On September 6, 2024, Justice Chan of the New York County Commercial Division issued a decision in FTF Lending, LLC v. Mavrides, Moyal, Packman & Sadkin, LLP, 2024 NY Slip Op 33115(U), holding that despite counsel’s negligence, a client was not entitled to summary judgment on its legal malpractice claim because of questions of fact regarding whether it was the client’s negligence that was the proximate cause of its loss, explaining:
Nevertheless, summary judgment in FTF’s favor is not warranted. The record undoubtedly supports a conclusion that defendants had a duty to properly review the Title Reports and ensure FTF’s security interest in the Property. But there is also evidence in the record that FTF had its own due diligence obligations as part of the Loan Transaction. It was through this diligence that FTF seemingly obtained the credit reports and background checks identifying certain details about Samuels’s checkered financial history and potential liens/foreclosure actions on the Property. Yet, despite being on notice of these issues-which seemingly conflicted with its own underwriting requirements for approving borrowers FTF nevertheless approved the Loan. Presented with this evidence and testimony, a trier of fact could determine that, notwithstanding defendants’ negligent conduct, the proximate cause of FTF’s losses following Borrowers’ default was its own deficient diligence efforts. As a result, although a close call, defendants proffered just enough evidence in admissible form to create a material issue of fact as to proximate causation.
(Internal quotations and citations omitted).