We believe in several tropes about legal malpractice.  One is that we live in a legal centric country, and accordingly, legal malpractice is ubiquitous as well as omnipresent.  The second is that legal malpractice cases are treated differently because they are laws written by lawyers, concerning lawyers, and decided upon by lawyers.

We think that Garnett v Fox, Horan & Camerini, LLP ; 2011 NY Slip Op 01589 ; Decided on March 3, 2011 ; Appellate Division, First Department is just such a case.  It seems to us that only in legal malpractice is such strong scrutiny applied to the underlying premises of the case.  In a car case we do not see the court determining who was in the wrong at an intersection, in a products case we do not see the court determining whether the washing machine was dangerous.  Yet here we see Supreme Court determining (we believe from the decision) that the attorneys gave good advice and that they cannot under any circumstances be responsible for Boylan’s eventual bankruptcy,
 

The Appellate Division thought differently.  "The amended complaint alleges that defendant was negligent in failing to advise Boylan International properly, that defendant’s negligence caused Boylan’s loss, and that Boylan sustained actual damages (see Reibman v Senie, 302 AD2d 290 [2003]). Specifically, it alleges, inter alia, that defendant failed to mount a defense to Boylan’s tax assessment arrears based on Blackstar Publ. Co. v 460 Park Assoc. (137 Misc 2d 414 [1987] [escalation clauses should not be applied where the tax increase is caused by extensive renovation that does not inure to the tenant’s benefit]), negotiated a settlement less beneficial than simply paying the demanded amount, and coerced Boylan into executing the settlement although it knew of the dire consequences thereof. "A claim for legal malpractice is viable, despite settlement of the underlying action, if it is alleged that the settlement of the action was effectively compelled by the mistakes of counsel" (Bernstein v Oppenheim & Co., P.C., 160 AD2d 428, 430 [1990] [citation omitted]). The amended complaint further alleges that, but for defendant’s negligence, Boylan would not have had to declare bankruptcy and incur additional attorney’s fees. These allegations are sufficient to withstand a CPLR 3211(a)(7) motion. At this stage, plaintiff does not have to show a "likelihood of success," as the motion court found, but is required only to plead facts from which it could reasonably be inferred that defendant’s negligence caused [*2]Boylan’s loss (see InKine Pharm. Co. v Coleman, 305 AD2d 151 [2003]). Plaintiff also does not have to show that Boylan actually sustained damages but is required only to allege facts from which actual damages could reasonably be inferred (see id.). "

When we see a business start up and close rapidly, we often wonder how could this happen.  When we see a shuttered restaurant we wonder how one entrepreneur’s dream could go so wrong.  Here, in Wo Yee Hing Realty Corp. v. Stern, Supreme Court, New York County, Justice Debra James we guess at three things:

a.  This real estate transaction was for millions of dollars;

b.  The sellers had absolutely no idea how to go about selling and buying a like-kind building, and lost $ 4 million dollars in unnecessary tax;

c.  Hired a solo practitioner, who (we guess) had no legal malpractice insurance, did so without a retainer agreement, and did so without any written communications between them.

Result? 

"This is an action seeking damages for alleged legal malpractice with respect to the sale of property, in which plaintiffs claim that they were unable to take advantage of the Internal Revenue Code (IRC) § 1031 like-kind exchange tax deferral because of defendant’s actions. The corporate plaintiff is the owner of the subject property, and the individual plaintiffs are principals of the corporate plaintiff . Defendant is an attorney who alleges that, in 2006, plaintiff Chun Wo Yung (Chun Wo) approached him regarding the Check One: sale of a building that Chun Wo and his  family had owned since  1979. In November, 2006, Chun Wo called defendant to let him
know that he was ready to have a contract drafted regarding the sale of the building, and Chun Wo faxed defendant a letter that Chun Wo had received from a real estate broker who was representing the purchaser. "

"Defendant maintains that throughout the entire process, he constantly informed plaintiffs that he had no experience with 1031 like-kind exchanges, and that they always told him that they would take care of it.

In his EBT, Chun Wo stated, in contrast to defendant’s testimony, that he was unfamiliar with how a 1031 like-kind exchange worked, and that he had never heard of a qualified intermediary. In his affidavit, Chun Wo avers that the corporate plaintiff paid approximately $3,400,000 in federal taxes and approximately $1,700,000 in local taxes.

Legal malpractice is ubiquitous, and yet, prone to many hurdles.  Here, in  HOURANEY,  -against- BURTON & ASSOCIATES, P.C. and BERNARD BURTON,08-CV-2688 (CBA)(LB);   UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK; 2011 U.S. Dist. LEXIS 17046; February 21, 2011, Decided we see the plaintiff pro-se lose on summary judgment for lack of standing, and lack of proofs. 
 

Standing is lacking, because plaintiff retained defendants as a LLC.  Now the LLC is dissolved.  Typically, we guess, it is because the member no longer wants to or has paid state taxes for a LLC which is not doing business.  However, we don’t know why.  From the decision:

"Houraney first objects [*3] to the Magistrate Judge’s determination that he did not have standing to plead a cause of action alleging malpractice against NE Holding. Houraney argues that his right to self-representation is guaranteed; however, Houraney appears to misapprehend the finding of the R&R. Although it is true that Houraney, who is not admitted to practice law, could not represent NE Holdings on his own, see Lattanzio v. COMTA, 481 F.3d 137, 139-40 (2d Cir. 2007) (per curiam), the Magistrate Judge did not hold that Houraney had no right to representation. Instead, the Magistrate Judge held that Houraney had no standing to pursue a claim alleging wrongs to the corporation.

Limited Liability Companies (LLCs) are distinct legal entities. If the defendants committed malpractice against NE Holdings, that is a wrong committed against the LLC, not to Houraney himself. Thus, "[u]nder New York law, ‘an individual shareholder has no right to bring an action in his own name and in his own behalf for a wrong committed against the corporation, even though the particular wrong may have resulted in a deprecation or destruction of the value of his corporate stock.’" Solutia Inc. v. FMC Corp., 385 F. Supp. 2d 324, 331 (S.D.N.Y. 2005) [*4] (citing Fifty States Mgmt. Corp. v. Niagara Permanent Sav. & Loan Assoc., 58 A.D.2d 177, 179, 396 N.Y.S.2d 925, 927 (4th Dep’t 1977)). The rule is applied with equal force to Limited Liability Companies (LLCs), like NE Holdings. Solutia, 385 F. Supp. 2d at 331 n.1.

Houraney argues that he has standing because the company has dissolved, citing New York Limited Liability Company Law § 703(b). That provision reads: "[u]pon dissolution of a limited liability company, the persons winding up the limited liability company’s affairs may, in the name of and for and on behalf of the limited liability company, prosecute and defend suits, whether civil, criminal or administrative . . . ." However, Houraney is not prosecuting this action in the company’s name, but in his individual capacity. The Magistrate Judge was correct, therefore, in determining that Houraney does not have standing in his individual capacity to pursue a cause of action alleging malpractice against NE Holding.

Houraney next objects to the Magistrate Judge’s finding that plaintiff failed to allege facts to demonstrate how defendants’ alleged conduct caused the plaintiff harm. As the Magistrate Judge explained, to succeed on a [*5] legal malpractice claim under New York law, a plaintiff must "plead specific factual allegations establishing that but for counsel’s deficient representation, there would have been a more favorable outcome to the underlying matter." Dweck Law Firm LLP v. Mann, 283 A.D.2d 292, 293, 727 N.Y.S.2d 58 (1st Dep’t 2001).

The Magistrate Judge found that Houraney had failed to adequately plead causation. Houraney does not object to that determination, which is itself dispositive of Houraney’s claim. Instead, Houraney argues that the defendants breached various cannons of legal ethics. Alleging an ethical violation, however, does not relieve plaintiff of the requirement of proving causation. Schwartz v. Olshan Grundman Frome & Rosenzweig, 302 A.D.2d 193, 199, 753 N.Y.S.2d 482 (4th Dep’t 2003) ("The violation of a disciplinary rule does not, without more, generate a cause of action."); see also The William Kaufman Organization Ltd. V. Graham & James LLP, 269 A.D.2d 171, 173, 703 N.Y.S.2d 439 (1st Dep’t 2000); Kyle v. Heiberger & Associates, P.C., 25 Misc. 3d 1218A, 901 N.Y.S.2d 907 (N.Y. Sup. Ct. 2009) (explaining in claim for legal malpractice that "[w]here, as here, plaintiffs do not sufficiently allege the elements [*6] of the claim, dismissal is properly granted-even if there were allegations of ethical violations, and negligence"). Plaintiff cites to Lipton v. Boesky, 110 Mich. App. 589, 313 N.W.2d 163 (Mich. Ct. App. 1981); however, the Court applies New York, not Michigan law in this action."

Mortgages have been with us since the middle ages.  One might not expect a legal malpractice case to arise over the filing of a garden or varietal mortgage, yet…

In U.S. Bank Natl. Assn. v Stein ; 2011 NY Slip Op 01457 ; Decided on February 22, 2011 ; Appellate Division, Second Department we see not one, but two different law firms sued for legal malpractice.  "The plaintiff, represented by Steven J. Baum, P.C., and Steven J. Baum, commenced an action against, among others, Alan C. Stein, Gastwirth, Mirsky & Stein, LLP, and Law Office of Alan C. Stein, P.C. (hereinafter collectively the Stein defendants), to recover damages for, inter alia, legal malpractice in connection with the recording of a certain mortgage. The Stein defendants, who had previously represented the plaintiff’s predecessor in interest, commenced a third-party action against Steven J. Baum, P.C., and Steven J. Baum for contribution and/or indemnification. Subsequently, the third-party defendants moved pursuant to CPLR 3211(a)(7) to dismiss the third-party complaint. The Supreme Court, among other things, denied that branch of the motion which was to dismiss the third-party complaint insofar as asserted against Steven J. Baum, P.C. We affirm the order insofar as appealed from. " "The Supreme Court properly determined that the Stein defendants stated a cause of action against the third-party defendant Steven J. Baum, P.C., by asserting, among other things, that Steven J. Baum, P.C., failed to timely correct the legal errors allegedly committed by the Stein defendants in their representation of the plaintiff’s predecessor in interest, despite having sufficient time and an opportunity to do. The third-party complaint alleged sufficient facts which, if true, would establish that Steven J. Baum, P.C., may be liable to the Stein defendants for causing or contributing to the plaintiff’s alleged damages (see Schauer v Joyce, 54 NY2d 1, 6; see also Frederick v Meighan, 75 AD3d 528, 532). "

Attorneys can easily be substituted in and out of cases, and personal injury matters are no exception.  When client goes from attorney 1 to attorney 2 to attorney 3 the outlook for the case may sometimes be good, and in this case bad.  Client was involved in a car accident, and hired attorney 1 to handle the case.  Attorney 1 did so, but apparently never looked to see who owned the car.  Owner was a rental car company, with apparent unlimited liability and assets.  Attorney 2 takes over the case and finds out at a deposition that defendant did not own the car.  Attorney 2 takes their time and does nothing.  Attorney 2 is substituted out and Attorney 3 immediately makes a motion to add the owner.  Attorney 3 does not succeed.  is there a good cause of action against attorney 2?  The statute of limitations is long over for attorney 1.  Answer ?  No.  in Snolis v Clare
2011 NY Slip Op 01455 ; Decided on February 22, 2011 ; Appellate Division, Second Department
the Court writes:

"The plaintiffs failed to demonstrate their prima facie entitlement to judgment as a matter of law because they failed to establish that any negligence on the part of the defendants in failing to move for leave to amend the complaint in the personal injury action to add the owner as a defendant, immediately upon learning of the owner’s identity, was the proximate cause of their alleged damages (see Greene v Sager, 78 AD3d 777; Erdman v Dell, 50 AD3d 627; see also Buran v Coupal, 87 NY2d 173, 180; Flederbach v Fayman, 57 AD3d 474). Accordingly, the Supreme Court properly denied the plaintiffs’ motion.

The Supreme Court improvidently exercised its discretion in denying, as untimely, that branch of the defendants’ cross motion which was for summary judgment dismissing the complaint insofar as asserted against them. While the defendants’ cross motion was made more than 120 days after the note of issue was filed and, therefore, was untimely (see Brill v City of New York, 2 NY3d 648), an untimely cross motion for summary judgment may be considered by the court where, as here, a timely motion for summary judgment was made on nearly identical grounds (see Grande v Peteroy, 39 AD3d 590, 592; Lennard v Khan, 69 AD3d 812, 814; Bressingham v Jamaica Hosp. Med. Ctr., 17 AD3d 496, 497). In such circumstances, the issues raised by the untimely cross motion are already properly before the court and, thus, the nearly identical nature of the grounds may provide the requisite good cause (see CPLR 3212[a]) to review the merits of the untimely cross motion (see Grande v Peteroy, 39 AD3d at 592). Notably, a court, in deciding the timely motion, may search the record and award summary judgment to a nonmoving party (see CPLR 3212[b]).

The defendants demonstrated their prima facie entitlement to judgment as a matter of law dismissing the legal malpractice cause of action insofar as asserted against them by demonstrating that any negligence on their part did not proximately cause the plaintiffs’ alleged damages (see Von Duerring v Hession & Bekoff, 71 AD3d 760). It is true that the more than one-year delay in moving for leave to amend the complaint in the personal injury action to add the owner as a defendant, which was attributable to the defendants’ failure to seek that relief, prejudiced the owner and, thus, was a sufficient basis for denying the motion for leave to amend the complaint in the personal injury action (see Snolis v Biondo, 21 AD3d 546). However, the defendants demonstrated that even if they had expeditiously made such a motion in April 2003, immediately upon learning of the owner’s identity, the motion could not have been granted. "
 

"Medicine is an art and not a science" is a phrase heard at every medical malpractice case, often in summation.  This is a folksy restatement of the judgment principal.  In law it’s slightly different.  An attorney may not be held responsible in legal malpractice for a choice of reasonable strategy, even when its a loser. 

in Rodriguez v Lipsig, Shapey, Manus & Moverman, P.C. ; 2011 NY Slip Op 01346 ; Decided on February 22, 2011 ; Appellate Division, First Department we see one application of the rule.  Here it was a choice of what evidence to place before the arbitrator in a Motor Vehicle arbitration.
 

"Defendant established its entitlement to judgment as a matter of law by demonstrating that the associate who represented plaintiffs in the underlying arbitration was pursuing a reasonable strategy in not submitting repair bills and photographs that depicted damage consistent with the uninsured driver’s testimony (see Noone v Stieglitz, 59 AD3d 505 [2009]; Iocovello v Weingrad & Weingrad, 4 AD3d 208 [2004]). In opposition, plaintiff failed to raise a triable issue of fact. Plaintiff’s argument that the damage depicted in the photographs would [*2]have led the arbitrator to conclude that the uninsured driver was speeding, is insufficient speculation (see Alter & Alter v Cannella, 284 AD2d 138, 139 [2001]; John P. Tilden, Ltd. v Profeta & Eisenstein, 236 AD2d 292 [1997]). "

This would be the place for a witty take-off on an American Express ad, playing off the "Don’t leave home without…"  This however, is a story of how a foreclosure case started, went to judgment, and then unraveled.  Attorneys are found to have violated professional standards, and American Express has no attorney in the fight. 

In American Express,  v. Charles Nath, Defendant, 22507/07 ;Civil Court, Richmond County
Judge Philip S. Straniere writes:

"Plaintiff, American Express, commenced this action against the defendant, Charles Nath, alleging that the defendant owed for charges incurred on his credit card. Defendant defaulted in appearing and answering and on January 24, 2008 a default judgment was entered against the defendant in favor of American Express in the amount of $11,794.01 which included interest, costs and disbursements. Plaintiff was represented by Mel Harris & Associates, LLC in this litigation.

As the defendant did not have an attorney, the case appeared on the trial calendar for self-represented individuals initially on January 26, 2010. It was adjourned to May 4, 2010, October 5, 2010 and then to February 8, 2011. On February 8, 2011, counsel for Mel Harris & Associates, LLC appeared and informed the court that they were no longer counsel for the plaintiff. As a result of that, the court on the second call of the calendar, dismissed the plaintiff’s action and issued an order vacating the default and permanently lifting any stays and restraining notices previously served on his bank accounts or garnishments served upon his employer.

A review of this file revealed several substantial problems. First, there is no record

*2

of an assignment of the judgment from American Express to LR Credit 14,LLC. If no such assignment had been made and the clerk made an error in the caption, then why was there no attempt by anyone on behalf of the plaintiff to correct the court file? Discussion with the parties at the bench leads to the conclusion that American Express is the proper plaintiff and the parties were proceeding with that as the fact. An order was subsequently issued directing the clerk to correct the paperwork in the file to eliminate LR Credit 14, LLC as the plaintiff.

Second, no matter which is the correct entity to be designated as plaintiff, Mel Harris & Associates, LLC, is listed as the attorney of record. There is nothing in the file to indicate that Mel Harris is no longer counsel. If that law firm has been relieved as attorney of record, some notice should have been given to the court and to the defendant. Although it is a common practice in the consumer debt industry to sell delinquent accounts faster than George Steinbrenner would send a rookie pitcher back to the minors after one bad outing, no such right exists for attorneys.
 

A French artist wants to buy an apartment in New York for a studio and living space. So far, this could be the start of a fairy tale in which the artist comes to NY, works hard, triumphs,  etc.  But, this real estate transaction soon turned to legal malpractice litigation.  One reason for the problems is that the artist nominated another to take care of the transaction, a second reason is that the attorney seems to have done not much work.

In Ehrenhalt v Kinder; 2011 NY Slip Op 30375(U); February 15, 2011; Supreme Court, New York County ;Judge: Martin Shulman we see how things went bad:

"At the time she signed the contract, Shapolsky tendered the contract deposit of $85,000 directly to Kinder. Paragraph 3(i) of the contract confirms the foregoing and provides for plaintiff to pay an additional $20,000 on July 20, 2008, which she did, for a total contract deposit of $1 05,000. The unit required extensive renovation and/or repairs as reflected in a work rider attached to the contract. Kinder undertook to perform such work prior to closing. To finance this work, the contract provides for the immediate release of the contract deposit to defendant Max Management LLC (“Max LLC”).’ Thereafter, pursuant to a separate oral agreement of unspecified date, Ehrenhalt paid additional funds to Kinder- and/or Max LLC in the total amount of $28,597.45 for further renovations not indicated in the contract and not included in the purchase price (the “additional work”).‘  It appears Mehl ordered a title report pertaining to the unit on or about July 11 , 2008 and received it on or about July 24, 2008 (see Exh. 8 to Motion). The title report revealed that co-defendant Maxcine Holder (“Holder”) owned the unit, rather than Kinder, and further revealed the existence of two outstanding mortgages; an outstanding judgment of foreclosure; a lien for unpaid common charges; tax liens; and a certificate of occupancy designating the unit as a doctor’s office (hereinafter collectively referred to as the “title defects” or “title issues”). The total amount of liens exceeded the balance of the purchase price due,

Understandably, the foregoing title defects delayed any possible closing."

"Turning to defendant’s conduct after he learned of the title defects, as stated in Logalbo v Plishkiii, Rubano & Baum, supra: While the issue of whether certain conduct constitutes legal malpractice
normally requires a factual determination to be made by a jury . . , , a plaintiff will be entitled to summary judgment in a case where there is no conflict at all in the evidence, the defendant’s conduct fell below any permissible standard of due care, and the plaintiff’s conduct was not really
involved (citations omitted). Here, once he learned of the title defects, Mehl alleges only that he spoke to Kinder’s closing attorney about these issues and was assured they would be resolved prior to closing. He also vaguely alleges he spoke to plaintiff numerous times about the title
defects and she repeatedly indicated her willingness to proceed to closing once title was clear. However, Mehl gives no indication when he spoke to plaintiff or what he claims to have told her, nor does he refute plaintiffs claim that the earliest correspondence documenting such discussions is dated December 2008 (Exh. 15 to Motion), months after plaintiff had already paid $1 33,597.45 to Kinder As to this claim, defendant does not meet his burden of refuting plaintiff’s entitlement to summary judgment as to liability. This court finds that defendant’s failure to advise plaintiff of the title defects immediately upon learning of same was a breach of his professional duty as a matter of law and that this negligence was a proximate cause of at least a portion of plaintiffs’ damages, the amount of which will be determined at trial."