Legal Malpractice – New York Appellate Digest

Attorneys, Civil Procedure, Legal Malpractice

PLAINTIFFS RAISED QUESTIONS OF FACT WHETHER THE CONTINUOUS REPRESENTATION DOCTRINE APPLIED TO RENDER THE LEGAL MALPRACTICE CAUSES OF ACTION TIMELY (SECOND DEPT).

The Second Department, reversing Supreme Court, determined there were questions of fact whether the continuous representation doctrine applied to render legal malpractice causes of action timely:

The statute of limitations for a cause of action alleging legal malpractice is three years (see CPLR 214[6]). “However, causes of action alleging legal malpractice which would otherwise be barred by the statute of limitations are timely if the doctrine of continuous representation applies” … . “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” … . “[A] person [is not] expected to jeopardize his [or her] pending case or his [or her] relationship with the attorney handling that case during the period that the attorney continues to represent the person. Since it is impossible to envision a situation where commencing a malpractice suit would not affect the professional relationship, the rule of continuous representation tolls the running of the Statute of Limitations on the malpractice claim until the ongoing representation is completed” … . Dellwood Dev., Ltd. v Coffinas Law Firm, PLLC, 2024 NY Slip Op 06184, Second Dept 12-11-24

Practice Point: Here there were questions of fact whether the continuous representation doctrine applied to render the legal malpractice causes of action timely.

December 11, 2024

Civil Procedure, Legal Malpractice, Negligence

IN THIS LEGAL MALPRACTICE ACTION, THE PLAINTIFF NEED NOT SHOW SHE ACTUALLY SUSTAINED DAMAGES TO SURVIVE A MOTION TO DISMISS (SECOND DEPT).

The Second Department, reversing Supreme Court’s dismissal of a legal malpractice complaint, noted that the plaintiff need not show she actually sustained damages to survive a dismissal motion:

The plaintiffs alleged … that they retained the defendants to represent them in an action to recover damages for personal injuries the plaintiff … allegedly sustained in a motor vehicle accident (hereinafter the underlying action) and that due to the defendants’ failures to pursue a theory based on a violation of Vehicle and Traffic Law § 509(3), the plaintiffs were not able to obtain a verdict in their favor in the underlying action. * * *

To state a cause of action to recover damages for legal malpractice, “a plaintiff must allege that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the attorney’s breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages” … . “To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages but for the attorney’s negligence” … . “A plaintiff is not obligated to show, on a motion to dismiss, that it actually sustained damages … . “Whether the complaint will later survive a motion for summary judgment, or whether the plaintiff will ultimately be able to prove its claims, of course, plays no part in the determination of a prediscovery CPLR 3211 motion to dismiss” … . Kowalski v Gold Benes, LLP, 2024 NY Slip Op 05967, Second Dept 11-27-24

Practice Point: In this legal malpractice case, the court noted the plaintiff need not show she actually sustained damages to survive a motion to dismiss.

November 27, 2024

Attorneys, Contract Law, Insurance Law, Labor Law-Construction Law, Legal Malpractice

A RETROCESSIONAL INSURER WHICH PAID OUT A SETTLEMENT ON BEHALF OF THE INSURED IN THE UNDERLYING LABOR LAW 240(1) LADDER-FALL CASE, IS ENTITLED TO BRING A LEGAL MALPRACTICE ACTION AGAINST THE LAWYERS FOR THE INSURED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Kapnick, determined a retrocessional insurer (the reinsurer of a reinsurer) can maintain a legal malpractice claim against lawyers representing the insured in an underlying Labor Law 240(1) (ladder-fall) personal injury action. Plaintiff retrocessional insurer, having paid out on a settlement on behalf of the insured has standing to assert a claim for legal malpractice under a theory of equitable subrogation. (The opinion is too complex to fairly summarize here):

In New York, “[w]e recognize at once the fairness of the proposition that an insurer who has been compelled by his contract to pay to or in behalf of the insured claims for damages ought to be reimbursed by the party whose fault has caused such damages and the principle of subrogation ought to be liberally applied for the protection of those who are its natural beneficiaries” … . “As an equitable doctrine in the context of insurance, an insurance carrier, upon payment of a loss becomes subrogated to the rights and remedies of its assured to proceed against a party primarily liable without the necessity of any formal assignment or stipulation” … . Under the same equitable principles, “an insurer which has been compelled under its policy to pay a loss, ought in fairness to be reimbursed by the party which caused the loss” … . * * *

Where a reinsurer, or retrocessionaire, has paid a claim on behalf of an insured, equitable principles demand that the reinsurer be entitled to equitable subrogation on behalf of the insured. Having pleaded that it was contractually obligated to, and did, pay the majority of the [property owner/general contractor’s] settlement amount in the underlying personal injury action, and that it brings the instant action for legal malpractice as subrogee [of the property owner/general contractor], plaintiff can proceed with this action under the theory of equitable subrogation. Century Prop. & Cas. Ins. Corp. v McManus & Richter, 2024 NY Slip Op 00799, First Dept 2-15-24

Practice Point: Here the retrocessional insurer paid out a settlement on behalf of the insured in an underlying personal injury action. The retrocessional insurer was entitled to bring a legal malpractice action against the lawyers for the insured.

February 15, 2024

Attorneys, Evidence, Fiduciary Duty, Legal Malpractice

EMOTIONAL AND PSYCHOLOGICAL DAMAGES, AS OPPOSED TO PECUNIARY DAMAGES, WILL NOT SUPPORT AN ACTION FOR BREACH OF FIDUCIARY DUTY (FIRST DEPT).

The First Department, reversing Supreme Court, determined emotional and psychological damages, as opposed to pecuniary damages, will not support an action for breach of fiduciary duty:

… [P]laintiffs proffered no evidence showing that Atesa [plaintiff] sustained pecuniary damages, and adduced proof identifying only emotional and psychological injuries. Contrary to plaintiffs’ contention, the allegations in the complaint that Atesa incurred financial expenses as a result of having to seek medical treatment and retain new counsel due to defendants’ alleged misconduct are insufficient to defeat summary judgment, absent any supporting evidentiary proof (see CPLR 3212[b] …). Plaintiffs’ contention that they could present such proof at trial is unavailing … . Because plaintiffs failed to raise a triable issue of fact as to whether recoverable damages were incurred, summary judgment dismissing the claim should have been granted … . Pacelli v Peter L. Cedeno & Assoc., PC, 2023 NY Slip Op 05448, First Dept 10-26-23

Practice Point: Emotional and psychological damages, as opposed to pecuniary damages, will not support an action for breach of fiduciary duty.

October 26, 2023

Attorneys, Fraud, Legal Malpractice

PLAINTIFF IN THIS LEGAL MALPRACTICE ACTION WAS NOT REPRESENTED BY DEFENDANT ATTORNEY; PLAINTIFF ALLEGED HE WAS REQUIRED TO DEFEND A FAKE CUSTODY PETITION “FILED” BY DEFENDANT ATTORNEY; PLAINTIFF STATED CAUSES OF ACTION FOR LEGAL MALPRACTICE AND A VIOLATION OF JUDICIARY LAW 487 DESPITE THE ABSENCE OF PRIVITY (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the legal malpractice action brought by a party who was not represented by the defendants should not have been dismissed. Plaintiff alleged the defendant attorney “filed” a fake custody petition for which plaintiff incurred $28,000 in attorney’s fees to defend against:

“While the complaint does not allege an attorney-client relationship between the plaintiff[ ] and the defendants, it sets forth a claim which falls within ‘the narrow exception of fraud, collusion, malicious acts or other special circumstances’ under which a cause of action alleging attorney malpractice may be asserted absent a showing of privity” … .

The Supreme Court further erred in granting that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the cause of action alleging violation of Judiciary Law § 487. As relevant here, Judiciary Law § 487 imposes civil liability on any attorney who “[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive . . . any party.” Here, accepting the plaintiff’s allegations as true and giving the plaintiff the benefit of every possible favorable inference, the amended complaint adequately states a cause of action to recover damages for violation of Judiciary Law § 487 … . Garanin v Hiatt. 2023 NY Slip Op 04459, Second Dept 8-30-23

Practice Point: There are, as here, circumstances where a party who was not represented by the attorney can bring legal malpractice and “violation of Judiciary Law 487” actions against the attorney. Plaintiff alleged he was forced to defend against a fake custody petition “filed” by defendant attorney.

August 30, 2023

Attorneys, Civil Procedure, Evidence, Insurance Law, Legal Malpractice, Negligence

IN THIS LEGAL MALPRACTICE ACTION, THE EVIDENCE SUBMITTED BY DEFENDANT ATTORNEYS IN SUPPORT OF THE MOTION TO DISMISS WAS NOT “DOCUMENTARY EVIDENCE;” THE PROOF REQUIREMENTS FOR A MOTION TO DISMISS ARE DIFFERENT FROM THE PROOF REQUIREMENTS FOR SUMMARY JUDGMENT; THE MOTION TO DISMSS SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the motion to dismiss in this legal malpractice case should not have been granted because the evidence offered in support of the motion (a letter from the insurer denying coverage and the insurance policy) was not “documentary evidence.” In addition, the Second Department noted that any deficiencies in the complaint were remedied by plaintiff’s affidavit submitted in opposition to the motion to dismiss. The complaint alleged defendant attorneys failed to timely file an action seeking recovery for personal injuries from a disability-insurance carrier:

“‘Whether the complaint will later survive a motion for summary judgment, or whether the plaintiff will ultimately be able to prove its claims, of course, plays no part in the determination of a prediscovery CPLR 3211 motion to dismiss'” … . * * *

“A motion to dismiss on the ground that the action is barred by documentary evidence pursuant to CPLR 3211(a)(1) may be granted only where the documentary evidence utterly refutes the plaintiff’s factual allegations, [thereby] conclusively establishing a defense as a matter of law” … . “[T]o be considered ‘documentary,’ evidence must be unambiguous and of undisputed authenticity” … . “[J]udicial records, as well as documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable, would qualify as documentary evidence in the proper case” … . “Neither affidavits, deposition testimony, nor letters are considered documentary evidence within the intendment of CPLR 3211(a)(1)” … . Maursky v Latham, 2023 NY Slip Op 04115, Second Dept 8-2-23

Practice Point: Irrespective of the possible result of a summary judgment motion, a motion to dismiss which depends on evidence and is not supported by “documentary evidence” will lose.

August 2, 2023

Civil Procedure, Evidence, Legal Malpractice, Negligence

A LEGAL MALPRACTICE COMPLAINT WHICH ALLEGES CONCLUSORY AND SPECULATIVE DAMAGES WILL BE DISMISSED FOR FAILURE TO STATE A CAUSE OF ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the legal malpractice complaint did not state a cause of action and should have been dismissed pursuant to CPLR 3211(a). Conclusory and speculative allegations of damages are not sufficient:

“‘To state a cause of action to recover damages for legal malpractice, a plaintiff must allege: (1) that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession; and (2) that the attorney’s breach of the duty proximately caused the plaintiff actual and ascertainable damages'” … . “To establish causation in a legal malpractice action, ‘a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence'” … . “‘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'” … . Here, the plaintiff failed to state a cause of action to recover damages for legal malpractice because the plaintiff’s allegation that the restaurant would have had increased profits but for the defendants’ alleged malpractice is conclusory and speculative … . 126 Main St., LLC v Kriegsman, 2023 NY Slip Op 03758, Second Dept 7-12-23

Practice Point: A legal malpractice complaint does not state a cause of action if the damages allegations and conclusory are speculative.

July 12, 2023

Attorneys, Evidence, Legal Malpractice, Negligence

PLAINTIFF STATED A CLAIM FOR LEGAL MALPRACTICE BASED UPON THE ATTORNEYS’ ALLEGEDLY UNREASONABLE DELAYS IN PROSECUTING AN ACTION AGAINST A CONTRACTOR, RESULTING IN THE INABILITY TO COLLECT THE JUDGMENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the complaint alleging legal malpractice should not have been dismissed. Plaintiff alleged the attorneys’ delays in prosecuting the action against a contractor resulted in plaintiff’s inability to collect a judgment against the contractor. By the time the judgment was acquired, the contractor had sold its assets and moved out of the country:

… [A]ccepting the facts alleged in the amended complaint as true, and according the plaintiff the benefit of every possible favorable inference, the amended complaint sufficiently states a cause of action to recover damages for legal malpractice. The amended complaint alleges that the defendants failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession by engaging in a pattern of undue delay in their prosecution of the underlying action, including by allowing the underlying action to be marked off the active calendar on two occasions and by failing to comply with certain court-ordered deadlines. The amended complaint further alleges that the defendants’ negligence proximately caused the plaintiff to sustain actual and ascertainable damages in that their delays in prosecuting the underlying action prevented him from being able to collect on the judgment that was eventually entered against the contractor … . Contrary to the defendants’ contention, the plaintiff’s allegations relating to proximate cause, including the nature and value of the contractor’s alleged assets and when they were disposed of, were not impermissibly speculative or conclusory … . Ofman v Tenenbaum Berger & Shivers, LLP, 2023 NY Slip Op 03471, Second Dept 6-28-23

Practice Point: Here the complaint stated a legal malpractice claim based upon the attorneys’ alleged unreasonable delays in prosecuting an action against a contractor, resulting in the inability to collect the judgment. The contractor sold its assets and moved out of the country.

June 28, 2023

Attorneys, Civil Procedure, Legal Malpractice, Negligence

ALTHOUGH THE ATTORNEYS IN THIS LEGAL MALPRACTICE ACTION MISSED THE STATUTE OF LIMITATIONS, THE COMPLAINT DID NOT ALLEGE SUFFICIENT FACTS TO DEMONSTRATE THE UNDERLYING LAWSUITS WOULD HAVE SUCCEEDED HAD THEY BEEN TIMELY BROUGHT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the legal malpractice action should have been dismissed because the complaint did not contain the “but for” allegations. It is not enough to allege defendants missed the statute of limitations, the complaint must also allege facts demonstrating the underlying lawsuits would have succeeded had they been timely brought:

… [T]he plaintiffs alleged that the decedent died after a brief admission to a drug and behavioral treatment facility, that the defendants agreed to represent the plaintiffs in an underlying action against the treatment facility and the medical providers who treated the decedent, that the defendants committed legal malpractice by failing to timely complete service of process in an action commenced in state court and by failing to commence a wrongful death cause of action in federal court before the applicable statute of limitations expired, and that the defendants’ failures resulted in the plaintiffs being unable to recover on their wrongful death causes of action. Absent from the complaint are any factual allegations relating to the basis for the plaintiffs’ purported wrongful death causes of action against the treatment facility or medical providers.

Accepting the facts alleged in the complaint as true, and according the plaintiffs the benefit of every possible favorable inference, the complaint failed to set forth facts sufficient to allege that [defendants’] purported negligence proximately caused the plaintiffs to sustain actual and ascertainable damages … . Even when considered with the documents submitted by the plaintiffs in opposition to the motion, the complaint failed to allege any facts tending to show that, but for [defendants’] alleged negligence in failing to timely serve process in the state court action and in failing to timely commence an action in federal court, the plaintiffs would have achieved a more favorable outcome on their wrongful death causes of action … . Buchanan v Law Offs. of Sheldon E. Green, P.C., 2023 NY Slip Op 01979, Second Dept 4-19-23

Practice Point: To sufficiently allege legal malpractice, the complaint must not only allege the attorneys’ negligence, here missing the statute of limitations, but sufficient facts must be alleged to demonstrate the lawsuit would have succeeded had it been timely brought.

See the companion decision: Buchanan v Law Offs. of Sheldon E. Green, P.C., 2023 NY Slip Op 01980, Second Dept 4-19-23

April 19, 2023

Attorneys, Legal Malpractice, Negligence, Trusts and Estates

ABSENT FRAUD OR COLLUSION, STRICT PRIVITY PRECLUDES THE PROSPECTIVE BENEFICIARIES OF AN ESTATE FROM BRINGING A LEGAL MALPRACTICE ACTION AGAINST THE ATTORNEY WHO PLANNED THE ESTATE; THE ATTORNEY OWED NO DUTY TO THE BENEFICIARIES (FIRST DEPT).

The First Department, reversing Supreme Court, determined the malpractice action by the prospective beneficiaries of an estate against the attorney who planned the estate should have been dismissed because there was no privity between the beneficiaries and the attorney:

In the context of estate planning malpractice actions, strict privity applies to preclude a third party, such as beneficiaries or prospective beneficiaries like plaintiffs, from asserting a claim against an attorney for professional negligence in the planning of an estate, absent fraud, collusion, malicious acts or other special circumstances … . While plaintiffs argue their claim against defendant attorneys is couched as one for simple negligence, as opposed to legal malpractice, plaintiffs have not pleaded facts to show that defendant attorneys owed plaintiffs a duty of care in the drafting of their client’s will and trust agreement. The strict privity requirement here protects estate planning attorneys against uncertainty and limitless liability in their practice … . Thus, plaintiffs’ negligence claim is unavailing for lack of factual allegations to demonstrate that defendants owed plaintiffs a duty.

Plaintiffs have not pleaded sufficient factual allegations in their amended complaint to indicate that circumstances of fraud, collusion and/or aiding and abetting exist in this case to override the strict privity rule. Plaintiffs have not alleged fraud with requisite specificity as, inter alia, there are no allegations defendants knowingly made material misrepresentations in the will and trust for the purpose of inducing justifiable reliance by their client (since deceased) upon such misrepresentations, and moreover the allegations made do not support favorable inferences in that regard … . Phillips v Murtha, 2023 NY Slip Op 01767, First Dept 4-4-23

Practice Point: Absent fraud or collusion, strict privity precludes a legal malpractice action by prospective beneficiaries of an estate against the attorney who planned the estate. Here the attorney owed no duty to the prospective beneficiaries.

April 4, 2023