## Facts

- Edelweiss (USA), Inc. sold frozen poultry to a Russian buyer and arranged ocean carriage in three shipments through Orient Overseas Container Line Limited (OOCLL).
- OOCLL issued bills of lading for each shipment; two were straight (nonnegotiable) bills naming the buyer as consignee, and the third shipment had an “order of shipper” (negotiable) bill naming Edelweiss as the party controlling delivery.
- The buyer did not pay; Edelweiss did not tender original bills of lading to the buyer.
- OOCLL released the shipments in Russia without presentation or surrender of the original bills of lading.
- Edelweiss retained Vengroff Williams & Associates, Inc. (a collection agency), which retained an attorney to pursue recovery against OOCLL; Edelweiss later alleged they failed to sue OOCLL within the applicable limitations period, extinguishing the cargo claim.
- Edelweiss sued Vengroff for legal malpractice. The trial court granted Edelweiss summary judgment on malpractice liability as to all three shipments and denied Vengroff’s request to dismiss the malpractice claims and to limit damages to $500 on the January 24, 2001 shipment.
- Vengroff appealed.

## Issues

1. Whether Edelweiss established, as a matter of law, malpractice liability for the January 10 and January 31, 2001 shipments by proving it would have prevailed in an underlying cargo claim against OOCLL.
2. Whether Vengroff was entitled to summary judgment dismissing the malpractice claims as to the January 10 and January 31 shipments for lack of causation and ascertainable damages.
3. Whether the January 24, 2001 shipment was subject to a contractual limitation of liability (effectively capping “but-for” malpractice damages).

## Decision

- The Appellate Division modified the order.
- It denied Edelweiss summary judgment on malpractice liability as to the January 10 and January 31 shipments.
- It granted Vengroff summary judgment dismissing the malpractice claims as to the January 10 and January 31 shipments.
- It otherwise affirmed, leaving the malpractice claim tied to the January 24 shipment pending, subject to the bill-of-lading limitation of liability.

## Legal Principles

- A legal malpractice plaintiff must show a departure from ordinary professional skill and knowledge and that the departure proximately caused actual, ascertainable damages.
- Proximate cause in malpractice requires proof of a “case within a case”: the plaintiff must show it would likely have succeeded in the underlying action and obtained a recoverable judgment but for the alleged negligence.
- On summary judgment, the movant must establish entitlement to judgment as a matter of law; failure to make a prima facie showing requires denial regardless of opposing proof.
- The character of a bill of lading affects the viability of a misdelivery claim against a carrier; straight bills naming the buyer as consignee may not support a seller’s misdelivery claim absent proof of a superior right to control delivery.
- Contractual or statutory carrier liability limits incorporated into a bill of lading constrain the recoverable value of the underlying claim and therefore limit malpractice damages measured by the lost recovery.

## Conclusion

The court narrowed the malpractice case by dismissing claims tied to two shipments covered by straight bills of lading because Edelweiss did not establish a viable underlying cargo claim, while permitting the claim tied to the shipment covered by an “order of shipper” bill of lading to proceed, subject to the bill-of-lading limitation on recovery.


Edelweiss (USA), Inc. v. Vengroff Williams & Assocs., Inc., 59 A.D.3d 588, 873 N.Y.S.2d 714 (App. Div. 2d Dep't 2009)