Riverhead:  One scenario that repeatedly appears is that of an attorney, who was retained on a normal contingent fee agreement, suddenly awakes to the onset of trial and the need for an expert. The attorney also determines that expert require a fee, and sometimes turns to the client, in violation of the contingent fee agreement, and tells the client to pay for the expert.  This is what happened in Palmieri v Biggiani  2013 NY Slip Op 05194 [108 AD3d 604]  July 10, 2013  Appellate Division, Second Department. Instead of paying, the client sued.

    "Contrary to the Supreme Court’s conclusion, the plaintiff stated a cause of action alleging violation of Judiciary Law § 487 (see CPLR 3211 [a] [7]; Judiciary Law § 487; Amalfitano v Rosenberg, 12 NY3d 8, 14 [2009]; Rock City Sound, Inc. v Bashian & Farber, LLP, 74 AD3d at 1172; Boglia v Greenberg, 63 AD3d 973, 975 [2009]; Kempf v Magida, 37 AD3d at 764; Izko Sportswear Co., Inc. v Flaum, 25 AD3d 534, 537 [2006]). The plaintiff alleged in the amended complaint that the defendant’s assertion, made in support of the motion to be relieved as counsel, that the plaintiff "steadfastly refused to pay the litigation expenses," was knowingly false and was offered with the intent to deceive the Supreme Court into believing that the defendant originally had sufficient cause to be relieved as counsel (see Dupree v Voorhees, 102 AD3d 912, 913 [2013]). Thus, the Supreme Court should have denied that branch of the defendant’s motion which was to dismiss the cause of action alleging a violation of Judiciary Law § 487."

Causes of Action for Breach of Fiduciary Duty not dismissed…causes of action for breach of contract not dismissed.  Is this a trend?  Today in Cherry Hill Mkt. Corp. v Cozen O’Connor P.C.
2014 NY Slip Op 04248  Decided on June 12, 2014  appellate Division, First Department we see dismissal of the legal malpractice claim, but reversal on the breach of fiduciary duty claim, which in this case is over excessive fees.

"Plaintiffs’ third cause of action, alleging that defendants breached their fiduciary duty because they either collected and/or billed plaintiffs for excessive and/or unearned fees, should not have been dismissed as duplicative of the malpractice causes of action (see Loria v Cerniglia, 69 AD3d 583, 583 [2d Dept 2010]). The third cause of action was not based upon the same facts underlying the malpractice claims (cf. Cosmetics Plus Group, Ltd. v Traub, 105 AD3d 134, 143 [1st Dept 2013], lv denied 22 NY3d 855 [2013]). With respect to the instant complaint, a claim [*2]of breach of fiduciary duty can be premised on excessive legal fees charged by an attorney (see Sobell v Ansonelli, 98 AD3d 1020, 1022 [2nd Dept 2012] see also Nason v Fisher, 36 AD3d 486, 487 [1st Dept 2007])."

Compare:  "Contrary to the Supreme Court’s determination, however, the plaintiff’s second cause of action, which alleged breach of contract and sought to recover $5,875 in damages, representing the amount he had paid to the defendant, based on, inter alia, overbilling, was not necessarily duplicative of the first cause of action (see O’Connor v Blodnick, Abramowitz & Blodnick, 295 AD2d 586, 587). Moreover, while the court concluded that the plaintiff could seek these damages as a counterclaim in the separate action commenced by the defendant (see Molinoff v Tanenbaum, _____ AD3d _____ [decided herewith]), at the time the order appealed from was issued, that action had been dismissed. "  Tanenbaum v Molinoff  2014 NY Slip Op 04186
Decided on June 11, 2014  Appellate Division, Second Department

In an ironic situation, two highly placed legal malpractice defense firms accuse each-other’s clients of legal malpractice, and seek to apportion blame between their clients in a case where it is clear that one or both of the clients committed legal malpractice.  It’s abundantly clear that service of a notice to individual shareholders did not take place.  The next question is which law firm is to blame.  In Rehberger v Garguilo & Orzechowski, LLP  2014 NY Slip Op 04182Decided on June 11, 2014 the Appellate Division, Second Department holds:

"The plaintiff commenced this action to recover damages arising from legal malpractice allegedly committed by Garguilo & Orzechowski, LLP, and Jerry Garguilo (hereinafter together the Garguilo defendants), while representing him in a declaratory judgment action to enforce the buy-out provision of a stock agreement. The plaintiff alleged, inter alia, that the Garguilo defendants failed to serve a notice required by the stock agreement upon the individual shareholders, which resulted in a judgment dismissing them from the action. The Supreme Court, among other things, denied Jerry Garguilo’s motion for summary judgment dismissing the complaint insofar as asserted against him, and denied that branch of the separate motion of Garguilo & Orzechowski, LLP, which was for summary judgment dismissing the complaint insofar as asserted against it."

"Here, the Garguilo defendants each failed to establish their prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted against each of them. The stock redemption agreement in the underlying action required that notice of redemption be mailed to each of the individual shareholders at the address listed in the agreement. As a result of the Garguilo defendants’ failure to send this notice to the individual shareholders, the individual shareholder defendants were dismissed from the underlying action. The Garguilo defendants’ submissions in support of their respective motions did not establish, prima facie, that the plaintiff will be unable to prove at least one element of his legal malpractice claim and, thus, they failed to demonstrate their entitlement to judgment as a matter of law (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438; Barnave v Davis, 108 AD3d at 583; Affordable Community, Inc. v Simon, 95 AD3d at 1048; cf. Bd. of Mgrs. of Bay Club v Borah, Goldstein, Schwartz, Altschuler & Nahins, P.C., 97 AD3d 612, 613-614; Frederick v Meighan, 75 AD3d at 531-532; Leach v Bailly, 57 AD3d 1286, 1289). Moreover, contrary to the Garguilo defendants’ contention, they failed to demonstrate, prima facie, that the plaintiff’s subsequent counsel, Dollinger, Gonski & Grossman, Esqs., and Matthew Dollinger (hereinafter together the Dollinger third-party defendants), had a sufficient opportunity to fully protect the plaintiff’s rights when it took over the case, as to establish that any alleged negligence on the part of the Garguilo defendants was not a proximate cause of the plaintiff’s damages (cf. Perks v Lauto & Garabedian, 306 AD2d 261; Albin v Pearson, 289 AD2d 272)."

"Furthermore, the Supreme Court properly denied that branch of the motion of Garguilo & Orzechowski, LLP, which was for summary judgment on the third third-party complaint, which alleged causes of action against the Dollinger third-party defendants for contribution and [*3]common-law indemnification. In the third third-party complaint, Garguilo & Orzechowski, LLP, alleged, inter alia, that if the plaintiff is able to establish that Garguilo & Orzechowski, LLP, committed malpractice, then the Dollinger third-party defendants are culpable for essentially the same conduct because they too failed to serve notice on the individual shareholders and to take action against those shareholders to enforce the buy-out provision of the stock agreement. Contrary to the contentions of Garguilo & Orzechowski, LLP, the Supreme Court properly denied that branch of its motion which was for summary judgment on the cause of action for common-law indemnification. Garguilo & Orzechowski, LLP, failed to establish, prima facie, that it was free from negligence or that its negligence was not a proximate cause of the plaintiff’s alleged damages (see Waggoner v Caruso, 14 NY3d 874; Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442; Raquet v Braun, 90 NY2d 177, 183; Barnave v Davis, 108 AD3d 582). "Since the predicate of common-law indemnity is vicarious liability without actual fault on the part of the proposed indemnitee" (Konsky v Escada Hair Salon, Inc., 113 AD3d 656, 658), Garguilo & Orzechowski, LLP, failed to establish its prima facie entitlement to indemnification from the Dollinger third-party defendants. The Supreme Court also properly denied that branch of the motion of Garguilo & Orzechawski, LLP, which was for summary judgment on the cause of the action for contribution, as Garguilo & Orzechawski, LLP, failed to eliminate triable issues of fact as to the relative culpability, if any, of the Dollinger third-party defendants (see Markey v C.F.M.M. Owners Corp., 51 AD3d 734, 738). Accordingly, the Supreme Court properly denied that branch of the motion of Garguilo & Orzechowski, LLP, which was for summary judgment on the third third-party complaint, regardless of the sufficiency of the Dollinger third-party defendants’ opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d at 853)."

Plaintiff sues attorney over fees.  Claim is that attorney failed to try to get client’s wife to pay attorney fees in a custody dispute.  Attorney successfully defends legal malpractice case on the "but for" aspect.  A question of overbilling, however, remains in the case on the theory of breach of contract.

"The plaintiff commenced this action, inter alia, to recover damages for legal malpractice and breach of contract against the defendant, the attorney who represented him in a prior proceeding against his former wife in the Family Court (see Matter of Tanenbaum v Caputo, 81 AD3d 839). The defendant moved pursuant to CPLR 3211(a)(1) and (7) to dismiss the complaint. The Supreme Court granted the motion."

"Here, the defendant established that he was entitled to the dismissal of the first cause of action, which alleged legal malpractice, pursuant to CPLR 3211(a)(1) and (7). Contrary to the plaintiff’s contentions, the complaint in this action, as well as certain documentary evidence before the Supreme Court, including, inter alia, a portion of the settlement agreement between the plaintiff and his former wife, conclusively established as a matter of law that, under the terms of the settlement agreement (see generally Trinagel v Boyar, 99 AD3d 792, 792; Matter of Berns v Halberstam, 46 AD3d 808, 809), the plaintiff was not entitled to an award of an attorney’s fee in the proceeding against his former wife before the Family Court (see Matter of Tanenbaum v Caputo, 81 AD3d 839), and that the defendant therefore did not commit malpractice in failing to obtain an award of an attorney’s fee in that proceeding. Moreover, the retainer agreement between the parties here conclusively refuted any claim based on the plaintiff’s allegation that the defendant assured him that the plaintiff’s former wife would be responsible for the payment of all legal fees in that proceeding. Accordingly, the Supreme Court properly granted that branch of the defendant’s motion which was to dismiss the first cause of action pursuant to CPLR 3211(a)(1) and (7).

Contrary to the Supreme Court’s determination, however, the plaintiff’s second cause of action, which alleged breach of contract and sought to recover $5,875 in damages, representing the amount he had paid to the defendant, based on, inter alia, overbilling, was not necessarily duplicative of the first cause of action (see O’Connor v Blodnick, Abramowitz & Blodnick, 295 AD2d 586, 587). Moreover, while the court concluded that the plaintiff could seek these damages as a counterclaim in the separate action commenced by the defendant (see Molinoff v Tanenbaum, _____ AD3d _____ [decided herewith]), at the time the order appealed from was issued, that action had been dismissed. Accordingly, we modify the order by deleting the provision thereof granting that branch of the defendant’s motion which was to dismiss the second cause of action, which was to recover $5,875 in damages for breach of contract, and substituting therefor a provision denying that branch of the motion."

What are the rules for use of experts, including when they must be revealed, how they must be noticed, and how a CPLR 3101 notice interacts with jury selection dates?  The answer is that no one knows.

Frankel v Vernon & Ginsburg, LLP  2014 NY Slip Op 04136  Decided on June 10, 2014  Appellate Division, First Department  is a prime example.  Plaintiff sends a CPLR 3101 notice that is said to be insufficient.  Supreme Court incorrectly precludes.  The deficiency is cured by a further notice.  This is just before trial

."Supreme Court incorrectly precluded plaintiff’s legal malpractice expert from testifying on the ground that the initial disclosure was insufficiently detailed. Defendants objected to the disclosure’s sufficiency for the first time in their omnibus motion in limine, presented to the court on the day trial was to begin. Any deficiency was cured by plaintiff’s service of a more detailed supplemental disclosure four days later. Moreover, defendants were aware of the substance of the expert’s proposed testimony because plaintiff had previously submitted the expert’s affidavit in opposition to their motion for summary judgment. As Supreme Court found, defendants have not established that they were prejudiced by receipt of the expert disclosures 4 days after the 30-day minimum set by local rule, or that the delay was willful or intentional (see Ramsen A. v New York City Hous. Auth., 112 AD3d 439, 440 [1st Dept 2013])."

"To establish causation in this legal malpractice action, plaintiff must show that his decedent would have prevailed in the underlying action but for the attorney defendants’ negligence (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]). In the underlying action, plaintiff’s decedent asserted causes of action for breach of the warranty of habitability against her cooperative apartment building and for private nuisance against her upstairs neighbors. Accordingly, at trial, to demonstrate the merit of the underlying claim of private nuisance, plaintiff should be permitted to prove, among other things, that his decedent’s neighbors intended to cause the nuisance (see Copart Indus. v Consolidated Edison Co. of N.Y., [*2]41 NY2d 564, 570-571 [1977]). The neighbors’ testimony is relevant to the issue of intent. Therefore, the court improperly precluded that testimony."

A condominium deal gone sour is the genesis of this Judiciary Law 487 case.  This case initially traveled outside the boundaries of typical cases, and was initially heard by a beth din arbitration panel.  Later, it returned to state court and was decided by more conventional means.

Laufer v Skillman Estates, LLC  2014 NY Slip Op 31357(U)  May 23, 2014  Sup Ct, Kings County
Docket Number: 503414/2013  Judge: Ann T. Pfau allows dismissal of the JL 487 claims on res judicata proofs. 

‘Defendants Moshe Junger and Moses Rosner were members of defendant Skillman Estates LLC.  Skillman owned real property in the Williamsburg neighborhood of Brooklyn, and was the sponsor of a proposed condominium project on the ‘property.  Plaintiff Moshe C. Laufer (Laufer) alleges that, on August 17, 2004, he entered into an agreement with Skillman to purchase a 1/12 interest in Skillman’s property (Verified Complaint), and simultaneously Skillman entered into a contract to sell plaintiffs an Interest in condominium units in the building (id, 14).  Laufer complained that  Skillman, Rosner and Junger breached the agreements, and commenced a Beth Din arbitration proceeding, which in time resulted in an award in Laufer’s favor in the amount of $1,551,000 and specific performance, which award was confirmed by this court. "

"The fourth cause of action, which is the only claim directed against defendant Seyfarth Shaw, seeks treble damages under Judiciary Law  487 under the theory that the Forbearance
Agreement was intended to shield Skillman’s assets from Laufer, and also was intended to
deceive the court.."

"Here, the claims alleged in the Verified Complaint against the ECG Defendants arise from the Forbearance Agreement, which was known to plaintiffs before ECG moved for judgment of foreclosure and sale. Plaintiffs were a party to the foreclosure action, and Laufer opposed and cross moved against ECG’s motion for a judgment of foreclosure and sale. There are no facts alleged in the Verified Complaint to explain or justify why the claims against the ECG Defendants are raised now, rather than when the parties litigated the significance of the  vendee’s lien and the Forbearance Agreement in the Foreclosure Action. To the extent that plaintiffs did raise these issues, they were litigated to a final conclusion. Indeed, Laufer argued repeatedly, and without success that his vendee’s lien took precedence."

"Even though the legal theory raised in this proceeding is not identical to that set forth in the mortgage proceeding, the claims against the ECG are barred under the doctrine of res judicata. Moreover, the claims against Seyfarth Shaw and the John Doe attorneys, presumably meant to include Seyfarth Shaw attorneys, are barred under the doctrine of collateral estoppel because they are entirely derivative of the attorneys’ representation of ECG m the prior action, and of its role m presenting the Forbearance Agreement to the court."

Anecdotal evidence suggests that the largest category of attorney-client litigation concerns attorney fees.  Cohen v Hack  2014 NY Slip Op 04068  Decided on June 5, 2014  Appellate Division, First Department is a prime example.  The claim is that the law firm pressured client into changing from a contingent to an hourly fee.  Is this legal malpractice?  No.

"Plaintiff does not assert that defendants’ conduct caused the result of his dispute with his disability insurer to be worse than it would have been. Rather, he argues that defendants, in bad faith and without full disclosure, pressured him into changing from an hourly retainer to a contingency retainer. The

only loss he alleges is the additional fees owed to counsel as a result of changing the retainer. This is fatal to his claim for malpractice (see Warshaw Burstein Cohen Schlesinger & Kuh, LLP v Longmire, 106 AD3d 536 [1st Dept 2013], lv dismissed 21 NY3d 1059 [2013]; see also Sumo Container Sta. v Evans, Orr, Pacelli, Norton & Laffan, 278 AD2d 169, 170-171 [1st Dept 2000]).

The court correctly held that, despite the submission to arbitration in the retainer agreement, arbitration of the contract claim was inappropriate under the circumstances. The retainer agreement provided for arbitration under part 137 of the Rules of the Chief Administrator of the Courts. However, the gravamen of the contract claim is that it is invalid because of defendants’ misconduct in inducing plaintiff to sign it, or because it created a windfall for defendants. By the express terms of the rules the parties chose to govern their arbitration, claims such as this are not arbitrable since 22 NYCRR 137.1(b)(3) provides that part 137 does [*2]not apply to "claims involving substantial legal questions, including professional malpractice or misconduct" (see Mahler v Campagna, 60 AD3d 1009, 1012 [2d Dept 2009])."

It definitely seems so to us.  The original decision is a short-form order, which is not available to state the Court’s reasoning, but the Appellate Division cites Plaintiff’s arrest at the nursing home where he worked which shows he suffered pecuniary loss. 

Fountain v Ferrara  2014 NY Slip Op 03947  Decided on June 3, 2014  Appellate Division, First Department reiterates the point that hearsay is an acceptable method of opposing summary judgment. 

"Plaintiff’s deposition testimony that he was employed by a nursing home in 1998 when he was arrested, together with his bill of particulars, were sufficient to raise a triable issue of fact as to whether he sustained pecuniary losses resulting from the alleged legal malpractice (see D’Agrosa v Newsday, Inc., 158 AD2d 229, 238 [2d Dept 1990]).

Defendants failed to preserve their argument that plaintiff may not rely upon his deposition testimony since such deposition was taken in an action in which they were not parties and were not represented (see Matter of Brodsky v New York City Campaign Fin. Bd., 107 AD3d 544, 545 [1st Dept 2013]). In any event, the argument is unavailing, since defendants’ absence at the time of the deposition merely renders the deposition transcript hearsay as to them (see Rugova v Davis, 112 AD3d 404 [1st Dept 2013]), and "hearsay evidence may be considered to defeat a motion for summary judgment as long as it is not the only evidence submitted in opposition" (O’Halloran v City of New York, 78 AD3d 536, 537 [1st Dept 2010]). Here, plaintiff also submitted his bill of particulars, and "factual allegations contained in a verified bill of particulars . . . may be considered in opposition to a motion for summary judgment" (Johnson v Peconic Diner, 31 AD3d 387, 388 [2d Dept 2006]).

"