Tuesday, December 18, 2007
A corporation sued the law firm for its representation, through its partly owned subsidiary, in its attempt to obtain a long-term lease for property on Staten Island "to develop an entertainment complex including a motion picture studio, marina and hotel." The firm allegedly had advised the sub's chairman of the board that his son (who had a criminal securities conviction and had been permanently barred from the securities industry) could be involved in the project. It was alleged that this advice was improper and led to the termination of the project.
The motion court dismissed the action, concluding that the plaintiff could not prove "but for" causation as the inability to raise financing had contributed to the failure. The New York Appellate Division for the First Judicial Department reversed and reinstated the complaint: "The evidence that other factors contributed to the loss raises an issue of fact that may not be determined at the pleading stage." (Mike Frisch)