Friday, December 3, 2021

The Personal Touch

The dismissal of a legal malpractice suit was affirmed by the New York Appellate Division for the First Judicial Department

Plaintiff, who sues individually and in his capacity as a board member of Personal Touch Holding Corp., lacks standing to commence this action. The complaint, which asserts a single cause of action for legal malpractice, is premised on defendants' allegedly deficient pleading of causes of action under Business Corporation Law § 720. Any BCL 720 causes of action, however, belonged to the corporation, not to plaintiff as an individual. Thus, only the corporation has standing to sue for legal malpractice arising from those causes of action (see Walker v Saftler, Saftler & Kirschner, 239 AD2d 252, 252 [1st Dept 1997]), and plaintiff does not dispute that he has failed to plead the pre-suit requirements necessary to sue derivatively on behalf of the corporation under Business Corporation Law § 626 (see Griffith v Medical Quadrangle, Inc., 5 AD3d 151, 152 [1st Dept 2004]). Furthermore, plaintiff's payment of legal fees does not confer standing on him (see Priest v Hennessy, 51 NY2d 62, 69-70 [1980]; Kalish v Lindsay, 47 AD3d 889, 891 [2d Dept 2008]).

(Mike Frisch)

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