (Sexter, at 171). The privilege "applies to statements made in or out of court, on or off the record, and regardless of the motive with which they were made." (El Jamal v Weil, 116 AD3d 732 [2d Dept 2014]; Sexter, 38 AD3d at 171). The privilege does not extend to statements that are not pertinent to the proceedings. (Youmans v Smith, 153 NY 214, 219 [1897]). Courts are liberal in applying the privilege even where the statement is only possibly pertinent to the proceedings "because the due administration of justice requires that the rights of clients should not be imperiled by subjecting their legal advisers to the constant fear of suits for libel or slander." (Youmans, 153 NY at 219-220).

Here, accepting as true the allegations contained in the complaint, as I must on this motion, as the defamatory statement is alleged to have been made by Finkelstein to Harrison the day before Harrison was to be deposed in his action against plaintiff, it was made in the course of a legal proceeding, a proposition not challenged by plaintiff. And, as the statement pertains to the allegations set forth in that legal proceeding, it is absolutely privileged."