Ferranti v. Arshack, Hajek & Lehrman PLLC

Background

Kenneth Michael Ferranti sued his former attorney, Daniel Arshack, and Arshack, Hajek & Lehrman PLLC for legal malpractice and breach of fiduciary duty. Ferranti alleged that the defendants represented him in a criminal prosecution involving alleged sexual harassment of two patients and failed to communicate an initial plea offer accurately.

The initial offer required guilty pleas to two counts of third-degree sexual abuse, two years of probation, and sex-offender treatment or counseling. Ferranti alleged that the defendants incorrectly told him the offer required sex-offender registration and would lead to the loss of his physician-assistant license and ability to adopt a child. He rejected that offer.

After Ferranti testified before a grand jury, he was indicted. The prosecution then made a second offer requiring guilty pleas to third-degree sexual abuse, forcible touching, and first-degree perjury. That offer included six years of probation, sex-offender treatment or counseling, surrender of his physician-assistant license, and a waiver of appeal. Ferranti accepted the second offer, alleging that he did so to avoid a significant prison sentence and that he would have accepted the first offer if it had been accurately communicated.

Defendants’ Motion

The defendants moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not allege enough facts to support a legally plausible claim. For purposes of the motion, the court treated the complaint’s well-pleaded factual allegations as true and considered the complaint and its attached exhibits, along with certain documents from the underlying criminal case.

The court applied New York law. It addressed the breach-of-fiduciary-duty claim first and held that the claim was redundant of the legal-malpractice claim because both claims arose from the same alleged failure to communicate the first plea offer and sought the same damages. The court therefore dismissed the breach-of-fiduciary-duty claim.

Legal-Malpractice Claim

The court held that Ferranti’s legal-malpractice claim was barred by his undisturbed guilty plea. Under the New York rule discussed in the opinion, a person bringing a malpractice claim arising from a criminal proceeding must allege innocence or a legally recognizable claim of innocence while the conviction remains undisturbed. Ferranti had pleaded guilty to the offenses in the second plea offer and had not challenged those pleas. The court rejected his argument that this rule did not apply because his alleged injury involved losing an earlier plea offer rather than being induced to plead guilty.

The court also gave an alternative reason for dismissing the malpractice claim. Under New York law, legal malpractice requires allegations of attorney negligence, proximate cause, and actual and ascertainable damages. The court held that Ferranti could not recover alleged nonfinancial injuries such as emotional distress or loss of the ability to adopt a child. As to his claimed financial losses from losing his physician-assistant license, the court found that he had not adequately alleged that the defendants’ conduct, rather than his own decision to accept the second plea offer, proximately caused those losses.

Disposition

The court denied leave to amend because it found that amendment would be futile. It dismissed the complaint with prejudice. The court granted the defendants’ motion to dismiss with prejudice, directed the clerk to terminate pending motions and adjourn remaining dates, and closed the case.