Mid-Hudson Valley Federal Credit Union, Appellant,v.Quartararo & Lois, PLLC et al., Respondents.BriefN.Y.Jun 5, 2018 Website: LuibrandLaw.com March 1, 2018 New York State Court of Appeals 20 Eagle Street Albany, New York 12207 Re: Mid-Hudson Valley Federal Credit Union v. Quartararo & Lois PLLC, et al. APL-2017-00250 Dear Court of Appeals: Please accept this letter being submitted pursuant to Section 500.11 of the Court’s rules as plaintiff-appellant’s comments and arguments on this appeal from the order of the Appellate Division, Third Department decided and entered on November 9, 2017. The Appellate Division, Third Department decision modified, on the law, the decision and order of the trial court by reversing so much thereof as denied defendants’ CPLR §3211(a)(7) motion to dismiss the legal malpractice and fraud causes of action before the trial court. Plaintiff- appellant’s appeal is from so much thereof as dismissed the legal malpractice cause of action for failure to state a cause of action. Kevin A. Luibrand _____________ Phone: (518) 783-1100 Fax: (518) 783-1901 Service by Fax is not accepted Paralegal: Janet L. Murray LUIBRAND LAW FIRM, PLLC 950 NEW LOUDON ROAD, SUITE 270 LATHAM, NEW YORK 12110 APL-2017-00250 March 1, 2018 Page 2 Website: LuibrandLaw.com There were three Appellate Division judges in favor of the decision, and two dissenting insofar as relates to the legal malpractice cause of action subject to this appeal. According to the dissenters, “the majority holding introduces unpredictability and confusion into what was previously settled law, opens the door to the excessive litigation that the CPLR was expressly designed to avoid, and contravenes decades of careful and well-founded application of the principles of notice pleading.” See Appellate Division decision annexed hereto at page 9. Plaintiff, a federal credit union that included, among its services, the lending of money and creating of mortgages, retained the defendant law firm to engage in mortgage foreclosure and collection practice for mortgage loans considered by the credit union to be in default. The plaintiff commenced the subject action against the defendant-attorneys alleging causes of action for, among others, legal malpractice. Prior to serving their answer, defendants moved to dismiss the complaint under CPLR §§3016 and 3211(a)(7). In the response to the opposition to the motion, plaintiff submitted an amended complaint. Defendants alleged in their pre-answer motion that the complaint failed to state a cause of action. The plaintiff’s amended complaint alleged the following material facts relative to this appeal: APL-2017-00250 March 1, 2018 Page 3 Website: LuibrandLaw.com MHVFCU and Defendants entered an agreement whereby Defendants agreed to perform legal work on behalf of MHVFCU related to the collection of debts owed to MHVFCU and the foreclosure of certain mortgages related to real property upon which MHVFCU was mortgagee. Defendants had a duty as MHVFCU’s attorneys to timely, properly and competently represent MHVFCU’s legal interests. Defendants agreed to perform legal services for MHVFCU in a timely, competent and professional manner, and to submit invoices to MHVFCU for the legal services actually done and the time actually expended in performing the legal work, and MHVFCU agreed to pay the Defendants’ invoices for the legal work actually performed. Defendants presented invoices to MHVFCU detailing legal services and the legal time claimed by Defendants to have been provided to MHVFCU. Defendants failed and neglected to conduct legal work in a timely, competent and professional manner. See Appellate Division Third Department record on appeal at R36. The majority held that the amended complaint did “not allege a single transaction where defendants were retained to provide legal services or a single occurrence of negligent legal representation forming the basis of the legal malpractice claim”. The majority held “given the absence of detailed facts, the APL-2017-00250 March 1, 2018 Page 4 Website: LuibrandLaw.com legal malpractice cause of actions should have been dismissed”. See Appellate Division decision annexed hereto at page 4. Plaintiff argued that the facts are sufficient to state a cause of action, and that there is not a measure of detail required by the CPLR as was found necessary by the majority. The dissenters found that “plaintiff was not required to prove its case at this early stage of litigation, nor was it obliged to show that defendants’ malpractice actually caused it to sustain damages. It was required only to ‘plead allegations from which damages attributable to [defendants’] malpractice might be reasonably inferred’ (Rock City Sound, Inc. v. Bashian & Farber, LLP, 74 A.D.3d 1168, 1171 )”. See Appellate Division decision annexed hereto at page 8. The dissenters also found that “when plaintiff’s allegations are construed liberally, accepted as true and given the benefit of every favorable inference, the cause of action sets forth the elements of a legal malpractice claim and provides notice of the ‘transactions, occurrences or series of transactions or occurrences, intended to be proved’ (CPLR 3013)”. The dissenters held that the plaintiff alleged that defendants were retained by plaintiff and failed “to provide timely, APL-2017-00250 March 1, 2018 Page 5 Website: LuibrandLaw.com competent and professional representation”. See Appellate Division decision annexed hereto at page 9. The dissenters recognized the long history of notice pleading, finding that the complaint needs to state a cause of action, not prove one, and that there were remedies available to the defendants in order to obtain more details as the case unfolded, including, specifically, the less drastic CPLR remedies short of dismissal including an application by the defendant “for a more definite statement” under CPLR §3024 or the more common use of a demand for a bill of particulars. See Appellate Division decision annexed hereto at page 9. The dissenters also pointed out that the cases relied upon by the majority were being interpreted “to require a higher standard of detail and specificity for legal malpractice claims than those imposed upon other causes of action by the familiar and fundamental standards of notice pleading”. See Appellate Division decision annexed hereto at page 9. The dissenters found, as is the state of the law, that no special “distinction exists, nor should it” for legal malpractice cases. The majority decision, if permitted to stand as law, effects a sea of change in notice pleading under the New York State and opens the floodgates to excessive litigation on the quality of the detail in complaints rather than relegate APL-2017-00250 March 1, 2018 Page 6 Website: LuibrandLaw.com the litigators to the well-founded and long-litigated rules for amplification of stated causes of action contained throughout the CPLR. The majority applied a previously non-existent further “sufficient detail” test on top of the “state a cause of action” test found in CPLR §3211(a)(7). The dissenters’ recognition of this fundamental change by the majority is set forth throughout the dissenters’ lengthy analysis, concluding with a finding that, as to this plaintiff, the plaintiff is deprived of “any opportunity to prove its case at the earliest juncture of the litigation, solely because its pleading - although sufficient to give rise to the reasonable inference that plaintiff suffered losses due to defendants’ legal malpractice - lacks detail that could readily have been obtained by less drastic means”. See Appellate Division decision annexed hereto at pages 9-10. The Court noted in stark language the transformational effect of the majority’s decision, finding that “the majority holding introduces unpredictability and confusion into what was previously settled law, opens the door to the excessive litigation that the CPLR was expressly designed to avoid, and contravenes decades of careful and well-founded application of the principles of notice pleading”. See Appellate Division decision annexed hereto at page 9. APL-2017-00250 March 1, 2018 Page 7 Website: LuibrandLaw.com The fundamental finding of the Appellate Division in this decision is a change in “decades of careful and well-founded” principles of notice pleading. The decision will open the courts to unnecessary pre-answer motions to dismiss, each debating the quantity and quality of factual detail needed in complaints rather than whether the facts, as stated and if proven, state a cause of action, and at junctures where the litigants should be addressing, among themselves, the factual details and evidence to support the claims. For these reasons, the plaintiff-appellant requests that the Court adopt the ruling and analysis in the dissent, and affirm the trial court ruling insofar as relates to the legal malpractice causes of action. Very truly yours, LUIBRAND LAW FIRM, PLLC By: Kevin A. Luibrand, Esq. KAL:jlm cc: Chelsea A. Four-Rosenbaum, Esq.