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Legal malpractice defense attorneys know they must make the plaintiff prove two cases – the legal malpractice case and the “case within a case”, requiring the plaintiff to prove the merits and damages of the matter underlying the alleged legal malpractice. On March 1, 2023, the Supreme Court of the State of New York reaffirmed this unique legal malpractice defense in Mid City Elec. Corp. v. Peckar & Abramson, 2023 NY Slip Op 01085, once again emphasizing that legal malpractice defense lawyers should often focus the defense on plaintiff’s burden that he or she would have been successful in proving the case within the case.
Plaintiff, Mid City Electrical Corporation (“Mid City”), brought a legal malpractice action against Defendants, Peckar & Abramson, Charles E. Williams III, and Christopher Bletsch (collectively “Peckar & Abramson”). Mid City previously retained the services of Peckar & Abramson to challenge the New York State Department of Transportation’s proposal to terminate the status of Mid City as a disadvantaged business enterprise (“DBE”). After unsuccessfully appealing to the New York State Department of Transportation directly, Peckar & Abramson commenced a proceeding pursuant to CPLR article 78 on behalf of Mid City to stay the termination of its status as a DBE. That proceeding was dismissed on the grounds that Mid City failed to file an appeal with the United States Department of Transportation before commencing the proceeding pursuant to CPLR 78. The order and judgment dismissing that proceeding was affirmed by the Appellate Division. Mid City then filed a legal malpractice action against Peckar & Abramson.
Peckar & Abramson immediately moved to dismiss Mid City’s legal malpractice complaint. In dismissing the complaint, the New York Supreme Court held that Mid City’s complaint failed to plead specific factual allegations demonstrating that, but for the defendants’ alleged negligence, there would have been a more favorable outcome regarding the termination of Mid City’s status as a DBE. Specifically, the Court held, “[w]ith respect to the legal malpractice cause of action insofar as asserted by Mid City against the defendants, the complaint was required to contain factual information showing that the attorneys’ actions, inter alia, proximately caused Mid City to sustain actual and ascertainable damages.” Id. citing Gorbatov v. Tsirelman, 155 AD3d 836, 838. Allegations that Plaintiff lost the opportunity to appeal, without indication that the appeal had merit, were insufficient to state a claim. Id. citing Coccia v Liotti, 70 AD3d 747, 754.
This decision reaffirms the importance of focusing on the case within a case in legal malpractice actions. More importantly, it demonstrates that raising this issue early in the case can result in an early dismissal for a legal malpractice defendant.