Friday, March 4, 2011

Enough Alleged

The New York Appellate Division for the First Judicial Department has held that the allegations of legal malpractice in an amended complaint were sufficient to withstand a motion to dismissat an early stage of the proceedings:

The amended complaint alleges that defendant was negligent in failing to advise Boylan International properly, that defendant's negligence caused Boylan's loss, and that Boylan sustained actual damages. Specifically, it alleges, inter alia, that defendant failed to mount a defense to Boylan's tax assessment arrears based on Blackstar Publ. Co. v 460 Park Assoc. (137 Misc 2d 414 [1987] [escalation clauses should not be applied where the tax increase is caused by extensive renovation that does not inure to the tenant's benefit]), negotiated a settlement less beneficial than simply paying the demanded amount, and coerced Boylan into executing the settlement although it knew of the dire consequences thereof. "A claim for legal malpractice is viable, despite settlement of the underlying action, if it is alleged that the settlement of the action was effectively compelled by the mistakes of counsel.".... The amended complaint further alleges that, but for defendant's negligence, Boylan would not have had to declare bankruptcy and incur additional attorney's fees. These allegations are sufficient to withstand a CPLR 3211(a)(7) motion. At this stage, plaintiff does not have to show a "likelihood of success," as the motion court found, but is required only to plead facts from which it could reasonably be inferred that defendant's negligence caused Boylan's loss. Plaintiff also does not have to show that Boylan actually sustained damages but is required only to allege facts from which actual damages could reasonably be inferred. (citations omitted)

(Mike Frisch)

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