In Good Old Days Tavern v. Zwirn (259 AD2d 300, 686 NYS2d 414 [1st Dept 1999], lv and rearg denied 261 AD2d 288, 691 NYS2d 759 ) the Appellate Division held that, while privity of contract is generally necessary to state a cause of action for attorney malpractice, liability is extended to third parties, not in privity, for harm caused by professional negligence where there is fraud, collusion, malicious acts or other special circumstances.
In Good Old Days Tavern, the appellate court ruled that there were special circumstances present in that the individual plaintiff had a relationship with the defendant attorney "tantamount to one of contractual privity" (id. at 300).
The Court explained: "Indeed, plaintiff Day was for all intents and purposes a foreseeable third-party beneficiary of the contract pursuant to which he retained defendant attorney Zwirn to represent Good Old Days Tavern, Inc., of which Day was the president and sole shareholder and from which business he derived his livelihood" (id.).