Commercial Litigation and Arbitration

Summary Judgment — Failure to Document Conclusory Denial of Statement of Uncontested Fact = Admission — Causation in Legal Malpractice Action, and the Role of Expert Testimony

Joseph DelGreco & Co. v. DLA Piper LLP, 2012 U.S. Dist. LEXIS 142017 (S.D.N.Y. Oct. 1, 2012) (Engelmayer, J.):

Defendant DLA Piper LLP ("DLA"), a law firm, moves for summary judgment against the Complaint of plaintiffs Joseph DelGreco and DelGreco & Co. (collectively, "DelGreco" or "plaintiffs"), which alleges that DLA committed various acts of legal malpractice while representing plaintiffs. For the following reasons, DLA's motion is GRANTED. ***

Footnote 1. The Court's account of the underlying facts of this case is drawn from the parties' pleadings and their submissions in support of and in opposition to the instant motion--specifically, the Declaration of Jean E. Lewis in Support of Defendant's Motion for Summary Judgment ("Lewis Decl.") (Dkt. 31) and attached exhibits; the Declaration of Hartley T. Bernstein in Opposition to Defendant's Motion for Summary Judgment ("Bernstein Decl.") (Dkt. 34) and attached exhibits; the Defendant's Local Rule 56.1 Statement of Material Facts (Dkt. 32) ("Def.'s 56.1"); and the Plaintiffs' Local Rule 56.1 Statement of Material Facts (Dkt. 37) ("Pls.' 56.1"). Where facts stated in a party's Statement of Material Facts are supported by testimonial or documentary evidence, and denied by a conclusory statement by the other party without citation to conflicting testimonial or documentary evidence, the Court finds such facts to be true. See S.D.N.Y. Local Rule 56.1(c) ("Each numbered paragraph in the statement of material facts set forth in the statement required to be served by the moving party will be deemed to be admitted for purposes of the motion unless specifically controverted by a correspondingly numbered paragraph in the statement required to be served by the opposing party."); id. at 56.1(d) ("Each statement by the movant or opponent . . . controverting any statement of material fact[] must be followed by citation to evidence which would be admissible, set forth as required by Fed. R. Civ. P. 56(c)."). ***

[F]or DelGreco's claim of malpractice to survive summary judgment, DelGreco must *** adduce sufficient evidence of causation — i.e., evidence on which a reasonable jury could find that DLA's breach of duty proximately caused it damages. Nordwind, 584 F.3d at 429; Rubens II, 527 F.3d at 255. "'[T]he failure to demonstrate proximate cause mandates the dismissal of a legal malpractice action regardless of whether the attorney was negligent.'" Capogrosso, 2010 WL 2076962, at *5 (quoting Tydings v. Greenfield, Stein & Senior, LLP, 843 N.Y.S.2d 538, 540 (1st Dep't 2007)). The causation requirement is "a high bar to attorney malpractice liability" and "'seeks to insure a tight causal relationship exists between the claimed injuries and the alleged malpractice, and demands a nexus between loss and injury.'" Flutie Bros. v. Hayes, No. 04 Civ. 4187 (DAB), 2006 WL 1379594, at *5 (S.D.N.Y. May 18, 2006) (quoting Sloane v. Reich, No. 90 Civ. 8187 (SS), 1994 WL 88008, at *3 (S.D.N.Y. Mar. 11, 1994)).

In the paradigmatic malpractice case, the allegation is that the defendant's professional lapses caused the plaintiff to lose an underlying legal action. It is well-established that a plaintiff in these circumstances must show but-for causation — that "but for" the attorney's negligence, the plaintiff would have prevailed in the underlying action. See D'Jamoos, 340 F. App'x at 739; Tydings, 843 N.Y.S.2d at 540.

DelGreco argues that a different standard should apply here, and that it need show only that that attorney negligence was "a proximate cause" of harm to it — i.e., one independent cause of such harm. Pls.' Br. 12-13. In support of this claim, DelGreco relies on Barnett v. Schwartz, 848 N.Y.S.2d 663, 668 (2d Dep't 2007). See id. But Barnett recognizes that:

In the main, the cases from the Court of Appeals, including the most recent, do not expressly require that the negligence be either "the" or "a" proximate cause of damages, but require proof that, "but for" the negligence of the defendant-attorney, the plaintiff-client would have prevailed in the underlying action (in a classic lawsuit-within-a-lawsuit scenario) or would not have incurred damages (in an action alleging negligent advice, etc.)

Id. at 668; accord Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 438, 442 (2007) ("To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer's negligence."); AmBase Corp. v. Davis Polk & Wardwell, 8 N.Y.3d 428, 434 (2007) ("[A] plaintiff must establish . . . that the plaintiff would have succeeded on the merits of the underlying action 'but for' the attorney's negligence.").

A point of clarification is useful here: Although courts commonly use the term "proximate cause" to describe the requisite element of a legal malpractice claim, those same courts, applying that standard, go on to inquire whether the attorney's negligence was a "but for" cause of harm to the client. See, e.g., Allianz Ins. Co., 416 F.3d at 118 ("'To establish the element[] of proximate cause . . . , a plaintiff must show that but for the defendant's negligence, he or she would have prevailed in the underlying action or would not have sustained any damages.'" (emphasis added) (quoting Aversa, 757 N.Y.S.2d at 574)); Wolfson, 844 F. Supp. 2d at 356-57 (collecting cases); accord O'Callaghan v. Brunelle, 923 N.Y.S.2d 89, 91 (1st Dep't 2011), appeal denied, 18 N.Y.3d 804 (2012) ("[Plaintiff] failed to establish proximate cause in that but for defendants' alleged malpractice, he could have prevailed on the underlying claim." (emphasis added) (citation omitted)); Bishop v. Maurer, 823 N.Y.S.2d 366, 367 (1st Dep't 2006), aff'd, 9 N.Y.3d 910 (2007); Reibman v. Senie, 756 N.Y.S.2d 164, 165 (1st Dep't 2003); Zarin v. Reid & Priest, 585 N.Y.S.2d 379, 381 (1st Dep't 1992). The Court, accordingly, measures the evidence against the standard of but-for causation, recognizing that courts have used inconsistent vocabulary to capture this concept.

Turning to the facts at hand, DelGreco's claim is that, but for DLA's negligence in connection with the transaction, it would not have been in default on July 2, 2008, when Eastwest sent its notice of material breach, and thus would not have lost at the subsequent arbitration. Pls.' Br. 16-18.

Expert testimony can be used to show causation, where the connection between the negligence and the injury would not be clear to the ordinary fact-finder. See D'Jamoos, 340 F. App'x at 739 (affirming grant of summary judgment for defendant where "plaintiff has failed to put forth evidence that would permit a rational fact-finder to conclude that [defendant's] conduct proximately caused damages to plaintiff"); Stonewell Corp., 678 F. Supp. 2d at 209 ("Expert testimony is sometimes required to establish the standard of care in the legal profession, whether the defendant-attorney failed to comply with that standard, and whether the negligence proximately caused any injury to the plaintiff-client." (citation omitted)); Kranis, 178 F. Supp. 2d at 335 ("[I]t would not be clear without expert testimony if such negligence was the proximate cause of any alleged damages.").

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