A real estate deal gone wrong…what could be more New York than that?  In our world, only a legal malpractice claim after the deal is more relevant.

83 Willow, LLC v Apollo 2019 NY Slip Op 31203(U)  May 2, 2019 Supreme Court, New York County Docket Number: 151266/2015 Judge: Barbara Jaffe is the story of a client, an attorney and a big problem.  The problem is a one-sided contract.  However, the court finds damages are speculative and dismisses.

“Plaintiff limited liability company was formed in New Jersey and has its principal place
of business there. Defendant’s principal place of business is in New York County.
In reliance on defendant’s asserted skill, knowledge, and experience as an attorney,
plaintiffs managing member retained him in connection with the development and sale of an
undeveloped parcel ofland it owned in a redevelopment area in New Jersey.”

“Defendant drafted, reviewed, and revised the contract of sale, which provided, inter alia,
for a sales price of $3.730 million for the property, a deposit of $50,000, and the contingency
that within six months, plaintiff obtain site-plan approval for the development of a structure of a
minimum size and/or nature, with a six-month extension. The contingency constituted a material
element of and material inducement for entering into the contract, and defendant recommended it
to plaintiff, who relied on his professional guidance and advice on the interpretation of the
prov1s10n.
Unbeknownst to plaintiff, the contingency provision permitted only the buyer to cancel
the contract in the event that the contingency remained unsatisfied and contained no date on
which the contract would be deemed cancelled if the closing did not occur. In effect, the buyer
was given a” de facto option contract, extending in perpetuity, with no remedy to cancel
available to [plaintiff] and at a cost of approximately 1 % of the agreed upon value of the Property.”

Defendant advised plaintiff that the contract allowed it to cancel upon expiration of the
contingency provision. Thus, when the contingency provision expired, and on defendant’s
advice, on or about March 15, 2013, defendant informed the buyer’s attorney that the contract
was terminated and cancelled. In response, the buyer’s attorney objected and advised that the
contract permitted only the buyer to cancel. ”

“Soon thereafter, the buyer filed an action against plaintiff in the New Jersey Superior
Court seeking specific performance of the contract of sale, and filed a notice of pendency against
the property, the value of which then exceeded $5.5 million. Plaintiff was unable to sell the
property for fair market value even though there were ready, able, and willing buyers for that
amount. It was thus forced to sell the property to the buyer for $3.540 million.
Had it not been for defendant’s malpractice, plaintiff would have been able to cancel the
contract and sell the property for not less than $5.5 million and would not have incurred 18
months of litigation which cost it more than $200,000 in legal fees. ”

“Here, plaintiff’s assertion that absent defendant’s negligence, it would have been able to
terminate the contract and sell the property is fatally conclusory, and defendant reasonably
observes that the buyer would not have agreed to such a provision, having paid a non-refundable
deposit and undertaken to obtain the funds needed for the transaction. Thus is revealed the
speculative nature of plaintiff’s case. Additionally, even if open to the idea, the buyer would
likely have sought to extract something in return from plaintiff, a possibility that plaintiff does
not address.
Thus, defendant satisfactorily shows, prima facie, that plaintiffs claim that but for his
failure to negotiate the inclusion in the contract of sale a clause affording it the right to terminate
in the event of a failure to obtain the requisite approvals, it would have been able to terminate the
contract and sell the property for a higher amount of money than that set forth in the contract is
too conclusory and speculative to prove that he was the proximate cause of plaintiff’s damages. “

In an artificial social policy sort of way, lawyers protect lawyers.  Although legal malpractice is a tort (maybe), there is still a requirement of privity.  Remembering back to law school and the progression in products liability from a strict requirement of privity for a recovery from the manufacturer to strict liability, we wonder if the legal world will ever accept that any attorney who participated in a specific litigation should be responsible for departures?

Well, Tatintsian v Pryor Cashman LLP  2018 NY Slip Op 33152(U)  December 10, 2018
Supreme Court, New York County  Docket Number: 152022/2017  Judge: David Benjamin Cohen describes the current state of affairs.

“In this action, plaintiff Gary Tatintsian (Plaintiff) alleges that defendants Pryor Cashman
LLP (Pryor Cashman), Eric Hellige (Hellige) and Eudora Partners LLC (Eudora, along with
Pryor Cashman and Hellige, collectively, Defendants) participated in a scam perpetrated by
Mikhail Vorotyntsev (MV) to “fleece” investors, including Plaintiff. The complaint asserts four
causes of action: fraudulent inducement, aiding and abetting fraud, legal malpractice and unjust
enrichment. By the instant motion (sequence number 001), Defendants move, pursuant to CPLR
3211 (a) (1) and (a) (7), for an order dismissing all causes of action with prejudice. For the
reasons set forth below, the relief sought in the motion is granted in part and denied in part. ”

“In order to plead a legal malpractice claim, the complaint must allege “the negligence of
the attorney” and that the negligence is the “proximate cause of the loss sustained” by plaintiff
(O’Callaghan v Brunelle, 84 AD3d 581, 582 [I51 Dept 201 l][internal citations and quotation
marks omitted]). Further, a legal malpractice claim cannot be stated if there is no attorney-client
relationship between the parties (Waggoner v Caruso, 68 AD3d 1, 3 [1 51 Dept2009], affd 14
NY3d 874 [2010]).
Plaintiff acknowledges that he is not a client of and is not in privity with Defendants, but
asserts that he may recover for losses arising from Defendants’ legal malpractice if the complaint
alleges “fraud, collusion, malicious acts or other special circumstances” (Plaintiffs opposition at
25, citing, inter alia, Estate of Schneider v Finmann, 15 NY3d 306, 308 [2010]). In such regard,
the complaint alleges that Defendants “engaged in fraud, collusion, or malicious or tortious acts
against Plaintiff,” and as a result, “Defendants are liable to Plaintiff for legal malpractice”
(Complaint, iii! 61-62).
However, Plaintiffs allegation of “collusion” in the complaint is conclusory because he
fails to identify any collusive acts between Defendants and MV, and has neither alleged nor specifically identified any “malicious acts” on the part of Defendants. In his opposition to the
motion, Plaintiff merely alleges that because “Defendants committed fraud against him to benefit
themselves … and implicitly … Defendants secretly colluded with [MV] to misappropriate
Plaintiffs investment for Defendants’ and [MV’s] own enrichment” (Defendants’ opposition at
26-27), The foregoing allegations sound more like an unjust enrichment claim rather than a legal
malpractice claim, because the conclusory allegation of “secret collusion” is not supported by any
fact. Also, his fraud against Defendant has been dismissed, for the reasons stated above.
Accordingly, the legal malpractice claim should be dismissed (Benzemann v Citibank,
NA., 149 AD3d 586, 586 [1st Dept 2017] [absence of privity, along with conclusory allegation of
fraud and collusion, required dismissal of the legal malpractice claim]). “

In legal settings, a recurrent theme is how some litigants move from a successful position to a losing position, often by overplaying their hands.  Here, wife obtained physical custody of the child, which seemed to be an important outcome for her, only to end up loosing custody and owing six-figure legal fees to the husband.  Was it the attorney’s fault?

Knox v Aronson, Mayefsky & Sloan, LLP  2018 NY Slip Op 09030 [168 AD3d 70]  December 27, 2018  Singh, J.  Appellate Division, First Department holds for the attorneys.

“While represented by AMS, plaintiff repeatedly expressed her desire to move for a protective order against the husband. AMS ultimately made the application for a protective order as a cross motion to the husband’s motion to set a visitation schedule on May 3, 2013. The motion and cross motion were resolved by a temporary stipulation, dated May 7, 2013 (the temporary stipulation), which gave plaintiff and the couple’s infant daughter, born on November 6, 2012, exclusive occupancy of the couple’s apartment in Manhattan and set a schedule for visitation with the husband.

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.”

“Plaintiff’s complaint should be dismissed in its entirety against AMS. We agree that Supreme Court properly dismissed the claim against FBK.

[1] 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.”

One hires an attorney to handle a case and expects that the attorney will handle the entire case at a level of good practice to which a competent attorney should adhere.  No?  Well not necessarily, as Attallah v Milbank, Tweed, Hadley & McCloy, LLP  2019 NY Slip Op 00583 [168 AD3d 1026]  January 30, 2019 Appellate Division, Second Department tell us.

“In 2011, the defendant agreed to assist the plaintiff on a pro bono basis, in a very limited fashion, regarding the plaintiff’s expulsion in 2010 from the New York College of Osteopathic Medicine. To that end, the parties executed a letter of engagement dated July 7, 2011. The letter of engagement provided, in relevant part, that: “Our services will include all activities necessary and appropriate in our judgment to investigate and consider options that may be available to urge administrative reconsideration of your dismissal from the New York College of Osteopathic Medicine (the ‘College’). This engagement does not, however, encompass any form of litigation or, to the extent ethically prohibited in this circumstance, the threat of litigation, to resolve this matter. This engagement will end upon your re-admittance to the College or upon a determination by the attorneys working on this matter that no non-litigation mechanisms are available to assist you. The scope of the engagement may not be expanded orally or by conduct; it may only be expanded by a writing signed by our Director of Public Service.”

Despite the defendant’s non-litigation efforts, the College refused to reconsider the plaintiff’s dismissal. Thereafter, the plaintiff commenced this action against the defendant to recover damages for breach of fiduciary duty, legal malpractice, and violations of Executive Law § 296, the New York City Administrative Code, and the New York Correction Law. The defendant moved pursuant to CPLR 3211 (a) (1) and (7) to dismiss the complaint. The Supreme Court granted the defendant’s motion, and the plaintiff appeals.”

“We agree with the Supreme Court’s determination granting the defendant’s motion to dismiss the amended complaint. Contrary to the plaintiff’s contention, according to the parties’ undisputed letter of engagement, the defendant did not promise to negotiate administrative reconsideration on the plaintiff’s behalf but, rather, that it would “investigate and consider options that may be available to urge administrative reconsideration of your dismissal from the New York College of Osteopathic Medicine.” The letter of engagement conclusively demonstrated that there was no promise to negotiate. There was only a promise to investigate and consider whether there were any options possibly available to urge the school to reconsider the plaintiff’s expulsion. Anything else, including the defendant’s failure to commence litigation against the school and the defendant’s alleged rendering of legal advice regarding the efficacy of the plaintiff’s commencing a defamation action against others, was outside the scope of the letter of engagement.

An attorney may not be held liable for failing to act outside the scope of a retainer (see AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428 [2007]). Therefore, since the defendant’s alleged failure to negotiate with the school, its alleged failure to commence litigation against the school, and its alleged failure to properly advise the plaintiff on the efficacy of a defamation action against nonschool parties fell outside the scope of the parties’ letter of engagement, dismissal of the cause of action alleging legal malpractice was warranted, pursuant to CPLR 3211 (a) (1), on documentary evidence grounds.”

It is rare that Courts leave legal malpractice counterclaims in a case which starts out as an attorney fee claim; it is more rare that a late amended claim is permitted.  However, in Davidoff Hutcher & Citron LLP v Parada  2019 NY Slip Op 31121(U) April 22, 2019  Supreme Court, New York County Docket Number: 152533/2016 Judge Paul A. Goetz permitted amendment to add a legal malpractice counterclaim.

“Plaintiff Davidoff Hutcher & Citron LLP commenced this action against its former client, defendant Maria Del Pilar Nava Parada, for unpaid legal fees arising from plaintiffs representation of Ms. Parada in a divorce proceeding. In her answer, Ms. Parada asserted a counterclaim for unjust enrichment based on plaintiffs alleged excessive billing practices. By order dated November 26, 2018, this court granted plaintiffs motion for summary judgment on its complaint for unpaid legal fees. Plaintiff now moves pursuant to CPLR 3212 for summary judgment dismissing Ms. Parada’s counterclaim for unjust enrichment. In a separate motion, defendant Ms. Parada moves pursuant to CPLR 3025 to amend her answer to assert additional counterclaims arising from plaintiffs alleged malpractice in representing defendant in a divorce proceeding. The motions are consolidated for purposes of this decision. ”

“With respect to the proposed counterclaim for legal malpractice, defendant Ms. Parada alleges that as a result of plaintiffs failure to complete certain tasks in the underlying divorce proceeding, Ms. Parada was forced to enter into an unfavorable settlement agreement with her ex-husband. Affirmation of Peter Hanschke dated February 26, 2019, Exh. C, if 22. Althoug plaintiff argues that Ms. Parada’s allegations are speculative and that she will not be able to show that plaintiffs actions caused Ms. Parada to enter into this agreement, it cannot be said at this stage that the proposed counterclaim is palpably insufficient or completely devoid of merit so as to warrant denial of her motion to amend. Cruz v. Brown, 129 A.D.3d 455, 456 (1st Dep’t 2015).

Further, Ms. Parada provided a reasonable excuse for her delay in asserting this claim as the underlying divorce proceeding finally settled in December 2018 and defendant moved promptly
thereafter to amend her counterclaims. Accordingly, it is ORDERED that the motion for summary judgment is granted and the counterclaim for unjust enrichment is dismissed; and it is further
ORDERED that the motion to amend to assert additional counterclaims is granted only to
the extent that defendant Ms. Parada may assert a counterclaim for legal malpractice as alleged
in the proposed amended answer and counterclaims attached to the motion papers, and is
otherwise denied; “

Continuous representation was once determined almost solely by the date of transfer of representation.  Either a consent to change attorney or a court order determined the last day of representation and hence the end of continuous representation.  Then came Aaron v. Roemer  which held that communications showing a total breakdown of the attorney-client relationship marked the end of continuous representation, even though the order came days later.  Those few days made a great difference.

Consolidated Edison Co. of N.Y., Inc. v Armienti,  Debellis & Whiten, LLP  2019 NY Slip Op 31123(U)  April 17, 2019  Supreme Court, New York County   Docket Number: 152730/2018
Judge: William Franc Perry reaches a similar conclusion, and, sub rosa holds that Con Ed would have lost for many other reasons as well.

“Under CPLR 214(6), a plaintiff must commence an action to recover damages for legal malpractice within three years from the date of the alleged malpractice. “The period of limitations in a legal malpractice action begins to run when the malprac~ice is committed … , not when the client discovers the injury/’ (Wells Fargo Home Mortgage, Inc. v Zeichner, Ellman & Krause, LLP, 5 AD3d 128, 128-29 [1st Dept 2004] [internal citation omitted]). “A legal malpractice Claim accrues ‘when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court'” (McCoy v. Feinman, 99 N.Y.2d 295, 301 [2002], quoting Ackerman v. Price Waterhouse, 84 NY2d 535, 541 [1994]). “[W]hat is important is when the malpractice was committed, not when the client discovered it” (Hahn v Dewey & .LeBoeuf Liquidation Tr., 143 AD3d 547, 547 [1st Dept 2016] [internal quotation marks and citations omitted]).

Here, the actions giving rise to Con Edison’s claims for legal malpractice occurred in 2005 and 2006. Accordingly, to survive dismissal, Con Edison must establish that the statute of limitations was tolled pursuant to the continuous representation doctrine until at least March 27, 2015, which date is three years prior to Con Edison’s commencement of this action. 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 933, 934 [2007], quoting McCoy v Feinman, 99 NY2d 295, 306 [2002]; see also Shumsky v Eisenstein, 96 NY2d 164, 167-168 [2001J). The purpose of the continuous representation doctrine is to avoid forcing a client to jeopardize the relationship with the attorney handling his or her case during the period that the attorney continues to represent them (Waggoner v Caruso, 68 AD3d 1, 7 [1st Dept 2009], af(d, 14 NY3d 874 [2010]). “An attorney-client relationship would certainly be jeopardized by a client’s allegation that his or her attorney committed   malpractice while representing the client” (id. [citation omitted]). The application of the continuous representation doctrine in an action for attorney malpractice “envisions a relationship between the parties that is marked with trust and confidence. It is a relationship which is not sporadic but developing and involves a continuity of the professional services from which the alleged malpractice stems” (Frenchman v Queller, Fisher, Dienst, Serrins, Washor & Kool, LLP, 24 Misc 3d 486, 498 [Sup Ct New York Cnty 2009], quoting Muller v Sturman, 79 AD2d 482, 486 [4th Dept 1981]; see Henry v Leeds & Morelli, 4 AD3d 229 [1st Dept 2004]). For the continuous representation doctrine to apply, “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” (Luk Lamellen U Kupplungbau GmbH v Lerner, 166 AD2d 505, 507 [2d Dept 1990]).

Here, Armienti argues that Con Edison’s claims accrued, at the !atest, on March 24, 2015, three years after Everest and Con Edison directed Armienti to transfer the Casas file to Heidell and notified Armienti that Heidell would be taking over the defense of Con Edison in the Casas Action. Armienti further argues that a breakdown in the relationship of trust and confidence between Con Edison and Armienti is demonstrated by the two letters from Con Edison’s in-house counsel to Armienti in December of 2014, which letters requested all documents regarding the alleged acts constituting legal malpractice in this action, and challenged the propriety of Armienti’s discontinuance of the third-party action against Nelson in 2005. In opposition, Con Edison argues that Armienti’ s representation of Con Edison for purposes of the continuous representation doctrine continued until the execution of their Consent to Change Attorneys on April 13, 2015 (Complaint,

In a given case, the Consent to Change Attorney may reflect the erid date of an attorneyclient relationship, in the absence of other evidence that establishes an earlier date (see Louzoun v. Kroll Moss & Kroll, LLP, 113 A.D~3d at 602, 979 N.Y.S.2d 94 [2d Dept 2014]). While, “from the standpoint of adverse parties, counsel’s authority as an attorney of record in a civil action continues unabated until the [attorney’s] withdrawal, substitution, or discharge is formalized” in accordance with CPLR 321, “[a ]n affirmative discharge of an attorney by the client is immediate” (Farage v Ehrenberg, 124 AD3d 159, 165 [2d Dept 2014] [citations omitted]). Thus, where evidence establishes that a client affirmatively discharged their attorneys prior to the
execution of a Consent to Change Attorney, the Consent to Change Attorney does not, in and of itself, serve as a basis to toll the statute of limitations (see Frenchman v Queller, Fisher, Dienst, Serrins, Washor & Kool, LLP, 24 Misc 3d 486, 504-05 [Sup Ct New York Cnty 2009] [holding notice of substitution, signed by defendant on December 17, 2004, did not, in and of itself, serve as a basis to toll the statute of limitations under the continuous representation doctrine, where plaintiffs own letter to defendant in August of 2004 made clear that defendant was being replaced by other counsel]).”

Building is being sued by NYC for a public nuisance.  While the case is being litigated, building owner rents the storefront to a club.  Operating a club seems to be part of the public nuisance. Did the landlord know that renting it out (again?) to a club was a no-no?  Was the economic incentive too large?  Was it the attorney’s fault that the lease did not include certain phrases?  Jadidian v Drucker   2019 NY Slip Op 03033  Decided on April 24, 2019  Appellate Division, Second Department doesn’t exactly come to a conclusion on this question.

“The plaintiffs, who own certain commercial property in Queens, retained the defendant, an attorney, from 2009 until November 2014 to handle, inter alia, all matters relating to leasing the premises. In addition, in 2013 the defendant represented the plaintiffs in connection with an action commenced by the City of New York to abate a public nuisance(hereinafter the nuisance action). In October 2013, while the nuisance action was pending against the plaintiffs, the defendant negotiated and drafted a lease of the premises to the Hive Sports Bar and Grill, Inc. (hereinafter the Hive). The defendant did not disclose to representatives of the Hive that the premises were the subject of the ongoing nuisance action.

In May 2014, the defendant negotiated a stipulation of settlement with the City on behalf of the plaintiffs, resolving the nuisance action. In the stipulation of settlement, the plaintiffs agreed, among other things, that the premises would not be used for any type of cabaret or club. In November 2014, the City obtained a court order enjoining the use of the premises for any reason and directing that the premises be closed until further order of the court. The Hive, which had been operating a cabaret/club on the premises, commenced an action against the plaintiffs to recover damages, inter alia, for breach of the lease agreement and fraud, alleging that the plaintiffs leased the premises to the Hive knowing of its intended operations. The Hive alleged that the plaintiffs intentionally withheld disclosure of the nuisance action, in which the City had sought to enjoin any use of the premises for a period of one year, and that the premises were shut down in relation to the settlement of the nuisance action, causing the Hive to sustain monetary damages.

The plaintiffs settled the action commenced by the Hive, and then commenced this action against the defendant to recover damages for his alleged legal malpractice in the negotiation and drafting of the lease agreement with the Hive. The defendant moved pursuant to CPLR 3211(a)(1) and (7) to dismiss the complaint. The Supreme Court denied the motion, and the [*2]defendant appeals.”

“Here, accepting the facts alleged in the complaint as true, and according the plaintiffs the benefit of every possible favorable inference, the complaint sufficiently alleges a cause of action to recover damages for legal malpractice. The complaint alleges that the defendant failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession by failing to account for the potential outcome of the nuisance action on the use and occupancy of the premises and to protect the plaintiffs’ interests in relation thereto. The complaint further alleges that the defendant’s negligence proximately caused the plaintiffs to sustain actual and ascertainable damages in lost rent and in settling the action brought by the Hive, and thus, validly states a cause of action to recover damages for legal malpractice (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 443; Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 847; Wolstencroft v Sassower, 124 AD2d 582). Accordingly, we agree with the Supreme Court’s denial of that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(7) to dismiss the complaint.”

In Mamoon v Dot Net Inc.   2019 NY Slip Op 31053(U)  April 5, 2019 Supreme Court, New York County Docket Number: 652902/2013,  Judge Lucy Billings describes the intersection of privity and near privity in an accounting malpractice setting.

“Since accountants owe no duty to the public at large, “privity,” a contractual relationship or similar connection with a mutuality of interest between plaintiff and the Khan defendants, is a necessary
predicate for the Khan defendants’ liability. Parrott v. Coopers & Lybrand. L.L.P., 95 N.Y.2d 479, 483-84 (2000) i State of Cal. Pub. Employees’ Retirement Sys. v. Shearman & Sterling, 95 N.Y.2d
427, 434 (2000); Ossining Union Free School Dist. v. Anderson LaRocca Anderson, 73 N.Y.2d 417, 419 (1989); Credit Alliance Corp. v. Arthur Andersen & Co., 65 N.Y.2d 536, 553-54 (1985).
Consistent with the flexible concept of privity in different contexts, a party without contractual privity still may sustain a claim for malpractice if she maintained a relationship with the professional that was the functional equivalent of contractual privity. Alphas v. Smith, 147 A.D.3d 557, 558 (1st Dep’t 2017); Good Old Days Tavern. Inc. v. Zwirn, 259 A.D.2d 300, 300 (1st
Dep’t 1999); Town Line Plaza Assocs. v. Contemporary Props., 223 A.D.2d 420, 420 (1st Dep’t 1996). See AG Capital Funding Partners. L.P. v. State St. Bank & Trust Co., 5 N.Y.3d 582, 595
(2005); Learning Annex. L.P. v. Blank Rome LLP, 106 A.D.3d 663, 663 (1st Dep’ t 2013) . ”

“Plaintiff demonstrates a direct professional relationship with a mutuality of interest, near contractual privity, with the Khan defendants. She testified, and they do not dispute, that
she was the president and sole shareholder of the Khan defendants’ client, Dot Net, so that their work for Dot Net directly affected her livelihood. She further testified, continually referring to her amended complaint, that this effect was injurious, as their work rendered her personally liable for
credit card, contractual, and tax debts accrued by Dot Net.  Rubin Aff. Ex. C, at 132, 149, Ex. H ~~ 17-19, 69; Alphas v. Smith, 147 A.D.3d at 558; Good Old Days Tavern. Inc. v. Zwirn, 259 A.D.2d at 300. Khan’s deposition testimony that, knowing plaintiff was the sole shareholder of Dot Net, he met and advised her on tax issues relating to the corporation on two separate occasions further demonstrates a direct professional relationship between plaintiff and the Khan defendants. Rubin Aff. Ex. A, at13-16. “