Friday, January 24, 2014

Near Privity Not Enough

The New York Appellate Division for the First Judicial Department affirmed the dismissal of a legal malpractice claim:

Plaintiff, a claims administrator for an insurer, commenced this action alleging legal malpractice against defendants, who were retained to represent the insurer in a personal injury action. Acknowledging that it is not in privity with defendants, plaintiff contends that it may bring the cause of action by virtue of its relationship of near privity with them.  However, plaintiff does not allege that it had a contractual obligation to pay for the loss in the personal injury action. Nor does it allege that it sustained actual damages because of this obligation. Similarly, plaintiff's factual allegations do not suffice to state an equitable subrogation cause of action against defendants. (citations omitted)

(Mike Frisch)

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