In Greenstreet of N.Y., Inc. v Davis  2018 NY Slip Op 07837 Decided on November 15, 2018
Appellate Division, First Department the distinction is meaningless.  This construction/building code case raises the question of privity and near privity.

“Whether characterized as professional malpractice or negligent misrepresentation, the central issue is whether plaintiff has sufficiently alleged a relationship of privity with Gibson and Seinuk, or the functional equivalent of privity, to impose a duty owed on them in relation to plaintiff (see North Star Contr. Corp. v MTA Capital Constr. Co., 120 AD3d 1066, 1069 [1st Dept 2014]; Bullmore v Ernst & Young Cayman Is., 45 AD3d 461, 464 [1st Dept 2007]).

Here, the court properly determined that the amended complaint, as amplified by the affidavit from plaintiff’s president (see Wall St. Assoc. v Brodsky, 257 AD2d 526, 526-527 [1st Dept 1999]), has adequately asserted such a relationship. Plaintiff alleges that it had direct communications with Gibson and Seinuk during the course of the project; that defendants were aware that the drawings submitted were incorrect insofar as Gibson failed to reference structural insulated panels (SIPs); that Seinuk negligently advised plaintiff to back the SIPs with plywood out of concern for wind shear and failed to advise plaintiff that doing so would violate the New York City Building Code; that Gibson and Seinuk knew that plaintiff would rely on their drawings and representations; and that plaintiff reasonably relied on these representations (see Ossining Union Free School Dist. v Anderson LaRocca Anderson, 73 NY2d 417, 425 [1989]).”

Equitable estoppel is (of course) an equitable defense to the statute of limitations.  It is successfully invoked in the legal malpractice field when the target attorney says, for example, “don’t worry about that pesky statute of limitations, we’ll keep talking about settlement for a while.”   What happens when plaintiff seeks to apply it to a situation in which the failure to start a case is intimately bound up with the malpractice.

Schrull v Weis  2018 NY Slip Op 07769  Decided on November 14, 2018  Appellate Division, Second Department, which we discussed yesterday for a different proposition, speaks about the relationship between equitable estoppel and legal malpractice.

“On July 23, 2008, the plaintiff allegedly was hired to perform carpentry work at a home. The plaintiff alleged that he sustained injuries to his left hand while using a defective table saw provided by the nonparty homeowner. In September 2008, the plaintiff allegedly consulted with the defendant Robert A. Weis, who practiced law at the defendant Law Firm of William G. Sayegh, P.C. (hereinafter the defendant law firm), concerning the plaintiff’s legal rights with respect to the accident. On September 16, 2008, the plaintiff executed a retainer agreement, retaining the defendant law firm “to prosecute and/or adjust a claim for serious personal injuries sustained by [the plaintiff] . . . arising from the negligence” of the manufacturer of the table saw, the homeowner, or anyone else responsible (hereinafter the personal injury claim).

On August 7, 2015, the plaintiff commenced this action against Weis, individually and as an associate of the defendant law firm, and the defendant law firm, asserting, inter alia, a cause of action alleging legal malpractice. The complaint alleged that after the plaintiff executed the retainer agreement, Weis informed the plaintiff that the defendants were going to commence a personal injury and products liability action against the owner of the table saw, the manufacturer of the table saw, and ” everyone that touched the table saw'” until it was sold to the homeowner; the [*2]personal injury claim was ” worth millions of dollars'”; and it “would take up to seven (7) years to resolve” the personal injury claim. The complaint further alleged that from approximately September 2008 to late 2008, the plaintiff contacted Weis approximately every two weeks to inquire about the status of the personal injury claim. Weis allegedly advised the plaintiff to ” put the case on the back burner as it was going to take a long time to resolve,'” and that Weis ” had the plaintiff’s contact information,'” and ” if he needed the plaintiff, he would contact him.'” The complaint also alleged that between approximately late 2008 and July 2014, the plaintiff called the defendants’ law office every six to eight months to check on the status of the personal injury claim and spoke to a secretary each time. The complaint alleged that on July 29, 2014, the plaintiff went to the defendants’ office and asked Weis “when his court date was” because “it was getting close” to the seven-year “anniversary of the accident.” Weis allegedly told the plaintiff that he had ” no case,'” and that Weis thought the plaintiff had ” disappeared.'”

“Here, the defendants satisfied their initial burden by demonstrating that the plaintiff’s legal malpractice cause of action accrued on July 23, 2011, when the statute of limitations on the personal injury claim expired, which was more than three years before the commencement of this action (see Shumsky v Eisenstein, 96 NY2d 164, 166; Baker v Levitin, 211 AD2d 507, 507). In opposition, however, the plaintiff raised a question of fact as to whether the continuous representation doctrine tolled the running of the statute of limitations until July 29, 2014, when Weis [*3]allegedly informed the plaintiff that he did not have a case. Upon entering into the retainer agreement, the plaintiff and the defendants reasonably intended that their professional relationship of trust and confidence, focused upon the personal injury claim, would continue. The complaint adequately alleged that the plaintiff was “left with the reasonable impression” that the defendants were, “in fact, actively addressing [his] legal needs” until that date (Shumsky v Eisenstein, 96 NY2d at 169; see Lytell v Lorusso, 74 AD3d 905, 907). The allegations in the complaint failed to reflect, as a matter of law, that the plaintiff knew or should have known that the defendants had withdrawn from representation on the personal injury claim more than three years before the legal malpractice action was commenced (cf. Shumsky v Eisenstein, 96 NY2d at 171; Muller v Sturman, 79 AD2d 482, 486). Accordingly, the Supreme Court should have denied that branch of the defendants’ motion which was to dismiss the legal malpractice cause of action as time-barred.

We agree with the Supreme Court’s determination to deny the plaintiff’s cross motion to permanently estop the defendants from raising the statute of limitations as a defense. The plaintiff’s argument that the doctrine of equitable estoppel should be invoked primarily relied upon allegations in the complaint regarding the defendants’ statements and conduct that formed the basis of the legal malpractice cause of action. In order for the doctrine of equitable estoppel to apply, “a plaintiff may not rely on the same act that forms the basis for the claim—the later fraudulent misrepresentation must be for the purpose of concealing the former tort” (Ross v Louise Wise Servs., Inc., 8 NY3d 478, 491; see Zumpano v Queen, 6 NY3d 666, 674; Benjamin v Allstate Ins. Co., 127 AD3d 1120, 1121; Brooklyn Historic Ry. Assn. v City of New York, 126 AD3d 837, 839). Further, even accepting the remaining allegations in the complaint as true, the plaintiff failed to adequately allege that the defendants engaged in an act of deception, fraud, or misrepresentation after the statute of limitations on the personal injury claim had expired (see Putter v North Shore Univ. Hosp., 7 NY3d 548, 552-553).”

Personal injury law firms face the economic facts of personal injury litigation, including the necessity of having a full shelf of cases to pursue.  PI litigation takes time and what often happens is that the squeaky wheel case keeps the lawyer from working the less prominent case.  Statutes of limitation keep on running along, however, and lots of legal malpractice litigation ensues.  Schrull v Weis  2018 NY Slip Op 07769  Decided on November 14, 2018  Appellate Division, Second Department discusses how the S/L for legal malpractice in a non-commenced personal injury case is calculated.

“On July 23, 2008, the plaintiff allegedly was hired to perform carpentry work at a home. The plaintiff alleged that he sustained injuries to his left hand while using a defective table saw provided by the nonparty homeowner. In September 2008, the plaintiff allegedly consulted with the defendant Robert A. Weis, who practiced law at the defendant Law Firm of William G. Sayegh, P.C. (hereinafter the defendant law firm), concerning the plaintiff’s legal rights with respect to the accident. On September 16, 2008, the plaintiff executed a retainer agreement, retaining the defendant law firm “to prosecute and/or adjust a claim for serious personal injuries sustained by [the plaintiff] . . . arising from the negligence” of the manufacturer of the table saw, the homeowner, or anyone else responsible (hereinafter the personal injury claim).

On August 7, 2015, the plaintiff commenced this action against Weis, individually and as an associate of the defendant law firm, and the defendant law firm, asserting, inter alia, a cause of action alleging legal malpractice. The complaint alleged that after the plaintiff executed the retainer agreement, Weis informed the plaintiff that the defendants were going to commence a personal injury and products liability action against the owner of the table saw, the manufacturer of the table saw, and ” everyone that touched the table saw'” until it was sold to the homeowner; the [*2]personal injury claim was ” worth millions of dollars'”; and it “would take up to seven (7) years to resolve” the personal injury claim. The complaint further alleged that from approximately September 2008 to late 2008, the plaintiff contacted Weis approximately every two weeks to inquire about the status of the personal injury claim. Weis allegedly advised the plaintiff to ” put the case on the back burner as it was going to take a long time to resolve,'” and that Weis ” had the plaintiff’s contact information,'” and ” if he needed the plaintiff, he would contact him.'” The complaint also alleged that between approximately late 2008 and July 2014, the plaintiff called the defendants’ law office every six to eight months to check on the status of the personal injury claim and spoke to a secretary each time. The complaint alleged that on July 29, 2014, the plaintiff went to the defendants’ office and asked Weis “when his court date was” because “it was getting close” to the seven-year “anniversary of the accident.” Weis allegedly told the plaintiff that he had ” no case,'” and that Weis thought the plaintiff had ” disappeared.'”

“Here, the defendants satisfied their initial burden by demonstrating that the plaintiff’s legal malpractice cause of action accrued on July 23, 2011, when the statute of limitations on the personal injury claim expired, which was more than three years before the commencement of this action (see Shumsky v Eisenstein, 96 NY2d 164, 166; Baker v Levitin, 211 AD2d 507, 507). In opposition, however, the plaintiff raised a question of fact as to whether the continuous representation doctrine tolled the running of the statute of limitations until July 29, 2014, when Weis [*3]allegedly informed the plaintiff that he did not have a case. Upon entering into the retainer agreement, the plaintiff and the defendants reasonably intended that their professional relationship of trust and confidence, focused upon the personal injury claim, would continue. The complaint adequately alleged that the plaintiff was “left with the reasonable impression” that the defendants were, “in fact, actively addressing [his] legal needs” until that date (Shumsky v Eisenstein, 96 NY2d at 169; see Lytell v Lorusso, 74 AD3d 905, 907). The allegations in the complaint failed to reflect, as a matter of law, that the plaintiff knew or should have known that the defendants had withdrawn from representation on the personal injury claim more than three years before the legal malpractice action was commenced (cf. Shumsky v Eisenstein, 96 NY2d at 171; Muller v Sturman, 79 AD2d 482, 486). Accordingly, the Supreme Court should have denied that branch of the defendants’ motion which was to dismiss the legal malpractice cause of action as time-barred.”

 

Weinberg v Kaminsky  2018 NY Slip Op 07652  Decided on November 13, 2018
Appellate Division, First Department is an example of the low-success attempt to recast a previously dismissed legal malpractice cause of action in another form.  Here, the Court simply wiped out the second attempt.

“Order, Supreme Court, New York County (Manuel Mendez, J.), entered February 22, 2017, which denied plaintiff’s motion for a stay of eviction, and order, same court and Justice, entered August 4, 2017, which, to the extent appealed from, granted defendants David Kaminsky, Danielle Kaminsky (together, the Kaminsky defendants), Jeffrey Asher, Robinson Brog Leinwand, Green, Genovese & Gluck P.C. (collectively, the Asher defendants), and Leslie Sultan’s motion to dismiss the complaint as against them, denied the Asher defendants’ motion for sanctions, and denied plaintiff’s cross motion to amend the complaint, and order, same court and Justice, entered January 25, 2018, which granted defendants Linda Salamon and 371 West 46th Street Properties, LLC’s (collectively, the Salamon defendants) motion to dismiss the complaint as against them and denied plaintiff’s cross motion to amend the complaint, unanimously affirmed, without costs.

The claims against Sultan and the Asher defendants are barred by the doctrine of res judicata (see Weinberg v Sultan, 142 AD3d 767 [1st Dept 2016] [affirming, inter alia, summary dismissal of legal malpractice claims]). Although the present claims against these defendants do not sound in malpractice, they arise out of the same transaction as the dismissed malpractice claims (see Matter of Josey v Goord, 9 NY3d 386, 389-390 (2007]). Further, they are duplicative of the dismissed malpractice claims, since they do not allege independent intentionally tortious conduct (see Atton v Bier, 12 AD3d 240, 242 [1st Dept 2004]).

The claims against the remaining defendants are not subject to dismissal under res judicata, because they were dismissed not on the proof but on the sufficiency of the pleadings (see Imprimis Invs. v Insight Venture Mgt., 300 AD2d 109, 110 [1st Dept 2002]). However, the instant complaint, while more verbose than the prior complaint, still fails to state a cause of action for “overreaching, undue influence and fraud” (see Weinberg v Sultan, 142 AD3d 767). Many of the allegations in the complaint and the proposed amended complaint are made upon information and belief, which is “not sufficient to establish the necessary quantum of proof to sustain allegations of fraud” (Facebook, Inc. v DLA Piper LLP [US], 134 AD3d 610, 615 [1st Dept 2015], lv denied 28 NY3d 903 [2016]).”

A slight exaggeration, but in 195 Hawthorne Partners, LLC. v Thompson  2018 NY Slip Op 32804(U)  October 30, 2018  Supreme Court, Kings County  Docket Number: 506136/18
Judge: Leon Ruchelsman there are pages and pages of discussion of a back-and-forth transfer, deeds, mortgages, foreclosures of what must be a valuable property.  The attorneys are third-partied and claims for malpractice and violation of Judiciary Law § 487 are dealt with:

“The next two causes of action concern malpract and a claim pursuant to Judiciary Law §487. Those causes action do not concern Atkins and Breskin LLC or Jerry Atkins at all and are consequently
dismissed. “

We’re proud to announce that our “It’s Over, Now What” can be found in today’s NYLJ.

From the article:

“The attorney-client relationship has a limited lifespan. Generally, it is a project-based temporary business relationship, albeit a fiduciary one.

Whether the representation is short or long, transactional or litigation based, it must someday end. It may end with settlement or a verdict in litigation, it may end at the completion of a transaction, or it may end in the middle.

It is sadly not the end of a relationship which usually results in tension, negotiation or litigation, it’s a question of attorney fees. Depending on the format of those fees, whether hourly, contingent, flat or hybrid, the question of fees either presages or creates the end of the attorney-client relationship. Even when the relationship ends because the work is truly finished, there may be a dispute over fees. Disputes over fees consistently occupy a large amount of attorney time and are governed by some well understood principals.

We will examine discharge of the attorney by the client first. Later we’ll look at attorneys who wish to end the relationship and must do so with permission of the court. Discharge of an attorney by a client is binary. It is either for cause or not for cause.”

 

 

Gur v Nadel & Clarlo, P.C.     2018 NY Slip Op 32779(U)  October 29, 2018  Supreme Court, New York County  Docket Number: 650275/2018 Judge: Arthur F. Engoron is an example of a legal malpractice case pled without regard to how one connects the complained of conduct with a bad economic outcome, or loss of a claim.  In the end, there is still an overbilling case, but no legal malpractice case.

“On May 1, 2015, Gur executed a retainer agreement (the “Retainer Agreement”) and paid a
$10,000 retainer fee thereby engaging Nadel & Ciarlo, P.C. (“N&C”) to commence legal action
against Gur’s condominium board (the “Underlying Litigation”). The individual defendants,
Lorraine Nadel (“Nadel”) and Michael Ciarlo (“Ciarlo”), are partners of defendant law firm
N&C. On May 22, 2015, N&C commenced the Underlying Litigation by filing a summons and
complaint in the Supreme Court, Queens County under the caption Abraham Gur v Vere
Condominium, Board of Managers of the Vere Condominium and NNC Property Management,
LLC d./b/a KW Property_ Management, Index Number 705348/2015. ”

“Sometime in December 2016, Gur fired N&C from representing him in the Underlying
Litigation. Since that time Gur has been representing himself in the Underlying Litigation as a
prose plaintiff. By December 2016, N&C’s legal fees to Gur totaled $51,332.67 after applying
the credits of $2,141.50 and $425. By December 2016 Gur had paid a total of$49,144.67 in
legal fees, even after applying the credits.
On February 6, 2018, Nadel emailed Gur offering, as a courtesy, a return of $7,500 in legal fees
and a waiver of Gur’s outstanding balance of $2, 188, provided the parties exchange releases and
sign an agreement. After continued email correspondence between Gur and Nadel, on February
8, 2016, Nadel agreed to accept Gur’s counter-offer, which was for a return of $8,750 in legal
fees and the waiver of Gur’s outstanding balance. However, Nadel failed to deliver the
contemplated release and agreement and therefore the return of $8,750 and waiver of the
outstanding balance of $2, 188 never came to fruition. As a result, Gur commenced the instant
action against defendants, asserting theories of breach of contract and legal malpractice. ”

“These allegations do not establish proximate cause as they do not establish how Gur was harmed
in the Underlying Litigation. In fact, the complaint is devoid of allegations specifying how the
Underlying Litigation was harmed as a result of defendants alleged negligence. Speculative
allegations such as that Gur has been able to get more done while representing himself pro se in
the Underlying Litigation than the defendants did when they were acting as his legal counsel are
conclusory and speculative. Fleisher v Ballon Stoll Bader & Nadler, PC, 2015 NYMisc LEXIS
3625, *7 (2015) (“Proximate causation is a requisite element of a legal malpractice claim and it
must be based on more than ‘mere speculation’.”). Likewise, the complaint’s allegation that
Hanan’s change in legal strategies “was confusing and did not make [Gur’s] case strong in the
eyes of the Defendants [in the Underlying Litigation]” is, without more, speculative and
conclusory.
Additionally, the complaint fails to plead any facts illustrating actual cognizable damages
suffered by Gur. The allegations pertaining to damages in the complaint are merely speculative
and conclusory, and therefore do not establish the requisite element of damages. “Conclusory
allegations of damages or injuries predicated on speculation cannot suffice for a malpractice
action, and dismissal is warranted where the allegations in the complaint are merely conclusory
and speculative.” Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 848 (2nd Dept 2012). Gur’s
allegation that he has been able to get more done on the Underlying Litigation representing
himself prose, as opposed to N&C’s representation, is speculative and conclusory. See
Pellegrino v File, 291 AD2d 60, 63-64 (1st Dept 2002). Actual damages cannot be inferred from
the pleadings because Gur has failed to allege specifically how his representation in the
Underlying Litigation was harmed outside of paying defendants for their legal work. However,
claims of excessive billing do not establish legal malpractice if the complaint does not allege that
the excessive billing affected Gur’s position in the Underlying Litigation. Chowaiki & Co. Fine Art Ltd. v Lacher, 115 AD3d 600, 601 (1st Dept 2014) (“Plaintiffs’ claims of excessive billing
and related conduct, which actions are not alleged to have adversely affected their [sic] claims or
defenses in the underlying action, do not state a claim for legal malpractice.”).
Accordingly, the second cause of action is subject to dismissal.”

Wang v Hon  2018 NY Slip Op 32686(U)  October 23, 2018  Supreme Court, Queens County
Docket Number: 12353/17 Judge: Allan B. Weiss is the story of a million law suits over two side-by-side houses in Queens where the litigation is never-ending.  Defendant has a judgment lien which has attached to the neighbor’s house, and Plaintiff has done everything in its power to shake off the judgment.  Nothing, including a claim of Judiciary Law § 487 has worked.  The JL claim failed because it did not arise in a litigation setting.

““ On April 1, 2003, Roug Kang Wang and Stella Wang (collectively the Wangs or the Wang plaintiffs), as purchasers, entered into a contract for the purchase of property known as 132-05 41 Road, Flushing, New York (the subject property) from Prince Development Co. LLC at a price
of $2,000,000. In 2005, the Wangs began the instant action in the New York State Supreme Court, County of Queens, for, inter alia the specific performance of the contract of sale (Wang v.Chien-Tsang Lin, Index No. 11000/05), and pursuant to an order dated April 10, 2013, the Wangs were
granted specific performance against Prince. The subject property was conveyed to the Wangs by a sheriff’s deed dated May 3, 2013. John Hon, Julie Hon, and John Hon, D.O., PC., (collectively the
Hons), who own real property known as 135-07 41 Road, Flushing, New  York, adjacent to the subject property, are judgment creditors who have a judgment lien on the subject property . The Hons obtained their judgment in the New York State Supreme Court, New York County, in an action captioned Hon v. Prince Development Company, LLC., Index No. 602236/04. The Hons filed their judgment in Queens County on January 30, 2009, and the filing of the judgment created a lien on real property owned by any judgment debtor in Queens County as of that date. Prince Development Co., LLC (Prince) still owned the subject property at the time of the filing of the lien in Queens County on January 30, 2009. Pursuant to a deed dated May 3, 2013, the sheriff conveyed the subject
property to the Wangs, the plaintiffs in the instant action, The Wang plaintiffs transferred the subject property to Wang Real Property LLC (Wang Property), the current owner, by deed dated June 17, 2013.

In or about December, 2014, the Wangs and Wang Property began a special proceeding in the New York State Supreme Court, County of Queens, against the Hons, among others, pursuant to CPLR 5239 for a judgment declaring that the Hons did not have a judgment lien against the subject property (Wang Real Property LLC v; Prince Development Company LLC, Index No. 18415/14) ( the adverse claims proceeding).. Pursuant to a decision and order dated July 8, 2015, the Honorable Diccia T.Pineda Kirwan found, inter alia, that “ upon conveyance of the subject property pursuant to the Sheriff’s deed, the Wangs took title to it subject to the Hon’s judgment lien.”

The court dismissed the petition brought by the Wangs. Neither the Wangs nor Wang Property appealed the order. In 2014, the Emigrant Bank began an action to foreclose on a mortgage on the subject property, and in or about June, 2015, 41 Road Properties LLC purchased the mortgage. The Wangs and Wang Property successfully offered money toward the payment of the debt, and they obtained and recorded a satisfaction of mortgage.
After the satisfaction of the mortgage, the Hons pressed the sale of the subject property to obtain the payment of their judgment lien, and the Sheriff noticed a sale for October 11, 2017. The Wangs and Wang Property made a motion in the New York County action for an “order of protection”  prohibiting the Sheriff’s sale, but by order dated October 6, 2017, the court denied the motion, relying on the decision and order rendered by Justice Pineda-Kirwan.”

“The plaintiffs brought the fourth cause of action pursuant to Judiciary Law § 487 which makes an attorney liable when he is “ guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party.” ( See, Jean v. Chinitz, 163 AD3d 497 [ 1 Dept.. 2018].) The Wangs allege that attorney Aronauer advised the Hons to form 41 Road to conceal the fact that the purchaser of the mortgage was not a judgment creditor and to “ circumvent the preclusive laws applicable to mortgagees,” However, Justice Dufficy rejected the arguments raised by the Wangs concerning the propriety of the assignment of the mortgage, and the doctrine of collateral estoppel precludes the Wangs from attempting to relitigate decided issues here. Because the allegations
concerning the propriety of the assignment have been found to be without, the Wangs’ cause of action based on Judiciary Law § 487 is not viable. (See, Stone v. Curran, 245 AD2d 285.) Moreover, insofar as the fourth cause of action also alleges that attorney Aronauer violated Judiciary Law §48 7 by waiting to execute on the Hons’ judgment until after the Wangs paid the mortgage, “ the alleged deceit forming the basis of such a cause of action, if it is not directed at a court, must occur during the course of a ‘pending judicial proceeding’.” (Costalas v. Amalfitano, 305 AD2d 202, 204 [ 1 Dept. 2003].) The complaint does not contain sufficient allegations in that regard.”

 

Perhaps the better question is how did the underwriter not see subsequent new stories that the coal mine was a fiction?

“According to the February 2016 complaint, plaintiff was co-lead underwriter of a public offering of stock by Puda Coal, Inc., whose principal asset was its 90% interest in Shanxi Coal. Defendant was retained as counsel for the underwriters to conduct due diligence, but allegedly failed to detect and inform plaintiff that Puda no longer possessed that 90% interest.

The malpractice claim was properly dismissed as time-barred (see CPLR 214[6]), and the doctrine of equitable estoppel “will not toll a limitations statute where plaintiffs possessed timely knowledge sufficient to have placed them under a duty to make inquiry and ascertain all the relevant facts prior to the expiration of the applicable statute of limitations” (Rite Aid Corp. v Grass, 48 AD3d 363, 364-365 [1st Dept 2008]). Here, the alleged malpractice occurred in December 2010 when defendant issued its opinion letter that “nothing has come to our attention that leads us to believe” that the registration statement “contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading.” Thereafter, a public report which broke the news of Puda’s fraud on April 8, 2011 confirmed that the fraudulent transfers of ownership of Shanxi Coal were documented in government filings. There was nothing preventing plaintiff from accusing defendant of substandard care in April 2011, based on defendant’s opinion letter, when compared to statements made in the public report and the securities litigation that followed in April 2011.”

“Plaintiff’s contention that it relied on defendant because it was a large, international law firm with alleged expertise in China-based companies, and because it trusted that defendant would comply with professional standards and its fiduciary duty to advise plaintiff if its work product was deficient, is misplaced. Plaintiff maintains that defendant’s withdrawal as counsel did not exempt it from such standards, as the decision to terminate the relationship constituted an act of concealment that “left [plaintiff] in the dark regarding the extent of [defendant’s] potential liability.” Even if plaintiff’s allegations of concealment were true, “plaintiff [has] failed to demonstrate [its] due diligence, for [it was] on inquiry notice by at least [2011] and failed to make a reasonable investigation” (MBI Intl. Holdings Inc. v Barclays Bank PLC, 151 AD3d 108, 117 [1st Dept 2017], lv denied 29 NY3d 919 [2017]).”

How often is it that a judge gives legal advice?  Rarely does the Court set forth what whould have been the correct cause of action and then advise that there is still time.  Ferousis v Santamarina
2018 NY Slip Op 32725(U)  Supreme Court, New York County  Docket Number: 154418/2018
Judge: Arlene P. Bluth  is interesting, as well as for the final paragraph.

“This legal malpractice action arises out oft~e sale of a building owned by plaintiff. In September 2006, plaintiff entered into an exclusive real estate listing for the sale of his property located at 180 Borinquen Place in Brooklyn with D.J. Real Estate, Inc. (“DJ”). In January 2007, another real estate broker, Itzhaki Properties (NY) Inc. (“Itzhaki”), got involved. Itzhaki and DJ agreed to split any commission from a sale of the property.
Plaintiff received an offer for the building in February 2007 for $4.2 million but plaintiff declined. In October 2007, plaintiff entered into a contract to sell the building for $4 million with the same buyer that made the offer in February 2007. However, by that time DJ was purportedly no longer the exclusive broker and Itzhaki received the entire broker’s commission. DJ then commenced an action in Queens against both plaintiff and ltzhaki to recover its share of the commission. After trial, DJ was awarded a judgment for $60,000 against both plaintiff and ltzhaki. With interest, the judgment totaled over $100,000 and plaintiff paid the full amount of the judgment.”

“Plaintiff asserts legal malpractice claims against his first attorney (defendant Ruhman) and the Moving Defendants. Plaintiff claims that the Moving Defendants, who took over the representation of both Itzhaki and plaintiff in the Queens case in 2010, should not have agreed to represent both parties. Plaintiff observes that there was an ind<;!mnification agreement between plaintiff and Itzhaki dated October 9, 2007 that required ltzhaki to hold plaintiff harmless if another broker made a claim for a commission. Plaintiff insists that this constituted a clear conflict of interest that should have compelled the Moving Defendants to decline to represent both Itzhaki and plaintiff. ”

“Plaintiff also contends that the Moving Defendants failed to employ a proper legal strategy because a third-party complaint was never filed against ltzhaki and other parties, including the buyer and plaintiffs real estate attorney for the sale. Plaintiff maintains it would not have paid a judgment ifthe Moving Defendants had not committed legal malpractice .”

“Here, the Court grants the Moving Defendant’s motion to dismiss because plaintiff failed to state a cause of action. Plaintiff cannot demonstrate that he suffered damages because of the Moving Defendant’s negligence. ”

“Both plaintiff and Itzhaki were found liable for not paying DJ the commission and the instant legal malpractice case does not argue that the Moving Defendants’ alleged negligence caused plaintiff to be held liable. Instead, plaintiff complains about who paid the damages awarded to DJ. But that does not state a cause of action for legal malpractice because plaintiff can still commence an action for indemnification against Itzhaki. “Indemnification claims generally do not accrue for the purpose of the Statute of Limitations until the party seeking indemnification has made payment to the injured person” (McDermott v City of New York, 50 NY2d 211, 216, 428 NYS2d 643 [1980]). Plaintiff still has time to bring an indemnification claim against Itzhaki (see CPLR 213[2] [six-year statute of limitations for indemnity claims]).”

“If plaintiff got a free ride in the Queens litigation by having ltzhaki pay the legal bills and joining in the defense — that the original listing expired — and plaintiff never waived his right to indemnification from Itzhaki, then where is the legal malpractice? Even if he did not get a free ride, the fact is that he can still pursue indemnification, as the statute oflimitations has not yet run on the indemnification claim. Clearly, ltzhaki did not step up to pay the judgment, so plaintiff would have had to pay DJ and then chase ltzhaki.
On NYSCEF, only defendants Santamarina and Santamarina & Associates were served and there is no affidavit of service for defendant Ruhman. As more than 120 days has passed and no motion to extend the time to serve has been made, the case is dismissed in its entirety. It is dismissed against the moving defendants with prejudice and against Ruhman without prejudice. “: