Legal Malpractice Claim Dismissed Because Plaintiff Was Not Damaged by the Negligence it Alleged

On November 19, 2015, the First Department issued a decision in Women's Integrated Network, Inc. v. Anderson Kill P.C., 2015 NY Slip Op. 08500, dismissing a legal malpractice claim for failure to allege damages arising out of the defendants' negligence.

In Women's Integrated Network, the plaintiff alleged, and the defendants conceded, that, while serving as counsel for the plaintiff, they negligently failed timely to file a notice of appeal to the Second Circuit and that that failure "constituted a breach of their duty" to the plaintiff. Nonetheless, the First Department affirmed the dismissal of the plaintiff's legal malpractice claim, explaining:

[B]because plaintiff did not show that defendants' negligence was a proximate cause of plaintiff's losses, the motion court correctly dismissed this legal malpractice action. Plaintiff failed to establish that its insurance contract covered the loss for which plaintiff sought coverage in the federal court declaratory judgment action. As the district court and the motion court found, plaintiff's settlement of its former employee's stock option action, which gave rise to the declaratory judgment action, is not a "Loss" as defined by the policy; the policy states in plain language that "Loss" does not include "payments for stock option or stock appreciation rights."

(Internal quotations and citations omitted) (emphasis added).

We both bring and defend professional malpractice claims and other claims relating to the duties of professionals such as lawyers, accountants and architects to their clients. Contact Schlam Stone & Dolan partner Erik Groothuis at egroothuis@schlamstone.com if you have questions regarding such claims or appeals of such claims.