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."
 

We’ve noted our anecdotal belief that more legal malpractice cases are dismissed on CPLR 3211 grounds than in general.  We are the first to admit that no statistical study has been done.  In the spirit of anecdotal evidence, we look at Harris v Barbera   2012 NY Slip Op 04973
Decided on June 20, 2012   Appellate Division, Second Department.
 

"The defendants represented the plaintiff in an action in which she sought a divorce and ancillary relief (hereinafter the underlying action). After the conclusion of the underlying action, the plaintiff commenced this action against the defendants alleging, inter alia, legal malpractice. The defendants moved, inter alia, pursuant to CPLR 3211(a)(1) and (7) to dismiss the cause of action to recover damages for legal malpractice. The Supreme Court, inter alia, granted that branch of the [*2]motion which was pursuant to CPLR 3211(a)(1) and (7) to dismiss the cause of action to recover damages for legal malpractice and dismissed that cause of action.

A motion to dismiss a complaint pursuant to CPLR 3211(a)(1) may be granted only if the documentary evidence submitted by the moving party "utterly refutes the factual allegations of the complaint and conclusively establishes a defense to the claims as a matter of law" (Kopelowitz & Co., Inc. v Mann, 83 AD3d 793, 796; Fontanetta v John Doe 1, 73 AD3d 78, 83). In support of that branch of their motion which was to dismiss the legal malpractice cause of action pursuant to CPLR 3211(a)(1), the defendants submitted, among other things, a retainer agreement, or what they referred to as a matrimonial engagement agreement, executed by both the defendants and the plaintiff. The agreement stated that there was "no assurance or guarantee of the outcome" and also that the agreement "does not include representation for . . . legal services after the Judgment of Trial Court . . . [or] [t]he Appeal of any decisions of the Trial Court." Yet, the plaintiff, among other things, detailed in her affidavit in opposition to the motion how the defendants failed to pursue a motion for leave to reargue or other application to modify a decision in the underlying action, submitted deficient or inappropriate proposed findings of fact and conclusions of law, and failed to adequately address various necessary issues during the trial. Contrary to the defendants’ contentions, the retainer agreement was insufficient documentary evidence to dispose of those allegations. In addition, contrary to the defendants’ contentions, the Supreme Court’s decision in the underlying action did not utterly refute or conclusively establish a defense to the plaintiff’s claim but, instead, merely disputed certain of the factual allegations (see DeStaso v Condon Resnick, LLP, 90 AD3d 809, 814). Therefore, the Supreme Court erred in granting that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(1) (id. at 813-814).

On a motion to dismiss for failure to state a cause of action pursuant to CPLR 3211(a)(7), the complaint must be construed liberally and "the sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law[,] a motion for dismissal will fail" (Guggenheimer v Ginzburg, 43 NY2d 268, 275). Moreover, "[a] court may freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint, and upon considering such an affidavit, the facts alleged therein must also be assumed to be true" (Kopelowitz & Co., Inc. v Mann, 83 AD3d at 797 [citations and internal quotation marks omitted]). Here, to the extent that the complaint was vague as to the nature of the allegations of legal malpractice and otherwise deficient, the plaintiff, in opposition to the defendants’ motion, submitted evidence, including her affidavit, in which she sufficiently remedied any pleading defects and delineated the grounds for her claim of legal malpractice (see Quinones v Schaap, 91 AD3d 739; Reiver v Burkhart Wexler & Hirschberg, LLP, 73 AD3d 1149; see also Gelobter v Fox, 90 AD3d 829, 830-831).

Accordingly, the Supreme Court should have denied that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(1) and (7) to dismiss the cause of action to recover damages for legal malpractice. "

Its not always easy to say when the last date upon which an attorney renders service to a client, nor when the statute of limitations commences. .  is it on the day that a defective security agreement is prepared?  is it on the day that the security agreement is given to debtor?  In this case, its no earlier than the day when the last signature is executed. 

Americana Capital Corp. v Nardella   2012 NY Slip Op 04927   Decided on June 19, 2012   Appellate Division, First Department  determines the date upon which a malpractice claim arose.
 

"Plaintiff’s legal malpractice claim was not barred by the statute of limitations (see CPLR 214[6]). Plaintiff alleges that the deceased negligently drafted a security agreement preventing plaintiff, as the creditor, from being able to enforce the agreement as against the debtor once the debtor defaulted.

Plaintiff’s legal malpractice claim accrued no earlier than when the agreement was executed, which occurred on November 29,
2002, the date of the last signature on the agreement (see McCoy v Feinman, 99 NY2d 295 [2002]), and this action was commenced less than three years later. "

Last fall we wrote about the Cove Cafe and the legal malpractice case that followed.  Attorney was sued when there was a falling out of the partners.  Now, on a motion to renew and reargue, before a different judge, there have been some changes.  Battaglia v Grillo  2012 NY Slip Op 31588(U)
June 6, 2012  Supreme Court, Nassau County  Docket Number: 014807-10  Judge: Vito M. DeStefano.

"In granting the underlying motions, Justice Warshawsky found that " (t)here is no
evidence that Spadaccini was bereft of the legal knowledge necessary to carry out the transaction.
Since ‘ legal malpractice ‘ requires a showing that the Defendant lacked the ordinary and
customary skill of a member of the legal community, Plaintiff Battaglia and third-party Plaintiff
Grillo have failed to allege a claim for legal malpractice" (Ex. "A" to Motion at p 6). The court
continued  "There is no evidence that Spadaccini made a legal error which resulted in the loss of
the investments of Battaglia, much less the non-contribution of Grillo. If the parties to this
enterprise have claims, they are against one another, not the attorney who undertook to provide
each of them with a 25% interest in the company holding title to the real estate they sought to
acquire to the extent that ostensibly three of the four joint ventures failed to contribute the
opening investments to which they committed, it is hardly the fault of their attorney that the
project has deteriorated into a fiscal disaster" (Ex. "A" to Motion at pp 6-7).

The court also dismissed the fraud allegations on the ground that "( n )ow here does the
Plaintiff Battaglia or third-party Plaintiff Grillo identify a specific representation which was
falsely made by Spadaccini, which he knew to be false, and which he made in order to induce
others to act, or that they acted upon such misrepresentation to their damage" (Ex. "A" to Motion
at p 6) .

"In the prior order, the court found that Battaglia and Grillo did not allege a claim for legal
malpractice because they failed to show that Spadaccini lacked the ordinary and customary skill
of a member of the legal community (Ex. "A" to Plaintiff s Motion at p 6). In a legal malpractice
action, the claimant must show that an attorney "failed to exercise the ordinary reasonable skill
and knowledge commonly possessed by a member of the legal profession" and that "the
attorney s breach of this professional duty caused the (claimant’ s) actual damages (McCoy
Feinman 99 NY2d 295, 301-02 (2002)). In order to survive a motion to dismiss, the complaint
must allege that but for counsel’ s malpractice, the claimant would have prevailed in the
underlying action or not have incurred any damages (Rudolf Shayne, Dachs, Stanisci, Corker
& Sauer 8 NY3d 438 (2007) (emphasis added)).
 

Here, the amended complaint and the third-party complaint each set forth a claim for
legal malpractice. According to the amended complaint, Spadaccini was retained to represent the
interests of the members of Macabagi, LLC ("LLC") in purchasing the property; Spadaccini advised Battaglia that the property was to be purchased by Battaglia, Bartolomeo Piraino
Massimo Grillo and Calogero Drago for approximately $275 000; Spadaccini would close the
transaction with each of the four members having a 25% percent interest in the LLC (Spadaccini
had drawn up the operating agreement to the LLC which provided that each of the four members
of the LLC would contribute a cash investment of $100 000.00 for a total working capital of
$400 000); Spadaccini failed to advise Battaglia that only Battaglia s $100 000 initial
contribution would be used to purchase the property, in violation of the understanding between
the four members of the LLC and in violation of Spadaccini’ s express representation to Battaglia;
Spadaccini closed title to the property, placing legal title to the property solely in the name of
Nancy Piraino,2 who was not a member of the LLC; and closed title with a $200 000.00 first
mortgage on the property (Ex. "D" to Affirmation in Opposition). Battaglia claims that he was
not advised that the purchase was being financed and, had he known, he would not have
purchased or made an investment in the property."

Big corporate client goes to Big white shoe law firm and believes that the Big litigator there will take and handle the case.  It does not happen.  A lesser light handles the case, and the Big Corporate client is unhappy.  Now what?

Matter of Matter of G.K. Las Vegas Ltd. Partnership v Boies Schiller & Flexner LLP   2012 NY Slip Op 04831   Decided on June 14, 2012   Appellate Division, First Department.
 

"In this proceeding alleging the law firm’s breach of performance of a retainer agreement, including breach of an alleged oral agreement to have a particular attorney in its firm serve as lead counsel in an underlying matter, the client failed to preserve its arguments that the law firm did not meet its burden of demonstrating that the client fully understood the terms of the parties’ retainer agreement, and that public policy rendered such retainer agreement unenforceable, as these arguments were not sufficiently brought to the attention of the arbitrator. (see Edward M. Stephens, M.D., F.A.A.P. v Prudential Ins. Co. of Am., 278 AD2d 16 [2000]; see also Matter of Joan Hansen & Co., Inc. v Everlast World’s Boxing Headquarters Corp., 13 NY3d 168, 173-174 [2009]). The client did not explicitly argue that the law firm violated public policy by failing to ensure that the client fully understood the terms of the parties’ retainer agreement. It only argued that parol evidence was needed because the retainer agreement, as written, was allegedly incomplete and/or ambiguous.

Were we to reach the merits of the client’s public policy argument, we would find it unavailing. The parties agreed to arbitrate any disputes arising from their retainer agreement, and there is no basis to conclude that the asserted public policy ground (requiring a client’s full knowledge and understanding of an attorney-client retainer agreement) was violated. The arbitrator’s award dismissing the client’s challenge to the legal fees that were due in accordance with the express terms of the parties’ amended written retainer agreement had a rational basis, inasmuch as the Arbitrator found the written retainer arrangement to be unambiguous and to constitute a fully integrated agreement that would satisfy the requirements of 22 NYCRR 1215.1 (see generally Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223-224 [1996]). The arbitrator’s rejection of the sophisticated client’s argument that sought inclusion of claimed oral terms that would modify the clear terms of the amended retainer agreement was rationally based in contract principles, including New York’s parol evidence rule, [*2]and the criteria for allowing modification of written terms without altering them was not established by the client (see Mitchill v Lath, 247 NY 377 [1928]; Chemical Bank v Weiss, 82 AD2d 941 [1981], appeal dismissed 54 NY2d 831 [1981]). Since the terms of the fully integrated retainer agreement were unambiguous, there was no basis to consider parol evidence (see Slotnick, Shapiro & Crocker, LLP v Stiglianese, 92 AD3d 482 [2012]; Moore v Kopel, 237 AD2d 124, 125 [1997]).

Moreover, the client’s argument that the arbitrator, in deciding the dismissal motion, denied it "fundamental fairness" by refusing to accept the truth of its allegations regarding the oral promise, including that the parties intended this oral promise to be a component of the parties’ retainer agreement, thereby precluding it from offering evidence to demonstrate the parties’ understanding in regard to the alleged oral promise, is unavailing. It was within the province of the arbitrator to find, as a matter of law, that the retainer agreement was not ambiguous (see W.W.W Assoc. v Giancontieri, 77 NY2d 157, 162 [1990]), notwithstanding the client’s claims that alleged oral promises were intended to be added as components of the written retainer agreement. Since an arbitrator’s award ordinarily will not be vacated even if founded upon errors of law and/or fact (see Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, 479-480 [2006], cert dismissed 548 US 940 [2006]), there is no basis to vacate this award founded upon applicable contract principles (see Szabados v Pepsi Cola Bottling Co. of N.Y., 191 AD2d 367 [1993]). "

When clients depend upon the expertise of an attorney, and then end up with a bad result, they can successfully plead legal malpractice.  Does a client settle the personal injury case or litigate on?  Depending on how the attorney advises the client, there may or may not be legal malpractice.  Here is an example.

Polanco v Greenstein & Milbauer, LLP    2012 NY Slip Op 04385    Decided on June 7, 2012
Appellate Division, First Department   concerns a case in which plaintiff was struck in the neck by a piece of lumber.  She alleged that the defendant was negligent in urging her to settle the case without a MRI and telling her that a MRI would not lead to a more favorable result.  She settled the case for $ 20,000 only to find out later that she was permanently disabled.
 

"after settling the case for $20,000, she obtained an MRI showing a disc herniation that required surgical intervention; that she remains permanently disabled; that defendant’s negligence proximately caused her to sustain damages by not gaining the fair value for her case; and that she would have been successful in the underlying action had defendants exercised due care. These allegations are sufficient to state a claim for legal malpractice (see Garnett v Fox, Horan & Camerini, LLP, 82 AD3d 435, 435 [2011]; see generally Tortura v Sullivan Papain Block McGrath & Cannavo, P.C., 21 AD3d 1082, 1083 [2005], lv denied 6 NY3d 701 [2005]). Plaintiff was not required to [*2]show a likelihood of success in the underlying action, but was "required only to plead facts from which it could reasonably be inferred that defendant’s negligence caused [her] loss" (Garnett, 82 AD3d at 436). Plaintiff plead such facts. "

Gershkovich v Miller, Rosado & Algios, LLP    2012 NY Slip Op 04318    Decided on June 6, 2012  Appellate Division, Second Department  is a legal malpractice case which recently went to a motion for summary judgment.  Each side gave it their best shot, and the result was a stand-off.
 

"Here, the Supreme Court properly determined that the defendant Arthur Welsher failed to establish, prima facie, that the plaintiffs Tibor Gershkovich and Galina Gershkovich (hereinafter together the respondents) were unable to prove the essential elements of their legal malpractice cause of action insofar as asserted against that defendant (see Gelobter v Fox, 90 AD3d [*2]829, 831; Suppiah v Kalish, 76 AD3d 829, 832; Ali v Fink, 67 AD3d 935, 937; Terio v Spodek, 25 AD3d 781, 785; see also M & R Ginsburg, LLC v Segal, Goldman, Mazzotta & Siegel, P.C., 90 AD3d 1208, 1209).

The Supreme Court also properly determined that although the defendant Miller, Rosado & Algios, LLP, established its prima facie entitlement to judgment as a matter of law dismissing the legal malpractice cause of action insofar as asserted by the respondents against it, the respondents raised triable issues of fact in opposition (see Silva v Worby, Groner, Edelman, LLP, 54 AD3d 634; see also Conklin v Owen, 72 AD3d 1006, 1007; Nelson v Roth, 69 AD3d 912, 913; Boglia v Greenberg, 63 AD3d at 975; Mourtil v Korman & Stein, P.C., 33 AD3d 898, 900).

Accordingly, the Supreme Court properly denied those branches of the defendants’ motions which were for summary judgment dismissing the legal malpractice cause of action insofar as asserted by the respondents against each of them. "