The question of identity and partnership lead to a question of deceit.  If an attorney is a partner may he release a client.  If he is not a partner is it a violation of Judiciary Law § 487 to give the release?  For now, the question remains in limbo.

Michael J. Devereaux & Assoc., P.C. v Tufo  2020 NY Slip Op 30020(U)  January 6, 2020 Supreme Court, New York County Docket Number: 150497/14 Judge: Tanya R. Kennedy denies summary judgment to plaintiff.  Litigation continues and will answer these questions.

“In Motion Sequence Number 007, plaintiff, Michael J. Devereaux & Associates, P.C. (“plaintiff law firm”), moves for an order: ( 1) granting a charging lien against a settlement amount of $6,598,453.20, pursuant to Judiciary Law §475; (2) directing defendants John Tufo (“John”) and Janice Tufo (“Janice”), (collectively, the “Tufos”), to escrow unpaid attorneys’ fees and expenses of $813,561.63, by paying that amount into Supreme Court or depositing such amount into an independent separate interest bearing account with the bank sending monthly statements to plaintiff law firm; and (3) imposing a lis pendens against properties the Tufos own to enforce the charging lien.

In Motion Sequence Number 008, plaintiff law firm moves, pursuant to CPLR 3212, for summary judgment on its first, second, third, and fifth causes of action for failing to pay invoices for attorneys’ fees and expenses in the sum of $557,412.59, and on its sixth cause of action for
quantum meruit; summary judgment declaring null and void a General Release, dated September 9, 2013; summary judgment on its causes of action for violation of Judiciary Law §487 and to recover attorneys’ fees, costs, and disbursements; as well as for summary judgment dismissing the counterclaims which defendant Sidney Baumgarten (“Baumgarten”) interposed to recover attorneys’ fees for services rendered while associated with plaintiff law firm.

In addition, plaintiff law firm seeks to strike the pleadings of defendants, the Tufos, John Russell (“Russell”), as notary and attorney, and Baumgarten, individually and as attorney, (collectively, the “Defendants”), or to preclude Defendants from introducing certain evidence; and to impose sanctions against Defendants.”

From July 30, 2009 to October 15, 2014, plaintiff iaw firm assumed the name Devereaux, Baumgarten (see Certificates, NYSCEF Doc. Nos. 421-422, 452-453). Plaintiff law firm also assumed the name Devereaux Law Group, effective March 7, 2014 (see Certificates, NYSCEF Doc. Nos. 423, 454). Michael Devereaux (“Devereaux”) is the sole owner and principal of plaintiff law firm (see Devereaux Affidavit, ~l, NYSCEF Doc. No. 450).

The parties disagree as to the business relationship between Devereaux and Baumgarten. Devereaux claims that Baumgarten was a tep.ant in plaintiff law firm’s office and that Baumgarten vacated the office after their professional relationship deteriorated (id., ~2; see Email, NYSCEF Doc. No. 426).”

“However, Baumgarten maintains that he joined plaintiff law firm as a non-equity partner, agreeing to share the fees he received from his practice with Devereaux (see Baumgarten Affidavit, if5, NYSCEF Doc. No. 562). Baumgarten maintains that the letterhead of plaintiffs law firm listed him as a partner in May 2010 (id), and that Devereaux testified at his EBT that he may have represented that Baumgarten was a non-equity partner in plaintiff law firm (see Devereaux EBT,
P. 76, L. 23-25 – P. 77, L. 4, NYSCEF Doc. No. 602). ”

“On September 9, 2013, Baumgarten, as Partner of Devereaux, Baumgarten, executed a General Release, in consideration of the sum of $285,260.00 received from the Tufos, discharging the Tufos from all debts, “specifically [including] all legal services, any and all bills, statements . and invoices pertaining to the litigation between John and Westchester Automobile Co, Inc. (Acura of Westchester) et al, and all related litigation in the Supreme Court, New York County under
index numbers 110604/11, 650247/12, 650471/12 and 651100/12″ (see NYSCEF Doc. No. 23). Russell notarized the General Release, acknowledging Baumgarten’s signature (id). ”

“After reviewing the evidence presented, the Court concludes that the existence of two retainer agreements for the same legal services raises an issue of fact with respect to the parties’ intent, barring summary judgment on the claim for breach of the retainer agreement. Thus, the
branch of the motion for summary judgment on the breach of contract claim is denied. ”

“The triable issues of fact regarding Baumgarten’s authority to execute the General Release precludes summary judgment as to the validity of the General Release, or a claim for violation of Judiciary Law §487. ”

How the case was dismissed becomes the most important issue in Finamore v David Ullman, P.C. 2020 NY Slip Op 00105 Decided on January 8, 2020 Appellate Division, Second Department .

“In an action to recover damages for legal malpractice, the plaintiff, Sandro Finamore, in his capacity as executor of the estate of Ione Finamore, deceased, appeals from an order of the Supreme Court, Kings County (Karen B. Rothenberg, J.), dated April 20, 2017. The order granted the defendants’ motion (1) pursuant to CPLR 5015(a)(1) to vacate an order of the same court dated January 25, 2017, granting the plaintiff’s unopposed motion for leave to amend the caption and to restore the action to the calendar, and thereupon to deny the plaintiff’s motion, and (2) to dismiss the complaint, and denied the plaintiff’s cross motion for summary judgment on the issue of liability. The appeal brings up for review so much of an order of the same court dated November 16, 2017, as, upon reargument, adhered to the determination in the order dated April 20, 2017 (see CPLR 5517[b]).”

“The defendants contend that the action was marked off the calendar on November 6, 2015, for failure to file a note of issue. However, the record does not contain a 90-day notice demanding the filing of a note of issue, and the defendants acknowledge in their brief on appeal that discovery has yet to be completed. The defendants also contend that the action was subject to dismissal pursuant to CPLR 3404. However, if no note of issue was filed, the action could not have been on the trial calendar, and CPLR 3404 would not apply (see Kapnisakis v Woo, 114 AD3d 729).

The defendants further contend that the plaintiff lacked the capacity to make the prior motion, and that the statute of limitations to commence an action as an estate representative expired before the plaintiff made the prior motion (see CPLR 210[a]). However, the plaintiff had the capacity to commence this action on his mother’s behalf as her attorney-in-fact pursuant to the power of attorney (see Benishai v Epstein, 116 AD3d 726, 726). The statute of limitations does not bar the action, provided that the plaintiff actually had the capacity to sue prior to the expiration of the statute of limitations (see Vastola v Maer, 39 NY2d 1019, 1021; Van der Stegen v Neuss, Hesslein & Co., 270 NY 55, 62-63; cf. Goldberg v Camp Mikan-Recro, 42 NY2d 1029, 1029-1030). Upon his mother’s death, the plaintiff correctly sought substitution of himself in his capacity as administrator of her estate (see CPLR 1021).

Accordingly, the defendants’ arguments in opposition to the plaintiff’s prior motion which was granted in the order dated January 25, 2017, were without merit, and the Supreme Court should have denied the defendants’ motion to vacate that order, which was entered upon their default in opposing the prior motion.”

Some courts hold that any claim against a “learned professional” must be analyzed via the lens of malpractice, legal, medical or professional.  This implies certain statutes of limitation, certain obligations of a professional and other differences between the professional and the lay person.  Here, in Sutherland v Fitzpatrick  2020 NY Slip Op 30029(U)  January 2, 2020
Supreme Court, Kings County Docket Number: 2090/2018 Judge: Lara J. Genovesi. the court is willing to allow those boundaries to become blurred.  Some of the claims are against the opposing attorney for representations made in a contract negotiation setting, some are for work performed thereafter, and some are alleged in regular negligence terms for work performed as an attorney.

“This action arises from plaintiffs purchase of the premises at 4029 Hylan Boulevard, Staten Island, New York, a restaurant/tavern formerly known as the Dugout South. Plaintiff, through Access Unlimited Corporation, purchased the property from Let the Good Times Roll, LLC (the seller). In this transaction, plaintiff was represented by a James D. Bonamassa, Esq. Defendant, Brian Sutherland, represented the seller.
Plaintiff understood the restaurant to have both an indoor and outdoor bar in the patio area. However, the outdoor “Tiki Bar” on the patio was not operating at the time of the negotiations. Plaintiff stated that in the spring of 2015, the seller told him that the outdoor bar was temporarily closed due to a property line dispute with the attorney’s office, located adjacent to the premises. According to plaintiff, this was confirmed by
defendant. Plaintiff believed that the outdoor bar could resume  operations once it was properly permitted (see NYSCEF Doc.# 32, Plaintiffs Affidavit in Opposition”

“On September 6, 2015 and September 9, 2015, complaints were filed by the community board regarding plaintiff’s use of the outdoor bar and patio area of the premises. On September 24, 2015, defendant submitted a letter to the Community Board, with an amended application, stating that plaintiff was withdrawing the portion of its application for a liquor license for the patio area. On October 8, 2015, the Community Board withdrew its objections to the liquor license application. On November 9, 2015, liquor license #1287661 was issued to the premises for the indoor areas.”

“As an initial matter, as plaintiff alleged “that the defendant made
misrepresentations of present facts that were collateral to the contract and served as an inducement to enter into the contract, a cause of action alleging fraudulent inducement is not duplicative of a breach of contract cause of action” (Did-it.com, LLC v. Halo Grp., Inc., 174 A.D.3d 682, 102 N.Y.S.3d 687 [2 Dept., 2019], citing Greenberg v. Meyreles,
155 A.D.3d 1001, 66 N.Y.S.3d 297 [2 Dept., 2017]). Here, accepting all the facts alleged in the complaint as true and according plaintiff the benefit of every favorable inference, plaintiff sufficiently plead a cause of action for fraudulent inducement.

The second amended complaint states that defendant represented that the premises had a liquor license for the patio area and that his prior affiliation would enable defendant to streamline the application process and get plaintiff a liquor license for the patio area. Plaintiff relied on this promise when purchasing and renovating the property. Defendants do not dispute that the premises never had a liquor license for the patio area. In fact, defendant alleges that plaintiff was aware of that fact, based on his testimony in the Richmond County action (see Memorandum of Law in Support at p 2), which was provided herein (see Notice of Motion, Exhibit 14).”

“Here, plaintiff’s fifth cause of action in the second amended complaint is not plead with specificity. Given the inconsistency in the prior pleadings and the arguments made herein, it is unclear what cause of action plaintiff attempts to state. To the extent that plaintiff’s fifth cause of action alleges legal malpractice or negligent  misrepresentation, it is insufficiently plead. It is undisputed that plaintiff retained defendants to procure liquor licenses for the premises. Although plaintiff specifically plead the existence of that
relationship in his third cause of action for breach of fiduciary duty, the fifth cause of action is silent as to the nature of the relationship between plaintiff and defendant. It neither states that a privity-like relationship or an attorney-client relationship existed. It further fails to allege that plaintiff would have been successful in getting a liquor license for the outside patio and would not have incurred financial damages, but for defendant’s negligence. However, to the extent that the fifth cause of action alleges general negligence, affording the complaint liberal construction, plaintiff sufficiently plead the
existence of a duty, breach, causation and damages. Accordingly, that branch of defendant’s motion to dismiss plaintiff’s fifth cause of action for “negligence” is denied. ”

Ramos v Goldberg, Scudieri & Lindenberg, P.C.  2020 NY Slip Op 30028(U) January 6, 2020 Supreme Court, New York County Docket Number: 160837/2016 Judge: Anthony Cannataro illustrates how courts review the materials and predict how the case would have come out “but for” the mistakes of the attorneys.  These but for examinations are very deep, and often result in the court undertaking very serious predictions of how other courts would have decided.

“Plaintiff, Raymond Ramos commenced this malpractice action against
defendants, his former attorneys and their law firm, who represented him in two separate cases pertaining to the cooperative apartment he formerly resided in. Defendants now move to dismiss the complaint pursuant to CPLR 3211, for failure to state a cause of action.

The underlying cases dealt with possessory rights to Apartment 4A of the cooperative building located at 4-6 West 105th Street in Manhattan. According to the cooperative’ s records, Patrick Millet was the shareholder of that apartment, but abandoned the apartment in the 1990s, and had since been subletting the premises to various individuals. In 2009 the cooperative commenced a holdover proceeding against the then occupants of the premises, which included plaintiff, to recover possession of the apartment. Plaintiff who had resided in the apartment since sometime in the 1990s, defended that the shares to the apartment were transferred to him in 1995. In 2011, while the holdover proceeding was ongoing, plaintiff commenced a Supreme Court action against the cooperative, seeking a declaration that he was the rightful shareholder of the apartment. ”

“Plaintiff has failed to plead a plausible cause of action for malpractice, as the allegations in the complaint are inherently incredible and/or flatly contradicted by documentary evidence. Contrary to plaintiff’s allegation, it was not obvious that the Court would determine that the action was time-barred. More importantly though, in its decision and order dated December 30, 2013, the Court specifically noted that even if
plaintiff’s claims had not been time-barred, there were numerous deficiencies in plaintiff’s evidence, and sufficient uncontested evidence, for the court to determine that there could not possibly have been a valid sale or transfer of cooperative shares to plaintiff.
Given the weight of the evidence considered by the Court, its decision also would not have changed had plaintiff called Anna Stern an additional witness. The Court found that there was overwhelming evidence such that even crediting plaintiff’s testimony at trial, he was never interviewed by the board, and could not possibly have acquired the shares. Ultimately, Supreme Court found that not only was plaintiff not a shareholder in the cooperative, his attempt to establish rights to the shares was the perpetration of a fraud:

The credible evidence adduced at this trial established that
the plaintiff, with the apparent assistance of his mother, not only disregarded that stated purpose [of the HDFC] but, in
fact, sought to, and did, personally profit from the HDFC by
improperly and deceitfully acquiring access to apartment 4A
and thereafter resided in the unit without paying
maintenance on any regular basis and, when he chose to
reside elsewhere, unlawfully sublet the apartment. He now
seeks to establish legal rights to the apartment with the aid
of the court in order to avoid eviction in the pending
housing court proceeding. The course of conduct exhibited
by the plaintiff will not be countenanced and, most certainly,
the court will not participate with the plaintiff to achieve
that end.

Lastly, as to plaintiff’s contention that his attorneys improperly linked the holdover proceeding to the Supreme Court action, even if a stipulation linking the two cases had not existed, the question of whether plaintiff was subject to eviction in the holdover proceeding necessarily depended upon whether plaintiff was found to be a
shareholder of the cooperative in the Supreme Court action.

As to plaintiff’s breach of fiduciary duty cause of action, that cause of action is duplicative of his legal malpractice cause of action. Therefore his complaint is dismissed in its entirety. ”

CPLR 203(d) is an ill-understood, mysterious saving statute that allows untimely counter-claims to be brought under certain circumstances.  It can be a saving statute for wildly out of statute counterclaims and acts as an offset to a claim.  The requirements are set forth in a recent opinion by Judge Schecter in Supreme Court, New York County. Capone v LDH Mgt. Holdings LLC 2020 NY Slip Op 30013(U) January 2, 2020 Supreme Court, New York County Docket Number: 651794/2015.

“Defendants’ contentions that their counterclaims are grounded in fraud or that plaintiffs deceptively caused them to wait until after 2014 to assert such claims ate baseless. To be sure, the limitations period for fiduciary duty claims involving fraud is six years plus two years from when a reasonable person knew or should have known about the fraud (Kaufman v Cohen, 307 AD2d 113, 119 [1st Dept 2003], see Aozora Bank, Ltd. v Credit Suisse Group, 144 AD3d 437, 438 [1st Dept 2016]). The fraud, however, must not be incidental to the breach of fiduciary duty (see Romanoff v Romanoff, 148 AD3d 614, 616 [1st Dept 2017]; Access Point Med., LLC v Mandell, 106 AD3d 40, 44 [1st Dept 2013] [“failure to disclose a conflict of interest does not transform a breach of fiduciary duty into a fraud”]). Additionally, a failure to disclose one’s own alleged wrongdoing does not toll the statute of limitations (Ross v Louise Wise Servs., Inc., 8 NY3d 478, 491 [2007] [“a plaintiff may not rely on the same act that forms the basis for the claim” to obtain a toll and there must be “some conduct on the part of the defendant after the initial wrongdoing; mere silence or failure to disclose the wrongdoing is insufficient”] [emphasis added]). Here, the alleged fraud is Scheinman’s “concealment of his disloyal dealings” (Dkt. 135 at 13; Dkt. 141 at 20). It is incidental to the alleged breach of fiduciary duty and there is no basis for any toll.

Nor can the counterclaims based on Scheinman’s alleged misconduct be used to set off defendants’ liability on his breach of contract claims. CPLR 203( d) provides that a counterclaim that “arose from the transactions, occurrences, or series of transactions or occurrences, upon which a claim asserted in the complaint depends (is) not barred to the extent of the demand in the complaint notwithstanding that it was barred at the time the claims asserted in the complaint were interposed.” The statute’s “arose from” language is interpreted strictly to exclude claims that merely “relate to” but do not actually “arise out of the same transactions or occurrences” (SCM Corp. v Fisher Park Lane Co., 40 NY2d 788, 792 [1976]; see Levy v Kendricks, 170 AD2d 387, 388 [1st Dept 1991]). Here, Scheinman’s conduct concerns the advice he allegedly improperly gave to Capone about the merits of the claims that Capone asserts in this action. While Scheinman’s alleged  malfeasance relates to Capone’s claims, it does not anse out of the transactions or occurrences giving rise to Capone’s claims – namely, the valuation used to compute his buy-out. The propriety of the advice does not turn on the validity of the valuation; it was advice, give after the fact, about how to challenge the valuation. Ergo, the advice merely
relates to the valuation. A set-off under CPLR 203( d), therefore, is impermissible (see Distribuidora De Discos Karen C. Por A. v Universal Music Group, Inc., 201 7 WL 1019697, at *6 [SDNY Mar. 15, 2017] [“While both claims implicate the 2006 Release Agreement, they will involve development of different facts and relate to different time periods and different actions by the parties. This is not a sufficient nexus to justify
application of section 203( d)”]). “

An attorney acts for the client.  More than three years passes from those acts, and the client wants to sue.  How does the statute of limitations apply, what acts by the attorney might extend the statute, and how does “fraud” play into the analysis?

Capone v LDH Mgt. Holdings LLC  2020 NY Slip Op 30013(U) January 2, 2020 Supreme Court, New York County Docket Number: 651794/2015
Judge: Jennifer G. Schecter  discusses these issues.

“Defendants’ contentions that their counterclaims are grounded in fraud or that plaintiffs deceptively caused them to wait until after 2014 to assert such claims ate baseless. To be sure, the limitations period for fiduciary duty claims involving fraud is six years plus two years from when a reasonable person knew or should have known about the fraud (Kaufman v Cohen, 307 AD2d 113, 119 [1st Dept 2003], see Aozora Bank, Ltd. v Credit Suisse Group, 144 AD3d 437, 438 [1st Dept 2016]). The fraud, however, must not be incidental to the breach of fiduciary duty (see Romano.ff v
Romanoff, 148 AD3d 614, 616 [1st Dept 2017]; Access Point Med., LLC v Mandell, 106 AD3d 40, 44 [1st Dept 2013] [“failure to disclose a conflict of interest does not transform a breach of fiduciary duty into a fraud”]). Additionally, a failure to disclose one’s own alleged wrongdoing does not toll the statute of limitations (Ross v Louise Wise Servs., Inc., 8 NY3d 478, 491 [2007] [“a plaintiff may not rely on the same act that forms the basis for the claim” to obtain a toll and there must be “some conduct on the part of the defendant after the initial wrongdoing; mere silence or failure to disclose the wrongdoing is insufficient”] [emphasis added]). Here, the alleged fraud is Scheinman’s “concealment of his disloyal dealings” (Dkt. 135 at 13; Dkt. 141 at 20). It is incidental to the alleged breach of fiduciary duty and there is no basis for any toll.”

Legal malpractice claims often consist of a specific claim of malpractice, a breach of fiduciary duty and a breach of contract.  In a setting (say, Connecticut and New York) where the acts occur in Connecticut and the attorney is sued in New York, the borrowing statute (CPLR 202) comes into play.  In Capone v LDH Mgt. Holdings LLC  2020 NY Slip Op 30013(U)
January 2, 2020 Supreme Court, New York County Docket Number: 651794/2015 Judge Jennifer G. Schecter explains:

“”When a nonresident sues on a cause of action accruing outside New York, CPLR 202 requires the cause of action to be timely under the limitation periods of both New York and the jurisdiction where the cause of action accrued” (Global Fin. Corp. v Triarc Corp., 93 NY2d 525, 528 [1999]). Defendants are Delaware LLCs with a principal place of business in Connecticut, which is where Scheinman worked for them and ommitted
the alleged malpractice (see Oxbow Calcining USA Inc. v Am. Indus. Partners, 96 AD3d 646, 651 [1st Dept 2012]). Though defendants’ counterclaims accrued in Connecticut, there is no need to address their timeliness under Connecticut law because they are clearly time-barred under New York law (see Veritas Capital Mgmt., L.L. C. v Campbell,
82 AD3d 529 [1st Dept 2011] [“breach of fiduciary duty claim is barred unless it is timely under the shorter of the New York or Connecticut statute of limitations”]). ”

“Defendants allege that Scheinman, while serving as their in-house counsel, provided legal advice to Capone that helped him strategically in asserting the claims that are the basis of this lawsuit. They state a claim for malpractice and breach of fiduciary duty–both of which have a three-year statute of limitations because defendants exclusively seek monetary damages (IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d 132, 139 [2009]; Matter of R.M Kliment & Frances Hals band, Architects, 3 NY3d
538, 541 [2004]). Defendants cannot recast the claim as one for breach of contract to avail themselves of the longer six-year limitations period (Johnson v Proskauer Rose LLP, 129 AD3d 59, 68 [1st Dept 2015], citing Kliment, 3 NY3d at 541-42; see Risk Control Assocs. -Ins. Group. v Lebowitz, 15.1 AD3d 527, 528 [1st Dept 2017]). It is. undisputed that Scheinman’ s conduct that gave rise to defendants’ counterclaims
. occurred in 2011, so by 2015, when this action was commenced, the counterclaims were time-barred.”

Sclafani v Kahn  2019 NY Slip Op 01115 [169 AD3d 846] February 13, 2019
Appellate Division, Second Department gives a good theoretical explanation of continuous representation and the underlying requirements of continuing trust and confidence as well as a shared understanding of the need for further work.

“An action to recover damages for legal malpractice must be commenced within three years of accrual, “regardless of whether the underlying theory is based in contract or tort” (CPLR 214 [6]; see McCoy v Feinman, 99 NY2d 295, 301 [2002]; Chase Scientific Research v NIA Group, 96 NY2d 20 [2001]; Quinn v McCabe, Collins, McGeough & Fowler, LLP, 138 AD3d at 1086; Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d at 735; Farage v Ehrenberg, 124 AD3d 159, 163 [2014]; Landow v Snow Becker Krauss, P.C., 111 AD3d at 796). “A cause of action to recover damages for legal malpractice accrues when the malpractice is committed, not when it is discovered” (Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d at 735; see McCoy v Feinman, 99 NY2d at 301; Quinn v McCabe, Collins, McGeough & Fowler, LLP, 138 AD3d at 1086; Farage v Ehrenberg, 124 AD3d at 164; Landow v Snow Becker Krauss, P.C., 111 AD3d at 796).

However, “[t]he continuous representation doctrine serves to toll the statute of limitations and render timely an otherwise time-barred cause of action for legal malpractice, but ‘only where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim’ ” (King Tower Realty Corp. v G & G Funding Corp., 163 AD3d 541, 543 [2018], quoting McCoy v Feinman, 99 NY2d at 306; see Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d at 735). For the doctrine to apply, “there must be clear indicia of ‘an ongoing, continuous, developing, and dependent relationship between the client and the attorney’ ” (Farage v Ehrenberg, 124 AD3d at 164, quoting Aseel v Jonathan E. Kroll & Assoc., PLLC, 106 AD3d 1037, 1038 [2013]; see Quinn v McCabe, Collins, McGeough & Fowler, LLP, 138 AD3d at 1086).”