Global Bus. Inst. v Rivkin Radler, LLP
2012 NY Slip Op 31057(U)
April 16, 2012
Supreme Court, New York County
Docket Number: 104918/06
Judge: Doris Ling-Cohan
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SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY
Index Number 1 10491 812006
GLOBAL BUSINESS INSTITUTE
RlVKlN RADLER LLP
SEQUENCE NUMBER : 007
MOTION SEQ. NO.
PARTIAL SUMMARY JUDGMENT
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: IAS PART 36
GLOBAL BUSINESS INSTITUTE,
COUNlY CLERK'S OFFICE
In this legal malpractice action, defendant moves for partial summary judgment to
dismiss a portion of the amended complaint (motion sequence number 007). For the following
reasons, this motion is denied.
Plaintiff Global Business Institute (Global) is a not-for-profit corporation that operates a
post-secondary vocational school. See Notice of Motion, Contino Affirmation, 7 3. Defendant
Rivkin Radler, LLP (Rivkin Radler) is a law fr that formerly represented Global in negotiating
a lease (the lease) for commercial space in a building (the building) located at 145 East 125'h
Street in the County, City and State of New York. Id., 7 10. Global executed the lease on
October 18, 2004; however, as a result of construction delays suffered by the landlord, nonparty
RE Broadway Real Estate 11, LLC (RE), the building did not receive its certificate of occupancy
for several years, and Global did not take possession of its commercial space until March 2008.
Id.; Exhibit 1; Hatten Affidavit in Opposition, 7 15. Nonetheless, during that period before
Global was able to open for business, Global was liable to RE for tax escalation payments. Id., 7
17. Global now claims that Rivkin Radler committed legal malpractice during the course of the
lease negotiation by failing to ensure that it included provisions that would have protected Global
against suffering both lost profits and tax liability to RE. See Notice of Motion, Contino
Affirmation, 7 10. The pertinent portions of the lease herein are section 4 (B), which contains the
tax escalation provisions, and the “work letter,” annexed as a rider, that sets forth RE’S
responsibilities regarding the renovation of the building and obtaining a certificate of occupancy.
Id.; Exhibit 1. Global maintains that, while negotiating the lease, Rivkin Radler improperly
exposed it to liability to RE for taxes by failing to ensure that the “base rent date” in the tax
escalation clause coincided with the initial date that Global took possession of the premises, and
failed to protect it against loss of business by omitting a “time is of the essence” provision from
the work letter.
Global commenced this action on April 7,2006 by serving a complaint that set forth one
cause of action for negligence/legal malpractice. See Notice of Motion, Exhibit 2. Rivkin Radler
answered on May 31,2006. Id.; Exhibit 3. Thereafter, Global served an amended complaint on
March 17,20 1 1 that still sets forth a sole claim for negligence/legal malpractice, but specifies
that such negligence/malpractice was committed in connection with: 1) the drafting of the work
letter annexed to the lease that failed to specify that time was of the essence; and 2) the drafting
of the tax escalation clause. See Notice of Motion, Exhibit 10. Rivkin Radler served an
amended answer on May 24,201 1. Id.; Exhibit 1 1. Now Rivkin Radler moves for summary
judgment to dismiss so much of Global’s amended complaint that seeks damages for lost profits,
consequential damages, and tax escalation charges (motion sequence number 007).
When seeking summary judgment, the moving party bears the burden of proving, by
competent, admissible evidence, that no material and triable issues of fact exist. See e.g.
Winegrad v New York Univ. Med. Ctr., 64 NY2d 85 1 (1985);Sokolow, Dunaud, Mercadier &
Curreras LLP v Lucher, 299 AD2d 64 (1 st Dept 2002). Once this showing has been made, the
burden shifts to the party opposing the motion to produce evidentiary proof, in admissible form,
sufficient to establish the existence of material issues of fact which require a trial of the action.
See e.g. Zuckerman v City o New York, 49 NY2d 557 (1980); Pemberton v New York City Tr.
Auth., 304 AD2d 340 (1” Dept 2003). Here, Rivkin Radler has failed to sustain its burden of
In its motion, Rivkin Radler first argues that “the doctrine of law of the case mandates
dismissal of plaintiffs substantial completiodlost profdconsequential damages claims.” See
Defendant’s Memorandum of Law, at 2-5. Rivkin Radler asserts that the Appellate Division,
First Department’s reversal of the Jan. 14,2010 decision applied only to Global’s tax escalation
claims. Id. Global responds that the doctrine of law of the case is inapplicable to this situation,
because it applies only to issues that the plaintiff had a full and fair opportunity to litigate on
their merits, and argues that this court’s earlier decision did not speak to the merits of either of
the amendments that it sought to make to the damages portion of its negligence/legal malpractice
claim. See Plaintiffs Memorandum of Law, at 13-15. It is an accurate statement of the law that
the doctrine of law of the case constitutes a “the proscription against relitigation of an issue
previously decided by a judge of coordinate jurisdiction,’’ and “presumes that the parties were
afforded a full and fair opportunity to litigate the issue in the course of the earlier proceedings.”
Hass & Goftlieb v Sook H Lee, 11 AD3d 230, 231 (1” Dept 2004)(internal quotations omitted).
Global is also correct to note that the doctrine applies against a court’s relitigation of the
decisions of “a judge of coordinate jurisdiction,” and not against its own rulings, which may be
reconsidered on a motion to renew or reargue pursuant to CPLR 222 1, See Plaintiffs
Memorandum of Law, at 14-15. However, both parties’ arguments based on the doctrine of law
of the case are inapposite herein, since the First Department’s ruling reversing the Jan. 14,2010
decision clearly stated that it applied to both “failure to sufficiently advise [Global] of the
consequences of the tax escalation clause in the lease” and “the additional damages sought.”
Global Business Institute v Rivkin Radler, LLP, 82 AD3d at 553-554. Thus, Rivkin Radler’s
argument proceeds from an inaccurate reading of the First Department’s decision, and this court
rejects that argument as meritless.
Rivkin Radler next argues that both Global’s “substantial completiodlost
profitkonsequential damages claims and tax escalation claims are substantively insufficient as a
matter of law,” and should be dismissed on that ground. See Defendant’s Memorandum of Law,
at 5-17. Global responds that there are issues of fact as to each element of its claims that
preclude summary judgment and dismissal at this juncture. See Plaintiffs Memorandum of Law,
at 15-23. After careful consideration, the court finds for Global.
In Leder v Spiegel(3 1 AD3d 246,267 [ 1” Dept 20061, a 9 NY3d 836 ), the
Appellate Division, First Department, noted that “[iln 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.” Further, with
respect to the element of proximate cause, the First Department noted in Fletcher v Boies,
Schiller h Flexner, LLP (75 AD3d 469,469 [lntDept 20103) that a plaintiff m s demonstrate
that “but for defendants’ malpractice in failing to advise her properly, she ‘would have avoided
some actual ascertainable damage,’ including sufficient detail as to the ‘nature o f the underlying
claim [internal citations omitted] .” Here, with respect to what it terms Global’s “substantial
completiodlost profitkonsequential damages claims,” Rivkin Radler first argues that there was
no “but for” causation, because the deposition testimony of RE’S manager, Steven Kessner
(Kessner), shows that RE would not have agreed to include a provision in the lease that would
have exposed RE to liability to Global for lost profits etc. due to construction delays. See
Defendant’s Memorandum of Law, at 7-8; Notice of Motion, Exhibit 18. Global responds that
Kessner’s deposition testimony actually never touched this issue, and was instead directed solely
to the question of when the “base year” for the lease would be set. See Plaintiff‘s Memorandum
of Law, at 17- 18. The court agrees with Global’s reading of Kessner’s deposition testimony.
The court also notes that it is axiomatic that issues of “witness credibility are not appropriately
resolved on a motion for summary judgment”. Suntos v Temco Service Industries, Inc.,295
AD2d 2 18,218-219 (1” Dept 2002). Therefore, the court rejects Rivkin Radler’s proximate
causation argument with respect to Global’s substantial completiodlost profit/consequential
Rivkin Radler next argues that the element of attorney negligence was not present with
respect to those claims because it did not depart “from generally accepted standards of practice”
during the negotiation of the lease. See Defendant’s Memorandum of Law, at 8-9. Rivkin
Radler supports this argument with an affidavit from one Lloyd Shor (Shor), who is described as
a “commercial leasing expert.” See Shor Reply Affidavit, f 10. Global replies that Rivkin
Radler did breach its duties to Global by departing from generally accepted standards of lease
negotiating practice, and has presented affidavits from “damages expert” Morton Cohen (Cohen)
and attorney Martin Stein (Stein) to support its allegations. See Plaintiff‘s Memorandum of Law,
at 16-17; Cohen and Stein Affidavits in Opposition. Without delving into the merits at this
juncture, the court merely concludes that the competing experts affidavits indicate the existence
of an issue of fact as to whether Rivkin Radler was negligent during the lease negotiations, and
that that issue precludes any grant of summary judgment. Therefore, for the purposes of this
motion, the court rejects Rivkin Radler’s claim of no negligence.
Finally, with respect to Global’s substantial completiodlost profitkonsequential damages
claims, Rivkin Radler argues that the damages element is insufficient because it is based on
speculation. See Defendant’s Memorandum of Law, at 9- 1 1. Global responds that either lost
profits or consequential damages are capable of being measured via formulae discussed by its
experts in their affidavits. See Plaintiffs Memorandum of Law, at 2 1-23. “The damages
claimed in a legal malpractice action must be ‘actual and ascertainable’ resulting from the
proximate cause of the attorney’s negligence [internal citation omitted].” Zarin v Reid & Priest,
184 AD2d 385,387-388 (1“ Dept 1992). The court agrees that lost profits and consequential
damages as a result of an almost four-year delay in being able to enter the lease premises are the
sorts of damages that are susceptible of calculation. See e.g. Broadway 500 West Monroe Mezz
II LLC v Transwestern Mezzanine Realty Partners Il, LLC, 80 AD3d 483,484 (lstDept 201 1)
(“even lost profits that are difficult to ascertain can be compensated by money damages ”); Plato
General Const. Corp./EMCO Tech Const. Carp. v Dormitory Authoriw o State of New York, 89
AD3d 8 19, 825 (2”d
Dept 201 1) (“plaintiff must furnish some rational basis for the court to
estimate those damages [caused by a defendant’s delays], although obviously a precise measure
is neither possible nor required”). Therefore, the court rejects Rivkin Radler’s argument. The
court also rejects Rivkin Radler’s alternative argument, that the “doctrine of avoidable
consequences’’precludes Global from recovering lost profits or consequential damages, because
that argument is based on the premise that Global ought not to have sought a Yellowstone
injunction to secure its right to the premises, but should have instead negotiated further with RE.
See Defendant’s Memorandum of Law, at 1 1. Global was certainly within its rights to seek a
Yellowstone injunction against RE. Accordingly, Rivkin Radler’s motion should be denied with
respect to Global’s substantial completiodlost profit/consequential damages claims.
With respect to Global’s tax escalation claim, Rivkin Radler once again argues that there
was no “but for” causation because Kessner would not have agreed to a different base year for
fixing Global’s tax payments. See Defendant’s Memorandum of Law, at 12-15. However, this
argument is clearly inapposite since Global has not alleged that it suffered damages as a result of
Rivkin Radler’s failure to negotiate a different tax year, but because of Rivkin Radler’s failure to
ensure that, regardless of the tax year, Global’s tax payment responsibilities would not begin
until it took possession of the premises. See Notice of Motion, Exhibit 10 (amended Complaint),
Therefore, the court rejects this argument.
Rivkin Radler next reprises its argument that it did not commit negligence with respect to
Global’s t x escalation claim because it did not depart “from generally accepted standards of
practice” during the negotiation of the lease. See Defendant’s Memorandum of Law, at 15-16.
The court rejects this argument also for the reasons discussed above; Le., that the competing
experts’ affidavits herein disclose an issue of fact as to what the “generally accepted standards of
practice” for commercial lease negotiating during the operative period actually were.
Finally, Rivkin Radler argues that Global’s purported damages from its tax escalation
claim are legally insufficient because they are too speculative. Id. at 16-17. It is difficult to see
what is speculative about the amounts fixed in the lease that Global was obligated to pay during
the period of 2004-2008. Therefore, the court rejects Rivkin Radler’s final argument and the
motion is denied with respect to Global’s tax escalation claim. Thus, Rivkin Radler’s motion is
denied in hll.
Accordingly, for the foregoing reasons it is hereby
ORDERED that the motion, pursuant to CPLR 3212, of defendant Rivkin Radler, LLP is
Dated: New York, New York
Hon. Doris Ling-Cohan, J.S.C.
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COUNTY CLERK’S OFFICE