It’s difficult to say which is the more perplexing problem in this case.  Is it the loose procedure in which a client put down $ 1.1 million on a condo with few safeguards, or the manner in which the legal malpractice case is being handled?  in Cheong v Lau  2012 NY Slip Op 30725(U)  March 1, 2012  Supreme Court, Queens County  Docket Number: 22266/09  Judge: Darrell L. Gavrin we see both.

The legal malpractice case handling first.  Defaults, late cross-motions, what appears to be pro-se defendants, and missed deadlines are how this legal malpractice case begins.

Worse is how this real estate transaction took place.  "On July 13, 2007, plaintiffs met with Tso, a sales agent, and Lee, the principal of Paramount, whereupon plaintiffs agreed to purchase a condo unit and a parking space in a building owned by Paramount for $628,000 with a $100,000 down payment. On that same date, plaintiffs and Lee signed a terms sheet outlining the terms of the purchase. On July 19, 2007, plaintiffs retained the Lau defendants to represent them in the purchase of the condo unit and parking space. On July 25, 2007, plaintiffs and Paramount executed a contract of sale for the condo unit and parking space, and plaintiffs issued to Paramount’s attorney a check for $100,000 as the down payment. The contract did not provide for a condominium offering plan approved by the New York State Attorney General’s Office. On July 27, 2007, the down payment was released to Paramount. On February 5, 2008, plaintiffs and Paramount executed a second purchase contract, which included an approved condominium
offering plan, and plaintiffs issued an additional $5,000 down payment. At that time, Jay Lau
told plaintiffs that the $100,000 down payment would be considered a loan to Paramount and
that Lee would personally guaranty the loan. Plaintiffs received a promissory note stating
that the $100,000 would be applied to the purchase price upon closing. It is undisputed that
Paramount never satisfied the promissory note and title to the condo unit has never been
transferred to plaintiffs. Meanwhile, in January 2008, Tso asked plaintiffs to lend Paramount
$1,000,000 for a period of six months to complete construction on the building. Plaintiffs
agreed to the loan and retained the Lau defendants to represent them in the transaction. Mr.
Lau drafted the loan documents, which he advised plaintiffs would create a mortgage lien on
the property. According to its terms, Lee also personally guaranteed the mortgage. On
February 8, 2008, plaintiffs executed the mortgage documents and wired $1,000,000 to
Golden Eagle Capitol Corporation, as requested by Lee. On February 10, 2009, the mortgage
was recorded. Paramount and Lee never made any payments on the mortgage. Soon
thereafter, plaintiffs received notice that Chinatrust Bank was seeking to foreclose on its
mortgage against the subject property. On August 14, 2009, plaintiffs commenced the within
action alleging causes of action for legal malpractice and fraud against the Lau defendants,
causes of action for fraud against Paramount, Lee, and Tso, and claims to recover on the
$100,000 promissory note and personal guaranty of the note against Paramount and Lee,
respectively. " 

In this case, there has been a break-down of the orderly pleadings stage.

"The court will not entertain Tso’s untimely cross motion to dismiss the complaint and all cross claims asserted against him pursuant to CPLR § 3211 (a) (1) and/or CPLR § 3212. A cross motion for summary judgment pursuant to CPLR § 3212 made after the expiration of the statutory period or court-ordered deadline may be considered by the court, even in the absence of good cause, where a timely motion for summary judgment was made on grounds nearly identical to that of the cross motion (see Grande v Peteroy, 39 AD3d 590 [2d Dept  2007]). Here, Tso’s cross motion for summary judgment was served 20 days after the court-ordered deadline of October 1, 2011. Tso has not offered any excuse for the delay in making the cross motion (see Thompson v Leben Home for Adults, 17 AD3d 347, 348 [2d Dept 2005]). Moreover, the issues presented by Tso’s cross motion and the separate motions for summary judgment by plaintiffs and the Lau defendants are not nearly identical. Tso’s cross motion seeks summary judgment dismissing plaintiffs’ complaint insofar as asserted against him, whereas plaintiffs’ motion only seeks summary judgment on their causes of action against the Lau defendants, Paramount, and Lee. In addition, while Tso’s cross motion seeks summary judgment dismissing the Lau defendants’ cross claim for contribution or common-law and/or contractual indemnification against him, the Lau defendants’ summary judgment motion seeks dismissal of plaintiffs’ complaint insofar as asserted against  them and the cross claim by Paramount, Lee, and Tso for contribution against them. Under these circumstances, the cross motion is time-barred (see Podlaski v Long Is. Paneling Ctr. of Centereach, Inc., 58 AD3d 825, 826-827 [2009]; Bickelman v Herrill Bowling Corp., 49 AD3d 578 [2d Dept 2008]). Likewise, Tso’s cross motion to dismiss plaintiffs’ complaint and all cross claims asserted against him pursuant to CPLR § 3211 (a) (1) is untimely since it was not made within the time period during which defendants were required to serve an answer (CPLR
§ 3211 [e]; see Bennett v Hucke, 64 AD3d 529, 530 [2d Dept 2009]; see also Siegel, Practice
Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3211:52)."

Justice Goodman of Supreme Court, New York County hads a caseload full of legal malpractice cases before she retired. Here is an accounting malpractice case coming as a counterclaim for accounting fees, but the idea is just the same. InPerelson Weiner, LLP v Allison NY Slip Op 2010 31679  06/29/2010 Supreme Court, New York County, Goodman, J. Tthe claim was that client did not pay fees, and client counterclaimed that the accountant committed malpractice in handling a foreign investment, to the tune of $ 61,000. Client alleges that accountant overbilled him and advised him that litigation in the Cayman Islands was essential, when in fact it was useless. In this motion on the amended pleadings, Justice Goodman lays out a well enunciated explanation of how such a pleading should look and why it is permissible. Here, it is neither too late, nor too prejudicial to dismiss

Attorney fees are an endless source of conflict. They have always been an endless source of conflict. We faintly remember from high school that Abraham Lincoln was involved in attorney fee litigation. Today is no exception. in Landa v Blocker   2011 NY Slip Op 00191  ;Appellate Division, Second Department we see attorney fees in the matrimonial law arena.
Although we do not know (and the decision avoids discussion) of how the 22 NYCRR 1200 et seq rules impact this matrimonial attorney fee issue, we see defendant’s legal malpractice case gutted.

"The Supreme Court properly denied the defendant’s motion for summary judgment dismissing the amended complaint, but it should also have denied that branch of the plaintiff’s motion which was for summary judgment on the first cause of action to recover on an account stated.

The plaintiff demonstrated his prima facie entitlement to judgment as a matter of law on the first cause of action by tendering invoices for services rendered prior to December 5, 2006, setting forth his hourly rate, the billable hours expended, and the particular services rendered, and establishing that the defendant signed such invoices, failed to timely object to the invoices, and made partial payments thereon (see Landa v Dratch, 45 AD3d 646, 648; Landa v Sullivan, 255 AD2d 295). In opposition, however, the defendant submitted her own affidavit, which was sufficient to raise a triable issue of fact as to whether she acquiesced in the correctness of the invoices (see Interman Industrial Products, Ltd. v R.S.M. Electron Power, Inc., 37 NY2d 151, 153-154; Rodkinson v Haecker, 248 NY 480, 485). "
 

"The Supreme Court properly granted that branch of the plaintiff’s separate motion which was for summary judgment dismissing the defendant’s counterclaims, among other things, to recover damages for legal malpractice. Although an attorney’s affirmation may serve as an expert opinion establishing "[a] basis for judging the adequacy of professional service" (Zasso v Maher, 226 AD2d 366, 367), here, in opposition to the plaintiff’s prima facie showing of entitlement to judgment as a matter of law, the attorney’s affirmation submitted by the defendant was insufficient to raise a triable issue of fact as to whether the plaintiff was negligent in his representation of her in the underlying matrimonial action (see Scartozzi v Potruch, 72 AD3d 787, 788-789). Moreover, in opposition to the plaintiff’s prima facie showing, the defendant failed to raise triable issues of fact with respect to her other counterclaims."
 

The Law sites are consistently filled with stories of partners leaving firm A for firm B, and sometimes taking assoicates with them. Law firms fold and are re-cast as new firms. How does this restelss movement affect legal malpractice clients?

In The New Kayak Pool Corp. v Kavinoky Cook LLP ;2010 NY Slip Op 05176 ;Decided on June 11, 2010 ;Appellate Division, Fourth Department we see the Third Department’s short-form answer.
 

"Plaintiffs commenced this legal malpractice action seeking damages arising from defendants’ alleged malpractice in failing to ascertain the existence of insurance coverage for the parties sued by plaintiffs in the underlying trademark infringement action. The same attorney represented plaintiffs throughout the course of that action. That attorney began representing plaintiffs in 1999 when he was a partner in defendant Kavinoky Cook LLP (Kavinoky). When he subsequently joined defendant Hodgson Russ, LLP (Hodgson), plaintiffs executed a consent to change attorney form in June 2003, thereby substituting Hodgson for Kavinoky as plaintiffs’ attorney of record in the underlying action. That action settled in February 2004 and the instant action was commenced in January 2007.

Supreme Court properly denied the motion of Kavinoky seeking summary judgment dismissing the amended complaint and cross claims against it. Kavinoky contends that the action against it is time-barred because it was commenced more than three years after the attorney in question left Kavinoky and the consent to change attorney form was executed by plaintiffs (see CPLR 214 [6]). We reject that contention inasmuch as the statute of limitations was tolled by the doctrine of continuous representation during the time that the same attorney represented plaintiffs in the underlying action (see [*2]Waggoner v Caruso, 68 AD3d 1, 7, affd ___ NY3d ___ [May 11, 2010]; HNH Intl., Ltd. v Pryor Cashman Sherman & Flynn LLP, 63 AD3d 534, 535)"

We commonly get two types of fraud letters, and they come all the time.  One recent type is the "collaborative divorce" letter in which an offshore spouse needs help collecting a large equitable distribution check from the US spouse.  Another type is the offshore large corporation that needs help collecting a debt from a US debtor. 

When this law firm fell victim to the second of these frauds its legal malpractice carrier was asked to defend and indemnify against the bank.  Supreme Court found no coverage, but the AD reversed.

Lombardi, Walsh, Wakeman, Harrison, Amodeo & Davenport, P.C. v American Guar. & Liab. Ins. Co. ,  2011 NY Slip Op 04589 ,  Decided on June 2, 2011 ; Appellate Division, Third Department .  "Plaintiff, a law firm, was contacted via e-mail by an individual purporting to be the chief executive officer of a Taiwanese corporation seeking legal assistance in collecting debts in North America. After the individual sent plaintiff a signed retainer agreement, plaintiff received a $384,700 check from a purported debtor of the corporation. Plaintiff opened an account at Berkshire Bank and deposited the check. At the request of the purported chief executive officer, plaintiff instructed Berkshire Bank to wire the value of the check, minus a legal fee for plaintiff, in two transfers to a third party in South Korea, who was allegedly a supplier of the Taiwanese corporation. After the funds were transferred, Berkshire Bank notified plaintiff that the check was counterfeit and plaintiff’s account [*2]was overdrawn."
 

"Plaintiff commenced this action seeking, among other things, declarations that defendant was required to defend and indemnify it. Defendant moved for summary judgment. Plaintiff cross-moved for summary judgment or, in the alternative, an order compelling defendant to comply with its disclosure demands. Supreme Court denied plaintiff’s cross motion, granted defendant’s motion and entered a judgment declaring that defendant was not required to defend or indemnify plaintiff in the Berkshire Bank action. Plaintiff appeals.

An insurer has the duty to defend an insured "whenever the allegations within the four corners of the underlying complaint potentially give rise to a covered claim, or where the insurer ‘has actual knowledge of facts establishing a reasonable possibility of coverage’" (Frontier Insulation Contrs. v Merchants Mut. Ins. Co., 91 NY2d 169, 175 [1997], quoting Fitzpatrick v American Honda Motor Co., 78 NY2d 61, 67 [1991]). The insurer’s duty to defend, which is broader than the duty to indemnify, exists regardless of the merit of the underlying claim (see Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137 [2006]). To avoid defending an action, the insurer bears the burden of showing that the claim is not even potentially covered (see United States Fid. & Guar. Co. v U.S. Underwriters Ins. Co., 194 AD2d 1028, 1028-1029 [1993]).

Berkshire Bank’s complaint alleged that plaintiff, as a law firm, opened a bank account, deposited a check in that account, ordered wire transfers from the account and caused an overdraft when the check was determined to be counterfeit. The complaint included causes of action for breach of the account agreement and violations of the Uniform Commercial Code. The insurance policy issued by defendant provided coverage for any claim "based on an act or omission in [plaintiff’s] rendering or failing to render Legal Services for others." "Legal Services" is defined by the policy as "those services performed by an Insured as a licensed lawyer in good standing . . . or in any other fiduciary capacity but only where the act or omission was in the rendition of services ordinarily performed as a lawyer." The terms of this policy encompass more than what would traditionally be considered "legal [*3]malpractice" (see United States Fid. & Guar. Co. v U.S. Underwriters Ins. Co., 194 AD2d at 1029). "

"Because defendant did not meet its burden on the motion, plaintiff was entitled to a declaration that defendant had a duty to defend plaintiff in the Berkshire Bank action. Due to the confidential settlement of that action, we are unable to determine whether defendant was obligated to indemnify plaintiff. Accordingly, we remit for further proceedings (see Servidone Constr. Corp. v Security Ins. Co. of Hartford, 64 NY2d 419, 425 [1985]). "

There is a rule against successive motions for summary judgment.  The usual understanding is that you get one shot, and if you take it too early, or upon insufficient evidence, then too bad.  However, in Alaimo v Mongelli    2012 NY Slip Op 02071    Decided on March 20, 2012  Appellate Division, Second Department  we see a different result.
 

"Contrary to the plaintiffs’ contention, that branch of the motion of the defendants Michael F. Mongelli and Michael F. Mongelli, P.C. (hereinafter together the Mongelli defendants) which was for summary judgment dismissing the first cause of action in the amended complaint insofar as asserted against them "did not violate the general proscription against successive summary judgment motions because it was based on deposition testimony which was not elicited until after the date of the prior order denying the earlier motion for summary judgment" (Auffermann v Distl, 56 AD3d 502, 502; see Staib v City of New York, 289 AD2d 560). "

"Here, the Mongelli defendants established their prima facie entitlement to judgment as a matter of law dismissing the amended complaint alleging legal malpractice insofar as asserted against them by demonstrating that the plaintiffs would be unable to prove, inter alia, the element of causation (see Humbert v Allen, 89 AD3d at 806-807; Marino v Lipsitz, Green, Fahringer, Roll, Salibury & Cambria, LLP, 87 AD3d 566; Pistilli Constr. & Dev. Corp. v Epstein, Rayhill & Frankini, 84 AD3d 913; Markowitz v Kurzman Eisenberg Corbin Lever & Goodman, LLP, 82 AD3d 719). In opposition, the plaintiffs failed to raise a triable issue of fact (see generally Zuckerman v City of New York, 49 NY2d 557, 562). "

Client settles case and then turn around and sues attorney who settled the case for client, or worse (for the attorney) client settles case on his own, and then sues attorney who was already off the case.  Can a client sue for legal malpractice after settling the case?  The answer is yes, if the settlement was effectively compelled by the attorney’s malpractice.

Put in a more elegant way, the Appellate Term decided Garg v Wigler   2012 NY Slip Op 50494(U)
Decided on March 20, 2012   Appellate Term, First Department:

"Accepting plaintiff’s allegations as true, and according them the benefit of every favorable inference, as we must in the context of a motion to dismiss on the pleadings (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]), we find the complaint, as amplified by plaintiff’s verified answers to defendant’s interrogatories, sufficient to state a cause of action for legal malpractice. The record so far developed raises triable issues as to whether defendant-attorney’s prior representation of plaintiff — including defendant’s acknowledged failure to timely file an administrative appeal following the denial of plaintiff’s claim for disability benefits — was so deficient as to compel plaintiff to settle the underlying federal lawsuit (see Jones Lang Wootten USA v LeBoeuf, Lamb, Green & MacRae, 243 AD2d 168, 175 [1998], lv dismissed 92 NY2d 962 [1998]; Whitman & Ransom v Revson, 220 AD2d 321 [1995]). "Settlement, when compelled by an attorney’s breach of the standard of care, does not present an intervening cause so as to bar a malpractice action" (Jones Lang Wooton USA, at 175). We find unavailing defendant’s contention that there are no issues of fact as to whether its malpractice, if any, caused plaintiff damages. "