We were recently asked whether an Expert, testifying in a legal malpractice case can commit legal malpractice during testimony in the case.  We discussed whether there was an attorney-client relationship, and whether "absolute immunity" for in-court testimony applied.  Now, Levine v Harriton & Furrer, LLP ; 2012 NY Slip Op 01401 ; Decided on February 23, 2012; Appellate Division, Third Department  discusses the same subject, this time for an engineer.
 

"Plaintiff, a licensed professional engineer, was retained to provide services in connection with a personal injury claim in the Court of Claims against the State of New York arising from an alleged highway defect. The claim was subsequently transferred to defendant, a law firm in the Village of Round Lake, Saratoga County, and plaintiff was again retained. The parties initially proceeded upon an oral agreement. In February 2006, plaintiff submitted a written retainer agreement to defendant setting forth a retainer fee and establishing hourly charges and fees, among other things. Defendant paid the retainer fee and, on the claimant’s behalf, returned the agreement to plaintiff, without signature. Plaintiff subsequently provided services and submitted bills periodically to defendant. Defendant made payments through December 2007, when the trial was completed; thereafter, defendant made no further payments but did request continuing services, which plaintiff provided. In May 2008, the Court of Claims rendered a determination dismissing the claim upon the ground that negligence had not been proven. Plaintiff allegedly continued to submit invoices for payment of the outstanding balance due through October 2008, but received no response. After plaintiff’s counsel contacted [*2]defendant, defendant responded in writing in November 2008, refusing to pay and alleging that the unfavorable determination of the claim had resulted from plaintiff’s professional malpractice. "

"Defendant’s objections were not primarily grounded in the particulars of the invoices; instead, the central contention is that the failure to pay for plaintiff’s services was justified by his alleged malfeasance. However, this claim was not supported by an expert affidavit opining that plaintiff’s services "deviated from accepted industry standards" and that this failure proximately caused the loss of the claimant’s case (Columbus v Smith & Mahoney, 259 AD2d 857, 858 [1999]; see Travelers Indem. Co. v Zeff Design, 60 AD3d 453, 455 [2009]). Contrary to defendant’s claim, the decision of the Court of Claims does not replace such an expert opinion. Although that court criticized some of plaintiff’s methods, it made no finding as to his competence beyond the requisite assessment of the credibility of the conflicting expert opinions. The mere fact that the Court of Claims found plaintiff’s opinions less credible than those of the opposing experts is insufficient to present a factual issue as to whether his performance was substandard; such determinations are necessarily made whenever the opinions of experts are in conflict. Further, the court explicitly stated that its determination was not based solely on credibility, but also on its factual conclusion that the subject accident was proximately caused by driver error, and not by a highway defect."

 

It really does not get any better than this, in the legal malpractice world.  Client asks "Does the Judge dislike me?"  Attorney answers "No, the judge is fair."  In this story, however, it is all reversed.  From Thomson Reuters, "Judge Steps Aside in Case of Alleged Car vandal"

"NEW YORK, Feb 24 (Reuters) – A Brooklyn judge has recused himself from hearing a legal malpractice case after the plaintiff was arrested for tampering with the judge’s car.

Justice Arthur Schack ruled Friday that he would step aside from the case brought by Alex Breytman against Donald Schechter, an attorney who had represented Breytman in an earlier lawsuit.

Schack said he was recusing himself because Breytman was arrested on Jan. 19 for allegedly committing numerous counts of felony criminal mischief against the motor vehicles of Schack and other colleagues from Kings County Supreme Court.

"To avoid the appearance of any impropriety on my part, I must recuse myself from this action, even though I know I would be as fair and impartial as the individual assignment judge in deciding the motion before the court," Schack wrote.

Schack dismissed Breytman’s case against his former lawyer in February 2011 and denied Breytman’s subsequent motion to reargue, deeming it "frivolous." On Dec. 2, Breytman filed a new motion for relief from the court, which Schack described as "barely comprehensible stream-of-consciousness ranting."

Oral argument on the motion was scheduled for Feb. 24. But on Jan. 19, Breytman was arrested for the car incident. Schack signed a supporting deposition that Brooklyn prosecutors presented to the grand jury in the car case."
 

 

Gardner v Leitgeb & Vitelli, LLP ;2012 NY Slip Op 50282(U) ;Decided on February 17, 2012 ;Supreme Court, Suffolk County ;Emerson, J. presents an interesting story of parents v. children, with professionals in the middle.  More interesting, fraud, associatinos with organized crime, and a pizza location are all added in the mix of ingrediants. 
 

"This matter involves a dispute between the plaintiffs, Robert and Carmela Gardner, and their son, the defendant James Gardner, over the ownership of the corporate plaintiff, CJEFA Pizza, Inc.("CJEFA"), which operated an Italian restaurant and pizzeria in Fort Salonga, New York. The plaintiffs claim that they were the sole shareholders and officers of CJEFA from 1984 until its dissolution in 2009. The defendant James Gardner claims that he became the sole shareholder and president of CJEFA in 1997 and that he managed the restaurant until the last quarter of 2001, when his parents took over the business illegally. The plaintiffs agree that James was the manager of the business at one time until that relationship was terminated in November 2001 and he no longer had any authority to conduct CJEFA’s affairs. "

"Robert and Carmela commenced this action against James and the Vitelli defendants on or about September 30, 2004. The gravamen of the complaint is that the plaintiffs were damaged by the Vitelli defendants’ failure to prepare and file CJEFA’s federal and state income tax returns for the years 2001 and 2002 and by the Vitelli defendants’ returning CJEFA’s corporate documents to James. The plaintiffs allege that, as a result, they incurred fines and penalties because they were unable to prepare and file CJEFA’s tax returns in subsequent years and because they were unable to properly defend against and cooperate with the sales-tax audit by the [*3]New York State Department of Taxation. The complaint contains causes of action for malpractice, breach of contract, and breach of fiduciary duty against the Vitelli defendants and for conversion against both James and the Vitelli defendants."

"Each of the parties has produced copies of documents, including stock certificates, that purports to prove that party as the lawful owner of the corporation. However, the parties have disputed the authenticity of the produced documents, and the proceedings are rife with allegations of fraud, forgery and associations with organized crime. It is impossible for the Court at this time to determine the authenticity of the documents and the veracity of the various affidavits submitted, which are wildly divergent in their recitation of the facts."
 

"The first and second causes of action for malpractice and breach of contract, respectively, are based on the Vitelli defendants’ purported failure to prepare and file CJEFA’s federal and state income tax returns for the years 2001 and 2002. The unambiguous written engagement letters between CJEFA and the Vitelli defendants required the Vitelli defendants to prepare federal and state income tax returns for CJEFA for the year 2001. There was no agreement to prepare CJEFA’s federal or state income tax return for the year 2002, nor was there an agreement to file any tax returns. The plaintiffs contend that the Vitelli defendants continued to perform accounting work on the sales-and-use tax returns through mid-2003 and that there was an oral agreement between Robert and the Vitelli defendants to file the income tax returns for the year 2001. The clear engagement letters govern the terms of the parties’ relationship and, as a matter of law, cannot be altered by alleged parol or extrinsic evidence (see, Italia Imports, Inc. v Weisberg & Lesk, 220 AD2d 226, 227). It is undisputed that the Vitelli defendants prepared CJEFA’s federal and state income tax returns for the year 2001. They were under no obligation to file those returns or to prepare income tax returns for any other year. Unlike their obligation to prepare CJEFA’s sales-and-use tax returns, their obligation to prepare income tax returns was limited to one year and was not open-ended. Moreover, it is the taxpayer’s nondelegable duty to file timely tax returns (see, Penner v Hoffberg Oberfest Burger & Burger, 303 AD2d 249). Accordingly, the first and second causes of action are dismissed."

Equitable Estoppel is a principal which comes into play most often when a case is not commenced within the statute of limitations. The theory is that plaintiff was lulled into not starting the case by a wrongful act of defendant. Considering that blown statutes of limitations are one well recognized basis for legal malpractice cases, the two concepts are suitably intertwined.

In a legal malpractice decision (arising from a medical malpractice case) we see Justice Shulman of Supreme Court, New York County writing:

"The doctrine of equitable estoppel may bar a defendant from asserting the statute of limitations when the plaintiff "was induced by fraud, misrepresentations or deception to refrain from filing a timely action" (Ross v Louise Wise Sews., Inc., 8 NY3d 478, 491 [2007], quoting Simcuski v Saeli, 44 NY2d 442, 448-449 [1978]; General Stencils, lnc. v Chiappa, 18 NY2d 125, 128 [ 19661). Equitable estoppel will "bar the assertion of the affirmative defense of the Statute of Limitations where it is the defendant’s affirmative wrongdoing . . . which produced the long delay between the accrual of the cause of action and the institution of the legal proceeding" (Zumpano v. Quinn, 6 NY3d 666, 673 [2006], quoting General Stencils, lnc. v Chiappa, 18 NY2d at 128). A defendant may be precluded from.invoking a statute of limitations defense under such circumstances (Putter v North Shore Univ. Hosp., 7 NY3d 548, 552 [ZOOS], quoting Zumpano v Quinn, 6 NY3d at 673).
Where a medical malpractice claim is asserted, the patient’s medical records are material to reaching a responsible decision on whether there are grounds for a lawsuit and equitable estoppel may arise where there is an unreasonable delay in delivering records to an attorney consulted in a suspected case of malpractice (Karnruddin v Desrnond, 293 AD2d 714 [2d Dept 20021). Concealment by a physician or failure to disclose his own malpractice may, in a proper case in conjunction with other factors, provide a foundation for seeking to invoke the doctrine of equitable estoppel to extend the applicable period of limitations (Simcuski v Saeli, 44 NY2d at 452).

Of critical importance, due diligence on the plaintiffs part in ascertaining the facts and commencing the action is an essential element when plaintiff seeks to invoke this doctrine. Although there are exceptions, "the question of whether a defendant should be equitably estopped is generally a question of fact” (Putter v North Shore Univ. Hosp., 7 NY3d at 553). On the other hand, where plaintiff is timely aware of the facts requiring him to make further inquiry before the statute of limitations expires, an equitable estoppel defense to the statute of limitations is inappropriate as a matter of law (Pahlad w Brustman, 8 NY3d 901 [2007])."InLopresti v Bamundo, Zwal & Schermerhorn, LLP; 2010 NY Slip Op 33436(U);  Sup Ct, NY County ; Docket Number: 100206/09; Judge Martin Shulman determines that equitable estoppel does not apply."This record contains no evidence of any affirmative wrongdoing or purposeful concealment on Dr. Marino’s part caused Lopresti’s delay in commencing the underlying action (see Zumpano v Quinn, 6 NY3d at 673; Kamruddin v Desmond, 293 AD2d at 71 5). Lopresti’s allegedly incorrect statements to Bamundo ZwaI as to the last date Dr. Marino treated Vito Lopresti and the delay in having a personal representative appointed cannot be held against Dr. Marino. Rather, Lopresti’s and/or Bamundo Zwal’s own inaction caused the untimely commencement of the underlying case. See, e.g., Public Adm’r of State of New York v Beth Israel Med. Ctr., 2007 WL 176380 (Sup Ct, NY County, Carey, J)(granting summary judgment dismissing action as time barred and finding that hospital should not be equitably estopped from asserting statute of limitations as a defense where plaintiffs inaction and failure to avail itself of various procedural safeguards’ prevented timely commencement of action)."
 

Reading the decision in a case like this requires both a score card and a play diagram. In LZG Realty LLC v H.D.W. 2005 Forest LLC ;2010 NY Slip Op 50958(U) ;
Supreme Court, Richmond County ; McMahon, J. a series of real estate transactions led to mortgages, foreclosure and charges of professional negligence and fraud.
 

"These actions have been joined for trial and are brought by the first and second mortgagees to foreclose mortgages held against real property owned by defendant H.D.W. 2005 Forest LLC, ("H.D.W.") and guaranteed by defendant Eli Weinstein ("Weinstein"). Defendants Benjamin Hager, Esq. and Mallow Konstam & Hager, P.C. (collectively, the "Hager defendants") allegedly represented the mortgagor and Weinstein at the title closing and at both mortgage closings. "

"In its first claim against the Hager defendants, H.D.W. alleges that "[as] a result of Hager’s negligence . . . H.D.W. is now defending itself in the foreclosure action brought by LZG and Tissa, and the premises has two invalid mortgages placed against them (sic)."

In seeking summary judgment dismissing this claim, the Hager defendants allege that Benjamin Hager never purported to represent either H.D.W. or Wolinetz, and argue that the claim sounds in legal malpractice and therefore must be dismissed as there is no privity between Hager and either H.D.W. or its alleged principal, Wolinetz.[FN6] "

"However denominated, it cannot be gainsaid that the pleadings herein give the Hager defendants notice of the transaction out of which H.D.W.’s claim purports to arise. CPLR 3017 allows the Court to grant "any type of relief… appropriate to the proof whether or not demanded." Here, the third-party complaint sets forth sufficient facts to state a claim upon which relief can be granted, and so long as that pleading can be read to embrace the elements of a provable claim, the fact that the pleading theorizes it as something else is immaterial (see e.g. McGinnis v. Bankers Life Co., 39 AD2d 393 [2nd Dept 1972]).

To that extent, so much of the Hager defendants’ motion for summary judgment addressed [*8]to the third-party claim of professional negligence and grounded on the argument that "H.D.W. cannot establish privity, a necessary element in order to prove legal malpractice" is denied. "
 

The art of pleading is sometimes overstated.  Is it sufficient, indeed even preferable, to state the cause of action in understated tone, or is it better to explode with vicious terms?  The jury is still out, but in Carr v Hayes ;2012 NY Slip Op 01184 ;Decided on February 16, 2012 ;Appellate Division, First Department , more was needed than good and strong language.
 

"Plaintiff’s conclusory allegations that his ex-wife, Clements, and her divorce attorney, Hayes, who also represented plaintiff in the sale of the couple’s home, defrauded plaintiff out of his share of the proceeds of that sale, are insufficient to state a cause of action sounding in fraud and breach of trust (see CPLR 3016; see generally Pludeman v Northern Leasing Sys., Inc., 10 NY3d 486, 492 [2008]). Moreover, plaintiff’s unsupported assertions that all of the documentation regarding the sale of the home, submitted to the court below, was "fraudulent," "false" and "staged," are insufficient to defeat the motion to dismiss plaintiff’s claims for fraud, conversion and legal malpractice (see CPLR 3211[a][1]). "

 

Inscrutable decisions tell us the outcome, but do not enlighten the path to the outcome.  Here are two cases, recently decided by the Second Department in which plaintiff lost a motion for summary judgment in a legal malpractice case.  Why?  What was the shortcoming in proof?  We simply don’t and won’t know.

Verdi v Jacoby & Meyers, LLP ; 2012 NY Slip Op 01243 ; Decided on February 14, 2012 ;
Appellate Division, Second Department  and Schurz v Bodian ;2012 NY Slip Op 01235 ;
Decided on February 14, 2012 ;Appellate Division, Second Department  both tell us:

"The Supreme Court properly, in effect, upon reargument, adhered to its original determination denying the defendants’ motion for summary judgment dismissing the complaint, since the defendants failed to make the requisite showing of their prima facie entitlement to judgment as a matter of law (see Bells v Foster, 83 AD3d 876; Alizio v Feldman, 82 AD3d 804; Ippolito v McCormack, Damiani, Lowe & Mellon, 265 AD2d 303; Ostriker v Taylor, Atkins & Ostrow, 258 AD2d 572). " and "Here, the defendants established their prima facie entitlement to judgment as a matter of law by demonstrating that the plaintiff was unable to prove that she would have prevailed in the underlying action but for the defendants’ alleged negligence (see generally Zelenaya v Rosengarten, 301 AD2d 519, 520). In opposition, the plaintiff failed to raise a triable issue of fact (see Levinnstim v Parker, 27 AD3d 698; see also Molina v State of New York, 46 AD3d 642; Williams v Wal-Mart Stores, Inc., 10 AD3d 653). Accordingly, the Supreme Court properly granted the defendants’ motion for summary judgment dismissing the complaint (see generally Alvarez v Prospect Hosp., 68 NY2d 320). "

 

Barely submerged below the decisions of trial and appellate courts is the fear that if legal malpractice litigation is given full rein, there will be a legal malpractice case which immediately follows every trial of any nature.  After all, the one thing that legal malpractice always has are claims of attorney misrepresentation, and every trial has one or more attorneys.  So, in Kleinser v Astarita 2012 NY Slip Op 01130 ;Decided on February 14, 2012 ; Appellate Division, First Department  we see such a situation.  Plaintiff sues and loses a case, and then sues and loses a legal malpractice.
 

"We need not decide the statute of limitations issue, because even if timely commenced, plaintiff failed to raise an issue of fact as to his claims of legal malpractice and breach of contract. Plaintiff’s contention that defendants did not place before the trial court in the underlying action the evidence of his ownership interest in the "47BH Account" is unsupported in the record. The trial court in the underlying action expressly found that plaintiff had a 1/3 interest in the 47BH Account. Moreover, the court explained, in detail, that that 1/3 interest entitled plaintiff to recover only $37,108, not the much greater sums he sought. Plaintiff does not argue that the court’s calculation of damages was erroneous or a result of defendants’ negligence. Hence, he failed to show that any negligence on defendants’ part proximately caused him to recover less than he was otherwise entitled to (see Brooks v Lewin, 21 AD3d 731, 734 [2005], lv denied 6 NY3d 713 [2006]). To the extent plaintiff argues that defendants did not sufficiently emphasize his ownership in the 47BH account, the argument is unavailing, since an insufficient emphasis would be, "at most, a mere error in professional judgment not rising to the level of legal malpractice" (see Geller v Harris, 258 AD2d 421, 421 [1999]; Rubinberg v Walker, 252 AD2d 466, 467 [1998]).
As to his breach of contract claims, plaintiff failed to present evidence establishing the term of his alleged oral agreement with defendant Martin Kaplan whereby Kaplan agreed that defendant Gusrae Kaplan & Bruno would prosecute all appeals from the underlying judgment for no more than $50,000. "
 

Client hires law firm, law firm is said to have made mistakes, law firm is said to have made corrective motions based upon its own mistakes, and then charged client. Law firm sues client, and client answers without filing a counterclaim.

Its not evident from the decision but we guess that client then hired an attorney who seeks to change an affirmative defense to a counterclaim for legal malpractice. in addition, attorney seeks to add an employee of the law firm as a "third party" defendant, and asks for a copy of the file and discovery responses. How does Judge Gische of Supreme Court, New York County decide?

In Wagner Divs, P.C. v Gargano ; 2010 NYSlipOp 30156(U) Justice Gische decides:

a. In a regular case, retaining lien trumps need for file

b. In a case with a legal malpractice counterclaim, need for file trumps law firm’s retaining lien

c. Law firm has to allow photocopying

d. Defendant must pay for the copies

e. Amendment should be, and is, freely granted here.

 

We’ve noted in the past that legal malpractice cases sometimes have a history of legal malpractice within them. As an example, Moray v Koven & Krause, Esqs. 2010 NY Slip Op 07573 ;Decided on October 26, 2010 ;Court of Appeals ;Read, J. serves well. it involves a legal malpractice case levied against a former attorney who was involved in a real estate transaction gone bad. This case fared badly too, until Judge Read delivered the unanimous decision,
 

"On December 31, 2007, plaintiff Joseph Moray commenced this action for legal malpractice, breach of contract and professional negligence against defendant Koven & Krause, Esqs. by filing a summons with notice, which identified Warren Goodman, Esq. as plaintiff’s attorney. The summons with notice was apparently served on defendant on February 5, 2008.

On February 25, 2008, defendant served Goodman with a notice of appearance [*2]and a demand for a complaint. When the demand did not prompt a response, defendant on April 22, 2008 moved to dismiss the action pursuant to CPLR 3012 (b).

By letter dated May 6, 2008, attorney Preston Leschins informed defendant’s professional liability insurance carrier that his office had been "consulted" by plaintiff "in connection with" plaintiff’s claim "with a view towards substituting for" Goodman. The letter characterized Goodman as plaintiff’s "former counsel" who was "no longer practicing law." Leschins asked for "the opportunity to speak with" the carrier about "resolution [of the matter] in an amicable fashion," and at the carrier’s "earliest convenience." Plaintiff was copied on this letter.

On May 23, 2008 — the motion’s return date — defendant’s counsel had a conversation with Goodman, "who advised that he had been suspended from the practice of law months earlier"; at Goodman’s request, defendant’s counsel agreed to adjourn the motion to dismiss until June 13, 2008. Later that day, he spoke to Leschins, "who confirmed that he had consulted with plaintiff weeks earlier," but "refused to state whether he would be appearing as attorney for plaintiff" in the lawsuit.

On or near the adjourned return date, Goodman — indicating that he was mindful that his license had been "suspended on or about January 24, 2008" and was therefore "being careful not to practice law" — submitted a "factual" affidavit in opposition to the motion to dismiss. Styling himself as plaintiff’s "former attorney," Goodman stated that he had "advised [his] former client in writing of [his] situation and told him to get new counsel"; however, he did not say when he did this. Goodman further represented that he "[understood] that [plaintiff had] been diligently pursuing new counsel," but had "not yet retained a new attorney" and was "still continuing to look for a new lawyer."

"On appeal, plaintiff was represented by counsel. His new attorney invoked CPLR 321 (c), which mandates that"[i]f an attorney dies, becomes physically or mentally incapacitated, or is removed, suspended or otherwise becomes disabled at any time before judgment, no further proceeding shall be taken in the action against the party for whom he appeared, without leave of the court, until thirty days after notice to appoint another attorney has been served upon that party either personally or in such manner as the court directs."

On May 12, 2009, the Appellate Division affirmed Supreme Court’s order, concluding that the trial court "did not improvidently exercise its discretion in granting the defendant’s motion to dismiss the action" (62 AD3d 765, 765 [2d Dept 2009]). The court observed that because "plaintiff’s contention that the action was stayed pursuant to CPLR 321 (c) [was] raised for the first time on appeal," it "[was] not properly before [the Appellate Division]." We subsequently granted plaintiff permission to appeal, and now reverse.

The command of CPLR 321 (c) is straightforward: if an attorney becomes disabled, "no further proceeding shall be taken in the action against the party for whom he appeared, without leave of the court, until thirty days after notice to appoint another attorney has been served upon that party either personally or in such manner as the court directs" (emphasis added). As the Practice Commentaries explain, CPLR 321 (c) brings about "an automatic stay of the action," which "goes into effect with respect to the party for whom the [disabled] attorney appeared" (Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR [*4]C321:3, at 183)[FN2]. As a result,

"[d]uring the stay imposed by CPLR 321 (c), no proceedings against the party will have any adverse effect. It lies within the power of the other side to bring the stay to an end by serving a notice on the affected party to appoint new counsel within 30 days . . . If, at the end of the period, the party has failed to obtain new counsel (or elected to proceed pro se), the proceedings may continue against the party" (id.).

The stay is meant to "afford a litigant, who has, through no act or fault of his own, been deprived of the services of his counsel, a reasonable opportunity to obtain new counsel before further proceedings are taken against him in the action" (Hendry v Hilton, 283 App Div 168, 171 [2d Dept 1953] [discussing Civil Practice Act § 240, the predecessor statute to CPLR 321 (c)]).
This lawsuit was automatically stayed by operation of CPLR 321 (c) on January 24, 2008, the date when plaintiff’s attorney was suspended from the practice of law. Defendant never acted to lift the stay by serving a notice upon plaintiff to appoint new counsel within 30 days. Thus, Supreme Court’s order dismissing the action must be vacated (see e.g. Galletta v Siu-Mei Yip, 271 AD2d 486, 486 [2d Dept 2000] ["Since the judgment entered upon the defendants’ default in appearing at trial was obtained without the plaintiff’s compliance with CPLR 321 (c), it must be vacated"]; McGregor v McGregor, 212 AD2d 955, 956 [3d Dept 1995] ["The record reveals no compliance with the leave or notice requirements of CPLR 321 (c). The appropriate remedy for a violation of CPLR 321 (c) is vacatur of the judgment"]). "