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Posted: March 2, 2016

Malpractice Claim Properly Dismissed: Defendants’ Negligence Did Not Cause Plaintiff’s Losses

On March 1, 2016, the First Department issued a decision in Women’s Integrated Network, Inc. v. Anderson Kill P.C., 2016 NY Slip Op. 01428, affirming the dismissal of a legal malpractice action despite the fact that the defendants admitted that they were negligent, explaining:

Defendants candidly concede that their failure to file a timely notice of appeal from the federal district court’s order granting the insurer’s motion for judgment on the pleadings in plaintiff’s declaratory judgment action against the insurer constituted a breach of their duty. However, because plaintiff did not show that defendants’ negligence was a proximate cause of plaintiff’s losses, the motion court correctly dismissed this legal malpractice action. Plaintiff failed to establish that its insurance contract covered the loss for which plaintiff sought coverage in the federal court declaratory judgment action. As the district court and the motion court found, plaintiff’s settlement of its former employee’s stock option action, which gave rise to the declaratory judgment action, is not a “Loss” as defined by the policy; the policy states in plain language that “Loss” does not include “payments for stock option or stock appreciation rights.”

(Internal quotations and citations omitted) (emphasis added).

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