In 601 Realty Corp. v Conway, Farrell, Curtin & Kelly, P.C. ;2010 NY Slip Op 05538 ;Decided on June 22, 2010 ;Appellate Division, Second Department we see the case continuing, with some rough edges removed.  Conway Farrell used to be a big legal malpractice defense firm, until it split off.  Now it is being defended by its former self.  Here, both sanctions and some discovery disputes have been resolved, and the case continues.
 

"Under the circumstances of this case, the conduct of the appellants after the Supreme Court declined to sign their order to show cause had a good faith basis and did not constitute frivolous conduct (see Dank v Sears Holding Mgt. Corp., 69 AD3d 557, 558; Yenom Corp. v 155 Wooster St. Inc., 33 AD3d 67, 70; Matter of Wecker v D’Ambrosio, 6 AD3d 452, 453). Accordingly, the Supreme Court erred in granting the plaintiffs’ motion for an award of sanctions against the appellants. "
 

The answer is yes, it can.  in Kram Knarf, LLC v Djonovic ;2010 NY Slip Op 05464 ;Decided on June 22, 2010 ;Appellate Division, First Department we see the following explanation:
 

"Accepting the facts alleged in the complaint as true and according plaintiffs the benefit of every possible favorable inference (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]), we agree that the allegations that defendant attorneys negligently gave their plaintiff clients an incorrect explanation of the contents of legal documents in connection with a property acquisition sufficiently states a legal malpractice claim against them (see Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300 [2001]; cf. Bishop v Maurer, 33 AD3d 497, 499-500 [2006], affd 9 NY3d 910 [2007]). The documents do not conclusively establish that defendants’ explanation was correct, and thus do not constitute a defense based on "documentary evidence" (CPLR 3211[a][1])."

In legal malpractice litigation there is a holy triumvirate of causes of action.  In general, they are ranked in this order:  legal malpractice, breach of fiduciary duty, and breach of contract.  There is a well known principal that if duplicative, there must be dismissal of some of these causes of action.

In Safe Flight Instrument Corp v. Sporn,  108497/08 Justice Emily Jane Goodman sets forth some of the principals in this area.  The story is a tangled web of patents, estate planning, an inventor who started up a company from 1946, eventually took it public, retired and continued to invent.  Sporn, defendant in the case seems to have represented both the old and a new company which was created by the inventor.

"The breach of fiduciary duty claim against Sporn is redundant, and is dismissed, because it is "essentially based on the same facts and seek[s] the same relief" as the legal malpractice claim against Sporn (AmBase Corp. v. Davis Polk & Wardwell, 30 AD3d 171, 172 [1st Dept 2006], affd 8 NY3d 428 [2007]; see also Weil, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 271 [1st Dept 2004]). 2

The legal malpractice and breach of fiduciary duty claims share in common the allegations that: Sporn was Safe Flight’s attorney during the time when Greene was developing and applying for the Patents (Complaint, ¶¶194, 211); Sporn was also acting as Greene’s attorney while he was developing and applying for the Patents (id., ¶¶196, 213); while serving as Safe Flight’s primary outside counsel, but in his capacity as Greene’s personal attorney, Sporn assisted Greene in incorporating Greenleaf, counseled Greene with regard to the proposed assignment of the Patents to Greenleaf, and drafted the Will, which named Sporn as the executor of the Will and provided that, at the sole discretion of Sporn as executor, all of Greene’s patents and inventions that had not been assigned to Greenleaf prior to his death should be so assigned (id., ¶¶197-199, 214-216); Sporn, in his capacity as the executor of Greene’s estate, engaged in efforts to probate the Will, which—absent the settlement between Safe Flight, the Siblings, Greene’s estate and Greenleaf—would have resulted in the Patents being transferred or assigned to Greenleaf and/or the Siblings (id., ¶¶200, 217); Safe Flight never granted Sporn a waiver or consent with respect to the conflicts of interest that his representation of Greene and Safe Flight entailed (id., ¶¶204, 230); and from 2005 until the time of his termination as counsel for Safe Flight, Sporn was engaged in a persistent pattern of disloyalty to Safe Flight in connection with his ongoing efforts to assist Greene with his plans to assign or transfer the Patents to an entity and/or persons other than Safe Flight (id., ¶¶203, 232).

Safe Flight concedes that both the legal malpractice claim and the breach of fiduciary duty claim arise in connection with Sporn’s alleged conflict of interest in representing Safe Flight, on the one hand, and Greene and Sporn’s own interests, on the other. However, Safe Flight argues that the two claims are premised upon different facts because: the legal malpractice claim is based upon Sporn’s alleged failure to disclose to Safe Flight that Greene was planning to assign the Patents to an entity other than Safe Flight, and to represent Safe Flight’s interests by attempting to stop Greene from doing so (see Pl. Mem. of Law, at 21; Complaint, ¶202); and the breach of fiduciary duty claim is based upon Sporn’s acts in setting up Greenleaf as an entity which competed with Safe Flight, taking a pecuniary interest in Greenleaf as its president, advising Greene in connection with the assigning and/or bequeathing of the Patents to an entity or persons other than Safe Flight, assisting Greene in diverting Safe Flight’s business opportunities in the Patents away from Safe Flight, securing a legal opinion from Dougherty as to whether Greene could deprive Safe Flight of ownership of the Patents, and giving his own personal interests and/or the interests of others priority over Safe Flight’s interests (see Pl. Mem. of Law, at 21; Complaint, ¶¶223-227). Thus, Safe Flight contends that the two claims are not duplicative, because the legal malpractice claim is based upon Sporn’s alleged negligence in failing to exercise the requisite standard of care in the performance of his duties as Safe Flight’s attorney, whereas the breach of fiduciary duty claim is based upon Sporn’s alleged actions in diverting corporate opportunities or assets away from Safe Flight, and to the benefit of himself and others (see Pl. Mem. of Law, at 21-22). Safe Flight also argues that its breach of fiduciary duty claim is not duplicative of its legal malpractice claim because the two claims seek different damages. Safe Flight asserts that it is entitled to disgorgement of the fees and compensation that were paid to Sporn during the period of his alleged disloyalty, and apparently contends that the recovery of those amounts is sought only as part of its breach of fiduciary duty claim and/or may not appropriately be sought as part of its legal malpractice claim (Pl. Mem of Law, at 24).

Safe Flights claims are not premised upon sufficiently separable or different facts as to warrant Safe Flight’s assertion of the breach of fiduciary duty claim in addition to its legal malpractice claim. "The attorney-client relationship is both contractual and inherently fiduciary," and, although "a complaint seeking damages alleged to have been sustained by a plaintiff in the course of such a relationship will often advance one or more causes of action based upon the attorney’s breach of some contractual or fiduciary duty owed to the client," "courts normally treat the action as one for legal malpractice only" (Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 8-9 [1st Dept 2008]). Here, the legal malpractice and breach of fiduciary duty claims are based upon essentially the same factual allegations"
 

Today’s New York Law Journal reports as news, and the Appellate Division, First Department reports as law a decision in McCagg v Schulte Roth & Zabel LLP ;2010 NY Slip Op 05463
Decided on June 22, 2010 ;Appellate Division, First Department  an unusual case in which it is alleged that a law firm aided and abetted a breach of fiduciary duty.  Note that this case is at least two levels of abstraction away from a typical legal malpractice case.  On the first level, it is a breach of fiduciary duty rather than a straight malpractice; on the second level, it is the law firm allegedly aiding, not directly doing.
 

"In 2000 and 2001, defendant Clingman and others formed a company called Marquis Jet Partners, Inc. Marquis is one of a handful of fractional jet ownership companies that maintain fleets of aircraft and sell the rights to travel on those planes for fixed periods of time to frequent users of jet travel. In August 2002, Marquis terminated Clingman. Clingman retained 12% of Marquis common stock, and refused an offer to sell back his shares and sign a non-compete agreement.

In November of the same year, Clingman invited plaintiff McCagg to attend a meeting in Florida with the senior management of Flexjet/Bombardier, a Canadian jet manufacturer. The purpose of the meeting was to discuss creating a company to compete with Marquis. Clingman allegedly thought the new company could have a competitive advantage over Marquis by offering the sale of airplane usage in smaller blocks of time.

McCagg and Clingman decided to pursue the venture. On December 17, 2002, the law firm of Schulte Roth & Zabel (SRZ), handled the incorporation of the corporation, which was called Clearjets, in the State of Delaware. SRZ had done legal work for Clingman, and he recommended it to McCagg to handle the incorporation.

Two days later, on December 19, 2002, Marquis’s counsel demanded that Clingman abandon any plans to engage in any venture that would compete with his former firm. The letter threatened that if Clingman did not accede, Marquis would take necessary legal action to protect its rights. SRZ responded by letter dated December 24, 2002. The correspondence stated, among other things, that Clingman had been terminated by Marquis, that he was not given any severance when he was terminated, that he had not executed a non-competition agreement, and that he was not otherwise bound to suspend involvement in any competing venture in the industry.

By complaint dated May 19, 2004, McCagg brought this action against the SRZ defendants and Clingman (the SRZ litigation). Clearjets was not a named plaintiff. The complaint contained eight causes of action. The first five were asserted against Clingman. They alleged: (1) breach of contract; (2) breach of fiduciary duty; (3) common-law fraud; (4) misappropriation of corporate opportunity and unjust enrichment; and (5) a claim for an accounting and constructive trust. The sixth through eighth causes of action were asserted against the SRZ defendants and certain SRZ partners. These claims were for: (6) breach of fiduciary duty; (7) aiding and abetting breach of fiduciary duty and fraud; and (8) legal malpractice. "

""[W]here the primary purpose for the creation of Clearjets was to compete with Marquis, I cannot say as a matter of law that Clingman’s negotiation and execution of a non-competition agreement with Marquis, while still chairman and CEO of Clearjets, was not a breach of his fiduciary duty owed to Clearjets. Nor can I say, as a matter of law, based on the parties’ submissions – including redacted and incomplete billing statements – that [the SRZ defendants] did not aid and abet Clingman in the alleged breach. As noted above, the statements show that [SRZ] advised Clingman on "all aspects of Marquis relationship including . . . non-competition and release agreements"

"The Marquis action and this SRZ litigation are separate lawsuits, and, under the express language of 8 Del Code § 278, Clearjets no longer existed when, more than three years after its dissolution, plaintiff moved to add it as a party in this action (see Marsh v Rosenbloom, 499 F3d 165, 172-73, 175 [2d Cir 2007]; In re Citadel Indus., 423 A2d at 502-503; Smith-Johnson S.S. Corp. v United States, 231 F Supp 184 [D Del 1964];). Finally, the motion court incorrectly concluded that because the derivative claims sought to be raised in this litigation related back to the commencement of the Marquis litigation (see CPLR 203[f]), they were not barred by 8 Del Code § 278. In view of these conclusions, we need not reach the SRZ defendants’ contentions relating to the merits of a proposed seventh cause of action sought to be asserted derivatively by McCagg on behalf of Clearjets.

In the second order appealed, the motion court correctly ruled that plaintiff acted improperly in filing, without its permission, an amended complaint that differed substantially from the proposed amended complaint that the court had granted plaintiff leave to file in its August 4, 2008 order (see CPLR 3025[b]; cf. CPLR 2001]). Indeed, plaintiff’s attorney conceded at the oral argument before the motion court that he should have obtained further permission to file the amended complaint. However, in view of this concession, our preference for resolving controversies on the merits (see Spira v New York City Tr. Auth., 49 AD3d 478 [2008]), and the absence of a pattern of willful or contumacious conduct by plaintiff (see Kaplan v KCK Studios, 238 AD2d 264 [1997]), it was an improvident exercise of discretion for the motion court to dismiss the amended complaint with prejudice (see Grant v Rattoballi, 57 AD3d 272, 273 [2008]; Kaplan, 238 AD2d at 264-265; cf. Corsini v U-Haul Intl., 212 AD2d 288, 291 [1995], lv dismissed in part and denied in part 87 NY2d 964 [1996]). "

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

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

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

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

This legal malpractice case has been active for 21 years, and dates from the Club dominated 1980’s.  Plaintiff is a model-actor-club owner who has had a $ 1.25 million judgment from what is described as an accident.  "In December 1988, non-party David W. Ross ("Ross") allegedly had an accident and sustained injuries at the World Night Club (the "World" or "nightclub"), which was then jointly owned by Frank Roccio (Roccio) and Peter Frank (Frank). As a result, in November 1989, Ross brought suit against the World, El Mundo, Inc., and plaintiff, although plaintiff had not owned the World Club at the time of the accident. Plaintiff’s then personal attorney, Oleh N. Dekajlo, Esq. ("Mr. Dekajlo") of Berns Dekajlo & Castro ("Berns Dekajlo"), who had represented plaintiff in the sale of his interests in the World nightclub, allegedly received a copy of the Summons and Complaint in October or November 1989. Allegedly, Berns Dekajlo did not notify plaintiff that Ross had sued him personally."

Thus starts the 21 year life of this legal malpractice case.  Garcia v. Berns Dekajlo & Castro, 106895/06;Decided: June 1, 2010;Justice Carol Robinson Edmead.  The court, after a thorough discussion of argument points, and the law concerning summary judgment determined;

"The Issler defendants entered into a retainer agreement with plaintiff and upon its execution, agreed to the express terms stated therein (see Maysek & Moran, Inc. v. S.G. Warburg & Co., Inc., 284 AD2d 203, 726 NYS2d 546 [1st Dept 2001]; see e.g., Ginther v. Scinta, 31 AD3d 1135, 818 NYS2d 376 [4th Dept 2006]). Under the Retainer Agreement, the Issler defendants were "to act as [plaintiff’s] attorney…for the purposes of appealing the order…dated December 10, 2003 and…bringing on a motion to renew and/or reargue the motion which was decided by the aforesaid order" (emphasis added). Thus, arguably, the Issler defendants had an obligation to also renew the December 10, 2003 order. As such, the plain terms of the Retainer Agreement, while defeating plaintiff’s claim that the Issler defendants had a duty to reargue the Court’s January 3, 2002 order, arguably bound the Issler defendants to move to renew. Thus, it cannot be said that the Issler defendants had no obligation to move to renew the December 10, 2003 Order.

Further, contrary to Issler defendants’ contention, it cannot be said, as a matter of law, that the Issler defendants did not commit legal malpractice by failing to move for renewal. It is uncontested that as relevant herein, a motion for leave to renew under CPLR 2221 "shall be based upon new facts not offered on the prior motion that would change the prior determination" and "shall contain reasonable justification for the failure to present such facts on the prior motion." The motion to renew, when properly made, posits newly discovered facts that were not previously available or a sufficient explanation is made why they could not have been offered to the Court originally (see discussion in Alpert v. Wolf, 194 Misc 2d at 133, 751 NYS2d 707; D. Siegel New York Practice §254 [3rd ed. 1999]). Further, to vacate a default judgment, plaintiff would have had to "demonstrate both a reasonable excuse and a meritorious defense" (Benson Park Associates, LLC v. Herman, 899 NYS2d 614 [1st Dept 2010] citing Mutual Mar. Off., Inc. v. Joy Const. Corp., 39 AD3d 417, 419, 835 NYS2d 88 [2007]). Thus, in order for the Issler defendants to move to renew, seeking to vacate the default judgment entered against the plaintiff, plaintiff via the Issler defendants would have to have shown not only a meritorious defense, but, that the three affidavits constituted newly discovered facts that were not previously available or a sufficient explanation as to why such affidavits "could not have been offered to the Court originally," and that such affidavits would have changed the Court’s prior determination finding proper service.

It is clear to this Court that upon renewal of the motion to vacate the default judgment, plaintiff would have established the first prong of vacatur, i.e., he had a meritorious defense to Ross’s Action. The documentary evidence established that plaintiff was not an officer nor did plaintiff have any interest in the World nightclub at the time of Ross’s accident, and bore no responsibility for the injuries Ross sustained at the nightclub.

Further, contrary to the Issler defendants’ contention, it cannot be said, as a matter of law, that the December 2003 order finding proper service upon plaintiff and consequently, jurisdiction, would have remained intact if the Issler defendants presented the three affidavits."

It’s usually the Court of Appeals which issues a game changing decision, which sets stare decisis on its ear.  From time immemorial, the question of privity has predominated the estate legal malpractice area.  In essence, is the estate in privity with the attorney who set up the estate?   Mostly the answer was no.  Now, we have Estate of Saul Schneider v Finmann
2010 NY Slip Op 05281 ;Decided on June 17, 2010 ;Court of Appeals ;Jones, J.  The plain statement of the case is: "At issue in this appeal is whether an attorney may be held liable for damages resulting from negligent representation in estate tax planning that causes enhanced estate tax liability. We hold that a personal representative of an estate may maintain a legal malpractice [*2]claim for such pecuniary losses to the estate."
 

"Strict privity, as applied in the context of estate planning malpractice actions, is a minority rule in the United States [FN1]. In New York, a third party, without privity, cannot maintain [*3]a claim against an attorney in professional negligence, "absent fraud, collusion, malicious acts or other special circumstances" (Spivey v Pulley, 138 AD2d 563, 564 [2d Dept 1988]). Some Appellate Division decisions, on which the Appellate Division here relied, have applied strict privity to estate planning malpractice lawsuits commenced by the estate’s personal representative and beneficiaries alike (Deeb v Johnson, 170 AD2d 865 [3d Dept 1991]; Spivey, 138 AD2d at 564; Viscardi v Lerner, 125 AD2d 662, 663-664 [2d Dept 1986]; Rossi v Boehner, 116 AD2d 636 [2d Dept 1986]). This rule effectively protects attorneys from legal malpractice suits by indeterminate classes of plaintiffs whose interests may be at odds with the interests of the client-decedent. However, it also leaves the estate with no recourse against an attorney who planned the estate negligently. "

"We now hold that privity, or a relationship sufficiently approaching privity, exists between the personal representative of an estate and the estate planning attorney. We agree with the Texas Supreme Court that the estate essentially "’stands in the shoes’ of a decedent" and, therefore, "has the capacity to maintain the malpractice claim on the estate’s behalf" (Belt v Oppenheimer, Blend, Harrison & Tate, Inc., 192 SW3d 780, 787 [Tex 2006]). The personal representative of an estate should not be prevented from raising a negligent estate planning claim against the attorney who caused harm to the estate. The attorney estate planner surely knows that minimizing the tax burden of the estate is one of the central tasks entrusted to the professional. Moreover, such a result comports with EPTL § 11-3.2(b)[FN2], which generally permits the personal representative of a decedent to maintain an action for "injury to person or property" after that person’s death.

Despite the holding in this case, strict privity remains a bar against beneficiaries’ and other third-party individuals’ estate planning malpractice claims absent fraud or other circumstances. Relaxing privity to permit third-parties to commence professional negligence actions against estate planning attorneys would produce undesirable results — uncertainty and limitless liability. These concerns, however, are not present in the case of an estate planning malpractice action commenced by the estate’s personal representative. "

We think the legal malpractice after a medical malpractice case is amongst the most difficult.  In order to proceed, the attorney must be well versed in both fields, and must understand the psychological set up necessary to succeed.  In our view, the psychological set up is that most courts are wary of medical malpractice cases, and even more wary of legal malpractice cases.  In this situation it’s an exponential product that requires careful treading.

Here, in Healy v Finz & Finz, P.C. 05/19/2010 Other Courts 2010 NYSlipOp 31391(U) we see a clear explanation of the rules of summary judgment, with appropriate deference to questions of fact.  Plaintiffs claim that Finz & Finz negligently represented them in a medical malpractice and failed to name at least three doctors.  The complaint there was dismissed against two doctors, who would still be in the case but for the negligence.  In this case plaintiff mother was carrying triplets, two of whom were sharing a placenta.  One of the fetuses died.  One of the infants was born with periventricular leukomalacia.

"Summary judgment is not appropriate in medical malpractice actions where the parties adduce conflicting expert opinions.  Such credibility issues can only be resolved by the jury. Both plaintiff and defendant offered affidavits of Board Certified Obstetrical physicians which, in effect, cancelled each other.

Summary Judgment denied.