Trusts and estates law and legal malpractice cases often intertwine.  A unique and singular thread runs through them.  Death is almost always a part of the equation, and often, there is a question of whether the attorney represented decedent or beneficiary.  Beyond the simple question of death, there is almost always a long gestation period between the act [creating a trust, writing a will, suggesting a certain estate vehicle] and the damage. 

Here, in  DROZ, v. KARL, III, ESQ.; PARAVATI, KARL, GREEN & DeBELLA; PATRICK J. HART, CPA; and MOORE & HART, CPA, 6:09-CV-920;UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK; 2010 U.S. Dist. LEXIS 93326;September 8, 2010, Decided plaintiff loses on each of the two horns.
 

"In order to sustain a legal malpractice claim, a plaintiff must show: (1) the existence of an attorney-client relationship, (2) negligence, (3) which is the proximate cause of a loss, and (4) actual damages. See Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006) (citing Prudential Ins. Co. v. Dewey, Ballantine, Bushby, Palmer & Wood, 170 A.D.2d 108, 114, 573 N.Y.S.2d 981 (N.Y. App. Div. 1st Dep’t 1991), aff’d, 80 N.Y.2d 377, 605 N.E.2d 318, 590 N.Y.S.2d 831 (1992)); see also Moran v. Hurst, 32 A.D.3d 909, 910, 822 N.Y.S.2d 564 (N.Y. App. Div. 2d Dep’t 2006) ("To recover damages for legal malpractice, a plaintiff must prove, inter alia, the existence of an attorney-client relationship."). While the payment of a fee or existence of a formal retainer agreement may be indicators of an attorney-client relationship, such factors are not dispositive. See Moran, 32 A.D.3d at 911. An attorney-client relationship may instead arise by words and actions of the parties; however, one party’s unilateral belief, standing alone, does not confer upon him or her the status of a client. Id."
 

"While the correspondence Droz has presented might otherwise raise a triable issue of fact, these assertions are insufficient in light of his own prior sworn affidavit. "[A] party may not create an issue of fact by submitting an affidavit in opposition to a summary judgment motion that, by omission or addition, contradicts the affiant’s previous deposition testimony." Hayes v. N.Y.C. Dep’t of Corr., 84 F.3d 614, 619 (2d Cir. 1996) (citing Perma Research & Dev. Co. v. Singer Co., 410 F.2d 572, 578 (2d Cir. 1969)). A party does not show a triable issue of fact merely by submitting an affidavit that disputes his own prior sworn testimony. See, e.g., Trans-Orient Marine Corp. v. Star Trading & Marine, Inc., 925 F.2d 566, 572 (2d Cir. 1991). However, a material issue of fact may be exposed by the party’s subsequent sworn testimony that adds to, or explains, but does not merely contradict, his prior testimony. See Villante v. Dep’t of Corr. of N.Y.C., 786 F.2d 516, 522 (2d Cir. 1986). [*10] Plaintiff has not presented any testimony which adds to, or explains his prior affidavit demonstrating his understanding that Karl represented Scheidelman."
 

"Under New York State law, the statute of limitations for a legal malpractice action is three years. N.Y. C.P.L.R. 214(6). Generally, the action accrues "when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court." McCoy v. Feinman, 99 N.Y.2d 295, 301, 785 N.E.2d 714, 755 N.Y.S.2d 693 (2002) (citing Ackerman v. Price Waterhouse, 84 N.Y.2d 535, 541, 644 N.E.2d 1009, 620 N.Y.S.2d 318 (1994)). In most cases, the accrual date is the day an actionable injury occurs, even if the aggrieved party is ignorant of the wrong or injury at that time. [*14] McCoy, 99 N.Y.2d at 301. "What is important is when the malpractice was committed, not when the client discovered it." Shumsky v. Eisenstein, 96 N.Y.2d 164, 166, 750 N.E.2d 67, 726 N.Y.S.2d 365 (2001) (citing Glamm v. Allen, 57 N.Y.2d 87, 95, 439 N.E.2d 390, 453 N.Y.S.2d 674 (1982))."
 

"On these facts, the three-year statute of limitations began to run on the date of the alleged malpractice in 1994, and Droz would have had until 1997 to bring an action. The continuous representation doctrine does not apply to toll the statute of limitations because the sporadic communications between plaintiff and Karl relating to the Trust, over a thirteen year period, do not rise to the level required by the continuous representation doctrine. See Droz Aff. ¶ 33. Further, the "mutual understanding" requirement articulated in McCoy has not been met. Defendants contend after the Trust’s execution in 1994, there was no mutual understanding that further representation with respect to the Trust would be required, and that neither plaintiff nor Karl appreciated that there might be any issue with the manner in which the Trust was drafted until 2007, when the Foundation began investigating the basis for its Surrogate Court’s action.

The continuous representation doctrine is inapplicable, and thus the ordinary three-year statute of limitations applies. As there are no issues [*16] of material fact as to the accrual date of the action, the plaintiff’s legal malpractice claim is also barred by the statute of limitations."

 

There are two instances in New York law where an expert might be necessary in legal malpractice litigation.  One is at the trial of the matter, and the other at a motion for summary judgment.  In general, an expert is necessary in any litigation where the "issues in this case are not part of an ordinary person’s daily experience."

In Suppiah v Kalish , 2010 NY Slip Op 06540 , Decided on September 7, 2010 , Appellate Division, First Department  defendant moved for summary judgment and plaintiff opposed the motion with the affidavit of an expert and some other affidavits.  The case was about immigration law legal malpractice. 
 

"According to plaintiff, he informed WFI that he was interested in gaining employment elsewhere. He also maintains that WFI refused to provide him with his original H1-B visa approval notice and other documents, which were in WFI’s exclusive possession and were necessary for him to prove his immigration status to prospective employers. Then, plaintiff claims, WFI retaliated against him by "benching" him, i.e., refusing to assign him any more work. Plaintiff alleges that the benching caused him to violate his visa, which required him to work to maintain his legal immigration status. WFI denies that it benched plaintiff and claims that it terminated him for legitimate business reasons. In December 2000, plaintiff resumed working for WFI. Plaintiff claims that the benching ended because he made clear his desire to continue working for WFI. WFI asserts that it simply decided to rehire plaintiff.

In May 2002, with the expiration date of his H1-B visa approaching, plaintiff asked defendant to take steps to ensure his continued legal status. Instead of petitioning for an extension of plaintiff’s existing H1-B visa, which he had done previously, defendant filed a petition for a new H1-B visa."
 

"The IAS court granted defendant’s motion and dismissed the complaint. The court did not expressly address plaintiff’s position that defendant did not establish his prima facie entitlement to summary judgment. However, it did find that plaintiff failed to raise an issue of fact regarding his claim that defendant committed malpractice.

We reverse because defendant failed to satisfy his prima facie burden of establishing entitlement to judgment as a matter of law. The issues in this case are not part of an ordinary person’s daily experience, and to prevail at trial, plaintiff will be required to establish by expert testimony that defendant failed to perform in a professionally competent manner (see Gertler v [*3]Sol Masch & Co., 40 AD3d 282 [2007]; Merlin Biomed Asset Mgt., LLC v Wolf Block Schorr & Solis-Cohen LLP, 23 AD3d 243 [2005]). As this is a motion for summary judgment, the burden rests on the moving party – here, defendant – to establish through expert opinion that he did not perform below the ordinary reasonable skill and care possessed by an average member of the legal community (see R.A.B. Contrs. v Stillman, 299 AD2d 165 [2002]; Estate of Nevelson v Carro, Spanbock, Kaster & Cuiffo, 259 AD2d 282, 284 [1999]). Also, defendant was required, on this motion, to establish through an expert’s affidavit that even if he did commit malpractice, his actions were not the proximate cause of plaintiff’s loss (see Tran Han Ho v Brackley, 69 AD3d 533 [2010]). By failing to submit the affidavit of an expert, defendant never shifted the burden to plaintiff. "

 

 

Legal malpractice cases are unlike anything else…they all have a prior case background, and each must contain proofs of the "but for" variety.  Put another way, law of the case is almost always a consideration in legal malpractice cases.  Could plaintiff have won the underlying case?  Does dismissal of the underlying case fatally flaw a subsequent legal malpractice case?  How does the handling of the underlying case affect the subsequent legal malpractice case are all different formulations of the same question.

Justice York, of Supreme Court, New York County recently wrote on this issue in Metropolitan Plaza WP LLC v. Goetz Fitzpatrick, LLP., 2010 NY Slip OP 32389(U).  There, certain findings of the US Bankruptcy Court seem central to the legal malpractice case.  Defendants claim that the entire complaint should be dismissed pursuant to the doctrine of law of the case because "all of plaintiff’s causes of action are predicated on the erroneous assertion that the findings in the bankruptcy decision also constitute the law of the case in this action…" 

Plaintiffs responded that they "do not rely upon" the bankruptcy decision, "nor claim reliance upon it, nor is it argued that this is the law of the case." 

The Court finds "that the most reasonable interpretation to be accorded to this complaint is to conclude that plaintiffs rely heavily upon the persuasive effect of the bankruptcy decision, but not to the extent of asserting that it constitutes the law of the case in this action.  Simply put, the complaint does not say what defendants say It does.  Therefore, the court rejects defendant’s first dismissal argument."

In Ramirez v. 164  West 146 Street LLC, the question is raised whether a tenant, illegally evicted because the warrant of eviction named a former landlord and not the current landlord may successfully sue the landlords’ attorney.  The answer is, no.  Justice York of Supreme Court, New York County sets forth the reasoning.

Plaintiff here sued all parties with the same causes of action.  In doing so, she sued the attorneys for "procuring the eviction" and "illegal lockout".  These causes of action, which might well be successful against the landlord [and which permit treble damages] may not be raised against attorneys.  Her claims against the attorneys may sound only in legal malpractice.

Here, the question of privity is raised, and it is dispositive against plaintiff.  Absent fraud or collusion, or a malicious or tortious act, a non-client may not sue her opponent’s attorney for legal malpractice.

The City Marshall, in the same position, finds himself in the same boat regarding his cross-claim.  No privity, no case.

It’s not often that one sees an insurer v. defense attorney legal malpractice case, but this one seems to have very big damages.  Law firm Barry, McTiernan & Moore, a well known defense firm in New York defended a synagogue fire case that was valued in excess of $ 16 million.  The insurer alleges malpractice in AMERICAN MANUFACTURERS MUTUAL INSURANCE COMPANY and LUMBERMENS MUTUAL CASUALTY COMPANY,  – against –BARRY, MCTIERNAN & MOORE, ;09 Civ. 8742;UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2010 U.S. Dist. LEXIS 89553;August 26, 2010, Decided
 

It’s still early going, but plaintiffs successfully added individual defendant attorneys to the caption.

we’ll follow this case as it proceeds.

The relationship between a motion to dismiss [CPLR 3211]. a request to amend the pleadings, and dismissal on the merits is wrought with both emotion yet is based upon logic.  No author of pleadings appreciates a motion to dismiss.  The motion generally brays that there is "no merit", the pleading is "frivolous", is badly written, etc.

Yet, the rule of logic generally prevails.  A pleading in legal malpractice  must adequately plead that the defendants "failed to exercise that degree of care, still, and diligence commonly possessed by a member of the legal community," and that their negligence was "a proximate cause of damages" (DeNatale v Santagelo, 65 AD3d 1006, 1007), and,is sufficient to state a cause of action to recover damages for legal malpractice.

"[M]otions for leave to amend pleadings should be freely granted, absent prejudice or surprise directly resulting from the delay in seeking leave, unless the proposed amendment is palpably insufficient or patently devoid of merit" (Aurora Loan Servs., LLC v Thomas, 70 AD3d 986, 987; see CPLR 3025[b]; Tyson v Tower Ins. Co. of N.Y., 68 AD3d 977, 979; Peerless Ins. Co. v Micro Fibertek, Inc., 67 AD3d 978, 979-980).

And so it went in Feldman v Finkelstein & Partners, LLP ,2010 NY Slip Op 06517 ,Decided on August 31, 2010 , Appellate Division, Second Department , a legal malpractice case.  "Contrary to the defendants’ contention, there is no indication that the Supreme Court considered evidentiary submissions and, thus, the issue to be determined at this stage is not whether the plaintiffs have a cause of action, but only whether they have stated one (see Guggenheimer v Ginzburg, 43 NY2d 268, 275; Sokol v Leader, 74 AD3d at 1181-1182). Accordingly, the Supreme Court improperly granted that branch of the defendants’ motion which was to dismiss the first cause of action. "
 

TJS of N.Y. Inc. v. Koppelman, 2010 NY Slip Op 32329(U), by Justice Denise F. Molia of Supreme Court, Suffolk County is something of a cliff-hanger.  When we read it, there was no foreshadowing, no pre-tensioning nor any insight into how the decision would come out.  it’s a classic didhedoit.

Plaintiff claims a longstanding relationship with attorney defendant.  The two of them and others seem to have been in and out of business in the vending and bar areas.  In this case, plaintiff eventually bought a bar, and assumed what he thought was going to be debts of $ 40,000 or so.  it turned into $1 million.  Question:  was the defendant his attorney or not?

In the end, this summary judgment decision went against defendant, and the motion was denied.  Plaintiff’s affidavit seems to be the turning point, especially when it was dotted with several troubling deposition answers by defendant and a few inconvenient facts.

Plaintiff said that he used defendant as an attorney several times over the years, building up a relationship.  Defendant says no, but testified that he may have undertaken an incorporation in which plaintiff was a shareholder.  Plaintiff says that he paid defendant in cash, and defendant says that when he wrote the bar contact that plaintiff may have had some input into the terms.

Plaintiff says that defendant represented him in the transaction, but defendant says that one Navaretta was plaintiff’s attorney.  Inconveniently, defendant sent the contract of sale directly to plaintiff, bypassing the "attorney."  An so it goes, with "facts" that cannot be conclusively found.

In the end, motion for summary judgment denied.

 

We grant that it is a stretch to jump from new statutes to legal malpractice, but it is a given that when the rules change, there will be mistakes made.  Mistakes, the eternal produce of human endeavor is known as legal malpractice within the legal community. 

It is no novelty, nor a surprise that negligent handling of discovery might lead to dismissals and sanctions.  U.S. Judge Shira Scheindlin’s decisions in Zubulake v. UBS Warburg  and Pension Committee are considered groundbreaking, yet merely restate and interpret the existing law. 

Parties in litigation are required to save and exchange electronically stored information.  No clearer message could be stated in the twin decisions.  Now, the State of New York has adopted a set of regulations which are calculated to streamline the discovery proceedings.

Preliminary conferences now must include a complete discussion of ESI, and provisions must be made to preserve and  exchange ESI.  Failures by attorneys to issue "litigation holds" and to preserve ESI will inevitably lead to problems, sanctions and dismissals.  Legal malpractice litigation will follow, as surely as day follows night.

 

 

Legal representation in even simple matters can lead to unintended consequences. As an ExampleH & J Restaurant v, A & J Grand Enterprises and Leigh, 2009 Slip OP 31544, authored by Justice Edmead, demonstrates how a simple ministerial mistake can end up with a potential $ 400,000 loss, with later judgment against the attorney.

It’s a simple transaction, A buys a restaurant from B. As might be expected, Seller exaggerates the sales, or hides underpayment of taxes. Since these commercial transactions have taken place since time immemorial, there are safeguards and protections. Buyer can take the business free of personal liability if it notifies the tax authorities 10 days prior to the sale, in which case the tax authorities have 5 days to assert tax liability. Should it happen, buyer can then back out.

Here, the notification was not made within 10 days, and several months later the tax authorities asserted personal liability to buyer in the neighborhood of $ 400,000. Seller is in default, and no where to be found.

What is the lesson here? Lesson 1: Legal malpractice is everywhere lawyers represent clients. Lesson 2: Know the subject matter of your area of law and don’t make simple transactions difficult. Lesson 3: Review lesson 2.
 

It’s not exactly legal malpractice and its not New York, but the headline and back story of this $ 1.96 Million sanction to Paul, Weiss, Rifkind, Wharton & Garrison and Lowenstein Sandler shocks the eye.  Celebrity sues celebrity over an oral agreement to make a bequest.  This case ends in a finding of frivolity and the largest sanction we remember seeing.  Here is the story from Law.Com:

 "Bergen County, N.J., Superior Court Judge Ellen Koblitz doesn’t seem too worried about sparing the reputations of Paul, Weiss, Rifkind, Wharton & Garrison and Lowenstein Sandler. In June, you’ll recall, she found that the two firms had filed a frivolous suit on behalf of billionaire Ronald Perelman in a family dispute over hundreds of millions of dollars. On Friday she issued a final opinion , rejecting the firms’ arguments for mercy and ordering them to pay $1.96 million in legal fees to the defendants, Perelman’s former father-in-law and brother-in-law.