Babad v Oratz 2025 NY Slip Op 05490 Decided on October 8, 2025 Appellate Division, Second Department is short and to the point. New evidence, obtained after dismissal of the prior case cannot support collateral estoppel.

“In June 2023, the plaintiff commenced this action to recover damages for fraud, aiding and abetting fraud, and violation of Judiciary Law § 487. The defendants moved pursuant to CPLR 3211(a) to dismiss the complaint. In an order dated December 14, 2023, the Supreme Court granted the motion on the ground that the action was barred by the doctrines of collateral estoppel and res judicata.

“Pursuant to CPLR 3211(a)(5), a party may move to dismiss a [complaint] based on the doctrine of res judicata or collateral estoppel” (Joseph v Bank of N.Y. Mellon, 219 AD3d 596, 597). “Under the doctrine of res judicata, a disposition on the merits bars litigation between the same parties or those in privity with them of a cause of action arising out of the same transaction or series of transactions as a cause of action that either was raised or could have been raised in the prior proceeding” (Goldstein v Massachusetts Mut. Life Ins. Co., 32 AD3d 821, 821; see Paramount Pictures Corp. v Allianz Risk Transfer AG, 31 NY3d 64, 72-73). The doctrine of collateral estoppel “precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same” (Ryan v New York Tel. Co., 62 NY2d 494, 500; see Matter of A. Ottavino Prop. Corp. v Incorporated Vil. of Westbury, 203 AD3d 920, 921). “The party seeking the benefit of collateral estoppel bears the burden of proving that the identical issue was necessarily decided in the prior action and is decisive of the present action, and the party against whom preclusion is sought bears the burden of demonstrating the absence of a full and fair opportunity to contest the prior determination” (Fowler v Indymac Bank, FSB, 176 AD3d 682, 684 [alteration and internal quotation marks omitted]; see Matter of Dunn, 24 NY3d 699, 704).

Here, contrary to the determinations of the Supreme Court, the issues raised in the instant action were not decided and could not have been raised in a prior action to which the plaintiff was a party. Accepting the facts as alleged in the complaint as true (see Leon v Martinez, 84 NY2d 83, 87), the evidence on which the plaintiff relies was discovered subsequent to entry of a judgment in the prior action (see Altman v Orseck, 235 AD3d 818, 819; Specialized Indus. Servs. Corp. v Carter, 68 AD3d 750, 752). Accordingly, neither res judicata nor collateral estoppel bars the plaintiff from litigating the instant action against the defendants.”

Balestriere PLLC v Ray 2025 NY Slip Op 34005(U) October 15, 2025 Supreme Court, New York County Docket Number: Index No. 154425/2023 Judge: Mary V. Rosado is a multiple attorney v. client fee and Judiciary Law 487 claim which was dismissed this month. We wonder whether Urias v. Daniel P. Buttafuoco & Associates, 41 N.Y.3d 560, 568 (2024) was considered?

“Plaintiff is a law firm that formerly represented Ray in a litany of lawsuits against Ray’s ex-wife. As alleged in the Complaint, Ray retained Plaintiff on October 3, 2010, and Plaintiff continued to represent Ray until January 2016. As a result of that litigation, a judge issued sanctions in favor of Ray’s ex-wife and against Plaintiff. Plaintiff settled the sanctions order against it. Ray fired Plaintiff, retained another firm, and appealed the sanctions order, which the First Department reversed. As Plaintiff no longer represented Ray, Plaintiff issued a final invoice, which Ray allegedly refused to pay.”

“After a jury trial, the jury returned a verdict in favor of Plaintiff on Ray’s unpaid legal fees and dismissed all of Ray’s claims against Plaintiff. Ray appealed to the Second Circuit, which affirmed the jury’s findings (see Ray v Fariello, 2024 WL 390293 [2d Cir 2024]). During the pendency of the appeal before the Second Circuit, Plaintiff sued Defendants in New York State Court for malicious prosecution, tortious interference with prospective business relations, and Judiciary Law § 487. Defendants move to dismiss and seek the imposition of sanctions. Defendants’ motion is granted in part and denied in part.”

“Plaintiffs Judiciary Law§ 487 claim is dismissed. It is well established that a violation of Judiciary Law § 487 does not give rise to a separate plenary action but must be brought in the action where the alleged deceit or misconduct in violation of the statute occurred, in this case, in the Southern District of New York (see Chibcha Restaurant, Inc. v David A. Kaminsky & Associates, P.C., 102 AD3d 544, 545 [1st Dept 2013] quoting Yalkowsky v Century Apartments Associates, 215 AD2d 214 [1st Dept 1995]; see also Menitzky v Owen, 19 AD3d 201 [1st Dept 2005]). Plaintiff likewise could have sought sanctions against Defendants in the underlying action for what it deemed to be inappropriate or deceitful comments made during closings. Therefore, this branch of Defendants’ motion is granted.”

From Urias: “[1] We conclude, however, that section 487 authorizes a plenary action for attorney deceit under these circumstances. The text of the statute allows recovery of treble damages “in a civil action” where “[a]n attorney . . . [i]s guilty of any deceit or collusion . . . with intent to deceive the court or any party” (Judiciary Law § 487). The phrase “in a civil action” is most naturally read to include a plenary action. Notably, the provision does not differentiate between an action that might undermine or undo a final judgment and one that does not, or between allegations of fraud that are intrinsic to the underlying action, as opposed to extrinsic. Interpreting the statute to permit a plenary action where the remedy would not entail undermining a final judgment (for example, when the deceit harms a prevailing party), but deny one where a final judgment could be impaired, would require us to rewrite the statute. That we cannot do.”

Jfurti, LLC v Mintz, Levin, Cohn, Ferris, Glovky & Popeo, P.C. 2025 NY Slip Op 33977(U) October 15, 2025 Supreme Court, New York County Docket Number: Index No. 155965/2024 Judge: Anar R. Patel is the story of a $ 38 Million judgment which just faded away.

“Jfurti is a Delaware limited liability company whose sole member is nonparty Jacob
Frydman (“Frydman”). Ledgerock is a New York limited liability company of which Frydman is also the sole member. Ledgerock was the owner of a certain residential property located in Hyde Park, New York (“Ledgerock Property”) that was Frydman’s personal residence (NYSCEF Doc. No. 56, Exhibit F). Defendant is a law firm that represented Jfurti in an action to enforce a $16 million promissory note captioned as JFURTI, LLC v Suneet Singal, et al., NY County Index No. 656273/2016 (“Collection Action”) (NYSCEF Doc. No. 28, “Am. Compl.” ¶¶ 37, 39). Jfurti prevailed in the Collection Action and, in December 2017, obtained a judgment against Suneet Singal (“Singal”) and 13 entities controlled by him (collectively “Judgment Debtors”), in the amount of $21,221,676.53, which Plaintiffs claim is now worth more than $38.7 million after
interest (“the Judgment”) (Am. Compl. ¶ 1).

On February 23, 2018, Jfurti and Frydman entered into an amended engagement agreement with Defendant (NYSCEF Doc. No. 57, “Amended Engagement”). In relevant part, the Amended Engagement provided that Defendant would represent Jfurti in the collection of the Judgment, in exchange for which Defendant would receive a portion of the recovery (Amended Engagement at 2). The Amended Engagement specified that the scope of Defendant’s engagement did not extend to affiliates of Jfurti (Amended Engagement, Engagement Memorandum at 1). Nonparty Christopher Sullivan (“Sullivan”), then a partner at Defendant, was the lead attorney representing
Jfurti in the Collection Action and subsequent Judgment enforcement actions until May 2022, at which time he changed firms.”

“On April 19, 2019, Plaintiffs and Frydman executed a Funding and Investment Agreement with nonparty Curiam Investments 2 LLC (“Curiam”), a litigation finance provider (NYSCEF Doc. No. 58, “Funding Agreement”). Frydman signed the Funding Agreement on behalf of himself, Jfurti, and Ledgerock, under a heading that reads “ACCEPTED AND AGREED,” along with Curiam’s representative. Sullivan also signed the Funding Agreement on behalf of Defendant, under a separate heading that read “Acknowledged and Agreed.” Plaintiffs claim that Defendant was party to the Funding Agreement, which Defendant denies. The Funding Agreement’s preamble defines its “Parties” as Curiam “together with Judgment Creditor [Jfurti], Ledgerock and Frydman” (Funding Agreement, Preamble).

Pursuant to the Funding Agreement, Curiam made a $6 million upfront payment to Jfurti in exchange for purchasing an approximately 25% interest in the Judgment (Am. Compl. ¶¶ 3–4; Funding Agreement § II.A). Jfurti was responsible for reimbursing Curiam for the $6 million “Investment Amount” and for payment of an additional “Funder Return” out of its share of the collections on the Judgment (Funding Agreement §§ I.R., III.A; Appendix 3 § 3). Frydman and Ledgerock both executed guarantees concurrently with the Funding Agreement. Ledgerock also executed a mortgage for the Ledgerock Property with Curiam as collateral for Jfurti’s repayment obligations (Funding Agreement, Exhibit D, “Curiam Mortgage”). The Curiam Mortgage gave Curiam the option to foreclose on the Ledgerock Property in the event of a default (id. § 7.03).
The Funding Agreement provided that Curiam’s failure to receive “on or prior to the fifth (5th) anniversary of the date hereof . . . an amount equal to the Investment Amount plus the Funder Return” would constitute a default (Funding Agreement § VI.C). Plaintiffs allege that Defendant persuaded them to enter the Funding Agreement after Sullivan oversaw a due diligence investigation that found there was “no reason why it would not be able to collect at least the amount needed to re-pay Curiam and the Repayment Obligation” within five years and to release the collateral (id. ¶¶ 7–9).
Plaintiffs maintain that Defendant “did an admirable job pursuing enforcement of the
Judgment” in the two years after entering the Funding Agreement, with Sullivan overseeing these efforts (id. ¶ 14). Defendant domesticated the Judgment in multiple jurisdictions and commenced enforcement and collection proceedings (id. ¶ 15). Defendant allegedly identified executable assets including a bank account with approximately $220,000, two luxury vehicles, a $25 million note due to the Judgment Debtors, and 89 million shares of stock in a publicly traded company, PhotoMedix (id. ¶ 16). Sullivan allegedly caused the PhotoMedix shares, worth approximately $20 million at the time, to be seized by the New York Marshal (id. ¶¶ 16–17). The shares were
not subsequently sold.

In May 2022, Sullivan departed Defendant and began working at a different law firm,
Nutter McClennen & Fish LLP (“Nutter”) (Am. Compl. ¶ 18; NYSCEF Doc. No. 56 Exhibit C ¶ 6). The parties dispute whether Defendant remained counsel for Jfurti in the Judgment enforcement matters. Plaintiffs allege Defendant continued its epresentation of them until January 17, 2024 (Am. Compl. ¶ 74). Defendant claims that Frydman authorized it to transfer its files for the Jfurti matters to Sullivan at Nutter, producing a Client File Transfer Request Form dated May 23, 2022 (NYSCEF Doc. No. 56 Exhibit C, “Transfer Request Form”). Plaintiffs dispute the authenticity of the Transfer Request Form and claim that Frydman never signed such a document (Am. Compl. ¶ 68). Defendant’s Information Governance department e-mailed Nutter on June 30,
2022 with an embedded link for the files related to the Jfurti matter (NYSCEF Doc. No. 59 at 5–6, 35–36). However, none of the parties produce any communications between Plaintiffs, Frydman, Defendant, and Sullivan about Sullivan’s move or the putative transfer of the Judgment matters.”

“”A plaintiff states a cause of action for legal malpractice where it alleges facts “that, if
proven at trial, would demonstrate that the attorney ‘failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the attorney’s breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages’ (Kaplan v Conway & Conway, 173 AD3d 452, 452 [1st Dept 2019], quoting Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]). “An attorney’s conduct or inaction is the proximate cause of a plaintiff’s damages if but for the attorney’s negligence” the plaintiff “would not have sustained actual and ascertainable damages” (Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 50 [2015], rearg denied 27 NY3d 957 [2016] [internal quotation marks and citations omitted]). It is well-established that “absent an attorney client relationship, a cause of action for legal malpractice cannot be stated” (Federal Ins. Co. v North Am. Specialty Ins. Co., 47 AD3d 52, 59 [1st Dept 2007]; see also Volpe v Munoz & Assoc., LLC, 190 AD3d 661, 662 [1st Dept 2021]).”

“The Court finds that Defendant’s documentary evidence does not conclusively establish that it terminated its attorney-client relationship with Jfurti at the time of Sullivan’s departure from the firm in May 2022. The authenticity of the Transfer Request Form is disputed and that document is therefore not credited (see VXI Lux Holdco S.A.R.L., 171 AD3d at 193). Defendant’s internal e-mails and communications with Nutter also do not establish when, if ever, it communicated its intent to terminate its representation of Jfurti and transfer the matter to Nutter. The Court also finds that Defendant does not submit documentation showing when, if ever, Nutter
assumed representation of Jfurti in the Judgment enforcement matters.”

More on this decision in the next blog article.

Peck v Milbank LLP 2025 NY Slip Op 05895 Decided on October 23, 2025
Appellate Division, First Department is an odd judiciary Law 487 case, with overlapping issues of deceit and conflict of interest in a trust setting.

“The cause of action for violation of Judiciary Law § 487 fails to allege any cognizable acts of deception. Plaintiffs alleged that defendants’ commencement and pursuit of enforcement litigation on certain notes was knowingly false and misleading insofar as defendants knew that the enforcement litigation was contrary to the decedent noteholder’s estate plan. Even if defendants indirectly controlled the note litigation, the alleged misconduct — pursuing litigation in (possible) violation of the terms of a trust — is not the type of intentional misrepresentation addressed by Judiciary Law § 487. As this Court has previously recognized, it is not clear what the trust provision means or whether it was even operative before probate of the will (see Matter of Peck, 191 AD3d 537, 537 [1st Dept 2021]). Even if the individual defendant, attorney Georgiana J. Slade, Esq., at some point subjectively believed that the trust provision barred enforcement of the notes, she was entitled to change her mind or to press a different, also-reasonable interpretation in zealously advocating for her client, even if that interpretation might ultimately be found to be without merit (see Bill Birds, Inc. v Stein Law Firm, P.C., 35 NY3d 173, 180 [2020]; Kaufman v Moritt Hock & Hamroff, LLP, 192 AD3d 1092, 1093 [2d Dept 2021]; see also Alliance Network, LLC v Sidley Austin LLP, 43 Misc 3d 848, 860 [Sup Ct, NY County 2014]).

Plaintiffs separately allege that defendants improperly represented the decedent and his estate despite the existence of undisclosed conflicts of interest. Insofar as defendants never represented the decedent in litigation, “there was no court or party to be deceived within the meaning of the statute” with respect to this representation (see Bill Birds, 35 NY3d at 178-179; see also Doscher v Manatt, Phelps & Phillips, LLP, 148 AD3d 523, 524 [1st Dept 2017]). Although defendants did represent the decedent’s estate in court, no qualifying conflict of interest has been alleged (see generally Rules of Professional Conduct [22 NYCRR] § 1200.0, Rule 1.7[a]). Plaintiffs alleged that Slade’s father shared financial interests with the decedent and harbored personal animosity toward plaintiff, but plaintiffs did not allege that Slade shared her father’s negative feelings or that she knew she stood to inherit the shared investments, even if she was aware that they existed. Nor have plaintiffs explained how having such a shared financial interest would adversely affect Slade’s professional judgment in the context of the note or probate litigation (see Power Play 1 LLC v Norfolk Tide Baseball Club, LLC, 2017 WL 5312193, 2017 US Dist LEXIS 187365, *8-10, *3-4 [SD NY Nov. 13, 2017, 17cv4831]).

Plaintiffs additionally alleged that Slade misrepresented in an affidavit filed in the note litigation that the decedent’s estate plan did not bar enforcement of the notes. But for the reasons explained above, this reading of the trust provision was not unreasonable, even if it conflicted with Slade’s own prior subjective understanding of this provision. That Slade claimed to have a different recollection of the substance of a phone call also does not suggest any intentional misrepresentation.

Plaintiffs also alleged that Slade misrepresented in her depositions in the note litigation and probate proceeding that she was not aware during the decedent’s lifetime of her father’s co-investment in property with him. Insofar as the second deposition was taken after defendants formally withdrew as counsel, it is outside the purview of Judiciary Law § 487 (see Altman v DiPreta, 204 AD3d 965, 968-969 [2d Dept 2022], lv denied 38 NY3d 913 [2022]; Manhattan Sports Rests. of Am., LLC v Lieu, 137 AD3d 504, 505 [1st Dept 2016]). The statements in the first deposition — that Slade “had no specific recollection” of having any contemporaneous knowledge of such co-investments — were not inconsistent with the existence of two footnotes referencing the co-investments in a much longer memorandum drafted over ten years earlier.”

Will B. Sandler Disclaimer Trust v Swersky 2025 NY Slip Op 05909 Decided on October 23, 2025 Appellate Division, First Department is a unique legal malpractice case brought, unsuccessfully, against a non-attorney.

“Nonparty Will B. Sandler was an attorney who entered into a number of business ventures with defendant David M. Swersky over the course of approximately 30 years. In addition to being a co-investor in the ventures, Sandler typically acted as counsel, negotiating and drafting the deal documents. Swersky typically acted as the sole manager and controlling partner of the joint venture. Sandler and Swersky formed defendant S&S 34 Investors LLC as a vehicle through which they would invest in Manhattan real estate. According to the complaint, Sandler received an 8.518% interest in S&S. In 2014, Swersky and Sandler invested in an entity that held an interest in real property located at 460 West 34th Street (2014 transaction).

Sandler died in 2015 and, upon his death, his wife, plaintiff Muriel Sandler, rejected the bequest of Sandler’s interest in S&S, which then passed to plaintiff Will B. Sandler Disclaimer Trust. Muriel is the sole beneficiary of the Trust and she and her two children are its Trustees.

Plaintiffs commenced this action alleging that defendants improperly withheld from plaintiffs $3.5 million in proceeds from Sandler’s interest in S&S and actively concealed this from plaintiffs. Defendants asserted a counterclaim for rescission against plaintiffs, alleging that the 2014 transaction was the product of Sandler’s breach of the New York Rules of Professional Conduct or, alternatively, a breach of Sandler’s fiduciary duty as Swersky’s attorney. Defendants also asserted a counterclaim for legal malpractice against plaintiffs, alleging that Sandler committed legal malpractice through his various errors and intentional acts surrounding the 2014 transaction.

Supreme Court properly granted plaintiffs’ motion to dismiss the counterclaims for failure to state a cause of action as against plaintiffs because plaintiffs are not the proper parties to the counterclaims. Despite being labelled as a claim for rescission, the first counterclaim asserts a claim against plaintiffs for Sandler’s alleged breach of his ethical and fiduciary duty to defendants. This counterclaim is based only on the alleged conduct of Sandler and not on the conduct of plaintiffs. Accordingly, there is no basis to assert the counterclaim against plaintiffs, who did not owe an ethical or fiduciary duty to defendants.”

Belair & Evans LLP v Rizzo 2025 NY Slip Op 33804(U) October 2, 2025 Supreme Court, New York County Docket Number: Index No. 654131/2015 Judge: Judy H. Kim has not worked out well for the doctor-client. Faced with an OPMC inquiry, he retained Plaintiff law firm, which worked out a settlement. Faced with the law firm’s suit for fees, the doctor-client counterclaimed for legal malpractice. Faced with the Court’s order to show cause, the doctor-client’s legal malpractice claims were dismissed. It’s been downhill from there for the client.

“In this action, plaintiff alleges that defendant failed to pay legal fees for plaintiff’s
representation of defendant in connection with defendant’s investigation and prosecution by the New York State Department of Health and its Office of Professional Medical Conduct (“OPMC”),and asserts claims for: (1) breach of contract; (2) account stated; (3) quantum meruit; and (4) unjust enrichment. Notably, this prosecution concluded with defendant signing a consent agreement with OPMC.
Defendant answered and asserted counterclaims sounding in legal malpractice, breach of
contract, unjust enrichment, fraud, and violation of Judiciary Law §487 (NYSCEF Doc No. 8,
answer). Defendant alleged that plaintiff: negligently failed to obtain certain medical records or procure an independent medical expert review to use in defending against OPMC’s prosecution; improperly spoke with defendant’s superiors without authorization (and prevailed upon them to pressure defendant to sign the consent agreement with OPMC); and failed to properly advise defendant of the consequences of signing that consent agreement (NYSCEF Doc No. 8, answer at 38-41).
In an order dated March 29, 2021, the Court (Hon. Frank P. Nervo) directed the parties to
show cause as to why the legal malpractice counterclaim should not be dismissed (NYSCEF Doc No. 352). After briefing on this issue, Justice Nervo granted the motion and dismissed all of defendant’s counterclaims…”

“On appeal, this decision was modified to reinstate those counterclaims other than the legal malpractice claim. Specifically, the Appellate Division, First Department concluded that: Dismissal of the legal malpractice counterclaim was warranted because defendant
failed to adequately plead proximate causation (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]; Leon v Martinez, 84 NY2d 83, 87-88 [1994]). The answer did not specifically allege, and the allegations therein, read in the light most favorable to defendant, did not give rise to an inference, that but for plaintiff’s negligence, defendant would have proceeded to a hearing and prevailed in the underlying OPMC matter, or he would have achieved a more favorable settlement. Since the court’s motion to dismiss was directed only at the legal malpractice counterclaim, the court should not have dismissed the remaining counterclaims.”

“Plaintiff now moves, pursuant to CPLR 3211, to dismiss the remaining counterclaims as
duplicative of the legal malpractice claim. Plaintiff also moves, pursuant to CPLR 3212, to dismiss these counterclaims on the grounds that defendant is collaterally estopped from relitigating certain issues already resolved in the action Peter Folley Rizzo, M.D. v New York-Presbyterian Lawrence Hospital, et al, in the New York State Supreme Court, Westchester County under Index No. 57108/2020, and that these counterclaims are barred by his acceptance of the benefits of the consent agreement.
Defendant opposes the motion, arguing, as relevant here, that the remaining counterclaims are distinct from his dismissed malpractice claim and that as the First Department reinstated these counterclaims “despite having the authority and opportunity to otherwise dispose of them, thus there can be no duplication of his present causes of action with a malpractice claim that no longer exists” (NYSCEF Doc No. 442, memo of law at 6).”

“Plaintiff’s motion pursuant to CPLR 3211 is granted. On a motion to dismiss pursuant to
CPLR 3211(a)(7), the pleading is afforded a liberal construction, and the court must accept as true the facts alleged in the complaint, accord the pleading the benefit of every reasonable inference, and only determine whether the facts, as alleged, fit within any cognizable legal theory (see Leon v Martinez, 84 NY2d 83 [1994]).
The motion is granted because the extant counterclaims are all, fundamentally, duplicative
of the dismissed legal malpractice claim.
The causes of action for breach of contract, breach of fiduciary duty, and negligent
misrepresentation arise from the same allegations concerning plaintiffs’ representation of
defendant in the OPMC investigation and seek the same damages for the loss of defendant’s employment, alleged reputational harm, increased malpractice premiums, and legal fees (see Sun Graphics Corp. v Levy, Davis & Maher, LLP, 94 AD3d 669 [1st Dept 2012]). The cases on which defendant relies support this conclusion, as they involve breach of contract claims involving actions beyond the attorneys alleged negligent performance (see Brenner v Reiss Eisenpress, LLP, 155 AD3d 437, 438 [1st Dept 2017] [breach of contract claim reinstated where it was “based on billing issues and … not duplicative of the claims regarding the alleged mishandling of the trial”]; I.M.P. Plumbing & Heating Corp. v Munzer & Saunders, LLP, 199 AD3d 569 [1st Dept 2021] [breach of contract claim based on attorney overbilling for, inter alia, commencing unnecessary
actions that were subsequently abandoned and the improper retention of escrow funds not
duplicative of malpractice claim]).
The claims for fraud and unjust enrichment are also based on plaintiff’s alleged negligent
representation and are therefore duplicative of the legal malpractice claims (Boesky v Levine, 193 AD3d 403 [1st Dept 2021]; cf. Johnson v Proskauer Rose LLP, 129 AD3d 59, 70 [1st Dept 2015] [unjust enrichment claims sufficiently alleged that fee bore no rational relationship to work product where plaintiffs “asserted that defendants collected a $425,000 fee for “cookie cutter” legal opinion]). Finally, defendant’s Judiciary Law §487 claim is dismissed as duplicative of the malpractice claim (Knox v Aronson, Mayefsky & Sloan, LLP, 168 AD3d 70, 76 [1st Dept 2018]) and as insufficiently pled (see Gopstein v Bellinson Law, LLC, 227 AD3d 465, 467 [1st Dept 2024]). Contrary to defendant’s position, the fact that plaintiff’s motion to dismiss was bifurcated, at the Court’s direction, does not preclude the dismissal of these claims on this basis.

Accordingly, plaintiff’s motion to dismiss pursuant to CPLR 3211(a)(7) is granted and the
counterclaims are dismissed. Given the fundamental deficiency of the pleadings noted above, the Court does not reach that branch of plaintiff’s motion pursuant to CPLR 3212.”

Chanos v Tarter, Krinsky & Drogin LLP 2025 NY Slip Op 33729(U) September 15, 2025 Supreme Court, New York County Docket Number: Index No. 151797/2022 Judge: Lynn R. Kotler deals with a legal malpractice case in which an attorney was deposed on behalf of himself as well as on behalf of the firm. Plaintiff then unsuccessfully sought a further deposition of the firm.

“This is an action for attorney malpractice based upon the failure of Michael Grudberg to serve a complaint in an action filed against Chanos’ ex-husband in a New York County action with Index Number #151678/2014 (the “Related Action”). On February 26, 2014, Grudberg, at the time employed by Ballard, filed a Summons with Notice for the Related Action. On March 20, 2014, Chanos’ ex husband filed a Notice of Appearance and Demand for Complaint. The time to serve was extended by stipulation to May 21, 2014, however, no complaint was served by that date. In 2017, Grudberg left Ballard and joined Tarter, and Tarter began representing Chanos.”

“On March 20, 2024, Grudberg was deposed in the instant action as an individual and on behalf of Tarter. Chanos contends she sought information at the deposition relating to the firm’s practice with respect to management and supervision of their litigators and cases. Chanos argues that at Grudberg’s deposition he “made clear that he lacked the knowledge regarding the firm’s essential procedures and policies, including his inability to describe the firm’s statute of limitations monitoring system, new client intake protocols, and case transition and supervisory procedures.”

“When making a motion to take additional depositions, the moving party must make “a ‘detailed showing’ of the necessity for taking additional depositions, in that [they] demonstrated that the employees already deposed had insufficient information and there was a substantial likelihood that those sought to be deposed possess information necessary and material to the prosecution of the case” (Alexopoulos v Metropolitan Transp. Auth., 37 AD3d 232, 233 [1st Dept 2007]). Chanos argues that she has met her burden of showing that a further deposition of Tarter is warranted, as Grudberg did not have the requisite knowledge to answer questions related to Tarter’s internal monitoring systems. Defendants argue that Chanos failed to ask questions at the deposition related to this information, and that the information is not material and necessary to the legal malpractice claim. Here, Chanos has failed to make a showing that Grudberg had insufficient information regarding the information sought. While Chanos claims that Grudberg had no knowledge of the information sought, she failed to reference a single line in the deposition where Grudberg was asked information related to any systems in place at Tarter. Because Chanos has failed to show that Grudberg had insufficient information based on the questions posed at his deposition, the motion is denied. Chanos also argues that the deposition is necessary to rebut Defendants new defense raised after the deposition of Grudberg that there was no malpractice because the action could have been salvaged through refiling as an action on judgment. Defendants argue that this argument was raised as an affirmative defense in their answer. The Court agrees with Defendants that Chanos was on notice, based on the affirmative defenses raised, that Defendants would defend the case in part based on Chanos and her current counsel’s failure to pursue timely legal claims, and failed to ask Grudberg any questions related to the systems in place at the March 20, 2024 deposition.”

CPLR 203(d) is a little known exception to the three-year statute of limitations for legal malpractice under CPLR 214(6), and allows any claims, whether time barred or not, to survive as an offset. In Landy Wolf, PLLC v Sanko 2025 NY Slip Op 33690(U) September 27, 2025 Supreme Court, New York County Docket Number: Index No. 651419/2024 Judge Nicholas W. Moyne demonstrates how it is applied.

“The Plaintiff, L W ( or its predecessor Steven Landy & Associates, PLLC), commenced this action seeking to recover $268,084.33 in unpaid legal fees owed by its former client, Sanko. L W represented Sanko in a complex multi-party action concerning the partition and sale of property located at 801-803 Greenwich Street (the “Property”). LW ceased representing Sanko on January 28, 2020. Sanko filed his Answer and Counterclaims in this action on May 7, 2024. · Sanko asserts counterclaims againstLW for Breach of Fiduciary Duty, Unjust Enrichment, and Breach of Contract, arguing that the fees sought by L W arose from representation “marred by unwaivable conflicts of interest.” The core of Sanko’ s defense and counterclaims rests upon L W’s representation of Sanko, Sank.o’s ex-wife Mary “Tai” Burnette, and Craig Abramowitz (the lender) simultaneously.”

“L W correctly asserts that claims sounding in legal malpractice, regardless of nomenclature (contractor tort), are subject to a three-year Statute of Limitations (SOL), pursuant to CPLR § 214(6). The representation ended on January 28, 2020,meaning the SOL for professional negligence and/or legal malpractice expired on January 28, 2023. Since Sanko filed his counterclaims on May 7, 2024, any claims seeking affirmative damages or judgment beyond the amount demanded by L W are clearly time-barred. However, Sanko correctly invokes CPLR § 203( d), which permits a defense or counterclaim arising from the same transactions or occurrences upon which the complaint depends to be maintained as an offset, even if time-barred as an independent action. L W’s claims for breach of contract, accounts stated, and quantum meruit all stem from the professional relationship and the billing practices challenged by Sanko. Therefore, L W’s motion to dismiss based on the Statute of Limitations is granted only to the extent that Sanko’s counterclaims seek affirmative monetary relief (i.e., damages exceeding $268,084.33, the amount L W demands). The motion is denied as to the remainder of the claims, which are preserved as defenses and offsets against L W’s demand for unpaid fees, pursuant to CPLR § 203(d). A similar result applies to the breach of fiduciary duty counterclaim. L W argues that the BFD claim fails due to lack of particularity (CPLR 3016(b)) and because documentary evidence (Conflict Waivers) refutes the claim. The BFD claim alleges that L W breached its duty by failing to provide services “untainted by divided loyalty” through the simultaneous representation of Sanko (borrower), Burnette, and Abramowitz (lender). Sank.o’s core argument is that the alleged ethical violation (simultaneous adverse representation) mandates a forfeiture of fees, independent of proving traditional legal malpractice damages. L W concedes that allegations concerning misconduct, billing practices, and divided loyalty, if proven, are a basis for asserting a counterclaim ( or defense) related to fee entitlement. This issue of whether the alleged misconduct warrants a forfeiture of fees paid or owed must be resolved through fact-finding.”

“The Court finds that Sanko’s counterclaims survive as defenses and offsets pursuant to CPLR § 203( d) due to pervasive factual disputes concerning the ethical validity of L W’s representation, the existence of a waivable conflict (Ethics Opinion 952), the scope of services rendered, and the legitimacy of the fees billed. Therefore, it is hereby ordered that the motion to dismiss the counterclaims is granted only to the extent that the counterclaims asserted by the defendant Anton Sanko seek affirmative monetary relief in excess of the amount demanded in the Complaint; and it is further ordered that the plaintiffs motion is denied in all other respects, and the defendant’s counterclaims are retained solely as defenses and offsets against the amounts sought by the Plaintiff; and it is further ordered that all parties are directed to proceed with disclosure.”

“