A panel of the Appellate Division, First Department, denied the law firm’s motion for summary judgment in a suit centered on Leggiadro’s claim that it wouldn’t have accepted a landlord’s buyout of its Madison Avenue store if it had been advised by Winston that it would owe $400,000 in New York City corporate taxes after the transaction.
Justices Rosalyn Richter, Richard Andrias, Karla Moskowitz, Paul Feinman and Barbara Kapnick partially affirmed and modified a 2016 decision by Manhattan Supreme Court Justice Shirley Werner Kornreich.
The justices wrote in Leggiadro v. Winston & Strawn, 154749/12, that Kornreich correctly declined to dismiss Leggiadro’s claim that it wouldn’t have accepted the buyout had it known about the taxes. They said evidence asserted it was Winston’s responsibility to ensure that the negotiated buyout covered all tax obligations, and that there were triable issues about what actions Leggiadro would have taken had it been advised about the obligation.
Breaking from Kornreich, the panel said another viable malpractice avenue was that “but for counsel’s negligence … the landlord would have offered a higher buyout figure” to cover the tax obligation.
“Plaintiff had a strong bargaining position because of the amount of time … on the lease, [and] the importance of the leased space to the landlord’s conversion plans,” the court said in its June 1 ruling. That “would have pressured the landlord to acquiesce to plaintiff’s relatively minor request.”
Arthur Handler of Arthur M. Handler Law Offices represented Winston and declined to comment. Lawrence Hirsh, a Robinson Brog Leinwand Greene Genovese & Gluck partner representing Leggiadro, did not return a call seeking comment.
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