When is a medical record discoverable, in general, and specifically, when are medical records from an "underlying injury" discoverable in a legal malpractice case?  One answer is set forth in Paliouras v Donohue ; 2011 NY Slip Op 08736 ; Decided on November 29, 2011 ; Appellate Division, Second Department.  The rule is simple…they are discoverable when the party has put their physical condition in controversy.  When it is really in controversy is much more difficult.
 

"A party or parties seeking to inspect a plaintiff’s medical records must first demonstrate that the plaintiff’s physical or mental condition is "in controversy" within the meaning of CPLR 3121(a), and it is only after such an evidentiary showing that discovery may proceed under the statute (see Dillenbeck v Hess, 73 NY2d 278, 287; Koump v Smith, 25 NY2d 287, 294; Neferis v DeStefano, 265 AD2d 464). Even where this preliminary burden has been satisfied, discovery may still be precluded where the information requested is privileged and, thus, exempted from disclosure pursuant to CPLR 3101(b) (see Dillenbeck v Hess, 73 NY2d at 287; Lombardi v Hall, 5 AD3d 739, 740; Navedo v Nichols, 233 AD2d 378, 379). Once the privilege is validly asserted, it must be recognized and the information sought may not be disclosed unless it is demonstrated that the privilege has been waived (see CPLR 3101[b], 4504[a]; Dillenbeck v Hess, 73 NY2d at 287; Koump v Smith, 25 NY2d at 294).

Here, the defendants failed to sustain their initial burden of demonstrating that the plaintiff’s physical or mental condition is "in controversy" in this action (see Koump v Smith, 25 NY2d at 297; McConnell v Santana, 30 AD3d 481, 482; Lombardi v Hall, 5 AD3d at 740; Navedo v Nichols, 233 AD2d at 379). Furthermore, the plaintiff validly asserted the physician-patient privilege since he did not affirmatively place his physical or mental condition in issue in this action [*2](see Koump v Smith, 25 NY2d at 297; McConnell v Santana, 30 AD3d at 482; Lombardi v Hall, 5 AD3d at 740; Navedo v Nichols, 233 AD2d at 379). "

The first thing that should be said is that this is not a legal malpractice case; it is, however, a breach of fiduciary duty case.  A agrees with Plaintiff that plaintiff will lend her name to two real estate transactions to purchase one family homes, and A will rent them out, collect rent, and pay the mortgages.  All proceeds, except A does not pay the mortgages, which are in P’s name. The inevitable then happens.  Are the two attorneys involved in the closings liable to P?

In Malysz v Adlerstein ;2011 NY Slip Op 52111(U) ; Decided on November 14, 2011 ; Supreme Court, Nassau County ; Marber, J.  they are not.  "Accordingly, the Plaintiff is required to establish that the Attorney Defendants herein failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the Attorney Defendants’ breach of this duty proximately caused the Plaintiff to sustain actual and ascertainable damages (Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]; Bilin v. Segal, Goodman & Goodman, LLP, 81 AD3d 680 [2d Dept. 2011]). "This requires a showing that [*5]but for the [Attorney Defendants’] negligence … [the plaintiff] would have prevailed in the underlying action" (Walker v. Glotzer, 79 AD3d 737 [2d Dept. 2010]). A failure in any one element results in a dismissal of the claim (Albanese v. Hametz, 4 AD3d 379, 381 [2d Dept. 2004]). Furthermore, unless the ordinary experience of the finder of fact provides a sufficient basis for judging the adequacy of the professional service, or the attorney’s conduct falls below any standard of due care, expert testimony is also necessary to establish that the attorney breached a standard of professional care and skill (Demetriou v. Connexion I Real Estate Servs., Inc., 24 Misc 3d 127[A], [App. Term, 2nd, 11th & 13th Jud. Dists. 2009]).

In addition, in asserting a claim for a breach of a fiduciary duty, a plaintiff is obligated to set forth "the circumstances constituting the wrong…in detail" (CPLR § 3016 [b]; Daly v. Kochanowicz, 67 AD3d 78 [2d Dept. 2009]).

Initially, it is noted that inasmuch as the Plaintiff has admitted that the Attorney Defendants’ sole role in the transaction was to act as her closing attorney and to assist her in acquiring title to both properties, this Court finds that this transaction was a garden variety real estate transaction that does not require the Attorney Defendants on the instant motions to furnish expert affidavits to establish that they did not breach any standard of professional care (Darby & Darby v. VSI Intl., 95 NY2d 308, 312 [2000]).

Furthermore, the evidence indicates that the Attorney Defendants did not proximately cause the Plaintiff to suffer any damages. The Plaintiff entered into the transaction knowing that she could not afford the mortgages and that she was not going to make the mortgage payments. While this Court is not convinced that the Attorney Defendants were not aware of the relationship between Adlerstein and the Plaintiff (because Adlerstein was the one who retained the Attorney Defendants on the Plaintiff’s behalf in the first place), the evidence nonetheless confirms that the Plaintiff did not discuss with the Attorney Defendants the side agreement that she had with Adlerstein. Moreover, even assuming that the Attorney Defendants knew or should have known of the relationship between Adlerstein and the Plaintiff, there is no evidence on this record that the Attorney Defendants were aware (or should have been aware) that the Plaintiff was fraudulently executing the mortgage documents.

While both Attorney Defendants acted as the Plaintiff’s counsel at their respective closings which necessarily created a fiduciary relationship, as stated above, there is no evidence that either attorney breached that duty in connection with the respective transactions, and furthermore, that said breach was the "but for" cause of any damages. In light of the foregoing, this Court finds that the Defendants have established their prima facie entitlement to judgment as a matter of law. "

In a word, no, and the law firm who gave an opinion letter is not responsible.  In Fortress Credit Corp. v Dechert LLP   2011 NY Slip Op 08626; Decided on November 29, 2011 ;
Appellate Division, First Department  we see Dechert LLP obtain a reversal of Supreme Court’s decision and dismissal.  Here are the facts of more fallout from Marc Dreier:
 

"In 2005, Marc Dreier, who was then an attorney, proposed to plaintiffs that they participate in a short-term note program to finance the purchase of foreign real estate assets. The designated borrower would be Dreier’s clients, Solow Realty & Development Company, LLC, and affiliated companies controlled by real estate developer Sheldon Solow (collectively Solow Realty), and Dreier would be the guarantor. The parties executed two loans totaling $60 million in 2006, and, in 2008, Dreier proposed another $50 million loan transaction. For this last loan transaction, plaintiffs required Solow Realty and Dreier to retain independent counsel to issue a legal opinion as to whether Solow Realty and Dreier had carried out the necessary formalities to render the loan documents valid and binding on them. Ostensibly, Solow Realty and Dreier retained defendant for this purpose. Dreier furnished the necessary documents and information to defendant for the preparation of the opinion. All the documents to which Solow Realty was a signatory appeared to have been signed by Solow Realty, and some bore "what appeared to be" the signatures of Sheldon Solow and Solow Realty’s CEO.

Plaintiffs contend that they relied on defendant’s legal opinion that the loan documents were duly executed and delivered and that the loan was a valid and binding obligation on Solow Realty and Dreier. Plaintiffs wired $50 million to an attorney trust account set up at Dreier’s firm. Several months later, Dreier was arrested in connection with another fraud scheme, and plaintiffs discovered that Solow Realty had no knowledge of and was never a party to the loan transactions and that Dreier had falsified the documents and forged the Solow Realty signatures.

Although there is no contractual privity between the parties, the complaint sufficiently alleges a relationship of "near privity" for the purpose of stating a cause of action for negligent misrepresentation or negligence (see Prudential Ins. Co. of Am. v Dewey, Ballantine, Bushby, Palmer & Wood, 80 NY2d 377, 384-385 [1992]). Plaintiffs allege that the particular purpose of the opinion letter was to aid them in deciding whether to enter into the loan transaction, that defendant was aware that they were relying on the opinion in making that decision, and that defendant evinced its understanding of that reliance by addressing the legal opinion to them. However, the complaint fails to allege (a) that plaintiffs informed defendant that its obligations were not limited solely to a review of relevant and specified documents or (b) that plaintiffs informed defendant that it was to investigate, verify and report on the legitimacy of the transaction. Absent such factual allegations, plaintiffs cannot establish that defendant breached a duty of care. As Dreier was Solow Realty’s attorney and the guarantor of the loan, defendant had no reason to suspect that Solow Realty was not in fact a party to the loan transaction or that Dreier forged the signatures of its principal and CEO. We note that plaintiffs had previously made two large loans to Dreier, while represented by international firms that specialized in financial transactions. Prior to Dreier’s arrest, plaintiffs never suspected fraud.

This case was brought against the estate of an attorney, and claims legal malpractice.  One sometimes wonders how the family of a deceased attorney picks up the pieces of the practice, turns what assets remain (especially cases in situ) into something of value, hands the cases off to other attorneys, and closes out that portion of their lives.

Here, the estate is sued for claimed mistakes in the handling of a security agreement, and the loss of a significant amount of money.  In Americana Capital Corp. v Nardella ; 2011 NY Slip Op 33002(U); November 9, 2011 ; Supreme Court, New York County; Docket Number: 604179/2005
Judge: Saliann Scarpulla, we see the following:

In or about November 2005, ACT commenced this action alleging that the deceased, Allan J. Goodman, ("Goodman") committed legal malpractice by negligently preparing a November 3002 Master Security Agreement and related documents. ‘There was no retainer agreement executed by Goodman and ACC’s president and sole shareholder Garald R. Paulis (“Paulis”). According to the allegations of the complaint, the Agreement was intended to secure a loan from ACC to Frank Kania ("Kania") by placing certain of‘Kania’s antiques and real property as collateral.  If Kania breached the Agreement, ACC could seize all  of his collateral property. Kania signed the Agreement and a modification to the Agreement on November IS, 2002.  Paulis signed the
Agreement on November 29, 2002.

In or about August 2003, Kania defaulted on his loans from ACC.  In November 2003, ACC  contacted attorney Howard Kantrowitz ("Kantrowitz") who  ultimately concluded (hat the Agreement would be unenforceable in Connecticut, where the collateral property was located. In or around 2005, Kantrowitz prepared a new security agreement  for Kania and ACC that was enforceable in Connecticut.  Pursuant to that agreement, the amount owed to ACC was reduced from 1.75 million to 1.3 million dollars.  Kania’s collateral was collected and sold, however, according to ACC, the assets only brought in a fraction of the amount loaned to and owed by Kania.

 A legal malpractice claim accrues when all of the facts necessary to the claim have occurred  and an injured party can obtain relief in court.  McCoy v. Feinman, 99 N.Y.2d 295, 301
(2002). Here, the Agreement, which is the subject of the legal malpractice action, was
fully executed when signed by Paulis on November 29, 2002. As such, ACC’s claim could only accrue as of that date, when the Agreement became practicable. Thus, because the summons with notice was filed on November 23, 2005, the legal malpractice claim is not time barred..
 

Further, this action is not barred by the Dead Man’s Statute. Pursuant to CPLR 4519 the Dead Man’s Statute docs not, by its terms, prohibit the introduction or documentary evidence against a deceased estate. Rather, an adverse party’s introduction of a document authored by a deceased "does riot violate the Dead Man’s Statute, as long as the document is authenticated by a source other than an interested witnesses’ testimony concerning a transaction with the deceased.

Sometimes a legal malpractice complaint is difficult to understand and sometimes it is plain as day. This case seems to be an example of the plain variety. Gioeli v Vlachos ;2011 NY Slip Op 08559 Decided on November 22, 2011  Appellate Division, Second Department .
 

‘Here, the plaintiff alleges that the defendants committed legal malpractice in their representation of the plaintiff in an underlying claim against the State of New York for unjust conviction and imprisonment pursuant to Court of Claims Act § 8-b. As pertinent to this appeal, "to present [a] claim for unjust conviction and imprisonment, claimant must establish by documentary evidence" his conviction of one or more felonies, that he was sentenced to a term of imprisonment, that he served "any part" of the sentence imposed, that the judgment of conviction was reversed and the indictment dismissed upon certain enumerated grounds, and that the claim was timely filed (Court of Claims Act § 8-b[3] [emphasis added]). It is undisputed that the defendants failed to submit such "documentary evidence" when they filed the underlying claim in the Court of Claims and that the underlying claim was dismissed based on that pleading defect (Reed v State of New York, [*2]78 NY2d 1, 7; Gioeli v State of New York, 39 AD3d 815; Piccarreto v State of New York, 144 AD2d 920, 921; Heiss v State of New York, 143 AD2d 67, 69; Ivey v State of New York, 138 AD2d 963; Stewart v State of New York, 133 AD2d 112, 113; Lanza v State of New York, 130 AD2d 872, 873). Accordingly, contrary to the defendants’ contention, the complaint adequately pleaded the element regarding the defendants’ failure to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession (see Leder v Spiegel, 9 NY3d at 837). "

This was a divorce case, and the couple had a business.  What was the business worth? How was it to be split?  Was there an appraisal?  Strumwasser v Zeiderman ; 2011 NY Slip Op 32971(U); October 18, 2011; Supreme Court, New York County; Docket Number: 113524/10
Judge: Joan A. Madden is a case in which husband settles, and then sues wife’s attorney for deceit.The deceit?  Offering a business plan with a missing page in order to set the value of the business. Was this deceit under Judiciary Law 487?  It turns out that the Court thought it was not.

"Plaintiff maintains that it was deceitful for the law firm to represent that the financial projections w e r e anything other  than informational, and bases the allegation of deceit on this representation.
The law firm contends that it was arguing, on behalf of Wife, that the issue of the value of the jointly-held stock in Snow Beverages was an issue for consideration in the distribution of marital assets. The law firm maintains that its presentation of the business plan was to oppose plaintiff’s motion to be relieved of the cost of the court-appointed appraisal, and that the presentation of the business plan was to provide evidence to the court that plaintiff had ascribed a value to Snow Beverages’ stock. According to the law firm, it is irrelevant whether the business plan was designed for informational or investment purposes; its import was to demonstrate plaintiff’s own concept of the value of the stock.

In the complaint, plaintiff also alleges that it was deceitful for the law firm to represent that Snow Beverages was profitable since, at the time of the divorce proceedings, it was losing money. Complaint, 17 59-63. In support of its instant motion, the law firm has attached a copy of the Snow Beverages’ website of December 15, 2010, that indicates that the company was still operating as of that date. Motion, Ex. C."

"Plaintiff argues that he may maintain an action against an adversary’s expert if the expert is involved in a larger fraudulent scheme, such as he has alleged in his complaint. Further, plaintiff contends that justifiable reliance is a question for a jury and cannot be dismissed by dispositive
motion. In reply, the EisnerAmper defendants assert that the exception to suing an adversary’s expert as being part of a larger fraudulent scheme is inapplicable to the case at bar, since plaintiff had every opportunity to refute the Blauatein report and the report was prepared only for a determination of equitable distribution in a divorce proceeding. defendants say that plaintiff has not alleged a fraud for any larger purpose. Moreover, the EisnerAmper defendants point out that the settlement was overseen and approved by the matrimonial The EisnerAmper court, and plaintiff was fully represented in those proceedings. It is noted that plaintiff has not responded to the
EisnerAmper defendants‘ argument that a cause of action cannot be maintained as against EisnerAmper LLC under the doctrine of respondeat superior. that EisnerAmper LLC negligently supervised Blaustein and McLaughlin."

" A clear reading of the complaint indicates that plaintiff never believed the valuation and never relied upon it. the complaint alleges that plaintiff relied upon the Instead, representation of his own counsel that challenging the valuation would be expensive, and his counsel’s advice to settle.
Furthermore, the alleged misrepresentation was not made to plaintiff, according to the complaint, but was made to the court, which never relied upon it because the parties settled. In addition, plaintiff signed the stipulation of settlement in which he affirmatively stated that he was not fraudulently induced to enter into the agreement. Therefore, by his own admission, no
fraud was perpetrated on him."

"Since plaintiff has failed articulate or allege a chronic or extreme pattern of behavior on the part of the law firm , plaintiff’s causes of action asserted as against Zeiderman and J&C for violation of the Judiciary Law are dismissed."

in Frederick v Meighan ;2010 NY Slip Op 06076 ;Appellate Division, Second Department we see the effect of Attorney 2 failing to clean up Attorney 1’s mistakes. In addition we see an instance of what we believe to be a systemic aversion to legal malpractice cases. Here, for example, Supreme Court sua sponte grants dismissal to Attorney 1 in this legal malpractice case; the Appellate Division not only reinstates the case, it grants summary judgment to plaintiff. But, on to the substance.
 

"At the outset, we find that the Supreme Court improvidently exercised its discretion in, sua sponte, directing dismissal of the complaint insofar as asserted against the Meighan defendants pursuant to CPLR 3211(a)(4) in view of the continued pendency of the first legal malpractice action against those defendants, which relief was not requested by any party in this action (see Clair v Fitzgerald, 63 AD3d 979, 980; Frankel v Stavsky, 40 AD3d 918, 919).

"We further find that the Supreme Court should have granted that branch of the plaintiff’s motion which was for summary judgment on the issue of liability against the Meighan defendants. In order to prevail in an action to recover damages for legal malpractice, a plaintiff must establish that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442). Here, in opposition to the plaintiff’s prima facie showing of entitlement to judgment as a matter of law, the Meighan defendants failed to demonstrate the existence of any triable issues of fact with respect to their liability for legal malpractice (see Alvarez v Prospect Hosp., 68 NY2d 320, 324; Northrop v Thorsen, 46 AD3d 780, 784; Jampolskaya v Victor Gomelsky, P.C., 36 AD3d 761, 762). Contrary to the Meighan defendants’ contention, inasmuch as the plaintiff did not sustain "actionable injury" until this Court awarded the buyers specific performance in the underlying action, the plaintiff’s legal malpractice cause of action against them was not time-barred (McCoy v Feinman, 99 NY2d 295, 301; see Kerbein v Hutchison, 30 AD3d 730, 732). Also contrary to the Meighan defendants’ contention, their malpractice was a proximate cause of the injury in this case. If the DeCaro defendants are found to have also committed malpractice, the Meighan defendants and the DeCaro defendants may both be liable as successive tortfeasors who each contributed to the same injury (see Schauer v Joyce, 54 NY2d 1, 6; Soussis v Lazer, Aptheker, Rosella & Yedid, P.C., 66 AD3d 993, 994-995; Khlevner v Tylo, 16 Misc 3d 1129[A]).

The Supreme Court should have denied those branches of the DeCaro defendants’ cross motion which were for summary judgment dismissing so much of the complaint as alleged that they committed legal malpractice by failing to interpose a claim in the underlying action for rescission of the construction agreement based on mistake, by failing to interpose an affirmative defense in the underlying action of rescission based on mistake, and by arguing on appeal in the underlying action that the plaintiff instructed the Meighan defendants to send the construction agreement to the attorneys for the other parties to that agreement, which argument was contrary to the plaintiff’s testimony at the underlying trial. While the DeCaro defendants contend that a rescission defense based on unilateral mistake would not have been successful in the underlying action for specific performance, specific performance may be denied based on unilateral mistake [*4]where the other party must have been aware of the mistake (see Da Silva v Musso, 53 NY2d 543, 548; Sheridan Drive-In v State of New York, 16 AD2d 400, 405; Harper, Inc. v City of Newburgh, 159 App Div 695, 696-697). However, the Supreme Court should have granted that branch of the DeCaro defendants’ cross motion which was for summary judgment dismissing so much of the complaint as alleged that they committed legal malpractice by failing to advise the plaintiff of a potential legal malpractice claim against the Meighan defendants. As discussed above, the plaintiff lacked a viable legal malpractice claim against the Meighan defendants until this Court awarded the buyers specific performance."
 

We wrote about the Pryor Cashman legal malpractice case last week. Here is the NY Law Journal’s take on it:

"A legal malpractice lawsuit filed by the trustees to a union’s benefit funds against Pryor Cashman for failing to provide advice that would have prevented the funds’ third-party administrator from embezzling $42 million may go forward, a unanimous Appellate Division, First Department, panel ruled Thursday.

The trustees for the three Construction Workers Local 147 filed the lawsuit, Fitzsimmons v. Pryor Cashman, 651360/10, last year (NYLJ, Aug. 30, 2010). It followed the December 2009 arrest of Melissa G. King on federal charges of embezzling millions from the funds as the principal behind administrator King Care LLC.

Pryor Cashman had advised the trustees and benefit funds for more than a decade. The trustees claim the law firm should have realized administrative expenses for the funds were "unusually high" and encouraged the trustees to ask why, the complaint said. Pryor Cashman also should have recommended hiring an independent auditor, the complaint said.

Pryor Cashman moved to dismiss, arguing that the trustees had not brought specific allegations of the firm failing to fulfill its duties. Manhattan Supreme Court Justice Barbara R. Kapnick (See Profile) denied the motion in March, and the First Department affirmed. "Plaintiff put forth sufficient detail to establish the negligence of the attorneys, that the negligence was the proximate cause of the losses sustained by the benefits funds, and actual damages to those funds," the panel said. "Plaintiffs were not required to allege the specific scope of defendants’ duties, given the absence of a governing retainer agreement."