Furman Kornfeld & Brennan LLP's Joshua Sandberg wins motion dismissing counterclaims for breach of contract, refund of overcharges for attorney's fees, and violation of Judiciary Law §487. 12/1/2011

FKB's client, a divorce and matrimonial litigation law firm, commenced an action to recover outstanding legal fees in connection with its representation of a former client during her underlying matrimonial action. In response, the firm's former client interposed an answer asserting counterclaims for legal malpractice and seeking the return of escrow funds that were allegedly diverted by the firm.

FKB moved to dismiss the counterclaims and, on appeal, the Appellate Division dismissed the legal malpractice counterclaim, holding that the defendant/counterclaimant failed to demonstrate that she would have succeeded on the merits of the underlying divorce action "but for" the firm's alleged negligence, and failed to demonstrate that she was prejudiced by the firm's mid-trial motion to withdraw. The defendant/counterclaimant then served an amended answer containing counterclaims seeking the return of purportedly diverted escrow funds, breach of contract/refund of legal fees paid to the firm, refund of overcharges for fees paid to the firm, and violation of Judiciary Law §487. FKB moved to dismiss the new counterclaims, arguing that they are identical to those asserted in the legal malpractice counterclaim already dismissed by the Appellate Division and are therefore barred from further litigation by the law of the case doctrine. FKB also contended that the defendant/counterclaimant failed to plead a chronic or extreme pattern of legal delinquency as is required to sustain a Judiciary Law §487 violation claim.

Hon. Debra A. James of New York County Supreme Court agreed with our arguments, holding that the law of the case doctrine is applicable to the extent that the Appellate Division previously concluded that the defendant/counterclaimant's legal malpractice cause of action was insufficient, and that the firm's alleged diversion of escrow funds did not violate Judiciary Law §487, as a single act cannot constitute the chronic, extreme pattern of legal delinquency contemplated by Judiciary Law §487.

FKB's clients were represented by Joshua Sandberg. With a New York Law Journal account, the Decision can be read here.

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