Judgment calls are exempt from legal malpractice consideration.  Put another way, an attorney may not be held for legal malpractice on the basis of a reasonable trial strategy even when unsuccessful.  But, what is a trial strategy and what is a departure from good standards?  Often the difference is in the eye of the beholder, or in a slightly more objective sense, when it is reasonable.  Today, we use a criminal case, in a different setting.  Here, the question is whether there was ineffective assistance of counsel. 

In People v Oliveras  2013 NY Slip Op 04040  Decided on June 6, 2013  Court of Appeals
Rivera, J. the question of trial strategy v. ineffective assistance concerned the mental status of the defendant and whether the attorney reasonably refused to seek his psychiatric records.   
 

"After several requests to review the evidence and for a clarification on Miranda, the jury found defendant guilty of murder in the second degree. The court sentenced him to 25 years to life.
D. Defendant’s Motion to Vacate the Conviction

Defendant obtained new counsel who moved to vacate the conviction pursuant to CPL 440.10, arguing that defendant’s trial counsel was ineffective based on several enumerated failures and errors. The motion raised trial counsel’s failure to provide timely notice pursuant to CPL 250.10, to present evidence of defendant’s psychiatric history, to obtain defendant’s psychiatric records, to consult an expert to explain the relationship between defendant’s psychiatric history and the voluntariness and reliability of his statements, and trial counsel’s ignorance of the law regarding the CPL 250.10 notice.

At the hearing, trial counsel testified about his representation of defendant, and explained his decision to not obtain defendant’s records. He stated that while he initially intended to obtain defendant’s psychiatric records to show that defendant’s inculpatory statements were involuntary, he did not pursue this approach because of defendant’s objections. He testified that defendant said he was innocent, and "shut [him] down" from pursuing a psychiatric defense. According to trial counsel, defendant "did not want to be portrayed as someone suffering from a [*5]psychiatric mental illness." He said he believed that defendant did not want to "end up in a mental institution." He further stated that it was his understanding that defendant "didn’t want psychiatric mumbo jumbo, whatever you want to call it, because he felt it would paint him in a bad way."

Trial counsel explained that he then decided to present defendant’s mental capacity without the records and as a result decided to forgo obtaining them. Trial counsel claimed that he "stood to gain nothing by getting those records . . . unless [he] was headed towards [putting on] a psychiatric defense." Counsel further claimed: "And my feeling is and has been, and I’ve done it in many cases, is that you’re better off . . . without having so many experts on the witness stand and getting bogged up in that, and just giving the jury a good gut feeling." Thus, trial counsel sought to secure his client’s acquittal by demonstrating to the jury that his client was "not playing with a full deck" and arguing on summation that the police took advantage of him.

Trial counsel said he intended to convince the jury that defendant’s will was overborne by the police due to his mental history and the affects of the interrogation. According to trial counsel, he wanted to "build" this idea "in the minds of the jury" by demonstrating that defendant "had no work history," "was on SSI," "had a grade school education at the most," "was in special ed," "had some hospitalizations," and was someone "whose mind could be played with." Trial counsel sought to have this history introduced by defendant’s mother, who would discuss her son’s educational, institutional, and occupational history.

At the hearing, trial counsel admitted that he developed this defense approach without the full benefit of defendant’s psychiatric and government records. He stated that he never saw defendant’s psychiatric records or Social Security Administration records, and that he did not know the diagnosis contained in those records. Trial counsel also admitted that he did not get the records because he believed that he would have to turn them over to the People, even if he never introduced them at trial or presented a formal psychiatric defense.
"And you know, yes, the strategy was born in the blind without those [records], but I felt that number one, if I have the records, I got to turn them over. Number two, I don’t gain anything by having those records. The fact that he was — his history is what it was should have been good enough."

This is not simply a case of a failed trial strategy(see Baldi, 54 NY2d at 146 ["trial tactics which terminate unsuccessfully do not automatically indicate ineffectiveness"]). [*8]Rather, this is a case of a lawyer’s failure to pursue the minimal investigation required under the circumstances. Given that the People’s case rested almost entirely on defendant’s inculpatory statements, trial counsel’s ability to undermine the voluntariness of those statements was crucial. The strategy to present defendant’s mental capacity and susceptibility to police interrogation could only be fully developed after counsel’s investigation of the facts and law, which required review of records that would reveal and explain defendant’s mental illness history, and defendant’s diagnosis supporting his receipt of federal SSI benefits.

The People’s argument that the contested records would not have helped the defense, regardless of trial counsel’s choices, misconstrues the central issue in this case. The issue is not whether trial counsel’s choice to have certain documents excluded from the record constitutes a legitimate trial strategy, but whether the failure to secure and review crucial documents, that would have undeniably provided valuable information to assist counsel in developing a strategy during the pre-trial investigation phase of a criminal case, constitutes meaningful representation as a matter of law. The utter failure to obtain these documents constituted denial of effective assistance. "

Plaintiff starts a legal malpractice law suit, and then settles it for $ 40,000.  Later, he turns around and seeks to set aside a stipulation of discontinuance, general release, and hold-harmless agreement in the case.  In Rosin v Weinberg 2013 NY Slip Op 03981  Decided on June 5, 2013
Appellate Division, Second Department  plaintiff is unable to set aside the settlement.
 

"Here, the plaintiff sought to set aside a stipulation of discontinuance, general release, [*2]and hold-harmless agreement (hereinafter the settlement documents) on the grounds of unilateral mistake (see Yorker v Daniel Yorker, Ltd., 12 AD3d 506, 506; Long v Fitzgerald, 240 AD2d 971, 974; Matter of Goldman v Goldman, 201 AD2d 860, 861; William E. McClain Realty v Rivers, 144 AD2d 216, 218) and unconscionability (see Gillman v Chase Manhattan Bank, 73 NY2d 1, 10-12). In his complaint, the plaintiff essentially alleged that he was not aware that the $40,000 which the defendant gave him in exchange for, inter alia, discontinuing the underlying legal malpractice action consisted of escrow funds that already belonged to the plaintiff. The evidentiary material submitted by the defendant in support of his motion demonstrated that the plaintiff’s alleged unawareness of the source of the settlement funds was not a fact at all, and that there was no significant dispute regarding that allegation. Specifically, the defendant’s submissions conclusively demonstrated that the terms of the settlement documents were clear and unambiguous, that the settlement documents were reviewed by the plaintiff and his counsel and were executed by the plaintiff in his counsel’s office, and that the source of the $40,000 was readily apparent from the face of the settlement documents. "

Sadly for plaintiff, her case is now fully dismissed. It was earlier dismissed against her attorney.

  She alleges in Strujan v Head  2013 NY Slip Op 31154(U) May 24, 2013 Supreme Court, New York County Docket Number: 800029/2012 Judge: Eileen A. Rakower that her case arose from : "an incident in September 1997 in which plaintiff alleges she was stuck by a HIV positive needle, while working as a nurse technician at New Yolk University Hospital. Plaintiffs Complaint alleges that she “lost the [Workers’ Compensation]  case for disability and economic loss due to the all [sic] defendants [sic] false affirmation under oath.”   As alleged in the Complaint, Dr. Head was a medical examiner who evaluated Plaintiff on behalf of the insurance carrier, prepared a medical report, and provided testimony at her Worker’s’s Compensation appeal.

Plaintiff alleges that Dr. Head provided false testimony at her proceeding based on his erroneous medical report, and as a result, an adverse Workers’ Compensation determination was rendered against her.  Plaintiff’ s first cause of action alleges “civil conspiracy to commit humiliation,
defamation [sic]” against all defendants, asserting that Dr. Head entered into a conspiracy with other co-defendants in order to “sabotage [her] Worker Compensation case.” Civil conspiracy is not recognized in New York as an independent tort, but may be viable if connected with other actionable torts. (see Alexander & Alexander of New York, Inc. v. Fritzen, 68 NY2d 968 [1986).

To the extent that Plaintiff is asserting civil conspiracy to commit defamation, the claim is time barred by the one year statute of limitations. (CPLR 215(3). The alleged defamatory statements were made in 2009, and Plaintiff did not commence this action until January 2012, after the statute of limitations expired, To the extent that Plaintiff’s civil conspiracy claim is predicated on a fraud, while Plaintiff alleges fraud in her fourth cause of action against Kosovich and Friedman, she does not assert a fraud claim as against Dr. Head.
 

While Plaintiff asserts a breach of contract and a breach of implied covenant of good faith and fair dealing against Dr. Head, there is no allegation of the existence of a contract or contractual relationship between Plaintiff and Dr. Head nor any allegation that Dr. Head promised to obtain a specific result and failed to do so. See generally Forman v. Guardian Life Ins. Co. of America, 2010 6606, “2 [ 1st Dept. 2010); Fredinand v. Crecca & Blair, 5 AD. 3d 538, 539 [2n‘Dept 2004).

Plaintiffs “breach of trust,” “breach of standard of care,” negligence, gross negligence / recklessness, and medical malpractice claims against Dr. Head also failed to state a claim. There are no allegations that Dr. Head provided treatment to Plaintiff, nor has Plaintiff served a certificate of merit along with her complaint, as required by CPLR 30 12-a. Furthermore, any claim for medical malpractice based on Dr. Head’s medical evaluation of Plaintiff in March 2009 would be barred by the 2.5 year statute of limitations that applies to medical malpractice claims, as Plaintiff commenced this action in January 2012, after the statute of limitations had run.

Furthermore, even accepting the allegations as true, the (our corners of the  Complaint also fail to state claim for economic loss, intentional “mental scars and emotional distress”, unlawful trade practice under the Consumer Protection Procedure Act, perjury; and obstruction of justice."

The First Department delved into a legal malpractice case with several unusual affirmative defenses.  In Whitney Group, LLC v Hunt-Scanlon Corp. 2013 NY Slip Op 03929  Decided on May 30, 2013  Appellate Division, First Department  we see affirmative defenses of "in pari delicto", comparative fault and a question of whether there must be joint and several liability with other defendants.
 

The underlying case, one corporation against another arose after the CFO began causing the plaintiff corporation to lend money to the defendant corporation.  Twice, the CFO asked Jaspan Schlesinger, outside corporate counsel for plaintiff for advice.  They advised him that the loans were improper but did nothing more.

"The record presents an issue of fact whether, as the Jaspan defendants contend, plaintiff knew as of January 2006 that loans had been extended to Hunt-Scanlon and did nothing to prevent Sussman from issuing additional loans, and therefore whether the Jaspan defendants’ failure to notify plaintiff of the loans in February 2007 was a proximate cause of plaintiff’s losses (see e.g. AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 435-436 [2007]; GUS [*2]Consulting GmbH v Chadbourne & Parke LLP, 74 AD3d 677, 679 [1st Dept 2010], lv denied 16 NY3d 702 [2011]). Thus, the motion court properly denied the Jaspan defendants’ motion for summary dismissal of the plaintiff’s malpractice claim. It also correctly held that "[t]he apportionment of liability among alleged tortfeasors is a matter for trial" (Greenidge v HRH Constr. Corp., 279 AD2d 400 [1st Dept 2001]).

Turning to the Jaspan defendants’ affirmative defenses, we find that there is a question of fact as to whether the Jaspan defendants have established that the doctrine of in pari delicto defeats plaintiff’s claims (see Kirschner v KPMG LLP, 15 NY3d 446, 466 [2010]). As already noted, whether plaintiff knew of Sussman’s conduct and allowed him to continue loaning monies for several years remains a question of fact. Further, the Jaspan defendants allege that plaintiff received allegedly significant and substantial benefits during the time that Sussman made the unauthorized loans. Plaintiff disputes this claim, but failed to establish as a matter of law, that Sussman acted solely for his own or Hunt-Scanlon’s purposes, totally abandoning plaintiff’s interests. Plaintiff therefore failed to demonstrate that the adverse interest exception to the doctrine of in pari delicto applies (Center v Hampton Affiliates, Inc., 66 NY2d 782, 784-785 [1985] [insufficient to allege only that agent had a conflict of interest or was not acting primarily for the principal]; Concord Capital Mgt., LLC v Bank of Am., N.A., 102 AD3d 406, 406 [1st Dept 2013] [quoting Kirschner, supra at 468 (" So long as the corporate wrongdoer’s fraudulent conduct enables the business to survive — to attract investors and customers and raise funds for corporate purposes, — ‘ the adverse interest exception does not apply")]).

However, the Jaspan defendants’ affirmative defenses seeking to bar or reduce plaintiff’s damages based on plaintiff’s alleged comparative fault must be dismissed because plaintiff’s alleged failure to discover or prevent ongoing fraud by its fiduciary, Sussman, did not prevent or interfere with the Jaspan defendants’ performance of their own professional duties to plaintiff (see National Sur. Corp. v Lybrand, 256 AD 226, 235-236 [1st Dept 1939]; see also Collins v Esserman & Pelter, 256 AD2d 754, 757 [3d Dept 1998] [although the record was "replete with evidence" that the company’s bookkeeper was able to exploit the lack of internal controls to embezzle from the company, none of this interfered with the defendant accounting firm’s ability to complete the review for which it had been hired to perform; comparative fault was not applicable]).

To permit an affirmative defense of comparative negligence in a legal malpractice case, there must be a showing that the client did or did not do something that hindered the law firm from performing its duties toward its client. The Jaspan defendants’ reliance on cases addressing the application of comparative negligence in the context of alleged accountant malpractice, or breach of fiduciary duty, are not squarely on
point (see e.g. Hall & Co. v Steiner & Mondore, 147 AD2d 225, 227-228 [3d Dept 1989]; Lippes v Atlantic Bank of N.Y., 69 AD2d 127 [1st Dept 1979]). Here, none of the examples of plaintiff’s alleged internal weaknesses could rationally lead a factfinder to conclude that plaintiff interfered with the Jaspan defendants’ ability to carry out their fiduciary duties toward plaintiff. Thus, on the extant record, there is no valid line of reasoning that could lead rational people to conclude [*3]plaintiff was negligent, and that such negligence was a substantial factor in causing the losses attributed to the Jaspan defendants’ negligence. "

We’re not exactly sure what type of fraud took place here.  It seems to be centered around a merger and a voting agreement that injured the Learning Annex in Learning Annex, L.P. v Blank Rome LLP  2013 NY Slip Op 03921  Decided on May 30, 2013   Appellate Division, First Department 
Blank Rome seems to have represented the "fraudsters."  Beyond that, we can’t say.  However, as always, privity is king, and seems to be the most important qualification for legal malpractice.  Sure, collusion, fraud, malice and other events can give rise to non-privity legal malpractice, but its very very rare.

"Plaintiff failed to state a cause of action for aiding and abetting fraud against defendant law firm and the individual defendant, plaintiff’s former attorney. The alleged conduct, defendants’ failure to disclose a voting agreement entered into between non-parties at a time when defendants did not represent plaintiff and to subsequently highlight the voting agreement’s existence, does not constitute "substantial assistance" in the
commission of the alleged underlying fraud (see Stanfield Offshore Leveraged Assets, Ltd. v Metropolitan Life Ins. Co., 64 AD3d 472, 476 [1st Dept 2009], lv denied 13 NY3d 709 [2009]; Liquidation of Union Indem. Ins. Co. of New York v Spira, 289 AD2d 173 [1st Dept 2001], lv dismissed 98 NY2d 672 [2002]). The claim that defendants provided routine legal services to the alleged fraudsters is likewise insufficient to establish a claim for aiding and abetting fraud (see CRT Investments, Ltd. v BDO Seidman, LLP, 85 AD3d 470, 472 [1st Dept 2011][citing Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1 [1st Dept 2008]).

The amended complaint does not allege a claim for legal malpractice in connection with defendants’ representation of the alleged fraudsters in a merger transaction. Even if such a claim were alleged, it would fail to state a cause of action in the absence of an attorney-client relationship (see Federal Ins. Co. v North Am. Specialty Ins. Co., 47 AD3d 52 [1st Dept 2007]; Linden v Moskowitz, 294 AD2d 114, 115 [1st Dept 2002], lv denied 99 NY2d 505 [2003]) or a relationship approaching privity or other special circumstance (see Good Old Days Tavern, Inc. v Zwirn, 259 AD2d 300 [1st Dept 1999]). The legal malpractice claim arising out of a subsequent transaction fails as speculation as to what plaintiff would have done, had it been aware of the [*2]voting agreement, and the possibility that another party may pursue a claim against plaintiff in the future, does not support a claim for causally related damages (see Brooks v Lewin, 21 AD3d 731 [1st Dept 2005], lv denied 6 NY3d 713 [2006]). "

The right to sue ones lawyer can end after a period of time, called the statute of limitations.  The statute does not start to run until there has been a "mistake" by the attorney, but that time can be tolled by the continuous representation doctrine.  When the attorney-client relationship ends is the subject of endless litigation.

One way to end the attorney-client relationship is to act in a manner incompatible with a relationship of trust and confidence.  That’s what happened in Aseel v Jonathan E. Kroll & Assoc., PLLC   2013 NY Slip Op 03806   Decided on May 29, 2013   Appellate Division, Second Department.
 

"The statute of limitations for legal malpractice is three years (see CPLR 214[6]). The limitations period may be tolled by the continuous representation doctrine " where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim’" (Zorn v Gilbert, 8 NY3d 933, 934, quoting McCoy v Feinman, 99 NY2d 295, 306). "For the doctrine to apply, there must be clear indicia of an ongoing, continuous, developing, [*2]and dependent relationship between the client and the attorney’" (Piliero v Adler & Stavros, 282 AD2d 511, 512, quoting Luk Lamellen U. Kupplungbau GmbH v Lerner, 166 AD2d 505, 506). "One of the predicates for the application of the doctrine is continuing trust and confidence in the relationship between the parties" (Luk Lamellen U. Kupplungbau GmbH v Lerner, 166 AD2d at 507; see Coyne v Bersani, 61 NY2d 939; Piliero v Adler & Stavros, 282 AD2d at 512).

Here, contrary to the plaintiff’s sole contention on the issue of timeliness, the Supreme Court did not err in concluding that the relationship necessary to invoke the continuous representation rule ceased to exist by November 5, 2007, when the plaintiff surreptitiously removed his file from the defendants’ office. By so removing the file, the plaintiff evinced his lack of trust and confidence in the parties’ relationship, and his intention to discharge the defendants as his attorneys (see generally Fleyshman v Suckle & Schlesinger, PLLC, 91 AD3d 591, 592; cf. Piliero v Adler & Stavros, 282 AD2d at 512). Accordingly, because, contrary to the plaintiff’s contention, the relationship necessary to invoke the continuous representation doctrine terminated more than three years prior to the commencement of this action, the Supreme Court properly granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a) to dismiss so much of the complaint as alleged legal malpractice against the defendants Kroll, Moss and Kroll, LLP, Martin N. Kroll, and Jonathon E. Kroll (see Fleyshman v Suckle & Schlesinger, PLLC, 91 AD3d at 592; Rupolo v Fish, 87 AD3d 684; Piliero v Adler & Stavros, 282 AD2d at 512). Accordingly, because, contrary to the plaintiff’s contention, the relationship necessary to invoke the continuous representation doctrine terminated more than three years prior to the commencement of this action, the Supreme Court properly granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a) to dismiss so much of the complaint as alleged legal malpractice against the defendants Kroll, Moss and Kroll, LLP, Martin N. Kroll, and Jonathon E. Kroll (see Fleyshman v Suckle & Schlesinger, PLLC, 91 AD3d at 592; Rupolo v Fish, 87 AD3d 684; Piliero v Adler & Stavros, 282 AD2d at 512). "

Sometimes, side issues in a legal malpractice seem to predominate, and even lead to appellate proceedings.  One might think that a frank discussion of whether or not the attorney departed from good practice would be in everyone’s interest, but in Corrieri v Schwartz & Fang, P.C.   2013 NY Slip Op 03797   Decided on May 28, 2013   Appellate Division, First Department  the case is all about trying to push plaintiff’s counsel out of the picture.
 

"Defendants seek to defend against plaintiffs’ claims of negligent representation in a probate and accounting proceeding by compelling discovery of privileged communications between plaintiffs and the counsel who substituted for defendants in that proceeding and who represents plaintiffs in this legal malpractice action. The court properly denied the motion to compel because there is no merit to defendants’ argument that the filing of this malpractice action placed the subject matter of the privileged communications "at issue." The invasion of the privilege is not required to determine the validity of plaintiffs’ malpractice claim, and the application of the privilege does not deprive defendants of information vital to their defense (see Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 62 AD3d 581 [1st Dept 2009]; Veras Inv. Partners, LLC v Akin Gump Strauss Hauer & Feld LLP, 52 AD3d 370 [1st Dept 2008]). Nor was there a partial, selective disclosure of privileged communications such that the privilege was waived (see Orco Bank v Proteinas Del Pacifico, 179 AD2d 390 [1st Dept 1992]).

The court properly denied defendants’ motion to disqualify plaintiffs’ counsel, as [*2]defendants failed to show that counsel’s testimony would be necessary to establish the claim or defense (see East Forty-Fourth St. LLC v Bildirici, 58 AD3d 542 [1st Dept 2009]). "

Plaintiff hired attorneys to help transfer the rights and title to a movie being produced.  From there, all went wrong, and at this time, plaintiff may not even own the film anymore.  How did this happen, and why was the legal malpractice case lost?  In Candela Entertainment, Inc. v Davis & Gilbert, LLP   2013 NY Slip Op 50835(U)    Decided on May 16, 2013   Supreme Court, New York County, Judge Bransten determines that there is no privity for the individual plaintiff and no causation for the corporate plaintiff.
 

"According to the Complaint, Plaintiff Candela Entertainment, Inc. retained Defendant Davis & Gilbert, LLP ("D & G") in October 2007 to assist in financing and transferring ownership of a movie entitled "Dance Cuba." (Cmpl. ¶¶ 1,3.) Since 1999; Plaintiff [*2]Cynthia Newport has invested nearly $4,500,000 in "Dance Cuba" through her non-profit organization, Illume Productions, Inc. ("Illume"). (Cmpl. ¶¶ 1, 7.) In 2005, Newport formed Candela together with Curb Gardner, with both serving as co-presidents. (Affidavit of Mary M. Luria ("Luria Aff."), Ex. 1 at 1-2.) Candela retained D & G in order to, specifically, transfer ownership of "Dance Cuba" from Illume to Candela, as well as to assist in "completion of the film with new investors." (Affidavit of Cynthia Newport ("Newport Aff.") ¶ 2.) Mary M. Luria is the partner at D & G who was responsible for the representation. (Cmpl. ¶ 17.) The retainer agreement had as its signature line, "Agreed to and Accepted Candela Entertainment, Inc.," and all invoices from D & G were sent to Candela, "attn: [Co-President] Curb Gardner II." (Affirmation of Vincent J. Syracuse ("Syracuse Affirm."), Ex. 4 at 3; Newport Aff. Ex. F at 1.)

There are two transactions relevant to this motion, both occurring in October 2007. In the first transaction, Illume assigned all rights and agreements related to "Dance Cuba" to Candela in exchange for Candela assuming a portion of Illume’s outstanding debts. (Newport Aff. Ex. I at 3, 5, 9-11.) The second transaction was a secured loan by Factory Pond, LLC ("Factory Pond") to Candela, with the use of "Dance Cuba" as loan collateral and with Newport and Gardner providing personal guarantees of the debt. (Newport Aff. Ex. E.)

On behalf of D & G, Luria revised and drafted several documents for both transactions, including a bill of sale, a trademark assignment, a Candela/Factory Pond deal memorandum and an "Assignment and Assumption Agreement" between Illume and Candela. [FN2] (Newport Aff. ¶ 9.) However, D & G was not the sole attorney consulted during these transactions. Candela also retained an attorney named Kojo Bentil, who drafted a promissory note and a security agreement for the Factory Pond transaction. (Newport Aff. ¶ 9, Ex. D.) In addition, at a July 2008 meeting regarding "Illume tax issues," attorneys from Patterson Belknap Webb & Tyler LLP were consulted. (Newport Aff. Ex. L.)

"Relevant to the instant litigation, significant portions of the "Dance Cuba" film incorporate copyrighted materials for which Illume had signed licensing agreements. (Newport Aff. ¶ 2.) These licensing agreements required that Illume obtain consent from the licensors before any transfer of intellectual property rights could be made. (Newport Aff. ¶ 3.) While there is a dispute as to whose duty it was to obtain the consents, the Complaint alleges that no consents to assignment were ever obtained from the licensors. (Cmpl. ¶ 8.) The Complaint further alleges that the Defendant’s failure to obtain or to [*3]advise on obtaining the necessary consents to any transfer of copyrighted material in "Dance Cuba" created a cloud on the film’s title that prevents Plaintiffs from seeking new investors and completing the film. (Cmpl. ¶ 20; Newport Aff. ¶ 3.)

Plaintiffs commenced this action on December 1, 2011, asserting that Defendant’s "failures to properly understand and advise Plaintiffs as to the structure, the transactions and the effect of the documents utilized in the transactions," constitute (i) negligence, (ii) breach of contract, (iii) breach of fiduciary duties, and (iv) negligent misrepresentation. (Cmpl. ¶¶ 8, 23, 27, 36, 40.) Defendant now seeks dismissal of the Complaint in its entirety. Plaintiffs oppose. "

"As a threshold matter, to maintain a cause of action for legal malpractice, the plaintiff must plead the existence of an attorney-client relationship. See, e.g., AG Capital Funding Partners, L.P. v. State St. Bank & Trust Co., 5 NY3d 582, 595 (2005) (affirming dismissal of legal malpractice claim for failure to plead facts showing actual privity, near privity, or an exception to privity). In order to defeat a motion to dismiss, a party must plead facts showing the privity of an attorney-client relationship, or a relationship so close as to approach privity. Cal. Pub. Employees Ret. Sys. v. Shearman & Sterling, 95 NY2d 427, 434 (2000) (affirming dismissal of legal malpractice claim for failure to plead actual privity or near privity). To show "near privity," a plaintiff must allege that the attorney was aware that its services were used for a specific purpose, that the plaintiff relied upon those services, and that the attorney demonstrated an understanding of the plaintiff’s reliance. Cal. Pub. Employees, 95 NY2d at 434.

Defendant moves to dismiss based on CPLR 3211(a)(1) and (7), arguing that documentary evidence refutes the Complaint’s claims of privity between Newport and D & G, and thus Plaintiffs fail to state a cause of action for legal malpractice. [FN3] Plaintiff Newport argues that she was in privity or "near privity" with D & G because she (i) personally guaranteed the Factory Pond loan to Candela, (ii) signed a promissory note with Candela, and (iii) communicated directly with Defendant D & G. (Newport Aff. ¶ 19; Plaintiffs’ Memorandum in Opposition to Motion to Dismiss ("Pls.’ Br.") 15.) Defendant argues that there can be no privity because the retainer agreement is addressed solely to Candela and closing documents were signed by Newport on behalf of Candela. (Defendant’s Memorandum in Support of Motion to Dismiss ("Def’s Br.") 16.) "

"Here, despite Newport’s personal guarantee of corporate debt and direct communication with D & G, the retainer agreement states, "Agreed to and Accepted Candela Entertainment, Inc.," and at least two other attorneys were involved. (Syracuse Affirm. Ex. 4 at 3; Newport Aff. ¶ 9, Exs. D, L.) In addition, all invoices from D & G were sent to Candela, "attn: [Co-President] Curb Gardner II." (Newport Aff. Ex. F at 1.) Therefore, as in Griffin, since the Complaint does not plead facts showing that D & G performed any task specifically to benefit Newport as an individual apart from the corporation, the Complaint fails to establish that an attorney-client relationship existed between Newport and D & G. "
 

"Here, according every possible inference favorable to Plaintiffs, the Complaint fails to allege facts tending to show that, but for Defendant’s alleged negligence in failing to properly counsel Plaintiffs on the ramifications of the two transactions or to advise Plaintiffs on the need to obtain consent from various licensors, Plaintiffs would have secured the requisite licensor consents that are mandatory for any transfer of significant portions of "Dance Cuba," and that Plaintiffs would still own the "Dance Cuba" film.

The damage that Candela suffered as alleged in the Complaint is a cloud on title to "Dance Cuba," such that Candela can no longer seek investors for the film and may not even own the film. (Cmpl. ¶¶ 8, 19.) Therefore, it is incumbent upon Candela to plead that but for the Defendant’s failure to properly advise on the various transactions and the need to obtain consent agreements, Candela would have full and clear title to the "Dance Cuba" film.

Plaintiffs’ claims fail because they do not plead that the consents would have been given, even if D & G had instructed Plaintiffs to obtain the consents or structured and documented the transactions differently. Nor do Plaintiffs claim that they would have foregone the transactions had they been properly advised. In fact, there are several reasons that obtaining the consents would have been unlikely. First, as stated in Exhibit A of Newport’s Affidavit, the original license agreements were the result of "highly personal negotiations between the granting entity/individual and Cynthia Newport," and [*8]were not boilerplate documents. (Newport Aff. Ex. A at 1.) Further complicating the consent issue, (i) payment for the licenses may have been "based on Illume’s status as a not-for-profit;" (ii) the original "Dance Cuba" film was made "under a series of Treasury Department licenses granted to Illume, a not-for-profit organization;" and (iii) the Cuban embargo "prevents most US companies from realizing a ‘profit’ ‘on (sic) any ‘product’ made under such a license." (Newport Aff. Ex. A at 1.) Finally, the Plaintiffs state that the "Dance Cuba" film "involved huge careers, personal and business relations and reputations, and impacted the international and political relations that relate to the project." (Pls.’ Br. at 13.) Plaintiffs failed to plead that all of these factors would have aligned such that, but for D & G’s failure to properly advise Candela, all of the necessary consents would have been given. See Eighth Ave. Garage Corp. v. Kaye Scholer LLP, 93 AD3d 611, 612 (1st Dep’t 2012) (holding that "plaintiffs failed to demonstrate that they would have sold the subject garage but for defendants’ alleged malpractice"). "