Tuesday, August 11, 2009
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 advice sufficient and nonconclusory, as noted above, the documentary evidence provides significant support for plaintiff's claim. It clearly establishes 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 tax laws the necessary funds were not "immediately available" — we must accept that allegation as true (see Leon v Martinez, 84 NY2d 83, 87 ) —- and that a reasonably competent matrimonial attorney who read the stipulation would not have advised him to sign it. Given these allegations, 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 lacks merit. To survive a preanswer motion to dismiss... "a pleading need only state allegations from which damages attributable to the defendant's conduct may reasonably be inferred." At this early stage of the proceedings, plaintiff " is not obliged to show . . . that [he] actually sustained damages,'" but only that "damages attributable to [defendants' conduct] might be reasonably inferred." The complaint sufficiently asserts that "but for" defendants' faulty advice that plaintiff sign the stipulation, he would not have incurred the tax liability that resulted from the withdrawal of funds from his retirement account. We do not regard as pure speculation plaintiff's contention that in no event would he have incurred that liability if the settlement had not been reached.(citations omitted)