Online reviews have taken over the world of attorney retention, and for all but the largest firms, online reviews can be life or death.  Cedeno v Pacelli
2019 NY Slip Op 32631(U) September 4, 2019 Supreme Court, New York County Docket Number: 452016/2018 Judge: Margaret A. Chan is a vivid example of a hideous situation and the aftermath.

“The Pacellis were going through a divorce in 2016. Atesta P retained Cedeno and his firm to represent her in the divorce proceedings. In the course of Cedeno’srepresentation of Atesta P, the professional relationship allegedly strayed into a personal one. In September 2016, Atesta P and Anthony P commenced the related Pacelli action. The Pacellis allege that Cedeno developed a sexual relationship with Atesta while Cedeno and his law firm was counsel to Atesta P and that Cedeno
sexually assaulted Atesta P (NYSCEF # 97). The Pacellis asserted claims against Cedeno and his firm for: breach of fiduciary duty; violation of judiciary law§ 487; sexual battery and assault; intentional infliction of emotional distress; and loss of consortium. In February 2017, Cedeno and his firm filed an answer and a counterclaim for defamation alleging, among other things, that Atesta P falsely stated that Cedeno raped her (NYSCEF # 98, ~~225-230).

In July 2018, Cedeno and his firm initiated the instant Cedeno action against the Pacellis alleging that “the Pacellis authored, created, and published or caused John Does to author, create, or publish over 120 false and defamatory reviews and websites concerning Plaintiffs” (NYSCEF # 132, ~26). Plaintiffs assert claims for: libel; trade libel; aiding and abetting defamation; intentional infliction of emotional  distress (IIED); aiding and abetting IIED; intentional interference with prospective business relations; and vicarious liability. ”

“At the outset, plaintiffs claims for IIED based on the factual allegations
contained in Schedule 1 of the complaint are dismissed, as they are factually duplicative of plaintiffs’ defamation claim (see Akpinar v Moran, 83 AD3d 458, 459[1st Dept 2011]). In any event, the alleged defamatory statements are not “so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency” (Howell v New York Post Co., 81NY2d115, 122 [1993]).”

“Plaintiffs also allege that defendants took harassing actions against
plaintiffs, including posting of. Cedeno’s cell-phone number on a Craigslist ad on Christmas day; reviews specifically mentioning Cedeno’s daughter; and the letter to Cedeno’s wife (Complaint at if91). Those allegations also fail to sufficiently allege conduct so extreme and atrocious as to support a claim for IIED (Howell, 81 NY2d at 122).

Since plaintiffs’ claim for IIED is dismissed, it follows that their claim for
aiding and abetting IIED must also be dismissed. ”

For the full flavor of the online situation, read the full decision.

Here is a succinct explanation of how to calculate the statute of limitations for either a contract or a negligence claim against an architect by the First Department in City of New York v George G. Sharp, Inc. 2019 NY Slip Op 08809 Decided on December 10, 2019

“Defendant failed to meet its prima facie burden of establishing that plaintiff City of New York’s time in which to sue has expired (see Benn v Benn, 82 AD3d 548 [1st Dept 2011]). “A cause of action to recover damages against an architect for professional malpractice is governed by a three-year statute of limitations, which accrues upon termination of the professional relationship — that is, when it completes its performance of significant (i.e. non-ministerial) duties under the parties’ contract” (New York City Sch. Constr. Auth. v Ennead Architects LLP, 148 AD3d 618, 618 [1st Dept 2017] [internal quotation marks omitted]; CPLR 214[6]). Here, the City has sufficiently alleged that defendant completed its performance under the contract, and the parties’ professional relationship terminated, on or about February 2, 2010, when defendant allegedly delivered its completed as-built designs. Because the City commenced this suit a year later, on or about January 28, 2011, its malpractice claim was timely (CPLR 214[6]).

The City’s allegations, that defendant departed from accepted practice and failed to perform services in accordance with professional standards, sound in negligence. However, even if couched in contract, the City’s claim still would be timely under CPLR 214(6) (see Matter of R.M. Kliment & Frances Halsband, Architects [McKinsey & Co., Inc.], 3 NY3d 538, 542 [2004]; Risk Control Assoc. Ins. Group v Maloof, Lebowitz, Connahan & Oleske, P.C., 151 AD3d 527, 528 [1st Dept 2017], lv dismissed 32 NY3d 1196 [2019]; compare Dormitory Auth. of the State of N.Y. v Samson Constr. Co., 30 NY3d 704 [2018]).”

Actually, this is really the year’s best example of no “but for” causation.  This failing led to dismissal in Magassouba v Purcigliotti  2019 NY Slip Op 08938 Decided on December 12, 2019 Appellate Division, First Department.  Because the AD determined that plaintiff could never have won the case, the attorneys failings made no difference at all.

“This action alleging legal malpractice was correctly dismissed because plaintiff could not show that, but for defendants’ negligence, he would have prevailed in the underlying action alleging false arrest, wrongful imprisonment, and the deprivation of rights under 42 USC § 1983 (see Brooks v Lewin, 21 AD3d 731, 734 [1st Dept 2005], lv denied 6 NY3d 713 [2006]). Plaintiff could not have prevailed in that action because the dismissing court found that there was probable cause for his arrest, and probable cause is a complete defense to the claims plaintiff asserted (Marrero v City of New York, 33 AD3d 556, 557 [1st Dept 2006]; Brooks v Whiteford, 384 F Supp 3d 365, 371 [WD NY 2019]). Plaintiff’s proposed amended malpractice complaint, which, in essence, restates the original allegations, does not rectify the deficiency.

Plaintiff’s argument that defendants failed to timely file the underlying action is unavailing because, even timely, the action would have been dismissed on the substantive ground of probable cause. His argument that defendants filed the underlying action in the wrong courthouse is unavailing because the action was dismissed against the Allegheny County District Attorney on grounds of personal jurisdiction, not subject matter jurisdiction.”

While one might think that the professional negligence field, which probably includes attorneys, brokers, real estate professionals, insurance professionals and designers has the same rules for all, that would be incorrect. Murphy v GHD, Inc. 2019 NY Slip Op 33476(U) November 27, 2019 Supreme Court, New York County Docket Number: 153468/2019
Judge: Robert D. Kalish illustrates the application of CPLR 214(d) to licensed engineers and architects.

In cases involving cases alleging design defects brought more than 10 years after completion, a heightened level of proof is required.

“CPLR 214-d and 321 l(h) were added by the Legislature in 1996 to reform
New York’s tort law, which, at the time, “tended to facilitate marginal claims against design professionals based on defects arising long after their work was completed and the improvements for which they were initially responsible had been in the owner’s possession and subject to the owner’s use and maintenance.” (Castle Vil. Owners Corp. v Greater New York Mut. Ins. Co., 58 AD3d 178, 183 [1st Dept 2008] [Lippman, P.J.]; see also Vincent C. Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, CPLR 214-d [2019] [“The purpose of CPLR 214-d is to provide ‘an expedited procedural device to quickly dispose of cases brought against a design professional more than ten years after completion that lack a basis in substantial evidence.'” [quoting Legislative Memorandum at 2614].) As the First Department
has further explained:

“The ‘substantial basis’ standard set forth in CPLR 321 l(h) constitutes a departure from the standard ordinarily applicable to the review of CPLR 3211 motions to dismiss for failure to state a cause of action. Rather than determine whether the allegations of the complaint when viewed most favorably to the plaintiff fall within any cognizable legal theory, a court reviewing the sufficiency of a complaint under CPLR 3211(h) must
look beyond the face of the pleadings to determine whether the claim alleged is supported by ‘such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact’ (Senate Mem. in Support at 2614). While under this standard a plaintiff need not demonstrate that the claim is supported by a preponderance of the evidence, a fair inference to be drawn from the legislative history is
that CPLR 321 l(h) was intended to heighten the court’s scrutiny of the complaint and thereby make it easier to dismiss a CPLR 214–d action than other types of negligence actions.”

Even though the AD expressed “concerns” about the attorney’s representation of Plaintiff, all causes of action were dismissed on statute of limitations grounds.  The claim that Plaintiff was disabled or insane was summarily denied in Jemima O. v Schwartzapfel, P.C.  2019 NY Slip Op 08793 Decided on December 10, 2019 Appellate Division, First Department.

“The motion court correctly found that plaintiff’s causes of action for legal malpractice, violation of Judiciary Law § 487, negligent misrepresentation and negligent infliction of emotional distress were time-barred as they accrued on September 10, 2013, at the latest, and plaintiff did not commence the instant action until May 31, 2017, over eight months after the applicable three-year statute of limitations had already expired (see CPLR 214; Benjamin v Allstate Ins. Co., 127 AD3d 1120, 1121 [2d Dept 2015]; Colon v Banco Popular N. Am., 59 AD3d 300, 300 [1st Dept 2009]).

Plaintiff’s claim for breach of fiduciary duty was also properly dismissed as untimely pursuant to the applicable three-year statute of limitations because plaintiff sought only money damages and not equitable relief (see Kaufman v Cohen, 307 AD2d 113, 118 [1st Dept 2003]).

Plaintiff’s argument that the statute of limitations was tolled by reason of disability or insanity pursuant to CPLR 208 was properly rejected by the motion court, without a hearing. Plaintiff failed to put forth any evidence that would support a finding of disability or insanity sufficient to show that plaintiff was unable to function in society (see Santo B. v Roman Catholic Archdiocese of N.Y., 51 AD3d 956, 958 [2d Dept 2008]). In particular, she did not submit any doctors’ affidavits or medical records documenting the severity of her condition (see Matter of Brigade v Olatoye, 167 AD3d 462 [1st Dept 2018]; Santana v Union Hosp. of Bronx, 300 AD2d 56 [1st Dept 2002]). Moreover, the record does not show that plaintiff was incapable of protecting her legal rights despite her mental health diagnosis (see Burgos v City of New York, 294 AD2d 177, 178 [1st Dept 2002]). Although we have some concerns about the actions of plaintiff’s prior counsel, this does not alter the conclusion that this action is time-barred.

The complaint fails to state a cause of action for either negligent misrepresentation or negligent infliction of emotional distress on behalf of the children. There is no allegation that defendants made any representation to the children or that defendants engaged in any extreme and outrageous conduct (see Hernandez v Central Parking Sys. of N.Y., Inc., 63 AD3d 411 [1st Dept 2009]).

The motion court correctly found that the complaint fails to state a cause of action for fraudulent misrepresentation because plaintiff’s claimed losses resulted from defendants’ unauthorized withdrawal of her appeal and not from their purported false statements as to their [*2]ability to handle administrative proceedings (see Friedman v Anderson, 23 AD3d 163, 167 [1st Dept 2005].

Because plaintiff has put forth no specific argument on appeal as to her cause of action for intentional infliction of emotional distress, such claim is deemed abandoned.”

In professional negligence cases, as in a wide swath of litigation cases, a special relationship is necessary before an entity (real estate agent, non-attorney, non-physician professional, municipality) might be liable for shortcomings.  So it is with insurance agents in STB Invs. Corp. v Sterling & Sterling, Inc. 2019 NY Slip Op 08606 Decided on December 3, 2019
Appellate Division, First Department.

“Issues of fact exist as to whether a special relationship arose between plaintiff STB Investments Corporation and its managing agent plaintiff 303 West 42nd Street Realty Co. (plaintiffs), on the one hand, and defendant insurance broker, on the other, that imposed on defendant a duty to advise plaintiffs as to insurance coverage that would have included the loss arising from plaintiffs’ demolition project (see Voss v Netherlands Ins. Co., 22 NY3d 728, 735 [2014]). Plaintiffs contend that the special relationship arose from an interaction with defendant in which they relied on defendant’s expertise as to coverage. There is evidence that plaintiffs’ property manager, who allegedly had never before purchased insurance for a demolition project, requested that defendant obtain adequate coverage for that particular risk, and that defendant agreed to do so, reviewed the demolition contract as part of its efforts, and discussed with plaintiffs the demolition contractor’s coverage in the larger context of determining the appropriate level of coverage to obtain for plaintiffs (see NWE Corp. v Atomic Risk Mgt. of N.Y., Inc., 25 AD3d 349 [1st Dept 2006]).”

OK…it happens.  It happens a lot.  Best if the mistake is caught early on.  Cornwall Warehousing, Inc. v Lerner  2019 NY Slip Op 02825 [171 AD3d 540] April 16, 2019 Appellate Division, First Department.

“Plaintiffs demonstrated a reasonable excuse for their default (CPLR 5015 [a] [1]), based on law office failure, as detailed in the affirmation of their former counsel who miscalendared the motion (CPLR 2005; People’s United Bank v Latini Tuxedo Mgt., LLC, 95 AD3d 1285, 1286 [2d Dept 2012]). Plaintiffs then moved to vacate the order entered on their default, showing that they had a meritorious defense to the underlying motion to strike their complaint pursuant to CPLR 3126 (c), since they were not in default of any disclosure order (see John Quealy Irrevocable Life Ins. Trust v AXA Equit. Life Ins. Co., 151 AD3d 592, 593 [1st Dept 2017], lv dismissed 30 NY3d 1091 [2018]; DaimlerChrysler Ins. Co. v Seck, 82 AD3d 581, 582 [1st Dept 2011]). Plaintiffs also demonstrated a potentially meritorious cause of action by providing the affidavit of their president setting forth the basis of their legal malpractice claim (see Cheri Rest. Inc. v Eoche, 144 AD3d 578, 579-580 [1st Dept 2016]).

In light of the strong public policy of this State to dispose of cases on their merits, the court improvidently exercised its discretion in denying plaintiffs’ motion to vacate the order entered on default (DaimlerChrysler Ins. Co. v Seck, 82 AD3d at 582; see Chelli v Kelly Group, P.C., 63 AD3d 632 [1st Dept 2009]).”

In an extremely detailed analysis, the Second Department illustrates the difference between NY and Delaware attorney-privilege law in Askari v McDermott, Will & Emery, LLP  2019 NY Slip Op 08547 Decided on November 27, 2019 Appellate Division, Second Department
Austin, J., J.

“The attorney-client privilege is the oldest of the privileges for confidential communications known to the common law” (Upjohn Co. v United States, 449 US 383, 389; see Spectrum Sys. Intl. Corp. v Chemical Bank, 78 NY2d 371, 377). “Its purpose is to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice” (Upjohn Co. v United States, 449 US at 389; see Spectrum Sys. Intl. Corp. v Chemical Bank, 78 NY2d at 377). “The privilege recognizes that sound legal advice or advocacy serves public ends and that such advice or advocacy depends upon the lawyer’s being fully informed by the client” (Upjohn Co. v United States, 449 US at 389).

1. New York Law

Under New York law, the attorney-client privilege regarding pre-merger communications between an attorney and his or her client which are related to a business/corporate merger does not fully pass to the new or surviving company/buyer, but remains with the former shareholders of the prior company/seller (see Tekni-Plex, Inc. v Meyner & Landis, 89 NY2d at 130). In Tekni-Plex, the Court of Appeals determined that the buyer in a corporate acquisition controlled the attorney-client privilege as to some, but not all, of the pre-merger communications (see id. at 127). In that case, Tekni-Plex, Inc. (hereinafter the original Tekni-Plex) was a Delaware corporation which had 18 shareholders and a 5-member board of directors. Tom Y. C. Tang was a director as well as a shareholder (see id.). In 1986, Tang became the sole shareholder, president, chief executive officer, and sole director of the original Tekni-Plex (see id.).”

“With respect to disclosure of the law firm’s files to the new Tekni-Plex, the Court of Appeals determined that “[a]s for confidential communications between [the original] Tekni-Plex and [the law firm] generated during the law firm’s prior representation of the corporation on environmental compliance matters, authority to assert the attorney-client privilege passed to the corporation’s successor management” (id. at 130). However, the Court distinguished the communications made during the acquisition:

“New Tekni-Plex, however, does not control the attorney-client privilege with regard to discrete communications made by either [the original] Tekni-Plex or Tang individually to [the law firm] concerning the acquisition—a time when [the original] Tekni-Plex and Tang were joined in an adversarial relationship to Acquisition. Consequently, new Tekni-Plex cannot assert the privilege in order to prevent [the law firm] from disclosing the contents of such communications to Tang. Nor is new Tekni-Plex entitled to the law firm’s confidential communications concerning its representation of [the original] Tekni-Plex with regard to the acquisition” (id.).

Thus, the Court of Appeals made a clear distinction between confidential communications regarding a company’s ongoing operations and those related to its acquisition (see id. at 136). The Court noted that, during the acquisition negotiation process, the predecessor company and its shareholders were in an adversarial relationship with the successor company (see id. at 138-139). Therefore, the original Tekni-Plex continued to control the attorney-client privilege with respect to confidential communications concerning the acquisition, and was entitled to refuse to disclose such communications to the new Tekni-Plex (see id. at 138-139; Fochetta v Schlackman, 257 AD2d 546, 546 [“Given the extent of plaintiff’s ownership interest and managerial involvement in defendant corporations prior to the disputed stock surrender, the motion court properly determined that the attorney-client privilege was not properly invoked by defendants to deny plaintiff access to otherwise privileged pre-surrender materials essential to the proof of his claims”]; see also Orbit One Communications, Inc. v Numerex Corp., 255 FRD 98, 104, 106-107 [SD NY] [“Allowing Numerex to control Old Orbit One’s privilege would lead to a fundamentally unfair result. . . . Numerex cannot both pursue the rights of the buyer and simultaneously assume the attorney-client rights of the buyer’s adversary, Old Orbit One. Old Orbit One retained ownership of, and continues to control, the attorney-client privilege as to confidential communications with [the law firm which represented it throughout the acquisition negotiations] concerning the acquisition transaction” [citation omitted]).”