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NY: Legal Malpractice for Failure to Cancel a Real Estate Contract?

Bells v. Foster, 83 A.D.3d 876, 922 N.Y.S.2d 124 (2011)

NY: Underlying Real Estate Contract Cancellation

Student Contributor: Alexis Trezza

Facts: Defendant represented plaintiff in a real estate action. Plaintiff (purchaser) entered into a contract for the sale of certain real property. She was given forty-five days in which to secure a mortgage. In the event that she was unable to secure same, plaintiff was allowed to cancel the contract and get her down payment back as long as she did so before the forty-five day period ended. The closing ultimately did not occur, and the seller retained the plaintiff’s down payment as liquidated damages because defendant did not cancel the contract of sale on behalf of plaintiff within the required period of time (even though the period of time in which plaintiff could cancel the sale was extended). Plaintiff retained new counsel, commenced an action against the seller and ultimately was able to get a portion of her down payment back. Plaintiff then brought an action against defendant for legal malpractice. After defendant interposed an answer, plaintiff made a motion for summary judgment on the issue of liability, and alleged that defendant’s failure to timely cancel the contract of sale on her behalf was malpractice as a matter of law. Defendant opposed plaintiff’s motion and simultaneously made a cross-motion for summary judgment in order to dismiss plaintiff’s complaint. Defendant alleged that plaintiff, by her own admission, was in breach of the contract of sale and, as a result, her own actions were the only proximate cause of the damages she sustained. Plaintiff’s motion was granted and defendant’s motion was denied.

Issue: (a) Was plaintiff’s motion for summary judgment properly granted? (b) Was defendant’s cross motion for summary judgment properly denied?

Ruling: (a) No. “In an action to recover damages for legal malpractice, a plaintiff must demonstrate that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the attorney’s breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages.” In order “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.” Here, plaintiff failed to establish her prima facie entitlement to judgment as a matter of law because she failed to demonstrate that any negligence on the defendant’s part in failing to timely cancel the contract of sale on her behalf was the sole proximate cause of her damages. As such, the Court erred in granting her motion for summary judgment on liability. (b) Yes. Defendant failed to show that the plaintiff was unable to prove at least one of the essential elements of her legal malpractice cause of action.

Lesson: In order to have a motion for summary judgment granted and sustained, plaintiff must demonstrate that there are no triable issues of fact as to each element of her cause of action for legal malpractice, including proximate cause. 

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Posted in: Damages, New York, Proximate Cause