In Richmond Hospitality, LLC v Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrera, Wolf & Carone, LLP 2022 NY Slip Op 51310(U) Decided on December 20, 2022
Supreme Court, Richmond County Castorina Jr., J. we see a situation unique to legal malpractice cases. Early on the Court will dismiss, determining that the complaint cannot state a cause of action. This almost never happens in medical malpractice or personal injury cases.

“This is an action for legal malpractice, arising out of an underlying mortgage foreclosure [*2]proceeding, entitled Shaughnessy Capital, LLC v Richmond Hospitality, LLC, et al., bearing Richmond County Supreme Court Index No.: 152641/2019. In September 2019 Richmond Hospitality, LLC [hereinafter “Richmond Hospitality”] retained Defendants [hereinafter “Abrams Fensterman”] to represent them in the underlying foreclosure action brought by Shaughnessy Capital, LLC.

Abrams Fensterman filed an Answer on Defendant’s behalf in the underlying foreclosure action. Shaughnessy Capital then filed a motion for summary judgment. Abrams Fensterman failed to oppose the motion and to appear in Court on the return date causing the motion to go before the Court unopposed, and in May 2021, the motion was granted and an approximately $7.8 million judgment was entered against Defendants. In July 2021, Abrams Fensterman moved to vacate the May 2021 order granting Shaughnessy Capital’s motion for summary judgment. In October 2021, the motion to vacate was denied by Justice Wayne Ozzi.

Defendants allege that Abrams Fensterman failed to exercise care and skill by failing to oppose the summary judgment motion, and that the failure to do so, was the proximate cause for the judgment against them. Defendants further allege that had Abrams Fensterman opposed the motion, they would have prevailed in the underlying foreclosure action by advancing the defense that money was not accounted for properly by the lender, and that money was released without Defenndant’s prior knowledge or approval. Abrams Fensterman alleges that the First Amended Verified Complaint in the within action, fails to state a cause of action, and/or is barred by documentary evidence.”

“Here, the First Amended Verified Complaint alleges that Abrams Fensterman failed to oppose the motion for summary judgment in the underlying foreclosure action, and that, but for that failure, Defendants would have successfully defended and prevailed in the action. In doing so, however, the First Amended Verified Complaint makes only a single vague allegation to support the claim that Defendants would have prevailed in the underlying foreclosure action, to wit:

“That but for the professional negligence of the Defendant in not appearing or opposing the motion for summary judgment that was brought against the within Plaintiffs in the underlying case of Shaughnessy Capital LLC v Richmond Hospitality, LLC the within Plaintiff “would have been successful in defeating said motion for summary judgment, as well as, the underlying action by advancing the defense that they had to the position taken by the lender, Shaughnessy Capital, LLC, to wit, that the money not accounted for properly and money was released without the within Plaintiff’s prior knowledge or approval.”[Emphasis added].

There are no other allegations in the First Amended Complaint bearing on the claim that Richmond Hospitality would have successfully defended against, and prevailed in, the underlying foreclosure action. This lone allegation is insufficient to plead the “but for” element of a cause of action for legal malpractice because it is too conclusory and impermissibly speculative. The First Amended Complaint [1] does not allege that Richmond Hospitality did not default under the Loan Documents, [2] does not allege that liens were never filed against the subject property, [3] does not allege that Richmond Hospitality had no obligation to remove liens filed against the subject property under the Loan Documents, [4] does not allege that Richmond Hospitality otherwise fulfilled its obligations under the Loan Documents, [5] does not allege that Richmond Hospitality did not receive notice of a default from Shaughnessy Capital, LLC, and [6] does not allege that Richmond Hospitality cured the defaults.

The First Amended Verified Complaint makes only the foregoing disjointed allegation that can be fairly characterized as vague, conclusory, and impermissibly speculative. There is no way to discern from this allegation how or on what factual basis, Richmond Hospitality would have prevailed in the underlying foreclosure action. Even given the First Amended Verified Complaint’s allegations the benefit of every favorable inference, there is still no way to know how Defendants claim they would have successfully defended the underlying foreclosure action, and the allegations of their default under the Loan Documents. The allegations that Richmond Hospitality had a meritorious defense to the underlying foreclosure action because “Shaughnessy Capital did not ‘account’ or released money without Richmond Hospitality’s “prior knowledge and approval” are too conclusory and speculative to state a cause of action for legal malpractice.”

Kaufman v Boies Schiller Flexner, LLP  2022 NY Slip Op 06883  Decided on December 06, 2022  Appellate Division, First Department is a terse decision which modifies Supreme Court’s complete dismissal of all claims.  Now, a breach of contract claim remains.  Judiciary Law § 487 is out.

“The complaint stated a limited cause of action for breach of contract against BSF. The complaint sufficiently alleged that BSF overbilled or billed for unnecessary expenses associated with attorneys not admitted to practice law in, or based out of, New York, and the documentary submissions do not utterly refute those allegations (e.g. Ullmann-Schneider v Lacher & Lovell-Taylor, P.C., 121 AD3d 415, 416 [1st Dept 2014]; Goldfarb v Hoffman, 139 AD3d 474, 475 [1st Dept 2016]; Cascardo v Dratel, 171 AD3d 561, 562 [1st Dept 2019]; see CPLR 3211[a][1], [7]). The complaint otherwise failed to state a cause of action for breach of contract or violation of Judiciary Law § 487(1) (see generally Second Source Funding, LLC v Yellowstone Capital, LLC, 144 AD3d 445, 445-446 [1st Dept 2016]; Brookwood Cos., Inc. v Alston & Bird, LLP, 146 AD3d 662, 669 [1st Dept 2017]; Facebook, Inc. v DLA Piper LLP [US], 134 AD3d 610, 615 [1st Dept 2015], lv denied 28 NY3d 903 [2016]; CPLR 3211[a][7]). We decline to modify the order for review to indicate that dismissal was without prejudice as plaintiff has not sought clarification or relief from Supreme Court in the first instance.”

Successfully pleaded Judiciary Law § 487 claims are not a given.  Default judgments are even rarer, but here is one example.  In Ezra Huber & Assoc., P.C. v Genevieve Lane Lopresti
2022 NY Slip Op 06910 Decided on December 7, 2022 Appellate Division, Second Department the default judgment was affirmed.

“The plaintiff commenced this action to recover damages for prima facie tort and violation of Judiciary Law § 487. After the defendant failed to timely answer the complaint, the plaintiff moved pursuant to CPLR 3215 for leave to enter a default judgment against the defendant upon her failure to answer the complaint or for a hearing on the issue of any reasonable excuse [*2]offered by the defendant. The defendant cross-moved, inter alia, to compel the plaintiff to accept her late answer. The defendant separately moved pursuant to CPLR 3211(a)(5) to dismiss the complaint as time-barred. In an order entered February 16, 2018, the Supreme Court denied the plaintiff’s motion, in effect, granted that branch of the defendant’s cross motion which was to compel the plaintiff to accept her late answer, and granted the defendant’s separate motion pursuant to CPLR 3211(a)(5) to dismiss the complaint.

Thereafter, the plaintiff moved for leave to renew and reargue its motion and its opposition to the defendant’s cross motion and separate motion. In an order entered March 25, 2019, the Supreme Court denied the plaintiff’s motion.

The plaintiff appeals from the orders entered February 16, 2018, and March 25, 2019, respectively.

“A defendant who has failed to timely answer a complaint and who seeks leave to file a late answer must provide a reasonable excuse for the delay and demonstrate a potentially meritorious defense to the action” (Bank of Am., N.A. v Viener, 172 AD3d 795, 796; see Jacobson v Val, 206 AD3d 803, 804). To avoid the entry of a default judgment upon the failure to answer the complaint, a defendant must make a similar showing (see Sadowski v Windsor Vil. Apts. Co., LLC, 200 AD3d 816, 817; Yuxi Li v Caruso, 161 AD3d 1132, 1133). “Whether a proffered excuse is reasonable is a sui generis determination to be made by the court based on all relevant factors, including the extent of the delay, whether there has been prejudice to the opposing party, whether there has been willfulness, and the strong public policy in favor of resolving cases on the merits” (Nowakowski v Stages, 179 AD3d 822, 823 [internal quotation marks omitted]; see Jinwu Yu v Hong Qin Jiang, 205 AD3d 1012, 1013).

Here, the defendant failed to provide a reasonable excuse for her delay in answering the complaint, as her claims that her and her counsel’s respective medical issues prevented her from timely answering the complaint were vague and unsupported by any medical documentation (see PennyMac Corp. v Sellitti, 193 AD3d 959; Dankenbrink v Dankenbrink, 154 AD3d 809, 810; Salatino v Pompa, 134 AD3d 692, 693). Since the Supreme Court should not have granted that branch of the defendant’s cross motion which was to compel the plaintiff to accept her late answer, the defendant’s separate motion pursuant to CPLR 3211(a)(5) to dismiss the complaint was untimely, as a defendant must make this motion before service of the responsive pleading is required (see id. § 3211[e]; Wan Li Situ v MTA Bus Co., 130 AD3d 807, 808). Accordingly, the court should have granted that branch of the plaintiff’s motion which was pursuant to CPLR 3215 for leave to enter a default judgment against the defendant upon her failure to answer the complaint, denied that branch of the defendant’s cross motion which was to compel the plaintiff to accept her late answer, and denied the defendant’s separate motion pursuant to CPLR 3211(a)(5) to dismiss the complaint.”

Federal Ins. Co. v Lester Schwab Katz & Dwyer, LLP  2022 NY Slip Op 07149  Decided on December 15, 2022 Appellate Division, First Department is a case by the insurer versus its attorney arising from what was most likely a personal injury claim.  Overlooking the actual email sent by the law firm, Plaintiff sued for fraud.  That email ended the fraud claim, but the legal malpractice claim remains alive.

“Supreme Court correctly denied LSKD’s motion to dismiss the cause of action for legal malpractice. The verified complaint sufficiently alleges specific facts from which, if true, a factfinder could reasonably infer that, but for LSKD’s alleged negligence in conducting the insureds’ defense in the underlying action, plaintiff insurer would have achieved a better result in that litigation than the $4 million settlement to which it ultimately agreed. Stated otherwise, the question of proximate cause is not resolvable on this motion to dismiss (see Schroeder v Pinterest Inc., 133 AD3d 12, 26 n 7 [1st Dept 2015]).

The causes of action for fraud and negligent misrepresentation, however, should have been dismissed pursuant to CPLR 3211(a)(1). Both of these claims are based on the contention that LSKD obtained its assignment to defend the insureds in the underlying action by misrepresenting or omitting to disclose the fact that it had a conflict of interest as to the City of New York, a codefendant in the underlying action. This conflict prevented LSKD from pursuing a cross claim against the City, to the detriment of the insureds and their insurers. The theory that LKSD misrepresented or failed to disclose the existence of the conflict is conclusively refuted by documentary evidence, specifically, an April 16, 2013 email from LSKD to, inter alia, the claims adjuster who retained it, plainly stating:

“As discussed, we will accept this new assignment with the understanding that we will not assert cross claims against the City of New York. Our firm represents the City of New York in other matters and we are conflicted from asserting claims against them.”

In the context of the foregoing express disclosure of the conflict and consequent inability of LKSD to pursue a cross claim against the City, the communication of the same date that a search for possible conflicts had yielded negative results was not misleading. To the extent plaintiff contends that LKSD inaccurately minimized the

viability of a potential cross claim against the City, the complaint fails to allege particularized facts that this advice was given with deceptive intent so as to support a fraud claim.”

Pro-se litigation often raises difficult questions of whether attorneys (relying on regular practices) have said something deceitfully, or whether the Pro-se simply does not understand how litigation procedure works.  Delo v O’Connor  2022 NY Slip Op 34135(U)  December 7, 2022  Supreme Court, New York County  Docket Number: Index No. 652721/2022 Judge: Arlene P. Bluth is a good example.  Total confusion over how to commence a lawsuit resulted in tortured communications which led to more litigation.

“This action, in which plaintiff represents himself, relates to an underlying litigation in which plaintiff, also self-represented, sued non-party JPMorgan for employment-related issues.
Defendants here are the attorneys and law firm which represented JPMorgan in that case, which was commenced and settled in federal court. Here, plaintiff alleges that defendants made a misrepresentation to the federal court regarding an agreement for an extension of time to answer the complaint filed in that case. Ms. Queliz, representing JPMorgan, submitted a letter to the court requesting an extension to answer the complaint, stating that she had “consulted Plaintiff on [her] request, and he has given his consent for the additional time,” (NYSCEF Doc. No. 11). Plaintiff then submitted a separate letter stating Ms. Queliz made a misrepresentation to the Court, stating that there was a condition
that JPMorgan accept service, which was merely emailed to JPMorgan. After receiving both letters, U.S. District Judge Vernon S. Broderick issued an order granting JPMorgan’s request for an extension of time. ”

“Pursuant to CPLR 3211 (a)(1), the documentary evidence submitted indicates that Ms. Queliz did not misrepresent any facts in the underlying action. As Ms. Queliz attempted to
explain to plaintiff in her emails, plaintiff attempted to serve JPMorgan by emailing the summons and complaint. That, of course, is not a permissible way to effectuate service. Ms.
Queliz agreed to accept service this way and asked plaintiff to extend the time for JPMorgan to respond. Plaintiff agreed (NYSCEF Doc. No. 9 at 5). After this exchange, Ms. Queliz received from her client a request to waive service that was submitted by plaintiff after he sent the complaint to JPMorgan but before she came to an agreement with him. Ms. Queliz attempted to clarify whether there would be a waiver of service or an acceptance of service, and when plaintiff failed to communicate either, Ms. Queliz wrote to the court requesting an extension of time to answer. Plaintiff, self-represented, believed that because Ms. Queliz had all the documents, a waiver of service was not necessary. But this is not how service works; just because the defendants had the papers does not mean they were appropriately served under New York law.

In any event, even after receiving plaintiff’s letter alleging fraudulent conduct, Judge Broderick granted the extension. If plaintiff thought that decision was improper, then he should
have sought to vacate it or appeal that decision in the court where it occurred. Instead, plaintiff accepted it, settled that case and signed a release. The release, signed by plaintiff, states that plaintiff “knowingly and voluntarily releases [entities’ present and former attorneys], both individually and in their business capacities, to the full extent permitted by law, from all claims, [and] causes of action,” (NYSCEF Doc. No. 13 at 3). Despite releasing the attorneys, he sues them here.

Additionally, plaintiff failed to state a cause of action against the attorneys for a party with whom he settled an action. His claim that he would have received a default judgment for $2
million if defendants had not allegedly committed fraud upon the federal court is total speculation. He did not show that he properly served JPMorgan or adequately explain how this
Court can ignore the fact that plaintiff voluntarily settled the case. As defendants stated, iIf plaintiff believes there was fraudulent conduct during the course of litigation, then the
appropriate remedy is to pursue a vacatur of the stipulation of dismissal.”

Belair & Evans LLP v Rizzo  2022 NY Slip Op 06986  Decided on December 08, 2022  Appellate Division, First Department is an example of the Court taking things into its own hands and directing a show cause order why a counterclaim should not be dismissed.  Then the Court dismissed all the counterclaims.

“Order, Supreme Court, New York County (Frank P. Nervo, J.) entered July 12, 2021, which, to the extent appealed from, granted the court’s sua sponte motion to dismiss defendant’s counterclaims, unanimously modified, on the law, to reinstate the remaining counterclaims other than legal malpractice, and otherwise affirmed, without costs.

Plaintiff brought this action to recover unpaid legal fees incurred while defending defendant against an investigation and prosecution by the New York State Department of Health and its Office of Professional Medical Conduct (OPMC), which was ultimately settled by consent order. Defendant answered, asserting various counterclaims, including legal malpractice. Plaintiff replied to the counterclaims, asserting as an affirmative defense that documentary evidence contradicted the factual allegations pleaded in the counterclaims. The court directed the parties to show cause as to why the legal malpractice counterclaim should not be dismissed.

Defendant’s arguments regarding the timing of the court’s motion are unavailing. Motions to dismiss pursuant to CPLR 3211(a)(7) may be brought at any time (see CPLR 3211[e]), and plaintiff’s reply to the counterclaims asserted CPLR 3211(a)(1) as an affirmative defense, thus preserving plaintiff’s right to move to dismiss the counterclaims pursuant to that provision (see id.; M & E 73-75 LLC v 57 Fusion LLC, 189 AD3d 1, 6 [1st Dept 2020], lv dismissed 36 NY3d 1086 [2021]).

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.”

A recurring situation where a law firm moves to be relieved shortly before a motion for summary judgment or before trial is often linked to the lack of an expert, or the reluctance of the law firm to hire (and expend funds for) an expert.  Of course, this is not the only reason law firms litigate a case for years and then abruptly exits the case.  How the law firm exits is very important.

In Davis v Siben & Siben, LLC  2022 NY Slip Op 06906 Decided on December 7, 2022  the Appellate Division, Second Department placed great weight on the day that the law firm served an order permitting withdrawal with notice of entry on Plaintiff.

“The defendant, Siben & Siben, LLC, represented the plaintiff in an underlying action entitled Davis v Commack Hotel, LLC, which sought to recover damages for, inter alia, negligence, wrongful death, and conscious pain and suffering as it related to the death of the plaintiff’s son. On or about October 1, 2014, the defendant moved to be relieved as counsel in that action, which motion was granted under the following conditions: that the defendant serve the plaintiff with a notice of entry within 20 days, and that the defendant file proof that such service had been effected. The defendant served the plaintiff with the notice of entry on November 10, 2014.

On or about January 11, 2018, the plaintiff, pro se, commenced this action alleging legal malpractice and fraudulent misrepresentation against the defendant. The defendant moved, inter alia, for summary judgment dismissing the complaint. The Supreme Court granted the motion. The plaintiff appeals, and we affirm.

“The statute of limitations for a cause of action to recover damages for legal malpractice is three years, which accrues at the time the malpractice is committed” (Tulino v Hiller, P.C., 202 AD3d 1132, 1135 [internal citations omitted]). “However, pursuant to the doctrine of continuous representation, the time within which to sue on the claim is tolled until the attorney’s continuing representation of the client with regard to the particular matter terminates” (Aqua-Trol Corp. v Wilentz, Goldman & Spitzer, P.A., 144 AD3d 956, 957). “For the doctrine to apply, there must be clear indicia of an ongoing, continuous, developing, and dependent relationship between the [*2]client and the attorney. One of the predicates for the application of the doctrine is continuing trust and confidence in the relationship between the parties” (Beroza v Sallah Law Firm, P.C., 126 AD3d 742, 743 [internal citations and quotation marks omitted]). Here, the defendant was relieved as counsel no later than November 10, 2014, when it fulfilled the obligations set out by the Supreme Court. Insofar as this action was commenced more than three years later, on January 11, 2018, the legal malpractice claims were untimely.”