A New York appellate court has upheld a ruling that allows a legal malpractice case against the law firm Falcon Rappaport & Berkman PLLC to proceed. The court's decision, made on October 15, 2026, affects the co-executors of the MK Estate, who allege that the firm provided incorrect legal advice regarding tax consequences from selling commercial real estate properties. This ruling is significant as it highlights the responsibilities of attorneys in providing accurate legal guidance to their clients.
The case, Karsch v. Falcon Rappaport & Berkman PLLC (Index No. 655205/23|Appeal No. 7244|Case No. 2025-02075), centers around the actions of the law firm in advising the estate's co-executors, Evan Karsch and others. The plaintiffs claim that they relied on the firm's advice when making decisions that led to unexpected tax liabilities. The court's ruling allows the plaintiffs to continue pursuing their claims against the law firm.
The parties involved in this case are Evan Karsch and other co-executors of the MK Estate, which owned commercial real estate properties through a limited liability company. The defendants are Falcon Rappaport & Berkman PLLC, a law firm that provided legal services to the estate. The dispute arose after the estate's executors sold the properties based on the law firm's advice, which they later claimed was incorrect regarding tax implications.
The case reached the Appellate Division of the Supreme Court of the State of New York after the defendants filed a motion to dismiss the plaintiffs' first cause of action for legal malpractice. The defendants argued that the plaintiffs did not adequately plead their claims and that no attorney-client relationship existed regarding the tax advice provided. However, the lower court denied their motion, leading to the appeal.
The court ruled that the plaintiffs had sufficiently alleged their legal malpractice claims. The opinion stated, "plaintiffs adequately allege that but for defendants' deficient tax advice, upon which they reasonably relied, they would have taken another course of action and not have sustained actual and ascertainable damages in the form of undesired tax consequences from the sale of the properties." The judges involved in this ruling included Webber, Friedman, Kapnick, and Pitt-Burke.
This ruling is important as it confirms that clients can hold attorneys accountable for the advice they provide. The court emphasized that the plaintiffs did not need to prove actual damages at this stage, only that damages could be reasonably inferred from their allegations. This sets a precedent for future legal malpractice claims, particularly in cases involving tax advice.
The impact of this decision extends beyond the immediate parties involved. It reinforces the notion that attorneys must provide competent legal advice to their clients, especially in complex areas such as tax law. Clients who believe they have received inadequate advice may now feel more empowered to pursue legal action against their attorneys if they suffer financial losses as a result.
Looking ahead, the defendants may consider appealing this ruling to a higher court. However, the details regarding any potential appeal or related cases were not available in the court filing. The outcome of this case could influence how law firms approach providing legal advice in the future, particularly concerning tax matters.