Judiciary Law Section 487

In an action involving Judiciary Law Section 487, the court considered the issue as to what type of matter fits into the definition in the statute, holding:

Contrary to the defendants’ contention, the cause of action alleging a violation of Judiciary Law Section 487 was not duplicative of the cause of action alleging legal malpractice. “ A violation of Judiciary Law Section 487 requires an intent to deceive, whereas a legal malpractice claim is based on negligent conduct ” (Moormann v Perini & Hoerger, 65 AD3d 1106, 1108 [2009] [citation omitted]; see Lauder v Goldhamer, 122 AD3d 908, 911 [2014]; Sabalza v Salgado, 85 AD3d 436, 438 [2011]).

Nevertheless, the Supreme Court should have granted that branch of the defendants’ motion which was for summary judgment dismissing the cause of action alleging a violation of Judiciary Law Section 487. A chronic extreme pattern of legal delinquency is not a basis for liability pursuant to Judiciary Law Section 487 (see Dupree v Voorhees, 102 AD3d 912, 913 [2013]). Further, the plaintiffs failed to allege sufficient facts demonstrating that the defendant attorneys had the “ intent to deceive the court or any party ” (Judiciary Law Section 487 [1]; see Schiller v Bender, Burrows & Rosenthal, LLP, 116 AD3d 756, 759 [2014]; Agostini v Sobol, 304 AD2d 395, 396 [2003]). Allegations regarding an act of deceit or intent to deceive must be stated with particularity (see CPLR 3016 [b]; Facebook, Inc. v DLA Piper LLP [US], 134 AD3d 610, 615 [2015]; Armstrong v Blank Rome LLP, 126 AD3d 427 [2015]; Putnam County Temple & Jewish Ctr., Inc. v Rhinebeck Sav. Bank, 87 AD3d 1118, 1120 [2011]). That the defendants commenced the underlying action on behalf of the plaintiffs and the plaintiffs failed to prevail in that action does not provide a basis for a cause of action alleging a violation of Judiciary Law Section 487 to recover the legal fees incurred.

Bill Birds, Inc. v Stein Law Firm, P.C., 164 AD3d 635, 637 [2d Dept 2018]

R. A. Klass
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A party must be mindful of the applicable statute of limitations

When bringing an action, a party must be mindful of the applicable statute of limitations.

Recently, the Second Department in King Tower Realty Corp. v G & G Funding Corp., 163 AD3d 541, 543 [2d Dept 2018] held:

“ ‘ On a motion to dismiss a cause of action pursuant to CPLR 3211 (a) (5) as barred by the applicable statute of limitations, a defendant must establish, prima facie, that the time within which to sue has expired. Once that showing has been made, the burden shifts to the plaintiff to raise a question of fact as to whether the statute of limitations has been tolled, an exception to the limitations period is applicable, or the plaintiff actually commenced the action within the applicable limitations period ’ ” (Quinn v McCabe, Collins, McGeough & Fowler, LLP, 138 AD3d 1085, 1085-1086 [2016], quoting Tsafatinos v Law Off. of Sanford F. Young, P.C., 121 AD3d 969, 969 [2014]; see Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d 733, 734-735 [2015]; Landow v Snow Becker Krauss, P.C., 111 AD3d 795, 796 [2013]). An action to recover damages for legal malpractice must be commenced within three years of accrual (see CPLR 214 [6]; McCoy v Feinman, 99 NY2d 295, 301 [2002]; Quinn v McCabe, Collins, McGeough & Fowler, LLP, 138 AD3d at 1086; Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d at 735; Farage v Ehrenberg, 124 AD3d 159, 163 [2014]; Landow v Snow Becker Krauss, P.C., 111 AD3d at 796). “ 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 NY2d at 301, quoting Ackerman v Price Waterhouse, 84 NY2d 535, 541 [1994]; see Farage v Ehrenberg, 124 AD3d at 164). “ In most cases, this accrual time is measured from the day an actionable injury occurs, ‘ even if the aggrieved party is then ignorant of the wrong or injury ’ ” (McCoy v Feinman, 99 NY2d at 301, quoting Ackerman v Price Waterhouse, 84 NY2d at 541). “ A cause of action to recover damages for legal malpractice accrues when the malpractice is committed, not when it is discovered ” (Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d at 735; see McCoy v Feinman, 99 NY2d at 301; Quinn v McCabe, Collins, McGeough & Fowler, LLP, 138 AD3d at 1086; Farage v Ehrenberg, 124 AD3d at 164; Landow v Snow Becker Krauss, P.C., 111 AD3d at 796). The continuous representation doctrine serves to toll the statute of limitations and render timely an otherwise time-barred cause of action for legal malpractice, but “ only where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim ” (McCoy v Feinman, 99 NY2d at 306; see Alizio v Ruskin Moscou Faltischek, P.C., 126 AD3d at 735).

R. A. Klass
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On a motion pursuant to CPLR 3211(a)(7) to dismiss for failure to state a cause of action…

In Garcia v Polsky, Shouldice & Rosen, P.C., 161 AD3d 828 [2d Dept 2018], the Second Department held that the law firm’s motion to dismiss its former client’s lawsuit for legal malpractice was properly denied by the Supreme Court.

” …On a motion pursuant to CPLR 3211(a)(7) to dismiss for failure to state a cause of action… “

“ On a motion pursuant to CPLR 3211(a)(7) to dismiss for failure to state a cause of action, the court must accept the facts alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory ” (Shah v. Exxis, Inc., 138 A.D.3d 970, 971, 31 N.Y.S.3d 512; see Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d at 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190; Leon v. Martinez, 84 N.Y.2d at 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511). “ In opposition to such a motion, a plaintiff may submit affidavits to remedy defects in the complaint and preserve inartfully pleaded, but potentially meritorious claims ” (Cron v. Hargro Fabrics, 91 N.Y.2d 362, 366, 670 N.Y.S.2d 973, 694 N.E.2d 56 [internal quotation marks omitted]; see Nilazra, Inc. v. Karakus, Inc., 136 A.D.3d 994, 995, 25 N.Y.S.3d 650). “ Where evidentiary material is submitted and considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion is not converted into one for summary judgment, the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one, and unless it has been shown that a material fact as claimed by the plaintiff 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 ” (Rabos v. R & R Bagels & Bakery, Inc., 100 A.D.3d 849, 851–852, 955 N.Y.S.2d 109; see Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 274–275, 401 N.Y.S.2d 182, 372 N.E.2d 17).

5   “ Whether the complaint will later survive a motion for summary judgment, *427 or whether the plaintiff will ultimately be able to prove its claims, of course, plays no part in the determination of a prediscovery CPLR 3211 motion to dismiss ” (Shaya B. Pac., LLC v. Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 A.D.3d 34, 38, 827 N.Y.S.2d 231; see EBC I, Inc. v. Goldman, Sachs & Co., 5 N.Y.3d 11, 19, 799 N.Y.S.2d 170, 832 N.E.2d 26).

6 7   “ In an action to recover damages for legal malpractice, a plaintiff must demonstrate that the attorney ‘failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession’ and that the attorney’s breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages ” (Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 438, 442, 835 N.Y.S.2d 534, 867 N.E.2d 385, quoting McCoy v. Feinman, 99 N.Y.2d 295, 301, 755 N.Y.S.2d 693, 785 N.E.2d 714). “ To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence ” (Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d at 442, 835 N.Y.S.2d 534, 867 N.E.2d 385).

8   Here, the law firm submitted documentary evidence in support of the motion establishing that its representation of the plaintiff was limited to his Workers’ Compensation claim. That submission did not utterly refute the plaintiff’s allegations, as augmented by his affidavit submitted in opposition to the motion, that the law firm gave him inaccurate legal advice. Accordingly, the Supreme Court properly denied that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(1) to dismiss the cause of action alleging legal malpractice insofar as asserted against the law firm.

Moreover, the complaint, as augmented by the plaintiff’s affidavit, sufficiently pleaded a cause of action to recover damages for legal malpractice against the law firm. The evidentiary submissions did not show that the material facts claimed by the plaintiff to be facts were not facts at all and that no significant dispute exists regarding them. Accordingly, the Supreme Court properly denied that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the cause of action alleging legal malpractice insofar as asserted against the law firm.

R. A. Klass
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Take it Outside: Enforcing an Arbitration Clause and Keeping the Case Out of Court

Referee separating two business men, illustrating article by Richard Klass Esq. about an arbitration clause in a contract

The company is well known for hosting seminars where attendees can learn the ins-and-outs of real estate investing through “ house flipping. ” House flipping involves purchasing a house for a low price, fixing it up and then reselling the house for a profit. The company has all attendees register for its seminars by paying fees and signing its registration agreement.

One of the attendees was dissatisfied with the information she received at the company’s seminar. She decided to sue in New York State Supreme Court for the return of all of her registration fees. The attendee alleged that the minimal “products and services” listed in the materials were “inherently of negligible worth” and “grossly disproportionate” to the money she paid for the seminar.

Arbitration Clause:

Registration Contract Provides for Arbitration

The contract at issue contained terms and conditions which required the resolution of all disputes between the seminar company and its registrants through arbitration. Specifically, the terms and conditions stated “[Seminar Company] and Primary Student all agree to resolve those disputes through binding arbitration or small claims court instead of in courts of general jurisdiction.” Despite the plaintiff’s protestations to the contrary, the complaint alleged a cause of action for breach of contract. Her allegation that there was a failure of consideration because there was negligible value in the seminar services provided by the defendant was in essence an allegation of a contract breach.

The company hired Richard A. Klass, Your Court Street Lawyer, to defend the lawsuit. The company filed a motion to dismiss the action because of the clause in the contract (which the attendee signed in order to register for the seminar) requiring arbitration of any disputes.

Arbitration of Disputes Is Heavily Favored by the Courts

New York State courts heavily favor the resolution of disputes through arbitration where the contracting parties agreed to arbitrate their claims. In this case, the contracts contained terms and conditions requiring the arbitration of disputes between the parties, with a particular process set forth in it.

The Second Department held, in Markowits v. Friedman, 144 AD3d 993, 996-997 [2 Dept. 2016], that “The Supreme Court properly granted that branch of the defendants’ motion which was to stay all remaining proceedings in the action and compel arbitration. Arbitration is a favored method of dispute resolution in New York (see Board of Educ. of Bloomfield Cent. School Dist. v. Christa Constr., 80 N.Y.2d 1031, 593 N.Y.S.2d 178, 608 N.E.2d 755; Matter of Weinrott [Carp], 32 N.Y.2d 190, 199, 344 N.Y.S.2d 848, 298 N.E.2d 42). The threshold issue of whether there is a valid agreement to arbitrate is for the courts (see Matter of Primex Intl. Corp. v. Wal–Mart Stores, 89 N.Y.2d 594, 598, 657 N.Y.S.2d 385, 679 N.E.2d 624; Matter of County of Rockland [Primiano Constr. Co.], 51 N.Y.2d 1, 6–8, 431 N.Y.S.2d 478, 409 N.E.2d 951). Once it is determined that the parties have agreed to arbitrate the subject matter in dispute, the court’s role has ended and it may not address the merits of the particular claims (see Matter of Praetorian Realty Corp. [Presidential Towers Residence], 40 N.Y.2d 897, 389 N.Y.S.2d 351, 357 N.E.2d 1006; Matter of Prinze [Jonas], 38 N.Y.2d 570, 577, 381 N.Y.S.2d 824, 345 N.E.2d 295; Brown v. Bussey, 245 A.D.2d 255, 666 N.Y.S.2d 15).”

Dissatisfaction with the Seminar Doesn’t Equate to Fraud

The complaint did not allege in any way that fraud was involved in inducing the attendee to enter into the contract; rather, she was merely dissatisfied with the information she received from the company at seminars. Even if she was to have alleged fraud, her claims would still have been subject to arbitration under the contract.

In Anderson Street Realty Corp. v. New Rochelle Revitalization LLC, 78 AD3d 972 [2 Dept. 2010], the Second Department held: “On the question of whether the instant dispute should be submitted to arbitration, in Matter of Weinrott (Carp ), 32 N.Y.2d 190, 196, 199, 344 N.Y.S.2d 848, 298 N.E.2d 42, the Court of Appeals ruled that an arbitration clause is generally separable from substantive provisions of a contract, so that an agreement to arbitrate is valid even if the substantive provisions of the contract are induced by fraud (id. at 198, 344 N.Y.S.2d 848, 298 N.E.2d 42). Thus, as a general rule, the issue of fraud in the inducement should be determined by the arbitrator, except where the arbitration clause specifically excludes fraud in the inducement from the issues to be determined by arbitration (see GAF Corp. v. Werner, 66 N.Y.2d 97, 105, 495 N.Y.S.2d 312, 485 N.E.2d 977, cert. denied 475 U.S. 1083, 106 S.Ct. 1463, 89 L.Ed.2d 720; Matter of Silverman [Benmor Coats ], 61 N.Y.2d 299, 308, 473 N.Y.S.2d 774, 461 N.E.2d 1261). The court further held in Anderson Street Realty Corp. v. New Rochelle Revitalization LLC, supra, that “The issue of fraud in the inducement affects the validity of the arbitration clause only when the fraud relates to the arbitration provision itself, or was “part of a grand scheme that permeated the entire contract” (Matter of Weinrott [Carp ], 32 N.Y.2d at 197, 344 N.Y.S.2d 848, 298 N.E.2d 42; see Jamaica Hosp. Med. Ctr. v. Oxford Health Plans [NY ], Inc., 58 A.D.3d 686, 871 N.Y.S.2d 665; Riverside Capital Advisors, Inc. v. Winchester Global Trust Co. Ltd., 21 A.D.3d 887, 800 N.Y.S.2d 754). To demonstrate that fraud permeated the entire contract, it must be established that the agreement was not the result of an arm’s length negotiation (see Nastasi v. Nastasi, 26 A.D.3d 32, 805 N.Y.S.2d 585), or the arbitration clause was inserted into the contract to accomplish a fraudulent scheme (see Utica Mut. Ins. Co. v. Gulf Ins. Co., 306 A.D.2d 877, 880, 762 N.Y.S.2d 730; Oberlander v. Fine Care, 108 A.D.2d 798, 485 N.Y.S.2d 313).”

The New York State Supreme Court justice held that the attendee’s lawsuit had to be dismissed because the arbitration clause of the contract was valid and enforceable. The attendee must now resort to filing a demand for arbitration pursuant to the contract.

Note: It is very common now for contracts between providers of consumer goods and services and consumers to include arbitration clauses. It is important to check for these clauses both before entering into the contract in the first instance and prior to commencement of litigation. While some consumer contract clauses may be stricken by a court as “against public policy,” many times arbitration clauses are upheld.

R. A. Klass
Your Court Street Lawyer

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With limited exceptions, party seeking to sue an attorney for legal malpractice must prove he was a client.

With very limited exceptions, a party seeking to sue an attorney for legal malpractice must prove that he was the client of the attorney.

In Barrett v Goldstein, 161 AD3d 472, 473 [1st Dept 2018], the court dismissed the case, finding that the attorney-defendant was not the plaintiff’s attorney concerning drafting an agreement. The court specifically held:

“ The documentary evidence conclusively establishes that she was not acting as plaintiff’s attorney. Rather, the terms of the post-nuptial agreement which plaintiff now challenges, as well as numerous emails between plaintiff, his former wife, and Goldstein, reflect the parties’ understanding and agreement that Goldstein would draft the post-nuptial agreement, and the spouses’ separate counsel would review it before execution. Accordingly, plaintiff has not sufficiently alleged an attorney-client relationship between him and Goldstein, or that she was negligent and that her negligence was the “but for” cause of his alleged injuries. ”

R. A. Klass
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When plaintiff fails to include a particular claim and seeks to amend the complaint

Sometimes, a plaintiff will fail to include a particular claim against a defendant and will seek to amend the complaint to include the claim. However, if the amendment of the complaint does not assert a cause of action against the defendant on the new claim, the court may deny the motion. In Panos v Eisen, 160 AD3d 759 [2d Dept 2018], the court held:

The Supreme Court should have denied that branch of the plaintiff’s cross motion which was for leave to amend the complaint to assert a cause of action against the defendants to recover damages for breach of fiduciary duty. “ Although leave to amend a pleading should be freely given in the absence of prejudice or surprise to the opposing party (see CPLR 3025 [b] ), the motion should be denied where the proposed amendment is palpably insufficient or patently devoid of merit ” (APF Mgt. Co., LLC v. Munn, 151 A.D.3d 668, 670, 56 N.Y.S.3d 514). Here, the plaintiff proposed to amend the complaint to assert a cause of action against the defendants to recover damages for breach of fiduciary duty. However, this cause of action is based on the same underlying facts as the legal malpractice cause of action and does not allege distinct damages. Therefore, the proposed breach of fiduciary duty cause of action was duplicative of the legal malpractice cause of action (see Schwartz v. Leaf, Salzman, Manganelli, Pfiel & Tendler, LLP, 123 A.D.3d 901, 902, 999 N.Y.S.2d 444; Keness v. Feldman, Kramer & Monaco, P.C., 105 A.D.3d 812, 813–814, 963 N.Y.S.2d 313; Kvetnaya v. Tylo, 49 A.D.3d 608, 609, 854 N.Y.S.2d 425).

R. A. Klass
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Brooklyn Bar Association helps bring lawyers up to speed on Appellate Division e-filing requirements

” The Brooklyn Bar Association hosted a team of attorneys, clerks and legal services representatives for a recent continuing legal education seminar on the new e-filing requirements in the Appellate Division on Tuesday, June 19.

” The lecture was titled ” New E-filing Requirements in the Appellate Division, Second Department ” and it was moderated by Richard A. Klass, the Brooklyn Bar Association’s treasurer.

” The panel included Aprilanne Agostino and Caterina Madaffari from the clerk’s office in the Appellate Division, Lynne Bailey from Dick Bailey Service, Tricia Reddi and Christina Anthony. ”

Follow this link to read the article in its entirety on the Brooklyn Eagle’s website.

 

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…Applicable to the particular matter in which malpractice is claimed

The statute of limitations in legal malpractice cases can be tolled when there has been continuous representation of the client by the attorney. However, it is applicable only to the particular matter in which malpractice is claimed.

See, Davis v Cohen & Gresser, LLP, 160 AD3d 484, 486 [1st Dept 2018], in which the court held:

“ the continuous representation doctrine does not apply where there is only a vague “ ongoing representation ” (Johnson v. Proskauer Rose LLP, 129 A.D.3d 59, 68, 9 N.Y.S.3d 201 [1st Dept. 2015] ). For the doctrine to apply, the representation must be specifically related to the subject matter underlying the malpractice claim, and there must be a mutual understanding of need for further services in connection with that same subject matter (see Shumsky, 96 N.Y.2d at 168, 726 N.Y.S.2d 365, 750 N.E.2d 67; see also CLP Leasing, 12 A.D.3d at 227, 784 N.Y.S.2d 535). ”

– R. A. Klass
Your Court Street Lawyer

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Issue of fact concerning the continuous representation doctrine

…issue of fact concerning the continuous representation doctrine…

In an action brought by a client against his law firm, the appellate court reversed the granting of the law firm’s motion for summary judgment based upon an issue of fact concerning the continuous representation doctrine.

Under the continuous representation doctrine, a person seeking professional assistance is placed in a difficult position if required to sue his or her attorney while the attorney continues to represent them on a particular legal matter (Shumsky v. Eisenstein, 96 N.Y.2d 164, 167–168, 726 N.Y.S.2d 365, 750 N.E.2d 67 [2001] ). Accordingly, the doctrine tolls the running of the statute of limitations on malpractice claims until the ongoing representation is completed (id.). However, the application of this doctrine is limited “to the course of representation concerning a specific legal matter,” and is not applicable to the client’s “continuing general relationship with a lawyer … involving only routine contact for miscellaneous legal representation … unrelated to the matter upon which the allegations of malpractice are predicated” (id. at 168, 726 N.Y.S.2d 365, 750 N.E.2d 67). The record presents an issue of fact as to whether defendant continuously represented plaintiff in connection with a personal injury claim based on the accident, such as to toll the statute of limitations during that time (see Glamm v. Allen, 57 N.Y.2d 87, 94, 453 N.Y.S.2d 674, 439 N.E.2d 390 [1982]; Waggoner v. Caruso, 68 A.D.3d 1, 6–7, 886 N.Y.S.2d 368 [1st Dept. 2009] ). Encalada v McCarthy, Chachanover & Rosado, LLP, 160 AD3d 475 [1st Dept 2018].

R. A. Klass
Your Court Street Lawyer

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News from Brooklyn Eagle: Brandeis Society honors Justice Jeffrey Cohen and Rich Klass Sworn in as Treasurer.

“The new directors sworn in included Justice Esther M. Morgenstern, Administrative Judge Lawrence Knipel, Justice Marsha Steinhardt and David Chidekel. Cohen himself is also counted among the new directors.”

See more here.

– R. A. Klass
Your Court Street Lawyer

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