…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

Client dissatisfaction doesn’t mean he can sue his lawyer for legal malpractice.

…general dissatisfaction with the lawyer’s strategy…

Just because a client is dissatisfied with his lawyer, doesn’t mean that he can sue the lawyer for legal malpractice.

In Genet v Buzin, 159 AD3d 540 [1st Dept 2018], the court held that a general dissatisfaction with the lawyer’s strategy wasn’t enough to sustain a lawsuit against him. The court held: “Plaintiffs’ proposed amendment is “palpably insufficient” (MBIA Ins. Corp. v. Greystone & Co., Inc., 74 A.D.3d 499, 499, 901 N.Y.S.2d 522 [1st Dept. 2010] ). The allegations underlying the legal malpractice claim merely “reflect plaintiff[s’] dissatisfaction with defendants’ strategic choices and tactics; there is no showing that those choices and tactics were unreasonable” (Kassel v. Donohue, 127 A.D.3d 674, 674, 6 N.Y.S.3d 916 [1st Dept. 2015], lv dismissed 26 N.Y.3d 940, 17 N.Y.S.3d 57, 38 N.E.3d 800 [2015]; see also Rosner v. Paley, 65 N.Y.2d 736, 738, 492 N.Y.S.2d 13, 481 N.E.2d 553 [1985] ). The breach of contract claim is duplicative of the legal malpractice claim, since it arises from the same facts and alleges similar damages (see Rivas v. Raymond Schwartzberg & Assoc., PLLC, 52 A.D.3d 401, 861 N.Y.S.2d 313 [1st Dept. 2008] ).”

– R. A. Klass
Your Court Street Lawyer

A New York City Marshal carries out almost all the same tasks as Sheriffs…

Photo of toddler with sheriff's star illustrating article by Richard Klass Esq. about New York City marshal

In New York City, a City Marshal carries out almost all of the same tasks as Sheriffs, including evicting tenants, towing cars, seizing businesses and levying on bank accounts. However, unlike Sheriffs, City Marshals aren’t elected to office, aren’t government officers who get paid salaries, and make their income from fees and a percentage of moneys collected through their enforcement duties. Also, their jurisdiction extends only throughout the City of New York.

Entry of Judgment by the Creditor

A company in the business of making credit available to small businesses through the use of merchant service agreements entered into an agreement with a night club. As part of the agreement, it obtained a signed confession of judgment from the night club which, in the event of a default in repayment of the credit line, could be entered with the county clerk. At some point, the debtor defaulted under the agreement and the creditor entered the confession of judgment with the clerk of court. Once judgment was entered, the creditor issued an Execution to the City Marshal. An Execution is a document which directs the enforcement officer (Sheriff or Marshal) to attach and levy upon certain assets belonging to the judgment debtor in order to satisfy the judgment.

The New York City Marshal Levied upon the Debtor’s Out-of-State Bank Account.

The City Marshal levied upon the debtor’s bank account located far outside the City of New York, in Cincinnati, Ohio. The bank honored the levy, remitting the funds contained in the account to the City Marshal (which amounted to approximately half of the balance due on the judgment). In turn, the City Marshal remitted the net proceeds to the judgment creditor after deducting his levy and poundage fees.

The debtor filed a lawsuit against the City Marshal for both money damages for the amount withdrawn from its account and for punitive damages. The debtor claimed that the City Marshal acted outside of his jurisdiction by levying on the Ohio bank account. The City Marshal hired Richard A. Klass, Your Court Street Lawyer, to defend him against the lawsuit.

A City Marshal Is Subject to Reprimand

Article 16 of the New York City Civil Court Act governs City Marshals. Article 16 provides that the appellate courts may reprimand, censure, suspend or remove a City Marshal for cause through established, detailed procedures. Through delegation from the courts, the NYC Department of Investigation is charged with oversight of the City Marshals, including taking complaints, conducting investigations, and regulating their activities subject to court approval. Among the requirements for serving, a City Marshal must post a bond to answer for any violation of his duties.

Juxtaposed with the courts’ power of reprimand, City Marshals may also be held civilly liable for any damages caused by negligently executing a levy or warrant. See, Korsinsky v. Rose, 120 AD3d 1307 [2d Dept. 2014]. To establish a cause of action for negligence, however, a plaintiff must establish the existence of a duty on the defendant’s part, breach of that duty and damages. Specifically, a plaintiff suing a Marshal or Sheriff for wrongful execution must prove that he lacked or exceeded his authority while performing his duties and caused damage. While there are occasions that a judgment creditor may be held liable for conversion (under the principle of caveat creditor), an enforcement officer acting under an execution that was regular on its face and issued from a court of competent jurisdiction is protected by law. Ruckman v. Cowell, 1 NY 505 [1848].

Judgment Debtor Did Not Suffer Any Damages

In dismissing the case against the City Marshal, the judge focused on the issue of damages. In any negligence case, it is critical that the plaintiff-injured party prove that it was damaged as a result of the defendant’s acts. In this case, the judgment debtor could not establish that it sustained any damages as a result of the City Marshal’s levy on the out-of-state bank; there was no dispute that the moneys collected from the debtor’s bank account were properly applied towards partial satisfaction of the judgment. The judge held that the lawsuit was “a blatant attempt to avoid having to pay its bill (i.e. having the Marshal pay the money that Plaintiff owes the Judgment Creditor) and under the transparent guide of this action against the Marshal (which would in effect amount to a sanction of the Marshal).”

The court found that, by vesting authority with the appellate courts over City Marshals, the legislature did not create a private remedy where one was never intended. Since there exists both a forum and mechanism for addressing any alleged abuses of authority by City Marshals, the court would not entertain a lawsuit, especially where the City Marshal seemingly executed on a facially-valid confession of judgment. See, Bam Bam Entertainment LLC v. Pagnotta, [Sup. Kings 4/11/18], New York Law Journal, April 19, 2018. (Bam Bam Entertainment LLC v. Pagnotta decision/order available here in PDF format.)

Richard A. Klass, Esq.

Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached at (718) COURT●ST or RichKlass@courtstreetlaw.com with any questions.

Prior results do not guarantee a similar outcome.

©2018 Richard A. Klass.
Image at top of page: Getty Images

Important for parties in litigation to appear before court on all conferences and motion hearing dates

Important for parties in litigation to appear before court on all conferences and motion hearing dates

It is very important for parties in litigation to appear before the court on all conferences and motion hearing dates. In a recent legal malpractice case (Stein v Davidow, Davidow, Siegel & Stern, LLP, 157 AD3d 741, 742–43 [2d Dept 2018] , the court denied the plaintiffs’ motion to vacate their default. The court held that:

In order to vacate a default in appearing at a scheduled court conference, a plaintiff must demonstrate both a reasonable excuse for the default and a potentially meritorious cause of action (see CPLR 5015[a] [1]; Wright v. City of Poughkeepsie, 136 A.D.3d 809, 809, 24 N.Y.S.3d 523; Mazzio v. Jennings, 128 A.D.3d 1032, 1032, 8 N.Y.S.3d 596; Hanscom v. Goldman, 109 A.D.3d 964, 965, 972 N.Y.S.2d 76). A determination of whether an excuse is reasonable lies within the sound discretion of the Supreme Court (see GMAC Mtge., LLC v. Guccione, 127 A.D.3d 1136, 1138, 9 N.Y.S.3d 83; Herrera v. MTA Bus Co., 100 A.D.3d 962, 963, 954 N.Y.S.2d 631).

 Here, the Supreme Court providently exercised its discretion in determining that the plaintiffs did not offer a reasonable excuse for their default. Neither the fact that Stein was proceeding pro se nor his claims that he was unaware of the consequences of failing to appear constitute a reasonable excuse (see U.S. Bank N.A. v. Slavinski, 78 A.D.3d 1167, 1167, 912 N.Y.S.2d 285; Dorrer v. Berry, 37 A.D.3d 519, 520, 830 N.Y.S.2d 277). The plaintiffs’ remaining arguments to support their contention that their default should be excused are improperly raised for the first time on appeal, and have not been considered by this Court *743 see Tulino v. Tulino, 148 A.D.3d 755, 757, 48 N.Y.S.3d 258; Point Holding, LLC v. Crittenden, 119 A.D.3d 918, 920, 990 N.Y.S.2d 575).

As the plaintiffs failed to offer a reasonable excuse for their default, the issue of whether the plaintiffs had a potentially meritorious cause of action need not be addressed (see U.S. Bank, N.A. v. Dorvelus, 140 A.D.3d 850, 852, 32 N.Y.S.3d 631; Vested Bus. Brokers, Ltd. v. Ragone, 131 A.D.3d 1232, 1234, 17 N.Y.S.3d 447; Abdelqader v. Abdelqader, 120 A.D.3d 1275, 1276, 993 N.Y.S.2d 71). Accordingly, the Supreme Court properly denied the plaintiffs’ motion pursuant to CPLR 5015(a)(1) to vacate their default.

– R. A. Klass
Your Court Street Lawyer

Brooklynites get lesson on consumer debt and bankruptcy from local bar association

From left: Salaria Robinson, Fern J. Finkel, Richard A. Klass and Roseann Hiebert. Brooklyn Eagle photos by Rob Abruzzese
From left: Salaria Robinson, Fern J. Finkel, Richard A. Klass and Roseann Hiebert. Brooklyn Eagle photos by Rob Abruzzese

Evidence rebutted the malpractice claim

…The court found that evidence rebutted the malpractice claim….

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 evidence rebutted the malpractice claim. The court held,

“The conclusory allegation that, but for defendants‘ negligence, plaintiff would have successfully opposed the summary judgment motion in the foreclosure action and defended the action is insufficient to support the legal malpractice claim, because the evidentiary material reveals that plaintiff had no viable defense (see West 45th St. Venture LLC v. Ladera Partners, LLC, 2012 N.Y. Slip Op. 31834[U], 2012 WL 2951192, *7–8 [Sup. Ct. N.Y. County 2012], affd 106 A.D.3d 412, 963 N.Y.S.2d 864 [1st Dept. 2013], lv denied 22 N.Y.3d 859, 981 N.Y.S.2d 370, 4 N.E.3d 382 [2014] ).” Ladera Partners, LLC v Goldberg, Scudieri & Lindenberg, P.C., 157 AD3d 467, 467 [1st Dept 2018]

– R. A. Klass
Your Court Street Lawyer

Real estate joint venture: Nothing Ventured, Nothing Gained.

Cartoon of house exploding that illustrates article by Richard Klass, Esq. about a failed real estate development joint venture agreement in New York.

 

 

Two developers were in the business of purchasing New York State real properties for purposes of building, renovation, rehabilitation and/or construction of those properties for sale, conversion into condominiums or retain as rental properties.

The developers found a Manhattan property owned by two people. The four of them decided to enter into a joint venture – the two property owners would transfer the property into a limited liability company (LLC) to be formed and the two developers would take care of constructing three single-family townhouses on the property. They entered into a joint venture agreement laying out the terms of their deal.

Joint venture agreement…

In furtherance of their joint venture, the developers laid out money for expenses, including architect and survey fees and mortgage costs. Unfortunately, the property owners failed to transfer the property into the LLC, despite the terms of their agreement to do so.

The relationship between the four joint venturers broke down. The developers decided to sue the property owners in state court. The developers hired Richard A. Klass, Esq., Your Court Street Lawyer, to file a lawsuit against the owners. The complaint alleged that the property owners committed fraud by promising to transfer the property into the LLC but failed to do so, thereby, breaching the joint venture agreement. They also alleged that a “constructive trust” should be imposed upon the property and a court declaration that the developers were equitable owners of the property. The property owners countered that the joint venture agreement contained a clause that any disputes between them were to be submitted to arbitration and that the developers should be compelled to proceed to arbitration. The developers agreed to arbitrate their claims.

Notice of Pendency

Since the property owners did not transfer the property into the LLC pursuant to the joint venture agreement, the developers needed to ensure that the owners did not sell the property out from under them to a third party. Their fear was that, without any protection, the owners could simply sell the property to someone else and not reimburse them for the moneys they laid out and their share of profits under the joint venture agreement. To protect the developers from this happening, a Notice of Pendency (also known as a Lis Pendens) was filed against the property. A Notice of Pendency is a statutory creation under New York’s Civil Practice Law and Rules Article 65. This filing gives notice to the entire world that there is a dispute which affects the title, use or possession of real property. The filing of this Notice preserves the rights of a party from an owner transferring title to the property to someone else, as whoever buys the property is deemed to have knowledge of the dispute.

Request to Cancel Notice of Pendency

The property owners made a motion before the arbitrator to cancel the Notice of Pendency based upon their claim that it was improperly filed since the developers’ interest in the LLC to be formed was an interest in “personal” property, not real property; therefore, there were no grounds to file the Notice of Pendency in the first instance.

In response, the developers argued that the filing of the Notice of Pendency was both proper and necessary to protect their property interests. The developers cited to the case holding in Nastasi v. Nastasi, 26 AD3d 32 [2 Dept. 2005], as their basis for the arbitrator to reject the property owners’ request to cancel the Notice of Pendency. In Nastasi v. Nastasi, the appellate court considered this issue, stating that “no case has been located addressing the concept of abatement in relation to the mandatory cancellation of a notice of pendency while the action has been stayed pending arbitration.”

Action Was Not “Abated” by Arbitration

Once a Notice of Pendency has been filed against real property, CPLR 6514(a) mandates cancellation of the Notice of Pendency if the action has been “settled, discontinued or abated.” The argument in Nastasi v. Nastasi was that a motion to compel arbitration and, in effect, stay the action amounts to the action being “abated.” In rejecting this argument, the court analyzed the definition of the word “abate” as meaning “to put an end to” or “to nullify.” There is a concept that an action which has abated is dead. However, in this context, the availability of a Notice of Pendency in an action stayed pending arbitration is a perceived “loophole” not intended or foreseen by the drafters of the statute; therefore, it could not be said that the action abated or ended.

After argument by the parties, the arbitrator determined that “the notice of pendency should not be cancelled merely because this matter has been sent to arbitration as the underlying action has not been abated. Finally, Claimants [developers] have sufficiently plead an interest in the subject properties as equitable owners to allow them under CPLR 6501 to sustain the notice of pendency at this time.” Therefore, the Notice of Pendency was to remain filed against the property, preserving the developers’ rights in the property until their dispute is determined through the arbitration process.

Richard A. Klass, Esq.


Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached by phone at (718) COURT●ST or at RichKlass@courtstreetlaw.com with any questions.
Prior results do not guarantee a similar outcome.

©2018 Richard A. Klass.
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Image at top of page: Shutterstock

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