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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” …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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