UFT Commercial Finance, LLC v. Fisher

Dist. Ct. did not err in dismissing plaintiffs' legal malpractice action against defendant-attorney, where complaint alleged that: (1) defendant was plaintiff-company's former chief legal adviser; (2) in his role as chief legal advisor, defendant advised company and plaintiff-company's founder to enter into supplemental agreement with defendant and others that called for payment of back wages through identified source of future funds, as well as other unspecified sources of funds; (3) after defendant left company, he demanded arbitration of his claim for unpaid wages; (4) arbitrator found that defendant's wages had been illegally withheld throughout his employment and held plaintiffs liable for defendant's unpaid wages and penalties totaling $864,976; and (5) plaintiffs filed instant action, alleging that defendant's own legal malpractice caused them to take actions that triggered their liability to defendant under arbitration award. Dist. Ct. could properly find that plaintiff failed to adequately plead that defendant's legal advice proximately caused them to enter into defendant's supplemental agreement or to refuse independent counsel or forego any D & O insurance. Moreover, Ct. rejected plaintiff's contention that they need not allege such causation where instant supplemental agreement was illegal act, since arbitrator did not find that supplemental agreement was tantamount to illegal deferred compensation agreement, where entry into agreement did not aggravate or add to company's failure to pay defendant in timely manner. Moreover, plaintiffs needed to allege facts showing that if defendant had not recommended entering into his supplemental agreement, plaintiffs would have taken different course of action that would have avoided their liability such as timely paying defendant's wages.