Legal Malpractice Claim Dismissed for Failure Adequately to Allege Damages

On September 12, 2017, Justice Scarpulla of the New York County Commercial Division issued a decision in Miami Capital, LLC v. Hurwitz, 2017 NY Slip Op. 31925(U), dismissing a legal malpractice claim for failure adequately to allege damages, explaining:

Hurwitz argues that the complaint should be dismissed because Miami Capital fails sufficiently to plead any damages. Hurwitz contends that Miami Capital is still in possession of the property and WHCO's action has been discontinued. In response, Miami Capital does not dispute that it remains in possession of the property and the prior action has been discontinued.

Miami Capital does not plead that it suffered any damages from the WHCO action, which has been discontinued. Instead, the damages alleged by Miami Capital relate to a subpoena issued by the New York Attorney General's Office. The subpoena seeks a deposition of a person with knowledge concerning the title insurance for the sale of the Property as well as documents related to Miami Capital's purchase of the property. Although Miami Capital has received a subpoena from the Attorney General, Miami Capital does not plead any damages that it has suffered resulting from the subpoena or the Attorney General's investigation.

While Miami Capital anticipates that at some point in the future it could be subject to a rescission claim and could possibly lose the property because of the Attorney General's investigation, at this point in time these alleged damages are purely speculative and not yet ripe. Accordingly, I find that Miami Capital failed to adequately plead damages to support a legal malpractice action.

(Internal quotations and citations omitted).

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.