Mid-Hudson Valley Federal Credit Union, Appellant,v.Quartararo & Lois, PLLC et al., Respondents.BriefN.Y.June 5, 2018Mid-Westchester Executive Park Seven Skyline Drive Hawthorne, New York 10532 TRAUB LIEBERMAN STRAUS & SHREWSBERRY LLP Telephone (914) 347-2600 Facsimile (914) 347-8898 www.traublieberman.com March 19, 2018 New York State Court of Appeals 20 Eagle Street Albany, New York 12207 Re: Mid-Hudson Valley Credit Union v. Quartararo & Lois, PLLC, et al. APL-2017-00250__ Dear Honorable Justices of the Court of Appeals: Please accept this submission pursuant to Section 500.11 of the Court of Appeals Rules of Practice, as the letter submission on the merits on behalf of defendants-respondents Quartararo & Lois, PLLC and Paul Quartararo (collectively, “defendants” or “the law firm”) as to the appeal by plaintiff-appellant from the Order of the Appellate Division, Third Department, decided and entered on November 9, 2017. Such order reversed the Decision and Order dated November 28, 2016, of the Supreme Court, Ulster County (Cahill, C., J.S.C) denying the defendants’ motion to dismiss pursuant to CPLE 3211(a)(7), and dismissed the complaint in its entirety. Plaintiffs appeal is limited to the dismissal of the legal malpractice cause of action. Plaintiff never appealed the dismissal of the breach of contract cause of action in the first instance, and does not appeal the dismissal of the fraud cause of action herein. New York | New Jersey | Florida | Illinois | California | Connecticut | London (Liaison Office) New York Court of Appeals MHVC v. Quartararo & Lois, PLLC, et al. APL-2017-00250 Page 2 of 12 In its letter submission herein, plaintiff focuses entirely on the Appellate Division dissent, arguing that dismissal was not appropriate because “there is not a measure of detail required by the CPLR” in pleading a cause of action. Plaintiffs letter submission, p. 4. However, the single case cited for such proposition, Rock City Sound, Inc. v. Bashian & Farber, LLP, 74 A.D. 3d 1168, 1171 (2010), stands for no such proposition. In Rock City, although dismissal was denied, the plaintiff had identified the legal matter that formed the basis of its malpractice claim, the judgments and orders that were issued in such case allegedly as a result of the negligence of defendants, the specific alleged deviations from the standard of care and the specific categories of damages it allegedly suffered - all things missing from the instant amended complaint. The Appellate Division, Second Department held only that in presenting the specific categories of damages, and allegations linking such damages to the alleged negligence, the plaintiff had met its burden in pleading a cause of action for legal malpractice. As reflected in the record, in the instant matter, the original complaint was devoid of any factual allegations whatsoever. Unlike in Rock City, the specific legal matter was not identified, nor were the alleged deviations from the standard of care or sources of damages. Consequently, upon receipt of the original New York Court of Appeals MHVC v. Quartararo & Lois, PLLC, et al. APL-2017-00250 Page 3 of 12 complaint, the law firm moved to dismiss for failure to state a cause of action. R. 21-32. In response to such motion, plaintiff amended the complaint by adding two conclusory paragraphs parroting the elements of a legal malpractice cause of action. R. 37.2 The law firm chose to apply its pending motion to the amended complaint, addressing the insufficiency of the amendment in its reply. R. 42-46. In the amended complaint, plaintiff alleges only that it retained the law firm to perform legal work related to the collection of debts owed to plaintiff and the foreclosure of certain mortgages related to property upon which plaintiff was a mortgagee. R. 36. It is alleged that the law firm failed and neglected to conduct such legal work in a timely, competent and professional manner. R. 36. Based upon such vague allegations, plaintiff alleges that it suffered unspecified damages in the amount of $375,000.00, and punitive damages in the amount of $200,000.00. R. 39. Clearly, at the time plaintiff amended the complaint, plaintiff was on notice regarding the precise pleading deficiencies alleged, which deficiencies it failed to 2 Those two boiler plate paragraphs stated summarily, that “but for the defendant’s failure to conduct the requisite legal services in a timely and competent manner, MHVFCU would have succeeded on the underlying actions for foreclosure and debt collection,” and “[h]ad the defendant law firm not failed to advise the cases in a timely and competent manner pursuant to their contract, MHVFCU would not have incurred a loss in time and value in the debt on the collection and foreclosure cases assigned to defendant. R. 37. New York Court of Appeals MHVC v. Quartararo & Lois, PLLC, et al. APL-2017-00250 Page 4 of 12 cure upon amendment. The suggestion by the Appellate Division dissent that the law firm could have sought a bill of particulars or a more definite statement was addressed by the Appellate Division majority when it properly observed that, “[hjaving been apprised of defendant’s challenge and being presented with an opportunity to particularize its allegations, plaintiff, in response, submitted an amended complaint that merely added two paragraphs consisting of bare legal conclusions.” Appellate Division decision at p. 4. The Appellate Division majority correctly concluded, in dismissing the amended complaint, that “plaintiff failed to plead any specific facts, which, if accepted as true, would establish a legal malpractice claim.” Appellate Division Decision, p. 3. Contrary to Plaintiffs characterizations, there is nothing new or novel about the Appellate Division’s decision. The decision does not effect a “sea of change.” It is clear that the Appellate Division did not read a “new” particularity requirement into CPLR 3211. CPLR 3211 is not the statutory standard governing what must be contained in pleadings. Rather, it is the section regarding the grounds for motions to dismiss. CPLR 3013 governs what must be contained in a pleading. And, citing the express language contained in CPLR 3013, the Appellate Division found that it is required that the pleading contain sufficient factual allegations to New York Court of Appeals MHVC v. Quartararo & Lois, PLLC, et al. APL-2017-00250 Page 5 of 12 place the defendants on notice of the transaction or occurrence about which the plaintiff complains. Admittedly, when courts are examining motions pursuant to CPLR 3211(a)(7), they apply a liberal standard to those pleadings. However, plaintiff would have the courts apply virtually no standard at all. To the contrary, in granting the law firm’s motion to dismiss, the Appellate Division relied on well- established law from the New York Court of Appeals and statutory provisions that are clear on their face. The claim by plaintiff that the “majority applied a previously non-existent ‘sufficient detail’ test on top of the ‘state a cause of action’ test found in CPLR 3211(a)(7)” is specious. Such argument utterly ignores what the Appellate Division recognized, that CPLR 3013 expressly requires that “[statements in a pleading shall be sufficiently particular to give the court and the parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action or defense.” The fact that such “notice pleading,” must include “sufficiently particular” facts to support same, is actually the foundation for the standards applicable to motions to dismiss for failure to state a cause of action pursuant to CPLR 3211(a)(7), which require both notice of the facts and the legal elements of New York Court of Appeals MHVC v. Quartararo & Lois, PLLC, et al. APL-2017-00250 Page 6 of 12 the claim. Contrary to the Appellate Division dissent, requiring a plaintiff to state the facts that form the basis for its claim and which, if true, would entitle it to relief, is a far cry from requiring a plaintiff to prove such claim at the pleading state. Applying those well established and long standing statutory provisions, the Appellate Division properly came to the conclusion that it simply could not determine that what plaintiff was claiming constituted legal malpractice by the law firm. It correctly observed that “the amended complaint is not just sparse on factual details- rather, it is wholly devoid of them.” Appellate Division Decision, pp. 3-4. In addressing the dissent, the majority acknowledged, as does the law firm, that a plaintiff need not plead all of the factual detail in order to overcome a motion to dismiss. But, consistent with the age old standards, bare legal conclusions, such as the ones present in both the Complaint and the Amended Complaint, are simply not enough. Applying the standards advanced by plaintiff and the Appellate Division dissent would eviscerate the existing standards for factual pleading and would place defendants in the compromised position of having to guess as to the bases for the claim. No court has applied such a standard. New York Court of Appeals MHVC v. Quartararo & Lois, PLLC, et al. APL-2017-00250 Page 7 of 12 As emphasized by the law firm below, a recitation of the legal elements of a legal malpractice claim without facts deprives a defendant from asserting any threshold defenses such as statue of limitations, defenses addressed to purported documentary evidence or defenses on the merits such as the successor counsel doctrine or failure to state a cause of action for reasons such as non-actionable strategy determinations. More specifically, because it is well established that the three year statute of limitations in a legal malpractice case begins to run on the date of the alleged malpractice, a critical component of such causes of action includes identifying the acts of alleged malpractice so that, at the very least, a defendant can evaluate when such acts occurred. Without those allegations, a defendant is not on notice of the transaction or occurrence that is the basis of a cause of action against it and cannot claim that such cause of action is time-barred. Indeed, when a law firm handles multiple discrete matters on behalf of a client, such as in the instant case, each case is subject to its own statute of limitations for legal malpractice, because the statute of limitations is not tolled as a result of a client’s “continuing general relationship with a lawyer . . . unrelated to the matter upon which the allegations of malpractice are predicated. Instead, in the context of a legal malpractice action, the continuous New York Court of Appeals MHVC v. Quartararo & Lois, PLLC, et al. APL-2017-00250 Page 8 of 12 representation doctrine tolls the Statute of Limitations only where the continuing representation pertains specifically to the matter in which the attorney committed legal malpractice.” See Shumsky v. Eisenstein, 96 N.Y. 2d 164, 168, 726 N.Y.S. 3d 365 (2001). Thus, plaintiffs allegation herein that it entered into an agreement with the law firm whereby it would provide “legal work” at some unidentified time related to the “collection of debts” and “the foreclosure of certain mortgages” is plainly deficient to meet even the most minimal pleading standard. The Appellate Division majority correctly highlighted this failing in its decision, stating that plaintiff does “not allege a single transaction where defendants were retained to provide legal services or a single occurrence of negligent representation forming the basis of the legal malpractice claim, let alone the specific underlying foreclosure action or actions in which defendants allegedly committed legal malpractice.” Appellate Division Decision at p. 3. Moreover, without identifying the malpractice alleged or the timing of same, a defendant would be unable to document that it was actually successor counsel who could have cured the malpractice, relieving it of liability. Similarly, it is well established that strategy determinations are not actionable as legal malpractice, and New York Court of Appeals MHVC v. Quartararo & Lois, PLLC, et al. APL-2017-00250 Page 9 of 12 thus, a failure to identify the nature of the alleged malpractice and whether it was the result of a strategy determination, defeats any ability to move to dismiss such claim. See, e.g., DweckLaw Firm, LLP v. Mann, 283 A.D.2d 292, 293, 727 N.Y.S. 2d 58 (1st Dep’t 2001) (unsupported factual allegations, conclusory legal argument or allegations contradicted by documentations do not suffice to overcome motion to dismiss). It is axiomatic that in legal malpractice cases, a plaintiff is required to plead actual, ascertainable damages that resulted from the attorneys’ negligence. McCoy v. Feinman, 99 N.Y. 2d 295, 301-302, 755 N.Y.S. 2d 693 (2002). Conclusory allegations of damages or injuries predicated on speculation cannot suffice for a malpractice action, and dismissal is warranted where the allegations in the complaint are merely conclusory and speculative. Id.; see also, Antokol & Coffin v. Myers, 30 A.D.3d 843, 819 N.Y.S.2d 303 (3d Dep’t 2006); Zarin v. Reid & Priest, 184 A.D.2d 385, 585 N.Y.S.2d 379 (1st Dep’t 1992); Bua v. Purcell & Ingrao, P.C., 99 A.D.3d 843, 952 N.Y.S.2d 592 (2d Dep’t 2012). Here, it is impossible to determine the source of the alleged damages, whether they arise from a single case or multiple cases and whether they are speculative. New York Court of Appeals MHVC v. Quartararo & Lois, PLLC, et al. APL-2017-00250 Page 10 of 12 The Appellate Division dissent’s comment that the law firm did not submit documentary evidence to refute Plaintiffs cause of action,3 highlights the unworkable nature of the dissent’s position. It would have been impossible in the instant matter to make a motion under 3211(a)(1) because the law firm could not tell what it needed to conclusively refute. See, e.g., Stuart v. Robert Folks & Associates, 106 A.D.3d 808 (2d Dep’t 2013) (Second Department affirmed dismissal of a legal malpractice complaint wherein plaintiff had pled that the alleged malpractice involved negligent advice to prosecute a time-barred action, because the law firm was able to present documentary evidence to refute such allegations). Applying the standard that is advanced by plaintiff and the dissent would deprive any defendant from effectively moving to dismiss a legal malpractice case so long as a plaintiff alleges, in the most conclusory way, that the defendant represented it, deviated from the standard of care and caused it damages. This simply cannot be the case. To be sure, it is well established, and nothing new, that conclusory legal allegations describing only the elements of a cause of action are simply not enough to sustain a cause of action. Hyman v. Burgess, 125 A.D. 3d 1213 (3d Dep’t 3 The Majority correctly notes that the law firm was not required to submit documentary evidence because it was not moving under CPLR 321(a)(1). Appellate Division decision, p. 4. New York Court of Appeals MHVC v. Quartararo & Lois, PLLC, et al. APL-2017-00250 Page 11 of 12 2015)(the Court held that while a law firm’s counterclaims seeking attorney’s fees stated a cause of action, the plaintiffs claims for legal malpractice were deficient and did not meet even the most liberal pleading standards). The Appellate Division in this case correctly held that neither the Complaint nor the Amended Complaint contained a single mention of deficient representation or erroneous legal advice. Even after plaintiff was alerted to the insufficiency of the original complaint via the law firm’s motion to dismiss, it still did not plead any facts to support its claim. It is alleged merely that the law firm “failed and neglected to conduct legal work in a timely, competent and professional manner” with respect to unidentified foreclosure matters at unspecified times. R. 15. As noted above, the lack of factual pleading is especially troubling here, because plaintiff claims that it retained the law firm to handle numerous unspecified legal matters over an unidentified course of time. As noted above, applying the standards articulated by plaintiff would force defendants to litigate cases through discovery where immediate dismissal might have been appropriate. See, e.g., Leder v. Spiegel, 9 N.Y.3d 836 (2007)(court found that failure to anticipate evidentiary rulings not legal malpractice). It is respectfully submitted that, as a matter of both law and public policy, and contrary to plaintiffs stated New York Court of Appeals MHVC v. Quartararo & Lois, PLLC, et al. APL-2017-00250 Page 12 of 12 concern that the application of the existing legal standard, which is the standard advanced here, would “open[] the floodgates to excessive litigation on the quality of detail in complaints,” the non-existent pleading standard advanced by plaintiff would encourage additional frivolous actions against law firms. Based upon the foregoing, it is respectfully requested that the Decision and Order of the Appellate Division, Third Department, decided and entered on November 9, 2017, which dismissed the instant action in its entirety, be affirmed in its entirety, and that the Court grant such other and further relief as it deems just and proper. Respectfully Submitted, N NEW YORK STATE COURT OF APPEALS CERTIFICATE OF COMPLIANCE I hereby certify pursuant to 22 NYCRR PART 500.l(j) that the foregoing brief was prepared on a computer using Word 2010. Type. A proportionally spaced typeface was used, as follows: Name of typeface: Times New Roman Point size: 14 Line spacing: Double Word Count. The total number of words in this brief, inclusive of point headings and footnotes and exclusive of pages containing the table of contents, table of citations, proof of service, certificate of compliance, corporate disclosure statement, questions presented, statement of related cases, or any authorized addendum containing statutes, rules, regulations, etc., is 2,517 words. Dated: Hawthorne, New York March 19,2018 dWc Hillary J. Raimondi Traub Lieberman Straus & Shrewsberry LLP Mid-Westchester Executive Park Seven Skyline Drive Hawthorne, New York 10532 (914)347-2600 hraimondi@tlsslaw.com CORPORATE DISCLSOURE STATEMENT In compliance with Rule 500.1(c) of the Rules of Practice for the Court of Appeals of the State of New York, defendant Quartararo & Lois, PLLC, states the following: Quartararo & Lois, PLLC is a Professional Limited Liability Company, which has no parents, subsidiaries or affiliates. AFFIDAVIT OF SERVICE STATE OF NEW YORK ) ) ss.: COUNTY OF WESTCHESTER ) CHRISTINA ANTOLINO, being duly sworn, deposes and says: That deponent is not a party to the within action and is over 18 years of age. That on the 19th day of March 2018, deponent served the within DEFENDANTS-RESPONDENTS SUBMISSION ON THE MERITS TO COURT OF APPEALS PURSUANT TO SECTION 500.11 and CORPORATE DISCLOSURE STATEMENT, upon the parties listed below, by depositing same enclosed in a postpaid properly addressed wrapper, in an official depository under the exclusive care and custody of the United States Post Office department within the State of New York: TO: Kevin A. Luibrand, Esq. Luibrand Law Firm, PLLC 950 New Loudon Road, Suite 270 Latham, New York 12110 (518) 783-1100 ISTTNA ANTOLINOc: Swonrto before me this 19%awof March 2018. ciAa* i NOTARY PUBLIC LAURA FORTE Notary Public, State of New York No. #01FO6153141 Qualified in Westchester County My Commission Expires Sept. 25, 2018
