The Leasing Hotline

A Uniondale, NY, firm ' Rivkin Radler ' has failed to convince a state court to dismiss claims in a malpractice suit stemming from the firm's role as counsel in lease negotiations.

Global Business Institute, a former client and a nonprofit corporation operating a vocational school, sued the firm in 2006 for failing to advise it properly during plans to move to a new facility in Harlem. The lease was finalized in October 2004, but due to construction delays, Global did not occupy the building until March 2008.

Manhattan Supreme Court Justice Doris Ling-Cohan rejected several of Rivkin Radler's arguments in denying the firm's motion for partial summary judgment, including that the alleged damages were too speculative. Global Business Ins. v. Rivkin Radler, LLP, 104918/06.

Yaron Kornblum, a partner at Rivkin, took on the lease negotiations for Global in April 2004. Global claims that the lease Rivkin negotiated did not provide a deadline for substantial completion of the construction work, nor did it provide penalties in the event the landlord failed to meet a completion deadline. Global asks for more than $3.3 million in damages, according to an amended complaint.

“Global was not aware, and Kornblum failed to advise it, that in cases where substantial construction was contemplated, it was common for leases to contain deadlines,” writes Global's attorney, Martin Stein of Heller, Horowitz & Feit, in response to Rivkin's motion.

Between 2004 and 2008, Global was liable to the landlord for some payments of tax increases. Global claims Kornblum never discussed with its principals the base year for those increases. Rivkin offered a number of reasons why the court should dismiss Global's “substantial completion” and tax increase claims. The firm argued that Global failed to prove the essential elements needed to recover damages for legal malpractice: that an attorney's alleged breach of a duty led to the damages; the departure from generally accepted standards of practice; and sustained actual damages.

The parties submitted experts' affidavits on whether Rivkin strayed from standard practices for attorneys handling lease negotiations. Rivkin tapped a commercial leasing expert, who said that in 2004, when the real estate market in New York was booming, there was no economic compulsion for the landlord to give Global the open-ended liability concession and such a provision was not standard in leases in 2004.

The court concluded that the competing experts affidavits indicate the existence of an issue of fact as to whether Rivkin Radler was negligent during the lease negotiations, and that that issue precludes any grant of summary judgment. The judge also rejected Rivkin's argument that the damages were speculative, holding that lost profits and consequential damages from the delay in moving can be open to calculation.

In rebutting the tax claims, Rivkin argued that the landlord would not have agreed to a different base year for fixing Global's tax payments. But the judge found that argument inapposite. Peter Contino, a partner who is handling the case for the firm, commented in an e-mail: “We appreciate the court's consideration of arguments. While we disagree with the court's conclusions, we are confident that our positions will ultimately be upheld.”

Counsel to Global said, “We're very pleased with the decision and we think we have meritorious claim.” ' Christine Simmons, New York Law Journal

A Uniondale, NY, firm ' Rivkin Radler ' has failed to convince a state court to dismiss claims in a malpractice suit stemming from the firm's role as counsel in lease negotiations.

Global Business Institute, a former client and a nonprofit corporation operating a vocational school, sued the firm in 2006 for failing to advise it properly during plans to move to a new facility in Harlem. The lease was finalized in October 2004, but due to construction delays, Global did not occupy the building until March 2008.

Manhattan Supreme Court Justice Doris Ling-Cohan rejected several of Rivkin Radler's arguments in denying the firm's motion for partial summary judgment, including that the alleged damages were too speculative. Global Business Ins. v. Rivkin Radler, LLP, 104918/06.

Yaron Kornblum, a partner at Rivkin, took on the lease negotiations for Global in April 2004. Global claims that the lease Rivkin negotiated did not provide a deadline for substantial completion of the construction work, nor did it provide penalties in the event the landlord failed to meet a completion deadline. Global asks for more than $3.3 million in damages, according to an amended complaint.

“Global was not aware, and Kornblum failed to advise it, that in cases where substantial construction was contemplated, it was common for leases to contain deadlines,” writes Global's attorney, Martin Stein of Heller, Horowitz & Feit, in response to Rivkin's motion.

Between 2004 and 2008, Global was liable to the landlord for some payments of tax increases. Global claims Kornblum never discussed with its principals the base year for those increases. Rivkin offered a number of reasons why the court should dismiss Global's “substantial completion” and tax increase claims. The firm argued that Global failed to prove the essential elements needed to recover damages for legal malpractice: that an attorney's alleged breach of a duty led to the damages; the departure from generally accepted standards of practice; and sustained actual damages.

The parties submitted experts' affidavits on whether Rivkin strayed from standard practices for attorneys handling lease negotiations. Rivkin tapped a commercial leasing expert, who said that in 2004, when the real estate market in New York was booming, there was no economic compulsion for the landlord to give Global the open-ended liability concession and such a provision was not standard in leases in 2004.

The court concluded that the competing experts affidavits indicate the existence of an issue of fact as to whether Rivkin Radler was negligent during the lease negotiations, and that that issue precludes any grant of summary judgment. The judge also rejected Rivkin's argument that the damages were speculative, holding that lost profits and consequential damages from the delay in moving can be open to calculation.

In rebutting the tax claims, Rivkin argued that the landlord would not have agreed to a different base year for fixing Global's tax payments. But the judge found that argument inapposite. Peter Contino, a partner who is handling the case for the firm, commented in an e-mail: “We appreciate the court's consideration of arguments. While we disagree with the court's conclusions, we are confident that our positions will ultimately be upheld.”

Counsel to Global said, “We're very pleased with the decision and we think we have meritorious claim.” ' Christine Simmons, New York Law Journal