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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: October 1, 2014

No Third-Party Claim Where Plaintiff Made no Claim Against Defendant for Which Third Party Defendant Could be Liable

On September 25, 2014, the First Department issued a decision in Fidelity National Title Insurance Co. v. Altshuler Shaham Provident Funds Ltd., 2014 NY Slip Op. 06371, dismissing a third-party claim for legal malpractice.

In Fidelity National Title Insurance, the First Department reversed the trial court’s denial of a motion to dismiss a legal malpractice third-party claim based on counsel’s failure to obtain title insurance, explaining:

[The plaintiff] issued a policy to [defendant] Altshuler [and sought . . . ] a declaration that it properly denied coverage to defendant Altshuler. . . . Altshuler asserts that [the third-party defendant law firm] committed legal malpractice by failing to, among other things, obtain adequate title insurance. The amended third-party complaint should have been dismissed for failure to state a cause of action . . . because [the plaintiff] did not make a claim against Altshuler for which [the third-party defendant] is or may be liable.

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

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