1 No. 91
Arnav Industries, Inc. Retirement Trust et al.,
Appellants,
v.
Brown, Raysman, Millstein, Felder & Steiner, LLP,
Respondent.
_________________________________________________________________
2001 NY Int. 61
June 5, 2001
This opinion is uncorrected and subject to revision before publication
in the New York Reports.
Gerry E. Feinberg, for appellants.
Alan M. Gelb, for respondent.
_________________________________________________________________
SMITH, J.:
The issue before this Court is whether a client has a cause of action
for legal malpractice where that client signed a revised settlement
stipulation without reading it, relying on its attorney's misstatement
that the stipulation was changed to correct only one typographical
error. We conclude that the client has stated a cause of action for
legal malpractice sufficient to survive a motion to dismiss.
Plaintiffs Arnav Industries Retirement Trust and Rochel Properties
settled their claim against David Schick for unpaid loans. The
settlement agreement required Schick to make payments totaling
$2,500,000, and it permitted plaintiffs to obtain an immediate
judgment for the full $6,023,702.95 owed if Schick defaulted on any
payment. Schick made an initial payment of $420,000, leaving
$2,080,000 unpaid.
Plaintiffs retained defendant law firm to prepare the stipulation of
settlement. Defendant sent a copy of the stipulation to plaintiffs,
which Joseph Wassner, trustee of the plaintiff Arnav and officer of
plaintiff Rochel, allegedly read, then executed and returned. Days
later, defendant forwarded a revision of the stipulation, advising
plaintiffs that the revision corrected a typographical error in the
first paragraph, as the second version correctly stated the amount of
the settlement to be $2,080,000 rather than $2,800,000. Defendant
allegedly advised Wassner that the terms of the revised stipulation
were identical to the first version except for the identified
SNIPPETS:
The issue before this Court is whether a client has a cause of action for legal malpractice
We conclude that the client has stated a cause of action for legal malpractice sufficient to
Plaintiffs Arnav Industries Retirement Trust and Rochel Properties settled their claim
The settlement agreement required Schick to make payments totaling $2,500,000, and it
Schick made an initial payment of $420,000, leaving $2,080,000 unpaid.
Plaintiffs retained defendant law firm to prepare the stipulation of settlement.
Defendant sent a copy of the stipulation to plaintiffs, which Joseph Wassner, trustee of the
Days later, defendant forwarded a revision of the stipulation, advising plaintiffs that the
Wassner averred that in reliance upon that advice, he did not read through the second version
Pursuant to the stipulation, defendant had judgment entered in both New York County and Kings
His payment of $100,000 was treated as a preferential transfer, and plaintiffs were required
In the second count, plaintiffs asserted that defendant was negligent in failing to have the
The court relied on the general rule that a party who executes an agreement is bound by the
The court further reasoned that plaintiffs' failure to read the stipulation in reliance upon
Plaintiffs appeal on the basis of the two-Judge dissent at the Appellate Division on a
We accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of
* * * ismissal is warranted only if the documentary evidence submitted conclusively
The verified complaint alleges that plaintiffs retained defendant to prepare the stipulation
These facts, for present purposes, sufficiently allege that defendant failed to exercise the
Accordingly, the present appeal, insofar as taken from that part of the Appellate Division
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