STEIN v. LEVINE

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Supreme Court, Appellate Division, Second Department, New York.

Roberta STEIN, et al., respondents-appellants, v. William F. LEVINE, et al., appellants-respondents.

Decided: June 28, 2004

GABRIEL M. KRAUSMAN, J.P., SANDRA L. TOWNES, STEPHEN G. CRANE, and ROBERT A. SPOLZINO, JJ. Vincent D. McNamara, East Norwich, N.Y. (Michael S. Seltzer of counsel), for appellants-respondents. Heller, Horowitz & Feit, P.C., New York, N.Y. (Stuart A. Blander of counsel), for respondents-appellants.

In an action to recover damages for legal malpractice and breach of contract, the defendants appeal from so much of an order of the Supreme Court, Nassau County (Jonas J.), entered June 19, 2003, as granted that branch of the plaintiffs' motion which was to strike the affirmative defense asserting the collateral source rule pursuant to CPLR 4545(c), and the plaintiffs cross-appeal from so much of the same order as denied that branch of their motion which was for summary judgment on the issue of liability.

ORDERED that the order is reversed insofar as appealed from, on the law, that branch of plaintiffs' motion which was to strike the affirmative defense asserting the collateral source rule pursuant CPLR 4545(c) is denied, and that affirmative defense is reinstated;  and it is further,

ORDERED that the order is affirmed insofar as cross-appealed from;  and it is further,

ORDERED that one bill of costs is awarded to the defendants.

The plaintiff Roberta Stein allegedly contracted food poisoning at a Club Med resort in the Bahamas.   She and her husband hired the defendants as legal counsel to pursue a tort action against the resort.   The plaintiffs, alleging that the defendants failed to commence a timely action against a proper resort defendant, commenced this action to recover damages for legal malpractice and breach of contract.   The plaintiffs moved for summary judgment on the issue of liability and to dismiss the defendants' affirmative defense asserting the collateral source rule (see CPLR 4545[c] ).  The Supreme Court denied that branch of the motion which was for summary judgment and granted that branch of the motion which was to dismiss the defendants' affirmative defense.

 In support of that branch of their motion which was for summary judgment on the issue of liability, the plaintiffs failed to demonstrate a prima face case that, but for the negligence of the defendants, they would have prevailed in the underlying tort action against the resort (see Perks v. Lauto & Garabedian, 306 A.D.2d 261, 760 N.Y.S.2d 231;  Riccio v. Deperalta, 303 A.D.2d 742, 743, 758 N.Y.S.2d 104).   Thus, the plaintiffs were properly denied summary judgment on the issue of liability.

 However, the Supreme Court erred in granting that branch of the motion which was to dismiss the defendants' affirmative defense asserting the collateral source rule (see CPLR 4545[c] ).  The measure of the plaintiffs' damages, if any, will be the value of their lost claims as against the resort (see Campagnola v. Mulholland, Minion & Roe, 76 N.Y.2d 38, 42, 556 N.Y.S.2d 239, 555 N.E.2d 611).   The defendants are entitled to mitigate such damages, if any, by offering evidence that such damages would have been reduced by the collateral source rule (cf. Caiati v. Kimel Funding Corp., 154 A.D.2d 639, 546 N.Y.S.2d 877).   The case of Horstmann v. Nicholas J. Grasso, P.C., 210 A.D.2d 671, 619 N.Y.S.2d 848, relied upon by the plaintiffs, is distinguishable.   In that case, the defense afforded by CPLR 4545(c) was not available to the defendant.   Since the defense would have been available to the defendant in the underlying action, it is properly considered in this action in determining damages.

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