FKB’s Spencer A. Richards and Dylan H. Diamond successfully obtained a favorable decision from the New York State Appellate Division, First Department, unanimously affirming Justice David B. Cohen’s decision granting a pre-answer dismissal of the complaint against FKB’s client pursuant to CPLR § 3211(a)(7).

The complaint arose from FKB’s client’s representation of a former trader in a FINRA arbitration. Plaintiffs alleged that FKB’s client committed legal malpractice and related wrongdoing in connection with the handling of evidence concerning an alleged $7.2 million setoff to the arbitration award. FKB successfully obtained dismissal of the legal malpractice complaint, and Plaintiffs appealed.

On appeal, FKB primarily argued that Plaintiffs failed to establish proximate cause because the FINRA arbitration panel had considered the evidence regarding the alleged setoff. The Appellate Division agreed with all of FKB’s arguments on appeal and held that Plaintiffs failed to adequately plead proximate cause in support of the legal malpractice claims. Specifically, the Appellate Division held that Plaintiffs failed to provide any support that the evidence was not meaningfully considered. The Appellate Division further agreed with FKB’s argument that, even assuming that the evidence had not been meaningfully considered, Plaintiffs failed to demonstrate that the FINRA panel would have been persuaded by the merits of the purported setoff.

In addition, the Appellate Division affirmed the dismissal of Plaintiffs’ remaining claims, including allegations of chairperson bias, a duplicative breach of fiduciary duty claim, and a breach of contract claim premised on alleged improper billing.

If you have any questions about this decision, or the defense of attorneys in general, please contact Spencer A. Richards.