Medley Mgt., IncLowenstein Sandler, LLP 2025 NY Slip Op 32436(U) July 6, 2025 Supreme Court, New York County Docket Number: Index No. 651987/2022 Judge: Joel M. Cohen is a thoughtfully written grant of summary judgment in a legal malpractice case. Here is the intro:

“At a high level, this case involves a financially troubled client that had to navigate the notoriously complex and contentious process of federal bankruptcy. The push and pull between negotiating with creditors and threatening to bypass them, all while under the glare of the bankruptcy court, involves countless difficult judgment calls. In this case, it was unsuccessful.
Having carefully reviewed the record, the Court finds that Plaintiff fails to raise a genuine issue of fact either that counsel’s judgments were negligent or that but for counsel’s actions this troubled company would have made it through bankruptcy intact. Instead, the summary judgment record reveals this case to be an attempt to shift the financial cost of the troubled company’s failed business from its owners to its lawyers. Indeed, much of Plaintiff’s purported evidentiary record consists of self-serving testimony of its principals (who only now, well after the fact and when it cannot actually impact them, profess willingness to have contributed additional funds to prop up the company during the bankruptcy) that is at odds with the contemporaneous documentary evidence.

Moreover, in opposing summary judgment Plaintiff has also dramatically veered from the
factual narrative of the complaint – in which it argued, among other things, that Defendants’
proposed bankruptcy plan “could not be confirmed” – to now argue that the plan would have
been confirmed if Defendants had advised and acted differently. A plaintiff “cannot defeat
[summary judgment] by contradicting the allegations of its own pleadings” (Syncora Guarantee
Inc v JP Morgan Sec, 110 AD3d 87, 94 [1st Dept 2013]).”

“Under CPLR 3212, summary judgment is appropriate when a party establishes with evidence “that there is no material issue of fact to be tried, and that judgment may be directed as a matter of law” (Brill v City of New York, 2 NY3d 648, 651 [2004]). If the moving party crosses that threshold, the party opposing the motion “must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which he rests his
claim or must demonstrate acceptable excuse for his failure to meet the requirement of tender in admissible form; mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient” (Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).
The elements of a legal malpractice claim are: (1) attorney negligence; (2) proximate causation; and (3) damages (Russo v Rozenholc, 130 AD3d 492, 497 [1st Dept 2015]). “An attorney moving for summary judgment dismissing a legal malpractice claim has the burden of establishing, through the submission of proof in evidentiary form, that the plaintiff is unable to prove at least one of the essential elements of the cause of action” (Ali v Fink, 67 AD3d 935, 936 [2d Dept 2009]).

Here, based on the summary judgment record, and giving Plaintiff the benefit of reasonable inferences in its favor, and despite very creative efforts by Plaintiff’s counsel to flood the zone with potential areas of dispute, Plaintiff’s claims fail on all three elements.

“A. Negligence
Attorney negligence is established by showing that an attorney “failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession” (Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 115 AD3d 228, 236 [1st Dept 2014], affd as mod, 26 NY3d 40 [2015]).
However, “an attorney is not held to the rule of infallibility and is not liable for an honest mistake of judgment where the proper course is open to reasonable doubt. Thus, ‘selection of one among several reasonable courses of action does not constitute malpractice’. Absent such ‘reasonable’ courses of conduct found as a matter of law, a determination that a course of conduct constitutes malpractice requires findings of fact. The general rule is that an attorney may be held liable for ignorance of the rules of practice, failure to comply with conditions precedent
to suit, or for his neglect to prosecute or defend an action” (Bernstein v Oppenheim & Co., P.C.,
160 AD2d 428, 430 [1st Dept 1990] [internal citations omitted]). In response, Plaintiff argues that this “professional judgment rule” does not apply because Defendants violated bright-line rules: section 1129(b)(2)(B) (absolute priority rule) of the US Bankruptcy Code, section 327(a) (representing an interest adverse to the estate), and the U.S. Supreme Court’s rule in Bank of Am. Natl. Trust & Sav. Assn. v 203 N. Lasalle St. Partnership (526 US 434, 437 [1999]) (new value cannot be exclusive to pre-petition equity).

These arguments turn on a dispute as to whether Defendants were instructed to pursue only a consensual reorganization under section 1129(a), instead of a cramdown under section 1129(b). Plaintiffs argue that they instructed Defendants to file a plan that could be crammed down under section 1129(b) and to file a plan with cash contributions to satisfy the new value exception to the absolute priority rule. However, Plaintiff has not cited any deposition testimony or contemporaneous communications identifying who, what, when, where, or how such a
definitive instruction to pursue a cramdown was given to Defendants, let alone from the Subcommittee. At most, the testimony MDLY cites reflects a view that the Plan was structured so it potentially could be confirmed over creditor objections if the Debtor later decided to shift to a cramdown approach (B. Taube Dep. At 53:9 – 54:14, 55:4-18, 208:22 – 209:6; S. Taube Dep. at 118:17 – 121:11, 114:15 – 118:4; Fredericks Dep. at 339:25 –340:25, 540:10-17, 723:16-21).”

In Matter of Blyer 2025 NY Slip Op 04005 Decided on July 2, 2025 Appellate Division, Second Department
Per Curiam., the attorney did a lot of things commented on by the Appellate Division and the Referee. Amongst them was the failure to advise the client of a potential malpractice claim.

“The amended petition contains seven charges of professional misconduct concerning the respondent’s conduct during his law firm’s representation of Kathy Chiriboga in a personal injury action. Charges one through seven are based on the facts below:

The respondent is a partner at the law firm Blyer & Kurland, P.C. (hereinafter the law firm). In February 2018, the law firm represented Chiriboga in connection with a slip-and-fall accident that occurred on February 10, 2017. The law firm was to commence an action on Chiriboga’s behalf. The statute of limitations for the cause of action expired on February 10, 2020, and the law firm failed to commence an action before the statute of limitations expired.

On or about February 18, 2020, the respondent filed a summons and complaint in Supreme Court, Queens County, titled Chiriboga v Chopenko (Index No. 702814/2020). In the complaint, the respondent asserted that Chiriboga’s accident had occurred on February 20, 2017, rather than February 10, 2017. The respondent also signed the name of another attorney, Andrew Staulcup, to the summons, complaint, and the attorney’s verification without Staulcup’s knowledge or consent. On or about June 13, 2020, the respondent served the complaint on the defendant. On or about January 27, 2021, the respondent executed a stipulation of discontinuance with prejudice in the action without Chiriboga’s consent. The respondent did not notify Chiriboga until on or about February 7, 2022, that her case had been discontinued with prejudice. As of March 31, 2022, the respondent had not informed Chiriboga that she may have a legal malpractice claim against the law firm.

Based on the foregoing, charge one, as amended, alleges that the respondent neglected a legal matter entrusted to him, in violation of rule 1.3(b) of the Rules of Professional Conduct (22 NYCRR 1200.0). Charge two alleges that the respondent failed to reasonably consult with his client about the means by which the client’s objectives were to be accomplished, in violation of rule 1.4(a)(2) of the Rules of Professional Conduct. Charge three alleges that the respondent engaged in conduct involving misrepresentation, in violation of rule 8.4(c) of the Rules of Professional Conduct. Charge four, as amended, and charge six allege that the respondent failed to promptly inform his client of material developments in the client’s legal matter, in violation of rule 1.4(a)(1)(iii) of the Rules of Professional Conduct. Specifically, charge four pertains to the respondent’s execution of the stipulation of discontinuance with prejudice without the client’s consent, and charge six pertains to the respondent’s failure to advise his client that she may have a legal malpractice claim against the law firm. Charge five alleges that the respondent failed to keep his client reasonably informed about the status of her legal matter, in violation of rule 1.4(a)(3) of the Rules of Professional Conduct. Charge seven alleges that the respondent engaged in conduct adversely reflecting on his fitness as a lawyer, in violation of rule 8.4(h) of the Rules of Professional Conduct.”

“In view of the evidence adduced at the hearing and the respondent’s admissions, we find that the Special Referee properly sustained all seven charges in the amended petition. Accordingly, the Grievance Committee’s motion to confirm the Special Referee’s report is granted. In determining an appropriate measure of discipline, we have considered the respondent’s prior [*4]
disciplinary history for similar misconduct, his lack of remorse, the injury to the client, and the mitigation provided by the respondent.”

Claude Mayo Constr. Co., Inc. v Barclay Damon LLP 2025 NY Slip Op 03897 Decided on June 27, 2025
Appellate Division, Fourth Department chooses to duck this question. Since JL 487 is a NY statute, and requires that deceit take place during a pending litigation, the question of whether litigation in Federal Court meets the criteria remains open. Here, after a settlement, Plaintiff fails to convince the Court and the Appellate Division that it was “effectively compelled” to settle because of counsel’s mistakes.

“” ‘[T]o recover damages for legal malpractice, a [client] must prove (1) that the [law firm] failed to exercise that degree of care, skill, and diligence commonly possessed by a member of the legal community, (2) proximate cause, (3) damages, and (4) that the [client] would have been successful in the underlying action had the [law firm] exercised due care’ ” (Chamberlain, D’Amanda, Oppenheimer & Greenfield, LLP v Wilson, 136 AD3d 1326, 1327 [4th Dept 2016], lv dismissed 28 NY3d 942 [2016]; see Harvey v Handelman, Witkowicz & Levitsky, LLP, 130 AD3d 1439, 1441 [4th Dept 2015]). The fact that an action results in a settlement “does not, per [*2]se, preclude a legal malpractice action” (Chamberlain, 136 AD3d at 1328). Where there is a settlement, however, “the focus becomes whether settlement of the action was effectively compelled by the mistakes of counsel” (Carbone v Brenizer, 148 AD3d 1806, 1806 [4th Dept 2017] [internal quotation marks omitted]).

We conclude that defendant’s evidentiary submissions on its motion conclusively established that plaintiff has no cause of action for legal malpractice (see generally Rovello, 40 NY2d at 636). Defendant submitted evidence of a favorable settlement in the underlying suit, and that evidence “flatly contradicts” plaintiff’s conclusory allegations to the effect that the settlement was compelled by the mistakes of counsel (Olszewski v Waters of Orchard Park, 303 AD2d 995, 995 [4th Dept 2003] [internal quotation marks omitted]; see generally Niagara County, 82 AD3d at 1599).

Finally, even assuming, arguendo, that Judiciary Law § 487 is applicable where, as here, the alleged misconduct takes place in connection with an action in federal court (cf. Delaney v HC2, Inc., 761 F Supp 3d 641, 664 [SD NY 2025]; SGM Holdings LLC v Andrews, 743 F Supp 3d 545, 584 [SD NY 2024]), we conclude that the complaint lacks the particularity required for a Judiciary Law § 487 cause of action inasmuch as it contains no facts to support plaintiff’s conclusory allegations that defendant willfully delayed the proceedings or engaged in a chronic pattern of deceptive conduct (see Pieroni v Phillips Lytle LLP, 140 AD3d 1707, 1710 [4th Dept 2016], lv denied 28 NY3d 901 [2016]; cf. Joseph v Fensterman, 204 AD3d 766, 767 [2d Dept 2022]).”

130 E. 18 Owners Corp. v Axelrod 2025 NY Slip Op 32210(U) June 23, 2025 Supreme Court, New York County Docket Number: Index No. 158632/2024 illustrates the common problem of what to do when the statute of limitations for legal malpractice is approaching yet the underlying case (where the malpractice took place) is not yet resolved. If plaintiff cannot demonstrate all the elements of legal malpractice, the case should be dismissed. However, if it is too early to demonstrate all the elements, then what is to be done?

“Plaintiff owns a multi-unit residential cooperative located at 130 E 18 Street, New York, New York 10003 (the building) (NYSCEF Doc No 9 ¶ 2). On February 10, 2020, a fire broke out in the apartment of building tenant/shareholder David Yanson, which caused damage to certain units and common areas in the building (id. ¶ 3).
Plaintiff retained defendant Peter A. Axelrod Esq., counsel for defendant Axelrod, Fingerhut & Dennis (the firm), “to represent it in connection with investigating and pursuing claims against Yanson relating to his negligence and misuse of his apartment, as well as negotiating with Yanson to sell his shares or otherwise move out of the Building” (the buy-out agreement) (id. ¶ 4). Plaintiff alleges that as it engaged in settlement negotiations with Yanson, it “repeatedly instructed Defendants that any Buy-Out Agreement needed to be approved by their
insurer, Strathmore Insurance Company/Greater New York Insurance Company (‘GNY’), to avoid voiding Plaintiff’s coverage for claims in an action filed by certain unit owners/tenants against Owners Corp. and others relating to the fire” (id. ¶ 5).
On February 27, 2021, several tenants of the building filed an action against plaintiff, the City of New York, Yanson, and several others to recover for personal injuries and property damage arising from the fire: Cassels et al v The City of New York, Index No 152026/2021 (the tenant action).
On April 13, 2021, Axelrod sent to GNY representative Julio Urribiera a draft of the buyout agreement which included the following language in paragraph 3: “Upon the closing of the purchase by Proprietary Lessor, Proprietary Lessor agrees to withdraw with prejudice the Notice of Default Under Proprietary Lease dated February 9, 2021 and each party agrees not to pursue any claim against the other party for any breach or claimed breach of the Proprietary Lease” (the proposed language) (id. ¶ 34).

Urribiera responded that the proposed language was too broad, and suggested that paragraph 3 be replaced with the following language: “Upon the closing of the purchase by Proprietary Lessor, Proprietary Lessor agrees to withdraw with prejudice the Notice of Default Under Proprietary Lease dated February 9, 2021 and Proprietary Lessor agrees to release Proprietary Lessee from any claim for an increase in insurance premium due to the claimed breach set forth in the Notice of Default. Proprietary Lessee agrees to release Proprietary
Lessor for any breach or claimed breach set forth in the Notice of Default” (the approved language) (id. ¶¶ 35-36 [emphasis added to indicate changes]). Urribiera followed up to clarify that GNY “would not agree to anything” that failed to “preserve[] all liability defenses and rights to indemnification, contribution, and apportionment of liability,” and “reserve the right to deny coverage if any agreement impacts our ability to enforce the[se] rights against the shareholder” (id. ¶ 37; NYSCEF Doc No 26).
Axelrod responded: “[I] cut out the revised paragraph 3 that I sent you earlier today and replaced it with the paragraph 3 that you forwarded to me in your e mail of 2:45 pm today” (i.e., the approved language) and attached the buy-out agreement (id. ¶ 39). He asked Urribiera to confirm that the “agreement as modified [is] now acceptable to GNY,” and Urribiera did so confirm (id. ¶¶ 40-41). However, no one noticed that the version of the agreement Axelrod attached—which was then signed by Yanson—still mistakenly contained the proposed language, and not the approved language (id. ¶¶ 43-45 [plaintiff alleges that it “reviewed the cover email
but was not asked to and did not review the attached draft”]).”

“Defendants argue that plaintiff cannot establish that they proximately caused plaintiff’s damages because Yanson would not have agreed to the approved language; Yanson has not appeared or invoked paragraph 3 in the tenant action; the contract does not bar plaintiff from making contribution or indemnification claims; and plaintiff’s failure to challenge GNY’s disclaimer of coverage broke the causal chain (NYSCEF Doc No 23). Defendants also argue that plaintiff’s alleged damages are speculative and not ripe because the tenant action (and the issue
of GNY’s coverage) has not been determined, and notes that plaintiff is a sophisticated client that
voluntarily agreed to the contract as Axelrod presented it (id.).
Plaintiff argues that it has sufficiently alleged proximate causation by alleging that, but for Axelrod’s drafting error and/or misrepresentation of the contents of the agreement, the approved language would have been included, Yanson would have signed the correct agreement, and GNY would not have denied coverage (NYSCEF Doc No 29). Plaintiff further argues that it has sufficiently alleged actual damages, as it has already incurred attorneys’ fees and expenses in its negotiations with GNY, and may suffer additional damages, depending on the outcome of the
tenant action (id.). It also asserts that even if it was comparatively negligent in failing to review the final draft of the buy-out agreement, this would not be dispositive as to defendants’ liability (id.).

On a motion to dismiss, the court “must accept the facts as alleged in the complaint as true, accord the plaintiff the benefit of every reasonable inference, and determine only whether the facts, as alleged fit within any cognizable legal theory” (Bangladesh Bank v Rizal Commercial Banking Corp., 226 AD3d 60, 85-86 [1st Dept 2024]). Under this lenient standard, plaintiff has sufficiently stated a claim for legal malpractice.1 Notably, defendants do not directly address plaintiff’s assertion that Axelrod’s error was negligently made; plaintiff explains its basis for reasoning that Yanson would have signed the agreement with the approved language (NYSCEF Doc No 29, p. 12); GNY specifically stated that it was disclaiming coverage because plaintiff “signed a release that did not contain our approved release language” (NYSCEF Doc No 9, ¶ 51); and plaintiff alleged that it has already incurred legal fees in negotiating this matter with GNY.

Plaintiff does, however, acknowledge that it is unable to ascertain all its damages at this time, as they “are derived substantially from [plaintiff’s] increased costs and potential liability in the Tenant Action,” and the outcome of that action “will determine whether [its] legal malpractice claim is worth pursuing” (NYSCEF Doc No 29). Plaintiffs therefore cross-move to stay this action pending the outcome of the tenant action. Defendants argue that “Plaintiff’s motion to stay the litigation—which Plaintiff themselves commenced—should be denied because
the underlying Shareholders’ Action is still in its early stages and a stay would unjustly prejudice Attorney Axelrod by forcing him to wait an indefinite period for resolution” (NYSCEF Doc No 31). Reasonable as these objections may be, as plaintiff notes, its only options were to bring the action when it did or allow the statute of limitations to expire (NYSCEF Doc No 25 [the statute of limitations was first set to expire in April 2024; defendants agreed to toll the statute of limitations to October 2024; in September 2024, plaintiff requested an extension, which defendants denied]). Since the extent of plaintiff’s damages—and its desire to further pursue this matter at all—depend on the outcome of the tenant action and GNY’s ultimate determination on coverage, the action must be stayed.

CONCLUSION
Based on the foregoing, it is
ORDERED that defendants’ motion to dismiss the complaint is denied; and it is further ORDERED that plaintiff’s cross-motion to stay this matter pending a final determination in Cassels et al v The City of New York, Index No 152026/2021, is granted”.

We get little direct description of the legal malpractice claim, but a guess from the decision is that Plaintiff argued that she did not get the settlement bargain that she expected, and that the attorney committed legal malpractice. The decision in Christian v Paul B. Weitz & Assoc., P.C. 2025 NY Slip Op 51001(U) Decided on June 23, 2025
Appellate Term, First Department is short.

“Order (Jessica I. Bourbon, J.), entered January 17, 2025, affirmed, with $10 costs.

Civil Court properly dismissed plaintiff’s action for legal malpractice based upon documentary evidence that conclusively established a defense to the action (see CPLR 3211 [a] [1]; Leon v Martinez, 84 NY2d 83 [1994]). Defendant submitted, among other things, email correspondence between the parties, the March 15, 2023 letter accompanying the check in settlement of plaintiff’s underlying personal injury action and plaintiff’s executed receipt of “client share” of the settlement of that underlying action. These documents flatly contradict the facts on which the claim of malpractice rests by showing that plaintiff expressly authorized defendant to settle her personal injury action for $35,000, inclusive of a one-third legal fee, with the reduced Medicare lien deducted from defendant’s fees (see Laruccia v Forchelli, Curto, Schwartz, Mineo, Carlino & Cohn, 295 AD2d 321 [2002], lv denied 98 NY2d 753 [2002]).”

In Caminero v Michael Flynn, Esq., PLLC 2025 NY Slip Op 03701 Decided on June 18, 2025 Appellate Division, Second Department it is pled that the attorney allowed the case to be dismissed, with prejudice for failure to prosecute an injury claim against the MTA by one of its police officers. Attorney defends by saying that Plaintiff could not have won the case anyway. The defense is unsuccessful, for now.

“The plaintiff commenced this action against the defendants, inter alia, to recover damages for legal malpractice. The plaintiff alleged that she had retained the defendants to represent her in an action that she commenced pursuant to the Federal Employers’ Liability Act (45 USC § 51 et seq.) (hereinafter the FELA action). The plaintiff had asserted the FELA action against the Metropolitan Transportation Authority (hereinafter the MTA) to recover damages for personal injuries she allegedly sustained on two different dates while she was working as a police officer employed by the MTA. The plaintiff further alleged that she would have prevailed in the FELA action, which was dismissed, with prejudice, for failure to prosecute, but for the defendants’ negligent failure to prosecute that action. Thereafter, the defendants moved for summary judgment dismissing the cause of action alleging legal malpractice. In an order entered June 22, 2023, the Supreme Court denied the defendants’ motion. The defendants appeal.”

“Contrary to the defendants’ contention, they failed to establish their prima facie entitlement to judgment as a matter of law dismissing the cause of action alleging legal malpractice based upon the doctrine of collateral estoppel. “The doctrine of collateral estoppel, a narrower species of res judicata, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same” (Ryan v New York Tel. Co., 62 NY2d 494, 500 [emphasis omitted]; see Matter of Maione v Zucker, 210 AD3d 776, 777). “‘This doctrine applies only if the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action, and the . . . party to be bound had a full and fair opportunity to litigate the issue in the earlier action'” (Matter of Maione v Zucker, 210 AD3d at 777 [alteration and internal quotation marks omitted], quoting City of New York v Welsbach Elec. Corp., 9 NY3d 124, 128).

Here, the defendants asserted that in light of the denial of an application by the plaintiff for accidental disability retirement benefits and the dismissal of the plaintiff’s proceeding pursuant to CPLR article 78 to review the denial of that application, the plaintiff was collaterally estopped from claiming that she suffered a work-related injury. Therefore, the defendants argued that the plaintiff could not establish that she would have prevailed in the FELA action but for the defendants’ alleged negligent failure to prosecute that action. Contrary to the defendants’ contention, however, the defendants failed to demonstrate an identity of issues between the FELA action and the determination of either the plaintiff’s application for accidental disability retirement benefits or the CPLR article 78 proceeding (see Weslowski v Zugibe, 167 AD3d 972, 975). Whereas the FELA action involved the issue of whether the MTA’s alleged negligence played any part in producing the injuries for which the plaintiff sought damages (see Rogers v Missouri Pacific R. Co., 352 US 500, 506; Grasso v Long Is. R.R., 306 AD2d 378, 379), that issue was not litigated and necessarily decided against the plaintiff either in the context of her application for accidental disability retirement benefits or in the CPLR article 78 proceeding (see Kenny v New York City Tr. Auth., 275 AD2d 639, 640). Thus, the defendants failed to establish their prima facie entitlement to judgment as a matter of law dismissing the cause of action alleging legal malpractice based upon the doctrine of collateral estoppel.

The defendants also failed to establish, prima facie, that the MTA neither created nor had actual or constructive notice of the alleged dangerous conditions at issue in the FELA action (see Lauzon v Stop & Shop Supermarket, 188 AD3d 856, 857; Ariza v Number One Star Mgt. Corp., 170 AD3d 639, 639). Thus, the defendants failed to demonstrate, prima facie, that the plaintiff would not have prevailed in the FELA action but for their alleged failure to prosecute that action (see Detoni v McMinkens, 147 AD3d 1018, 1020).”

It’s still an open question. In Prospect Corp. v Morgan Lewis & Bockius LLP 2025 NY Slip Op 03659
Decided on June 17, 2025 the Appellate Division, First Department shied away from determining whether there is a NY privilege regarding confidential mediation documents.

“In this legal malpractice action, plaintiff Prospect Capital Corporation (Prospect) alleges that defendants’ negligence in negotiating a debt subordination agreement on its behalf with nonparty Silicon Valley Bank (SVB) deprived it of a cause of action under a “turnover provision” and that defendants’ subsequent incorrect advice concerning Prospect’s rights created further harm. Prospect previously sued SVB in federal court and settled the action after participating in a confidential mediation proceeding before a magistrate judge. Defendants sought discovery of the settlement agreement and all statements submitted by Prospect to the magistrate judge who mediated the SVB Action, including all exhibits thereto. Prospect has produced the settlement agreement as well as all documents related to the federal action, other than its mediation statement.

While discovery under CPLR 3101(a) is broad, the court improvidently determined that defendants established a basis for compelling Prospect to produce the confidential mediation statement (see Matter of New York County Data Entry Worker Prod. Liability Litig., 222 AD2d 381, 382 [1st Dept 1995] [“settlement material that defendants . . . seek, in derogation of the confidentiality agreement that attended it, is not material and necessary to their defense of the action”]; compare Am Re-Ins. Co. v United States Fid. & Guar. Co., 19 AD3d 103, 104 [1st Dept 2005]). How Prospect planned to prove causation and damages on its separate claim in the underlying SVB action is not material and relevant to the issues here, which involve whether defendants’ alleged malpractice leading to the loss of a cause of action under the turnover provision of the subordination agreement caused Prospect damages (see Campagnola v Mulholland, Minion & Roe, 76 NY2d 38, 42 [1990]). Defendants’ hope that the mediation statement contains admissions by Prospect that may directly undermine its causation argument in this case, is too speculative a basis to compel discovery (see Data Entry, 222 AD2d at 382).

Nor have defendants shown that the mediation statement is relevant to their setoff defense as there appears to be no dispute that Prospect provided the settlement agreement, which reveals the existence of a settlement of the underlying action and the settlement amount (see e.g General Elec. Co. v APR Energy PLC, 2020 WL 2061423, 2020 US Dist LEXIS 75658 [SD NY 2020]). To the extent defendants contend that Prospect, against its own interests, resolved the underlying action for a lower settlement amount, this argument is speculative and does not justify compelling production of the confidential mediation [*2]statement (see Manley v New York City Hous. Auth., 190 AD2d 600, 600-601 [1st Dept 1993]).

In light of that determination, we have no basis to determine whether a qualified privilege should be recognized in New York for discovery of confidential mediation documents (see Hauzinger v Hauzinger, 10 NY3d 923, 924 [2008]).”

Alterman & Boop LLP v Emamian 2025 NY Slip Op 32118(U) June 13, 2025 Supreme Court, New York County Docket Number: Index No. 650345/2024 Judge: Nicholas W. Moyne presents an unusual but not unprecedented situation where withdrawing attorneys obtained a decision on their fees. In this employment discrimination case setting, attorney fees were due from the employer and the law firms now seek their share. Plaintiff attempts to allege legal malpractice and other equitable defenses.

“This action arises from the plaintiffs’ representation of Effat Emamian (“Emamian”) in her Federal District Court employment discrimination action against her former employer, Rockefeller University (the “Rockefeller action”). Plaintiffs were Emamian’s second set of counsel in the Rockefeller action, and they withdrew as counsel on April 21, 2016, prior to trial. The Rockefeller action eventually went to trial with successor counsel, Emamian was awarded $250,000 in back pay and $2,000,000 in pain and suffering, although the latter award was remitted by the Court to $200,000. Additionally, the District Court awarded Emamian attorneys’ fees, which were paid by
the defendant in the Rockefeller action. Plaintiffs in the instant action seek to obtain that portion of the attorneys’ fees awarded in the Rockefeller action which were allocated to them.

Emamian opposes the motion. Her counterclaims allege legal malpractice, breach of fiduciary duty, and breach of contract. Essentially, the defendant’s counterclaims and majority of her affirmative defenses revolve around her claims that the plaintiffs withdrew from representation in violation of the retainer agreement, would not deduct the expenses paid by Emamian from the attorneys’ fees they sought, and failed to turn over the entire case file to successor counsel.

In the Rockefeller action, the District Court granted, in part, Emamian’s post-trial motion for pre and post judgment interest, attorneys’ fees and costs to be paid by the defendant in that action. The total attorneys’ fee award was $960,570. Of this, $150,700 was attributable to the Alterman Firm, and $48,800 to Dowd. The decision also awarded costs, of which $49,969.83 were attributed to Alterman and Dowd, and $18,610 were attributed to Emamian herself. This decision took into consideration the fact that Alterman and Dowd withdrew from representation before trial took place, reducing the Alterman Firm’s hours by 60% and the Dowd Firm’s hours by 75%. In particular, District Court Judge Paul G. Gardephe adopted the recommendation of the Magistrate Judge, who opined that “with respect to the Dowd Firm, an even greater reduction of its hours than of the Alterman Firm’s hours is required, because Dowd “was not an employment law expert, but was brought in to be a part of the trial and offer his experience in trying cases. Because Dowd withdrew before the trial took place, he never performed the task he was brought in to do” (Exh. M, Memorandum Opinion & Order, p. 43, NYSCEF Doc. No. 24).”

‘The defendant did not assert her counterclaims until after the applicable statutes of limitations had run. The defendant’s counterclaims accrued when the plaintiffs withdrew as counsel in the Rockefeller action on or about April 21, 2016. The defendant did not file her answer containing the counterclaims until April 10, 2024, just
shy of eight years after her claims accrued. The longest statute of limitations which could possibly apply to Emamian’s counterclaims is the six-year statute of limitations for breach of contract (see CPLR § 213[1][six year statute of limitations for which no limitation is specifically prescribed by law], CPLR § 213[2] [six year statute of limitations for contractual obligation or liability], CPLR § 214[6] [three year statute of limitations for malpractice]). Accordingly, the counter claims were brought after the applicable statute of limitations had run. However, to the extent that any of the counterclaims are viable, they may be available to offset any recovery by the plaintiffs. “Under CPLR 203(d), claims and defenses that arise out of the same transaction as a claim asserted in the complaint are not barred by the statute of limitations, even though an independent action by the defendant might have been time-barred at the time the action was commenced. This provision allows a defendant to assert an otherwise untimely claim which arose out of the same transactions alleged in the complaint, but only as a shield
for recoupment purposes, and does not permit the defendant to obtain affirmative relief” (Balanoff v Doscher, 140 AD3d 995, 996 [2d Dept 2016]). “”

“Defendant contends that the plaintiffs committed legal malpractice by withdrawing from her representation despite a clause in the retainer agreement which stated that the law firms “will not withdraw from representing her under any circumstances, except non-payment of the fees described in paragraph 2” (Retainer Agreement ¶ 6, NYSCEF Doc. No. 32). “[A]s a general rule equity will not enforce specific performance of contracts for personal services” (Am. Broadcasting Companies, Inc. v Wolf, 76 AD2d 162, 174 [1st Dept 1980], affd, 52 NY2d 394 [1981]; see also Matter of Baby Boy C., 84 NY2d 91, 101 [1994] [“courts will rarely if ever grant specific
performance of a contract for personal services”]). Furthermore, as set forth in the Declaration of Daniel L. Altman supporting his withdrawal as counsel in Rockefeller action, which was made when the case was trial ready but had not yet been scheduled for trial, his medical conditions at the time made him unfit to conduct a trial. These
conditions included severe pain as a result of a recent surgery, the need for future surgery, limited mobility, and impacted mental faculties as a result of taking a narcotic for his pain (see Declaration of Daniel L. Altman, NYSCEF Doc. No. 18). In addition to Altman’s own assessment as to his fitness to conduct a trial, Altman also had a letter from his Orthopedic Surgeon indicating that Altman would not be able to attend to his court responsibilities (Exh, H, Gonzalez Della Valle, MD letter, NYSCEF Doc. No. 19) Pursuant to the rules of professional conduct, 22 NYCRR § 1200.0 Rule 1.16(b)(2), “a lawyer shall withdraw from the representation of a client when … the lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent the client” (emphasis added). The fact that, after having withdrawn in the Rockefeller action, Mr. Altman continued to represent, or be listed as an attorney on other cases that were at different, less taxing, stages litigation than trial does not mean that he was competent to try the Rockefeller action at that time. Accordingly, Altman’s withdrawal from representation was in accordance with the rules of professional conduct, and did not constitute malpractice.”

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