On December 20, 2022, Justice Chan of the New York County Commercial Division issued a decision in Gad v. Kramer Levin Naftalis & Frankel, LLP, 2022 NY Slip Op. 34357(U), dismissing a legal malpractice claim for failure adequately to allege causation, explaining:
An action for legal malpractice requires proof of three elements: the negligence of the attorney; that the negligence was the proximate cause of the loss sustained; and proof of actual damages. To satisfy the pleading requirement for causation, a plaintiff must allege that but for the attorney’s conduct or nonfeasance, the client would have prevailed in the underlying action or would not have sustained any ascertainable damages. Regarding damages, to survive a pre-answer dismissal motion, a pleading need only state allegations from which damages attributable to the defendant’s conduct or nonfeasance may be reasonably inferred. However, conclusory allegations of damages predicated on speculation cannot suffice for a legal malpractice action.
Under these standards, the court finds that the amended complaint fails to adequately plead causation. Notably, even if Albert had been informed by defendants of the content and risks of the settlement terms and had refused to sign the documents, the settlement agreement would still have become effective. Under Section 1 of the settlement agreement, the settlement stipulation shall become effective upon the approval of Almod board of directors and shall be binding on Albert regardless of whether he executes it or not, so long as Donna and Morris both execute the agreement. In fact, Donna and Morris executed the agreement and the board of directors approved it. Thus, the amended complaint does not sufficiently allege that but for defendants’ alleged negligence related to their failure to inform Albert of the terms and risks of the settlement documents, the settlement agreement would not have become effective and he would not have been damaged by it.
(Internal quotations and citations omitted).