`INDEX NO. 62753/2015
`FILED: WESTCHESTER COUNTY CLERK 01/08/2016 02:17 PM
`INDEX “0' 62753/2015
`FILED: WESTCHESTER COUNTY CLERK 01m2016 02:17 PM
`
`
`
`
`
`NYSCEF DOC. NO. 25
`RnCnIVnD NYSCEF: 01/08/2016
`NYSCEF DOC. NO. 25
`RECEIVED NYSCEF: 01/08/2016
`
`
`
`SUPREME COURT OF THE STATE OF NEW YORK
`
`COUNTY OF WESTCHESTER
`__________________________________x
`
`KALLISTA, S.A., and
`
`LINDA GILLETTE PARODI,
`
`Plaintiffs,
`
`-against-
`
`WHITE & WILLIAMS LLP,
`
`RANDY FRIEDBERG, and
`
`DOES 1 through 10,
`
`Defendants.
`
`__________________________________X
`
`Index No. 62753 / 2015
`
`Notice of Entry
`
`PLEASE TAKE NOTICE that the attached Decision and Order was entered in the
`
`Westchester County Clerk’s office on January 7, 2016.
`
`MATALON SHWEKY ELMAN PLLC
`
`' 3:1 Q. m
`
`By:
`
`Jeremy C. Bates
`450 Seventh Avenue, 33d Floor
`
`New York, New York 10123
`
`(212) 244-9000
`Attorneysfor Defendants
`White & Williams LLP and
`
`Randy Friedberg, Esq.
`
`Dated: New York, New York
`
`January 8, 2016
`
`By NYSCEF to:
`
`Daniel L. Abrams, Esq.
`Law Office of Daniel L. Abrams, PLLC
`
`31 Penn Plaza, 132 West 31st Street
`
`New York, New York 10001
`
`

`

`
`INDEX NO. 62753/2015
`
`
`
`
`NYSCI
`
`
`NYSCEF DOC. NO. 24
`RECEIVED NYSCEF: 01/07/2016
`2F DOC. NO. 24
`R«.C«.IV«.D NYSCEF: 01/07/2016 '
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`g
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`»
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`'
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`To commence the statutory time ,
`period of appeals as of right
`(CPLR 5513[a]), you are advised
`to serve a copy of this order,
`with notice of entry, upon all
`parties.
`
`SUPREME COURT OF THE STATE OF NEW YORK
`
`‘
`
`COUNTY OF WESTCHESTER
`
`COMMERCIAL DIVISION
`
`Present: HON. ALAN D. SCHEINKMAN,
`.
`Jusfice.
`—-—————----—-—---—--,----——-----—-—-——-—-------—---——-—-----—--—-¥__________________X
`
`KALLISTA, SA, and LINDA GILLETTE PARODI,
`-
`_
`Plaintiff,
`
`'
`
`.
`
`.
`
`»
`
`-
`
`—against—
`'
`WHITE & WILLIAMS LLP, RANDY FRIEDBERG, and
`DOES 1 THROUGH 10,
`>
`
`Defendants.
`_--__-_________-____________-____--_____---____-_____._________v___-_-___;____---__.x
`
`Scheinkman, J: r
`
`Index No. 62753/15
`Motion Date: 11/13/15
`SEQ # 1
`
`.;
`I2!ESEI§§1S2li_§§_S2E§E2§iE§
`
`'
`
`Defendants White & Williams LLP (“White & Williams” or “Law Firm") and
`Randy Friedberg (“Friedberg”) (collectively “Defendants") move, pursuant to CPLR 3211 (a)
`(7), to dismiss: (1) the Second, Third and Fourth Causes of Action1 of the Complaint; (2) the
`First Cause of Action as to “damage theories” and as to Plaintiff Linda Gillette Parodi
`(“Parodi); and (3) the demands of both Parodi and co-Plaintiff Kallista, S.A. (“Kallista”)
`(collectively “Plaintiffs”) for punitive damages. Plaintiffs oppose all aspects of the motion.
`
`This action arises out of claims that the Law Firm'committed legal malpractice,‘
`and then fraudulently concealed its misconduct, in its representation of Kallista in relation to
`certain trademark registration applications. The action was commenced by the filing of the
`Summons and Complaint on August 4, 2015. Defendants moved to dismiss oh October 2,
`2015. This Court held .a Preliminary Conference With counsel on October 16, 2015. Since
`the Court perceived that this motion would not result in the dismissal of all claims as against
`both Defendants, the Court directed that discovery proceed during the pendency of? this
`motion. Discovery is scheduled to be. completed by May 5, 2016 and a Trial Readiness
`
`1The Notice of Motion, tracking the nomenclature of the Complaint, refers to .the
`specific theories of liabilities as “Claims for Relief’, using federal court parlance. The
`Court will deem such references to be to proper state court parlance — “Causes of
`Action.”
`
`

`

`Kallista, S.A. et. ano v White & Williams, LLP, et. a/
`
`Page 2
`
`Conference is scheduled for May 6, 2016. Plaintiffs submitted their opposition to the motion
`on October 30, 2015 and Defendants their reply on November 12 2015 T
`'
`submitted for decision on November 13, 2016.
`'
`' he motion was
`
`THE COMPLAINT
`
`According to the Complaint, the allegations of which must be assumed as true
`for the purposes of this motion, Kallista is a Swiss corporation and has its principal place of
`business in Geneva (Affirmation of Howard |. Elman, Esq., dated October 2, 2015 [“Elman
`Aff’], Ex. 1, 114). Parodi is said to be a citizen of both Switzerland and the United States,
`residing in Switzerland (id. 115). The Law Firm is a Pennsylvania partnership and has
`maintained offices in Manhattan and in Pleasantville (id. 116). Friedberg is a member of the
`New York Bar, a resident of Scarsdale, and is a partner in the Law Firm’s Manhattan office
`(id. 118).
`
`Kallista was established in April 2012 to engage in the production and sale of
`skincare products. A sister company, Etheria, S.A. (“Etheria”) was set up at the same time
`for the production and sale of hair care products. Both companies are managed by Parodi,
`and her husband, Pierre. Pierre is the owner of Kallista (id., 1111).
`
`Plaintiffs allege that, in late March and early April 2012, Kallista initially
`consulted with Friedberg regarding the preparation of a trademark application for the name
`“KALLISTA” for skincare products in the United States. Friedberg was also consulted
`regarding a trademark application for the name “ETHERIA") for hair care products in the
`United States (id. 1112). On May 2, 2012, Kallista, Etheria, and the Law Firm entered into
`an agreement pursuant to which the Law Firm was to perform legal services for both
`companies, including the preparation and processing of the two trademarks (id. 1113). In
`May 2012, Parodi was employed as a senior executive of Proctor & Gamble and Friedberg
`knew that she intended to leave that position as soon as the Kallista business was
`operational (id. 1114).
`
`Plaintiffs assert that, as early as November 2011, Kalliste Oraganics, Inc.
`(“Kalliste”) branded soap and skincare products which were sold throughout the United
`States under the name “KALLISTE”. Plaintiffs say that a full and complete trademark
`search would have revealed the existence of the Kalliste product line (id. 111115, 20). Despite
`this, on June 1, 2012, Friedberg reported to Kallista that his search of certain data bases
`indicated a low level of risk, that it was not necessary to do a full trademark search, and that
`he believed that the marks were available. On June 18, 2012, Kallista instructed Friedberg
`to proceed with registration for both marks (id. 1116).
`
`Plaintiffs assert that Defendants did not proceed with the trademark
`applications, even though they invoiced Kallista for the cost of the applications and falsely
`represented that the applications had been filed (id. 111116—17).
`In February, 2013, Kallista
`asked Friedberg about the status of the applications and, in particular, as to whether Kallista
`products could be sold before the end of the summer and whether there was any risk.
`
`

`

`\‘m
`
`Kallista, S.A. et. ano v White & Williams, LLP, et. a/
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`Page 3
`
`Friedberg allegedly advised that selling should start as soon as possible because the
`registration could not be finalized until that was done (id. 1117). On July 24, 2013, Kallista
`wrote to Friedberg as to the status of the trademarks, noting that a regulatory agency had
`Informed Kallista that the KALLISTA mark had not been registered. Friedberg is alleged to
`have responded by filing applications for both Etheria and Kallista that day (id. 1118).
`Plainitffs allege that Defendants did not perform a trademark search of the United States
`Patent and Trademark Office (‘USPTO”) database and that, if such a search had been
`conducted, it would have been revealed that Kalliste Organics, lnc. ("Kalliste”) had a
`trademark application for KALLISTE. Kalliste asserted in its application that it first used the
`KALLISTE mark in 2008. Registration of Kalliste's trademark was issued on October 15,
`2013 (id. 1120).
`
`In September 2013, Parodi resigned from Proctor and Gamble, giving up a
`$250,000 annual salary and generous benefits (id. 1121).
`
`On November 15, 2013, Friedberg received an Office Action from USPTO
`stating that there was likelihood of confusion between the KALLISTE registration and the
`KALLISTA application, which were in the same class of products, and therefore the
`KALLISTA application was refused. Plaintiffs allege that Friedberg did not tell Kallista about
`this development and did not tell Kallista that the KALLISTE registration was a substantial
`legal threat to Kallista’s business since the KALLISTA mark posed a serious risk of
`infringement on the KALLISTE mark (id. 1122).
`
`Kallista, allegedly unaware of any trademark issues, successfully launched a
`KALLISTA product line in the United States in January 2014 (id. 1123). On May 15, 2014,
`Friedberg filed a petition with the United States Trademark Trial and Appeal Board (the
`“Board”) to cancel the KALLISTE mark on the ground of fraud, and also filed a request to
`suspend the application for the KALLISTA mark. Friedberg is alleged to have taken these
`actions without informing Kallista or obtaining its consent (id. 1124).
`
`According to Plaintiffs, the petition to cancel was withdrawn after Kalliste
`threatened Rule 11 sanctions against Kallista. Friedberg then entered into negotiations with
`Kalliste for a coexistence agreement, which would have restricted the use of the KALLISTA
`mark to a small section of the relevant market. This was allegedly done without informing
`Kallista. Further, Friedberg sent a “harsh” and factually incorrect demand letter to Kalliste
`(id. 1125).
`
`On June 5, 2014, Defendants informed Kallista that the KALLISTA application
`was blocked by the KALLISTE trademark registration and recommended that the dispute be
`resolved through a coexistence agreement.
`In early July 2014, Friedberg informed Kallista
`that the Law Firm would give it a credit for up to $7500 of the costs of a coexistence
`agreement and apologized for “miscommunication” (id. 1126). Subsequent efforts to
`negotiate a coexistence agreement failed.
`
`On August 5, 2014, the Law Firm was relieved of further services by Kallista.
`
`

`

`“‘him
`
`Kallista, S.A. et. ano v White & Williams, LLP, et. al
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`Page 4
`
`Kallista alleges that, in view of its inability to trademark the KALLISTA mark, it
`_
`closed Its busuness. its distributors returned tens of thousands of dollars of KALLISTA
`products which cannot be sold. Kallista claims it invested over $900,000 in its business
`operations, which are not recoverable, and lost profits of more than $350,000 for 2014,
`2015 and 2016. Parodi claims she lost income of at least $217,000 (id. 111129—30).
`
`The First Cause of Action is for legal malpractice and is asserted by both
`Plaintiffs as against both Defendants.
`It is alleged that Defendants breached a duty of care
`and skill by, among other things: failing to conduct an adequate trademark search in May
`2012;
`failing to file and prosecute the KALLISTA trademark application in June 2012; failing
`to inquire into the status of the application and telling Kallista to proceed with sales in
`February 2013; concealing, until July 24, 2013, that no application had been filed;
`concealing that an Office Action had been received in November 2013 refusing the
`KALLISTA application; failing to advise Kallista that the KALLISTE registration posed a
`serious risk of infringement; delaying for six months a response to the Office Action and
`then filing a petition to cancel without Kallista’s consent and without an adequate
`investigation. Plaintiffs claim damages of “sunk” costs and expenses of $900,000 to
`Kallista, $350,000 in lost profits to Kallista, and $234,000 in lost income to Parodi (id. 111131-
`37).
`
`The Second Cause of Action is for fraudulent concealment. Plaintiffs claim
`that there was a conspiracy and “pattern and practice” to cover up and avoid disclosing
`Defendant’s legal malpractice. Plaintiffs assert that Defendants were under a fiduciary duty
`to disclose all of their acts and omissions constituting malpractice. The “pattern and
`practice" of fraudulent concealment is said to include: (a) concealing the failure to fail a
`trademark application for KALLISTA in February 2013; (b) withholding from Kallista and
`Parodi in July 2013 that the application had not been filed sooner and that it had only been
`filed in response to Kallista’s inquiry; (c) concealing the receipt of the Office Action; (d)
`failing to inform Kallista and Parodi that Defendants had filed a petition to cancel the
`KALLISTE registration based on fraud without telling Kallista in advance and without an
`adequate investigation; and (e) concealing from Kallista that Defendants had entered into
`negotiations for a coexistence agreement. Plaintiffs assert that, but for the fraudulent
`concealment, they would not have made any agreements with Defendants and would have
`obtained alternate counsel and taken other measures to mitigate the damages caused by
`the legal malpractice. Plaintiffs seek $1.4 million damages, including the “sunk costs” of
`Kallista, the lost profits of Kallista, and the lost income of Parodi. Plaintiffs claim that
`Defendants’ acts were knowing, intentional and were done wantonly with a high degree of
`moral turpitude (id. 111138-43). Plaintiffs claim punitive damages should be awarded
`because “Plaintiffs were subjected to a cruel and unjust hardship by which their interests in
`receiving competent and conflict-free legal advice were brazenly attacked and stolen," and
`such an award is necessary to punish Defendants and deter them from similar misconduct
`in the future (id. 1l44).
`
`The Third Cause of Action is for breach of contract and is asserted as against
`the Law Firm only. Kallista claims it entered into an agreement for legal services with the
`Law Firm for legal services and that Parodi is a third party beneficiary of that agreement. in
`
`

`

`“A
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`Kallista, 8A. of. ano v White & Williams, LLP, et. a/
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`Page 5
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`essence, Plaintiffs claim that the Law Firm breached the agreement by failing to provide
`competent legal services (id. 1149).
`
`The Fourth Cause of Action is for violation of Section 487 of the Judiciary Law.
`Plaintiffs claim that Defendants violated Section 487 by filing and prosecuting a fraud action
`on behalf of Kallista (the petition to cancel the KALLISTE mark) without informing Kallista or
`obtaining its consent and without conducting an adequate investigation. This action is said
`to be part of a larger scheme to mislead Plaintiffs, which persisted for more than a year and
`which “amounts to an extreme pattern of legal delinquency." It is claimed that, by the filing
`of the petition to cancel without an adequate investigation, Defendants intended to deceive
`the Board and also Kallista, Parodl, and Kalliste (id. 111150-53).
`
`DEFENDANT’S CONTENTIONS IN SUPPORT OF ITS MOTION
`
`In support of the motion, Defendants submit an attorney affirmation and a
`memorandum of law. The attorney affirmation supplies: (1) the Summons and Complaint;
`(2) a printout from the Trademark Electronic Search System showing the result of a word
`search for the mark ELTHERIA on October 2, 20152; and (3) a printed copy of the “About
`Us web page for the Trademark Trial and Appeal Board for the United States Patent and
`Trademark Office.3
`
`Defendants argue that the Second (fraudulent concealment) and Third
`(breach of contract) Causes of Action are duplicative of the First Cause of Action (legal
`malpractice).
`It is contended that the causes of action are all predicated on nearly identical
`allegations and all seek the same damages. Defendants contend that there is no
`cognizable cause of action for fraudulent concealment of legal malpractice. Further, assert
`Defendants, the punitive damages demand attached to the Second Cause of Action should
`be dismissed in that Plaintiffs have not alleged that the behavior of Defendants reaches the
`requisite high level of immorality as to warrant punitive damages. Defendants seek
`dismissal of the Fourth Cause of Action which is predicated upon Judiciary Law Section
`487. According to Defendants, the statute does not apply to conduct committed by an
`attorney practicing before a federal agency located in Virginia. Nor, say Defendants, does
`the statute apply to a law firm, as opposed to an individual attorney. Defendants also assert
`that the Plaintiffs have failed to allege facts sufficient to state a cause of action under the
`statute.
`
`2The point of this submission is to show that, not only do Plaintiffs not complain
`about the ETHERIA registration, the ETHERIA mark is registered (Def. Mem. at 5).
`However, Defendants have not moved to dismiss on the basis of documentary evidence
`and, therefore, this document is not relevant to the motion they made (to dismiss for
`failure to state a cause of action) and shall be disregarded.
`
`3The purpose of this submission is to show that the Board is located in
`Alexandria, Virginia (see Def. Mem. at 11), thus setting the stage for one of Defendants’
`central arguments — that Judiciary Law Section 487 does not apply out-of—state.
`
`

`

`“A _‘~—__
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`Kallista, S.A. et. ano v White & l/l/i/liams, LLP, et. a/
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`Page 6
`
`.
`With regard to Parodi, Defendants ar ue that she has no stand‘
`'
`'
`the First Cause of Action (legal malpractice) becauge she was not in privity wig? 5062:3131:
`Similarly, Defendants argue that, for purposes of the Second Cause of Action (fraudulent
`concealment), any representation that they made to her was not made for the purpose of
`Inducmg her to rely upon it, nor would any such reliance be justifiable. Further, say
`Defendants, they owed her no duty of disclosure as she did not personally retain
`Defendants. Defendants assert that Parodi cannot maintain a breach of contract action
`(Third Cause of Action) against the Law Firm because she was not a party to the contract
`and Plaintiffs do not allege that Parodi was intended to be a beneficiary of the retainer
`agreement. Parodi, argue Defendants, cannot maintain the Fourth Cause of Action, based
`on Section 487, because she was not a party to the proceeding in question before the
`Board.
`
`I
`
`Defendants also assert that the claimed damages sought under the First
`Cause of Action (legal malpractice) should be dismissed because they cannot be calculated
`with reasonable certainty. Defendants contend that the claim for lost profits is speculative
`as Kallista is a new venture and calculation of such damages would be too speculative.
`Defendants claim that the alleged “sunk costs" are “inherently incredible” since Kallista does
`not claim that it could not market its products outside the United States, nor does it allege
`what the costs of a coexistence agreement would have been. Further, Defendants assert
`that Kallista has not alleged why the loss of one trademark caused its entire business to
`cease entirely.
`
`PLAINTIFFS’ CONTENTIONS IN OPPOSITION
`
`In setting forth the facts
`In opposition, Plaintiffs submit a memorandum of law.
`upon which Plaintiffs’ memorandum relies, Plaintiffs have, in a few instances, gone beyond
`the boundaries of the Complaint. For one example, Plaintiffs assert that they replaced the
`Law Firm 'with Conkle, Kremer & Engel and paid this new firm to continue the negotiations
`with Kalliste and to file for a new trademark (Plf. Mem. at 8, 9). For another, Plaintiffs argue
`in their memorandum that Parodi had a “pre-existing relationship with Mr. Friedberg from
`prior employment and was responsible for contacting and retaining Randy Friedberg to
`obtain the trademark for Kallista in this matter” (id. at 21). No such allegations appear in the
`Complaint. The Court must rely exclusively on the actual content of the pleading and its fair
`intendments. Accordingly, the Court has not considered the elaborations and
`embellishments offered, without citation to the pleading, in Plaintiffs’ memorandum of law.4
`
`
`
`4The Court has also not considered Plaintiffs’ request for leave to amend any
`allegations found to be insufficient. Plaintiffs did not move, or seek to move, for leave
`to amend. Further, even though the motion to dismiss had been made prior to the
`Preliminary Conference, counsel for Plaintiffs did not request the opportunity to
`interpose an amended complaint at that time. Plaintiffs also have not provided any
`factual basis for these assertions since Plaintiffs have not offered any affidavits. While
`Plaintiffs, as will be discussed herein, are entitled to rely on their pleading and need not
`submit affidavits, they cannot simply make assertions in their memorandum of law that
`
`

`

`“A *
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`Kallista, S.A. at. ano v White & Williams, LLP, et. a/
`
`Page 7
`
`Plaintiffs argue that their fraudulent concealment cause of action is not
`_
`.
`duplicative of their legal malpractice claim. They argue that the fraudulent concealment
`claim lS based on additional parts that were part of a deliberate scheme to try to fix or repair
`the original legal malpractice of failing to conduct a proper trademark search (Plf. Mem. at
`11-12). Plaintiffs state the following in their memorandum of law:
`
`As soon as White & Williams cleared the term “Kallista” for use
`
`and registration, Kallista started investing in the business,
`creating formulas, creating products, packaging and labeling,
`obtaining distributors, developing marketing plans, setting up
`websites and other social media accounts — all of which costs
`
`hundreds of thousands of dollars. These investments started in
`
`May and June of 2012 and continue through at least August of
`2014 when Kallista finds new counsel. The investments from
`June 2012 to July 2013, or possibly November of 2013, are
`based on mere negligence or legal malpractice; the investments
`from July of 2013 or possibly November of 2013 are based on
`willful and deceptive concealments and misrepresentations. The
`damages may overlap to a limited degree, but the damages are
`different.
`In addition, Linda Parodi would not have left herjob in
`September of 2013, had she known that her company name, the
`most important asset of the business was in legal jeopardy.
`Thus her damages arise directly from the concealment, and
`when she undertakes her employment at Kallista, her salary is
`expense to Kallista and therefore damages suffered by Kallista
`(Plf. Mem. at 12).
`
`The Court notes that most of these assertions are not contained in Plaintiffs’
`pleading. There is no assertion that Plaintiffs created formulas (or anything else) after the
`name was “cleared” by the Law Firm. Nor is there any assertion as to when any
`investments were made by Kallista nor that Parodi was paid a salary by Kallista and the
`amount thereof.
`
`In any event, Plaintiffs contend that their Second Cause of Action contains
`more than just a mere failure to disclose malpractice, pointing to the failure to disclose the
`Office Action and the failure to disclose the filing of a petition to cancel the Kalliste
`registration (Plf. Mem. at 13).
`
`Plaintiffs argue that the claim for punitive damages is well plead and that what
`happened to them is “outrageous” which reflects a wanton disregard of their rights (Plf.
`Mem at 15).
`
`Plaintiffs assert that Section 487 of the Judiciary Law applies to activities
`which take place outside the State of New York and thatvSection 487 should be read to
`impose liability on an entire law firm, notjust individual attorneys.
`
`
`
`they did not make in their Complaint.
`
`

`

`Kai/ista, s.A. et. ano v White & Williams, LLP, et. a/
`
`Page 8
`
`—%
`
`Plaintiff Parodi argues that she has standing to sue because she is the co-
`founder and general manager of Kallista, a frim owned by her husband. She contends that
`she has standing because there is, or should be, an exception to privity based on fraud
`collusnon or special circumstances, and because the misconduct was directed towards her.
`
`As toldamages, Plaintiffs assert that their out-of—pocket costs (or sunk costs)
`_
`are inherently credible and real and that the issue of damages should not be decided in the
`context of a motion to dismiss (Plf. Mem. at 24-25).
`
`DEFENDANTS’ REPLY
`
`In reply, Defendants submit an affidavit from Randy Friedberg to which he
`attaches: (a) a chain of emails between him and Parodi of March 30, 2012; (b) a chain of
`emails between him and George Frantzis (a person who appears to be making inquires on
`behalf of Kallista) of February 25, 2013; and (0) what he describes as a chain of emails
`between him and George Frantzis on July 25, 2013 (on which Parodi was copied).
`Defendants also submit a reply memorandum of law.
`
`The emails are offered to support Defendants’ argument in their reply
`memorandum (Reply Mem. at 13-14) that Parodi did not, in fact, have a pre-existing
`relationship with Friedberg, as claimed in Plaintiffs’ memorandum of law, and that
`communications regarding the status of the trademark application were between Friedberg
`and Frantzis, not Friedberg and Parodi. But, again, since Defendants did not move to
`dismiss based on documentary evidence and the allegations that Plaintiffs made in their
`opposition memorandum will be disregarded to the extent not contained in the Complaint,
`the Court will not consider the assertions in the Friedberg affidavit.
`
`Defendants’ reply memorandum of law otherwise seeks to rebut the
`arguments advanced by Plaintiffs in their opposition memorandum. The Courts notes that
`Defendants point out that Plaintiffs did not specifically address Defendants’ argument that
`the contract cause of action is duplicative of the legal malpractice action.
`
`STANDARD OF REVIEW ON A MOTION TO DISMISS
`
`The legal standards to be applied in evaluating a motion to dismiss pursuant
`to CPLR 3211(a)(7) are well-settled.
`In determining whether a complaint is sufficient to
`withstand a motion to dismiss, the sole criterion is whether the pleading states a cause of
`action (Cooper v 620 Prop. Assoc, 242 AD2d 359 [2d Dept 1997], citing Weiss v Cuddy &
`Feder, 200 AD2d 665 [2d Dept 1994]).
`If from the four corners of the complaint factual
`allegations are discerned which, taken together, manifest any cause of action cognizable at
`law, a motion to dismiss will fail (511 West 232nd Owners Corp. v Jennifer Realty 00., 98
`NY2d 144, 152 [2002]; Cooper, 242 AD2d at 360). The court’s function is to “‘accept
`each and every allegation forwarded by the plaintiff without expressing any opinion as to the
`plaintiff’s ability ultimately to establish the truth of these averments before the trier of the
`facts’” (id., quoting 219 Broadway Corp. vA/exander’s, Inc., 46 NY2d 506, 509 [1979]). The
`pleading is to be liberally construed and the pleader afforded the benefit of every possible
`
`

`

`“‘4‘ —‘————,
`
`Kallista, S.A. et. ano v White & Williams, LLP, et. al
`
`Page 9
`
`favorable inference (511 West 232nd Owners Corp., 98 NY2d at 152).
`
`A plaintiff may rest upon the matter asserted within the four corners of the
`.
`complaint and need not make an evidentiary showing by submitting affidavits in support of
`the complaint. A plaintiff is at liberty to stand on the pleading alone and, if the allegations
`are suffICIent to state all of the necessary elements of a cognizable cause of action, a
`plaintiff will not be penalized for not making an evidentiary showing in support of the
`complaint (Miglino v Bally Total Fitness of Greater New York, Inc., 20 NY3d 342, 351
`[2013]; Kempf v Magida, 37 AD3d 763 [2d Dept 2007]; see also Rove/Io v Orofino Realty
`00., 40 NY2d 633, 635-636 [1976])
`
`THE THIRD CAUSE OF ACTION — FOR BREACH OF
`
`CONTRACT — SHOULD BE DISMISSED AS DUPLICATIVE
`
`OF THE FIRST CAUSE OF ACTION FOR LEGAL MALPRACTICE
`
`The Third Cause of Action alleges that the Law Firm breached its contract with
`Plaintiffs by: failing to conduct an adequate trademark search in May 2012 and failing to
`discover the existence of the KALLISTE mark; failing to timely file and prosecute the
`KALLISTA trademark application; failing to conduct a reasonable inquiry into the status of
`the KALLISTA trademark application; failing to conduct a competent trademark search in
`July 2013; concealing the receipt of the Office Action refusing the KALLISTA application;
`waiting six months to respond to the Office Action and then filing a petition to cancel the
`KALLISTE registration; and undertaking an unauthorized negotiation for a coexistence
`agreement (Complaint, [[48). Each of these allegations is also asserted in the context of the
`First Cause of Action for legal malpractice (id., 1]33).
`
`The breach of contract cause of action is premised on the assertion that the
`Law Firm “impliedly promised to provide competent legal services to prosecute a trademark
`application (Complaint, 1]46). A breach of contract claim premised on the attorney’s failure
`to exercise due care or to abide by general professional standards is nothing but a
`redundant pleading of a malpractice claim (see, 6.9., Levine v Lacher & Lovell-Taylor, 256
`AD2d 147 [1st Dept 1998]; Sage Realty Corp. v Proskauer Rose LLP, 251 AD2d 35 [1st
`Dept 1998]). The test is not whether the theory is the same; the test is whether the facts
`alleged and relief sought are the same (see Nevelson v Carro, Spanbock, Kaster & Cuiffo,
`290 AD2d 399 [1st Dept 2002]).
`
`To the extent that the Third Cause of Action for breach of contract arises from
`the same facts and seeks the same damages as the First Cause of Action for legal
`malpractice, the Third Cause of Action should be dismissed (Shaya B. Pacific, LLC v
`Wilson, Elser, Moskowitz, Ede/man & Dicker, L.L.P., 38 AD3d 34, 43 [2d Dept 2006]);
`Mecca v Shang, 258 AD2d 569 [2d Dept 1999], IV dismissed 95 NY2d 791 [2000]).
`
`The facts are the same in both causes of action. There is, however, one
`aspect of damages that is different.
`In the Third Cause of Action, Plaintiffs seek recovery.
`for monies that they paid for purported legal services pursuant to the agreement (Complaint,
`1149). However, since the purpose of pecuniary damages in a legal malpractice action is to
`make the injured party whole, there is no reason to doubt that Plaintiffs may obtain recovery
`
`

`

`‘——‘h
`
`Kallista, S.A. et. ano v White & Williams, LLP, et. a/
`
`Page 10
`
`from Defendants for any fees paid that Defendants did not
`'
`'
`earn due to their mal ractice
`(Mecca v Shang, 258 AD2d at 570; see Leach v Bail/y, 57 AD3d 1286, 1289 [3dpDept
`2008]). Since there Is no distinction between the damages recoverable in legal malpractice
`and those sought in breach of contract, the Third Cause of Action shall [x] be dismissed.
`
`THE SECOND CAUSE OF ACTION - FOR FRAUDULENT
`
`CONCEALMENT — SHOULD BE DISMISSED
`
`The Second Cause of Action for fraudulent concealment should also be
`
`dismissed. A fraud cause of action, like a contract cause of action, that arises from the
`same facts as a legal malpractice cause of action is duplicative of the legal malpractice
`cause of action unless distinct damages are alleged (see, 6.9., Postiglione v Castro, 119
`AD3d 920 [2d Dept 2014]; Rupolo v Fish, 87 AD3d 684 [2d Dept 2011]); Financial Servs.
`Veh. Trust v Saad, 72 AD3d 1019 [2d Dept 2010]); Sitar v Sitar, 50 AD3d 667 [2d Dept
`2008]; lannucci v Kucker & Bruh, LLP, 42 AD3d 436 [2d Dept 2007]).
`
`Here, Plaintiffs argue that the fraudulent concealment cause of action is
`different from their legal malpractice claims because, they say, the fraudulent concealment
`claim is based on the “additional facts" that Defendants engaged in a plan to “fix” the
`malpractice while also concealing it (Plf. Mem. at 4, 10). However, Plaintiffs, in fact, alleged
`the Defendants attempted to fix the alleged malpractice while concealing it from Defendants
`as part and parcel of their legal malpractice cause of action (see Complaint, 1]33 [e—j]). Since
`the fraudulent concealment cause of action is based on the same facts as alleged as part of
`the legal malpractice claim, it fails unless distinct damages are alleged.
`’
`'
`
`in an effort to argue that the damages claimed under the fraudulent
`concealment claim are distinct from those claimed in the legal malpractice cause of action,
`Plaintiffs argue, in their memorandum, that as soon as the Law Firm “cleared” the
`KALLISTA mark for use and registration, Kallista began to invest in the business, starting in
`May and June 2012 and continuing through August 2014. Plaintiffs say: “The investments
`from June 2012 to July 2013 or possibly November 2013 are based on mere negligence or
`legal malpractice: the investments from July of 2013 or possibly November of 2013 are
`based on willful and deceptive concealments and misrepresentations. The damages may
`overlap to a limited degree, but the damages are different” (Plf. Mem. at 12). The Court
`disagrees.
`
`As previously noted, Plaintiffs’ memorandum of law is not supported by their
`own pleading.
`in the fraudulent concealment cause of action, Plaintiffs set forth two
`paragraphs directed to compensatory damages.
`
`The first paragraph relating to compensatory damages contains the assertion
`that, but for the fraudulent concealment, they would not have continued to do business with
`Defendants, would have obtained other attorneys, and taken other unspecified steps to
`minimize the damages sustained by reason of the legal malpractice alleg