In this odd case, Feng Li v Shih  2022 NY Slip Op 04293  Decided on July 6, 2022  Appellate Division, Second Department  Plaintiff is an attorney who was disbarred in New Jersey and suspended in New York.  He turns around and sues another attorney claiming that the proceedings in New Jersey were malicious, an abuse of process  and intentional infliction of emotional distress.  All the claims fail.

“The plaintiff represented a number of clients in a lawsuit that resulted in a substantial judgment. The proceeds of the judgment were received by the plaintiff and deposited into his trust account. The plaintiff and the clients disagreed as to whether the plaintiff’s legal fees should be calculated pursuant to the terms of the retainer agreement they had signed or pursuant to New York’s contingency fee rules, and as to whether funds collected prior to the plaintiff’s representation of the clients should be included in that calculation as well (see Matter of Feng Li v Knight, 201 AD3d 1048, 1048-1049). Before the fee dispute had been resolved, the plaintiff unilaterally disbursed approximately $1.2 million of the amount collected on behalf of the clients to himself and thereafter used the disputed funds to pay off foreign debts (see Feng Li v Peng, 161 AD3d 823, 824; Feng Li v Peng, 516 BR 26, 32 [Bankr D NJ], affd 610 Fed Appx 126 [3d Cir]). The plaintiff “was subsequently disbarred in New Jersey and suspended from the practice of law in New York for misappropriating the disputed portion of his legal fee” (Feng Li v Peng, 161 AD3d at 824; see Matter of Feng Li, 149 AD3d 238; In re Feng Li, 201 NJ 523, 65 A3d 254). The fee dispute concluded in 2015 when a New Jersey court entered a judgment in favor of the clients and against the plaintiff in the total sum of approximately $1 million.

The plaintiff subsequently commenced this action against the defendant, an attorney who represented the plaintiff’s former clients in a number of actions and proceedings arising out of the fee dispute. The complaint asserted eight causes of action, sounding in malicious prosecution, abuse of process, prima facie tort, and intentional infliction of emotional distress, among other things. The complaint alleged that the plaintiff justifiably disbursed the disputed portion of the fee to himself, and that the defendant, despite knowing this to be true, pursued relief on the clients’ behalf in the New Jersey action that resulted in the money judgment and in two attorney discipline proceedings that resulted in the plaintiff’s disbarment in New Jersey and suspension in New York. The defendant moved, inter alia, pursuant to CPLR 3211(a) to dismiss the complaint. The plaintiff opposed the motion, and separately moved pursuant to CPLR 3025(b) for leave to supplement the complaint by adding a cause of action to recover treble damages under Judiciary Law § 487 and allegations that the defendant falsely accused the plaintiff of misappropriating client funds and misrepresenting the terms of the retainer agreement in communications with a number of courts and other bodies.

In an order dated December 10, 2019, the Supreme Court, inter alia, granted that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(7) to dismiss the complaint on the ground that the defendant’s filing of ethics complaints was absolutely privileged (see Wiener v Weintraub, 22 NY2d 330, 331-332). In an order dated December 11, 2019, the court denied the plaintiff’s motion pursuant to CPLR 3025(b) for leave to supplement the complaint. The defendant appeals from both orders. We affirm, albeit for different reasons than those relied upon by the Supreme Court.”

“Nevertheless, the defendant was entitled to dismissal of the entire complaint. “The doctrine of collateral estoppel, a narrower species of res judicata, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action 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). “‘Collateral estoppel comes into play when four conditions are fulfilled: (1) the issues in both proceedings are identical, (2) the issue in the prior proceeding was actually litigated and decided, (3) there was a full and fair opportunity to litigate in the prior proceeding, and (4) the issue previously litigated was necessary to support a valid and final judgment on the merits'” (Wilson v City of New York, 161 AD3d 1212, 1216, quoting Conason v Megan [*2]Holding, LLC, 25 NY3d 1, 17). Here, numerous courts, including this Court, have determined that the plaintiff may not relitigate the merits of the fee dispute with his former clients and the question of whether he misappropriated their funds (see e.g. Matter of Feng Li v Knight, 201 AD3d at 1048-1051; Feng Li v Peng, 161 AD3d at 825-826; Feng Li v Lorenzo, 2016 WL 10679578, *2 [SD NY, No. 16-CV-4092 (CM)], affd on other grounds, 712 Fed Appx 21 [2d Cir]; Feng Li v Peng, 516 BR at 42-48; Peng v Law Off. of Feng Li, 2017 WL 1166454, *6, 2017 NJ Super Unpub LEXIS 800, *15-16 [NJ Super, Docket No. A-3280-14T2]). The plaintiff’s first through fourth causes of action are all renewed attempts to relitigate these issues. Consequently, these causes of action are barred under the doctrine of collateral estoppel.

The plaintiff does not otherwise have a cause of action to recover damages from the defendant. New York does not recognize independent causes of action for punitive damages (see Gershman v Ahmad, 156 AD3d 868, 868) or civil conspiracy (see Palmieri v Perry, Van Etten, Rozanski & Primavera, LLP, 200 AD3d 785, 788), and the plaintiff does not identify an actionable, underlying tort that might otherwise warrant recovery under these causes of action or his aiding and abetting cause of action. Moreover, “‘there is no private right of action against an attorney or law firm for violations of the Code of Professional Responsibility or disciplinary rules'” (Karimian v Karlin, 173 AD3d 614, 616, quoting Weinberg v Sultan, 142 AD3d 767, 769; see DeStaso v Condon Resnick, LLP, 90 AD3d 809, 814).

As for the plaintiff’s motion pursuant to CPLR 3025(b) for leave to supplement the complaint, “[m]otions for leave to amend the pleadings and motions for leave to supplement the pleadings are generally governed by the same standard[ ]” (Maulella v Maulella, 90 AD2d 535, 537; see CPLR 3025[b]). “A party may amend his or her pleading, or supplement it by setting forth additional or subsequent transactions or occurrences, at any time by leave of court or by stipulation of all parties. Leave shall be freely given upon such terms as may be just” (CPLR 3025[b]). Leave “‘should be granted where the amendment [or supplement] is neither palpably insufficient nor patently devoid of merit, and any claimed delay in seeking the amendment [or supplement] does not prejudice or surprise the opposing party'” (Ridgewood Sav. Bank v Glickman, 197 AD3d 1189, 1191, quoting American Bldrs. & Contrs. Supply Co., Inc. v US Allegro, Inc., 177 AD3d 836, 838). Here, the proposed supplement to the complaint seeking to add a cause of action under Judiciary Law § 487 was “patently devoid of merit” (McIntosh v Ronit Realty, LLC, 181 AD3d 579, 580; see Kaufman v Moritt Hock & Hamroff, LLP, 192 AD3d 1092, 1092-1093).”

Frydco Capital Group, LLC v Carlton Fields, P.A.  2022 NY Slip Op 02619 [204 AD3d 532] April 21, 2022 Appellate Division, First Department  is a picture of two wholly different stories.  Plaintiff’s story survived a motion to dismiss, only to be vanquished by Defendants’ story on appeal.

“The legal malpractice claims should have been dismissed pursuant to CPLR 3211 (a) (7) on the ground that plaintiffs failed to plead how defendants’ alleged acts or omissions proximately caused plaintiffs to sustain any loss in connection with a Florida real estate transaction (see Pellegrino v File, 291 AD2d 60, 63-64 [1st Dept 2002]).

In addition, the legal malpractice claims should have been dismissed pursuant to CPLR 3211 (a) (1). Defendants submitted documentary evidence, including the purchase agreement for the property and the seller’s partial assignment of its interests in that agreement, that refutes plaintiffs’ allegations that the seller’s alleged breach of the purchase agreement prevented the closing from occurring, resulting in plaintiffs’ loss of the increased value of the property (see Ladera Partners, LLC v Goldberg, Scudieri & Lindenberg, P.C., 157 AD3d 467, 467 [1st Dept 2018]). The purchase agreement between plaintiff Southside and the seller explicitly permitted the seller to engage in a section 1031 transfer, required Southside to cooperate and did not prohibit the seller from assigning its interest as long as it did not allow another party to acquire the property. The assignment agreement between the seller and the assignee clearly bound the assignee to all of the seller’s obligations to plaintiffs. Moreover, the assignment agreement and correspondence from seller’s counsel made clear that it was not the seller who delayed and prevented the closing, but rather, plaintiff Frydco, Southside’s managing member, which did so unilaterally.

Plaintiffs’ new theory of causation, that plaintiffs’ position in prior litigation with the seller was weakened by an unauthorized consent to the assignment signed by Southside’s former manager with defendants’ knowledge, is unpreserved for appellate review as it is raised for the first time on appeal. In any event, this new theory of causation is equally speculative concerning how defendants proximately caused any loss to plaintiffs, who now acknowledge that they elected not to close and to instead seek return of their down payments and other damages from the seller. It is thus insufficient to state a claim for legal malpractice.”

Previously, we looked at the Judiciary Law § 487 claims.  Legal Malpractice Claims were also brought in Joseph v Fensterman  2022 NY Slip Op 02398 [204 AD3d 766] April 13, 2022
Appellate Division, Second Department.

“Contrary to the plaintiffs’ contention, the Supreme Court properly granted that branch of the defendants’ motion which was to dismiss the third cause of action, to recover damages for legal malpractice against the law firm, Howard Fensterman, Robert Fensterman, Kathleen Eisman, as executor of the estate of Steven J. Eisman, and Patrick Formato (hereinafter collectively the Operating Company attorneys) based upon their representation of Martin Farbenblum and Bacchi in the Bay Park Operating Company acquisition. “ ’To state a cause of action to recover damages for legal malpractice, a plaintiff must allege: (1) that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession; and (2) that the attorney’s breach of the duty proximately caused the plaintiff actual and ascertainable damages’ ” (Lopez v Lozner & Mastropietro, P.C., 166 AD3d 871, 873 [2018], quoting Dempster v Liotti, 86 AD3d 169, 176 [2011]).

“ ’An action to recover damages arising from legal malpractice must be commenced within three years, computed from the time the cause of action accrued to the time the claim is interposed’ ” (Schrull v Weis, 166 AD3d 829, 831 [2018], quoting 3rd & 6th, LLC v Berg, 149 AD3d 794, 795 [2017]; see CPLR 214 [6]). “In moving to dismiss a cause of action pursuant to CPLR 3211 (a) (5) as barred by the applicable statute of limitations, the moving defendant bears the initial burden of demonstrating, prima facie, that the time within which to commence the cause of action has expired. The burden then shifts to the plaintiff to raise a question of fact as to whether the statute of limitations is tolled or is otherwise inapplicable” (Schrull v Weis, 166 AD3d at 831 [internal quotation marks omitted]; see Stein Indus., Inc. v Certilman Balin Adler & Hyman, LLP, 149 AD3d 788, 789 [2017]).

Pursuant to the doctrine of continuous representation, “ ’the time within which to sue on the [cause of action] is tolled until the attorney’s continuing representation of the client with regard to the particular matter terminates’ ” (Stein Indus., Inc. v Certilman Balin Adler & Hyman, LLP, 149 AD3d at 789, quoting Aqua-Trol Corp. v Wilentz, Goldman & Spitzer, P.A., 144 AD3d 956, 957 [2016]). “For the continuous representation doctrine to apply, ‘there must be clear indicia of an ongoing, continuous, developing, and dependant relationship between the client and the attorney’ ” (Stein Indus., Inc. v Certilman Balin Adler & Hyman, LLP, 149 AD3d at 789, quoting Luk Lamellen U. Kupplungbau GmbH v Lerner, 166 AD2d 505, 506 [1990]; see Schrull v Weis, 166 AD3d at 831).

Here, the defendants demonstrated, prima facie, that the third cause of action was untimely. In opposition, the plaintiffs failed to raise a question of fact as to whether the continuous representation doctrine or any other legal basis applied to toll the statute of limitations (see Potenza v Giaimo, 165 AD3d 1186, 1187-1188 [2018]). Although the amended complaint alleged that the Operating Company attorneys told the plaintiffs they would return Martin Farbenblum and Bacchi’s full 10% interests to them through 2013, there is no allegation that the Operating Company attorneys provided legal representation to the plaintiffs after 2009. “Application of the continuous representation . . . doctrine is . . . generally limited to the course of representation concerning a specific legal matter,” not merely a continuing relation between the attorney and client (Shumsky v Eisenstein, 96 NY2d 164, 168 [2001]).

The Supreme Court should have denied that branch of the defendants’ motion which sought dismissal of the fourth cause of action, to recover damages for legal malpractice against the law firm, Howard Fensterman, and Lichtenstein based upon their representation of the plaintiffs in the New Franklin litigation. As an initial matter, the record raises “a question of fact as to whether the applicable statute of limitations was tolled by the continuous representation doctrine” (Stein Indus., Inc. v Certilman Balin Adler & Hyman, LLP, 149 AD3d at 790). Moreover, “accepting the facts alleged in the complaint as true, and according the plaintiff[s] the benefit of every possible favorable inference, the plaintiff[s] stated a cause of action to recover damages for legal malpractice” (Lopez v Lozner & Mastropietro, P.C., 166 AD3d at 873).

[*4] The Supreme Court properly granted that branch of the defendants’ motion which was to dismiss the fifth cause of action, to recover damages for legal malpractice against the law firm, Howard Fensterman, Formato, and Mark Frimmel based upon their representation of the plaintiffs during the acquisition of the property on which the Bayview Nursing and Rehabilitation Center is located. Accepting the allegations in the amended complaint as true, the fifth cause of action failed to set forth facts sufficient to allege that those defendants’ purported negligence proximately caused the plaintiffs to sustain actual and ascertainable damages (see Keness v Feldman, Kramer & Monaco, P.C., 105 AD3d 812, 813 [2013]; Siwiec v Rawlins, 103 AD3d 703, 704 [2013]).”

Kutzin v Katz  2022 NY Slip Op 04595 Decided on July 14, 2022 Appellate Division, Third Department is an example of the minute detailed examination which is made to the record in a legal malpractice case.  Plaintiff loses.

“In May 2016, plaintiff retained defendant to represent him in drafting a marital settlement agreement. Among other assertions, plaintiff claims that he instructed defendant to include a provision in the agreement allowing him to automatically recalculate his support obligations in the event that he became unemployed. Plaintiff and his wife executed the settlement agreement on June 17, 2016. Plaintiff subsequently lost his employment in May 2017 and sought directly from his wife a reduction in his support obligations, which she refused. Thereafter, plaintiff commenced a divorce action and moved to decrease his support obligations. Plaintiff’s wife, among other things, opposed plaintiff’s motion and cross-moved to set aside the settlement agreement for, among other reasons, fraud and duress resulting from defendant acting as plaintiff’s attorney despite the agreement naming him as mediator. Plaintiff’s wife also sought to set aside the agreement for its failure to include provisions concerning the support guidelines. Supreme Court (Cahill, J.), among other things, denied both motions, and plaintiff and his wife were divorced in December 2018.

In 2019, plaintiff commenced this legal malpractice action alleging that defendant included a provision in the agreement that he was acting as a mediator when he was not, that he failed to include a provision for the automatic recalculation of plaintiff’s support obligations as directed by plaintiff and failed to include disclosures and presumptive support calculations as required by the Domestic Relations Law. Following joinder of issue and discovery, plaintiff moved to strike defendant’s answer as a sanction for defendant’s spoliation of his handwritten notes taken at their May 2016 meeting, which allegedly would have proven that plaintiff requested an automatic downward modification of his support obligations. Defendant opposed the motion to strike and cross-moved for summary judgment dismissing the complaint, asserting that plaintiff could not prevail on his legal malpractice cause of action. In two separate orders, Supreme Court (Schick, J.) found that defendant engaged in spoliation of evidence but denied plaintiff’s motion to strike defendant’s answer in favor of allowing plaintiff an adverse inference at trial. Supreme Court, in an amended order, also granted defendant’s motion for summary judgment dismissing the complaint. Plaintiff appeals from the order addressing his motion to strike and the amended order granting summary judgment.”

“Plaintiff’s principal claim on appeal is that issues of fact exist as to whether he made a request of defendant to include a provision in the agreement for automatic recalculation of his support obligations, and Supreme Court was therefore precluded from granting defendant’s motion for summary judgment. “To succeed upon the legal malpractice claim, plaintiff was required to demonstrate that defendant[] failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, that this failure was the proximate cause of actual damages to plaintiff, and that . . . plaintiff would have succeeded on the merits of the underlying action but for the attorney’s negligence. Upon [his] application for summary judgment, defendant[] [was] required to present evidence in admissible form establishing that plaintiff is unable to prove at least one of these elements” (Hufstader v Friedman & Molinsek, P.C., 150 AD3d 1489, 1489-1490 [2017] [internal quotation marks and citations omitted]; see Mid-Hudson Val. Fed. Credit Union v Quartararo & Lois, PLLC, 155 AD3d 1218, 1219-1220 [2017], affd 31 NY3d 1090 [2018]; Huffner v Ziff, Weiermiller, Hayden & Mustico, LLP, 55 AD3d 1009, 1011 [2008]).

In support of his motion for summary judgment, defendant submitted the parties’ deposition testimony and copies of plaintiff’s emails. It is undisputed that plaintiff retained defendant as his attorney, that defendant did not act as a mediator, that defendant included a provision in the settlement agreement permitting plaintiff to seek a downward modification — but not an automatic decrease — of his support obligations upon his loss of employment, that the agreement did not contain requisite support guideline language and included blanks in the marital residence provision, that defendant forwarded the agreement to plaintiff and his wife but advised plaintiff that he had not proofread it, and that plaintiff and his wife signed the agreement before a notary public without seeking any changes and did not sign the agreement in the presence of defendant. Additionally, plaintiff’s deposition testimony demonstrated that plaintiff read the agreement and understood it. Emails between defendant and plaintiff also revealed that plaintiff understood that modifying his support obligations would require judicial involvement. Other evidence showed that, at the time plaintiff sought his downward modification of support obligations, plaintiff’s bank account totaled over $29,000, plaintiff’s wife’s bank account totaled approximately $59, plaintiff retained all of his retirement accounts in excess of $328,000 and plaintiff’s wife was also unemployed at the time.

Pursuant to Domestic Relations Law § 236 (B) (9) (b) (2) (i), as relevant here, a “court may modify [*4]an order of child support, including an order incorporating without merging an agreement or stipulation of the parties, upon a showing of a substantial change in circumstances.” “The parties are free, however, to agree to different terms triggering a change in the obligations of the payor spouse,” including the application of a different standard (Matter of Frederick-Kane v Potter, 155 AD3d 1327, 1329 [2017] [internal quotation marks and citations omitted]). However, “automatic” decreases and increases in child support and maintenance are improper (see Murray v Murray, 101 AD3d 1320, 1322-1323 [2012], lv dismissed 20 NY3d 1085 [2013]; O’Brien v O’Brien, 88 AD3d 775, 778 [2011]; White v White, 204 AD2d 825, 828 [1994], lv dismissed 84 NY2d 977 [1994]; Rubenstein v Rubenstein, 155 AD2d 522, 523 [1989]). Thus, defendant’s failure to include a provision in the agreement for “automatic” recalculation of plaintiff’s support obligations was of no import, as plaintiff was not entitled to same.”

Ward v Klein  2022 NY Slip Op 02153 [203 AD3d 1216] March 30, 2022 Appellate Division, Second Department represents the “no harm-no foul” analysis frequently applied to legal malpractice claims.  Attorneys are allowed to withdraw from representation and often do.  This fact pattern consistently appears in medical malpractice cases at about the time that the attorney must produce an expert.  When difficulty arises, attorneys often drop out.  Courts rarely allow a legal malpractice claim, in part, based on the successor counsel doctrine which says, in essence, that if successor counsel can solve the problem, then there is no case against the first attorney.  Here is a variant:

“The plaintiff, who held a master plumber license from the New York City Department of Buildings (hereinafter the DOB), retained the defendants to represent her with respect to disciplinary charges brought against her by the DOB. The DOB ultimately determined to revoke the plaintiff’s license, and she allegedly further retained the defendants to challenge that determination in a CPLR article 78 proceeding. According to the plaintiff, the defendants timely commenced that proceeding by filing a petition, and the proceeding was transferred to the Appellate Division, First Department. The plaintiff alleged that the defendants then discontinued their representation of her, just before an impending filing deadline. The plaintiff retained another attorney, who obtained an enlargement of time. The plaintiff alleged that she was ultimately successful in her CPLR article 78 proceeding before the First Department.

The plaintiff, pro se, commenced this action against the defendants, inter alia, alleging causes of action sounding in breach of contract, legal malpractice, breach of fiduciary duty, and fraud, all arising out of the defendants’ representation of her during the CPLR article 78 proceeding. The defendants moved pursuant to CPLR 3211 (a) to dismiss the complaint. In an order entered March 6, 2019, the Supreme Court granted the motion, and the plaintiff appeals.”

“Here, the plaintiff failed to state causes of action sounding in breach of contract, legal malpractice, breach of fiduciary duty, and fraud, as she failed to adequately allege the element of [*2]damages with respect to each of those causes of action (see Denisco v Uysal, 195 AD3d 989 [2021]; McSpedon v Levine, 158 AD3d 618, 621 [2018]; Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 848 [2012]; Smith v Chase Manhattan Bank, USA, 293 AD2d 598, 600 [2002]; see generally Greenberg v Joffee, 34 AD3d 426, 427 [2006]).”

Continuous representation tolls the running of the statute of limitations, which commences when the attorney mistake is made.  Continuous representation exists because it is inequitable to require a client to sue its attorney while the case is still ongoing.  That said, there are many requirements as can be seen in Walsh v Wallace Law Off.  2022 NY Slip Op 02218 [203 AD3d 684] March 31, 2022 Appellate Division, First Department.

“Defendants established prima facie that this legal malpractice action was time-barred, as it was commenced on May 26, 2020, more than three years from the date it accrued. The three-year statute of limitations began to run on March 16, 2017, when a consent to change attorney form was executed by plaintiff, defendant Wallace Law Office, and defendant Leav & Steinberg, LLP (L&S), the incoming counsel (CPLR 214 [6]; Frost Line Refrig., Inc. v Gastwirth, Mirsky & Stein, LLP, 25 AD3d 532, 532-533 [2d Dept 2006]). The form was also notarized by a name partner of L&S. This unambiguous written document constitutes documentary evidence that the attorney-client relationship between plaintiff and the Wallace defendants ended more than three years before plaintiff commenced this action (see Seaman v Schulte Roth & Zabel LLP, 176 AD3d 538, 539 [1st Dept 2019]).

We reject plaintiff’s argument that Supreme Court erred in failing to consider the doctrine of continuous representation. The complaint alleged no “clear indicia of an ongoing, continuous, developing[,] and dependent relationship between the client and the attorney” or a “mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim” (Matter of Merker, 18 AD3d 332, 332-333 [1st Dept 2005] [internal quotation marks omitted]). Equally unavailing is plaintiff’s speculative contention that discovery is required as to the nature, if any, of the Wallace defendants’ continuing involvement in plaintiff’s underlying personal injury lawsuit.”