A basic rule of legal malpractice is that an attorney may not be granted a fee by a court or tribunal if there is legal malpractice present.  Since an attorney may not obtain a fee if there has been legal malpractice, it follows, ipso facto, that if a court or a tribunal grants a fee to an attorney, then there can have been no legal malpractice.  For the most part, it does not matter whether the question of legal malpractice has been raised or not.  So it goes in Bob v Cohen   2013 NY Slip Op 02499
Decided on April 16, 2013   Appellate Division, First Department.  In Bob the attorneys asked for a fee in the WC proceedings, and then used that fee as a defense to legal malpractice.
 

"On the merits, defendants were entitled to dismissal of this legal malpractice action commenced by their former client on res judicata grounds. The Workers Compensation Board’s award of legal fees to defendants, imposed as a lien against the ultimate award of compensation to plaintiff (see Workers’ Compensation Law § 24), precludes plaintiff’s present claim that defendants represented him negligently, a claim that could have been raised in opposition to defendants’ fee application (see e.g. Lusk v Weinstein, 85 AD3d 445 [1st Dept 2011], lv denied 17 NY3d 709 [2011]; Zito v Fischbein Badillo Wagner Harding, 80 AD3d 520 [1st Dept 2011]). "
 

In this subrogation case, an insurance company has successfully pleaded fraud and legal malpractice.  The insurance company plaintiff proceeded in the subrogation and alleged that legal malpractice was committed in failing to pursue a default judgment.  They claimed fraud when the law firm billed for making a motion for a default judgment when it did not. So, in Vermont Mut. Ins. Co. v McCabe & Mack, LLP   2013 NY Slip Op 02392   Decided on April 10, 2013   Appellate Division, Second Department the AD found:

 "However, the Supreme Court erred in granting that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the causes of action alleging fraud. "To properly plead a cause of action to recover damages for fraud, the plaintiff must allege that (1) the defendant made a false representation of fact, (2) the defendant had knowledge of the falsity, (3) the misrepresentation was made in order to induce the plaintiff’s reliance, (4) there was justifiable reliance on the part of the plaintiff, and (5) the plaintiff was injured by the reliance" (Pace v Raisman & Assoc., Esqs., LLP, 95 AD3d 1185, 1188-1189; see Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553; New York Univ. v Continental Ins. Co., 87 NY2d 308). Here, the complaint alleged that the defendants committed fraud by misrepresenting that they "made a motion for a default judgment" when they "never made, filed, or drafted" such a motion, that the plaintiff relied on the misrepresentation, and that the defendants billed the plaintiff for drafting the motion. Those allegations were sufficient to state a cause of action to recover damages for fraud (see Guggenheimer v Ginzburg, 43 NY2d at 275; Rabos v R & R Bagels & Bakery, Inc., 100 AD3d 849, 853).

The defendants’ alternate ground for dismissal of the causes of action alleging fraud, that those claims were duplicative of the causes of action alleging legal malpractice (see Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d 539, 545), is without merit. The evidence submitted by the defendants does not establish that the plaintiff sustained no other damages, separate and apart from those sought as a result of the alleged legal malpractice, as a result of the defendants’ alleged fraudulent conduct (see Guggenheimer v Ginzburg, 43 NY2d at 274-275; East Hampton Union Free School Dist. v Sandpebble Bldrs. Inc., 66 AD3d 122, affd 16 NY3d 775; Fleming v Kamden Props., LLC, 41 AD3d 781). Where, as here, tortious conduct independent of the alleged malpractice is alleged, a motion to dismiss a cause of action as duplicative is properly denied (see Lax v Design Quest N.Y. Ltd., 101 AD3d 431; Rupolo v Fish, 87 AD3d 684, 686).

Accordingly, the Supreme Court should have denied that branch of the defendants’ motion which was to dismiss the causes of action alleging fraud.

If one reads enough legal malpractice cases, there are interesting overlaps.  One such overlap, with surprising results came up today.  in Angeles v Aronsky   2013 NY Slip Op 02454   Decided on April 11, 2013   Appellate Division, First Department  we see the following: "For a claim for legal malpractice to be successful, "a plaintiff must establish both that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession which results in actual damages to a plaintiff and that the plaintiff would have succeeded on the merits of the underlying action but for’ the attorney’s negligence" (AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007] [internal citation omitted]). A client is not barred from a legal malpractice action where there is a signed "settlement of the underlying action, if it is alleged that the settlement of the action was effectively compelled by the mistakes of counsel" (Garnett v Fox, Horan & Camerini, LLP, 82 AD3d 435 [1st Dept 2011] [internal quotation marks omitted], quoting Bernstein v Oppenheim & Co., 160 AD2d 428, 430 [1st Dept 1990]). "

It has been the law in NY for some time that a settlement of the underlying action that has been effectively compelled does not bar a subsequent legal malpractice action.  The overlap we speak of was created by a second decision in Garnett v Fox, Horan & Camerini, LLP   2013 NY Slip Op 50560(U)   Decided on April 5, 2013   Supreme Court, New York County   Kern, J.   Here, the Garnett claims were ultimately dismissed.  "Plaintiff commenced the instant action asserting, among other things, a claim for legal malpractice against defendant in relation to defendant’s representation of Boylan International, Inc. ("Boylan International") in an underlying rent non-payment action. Defendant now moves for an order granting it summary judgment and dismissing plaintiff’s complaint. For the reasons set forth below, defendant’s motion is granted."

"On or about October 22, 2008, plaintiff commenced the instant action. Plaintiff’s initial complaint contained five causes of action: (1) legal malpractice in failing to properly prepare for trial; (2) legal malpractice in failing to properly conduct the trial; (3) legal malpractice in negotiating and coercing the settlement; (4) legal malpractice in acting under a clear conflict of interest in coercing the settlement; and (5) fraud in attempting to dissuade Boylan International from taking action to vitiate the settlement. Fox Horan moved to dismiss the initial complaint and the court granted its motion. However, it also granted leave to amend the first three causes of action for legal malpractice. Boylan International then submitted its Amended Complaint and Fox Horan again moved to dismiss. The court granted Fox Horan’s motion and Boylan International appealed. On appeal, the Appellate Division First Department reversed the lower court’s dismissal, reinstated the malpractice claims and remanded the case for response, discovery and trial. Fox Horan has now made the instant motion for summary judgment.On a motion for summary judgment, the movant bears the burden of presenting sufficient evidence to demonstrate the absence of any material issues of fact. See Alvarez v. Prospect Hosp., 68 NY2d 320, 324 (1986). Once the movant establishes a prima facie right to judgment as a matter of law, the burden shifts to the party opposing the motion to "produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which he rests his claim." Zuckerman v. City of New York, 49 NY2d 557, 562 (1980). However, "mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient" to defeat summary judgment. Id. "

Representation of clients may be limited or general.  An attorney-client relationship is considered to be general unless it is specifically limited by a retainer agreement.  That retainer agreement had best be very specific, and it should set the limits quite clearly.  If it does not, then the attorney can be held responsible for all acts that should have been performed, even if outside the scope of the "limited" retainer.

In Superior Tech. Solutions, Inc. v Rozenholc ;  2013 NY Slip Op 30690(U)  April 1, 2013
Sup Ct, New York County  Docket Number: 100856/12  Judge: Joan A. Madden we see one such example.  The attorney says that he was retained solely for  potential litigation with the commercial landlord.  The client then, after some representation, fails to renew the lease.  Is the attorney responsible?

"However, the issue of whether Rozenholc had a duty to renew the plaintiffs’ lease is different from whether the plaintiffs’ orally renewed their lease, and this issue was not addressed in the prior two actions. In the New York Supreme Court decision dated May 1 1,20 1 1 , the court merely determined that Lee’s alleged attempt to orally renew the lease was insufficient under the terms of the lease. The Bankruptcy Court similarly discussed the validity of Lee’s oral lease renewal. A determination of whether the lease renewal was within Rozenholc‘s duties was not made within the course of either litigation, so the doctrine of law does not apply.

Under this standard, the complaint adequately states a cause of action for legal malpractice based on allegations that Rozenholc failed to advise the plaintiffs of the date that the renewal option had to be exercised? and/or failed to exercise the renewal option on behalf of plaintiffs and that but for Rozenholc’s negligence, Superior would not have become holdover tenant, subject to an eviction proceeding and ineligible for a buyout offer, and therefore damaged.

The court also rejects Rozenholc’s argument that he is not the proximate cause of plaintiffs’ damages due to successor counsel’s liability. While it has been held that predecessor counsel’s negligence may not be the proximate cause of plaintiffs’ alleged damages when subsequent counsel had a sufficient opportunity to protect plaintiffs’ rights (E& Perks v. Lauto & Garabedian, 306 A.D.2d 261,262 (2nd Dept 2003), this rule is inapplicable here, as the right to renew the relevant lease expired on October 3 1,20 10, before the subsequent counsel was retained ."

Finally, the documentary evidence and in particular the retainer agreement does not establish that the legal malpractice action is insufficient as a matter of law. Specifically, the retainer agreement which describes Rozenholc’s services to include which includes bringing actions to protect plaintiffs’ interest in the lease and representing plaintiffs in negotiations with the landlord arguably can be interpreted to include exercising plaintiffs’ renewal option under the lease."

Hearing that your legal malpractice case is "unavailing" is terrifying.  Nevertheless, this case was dismissed, appealed, reversed, remanded, and immediately dismissed again, this time on summary judgment.  Garnett v Fox, Horan & Camerini, LLP  2013 NY Slip Op 30703(U)  April 5, 2013  Sup Ct, New York County  Docket Number: 114079/2008  Judge: Cynthia S. Kern is the story of a business gone bad, with crippling rent that it could no longer handle.

"Plaintiff commenced the instant action asserting, among other things, a claim for legal malpractice against defendant in relation to defendant’s representation of Boylan International,
Inc. (“Boylan International”) in an underlying rent non-payment action. Defendant now moves
for an order granting it summary judgment and dismissing plaintiffs complaint. For the reasons
set forth below, defendant’s motion is granted.

Over the years, Boyland International failed to make payments required by the Lease and
subsequent non-payment proceedings were initiated, including the Underlying Action herein at
issue. The Underlying Action was brought on or about August 2003, On or about April 2 1,
2004, Boylan International retained Fox Horan to represent it in the Underlying Action pursuant
to a written retainer (the “Retainer Agreement”). At that time, Boylan International was already
in default and facing eviction. However, after retaining Fox Horan, a stipulation was entered into
which, among other things, allowed Boylan International to Answer and assert an affirmative
defense. During the course of the litigation, the landlord’s attorney became ill and the case was
marked off the calendar for approximately two years. During this period, Boylan International
did not pay rent or additional rent and the arrears grew to approximately $675,000.

During trial, Fox Horan presented expert testimony of Gary Goldman in order to establish
that Boylan International should not be liable for $243,897 of the $276,000 in real estate tax
arrears based on the New York Supreme Court’s holding in Blacktar Publishing Company v.
460 ParkAssociates, 137 Misc.2d 414 (N.Y. Sup. Ct. 1987) (the“Blackstar defense”). In
Blackstar, the court found that a tax escalation clause in a commercial lease requiring the tenant
to pay as additional rent a percentage of real estate taxes for every year during the lease did not
necessarily require the tenant to pay for any increased tax assessments which resulted from
extraordinary improvements to the premises that were not contemplated by the parties at the time
the lease was executed. See id. Thus, both parties agree that the testimony of Mr. Goldman was
crucial as this was its only viable defense to the non-payment of the real estate taxes. Fox Horan
tried to offer various exhibits to corroborate the testimony of Mr. Goldman but the Court refused to admit these exhibits based on objections by opposing counsel. Both parties herein agree that
these exhibits were “improperly precluded.” After Mr. Goldman finished his testimony, Fox
Horan called Ms. Boylan to testify. While on the stand, after having been sworn in, Ms. Boylan
addressed the Judge directly before counsel from Fox Horan had an opportunity to ask any
questions. The Judge then went off the record and a settlement was reached (the “Stipulation of
Settlement”).

In the instant action, the defendant has presented sufficient evidence demonstrating the
absence of any material issues of fact warranting a grant of summary judgment in its favor. A
prima facie case for legal malpractice requires a plaintiff to establish “that the defendant attorney
failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member
of the legal profession which results in actual damages to a plaintiff, and that the plaintiff would
have succeeded on the merits of the underlying action ‘but for’ the attorney’s negligence.” Lsder
v. Spigel, 9 N.Y.3d 836 (2007) (quoting Am-Base Corp. Y: Davis Polk & Wardwell, 8 N.Y.3d 6
 

Specifically, when the underlying action was settled, a plaintiff must show that
but for its attorney’s actions it would not have entered into the settlement or it would have been
entitled to a more favorable settlement. See Rau v. BorenkofJ; 262 A.D.2d 388,389 (lst Dept
1999); See Rogers v. Ettinger, 163 A.D.2d 257 (lst Dept 1990). Thus, in order to succeed “on a
motion for summary judgment to dismiss the action, a defendant must proffer admissible
evidence establishing that the plaintiff is unable to prove at least one of the essential elements of
his or her case.” E. Suydam v. J 0 ’Neill, 276 A.D.2d 549 (2ndD ept 2000).

Legal malpractice plaintiffs argue that defendant attorney handled the case badly, and then go on to say that if the attorney had done "x", there would have been a better or different outcome.  Defendant argues that this is all "speculation."  If you were the Court, how would you decide?  Remember that legal malpractice analysis is always a comparison of how a "hypothetical" judgment, which might have been reached had the attorney done "x" versus the actual outcome.

In Citidress II Corp. v Tokayer  2013 NY Slip Op 02369   Decided on April 10, 2013   Appellate Division, Second Department we see the AD taking a position that "Speculative contentions about what might have happened had the defendant attorney (hereinafter the defendant) taken a different approach in litigating a case on behalf of the plaintiff were not sufficient to support the plaintiff’s allegations of legal malpractice (see Humbert v Allen, 89 AD3d 804; Dempster v Liotti, 86 AD3d 169, 180; Wald v Berwitz, 62 AD3d 786)."

Isn’t all legal malpractice "speculation" about what would have happened if the attorney had done "x" and whether the failure to do "x" was a departure?

One of the cornerstones of legal malpractice law is that any hypothetical judgment that plaintiff should have received must have been collectible.  If defendant had filed a bankruptcy petition, or there was no insurance and no assets, then any hypothetical judgment that the attorneys did not obtain would not have been collectible, hence, there are no actual and ascertainable damages in the legal malpractice.  Example:  a judgment proof person negligently breaks your leg.  Whom would you have successfully sued and collected from?  If the answer is "nobody" then you do not have a good legal malpractice case.

In New York, the four departments disagree with each other over who has the burden of proof of collectibility.  In the Second and Fourth Departments, its plaintiff.  In the First Department, its defendant.  Lindenman v Kreitzer  2004 NY Slip Op 02498 [7 AD3d 30] ; April 6, 2004
Appellate Division, First Department is the landmark case.  "To the extent that Larson v Crucet (105 AD2d 651 [1984]) holds that proof of the collectibility of the underlying judgment is an essential element of the plaintiff’s cause of action for legal malpractice, we overrule that decision.

We further find that, where relevant, the issue of noncollectibility should be treated as a matter constituting an avoidance or mitigation of the consequences of the attorney’s malpractice (see e.g. Jourdain v Dineen, 527 A2d 1304, 1306 [Me 1987]) and the erring attorney should bear the inherent risks and uncertainties of proving it (see Kituskie v Corbman, 452 Pa Super 467, 474, 682 A2d 378, 382 [1996], affd 552 Pa 275, 714 A2d 1027 [1998]; Power Constructors, Inc. v Taylor & Hintze, 960 P2d 20, 31 [Alaska 1998]; Smith v Haden, supra, 868 F Supp at 2-3). "

Now, after many years, we see the near end of the Lindenman case. Lindenman v Kreitzer
2013 NY Slip Op 02356  Decided on April 9, 2013  Appellate Division, First Department.  From what we can glean, defendant presented sufficient evidence to trigger a hearing on the collectibility of the hypothetical judgment.  Put another way, defendant shouldered its burden on the issue, and a hearing is now to be held. 

"The trial court’s award of $5,500,000 for past and future pain suffering deviated materially from reasonable compensation to the extent indicated. Although plaintiff Bruce Lindenman demonstrated that he suffered a brain injury, he did not undergo surgery and was able to continue to engage in activities such as driving and playing tennis (cf. Paek v city of New York, 28 AD3d 207 [1st Dept 2006], lv denied 8 NY3d 805 [2007]). The award for past and future loss of services deviated materially from reasonable compensation under the circumstances to the extent indicated (see Penn v Amchem Products, 85 AD3d 475 [1st Dept 2010]; Cutrone v New York City Transit Auth., 73 AD3d 462 [1st Dept 2010]. Given that this was a bench trial, we need not remand for a new trial on the issue of damages (see Chock Full O’Nuts Corp. v NRP LLC I, 47 AD3d 189 [1st Dept 2007]; Hernandez v Bentinck, 17 AD3d 532 [2d Dept 2005]).

The trial court should have granted defendant’s motion for a collectibility hearing following the verdict and award of damages. In a legal malpractice action, it is not until "plaintiff has proved the case within the case, including the value of the lost judgment, that the issue of collectibility may arise" (see Lindenman v Kreitzer, 7 AD3d 30, 34-35 [1st Dept 2004]). [*2]The value of the lost judgment was proved on June 25, 2009 when the trial court issued its finding on the apportionment of liability and the value of the damages, and, at that time, defendant’s request for a hearing on the issue of noncollectibility should have been granted (id.). "

Consolidation or a joint trial are subject to judicial discretion.  Judges are said to be the master of their calendar, and the Appellate Division rarely steps in and rearranges it.  Here, inCounty of Westchester v White Plains Ave., LLC 2013 NY Slip Op 02212  Decided on April 3, 2013
Appellate Division, Second Department consolidation is denied as unwieldy.
 

""Where common questions of law or fact exist, a motion to consolidate or for a joint trial pursuant to CPLR 602(a) should be granted absent a showing of prejudice to a substantial right by the party opposing the motion" (Perini Corp. v WDF, Inc., 33 AD3d 605, 606; see Brown v Cope Bestway Express, Inc., 99 AD3d 746, 747-748; Alizio v Perpignano, 78 AD3d 1087, 1088; Mas-Edwards v Ultimate Servs., Inc., 45 AD3d 540). Here, although the action to recover damages for breach of contract (hereinafter Action No. 1) and the action, inter alia, to recover damages for legal malpractice (hereinafter Action No. 2) involve a common question of fact, Action No. 2 involves numerous additional allegations of professional negligence that are irrelevant to Action No. 1. Furthermore, the issues and applicable legal principles in the respective actions are so dissimilar, and the trial may prove so unwieldy, that consolidation will result in jury confusion and prejudice the respondents’ right to a fair trial (see D’Abreau v American Bankers Ins. Co. of Fla., 261 AD2d 501, 502; 197 Merrick Rd. Corp. v 185 Merrick Rd. Assoc. Corp., 152 AD2d 551; Gouldsbury v Dan’s Supreme Supermarket, Inc., 138 AD2d 675, 676; Brown v Brooklyn Union Gas Co., 137 AD2d 479, 480). Accordingly, the Supreme Court properly denied the appellants’ motion pursuant to CPLR 602(a) to consolidate the actions."