Bison Capital Corp. v Hunton & Williams LLP  2016 NY Slip Op 31467(U)  July 28, 2016
Supreme Court, New York County  Docket Number: 153793/15  Judge: Saliann Scarpulla starts out as a $ 116 Million  legal malpractice case, brought by two uber law firms in the NY area, and ends as a breach of contract for the failure to use a specific attorney at trial. What damages might ensue from that breach remain to be seen.

“Hunton & Williams, a law firm, represented Bison in a litigation in which Bison brought suit against ATP Oil and Gas Corporation (“ATP”) for fees allegedly earned by Bison in procuring financing for ATP from Credit Suisse (the “Bison/ATP action”). The Bison/ ATP action was commenced in the United States District Court for the Southern District of New York. After a four day bench trial, United States District Judge Stanley H. Stein issued Findings of Fact & Conclusions of Law (“FFCL”) on or about March 8, 2011. In pertinent part, Judge Stein found that (1) the contract between ATP and Bison (“Agreement”) provided for Bison to be paid a fee based on “the value of the new funds made available to ATP in a Capital Transaction,” rather than “one percent of the entire face amount of each Capital Transaction,” as advocated by Bison; and (2) “Paragraph 7 of the Agreement only entitles Bison to fees if ATP ‘consummates or enters into an agreement or arrangement providing for a Capital Transaction’ prior to April 1, 2005.” FFCL at 10-11, 13 (quoting Agreement). In making the latter finding, Judge Stein discredited “[Bison’s President’s] in-court testimony that March 31, 2005 marks a cut-off for triggering Bison’s right to perpetual fees,” finding that it was at odds with the Bison’s President’s earlier interpretation of the Agreement, as expressed in an October 15, 2004 letter. Id. at 2, 12. The court found that “[Bison’s President’s] stated position in his October 15, 2004 letter reflects his understanding that in order to receive a fee for ‘financial arrangements’ (i.e., a Capital Transaction), these arrangements must be made ‘within the applicable time frame’ (i.e., prior to April 1, 2005).” Id.  Ultimately, Judge Stein awarded Bison $1.65 million, along with interest, and, on June 7, 2012, the Second Circuit affirmed the judgment. Following the affirmance, Bison allegedly terminated Hunton & Williams’ representation of Bison for cause, and retained separate counsel to pursue enforcement of the judgment. Bison alleges that through new counsel Bison requested an amended judgment and fees and costs. Bison further alleges that on August 15, 2012, the District Court issued an amended judgment, and, two days later, on August 17, 2012, ATP filed for bankruptcy. ”

“Bison’s allegations in support of the malpractice claim – that Hunton & Williams failed to call an expert witness, to introduce into evidence ATP’ s SEC reports, and to rebut attacks on the credibility of Bison’s President – are plainly disagreements with Hunton & Williams professional decisions related to trial strategy and are not actionable as a matter oflaw. See id.; Siracusa v Sager, 105 AD3d 937, 938-39 (2d Dept 2013); Brookwood Co., Inc. v Alston & Bird LLP, (Sup Ct, New York County, Sept. 17, 2015, Bransten, J., Index No. 653723/2014, at *9-11). 1 Further, Bison’s allegations fail to “meet the ‘case within a case’ requirement, that is, the allegations fail sufficiently to allege that ‘but for’ [Hunton & Williams’] conduct [Bison] would have prevailed in the underlying matter or would not have sustained any ascertainable damages.” Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 272 (1st Dept 2004); Rudolf, 8 NY3d at 442. Similarly, Hunton & Williams’ decision to wait to enforce the judgment against ATP during its appeal to the Second Circuit was a “reasonable course[] of action [which] does not constitute malpractice.” Rosner, 65 NY2d at 738. While'” [t]here is nothing inconsistent in a party’s accepting the benefit of a judgment .. . and appealing in an attempt to increase the award,”‘ id at 865 (citation omitted), when an appellate body has “authority … as broad as that of the Trial Judge” and can accordingly decrease a judgment, a party may not simultaneously accept the trial court’s judgment and appeal that award. Id at 866; see Williams v Hearburg, 245 AD2d 794, 794-95 (3d Dept 1997). Here, the Second Circuit, engaging in de novo review, could have found that ATP was entitled to a reduced judgment. See Rojfey, 217 AD2d at 866; Williams, 245 AD2d at 794-95; cf Cornell v TV Dev. Corp., 17 NY2d 69, 73 (1966). In addition, Bison has not alleged sufficient facts to show that Hunton & William’s alleged negligence in not immediately seeking to enforce the judgment proximately caused its injuries. See Phillips-Smith Specialty Retail Group II v Parker Chapin Flattau & Klimpl, 265 AD2d 208, 210 is1 Dept 1999) (citation omitted) (“Contentions underlying a claim for legal malpractice which are ‘couched in terms of gross speculations on future events and point to the speculative nature of plaintiffs’ claim are insufficient as a matter oflaw to establish that defendants’ negligence, if any, was the proximate cause of plaintiffs’ injuries.”). While Bison conclusorily alleges that “[i]n March 2011, and through at least May 2012, ATP had more than enough resources to pay a District Court judgment against ATP of $112 million,” it also alleges that “[ o ]n August 17, 2012, while Bison was seeking to execute the August 15, 2012 judgment against an ATP bank account located in New York County, ATP filed a voluntary petition for Chapter 11 bankruptcy in the U.S. Bankruptcy Court in Houston, Texas” (complaint ilil 144, 161). Bison’s claims that it would have been able to collect on its judgment up until three months before ATP filed for bankruptcy protection “but for [Hunton & Williams’] negligence” in failing to immediately execute on the judgment, and assumption that ATP would not have filed for bankruptcy protection earlier if Bison had attempted to collect on the judgment earlier, is mere speculation, devoid of any evidentiary factual basis. Rudolf, 8 NY3d at 442.2 Bison’s breach of fiduciary duty, negligence and gross negligence, and negligent misrepresentation and fraud claims, all based upon Hunton & Williams’ failure to abide by general professional standards, must be dismissed, as they are all redundant of the legal malpractice claim.”

“Bison, nevertheless, has properly pled a breach of contract cause of action based
solely on its allegations that in the retainer agreement Hunton & Williams specifically
agreed that Marty Steinberg would conduct certain depositions and participate at trial but
he did not do so.”