…issue of collateral estoppel concerning a matter previously litigated…

In Gobindram v Ruskin Moscou Faltischek, P.C., 175 AD3d 586, 589-91 [2d Dept 2019], the state court considered the issue of collateral estoppel concerning a matter previously litigated in the federal bankruptcy court. The court held:

Scales of justice

“The doctrine of in pari delicto mandates that the courts will not intercede to resolve a dispute between two wrongdoers” (Kirschner v. KPMG LLP, 15 N.Y.3d 446, 464, 912 N.Y.S.2d 508, 938 N.E.2d 941). “[T]he principle that a wrongdoer should not profit from his own misconduct is so strong in New York that … the defense applies even in difficult cases and should not be weakened by exceptions” (id. at 464, 912 N.Y.S.2d 508, 938 N.E.2d 941 [internal quotation marks omitted] ). “The defense requires intentional conduct on the part of the plaintiff” (Sacher v. Beacon Assoc. Mgt. Corp., 114 A.D.3d 655, 657, 980 N.Y.S.2d 121; see Kirschner v. KPMG LLP, 15 N.Y.3d at 474, 912 N.Y.S.2d 508, 938 N.E.2d 941).

Collateral estoppel precludes a party from relitigating in a subsequent action or proceeding an issue raised in a prior action or proceeding and decided against that party, whether or not the tribunals or causes of action are the same (see Buechel v. Bain, 97 N.Y.2d 295, 303, 740 N.Y.S.2d 252, 766 N.E.2d 914; Shifer v. Shifer, 165 A.D.3d 721, 723, 85 N.Y.S.3d 92). There must be an identity of issue which has necessarily been decided in the prior action and is decisive of the present action, and there must have been a full and fair opportunity to contest the decision now said to be controlling (see Buechel v. Bain, 97 N.Y.2d at 303–304, 740 N.Y.S.2d 252, 766 N.E.2d 914; Shifer v. Shifer, 165 A.D.3d at 723, 85 N.Y.S.3d 92).

Here, the federal courts in the plaintiff’s bankruptcy proceeding finally adjudicated a mixed issue of law and fact identical to that raised by the in pari delicto defense asserted by the defendants in the current legal malpractice action, i.e., the plaintiff’s culpability in connection with the filing of the inaccurate bankruptcy petition. Those courts found that the plaintiff knowingly and intentionally made a false and fraudulent statement under oath by swearing that he had read the SOFA and that it was true and correct, and that the plaintiff’s alleged reliance on the defendants to accurately prepare the bankruptcy submissions did not negate his fraudulent intent. These findings established that the plaintiff was in pari delicto with the defendants to the extent that he alleges they acted negligently in preparing and filing the inaccurate bankruptcy petition. Accordingly, we agree with the Supreme Court’s determination granting that branch of the defendants’ motion which was to dismiss so much of the legal malpractice cause of action as sought to recover damages for the defendants’ preparation and filing of the inaccurate bankruptcy petition based on the doctrines of collateral estoppel and in pari delicto.

However, we disagree with the Supreme Court’s determination granting that branch of the defendants’ motion which was to dismiss so much of the legal malpractice cause of action as sought to recover damages for the defendants’ failure to amend the bankruptcy petition. The findings of the federal courts regarding the knowing and fraudulent conduct on the plaintiff’s part related solely to the initial filing; they made no determination that the plaintiff acted knowingly and fraudulently in failing to file an amended petition. Accordingly, that part of the plaintiff’s legal malpractice cause of action is not subject to dismissal on the grounds of collateral estoppel and in pari delicto.

As an alternative ground for affirmance (see Parochial Bus Sys. v. Board of Educ. of City of N.Y., 60 N.Y.2d 539, 545–546, 470 N.Y.S.2d 564, 458 N.E.2d 1241), the defendants contend that the legal malpractice cause of action should have been dismissed in its entirety pursuant to CPLR 3211(a)(7), since the parties’ evidentiary submissions on the motion established that the plaintiff hired subsequent counsel who had ample opportunity to rectify their alleged error in this regard (see e.g. Perks v. Lauto & Garabedian, 306 A.D.2d 261, 262, 760 N.Y.S.2d 231). This contention lacks merit.

On a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), the court must “accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” (Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511; see Nonnon v. City of New York, 9 N.Y.3d 825, 827, 842 N.Y.S.2d 756, 874 N.E.2d 720). “When evidentiary material is considered, the criterion is whether the proponent of the pleading has a cause of action, not whether [she or] he has stated one, and, unless it has been shown that a material fact as claimed by the pleader to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it, … dismissal should not eventuate” (Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182, 372 N.E.2d 17).

Here, the record reveals that the plaintiff did not retain the services of new counsel until December 2011. By that time, the bankruptcy trustee had already noted inconsistencies in the petition and requested an accounting relating to the omitted tax refund transfers, and the plaintiff’s creditors had commenced the adversary proceeding. Giving the plaintiff the benefit of every favorable inference (see Leon v. Martinez, 84 N.Y.2d at 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511), this time line suggests that the defendants, not the subsequent attorney, represented the plaintiff at the time when a voluntary amendment to the petition could have significantly reduced the prospect of a finding that the plaintiff made a false and fraudulent statement in the bankruptcy petition (see In re Tully, 818 F.2d 106, 111 [1st Cir.]; Matter of Kilson, 83 B.R. 198, 203 [D. Conn.]). Accordingly, at this preliminary stage of the litigation, the defendants have failed to conclusively demonstrate that the plaintiff’s subsequent attorney had a sufficient opportunity to correct their alleged error in failing to amend the petition, such that they did not proximately cause any damages flowing from that error (see generally Tooma v. Grossbarth, 121 A.D.3d 1093, 1096, 995 N.Y.S.2d 593; Grant v. LaTrace, 119 A.D.3d 646, 647, 990 N.Y.S.2d 227).

We find unpersuasive the defendants’ additional alternative contention that the legal malpractice cause of action was properly dismissed pursuant to CPLR 3211(a)(3) because that cause of action belongs to the bankruptcy estate and the plaintiff lacked standing to assert it. “On a defendant’s motion to dismiss the complaint based upon the plaintiff’s alleged lack of standing, the burden is on the moving defendant to establish, prima facie, the plaintiff’s lack of standing” (BAC Home Loans Servicing, LP v. Rychik, 161 A.D.3d 924, 925, 77 N.Y.S.3d 522; see CPLR 3211[a][3]; MLB Sub I, LLC v. Bains, 148 A.D.3d 881, 881–882). “[T]he motion will be defeated if the plaintiff’s submissions raise a question of fact as to its standing” (U.S. Bank N.A. v. Clement, 163 A.D.3d 742, 743, 81 N.Y.S.3d 116 [internal quotation marks omitted]; see MLB Sub I, LLC v. Bains, 148 A.D.3d at 882, 50 N.Y.S.3d 410).

Here, in response to the defendants’ prima facie showing that the plaintiff’s legal malpractice cause of action was the property of the bankruptcy estate (see Wright v. Meyers & Spencer, LLP, 46 A.D.3d 805, 849 N.Y.S.2d 274; Williams v. Stein, 6 A.D.3d 197, 198, 775 N.Y.S.2d 255; In re Strada Design Assoc., Inc., 326 B.R. 229, 237–240 [S.D. N.Y.]), the plaintiff raised a question of fact as to whether the bankruptcy trustee had abandoned the cause of action in accordance with Bankruptcy Code (11 USC) § 554(a) and had authorized the plaintiff to pursue it. Accordingly, dismissal of the legal malpractice cause of action for lack of standing is not available at this juncture.

R. A. Klass
Your Court Street Lawyer

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Once someone has sued …and the case is dismissed…

Scales of justice illustrating article about legal malpractice.

Once someone has sued another and the case is dismissed, the plaintiff’s claim is barred or precluded. In Manko v Gabay, 175 AD3d 484 [2d Dept 2019], the court held:

The plaintiff subsequently commenced the instant action against, among others, the Gabay defendants, asserting causes of action against them, inter alia, to recover damages for legal malpractice and breach of fiduciary duty. The Gabay defendants moved, inter alia, pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against them. The Supreme Court granted that branch of the motion, and the plaintiff appeals.

We agree with the Supreme Court’s determination to grant that branch of the Gabay defendants’ motion which was pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against them as barred by the doctrine of res judicata, based upon the dismissal, on the merits, of the complaints insofar as asserted against them in the four prior actions. Under the doctrine of res judicata, or claim preclusion, “a valid final judgment bars future actions between the same parties on the same cause of action” (Parker v. Blauvelt Volunteer Fire Co., 93 N.Y.2d 343, 347, 690 N.Y.S.2d 478, 712 N.E.2d 647). “[O]nce a claim is brought to a 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” (O’Brien v. City of Syracuse, 54 N.Y.2d 353, 357, 445 N.Y.S.2d 687, 429 N.E.2d 1158).

This Court takes a “pragmatic approach” to determining what constitutes a single transaction or series of transactions for the purposes of res judicata (Coliseum Towers Assoc. v. County of Nassau, 217 A.D.2d 387, 390, 637 N.Y.S.2d 972). Thus, events are part of the same transaction or series of transactions where their “foundational facts” are related in “time, space, origin, or motivation,” where they “form a convenient trial unit,” and where “treatment [of the foundational facts] as a unit conforms to the parties’ expectations” (id. at 390–391, 637 N.Y.S.2d 972 [internal quotation marks omitted] ).

The doctrine of collateral estoppel, or issue preclusion, is “a component of the broader doctrine of res judicata which holds that, as to the parties in a litigation and those in privity with them, a judgment on the merits by a court of competent jurisdiction is conclusive of the issues of fact and questions of law necessarily decided therein in any subsequent action” ( *133 Gramatan Home Invs. Corp. v. Lopez, 46 N.Y.2d 481, 485, 414 N.Y.S.2d 308, 386 N.E.2d 1328). Collateral estoppel will bar relitigation of an issue where “the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action, and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action” (Parker v. Blauvelt Volunteer Fire Co., 93 N.Y.2d at 349, 690 N.Y.S.2d 478, 712 N.E.2d 647; see Jeffreys v. Griffin, 1 N.Y.3d 34, 39, 769 N.Y.S.2d 184, 801 N.E.2d 404; Pinnacle Consultants v. Leucadia Natl. Corp., 94 N.Y.2d 426, 432, 706 N.Y.S.2d 46, 727 N.E.2d 543).

Here, the complaints in the four prior actions commenced by the plaintiff against the Gabay defendants were all dismissed insofar as asserted against them on the merits pursuant to the order dated May 7, 2012. The claims asserted in the instant action arise from the same transaction or series of transactions that gave rise to the four prior actions, i.e., the legal assistance provided by Gabay to the plaintiff from November 2007 to December 2007. The majority of the facts alleged in the five complaints are nearly identical, with the only differences being additional causes of action asserted in this action and different entities named as defendants of which Gabay is a principal, differences which nonetheless relate “in time, space, origin [and] motivation” to the claims adjudicated in the four prior actions (Xiao Yang Chen v. Fischer, 6 N.Y.3d 94, 100, 810 N.Y.S.2d 96, 843 N.E.2d 723 [internal quotation marks omitted]; see Smith v. Russell Sage Coll., 54 N.Y.2d 185, 192–193, 445 N.Y.S.2d 68, 429 N.E.2d 746). Inasmuch as all issues related to the plaintiff’s claims sounding in simple legal malpractice were fully and finally decided in the four prior actions, they are barred by principles of res judicata and collateral estoppel (see Kret v. Brookdale Hosp. Med. Ctr., 61 N.Y.2d 861, 863, 473 N.Y.S.2d 970, 462 N.E.2d 147; see also Altamore v. Friedman, 193 A.D.2d 240, 244–245, 602 N.Y.S.2d 894). The plaintiff’s additional causes of action alleging, among other things, deprivation of constitutional rights and conspiracy “could have been raised in the prior litigation” and, consequently, are precluded by the doctrine of res judicata (Matter of Hunter, 4 N.Y.3d 260, 269, 794 N.Y.S.2d 286, 827 N.E.2d 269; see Rowley, Forrest, O’Donnell & Beaumont, P.C. v. Beechnut Nutrition Corp., 55 A.D.3d 982, 984, 865 N.Y.S.2d 390).

R. A. Klass
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Klass in the News: Sheriff’s Sales

Richard Klass quoted today on SFGate.com and Realtor.com…

“What Is a Sheriff’s Sale? Yes, Your Local Law Enforcement Is Involved”

“The homes included in these sales are in the foreclosure process, but a sheriff’s sale isn’t as cut-and-dry as it might seem.”

Kristine Gill, provided by REALTOR.COM

Published on SFGate.com 3:30 am PDT, Friday, October 4, 2019

“Home buyers are always looking for a bargain. But if you’re really looking to save some dough, consider a sheriff’s sale. As the name suggests, it’s a real estate sale that involves your local authorities….

“If the successful bidder fails to come up with the rest of the purchase price within the 30-day period, the deposit made on the property will be forfeited, says Richard Klass, an attorney in Brooklyn, NY. In that situation, the second-highest bidder will be given the chance to purchase the property….”

The following links will take you to the full article at:
SFGate.com and
at Realtor.com.

R. A. Klass
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Doctrine of judicial estoppel in the context of legal malpractice actions

In Borges v Placeres, 64 Misc 3d 92, 96 [App Term 2019], the court dealt with the doctrine of judicial estoppel in the context of legal malpractice actions.

We hold that the doctrine of judicial estoppel bars plaintiff from arguing such fundamentally inconsistent positions merely because his interests have now changed (see Molina v Faust Goetz Schenker & Blee, LLP, 230 F Supp 3d 279 [SD NY 2017] [under New York law, when a legal malpractice claim is assigned to a former litigation adversary, judicial estoppel precludes the assignee from taking a position in the legal malpractice case that contradicts the assignee’s position in the underlying case]). Courts in other jurisdictions have reached similar conclusions (see Alcman Servs. Corp. v Samuel H. Bullock, P.C., 925 F Supp 252 [D NJ 1996], affd 124 F3d 185 [3d Cir 1997]; Sandman v McGrath, 78 Mass App Ct 800, 943 NE2d 945 [2011]; see also Kracht v Perrin, Gartland & Doyle, 219 Cal App 3d 1019, 1024-1025, 268 Cal Rptr 637, 641 [1990] [“(A) malpractice suit filed by the former adversary is ‘fraught with illogic’ and unseemly arguments: In the former lawsuit (the plaintiff) judicially averred and proved she was entitled to recover against (the defendant); but in the (subsequent) malpractice lawsuit (the plaintiff) must judicially aver that, but for (the) attorney’s negligence, she was not entitled to have recovered against (the defendant). Reduced to its essence, (the plaintiff’s) argument in the malpractice action is ‘To the extent I was not entitled to recover, I am now entitled to recover’ ” (citation omitted)]).

Nor was Civil Court required to defer resolution of the judicial estoppel defense until the ensuing malpractice action. The doctrine of judicial estoppel is intended to prevent abuses of the judicial system (see D & L Holdings v Goldman Co., 287 AD2d 65, 71 [2001], lv denied 97 NY2d 611 [2002]), and is based on general considerations of the orderly administration of justice and regard for the dignity of judicial proceedings (see Environmental Concern v Larchwood Constr. Corp., 101 AD2d 591, 593 [1984]). Manifestly, to prevent an abuse of the judicial system, the doctrine may be invoked at this juncture to preclude plaintiff “from framing pleadings or adopting theories at war with a position taken in prior legal proceedings” (Kimco of N.Y. v Devon, 163 AD2d 573, 575 [1990], quoting Knight v Knight, 31 AD2d 267, 271 [1969], affd 25 NY2d 957 [1969]).

R. A. Klass
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Where former client sues for legal malpractice but previously filed for bankruptcy

Where the former client sues for legal malpractice but has previously filed for bankruptcy, there must be an evaluation as to whether the legal malpractice claim is part of the bankruptcy estate or if the former client may pursue the action, as held in Gobindram v Ruskin Moscou Faltischek, P.C., 2019 NY Slip Op 06190 [2d Dept Aug. 21, 2019]:

We find unpersuasive the defendants’ additional alternative contention that the legal malpractice cause of action was properly dismissed pursuant to CPLR 3211(a)(3) because that cause of action belongs to the bankruptcy estate and the plaintiff lacked standing to assert it. “ On a defendant’s motion to dismiss the complaint based upon the plaintiff’s alleged lack of standing, the burden is on the moving defendant to establish, prima facie, the plaintiff’s lack of standing ” (BAC Home Loans Servicing, LP v. Rychik, 161 A.D.3d 924, 925, 77 N.Y.S.3d 522; see CPLR 3211[a][3]; MLB Sub I, LLC v. Bains, 148 A.D.3d 881, 881–882). “ [T]he motion will be defeated if the plaintiff’s submissions raise a question of fact as to its standing ” (U.S. Bank N.A. v. Clement, 163 A.D.3d 742, 743, 81 N.Y.S.3d 116 [internal quotation marks omitted]; seeMLB Sub I, LLC v. Bains, 148 A.D.3d at 882, 50 N.Y.S.3d 410).

Here, in response to the defendants’ prima facie showing that the plaintiff’s legal malpractice cause of action was the property of the bankruptcy estate (seeWright v. Meyers & Spencer, LLP, 46 A.D.3d 805, 849 N.Y.S.2d 274; Williams v. Stein, 6 A.D.3d 197, 198, 775 N.Y.S.2d 255; In re Strada Design Assoc., Inc., 326 B.R. 229, 237–240 [S.D. N.Y.]), the plaintiff raised a question of fact as to whether the bankruptcy trustee had abandoned the cause of action in accordance with Bankruptcy Code (11 USC) § 554(a) and had authorized the plaintiff to pursue it. Accordingly, dismissal of the legal malpractice cause of action for lack of standing is not available at this juncture.

R. A. Klass
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If attorney has violated a disciplinary rule…

If an attorney has been determined to have violated a disciplinary rule, the client may seek to have the attorney’s fees forfeited. In Baugher v Cullen and Dykman, LLP, 173 AD3d 959 [2d Dept 2019], court held:

“ An attorney who violates a disciplinary rule may be discharged for cause and is not entitled to fees for any services rendered ” (Jay Deitz & Assoc. of Nassau County, Ltd. v. Breslow & Walker, LLP, 153 A.D.3d 503, 506, 59 N.Y.S.3d 443; seeMatter of Montgomery, 272 N.Y. 323, 326, 6 N.E.2d 40; Saint Annes Dev. Co. v. Batista, 165 A.D.3d 997, 998, 85 N.Y.S.3d 145; Doviak v. Finkelstein & Partners, LLP, 90 A.D.3d 696, 699, 934 N.Y.S.2d 467; Quinn v. Walsh, 18 A.D.3d 638, 795 N.Y.S.2d 647; Brill v. Friends World Coll., 133 A.D.2d 729, 520 N.Y.S.2d 160). A cause of action for forfeiture of legal fees based on an attorney’s discharge for cause due to ethical violations may be maintained independent of a cause of action alleging legal malpractice or breach of fiduciary duty, and does not require proof or allegations of damages (seeJay Deitz & Assoc. of Nassau County, Ltd. v. Breslow & Walker, LLP, 153 A.D.3d at 506, 59 N.Y.S.3d 443; Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d 1, 865 N.Y.S.2d 14).

R. A. Klass
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…the client must prove that he sustained damages….

Once the defendant-law firm has moved for summary judgment to dismiss the complaint, the client must prove that he sustained damages. See, Nill v Schneider, 173 AD3d 753 [2d Dept 2019]:

A plaintiff in an action alleging legal malpractice must prove that the defendant attorney’s failure to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession 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; Sang Seok NA v. Schietroma, 163 A.D.3d 597, 598, 79 N.Y.S.3d 636). “ An attorney’s conduct or inaction is the proximate cause of a plaintiff’s damages if but for the attorney’s negligence, the plaintiff would have succeeded on the merits of the underlying action, or would not have sustained actual and ascertainable damages ” (Nomura Asset Capital Corp. v. Cadwalader, Wickersham & Taft LLP, 26 N.Y.3d 40, 50, 19 N.Y.S.3d 488, 41 N.E.3d 353 [citation and internal quotation marks omitted]; see Richmond Holdings, LLC v. David S. Frankel, P.C., 150 A.D.3d 1168, 1168, 52 N.Y.S.3d 672).

“ It is a defendant’s burden, when it is the party moving for summary judgment, to demonstrate affirmatively the merits of a defense, which cannot be sustained by pointing out gaps in the plaintiff’s proof ” (Quantum Corporate Funding, Ltd. v. Ellis, 126 A.D.3d 866, 871, 6 N.Y.S.3d 255). Once a defendant makes a prima facie showing, the burden shifts to the plaintiff to raise a triable issue of fact (see Iannucci v. Kucker & Bruh, LLP, 161 A.D.3d 959, 960, 77 N.Y.S.3d 118; Valley Ventures, LLC v. Joseph J. Haspel, PLLC, 102 A.D.3d 955, 956, 958 N.Y.S.2d 604).

Here, the defendant met her prima facie burden of demonstrating that the plaintiff did not sustain actual and ascertainable damages proximately caused by the defendant’s alleged negligent representation (see Harris v. Barbera, 163 A.D.3d 534, 536, 79 N.Y.S.3d 643; Panos v. Eisen, 160 A.D.3d 759, 760, 75 N.Y.S.3d 69; Kaloakas Mgt. Corp. v. Lawrence & Walsh, P.C., 157 A.D.3d at 779, 66 N.Y.S.3d 897). The evidentiary submissions established that the proximate cause of the plaintiff’s damages was the occurrence of a tree falling on the subject property during Hurricane Sandy, and not any claimed failure on the part of the defendant to discover, prior to the closing, any alleged discrepancy between the certificate of existing use and the 2007 survey of the subject property (see Excelsior Capitol LLC v. K & L Gates LLP, 138 A.D.3d 492, 492, 29 N.Y.S.3d 320; cf. Esposito v. Noto, 132 A.D.3d 944, 946, 19 N.Y.S.3d 300). In opposition, the plaintiff failed to raise a triable issue of fact. Accordingly, we agree with the Supreme Court’s determination granting the defendant’s cross motion for summary judgment dismissing the amended complaint insofar as asserted against her. For these same reasons, we agree with the court’s determination denying the plaintiff’s motion, inter alia, for summary judgment on the issue of liability.

R. A. Klass
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Legal malpractice case could not proceed since damages claim was speculative.

In Miami Capital, LLC v Hurwitz, 101 NYS3d 598 [1st Dept 2019], the court determined that the client’s legal malpractice case could not proceed since the damages claim was speculative, holding:

Defendant’s motion was properly granted because while plaintiff anticipates that it could be subject to a rescission claim at some point in the future, such alleged damages are purely speculative and not yet ripe. Since damages in a legal malpractice case 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 [1990] ), having failed to plead actual damages, plaintiff’s complaint fails to state a claim (see 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]; Lavanant v. General Acc. Ins. Co. of Am., 212 A.D.2d 450, 622 N.Y.S.2d 726 [1st Dept. 1995] ).

R. A. Klass
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Court denied the law firm’s motion to dismiss

In Jadidian v Drucker, 171 AD3d 1146, 1147-48 [2d Dept 2019], the court denied the law firm’s motion to dismiss the complaint, holding:

On a motion to dismiss pursuant to CPLR 3211(a)(7), the court must afford the pleading a liberal construction, accept all facts as alleged to be true, accord the plaintiff the benefit of every favorable inference, and determine only whether the *1148 facts as alleged fit within any cognizable legal theory (see CPLR 3026; Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511; Santaiti v. Town of Ramapo, 162 A.D.3d 921, 924–925, 80 N.Y.S.3d 288; Berlin v. DeMarzo, 150 A.D.3d 1185, 52 N.Y.S.3d 878). A cause of action to recover damages for legal malpractice requires proof that the defendant “ 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 plaintiff to sustain actual and ascertainable damages (McCoy v. Feinman, 99 N.Y.2d 295, 301, 755 N.Y.S.2d 693, 785 N.E.2d 714 [internal quotation marks omitted]; see Dombrowski v. Bulson, 19 N.Y.3d 347, 350, 948 N.Y.S.2d 208, 971 N.E.2d 338; Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 438, 442, 835 N.Y.S.2d 534, 867 N.E.2d 385).

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 N.Y.3d at 443, 835 N.Y.S.2d 534, 867 N.E.2d 385; Bua v. Purcell & Ingrao, P.C., 99 A.D.3d 843, 847, 952 N.Y.S.2d 592; Wolstencroft v. Sassower, 124 A.D.2d 582, 507 N.Y.S.2d 728). 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.

Dismissal pursuant to CPLR 3211(a)(1) is warranted only if the documentary evidence “ utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law ” (Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190; see Kolchins v. Evolution Mkts., Inc., 31 N.Y.3d 100, 106, 73 N.Y.S.3d 519, 96 N.E.3d 784; Leon v. Martinez, 84 N.Y.2d at 88, 614 N.Y.S.2d 972, 638 N.E.2d 511). Here, the documentary evidence submitted by the defendant **76 failed to utterly refute the plaintiff’s factual allegations. Accordingly, we also agree with the Supreme Court’s denial of that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(1) to dismiss the complaint.

R. A. Klass
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Duplicative causes of action against an attorney

When a client alleges duplicative causes of action against an attorney based upon different theories of liability, the court can dismiss those duplicative causes of action.

“ To state a claim for breach of fiduciary duty, a plaintiff must allege the existence of a fiduciary relationship, misconduct by the other party, and damages directly caused by that party’s misconduct ” (Castellotti v Free, 138 AD3d 198, 209 [1st Dept 2016]). “ [A] fiduciary relationship arises between two persons when one of them is under a duty to act or give advice for the benefit of another upon matters within the scope of the relation ” (Oddo Asset Mgt. v Barclays Bank PLC, 19 NY3d 584, 593-594 [2012], rearg denied 19 NY3d 1065 [2012] [internal quotation marks and citation omitted]). The existence of a duty is essential and may not be imposed unilaterally (see Marmelstein v Kehillat New Hempstead: The Rav Aron Jofen Community Synagogue, 45 AD3d 33, 36-37 [1st Dept 2008], affd 11 NY3d 15 [2008]). Whether a fiduciary relationship exists involves a fact-specific inquiry (see EBC I, Inc. v Goldman Sachs & Co., 5 NY3d 11, 19 [2005]). A claim for breach of fiduciary duty also requires “ the violation of some duty due to an individual, which duty is a thing different from a mere contractual obligation ” (see Batas v Prudential Ins. Co. of Am., 281 AD2d 260, 264 [1st Dept 2001] [internal quotation marks and citation omitted]).

A breach of fiduciary duty claim is duplicative of a legal malpractice claim when both are based upon the same facts and seek the same damages (see Barrett v Goldstein, 161 AD3d 472, 473 [1st Dept 2018]; accord Cohen, 115 AD3d at 513). As applied herein, plaintiff has established that the fiduciary duty counterclaim is grounded upon the same facts as the legal malpractice counterclaim. Defendant has neither attempted to distinguish the two counterclaims nor addressed why the second counterclaim should not be dismissed.

Adam Leitman Bailey, P.C. v Pollack, 63 Misc 3d 1229(A) [Sup Ct 2019]

 

R. A. Klass
Your Court Street Lawyer

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