Legal Malpractice and Attorney Fees are coupled throughout the case law involving attorneys.  They generally arrive on the scene together, and resolution of one generally disposes of the other.  In Daniel R. Wotman & Assoc., PLLC v Chang  2012 NY Slip Op 31845(U)  July 9, 2012
Supreme Court, New York County  Docket Number: 110893/2010  Judge Judith J. Gische writes about many of the typical tropes:  attorneys trying to change the terms of flat fees into hourly rates, attorneys deciding that the client just isn’t reasonable about settlement, clients not wanting to settle, clients getting bills and making a decision to pay a little, and cajole the attorney into doing something on appeal, attorneys leaving "biglaw" and trying to make it in the more modest legal world.

Plaintiff is a law firm named after its principal, Daniel R. Wotman, Esq. Chang  was a 50% shareholder in 207 Second Avenue Realty Corp. ("corporation"). The other shareholders (Ruby and Wilson Chang) held the remaining 50% interest. The corporation owned the building located at 207 Second Avenue, New York, New York. The law firm contends it is owed legal fees by Chang in the principal amount of $438,31 I .19 for legal services rendered in pursuit of three related cases involving Chang as follows: Citidress II Cora. v, 207 Second Avenue Realtv Carp, , Index
No.121848199 ("Citidress"), Gold Citv Commercial Bank v. 207 Second Avenue Corp, Index No. 104319 /93 ("Gold City") and Janet Chang, as assignee v. Botsacos, Index No. 2242/86.

Citidress and Gold City were each foreclosure actions. In Citidress, Chang brought a cross claim against her fellow shareholders (Wilson and Ruby Chang), alleging that they obtained a mortgage secured by the building without her knowledge. Chang subsequently bought the mortgage from Gold City, but was apparently never substituted as named plaintiff. In September 2007, Chang sold the building for $5,000,000 and Hon. Alice Schlessinger, the judge presiding over the Citidress case, dealt with various issues resolving that action. The Cartelli case is for legal malpractice.
Chang alleges that Thomas Cartelli, Esq. (now deceased), assisted the other shareholders in obtaining the mortgage through fraudulent means, including phony board minutes.

Chang, Individually and as Officer and Director of the corporation, entered into two (2) separate retainer agreements with the law firm.

Following B ten day trial on the Cartelli malpractice claim, at which Chang was represented by Wotman, on October IO, 2002, the jury returned a verdict in favor of Chang. The award consisted of $1,930,491 on the malpractice claim, $3,000,000 in punitive damages and $176,000 In legal fees. The jury found that Thomas Cartelli had been negligent and assisted the other shareholders (Wilson and Ruby Chang) in obtaining a mortgage without Janet Chang’s written consent, etc., and that Cartelli’s negligence had resulted in the diversion of the mortgage proceeds. Judgment was not immediately entered by Wotman In the Cartelli action.

A few months later, on June 13,2003, Cartelll’s malpractice insurance carder, The Home Insurance Company, was declared insolvent and The Superintendent of Insurance took possession of its property and assets (Supreme Court Index No. 402871-2003). Wortman did not enter judgment In the Cartelli malpractice action until several years later, on August 10, 2010. After serving the judgment on the Superintendent of Insurance, Wotman was notified (on August 19,2010) that the Liquidation Bureau had rejected the judgment on the basis that “it was not entered in accordance with applicable law.” The Cartelli judgment was appealed and affirmed on
appeal (Chang v. Botsacosa, 92 A.D.3d 610 [1st Dept 2012). No portion of the Cartelli judgment has been satisfied to date."

Meanwhile, in August 2004, Wotman moved to be relieved as counsel in the Citidress and Golden City motions, stating that Chang was "ignoring" his legal advice and pursuing that case and others "merely for the purpose of harassing and maliciously injuring other parties, including [the law firm]." Wotman also stated that mandatory withdrawal by his firm was necessary because "Chang and [the corporation] are out of control. Our law Firm cannot bring these clients under control … They are not following our advice and instructions.. ." The motion was argued before Justice Heitlar on the record (Steno Minutes 10/6/04)2 and Chang stated that relieving Wotman would prejudice her case because he had taken it on a contingency basis "with a flat charge for some other matters
because he knew that I was not able to pay [legal fees] after many, many lawyers sort of like given up because I was not paying." Chang also stated that Wotman, who had recently left a "big law firm" was "[putting] quite a bit of pressure for me to give up the malpractice case, which is something that he did not have experience [with] …" According to Chang, once Wotman was no longer with that "big firm," he started "[asking] me to give money to him, which I did not have. In fact, then he suggested that he should use the money in the receiver’s account and I agreed to allow him to apply to the Judge to have the use of that money, which would be deducted against the final payment of the contingency fee and fortunately, Judge Lebedeff declined to allow him
use [of] that money."  Justice Heitler, noting that the retainers were not a part of the record, asked
whether Wotman was owed any legal fees. He responded that he was and that his retainer agreement had "expired a while ago-back In April of 2001, it was a limited fee retainer …" The issue of whether there it was a conflict of interest for the corporation and Chang to have been jointly represented by Wotman was also raised during that oral argument. According to Wotman, that conflict had been "waived." Wotman’s motion to be relieved was granted by Justice Heitler.

We’ll continue with this attorney fee primer on Monday.

People start LLCs and other juridical entities in order to obtain a shield from personal liability.  Interests change over time which can cause difficulties later.  Brach v Levine    2012 NY Slip Op 51312(U)   Decided on July 16, 2012   Supreme Court, Kings County   Battaglia, J. is an example. 

Despite the shocking allegation that defendant " Levine allegedly altered the documents, and on November 15, 2006, the mortgage was recorded as against 420 Marcy Avenue, LLC, plaintiff 519 Marcy LLC, and Frankwink Properties, Inc., in addition to 222 Skillman, LLC, 189 Spencer LLC, and 401 Bedford LLC.  Levine allegedly altered the signature page by "adding wholly new parties to the agreement" we see that litigation against him is difficult.

"In their pre-answer motion to dismiss, defendants Michael J. Levine and D’Agostino, Levine, Landesman & Lederman, LLP contend that they are entitled to dismissal of the action as against them on the grounds that plaintiffs Mendel Brach, Moshe Roth, and 519 Marcy LLC either lack capacity to sue (see CPLR 3211[a][3]) or lack standing to bring the action. In addition, Defendants contend that the allegations in the Verified Complaint do not state a valid cause of action for fraud because, among other things, neither Mendel Brach nor Moshe Roth were party to any of the alleged transactions, and did not sustain any actual damages as a result of Defendants’ alleged fraudulent conduct. (See CPLR 3211[a][7]"

"In Community Board 7 of the Borough of Manhattan v Schaffer (84 NY2d 148 [1994]), the Court of Appeals discussed the distinction between dismissal for lack of capacity, lack of standing, and for failure to state a cause of action.

"[T]he concept of capacity is often confused with the concept of standing, but the two legal doctrines are not interchangeable. Standing is an element of the larger question of justiciability’. The various tests that have been devised to determine standing are designed to ensure that the party seeking relief has a sufficiently cognizable stake in the outcome so as to cast the dispute in a form traditionally capable of judicial resolution. Often informed by considerations of public policy, the standing analysis is, at its foundation, aimed at advancing the judiciary’s self-imposed policy of restraint, which precludes the issuance of advisory opinions.
Capacity,’ in contrast, concerns a litigant’s power to appear and bring its grievance before the court. The concept of a lack of capacity, which has also occasionally been intermingled with the analytically distinct concept of a failure to state a cause of action, does not admit of precise or comprehensive definition. Capacity, or the lack thereof, sometimes depends purely upon a litigant’s status." (Id. at 154-55 [internal quotation marks, brackets, and citations omitted].)
In addressing these issues with respect to plaintiff 519 Marcy LLC, Defendants’ contention is most easily resolved based upon lack of capacity to sue pursuant to CPLR 3211(a)(3). (See e.g. Security Pacific National Bank v Evans, 31 AD3d 278, 279 [1st Dept 2006] [an objection to "plaintiff’s status [as a non-existent corporation] is properly understood as questioning legal capacity, not standing"].)

In this regard, Defendants contend that 519 Marcy LLC lacks legal capacity to sue because it was merged into 222 Skillman, LLC on February 11, 2003, and has been an inactive entity since 2003. It has been held that a business corporation that is merged with, and completely absorbed by, another corporation ceases to exist as an independent jural entity, and, therefore, lacks legal capacity to sue. (See Westside Federal Savings & Loan Association of New York City v Fitzgerald, 136 AD2d 699, 699 [2d Dept 1988]; see also e.g. Lance International, Inc. v First National City Bank, 86 AD3d 479, 480 [1st Dept 2011] [dissolved corporation lacks capacity to sue unless in the course of winding up its affairs]; cf. Security Pacific National Bank v Evans, 31 AD3d at 279.) "

""Generally corporations have an existence separate and distinct from that of their shareholders and an individual shareholder cannot secure a personal recovery for an alleged wrong done to a corporation. The fact that an individual closely affiliated with a corporation (for example a principal shareholder, or even a sole shareholder), is incidentally injured by an injury to the corporation does not confer on the injured individual standing to sue on the basis of either that indirect injury or the direct injury to the corporation". (New Castle Siding Co., Inc. v Wolfson, 97 AD2d 501, 502 [2d Dept 1983], aff’d 63 NY2d 782 [1984]; see also Baccash v Sayegh, 53 AD3d 636, 639 [2d Dept 2008] ["Although it is undisputed that the plaintiff is Bridal Coutrue’s sole officer and shareholder, a corporation has a separate legal existence from its shareholders even where the corporation is wholly owned by a single individual"].) "[C]ourts are loathe to disregard the corporate form for the benefit of those who have chosen that form to conduct business". (Baccash v Sayegh, 53 AD3d at 639 [quoting Harris v Stony Clove Lake Acres, 202 AD2d 745, 747 (3d Dept 1994)].) [*5]

The caselaw cited above appears to consider the issue in terms of both "standing to sue" (New Castle Siding Co., Inc. v Wolfson, 97 AD2d at 502) and "having a cause of action" (id.) . However, in Matlinpatterson ATA Holdings LLC v Federal Express Corp. (87 AD3d 836 [1st Dept 2011], the court analyzed the "standing" issue as a "threshold matter" in the context of a motion for failure to state a cause of action pursuant to CPLR 3211(a)(7), and continued to consider whether any recognizable cause of action could be discerned from the complaint despite noting that the plaintiff may not have had "standing". (See id.) Similarly, in Baccash v Sayegh (53 AD3d 636), the court addressed the issue in terms of the plaintiff’s failure to prove at trial the elements of a cognizable cause of action. (See id. at 639.) In this regard, the court found that the plaintiff, the sole shareholder and owner of a corporation, did not prove that she suffered any direct damages as result of the defendant’s legal malpractice. (See id. at 640.)

In Sealy v Clifton, LLC (68 AD3d 846 [2d Dept 2009]), the Second Department held that an individual plaintiff, who owned a 50% interest in an limited liability company, did not have "legal capacity to sue" for partition of a property owned by a limited liability company of which he was member. (See id., at 847.) The court also noted that a member of a limited liability company "has no interest in specific property of the limited liability company". (See id.; see also Limited Liability Company Law § 601; see also e.g. Yonaty v Glauber, 40 AD3d 1193, 1195 [3d Dept 2007].) "

After all this, the individual plaintiff’s complaint is dismissed.

In New York City condominiums are a rich source of litigation.  At the ownership level, one sees litigation over the buying and selling; at a personal injury level, one sees slips and falls.  In the construction of the buildings, negligence and indemnification between general contractors and subs is an ongoing field of law.  Here, in Flintlock Constr. Servs., LLC v Rubin, Fiorella &
Friedman LLP;   2012 NY Slip Op 31835(U)  July 9, 2012  Supreme Court, New York County
Docket Number: 109657/2011  judge: Saliann Scarpulla we see how the insurance carriers move their attorneys around in a never ending circle of litigation.

"As alleged in the complaint, FCS is a general contractor, and RFF is a law firm  which was designated by FCS’s insurer to represent FCS in a construction dispute.  CS states in the complaint that on or about March 30, 2004, FCS entered into a standard AIA form contract with owner Well-Come Holdings, LLC (“Well-Come”) (the contract”) for the construction of an 8-story condominium apartment project located at 06 Mott Street, in New York City (the “Mott Street project”). FCS alleges that pursuant o the contract, “FCS’s responsibilities were limited and its indemnification obligations ere limited to damages caused by its own conduct; it had not indemnity or other obligations with respect to the scope of work reserved for Well-Come, and . . . it had no obligations to indemnify Well-Come for Well-Come’s own negligence or that of Well- Come’s subcontractors or ~consultants.~F’C S also pleads that it was required to provide insurance to protect FCS and Well-Come from claims of property damage stemming from performance of the contract.

FCS alleges that during the early stages of construction at the Mott Street project in the summer of 2004, one or more ‘Occurrences”to took place which allegedly caused property damage to three adjacent property owners. These owners filed three separate lawsuits in Supreme Court, New York County, against Well-Come, FCS and some of Well-Come’s subcontractors and consultants (the “underlying litigation”). Well-Come was originally defended in the underlying litigation by Marine pursuant to its liability policy. FCS was defended by American Safety, which assigned the defense to RFF. FCS alleges that at various times from 2004 through 2009, RFF defended
multiple claims asserted by numerous parties against FCS at the request and direction of American Safety or American Safety Indemnity Company,’ and that RFF regularly reported to American Safety’s claims personnel about developments and strategies in the defense of the claims against FCS.

At some point, FCS and American Safety came to an agreement whereby FCS  would pay the cost of its defense in any given claim up to and including the amount of the self-insured retention under its American Safety policy. Upon exhaustion of the self insured retention for each claim, as alleged in the complaint, American Safety would pay for FCS’s defense.  FCS alleges in the complaint that although both American Safety and FCS are named as defendants in the declaratory judgment action, RFF entered an appearance and filed pleadings only on behalf of FCS. Further, FCS alleges that American Safety admitted in the declaratory judgment action that it issued both primary and excess coverage to FCS as required by the contract, but denied that Well-Come was an
“additional insured” under its policy or that it had any duty to defend or indemnify Well- Come as an additional insured under any insurance policy issued by American Safety to FCS.
 

Here, the underlying litigation is still pending, therefore Well-Come’s negligence remains an open question. And as RFF acknowledges in reply, before it can be determined whether FCS suffered damages caused by the execution of the stipulation of dismissal, it must first be determined whether Well-Come was negligent.Moreover, FCS has sufficiently pled the existence of actual damages. FCS states in the complaint that because of the stipulation of dismissal, it now faces a claim by Well- Come and its insurer for in excess of $100,000 in attorneys’ fees and expenses incurred in the defense of Well-Come in the underlying litigation. While FCS also alleges future,
speculative damages, the claims it already faces from Well-Come for attorneys’ fees are real and ascertainable, and sufficient to plead a cause of action for legal malpractice, established by FCS’s submission of correspondence from Well-Come’s counsel requesting payment in the amount of $100,395.98. Accordingly, the first and second causes of action of the complaint can not be dismissed."

It’s pretty well accepted that a legal malpractice claim accrues on the date the mistake is made, but in . DURAN, -v-  MOODY, REDNISS MOODY LLP, EDWARD J. GREENFIELD, LAW OFFICE OF EDWARD J. GREENFIELD,  Defendants.  o. 11 Civ. 6155 (LTS)(JLC)  UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK   2012 U.S. Dist. LEXIS 97977 we see the elusive alternative theory of accrual.  That (once in a great while) alternative theory is that a cause of action acrues only when plaintiff suffers an injury which entitles her to relief. 
 

"Greenfield argues that Duran’s claims are barred by New York’s three-year statute of limitations for legal malpractice claims. See N.Y. C.P.L.R. § 214. According to Greenfield, the statute of limitations commenced with his termination in February 2007 — four years prior to the filing of the complaint. However, the statute of limitations for a malpractice claim accrues when the plaintiff suffers an injury that entitles her to relief. Ackerman v. Price Waterhouse, 84 N.Y.2d 535, 541 (1994); see also Kronos. Inc. v. AVX Corp., 81 N.Y.2d 90, 94 (1993). While the Complaint alleges that Greenfield had acted negligently as of February 2007, there is no indication that [*7] Greenfield’s alleged negligence resulted in any legally cognizable injury prior to May 13, 2009, when the New York Supreme Court granted summary judgment as to most of Plaintiff’s claims. Plaintiff’s suit against Greenfield was therefore timely filed."

The Fourth Department, in what we see as strong terms, reiterated that it is always the attorney’s job to prepare the case, and that responsibility may not be shifted to the client. Even when the client participates in the preparation it remains a responsibility of the attorney.

In Rupert v Gates & Adams, P.C. ;2011 NY Slip Op 02554 ; Decided on April 1, 2011 ; Appellate Division, Fourth Department the AD not only says that it was the obligation of the attorneys to trace and investigate matrimonial assets, but that they themselves had to do the work.
 

"We further conclude, however, that the foregoing waiver analysis does not apply with respect to plaintiff’s aforementioned claims that defendants were negligent with respect to the investigation and valuation of plaintiff’s separate property, their investigation of the payment of the sum of $315,000 relative to a note held by plaintiff, and their investigation of the deposit by plaintiff of approximately $60,000 in pension monies into a joint account. Defendants failed to meet their initial burden on those parts of the motion concerning those claims (see Pignataro, 38 AD3d 1320; see generally Zuckerman, 49 NY2d at 562). The waiver analysis based on plaintiff’s global settlement does not apply to those purported deficiencies in defendants’ representation of plaintiff in the matrimonial action because the appeal from the final judgment in the matrimonial action would not have permitted defendants or substitute counsel for plaintiff to address questions regarding the failure to trace plaintiff’s separate property into the marriage and to locate evidence both proving plaintiff’s payment of $315,000 on an outstanding note and demonstrating that $60,000 of plaintiff’s pension monies had been transferred to a joint account to be shared with plaintiff’s former wife. Finally, defendants will not be heard to contend that plaintiff’s involvement with the preparation of the matrimonial action for trial bars him from raising those deficiencies. An attorney generally is not permitted to shift to the client the legal responsibility that the attorney was hired to undertake because of his or her superior knowledge (see Northrop v Thorsen, 46 AD3d 780, 783). Indeed, it is well settled that "[a]n attorney has the responsibility to investigate and prepare every phase of his [or her] client’s case" (Rosenstrauss v Jacobs & Jacobs, 56 AD3d 453, 453 [internal quotation marks omitted]). "

Legal malpractice litigation is aimed at a large variety of events.  Damages are suffered by clients in two distinct areas.  One is where an underlying damage award is lost. Think auto accident which should have netted personal injury award is brought too late.

A second area of damages is unnecessary legal fees to remedy an attorneys mistake.  This variety is what we see in Board of Mgrs. of Bay Club v Borah, Goldstein, Schwartz, Altschuler & Nahins, P.C.   2012 NY Slip Op 05486   Decided on July 11, 2012   Appellate Division, Second Department.  Here is the AD decision: 
 

"To state a cause of action to recover damages for legal malpractice, a plaintiff must allege that the attorney "failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession," and that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (Leder v Spiegel, 9 NY3d 836, 837 [internal quotation marks omitted], cert denied sub nom. Spiegel v Rowland, 552 US 1257; see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442; McCoy v Feinman, 99 NY2d 295, 301-302; Gioeli v Vlachos, 89 AD3d 984; Dempster v Liotti, 86 AD3d 169, 176). "To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence" (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442; see Gioeli v Vlachos, 89 AD3d 984; Snolis v Clare, 81 AD3d 923, 925; Cervini v Zanoni, 95 AD3d 919).

Here, accepting as true the facts alleged in the complaint and according the plaintiff the benefit of every favorable inference (see Leon v Martinez, 84 NY2d 83, 87-88; AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 NY3d 582, 591; Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; Polonetsky v Better Homes Depot, 97 NY2d 46, 54; Guggenheimer v Ginzburg, 43 NY2d 268, 275; Peery v United Capital Corp., 84 AD3d 1201; Sokol v Leader, 74 AD3d 1180, 1180-1181; Reid v Gateway Sherman, Inc., 60 AD3d 836, 837; Roth v Goldman, 254 AD2d 405, 406), the complaint adequately stated a cause of action to recover damages for legal malpractice by alleging that during its representation of the plaintiff in an underlying lien foreclosure action, the defendant negligently filed an unverified notice of lien (see Real Property Law §§ 339-z, [*2]339-aa), and that such negligence proximately caused the plaintiff to incur increased legal expenses by having to defend the validity of the lien against challenges by the defendant in the underlying action (see VDR Realty Corp. v Mintz, 167 AD2d 986; Wolstencroft v Sassower, 124 AD2d 582, 582). Further, the fact that the plaintiff may ultimately prevail in the underlying action is not an intervening cause requiring dismissal of this action (see Fireman’s Fund Ins. Co. v Farrell, 289 AD2d 286, 288; Home Ins. Co. v Liebman, Adolf & Charme, 257 AD2d 424; VDR Realty Corp. v Mintz, 167 AD2d 986; Wolstencroft v Sassower, 124 AD2d at 582; see also DePinto v Rosenthal & Curry, 237 AD2d 482, 482)".

Client was sued for legal fees and counterclaimed for legal malpractice.  As has happened many times before, a bankruptcy filing prior to the law suit deprives client of the capacity to sue the attorneys.  How does this happen?

In the Bankruptcy petition, one must schedule all potential claims that one reasonably knows of. This includes a potential, even if inchoate, cause of action against the attorney.  The Second Department explains in Potruch & Daab, LLC v Abraham   2012 NY Slip Op 05505
Decided on July 11, 2012   Appellate Division, Second Department :

"The Supreme Court properly granted the plaintiff’s motion to dismiss the counterclaims to recover damages for, among other things, legal malpractice. The failure of a party to disclose a cause of action as an asset in a prior bankruptcy proceeding, which the party knew or should have known existed at the time of that proceeding, deprives him or her of "the legal capacity to sue subsequently on that cause of action" (Whelan v Longo, 23 AD3d 459, 460, affd 7 NY3d 821; see Dynamics Corp. of Am. v Marine Midland Bank-N.Y., 69 NY2d 191, 195-196; Santori v Met Life, 11 AD3d 597, 599; 123 Cutting Co. v Topcove Assoc., 2 AD3d 606, 607).

Here, it is undisputed that the defendant did not disclose, in a bankruptcy petition that he filed in September 2007, the existence of the causes of action he now asserts as counterclaims. The plaintiff showed, prima facie, that at the time of the filing of that petition the defendant knew or should have known of the existence of those causes of action, and the defendant failed to raise a triable issue of fact in opposition to that prima facie showing (see Wright v Meyers & Spencer, LLP, 46 AD3d 805; Hansen v Madani, 263 AD2d 881, 883; see also Whelan v Longo, 23 AD3d at 460). Further, under the circumstances of this case, the fact that the defendant’s bankruptcy petition was later dismissed does not change this result (see Nationwide Assocs., Inc. v Epstein, 24 AD3d 738, 739; see also Kunica v St. Jean Financial, Inc., 233 B.R. 46, 53-54). Moreover, although the defendant stated in his opposition to the plaintiff’s motion that, in 2010, he filed a second bankruptcy petition in which he did disclose his malpractice cause of action, in support of that claim he submitted only a single page of the Schedule of Assets from that petition. He also submitted no evidence as to the ultimate disposition of the second bankruptcy petition. He therefore failed to raise a triable issue of fact as to whether he regained his capacity to assert his legal malpractice claims against the plaintiff by filing the second bankruptcy petition (see Nationwide Assoc., Inc. v Epstein, 24 AD3d at 739). "

Potential legal malpractice clients often wonder whether it is better to try to fix the problem or sue the attorney.  The answer to this question is the highest form of speculation.  Its far more difficult to predict the future events in litigation than to pick a winner from a 9 horse field.

David v Hack  2012 NY Slip Op 05479   Decided on July 10, 2012   Appellate Division, First Department  is an example.  Here, plaintiff filed for disability insurance payments, was denied, and then changed attorneys.  The second set of attorneys were partially successful.  They won the battle, and then lost the war. Their partial success doomed the later legal malpractice case. However, it is not the second attorneys who were the target.
 

"By written agreement dated April 28, 2009, plaintiff, a commodities trader with MBF Clearing Corporation, retained defendant Quadrino & Schwartz, P.C., on an hourly fee basis, "to represent him in connection with the filing of long term disability claims under two Guardian group policies." At that time, the "look back period" for determining an employee’s "Insured Earnings," used to calculate the amount of benefits to which the employee was entitled, was one year from the date of disability. As of May 1, 2009, the look back period was increased to three years.

In support of his malpractice claim, plaintiff alleges that defendants, without his knowledge, submitted a claim form that incorrectly stated that the date of his disability was "4/9/09," which was the day he stopped trading, not the day he was determined to be disabled; the latter he alleges was May 13, 2009. Plaintiff contends that as a result of this error, Guardian applied the one-year look back period, which led to the denial of his claim on April 14, 2010, because his 2008 income tax return showed a loss. Although plaintiff, on a contingency fee basis, retained new counsel who successfully appealed the denial, he seeks to recover from defendants the additional costs, expenses and attorneys’ fees he incurred in prosecuting that appeal.

Supreme Court correctly determined that issues of fact exist as to whether the release signed by plaintiff on March 31, 2010, in connection with the settlement of his fee dispute with defendants, was obtained in violation of the Rules of Professional Conduct (22 NYCRR § 1200.0), rule 1.8(h)(2)(see Swift v Ki Young Choe, 242 AD2d 188, 192 [1998]; see also Newin Corp. v Hartford Acc. & Indem. Co., 37 NY2d 211, 217 [1975]). However, the malpractice claim must nevertheless be dismissed because the evidentiary materials submitted by the parties conclusively establish that defendants breached no duty to plaintiff, and that no alleged damages were caused by any act of defendants (see O’Callaghan v Brunelle, 84 AD3d 581 [2011], lv [*2]denied 18 NY3d 804 [2012]; Between The Bread Realty Corp. v Salans Hertzfeld Heilbronn Christy & Viener, 290 AD2d 380, 381 [2002], lv denied 98 NY2d 603 [2002]).

To succeed on a motion to dismiss pursuant to CPLR 3211(a)(1), the documentary evidence relied on by the defendant must "conclusively establish[ ] a defense to the asserted claims as a matter of law" (Leon v Martinez, 84 NY2d 83, 88 [1994]).
On a motion to dismiss pursuant to CPLR 3211(a)(7), the court must "accept the facts as alleged in the complaint as true, accord plaintiff[] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (id. at 87-88). However, "allegations consisting of bare legal conclusions as well as factual claims flatly contradicted by documentary evidence are not entitled to any such consideration" (Maas v Cornell Univ., 94 NY2d 87, 91 [1999]).

At the heart of plaintiff’s malpractice claim is his assertion that defendants could have obtained the date of his disability from his treating physician, Dr. Schottenstein, at any time after May 13, 2009, but refused or neglected to do so. However, the record demonstrates that when plaintiff’s new counsel argued in his June 14, 2010 appeal letter to Guardian that the claim turned on the date it was determined that plaintiff was disabled, not on the date he ceased trading, he relied on the "June 10, 2010 Medical Record of Dr. Douglas Schottenstein, NYSpinemedicine, which for the first time gives [plaintiff] a date of disability on May 13, 2010" (emphasis added). Defendants ceased acting as plaintiff’s attorney on December 23, 2009, well before the June 10, 2010 record was available.

The documentary evidence further demonstrates that defendants’ submissions to Guardian were based on the information available to them. Defendants were retained to file a disability claim on April 28, 2009, which predates the date on which plaintiff claims it was determined that he was disabled. Plaintiff’s claim form, dated September 2, 2009, states that April 9, 2009 was the date that he became unable to work because of illness or injury. While plaintiff asserts that he signed the claim form in blank, the e-mail he relies on shows that he was provided with a draft claim form, asked to review it and complete the unanswered questions, and told that the information would then be typed into the form he signed. Further, on September 9, 2009, plaintiff sent defendants an e-mail stating that "[m]y last trading day was [A]pril 8th." Defendants relied on that date to complete the disability claim form, which they submitted to Guardian that day.

Defendants also submitted to Guardian Dr. Afshin Razi’s physician’s statement, dated August 27, 2009, which states that Dr. Razi first evaluated plaintiff for his back condition on May 27, 2008, and last treated him on March 19, 2009, and that plaintiff had "[m]oderate limitations of functional capacity; capable of clerical/administrative (sedentary) activity (60-70%)" (footnote omitted). Dr. Razi added that plaintiff "cannot carry heavy bag or be on the trading floor where he may be jostled[,] which may injure his back."

Consistent with the foregoing, the employer section of plaintiff’s disability claim, dated September 25, 2009, states that the date the disability began was "unknown," that the last date plaintiff worked on the "floor" was April 7, 2009, and that the reason for leaving work was a disability. Defendants also provided Guardian with Dr. Razi’s and Dr. Schottenstein’s medical records, the receipt of which Guardian confirmed in a letter dated October 20, 2009, in which Guardian advised defendants that it had requested additional information directly from the doctors. "