In Cohen Tauber Spievack & Wagner P.C. v Mehulol  Publs., LLC
2022 NY Slip Op 30401(U) February 1, 2022 Supreme Court, New York County Docket Number: Index No. 652426/2021 Judge Bluth determined the merits of a case alleging that the attorneys failed in both the Supreme Court case as well as in a Rabbinical court and never obtained “forgiveness” for the client.

“This attorneys’ fees case arises out of plaintiff’s representation of defendants. Plaintiff alleges that in February 2018, defendants hired plaintiff to represent them in a trademark infringement case in the Eastern District of New York. This case eventually settled on June 27, 2018. The parties offer wildly divergent views on the nature of the representation and the
underlying disputes.

Defendants claim that plaintiff was hired for two cases, the EDNY case and a rabbinical proceeding. Both involved the use and ownership of the name and logo “Biz Tank.” Although
the counterclaim does not provide much detail about the nature of the alleged counterclaim, defendants submit the affidavit of defendant Rabbi Yitzchok Frankfurter who asserts that
plaintiff informed him it could settle both disputes quickly. Rabbi Frankfurter complains about Here, the Court finds that defendants’ numerous complaints about plaintiff’s representation fails to state a counterclaim for legal malpractice. As an initial matter, it is unclear exactly how plaintiff erred in its representation of defendants sufficient to state a
counterclaim for legal malpractice.”

“Defendants detail how they are upset with plaintiff’s representation but do not allege that they have suffered any actual damages as a result. The undisputed factual contentions are that plaintiff secured a settlement on defendants’ behalf and defendants received a $2,500 payment. It seems that defendants were understandably upset with the statement from Mr. Klein demanding $1.5 million in order to effectuate forgiveness. But that statement did not invalidate the EDNY settlement. Plus, defendants do not claim they did anything in the EDNY case to vacate the settlement (such as hiring a new lawyer to bring such a motion). They apparently moved on after expressing their frustration with the Kleins’ statement.
Defendants do not allege that the Kleins refused to pay or that anything happened in the rabbinical proceeding. That the Kleins may do something in the future is not sufficient to state actual damages nor does it show that plaintiff was negligent (Kahan Jewelry Corp. v Rosenfeld, 295 AD2d 261, 261, 744 NYS2d 664 (Mem) [1st Dept 2002] [finding that pending foreclosure actions meant plaintiffs had not yet sustained any actual damages]). Clearly, there was (and might still be) animosity between defendants and the Kleins. But, as plaintiff observes, there has not been any adverse action against defendants in the three years since the settlement relating to the Biz Tank litigation.”

Plaintiff suffered a large loss in arbitration.  Several documents could have been offered, but were not.  Malpractice?

Supreme Court dismisses the claim in All Vision LLC v Paduano & Weintraub LLP  2022 NY Slip Op 30464(U) February 9, 2022 Supreme Court, New York County Docket Number: Index No. 653605/2021 Judge: Andrew Borrok finding that Federal Court considered the gist of the documents even absent the actual paper version of either of them.

“Upon the foregoing documents and for the reasons set forth on the record (2.7.22), Paduano & Weintraub LLP and Leonard Weintraub’s (collectively, the Defendants) motion pursuant to CPLR 3211 (a)(l) and (7) to dismiss must be granted. The plaintiff’s malpractice claim is based on the mistaken theory that the failure to submit either (i) the November 2016 Termination Letter or (ii) the 2017 audited financial statements would have changed United Stated District Court Judge (ret.) Shira A Scheindlin’s decision in an arbitration pursuant to which she, among other things, awarded $4,828,776.34 with post-judgment interest at the daily rate of $741.44 in favor of Mr. Micsak and $1,822,781.33 with post-judgment interest at the daily rate of $335.86 in favor of Mr. Andel and against All Vision LLC (All Vision), and $637,548 in favor of All Vision and against Mr. Andel. On the record before the court, each and every single of Mr. Andel’s alleged breaches set forth in the 2016 Termination Letter were squarely before Judge Scheindlin.

With respect to the claim that he breached the Contractor Agreement, Judge Scheindlin found that the agreement required notice and cure and Mr. Andel was provided with neither. Indeed, she found that Mr. Andel provided notice and an opportunity to cure under the Contractor Agreement that the plaintiff breached by failing to provide him his stock tracking agreement.

With respect to the Severance Agreement, Judge Scheindlin specifically found that there was no breach here either because the plaintiff was aware of Mr. Andel’s conduct when it occurred and may have condoned it and otherwise benefitted from it. Finally, with respect to the breach of fiduciary duty claim, Judge Sheindlin held that the plaintiff failed to meet its burden in showing that Mr. Andel in any way personally benefitted from the alleged conduct. Thus, the contents of the November 2016 Letter (i.e., the conduct and alleged breaches)  were considered by Judge Scheindlin, and the failure to provide the actual November 2016 Letter would not have changed the result. Judge Scheindlin’ s observation in footnote 5 in the decision that she does not see a retroactive termination in the record which the November 2016 Letter was nothing more than her observation that the plaintiff had seemed to rely solely on the breach of the Severance Agreement for the basis that Mr. Andel had forfeited his tracking stock which Severance Agreement required Mr. Andel to be in good standing under the Contractor Agreement. But, as stated above, because she specifically found that notice was required under the Contractor Agreement and that notice was not given, the result would have been the same, as no cure could have been effected as the November 2016 Letter was sent 6 months after termination.

The failure to submit the 2017 financial statements also can not serve as a predicate for a malpractice claim here because of a lack of proximate cause. As alleged, the plaintiff hired
replacement counsel after the initial award was issued and prior to the time that the final award was made. It is undisputed that the plaintiff made no attempt to submit the 2017 financial statements and otherwise made a strategic decision not to even attempt to expand the record. Had they made this request and Judge Scheindlin denied it then the plaintiff may well be able to address the nexus between the defendants’ failure to submit such statements and the impact it may have had on Judge Scheindlin’s decision. Stated differently, the claim fails because of the intervening independent representation of the replacement lawyers and their decision to make no attempt to have Judge Scheindlin consider the 2017 financial statements. As such, the nexus is simply too tenuous because Judge Scheindlin may well have permitted the submission of the 2017 financial statements. “

The difference between a sua sponte order and an order upon a motion made upon notice may be slim at times.  In Meyers v Becker & Poliakoff, LLP 2022 NY Slip Op 01246 Decided on February 24, 2022 Appellate Division, First Department the motion was discussed at a preliminary conference and defendants were told not to make the motion.  The difference is somewhat vague.

What is clearer is that the Appellate Division found substance in the complaint. “In any case, the verified complaint states a cognizable claim for legal malpractice, including that defendant’s negligence proximately caused plaintiff nonspeculative damages. The complaint alleges that defendant advised plaintiff to execute a consent order with the Connecticut Department of Banking, which required him to withdraw his registration as a broker-dealer agent in Connecticut and not to reapply for registration there for three years. This resulted in his being barred from the securities industry under the Securities Exchange Act of 1934 § 3(a)(39) (15 USC § 78c[a][39]; see 15 USC § 78o[b][4][H][i]). SEC and FINRA rulings decided before plaintiff entered into the consent order held that a three-year suspension by a state authority would result in a statutory disqualification and a bar from the securities industry. Thus, the complaint sufficiently alleges that but for defendant’s advice to sign the consent order, he would not have been barred from working in the securities industry.

Therefore, at this stage, dismissal was not warranted under CPLR 3211(a)(7), or under CPLR 3211(a)(1), as defendant failed to provide documentary evidence that “conclusively establishes a defense to the asserted claims as a matter of law” (Leon v Martinez, 84 NY2d 83, 88 [1994]; Amsterdam Hospitality Group, LLC v Marshall-Alan Assoc., Inc., 120 AD3d 431, 432-433 [1st Dept 2014])”

In EDJ Realty, Inc. v Siegel  2022 NY Slip Op 01147 Decided on February 23, 2022 Appellate Division, Second Department affirmed dismissal of a legal malpractice claim concerning a notice of appeal from a hybrid complaint against the DHCR.

“The defendant attorney represented the plaintiff in a hybrid proceeding pursuant to CPLR article 78 and action for declaratory relief commenced in the Supreme Court, Bronx County, to review a determination of the New York State Division of Housing and Community Renewal (hereinafter DHCR). The retainer agreement between the defendant and the plaintiff specifically excluded any services in pursuit of an appeal from an adverse determination in the hybrid proceeding/action. In July 2013, the defendant moved to a new office. In an order and judgment (one paper) dated November 12, 2013 (hereinafter the order and judgment), the Supreme Court, Bronx County, in effect, dismissed the action, denied the petition, and dismissed the proceeding, determining that DHCR’s determination was neither irrational nor arbitrary or capricious.

On November 21, 2013, DHCR served a copy of the order and judgment with notice of entry by regular first-class mail sent to the defendant’s former address. On December 12, 2013, the defendant emailed a copy of the order and judgment to the plaintiff. The defendant did not include a copy of the notice of entry, since he had not received that document at his new address. On August 25, 2015, the plaintiff’s new counsel filed a notice of appeal of the order and judgment. In an order dated November 24, 2015, the Appellate Division, First Department, granted DHCR’s motion to dismiss the plaintiff’s appeal as untimely.

In November 2016, the plaintiff commenced this action to recover damages for legal malpractice alleging, among other things, that because the defendant failed to advise DHCR of his change in address, the plaintiff did not receive a copy of the notice of entry and, thus, did not file a timely notice of appeal. The defendant moved for summary judgment dismissing the complaint, contending, inter alia, that his alleged negligence in failing to advise DHCR of his new address was not a proximate cause of the plaintiff’s damages because the plaintiff would not have prevailed on appeal. The Supreme Court, inter alia, granted the defendant’s motion, and the plaintiff appeals.”

“A plaintiff seeking to recover damages for legal malpractice must prove that the [*2]defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages. A defendant seeking summary judgment dismissing a legal malpractice cause of action has the burden of establishing prima facie that he or she did not fail to exercise such skill and knowledge, or that the claimed departure did not proximately cause the plaintiff to sustain damages” (Bakcheva v Law Offs. of Stein & Assoc., 169 AD3d 624, 625 [internal quotation marks omitted]). “The causation element requires a showing that the injured party would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence” (Aqua-Trol Corp. v Wilentz, Goldman & Spitzer, P.A., 197 AD3d at 545 [internal quotation marks omitted]). The defendant must affirmatively demonstrate the absence of one of the elements of legal malpractice (see Quantum Corporate Funding, Ltd. v Ellis, 126 AD3d 866, 871). If it is alleged that an attorney’s alleged legal malpractice has prevented a plaintiff from commencing a timely appeal, then the defendant moving for summary judgment based on the absence of causation must affirmatively demonstrate that the plaintiff would not have prevailed in the appeal (see Coccia v Liotti, 70 AD3d 747; McCluskey v Gabor & Gabor, 61 AD3d 646).

Here, the defendant demonstrated, prima facie, the absence of at least one of the essential elements of the legal malpractice cause of action. In support of his motion for summary judgment dismissing the complaint, the defendant demonstrated that the plaintiff would not have prevailed in an appeal from the order and judgment (see Matter of Bluestar Props. Inc. v New York State Div. of Hous. & Community Renewal, 91 AD3d 490). In opposition, the plaintiff failed to raise a triable issue of fact.

Accordingly, the Supreme Court properly granted the defendant’s motion for summary judgment dismissing the complaint.”

It can be difficult to overestimate the acrimony between siblings when the parents’ estates and inheritance comes into play.  As an example see Schmidt v Burner  2022 NY Slip Op 01191 Decided on February 23, 2022
Appellate Division, Second Department.  Here days before her death, the mother seeks to disinherit one son.  The attorneys are hired to do so, but fail to revoke a Totten Trust.  Disinherited son gets the bank account, and other son sues the attorneys.

“In or about March 2013, the decedent, Evelyn Schmidt, retained the legal services of the defendants for estate planning purposes. At the time, the decedent owned, among other things, two bank accounts held in trust for the decedent’s sons, the plaintiff, Frederick A. Schmidt, and Peter Schmidt. The decedent allegedly informed the defendants that upon her death, she did not want Peter to receive any of her assets, and that she wanted $1,000 of her assets to go to her sister-in-law’s daughter and her remaining assets to go to the plaintiff. On April 1, 2013, the decedent executed a last will and testament (hereinafter the will), which, among other things, nominated the plaintiff as sole executor, and provided that all of the decedent’s probate estate pour-over into the Evelyn Schmidt Irrevocable Trust (hereinafter the irrevocable trust). On that same day, the decedent executed the irrevocable trust, which appointed the plaintiff as sole trustee, and provided that after the decedent’s death, the plaintiff, as “Trustee[,] shall distribute the remaining trust property to [the plaintiff] outright, free of trust.” The irrevocable trust stated that the decedent was “specifically disinheriting Peter Schmidt and his descendants.” The defendants drafted the will and the irrevocable trust.

On April 7, 2013, the decedent died. Thereafter, the plaintiff was appointed executor of the decedent’s estate. The Surrogate’s Court issued letters testamentary to the plaintiff. In or about July 2014, the plaintiff, as executor of the decedent’s estate, commenced this action alleging, inter alia, that the defendants provided negligent legal advice to the decedent with regard to her estate planning. Thereafter, the plaintiff was granted leave to amend the complaint.

In the amended complaint and the bill of particulars, the plaintiff alleged, inter alia, [*2]that prior to the decedent’s death, the decedent and the plaintiff informed the defendants that the decedent had “two bank accounts maintained at Apple Bank which, collectively, contained almost $600,000,” and that these accounts were Totten Trusts. The amended complaint and the bill of particulars alleged that the defendants prepared an estate plan for the decedent that did not reflect her wishes because the proceeds of the Totten Trusts did not pass through the decedent’s estate, were not made part of the irrevocable trust upon her death, and were distributed to both the plaintiff and Peter. The amended complaint and the bill of particulars alleged, inter alia, that the defendants negligently failed to plan for the distribution of the decedent’s assets in accordance with her instructions, to investigate and conduct due diligence concerning the nature of the Totten Trusts, and to ensure that the decedent had terminated the Totten Trusts prior to her death. The plaintiff alleged that but for the defendant’s negligence, the irrevocable trust “would have received a distribution of all of the assets of [the decedent],” with the exception of a $1,000 bequest to the decedent’s sister-in-law’s daughter.”

“To succeed on a motion for summary judgment dismissing a legal malpractice action, a defendant must present evidence in admissible form establishing that at least one of the essential elements of legal malpractice cannot be satisfied (see Buczek v Dell & Little, LLP, 127 AD3d 1121, 1123; Valley Ventures, LLC v Joseph J. Haspel, PLLC, 102 AD3d 955, 956). Those elements require a showing that (1) the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and (2) the attorney’s breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (see Bells v Foster, 83 AD3d 876, 877; see also Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 845). The causation element requires a showing that the injured party “‘would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence'” (Bells v Foster, 83 AD3d at 877, quoting Kennedy v H. Bruce Fischer, Esq., P.C., 78 AD3d 1016, 1018 [internal quotation marks omitted]). The defendant must affirmatively demonstrate the absence of one of the elements of legal malpractice, rather than merely pointing out gaps in the plaintiff’s proof (see Quantum Corporate Funding, Ltd. v Ellis, 126 AD3d 866, 871).

The Supreme Court should have denied that branch of the defendants’ motion which was for summary judgment dismissing the amended complaint. The defendants failed to submit sufficient evidence establishing, prima facie, that they exercised the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession. In addition, the court erred in determining that the defendants established, prima facie, that the decedent’s estate did not sustain actual and ascertainable damage as a result of the defendants’ alleged negligence in failing to advise the decedent to revoke the Totten Trusts prior to her death.”

As in all settings, attorney or legal malpractice can be a defense to a fee claim by that attorney.  In Matter of Hart,  2022 NY Slip Op 22018,  Decided on January 12, 2022, Surrogate’s Court, Rockland County, Judge Cornell sets forth some of the rules.

“SCPA § 2110 authorizes the Court to fix and determine the compensation of an attorney at any time during the administration of the estate. SCPA § 2110(2) directs that the proceeding shall be instituted by petition of, inter alia, an attorney who has rendered services to the estate. The Uniform Rules for Surrogate’s Court require that an attorney file an affidavit of services in any proceeding to determine attorney’s fees. See 22 NYCRR § 207.45(a). The Court bears the ultimate responsibility for approving legal fees that are charged to an estate and has the discretion to determine what constitutes reasonable compensation for legal services rendered in the course of the administration of an estate. See Matter of Stortecky v. Mazzone, 85 NY2d 518 (1995); Matter of Vitole, 215 AD2d 765 (2d Dept. 1995); Matter of Verplanck, 151 AD2d 767, 767 (2d Dept. 1989) (surrogate “bears the ultimate responsibility to decide,” the reasonableness of compensation for legal services rendered to an estate); SCPA § 2110(3) (allowing Court to [*5]direct attorney to refund fees in excess of fair value of services rendered).

This power of the Surrogate to set fees is superior to the parties’ consent to a requested fee. See Stortecky, 85 NY2d at 526 (“[T]he Surrogate had the authority to inquire into the reasonableness of counsel’s fee even though agreed upon by the executor and assented to by the beneficiaries.”). The Court is not bound by the terms of a retainer agreement. See Matter of Williams, 168 AD3d 753, 753 (2d Dept. 2019) (“the Surrogate bears the ultimate responsibility of deciding what constitutes a reasonable legal fee, regardless of the existence of a retainer agreement”); In re Guattery, 278 AD2d 738 (3d Dept. 2000) (absence of written retainer agreement did not prevent Surrogate from fixing attorney’s fees); Estate of Paula M. Venezia, 2008 NY Misc. LEXIS 6644, 240 N.Y.L.J. 77 (Surr. Ct. Kings Co. 2008) (citing Matter of Schanzar, 7 AD2d 275 (1st Dept. 1959)).

The Surrogate also has the jurisdiction to determine attorney malpractice issues in a SCPA § 2110 proceeding to fix attorney’s fees. See In re Estate of Tarka, 293 AD2d 396, 396 (1st Dept. 2002) (“The court’s jurisdiction extended to . . . allegations of malpractice inasmuch as such claims allegedly arose in connection with the administration of the estate.”); Haskel & Lancaster, 2001 NYLJ LEXIS 160, NYLJ, Jan. 5, 2001 at Pg. 2, (col. 6) (Surr. Ct. Nassau Co. 2001) (Radigan, J.).”