The Appellate Division reversed the grant of summary judgment to defendants in Alrose Steinway, LLC v Jaspan Schlesinger, LLP  2022 NY Slip Op 03310 Decided on May 19, 2022 Appellate Division, First Department, knocking out each of the underpinnings.

“Plaintiff claims that defendants negligently failed to advise it that an amendment to a commercial lease would extinguish its purchase option upon sale of the premises and that, but for defendants’ negligence, it would not have signed the amendment but would have exercised its purchase option as of right between 2023 and 2024, acquiring the premises for no more than $11.4 million. It is undisputed that after the amendment was executed, the landlord received a bona fide third-party purchase offer and plaintiff exercised its right of first refusal, purchasing the premises for $14.5 million in 2016.

Issues of fact exist as to each element of plaintiff’s legal malpractice cause of action (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]). Defendants’ email attaching a marked-up copy of the relevant lease section does not establish as a matter of law that defendants advised plaintiff as to the meaning of the amendment, and the parties dispute the oral advice that was provided by defendants. Contrary to defendants’ contention, the fact that plaintiff’s agent read the amendment does not establish as a matter of law that defendants were not negligent (see Bishop v Maurer, 9 NY3d 910 [2007]; see e.g. Kram Knarf, LLC v Djonovic, 74 AD3d 628, 628 [1st Dept 2010]; Fielding v Kupferman, 65 AD3d 437 [1st Dept 2009]). Any evidence that plaintiff’s agent, a sophisticated businessman, knew or should have known that the amendment was substantive despite defendants’ advice that it was “housekeeping” does not disprove defendants’ negligence but is evidence that can be offered in mitigation of damages (see e.g. SF Holdings Group, Inc. v Kramer Levin Naftalis & Frankel LLP, 56 AD3d 281, 282 [1st Dept 2008]; Mandel, Resnik & Kaiser, P.C. v. E.I. Elecs., Inc., 41 AD3d 386, 388 [1st Dept 2007]).

Plaintiff’s theory of proximate cause is not impermissibly based on gross speculation as to future events (see e.g. VPC Projects, LLC v Golenbock Eiseman Assor Bell & Peskoe, LLP, 191 AD3d 623 [1st Dept 2021], lv denied 37 NY3d 909 [2021]). The fact that plaintiff sent the signed lease to the landlord without defendants’ knowledge does not as a matter of law refute causation. Defendants also failed to establish as a matter of law that plaintiff would not have been able to exercise its purchase option in 2023-2024. They also failed to establish as a matter of law that plaintiff was not actually damaged as a result of their negligence or that those damages were not ascertainable. To the extent defendants argue that plaintiff lacks standing, they waived that argument by failing to assert lack of standing in their answer or their pre-[*2]answer motion to dismiss (see CPLR 3211[a][3], [e]).”

A child dies and a claim of medical malpractice ensues.  The parents consent to an autopsy and certain of the child’s organs are not returned.  Apparently the medical malpractice claim founders in the absence of examination of the organs, besides which, the parents want to bury them.  They sue their personal injury law firm in Marinelli v Sullivan Papain Block McGrath & Cannavo, P.C.  2022 NY Slip Op 02994 Decided on May 4, 2022 Appellate Division, Second Department.

“The plaintiffs commenced this action against the defendant law firm, which had represented the plaintiffs in connection with a prior action to recover damages for medical malpractice in connection with the birth of their child (hereinafter the decedent). The plaintiffs alleged that they “retained the defendant to recover all of the organs removed” during an autopsy of the decedent which was conducted by New York Methodist Hospital (see Marinelli v New York Methodist Hosp., ___ AD3d ___ [decided herewith]), and “to pursue an action for medical malpractice.” In the first cause of action in the complaint, the plaintiffs alleged that the defendant failed to take certain steps to recover the subject organs, and that “had the defendant timely pursued recovery of the [subject] organs, the organs would have been available for return and burial and in fact, New York Methodist Hospital would have returned the organs to the plaintiffs for such burial.”

“Here, the complaint failed to adequately allege that the defendant’s breach of its professional duty proximately caused the plaintiffs to sustain actual damages. The plaintiffs alleged that New York Methodist Hospital (hereinafter the hospital) would have agreed to return the subject organs to the plaintiffs if the defendant had taken certain steps after it was retained. However, the plaintiffs’ contention “rests on speculation as to how [the hospital] would have responded to these [steps]” (Bua v Purcell & Ingrao, P.C., 99 AD3d at 848).

In support of its motion to dismiss the first cause of action in the complaint, the defendant submitted, among other things, a consent form (hereinafter the consent form), which was executed by the plaintiff Vito Marinelli. As we have determined in a related appeal (see Marinelli v New York Methodist Hosp., ___ AD3d ___ [decided herewith]), the consent form explicitly granted the hospital the authority to retain and dispose of the subject organs so long as the hospital considered such actions “appropriate” for the stated purpose of the autopsy, which included the general goal of “furthering medical knowledge.” The consent form thereby conferred “discretionary” authority on the hospital to determine “whether to remove and retain an organ for further [*2]examination and testing” (Cansev v City of New York, 185 AD3d at 896; see Shipley v City of New York, 25 NY3d 645, 654; cf. Zhuangzi Li v New York Hosp. Med. Ctr. of Queens, 147 AD3d 1115, 1117). The plaintiffs do not allege that they retained the defendant before the hospital exercised its discretion in this matter pursuant to the terms agreed upon in the consent form. In light of the discretion imparted by the consent form, “the plaintiff[s’] contention that the alleged malpractice resulted in legally cognizable damages is conclusory and speculative inasmuch as it is premised on decisions that were within the sole discretion of the [hospital]” (Bua v Purcell & Ingrao, P.C., 99 AD3d at 848; see AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 436; Dempster v Liotti, 86 AD3d at 180; Hashmi v Messiha, 65 AD3d at 1195; Wald v Berwitz, 62 AD3d at 787; Holschauer v Fisher, 5 AD3d at 554; Giambrone v Bank of NY, 253 AD2d 786, 787; see also Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 443; Dupree v Voorhees, 68 AD3d 810, 812-813). Under the circumstances, the Supreme Court properly granted the defendant’s motion pursuant to CPLR 3211(a) to dismiss the first cause of action in the complaint. Accordingly, we affirm the first order appealed from, dated July 13, 2017.”

In a very short decision, Supreme Court’s denial of dismissal was affirmed.  TF Lending, LLC v Mavrides, Moyal, Packman & Sadkin, LLP  2022 NY Slip Op 02946  Decided on May 03, 2022  Appellate Division, First Department stands for the proposition that an attorney working in a firm can be personally liable as well as the firm.

“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 [2006]). “

Genesis REOC Co., LLC v Poppel  2022 NY Slip Op 02947 Decided on May 03, 2022 Appellate Division, First Department is a case in which Plaintiff’s affidavit was prominently relied upon by the Court in determining that there was  scheme in place rather than an error of judgment.  The affidavit also demonstrated negligent representation.

“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, LLC, 46 AD3d 354, 355 [1st Dept 2007]).”

Anecdotally, we often receive calls in which the potential client tells us that the target attorneys “forced” them into settling.  It seems that the proper question to the potential client is probably whether the “force” was of a “gun to the head” variety, or merely overbearing talk.  Bei Yang v Pagan Law Firm, P.C.  2022 NY Slip Op 22130 Decided on April 25, 2022 Supreme Court, New York County Kraus, J. seems to be of the overbearing talk variety.

“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 $30,000.00 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 can not 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 a significant percentage of medical malpractice trial 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 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 Sismer 35 AD3d 1054, 1056; Weintraub v Phillips, Nizer, Benjamin, Krim & Ballon 172 AD2d 254). 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 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 eg 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 A.D.2nd 536 (Second Dept., 1983); Lattimore v. Bergman, 224 A.D.2nd 497 (Second Dept., 1996); Mazzei v. Pokorny, Schrenzel & Pokorny, 125 AD2d 374], 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 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.”

How deceitful must deceit be to qualify for Judiciary Law § 487 application?  AmTrust N. Am., Inc. v Pavloff  2022 NY Slip Op 02862 Decided on April 28, 2022 Appellate Division, First Department gives us some idea.

“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 § 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]).”

The vast number of sibling v. sibling cases involving parental estates should not be surprising, but Altman v DiPreta  2022 NY Slip Op 02774 Decided on April 27, 2022 Appellate Division, Second Department is an interesting case which alleged deceit over the location of a ward of a Court Appointed conservatee.

“In 2010, Jeanne Altman (hereinafter Jeanne) executed a durable power of attorney in favor of her two sons, Charles Altman (hereinafter Charles) and Edwin Altman (hereinafter Edwin). Following the deterioration of Jeanne’s mental faculties, Charles and Edwin had disagreements about her care. Charles retained the defendant Richard Slagle, a Connecticut attorney, to represent Jeanne. Charles then commenced a conservatorship proceeding in Connecticut, where Jeanne was then residing. By decree dated December 4, 2012, the Probate Court of Greenwich, Connecticut (hereinafter the Probate Court), appointed the defendant Richard S. DiPreta, a Connecticut attorney, as conservator of Jeanne’s estate, and appointed Charles as conservator of her person.

DiPreta subsequently petitioned the Probate Court for the removal of Charles as conservator of Jeanne’s person. By decree dated August 2, 2013, the Probate Court removed Charles as conservator, finding, inter alia, that Charles had improperly brought Jeanne from Connecticut to New York without court approval, and that Charles failed to act in Jeanne’s best interests.

In February 2014, Charles and Jeanne (hereinafter together the plaintiffs) commenced this action in New York against, among others, DiPreta and DiPreta Law Firm LLC (hereinafter together the DiPreta defendants), and Slagle, inter alia, to recover damages for legal malpractice, tortious interference with contractual relations, and violation of Judiciary Law § 487. In an amended complaint, the plaintiffs alleged, among other things, that the DiPreta defendants and Slagle engaged in “deceit and collusion” as part of a plan to retain control over Jeanne’s assets and withhold payments to Charles. The DiPreta defendants moved, among other things, pursuant to CPLR 3211(a)(7) to dismiss the causes of action alleging tortious interference with contractual relations and violation of Judiciary Law § 487 insofar as asserted against them. Slagle separately moved, inter alia, pursuant to CPLR 3211(a)(8) to dismiss the amended complaint insofar as asserted against him for lack of personal jurisdiction, and pursuant to CPLR 3211(a)(7) to dismiss the cause of action alleging violation of Judiciary Law § 487 insofar as asserted against him. In an order dated March 24, 2015, the Supreme Court, among other things, granted those branches of the separate motions. Charles appeals.”

“Under Judiciary Law § 487(1), an attorney who “[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party” is liable to the injured party for treble damages. “Judiciary Law § 487 ‘applies to an attorney acting in his or her capacity as an attorney, not to a party who is represented by counsel and who, incidentally, is an attorney'” (Pinkesz Mut. Holdings, LLC v Pinkesz, 198 AD3d 693, 698, quoting Oakes v Muka, 56 AD3d 1057, 1058). Here, the parties’ evidentiary submissions demonstrated that the DiPreta defendants did not act in their capacities as attorneys when they allegedly made deceitful statements. Accordingly, the Supreme Court properly granted that branch of the DiPreta defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the cause of action alleging violation of Judiciary Law § 487 insofar as asserted against them by Charles (see Smallwood v Lupoli, 107 AD3d 782, 784; Crown Assoc., Inc. v Zot, LLC, 83 AD3d 765, 768; Oakes v Muka, 56 AD3d at 1058).”