…negligent in not objecting to the judgment debtor’s bankruptcy proceeding…

Posted on December 5, 2022 by Richard Klass

In Basile v Law Offices of Neal Brickman, P.C., 2022 NY Slip Op 06079 [1st Dept Nov. 1, 2022], the court affirmed the denial of the law firm’s motion to dismiss, holding:

The legal malpractice claim may not be barred by the three-year statute of limitations (CPLR 214[6]). Plaintiff contends that the claim was tolled by the continuous representation doctrine based on alleged emails and telephone conversations about collecting on plaintiff’s money judgment against the judgment debtor following its entry in 2010, at which time the judgment debtor did not have sufficient assets to satisfy the judgment. Defendants, however, assert that there was no continuous representation because plaintiff had no communication with them concerning collecting on the unsatisfied judgment until August 2019, when the limitations period on the instant claim had expired. These factual contentions concerning whether defendant continued to represent plaintiff during the relevant time period so as to toll the limitations period give rise to factual issues that cannot be resolved in this pre-answer motion to dismiss (see Boesky v. Levine, 193 A.D.3d 403, 147 N.Y.S.3d 2 [1st Dept. 2021]; Johnson v. Law Off. of Kenneth B. Schwartz, 145 A.D.3d 608, 612, 46 N.Y.S.3d 1 [1st Dept. 2016]).

Furthermore, the complaint’s allegations are sufficient to state a cause of action for legal malpractice. Plaintiff alleges that defendants were negligent in not objecting to the judgment debtor’s bankruptcy proceeding in 2015, which resulted in a discharge order that barred plaintiff from collecting on his money judgment against her. Defendants argue that they did not breach their duty to plaintiff by not intervening in the bankruptcy proceeding because they did not receive notice of the proceeding. Defendants submit the bankruptcy petition, which, in naming plaintiff as a creditor, included an outdated address for defendants and omitted the name of defendants’ law firm or a suite number. These undisputed facts, however, are not sufficient to find as a matter of law that defendants did not breach their duty to plaintiff. Defendants relocated to their new office in September 2014 and the judgment debtor filed her bankruptcy petition in January 2015, three months later. The bankruptcy petition included the name of the attorney who had assisted in plaintiff’s underlying action against the judgment debtor. At the very least, a factual issue exists as to whether the notice of the bankruptcy proceeding to object on plaintiff’s behalf was forwarded to defendants, which cannot be resolved at this juncture. As to proximate cause, contrary to defendants’ contention, proof of the collectability on a judgment is not an essential element of the legal malpractice claim, and arises after the “case within the case” has been proven (Lindenman v. Kreitzer, 7 A.D.3d 30, 35, 775 N.Y.S.2d 4 [1st Dept. 2004]).

Richard A. Klass, Esq.
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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.com with any questions.

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Plaintiffs failed to meet their shifted burden.

Posted on November 29, 2022 by Richard Klass

In Colucci v Rzepka, 209 AD3d 1205, 1207-08 [3d Dept 2022], the court held:

“An action to recover damages arising from legal malpractice must be commenced within three years after accrual” (Zorn v. Gilbert, 8 N.Y.3d 933, 933–934, 834 N.Y.S.2d 702, 866 N.E.2d 1030 [2007] [citation omitted]; see CPLR 214[6]). In the civil context, the claim “accrues when the malpractice is committed” (Ruggiero v. Powers, 284 A.D.2d 593, 594, 725 N.Y.S.2d 759 [3d Dept. 2001], lv dismissed 97 N.Y.2d 638, 735 N.Y.S.2d 495, 760 N.E.2d 1291 [2001]), “not at the time that the injury is discovered” (Lavelle–Tomko v. Aswad & Ingraham, 191 A.D.3d 1142, 1143, 143 N.Y.S.3d 109 [3d Dept. 2021]; see McCoy v. Feinman, 99 N.Y.2d 295, 301, 755 N.Y.S.2d 693, 785 N.E.2d 714 [2002]). As the moving parties, the law firms bear the “the initial burden of demonstrating, prima facie, that the time within which to commence the action has expired” (Krog Corp. v. Vanner Group, Inc., 158 A.D.3d 914, 915, 72 N.Y.S.3d 178 [3d Dept. 2018] [internal quotation marks and citations omitted]; see Lavelle–Tomko v. Aswad & Ingraham, 191 A.D.3d at 1143–1144, 143 N.Y.S.3d 109). To that end, the law firms established that this action was brought after the three-year statute of limitations accrued inasmuch as Rzepka ceased representation of plaintiffs in December 2015 and this action was not commenced until May 2020. Thus, the burden shifted to plaintiffs “to raise a question of fact as to whether the statute of limitations has been tolled or was otherwise inapplicable, or whether the action was actually commenced within the period propounded by … defendant[s]” (State of N.Y. Workers’ Compensation Bd. v. Wang, 147 A.D.3d 104, 110, 46 N.Y.S.3d 230 [3d Dept. 2017] [internal quotation marks and citations omitted]; see Bank of Am., N.A. v. Gulnick, 170 A.D.3d 1365, 1367, 95 N.Y.S.3d 639 [3d Dept. 2019], lv denied 34 N.Y.3d 908, 2020 WL 728411 [2020]).

Plaintiffs failed to meet their shifted burden. Specifically, plaintiffs erroneously rely upon Grace v. Law, 24 N.Y.3d 203, 997 N.Y.S.2d 334, 21 N.E.3d 995 (2014) for the proposition that they were not permitted to commence this action until the appeal of the Stuyvesant Plaza action was resolved in January 2018. In Grace v. Law, the Court of Appeals held “that prior to commencing a legal malpractice action, a party who is likely to succeed on appeal of the underlying action should be required to press an appeal. However, if the client is not likely to succeed, [the client] may bring a legal malpractice action without first pursuing an appeal of the underlying action” (id. at 210, 997 N.Y.S.2d 334, 21 N.E.3d 995 [emphasis added]). Here, given Supreme Court’s “broad discretion in controlling discovery and disclosure” (Colucci v. Stuyvesant Plaza, Inc., 157 A.D.3d at 1098, 69 N.Y.S.3d 410 [internal quotation marks and citations omitted]), plaintiffs’ appeal from the Stuyvesant Plaza action was not “likely to succeed,” such that it was not necessary for them to file an appeal pursuant to the standard set forth in (Grace v. Law, 24 N.Y.3d at 210, 997 N.Y.S.2d 334, 21 N.E.3d 995; see Florists’ Mut. Ins. Co., Inc. v. Behman Hambelton, LLP, 160 A.D.3d 502, 502, 71 N.Y.S.3d 357 [1st Dept. 2018]). Thus, plaintiffs were not “forced” to file an appeal prior to commencing the legal malpractice action. If plaintiffs believed the best course of action was to also file an appeal, they were certainly free to, but this did not toll the statute of limitations. Rather, the preferable course of action would have been to both timely commence the legal malpractice action and pursue an appeal and then request a stay of the legal malpractice action until determination of the appeal (see Spitzer v. Newman, 163 A.D.3d 1026, 1027–1028, 82 N.Y.S.3d 595 [2d Dept. 2018]). Accordingly, Supreme Court did not err in granting the law firms’ motions to dismiss the complaint as untimely. In light of this determination, plaintiffs’ remaining contentions have been rendered academic.

Richard A. Klass, Esq.
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Conclusory allegations of damages or injuries predicated on speculation cannot suffice for a malpractice action.

Posted on July 28, 2022 by Richard Klass

In Marinelli v Sullivan Papain Block McGrath & Cannavo, P.C., 205 AD3d 714, 716 [2d Dept 2022], the court held:

In an action to recover damages for legal malpractice, a plaintiff must demonstrate 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 the plaintiff to sustain actual and ascertainable damages (see Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 438, 442, 835 N.Y.S.2d 534, 867 N.E.2d 385; Bells v. Foster, 83 A.D.3d 876, 877, 922 N.Y.S.2d 124). Damages in a legal malpractice action are designed “to make the injured client whole” (Campagnola v. Mulholland, Minion & Roe, 76 N.Y.2d 38, 42, 556 N.Y.S.2d 239, 555 N.E.2d 611). “The plaintiff is required to plead actual, ascertainable damages that resulted from the attorneys’ negligence” (Bua v. Purcell & Ingrao, P.C., 99 A.D.3d 843, 847–848, 952 N.Y.S.2d 592; see Dempster v. Liotti, 86 A.D.3d 169, 176, 924 N.Y.S.2d 484). “Conclusory allegations of damages or injuries predicated on speculation cannot suffice for a malpractice action” (Bua v. Purcell & Ingrao, P.C., 99 A.D.3d at 848, 952 N.Y.S.2d 592; see Wald v. Berwitz, 62 A.D.3d 786, 787, 880 N.Y.S.2d 293; Holschauer v. Fisher, 5 A.D.3d 553, 554, 772 N.Y.S.2d 836), and “dismissal is warranted where the allegations in the complaint are merely conclusory and speculative” (Bua v. Purcell & Ingrao, P.C., 99 A.D.3d at 848, 952 N.Y.S.2d 592; see Hashmi v. Messiha, 65 A.D.3d 1193, 1195, 886 N.Y.S.2d 712; Riback v. Margulis, 43 A.D.3d 1023, 1023, 842 N.Y.S.2d 54).

Richard A. Klass, Esq.
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Defendants did not act in their capacities as attorneys when they allegedly made deceitful statements.

Posted on July 12, 2022 by Richard Klass

In Altman v DiPreta, 204 AD3d 965, 968-69 [2d Dept 2022], the court dismissed the cause of action brought under Judiciary Law Section 487, holding:

Under Judiciary Law Section 487(1), an attorney who “[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party” is liable to the injured party for treble damages. “Judiciary Law Section 487 ‘applies to an attorney acting in his or her capacity as an attorney, not to a party who is represented by counsel and who, incidentally, is an attorney’ ” (Pinkesz Mut. Holdings, LLC v. Pinkesz, 198 A.D.3d 693, 698, 156 N.Y.S.3d 216, quoting Oakes v. Muka, 56 A.D.3d 1057, 1058, 868 N.Y.S.2d 796). Here, the parties’ evidentiary submissions demonstrated that the DiPreta defendants did not act in their capacities as attorneys when they allegedly made deceitful statements. Accordingly, the Supreme Court properly granted that branch of the DiPreta defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the cause of action alleging violation of Judiciary Law Section 487 insofar as asserted against them by Charles (see Smallwood v. Lupoli, 107 A.D.3d 782, 784, 968 N.Y.S.2d 515; Crown Assoc., Inc. v. Zot, LLC, 83 A.D.3d 765, 768, 921 N.Y.S.2d 268; Oakes v. Muka, 56 A.D.3d at 1058, 868 N.Y.S.2d 796).

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An attorney may not be held liable for failing to act outside the scope of a retainer

Posted on May 24, 2022 by Richard Klass

In Natl. Air Cargo, Inc. v Jenner & Block, LLP, 203 AD3d 1655 [4th Dept 2022], the court dismissed the legal malpractice action based on the following basis:

A motion to dismiss a complaint based on documentary evidence “may be appropriately granted only where the documentary evidence utterly refutes [the] 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 [2002]). In support of its motion, HSE submitted the engagement letter between HSE and NAC. “An attorney may not be held liable for failing to act outside the scope of a retainer” (Attallah v. Milbank, Tweed, Hadley & McCloy, LLP, 168 A.D.3d 1026, 1028, 93 N.Y.S.3d 353 [2d Dept. 2019]; see AmBase Corp. v. Davis Polk & Wardwell, 8 N.Y.3d 428, 435, 834 N.Y.S.2d 705, 866 N.E.2d 1033 [2007]). Here, HSE met its burden of establishing by documentary evidence that the scope of its legal representation did not include a review of the insurance policies for possible coverage of the judgment in the underlying action. The engagement letter stated that HSE’s engagement did “not include responsibility either for review of [NAC’s] insurance policies to determine the possibility of coverage for any … claims that have [been] or may be asserted against [NAC] or for notification of [NAC’s] insurance carriers concerning the matter.” Because review of NAC’s liability insurance policies to determine their potential applicability to the judgment in the underlying action fell outside the scope of HSE’s engagement, the court properly granted HSE’s motion with respect to the professional negligence/legal malpractice cause of action against HSE insofar as asserted by NAC (see Turner v. Irving Finkelstein & Meirowitz, LLP, 61 A.D.3d 849, 850, 879 N.Y.S.2d 145 [2d Dept. 2009]).

Richard A. Klass, Esq.
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Prior results do not guarantee a similar outcome.

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