Generally speaking, fraud claims in a legal malpractice setting are dismissed as duplicitive of the legal malpractice claim.  For years, litigants have used the longer statute of limitations period for fraud as a way around a stale legal malpractice claim along with a discovery onset of the statute.  In addition, fraud allows for greater damage calculations.  Courts have sometimes said that any claim against a professional requires that it be translated into malpractice, rather than fraud.  Federal Ins. Co. v Lester Schwab Katz & Dwyer, LLP  2021 NY Slip Op 32305(U)  November 15, 2021 Supreme Court, New York County
Docket Number: Index No. 151093/2021 Judge: Shawn T. Kelly is that rare case where the claims survive dismissal.

“Plaintiff alleges that Lester Schwab made ( a) a false representation of fact to the Insured that the conflict check returned negative results; (b) defendants had knowledge of the falsity as shown by their internal e-mails; (c) the misrepresentation was made to induce plaintiff’s reliance
that Lester Schwab did not have any conflict of interest and so could continue its representation of the Insured in the underlying case; ( d) the Insured and its insurers justifiably relied on the misrepresentation as it is known that performing a conflict check in the context of litigation,
especially with multiple parties, is required to be done so that the Insured and its insurers could rely on Lester Schwab to advocate and protect their interests solely; and (e) the Insured and its insurers were injured by the reliance on the misrepresentation.

On this pre-Answer motion to dismiss, Plaintiff’s allegations are sufficient to sustain a fraud cause of action distinct from the legal malpractice claim. Accordingly, Defendants’ motion to dismiss is denied as to the fraud cause of action.”

I.M.P. Plumbing & Heating Corp. v Munzer & Saunders, LLP  2021 NY Slip Op 06544 Decided on November 23, 2021 Appellate Division, First Department stands for the unremarkable proposition that  it is a departure from good practice if an attorney fails to answer a complaint and fails to seek additional time to answer the complaint.  it also finds that the failure to return $ 200,000 held in escrow when promised can be a breach of contract.  However, these clear findings are well composed and clear.

“Defendants’ failure to interpose answers on behalf of plaintiffs in the A.M. Concrete Action and the A.M. Concrete Proceeding or to seek an extension of time to answer constitutes a breach of the standard of professional care (Shapiro v Butler, 273 AD2d 657, 658 [3d Dept 2000]). Plaintiffs may seek to recover from defendants any legal fees they paid to oppose the resulting contempt motion and to seek vacatur of the default judgment in the A.M. Concrete Proceeding, and to oppose the motion for a default judgment, seek vacatur of the default judgment, and appeal from the order granting a default judgment in the A.M. Concrete Action. In this connection we note that, “[d]amages in a legal malpractice case are designed to make the injured client whole” (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 443 [2007] [internal quotation marks omitted]). Therefore, a legal malpractice “plaintiff’s damages may include litigation expenses incurred in an attempt to avoid, minimize, or reduce the damage caused by the attorney’s wrongful conduct” (id.[internal quotation marks omitted]). Issues of fact exist as to the amounts, if any, that plaintiffs paid for the above noted services.

With respect to defendants’ representation of plaintiffs in two other actions, titled Impagliazzo v Heena Hotel, LLC (NY County index No. 155403/14) and Impagliazzo v Shivbhakti LLC (NY County index No. 652437/14), the only negligence that plaintiffs claim on appeal is defendants’ failure to oppose the motion to dismiss [*2]in the Heena action. However, any negligence on defendants’ part in failing to oppose that motion was not a proximate cause of damages to plaintiffs since the Heena complaint failed to state a cause of action and was refuted by documentary evidence, and plaintiffs do not contend that this was a “remediable defect” (see Dempster v Liotti, 86 AD3d 169, 179-180 [2d Dept 2011]).

Insofar as the breach of contract cause of action is based on alleged overbilling, described as billing for legal services that defendants allegedly performed negligently, it is duplicative of the legal malpractice cause of action (see Courtney v McDonald, 176 AD3d 645, 645-646 [1st Dept 2019]). However, a cause of action for breach of contract is stated by the allegations that defendants retained $200,000 held in escrow for the purchase of real property in violation of an agreement to return the money if the purchase did not go through (see Postiglione v Castro, 119 AD3d 920, 922 [2d Dept 2014]). Contrary to defendants’ contention that the complaint does not allege a breach of contract based on their alleged retention of the $200,000 held in escrow, the breach of contract cause of action incorporates all the previous factual allegations in the complaint. The breach of fiduciary duty cause of action based on defendants’ retention of the funds held in escrow must be dismissed as duplicative of the breach of contract cause of action (see William Kaufman Org. v Graham & James, 269 AD2d 171, 173 [1st Dept 2000]).”

Allstar Elecs., Inc. v DeLuca  2020 NY Slip Op 07018 [188 AD3d 1121]
November 25, 2020 Appellate Division, Second Department demonstrates the danger of discovery failures.  Here, the entire case was dismissed over the failure to give what the Court termed a “failure to provide court-ordered discovery.”

“”The nature and degree of the penalty to be imposed pursuant to CPLR 3126 against a party who refuses to comply with court-ordered discovery is a matter within the discretion of the court” (Smookler v Dicerbo, 166 AD3d 838, 839 [2018]; see Pastore v Utilimaster Corp., 165 AD3d 685, 686 [2018]; Quinones v Long Is. Jewish Med. Ctr., 90 AD3d 632 [2011]). The striking of a pleading may be appropriate where there is a clear showing that the failure to comply with discovery demands or court-ordered discovery was the result of willful and contumacious conduct (see Ozeri v Ozeri, 135 AD3d 838, 839 [2016]; McArthur v New York City Hous. Auth., 48 AD3d 431 [2008]). “The willful and contumacious character of a party’s conduct can be inferred from the party’s repeated failure to respond to demands or to comply with discovery orders, and the absence of any reasonable excuse for these failures” (Tos v Jackson Hgts. Care Ctr., LLC, 91 AD3d 943, 943-944 [2012]; see Smookler v Dicerbo, 166 AD3d at 839; Commisso v Orshan, 85 AD3d 845 [2011]).

Here, contrary to the plaintiff’s contention, the willful and contumacious character of its conduct could properly be inferred from its repeated failures, without an adequate excuse, to timely respond to discovery demands and to comply with the Supreme Court’s orders to provide outstanding discovery and set a date for the plaintiff’s deposition (see Marino v Armogan, 179 AD3d 664, 666 [2020]; Broccoli v Kohl’s Dept. Stores, Inc., 171 AD3d 846, 847-848 [2019]; Smookler v Dicerbo, 166 AD3d at 839-840; Montemurro v Memorial Sloan-Kettering Cancer Ctr., 94 AD3d 1066, 1066-1067 [2012]).”

We believe that a legal malpractice case based upon a medical malpractice underlying case may be amongst the most technically and procedurally challenging litigations that exist.  Proving a medical malpractice claim (as a plaintiff) is very difficult.  It requires a strong understanding of medicine, massive record discovery, use of specialist medical experts, depositions of physicians, and a contest with an extremely well trained defense bar.

Now, on top of that a legal malpractice claim requires a second reinventing of all the initial work along with new experts and a lawyer expert all harmonized to show that the medical malpractice case was hypothetically winnable except for the errors of counsel.  It is no surprise that a pro-se litigant might face early dismissal as did plaintiff in Silverstein v Pillersdorf  2021 NY Slip Op 06461 Appellate Division, First Department.  There, the case was dismissed on a CPLR 3211 motion in a very short decision:

“Plaintiff’s legal malpractice complaint was properly dismissed in accordance with CPLR 3211(a)(7) for failure to state a cause of action. Even accepting plaintiff’s allegations as true, the complaint contains no nonconclusory allegations suggesting that any negligence by defendants in their handling of the medical malpractice trial was the “but for” cause of plaintiff to sustain actual and ascertainable damages (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]). Given plaintiff’s conclusory allegations regarding causation, leave to amend was properly denied as futile.”

Louie’s Seafood Rest., LLC v Brown  2021 NY Slip Op 06167  Decided on November 10, 2021 Appellate Division, Second Department is a novel defense to a claim of deceit.  Originally applicable to Anti-Trust litigation (where it excused certain litigation tactics), it is here applied (for the first time in state court legal malpractice claims) to a Judiciary Law § 487 claim.

“The plaintiffs commenced this action against the defendants seeking damages for aiding and abetting fraud, violation of Judiciary Law § 487, breach of contract, and fraud in the inducement. The causes of action to recover damages for aiding and abetting fraud and violation of Judiciary Law § 487 were predicated on allegations that, in the discrimination lawsuit, the plaintiff to that action had fabricated and disclosed during discovery certain diary entries, and that the defendants were aware of the fabrication and substantially assisted to advance the commission of fraud. The causes of action to recover damages for breach of contract and fraud in the inducement were predicated on allegations that, in the class action lawsuit, the defendants breached the settlement agreement by failing to hold the settlement proceeds in escrow until the court approved the settlement agreement and fraudulently induced the plaintiffs into entering the settlement [*2]agreement by misrepresenting that they were not representing any other employee or former employee of the plaintiffs in connection with an employment-related issue against them.

The defendants moved pursuant to CPLR 3211(a)(1) and (7) to dismiss the aiding and abetting fraud causes of action and the cause of action alleging a violation of Judiciary Law § 487 on the ground, among others, that the defendants were protected by the Noerr-Pennington doctrine (see Mine Workers v Pennington, 381 US 657; Eastern Railroad Presidents Conference v Noerr Motor Freight, Inc., 365 US 127), and to dismiss the breach of contract and fraud in the inducement causes of action on the ground that the complaint failed to state those causes of action. The Supreme Court denied the motion. The defendants moved for leave to renew and reargue the motion. In an order entered September 12, 2016, the court, inter alia, upon renewal and reargument, granted the defendants’ prior motion and directed dismissal of the complaint. The plaintiffs appeal.

On a motion to dismiss a cause of action pursuant to CPLR 3211(a), the court must accept the facts as alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see CPLR 3026; Leon v Martinez, 84 NY2d 83, 87-88).

“The Noerr-Pennington doctrine protects the right under the First Amendment to the United States Constitution to petition the government for governmental action, including through litigation and activity incidental to litigation” (Matter of People v Northern Leasing Sys., Inc., 193 AD3d 67, 77 [citation omitted]; see Alfred Weissman Real Estate v Big V Supermarkets, 268 AD2d 101, 106-107). “There is a ‘sham’ exception to the Noerr-Pennington doctrine which applies in ‘situations in which persons use the governmental process—as opposed to the outcome of that process—as an anticompetitive weapon'” (Singh v Sukhram, 56 AD3d 187, 192 [emphasis omitted], quoting Columbia v Omni Outdoor Advertising, Inc., 499 US 365, 380; see Alfred Weissman Real Estate v Big V Supermarkets, 268 AD2d at 107). There is also a “‘corruption’ exception, which applies only where a party has stepped beyond the bounds of zealous advocacy and engages in conduct alleged to be criminal, not just deceptive or unethical” (Alfred Weissman Real Estate v Big V Supermarkets, 268 AD2d at 110).

Here, the Supreme Court properly concluded that the causes of action alleging that the defendants aided and abetted fraud and violated Judiciary Law § 487 were barred by the Noerr-Pennington doctrine. The Noerr-Pennington doctrine applied to these causes of action insofar as they were based upon litigation and activities that were incidental to litigation, and the pertinent allegations did not fit within either the “sham” or the “corruption” exceptions to the Noerr-Pennington doctrine (cf. Matter of People v Northern Leasing Sys., Inc., 193 AD3d at 77-78; see generally Singh v Sukhram, 56 AD3d at 192; Alfred Weissman Real Estate v Big V Supermarkets, 268 AD2d at 109-110).”

The law firm represented itself.  No appearance shows for Respondent.  Appellant nevertheless loses in Napoli v Rubin  2021 NY Slip Op 06180
Decided on November 10, 2021 Appellate Division, Second Department.  Sadly, the Appellate Division gives very little explanation of why.

“In March 2017, the plaintiff commenced this action to recover damages for legal malpractice, breach of fiduciary duty, and violation of Judiciary Law § 487. The plaintiff moved to dismiss the defendant’s counterclaims, and the defendant cross-moved, inter alia, for summary judgment dismissing the complaint. The Supreme Court, inter alia, in effect, denied that branch of the defendant’s cross motion which was for summary judgment dismissing the complaint. The defendant appeals.

On a motion for summary judgment, the moving party must “make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact” (Alvarez v Prospect Hosp., 68 NY2d 320, 324). The failure to make such a showing requires a denial of the motion, regardless of the sufficiency of the opposing papers (see id. at 324; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).

Here, the defendant failed to establish her prima facie entitlement to judgment as a matter of law. Therefore, the Supreme Court properly denied that branch of her cross motion which was for summary judgment dismissing the complaint regardless of the sufficiency of the plaintiff’s opposition papers (see Blumencranz v Botter, 182 AD3d 568, 569; see generally Winegrad v New York Univ. Med. Ctr., 64 NY2d at 853).”

Sometimes at oral argument an Appellate Court already has a decision pretty much written and is giving the parties a chance to air their dispute.  Sometimes, as apparently in Halwani v Boris Kogan & Assoc., P.C.  2021 NY Slip Op 06039  Decided on November 04, 2021  Appellate Division, First Department, oral argument really [really] makes a difference.

“To establish a cause of action for legal malpractice, a plaintiff must prove that the defendant attorney failed to exercise that degree of care, skill, and diligence commonly possessed by a member of the legal community; proximate cause; actual and ascertainable damages; and that the plaintiff would have been successful in the underlying action had the attorney exercised due care (see Reibman v Senie, 302 AD2d 290, 290 [1st Dept 2003]). “Th[e] failure to establish proximate cause mandates dismissal of a legal malpractice action, regardless of an attorney’s negligence” (Berkowitz v Fischbein, Badillo, Wagner & Harding, 34 AD3d 297, 297 [1st Dept 2006]). At oral argument, plaintiff acknowledged that he offered no evidence that he would have prevailed on appeal in the underlying action but for defendant’s conduct. Thus, even if defendant’s failure to perfect an appeal may have been sufficient to plead a breach of duty, plaintiff’s allegations failed to establish that but for such failure he would have been successful on the appeal (see Hutt v Kanterman & Taub, P.C., 280 AD2d 379, 379 [1st Dept 2001], lv denied 96 NY2d 713 [2001]).”

In a familiar scenario, plaintiff retains attorneys to handle a transaction, and then somewhat later, hires the attorney to sue over the transaction.  In Goodman v Weiss, Zarett, Brofman, Sonnenklar & Levy, P.C. 
2021 NY Slip Op 05957 Decided on November 3, 2021 Appellate Division, Second Department the transaction was an employment contract and the litigation was over interpretation of the employment contract.  In unrelated cases the transaction could be a matrimonial settlement with later litigation over interpretation of that matrimonial settlement.  In either setting, the gap between signing the contract and suing over the contract can be too long, dooming the legal malpractice claim.

“The plaintiff contends that the defendant’s malpractice consisted of improperly negotiating his separation from his previous employer and his new employment contract with the hospitals. However, an action alleging legal malpractice must be commenced within three years from the date of accrual (see CPLR 214[6]). A claim accrues when the malpractice is committed, not when the client discovers it (see Shumsky v Eisenstein, 96 NY2d 164, 166). “Causes of action alleging legal malpractice which would otherwise be time-barred are timely if the doctrine of continuous representation applies” (DeStaso v Condon Resnick, LLP, 90 AD3d 809, 812). “In the legal malpractice context, the continuous representation doctrine tolls the statute of limitations where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim” (id. at 812). Application of the continuous representation doctrine is generally “limited to the course of representation concerning a specific legal matter . . . ; [t]he concern, of course, is whether there has been continuous [representation], and not merely a continuing relation” between the client and the lawyer (Shumsky v Eisenstein, 96 NY2d at 168 [internal quotation marks omitted]).

Contrary to the plaintiff’s contention, the legal malpractice cause of action at issue was time-barred under CPLR 214(6), and the continuous representation doctrine did not toll the statute of limitations. That doctrine “tolls the running of the statute of limitations on a cause of action against a professional defendant only so long as the defendant continues to represent the plaintiffs in connection with the particular transaction which is the subject of the action and not merely during the continuation of a general professional relationship” (Maurice W. Pomfrey & Assoc., Ltd. v Hancock & Estabrook, LLP, 50 AD3d 1531, 1533 [internal quotation marks omitted]). Although the plaintiff alleges that the defendant continued to provide legal services to him between January 2011 and November 2013, he did not seek or obtain the defendant’s legal services at any time during that period and, when the plaintiff did subsequently engage the defendant’s legal services, that engagement was with regard to the performance of distinct services related to a different subject matter. Accordingly, the Supreme Court properly determined that the continuous representation toll was inapplicable and granted that branch of the defendant’s motion which was to dismiss the legal malpractice cause of action as time-barred.”

Sometimes the AD thinks a case is pure speculation.  In Lindenwood Vil., Section C, Coop. Corp. v Denenberg  2021 NY Slip Op 02463 [193 AD3d 593] April 22, 2021 Appellate Division, First Department they spent little time affirming.

“This legal malpractice action was properly dismissed. There is no basis other than speculation to support the allegation that, had defendants attorneys, who represented plaintiff client in an underlying action, served notice of entry sooner, the adverse party would not have sought leave to appeal (see Levine v Lacher & Lovell-Taylor, 256 AD2d 147, 149 [1st Dept 1998]).”

Alpha/Omega Concrete Corp. v Ovation Risk Planners, Inc.  2021 NY Slip Op 05113  Decided on September 29, 2021  Appellate Division, Second Department is a textbook of causes of actions in insurance law and negligent underwiring.

“In July 2015, Alpha/Omega Building Consulting Corp. (hereinafter Consulting) was awarded a contract to perform concrete work on a construction project involving a residential high-rise apartment building being constructed in Long Island City. Before beginning work on the project, Consulting, via its principal, Anthony Frascone, contacted the second third-party defendant Michael Villano, the principal of the defendant/third-party plaintiff/second third-party defendant, Ovation Risk Planners, Inc., a retail insurance broker (hereinafter Ovation; together with Villano, the Ovation defendants), to obtain liability insurance for Consulting with respect to its work on the subject project. Villano, on behalf of Consulting, submitted a commercial insurance application to the defendant/third-party defendant/second third-party plaintiff, Scottish American Insurance General Agency, Inc. (hereinafter Scottish American), a wholesale insurance broker, which transmitted the application to nonparty Prime Specialty, Inc. (hereinafter Prime), for underwriting. Prime, in turn, placed the commercial general liability policy with the defendant State National Insurance Company (hereinafter SNIC), an insurance carrier. To pay for the policy, Consulting obtained a loan from nonparty Capital Premium Financing, Inc. (hereinafter CPF). The policy was to remain in effect from July 13, 2015, until the earlier of July 13, 2017, or the end of the project.”

“In general, “insurance brokers have a common-law duty to obtain requested coverage for their clients within a reasonable time or inform the client of the inability to do so” (AB Oil Servs., Ltd. v TCE Ins. Servs., Inc., 188 AD3d 624, 626 [internal quotation marks omitted]; see Murphy v Kuhn, 90 NY2d 266, 270; MAAD Constr., Inc. v Cavallino Risk Mgt., Inc., 178 AD3d 816, 818). The scope of the broker’s duty is “‘defined by the nature of the client’s request'” (Maxwell Plumb Mech. Corp. v Nationwide Prop. & Cas. Ins. Co., 116 AD3d 740, 741, quoting Loevner v Sullivan & Strauss Agency, Inc., 35 AD3d 392, 393). A claim of liability for a violation of this duty may sound in either contract or tort (see Broecker v Conklin Prop., LLC, 189 AD3d 751, 753; Gagliardi v Preferred Mut. Ins. Co., 102 AD3d 741, 741). To state a claim based upon violation of the insurance broker’s common-law duty, the client must demonstrate that the broker failed to discharge its duty either by breaching the agreement with the client by failing to obtain the requested coverage or by failing to exercise due care in obtaining insurance on the client’s behalf (see MAAD Constr., Inc. v Cavallino Risk Mgt., Inc., 178 AD3d at 818; Gagliardi v Preferred Mut. Ins. Co., 102 AD3d at 741).

Here, the Ovation defendants failed to establish, prima facie, that Ovation did not breach its common-law or contractual duty to Concrete. Even assuming that Campbell requested that Concrete be added to the existing policy, as the Ovation defendants argue, the deposition testimony submitted by the Ovation defendants in support of their motion demonstrated that Ovation agreed to obtain insurance for Concrete and then represented that it had done so without verifying this fact. In light of this evidence, the Ovation defendants failed to establish, prima facie, the absence of a triable issue of fact as to whether Ovation undertook a duty to Concrete which it then failed to discharge.

Whether Campbell had apparent authority to act on behalf of Consulting to request that Concrete be added to Consulting’s policy or requested a new policy for Concrete presents a triable issue of fact. However, it is a separate issue as to whether Ovation failed to verify that coverage on behalf of Concrete was in place before advising Campbell that it was. Moreover, the statement of Consulting’s principal that Campbell was “running the men, the job” for Consulting cannot be characterized as words which “[gave] rise to the appearance and belief that [Campbell] possesse[d] authority to enter into a transaction” on behalf of Consulting (Marshall v Marshall, 73 AD3d 870, 871 [internal quotation marks omitted]; see 150 Beach 120th St., Inc. v Washington Brooklyn Ltd. Partnership, 39 AD3d 722, 723). Likewise, Villano could not rely on Campbell’s own actions or statements since an agent “cannot by his [or her] own acts imbue himself [or herself] with apparent authority” (Marshall v Marshall, 73 AD3d at 871 [internal quotation marks omitted]; see 150 Beach 120th St., Inc. v Washington Brooklyn Ltd. Partnership, 39 AD3d at 723; Lexow & Jenkins v Hertz Commercial Leasing Corp., 122 AD2d 25, 26). Villano admitted that he never contacted Consulting’s principal to obtain authorization to add Concrete to Consulting’s policy or to confirm whether Campbell had authority to act on behalf of Consulting. Accordingly, the Supreme Court properly denied that branch of the Ovation defendants’ motion which was for summary judgment dismissing Concrete’s first cause of action, alleging breach of contract, regardless of the sufficiency of the opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).”