A non-party deponent, served with a subpoena, arrives for a deposition.  That non-party  wisely brings an attorney.  What may the attorney do at the deposition?  It depends where the case is taking place.  In the 4th Department (22 Counties, roughly half the state?) the attorney will be permitted no objections and may not speak.  Sciara v Surgical Assoc. of W. N.Y., P.C.   2013 NY Slip Op 01741  Released on March 15, 2013   Appellate Division, Fourth Department  hews to the line first set in Thompson v. Mather, 70 AD3d 1436 (4th Dept., 2010).

"As we stated in Thompson, "counsel for a nonparty witness does not have a right to object during or otherwise to participate in a pretrial deposition. CPLR 3113 (c) provides that the examination and cross-examination of deposition witnesses shall proceed as permitted in the trial of actions in open court’ " (id. [emphasis added]), and it is axiomatic that counsel for a nonparty witness is not permitted to object or otherwise participate in a trial (see e.g. id.). We recognize that 22 NYCRR 221.2 and 221.3 may be viewed as being in conflict with CPLR 3113 (c) inasmuch as sections 221.2 and 221.3 provide that an "attorney" may not interrupt a deposition except in specified circumstances. Nevertheless, it is well established that, in the event of a conflict between a statute and a regulation, the statute controls (see Matter of Hellner v Board of Educ. of Wilson Cent. School Dist., 78 AD3d 1649, 1651).

We also recognize the practical difficulties that may arise in connection with a nonparty deposition, which also have been the subject of legal commentaries (see e.g. 232 Siegel’s Practice Review, Objections by Nonparty Witness? at 4 [Apr. 2011]; Patrick M. Connors, Supp Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR 3313:7, 2013 Pocket Part at 31-33). However, we decline to depart from our conclusion in Thompson (70 AD3d at 1438) that the express language of CPLR 3113 (c) prohibits the participation of the attorney for a nonparty witness during the deposition of his or her client. We further note, however, that the nonparty has the right to seek a protective order (see CPLR 3103 [a]), if necessary. "

A lively dissenting opinion (2 judges) ensures that we will see this case in the Court of Appeals.

It as common as rain.  Law firms hire clerical or service organizations to do things for the law firm.  File papers, serve parties, perfect a security lien and file the UCC-1.  What happens to the law firm, and the client, when things go wrong.  Here, in Gutarts v Fox  2013 NY Slip Op 01492  Decided on March 12, 2013  Appellate Division, First Department  things go wrong, and no one has a good remedy.

"Defendant L.T. Service Corporation (LT) was engaged by defendant Fox and his firm, O’Donnell & Fox (the Fox defendants) to file the necessary UCC statements to establish a lien in plaintiffs’ favor on the cooperative apartment owned by nonparty Irina Chatkhan to secure a loan by plaintiffs to her. The Fox defendants had been retained as counsel by plaintiffs to file the necessary documents. As a result of erroneous information provided by the Fox defendants and a misapprehension on the part of LT as to how to correct the mistake, the lien was not perfected for nearly 18 months after it was first filed. In the interim, Ms. Chatkhan filed for bankruptcy, leading other creditors to challenge plaintiff’s security interest.

Plaintiffs then commenced this action, alleging legal malpractice and negligence against all the defendants. The legal malpractice and negligence claims against LT did not survive a motion to dismiss. LT is not a law firm and had no duty to plaintiffs; it had been hired by the Fox firm as an independent contractor for the ministerial act of filing the necessary documents with the City Register’s Office.

After plaintiffs’ claims against LT were dismissed, the Fox defendants sought leave to amend their answer to include cross claims against LT for breach of contract, breach of warranty, and indemnification. LT opposed the amendment of the answer, and, in the event that leave was granted, sought summary judgment dismissing the cross claims. The motion court granted leave to amend the answer to contain all the alleged cross claims and denied LT’s cross motion.

The court erred in denying the cross motion. The Fox defendants’ alleged need for unspecified additional discovery was an insufficient basis to deny summary judgment. Plaintiffs’ malpractice claim, far from being unspecified, alleges the Fox defendants’ failure to file the UCC [*2]financing statement, as they had been retained to do. The record is clear that mistakes were made by both the Fox defendants and LT in completing the filing. The Fox defendants may not pass any liability they may have for this malpractice onto their independent contractor (Kleeman v Rheingold, 81 NY2d 270, 275 [1993]).

The record shows that LT had established its entitlement to judgment as a matter of law and the Fox defendants failed to raise any triable issue of fact. With regard to the breach of contract claim, the contract, as reflected by the invoices, was for LT to file a UCC Correction Statement and the Termination Statement on the Fox defendants’ behalf. There is no question that, despite some difficulties, the documents were filed. That LT may have been negligent in its performance of the contract is of no moment; the contract as bargained for was performed. Indeed, even if LT was negligent, it would not be liable, as the Fox defendants have not alleged that any legal duty independent of the contract has been violated (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 389 [1987]).

A breach of warranty claim does not lie against LT, as there is no cause of action for breach of warranty where the defendant has only provided a service (Aegis Prods. v Arriflex Corp. of Am., 25 AD2d 639, 639 [1st Dept 1966]).

Finally, there is no proper claim for indemnification against LT. The invoice agreement contains a liquidated damages provision, limiting LT’s liability to the cost of the service provided, here, $160."
 

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

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

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

"The plaintiff’s basis for her legal malpractice claim occurs at paragraphs 63 and 64 in her
amended complaint that allege that the defendants inability to communicate with her represents a
failure to comply with an attorney’s basic ethical obligation. At paragraphs 66 and 67 the plaintiff alleges the following damages:
66. As a consequence of Defendants’ actions and inactions, White
experienced feelings of frustration, helplessness and inadequacy
throughout the pendency of the litigation and during settlement
conferences. Thereafter, she has experienced sleep and appetite
disturbances, episodes of crying, fearfulness or trepidation, and
feelings of worthlessness, anxiety and depression.
67. As a consequence of Defendants’ actions and inactions,
Plaintiff has been prejudiced and suffered severe emotional distress
and is entitled to compensatory damages.
The Appellate Division, Second Department has made it clear that claims of damages
stemming from the intentional infliction of emotional distress are not recoverable in legal
malpractice actions.

“Damages in a legal malpractice case are designed ‘to make the injured client whole’ . . . A plaintiff’s damages may include ‘litigation expenses incurred in attempt to avoid, minimize, or
reduce the damage caused by the attorney’s wrongful conduct’. . .”7 While the Court of Appeals
has held that plaintiff may be awarded litigation expenses incurred to correct an attorney’s error,
it specifically rejected the notion that a plaintiff could be reimbursed for the expenses incurred
because of an attorney’s negligence.8 Consequently, the plaintiff’s claims for damages based on
the costs and attorney’s fees of this law suit is without merit."

The question of standing is frequently seen in shareholder-corporation cases and often leads to legal malpractice claims afterwards.  In Lieblich v Pruzan  2013 NY Slip Op 01497  Decided on March 12, 2013  Appellate Division, First Department we see the converse. 
 

"This is an action for, inter alia, legal malpractice arising from defendant attorney’s representation of plaintiff Lieblich in a lawsuit filed against him as a majority shareholder in Lot 1555 Corp. and against the corporation by the minority shareholder (see Nahzi v Lieblich, 69 AD3d 427 [1st Dept 2010], lv denied 15 NY3d 703 [2010]). Plaintiffs allege that defendant should have conducted discovery in the underlying litigation that would have revealed information discovered in subsequent related litigation and should have used that information to oppose summary judgment in the underlying litigation. They further allege that had the information been submitted in opposition to the motion, it would have resulted in a judgment in their favor.

The motion court properly dismissed the legal malpractice claim as plaintiffs failed to "meet the case within a case’ requirement, demonstrating that but for’ the attorney’s conduct the [plaintiff] client would have prevailed in the underlying matter or would not have sustained any ascertainable damages" (Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 272 [1st Dept 2004]; see also Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]). Plaintiffs submitted two affidavits that they allege should have been obtained and submitted in the earlier lawsuit. One of the affidavits is based entirely on hearsay and speculation (see Harvey v Greenberg, 82 AD3d 683 [1st Dept 2011]; Babikian v Nikki Midtown, LLC, 60 AD3d 470, 471 [1st Dept 2009]. The other, from the minority shareholder’s accountant, is based purely on conclusory assertions and speculation that the minority shareholder would have revealed all of the details regarding the purchase of an apartment and his dealings with plaintiffs to the accountant. These documents in no way undermine the unambiguous shareholder agreement clearly evincing the minority shareholder’s interest in Lot 1555. The only remaining evidence that plaintiffs claim defendant failed to timely discover and submit in the underlying action was the minority shareholder’s later deposition testimony that does not support the claim that he did not pay any consideration for his 25% [*2]interest in Lot 1555.

The court also properly rejected plaintiffs’ argument that defendant negligently failed to seek an offset from the minority shareholder for his proportionate share of corporate expenses from the sale of corporate property, as the shareholder agreement did not require any shareholder contribution to corporate expenses (see McRay v Citrin, 270 AD2d 191 [1st Dept 2000]), and plaintiffs offered no contrary evidence.

Plaintiff Biberaj is not a proper party to this litigation because he was not a party to the underlying action, is not listed in the shareholder agreement, and does not allege any misconduct of defendant other than the alleged negligent representation of Lieblich and Lot 1555 in the prior suit. As the motion court noted, the statements in Biberaj’s and Lieblich’s affidavits that Biberaj was a "beneficial shareholder" in the corporation are conclusory and insufficient to establish his legal capacity to sue in this action. "

New York State Workers’ Compensation Bd. v SGRisk, LLC   013 NY Slip Op 50338(U)   Decided on March 1, 2013   Supreme Court, Albany County   Platkin, J. is an accounting malpractice and fraud case, but it has implications for legal malpractice, and the Court explains how causes of action for fraud, breach of fiduciary duty and unjust enrichment can be converted into malpractice claims, with a three year statute rather than the longer 6 year statute which might otherwise obtain.

"The Court begins with UHY’s contention that the breach of contract claim is time barred. The statute of limitations for a breach of contract claim generally is six years (CPLR 213 [2]). Under New York law, "a breach of contract cause of action accrues at the time of the breach"(Ely-Cruikshank Co. v Bank of Montreal, 81 NY2d 399, 402 [1993];see CPLR 203 [a]). The date of the breach is controlling even where damages from the breach are not sustained until a later date and the injured party is "ignorant of the existence of the wrong or injury" (Ely-Cruikshank, 81 NY2d at 402-403 [internal quotation marks omitted]).

Notwithstanding the foregoing general principles, "[a] cause of action charging that [an accounting] professional failed to perform services with due care and in accordance with the recognized and accepted practices of the profession is governed by the three-year Statute of Limitations applicable to negligence actions" (Ackerman v Price Waterhouse, 84 NY2d 535, 541 [1994]; see CPLR 214 [6]). Thus, the three-year statute of limitations of CPLR 214 (6) applies to claims that "arise out of the accounting services provided by the defendant pursuant to a contract . . . , and out of the accountant-client relationship which resulted therefrom" (Harris v Kahn, Hoffman, Nonenmacher, & Hochman, LLP, 59 AD3d 390, 391 [2d Dept 2009]; see Matter of R.M. Kliment & Frances Halsband, Architects [McKinsey & Co. Inc.], 3 NY3d 538, 542 [2004]). This is true even where the claimed breach of contract is based upon an express contractual promise, so long as the promise is of the sort that the professional would be expected to accomplish using due care even in the absence of a specific contractual provision (Kliment, 3 NY3d at 542; see Winegrad v Jacobs, 171 AD2d 525, 525 [1st Dept 1991]). Generally, "the [malpractice] claim accrues upon the client’s receipt of the accountant’s work product" (Ackerman, 84 NY2d at 541), but the accrual date is subject to tolling under the continuous representation doctrine (Giarratano v Silver, 46 AD3d 1053, 1055 [2d Dept 2007]).

To the extent that the WCB reads these cases, particularly Inter-Community, as holding that the accrual of a cause of action sounding in professional negligence is tolled until the plaintiff has knowledge of its damages, the Court must reject this reading as inconsistent with controlling precedent of the New York State Court of Appeals. Settled law hold that an accounting malpractice claim accrues upon the client’s receipt of the accountant’s work product since this is the point that a client reasonably relies on the accountant’s skill and advice and, as a consequence of such reliance, can become liable for tax deficiencies. This is the time when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court (Ackerman, 84 NY2d at 541).

Indeed, in Ackerman, the Court of Appeals rejected a discovery-based rule that would have tolled the statute of limitations until the accounting client receives a notice of tax deficiency, reasoning that "to base a limitations period on the potentiality of [a notice of tax deficiency] defies the essential premise of temporal finality embodied in Statutes of Limitation" (id. at 542). The Court of Appeals also emphasized the "utter lack of predictability" that would result from departing from "traditional principles governing negligence actions[, which] instruct that plaintiff was injured, and any claim accrued upon performance of the professional service" (id. at 542-543). A similar lack of predictability and temporal finality would be associated with measuring accrual from receipt of a forensic audit report.

Accordingly, except to the limited extent expressly indicated below in connection with plaintiff’s quasi-contract claim, the cause of action for breach of contract must be dismissed as time-barred."

Client is faced with a buy-out situation in which it must move a store.  Client hires attorneys to negotiate the buy-out and calculate how costs and taxes will affect the buy-out price.  The attorneys do not calculate all taxes, and the buy-out price does not cover the taxes.  Is this legal malpractice?

Leggiadro, Ltd. v Winston & Strawn, LLP   2013 NY Slip Op 50345(U)   Decided on March 1, 2013
Supreme Court, New York County   Kornreich, J. holds:  "In 2010, the Landlord notified Leggiadro that it wished to negotiate an early termination and buy-out of the Lease because it sought to convert [*2]the Building into residential and commercial cooperative units. ¶ 12. Leggiadro retained W & S to negotiate a buy-out with the Landlord whereby Leggiadro would obtain a "net settlement sum" that would provide an adequate amount of post-tax money to cover the costs of relocating its flagship store. ¶ 15. Brooks specifically requested that W & S advise plaintiffs of any and all tax liabilities arising from the buy-out. ¶ 16.

Leggiadro and the Landlord eventually executed a buy-out agreement, the terms of which were not disclosed to the court pursuant to a Confidentially and Nondisclosure Agreement. ¶ 24. Plaintiffs subsequently became aware that they incurred unexpected New York State and New York City tax liabilities by virtue of differences in how the State, the City, and the IRS treat S-Corporations for tax purposes. ¶ 25. Plaintiffs contend that W & S failed to inform them of these tax issues and, if they had, they would have negotiated a higher buy-out settlement amount with the Landlord that would have been sufficient to cover Leggiadro’s moving costs. ¶ 31.

The allegations in the AC and the documentary evidence establish that the scope of W & S’s representation was to negotiate a settlement sum that would cover Leggiadro’s moving costs. Such costs were not limited to increases in operational costs such as rent. Rather, the Calculation also considers (though it does not ascribe a dollar amount to) goodwill loss from the company leaving its Madison Avenue location. The Calculation does not account for out-of-pocket costs to the shareholders. While the Calculation does consider the federal long term capital gains tax, which all of the involved parties knew would be paid by the shareholders by virtue of Leggiadro’s S-Corporation status, this alone is not enough to expand the scope of W & S’s representation of the company to include the representation of its shareholders. If consideration of pass-through tax liability was sufficient to constitute the representation of shareholders, by this logic, a lawyer who represents a company necessarily also must represent its shareholders because all financial liabilities of a company ultimately impact the finances of the shareholders. This is not the law.

Nevertheless, the Rosses argue that the special circumstances of the representation created a near-privity relationship under the doctrine set forth in Good Old Days Tavern, supra, which arises from the principle that a provider of professional services is liable for negligent misrepresentations to third-parties where the "relationship is so close as to approach that of privity." Prudential Ins. Co. of America v. Dewey, Ballantine, Bushby, Palmer & Wood, 80 NY2d 377 (1992). Critically, it is important to remember that reasonable reliance is an essential element of a claim based on a negligent misrepresentation or omission. See J.A.O. Acquisition Corp. v Stavitsky, 8 NY3d 144, 148 (2007). Thus, even assuming W & S had a duty to consider the tax liabilities of the Rosses, the Rosses cannot claim to have reasonably relied on any representation or omission made by W & S as to the existence of their individual pass-through tax liability because they knew that such liability existed by virtue of their long history of paying these taxes as stockholders of an S-Corporation. Therefore, the Rosses’ claims against W & S are dismissed.

However, Leggiadro may maintain its claim against W & S related to the New York City general corporation tax. See AC ¶ 26. The scope of W & S’s representation included obtaining a settlement sum from the Landlord that accounted for the company’s tax liabilities. Assuming, for the purposes of this motion to dismiss, that W & S failed to account for city taxes and that such failure led to a lower settlement amount with the Landlord, W & S might be liable to Leggiadro for the difference between the settlement amount that Leggiadro obtained and the [*4]amount it would have received if the amount accounted for city taxes. Contrary to W & S’s contentions, this damages calculation is not speculative. "
 

The Appellate Division, Second Department is a busy place and provides many many decisions every year.  Many of them are definite, but sparse on detail.  In Montero v Cohen , 2013 NY Slip Op 01382  Decided on March 6, 2013   Appellate Division, Second Department  we see that this was a matrimonial case, we see that it is an international case, but we have no idea of what plaintiff’s claims were.  We do see that they were dismissed on summary judgment and affirmed.
 

"The plaintiff and his former wife, Nives Montero, married in 1973 in Argentina. They had no children, and, in 2001, the former wife commenced an action for a divorce. In 2005, after several years of litigation, the parties entered into a stipulation of settlement, and they were divorced by a judgment entered in August 2005 and amended a month later (see Montero v Montero, 85 AD3d 986). The defendant attorneys represented the plaintiff at that time, but the plaintiff became dissatisfied with the terms of the stipulation and later discharged the defendants and commenced this action against them to recover damages for legal malpractice. The defendants moved for summary judgment dismissing the complaint, and the Supreme Court granted the motion. The plaintiff appeals.

The plaintiff failed to raise a triable issue of fact as to whether the defendants’ alleged breach of the duty of care proximately caused him to suffer actual and ascertainable damages (see McCoy v Feinman, 99 NY2d 295, 302; DeGregorio v Bender, 4 AD3d 385, 386). Accordingly, the Supreme Court properly granted the defendants’ [*2]motion. "
 

The legal malpractice statute of  limitations commences when the mistake is made.  It runs for three years from that date, although it may be tolled by the continuous representation doctrine.  That continuous representation doctrine requires that the attorney and client agree that more work needs to be done, that the attorney continues to work on the case, and that a relationship of trust and confidence ensues.  Here,in Singh v Edelstein  2013 NY Slip Op 01255   Decided on February 27, 2013 Appellate Division, Second Department  it looks like the post-nup agreement was the last act by the defendant, and that plaintiff did not discover the problem until too late.

"To dismiss a complaint pursuant to CPLR 3211(a)(5) on the ground that it is barred by the applicable statute of limitations, a defendant bears the initial burden of establishing, prima facie, that the time in which to sue has expired (see DeStaso v Condon Resnick, LLP, 90 AD3d 809, 812). The statute of limitations for a cause of action sounding in legal malpractice is three years (see Matter of R.M. Kliment & Frances Halsband, Architects [McKinsey & Co., Inc.], 3 NY3d 538). The three-year period of limitations runs from the day of the alleged malpractice (see Alicanti v Bianco, 2 AD3d 373, 374, citing McCoy v Feinman, 99 NY2d 295, 306). The statute of limitations for legal [*2]malpractice 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 at 306).

Here, the defendant met his initial burden by establishing that the alleged malpractice occurred in November 2007, when the postnuptial agreement was executed, and that the action was commenced in August 2011, more than three years thereafter. Accordingly, the burden then shifted to the plaintiff to raise a question of fact as to whether the statute of limitations was tolled or otherwise inapplicable, or whether she actually commenced this action within the applicable limitations period (see Jalayer v Stigliano, 94 AD3d 702, 703; DeStaso v Condon Resnick, LLP, 90 AD3d at 812; Williams v New York City Health & Hosps. Corp., 84 AD3d 1358, 1359; Krichmar v Scher, 82 AD3d 1164, 1165). The plaintiff failed to meet that burden (see Williamson v PricewaterhouseCoopers LLP, 9 NY3d 1, 11; Rodeo Family Enters. LLC v Matte, 99 AD3d 781, 784). "