Underlying claim based upon speculation and could not be sustained

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…claim based upon speculation…

In an action brought by a former client against his attorneys, the court determined that the complaint failed to state a cause of action. The court found that, while the complaint could be amended, the underlying claim was based upon speculation and could not be sustained. The court held,

“ Nevertheless, the amended complaint must be dismissed, because plaintiff’s claim that, but for defendants’ negligence, he would have recovered the full $3 million that he was owed during the bankruptcy filed by nonparty Majestic Capital, Ltd., consists of “ gross speculations on future events ” (Sherwood Group v. Dornbush, Mensch, Mandelstam & Silverman, 191 A.D.2d 292, 294, 594 N.Y.S.2d 766 [1st Dept. 1993]; see also Heritage Partners, LLC v. Stroock & Stroock & Lavan LLP, 133 A.D.3d 428, 19 N.Y.S.3d 511 [1st Dept. 2015], lv denied 27 N.Y.3d 904, 36 N.Y.S.3d 616, 56 N.E.3d 896 [2016]; Turk v. Angel, 293 A.D.2d 284, 740 N.Y.S.2d 50 [1st Dept. 2002], lv denied 100 N.Y.2d 510, 766 N.Y.S.2d 164, 798 N.E.2d 348 [2003] ).” Hickey v Kaufman, 156 AD3d 436 [1st Dept 2017].

R. A. Klass
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Dismissal of a legal malpractice action based upon documentary evidence

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Where a defendant/law firm moves for dismissal of a legal malpractice action based upon documentary evidence, it must establish that the documents are a complete defense to the other action; otherwise, the motion will be denied and the action will be permitted to go forward.

The court stated in, Hershco v Gordon & Gordon, 155 AD3d 1007 [2d Dept 2017], “A motion to dismiss on the basis of CPLR 3211(a)(1) may be granted “only where the documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law” (Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190; see 413 Throop, LLC v. Triumph, the Church of the New Age, 153 A.D.3d 1306, 1307, 61 N.Y.S.3d 307). On a motion to dismiss pursuant to CPLR 3211(a)(7), the court must accept the facts alleged in the complaint as true and afford the proponent the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see *39 Leon v. Martinez, 84 N.Y.2d 83, 87, 614 N.Y.S.2d 972, 638 N.E.2d 511; East Hampton Union Free School Dist. v. Sandpebble Bldrs., Inc., 66 A.D.3d 122, 125, 884 N.Y.S.2d 94, affd 16 N.Y.3d 775, 919 N.Y.S.2d 496, 944 N.E.2d 1135).”

Definitions: plaintiff, defendant.

R. A. Klass
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Alleged damages must be alleged with certainty

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” …court emphasized that it isn’t enough to just allege damages, they must be alleged with certainty… “

In Heritage Partners LLC v Stroock & Stroock & Lavan LLP, 155 AD3d 561 [1st Dept 2017], the appellate court emphasized that it isn’t enough to just allege damages, they must be alleged with certainty and not based on speculation. The court stated:

Even if our decision in a prior action between the parties (Heritage Partners, LLC v. Stroock & Stroock & Lavan LLP, 133 A.D.3d 428, 19 N.Y.S.3d 511 [1st Dept.2015], lv. denied 27 N.Y.3d 904, 2016 WL 1692057 [2016] ) does not constitute res judicata barring the instant action (a question we need not address), the new complaint fails to state a cause of action for malpractice because it does not sufficiently allege that defendant’s negligence was the proximate cause of plaintiff’s damages. While the current complaint addresses many of the problems we noted in the prior appeal, it does not adequately address the difficulty of “obtain[ing] debtor-in-possession financing in a troubled economic climate” (Heritage Partners, LLC v. Stroock & Stroock & Lavan LLP, 133 A.D.3d at 429, 19 N.Y.S.3d 511). Plaintiffs allege that “any funding required to facilitate a bankruptcy plan would have been secured through the bankruptcy court’s issuance of a ‘superpriority lien’…. Plaintiffs’ over $71 million in equity cushion was more than sufficient to secure approval from a bankruptcy court for a superpriority lien for DIP Financing.” However, as defendants contend, it is conjecture that there would have a been a DIP lender *198 willing to finance plaintiffs’ reorganization even if the bankruptcy court gave it superpriority. Unlike In re Lake Michigan Beach Pottawattamie Resort LLC, 547 B.R. 899 (Bankr.N.D.Ill.2016), this is not a case where “the Debtor … offered to provide evidence … of lenders willing to refinance the Property and pay [the existing lender] in full” (id. at 908). Thus, like the allegations in the prior complaint, the allegations in the current complaint are “couched in terms of gross speculations on future events and point to the speculative nature of plaintiffs’ claim” (Heritage, 133 A.D.3d at 429, 19 N.Y.S.3d 511 [internal quotation marks omitted] ).

R. A. Klass
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Plaintiff must establish elements of proximate cause

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In Verdi v Jacoby & Meyers, LLP, 154 AD3d 901 [2d Dept 2017], the court held:

“ To establish a cause of action to recover damages for legal malpractice, a plaintiff must establish the elements of proximate cause and damages, i.e. “ a plaintiff must show that but for the attorney’s negligence, he or she would have prevailed on the underlying claim ” (Rau v. Borenkoff, 262 A.D.2d 388, 389, 691 N.Y.S.2d 140; see Di Giacomo v. Michael S. Langella, P.C., 119 A.D.3d 636, 638, 990 N.Y.S.2d 221), by proving “ a case within a case ” (McKenna v. Forsyth & Forsyth, 280 A.D.2d 79, 82, 720 N.Y.S.2d 654 [internal quotation marks omitted] ). ”

Plaintiff claimed attorney malpracticed with regard to a settlement

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In Freeman v Brecher, 2017 NY Slip Op 07949 [1st Dept Nov. 14, 2017], the plaintiff claimed that the attorney malpracticed with regard to a settlement. In affirming the dismissal of the case, the appellate court held that,

“Plaintiff’s claim for legal malpractice in connection with an underlying settlement fails to state a cause of action in the absence of allegations that the “settlement … was effectively compelled by the mistakes of [defendant] counsel” (Bernstein v. Oppenheim & Co., 160 A.D.2d 428, 430, 554 N.Y.S.2d 487 [1st Dept.1990] ) or the result of fraud or coercion (see Beattie v. Brown & Wood, 243 A.D.2d 395, 663 N.Y.S.2d 199 [1st Dept.1997] ). Plaintiff’s equivocal denial of knowledge of the terms of the settlement is flatly contradicted by the clear terms of the settlement agreement (see Bishop v. Maurer, 33 A.D.3d 497, 499, 823 N.Y.S.2d 366 [1st Dept.2006], affd. 9 N.Y.3d 910, 844 N.Y.S.2d 165, 875 N.E.2d 883 [2007] ). Additionally, plaintiff’s speculative and conclusory allegations of proximately caused damages cannot serve as a basis for a legal malpractice claim (see Pellegrino v. File, 291 A.D.2d 60, 63, 738 N.Y.S.2d 320 [1st Dept.2002], lv. denied 98 N.Y.2d 606, 746 N.Y.S.2d 456, 774 N.E.2d 221 [2002] ). Plaintiff’s cause of action for breach of fiduciary duty arising from the same conduct was correctly dismissed as duplicative of the legal malpractice claim (see Garnett v. Fox, Horan & Camerini, LLP, 82 A.D.3d 435, 436, 918 N.Y.S.2d 79 [1st Dept.2011]; InKine Pharm. Co. v. Coleman, 305 A.D.2d 151, 152, 759 N.Y.S.2d 62 [1st Dept.2003] ).”