Allegations Sufficient To Sustain Malpractice Claim

The New York Appellate Division for the First Judicial Department concluded that a complaint alleging legal malpractice had been improperly dismissed by the trial court. The allegations related to a settlement in a divorce action. The court held:

Here, not only are the allegations of the giving of incorrect advicesufficient and nonconclusory, as noted above, the documentary evidenceprovides significant support for plaintiff’s claim. It clearlyestablishes that the overwhelming majority of plaintiff’s funds,including the amount necessary to satisfy the obligation to his wife,were not, as characterized by the stipulation, “immediately available.”Plaintiff alleges that he did not know that under the applicable taxlaws the necessary funds were not “immediately available” — we mustaccept that allegation as true (see Leon v Martinez, 84 NY2d 83,87 [1994]) —- and that a reasonably competent matrimonial attorney whoread the stipulation would not have advised him to sign it. Given theseallegations, the stipulation may constitute evidence of defendants’negligence and does not constitute a defense to the malpractice claim.

Furthermore, defendants’ assertion that plaintiff’s alleged damages are too speculative lacksmerit. To survive a preanswer motion to dismiss… “a pleading need only state allegations from which damagesattributable to the defendant’s conduct may reasonably be inferred.” At this early stage of the proceedings, plaintiff ” is notobliged to show . . . that [he] actually sustained damages,'” but onlythat “damages attributableto [defendants’ conduct] might be reasonably inferred.” The complaint sufficiently asserts that “butfor” defendants’ faulty advice that plaintiff sign the stipulation, hewould not have incurred the tax liability that resulted from thewithdrawal of funds from his retirement account. We do not regard as pure speculation plaintiff’scontention that in no event would he have incurred that liability ifthe settlement had not been reached.(citations omitted)

(Mike Frisch)