An action to recover damages for malpractice, other than medical, dental or podiartric malpractice, regardless of whether the underlying theory is based in contract or in tort" is subject to a 3 year statute.  More importantly, unless fraud is truly independent of, and not incidental to the professional representation, it too will be subject to a 3 year statute.

LSF6 Mercury Reo Investments LLC v Platinum  Appraisals  2013 NY Slip Op 31464(U)  July 3, 2013 Sup Ct, NY County  Docket Number: 153196/2012  Judge: Ellen M. Coin restates this twin set of rules for real estate appraisers.  "In this action, plaintiff LSF6 Mercury Reo Investments LLC
seeks to recover damages it allegedly suffered as a result of a faulty real estate appraisal conducted by defendants Platinum Appraisals and Joseph Barrara. Defendants move pursuant to
CPLR §3211 (a) (1), (5) and (7) to dismiss the complaint. "

"CPLR §214(6) states that a three-year statute of limitations applies to "an action to recover damages for malpractice, other than medical, dental or podiatric malpractice, regardless of
whether the underlying theory is based in contract or tort."  CPLR §214(6) does not define "malpractice."  A cause of action for fraud is generally governed by a six-year statute, running from the date of the fraud, or a two-year statute, running from the date the fraud was discovered, or could
have been discovered by reasonable means. (CPLR §213 (8); House of Spices (India), Inc. v SMJ Servs., Inc., 103 AD3d 848, 849 "

"The applicable statute of limitations is governed by the "gravamen" of the claim. (See Scot t v Fields, 85 AD3d 756, 758 [2 nd Dept 2011]). Hence, where a claim for fraud or misrepresentation is "merely incidental" to a claim for negligence or malpractice, the three-year statue for malpractice
will govern. (Nickel v Goldsmith & Tortora, Attorneys at Law, P.C., 57 AD3d 496, 496-97 [2 nd Dept 2008]; see also Frumento v On Rite Co., Inc., 66 AD3d 828, 830 [2 nd Dept 2009] [the "reality" or
"essence" of a claim, "not its form" determines whether it will be treated as a cause of action for fraud or for negligence] [internal quotation marks and citation omitted]). Similarly, a breach of contract which is really a restatement of a professional malpractice claim will be governed by the three-year statute applicable to such claims. (Matter of R.M. Kliment & Francis Halsband, Architects (McKinsey & Co., Inc.), 3 NY3d 538, 541-42 [2004])."

Plaintiff hires attorney 1 and after a while begins to court Attorney 2.  Meanwhile, back at home, no one is looking after affairs, and the litigations begin to unravel. Who is at fault?

Devonshire Surgical Facility, LLC v Law Offs. of Leo Tekiel,   2013 NY Slip Op 31441(U)
July 3, 2013  Supreme Court, New York County  Docket Number: 105558/07
Judge: Cynthia S. Kern describes the duties and obligations of the attorneys in this third-party dismissal motion. 

"Third- party defendant Kenneth L. Kutner, Esq. (“Kutner”) has brought the present motion for summary judgment dismissing the third-party complaint as against him. For the reasons stated below, the motion is granted and the third-party complaint is dismissed as against Kutner.

The relevant facts are as follows. Kutner is an attorney. He alleges that in 2004, he was advised by a friend of his, Mr. Einiger, that a client of Mr. Einiger, Dr. Allan Chamberlain, may have a cause of action against various insurance companies for improperly denying insurance payments for medical services rendered. Kutner agreed with Mr. Einiger to cooperatively investigate the claims regarding misconduct by the insurance companies with regard to denying payments to Dr. Chamberlin’s medical practices Devonshire Surgical Facility, LLC (“Devonshire) and Carnegie Hall Orthopedic Services, P.C. (“Carnegie”) and to assist in commencing a case in Supreme Court against several of the offending insurance companies. This action was commenced in September 2004. In connection with the Supreme Court action, Hoffinan, Einiger and Polland , PLLC was directly retained by Dr. Chamberlin.Kutner was never directly retained by Dr. Chamberlin in the Supreme Court action but was retained by Mr. Einiger’s firm to assist in the Supreme Court action.

The Travelers Action sought payment for medical services rendered by Dr. Chamberlin’s medical practices to fourteen of Travelors’ insureds under no fault insurance coverage. The Tekiel defendants had assumed the representation in the Travelors Action from prior counsel in the matter, Paul Solda, Esq. After the plaintiffs in the Travelors Action failed to respond to discovery requests which Travelors had served on them, Travelors filed a motion to dismiss the Travelors Action pursuant to CPLR 3 126 for the continued failure to provide the requested discovery in March 2004. After Travelors filed the motion to dismiss, Kutner sent a letter to Mr. Tekiel dated March 25,2004 in which he requested, inter alia, that Mr. Tekiel furnish him with all captions and index numbers of actions already commenced so that Kutner could prepare substitution of attorney forms. In response to this letter, Tekiel sent Kutner correspondence dated March 26,2004 which included a list of nineteen commenced actions with regard to the Tekiel Defendants’ representation of Chamberlin’s medical practices. The list included the Travelors Action and noted that a motion to dismiss was returnable on April 5,2004 and that discovery had not been provided. On or about May 10,2004, Kutner again sent a letter to Tekiel requesting that Tekiel adjourn Travelors’ motion to dismiss so as to permit Kutner and his co-counsel to “finalize the anticipated substitution of attorneys in the case” being handled for Dr. Chamberlin. On May 1 1,2004, on the return date of the motion to dismiss, the Tekiel Defendants, through per diem counsel, stipulated in the Travelors action to a self executing conditional order of preclusion if the requested discovery was not provided within sixty days.

Based on this court’s finding that Kutner never owed any duty to represent plaintiffs in the Travelors Action, there can be no valid third party claim for contribution. In order to determine whether a third party action for contribution exists, “the critical issue is whether the third- party defendant owed a duty to the plaintiff which was breached and which contributed to or aggravated plaintiffs’s damages.” Rosner v. Paley, 65 N.Y.2d 736,738 (1985). Since this court has already determined that Kutner did not owe any duty plaintiffs in the Travelors Action since he never represented them in that action, he cannot be found to have contributed to plaintiffs’ injuries in that action and cannot be found liable for contribution. ’ The cause of action for contribution is also insufficient as a matter of law because the damages sought in the underlying action are purely monetary. Under New York’s contribution statute, “two or more persons who are subject to liability for damages for the same personal injury, injury to property or wrongful death, may claim contribution among them whether or not an action has been brought or a judgment has been rendered against the person from whom contribution is sought.” CPLR 6 140 1. Board of Educ. of Hudson City School Dist. v. Sargent, Webster, Crenshaw & Folley, 71 N.Y.2d 21,26 (1987). The law is clear that where “the
underlying claim seeks purely economic damages, a claim for common-law contribution is not
available.” Children’s Corner Learning Center v. A Miranda Contracting Corp., 64 A.D.3d 3 18,323 (1” Dept 2009). “[Tlhe determining factor as to the availability of contribution is not the theory behind the underlying claim but the measure of damages sought.” Rockefeller University v. Tishman Construction Corp., 240 A.D.2d 341 (1” Dept 1997). If the damages sought are to be placed in as good a position as one would have been but for the acts being sued upon, then the claim is for economic damages. Children’s Learning Center, 64 A.D.3d at 324. "

From time to time we muse over whether legal malpractice cases are unfairly treated or exposed to a higher degree of scrutiny.  We wonder whether the fact that the rules for legal malpractice are structured by attorneys, are applied by attorneys and deal only with attorneys creates an institutional bias.

Barnave v Davis   2013 NY Slip Op 05184   Decided on July 10, 2013   Appellate Division, Second Department  requires one to ask how Supreme Court could have dismissed this case.  Was it because plaintiff was pro-se?
 

"Here, contrary to the Supreme Court’s determination, the defendant failed to establish his prima facie entitlement to judgment as a matter of law dismissing the complaint. As a result of the plaintiff’s counsel’s failure to appear at a scheduled compliance conference in the underlying action, the underlying action was ultimately dismissed. Contrary to the defendant’s contention, the evidence he submitted in the present action in support of his motion for summary judgment dismissing the complaint did not establish, prima facie, that he no longer represented the plaintiff at the time of that default. The defendant acknowledged in an affidavit submitted in support of his motion that, after the default, he assisted the plaintiff in his efforts to have the underlying action [*2]restored to the calendar, stating, inter alia, that he "use[d] law office failure as the reason [he] did not appear" on behalf of the plaintiff in the underlying action. Therefore, the defendant failed to establish, prima facie, that the plaintiff could not prove breach of duty based on the alleged failure to appear. Furthermore, contrary to his contention, the defendant failed to establish, prima facie, that the plaintiff’s conduct negated any negligence by the defendant and constituted the sole proximate cause of the dismissal of the underlying action. Accordingly, the defendant’s submissions in support of his motion for summary judgment did not establish, prima facie, that the plaintiff will be unable to prove at least one element of his legal malpractice claim and, thus, the defendant failed to demonstrate his entitlement to judgment as a matter of law (see Affordable Community, Inc. v Simon, 95 AD3d at 1048; Mueller v Fruchter, 71 AD3d 650, 651; Rosenstrauss v Jacobs & Jacobs, 56 AD3d 453, 454). In light of our determination, we need not address the sufficiency of the plaintiff’s opposition papers (see Affordable Community, Inc. v Simon, 95 AD3d at 1048; see generally Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).

Accordingly, the Supreme Court should have denied the defendant’s motion for summary judgment dismissing the complaint. "

Attorneys and clients have a unique compensation arrangement in contingent fees.  It’s almost unheard of for people to get paid only on success.  Doctors get paid for treating you, not for curing you.  Plumbers get paid for showing up, and then get paid more for doing the work.  Lawyers often work on contingent plans where they agree to take the case, work the case, pay for the expenses of the case, and then make money if they are successful.  It’s an arrangement that works well if everyone keeps to the rules.

What happens when an attorney decides that he has paid enough of the expenses and now demands that the client put up some money?  We see one outcome in Palmieri v Biggiani
2013 NY Slip Op 05194  Decided on July 10, 2013   Appellate Division, Second Department.  Client alleges that attorney demanded expenses during the case after the defendant insurer marked the case "no pay".  Of course, the contingent arrangement was that the attorney bear the expenses and the risk.
"On July 25, 2007, the parties stipulated to the substitution of the defendant as counsel (hereinafter the July 2007 stipulation). On August 12, 2008, the Supreme Court dismissed the underlying action. The parties dispute the basis for the August 2008 dismissal. The plaintiff alleges that the August 2008 dismissal was based on the Supreme Court’s determination that more than one year had elapsed between the July 2005 order entered on the plaintiff’s default and the May 2007 order vacating that default and restoring the action to the trial calendar, and that the underlying action was, thus, not restorable pursuant to the May 2007 order. He further alleges that, inasmuch as the defendant first withdrew as counsel under false pretenses, and had been reinstated as counsel in May 2007, the defendant’s failure to timely rectify the consequences of the March 2006 dismissal of the underlying action constituted legal malpractice. The defendant contends that the August 2008 dismissal was based on the failure of the plaintiff’s subsequent counsel to prosecute the underlying action. The only documentary evidence in the record as to the court’s reason for the August 2008 dismissal was an entry in the Supreme Court’s computerized calendar record indicating that the underlying action was dismissed "PER SFO J.EDB 3-23-2006."

The plaintiff thereafter commenced the instant legal malpractice action, and the defendant moved, in effect, to dismiss the amended complaint pursuant to CPLR 3211(a)(1), (5), and (7). In an order dated July 5, 2011, the Supreme Court granted that branch of the defendant’s motion which was to dismiss the cause of action alleging legal malpractice, based on its conclusion that documentary evidence established that the underlying action was ultimately dismissed more than one year after the defendant was relieved as counsel, that events subsequent to the substitution of counsel could not be attributed to the defendant, and that, as a matter of law, the defendant’s refusal to advance the expert’s fee was not a proximate cause of the August 2008 dismissal. The Supreme Court also directed the dismissal of the causes of action alleging breach of contract, fraud, breach of fiduciary duty, and deceit as duplicative of the cause of action alleging legal malpractice. It further directed the dismissal of the remaining causes of action for failure to state a cause of action. In a judgment entered August 2, 2011, the Supreme Court dismissed the amended complaint. "

"Contrary to the Supreme Court’s conclusion, the plaintiff stated a cause of action alleging violation of Judiciary Law § 487 (see CPLR 3211[a][7]; Judiciary Law § 487; Amalfitano v Rosenberg, 12 NY3d 8, 14; Rock City Sound, Inc. v Bashian & Farber, LLP, 74 AD3d at 1172; Boglia v Greenberg, 63 AD3d 973, 975; Kempf v Magida, 37 AD3d at 764; Izko Sportswear Co., Inc. v Flaum, 25 AD3d 534, 537). The plaintiff alleged in the amended complaint that the defendant’s assertion, made in support of the motion to be relieved as counsel, that the plaintiff "steadfastly refused to pay the litigation expenses," was knowingly false and was offered with the intent to deceive the Supreme Court into believing that the defendant originally had sufficient cause to be relieved as counsel (see Dupree v Voorhees, 102 AD3d 912, 913). Thus, the Supreme Court should have denied that branch of the defendant’s motion which was to dismiss the cause of action alleging a violation of Judiciary Law § 487. "

Today’s New York Law Journal article by Brendan Pierson highlights the New York fee dispute apparatus.  Either attorney or client can trigger an arbitration, and if either is dissatisfied with the result, can request a de novo court case.  What is fascinating about this case is the lack of caution and apparent bad judgment on the part of the attorney.

"A Manhattan lawyer was ordered to turn over all but $750 of more than $22,000 he collected from two clients after a judge determined the attorney billed the clients up to $450 an hour for time he spent brushing up on basic legal principles.

The clients, Gerald and Vivian Kleinerman, hired Ronny Buni in March 2011 to represent them in litigation against their co-op board, which was already in progress. In June 2011, Buni told the Kleinermans that he would not do any more work on the matter, citing an unpaid invoice for $6,239.

The matter went to the court system’s fee dispute resolution program, an arbitration program pursuant to Part 137 of the Rules of the Chief Administrator. An arbitrator awarded the Kleinermans $5,000.

However, Buni initiated a new case in Manhattan Civil Court against the couple, seeking to recover the $6,239 bill minus the $5,000 arbitration award. The Kleinermans, for their part, sought return of all the money they had paid to Buni throughout the litigation, a total of $22,371."
 

"According to Nervo, Buni reviewed the litigation file, followed up on discovery requests already made by the parties before his involvement, attended a single status conference and "sent innumerable emails to his clients, some of which included berating them for their reasonable input into the matter."

While working on the case, Nervo said, Buni billed the couple up to $450 an hour for activities that he should not have billed.

According to bills quoted by Nervo, these included discussing filing a notice of appearance and contacting opposing counsel; doing an "attorney search" for the law clerk of the judge presiding over the case, Manhattan Supreme Court Justice Milton Tingling, "for purpose of determining his tenure and background" before calling chambers; reviewing the Civil Procedure Laws and Rules to determine the consequences of failing to demand expert information before the close of discovery; and reviewing case law "to survive [summary judgment] and prevail at trial," though no summary judgment motion had been filed.

Nervo cited as another example of Buni’s "remarkable billing practices" an hour and a half spent writing a letter to Tingling seeking an expansion of time for discovery, even though Tingling had denied an identical request by phone the previous day.

Finally, Nervo noted an "inappropriate, if not bizarre" bill for time Buni spent consulting with a retired attorney he knew about how best to handle the case.

"A client should not be charged for an attorney’s need to consult others because of that attorney’s inability to determine how best to represent that client," Nervo said. "The client is not responsible for an attorney’s need to obtain his or her own legal advice. Once plaintiff determined that he was incapable of representing defendants, rather than bill these clients for his own lack of legal knowledge he should have moved to withdraw at that time and not continue to build up legal fees.""
 

The confluence of money, crime and high-stakes litigation is titillating.  When we read about people paying $108 in restitution, then facing RICO claims from the mother-in-law, and then being sued for deceit under Judiciary Law 487, it seems like a movie.

In today’sNew York Law Journal, Andrew Keshner writes about Ira Lee Sorkin, Judd Burstein and Jonathan Winston. 

"An adversary is seeking triple damages from Ira Lee Sorkin of Lowenstein Sandler for allegedly telling a federal judge "outright lies" about his possession of a privileged document that contributed to the judge’s decision to disqualify Sorkin from the case.

Last November, Eastern District Judge Arthur Spatt, sitting in Central Islip, disqualified Sorkin from pressing a civil racketeering suit against real estate developer Jonathan Winston. Spatt noted Sorkin’s prior representation of Winston and Sorkin’s possession of a memorandum that Winston’s defense attorneys drafted but never filed in court seeking to terminate Winston’s probation after he pleaded guilty to conspiracy to commit securities fraud and conspiracy to commit money laundering.

Spatt said Sorkin offered "varying accounts" of how he got the memo, which, Spatt added, was "clearly protected under the work product privilege" (NYLJ, Nov. 27, 2012).

After Spatt dismissed the civil racketeering suit on July 3, Winston filed suit against Sorkin on Tuesday in Nassau County Supreme Court under Judiciary Law §487, alleging Sorkin "engaged in deceit with intent to deceive the Court," when he explained to Spatt how he got the draft memorandum. "

The complaint in Winston v. Sorkin, 8227/13, argues that Sorkin first "improperly made use of an unquestionably privileged draft of a proposed court filing" as he prepared the civil racketeering suit. Then, "when counsel for Winston discovered Sorkin’s improper use of the Probation Memo, Sorkin embarked upon a course of deceitful conduct that involved offering numerous, conflicting explanations of how he came into possession of the Probation Memo, culminating in outright lies made in Court."

"Represented by Judd Burstein of Manhattan, Winston seeks damages of three times the cost of litigating the disqualification motion.

Burstein in an interview estimated legal bills connected to the case at about $100,000 and stressed the underlying case was "entirely frivolous" and a "fraud."

Sorkin said he had not yet seen the suit and declined further comment.

In 1999, Winston retained Sorkin to represent him after the National Association of Securities Dealers—the predecessor of the Financial Industry Regulatory Authority—launched a probe into Winston and his securities brokerage firm, First United Equities Corporation.

When Winston became aware that he was also the subject of a criminal probe by the Eastern District U.S. attorney, he asked Sorkin to defend him but Sorkin declined, citing a conflict of interest"

There is no "discovery" rule in New York for the commencement of the legal malpractice statute of limitations.  As the Court in Elstein v Phillips Lytle, LLP   2013 NY Slip Op 05132   Released on July 5, 2013   Appellate Division, Fourth Department   points out, "A cause of action for legal malpractice accrues when the malpractice is committed."  However, there is a small exception to this bedrock principal, and it is originally cited in McCoy v. Feinman.  The Appellate Division, 4th Department discussed the case:

"Memorandum: In this legal malpractice action, plaintiffs appeal from an order granting the motion of Phillips Lytle, LLP and Albert M. Mercury (defendants) seeking dismissal of the complaint against them as time-barred. Plaintiffs contend that Supreme Court erred in determining the accrual date of their action, for legal malpractice. We reject that contention. " A cause of action for legal malpractice accrues when the malpractice is committed’ " (Amendola v Kendzia, 17 AD3d 1105, 1108; see Glamm v Allen, 57 NY2d 87, 93). "In most cases, this accrual time is measured from the day an actionable injury occurs, even if the aggrieved party is then ignorant of the wrong or injury’ " (McCoy v Feinman, 99 NY2d 295, 301, quoting Ackerman v Price Waterhouse, 84 NY2d 535, 541). " What is important is when the malpractice was committed, not when the client discovered it’ " (id., quoting Shumsky v Eisenstein, 96 NY2d 164, 166). Here, the alleged malpractice occurred no later than 2003, when plaintiff Daniel Elstein completed his acquisition of plaintiff Hilton Enterprises, Inc. (Hilton) from defendant Alfred D. Spaziano. Indeed, there is no indication in the record that defendants represented plaintiffs after that date. This action was not commenced until approximately eight years later, on March 4, 2011, and is thus time-barred under the applicable three-year statute of limitations (see CPLR 214 [6]).

We reject plaintiffs’ contention that they were unable to sue defendants for malpractice until March 7, 2008, when the judgment was entered against Hilton, inasmuch as that is when they sustained an actionable injury. As the Court of Appeals has made clear, a malpractice claim becomes actionable when the plaintiff’s damages become "sufficiently calculable" (McCoy, 99 [*2]NY2d at 305; see Ackerman, 84 NY2d at 541-542), and, here, plaintiffs’ damages arising from the alleged legal malpractice were sufficiently calculable in January 2007, when plaintiffs learned of the alleged malpractice, if not sooner. "

We often wonder whether legal malpractice cases are treated with a type of royal exasperation by judges. Often the feeling in the air is that legal malpractice cases maybe should not be brought, or that it’s somewhat shameful to bring one, or that perhaps attorneys are due a little extra consideration. We wonder if that’s what happened in Burbige v Siben & Ferber ; 2011 NY Slip Op 07794 ; Decided on November 1, 2011 ; Appellate Division, Second Department.
 

Did the judge just want to get this case over with?

"The plaintiff commenced this legal malpractice action alleging, inter alia, that the defendants were negligent in failing to diligently prosecute a products liability action against the manufacturer of a ladder which broke while the plaintiff was descending it. After the conclusion of opening statements, the defendants’ counsel moved, in effect, pursuant to CPLR 4401 for judgment as a matter of law or, in the alternative, for an offer of proof. The trial court reserved decision. However, before the close of the plaintiff’s case, the court granted the defendants’ motion based upon the plaintiff’s failure to make an offer of proof that he would have been successful in the underlying products liability action by offering expert testimony that the ladder from which he fell was defective.

The trial court erred in granting that branch of the defendants’ motion which was, in effect, pursuant to CPLR 4401 for judgment as a matter of law, and dismissing the action before the plaintiff rested (see CPLR 4401; Greenbaum v Hershman, 31 AD3d 607; McGhee v New York City Hous. Auth., 243 AD2d 544; Goldstein v C.W. Post Ctr. of Long Is. Univ., 122 AD2d 196). A motion for judgment as a matter of law is to be made at the close of an opposing party’s case or at any time on the basis of admissions (see CPLR 4401), and the grant of such a motion prior to the close of the opposing party’s case generally will be reversed as premature even if the ultimate success of the opposing party in the action is improbable (see Cass v Broome County Coop. Ins. Co., 94 AD2d 822; see also Canteen v City of White Plains, 165 AD2d 856; Goldstein v C.W. Post Ctr. of Long Is. Univ., 122 AD2d at 197; Page v City of New York, 79 AD2d 573; Cetta v City of New [*2]York, 46 AD2d 762; Budner v Giunta, 16 AD2d 780; cf. Clifford v Sachem Cent. School Dist. at Holbrook, 271 AD2d 470, 470-471). Therefore, the judgment must be reversed and a new trial granted to the plaintiff. "