Don’t rock the boat is often the wrong advice.  in LePatner Project Solutions LLC v 320 W. 115 St. 2021 NY Slip Op 01510 Decided on March 16, 2021 Appellate Division, First Department objecting made a big difference in an account stated situation.  Counterclaiming for legal malpractice also made a big difference.

“”[E]ither retention of bills without objection or partial payment may give rise to an account stated” (Morrison Cohen Singer & Weinstein, LLP v Waters, 13 AD3d 51, 52 [1st Dept 2004]). Here, plaintiff LePatner Project Solutions, LLC is entitled to summary judgment on its account stated claim against the limited liability corporation defendant only for project management invoices from May 19, 2017 through December 6, 2017, as defendants never timely objected to such invoices. Defendants’ vague assertion that they “raised” the issue with plaintiffs is insufficient to create an issue of fact (Kucker & Bruh, LLP v Sendowski, 136 AD3d 475, 476 [1st Dept 2016]; Zanani v Schvimmer, 50 AD3d 445, 446 [1st Dept 2008]).

While defendants also failed to timely object to plaintiffs’ legal services invoices rendered throughout 2017, defendants’ counterclaim for legal malpractice “is intertwined with . . . plaintiff law firm’s claim for legal fees,” precluding summary judgment on the claim with regard to the invoices for legal services (Emery Celli Brinckerhoff & Abady, LLP v Rose, 111 AD3d 453, 454 [1st Dept 2013], lv denied 23 NY3d 904 [2014]). Plaintiffs also are not entitled to summary judgment on their account stated claim insofar as it seeks payment of the December 19, 2017 additional services invoice, to which defendants timely objected on January 15, 2018 (see Healthcare Capital Mgt. v Abrahams, 300 AD2d 108 [1st Dept 2002]). Plaintiffs failed to establish their entitlement to summary judgment against the individual defendants.”

Sometimes with the statute of limitations staring at plaintiff, the question of whether the case is premature arises.  There is, of course, a conundrum.  Bring the case now (while the underlying case is still pending) and it is too early.  Wait for the underlying case to resolve, and it will be too late.

Aydiner v Karasik Law Group, P.C.  2021 NY Slip Op 30781(U) March 15, 2021 Supreme Court, Richmond County Docket Number: 151944/2020
Judge: Ralph J. Porzio resolves the issue in a manner fair to both parties.

“To state a cause of action for legal malpractice, a plaintiff must allege “(1) that the attorney ‘failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession,’ and (2) that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages.” Cervini v. Zanoni, 95 AD3d 919, 920 [2d Dept 2012]. (See Kahlon v. DeSantis, 182 AD3d 588 [2d Dept 2020]). “To establish the element of causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages but for the attorney’s negligence” Cervini v.
Zanoni, 95 AD3d 919, 920 [2d Dept 2012]. The key question in the instant Motion is whether Plaintiffs’ legal malpractice cause of action is premature based on Plaintiffs’ pending Order to Show Cause with respect to the Underlying Foreclosure Action. This Court finds that the answer to this question is yes.”

“This Court finds that since the elements of causation and damages in Plaintiffs’ legal malpractice cause of action are dependent on the outcome of the Order to Show Cause, such cause of action is premature and must be dismissed with leave to replead under CPLR §3211(a)(7).”

Hall v Hobbick 2021 NY Slip Op 01398 Decided on March 10, 2021 Appellate Division, Second Department illustrates the principle that no written retainer agreement is necessary for the formation of an attorney-client relationship.

“The Supreme Court erred in granting that branch of the third-party defendants’ motion which was pursuant to CPLR 3211(a)(1) and (7) to dismiss so much of the first cause of action as sought compensatory damages for legal malpractice in connection with the purchase of the Brooklyn property. Contrary to the third-party defendants’ contention, their submission of a retainer agreement between themselves and Hall failed to conclusively establish that no attorney-client relationship existed between the third-party defendants and Hobbick with respect to the purchase of the Brooklyn property by Hall and Hobbick (see CPLR 3211[a][1]). “[A]n attorney-client relationship does not depend on the existence of a formal retainer agreement” (Moran v Hurst, 32 AD3d 909, 911). Furthermore, the third-party complaint sufficiently alleged the existence of an attorney-client relationship between Hobbick and the third-party defendants, as well as the other elements of legal malpractice, including damages, which “may include litigation expenses incurred in an attempt to avoid, minimize, or reduce the damage caused by the attorney’s” negligence (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 443 [internal quotation marks omitted]; see Mawere v Landau, 130 AD3d at 990). Accordingly, the Supreme Court should not have granted that branch of the third-party defendants’ motion which was to dismiss so much of the first cause of action as sought to recover compensatory damages for legal malpractice.”

Alrose Steinway, LLC v Jaspan Schlesinger, LLP  2021 NY Slip Op 30619(U) March 5, 2021Supreme Court, New York County Docket Number: 151482/2017 Judge: Andrea Masley is a long, reasoned and detailed discussion of a legal malpractice claim based upon a projection of future commercial events.  it is too long to effectively excerpt it for a blog entry.  The take-away from this case is that a “future profits” or projection of future losses based upon current events is tortious, twisted and requires many assumptions or (less positively) “speculations.”

“Defendants have also demonstrated that plaintiff’s theory of proximate cause is couched in gross speculations on future events. Defendants argue that plaintiff’s claims are wholly speculative and depend on too many uncertainties. Defendants point to the uncertainty associated with the requirement that plaintiff would be in compliance with all of its obligations under the ground lease before it could finally exercise the option in 2024. In support, defendants rely on Section 30.01 of the lease which states “[p]rovided that Tenant is not in material default beyond any applicable grace period … at the time of the exercise of this option to purchase, the Landlord grants to the Tenant … at any time during the last year of the term of this lease, the right to purchase the entire Premises leased hereunder.” (NYSCEF 156, Ground Lease§ 30.01 [emphasis added].)

Because plaintiff’s theory of proximate cause is based on the assumption that it would not have been in material default four years from now, and that it would have the funds to exercise the option four years from now, defendants maintain that the theory is ‘couched in terms of gross speculations on future events.”‘ (Phillips-Smith Specialty Retail Group II, 265 AD2d at 210.) Therefore, defendants posit that the theory is insufficient as a matter of law to establish proximate cause. (Id)
Defendants also maintain that plaintiff’s damages are speculative because whether plaintiff would be able to purchase the Premises four years from now in the amount of $11,000,000 is, by definition, speculation. Lastly, defendants contend that the damages as alleged are not clearly calculable because, although plaintiff orchestrated the purchase of the Premises four years ago for $14,500,000, it is unclear what, if any, purchase price would exist in 2024. (Gallet, Dreyer & Berkey, LLP, 141 AD3d at 406.) “

Cases are rarely directly dismissed for discovery failures. Generally, discovery failures manifest themselves in a bad outcome at trial, in a bad outcome on summary judgment, or in a flameout prior to trial, with attorneys withdrawing and the case sputtering to a finish.  Here, in Cascardo v Dratel  2021 NY Slip Op 30667(U) March 4, 2021 Supreme Court, New York County Docket Number: 101055/2017 Judge: Erika M. Edwards discovery failures led directly to dismissal.

“Over the past three years, Plaintiff has repeatedly refused to comply with Defendants’ numerous requests and multiple court orders to provide Defendants with authorizations for copies of the flies from Plaintiff’s previous ERISA attorney and forensic accountant which is
relevant to her claim that Defendants copied documents from those files, duplicated research performed by prior counsel, and billed for the work.

Where a party “willfully fails to disclose information which the court finds ought to have been disclosed,” the court may strike pleadings or parts thereof, dismiss the action or any part thereof or enter a default judgment against  the insubordinate party (CPLR 3126[3]). Although actions should be disposed of on the merits whenever possible, the court may strike a pleading as a sanction against a party who refuses to obey an order for disclosure (Reidel v. Ryder TRS, Inc., 13 AD3d 170, 171 [1st Dept 2004]). A Plaintiff’s long continued pattern of noncompliance with with orders and discovery demands give rise to an inference of willful and contumacious conduct (Jones v Green, 34 AD3d 260, 261 1st Dept 2006] citing Goldstein v CIHC World Markets C01p., 30 AD3d 217 [1st Dept 2006]; see Perez v City of New York, 95 AD3d 675, 676 [181 Dept 2012])”

“However, the court grants Defendants motion to dismiss Plaintiff s A1mmded Verified Complaint and strikes Plaintiffs pleadings for Plaintiffs continued failure to provide the authorizations for Defendants to obtain the files from her previous ERISA attorney and forensic
accountant. “

In Priceless Travel, Inc. v Wender Law Group, PLLC  2021 NY Slip Op 30572(U) February 26, 2021 Supreme Court, New York County
Docket Number: 151867/2020, Judge Margaret A. Chan discusses the necessary pleading of damages to avoid dismissal at the pre-answer stage.

“As for the motion to dismiss based on the failure to adequately allege
damages, the court notes that “[a]n action for legal malpractice requires proof of the attorney’s negligence, a showing that the negligence was the proximate cause of the plaintiff’s loss or injury, and evidence of actual damages” (Pellegrino v File, 291 AD2d 60, 62 [1st Dept], lv denied 98 NY2d 606 [ 2002]) At issue here is whether
plaintiff has sufficiently alleged that it has “suffered actual and ascertainable damages” (Busino v Meachem, 270 AD2d 606, 609 [1st Dept 2000]). In general, damages may not be speculative, possible, or imaginary, but must be capable of being proven with reasonable certainty and directly traceable to the conduct or negligence of the defendant (see generally Kenford Co. v Erie Cty., 67 NY2d 257,
261 [1986]). At the same time, “to survive a … preanswer dismissal motion, a pleading need only state allegations from which damages attributable to the defendant’s conduct may be reasonably inferred” (Lappin v Greenberg. 34 AD3d 277, 279 [1st Dept 2006] [internal citations omitted]). Significantly, at the pleading stage, a plaintiff “is not obligated to show…that it actually sustained damages” (Inkine Pharmaceutical Company, Inc. v Coleman, 305 AD2d 151, 152 [1st Dept
2003]) [internal citation and quotation omitted]).

Under this standard, the court finds that plaintiff’s allegations that
defendants’ malpractice resulted in its loss of licensing fees that would have been paid by MasterCard for the use of the Mark and caused plaintiff to incur legal fees are sufficient to state a claim for damages attributable to defendants’ malpractice. And, contrary to defendants’ argument, at the pleading stage, plaintiff need not show that MasterCard would have actually paid plaintiff licensing fees for the Mark or that plaintiff was in a financial position to defend the Mark (see Inkine Pharmaceutical Company, Inc., 305 AD2d at 152 [plaintiff sufficiently stated a claim for legal malpractice based on allegations that “defendants’ negligence in failing to timely file the Asian patent on the pharmaceutical product at issue caused a substantial diminution of the value of its worldwide license”]).”

Lavelle-Tomko v Aswad & Ingraham  2021 NY Slip Op 01112 Decided on February 18, 2021 Appellate Division, Third Department is a cautionary tale about ending an attorney-client relationship and the dangers of not keeping good records.  Was there one representation or two?  Was plaintiff too late in bringing a JL § 487 claim?

“After plaintiff was terminated by her former employer (hereinafter Century 21) from her position as a real estate agent in 2004, she allegedly used her access to Century 21’s voicemail to steal business, among other things. Century 21’s owners, Thomas A. Sbarra and Deborah J. Sbarra, discovered plaintiff’s activity in 2007 and commenced a civil action against her (hereinafter the first action). The Department of State’s Division of Licensing Services Enforcement Unit (hereinafter the Department) then began an investigation into plaintiff’s conduct. Plaintiff hired defendant Richard N. Aswad and his law firm, defendant Aswad & Ingraham (hereinafter A & I), to represent her in the first action, signing a letter of engagement on July 27, 2007 and providing A & I a retainer. Aswad represented plaintiff in the negotiation of a settlement agreement with Century 21 and the Sbarras, which was executed on August 19, 2007. The settlement agreement required plaintiff to, among other things, surrender her real estate license to the Department and cease working as a real estate agent or broker by September 1, 2007. Aswad timely delivered plaintiff’s license to the Department. Pursuant to plaintiff’s request to cancel her retainer agreements, on October 8, 2007, A & I sent plaintiff the balance of her retainer. In March 2008, after some negotiation involving Aswad and other attorneys, plaintiff’s license surrender was accepted by the Department.

In September 2009, plaintiff reapplied for and received her real estate license, and she resumed employment as a real estate broker in January 2010. On February 24, 2010, the attorney for Century 21 and the Sbarras wrote to Aswad asserting that plaintiff had violated the settlement agreement, as it had permanently barred plaintiff from reacquiring her license or resuming work as a broker or agent. Aswad responded that his representation of plaintiff had ended and he had not been retained on a continuing basis, and he forwarded the attorney’s letter to plaintiff. Plaintiff then asked Aswad to respond to the letter, which he did. When Century 21 and the Sbarras commenced an action for breach of the settlement agreement (hereinafter the second action), Aswad became attorney of record. Century 21 and the Sbarras prevailed at trial, obtaining a judgment requiring plaintiff to permanently surrender her real estate license, along with nominal damages (see Thomas A. Sbarra Real Estate, Inc. v Lavelle-Tomko, 117 AD3d 1210, 1210 [2014], lv denied 26 NY3d 907 [2015]). Aswad’s representation ended on September 24, 2015, after exhausting all appeals in the second action.”

“Defendants demonstrated, and plaintiff does not dispute, that her cause of action accrued on August 19, 2007, the date that she executed the settlement agreement in the first action. Plaintiff commenced this action on October 25, 2016, more than nine years after accrual and well beyond the three-year statute of limitations (see CPLR 214 [6]). Defendants thus met their initial burden on their motion for summary judgment based on that defense (see Haynes v Williams, 162 AD3d at 1378). The burden then shifted to plaintiff to demonstrate that the statute of limitations was tolled or otherwise inapplicable, or at least that there is a question of fact to prevent summary judgment to defendants on that issue. Similarly, on the portion of plaintiff’s cross motion seeking dismissal of defendants’ statute of limitations defense, plaintiff had to prove as a matter of law that her action is not time-barred (see Red Zone LLC v Cadwalader, Wickersham & Taft LLP, 27 NY3d 1048, 1049-1050 [2016]).

To meet her burden, plaintiff primarily relies on the continuous representation doctrine. “This doctrine applies where there is continuing trust and confidence in the relationship between the parties and the attorney’s continuing representation pertains to the specific matter in which the attorney committed the [*3]alleged malpractice, not merely the continuity of a general professional relationship” (Deep v Boies, 53 AD3d 948, 950 [2008] [internal quotation marks and citations omitted]; see McCoy v Feinman, 99 NY2d at 306; Shumsky v Eisenstein, 96 NY2d 164, 168 [2001]; Deep v Boies, 121 AD3d 1316, 1318 [2014], lv denied 25 NY3d 903 [2015]). “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” (Zorn v Gilbert, 8 NY3d at 934 [internal quotation marks, ellipsis and citations omitted]). “For the continuous representation doctrine to apply to an action sounding in legal malpractice, there must be clear indicia of an ongoing, continuous, developing, and dependent relationship between the client and the attorney, which often includes an attempt by the attorney to rectify an alleged act of malpractice” (International Electron Devices [USA] LLC v Menter, Rudin & Trivelpiece, P.C., 71 AD3d at 1512-1513 [internal quotation marks, ellipsis, brackets and citations omitted]; see Leeder v Antonucci, 174 AD3d 1469, 1471 [2019]; see also Matter of Lawrence, 24 NY3d 320, 342-343 [2014]; Creative Rest., Inc. v Dyckman Plumbing & Heating, Inc., 184 AD3d 803, 805 [2020]).”

“In sum, some of the evidence suggests that defendants’ representation was continuous, that the first and second actions concerned the same matter, and that defendants were involved in the second action to rectify their alleged malpractice in the first action. However, other evidence indicates that defendants’ representation terminated after the first action, the parties had no communication for more than a year, and they agreed to commence a new representation related to the second action; this evidence is inconsistent with a mutual understanding by the parties of the need for further representation on the same matter. Also weighing against plaintiff’s argument is evidence of involvement by and consultation with other attorneys, including her husband and his law partner, raising the possibility that plaintiff did not repose her trust and confidence in defendants (compare Farage v Ehrenberg, 124 AD3d 159, 167-168 [2014], lv denied 25 NY3d 906 [2015]). Thus, although plaintiff raised questions of fact as to the defense, she failed to conclusively establish that the continuous representation doctrine tolled the statute of limitations (see Red Zone LLC v Cadwalader, Wickersham & Taft LLP, 27 NY3d at 1050; Town of Amherst v Weiss, 120 AD3d 1550, 1552-1553 [2014]; Deep v Boies, 53 AD3d at 952; Gravel v Cicola, 297 AD2d 620, 621 [2002]). Accordingly, although plaintiff was not entitled to summary judgment granting dismissal of the statute of limitations defense, we find that Supreme Court erred in granting summary judgment to defendants based on that defense.”

“We also deny the portion of plaintiff’s cross motion seeking to amend her amended complaint to add a cause of action under Judiciary Law § 487. “[I]n the absence of prejudice or surprise resulting directly from the delay in seeking leave [to amend a pleading], such applications are to be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit” (Lakeview Outlets Inc. v Town of Malta, 166 AD3d 1445, 1446 [2018] [internal quotation marks and citations omitted]). Judiciary Law § 487 permits recovery of treble damages in a civil action against an attorney who intentionally deceives the court or a party during the pendency of a judicial proceeding (see Beshara v Little, 215 AD2d 823, 823 [1995]; see generally Amalfitano v Rosenberg, 12 NY3d 8, 14 [2009]). The claim must be pleaded with particularity and allege “intentional deceit and damages proximately caused by the deceit” (Jean v Chinitz, 163 AD3d 497, 497 [2018]). The proposed third amended complaint is palpably insufficient; it fails to plead the cause of action with particularity, as plaintiff pleaded no facts tending to prove [*6]that Aswad intended to deceive her. Moreover, plaintiff was aware of the facts allegedly supporting her proposed amendment before she filed the note of issue and certificate of readiness, yet she waited more than six months after such filing before seeking to add the Judiciary Law § 487 cause of action. Defendants plausibly assert prejudice related to this delay, as they intend to seek discovery on this new claim, but discovery is otherwise complete. Under the circumstances, plaintiff may not amend her amended complaint to add this new cause of action.”

Long Is. Med. Anesthesiology, P.C. v Rosenberg Fortuna & Laitman, LLP
2021 NY Slip Op 01037 Decided on February 17, 2021 Appellate Division, Second Department is really about a fight between doctors.  Nevertheless, even the oldest profession needs the intervention of younger professions in order to fight.  Here, the lawyers are not responsible for the claimed shortcomings.

“In 1998, the plaintiff Long Island Medical Anesthesiology, P.C. (hereinafter LIMA), which was wholly-owned by the plaintiff Richard Gabay, contracted with Long Island Medical & Gastroenterology Associates, P.C. (hereinafter LIMGA), a medical practice owned by Jay G. Merker, Stewart A. Robbins, and Nathan D. Schulman (hereinafter collectively the LIMGA shareholders), to be the exclusive provider of anesthesiology services for LIMGA (hereinafter the exclusivity agreement). In other actions not presently before this Court, LIMA and Gabay (hereinafter together the plaintiffs) have alleged, inter alia, that the LIMGA shareholders breached the exclusivity agreement.

In the present action, the plaintiffs assert that in May 2014, the LIMGA shareholders engaged the services of the defendant Rosenberg Fortuna & Laitman, LLP, in the persons of the defendants David Rosenberg and Brett Zinner (hereinafter collectively RFL), to facilitate transactions resulting in the replacement of the plaintiffs as the exclusive provider of anesthesiology services for LIMGA and, ultimately, to seize without compensation Gabay’s shares in Day Op of North Nassau, Inc. (hereinafter Day Op). RFL moved pursuant to CPLR 3211(a)(3) and (7) to dismiss the complaint in this action. The plaintiffs opposed the motion, and cross-moved pursuant to CPLR 3211(e) for leave to amend the complaint and pursuant to CPLR 3211(d) for leave to conduct disclosure. The Supreme Court granted RFL’s motion and denied the plaintiffs’ cross motion. The plaintiffs appeal.”

“As the Supreme Court noted, civil conspiracy is not recognized as a civil cause of action in New York (see Notaro v Performance Team, 136 AD3d 997, 999), nor does a violation of the Rules of Professional Responsibility, without more, support either an independent cause of action or a cause of action alleging legal malpractice, even where the alleged violation is a conflict of interest (see Doscher v Meyer, 177 AD3d 697, 699; DeStaso v Condon Resnick, LLP, 90 AD3d 809, 814). In any case, since RFL’s retainer was signed only on behalf of the LIMGA shareholders, not on behalf of any entity in which Gabay or LIMA had a legal interest, RFL did not have a duty to the plaintiffs (see Strujan v Kaufman & Kahn, LLP, 168 AD3d 1114, 1115; Betz v Blatt, 160 AD3d 696, 698), and the alleged conflict of interest did not arise.

To the extent that the first cause of action asserts either tortious interference with contractual relations and/or aiding and abetting tortious interference with contractual relations, both the documentary evidence and the complaint itself defeat this claim. The plaintiffs allege that the LIMGA shareholders’ wrongful acts began in 2009 and culminated in a breach of the exclusivity agreement in March or April of 2014, but the copy of RFL’s retainer, which the plaintiffs themselves submitted, establishes that the LIMGA shareholders did not retain RFL until May 2014. Since RFL had not yet been retained at the time of the LIMGA shareholders’ alleged wrongful acts, RFL could not have participated in or aided and abetted those actions (see Sayles v Ferone, 137 AD3d 486). The same reasoning applies to any claim that RFL aided and abetted fraud (see Betz v Blatt, 160 AD3d at 700; Goel v Ramachandran, 111 AD3d 783, 792). Furthermore, the complaint is not pleaded with the particularity necessary to sustain a cause of action alleging fraud (see CPLR 3016[b]; Nabatkhorian v Nabatkhorian, 127 AD3d 1043, 1044).

To the extent that the plaintiffs claim that RFL aided and abetted conversion, their claim appears to rest on their allegation that the LIMGA shareholders wrongfully terminated the services of LIMA and Gabay at a special meeting of Day Op held on November 5, 2014, and attempted to seize Gabay’s shares in Day Op for no consideration. Although this meeting occurred after RFL was retained, the complaint asserts only that the LIMGA shareholders attempted to seize Gabay’s shares, not that they did so. In any event, since an attorney acting in good faith is not civilly liable for the acts of the client, the plaintiffs’ claim is defeated by their failure to allege any facts that would demonstrate that, to the extent RFL assisted the LIMGA shareholders as alleged, RFL knew or should have known that the LIMGA shareholders’ termination of the services of LIMA and Gabay and attempt to seize Gabay’s shares was wrongful (see Art Capital Group, LLC v Neuhaus, 70 AD3d 605, 606; Mokay v Mokay, 67 AD3d 1210, 1212).

An attorney is liable under Judiciary Law § 487(1) if he or she “[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party.” “‘A cause of action alleging a violation of Judiciary Law § 487 must be pleaded with specificity'” (Sammy v Haupel, 170 AD3d 1224, 1225, quoting Betz v Blatt, 160 AD3d at 698). “Judiciary Law § 487 focuses on the attorney’s intent to deceive, not the deceit’s success” (Sammy v Haupel, 170 AD3d at 1225 [internal quotation marks omitted]; see Betz v Blatt, 160 AD3d at 699). Here, the Supreme Court correctly determined that, even accepting the plaintiffs’ allegations as true and giving the complaint the benefit of every favorable inference (see Arnell Constr. Corp. v New York City Sch. Constr. Auth., 177 AD3d 595, 596), the plaintiffs failed to plead this cause of action with sufficient particularity to withstand a motion to dismiss.”

Defendants made an offer to settle the case.  Plaintiff’s attorneys did not communicate the offer to Plaintiff.  Plaintiff never got the chance to consider it.  Summary judgment granted shortly thereafter.  Problem for the attorneys?  Not in Drasche v Edelman & Edelman, P.C.  2021 NY Slip Op 30429(U) February 12, 2021 Supreme Court, New York County Docket Number: 153713/2020 Judge: David Benjamin Cohen.

“On or about December 21, 2015, plaintiff was injured at 2323 Broadway in Manhattan, which premises were owned or leased by Banana  Republic, LLC (“Banana Republic”) and/or The Gap. Doc. 1 at par. 6. Plaintiff thereafter retained the firm to undertake an investigation of
the incident and to commence an action on her behalf against Banana Republic and/or The Gap. Id.”

” On or about February 11, 2016, the firm commenced an action on plaintiff’s behalf as against Banana Republic and The Gap (“the underlying action”). Doc. 1 at par. 10; Doc. 7. Plaintiff was deposed in the underlying action on December 13, 2016, during which proceeding
she was represented by Engle. Id. at par. 12. Following plaintiff’s deposition in the underlying action, defendants allegedly made a settlement offer to Engle, who in tum advised Edelman, an
“owner or shareholder” of the firm, about the offer. Id. at 7, 14. However, defendants did not advise plaintiff that a settlement offer had been made.”

“Banana Republic and The Gap thereafter moved for summary judgment in the underlying action. Id. at par. 17. By order dated July 6, 2018, this Court (Edmead, J.) granted the motion and the complaint was dismissed. Id. at pars. 17-18; Doc. 9. By order dated May 9, 2019, the Appellate Division, First Department affirmed Justice Edmead’s order of dismissal.”

” Although plaintiff does not specifically allege that defendants “failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession” (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442), she does allege that defendants were “negligent and [departed] from acceptable practice for attorneys engaged in the practice oflaw in the State of New York.” Doc. 1 at par. 20. Viewing this claim in a light most favorable to plaintiff, this Court finds that it adequately sets forth the standard of care from which defendants allegedly deviated. However, plaintiff fails to allege that she would not have sustained damages “but for” the
defendants’ alleged negligence (see Rudolfv Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442). As noted above, plaintiff claims that the defendants’ failure to advise her about the settlement offer “deprived [her] of the opportunity to settle her lawsuit and thereby obtain a monetary recovery for her injuries, pain and suffering, and medical bills.” Id. at par. 20 (emphasis added). However, she does not claim that she would have accepted the settlement offer had she
known about it. Thus, her legal malpractice claim must be dismissed (see Magnacoustics, Inc. v Ostrolenk, Faber, Gerb & Soffen, 303 AD2d 561, 562 [2d Dept 2003] [legal malpractice claim dismissed where plaintiffs failed to demonstrate that, but for defendants’ alleged negligence in failing to advise them that a settlement offer had been made, they would have accepted the offer and would not have sustained any damages]; Cannistra v O’Connor, McGuinness, Conte, Doyle, Oleson & Collins, 286 AD2d 314, 315-316 [2d Dept 2001] [plaintiffs failed to establish that, but for defendants’ alleged negligence in failing to advise them of a deadline for accepting a settlement offer, they would have accepted it]). Moreover, since “mere speculation of a loss resulting from an attorney’s alleged omissions … is insufficient to sustain a claim” for legal malpractice” (Gallet,
Dreyer & Berkey, LLP v Basile, 141AD3d405, 405-406 [1st Dept 2016] [internal quotation marks omitted]), plaintiffs claim that she may have accepted a settlement offer had she known about it must fail for this reason as well. “

Successful claims under Judiciary Law 487 are rare.  In recent years they have been applied widely and with diminishing success.  Here, the claim is essentially that the corporation’s attorneys defended a law suit and in doing so engaged in deceit.  In Dial Car Inc. v Tuch & Cohen, LLP  2021 NY Slip Op 30407(U) February 10, 2021 Supreme Court, Kings County
Docket Number: 514138/20 Judge: Leon Ruchelsman the court dismissed.

“The plaintiff is a black car livery service catering to high end clients in Brooklyn. In 2015 Yakov Guzman initiated a shareholder derivative action against Michael Kordonsky and Jeffrey Goldberg, members of the corporation on the grounds they wasted corporate assets. The defendants represented Dial in that proceeding. The complaint alleges the defendants, who should have championed the allegations of Guzman instead acted in ways which benefitted Kordonsky and Goldberg to the detriment of Dial. Specifically, the defendants agreed with a motion to dismiss that was filed by Kordonsky and Goldberg. Further, the defendants unsuccessfully opposed Guzman’s motion to replead the complaint and a further motion to dismiss the amended complaint.
Further, the complaint alleges the defendants negotiated retirement payments to Goldberg in violation of the By-Laws which require a shareholder vote. Moreover, the complaint alleges the defendants negotiated a general release in favor of Goldberg following the service of the Guzman complaint in violation of the By-Laws. ”

“Concerning Judiciary Law §487, it is well settled that to establish such a cause of action the plaintiff must present evidence an attorney acted “with intent to deceive” either the court or any party (see, Moormann v. Perini Hoerger, 65 AD3d 1106, 886 NYS2d 49 [2d Dept., 2009]). The allegations concerning the deception must be pled with particularity (Betz v. Blatt, 160 AD3d 696, 74 NYS3d 75 [2d Dept., 2018]). Moreover, the cause of action is only applicable if the conduct alleges took place in a proceeding where the plaintiff was a party (Barouh v. Law offices
of Jason L. Abelove, 131 AD3d 988, 17 NYS3d 144 [2d Dept., 2015]). First, it must be noted that the Second Department no longer maintains a cause of action pursuant to Judiciary Law §487
based upon an attorney’s egregious, extreme or chronic delinquent
activities. Rather, “the only liability standard recognized in
Judiciary Law §487 is that of an intent to deceive” (Dupree v.
Vorhees, 102 AD3d 912, 959 NYS2d 235 [2d Dept., 2013]). Second,
considering the intent to deceive, such intent can hardly be
demonstrated. The complaint merely alleges in conclusory fashion
that the defendants “have continuously consented to deceit or
collusion, with the intent to deceive and harm Dial” (see, Complaint, ¶157) without elaborating upon those allegations. The mere pursuant of the dismissal of the Guzman lawsuit can hardly be considered an intent to deceive the plaintiff. Further, since that is the only conduct alleged wherein Dial was a party in a pending action all of the other allegations of the complaint cannot sustain a cause of action in this regard.”