Opinion
Index Number: 158302/2012
10-05-2015
David Fleisher, individually and as proposed executor and beneficiary and the Estate of Marilyn R. Lichtman, also known as Marilyn Lichtman Fleisher, Deceased, Plaintiffs, v. Ballon Stoll Bader & Nadler, PC, and Robert A. Klipstein, Esq., Defendants.
DECISION AND ORDER
Motion Seq. No.: 001
KENNEY, JOAN M., J.
Recitation, as required by CPLR 2219(a), of the papers considered in review of this motion to dismiss.
| Papers | Numbered |
|---|---|
| Notice of Motion, Affirmations, and Exhibits | 1-7 |
| Opposition Affirmation and Exhibits | 8-14 |
| Reply Memo of Law | 15-18 |
In this legal malpractice action, defendants, Ballon Stoll Bader & Nadler, PC (BSBN) and Robert A. Klipstein, Esq. (Klipstein) (collectively, BSBN), move for an Order, pursuant to CPLR 3211(a)(7), dismissing plaintiff's complaint.
Factual Background
On April 6, 2005, Marilyn Lichtman Fleisher (Mrs. Fleisher), deceased, retained the services of defendants BSBN for the purpose of estate planning, which included Medicaid planning for her and her parents. Plaintiff David Fleisher (Mr. Fleisher) is named under Mrs. Fleisher's last will and testament as the residuary beneficiary of her estate. Defendant Klipstein was appointed as executor of her estate.
Mrs. Fleisher owned a policy of life insurance (Unum Insurance Company Policy No. 00463955 [the policy]) which designated her mother, Mrs. Arline Lichtman (Mrs. Lichtman) as the beneficiary. Mrs. Fleisher also owned in trust a $15,000.00 certificate of deposit at Bank of America (the CD), designating Mrs. Lichtman as the beneficiary.
Mrs. Fleisher passed away on October 17, 2011. Pursuant to the Policy, Unum issued a check to Mrs. Lichtman for $201,194.52. On July 15, 2012, Bank of America issued a notice of renewal of the CD in trust for Mrs. Litchman for an automatic nine month term, with a present value of $15,603.52 earning 0.30% per annum.
Mrs. Litchman was a recipient of Medicaid benefits. She was in a nursing home towards the end of her life. Plaintiff alleges that defendants failed to identify the Policy and CD as assets owned by Mrs. Fleisher that would have an impact and effect on Mrs. Lichtman's eligibility for Medicaid benefits, and failed to plan Mrs. Fleisher's estate in a way that would maximize the value of her assets for her heirs and beneficiaries. Plaintiff contends that Mrs. Lichtman cannot accept the payment from Unum as it might be subject to a Medicaid lien and disqualify her from eligibility for certain medicaid benefits. Plaintiff further alleges that the Policy and CD would have been conveyed to Mrs. Fleisher's estate and would have ultimately passed to plaintiff as the residuary beneficiary if defendants had prevented the transfer of these assets to Mrs. Lichtman.
After the death of Mrs. Fleisher, defendant Klipstein petitioned the Court to appoint him as executor of the estate. Plaintiff objected. By stipulation dated March 28, 2014, defendant Klipstein renounced his appointment as Executor of Mrs. Fleisher's estate. Thereafter, the Honorable Diana A. Johnson, New York County Surrogate's Court, issued a decision stating that "letters testamentary shall issue to David Fleisher and Ruby Erkkila upon duly qualifying according to law. Letter of trusteeship shall issue to David Fleisher and Ruby Erkkila upon duly qualifying according to law." (Plaintiff's Exhibit F).
Plaintiff now brings 3 causes of action asserting: 1) legal malpractice; 2) breach of contract; and 3) declaratory judgment.
Arguments
Defendant moves to dismiss plaintiff's complaint in its entirety for failing to state a cause of action. Defendant asserts: 1) that plaintiff's legal malpractice claim must be dismissed because no attorney/client relationship existed between the parties and no actual or ascertainable damages have incurred; 2) that plaintiff's breach of contract claim is duplicative of the malpractice claim and must be dismissed; and 3) defendant also asserts that plaintiff's cause of action seeking declaratory judgment is moot because defendant Klipstein has renounced his appointment as executor.
Plaintiff argues that his legal malpractice claim is sufficiently pled to withstand CPLR 3211 scrutiny.
Discussion
When deciding whether or not a complaint should be dismissed pursuant to CPLR 3211(a)(7), the complaint must be construed in the light most favorable to the plaintiff, and all factual allegations must be accepted as true, limiting the inquiry to whether or not the complaint states, in some recognizable form, any cause of action known to our law (see, World Wide Adjustment Bureau et al., v Edward S. Gordon Company, Inc., et al., 111 AD2d 98 [1st Dept. 1985]). In assessing the sufficiency of the complaint, this court must also consider the allegations made in both the complaint and the accompanying affidavit, submitted in opposition to the motion, as true and resolve all inferences which reasonably flow therefrom, in favor of the plaintiff (Joel v Weber, 166 AD2d 130 [1st Dept. 1991]).
A motion to dismiss is made pursuant to CPLR 3211(a)(7), which allows such a motion on the ground that the pleading fails to state a cause of action. The sufficiency of a pleading to state a cause of action generally depends upon whether or not there is substantial compliance with CPLR 3013, which requires that statements in a pleading be sufficiently particular to give the court and parties notice of the transactions or occurrences intended to be proved and the material elements of each cause of action. Further, every pleading question should be approached in the light of CPLR 3026 requiring that pleadings shall be liberally construed and that defects shall be ignored if a substantial right of a party is not prejudiced. Thus, the burden is placed upon one who attacks a pleading for deficiencies in its allegations to show that he is prejudiced. "A motion to dismiss for failure to state a claim assumes the truth of the complaint's material allegations and whatever can be reasonably inferred therefrom. A motion to dismiss for failure to state a claim should be denied if, from the pleading's four corners, factual allegations are discerned which taken together manifest any cause of action cognizable at law." (McGill v Parker, 179 AD2d 98 [1st Dept. 1992]).
"In order to state a cause of action for legal malpractice, the complaint must set forth three elements: the negligence of the attorney; that the negligence was the proximate cause of the loss sustained; and actual damages" (Leder v Spiegel, 31 Ad3d 266, 267 [1st Dept 2006], affd 9 NY3d 836 [2007]). New York law imposes a "strict privity requirement to claims of legal malpractice; an attorney is not liable to a third party for negligence in performing services on behalf of his client," absent fraud, collusion, malicious acts or other circumstances (Federal Insurance Company v North American Specialty Insurance Company, 47 AD3d 52, 59 [1st Dept]). In the case of Estate of Schneider v Finmann, 15 NY3d 306, the Court of Appeals held that despite strict privity remaining a bar against beneficiaries' and other third-party individuals' malpractice claims absent fraud or other circumstances, a personal representative of the decedent's estate did have the capacity to maintain a malpractice against the estate planning attorney.
Here, plaintiff David Fleisher is suing both individually and as the proposed executor and beneficiary of the Estate of Marilyn R. Lichtman, also known as Marilyn Lichtman Fleisher, deceased. Individually as a beneficiary of the estate, plaintiff is not entitled to bring a cause of action against defendant attorneys due to lack of privity. Plaintiff is, however, entitled to bring a cause of action against defendant attorneys as a personal representative of the estate. Plaintiff submits a copy of a decision dated December 9, 2014, in which the Honorable Diana A. Johnson stated that "letters testamentary shall issue to David Fleisher and Ruby Erkkila upon duly qualifying according to law." (See Plaintiff's Exhibit F). Unfortunately, plaintiff failed to demonstrate that the "letters testamentary" were formally issued pursuant to the Surrogate's decision. Plaintiff, as a "proposed executor" (as noted in the caption of this case) is not entitled to maintain this action without the letters testamentary.
Even if the plaintiff were allowed to bring this action against defendant once the proper letters testamentary were issues, plaintiff must plead and prove actual, ascertainable damages to the estate as a result of an attorney's alleged malpractice. A complaint in a legal malpractice action will be dismissed pursuant to CPLR 3211(a)(7) where "it fails to plead specific factual allegations demonstrating that, but for the...defendant's alleged negligence...the plaintiff would not have incurred any damages" (Rudolf v Shayne, Dachs, Stanisci, Corker & Saucer, 8 NY3d 438, 441, 835 NYS2d 534, 867 NE2d 385). Proximate causation is a requisite element of a legal malpractice claim and it must be based on more than "mere speculation." Mere speculation about a loss resulting from an attorney's alleged omission is insufficient to sustain a prima facie case of legal malpractice (Giambrone v Bank of NY, 253 AD2d 786 [1998]).
Defendants maintain that plaintiff has not sustained actual or ascertainable damages, and that any allegations of damages are purely speculative. Defendants argue that the assets in question were never part of the estate as they were non-testamentary instruments established by Mrs. Fleisher for the benefit of her mother, and that plaintiff's presumption that had Mrs. Fleisher changed the named beneficiary on the Policy and CD, she would have named the plaintiff, is purely speculative. Furthermore, defendants argue that the claim for damages based on a possible future lien enforced by Medicaid based on the transfer of these assets is also speculative. Plaintiff has not alleged that any actual lien has been sought by Medicaid.
In opposition, plaintiff argues that Mrs. Fleisher's estate was damaged in the amount of $216,798.04, due to defendants' failure to properly advise Mrs. Fleisher to change the beneficiary of the life insurance policy and CD in order to maximize the value of the estate's assets for the benefit of its beneficiaries. Plaintiff alleges that defendant attorneys were hired for the purpose of both estate planning and Medicaid planning for both Mrs. Fleisher and her mother. Plaintiff also claims that, pursuant to the retainer agreement, defendants were to advise on and effectuate transfers of assets in order to maximize the value of the estate and to preserve Ms. Lichtman's eligibility for Medicaid benefits, but failed to do so, which resulted in the loss of $216,798.04 in assets to the estate and its beneficiaries.
In order to establish proximate cause in a legal malpractice action, plaintiff must demonstrate that "but for" the defendants' negligence, Mrs. Fleisher would not have transferred any assets to her mother, and instead that these assets would have become part of the estate and ultimately reach plaintiff as the beneficiary. Here, plaintiff cannot prove that "but for" the defendants' advice, or lack thereof, Mrs. Fleisher would have changed the named beneficiary on the CD and trust from her mother to plaintiff. Plaintiff's complaint merely alleges, in a conclusory fashion, that defendants' deviation from "good and accepted" legal practices resulted in the estate being devalued in the amount of $216,000.00. Accordingly, the legal malpractice action must be dismissed.
Plaintiff's breach of contract cause of action must also be dismissed. "While it is true that a breach of contract claim need not be based on an express promise to the client (Santulli v Englert, Reilly & McHugh, 78 NY2d 700, 706), a breach of contract claim premised on the attorney's failure to exercise due care or to abide by general professional standards is nothing but a redundant pleading of the malpractice claim" (Sage Realty Corp. v Proskauer Rose, 251 AD2d 35, 38-39). Here, plaintiff's second cause of action simply reiterates the allegations of his legal malpractice claim and shows no distinct damages. Therefore, the second cause of action is dismissed as duplicative of the legal malpractice claim.
Plaintiff's third cause of action seeking a declaratory judgment disqualifying defendant Klipstein as executor of the Estate of Marilyn Fleisher is denied, as moot. Defendant has already renounced his appointment as executor by stipulation dated March 28, 2014. Accordingly, it is
ORDERED that defendant's motion is granted in its entirety; and it is further
ORDERED that the Clerk of the Court shall enter judgment in favor of defendants Ballon Stoll Bader & Nadler, PC, and Robert A. Klipstein, Esq., and against plaintiff, dismissing this action as against the movants. Dated: 10/5/15
ENTER:
/s/_________
Joan M. Kenney, J.S.C.