False Hopes, more dangerous than fears: default, action and modification of a Promissory Note

“False hopes are more dangerous than fears.”

— J.R.R. Tolkien

A friend made a $200,000 personal loan (“Lender”) to one of his friends (“Borrower). At the time the loan was made in 2016, the Borrower signed a promissory note[1] in favor of his Lender friend, promising to repay the loan within ten months with interest. According to the terms of the Promissory Note, if the Borrower failed to repay the principal and interest in full by its due date at the end of 2016, any accrued interest would thereafter be calculated at the default rate of twenty percent per annum. In addition, the Promissory Note stated that “[n]o term of [the Promissory Note] may be waived, modified or amended except by instrument in writing signed by both of the parties.”

Default on the note

The Borrower failed to repay the entire balance due by the due date and was, therefore, in default under the terms of the Promissory Note. Nonetheless, the Lender agreed to allow his friend to continue making monthly payments on the balance due. Finally, the payments by the Borrower became so sporadic that, in 2019, the Lender decided to sue his friend to recover the balance due on the loan.

Action brought on the note

The Lender retained Richard A. Klass, Esq., Your Court Street Lawyer, to file a claim for breach of contract based upon non-payment of the Promissory Note. He established his prima facie entitlement to judgment as a matter of law on the cause of action to recover on the note through submission of the Promissory Note, which contained an unequivocal and unconditional obligation to pay, and an affidavit setting forth the borrower’s default. See Intermax Eco, LLC v Eco Family Food Mart Corp., 172 AD3d 1040, 1041 [2d Dept 2019]; Boro P. Health Mgt., LLC v Boro for Health, LLC, 39 Misc 3d 1229(A)972 N.Y.S.2d 142 [Sup Ct 2013].

There was no modification of the note.

In response to the Lender’s lawsuit, the Borrower put up the defense that the terms of the note were modified through a series of email exchanges between him and the Lender. The Borrower filed an affidavit alleging that he made payments over the course of several years which the lender accepted; and the loan was, thus, modified.

As urged by the Lender, the alleged defense of loan modification (based on the fact that the Lender took payments from his friend after the loan came due) completely missed the point — by its own terms, the Promissory Note became due and owing in 2016. Since the Promissory Note matured by its own terms in 2016, the Lender was well within his rights to pursue collection, since the cause of action had already accrued.[2] The assertion that there was some sort of modification of the note or a waiver of same was belied by both the facts and law. While the Borrower attempted to rely on a short exchange of emails in which his friend was basically “chewing him out” for not repaying the loan, the email exchange did not rise to the level of contract modification required by the terms of the Promissory Note,[3] or established by law. The email exchange only showed that the Lender was looking for some good faith from his friend — and his friend couldn’t even do that much (he couldn’t even live up to the supposed offer he made, as evidenced from his small, irregular payments). The email exchange did not constitute an enforceable, written modification setting forth the terms of any extension of the repayment terms of the note.[4]

In JPMorgan Chase Bank, N.A. v Galt Group, Inc., 84 AD3d 1028, 1029-30 [2d Dept 2011], the court rejected a similar claim, that emails were alleged to have modified the terms of a note, holding:

To make a prima facie showing of entitlement to judgment as a matter of law in an action to recover on a note, and on a guaranty thereof, a plaintiff must establish “the existence of a note and guaranty and the defendants’ failure to make payments according to their terms” (Verela v. Citrus Lake Dev., Inc., 53 A.D.3d 574, 575, 862 N.Y.S.2d 96; see Gullery v. Imburgio, 74 A.D.3d 1022, 905 N.Y.S.2d 221). Here, Chase submitted the SBA Loan documents, including the relevant promissory notes, the personal guaranties, and evidence of the defendants’ default, which together established its prima facie entitlement to judgment as a matter of law on the complaint.

Once Chase established its prima facie entitlement to judgment as a matter of law, “[t]he burden then shifted to the defendant[s] to establish by admissible evidence the existence of a triable issue of fact with respect to a bona fide defense” (Gullery v. Imburgio, 74 A.D.3d at 1022, 905 N.Y.S.2d 221; see Verela v. Citrus Lake Dev., Inc., 53 A.D.3d at 575, 862 N.Y.S.2d 96). The defendants did not contest the validity of any of the agreements, notes, or guaranties, nor did they dispute that they were in default. Instead, they submitted certain e-mails into evidence, and argued that they had entered into yet another agreement with Chase — a payoff/paydown agreement — by which Chase agreed to refrain from prosecuting the instant action while the defendants were given an apparently unlimited time to obtain a refinancing loan. Contrary to their contention, however, the Supreme Court correctly concluded that the e-mails contained no evidence of any such agreement between Chase and the defendants.

The Borrower’s expressions of hopes and aspirations to repay the loan set forth in emails, while perhaps well-intended, did not amount to a modification of the terms of the Promissory Note. The Lender was well within his rights to commence this action at the time he did, as the cause of action on the note accrued and the action was timely commenced, giving credit for all payments made. The emails, at best, presented his friend with an opportunity to “do the right thing” and repay the debt.[5] It was urged that the emails ought not be interpreted as a binding modification or waiver of any rights.

Doctrines of waiver and estoppel were inapplicable

The Borrower also asserted affirmative defenses that the action was barred by the doctrines of waiver and/or estoppel. In seeking dismissal of these affirmative defenses, the Lender suggested that these were inapposite to the facts established in this matter and there was no evidentiary basis upon which they could be supported.

The essence of a waiver is when a party intentionally relinquishes a known right. It is well settled that when there is a no oral modification clause, the doctrines of waiver, release and estoppel do not apply. (“Waiver is an intentional relinquishment of a known right and should not be lightly presumed”) Gilbert Frank Corp. v. Fed. Ins. Co., 70 N.Y.2d 966, 968 [1988]; Brooklyn Fed. Saving Bank v 9096 Meserole St. Realty LLC, 29 Misc 3d 1220(A) [Kings Sup Ct 2010]. In this case, the Promissory Note clearly contained a provision that no term of the Note may be waived, modified or amended except by instrument in writing signed by both parties.

“Equitable estoppel prevents one from denying his own expressed or implied admission which has in good faith been accepted and acted upon by another, and the elements of estoppel are with respect to the party estopped: conduct which amounts to a false representation or concealment of material facts, intention that such conduct will be acted upon by the other party, and knowledge of the real facts. The party asserting estoppel must show with respect to himself: lack of knowledge of the true facts, reliance upon the conduct of the party estopped, and a prejudicial change in his position.” Airco Alloys Div., Airco Inc. v Niagara Mohawk Power Corp., 76 AD2d 68, 71-72 [4th Dept 1980]. In the instant matter, the Borrower did not produce any evidence that there was an expressed or implied admission that was in good faith accepted and acted upon by another. Moreover, there was no false representation or concealment of a material fact. There was simply a binding Promissory Note, and nonperformance by the Borrower.

In granting summary judgment in favor of the Lender, the judge directed that the Borrower be held liable for the balance due on the Promissory Note. The judge also dismissed the affirmative defenses set forth in the answer.

End Notes

[1] “A promissory note is an instrument for the payment of money only, provided that it contains an unconditional promise by the borrower to pay the lender over a stated period of time.” Estate of Hansraj v. Sukhu, 145 A.D.3d 755, 755, 43 N.Y.S.3d 127, quoting Lugli v. Johnston, 78 A.D.3d 1133, 1134, 912 N.Y.S.2d 108).

[2] § 83:46. Time instruments: Maker and acceptor, 4C N.Y.Prac., Com. Litig. in New York State Courts § 83:46 (4th ed.) (“A cause of action on an instrument payable on a specified date or the occurrence of a specified event (a time instrument) accrues against the instrument’s maker (if a note) or acceptor (if a draft) on the day after the specified date or event.”); see, UCC 3-122, which provides in relevant part: “(1) A cause of action against a maker or an acceptor accrues (a) in the case of a time instrument on the day after maturity”)

[3] “No term of this Note may be waived, modified or amended expect by an instrument in writing signed by both of the parties hereto. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.”

[4] 22A N.Y. Jur. 2d Contracts § 475 (relevant parts). A contract may be modified if the contract provides for its modification. Fundamental to the establishment of a contract modification is proof of each element requisite to the formulation of a contract. Thus, to be valid under New York law, a contractual modification must satisfy each element of a contract, including offer, acceptance, and consideration. A contract cannot be modified or altered without the consent of all parties thereto. In other words, a contract cannot be modified without the mutual assent of each party. Thus, under general contract rules, an obligation may not be altered without the consent of the party who assumed the obligation. Also, when a contract prohibits modification without the express written consent of a particular party, modification without that party’s express written consent is invalid. Mere negotiations between the parties are insufficient to constitute a modification, but rather must ripen into a mutual, valid, and enforceable agreement to modify the old contract. (emphasis added).

[5] Genger v Genger, 123 AD3d 445, 446 [1st Dept 2014] “[i]ndulgence or leniency in enforcing a debt when due is not an alteration of the contract” (Bier Pension Plan Trust v. Estate of Schneierson, 74 N.Y.2d 312, 316, 546 N.Y.S.2d 824, 545 N.E.2d 1212 [1989]).


Richard A. Klass, Esq.
Your Court Street Lawyer

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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.comcreate new email with any questions.

Prior results do not guarantee a similar outcome.

© 2022 Richard A. Klass

Scales of justice

Failed to submit evidence establishing, prima facie, the absence of at least one essential element of the legal malpractice cause of action.

In Aqua-Trol Corp. v Wilentz, Goldman & Spitzer, P.A., 197 AD3d 544 [2d Dept 2021], the court reinstated the client’s complaint for legal malpractice against its former attorneys, holding:

To succeed on a motion for summary judgment dismissing a legal malpractice action, a defendant must present evidence in admissible form establishing that at least one of the essential elements of legal malpractice cannot be satisfied (see Buczek v. Dell & Little, LLP, 127 A.D.3d 1121, 1123, 7 N.Y.S.3d 558; Valley Ventures, LLC v. Joseph J. Haspel, PLLC, 102 A.D.3d 955, 956, 958 N.Y.S.2d 604). Those elements require a showing that (1) the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and (2) the attorney’s breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (see Bells v. Foster, 83 A.D.3d 876, 877, 922 N.Y.S.2d 124; see also Bua v. Purcell & Ingrao, P.C., 99 A.D.3d 843, 845, 952 N.Y.S.2d 592). The causation element requires a showing that the injured party “ ‘would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence’ ” (Bells v. Foster, 83 A.D.3d at 877, 922 N.Y.S.2d 124, quoting Kennedy v. H. Bruce Fischer, Esq., P.C., 78 A.D.3d 1016, 1018, 912 N.Y.S.2d 590). The defendant must affirmatively demonstrate the absence of one of the elements of legal malpractice, rather than merely pointing out gaps in the plaintiff’s proof (see Quantum Corporate Funding, Ltd. v. Ellis, 126 A.D.3d 866, 871, 6 N.Y.S.3d 255).

Here, the judgment must be reversed, as the Supreme Court should have denied Wilentz’s motion for summary judgment dismissing the complaint. Wilentz failed to submit evidence establishing, prima facie, the absence of at least one essential element of the legal malpractice cause of action (see Bells v. Foster, 83 A.D.3d at 877, 922 N.Y.S.2d 124; see also Biberaj v. Acocella, 120 A.D.3d 1285, 1287, 993 N.Y.S.2d 64). Since Wilentz failed to make its prima facie showing, we do not need to consider the sufficiency of Aqua–Trol’s opposition papers (see Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642).

The Supreme Court, however, properly denied Aqua–Trol’s cross motion for summary judgment on the issue of liability. Aqua–Trol did not establish, prima facie, that Wilentz failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession (see Schottland v. Brown Harris Stevens Brooklyn, LLC, 137 A.D.3d 995, 996–997, 27 N.Y.S.3d 259; Bells v. Foster, 83 A.D.3d at 877, 922 N.Y.S.2d 124). Since Aqua–Trol failed to satisfy its prima facie burden, we need not consider the sufficiency of Wilentz’s opposition papers (see Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d at 853, 487 N.Y.S.2d 316, 476 N.E.2d 642).


Richard A. Klass, Esq.
Your Court Street Lawyer

#CourtStreetLawyer #legalmalpractice

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.comcreate new email with any questions.

Prior results do not guarantee a similar outcome.

© 2021 Richard A. Klass

Scales of justice

Question as to standing, sufficient to justify denial of the motion to dismiss this legal malpractice case.

In Golden Jubilee Realty, LLC v Castro, 196 AD3d 680, 681-82 [2d Dept 2021], the court held that the plaintiff raised a question as to standing to sue the attorney for malpractice sufficient to justify denial of the attorney’s motion to dismiss the case.

The Supreme Court erred in granting that branch of Pacht’s motion which was pursuant to CPLR 3211 (a) (3) to dismiss the amended complaint insofar as asserted against him based on Golden Jubilee’s alleged lack of standing. “On a defendant’s motion to dismiss the complaint based upon the plaintiff’s alleged lack of standing, the burden is on the moving defendant to establish, prima facie, the plaintiff’s lack of standing” (BAC Home Loans Servicing, LP v Rychik, 161 AD3d 924, 925 [2018]; see CPLR 3211 [a] [3]; Gobindram v Ruskin Moscou Faltischek, P.C., 175 AD3d 586, 591 [2019]). “To defeat a defendant’s motion, the plaintiff has no burden of establishing its standing as a matter of law; rather, the motion will be defeated if the plaintiff’s submissions raise a question of fact as to its standing” (Deutsche Bank Trust Co. Ams. v Vitellas, 131 AD3d 52, 60 [2015]). As relevant to this appeal, in actions where a plaintiff voluntarily commenced a bankruptcy proceeding prior to the instant action, “[t]he failure of a party to disclose a cause of action as an asset in a prior bankruptcy proceeding, which the party knew or should have known existed at the time of that proceeding, deprives him or her of ‘the legal capacity to sue subsequently on that cause of action’ ” (Potruch & Daab, LLC v Abraham, 97 AD3d 646, 647 [2012], quoting Whelan v Longo, 23 AD3d 459, 460 [2005], affd 7 NY3d 821 [2006]; see Nicke v Schwartzapfel Partners, P.C., 148 AD3d 1168, 1170 [2017]).

Here, Pacht’s submissions in support of his motion established that Golden Jubilee filed a bankruptcy petition in March 2016 which did not list the claim against Pacht as an asset, and that Golden Jubilee knew or should have known of the existence of its claim against Pacht prior to the filing of the bankruptcy petition (see Keegan v Moriarty-Morris, 153 AD3d 683, 684 [2017]; Positive Influence Fashion v City of New York, 2 AD3d 606, 606-607 [2003]). Accordingly, Pacht met his burden of establishing, prima facie, that Golden Jubilee lacked standing to bring this action against him (see Potruch & Daab, LLC v Abraham, 97 AD3d at 647). In opposition, however, the plaintiffs raised a question of fact as to Golden Jubilee’s standing, thus warranting denial of that branch of Pacht’s motion which was pursuant to CPLR 3211 (a) (3) to dismiss the amended complaint insofar as asserted against him based on Golden Jubilee’s alleged lack of standing (see Arch Bay Holdings, LLC-Series 2010B v Smith, 136 AD3d 719, 720 [2016]). The plaintiffs’ submissions established that Golden Jubilee’s bankruptcy petition was dismissed in January 2017. Thus, all property owned by Golden Jubilee, including the present claim against Pacht, revested with Golden Jubilee upon dismissal of the bankruptcy petition (see 11 USC §§ 349, 541 [a] [1]; Crawford v Franklin Credit Mgt. Corp., 758 F3d 473, 485 [2d Cir 2014]).


Richard A. Klass, Esq.
Your Court Street Lawyer

#CourtStreetLawyer #LegalMalpractice #standing #bankruptcy

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.comcreate new email with any questions.

Prior results do not guarantee a similar outcome.

© 2021 Richard A. Klass

Scales of justice

On a motion for summary judgment, movant must show that there are no triable issues of fact.

Fricano v Law Offices of Tisha Adams, LLC, 194 AD3d 1016 [2d Dept 2021] serves as a reminder that, on a motion for summary judgment, the movant must show that there are no triable issues of fact. The court held:

‘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’ ” (Iannucci v. Kucker & Bruh, LLP, 161 A.D.3d 959, 960, 77 N.Y.S.3d 118, quoting Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 438, 442, 835 N.Y.S.2d 534, 867 N.E.2d 385). It is the defendants’ burden, as the party moving for summary judgment, to demonstrate their prima facie entitlement to judgment as a matter of law by submitting evidence conclusively establishing their defense to the action; merely pointing out gaps in the plaintiffs’ proof is not sufficient (see Bakcheva v. Law Off. of Stein & Assoc., 169 A.D.3d 624, 625, 93 N.Y.S.3d 388; Iannucci v. Kucker & Bruh, LLP, 161 A.D.3d at 960, 77 N.Y.S.3d 118). In determining a motion for summary judgment, the evidence must be viewed in the light most favorable to the nonmovant (see Pearson v. Dix McBride, LLC, 63 A.D.3d 895, 895, 883 N.Y.S.2d 53). “The function of the court on a motion for summary judgment is not to resolve issues of fact or determine matters of credibility, but merely to determine whether such issues exist” (id. at 895, 883 N.Y.S.2d 53 [internal quotation marks omitted]).

Here, the defendants failed to eliminate triable issues of fact as to whether their attorney-client relationship with Fricano included litigation of her insurance claim. The undated copy of an alleged retainer agreement between the defendants and Fricano, which is not signed by Adams, submitted in support of the defendants’ motion for summary judgment, failed to establish, prima facie, that the defendants did not undertake to represent Fricano in litigation against Travco (see Terio v. Spodek, 63 A.D.3d at 721, 880 N.Y.S.2d 679). Further, while the defendants met their initial burden of demonstrating that they had no contract or relationship with Lakeside (see Moran v. Hurst, 32 A.D.3d 909, 911, 822 N.Y.S.2d 564), viewing the evidence in the light most favorable to the plaintiffs, the plaintiffs’ submissions in opposition raised a triable issue of fact as to whether Adams’s words and actions created a contract and/or an attorney-client relationship between the defendants and both Fricano and Lakeside (see Biberaj v. Acocella, 120 A.D.3d 1285, 1287, 993 N.Y.S.2d 64; Terio v. Spodek, 63 A.D.3d at 721, 880 N.Y.S.2d 679).

The defendants also failed to establish, as a matter of law, that the plaintiffs could not have prevailed in an action against Travco (see Blumencranz v. Botter, 182 A.D.3d 568, 569, 120 N.Y.S.3d 829; see also 83 Willow, LLC v. Apollo, 187 A.D.3d 563, 564, 135 N.Y.S.3d 11). In support of their motion for summary judgment, the defendants did not submit a complete copy of the insurance policy, nor a copy of the underlying application for insurance coverage, and thus did not prove that Fricano misrepresented herself to Travco such that the plaintiffs would not have succeeded in a litigation disputing Travco’s denial of their claim. Moreover, even if there were no dispute as to whether Fricano made the alleged misrepresentation, the materiality of such alleged misrepresentation typically is a question of fact for the jury (see Liang v. Progressive Cas. Ins. Co., 172 A.D.3d 696, 698, 99 N.Y.S.3d 449; Zilkha v. Mutual Life Ins. Co. of N.Y., 287 A.D.2d 713, 714, 732 N.Y.S.2d 51).


Richard A. Klass, Esq.
Your Court Street Lawyer

#CourtStreetLawyer #LegalMalpractice #issuesoffact

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.comcreate new email with any questions.

Prior results do not guarantee a similar outcome.

© 2021 Richard A. Klass

Scales of justice

[Her] deposition testimony in the underlying case was contrary to her opposition to the law firm’s motion for summary judgment.

In Walker v Shaevitz & Shaevitz, Esqs., 192 AD3d 1062 [2d Dept 2021], the court dismissed the client’s legal malpractice action because her deposition testimony in the underlying case was contrary to her opposition to the law firm’s motion for summary judgment. The court held:

The Supreme Court, upon reargument, properly granted the law firm’s motion for summary judgment dismissing the complaint. “ ‘In moving for summary judgment dismissing a complaint alleging legal malpractice, a defendant must present evidence establishing, prima facie, that it did not breach the duty to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, or that the plaintiff did not sustain actual and ascertainable damages as a result of such deviation’ ” (Dominguez v. Mirman, Markovits & Landau, P.C., 180 A.D.3d 646, 647, 119 N.Y.S.3d 136, quoting Mazzurco v. Gordon, 173 A.D.3d 1003, 1003, 100 N.Y.S.3d 894). Here, the law firm established its prima facie entitlement to judgment as a matter of law through the submission of the transcript of Walker’s deposition testimony in the underlying action which showed that she could not identify the cause of her fall (see Colini v. Stino, Inc., 186 A.D.3d 1610, 1611, 129 N.Y.S.3d 826; Ash v. City of New York, 109 A.D.3d 854, 856, 972 N.Y.S.2d 594) and that, even if the law firm had breached its duty to the plaintiffs, they would not have prevailed in the underlying action because Walker was unable to identify the cause of her fall without engaging in speculation (see Hamoudeh v. Mandel, 62 A.D.3d 948, 949, 880 N.Y.S.2d 674; see also Markowitz v. Kurzman Eisenberg Corbin Lever & Goodman, LLP, 82 A.D.3d 719, 719, 917 N.Y.S.2d 683).

In opposition, the plaintiffs failed to raise a triable issue of fact. Walker’s deposition testimony and affidavit in this action are contrary to her deposition testimony in the underlying action and merely raised a feigned issue of fact insufficient to defeat summary judgment (see Mallen v. Dekalb Corp., 181 A.D.3d 669, 670, 121 N.Y.S.3d 331; Dominguez v. Mirman, Markovits & Landau, P.C., 180 A.D.3d at 648, 119 N.Y.S.3d 136).

The Supreme Court also properly denied the plaintiffs’ cross motion pursuant to CPLR 3126 to impose sanctions on the law firm for spoliation. A party seeking sanctions for spoliation of evidence must demonstrate “that the party having control over the evidence possessed an obligation to preserve it at the time of its destruction, that the evidence was destroyed with a culpable state of mind, and that the destroyed evidence was relevant to the party’s claim … such that the trier of fact could find that the evidence would support that claim” (Pegasus Aviation I, Inc. v. Varig Logistica S.A., 26 N.Y.3d 543, 547, 26 N.Y.S.3d 218, 46 N.E.3d 601 [internal quotation marks omitted]). Here, the plaintiffs’ reliance on the doctrine of spoliation is misplaced as the law firm was never in possession or control of the restaurant, its lighting system, or its renovation (see Burbige v. Siben & Ferber, 115 A.D.3d 632, 633, 981 N.Y.S.2d 537). Moreover, to the extent that the plaintiffs assert an independent cause of action for negligent spoliation, it is without merit as no such tort is recognized in New York law (see Vargas v. Crown Container Co., Inc., 114 A.D.3d 762, 764, 980 N.Y.S.2d 500; Hillman v. Sinha, 77 A.D.3d 887, 888, 910 N.Y.S.2d 116).


Richard A. Klass, Esq.
Your Court Street Lawyer

#CourtStreetLawyer #LegalMalpractice #litigation

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.comcreate new email with any questions.

Prior results do not guarantee a similar outcome.

© 2021 Richard A. Klass

Scales of justice

…the client must prove that he sustained damages….

Once the defendant-law firm has moved for summary judgment to dismiss the complaint, the client must prove that he sustained damages. See, Nill v Schneider, 173 AD3d 753 [2d Dept 2019]:

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 sustain actual and ascertainable 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 597, 598, 79 N.Y.S.3d 636). “ An attorney’s conduct or inaction is the proximate cause of a plaintiff’s damages if but for the attorney’s negligence, the plaintiff would have succeeded on the merits of the underlying action, or would not have sustained actual and ascertainable damages ” (Nomura Asset Capital Corp. v. Cadwalader, Wickersham & Taft LLP, 26 N.Y.3d 40, 50, 19 N.Y.S.3d 488, 41 N.E.3d 353 [citation and internal quotation marks omitted]; see Richmond Holdings, LLC v. David S. Frankel, P.C., 150 A.D.3d 1168, 1168, 52 N.Y.S.3d 672).

“ It is a defendant’s burden, when it is the party moving for summary judgment, to demonstrate affirmatively the merits of a defense, which cannot be sustained by pointing out gaps in the plaintiff’s proof ” (Quantum Corporate Funding, Ltd. v. Ellis, 126 A.D.3d 866, 871, 6 N.Y.S.3d 255). Once a defendant makes a prima facie showing, the burden shifts to the plaintiff to raise a triable issue of fact (see Iannucci v. Kucker & Bruh, LLP, 161 A.D.3d 959, 960, 77 N.Y.S.3d 118; Valley Ventures, LLC v. Joseph J. Haspel, PLLC, 102 A.D.3d 955, 956, 958 N.Y.S.2d 604).

Here, the defendant met her prima facie burden of demonstrating that the plaintiff did not sustain actual and ascertainable damages proximately caused by the defendant’s alleged negligent representation (see Harris v. Barbera, 163 A.D.3d 534, 536, 79 N.Y.S.3d 643; Panos v. Eisen, 160 A.D.3d 759, 760, 75 N.Y.S.3d 69; Kaloakas Mgt. Corp. v. Lawrence & Walsh, P.C., 157 A.D.3d at 779, 66 N.Y.S.3d 897). The evidentiary submissions established that the proximate cause of the plaintiff’s damages was the occurrence of a tree falling on the subject property during Hurricane Sandy, and not any claimed failure on the part of the defendant to discover, prior to the closing, any alleged discrepancy between the certificate of existing use and the 2007 survey of the subject property (see Excelsior Capitol LLC v. K & L Gates LLP, 138 A.D.3d 492, 492, 29 N.Y.S.3d 320; cf. Esposito v. Noto, 132 A.D.3d 944, 946, 19 N.Y.S.3d 300). In opposition, the plaintiff failed to raise a triable issue of fact. Accordingly, we agree with the Supreme Court’s determination granting the defendant’s cross motion for summary judgment dismissing the amended complaint insofar as asserted against her. For these same reasons, we agree with the court’s determination denying the plaintiff’s motion, inter alia, for summary judgment on the issue of liability.

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…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
Your Court Street Lawyer

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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
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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Summary judgment is a drastic remedy.

Summary judgment is a drastic remedy that should be granted only if no triable issues of fact exist and the movant is entitled to judgment as a matter of law. Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324 [1986]; Andre v. Pomeroy, 35 N.Y.2d 361, 364 [1974]. The party moving for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence in admissible form demonstrating the absence of material issues of fact. Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853 [1985]; CPLR 3212[b].

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