Legal Malpractice

Promissory Notes and Legal Malpractice

By (Andrew Lavoott Bluestone)

Plaintiff retains attorney to handle promissory note case, and a default judgment is obtained.  Defendant owns real property, yet no lis pendens is filed.  Is this legal malpractice?  In Ali v Fink
2009 NY Slip Op 08766 ;Decided on November 24, 2009 ; Appellate Division, Second Department  we see the following:
"Several months later, the defendant commenced a second action on the plaintiff's behalf, seeking to set aside a transfer of real property which the debtor had allegedly made to impede the plaintiff's ability to recover under the promissory notes (hereinafter the fraudulent conveyance action). Although the defendant obtained a default judgment against the debtor and the transferee in the fraudulent conveyance action, while that action was pending, title to the property was transferred twice more. The plaintiff subsequently commenced this legal malpractice action against the defendant, alleging, inter alia, that he had negligently failed to file a notice of pendency upon commencement of the fraudulent conveyance action, and that his failure to do so had allowed title to the subject property to be transferred to bona fide purchasers, thus effectively putting the property out of reach as a means of enforcing her judgment in the collection action."

"Contrary to the defendant's contention, the Supreme Court properly concluded that he failed to sustain his prima facie burden of demonstrating that the plaintiff would be unable to prove one of the essential elements of her malpractice cause of action. Although the defendant contends that the plaintiff cannot establish the element of causation because she could not have prevailed on the merits in the underlying collection and fraudulent conveyance actions, neither of the default judgments have been set aside. Under these circumstances, the Supreme Court correctly determined that the plaintiff need not prove that she would have prevailed on the merits in those actions in order to establish the element of causation. "

Full post as published by New York Attorney Malpractice Blog on November 30, 2009 (boomark / email).