Justice Judith Gische writes clear and unambiguous decisions, and often, one side or the other gets hurt. Schindler v Lester Schwab Katz & Dwyer, LLP ; 2011 NY Slip Op 31519(U); Supreme Court, New York County; Docket Number: 115967/2010; Judge: Judith J. Gische is one example.

Plaintiff was sued by law firm 1 for fees. He retained defendants Lester Schwab to defend him in the attorney fee issue. This is an unusual choice for defense of a legal fee case, since it is likely that the Lester Schwab bills to defend an attorney fee case will equal the fees being sought in the case. Nevertheless, the defense ensued and the case went bad. Eventually, Lester Schwab also asked to be relieved, and cited fee issues. A default judgment was later entered against plaintiff for discovery failures. Was Lester Schwab negligent in the way it defended plaintiff?

"Here, the issue in dispute is the defendants’ alleged legal malpractice. The doctrine of collateral estoppel is a flexible doctrine grounded in the facts and realities of a particular litigation which should not be rigidly or mechanically applied since it is, at its core, an equitable doctrine reflecting general concepts of fairness (Buechel v. Bain, 97 N.Y.2d at 303). Applying this legal principle, it is readily apparent that the issue of whether Lester Schwab capably represented Schindler in the legal fees action was decided, not only in Judge Kornreich’s decision granting Lester Schwab’s motion and in the decision granting Fish & Richardson’s motion to strike Schindler’s answer and
allowing it to enter a default judgment against him, but also addressed in the decision of Judge Richter rendered on appeal. The decisions by Judge Kornreich were before the Appellate Division when Schindler appealed and it is clear from Judge Richter’s decision that the Appellate Division rejected all of Schindler’s explanations and defenses for why he failed to provide discovery.
In any event, even if the court were persuaded that Schindler’s claims are not collaterally estopped by the events that preceded this action, based on this record, plaintiffs claims are entirely too speculative to support a recovery against the defendants, affording the plaintiff the benefit of every possible inference (Lombardi v. Giannattasio, 192 A.D.2d 512 [2nd Dept.,1993]). Although Schindler has the right to rest on his complaint in opposing the motion to dismiss, he has not provided a sworn affidavit in support of his cross motion explaining why he did not comply with Judge Kornreich’s discovery orders once he obtained new counsel. His failure to make
amends belies any claim that Schindler “misunderstood” the proceedings against him or
was mislead by counsel about what his discovery responsibilities were. As for Schindler’s claims against Attorney Murphy individually, they are entirely without any factual basis. Attorney Murphy provided the November 26, 2008 affidavit because he was ordered to by Judge Kornreich pursuant to her order of November 6, 2008. The order was issued in connection with Fish & Richardson’s motion for leave to serve a subpoena on Schindler. She ordered that Fish & Richardson “seek and obtain an affidavit from someone with knowledge from plaintiffs prior firm Lester Schwab,
(Jonathan Murphy), as to whether a copy of my decision relieving them as counsel was
served upon defendant and when.” Thus, Attorney Murphy’s affidavit was little more than an affidavit of service, not the destructive document that Schindler portrays it to be.

Defendants’ motion for the imposition of sanctions pursuant to Part 130-1 .l[c] furnished Schindler and his attorneys with adequate notice that such relief would be considered and renders a formal hearing unnecessary (Minister, Elders and Deacons of Reformed Protestant Dutch Church of City of New York v. 198 Broadway, Inc., 76 N.Y.2d 41 1 [1990; Dubai Bank Ltd v. Ayyub 187 AD2d 373 [1st Dept 19921). In deciding the what sanction should be imposed, the court has considered the time and attention this matter has involved and the severity (frivolity) of the claim made against
defendants. The court orders that plaintiff Schindler and his attorneys, the firm of Danzig, Fishman & Decea, pay the sum of $5,000 as costs to Lester Schwab and Jonathan A. Murphy, Esq. The Clerk shall enter judgment against Schindler and his attorneys, jointly and severally, in the manner provided in the decretal section appearing directly below."

 

Legal malpractice litigation is a complicated matter, with the need to prove hypothetical outcomes, requirements for experts, and proofs that things would have come out differently. It is not for the faint of heart. Pro-se litigants do poorly here.

In Kovitz v Wenig, Ginsberg, Saltiel & Greene, LLP ; 2011 NY Slip Op 50768(U) ; Appellate Term, Second Department we see one such unfortunate outcome. "Plaintiff commenced this small claims action seeking to recover $2,000 as a result of defendant’s alleged legal malpractice. At the nonjury trial, plaintiff testified that he had retained defendant to commence an action for illegal eviction "done by lock-out without a warrant." Plaintiff stated that defendant had repeatedly failed to properly serve a necessary party to the action, which had resulted in the dismissal of that action. Plaintiff further asserted that defendant had failed to verify the necessary party’s residence or effectuate service through alternative methods. A partner in defendant’s firm testified that her firm could not properly serve the necessary party because plaintiff had provided the firm with the party’s incorrect addresses, and plaintiff had refused to pay the cost of an investigator to ascertain the party’s actual residence. The partner further contended that, in any event, defendant had failed to prove his damages. The Civil Court found that plaintiff had failed to establish a prima facie case of legal malpractice and dismissed the action. "

"The decision of a fact-finding court should not be disturbed upon appeal unless it is obvious that the court’s conclusions could not be reached under any fair interpretation of the evidence (see Claridge Gardens v Menotti, 160 AD2d 544 [1990]). This standard applies with greater force to judgments rendered in the Small Claims Part of the court (see Williams v Roper, 269 AD2d 125, 126 [2000])." "Since the court’s findings and conclusions are supported by the record, we find that the judgment provided the parties with substantial justice according to the rules and principles of substantive law (CCA 1804, 1807; Ross v Friedman, 269 AD2d 584 [2000]; Williams, 269 AD2d at 126). Accordingly, the judgment is affirmed"

 

 

One of the crucial questions to be asked in legal malpractice litigation is when did the representation end. This question comes only shortly after the question of when did the negligent event take place. The statute of limitations is three years from the negligent event or the last date that the attorneys represented the client, whichever is later.

Years ago it was possible to extend that time to 6 years, under a breach of contract theory, but the legislature simply voted that method away. Here, in Daniels v Turco ; 2011 NY Slip Op 03990
Decided on May 10, 2011 ;Appellate Division, Second Department we see how the theory plays out.
 

"The cause of action alleging legal malpractice accrued no later than April 18, 2005, when the defendants returned the case file to the plaintiff with an accompanying letter of discharge. That date was more than three years before the commencement of this action in June 2009 (see CPLR 214[6]; McCoy v Feinman, 99 NY2d 295, 301; Tsafatinos v Lee David Auerbach, P.C., 80 AD3d 749). Contrary to the plaintiff’s assertion, there was no evidence of any continuous ongoing relationship between the plaintiff and the defendants after the file was returned and, therefore, the continuous representation doctrine is not applicable (see Shumsky v Eisenstein, 96 NY2d 164, 168-171; Marro v Handwerker, Marchelos & Gayner, 1 AD3d 488; Daniels v Lebit, 299 AD2d 310; Wester v Sussman, 287 AD2d 618). Accordingly, the Supreme Court properly granted that branch of the defendants’ motion which was for summary judgment dismissing the legal malpractice cause [*2]of action as time-barred (see CPLR 214[6]; Adler v Gershman, 305 AD2d 342, 342-343).

In addition, the plaintiff’s cause of action sounding in fraud was duplicative of the legal malpractice cause of action, because it arises from the same facts as the legal malpractice cause of action and does not allege distinct damages (see Tsafatinos v Lee David Auerbach, P.C., 80 AD3d at 749; Kvetnaya v Tylo, 49 AD3d 608, 609; Daniels v Lebit, 299 AD2d at 310; Mecca v Shang, 258 AD2d 569, 570). Accordingly, the fraud cause of action is likewise subject to the three-year limitations period (see Tsafatinos v Lee David Auerbach, P.C., 80 AD3d 749, 750), and the Supreme Court properly granted that branch of the defendants’ motion which was for summary judgment dismissing the fraud cause of action as time-barred. "
 

Manus v Flamm , 2011 NY Slip Op 31691(U); June 14, 2011; Supreme Court, New York County; Docket Number: 110026/2007; Judge: Debra A. James tells an interesting story of divorce, legal malpractice and itinerant jewelery. Plaintiff is the divorced wife, who is owed $ 1 million in the divorce. She borrows jewelery from the husband’s safe deposit and ends up in a world of trouble.

"In the FM action, FM initially sought to recover- possession of certain jewelry that, it alleges, Manus pledged as collateral against a $400,000 loan made by FM to her in 1994. FM alleges t h a t , after retrieving the jewelry from a jeweler to whom Manus had consigned it for sale, Manus failed to return it: to a safe deposit box maintained by her ex-husband, nonparty Allen Manus (deceased, November 2 0 0 3 ) , a founder of FM, in breach of the terms of the May 4, 1994 loan security agreement, as amended May 5, 1994. On September 28, 1999, Manus entered into a stipulation with FM, prepared by FM’s counsel and signed by Elizabeth Manus, Allen Manus’s wife and FM’s sole officer. Pursuant to the stipulation, Manus was authorized to retain the jewelry f o r nine months in order to sell it, and repay the $400,000 loan. The stipulation also provides that Manus’s cooperative apartment shares would be substituted for the jewelry as collateral under- a September 1999 stock pledge agreement . The ,st.stock:k pledge agreement identifies
Flamm as the escrow agent holding the stock certificates. Manus denies that she ever received $400,000 from FM, and contends that, therefore, the June 15, 1994 promissory note in
that amount bearing her signature is not enforceable.

With respect to the stipulation, Manus alleges that she signed it at Flamm’ s insistence, and that Flamm refused to explain the terms, and their ramifications, to h e r . Flamm ‘ alleges that Manus signed solely at Allen Manus’s urging, and without Flamm’a advice. Manus and Flamm both allege that Allen Manus agreed to arrange for FM to release Manus from the stipulation. Manus alleges that Allen Manus advised her to have her attorney, Flamm, contact FMIs attorneys to obtain.ain the
release. In November 2000, Flamm prepared a release and forwarded it to FM’s attorneys. Flamm alleges that , during the ensuing negotiations regarding the release terms, FM’s attorneys refused to permit FM t.o release Manus from liability because Allen Manus owed t h e m attorneys’ fees. Flamm further alleges that Elizabeth Manus refused to sign any document,t releasing Manus from liability, and that he was advised that she was the only individual with the authority to bind FM to the release.

Flamm’s own admissions regarding the underlying facts alleged in the complaint and the documentary evidence conclusively demonstrate that Flamm continuously represented
Manus with regard t o the FM action from October 1998 through January 2005."
 

Courts routinely scrutinize the actions of plaintiffs in legal malpractice cases, and we sometimes wonder whether their behavior receives a higher level of scrutiny than do other plaintiffs.  In G & M Realty, L.P. v Masyr   2012 NY Slip Op 05257    Decided on June 28, 2012   Appellate Division, First Department  the Court finds that the legal malpractice case was timely, but dismissible.
 

"Nonetheless, the complaint must be dismissed because plaintiff failed to show that any negligence on defendants’ part proximately caused it to be unable to exploit the commercial permit (see Leder v Spiegel, 31 AD3d 266, 267-268 [2006], affd 9 NY3d 836 [2007], cert denied 552 US 1257 [2008]; Brooks v Lewin, 21 AD3d 731, 734 [2005], lv denied 6 NY3d 713 [2006]).

Plaintiff’s principal, Gerald Wolkoff, testified that during the time the commercial special permit was in force, he would not have started construction without having secured a 600,000-square-foot tenant. He also testified that until the time he decided, for market reasons, to develop the building for residential rather than commercial use, he did not have a single entity committed to becoming a commercial tenant. Hence, before it made its independent, market-based decision to pursue residential development, plaintiff was never in a position to exploit the commercial permit. Thus, even assuming defendants were negligent in failing to inform plaintiff that the commercial permit would lapse unless renewed, their negligence did not cause plaintiff any loss. Wolkoff’s testimony that, even without any tenants, he would have proceeded with the [*2]commercial project if he had known that the permit was of finite duration fails to raise a genuine issue of fact. The testimony directly conflicts with his testimony that he would not have commenced construction without a commitment for a 600,000-square-foot tenant (see Schwartz v JPMorgan Chase Bank, N.A., 84 AD3d 575, 577 [2011]).

Plaintiff also failed to submit non-speculative evidence in support of its damages claims (see Leder, 31 AD3d at 268; Dweck Law Firm v Mann, 283 AD2d 292, 294 [2001]). Plaintiff claims damages of more than $73 million, based on the loss of the right to construct an additional 366,465 square feet of floor area on the property, the claimed market value of which was $150 to $200 per square foot. However, the only source plaintiff gives for these figures is Wolkoff’s opinion, and it identifies no factual support therefor in the record.

Plaintiff claims further that it incurred several hundred thousand dollars in professional expenses to pursue the residential permit. However, as indicated, the record demonstrates that plaintiff made an independent, market-based decision to pursue residential development of the property. Defendants established, through the uncontroverted report of their expert architect, that plaintiff could not have proceeded with a residential development under the commercial special permit. Thus, plaintiff would have had to file a new application and incur additional fees to pursue a residential development regardless of defendants’ alleged negligence. "

 

The rule has always been that a plaintiff must be able to allege actual innocense (reversal, acquittal or exonoeration) in order to sue a criminal defense attorney for legal malpractice.  Recently, in Dombrowsky v. Bulson,  2012 NY Slip Op 04203 (2012) the Court of Appeals trimmed possible bases for damages solely to economic damages.  No right to non-pecuniary damages remains.

Here, in Brownell v LeClaire   2012 NY Slip Op 05231   Decided on June 28, 2012   Appellate Division, Third Department we start to see some of the fallout. 
 

"As for his claim against McKeighan, plaintiff argues that McKeighan was negligent when he represented him and advised him to plead guilty to a crime he did not commit. In that regard, plaintiff sought damages for personal and psychological injuries, as well as other nonpecuniary losses he claims to have incurred as a result of his incarceration and wrongful conviction. A defendant in a criminal prosecution cannot recover for nonpecuniary damages that occur as a result of legal malpractice and, therefore, these claims made by plaintiff against McKeighan must be dismissed (see Dombrowski v Bulson, ___ NY3d ___, 2012 NY Slip Op 04203 [2012]). However, McKeighan’s motion papers fail to address plaintiff’s claim that he sustained economic damages as a result of McKeighan’s alleged legal malpractice. As a result, while we have serious reservations about the validity of these claims, we are, at this stage of the proceedings, constrained to find that a question of fact exists as to whether plaintiff incurred such economic damages as a result of McKeighan’s alleged legal malpractice. "

 

In Clerico v Pollak   2012 NY Slip Op 51178(U)   Decided on June 26, 2012   Supreme Court, Queens County   McDonald, J. we see the complicated aftermath of a flip sale.  As far as we can gather Plaintiffs were offered a deal in which they would sell their real property to A, who would then turn around and sell it to B, at a profit.  The parties were to split the profit.  Why A did not simply arrange for plaintiffs to sell to B, at a pre-arranged fee is unknown.
 

Plaintiffs sued, settled and sued again.  Is this permissible? 

"In this regard based upon the plaintiffs’ verified complaint (see CPLR 105(U); Sanchez v. National R.R. Passenger Corp., 92 AD3d 600 [1st Dept. 2012][a verified pleading is the statutory [*5]equivalent of a responsive affidavit for purposes of a motion for summary judgment]; Vollaro v Bevilacqua, 33 AD3d 910 [2d Dept. 2006]; Matter of Dellagatta v. McGillicuddy, 31 AD3d 549 [2d Dept. 2006]), and the affidavits of the plaintiffs submitted in opposition to the motion, this Court finds that there are several questions of fact raised by the papers including whether the plaintiffs were aware of the second sale prior to entering into the settlement; whether the settlement was only intended to cover the contract action asserted in the prior action or was meant to encompass the second sale as well; and whether the funds disbursed to the plaintiff at the closing were only in settlement of the contract action or were also intended to compensate the plaintiffs for their share of the sales proceeds realized from the sale to Mr. Sullivan.

In addition, the third cause of action in the instant complaint alleges fraud against all defendants and states that "defendants severally and jointly, engaged in fraud designed to deceive the plaintiffs by misappropriating funds duly owed to them by acting as purchasers in transaction 1 and immediately reselling the premises in transaction 2." The complaint states that all of the defendants failed to disclose the existence of the second sale to the plaintiffs. Such failure to disclose, it is alleged, was designed to deceive plaintiffs and to misappropriate funds which were due to them.

In this regard, "although a general release bars recovery on any cause of action arising prior to its execution, this is true only in the absence of fraud, duress, illegality or mistake" (see Lambert v Sklar, 61 AD2d 939 [2d Dept. 2009]). Here, as the instant action is based upon a fraudulent scheme, the doctrine of res judicata would not bar plaintiffs from seeking to recover damages in this action (see Lambert v Sklar, 61 AD3d 939 [2d Dept. 2009]).

Accordingly, for all the above stated reasons it is hereby

ORDERED, that the motion of INES GASSMANN and the cross-motions of MICHAEL O’SULLIVAN, CHARLES PEKNIC, MARTIN A. POLLAK, JACK I. SLEPIAN and POLLAK & SLEPIAN, L.L.P. for summary judgment dismissing the plaintiffs’ complaint are denied. "

 

When does a corporation have capacity to sue for legal malpractice?  What must a defendant plead in order to assert affirmative defenses?  How many proceedings will take place in this case before issue is joined?

Moran Enters., Inc. v Hurst   2012 NY Slip Op 04980   Decided on June 20, 2012   Appellate Division, Second Department answers the first two questions, but not the last. 
 

"The plaintiff, Moran Enterprises, Inc. (hereinafter MEI), retained attorney Margaret Hurst to represent it in certain matters, including filing a Chapter 11 petition for bankruptcy on its behalf. A few months later, Hurst left active practice and transferred her clients to another attorney. Soon thereafter, MEI was dissolved by the Secretary of State pursuant to Tax Law § 203-a for failure to pay franchise taxes. MEI thereafter retained the defendant attorney Heath Berger and his firm, the defendant Steinberg, Fineo, Berger & Fischoff, P.C., formerly known as Steinberg, Fineo, Berger & Barone, P.C. (hereinafter together the Berger defendants), to file another Chapter 11 bankruptcy petition on its behalf.

The plaintiff commenced this action against Hurst and the Berger defendants, alleging, as against Hurst, causes of action to recover damages for breach of contract, legal malpractice, conversion, and unjust enrichment. Hurst made a pre-answer motion, inter alia, to dismiss the complaint insofar as asserted against her pursuant to CPLR 3211(a)(3), (5), (7), and (10), alleging, as grounds for dismissal, the plaintiff’s lack of capacity, res judicata, collateral estoppel, the statute of limitations, the failure to state a cause of action, and the failure to join necessary parties. The Berger defendants cross-moved, inter alia, for summary judgment dismissing the [*2]complaint insofar as asserted against them, or, in the alternative, to dismiss the complaint insofar as asserted against them pursuant to CPLR 3211(a)(3), (5), and (7). MEI separately cross-moved to compel Hurst to answer the complaint. "

"On appeal, this Court modified the order entered January 17, 2008, and denied those branches of the motion and cross motion which were pursuant to CPLR 3211(a)(5), granted that branch of the Berger defendants’ cross motion which was pursuant to CPLR 3211(a)(3), and granted MEI’s cross motion to compel Hurst to answer the complaint. This Court determined that the action was not barred by res judicata, but that, as a dissolved corporation, MEI lacked capacity to commence an action against the Berger defendants. MEI, however, retained capacity to commence an action against Hurst, whose representation of MEI occurred prior to its dissolution (see Moran Enters., Inc. v Hurst, 66 AD3d 972). Hurst did not raise any other branches of her motion as alternative grounds for dismissal of the complaint insofar as asserted against her, or in support of the denial of MEI’s cross motion (see generally Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d 539, 545-546). This Court thus determined that MEI’s cross motion to compel her to answer the complaint should have been granted (see Moran Enters., Inc. v Hurst, 66 AD3d 972).
 

Where issues have been raised and determined in a prior appeal, reconsideration of those issues is barred by the doctrine of law of the case (see CPLR 5501[a]; Aurora Loan Servs., LLC v Grant, 88 AD3d 929, 929; Millennium Envtl., Inc. v City of Long Beach of State of N.Y., 56 AD3d 739, 739). "The doctrine applies only to legal determinations that were necessarily resolved on the merits in the prior decision,’ and to the same questions presented in the same case" (RPG Consulting, Inc. v Zormati, 82 AD3d 739, 740, quoting Gilligan v Reers, 255 AD2d 486, 487 [citation omitted]). It bars reconsideration of issues which were raised and determined against a party or which could have been raised on a prior appeal (see Matter of Ise-Smith v Orok-Edem, 55 AD3d 610, 610; Matter of Suzuki-Peters v Peters, 37 AD3d 726, 726; Palumbo v Palumbo, 10 AD3d 680, 682).

Here, on the prior appeal, Hurst could have raised the other grounds upon which she moved for dismissal of the complaint insofar as asserted against her (see Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d at 545-546). This Court’s determination that MEI’s cross motion to compel Hurst to answer the complaint should have been granted " necessarily resolved on the merits’" the grounds for dismissal raised in her pre-answer motion to dismiss (RPG Consulting, Inc. v Zormati, 82 AD3d at 740, quoting Gilligan v Reers, 255 AD2d at 487). Thus, reconsideration of those grounds is barred by the doctrine of law of the case (see Matter of Ise-Smith v Orok-Edem, 55 AD3d 610; Gropper v St. Luke’s Hosp. Ctr., 255 AD2d 123, 123). Accordingly, the Supreme Court should have granted those branches of MEI’s motion which were to dismiss the first and fourth affirmative defenses, alleging failure to join necessary parties and a failure to state a cause of action, respectively, as barred by the doctrine of law of the case (cf. Butler v Catinella, 58 AD3d 145, 150).

Insofar as the complaint asserts a cause of action against Hurst to recover damages for unjust enrichment, equitable affirmative defenses could be properly asserted since the action is not one exclusively at law (see Paramount Film Distrib. Corp. v State of New York, 30 NY2d 415, 421, cert denied 414 US 829; cf. Greco v Christoffersen, 70 AD3d 769, 771; Manshion Joho Ctr. Co., Ltd. v Manshion Joho Ctr., Inc., 24 AD3d 189, 190). Accordingly, the Supreme Court properly denied that branch of MEI’s motion which was to dismiss the equitable affirmative defenses asserted [*3]by Hurst on the ground that they are unavailable in this action.

The Supreme Court should have granted those branches of MEI’s motion which were to dismiss Hurst’s affirmative defenses numbered 2, 3, 5, 7, 10, 12, 13, 14, and 15, since they merely pleaded conclusions of law without any supporting facts (see Morgenstern v Cohon, 2 NY2d 302; Fireman’s Fund Ins. Co. v Farrell, 57 AD3d 721, 723; 170 W. Vil. Assoc. v G & E Realty, Inc., 56 AD3d 372, 372-373; Plemmenou v Arvanitakis, 39 AD3d 612, 613; Petracca v Petracca, 305 AD2d 566, 567; Glenesk v Guidance Realty Corp., 36 AD2d 852, 853), albeit without prejudice to Hurst’s right to replead those affirmative defenses in proper form (see Consolidated Constr. Group, LLC v Bethpage Union Free School Dist., 39 AD3d 792, 796; Rosenthal v Allstate Ins. Co., 248 AD2d 455, 456; Bentivegna v Meenan Oil Co., 126 AD2d 506, 508). "
 

 

In 2002 attorneys are retained to handle a legal matter relating to a parcel of property known as 350 Shore Road, Long Beach, New York by Xander.  The clients wanted to contest easement rights over the 350 Shore Road property in favor of their own property at 360 Shore Road.  This initial litigation led to a multiplicity of suits, now including the legal malpractice case Haberman v Xander Corp.  2012 NY Slip Op 31645(U)  June 11, 2012  Sup Ct, Nassau County  Docket Number: 021508/10  Judge: Randy Sue Marber.  After Xander lost its easement case, it was sued by Davidoff, Malito & Hutcher for legal fees, and then was itself sued by the 350 Shore Road owners for malicious prosecution.

"As a consequence of that dismissal, the Plaintiffs, Haberman/Bellair commenced this action against the Defendant, Xander, and its board members alleging that because of the preliminary injunction obtained by Xander , the Plaintiffs were wrongfully prevented from proceeding with construction of Tower "B" at 350 Shore Road. The Plaintiffs allege that the adverse possession action prosecuted by Xander constituted malicious prosecution for which they seek to recover damages as well as the amount of the undertaking. In the amended Third-Part complaint, the Third-Part Plaintiff seeks indemnification and contribution from DMH for any damages  Haberman/Belaire may recover against Xander, based on the claim that the legal services rendered were inadequate improper, negligent and contrary to the legal, equitable and economic interests of Xander and its shareholders and board members."

"The Third-Part Defendant, DMH’ s dismissal motion is predicated on the ground that the Third-Party  Plaintiff, Xander’ s bare, conclusory allegations of DMH’ s breach of contract, negligence and breach of fiduciary duty are legally insufficient to establish a prima facie case of legal malpractice. Further, the Third-Part Defendant, DMH, argues for dismissal pursuant to CPLR 3211 (a) (4) based on the pendency of a prior action which was  brought by the Third-Part Defendant, DMH, to recover unpaid legal fees in the amount of $237 593.42, plus interest, from their former client, the Defendant/Third-Party  Plaintiff Xander."

The Plaintiffs in the action (Index No. 002496/10), which was pending before the Hon. Antonio Brandveen would have been severely prejudiced by consolidating an action ready for trial with one in which discovery has not yet begun. The interests of justice and judicial economy would not have been served by a joint trial of these actions. Here the instant Third-Part action and the action (Index No. 002496/10), before the Hon. Antonio Brandveen , brought by the Defendant/Third-Part Plaintiffs prior attorneys, DMH, was not for the same causes of action and did not involve common questions of law or fact. Further, since a note of issue was filed in the action (Index No. 002496/10), that was before the Hon. Antonio Brandveen on September 22 , 2011 and that
action has been settled, there is no need to further consider the Defendant/Third-Part
Plaintiff, Xander s Order to Show Cause (Mot. Seq. 02) seeking the consolidation or joint
trial of this action with the action (Index No. 002496/1 0), which was before the Hon. Antonio
Brandveen."

It started from a simple commercial transaction, and when it was all over, more than 9 years later, the law firm had lost its legal malpractice case and had to pay a very significant amount of money as a judgment.  Where did they go wrong?

Lovino, Inc. v Lavallee Law Offs.   2012 NY Slip Op 04978   Decided on June 20, 2012
Appellate Division, Second Department not only affirms the denial of summary judgment, it also affirms an award to plaintiffs. 
 

"The individual plaintiff, Joseph Indovino, owns and operates the corporate plaintiff, Lovino, Inc., doing business as Bodyline Collision (hereinafter Bodyline), an auto body repair shop. In 1994, the plaintiffs invested $295,000 with Robert Tassinari, who is a relative of Indovino. By January of 1998, after they had not received any profits, statements, receipts, or other evidence of the results of their investment with Tassinari, the plaintiffs demanded the return of their investment. Shortly thereafter, the sum of $232,500 was transferred by nonparty Frank Zangara, a person then unknown to the plaintiffs, to a Bodyline account at Chase Manhattan Bank. On April 8, 1998, Zangara appeared at the office of Bodyline, identified himself as a person who worked with Tassinari, and demanded the return of the $232,500. While Zangara was in the office, Indovino called Tassinari, who spoke with Zangara on the phone. After that conversation, Zangara told Indovino that Tassinari "agreed to take care of everything," and Zangara left the shop. That day, the plaintiffs received by facsimile a "general release" purportedly signed by Zangara.

Nearly six years later, in December 2003, Zangara and a corporation commenced an action (hereinafter the underlying action) against, among others, the plaintiffs, seeking, inter alia, damages in the sum of $232,500. The plaintiffs retained the defendants Keith Lavallee and Lavallee Law Offices (hereinafter together the Lavallee defendants) to defend them in the underlying action, and Lavallee assigned the case to his associate, the defendant Ryan Brownyard. A few days before the scheduled trial, Brownyard sought a stay in order to serve a third-party complaint on Tassinari; [*2]the application was denied, the trial proceeded, and Brownyard did not call Tassinari to testify. Zangara prevailed in the underlying action and was awarded a judgment against the plaintiffs in the principal sum of $232,500.

The plaintiffs thereafter commenced this action to recover damages for legal malpractice, alleging that the defendants had failed to adduce evidence in support of their complete defense to Zangara’s action. They alleged that Tassinari had used a pretext to induce Zangara to transfer the $232,500 to the plaintiffs’ account, and thereafter Tassinari satisfied Zangara’s claim to those monies by transferring $250,000 to Zangara in consideration for the general release sent to the plaintiffs. The defendants failed to adduce this evidence at the trial of the underlying action and inexplicably failed to implead Tassinari or to call him as a witness, although the plaintiffs had repeatedly made such requests from the outset of the case. "

"Here, in support of their motion for summary judgment, the defendants established their prima facie entitlement to judgment as a matter of law dismissing the complaint by submitting, inter alia, Brownyard’s affidavit, in which he averred that Indovino did not want to bring Tassinari into the underlying action because of their family relationship and did not request Tassinari’s involvement until five days before the scheduled trial. The defendants also submitted the trial transcript in the underlying action, which included Zangara’s testimony that he had received a payment of $250,000 on April 8, 1998, and Brownyard’s argument in summation that the purpose of that payment was to satisfy Zangara’s claim against the plaintiffs. In opposition, the plaintiffs raised triable issues of fact with evidence, including the affidavit of Indovino, in which he averred that he told the defendants from the beginning of their representation that Tassinari was the sole cause of Zangara’s claim and that Tassinari had to be brought into the underlying action as a party or a witness. Indovino also averred that he had recently learned that the defendants had a potential conflict of interest due to their previous representation of Zangara in another matter. Further, the plaintiffs submitted Tassinari’s affidavit, in which he stated that, had he been called as a witness in the underlying action, he would have testified that he paid $250,000 to Zangara to repay the money Zangara had transferred to the plaintiffs. In light of these triable issues of fact, the Supreme Court properly denied the defendants’ motion (see Zuckerman v City of New York, 49 NY2d 557, 562).

At the trial in this matter, the jury rendered a verdict in favor of the plaintiffs and determined that the plaintiffs had sustained damages in the sum of $268,500. The Supreme Court entered judgment in favor of the plaintiffs in the principal sum of $268,500, plus $140,694 in prejudgment interest on that sum from August 24, 2005, the date of accrual of the plaintiffs’ cause of action, until the jury verdict on May 20, 2011. The defendants contend that the assessment of prejudgment interest on the entire principal amount is an impermissible double recovery with respect to the portion of the damages award which represents the plaintiffs’ payment of interest on a loan they were required to obtain in order to pay the judgment in the underlying action. This contention is without merit. Although the trial evidence supported such an item of damages, as the Supreme Court observed, it is improper to speculate as to the manner in which the jury reached its computation since the verdict sheet did not require the jury to itemize damages. In any event, prejudgment interest awarded on such an amount does not constitute a double recovery, since the "award of interest is founded on the theory that there has been a deprivation of use of money or its equivalent" (Kaiser v Fishman, 187 AD2d 623, 627; see Wolf v American Tech. Ceramics Corp., [*3]84 AD3d 1224, 1226). Here, the plaintiffs were deprived of the use of any money they were required to expend to make interest payments on a loan."