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Attorney’s Failure to Disclose Conflict of Interest Before Accepting Representation Can Constitute Fraud and Negligent Misrepresentation

Dec 28, 2021Litigation & Dispute Resolution

I have written about the cross-section between fraud and legal malpractice claims against attorneys. See ,e.g., Commercial Division Finds Attempted Fraud Claims Against Attorneys Duplicative of Malpractice Claims and Subject to Three-Year Statute of Limitations; Are Claims of Fraud and Professional Malpractice Duplicative?.

Attorneys often argue that attempted claims of fraud against them are nothing more than legal malpractice claims and therefore are duplicative and must be dismissed. This is indeed a viable defense. See Gourary v Green, 143 A.D.3d 580 (1st Dep’t 2016)(“The fraud claims are duplicative of the legal malpractice claim, since they arise from the same facts as underlie that claim and involve no additional damages separate and distinct from those alleged in connection with the malpractice claim.”).

As shown by a new decision of the Supreme Court in New York County, that defense may not always be effective to dispense with fraud claims at the pleadings stage. Federal Insurance Company v. Lester Schwab Katz & Dwyer, LLP, Index No. 151093/2021 (NY Sup. Ct, NY Co., Nov. 16, 2021).

Find the rest here.