Airey v Remmele  2012 NY Slip Op 22299   Decided on October 15, 2012   Supreme Court, Erie County   NeMoyer, J.  is a case we started to read, and then had to go back to the beginning to sort out.  Who would have thought that this story would have happened in the Buffalo area? 
 

While this is not a legal malpractice case, it does have implications for the value of damages in a breach of fiduciary duty claim.  "The complaint states discrete causes of action for breach of contract, breach of fiduciary duty, negligence, and fraud or misrepresentation (or, more accurately, fraudulent omission of a material fact). The gravamen of each cause of action is that Remmele held herself out to the public and to plaintiff and plaintiff’s then wife as a "marital counselor"; that plaintiff and his then wife engaged defendant to provide "marriage counseling" to the couple in an attempt to "reconcile" their "differences"; that as part of such counseling, plaintiff disclosed to defendant intimate details with respect to his "marriage and his relationship"; that plaintiff paid defendant for such counseling; but that plaintiff eventually learned that defendant had a sexual relationship or extramarital affair with plaintiff’s wife, leading to the commencement of divorce proceedings between plaintiff and his wife. "

"The Court has no intention here to delineate all of the categories or species of damages that might be recovered by plaintiff upon proof of a breach of a contractual or tort duty allegedly assumed by defendants. The Court would note, however, that it probably would countenance an effort by plaintiff to recover his alleged economic or "out-of-pocket" damages in the form of the loss of the benefit of his bargain with defendants. In other words, this Court would have no problem with plaintiff’s recouping any money he had paid [FN2] to defendants specifically for marital counseling if, as alleged, Remmele did not in fact use her best efforts to help the marriage but instead subverted it by embarking on a sexual relationship with plaintiff’s wife. Quite simply, the idea that a self-professed counselor could accept and keep a fee earmarked for marriage or relationship counseling despite entering into a secret sexual relationship with one of the counseled parties is beyond this Court’s acceptance.

Addressing defendants’ challenges to the individual causes of action, the Court concludes that plaintiff has sufficiently alleged the existence of a contract whereby defendants would provide marital counseling to plaintiff and his then wife, and that plaintiff further has sufficiently alleged a breach of that contract and resultant damages. Plaintiff alleges that beginning in 2009 and continuing into 2011, plaintiff engaged the paid services of defendants for the purposes of providing marriage counseling. Although defendants have denied that, they have not done so conclusively, their documentary evidence notwithstanding. Although the e-mail exchange of November 2010 and the more formal written contract of January 2011 certainly tend to show that plaintiff was engaged as a "business coach," neither the exchanged e-mails nor the terse written contract on their face refute the allegation that defendant was already engaged in providing marriage counseling to the couple. Indeed, this Court notes that the November 29, 2010 e-mail from defendant to plaintiff’s wife — which e-mail defendant herself describes as having formed the first consultation contract — afforded the couple an $800 "[c]ourtesy, current client discount" from defendants’ "[r]egular [c]ost." That contractual term at least arguably buttresses plaintiff’s assertion that there was a pre-existent counseling relationship and undermines defendant’s contrary assertion. Similarly, and again, the January 28, 2011 meeting summary, which is relied upon by [*5]both parties, tends to show that defendant counseled the couple with regard to their personal or marital relationship as well as their relationship at work.

By the same token, and for similar reasons, the Court concludes that plaintiff has adequately pleaded the essential elements of cause of action for breach of fiduciary duty, professional negligence or malpractice, and fraudulent concealment. These causes of action present a somewhat closer question for the Court, however, given defendant’s apparent lack of State licensing or other recognized professional credentials or certification as a psychologist, social worker, therapist, or the like. Nevertheless, it appears to the Court that defendant may have held herself out to the public as someone qualified to counsel individuals or couples in their relationships, including their marriages, and that indeed is plaintiff’s explicit allegation. Thus, the Court concludes, plaintiff has sufficiently alleged the existence of a fiduciary duty [FN3] and other relationship of trust between himself and defendant, defendant’s breach thereof,

defendant’s exploitation of intimate information, and defendant’s concealment of the arguably material fact that, while purporting to counsel the couple in their marriage, defendant was having a sexual affair with plaintiff’s wife.[FN4] Further, plaintiff has sufficiently alleged that defendant provided negligent and careless counseling to plaintiff and did not possess the ordinary skill, knowledge, or ability of those holding themselves out to the public as marriage counselors.

Concerning plaintiff’s demand for punitive damages, the fact is that punitive damages might well be recoverable upon proof of defendants’ commission of fraud and possibly their breach of fiduciary duty and negligence as well (see Dupree, 87 AD3d at 978 [upholding punitive damages award against physician who assumed role as plaintiff’s mental health therapist but who had sexual affair with her]). Any such award would be aimed at punishing the wrongdoer and deterring similar conduct by others (see Laurie Marie M. v Jeffrey T.M., 159 AD2d 52, 59 [2d Dept 1990], affd 77 NY2d 981 [1991]; Peters v Newman, 115 AD2d 816, 817 [3d Dept 1985], appeal dismissed 67 NY2d 916 [1986]; see also Le Mistral, Inc. v Columbia Broadcasting Sys., 61 AD2d 491, 494 [1st Dept 1978], appeal dismissed 46 NY2d 940 [1979] [citing 14 NY Jur, Damages, § 176 for proposition that "exemplary damages are [generally] recoverable in all actions ex delicto based upon tortious acts which involve ingredients of malice, fraud, oppression, insult, wanton or reckless disregard of the plaintiff’s rights, or other circumstances of aggravation, as a punishment of the defendant and admonition to others"]; see generally Walker v Sheldon, 10 NY2d 401, 404-405 [1961]). Thus, punitive damages may be awarded where the [*6]wrong complained of is "actuated by evil and reprehensible motives" (Walker, 10 NY2d at 404), is "intentional and deliberate, and has the character of outrage frequently associated with crime" (Prozeralik v Capital Cities Communications, 82 NY2d 466, 479 [1993], quoting Prosser and Keeton, Torts § 2, at 9 [5th ed 1984] [internal quotation marks omitted]). However, such punitive damages may be awarded only in proportion to any actual injury inflicted by the defendant (see generally Correia v Suarez, 52 AD3d 641 [2d Dept 2008]).

Here, in the absence of an order dismissing the tort causes of action, there is no basis for ruling out any claim for punitive damages that might be premised thereon, certainly not at the threshold. Plaintiff is entitled to explore through discovery defendant’s alleged conduct, both with respect to this couple and in general.

Accordingly, the motion of defendants to dismiss the complaint is DENIED, although it is DETERMINED as a matter of law that plaintiff may not recover damages, including for emotional distress, on account of the sexual relationship between defendant and plaintiff’s then wife or the consequent damage to or destruction of the marriage. "

In this recurring situation, plaintiff has both a California and a NY connection, and hired an attorney to do some work, which eventually goes sour. Frequently a case like this comes up in the entertainment field, with its CA and NY roots. As an example, Basilotta v Warshavsky ; 2011 NY Slip Op 32185(U); August 2, 2011; Sup Ct, NY County; Docket Number: 115525/09; Judge: Paul Wooten shows how the short CA statute of limitations (1 year) undermines the longer NY statute (3 years).

"During the 1980’s plaintiff was a singer known for her popular 1982 song Hey Micky. At all relevant times she has been a California resident. In or about 2003, non party Fallon Inc produced a television commercial for the non-party Subway restaurant franchise that featured Micky without Plaintiff’s knowledge or consent. Subsequent to becoming aware of this commercial, plaintiff retained defendant Oren J. Warshavsky, who at the time worked at defendant law firm Gibbons, Del Deo, Dolan, Griffinger & Vecchione (“Gibbons”).’ Plaintiff alleges that she retained Warshavsky and Gibbons I) to seek compensation for the unauthorized use of Mickey in the commercial, and 2) to clarify her ownership rights to the Mickey master recordings. The retainer agreement between the parties was strictly contingency-fee based, and defines the scope of the retainer as “regarding all causes of action."

The gist of the legal malpractice case is that the attorneys got a settlement offer of $ 35,000 and when plaintiff did not accept, sent a letter to a successor attorney advising him of their position that, among other things, plaintiff had terminated her relationship with Gibbons in December, 2006.

The later legal malpractice case revolved around the ownership and exploitation of the master recordings and whether Gibbons was to blame for legal malpractice. Under CPLR 202, a cause of action accruing in a jurisdiction outside NY must be timely both in NY and in that other jurisdiction.

In legal malpractice, where the demanded relief is monetary damages, the site of loss is the plaintiff residence, On this basis, the complaint was dismissed.

The claims in this case (and the related cases) cannot be harmonized with the defenses.  This series of huge real estate transactions either reveals corruption and theft, or plaintiff is totally wrong.  There does not seem to be any middle ground.

Silver v Newman   2012 NY Slip Op 32572(U)   October 2, 2012   Supreme Court, Suffolk County
Docket Number: 22581/2010  Judge: Emily Pines is a case which involves the sale of real property, and a coop in the Sherry Netherland and a missing $ 38,000,000. 

"The complaint in Action 1 alleges two causes of action. In the first cause of action the complaint alleges that the Rittberg defendants, who represented the plaintiffs in the sale of the Townhouse to Lowes’ Home Centers, Inc. for the purchase price of $38,500,000, negligently disbursed the proceeds of the sale to themselves, individuals, corporations and other business entities, other than the plaintiffs, without the knowledge, advice and consent of the plaintiffs. The complaint alleges in the second cause of action that the Rittberg defendants breached a fiduciary duty to the plaintiffs by misappropriating the proceeds of the sale of the Townhouse for their own benefit and for the benefit of others.
 

The complaint in the instant action, Action 2, alleges in the first cause of action hilt the plaintiffs are entitled to an accounting by all defendants. The complaint alleges in the second cause of action that defendant Barry Newman breached a contract with the plaintiffs,  and in the third cause of action that Newman breached his fiduciary duties to the plaintiffs."

"With regard to the branch of the Rittberg defendants’ motion to dismiss the ninth cause of action, their submissions demonstrate that the plaintiff acknowledged that she was not seeking legal advice from Rittberg in regard to the Sherry-Netherland coop apartment and was aware of a conflict of interest for Rittberg to attempt to represent both herself and Newman. Therefore, since Rittberg and his law firm did not represent the plaintiffs in this transaction, no malpractice could have resulted from the transaction. Thus, that portion of the cause of action alleging legal malpractice against the Rittberg defendants for the transaction surrounding the Sherry-Netherland coop apartment is dismissed. The remaining portion of the sixth cause of action relates to the Rittberg defendants’ alleged malpractice in the Townhouse transaction, this allegation has also been asserted in Action 1. The Rittberg defendants also contend that the fourth cause of action alleging
unjust enrichment was also asserted in Action 1. The Court is aware that the plaintiffs are
represented by separate attorneys in each action, and in consideration of these circumstances,
counsel for the plaintiffs are directed to determine in which action these claims shall Bel litigated and stipulate to same at the next court conference. Accordingly, only the portion of the ninth cause of action which alleges malpractice in the Sherry-Netherland transaction is dismissed at this time.
Accordingly, motion by the Rittberg defendants is granted to the extent that the sixth ND the portion of the ninth causes of action alleging legal malpractice in the Sherry- Netherland transaction are dismissed."

Try to sort through Tolmosova v Umarova   2012 NY Slip Op 51921(U)     Decided on October 1, 2012   Supreme Court, Kings County   Schmidt, J. and you will see two things.  There is a reason such a large percentage of new businesses fail.  The second is that the hearing on this case must have been amazing.
 

"The complaint alleges five causes of action – the first four with respect to the signatories to the agreement. The first cause of action is alleged against Benyaminova for repayment of the promissory note; the second cause of action is alleged against Benyaminova for her share of the Avenue D property and business and/or her share of defendant Kids Kingdom (another daycare business); the third cause of action is alleged against Umarova for fraud and conversation for representing to plaintiff that she (Umarova) was the only person capable of obtaining the certificate of occupancy; and the fourth cause of action is alleged against Umarova for a judgment transferring 100% of the shares of Skazka III, Inc. to plaintiff.

The fifth cause of action alleges legal malpractice and breach of fiduciary duty against Mr. Popik in the drafting of the August 24, 2000 agreement. Specifically, the complaint alleges that Mr. Popik failed to exercise reasonable skill and knowledge commonly possessed by a member of the legal profession in representing multiple parties with potential conflicts of interest; failed to inform plaintiff of her right to have independent counsel review and evaluate the agreement, and discouraged her from doing so; and failed to provide plaintiff with a general waiver or release regarding representation of multiple parties in connection with the agreement. The complaint further alleges that Mr. Popik’s negligence and breach of fiduciary duty caused plaintiff to sustain damages, including the [*4]loss of ownership and interest in the Avenue D and Avenue I premises.

In August, 2003, defendant filed a verified answer. Shortly thereafter, plaintiff discontinued this action against Benyaminova and did not pursue default judgments against co-defendants Skazka III, Inc., Kids Kingdom, Losyev, and Lilly Godzhinsky.

By order dated October 19, 2004, Hon. Francois A. Rivera granted the motion of Umarova to dismiss the third cause of action to the extent it sought damages for conversion as time-barred, and dismissed the third cause of action to the extent it sought damages for fraud for failure to state a cause of action. Subsequently, plaintiff abandoned the complaint against now deceased defendant Timur Umarov. It is undisputed that since the commencement of this action, plaintiff has not served any discovery demands upon any other defendant nor did she seek the deposition of Mr. Popik. "

"Here, Mr. Popik has demonstrated that the complaint fails to state a cause of action for legal malpractice and has made a prima facie showing entitling him to summary judgment dismissing the complaint insofar as asserted against him. In this regard, the complaint, along with the testimony of plaintiff, fails to demonstrate that the advice provided by defendant to plaintiff was the proximate cause of plaintiff’s alleged damages and that plaintiff sustained actual and ascertainable damages.

Specifically, the first cause of action alleges that Benyaminova failed to pay plaintiff the amount set forth in the April 12, 2000 promissory note: $60,700.00, plus interest, costs and attorney’s fees. However, it is undisputed that the promissory note was prepared by another attorney, which was executed by Benyaminova three months before plaintiff represented defendant. Thus, Mr. Popik properly argues that there is no nexus between his representation of plaintiff and Benyaminova’s failure to pay plaintiff. In any event, plaintiff testified at her deposition that she received full payment ($47,000.00) in full satisfaction of this debt alleged in the first cause of action.

Plaintiff’s second cause of action alleges that if Benyminova failed to pay plaintiff back as agreed (in the Letter of Intent), Benyaminova’s share in the Avenue D business would be transferred to Skazka III, Inc.; that Benyaminova’s interest in Avenue D was in the form of a 50% ownership in Kids Kingdom; that plaintiff would be entitled to all the ownership interest in Skazka III, Inc. if plaintiff was not made the owner of the Avenue I premises and business; and that since plaintiff was not made the owner of the Avenue I premises and business, as set forth in the Letter of Intent, and since plaintiff was not made the owner of the Avenue I premises and business, and Benyaminova failed to pay plaintiff back, plaintiff is entitled to Benyaminova’s share of the property and business at the Avenue D premises and/or Benyaminova’s share of defendant Kids Kingdom Inc. Despite these allegations, plaintiff testified that she was not making a claim against Benyaminova "at this time." Plaintiff also testified that she was no longer interested in getting the shares of Skazka III, Inc. ("I don’t want any Skazka or anything"). Similar to the first cause of action, the allegations of this cause of action fail to allege any breach by defendant or that any alleged breach proximately caused plaintiff to sustain any damages.

The third cause of action alleges that Umarova and Benyaminova fraudulently represented to plaintiff that Umarova was the only individual capable of obtaining the certificate of occupancy for a cost of $140,000.00 for the Avenue D premises; that the Avenue D premises already had a daycare certificate; and that therefore Umarova was liable to plaintiff for punitive damages. However, this cause of action has already been dismissed. In any event, plaintiff testified that defendant was not involved in making these purported fraudulent representations, thus this cause of action cannot serve as a basis for a legal malpractice claim against defendant.

The fourth cause of action has been dismissed as well. It alleges that if Umarova failed to purchase 50% of the Avenue I premises and business, the plaintiff would be entitled to 100% of the shares of Skazka III, Inc., and that Umarova failed to make that [*6]purchase. However, plaintiff testified that defendant was not required to purchase a part of the Avenue I premises. Thus, there is no basis for a claim for legal malpractice with respect to this cause of action – Mr. Popik was not involved in this transaction nor is there any connection between Mr. Popik and plaintiff’s alleged damages.

The fifth cause of action for legal malpractice alleges that Mr. Popik drafted the August 24, 2000 Letter of Intent, creating an attorney/client privilege; that Mr. Popik failed to exercise reasonable skill and knowledge possessed by a member of the legal profession in representing multiple parties with conflicting interests, and that Mr. Popik failed to inform plaintiff of her right to have independent counsel review and evaluate the Letter of Intent, causing plaintiff to sustain damages – namely loss of ownership and interest in the Avenue D and Avenue I premises. Even liberally construed, plaintiff’s claim of damages are bare legal conclusions. Even assuming they vaguely state a claim for damages, the allegation of Mr. Popik’s negligence is unequivocally contradicted by documentary evidence. In this regard, plaintiff testified that Mr. Popik’s only fault was his assurance to her that Umarova "was a very decent person" whom he had known for 17 years; that he made "this agreement between all of us because this is an agreement among honest people;" and that she had no evidence that Mr. Popik helped Umarova to defraud plaintiff.[FN2] Moreover, even assuming plaintiff sustained damages, she testified that Mr. Popik did not "have anything do to with" Umarova’s failure to pay her a certain percentage of interest in the Avenue D and Avenue I premises. Further, plaintiff failed to show how the alleged malpractice caused any such damages since the Letter of Intent was not a binding contract but merely "effectuated the intent of the parties" (Weksler v Kane Kessler, P.C., 63 AD3d 529, 531[2009]).

In light of the foregoing, defendant has demonstrated that the complaint fails to allege that plaintiff would be able to prove that, but for the alleged malpractice, she would have prevailed on her claim that she lost her interest in the Avenue D and Avenue I premises.Stated otherwise, defendant has demonstrated that the complaint fails to state a viable cause of action sounding in legal malpractice and has made a prima facie showing entitling him to dismiss the complaint insofar as asserted against him.

In opposition, plaintiff has failed to raise a triable issue of fact. Plaintiff relies solely upon her 2004 affidavit in which she recounts her dealings with Mr. Popik in the drafting of the Letter of Intent. She states, among other things, that she met with Mr. Popik and five other of the defendants to settle a dispute among them; that Mr. Popik praised Umarova as a trustworthy individual; that Mr. Popik read the agreement and translated it into Russian, with all parties present; and that it was executed by all the parties. Plaintiff [*7]goes on to state that Mr. Popik convinced her and Benyaminova to sign a deed which caused plaintiff to sign over her one-half interest in a parcel of real estate to defendant Losyev; that he notarized the signatures; that he was paid by the parties for his services; and that when, two weeks later, plaintiff told Mr. Popik that she was nervous about the agreement because the parties were not fulfilling their obligations, Mr. Popik agreed to represent her against these parties, but now claims he did not have an attorney/client relationship with her.

Thus, counsel for plaintiff sums up plaintiff’s claims as follows: Mr. Popik: (1) represented several parties simultaneously with differing interests; (2) prepared an agreement for said parties; (3) accepted payment for his services; (4) represented plaintiff against another party to the agreement; and (4) caused plaintiff to lose her interest in real property and business. He asserts that "[u]pn entering Mr. Popik’s office [p]laintiff possessed real property and a business interest . . .[a]fter she left Mr. Popik’s office, [p]laintiff neither had an interest in the real property nor an interest in her business," because Mr. Popik "prepared, notarized and record the documents." Counsel further asserts that "questions of material facts exist as to whether [d]efendant Popik corrupted the attorney-client relationship by representing multiple parties and, in doing so, acted negligently."

As defendant states in his reply, plaintiff has failed rebut his prima facie showing. Stated otherwise, neither plaintiff’s affidavit or counsel’s affirmation address the elements comprising a cause of action for legal malpractice. Plaintiff fails to identify any breach on defendant’s part, or that any alleged breach proximately caused plaintiff to sustain actual or ascertainable damages. To establish causation, plaintiff was required to show that she would not have incurred any damages, but for Mr. Popik’s negligence. Plaintiff utterly failed to make any such showing. In fact, she testified to the contrary and, as indicated above, her claims of damages are conclusory. Further, while plaintiff’s counsel asserts that plaintiff entered Mr. Popik’s office possessing real property and left without such interest, this representation is completely conclusory and devoid of any evidentiary support. Moreover, plaintiff’s opposition is bereft of any discussion of plaintiff’s deposition testimony, which undermines the allegations of her complaint, including the allegation that she was not advised that she could have the Letter of Intent reviewed by independent counsel. As noted above, plaintiff’s only complaint against Mr. Popik was that he represented to plaintiff that Umarova was a very decent person.In sum, plaintiff has failed to rebut defendant’s prima facie showing. "

We don’t often see a US District Court Judge get so worked up.  Here, in PAUL BLACK, Plaintiff, -against- JEFFREY S. SCHWARTZ and LAW OFFICE OF JEFFREY S. SCHWARTZ, Defendants.09-CV-2271(JS)(GRB)     UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK     2012 U.S. Dist. LEXIS 132524 we see a garden or varietal legal malpractice case gone awry.

"Defendants argue that California law does not permit parties who are hit with sanctions to recover the amount of the sanctions from their lawyers. (Defs. Br. 13.) They cite Jocer Enterprises, Inc. v. Price, Roper, Majeski, Kohn & Bentley, 183 Cal. App. 4th 559, 107 Cal. Rptr. 3d 539 (Cal. Ct. App. 2010) for the proposition "that an award for attorney fees imposed by the Court a client [sic], individually, may not be recovered as damages in a subsequent legal malpractice action." (Defs. Br. 13.) Given the loose relationship Defendants’ brief has with the facts in this case–see below–it is perhaps unsurprising that Jocer stands for no such thing."

"Defendants argue that Plaintiff’s injury was really caused by his not having a factual basis to prevail on the merits in the California Action. This is a variation of Defendants’ first argument, and it has at least two flaws. One, it is [*7] premised on a flagrantly misleading characterization of Plaintiff’s expert’s deposition. Noting that Plaintiff’s expert testified that Defendants may have had a colorable basis to sue LTN–the Land America subsidiary–Defendants transform this opinion into a finding that Defendant’s decision to sue Land America was not negligent. (Defs. Br. 16.) In fact, Plaintiff’s expert agreed hypothetically that there might have been an arguable claim against LTN but he was clear that Land America would not have been a proper target. (Defs. Ex. M at 79-80, 94.) Defendants have the gall to make this argument again in their reply (see Defs. Reply 4) even after Plaintiff pointed out that it is based on an incorrect reading of the expert’s deposition (Pl. Opp. 5-6). Two, this argument confuses the claimed injury in this case. Plaintiff does not claim that he would necessarily have prevailed on the merits in the California Action; rather, he simply argues that but for Defendants’ malpractice, he would not have been sanctioned for misconduct."

"As an initial matter, the Court notes that Defendants’ citations to evidence in this motion are virtually meaningless. The exhibits, which are referred to by letter throughout Defendants’ papers, were not included with Defendants’ courtesy copies to the Court (in violation of the undersigned’s individual motion practices), and they are not labeled by letter on ECF. More troublingly, citations to Schwartz’s 167-page deposition do not contain page numbers (the absence of page references was an issue in Defendants’ summary judgment brief as well)"

"Finally, in light of Defendants’ blatant mischaracterizations discussed above, the Court is not inclined to find that either party has behaved worse than the other. Cf. Schlaifer Nance & Co., Inc. v. Estate of Warhol, 194 F.3d 323, 341 (2d Cir. 1999) ("Although, in light of our disposition of this appeal, we need not address whether such unclean hands may preclude the imposition of [*13] sanctions, we observe that a court considering sanctions can and should consider the equities involved before rendering a decision.")."
 

The statute of limitations exists in part because of the human need to get things behind us.  For commerce and (in general) life to keep on the law imposes a bright-line, specific period of time, after which it’s just too late.  To be fair, even when some are disenfranchised, its a good idea.

In legal malpractice, the statute of limitations is 3 years.  An exception to the strict time-keeping analysis is that of of continuous representation.  Here is an example and an explanation.

 Hadda v Lissner & Lissner LLP    2012 NY Slip Op 06736    Decided on October 9, 2012   Appellate Division, First Department   "Defendants made out a prima facie showing that the three-year statutory limitations period (CPLR 214[6]) expired before this legal malpractice action was commenced in July 2010. Plaintiffs failed to raise an issue of fact whether the doctrine of continuous representation applied here to toll the limitations period (see Glamm v Allen, 57 NY2d 87, 94 [1982]; CLP Leasing Co., LP v Nessen, 12 AD3d 226 [1st Dept 2004]). The only evidence plaintiffs submitted on this issue was an affidavit by the husband of one of the plaintiffs, not a party to plaintiffs’ retainer agreement with defendants, stating that he spoke to the individual defendant four times between January and May 2007. Even assuming the husband had the authority to speak for plaintiffs, the intermittent telephone contact between himself and defendants does not constitute "clear indicia of an ongoing, developing and dependent relationship between the client and the attorney" or of "a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim" (see Matter of Merker, 18 AD3d 332, 332-333 [1st Dept 2005] [internal quotation marks omitted])."

It’s often said to us that a predecessor attorney was corrupt, or "took" the money, or was "bought."  We’ve yet to see direct evidence of attorney corruption, but the case of AMY R. GURVEY, Plaintiff-Appellant, -v.- COWAN, LIEBOWITZ & LATMAN, P.C., CLEAR CHANNEL COMMUNICATIONS, INC., LIVE NATION, INC., INSTANT LIVE CONCERTS, LLC, NEXTICKETING, INC., WILLIAM BORCHARD, MIDGE HYMAN, BAILA CELEDONIA, CHRISTOPHER JENSEN, DALE HEAD, STEVE SIMON, MICHAEL GORDON, and SUSAN SCHICK, Defendants-Appellees.

Nos. 09-2185-cv(L), 10-4111 (Con) UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT 462 Fed. Appx. 26; 2012 U.S. App. LEXIS 2737; 2012-1 Trade Cas. (CCH) P77,794 brings up some interesting issues.  Did the law firm misappropriate her trade secrets and then give them to other clients for profit?

"However, we vacate the District Court’s judgment to the extent that it dismissed Gurvey’s claims for attorney malpractice and breach of fiduciary duty against the Cowan defendants. Construing the TAC liberally, accepting all the factual allegations in the complaint as true, and drawing all reasonable inferences in Gurvey’s favor, see Bell Atl. Corp., 550 U.S. at 570, we conclude that Gurvey stated a plausible claim by alleging that the defendants used the information given to them as part of a confidential attorney-client relationship to their own advantage by disclosing it to other clients who then profited therefrom to Gurvey’s detriment, see Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d 1, 10, 865 N.Y.S.2d 14 (1st Dep’t 2008). 8 We therefore remand the cause for further proceedings before the District Court on these claims.

FOOTNOTES

8 The plausibility of this argument is bolstered by Gurvey’s allegation that Cowan withdrew from representing Gurvey before the United States Patent and Trademark Office due to what Cowan allegedly termed a "conflict of interest."

In an unusual turn of events, defendant moved to amend his answer and for summary judgment.  His motion was denied, and he took an appeal.  In an unusual timing situation, trial and verdict in the case , Borges v Placeres  2012 NY Slip Op 51883(U)  Decided on October 3, 2012 Appellate Term, First Department favor of plaintiff mooted his appeal.

"It being undisputed that the underlying legal malpractice action has now been tried to completion and judgment entered in plaintiff’s favor, defendant’s appeal from the interlocutory order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248 [1976]). The issues raised here by defendant are reviewable upon appeal from the judgment (see CPLR 5501[a][1]). "