FKB Professional Liability Alert: Despite Law Firm's Alleged Malpractice, Plaintiff Loses at Summary Judgment stage due to "Financially Incredible" Damages Theory   12/10/08

In Snorkel Productions Inc. v. Beckman, Lieberman & Barandes LLP (Supreme Court, New York County Index No.: 108296/06; October 21, 2008 decision) Justice Lowe granted a defendant law firm's CPLR § 3212 motion for summary judgment on the ground that the alleged negligence was not the proximate cause of plaintiffs' damages.

The plaintiffs claimed that they lost the right to produce a Barry Manilow Broadway musical, entitled "Harmony," as a result of the alleged negligent advice of their attorneys.  Specifically, plaintiffs asserted that their attorneys erroneously informed them that an option payment due under the contract under which plaintiff Snorkel Productions, Inc. (Snorkel) obtained the rights to produce the show was not due until March 6, 2004, when in fact it was due on October 9, 2003, and consequently Snorkel lost its rights to produce "Harmony." 

The defendant law firm moved for summary judgment, pursuant to CPLR § 3212, seeking to dismiss the Complaint on the ground that the alleged negligence was not the proximate cause of plaintiffs' damages.  The defendants submitted that the evidence showed that the sole and proximate cause of Harmony's demise, as well as Snorkel's claimed losses, was the production's dire undercapitalization and inability to satisfy its increasingly massive debt, and not any negligent advice or malpractice by defendants.

In opposition, plaintiffs argued that, had Snorkel retained its right to produce Harmony, enough funding could have been raised to overcome Harmony's dire state, including its massive debt at the time Harmony was shut down, and, on top of that, plaintiffs would then be able to raise sufficient funding to bring the show to fruition.

In dismissing the Complaint, Justice Lowe held inter alia that, "[plaintiff's] theory is entirely speculative, and financially incredible.  The evidence makes clear that plaintiffs cannot meet their burden of proving proximate causation without resorting to gross speculation as to what could have happened in the future had Snorkel retained its rights...Upon review, defendants made a satisfactory prima facie showing of entitlement to summary judgment on the ground that [defendants'] advice, even if negligent, was not the proximate cause of plaintiffs' injuries. In opposition, plaintiffs fail to raise the existence of a triable issue of fact regarding whether "but for" defendants' allegedly negligent advice regarding the effective date, plaintiffs would have produced the show (citations omitted), or alternatively, would have suspended production at an earlier date, and thereby cut their losses.  Plaintiffs' arguments, including their claim of damages, are far too speculative to establish proximate causation."

The Snorkel decision serves as a reminder that courts, even assuming arguendo a finding of breach of duty, will grant summary judgment if the defendant negates any of the four elements of a legal malpractice cause of action. Additionally, the alleged damages cannot be merely speculative. The court's decision can be found in the following link: http://www.nycourts.gov/reporter/pdfs/2008/2008_32938.pdf

We would be happy to discuss the Snorkel decision in more detail at your convenience.  Please feel free to call or e-mail Mike Furman (mfurman@fkbllp.com) or Andrew Jones (ajones@fkbllp.com) for a more in-depth discussion of the opinion.

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