Lest we forget the snow and ice of winter, here on a lovely August morning, Bianco v Law Offs. of Yuri Prakhin  2020 NY Slip Op 07849 [189 AD3d 1326] December 23, 2020 Appellate Division, Second Department brings back the slippery chilly days of January.

“The plaintiff allegedly slipped and fell on ice on a subway staircase in Brooklyn on January 21, 2014. Shortly thereafter, she retained the defendants Law Office of Yuriy Prahkin and Yuriy Prahkin (hereinafter together the Prahkin defendants) to represent her in a personal injury action relating to the fall. The Prahkin defendants served a timely notice of claim on the City of New York, but failed to do so with respect to the New York City Transit Authority (hereinafter NYCTA). In July 2014, the plaintiff retained the defendants Schneider Law Group and William Z. Schneider (hereinafter together the Schneider defendants) as successor counsel to the Prahkin defendants. The Schneider defendants, in turn, retained the defendants Steven C. Kletzkin, PLLC, and Steven C. Kletzkin (hereinafter together the Kletzkin defendants) as trial counsel representing the plaintiff in an action against the NYCTA.

[*2] In February 2015, the Schneider defendants served an untimely notice of claim upon NYCTA. In March 2015, the Kletzkin defendants commenced an action on the plaintiff’s behalf against the NYCTA to recover damages for the personal injuries she allegedly sustained as a result of the slip and fall. In an order dated April 15, 2016, the Supreme Court granted the NYCTA’s motion to dismiss the complaint in the personal injury action against the NYCTA “with prejudice, and no opposition submitted thereto.”

The plaintiff then commenced this action against the Prahkin defendants, the Schneider defendants, and the Kletzkin defendants, seeking to recover damages for legal malpractice and violations of Judiciary Law § 487. After issue was joined, the Kletzkin defendants and the Schneider defendants separately moved pursuant to CPLR 3211 (a) (1) and (7) to dismiss the complaint insofar as asserted against each of them. In an order dated March 31, 2017, the Supreme Court, inter alia, granted the Kletzkin defendants’ motion and denied the Schneider defendants’ motion. The plaintiff appeals, and the Schneider defendants cross-appeal.”

“Here, the plaintiff adequately pleaded the cause of action alleging legal malpractice against the Kletzkin defendants and the Schneider defendants. Contrary to the contentions of those defendants, neither conclusively established that an application for leave to serve a late notice of [*3]claim or to deem the late notice of claim timely served upon the NYCTA nunc pro tunc would have been futile (see generally Matter of Newcomb v Middle Country Cent. Sch. Dist., 28 NY3d 455, 465 [2016]; Davis v Isaacson, Robustelli, Fox, Fine, Greco & Fogelgaren, 284 AD2d 104, 105 [2001]).

Contrary to the Kletzkin defendants’ contention, the complaint adequately states a cause of action to recover damages for violation of Judiciary Law § 487. Contrary to the Schneider defendants’ contention, the cause of action alleging violation of Judiciary Law § 487 is not duplicative of the cause of action alleging legal malpractice. “A violation of Judiciary Law § 487 requires an intent to deceive (see Judiciary Law § 487), whereas a legal malpractice claim is based on negligent conduct” (Moormann v Perini & Hoerger, 65 AD3d 1106, 1108 [2009]; see Bill Birds, Inc. v Stein Law Firm, P.C., 164 AD3d 635, 637 [2018], affd 35 NY3d 173 [2020]).”

Sometimes a little explanation goes a long way in guidance to the bar. Aqua-Trol Corp. v Wilentz, Goldman & Spitzer, P.A.  2021 NY Slip Op 04652  Decided on August 11, 2021 Appellate Division, Second Department reverses a grant of summary judgment, but gives only the blackletter description of what was missing in defendant’s motion.

“In an action to recover damages for legal malpractice, the plaintiff appeals from a judgment of the Supreme Court, Nassau County (Stephen A. Bucaria, J.), dated July 16, 2019. The judgment, upon an order of the same court dated July 11, 2019, granting the defendant’s motion for summary judgment dismissing the complaint and denying the plaintiff’s cross motion for summary judgment on the issue of liability, is in favor of the defendant and against the plaintiff dismissing the complaint.

ORDERED that the judgment is reversed, on the law, with costs, the defendant’s motion for summary judgment dismissing the complaint is denied, the complaint is reinstated, and the order dated July 11, 2019, is modified accordingly.”

“Here, the judgment must be reversed, as the Supreme Court should have denied Wilentz’s motion for summary judgment dismissing the complaint. Wilentz failed to submit evidence establishing, prima facie, the absence of at least one essential element of the legal malpractice cause of action (see Bells v Foster, 83 AD3d at 877; see also Biberaj v Acocella, 120 AD3d 1285, 1287). Since Wilentz failed to make its prima facie showing, we do not need to consider the sufficiency of Aqua-Trol’s opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).”

Rubin v EFP Rotenberg, LLP  2020 NY Slip Op 32714(U)  August 19, 2020
Supreme Court, New York County  Docket Number: 651825/2015
Judge: Barbara Jaffe discusses what disciplinary or governmental investigation materials may be relevant to a claim of professional malpractice.

“Pursuant to CPLR 3 IOI(a), “[t]here shall be full disclosure of all matter material and necessary in the prosecution or defense of an action … ” What is “material and necessary” is generally left to the court’s sound discretion and may include “any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity.” (Andon ex rel. Andon v 302-304 Mott St. Assocs., 94 NY2d 740, 746 [2000], quoting Allen v Crowell-Collier Pub. Co., 21 NY2d 403, 406 [1968]). A party may seek an order compelling compliance or a response to any request, notice, interrogatory, demand, question, or
order under CPLR article 31. (CPLR 3124).

Plaintiffs claim of accountant malpractice requires a showing that “there was a departure from the accepted standards of practice and that the departure was a proximate cause of the injury.” (KBL, LLP v Cmty. Counseling & Mediation Servs., 123 AD3d 488, 488 [1st Dept
2014]). Thus, any documents, communications, findings, and remedial actions made in the course of administrative or disciplinary proceedings concerning defendant’s work for the companies, such as that conducted by the SEC and sought in interrogatory 11, are material and necessary to plaintiffs claim. That the information sought may be inadmissible is of no moment, as the interrogatories are “reasonably likely to yield relevant evidence.” (Forman v Henkin, 30 NY3d 656, 666 [2018]). “

CPLR 214(6) governs the statute of limitations in both legal malpractice and accounting malpractice.  The onset is similar, but slightly different.  Missing in accounting malpractice is the concept of continuing representation.  Darby Scott, Ltd. v Michael S. Libock & Co. LLC
CPAs  2020 NY Slip Op 34343(U) Supreme Court, New York County
Docket Number: 653044/2013 Judge: Robert D. Kalish discusses the difference.

“As a threshold matter, it is clear that all of plaintiff’s claims for damages are time-barred. The statute of limitations for nonmedical malpractice, including accounting malpractice, is three years, which applies “regardless of whether the underlying theory is based in contract or tort” (CPLR 214(6); see RGH Liquidating Trust v Deloitte & Touche LLP, 47 AD3d 516, 517 [1st 2008]; Maya NY, LLC v Hagler, 106 AD3d 583, 586 [2013]). The “claim accrues when the malpractice is committed, not when the client discovers it” (Williamson ex rel. Lipper Convertibles, L.P. v PricewaterhouseCoopers LLP, 9 NY3d 1, 7–8 [2007]). More specifically, the cause of action “accrues upon the client’s receipt of the accountant’s work product since this is the point that a client reasonably relies on the accountant’s skill and advice” (id. at 8, quoting Ackerman v Price Waterhouse, 84 NY2d 535, 541 [1994]).

This action was commenced on August 30, 2013, a date which would render time-barred claims for any act of malpractice committed prior to August 30, 2010. Plaintiff has not identified, and the record does not reflect, any work product produced by defendants after that cut-off date. To the contrary, with respect to the missing handbags and jewelry, Mayo expressly relies on the QuickBooks records maintained by defendants which, at the latest, would have been updated by
Gil on the date of her departure on August 26, 2010. The last invoices analyzed by Alix are even older, dating back to October 2009. Older still is the work product evidencing the alleged overpayments to Finesse, produced between 2004 and 2006. To the extent plaintiff’s claims are based on the accountants’ breach of their professional duty to supervise Gil, the malpractice statute of limitations would extinguish them, and in any event, the limitations for negligent hiring
and supervision is also three years (Kerzhner v G4S Gov’t Sols., Inc., 138 AD3d 564, 565 [1st Dept 2016]). Defendants’ alleged failure to institute internal inventory controls would likewise be encompassed by the malpractice limitations period.”

 

Professional negligence is different in different professions.  Attorneys are held to a standard of practice which requires them to to engage in greater background investigation than do the rules for accountants.  Deane v Brodman  2021 NY Slip Op 01842 [192 AD3d 577] March 25, 2021
Appellate Division, First Department discusses whether an accountant may rely on his clients information,’

“Defendants are entitled to summary judgment dismissing the professional negligence claims asserted against them as plaintiff has not offered evidence of a departure from a recognized and accepted professional standard for accountants. “A party alleging a claim of accountant malpractice must show that there was a departure from the accepted standards of practice” (KBL, LLP v Community Counseling & Mediation Servs., 123 AD3d 488, 488 [1st Dept 2014]). Plaintiff does not identify any applicable professional standard which would have required defendants to inquire whether the transactions at issue were approved in accordance with the procedures contained in the operating agreement. To the contrary, the standards proffered by plaintiff’s expert permit an accountant engaged for tax preparation services to rely on information furnished by the taxpayer unless it appears to be incorrect, incomplete or inconsistent. There is no allegation here that the information provided to defendants was incorrect, incomplete or inconsistent.”

Bankruptcy and legal malpractice are often paired in real estate and in general corporate situations.  The legal malpractice claim is often accompanied by severe financial loss, and bankruptcy can play a role is bringing a standstill to collection or take-over situations.  There is a complex set of rules concerning who has the standing to bring a legal malpractice action in a bankruptcy setting:  trustee or debtor?

Golden Jubilee Realty, LLC v Castro  2021 NY Slip Op 04541 Decided on July 28, 2021 Appellate Division, Second Department gives some guidance.

“The Supreme Court erred in granting that branch of Pacht’s motion which was pursuant to CPLR 3211(a)(3) to dismiss the amended complaint insofar as asserted against him based on Golden Jubilee’s alleged lack of standing. “On a defendant’s motion to dismiss the complaint based upon the plaintiff’s alleged lack of standing, the burden is on the moving defendant to establish, prima facie, the plaintiff’s lack of standing” (BAC Home Loans Servicing, LP v Rychik, 161 AD3d 924, 925; see CPLR 3211[a][3]; Gobindram v Ruskin Moscou Faltischek, P.C., 175 AD3d 586, 591). “To defeat a defendant’s motion, the plaintiff has no burden of establishing its standing as a matter of law; rather, the motion will be defeated if the plaintiff’s submissions raise a question of fact as to its standing” (Deutsche Bank Trust Co. Ams. v Vitellas, 131 AD3d 52, 60). As relevant to this appeal, in actions where a plaintiff voluntarily commenced a bankruptcy proceeding prior to the instant action, “[t]he failure of a party to disclose a cause of action as an asset in a prior bankruptcy proceeding, which the party knew or should have known existed at the time of that proceeding, deprives him or her of ‘the legal capacity to sue subsequently on that cause of action'” (Potruch & Daab, LLC v Abraham, 97 AD3d 646, 647, quoting Whelan v Longo, 23 AD3d 459, 460, affd 7 NY3d 821; see Nicke v Schwartzapfel Partners, P.C., 148 AD3d 1168, 1170).

Here, Pacht’s submissions in support of his motion established that Golden Jubilee filed a bankruptcy petition in March 2016 which did not list the claim against Pacht as an asset, and that Golden Jubilee knew or should have known of the existence of its claim against Pacht prior to the filing of the bankruptcy petition (see Keegan v Moriarty-Morris, 153 AD3d 683, 684; Positive Influence Fashion v City of New York, 2 AD3d 606, 606-607). Accordingly, Pacht met his burden of establishing, prima facie, that Golden Jubilee lacked standing to bring this action against him (see Potruch & Daab, LLC v Abraham, 97 AD3d at 647). In opposition, however, the plaintiffs raised a question of fact as to Golden Jubilee’s standing, thus warranting denial of that branch of Pacht’s motion which was pursuant to CPLR 3211(a)(3) to dismiss the amended complaint insofar as asserted against him based on Golden Jubilee’s alleged lack of standing (see Arch Bay Holdings, LLC-Series 2010B v Smith, 136 AD3d 719, 720). The plaintiffs’ submissions established that Golden Jubilee’s bankruptcy petition was dismissed in January 2017. Thus, all property owned by Golden Jubilee, including the present claim against Pacht, revested with Golden Jubilee upon dismissal of the bankruptcy petition (see 11 USC §§ 349, 541[a][1]; Crawford v Franklin Credit Mgt. Corp., 758 F3d 473, 485 [2d Cir]).

For the same reasons, the Supreme Court erred in granting that branch of the Castro defendants’ motion which was pursuant to CPLR 3211(a)(3) to dismiss the amended complaint insofar as asserted against them based on Golden Jubilee’s lack of standing due to its failure to list the claims against the Castro defendants in its bankruptcy petition (see Crawford v Franklin Credit Mgt. Corp., 758 F3d at 485).”

“”An action to recover damages for legal malpractice must be commenced within three years after the accrual of the cause of action” (Bullfrog, LLC v Nolan, 102 AD3d 719, 719-720; see CPLR 214[6]).”  Thus starts and ends most legal malpractice case discussions of the onset of the statute of limitations.  That date might be extended by continuous representation.  However, in Golden Jubilee Realty, LLC v Castro, 2021 NY Slip Op 04541,Decided on July 28, 2021, Appellate Division, Second Department the Court applied a very rare exception.

“”In moving [*2]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” (Stein Indus., Inc. v Certilman Balin Adler & Hyman, LLP, 149 AD3d 788, 789 [citations omitted]). “An action to recover damages for legal malpractice must be commenced within three years after the accrual of the cause of action” (Bullfrog, LLC v Nolan, 102 AD3d 719, 719-720; see CPLR 214[6]). “A legal malpractice claim accrues ‘when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court'” (McCoy v Feinman, 99 NY2d 295, 301, quoting Ackerman v Price Waterhouse, 84 NY2d 535, 541). Under the circumstances of this case, the statute of limitations did not begin to run until specific performance was awarded in the Karpen action, on April 2, 2015 (see Frederick v Meighan, 75 AD3d 528, 531-532). The instant action was commenced on December 29, 2017. Thus, Pacht failed to meet his initial burden of establishing that the plaintiffs’ cause of action to recover damages for legal malpractice was time-barred.”

Merely having a good legal malpractice claim is not enough.  Plaintiff must properly prosecute the claim.  Forgetting the potential irony of losing a legal malpractice case for failing to follow a court rule, Allstar Elecs., Inc. v DeLuca  2020 NY Slip Op 07018 [188 AD3d 1121]
November 25, 2020 Appellate Division, Second Department demonstrates the importance of discovery responses.

“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]).”

Legal malpractice is unique;  this phrase recurs he because claims against attorneys are subjected to a greater scrutiny and are granted a much higher level of latitude.  Consider whether a physician is ever granted a dismissal because the patient is “sophisticated”?

Yet, in  Scarola Malone & Zubatov LLP v Ellner    
2021 NY Slip Op 31199(U), April 8, 2021 Supreme Court, New York County
Docket Number: 651324/2017 Judge: Anthony Cannataro that is what happens.

“Where a sophisticated client imposes a strategic decision on counsel, the client’s action absolves the attorney from liability for malpractice (Town of North Hempstead v Winston & Strawn, LLP, 28 AD3d 746  [2006]; Stolmeier v Fields, 280 AD2d 342 [2001]). Additionally, with regard to strategic decisions “the selection of one among several reasonable courses of action does not constitute malpractice” (Rosner v Paley, 65 NY2d 736, 738 [1985]). “Attorneys may select among reasonable courses of action in prosecuting their clients’ cases without thereby committing malpractice … so that a purported malpractice claim that amounts only to a client’s criticism of counsel’s strategy may be dismissed” (Dweck Law Firm, LLP v Mann, 283 AD2d 292, 293 [2001 ]). Hindsight arguments concerning selection of one of several reasonable courses of action do not state a viable cause of action for malpractice (Brookwood Cos., Inc. v Alston & Bird LLP, 146 AD3d 662, 667 [2017]).

In this case, the Lightbox defendants’ counterclaims stem from the Scarola firm’s representation of them in a business dispute and litigation related to a joint venture agreement between the Lightbox defendants and a nonparty entity named 3rd Home Limited. The counterclaims allege that the Scarola firm made several mistakes during the course of its representation of the Lightbox defendants, specifically: failing to advise the Lightbox defendants to accept a potential buyout from 3rd Home Limited; recommending that the Lightbox defendants litigate in an “uber aggressive” manner rather than advising them to settle, causing the Lightbox defendants to “waste” money on experts; failing to provide the Lightbox defendants with an estimate of future legal fees and expenses; and advising the Lightbox defendants to activate a website, which resulted in their being subject to claims for, among other things, cybersquatting and
trademark infringement.

Lightbox’ s allegations relate primarily to strategic decisions made during the course of the Scarola firm’s representation. Regarding the allegations that the Scarola firm took an overly aggressive approach, the documentary evidence shows that the Lightbox defendants consistently rejected attempts to settle, for reasons having nothing
to do with any advice received from the Scarola firm. While Mr. Ellner occasionally expressed interest in settling with 3rd Home Limited, when he did so, it was his settlement demands that could best be characterized as aggressive, and he rejected actual offers of settlement. Additionally, it is clear from the pleadings that when the
Lightbox defendants retained the Scarola firm, they wanted to “preserve and grow” the joint venture business and were not interested in a buyout.

Mr. Ellner is a sophisticated businessman, with degrees from Wharton and the University of Chicago as well as an impressive business background. The Scarola firm cannot be held liable for failing to counsel the Lightbox defendants regarding an objective that they did not support. There is also no allegation that there was a buyout
or settlement offer that would have been made and accepted but for the Scarola firm’s advice. The damages incurred by loss of a potential buyout are completely speculative (see Heritage Partners, LLC v Stroock & Stroock & Lavan LLP, 133 AD3d 428 [2015] [dismissing legal malpractice claim where damages were based on multiple layers of
speculation]; see also Zarin v Reid & Priest, 184 AD2d 385, 388 [1992] [rejecting a claim for damages which are “too speculative and incapable of being proven with any reasonable certainty”]). As for damages, most of the legal fees charged by the Scarola firm were incurred after the Lightbox defendants decided to reject the 3rd Home Limited’ s settlement offer. “

It really does not matter how many times one goes to the well;  there is either water or no water.  In Armatas v Kestenbaum 2020 NY Slip Op 07846 [189 AD3d 1319] December 23, 2020 Appellate Division, Second Department a city attorney-defendant kept at it until the case was dismissed on all grounds, actual or academic.

“In 2008, the plaintiff commenced an action in the United States District Court for the Eastern District of New York (hereinafter the District Court), alleging, inter alia, that the City of New York, the New York City Police Department, and individual police officers (hereinafter collectively the City defendants) violated his constitutional rights, violated 42 USC § 1983, and committed the state torts of false arrest, malicious prosecution, and intentional infliction of emotional distress. The District Court granted the City defendants’ motion for summary judgment dismissing the complaint. In June 2016, the District Court barred the plaintiff from filing any additional papers in that action.

Thereafter, the plaintiff commenced this action in the Supreme Court, Queens County, against, among others, the defendant Qiana Smith-Williams (hereinafter the defendant), an attorney for the New York City Law Department who represented the City defendants in the federal action. The complaint alleges that the defendant violated Judiciary Law § 487 by, inter alia, filing fraudulent papers in the District Court, making false statements in the District Court, and representing clients that she knew were defrauding the District Court.

The defendant moved, among other things, pursuant to CPLR 3211 (a) (5) to dismiss the complaint insofar as asserted against her as time-barred and as precluded by the doctrine of collateral estoppel. In an order dated February 7, 2017, the Supreme Court, inter alia, granted that branch of the defendant’s motion which was to dismiss the complaint insofar as asserted against her as time-barred to the extent that the complaint was based on events that occurred one year and 90 days prior to September 7, 2016. The court denied with leave to renew that branch of the [*2]defendant’s motion which was to dismiss the complaint insofar as asserted against her as precluded by the doctrine of collateral estoppel.

The defendant then renewed that branch of her motion which was to dismiss the complaint insofar as asserted against her as precluded by the doctrine of collateral estoppel, and moved for leave to reargue that branch of her motion which was to dismiss the complaint insofar as asserted against her as time-barred. In an order dated September 12, 2017, the Supreme Court, upon renewal, granted that branch of the defendant’s motion which was to dismiss the complaint insofar as asserted against her as precluded by the doctrine of collateral estoppel. Further, the court granted leave to reargue, and, upon reargument, in effect, vacated so much of the order dated February 7, 2017, as granted that branch of the defendant’s motion which was to dismiss the complaint insofar as asserted against her as time-barred to the extent that the complaint was based on events that occurred one year and 90 days prior to September 7, 2016, and thereupon granted that branch of the defendant’s motion in its entirety.

The plaintiff appeals from so much of the order as, upon renewal, granted that branch of the defendant’s motion which was to dismiss the complaint insofar as asserted against her as precluded by the doctrine of collateral estoppel. However, the plaintiff does not challenge the Supreme Court’s determination, upon reargument, that the action was time-barred by the applicable statute of limitations. Accordingly, the plaintiff’s contention that the court should not have, upon renewal, granted that branch of the defendant’s motion which was to dismiss the complaint insofar as asserted against her as precluded by the doctrine of collateral estoppel is academic.”