Buffalo and Rochester:  When Plaintiff settles the underlying action, or fails to take an appeal on a dismissal, may he still commence a legal malpractice case?  In Grace v Law  2013 NY Slip Op 05383 [108 AD3d 1173]  July 19, 2013  Appellate Division, Fourth Department

"We reject defendants’ invitation to extend the ruling in Rupert to a per se rule that a party who voluntarily discontinues an underlying action and forgoes an appeal thereby abandons his or her right to pursue a claim for legal malpractice. Indeed, we noted in Rupert that, in determining that the court erred in granting the defendants’ cross motion for summary judgment dismissing the complaint in the context of a prior appeal (Rupert v Gates & Adams, P.C., 48 AD3d 1221 [2008]), we "necessarily rejected the very premise upon which the court denied the instant motion for summary judgment," i.e., that "this legal malpractice action is barred by [the] plaintiff’s failure to perfect an appeal from the judgment in the matrimonial action" (83 AD3d at 1395).

Although the precise question presented herein appears to be an issue of first impression in New York, we note that several of our sister states have rejected the per se rule advanced by defendants herein (see e.g. MB Indus., LLC v CNA Ins. Co., 74 So 3d 1173, 1176 [2011]; Hewitt v Allen, 118 Nev 216, 217-218, 43 P3d 345, 345-346 [2002]; Eastman v Flor-Ohio, Ltd., 744 So 2d 499, 502-504 [1999]; Segall v Segall, 632 So 2d 76, 78 [1993]). As has been noted, such a rule would force parties to prosecute potentially meritless appeals to their judicial conclusion in order to preserve their right to commence a malpractice action, thereby increasing the costs of litigation and overburdening the court system (see Eastman, 744 So 2d at 504). The additional time spent to pursue an unlikely appellate remedy could also result in expiration of the statute of limitations on the legal malpractice claim (see MB Indus., 74 So 3d at 1181). Further, requiring parties to exhaust the appellate process prior to commencing a legal malpractice action would discourage settlements and potentially conflict with an injured party’s duty to mitigate damages (see Crestwood Cove Apts. Bus. Trust v Turner, 164 P3d 1247, 1254 [2007]; Eastman, 744 So 2d at 504).

Cooperstown, NY:  Plaintiff wanted to sell his construction company, and was very involved in the transaction.  In retrospect, the Appellate Division, Third Department found that he was too involved to merely blame his attorney for the bad outcome. Hattem v Smith    2013 NY Slip Op 07791 [111 AD3d 1107]  November 21, 2013  Appellate Division, Third Department tells its story, and then slips in a twist.  Follow for the "a-ha" moment.

"In 2003, plaintiff retained defendant Robert J. Smith, an attorney with defendant Coughlin & Gerhart, LLP, to represent him in the sale of his business, JMF Associates, Inc., to O’Connor and Shew Construction, Inc. (hereinafter OSC). The sale documents included a stock purchase agreement by which the shares in JMF would be conveyed to OSC for a down payment and a balance paid pursuant to a promissory note guaranteed by OSC’s two individual owners. The note was backed by a security agreement naming plaintiff as the secured party and JMF as the debtor, and covering all of JMF’s assets, including vehicles and construction equipment. In September 2004, Smith sent the proposed sale documents to OSC’s attorney; that attorney forwarded the documents to one of OSC’s owners and asked that individual to have all parties—including plaintiff—sign the documents and thereafter return them to him. The OSC owners met plaintiff at a branch of NBT Bank, where the documents were fully executed and notarized. Immediately thereafter and without the knowledge of either attorney, OSC obtained a loan from NBT that was secured by the assets of OSC and JMF and consisted of funds sufficient to cover the down payment, bank fees and a line of credit. On October 5, 2004, NBT perfected its [*2]security interest by filing a UCC-1 financing statement (hereinafter a UCC-1). Neither Smith nor OSC’s attorney learned about this UCC-1 or the underlying loan from NBT until several years later.

Following these transactions, OSC’s owners returned the executed sale documents to OSC’s attorney, who sent them to Smith on October 25, 2004. Smith prepared but never filed a UCC-1 securing plaintiff’s security interest in the construction equipment, and did not prepare or file Department of Motor Vehicle (hereinafter DMV) liens securing plaintiff’s interest in the vehicles (see Vehicle and Traffic Law § 2118). In 2006 and 2007, the Internal Revenue Service filed federal tax liens against JMF, now owned by OSC. OSC’s owners stopped making payments upon plaintiff’s promissory note and, in 2007, filed for bankruptcy. When plaintiff attempted to repossess the vehicles and equipment pursuant to the security agreement, he discovered that his first-priority security interest had not been protected. Thereafter, NBT sold its security interest to a third party and, in October 2011, by a default order and judgment in a civil action prosecuted by the third party against plaintiff and other defendants, Supreme Court awarded possession of all assets, inventory and other property of JMF and OSC to this third party.

We agree with defendants’ contention that Supreme Court erred in refusing to charge the jury regarding plaintiff’s comparative fault. The culpable conduct of a plaintiff client may be asserted as an affirmative defense in a legal malpractice action in mitigation of damages (see CPLR 1411, 1412; Schaeffer v Lipton, 243 AD2d 969, 971 [1997]; Caiati v Kimel Funding Corp., 154 AD2d 639, 639-640 [1989]; see also Shapiro v Butler, 273 AD2d 657, 658 [2000]). Here, the evidence was sufficient to support a finding that plaintiff could reasonably have been expected to understand the underlying obligations and formalities (compare Cicorelli v Capobianco, 90 AD2d 524, 524 [1982], affd 59 NY2d 626 [1983]). Plaintiff was experienced in commercial transactions, including secured loans, understood that loans such as the one from NBT to OSC generally require collateral, and testified that his purpose in retaining Smith was to protect his security interest in the vehicles and equipment. He acknowledged that none of the discussions among the parties and their counsel leading up to the execution of the sale documents had included any mention of outside loans to OSC, and that he introduced OSC’s owners to the NBT officer who later approved the loan.

Plaintiff’s testimony as to his purpose in making this introduction and his personal knowledge regarding the owners’ intention to obtain financing for the purchase of JMF was contradictory and inconsistent. The loan officer testified that plaintiff introduced OSC’s owners to him for this specific purpose, and one of the owners testified that their plan to obtain a loan was discussed with plaintiff before the sale documents were signed; both the owner and the loan officer testified that plaintiff was present during transactions pertaining to the loan. Plaintiff never advised Smith that he had signed the sale documents, nor did he contact Smith after engaging in these transactions. As this evidence provided "a valid line of reasoning and permissible inferences from which rational people can draw a conclusion of negligence," the [*3]question of plaintiff’s comparative fault should have been submitted to the jury (Bruni v City of New York, 2 NY3d 319, 328 [2004]; see Gotoy v City of New York, 94 NY2d 812, 814 [1999]; Klingle v Versatile Corp., 199 AD2d 881, 882 [1993]). Accordingly, the matter must be remitted for a new trial."

White Plains:  We’ve often identified ways in which legal malpractice is not like other litigation.  One such area is the successor attorney problem.  In legal malpractice, if attorney 1 makes a mistake, and the client then fires attorney 1 and hires attorney 2, then attorney one is basically off the hook if there is time for attorney 2 to clean up the mess.  In a chain personal injury tort, (think a car accident followed by med mal), the first tortfeasor is responsible for all subsequent forseeable torts.

Anisman v Nissman  2014 NY Slip Op 03218  Decided on May 7, 2014  Appellate Division, Second Department is an example.  Here, the court found that there was insufficient time, but the principal still stands.

"In an action to recover damages for legal malpractice, the defendant Peter N. Nissman appeals from an order of the Supreme Court, Westchester County (O. Bellantoni, J.), entered January 16, 2013, which denied his motion for summary judgment dismissing the amended complaint insofar as asserted against him.

The Supreme Court properly denied Nissman’s motion for summary judgment dismissing the amended complaint insofar as asserted against him. Nissman failed to show, prima facie, that the plaintiff was unable to prove at least one of the essential elements of his legal malpractice cause of action (see Bells v Foster, 83 AD3d at 877; Mueller v Fruchter, 71 AD3d at 651; Pedro v Walker, 46 AD3d 789, 790). Contrary to Nissman’s contention, he did not establish that successor counsel had a sufficient opportunity to protect the plaintiff’s rights such that Nissman’s conduct could not have proximately caused the plaintiff’s alleged damages (see Gelobter v Fox, 90 AD3d 829, 832). Nissman’s failure to make such a showing required denial of the motion, [*2]regardless of the sufficiency of the opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853). "
 

Albany:  Even when plaintiff points out a mistake that an attorney "unfamiliar with the Board’s apportionment doctrine" made  at the Workers’ Compensation hearing his argument that the Board would have found differently was "too speculative."  Result?  Case dismissed.

"Plaintiff received workers’ compensation benefits as a result of a strained hip he sustained in the course of his employment. When his long-standing orthopedic surgeon, who had previously diagnosed him with osteoarthiritis of the hip, concluded that the work-related injury was fully resolved and any remaining symptoms were solely related to the preexisting condition, the State Insurance Fund (hereinafter SIF) requested that his benefits be suspended. Plaintiff then retained defendant to represent him and, on defendant’s advice, plaintiff went to see another orthopedic surgeon, who attributed 50% of plaintiff’s disability to the work-related injury. At a conciliation hearing, defendant negotiated a settlement with a representative from SIF whereby plaintiff agreed to benefits based upon a temporary, marked disability apportioned 50% to the work-related injury.

Even assuming that defendant was negligent because he was unfamiliar with the Board’s apportionment doctrine (see e.g. Matter of Nye v IBM Corp., 2 AD3d 1164, 1164 [2003]; Matter of Krebs v Town of Ithaca, 293 AD2d 883, 883-884 [2002], lv denied 100 NY2d 501 [2003]), he could nevertheless succeed on his motion for summary judgment by demonstrating that his negligence was not a proximate cause of any actual and ascertainable damages to plaintiff (see Geraci v Munnelly, 85 AD3d 1361, 1362 [2011]; Bixby v Somerville, 62 AD3d 1137, 1139 [2009]; Tabner v Drake, 9 AD3d 606, 609 [2004]). In the context of the compromise reached in settlement of plaintiff’s workers’ compensation claim, a legal malpractice cause of action would be viable " ‘if it is alleged that [the] settlement . . . was effectively compelled by the mistakes of counsel’ " (Tortura v Sullivan Papain Block McGrath & Cannavo, P.C., 21 AD3d 1082, 1083 [2005], lv denied 6 NY3d 701 [2005], quoting Bernstein v Oppenheim & Co., 160 AD2d 428, 430 [1990]; see Rau v Borenkoff, 262 AD2d 388, 389 [1999]).

Nor is there any evidence that defendant could have litigated a more favorable result for plaintiff (see Sevey v Friedlander, 83 AD3d 1226, 1227 [2011], lv denied 17 NY3d 707 [2011]; Mega Group, Inc. v Pechenik & Curro, P.C., 32 AD3d 584, 586-587 [2006]). In determining whether plaintiff was entitled to continued benefits, the Board would have been confronted with differing medical opinions and would have been free to credit the opinion that plaintiff was no longer disabled as a result of the work-related injury (see e.g. Matter of Altobelli v Allinger Temporary Servs., Inc., 70 AD3d 1083, 1084 [2010]; Matter of Moore v St. Peter’s Hosp., 18 AD3d 1001, 1002 [2005]). Had the Board accepted the opinion of plaintiff’s treating orthopedist, plaintiff would have been entitled only to a lump-sum payment for his work-related injury, and would not be receiving the continuing benefits provided by the settlement."

Rochester: The Fourth Department heard this case once, and sent it back to Oneida County. Supreme Court dismissed it once again, and the Fourth Department has once again sent it back to Oneida County for trial.Dischiavi v Calli  2013 NY Slip Op 07289 [111 AD3d 1258]  November 8, 2013  Appellate Division, Fourth Department chronicles some strange attorney behavior.
 

"Memorandum: Plaintiffs commenced this action seeking damages for, inter alia, breach of contract, legal malpractice and fraud, alleging, among other things, that defendants failed to commence timely legal actions to recover damages arising from injuries sustained by Gary M. Dischiavi (plaintiff). Plaintiffs allege in their complaint that plaintiff was injured as the result of an accident that occurred while he was on duty as a City of Utica police officer in 1991, and that he was further injured as a result of his ensuing medical treatment. Although plaintiffs retained defendant law firm of Calli, Kowalczyk, Tolles, Deery and Soja (CKTDS) to represent them with respect to possible claims arising from those injuries, no action was ever instituted. Plaintiffs further allege that defendants purported to have plaintiff examined by an expert physician but had a lawyer examine him instead, purported to have other expert physicians review plaintiff’s medical records but had a veterinarian perform that review, misrepresented that they had commenced a personal injury action on plaintiffs’ behalf, and created a fake settlement agreement for that "action." This case was previously before us on appeal, and we determined, inter alia, that Supreme Court erred in granting the motions and cross motion of various defendants for summary judgment dismissing the complaint in its entirety against them (Dischiavi v Calli [appeal No. 2], 68 AD3d 1691, 1692-1694 [2009])."

"Defendants Andrew S. Kowalczyk, Joseph Stephen Deery, Jr., and CKTDS (collectively, CKTDS defendants), along with defendant William S. Calli, Jr. (Calli, Jr.), as administrator C.T.A. of the estate of former defendant William S. Calli, Sr., contend that the court erred in denying their motions insofar as they concern the underlying medical malpractice claim. Specifically, the CKTDS defendants and Calli, Jr., contend that the underlying medical malpractice claim lacks merit, and thus that plaintiffs could not recover damages based on the failure of those defendants to commence a timely action based on that claim. We conclude, however, that the court properly denied the motions to that extent inasmuch as the CKTDS defendants and Calli, Jr. failed to meet their initial burden of establishing that plaintiffs’ medical malpractice claim lacks merit (see generally Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Welch v State of New York, 105 AD3d 1450, 1451 [2013]). In any event, plaintiffs raised a triable issue of fact (see generally Zuckerman v City of New York, 49 NY2d 557, 562 [1980])."

"To the extent that defendants sought summary judgment dismissing the first and second causes of action on the ground that the applicable three-year statute of limitations had expired prior to the commencement of this action (see CPLR 214 [6]; see generally Zorn v Gilbert, 8 NY3d 933, 933-934 [2007]), we conclude that they met their initial burden on their respective motions. We further conclude, however, that plaintiffs raised a triable issue of fact whether the doctrine of continuous representation tolled the statute of limitations (see generally Shumsky v Eisenstein, 96 NY2d 164, 167-168 [2001]). The court therefore properly determined that defendants were not entitled to the relief sought based on the statute of limitations."

Albany / Syracuse:

The statute of limitations exists so that the courts can carry on.  Were it not for the S/L, courts would still be delving into wrongs that took place before World War 2.  Legal malpractice has a 3 year statute of limitations, which is somewhat ameliorated by the continuous representation doctrine.  So long as the attorney is representing the client in the same matter, the S/L does not start to run.

It is more difficult to determine when the continuous representation ends in a transactional setting than in a litigation setting.  it’s easy to see when the attorney was substituted out, or the case ended.  It not so easy to determine when negotiations over a transaction might have ended.

in Priola v Fallon  2014 NY Slip Op 03130 Released on May 2, 2014 Appellate Division, Fourth Department we see a case dismissed after plaintiff cannot show that representation continued. 
 

"Memorandum: In this legal malpractice action, plaintiff appeals from an order granting defendants’ motion for summary judgment dismissing the amended complaint on the ground that, inter alia, the action was time-barred. Plaintiff contends that Supreme Court erred in granting the motion because the statute of limitations was tolled by the continuous representation doctrine. We reject that contention. "A cause of action for legal malpractice accrues when the malpractice is committed" (Elstein v Phillips Lytle, LLP, 108 AD3d 1073, 1073 [internal quotation marks omitted]). Here, defendants established that any malpractice occurred, at the latest, in 2003 and thus made a prima facie showing that the action was time-barred (see International Electron Devices [USA] LLC v Menter, Rudin & Trivelpiece, P.C., 71 AD3d 1512, 1512). "The burden then shifted to plaintiff[] to raise a triable issue of fact whether the statute of limitations was tolled by the continuous representation doctrine" (id.; see Macaluso v Del Col, 95 AD3d 959, 960), and plaintiff failed to meet that burden inasmuch as he failed to present the requisite " clear indicia of an ongoing, continuous, developing, and dependent relationship between the client and the attorney’ " to toll the statute of limitations (Kanter v Pieri, 11 AD3d 912, 913; see Guerra Press, Inc. v Campbell & Parlato, LLP, 17 AD3d 1031, 1032-1033). In light of our determination, we do
not address plaintiff’s remaining contentions. "

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."