Mid-Hudson Valley Federal Credit Union, Appellant,v.Quartararo & Lois, PLLC et al., Respondents.BriefN.Y.June 5, 2018To be Argued by: HILLARY J. RAIMONDI (Time Requested: 15 Minutes) Hem fork Supreme (tart Appellate Stmsitftt— (UlTtrti Separtment MID-HUDSON VALLEY FEDERAL CREDIT UNION, Plaintiff-Respondent, - against- 1 QUARTARARO & LOIS, PLLC and PAUL QUARTARARO, Defendants-Appellants. BRIEF FOR DEFENDANTS-APPELLANTS TRAUB LIEBERMAN STRAUS & SHREWSBERRY LLP Attorneys for Defendants-Appellants Mid-Westchester Executive Park Seven Skyline Drive Hawthorne, New York 10532 (914) 347-2600 Ulster County Clerk’s Index No. 1738/16 TABLE OF CONTENTS PRELIMINARY STATEMENT 1 ■- STATEMENT OF QUESTIONS PRESENTED .2 STATEMENT OF FACTS 3 Procedural History .. The Amended Complaint, 3 3 ARGUMENT 6 POINT I - - THE AMENDED COMPLAINT FAILS TO STATE A CAUSE OF ACTION FOR LEGAL MALPRACTICE 6 POINT II - - THE AMENDED COMPLAINT FAILS TO STATE A CAUSE OF ACTION FOR FRAUD 9 The Cause of Action for Fraud is Duplicative of the Cause of Action for Legal Malpractice A. 9 B. Even If Not Redundant, Plaintiffs Fraud Claim Fails to State A Cause of Action 10 CONCLUSION 11 TABLE OF AUTHORITIES i LCASES Antokol & Coffin v. Myers, 30 A.D.3d 843, 819 N.Y.S.2d 303 (3d Dep’t 2006) {S' .6 PBrodeur v. Hayes, 18 A.D.3d 979, 795 N.Y.S.2d 761 (3d Dep’t 2005) .6 Bua v. Purcell & Ingrao, P.C., 99 A.D.3d 843, 952 N.Y.S.2d 592 (2d Dep’t 2012) .6 Country Club Partners, LLC v. Goldman, 36 Misc. 3d 1205A, ** 28-29, 954 N.Y.S. 2d 758 (Sup. Ct. Albany Cty. 2009), aff d 79 A.D. 3d 1389, 913 N.Y.S. 2d 803 (3d Dep’t 2010) .9 Ehlinger v. Ruberti, Girvin & Ferlazzo, P.C., 304 A.D.2d 925, 758 N.Y.S.2d 195 (3d Dep’t 2003) .6 Gorman v. Gorman, 88 A.D.2d 677, 451 N.Y.S.2d 455 (3d Dep’t 1982) 10 Langford v. Cameron, 73 A.D.2d 1001, 424 N.Y.S.2d 41 (3d Dep’t 1980) 10 Mecca v. Shang, 258 A.D. 2d 569, 685 N.Y.S. 2d 458 (2d Dep’t 1999) ,9 Miszko v. Leeds & Morelli, 3 A.D.3d 726, 769 N.Y.S.2d 923 (3d Dep’t 2004)■i 6 Sage Realty Corp. v. Proskauer Rose LLP, 251 A.D.2d 35, 675 N.Y.S.2d 14 (1st Dep’t 1998). .9 Weiss v. Manfredi, 83 N.Y. 2d 974, 616 N.Y.S.2d 325 (1994), .9 ii Zarin v. Reid & Priest, 184 A.D.2d 385, 585 N.Y.S.2d 379 (1st Dep’t 1992). STATUTES .6 z ■-! CPLR § 3013 .7 :] CPLR § 3016(b) 10 p CPLR 3211(a)(7). 1 ■ ! 1 iii PRELIMINARY STATEMENT *:i ■This brief is respectfully submitted on behalf of the appeal by defendants-appellants Quartararo & Lois, PLLC and Paul Quartararo (collectively, •] “defendants”) from the Decision and Order dated November 28, 2016, of the Supreme Court, Ulster County (Cahill, C., J.S.C), which denied defendants’ motion to dismiss the amended complaint for failure to state a cause of action pursuant to CPLR§ 3211(a)(7) . R. 9-12. As discussed below, despite amending the complaint in response to an initial i motion to dismiss the complaint, which motion alerted plaintiff to the deficiencies in such pleading, plaintiff has still failed to state a cause of action for legal malpractice against defendants. Applying even the most liberal pleading standard, the amended complaint herein does not contain sufficient factual allegations to withstand a motion to dismiss. '1 1 STATEMENT OF QUESTIONS PRESENTED Whether the motion court erred in finding that the amended complaint1. states a cause of action for legal malpractice where the amended complaint does not contain facts regarding any of the elements of such a cause of action, and contains only conclusory allegations? The motion court found that plaintiff had sufficiently pled a cause of action for legal malpractice. 2. Whether the motion court erred in finding that the amended complaint states a cause of action for fraud, where the amended complaint is devoid of any particularity and where the allegations of fraud are duplicative of the cause of action for legal malpractice? The motion court found that plaintiff had sufficiently pled a cause of action for fraud separate and distinct from the cause of action for legal malpractice. 2 STATEMENT OF FACTS EProcedural History Plaintiff commenced this action on July 1, 2016, by filing a summons with notice in the Supreme Court of the State of New York, County of Ulster, dated June 27, 2016. R. 13. By notice of appearance dated August 15, 2016, defendants i demanded a complaint in this action. R. 29-31. Thereafter, plaintiff served a verified complaint, dated August 30, 2016, asserting causes of action for legal malpractice, breach of contract and fraud. R. 14-20. Defendants moved to dismiss the complaint for failure to state a cause of action. R. 21-32. Plaintiff opposed such motion, and, in conjunction therewith, served an amended complaint, R. 33-41. Plaintiff conceded that the breach of contract cause of action was duplicative of the legal malpractice cause of action, and withdrew such cause of action. R. 10. Defendants filed a reply affirmation, and requested that the court apply the motion to dismiss to the amended complaint. R. 42-46. By Decision and Order dated November 28, 2016 and filed and entered on November 30, 2016, the Supreme Court, Ulster County (Cahill, C., J.S.C.) denied defendants’ motion, finding that the amended complaint states causes of action for 1 legal malpractice and fraud. R. 9-12. The instant appeal ensued. 3 d The Amended Complaint ■j iThe amended complaint alleges that plaintiff retained the law firm to perform L 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, however, that the law firm failed and neglected to conduct such legal A 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. :i 39. Of note, the entirety of the amendment to the original complaint is the :1 addition of the following two boiler plate paragraphs within plaintiffs cause of ;! action for legal malpractice: 23. 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. 24. Had 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. The remainder of the amended complaint is identical to the original complaint. For the reasons set forth below, the decision of the motion court should be 4 reversed, and the amended complaint dismissed in its entirety with prejudice. ■ - ■ 5 ARGUMENT 1POINT I THE AMENDED COMPLAINT FAILS TO STATE A CAUSE OF ACTION FOR LEGAL MALPRACTICE It is well settled in New York that in order to survive a motion to dismiss, a P plaintiff asserting legal malpractice must allege factual allegations that demonstrate that the attorney was negligent, that such negligence was the proximate cause of the loss sustained, and actual and ascertainable damages. In order to avoid dismissal, plaintiff must properly allege proximate cause, and it must be alleged that “but for” the attorney’s negligence, the plaintiff would not have sustained actual and ascertainable damages. Miszko v. Leeds & Morelli, 3 A.D.3d 726, 769 N.Y.S.2d 923 (3d Dep’t 2004); Ehlinger v. Ruberti, Girvin & Ferlazzo, P.C., 304 A.D.2d 925, 758 N.Y.S.2d 195 (3d Dep’t 2003). A failure to establish proximate cause requires dismissal regardless of whether negligence is established. Brodeur v. Hayes,18 A.D.3d 979, 795 N.Y.S.2d 761 (3d Dep’t 2005). Moreover, plaintiff is required to plead actual, ascertainable damages that resulted from the attorneys’ negligence. 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. 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 61 A.D.3d 843, 952 N.Y.S.2d 592 (2d Dep’t 2012). 3Even 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. Instead, the amended complaint is a series of conclusory statements regarding the legal elements of a legal malpractice cause of action, and does not put the law firm on notice of the particular transactions or occurrences at issue herein, as expressly required under New York law. CPLR § 3013. In fact, plaintiffs allegations herein merely allege that the law firm “failed and neglected to conduct legal work in a timely, competent and professional manner.” R. 15. This is especially insufficient here, because plaintiff claims that it retained the law firm over a number of years to handle numerous legal matters. The amended complaint does:! not state which matters it claims are the subject of the instant malpractice suit, when such alleged acts of malpractice occurred such that a possible statute of limitations defense can be evaluated, what the result was in the underlying matter(s) or what the alleged errors or omissions could possibly be. Neither does it allege facts from which one could arguably conclude that the $375,000.00 damages alleged are actual ! damages that occurred as a result of specific actions of malpractice that occurred less than three years prior to the initiation of the instant lawsuit. Instead, based upon the vaguest assertions of wrongdoing, and without asserting a single fact, plaintiff alleges that the law firm was negligent and engaged I 7 1 in legal malpractice. Plaintiffs vague and conclusory allegations do not establish Eany of the necessary elements of a cause of action for legal malpractice. The complaint contains no factual allegations connecting any purported act of the law firm to any actual or ascertainable damage suffered by plaintiff, or that “but for” any : -i ij act of the law firm, plaintiff has been damaged. Finally, even plaintiffs description of damage is speculative and conclusory, and simply does not meet the necessary standard of actual and ascertainable damages. Therefore, plaintiff fails to state a cause of action for legal malpractice. ::j ■! 8 POINT n 1 iTHE AMENDED COMPLAINT FAILS TO STATE A CAUSE OF ACTION FOR FRAUD A. The Cause of Action for Fraud is Duplicative of the Cause of Action for Legal Malpractice The cause of action for fraud is redundant of the cause of action for legal malpractice, and such cause of action should accordingly be dismissed. The law is clear that a suit against an attorney, which alleges wrongdoing in the provision of legal services, sounds in legal malpractice, and any other causes of action based upon the same facts and seeking the same damages will be dismissed as redundant. Sage Realty Corp. v. Proskauer Rose LLP, 251 A.D.2d 35, 675 N.Y.S.2d 14 (1st •j Dep’t 1998) (fraud claim dismissed as duplicative of legal malpractice claim); Mecca v. Shang, 258 A.D. 2d 569, 685 N.Y.S. 2d 458 (2d Dep’t 1999)(fraud and disgorgement claims duplicative of legal malpractice). Moreover, a claim that is, at its essence, that malpractice was not disclosed or was otherwise concealed, cannot form the basis of a distinct cause of action for fraud. Weiss v. Manfredi, 83 N.Y. 2d 974, 977, 616 N.Y.S.2d 325 (1994); Country Club Partners, LLC v. Goldman, 36 Misc. 3d 1205A, ** 28-29, 954 N.Y.S. 2d 758 (Sup. Ct. Albany Cty. 2009), aff d 79 71 A.D. 3d 1389, 913 N.Y.S. 2d 803 (3d Dep’t 2010). 7 Here, plaintiffs cause of action for fraud seeks the same vaguely alleged compensatory damages of $375,000.00 as sought in the cause of action for legal7 9 i malpractice. Plaintiff claims that the law firm did not accurately portray the legal iwork performed in its invoices, thus in some way obfuscating the fact that legal work was not done, i.e., that the law firm engaged in legal malpractice. Of course, if the allegations regarding the legal work performed is proven false, then both causes of action fail. If true, which is of course denied, then the single cause of action for legal malpractice will suffice to make plaintiff whole. There being no basis for a fraud cause of action independent of legal malpractice, the fraud cause of action must be dismissed as duplicative. B. Even If Not Redundant, Plaintiffs Fraud Claim Fails To State A Cause of Action Even if plaintiff s cause of action for fraud could stand alone from its cause of action for legal malpractice, it fails to properly state a cause of action in any event. It is well settled that, in order to avoid dismissal, a plaintiff asserting a claim of fraud must allege the factual circumstances in support of such claim in detail, and with the specificity required under CPLR 3016(b). Gorman v. Gorman, 88 A.D.2d 677, 451 N.Y.S.2d 455 (3d Dep’t 1982). Plaintiff herein only asserts bare allegations that the law firm’s invoices were false and untruthful. R. 38. However, such bare and conclusory allegations are insufficient to meet the pleading requirements of a claim for fraud. Langford v. Cameron,73 A.D.2d 1001, 424 N.Y.S.2d 41 (3d Dep’t1 1980). Plaintiffs cause of action for fraud, therefore, fails to properly state a claim in any event.■1 10 CONCLUSION ■Based upon the foregoing, it is respectfully requested that the Decision and I Order dated November 28, 2016, filed and entered on November 30, 2016, which denied defendants’ motion to dismiss the amended complaint for failure to state a cause of action, be reversed in its entirety, and that the Court grant such other and further relief as it deems just and proper. Dated: Hawthorne, New York February 7, 2017 TRAUB LIEBERMAN STRAUS & SHREWSBERRY LLP :,i ABy: XjHillary J. Raimorjaiÿ Attorneys for Defendants Quartararo & Lois, PLLC and Paul Quartararo Mid-Westchester Executive Park Seven Skyline Drive Hawthorne, New York 10532 (914)347-2600 11