Matter of Blatt 2023 NY Slip Op 04120 Decided on August 2, 2023 Appellate Division, Second Department Per Curiam is both a common and unusual attorney story. It is common in that attorneys are often disbarred (or suspended) for financial wrongs, very often escrow issues where the “escrowed” monies are used by the attorney. It’s a disbarment event, but not that unusual. Independently, this is the attorney in the relatively famous Judiciary Law 487 case line.

What is unusual is that there was a (very uncommon) legal malpractice trial and verdict against the attorneys. This verdict was in 2019. Many years go by without any legal malpractice verdicts (bench or jury) at all.

“The Grievance Committee for the Ninth Judicial District served the respondent with a notice of petition dated July 22, 2020, and a verified petition dated July 16, 2020, containing 12 charges of professional misconduct, and the respondent served and filed a verified answer dated July 28, 2020. Subsequently, the Grievance Committee served and filed a statement of disputed and undisputed facts dated August 17, 2020, which the respondent did not challenge. By decision and order on motion of this Court dated June 2, 2021, the respondent was immediately suspended from the practice of law in the State of New York, pursuant to 22 NYCRR 1240.9(a)(2) and (5), and the matter was referred to the Honorable Sondra M. Miller, as Special Referee, to hear and report. A pre-hearing conference was held on July 21, 2021, and a hearing was conducted on October 19, 2021. The Special Referee filed a report dated December 20, 2021, in which she concluded that the respondent was guilty of serious misconduct and sustained the charges against the respondent. The Grievance Committee now moves to confirm the Special Referee’s report and impose such discipline upon the respondent as the Court deems just and proper. The respondent has not submitted any papers in response nor sought additional time to respond.”

“

Betz commenced an action against the respondent, and multiple successor attorneys who served the executor and/or the estate, in the Supreme Court, Westchester County, entitled Debra Betz, Administrator of the Estate of Carmelo Carbone (a/k/a Mel Carbone ) v Arnold Blatt, et al. , Index No. 58938/2011, asserting causes of action to recover damages for legal malpractice, aiding and abetting fraud, and violations of Judiciary Law § 487. Only the respondent proceeded to trial.

After a nonjury trial, in a decision and order dated April 29, 2019, the Honorable Gerald E. Loehr found, inter alia, that the respondent: (a) failed to use a written retainer agreement with the executor; (b) negligently failed to carry out his obligations as spelled out in demand letters [*3]sent to him from the beneficiaries’ counsel; (c) failed to counsel or control the executor with respect to the dissolution of CRF, Inc., thereby allowing the executor to continue to operate the corporation and generate fictitious bills and incur additional operating costs, without any oversight, solely for the executor’s benefit and the compensation of the executor’s own children; (d) negligently failed to ensure that the proceeds of the estate’s sale of its real properties were segregated into a separate estate account, despite a request by the beneficiaries that he do so, thereby enabling the executor to appropriate those monies for the executor’s own purposes; (e) overlooked the executor’s actions, even though he knew that the executor had not been properly marshaling the estate’s assets or preserving them for distribution to the beneficiaries, as well as that the executor was continuing to operate CRF, Inc., for the benefit of himself and his own children, who were being paid for fictitious services out of estate funds; (f) failed to exercise the degree of skill required of an attorney advising the estate when the executor’s own daughter was hired to perform an accounting for the estate, even though the respondent recognized that the accounting she performed “was terrible” on its face; (g) failed to properly assist in the administration of the estate and oversee the executor’s actions, thereby facilitating the executor’s self-dealing, waste, and substantial depletion of the estate; and (h) allowed the case to evolve beyond his ability to handle it on his own, without calling in a competent attorney to assist him, or moving to withdraw from the representation, while continuing to hold himself out as the estate’s attorney and to make checks payable to the executor, even though the respondent knew the executor was engaging in self-dealing. Justice Loehr also found: (i) that even after the executor’s powers were suspended, the respondent continued to assist the suspended executor and his son with preparing and filing approximately $1,137,500 in liens against certain properties to insulate them from recovery by the estate; (j) that the respondent allowed approximately $1,500,000 in proceeds from the sale of the Farm to be wired to the account of CRF, Inc., rather than depositing these proceeds into an estate account; (k) that all the foregoing was exacerbated, aided, and abetted by the respondent’s failure to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession; and (l) that the respondent’s breach of these duties was the proximate cause of the plaintiff’s damages.

Justice Loehr concluded that the respondent negligently performed his duties and breached his fiduciary duty to the estate and the beneficiaries resulting in financial damages by the depletion of the estate’s assets, tax penalties for late filing, and an increase in attorney fees charged to the estate.”

Last week we looked at Kasmin v Josephs 2023 NY Slip Op 32468(U) July 19, 2023
Supreme Court, New York County Docket Number: Index No. 152213/2020
Judge: Nancy M. Bannon for its decision on legal malpractice. The case also dismissed Judiciary Law 487 claims.

“The fourth cause of action for violation of Judiciary Law § 487 is also dismissed. Relief
under this statute “is not lightly given” (Chowaiki & Co. Fine Art, supra), and requires a
showing of “egregious conduct or a chronic and extreme pattern of behavior on the part of the defendant attorneys” that caused damages (Savitt v Greenberg Traurig, LLP, 126 AD3d 506, 507 [1st Dept. 2015]). “Allegations regarding an act of deceit or intent to deceive must be stated with particularity,” and “the claim will be dismissed if the allegations as to scienter are conclusory and factually insufficient.” Facebook, Inc. v DLA Piper LLP (US), 134 AD3d 610, 615 (1st Dept. 2015) (internal citation omitted).

Plaintiff fails to allege that defendant acted “with intent to deceive the court or any party” (Judiciary Law§ 487[1]), and her allegation that defendant “willfully engaged in self-serving dilatory tactics … designed to impede timely resolution of [the] matrimonial action with a view to [defendant’s] own gain,” is a bare legal conclusion that “is not entitled to the presumption of truth normally afforded the allegations of a complaint” (Fleyshman v Suckle & Schlesinger, PLLC, 91 AD3d 591, 593 [2d Dept. 2012]). Nor does plaintiff proffer evidence to bear out her claim. The only evidence plaintiff cites are portions of various decisions from the underlying matrimonial action admonishing defendant for filing excessive, repetitive, and unmeritorious motions. None of these decisions, though, found that defendant willfully engaged in such conduct with a view to her own gain. Nor does plaintiff point to any other evidence in the record
that tends to show such willful conduct.

To the contrary, the evidence presented tends to show that defendant zealously-perhaps over-zealously-represented plaintiff’s interests in the underlying litigation. Plaintiff testified at her deposition that she was pleased with the settlement obtained for her by defendant, had praised defendant’s efforts on her behalf, and had referred some of her friends to defendant. Plaintiff further testified that she reviewed, and did not dispute, defendant’s invoices throughout the underlying litigation; that defendant kept her apprised of the litigation, explained the strategy followed, and informed her of all motions filed on her behalf. Plaintiff further testified that she believed her ex-husband had attempted to conceal certain assets during discovery in the underlying litigation, that she wanted defendant to uncover those assets, and that defendant’s
efforts in that regard were necessary and not a waste of time. Plaintiff likewise conceded that the various motions made by defendant on her behalf were necessary and generally meritorious, notwithstanding that they were ultimately denied, including the motions and appeals filed to enforce the 2014 Settlement, which plaintiff believed to be “correct.” And, in stark contrast to the allegation that defendant’s aim was to squeeze plaintiff for excessive fees, plaintiff testified that it was defendant who, unprompted, initiated the proposal to discount her fees.”

Kasmin v Josephs 2023 NY Slip Op 32468(U) July 19, 2023 Supreme Court, New York County Docket Number: Index No. 152213/2020 Judge: Nancy M. Bannon is yet another case in the Katebi v. Fink line of cases which hold that when the client allocates to a matrimonial settlement in open court, and answers the question “are you satisfied with your attorneys services” in the positive, a legal malpractice case thereafter is doomed.

“The third cause of action, for legal malpractice, must also be dismissed. A claim for legal malpractice requires proof that defendant failed to exercise the degree of care, skill, and diligence commonly possessed and exercised by an ordinary member of the legal community; that such negligence was the proximate cause of the actual damages sustained by plaintiff; and that, but for defendant’s negligence, plaintiff would have been successful in the underlying action. Cummings v Donovan, 36 AD3d 648 (2d Dept. 2007).
Plaintiff outlines a litany of defendant’s alleged acts and omissions that she contends fell far below the level of skill and knowledge reasonably expected from an ordinary member of the legal community. Plaintiff claims, in essence, that defendant engaged in frivolous motion practice and delay tactics to generate sizable legal fees; improperly retained third parties to perform unnecessary and harmful services; failed to secure continued spousal maintenance payments to her from Paul Kasmin’ s estate; failed to advise plaintiff to obtain an appropriate financial instrument to protect her right to spousal maintenance; failed to protect plaintiffs assets from depletion by legal fees incurred in the matrimonial action; and improperly waived plaintiffs right to recover certain fees. Plaintiff asserts that, but for these alleged acts and omissions, she would have recovered more from Mr. Kasmin than she did in the underlying matrimonial action.

To be sure, a legal malpractice claim is viable, despite settlement of the underlying
action, if it is alleged that the settlement of the action was effectively compelled by the mistakes of counsel. Bernstein v Oppenheim & Co., 160 AD2d 428,430 (1st Dept. 1990). Here, however, the evidence demonstrates that plaintiff knowingly and voluntarily settled the matrimonial action after lengthy negotiations. In particular, during her allocution in connection with the 2014 Settlement, which resolved the underlying litigation with respect to spousal maintenance, plaintiff acknowledged that “the terms of the stipulation had been discussed and negotiated over a period of time”; she understood the terms of the settlement in their entirety; she believed the settlement was “fair and reasonable”; and she was satisfied with the services of her attorney. This evidence clearly contradicts plaintiffs claim. See Katebi v Fink, 51 AD3d 424, 425 (1st Dept. 2008) (affirming dismissal of legal malpractice claim based on plaintiffs allocution testimony that she knowingly and willingly entered into the settlement of the underlying matrimonial action and was satisfied with her attorney’s services).”

In a 5 year old case, a default judgment was granted and upheld on a motion to reargue/renew. Walker v Simmsparris 2023 NY Slip Op 32491(U) July 7, 2023
Supreme Court, Kings County Docket Number: Index No. 506589/2018 Judge: Richard J. Montelione seems to be a case where the attorneys do not have insurance coverage nor insurance defense, and appeal to be pro-se.

“This is an action, inter alia, for legal malpractice regarding the alleged failure of
defendants Michele Simmsparris and Kwesi Simmsparris (“moving defendants” or “defendants”) to answer a complaint on behalf of the plaintiff in an unrelated matter and to take other actions to , protect the interest of the plaintiff which was commenced by filing the summons and complaint on April 2, 2018. The Plaintiff previously moved for default judgment against defendants, Michele Simmsparris and Kwesi Simmsparris, by motion filed on June 25, 2018, but this motion was held in abeyance pending the determination of the traverse hearing. The court referred the issue of proper service to a Referee for a traverse hearing by order dated December 6, 2018 regarding defendants Michele Simmsparris and K wesi Simmsparris. The Referee by decision
dated July 9, 2019 recommended that the traverse be overruled as proper service was effectuated upon the defendants Michele Simmsparris and Kwesi Simmsparris. The Notice of Entry of the Referee’s decision was served by “Notice of Entry” on July 16, 2019 (the Referee’s Report is not a court order and therefore a Notice of Entry was unnecessary).”

“All other issues have all been addressed in the court’s prior order. Defendants now move to vacate their default under CPLR 317 and extend their time to answer under CPLR 2004. However, defendants fail to inform the court as to when they received notice of the summons and complaint which would show that they did not have adequate time in which to defend the action and this failure is fatal to their application to vacate their judgment under CPLR 317. See 259 Milford, LLC v FV-1, Inc., 211 AD3d 658,661, 179 NYS3d 707, 710, 2022 NY Slip Op 06898, 2, 2022 WL 17480676 [2d Dept 2022]:”

In Thacker v Constantine Cannon, LLP 2023 NY Slip Op 32376(U) July 14, 2023
Supreme Court, New York County Docket Number: Index No. 155930/2018
Judge: James d’Auguste it is too early for the court to decide who did what.

Plaintiff was locked out in a landlord-tenant dispute. She hired third-party defendants and then hired defendants, and all together it is not yet determined who did what. What is clear is that third-party defendants now represent plaintiff against defendants.

” In December 2014, plaintiff retained third-party defendants to represent her in an illegal eviction action against her former landlord. In January 2015, Constantine Cannon began representing plaintiff pro bona through the Volunteer Lawyer for the Arts program with third party defendants Jarvis and Maher serving as “legal consultants.” Specifically, Constantine Cannon’s retainer agreement with plaintiff states “[Constantine Cannon] agrees to retain Ms. Jarvis and Mr. Maher as legal consultants for the purpose of advising it in this matter, and to share any attorney’s fees with them per the terms of this agreement.” (Ex. C to Third-Party Summons and Complaint, NYSCEF Doc. No. 203). As a result, plaintiff allegedly terminated her previous retainer agreement with third-party defendants.

Constantine Cannon apparently failed to properly serve plaintiff’s former landlord, and,
following a Traverse Hearing on August 11, 2015, the court dismissed plaintiff’s action.
Plaintiff appealed, and the Second Department affirmed dismissal of the underlying action. On June 25, 2018, plaintiff (who is represented in the current action by third-party defendants) commenced a legal malpractice and breach of contract action against Constantine Cannon for failure to effect proper service of the summons and complaint in the illegal eviction action. On February 9, 2022, Constantine Cannon filed a third-party summons and complaint, alleging common law indemnification and contribution against third-party defendants in the underlying legal malpractice action. Constantine Cannon alleges that Jarvis and Maher were substantially involved in the representation for the illegal eviction action, including providing address information for the former landlord and directing motion/appellate strategy, therefore, Constantine Cannon is entitled to seek indemnification and contribution against them. Notably, there is no dispute that Jarvis and Maher were communicating with Constantine Cannon about
plaintiff’s illegal eviction action. Instead, they argue that their involvement was limited, and, therefore, their participation would not expose them to liability for contribution or
indemnification. “[I]t is well-settled that an attorney sued for malpractice may bring a third-party complaint seeking indemnity or contribution against an attorney, whether retained subsequently, concurrently, or independently, whose negligence has contributed to or aggravated the plaintiffs damages” Bolton v Weil, Gotshal & Manges LLP, 9 Misc 3d 1105(A) [Sup Ct 2005] (internal citations omitted). Moreover, “First Department held that allegations in a third-party complaint that ‘third-party defendant attorneys directed the legal handling of matters in which third-party plaintiff law firm represented defendants, and, accordingly, shared responsibility for any loss defendants may have incurred in those matters by reason of legal malpractice, sufficiently stated
a cause of action for contribution”‘ id. at 3, (citing Patterson, Belknap, Webb & Tyler LLP v Bond St. Assoc., Ltd., 266 AD2d 125, 125 [1st Dept 1999]; see also Schauer v Joyce, 54 NY2d 1, 6 [1981] [holding that allegation that another attorney “contributed to or aggravated [plaintiffs] injuries” sufficiently stated contribution claim]. As discussed in a previous order of this Court (Ling-Cohan, J.) dated October 7, 2019, third-party defendants’ status during this representation is unclear; the parties have not performed sufficient factual development to determine if Maher and Jarvis assisted Constantine Cannon as “co-counsel, … legal consultant[s], or out of professional courtesy.” (Decision and Order, NYSCEF Doc. No. 70). 1 Third-party defendants have not shown that, even if they served as legal consultants or merely out of professional courtesy, Constantine Cannon could not seek indemnification and contribution against them in a legal malpractice action. Discovery is ongoing, and third-party defendants have not sufficiently demonstrated that they are free from negligence to warrant
dismissal of the two causes of action at this juncture.”

Five Towns Pediatrics, P.C. v Billet, Feit & Preis, P.C. 2023 NY Slip Op 32328(U) July 12, 2023 Supreme Court, New York County Docket Number: Index No. 157252/2018
Judge: Andrea Masley is the story of a limited retainer agreement often used by accounting firms. Here, the retainer agreement stated “the scope of
the engagement: prepare tax returns and compilations.” Claims outside of that scope were dismissed.

“This motion is granted, in part. Plaintiff and MWE entered into four engagement
letters in September 2015, January 2016, September 2016, and April 2017. (NYSCEF
102-104, Engagement Letters.) The engagement letters clearly document the scope of
the engagement: prepare tax returns and compilations. (Id.) There is no ambiguity and
plaintiff cannot create one. ( Universal Am. Corp. v National Union Fire Ins. Co. of
Pittsburgh, PA., 25 NY3d 675, 680 [2015] [citation omitted] [“[P]arties cannot create
ambiguity from whole cloth where none exists, because provisions ‘are not ambiguous
merely because the parties interpret them differently.”‘].)

Plaintiff’s attempt to expand the services to be provided based on its “know your
client” theory is barred by the parol evidence rule. “Parol evidence-evidence outside
the four corners of the document-is admissible only if a court finds an ambiguity in the
contract. As a general rule, extrinsic evidence is inadmissible to alter or add a provision
to a written agreement.” (Schron v Troutman Sanders LLP, 20 NY3d 430, 436 [2013];
see also W.W. W. Assocs. v Giancontieri, 77 NY2d 157, 163 [1990] [ citation omitted] [” It
is well settled that ‘extrinsic and parol evidence is not admissible to create an ambiguity
in a written agreement which is complete and clear and unambiguous upon its face.”‘].)
Here, the engagement letters are unambiguous.

MWE was not engaged to perform an audit or forensic accounting or any other
services to determine why plaintiff’s owners were not taking home more money as
plaintiff suggests. The engagement letters make clear that, in providing tax preparation

services, MWE would rely on the documents provided by the plaintiff and would not
audit or verify accuracy of these documents. ( See NYSCEF 101, 103, 104, September
2015 and 2016 and April 2017 Engagement Letters [“As part of our compilation
engagement, we will issue a report that will state that we did not audit or review the
financial statements nor were we required to perform any procedures to verify the
accuracy or completeness of the information provided by management and accordingly, we do not express an opinion, a conclusion, nor provide any assurance on them”]; NYSCEF 102, January 2016 Engagement Letter [“We will not audit or independently verify the data you submit”].) “[A]n accountant and client may contractually agree that the accountant is not to perform certain services, thereby absolving the accountant of liability for not performing them.” (Channel Fabrics, Inc. v Skwiersky, Alpert & Bressler LLP, 2022 NY Misc LEXIS 8980, *4 [Sup Ct, NY County 2022] [citation omitted].)

Further, the court will not permit plaintiff to expand the scope of the engagement
letters based on MWE’s initial proposal when it was pitching its services. (See NYSCEF
100, Proposal.) The engagement letters constitute the parties’ agreement not the initial
proposal. Plaintiff’s belief that MWE was providing consulting and investigatory services
as to why the doctors were not making more money does not make it so and certainly
plaintiff’s belief does not alter the parties’ agreement. While MWE may have been
plaintiff’s company accountant, per the terms of the agreements, it did not agree to be
an auditor or investigator.”

126 Main St., LLC v Kriegsman 2023 NY Slip Op 03758 Decided on July 12, 2023
Appellate Division, Second Department is a case where the Appellate Division took a look at the same materials presented to Supreme Court and simply reached a contrary view that the evidence of lost profits, alleged in the complaint and defended on a CPLR 3211 motion was simply not enough.

“ORDERED that the order is reversed, on the law, with costs, and the defendants’ motion pursuant to CPLR 3211(a) to dismiss the complaint is granted.

In March 2018, the plaintiff commenced this action to recover damages for legal malpractice arising out of the defendants’ prior legal representation of it in connection with a purchase agreement of the plaintiff’s restaurant business. The defendants moved pursuant to CPLR 3211(a) to dismiss the complaint on the ground, inter alia, that the complaint failed to state a cause of action. The plaintiff opposed the motion. In an order dated May 13, 2020, the Supreme Court denied the defendants’ motion. The defendants appeal.”

“”‘Conclusory allegations of damages or injuries predicated on speculation cannot suffice for a malpractice action, and dismissal is warranted where the allegations in the complaint are merely conclusory and speculative'” (Denisco v Uysal, 195 AD3d 989, 991, quoting Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 848; see York v Frank, 209 AD3d 804, 807). Here, the plaintiff failed to state a cause of action to recover damages for legal malpractice because the plaintiff’s allegation that the restaurant would have had increased profits but for the defendants’ alleged malpractice is [*2]conclusory and speculative (see York v Frank, 209 AD3d at 807; Denisco v Uysal, 195 AD3d at 991).”

All the non-tax liability claims in Treanor v Dimopoulos 2023 NY Slip Op 32260(U)
July 5, 2023 Supreme Court, New York County Docket Number: Index No. 159106/2022
Judge: Mary V. Rosado are dismissed. Claims that advice on how to pay certain awards caused unnecessary tax liability survive.

“Plaintiff alleges that Defendants did not disclose to Plaintiff their “intimate relationship” with Dr. Abrams or purported allegiance to him (id. at 126). Plaintiff alleges that she met with Dr. Abrams four times and that he asked inappropriate questions about sexual acts3 (id. at 1, 27-29). “On or about October 2018 (sic)” Dr. Abrams issued a report where he concluded that both parents had loving relationship with their children, and that access should be equal, and that the current schedule should remain in place (id. at~ 33). Despite this outcome, Plaintiff alleges Dr. Abrams “punished” her in the report due to Plaintiffs objection to Dr. Abrams’ “sexual inquiries” by stating that Plaintiff “was not as intelligent as Adam, and that Adam provided a little more for the
children’s needs than Plaintiff’ (id. at, 34).

Plaintiff alleges that on December 20, 2018, the matrimonial court issued an order deeming her the monied spouse based on imputed income and its failure to impute income to Adam, resulting in Plaintiffs obligations to pay child support and amounts to maintain the marital residence (id. at, 35).”

“The breach of contract and breach of fiduciary duty claims are dismissed as duplicative of the legal malpractice cause of action. As to the breach of contract cause of action, the case of Walter v Castrataro is instructive (94 AD3d 872 [2d Dept 2012]). In that case, the Second Department found that a plaintiffs breach of contract claim who alleged that her former attorney failed to file an application for pendente lite support, failed to move to vacate a forensic report, and failed to modify a stipulation was nothing more than a rephrasing of a legal malpractice claim The breach of contract and breach of fiduciary duty claims are dismissed as duplicative of the legal malpractice cause of action. As to the breach of contract cause of action, the case of Walter v Castrataro is instructive (94 AD3d 872 [2d Dept 2012]). In that case, the Second Department found that a plaintiffs breach of contract claim who alleged that her former attorney failed to file an application for pendente lite support, failed to move to vacate a forensic report,
and failed to modify a stipulation was nothing more than a rephrasing of a legal malpractice claim (id. at 873). Moreover, there are no allegations related to breaching a promise to acehive a specific result, but only allegations about breaches of vague and non-specific (and somewhat boilerplate) provisions of the retainer agreement (see Mamoon v Dot Net Inc., 135 AD3d 656 [1st Dept 2016] citing Sage Realty Corp. v Proskauer Rose, 251 AD2d 3 5, 3 9 [1st Dept 1998] [ dismissing breach of contract claim as duplicative of legal malpractice claim where there were no allegations about a breach of a promise to achieve a specific result]; see also Alphas v Smith, 147 AD3d 557 [1st Dept 2017]). Thus, the breach of contract cause of action is dismissed.”

” Finally, there is no actionable malpractice from Defendants’ motion seeking to withdraw as counsel due to their fundamental disagreements with Plaintiff over the strategy to move forward in the underlying matrimonial action. Indeed, the Rules of Professional conduct explicitly states that a lawyer may withdraw from representing a client if the client “insists upon taking action with which the lawyer has a fundamental disagreement” (Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.16[ c] [ 4]) or if the client “renders the representation unreasonably difficult for the lawyer to carry out employment effectively” (Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.16[ c] [7]).

However, Plaintiff’s allegation that the Defendants “provided improper advice as to the payment of certain amounts required under the pendente lite order, which caused Ms. Treanor to incur substantial tax liability” survives (see NYSCEF Doc. 4 at , 124). Accepting the factual allegations as true, as this Court must on a pre-answer motion to dismiss, failure to advise a client on the tax consequences of withdrawing money from retirement accounts in a divorce action states a claim for legal malpractice for purposes of a pre-answer motion to dismiss (Fielding v Kupferman, 65 AD3d 437 [1st Dept 2009]).”