Legal Malpractice

Contribution and Indemnity in Legal Malpractice

By (Andrew Lavoott Bluestone)

A NYC fact pattern in legal malpractice:  Plaintiff, a MD wishes to buy a co-op for use as a physician's office.  She finds a prior doctor's office and hires attorney and engineering company to do the deal. Plaintiff buys the unit only to find out that the certificate of occupancy is for residential use and not for professional space.  Quandary is how to fix. 

Plaintiff spends a considerable sum of money and succeeds.  She sues attorney , who then third-party the owner's corporation and engineer.  Result?

In Stackpole v. Cohen Ehrlich & Frankel, LLP  we see Justice Madden's decision, which permits a contribution and indemnity claim against the engineer but not the owner's corporation.  The complaint against the attorneys failed to advise her of the contents of the certificate of occupancy, failed to include in the contract of sale a provision that seller represented and warranted that the apartment could be used as a doctor's office, or for a cure provision, failed to advise plaintiff of Local Law 58 [a disability act], and that plaintiff had to spend hundreds of thousands of dollars to fix the situation.

The attorneys started a third party action against many parties, including the lender, the building corporation and the architectural and engineering service company.  In the end, the action against the bank was discontinued, and Justice Madden dismissed the action against the Owner's corporation.  Attorneys did not have a contribution or indemnity case against the Owner's corporation.  Pending discovery, the action against the engineer remains viable.

Full post as published by New York Attorney Malpractice Blog on April 14, 2009 (boomark / email).