Knox v Aronson, Mayefsky & Sloan, LLP  2018 NY Slip Op 09030 [168 AD3d 70]  December 27, 2018 Singh, J.  Appellate Division, First Department illustrates some important and bedrock doctrines found in legal malpractice:  the “but for” requirement, the “successor attorney” doctrine and the question of “duplication.”

“In July 2013, plaintiff sought to temporarily move from the Manhattan apartment to Connecticut for foot surgery. Despite defendant Robarge’s advice to the contrary, plaintiff, after apparently obtaining her husband’s consent, moved with the child to Greenwich, Connecticut.

On October 21, 2013, AMS filed an order to show cause to be relieved as counsel due to plaintiff’s lack of confidence in their advice. Before the order to show cause was heard, plaintiff voluntarily secured new counsel.{**168 AD3d at 73}

On May 2, 2014, while plaintiff was represented by FBK, the parties entered into a stipulation of settlement. On May 2, 2014, in open court, the parties were allocuted on the record. They stated that they understood and were satisfied with the settlement and with their attorneys’ representation.

The settlement provided for joint legal custody of the child, who would primarily reside with plaintiff. Plaintiff was required to move back to Manhattan “no later than September 1, 2014.” This obligation was deemed a “material term” of the settlement, and plaintiff agreed to pay any fees incurred in enforcing this term. The husband was required to pay FBK’s legal fees in the sum of $20,000 on plaintiff’s behalf. Plaintiff was otherwise “solely responsible for all legal and professional fees” incurred in connection with the matrimonial action.

The settlement also provided that plaintiff “withdraws her application for an Order of Protection with prejudice which she agree[d] shall be deemed dismissed on the merits after a full and fair hearing by the Court.” Since the first motion for an order of protection was resolved by the temporary stipulation, this was a second motion for a protective order, which plaintiff voluntarily withdrew as part of the settlement.

Plaintiff failed to return to Manhattan by the stated deadline under the settlement. As a result, the husband moved to compel her return, to transfer sole custody of the child to him, and for attorneys’ fees.

On September 5, 2014, Supreme Court ordered plaintiff to return “forthwith,” scheduled a custody hearing, and granted the husband’s application for attorneys’ fees subject to a showing of the amount owed. On July 15, 2015, Supreme Court directed that plaintiff pay the husband’s attorneys’ fees in the amount of $132,030.60. The court also found that a modification of the settlement was warranted and awarded the husband sole legal and primary residential custody of the child. The court cited plaintiff’s failure to timely return to Manhattan, which breached a material term of the settlement, and plaintiff’s continued exhibition of “gatekeeping” behavior toward the husband, including by making false accusations to the police. The court rejected plaintiff’s attempt to blame her failure to return to Manhattan on the husband’s failure to comply with his obligation to guarantee her lease, noting that plaintiff “made no serious effort to find a [*3]Qualified Residence” and her “obligation to move was not contingent on [the husband’s] guaranteeing a lease.”

“Turning first to plaintiff’s legal malpractice cause of action against AMS, she alleges that AMS was negligent in failing to move for attorneys’ fees, resulting in her failure to receive an undetermined award to pay her attorneys. This claim fails because plaintiff’s various successor counsel had ample time and opportunity to make such a motion, and in fact one did (although it was purportedly abandoned) (see Davis v Cohen & Gresser, LLP, 160 AD3d 484, 487 [1st Dept 2018]).{**168 AD3d at 75}

Even assuming AMS was negligent in failing to move for attorneys’ fees, by agreeing as part of the settlement^[FN2] to forgo any award of attorneys’ fees except for $20,000, plaintiff cannot show that but for AMS’s negligence she would not have sustained the loss (see generally Tydings v Greenfield, Stein & Senior, LLP, 43 AD3d 680, 682 [1st Dept 2007], affd 11 NY3d 195 [2008] [to establish proximate cause, the plaintiff must demonstrate that “but for” the attorney’s negligence, plaintiff would have prevailed in the matter in question; failure to demonstrate proximate cause mandates the dismissal of a legal malpractice action regardless of whether the attorney was negligent]; 180 Ludlow Dev. LLC v Olshan Frome Wolosky LLP, 165 AD3d 594, 595 [1st Dept 2018] [“While proximate cause is generally a question for the factfinder . . . it can, in appropriate circumstances, be determined as a matter of law”]).

Next, plaintiff claims that AMS was negligent in allegedly advising her that she was [*4]permitted to move to Connecticut, resulting in the loss of custody of the child. The damages plaintiff seeks are the attorneys’ fees incurred in connection with the husband’s motion to compel her return to New York and future legal fees she will have to expend to recover custody. Again, this claim fails because plaintiff’s alleged damages were not proximately caused by any advice given by AMS, but rather by her own subsequent failure to comply with the terms of the settlement.

[2] Turning to the breach of fiduciary duty claim, plaintiff seeks damages for pain and mental suffering, the $132,000 plaintiff was required to pay the husband for his attorneys’ fees, the attorneys’ fees needed to recover custody of the child, and punitive damages. This claim and ensuing damages sought for the breach are duplicative of the malpractice cause of action (see Alphas v Smith, 147 AD3d 557, 558-559 [1st Dept 2017] [where the court found that the relief sought in the fiduciary duty claim was identical to the legal malpractice claim as it sought similar damages]).

Even if the two causes of action are not duplicative, Supreme Court properly dismissed the breach of fiduciary cause of action. In the attorney liability context, the breach of fiduciary duty claim is governed by the same standard as a legal malpractice{**168 AD3d at 76} claim (see Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 271-272 [1st Dept 2004]). Accordingly, to recover damages against an attorney arising out of the breach of the attorney’s fiduciary duty, plaintiff must establish the “but for” element of malpractice (see Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 11 [1st Dept 2008]).”

It’s rare to see a Judiciary Law § 487 Claim; even rarer to see one that survives motion practice.  Gerard Fox Law, P.C. v Vortex Group, LLC  2019 NY Slip Op 32065(U)  July 9, 2019
Supreme Court, New York County  Docket Number: 654794/2018  Judge: Andrew Borrok is a case which makes the successful leap.

“This is an action for breach of fiduciary duty, fraud, negligent misrepresentation, and professional negligence brought by Gerard Fox Law, P.C. (Gerard Fox) against its former real
estate broker, the Vortex Group, LLC (Vortex). Vortex asserts counterclaims for fraud and
violation of Judiciary Law§ 487. Gerard Fox moves pursuant to CPLR §§ 3016 and 3211 (a) (7)
to dismiss Vortex’s counterclaims in their entirety. For the reasons set forth below, the motion is granted. ” [But read below]

“Second Counterclaim: Judiciary Law § 487 
To state a cause of action for violation of Judiciary Law § 487, a party must plead intentional
deceit and damages proximately caused by the deceit (Judiciary Law§ 487; Jean v Chinitz, 163
AD3d 497, 497 [1st Dept 2018]). To be actionable, the alleged deceit must have occurred during a pending judicial proceeding (US Suite LLC v Baratta, Baratta &Aidala LLP, 171AD3d551,  551 [1st Dept 2019]). Allegations of deceit or an intent to deceive must be stated with particularity (CPLR § 3016 [b]; Facebookv DLA Piper LLP (US), 134 AD3d 610, 615 [1st Dept
2015]). Where a cause of action under Judiciary Law§ 487 is based on allegations of false
statements in pleadings, a party may prevail by establishing that “the lawsuit could not have gone forward in the absence of the material misrepresentation, [and] that party’s legal expenses … may be treated as the proximate result of the misrepresentation” (Amaltifano v Rosenberg, 12 NY3d 8, 15 [2009]).

This counterclaim is based on Gerard Fox’s statements made in its complaint and in its
opposition to Kato’s motion for summary judgment in a related action (Answer, iJ 196). Vortex
asserts that Gerard Fox knowingly made several false statements concerning the underlying
events in this matter as contrived predicates for its claims with the intent to deceive the Court.
For example, Paragraph 2 of the Complaint provides:

Specifically, in the Fall of 2015, [Gerard Fox] sought to lease space with room for
five to six offices and a conference room, within its monthly budget of $28,000-
$30,000. [Gerard Fox] spelled out its needs and budget in writing, and reinforced
those points during lengthy face-to-face meetings. Vortex, however, had a
difference agenda. Viewing [Gerard Fox] as an out-of-town “yokel” it could work
for a fat commission, Vortex upsold [Gerard Fox] from the get-go. Vortex
exclusively presented options far outside of [Gerard Fox’s] price range, including
a space in “Tower 49,” located at 12 East 49th Street, New York, New York. To
encourage [Gerard Fox] to rent office space beyond its budget, Vortex represented
falsely that the rent was below-market and a great deal.

The documentary evidence reveals that these statements, which reflect the gravamen of Gerard Fox’s allegations, are not only misleading, but also demonstrably false. Vortex’s space report, which sets forth the properties that Vortex presented to Gerard Fox, illustrates that 10 of the 12 properties were within Gerard Fox’s stated budget (NYSCEF Doc. Nos. 28, 29). Therefore, this  lawsuit is premised on material misrepresentations of fact and, as a proximate result of those misrepresentations, Vortex was compelled to defend the action and incur legal fees. Assuming Vortex’s allegations to be true and affording Vortex every favorable inference, the counterclaim for violation of§ 487 is adequately pled to survive dismissal. “

Graves v Stanclift, Ludemann, McMorris & Silvestri, P.C.  2019 NY Slip Op 05608  Decided on July 11, 2019 Appellate Division, Third Department is the story of a legal malpractice claim which alleges that the attorneys simply did no work in opposition to summary judgment and that the documents and facts existed which would have successfully opposed the motion.

“The underlying action in this case was commenced by Goodnow Flow Association Inc. (hereinafter Goodnow) against the present plaintiff, then represented by defendants, for his failure to pay homeowners’ association fees arising from his ownership of a lakefront property in Essex County. In the underlying action, Supreme Court (Buchanan, J.) granted Goodnow’s motion for summary judgment against plaintiff and dismissed plaintiff’s counterclaim, and this Court affirmed (Goodnow Flow Assn. Inc. v Graves, 135 AD3d 1228, 1231 [2016]). Plaintiff then commenced this action alleging that defendants committed legal malpractice by, among other things, failing to conduct pretrial discovery, failing to present evidence that would have prevented the opposing party’s success on summary judgment and failing to advance plaintiff’s counterclaim seeking damages in Supreme Court or upon appeal. Defendants moved to dismiss the complaint under CPLR 3211 (a) (7) for failure to state a cause of action. Supreme Court (Bruening, J.) partially granted this motion by dismissing two causes of action, but denied the motion as to the two claims of legal malpractice. Defendants appeal.”

“Plaintiff alleged that in the prior case, over the months of December 2013 through April 2014, defendants repeatedly ignored his calls and emails, did not engage in any discovery, canceled depositions and forgot to reschedule the canceled depositions, which subsequently never occurred. Plaintiff alleged that he received one phone call from defendants in April 2014 and no further work was performed on his case until July 2014, when defendants attempted to get an extension to respond to Goodnow’s motion for summary judgment and assorted discovery motions. Further, plaintiff alleged that the only work that defendants performed to oppose Goodnow’s motions occurred on the day immediately preceding the hearing. Plaintiff also alleged that defendants never addressed his counterclaim at the trial level or upon appeal to this Court (see Goodnow Flow Assn. Inc. v Graves, 135 AD3d at 1229 n 1). Lastly, plaintiff alleged that he provided documents to defendants that, if presented to Supreme Court, would have prevented Goodnow’s success on its motion for summary judgment. Plaintiff claims that these failures resulted in the denial of damages for his counterclaim, a loss of enjoyment in using his property, significant legal fees and his ultimate loss on summary judgment, among other things. These allegations are further supported by plaintiff’s affidavit and the attached documents (see Leon v Martinez, 84 NY2d 83, 88 [1994]; Rovello v Orofino Realty Co., 40 NY2d 633, 635-636 [1976]). Accepting these allegations as true, plaintiff adequately stated a cause of action for legal malpractice (see New York State Workers’ Compensation Bd. v Any-Time Home Care Inc., 156 AD3d at 1046; New York State Workers’ Compensation Bd. v Program Risk Mgt., Inc., 150 AD3d at 1593; NYAHSA Servs., Inc., Self-Ins. Trust v Recco Home Care Servs., Inc., 141 AD3d at 794).”

The statute of limitations is approaching yet plaintiff has not suffered ascertainable damages.  Potential damages loom, but nothing has actually happened yet.  What to do if your attorney has made a mistake (perhaps a big mistake) yet actual ascertainable damages may yet be speculative?

The short answer is to commence the action and fight over how to proceed.  A stand-still agreement might be reached, a tolling agreement (slightly different) might be reached, or a motion to dismiss must be navigated as in YT Madison, LLC v Sukenik, Segal & Graff, P.C.  2019 NY Slip Op 32112(U)  July 19, 2019  Supreme Court, New York County  Docket Number: 156293/2018 Judge: O. Peter Sherwood.

“In the complaint, plaintiff asserts three causes of action for legal malpractice. breach of
fiduciary duty and unjust enrichment. Each cause of action is based on Plaintiffs allegation
that Defendants negligently permitted the inclusion of a clause in the distribution of ‘Net
Proceeds” section of the Amended Operating Agreement that incorrectly increases from $32
million to $46 billion the amount of an agreed-upon cap on total distribution of Net Proceeds to NP Member. Under the original Operating Agreement. distributions of Net Proceeds in excess of $32 million that would otherwise be payable to NP Member are payable to plaintiff. In paragraph 68 of the complaint, Plaintiff alleges that defendants’ negligence in the drafting of the Amended Operating Agreement used over $14 million in damages. Plaintiff also demands that Defendants reimburse it for all of the legal tees it has paid in connection with the transaction as additional compensation for the damages mused by the allegedly negligent draftsmanship. ”

“Jn an action to recover for legal malpractice. Plaintiff must plead and prove that the attorney
failed  to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that “the attorney’s breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages.” Gallet. Dreyer and Berkey. LLI’ v Basile_ 141 AD 3d 405. 406 (1st Dept 20 I 6) (internal citation omitted). In this case it is undisputed that whether or not Plaintiff will sustain any damages as a result of the alleged malpractice is unknown able at this time. Although damages in a legal malpractice case may include “litigation expenses incurred in an attempt to avoid, minimize or reduce the damage caused by the attorney’s wrongful conduct.”” Rudolph v Shayne Dachs Stanisci, Corker & Sauer, 8 NY 3d 438, 443 (2007) (internal citation omitted), such potential damage cannot save plaintiff’s claim here because the damages that allegedly were proximately caused by the alleged malpractice are unknown.

The motion must be granted because the malpractice claim is premature (see Pudalov v
Brogan. !03 Misc 2d 887. 992, 427 NYS 2d 345, 348 [Sup. Ct.. Nassau Cty 1980] [dismissing
malpractice counterclaim as premature where underlying personal injury action had not yet been reached for trial): and Hallman v Kantor, 22 Misc 3d l 122[A]. 880 NYS 2d 224 [Sup Ct Nassau Cty 2009] holding that as there had been no determination issued by the Surrogate imposing liability against plaintiff no injury could be shown]).

The first cause of action shall be dismissed without prejudice to renew should the Project
yield Net Proceeds in excess of $32 million payable to NP member. “

Hinnant v Carrington Mtge. Servs., LLC  2019 NY Slip Op 03575 [172 AD3d 827]  May 8, 2019
Appellate Division, Second Department is an example of overeaching by plaintiff, seeking to bring in the opponent’s attorney.  There is no privity with the opponent’s attorney absent some very small exceptions.  Privity is a requirement for a good legal malpractice case.

“Absent fraud, collusion, malicious acts, or other special circumstances, an attorney is not liable to third parties not in privity, or near-privity, for harm caused by professional negligence (see AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 NY3d 582, 595 [2005]; Fredriksen v Fredriksen, 30 AD3d 370, 372 [2006]; Rovello v Klein, 304 AD2d 638 [2003]; Conti v Polizzotto, 243 AD2d 672 [1997]). Here, even accepting the facts alleged in the complaint as true, the complaint fails to allege the existence of an attorney-client relationship, privity, or a relationship that otherwise closely resembles privity between the plaintiffs and Leavitt (see DeMartino v Golden, 150 AD3d 1200, 1201 [2017]; Fredriksen v Fredriksen, 30 AD3d at 371-372; Goldfarb v Schwartz, 26 AD3d 462, 463 [2006]; Rovello v Klein, 304 AD2d at 638-639). Furthermore, the complaint does not contain specific allegations that would place the plaintiffs within an exception to the privity requirement (see AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 NY3d at 595; Fredriksen v Fredriksen, 30 AD3d at 372). The complaint fails to set forth evidentiary facts demonstrating that Leavitt was a participant with Carrington in a common scheme or plan to defraud the plaintiffs, or otherwise aided and abetted Carrington in the commission of fraud (see Fredriksen v Fredriksen, 30 AD3d at 372; Goldfarb v Schwartz, 26 AD3d at 463-464).

Furthermore, the documentary evidence submitted by Leavitt in support his motion utterly refuted the plaintiffs’ factual allegations, and conclusively established a defense as a matter of law (see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d at 326). Specifically, Leavitt submitted an acknowledgment dated March 14, 2015, signed by the plaintiffs in connection with the consolidated mortgage transaction, which stated: “The undersigned further acknowledge that Jeffrey H. Leavitt, Esq., P.C. represents the Lender in this transaction, that the parties have not been given nor are relying on any legal advice given by Jeffrey Leavitt, Esq. and that no attorney/client relationship exists between the Borrowers and Jeffrey H. Leavitt, Esq., P.C.” Additionally, Leavitt submitted, among other things, the consolidated note and consolidated mortgage, which both stated that the monthly payment of principal and interest, in the amount of $3,364.70, would be just part of a larger monthly payment required by the security instrument, which would include taxes, insurance, and other charges.”

Architects, similar to attorneys, can be liable for general torts as well as breach of contract.  For the most part, it’s one or the other.  In Junger v John V. Dinan Assoc., Inc.  2018 NY Slip Op 06232 [164 AD3d 1428]  September 26, 2018  Appellate Division, Second Department we see how the claims are evaluated.

” The plaintiffs commenced this action alleging breach of contract, breach of duty,  rofessional negligence, and fraud against the architects who prepared plans in connection with the  construction of the plaintiff Mark Junger’s personal residence located in Monsey. The defendants John V. Dinan Associates, Inc. (hereinafter Dinan), and Stephen C. Leventis Architect (hereinafter [*2]Leventis; hereinafter together the Dinan defendants), moved, and the defendants Jada Construction & Development, Inc., and Jada Construction, Inc. hereinafter together the Jada defendants), separately moved, inter alia, for summary judgment dismissing the complaint insofar as asserted against them.

A party moving for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, offering sufficient evidence to demonstrate the absence of any triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). Failure to make that initial showing requires denial of the motion, regardless of the sufficiency of the opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 [1985]; St. Luke’s-Roosevelt Hosp. v American Tr. Ins. Co., 274 AD2d 511 [2000]; Greenberg v Manlon Realty, 43 AD2d 968 [1974]).

We disagree with the Supreme Court’s determination granting that branch of the Dinan defendants’ motion which was for summary judgment dismissing the cause of action alleging professional negligence insofar as asserted against them. The Dinan defendants failed to demonstrate their prima facie entitlement to judgment as a matter of law because they did not submit evidence that the architectural plans and designs were proper, conformed to applicable professional standards, and did not deviate from the design as intended (see Kung v Zheng, 73 AD3d 862, 863 [2010]). The Dinan defendants also failed to offer evidence demonstrating that their plans and designs were not used to construct the residence. Since the Dinan defendants failed to meet their prima facie burden, we need not consider the sufficiency of the plaintiffs’ papers in opposition to this branch of their motion (see Winegrad v New York Univ. Med. Ctr., 64 NY2d at 853).

However, we agree with the Supreme Court’s determination granting those branches of the Dinan defendants’ motion which were for summary judgment dismissing the causes of action alleging breach of duty and fraud insofar as asserted against them. The cause of action alleging breach of duty was duplicative of the cause of action alleging professional negligence. Moreover, the plaintiffs’ allegations supporting the cause of action to recover damages for fraud lacked the requisite specificity (see Orchid Constr. Corp. v Gonzalez, 89 AD3d 705, 707-708 [2011]; Morales v AMS Mtge. Servs., Inc., 69 AD3d 691, 692 [2010]). “Generally, a cause of action alleging breach of contract may not be converted to one for fraud merely with an allegation that the contracting party did not intend to meet its contractual obligations” (Refreshment Mgt. Servs., Corp. v Complete Off. Supply Warehouse Corp., 89 AD3d 913, 914 [2011]; see New York Univ. v Continental Ins. Co., 87 NY2d 308, 318 [1995]).”