| Reichenbaum v Cilmi |
| 2009 NY Slip Op 05954 [64 AD3d 693] |
| July 21, 2009 |
| Appellate Division, Second Department |
| Eric P. Reichenbaum et al., Appellants, v John Cilmi et al.,Respondents. |
—[*1] Traub Lieberman Straus & Shrewsberry LLP, Hawthorne, N.Y. (Lisa L. Shrewsberry ofcounsel), for respondent.
In an action to recover damages for legal malpractice, breach of fiduciary duty, and fraud,the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court,Westchester County (Rudolph, J.), entered April 21, 2008, as granted those branches of thedefendants' motion which were to dismiss the amended complaint pursuant to CPLR 3016 (b)and 3211 (a) (5) and (7).
Ordered that the order is affirmed insofar as appealed from, with costs.
The plaintiffs alleged in the amended complaint that in 1998 the plaintiff EPR Capital, LLC(hereinafter EPR), whose managing member is the plaintiff Eric P. Reichenbaum, entered into anoperating agreement with nonparty Frank DeFalco to create an entity known as Boerum PlaceProperties, LLC (hereinafter BPP). During the preparation of the operating agreement, DeFalcowas represented by the defendants, who are attorneys, and EPR was represented by separatecounsel. DeFalco then transferred his interest in BPP to an entity in which he was the managingmember, SMD Capital Group, LLC (hereinafter SMD).
In 1999 and 2000 EPR and SMD negotiated, and ultimately signed, an amended operatingagreement for BPP. During that process, both parties were represented by the defendants. Alsoduring 1999 and 2000 EPR and SMD entered into five other operating agreements, creating fiveadditional limited liability companies. The defendants represented both EPR and SMD duringthe preparation of those agreements. Since the defendants had previously represented DeFalco,the plaintiffs claim that the defendants drafted the amended operating agreement and the fivenew operating agreements in his favor, causing the plaintiffs to lose business opportunities. Theplaintiffs claim that the defendants did not disclose that they had a conflict of interest, or takeany measures to resolve the conflict.
Affording the complaint a liberal construction, accepting all facts as alleged in the amendedcomplaint to be true, and according the plaintiffs the benefit of every favorable inference asrequired on a motion to dismiss pursuant to CPLR 3211 (a) (7), the amended complaint fails tostate a cause of action (see Leon v Martinez, 84 NY2d 83 [1994]; see also Fishbergerv Voss, 51 AD3d [*2]627 [2008]). The factual allegations insupport of the cause of action to recover damages for breach of fiduciary duty are duplicative ofthe allegations in support of the cause of action to recover damages for legal malpractice, as bothcauses of action arise from the same facts and allege the same damages (see Kvetnaya v Tylo, 49 AD3d608 [2008]; Daniels v Lebit, 299 AD2d 310 [2002]). The factual allegations insupport of the cause of action to recover damages for legal malpractice do not establish thenecessary element of causation that "but for" the defendants' alleged acts or omissions, theplaintiffs would not have incurred any damages (see Fireman's Fund Ins. Co. v Farrell, 57 AD3d 721 [2008]). Thefactual allegations in support of the cause of action to recover damages for fraud fail to meet theheightened pleading requirement of CPLR 3016 (b) (see Kline v Taukpoint Realty Corp.,302 AD2d 433 [2003]) and, in any event, the "mere failure to disclose malpractice does notgive rise to a cause of action alleging fraud or deceit separate from the underlying malpracticecause of action" (Ferdinand v Crecca &Blair, 5 AD3d 538, 539 [2004]).
The plaintiffs' remaining contentions are without merit. Mastro, J.P., Dillon, Santucci andBalkin, JJ., concur.