It is very very rare, but here is a case in ""the narrow exception of fraud, collusion, malicious acts or other special circumstances" under which a cause of action alleging attorney malpractice may be asserted absent a showing of privity (Ginsburg Dev. Cos., LLC v Carbone, 85 AD3d 1110, 1112 [2011]" 

Mr. San, LLC v Zucker & Kwestel, LLP  2013 NY Slip Op 08416 [112 AD3d 796]  December 18, 2013  Appellate Division, Second Department]  was not dismissed on CPLR 3211 grounds. 

"On a motion to dismiss pursuant to CPLR 3211 (a) (1), "dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law" (Leon v Martinez, 84 NY2d 83, 88 [1994]). In deciding a motion to dismiss pursuant to CPLR 3211 (a) (7), the court must "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d at 87-88).

Applying these principles, the Supreme Court properly denied those branches of the defendants’ motion which were pursuant to CPLR 3211 (a) (1) and (7) to dismiss the first cause of action, which sought to recover damages for legal malpractice. While the complaint does not allege an attorney-client relationship between the plaintiffs and the defendants, it sets forth a claim which falls within "the narrow exception of fraud, collusion, malicious acts or other special circumstances" under which a cause of action alleging attorney malpractice may be asserted absent a showing of privity (Ginsburg Dev. Cos., LLC v Carbone, 85 AD3d 1110, 1112 [2011] [internal quotation marks omitted]; see Aranki v Goldman & Assoc., LLP, 34 AD3d 510, 511-512 [2006]; Griffith v Medical Quadrangle, 5 AD3d 151, 152 [2004]). Furthermore, the documentary evidence submitted by the defendants does not conclusively establish a defense to this cause of action as a matter of law (see CPLR 3211 [a] [1]).

"

ALBANY:   Loss of freedom for a tort plaintiff occasioned by the extension of his probation arising from a criminal arrest and the resulting emotional and psychological harm are compensible.  Same thing for a legal malpractice plaintiff?  Not compensible.  Dombrowski v Bulson
[19 NY3d 347]   May 31, 2012  Lippman, Ch. J.  Court of Appeals.
 

Landon v Kroll Lab. Specialists, Inc.  2013 NY Slip Op 06597 [22 NY3d 1]  October 10, 2013
Lippman, J.  Court of Appeals  tells us that in a "regular" tort situation, even in a "contract" situation, there may be liability. "Although the existence of a contractual relationship by itself generally is not a source of tort liability to third parties, we have recognized that there are certain circumstances where a duty of care is assumed to certain individuals outside the contract (see Espinal v Melville [*4]Snow Contrs., 98 NY2d 136, 138-139 [2002]). As relevant here, such a duty may arise "where the contracting party, in failing to exercise reasonable care in the performance of [its] duties, launched[s] a force or instrument of harm" (Espinal, 98 NY2d at 140 [internal quotation marks and citation omitted]). This principle recognizes that the duty to avoid harm to others is distinct from the contractual duty of performance. Accepting the allegations of the complaint as true, Kroll did not exercise reasonable care in the testing of plaintiff’s biological sample when it failed to adhere to professionally accepted testing standards and, consequently, released a report finding that plaintiff had tested positive for THC. The alleged harm to plaintiff was not remote or attenuated. Indeed, it was his own biological specimen that was the sole subject of this testing and he was directly harmed by the positive test result causing the extension of his probation and the necessity of having to defend himself in the attendant court proceedings."

In a legal malpractice situation, the rules are 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."

Rochester:   The course of litigation can be twisted, and early decisions often cause later havoc.  Such is the case in this 4th Department case.  Wright v Shapiro  2012 NY Slip Op 08964 [101 AD3d 1682]  December 21, 2012  Appellate Division, Fourth Department  tells us that plaintiff lost one position after another, ending with a complete dismissal of the case.

"It is hereby ordered that the order insofar as appealed from is unanimously reversed on the law without costs, the motion of defendants James J. Shapiro and James J. Shapiro, P.A. is granted, and the second amended complaint is dismissed against those defendants.

Memorandum: James J. Shapiro and James J. Shapiro, P.A. (defendants) appeal from an order denying their motion for summary judgment dismissing the second amended complaint against them and granting plaintiff’s cross motion to compel the deposition of James Shapiro. We note at the outset that, although defendants’ notice of appeal is from the order in its entirety, they do not address plaintiff’s cross motion in their brief and thus, as limited by their brief, are deemed to have appealed only from the denial of their motion. We further note that the appeal taken by defendant Chikovsky & Associates, P.A. has been deemed abandoned and dismissed by its failure to perfect the appeal in a timely fashion (see 22 NYCRR 1000.12 [b]).

We agree with defendants that Supreme Court erred in denying their motion. By establishing that plaintiff could not have prevailed in his underlying personal injury action, defendants met their initial burden of establishing their entitlement to summary judgment with respect to the first cause of action against them, for legal malpractice (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]), and plaintiff failed to raise a triable issue of fact (see generally Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). We note that the court erred in concluding, based on our decision in Wright v Shapiro (16 AD3d 1042 [2005]), that the doctrine of law of the case precluded summary judgment following discovery. Furthermore, plaintiff’s theory of liability premised on respondeat superior is barred by his discontinuation of that action on the merits against the employee, thus eliminating the triable issue of fact we discussed in our subsequent decision in Wright v Shapiro (35 AD3d 1253 [2006]). Therefore, the court should have [*2]granted defendants’ motion with respect to the first cause of action in that regard (see Town of Angelica v Smith, 89 AD3d 1547, 1549-1550 [2011]).

Inasmuch as the second cause of action is premised upon the legal malpractice cause of action, which we are hereby dismissing against defendants, we further conclude that the court erred in denying defendants’ motion with respect to the second cause of action against them. Present—Smith, J.P., Peradotto, Lindley, Valentino and Whalen, JJ.

"

Seller of real estate has a building with a 50 year lease ending.  Chase Bank has the lease, and long ago subleased the property for a profit.  Buyer says that he never saw the leases, and that $3750 per month is just not enough to run the building.

Attorney admits that he was sellers’ attorney, buyer’s attorney and the broker in the deal.  Palmieri v Mattimore   2014 NY Slip Op 30300(U)   January 16, 2014   Sup Ct, Suffolk County  Docket Number: 20155/2008  Judge: William B. Rebolini is a description of behavior which cannot but lead to problems.

"The plaintiff Mario Palmieri alleges that he was approached by the defendant with regard to a potential purchase oft e subject property. The defendant had represented Mr. Palmieri and other  family members in real state, zoning, and other legal matters for a period of about 15 years. The original asking price for the property was $900,000.00 but after negotiation the price agreed upon was $700,000,00. Acco ding to the documentary evidence, the property was subject to a 50-year lease held by JP Morgan Chase Bank ("Chase"), which was set to expire in 2011. Under the lease,
Chase paid a total of $3,750 a year in rent. At the time of the sale, Chase no longer occupied the
subject property and ha subleased each of the buildings thereon. One was leased to the State of New York for a monthly rent of $5,665.00. The other building was subleased to the Consulate of El Salvador for a monthly. rent of $4,025.00. Mr. Palmieri testified that the defendant did not inform him that he would only be receiving the rent under the main lease until that lease expired in 2011,
and he testified that the defendant told him several times that he would be receiving $9,500.00 in rent each month. He further claimed that he never saw the lease documents until after the closing and that the leases were not attached to the contract that he signed. Upon discovering that he could receive only $312.00 per month ($3,750.00 for the year) in rent from the property, he was outraged. 

He testified that he called the defendant, who apologized and said he made a mistake. He states in his affidavit that if he ha known the lack of rental income from the property, he would have opted
not to buy it.

The defendant denied at his examination before trial that he failed to disclose the rental  income that Palmieri Realty LLC would receive under the Chase lease until it expired in 2011. He  admitted, however, that he had acted as the seller’s attorney and the broker on the transaction and
that he had received fees from both activities. It is also clear from his testimony that he also  represented the plaintiffs and was also paid a legal fee by them for his work. The defendant also
submitted a real estate a appraisal of the subject property from John Grossman, a qualified ppraiser."

Motion for summary judgment denied as to the LLC.

Litigants get together to buy a restaurant.  Problems arise, and a legal malpractice action is commenced. The proceeds over which the litigants argue arose from a legal malpractice case.  The attorney successfully sued had failed to tell his clients that the attorney’s friend owned the property next door to a restaurant the clients were buying, and that the attorney’s friend was encroaching on their soon-to-be-purchased restaurant.  Things went downhill between the litigants after succeeding on the legal malpractice case.

Buscaglia v Schreck  2014 NY Slip Op 31582(U)  June 10, 2014  Sup Ct, Suffolk County  Docket Number: 26922-11  Judge: Elizabeth H. Emerson should be read for the Court’s interpretation of what seemed to be a complete and total general release.

"The complaint alleges in the first cause of action that the plaintiff paid approximately  $197,000 to Mr. Barr during the course of the litigation, while the defendant only paid Mr. Barr  $20,000. The complaint also alleges that the parties were unable to pay the mortgage on the  premises due to the necessity of paying attorney fees in the legal malpractice action, thereby causing the premises to go into foreclosure. The first cause of action seeks reimbursement of one-half of the expenses paid by the plaintiff. The complaint alleges in the second cause of action that, the during the pendency of the litigation, the plaintiff paid property insurance and  expert witness fees and seeks reimbursement of one-half of those expenses. The complaint alleges in the third cause of action that the defendant wrongfully took various assets of the partnership, including heating oil, from the premises and cashed insurance checks payable to both parties. The complaint further alleges that the plaintiff also paid an attorney to represent the parties to resolve the foreclosure action on the premises and seeks reimbursement of one-half the expenses and assets taken by the defendant. The defendant interposed an answer and asserted a general denial, several affirmative defenses and a counter claim seeking "in excess of $50,000," for the plaintiffs refusal to lease the premises during the litigation.

With regard to defendant’s first contention that the complaint must be dismissed pursuant to CPLR 3 211 (a) ( 1 ), where a defendant moves to dismiss an action asserting the existence of a def ensc founded upon documentary evidence, the documentary evidence "must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiffs claim" (Trade Source, Inc. v Westchester Wood Works, Inc., 290 AD2d 437; Berger v Temple Beth-El of Great Neck, 303 AD2d 346). The defendant contends that the Settlement Agreement and General Release dated April 26, 2011, represents that the parties released all claims that they had against each other. The defendant relies upon Paragraph 4 of the Settlement Agreement and General Release, which states: the plaintiff, the defendant, and Mr. Barr "hereby mutually release each other * * * from any and all claims * * * and liabilities of any kind whatsoever * * *."

”In construing a general release it is appropriate to look to the controversy being settled and the purpose for which the release was executed[,] … [and] a release may not be read to cover matter which the parties did not desire or intend to dispose of’ (Bugel v WPS Niagara Properties, Inc., 19 AD3d 1081, 1082; see also Wechsler v Diamond Sugar Co., 29 AD3d 681, 682). It is also well settled that "releases are contracts that, unless their language is ambiguous, must be interpreted to give effect to the intent of the parties as indicated by the language employed" (Rubycz-Boyar v Mondragon, 15 AD3d 811, 812).

The court cannot determine from Paragraph 4 of the Settlement Agreement and General Release whether the parties intended to release each other from all disputes that were related to the partnership or whether the subject document relates only to the claims in the litigation against Mr. Nitka. Therefore, the branch of the motion seeking dismissal on the ground of documentary evidence is denied. "

A large number of legal malpractice cases are dismissed at the beginning on CPLR 3211 motions.  We believe that legal malpractice cases are overrepresented in these dismissals.  Endless Ocean, LLC v Twomey, Latham, Shea, Kelley, Dubin & Quartararo    2014 NY Slip Op 00087 [113 AD3d 587]   January 8, 2014   Appellate Division, Second Department  is an example of this phenomenon, as well as an illustration of the dangers of a 1031 Like-kind exchange of real property intended to avoid capital gains taxation.

"The plaintiff commenced this action to recover damages allegedly sustained as a result of the defendants’ legal malpractice. As alleged in the complaint, the plaintiff retained the defendants to represent it in connection with the sale of certain real property and a related exchange of "like-kind property" pursuant to the Internal Revenue Code (see 26 USC § 1031). According to the allegations in the complaint, the plaintiff, based upon the defendants’ advice, selected LandAmerica 1031 Exchange Services, Inc. (hereinafter LandAmerica), as the qualified intermediary to hold a portion of the sale proceeds, totaling $5.5 million, for the exchange of like-kind property pursuant to 26 USC § 1031. The complaint alleged, inter alia, that the defendants negligently represented the plaintiff inasmuch as they reviewed, and advised the plaintiff to execute, an agreement with LandAmerica, under which the exchange funds were to be held in a commingled [*2]account and not a qualified escrow account or trust. Soon after the sale proceeds were transferred to LandAmerica, its parent corporation, LandAmerica Financial Group, Inc., declared bankruptcy. According to the complaint, the plaintiff’s funds were frozen for several years during the bankruptcy proceedings, and the plaintiff lost a portion of the funds because they were not held in a qualified escrow account or trust. The complaint further alleged that the plaintiff could not defer the taxes on the capital gains from the initial sale, as it did not have access to its funds to purchase a replacement property within the required 180-day period."

"The Supreme Court improperly granted the defendants’ motion to dismiss the complaint based on documentary evidence. A motion to dismiss a complaint pursuant to CPLR 3211 (a) (1) may be granted only if the documentary evidence submitted by the moving party utterly refutes the factual allegations of the complaint, "conclusively establishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]). Here, the retainer agreement submitted by the defendants did not conclusively establish a defense as a matter of law (see Harris v Barbera, 96 AD3d 904, 905-906 [2012]; Rietschel v Maimonides Med. Ctr., 83 AD3d 810, 811 [2011]; Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34, 38-39 [2006])."

"The documents submitted by the defendants on appeal, which were annexed to their brief, are not properly before this Court, as they were not submitted to the Supreme Court (see CPLR 5526; Constantine v Premier Cab Corp., 295 AD2d 303, 304 [2002]). Moreover, the defendants’ arguments that relied upon these documents were improperly raised for the first time on appeal (see Salierno v City of Mount Vernon, 107 AD3d 971, 972 [2013])."

Red Zone LLC v Cadwalader, Wickersham & Taft LLP    2014 NY Slip Op 04570     Decided on June 19, 2014   Appellate Division, First Department is the latest wow legal malpractice case, since it ended in a $ 17.2 million award, and is sure to be the largest Legal Malpractice award of the year.  Yesterday we discussed the interesting continuous representation issues.  Today, the expert issue.  When is an expert needed?  Would you have used one in a case this large?  None was needed here!

"Plaintiff commenced this action for legal malpractice against defendant law firm based on the alleged negligent drafting of an agreement (Side Agreement) that was intended to memorialize an oral agreement between plaintiff and nonparty UBS Securities LLC (UBS) to cap at $2 million the amount of fees UBS was to receive for acting as plaintiff’s exclusive financial advisor in its effort to acquire control of nonparty Six Flags, Inc., unless plaintiff acquired more than 51% of the voting shares of Six Flags. Prior to the instant lawsuit, UBS successfully sued plaintiff for $10 million in fees in connection with the Six Flags transaction. In the course of that lawsuit, we rejected plaintiff’s argument that the Side Agreement, read in tandem with the main agreement (Engagement Agreement), capped UBS’s fee at $2 million (UBS Sec. LLC v Red Zone LLC, 77 AD3d 575 [1st Dept 2010], lv denied 17 NY3d 706 [2011]) (UBS Decision).

Plaintiff’s motion for summary judgment on its legal malpractice claim was also properly granted. Notably, defendant does not dispute that the Side Agreement was intended to cap UBS’s fees at $2 million. Given our prior finding in the UBS litigation that the Side Agreement failed to do just that (UBS Sec. LLC, 77 AD3d 575), summary judgment is warranted. Accordingly, no expert opinion evidence was necessary before granting the motion (see Northrop v Thorsen, 46 AD3d 780, 782 [2d Dept 2007]). There are no triable issues as to whether defendant, as opposed to plaintiff or its trial counsel in the UBS litigation, caused plaintiff’s injuries. But for defendant’s drafting of the Side Agreement, UBS would not have prevailed in its lawsuit seeking $10 million (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007])."

Claims are often made for multi-million dollar losses, and often they amount to a dream.  Here, in Red Zone LLC v Cadwalader, Wickersham & Taft LLP  2014 NY Slip Op 04570  Decided on June 19, 2014  Appellate Division, First Department  the case ends in a verdict for $ 17.2 million.

Of note is the AD’s take on continuous representation, with a 2 year gap.  "The motion court properly concluded that the continuous representation doctrine applies to toll the statute of limitations on plaintiff’s legal malpractice claim. Although defendant drafted the Side Agreement in 2005, it provided legal advice throughout the UBS litigation from 2007 through late 2010. Although plaintiff was represented by other counsel in the UBS litigation, plaintiff and its trial counsel continued to confer with defendant and share privileged documents regarding its defense strategy. In doing so, defendant apparently sought to rectify its earlier alleged malpractice, namely to prevent UBS from demanding more than $2 million when the Side Agreement was intended to limit UBS’s fee. In such cases, the continuous representation doctrine applies (see Luk Lamellen U. Kupplungbau GmbH v Lerner, 166 AD2d 505, 506-507 [2d Dept 1990]; N & S Supply v Simmons, 305 AD2d 648, 649-650 [2d Dept 2003]). There is no basis to find that the earlier "gap" in representation from roughly 2005 to 2007 ended defendant’s prior representation. There was simply no need to consult defendant during that time, and defendant never communicated to plaintiff that its prior representation had ended (see Shumsky v Eisenstein, 96 NY2d 164, 170-171 [2001])."