Yesterday we discussed medical treatment liens and when an attorney might become liable to pay them, even though the attorney did not deduct from the settlement proceeds when making the distribution.

Today, Joel Stashenko in the NYLJ reports passage of a bill to eliminate "double dipping" by public employees in the disability area.  Specifically, "The bill, contained in a mandate relief measure put on the Legislature’s special session agenda Tuesday by Governor David A. Paterson, eliminates a quirk in state law that has allowed public employees injured due to employer negligence who successfully sue for loss of future wages to get those payments plus whatever disability benefits workers qualify for."

While this is of interest to public employees who are injured, there is a much wide application and interest that this bill addresses.  The entire area of lien recovery, of attorney representation in post-verdict (or settlement) lien resolution, and equitable subrogation is in flux, and this bill simply adds to the mix.

"Another compromise was a provision that eliminates subrogation in medical malpractice suits that litigators have complained has made it more difficult to reach settlements.

 

The legislation prohibits insurers, except in a few narrow exceptions, from seeking from either plaintiffs or defendants to recoup insurers’ coverage costs if a settlement has been reached in a malpractice case.

"The parties can freely settle a tort suit without being concerned that the disability provider is going to go after those monies," Mr. Schwartz said.

Mr. Cardozo said the provision would effectively undo the Court of Appeals’ ruling in Fasso v. Doerr, 12 NY3d 80, in which the Court ruled that an insurer’s equitable subrogation rights could not be extinguished without the insurer’s consent in the settlement of a personal injury action (NYLJ, Feb. 25, 2009)."

 

Personal injury law requires doctors, doctor reports, doctor testimony and medical treatment of the plaintiff-clients.  Clients rarely have the means to pay for medical treatment after an injury, yet need it.  Because of this need a system has developed in which plaintiff-clients go to medical providers, who provide medical treatment and file a "doctor’s lien." 

The lien is supposed to work like this:  client sues for the personal injury and if they win, the medical treatment is part of the damages, and then the attorney is supposed to pay off the lien.  Good?  Sure, but what happens when the case is settled 5 years later, and the file is a little confused, and the lien does not get paid?  What happens is that the attorney deducts his fee, the client gets the rest, and then years later, the doctor comes to the attorney for payment.  Naturally, the attorney does not want to pay the client’s medical costs from his own pocket, and litigation ensues.

Here in Complete Management Inc. v. Bader, 112683/08; Decided: October 13, 2009; Justice Emily Jane Goodman , Supreme Court, New York County we see one outcome:

"On April 25, 2005, AR Synergy LLC (ARS), an escrow and collection agent for CMI, mailed listings of reported open liens to Defendants to begin the collection of the outstanding GMMS receivables. Id., ¶23. A spreadsheet listing such liens or GMMS receivables is annexed as "Exhibit B" to the complaint. CMI alleges that, in the ensuing months following the mailing, ARS received no cooperation from Defendants, who have failed to make "subsequent payments of any owed GMMS Receivables to ARS or CMI." Id., ¶24. CMI brings this action against Defendants for "refusing to remit proceeds of liens owed to Plaintiff, or to provide Plaintiff with a more detailed accounting of the status of many of Defendants’ [personal injury] cases."
 

"In Leon v. Martinez (193 AD2d 788 [2d Dept 1993]), the defendant attorney who drafted and notarized a document that gave plaintiffs a lien on the proceeds of his client’s personal injury action was sued by the plaintiffs, after he disbursed proceeds from the settlement of the action to his client in disregard of the lien or assignment. The trial court granted the attorney’s CPLR 3211 motion to dismiss, reasoning that his preparation of the document did not create a personal liability on his part. The Appellate Division reversed, and held that "[w]here attorneys have notice of an assignment or [sic] a portion of their client’s claim for personal injuries and pay out money in disregard of the assignment, they may be liable to the assignees." Id. at 789 (citations omitted). The appellate court’s decision was affirmed by the Court of Appeals. Leon, 84 NY2d 83, supra (Court concluded that there were sufficient allegations in plaintiff’s complaint and supporting affidavit to withstand the motion to dismiss); see also Stanger, D.C., P.C. v. Panzella, 13 Misc 3d 130(A), 2006 NY Slip Op 51842(U) (App Term, 1st Dept 2006) (affirming small claim court’s award of damages to plaintiff chiropractor because, in disregard of assignment, defendant attorney failed to make direct payment of medical fees to plaintiff upon attorney’s receipt of client’s personal injury action settlement proceeds); Williamsburg South Medical v. Maloney, NYLJ, Feb. 10, 2003, at 20, col 6 (Civ Ct, NY County 2003) (court denied defendant lawyer’s motion to dismiss plaintiff doctor’s claims based on breach of contract and breach of fiduciary duty, because complaint contained sufficient facts to support allegation that defendant failed to pay plaintiff with funds from settlement proceeds in which plaintiff has a lien).

In the instant case, the complaint alleges that Defendants knew of the liens in favor of CMI-GMMS, but disregarded such liens by refusing to remit to CMI the settlement or judgment proceeds of their clients. Complaint, ¶¶41-43, 47-52, 58-59. The supporting affidavit submitted by CMI’s agent, Ray Rowney, Jr., also stated, inter alia, that Defendants knew of these liens because (1) they compensated CMI on some of the liens over a period of eight years; (2) CMI communicated with Defendants about payment of the liens and status of the personal injury cases for a 10-year period; and (3) CMI sent the executed lien documents to Defendants. Rowney Affidavit, ¶¶11-12; Exhibit 3. This court may "freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint." Leon, 84 NY2d at 88."

 

Any place there are disputes over anything, legal malpractice questions lurk.  One is reminded of the New Yorker cartoon in which a 4 year old has dropped his ice cream cone, only to have an adult ask if he needs an attorney.

in a far more serious vein, here is a legal malpractice case arising from return and reimbursement of Nazi confiscated artworks.  Eventually one attorney represented a massive family tree of descendants, all of whom had some claim on a vast trove of artwork which was boxed up and ready to leave Germany in 1939, only to be intercepted by the Nazis and taken away.

 

In THEKLA NORDWIND and GRETA HOERMAN,  – v.- DAVID J. ROWLAND and ROWLAND & ASSOCIATES we look back to WWII.  ,Clara and Gustav Kirstein lived in Leipzig, Germany with their two daughters, Gabrielle and Marianna, in the 1930s. They were "a close Jewish family of means." Gustav, who was a renowned art publisher and art collector, died in 1934, leaving a life estate in all of his assets to his wife Clara and the remainder to Marianna and Gabrielle in equal shares.

Before his death, Gustav had experienced the beginnings of Nazi persecution when his business was subjected to a forced sale. Faced with the continuing rise of Nazi power, Clara sent her two daughters [*4] to the United States after Gustav’s death. Clara, intending to emigrate to the United States after her daughters, remained in Germany to "sell whatever she could of her remaining artwork and business" and to "ship the balance of her artwork and other personal property to . . . New York, where she planned to join [her family]." On June 29, 1939, however, the Nazis confiscated Clara’s passport and denied her permission to leave Germany. That night, Clara returned to her home in Leipzig and committed suicide. Thereafter, the Nazis confiscated her assets (the "Kirstein Assets"), which included "the artwork and other property that had been packed for shipment to . . . the United States."

In September of 1998, the Nordwind Parties, who are nieces and nephews of Clara Kirstein, became aware of the possibility that they may be entitled to recover restitution for the Kirstein Assets. After conducting research on the Internet, the Nordwind Parties retained defendant Rowland [*7] on October 1, 1998, to "file a claim . . . to the Kirstein Assets and to maximize [their] recovery on the claim to the extent possible." 

"At no point did Rowland inform the Nordwind Parties of any potential conflicts of interests arising from his representation of persons who might hold interests adverse to the Nordwind Parties. Rowland did inform the Nordwind Parties, however, that "[b]oth Miriam Reitz [Baer] . . . and Christel Gauger have indicated that they may wish to assign their rights to Clar[a] Kirstein’s nieces and nephews[, i.e., the Nordwind Parties,] at some time in the future." Rowland had also informed the Nordwind Parties that "only heirs are eligible to file claims under the [German Property Act], a prerequisite status to the assertion of a claim [*9] to the JCC Goodwill Fund." Although it is disputed whether Rowland received oral consent from the Nordwind Parties to contact Gauger and offer his services, it is undisputed that Rowland never obtained a written waiver from them to do so."

"On December 22, 1998, Rowland filed a restitution claim with the JCC Goodwill Fund on behalf of only Miriam Baer and Gauger as heirs to the Kirstein Assets. The following year, on December 3, 1999, Miriam Baer and the Oriental Institute assigned their interests in the Kirstein Assets to the Nordwind Parties. Gauger, however, refused to assign her interests in the Kirstein Assets to the Nordwind Parties."

"The Nordwind Parties also argue that the District Court erred in dismissing their breach of fiduciary duty claim as duplicative of their legal malpractice [*28] claim. We disagree because we conclude, as did the District Court, that the breach of fiduciary duty claim that plaintiffs combined in the first cause of action with their legal malpractice claim must be dismissed as duplicative of the malpractice claim.

HN8Under New York law, where a claim for breach of fiduciary duty is "premised on the same facts and seeking the identical relief" as a claim for legal malpractice, the claim for fiduciary duty "is redundant and should be dismissed." Weil, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 10 A.D.3d 267, 780 N.Y.S.2d 593, 596 (App. Div. 2004). However, if the remedy sought by the plaintiffs "is a restitutionary one to prevent the fiduciary’s unjust enrichment," the "less stringent ‘substantial factor’ standard" would apply to the causation element of the claim for breach of fiduciary duty. See LNC Invs., Inc. v. First Fidelity Bank, N.A. N.J., 173 F.3d 454, 465 (2d Cir. 1999) (Sotomayor, J.); see also, e.g., RSL Commc’ns PLC v. Bildirici, F. Supp. 2d , 2009 U.S. Dist. LEXIS 72691, 2009 WL 2524614, at 23 n.15 (S.D.N.Y. 2009). Otherwise, "where damages are sought for breach of fiduciary duty under New York law, the plaintiff must demonstrate that the defendant’s [*29] conduct proximately caused injury in order to establish liability." LNC Invs., Inc., 173 F.3d at 465; cf. Achtman, 464 F.3d at 337 (requiring proximate-causation standard to establish legal malpractice claim)."

 

One of the paradoxes of the legal malpractice world is the number of pro-se plaintiffs.  While there are some pro-se defendants [both top-tier and totally uninsured], pro-se plaintiffs are often present.  Here, in Walter v Jones, Sledzik, Garneau & Nardone, LLP 2009 NY Slip Op 08003 ;  Decided on November 4, 2009 ; Appellate Division, Second Department we see a pro-se plaintiff who sues the law firm, only to fail at the very begining of the case.
 

"The plaintiff did not effect proper service of process upon the defendant, since she failed to deliver the summons, or cause it to be delivered, to an individual who was authorized to accept service on behalf of the defendant (see Hossain v Fab Cab Corp., 57 AD3d 484, 485; Kurshan v Townhouse Mgmt. Co., 223 AD2d 402). The defendant moved pursuant to CPLR 3211(a)(8) to dismiss the complaint for lack of personal jurisdiction. The plaintiff failed to oppose that motion, and the Supreme [*2]Court granted it upon her default.

Thereafter, the plaintiff moved, in effect, to vacate her default. The Supreme Court properly denied her motion. A party seeking to vacate an order entered on his or her default must establish both a reasonable excuse for the default and a meritorious cause of action (see Matter of Jones v Stewart, 63 AD3d 836, 836; Aguilera v Pistilli Constr. & Dev. Corp., 63 AD3d 765, 768; Zherka v Zherka, 17 AD3d 668, 668). Contrary to the plaintiff’s contention, neither the fact that she was proceeding pro se, nor her belief that the defendant’s motion was frivolous and, therefore, that opposition was unnecessary, constituted a reasonable excuse for her default (see Kanat v Ochsner, 301 AD2d 456, 458). " A litigant appearing pro se acquires no greater right than any other litigant and such appearance may not be used to deprive defendants of the same rights enjoyed by other defendants’" (Roundtree v Singh, 143 AD2d 995, 996, quoting Morgan v Sylvester, 125 F Supp 380, 388, affd 220 F2d 758, cert denied 350 US 867). Accordingly, the Supreme Court providently exercised its discretion in denying the plaintiff’s motion, in effect, to vacate her default. "

 

Cohen v Engoron, 2009 Slip Op 32521 is a fascinating look at the lower end of legal malpractice litigation.  In this case, plaintiff is an incarcerated inmate who tried to sue his attorney for the return of $ 8500 in legal fees.  While being incarcerated was painful for plaintiff, his attorney suffered a worse fate, dying about three months before the summons and complaint.

Everyone in this case has a bad outcome to consider.  Plaintiff, who had the time to litigate this matter, and some significant motivation to move forward, determined that an estate existed, and successfully served the voluntary administrator.  The estate hired an attorney who had a NY address, but apparently practiced out of North Carolina. 

The attorney attempts to have the case dismissed in Supreme Court, and Justice Kapnick denies his motions, then transfers the case pursuant to CPLR 325(d).  While in Civil Court, the estate wins an appeal dismissing the case, as the death preceded the summons.  As far as the estate goes, this seems to be the end.

However, while in Civil Court, plaintiff succeeds in an order which finds that the attorney may not practice in NY since he lacks an office for the practice of law in NY.  This leads to the current Article 78 against the Civil Court Judge, which fails in this decision.

 

Topless photographs, sexual harassment, "heavy-handed" negotiations, emotional distress to highly pregnant women – it all seems to be out of a TV show.  Nevertheless, these are the elements of Abrams v. Pacile, Supreme Court, New York County, Justice Tolub.  In this decision, printed in the NYLJ today, and soon to be on the Court’s website, we see brothers in the financial industry, their workers, their wives, topless photos on the honeymoon, entrustment of the photos to assistants for printing at Duane Reede, and the fallout in dueling suits.  By the way, how could a guy send his assistant out with topless photos of his wife, and ask her to go to Duane Reede to get prints made?  Was he expecting his assistant or the clerk there to make them?  What reaction did he expect?

This blog is devoted to attorney behavior and legal malpractice, so we will detour there.

"Claims Against Mr. Wigdor and TWG

Under New York law, attorneys are afforded immunity where their conduct arises out of the professional representation of their clients.

There is a general principle embodied in the law of the State of New York that attorneys should be free to advise their clients without fear of liability [to] third parties. However, the mere fact one is an attorney acting in a professional capacity does not make him absolutely immune from responsibility for his wrongful acts.

An attorney may be held personally liable to a third party who sustains an injury in consequence of his wrongful act of improper exercise of authority, where the attorney has been guilty of fraud, collusion or of a malicious or tortious act.

Beatie v. DeLong,164 AD2d 104, 108 [1st Dept 1990].

Here, Plaintiff has not sufficiently alleged, let alone submitted any evidence, that Mr. Wigdor or his firm acted with either malice or bad faith or that they colluded with Danielle and Cristina in some illegal manner. The "settlement" negotiations of May 2008, as heavy handed as they were, provide no basis for a recovery. Indeed, there is nothing to indicate from the Plaintiff herself that she was ever aware of the letters Mr. Wigdor sent. In the absence of fraud, collusion, malice or bad faith, Mr. Wigdor and TWG are immunized from liability under the shield afforded attorneys in advising their clients, even when such advice is erroneous. The Complaint as to Mr. Wigdor and TWG is dismissed(id.)."

"Rule 1.16(a)(1) provides:

(A) A lawyer shall not accept employment of behalf of a person if the lawyer knows or reasonably should know that such person wishes to:

(1) bring a legal action, conduct a defense, or assert a position in a matter, or otherwise have steps taken for such person, merely for the purpose of harassing or maliciously injuring any person;

It is clear to the Court that the Complaint as to Ms. Culicea and Mr. Wigdor has no basis in law and fact and could only have been brought to harass Ms. Culicea and the Wigdor law firm. As such, counsel’s actions are sanctionable."

 

Dismissals are not always dismissals on the merits, and dissolved corporations are not always unable to sue in New York.  In this legal malpractice case, we see the intersection of Chapter 11, Tax Law 203-a, CPLR 205(a) and Res judicata.

In Moran Enters., Inc. v Hurst 2009 NY Slip Op 07807 ;  Decided on October 27, 2009 ;  Appellate Division, Second Department plaintiff corporation had several brushes with Bankruptcy.
"The plaintiff, Moran Enterprises, Inc. (hereinafter MEI), was incorporated in New York in January 1996. On or before August 15, 2000, MEI retained attorney Margaret Hurst to represent it in certain matters, including filing a Chapter 11 petition for bankruptcy on its behalf. In November 2000, Hurst left active practice and transferred her clients to another attorney. On December 27, 2000, MEI was dissolved by the Secretary of State pursuant to Tax Law § 203-a for failure to pay franchise taxes. On July [*2]23, 2001, MEI retained attorney Heath Berger and the law firm Steinberg, Fineo, Berger & Fischoff, P.C. (then known as Steinberg, Fineo, Berger & Barone, P.C.) (hereinafter together the Berger defendants) to file another Chapter 11 bankruptcy petition on its behalf."

"The Supreme Court erred in dismissing the complaint pursuant to CPLR 3211(a)(5). The principle of res judicata bars relitigation of claims where a judgment on the merits exists from a prior action between the same parties involving the same subject matter (see Matter of Hunter, 4 NY3d 260, 269). Dismissal of the prior action insofar as asserted by MEI was upheld by this Court on the ground that MEI failed to appear by an attorney as required by CPLR 321(a) (see Moran v Hurst, 32 AD3d 909). Such was not a determination on the merits and thus res judicata does not apply to bar commencement of another action based on the same transactions (see Sclafani v Story Book Homes, 294 AD2d 559; Matter of Farkas v New York State Dept. of Civ. Serv., 114 AD2d 563). Moreover, since the issue of MEI’s capacity to commence an action was not determined on appeal, collateral estoppel does not bar relitigation of that issue (see Tydings v Greenfield, Stein & Senior, LLP, 11 NY3d 195, 200; Sabbatini v Galati, 43 AD3d 1136; Bergstol v Town of Monroe, 305 AD2d 348). Further, this action was timely commenced pursuant to CPLR 205(a). Contrary to the Berger defendants’ contention, the prior action was commenced by MEI within the meaning of CPLR 205(a), despite its dismissal for MEI’s failure to appear by an attorney "

"Pursuant to Tax Law § 203-a, the Secretary of State may dissolve a corporation by proclamation for the nonpayment of franchise taxes. Upon dissolution, the corporation’s legal existence terminates (see Lorisa Capital Corp. v Gallo, 119 AD2d 99, 109). A dissolved corporation is prohibited from carrying on new business (see Business Corporation Law § 1005[a][1]) and does not enjoy the right to bring suit in the courts of this state, except in the limited respects specifically permitted by statute (see Vantrel Enters. v Vantage Petroleum Corp., 270 AD2d 412; De George v Yusko, 169 AD2d 865; [*3]Lorisa Capital Corp. v Gallo, 119 AD2d 99, 110-111). "

 

 

Attorneys regularly drop in and out of cases, and for the most part, there is no particular notice taken of the event.  Here, in Soussis v Lazer, Aptheker, Rosella & Yedid, P.C. ; 2009 NY Slip Op 07823 ; Decided on October 27, 2009 ; Appellate Division, Second Department  we see a wholly different result.  In Soussis,  Plaintiff hired the target defendants to arbitrate over unpaid commissions, which are said to have arisen from employment discrimination.  Target attorneys did not raise the discrimination claim.  Benjamin Vinar to sue the attorneys; at the same time he stepped in and settled the arbitration case targets had started.  In turn, target attorneys bring a third-party action against Vinar.  Vinar does not succeed on summary judgment, and is held in the case for a portion of the third party claims.

"The plaintiff retained the defendant law firm, Lazer, Aptheker, Rosella & Yedid, P.C. (hereinafter the Lazer firm), in connection with her claims for unpaid commissions and unreimbursed expenses, alleging employment discrimination against her former employer, Stephens, Inc. (hereinafter Stephens), a member of the New York Stock Exchange.""It is undisputed that Goidell failed to bring a federal or state action against Stephens on the plaintiff’s behalf before the statute of limitations applicable to the employment discrimination claim expired. The plaintiff retained the third-party defendant Benjamin Vinar to commence the instant action against the Lazer firm, Goidell, and two partners in the firm, David Lazer and Ralph A. Rosella, to recover damages for legal malpractice. While represented by Vinar, the plaintiff settled her arbitration claims against Stephens."

"Subsequently, the Lazer firm, David Lazer, and Rosella (hereinafter together the Lazer defendants) impleaded Vinar, asserting claims for contribution and/or indemnification. They alleged that [*2]Vinar was negligent in settling the plaintiff’s arbitration claims. Specifically, they alleged that Vinar was negligent in failing to seek leave to amend the plaintiff’s statement of claim in the arbitration proceeding to add the employment discrimination claim. They also alleged that Vinar was negligent in failing to seek reformation of the National Association of Securities Dealers, Inc., Form U-5 (hereinafter the U-5), provided by the plaintiff’s employer to remove an allegedly false or defamatory statement contained therein regarding the reason for the termination of her employment. "

"The Supreme Court properly denied that branch of Vinar’s motion which was for summary judgment dismissing so much of the third-party complaint as asserted claims for contribution and indemnification. Contrary to Vinar’s contention, the Lazer defendants are entitled to seek contribution or indemnification from him, as a subsequently retained attorney, to the extent his alleged negligence in settling the plaintiff’s arbitration claims may have contributed to or aggravated her injuries (see Schauer v Joyce, 54 NY2d 1, 3-6; Alfaro v Schwartz, 233 AD2d 281, 281-282; Herkrath v Gaffin & Mayo, 192 AD2d 487, 488).

Furthermore, in opposition to Vinar’s prima facie showing on the issue of his failure to seek reformation of the U-5, the plaintiff’s deposition testimony and the Lazer defendants’ expert affidavit were sufficient to raise a triable issue of fact as to whether Vinar was negligent in failing to seek reformation and, if so, whether the plaintiff suffered a greater loss of future earnings than she would have had the U-5 been reformed to remove the damaging information regarding the reason for her termination from Stephens.

 

 

 

 

Plaintiff and a buddy go to attorney to start a business.  Attorney is retained, and eventually Plaintiff is the odd-person out.  Attorney’s retainer agreement names only the buddy, and even though attorney sends letters to both Plaintiff and buddy, and creates documents which plaintiff and buddy sign, it is Buddy who comes out with 75% of the business.  Is there a breach of fiduciary duty, and if so, what is the statute of limitations, 3 years or 6?

Some answers are found in Schlissel v Subramanian ;2009 NY Slip Op 52188(U) ; Decided on October 26, 2009 ; Supreme Court, Kings County ; Demarest, J.   As to Breach of Fiduciary Duty:
 

""In order to establish a breach of fiduciary duty, a plaintiff must prove the existence of a fiduciary relationship, misconduct by the defendant, and damages that were directly caused by the defendant’s misconduct" (Kurtzman v Bergstol, 40 AD3d 588, 590 [2d Dept 2007]).

"An attorney stands in a fiduciary relation to the client" (Graubard Mollen Dannett & Horowitz v Moskovitz, 86 NY2d 112, 118 [1995]). As a fiduciary, an attorney "is charged with a high degree of undivided loyalty to his [or her] client" (Matter of Kelly v Greason, 23 NY2d 368, 375 [1968]). "In this case, plaintiff alleges that Van Epps was her attorney, that he unilaterally advanced Wasan’s interests over those of plaintiff, that he prepared certain corporate documents for the purpose of diluting and diminishing plaintiff’s interest in T & T, and that he concealed material information from plaintiff concerning the adverse contents of these documents (Stark Affirmation in support of the Cross Motion, Ex. 2, Proposed Amended Complaint, ¶¶ 46-47). In opposition, Van Epps contends that he was not plaintiff’s attorney and that, in any event, his representation of her had ended by the time she signed the corporate documents.

There is no set of rigid rules that must be followed to form an attorney-client relationship (see McLenithan v McLenithan, 273 AD2d 757, 758 [3d Dept 2000]). It may exist without an explicit retainer agreement or payment of fee (see Tropp v Lumer, 23 AD3d 550, 551 [2d Dept 2005]). "Rather, to establish an attorney-client relationship there must be an explicit undertaking to perform a specific task. In determining the existence of an attorney-client relationship, a court must look to the actions of the parties to ascertain the existence of such a relationship," (id., at 551 [internal quotation marks and citations omitted]) [*8]bearing in mind that plaintiff’s unilateral belief does not confer upon her the status of defendant’s client (see Volpe v Canfield, 237 AD2d 282, 283 [2d Dept 1997], lv denied 90 NY2d 802 [1997]). "

"Ultimately, the evidence as to the alleged existence of an attorney-client relationship between plaintiff and defendant Van Epps is inconclusive, depends on a fact-finder’s [*11]assessment of the parties’ credibility, and thus is outside the scope of the court’s review on a motion to dismiss. Assuming the truth of her affidavits, plaintiff sufficiently alleges that Van Epps represented conflicting interests at the time plaintiff signed the corporate documents (see Shumsky, 96 NY2d at 168). Plaintiff thus adequately alleges the first element of her breach of fiduciary duty claim — the existence of a fiduciary relationship. Furthermore, having alleged misconduct by defendant by his alleged simultaneous representation of adverse interests, and damages directly caused by his misconduct (Proposed Amended Complaint, ¶¶ 47-50), plaintiff adequately pleads the other two elements of her claim. Defendant’s motion seeking dismissal of the breach of a fiduciary duty cause of action pursuant to CPLR 3211(a) (7) is denied. Defendant’s motion pursuant to CPLR 3211 (a) (1) is also denied inasmuch as defendant’s affidavit and the documents attached thereto do not definitively and "conclusively establish[ ] a defense to the asserted action as a matter of law" (Leon, 84 NY2d at 88); the documentary evidence merely raises numerous issues of fact, rather than finally dispose of them (see Bernstein v Oppenheim & Co., P.C., 160 AD2d 428, 435 [1st Dept 1990]). "

"Defendant contends that plaintiff’s claims against him are in the nature of professional malpractice and, therefore, are barred by the three-year statute of limitations of CPLR 214 (6), which is applicable to legal malpractice actions. Defendant asserts that by formulating her proposed amended complaint using language such as fraud and breach of fiduciary duty, plaintiff is attempting to circumvent the three-year limitations period applicable to legal malpractice claims pursuant to CPLR 214 (6) regardless of whether the underlying theory is based in contract or tort. However, as discussed, plaintiff adequately pleads a distinct cause of action for fraud against Van Epps which goes beyond ordinary malpractice (see Simcuski v Saeli, 44 NY2d 442, 453 [1978][finding that an independent cause of action for fraud against a professional may be established when exposure to liability "is not based on errors of professional judgment, but is predicated on proof of the commission of an intentional tort, in this instance, fraud"]; see also Mitschele v Schultz, 36 AD3d 249 [1st Dept 2006]). Defendant’s malpractice argument fails, as the gravamen of plaintiff’s suit is fraud. The motion to dismiss the action is therefore denied. "

 

 

Matrimonial legal malpractice is typically all about the money – and the money is usually about equitable distribution.  Money, or having to give it to someone else drives people insane.  in this case it apparently drove the husband to solicit the murder of his wife.  Luckily, the plan fizzled, and ended in divorce and equitable distribution instead.  After settlement of the divorce case, husband sued his attorney.  He lost in summary judgment, in an instructive decision. 

In Pascarella v Goldberg, Cohn & Richter, LLP ; 2009 NY Slip Op 52193(U) ;Decided on October 23, 2009 ; Supreme Court, Kings County ; Hinds-Radix, J. we see how the court works its way through plaintiff’s claims.  "On December 15, 2003, on the eve of trial on the ancillary issues in the matrimonial action, the parties entered into a stipulation of settlement (the settlement) which was placed on the record in open court before Justice Yancey. The settlement fixed Susan’s equitable distribution award at $400,000 and required that plaintiff pay it to her in lump sum by March 1, 2004.[FN15] In connection with the settlement, plaintiff testified under oath before Justice Yancey that (1) he heard and understood the terms of the settlement as it was placed on the record; (2) he discussed its terms with his lawyer (Mr. Goldberg), had enough time [*4]to speak with his lawyer about it, and required no additional time; (3) he was satisfied with the services of his lawyer; (4) he was not forced, threatened, or coerced to enter into the settlement; (5) the terms of the settlement were acceptable to him; and (6) he promised to live by its terms.
 

"Plaintiff’s first charge of malpractice is that Goldberg was negligent in failing to seek discovery from Susan concerning her non-marital property. The court notes that plaintiff and Susan were married from July 28, 1984 until September 1, 2001, when plaintiff abandoned the marital home, and thus were together for 17 years.[FN24] Yet, plaintiff has never claimed in any of his numerous affidavits filed in this action or in the matrimonial action that Susan had any non-marital property. Nor has plaintiff submitted to the court Susan’s Statement of Proposed Disposition, which was to indicate if she had any separate property. There is not one iota of evidence that suggests that Susan had any separate property. To the contrary, the gravamen of plaintiff’s legal malpractice claim is that plaintiff overpaid Susan because he used his own separate property, and not because Susan already had too much on account of her own separate property. Without some evidence of actual, ascertainable damages flowing from Goldberg’s alleged failure to conduct discovery, this branch of plaintiff’s legal malpractice claim fails (see Luniewski, 188 AD2d at 643).

"Plaintiff’s second charge that the settlement was coerced or fair has no merit. As stated, the matrimonial action was scheduled for trial on the equitable distribution issue when the parties entered into a settlement of $400,000, which was higher than plaintiff’s counter-offer of $300,000 and lower than Susan’s initial offer of $450,000. Plaintiff took the stand where he was allocuted on the settlement. He testified that he understood the settlement, wanted to accept it, and was satisfied with Goldberg’s services as his counsel. Plaintiff’s allegations in support of his claim that the settlement was a product of coercion or duress are inherently incredible and flatly contradicted by documentary evidence, including (1) the minutes of Justice Yancey’s careful and thorough allocution of plaintiff, during which he showed no sign that he was compelled to enter into the settlement, and (2) his "Affidavit of Appearance and Adoption of Oral Stipulation," in which he acknowledged that the terms of the settlement were fully explained to and understood by him, and that he consented to its terms voluntarily and with advice of counsel (see Kinberg v Kinberg, 50 AD3d 512, 513 [1st Dept 2008]).

"As a matter of policy, cases once settled should not be readily re-litigated as to their merits before another judge, where the original party has been released and the plaintiff’s original attorney has become the defendant. "Under those circumstances, the burden must be on the plaintiff seeking such a recovery to demonstrate by evidence rather than by conclusory allegations, that he indeed suffered substantial financial loss because of misdeeds by his attorneys and not by second guessing as to their judgment" (Becker v Julien, Blitz & Schlesinger, P.C., 95 Misc 2d 64, 68 [Sup Ct, New York County 1977], modified on other grounds 66 AD2d 674 [1st Dept 1978], appeal dismissed 47 NY2d 705 and 761 [1979], lv dismissed 47 NY2d 800 [1979]). "