Client cannot prove damages occurred due to attorney’s malpractice

Posted on March 25, 2019 by Richard Klass

A legal malpractice action can be dismissed where the client cannot prove that damages occurred due to the attorney’s malpractice (what is commonly referred to as “but-for”). In Lisi v Lowenstein Sandler LLP, 2019 NY Slip Op 01665 [1st Dept Mar. 7, 2019], the court held:

In this legal malpractice action, plaintiff alleges that defendants were negligent in failing to advise him that the income realized from the exercise of his stock options would be taxed as ordinary income and that, had they so advised him, he would have sold his shares earlier or eliminated any market risk by shorting the shares in full or otherwise taking measures to eliminate risk. However, this theory of proximate cause is belied by the record and relies on gross speculation (see Gallet, Dreyer & Berkey, LLP v. Basile, 141 A.D.3d 405, 35 N.Y.S.3d 56 [1st Dept. 2016]; Sherwood Group v. Dornbush, Mensch, Mandelstam & Silverman, 191 A.D.2d 292, 294, 594 N.Y.S.2d 766 [1st Dept. 1993] ).

R. A. Klass
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Be mindful of New York’s statute of limitations pertaining to legal malpractice actions

Posted on March 18, 2019 by Richard Klass

Soloway v Kane Kessler, PC, 168 AD3d 407 [1st Dept 2019] serves as a good reminder to be mindful of New York’s statute of limitations pertaining to legal malpractice actions.

“ The court correctly found the complaint time-barred under CPLR 202, New York’s “ borrowing statute, ” which requires a claim to be timely under both the New York limitations period and that of the jurisdiction where the claim is alleged to have arisen (Kat House Prods., LLC v Paul, Hastings, Janofsky & Walker, LLP, 71 AD3d 580 [1st Dept 2010]).

Plaintiff, a New Jersey resident, alleged legal malpractice in connection with defendants’ representation of him for numerous real estate transactions, a cause of action which has a three year statute of limitations in New York (CPLR 214 [6]), and a six year limitations period in New Jersey (NJ Stat Ann § 2A:14-1). The latest that the alleged malpractice could have occurred was February 7, 2013, the date set for closing on the last of the real estate matters. Because plaintiff commenced the action on October 28, 2016, more than three years later, it was correctly dismissed as untimely. ”

R. A. Klass
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Defendant moving to dismiss an action must prove the merits of its case

Posted on February 25, 2019 by Richard Klass

Bakcheva v Law Offices of Stein & Assoc., 2019 NY Slip Op 00844 [2d Dept Feb. 6, 2019] is a good reminder that a defendant moving to dismiss an action must prove the merits of its case. The court held:

A plaintiff seeking to recover damages for legal malpractice must prove that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (see McCoy v. Feinman, 99 N.Y.2d 295, 301–302, 755 N.Y.S.2d 693, 785 N.E.2d 714; Biberaj v. Acocella, 120 A.D.3d 1285, 1286, 993 N.Y.S.2d 64). A defendant seeking summary judgment dismissing a legal malpractice cause of action has the burden of establishing prima facie that he or she did not fail to exercise such skill and knowledge, or that the claimed departure did not proximately cause the plaintiff to sustain damages (see Iannucci v. Kucker & Bruh, LLP, 161 A.D.3d 959, 960, 77 N.Y.S.3d 118; Betz v. Blatt, 160 A.D.3d 696, 698, 74 N.Y.S.3d 75). The defendant must affirmatively demonstrate the merits of a defense, rather than merely pointing out gaps in the plaintiff’s proof (see Iannucci v. Kucker & Bruh, LLP, 161 A.D.3d at 960, 77 N.Y.S.3d 118).

We agree with the Supreme Court that the defendants were not entitled to summary judgment dismissing the legal malpractice cause of action. Although the defendants established their prima facie entitlement to judgment as a matter of law, the plaintiff raised a triable issue of fact in opposition. Specifically, the plaintiff submitted evidence that she had informed the defendants, prior to the closing, that the main portion of the apartment was on the seventh floor of the building and that the apartment included a second level. According to the plaintiff, the defendants committed malpractice because they failed to recognize the illegality of the second level, since neither the certificate of occupancy nor the approved condominium offering plan authorized the existence of an eighth floor to the condominium.

R. A. Klass
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Outlining the scope of an attorney’s retainer agreement is important.

Posted on February 14, 2019 by Richard Klass

Outlining the scope of an attorney’s retainer agreement is important. This sets forth the nature of the work to be rendered by an attorney on behalf of his client. In Attallah v Milbank, Tweed, Hadley & McCloy, LLP, 2019 NY Slip Op 00583 [2d Dept Jan. 30, 2019], the court held:

An attorney may not be held liable for failing to act outside the scope of a retainer (see AmBase Corp. v. Davis Polk & Wardwell, 8 N.Y.3d 428, 834 N.Y.S.2d 705, 866 N.E.2d 1033). Therefore, since the defendant’s alleged failure to negotiate with the school, its alleged failure to commence litigation against the school, and its alleged failure to properly advise the plaintiff on the efficacy of a defamation action against nonschool parties fell outside the scope of the parties’ letter of engagement, dismissal of the cause of action alleging legal malpractice was warranted, pursuant to CPLR 3211(a)(1), on documentary evidence grounds.

R. A. Klass
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Appellate court reversed the court order dismissing the action on the law firm’s motion to dismiss.

Posted on February 5, 2019 by Richard Klass

In an action by a client against a law firm for legal malpractice, the appellate court reversed the court order dismissing the action on the law firm’s motion to dismiss. The court held:

“ 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 ” (Dempster v. Liotti, 86 A.D.3d 169, 176, 924 N.Y.S.2d 484 [internal quotation marks omitted]; see Leder v. Spiegel, 9 N.Y.3d 836, 837, 840 N.Y.S.2d 888, 872 N.E.2d 1194). Here, accepting the facts alleged in the complaint as true, and according the plaintiff the benefit of every possible favorable inference, the plaintiff stated a cause of action to recover damages for legal malpractice (see Tooma v. Grossbarth, 121 A.D.3d at 1095–1096, 995 N.Y.S.2d 593; Endless Ocean, LLC v. Twomey, Latham, Shea, Kelley, Dubin & Quartararo, 113 A.D.3d 587, 589, 979 N.Y.S.2d 84; Reynolds v. Picciano, 29 A.D.2d 1012, 1012, 289 N.Y.S.2d 436). The evidentiary submissions did not establish that a material fact alleged in the complaint is not a fact at all and that no significant dispute exists regarding it (see Bodden v. Kean, 86 A.D.3d at 526, 927 N.Y.S.2d 137). Contrary to the defendants’ contention, the plaintiff was entitled to commence this legal malpractice action even though the underlying personal injury action was still pending, as the legal malpractice action accrued, at the latest, in November 2014 (see Johnston v. Raskin, 193 A.D.2d 786, 787, 598 N.Y.S.2d 272).