Here’s a fairly simple case. Plaintiff signs a real estate contract with a mortgage contingency. If she cannot obtain a mortgage she must give notice. If she properly gives notice she gets her down payment back. She hires attorney who negligently fails to give notice. She does not get her down payment back. Legal malpractice?

The opaque decision from the Second Department tells us no. It doesn’t exactly tell us why,. Beyond that, the rationale is murky. Bells v Foster 2011 NY Slip Op 03195 Decided on April 19, 2011 Appellate Division, Second Department say: "Here, the plaintiff failed to establish her prima facie entitlement to judgment as a matter of law because she failed to demonstrate that any negligence on the defendant’s part in failing to timely cancel the contract of sale on her behalf was the sole proximate cause of her damages (see Snolis v Clare, 81 AD3d 923; see also Selletti v Liotti, 22 AD3d 739; compare Logalbo v Plishkin, Rubano & Baum, 163 AD2d 511). Accordingly, the Supreme Court erred in granting the plaintiff’s motion for summary judgment on the issue of liability.

The Supreme Court properly denied the defendant’s cross motion for summary judgment dismissing the complaint. The defendant failed to make a prima facie showing of his entitlement to judgment as a matter of law since he failed to show that the plaintiff was unable to prove at least one of the essential elements of her legal malpractice cause of action (see Mueller v Fruchter, 71 AD3d 650, 651; Velie v Ellis Law, P.C., 48 AD3d 674, 675; Pedro v Walker, 46 AD3d 789, 790; Eisenberger v Septimus, 44 AD3d 994, 995; Shopsin v Siben & Siben, 268 AD2d 578, 578-579). "

Well, then, plaintiff failed to show that the attorney negligence was the "sole proximate cause" Isn’t that enough?

But, then, what of Barnett v. Schwartz, 2007 NY Slip Op 09712 [47 AD3d 197] ?

"First, the parties have not cited, and research has not revealed, any case from the Court of Appeals or any other court expressly holding that "but for" causation is synonymous with sole proximate cause, or that requires a degree of causation in legal malpractice cases greater than proximate cause, i.e., greater than that which must be typically proved as against any other professional or lay defendant in a negligence action. Similarly, the parties have not cited, and research has not revealed, any case discussing or identifying any basis for singling out attorneys for special treatment on the issue of causation. The Pattern Jury Instruction on legal malpractice, which focuses upon the lawsuit-within-a-lawsuit scenario, does not expressly use either the phrase "but for" or "proximate cause" in its formulation (PJI 2:152). However, the comments to the instruction, while noting the "but for" formulation, provide that a defendant-attorney’s negligence need only be [*5] "a" proximate cause of damages and refer the reader to the general Pattern Jury Instruction on proximate cause (1 NY PJI 2:152, at 872, 880 [2008] PJI 2:70). Moreover, our reading of the case law does not reveal that a heightened standard for causation is actually being applied in legal malpractice cases. Rather, all results can be explained by application of general principles of proximate cause. For example, in the lawsuit-within-a-lawsuit scenario, the plaintiff-client must prove that but for the defendant-attorney’s negligence they would have prevailed in the underlying action.

Well, consistency may be overrated.
 

A Long Island practitioner persisted in moving and appealing, and the AD rewarded him with reversal of the dismissal of two of the causes of action in his case. In Hoffman v Colleluori
2011 NY Slip Op 05669 ; Appellate Division, Second Department we see the AD calculating the statute of limitations for plaintiff, and his ability to sue.
 

"The Supreme Court erred in, upon reargument, adhering to its original determination granting those branches of the defendants’ motion which were pursuant to CPLR 3211(a)(1) and (7) to dismiss the second and third causes of action to recover damages for legal malpractice. "A motion to dismiss pursuant to CPLR 3211(a)(7) will fail if, taking all facts alleged as true and according them every possible inference favorable to the plaintiff, the complaint states in some recognizable form any cause of action known to our law" (Kennedy v H. Bruce Fischer, Esq., P.C., 78 AD3d 1016, 1018 [internal quotation marks and citation omitted]; see Arnav Inds., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 303).

Accepting all the facts alleged in the complaint as true, the allegations are sufficient to state a cause of action to recover damages for legal malpractice in an underlying federal civil rights action. The plaintiff alleged in his complaint, inter alia, that the defendants failed to assert the underlying causes of action before the expiration of the applicable statutes of limitations, and that their negligence was a proximate cause of his damages (see Jennings v Raso, 251 AD2d 380, 380). While most of the underlying causes of action were time-barred before the plaintiff retained the [*2]defendants, the plaintiff’s claim under 42 USC § 1983 arising from malicious prosecution was viable at the time the defendants commenced the federal action on the plaintiff’s behalf (see Palmer v State of New York, 57 AD3d 364, 364; Pendelton v City of New York, 44 AD3d 733, 737). Moreover, contrary to the defendants’ contention, the complaint "set forth allegations from which damages attributable to the defendant[s’] alleged malpractice might be reasonably inferred" (Caruso, Caruso & Branda, P.C. v Hirsch, 41 AD3d 407, 410; see Fielding v Kupferman, 65 AD3d 437, 442).

The Supreme Court also erred in, upon reargument, adhering to its original determination granting those branches of the defendants’ motion which were pursuant to CPLR 3211(a)(1) to dismiss the legal malpractice causes of action. A motion pursuant to CPLR 3211(a)(1) may be granted "only where the documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; see Thompsen v Baier, 84 AD3d 1062). Here, the documentary evidence did not conclusively establish that all of the underlying causes of action were time-barred before the plaintiff retained the defendants. "

Barely submerged below the decisions of trial and appellate courts is the fear that if legal malpractice litigation is given full rein, there will be a legal malpractice case which immediately follows every trial of any nature. After all, the one thing that legal malpractice always has are claims of attorney misrepresentation, and every trial has one or more attorneys. So, in Kleinser v Astarita 2012 NY Slip Op 01130 ;; Appellate Division, First Department we see such a situation. Plaintiff sues and loses a case, and then sues and loses a legal malpractice.
 

"We need not decide the statute of limitations issue, because even if timely commenced, plaintiff failed to raise an issue of fact as to his claims of legal malpractice and breach of contract. Plaintiff’s contention that defendants did not place before the trial court in the underlying action the evidence of his ownership interest in the "47BH Account" is unsupported in the record. The trial court in the underlying action expressly found that plaintiff had a 1/3 interest in the 47BH Account. Moreover, the court explained, in detail, that that 1/3 interest entitled plaintiff to recover only $37,108, not the much greater sums he sought. Plaintiff does not argue that the court’s calculation of damages was erroneous or a result of defendants’ negligence. Hence, he failed to show that any negligence on defendants’ part proximately caused him to recover less than he was otherwise entitled to (see Brooks v Lewin, 21 AD3d 731, 734 [2005], lv denied 6 NY3d 713 [2006]). To the extent plaintiff argues that defendants did not sufficiently emphasize his ownership in the 47BH account, the argument is unavailing, since an insufficient emphasis would be, "at most, a mere error in professional judgment not rising to the level of legal malpractice" (see Geller v Harris, 258 AD2d 421, 421 [1999]; Rubinberg v Walker, 252 AD2d 466, 467 [1998]).
As to his breach of contract claims, plaintiff failed to present evidence establishing the term of his alleged oral agreement with defendant Martin Kaplan whereby Kaplan agreed that defendant Gusrae Kaplan & Bruno would prosecute all appeals from the underlying judgment for no more than $50,000. "

It is often said (and sometimes sanctimoniously) that the legal malpractice claimant is simply trying to gain an advantage, or to avoid paying legal fees. Here, in Matter of Price ; 2011 NY Slip Op 05814;  Appellate Division, Second Department we see a different use of the claim. "Respondent" is an attorney-escrow agent.

"In or about September and October 2005, SDLH was engaged in negotiations to sell its business to Great South Bay Automotive, Inc. (hereinafter Great South Bay). At or about that time, the respondent represented SDLH. Great South Bay, whose principals were Robert Gerstacker and Rob Despres, was represented by Richard Bartel.

Prior to the closing, a Notification of Sale, Transfer, or Assignment of Bulk, dated September 20, 2005 (hereinafter the Notification), was sent to the New York State Department of Taxation and Finance (hereinafter the DTF). The respondent was listed in the Notification as escrow agent in connection with the sale of SDLH. [*2]

At the closing, the respondent signed an escrow agreement wherein he acknowledged, inter alia, that he received a check payable to himself, as attorney, in the amount of $82,393.02. From this money, the respondent further acknowledged that he would undertake to satisfy "the State, Suffolk Auto and Exhaust Warehouse." The reference to "the State" in the escrow agreement was to a tax liability owed by SDLH to New York State.

In or about February 2006, New York State issued a Notice of Determination assessing $58,890.03 against Great South Bay for the unpaid taxes of SDLH. By order to show cause, summons, and verified complaint dated April 26, 2006, Great South Bay and its principals commenced an action in the Supreme Court, Suffolk County, against SDLH, its principals, and the respondent entitled Great South Bay Automotive, Inc. v SDLH Automotive Inc., under Index No. 12040/06. The complaint alleged, inter alia, breach of contract due to the failure of SDLH and the respondent to satisfy the tax liability owed to New York State. In addition, there were causes of action to recover damages for fraud and breach of fiduciary obligations on the part of the respondent, as escrow agent, based upon his failure to satisfy the tax liability pursuant to the escrow agreement.

The respondent represented SDLH, its principals, and himself in the action. On behalf of SDLH and himself, the respondent submitted a verified answer sworn to on May 23, 2006. He thereafter submitted an affidavit in opposition to the order to show cause, sworn to on May 24, 2006, on behalf of SDLH and himself. In his affidavit in opposition, the respondent asserted, inter alia, that "at no time did your deponent receive any money from sales tax. There was no known debt to the State." The respondent further asserted that, pursuant to the Agreement for the sale of SDLH, he was required to hold only $1,000 in escrow to guarantee that SDLH received a release from New York State in connection with "unpaid sales tax" due. Great South Bay moved for summary judgment by notice of motion dated September 14, 2006.

By summons and third-party complaint dated September 25, 2006, and October 3, 2006, respectively, the respondent commenced a third-party action on his own behalf against Richard Bartel, attorney for Great South Bay, and its principals, entitled Price v Bartel. The respondent [*3]alleged, inter alia, that Bartel committed legal malpractice in his representation of Great South Bay in its purchase of SDLH.

The order also dismissed the third-party action, reciting that the third-party complaint "fails to state any cognizable cause of action and . . . Price lacks standing to assert certain claims." Specifically, the Supreme Court stated that "Price’s claim for malpractice must fail because he lacks standing to assert such claim against Bartel as he was not in an attorney-client relationship with him. Moreover, on the merits, Price has failed to set forth any of the elements of a prima facie case of legal malpractice [citations omitted]."
 

The decision doesn’t tell us in what capacity the attorneys represented the client, but they are now in suit over legal fees, with a legal malpractice counterclaim. As we read this case, we wondered whether the time and effort was worth it. Will there ever be a collection of fees?

in Bender, Jenson & Silverstein, LLP v. Walter ; 2009 NY Slip Op 08572 ; ;Appellate Division, Second Department the attorney is seeking fees. Defendant-counterclaimant asked the court to "assign counsel", a sure sign that the client has few funds. The Court declined, and the Appellate Division determined that "on the Court’s own motion, the appeal from the first order dated June 6, 2008, is dismissed, on the ground that no appeal lies as of right from an order that does not affect a substantial right of the appealing party (see CPLR 5701[a][2][v]), and we decline to grant leave to appeal." Next, the court looked at plaintiff’s claim that she could not afford photocopies.
 

The balance of the decision covers a frequent situation in pro-se representation; getting tangled up in discovery problems. "The plaintiff sought to recover its fee for legal services provided to the defendant, who asserted counterclaims sounding in legal malpractice. In response to the plaintiff’s requests for the production of documents, the defendant claimed to be without financial resources to photocopy the requested documents and refused to produce them, in spite of the plaintiff’s offer to bear the cost of photocopying. [*2]

Since the defendant failed to establish that she made any effort to comply with the plaintiff’s repeated discovery requests, the Supreme Court properly considered her lack of cooperation to be willful and contumacious, and properly conditionally granted the plaintiff’s motion to preclude her from introducing the requested documents in evidence (see Kihl v Pfeffer, 94 NY2d 118; D’Aloisi v City of New York, 7 AD3d 750; Brooks v City of New York, 6 AD3d 565; Donovan v City of New York, 239 AD2d 461; cf. Scardino v Town of Babylon, 248 AD2d 371).

In light of the defendant’s noncompliance with discovery, the Supreme Court properly denied her motion to quash certain subpoenas which had been served on nonparty witnesses

Experts are often needed in litigation, and always in medical malpractice litigation. Med Mal cases are lost and it is sometimes thought that they are lost because of experts. Was the expert good enough? Did the expert "give" the departures?

In Healy v Finz & Finz, P.C. 2011 NY Slip Op 01616 Appellate Division, Second Department we see an awful choice foisted on parents. Mother has triplets, one is dying in utero. The two others are well but very small, and at risk for low birth weight. What to do?
 

One child was "born with periventricular leukomalacia, a form of cerebral palsy that renders him dependent on others for his basic needs. There is no dispute that the infant plaintiff’s condition resulted from him sharing a placenta with his deceased brother.

"The plaintiffs retained the defendant law firm, Finz & Finz, P.C. (hereinafter the firm), to represent them in the underlying medical malpractice action, which they commenced in 1997. The firm’s theory of the case was that the doctors should have delivered the surviving babies immediately after learning of Sean’s death, and that the delay caused Kevin’s injury. Most of the defendants in the medical malpractice action obtained summary judgment dismissing the complaint insofar as asserted against them, and the one defendant who went to trial obtained a directed verdict dismissing the case. The plaintiffs’ expert medical witnesses were unable to testify as to when Kevin’s injury occurred, acknowledging that it could have been immediately after Sean’s death. Thus, the Supreme Court held that the plaintiffs could not establish the proximate cause element of medical malpractice. This Court affirmed (see Healy v Spector, 287 AD2d 541). "

"The plaintiffs thereafter commenced the instant action alleging legal malpractice [*2]against the firm. The firm moved for summary judgment dismissing the complaint, submitting in support the affirmations of three physicians, in which they stated that Kevin’s injury was caused by Sean’s death. The plaintiffs submitted the affirmation of their own expert physician in response, who stated that, although Sean’s death caused Kevin’s injuries, the damage would have occurred over time. They also submitted the affirmation of an attorney, who stated that the firm failed to exercise the care and skill commonly exercised by a member of the legal profession, because its attorneys failed to find an appropriate medical expert. The Supreme Court denied the firm’s motion for summary judgment dismissing the complaint. We reverse"

""Attorneys are free to select among reasonable courses of action in prosecuting clients’ cases without thereby exposing themselves to liability for malpractice" (Iocovello v Weingrad & Weingrad, 4 AD3d 208, 208). Here, the firm established, prima facie, that its choice of experts in this case was a reasonable course of action, and the plaintiffs failed to raise a triable issue of fact in opposition. The conclusory assertion of the plaintiffs’ expert attorney—that the firm simply chose the wrong experts—is insufficient to sustain a cause of action alleging legal malpractice (see Dimond v Kazmierczuk & McGrath, 15 AD3d 526, 527). Moreover, the affirmation of the plaintiffs’ expert physician was itself conclusory and was, thus, insufficient to raise a triable issue of fact in opposition to the motion for summary judgment (see Brady v Bisogno & Meyerson, 32 AD3d 410). As the firm demonstrated that it could not have proven proximate cause in the underlying medical malpractice action, and as the plaintiffs failed to raise a triable issue of fact in opposition, the Supreme Court should have granted the firm’s motion for summary judgment dismissing the complaint (see generally Zuckerman v City of New York, 49 NY2d 557, 562). "
 

CLE lecturers almost always warn the listener not to sue for fees. They tell attorneys at the lectures that there will be an inevitable legal malpractice counterclaim. In the case of sole practitioners or small firms, a comparison of their insurance deductible with the fee claim should be made, because they may have to pay the deductible even before they have any possibility of collection.

One legal malpractice claim which comes up regularly is a law firm that takes a case for "investigation" or simply takes a case, and then drops it just before the statute of limitations expires. This seems to happen more often in medical malpractice. An expert (at least theoretically) must be on board before bringing the case (certificate of merit) and sometimes attorneys take on a case in the hope of a pre-complaint settlement, or in the hope of getting an expert. When neither happens, they give the case back to the client. Is this legal malpractice? Is a similar situation where the attorneys wait until the very last minute to work on a motion legal malpractice?

In Hinshaw & Culbertson, LLP v e-Smart Tech., Inc. ;2011 NY Slip Op 30651(U); Sup Ct, New York County; Docket Number: 113108/09; Judge: Judith J. Gische we see that the latter situation is not a good legal malpractice claim.

"Fritz and Hinshaw have successfully established – and Smart does not disagree -that Fritz and
Hinshaw were discharged as their lawyers August 1, 2008. It is also unrefuted that there was a pending motion in one of the California cases in which Smart’s opposition was due August 4, 2008. Smart’s argument, that it was negligent for Fritz and Hinshaw to wait until the last moment to work on the motion, which is why they were discharged, does not support a claim for legal malpractice. No deadline was missed. The supplemental claim, that Smart had to scramble to find new lawyers, is also unavailable. To establish a prima facie case of legal malpractice or negligence, the client must plead and prove facts tending to show that the law firm: 1) failed to exercise that degree of care, skill, and diligence commonly possessed and exercised by an ordinary member of the legal community, 2) that such negligence was the proximate cause of the actual damages sustained by the plaintiff and, 3) that “but for” the defendant’s negligence, the plaintiff would have been successful in the underlying matter (Laventure v, Galeno, 307 AD2d
255 [Ist Dept. 2003] ;Wexler v. Shea & Gould, 21 I AD2d 450, 621 NYS2d 858 [Ist Dept. 1995]. The facts do not support any of these elements and the claim for legal expenses spent to hire another attorney is not a malpractice claim. Therefore, Fritz and Hinshaw’s motion to dismiss the legal malpractice claim based upon the failure to timely prepare a response to the motion in the California action granted and that aspect of the malpractice claim is severed and dismissed."
 

The early days of the 20th century brought us the Robber barons, and the rise of corporations. The interconnectedness and remote nature of the relationships challenged the Courts, and led to a school of "better practice" business aspiration. Today, as long as a profit motive exists, there will be arrangements between persons which are created to mask the true nature of financial relationships. South Shore Neurologic Assoc., P.C. v Ruskin Moscou Faltischek, P.C. ; 2011 NY Slip Op 50801(U) ; ; Supreme Court, Suffolk County ; Pines, J. is a prime example. We urge you to read the facts to determine the relationship between the law firm and its numerous corporate clients. Here are the rules, put forth by Justice Pines, to determine whether there has been breach of fiduciary duty.
 

"In order to establish a claim for breach of fiduciary duty, a Plaintiff is required to demonstrate 1) the existence of a fiduciary relationship; 2) misconduct by the Defendant; and 3) damages directly caused by such conduct. Kurtzman v Bergstol, 40 AD3d 588, 835 NYS2d 644 ( 2d Dep’t 2007). Whether a fiduciary relationship exists between parties is necessarily fact specific. AG Capital Funding Partners, LP v State Street Bank and Trust Co, 11 NY3d 146, 866 NYS2d 578, 896 NE2d 91 (2008). An attorney stands in a fiduciary relationship to his or her client, Graubard Mollen Dannett & Horowitz v Moscovitz, 86 NY2d 112, 629 NYS2d 1009, 653 NE2d 1179 (1995), and is thus charged with a high degree of undivided loyalty to his or her client. Kelly v Greason, 23 NY2d 368, 296 NYS2d 937, 244 NE2d 456 [*5](1968). However, a violation of a disciplinary rule, without more, is insufficient to state an action for breach of fiduciary duty. Schwartz v Olshan Grundman Frome & Rozensweig, 302 AD2d 193, 753 NYS2d 482 (1st Dep’t 2003).

The statute of limitations for breach of fiduciary duty is dependent on the substantive remedy sought by the plaintiff. Thus, a six year statute applies, where equitable relief is sought; and a three year statute applies where the "injury to property" is the gravamen of the action. CPLR §§213(1), 214. The claim accrues, for statue of limitations purposes, when the fiduciary has repudiated his or her obligation. Westchester Religious Institute v Kamerman, 262 AD2d 131, 691 NYS2d 502 (1st Dep’t 1999). Westchester Religious Institute v Kamerman, 262 AD2d 131, 691 NYS2d 502 (1st Dep’t 1999). The doctrine of "continuous representation" tolls the running of this statute where the claim is brought against an attorney fiduciary but only so long as the defendant continued to represent the Plaintiff in connection with the transaction that is the subject of the action as opposed to general representation. Transport Workers Union of America Local 100 AFL-CIO v Schwartz, 32 AD3d 710, 821 NYS2d 53 (1st Dep’t 2006).

Under the Code of Professional Responsibility (now the Rules of Professional Conduct, 22 NYCRR 1200 et. seq.) a lawyer may not concurrently represent clients with adverse interests nor take on a new client whose interests are adverse to an existing client. Where an attorney represents multiple clients and a situation arises posing potential conflicts among them, the attorney may not undertake the representation of any of the clients unless continued involvement is with the full consent of all parties upon complete disclosure. Kelly v Greason, supra. Whether an attorney-client relationship exists depends on the actions of the parties, as there are no set of rigid rules as to what is required to form an attorney-client relationship. See, McLenithan v McLenithan, 273 AD2d 757, 710 NYS2d 674 (3d Dep’t 2000).

In an action for fraud, a plaintiff must demonstrate that the defendant misrepresented or omitted a material fact which was false and known to be false and made for the purpose of the other party to rely upon it, justifiable reliance by such party on the misrepresentation or material omission, and injury resulting therefrom. Ross v Louise Wise Services, 8 NY3d 478, 836 NYS2d 509, 868 NE2d 189 (2007); see, Graubard Mollen Dannett & Horowitz v Moscovitz, 86 NY2d 112, 629 NYS2d 1009, 653 NE2d 1179 (1995). In this vein, an attorney may be liable to non-clients for wrongful acts if guilty of fraud or collusion or of a malicious or tortious [*6]act. Koncelik v Abady, 179 AD2d 942, 578 NYS2d 717, Callahan v Callahan, 127 AD2d 298, 514 NYS2d 819 (3d Dep’t 1987). The statute of limitations for fraud is six years from the accrual of the claim or within two years from the actual or imputed discovery of the fraud. CPLR 213 (8), 203 (f); see, Trepuk v Frank, 44 NY2d 723, 405 NYS2d 452, 376 NE2d 924 (1978). As with the claim for breach of fiduciary duty, the continuous representation doctrine tolls the running of the statute of limitations against a professional defendant, but only so long as the defendant continues to represent the plaintiff in connection with the transaction and not merely the continuation of the general professional relationship. Transport Workers Union of America Local 100 AFL-CIO v Schwartz, supra. Punitive damages are not recoverable in the ordinary fraud case, but may be recovered where the fraudulent act is gross, involves high moral culpability and is aimed at the general public. Walker v Sheldon, 10 NY2d 401, 223 NYS2d 488, 179 NE2d 497 (1961).

Finally, one who owes a duty of fidelity or loyalty to another and is faithless in performance of such duty is generally disentitled to recover compensation for his services. Feiger v Iral Jewlry Ltd, 41 NY2d 928, 394 NYS2d 626, 363 NE2d 350 (1977). "