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New Legal Malpractice Claim Permitted; Breach of Contract Out

It is rare that Courts leave legal malpractice counterclaims in a case which starts out as an attorney fee claim; it is more rare that a late amended claim is permitted.  However, in Davidoff Hutcher & Citron LLP v Parada  2019 NY Slip Op 31121(U) April 22, 2019  Supreme Court, New York County Docket Number: 152533/2016 Judge Paul A. Goetz permitted amendment to add a legal malpractice counterclaim.

“Plaintiff Davidoff Hutcher & Citron LLP commenced this action against its former client, defendant Maria Del Pilar Nava Parada, for unpaid legal fees arising from plaintiffs representation of Ms. Parada in a divorce proceeding. In her answer, Ms. Parada asserted a counterclaim for unjust enrichment based on plaintiffs alleged excessive billing practices. By order dated November 26, 2018, this court granted plaintiffs motion for summary judgment on its complaint for unpaid legal fees. Plaintiff now moves pursuant to CPLR 3212 for summary judgment dismissing Ms. Parada’s counterclaim for unjust enrichment. In a separate motion, defendant Ms. Parada moves pursuant to CPLR 3025 to amend her answer to assert additional counterclaims arising from plaintiffs alleged malpractice in representing defendant in a divorce proceeding. The motions are consolidated for purposes of this decision. ”

“With respect to the proposed counterclaim for legal malpractice, defendant Ms. Parada alleges that as a result of plaintiffs failure to complete certain tasks in the underlying divorce proceeding, Ms. Parada was forced to enter into an unfavorable settlement agreement with her ex-husband. Affirmation of Peter Hanschke dated February 26, 2019, Exh. C, if 22. Althoug plaintiff argues that Ms. Parada’s allegations are speculative and that she will not be able to show that plaintiffs actions caused Ms. Parada to enter into this agreement, it cannot be said at this stage that the proposed counterclaim is palpably insufficient or completely devoid of merit so as to warrant denial of her motion to amend. Cruz v. Brown, 129 A.D.3d 455, 456 (1st Dep’t 2015).

Further, Ms. Parada provided a reasonable excuse for her delay in asserting this claim as the underlying divorce proceeding finally settled in December 2018 and defendant moved promptly thereafter to amend her counterclaims. Accordingly, it is ORDERED that the motion for summary judgment is granted and the counterclaim for unjust enrichment is dismissed; and it is further ORDERED that the motion to amend to assert additional counterclaims is granted only to the extent that defendant Ms. Parada may assert a counterclaim for legal malpractice as alleged in the proposed amended answer and counterclaims attached to the motion papers, and is otherwise denied; “

New Legal Malpractice Claim Permitted; Breach of Contract Out

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From Outlier to Center Stage

Continuous representation was once determined almost solely by the date of transfer of representation.  Either a consent to change attorney or a court order determined the last day of representation and hence the end of continuous representation.  Then came Aaron v. Roemer  which held that communications showing a total breakdown of the attorney-client relationship marked the end of continuous representation, even though the order came days later.  Those few days made a great difference.

Consolidated Edison Co. of N.Y., Inc. v Armienti,  Debellis & Whiten, LLP  2019 NY Slip Op 31123(U)  April 17, 2019  Supreme Court, New York County   Docket Number: 152730/2018 Judge: William Franc Perry reaches a similar conclusion, and, sub rosa holds that Con Ed would have lost for many other reasons as well.

“Under CPLR 214(6), a plaintiff must commence an action to recover damages for legal malpractice within three years from the date of the alleged malpractice. “The period of limitations in a legal malpractice action begins to run when the malprac~ice is committed … , not when the client discovers the injury/’ (Wells Fargo Home Mortgage, Inc. v Zeichner, Ellman & Krause, LLP, 5 AD3d 128, 128-29 [1st Dept 2004] [internal citation omitted]). “A legal malpractice Claim accrues ‘when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court'” (McCoy v. Feinman, 99 N.Y.2d 295, 301 [2002], quoting Ackerman v. Price Waterhouse, 84 NY2d 535, 541 [1994]). “[W]hat is important is when the malpractice was committed, not when the client discovered it” (Hahn v Dewey & .LeBoeuf Liquidation Tr., 143 AD3d 547, 547 [1st Dept 2016] [internal quotation marks and citations omitted]).

Here, the actions giving rise to Con Edison’s claims for legal malpractice occurred in 2005 and 2006. Accordingly, to survive dismissal, Con Edison must establish that the statute of limitations was tolled pursuant to the continuous representation doctrine until at least March 27, 2015, which date is three years prior to Con Edison’s commencement of this action. 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” (Zorn v Gilbert, 8 NY3d 933, 934 [2007], quoting McCoy v Feinman, 99 NY2d 295, 306 [2002]; see also Shumsky v Eisenstein, 96 NY2d 164, 167-168 [2001J). The purpose of the continuous representation doctrine is to avoid forcing a client to jeopardize the relationship with the attorney handling his or her case during the period that the attorney continues to represent them (Waggoner v Caruso, 68 AD3d 1, 7 [1st Dept 2009], af(d, 14 NY3d 874 [2010]). “An attorney-client relationship would certainly be jeopardized by a client’s allegation that his or her attorney committed   malpractice while representing the client” (id. [citation omitted]). The application of the continuous representation doctrine in an action for attorney malpractice “envisions a relationship between the parties that is marked with trust and confidence. It is a relationship which is not sporadic but developing and involves a continuity of the professional services from which the alleged malpractice stems” (Frenchman v Queller, Fisher, Dienst, Serrins, Washor & Kool, LLP, 24 Misc 3d 486, 498 [Sup Ct New York Cnty 2009], quoting Muller v Sturman, 79 AD2d 482, 486 [4th Dept 1981]; see Henry v Leeds & Morelli, 4 AD3d 229 [1st Dept 2004]). For the continuous representation doctrine to apply, “there must be clear indicia of an ongoing, continuous, developing, and dependent relationship between the client and the attorney which often includes an attempt by the attorney to rectify an alleged act of malpractice” (Luk Lamellen U Kupplungbau GmbH v Lerner, 166 AD2d 505, 507 [2d Dept 1990]).

Here, Armienti argues that Con Edison’s claims accrued, at the !atest, on March 24, 2015, three years after Everest and Con Edison directed Armienti to transfer the Casas file to Heidell and notified Armienti that Heidell would be taking over the defense of Con Edison in the Casas Action. Armienti further argues that a breakdown in the relationship of trust and confidence between Con Edison and Armienti is demonstrated by the two letters from Con Edison’s in-house counsel to Armienti in December of 2014, which letters requested all documents regarding the alleged acts constituting legal malpractice in this action, and challenged the propriety of Armienti’s discontinuance of the third-party action against Nelson in 2005. In opposition, Con Edison argues that Armienti’ s representation of Con Edison for purposes of the continuous representation doctrine continued until the execution of their Consent to Change Attorneys on April 13, 2015 (Complaint,

In a given case, the Consent to Change Attorney may reflect the erid date of an attorneyclient relationship, in the absence of other evidence that establishes an earlier date (see Louzoun v. Kroll Moss & Kroll, LLP, 113 A.D~3d at 602, 979 N.Y.S.2d 94 [2d Dept 2014]). While, “from the standpoint of adverse parties, counsel’s authority as an attorney of record in a civil action continues unabated until the [attorney’s] withdrawal, substitution, or discharge is formalized” in accordance with CPLR 321, “[a ]n affirmative discharge of an attorney by the client is immediate” (Farage v Ehrenberg, 124 AD3d 159, 165 [2d Dept 2014] [citations omitted]). Thus, where evidence establishes that a client affirmatively discharged their attorneys prior to the execution of a Consent to Change Attorney, the Consent to Change Attorney does not, in and of itself, serve as a basis to toll the statute of limitations (see Frenchman v Queller, Fisher, Dienst, Serrins, Washor & Kool, LLP, 24 Misc 3d 486, 504-05 [Sup Ct New York Cnty 2009] [holding notice of substitution, signed by defendant on December 17, 2004, did not, in and of itself, serve as a basis to toll the statute of limitations under the continuous representation doctrine, where plaintiffs own letter to defendant in August of 2004 made clear that defendant was being replaced by other counsel]).”

From Outlier to Center Stage

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Who Was In Charge Of Leasing The Storefront?

Building is being sued by NYC for a public nuisance.  While the case is being litigated, building owner rents the storefront to a club.  Operating a club seems to be part of the public nuisance. Did the landlord know that renting it out (again?) to a club was a no-no?  Was the economic incentive too large?  Was it the attorney’s fault that the lease did not include certain phrases?  Jadidian v Drucker   2019 NY Slip Op 03033  Decided on April 24, 2019  Appellate Division, Second Department doesn’t exactly come to a conclusion on this question.

“The plaintiffs, who own certain commercial property in Queens, retained the defendant, an attorney, from 2009 until November 2014 to handle, inter alia, all matters relating to leasing the premises. In addition, in 2013 the defendant represented the plaintiffs in connection with an action commenced by the City of New York to abate a public nuisance(hereinafter the nuisance action). In October 2013, while the nuisance action was pending against the plaintiffs, the defendant negotiated and drafted a lease of the premises to the Hive Sports Bar and Grill, Inc. (hereinafter the Hive). The defendant did not disclose to representatives of the Hive that the premises were the subject of the ongoing nuisance action.

In May 2014, the defendant negotiated a stipulation of settlement with the City on behalf of the plaintiffs, resolving the nuisance action. In the stipulation of settlement, the plaintiffs agreed, among other things, that the premises would not be used for any type of cabaret or club. In November 2014, the City obtained a court order enjoining the use of the premises for any reason and directing that the premises be closed until further order of the court. The Hive, which had been operating a cabaret/club on the premises, commenced an action against the plaintiffs to recover damages, inter alia, for breach of the lease agreement and fraud, alleging that the plaintiffs leased the premises to the Hive knowing of its intended operations. The Hive alleged that the plaintiffs intentionally withheld disclosure of the nuisance action, in which the City had sought to enjoin any use of the premises for a period of one year, and that the premises were shut down in relation to the settlement of the nuisance action, causing the Hive to sustain monetary damages.

The plaintiffs settled the action commenced by the Hive, and then commenced this action against the defendant to recover damages for his alleged legal malpractice in the negotiation and drafting of the lease agreement with the Hive. The defendant moved pursuant to CPLR 3211(a)(1) and (7) to dismiss the complaint. The Supreme Court denied the motion, and the [*2]defendant appeals.”

“Here, accepting the facts alleged in the complaint as true, and according the plaintiffs the benefit of every possible favorable inference, the complaint sufficiently alleges a cause of action to recover damages for legal malpractice. The complaint alleges that the defendant failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession by failing to account for the potential outcome of the nuisance action on the use and occupancy of the premises and to protect the plaintiffs’ interests in relation thereto. The complaint further alleges that the defendant’s negligence proximately caused the plaintiffs to sustain actual and ascertainable damages in lost rent and in settling the action brought by the Hive, and thus, validly states a cause of action to recover damages for legal malpractice (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 443; Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 847; Wolstencroft v Sassower, 124 AD2d 582). Accordingly, we agree with the Supreme Court’s denial of that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(7) to dismiss the complaint.”

    Who Was In Charge Of Leasing The Storefront?

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Near Privity in an Accounting Malpractice Setting

In Mamoon v Dot Net Inc.   2019 NY Slip Op 31053(U)  April 5, 2019 Supreme Court, New York County Docket Number: 652902/2013,  Judge Lucy Billings describes the intersection of privity and near privity in an accounting malpractice setting.

“Since accountants owe no duty to the public at large, “privity,” a contractual relationship or similar connection with a mutuality of interest between plaintiff and the Khan defendants, is a necessary predicate for the Khan defendants’ liability. Parrott v. Coopers & Lybrand. L.L.P., 95 N.Y.2d 479, 483-84 (2000) i State of Cal. Pub. Employees’ Retirement Sys. v. Shearman & Sterling, 95 N.Y.2d 427, 434 (2000); Ossining Union Free School Dist. v. Anderson LaRocca Anderson, 73 N.Y.2d 417, 419 (1989); Credit Alliance Corp. v. Arthur Andersen & Co., 65 N.Y.2d 536, 553-54 (1985). Consistent with the flexible concept of privity in different contexts, a party without contractual privity still may sustain a claim for malpractice if she maintained a relationship with the professional that was the functional equivalent of contractual privity. Alphas v. Smith, 147 A.D.3d 557, 558 (1st Dep’t 2017); Good Old Days Tavern. Inc. v. Zwirn, 259 A.D.2d 300, 300 (1st Dep’t 1999); Town Line Plaza Assocs. v. Contemporary Props., 223 A.D.2d 420, 420 (1st Dep’t 1996). See AG Capital Funding Partners. L.P. v. State St. Bank & Trust Co., 5 N.Y.3d 582, 595 (2005); Learning Annex. L.P. v. Blank Rome LLP, 106 A.D.3d 663, 663 (1st Dep’ t 2013) . ”

“Plaintiff demonstrates a direct professional relationship with a mutuality of interest, near contractual privity, with the Khan defendants. She testified, and they do not dispute, that she was the president and sole shareholder of the Khan defendants’ client, Dot Net, so that their work for Dot Net directly affected her livelihood. She further testified, continually referring to her amended complaint, that this effect was injurious, as their work rendered her personally liable for credit card, contractual, and tax debts accrued by Dot Net.  Rubin Aff. Ex. C, at 132, 149, Ex. H ~~ 17-19, 69; Alphas v. Smith, 147 A.D.3d at 558; Good Old Days Tavern. Inc. v. Zwirn, 259 A.D.2d at 300. Khan’s deposition testimony that, knowing plaintiff was the sole shareholder of Dot Net, he met and advised her on tax issues relating to the corporation on two separate occasions further demonstrates a direct professional relationship between plaintiff and the Khan defendants. Rubin Aff. Ex. A, at13-16. “

Near Privity in an Accounting Malpractice Setting

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Money is Missing, but it is not Deceit

Not every attorney problem can be shoehorned into a Judiciary Law § 487 format.  US Suite LLC v Baratta, Baratta & Aidala LLP 2019 NY Slip Op 02837  Decided on April 16, 2019  Appellate Division, First Department is an example of a partially successful plaintiff’s case which fails on JL § 487.

“Plaintiffs’ complaint here, as supplemented, sufficiently states a cause of action that defendants aided and abetted another person’s removal of funds belonging to plaintiffs, hid the funds in their escrow account, and used those funds to pay the other person’s personal and business expenses (see DDJ Mgt., LLC v Rhone Group L.L.C., 78 AD3d 442, 443 [1st Dept 2010]).

Plaintiffs have sufficiently pled a cause of action for an accounting (Matter of Schneider, 131 AD3d 175, 182 [2d Dept 2015], citing Matter of Vagionis, 217 AD2d 175, 177 [1st Dept 1995]; NY St Bar Assn Comm on Prof Ethics Op 532, *2 [1981]). Defendants’ assertion that they have provided an accounting is of no avail, as the document provided is an unsworn, unverified spreadsheet prepared by an unidentified person, without explanation.

Plaintiff did not adequately plead a claim under the Debtor and Creditor Law. The claim pursuant to the Judiciary Law § 487 must also be dismissed, as the alleged deceit did not occur during a pending judicial proceeding (see Jacobs v Kay, 50 AD3d 526, 527 [1st Dept 2008]).”

Money is Missing, but it is not Deceit

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Huge Numbers But Still Speculative in the Hudson Yards Case

Hudson Yards LLC v Segal  2019 NY Slip Op 30996(U)  April 5, 2019  Supreme Court, New York County Docket Number: 158606/2014 Judge: Andrea Masley describes the unraveling of the initial Hudson Yards real estate deal and the loss of $ 50M.  Even in NY these are big real estate numbers.  Legal Malpractice?  Supreme Court says it’s all too speculative.

“Hudson Yards LLC, an entity in which Singer served as managing member, purchased real estate in December 2005 and March 2006 (the premises). (NYSCEF Doc. No. 149at1f 15.) Hudson Yards LLC received a mortgage in the amount of $34,266,234 from Fortress Credit Corp (Fortress). (Id.) Singer guaranteed payment of the mortgage. (Id.; NYSCEF Doc. No. 153.) Hudson Yards LLC defaulted on  the payments and Fortress commenced a mortgage foreclosure action against Hudson Yards LLC and Singer, in his capacity as guarantor. (NYSCEF Doc. No. 149 at 16; NYSCEF Doc. No. 151.) On June 1, 2011, Fortress obtained a judgment of foreclosure and sale  (Id.) On September 7, 2011, Fortress purchased the premises at the sale with a winning bid of $2,500,000. (NYSCEF Doc. No. 162 at 6.) On December 4, 2013, this court (Kornreich, J) determined that the fair market value of the premises was $26,000,000, and subtracted that amount from the foreclosure judgment of $47,779.544.36 pursuant to the Real Property Actions and Proceedings Law. (Id. at 32; NYSCEF Doc. No. 169 at 6.) The resulting deficiency judgment in the amount of $21,779,544.36 was issued against Singer, who subsequently commenced this action. (Id.; NYSCEF Doc. No. 169 at 6.) Here, Singer alleges that the defendants, his prior legal counsel in connection with the foreclosure action, committed malpractice resulting in the deficiency judgment now recast as damages inclusive of accruing interest.  (NYSCEF Doc. No. 149 at~ 37, 38.) Defendant DCS is an attorney and member of defendant SSG. (NYSCEF Doc. No. 163 at~ 1.) Defendant OS is an attorney, the son of DCS, and an associate with SSG. (NYSCEF Doc. No. 210 at 15.) The gravamen of Singer’s malpractice claim is that defendants failed to exercise the ordinary, reasonable skill and knowledge commonly possessed by a member of the legal profession by failing to (1) memorialize an alleged agreement entered into by Singer and a Fortress employee, John Jergen, before the sale of the premises that would have prevented the deficiency judgment, (2) advise that this agreement, without memorialization, was unenforceable, (3) advise Singer to persuade the other members of Hudson Yards LLC to seek bankruptcy protection for the LLC, (4) advise Singer to bid or persuade other individuals to bid during the sale of the premises, and (5) advise Singer to seek an adjournment of the sale. (NYSCEF Doc. No. 149 at 1f 36; NYSCEF Doc. No. 206 at 1, 2,8, 9.) ”

“Based on this record, even if DCS, SSG or DS negligently represented Singer in connection with the foreclosure action and deficiency judgment, Singer fails to establish any issues of fact as to proximate cause, mandating a dismissal. (Brooks v Lewin, 21 AD3d 731, 734 [1st Dept 2005].) “Contentions underlying a claim for legal malpractice which are ‘couched in terms of gross speculations on future events and point to the speculative nature of plaintiffs’ claim,” are insufficient as a matter of law to establish that defendants’ negligence, if any, was the proximate cause of  plaintiffs’ injuries.” (Phillips Smith Specialty Retail Group II, LP., v Parker Chapin Flattau & Klimp/, LLP, 265 AD2d 208, 210 [1st Dept 1999].) Here, Singer’s argument is if defendants advised him that the agreement was unenforceable or memorialized the agreement, he would not have to pay the deficiency judgment because he would have (1) persuaded the other members of Hudson Yards LLC to seek bankruptcy protection, (2) sought and received an adjournment of the sale, and (3) advised Malekan, Schreiber and Westreich to purchase the premises. This argument is, quintessentially, couched in terms of gross speculation on future events because it assumes that the other members of Hudson Yards LLC would have agreed to seek bankruptcy protection or that bankruptcy protection would have relieved Singer of his obligations to pay the balance of a debt he personally guaranteed. It assumes that adjournment of the sale would have been granted and within that time, Fortress would have entered into an enforce.able agreement with Singer to forego the deficiency judgment. Lastly, it assumes that Malekan, Schreiber, Westreich, and Singer would have bid on the premises. (see generally Ladera Partners, LLC v. Goldberg, Scudieri & Lindenberg, P.C., 157 A.D.3d 467, 468 [1st Dept 2018] [“The legal malpractice cause of action is not properly supported by conclusory allegations and speculation that, but for defendants’ negligence, plaintiff would have been able to … outbid the other participants at the auction].) Simply stated, “the hypothetical course of events on which determination of damages would have to be based, involving the nature and timing of acts by plaintiff[] … other parties having interests … and the bankruptcy court, constitutes a chain of ‘gross speculation on future events.”‘ (Phillips-Smith Specialty Retail Group II, LP., v Parker Chapin Flattau & Klimp, LLP, 265 AD2d at 210.) “

Huge Numbers But Still Speculative in the Hudson Yards Case

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Excessive Claims Weeded Out for Plaintiff

Cascardo v Dratel  2019 NY Slip Op 02957 Decided on April 18, 2019 Appellate Division, First Department is a combination legal malpractice, excessive billing, fraud breach of fiduciary duty case which had several claims weeded out for this plaintiff.

“Plaintiff’s fraud claim should have been dismissed because the complaint did not sufficiently plead justifiable reliance upon defendant’s claim that it needed an additional $10,000 to continue its work on her lawsuit. In fact, the complaint specifically asserts that plaintiff knew the additional $10,000 legal fee demanded by defendant would not be used for her benefit, but he required it because other clients had not paid him. This admission negates an element of the fraud claim, that plaintiff justifiably relied on the defendant’s alleged misrepresentation that “[defendants] needed $10,000 to continue their work [on her case]” (see Shalam v KPMG LLP, 89 AD3d 155, 157-158 [1st Dept 2011]; Havell Capital Enhanced Mun. Income Fund, L.P. v Citibank, N.A., 84 AD3d 588, 589 [1st Dept 2011]).

The claim for excessive legal fees (and the related discussion in the complaint of defendants’ alleged breach of fiduciary duty based on the alleged overcharges) was correctly sustained. Plaintiff alleged that “[her] fee bore no rational relationship to the product delivered,” and detailed that, in exchange for the $25,000 fee, defendants produced only a draft complaint that was essentially identical to the one that she had presented to them (see Johnson v Proskauer Rose LLP, 129 AD3d 59, 70 [1st Dept 2015]). This claim is not duplicative of the legal malpractice claim, as plaintiff’s complaints regarding the over billing were not a direct challenge to the quality of the work but instead a claim that the fee paid bore no rational relationship to the work performed (see Ullmann-Schneider v Lacher & Lovell-Taylor, P.C., 121 AD3d 415, 416 [1st Dept 2014]; Johnson, 129 AD3d at 70). To the extent that the motion court read the pro se [*2]complaint as alleging a separate cause of action for breach of fiduciary duty, these allegations are subsumed in the cause of action for excessive attorney fees.”

Excessive Claims Weeded Out for Plaintiff

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Multitudo Imperitorum Perdit Curiam

This lovely 1500 year old phrase starts the case of Long Island Real Props., Ltd. v US Bank N.A.  2019 NY Slip Op 30954(U)  April 2, 2019  Supreme Court, Suffolk County  Docket Number: 621122/2017.   Judge James Hudson quotes the medieval writer Tribonian to the effect that “A great number of unskilled practitioners ruins a Court. (2 Inst. 219)  He then goes on to catalog the errors in a Long Island real estate law suit, weaving in a discussion of Judiciary Law§ 487, itself a 750 year old part of the common law.

“If it is shown that the frivolous behavior misled the Court and was offered for the purpose of deceiving same, the law provides a stem response. Judiciary Law §487 states in salient part that ” … An attorney or Counselor 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 guilty of a misdemeanor, and in addition to the punishment prescribed therefor by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action.” Liability for attorney deceit existed at New York common law before the first New York statute governing such behavior was enacted, and thus, is subject to the six year statute of limitation’s for actions for which no limitation is specifically provided by law (Melcher v. Greenberg Traurig,LLP, 23NY3d19, 988NYS2d101, 11NE3d174,reargumentdenied 23 NY3d 998, 992 NYS2d 763, 16 NE3d 1241 [2014]). Applicable case law interpreting Judiciary Law §487 demonstrates that the additional element “intent to deceive” is the factor levating it in opprobrium as compared with 22 NYCRR 130-1.1. (Tenore v. Kantrowitz, Go/dliamer & Graifman, P.C., 121 A.D.3d 775, 776, 994 N.Y.S.2d 171 (2″d Dept. 2014); see Lawrence Ripak Co., Inc. v. Gdanski, 143 AD3d 862, 39 NYS3d 223 [2d Dept 2016)). ”

Read the entire decision for Judge Hudson’s description of what he considers to be frivolous litigation.

  Multitudo Imperitorum Perdit Curiam

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A Strong Public Policy

Citing a “strong public policy to dispose of cases on their merits” the Appellate Division First Department reversed in Cornwall Warehousing, Inc. v Lerner  2019 NY Slip Op 02825 Decided on April 16, 2019.

“Plaintiffs demonstrated a reasonable excuse for their default (CPLR 5015[a][1]), based on law office failure, as detailed in the affirmation of their former counsel who miscalendared the motion (CPLR 2005; People’s United Bank v Latini Tuxedo Mgt., LLC, 95 AD3d 1285, 1286 [2d Dept 2012]). Plaintiffs then moved to vacate the order entered on their default, showing that they had a meritorious defense to the underlying motion to strike their complaint pursuant to CPLR 3126 (c), since they were not in default of any disclosure order (see John Quealy Irrevocable Life Ins. Trust v AXA Equit. Life Ins. Co., 151 AD3d 592, 593 [1st Dept 2017], lv dismissed 30 NY3d 1091 [2018]; DaimlerChrysler Ins. Co. v Seck, 82 AD3d 581, 582 [1st Dept 2011]). Plaintiffs also demonstrated a potentially meritorious cause of action by providing the affidavit of their president setting forth the basis of their legal malpractice claim (see Cheri Rest., Inc. v Eoche, 144 AD3d 578, 579-580 [1st Dept 2016]).

In light of the strong public policy of this State to dispose of cases on their merits, the court improvidently exercised its discretion in denying plaintiffs’ motion to vacate the order entered on default (DaimlerChrysler Ins. Co. v Seck, 82 AD3d at 582; see Chelli v Kelly Group, P.C., 63 AD3d 632 [1st Dept 2009]).”

A Strong Public Policy

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A Limited Retainer That Worked

Professionals take on work, and more specifically responsibilities.  Some come from the general tort requirement to act reasonably towards the public, some arise from contract.  Lam v 933 60th St. Realty Inc.    2019 NY Slip Op 30707(U) March 20, 2019 Supreme Court, Kings County Docket Number: 514453/2018 Judge: Debra Silber is an example of how a carefully drafted retainer agreement/contract can limit potential liability.

“This is an action for property damage allegedly caused to plaintiffs’ properties as a result of excavation work at 1759 Bay Ridge Parkway, which is adjacent to the plaintiffs’ properties. The complaint includes claims against all defendants sounding in negligence, private nuisance, trespass, negligent hiring, negligent supervision, negligent design, encroachment, declaratory judgment, injunctive relief against excavation and construction, injunctive relief seeking removal of trespassing and encroaching structures, and ten causes of action under various sections of article 28 of the Building Code, as well as a professional malpractice claim against the defendant architect, S M Tam Architect PLLC. Plaintiffs initially brought an order to show cause seeking a preliminary injunction, which included a temporary restraining order stopping all work at the site. On the initial return date, the order to show cause was adjourned for plaintiffs to provide an affidavit from an architect or engineer to substantiate the plaintiffs’ allegations of property damage and trespass. The temporary restraining order was modified to limit its scope to the back half of the construction site, which is closest to the plaintiffs’ properties, which are located on the other side of the block, that is, Block 6215. The request for a preliminary injunction was ultimately denied by the court, based upon plaintiffs’ failure to substantiate their claims of property damage and trespass. It should be noted that while one attorney brought this action and the order to show cause on behalf of all five plaintiffs, by the end of 2018, he only represented plaintiffs Lin and Chee and not the other three plaintiffs, who are now prose. ”

“Here, S M Tam Architect has come forward with documentary evidence that conclusively establishes a defense as a matter of law, under CPLR § 3211(a)(1), and has shown that the complaint fails to state a cause of action against it, under CPLR § Here, S M Tam Architect has come forward with documentary evidence that conclusively establishes a defense as a matter of law, under CPLR § 3211(a)(1), and has shown that the complaint fails to state a cause of action against it, under CPLR § 3211 (a)(7), and that the cross claims against it should be dismissed as well. S M Tam Architect has submitted its contract with the defendant property owner and an engagement letter between the defendant property owner and an engineer for the underpinning designs, as well as the affidavit of its principal, that show that S M Tam Architect had no contractual relationship with plaintiffs, nor any responsibility for the underpinning work, or for overseeing the excavation work, from which a duty in tort to a party not in privily of contract could arise. S M Tam Architect’s contract with the defendant owner expressly excluded “support of excavation application” and “piling design” and provides that SM Tam Architect “shall not have control or charge of, shall not supervise, and shall not be responsible for construction means, methods, techniques, sequences, or procedures, for safety precautions and programs in connection with Project, for failure of any contractor or  subcontractor to carry out its respective work in accordance with the contract documents.” Thus, S M Tam Architect has demonstrated that it had no contractual obligations concerning excavation or underpinning from which a duty to plaintiffs could have arisen (see Am. Sec. Ins. Co. v Church of God of St. Albans, 131 AD3d 903, 905 [2d Dept 2015] [architect’s “contractual obligations to the Church do not give rise to tort liability in favor of the plaintiffs, as his contract with the owner did not specifically impose any duties with respect to the excavation phase of the project and expressly stated that (architect) did not have control over, and was not responsible for, the construction means and methods or the safety precautions taken in connection with the work”]; 492 Kings Realty, LLC v 506 Kings, LLC, 105 AD3d 991, 994 [2d Dept 2013] [architect who was not retained to provide any services related to protection of adjacent property granted summary judgment]). Further, S M Tam Architect has shown that it was not in privily with plaintiffs, nor did it have a relationship with plaintiffs that was the functional equivalent of privily, from which a professional malpractice claim could arise (see Sutton Apartments Corp. v Bradhurst 100 Dev. LLC, 107 AD3d 646, 648 [2d Dept 2013] [“The tort claims against the architect fail for lack of contractual privily, or the functional equivalency of privily”]). “

A Limited Retainer That Worked

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Hard Money and Real Estate-A New York Story

A vintage cartoon (from the New Yorker?) has a bunch of New York people at a cocktail party, and the balloon for each of them simply says “Real Estate.” NY Prime Holding LLC v Nationstar Mtge., LLC  2019 NY Slip Op 30857(U)  March 27, 2019  Supreme Court, New York County  Docket Number: 157879/2018 Judge: John J. Kelley  is the story of a Harlem townhouse passed around in a game of musical real estate parcels.  A foreclosure action is filed on the very last day possible and ends the first round of the game.  The second round starts with a Judiciary Law § 487 claim.

“On October 8, 2008, Badrul Islam (hereinafter Badrul) purchased real property located at 280 West 127th Street in Manhattan (the property) from Jason Hutto Franklin and Jermaine Hutto. On that date, Badrul gave a mortgage on the property to Golden First Mortgage Corp. (GFMC) in consideration of a $972,000 loan. GFMC designated Mortgage Electronic Recording Systems, Inc. (MERS), as its nominee. Badrul allegedly defaulted in the repayment of the mortgage loan. On October 29, 2009, Federal National Mortgage Association (hereinafter Fannie Mae) commenced a foreclosure action (hereinafter the 2009 foreclosure action) against Badrul, Franklin, and Hutto, among others, in the Supreme Court, New York County, under Index No. 115280/09. MERS, however, did not transfer or assign the mortgage and underlying promissory note to Fannie Mae until June 5, 2010. By order dated October 3, 2010, the Supreme Court (Schlesinger, J.) denied Fannie Mae’s motion for summary judgment on the complaint in the 2009 foreclosure action, without prejudice to renewal upon proper papers showing that it had standing to prosecute the action.

Over the next several years, ownership of the property was transferred by deed on numerous occasions. On October 5, 2012, Badrul deeded the property to K&S Holding Trading Corp. On December 13, 2012, K&S Holding Trading Corp. deeded the property to Kitty Hawk Holdings, LLC. On March 13, 2014, Kitty Hawk Holdings, LLC, deeded the property to Jericho NY Prime Holding, LLC. On April 17, 2014, Jericho NY Prime Holding, LLC, deeded the property to the plaintiff, NYPH. During that period of time, the mortgage given by Badrul, then held by Fannie Mae, remained unsatisfied and remained a mortgage of record.

By order dated April 2, 2015, the Supreme Court (Schlesinger, J.) denied Fannie Mae’s renewed motion for summary judgment on the complaint in the 2009 foreclosure action, and dismissed the complaint in that action, without prejudice.

Inasmuch as the 2009 foreclosure action was commenced on October 29, 2009, thus accelerating Badrul’s obligations under the note and mortgage, Fannie Mae or its assignee had six years from that date, or until October 29, 2015, to recommence an action to foreclose on the subject mortgage. Thereafter, any person with an interest in the mortgaged property could maintain an action to cancel the mortgage (see generally RPAPL 1501 [4]; Milone v US Bank Natl. Assn., 164 AD3d 145, 156 [2d Dept 2018]; Mizrahi v US Bank, Natl. Assn., 156 AD3d 617[2d Dept 2017]; NMNT Realty Corp. v Knoxville 2012 Trust, 151 AD3d 1068, 1069-1070 [2d Dept 2017]). On October 27, 2015, Fannie Mae assigned the mortgage and note to the defendant Nationstar. On October 29, 2015, Nationstar, represented by the defendant law firm SOB, commenced a new foreclosure in the Supreme Court, New York County, under Index No. 452981 /15 (hereinafter the 2015 foreclosure action), naming NYPH and Badrul as defendants. ”

“In the meantime, on August 23, 2018, NYPH commenced the instant action to recover against SOB for violation of Judiciary Law § 487, against SOB, Nationstar, Provest, Oliver, Zienkowicz, and a person named Baharul Islam (Baharul) to recover for abuse of process and fraud, and for a declaration that the judgment entered in the 2015 foreclosure action is null and void. The gravamen of NYPH’s complaint is that Nationstar and SOB, as its attorneys, knew that Badrul did not live on Paulding Avenue in the Bronx, and that they purposely served the summons and complaint in the 2015 foreclosure action upon Baharul, an unrelated person with a similar name who did reside there. NYPH asserts that this service was a ruse to trick it and the court into believing that service had been made upon the correct person at the correct address, and that the defendants lied in order to secure a default judgment against Badrul, who actually never received notice of that action in time to defend it. NYPH thus contends that the judgment in the 2015 foreclosure action was secured by fraud and abuse of process, and that it has been damaged by virtue of being divested of its ownership interest in the property. ”

“The complaint fails to state a cause of action because it constitutes an improper collateral attack upon the judgment entered in the 2015 foreclosure action. Any claim that the judgment of foreclosure was obtained by fraud must be made the subject of a motion to vacate the judgment in that action, pursuant to CPLR 5015(a)(3), on the ground that it was secured by extrinsic fraud (see Country Wide Home Loans, Inc. v Harris, 136 AD3d 570 [1st Dept 2016) [judgment properly vacated where mortgagee knew that nonparty to foreclosure action had an interest in subject property, yet purposefully refused to name or join him in action]). “The remedy for fraud allegedly committed during the course of a legal proceeding must be exercised in that lawsuit by moving to vacate the civil judgment (CPLR 5015[a][3]), and not by another plenary action collaterally attacking that judgment” (St. Clement v Londa, 8 AD3d 89, 90 [1st Dept 2004); see Kai Lin v Department of Dentistry, Univ. of Rochester Med. Ctr., 120 AD3d 932 [4th Dept 2014); Parker & Waichman v Napoli, 29 AD3d 396, 399 [1st Dept 2006); Vinokur v Penny Lane Owners Corp., 269 AD2d 226 [1st Dept 2000)).

This rule applies to claims under Judiciary Law§ 487 as well. In Yalkowsky v Century Apts. Assocs. (215 AD2d 214, 215 [1st Dept 1995)), the Court dismissed a cause of action against an attorney who allegedly lied to the Civil Court to obtain a judgment in a landlord-tenant dispute that defeated a tenant’s constructive eviction defense. The Court explained that, even if it could be proven that the landlord’s attorney lied to the Civil Court, the “plaintiff’s remedy lies exclusively in that lawsuit itself, i.e., by moving pursuant to CPLR 5015 to vacate the civil judgment due to its fraudulent procurement, not a second plenary action collaterally attacking the judgment in the original action”” (id.; see Crouse v McVickar, 207 NY 213, 217 [1912)). ”

  Hard Money and Real Estate-A New York Story

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A Recent Judiciary Law 487 Case

JL§ 487, possibly the oldest part of the anglo-american common law, but for the Magna Carta, regularly comes up in legal malpractice settings.  Here, in Sammy v Haupel 2019 NY Slip Op 02372 Decided on March 27, 2019 the Appellate Division, Second Department affirms the dismissal of a claim against Wilson Elser and its top attorneys.

“The events underlying this action relate to the plaintiff’s purchase of real property in 2007. According to the plaintiff, Expedient Title, Inc. (hereinafter Expedient), as the authorized agent of First American Title Insurance Company (hereinafter First American), performed title closing services, including issuing title insurance to the plaintiff, for the plaintiff’s purchase of the property. Ultimately, the plaintiff made a claim on that title insurance policy, the claim was denied, and the plaintiff commenced an action against Expedient and First American (hereinafter the claim denial action).

The plaintiff subsequently commenced this action against Thomas W. Hyland, Tina [*2]Zerilli, and Wilson Elser Moskowitz Edelman & Dicker, LLP (hereinafter collectively the Wilson Elser defendants), who had represented Expedient in the claim denial action, and against Frank Haupel, Michael Schwarz, and DelBello Donnellan Weingarten Wise & Wiederkehr, LLP (hereinafter collectively the DelBello defendants), who had represented First American in the claim denial action. The plaintiff alleged that through their representation of First American and Expedient, the defendants had (1) violated Judiciary Law § 487, (2) committed fraud, (3) filed a fraudulent instrument, (4) committed tortious interference with a contract, and (5) offered a false instrument for filing in the first degree.”

“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” (Betz v Blatt, 160 AD3d 696, 698). “Judiciary Law § 487 focuses on the attorney’s intent to deceive, not the deceit’s success” (id. at 699 [internal quotation marks omitted]).

Here, the plaintiff did not state a cause of action alleging violations of Judiciary Law § 487. The plaintiff failed to set forth “with specificity,” either in her complaint or in her papers opposing the motions, how the defendants knew or should have known that she did not sign the release upon which they relied in asserting affirmative defenses on behalf of their clients in the claim denial action (id. at 698). Even if the plaintiff had sufficiently pleaded this allegation, she “failed to allege sufficient facts to establish that the[ ] defendants intended to deceive the court” or the plaintiff (Klein v Rieff, 135 AD3d 910, 912; see Ticketmaster Corp. v Lidsky, 245 AD2d 142, 143; Thomas v Chamberlain, D’Amanda, Oppenheimer & Greenfield, 115 AD2d 999, 999-1000). The plaintiff’s conclusory allegation that the defendants intended to deceive the court and the plaintiff in relying on the affirmative defense of release in the claim denial action was not sufficient to state a cause of action alleging a violation of Judiciary Law § 487 (see Betz v Blatt, 160 AD3d at 698; Kupersmith v Winged Foot Golf Club, Inc., 38 AD3d 847, 848). Accordingly, we agree with the Supreme Court’s determination granting those branches of the defendants’ motions which were pursuant to CPLR 3211(a)(7) to dismiss the cause of action alleging violations of Judiciary Law § 487 insofar as asserted against each of them.”

A Recent Judiciary Law 487 Case

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Strategic Choices and Legal Malpractice

Big cases and little cases alike are subject to the unique legal malpractice “strategic choice” doctrine as well as a speculation analysis.  Bison Capital Corporation v. Hunton & Williams, Supreme Court, New York County, Scarpulla, J. is today’s example.  “Bison and its president, Edwin E. Wells, Jr. (“Wells”) entered into a contract with nonparty ATP Oil and Gas Corporation (“ATP”) wherein Bison agreed to help secure a financing source for that company, which was facing imminent bankruptcy (“Contract”).”  Eventually, although ATP succeeded, it failed to pay Bison.  Bison retained Hunton & Williams to represent it against ATP.  After much litigation, during the appellate process communication and agreement broke down.  ATP filed for bankruptcy.

“The Legal Malpractice Cause of Action An action for legal malpractice requires proof: (1) of the negligence of the attorney; (2) that the negligence was a proximate cause of the loss sustained, and (3) of actual damages. See Excelsior Capitol LLC v. K&L Gates LLP, 138 A.D.3d 492, 492 (1st Dept. 2016) (internal quotation marks and citation omitted) lv denied 28 N.Y.3d 906 (2016). The complaint must sufficiently allege that the attorney did not exercise the “ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession.” Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 438, 442 (2007). “But for” the attorney’s actions, the plaintiff would have prevailed or not suffered ascertainable damages. Id. Allegations in support of a legal malpractice claim that are conclusory, speculative or contradicted by the documentary evidence will be dismissed, even if there was negligence. See Katz v. Essner, 136 A.D.3d 575, 576 (1st Dept. 2016). An attorney will not be found negligent for an error of judgment simply because it leads to an unsuccessful result. See Rosner v. Paley, 65 N.Y.2d 736 (1985).

Dissatisfaction with strategic choices does “not support a malpractice claim as a matter of law.” Bernstein v. Oppenheim & Co., 160 A.D.2d 428, 431 (1st Dept. 1990). Attorneys are not held to a rule of infallibility and will not be found liable for honest mistakes of judgment “where the proper course is open to reasonable doubt.” Id. at 430.

The burden is on the attorney to “offer a reasonable strategic explanation for the alleged negligence.” Ackerman v. Kesselman, 100 A.D.3d 577, 579 (2nd Dept. 2012)(internal quotation marks and citation omitted). It is only when there is no showing of reasonable decision-making that a “determination [of whether] a course of conduct constitutes malpractice require[ ] findings of fact.” Bernstein v. Oppenheim, 160 A.D.2d 428, 430 (1st Dept. 1990).

The overriding problem with Bison’s claims of malpractice based on defendant’s failure to produce an expert on junk bond “evergreen” fees is that, as stated by the district court and affirmed by the Second Circuit, Wells’ own October 15, 2004 letter to ATP articulated the terms of the parties’ agreement, which was that fees were owed for any transaction prior to the twelve-month period following termination of the agreement. Defendant decided in its professional judgment related to trial strategy that Wells, the drafter of the agreement and identified in paragraph three of the second amended complaint as a “financial advisor with a great deal of experience in oil and gas financing [who] had high-level contacts at financial institutions,” was able to testify sufficiently about junk bond financing and terms of the parties’ agreement. Bison has not sufficiently alleged that despite this letter, had defendant performed differently, it would have achieved a better result. See Warshaw Burstein Cohen Schlesinger & Kuh, LLP v. Longmire, 106 A.D.3d 536, 537 (1st Dept. 2013) lv dismissed 21 N.Y.3d 1059 (2013). In any event, if there was error, it is shielded by the attorney judgment rule. See Ackerman v. Kesselman, 100 A.D.3d at 579.”

    Strategic Choices and Legal Malpractice

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As Written or As Interpreted?

Cortland Apts., LLC v Simbari Design Architecture, PLLC  2019 NY Slip Op 50331(U) Decided on March 19, 2019 Supreme Court, Cortland County Guy, J. is a companion case to Universe Ave. LLC v. Simbari Design Architecture PLLC and raises an interesting question:  When a professional opines that work conforms to a statute is it negligence when the governmental authority charged with enforcing the statute offers a novel interpretation that upsets the prior understanding and determines that the work does not conform to the statue?

Here, the architect opined (placed a seal on the drawings confirming that they conformed to the building and zoning laws) and the City of Cortland then dithered over whether a variance was necessary.  First no, then yes, and then a court stepped in and found that although in the past no variance was required, now it was.

“Based on the undisputed facts, it is clear the City of Cortland historically interpreted its zoning code to not require variances for projects like the ones at issue in this case. That historic interpretation went into flux as these projects developed. The City indicated it would require a variance for the proposed work at 5 Monroe Heights, then reversed that position. Defendant submitted sealed drawings for the projects at both properties in May 2011; the City issued building permits for both projects. The City then issued stop work orders for the projects, leading to Plaintiff’s appeal and Article 78 proceeding that resulted in judicial interpretation of the code. The Zoning Board of Appeals eventually denied the requests for variances on both projects, requiring Plaintiff to undo construction he had already completed.

Plaintiff submitted the affidavit of Thomas A. Zimmerman, a licensed architect with more than forty years of experience in the field. Zimmerman opined that by affixing the seal to the construction drawings for both projects, Defendant represented that the drawings confirmed to “all applicable codes.” According to Zimmerman, Defendant, “in the exercise of due care in performing their professional duties, should have discovered, recognized, and advised their clients [on the code issue] well in advance of their preparation and sealing of construction drawings.” (Zimmerman Affidavit, paragraph 31).

Zimmerman stops short of indicating whether the professional standard of care required an architect in Defendant’s position to certify his drawings confirmed with applicable codes as written or applicable codes as interpreted by the local authorities. Neither party has addressed this open question in his respective papers. The Court finds that it is not a question that falls within the competence of a lay factfinder to evaluate or for the Court to ultimately decide on this summary judgment motion. See Unger, supra at 777; Mary Imogene Bassett Hosp. v Cannon Design, Inc., 127 AD3d 1377 (3d Dept 2015) (bench trial on issue of common law architectural standard of professional care, with expert testimony from both plaintiff and defendant); Town of [*7]Kinderhook v Vona, 136 AD3d 1202 (3d Dept 2016) (summary judgment in accounting malpractice case not granted where plaintiff and defendant both submitted expert affidavits) .

The Court finds Defendant met his initial burden for summary judgment on the professional malpractice claim, but granting all reasonable inferences in Plaintiff’s favor, Plaintiff has submitted sufficient proof in admissible form to establish the existence of material fact issues, requiring the denial of summary judgment.

Plaintiff’s negligence and negligent misrepresentation claims rely on the same set of facts as the contract and professional malpractice claims. Both claims are dismissed as duplicative of the other claims. See Garten v Shearman & Sterling LLP, 52 AD3d 207, 208 (1st Dept 2008).”

As Written or As Interpreted?

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Limited Retainers Are Permissible; Multiple Representations, Too.

The primary lesson to be learned from Salans LLP v VBH Props. S.R.L.  2019 NY Slip Op 02611 Decided on April 4, 2019 Appellate Division, First Department is that courts will deem a studied prediction on what would have happened if counsel had actually gone to court and made certain arguments is that they will almost always call it “speculation” and dismiss a legal malpractice case.

The second less to learn is that limited scope retainer agreements are permissible, but ambiguous ones are construed in favor of the client.  Lastly, representing the president and the company at the same time is permissible sometimes.

“Contrary to plaintiff’s argument, the scope of the work it performed under the 2008 retainer agreement, which included not only numerous contracts and negotiations but also employment litigation in the U.K., makes it at least reasonable to construe the agreement as authorizing plaintiff to represent Luxury and Hoeksema in the underlying loan action (see Shaw v Manufacturers Hanover Trust Co., 68 NY2d 172, 177 [1986] [where there is ambiguity in retention agreement, agreement is construed in favor of client]).

However, plaintiff demonstrated prima facie entitlement to judgment in the legal malpractice counterclaim by showing that defendants could not prove that but for plaintiff’s failure to appear at the TRO hearing the hearing court would have denied the TRO or set a shorter return date (see Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 272 [1st Dept 2004] [holding that to establish a claim for litigation malpractice the client “must meet the case within a case’ requirement, demonstrating that but for’ the attorney’s conduct the client would have prevailed in the underlying matter or would not have sustained any ascertainable damages”]). Defendants speculate that had plaintiff appeared at the TRO hearing, injunctive relief may have been denied or the hearing court may have adjourned the case to an earlier date. Such speculation is insufficient to sustain a claim for legal malpractice (see Freeman v Brecher, 155 AD3d 453, 453 [1st Dept 2017]; Brooks v Lewin, 21 AD3d 731, 734-735 [1st Dept 2005], lv denied 6 NY3d 713 [2006]).”

“Luxury and Hoeksema contend that there is a conflict of interest in plaintiff’s [*2]representation of both of them. However, as Hoeksema is the sole owner, director and officer of Luxury, there is no conflict (see Topic: Concurrent Representation of Corporation and Sole Shareholder, Director and Officer (NY St Bar Assn Comm on Prof Ethics Op 868 [May 31, 2011]). Moreover, Luxury and Hoeksema failed to show any injury caused by the alleged conflict.”

Limited Retainers Are Permissible; Multiple Representations, Too.

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Gone Like That!

Gengo v Storms   2019 NY Slip Op 02504  Decided on April 3, 2019 Appellate Division, Second Department displays the importance of the nuts and bolts of litigation.  Commencing the action and serving the defendant is the base of any litigation, and here, it went south very quickly.

“On October 23, 2016, the plaintiff commenced this action sounding in legal malpractice. In March 2017, the defendant moved, inter alia, pursuant to CPLR 3211(a)(8) to dismiss the complaint based on the failure to serve process after two defective attempts at service. The plaintiff opposed the motion and cross-moved, among other things, pursuant to CPLR 306-b to extend the plaintiff’s time to serve process. After a hearing to determine the validity of service, the Supreme Court granted the subject branch of the defendant’s motion and denied the subject branch of the plaintiff’s cross motion. The plaintiff appeals.

“An extension of time for service is a matter within the court’s discretion” (Leader v Maroney, Ponzini & Spencer, 97 NY2d 95, 101). Such a motion may be granted upon “good cause shown or in the interest of justice” (CPLR 306-b). ” Good cause’ and interest of justice’ are two separate and independent statutory standards” (Bumpus v New York City Tr. Auth., 66 AD3d 26, 31).

Both of the plaintiff’s attempts at service were defective. The plaintiff failed to establish that he exercised reasonably diligent efforts in attempting to effect proper service. Accordingly, he did not establish a basis for a “good cause” extension of time to serve process pursuant to CPLR 306-b (see Hobbins v North Star Orthopedics, PLLC, 148 AD3d 784, 787-788; Wilbyfont v New York Presbyt. Hosp., 131 AD3d 605, 607). Nor has the plaintiff set forth grounds for an extension of time in the interest of justice. Accordingly, we agree with the Supreme Court’s determination to grant that branch of the defendant’s motion which was to dismiss the complaint and to deny that branch of the plaintiff’s cross motion which was to extend the time to serve process.”

Gone Like That!

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Architect Contracts and the Scope of Work

Scope of work is a term of art used by architects; it is similarly a term of art applied to architect contracts and the potential for professional malpractice claims against them.  University Ave., LLC v Simbari Design Architecture, PLLC  2019 NY Slip Op 50330(U)  Decided on March 19, 2019  Supreme Court, Cortland County  Guy, J. is a fine example.  What was the architect hired to do and what did he actually do?

”

The parties do not dispute certain material facts at issue in this summary judgment motion. Plaintiff is the owner and developer of commercial rental property located at 1344-1350 University Avenue in the City of Rochester. (Calabro Deposition at 16-17).[FN2] Plaintiff’s principal is Christopher J. Calabro, who also owns and operates, through other LLCs, commercial and residential rental properties in at least Monroe and Cortland Counties. At the time of the events involved in this lawsuit, Defendant Simbari Design Architecture, PLLC, an architecture firm of which Defendant Thomas J. Simbari is the principal, was a tenant in Plaintiff’s University [*2]Avenue property. (Calabro Deposition at 16, 30).

In late March 2009, Syracuse Behavioral Health (SBH) expressed an interest in leasing a portion of the space in the University Avenue property. (Calabro Deposition at 311). By the end of that month, Plaintiff and Defendant had entered into an hourly agreement for Defendant to perform, on an as-needed basis, architectural services and design build-out services for the proposed SBH space. (Calabro Deposition at 381-382; 422-423). Plaintiff and Defendant both attended an initial project meeting with SBH on April 3, 2009, where it was clear that SBH needed to occupy the space, if leased, as soon as possible after October 1, 2009. (Simbari Deposition at 681-682; 696-697).

From April through November of 2009, Defendant completed floor plan sketches, preliminary drawings and revisions of those drawings relating to the project. (Simbari Deposition at 744-788, 792-793, 813-816, 821-828). Defendant sent Plaintiff and SBH an initial floor plan on April 17, 2019 and a fee estimate worksheet dated April 24, 2009, to estimate Defendant’s total costs for preparing final construction drawings. (Simbari Deposition at 657, 731, 735-736; 770-771).”

“Some of the work undertaken by Plaintiff’s contractors in advance of delivery of the construction drawings and building permit was inconsistent with the construction drawings and therefore had to be redone. (Calabro Deposition at 372-375; 379-383, 386-388, 401-406). The construction drawings also identified certain fire safety construction requirements, which Plaintiff had not anticipated. (Calabro Deposition at 331-332, 340-341; 353-354, 366-368). In an email dated January 26, 2011, Plaintiff acknowledged to Defendant that the project ultimately cost $350,000, on the low end of the estimated range originally provided by Defendant. (Calabro Deposition at 414). Plaintiff now seeks recovery of the costs of the rework and the unanticipated fire code work. (Calabro Deposition at 406).”

“”A claim of professional negligence requires proof that there was a departure from the accepted standards of practice and that the departure was a proximate cause of the injury.” Kung v Zheng, 73 AD3d 862, 863 (2d Dept 2010). It is incumbent upon the plaintiff to present expert testimony to support allegations of malpractice, except where the alleged act of malpractice falls within the competence of a lay jury to evaluate. 530 East 89 Corp. v Unger, 43 NY2d 776, 777 (1977) (internal citations omitted).

The matter of Alvarez v Prospect Hospital is instructive for the outcome of this motion not only for the standard for summary judgment, as recited above, but also in how that standard is applied in the context of a malpractice action. In Alvarez, the defendant-physician’s motion for summary judgment on the plaintiff’s medical malpractice claim was supported by an attorney’s affirmation, hospital records, and the defendant’s deposition testimony. Alvarez, supra at 325. The Court of Appeals rejected Plaintiff’s position that a prima facie case for dismissing a malpractice claim requires an expert affidavit, holding that the “fact that defendant’s supporting proof was placed before the court by way of an attorney’s affirmation annexing deposition testimony and other proof rather than affidavits of fact on personal knowledge, is not fatal to the motion.” Id. (internal citations omitted).

In this case, Defendant has similarly established a prima facie case in support of his summary judgment motion on the malpractice claim through his deposition testimony and his attorney’s affirmation. The architectural services requested by Plaintiff — initially schematics and floor plans, and ultimately detailed construction drawings — were suitably performed by Defendant, as and when requested. As with Plaintiff’s contract claim, Defendant cannot be found to have failed to meet his professional responsibility by not performing services he was not contracted to do. Defendant’s professional duty is measured consistent with the scope of the services he was retained to perform. See, e.g., Greenhaven v Hutchcraft Associates, Inc., 463 N.E. 2d 283 (Ind. Ct. App. 1984); Sch. Bd. v Pierce Goodwin Alexander & Linville, 137 So.3d 1059 (Fla. 4th DCA 2014). In opposition, Plaintiff has offered only conclusory allegations, unsupported by a statement of expert opinion that Defendant did not fulfill his professional duty, required to support a finding of malpractice. Alvarez, supra, at 327. Defendant’s motion for summary judgment dismissing the malpractice claim is granted.

Plaintiff’s complaint also alleges a claim for negligence on the part of Defendant arising from the identical facts alleged to support the breach of contract and malpractice claims addressed above. The negligence claim, grounded on the same facts, is duplicative of the other claims and is also dismissed. See Garten v Shearman & Sterling LLP, 52 AD3d 207, 208 (1st Dept 2008).”

  Architect Contracts and the Scope of Work