Albany:  The Third Department decided the matter of Hyman v Schwartz 2014 NY Slip Op 01362 [114 AD3d 1110] February 27, 2014 Appellate Division, Third Department and found that although a plethora of mistakes could be pled in the complaint, no prima facie case of legal malpractice could be stated.  Why?  The complaint simply could not allege that but for the failures, plaintiff would have been ultimately successful.  This portion of the case is the bete noir for plaintiffs in legal malpractice.  Plaintiff’s trouble at Cornell were independent of the attorney’s work, and the court found them unaffected by it.

"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)."

Defendant attorney is served with a "bare" summons and complaint.  He sends it on to his carrier.He defines a "bare" summons and complaint as one which does not have an index number, filing date or basis of venue.  Carrier appoints a defense attorney who tries to call the plaintiff’s attorney, all to no avail.  Motion for a default judgment is filed, with cross-motion to dismiss.  What happens?

In Golia v Char & Herzberg LLP 2014 NY Slip Op 30985(U) April 14, 2014 Supreme Court, New York County Docket Number: 150349/13  Judge Anil C. Singh refuses to grant either motion.  Here are the salient facts:  "Plaintiff Stacey Golia commenced the instant action by filing a summons
and verified complaint on January 11, 2013. The complaint alleges that the defendants committed legal malpractice by: a) failing to properly notice an appeal  on a judgment that was entered against plaintiff following a trial in Queens County  Supreme Court; and b) mishandling proceedings before referees.

After careful consideration, we find that the defendants’ delay in this matter was not willful. In addition, plaintiff has failed to show any prejudice whatsoever resulting from the brief delay. Under such circumstances, it would clearly be unjust to enter a default judgment.  We turn next to the cross-motion to dismiss the complaint pursuant to CPLR  321 l(a)(l), (7) and (8). Defendants contend that the legal malpractice action should be dismissed because it: a) fails to set forth specific facts demonstrating that the court in the Queens County action decided any issue that would cause reversal in the Appellate Division; and b) the complaint fails to allege that, but for the alleged negligence of the defendants, plaintiff would have prevailed on the appeal.

Plaintiff was represented by defendants in a case brought against her by her grandmother Sylvia Ann Rosenblatt in Queens County. Following a non-jury trial  before a referee, the referee issued a twenty-two page Decision, finding for the  grandmother and denying plaintiffs counterclaims for libel and abuse of process.  At the conclusion of the Decision, the referee directed the plaintiff in that case (Sylvia Ann Rosenblatt) to "Settle Judgment on Notice," and to "Settle Judgment."  Pursuant to the referee’s direction, a judgment was settled on notice between the parties and their counsel. The judgment was signed by the Court on June 29, 2011, and entered on July 22, 2011.
The complaint alleges that the defendants advised plaintiff to appeal the referee’s Decision, which she agreed to do. However, defendants failed to advise the plaintiff that an appeal should have been filed from the judgment, and that it is settled law that no appeal may be taken from a Decision. The complaint alleges further that defendants improperly filed a Notice of Appeal with the Appellate Division from the referee’s Decision, but not the judgment. According to the complaint, there were numerous meritorious issues raised by defendants on appeal from the referee’s Decision, and if these issues had been properly raised on an appeal of the judgment, it is probable that such an appeal would have been successful. Subsequently, the Second Department, on its own motion, issued a decision and order, directing that the appeal be dismissed "on the ground that no appeal lies from a decision."
Finally, the complaint alleges that defendants’ failure to pursue an appeal of the judgment, as well as their negligent handling of proceedings before two referees, constituted legal malpractice; that such malpractice caused financial damages; and that "but for" such malpractice, "it likely, and indeed probable, that plaintiff would have succeeded on her appeal of the judgment."

"Viewing the allegations in the light most favorable to plaintiff, as we must at this early stage of the litigation, the Court finds that the complaint sufficiently states a cause of action for legal  malpractice."

Judiciary Law 487 is a deceit statute.  It reads:  " § 487. Misconduct by attorneys. An attorney or counselor who:
1. Is guilty of any deceit or collusion, or consents to any deceit or
collusion, with intent to deceive the court or any party; or,
2. Wilfully delays his client’s suit with a view to his own gain; or,
wilfully receives any money or allowance for or on account of any money
which he has not laid out, or becomes answerable for,
Is guilty of a misdemeanor, and in addition to the punishment
prescribed therefor by the penal law, he forfeits to the party injured
treble damages, to be recovered in a civil action.

Can overzealous and intimidating behavior constitute a violation of Judiciary Law 487 when it happens during settlement discussions?  Not in Wailes v Tel Networks USA, LLC  2014 NY Slip Op 02861 Decided on April 24, 2014 Appellate Division, First Department.

"The allegations of Snyder’s conduct in his representation of defendant Tel Networks USA, LLC during settlement discussions with plaintiff, which plaintiff characterizes as "overzealous and intimidating," do not state a cause of action under Judiciary Law § 487. The complaint alleges neither an intent to deceive nor "a chronic and extreme pattern of legal delinquency" that caused plaintiff a loss (Kaminsky v Herrick, Feinstein LLP, 59 AD3d 1, 13 [1st Dept 2008] [internal quotation marks omitted], lv denied 12 NY3d 715 [2009]; Nason v Fisher, 36 AD3d 486, 487 [1st Dept 2007]). Moreover, the only allegations of wrongdoing refer to a settlement discussion had after Tel Networks commenced a legal proceeding, and that communication is absolutely privileged (see Wiener v Weintraub, 22 NY2d 330 [1968]; Mosesson v Jacob D. Fuchsberg Law Firm, 257 AD2d 381, 382 [1st Dept 1999], lv denied 93 NY2d 808 [1999])."

When you start reading Blanco v Polanco  2014 NY Slip Op 02735  Decided on April 23, 2014  Appellate Division, Second Department it seems to be a simple case.  Buyers purchase a house, and don’t do an inspection.  They get a punch list, and then discover that the upstairs apartment does not have a Certificate of Occupancy.  Whose fault is it?  After reading that the AD gives out some more facts, in the manner of a well told story.

"In September 2008, the plaintiffs, Karyll Blanco and Suamy Blanco, Jr. (hereinafter together the buyers), purchased a two-family home from the defendant Your First Home, LLC (hereinafter the seller). At the closing, the seller agreed to make certain repairs set forth on a punch list within 10 business days. Shortly after the closing, the buyers took occupancy of the premises.

According to the buyers, the seller never completed the punch list. Further, according to the buyers, after they moved into the premises, they discovered mold in various areas and found that water accumulated in the basement whenever it rained. Additionally, the buyers allege that when they tried to rent the apartment on the second floor of the house, they were informed that they could not do so because the house did not have a certificate of occupancy (hereinafter CO), and later learned that there were numerous "outstanding requirements" that needed to be satisfied before one could be obtained.

The buyers commenced this action against, among others, the seller and the attorney [*2]who represented the buyers in the transaction, the defendant Jose Polanco (hereinafter the appellant), alleging that they, and the other defendants in the action, colluded to defraud them in connection with the purchase of the premises by, inter alia, dissuading them from obtaining an inspection, representing that any repairs and construction required on the premises would be performed and paid for by the seller before or immediately after the closing, misrepresenting the condition of the premises, and misrepresenting that the apartment on the second floor could be rented immediately upon closing and that the premises had a CO. The buyers sought to recover damages from the appellant for, inter alia, legal malpractice, fraud, breach of fiduciary duty, negligence, unjust enrichment, and conspiracy to commit fraud.’

"The appellant established his prima facie entitlement to judgment as a matter of law dismissing so much of the third cause of action as sought to recover damages for legal malpractice. However, in opposition to the appellant’s prima facie showing, the buyers raised a triable issue of fact. The buyers submitted evidence that the appellant had his nonattorney assistant pose as him and counsel the buyers throughout the transaction. The buyers also supplied proof that the appellant hastened them to sign the contract of sale without reading it and failed to advise them that by signing the contract, they were agreeing to purchase the premises "as is" and waiving their opportunity to conduct an inspection. The buyers also presented proof that, at the same time, the appellant reassured them that the seller would make needed repairs and advised them that they should trust the seller’s opinion that a professional inspection was not necessary. Additionally, the buyers presented proof that the appellant failed to ask the seller to fulfill its obligation under the contract of sale to provide a CO or "a letter from the building department . . . to the effect that no CO is required. "

"In response, the buyers raised triable issues of fact by submitting their own affidavits, wherein they stated that the appellant made the above-mentioned misrepresentations. Further, the buyers submitted a report from the New York City Department of Buildings indicating that subsequent alterations may have been made to the premises, triggering the need for a CO and that various "outstanding requirements" needed to be satisfied before a CO could be obtained. Moreover, the buyers presented evidence that while they intended for their relative to live in the apartment, the relative paid rent and they purchased the premises relying on the rental income from the apartment to pay their mortgage."

"In opposition to the appellant’s prima facie showing, the buyers submitted evidence showing that the appellant had a relationship with the seller, pursuant to which he received over 100 referrals from the seller. Additionally, the buyers submitted evidence that when they were in the seller’s office, they were introduced to a nonattorney imposter posing as the appellant who told them that he was the appellant. The buyers also submitted evidence that while in the seller’s office, one of the seller’s employees told them that they did not need to get an inspection. The buyers also submitted evidence that the imposter told them to heed the seller’s opinion in this regard and advised them to sign a contract of sale without obtaining an inspection. When viewed as a whole, it may be inferred from this evidence that the appellant and the seller may have colluded to defraud the buyers in connection with the purchase of the premises."

SS Marks LLC v Morrison Cohen LLP  2014 NY Slip Op 31030(U)  April 16, 2014  Sup Ct, New York County  Docket Number: 650049/2009 Judge: O. Peter Sherwood is an example of how a likely sounding legal malpractice case can be lost on a series of e-mails.  Here, plaintiff’s plausible claims are completely undone by e-mails which unseat him.

"Beginning in February 2005, Marks began working with non-party Peter Morris to obtain  financing for real estate transactions. In December 2005, Morris informed Marks about a potential investment in real property located in Stanfordville, NY known as the Roseland Ranch (the  Property"). Originally, the parities contemplated a consulting agreement where Marks would be paid  fees for his services. The proposed transaction involved acquisition of the Property and its
subsequent operation as a dude-ranch style hotel, with the possibility of developing single family
homes on a portion of the land. Brett Marks was also to invest in the transaction. Eventually it was
proposed that the Marks invest, through SAM.  SSM agreed to invest $1,050,000 toward purchase of the Property. In exchange, SSM was  to receive an 89% ownership interest in the Property as tenant in common with Roseland Ranch  Holdings, LLC ("RR Holdings"). Once acquired, the Property would be managed by Roseland Ranch  Management, LLC (the "Manager”).
The parties entered into a Lease and Management Agreement (the ”Lease") in connect.ion with the transaction. The Lease had a two year initial term, with automatic renewals, unless one party chose to terminate. Under the terms of the Lease, SSM was entitled to receive monthly payments of$ I 0,500 from the manager. Upon termination of the Lease, SSM was entitled to a return of its investment in the form of a ”termination payment" in the sum of $ I ,050,000.

On March 2, 2006, the Lenders demanded that a subordination clause be included in the 
Lease. The effect of the subordination clause was that SSM would not receive the termination
payment until after the Lenders were repaid. According to Marks, this clause was inserted without
his knowledge or consent after he had already executed the agreement. Marks also claims that
Soleymani did not explain the effect of the subordination clause on the personal guarantees.
It is undisputed that Soleymani forwarded the Lenders’ demand to Marks within half an hour
of receipt (Rule 19-a Stmt 45 and Furman Aff, Ex V.). Two hours later, a draft of the Lease containing the subordination provision was emailed to Marks (id, Ex Y). Marks denies having read
the emails (Response to Rule 19-a Stmt ,45, 46). However an email exchanged on March 2, 2006 at 12:38 PM shows that Marks was aware of the subordination provision, understood it .and sought to negotiate changes (Furman Aff, Ex U ["We still need to discuss the lender’s requested revisions .. , Sandy wants to discuss , .. "]).

Admissible proof in the record, shows that Marks was advised of the subordination clause and of the unsigned guaranties prior to the closing. Marks’s excuse for not having read his emails
even if credited, is insufficient to create a triable fact as to legal malpractice. Dismissal of a
malpractice claim is appropriate when, as here, it is "inconceivable that plaintiff’s principal was
unaware of’ that of which defendant allegedly failed to advise him (see Delphi Easter Partners Ltd.
Partnership v Prickett, Jones, Elliott, Kristo! & Schnee, 224 AD2d 349 [1st Dept 1996]). The documents SSM points to in support of its contention that the personal guarantees were critical to the transaction do not support the assertion. ln an email Marks sent to Soleymani on January 19, 2006, he insists that the consulting agreement must ensure that the other investors ”cannot in any way get out of paying that money to me" and that "’in the event they don’t pay that the interest in the hotel is then pledged (100% to me)" (Marks Aff, Ex 1 ). The document does not reference guaranties. Instead it refers to a consulting fee Marks wanted, prior to the agreement to invest in the Property. In any case, the other investors did in fact receive an interest junior to SSM.
The "interest in the hotel" Vas indeed pledged to Marks. A guaranty goes far beyond an "interest in
the hotel." lfarks also sent an email on January 20, 2006 where he stated that the consulting
agreement is "the important agreement I have to make sure they pay me no matter what happens"
(Marks Aff, Ex 2). Again the email refers to a consulting agreement. It makes no mention of a
guaranty.

Accordingly, it is hereby ORDERED that defendants’ motion for summary judgment dismissing the complaint is GRANTED in its entirety

Attorney is hired to defend a case. What is the standard of care if the case is "unwinnable"? Justice Jaffe of Supreme Court, New York County discusses what happens when a franchisee who has signed personal guarantees falls behind in royalty payments to the franchisor.  It’s not pretty.

In Pu v Mitsopoulos  2014 NY Slip Op 31038(U)  April 17, 2014  Sup Ct, New York County  Docket Number: 602986/06  Judge: Barbara Jaffe the facts are:  "In December 2004, defendant George Mitsopoulos contacted plaintiff, an attorney, to  discuss an ongoing dispute between him and his company, defendant Titan Pharmaceuticals and  Nutrition, Inc., in connection with a franchise agreement with franchisor Medicine Shoppe, Inc. The franchise agreement permitted Mitsopoulos to operate a pharmacy under franchisor’s name and required him to pay royalties based on the pharmacy’s gross income. The parties also agreed  that any disputes would be arbitrated and that franchisor was entitled to attorney fees in the event  of litigation. When Mitsopoulos first met with plaintiff, he told him that Titan was behind in paying franchisor and that on December 1, 2004, franchisor sued him, his parents, and Titan in federal court. Franchisor also commenced an arbitration proceeding in St. Louis, Missouri against Titan and Mitsopoulos. (Id, Exhs. I, J).
On or about December 15, 2004, Mitsopoulous, his parents, and Titan retained plaintiff,
and agreed to pay him $275 an hour, plus expenses. They also agreed that if plaintiff sued them
to recover his legal fees, they would compensate him for any fees incurred in connection thereof. "

"As plaintiff has submitted the parties’ retainer agreement along with an affidavit detailing the work he performed and his itemized bills, he has established, prima facie, his entitlement to the attorney fees and expenses he seeks. (See eg Phillips Nizer et al. v Chu, 240 AD2d 231 [1st Dept 1997] [reasonable value of attorneys’ services itemized in invoices annexed to complaint]).
Apart from the malpractice counterclaims, defendants advance the following arguments for why plaintiff is not entitled to some of his fees: (1) plaintiff billed defendants for services rendered during his suspension from practicing law in the federal courts; and (2) plaintiff billed for unnecessary and wasteful motions. (Mem. of Law, dated Oct. 2, 2013).

As defendants raise a triable issue as to whether plaintiff performed unnecessary work on the case or overbilled them for work he should not have performed, the reasonableness of plaintiffs fees must be determined at a hearing. (See eg Bomba v Silberfein, 238 AD2d 261 [1st Dept 1997] [factual issue as to reasonableness of attorney’s fees precluded summary judgment as to damages]"

"Although it is not disputed that defendants had no viable defense to the arbitration as they owed franchisor money past due and possible larger sums, and that franchisor had every right to
enforce the parents’ guaranty, there is no allegation that plaintiff recommended that defendants
litigate knowing that he could not prevail, leaving them owing franchisor damages as well as
additional legal fees. Rather, plaintiff was faced with defending two actions against defendants
with no viable defense to either, and having to choose a strategy whereby he could minimize
defendants’ losses. That plaintiff was unable to win a conceitedly unwinnable case does not
establish that he was negligent. "

Was it strategy or mistake?  Was the Warning given or not?  Was the Attorney negligent or did he do a good job?  These are the questions that are daily raised in legal malpractice cases.  Sometimes, as in Mateo v Silver & Silver, LLP  2014 NY Slip Op 30986(U)  April 15, 2014
Supreme Court, New York County  Docket Number: 150393/10  Judge: Anil C. Singh, a simple letter would have resolved all doubt.

Client says that attorney was hired to vet and do due diligence on a loan, lease and real estate arrangement.  Attorney says he was hired to do the paperwork, but not to advise the client about the landlord’s mortgage.  Both experts agree that something should have been said to the client.  We believe that if there had been a letter warning the client there would have been a dismissal here.

"Defendant Herbert Silver asserts that he was retained by plaintiffs to draft promissory notes. He contends that he did not have a duty to assess the adequacy of the security being offered for the loans given by plaintiffs to Peter Skyllas, and that he cannot be held liable for the failure of that security. According to Mr. Silver, plaintiff Fernando Mateo did not ask him to conduct the "due diligence" which he faults him for not having performed.

In opposition to the motion, plaintiff Fernando Mateo contends in a sworn affidavit that he asked Silver to vet the loan transactions and to assist in structuring  the deal. Further, he asserts that plaintiffs specifically retained the Silver defendants  "to vet and review the May lease, and advise us of any problems." Mateo asserts that,  at the time the lease was executed, Silver did not advise plaintiffs that there was an  outstanding mortgage on the Skyllas building; how that mortgage might impact  to plaintiffs’ business; what might happen if the landlord defaulted on his mortgage; or
what might happen if the landlord’s lender decided to foreclose on the property.  Further, Mateo contends that Silver did not propose any safeguards that Alma might  be able to take to secure its leasehold interest in the Skyllas building against the risk  of foreclosure; and failed to advise plaintiffs of the potential legal benefits and  consequences of recording the lease against the Skyllas building. Finally, Mateo  states that he would have found another space for his restaurant, or pursued an  entirely different business venture, had he known about the risks posed by the
mortgage. "

"Both parties rely upon the opinions of experts. Although the experts appear to agree that a reasonably prudent attorney reviewing a commercial lease transaction has  a duty to warn his client of the potential negative consequences if the attorney fails to obtain a non-disturbance agreement for the lease, they disagree about the nature of the warning the attorney should give to the client. Silver’s expert contends that a simple explanation of the consequences to the client entering an unprotected lease is sufficient. By contrast, Mateo’s expert contends that a diligent attorney should advise his client not to enter into the lease and, if necessary, should put such advice in writing. "

"In light of the completely divergent facts presented by the parties and the conflicting opinions of the experts, the Court finds that there is clearly a genuine issue of material fact regarding the extent and adequacy of the legal advice, services, and representation provided by defendants. The Court is mindful that, on a motion for summary judgment, the function of the Court is issue finding, not issue determination. "

We believe that a greater proportion of legal malpractice cases are subject to motions for summary judgment, and that more decisions to dismiss are granted than in other specialties.  In Kempf v Magida  2014 NY Slip Op 02410  Decided on April 9, 2014  Appellate Division, Second Department the merely unusual happened.  Summary judgment was denied because defendant did not show prima facie entitlement.

"contrary to the defendant’s contention, he failed to present evidence in admissible form establishing that the plaintiffs were unable to prove at least one of the essential elements of a cause of action to recover damages for legal malpractice (see Barnave v Davis, 108 AD3d 582; Valley Ventures, LLC v Joseph J. Haspel, PLLC, 102 AD3d 955, 956; Alizio v Feldman, 82 AD3d 804). The defendant failed to affirmatively demonstrate the merits of his defense, and he could not sustain his burden merely by pointing out gaps in the plaintiffs’ proof (see Alizio v Feldman, 82 AD3d at 804). Since the defendant did not eliminate all triable issues of fact as to whether he failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and whether his alleged breach of this duty proximately caused the plaintiffs to sustain actual and ascertainable damages (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442; Barnave v Davis, 108 AD3d at 582-583; Valley Ventures, LLC v Joseph J. Haspel, PLLC, 102 AD3d at 956; Alizio v Feldman, 82 AD3d at 804), he failed to sustain his prima facie burden on the motion, and his motion for summary judgment dismissing the complaint was properly denied. "