Sebco Dev., Inc. v Siegel & Reiner, LLP 2024 NY Slip Op 50292(U) Decided on March 20, 2024 Supreme Court, Bronx County Gomez, J. is the kind of legal malpractice case that comes up often enough to support the idea that real estate in NYC is a paramount, driving economic force, and that the extensive lawyering necessary results in many legal malpractice cases.

The case is fantastically fact-driven, and the decision is almost appellate in depth. It is impossible to summarize for a blog, but it is definitely worth reading completely for the definitions, the explanations and the discussion of the rules of legal malpractice, continuing representation and the effect of violation of the disciplinary rules.

“The instant action is for legal malpractice, breach of fiduciary duty, tortious interference [*2]with business relations, declaratory judgment, and replevin. The complaint, filed on May 26, 2023, alleges the following. Plaintiff SEBCO DEVELOPMENT, INC. (Sebco) is a not-for-profit organization which provides affordable housing and charitable services in the Bronx. Nonparty Salvatore Gigante (SG) is Sebco’s Chief Operating Officer and nonparty Latoya Allen (LA) is Sebco’s Vice President of Operations and Director of Management. The remaining plaintiffs (property owners), own affordable housing buildings in Bronx County and each is either Sebco’s direct affiliate or subsidiary. The property owners hold beneficial title to their buildings, which provide subsidized, affordable housing to low-income families and low-income senior citizens who reside therein. With respect to the property owners and their properties, Sebco sponsored and developed each of the affordable housing projects existing at the buildings owned by the property owners and Sebco provides oversight on all fiscal matters for the property owners. Defendant SIEGEL & REINER, LLP (SR) is a law firm at which defendant IRWIN SIEGEL (Siegel) is a partner. Siegel and SR previously provided both legal and accounting services for plaintiffs, essentially acting as outside general counsel. Specifically, Siegel previously, inter alia, advised plaintiffs on all corporate matters, ensuring plaintiffs’ compliance with corporate formalities, advising plaintiffs on all refinancing projects, and advising plaintiffs on all governmental regulatory matters to ensure that plaintiffs were in full compliance therewith. In addition to representing plaintiffs, defendants also represented other entities, including nonparties Building Management Associates, Inc. (BMA), Fox River Properties, Inc. (Fox), Sebco IV Associates, LP (Sebco IV), and Father Louis Gigante (FLG), and or his estate. FLG founded Sebco and BMA and upon his death, Siegel became the executor of FLG’s estate. In that capacity, Siegel controls BMA, has an interest in and also controls Fox, the latter being Sebco IV’s general partner, which Siegel also controls. Nonparty Luigino Gigante (GG) is FLG’s son, the beneficiary of FLG’s estate, and Siegel’s client. BMA is a not-for-profit property management agency, that, until February 25, 2023, managed the property owners’ buildings. Prior to BMA’s termination, Sebco and BMA had a close working relationship. They shared office space at premises owned by and leased from Fox and also shared staff. Prior to BMA’s termination, SG was BMA’s President. Although defendants counseled and represented BMA, Fox, and Sebco IV on a host of transactions and did so while simultaneously representing Sebco in those transactions, defendants never disclosed such dual representation. To the extent that with respect to the foregoing transactions, Sebco’s interests were divergent from BMA, Fox, FLG, and Sebco IV’s interest, the dual representation created a conflict of interest, obligating defendants to disclose the dual representation and to recommend that Sebco obtain independent counsel. The failure to advise plaintiffs of the foregoing conflicts of interest, including decisions made by Siegel after FLG’s death when Siegel was FLG’s attorney-in-fact, have caused plaintiffs damage. In April 2022, defendants were terminated and, after plaintiffs retained new counsel, it was discovered that defendants had failed to provide legal advice to plaintiffs, which as a result, meant that they had not complied with corporate and regulatory formalities. Specifically, Sebco’s documentation was inadequate, its corporate documents were never properly updated to reflect FLG’s death, and after Sebco was audited by the City of New York, the latter raised issues concerning transactions to which Sebco was a party. Significantly, transactions between Sebco, Sebco IV, and nonparty Crotona Belmont, continued to bear FLG’s signature even after he had resigned and ultimately died. Siegel never advised Sebco that FLG had to be omitted from these [*3]documents and, in fact, refused to remove him from the same. In 2018, Sebco began work as a sponsor and developer on a project whereby it sought to obtain refinancing in order to rehabilitate an affordable housing property owned by Sebco IV. Defendants acted as Sebco’s counsel in the foregoing endeavor for which Sebco expended significant labor and financial resources. Despite the obligation to provide Sebco with their undivided loyalty, defendants represented other entities and individuals in the foregoing transaction, including BMA, Fox, Sebco IV and FLG. To that end, since defendants failed to disclose the conflict of interest and Sebco was paying defendant for legal services that benefitted parties with interests adverse to Sebco, defendants violated New York Rules of Professional Conduct 1.7 and 18(f). Prior to defendants’ termination in April 2022, all parties were cooperatively working to accomplish the ultimate goal on the Sebco IV project. However, thereafter, in order to aid their other clients, defendants began to interfere with the completion of the project, by (1) asserting in 2018 that the refinancing sought by Sebco IV required the consent of Sebco IV’s limited partner, which advice was at variance to defendants’ advice to Sebco in 2015; and (2) asserting that Sebco would not be entitled to a developer fee, which meant that defendants, after a review of the budget for the project, knew that Sebco was involving itself in a financially detrimental project. But for defendants’ legal advice in 2015 and its failure to advise Sebco that it would earn no developer fee on the project, Sebco would have never undertaken the Sebco IV project. Additionally, defendants, inter alia, submitted documentation to the New York City Department of Housing Preservation and Development (HPD) seeking to establish an HDFC for Sebco IV, which would confer tax benefits to Sebco IV and none to Sebco. With respect to BMA’s termination, on January 9, 2023, GG and Siegel entered the space jointly occupied by Sebco and BMA. GG and Siegel were accompanied by armed guards. Siegel intimidated the employees at the premises and encouraged many of Sebco’s employees to resign and begin working for BMA. GG and Siegel attempted to break into SG’s office, gained entry, rummaged through SG’s desk, and took some of SG’s property. Siegel left notices at the office, indicating that SG was no longer BMA’s president and that GG was BMA’s new president. On January 10, 2023, GG and Siegel engaged in similar behavior and Siegel threatened Sebco’s employees. On January 10, 2023, Fox served a 10-day Notice to Quit upon Sebco, seeking to prematurely terminate its lease. Based on the foregoing, and because GG lacked the requisite knowledge to be defendant’s President, on January 11, 2023, the property owners decided to terminate their relationship with BMA and further determined that Sebco would assume the management of the property owners’ properties. Thereafter, on January 17, 2023, BMA and GG, at Siegel’s behest, denied plaintiffs the ability to access their own bank accounts. Between January 19 and February 8, 2023, based on GG and Siegel’s actions, many BMA employees resigned. On February 3, 2023, Sebco terminated their lease with Fox. Despite representing plaintiffs when the management agreements were executed, such that Siegel was aware that BMA’s termination was authorized thereunder, Siegel nevertheless interfered and obstructed Sebco’s assumption of the management of the property owners’ buildings. Such obstruction, which included the denial of access to plaintiffs’ own bank accounts, has caused financial damage to Sebco and the property owners. The foregoing obstruction by Siegel constitutes a breach of the fiduciary duty he then owed to plaintiffs. In addition to the foregoing, Siegel also breached his fiduciary duty to Sebco when at his behest, BMA sued SG and LA, solely to prevent plaintiffs from terminating their prior management [*4]agreements with BMA. Said lawsuit frivolously asserted that SG and LA interfered with BMA’s business relationships with the property owners and that SG and LA encouraged BMA’s employees to resign. While the law suit was ultimately discontinued, on March 13, 2023, Siegel sent a letter to nonparty St. Barnabus Housing Development Corporation (St. Barnabas), with whom Sebco had an ongoing beneficial relationship, wherein Siegel apprised St. Barnabas that he had requested that HPD and other agencies not allow any company in which SG had any interest to manage any property, apprised St. Barnabus that BMA had sued SG and LA, and shared links to newspaper reports which contained negative information about SG and LA. As a result, on April 24, 2023, in a telephone call between Sebco and United States Department of Housing and Urban Development (HUD), the latter indicted that the call was prompted by the dispute between Sebco and BMA about which HUD learned from GG and Siegel. HUD then indicated that it did not want Sebco to manage several properties. On May 15, 2023, Siegel sent Sebco a letter asking it to remove FLG’s name and likeness from Sebco’ website. Since Siegel had previously approved of Sebco’s use of FLG’s name and likeness on Sebco’s website, the letter taking a contrary position constitutes a breach by Siegel of his fiduciary duty to Sebco. After defendants were terminated, Sebco demanded that they return all files and documents relating to Sebco’s operations and corporate matters. Said files were the result of defendants’ decades-long representation of Sebco. Despite the request, defendants have refused to return the aforementioned files.”

Jumping to the conclusion:

“To the extent that plaintiffs aver that the continuous representation doctrine avails them, as discussed above, it would only avail them with respect to the Sebco IV project, since it is the only claim for legal malpractice which sufficiently pleads damages. However, plaintiffs’ counsel’s assertions are not a substitute for allegations in the complaint and are not tantamount to an affidavit to cure pleading defects in the complaint (Cron at 366 [In opposition to a motion to dismiss for failure to state a cause of action, a plaintiff may submit affidavits to remedy defects in the complaint, and if an affidavit is submitted for that purpose, it shall be given its most favorable intendment]). Here, contrary to counsel’s assertion, the malpractice arising from the Sebco IV project accrued in 2015, when it is alleged that Sebco was provided with incorrect legal advice, without which, it would not have undertaken the Sebco IV project. It is then alleged that sometime thereafter, the Sebco IV project failed and that damages resulted therefrom. Thus, the foregoing claim accrued in 2015 and at best the complaint asserts that defendants continued to provide legal advice to Sebco through 2018, when they changed their position. Thus, even if the instant claim accrued in 2018, by 2023, five years later, when this action was commenced, the statute of limitations had expired. For purposes of continuous representation, that defendants continued to advice plaintiffs on unrelated matters does not avail them.

With respect to the claim for tortious interference with business relations, Long Is. Thoracic Surgery, P.C. v Bldg. Serv. 32BJ Health Fund (215 AD3d 942 [2d Dept 2023]), does not avail plaintiffs. To be sure, as noted by this Court, at best, here, the complaint only sufficiently pleads the foregoing on alleged false statements made by defendants to HUD, which then resulted in the denial by HUD of plaintiffs’ request to manage some properties. As the Court noted, unlike the plaintiffs in Long Is. Thoracic Surgery, P.C., who in addition to asserting a claim for tortious interference with business relations also sufficiently pleaded a claim for defamation, here, the latter claim was neither pleaded nor claimed. Thus, contrary to plaintiffs’ assertion, unlike in Long Is. Thoracic Surgery, P.C., defendants’ conduct was not independently tortious so as to plead a cause of action for tortious interference with business relations. It is hereby

ORDERED that with the exception of the cause of action for replevin the complaint be dismissed. “

The Court of Appeals addresses Judiciary Law 487 questions infrequently, and each of its decisions tends to be broadly transformative. Urias v Daniel P. Buttafuoco & Assoc., PLLC 2024 NY Slip Op 01497 Decided on March 19, 2024 Court of Appeals Halligan, J. is no exception. It harmonizes and simplifies one of the major embellishments that have been woven into the statute over the years, and permits plenary actions for any Judiciary Law 487 claim going forward.

“Judiciary Law § 487 provides that “[a]n attorney or counselor[ ] . . . guilty of any deceit or collusion, . . . with intent to deceive the court or any party[,] . . . forfeits to the party injured treble damages, to be recovered in a civil action.” This appeal presents the question of whether a Judiciary Law § 487 claim may be brought in a plenary civil action where a plaintiff alleges that attorney deceit led to an adverse judgment or order. Given the unique concerns addressed by this statute, we hold that such a plenary action lies. We nevertheless affirm the Appellate Division’s order on alternative grounds.”

“”We begin with the question of whether Judiciary Law § 487 permits a plenary action. We thus turn to the “plain language of the statute” as “the clearest indicator of legislative intent” (Matter of T-Mobile Northeast, LLC v DeBellis, 32 NY3d 594, 607 [2018]). Section 487 provides that:

“An attorney or counselor who:

Is guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party; or,

Wilfully delays his client’s suit with a view to his own gain; or, wilfully receives any money or allowance for or on account of any money which he has not laid out, or becomes answerable for,

Is guilty of a misdemeanor, and in addition to the punishment prescribed therefor by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action.”

This provision is “the modern-day counterpart of a statute dating from the first decades after Magna Carta; its language virtually (and remarkably) unchanged from that of a law adopted by New York’s Legislature two years before the United States Constitution was ratified” (Amalfitano v Rosenberg, 12 NY3d 8, 14 [2009]). Recognizing that “[o]ur legal system depends on the integrity of attorneys who fulfill the role of officers of the court, furthering its truth-seeking function,” the statute creates a cause of action for attorney deceit that is distinct from common law fraud or legal malpractice (Bill Birds, Inc. v Stein Law Firm, P.C., 35 NY3d 173, 178 [2020]). Given the importance of safeguarding the integrity of the judicial system, section 487 allows for both criminal liability and a civil remedy in the form of treble damages (see id. at 179).

We recognize, of course, that common law has long shielded a final judgment from collateral attack in a subsequent action (see e.g. Smith v Lewis, 3 Johns. 157, 168 [NY Sup Ct 1808] [Kent, Ch. J., concurring]; Crouse v McVickar, 207 NY 213, 219 [1912]). Although subsequent actions have been permitted for fraud that is extrinsic to the underlying proceeding (see e.g. Mayor of City of New York v Brady, 115 NY 599, 617 [1889]; United States v Throckmorton, 98 US 61, 68 [1878]), or part of a “larger fraudulent scheme” (Newin Corp. v Hartford Acc. & Indem. Co., 37 NY2d 211, 217 [1975]), the interest in finality of judgments generally constrains a court’s authority to revisit a final judgment in a collateral action (see Crouse, 207 NY at 219). Such a challenge may instead be brought under CPLR 5015, which authorizes “[t]he court which rendered a judgment or order” to “relieve a party from it upon such terms as may be just . . . upon the ground of[,]” among others, “fraud, misrepresentation, or other misconduct of an adverse party” (CPLR 5015 [a] [3]).”

“We appreciate that it might be more efficient to require a plaintiff who either directly or effectively challenges a judgment to return to the court that issued it and seek vacatur under CPLR 5015, and we note that transfer of a plenary action to the court that handled the underlying proceedings may be desirable where consistent with the CPLR’s venue provisions. Nor do we take lightly the interest in preserving the finality of judgments. But the legislature has singled out the specific type of claim here—an allegation of attorney deceit on the court or a party—and determined that recovery of treble damages should be available in a civil action. We conclude that section 487 must be read to allow a plenary action for deceit, even where success on that claim might undermine a separate final judgment.”

Musial v Donohue 2024 NY Slip Op 01414 Decided on March 15, 2024 Appellate Division, Fourth Department is a law school example of the territorial effect of jurisdiction and due process. A Texas law firm prosecutes a Texas motor vehicle accident in Texas, and is not subject to a New York legal malpractice case for that work.

“Memorandum: Plaintiffs, who reside in New York, commenced this breach of contract and legal malpractice action against Texas attorney Russell Button, Esq., and his law firm, the Button Law Firm, PLLC (collectively, Button defendants), as well as New York attorneys David C. Donohue, Esq., Barry J. Donohue, Esq., and John F. Donohue, Esq., and their law firm, Donohue Law Offices (collectively, Donohue defendants). Plaintiffs allege that defendants failed to provide them with adequate legal representation with respect to claims arising from a motor vehicle accident that occurred in Texas. In appeal No. 1, plaintiffs appeal from an order that granted the Button defendants’ motion to dismiss the complaint against them for lack of personal jurisdiction. In appeal No. 2, plaintiffs appeal from an order that denied their motion seeking, inter alia, to strike the note of issue or obtain post-note of issue discovery.

With respect to appeal No. 1, we reject plaintiffs’ contention that the Button defendants are subject to long-arm jurisdiction in New York. Under CPLR 302 (a) (1), ” ‘a court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent . . . transacts any business within the state’ ” (People v Frisco Mktg. of NY LLC, 93 AD3d 1352, 1353 [4th Dept 2012]). “Jurisdiction can attach on the basis of one transaction, even if the defendant never enters the state, so long as the defendant’s activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted” (Glazer v Socata, S.A.S., 170 AD3d 1685, 1686 [4th Dept 2019], lv denied 33 NY3d 911 [2019], quoting Fischbarg v Doucet, 9 NY3d 375, 380 [2007] [internal quotation marks omitted]). “Purposeful” activities are “those by which a defendant, through volitional acts, avails itself of the privilege of conducting activities within [New York], thus invoking the benefits and protections of its laws” (id., quoting Fischbarg, 9 NY3d at 380 [internal quotation marks omitted]; see generally Ehrenfeld v Bin Mahfouz, 9 NY3d 501, 508 [2007]). “As the party seeking to assert personal jurisdiction, the plaintiff bears the burden of proof on [that] issue” (Frisco Mktg. of NY LLC, 93 AD3d at 1353 [internal quotation marks omitted]).

Here, plaintiffs failed to show that the Button defendants purposefully availed themselves of the privilege of conducting activities in New York so as to subject them to long-arm jurisdiction pursuant to CPLR 302 (a) (1), inasmuch as the Button defendants “never entered [*2]New York, [were] solicited . . . to perform services outside of New York, . . . performed outside of New York such services as were performed, and [are] alleged [only] to have neglected to perform other services outside of New York” (Mayes v Leipziger, 674 F2d 178, 185 [2d Cir 1982]; see Bloomgarden v Lanza, 143 AD3d 850, 852 [2d Dept 2016]), and the documentary evidence belies the conclusory allegations of plaintiffs’ counsel that the Button defendants actively solicited referrals in New York (cf. Fischbarg, 9 NY3d at 377; see generally Eberhardt v G & J Contr., Inc., 188 AD3d 1653, 1654 [4th Dept 2020]; Peters v Peters, 101 AD3d 403, 403-404 [1st Dept 2012]). Even accepting as true the allegations set forth in the complaint and in the opposition to the motion to dismiss, and according plaintiffs the benefit of every favorable inference (see Bloomgarden, 143 AD3d at 851), we conclude that, although plaintiffs signed the Button defendants’ retainer agreement in New York and were in New York while on a telephone conference call with defendant Russell Button, who was in Texas at the time, this occurred during the course of the Button defendants’ performance of legal services in Texas and because plaintiffs were New York domiciliaries, not because the Button defendants were purposefully engaging in any business activities in New York (see id. at 852; cf. State of New York v Vayu, Inc., 39 NY3d 330, 332-335 [2023]).

Plaintiffs also failed to make a prima facie showing of long-arm jurisdiction over the Button defendants pursuant to CPLR 302 (a) (3), inasmuch as plaintiffs’ alleged injuries did not occur within New York but, rather, in Texas, where the Button defendants’ alleged legal malpractice occurred (see Bloomgarden, 143 AD3d at 852; see generally Zeidan v Scott’s Dev. Co., 173 AD3d 1639, 1640 [4th Dept 2019]).”

Salus v Berke 2023 NY Slip Op 06183 [221 AD3d 1390] November 30, 2023 Appellate Division, Third Department is a case in which Plaintiff claims that the lawfirm took a fee on a recovery for which there should have been no fee. It made a Judiciary Law 487 claim which was dismissed. This case is similar in some ways to an as-yet undecided Court of Appeals case, Urias v. Buttafuoco Assc.

“Plaintiff Gregory J. Salus is the beneficiary of the residuary clause of the will of his mother (hereinafter decedent), and plaintiff Robert Russo is the executor of the estates of decedent and her husband. Salus hired defendants to represent him in two matters to settle the estates of decedent and her husband. The retainer agreement provided that defendants would receive one third of “any recovery by suit, settlement or otherwise” stemming from their representation of Salus in the matters regarding the estates. Defendants represented Salus in negotiations between Russo and Salus’ stepsisters to settle a disagreement over the allocation of an award received from decedent’s husband’s medical malpractice settlement. The negotiations resulted in Salus directly receiving $370,000 as well as $100,000 as the beneficiary of the residuary of decedent’s estate. As such, defendants included this $100,000—in addition to the $370,000—when calculating their legal fee.

Russo, in his capacity as trustee of a special needs trust established for Salus and as executor of decedent’s estate, and Salus in his individual capacity commenced this action alleging that defendants improperly calculated their legal fee pursuant to the retainer agreement because the $100,000 should not have been factored into defendants’ legal fee calculation. Accordingly, plaintiffs allege that defendants collected $31,668 to which they were not entitled pursuant to the signed retainer agreement. Plaintiffs pleaded five causes of action: breach of contract, conversion, fraud, legal malpractice and a violation of Judiciary Law § 487. Defendants filed a motion to, among other things, dismiss based upon CPLR 3211 (a) (1) and (7), which Supreme Court partially granted, dismissing the claims of conversion, fraud and legal malpractice. However, the court denied the motion as to the breach of contract and Judiciary Law § 487 claims finding that plaintiffs had sufficiently pleaded those causes of action. Defendants appeal.

Defendants contend that plaintiffs’ first cause of action alleging breach of contract must be dismissed as there is documentary evidence that conclusively establishes a defense as a matter of law. “A party may move for judgment dismissing one or more causes of action asserted against him [or her] on the ground that . . . a defense is founded upon documentary evidence” (CPLR 3211 [a] [1]). Dismissal “is appropriate where the documentary evidence utterly refutes the petitioner’s allegations, conclusively establishing a defense as a matter of law” (Matter of Lewis v Dagostino, 199 AD3d 1221, 1222 [3d Dept 2021] [internal quotation marks, brackets and citation omitted]). The defendant “ ’bears the burden of demonstrating that the proffered evidence conclusively refutes[*2][the plaintiff’s] factual allegations’ ” (id. [brackets omitted], quoting Kolchins v Evolution Mkts., Inc., 31 NY3d 100, 106 [2018]).”

“Although Supreme Court was correct that plaintiffs sufficiently pleaded the breach of contract cause of action, it erred by not considering defendants’ proffer, specifically, the retainer agreement, which conclusively establishes a defense as a matter of law. Indeed, the language in the retainer agreement is clear that defendants’ legal fee would be computed at “331/3% . . . of any recovery by suit, settlement or otherwise.” By their involvement in the March 2020 settlement, Salus was awarded not only $370,000, but also the $100,000 that, prior to defendants’ representation of Salus, would have been distributed to Salus’ [*3]stepsisters. As such, defendants submitted undisputed documentary evidence that conclusively establishes a defense as a matter of law (see Matter of Lewis v Dagostino, 199 AD3d at 1222-1223; Jenkins v Jenkins, 145 AD3d 1231, 1235-1236 [3d Dept 2016]). In light of this determination, plaintiffs’ fifth cause of action alleging a violation under Judiciary Law § 487 must also be dismissed inasmuch as the documentary evidence establishes that defendants were entitled to the full amount received under the retainer agreement. Accordingly, defendants’ proffer conclusively establishes that they did not “intentionally deceive[ ] the court or a party during the pendency of a judicial proceeding” (A.M.P. v Benjamin, 201 AD3d 50, 57 [3d Dept 2021] [internal quotation marks and citation omitted]; see Judiciary Law § 487 [1]).”

Plaintiffs who are injured on the job have two courses of action. They can claim Worker’s Compensation damages and they can also claim that a third-party is responsible for the injury. While the plaintiff may have to obtain WC permission to settle the third-party claim, and while the WC carrier may be able to claw back some portion of the WC compensation, the third-party case can still continue.

WC attorneys often handle only the WC case and decline to handle a potential third-party case. Boukari v Schwartzberg Assoc., LLC 2024 NY Slip Op 01247 Decided on March 07, 2024 Appellate Division, First Department is an example.

“Order, Supreme Court, Bronx County (Lucindo Suarez, J.), entered on or about October 24, 2022, which denied defendants Raymond Schwartzberg and Raymond Schwartzberg & Associates, PLLC’s motion to dismiss and/or for summary judgment dismissing plaintiff’s complaint alleging legal malpractice, unanimously reversed, on the law and the facts, without costs, the motion granted, and the complaint dismissed. The Clerk is directed to enter judgment accordingly. Appeal from order, same court and Justice, entered on or about August 30, 2023, which granted third-party defendant Haicken Law, PLLC’s motion to dismiss defendant’s third-party complaint, unanimously dismissed, without costs, as academic.

Plaintiff’s legal malpractice action should have been dismissed. Contrary to the motion court’s finding, the record conclusively established, as a matter of law, that defendants had clearly informed plaintiff during their initial meetings in May 2014, by way of unambiguous writings confirmed by plaintiff’s signature, that defendants were only assisting her in substituting counsel in a Workers’ Compensation matter and that they had declined to represent her in any personal injury action against the building owner or any third party arising from her slip and fall.

Plaintiff opposed the motion only with an attorney affirmation. She did not submit an affidavit setting forth her version of the initial conversations with defendants or any other interactions that would support her attorney’s contentions that she was under a reasonable impression that defendants had agreed to represent her on a personal injury claim or that the law firm did not clearly disclaim representation (see Zuckerman v New York, 49 NY2d 557 [1980] [an attorney affirmation is insufficient to put before the court facts of which she has no knowledge]; cf. Encalada v McCarthy, Chachanover & Rosado, LLP, 160 AD3d 475 [1st Dept 2018] [the plaintiff’s testimony about his initial conversation with counsel raised issues of fact and credibility for the factfinder to decide]).

In view of the conclusive evidence establishing the absence of legal representation by defendants on any personal injury action, the court incorrectly determined that the legal malpractice claim was timely under the continuous representation doctrine (see Pace v Horowitz, 190 AD3d 619 [1st Dept 2021]; Knobel v Wei Group, LLP, 160 AD3d 409, 410 [1st Dept 2018]) and that it was factually sustainable (see Binn v Muchnick, Golieb & Golieb, P.C., 180 AD3d 598, 599 [1st Dept 2020]; Seaman v Schulte Roth & Zabel LLP, 176 AD3d 538, 539 [1st Dept 2019]).”

Colucci v Rzepka 2024 NY Slip Op 01232 Decided on March 7, 2024 Appellate Division, Third Department is Plaintiff’s last try to avoid dismissal. The AD simply finds that this appeal (probably from the final judgment) raises no new issues that were not already raised in the appeal from the summary judgment order.

“The underlying facts of this legal malpractice action are fully set forth in our prior decision wherein this Court affirmed Supreme Court’s order granting a motion by defendants Osborne Reed & Burke, LLP, Bressler & Kunze, Burke Albright Harter & Reddy, LLP and Moyer Russi & Randall, PC for summary judgment dismissing the complaint against them as time-barred (209 AD3d 1205 [3d Dept 2022], lv denied 39 NY3d 909 [2023]). Upon reviewing the record on appeal in this case, we find that the arguments raised by plaintiffs on the present appeal mirror those raised by them on their prior appeal — as does the evidence tendered in support of defendant Thomas J. Rzepka’s motion for summary judgment dismissing plaintiffs’ complaint against him and the proof submitted by plaintiffs in opposition thereto. Accordingly, as plaintiffs’ arguments and proof are indistinguishable from those previously raised, we affirm for the reasons set forth in our prior decision (id. at 1207-1208).”

It is a little difficult to understand the claims in Peterec-Tolino v Ciacci
2024 NY Slip Op 01259 Decided on March 07, 2024 Appellate Division, First Department. The legal representation was in a personal injury setting, with a workers’ compensation component as well. Plaintiff was able to settle two personal injury cases, and got a cash advance from a funder. How the law firm might have been negligently involved is opaque.

“Supreme Court properly dismissed plaintiff’s breach of fiduciary duty claim, to the extent it arises from Ciacci’s suggestion that plaintiff and his wife seek funding for their personal injury action against nonparty City of New York and related parties (see Kurtzman v Bergstol, 40 AD3d 588, 590 [2d Dept 2007]). Plaintiff’s signed agreement with the nonparty funder, selling a portion of his interest in any potential future litigation proceeds, “conclusively establishes a defense to the asserted claim as a matter of law,” as it shows that defendants did not commit any misconduct by failing to warn plaintiff of the terms of the agreement (Leon v Martinez, 84 NY2d 83, 88 [1994]; see CPLR 3211[a][1]), which plaintiff admittedly signed (see VXI Lux Holdco S.A.R.L. v SIC Holdings, LLC, 171 AD3d 189, 193 [1st Dept 2019]; Tozzi v Mack, 169 AD3d 547, 548 [1st Dept 2019], lv denied 33 NY3d 908 [2019]). Plaintiff cannot demonstrate that defendants induced him into signing (see Countrywide Home Loans, Inc. v Gibson, 157 AD3d 853, 856 [2d Dept 2018]), or that the contract was usurious or unconscionable, given that he received a cash advance and the repayment terms were contingent upon him securing a judgment or settlement (see Cash4Cases, Inc. v Brunetti, 167 AD3d 448, 449-450 [1st Dept 2018]).

Supreme Court also properly dismissed the breach of fiduciary duty claim to the extent that it arose from defendants’ legal representation of plaintiff. Since plaintiff essentially alleges that defendants “provided inadequate and ineffective representation,” the claim is “properly treated . . . as sounding in legal malpractice” (Cherry Hill Mkt. Corp. v Cozen O’Connor L.P., 118 AD3d 514, 514 [1st Dept 2014]). As for plaintiff’s proceedings before the Workers’ Compensation Board (WCB), both the Administrative Law Judge and review panel’s appeal decisions constitute documentary evidence conclusively establishing that plaintiff would not have prevailed, as those decisions were based on his claim form, statements at an independent medical evaluation, and testimony during the WCB hearing (see O’Callaghan v Brunelle, 84 AD3d 581, 581-582 [1st Dept 2011], lv denied 18 NY3d 804 [2012]). As for his first personal injury action against the City, the MTA, and related parties, the complaint fails to state a cause of action for malpractice since defendants successfully negotiated [*2]a settlement on his behalf despite an adverse finding by the WCB. As for his second personal injury action against private construction companies, of which plaintiff disclaimed knowledge until after the settlement was negotiated, the stipulation of discontinuance demonstrates that the settlement covered those companies as well, as they were represented by the same attorney who represented the City defendants in the other action and negotiated the settlement with plaintiffs (see Chic Realty 712, LLC v GSA Holding Corp., 220 AD3d 914, 915 [2d Dept 2023]).”

Channel Fabrics, Inc. v Skwiersky, Alpert & Bressler LLP 2023 NY Slip Op 06471 [222 AD3d 512] December 19, 2023 Appellate Division, First Department illustrates the varying levels of service that accountants provide, and how the all important accountant’s retainer agreement can limit liability.”

“To state a claim for accountant malpractice, a complaint must allege that there was a departure from accepted standards of practice and that the departure was a proximate cause of the injury suffered by plaintiff (D.D. Hamilton Textiles v Estate of Mate, 269 AD2d 214, 215 [1st Dept 2000]; see also Friedman v Anderson, 23 AD3d 163, 164-165 [1st Dept 2005]). An accountant’s engagement letter governs the parameters of their retention (Italia Imports v Weisberg & Lesk, 220 AD2d 226, 226-227 [1st Dept 1995]). An accountant who has been retained to perform a “review engagement” is responsible for duties more limited in scope than an accountant hired to conduct an audit (William Iselin & Co. v Mann Judd Landau, 71 NY2d 420, 424-425 [1988]).

The crux of the complaint is that defendants were negligent and committed malpractice by not discovering an alleged deficit in plaintiff’s financial statements, and by failing to report that deficit to plaintiff. However, these allegations are “utterly refute[d]” by the documentary evidence, which defined the scope of the parties’ engagement and confirmed that defendants had no such duty (Chen v Romona Keveza Collection LLC, 208 AD3d 152, 157 [1st Dept 2022] [internal quotation marks omitted]; CPLR 3211 [a] [1]).

The engagement letters specified that defendants had been retained to conduct a “review engagement”—not an audit—and that defendants’ engagement could “not be relied upon to identify or disclose any financial statement misstatements.” The engagement letters also stated that defendants would “assist in the preparation of [plaintiff’s] financial statements . . . but the responsibility for the financial statements remains with [plaintiff],” and expressly stated that defendants would not express an opinion regarding the financial statements. Thus, the engagement letters confirmed that the responsibility for discovering issues with plaintiff’s finances remained with plaintiff, not defendants.

Nor did the complaint allege facts indicating that defendants’ review engagement deviated from the accepted standards of practice. Rather, the complaint presented only conclusory allegations that defendants failed to identify errors in the financial information that plaintiff had provided to them. Plaintiff refers to vague “analytical procedures” that purportedly would have uncovered mistakes in its financial reporting, which then were to have been verified through defendant’s questioning of plaintiff (and not, as in an audit, the questioning of third parties). However, plaintiff fails to explain how engaging in “analytical procedures” would have uncovered the deficit or identify the specific “analytical procedures” that defendants [*2]should have, but did not, perform. Plaintiff has also not identified the specific errors in its accounts receivable that the analytical procedures would have supposedly revealed.”