Yesterday, we started to discuss how fraud and legal malpractice can exist side by side and not be "duplicitive."  In Johnson v Rose  2014 NY Slip Op 30262(U)  January 23, 2014  Sup Ct, NY County 
Docket Number: 652075/2011  Judge: Lawrence K. Marks we saw how plaintiffs claimed both fraud and legal malpractice in the tax shelters they got involved with.

"Defendants seek to dismiss plaintiffs’ first cause of action as duplicative of the legal malpractice claim. It is well-settled that failure to disclose one’s own malpractice, standing alone, does not give rise to a fraud claim separate from the customary malpractice action. See, e.g., Weiss v. Manfredi, 83 N.Y.2d 974, 977 (1994); Baystone Equities, Inc. v. Handel-Harbour, 27 A.D.3d 231, 231 (1st Dep ‘t 2006); Roswick v. Mount Sinai Med. Ctr., 22 A.D.3d 409, 410 (1st Dep’t 2005).  Thus, a fraud claim asserted in connection with a claim for legal malpractice "is sustainable only to the extent that it is premised upon one or more affirmative, intentional misrepresentations — that is, something more egregious than mere concealment or failure to disclose [one’s] own malpractice." White of Lake George v. Bell, 251 A.D.2d 777, 778 (3d Dep’t 1998) (internal quotation marks and citation omitted); accord Carl v. Cohen, 55 A.D.3d 478, 478-79 (1st Dep’t 2008) (fraud claim may be dismissed as duplicative of a malpractice claim if it is ‘"not based on an allegation of independent, intentionally
tortious’ conduct" and "fail[s] to allege ‘separate and distinct’ damages")"

"The Second Department recently held that an allegation that defendants "committed fraud by misrepresenting that they ‘made a motion for a default judgment’ when they ‘never made, filed, or drafted’ such a motion, and that they billed the plaintiff for drafting the motion" was not duplicative or redundant of the allegation that defendants "committed legal malpractice in failing to timely pursue [the] default judgment." Vermont Mut. Ins. Co. v. McCabe & Mack, LLP, 105 A.D.3d 837, 839 (2d Dep’t 2013). The court noted that "[ w ]here, as here, tortious conduct independent of the alleged
malpractice is alleged, a motion to dismiss a cause of action as duplicative is properly denied." Id. at 840. Moreover, the apparent overlap in the amount of damages sought on both counts of action did not require dismissal. Id. at 838, 840.3 See also Simcuski v. Saeli, 44 N.Y.2d 442, 451-52 (1978) (determining that fraud claim was distinct from malpractice claim where defendant,  knowing it to be untrue yet expecting his patient to rely on his advice, advised her that physiotherapy would produce a cure, in consequence of which fraudulent misrepresentation the patient was deprived of the opportunity for cure of the condition initially caused by the doctor’s alleged malpractice"). Particularly instructive is the First Department’s decision in Mitschele v. Schultz,
36 A.D.3d 249, 254 (1st Dep’t 2006). In that case, the plaintiff retained the accountant defendants to advise her regarding her tax status and tax liability as a United Statescitizen living and working abroad. The defendants advised plaintiff that her employer, whose president had introduced plaintiff to the defendants (one of whom was his cousin), should compensate plaintiff as an "outside contractor" and therefore withhold no taxes. When it was later revealed that this advice was erroneous and plaintiff incurred tax liabilities as a result, plaintiff sued, alleging a number of causes of action including accounting malpractice and fraud. Plaintiffs fraud cause of action alleged that defendants’ advice was made not in an effort to serve her interests but for the sole benefit of her employer, to allow it to avoid payroll and other taxes and costs. On these facts, the
First Department rejected the defendants’ contention that plaintiffs fraud claim was duplicative of her malpractice claim. As the court stated, "[D]efendants’ alleged fraud is not simply the failure to disclose the malpractice based upon accounting errors. Rather, defendants are alleged to have perpetrated a fraud on plaintiff from the time they were retained to provide accounting services, in failing to disclose their concern with protecting the interests of another entity, namely, plaintiffs employer." Id. at 254. "

Heirs to the Johnson & Johnson fortune decided that dividends and distributions were not sufficient, and entered into a tax shelter arrangement.  Naturally, it was disastrous, and ended in litigation.  In Johnson v Rose  2014 NY Slip Op 30262(U)  January 23, 2014  Sup Ct, NY County
Docket Number: 652075/2011  Judge: Lawrence K. Marks  we see how the Proskauer Rose LLP law firm engineered a big mess.  Today we will deal with the question of whether a fraud claim can exists side-by-side with a legal malpractice claim.

"Plaintiffs John Seward Johnson, Jr. ("Johnson") and his wife Joyce H. Johnson are Johnson & Johnson, Inc. stockholders who, along with other close affiliates and related entities, were clients of defendants at certain times relevant to the complaint. Through their attorney-client relationship with Johnson, defendants were aware of material aspects of plaintiffs’ financial affairs, including plaintiffs’ ownership of substantial amounts of Johnson & Johnson stock. Defendants approached Johnson (through Matthews) to offer him the opportunity to enter into a tax avoidance transaction with another Proskauer client, nonparty Diversified Group, Inc. ("Diversified"), which was in the business of selling tax planning strategies to high income parties. Defendants told Johnson that the transaction would allow plaintiffs to sell a large block of Johnson & Johnson stock in a manner that would minimize the payment of capital gains taxes. Johnson was realizing significant dividends on the stock up to that time, and had no plans to sell the stock before defendants approached him with the idea."

"Defendants seek to dismiss plaintiffs’ first cause of action as duplicative of the legal malpractice claim. It is well-settled that failure to disclose one’s own malpractice, standing alone, does not give rise to a fraud claim separate from the customary malpractice action. See, e.g., Weiss v. Manfredi, 83 N.Y.2d 974, 977 (1994); Baystone Equities, Inc. v. Handel-Harbour, 27 A.D.3d 231, 231 (1st Dep ‘t 2006); Roswick v. Mount Sinai Med. Ctr., 22 A.D.3d 409, 410 (1st Dep’t 2005). Thus, a fraud claim asserted in connection with a claim for legal malpractice "is sustainable only to the extent that it is premised upon one or more affirmative, intentional misrepresentations — that is, something more egregious than mere concealment or failure to disclose [one’s] own malpractice." White of Lake George v. Bell, 251 A.D.2d 777, 778 (3d Dep’t 1998) (internal quotation marks and citation omitted); accord Carl v. Cohen, 55 A.D.3d 478, 478-79 (1st Dep’t 2008) (fraud claim may be dismissed as duplicative of a malpractice claim if it is ‘"not based on an allegation of independent, intentionally
tortious’ conduct" and "fail[s] to allege ‘separate and distinct’ damages"); Atton v. Bier, 12 A.D.3d 240, 241-42 (1st Dep’t 2004) (suggesting that an alleged failure to disclose one’s own "general incompetence" is, in effect, "founded upon the same underlying allegations as the malpractice claim and seek essentially the same relief’). Mere allegations that defendants "furnished erroneous legal advice and neglected to take appropriate steps to safeguard [plaintiffs’] interests" do not suffice. White of Lake George, 251 A.D.2d at 778. However, not every claim for fraud is duplicative of a professional malpractice claim, even when both are asserted in the same action. For example, it is proper to deny a motion to dismiss a fraud claim as duplicative of a legal malpractice claim where "the fraud cause of action was based upon tortious conduct independent of the alleged malpractice, i.e., an alleged misrepresentation as to the eligibility of the defendant
[attorney] to practice law in the State of Florida, and the plaintiffs alleged that damages flowed from this conduct." Rupolo v. Fish, 87 A.D.3d 684, 685-86 (2d Dep’t 2011); see also Burke, Albright, Harter & Rzepka, LLP v. Sills, 83 A.D.3d 1413, 1414 (4th Dep’t 2011) (fraud counterclaim not duplicative of legal malpractice counterclaim where "[t]he proposed counterclaims are based on allegations that plaintiffs intended to deceive decedent, whereas the ‘legal malpractice  counterclaim] is based on negligent conduct"’); Dischiavi v. Calli, 68 A.D.3d 1691, 1693 (4th Dep’t 2009) (fraud claims not duplicative of legal malpractice claims where "plaintiffs have alleged that the fraud caused additional damages, separate and distinct from those generated by the alleged malpractice")"

Finally, in the case of Cabrera v Collazo  2014 NY Slip Op 00622  Decided on February 4, 2014
Appellate Division, First Department  Tom, J.  

How does the death of an attorney affect the relationship and the statute of limitations for the client’s case?
 

"  Expansion of the record on a "more embracive and exploratory motion for summary judgment" (Rovello, 40 NY2d at 634) may or may not disclose facts demonstrating that, Tanzman was suddenly struck by a fatal and totally incapacitating episode of cancer rendering him unable to engage the services of another attorney to file a timely complaint on behalf of plaintiff or to communicate the necessity to do so. Thus, it would be premature to grant defendant’s pre-answer motion and summarily dismiss the professional malpractice claim on the basis of the incomplete record before us (id.).

The cases relied upon in support of dismissal of the complaint state only that for the purpose of determining the limitations period for an action for professional malpractice, the statute of limitations begins to run on the date the client sustains injury (e.g. McCoy v Feinman, 99 NY2d 295, 301 [2002]; Glamm v Allen, 57 NY2d 87, 95 [1982]). These cases do not state that the severance of the attorney-client relationship, due to death of the attorney, prior to the accrual of the legal malpractice action deprives the client of any remedy for the inaction or negligence of the attorney which contributed to or resulted in the client’s injury. The holding in these cases is not a bar to a legal malpractice claim against Tanzman for alleged failure, while he was alive, to notify plaintiff that he would be unable to file the summons and complaint in time or to enlist the attorneys in his firm to assist in this endeavor. This is especially so considering the short time period between the date of Tanzman’s death and the expiration of the statute of limitations on plaintiff’s underlying wrongful death action 11 days later.

Likewise, it has been held that the absence of any attorney-client relationship bars an action for attorney malpractice (e.g. Fortress Credit Corp. v Dechert LLP, 89 AD3d 615, 616 [1st Dept 2011], lv denied 19 NY3d 805 [2012] [allegedly faulty legal opinion relied upon was prepared by law firm retained by third parties, not by plaintiff]), as does the severance of the attorney-client relationship prior to any act of malpractice (e.g. Clissuras v City of New York, 131 AD2d 717 [2d Dept 1987], appeal dismissed 70 NY2d 795 [1987], appeal dismissed, cert denied 484 US 1053 [1988] [attorney withdrew after arranging for client’s consultation with an actuary regarding her claim involving disputed calculation of pension benefits]). Similarly, such cases do not go so far as to hold that an attorney is absolved of liability for his part in permitting a statute of limitations to run against a client. To the contrary, in Clissuras, this Court expressly noted that counsel had withdrawn from representing the plaintiff "after advising her of the four-month Statute of Limitations" (id. at 719). Indeed, in Mortenson v Shea (62 AD3d 414, 414 [1st Dept 2009]), we noted that attorneys may be held liable for, inter alia, "neglect to prosecute an [*6]action." We stated that in pursuing an action on behalf of the plaintiff, the defendants created the impression that his claim remained viable and, under those circumstances, "defendants had a duty, at a minimum, to expressly advise plaintiff that a limitations period existed," including the need to take the necessary steps to ensure that an action was timely commenced (id. at 415). Whether Mortenson establishes an affirmative duty to advise a client with respect to the running of a limitations period, which the parties dispute, is not a question requiring immediate resolution. What Mortenson signifies is that an attorney will be held accountable for any misconduct that contributes to damages incurred because a statute of limitations is allowed to expire against a client. "

In Cabrera v Collazo  2014 NY Slip Op 00622  Decided on February 4, 2014  Appellate Division, First Department  Tom, J. the question of when the statute of limitations commences and the effect of the death of an attorney.
 

"In late September, Tanzman filed a certificate of lateness with Surrogate’s Court stating that "another attorney" had been contacted initially by the family and "did nothing on the file for over a year." It was followed by a letter of September 30, 2010 asking that letters of administration be issued "as soon as is possible because there is a wrongful death matter associated with the above-named decedent and the Statute of Limitations will be expiring shortly." Surrogate’s Court issued letters of limited administration on October 6. On October 14, Collazo was sentenced to 24 months’ imprisonment on the federal immigration and visa fraud charges [FN2]. On October 24, Tanzman died at Memorial Sloan-Kettering Cancer Center, and the statute of limitations on plaintiff’s wrongful death action expired 11 days later on November 4. No complaint was ever filed on behalf of plaintiff, and this action for professional malpractice ensued.

Other than a death certificate, there is no evidence concerning Tanzman’s treatment or the course of his illness or when he was hospitalized. Nor is there any information about the nature of his law practice, beyond a letterhead that identifies three other attorneys as "of counsel." While it is clear from the letter dated September 30, 2010 that Tanzman was aware of the impending expiration of the statute of limitations against his client, it is unknown whether he took any steps to prepare a complaint for filing or whether he attempted to enlist the assistance of any other attorney including the attorneys of counsel in his firm.

According to the Tanzman defendants, neglect of a client matter by an attorney is not actionable if, as here, the attorney dies before the applicable limitations period runs against the client. Granted, it has been held that, for the purpose of determining the timeliness of a professional malpractice action, the action accrues "when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court." That a cause of action might accrue when the plaintiff actually sustains a loss, however, does not require the conclusion that an attorney is absolved of responsibility for any and all consequences of his neglect of the matter simply because it occurred prior to accrual of an actionable claim. Giving plaintiff the benefit of every possible favorable inference that can reasonably be drawn from the pleadings (Rovello v Orofino Realty Co., 40 NY2d 633, 634 [1976]), as we must on a pre-answer motion to dismiss (see Arrington v New York Times Co., 55 NY2d 433, 442 [1982], cert denied 459 US 1146 [1983]), it appears that the inaction of counsel rendered the lapse of plaintiff’s cause of [*4]action not merely possible — or even probable — but inevitable. On a motion directed at the sufficiency of the pleadings, the issue is whether the facts alleged fit within any cognizable theory of recovery, not whether the complaint is artfully pleaded (see Hirschhorn v Hirschhorn, 194 AD2d 768 [2d Dept 1993]), and the circumstances of this matter do not warrant dismissal of the action, at this juncture, as against the Tanzman defendants.

The extent of the duty imposed on the attorney to commence a timely action depends on the immediacy of the running of the statutory period, and no duty will be imposed where sufficient time remains for successor counsel to act to protect the client’s interests in pursuing a claim (see Golden v Cascione, Chechanover & Purcigliotti, 286 AD2d 281 [1st Dept 2001] [defendant law firm relieved 2½ years before claim expired]). Where, as here, the expiration of the statute of limitations is imminent and the possibility that another attorney might be engaged to commence a timely action is foreclosed, there is a duty to take action to protect the client’s rights.

Plaintiff is entitled to the inference that Tanzman died as a result of a chronic, terminal illness that he knew, or should have known, presented the immediate risk that his ability to represent his clients’ interests might be impaired (see Yuko Ito v Suzuki, 57 AD3d 205, 207 [1st Dept 2008]). Here, defendants offered no evidence to elaborate on the cause or circumstances surrounding Tanzman’s death. The submitted certificate of death for Tanzman merely states that Tanzman passed away on October 24, 2010 at Memorial Sloan-Kettering Cancer Center. The record suggests that plaintiff had cancer, and that his death may have been foreseeable, but the nature and duration of his illness cannot be determined from the death certificate and defendants’ other submissions. Further, the record reflects that Tanzman was well aware that Collazo could not be relied upon to assist with plaintiff’s representation. According to Tanzman’s own statement, Collazo had done nothing on the matter in over a year, and Tanzman’s retainer agreement assigned Collazo only a limited role in the case. In any event, as of September 2010, when Tanzman expressed his concern over the running of the statute of limitations in a letter to Surrogate’s Court, Collazo had been convicted on a federal criminal offense and was facing sentencing and disbarment. Plaintiff is entitled to the factual inference that, at this late juncture and mindful of his ill health, Tanzman was aware of the need to prepare and file a complaint or to arrange for one to be filed as soon as the necessary letters of administration were received. The letters of administration was issued on October 6, 2010. Tanzman neither filed a complaint nor engaged another attorney to file one in his stead despite the availability of three attorneys associated with the firm as of counsel.

No discovery has been conducted and, in the absence of any evidence that the onset of Tanzman’s final episode of illness was sudden, unanticipated and completely debilitating, the failure to seek assistance with the filing of a timely complaint represents a failure to protect plaintiff’s interests. Further, plaintiff was not informed that the statute of limitations was about to expire so that she could protect her claim. Milagros Cabrera stated that in August 2011, eight months after the statute of limitations of plaintiff’s cause of action had expired, Tanzman’s law office mailed the case file to her in response to her efforts to learn the status of the matter. It was then that Cabrera for the first time learned that Tanzman was deceased. She later discovered, [*5]after consultation with another law office, that plaintiff’s claims were time-barred and that Collazo was incarcerated. Finally, even if plaintiff had been put on notice to engage another attorney to initiate the wrongful death action, no means are identified by which the case file might have been obtained from the Tanzman firm to permit substitute counsel to file a timely complaint. In short, while the statute of limitations had not yet run at the time of Tanzman’s death, nothing in the record suggests that there was any available means by which plaintiff might have preserved her wrongful death action. According the facts their most favorable intendment, at the time of Tanzman’s death, the running of the statute of limitations against his client was a foregone conclusion because intervention by substitute counsel was not possible. "

Three concepts are discussed in this very unusual legal malpractice case.  The first is the relationship between attorneys withdrawing and their duties to clients, the second is the effect of an attorney’s death (and how he died) on the client’s interests, and the third is when the statute of limitations commences. From Cabrera v Collazo  2014 NY Slip Op 00622  Decided on February 4, 2014  Appellate Division, First Department .
 

First, the death of an attorney.  "The remarkable defense proffered in this professional malpractice action is that an attorney who neglects a matter so that the statute of limitations runs against his client cannot be held legally accountable if the attorney happens to expire before the applicable limitations period. A cause of action for attorney malpractice requires: " (1) the negligence of the attorney; (2) that the negligence was the proximate cause of the loss sustained; and (3) proof of actual damages’" (Kaminsky v Herrick, Feinstein LLP, 59 AD3d 1, 9 [1st Dept 2008], lv denied 12 NY3d 715 [2009], quoting Mendoza v Schlossman, 87 AD2d 606, 606-607 [2d Dept 1982]). The pleadings, as "[a]mplified by affidavits and exhibits in the record" (Crosland by New York City Tr. Auth., 68 NY2d 165, 167 [1986]), contain allegations from which these elements can be made out and, thus, state a viable cause of action so as to survive a pre-answer motion to dismiss the complaint.

This legal malpractice action was brought by plaintiff Milagros Cabrera against defendants Shelley B. Levy, as executor of the estate of Cary M. Tanzman, Esq., and the Law Office of Cary M. Tanzman (collectively, the Tanzman defendants) and Salvador Collazo, who participated in plaintiff’s representation. The Tanzman defendants brought a pre-answer motion to dismiss the complaint for failure to state a cause of action based on documentary evidence (CPLR 3211[a][1], [7]), particularly Cary Tanzman’s death certificate. The gravamen of their defense is that since the attorney-client relationship was terminated by Tanzman’s death on October 24, 2010, Tanzman and his law firm cannot be held liable for any damages sustained by plaintiff as a result of the subsequent running of the statutory limitations period on November 4, 2010 (EPTL 5-4.1[1]).

According to the Tanzman defendants, neglect of a client matter by an attorney is not actionable if, as here, the attorney dies before the applicable limitations period runs against the client. Granted, it has been held that, for the purpose of determining the timeliness of a professional malpractice action, the action accrues "when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court." That a cause of action might accrue when the plaintiff actually sustains a loss, however, does not require the conclusion that an attorney is absolved of responsibility for any and all consequences of his neglect of the matter simply because it occurred prior to accrual of an actionable claim. Giving plaintiff the benefit of every possible favorable inference that can reasonably be drawn from the pleadings (Rovello v Orofino Realty Co., 40 NY2d 633, 634 [1976]), as we must on a pre-answer motion to dismiss (see Arrington v New York Times Co., 55 NY2d 433, 442 [1982], cert denied 459 US 1146 [1983]), it appears that the inaction of counsel rendered the lapse of plaintiff’s cause of [*4]action not merely possible — or even probable — but inevitable. On a motion directed at the sufficiency of the pleadings, the issue is whether the facts alleged fit within any cognizable theory of recovery, not whether the complaint is artfully pleaded (see Hirschhorn v Hirschhorn, 194 AD2d 768 [2d Dept 1993]), and the circumstances of this matter do not warrant dismissal of the action, at this juncture, as against the Tanzman defendants. "

We will continue with this Case in the next post.

Anyone reading the case of Charell v Brenig   2014 NY Slip Op 30304(U)  January 27, 2014
Sup Ct, New York County  Docket Number: 158589/12  Judge: Joan A. Madden will see the dangers in romance and how true love might turn out.  A New Yorker will recognize the questions of real estate, rent stabilized apartments, and the relationship of Manhattan to the outer boroughs (place of "inferior apartments.")  An attorney will see the relationship of hiring an attorney and legal malpractice.

"Defendants F. Avril Brenig and Julian Lowenfeld, Esq. move for an order pursuant to CPLR 321 l(a)(5) and (7 ), dismissing the complaint on the grounds of statute of frauds and failure to state a cause of action. Defendants also seek an award of costs and attorney’s fees as sanctions for frivolous litigation. 1 Plaintiff Ralph C~arell opposes the motion.  In March 2012, plaintiff Charell and defendant Brenig met through the Internet dating site Match.com and began a romantic relationship. At the time, plaintiff was 82 years old, and defendant, a retired widow, was 73 years old. In September 2012, plaintiff moved into Brenig’s Mitchell Lama apartment at 150 West 96th Street. Plaintiff alleges that in mid-October 2012, Brenig told him she "changed her mine" and "no longer wanted to cohabitate with him." On October 22, he voluntarily left the apartment after Brenig summoned the police. In November 2012, plaintiff commenced this action, asserting first and second causes of action against Brenig for breach of contract and promissory estoppel, third and fourth causes of action against Brenig and Lowenfeld for fraud and intentional infliction of emotional distress,  and fifth and sixth causes of action against Lowenfeld for legal malpractice and professional negligence. The complaint alleges Brenig "induced" plaintiff to surrender his rent stabilized apartment at 311 East 72nd Street, and he relied upon her representations that if he moved into her apartment, she would "provide him with a room in her apartment for the rest of his life," he would "become a ‘cooperator’ on the proprietary lease, and participate in the profits if the building was converted," he would be "added" to her will, and they "would share equally in living expenses." Plaintiff alleges Brenig told him that if the relationship did not work out, he could "reside in the middle bedroom for the rest of his life," and assured him that "under no circumstances would he be asked to vacate the apartment." He alleges his rent stabilized apartment had a rental value of less than 40% of market value, resulting in damages in.excess of $150,000, and that he abandoned "much of his personal property, including furniture, books paintings, and collectibles" worth more than $25,000. Plaintiff alleges that on October 15, 2012, Brenig invited defendant Lowenfeld, an attorney, to the apartment, who introduced himself "as a mediator tasked with crafting a mutually acceptable separation between plaintiff and Brenig." The complaint alleges Lowenfeld specially  stated he was not Brenig’s attorney, "but rather a mediator acting on behalf of both parties." Plaintiff alleges Lowenfeld conducted two mediation sessions on October 15 and 16, during which Lowenfeld "misrepresented plaintiffs legal rights, stating definitively that plaintiff had no right to reside" in Brenig’s apartment and that he should begin looking for a new apartment immediately. The complaint alleges that on October 22, Lowenfeld told plaintiff that he was not a neutral mediator, but Brenig’s attorney, and that he had contacted the police and plaintiff had two choices, to leave the apartment immediately, or be escorted out by the police. Lowenfeld then called the police, who escorted plaintiff out of the apartment. Plaintiff alleges he packed just one suitcase,"and Lowenfeld told him his remaining property would be moved to a storage unit the next day. Plaintiff alleges he checked into a hotel, "began to experience severe chest palpitations," and, believing he was having a heart attack, he went to the emergency room where he was diagnosed with "tachycardia,  palpitations and   hypertension." He alleges that prior to that time, he had never suffered any of those ailments. He also alleges he was caused to suffer severe anxiety and extreme emotional distress by the "daunting task of finding an apartment he could afford and figuring out a way to maintain even a modest standard of living," and he is now living in an "inferior apartment in Astoria, Queens." He alleges that "by reason of the mistreatment and elder abuse described above, he was forced to spend thousands of dollars to replace several personal items he had discarded," and is "also living under continuous, severe stress that has adversely affected his health." "

Board of Mgrs. of Bridge Tower Place Condominium v Starr Assoc. LLP   2013 NY Slip Op   7684 [111 AD3d 526]     Appellate Division, First Department  teaches three important lessons in a very short decision. The simple facts of the case are that defendant attorneys drafted a stipulation which stripped plaintiff of the right to amend its bylaws to attain a specific result in the underlying case. Plaintiffs successfully moved for summary judgment on the issue of liability and dismissed defendant’s’ affirmative defense of comparative fault.
 

Lesson 1:  In this case no expert is necessary to establish that defendants’ conduct fell below the standard of the professions generally.

Lesson 2:  This was a case in which "but for causation’ could be found as a matter of law.  (rare indeed)

Lesson 3:  Even though the Board President was an attorney, he relied upon defendants to draft the stipulation, and cannot be held in comparative fault.

Condominiums and co-ops occupy the greatest portion of  New Yorker’s real estate world.  Many believe that new construction is the jewel of that grouping, and will purchase a unit well before completion.  New owners depend on the reputation of the sponsor.  How the building will come out is an open question, and in Board of Mgrs. of the 125 N. 10th Condominium v 125 N. 10, LLC
2014 NY Slip Op 50035(U)   Decided on January 6, 2014   Supreme Court, Kings County   Demarest, J.  we see what happens after the residents predominate on the board and the sponsor no longer has control.  It’s not a pretty sight.
 In this case there a a very large number of parties, and an even larger number of motions.  Read on, and see how the claims are mostly dismissed, even after the complaint alleges that "According to plaintiff, Sponsors, however, did not deliver a Building in accordance with the Plans and Specifications set forth in the Offering Plan, but, instead, the building was "rife with construction problems," including improperly designed and constructed walls, roofs, and foundation, which have resulted in water infiltration and significant property damage, as well as non-compliance with New York City Department of Building ("DOB") Codes. Other issues complained of include scalding hot water that flows through the residential fixtures, the persistent break down of the building’s heating and cooling systems, severe drafts from the windows, extensive leaking from ceilings, flooding in the cellar garage, noxious odors permeating the units, and a dangerous condition created by terrace railings at the top of the ten-story building, which are designed so that it is possible for children to climb over them.

When the defects were discovered, the Sponsor-controlled board requested that all defendants return to the Building to inspect their designs, plans, and work, to determine how to rectify the problems. However, despite numerous inspections, plaintiff claims that the defects remained unresolved. Accordingly, in 2011, the Board, which was no longer Sponsor-controlled,[FN2] retained a non-party firm, RAND Engineering & Architecture, P.C. (" Rand") to perform a visual survey of the building to determine the cost of making repairs, which were estimated to cost at least $2 million. Plaintiff claims to have performed essential repairs to the roof, in addition to other repairs, which have cost much more than estimated by Rand. Despite these expenditures, plaintiff contends, numerous defects still require repair. Finally, plaintiff refers to a case recently filed in Kings County wherein an individual named Tirpak names the Board as defendant, alleging that by reason of a dangerous and defective condition existing on the roof in violation of DOB code, he fell from the roof and was paralyzed from the waist down. "
 

Here are the results:  As all of plaintiff’s claims are dismissed as to Penmark, the complaint against Penmark is dismissed with leave to plaintiff to replead with respect to any viable contract causes of action related to the Management Agreement.

As all of plaintiff’s claims against Scarano Defendants are dismissed, the complaint is dismissed as to Scarano Defendants.

As all of plaintiff’s claims against Cucich Defendants are dismissed, the complaint is dismissed as to Cucich Defendants.

As all of plaintiff’s claims against Seta Defendants are dismissed, the complaint is dismissed as to Seta Defendants.

As all of plaintiff’s claims are dismissed as to Simon Schwartz, individually, the complaint is dismissed only as to Simon Schwartz, individually, without prejudice to his litigating his cross and counterclaims against the remaining parties.

As all of plaintiff’s claims are dismissed as to Jaccarino, the complaint is dismissed as to Jaccarino, individually.

As all of plaintiff’s claims against Sharon Defendants are dismissed, the complaint is dismissed as to Sharon Defendants.

As all of plaintiff’s claims against AE Design are dismissed, the complaint is dismissed as to AE Design.

All cross claims against the moving defendants are dismissed without prejudice to an aggrieved defendant bringing a third party action against a co-defendant who has been dismissed from this case as a result of this decision.

This constitutes the decision and order of the Court. "