Kaufman v Boies Schiller Flexner LLP2022 NY Slip Op 32743(U)  August 15, 2022 Supreme Court, New York County  Docket Number: Index No. 154149/2018  Judge: James d’Auguste is the very fraught story of a massively fought matrimonial action.  It seems that millions were spent on litigation.  The martial estate must have been very worthwhile.  This case discusses two legal malpractice issues:  excessive billing and violation of Judiciary Law § 487.  In this blog, we will review the JL § 487 claims.

“Plaintiff has renumbered the Judiciary Law § 487 from the second cause of action in the original complaint to the to the seventh cause of action in the PAC.3 An attorney is liable for a
violation of Judiciary Law § 487 if he or she “[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the Court or any party; or … [w]ilfully  delays his client’s suit with a view to his own gain.” A cause of action under the statute “requires a showing of ‘egregious conduct or a chronic and extreme pattern of behavior’ on the part of the defendant attorneys that caused damages” (Facebook, Inc. v DLA Piper LLP (US), 134 AD3d 610,615 [1st Dept 2015], Iv denied 28 NY3d 903 [2016] [citation omitted]). Allegations of deceit or the intent to deceive must be pled with particularity (Bill Birds, Inc. v Stein Law Firm, P.C., 164 AD3d 635, 637 [2d Dept 2018], affd 35 NY3d 173 [2020]; Facebook, Inc., 134 AD3d  at 615 [ dismissing a Judiciary Law § 487 claim where the allegations of sci enter were conclusory and were not supported by specific facts]).

The PAC alleges that BSF and Kaplan intentionally deceived plaintiff into signing the January 17, 2013, preliminary conference order/stipulation in which she relinquished her rights
to various personal and marital property, and which directed her ex-husband, Thomas Kaufman (Kaufman), to pay her $2 million in cash and/or securities (NYSCEF Doc. No. 203, ,r,r 416-419 at 449 [Ex 11 ]). BSF and Kaplan allegedly colluded to obtain an all-cash payment instead of stock so they could bill plaintiff for their own personal gain (id., ,r,r 420-421 ). BSF and B&K are alleged to have intentionally prolonged the action by failing to re-file an order to show cause for pendente lite relief and discovery (id., ,r,r 423-427), with BSF concealing its wrongdoing by refusing to provide an accounting of its services (id., ,r,r 428-431 ), and by refusing to proceed with mediation even though CM had advised the Court of his intention to mediate (id., ,r,r 435- 437). After cancelling the mediation, BSF and B&K billed plaintiff an additional $892,023.18 (id., ,r 442). Kaplan purportedly defamed plaintiffs parenting skills in an October 15, 2014, email to Joan Salwen (Salwen), the attorney representing her youngest daughter, which led her daughter to join Kaufman in Westchester (id., ,r,r 249-252 and 450). Defendants allegedly undermined plaintiffs custodial rights so she and Kaufman would be forced to sell the marital home, the proceeds of which could be used to pay defendants’ fees (id., ,r,r 451-452). BSF also intentionally deceived the Court and plaintiff on Uno’s unauthorized practice oflaw (id., ,r,r 461 and 463). It is claimed that Kaplan and BSF were aware that plaintiff suffers from ADHD dyslexia and a cognitive auditory disability and required a written copy of the settlement and “time to read, process and digest the written terms in order … to understand [them]” (id., ,i,r 265- 268). The PAC alleges that the settlement terms, though, “had been drastically changed from the original letter Kaplan sent Plaintiff’ (id, ,r 269). The PAC further alleges that when plaintiff expressed her reservations about the settlement to Kaplan and CM, and Kaplan, in tum “told CM[ ] that Plaintiff did not understand the terms of the Settlement” (id, ,r,i 276 and 282). It is alleged that “CM[ ] dismissed this concern, stating to Kaplan that if Plaintiff did not accept the Settlement that was being offered, she would never get out of the courtroom and Defendants would be wrapped up litigating this case forever” (id, ,i,r 277 and 283). Plaintiff now claims defendants coerced her into entering into the settlement with Kaufman even though they knewshe did not understand its terms (id., ,r 287).

These allegations fail to remedy the deficiencies in the original complaint regarding the element of intentional deceit (see Lavelle-Tomko v Aswad & Ingraham, 191 AD3d 1142, 1147
[3d Dept 2021] [ denying a motion to amend a complaint to plead a cause of action under Judiciary Law § 487 where the proposed amendment failed to plead facts tending to prove the attorney’s intent to deceive]; Genger v Genger, 135 AD3d 454,454 [1st Dept 2016], Iv denied 27 NY3d 912 [2016] [reasoning that there was no basis to rep lead where the plaintiffs papers did not show that plaintiff would be able to state a viable cause of action]). Plaintiff liberally employs words or phrases such as “intentionally deceived” or “intentionally misled” or “deceitfully” throughout the PAC, but such catch phrases are too conclusory to plead intent with particularity. Nor does the PAC plead any specific facts from which deceit or the intent to deceive may be inferred (see Ehrenkranz v 58 MHR, LLC, 159 AD3d 872, 872 [2d Dept 2018]). More importantly, several of the purportedly deceitful acts -the defective order to show cause, a cancelled mediation, Kaplan’s allegedly defamatory email, Uno’s participation in the action, and the settlement – were addressed previously in the April Order, though now, plaintiff buttresses the allegations with additional documents. The Court transcripts, emails and other documents, however, are insufficient to plead the element of scienter with particularity or evince an egregious or chronic pattern of behavior.

As stated in the April Order, the Court declined to sign the order to show cause because the motion had been filed four days before a trial ready conference and because defendants failed to request a pre-motion conference (NYSCEF Doc. No. 134 at 12). In declining to sign, the Court (Ecker, J.) also determined the motion “would be held in abeyance” so the parties could appear for a pre-motion conference (NYSCEF Doc. No. 203 at 452 [Ex 13)). The Court transcripts show that Kaplan and CM repeatedly raised the issue of outstanding discovery with the court-attorney referee and with the Court after the Court declined to sign the order to show cause (NYSCEF Doc. No. 203 at 458-459 [Ex 14]; NYSCEF Doc. No. 203 at 510 [Ex 15)). Thus, the documents do not support the claim that defendants willfully delayed plaintiffs suit for their own gain (see Fleyshman v Suckle & Schlesinger, PLLC, 91 AD3d 591,593 [2d Dept 2012], iv denied 19 NY3d 801 [2012] [granting dismissal of a Judiciary Law § 487 (2) cause of action because the “allegation that the defendants ‘willfully delayed [her] recovery with a view to their own ends and benefit’ is a bare legal conclusion”]).

Plaintiff complains that defendants cancelled mediation so they could continue to bill for their services. But, as noted in the April Order, BSF objected to the tactics employed by
Kaufman’s attorney to unilaterally proceed with mediation without furnishing certain discovery (NYSCEF Doc. No. 134 at 12-13). The correspondence regarding the proposed mediation submitted with the PAC fails to reflect an intent to deceive on the part of defendants. The emails show that defendants and Kaufman’s counsel never agreed on a specific mediator (NYSCEF Doc. No. 203 at 978 [Ex 26]). When Kaufman’s counsel executed a retainer with a mediator and paid a $10,000 fee, Kaplan advised that plaintiff “never agreed to start mediation with Mr. Berman. [S]orry for the confusion. Husband jumped the gun” (id. at 980). ”

“As for the settlement, plaintiff had previously argued that she did not understand the agreement and that Kaplan and BSF were aware that she did not understand it (NYSCEF Doc.
No. 134 at 16). As explained in the April Order, plaintiffs allocution defeats any claim that she misunderstood its terms, and therefore, defendants’ actions could not have caused her damages (see Maksimiak v Schwartzapfel Novick Truhowsky Marcus, P. C., 82 AD3d 652, 652 [1st Dept 2011] [granting dismissal where the complaint failed to plead that the attorneys’ actions caused the plaintiff’s damages]). Moreover, as noted in the prior order, another Justice of this Court had already denied plaintiffs attempt to set aside the settlement based on her lack of understanding of its terms (NYSCEF Doc. No. 179, decision and order dated August 14, 2019, in Coplan v Kaufman, Sup Ct, NY County, index No. 152865/2017).
As for the alleged misconduct concerning the preliminary conference stipulation/order dated January 17, 2013, a single act of deceit is not enough to trigger a Judiciary Law§ 487
violation (Strumwasser v Zeiderman, 102 AD3d 630,631 [1st Dept 2013]).

Accordingly, leave to replead the cause of action under Judiciary Law§ 487 is denied.”

Kaufman v Boies Schiller Flexner LLP2022 NY Slip Op 32743(U)  August 15, 2022 Supreme Court, New York County  Docket Number: Index No. 154149/2018  Judge: James d’Auguste is the very fraught story of a massively fought matrimonial action.  It seems that millions were spent on litigation.  The martial estate must have been very worthwhile.  This case discusses two legal malpractice issues:  excessive billing and violation of Judiciary Law § 487.  In this blog, we will deal with the excessive billing.  In Friday’s blog, we will review the JL § 487 claims.

“A. Breach of Contract against BSF, Kaplan, B&K and BRIR

Plaintiff has renumbered the breach of contract action for alleged overbilling from the first cause of action in the original complaint to the sixth cause of action in the PAC. Allegations
Allegations of  overbilling, padding of costs, and billing for unnecessary legal services can constitute a cause of action for breach of contract, provided the allegations do not directly challenge the quality of the attorney’s work (Ullmann-Schneider v Lacher & Lovell-Taylor, P.C., 121 AD3d 415,416 [1st Dept 2014]; O’Connor v Blodnick, Abramowitz and Blodnick, 295 AD2d 586,587 [2d Dept 2002] [same]).

The PAC alleges that defendants routinely charged plaintiff for the presence of multiple attorneys at depositions, hearings and conferences even though not all the attorneys present
contributed (NYSCEF Doc. No. 203, ,r,r 183 and 398). In one instance, BSF billed $2,762 for an associate and two paralegals to transport banker’s boxes to a pretrial conference (id., ,r 188 and at 647 [Ex 18]). BSF and B&K allegedly engaged in duplicate billing whereby attorneys discussing the matter in person or by telephone or email billed separately for their time and billed for different amounts of time spent at the same meeting (id., ,r,r 76-77, 185-186, 396 and 399- 400). Attorneys at BSF and B&K purportedly billed for reviewing the same documents (id., ,187). BSF allegedly failed to disclose that attorneys Charles Miller (CM), James Miller (JM) and Theodore Uno (Uno) were based in Florida (id., ,r 301). BSF billed $139,982.89 for their travel expenses to New York and over $9,000 for local travel expenses (id., ,r 182). BSF also billed $22,412.38 for its services before plaintiff had even signed a retainer (the BSF Retainer) (id., ,r 391). The PAC alleges plaintiff first learned that Uno was not licensed to practice in New York at a Court conference on November 13, 2014 (id, ,r 216). She asserts that Uno’s $485,700 fee is an unnecessary expense because he was not permitted to participate in the Divorce Proceeding (id., ,r,r 194, 197, 403 and 409). Plaintiff also complains that the hourly rates charge by JM, who is not licensed to practice in New York, and Uno are greater than the hourly rate charged by Kaplan, who is licensed to practice in this state (id., ,r,r 202-203).

These new allegations are unrelated to plaintiffs earlier complaints about the quality of defendants’ legal work and are sufficient to overcome the pleading deficiencies in the original
breach of contract action as against BSF, B&K and Kaplan, but not as to BRIR. While the PAC attributes overbilling to all defendants, a complaint that fails to distinguish between defendants is an improper group pleading (see Principia Partners LLC v Swap Fin. Group, LLC, 194 AD3d 584, 584 [1st Dept 2021]). Here, the PAC does not specifically allege that BRIR billed plaintiff for its services, and none of the exhibits reflect an invoice or bill delivered to plaintiff from BRIR. Critically, the PAC alleges that plaintiff never paid BRIR a retainer (NYSCEF Doc No. 203, ,r 67) and that she had retained “Joel C. Bender, Esq., P.C.,” not BRIR (id., ,r 322). Accordingly, leave to rep lead the breach of contract cause of action for alleged overbilling, unnecessary billing and excessive fees is granted as to BSF, B&K and Kaplan. The action shall be restored to the active calendar”

As is common to legal malpractice cases, Plaintiffs are held to the burden of proving that “but for” the negligence of the attorney, there would have been a different or better outcome.  In Jean-Paul v Rosenblatt  2022 NY Slip Op 04958   Decided on August 17, 2022 Appellate Division, Second Department we see how that rule applies to a situation in which a landlord is granted a judgment of possession, the attorney fails to tell the landlord of the victory and the tenant successfully moves to vacate in the absence of opposition.

“In February 2019, the plaintiff commenced this action against the defendants to recover damages for legal malpractice alleging, inter alia, that they were negligent in failing to inform him about a judgment of possession that they had obtained in his favor in an underlying housing court action and in failing to enforce it. As is relevant to this appeal, the defendants cross-moved, among other things, pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action. In an order dated February 28, 2020, the Supreme Court granted that branch of the defendants’ cross motion. The plaintiff appeals.

The Supreme Court properly granted that branch of the defendants’ cross motion which was pursuant to CPLR 3211(a)(7) to dismiss the complaint. Where, as here, the defendants submitted evidentiary material in support of that branch of their cross motion which was pursuant to CPLR 3211(a)(7) to dismiss the complaint, the criterion becomes whether the plaintiff has a cause of action, not whether one is stated (see Guggenheimer v Ginzburg, 43 NY2d 268, 275; Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 845).”

“Even if the defendants had been negligent in the underlying action, the plaintiff’s contentions that the housing court would have decided the motion of the tenant in the underlying action to vacate the judgment of possession in the plaintiff’s favor such that the tenant would have been promptly evicted, and that the plaintiff would not have incurred damages in the form of additional unpaid rent and legal fees while the matter continued, are merely speculative (see Hall v Hobbick, 192 AD3d at 779; Bua v Purcell & Ingrao, P.C., 99 AD3d at 847-848).

Accordingly, the Supreme Court properly granted that branch of the defendants’ cross motion which was pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action.”

In Silverman v Eccleston Law, LLC   2022 NY Slip Op 04991  Decided on August 17, 2022 Appellate Division, Second Department, Plaintiff, an attorney, took a loan from his employer, which he agreed to repay if he resigned.  When he resigned, he hired a law firm to negotiate the repayment.  Eventually, plaintiff had to repay the loan.  He then sued for malpractice.  The claim failed.  From reading the decision it appears that the main departure claimed was that his attorneys did not tell him that there was little likelihood of avoiding repayment.

“The plaintiff, an attorney licensed to practice law in New York and a certified financial planner, received a loan from his former employer, Ameriprise Financial Services, Inc. (hereinafter Ameriprise), in the amount of $280,190, for which he executed a promissory note, requiring him to immediately repay the loan in full in the event of his resignation. The note required any disputes to be arbitrated pursuant to the Financial Industry Regulatory Authority (hereinafter FINRA) Code of Arbitration Procedure for Industry Disputes.

When the plaintiff decided to resign from Ameriprise, he hired the defendant law firm to negotiate with Ameriprise regarding the promissory note, and, if necessary, defend him against a note collection claim and assert counterclaims. The defendant’s main office is located in Chicago, Illinois. The plaintiff sent his correspondence with the defendant to the main office in Chicago, and, on one occasion, met with his attorneys in that city.

Ultimately, when the plaintiff failed to pay the debt, Ameriprise commenced a FINRA arbitration proceeding, held in New York, at which the defendant represented the plaintiff. The arbitration panel awarded judgment against the plaintiff and in favor of Ameriprise, requiring the plaintiff to pay the remaining balance of the note, with interest, as well as attorneys’ fees (pursuant to the terms of the note).”

“Here, accepting all facts as alleged in the amended complaint to be true and according the plaintiff the benefit of every favorable inference (see Leon v Martinez, 84 NY2d 83, 87-88), the amended complaint failed to state a legal malpractice cause of action. In the third and fourth causes of action, the plaintiff failed to adequately allege a breach of the applicable standard of care. The “selection of one among several reasonable courses of action does not constitute malpractice” (Rosner v Paley, 65 NY2d 736, 738), and an attorney may not be held liable for “‘the exercise of appropriate judgment that leads to an unsuccessful result'” (Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 846-847, quoting Rubinberg v Walker, 252 AD2d 466, 467).

The fifth cause of action failed to adequately plead that, but for the defendant’s alleged negligence, the plaintiff would have obtained a more favorable outcome. The plaintiff merely alleged that had the defendant shared with him information imparted by Ameriprise’s attorney concerning the low rate of success of challenges to note collection proceedings, he would have insisted on settlement discussions (see Katsoris v Bodnar & Milone, LLP, 186 AD3d at 1506; Janker v Silver, Forrester & Lesser, P.C., 135 AD3d 908, 909; see also Bauza v Livington, 40 AD3d 791, 793). “Conclusory allegations of damages or injuries predicated on speculation cannot suffice for a malpractice action” (Bua v Purcell & Ingrao, P.C., 99 AD3d at 848; see Janker v Silver, Forrester & Lesser, P.C., 135 AD3d at 909).”

We have long observed that legal malpractice defendants, who must act according to rules devised by attorneys, and are judged by attorneys, enjoy a greater latitude in professional malpractice litigation than, say, doctors, accountants and other professionals. Though essentially anecdotal, the evidence is compelling.  That said, Bei Yang v Pagan Law Firm, P.C.
2022 NY Slip Op 22130 [75 Misc 3d 757]  April 25, 2022 Kraus, J. Supreme Court, New York Count seems to us to be compelling evidence.  There, violations of disciplinary rules were found, yet summary judgment granted against plaintiff.

“In this action and in her pleadings, plaintiff originally alleged many aspects of defendants’ representation in the prosecution of the personal injury case constituted malpractice. In opposition to defendants’ motion, plaintiff has essentially narrowed her allegations to a single claim, that defendants forced her to settle the case by pressuring her, threatening to withdraw as her attorneys if the case did not settle and demanding that she front $30,000 in trial costs in [*4]order to move ahead with the trial. Plaintiff asserts these actions essentially forced her to accept the settlement, because she was unable to find new counsel so late in the litigation, and she felt it was clear defendants did not want to proceed to trial.

Defendants have failed to submit affidavits on the motion denying these claims of coercion. Defendants submit an expert affirmation from Michael Zuller, Esq., that incorrectly alleges that there is no claim or allegation that plaintiff was coerced into accepting the settlement offer. Mr. Zuller opines that defendants did not depart from the applicable standard of care in prosecuting the underlying action, and that plaintiff cannot show the “but for” proximate causation element in establishing actual non-speculative damages. Mr. Zuller further opines that the underlying action would have been risky to try and cites that a significant percentage of medical malpractice trials result in a defense verdict.

Plaintiff’s unopposed allegations regarding the coerced settlement, including the threat by defendants to withdraw from representation and the demand that plaintiff front trial{**75 Misc 3d at 762} costs in contravention of the parties’ retainer agreement, do indeed suggest ethical breaches on the part of defendants.

However, the violation of a disciplinary rule or ethical obligations does not, without more, generate a cause of action for legal malpractice (Guiles v Simser, 35 AD3d 1054, 1056 [2006]; Weintraub v Phillips, Nizer, Benjamin, Krim, & Ballon, 172 AD2d 254 [1991]). To succeed on her legal malpractice claim, plaintiff would be required to prove that defendants were negligent in their legal representation, that their negligence was a proximate cause of her loss and that she sustained actual and ascertainable damages (see Ehlinger v Ruberti, Girvin & Ferlazzo, 304 AD2d 925, 926 [2003]).

Plaintiff’s own expert does not dispute Mr. Zuller’s opinion that the action would be risky to try and that a trial may have resulted in a defense verdict or a verdict lower than the settlement amount. In his affirmation, Mr. Bower states:

“As such, the issue is not whether the settlement was adequate or reasonable, a fair amount or not, but simply whether the client’s assent was properly obtained. Whether accepting the offer was wise or foolish, and whether the settlement amount is fair or not, is entirely besides the point. In this case, the client’s consent was not voluntarily or freely given. Her assent was only obtained ‘under the gun.’ . . .

“Predictably, the defense contends that the settlement amount herein was very favorable to the plaintiff, perhaps more than would be recovered at trial, and certainly more than if the trial went badly. All of that may be true, but all of that is totally irrelevant, nonetheless. The wisdom of the client’s choice is not the legal test that matters herein. All that matters is whether the consent to settle was freely given. If freely given, the settlement is valid and binding, regardless of the amount. If not freely given, the settlement was improperly obtained, regardless of the amount.” (Emphasis added.)

While the issue of whether plaintiff would have received a greater amount of money if she went to trial may be “irrelevant” to ethical considerations, it is not irrelevant to the pending malpractice claim. The concession of plaintiff’s own expert that it is possible that plaintiff would not have recovered more money or even that plaintiff may have recovered less money if{**75 Misc 3d at 763} she proceeded to trial underscores that plaintiff will be unable at trial to establish that but for the settlement a trial would have resulted in a verdict in excess of 1.3 million dollars. (See e.g. Gallet, Dreyer & Berkey, LLP v Basile, 141 AD3d 405 [2016] [holding summary judgment dismissing [*5]the legal malpractice claim appropriately granted where the asserted damages are vague, unclear, or speculative]; Bellinson Law, LLC v Iannucci, 102 AD3d 563 [1st Dept 2013].)

While plaintiff cites to cases where a legal malpractice claim was held viable despite a settlement in the underlying action (Cohen v Lipsig, 92 AD2d 536 [2d Dept 1983]; Lattimore v Bergman, 224 AD2d 497 [2d Dept 1996]; Mazzei v Pokorny, Schrenzel & Pokorny, 125 AD2d 374 [1986]), these cases are distinguishable as none relate to a claim where the attorneys pressured a client to enter into a settlement; rather the cases cited involve circumstances where the settlement was required due to an error committed by counsel in their representation in the underlying action.

Thus even if the ethical breach alleged constituted malpractice, the inability of plaintiff to establish actual and ascertainable damages requires dismissal of the action.”

 

Can an associate attorney be sued personally, along with the law firm?  FTF Lending, LLC v Mavrides, Moyal, Packman & Sadkin, LLP
2022 NY Slip Op 02946 [205 AD3d 414],    May 3, 2022  Appellate Division, First Department gives a short lucid answer.

“Defendants do not dispute that the complaint, which asserts a cause of action for legal malpractice, sufficiently alleges that Weinberger, an associate attorney, acted negligently while performing legal services on behalf of defendant law firm. Thus, dismissal of the complaint as against Weinberger is not warranted under the Partnership Law (Partnership Law § 26 [c] [i]; see e.g. Scarborough v Napoli, Kaiser & Bern, LLP, 63 AD3d 1531, 1532 [4th Dept 2009]) or the common-law doctrine of respondeat superior (see Reliance Ins. Co. v Morris Assoc., 200 AD2d 728, 730 [2d Dept 1994]; Jones v Archibald, 45 AD2d 532, 535 [4th Dept 1974]; accord Restatement [Third] of Agency § 7.01)”

Genesis REOC Co., LLC v Poppel  2022 NY Slip Op 02947 [205 AD3d 415]  May 3, 2022  Appellate Division, First Department is the unusual case in which the Appellate Division reads the complaint in a legal malpractice case without unduly constricting the claims.  Here, it finds that the complaint and the affidavit show privity, proximity and potential damage.

“Defendants’ argument that the amended complaint does not allege facts sufficient to establish an attorney/client relationship is unavailing, given the affidavits by plaintiffs’ principal, Andrew Stone, submitted in opposition to defendants’ motions, describing the parties’ relationship and defendants’ agreement to represent plaintiffs (see Rushaid v Pictet & Cie, 28 NY3d 316, 327 [2016]). Nor is it dispositive that plaintiffs and the Williams Defendants did not have a retainer agreement with respect to the engagement, given Stone’s explanation of the agreement he had with the Williams Defendants, the advice they gave him, the acts he undertook as part of the Williams Defendants’ engagement, and his reliance on their advice (see Pellegrino v Oppenheimer & Co., Inc., 49 AD3d 94, 99 [1st Dept 2008]).

The amended complaint and the affidavits sufficiently allege negligent representation. Plaintiffs allege that defendants had an undisclosed scheme to advance the interests of nonparty Karim Hutson and his wholly owned entities over plaintiffs’ interests, that they structured their investments in the relevant real estate projects so that the economic benefits of those projects were diverted to Hutson, and that they failed to disclose their conflict of interest while assuring plaintiffs that their financial interests would be protected (see e.g. Yuko Ito v Suzuki, 57 AD3d 205, 207-208 [1st Dept 2008]).

The amended complaint and the affidavits sufficiently allege proximate cause. Plaintiffs allege not simply that defendants made an error in judgment but that they actively and surreptitiously assisted Hutson in diverting funds away from plaintiffs (see Lappin v Greenberg, 34 AD3d 277, 279 [1st Dept 2006]). To the extent defendants rely upon evidence that other factors contributed to the loss, that simply raises an issue of fact not to be determined on the pleadings (Voluto Ventures, LLC v Jenkens & Gilchrist Parker Chapin LLP, 46 AD3d 354, 355 [1st Dept 2007]).

We reject defendants’ argument that the settlement agreements in a separate action against Hutson negated the element of proximate cause. Plaintiffs’ claims against defendants were expressly excluded from the settlement agreements in the Hutson action (see e.g. Maxwell Partners, L.L.C. v Building Studio, LLP, 32 AD3d 321, 324 [1st Dept 2006]).”

AmTrust N. Am., Inc. v Pavloff  2022 NY Slip Op 02862 (204 AD3d 599]  April 28, 2022 Appellate Division, First Department demonstrates the high bar to a Judiciary Law §487 claim.  Deceit is not enough.  It must be “egregious.”

“The amended complaint states a cause of action for legal malpractice and the documents submitted do not utterly refute the factual allegations underlying that cause of action (see generally Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]; Leon v Martinez, 84 NY2d 83, 87-88 [1994]; Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]; CPLR 3211 [a] [1], [7]). Dismissal of the cause of action for violation of Judiciary Law § 487 (1) is, however, warranted. The amended complaint does not allege, and the documents submitted do not indicate, that defendant Sherri Pavloff’s statement at the August 2017 proceeding in the underlying motor vehicle accident action was untrue. Even assuming Pavloff’s statement was deceitful, it is not sufficiently egregious to support a section 487 (1) cause of action (e.g. Mazzocchi v Gilbert, 185 AD3d 438, 438 [1st Dept 2020], lv denied 37 NY3d 908 [2021]; Shawe v Elting, 161 AD3d 585, 588 [1st Dept 2018], lv denied 32 NY3d 907 [2018]).”

 

Markov v Barrows  2022 NY Slip Op 04780 Decided on August 02, 2022 Appellate Division, First Department  could be a law school lesson on the meaning of the “but for” causation required in legal malpractice cases.

“Order, Supreme Court, New York County (Margaret A. Chan, J.), entered April 21, 2020, which, to the extent appealed from as limited by the briefs, granted defendant Michael Barrows, Esq.’s CPLR 3211(a)(7) motion to dismiss the legal malpractice claim, unanimously affirmed, without costs. Order, same court (Frank P. Nervo, J.), entered April 29, 2021, which, to the extent appealed from, denied plaintiff’s motion for leave to amend the complaint, unanimously affirmed, without costs.

This legal malpractice action stems from defendant’s representation of plaintiff in a prior action in which plaintiff sought to recover damages he allegedly sustained after purchasing at auction a particular medal that he asserted was worth far less than his winning bid. Plaintiff alleges that defendant failed to timely sue the proper parties — namely, Stack’s LLC and its auctioneers — leading to the dismissal of the prior action and precluding any recovery by plaintiff for alleged misrepresentations by Stack’s and the auctioneers regarding the materials comprising the medal.

Supreme Court properly dismissed plaintiff’s legal malpractice cause of action in the original complaint because he failed to allege that “but for” defendant’s negligent conduct, he would have prevailed in the underlying action (Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 272 [1st Dept 2004]; see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]). Plaintiff’s citation to a ruling in the underlying action denying dismissal of his fraud claim, among others, did not, without more, show that he would have prevailed in the underlying action had defendant timely commenced it by naming the proper parties in the original complaint (see Sonnenschine v Giacomo, 295 AD2d 287, 287 [1st Dept 2002]).”

“Plaintiff could not have prevailed in the underlying action — and, therefore, cannot prevail in this legal malpractice action (see Warshaw Burnstein Cohen Schlesinger & Kuh, LLP v Longmire, 106 AD3d 536, 536 [1st Dept 2013]) — because plaintiff’s fraud and breach of contract claims against Stack’s and the auctioneers would have been flatly defeated by the various disclaimers and conditions in the terms of sale contained in the auction catalog.

By placing a bid in the auction, plaintiff, a numismatic dealer who buys, sells, and collects Russian coins and medals, acknowledged receipt of the auction catalog and agreed to adhere to the terms of sale (see Terms of Sale ¶¶ 5, 40). Bidders were “encouraged to carefully examine all lots prior to sale,” because the lots would not be shown at the sale (Terms of Sale ¶ 15, see Terms of Sale ¶ 26). Stack’s assumed no liability for the facts stated concerning the items in the auction, except as specified in the terms of sale (Terms of Sale ¶¶ 15, 18[k]; see Terms of Sale ¶ 31 [“Stack’s hereby disclaims all liability for damages, incidental, consequential or otherwise, arising out of or in connection with the sale of any property by Stack’s to purchaser”]). While offering a limited warranty “that any numismatic item sold is authentic (i.e., not counterfeit, that its date or mintmark has not been altered, and that the coin has not been repaired as those terms are used in the trade),” Stack’s made clear that “all other warranties of authenticity of authorship, whether express or implied, [were] disclaimed” (Terms of Sale ¶ 16). Elsewhere in the terms of sale, Stack’s warned bidders (in bold text) that, “[e]xcept as otherwise expressly stated in the Terms of Sale, Stack’s and its agents and employees make no warranties or guaranties or representations, and expressly disclaim all warranties and guaranties and representations, including, without limitation, a warranty of merchantability, in connection with any numismatic properties sold by Stack’s” (Terms of Sale ¶ 18[h]; see Terms of Sale ¶ 18[i] [“All oral and written statements made by Stack’s are statements of opinion only and are not warranties or representations of any kind, unless stated as a specific written warranty, and no employee or agent of Stack’s has authority to vary or alter these Terms of Sale . . .”]).”

Spiegel v Hawco    2022 NY Slip Op 32431(U)  July 21, 2022  Supreme Court, New York County  Docket Number: Index No. 159930/2015  Judge: Shlomo Hagler is a legal malpractice case arising from a landlord-tenant matter which went awry after plaintiff agreed to be bought out of a rent-controlled apartment lease on West Grove Street.  Plaintiff loses, basically, because there were too many hands in the settlement of the landlord-tenant.

“In the Complaint, plaintiff alleges that “plaintiff was pressured into signing said stipulation settlement without being given adequate time, and without having fully read it
through” and that Hawco “pressured [her] to settle the lawsuit rather than go to trial” and ”threatened to withdraw as plaintiff’s counsel, and leave plaintiff without representation, if
plaintiff would not agree to settle the proceeding” (Complaint ,r,r 12-15 [NYSCEF Doc. No. 1]). The Complaint alleges that the Stipulation recovered no·damages for plaintiff and would require her to separately litigate for damages, the $60,000 payment was far less than the legal fees plaintiff incurred in defending the subject lease and that the Stipulation failed to include provisions setting forth for events of default (Id. at ,r,r 18-21 ). Plaintiff further contends that Hawco failed to advise her of the tax ramifications of the Stipulation (Id. at ,r 28). At the time plaintiff’s complaint was filed on September 28, 2015, plaintiff alleges that she had never received payment of the $60,000 provided for in the Stipulation. ”

“Here, defendant has established his prima facie entitlement to judgment as a matter of law on grounds that plaintiffs claims against him for legal malpractice have no merit and his
conduct was not the cause of any actual and ascertainable damages to plaintiff. Defendant presents an Affidavit and the subject Stipulation settling the Housing Court Proceeding, which most significantly, is signed by plaintiff (NYSCEF Doc. No. 46). Furthermore, defendant’s Verified Answer, quotes in full a letter, dated October I, 2012, from defendant to plaintiff
informing plaintiff that as a result of the foregoing Settlement, the work defendant was retained to do was complete and seeking costs and expenses (the “October I Letter”). The October 1 Letter also provides that plaintiff”read the Stipulation of Settlement to [her] Supreme Court attorney during a telephone conversation [she] had with him, while [ she was] in Housing Court and before [she] signed it, and … he made some changes to it and then approved it” (Verified Answer at, 28 [NYSCEF Doc. No. 43].4 In addition, defendant proffers the Judge Wendt Order, wherein Judge Wendt directed the parties to fully comply with the Stipulation settling the Housing Court Proceeding (NYSCEF Doc. No. 47). As such, defendant met his prima facie burden establishing lack of negligence.

Moreover, defendant has established prima facie an absence of proximate cause between his conduct and plaintiffs alleged damages (Global Bus. Inst. v Rivkin Radler LLP, 101 AD3d
651, 651-652 [1 st Dept 2012] [internal quotation and citation omitted]); Von Duerring v Hession & Belco.ff, 71 AD3d 760, 760 [2d Dept 2010]; Carrasco v Pena & Kahn, 48 AD3d 395, 396 [2d Dept 2008]). Given that plaintiff knowingly and with legal assistance from another attorney accepted the terms of the Stipulation, plaintiff’s claims that her damages constituting the failure of the landlord to remit the $60,000 and loss of the value of the leased Apartment could be attributable to defendant’s conduct, are entirely conclusory.

In opposition, plaintiff fails to raise an issue of fact. It is uncontroverted that plaintiff signed the Stipulation. “Since plaintiff was competent to execute the settlement agreement, and
no fraud is alleged, he is responsible for his signature and is bound to read and know what he signed” (Beattie v Brown & Wood, 243 AD2d 395, 395 [1 st Dept 1997]). Plaintiff has also
failed to refute the evidence that before she signed the Stipulation, she consulted with her ‘Supreme Court attorney’ by telephone who purportedly made changes to the Stipulation before it was executed. Plaintiffs allegations that somehow Hawco abandoned her in the middle of the case is belied by the fact that there is no evidence in the record that she responded to his letter of October 1, 2012 informing her that his representation was concluded due to the settlement of the matter. Although plaintiff alleges dissatisfaction with the Stipulation, plaintiff never made a motion or otherwise sought to vacate the Stipulation. However, even had plaintiff sought such relief, she would have been unsuccessful in view of Judge Wendt’s determination on October 12,2012 (NYSCEF Doc. No. 47) with respect to Ween’s charging lien, directing the parties to
comply with the Stipulation.

Plaintiff’s allegations that defendant pressured or coerced her into settling, that she was forced to sign, that defendant induced her into forfeiting her lease and that defendant threatened· that he would withdraw as counsel if plaintiff did not settle are entirely conclusory. Plaintiff failed to particularize such allegations of duress, and it is uncontroverted that she signed the Stipulation and even consulted her ‘Supreme Court attorney’.”