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
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[ duplicative causes of action ]

…Court held that collateral estoppel (issue preclusion) barred a legal malpractice action

In Sang Seok Na v Schietroma, 2019 NY Slip Op 04017 [2d Dept May 22, 2019], court held that collateral estoppel (issue preclusion) barred a legal malpractice action, holding:

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 suffer 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 at 598, 79 N.Y.S.3d 636). To establish proximate causation, the plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the defendant attorney’s negligence (see Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d at 442, 835 N.Y.S.2d 534, 867 N.E.2d 385; Kluczka v. Lecci, 63 A.D.3d 796, 797, 880 N.Y.S.2d 698).

Here, the Schietroma defendants established their entitlement to summary judgment dismissing the complaint on the ground that this action was barred by the doctrine of collateral estoppel (see Karimian v. Time Equities, Inc., 164 A.D.3d 486, 489, 83 N.Y.S.3d 227). “ The doctrine of collateral estoppel, a narrower species of res judicata, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same ” (Ryan v. New York Tel. Co., 62 N.Y.2d 494, 500, 478 N.Y.S.2d 823, 467 N.E.2d 487). The doctrine of collateral estoppel applies when: “ (1) the issues in both proceedings are identical, (2) the issue in the prior proceeding was actually litigated and decided, (3) there was a full and fair opportunity to litigate in the prior proceeding, and (4) the issue previously litigated was necessary to support a valid and final judgment on the merits ” (Conason v. Megan Holding, LLC, 25 N.Y.3d 1, 17, 6 N.Y.S.3d 206, 29 N.E.3d 215 [internal quotation marks omitted] ).

In order for the plaintiff to recover damages for legal malpractice against the Schietroma defendants based on their alleged failure to advise him of a potential legal malpractice claim against S & M, the plaintiff must prove that he would have prevailed in a legal malpractice action against S & M, but for the Schietroma defendants’ negligence. In order for the plaintiff to prevail in a legal malpractice action against S & M, the plaintiff must prove that he would have prevailed in the Greyhound action, but for S & M’s negligence.

The issue of whether the plaintiff would have succeeded on the merits in the Greyhound action was raised, necessarily decided, and material in the first legal malpractice action, and the plaintiff had a full and fair opportunity to litigate the issue in that action (see Sang Seok NA v. Schietroma, 163 A.D.3d 597, 79 N.Y.S.3d 636). Thus, the Schietroma defendants established, as a matter of law, that their alleged negligence did not proximately cause the plaintiff’s damages by showing that the plaintiff would not have prevailed in a legal malpractice action against S & M, and that they were entitled to summary judgment dismissing the complaint based on the doctrine of collateral estoppel (see generally Lamberti v. Plaza Equities, LLC, 161 A.D.3d 841, 841–842, 73 N.Y.S.3d 901; Matter of Trump Vil. Apts. One Owner v. New York State Div. of Hous. & Community Renewal, 143 A.D.3d 996, 40 N.Y.S.3d 157). Accordingly, we agree with the Supreme Court’s determination to grant the Schietroma defendants’ motion for summary judgment dismissing the complaint.

R. A. Klass
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Standard on deciding motions to dismiss

In a decision reminding defendants of the standard on deciding motions to dismiss, the court in Jadidian v Drucker, 2019 NY Slip Op 03033 [2d Dept Apr. 24, 2019] held:

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 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 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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[ motions to dismiss ]

Order of Attachment / Slash and Burn

Somewhat gory staged photo of a man with clown makeup, sitting on the ground, holding a hatchet, with blood on his shirt. Illustrates a case study about an order of attachment

[Reader Advisory:
This case study begins with a graphic and possibly upsetting description of violent events leading up to a criminal case. Then, the narrative continues with a discussion of the accompanying civil case. If the reader prefers to begin with the discussion of the civil case, they may skip to the second heading “Order of Attachment.”]

He Drove from New York to Florida.

“Jeff” drove to his ex-wife, “Lauren”‘s Florida condominium and attacked her in her home. Jeff handcuffed Lauren’s arms and legs so she was unable to move. Then, Jeff repeatedly cut, beat, suffocated, threatened and tortured his ex-wife for over six hours. Throughout this ordeal, Jeff forced Lauren to answer intimate questions by threatening her with a knife he held up to her neck, putting tape over her mouth and suffocating her by putting a pillow over her face. Jeff referred to this as “phase one” of his plan. He threatened to do her more harm during “phase two” of his planned attack.

While being held against her will, Lauren continuously pled with Jeff for her life and safe release to no avail. Lauren’s son-in-law saw the ordeal as it was taking place because Jeff was broadcasting it online. He called the police, who arrested Jeff before “phase two” could take place and, luckily, before further harm could be done to Lauren.

In the criminal case, the jury rendered verdicts against Jeff, finding him guilty of aggravated battery with a deadly weapon; kidnapping; aggravated assault with a deadly weapon; and assault. Jeff was sentenced to 15 years in prison.

Order of Attachment

Lauren retained a personal injury attorney to sue Jeff in a civil action in New York for the intentional torts he committed against her. Jeff owned a couple of buildings in New York and a half-interest in the Florida condominium. The attorney hired Richard A. Klass, Your Court Street Lawyer, as special counsel to seek to ” attach ” Jeff’s properties to ensure that he wouldn’t sell, mortgage or dispose of them in order to evade payment of monetary damages to Lauren.

An ” Order of Attachment ” is a provisional remedy used by a judge to ensure that there will be assets and property belonging to the defendant to pay any prospective judgment to be awarded to the plaintiff after trial. The operative rule, CPLR 6201, provides, in relevant part:

An order of attachment may be granted in any action, except a matrimonial action, where the plaintiff has demanded and would be entitled, in whole or in part, or in the alternative, to a money judgment against one or more defendants, when:

3. the defendant, with intent to defraud his creditors or frustrate the enforcement of a judgment that might be rendered in plaintiff’s favor, has assigned, disposed of, encumbered or secreted property, or removed it from the state or is about to do any of these acts;

As held by the Second Department in Mineola Ford Sales Ltd. v Rapp, 242 AD2d 371, 371 [2d Dept 1997], ” In order to obtain an order of attachment under CPLR 6201(3), the plaintiff must demonstrate that the defendant has or is about to conceal his or her property in one or more of several enumerated ways, and has acted or will act with the intent to defraud his or her creditors, or to frustrate the enforcement of a judgment in favor of the plaintiff (see, Arzu v. Arzu, 190 A.D.2d 87, 91, 597 N.Y.S.2d 322; Societe Generale Alsacienne De Banque, Zurich v. Flemingdon Dev. Corp., 118 A.D.2d 769, 772, 500 N.Y.S.2d 278). The moving papers must contain evidentiary facts-as opposed to conclusions-proving the fraud (Societe Generale Alsacienne De Banque, Zurich v. Flemingdon Dev. Corp., supra; see also, Rothman v. Rogers, 221 A.D.2d 330, 633 N.Y.S.2d 361; Rosenthal v. Rochester Button Co., 148 A.D.2d 375, 376, 539 N.Y.S.2d 11). In addition to proving fraudulent intent, the plaintiff must also show probable success on the merits of the underlying action in order to obtain an order of attachment (see, CPLR 6212[a]; Societe Generale Alsacienne De Banque, Zurich v. Flemingdon Dev. Corp., supra; Computer Strategies v. Commodore Business Machs., 105 A.D.2d 167, 172, 483 N.Y.S.2d 716). “

In her request for the Order of Attachment, Lauren provided recordings of jailhouse telephone conversations between Jeff and another party which demonstrated that Jeff intended on quickly transferring his various real estate interests, seemingly to avoid a prospective judgment against him. The judge decided to issue the Order of Attachment in order to keep Jeff’s real estate in place to ensure that Lauren would have available assets from which to collect her potential judgment.

Out-of-State Property May Be Attached.

As to the Florida condominium unit jointly owned by Lauren and Jeff, the judge determined that he had jurisdiction to issue an injunction to prevent Jeff from disposing of his interest in it. While generally a New York State court has jurisdiction over only property located within the State, it can exercise jurisdiction over property in another state under certain circumstances. See, Gryphon Domestic VI, LLC v. APP International Finance Company, B.V., 41 AD3d 25 [1st Dept. 2007] (New York court can restrain transfers of property outside the state so long as it has jurisdiction over the transferor).

The defendant Was Deemed a New York Domiciliary.

Jeff made a request of the judge to dismiss the lawsuit against him, claiming that the court did not have jurisdiction over him because he was now considered a Florida resident (because he ‘resides’ in jail in Florida). This request was challenged by showing the judge that Jeff’s last residence before entering prison was New York.

In Farrell v Lautob Realty Corp., 204 AD2d 597, 598 [2d Dept 1994], the Second Department held that:

…it is long-established law in New York that a person does not involuntarily lose his domicile as a result of imprisonment. …As stated by the Court of Appeals: ” [A] patient or inmate of an institution does not gain or lose a residence or domicile, but retains the domicile he had when he entered the institution ” (Matter of Corr v Westchester County Dept. of Social Servs., 33 NY2d 111, 115).

Further, the fact that the prison is located in a different state from the defendant’s previous state of domicile is irrelevant to the above jurisdictional rule. See, Poucher v. Intercounty Appliance Corp., 336 F.Supp.2d 251, 253 (E.D.N.Y.2004) (” It is well-established that a prisoner does not acquire a new domicile when he is incarcerated in a state different from his previous domicile.”)

Notice of Attachment

The judge granted the Order of Attachment in favor of Lauren. This allowed a Notice of Attachment to be filed against each of Jeff’s properties. A Notice of Attachment is similar to a Notice of Pendency (Lis Pendens) in that it serves as notice to others that there is a pending lawsuit that may affect the ownership of real estate. Once the Order of Attachment was granted, the parties entered into a settlement agreement, where Jeff agreed to transfer to Lauren one of his buildings and his half-interest in the condominium.

Prior results do not guarantee a similar outcome.
Image at top of page: Shutterstock

R. A. Klass
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Be mindful of New York’s statute of limitations pertaining to legal malpractice actions

Soloway v Kane Kessler, PC, 168 AD3d 407 [1st Dept 2019] serves as a good reminder to be mindful of New York’s statute of limitations pertaining to legal malpractice actions.

“ The court correctly found the complaint time-barred under CPLR 202, New York’s “ borrowing statute, ” which requires a claim to be timely under both the New York limitations period and that of the jurisdiction where the claim is alleged to have arisen (Kat House Prods., LLC v Paul, Hastings, Janofsky & Walker, LLP, 71 AD3d 580 [1st Dept 2010]).

Plaintiff, a New Jersey resident, alleged legal malpractice in connection with defendants’ representation of him for numerous real estate transactions, a cause of action which has a three year statute of limitations in New York (CPLR 214 [6]), and a six year limitations period in New Jersey (NJ Stat Ann § 2A:14-1). The latest that the alleged malpractice could have occurred was February 7, 2013, the date set for closing on the last of the real estate matters. Because plaintiff commenced the action on October 28, 2016, more than three years later, it was correctly dismissed as untimely. “

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Defendant moving to dismiss an action must prove the merits of its case

Bakcheva v Law Offices of Stein & Assoc., 2019 NY Slip Op 00844 [2d Dept Feb. 6, 2019] is a good reminder that a defendant moving to dismiss an action must prove the merits of its case. The court held:

A plaintiff seeking to recover damages for legal malpractice must prove that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (see McCoy v. Feinman, 99 N.Y.2d 295, 301–302, 755 N.Y.S.2d 693, 785 N.E.2d 714; Biberaj v. Acocella, 120 A.D.3d 1285, 1286, 993 N.Y.S.2d 64). A defendant seeking summary judgment dismissing a legal malpractice cause of action has the burden of establishing prima facie that he or she did not fail to exercise such skill and knowledge, or that the claimed departure did not proximately cause the plaintiff to sustain damages (see Iannucci v. Kucker & Bruh, LLP, 161 A.D.3d 959, 960, 77 N.Y.S.3d 118; Betz v. Blatt, 160 A.D.3d 696, 698, 74 N.Y.S.3d 75). The defendant must affirmatively demonstrate the merits of a defense, rather than merely pointing out gaps in the plaintiff’s proof (see Iannucci v. Kucker & Bruh, LLP, 161 A.D.3d at 960, 77 N.Y.S.3d 118).

We agree with the Supreme Court that the defendants were not entitled to summary judgment dismissing the legal malpractice cause of action. Although the defendants established their prima facie entitlement to judgment as a matter of law, the plaintiff raised a triable issue of fact in opposition. Specifically, the plaintiff submitted evidence that she had informed the defendants, prior to the closing, that the main portion of the apartment was on the seventh floor of the building and that the apartment included a second level. According to the plaintiff, the defendants committed malpractice because they failed to recognize the illegality of the second level, since neither the certificate of occupancy nor the approved condominium offering plan authorized the existence of an eighth floor to the condominium.

R. A. Klass
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Outlining the scope of an attorney’s retainer agreement is important.

Outlining the scope of an attorney’s retainer agreement is important. This sets forth the nature of the work to be rendered by an attorney on behalf of his client. In Attallah v Milbank, Tweed, Hadley & McCloy, LLP, 2019 NY Slip Op 00583 [2d Dept Jan. 30, 2019], the court held:

An attorney may not be held liable for failing to act outside the scope of a retainer (see AmBase Corp. v. Davis Polk & Wardwell, 8 N.Y.3d 428, 834 N.Y.S.2d 705, 866 N.E.2d 1033). Therefore, since the defendant’s alleged failure to negotiate with the school, its alleged failure to commence litigation against the school, and its alleged failure to properly advise the plaintiff on the efficacy of a defamation action against nonschool parties fell outside the scope of the parties’ letter of engagement, dismissal of the cause of action alleging legal malpractice was warranted, pursuant to CPLR 3211(a)(1), on documentary evidence grounds.

R. A. Klass
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Appellate court reversed the court order dismissing the action on the law firm’s motion to dismiss.

In an action by a client against a law firm for legal malpractice, the appellate court reversed the court order dismissing the action on the law firm’s motion to dismiss. The court held:

“ To state a cause of action to recover damages for legal malpractice, a plaintiff must allege: (1) that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession; and (2) that the attorney’s breach of the duty proximately caused the plaintiff actual and ascertainable damages ” (Dempster v. Liotti, 86 A.D.3d 169, 176, 924 N.Y.S.2d 484 [internal quotation marks omitted]; see Leder v. Spiegel, 9 N.Y.3d 836, 837, 840 N.Y.S.2d 888, 872 N.E.2d 1194). Here, accepting the facts alleged in the complaint as true, and according the plaintiff the benefit of every possible favorable inference, the plaintiff stated a cause of action to recover damages for legal malpractice (see Tooma v. Grossbarth, 121 A.D.3d at 1095–1096, 995 N.Y.S.2d 593; Endless Ocean, LLC v. Twomey, Latham, Shea, Kelley, Dubin & Quartararo, 113 A.D.3d 587, 589, 979 N.Y.S.2d 84; Reynolds v. Picciano, 29 A.D.2d 1012, 1012, 289 N.Y.S.2d 436). The evidentiary submissions did not establish that a material fact alleged in the complaint is not a fact at all and that no significant dispute exists regarding it (see Bodden v. Kean, 86 A.D.3d at 526, 927 N.Y.S.2d 137). Contrary to the defendants’ contention, the plaintiff was entitled to commence this legal malpractice action even though the underlying personal injury action was still pending, as the legal malpractice action accrued, at the latest, in November 2014 (see Johnston v. Raskin, 193 A.D.2d 786, 787, 598 N.Y.S.2d 272).

Lopez v Lozner & Mastropietro, P.C., 166 AD3d 871 [2d Dept 2018]

 

R. A. Klass
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The court reporting agency is in the business of making stenographic records…

Stenotype machine illustrating article by Richard A. Klass, Esq. about  Stenographic (court reporting) Services

The court reporting agency is in the business of making stenographic records of depositions and proceedings in litigation. A law firm ordered the services of the court reporting agency’s stenographers to take down witnesses’ testimony in various personal injury and medical malpractice cases.

The law firm broke up and its partners agreed to close their firm, discharge its liabilities and settle all accounts. In their settlement of their dissolution, the partners agreed to remain liable for all debts, liabilities and other obligations of the firm; reimburse disbursements and expenses incurred by the firm; and be personally responsible for an obligation of the firm.

Unfortunately, the court reporting agency had not been paid for services rendered in some of the cases previously handled by the law firm. The agency retained Richard A. Klass, Your Court Street Lawyer, to collect on the unpaid invoices.

Attorneys Are Responsible for Stenographic Services:

At one time, there was a difference of opinion as to whether an attorney who orders a court reporter to record testimony at a deposition is liable for the charge. Some court decisions held that the attorney was merely an agent of a disclosed principal (client) and was not responsible and the client was liable to pay the bill. Other court decisions recognized that the attorney was the one ordering the services and the client had little to nothing to do with the decision, and it put a great burden on the court reporting company to pursue its bill against an unknown client. Ultimately, the New York State legislature resolved the matter by enacting a special law to cover payment of these charges.

According to General Business Law Section 399-cc, an attorney who orders or requests stenographic services is responsible to pay for such services:

Notwithstanding any other provision of law to the contrary, when an attorney of record orders or requests either orally or in writing that a stenographic record be made of any judicial proceeding, deposition, statement or interview of a party in a proceeding or of a witness related to such proceeding, it shall be the responsibility of such attorney to pay for the services and the costs of such record except where:

1. payment is otherwise provided by law or where the attorney is providing representation through a not-for-profit provider of criminal or civil legal services; or

2. the attorney expressly disclaims responsibility for payment of the stenographic service or record in writing at the time the attorney orders or requests that the record be made.

Based upon the above statute, the law firm could be held liable for the bill. However, knowing that the law firm was dissolved, it was crucial to collection to also sue the individual former partners.

Certification of Expenses in Personal Injury Cases:

By court rule, when a personal injury and medical malpractice action settles, the attorney must file an Office of Court Administration (“OCA”) Closing Statement, wherein he certify the expenses paid on behalf of his client. See, NY R A DIV 2 DEPT Section 691.20 (“13. Itemized statement of the amounts of expenses and disbursements paid or agreed to be paid to others for expert testimony, investigative or other services properly chargeable to the recovery of damages together with the name, address and reason for each payment”).

On a settled case, the court rule further creates a special account in which the moneys are to be held pending payment of the disbursements. See, NY R A DIV 2 DEPT Section 691.20(d) “Deposit of Collections; Notice. (1) Whenever an attorney, who has accepted a retainer or entered into an agreement as above referred to, shall collect any sum of money upon any such action, claim or proceeding, either by way of settlement or after a trial or hearing, he shall forthwith deposit the same in a special account in accordance with the provisions of Rule 1.15 of the Rules of Professional Conduct. Within 15 days after the receipt of any such sums he shall cause to be delivered personally to such client or sent by registered or certified mail, addressed to such client at the client’s last known address, a copy of the closing statement required by this section. At the same time the attorney shall pay or remit to the client the amount shown by such statement to be due the client, and he may then withdraw for himself the amount so claimed to be due him for compensation and disbursements.”

Discovery of OCA Closing Statements Sought:

It was alleged that the law firm previously settled some of the cases in which payment for the court reporting services was sought. Therefore, a lien existed upon any settlements to the extent that the bills were unpaid and enforcement could be pursued against the individuals. In responding to the individual attorneys’ motions to dismiss the lawsuit against them, it was urged that discovery be had in the collection case in order to seek the production of the OCA Closing Statements in those settled cases to ascertain whether the attorneys stated in them that all expenses of litigation, including the court reporting company’s bills, were paid. See, Cantor v Levine, 115 AD2d 453, 453 [2d Dept 1985] (“When knowledge of facts is necessary for a party to properly oppose a motion to dismiss, and those facts are within the sole knowledge or possession of the movant, discovery is sanctioned if it has been demonstrated that such facts may exist (CPLR 3211[d]; Cosmos Mason Supplies v. Lido Beach Assoc., 95 A.D.2d 818, 464 N.Y.S.2d 12).”).

Confronted with the opposition to their motions to dismiss, the former law firm and its individual partners agreed to settle the lawsuit and enter into an agreement to pay the court reporting agency for services rendered.

R. A. Klass
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…client’s allegations were previously addressed in a prior matter.

In Knox v Aronson, Mayefsky & Sloan, LLP, 2018 NY Slip Op 09030 [1st Dept Dec. 27, 2018], the court dismissed a legal malpractice case where the client’s allegations were previously addressed in a prior matter.  The court held:

Supreme Court properly dismissed plaintiff’s complaint as against FBK, since the only claim asserted, a legal malpractice claim, is barred by the doctrine of res judicata (see Matter of Hunter, 4 N.Y.3d 260, 269, 794 N.Y.S.2d 286, 827 N.E.2d 269 [2005] ).  Plaintiff’s legal malpractice claim is based on the same conduct that was the basis of the counterclaim previously dismissed by Supreme Court Westchester County.  Res judicata bars all claims “ arising out of the same transaction or series of transactions … even if based upon different theories or if seeking a different remedy ” (Jumax Assoc. v. 350 Cabrini Owners Corp., 110 A.D.3d 622, 623, 973 N.Y.S.2d 631 [1st Dept. 2013] [internal quotation marks omitted], lv denied 23 N.Y.3d 907, 2014 WL 2922240 [2014]).  Contrary to plaintiff’s contention, the dismissal in the Westchester action was on the merits.  The order addressed the merits of the counterclaim, dismissing it on the basis of the settlement and the custody decision in the matrimonial action (see Plaza PH2001 LLC v. Plaza Residential Owner LP, 98 A.D.3d 89, 98, 947 N.Y.S.2d 498 [1st Dept. 2012] ).

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