[Don’t] Play It Again, Sam

In July 2012 (the “2012 Action”), the plaintiff filed suit in the Civil Court against Defendants.  In the 2012 Action, the plaintiff sued for the following: “Action to recover the sum of $18,000, with interest thereon from January 1, 2009, based upon a) mistaken charge to [Plaintiff’s] credit card account by Defendants in the amount of $18,000.00, and Defendants’ failure and refusal to credit said charge back to Plaintiff; b) breach of contract; and c) unjust enrichment.”

In January 2020, after court orders marking the trial date “final,” the Civil Court Judge entered an Order dismissing the 2012 Action.  At the hearing, the Court found that the plaintiff “had notice of [the] trial date since November of 2019” and thereafter denied the application for an adjournment of the trial.

Second Action Filed

In March 2021, the plaintiff commenced a new action in the Supreme Court (the “2021 Action”), asserting claims against the defendants relating to a dispute regarding specific charges on his account.  He also asserted claims for unjust enrichment, conversion, breach of contract, breach of implied covenant of good faith, injunctive relief, intentional infliction of emotional distress, and declaratory relief.  The plaintiff specifically asserted in the complaint that two sets of credit-card charges were erroneously paid, totaling approximately $18,000. In the 2021 Action, the plaintiff’s additional causes of action arose from a nucleus of operative facts that were identical to the ones adjudicated through judgment in the 2012 Action.

Doctrine of Res Judicata

The defendants retained Richard A. Klass, Esq., Your Court Street Lawyer, to move for dismissal of the 2021 Action based on the doctrine of res judicata.  Pursuant to CPLR 3211(a)(5), a cause of action should be dismissed when it “may not be maintained” due to the doctrine of res judicata (also known as “claim preclusion”).  In the 2021 Action, the complaint asserted claims for the transactions that had already been adjudicated in the 2012 Action.  Under New York’s “transactional analysis approach to res judicata, ‘once a claim is brought to its final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy.”’ In re Hunter, 4 N.Y.3d 260, 269 (2005).

It was pointed out that New York courts regularly dismiss actions under CPLR 3211(a)(5) based on the doctrine of res judicata.  See, e.g., Board of Managers of the 129 Condominium, v. 129 Lafayette Street, LLC, 2012 N.Y. Slip Op 33349 at p. 11 (NY Sup. 2012) (granting motion to dismiss action under res judicata because the claims in both actions arose out of the “same transaction or series of transactions”); Douglas Elliman LLC v. Bergere, 98 A.D.3d 642, 642 (2nd Dept. 2012) (dismissing action pursuant to CPLR 3211(a)(5) based on the doctrine of res judicata); Corto v. Lefrak, 203 A.D.2d 94, 95 (1st Dept. 1994) (affirming dismissal of action based on res judicata and collateral estoppel); Paar v. Bay Crest Assoc., 35 N.Y.S.3 190 (2nd Dept. 2016) (doctrine of res judicata barred subsequent breach of contract action); Plaza PH2001 LLC v. Plaza Residential Owner LP, 947 N.Y.S.2d 498 (1st Dept. 2014).

Court looks at “Factual Grouping” of Claims

The fact that the plaintiff, in the 2021 Action, alleged additional causes of action — relative to the 2012 Action — did not alter the res judicata analysis: “When alternative theories are available to recover what is essentially the same relief for harm arising out of the same or related facts such as would constitute a single ‘factual grouping’…, the circumstances that the theories involve materially different elements of proof will not justify presenting the claim by two different actions.”  SSJ Development of Sheepshead Bay I, LLC v. Amalgamated Bank, 2014 N.Y. Slip Op. 30913 at p. 5 (NY Sup. 2014).   Additionally, “[i]f the party against whom res judicata is invoked had a full and fair opportunity to litigate the claim in a prior proceeding based on the same transaction, but did not raise it therein, he will be barred from raising it in a subsequent action.” Schwartzreich v. E.P. Carting Co., 688 N.Y.S.2d 370, 441 (1st Dept. 1998).  The rule applies not only to claims actually litigated, but also to claims that could have been raised in the prior litigation.  O’Brien v. City of Syracuse, 54 N.Y.2d 353, 357-58 (1981).

Second Action Dismissed

The Supreme Court Justice granted the motion to dismiss the 2021 Action. In his decision, the judge held: “The Court observes that the doctrine [of res judicata] ‘precludes litigation of matters that could or should have been raised in a prior proceeding between the parties arising from the same factual grouping, transactions or series of transactions.’ (see, DeSanto Construction Corporation v. Royal Insurance Company, 278 AD2d 357 [2nd Dept. 2000].”


Richard A. Klass, Esq.
Your Court Street Lawyer

#CourtStreetLawyer #resjudicata

Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached at (718) COURT●ST or RichKlass@courtstreetlaw.comcreate new email with any questions.

Prior results do not guarantee a similar outcome.

© 2022 Richard A. Klass

Scales of justice illustrating article about legal malpractice.

Documents submitted by the defendants do not utterly refute the factual allegations.

In Singh v Pliskin, Rubano, Baum & Vitulli, 200 AD3d 927, 929 [2d Dept 2021]. The court denied the law firm’s motion to dismiss, holding:

The complaint, as augmented by the affidavit of Singh submitted in opposition to the defendants’ motion to dismiss, sufficiently stated a cause of action for legal malpractice (see CPLR 3211 [a] [7]; Leon v Martinez, 84 NY2d 83, 87-88 [1994]; Doe v Ascend Charter Schs., 181 AD3d 648, 649-650 [2020]). Contrary to the defendants’ contention, at this preliminary stage of the litigation, they failed to conclusively demonstrate that the plaintiffs’ subsequent attorney had a sufficient opportunity to correct the defendants’ alleged negligence, such that they did not proximately cause any damages flowing from that negligence (see Gobindram v Ruskin Moscou Faltischek, P.C., 175 AD3d 586, 591 [2019]). The defendants also failed to demonstrate that their actions were protected by the attorney judgment rule (see generally Rosner v Paley, 65 NY2d 736, 738 [1985]; Katsoris v Bodnar & Milone, LLP, 186 AD3d at 1505).

The documents submitted by the defendants do not utterly refute the factual allegations of the complaint and do not conclusively establish a defense to the plaintiffs’ legal malpractice claim as a matter of law (see CPLR 3211 [a] [1]; Cali v Maio, 189 AD3d 1337, 1338 [2020]; Gorunkati v Baker Sanders, LLC, 179 AD3d 904, 906 [2020]).


Richard A. Klass, Esq.
Your Court Street Lawyer

#CourtStreetLawyer #legalmalpractice

Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached at (718) COURT●ST or RichKlass@courtstreetlaw.comcreate new email with any questions.

Prior results do not guarantee a similar outcome.

© 2022 Richard A. Klass

Scales of justice illustrating article about legal malpractice.

Legal malpractice context…continuous representation doctrine…generally limited to…a specific legal matter…

In Goodman v Weiss, Zarett, Brofman, Sonnenklar & Levy, P.C., 199 AD3d 659, 661-62 [2d Dept 2021], court affirmed the dismissal the client’s malpractice action as time-barred, holding:

The plaintiff contends that the defendant’s malpractice consisted of improperly negotiating his separation from his previous employer and his new employment contract with the hospitals. However, an action alleging legal malpractice must be commenced within three years from the date of accrual (see CPLR 214 [6]). A claim accrues when the malpractice is committed, not when the client discovers it (see Shumsky v Eisenstein, 96 NY2d 164, 166 [2001]). “Causes of action alleging legal malpractice which would otherwise be time-barred are timely if the doctrine of continuous representation applies” (DeStaso v Condon Resnick, LLP, 90 AD3d 809, 812 [2011]). “In the legal malpractice context, the continuous representation doctrine tolls the statute of limitations where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim” (id. at 812). Application of the continuous representation doctrine is generally “limited to the course of representation concerning a specific legal matter . . . ; [t]he concern, of course, is whether there has been continuous [representation], and not merely a continuing relation” between the client and the lawyer (Shumsky v Eisenstein, 96 NY2d at 168 [internal quotation marks omitted]).

Contrary to the plaintiff’s contention, the legal malpractice cause of action at issue was time-barred under CPLR 214 (6), and the continuous representation doctrine did not toll the statute of limitations. That doctrine “tolls the running of the statute of limitations on a cause of action against a professional defendant only so long as the defendant continues to represent the plaintiff[s] in connection with the particular transaction which is the subject of the action and not merely during the continuation of a general professional relationship” (Maurice W. Pomfrey & Assoc., Ltd. v Hancock & Estabrook, LLP, 50 AD3d 1531, 1533 [2008] [internal quotation marks omitted]). Although the plaintiff alleges that the defendant continued to provide legal services to him between January 2011 and November 2013, he did not seek or obtain the defendant’s legal services at any time during that period and, when the plaintiff did subsequently engage the defendant’s legal services, that engagement was with regard to the performance of distinct services related to a different subject matter. Accordingly, the Supreme Court properly determined that the continuous representation toll was inapplicable and granted that branch of the defendant’s motion which was to dismiss the legal malpractice cause of action as time-barred.


Richard A. Klass, Esq.
Your Court Street Lawyer

#CourtStreetLawyer #continuous-representation

Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached at (718) COURT●ST or RichKlass@courtstreetlaw.comcreate new email with any questions.

Prior results do not guarantee a similar outcome.

© 2022 Richard A. Klass

Scales of justice illustrating article about legal malpractice.

False Hopes, more dangerous than fears: default, action and modification of a Promissory Note

“False hopes are more dangerous than fears.”

— J.R.R. Tolkien

A friend made a $200,000 personal loan (“Lender”) to one of his friends (“Borrower). At the time the loan was made in 2016, the Borrower signed a promissory note[1] in favor of his Lender friend, promising to repay the loan within ten months with interest. According to the terms of the Promissory Note, if the Borrower failed to repay the principal and interest in full by its due date at the end of 2016, any accrued interest would thereafter be calculated at the default rate of twenty percent per annum. In addition, the Promissory Note stated that “[n]o term of [the Promissory Note] may be waived, modified or amended except by instrument in writing signed by both of the parties.”

Default on the note

The Borrower failed to repay the entire balance due by the due date and was, therefore, in default under the terms of the Promissory Note. Nonetheless, the Lender agreed to allow his friend to continue making monthly payments on the balance due. Finally, the payments by the Borrower became so sporadic that, in 2019, the Lender decided to sue his friend to recover the balance due on the loan.

Action brought on the note

The Lender retained Richard A. Klass, Esq., Your Court Street Lawyer, to file a claim for breach of contract based upon non-payment of the Promissory Note. He established his prima facie entitlement to judgment as a matter of law on the cause of action to recover on the note through submission of the Promissory Note, which contained an unequivocal and unconditional obligation to pay, and an affidavit setting forth the borrower’s default. See Intermax Eco, LLC v Eco Family Food Mart Corp., 172 AD3d 1040, 1041 [2d Dept 2019]; Boro P. Health Mgt., LLC v Boro for Health, LLC, 39 Misc 3d 1229(A)972 N.Y.S.2d 142 [Sup Ct 2013].

There was no modification of the note.

In response to the Lender’s lawsuit, the Borrower put up the defense that the terms of the note were modified through a series of email exchanges between him and the Lender. The Borrower filed an affidavit alleging that he made payments over the course of several years which the lender accepted; and the loan was, thus, modified.

As urged by the Lender, the alleged defense of loan modification (based on the fact that the Lender took payments from his friend after the loan came due) completely missed the point — by its own terms, the Promissory Note became due and owing in 2016. Since the Promissory Note matured by its own terms in 2016, the Lender was well within his rights to pursue collection, since the cause of action had already accrued.[2] The assertion that there was some sort of modification of the note or a waiver of same was belied by both the facts and law. While the Borrower attempted to rely on a short exchange of emails in which his friend was basically “chewing him out” for not repaying the loan, the email exchange did not rise to the level of contract modification required by the terms of the Promissory Note,[3] or established by law. The email exchange only showed that the Lender was looking for some good faith from his friend — and his friend couldn’t even do that much (he couldn’t even live up to the supposed offer he made, as evidenced from his small, irregular payments). The email exchange did not constitute an enforceable, written modification setting forth the terms of any extension of the repayment terms of the note.[4]

In JPMorgan Chase Bank, N.A. v Galt Group, Inc., 84 AD3d 1028, 1029-30 [2d Dept 2011], the court rejected a similar claim, that emails were alleged to have modified the terms of a note, holding:

To make a prima facie showing of entitlement to judgment as a matter of law in an action to recover on a note, and on a guaranty thereof, a plaintiff must establish “the existence of a note and guaranty and the defendants’ failure to make payments according to their terms” (Verela v. Citrus Lake Dev., Inc., 53 A.D.3d 574, 575, 862 N.Y.S.2d 96; see Gullery v. Imburgio, 74 A.D.3d 1022, 905 N.Y.S.2d 221). Here, Chase submitted the SBA Loan documents, including the relevant promissory notes, the personal guaranties, and evidence of the defendants’ default, which together established its prima facie entitlement to judgment as a matter of law on the complaint.

Once Chase established its prima facie entitlement to judgment as a matter of law, “[t]he burden then shifted to the defendant[s] to establish by admissible evidence the existence of a triable issue of fact with respect to a bona fide defense” (Gullery v. Imburgio, 74 A.D.3d at 1022, 905 N.Y.S.2d 221; see Verela v. Citrus Lake Dev., Inc., 53 A.D.3d at 575, 862 N.Y.S.2d 96). The defendants did not contest the validity of any of the agreements, notes, or guaranties, nor did they dispute that they were in default. Instead, they submitted certain e-mails into evidence, and argued that they had entered into yet another agreement with Chase — a payoff/paydown agreement — by which Chase agreed to refrain from prosecuting the instant action while the defendants were given an apparently unlimited time to obtain a refinancing loan. Contrary to their contention, however, the Supreme Court correctly concluded that the e-mails contained no evidence of any such agreement between Chase and the defendants.

The Borrower’s expressions of hopes and aspirations to repay the loan set forth in emails, while perhaps well-intended, did not amount to a modification of the terms of the Promissory Note. The Lender was well within his rights to commence this action at the time he did, as the cause of action on the note accrued and the action was timely commenced, giving credit for all payments made. The emails, at best, presented his friend with an opportunity to “do the right thing” and repay the debt.[5] It was urged that the emails ought not be interpreted as a binding modification or waiver of any rights.

Doctrines of waiver and estoppel were inapplicable

The Borrower also asserted affirmative defenses that the action was barred by the doctrines of waiver and/or estoppel. In seeking dismissal of these affirmative defenses, the Lender suggested that these were inapposite to the facts established in this matter and there was no evidentiary basis upon which they could be supported.

The essence of a waiver is when a party intentionally relinquishes a known right. It is well settled that when there is a no oral modification clause, the doctrines of waiver, release and estoppel do not apply. (“Waiver is an intentional relinquishment of a known right and should not be lightly presumed”) Gilbert Frank Corp. v. Fed. Ins. Co., 70 N.Y.2d 966, 968 [1988]; Brooklyn Fed. Saving Bank v 9096 Meserole St. Realty LLC, 29 Misc 3d 1220(A) [Kings Sup Ct 2010]. In this case, the Promissory Note clearly contained a provision that no term of the Note may be waived, modified or amended except by instrument in writing signed by both parties.

“Equitable estoppel prevents one from denying his own expressed or implied admission which has in good faith been accepted and acted upon by another, and the elements of estoppel are with respect to the party estopped: conduct which amounts to a false representation or concealment of material facts, intention that such conduct will be acted upon by the other party, and knowledge of the real facts. The party asserting estoppel must show with respect to himself: lack of knowledge of the true facts, reliance upon the conduct of the party estopped, and a prejudicial change in his position.” Airco Alloys Div., Airco Inc. v Niagara Mohawk Power Corp., 76 AD2d 68, 71-72 [4th Dept 1980]. In the instant matter, the Borrower did not produce any evidence that there was an expressed or implied admission that was in good faith accepted and acted upon by another. Moreover, there was no false representation or concealment of a material fact. There was simply a binding Promissory Note, and nonperformance by the Borrower.

In granting summary judgment in favor of the Lender, the judge directed that the Borrower be held liable for the balance due on the Promissory Note. The judge also dismissed the affirmative defenses set forth in the answer.

End Notes

[1] “A promissory note is an instrument for the payment of money only, provided that it contains an unconditional promise by the borrower to pay the lender over a stated period of time.” Estate of Hansraj v. Sukhu, 145 A.D.3d 755, 755, 43 N.Y.S.3d 127, quoting Lugli v. Johnston, 78 A.D.3d 1133, 1134, 912 N.Y.S.2d 108).

[2] § 83:46. Time instruments: Maker and acceptor, 4C N.Y.Prac., Com. Litig. in New York State Courts § 83:46 (4th ed.) (“A cause of action on an instrument payable on a specified date or the occurrence of a specified event (a time instrument) accrues against the instrument’s maker (if a note) or acceptor (if a draft) on the day after the specified date or event.”); see, UCC 3-122, which provides in relevant part: “(1) A cause of action against a maker or an acceptor accrues (a) in the case of a time instrument on the day after maturity”)

[3] “No term of this Note may be waived, modified or amended expect by an instrument in writing signed by both of the parties hereto. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.”

[4] 22A N.Y. Jur. 2d Contracts § 475 (relevant parts). A contract may be modified if the contract provides for its modification. Fundamental to the establishment of a contract modification is proof of each element requisite to the formulation of a contract. Thus, to be valid under New York law, a contractual modification must satisfy each element of a contract, including offer, acceptance, and consideration. A contract cannot be modified or altered without the consent of all parties thereto. In other words, a contract cannot be modified without the mutual assent of each party. Thus, under general contract rules, an obligation may not be altered without the consent of the party who assumed the obligation. Also, when a contract prohibits modification without the express written consent of a particular party, modification without that party’s express written consent is invalid. Mere negotiations between the parties are insufficient to constitute a modification, but rather must ripen into a mutual, valid, and enforceable agreement to modify the old contract. (emphasis added).

[5] Genger v Genger, 123 AD3d 445, 446 [1st Dept 2014] “[i]ndulgence or leniency in enforcing a debt when due is not an alteration of the contract” (Bier Pension Plan Trust v. Estate of Schneierson, 74 N.Y.2d 312, 316, 546 N.Y.S.2d 824, 545 N.E.2d 1212 [1989]).


Richard A. Klass, Esq.
Your Court Street Lawyer

#CourtStreetLawyer #promissory-note

Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached at (718) COURT●ST or RichKlass@courtstreetlaw.comcreate new email with any questions.

Prior results do not guarantee a similar outcome.

© 2022 Richard A. Klass

Scales of justice illustrating article about legal malpractice.

Establishing a cause of action under Judiciary Law Section 487 can be difficult.

Establishing a cause of action under Judiciary Law Section 487 can be difficult. In Long Is. Med. Anesthesiology, P.C. v Rosenberg Fortuna & Laitman, LLP, 191 AD3d 864 [2d Dept 2021], the court dismissed the cause of action, holding:

An attorney is liable under Judiciary Law § 487(1) if he or she “[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party.” “ ‘A cause of action alleging a violation of Judiciary Law § 487 must be pleaded with specificity’ ” (Sammy v. Haupel, 170 A.D.3d 1224, 1225, 97 N.Y.S.3d 269, quoting Betz v. Blatt, 160 A.D.3d at 698, 74 N.Y.S.3d 75). “Judiciary Law § 487 focuses on the attorney’s intent to deceive, not the deceit’s success” (Sammy v. Haupel, 170 A.D.3d at 1225, 97 N.Y.S.3d 269 [internal quotation marks omitted]; see Betz v. Blatt, 160 A.D.3d at 699, 74 N.Y.S.3d 75). Here, the Supreme Court correctly determined that, even accepting the plaintiffs’ allegations as true and giving the complaint the benefit of every favorable inference (see Arnell Constr. Corp. v. New York City Sch. Constr. Auth., 177 A.D.3d 595, 596, 112 N.Y.S.3d 169), the plaintiffs failed to plead this cause of action with sufficient particularity to withstand a motion to dismiss.

R. A. Klass
Your Court Street Lawyer

Next post
Previous post

#CourtStreetLawyer #LegalMalpractice #litigation #section487

Scales of justice illustrating article about legal malpractice.