Firm That Handled Legal Malpractice Case Sued For Legal Malpractice

Some claims of legal malpractice survived motions to dismiss in a matter in which a law firm was disqualified as a result of a conflict of interest, according to a recent opinion of the New York Appellate Division for the Second Judicial Department.

the plaintiffs retained the defendant law firm Gusrae Kaplan Nusbaum, PLLC (hereinafter GKN), to represent them in an ongoing legal malpractice and fee dispute action, and to represent nonparty Nikolay Minkin, a liaison for the plaintiffs, in a related third-party indemnification action. GKN represented the plaintiffs and Minkin until April 24, 2012, when the Supreme Court disqualified GKN from continuing that representation due to a conflict of interest in representing both the plaintiffs and Minkin.

On a motion to dismiss based on documentary evidence

“To succeed on a motion to dismiss based upon documentary evidence pursuant to CPLR 3211(a)(1), the documentary evidence must utterly refute the plaintiff’s factual allegations, conclusively establishing a defense as a matter of law” (Gould v Decolator, 121 AD3d 845, 847; see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326;Leon v Martinez, 84 NY2d 83, 88). On a motion pursuant to CPLR 3211(a)(7) to dismiss for failure to state a cause of action, the court must accept the facts alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d at 326; Leon v Martinez, 84 NY2d at 87-88).

The court

The Supreme Court erred in granting that branch of GKN’s motion which was pursuant to CPLR 3211(a)(1) to dismiss the fourth cause of action. The fourth cause of action sought to recover damages for legal malpractice due to GKN’s alleged misrepresentation that it had filed a motion to reargue on the plaintiffs’ behalf. While the documentary evidence submitted by GKN in support of its motion established that such a motion was prepared, the motion itself indicates that it was not filed until after GKN ceased representing the plaintiffs.

The Supreme Court also erred in granting that branch of GKN’s motion which was to dismiss the sixth cause of action, alleging unjust enrichment. “To prevail on a claim of unjust enrichment, a party must show that (1) the other party was enriched, (2) at that party’s expense, and (3) that it is against equity and good conscience to permit [the other party] to retain what is sought to be recovered” (Citibank, N.A. v Walker, 12 AD3d 480, 481 [internal quotation marks omitted]; see Marini v Lombardo, 79 AD3d 932, 934; Cruz v McAneney, 31 AD3d 54, 59). The complaint alleged that the plaintiffs paid GKN large sums of money, which purportedly represented legal fees associated with the work being performed on the plaintiffs’ behalf. The complaint further alleged that, in light of the allegations of, among other things, legal malpractice, GKN had been unjustly enriched by those payments and GKN’s retention of that money violated “fundamental principals of justice, equity, and good conscience.” GKN did not address those allegations on its motion to dismiss, other than to claim lawful entitlement to the money as fees earned and billed. Accordingly, the Supreme Court erred in determining that the complaint failed to state a cause of action alleging unjust enrichment (see CPLR 3211[a][7]).

The trial court had dismissed the entire lawsuit. (Mike Frisch)