Kagan Lubic Lepper Findelstein & Gold LLP v 325 Fifth Ave. Condominium 2015 NY Slip Op 31470(U) August 6, 2015 Supreme Court, New York County Docket

Transcription

1 Kagan Lubc Lepper Fndelsten & Gold LLP v 325 Ffth Ave. Condomnum 2015 NY Slp Op 31470(U) August 6, 2015 Supreme Court, New York County Docket Number: /15 Judge: Cyntha S. Kern Cases posted wth a "30000" dentfer,.e., 2013 NY Slp Op 30001(U), are republshed from varous state and local government webstes. These nclude the New York State Unfed Court Systems E-Courts Servce, and the Bronx County Clerks offce. Ths opnon s uncorrected and not selected for offcal publcaton.

2 [* 1] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: Part x KAGAN LUBC LEPPER FNKELSTEN & GOLD, LLP, Plantff 1 ndexno /15 -aganst- DECSON/ORDER 325 FFTH A VENUE CONDOMNUM and THE BOARD OF MANAGERS OF 325 FFTH A VENUE CONDOMNUM, Defendants x HON. CYNTHA S. KERN, J.S.C. Rectaton, as requred by CPLR 2219(a), of the papers consdered n the revew of ths moton for:~~~~~~~~~~~~~~~~~~~ Papers Numbered Notce of Moton and Affdavts Annexed... Answerng Affdavts... 2 Replyng Affdavts... 3 Exhbts... 4 : Plantff Kagan Lubc Lepper Fnkelsten & Gold, LLP ("Kagan L~bc") commenced the nstant acton aganst defendants 325 Ffth A venue Condomnum ("325 Ffth") and The Board of, Managers of 325 Ffth Avenue Condomnum (the "Board") seekng to recover attorneys fees! and expenses t allegedly ncurred n ts representaton of325 Ffth n another acton. Kagan Lubc now moves for an Order pursuant to CPLR 3211 (a)(7) dsmssng:the counterclams asserted by defendants. For the reasons set forth below, Kagan Lubcs moton s dened. l The relevant facts accordng to the complant are as follows. On qr about February 25, 2015, Kagan Lubc fled ts complant aganst defendants seekng recovery of the attorneys fees and expenses t allegedly ncurred n ts representaton of defendants. Thereafter, defendants

3 [* 2] fled an answer to the complant assertng varous affrmatve defenses and three counterclams. for legal malpractce, volaton of Judcary Law 487 and a declaratory judgment that plantff commtted legal malpractce and that plantff s not enttled to any legal ~ees for ts representaton of defendants. Specfcally, defendants answer alleges as follows. Defendants ~red Kagan Lubc n October 2012 to represent them as general counsel and n an acton agan~! the sponsor of 325 Ffth and certan subcontractors arsng from the defectve desgn, constr~cton, sale, marketng! and management of the condomnum buldng located at 325 Ffth Avenue, New York, New York (the "buldng"), whch was allegedly plagued wth defects from th~ outset. Defendants allege that Kagan Lubc faled to take even the most basc steps to secure remedes aganst those responsble for the defectve desgn and constructon of the Buldng and hat for nearly two years, Kagan Lubc "churned the fle" and generated enormous legal blls.through prolonged negotatons and other pre-ltgaton tactcs that were tme consumng, costly and entrely neffectve, ncludng, nter ala, () retanng duplcatve, superfluous experts whch caused defendants to ncur thousands of dollars n addtonal fees; () engagng ~ futle settlement dscussons for nearly eghteen months; () generatng enormous legal fefs by spendng countless hours addressng nconsequental mantenance ssues n the buµng whch, n many nstances, cost Jess to remedate than the tme spent addressng them; (v) :frustratng any progress toward reachng a settlement wth the sponsor wth respect to the manten~nce ssues by delayng nearly four months before respondng to the sponsors offer to remedate certan condtons; (v) routnely rasng addtonal mantenance ssues whch resulted n further delay and costs; and (v) allowng nearly two years to lapse wthout flng a complant n the acton. Defendants further allege that "[b]ut for Kagan Lubcs dlatory tactcs, the defects n the Bu,\dng would have been 2

4 [* 3] remedated by now, and the mpared value of the Condomnum unts n ~he Buldng resultng from the desgn and constructon defects and ongong ltgaton would ha~e been restored."! On a moton addressed to the suffcency of [a pleadng], the facts, pleaded are assumed to be true and accorded every favorable nference. See Marone v. Marone, :50 N.Y.2d 481 (1980). Moreover "a [pleadng] should not be dsmssed on a pleadng moton so long as, when [the partys] allegatons are gven the beneft of every possble nference, a ca~se of acton exsts." Rosen v. Raum, 164 A.D.2d 809 ( st Dept. 1990). "Where a pleadng s attacked for alleged nadequacy n ts statements, [the] nqury should be lmted to whether t states n some recognzable form any cause of acton known to our law." Foley v. DAgJstno, 21A.D.2d60, ( 51 Dept 1977) (ctng Dulberg v. Mock, 1 N.Y.2d 54, 56 (1956). As an ntal matter, plantffs moton for an Order pursuant to CPLR 321 l(a)(7) dsmssng defendants frst counterclam for legal malpractce s dened.. t s well establshed that n order to state a clam for legal malpractce, "the plantff must plead factual allegatons whch, f proven at tral, would demonstrate that counsel had breached a cjuty owed to the clent [.e. acted neglgently], that the breach was the proxmate cause of the njhres, and that actual damages were sustaned." Dweck Law Frm, LLP v. Mann, 283 A.D.2d *92, 293 ( st Dept 2001 ). Addtonally, "the clent must plead specfc factual allegatons establsh~g that but for counsels defcent representaton, there would have been a more favorable outcom~ to the underlyng matter." d. "Unsupported factual allegatons, conclusory legal argume?t or allegatons contradcted by documentaton, do not suffce." d. n the nstant acton, defendants answer suffcently states a clam for legal malpractce. The frst counterclam alleges that plantff"commtted legal malpractce.by falng to exercse the skll and ablty reasonably to be expected from a duly lcensed attorney dndlor law frm engaged 3

5 [* 4] n the practce of law wthn the State of New York by, among other thngs, engagng n selfservng dlatory tactcs that were neffectve and desgned to mpede settl~ment dscussons and. tmely resoluton of the dspute n order to generate enormous legal fees"1and that as a result of sad breach, defendants have been damaged. Specfcally, defendants a~swer alleges that plantff neglgently delayed the resoluton of ther clams aganst the sponsor and subcontractors only to ncrease ther legal fees and that as a result, defendants have susta/ned damages, ncludng, but not lmted to, enormous legal fees and ncreased costs to ~vestgate and address the defectve condtons throughout the buldng, whch nclude expert fees and rental fees for safety brdges and constructon equpment. Addtonally, defendants all~ge that as a drect result of plantffs wllful delay of the underlyng clams, the buldngs defects have yet to be remedated and that the buldngs value and defendants access to credt pnancng has been mpared. t s well-settled that allegatons that an attorney unreasonably: delayed the resoluton of hs clents clams are grounds for malpractce suffcent to defeat a m~ton to dsmss. See Lappn v. Greenberg, 34 A.D.3d 277, 280 ( st Dept 2006)("the complant. suffcently asserts that defendants nordnate delay... resulted n a loss of prncpal attrbutable tb defendants lack of professonal dlgence"); see also VDR Realty Corp. v. Mntz, 167 A.D.2~ 986, (4h Dept 1990)("[flactual allegatons of the complant to the effect that defendant ~ttorney unreasonably j delayed the prosecuton of a landlord-tenant holdover proceedng and engaged n dlatory tactcs, thereby ncreasng the attorneys fee and causng other consequental d~ages, state a cause of acton for legal malpractce.") Plantffs asserton that the frst counterclam must be dsmssed Jn the ground that ts pre-ltgaton tactcs were a reasonable strategc decson and thus, may n9t consttute a clam for 4

6 [* 5] malpractce, s wthout mert. Defendants do not allege that the decson! to pursue certan preltgaton tactcs and settlement dscussons wth the sponsor was per se n\alpractce but rather that t was the manner n whch that decson was mplemented and pursued that consttuted malpractce. ndeed, t s well-settled that whle the attorney judgment nle protects "an ) attorneys selecton of one among several reasonable courses of acton" from a clam for malpractce, the mmunty provded for reasonable strategc decsons do~s not extend to ncompetent or bad fath mplementaton of that decson. See Ackerman. v. Kesselman, 100 A.D.3d 577 (2d Dept 2012); see also Pllard v. Goodman, 82 A.D.3d 5411 ( st Dept 2011 ). Plantffs asserton that the frst counterclam must be dsmssed Jn the grounds that the answer fals to allege that plantffs malpractce proxmately caused defe?dants damages and that defendants have not been damaged for the purposes of a legal malpra tce clam s also wthout mert. To plead causaton, a plantff must allege that defendant~ malpractce was a proxmate cause of plantffs damages. See Rudo!fv. Shayne, Dachs, sjnsc, Corker & Sauer, 8 N.Y.3d 438 (2007). Addtonally, t s well-settled that cognzable dama?es n a legal malpractce acton nclude consequental damages sustaned as a result oflthe attorneys malpractce, ncludng expenses such as expert fees and attorneys fees. See Escape Arports (USA). nc. v. Kent, Beatty & Gordon LLP,79 A.D.3d 437, (! D~pt 2010); see also Ge!fand v. Olver, 29 A.D.3d 736 (2d Dept 2006). Here, the answer alleges that as a drect result 1 of plantffs dlatory tactcs and other msconduct, defendants sustaned ncreased expert fees, attorneys fees and constructon fees. Further, plantffs asserton that defendants have not sustaned dmpages because t "has apparently been able to ltgate ts clams despte any of the alleged dlatcry tactcs, so any delay 5

7 [* 6] n flng sut has obvously not caused damages to the Condomnum wth respect to ts attempt to recover aganst the Sponsor" s wthout mert. The mere fact that defendants have contnued to pursue ther clams aganst the sponsor wth a dfferent counsel s not a defense to a legal malpractce clam as t s well-settled that a clent may recover ncreased attorneys fees and other expenses sustaned as a result of an attorneys dlatory tactcs even f t s ultmately successful n the underlyng proceedng. See VDR Realty Corp.,_ 167 A.D.2d at 987. Fnally, plantffs asserton that defendants legal malpractce clam must be dsmssed as premature on the ground that the underlyng lawsut n whch the alleged neglgent representaton occurred s stll ongong s wthout mert. New York courts have routnely entertaned malpractce actons pror to the resoluton of the underlyng clam whch gave rse to the malpractce clam. See Rvas v. Raymond, Schwartzberg & Assoc., P LLC, 52 A.D.3d 40 (" Dept 2008)(denyng defendants moton to dsmss and allowng the legal malpractce clam to proceed "even though there has not been an adverse dsposton of the acton"); see also Johnston v. Raskn, l 93 A.D.2d 786, 797 (2d Dept l 993)(reversng dsmssal of legal malpractce clam on the bass that t was premature and holdng that "contrary to the defendants assertons, the plantff could commence her acton although her damages were, as yet, unconfrmed.") Here, defendants counterclam for legal malpractce s not premature notwthstandng the fact that defendants lawsut aganst the sponsor s ongong because defendants malpractce damages are not contngent on the resoluton of the underlyng acton. Addtonally, plantffs moton for an Order pursuant to CPLR 32 (a)(7) dsmssng defendants second counterclam for a volaton of Judcary Law 487 on the ground that t fals to state a clam s dened. Judcary Law 487(2) provdes, n pertnent part, that an attorney 6

8 [* 7] who "wllfully delays hs clents sut wth a vew to hs own gan" s gulty of a msdemeanor and may be lable n treble damages. Jn order to sustan a cause of acton for.a volaton of Judcary Law 487(2), the pleadng must allege specfc facts demonstratng the attorneys alleged delay for hs own gan and may not merely allege bare legal conclusons. See Bernsten v. Oppenhem & Co., P. C., 160 A.D.2d 428 ( st Dept 1990); see also Fleyshman v. Suckle & Schlesnger. PLLC, 91A.D.3d591 (2d Dept 2012). Here, defendants answer suffcently states a clam for a volaton of Judcary Law 487(2). The second counterclam alleges that plantff, nstead of dlgef\tly and vgorously pursung defendants legal clams aganst the sponsor and the subcontractors, engaged n selfservng dlatory tactcs that were desgned to mpede settlement dscussons and the tmely resoluton of the dspute "n order to generate enormous legal fees wth a ;vew to ts own gan." Specfcally, defendants allege that they retaned plantff n October 2012, after an acton had been commenced by Summons wth Notce n July 2012, and that from t~e outset of the representaton, plantff"faled to take even the most basc steps to resolve [defendants] clams" and that "[]nstead, for nearly two years, [plantff] smply churned the fle and generated enormous legal blls through prolonged negotatons and other pre-ltgaton tactcs that were tme consumng, costly, and entrely neffectve," such as requrng addtonal unnecessary expert nvestgatons, delayng flng a complant for almost two years, stallng all opportuntes to settle the underlyng matter and contnung to attempt to settle the matter despte the knowledge that settlement attempts were futle. As these allegatons are suffcent to state a clam for a volaton of Judcary Law 487, plantffs moton to dsmss the second counterclam s dened. Fnally, as ths court has not dsmssed defendants counterclam for legal malpractce, 7

9 [* 8] plantffs moton for an Order pursuant to CPLR 321 l(a)(7) dsmssnj defendants thrd counterclam for a declaratory judgmen that plantff commtted legal m~lpractce and that plantff s not enttled to any legal fees for ts representaton of defendan~s s dened. ndeed, t s well-settled that an attorney who s dscharged for cause, due to msconduct or beng unreasonably lax n pursung the clents case, has no rght to compensat6n for legal servces rendered. See Campagnola v. Mulholland. Mnon & Roe, 76 N.Y.2d 38":cl 990); see also Matter of Stevens, 252 A.D.2d 654 (3d Dept l 988)(fndng dscharge for cause w~ere attorney delayed prosecuton of case and thus was not enttled to collect attorneys fees for 1 servces rendered.) Accordngly, plantffs moton to dsmss defendants counterclalns s dened. Ths consttutes the decson and order of the court. Enter: ----~~~ K~--- J.S.C. CYNTHA S. KERN J.S.C 8