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PLAINTIFF ALLEGED DEFENDANTS-ATTORNEYS DID NOT ADVISE IT OF AN AMENDMENT TO THE COMMERCIAL LEASE WHICH EFFECTIVELY ELIMINATED THE OPTION FOR PLAINTIFF TO PURCHASE THE PROPERTY FOR $11.4 MILLION IF THE LANDLORD RECEIVES A BONA FIDE PURCHASE OFFER; THE LANDLORD IN FACT RECEIVED SUCH AN OFFER AND PLAINITFF EXERCISED ITS OPTION, BUT PAID $14.5 MILLION (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined defendants-attorneys’ motion for summary judgment in this legal malpractice action should not have been granted. Plaintiff alleged defendants-attorneys did not advise it of an amendment to the commercial lease. The lease included an option to purchase the property for $11.4 million. The amendment extinguished the option to purchase for $11.4 million upon purchase of the property. The landlord received a bona fide purchase offer and plaintiff exercised its option, but paid $14.5 million:

Defendants’ email attaching a marked-up copy of the relevant lease section does not establish as a matter of law that defendants advised plaintiff as to the meaning of the amendment, and the parties dispute the oral advice that was provided by defendants. … [T]he fact that plaintiff’s agent read the amendment does not establish as a matter of law that defendants were not negligent … . Any evidence that plaintiff’s agent, a sophisticated businessman, knew or should have known that the amendment was substantive despite defendants’ advice that it was “housekeeping” does not disprove defendants’ negligence but is evidence that can be offered in mitigation of damages … .

… The fact that plaintiff sent the signed lease to the landlord without defendants’ knowledge does not as a matter of law refute causation. Alrose Steinway, LLC v Jaspan Schlesinger, LLP, 2022 NY Slip Op 03310, First Dept 5-19-22

Purchase Point: Here the attorneys’ alleged failure to advise the plaintiff of the significance of an amendment to a commercial lease raised a question of fact in this legal malpractice action. The amendment eliminated plaintiff’s option to purchase the property for $11.4 million if the landlord received a bona fide purchase offer. The landlord received such an offer and plaintiff exercised its option to purchase, but paid $14.5 million.

 

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