Underlying claim based upon speculation and could not be sustained

…claim based upon speculation…

In an action brought by a former client against his attorneys, the court determined that the complaint failed to state a cause of action. The court found that, while the complaint could be amended, the underlying claim was based upon speculation and could not be sustained. The court held,

“Nevertheless, the amended complaint must be dismissed, because plaintiff’s claim that, but for defendants’ negligence, he would have recovered the full $3 million that he was owed during the bankruptcy filed by nonparty Majestic Capital, Ltd., consists of “ gross speculations on future events ” (Sherwood Group v. Dornbush, Mensch, Mandelstam & Silverman, 191 A.D.2d 292, 294, 594 N.Y.S.2d 766 [1st Dept. 1993]; see also 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, 36 N.Y.S.3d 616, 56 N.E.3d 896 [2016]; Turk v. Angel, 293 A.D.2d 284, 740 N.Y.S.2d 50 [1st Dept. 2002], lv denied 100 N.Y.2d 510, 766 N.Y.S.2d 164, 798 N.E.2d 348 [2003] ).” Hickey v Kaufman, 156 AD3d 436 [1st Dept 2017].


– R. A. Klass
Your Court Street Lawyer

Dismissal of a legal malpractice action based upon documentary evidence

Where a defendant/law firm moves for dismissal of a legal malpractice action based upon documentary evidence, it must establish that the documents are a complete defense to the other action; otherwise, the motion will be denied and the action will be permitted to go forward.

The court stated in, Hershco v Gordon & Gordon, 155 AD3d 1007 [2d Dept 2017], “A motion to dismiss on the basis of CPLR 3211(a)(1) may be granted “only where 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 413 Throop, LLC v. Triumph, the Church of the New Age, 153 A.D.3d 1306, 1307, 61 N.Y.S.3d 307). On a motion to dismiss pursuant to CPLR 3211(a)(7), the court must accept the facts alleged in the complaint as true and afford the proponent the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see *39 Leon v. Martinez, 84 N.Y.2d 83, 87, 614 N.Y.S.2d 972, 638 N.E.2d 511; East Hampton Union Free School Dist. v. Sandpebble Bldrs., Inc., 66 A.D.3d 122, 125, 884 N.Y.S.2d 94, affd 16 N.Y.3d 775, 919 N.Y.S.2d 496, 944 N.E.2d 1135).”

– R. A. Klass
Your Court Street Lawyer

Alleged damages must be alleged with certainty

” …court emphasized that it isn’t enough to just allege damages, they must be alleged with certainty… “


In Heritage Partners LLC v Stroock & Stroock & Lavan LLP, 155 AD3d 561 [1st Dept 2017], the appellate court emphasized that it isn’t enough to just allege damages, they must be alleged with certainty and not based on speculation. The court stated:

Even if our decision in a prior action between the parties (Heritage Partners, LLC v. Stroock & Stroock & Lavan LLP, 133 A.D.3d 428, 19 N.Y.S.3d 511 [1st Dept.2015], lv. denied 27 N.Y.3d 904, 2016 WL 1692057 [2016] ) does not constitute res judicata barring the instant action (a question we need not address), the new complaint fails to state a cause of action for malpractice because it does not sufficiently allege that defendant’s negligence was the proximate cause of plaintiff’s damages. While the current complaint addresses many of the problems we noted in the prior appeal, it does not adequately address the difficulty of “obtain[ing] debtor-in-possession financing in a troubled economic climate” (Heritage Partners, LLC v. Stroock & Stroock & Lavan LLP, 133 A.D.3d at 429, 19 N.Y.S.3d 511). Plaintiffs allege that “any funding required to facilitate a bankruptcy plan would have been secured through the bankruptcy court’s issuance of a ‘superpriority lien’…. Plaintiffs’ over $71 million in equity cushion was more than sufficient to secure approval from a bankruptcy court for a superpriority lien for DIP Financing.” However, as defendants contend, it is conjecture that there would have a been a DIP lender *198 willing to finance plaintiffs’ reorganization even if the bankruptcy court gave it superpriority. Unlike In re Lake Michigan Beach Pottawattamie Resort LLC, 547 B.R. 899 (Bankr.N.D.Ill.2016), this is not a case where “the Debtor … offered to provide evidence … of lenders willing to refinance the Property and pay [the existing lender] in full” (id. at 908). Thus, like the allegations in the prior complaint, the allegations in the current complaint are “couched in terms of gross speculations on future events and point to the speculative nature of plaintiffs’ claim” (Heritage, 133 A.D.3d at 429, 19 N.Y.S.3d 511 [internal quotation marks omitted] ).

– R. A. Klass

Plaintiff claimed attorney malpracticed with regard to a settlement

In Freeman v Brecher, 2017 NY Slip Op 07949 [1st Dept Nov. 14, 2017], the plaintiff claimed that the attorney malpracticed with regard to a settlement. In affirming the dismissal of the case, the appellate court held that,

“Plaintiff’s claim for legal malpractice in connection with an underlying settlement fails to state a cause of action in the absence of allegations that the “settlement … was effectively compelled by the mistakes of [defendant] counsel” (Bernstein v. Oppenheim & Co., 160 A.D.2d 428, 430, 554 N.Y.S.2d 487 [1st Dept.1990] ) or the result of fraud or coercion (see Beattie v. Brown & Wood, 243 A.D.2d 395, 663 N.Y.S.2d 199 [1st Dept.1997] ). Plaintiff’s equivocal denial of knowledge of the terms of the settlement is flatly contradicted by the clear terms of the settlement agreement (see Bishop v. Maurer, 33 A.D.3d 497, 499, 823 N.Y.S.2d 366 [1st Dept.2006], affd. 9 N.Y.3d 910, 844 N.Y.S.2d 165, 875 N.E.2d 883 [2007] ). Additionally, plaintiff’s speculative and conclusory allegations of proximately caused damages cannot serve as a basis for a legal malpractice claim (see Pellegrino v. File, 291 A.D.2d 60, 63, 738 N.Y.S.2d 320 [1st Dept.2002], lv. denied 98 N.Y.2d 606, 746 N.Y.S.2d 456, 774 N.E.2d 221 [2002] ). Plaintiff’s cause of action for breach of fiduciary duty arising from the same conduct was correctly dismissed as duplicative of the legal malpractice claim (see Garnett v. Fox, Horan & Camerini, LLP, 82 A.D.3d 435, 436, 918 N.Y.S.2d 79 [1st Dept.2011]; InKine Pharm. Co. v. Coleman, 305 A.D.2d 151, 152, 759 N.Y.S.2d 62 [1st Dept.2003] ).”

– R. A. Klass

If attorney regularly invoices client and client doesn’t object, then court assumes “ account stated. ”

When an attorney has billed a client for legal services rendered, the attorney will presumably send the client bill at regular intervals. If the attorney does regularly invoice the client and the client doesn’t object, then the court can assume there is an “account stated.” This is what occurred in Glassman v Weinberg, 154 AD3d 407 [1st Dept 2017], where the court held:

Plaintiff made a prima facie showing of his entitlement to summary judgment on his account stated claim by providing documentary evidence of the invoices, and an affidavit stating that he sent the invoices on a monthly basis to defendant, and that defendant received the invoices and failed to object to the invoices until this litigation (see L.E.K. Consulting LLC v. Menlo Capital Group, LLC, 148 A.D.3d 527, 528, 52 N.Y.S.3d 1 [1st Dept.2017]; Morrison Cohen Singer & Weinstein, LLP v. Waters, 13 A.D.3d 51, 52, 786 N.Y.S.2d 155 [1st Dept.2004] ).

– R. A. Klass

When Lawyers Engage in a Tug-of-War

man and woman in a tug-of-war, illustrating article by Richard Klass about a law firm ’s charging lien

He was an associate at a law firm that handled cases involving workplace discrimination, including cases based upon age, disability, gender, race, religion and sexual orientation discrimination. The associate decided it was time for him to transition from the law firm to another firm in which he would become a partner. Some of the law firm’s clients whose cases were handled by the associate elected to transfer representation from the former firm to the associate’s new law firm.

Law Firm’s Charging Lien

When an attorney commences a lawsuit or appears in a lawsuit, he is deemed the “attorney of record” in the case. One of the ramifications of being the attorney of record is that the attorney has the right to maintain a “charging lien” on any recovery in the case. This right is derived both from longstanding common law and statutory law, codified in New York’s Judiciary Law Section 475, which provides:

§ 475. Attorney’s lien in action, special or other proceeding. From the commencement of an action, special or other proceeding in any court or before any state, municipal or federal department, except a department of labor, or the service of an answer containing a counterclaim, or the initiation of any means of alternative dispute resolution including, but not limited to, mediation or arbitration, or the provision of services in a settlement negotiation at any stage of the dispute, the attorney who appears for a party has a lien upon his or her client’s cause of action, claim or counterclaim, which attaches to a verdict, report, determination, decision, award, settlement, judgment or final order in his or her client’s favor, and the proceeds thereof in whatever hands they may come; and the lien cannot be affected by any settlement between the parties before or after judgment, final order or determination. The court upon the petition of the client or attorney may determine and enforce the lien.

Practically, the charging lien gives the attorney the right to collect his legal fees from any moneys recovered in the lawsuit, even once the attorney is no longer representing the client. This is based on the premise that when an attorney is dismissed without cause, he is entitled to a lien to secure payment of his reasonable fees and costs incurred prior to the date of substitution of counsel. See, Sequa Corp. v. GBJ Corp., 156 F.3d 136 [2 Cir. 1998].

Agreement to Determine the Amount of Lien

When a client discharges an attorney without cause, the attorney is entitled to recover compensation from the client measured by the fair and reasonable value of the services rendered whether that be more or less than the amount provided in the contract or retainer agreement (Matter of Montgomery, 272 NY 323 [1936\]). As between them, either can require that the compensation be a fixed dollar amount determined at the time of discharge on the basis of quantum meruit (Reubenbaum v. B. & H. Express, 6 AD2d 47 [1 Dept. 1958]) or, in the alternative, they may agree that the attorney, in lieu of a presently fixed dollar amount, will receive a contingent percentage fee determined either at the time of substitution or at the conclusion of the case. See, Lai Ling Cheng v Modansky Leasing Co., Inc., 73 NY2d 454 [1989].

In one of the cases which the associate took with him to his new law firm, the former firm retained Richard A. Klass, Esq., Your Court Street Lawyer, to enforce its charging lien. The two firms came to an agreement, which was so-ordered by the judge, that the former law firm maintained a charging lien against any recovery in the case and that the amount of that lien would be determined at the conclusion of the litigation (assuming there would be a recovery from the defendants).

Entitlement to Attorney’s Fees in Proportionate Contribution to Case

The workplace discrimination case settled and the net legal fee sat in escrow as per the attorneys’ agreement pending resolution of their division amongst the two law firms. Unfortunately, the two firms were unable to come to terms as to the percentage split and requested that the judge hold a hearing to determine the allocation of fees.

The judge granted the law firms’ request for a hearing on the issue of the charging lien. It was noted that the court’s determination would be centered on determining the proportionate contributions of both prior and substitute counsel, citing to the case of Mason v. City of New York, 2016 WL 2766652 [SDNY 2016]. As stated in Buchta v Union Endicott Cent. School Dist., 296 AD2d 688, 689–90 [3 Dept 2002], “In assessing each firm’s proportionate contribution, we focus on the time and labor spent by each, the actual work performed, the “difficulty of the questions involved, the skill required to handle the matter, the attorney’s skills and experience, [and] the effectiveness of counsel in bringing the matter to resolution.”

A hearing was held in which both the partner in the original law firm and the associate/partner in the new law firm testified as to the services rendered on behalf of the clients in the case. The prior law firm’s partner testified as to all of the intake and pre-litigation tasks performed before substitution of counsel, including compiling evidence; interviews of clients; review of vast collection of evidence including email communications, video recordings and audio recordings. The former associate testified as to all of the services he rendered both at his old and new firms. Unfortunately for the former firm, it was unable to produce contemporaneous time records for services rendered while the former associate was in its employ. Based upon the testimony of the attorneys and the documents produced at the hearing, the judge apportioned the net legal fee between the two law firms.

Practice Tip:

It is critical for attorneys to enter and keep time records for all time spent working on their cases. Contemporaneous time records are important if the attorney must file a lien or prove time spent on a case. Equally important, a law firm should ensure that its attorneys, paralegals and support staff submit their time records in case the firm needs to justify its fees on a case.

— Richard A. Klass, Esq.


©2017 Richard A. Klass.
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Richard Klass Selected for New York Super Lawyers List for Third Year in a Row.

Logo for Super Lawyers, part of Thomson Reuters, a research-driven rating service of outstanding lawyers. Richard A. Klass selected to the 2017 New York Metro Super Lawyers list.

We are pleased to announce that Richard A. Klass, has been selected to the 2017 New York Metro Super Lawyers list. This is an exclusive list, recognizing no more than five percent of attorneys in the New York Metro area.

Super Lawyers, part of Thomson Reuters, is a research-driven, peer influenced rating service of outstanding lawyers who have attained a high degree of peer recognition and professional achievement. Attorneys are selected from more than 70 practice areas and all firm sizes, assuring a credible and relevant annual list.

The annual selections are made using a patented multiphase process that includes:

  • Peer nominations
  • Independent research by Super Lawyers
  • Evaluations from a highly credentialed panel of attorneys

The objective of the Super Lawyers lists is to create a credible, comprehensive and diverse listing of outstanding attorneys to be used as a resource for both referring attorneys and consumers seeking legal counsel.

Super Lawyers is a registered trademark of Thomson Reuters.

For dismissal of action, attorney must definitively lay out the defense to every element of the cause of action.

When an attorney being sued for legal malpractice seeks the dismissal of the action, the attorney must ensure that the motion papers definitively lay out the defense to every element of the client’s cause of action. In Burbige v Siben & Ferber, 152 AD3d 641 [2d Dept 2017], the court denied the motion brought by the law firm, holding:…

[- R. A. Klass]

~ ~ ~

Here, contrary to the Supreme Court’s determination, the defendants failed to establish their prima facie entitlement to judgment as a matter of law dismissing the complaint. The defendants’ submissions in support of their motion for summary judgment did not establish, prima facie, that the plaintiff will be unable to prove at least one element of his legal malpractice claim (see Kempf v. Magida, 116 A.D.3d 736, 736, 982 N.Y.S.2d 916; Barnave v. Davis, 108 A.D.3d 582, 969 N.Y.S.2d 139; Alizio v. Feldman, 82 A.D.3d 804, 918 N.Y.S.2d 218). Furthermore, the defendants failed to establish, prima facie, that the plaintiff did not sustain “actual and ascertainable damages” as a result of the defendants’ alleged neglect of the underlying action (Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d at 442, 835 N.Y.S.2d 534, 867 N.E.2d 385; see Suydam v. O’Neill, 276 A.D.2d at 550, 714 N.Y.S.2d 686).

Issue: whether an attorney “continuously represented” his client.

The issue as to whether an attorney “continuously represented” his client in such a manner as to extend the statute of limitations to bring an action for legal malpractice created an issue of fact, as determined by the First Department in Cordero v. Koval, Retjig & Dean PLLC.

– R. A. Klass

~ ~ ~

Rolando Cordero, Respondent,


Koval Retjig & Dean PLLC et al., Appellants.

Supreme Court, Appellate Division, First Department, New York

113450/11, 3740

June 20, 2017

Rivkin Radler LLP, New York (Jonathan B. Bruno of counsel), for appellants.

Law Office of Steven C. Pepperman, New York (Steven C. Pepperman of counsel), for respondent.

Order, Supreme Court, New York County (Debra A. James, J.), entered March 21, 2016, which denied defendants’ motion for summary judgment dismissing the complaint alleging legal malpractice, unanimously affirmed, without costs.

The claim for malpractice accrued when defendants failed to timely file a notice of claim (see General Municipal Law § 50-e) upon the City of New York and the New York City Department of Transportation after plaintiff was allegedly injured in a fall from his motorcycle because he struck a defectively-placed construction plate in the road (see generally Glamm v Allen, 57 NY2d 87, 93 [1982]). However, the evidence raised triable issues whether the malpractice statute of limitations (CPLR 214 [6]) was tolled under the continuous representation doctrine. Mark Koval, an attorney formerly employed by defendant law firm, joined another law firm at or about the time plaintiff’s personal injury case was transferred to such new law firm. Defendants admit that plaintiff’s case was transferred to the new firm, and Koval does not deny having worked on the case at either the old or new firm (see generally Antoniu v Ahearn, 134 AD2d 151 [1st Dept 1987]; HNH Intl., Ltd. v Pryor Cashman Sherman & Flynn LLP, 63 AD3d 534, 535 [1st Dept 2009]). Although Koval claims he subsequently left the new firm and did not take plaintiff’s case with him, there is no evidence that plaintiff was ever informed of, or had *2 objective notice of, Koval’s departure such as to end the continuous representation circumstance and the tolling of the statute of limitations (see Shumsky v Eisenstein, 96 NY2d 164, 167-169, 170 [2001]). Concur—Sweeny, J.P., Richter, Andrias, Webber and Gesmer, JJ.

Copr. (C) 2017, Secretary of State, State of New York

Evidence provided by defendant-law firm…failed to conclusively establish its defense

In Prott v. Lewin & Baglio, LLP, the Second Department decided that the documentary evidence provided by the defendant-law firm in support of its motion to dismiss the legal malpractice action failed to conclusively establish its defense as a matter of law.

– R. A. Klass

~ ~ ~

Supreme Court of the State of New York Appellate Division: Second Judicial Department 2016-03968 DECISION & ORDER Jacinto Prott, respondent, v Lewin & Baglio, LLP, et al., appellants. (Index No. 9322/15) Carroll, McNulty & Kull, LLC, New York, NY (Robert Seigal of counsel), for appellants. Sacco & Fillas, LLP, Astoria, NY (Donald N. Rizzuto and Patricia R. Lynch of counsel), for respondent. In an action, inter alia, to recover damages for legal malpractice, the defendants appeal from an order of the Supreme Court, Queens County (Livote, J.), dated February 25, 2016, which denied their motion pursuant to CPLR 3211(a) to dismiss the complaint. ORDERED that the order is modified, on the law, by deleting the provision thereof denying that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the causes of action alleging breach of contract and negligence, and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed, without costs or disbursements. The plaintiff commenced this action against the defendants, inter alia, to recover damages for legal malpractice. The plaintiff alleged that, although he retained the defendants to prosecute an action on his behalf, the defendants failed to commence the action before the expiration of the applicable statute of limitations in December 2012. The defendants moved pursuant to CPLR 3211(a) to dismiss the complaint, and the Supreme Court denied the motion. “A motion pursuant to CPLR 3211(a)(1) to dismiss the complaint on the ground that the action is barred by documentary evidence may be granted only where the documentary evidence utterly refutes the plaintiff’s factual allegations, thereby conclusively establishing a defense as a matter of law” (Mawere v Landau, 130 AD3d 986, 987 [internal quotation marks omitted]; see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326). The evidence submitted in support of such motion must be “‘documentary’” or the motion must be denied (Fontanetta v John Doe 1, 73 AD3d 78, 84, quoting Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3211:10, at 22; see Cives Corp. v George A. Fuller Co., Inc., 97 AD3d 713, 714). In order for evidence submitted in support of a CPLR 3211(a)(1) motion to qualify as documentary evidence, it must be “unambiguous, authentic, and undeniable” (Granada Condominium III Assn. v Palomino, 78 AD3d 996, 996-997 [internal quotation marks omitted]). “[J]udicial records, as well as documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable, would qualify as documentary evidence in the proper case” (Fontanetta v John Doe 1, 73 AD3d at 84-85 [internal quotation marks omitted]). “Conversely, letters, emails, and affidavits fail to meet the requirements for documentary evidence” (25-01 Newkirk Ave., LLC v Everest Natl. Ins. Co., 127 AD3d 850, 851; see Attias v Costiera, 120 AD3d 1281, 1283; Cives Corp. v George A. Fuller Co., Inc., 97 AD3d at 714; Granada Condominium III Assn. v Palomino, 78 AD3d at 997; Fontanetta v John Doe 1, 73 AD3d at 86). Here, the evidence submitted by the defendants, which included a letter dated September 28, 2012, purporting to terminate the attorney-client relationship between the plaintiff and the defendants, did not constitute documentary evidence within the meaning of CPLR 3211(a)(1) and, in any event, failed to utterly refute the plaintiff’s factual allegations, thereby failing to conclusively establish a defense as a matter of law (see Mawere v Landau, 130 AD3d at 990; Lindsay v Pasternack Tilker Ziegler Walsh Stanton & Romano LLP, 129 AD3d 790, 792; 25-01 Newkirk Ave., LLC v Everest Natl. Ins. Co., 127 AD3d at 851; Louzoun v Kroll Moss & Kroll, LLP, 113 AD3d 600, 601-602). Therefore, the Supreme Court properly denied that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(1) to dismiss the legal malpractice cause of action. Furthermore, since the defendants’ evidence failed to establish that a material fact as claimed by the plaintiff, namely, the existence of an attorney-client relationship at the time of the alleged malpractice, was “not a fact at all” and that “no significant dispute exists regarding it” (Guggenheimer v Ginzburg, 43 NY2d 268, 275), the Supreme Court properly denied that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the legal malpractice cause of action (see Lindsay v Pasternack Tilker Ziegler Walsh Stanton & Romano LLP, 129 AD3d at 793). However, the causes of action alleging breach of contract and negligence are duplicative of the legal malpractice cause of action, since they arise from the same facts as those underlying the legal malpractice cause of action, and do not allege distinct damages (see Lewis, Brisbois, Bisgaard & Smith, LLP v Law Firm of Howard Mann, 141 AD3d 574, 576; Smith v Kaplan Belsky Ross Bartell, LLP, 126 AD3d 877, 879; Keness v Feldman, Kramer & Monaco, P.C., 105 AD3d 812, 813-814). Accordingly, the Supreme Court should have granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the causes of action alleging breach of contract and negligence. MASTRO, J.P., LEVENTHAL, HALL and SGROI, JJ., concur.