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.

From the NYLJ on 6/16/10 by Nate Raymond:  "Dechert Loses Bid to Dismiss Suit Over Letter Used by Dreier."  The case is Fortress Credit Corp. v. Dechert LLP, 603819/2009

"Dechert has lost a motion to dismiss Fortress Investment Group LLC’s $50 million lawsuit over the law firm’s issuance of an "utterly false legal opinion letter" that ex-attorney Marc S. Dreier used in his $700 million scam. Manhattan Supreme Court Justice Charles Ramos (See Profile) last week called Dechert’s motion "premature," according to a transcript. "This is really a summary judgment motion," he said. "After we have discovery, we’ll know what we’re talking about here. You are raising interesting issues, but I’m not going to dismiss any part of this complaint."

Dechert, which declined comment, was sued by Fortress in December over an opinion letter by the law firm that was used in Mr. Dreier’s fraud. Fortress, which spent $125 million purchasing fake notes from Mr. Dreier, claimed in 2008 it required the lawyer to obtain an opinion letter from an "internationally recognized law firm" in connection with a $50 million loan he was arranging supposedly for his client, Solow Realty & Development Company. Mr. Dreier proposed Dechert, where then-partner Bruce Wood drafted the opinion letter.

Dechert in the letter said it represented developer Sheldon Solow and assured Fortress the deal was legitimate, according to the complaint, when in fact it was a "sham." Fortress argued Dechert misrepresented itself as lawyers to Solow Realty without doing "even the most basic due diligence" on the deal. Dechert contended it was not the firm’s responsibility to ensure Mr. Solow’s signatures were legitimate, and that the opinions themselves in the letter were accurate. The letter, included as an exhibit to the complaint, said Dechert had been retained by both Solow Realty and Mr. Dreier. Joel Miller, Dechert’s lawyer at Miller & Wrubel, at the hearing last week said there "is nothing that says that Dechert cannot deal with one client or the other client."

Here are the minutes from the case.

 

. Defendants sometimes say that a legal malpractice case is a grudge match, or a lawsuit based solely upon pique.  Sometimes it is true, and the legal malpractice law suit serves as the last act of a badly ended attorney-client relationship. 

Here in this case, we have a pro-se plaintiff pursuing a pro-se defendant, over a case which was lost prior to plaintiff’s retention of defendant in the underlying action.  in Kuzmin v Nevsky
2010 NY Slip Op 04959 ;Decided on June 8, 2010 ;Appellate Division, Second Department  plaintiff had already lost her employment discrimination case when she hired Nevsky.  From there, it went downhill.
 

"On May 17, 2001, the plaintiff, Tatiana Kuzmin, commenced an action against Visiting Nurse Service of New York (hereinafter VNS), Rockaway Home Attendant Services, Inc. (hereinafter Rockaway), and Oleg Beretsky, alleging sexual harassment, assault and battery, intentional infliction of emotional distress, and other causes of action. In an order dated November 13, 2002, the Supreme Court granted the motion of the defendants in that action to dismiss the complaint in that action, except for one cause of action alleging assault and battery, which was directed solely at Beretsky. Kuzmin retained the defendant, Lena Nevsky, as her attorney on January 31, 2003. Nevsky moved, on behalf of Kuzmin, inter alia, for leave to reargue Kuzmin’s opposition to the defendants’ motion to dismiss the complaint in the underlying action, and the Supreme Court denied the motion. The relationship between Kuzmin and Nevsky began to deteriorate, and Nevsky moved to withdraw as counsel in the underlying action on October 21, 2003. The Supreme Court granted Nevsky’s motion to withdraw.  On April 10, 2007, Kuzmin filed a pro se complaint against Nevsky alleging legal malpractice. Nevsky moved to dismiss the complaint pursuant to CPLR 3211(a)(7). The Supreme Court denied the motion, stating that Nevsky failed to attach a copy of the complaint. Nevsky then moved, inter alia, for leave to renew her prior motion to dismiss, this time attaching a copy of the complaint. In an order dated May 15, 2009, the Supreme Court granted that branch of Nevsky’s motion which was for leave to renew and, upon renewal, granted Nevsky’s motion to dismiss the complaint. [*2]

Kuzmin also moved for leave to enter a default judgment based on Nevsky’s failure to answer the complaint. In an order dated June 17, 2009, the Supreme Court denied the motion on the ground that the matter had been dismissed. Kuzmin appeals from the orders dated May 15, 2009, and June 17, 2009. We affirm. "

Attorney represents X and then later represents X’s opponent in litigation.  Aside from the fact that the opponent is X’s mother, when does such representation cause a conflict and legal malpractice?  We see in Benaquista v Burke ;2010 NY Slip Op 04896 ;Decided on June 10, 2010
Appellate Division, Third Department  that there is no per se rule.
 

"Plaintiff and his mother co-owned two corporations and defendant represented the corporations in various matters. In December 2002, plaintiff was removed as an officer and director of one of the corporations. Shortly thereafter, his mother and the corporations commenced an action against him for, among other things, mismanagement and misappropriation [*2]of corporate funds. Defendant was the attorney of record for plaintiff’s mother and the corporations in that action. Plaintiff then commenced this action alleging, as pertinent here, that defendant committed legal malpractice. In the complaint, plaintiff alleged that he had previously sought legal advice from defendant concerning business issues between plaintiff and his mother and, in doing so, he had discussed confidential legal and personal matters with defendant. Plaintiff asserted that defendant then used such confidential information against him in commencing the action on behalf of his mother and the corporations, as a result of which he had suffered damages.

In order to recover for legal malpractice, plaintiff must demonstrate that defendant "’failed to exercise the reasonable skill and knowledge commonly possessed by a member of the legal profession’" (Bixby v Somerville, 62 AD3d 1137, 1139 [2009], quoting Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 301-304 [2001]) and that plaintiff was damaged as a result of such negligence (see Bixby v Somerville, 62 AD3d at 1139). Nonetheless, as the proponent of a motion for summary judgment, defendant had the initial burden of establishing his prima facie entitlement to judgment as a matter of law (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). Defendant met this burden by proffering defendant’s sworn affidavit, alleging that his firm had represented plaintiff’s mother and the corporations prior to his representation of plaintiff — which consisted only of the incorporation of a business owned by plaintiff — and that no conflict of interest existed. In addition, defendant provided plaintiff’s bill of particulars and asserts that it fails to specifically identify any personal or confidential information used by defendant against plaintiff or any damages suffered by plaintiff [FN2]. Thus, the burden shifted to plaintiff to raise a question of fact requiring a trial (see CPLR 3212 [b]; Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065, 1067-1068 [1979]).

Plaintiff’s only opposition to defendant’s cross motion was an attorney affirmation and various documents which, as relevant to this appeal, consisted primarily of billing records. Inasmuch as plaintiff failed to proffer any sworn allegations of an individual with personal knowledge of the relevant facts and the documents submitted were not in admissible form, his opposition was insufficient to sustain his burden of raising a triable issue of fact to defeat defendant’s entitlement to judgment as a matter of law (see Alvarez v Prospect Hosp., 68 NY2d at 327; Zuckerman v City of New York, 49 NY2d at 562; Bixby v Somerville, 62 AD3d at 1139; Polyglycoat Ctr. of Conn. v Arace’s Ford, 126 AD2d 844, 845 [1987]). Accordingly, Supreme Court properly granted defendant’s cross motion for summary judgment dismissing the complaint. "

 

Attorney and law firm arrange a house sale from plaintiff to defendant in which the sale price is well below market, and plaintiff retains a life estate in the house.  At closing, everything starts to go wrong.  Seller is persuaded to take a mortgage, and the attorney agrees to file the mortgage as well as the life estate.  Neither is recorded.  Buyer then goes out and gets a mortgage almost three times the size of the sale price and defaults.  More than three years passes.  Has the statute of limitations passed?

In Lytell v Lorusso ;2010 NY Slip Op 04964 ;Decided on June 8, 2010 ;Appellate Division, Second Department we see a reversal of the dismissal of the legal malpractice case.
 

"Assuming that the legal malpractice causes of action accrued more than three years before this action was commenced (see McCoy v Feinman, 99 NY2d 295, 301; Ackerman v Price Waterhouse, 84 NY2d 535, 543; Melendez v Bernstein, 29 AD3d 872, 872; Alicanti v Bianco, 2 AD3d 373, 374), nevertheless, the complaint adequately alleged that the plaintiff was "left with the reasonable impression that [Levinson] was, in fact, actively addressing [his] legal needs" after the closing date (Shumsky v Eisenstein, 96 NY2d 164, 169). Thus the "pleading is sufficient to establish that the parties mutually contemplated that [Levinson’s] work and representation for [the transaction] would continue after [the closing date] and, therefore, the continuous representation doctrine applies," and the statute of limitations was tolled (Symbol Tech., Inc. v Deloitte & Touche, LLP, 69 AD3d 191, 195; see Carnevali v Herman, 293 AD2d 698, 699; Khan v Hart, 270 AD2d 231). Levinson failed to demonstrate that the plaintiff knew or should have known that Levinson had stopped representing him in the matter more than three years before the action was commenced (cf. Santulli v Englert, Reilly & McHugh, 78 NY2d 700, 709). Accordingly, the legal malpractice claims should not have been dismissed since Levinson failed to establish that they were time-barred (see Zorn v Gilbert, 8 NY3d 933, 934; 730 J & J, LLC v Polizzotto & Polizzotto, Esqs., 69 AD3d 704; Town of Wallkill v Rosenstein, 40 AD3d 972, 974). In any event, we further note that "the plaintiff adequately pleaded facts which, if proven, would establish the existence of an equitable estoppel" in this case (Doe v North Shore Univ. Hosp., 28 AD3d 603, 604; see Simcuski v Saeli, 44 NY2d 442; General Stencils v Chiappa, 18 NY2d 125).

The Supreme Court properly denied that branch of Levinson’s motion which was to dismiss the cause of action alleging fraud insofar as asserted against them, for failure to state a cause of action (see CPLR 3211[a][7]). "[T]he allegations in the complaint describe a case where a defendant has fraudulently and positively as with personal knowledge stated that something was to be done when he knew all the time it was not to be done and that his representations were false" (Channel Master Corp. v Aluminium Ltd. Sales, 4 NY2d 403, 407-408 [internal quotation marks omitted]; see Braddock v Braddock, 60 AD3d 84, 90; Romano v Key Bank of Cent. N.Y., 90 AD2d 679, 680). Moreover, the cause of action alleged in the complaint "is premised upon one or more [*3]affirmative, intentional misrepresentations . . . which have caused additional damages, separate and distinct from those generated by the alleged malpractice" (White of Lake George v Bell, 251 AD2d 777, 778; see Simcuski v Saeli, 44 NY2d 442, 451-452; Bernstein v Oppenheim & Co., 160 AD2d 428, 430). Additionally, the assertions in the complaint permit a reasonable inference of the alleged conduct (see Pludeman v Northern Leasing Sys., Inc., 10 NY3d 486, 492), and the complaint is otherwise "sufficient to advise [Levinson] of the incidents complained of" (Union State Bank v Weiss, 65 AD3d 584, 585; see CPLR 3116[b]). Thus the complaint adequately alleged fraud. "

 

In an unusual procedural setting, a suspended attorney’s request for contingent legal fees in a medical malpractice action was denied by Justice Joan Carey, and then vacated by Justice Alice Schlesinger.  in Warren v Del Principio 06/02/2010 Other Courts.  Likely based upon her retiring last year, Justice Schlesinger took over her caseload, and likely took a second look at this case.

Here, the attorney was suspended for reasons other than this case,and presented evidence to show that his work led to a settlement of $ 100,000.  Is he then due a fee?  Justice Schlesinger thinks that he has at least made the first hurdle.

In his affidavit the attorney enumerated the services rendered to plaintiff before suspension from the practice of law, including the initial meeting with decedent, investigation of the merits of the case, consultation with an expert, commencement of a medical malpractice action, depositions and the discovery and securing of a $ 100,000 settlement offer, which was eventually taken. 

Details, Details!  Is this a Connecticut or a New York Case?  Is there standing or not?  Who has the right to sue the attorneys?  in JP MORGAN CHASE BANK, N.A.,  -against- LAW OFFICE OF ROBERT JAY GUMENICK, P.C., ET AL.,08 Civ. 2154 (VM);UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2010 U.S. Dist. LEXIS 53993;
May 26, 2010 we see the following:

"Under New York law, the relevant analytical approach to choice of law in tort actions is the "interest analysis," where "the law of the jurisdiction with the most significant interest in, or relationship to, the dispute" is applied. 3 Lazard Freres & Co. v. Protective Life ins. Co., 108 F.3d 1531, 1539 (2d Cir. 1997). And for contract claims, New York courts typically look to the "center of gravity" of the dispute or the "grouping of contacts" in the jurisdictions at issue, unless the policies underlying conflicting laws in a contract dispute are "readily identifiable and reflect strong governmental interests." Allstate, 613 N.E.2d at 940. Regardless of whether the center of gravity or interest analysis is applied, both require consideration of the facts and significant contacts underpinning the dispute. See id. ("[C]ritical to a sound [center of gravity] analysis is selecting the contacts that contain significance in the particular contract dispute."); see also Warshay v. Guinness PLC, 750 F. Supp. 628, 632 (S.D.N.Y. 1990), [*7] aff’d, 935 F.2d 1278 (2d Cir. 1991) ("[T]he facts or contacts which obtain significance in defining State interests are those which relate to the particular law in conflict.")
 

Perhaps its the economic downturn, perhaps just a coincidence, but we have heard of three "imposter" closing scenarios recently.  Here is one that stands out.  In Layton v Layton 06/04/2010 Other Courts 2010 NYSlipOp 31381(U)  wife and husband are divorcing, and the marital house is to go to the wife. A closing is scheduled, and defendant attorneys are there for the bank.  They are to earn $ 580 to be the settlement agent.  At the closing a man, with two forms of expired identification, appeared as husband.  He was not.

What remedies does husband have against the attorneys?  Here is the more interesting question.  If there is no privity between the husband and the settlement agent, does the settlement agent owe a fiduciary duty to the husband [as transferror}?  If the settlement agent owes a fiduciary duty, does presentation of a legal malpractice cause of action in addition to a breach of fiduciary duty cause of action doom the fiduciary duty cause of action?  Here is seems to have colored the picture to the detriment of plaintiff.  The general rule is that a breach of fiduciary duty which relies on the same facts as a legal malpractice cause of action is faulty.  How about a single cause of action on the one set of facts>

We do not know the answer to this question, but would a single cause of action for breach of fiduciary duty have succeeded? 

We’re proud to announce that the New York Law Journal today published an article about Judiciary Law 487.entitled  An Explosion of Developments in Judiciary Law 487

"Legal concepts change by evolution and revolution. Evolution is the most familiar process in legal scholarship. A principle or a statute is analyzed, then re-interpreted in the light of newer or novel events. The basic principles remain in effect. An example of evolutionary change is seen in the process by which intangible computer files have come to be subjected to conversion analysis. Shmueli v. NRT N.Y. Inc., 68 AD3d 479 (2009). Another example is the gradual acceptance of e-mails in contract and communications law.

Revolutionary change is different and sudden. One example is the emergence of Judiciary Law §487 from its centuries long slumber. After a recent decision by the Court of Appeals on this ancient statute, the world of legal malpractice has been stood on its head. What was formerly an ill-known extreme fringe theory of law has burst into prominence and scholarly acceptance. Although the statute is more than 700 years old, it today stands in the mainstream."

Judiciary Law 487 may well be the newest oldest thing in legal malpractice.  Coming, as it does, from medieval England just after the Magna Carta, it is the oldest statute in Anglo-American jurisprudence.   As for continuity, this seems to be the only attorney-specific statute that has survived 100 years, much less 700+

Today, with a boost from the Court of Appeals, the limits of Judiciary Law 487 law are under tremendous expansion, with its outer edges being defined daily.  We’ll comment on the expansion in coming articles.