This case illustrates what happens when defendants and third-parties are fighting, while plaintiff remains on the sidelines, enjoying a brief respite.  When this happens in a legal malpractice case, the spectacle of legal malpractice defense firm arguing with a legal malpractice defense firm over technical dismissals is a touch ironic.

Balkheimer v Spanton  2013 NY Slip Op 00715 [103 AD3d 603]  Appellate Division, Second Department   is one such example.  

"In an action to recover damages for legal malpractice, the third-party defendants appeal from an order of the Supreme Court, Suffolk County (Tanenbaum, J.), dated December 9, 2011, which denied their motion pursuant to CPLR 3211 (a) (5) and (7) to dismiss the third-party complaint.

Ordered that the order is reversed, on the law, with costs, and the motion of the third-party defendants pursuant to CPLR 3211 (a) (5) and (7) to dismiss the third-party complaint is granted.

Pursuant to General Obligations Law § 15-108 (b), "[a] release given in good faith by the injured person to one tortfeasor as provided in [General Obligations Law § 15-108 (a)] relieves him [or her] from liability to any other person for contribution as provided in article fourteen of the civil practice law and rules." Here, the plaintiffs executed a general release in favor of the third-party defendants. There is no indication in the record that the release was not executed in good faith. Therefore, pursuant to General Obligations Law § 15-108 (b), the third-party defendants are relieved from liability to the third-party plaintiffs for contribution (see Ziviello v O’Boyle, 90 AD3d 916, 917 [2011]; Kagan v Jacobs, 260 AD2d 442 [1999]). Accordingly, the Supreme Court should have granted that branch of the motion of the third-party defendants which was pursuant to CPLR 3211 (a) (5) to dismiss the contribution cause of action in the third-party complaint as barred by the release.

Here, the third-party complaint does not allege the existence of any duty owed by the third-party defendants to the third-party plaintiffs (see Raquet v Braun, 90 NY2d at 183; Breen v Law Off. of Bruce A. Barket, P.C., 52 AD3d 635, 638 [2008]; Keeley v Tracy, 301 AD2d 502, 503 [2003]). Furthermore, the third-party plaintiffs would not be compelled to pay damages for the alleged negligent acts of the third-party defendants (see Lovino, Inc. v Lavallee Law Offs., 96 AD3d at 910; Jakobleff v Cerrato, Sweeney & Cohn, 97 AD2d 786, 786-787 [1983]). Accordingly, the Supreme Court should have granted that branch of the motion of the third-party defendants which was pursuant to CPLR 3211 (a) (7) to dismiss the common-law indemnification cause of action in the third-party complaint."

The Appellate Division, First Department writes a short and pungent decision on an overbilling case.  In Chowaiki & Co. Fine Art Ltd. v Lacher   2014 NY Slip Op 01992   Decided on March 25, 2014   Appellate Division, First Department dismissal of certain of the claims are affirmed, and some are permitted to continue.  Unjust enrichment in addition to breach of contract remain, and plaintiff is not required to elect.  From the decision:
 

"In this action arising from defendant attorney and his law firm’s representation of plaintiffs in an action brought against them by a former employee, plaintiffs allege that they were excessively billed for services rendered, and that they were harassed, threatened and coerced into paying the excessive and overinflated fees. The motion court properly dismissed plaintiffs’ claim for breach of fiduciary duty as duplicative of the breach of contract claim, since the claims are premised upon the same facts and seek identical damages, return of the excessive fees paid (see CMMF, LLC v J.P. Morgan Inv. Mgt. Inc., 78 AD3d 562 [1st Dept 2010]; cf. Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1 [1st Dept 2008]). Although plaintiffs sufficiently allege an independent duty owed to them, arising from the attorney-client relationship, the fraud claim is similarly redundant of the breach of contract claim, since it also seeks the same damages (see Coppola v Applied Elec. Corp., 288 AD2d 41, 42 [1st Dept 2001]; Makastchian v Oxford Health Plans, 270 AD2d 25, 27 [1st Dept 2000]).

However, we find that, as a dispute exists as to the application of the retainer agreement as to defendant, plaintiffs need not elect their remedies and may pursue a quasi-contractual claim for unjust enrichment, as an alternative claim (see Wilmoth v Sandor, 259 AD2d 252, 254 [1st Dept 1999]).

The cause of action based upon Judiciary Law § 487 was properly dismissed since relief under this statute is not lightly given and the conduct alleged does not establish the existence of a chronic and/or extreme pattern of legal delinquency which caused damages (see Kaminsky v Herrick, Feinstein LLP, 59 AD3d 1, 13 [1st Dept 2008], lv denied 12 NY3d 715 [2009]; Nason v Fisher, 36 AD3d 486, 487 [1st Dept 2007]). [*2]

Plaintiffs’ claims of excessive billing and related conduct, which actions are not alleged to have adversely affected their claims or defenses in the underlying action, do not state a claim for legal malpractice (see e.g. AmBase Corp. v Davis, Polk & Wardwell, 8 NY3d 428, 434 [2007]). "

We’ve recently reported on a legal malpractice in a  $25 Million real estate project, as well as in a $ 40 Million re-insurance deal.  Here, plaintiff feels no less stung in a single house real estate transaction gone bad.  Was the attorney to blame?  So far the case avoided dismissal under CPLR 3211.  Whether it will ever go to trial is a different question.

Arias v Arbelaez   2014 NY Slip Op 50428(U)   Decided on March 17, 2014   Supreme Court, Queens County   McDonald, J. we see some sophisticated and unsophisticated people fooling around with real estate and mortgages.  
 

"According to the supplemental summons and amended verified complaint, filed on October 3, 2013, the plaintiff, Amparo Arias, was approached by defendant, Jorge E. Arbelaez, with respect to purchasing the subject premises, a residential property located at 250-02, 87th Avenue, Bellerose, New York. Plaintiff alleges that on December 17, 2011, she entered into a written "Acquisition Agreement" with Arbelaez whereby plaintiff would provide the necessary funds to acquire the property, and Arbelaez would handle the administrative process. The agreement stated that each party would be a 50% owner of a corporation known as "THREE A’S 250-02 LLC" formed to hold title of the premises and the corporation would hold the title in trust for the benefit of the plaintiff with title to ultimately pass to the plaintiff as the equitable owner on a future date. In order to acquire the premises, the buyer, THREE A’S 250-02 LLC, was to assume four separate mortgages totaling $550,000 and plaintiff would put up $50,000 for the acquisition of the property. The complaint states that defendant Hector Marichal represented the plaintiff, defendant Arbelaez, and the corporation in the acquisition of the premises.

Plaintiff alleges that she paid $50,000, a portion of which went to Arbelaez and a portion to Hector Marichal, as attorney, to cover the costs of acquiring the premises. On March 2, 2012 the corporation was taking title to the property subject to the four mortgages. Plaintiff claims that subsequent to the purchase she expended an additional $60,000 to settle and satisfy three existing mortgages on the property. Plaintiff claims that in March 2013 defendants Arbelaez and Marichal did not remit any of the monies she paid towards the first mortgage and as a result the property is in foreclosure. In addition, plaintiff contends that she did not receive marketable title in her name nor has she received any of the corporate documents for Three A’s 25-02 LLC after repeated requests.
 

Plaintiff asserts causes of action for a constructive trust asserting that the plaintiff is the equitable owner of the property and that nominal title was taken in the name of the corporation on behalf of the plaintiff and that despite her investment of $110,000 defendants have refused to reconvey title to the plaintiff. Plaintiff alleges that as a result, the defendants will be unjustly enriched if the premises are [*3]permitted to remain as presently titled.

With respect to defendant Hector Marichal, the complaint alleges that he was part of a conspiracy with the other defendants in which they had a preconceived intention not to honor their obligations to plaintiff but rather to secure their business interests for their own benefit. Therefore, plaintiff asserts causes of action against Hector Marichal for fraud, breach of fiduciary duty, breach of contract and legal malpractice. Plaintiff asserts in this regard that Marichal had no intention of fully representing plaintiff in the transaction and induced the plaintiff to transfer at least $110,000 to defendant as legal fees and acquisition costs. Counsel alleges that Marichal breached his legal and contractual duties to the plaintiff by engaging in fraudulent and deceitful conduct, failing to deliver marketable title, failing to inform plaintiff that the premises was in foreclosure prior to the purchase, and failing to disclose his conflict of interest with the seller, Ramirez.
 

Here, accepting the allegations in the complaint as true, according the plaintiff the benefit of every favorable inference, and determining only whether the allegations fit within any cognizable legal theory (see DeSandolo v United Airlines Inc., 71 AD3d 1073 [2d Dept.2010]; AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 NY3d 58 [2005]), this Court finds that the plaintiff has sufficiently stated a cause of action for fraud, legal malpractice and breach of fiduciary duty against Marichal. In the early stages of litigation such as the pre-discovery stage, "plaintiffs are entitled to the most favorable inferences, including inferences arising from the positions and responsibilities of defendants," and "plaintiffs need only set forth sufficient information to apprise defendants of the alleged wrongs" (DDJ Mgt., LLC v Rhone Group L.L.C., 78 AD3d 442 [1st Dept. 2010]; also see Selechnik v Law Off. of Howard R. Birnbach, 82 AD3d 1077 [2d Dept. 2011).
 

A persistent problem in legal malpractice (and in accounting malpractice) cases is the delayed damages issue.  Put simply, attorney advises on how to accomplish a goal and prepares papers on January 2.  Client uses the advice and paperwork to start a process and the other side resists.  Litigation ensues and 4 years later the other side wins.  When does the statute of limitations end?

For the most part, the rule is that the statute of limitations commences on the day the negligent advice is given, and is extended only by continuous representation.  This is true, even though no damages existed until the other side won, a year after the statute ran,

in XE Partners, LLC v Skadden Arps Slate Meagher &  Flom LLP    2014 NY Slip Op 30668(U)
March 6, 2014  Sup Ct, New York County  Docket Number: 152994/2013  Judge: Eileen Bransten we see this issue:

"Under New York law, "[i]t is well settled that a legal malpractice claim accrues when all the facts necessary to file the cause have occurred and the injured party can obtain relief in court.” Creditanstalt Inv. Bank AG v. Chadbourne & Parke LLP, 14 A.D.3d 414, 415 (1st Dep’t  2005). "What is important is when the malpractice was committed, not when the client discovered it." McCoy v. Feinman, 99 N.Y.2d 295, 301 (2002).

As explained by the Court of Appeals in the accounting malpractice context: "the claim accrues upon the client’s receipt of the accountant’s work product since this is the  point that a client reasonably relies on the accountant’s skill and advice and, as a consequence of such reliance, can become liable for tax deficiencies.” Ackerman v. Price Waterhouse, 84 N.Y.2d 53, 541 (1994). Receipt of the accountant’s advice "is the time when all the facts necessary to the cause of action have occurred and an injured party can obtain relief." Id. The reasoning of Ackerman has been extended to attorney malpractice claims. For example, in Proskauer Rose Goetz & Mendelsohn LLP v. Munao, 270 A.D.2d 150 (1st Dep’t 2000), the First Department cited Ackerman in holding that a client’s legal malpractice counterclaims accrued when the client received defendant’s purportedly
negligent work product. See id. at 151 ("The counterclaims accrued in April 1991, when plaintiff allegedly gave defendants negligent advice that they could shelter income through a certain joint venture."). The First Department likewise held in Nuzum v. Field, 106 A.D.3d 541, 541 (1st Dep’t 2013), deeming legal malpractice claims brought in connection with the drafting of promissory notes time-barred where brought more than three years after the allegedly defective documents were prepared. See also Mark v. Dechert, LLP, 58 A.D.3d 553, 554 (lst Dep’t 2009) ("Plaintiffs’ legal
malpractice claim is barred by the statute of limitations (CPLR 214[6]), which began to run in January 2000, when the merger of the corporate plaintiffs was completed and defendant law firm filed the merger documents."). Viewed in this framework, Plaintiffs legal malpractice cause of action is clearly barred by the statute of limitations. Plaintiffs claim accrued when Defendants’ allegedly negligent work product was received by Defendants. To paraphrase Ackerman, this was
the time when all the facts necessary to the cause of action occurred and when Plaintiff was able to obtain relief. Since the advice was given in 2008, Plaintiffs 2013 filing was untimely. 

In opposition, Plaintiff contends that it did not suffer an "actionable injury" until the adverse arbitral finding, and as such~ had no claim until that point. However, the First Department rejected a similar argument in Lincoln Place, LLC v. RVP Consulting, Inc.,  70 A.D.3d 594 (1st Dep’t 2010), dismissing a claim asserting legal malpractice in the drafting of a lease assignment as time-barred where the claim was brought five years after lease assignment was executed. While the plaintiff-client argued that its claim did not accrue until it was found liable for outstanding rent due to the faulty assignment, the First Department held otherwise, stating that the collateral adjudication "was not a prerequisite to the existence of an actionable injury." Id. at 594. Likewise here, the resolution of the arbitration was not a prerequisite to a pleading of"actionable injury" by XE Partners. Accordingly, Plaintiffs claim did not accrue after the arbitration ruling in 2010; instead,
consistent with Ackerman, such claim accrued when the legal advice was received. Plaintiff cites to a Second Department case, Frederick v. Meighan, 75 A.D2d 528 (2d Dep’t 20l0) for the contrary proposition. Even accepting Plaintiffs reading of Frederick as correct for the sake of argument, this reading is in conflict with Ackerman and its First Department progeny and therefore is not controlling.

Thus, for the foregoing reasons, Defendants’ motion to dismiss is granted on statute of limitations grounds.

Milgram Thomajan & Lee, P.C. v Golden Gate Petroleum, P.C.    2014 NY Slip Op 24063   Decided on March 19, 2014   Appellate Term, First Department  teaches three lessons.  One is that a well written letter to the client during litigation warning of potential problems in choosing one course of conduct over another may sway the outcome.  The second is that strategic choices, supported by good reasons will often defeat legal malpractice claims and the third is that unpaid legal services, especially those that are recouped from a bankruptcy, can be very powerful.
 

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

The record discloses no evidentiary error warranting reversal. The out-of-court statements made by defendant’s (now) deceased chief financial officer were admissible under the "speaking agent" exception to the hearsay rule (see Loschiavo v Port. Auth. of New York & New Jersey, 58 NY2d 1040, 1041 [1983]). Further, in light of the voluminous evidence considered by the jury, including over 60 trial exhibits introduced by defendant, any error in the exclusion of the two documents now complained of by defendant would have been harmless (see Ramkison v New York City Hous. Auth., 209 AD2d 256, 256 [2000]).

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

Plaintiff sues several attorneys, and waits until nearly the end of the 120 day period to serve the summons and complaint.  Service is not complete (mailing was later) and each of the defendants has a viable CPLR 306-b defense.  One defendant moved within 60 days to dismiss and one did not.  That 60 day time period under CPLR 3211(e)  is vastly important.  As we see in Qing Dong v. Chen Mao Kao 2014 NY Slip Op 01735  Decided on March 19, 2014  Appellate Division, Second Department

"Contrary to the plaintiff’s contention, service of the summons and complaint upon Chen Mao Kao and Dickman was not made within 120 days of the commencement of the action as required by CPLR 306-b. Although the summons and complaint were delivered to persons of suitable age and discretion at the actual places of business of those defendants on November 4, 2011, one day before the expiration of the 120-day period, service was not completed within that time frame because the second act required by CPLR 308(2), the mailing, was not performed within the 120-day period (see Furey v Milgrom, 44 AD2d 91, 92-93; see also Siegel, NY Prac § 72 at 120 [5th ed 2011]). Also contrary to the plaintiff’s contention, considering all of the circumstances of this case, the Supreme Court providently exercised its discretion in denying her cross motion to extend the time to serve the summons and complaint upon Chen Mao Kao and Dickman, nunc pro tunc, in the interest of justice (see CPLR 306-b; Leader v Maroney, Ponzini & Spencer, 97 NY2d 95, 105-106; Khodeeva v Chi Chung Yip, 84 AD3d 1030, 1030-1031; Calloway v Wells, 79 AD3d 786, 786-787). Accordingly, the Supreme Court properly granted Dickman’s motion, and properly denied the plaintiff’s cross motion.

The Supreme Court also properly denied that branch of Chen Mao Kao’s cross motion which was pursuant to CPLR 306-b to dismiss the complaint insofar as asserted against him. Chen Mao Kao waived his objection that he was not timely served with the summons and complaint by failing to move for judgment on that ground within 60 days after serving his answer (see CPLR 3211[e])."

For policy reasons New York Courts limit the types of damages that might be awarded in legal malpractice. Basically, as the NY Court of Appeals recently reiterated, only pecuniary loss may be the subject of legal malpractice litigation. This specifically and totally leaves out any type of emotional damages. Nevertheless people suffer these injuries when their attorneys are neglectful.

White v Chelli & Bush 2013 NY Slip Op 30491(U)    Supreme Court, Richmond County Docket Number: 103745/11 Judge: Joseph J. Maltese is one such example.

"The plaintiff has been deaf since birth. After an automobile accident on or about April 16, 2007, the plaintiff retained Chelli & Bush to represent her in a personal injury litigation. According to the plaintiff’s allegations, it was communicated to the attorneys that the plaintiff would require a sign language interpreter during all phases of the litigation. On or about November 28, 2007 the law firm of Chelli & Bush commenced a personal injury action on behalf of the plaintiff captioned White v. Varsertriger, Index No. 104489/2007. The plaintiff maintains [* 1] that the defendants failed to provide sign language interpreters as requested, except for the examination before trial and the preceding preparation."

"The plaintiff’s basis for her legal malpractice claim occurs at paragraphs 63 and 64 in her
amended complaint that allege that the defendants inability to communicate with her represents a
failure to comply with an attorney’s basic ethical obligation. At paragraphs 66 and 67 the plaintiff alleges the following damages:
66. As a consequence of Defendants’ actions and inactions, White experienced feelings of frustration, helplessness and inadequacy throughout the pendency of the litigation and during settlement conferences. Thereafter, she has experienced sleep and appetite disturbances, episodes of crying, fearfulness or trepidation, and feelings of worthlessness, anxiety and depression.

67. As a consequence of Defendants’ actions and inactions,  Plaintiff has been prejudiced and suffered severe emotional distress and is entitled to compensatory damages. The Appellate Division, Second Department has made it clear that claims of damages stemming from the intentional infliction of emotional distress are not recoverable in legal malpractice actions.

“Damages in a legal malpractice case are designed ‘to make the injured client whole’ . . . A plaintiff’s damages may include ‘litigation expenses incurred in attempt to avoid, minimize, or
reduce the damage caused by the attorney’s wrongful conduct’. . .” While the Court of Appeals
has held that plaintiff may be awarded litigation expenses incurred to correct an attorney’s error,
it specifically rejected the notion that a plaintiff could be reimbursed for the expenses incurred
because of an attorney’s negligence.8 Consequently, the plaintiff’s claims for damages based on
the costs and attorney’s fees of this law suit is without merit."
 

SuccessfulJudiciary Law 487 cases are more rare than those dismissed. An attempt to deceive courts coupled with sufficiently egregious behavior is necessary.  Courts often reject plaintiff’s attempts to portray attorney conduct as deceitful, finding instead that it is within normal limits.

In Cohen v Kachroo   2014 NY Slip Op 01674   Decided on March 13, 2014   Appellate Division, First Department  the Court finds that the attorneys attempted to deceive the Courts with claims that the clients just were not paying the bills.  In the past, we have seen these kind of claims to be more or less "boilerplate."  Here is what the AD said about the various claims in the case:
 

"To the extent that plaintiff seeks to allege malpractice based on a violation of the New York Rules of Professional Conduct, such an alleged violation does not, without more, support a malpractice claim (Schafrann v N.V. Famka, Inc., 14 AD3d 363 [1st Dept 2005]; see also Sumo Container Sta. v Evans, Orr Pacelli, Norton & Laffan, 278 AD2d 169, 170-171 [1st Dept 2000]). Moreover, "[t]he violation of a disciplinary rule does not, without more, generate a cause of action" (Schwartz v Olshan Grundman Frome & Rosenzweig, 302 AD2d 193, 199 [1st Dept 2003]).

Plaintiff’s cause of action alleging breach of fiduciary duty is dismissed as duplicative of the legal malpractice cause of action. Contrary to plaintiff’s assertion, the breach of fiduciary [*2]duty claim alleged no new facts and sought the same damages as the legal malpractice claim (Cobble Cr. Consulting, Inc. v Sichenzia Ross Friedman Ference LLP, 110 AD3d 550, 551 [1st Dept 2013]; Garnett v Fox, Horan & Camerini, LLP, 82 AD3d 435, 436 [1st Dept 2011]).

The allegations that defendants were fully paid under the terms of the retainer agreement, but falsely represented in court that they sought to be relieved because they had not been paid, suffice to allege that defendants acted with intent to deceive the respective courts (see e.g. Schindler v Issler & Schrage, 262 AD2d 226 [1st Dept 1999], lv dismissed 94 NY2d 791 [1999]). In addition, plaintiff sufficiently alleged a chronic and extreme pattern of legal delinquency by averring that defendants fabricated certain charges, attempted to extract more money than agreed upon in the retainer, and threatened to abandon the matter if plaintiff did not execute an addendum to the retainer, to defendants’ benefit (see e.g. Kinberg v Opinsky, 51 AD3d 548, 549 [1st Dept 2008]). The allegedly false representations in two courts, and the coercive threats to plaintiff in an attempt to elicit additional remuneration are sufficiently egregious to state a claim for punitive damages (see Dobroshi v Bank of Am., N.A., 65 AD3d 882, 884 [1st Dept 2009], lv dismissed 14 NY3d 785 [2010]; Smith v Lightning Bolt Prods., 861 F2d 363, 372-373 [2d Cir 1988]).