Chicago Legal Malpractice Lawyer Blog
In Moreton Binn v. Muchnick, Golieb and Golieb, P.C. 2020 NY Slip Op 02020, the plaintiffs sued their lawyers for allegedly poor advice causing them to lose majority control of a series of corporations they owned. The court rejected the claims for a variety of reasons. First, some claims were dismissed because the lead plaintiff clearly consented to the transaction. Second, additional claims were dismissed because the plaintiffs engaged successor counsel to advise them on the 2016 transaction. The relevant portion of the opinion states:
Plaintiffs allege that their long-time attorneys, defendants John Golieb, Esq. and Muchnick, Golieb & Golieb, P.C. (together, the Golieb defendants), gave poor advice in connection with a series of transactions in 2014, 2015 and 2016, resulting in the loss of plaintiffs’ majority interest and dilution of their interest in their airport spa business, XpresSpa Holdings, LLC (XpresSpa), as well as other damages. The motion court correctly concluded that documentary evidence, including emails and transaction documents, rendered it “essentially undeniable” that plaintiffs were advised of and/or otherwise understood the terms of the transactions they entered into in 2014 and 2015, as well as their alternative options, if any (see Amsterdam Hospitality Group, LLC v Marshall-Alan Assoc., Inc., 120 AD3d 431, 432 [1st Dept 2014] [internal quotation marks omitted]). Those documents “conclusively establish[] a defense to the asserted claims as a matter of law” (Leon v Martinez, 84 NY2d 83, 88 [1994]; see CPLR 3211[a][1]).
The court correctly concluded that plaintiffs failed to establish that the Golieb defendants were the proximate cause of any damages in connection with the 2016 vote on the merger of XpresSpa and its acquisition by Form Holdings Corp. Documents show that plaintiff Moreton Binn voted in favor of the merger “under protest,” that he felt “frozen. . . out” of the merger negotiations, and that he received inadequate information from Form Holdings — factors outside of the Golieb defendants’ control. Moreover, in connection with their execution of the Joinder Agreement relating to the merger, plaintiffs retained separate counsel to represent them and the minority shareholders in evaluating the voluminous merger and acquisition documents by reviewing the documents and summarizing their terms for the minority shareholders. Thus, separate counsel was an intervening and superseding cause of any damages (see Boye v Rubin & Bailin, LLP, 152 AD3d 1, 10 [1st Dept 2017]).