| Vermont Mut. Ins. Co. v McCabe & Mack, LLP |
| 2013 NY Slip Op 02392 [105 AD3d 837] |
| April 10, 2013 |
| Appellate Division, Second Department |
| Vermont Mutual Insurance Company,Appellant, v McCabe & Mack, LLP, et al.,Respondents. |
—[*1] Costello, Cooney & Fearon, PLLC, Syracuse, N.Y. (Christopher G. Todd ofcounsel), for respondents.
In an action to recover damages for legal malpractice, breach of contract, negligentsupervision, and fraud, the plaintiff appeals, as limited by its brief, from so much of anorder of the Supreme Court, Dutchess County (Brands, J.), dated November 29, 2011, asgranted those branches of the defendants' motion which were pursuant to CPLR 3211 (a)(7) to dismiss the causes of action alleging breach of contract, negligent supervision, andfraud.
Ordered that the order is modified, on the law, by deleting the provision thereofgranting that branch of the defendants' motion which was pursuant to CPLR 3211 (a) (7)to dismiss the causes of action alleging fraud, and substituting therefor a provisiondenying that branch of the motion; as so modified, the order is affirmed insofar asappealed from, without costs or disbursements.
The plaintiff commenced this action to recover damages arising from the defendants'legal representation of it in an underlying subrogation action. In its complaint, theplaintiff alleged that the defendants committed legal malpractice in failing to timelypursue a default judgment against the defendants in the underlying subrogation action.The plaintiff also interposed separate causes of action alleging breach of contract,negligent supervision, and fraud. With regard to the fraud causes of action, the plaintiffalleged that the defendants committed fraud by misrepresenting that they "made a motionfor a default judgment" when they "never made, filed, or drafted" such a motion, and thatthey billed the plaintiff for drafting the motion. The plaintiff sought damages in the sumof $216,632.25, the same sum sought in the causes of action alleging legal malpractice,in addition to "additional damages, separate and distinct from the underlyingmalpractice."
After issue had been joined, but prior to the completion of discovery, the defendantsmoved, inter alia, pursuant to CPLR 3211 (a) (7), to dismiss the causes of action allegingbreach of contract, negligent supervision, and fraud on the basis that they were"duplicative and redundant" of the causes of action alleging legal malpractice or, in thealternative, to dismiss the causes of action alleging fraud on the basis that the plaintifffailed to assert facts upon which a viable fraud claim could be sustained. The SupremeCourt granted those branches of the motion which were to dismiss [*2]the causes of action alleging breach of contract andnegligent supervision as duplicative of the causes of action alleging legal malpractice.The court also granted that branch of the motion which was to dismiss the causes ofaction alleging fraud; however, the court did so solely on the basis of the defendants'representation to the court that all sums billed to the plaintiff for the drafting of themotion for a default judgment in the underlying subrogation action had been "writtenoff," and the plaintiff never paid the defendants for those services.
"When a party moves to dismiss a complaint pursuant to CPLR 3211 (a) (7), thestandard is whether the pleading states a cause of action, not whether the proponent ofthe pleading has a cause of action" (Sokol v Leader, 74 AD3d 1180, 1180-1181 [2010]; seeGuggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]). "In considering such amotion, the court must accept the facts as alleged in the complaint as true, accordplaintiffs the benefit of every possible favorable inference, and determine only whetherthe facts as alleged fit within any cognizable legal theory" (Sokol v Leader, 74AD3d at 1181 [internal quotation marks omitted]). " 'Whether a plaintiff can ultimatelyestablish its allegations is not part of the calculus' " (id. at 1181, quoting EBC I, Inc. v Goldman, Sachs &Co., 5 NY3d 11 [2005]).
The Supreme Court properly determined that the causes of action alleging breach ofcontract and negligent supervision were subject to dismissal. The defendants establishedthat these causes of action arise from the same facts as the causes of action alleging legalmalpractice and do not allege distinct damages. Thus, they are duplicative of the causesof action alleging legal malpractice (see Tsafatinos v Lee David Auerbach, P.C., 80 AD3d 749[2011]; Sitar v Sitar, 50AD3d 667 [2008]; Shiversv Siegel, 11 AD3d 447 [2004]; Malarkey v Piel, 7 AD3d 681 [2004]; Mecca vShang, 258 AD2d 569 [1999]).
However, the Supreme Court erred in granting that branch of the defendants' motionwhich was pursuant to CPLR 3211 (a) (7) to dismiss the causes of action alleging fraud."To properly plead a cause of action to recover damages for fraud, the plaintiff mustallege that (1) the defendant made a false representation of fact, (2) the defendant hadknowledge of the falsity, (3) the misrepresentation was made in order to induce theplaintiff's reliance, (4) there was justifiable reliance on the part of the plaintiff, and (5)the plaintiff was injured by the reliance" (Pace v Raisman & Assoc., Esqs., LLP, 95 AD3d 1185,1188-1189 [2012]; seeEurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553 [2009]; NewYork Univ. v Continental Ins. Co., 87 NY2d 308 [1995]). Here, the complaintalleged that the defendants committed fraud by misrepresenting that they "made a motionfor a default judgment" when they "never made, filed, or drafted" such a motion, that theplaintiff relied on the misrepresentation, and that the defendants billed the plaintiff fordrafting the motion. Those allegations were sufficient to state a cause of action to recoverdamages for fraud (see Guggenheimer v Ginzburg, 43 NY2d at 275; Rabos v R&R Bagels & Bakery,Inc., 100 AD3d 849, 853 [2012]).
The defendants' alternate ground for dismissal of the causes of action alleging fraud,that those claims were duplicative of the causes of action alleging legal malpractice(see Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d 539, 545[1983]), is without merit. The evidence submitted by the defendants does not establishthat the plaintiff sustained no other damages, separate and apart from those sought as aresult of the alleged legal malpractice, as a result of the defendants' alleged fraudulentconduct (see Guggenheimer v Ginzburg, 43 NY2d at 274-275; East Hampton Union Free SchoolDist. v Sandpebble Bldrs., Inc., 66 AD3d 122 [2009], affd 16 NY3d 775[2011]; Fleming v KamdenProps., LLC, 41 AD3d 781 [2007]). Where, as here, tortious conductindependent of the alleged malpractice is alleged, a motion to dismiss a cause of action asduplicative is properly denied (see Lax v Design Quest N.Y. Ltd., 101 AD3d 431 [2012];Rupolo v Fish, 87 AD3d684, 686 [2011]).
Accordingly, the Supreme Court should have denied that branch of the defendants'motion which was to dismiss the causes of action alleging fraud. Mastro, J.P., Lott,Roman and Cohen, JJ., concur.