Attorney Malpractice Claim Allowed Despite Absence of Attorney-Client Relationship
It has long been recognized that there is an exception to the general rule that you cannot sue an attorney for malpractice if you were not his/her client. The exception is where the plaintiff claims "fraud, collusion, malicious acts or other special circumstances". AG capital Funding v State St., 5 NY3d 582 (2005). On December 23, 2019 a New York County Supreme Court Justice relied on this Court of Appeals decision to uphold a complaint of legal malpractice by a victim of a $1,320,000 scam involving the formation of a partnership and lease to operate a car dealership.
The plaintiff Yusupov agreed to invest $1,320,000 for an 80% share of the property and business along with Korchmar who would invest the other 20%. Both Yusupov and Korchmar retained separate attorneys. Yusupov claimed that he followed the instructions of Korchmar's attorney to wire $1,320,000 into an attorney's escrow account which turned out to be a business operating account controlled by Korchmar - who then stole the funds. Unfortunately, Yusupov couldn't sue Korchmar (presumably left town) and instead sued his attorney and Korchmar's attorney for legal malpractice and fraud. Korchmar's attorney has denied the charges of wrongdoing claiming email instructions on wiring funds warrant dismissal of the claims. Yusupov v Mekhtiyev Law Firm PC, 2019 WL 7370047
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