Cases This Week in Legal Malpractice

Fred W. Nelson, etc., respondent, v Stanley Kalathara, defendant, Claude Simpson, appellant. (Index No. 3167/07)
2008 NY Slip Op 1313
February 13, 2008, Decided

Here, plaintiff is the guardian of an incapacitated seller of real property, and defendants were the attorneys for purchaser. Purchase funds went astray, going to incapacitated sellers former guardian [and a relative.] Seller’s Guardian unsuccessfully sued purchaser’s attorneys with whom he had no privity, and was unable to convince the court that there was fraud, or independent malicious acts necessary to bring an action against purchaser’s attorneys.

Plaintiff may not sue opponent’s attorneys, or attorneys who were not acting for plaintiff in the absence of independent fraud or malicious acts.

Tsvi Dallal, respondent, v Kantrowitz, Goldhamer & Graifman, P.C., appellant. (Index No. 99/2003)
2008 NY Slip Op 1295
February 13, 2008, Decided

Defendant attorney waited too long to bring a motion for summary judgment, which had to be brought within 60 days. Court cites two Court of Appeals cases on issue, Miceli and Brill.

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Pennsylvania Legal Malpractice Statute of Limitations

Hinshaw reports a fairly complicated commercial liquidated damages case arising from a bank loan to individuals which led to a default, which led to a confession of judgment, which led to a settlement, with inadequate documentation of the settlement.  At least one judgment was not marked "satisfied."  After trips up and down to the Appellate Courts there, and after changes in the law of liquidated damages, it all boiled down to a question of when the bank became aware of its attorney's mistake.

"In September 2005, Wachovia initiated a legal malpractice action in Leigh County against Ferretti, asserting claims of professional negligence and breach of contract. In February 2006, Ferretti filed an answer, asserting, inter alia, that Wachovia’s claims accrued no later than October 1994—that is, when Pisani commenced his action against Meridian—and were thus time-barred by the statute of limitations. The trial court found in favor of Ferretti and dismissed the complaint with prejudice. More specifically, the trial court found that the negligence cause of action, which carried a two-year statute of limitations, accrued in June 2003. The trial court likewise found that the breach of contract cause of action had accrued in October 1994. Thus, the statute of limitations for both claims had run prior to filing of the complaint.

Wachovia appealed, arguing that it had not in fact experienced an actual loss by that time and that a suit against Ferretti before that time would have been premature. The Pennsylvania appellate court disagreed and affirmed the dismissal. "

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Clients Lose Settlement and Legal Malpractice Case

Clients claim that attorney forged their names on settlement documents, then stole money.  They sue attorney, get judgment, and then lost any ability to collect, when carrier successfully disclaims and wins a collection case brought by the cleints against the carrier. Wiley Rein, LLP reports:

The Supreme Court of Nebraska has held that misappropriation and dishonesty exclusions in a lawyers professional liability policy barred an attorney's former clients from executing legal malpractice judgments against the insurer that issued the policy. Fokken v. Steichen, 2008 WL 62539 (Neb. Jan. 4, 2008).

Several of the attorney's former clients accused him of settling their tort claims without their approval by signing their signatures on release agreements and settlement checks without their authorization. The former clients also asserted that they had not received any of the settlement proceeds from the attorney. Furthermore, the former clients alleged that the attorney (1) failed to communicate with them regarding the defendants' settlement offers; (2) accepted the settlement offers on their behalf without obtaining their consent; (3) allowed their tort claims to be dismissed with prejudice after the statute of limitations had expired; and (4) breached fiduciary duties owed to them. The former clients won malpractice judgments against the attorney and then instituted garnishment proceedings against the attorney's insurer, and the parties cross-moved for summary judgment.

In granting the insurer's motion for summary judgment, the court first observed that the former clients' garnishment claims against the policy proceeds depended on whether the insurer would have been obligated to indemnify the attorney for the malpractice judgments in the first place because "the claim of a judgment creditor garnishor against a garnishee can rise no higher than the claim of the garnishor's judgment debtor against the garnishee." The court next considered the former clients' argument that "where an insurance company is notified of a pending suit against an insured and has a full opportunity to defend the action, the judgment against the insured, if obtained without fraud or collusion, will be conclusive against the insurance company." The court rejected this contention, explaining that the insurer was not challenging the malpractice judgments but was instead contending that the judgments were not covered by the policy. "

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Not All Trials go to a Jury, Even in Legal Malpractice

One of the more ironic but interesting aspects of legal malpractice, like quantum mechanics, is that the very act of measurement [trial] can cause the observed object to change.  Similarly, in the prosecution of a legal malpractice case, there can be legal malpractice .  Here, from the Madison Record there is the potential for a further case:

"Madison County Circuit Judge Daniel Stack had to consider calling a mistrial Tuesday in a professional negligence case against the law firm Thompson Coburn.

Representing Magna Bank (now Regions), plaintiff's attorney Rex Carr -- whose trial skills are legendary -- informed Stack that he had been giving daily transcripts to some of his witnesses.

Carr told Stack that he has supplied trial transcripts to his experts, including his star, and protege, Belleville attorney Tom Keefe.

He said the only other time he had to deal with daily trial transcripts was during the historic three-and-a-half year-long dioxin trial he pursued in St. Clair County.

Potential witnesses were allowed to review the transcripts in that case, he said, due to the sheer volume of evidence presented during the record setting civil trial against Monsanto.

After Carr's surprise announcement that he let witnesses see that transcripts, Carrie Hogan of Jones Day in Chicago wanted Stack to call a mistrial.

Stack, who came in to work on a state holiday for judges (Lincoln's birthday), called a recess and advised Carr and Hogan to discuss the possibility of a settlement, but those talks stalled after about an hour of discussions.

Afterwards, Carr said he would exclude any witness that saw the transcripts. "

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Duane Morris Legal Malpractice Case Decided

A commonly quoted statistic is that 95% of all cases are resolved prior to trial;  they are resolved through motions to dismiss, motions for summary judgment and settlements.  The few cases that go on to trial generally, they calculate, go 50/50.  Here is a highly reported, big $ legal malpractice case which went to trial, and ended in a verdict for defendant.  Law.Com reports:

"A Philadelphia jury Wednesday cleared Duane Morris of a claim of legal malpractice for its representation of a former client in settlement negotiations, according to attorneys in the case.

The eight-member jury found the firm did not breach the standard of care or breach any fiduciary duty when its client signed a settlement agreement that provided no security, the attorneys said.

The case was held before Philadelphia Common Pleas Judge Howland W. Abramson in the Commerce Court Program.

The eight-member jury began deliberating at about 3 p.m. on Tuesday for 3 1/2 hours and came back to deliberate at 1 p.m. Wednesday, handing down a verdict at 3 p.m. The jury was selected on Feb. 4, and closing arguments were held on Tuesday. "

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Federal Question Jurisdiction in Legal Malpractice

Legal malpractice is a wholly state cause of action, and might be brought in Federal District Court only if there is a basis for jurisdiction.  Diversity jurisdiction is the one most quickly thought of, but in certain circumstances federal question jurisdiction may also apply.  Questions of legal malpractice in a patent representation is one such example.  Here, the case of  Immunocept v. Fulbright & Jaworsky provides a discussion of why it may [and on removal, must] be brought in Federal District Court.  There they say:

"Because the claim scope determination involved in the malpractice claim presents a substantial question of patent law, we conclude that jurisdiction is proper under section 1338."

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Court Will not Allow Attorney to Quit

In Scher v. Mishkit  [NYLJ exerpt], Supreme Court, Suffolk County refused to allow this attorney to wifhdraw pursuant to CPLR 321.  This situation is more common than one might guess, especially in medical malpractice cases.  The case is brought, and prosecuted, with depositions, and medical record exchanges, and then placed on the calendar, without an expert in place. 

Not unexpectedly, time goes by, and the case starts to be near the top of the list for jury selection, and defendants have not offered to settle.  Plaintiff's attorney still has no expert, and it starts to look like they may simply have worked this case up on the assumption [hope] that defendants would settle...and now they have a problem.

That's what this case seems to be about. "PLAINTIFF'S lawyer moved to withdraw as the attorney of record asserting that the attorney-client relationship was at an "impasse." Counsel argued it was unable to find an expert willing to testify for plaintiff at trial in this medical malpractice action. Plaintiff opposed the motion, alleging she cooperated with counsel and through all the years of representation received "constant assurance that this was a valid case."

Result?  Attorney must stay in case.


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Failure to Pay Legal Malpractice Judgment Leads to Attorney Suspension

It is an ethical  violation of 22 NYCRR 603.4[e][1][iv]  willfully to fail to satisfy a judgment arising out of one's professional activities.  For the most part, these judgments arise from legal malpractice. Here  an attorney is suspended because of an unsatisfied judgment:

"Respondent's failure to cooperate with the Committee's investigation (22 NYCRR 603.4[e][1][i]) and her willful failure to pay money owed to a former client, which debt is demonstrated by a judgment (22 NYCRR 603.4[e][1][iv]), warrant her immediate suspension (see In re Zimmerman, 45 AD3d 212 [2007]; Matter of McClain-Sewer, 39 AD3d 35 [2007]; In re Singer, 301 AD2d 336 [2002]; In re Adelman, 263 AD2d 160 [1999]). Accordingly, the Committee's motion should be granted and respondent suspended from the practice of law, effective immediately, until the proceedings pending before the Committee are concluded and until further order of this Court. "

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Judicial Hellhole and Legal Malpractice

So far the central question in this legal malpractice case is whether it is taking place in a judicial hellhole, and incidently, who gets to make that decision.

This is a legal malpractice case taking place in Madison County, Illinois.  Here is the story from the Madison St. Claire Record:

"Relics of Madison County's past are scheduled to reappear for a legal malpractice trial that will open old, painful wounds and be as dramatic as anything ever seen in an Edwardsville courtroom.

The heart of the matter is about the area's most notorious swindler James Gibson who stole millions from children and widows by making off with their structured settlement funds.

But legendary plaintiff's attorney Rex Carr -- who plans to call former Madison County judges Gordon Maag and Randall Bono and prolific personal injury attorney Thomas Q. Keefe as witnesses -- is trying to convince the jury to take pity on another victim in the "debacle," his client, Magna Bank (now Regions Bank).


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Indiana Excess Insurer Malpractice Case

Indiana Legal Blog reports on the Transcontinental legal malpractice case.  We reported on it earlier, but there seems to be a new twist:

"On appeal, the Indiana Court of Appeals did not accept the excess insurer’s argument that they should be allowed to bring a legal malpractice claim against the client’s attorneys under the doctrine of equitable subrogation. The Indiana Court of Appeals found no material issue of fact in finding that limited correspondence between the excess insurer and the client’s attorneys fell significantly short of constituting an attorney/client relationship. Id. at 724. Furthermore, the Indiana Court of Appeals held that allowing the legal malpractice suit under the doctrine of equitable subrogation would essentially be the same as allowing an assignment of the cause of action from one party to another, which it will not do. Id. at 723. In support of the holding, the Indiana Court of Appeals explained it will not allow legal malpractice actions in these situations for the reason that allowing them would divide the loyalty of the attorneys. If allowed, attorneys will be tempted in not vigorously representing their clients in order to protect themselves against third parties such as the excess insurer in this case. Id.

The Indiana Supreme Court granted a petition to transfer and the Indiana Court of Appeals opinion has been vacated. "

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Arbitration in Legal Malpractice

Here is a commentary from Larry Upshaw  on the pro/con arguments for a law firm putting an arbitration clause in the retainer agreement.  From plaintiff's prospective, it can be a costly problem.  Take a commercial legal malpractice in which there are potential $ 1 million damages.

A trial can be had for the cost of an index number.  The arbitrator's fees can be as high as $ 50,000.

From the blog: "It’s curious that many lawyers routinely put arbitration clauses in their engagement letters with clients. Here you have quite literally the foot soldiers in the third branch of government, charged by our professional oath to be officers of the court. And yet, in contracts with clients, these attorneys opt out of the court system by obligating clients to take any dispute to arbitration.

The subtext of that conduct seems clear: these lawyers don’t trust the court system to treat them fairly and prefer the private dispute resolution process of arbitration to court. Call me crazy, but that certainly sounds out of whack. It’s kind of like a doctor saying, “If I get sick, whatever you do, do not take me to a hospital.”

While it may seem ironic that lawyers are running for protection to arbitration clauses, there is an even bigger ironic surprise waiting for these lawyers who opt out of the court system. Keep in mind that the arbitration clause in your engagement letter obligates your client to pursue his or her malpractice claim against you in arbitration instead of in court. And it therefore obligates your insurance carrier to have its liability for your malpractice determined in arbitration instead of in court. It turns out that insurance companies actually like jury trials and are not always all that fond of arbitration. Lawyers who force their clients into arbitration and then get an arbitration case for malpractice are now routinely receiving a “Reservation of Rights” letter from their insurance carrier, threatening to deny insurance coverage because the lawyer deprived the insurance company of its right to a jury trial.

Next time you are tempted to show your distrust for the court system by including an arbitration clause in your fee contracts, keep in mind that you may have just cancelled your malpractice insurance policy. "

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Motions to Dismiss on "Documentary Grounds" and Legal Malpractice

Here is a case from Richmond County with an interesting twist.  Facts:  Mother gets into money trouble and faces foreclosure.  Daughter helps out and negotiates a mortgage to pay off the earlier debts and prevent foreclosure.  An attorney is "assigned" by the mortage company for the mother.  Later Mom comes to believe that the terms and fees of the mortgage have been misrepresented.  She stops paying and this action endues.

After being sued, she third-parties the attorney.  Now he, as a third-party defendant moves to dismiss.

"In support of his motion to dismiss the third-party complaint pursuant to CPLR 3211(a)(1), attorney Bellini maintains that the factual allegations in the third-party complaint preclude the maintenance of a cause of action against him for breach of fiduciary duty. In this regard, Bellini purports to rely upon the allegations that: (1) it was the daughter, Elizabeth Giammarino, who was acting as the third-party plaintiff's attorney-in-fact; (2) the third-party plaintiff did not attend the closing; and (3) attorney Bellini never spoke to the third-party plaintiff prior thereto. On the basis of this "documentary evidence," Bellini contends that any cause of action against him for breach of fiduciary duty could only run in favor of Mrs. Giammarino's daughter, Elizabeth.

CPLR 3211(a)(1) provides that a party may move for the dismissal of one or more causes of action asserted against it on the ground of a defense founded upon documentary evidence. To succeed on such a motion, however, the documentary evidence that forms the basis of the defense must be such that it resolves all of the factual issues as a matter of law, and conclusively disposes of plaintiff's claim (see, Scadura v. Robillard, 256 AD2d 567 [2nd Dept. 1998]). Thus, a motion to dismiss the complaint pursuant to CPLR 3211(a)(1) may be granted only where the documentary evidence utterly refutes plaintiff's factual allegations, thereby conclusively establishing a defense to the action as a matter of law (see, Ruby Falls, Inc. v. Ruby Falls Partners, LLC., 39 AD3d 619 [2nd Dept. 2007]). Here, the third-party defendant has not met this burden.

The allegation that the daughter was acting under a power of attorney as her mother's attorney-in-fact does not conclusively establish the absence of a fiduciary duty between the third-party plaintiff and counselor Bellini. Accordingly, this fact, standing alone, will not support dismissal. "

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Duane Morris $ 1.6 Million Legal Malpractice Case

Law.Com reports this Philadelphia case.  "In opening statements on Tuesday in Adlerstein v. Duane Morris, physicist Joseph K. Adlerstein's attorney, Clifford E. Haines, said Duane Morris was responsible for his client only receiving $200,000 of a $1.8 million settlement with SpectruMedix, the company he founded. And that $200,000, he said, ultimately went toward rising legal bills from Duane Morris. Haines is the name partner with Clifford E. Haines & Associates. "

While the case is widely reported in Law.Com and other blogs, there are three standout items here which would have different results in NY:

1.  The defaulting payor filed a bankruptcy action;

2.  There is no discussion of "collectiblity" from the bankrupt;

3.  Plaintiff has already been found liable for attorney fees to Duane Morris.  There is no discussion of collateral estoppel based upon that finding.

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No Harm, No Foul in Legal Malpractice

Thoroughly investigate any human endeavor, and error can be found.  Legal malpractice law holds that one must demonstrate that "but for" the attorney's error, there would have been a better or different result.  This case, Cohen v Weitzner ,2008 NY Slip Op 00618 ,Decided on January 31, 2008 .Appellate Division, First Department  illustrates the rule:

"Plaintiffs allege that the settlement required them to pay more in taxes than they had anticipated based on a spreadsheet prepared for them by defendants in which, due to a typographical error, their tax liability for the year 2000 was understated by $121,000, and that they have been damaged in that amount by defendants' misrepresentation. However, plaintiffs' tax liability was correctly reflected in the returns they filed before retaining defendants and entering into the settlement agreement. In any event, their tax liability was not the subject of the negotiations with the IRS. Thus, plaintiffs fail to allege how defendants' error damaged them (see Lama Holding Co. v Smith Barney, 88 NY2d 413, 421-422 [1996]; Zarin v Reid & Priest, 184 AD2d 385, 386-387 [1992]). Further, as defendants were retained to try to obtain a reduction in the penalties assessed against plaintiffs, and they succeeded, there can be no claim
that they breached a duty to plaintiffs (see generally Dweck Law Firm v Mann, 283 AD2d 292, 293 [2001]). "

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Yet Another Trap in Municipal Injury Suits

When does a municipality have knowledge of "the essential facts" upon which a claim is made, and when does a municipality have "actual knowledge"?  This seemingly small distinction has grave consequences for a plaintiff, and incidentally plaintiff's attorney,

Matter of Felice v Eastport/South Manor Cent. School Dist. ,2008 NY Slip Op 00691 ,Decided on January 29, 2008 ,Appellate Division, Second Department .

"CRANE, J.P. An injured person who has failed to serve a timely notice of claim may, pursuant to General Municipal Law § 50-e(5), apply for permission to serve a late notice. Among the "facts and circumstances" a court must consider in determining an application for permission to serve a late notice of claim are the actual knowledge of the public corporation of the "essential facts constituting the claim" and the prejudice to the public corporation from a claimant's failure to serve a timely notice of claim (General Municipal Law § 50-e[5]). Here, we take the opportunity to clarify the standards relevant to the courts' exercise of discretion in deciding these applications, so the outcomes are more predictable and not merely the product of judicial whimsy. More precisely, we grapple with the distinction between, on the one hand, the knowledge obtained by a public corporation [including a school district (see General Municipal Law § 50-e[1][a]; [*2]General Construction Law §§ 66[1]-[4])] of the "essential facts constituting the claim," and, on the other, the knowledge obtained by a public corporation of facts about an accident and the resulting injury that do not amount to the essential facts constituting the claim. We also analyze the effect of this distinction in determining whether the lack of a timely notice of claim has substantially prejudiced a public corporation in its ability to defend the claim on the merits.

We have consistently held that a public corporation's knowledge of the accident and the injury, without more, does not constitute "actual knowledge of the essential facts constituting the claim" (General Municipal Law § 50-e[5]; see Weber v County of Suffolk, 208 AD2d 527, 528), at least where the incident and the injury do not necessarily occur only as the result of fault for which it may be liable. In order to have actual knowledge of the essential facts constituting the claim, the public corporation must have knowledge of the facts that underlie the legal theory or theories on which liability is predicated in the notice of claim; the public corporation need not have specific notice of the theory or theories themselves.

Finally, a claimant seeking leave to serve a late notice of claim pursuant to General Municipal Law § 50-e(5) bears the burden of showing that the delay will not substantially prejudice the public corporation in maintaining its defense on the merits (see Jordan v City of New York, 41 AD3d 658; Matter of Dumancela v New York City Health & Hosps. Corp., 32 AD3d 515, 516; Breedon v Valentino, 19 AD3d 527, 528). It makes sense that the burden of establishing the lack of prejudice be placed on the claimant, who, after all, is seeking to excuse his or her failure to comply with the statute. Of course, when the public corporation has actual knowledge of the facts constituting the claim, it may be easier for a claimant to meet this burden (see Gibbs v City of New York, 22 AD3d 717, 719). Indeed, the Court of Appeals has recently observed that "proof that the defendant had actual knowledge is an important factor in determining whether the defendant is substantially prejudiced by such a delay" (Williams v Nassau County Med. Ctr., 6 NY3d at 539; see Jordan v City of New York, 41 AD3d 658; Matter of Vasquez v City of Newburgh, 35 AD3d 621, 623; Rechenberger v Nassau County Med. Ctr., 112 AD2d 150, 153). Thus, for example, in Jordan v City of New York, which concerned a car accident, the claimant, the driver, was able to establish that the City had actual knowledge of the essential facts constituting the claim because the passengers in his car had served timely notices of claim. A fortiori, the City was not prejudiced by his delay in serving a timely notice of claim (see Jordan v City of New York, 41 AD3d 658).

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Doctor Sues his Attorneys when they Settle a Case Without Telling Him

Here is a case from Louisiana found by the Law Profession Blog..  While it has very unfamiliar language in it, the situation is very familiar.  Doctor is sued for medical malpractice.  He does not have a consent policy.  Carrier settles without telling him some important things, such as, they waived a jury trial for him.  He sues the carrier and the attorneys for settling without telling him.  Result?  The case continues.  Dismissal in favor of the carrier reversed.

Here are some of the interesting terms:  "precription"  "permeptory exception of peremption." 

Familar issues:  discovery versus statute of limitations, waiting too long to sue.  The court says: "After careful review of the record, we find it was reasonable for Dr. Teague not to recognise what prompted the defendants to mediate and settle...."

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Philadelphia Legal Malpractice Case Goes to Verdict

Yesterday we reported that the Purlite legal malpractice case was going to the jury;  it appeared from reports that a question of the statute of limitations would be the most important issue.  Now, breaking news is that the trial ends with a defense verdict, but on the merits and not on the question of the statute of limitations.  From NY Lawyer:

"Morgan Lewis & Bockius yesterday defeated a $20 million breach of contract claim brought by a former client.

The 12 jurors in Brodie v. Morgan Lewis came back just before noon after three-and-one-half hours of deliberations over two days. They were unanimous in their defense verdict.

While the jury found that Bro-Tech Corp. - operating as Purolite - and its owners Don and Stefan Brodie properly brought the suit within the four-year statute of limitations, they said Morgan Lewis did not breach its contract with the Brodies by advising them to continue selling their water filtration products to companies in Cuba.

The case was held before Senior Judge Albert W. Sheppard in Philadelphia's Commerce Court Program.

The verdict is a win for Morgan Lewis as well as its counsel, William J. O'Brien and Nancy Gellman of Conrad O'Brien Gellman & Rohn. "

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Bankruptcy Court is the Hot New Venue for Legal Malpractice

It may be a sign of the new economic times, or it may simply be a new trend, but legal malpractice cases are increasing in the bankruptcy setting.  NY Lawyer reports a fraudulent concealment - legal malpractice case by the trustee against an attorney and firm today.

"In In re Food Management Group (Grubin v. Rattet), 04-22880, Judge Martin Glenn ruled that allegations of fraudulent concealment, breach of fiduciary duty, negligence and fraud on the court could proceed against attorneys Robert L. Rattet and Jonathan S. Pasternak, as well as the law firm Rattet, Pasternak & Gordon Oliver.

The lawyers and the firm are accused of failing to disclose that an "insider" of debtor Food Management Group had violated a court order by submitting a bid in the auction of the company's assets.

The trustee also alleged that the lawyers improperly failed to disclose that they had represented one of the insiders before the auction.

Judge Glenn said that if the allegations are proven, the attorneys and their firm engaged in "serious wrongdoing."

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Purolite Legal Malpractice Case and Statute of Limitations

Purolite hired defendant law firm Morgan Lewis & Bockius for advice on whether they could sell products to Cuba.  The law firm gave advice, Purolite came under criminal investigation, and a law suit was born. NY Lawyer reports

"Both sides said Morgan Lewis' original advice in 1993 was for the company to stop all sales to Cuba and a memorandum was sent to all employees to that effect. When two Purolite sales people from Canada and the United Kingdom called to say such a move would put them in violation of their respective countries' blocking orders, Morgan Lewis advised Purolite days later to continue to sell to Cuba from foreign offices but to ensure that there was no U.S. involvement with those sales, Purolite's attorney told the jury."

Now, it seems the central issue at the trial of this case is the statute of limitations.  When did Purolite realize it had a legal malpractice cause of action?  "After more than two weeks of testimony and years of previous litigation, the $20 million case that pits water filtration company Purolite against its former law firm, Morgan Lewis & Bockius, could come down to the first question on the verdict sheet – whether the case is barred by the statute of limitations.

Although attorneys for both sides in Bro-Tech v. Morgan Lewis spent the majority of yesterday morning's closing statements discussing whether Purolite and its owners, Stefan and Don Brodie, should prevail in their breach of contract claim against the firm, they concluded with discussions of whether the claim was properly filed within the four-year statute of limitations. Bro-Tech is the parent company of Purolite ."


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Singer v. Attorney Retainer Dispute Continues

This case has gone from US District Court to the US Court of Appeals for the Second Circuit, to the NY Court of Appeals, and back to District Court.  It's a case in which the question now is whether the retainer agreement is in effect, whether misconduct by the attorney vitiates the agreement, and to whom a big fee goes.

"This dispute between the plaintiff, Edward C. King ("King" or the "Plaintiff"), a musician, and his lawyer, defendant Lawrence A. Fox ("Fox" or the "Defendant") concerning the retainer agreement between them has occupied this Court, the magistrate judge, the Court of Appeals on two occasions, and the New York Court of Appeals over the past ten years. Presently at issue is Fox's motion to strike King's demand for a jury trial; initially made in August, 2003, deferred as a consequence of the grant of summary judgment for Fox in January, 2004, and renewed on October 31, 2007, after the remand from the Court of Appeals on August 11, 2006. For the reasons stated below, the motion will be denied."

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Rule 1215 and Attorney Fees

22 NYCRR 1215 is a section of the law that governs attorney fees and engagement letters or retainer agreements.  Until recently, courts have had differeing interpretations of the penalty when an attorney seeks fees but has no retainer agreement or engagement letter.

The cases were decided in three different ways:  the first allowed the attorrney fees determined in quantum meruit, the second was that the attorney could keep collected fees but no future fees, and the third was to allow no fees at all.

Along came the case of Rubenstein v. Ganea held:

"We find that a strict rule prohibiting the recovery of counsel fees for an attorney's noncompliance with 22 NYCRR 1215.1 is not appropriate and could create unfair windfalls for clients, particularly where clients know that the legal services they receive are not pro bono and where the failure to comply with the rule is not willful (see Matter of Feroleto, supra at 684). Our holding would be different were this matter a matrimonial action governed by the more stringent disciplinary requirements of 22 NYCRR 1400.3 and Code of Professional Responsibility DR 2-106 (c) (2). Here, Ganea concedes in her reply brief that "she did not think all legal services received would be free." Rubenstein's failure to comply with 22 NYCRR 1215.1 was unintentional, no doubt attributed to the promulgation of the rule only seven weeks prior to his retention. Accordingly, the{**41 AD3d at 64} Supreme Court correctly held that Rubenstein could seek recovery of attorneys' fees upon the theory of quantum meruit.[FN7]"

Now, the case of Mallin v. Nash in New York County adopts the Second Department's holding:

"Public policy dictates that courts pay particular attention to fee arrangements between attorneys and their clients, as it is important that a fee contract be fair, reasonable, and fully known and understood by the client (see Jacobson v Sassower, 66 NY2d 991, 993, 499 NYS2d 381, 489 NE2d 1283 [1985]; Shaw v Manufacturers Hanover Trust Co., 68 NY2d 172, 176, 507 NYS2d 610, 499 NE2d 864 [1986]; Matter of Bizar & Martin v U.S. Ice Cream Corp., 228 AD2d 588, 644 NYS2d 753 [2d Dept 1996]). If the terms of a retainer agreement are not established, or if a client discharges an attorney without cause, the attorney may recover only in quantum meruit to the extent that the fair and reasonable value of legal services can be established (see Matter of Cohen v Grainger, Tesoriero & Bell, 81 NY2d 655, 658, 602 NYS2d 788, 622 NE2d 288 [1983]; Campagnola v Mulholland, Minion & Roe, 76 NY2d 38, 43, 556 NYS2d 239, 555 NE2d 611 [1990]; Matter of Schanzer, 7 AD2d 275, 182 NYS2d 475 [1st Dept 1959], affd 8 NY2d 972, 204 NYS2d 349, 169 NE2d 11 [1960]).

 In Mallin, the attorney was awarded no fees under quantum meruit.

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The Brando Family, Death and Legal Malpractice

Christian, son of Marlon Brando died last week, and the AP his former wife has now started a legal malpractice action concerning his will and codicils.  "But his family requested the autopsy on Monday "based on his past drug history," Los Angeles County coroner's Lt Fred Corral said.

The autopsy, including a toxicology analysis, was scheduled for Tuesday, Mr Corral said.

Also on Monday, Christian Brando's ex-wife Deborah sued the executors of Marlon Brando's estate, claiming she is a victim of professional negligence, fraud and deceit.

She claimed that, as part of a February 2007 settlement with Christian Brando in a domestic violence case, she would become assignee of her ex-husband's rights and claims in the estate.

Deborah Brando accused producer Mike Medavoy and fellow executors Larry J Dressler and Avra Douglas of executing a forged codicil to Brando's will days before his death in July 1, 2004.

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Legal Malpractice in its many Guises

Small or Multi-billion dollar case, legal malpractice cases all rest upon the same three bases:  deviation from accepted practice, proximate cause and damage.  As an example, here is a smallish case from the Madison Record:

"A legal malpractice claim filed by Cydney Hollaway against Fairview Heights attorney Thomas C. Rich alleges she did not receive an adequate award for injuries in a workers' compensation claim.

Hollaway, represented by Patricia A. Zimmer of Ripplinger & Zimmer in Belleville, is seeking in excess of $50,000 in damages plus costs of the suit.

According to the suit filed Jan. 22 in St. Clair County Circuit Court, Rich allegedly presented Holloway's claim to an arbitrator as one for wage differential instead of one for permanent total disability.

Holloway was injured while working for Four Truckers, Inc. on Feb. 8, 2001, the suit claims. Holloway contracted with Rich on Feb. 15, 2001, whereby Rich would represent Holloway in a work comp claim.

"On December 13, 2005, defendant presented plaintiff's claim at a hearing before Illinois Workers Compensation Commission Arbitrator John Dibble," the complaint states.

"On January 23, 2006, Arbitrator Dibble issued his decision, which awarded plaintiff compensation in the form of a wage differential."

Holloway claims she had a viable claim for permanent total disability and would have been successful in obtaining an award, "but for defendant's negligence."

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Bankruptcy and Legal Malpractice

From an unpublished Illinois case, discussed  by  the Illinois Legal Malpractice Blog, we are reminded of the fact that a bankruptcy filing will generally cut off plaintiff's right to bring any law suit, including the legal malpractice case.  Two things that always bear review:

1.  When one files bankruptcy, everything, including potential unpled causes of action become part of the bankrupt's estate, and no longer personal to the bankrupt;

2.  Attorney fee disputes serve as collateral estoppel to a later legal malpractice case.


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An Illustrative Case in Legal Malpractice

On some ocassions, the dissection of a case yields interesting insights.  Here is a Second Department Case: Petersen v Lysaght, Lysaght & Kramer, P.C. ,  2008 NY Slip Op 00472
Decided on January 22, 2008 ,Appellate Division, Second Department  which illustrates several points:

1.  Some cases are a problem from begining to end.  In this case there have been three appeals, and the case ends when plaintiff fails to file a note of issue, and cannot explain why, or show a meritorious case.

2.  Nassau and Suffolk notes of issue dates are sacrosanct.  "The certification order of the Supreme Court dated February 3, 2006, directing the plaintiff to file a note of issue within 90 days and warning that the action would be deemed dismissed without further order of the court if the plaintiff failed to comply with that directive, had the same effect as a valid 90-day notice pursuant to CPLR 3216 (see Louis v MTA Long Is. Bus Co., 44 AD3d 628; Hoffman v Kessler, 28 AD3d 718).

3.  Louis is more often cited for the proposition that the order of court [Kings, for example] did not have the same effect as a CPLR 3216 notice.

4.  It is usually a bad sign when the plaintiff-Appellant's attorney is not listed on the appellate decision.  Generally, it means that the attorney did not ask for, or attend for oral argument.  Often a bad choice, it tells the court that appellant is not really interested in the outcome.

5.  This court determined that everyone here made mistakes:

"Moreover, the plaintiff's motion papers failed to establish the existence of a meritorious cause of action. Contrary to the plaintiff's contention, we have not previously decided this issue in his favor. On a prior appeal, we held that the Supreme Court should have denied those branches of a motion by the defendants Lysaght, Lysaght & Kramer, P.C., Peter Kramer, and Michael Balducci (hereinafter the defendants) which were to dismiss certain of the plaintiff's causes of action insofar as asserted against them as barred by the doctrine of collateral estoppel (see Petersen v Lysaght, Lysaght & Kramer, 250 AD2d 581). On a second prior appeal, we held that the Supreme Court should have denied a motion by the defendants for summary judgment dismissing the same causes of action, on the ground that they failed to establish their prima facie entitlement to judgment as a matter of law (see Petersen v Lysaght, Lysaght & Kramer, 288 AD2d 281). Finally, on a third prior appeal, we reversed so much of an order of the Supreme Court as granted a motion by the defendants for leave to renew their prior summary judgment motion, on the ground that they failed to meet the requirements of CPLR 2221(e)(3)(see Petersen v Lysaght, Lysaght & Kramer, P.C., 19 AD3d 391). Thus, we have never previously held that the subject causes of action are, in fact, meritorious.

6.  One really should put everything into demonstrating a meritorious cause of action.  "To establish the merit of his claims, the plaintiff tendered a copy of his verified complaint, which, in relevant part, stated that "[t]he defendants made no efforts to secure a default judgment" against a defendant in an underlying personal injury action, thereby committing legal malpractice. Without even a modicum of proof that a default judgment properly could have been obtained against that defendant in the underlying action (see Woodson v Mendon Leasing Corp., 100 NY2d 62, 70-71; CPLR 3215[f]), we cannot conclude that the plaintiff established the existence of a meritorious cause of action to recover damages for legal malpractice.

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Delaware and Personal Jurisdiction over Attorneys

We've reported on the widespread influence of Deleware corporate law.  Many attorneys seemingly practice Delaware law without setting a foot there, without holding themselves out as Delaware attorneys.  This happens when they advise corporate clients on how Delaware would act.

Here, in a Hinshaw report, is the collalary:  Delaware exercising personal jurisdiction over an ever widening group of lawyers.  "The Delaware Court of Chancery held that it had personal jurisdiction over an out of state law firm alleged to have been involved in a client’s tortious schemes because, inter alia, the law firm filed a corporate certificate amendment in Delaware. "  Read the entire report

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Hospital, Its Attorney, Its Insurer and Conflict of Interest in Legal Malpractice

Its Idaho, and its Winter.  However, this is not a weather blog.  Here is a case illustrating the age old conflict of interest between the insured and its insurer.  Here, the insured says that defendant attorney's mission was to protect the insurance company, not the insured.

The Times-News reports: "St. Luke's Magic Valley Regional Medical Center has sued a Washington attorney who once represented the hospital in an ongoing dispute, saying the attorney did not adequately defend against claims of Medicare fraud and other alleged improprieties.

The complaint, filed Jan. 17 in U.S. District Court in Boise, claims that Tom Luciani intentionally breached his fiduciary duty and committed professional malpractice while representing the hospital and Farmers Insurance between July 2003 and early 2006. Luciani was brought on by the insurance company to represent the hospital during litigation that started in 2001 with a tort claim against the hospital by two former employees.
According to the hospital's most recent court filing, Luciani had a longstanding relationship with Farmers, which brought him in to replace another lawyer when the case moved to federal court. Following the desires of the insurance company, the complaint states, Luciani's strategy focused on protecting Farmers from any damages while leaving the hospital open to a possible $22 million judgment.

After the hospital discovered Luciani had no plan to produce an expert witness to counter testimony from a plaintiff's witness it hired its own counsel in 2006 - Chicago-based McDermott, Will and Emery LLP, one of the largest law firms in the country. "


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Use of Attorney's Statements in a Subsequent Legal Malpractice

Here is an Idaho Decision from the Supreme Court of Idaho, which discusses how the statements of an attorney, representing his client in a court proceeding. may be used against him later, as "admissions,"

"The issue is, whether an attorney's statements in the course of representation fo a client may be used against that attorney in a subsequent legal malpractice case."  Here, the Supreme Court says they may not be used.  Read this thoughful opinion.


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Even the Biggest Players get Sued in Legal Malpractice

Here is a New York Law Journal report of a legal malpractice case involving the White House, sitting judges, and other big players.

"Blackwater Security filed a $30 million malpractice suit against Washington, D.C., law firm Wiley Rein on Wednesday, alleging the firm made costly missteps in a wrongful death case brought on behalf of four former Blackwater employees who were killed in Iraq in 2004. The complaint, filed in D.C. Superior Court, claims Wiley Rein lawyers filed sloppy pleadings that ultimately barred Blackwater from shifting the case from a state court in North Carolina to federal district court, where the security firm could have mounted a stronger defense. After losing its bid to have the case transferred in October 2005, Blackwater discarded its Wiley Rein team, which included: Fred Fielding, now White House counsel; Barbara Van Gelder, now an attorney with Morgan, Lewis & Bockius; Scott McCaleb, who is a partner with Wiley Rein; and Margaret Ryan, now a judge for the U.S. Court of Appeals for the Armed Forces.



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Litigating against States

Many legal malpractice cases arise from failures to file a notice of claim against a municipality or against the state.  The case law is rife with General Municipal Law mistakes, as well as Court of Claims Act errors.  This case, which involves not New York but Louisiana, shocks the conscience.

Boudreaux v. State of Louisaina Department of Transportation, decided yesterday in the Appellate Division 1st Department reminds us that no matter how difficult it is to litigate against the City or State, Louisiana is a whole 'nuther place. 

"The Court of Appeals of Louisiana, Second Circuit, recently opined that "[a] judgment creditor of a political subdivision of the state has no way to collect its judgment except by appropriation ... Appropriation of funds is discretionary and not ministerial, and mandamus will not lie to compel payment of a judgment by a political subdivision" (The Newman Marchive Partnership, Inc. v City of Shreveport, 962 So2d 1075, 1077 1078 [La 2007], see also Cooper v Orleans Parish School Bd., 742 So2d 55, 64 [La 1999], writ denied 751 So2d 858 [La 1999]).

Plaintiffs herein have registered their judgment in 18 Louisiana parishes but, to date, the Louisiana Legislature has declined to appropriate the funds necessary to pay that judgment. As a result, plaintiffs now seek, in our view, to do an end run around their own legislature, and the laws of their home state, by attempting to enforce the judgment in the New York courts.

So, win your case, and the State of Louisiana need not pay it, ever. 


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More on Electronic Discovery and Legal Malpractice

Qualcom v. Boradcom Corp. is an important case.  Duane Morris reports that it will set the standard for all electronic discovery in litigation.  Once the standard is set, attorneys will be expected to heed and obey.

"The district court was particularly concerned with upholding the good faith standard necessitated by the discovery system and emphasized that for the system to work in a time when documents are stored electronically, "attorneys and clients must work together to ensure that both understand how and where electronic documents, records and emails are maintained and to determine how best to locate, review, and produce responsive documents."

Emphasizing that it is the responsibility of attorneys (both in-house counsel and retained counsel) to make certain that their clients carry out an effective and comprehensive document search, the court noted that "[p]roducing 1.2 million pages of marginally relevant documents while hiding 46,000 critically important ones does not constitute good faith and does not satisfy either the client's or attorney's discovery obligations." The court suggested that in-house counsel have a duty to confirm the veracity of any signed papers produced during discovery.

The district court's solution was to order Qualcomm to implement a "comprehensive Case Review and Enforcement of Discovery Obligations ('CREDO') program" which, at a minimum, includes:

(1) identifying the factors that contributed to the discovery violation . . . , (2) creating and evaluating proposals, procedures, and processes that will correct the deficiencies identified in subsection (1), (3) developing and finalizing a comprehensive protocol that will prevent future discovery violations . . . , (4) applying the protocol that was developed in subsection (3) to other factual situations, such as when the client does not have corporate counsel, when the client has a single in-house lawyer, when the client has a large legal staff, and when there are two law firms representing one client, (5) identifying and evaluating data tracking systems, software, or procedures that corporations could implement to better enable inside and outside counsel to identify potential sources of discoverable documents . . . , and (6) any other information or suggestions that will help prevent discovery violations.

The court ordered that the attorneys submit a proposed protocol for the court to evaluate and revise, if necessary. While the district court's immediate goal was to remedy this specific instance of misconduct, the court hoped that its opinion would be a "road map" for electronic discovery and would "assist counsel and corporate clients in complying with their ethical and discovery obligations and conducting the requisite 'reasonable inquiry.'"

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Electronic Discovery and Legal Malpractice

Electronic Discovery is with us, has been regulated, and there are now standards for its use in litigation.  Attorneys for clients now have to advise on how to store, produce, resist demands, and comply with the appropriate rules.

Whenever there is general agreement upon a standard of practice, the question of deviation from that standard arises.  This is the central tenant of legal malpractice:  if there is a standard, attorneys must adhear. 

Duane Morris reports on the Quallcom case: "The U.S. District Court for the Southern District of California's latest opinion in Qualcomm Inc. v. Broadcom Corp., Case No. 05cv1958 (BLM) (S.D. Cal.), issued on January 7, 2008, serves as a warning to all corporate litigants regarding electronically stored documents and emails. This warning is especially applicable for in-house counsel, of which several were engulfed in this quagmire. The court ordered Qualcomm to pay all of Broadcom's litigation costs — around $8.5 million — for "intentionally with[holding] tens of thousands of decisive documents from its opponent in an effort to win this case and gain a strategic business advantage over Broadcom." In addition, the attorneys most heavily involved were referred to the California State Bar for violations of their ethical duties. "

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Fee Dispute Arbitration and Legal Malpractice

What does a client do when faced with an attorney fee demand?  As is true with most things in life, a reflexive response is precisesly the wrong move.  Many clients [and unfortunately many attorneys] advise or choose to arbitrate the fee dispute.  Bravely, they go to the arbitration and argue piecemeal against the fee.

Let's look at an example.  In a matrimonial action, attorney for wife bills $ 150,000.  Husband is required to pay $ 100,000 and wife is billed for $ 50,000.  Let's assume that she is really really  unhappy with the outcome, and believes that there has been malpractice.  What should she do?

The first thought is fee arbitration.  Many think that the fee can be trimmed, or trimmed significantly, and go in to the arbitration arguing that there has been malpractice.  Why is this bad?

A recent case, Pickard v Tarnow ,2007 NY Slip Op 52377(U) [18 Misc 3d 1102(A)] ,Decided on December 3, 2007 ,Supreme Court, New York County ,Madden,  illustrates the problem.

In a nutshell, if the arbitrators allow any fees,  even a dollar, they have implicitly determined that there is no legal malpractice, and there can be no future legal malpractice case brought.

"Although the court has jurisdiction over the defendants, the action against them must be dismissed as barred under the doctrine of collateral estoppel based on the determination in the arbitration that Tarnow was entitled to recover fees for his legal services despite Pickard's assertion in that proceeding of defects in Tarnow's representation of her.

Collateral estoppel or "issue preclusion" prevents a party from relitigating an identical issue which has previously been decided against it in a prior action in which it had a fair opportunity to fully litigate the issue. See Allied Chemical v Niagara Mohawk Power Corp., 72 NY2d 271 (1988), cert denied, 488 US 1005 (1989). The party seeking to invoke the doctrine of collateral estoppel must show that the issue was necessarily decided in the earlier action, while [*3]the party who opposes the application of collateral estoppel must demonstrate that it did not have a full and fair opportunity to contest the prior determination. Buechel v Bain, 97 NY2d 295, 303-04 (2001).

Here, defendants have met their burden of demonstrating that the issue of malpractice was necessarily decided during the arbitration of the fee dispute in which Pickard contested the fee based on substantially the same alleged acts of malpractice that provide the basis for this action. See Weinstein v. Cohen, 2007 WL 3407107,AD2d(2d Dept 2007)(holding that plaintiff's action alleging that defendants charged her excessive fees and committed legal malpractice in connection with their representation of her in a matrimonial action was precluded by prior determination that defendants were entitled to a substantial portion of the total fees they sought in a fee arbitration requested by plaintiff pursuant to 22 NYCRR Part 136); Altamore v Friedman, 193 AD2d 240, 244 (2d Dept 1993), lv dismissed, 83 NY2d 906 (1994) (holding that client was barred from bringing a legal malpractice action against his attorney after an arbitration award was issued in attorney's favor in connection with a fee dispute since both the fee arbitration and the legal malpractice action shared "at the core, claims of attorney malpractice"); Kinberg v. Garr, 28 AD3d 245, 246(1st Dept 2006)("[p]laintiff's adverse determination in defendants' prior action to recover fees for the rendering of professional services precludes a finding of malpractice with regard to the same services); Djeddah v. Starr, 306 AD2d 59 (1st Dept), lv denied, 100 NY2d 516 (2003)(client's arguments based on claims of malpractice were barred by prior unappealed order recognizing attorney's charging lien and referring the matter for an assessment).

Moreover, although the arbitrators did not directly state whether their determination included the malpractice issues, all of the allegations set forth by Pickard in her Fee Dispute Application and in her supporting documentation focus on Tarnow's alleged misconduct in his representation of her in her divorce case. In addition, it can inferred from the arbitrators' statement that their decision was "based on a voluminous record," that they reviewed and considered all of the evidence before them.

Furthermore, Pickard does not argue that she did not have a full and fair opportunity to litigate the issue of Tarnow's alleged malpractice in the arbitration. In fact, the exhibits submitted by defendants in support of this motion, indicate that Pickard provided the arbitrators with detailed submissions to support her assertion that Tarnow had committed malpractice and therefore should not be awarded a fee.

Pickard maintains, however, that the arbitrators did not have authority to consider the issues of legal malpractice, such that there was no adjudication of those issues in the fee arbitration. Specifically, Pickard contends that the arbitration was conducted pursuant to 22 NYCRR 137 (Part 137), which "establishes the New York State Fee Dispute Resolution Program, which provides for the informal and expeditious resolution of fee disputes between attorneys and clients through arbitration and mediation," and which excludes "claims involving substantial legal questions, including professional malpractice or misconduct." (22 NYCRR 137.1(b)(3)).

This argument is unavailing. Since Part 137 is applicable to cases "where representation has commenced on or after January 1, 2002" (22 NYCRR 137.1(a)), it does not apply to the parties' fee arbitration, as it is undisputed that defendants commenced their representation of [*4]Pickard prior to that effective date. Rather, the provisions of 22 NYCRR 136 (Part 136) continue to apply to fee disputes in all domestic relations matters subject to that Part in which representation began prior to January 1, 2002.

Unlike the bar to adjudicating legal malpractice claims contained in Part 137, Part 136 contains no such limitation. Pursuant to Part 136.4 (b), "[t]he Administrative Judge may decline to accept or continue to arbitrate a dispute in which substantial legal questions are raised in addition to the basic fee dispute." Here, as the arbitration was held despite the issues of malpractice raised by Pickard, the arbitrators were entitled to consider these issues.

Accordingly, as defendants have met their burden of demonstrating that the identical issue of malpractice was necessarily decided in connection with the arbitration, and as Pickard has not shown that she did not have a full and fair opportunity to be heard on the issue, the doctrine of collateral estoppel bars this action for legal malpractice. "

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Pro-Se on Both Sides in a Federal Court Legal Malpractice Case

It is rare to see a pro-se defendant in the rarified air of Federal District Court, even more rare for both sides to be pro-se.  Here,  in DANIEL KIRK and LINDA KIRK, v.  JOSEPH M. HEPPT, ESQ.,
05 Civ. 9977 (RWS) UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK January 16, 2008, Filed , the tide seems to be turning in favor of the defendant attorney. 

Plaintiff unsuccessfully sued for employment discrimination, and when the case failed, turned, pro-se to sue his attorney.  The attorney counterclaimed for defamation and his fees.  Federal District Court Judge Sweet found everyone's position to be deficient in some manner:

"The Plaintiffs' first cause of action alleges a violation of 18 U.S.C. § 1341, the federal mail fraud statute, and is based upon the mailing of allegedly fraudulent invoices from Heppt's office in Manhattan to the Kirks' residence in New Jersey (Compl. P 23). However, there is no private right of action for violations of the federal mail fraud statute. See Pharr v. Evergreen Garden, Inc., 123 Fed. Appx. 420, 422 (2d Cir. 2005) ("The law in this circuit is clear that [18 U.S.C. § 1341] does not support any private right of action."). The cause of action for mail fraud [*6] under 18 U.S.C. § 1341 is dismissed.

In addition, the Complaint can be read as asserting a claim for common law fraud. To maintain a claim for common law fraud, a plaintiff must be able to show a causative link between the alleged fraud and his claimed damages. See, e.g., Friedman v. Anderson, 803 N.Y.S.2d 514, 517 (N.Y. App. Div. 2005) (granting a motion to dismiss a fraud claim for failure to demonstrate that defendants' actions were the proximate cause of the claimed losses). With regard to fraud arising from the mailed invoices, the March 20, 2006, Memorandum Opinion denying the Plaintiffs leave to file an amended complaint stated that the Plaintiffs "will be unable to demonstrate that Defendant's mailing of fraudulent invoices was the proximate cause of their alleged injuries." Kirk v. Heppt, 423 F. Supp. 2d at 151.

The Plaintiffs' second cause of action alleges a scheme to defraud, in violation of New York Penal Law § 190.60. The New York State Legislature modeled the "scheme to defraud" crime on the federal mail fraud statute. People v. First Meridian Planning Corp., 86 N.Y.2d 608, 616 (1995); William C. Donnino, Practice Commentary, N.Y. Penal Law § 190.60 (McKinney 1998) ("Given [*7] parallel language in the two statutes, New York courts have found federal cases construing the mail fraud statute relevant to the construction of New York's 'scheme to defraud.'"). Because neither the New York State legislature nor any New York court has interpreted § 190.60 as providing a private cause of action, the claim based on the N.Y. Penal Law § 190.60 is dismissed.

The NY General Business Law § 349 Cause of Action is Dismissed

New York General Business Law § 349 applies solely to matters affecting the consumer public at large. Vitolo v. Mentor H/S. Inc., 213 Fed. Appx. 16, 17 (2d Cir. 2007). Private contract disputes, unique to the parties, are not covered by the statute. Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20, 24-25 (1995). See also Amadasu v. Ngati, et al., No. 05 Civ. 2585 (JFB), 2006 U.S. Dist. Lexis 19654, at *35-36 (E.D.N.Y. Mar. 27, 2006) (dismissing a Section 349 claim arising out of an attorney-client relationship for failure to state a consumer protection claim) (citing, inter alia, Exxonmobil Inter-America, Inc. v. Advanced Info. Eng'g Servs., Inc., 328 F. Supp. 2d 443, 447 (S.D.N.Y. 2004)).

The Complaint here is limited [*8] to a dispute between the Plaintiffs and the Defendant arising out of the attorney-client relationship, which is essentially contractual in nature. The broader impact on consumers at large is not adequately alleged. For the reasons stated above, the Plaintiffs' claim based on New York (General Business Law § 349 is dismissed as a matter of law.

The Claim for Breach of Fiduciary Duty is Dismissed in Part

Although the Kirks have not explicitly asserted a cause of action for legal malpractice, under New York law, claims for legal malpractice and claims for breach of fiduciary duty in the context of attorney liability are coextensive. Weil, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 780 N.Y.S.2d 593, 596 (N.Y. App. Div. 2004); see also Nordwind v. Rowland No. 04 Civ. 9725 (AJP), 2007 U.S. Dist. LEXIS 75764, at *20 (S.D.N.Y. Oct. 10, 2007) (citations omitted); Guiles v. Simser, 826 N.Y.S.2d 484, 485 (N.Y. App. Div. 2006) (treating Plaintiff's cause of action, although labeled as a breach of fiduciary duty, as a claim of legal malpractice). To the extent that the Kirks' claim for breach of fiduciary duty is based upon Heppt's handling of Daniel's case against his former [*9] employer before the Honorable Sidney H. Stein, see Kirk v. Schindler Elevator Corp., No. 03 Civ. 8688 (SHS), 2004 WL 1933584 (S.D.N.Y. Aug. 31, 2004), their claim will be treated as a claim for legal malpractice.

A cause of action for legal malpractice poses a question of law which can be determined on a motion to dismiss. Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006) (citing Rosner v. Paley, 65 N.Y.2d 736, 738 (1985)) (quotation marks omitted). In order to state a claim for legal malpractice under New York law, a plaintiff must adequately allege 1) an attorney-client relationship, and 2) attorney negligence, 3) which is the proximate cause of, 4) actual damages. Nordwind, 2007 U.S. Dist. LEXIS 75764, at *22; see also Pellegrino v. File, 738 N.Y.S.2d 320, 323 (N.Y. App. Div. 2002), lv denied, 98 N.Y.2d 606. Insofar as the Kirks are seeking damages for the value of the claim lost, they must establish the elements of proximate cause and actual damages by "demonstrat[ing] that 'but for' the attorney's conduct the client would have prevailed in the underlying matter or would not have sustained any ascertainable damages." Trautenberg v. Paul, Weiss, Rifkind, [*10] Wharton & Garrison, LLP, No. 06 Civ. 14211 (GBD), 2007 U.S. Dist. LEXIS 56222, at *9 (S.D.N.Y. Aug. 2, 2007) (citing Fashion Boutique of Short Hills, 780 N.Y.S.2d at 596). "Notwithstanding counsel's purported negligence, the client must demonstrate his or her own likelihood of success; absent such a showing, counsel's conduct is not the proximate cause of the injury. Nor may speculative damages or conclusory claims of damage be a basis for legal malpractice." Russo v. Feder, Kaszovitz, Isaacson, Weber, Skala & Bass, LLP, 301 A.D.2d 63, 67 (N.Y. App. Div. 2002) (citing Pellegrino, 738 N.Y.S.2d 320,). See also Morgan, Lewis & Bockius, LLP v., Inc., 2007 NY Slip Op 50149U, at 6 (N.Y. Misc. 2007).

In order to establish negligence in a legal malpractice case, a plaintiff must allege that the attorney's conduct "'fell below the ordinary and reasonable skill and knowledge commonly possessed by a member of the profession.'" Achtman, 464 F.3d at 337 (quoting Grago v. Robertson, 370 N.Y.S.2d 255 (N.Y. App. Div. 1975)). While "an attorney may be held liable for 'ignorance of the rules of practice, failure to comply with conditions precedent to suit, or for his neglect to prosecute [*11] or defend an action," Achtman, 464 F.3d at 337 (quoting Bernstein v. Oppenheim & Co., 554 N.Y.S.2d 487 (N.Y. App. Div. 1990)), "[a] complaint that essentially alleges either 'an error in judgment' or a 'selection of one among several reasonable courses of action' fails to state a claim for malpractice," id. (quoting Rosner, 65 N.Y.2d at 738).

Construing the complaint liberally in Plaintiffs' favor, the Kirks' allegations regarding Heppt's failure to thoroughly investigate Daniel's ERISA plan and exhaust all administrative remedies prior to filing suit may constitute negligence However, the Kirks have not sufficiently alleged proximate cause to withstand a motion to dismiss. Therefore, their claim for fiduciary duty with regard to these allegations is dismissed, with leave granted to replead. "

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Is a Legal Malpractice Attorney Required to Mitigate?

Here is the hypothetical:  Plaintiff hires attorney A to prosecute an action against the State of New York, and does not timely file a notice of claim.  There is still time within the statute of limitations to file a motion seeking leave to file a late notice of claim. 

Plaintiff hires attorney B to sue for legal malpractice. Is Attorney B required to try to mitigate by seeking leave?  If Attorney B does not, is he subject to third-party litigation?

The case of Eugene Cacho, v.The Law Offices of Louis Venezia and Louis Venezia,
102554/2006 SUPREME COURT OF NEW YORK, RICHMOND COUNTY ,2008 NY Slip Op 50111U;  says no.  Justice McMahon writes:

"With respect to the motion at hand, generally, where a law firm is retained for the limited and express purpose of representing a client in a legal malpractice action, they do not have a duty to prosecute the underlying claim, if one still lies (see Northrop v. Thorsen, AD3d , 2007 N.Y. App. Div. LEXIS 12903 [2d Dept., Dec. 18, 2007][finding that an attorney retained "in a separate matter, before a separate tribunal, and for a different purpose" does not require him to mitigate damages in the underlying claims); Johnson v. Berger, 193 AD2d 784, 786, 598 N.Y.S.2d 270 [2d Dept., 1993][holding that a law firm's failure to preserve an estate's assets, when retained for the limited purpose of prosecuting a legal malpractice action "did not contribute to or aggravate the plaintiffs' damages arising from the former attorneys' alleged legal malpractice"]).

Here, third-party defendant's have established entitlement to judgment in accordance with CPLR § 3211(a)(1) and (a)(7). The retainer [**4] agreement is clear and specific, detailing that the representation by the third-party defendants is for "damages arising from personal injuries sustained by Eugene Cacho as a result of legal malpractice." Further, the cases cited by the defendant/third-party plaintiff's are distinguishable from the instant matter in that here, the third-party defendant Minchew was not hired as successor counsel to prosecute the personal injury claim, but rather on a different matter, in front of a different Judge and for a different purpose (Northrop v. Thorsen, AD3d , 2007 N.Y. App. Div. LEXIS 12903 [2d Dept., Dec. 18, 2007]). As a result, defendant Minchew is under no obligation to file a late notice of claim and therefore, dismissal of the third-party complaint is warranted (see CPLR § 3211 [a][1], [a][7]; Northrop v. Thorsen, AD3d , 2007 N.Y. App. Div. LEXIS 12903 [2d Dept., Dec 18, 2007]; Johnson v. Berger, 193 AD2d at 786). "


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Lawyers Not Playing Nicely and Legal Malpractice

Wrangles between lawyers is certainly no headline.  Lawyers allowing venom to overpower reason similarly is no news.  The case of Minchew, Santner & Brenner, LLP, and Jamie M. Minchew, v. John H. Somoza, Eleftherios Kravaris, Melito & Anderson, P.C., Westport Insurance Corporation and Louis Venezia, SUPREME COURT OF NEW YORK, RICHMOND COUNTY ,2008 NY Slip Op 50112U; January 17, 2008, is a prime example of failure to mitigate damages.

This case is an offshoot of another legal malpractice case.  Plaintiff hired Venezia to prosecute an action in the Court of Claims.  It is alleged that Venezia did not file the notice of claim timely.  His insurance defense attorneys asked plaintiff to file a motion seeking leave to file a late notice of claim, which was not done. 

When plaintiff would not try to mitigate his damages by moving for leave to file a late notice of claim, Venezia third-partied plaintiff's attorneys on the theory that they could have mitigated, but did not.  The Minchew firm [plaintiff's attorneys] then brought this retaliatory suit.  The court wrote:

"This action arises from an underlying legal malpractice 1 action currently pending before this Court, where Mr. Eugene Cacho's initial attorney, Louis Venezia, failed to timely file a notice of claim with the State of New York. As a result, Mr. Cacho severed his representation and hired the plaintiff Minchew Santner & Brenner LLP (hereinafter "Minchew"), and Jamie M. Minchew, personally, to represent him in a legal malpractice action against The Law Office of Louis Venezia (hereinafter Venezia). Venezia thereafter hired the defendants John H. Somoza, Eleftherios Kravaris, Melito & Anderson, P.C., (hereinafter collectively known as "Somoza"), to represent him in that matter. In the course of his representation, defendant Somoza requested that plaintiff [**2] Minchew apply to file a late notice of claim considering that the statute of limitations has not yet expired in the personal injury action, in effect, severely mitigating the damages and/or resolving the case. After this Court repeatedly recommended that the parties in this action cooperate and apply to file a late notice of claim, the defendants impleaded plaintiffs as a third party in the Cacho action which thereafter caused Minchew to bring this retaliatory action alleging the aforementioned causes of action. " 

When no one would play nice, the court wrote:  "As a result, all causes of action alleged by the plaintiff in their complaint are dismissed. All other requested relief is denied or academic. Finally, this Court will again strongly urge the attorneys involved in these matters to cooperate and set aside these vindictive and unnecessary actions in an effort to resolve [**9] this case. "

Question:  who is hurt when attorneys play like this?

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Alcohol and Legal Malpractice?

The West Virginia Record reports this case in which plaintiff was terminated by his employer.  Plaintiff's claim is that he was fired for doing jury service.  He retained defendant attorney, and the case was litigated in Federal District Court, where it was dismissed on summary judgment. 

Plaintiff claims that the attorney did not depose supporting witnesses, did not follow up on deposition questions, and did not seek discovery.  Worst of all he claims that the attorney came to meeting intoxicated.

"Fleischmann says Deel accompanied him to several depositions throughout 2005 and 2006, but that he "failed to follow up on any deposition questions, and he failed (to) make contact or get depositions from any of the seven witnesses provided to him by me."

He says he also gave Deel physical and date documentation supporting his case, but Deel "appeared at both meetings apparently intoxicated, and failed to retain the information I tried to provide."

Fleischmann says he e-mailed the information to Deel, but he failed to act on it. And Deel failed to respond to numerous e-mail and phone requests for an update on the case, the complaint states.

On Dec. 1, 2005, PRG-Schultz filed a motion for summary judgment. Deel failed to respond, according to the complaint, and the case was dismissed Jan. 10, 2006.

Fleischmann says he learned on Feb. 8, 2006, that he and Deel had 24 hours to filed for reinstatement of the case. Fleischmann said he contacted Deel, who said he "was busy" and wouldn't do anything about it."

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Attorney Client Privilege and Legal Malpractice

Here is our article from the New York Law Journal on Attorney Client Privilege and Legal Malpractice.



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Lies, Crimes or Legal Malpractice

CEO Gregory Reyes was sentenced this week.  Judge Charles Breyer told him that a false affidavit netted him 21 months rather than 15 months.  Here's the problem for Reyes:  his attorney drafted the document, and admitted his own "poor drafting."

So, is this the rare occurrence when an attorney creates the situation in which his client spends more tim in jail? "Inexact drafting by lawyers for former Brocade CEO Gregory Reyes may have gotten an extra six months tacked onto his stock option backdating sentence.

U.S. District Judge Charles Breyer sentenced the former Silicon Valley icon to 21 months in prison Wednesday. Breyer also imposed a $15 million fine, but did not order Reyes to pay any restitution. Breyer stayed the entire sentence pending appeal.

Breyer indicated, however, he would have imposed a shorter, 15-month sentence had Reyes not submitted a sworn affidavit to the court saying he did not backdate.

Reyes filed that declaration in support of former HR Chief Stephanie Jensen's motion to sever her trial from his. At Reyes' trial, though, his lawyers acknowledged that he did backdate stock options, but said it was done in full view of the company's finance department.

On Wednesday, the judge called Reyes' statements in the declaration "seriously misleading" and an obstruction of justice because they suggested Reyes would provide exculpatory evidence for Jensen when, in fact, he could not.

"The court must have truthful information in order for it to be just," Breyer said evenly.

Reyes' attorney, Richard Marmaro, attempted to take the flak for the declaration, telling Breyer he had been the "proponent" of it, along with Jensen's attorney, Keker & Van Nest partner Jan Little.

The language in the declaration was a product of "poor drafting by the lawyers" and was not meant to apply to all of the disputed Brocade stock option grants, said Marmaro, a partner at Skadden, Arps, Slate, Meagher & Flom. "

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Pennsylvania Formula for Calculating Statute of Limitations in Legal Malpractice

When does the statute of limitations start to run on a legal malpractice case in Pennsylvania.  Hinshwaw reports on this issue.

"The Pennsylvania Superior Court held that the statute of limitations for a legal malpractice claim begins to run when the malpractice is committed and is only tolled until the plaintiff should reasonably have found out about some degree of injury. The statute is not tolled until all of a plaintiff’s damages are clear or until appellate proceedings in the underlying case within the legal malpractice case are over.

Under the court’s application of the occurrence rule, the trigger for the accrual of a legal malpractice action is not the realization of actual or ultimate loss, but the occurrence of a breach of duty plus some degree of apparent harm. Thus, the court concluded that the statute of limitations for a breach of a contract claim starts when the duty is breached and is only tolled until the plaintiff should reasonably have found out about the injury. Otherwise put, and applying this reasoning to the instant matter, the court found that Wachovia or its predecessor in interest, Meridian, should have reasonably been aware of the alleged breach on or about October 20, 1994, the date Pisani initiated proceedings for liquidated damages (which, of course, had to be defended at considerable cost). Consequently, the present case was time-barred even though no final judgment determining the ultimate and actual loss had been determined before the statute began to run.

In coming to this conclusion, the court noted that its ruling may require an injured client to pursue two legal actions with competing interests at the same time—the appeal of the underlying case and the malpractice claim. The court concluded, however, that the overriding public policy concern is that stale claims not be filed. "

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Judicial Estoppel in Legal Malpractice

Here is a case from New Jersey which gives a full explanation of "judicial estoppel" and its application to legal malpractice.  Generally, the issue comes up when a client agrees to a settlement, which it later finds to be inadequate.  The legal malpractice case which follows is defended, in part, by the assertion that the client settled the case, said they were satisfied, and now change their mind.

"Judicial estoppel is an equitable doctrine that protects the integrity of the judicial process. Cummings v. Bahr, 295 N.J. Super. 374, 387 (App. Div. 1996). It "preclud[es] a party from asserting a position in a case that contradicts or is inconsistent with a position previously asserted by the party in the case or a related legal proceeding." Tamburelli Prop. Ass'n v. Borough of Cresskill, 308 N.J. Super. 326, 335 (App. Div. 1998) (citation omitted).

Judicial estoppel does not prevent litigants from pleading alternative positions; rather, it "is designed to prevent litigants from playing fast and loose with the courts." Newell v. Hudson, 376 N.J. Super. 29, 38 (App. Div. 2005) (citation omitted). "[A] party must successfully assert a position in order to be estopped from asserting a contrary position in future proceedings." Cummings, supra, 295 N.J. Super. at 386. Prior success does not necessarily mean that the party benefited from the position taken, but only that a court allowed them to maintain that position and relied on it to make a judicial determination. Id. at 387.

New Jersey "has a longstanding policy that encourages settlements." Ziegelheim v. Apollo, 128 N.J. 250, 263 (1992). However, our policy favoring settlements and the doctrine of judicial estoppel only bar a litigant from subsequently disputing the fairness and reasonableness of a settlement where the litigant was fully aware of all of the facts and was reasonably advised as to the legal remedies available based on those facts. Newell, supra, 376 N.J. Super. at 33; Puder v. Buechel, 183 N.J. 428, 437-39 (2005).

The motion judge relied on Newell to apply the doctrine of judicial estoppel in this case. The issue in Newell, was "whether a litigant who either lied, or later claimed she lied, about her understanding and voluntary acceptance of the terms of her property settlement agreement, in order to induce the court to accept and incorporate it into a judgment of divorce, is judicially estopped from asserting a [counter]claim for malpractice against her matrimonial attorney based on the settlement." Newell, supra, 376 N.J. Super. at 30. At the time of the divorce hearing, Hudson represented in court that she understood and voluntarily consented to the terms of the property settlement agreement. Id. at 32. Based upon this testimony, the judge approved the settlement and incorporated the agreement into the judgment of divorce. Ibid.

Thereafter, the wife sought a modification of the alimony amount, claiming that her former husband's salary was misstated in the agreement as a result of her attorney's negligence and, as a consequence, she received an insufficient alimony award. Id. at 32-33. That motion was denied by the Family Part judge. Id. at 33.

Hudson failed to pay the divorce attorney's fee and a collection suit was instituted against Hudson. Ibid. Hudson counterclaimed alleging malpractice. Id. at 33-34. In responding to questions posed at her deposition, Hudson essentially testified that her sworn testimony to the judge hearing the divorce proceeding was false. Id. at 34. The attorneys then filed a motion for summary judgment. Ibid. In dismissing the malpractice action on the basis of judicial estoppel, the motion judge found that the wife was not misled by her attorney because she testified under oath that she knew what she was doing. Id. at 36. The judge also stressed that the wife, who was an accountant, although not tutored in the law, was nevertheless a sophisticated individual who had received sufficient factual information to inform her decision regarding the settlement. Id. at 35-36.

In reviewing the grant of summary judgment, we noted that the Ziegelheim and Puder

courts recognized legal malpractice as a viable cause of action where a matrimonial attorney's negligent pretrial preparation and advice led to the recommendation of an improper settlement. By declining to apply a per se bar, these cases preserve a malpractice claim of a vulnerable litigant who unknowingly enters into an inadequate settlement, believing it is fair, as a result of the arguable negligence of her matrimonial attorney. 

We agreed that a legal malpractice action was reserved for "vulnerable litigant[s] who unknowingly enter[] into an inadequate settlement, believing it is fair, as a result of the arguable negligence of [their] . . . attorney." Ibid. Further, we adopted the position of the Idaho Supreme Court, stating that judicial estoppel

should only be applied when the party maintaining the inconsistent position did have, or was chargeable with, full knowledge of the attendant facts prior to adopting the initial position. . . . [T]he concept of judicial estoppel takes into account not only what a party states under oath in open court, but also what that party knew, or should have known, at the time the original position was adopted. [Ibid. (quoting McKay v. Owens, 937 P.2d 1222 (1997)).]

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Legal Malpractice Verdict after Medical Malpractice in a Death Case

Failure to diagnose breast's a horrible thing.  When we think of a family member who could have been saved, who dies because of medical negligence, where a simple mammogram or simply reading it correctly could have made a difference...

Here, after a death, the medical malpractice case was bungled, and a legal malpractice case finally led to a verdict against the attorney who didn't sue the doctor.

"A Hinds County jury returned a $375,000 judgment Tuesday in a legal malpractice case.
Varnado and attorney Robin Blair, also of Hattiesburg, represented the sister of a Sunflower County woman who died of breast cancer in 1999.

The woman filed a lawsuit against Jackson lawyer Isaac Byrd Jr. and his firm and lawyer Howard Bowen, who initially handled the case.

Barbara Butler said in the lawsuit heard in Hinds County Circuit Court that her sister, Jacqueline Farmer, 59, died in June 1999 after not getting a mammogram in eight years despite going to her regular physician during a portion of that time.

Butler initially went to Bowen to have a lawsuit filed against the doctor, who worked at a clinic in Indianola. Bowen turned the case over to Byrd in October 1999, according to Blair.

Blair said Byrd requested and received Farmer's medical records but didn't file the lawsuit until 2001, a year after the statute of limitations to file such a lawsuit expired.

But Byrd's attorney, Felecia Perkins of Jackson, said the medical malpractice lawsuit was filed in Sunflower County and the presiding judge never ruled the statute of limitations had expired prior to the case" being filed.

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A Milestone Reached

Today, we reach 1500 articles on Legal Malpractice.

We would like to thank our readers for persevering with us through server breakdowns, slow story days, and our exploration of the legal malpractice world.

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Are Experts Always Necessary in Legal Malpractice?

Experts are generally, but not always necessary in legal malpractice cases.  The test is whether a fact-finder can rely upon its own knowledge.  Here is an interesting case, Frances Northrop, respondent, v Eric Ole Thorsen, appellant. (Index No. 5684/04) ,2007-00973 ,
2007 NY Slip Op 10124; 2007 N.Y. App. Div. LEXIS 12903 , decided 12/18/07.

"In an action to recover damages for legal malpractice, a plaintiff must demonstrate that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the attorney's breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages. To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer's negligence. Expert testimony is normally needed to establish that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, unless the ordinary experience of the fact-finder provides sufficient basis for judging the adequacy of the professional service, or the attorney's conduct falls below any standard of due care."

The case is interesting for two other points:  plaintiff won even after being precluded from using expert testimony; and plaintiff avoided a "mitigatino of damages" defense. "In support of his affirmative defense that the plaintiff failed to mitigate her damages, the defendant contends that the plaintiff herself could have avoided termination of her workers' compensation benefits by making an application for nunc pro tunc judicial approval of the settlement. HN3The defendant, however, "may not shift to the client the legal responsibility [he] was specifically hired to undertake because of [his] superior knowledge"


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Recent Cases in Legal Malpractice


1. CHICAGO TITLE INSURANCE COMPANY, Plaintiff, v BARBARA J. MAZULA, Defendant and Third-Party Plaintiff-Appellant; JAMES E. KEABLE, Third-Party Defendant-Respondent.


2008 NY Slip Op 27
January 3, 2008

This is a case in which the question becomes whether an individual or an estate hired the attorney. In order for plaintiff to prevail, the court must determine that the estate hired the attorney, and each of the mistakes took place while the attorney represented the estate, not the individual.

“ Defendant argues that the toll applies because the sale of the property was not an isolated transaction, but an estate matter during which Keable continued [**4] to represent defendant's husband's estate long after the malpractice accrued. We disagree. The first deed attempted to convey what was believed to be the estate's interest in the property whereas the second deed conveyed defendant's personal interest. Regardless of how the first deed was executed, defendant, as a surviving tenant by the entirety, solely conveyed her personal interest (see Matter of Mischler, 30 AD3d 859, 860, 819 N.Y.S.2d 118 [2006]). Hence, as to both deeds, Supreme Court correctly determined that Keable was always acting for defendant in her individual capacity, not in her capacity as the executor of her husband's estate 2. Since Keable performed no further work for [*3] defendant, either personally or in her capacity as executor of the estate after January 2000 in regard to this transaction, the commencement of this third-party action for legal malpractice was not timely.”

2. Gerald Goldman, et al., Plaintiffs-Appellants, v Akin Gump Strauss Hauer & Feld, LLP, et al., Defendants-Respondents.

2007 NY Slip Op 10492
December 27, 2007

In many legal malpractice cases, we find that the attorneys played several roles. Sometimes, they start as transactional attorneys, and morph into litigation attorneys.

Here the “documentary evidence [that] effectively precludes plaintiffs from arguing that defendants' representation in the arbitrations was continuous with their representation in the sale. Such documentary evidence consists of the affidavit submitted by plaintiffs in a prior litigation that involved an unsuccessful attempt by a limited partner to disqualify defendants from representing plaintiffs in one of the arbitrations. Therein, one of the plaintiffs stated that while defendants were retained to advise plaintiffs and, if need be, serve as their litigation counsel, in connection with litigation then being threatened by the limited partners, as to the sale itself, defendants were retained only to draw the documents necessary to consummate a deal that had already been negotiated and agreed to. Holding plaintiffs to this position (see D & L Holdings v Goldman Co., 287 AD2d 65, 71-72, 734 N.Y.S.2d 25 [2001], lv denied 97 NY2d 611, 742 N.Y.S.2d 604, 769 N.E.2d 351 [2002]), defendants' [**3] representation in the arbitrations, which involved the merits of the litigation that was being threatened by the limited partners at the time plaintiffs retained [*2] defendants, was distinct from their representation in "papering" the sale, which did not involve negotiating the terms of the sale or advising whether or not to proceed with it.”

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Contingent Fees, Appeals and Legal Malpractice

Attorneys and clients enter into contingent fee retainer agreements, which do not directly address the question of an appeal.  Is the legal fee for an appeal the responsibility of the client or the attorney in this situation?  Here is a case from Madison/St.Clair which discusses this question:

"A legal malpractice claim filed by Donel Johnson claims Belleville attorneys Jodee Favre and Laura Allen breached their fiduciary duty and appropriated fees greater than they were entitled to in a wrongful termination claim he filed in 1998.

According to Johnson's suit filed in St. Clair County Circuit Court on Dec. 21, 2007, he entered into a contingency fee agreement with Favre and Allen on April 9, 1998.

Johnson, a tank washer with Rogers Cartage Co., was fired in 1998 after he refused to dump chloronitrobenzene into the sewer, the suit claims. In 2001, a St. Clair County jury awarded Johnson $2.13 million plus costs. Defendants Rogers and Tankstar appealed, and in 2002, a settlement was reached in which Johnson would receive $800,000 in cash and an annuity at a cost and present value of $439,022.

Johnson claims he was damaged in that his annuity is owned by his former employer and it does not guarantee payment to him and his heirs.

"Plaintiff has been further damaged in that Plaintiff paid Defendants in excess of $334,000 more than they were entitled to pursuant to their fee agreement with Plaintiff," the complaint states.

Johnson also claims that his contract with Favre and Allen entitled them to one-third of any sum he recovered.

"Because this agreement did not specifically exclude the handling of an appeal, Defendants Favre and Allen were deemed to have agreed to include any and all appellate work regarding Plaintiff's claim," the complaint states. "

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Cuban Embargo, Legal Advice and Legal Malpractice

It's winter, and our thoughts turn to the Caribbean.  Here, a Philadelphia law firm, 1400 lawyers strong, gave commercial advice pertaining to the Cuban embargo, and are now defendants in a legal malpractice case.  Here is the story from Bloomberg, via the Caribbean news agency.

"NEW YORK, USA (Bloomberg): Morgan, Lewis & Bockius, the largest Philadelphia-based law firm with 1,400 attorneys, gave advice regarding sales to Cuba under the US trade embargo that led to a criminal investigation, a lawyer for an ex-client has argued.

Dan and Stefan Brodie, the founders of Purolite Corp., a manufacturer of specialty resins for water purifiers based outside Philadelphia, sued Morgan Lewis in 2004 for legal malpractice. The case began in the early nineties when an accountant questioned a sale by Purolite's Canadian subsidiary to a company in Cuba. Purolite claims Morgan Lewis attorneys repeatedly advised them that the sales were legal because there was no US involvement.

"Morgan Lewis's malpractice, sloppy work and their bad advice cost Purolite and the Brodies and it cost them severely," said Marc Kasowitz, a lawyer for the brothers, in opening arguments on Friday in state court in Philadelphia.

In 1996, the US Customs Service began an investigation into Purolite's sales to Cuba. Morgan Lewis told the inspectors that the company's foreign subsidiaries were separately owned and advised the Brodies to continue doing deals with the Cuban company, leading to a criminal indictment by the US Attorney's office in Philadelphia, Kasowitz said.

In 2002, the Brodies were convicted of making illegal trades to Cuba, a verdict that was later reversed on appeal. The Brodies and Purolite pleaded guilty to charges concerning reimbursement of travel expenses, the company said in court filings.

A lawyer for Morgan Lewis said the firm advised the company not to sell to Cuba and that Purolite continued to do so because they wanted the money. "

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Barnett v. Schwartz and Pre-Judgment Interest in Legal Malpractice

The question of pre-judgment interest in legal malpractice has not been widely understood .  Generally, it was thought that an award of pre-judgment interest was determined on the same basis as in the underlying case.  Contract damages, yes.  Pain and suffereing, no.

However, this case indicates that the real inquiry is whether there should be pre-judgment interest calculated from a hypothetical judgment which the plaintiff should have obtained, had there been no malpractice.  Such a hypothetical judgment, years prior to the legal malpractice case, may allow for interest from that date, at 9% per annum!

Barnett v. Schwartz, 2007 NY Slip Op 09712, Appellate Division, Second Department, Decided 12/11/07  stands for a somewhat novel principal. Prejudgment interest appears to be permitted in legal malpractice, whether it would have been permitted in the underlying case or not. This wide sweeping pronouncement appears to apply not only to recognized breach of contract causes of action, but to personal injury legal malpractice damages, too.

“CPLR 5001 operates to permit an award of prejudgment interest from the date of the accrual of the malpractice action in actions seeking damages for attorney malpractice”, citing Horstmann v, Grasso PC, 210 AD2d 671; Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 444 (2007)

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A Seminal Case in Legal Malpractice

This is a seminal, important case which will, we predict, be widely cited and discussed in Legal Malpractice.   Barnett v. Schwartz, 2007 NY Slip Op. 09712, 2d Dept, December 11, 2007 is important for several reasons. We’ll discuss the first here

“But for” causation is not as difficult as had previously been believed.

Does the failure to exercise” that degree of care, skill and diligence commonly possessed and exercised by members of the legal community.” have to be “the” proximate cause of damages? Must it be “a” proximate cause of damages?

The Appellate Division says that it must be nether “the” or “a” proximate cause of action, but simply requires proof that “but for” the negligence of the defendant-attorney, the plaintiff-client would have prevailed in the underlying action.”

This formulation does not require a greater, more direct degree of causation, and the Appellate Division did not find a “substantive import to the variations in the formulations discussed above, holding that a plaintiff-client in a legal malpractice action need prove only that the defendant-attorney’s negligence was a proximate cause of damages.”

“But for” causation is not synonymous with sole proximate cause, and it is not required that the degree of causation in legal malpractice be any greater than “proximate cause. i.e., greater than that which must be typically proved as against any other professional or lay defendant in a negligence action. There is no case which singles out attorneys for “special treatment on causation.”

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Attorney Fees, Dismissal and Legal Malpractice

Here is an article from Hinshaw which tells us that  "A law firm may represent itself and may pursue not only contract or quasi-contract but also tort theories in suing a former client, at least as long as the amount sought in damages does not exceed the amount of unpaid legal fees"

"Law firm Pedersen and Houpt provided a variety of legal services to Summit Real Estate Group, LLC (Summit) including successfully litigating a breach of contract claim. Soon thereafter Summit’s assets were transferred to another entity, Main Street West, and Summit was dissolved. The two members of Summit were 50 percent owners of Main Street West. Id. Pedersen and Houpt brought suit to recover attorney’s fees naming five closely related defendants including Summit and Main Street West.

Pedersen and Houpt sued on multiple causes of action including breach of contract, quantum meruit and account stated. However, given Summit’s insolvency, Pedersen and Houpt’s best chance at recovery was through more far-reaching legal theories such as piercing the corporate veil and unjust enrichment. Defendants argued that these more far reaching legal theories were “an attempt to create new liabilities beyond the scope of [Pedersen and Houpt’s] contractual relationship with its clients.” Id at 8. Defendants consequently asserted that any use of confidential information to pursue these “new liabilities” was beyond the scope of Illinois RPC 1.6(c), which provides: “[a] lawyer may use or reveal * * * (3) confidences or secrets necessary to establish or collect the lawyer’s fee.” Id.

The trial court agreed with the defendants’ argument and granted a motion to compel Pedersen and Houpt to seek outside counsel. Reviewing this decision on an abuse of discretion standard, the court of appeals reversed, noting that the plaintiff’s legal theories were within the scope of RPC 1.6(c)(3) and that requiring Pedersen and Houpt to seek outside counsel did not resolve or even address the issue of the scope of RPC 1.6(c)(3).

The appellate court’s reasoning was based on the premise that limiting the legal theories available under RPC 1.6(c)(3) would reward fraudulent behavior by clients and would not serve any reasonable client expectation or legitimate purpose. The appellate court also noted that the damages sought by Pedersen and Houpt were limited under all theories to the amount of legal fees owed. Consequently, Pedersen and Houpt was not attempting to profit improperly from its former attorney-client relationships "

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LA Sues its City Attorney in Legal Malpractice

This story from LA is about a failed City of LA law suit over an underground gas main construction project.  The action was filed late, and dismissed.  Now the city attorney is a defendant.

"A jury will decide if the former attorney for the city of Vernon committed legal malpractice and if he should pay more than $1 million in damages.

The city sued Eduardo Olivo in April 2005, alleging that he mishandled various litigation involving the city. One allegation stems from Olivo's decisions involving work done by contractor Kenko in the installation of an underground gas main.

The city alleged the work was defective and that Olivo did not act quickly enough to sue Kenko. When the city did eventually file a complaint against the firm, it was dropped because it was lodged after the statute of limitations had expired. "

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City Attorney, A Firing and Legal Malpractice

In this New Hampshjre newspaper report, a city attorney is now a defendant in legal malpractice.

"CLAREMONT - The City of Claremont has filed a lawsuit alleging malpractice and negligence on the part of then-city solicitor John J. Yazinski for his role in the dismissal of former city tax assessor Steve Snelling in September 2000. The suit was filed in Sullivan County Superior Court late last week.  It alleges Yazinski, now a Claremont District Court judge, acted in "derogation of his duty and in violation of the applicable standard of care," and that he "failed to reasonably advise the city in this regard."

"Shortly after his firing, Snelling asked for a hearing before the Claremont Personnel Advisory Board, during which Yazinski and his partner Daniel G. Smith of Hughes, Smith, and Yazinski, LLP of Claremont were present in an advisory role to the city. The city said that although Snelling informed the board that night he intended to file suit, "the law firm failed to notify the city that Snelling had given notice of his intention to sue and failed to give notice of the threat of suit to the insurance carrier providing coverage to the city at the time or to recommend to the city that such a notice be given."

As a result, "the insurance carrier to which the city had paid insurance premiums at all times material would not provide coverage to the city for the Snelling suit because no notice had been provided of Snelling's intention to sue during the applicable policy period."

Snelling filed suit against the city in 2003, claiming his termination was a violation of his First Amendment free speech rights. Snelling won his case, which was upheld by the state Supreme Court following appeal. A second trial to examine damages is set to begin in March.

Specifically, the suit alleges "legal malpractice" against Yazinski, and the same allegation against the firm. In the suit against Yazinski, the city said that "had Yazinski provided the advice required by the standard of care under these circumstances, Snelling would not have been terminated. "

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A State Court Patent Legal Malpractice Case in Colorado

While, generally, patent law depends on Federal Law, and provides federal question jurisdiction in Federal District Court for patent legal malpractice cases, here is an interesting state court appellate decision from Colorado.  Bristol v. Osman, Court of Appeals, Colorado.  It involves patent laches, and the statute of limiations in legal malpractice.  It also involves 6 amended complaints, the last four of which were submitted in contravention of the rules, and without any motion seeking leave.


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Shredding, Files, the New Year and Legal Malpractice

Small towns have communities that notice small events.  Here is an example:  a lawfirm throws out old files, and they mistakenly sit on the curb, awaiting the garbage truck.  The local news station finds out, and puts this story on their website.

"A call to the Channel 2 News Tipline asked why open boxes with files were out on the curb in front of a law firm in Orchard Park. Channel 2 News then found some of those same open boxes.

The boxes were on the curb of South Buffalo Street in front of the Berkowitz and Pace Law Firm. One of the open boxes had a visible file labeled "Medical Malpractice" with a name and phone number visible.

Attorney Leonard Berkowitz told us they were remodeling their office and that's why the boxes were thrown out that way. Berkowitz was asked if he felt there could be confidential records or information in the boxes. "These are old boxes. We thought they were going to be picked up immediately. They probably should have been shredded. We're gonna take 'em back in now based upon what you said. It was a mistake and they should have been shredded."

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A Legal Malpractice Lawsuit that Just Won't End

Law.Com reports on this Venable Legal malpractice case:

"In 2004, Venable partner Stefan Tucker's former client Alan Weinberger sued him for malpractice. The claim stemmed from a prior suit between Weinberger and another of Tucker's ex-clients, Lev Volftsun. After years of this messy legal spat, the 4th U.S. Circuit Court of Appeals affirmed that Weinberger had no case late last month. But it seems Tucker hasn't shaken his ex-client just yet: Weinberger has confirmed plans to file a motion this week for a new hearing before the entire court.

Tucker first introduced his two clients in 2000. Weinberger needed investors for his company TechNet, so Tucker helped Volftsun negotiate an agreement to loan TechNet $250,000 and to become a company board member. In 2001, Weinberger created a holding company into which he merged TechNet and another company, ASCII. Volftsun sought repayment of the loan. The company did not repay him, and Volftsun consequently sued in the U.S. District Court for the Eastern District of Virginia.

Weinberger appealed in September, only to have the lower court's decision affirmed by a three-judge panel on Dec. 20, but that decision clearly has not discouraged him. "

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NJ Criminal Defense Legal Malpractice Case II

McNight v. Public Defender is  recently decided New Jersey Legal Malpractice Case.   We started a discussion yesterday.

Today, let's look at the court's description of the three approaches to criminal defense legal malpractice cases.

1.  Need for Actual Innocence:  NY is among these jurisdictions.  One must demonstrate a reversal, or an exoneration, which starts the statute of limitations running.

2.  No Need for Actual Innocence:  Plaintiff''s s/l starts running on the date of the malpractice.

3. A two tiered approach.  The NJ solution is that a post-conviction process in criminal court must be started, and the legal malpractice must be simultaneously started, but the legal malpractice case should be stayed.

The 55 page decision is well worth reading for the many nuances set forth.


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Weil Gotshal and Texas Legal Malpractice Case

NY Lawyer [and Law.Com] report that a Texas business owner has sued Weil Gotshal & Manges over its handling of a Texas credit union acquisition.

"Dallas businessman has sued Weil, Gotshal & Manges, alleging that the firm and two of its partners took advantage of him as a client by lessening his interest in a deal while he was undergoing treatment for cancer.

In David M. Radman, et al. v. Richard M. Boyd, et al., Radman -- individually and as trustee of the DMR Trust -- and CU Commercial Services LLC allege that the firm and two of its Dallas partners, Michael A. Saslaw and Robert C. Feldman, conspired with Radman's then-business partner and others to reduce Radman's interest in a proposed acquisition of a Dallas-based credit union subsidiary.

In his Dec. 12 petition filed in the 160th District Court in Dallas, Radman also names as defendants his business partner, Richard M. Boyd; Dallas-based Texans Credit Union; TCU's president and CEO, David Addison; Texans Commercial Capital LLC; and Credit Union Liquidity Services LLC.

Radman's petition also alleges the following against Weil, Saslaw and Feldman: breach of contract, breach of fiduciary duty, fraud, negligent misrepresentation, professional malpractice, violation of the Texas Deceptive Trade Practices Act, conversion, tortious interference with existing and prospective contracts and civil conspiracy to commit harm. "

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New Jersey Sets Rules for Criminal Defense Legal Malpractice Caes

Legal malpractice cases against the criminal defense attorney are confusing.  In addition to all the other elements, in NY one must prove actual innocence or exoneration.  When the statute begins to run [date of malpractice, date of last representation, date of final judgment, date that post-conviction motion decided, reversal or exoneration] is a difficult call. 

McNight  v. Office of Public Defender.  This NJ case is remarkable for several reasons.  The first is a discussion of how an attorney, "on a busy Wednesday plea day" simply forgot to ask his client whether he was a US citizen and how a misdemeanor conviction would impact him.  Here, it led to a deportation order, and when Trinidad would not take him back, imprisonment without end.

The second reason is the legal aid attorney's willingness to admit his wrong.  Sometimes, it seems that criminal defense attorneys are much more willing than other attorneys to admit they made a mistake, if it helps the client get a new trial or get his plea back.

For us, the most important reason is the compelling discussion of the state's different positions on how to handle a criminal defense legal malpractice case.  More tomorrow.

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Complicated Privilege Question in Legal Malpractice

Here is a well-written decision by NY Supreme Court Justice Stallman on a very complicated question of attorney-client privilege, confidentiality, issues of whether there was an attorney-client relationship, and how to resolve the competing rights of discovery, business secrets and confidentiality. 

Hélie v McDermott, Will & Emery ,2007 NY Slip Op 27523 ,Decided on December 17, 2007 ,Supreme Court, New York County ,Stallman, J.

"In this legal malpractice action, plaintiff Marc Helie claims that defendant John J. Sullivan, a partner in the law firm of defendant McDermott, Will & Emery, failed to disclose an alleged conflict of interest while Sullivan was allegedly representing plaintiff and acting as outside corporate counsel to Gramercy Advisors, LLC and related entities. Plaintiff alleges that, in June 1998, Sullivan represented him in connection with the formation of Gramercy Advisors, LLC and related entities. In January 2000, non-party Jay Johnston purchased a 30.43% interest in the business, which resulted in amendments to Gramercy's original operating agreement. Plaintiff alleges that, during the drafting of those amendments, Sullivan allegedly advised plaintiff that, in the event of plaintiff's resignation, his resignation would not be considered "an event of dissociation" under the operating agreement, which would trigger a payment based on a specified formula. Plaintiff alleges that Sullivan advised plaintiff that his interest in Gramercy upon resignation would reflect current market value. Plaintiff claims that, on the basis of that advice, Helie executed the revised operating agreement. Plaintiff claims that, during the drafting process and in rendering the alleged advice, Sullivan was acting as plaintiff's attorney. "

Read the balance of the decision for Justice Stallman's discussion of the competing rights of the litigants.


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Law Firm Wins Dismissal in Legal Malpractice Case

In this NY Lawyer's blurb, we see th outcome of a new variety of legal malpractice action:  a sort of secondary liability suit in a transactional setting.

"A New York appeals court has thrown out a lawsuit against Seward & Kissel over the law firm's representation of failed hedge fund Wood River Partners.

A group of institutional investors had charged that the law firm shared blame for an alleged fraudulent scheme in which investors were misled about the fund's holdings, 60 percent of which turned out to be in one small technology company named EndWave Corp. That company's stock collapsed in July 2005, triggering the investors' claimed $200 million in losses.

But the Appellate Division, First Department, ruled yesterday in Eurycleia Partners v. Seward & Kissel, 600704/06, that the law firm's preparation of Wood River's offering memo did not constitute a representation, fraudulent or otherwise, to the investors.

The court noted that Seward & Kissel's work for the fund was focused on the fund's formation and its taxes and not its investment strategy. The appellate panel also found that the investors had no relationship with Seward & Kissel as Wood River's counsel that would impose a duty on the firm to investors.

The court dismissed claims against Wood River's auditor, American Express Business & Tax Services, on similar grounds. "

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Can a New York Attorney Commit Delaware Legal Malpractice?

The simple answer to this question is, Yes!

Delaware is the state of choice for many corporations, and it is said that there are more attorneys in Manhattan giving advice on Delaware corporate law than there are in Delaware.  Now Sheri Qualters of the NYLJ reports that the Delaware  Court of Chancery has ruled that non-Delaware attorneys are subject to suit there.

"A recent Delaware Court of Chancery ruling that non-Delaware attorneys and law firms can be sued in the state for their advice to Delaware-incorporated companies has raised concerns about courts' jurisdictional reach and about a lawyer's duty to challenge a client's business decisions.

The case is of concern to law firms, investment banks and others who advise companies on Delaware issues, said Barry Sher, the chairman of the litigation practice in the New York office of Paul, Hastings, Janofsky & Walker.

"With relatively minimal actual contact with the state of Delaware in the normal jurisdictional sense, they could nonetheless be brought into court," Mr. Sher said.

Since many U.S. companies are chartered in Delaware and subject to Delaware corporation law, Delaware Court of Chancery decisions have had a major impact on corporate law.

The recent case involves allegations that Baker Hostetler and a Columbus, Ohio-based corporate partner, Joseph Boeckman, aided and abetted the breach of fiduciary duty committed by three managers of Lima, Ohio-based bronze ball bearings maker Randall Bearings Inc. Sample v. Morgan, No. 1214-VCS (New Castle Co., Del., Ch.).

According to court papers, the managers and their lawyer allegedly orchestrated a scheme to entrench and enrich themselves by buying a large block of voting stock from the company at an unfairly low price. "

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Some Recent Legal Malpractice Cases in NY


United States Court of Appeals for the Second Circuit 2007 US App Lexis 27612

Law firm was sued by former clients, and insurance company disclaimed coverage because law firm did not give reasonable notice of potential suit. Law firm defended by arguing that it had no basis to expect a suit by its client, who had assured them that she did not intend to sue. She, however, did. Court noted that no court in New York “has addressed the question” of the objective inquiry into a client’s assurances “in deciding what an attorney in the insured’s position could reasonably have foreseen.”

2. SMARTIX INTERNATIONAL LLC v. GARRUBBO, ROMANKOW & CAPESE PC, United States District Court for the Southern District of New York, 2007 US Dist Lexis 85807

Discussion of post-end of discovery subpoenas, as well as whether non-party subpoenas are permissible in what might be called a fishing expedition. These personal records are “not relevant to the claim or defense of any party.”

3. KING v. FOX
United States District Court for the Southern District of New York, 2007 US Dist Lexis 85396

This case has “occupied this court, the magistrate judge, the Court of Appeals on two occasions and the New York Court of Appeals over the past ten years. Presently at issue is Fox’s motion to strike King’s demand for a jury trial.”

Judge Sweet discusses the equitable/law nature of the legal malpractice claims, and gives a short historical tour of the right to a jury trial.”

United States Court of Appeals for the Second Circuit 2007 US App Lexis 27935

Piper Rudnick wins motion for summary judgment, finding that client “failed to establish the required proof of damages for any of its claims.” “In particular, as to the difference between the value of the client’s property in bankruptcy and outside of bankruptcy, the client failed to show that any damage to the property was” the result of the bankruptcy proceeding.

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Lawyer is Minor Player, but Pays Big Settlement

This is abattle between a major celebrity dancer and a football player's ex-trophy wife, in which she claimed the dancer raped her.  She hires attorney who starts law suit against dancer.  End result ?  Attorney and ex-wife accused of extortion, attorney pays substantial settlement to dancer, ex-wife has an $11 million verdict against her.

"A woman who accused Michael Flatley of sexual assault has been ordered to pay him more than $11 million for making false allegations to extort money from him, according to documents obtained Monday.

Superior Court Judge Michael L. Stern found that real estate agent Tyna Marie Robertson had defamed and intentionally inflicted emotional distress upon Flatley, 49, who appeared in "Riverdance," "Lord of the Dance," "Feet of Flames" and "Celtic Tiger."

Robertson had alleged Flatley raped her in a Las Vegas hotel in 2002 and threatened to sue unless he agreed to pay a "seven figures" settlement, according to court papers.

Police declined to press criminal charges, and Flatley said the sex was consensual.

Robertson then filed a $33 million lawsuit in Illinois alleging sexual assault, but it was dismissed.

Flatley countered with a lawsuit against Robertson and her lawyer D. Dean Mauro claiming extortion, intentional infliction of emotional distress and defamation.

The California Supreme Court held in July 2006 that Mauro had committed extortion, and he settled the case by making "a substantial payment" to Flatley, according to a statement from the dancer's lawyer, Ricardo P. Cestero. "

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Discipline Down in Maryland, Legal Malpractice Up reports that in Maryland, discipline numbers are small and decreasing, while legal malpractice cases are increasing.

"The vast majority of Maryland lawyers never get into trouble.

In fact, the number of lawyers sanctioned by the state has fallen in the past 10 years, with the biggest drop happening in the latest fiscal year — when only 57 of the state’s 33,018 lawyers were disciplined by being disbarred, suspended or reprimanded.

Data and reports from Maryland’s disciplinary agency, the Attorney Grievance Commission, show that less than a quarter of all complaints are investigated, nearly half of those investigated complaints are “closed administratively” and about a third of the remaining receive some kind of discipline.

What the data do not show is any information on cases dismissed by the commission, with or without an investigation. All complaints are considered private and confidential unless the commission brings charges against an attorney. All charges are public. .

While lawyer punishments are declining, the number of attorney malpractice lawsuits, in which lawyers are sued, is increasing at the same rate as the expansion of the bar, said Dave Whitworth, a Crofton attorney who has practiced for 30 years.

The number of people who want to sue their lawyers has increased, said Stacie Dubnow, a legal malpractice attorney from Hunt Valley. But she has not seen an increase in the number of cases that merit a lawsuit

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A Rare Criminal Legal Malpractice Case

We don't know the rule in Montana, but in NY one may not successfully sue his criminal defense attorney without showing actual innocence.  Here is a case from Montana of an exonerated criminal defenendant who wants to sue his attorney, now decesed.  There are of course, many hurdles.  Is there insurance for a public defender?  is there still an estate for the deceased attorney?  Is there a public defender agency?

"A man exonerated of rape charges after 15 years in prison claims in a federal lawsuit seeking damages that he was poorly represented at trial, by a now-deceased court-appointed defender.

Jimmy Ray Bromgard, whose conviction was overturned in 2002, is suing the state of Montana and Yellowstone County for $16.5 million. In depositions reviewed by the Billings Gazette, Bromgard claims his court-appointed attorney, John Adams, advised him to "plead guilty" the first time they met, then mounted a shoddy defense and bungled his appeal.

The public defender program was funded by the county. County attorneys have argued state judges were largely responsible for its operations, the Gazette reported.

Yellowstone County recently made a final offer to Bromgard in an attempt to settle the lawsuit, deputy county attorney Dan Schwarz told the newspaper. Schwarz would not provide further details except to say the offer is open until the end of the year.

The state has filed motions to be dismissed from the case, but they have not yet been ruled on by U.S. Magistrate Judge Carolyn Ostby. That part of the case is expected to focus on allegations of incompetent forensics work by the State Crime Lab and its former director, Arnold Melnikoff. "

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Is Using your Opponent's Notes Legal Malpractice?

Here is a case from California in which plaintiff's attorney came into possession of a set of notes made by defendant's attorney concerning the expert and his testimony.  Even though the notes inadvertently came into plaintiff's possession, the attorney has been taken off the case by the court.

If things go wrong from here, will there be a legal malpractice case to follow?

"Taking advantage of an opposing lawyer's privileged documents, even if they're accidentally obtained, is a major no-no, the California Supreme Court ruled Thursday.

To drive its point home in the anxiously awaited ethics case, the court unanimously upheld El Segundo, Calif., lawyer Raymond Johnson's disqualification from an automobile rollover case for using his opponent's notes to impeach expert witnesses.

"An attorney in these circumstances may not read a document any more closely than is necessary to ascertain that it is privileged," Justice Carol Corrigan wrote. "Once it becomes apparent that the content is privileged, counsel must immediately notify opposing counsel and try to resolve the situation."

Johnson represented a family who sued Mitsubishi Motors Corp., Mitsubishi Motor Sales of America and the California Department of Transportation following the 1998 rollover crash of a Mitsubishi Montero sport utility vehicle. Eleven-year-old Denise Rico died in the accident and her 18-year-old sister, Zerlene, was partially paralyzed.

Before the case reached trial, Johnson came into the possession of opposing attorney James Yukevich's notes concerning a meeting with expert witnesses. Johnson copied the 12-page document, prepared by one of Yukevich's paralegals, and used it during a subsequent deposition to discredit Yukevich's experts.

Johnson claims the notes were given to him accidentally by a court reporter, while Yukevich insists they were illicitly taken from his co-counsel's briefcase during an earlier deposition.

San Bernardino County Superior Court Judge Ben Kayashima eventually ruled that Johnson obtained the document inadvertently. But he still disqualified Johnson and his legal team from the case for breaching his ethical duties by using another lawyer's confidential work product. "


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Legal Malpractice in Future Electronic Discovery

Here is an interesting take on the issues of electronic discovery, its blossoming, and future legal malpractice cases.  In short, learn and the new rules, or face problems.

"Much ink has been spilled about the demands of discovery in the current technological age. The storage of electronic data, the existence of metadata and the wholesale migration from printed hard copy documents to electronic documents have challenged all practitioners, particularly those trained in discovery during the era of banker's boxes and hard copy documents. The 2006 e-discovery amendments to the Federal Rules of Civil Procedure, along with other standard-setting rules, have raised the stakes. In fact, in the current climate, given the interplay between ethical obligations and standards for professional conduct and these e-discovery requirements, attorneys may be surprised to learn that inattention to e-discovery may not only work to the detriment of clients -- it may lead to professional malpractice or the imposition of sanctions on counsel. If any doubt remained, the ongoing discovery dispute in the Qualcomm v. Broadcom case, discussed below, should eliminate

Despite the low standard, failure to provide competent representation nevertheless creates the potential for malpractice actions. Restatement, supra § 48 (2000). In legal malpractice actions, the client must establish that, but for the attorney's neglect, the litigation would have ended in a result more favorable for the client. That is, the client must prove the existence of a duty, a breach of that duty, proximate cause and damage. 4 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice § 30:5 (2007 ed.).

Thus, in general, an attorney owes a duty of care to clients to "exercise the competence and diligence normally exercised by lawyers in similar circumstances." Restatement, supra § 16 (2000). "

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Another Class Action Overexpense Legal Malpractice Case

A while ago we reported on one of two class action expense [really over-expense] legal malpractice cases.  Now, this Phen-Fen case has surfaced.

"A former fen-phen client of Fleming & Associates has sued the Houston-based firm and partner George Fleming, alleging they took too much expense money out of her fen-phen settlement, including a share of $29 million for echocardiograms performed on prospective clients.

Plaintiff Sandra Karnes, who hired Fleming & Associates to seek damages from pharmaceutical company Wyeth for heart-valve injury she allegedly sustained after taking the diet-drug combination known as fen-phen, seeks class certification in the suit filed in the U.S. District Court for the Southern District of Texas.

Late last month, U.S. District Judge Ewing Werlein of Houston denied the defendants' motion for summary judgment. No hearing is yet scheduled on the class certification motion.

The allegations in Karnes, et al. v. Fleming, et al. are interesting, because Karnes filed her complaint shortly before an arbitration panel ordered Houston lawyer John M. O'Quinn's firm to pay more than $41 million to a class of 3,450 former breast implant clients "

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Sleepless in New Jersey and Legal Malpractice

Thanks to William Voorhees, an attorney in NJ who forwarded this story about a NJ legal malpractice case.  The case is Adelman v. Shenker, Superior Court of New Jersey, Appellate Division, A-3233-04T1, Decided 12/14/07.

Defendant attorney had sleep apnea, and after extensive pre-trial activity, had to tell the judge that he just could not go ahead with the trial, for his lack of sleep. anxiety, and other symptoms.  More interesting however, was the use of a sleep apnea specialist in this legal malpractice case. 

Ultimately, the case turned around a pre-trial mediation session, its recommendation, the lack of communication by attorney to plaintiff [then the defendant] client, and its repercussions.



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Pre-Judgment Interest in Legal Malpractice

When is Pre-judgment Interest permissible in Legal Malpractice cases?  The Second Department recently wrote on this issue in Barnett v Schwartz ,2007 NY Slip Op 09712 ,Decided on December 11, 2007 ,Appellate Division, Second Department ,Ritter, J., J

"The plaintiffs are entitled to an award of prejudgment interest. "CPLR 5001 operates to permit an award of prejudgment interest from the date of accrual of the malpractice action in actions seeking damages for attorney malpractice" (Horstmann v Nicholas J. Grasso, P.C., 210 AD2d 671; see also Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 444 n 3; Meyer v Glynn, 278 AD2d 291; Butler v Brown, 180 AD2d 406). In relevant part, CPLR 5001(b) provides: "[I]nterest shall be computed from the earliest ascertainable date the cause of action existed, except that interest upon damages incurred thereafter shall be computed from the date incurred. Where such damages were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date." Here, the earliest ascertainable date that the plaintiffs' legal malpractice cause of action existed is December 21, 1992, the date that the agreement was entered into (see McCoy v Feinman, 99 NY2d 295; Town of Wallkill v Rosenstein, 40 AD3d 972). Thus, interest is to be computed from the dates that the damages were incurred (i.e., the dates that the plaintiffs paid the amounts awarded as damages for rent, renovations, and legal fees) or, if impractical, from a single reasonable intermediate date. "

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What does "but for" Really Mean in Legal Malpractice?

One unique element in legal malpractice is the "but for" requirement... that "but for" the legal malpractice there would have been a different or better result.  Defendants in legal malpractice are eager to flaunt this requirement, and argue that the legal malpractice must be the "sole" cause of the injury.

The Second Department now clarifies in Barnett v Schwartz ,2007 NY Slip Op 09712 ,Decided on December 11, 2007 ,Appellate Division, Second Department ,Ritter, J., J

"The defendants' argument concerning causation has an impact upon the analysis of other issues raised. Thus, it will be discussed first.

The defendants argue that the Supreme Court erred when it charged the jury that the plaintiffs needed to prove only that the defendants' negligence was a proximate cause (i.e., a "substantial" cause) of damages. Rather, they assert, the court should have charged the jury, as they requested, that the plaintiffs needed to prove that "but for" such negligence they would not have sustained damages. The defendants argue that the "less rigorous standard" of causation charged by the Supreme Court warrants reversal and a new trial. However, this argument lacks merit.

The elements to be proved in a legal malpractice action have been subjected to various formulations. Thus, while it is clear that a plaintiff-client must prove negligence (i.e., that the defendant-attorney failed to exercise that degree of care, skill, and diligence commonly possessed and exercised by members of the legal community), some cases hold that the negligence must be "the" proximate cause of damages (Britt v Legal Aid Soc., 95 NY2d 443, 446; see e.g. Kleeman v Rheingold, 81 NY2d 270; Caruso, Caruso & Branda, P.C. v Hirsch, 41 AD3d 407; Cohen v Wallace & Minchenberg, 39 AD3d 691; Cummings v Donovan, 36 AD3d 648; Kotzian v McCarthy, 36 AD3d 863), while others hold that it must be "a" proximate cause of damages (Bauza v Livington, 40 AD3d 791, 793; see e.g. Moran v McCarthy, Safrath & Carbone, P.C., 31 AD3d 725; Terio v Spodek, 25 AD3d 781; Pistilli v Gandin, 10 AD3d 353). There are also cases from this court requiring the damages to be a "direct result" of the negligence (Caruso, Caruso & Branda, P.C. v Hirsch, 41 AD3d 407, 409; Kotzian v McCarthy, 36 AD3d 863; Moran v McCarthy, Safrath & Carbone, P.C., 31 AD3d 725). In the main, the cases from the Court of Appeals, including the most recent, do not expressly require that the negligence be either "the" or "a" proximate cause of damages, but require proof that, "but for" the negligence of the defendant-attorney, the plaintiff-client would have prevailed in the underlying action (in a classic lawsuit-within-a-lawsuit scenario) or would not have incurred damages (in an action alleging negligent advice, etc.) (see e.g., Leder v Spiegel, 9 NY3d 836; Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438; AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428; Davis v Klein, 88 NY2d 1008; Carmel v Lunney, 70 NY2d 169). The defendants here, while not expressly describing the difference between proximate and "but for" causation, argue that the latter requires a greater, more direct degree of causation. However, we find no substantive import to the variations in the formulations discussed above, and hold that a plaintiff-client in a legal malpractice action need prove only that the defendant-attorney's negligence was a proximate cause of damages.

First, the parties have not cited, and research has not revealed, any case from the Court of Appeals or any other court expressly holding that "but for" causation is synonymous with sole proximate cause, or that requires a degree of causation in legal malpractice cases greater than proximate cause, i.e., greater than that which must be typically proved as against any other professional or lay defendant in a negligence action. Similarly, the parties have not cited, and research has not revealed, any case discussing or identifying any basis for singling out attorneys for special treatment on the issue of causation. The Pattern Jury Instruction on legal malpractice, which focuses upon the lawsuit-within-a-lawsuit scenario, does not expressly use either the phrase "but for" or "proximate cause" in its formulation (NY PJI 2:152). However, the comments to the instruction, while noting the "but for" formulation, provide that a defendant-attorney's negligence need only be [*5]"a" proximate cause of damages and refer the reader to the general Pattern Jury Instruction on proximate cause (NY PJI 2:152, p 872, 880; NY PJI 2:70). Moreover, our reading of the case law does not reveal that a heightened standard for causation is actually being applied in legal malpractice cases. Rather, all results can be explained by application of general principles of proximate cause. For example, in the lawsuit-within-a-lawsuit scenario, the plaintiff-client must prove that but for the defendant-attorney's negligence they would have prevailed in the underlying action. Stated otherwise, if the plaintiff-client cannot prove that it would have prevailed in the underlying action, the defendant-attorney's negligence was not a proximate cause of any damages arising from the loss of the same. Further, there are several decisions from this court requiring the plaintiff-client to prove both that the defendant-attorney's negligence was "a" proximate cause of damages, and that "but for" such negligence it would have prevailed in the underlying action or would not have incurred damages (see e.g. Moran v McCarthy, Safrath & Carbone, P.C., 31 AD3d 725; Terio v Spodek, 25 AD3d 781). Clearly, these decisions do not provide for two different measures of causation in the same standard. Indeed, it would appear that the "but for" language, which grew out of the lawsuit-within-a-lawsuit scenario (see Carmel v Lunney, 70 NY2d 169; N. A. Kerson Co. v Shayne, Dachs, Weiss, Kolbrenner, Levy & Levine, 45 NY2d 730), is merely a recognition of the factual particularities of proving proximate cause and damages in such an action. When applied in a case involving negligent legal advice (i.e., a case where there is no underlying cause of action to lose), it would appear that the "but for" formulation is merely a recognition of the factual complexities that may attend proving proximate cause when the legal advice was merely one of a myriad of factors that contributed to the plaintiff-client's ultimate decision or course of action (see e.g. AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428). Finally, we note, a conclusion that the "but for" formulation of causation requires proof that the negligence of the defendant-attorney was the sole proximate cause of damages is contrary to the holding of the Court of Appeals that the contributory negligence of the plaintiff-client may be pleaded as an affirmative defense (see Arnav Indus. Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300; see also Boudreau v Ivanov, 154 AD2d 638). In sum, regardless of the formulation employed, a plaintiff in a legal malpractice action need prove only that the defendant-attorney's negligence was a proximate cause of damages.

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Long Island Legal Malpractice Verdict Upheld

Plaintiff  in this Long Island Legal Malpractice case was a company that wanted to create and bottle barbecue sauce. They looked for a site, and unfortunately came up with a building on a hazardous waste site.  However, only the attorneys knew of this small problem, and they did not let the clients know.

"RITTER, J.:  The issue to be decided on this appeal is whether the defendants-attorneys committed legal malpractice in their representation of the plaintiffs in the negotiation and closing of a lease and purchase option agreement concerning certain commercial property. The plaintiffs sought the property for the purpose of manufacturing barbecue sauce. Approximately two years prior to the signing of the agreement, the subject property was classified as an inactive hazardous waste disposal site. The defendants knew that there were [*2]environmental violations concerning the property that had to be dealt with and wrote to the relevant enforcement agencies asking for details. Despite the fact that those letters were never responded to, the defendants advised the plaintiffs to enter into the agreement at issue on an "as is" basis. The defendants never informed the plaintiffs of the environmental violations or the consequence of the "as is" clause of the agreement until two years later. We find the jury's determination that the plaintiffs were entitled to such information before entering into the agreement, and that the defendants committed malpractice by failing to advise the plaintiffs about the violations and the effect of the "as is" clause, was reached on a fair interpretation of the evidence. "


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California Bar Requirement to Disclose Legal Malpractice Insurance

Law.Com reports  on events in the California Bar discussion on requiring disclosure of legal malpractice insurance coverage.   "Attempting to mollify critics, a California Bar committee on Thursday recommended a significant change to a proposal that would require attorneys to tell clients if they don't carry malpractice insurance.

But one member opposed to disclosure insisted that the whole idea should be canned before the State Bar rouses the anger of California's considerable ranks of solo practitioners and small-firm lawyers.

"They know this is going to do very little but adversely affect them," State Bar Governor John Dutton said.

Meeting in Los Angeles, the Committee on Regulation, Admissions and Discipline voted 4-3 to require disclosure in writing only when it's "reasonably foreseeable" that a lawyer will represent a client for more than four hours.

The amendment was an attempt to pacify several State Bar governors who expressed concerns in November that the original proposal could force attorneys to disclose a lack of insurance during casual talks at parties or friendly phone calls for advice.

State Bar President Jeffrey Bleich, who attended Thursday's meeting by telephone, liked the amendment and said he hopes it appeases the critics.

"This has just been a politically thorny issue," he said, "and this compromise will hopefully satisfy everyone enough so we can move forward."

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Ohio Legal Malpractice Case Dismissed

What does an Ohio legal malpractice case teach us in New York?  This case illustrates the "but for" aspect of legal malpractice.  While it is not a different burden than showing "proximate cause" in other litigation [we'll be talking about a 2d Department case in the coming days that illustrates this principal] it is always important.

"Joanne Schneider, 66, and her husband, Alan, 64, of North Royalton, sold at least $60 million worth of promissory notes to 740 investors. They used the money to buy an apartment complex, a pair of wineries, a machine shop and more than 20 rental properties.

Fornshell liquidated about $20 million of the properties, including the couple's failed Cornerstone development on 34 acres in Parma Heights.

The Schneiders are scheduled to stand trial May 19 in Common Pleas Court on charges of engaging in a pattern of corrupt activity, theft, money laundering and conspiracy.

Judge David Matia threw out the legal malpractice lawsuit after determining Roetzel & Andress had sufficiently warned the Schneiders of the consequences of defying the state's orders to stop selling promissory notes.

"The Schneiders created the implosion of the Cornerstone project through their own allegedly criminal conduct," Matia wrote in his opinion. "The Schneiders . . . defied the Ohio Division of Securities' explicit order to stop selling promissory notes . . . despite legal advice from Roetzel & Andress to the contrary."

Joanne Schneider was more aware of her dire financial situation than her lawyers, and bore more responsibility for her failure than anyone else, Matia said.

The plaintiffs argued that Roetzel & Andress could have prevented the collapse, but ignored the Schneiders' questionable fund-raising activities in order to preserve the firm's lucrative business arrangement. "

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More on Hon/Hun and Deposition Practices

Here is the case , Laddcap Value Partners LP v. Lowenstein Sandler PC, 600973-2007
Decided: December 5, 2007 ,Justice Carol Robinson Edmead ,NEW YORK COUNTY
Supreme Court
Counsel for Plaintiff: Danzig Fishman & Decea
Counsel for defendant: Arkin Kaplan & Rice LLP

We reported on this abusive practices/gender sarcasm case last week. 

"I am "not aware of any rule or law which requires civility between counsel" (Thomas B. Decea, Esq.).

The genesis of this application is a claim of contumacious, abusive, and strident conduct by counsel during a deposition.

Michelle Rice, Esq. ("Rice"), moves pursuant to CPLR 3104 for a Court-appointed referee to supervise further depositions in this case and for an order directing that further depositions be held at the courthouse. Rice represents the defendant/third-party plaintiff, Lowenstein Sandler PC ("Lowenstein LP"), against claims of legal malpractice by plaintiff Laddcap Value Partners, LP ("Laddcap Partners").

On October 1, 3 and 4, 2007, Rice took the deposition of plaintiff's representative, Robert B. Ladd (the "witness"), who, along with Laddcap Value Associates ("Laddcap Associates"), are third-party defendants in this action. The witness is the sole employee of both plaintiff Laddcap Partners and Laddcap Associates. The witness was represented by Mr. Thomas B. Decea ("Decea").

Rice's motion is precipitated by the behavior of Decea during the three days of depositions of the witness. Rice points out that during the course of the witness's deposition, Decea repeatedly directed the witness not to answer certain questions posed to him, which were, on many occasions, followed by inappropriate, insulting, and derogatory remarks against Rice concerning her gender, marital status, and competence. Although both counsel agreed that all objections, except those as to form, were preserved, Decea made numerous speaking objections, and threatened to leave the deposition in response to such "leading" questions. Rice also contends that Decea asked her several times, off the record, whether she was married.

In light of the above, Rice argues that Decea's conduct was intended to intimidate her and interfere with her ability to zealously defend and conduct further depositions, in violation of New York's Code of Professional Responsibility, EC 7-37, DR 1-102 [A][6], New York Executive Law §296((1)(d), Rules of the Chief Judge of New York §25.16, and Uniform Rules for the Conduct of Depositions. Because of Decea's tactics and his demonstrated inability or unwillingness to comply with rules governing professional conduct, the Court should exercise its discretion under CPLR 3104(a) and appoint a special referee to ensure that the depositions are completed in a timely and cost-effective manner.

In opposition, Decea maintains that while he "aspires to be civil" to other counsel, he is "not aware of any rule or law which requires civility between counsel." According to Decea, that Rice was intimidated by him was "unfortunate" and does not substantiate any improper actions on his part. Decea complains that Rice was antagonistic toward him and the witness, was sarcastic with her questions, and harassing with her facial expressions. When Rice threatened to file a complaint against him with the Court, Decea asked to speak with her privately, whereupon both parties shook hands in agreement that if she refrained from asking leading and compound questions and badgering the witness, he would try not to interrupt her and limit his objections. According to Decea, "There was never another word about it for the rest of the week." When Rice threatened to contact the Court during the first day of depositions, Decea offered to arrange a conference call. However, Rice then declined, and continued the deposition. Now, on the eve of producing her client for a deposition, Rice "plays the gender card." Decea claims he instructed the witness not to answer approximately four times, and on each occasion, stated the basis for his objection an proffered a proper question. Decea contends that his references to "hun" and "girl" were not malicious, and if Rice would have advised him that she was offended, he would have stopped. If Rice was truly offended, she would not have completed three days of depositions. Rice's motion is a delay tactic to permit her client to assess the plaintiff's testimony and justify the fact that Rice is unavailable to for the deposition of her client scheduled for the following week. Decea intends to move for costs and sanctions."


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Legal Malpractice Verdict Reinstated in Washington Case

This case from Washington state, Schmidt v. Coogan, illustrates two common situations in legal malpractice.  The first is on the lawyer's side.  Client slips and falls on spilled shampoo in a store.  She goes to the attorney, who happily takes the case.  He tells the client that it's a good case, and he will give it his all.  Client checks in and tries to make sure that everything is going well. 

On the last day of the statute of limitations she finds out that the attorney has not filed, and isn't even in the office.  Someone else hastily drafts a complaint and files it.  Problems?  Wrong defendant, wrong facts.  Motion to amend is denied.  Case dismissed.

The second situation is proving that the client would have succeeded when the legal malpractice case is brought.  Here, attorney defendants won't settle, case goes to trial.  Verdict for plaintiff, Motion for a directed verdict denied.  New trial on damages, as jury was "inflamed."

After all this, the intermediate appellate court reverses and directs verdict for attorney on theory that plaintiff could not prove notice of defective condition to the store.  Now, on the same facts,  Supreme Court of Washington reverses again, and enters judgment for plaintiff.

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Suicide after Escrow Thefts and Legal Malpractice

Lawyers handle cases for people who are sometimes desperate.  While it may little matter whether a large corporations loses a million dollars in a deal, many times an attorney deals with much more dire circumstances for the client.  They may have lost a life's savings; children may suffer.

This tragic story involves an attorney who overspent, and could not keep up.  His solution was to steal from the escrow account.  The victims have lost $ 750,000.  The attorney shot himself, after the FBI became involved.

The insurer has successfully disclaimed coverage.  The many victims, including the attorney's wife and children are not so lucky. "A legal malpractice insurer has no duty to defend or indemnify a Cumberland County, Pa., lawyer who allegedly stole more than $780,000 from his clients and gambled much of it away before committing suicide when he learned that he was under investigation, a federal judge has ruled.

As U.S. District Judge John E. Jones III described it in his 38-page opinion in Westport Insurance Corp. v. Hanft & Knight, the case involved "the tragic circumstances that resulted from a lawyer's double life."


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Wills & Estates Legal Malpractice Claims on the Rise?

Here is a scholarly article on Canadian legal malpractice trends from the Practice Pro blog site.  Its conclusion is that wills & estates legal malpractice cases are on the rise, and will continue this trend. 

Risk managers look to frequency and severity in their analysis of trends.  Frequency is the raw number of cases.  Severity is the potential dollar amount of the losses.  As estates [and the wills that create them] benefit from the prior years of real estate and stock appreciation, claims concerning malpractice in their handling will rise in severity, simply as a matter of inflation and appreciation.

Beyond that, the frequency is also rising.  Historically, education on the issues of legal malpractice in a specific area and publicity of successful cases contributes to this trend.


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Legal Malpractice in the Oil Well Business

Everyone knows that oil drilling is a cutthroat buisness. Here is an interesting story.  Did the law firm capitilize on inside knoweldge?  Plaintiff's story is that it is in the niche business of developing old oil wells, and was in the process of buying from another business in bankruptcy.  They had to hire a W.Va. law firm to complete the transaction.  They charge that the law firm simply saw an opportunity, set up a rival purchaser, dragged their feet and inserted the rival into the deal.

"Between May 25 and June 2, Hinkle says it learned that Elk River Energy was formed only two weeks before the May 25 meeting and that Dollison, a partner at Bowles Rice, "was not only the organizing attorney," but "he also had a financial stake in Elk River Energy."

Had Hinkle known of what it called this "absolutely inexcusable conflict of interest," it never would have retained Bowles Rice nor would it have disclosed confidential and proprietary information consisting of the terms of the agreement with Buffalo.

On June 2, 2006, Chincheck informed Hinkle - "in a transparent attempt to excuse her culpability," according to the complaint - that she would no longer being representing the company.

Three days later -- through current counsel Hugo N. Gerstl of Monterey, Calif. - spoke with Buffalo's bankruptcy trustee, who said Elk River was trying to back out of its contract with Buffalo and trying to dissolve. Meanwhile, the trustee also moved to sell the subject property in bankruptcy court. The "Objection or Upset Bid" date was set for June 14, 2006. "

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Disgorgement of Fees in a Conflict of Interest

New York Lawyer reports: "Pillsbury Winthrop Shaw Pittman is one step closer to being forced to return about $4 million to a former client.   These bankruptcy legal malpractice cases are becoming more and more frequent.

The Chapter 11 trustee for SonicBlue Inc. filed a statement on Tuesday supporting a November motion, filed by SonicBlue, asking Pillsbury to pay back the fees.

Tuesday's statement took the motion even further. In it, Trustee Dennis J. Connolly suggested that the judge hold off on setting an amount so that other issues such as interest or even potential damages could be considered. "

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Incivility and Gender Bias in Legal Malpractice Case??

Anthony Lin of the NYLJ today reports a recent decision of Justice Edmead of Supreme Court, New York County. It is either an appalling story of gender bias and all around smarmy behavior or some simple transcriptional errors.  Was it "hon" or "hun."  Calling the adversary Attilla the Hun [as the attorney claimed] might even be good.  Here is the story:

"A New York judge has ordered court supervision of a lawyer for "objectionable conduct" toward a female opposing counsel who he said had a "cute little thing going on" during a deposition.

According to transcripts of the deposition, Thomas B. Decea of Danzig Fishman & Decea in White Plains also called Michelle A. Rice of Arkin Kaplan & Rice "hon" and "girl" and asked her why she was not wearing a wedding ring. The judge said Mr. Decea's behavior reflected gender bias as well as "a lack of civility, good manners and common courtesy." She said the appointment of a referee was a means of "guarding against future objectionable conduct" by Mr. Decea.

But Mr. Decea yesterday denied acting inappropriately. He vowed to appeal Justice Edmead's decision and said many of his comments were wrongly transcribed or taken out of context. He also accused the judge of violating his right to due process by not providing him with copies of the deposition transcripts on which she based her order.

The underlying case is a legal malpractice suit filed by a hedge fund against its former law firm. Mr. Decea, 48, was the lawyer for hedge fund Laddcap Value and its manager, Robert B. Ladd; Ms. Rice, 46, was representing the fund's former firm, Lowenstein Sandler of Roseland, N.J. This is not a white collar interview that you're sitting here interviewing something with your cute little thing going on," Mr. Decea said, according to the transcript, later telling her it was "nothing personal, dear."

After Ms. Rice told Mr. Decea she thought his comments were indeed personal and offensive, he said: "Your skin is getting thin now."

At another point in the deposition, Mr. Decea referred to Ms. Rice as "hon." After she questioned his use of the term, Mr. Ladd jumped in to suggest that Mr. Decea had meant Hun "[a]s in Attila" and that the remark was not personal.

"As in Attila? I don't even understand that," Ms. Rice replied.

Later in the deposition, Mr. Decea questioned Ms. Rice's ability to try the case.

"You better get somebody else here to try this case, otherwise you're going to be one sorry girl," he said. "

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Mistakes upon Mistake in NJ LEgal Malpractice Case

This case is instructive on several levels.  First, it is one of a coming wave of lgal malpractice cases against defense attorneys in civil litigation.  Second, it demonstrates the NJ "net opinion" rule, in which an expert must give more than a "personal opinion."  The expert must give a standard of care, and must reference stautues, cases and events in the case.  CARBIS SALES, INC., d/b/a
Plaintiffs-Respondents v. ISRAEL N. EISENBERG, ESQ., and POST & SCHELL, P.C., formerly known as THE LAW OFFICES OF

This opinion vindicates Prof. Bennet Wasserman, the expert.  He also happens to be a practitioner in NJ legal malpractice cases.  Finally, the case illustrates both how badly the defense attorney bungled the matter [a big product liability case which should have been won by defense ends in a $ 1 million verdict, and then afterwards, how badly the defense of the legal malpractice matter foundered.  They were late in making motions, and late in asking for discovery.

"In this legal malpractice action, defendants Israel N. Eisenberg and his former law firm, Post & Schell, P.C., appeal from a final judgment awarding their former clients, plaintiffs Carbis Sales, Inc. (Carbis or plaintiff) and Safe Step Reinsurance, Inc. (Safe Step) $704,405.20 in damages. On appeal, defendants contend that the trial court erred in admitting the net opinion of plaintiffs' expert and in refusing them discovery of a memo prepared by an investigator retained by plaintiffs. Plaintiffs cross-appeal, arguing that the trial court erred in denying them a new trial on damages or additur."

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Recent Legal Malpractice Cases

1. Duffy-Duncan v. Berns & Castro,2007 NY Slip Op 9493, 1st Dept, 11/29/07

Summary judgment denied and affirmed. Attorney had failed to serve a notice of claim on a Transit Authority ice patch slip and fall. Summary judgment denied for failure to demonstrate that the TA had a lack of notice of defense or a storm in progress defense. This case is notable for the Appellate Division not taking the defenses at face value.

2. Asher v. Shimbaum, 2007 Slip Op 9351, 2d Dept, 11/27/07

Plaintiff’s underlying action was commenced to enforce an oral contract between brother and sister to convey real property. Legal malpractice case is dismissed on the inability to prove the “but for” case: that plaintiff would have succeeded in the underlying action.

3. 3-Mar Service Center, Inc. v. Mahoney, Connor & Hussey, 2007 Slip Op 9363, 2d Dept, 2007

Motion to dismiss granted in Supreme Court but reversed in Appellate Division. The decision does not give facts, but this was a successive [or even a third] motion to dismiss, after an earlier appeal.

4. Olaiya v. Golden, 2007 Slip Op 9377, 2d Dept, 2007

Plaintiff loses his job at the NYC Department of Juvenile Justice, but cannot demonstrate that the attorney’s conduct was the proximate cause of his job loss.
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Article on Large and Small Firm Mistakes in Legal Malpractice

William Gwire, a San Francisco Attorney writes in Law.Com about some of his legal malpractice cases in this article.

"The landscape for litigating attorneys has changed dramatically over the 33 years that I've been in practice. Cases are more complex, stakes are higher, and competition is more intense. Judges and opposing counsel are less accommodating and the rules and procedures that line the litigation process like a gauntlet are more complicated than ever. Clients, big and small, are also more demanding and more willing to seek redress for mistakes they perceive their attorneys have made.

But the nature of malpractice claims has also changed, with differences that often depend on the size of the firm. Interestingly, big firms and small firms, including solo practitioners, make different kinds of mistakes. While there are many types of errors that can lead to malpractice claims, this article focuses on just a few that I've seen emerging.


Complex and high-stakes litigation has placed a premium on experienced litigators, resulting in increased demand for large-firm partners with marquee names. Nothing draws in business and clients with litigation matters like a reputation for success in the courtroom. But because partners with star-power litigation credentials are in such demand, they run the risk of taking on too much work and stretching themselves too thin when it comes to handling their caseloads.


While small law firms make mistakes that usually don't add up to dollar damages as big as the ones made by larger firms, the resulting damage to both the client and the small firm or solo practitioner can be much more devastating. That is because the firm's client -- whether an individual or a small business -- may be financially unable to withstand a bad result, and the damages arising out of the malpractice may exceed the firm's insurance coverage (assuming there is any), exposing the individual partner or partners to personal liability.

While mistakes in small firms can occur in a lot of ways, there is one in particular that appears to be more prevalent today. Surprisingly, it is not the classic missed-statute type of malpractice, although that certainly still happens. The advent of sophisticated and inexpensive computerized calendaring programs seems to have eliminated many of those types of errors.

Rather, I've noticed that small firms and solo practitioners are often taking on work that they don't know how to handle. Unlike the situation at large firms, where experienced lawyers run the risk of stretching themselves too thin, the problem with small offices is lack of experience in a particular field. The law has become so complex and fields of practice so specialized that a solo practitioner or small firm simply can't do it all or even some of it. I am both amused and shocked when I see Web sites by solo practitioners or small firms that announce their specialties in family law, personal injury, probate, criminal law, intellectual property, real estate, construction litigation, securities, immigration and medical malpractice. You think I'm kidding? Spend an hour surfing the Internet for lawyers and you'll understand what I'm talking about. "

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Worker's Compensation Legal Malpractice Case

Here is a case from the Madison St.Claire Record, detailing a legal malpractice case arising from claims in a Worker's Compensation matter. "Frank Krausz filed a legal malpractice suit against Ann Dalton and Hammond, Shinners, Turcotte, Larrew & Young in Madison County Circuit Court Nov. 27, alleging they botched his workers' compensation claim.

According to Krausz, he was employed by Lanter Company and was injured at work on Aug. 21, 2001. He sustained injuries to his neck and shoulder while trying to close a jammed trailer door.

He claims that on Nov. 30, 2001, he retained the defendants by a written contract to represent his claim against Lanter.

Krausz claims the defendants filed an application for benefits with the Illinois Industrial Commission on March 12, 2002, and because of their actions his claim was denied.

Krausz claims the defendants negligently allowed his claim to get above the "red line" and be dismissed for want of prosecution, failed to make a timely application to reinstate the case after learning of the dismissal and failed to notify him of their actions until a year went by and his case was permanently barred. "

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International Firms and International Legal Malpractice Litigation

DLA Piper is Biglaw to the N th degree.  Here is a story about this international law firm's international legal malpractice case.  "DLA Piper is facing a negligence claim from a property consultancy company relating to advice it gave to Northern Rock on fraudulent property transactions.

The claim, brought by property company Gerald Eve last month (25 October), seeks a contribution to the £1.6m settlement the company paid to Northern Rock over alleged negligence by both DLA Piper and Gerald Eve on three property transactions.

The original claim pursued by Northern Rock against the company and firm was for negligent advice which failed to prevent an alleged fraud by a third party in property deals where the bank advanced a total of £6.75m for 15 flats in Paddington.

As a result of the alleged negligence, Northern Rock claimed it suffered a loss of £2.1m.

Gerald Eve settled Northern Rock’s claim against it in September for £1.6m. However, DLA Piper failed to put forward anything towards it, causing the property surveyors to lodge a claim against the firm for a contribution towards the settlement fee.

Mayer Brown professional indemnity partner Jim Oulton is advising Gerald Eve, while Barlow Lyde & Gilbert has been instructed to represent DLA Piper "
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Billboard vs. Litigation in Legal Malpractice

This law firm is the subject of a billboard advertising campaign. 

"A former client of Damon & Morey LLP is publicly airing complaints about the law firm.

The charges can be found on a Web site, in e-mails, on a since-removed Niagara Falls Boulevard billboard and in flyers being passed out around town.

Daniel Elia alleges that the Buffalo-based law firm is guilty of legal malpractice because it did not disclose a conflict of interest when Damon & Morey represented both him, as a debtor, and one of his creditors in a Chapter 11 bankruptcy case. The former owner of the now-defunct D.A. Elia Construction Corp. in Niagara Falls also claims that the firm charged him "unreasonable" legal fees.

"We think this type of conduct is not good for our community and not good for the integrity of the legal system," said Elia, who has outlined his grievances on the Web site

Damon & Morey's managing partner, Peter Marlette, said the courts found the conflicts of interest to be "insignificant." "

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Minimum Showing in a California Legal Malpractice Case

In this California Case, the court discusses the minimum showing of economic loss necessary. "A dentist being sued for dental malpractice has alleged none of the economic losses usually associated with claims for the breach of an insurance contract, bad faith or legal malpractice, a California appeals panel held Nov. 19, finding that a trial court properly sustained an insurer's demurrers without leave to amend "

On a totally different issue, this case makes facinating reading.  Plaintiff, a dentist is sued for dental malpractice.  His insurer hires attorney firm 1 to whom he objects.  One of the bases is that their expert worked for the patient-plaintiff's attorneys previously.  He complains to the carrier and they replace the attorneys with firm 2.  Firm 2 previously defended firm 1 in legal malpractice and the dentist complains... and on it goes.  The dentist eventually wins the dental malpractice case.  Read the decision.

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Bench Trial Exception to Expert Testimony in Legal Malpractice?

Here is a report of a Texas case which raises a novel argument:  In a bench trial is it necessary to present expert evidence of legal malpractice?  The argument is that evidence of a deviation from good and accepted practice must be shown to a jury, whose knoweldge generaly is insufficient for them to decide without expert testimony.  A judge who is finding the facts is in  a different situation, and it is often said that expert testmony on legal issues may not be presented to a judge. 

As an example, in a legal malpractice case arising from a non-filed appeal, it is the court's decision, not a jury's whether there would have been a different outcome.  Expert testimony on that aspect of the case is not permitted.

Is this the same argument?  In Texas, the answer was no.  "In Abdelhak v. Farney, plaintiff brought claims of legal malpractice and violations of the Texas Deceptive Trade Practices Act against his former trial attorney. No. 04-07-00121-CV, 2007 WL 4180133, at *1 (Tex. App.—San Antonio Nov. 28, 2007, no pet. h.) (mem. op.). Plaintiff alleged the defendant lawyer committed malpractice by failing to call certain witnesses, elicit certain testimony, and thoroughly conduct a cross-examination, but plaintiff failed to designate an expert witness prior to the designation deadline. Plaintiff sought leave to make a late designation and argued that his claims did not require expert testimony, but the trial court granted summary judgment. The San Antonio court affirmed. Id. at *4-5.

It is well-established that expert testimony is required to prove causation in legal malpractice cases arising from alleged trial errors because "the wisdom and consequences of these kinds of tactical choices" are beyond the knowledge of most jurors. Id. at *4 (quoting Alexander v. Turtur & Assocs., 146 S.W.3d 113, 119-20 (Tex 2004)). But this case had been set for a bench trial. The plaintiff argued that expert testimony should not be required in bench trials, because the lawyer’s negligence and the result of that negligence should be more obvious to a judge with legal training and experience. Noting that plaintiff had not provided any authority to support this argument, and observing that such a distinction would require a subjective determination of the particular trier of fact’s knowledge, the San Antonio court declined to modify the expert testimony requirement in the case of bench trials. "

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Successful So Far in Legal Malpractice

It's not possible to predict how an appellate court will decide summary judgment motions.  All know the standard.  Interpretation of the arguments varies from panel to panel.

Here is a recently decided legal malpractice summary judgment and appeal . Hamilton Duffy-Duncan, Plaintiff-Respondent, v Berns & Castro, et al., Defendants-Appellants.

2007 NY Slip Op 9493; 

The salient facts are a slip and fall on a patch of ice on an elevated outdoor subway platform.  The attorney failed to serve a timely notice of claim.  Here, the AD determined that defendants had not demonstrated that a storm condition would have provided a defense, or that  the TA might have defended on the issue of notice.  "The lack of discovery" here was held against the attorneys, not the plaintiff.  This is not always the case.


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Big Law Gets Religion

Reed Smith had a nice relationship with the Bair Foundation, a smaller religeous entity.  They represented the foundation for a while, and did so amicably.  However, when the foundation became a defendant in a discrimination law suit, and Reed Smith defended, the bill for legal services rose from an estimated $ 50,000 to $ 1 Million.  Now the foundation sues and says that  Biglaw is not for smaller companies or entities.

"The high demands on partners in global law firms to increase profits, the client said, ultimately led to its claims of professional negligence against Reed Smith. The religious nonprofit alleged it was excessively charged for its legal representation in a routine employment discrimination case, according to the complaint in The Bair Foundation v. Reed Smith.

And the nonprofit's attorney said he thinks these large firms shouldn't represent the smaller organizations.

The Bair Foundation, described in the complaint as a Christian charitable foundation devoted to foster care for children, sued Reed Smith in Lawrence County Common Pleas Court in Pennsylvania after it was allegedly charged nearly $1 million in legal fees and costs in defense of the suit.

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Internet Security and Blogging Issues come from a Legal Malpractice Case

This story is becoming news.  In a legal malpractice litigation,  involving the Town of Manalapan, NJ suing over a land deal by a former public official, a blogger is now being pursued for information coming onto the blog site.  Like the Flea case [read Eric Turkowitz's series of articles in   this new case has far greater considerations.

"The Electronic Frontier Foundation (EFF) asked a Superior Court judge in New Jersey today to preserve the free speech rights of an anonymous blogger facing legal threats from local government officials.

The blogger, writing as "daTruthSquad" on a site hosted on Google's Blogspot service, has criticized a controversial lawsuit filed by the township of Manalapan, as well as the officials who decided to pursue the case. The township subpoenaed Google for "daTruthSquad's" identity -- as well as for any emails, blog drafts, and other information Google has about the blogger -- claiming that the defendant in the case is actually writing the posts. The defendant, however, has already sworn under penalty of perjury that he is not "daTruthSquad."

"Bloggers, as well as everyone else, have a First Amendment right to speak anonymously," said EFF Staff Attorney Matt Zimmerman. "Litigants don't get a blank check to pry into the private lives of critics when they say things the litigants don't like. The fact that it is the government trying to abuse the discovery process makes this attempted invasion of privacy all the more repugnant."

In a motion to quash the subpoena filed today, EFF asked the court to block the township's attempt to uncover the identity of "daTruthSquad" and allow the blogger to continue to write about this or any other issue without being forced to identity him or herself. "

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Medical Malpractice followed by Legal Malpractice

We're republishing a blog blurb that unfortunately did not have a link to the original case.  From what we can piece together, here is what happened.  Plaintiff undergoes back surgery and emerges blind in one eye and damaged in the other.  Plaintiff hires med mal attorney who sues on the theory of drug incompatibility.  Attorney loses case for lack of expert.

Plaintiff then sues attorney, arguing that this was a positioning case, and as he was lying on his stomach for hours, his eyes were physically not drug damaged,  Plaintiff wins $ 750,000 verdict.  Interestingly, the doctor gets in the act and sues attorney too.  He succeeds with an $ 80,000 settlement.  Question: how does the doctor successfully sue the attorney?

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Wisconsin and Pennsylvania Legal Malpractice Statutes

In NY a convicted criminal defendant may not successfully sue his criminal defense attorney...unless he is exonerated.  That, or a reversal of the conviction [the ability to demonstrate "innocence"] is necessary.  In Wisconsin, the rule is in flux.  Here is a case which discusses, without deciding, when the statute starts to run: on the date of the mistake or on the date of the exoneration.  Instead, Wisconsin borrows the Pennsylvania statute of limiations, and dismisses the case.

Thomas P. Jasin,  v. Michael Best & Friedrich LLP,

"PER CURIAM. Thomas P. Jasin appeals from an order dismissing his legal malpractice action against Michael Best & Friedrich (MBF). The issue is whether the cause of action is time barred under the applicable statutes of limitation. Without addressing whether Wisconsin would adopt an exoneration or two-track rule in determining when a criminal malpractice action accrues, we affirm the order of the circuit court based on the application of Pennsylvania law. " "In Pennsylvania, periods of limitation in a criminal malpractice action begin to run at the time the attorney-client relationship is terminated. Bailey v. Tucker, 621 A.2d 108, 116 (1993). Although Pennsylvania makes actual innocence an element of proof for recovery, it does not make exoneration a prerequisite to the accrual of the malpractice action and the limitation period may expire before the defendant has obtained postconviction relief. Id. at 115 n.12, 13. Jasin’s claims are time-barred under Pennsylvania law. Because we borrow Pennsylvania law regarding limitations, we need not address whether Wisconsin would adopt the exoneration or two-track rule of accrual"

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Civility in Law v. Religious Discrimination

When you start out reading this story, it cleaves to the age old complaint:  Lawyers are less polite, and more business oriented than in the past.  It's no longer a profession, its a business.  The shocker comes at the end of this particular story:  biglaw litigating lawyer calls Federal Judge anti-catholic !

"Manhattan federal judge has delivered a lengthy manifesto against declining civility in the legal profession in the course of sanctioning law firm Dorsey & Whitney and two of its partners.

Southern District Judge Harold Baer opened his 129-page decision with a discussion of how "naked competition and singular economic focus of the marketplace have begun to infiltrate the practice of law, subordinating the high standards of service, collegiality and professionalism as a result."
"But the lawyer targeted by the judge struck back hard.

"It is hard to take seriously Judge Baer's alleged concern for professional courtesy when he continues to treat women litigators like second class citizens in his court room, requires attorneys to physically oversee the return of documents in another country within a matter of hours when they are overseas on their anniversary, and sets depositions on Sunday mornings," said Ms. Peters in an e-mail.

"Indeed, when a Catholic lawyer asks for the opportunity to attend church before the Sunday deposition, he mocked the attorney for Catholic observance," she said. "

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Legal Malpractice Statute of Limitations and the Discovery Rule in Deleware

In New York there is no recognizable discovery rule for the statute of limitations.  For the most part, the statute starts to run on the day of the mistake, although it may be tolled for continuous representation, or fraud [which does not consist of merely hiding the malpractice], but in Delaware there is a specific rule.

Here is a case which discusses the rule and its application. Boerger v. Heiman, Superior Court of the State of Delaware. 


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Is Bribery the way out of Legal Malpractice Problems?

Mississippi seems like the wild west of litigation.  When personal injury attorneys here speak of  the Bronx with reverence, it pales in comparison.  Here is a story of big tobacco, big tobacco litigation, big law and big bribes.  This might even be a reason for senatorial resignation!

"An attorney who helped negotiate a multibillion-dollar settlement against tobacco companies in the 1990s and has sued insurers over unpaid Hurricane Katrina claims was indicted in a suspected scheme to bribe a Mississippi judge.

The indictment accuses Richard "Dickie" Scruggs of conspiring to pay the judge $50,000 to rule in his favor in a lawsuit brought by other attorneys who sought fees for work on Katrina insurance litigation.

Circuit Court Judge Henry Lackey reported the "bribery overture" to federal authorities and agreed to assist investigators in an "undercover capacity," according to the indictment.

Scruggs, whose brother-in-law is Republican U.S. Sen. Trent Lott, earned millions from asbestos litigation and from his role in brokering a multibillion-dollar settlement with tobacco companies in the mid-1990s. "

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Losing on Both Ends

Here is a story from Kentucky.  What caught our interest was the "case so good he couldn't lose it"

"He has been called the lawyer "sued on both ends" -- losing lawsuits filed against him by his client and by the Louisville surgeon his client unsuccessfully sued.

As the Kentucky Trial Court Review put it, Tennessee attorney Laurence Dry was found on one hand to have botched a medical malpractice case "so good he couldn't lose it" and on the other hand to have filed a case "so bad he never should have taken it."

The paradoxical result is unprecedented in Kentucky, according to the presidents of both Kentucky Defense Counsel, which defends civil cases, and the Kentucky Justice Association, which represents plaintiffs

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40% Plus $23 Million Fee Permitted for Now

This attorney fee matter involves a huge real estate famiy fortune.  It recalls the Goldman real estate family divorce.  There the husband proudly declared that he owed his wife only $ 386 milion dollars in equitable distribution, not $ 786 million.  

 In Lawrence v. Miller the attorneys worked on this estate matter for an hourly rate which netted them $ 18 million, and at the same time asked for "gifts."  The Gifts were for $5 Million!  Afterwards, they got the widow to sign a new contingent fee arrangement for 40%.  How did the AD react to this?  They said that the fee was all right for now, and that they could not make a decision without further information.

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Ex Parte Interviews of Doctors Permitted by Court of Appeals...Are Attorneys Next?

Ex Parte interviews of Non-party doctors is the subject of todays Court of Appeals Ruling.  Read the entire case, and note the many amicus briefs.  This is a big and important case.  Put simply, Surpeme Court is permitted to direct plaintiff to give defendant HIPPA authorizations which allow defendants not only the records, but the right to speak with prior treating physicians and discuss plaintiff's medical condition.  Plaintiff is not permitted to hear the discussion, nor be supplied with notes.

Remembering the identical genesis of medical malpractice and legal malpractice, as well as the mirror image "physician-patient" and "attorney-client" privileges, a similar legal malpractice case must soon surface.  There are often several attorneys who represented plaintiff prior to the target defendant, and afterwards, too.  Right now, they may not be interviewed.  Will this last?


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Milberg Weiss and others in a $40 Million Legal Malpractice Case

Law.Com via Newsday reports that Sam Wiley "the colorful Texas billionaire" has sued Milberg Weiss and other class action plaintiff's law firms for their handling of the Computer Associates class action matter.  Essentially he charges the settled too soon and for too little, in order to grab legal fees prematurely.

"Wyly’s beef? He claims that Milberg and the others left billions on the table by prematurely settling a case so they could bank some $40 million in attorneys fees. The suit was filed in state court in Manhattan and alleges legal malpractice, fraud, unjust enrichment and breach of fiduciary duty. Here’s the story from Newsday.

Newsday reports that Wyly’s lawsuit centers on two shareholder lawsuits filed against CA — one in 1998 following a sharp drop in CA’s share price, and another in 2002 following news of an accounting probe at the company. The plaintiffs law firms effectively dropped the 2002 claims, according to the story. Wyly’s lawyer, William Brewer, told Newsday that the firms’ decision to effectively drop the claims in the 2002 suit “one of the most egregious cases of [legal] malpractice I’ve seen in 23 years.”

In addition to Milberg Weiss, the suit names as defendants Stull, Stull & Brody; Schiffrin Barroway; and Coughlin Stoia. Newsday reached neither the firms nor CA for comment.

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Are Bankruptcy Cases the Future of Legal Malpractice?

Here is a post from NY Lawyer:

In April 2003, Steven Garfinkel, the chief financial officer of DVI Inc., wrote a memo to chief executive officer Michael O'Hanlon about the crushing liquidity crisis facing the health-care finance company and its implications for a pending stock float. The CFO urged his boss to talk as soon as possible to the company's main outside lawyer, John Healy, a partner in the New York office of Clifford Chance.

As for Clifford Chance, it is now facing two lawsuits in federal court in Philadelphia charging that it participated in the fraud at the company. One is the familiar shareholder class action, which is also targeting Merrill Lynch and Deloitte & Touche. The other suit, however, is by DVI itself, or, rather, the bankruptcy trustee overseeing the fallen company's estate. Trustee Dennis J. Buckley requested $2 billion in damages from the London-based law firm in a complaint filed in March 2006.

Though they garner fewer headlines, such bankruptcy trustee suits have largely replaced shareholder class actions in the nightmares of law firm managing partners. These suits are often better-funded, better-lawyered and, with the U.S. Supreme Court likely to further limit third-party liability in securities fraud cases, they may soon have a distinct legal edge as well.

"These are the lawsuits firms are most worried about now," said Michael Carlinsky, a partner at Quinn Emanuel Urquhart Oliver & Hedges who is representing Marc S. Kirschner, the bankruptcy trustee of failed commodities brokerage Refco Inc. in a $2 billion suit against the company's former lawyers at Mayer, Brown, Rowe & Maw, among others.

Indeed, the journey of Enron Corp. law firm Vinson & Elkins illustrates the shifting landscape of law firm liability. The Houston-based firm vigorously fought the high-profile securities fraud suit brought against it by former class action king William S. Lerach, getting off scot-free with a voluntary dismissal in January 2007. But last year Vinson & Elkins quietly paid $30 million to Enron's bankruptcy trustee, who never formally filed suit against the firm.

Law Firms as Targets

While securities class actions are brought on behalf of shareholders, bankruptcy trustee suits are brought for the benefit of creditors, the biggest of which are usually banks and investment funds. These creditors have grown more aggressive about recouping losses, lawyers say, with trustees acting accordingly. "

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Will US Supreme Court defer to Attorneys?

This post is about bad lawyering.  While not legal malpractice [in the sense that it mainly involves criminal defendants who cannot sue their attorney in New York or in most jurisdictions]. it is about the US Supreme Court letting the defendant hang while excusing the poor attorney performance. 

"The U.S. Supreme Court in 1984 established new standards for assessing whether a lawyer's performance was so bad that his client's right to a fair trial was compromised.

"An accused is entitled to be assisted by an attorney, whether retained or appointed, who plays the role necessary to ensure that the trial is fair," the Court proclaimed in Strickland v. Washington, 466 U.S. 668 (1984).

Twenty-three years later, however, many experts say that the promise of Strickland has gone unfulfilled, with underpaid and overwhelmed lawyers still allowed to give indigent defendants subpar representation.

And now criminal defense lawyers fear the high court is starting to retreat from Strickland itself. On Nov. 5, it agreed to consider Arave v. Hoffman, an Idaho case that will weigh the obligation of lawyers to explain to their clients the consequences of not accepting a plea agreement. "

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Massey Verdict Overturned In West Virginia; Will Legal Malpractice Suit Follow?

The Massey Coal company case in West Virginia with its sister case in Virginia was a $ 50 million verdict, with a legal malpractice case arising from a similar loss in Virginia and the failure appropriately to file an appeal.  From this post both seem doomed.

"Posted on November 22, 2007 by Jeffrey V. Mehalic 
Yesterday was the last day of the Supreme Court of Appeals of West Virginia’s Fall Term, and the Court released several opinions, including its decision in Caperton v. A.T. Massey Coal Company, Inc., No 33350. (The Westlaw opinion is not available yet, so the link is to the PDF version on the Court’s website.)

At stake was the $50 million verdict in the plaintiffs’ favor, based on the jury’s finding that A.T. Massey Coal Company, Inc. and several of its subsidiaries intentionally interfered with and destroyed Hugh Caperton’s business. With accrued interest since the verdict in 2002, the plaintiffs’ judgment had grown to approximately $76 million. Here’s my post from last month when the case was argued.

In a 3-2 decision written by Chief Justice Robin Davis, the Supreme Court reversed the verdict and remanded the case to the Circuit Court of Lincoln County with directions to enter an order dismissing with prejudice the plaintiffs’ claims against the defendants. The Court identified two grounds for the reversal. First, the circuit court should have granted the defendants’ motion to dismiss based on a forum selection clause contained in “a contract directly related to the conflict giving rise to the instant lawsuit.” Second, assuming that the circuit court’s ruling on the forum selection clause was not erroneous, the Supreme Court found that the doctrine of res judicata based on an action that had been litigated in Virginia.

The Virginia litigation to which the Court refers is the plaintiffs’ 1998 suit against a Massey subsidiary in the Circuit Court of Buchanan County, Virginia, which alleged breach of contract and breach of the duty of good faith and fair dealing. Only the breach of contract claim was considered by the jury, which returned a verdict in the plaintiffs’ favor for $6 million. That verdict resulted in Massey suing its Virginia counsel for malpractice, on the grounds that they failed to sign the notice of appeal, which resulted in the dismissal of the appeal and the affirmance of the verdict."


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Client Pays Double Contingent Fee in Legal Malpractice

While it is rare, on ocassion, a client may be ordered to pay double fees in a contingent fee case. Here is an example:

Greenberg v. Cross Island Industries Inc., 05CV6026
Decided: October 16, 2007
District Judge Arthur D. Spatt


Alpert & Kaufman, LLP
First Attorneys for the Plaintiff

Gair, Gair, Conason, Steigman & Mackauf
Second Attorneys for the Plaintiff

Judge Spatt

"What began as a routine settlement in a personal injury action has evolved into a contentious battle between plaintiffs' previous and present counsel over the proper apportionment of legal fees. Here, however, in a somewhat unusual circumstance, the clients, rather than present counsel, are to pay the fee of previous counsel separately and in addition to the fee of present counsel

The Gair Firm asserts that Alpert & Kaufman was dismissed by the Greenbergs for cause and is not entitled to any legal fee. See Garcia v. Teitler, 443 F.3d 202, 212 (2d Cir. 2006); Friedman v. Park Cake, Inc., 34 A.D.3d 286, 287, 825 N.Y.S.2d 11, 12 (1st Dep't 2006) (stating that where an attorney is discharged for cause, she is entitled to no compensation).

 Evidence of a general dissatisfaction with an attorney's performance or a difference of opinion between attorney and client does not establish that the attorney was discharged for cause absent some evidence that the attorney failed to properly represent the client's interest. Garcia, 443 F.3d at 212; Costello v. Kiaer, 278 A.D.2d 50, 50, 717 N.Y.S.2d 560, 561 (1st Dep't 2000). Indeed, "[a]ttorney-client relationships frequently end because of personality conflicts, misunderstandings, or differences of opinion having nothing to do with any impropriety by either the client or the lawyer." Klein v. Eubank, 87 N.Y.2d 459, 663 N.E.2d 599, 640 N.Y.S.2d 443, (1996); see also D'Jamoos v. Griffith, 2006 WL 2086033, at *5 (E.D.N.Y. July 25, 2006).

Something more than a personality conflict or difference of opinion is required to establish discharge for cause and '"[c]ourts typically find a discharge for cause where there has been a significant breach of legal duty.'" D'Jamoos, 2006 WL 2086033, at *5 (quoting Allstate Ins. Co. v. Nandi, 258 F. Supp. 2d 309, 312 (S.D.N.Y. 2003)). For example, in an extreme case, the court held that plaintiff's counsel was discharged for cause where it kept hidden from its client the fact that it had allowed the statute of limitations to expire. In re Spatola, 196 Misc. 2d 666, 668, 763 N.Y.S.2d 463, 465 (Sur. Ct. Richmond Co. 2003) ("When an attorney deliberately fails to disclose to a client critical information, it weakens [the fundamental] trust and confidence and erodes the relationship to the point that the client . . . has cause to discharge the attorney."). Here, there is no evidence that the conduct of the Alpert Firm breached the trust and confidence so crucial to the attorney-client relationship.

Instead, it is more likely, that the Alpert Firm was discharged as a result of a difference of opinion on how the case ought to be conducted.The Court notes that in Vallejo v. Builders for Family Youth, 2007 WL 10386 (Sup. Ct. Kings Co. Jan. 2, 2007), the court found that because the letters to previous counsel regarding his discharge never mentioned cause and referred to the matter of his compensation, counsel was not discharged for cause. Vallejo, 2007 WL 10386, at *5; see also Realuyo v. Diaz, 2006 WL 695683, at *7 (S.D.N.Y. March 17, 2006) (finding no evidence of discharge for cause because, among other things, the client's termination letter to attorney failed to specify the reason for termination and requested an accounting of the lawyer's fee).

There is an unusual twist in the fee arrangement between the Gair Firm and the Greenbergs. In the covering letter from Anthony H. Gair to Barry F. Greenberg dated February 22, 2006 it is stated: "It is understood that you and your wife will be solely responsible for any fees awarded your out-going attorneys. We agree that we will represent you in any fee dispute with the out-going attorneys at no additional cost." In addition, the Gair Firm's retainer statement, dated March 3, 2006, filed with the Office of Court Administration states that "[a]ny fees awarded to the out-going Attorneys, Alpert & Kaufman, will be the sole responsibility of the plaintiffs." (Retainer Statement of Robert Conason (March 3, 2006)). This agreement is contrary to the usual situation, in which the prior attorney would be paid its portion from the fee received by the incoming firm, rather than by the client.

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Collateral Estoppel in Legal Malpractice

It's a trap for the unwary.  We've written about this here on the blog, in the New York Law Journal and elsewhere.

Fee determinations in legal fee disputes are determinative of a later legal malpractice case.  Let's take an example.  Attorney does horrible job, loses case for plaintiff on discovery preclusion grounds.  Let's assume it is clearly malpractice.  Attorney and client get in a dispute over fees.  Attorney claims $ 100,000 in fees.  At arbitration the award is for $ 100,   Huge negative for attorney?  Yes, but any award of fees, even one so small, necessarily determines that there can be no malpractice case, because no fee may be awarded if there is a determination of legal malpractice.

Here is an example:   Wallenstein v Cohen ,2007 NY Slip Op 09023 ,Decided on November 13, 2007 ,Appellate Division, Second Department .   We agree with the defendants that all of the allegations in the complaint were "reasonably and plainly comprehended to be within the scope of the dispute submitted to arbitration" (Altamore v Friedman, 193 AD2d 240, 247). The determination fixing the value of the defendants' services necessarily determined that there was no malpractice (see Blair v Bartlett, 75 NY 150, 154; Koppelmann v Finkelstein, 246 AD2d 365, 366; Altamore v Friedman, 193 AD2d at 246; Chisolm Ryder Co. v Sommer & Sommer, 78 AD2d 143, 145-146). Accordingly, the Supreme Court should have granted that branch of the defendants' motion which was pursuant to CPLR 3211(a)(5) to dismiss the complaint as barred by arbitration and award and by the doctrine of collateral estoppel


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Pleading and Dismissal in DC Legal Malpractice Cases

Here is a textbook discussion of pleading and dismissal by the District of Columbia Court of Appeals in Flax v. Schertler.  The Court agreed with plaintiff that she had sufficiently alleged failure to bring alternative fraud and fiduciary causes of action in the underlying case, and that she be given additional discovery before motions to dismiss were to be heard. Posted In Blog Articles , Blog Articles
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Legal Malpractice Coverage Case in Mississippi

Burton v. Continental Cas. Co., 2007 WL 2669201 (S.D. Miss. Sept. 6, 2007).

Wiley Rein reports:

"The United States District Court for the Southern District of Mississippi, applying Mississippi law, has granted summary judgment for an insured attorney, holding that his insurer was obligated to defend the attorney where the underlying complaint alleged misconduct that occurred both before and after the retroactive date in the attorney's professional liability policy. Burton v. Continental Cas. Co., 2007 WL 2669201 (S.D. Miss. Sept. 6, 2007).

The insurer issued a duty-to-defend professional liability policy to the attorney with a retroactive date of November 26, 2001. The policy included a "Retroactive Exclusion Clause Endorsement," which provided that the grant of coverage was available only if "the act or omission occurred on or after 11/26/2001."

Former clients filed suit against the attorney in December of 2002 in connection with his representation of them in a lawsuit against a life insurance company. The underlying plaintiffs alleged that, prior to November 2001, the attorney and other associated lawyers attempted to force plaintiffs to settle their case through a settlement pursuant to which the attorney would receive a separate sum of $2.9 million. The underlying plaintiffs also alleged that the attorney refused to return the case files when asked to do so in November 2002. The insurer denied coverage and declined to defend the attorney in the underlying action. The attorney subsequently filed the instant action. The court also rejected the insurer's contention that because the allegations in question related to conduct that occurred after the underlying plaintiffs fired the attorney, any misconduct in 2002 was not in connection with provision of "legal services."

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Exclusion of Legal Malpractice Coverage in a Home Sale Case

Another write up from Hinshaw:

Richard H. Milgrub v. Continental Casualty Company, 2007 WL 625039 (W.D. Pa.).

The attorney-insured in this case sold his home and represented himself, his wife and the buyers in the transaction. The buyers subsequently sued the attorney alleging breach of fiduciary duty and professional negligence. After the attorney’s professional liability insurance carrier attempted to exclude coverage based on the subject policy’s “contractual liability” exclusion, the attorney filed a declaratory judgment action for a coverage determination against the carrier. Finding that the breach of fiduciary duty allegations were not causally based on the contract transaction, the court ordered the carrier to provide coverage for them.

Richard Milgrub and his wife entered a contract on September 9, 2003 to sell their residence to Robert and Shellie Brown (the Browns). The Browns believed Milgrub was acting as the legal representative for both parties in the deal. In November 2004, the Browns sued the Milgrubs alleging: (1) fraudulent representation; (2) claims under the Pennsylvania Sellers Disclosure Act and the Unfair Trade Practices Consumer Protection Act; and (3) claims for professional negligence and breach of fiduciary duty. Milgrub reported the claim to his professional liability provider, the Continental Casualty Company (Continental). Continental denied coverage and Milgrub filed a declaratory judgment action. Both parties in that case moved for judgment on the pleadings.


"The “determinative question” for the court was whether any specific aspect of the breach of fiduciary claim was independent of an alleged conflict of interest, in which case coverage would obtain. The allegations in (1), (3) and (5) above relied on a conflict of interest arising out of the real estate contract. However, the court found that the allegations in (2) and (4) were independent of any alleged conflict based on the contract. For that reason, there would still have been coverage under the policy language covering claims if liability would have attached in the absence of the contractual agreement. The court thus held that there was no coverage for the claims arising out of the contractual obligations, but that there was for the claims arising out of the breach of fiduciary duty allegations.

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Collectiblity in Legal Malpractice and an Illinois Case

From Hinshaw:  In an Illinois case where the legal malpractice complaint was dismissed, the court went too far in Visvardis v. Ferleger, ___ Ill. App. 3d ___, 873 N.E.2d 436 (1st Dist. 2007)

"Illinois’ First District Appellate Court recently held that a trial court erred when it went outside of the pleadings to grant a 735 ILCS 5/2-615 motion to dismiss plaintiff’s legal malpractice complaint. The appellate court found fault with the trial court’s having based its decision on a conclusion that plaintiff would not have won the underlying lawsuit even if defendant had not committed malpractice. The appellate court further held that plaintiff’s complaint alleged sufficient facts from which it could be inferred that the defendants in the underlying lawsuit had sufficient assets to pay damages on the date of alleged malpractice (or thereafter"

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Insurer Denies Legal Malpractice Coverage over a Client Gripe

Legal Malpractice insurance is a vital component of doing business in New York.  What attorney goes to sleep comfortably without it?  Yet, carriers are always looking for a way out.  Here is an example of the latest twist in NJ from Law.Com:

"A legal malpractice carrier is taking a hard line on the level of client grumbling that puts a lawyer on notice of a potential claim that must be reported.

The carrier's declaratory judgment suit, filed Tuesday in federal court in Trenton, N.J., could cause sleepless nights for any lawyer who has ever had to deal with a client disappointed by the outcome of a case.

General Star National Ins. Co. says a lawyer's silence about a client’s displeasure over the size of a settlement offer in a wrongful-death case and her threat to consult with separate counsel was enough to void malpractice coverage.

The carrier cites language in its policy, common to legal malpractice policies, that defines a claim to include "knowledge by an insured of any event or circumstance which could reasonably be expected to result in or lead to a claim being asserted against an insured, provided that the insured gives the company written notice of such event or circumstance prior to the termination date of the policy period .  William Voorhees Jr. of Morristown, N.J., says:""The prior knowledge exclusion is the exclusion du jour of the insurance industry," he says. "The denial of claims because of the prior knowledge exclusion has increased dramatically in the past four to five years. It is working, if for no other reason than it has the factual effect of driving down the malpractice plaintiff's demand."


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Huge Montana Legal Malpractice Verdict Upheld on Appeal

It centers around a Charles M. Russell statue; what could be more quintessentailly Western.  Real or Fake?  The outcome of this case is a $1 Million verdict against the attorneys and $ 9 Million in Punitive damages.  Hinshaw reports:

"Steve Morton and the international law firm that represented him had very strong, credible grounds to believe that famed artist Charles M. Russell’s signature on a painting that Morton owned was a forgery. But, represented by an “of counsel” attorney of the law firm, Morton nonetheless sued W. Steve Seltzer, an art authenticator, who had refused to recant his professional opinion that the painting was not an authentic painting by Russell. The underlying case was dismissed for lack of expert support for Morton’s position, Morton acknowledged that he could not prevail, and the law firm representing him was found to have committed discovery abuses by withholding key evidence. Seltzer subsequently sued Morton and his law firm for malicious prosecution. The Montana Supreme Court upheld a trial court judgment for $1.1 million in compensatory damages and $9.9 million in punitive damages against the firm.

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Gramp's Tommy Gun and Legal Malpractice

Our recurring theme is that legal malpractice may pop up anywhere in the world/attorney interaction.  Here is an interesting situation we never envisioned.  What does an estate attorney do about vintage firearms?  What about that WW2 tommy gun up in the attic?

"Estate Planning for Grandpop's Gun in the Chest
Joshua Prince, a law student has written another article on NFA Firearm issues and estate planning.
To answer these and other question about Firearms and Estate Planning Please read his article Estate Planning for Grandpop's Gun in the Chest. His article deals with the requirements, benefits, and detriments of registering a weapon as an individual person, corporation , or trust. Many of the issues hold trust for Florida Gun Trusts but you should check with a Florida Gun Lawyer to verify what makes sense in your particular situation. His article begins:

As an estate attorney, how do you handle the planning of an estate, which includes National Firearms Act [NFA] firearms? What if your client asks you, prior to his/her purchase of a NFA weapon, what is the best form of ownership, with long term estate planning in mind?This issue may plague estate attorneys, leaving them to scratch their head in bewilderment as to the correct course of action. More importantly, a probate attorney may be flirting with malpractice, since the registration of NFA weapons is mandatory and ignorance is not a defense

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California Disclosure of Legal Malpractice Coverage - An Update

Some states require disclosure of legal malpractice coverage [really non-coverage.]  New York does not.  California is debating the issue.  From Law.Com:

"Deciding whether to require that attorneys tell clients when they don't have malpractice insurance is proving extremely difficult for the California Bar Board of Governors.

After a confusing and contentious discussion Friday, board members unanimously punted a controversial proposed amendment back to agency staffers and the Committee on Regulation, Admissions and Discipline to discern whether it would fly legally.

The amendment would clarify when exactly lawyers would have to disclose their malpractice insurance status to clients, by linking disclosure with state Business and Professions Code §6147 and 6148. The codes require attorneys to draft written fee agreements for both contingency and non-contingency work that could cost clients more than $1,000. Exceptions include workers' compensation cases and lawyers working for government agencies.

Based on his visibly irked reaction when the Board of Governors gave the amendment conceptual approval by a narrow 10-9 vote, State Bar President Jeffrey Bleich likely hopes the amendment will eventually get a thumbs down. He huffily denounced the proposed change as "problematic," saying it could allow attorneys to "commit a fraud" by insinuating they're covered by malpractice insurance when in reality they aren't. "

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Pillsbury Winthrop In Another Bankruptcy Conflict

From Law.Con [sorry, we reprinted the entire blurb here]:

"Pillsbury Caught In Another Bankruptcy Conflict

Perhaps Pillsbury Winthrop Shaw Pittman needs to reevaluate its system for screening conflicts and disclosing material developments that may impact bankruptcy claims. Back in March, we mentioned that Pillsbury was the subject of a motion filed by the U.S. Trustee to disqualify the firm from representing Sonic Boom and to force it to disgorge fees earned. Now, according to this article, Pillsbury has been accused of another confict. Apparently, Pillsbury failed to disclose an agreement between the firm and directors of its clients, extending the statute of limitations on a potential malpractice claim. Creditors argue that this situation should have been disclosed to the court.

The California Business Bankruptcy Blog explains the significance of the case to bankruptcy practitioners:

In the first instance, Pillsbury lost the business of representing SonicBlue in the case, and thus its presumable large revenue stream. Now, if the accusation comes to anything, Pillsbury stands to lose money in the form of damages for losses to the corporation due to the directors' actions. Yikes.

It is important for bankruptcy counsel to always bear in mind the competing constituencies involved in every bankruptcy proceeding. What may be a good idea in garden variety civil litigation, may be a devastating decision in the bankruptcy arena. Deals with clients in business litigation such as that between Pillsbury and the SonicBlue board may be perfectly reasonable in most situations, but in bankruptcy, where the interests of creditors are paramount in a debtor-in-possession situation, such a deal undermines the entire process because Pillsbury could not be expected to fully pursue claims against the board if Pillsbury was potentially on the hook for any damages by agreement. Being able to recognize hidden conflicts as well as the obvious ones is essential to a successful bankruptcy practice, as the SonicBlue representation highlights.

If there's anything else that Pillsbury hasn't revealed about this matter, now would seem to be the appropriate time, indeed, the last chance, to disclose it.

Posted by Carolyn Elefant on November 14, 2007 at 02:23 PM "

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Insurers, Reinsurers and Legal Malpractice

Arguments between insurers and reinsurers are a fertile area of litigation.  Important decisions on attorney-client privilege have come from these cases, and in this particular report, Federal Ins. Co. v North Am. Specialty Ins. Co. ,2007 NY Slip Op 08391 ,Decided on November 8, 2007 ,Appellate Division, First Department , the issue of privity between the attorneys defending a personal injury case and the re-insurer is discussed.

Here, there is no privity between them, and the case is dismissed.  "Plaintiff Federal Insurance Company, claiming it should have contributed only $1,000,000 to the settlement, sues individually and as subrogee of Galaxy General Contracting Corp. to recoup half of the $2,000,000 it paid as Galaxy's excess liability insurer to settle an underlying personal injury action in which Galaxy was a named defendant. In this action, Federal named as defendants Rivkin Radler, LLP and Bruce A. Bendix (collectively Rivkin), who represented Galaxy in the underlying action, asserting legal malpractice, and also Allied World Assurance Company (U.S.) Inc., formerly known as Commercial Underwriters Insurance Company (CUIC), Galaxy's primary liability insurer, asserting as against it bad faith, indemnity and legal malpractice.

Federal's fourth cause of action, against both CUIC and Rivkin, alleged legal malpractice. Without asserting a client relationship with Rivkin or alleging the existence of privity or any allegations of "near privity," Federal claimed merely that CUIC and Rivkin owed Galaxy a duty to defend. Federal further alleged that Rivkin was negligent in opposing the owners' motion for summary judgment on their indemnification claims by failing to assert antisubrogation or to apprise Federal in a timely manner that the owners had asserted such cross claims. According to [*4]the complaint, had Rivkin raised the antisubrogation rule, the court would have "limited any right of indemnity to the amount above the $1,000,000 limit of CUIC's OCP." Federal's fifth cause of action, also against CUIC and Rivkin, alleged a similar theory of liability, but as Galaxy's subrogee.

None of the determinations reached to justify denial of Rivkin's motion withstands scrutiny, and its dismissal motion should have been granted. To state a cause of action for legal malpractice, a complaint must allege the negligence of the attorney, that the negligence was a proximate cause of the loss sustained, and actual damages (Leder v Spiegel, 31 AD3d 266, 267 [2006], affd 9 NY3d 836 [2007]). In addition, "New York courts impose a strict privity requirement to claims of legal malpractice; an attorney is not liable to a third party for negligence in performing services on behalf of his client"
(Lavanant v General Acc. Ins. Co., 164 AD2d 73, 81 [1990], affd 79 NY2d 623 [1992]; see also D'Amico v First Union Natl. Bank, 285 AD2d 166, 172 [2001], lv denied 99 NY2d 501 [2002]). Thus, absent an attorney-client relationship, a cause of action for legal malpractice cannot be stated (Baystone Equities, Inc. v Handel-Harbour, 27 AD3d 231 [2006]; Linden v Moskowitz, 294 AD2d 114, 115 [2002], lv denied 99 NY2d 505 [2003]).

In the instant matter, there is no privity between Rivkin and Federal; Rivkin's duty in the Bermejo lawsuit ran only to its client, Galaxy, and not to any third party ."

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Attorney Judgment Rule in Michigan

The Attorney judgment rule holds that no attorney may be held liable for a strategic decision which was reasonable both objectively and subjectively. This may include choices of questions at trial, selection of experts, choices of evidence.

Here is a story from Hinshaw, of a Michigan Case: Bowman v. Gruel Mills Nims & Pylman, LLP, 2007 WL 1203580 (W.D. Mich. April 24, 2007)

"A federal district court in Michigan has held in a legal malpractice case that an attorney was precluded from obtaining summary judgment under the “attorney judgment rule” because he violated the Michigan Rules of Professional Conduct requirement that he keep his client informed of important decisions. Bowman retained attorney Gruel to seek maximum retirement benefits. Gruel consulted with an employee benefits specialist, attorney Stevenson, who advised that if Gruel sought to recover the retirement benefits by asserting causes of action under the Employee Retirement Income Security Act (ERISA), the claim would face “a number of significant obstacles.”

Gruel filed suit in state court seeking recovery solely under a state law theory of breach of contract. Knape & Vogt contended that ERISA preempted the claim. In response, Gruel contended that Bowman had been wrongfully denied benefits in violation of § 1132(a)(1)(B) of ERISA. The case was tried to the state court judge, who applied ERISA to Bowman’s claim. The judge ruled that under ERISA, the Administrative Committee’s decision to deny maximum retirement benefits was not “arbitrary and capricious.” The trial judge then applied a theory that Gruel had not raised, and ruled that Bowman was entitled to maximum retirement benefits under ERISA based on a promissory estoppel theory.

A Michigan appellate court reversed the trial court’s award of benefits, ruling that the trial court lacked subject matter jurisdiction over § 1132(a)(3) of ERISA, which was the basis for the promissory estoppel claim. Instead, the appellate court held, state courts have subject matter jurisdiction only over claims under § 1132(a)(1)(B) of ERISA, which applies to wrongful denial of benefits. The Michigan Supreme Court denied leave to appeal.

Bowman sued Gruel for legal malpractice for seeking recovery under a state law breach of contract claim rather than under ERISA, and for failing to advise him that recovery would not be sought under ERISA. Gruel moved for summary judgment based on the “attorney judgment rule” and on the grounds of causation. The court ruled that Gruel was not entitled to summary judgment under the attorney judgment rule, but that he was entitled to partial summary judgment on the ground of causation. "

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Legal Malpractice Case against Kaye Scholer Dismissed

This case is all about Long Island law firms and a case against Computer Associates and Kaye Scholer.  Plaintiff is reprsented by Tom Liotti, who is the defendant in a libel case we reported yesterday.  Computer Associates and its employees are represented by anlther Long island law firm, Lynn & Gartner.  Farrell Fritz rounds out the LI lineup.

Salvatore v. Kumar, 2007 NY Slip Op 08435  Case of legal malpractice dismissed  against the law firm. "The defendants Kaye Scholer and Parver correctly contend that, inasmuch as they were never retained by the plaintiffs Wright and Press, the complaint should have been dismissed insofar as asserted against them by those two plaintiffs.

Further, the defendants Kaye Scholer and Parver also correctly contend that the Supreme Court erred in denying that branch of their motion which was for leave to renew their motion to dismiss the complaint insofar as asserted against them pursuant to CPLR 3211(a)(7), based on the dismissal of the underlying causes of action alleging defamation, wrongful termination, promissory estoppel, and civil conspiracy. We agree with the contention of Kaye Scholer and Parver that dismissal of the underlying causes of action requires dismissal of the legal malpractice claim asserted against them. With the dismissal of those causes action, the plaintiff Salvatore cannot allege that "but for" Kaye Scholer's and Parver's alleged legal malpractice, Salvatore was wrongfully terminated and defamed and, therefore, cannot allege a legally cognizable injury ."

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Surfing Chicks and Legal Malpractice

Legal Malpractice can pop up in any number of situations, as we have said just last week.  Here is a short blurb on a big dollar legal malpractice case in California, concerning Surfing Chicks, Paul Hastings, Kat House and trademarks.

"Too many ‘Surf Chicks’?

Los Angeles-based law firm Paul Hastings, Janofsky & Walker LLP has been hit with a $30 million legal malpractice suit by a surfing-gear maker that hired it to trademark the phrase “Surf Chick.” The suit by Ventura, Calif.-based Kat House Productions claims Paul Hastings failed to register trademarks after saying it had done so. The suit, in Manhattan federal court, says Christian Dior SA was able to copy the “Surf Chick” mark because of the alleged negligence of the firm and several attorneys. “Had defendants properly applied for, and diligently prosecuted, the trademark applications, Christian Dior would not have been able to mimic and copy plaintiffs’ mark,” the complaint says. "

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Legal Malpractice, Appeal, Retrial and Settlement

Hinshaw reports on Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 2007 WL 1213712 (N.Y. April 26, 2007)   We discussed this case last April.

"The New York Court of Appeals recently held that a client was entitled to recover attorneys’ fees and expert witness costs incurred when his attorney’s error forced him to appeal an adverse verdict and to try the case a second time. The client was entitled to recovery, notwithstanding that a successful settlement was obtained during the second trial.

While walking across a road, the client was struck and injured by an automobile whose driver was making a left turn. A traffic signal controlled the intersection in which the accident occurred. The client retained attorney Corker to sue the driver. At trial, there was conflicting testimony as to whether the client was in the crosswalk at the time of the accident. At Corker’s request, the trial court gave an instruction based on N.Y. Veh. & Traf. Law § 1151, which addresses intersections without operational traffic signals. Section 1151 provides that pedestrians have the right of way in crosswalks, but have a duty not to “suddenly leave a curb or other place of safety and walk or run into the path of a vehicle which is so close that it is impractical for the driver to yield.” A jury found the client and the driver each 50% at fault, and awarded damages of $255,000.

The client retained a new lawyer, who filed a motion to set aside the verdict on the ground that the jury should have been instructed based on N.Y. Veh. & Traf. Law § 1111, which applies to intersections controlled by traffic signals. Section 1111 provides that vehicles “must yield the right of way to other traffic lawfully within the intersection or an adjacent cross walk.” The trial court denied the motion, reasoning that the client’s initial counsel had requested an instruction based on N.Y. Veh. & Traf. Law § 1151. The appellate court reversed, ruling that the client was entitled to a new trial because instructing the jury based on § 1151 was an error, and it affected the jury’s assessment of the client’s fault.

A retrial resulted in a jury’s finding that the driver was solely at fault. Before the jury returned a verdict on damages, the parties settled for $750,000. The client then filed a legal malpractice action against his initial attorney, alleging negligence in requesting an instruction based on § 1151 rather than N.Y. Veh. & Traf. Law § 1111. As damages, plaintiff sought to recover: (1) the legal fees that he incurred in moving to set aside the verdict in the first case, and in appealing the verdict; (2) the expert witness fees that he incurred in the second trial; and (3) $190,000 as an amount representing interest that would have accrued had he obtained a $750,000 recovery in the first trial.

The trial court granted partial summary judgment in favor of plaintiff, ruling that he was entitled to recover $28,703.27 as reimbursement for the attorneys’ fees incurred in obtaining a new trial and the expert fees incurred in the second trial. The trial court denied the motion with respect to plaintiff’s claim for interest. An appellate court reversed, and reasoned that the client did not sustain any actual damages because he had obtained a substantial recovery in the second trial. The Court of Appeals of New York reinstated the trial court’s ruling. "

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AIA forms and Pop Up Legal Malpractice

Legal Malpractice can pop up in any number of situations.  Here is a totally unexpected possibility.  In a Blog blurb the Construction Attorney Blog talks about this problem:

"Much is being written about the 2007 AIA Documents, which were released in early November. One of the much-discussed differences in these documents is the fact that arbitration is no longer the default dispute resolution mechanism, being replaced by a "check-box" system whereby three options are provided: arbitration, litigation and "other." If none of the boxes is checked, then litigation is the default mechanism, following mandatory mediation.

It was with great interest that I opened the new documents using the AIA's Electronic Documents software system. I immediately printed out several of the new documents, including various owner-architect agreements and an owner-contractor agreement. At this point, I had not filled in anything. I was, therefore, astonished to find that the "arbitration" box had been checked on all of the documents where that option appeared. Thinking that I had made some type of mistake, I again started a brand new document and made sure not to check anything. Once again, the arbitration choice was checked.

However, most users today are using the electronic documents and may not be aware that they actually need to check the litigation box if that is what they intend. If they just read the articles that claim that litigation is the automatic "default," they may not even look at this provision when drafting the documents if they actually want to have litigation as the real default. They may be surprised years later to receive a demand for arbitration. If they are attorneys, they may be open to a claim for legal malpractice if their client insisted on not using arbitration and they relied on the "default" litigation story.

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Blame the Client in This Legal Malpractice Case

It is usually defendant's strategy to blame the client, at least to some extent.  Here in this case, even the court joined in.  Plaintiff was in an auto accident, hired an attorney who filed the complaint, and then gave up on discovery responses. Case dismissed, and incidently, the attorney was suspended, for an unrelated case.

Attorney lied to client, who eventually discovered the truth.  Outcome?  She sues attorney, wins uncollectible judgment, loses her attempt to revive auto accident suit.  Court says :

"Bland retained Graham in July 1998,” Sharer wrote. “It was not until December 2004, more than six years later, that she finally grew sufficiently suspicious of Graham’s inaction and failure to respond to her repeated calls, over several years time, to contact the Circuit Court directly to inquire into the status of her case. We agree with the trial court that Bland’s own actions do not rise to the level of ordinary diligence, nor did she satisfy her duty to keep herself informed of the status of her case."

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A Mistake and A Shortcoming in a NJ Legal Malpractice Case

Here is a case in which a husband's creditors executed upon his wife's jewlery.  Attorney is hired and the case ends with her having to give up 1/2 of the booty. Husband then sues the attorney.  Guess?  He hired the attorney for his wife, as a nominal defendant, since it was his creditors going after the goods.

Mistake?  In NJ it seems always to be a mistake not to file an affidavit of merits with the complaint, whether the mistake is open and obvious or not. 

The shortcoming?  No privity.  The outcome?  This case did not even get a written opinion.

"After a careful review of the record and briefs, we are satisfied that plaintiff's arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). The motion for summary judgment was properly granted for the reasons set forth by the trial judge on the record. We add only the following comments on the spoliation claim which was not expressly addressed by the trial judge.

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Martimonial Legal Malpractice Case Dismissed

Here is a case from the Bronx in which a matrimonial client unsuccessfully sues her attorney.  Case is dismissed on the statute of limitations.  This was a pro-se plaintiff  v. pro-se defendant case.

"From June 12, 2000 to September 7, 2000, Plaintiff KINBERG retained Defendant GARR to represent her in her matrimonial Action, (which had been pending since 1992). This is evidenced by the parties' retainer agreement which provides that the legal services that GARR would be providing would be in connection with the then-pending Action, entitled Kinberg v. Kinberg, Index No.: 72304/1992, in New York County Supreme Court. (See Plaintiff's Exhibit "C"). The matter was scheduled for trial, on the equitable distribution of the marital assets, before the Hon. Justice Jacqueline Silbermann, on September 7, 2000, when the parties entered into a settlement Agreement, and KINBERG took the stand where she was allocuted on the Agreement. KINBERG testified that she understood the Agreement, wanted to accept it, and was satisfied with the services of her Counsel.

The rest of the decision documents the 6 year trail of litigation which ensued.  Plaintiff was successfully sued by the attorney, then she lost an action against her former husband, then lost an action against the attorney, and now, once again, loses.

If the attorney had not sued for his fees, would there have been 5 more years of litigation?

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A Trap Avoided

Sidewalk trip and fall cases have special problems associated with them.  As municipalities grew tired of being sued, they enacted strict notice rules, which, along with the General Municipal Law filing procedures, made for a maze.

Here is an example [from Newsbriefs of the NYLJ] of a case in which the town required plaintffs to file their notice in a special place, and then attempted to defend saying that the plaintiff followed the towns rule!

"In a case of first impression, a Brooklyn appeals panel has ruled that a municipality is estopped from claiming a lack-of-notice defense in sidewalk trip-and-fall cases if its employee instructs a member of the public to provide notice of a condition to the wrong department but the notice is nonetheless received by the department responsible for the record-keeping, inspection and repair of sidewalks. In a case involving a plaintiff who fell when her shoe allegedly was caught on an "uneven slab of sidewalk," the Town of Huntington denied receipt of prior written notice of the defect. Supreme Court Justice Gary J. Weber of Suffolk County (See Profile) denied the town's cross motion for summary judgment. Last week, in a 13-page opinion by Justice Mark C. Dillon (See Profile), the Appellate Division, Second Department, affirmed. "The Town, having instructed [a complainant] to send his written notice . . . to the director of the [Department of Engineering Services], cannot now be permitted to use that instruction as a shield against liability," Justice Dillon wrote. "To do so would result in an injustice to any claimant where there has been compliance with a clear directive, from a Town agent employed by the municipal department that maintains sidewalk complaint records, to file written notice of a dangerous sidewalk condition with someone other than the statutory designee." Gorman v. Town of Huntington, 06-05584, will be published Thursday

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A Litany of Errors in a Personal Injury Bankruptcy Case

When a person who has a personal injury case files bankruptcy, they, in essence, give up that asset to the Trustee in Bankruptcy.  If the recovery is greater than the creditor's claims, then the plaintiff may get some money.  If not, then the entire proceeds go to the creditors.

Going along with this, the trustee in bankruptcy becomes the plaintiff.  Personal injury attorneys must play by bankruptcy rules, and, for example, must be permitted to represent the trustee by court order, any settlements are subject to court order, as are all fees, regardless of the retainer agreement.

Here is a case in which the personal injury attorney was ousted for simply not following the rules. "In April 2004, Ms. Smith filed for bankruptcy. She had debts of $14,000 and a single potential asset: a personal injury claim based on a sledding accident in which she was blinded in one eye. According to the circuit, "all parties agree that if the personal injury claim is successfully prosecuted, recovery would likely far exceed creditors' claims against Smith."

Ms. Smith retained Mr. Schwartz for the personal injury case with the initial approval of bankruptcy trustee Robert Geltzer. But the trustee later slammed Mr. Schwartz for naming Ms. Smith, and not Mr. Geltzer, as plaintiff in the action and then stalling for more than nine months to change the caption in the case while he brought in another lawyer without court approval.

The filing of the personal injury action under Ms. Smith's name, the circuit said in Schwartz v. Geltzer, 06-4450-bk and 06-5323-bk, "was the first in a litany of errors that, when viewed together, reflect at best a lack of understanding of the bankruptcy process and at worst an effort to circumvent its requirements."

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What Does Legal Malpractice Insurance Cover?

Here is a story from Texas about a legal malpractice [or is it?] case in which the insurer asks the court to determine that it owes no defense.  The reason is not the usual "no notice' or "fraud in the application."  In this particular instance, the insurance company believes that the behavior complained of is not legal malpractice, but some other variant of uncovered wrong.

"A Kansas-based insurance company wants a declaration that it does not owe a defense to Fort Worth firm Cotten Schmidt in a separate suit filed against the firm. In Westport Insurance Corp. v. Cotten Schmidt LLP, et al., filed on Nov. 2 in U.S. District Court for the Northern District of Texas, Westport Insurance Corp. alleges that a legal malpractice policy that it issued to Cotten Schmidt does not cover a suit brought by Empire Equipment International Inc. and Robert Russell on Sept. 4, 2007, in Tarrant County district court against Cotton Schmidt alleging wrongful levy, execution and sale, and conversion. Cotten Schmidt and two of the firm's partners, Westport's suit alleges, "are not alleged to have committed those wrongful acts in the rendition of legal services. . . . "

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Meta Data and Litigating Your Case

Arising in the nature of inadvertant attorney client privilege, the question of meta data was recently discussed by Hinshaw:

"The D.C. Bar Association Legal Ethics Committee concluded that when a lawyer has actual knowledge that an adversary has inadvertently provided metadata in an electronic document, the lawyer should not review the metadata without contacting the sending lawyer and abiding by the sender’s instruction. This gives the sender the opportunity to determine if the metadata includes work product or confidential information of the sender’s client. In all other circumstances, however, the receiving lawyer is free to review the metadata contained in electronic files provided by an adversary"

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Fake Lawyers, Real Woes

Here is an interesting tidbit on fake lawyers, and the problems created by them. 

"The Problem of Barring Phony Lawyers from Practice

With so many bona fide lawyers struggling to obtain a job or attract clients, it's hard to believe that some people not only manage to impersonate real lawyers, but find real business and jobs as well. As this article from the Stamford Advocate (11/2/07) describes, phony lawyers are a growing problem in Connecticut, with the bar handling fifty fake cases per year. In Connecticut, most of the fake lawyer cases involve "notarios" who purport to offer legal assistance in immigration cases. But there are other cases, such as that of Brian Valery, a paralegal who duped his employer Anderson, Kill & Olick into believing that he'd gone to law school and passed the bar while working at the firm.

Most incredible, there's also the case of Howard Seidler, who has posed as a lawyer in courts around the country by using the name of a real lawyer, Howard Webber. Seidler sought admission by motion to the Connecticut bar, using another fake attorney by the name of Jermaine Johnson to sponsor him. The application contained several red flags; Seidler did not file an affidavit under oath and he and Johnson submitted the same bar number. But even though Seidler's application slipped through, his performance gave him away. During voir dire for a DUI case, Seidler asked potential jurors questions such as whether they liked animals, whether they could "envision the coffee table in front of them" or describe a house that they might see if, hypothetically, they were in a forest and came to a clearing. Finding this line of questioning a little odd, the prosecutor checked Seidler's background (who was using the name Webber) after the trial (the client was convicted after eight minutes) and discovered the fraud.

Seidler's case is now in the hands of the criminal justice system and not the bar -- he's being prosecuted for fraud. As for Seidler's client, he'll get a new trial, and investigators will try to recoup the $18,000 that the client spent for Seidler's service. In the meantime, Connecticut lawmakers are proposing legislation that would make unauthorized practice of law a felony punishable by at least a year in jail. Currently, the charge is a misdemeanor and according to bar officials, no one in Connecticut has ever been jailed for phony lawyering.

So the next time you're up against an incompetent lawyer, don't just laugh it off. Why not check the bar records -- most are readily available on line -- and make sure that your opponent is licensed to practice law?

Posted by Carolyn Elefant

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Legal Malpractice, Phen-Fen Overcharges, and the Horse of the Year

They lost the huge legal malpractice case, he may be horse of the year.  It's astudy in contrasts.  Plaintiffs may be tne new owners of the Preakness and the Breeders Cup Stakes Winner .

"A state judge has given the plaintiffs, in a lawsuit against three lawyers, the right to claim part ownership of the 3-year-old colt who has earned more than $5.1 million on the track.

Judge William Wehr said the plaintiffs can make the claim through Midnight Cry Stables, the company used by attorneys Shirley Cunningham Jr. and William Gallion to buy the horse for $57,000.

Cunningham and Gallion own a 20 percent stake in Preakness Stakes winner Curlin, who won the Classic on Saturday under Midnight Cry Stables' blue and black colors. Curlin was third in the Kentucky Derby and second in the Belmont Stakes. and is likely to voted Horse of the Year.

The attorney for the 400-plus plaintiffs said the horse is now for sale, which prompted the move to claim Cunningham and Gallion's assets. Angela Ford, the lawyer who represents the plaintiffs, said there have been discussions about both a private sale and a public auction of Curlin, but no decisions had been made as of Friday morning.

"I wouldn't want to speculate on what he's worth," Ford said.

Wehr's order, issued late Thursday, comes in a case against Cunningham, Gallion and Lexington lawyer Melbourne Mills Jr. over the handling of a $200 million settlement in litigation over the diet drug fen-phen. Mills is not involved in the ownership of Curlin.

Wehr previously ruled that the attorneys bilked their clients of funds from the settlement and owe at least $42 million. Cunningham, Gallion and Mills are currently jailed in northern Kentucky awaiting a federal trial on charges of wire fraud stemming from the fen-phen settlement. They have pleaded not guilty."

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Is it Legal Malpractice to allow your Secretary to Steal?

This is really a horrible story.  Solo Attorney has a longtime office manager/secretary who uses the position to steal a lot of money from a client estate.  Secretary pleads guilty to crime.  Attorney left holding the bag.  Insurance company says it has no coverage for conversion. 

Q:  was it legal malpractice to allow the secretary such access/no oversight?




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Publicly Funded Jury Research? Why not in Legal Malpractice

An often asked question in legal malpractice is: "what was the standard of good representation?  The following question is whether the attorney met that standard.  In trolling through the literature on this and other questions we ran across this interesting tidbit:  In West Virginia courts permit payment to jury researchers for indigent clients.  We have not heard of this before.

If this is the standard for criminal representation, is anything less for other defendants, criminal and civil, a deviation?

"Due diligence. Preparation. Undoubtedly, this is the most important responsibility that counsel owes to his or her client.

Inadequate representation due to poor preparation nearly always results in a negative outcome. Worst case scenario is the conviction of a criminal client who is innocent. But consider that the State of West Virginia provides public monies for trial research for indigent clients who are being represented by the Public Defender's Office. Our firm has conducted multiple change of venue surveys for clients of the Public Defender's office that were funded by taxpayer dollars. In each case, the judge approved the expenditure because the indigent client is entitled-the same as everyone else-to adequate representation. And trial research, like a court-appointed attorney, is considered essential to providing this adequate representation. "

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When was I Injured? When Does the Statute Start in Legal Malpractice?

When the statute starts to run in legal malpractice is an important consideration.  Here is a Pennsylvania case.  It's a complex anaysis, taking into account the date of the mistake, the date that actual damage happens, and continuing representation [not mentioned in this case]. 

"In Wachovia v. Ferretti, the appeals court panel rejected Wachovia's argument that it could not have brought a negligence claim against its attorney for an act that didn't result in damages until years later.

The court instead ruled that the statute of limitations for a breach of contract claim starts when the duty is breached and is only tolled until the plaintiff should reasonably have found out about the claim -- not until a judgment is entered or appeals are finished.

The appeals court pointed out that its ruling could require a client to pursue two legal actions with competing interests at the same time.

"We recognize Wachovia's public policy arguments, including their argument that, if the statute of limitations is to accrue upon the breach of a duty, a plaintiff in a legal malpractice action would be forced to take competing positions while defending the underlying claim and prosecuting their own legal malpractice action premised on that underlying claim," Judge John T. Bender said for the panel.

"Although we recognize this potential dilemma, the overriding public policy concern is that not commencing legal malpractice actions in a timely fashion results in stale claims."
"In Wachovia v. Ferretti, the appeals court panel rejected Wachovia's argument that it could not have brought a negligence claim against its attorney for an act that didn't result in damages until years later.

The court instead ruled that the statute of limitations for a breach of contract claim starts when the duty is breached and is only tolled until the plaintiff should reasonably have found out about the claim -- not until a judgment is entered or appeals are finished.

The appeals court pointed out that its ruling could require a client to pursue two legal actions with competing interests at the same time.

"We recognize Wachovia's public policy arguments, including their argument that, if the statute of limitations is to accrue upon the breach of a duty, a plaintiff in a legal malpractice action would be forced to take competing positions while defending the underlying claim and prosecuting their own legal malpractice action premised on that underlying claim," Judge John T. Bender said for the panel.

"Although we recognize this potential dilemma, the overriding public policy concern is that not commencing legal malpractice actions in a timely fashion results in stale claims."

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Judge Belittled by another Judge

This is not legal malpractice.  The story is remarkable, however.  Judge calls colleigue a "fool" and a group of other judges don't exactly disagree.  From Law.Com:

"Fulton Superior Court Judge Craig L. Schwall has told other members of the Fulton bench that Judge Hilton M. Fuller has bungled the Brian G. Nichols murder case and should be replaced.

In an Oct. 11 e-mail sent to all Fulton Superior Court judges, Schwall doesn't mince words, calling Fuller a "fool" and "embarrassment," adding "Surely he can be replaced."

The full text of the e-mail reads (with original punctuation and capitalization):

"From: Schwall, Craig, To: All Superior Court Judges."

"Is there any way to replace the debacle and embarrassment Judge Fuller is. He is a disgrace and pulling all of us down .He is single handedly destroying the bench and indigent defense and eroding the public trust in the judiciary. See his latest order. He can not tell the legislature what to do. ENOUGH IS ENOUGH. .Surely he can be replaced. He is a Fool .How is it done. Seek mandamus for a trial? We should investigate if it can be done."

The e-mail is signed: "From not shy in 5C."

Schwall uses courtroom 5C. The Daily Report obtained the e-mail from a source who is not involved in the case. Two Fulton Superior Court judges, who asked not to be identified, verified the authenticity of the e-mail.

Speaking as a group, the judges acknowledged the e-mail and dissatisfaction with Fuller. Asked to comment on Schwall's e-mail, the Fulton bench issued the following statement through its public information "

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Privilege and Legal Malpractice

We will be speaking on this topic througout November, but here is a California case on the subject.  Its lesson:  the client confidence must be in issue.

"Case law does not “require dismissal whenever a law firm defendant suggests that client confidences are threatened,” Guilford wrote (.pdf). “Instead, they require a showing that the case can be tried fairly only by revealing client confidences. Irell represented the cable company and its chairman, uber-rich techie Paul Allen, in acquiring existing cable systems across the country. According to the tentative ruling (which had to assume the allegations are true), one of Irell’s associates mistakenly deleted two paragraphs of a contract, which led to Allen acquiring a type of stock he wasn’t supposed to. That forced Charter to pay Allen “millions of dollars” to undo the damage.

L.A.-based Irell tried to snuff the suit by arguing it could not defend itself without revealing Allen’s client confidences, over his objections. And while Guilford found that very well may end up the case, “the dust of initial posturing has not yet sufficiently settled” to determine whether Irell could mount a defense without breaking privilege.

The court found Irell had not yet pinpointed the specific privileged issues it needs to be able to discuss. "

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Is it Legal Malpractice, and Why Isn't He Worried?

Here is the story of a convicted ex-accountant who is selling a legal type service to inmates.  Now, he has problems.  Problem one:  he's not an attorney, and authorities are determining whether he gave legal advice.  Problem two: a group of angry inmates and their families. They are paying big fees for his service to make a motion seeking dismissal and release, all based on a purported jurisdictional glitch back in the Truman era.

"A small Austin company, International Legal Services, advertises that it can free just about any federal prison inmate on appeal, even those who pleaded guilty or confessed — a dubious claim that even the most prestigious law firms would never make.

The key is supposed to be a legal argument, developed by employee Tony Davis, that claims the federal criminal code is invalid because Congress botched key legislation during the Truman administration. As a result, most criminal convictions obtained in the past 59 years should be tossed out, Davis argues.

Davis, however, is not a lawyer. He's a former accountant who served almost 51/2 years in prison for fraud and money laundering — details International Legal Services fails to disclose to its clients, including about 160 inmates who paid up to $17,500 each for the company's services, potentially generating fees topping $1 million.

Nor does the company, which Davis said is owned by his wife, disclose that its ballyhooed legal argument has yet to free one inmate since Davis first used it to challenge his own 1998 conviction."

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Divorce Attorney Fee Dispute and Success Fees

Attorney fees are regulated, and may be most regulated in matrimonial settings.  22 NYCRR 1400 regulates how fees are calculated, how they are billed, and most importantly, what happens if the procedures are not followed.

In this case, Sheresky Aronson & Mayefsky LLP v. Whitmore, 117068/06 ,Decided: October 5, 2007
Justice Doris Ling-Cohan NEW YORK COUNTY Supreme Court , the law firm of Sheresky Aronson & Mayefsky LLP  successfully represented the wife in a matrimonial, and had their fees paid by the husband.  Nevertheless, they wanted a premium for successful conclusion, from the wife, and proposed a $ 150,000 reward.  The wife paid $ 50,000 and then balked.

Law firm loses, for its failures with regard to 22 NYCRR 1400.3.  "22 NYCRR 1400.3 was "'promulgated to address abuses in the practice of matrimonial law and to protect the public'" (Mulcahy v. Mulcahy, 285 AD2d 587, 588 [2d Dept], lv denied 97 NY2d 605 [2001], quoting Julien v. Machson, 245 AD2d 122, 122 [1st Dept 1997]). The requirement that attorneys execute written retainer agreements with matrimonial clients is found not only in the Rule, but also in Code of Professional Responsibility, in Disciplinary Rule (DR) 2-106 (c) (2) (b), which forbids attorneys from collecting "[a]ny fee in a domestic relations matter . . . unless a written agreement is signed by the lawyer and client setting forth in plain language the nature of the relationship and the details of the fee arrangement." It is well settled that an attorney's noncompliance with the Rule generally precludes the attorney's recovery of fees in domestic relations matters (see Ackerman v. Gebbia-Ackerman, 19 AD3d 519 [2d Dept], dismissed 6 NY3d 740 [2005]; Bishop v. Bishop, 295 AD2d 382 [2d Dept 2002]). "


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Legal Malpractice after Medical Malpractice case Continues against Morelli Law Firm

Reported in today's NYLJ, this is a convoluted case.  Plaintniff was misdiagnosed with breast cancer and underwent unnecessary mastectomy.  Her medical malpractice case was handled by the Morelli firm, and was dismissed on the statute of limitations, at the pleading stage.

The legal malpractice case followed, and has now survived two motions to dismiss.  The bottom line in the latest decision is that the med mal attorneys handled the case for three years, and are hard pressed to argue that it had no merit;  similarly, they had "something" to do with the pleadings, and may not now argue that the pleadings lacked merit.


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Judicial Estoppel, Settlement Stipulations and Legal Malpractice

Here is an Illinois legal malpractice case which illustrates the problem in bringing a legal malpractice case after a settlement in which the client has agreed that she understands the settlement, and agrees to it.  Add to this mix, the sometimes question, "are you satisfied with your attorney's handling of the case? 

The issue is whether the client also understood that there were shortcomings in discovery, in explanations to her, in investigation and reporting to the client of the applicable law or assets of the other side, when coming to a settlement.  Here, the client in a divorce action agreed to a settlement and then sued her attorney, alleging that there was insufficient investigation of her husband's assets, etc.  Accordingly, her  settlement, although she understood it, was based upon insufficient evidence, or "effectively compelled" by the attorneys preparation.

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Is it Legal Malpractice when he's not An Attorney?

This is a twistedstory.  There are two reasons why this report is so out of the usual.  First, the defendant is not a US attorney.  He says that he is an attorney in Mexico, has an office in DC, where foreign attorneys may practice without a bar admission and he is then permitted to piggyback to practice law elsewhere.

The second reason is found in the story: "Attorney Thomas J. Henry filed the lawsuit Oct. 8 on behalf of Paloma Steele of Corpus Christi. Henry ran television ads last month alleging Celis was not licensed to practice law anywhere.

We have never seen television ads in aid of litigation.  Has anyone?

"Celis testified in an unrelated case in May that he was not licensed in Texas or any other state but is an attorney in Mexico. He said his law firm, CGT Law Group International, was incorporated in Washington, D.C., where laws allow non-lawyers and foreign lawyers to operate. Once established there, firms can transfer the right to operate to other states, Celis said.

Henry said Friday he would not disclose details of the case that prompted the lawsuit.

"It's an extremely serious case," Henry said.

Robert Vargas, Nueces County Court at Law No. 1 judge, recused himself from the case. Presiding Judge J. Manuel Bañales assigned Kleberg County Court at Law Judge Martin Chiuminatto Jr. to hear the case. No hearing has been set.

Celis, who regularly donated to Democratic causes in South Texas and nationally, was thrust into the limelight last month through a series of bizarre events.

On Sept. 15, a nearly nude woman fled his Kings Crossing home and Celis appeared on the scene flashing a Duval County sheriff's badge, asking that the woman be turned over to him, according to police reports. Celis' law enforcement credentials expired in 2003. Henry's commercials started airing shortly afterward, and Celis sued Henry and local television stations but later dropped the suit.

The Attorney General's Office sued Celis on Wednesday, alleging the law firm Celis operated broke the law in allowing him to take a share of profits."

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Rock and Roll, the BoDeans and Legal Malpractice

We love rock and roll, and realise it did not end with Steely Dan.  Here is a Milwaukee group, well known [?] there, who eventually sued its manager, and now successfully sued its attorney.  The story:

"The long nightmare that has plagued the BoDeans is over. For nearly five years, the Milwaukee rock group was entangled in legal woes that drained their creative spirit and played havoc with their personal lives

Last week, the group reached a settlement with its former lawyer, ending a legal malpractice case that the BoDeans had filed. The settlement was for an undisclosed amount of money, but Milwaukee County Circuit Judge Jean DiMotto had ruled that there had been negligence on the part of the lawyer, Linda Mensch of Chicago. The trial that was supposed to have started last week was only to determine the amount of damages"

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E-Mails Not Privileged in this Legal Malpractice Case

One would initially think that a communication between client and attorney on an issue arising from the attorney's representation of the client would be privileged.  In this case, recently decided by Justice Charles E. Ramos of Supreme Court, New York County, the privilege was waived.

"On August 10, 2005, BI's counsel, Marvin Wexler of Kornstein Veisz Wexler & Pollard, LLP ("KVW"), sent a letter to plaintiff's counsel, Stuart Kagen of Paul, Weiss Rifkind Wharton & Garrison LLP ("PW"), asserting that BI was in possession of e-mail correspondence between Dr. Scott and PW pertaining to Dr. Scott's dispute with BI, as well as e-mails written between Dr. Scott and Cohen Lans LLP regarding a separate dispute. The letter further stated that although no one at BI had read the e-mails yet, BI believed that any potential privilege attached to the communications had been waived by use of BI's e-mail system.

Mr. Kagen responded on August 15, 2005, informing Mr. Wexler that the documents are privileged communications belonging to Dr. Scott for which there had been no waiver of privilege and requesting the immediate return of the e-mails to Dr. Scott.

When BI refused to return the documents, the parties called Andrea Masley, the Judge's Court Attorney, who instructed BI to provide copies of the e-mails to Dr. Scott, place copies of [*2]the documents into a sealed envelope and bar anyone from reviewing the e-mails pending a resolution by the Court. Thereafter, Dr. Scott filed this motion for a protective order seeking the return of the documents.[FN4]

Dr. Scott argues that the e-mails are privileged under both the attorney client privilege and work product doctrine. BI counters that the e-mails were never protected by the attorney client privilege because Dr. Scott could not have made the communication in confidence when using BI's e-mail system in violation of BI's e-mail policy. BI also argues that both privileges were waived by Dr. Scott's use of BI's e-mail system.

The final factor is whether Dr. Scott had notice of the policy. Dr. Scott had both actual and constructive knowledge of the policy. BI disseminated its policy regarding the ownership of e-mail on its server to each employee in 2002, including Dr. Scott and provided internet notice. See Garrity v John Hancock Mutual Life Ins. Co., No. Civ Action 00-12143-RWZ, 2002 WL 974676, at 1 (D Mass, 2002)(Company e-mail policy precluded reasonable expectation of privacy despite employee's claim that policy was hard to find on company intranet).

Dr. Scott's effort to maintain that he was unaware of the BI e-mail policy barring personal use is rejected. As an administrator, Dr. Scott had constructive knowledge of the policy. Perez Moya v City of New York (9 Misc 3d 332 Sup Ct, Kings County 2005)(Superintendent's knowledge of the residency of child imputed to the City); Polidori v Societe Generale Group., 236 NYLJ 112 (Sup Ct NY County 2006) (Knowledge of sexual harassment will be imputed to employer if supervisor of a sufficiently high level is aware of the harassment), affd, 39 AD3d 404 (1st Dept 2007). He required newly hired doctors under his supervision to acknowledge in writing that they were aware of the policy. Under these circumstances, Dr. Scott is charged with knowledge of the BI e-mail policy.

Alternatively, Dr. Scott argues the e-mails are privileged work product. The work product doctrine provides a qualified privilege against disclosure for materials prepared by an attorney in anticipation of litigation. CPLR 3101(c). The issue is whether the work product privilege was waived. Under New York State law, work product is waived when it is disclosed in a manner that materially increases the likelihood that an adversary will obtain the information. See Bluebird Partners, L.P. v First Fidelity Bank, N.A., New Jersey, 248 AD2d 219, 225 (1st Dept. 1998). While an inadvertent production of a privileged work product document generally does not waive the applicable privilege, there is an exception to that rule if the producing party's conduct "was so careless as to suggest that it was not concerned with [the] protection of [the] asserted privilege." Critical to this determination is the reasonableness of the precautions taken to prevent inadvertent disclosure. SEC v Cassano, 189 FRD 83, 85 n.4 (SDNY 1999). "

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More Twisted Legal Malpractice News from South Carolina

There's not a lot to comment on in this story.  Simply count up the legal malpractice issues: conflict of interest, attorneys switching sides, surreptitious spying, computer hacking on attorney-client e-mails...

"By the time it was finally hauled into court last year, it had all the ingredients of a cheap detective novel: the millionaire husband of a seductive singer and the P.I. he’s paying to tail her; hidden (and possibly tax payer-funded) cameras; hacked computers; two-bit lawyers who’ll even turn on their own clients if the retainer is juicy enough; and at the heart of it all, lots of money up for grabs. The case is still in litigation, the attorneys and litigants tight-lipped, and what can’t be deduced from the public record at the courthouse is left to swirl in the air of bridge club gossip.

Presumably, Stella Black–recognizable to many as the busty brunette in the Whit-Ash Furniture commercials– had no idea that her husband had been conspiring to leave her for months. Nor, she claims, could she have known that he had fully infiltrated her music career and that her confidante and talent agent as well as her entertainment lawyer were both working clandestinely on his payroll to spy on her, according to one affidavit.

Stella Black’s affidavit repeatedly refers to a private investigator named Edwards and her pending legal malpractice suit in common pleas court against Whit-Ash names one Jim Edwards as a defendant. According to court documents, Edwards installed hidden cameras “that were secretly mounted at and around Plaintiff’s residence” in Forest Acres. 

Phillips allegedly began forwarding Stella’s private emails and secret transcripts of her meetings with attorneys to Black and his crew. Later, she claims, they set up a wide area network (WAN) that connected Whit-Ash computers to her home computer so they could have unfettered access to her hard drive and email.

Phillips also allegedly installed Spector Pro software on her laptop to capture every keystroke and create screen shots of Stella’s emails to her attorneys. And when the preliminary divorce proceedings were underway, Stella looked up to see none other than her entertainment lawyer, Rebecca West, representing Whit. She believes it had been planned all along ."

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Negligence Without Causation in Legal Malpractice

It's perplexing to get a motion to dismiss, founded on the argument that while there may have been negligence, there is no proximate damage.  It's perplexing, because, while a truism, it rankles.  When an attorney has made a mistake, his defense of "no harm- no foul" disturbs.  Here is Day on Torts with a Michigan Case on this issue.  Here, the attorneys messed up the appeal, but, as the appeal could not have been won anyway,.. Posted In Blog Articles
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NC Legal Malpractice Verdict of $ 360,000

Here is a simple, short article that covers a wide set of damaged individuals.  Hurt here are: plaintiff, defendant and witness.

"A Fayetteville woman was awarded more than $360,000 in both actual and punitive damages in a civil malpractice suit she filed against a local attorney.

A Fayette County State Court jury handed down the verdict against Daniel Richard Hayes Oct. 16 after a two-day trial.

Hayes, of Jones Circle, Fayetteville, also was held in contempt of court for inappropriately questioning a witness during the trial despite warnings not to do so by State Court Judge Fletcher Sams, according to court records. Hayes paid a $200 fine, escaping a two-day jail sentence for the transgression.

In the suit, Betty Goza claimed that she retained Hayes via a contract several months after she was injured in an automobile crash that was the subject of the suit. Goza claimed that Hayes failed to properly serve the defendants with notice of the suit, and he also failed to notify her when the suit was dismissed because the two-year statute of limitations had expired. "

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Judiciary Law 487 and Legal Malpractice

Here is a worthy article on Judicary Law section 487 by  Norman B. Arnoff and Sue C. Jacobs in  the October 24, 2007 New York Law Journal.  It should be read by attorneys, as this statute applies to them alone.

"Lawyers are officers of the court, as such, they must be ethically responsible not only in the courtroom but in all aspects of their professional lives. The omnipresence of the attorney's ethical obligations assures that the law will be soundly interpreted and applied.

In order to guarantee lawyers have a heightened consciousness for their professional and ethical obligations inside the courtroom and beyond, there are several statutes and court rules to which members of the bar should pay serious attention.

A serious point for consideration by every member of the New York Bar is Judiciary Law §487, which provides:

An attorney or counselor who:

1. Is guilty of any deceit or collusion, or consents to any deceit or collusion with intent to deceive the court or any party, or

2. Willfully delays the client's suit with a view to his own gain, or willfully receives any money or allowance for an account of any money which he has not laid out, or becomes answerable for

Is guilty of a misdemeanor, and in addition to the punishment prescribed therefore by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action.

The statute is intended not merely to deter litigation abuse but the misuse of client funds in connection with litigation. The statute covers a lawyer's deception of the court or any party to the litigation including the lawyer's client or a party not represented by the lawyer whose conduct is in issue. The statute's intent is to deter serious misconduct that possibly rises to the level of criminality and as a result subjects the lawyer to treble damages to the injured party in a civil action. "

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Threatening a Witness by Defining Perjury

This is a sordid story of a professor who was barred from teaching at a university.  He was accused of making rather coarse sexual comments to students, many of them. While litigating over his potential dismissal, a letter was sent to one witness with a photocopy of the definition of perjury and a suggestion of how she could purge herself of that problem.  To make matters worse, a similar letter was sent to the university secuity department alleging that the witness had committed perjury on campus.

Judge Diamond, of Supreme Court, New York County levied significant sanctions on client and attorney. As the NYLJ reports :

"Mr. Kalyanaram's attorney, Mr. Richman, sent a letter to Ms. Cui that "attached a copy of the penal statute regarding the crime of perjury and then proceeded to advise her that if her allegations against petitioner are untrue, she could be guilty of such a crime," according to the decision.

The letter also stated that "if she changed her affidavit to rectify any untrue statements, she may have a defense to a perjury charge."

Mr. Richman sent a second letter to the directors of the institute's security, which stated he believed Ms. Cui had committed perjury on the school's premises.

Petition Denied

In a decision issued last week, Justice Diamond denied Mr. Kalyanaram's petition for reinstatement and granted the school's motion for sanctions.

"The petitioner's claim herein turns on the sole issue of whether the respondent, in dismissing him prior to the conclusion of the grievance and arbitration process, breached the terms of the governing collective bargaining agreement," Justice Diamond wrote. "The respondent's letter to the petitioner specifically stated that . . . he was to remain on the payroll at his regular salary until a final determination had been rendered. Thus, the respondent expressly recognized that petitioner remained an employee until the conclusion of the grievance and arbitration process."

In addition, in a scathing analysis of the sanctions issue, the court again found against Mr. Kalyanaram and his attorney Mr. Richman.

"Such threats cannot be countenanced," Justice Diamond wrote. "They are an inappropriate and reprehensible attempt to influence a proceeding and obtain an outcome therein through extra-judicial means. Indeed, the threats are particularly pernicious because they carry the real possibility that even a witness who is otherwise entirely truthful will refrain from giving such testimony in order to avoid being the target of a criminal investigation."

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Borrowing a Foreign Limit in Legal Malpractice

Borrowing a sister state's statute of limitations is the province of "choice of law", which is a rather esoteric law school subject.  For our purposes, which state's law should be applied depends on where the action is brought, where the wrong took place, where the parties were subject to service of process and jurisdiction.

Here is a case in which plaintiffs wished to sue a NY attorney yet use the Tennesee statute of limitations.  The reason?  It was too late to use the NY statute of limitations.  The case, GML Inc. v, Cinque & Cinque was recently decided by the Court of Appeals.

"The action was started in New York, and as such, it was unnecessary to toll the statute of limitations..." 

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Pro-Bono Success Coupled with Legal Malrpactice Insurance

Pro-Bono work at Big Law or at Big Companies in house law departments has radically increased over the past 10 years.  One reason is the availability of legal malpractice insurance.  Here is an interesting article on the current status:

"Q: How successful has the challenge been?

A: Anecdotally, we know that more companies are getting involved in pro bono. Dozens are putting formal programs in place. We have an annual report for signatories that we're sending out this fall. It asks about the level of participation in their legal departments, the kinds of projects, if they're keeping [track of their pro bono] time, and about their partnerships with public interest organizations and law firms. We'll hopefully have answers by February.

Q: You called it a challenge for a reason: In-house departments face obstacles in doing pro bono that law firms don't. Were there any issues you weren't expecting?

A: The right fit can be a tough issue. Take Tyson [Foods Inc.,] and Wal-Mart [Stores Inc.]. Both are headquartered in rural areas with a fairly narrow range of legal needs. There's not necessarily a great fit between the skills of the legal department and the needs of the local community. And we learned from Intel [Corp.] that there's a whole group of lawyers who are licensed to practice, but not in the jurisdiction where they're located. There are very few states where lawyers who are not [locally] licensed can do pro bono easily.

Q: Which companies really succeeded with the challenge?

A: Intel is a great model because it has such a well-planned program. They [used requests for proposals to find law firm partners, and] tied pro bono work to areas of interest in the department and company as a whole. They started in their [Santa Clara, Calif.,] headquarters, but have expanded to other offices as well.

Q: For a while it seemed that companies weren't doing pro bono because they thought the costs were prohibitive. What changed?

A: Before, they just didn't know what was available to them. When companies started doing pro bono, malpractice insurance was always something they asked us about. [In-house lawyers are not always insured for malpractice.] Today, the areas on our Web site that cover malpractice are probably the most accessed. A company can work with a program that provides the coverage, purchase a rider, or get malpractice insurance for about $3,000 a year for the whole company. "

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Nail and Mail Fails in Legal Malpractice Case

Service of process cases turn on the facts, and generally do not provide either generalized rules or sweeping policy arguments,  Here is a case in which the attorney's door was locked, there was no answering machine and nothing personalized about the place except a shingle.  Not exactly a downtown NYC type of office.

"According to an affidavit of service dated September 9, 2004, the process server attempted to serve the defendant with a copy of the summons and complaint in the legal malpractice action at his actual place of business on August 23, 2004, at 10:00 A.M. The process server observed the defendant's name on an outside shingle, but the office was closed, locked, and without a doorbell. The process server used his cellular phone to call the number listed on the outside shingle and received neither a personal reply nor an answering service reply. Nonetheless, that same day the process server mailed the summons and complaint to the very same premises in order to ostensibly effectuate "nail and mail" service. On the following day, August 24, 2004, the process server returned to the same location at 9:00 A.M. and, upon seeing that the conditions were the same as the day before, affixed the summons and complaint to the door.

Although the building at which process was purportedly served was in fact owned by the defendant and/or his wife, and was used as both a law office and an office to collect rents and issue leases for their other properties, the defendant was, in fact, suspended from the practice of law at the time of the attempted service of process.

Service of process must be made in strict compliance with statutory "methods for effecting personal service upon a natural person" pursuant to CPLR 308 (Macchia v Russo, 67 NY2d 592, 594; see Dorfman v Leidner, 76 NY2d 956, 958). CPLR 308 requires that service be attempted by personal delivery of the summons "to the person to be served" (CPLR 308[1]), or by delivery "to a person of suitable age and discretion at the actual place of business, dwelling place or usual place of abode" (CPLR 308[2]). Service pursuant to CPLR 308(4), commonly known as "nail and mail" service, may be used only where service under CPLR 308(1) or 308(2) cannot be made with "due diligence""

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Snowboard Inventor's Legal Malpractice Case

New York Lawyer, an offshoot of Law.Con brings this story:

"Two inventors of snowboard bindings accuse their lawyers at Seyfarth Shaw and Burnett, Burnett & Allen of doing a legal face plant that caused them to lose a patent infringement case.

In a lawsuit filed in Santa Clara County, Calif., Superior Court last month, Richard and Brandt Berger accuse the lawyers of negligence and fraud and claim to have suffered damages of more than $75 million. On Wednesday, the suit was removed to the Northern District of California, following rulings by the U.S. Court of Appeals for the Federal Circuit on Monday on the appropriate jurisdiction for IP malpractice claims.

The plaintiffs allege that IP veteran Jack Slobodin, a former Seyfarth partner, provided the court with a "fatally defective" claim chart prepared by his firm, then blamed the mistake on an attorney "that was handling it before" him. In February -- one month after the patent case in question, Berger v. Rossignol, finished up -- Slobodin left Seyfarth to join Gordon & Rees as of counsel.

A Seyfarth spokesman said Slobodin left of his own accord, but declined to comment on the suit. Lawyers for Seyfarth and Slobodin from Keker & Van Nest also declined to comment on the case.

The infringement suit was filed in 2005 with the help of San Jose, Calif., attorney Douglas Allen of Burnett, Burnett & Allen. Seyfarth provided Allen with a claim chart for the binding, but the Bergers say that the chart -- which was to detail each point of the alleged infringement -- was erroneous. "

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Akin Gump Wins Dismissal of Some Counts in Legal Malpractice Case

We originally reported this case on  9/28.  Here is a well written decision concerning Akin Gump in which some causes of action are dismissed.  Tott, Contract, Fraud, do all of these different theories of liablitiy interact?  Read on:

The Case:

"Defendant's motion, pursuant to CPLR 3211 (a) (7), to dismiss plaintiffs' second, fifth and ninth causes of action, for gross negligence, the third cause of action for negligent misrepresentation and the seventh cause of action, for breach of fiduciary duty, as redundant of the legal malpractice claims, is granted. It is well settled, in this Department, that gross negligence, negligent misrepresentation, and breach of fiduciary duty claims, arising out of the same set of operative Facts, and seeking the same damages or relief, as a viable legal malpractice claim, are redundant, and subject to dismissal pursuant to CPLR 3211 (a) (7) (see Weil, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 10 AD3d 267 [1st Dept 2004]; InKine Pharmaceutical Co., Inc. v. Coleman, 305 AD2d 151 [1st Dept 2003]; Mecca v. Shang, 258 AD2d 569 [2d Dept 1999]). As accurately outlined by defendant, the second cause of action asserted in plaintiffs' complaint for gross negligence, and the third cause of action for negligent misrepresentation, arise out of the identical Facts, and seek the same relief as plaintiffs' first cause of action for malpractice. The fifth cause of action for gross negligence and the seventh cause of action for breach of fiduciary duty arise out of the same operative Facts, and seek the same relief, as the fourth cause of action for malpractice, and the ninth cause of action for gross negligence arises out of the same Facts, and asserts damages identical to the Facts and damages alleged under the eighth cause of action for legal malpractice. Plaintiffs' argument, that the claims should be reviewed under Texas law, does not mandate a different result (see Camp v. RCW & Co., Inc., 2007 WL 1306841, *5 [SD Tex 2007], quoting Goffney v. Rabson, 56 SW 3d 186, 190 [Tex App, Houston 2001]["Texas law does not permit a plaintiff to divide or fracture her legal malpractice claims into additional causes of action"]; see also Aiken v. Hancock, 115 SW 3d 26, 28 [Tex App, San Antonio 2002]; Ersek v. Davis & Davis, P.C., 69 SW 3d 268, 274 [Tex App, Austin 2002]). Plaintiffs' request for leave to amend the eighth cause of action is denied, as the proposed amendment does not cure the redundancy (see Feldman v. Jasne, 294 AD2d 307 [1st Dept 2002]; Bencivenga & Co. v. Phyfe, 210 AD2d 22 [1st Dept 1994]).

That portion of defendants' motion which seeks partial dismissal of plaintiffs' sixth cause of action for fraud, on documentary evidence, pursuant to CPLR 3211 (a) (1), is denied. On a motion pursuant to 3211 (a) (1), the court must accept the complaint's factual allegations as true, according plaintiffs the benefit of every possible favorable inference, and dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law (Arnav Indus. Inc., Retirement Trust v. Brown, Raysman, Millstein, Felder & Steiner, LLP, 96 NY2d 300, 303 [2001]; Leon v. Martinez, 84 NY2d 83, 87-88 [1994]; Weil,, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 10 AD3d at 271-71). The documentary evidence relied upon by the defendant in this matter consists of a June 28, 2004 letter executed by McBride on behalf of the Veras entities, and by McBride, Larson and Virginia in their individual capacities, acknowledging the existence of potential conflicts of interest, including but not limited to those alleged in the instant complaint. Defendants also annex various drafts of the letter. All drafts were prepared in or around June 2004, after the individual plaintiffs retained independent counsel.

The document, executed nearly a year after the investigations commenced, has little probative value with respect to plaintiffs' allegations that, when Akin Gump undertook plaintiffs' defense in or around September 2003, it knowingly and purposefully failed to disclose inherent and nonwaivable conflicts of interest, or with respect to acts occurring prior to the negotiation or execution of the letter. Plaintiffs' allegations also raise issues of fact with respect to whether the consent letter is effective in these circumstances (see Kelly v. Greason, 23 NY2d 368, 378-79 [1968][in certain situations, there can be no effective consent]; see also, e.g. Parklex Assoc. v. Parklex Assoc., 15 Misc 3d 1125(A), 2007 WL 1203617, *5 [Sup Ct, Kings County 2007][attorneys could not rely on purported waiver of conflict of interest where such conflict could subject an attorney to disciplinary action under DR-105, 22 NYCRR §1200.24(c)]; Booth v. Continental Ins. Co., 167 Misc 2d 429, 439 [Sup Ct, Westchester County 1995][full disclosure and consent does not insulate an attorney where the conflict of interest affects or appears to affect the attorney's obligations]). Finally, in light of defendant's failure to demonstrate a right to relief based upon documentary evidence, it is not necessary, at this time, to address the issues of fact raised by plaintiffs' belated claims of coercion."

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Akin Gump Wins Dismissal of Some Counts in Legal Malpractice Case

We originally reported this case on  9/28.  Here is a well written decision concerning Akin Gump in which some causes of action are dismissed.  Tott, Contract, Fraud, do all of these different theories of liablitiy interact?  Read on:

The Case:

"Defendant's motion, pursuant to CPLR 3211 (a) (7), to dismiss plaintiffs' second, fifth and ninth causes of action, for gross negligence, the third cause of action for negligent misrepresentation and the seventh cause of action, for breach of fiduciary duty, as redundant of the legal malpractice claims, is granted. It is well settled, in this Department, that gross negligence, negligent misrepresentation, and breach of fiduciary duty claims, arising out of the same set of operative Facts, and seeking the same damages or relief, as a viable legal malpractice claim, are redundant, and subject to dismissal pursuant to CPLR 3211 (a) (7) (see Weil, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 10 AD3d 267 [1st Dept 2004]; InKine Pharmaceutical Co., Inc. v. Coleman, 305 AD2d 151 [1st Dept 2003]; Mecca v. Shang, 258 AD2d 569 [2d Dept 1999]). As accurately outlined by defendant, the second cause of action asserted in plaintiffs' complaint for gross negligence, and the third cause of action for negligent misrepresentation, arise out of the identical Facts, and seek the same relief as plaintiffs' first cause of action for malpractice. The fifth cause of action for gross negligence and the seventh cause of action for breach of fiduciary duty arise out of the same operative Facts, and seek the same relief, as the fourth cause of action for malpractice, and the ninth cause of action for gross negligence arises out of the same Facts, and asserts damages identical to the Facts and damages alleged under the eighth cause of action for legal malpractice. Plaintiffs' argument, that the claims should be reviewed under Texas law, does not mandate a different result (see Camp v. RCW & Co., Inc., 2007 WL 1306841, *5 [SD Tex 2007], quoting Goffney v. Rabson, 56 SW 3d 186, 190 [Tex App, Houston 2001]["Texas law does not permit a plaintiff to divide or fracture her legal malpractice claims into additional causes of action"]; see also Aiken v. Hancock, 115 SW 3d 26, 28 [Tex App, San Antonio 2002]; Ersek v. Davis & Davis, P.C., 69 SW 3d 268, 274 [Tex App, Austin 2002]). Plaintiffs' request for leave to amend the eighth cause of action is denied, as the proposed amendment does not cure the redundancy (see Feldman v. Jasne, 294 AD2d 307 [1st Dept 2002]; Bencivenga & Co. v. Phyfe, 210 AD2d 22 [1st Dept 1994]).

That portion of defendants' motion which seeks partial dismissal of plaintiffs' sixth cause of action for fraud, on documentary evidence, pursuant to CPLR 3211 (a) (1), is denied. On a motion pursuant to 3211 (a) (1), the court must accept the complaint's factual allegations as true, according plaintiffs the benefit of every possible favorable inference, and dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law (Arnav Indus. Inc., Retirement Trust v. Brown, Raysman, Millstein, Felder & Steiner, LLP, 96 NY2d 300, 303 [2001]; Leon v. Martinez, 84 NY2d 83, 87-88 [1994]; Weil,, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 10 AD3d at 271-71). The documentary evidence relied upon by the defendant in this matter consists of a June 28, 2004 letter executed by McBride on behalf of the Veras entities, and by McBride, Larson and Virginia in their individual capacities, acknowledging the existence of potential conflicts of interest, including but not limited to those alleged in the instant complaint. Defendants also annex various drafts of the letter. All drafts were prepared in or around June 2004, after the individual plaintiffs retained independent counsel.

The document, executed nearly a year after the investigations commenced, has little probative value with respect to plaintiffs' allegations that, when Akin Gump undertook plaintiffs' defense in or around September 2003, it knowingly and purposefully failed to disclose inherent and nonwaivable conflicts of interest, or with respect to acts occurring prior to the negotiation or execution of the letter. Plaintiffs' allegations also raise issues of fact with respect to whether the consent letter is effective in these circumstances (see Kelly v. Greason, 23 NY2d 368, 378-79 [1968][in certain situations, there can be no effective consent]; see also, e.g. Parklex Assoc. v. Parklex Assoc., 15 Misc 3d 1125(A), 2007 WL 1203617, *5 [Sup Ct, Kings County 2007][attorneys could not rely on purported waiver of conflict of interest where such conflict could subject an attorney to disciplinary action under DR-105, 22 NYCRR §1200.24(c)]; Booth v. Continental Ins. Co., 167 Misc 2d 429, 439 [Sup Ct, Westchester County 1995][full disclosure and consent does not insulate an attorney where the conflict of interest affects or appears to affect the attorney's obligations]). Finally, in light of defendant's failure to demonstrate a right to relief based upon documentary evidence, it is not necessary, at this time, to address the issues of fact raised by plaintiffs' belated claims of coercion."

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DuPont Recovers from Huge Verdict. Is there any Legal Malpractice?

Here is an appellate decision in the DuPont environmental and cancer case.  There is no mention of legal malpractice here.  Note however, the precluded experts, the precluded documents, and how the dissent paints the majority as corporate lackeys.

The case:"Glen Strong (Strong) and his wife, Connie, collectively "the Strongs," were among thirty-seven plaintiffs who filed suit in the Circuit Court of Jones County, Mississippi, Second Judicial District, against E.I. DuPont de Nemours Corporation (DuPont) in December 2002, in the matter of Govan v. DuPont, et al., Cause No. 2002-376-CV12. The Strongs did not have an individual complaint.1 At the same time, a larger group of approximately 2,200 plaintiffs filed a separate complaint against DuPont in the matter of Lizana v. DuPont, et al., Cause No. 2002-377-CV12, alleging similar injuries as in the Govan complaint. In fact, the only major difference in the two complaints was that the plaintiffs' names were different.

¶ Two Mississippi residents also were named as defendants in the complaints, namely Waste Management of Mississippi and G.B. Boots Smith Corporation, a Laurel trucking company used to fix venue in Jones County, Mississippi.2 DuPont immediately removed the Govan and Lizana cases to federal court. DuPont alleged the fraudulent joinder of Waste Management and Boots Smith. The federal court remanded the Govan and Lizana cases to the trial court in February 2004.

I. Striking DuPont's experts.

¶ This appeal follows a laborious and highly contentious discovery process during which the trial court struck nine of DuPont's witnesses, including the majority of its designated experts. The trial court determined that "based upon the record, the history of abuses in this case, and pursuant to Miss. R. Civ. P. 37(b)(2), 37(e), Rule 11 and the court's inherent powers to impose sanctions on those who abuse the Mississippi Rules of Civil Procedure, the Court finds that DuPont has indeed abused the Mississippi Rules of Civil Procedure."

¶ In its order in cause number 2005-M-01583-SCT dated August 16, 2005, this Court already ruled on DuPont's emergency petition for interlocutory appeal and motion for stay regarding the trial court's ruling to strike its experts, stating:

Petitioner seeks relief from the trial court's order striking certain report and fact witnesses from participation in the trial scheduled for August 17, 2005. The Court finds that the trial court granted the motion to strike these witnesses as a sanction for petitioner's prior abuse of the discovery process. The Court therefore finds that the emergency petition for interlocutory appeal and motion for stay should be denied. "


¶ One would never know from reading the majority the basis of Strong's claims against DuPont: that for years DuPont knowingly deposited tons of toxic material into the waters of Bay St. Louis; that according to the United States Environmental Protection Agency (EPA), the DeLisle plant is the second largest emitter of potentially-carcinogenic dioxins in the country; that DuPont was aware of the risks associated with human exposure to these toxins since at least 1983; and that Glen Strong incurred roughly $675,000 in medical bills for treating his cancer which developed after living his entire life in close proximity to the plant and eating contaminated seafood from the bay. In light of these facts, and the thousands of pages of documentation supporting his claims, the "errors" found by the majority can hardly be deemed reversible.

¶ Today's case is yet another example of this Court's willingness to overturn a jury verdict when individuals have been awarded large damages against corporate defendants. In the last two years, this Court has been asked to consider at least eight cases involving large damage awards in favor of individual plaintiffs, and seven of these cases have been reversed. Mariner Health Care, Inc. v. Estate of Edwards, 2007 Miss. LEXIS 520 (Miss. Sept. 13, 2007) (reversing $6.5 million jury award against nursing home); Horace Mann Life Ins. Co. v. Nunaley, 960 So. 2d 455 (Miss. 2007) (reversing $1.9 million jury award and rendering judgment in favor of life insurance company); Baker, Donelson, Bearman & Caldwell, P.C. v. Muirhead, 920 So. 2d 440 (Miss. 2006) (reversing $1.6 million jury award for legal malpractice and rendering judgment in favor of defendant law firm); Hartford Underwriters Ins. Co. v. Williams, 936 So. 2d 888 (Miss. 2006) (reversing $1.5 million jury award against insurance company); Irby v. Travis, 935 So. 2d 884 (Miss. 2006) (reversing $3.75 million jury award in wrongful death case); GMC v. Myles, 905 So. 2d 535 (Miss. 2005) (reversing $5.4 million award in wrongful death case); 3M Co. v. Johnson, 895 So. 2d 151 (Miss. 2005) (reversing $25 million jury award and rendering judgment in favor of manufacturer). Compare Canadian Nat'l/Ill. Cent. R.R. v. Hall, 953 So. 2d 1084 (Miss. 2007) (affirming $1.5 million jury award against employer). See also Jimmie E. Gates, Justices Void $36.4M Award in Insurance Suit, Clarion Ledger, Oct. 2, 2007, at A1. Yet, despite the substantial evidence in this case supporting a jury verdict in favor of the plaintiffs, the majority finds enough "cumulative error" to warrant a reversal. At some point, we must defer to the finders of fact and stop substituting this Court's judgment for that of the jury.

¶ For the foregoing reasons, I would affirm the judgment of the trial court. "

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Notice Pleading..Is it over in Arizona?

As any first year law student can tell you, pleadings are required simply to put the other side on notice of the general proposal of the complaint:  You injured me in tort, by doing "x".  One simply puts the other side on notice, and if they are interested [as they always are], then they ask for discover.

This blog blurb from the Scottsdale blog tells us the current story in Arizona.  His warning?  Use facts, and lots of them.

"There's a new case out this week from Division Two, Cullen v. Koty-Leavitt Insurance, which deals with the reasonable expectations doctrine in the UIM setting. The case is not particularly fascinating from a substantive perspective, but it raises questions about potential legal malpractice exposure.

In sum, Cullen filed a UIM claim based upon the fact that his family was given the right to privately use a business vehicle. The vehicle was owned by the business, Sierrita Mining and Ranch Company, and had UIM coverage with Auto Owners. The named insured was the business, and there were no additional insureds.

Cullen was injured while riding in another vehicle and filed a UIM claim with Auto Owners. The insurer denied his UIM claim, he then filed suit and the trial court dismissed the action.

First, the Court of Appeals expressly adopted the Supreme Court's holding in Bell Atlantic Corp. v. Twombly, the case that overruled the familiar Conley v. Gibson standard for dismissal.

This is a significant move and one wonders how the Arizona Court of Appeals, which is bound to follow the Arizona Supreme Court on such matters, saw fit to disregard the Arizona Supreme Court and unilaterally adopt the United States Supreme Court's Twombly holding. In any event, doubt no further, the "notice pleading" landscape has changed in Arizona as follows:

"While a complaint attacked by a Rule 12(b)(6) . . . motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Instead, the complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level."
The Court stated "when a complaint fails to recite at least the basic facts supporting a claim for relief, we cannot see how a defendant would have fair notice of the nature and basis of the claim." "


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$50 Million Legal Malpractice over Parking Spaces

From NY Lawyer we get this report:

"Pillsbury Winthrop Shaw Pittman partners Paul Tummonds Jr. and Patrick Potter are the targets of a $50 million malpractice complaint filed by former client Capitol Hill Group.

According to the complaint filed on September 7 in D.C. Superior Court, the plaintiff owned property at 700 Constitution Ave. N.E., leased to a nursing home and a hospital. At issue was the number of parking spaces needed.

Initially, the city said 85. When a neighborhood group appealed, Capitol Hill Group tapped Tummonds and Potter for help. According to the complaint, the D.C. Board of Zoning Adjustment first rejected the appeal. The board reconsidered a portion of its denial, however, and eventually issued a final order requiring 177 parking spots. That was in September 2004.

And now for the rub — Capitol Hill Group claims that its counsel did not inform it of the final order until the spring of 2005. At that point, the property had too few spaces, and the group could no longer appeal. The result, according to the complaint: upwards of $50 million in losses. "

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Online Research of Jurors or Legal Malpractice?

Blogs and trials have been a recent confluence.  Dr. Flee, who blogged his own trial was one [well reported by the New York Personal Injury blog of Eric Turkowitz.

Now, jurors are coming into the mix. editor and blogger Robert J. Ambrogi suggests that the failure to root out and research these bloggers could be legal malpractice.

"As blogger Matthew Wheeler sat in a Milwaukee courthouse this week for jury duty, he amused himself with Twitter postings such as "Still sitting for jury duty crap. Hating it immensely. Plz don't pick me, plz don't pick me," and "More like Jury DEpreciation Month! So this is Purgatory, eh." Unfortunately for Wheeler, he did get picked for what the <i>Milwaukee Journal Sentinel</i>'s Proof and Hearsay blog describes as "the mother of all trials" -- a six-week lead-paint injury case. But at least the lawyers in the courtroom knew of Wheeler's blog and Twitter postings before he was selected. Circuit Court Judge Richard Sankovitz had decided at the outset to ask all potential jurors, "Do you blog?"

Then there is the Chicagoland blogger known only as Erin, who posted earlier this month that "somebody actually put me on a jury" and "i can't wait to decide the lives and deaths of men tomorrow." After Robert W. Kelley wrote about her at his Florida Jury Selection Blog, she answered back with a post captioned, dear members of the florida bar: welcome to my shitty blog. Kelley said that Erin's blog was pointed out to him by jury consultant Amy Singer, who wrote, "This blog post illustrates the necessity of online searching venire panelists for information."

These two recent examples of blogging jurors demonstrate that there is no longer any question of the need for lawyers to ask potential jurors if they are writing online, says another jury consultant, Anne Reed, writing at her blog Deliberations. The question now, she says, is not whether to ask, but how. "There are nearly countless ways a juror could be writing on line," she explains. "You need some sense of the landscape to ask about them, or you'll get partial answers or answers you don't understand." To that end, she offers the first in what she says will be a multipart guide for lawyers to the world of social networking.

As for Erin, her perspective on all this may be the most prescient. Acknowledging the to-do over blogging jurors, she comments:

"okay i didn't write my thesis on psychometrics or anything (yes i did) but i bet if you dismissed every potential juror with some type of internet presence you would end up with range restriction galore. EVERYBODY UNDER THIRTY IS ON THE INTERNET. those are my peers." "

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What are the Most Common Errors in Legal Malpractice?

Wisconsin legal malpractice insurers have published a breakdown of legal malpractice claims.  Here, reported by Bonnie Shucha in the University of Wisconsin blog, are the most commonly sued for mistakes:

Calendaring - 23%

Failure to know or properly apply law - 14%

Planning error in choice of procedures - 13%

Inadequate discovery & investigation - 12%

Failure to obtain consent/inform client - 6%

Why calendaring?  It is the easiest to see.  Calendaring mistakes lead to dismissals for failure to appear, which is sublimely easy to comprehend and explain to a judge/jury.

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Contract v. Tort and Statute of Limitations in Legal Malpractice

Tort and Contract are alternative explanations of differing duties.  In tort, the duty arises simply from the agreement to perform, and then failing to heed the standard of care, with damages.  In contract, the dury arises from an agreement to perform certain specific tasks.  As an example, the agreement to prosecute an appeal.  when that does not get done, there is both a tort and a contract cause of action.  Here is an article discussing these principals in an Arizona context. Posted In Blog Articles
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Legal Malpractice from the Lemon Law Perspective

This [and the last?] century seem to be overwhelmingly linked with social changes and legal process.  Law suits have proliferated, there are more lawyers then ever, social change may happen more because of a docket than any other reason.  Here is an example:  the lemon law.  Previously caveat emptor, this simple social protective device has morphed into an industry.

Here is another take on a case we reported yesterday.  A spurious legal malpractice counterclaim and the aftermath.


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Holocost Dual Representation Legal Malpractice Decision

We reported on this yesterday, and here is the decision in this unusual dual representation Nazi looting and holocost case coupled with legal malpractice claims. Posted In Blog Articles
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Many Legal Malrpactice Defense Attorneys Pitted Against Each Other

These attorneys, all former Ohrenstein & Brown lawyers, were tenants of the WTC,   The firm received a big WTC payout.  Who were partners, who were not?  That is the question in this case. 

The common link is that these attorneys all do legal malpractice defense work. 

"In a lawsuit filed last year in Manhattan Supreme Court, former Ohrenstein & Brown partners Annmarie D'Amour, John R. Sachs and Philip Touitou charged that five other partners conspired to keep almost $4 million of the insurance money - a huge windfall for the small firm - for themselves, shutting out the firm's other members (NYLJ, Apr. 28, 2006).

The suit alleges they did this by declaring themselves equity partners and the others non-equity, distinctions the plaintiffs claim had not existed at the firm prior to the arrival of the insurance payout. But the five partners targeted in the suit maintain Ohrenstein & Brown had long operated as a two-tier partnership in which they were the only equity partners and the only ones entitled to the money. The five partners are Manfred Ohrenstein, the former Democratic leader in the state senate; Michael Brown; Christopher Hitchcock; Geoffrey W. Heineman and Abraham Havkins.

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Estate "Sharp Dealing" by Attorneys

Speaking of Sordid settlement techniques, as in the last post, here isa "sharp dealing" estate matter where an attorney was named as executor:

A New Jersey attorney and his client, who last May escaped conviction on charges they unduly pressured an elderly widow to name them as executor and beneficiary of her multimillion dollar estate, now are trying to avoid punitive damages.

A New Jersey appeals court ruled last December that although Ronald Casale and his client, Dr. Ronald Sollitto, could not be forced to pay attorney fees to the beneficiary they effectively disinherited, a jury could still assess punitive damages against them.

Last week, Casale and a lawyer for Sollitto argued to the state Supreme Court that to allow such a remedy would clog the courts and drastically alter the law of trusts and estates.

The case, In the Matter of the Estate of Madeline Stockdale, A-121-06, stems from a challenge to a 2000 will drafted by Casale that named Sollitto, his friend and longtime client, as the chief beneficiary of Madeline Stockdale's estate and Casale the sole executor. The challenger was the Spring Lake First Aid Squad, which under an earlier will would have received most of the estate.

Casale drafted the later will for Stockdale, a nonagenarian, while she was in a rehabilitation facility recovering from a hip fracture. It was executed on Jan. 3, 2000, a day before she had throat surgery.

The same day, Stockdale also signed a real estate contract -- drawn up by Spring Lake, N.J., solo Thomas Foley on instructions from Sollitto -- by which she agreed to sell Sollitto her Spring Lake home for $1.3 million. The contract required only a $1,000 initial deposit, followed by a second deposit of $56,000, with Stockdale taking back a purchase money mortgage for the rest. The will drafted by Casale excused Sollitto's obligation to pay off the mortgage, since as residuary beneficiary the money would go to him anyway.

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Bribery, Extortion and Legal Malpractice

Settle a big case?  Do it on your own?  Have a little help from inside insurance company employees?  Here is a story of sordid settlement techniques:

"A Texas lawyer indicted for allegedly paying two former employees of The Hartford Financial Services Group Inc. insurance settlement kickbacks has accused the employees of extorting $3 million from him.

Todd Hoeffner, 42, made the accusation in response to a malpractice lawsuit filed against him by his clients. The lawyer accused the two employees of The Hartford of forcing him to pay them $3 million from fees he earned representing 1,000 victims of silicosis. The insurer's employees threatened to block settlements of the cases if he didn't pay the bribes, he alleged.

"Employees of The Hartford held hostage the legal rights of Hoeffner and his clients in a plan calculated to enrich themselves," Chris Flood, his lawyer, wrote in papers filed Monday in federal court in Corpus Christi, Texas.

In June, Hoeffner was, himself, charged with bribing two former Hartford claims handlers, Rachel Rossow, 41, of Redding, and John Prestage, 36, of Newington. The three planned to share attorney's fees obtained from more than $34 million in settlements for Hoeffner's clients, the government alleged. His clients were exposed to lung-destroying silica dust in their jobs as sandblasters and foundry workers.

Hoeffner, Rossow and Prestage have been charged with conspiracy, mail fraud, wire fraud, conspiracy to commit money laundering and money laundering. "


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Civil Court or Supreme Court - It Could be Malpractice

The New York Court system is Byzantine.  There is Supreme Court, Civil Court, District Court, County Court, Surrogate's Court, and so on.  Where to bring an action?  In Civil Court, of course, the upper limit of jurisdiction is $ 25,000.  In Supreme Court, unlimited.  Defendant attorneys here brought a car case in Civil court, and now have lost summary judgment on whether that was legal malpractice.  Still to come?  Whether there was proximate cause and whether plaintiff passed the car accident threshold. Ironicallythis case too ended up in Civil Court.

David v. Mallilo & Grossman, 300574 TSN 2006 ,decided: September 26, 2007
Judge Manuel J. Mendez ,NEW YORK COUNTY Civil Court

Judge Mendez

"Upon a reading of the foregoing cited papers on this motion for partial summary judgment on liability and this cross motion for summary judgment dismissing the complaint it is the decision and order of this court that the motion is granted to the extent of finding defendants negligent as a matter of law, the cross motion is denied.


Plaintiff brings this legal malpractice action against the defendants for their failure to file a summons and complaint in the Supreme Court of the State of New York, thereby depriving them of the ability to obtain a significant monetary amount In damages for the injuries they sustained in a motor vehicle accident on January 25, 2003.

Plaintiffs are husband and wife. On January 25, 2003 plaintiff Steven David was operating his motor vehicle in which plaintiff Rosalie David was a passenger. While their vehicle was stopped in traffic it was struck in the rear by another vehicle, causing their vehicle to strike the vehicle in front and allegedly causing Rosalie David serious physical injuries, requiring surgery. Mrs. David was taken by ambulance from the scene of the accident to a local hospital where she was treated at the emergency room and later released. She was given pain killers and told to visit with her physician. Since she was in pain she visited her orthopedist, Dr. Jacob Rozbruch, on January 28, 2003.

Dr. Rozbruch had seen Mrs. David for an injury she had sustained to her right shoulder on January 20, 2003, five days before the automobile accident, when she tripped and fell on her right shoulder. When she visited him on January 28, he ordered an MRI which revealed a "full thickness tear of the rotator cuff" in the right shoulder. He suggested surgery to repair the injury, which was performed on February 6, 2003.

Plaintiffs contacted defendants approximately one week after the accident and retained them to prosecute their claim. Defendants were aware of the injuries sustained by Mrs. David, of the need for surgery to repair the injury and of the actual surgery performed on February 6, 2003. Despite knowing this, defendants filed their summons and complaint on June 27, 2003 in the Civil Court County of New York, demanding $25,000.00 in damages, thereby limiting Mrs. David to a recovery of $25,000.00 or less for her injuries.

The mistake was discovered during the latter part of the year 2003 and in March of 2004 defendants made a motion in Supreme Court New York county to transfer the action to that court and to increase the demand to $1,000,000.00. The motion was denied by the Hon. Kibbie F. Payne by decision order dated May 14, 2004 in which he stated : "All of the facts on which plaintiff relies in support of the motion were known or available to plaintiff at the time the complaint was served. Thus, because plaintiff has failed to make a sufficient showing by explaining the delay in making the motion, or why the monetary jurisdiction of the Civil Court would be inappropriate under the circumstances, the application is denied . . . accordingly, the application is denied in all respects and the petition is dismissed without prejudice to renewal upon adequate papers." [see Exh D &E plaintiff's papers]. Justice Payne's decision was affirmed by the Appellate Division First Department by memorandum decision dated December 15, 2005 [ See Exh. F & G plaintiff's papers].

Following the denial of the motion and affirmance of the decision, the automobile accident case was settled for $25,000.00. Plaintiffs started this legal malpractice action against defendants by filing a summons and complaint in Supreme Court State of New York, County of New York demanding $750,000.00 for plaintiff Rosalie David and $100.000.00 for Steven David, as the amounts they would have recovered in the automobile accident case if it had been filed in the proper court.

Plaintiffs now move for an order granting partial summary judgment, declaring defendants liable as a matter of law to plaintiffs for legal malpractice, and setting this case down for an immediate trial for the determination of damages. Defendants cross move for an order granting them summary judgment and dismissing plaintiffs complaint. Defendants assert in their motion that plaintiff Rosalie David did not sustain a serious physical injury under New York State Insurance Law § 5102 (d), because it cannot be ascertained if the rotator cuff tear was the result of the trip and fall on January 20, or the automobile accident on January 25, 2003."

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Federal or State Jurisdiction in Legal Malpractice II

Here is a second case from the Federal Circuit,  Air Measurement Technologies v. Akin Gump, which is a more simple application of federal question jurisdiction.  Here the issue on appeal was whether the Federal District Court had subject matter jurisdiction over this non-diverse state court legal malpractice action.  District court and the Appellate Court both determined that the case involved a substantial federal question - patent law- and held that the court did indeed have jurisdiction, and that the matter was to continue in District Court and not be remanded. Posted In Blog Articles
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Federal or State Jurisdiction in Legal Malpractice

Here is a widely reported Federal Circuit Case, Immunocept v. Fulbright & Jaworsky which discusses, in great detail when a legal malpractice case, brought in state court, and removed to district court may become subject to the law of jurisdictions other than the state in which it was brought.

As an example, a legal malpractice case arising from a simple car accident  [which coincidentally has full diversity of citizenship] may be removed to District Court, but will not be subject to Federal law.  In this contra-similar case, which arose under Patent law, and is subject to federal question jurisdiction, federal law will apply.  Here the statute of limitations was implicated.


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Holocost Reparations and Legal Malpractice

No decision has been published yet, but Anthony Lin at the NYLJ reports that this legal malpractice case has been dismissed.  It arises from representation of nieces and nephews of holocost victims from the 1930's.

"A Manhattan federal judge has thrown out a legal malpractice suit arising out of competing Holocaust restitution claims.

In 2005, a group of nieces and nephews of Jewish publisher and art collector Gustav Kirstein and his wife Clara, both of whom died in Germany in the 1930s, sued their former lawyer, New York's David J. Rowland, claiming his mistakes caused them to have to share restored property and funds with another claimant.

But in Nordwind v. Rowland, No. 04 Civ. 9725, Judge Donald C. Pogue, sitting by designation in the Southern District of New York from the U.S. Court of International Trade, granted summary judgment to Rowland, finding that the relevant German restitution law would not have permitted the nieces and nephews a full recovery.

After their deaths, the Kirsteins' estate passed to their daughters, Gabrielle Jacobsen and Marianna Baer, both of whom had emigrated to New York, where Jacobsen died in 1957 and Baer died in 1986.

The nieces and nephews retained Rowland in 1998 to represent them in seeking restitution for property lost or seized during Nazi rule. That included a number of art works as well as bank accounts. The nieces and nephews had been assigned Marianna Baer's interest in the Kirstein estate by her daughter-in-law Miriam Reitz Baer.

But Jacobsen's interest passed to her adopted son Godfrey, who died in 1980, naming a woman called Christel Gauger as his sole heir. Rowland determined Gauger held Gabrielle Jacobsen's interest and sought to represent her as well. She would receive a 50 percent interest in property and funds restored to the Kirstein estate, with the other half going to the nieces and nephews. "

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Legal Malpractice, an Arrest of Attorney, Not Imputed to Clients?

Here is a rare case of a legal malprctice/arrest of an attorney for allegedly forging a court order so that his clients would not know that he had forgotten to file and serve a summons and complaint.  Forgetting happens all the time, lying to clients sometimes, forgery rarely, arrests almost never.  The twist?  Clients not hurt!  Complaint may be served 4 years late.  The story:

"Laurence S. Jurman of Dix Hills allegedly forged the name of Supreme Court Justice William Rebolini (See Profile) to a judicial order in a civil lawsuit filed as the result of the dispute, according to a statement issued by the Suffolk County District Attorney's Office in May of this year.

On Wednesday, Mr. Jurman, 40, appearing without counsel, pleaded not guilty to a single count of criminal possession of a forged document in the second degree, a class D felony punishable by 2 1/3 to 7 years in prison. Mr. Jurman was released on his own recognizance by District Judge Paul Hensley (See Profile) and is due back to court on Nov. 19.

Mr. Jurman, who was admitted to the state bar in 1991, allegedly advised his clients, plaintiffs who were dissatisfied with the pace of their lawsuit, that Justice Rebolini on May 4 had denied a motion to vacate a nonexistent default by defendants. He subsequently supplied plaintiffs with a copy of the order purportedly signed by Justice Rebolini.

Mr. Jurman could not be reached for comment Friday night.

The background of Mr. Jurman's arrest is spelled out in a decision handed down last month by Supreme Court Justice Edward D. Burke (See Profile) allowing the plaintiffs more time to effect service of a summons and complaint that had laid dormant since being filed four years ago.

In Yahney v. Wolforst, 16106/03, Justice Burke refused to penalize plaintiffs Jeff and Deborah Yahney for relying on Mr. Jurman.

The decision appears on page 20 of the print edition of today's Law Journal.

"While the court acknowledges the absence of diligence and the extended length of the delay of four (4) years in effecting service upon the defendants, both of these factors are attributable solely to egregious conduct on the part of the plaintiffs' former counsel, which this court will not impute to the plaintiffs," the judge wrote.

He said he was forwarding a copy of his order and supporting papers to the district attorney and the grievance committee of the Tenth Judicial District.

According to the decision, the Yahneys accused Joe and Orsola Wolforst of negligently building a retaining wall and berm, resulting in water damage to the Yahneys' property due to the changed grade of their land.

Around June 2003, the Yahneys retained Mr. Jurman to sue the Wolforsts for monetary damages and a permanent injunction.

On June 10, 2003, a summons and complaint was filed in Suffolk County Supreme Court and an index number assigned. And that is where the legal process ended, Justice Burke said.

"Plaintiffs expected that the defendants would be served with the summons and complaint and that the action would proceed in the normal course," he said. "However, this action remained dormant and without any judicial intervention as the same was not initialized by the filing of a Request for Judicial Information until the interposition of this ex parte application for relief pursuant to CPLR 306-b on September 20, 2007." "

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A Turnabout: Client Malpractice?

Client hires attorney.  Attorney works on case, very hard, and does a good job?  Other problems arise, such as criminal investigations of client.  Client drops case.  Attorney loses contingent fee.  Can attorney sue client for lost fee?  Here, the case says NO !.

"In a short opinion, the Court rejects the plaintiff law firm’s effort to create a new rule of client liability. The Court explains that the law firm’s legal theory would distort the complex calculus about whether to pursue litigation and “mock[] the idea of client control.” In the instant case, it’s no surprise that the client decided not to pursue civil litigation in the face of multiple criminal investigations and fraud claims, and the client acted within its rights by opting to concentrate its resources and energy on these more serious legal issues. Although the result is “admittedly harsh” to those lawyers who toil away with the expectation of a windfall contingency, that’s just the nature of the game. "

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Day on Torts on Legal Malpractice

Here is the well known blogger, Day on Torts, writing about legal malpractice causation and proximity.  Another way to put this [in a sports metaphor] "no harm, no foul."

"Causation in Legal Malpractice Cases
Negligence without causation is like a biscuit without country ham (or blackberry jam).

Now, I'm not so sure that juries pay as much attention to the concept as lawyers and judges, but causation is an element of every cause of action in the tort world.

This decision out of Michigan reminds us that causation must be proved in a legal malpractice case. The lawyer blew the deadline for filing a notice of appeal - clearly negligence - but was not found liable as a matter of law because the appeal was denied on the merits. Read the decision in McCabe vs. Miller & Associates, LLP, No. 275498 (MI. Ct. App. October 9, 2007) here. "

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Legal Malpractice Upgraded

An attorney who admittedly commits legal malpractice, in a Michigan case, has his discipline upgrated.  The story:

"An Adrian attorney who admitted mishandling a client’s civil case was slapped with a 30-day suspension for failing to cooperate with a Michigan Bar Association investigation of a complaint filed by the client.

Under an order issued Sept. 11 by the Michigan Attorney Discipline Board, John D. Baker was suspended from practicing law from Wednesday through Nov. 9. The panel’s opinion pointed out that Baker made efforts to correct his error in failing to file a lawsuit in a traffic accident injury case, including a payment of his own funds to the client along with obtaining a $6,000 insurance settlement.

The mishandling of the case warranted only a reprimand, but the Attorney Discipline Board raised the punishment to a suspension “based upon respondent’s complete failure to cooperate with the grievance administrator’s investigation,” the panel’s opinion stated. "

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Kaiser Steel, Retirees and Legal Malpractice

For us, [possible] corruption in land deals in California always brings the memory of Chinatown.  Here is a story of a limestone mine whose proceeds were to fund a retirement account for former Kaiser Steel retirees.  The mine was vauled at more than $100 milliion, yet was sold by the trustees for $ 3.5 million.  Litigagion followed.  the details:

"Parts of a limestone mine meant to secure the futures of Kaiser Steel retirees appear to have been sold off for a fraction of their market value.

The Cushenbury Mine, which supplies the essential component of concrete to the booming construction trade, is thought to be worth hundreds of millions of dollars.

But a parcel expected to produce 80 million tons of high-quality limestone estimated to be worth more than $100 million allegedly was sold to Mitsubishi Cement Corp. in December 2000 for $3.15 million.

Three other parcels were sold to Mitsubishi Cement and another mining company, Specialty Mineral Inc., for a fraction of their value in 2001 and 2003, a lawsuit filed on behalf of the retirees on Sept. 30 alleges. "

In the suit against the two mining companies that bought the land, Redlands law firm Welebir & McCune also sues San Bernardino law firm Gresham Savage Nolan & Tilden.

It accuses two of the firm's lawyers, M. William Tilden and Robert W. Ritter Jr., of legal malpractice, fraud and conflict of interest because their firm allegedly represented both the trust and Mitsubishi Cement in negotiating the land sale.

The firm's legal counsel was unavailable for comment Friday, Gresham Savage spokesman Mark Ostoich said. "

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Danger in a Legal Malpractice Counterclaim

Attorney sues for fees, and the reflex reaction is to couter-punch, or as it is put in pleadings, counter-claim.  No harm in defending oneself?  This NJ case illustrates the dangers.

CUYLER BURK, LLP, Plaintiff-Respondent,   vs. ROBERT M. SILVERMAN, ESQ., Defendant-Appellant. Argued: September 10, 2007 - Decided October 9, 2007: Before Judges Cuff, Lisa and Lihotz.  On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-135-03.

 "On January 13, 2003, Cuyler Burk filed a complaint to collect the fees incurred by defendant in the amount of $18,747.94. Defendant filed an answer to the complaint and a counterclaim in which he asserted a legal malpractice claim against plaintiff. On August 19, 2003, Cuyler Burk notified defendant's attorney that it considered the counterclaim frivolous and that it would move for sanctions.

On August 20, 2004, two months after the deposition of his expert, defendant dismissed the counterclaim. Following the submission of a stipulation of dismissal with prejudice of plaintiff's complaint, plaintiff filed a motion for sanctions pursuant to N.J.S.A. 2A:15-59.1 and Rule 1:4-8.

In a written opinion filed on December 22, 2005, Judge Harper held that the legal malpractice counterclaim was frivolous. The judge held that Cuyler Burk was a prevailing party because defendant withdrew his complaint after defendant's expert changed his opinion during his deposition. In other words, "the withdrawal of the complaint was done to avoid anticipated defeat, and as such, it is not a voluntary dismissal, but instead an acknowledgement that the Plaintiff would prevail."

Judge Harper also found that the counterclaim was commenced in bad faith. He found that the evidence was undisputed that Cuyler Burk had made attempts to resolve the case on defendant's behalf and that he dragged his feet frustrating the firm's effort to expeditiously and favorably resolve the case. He characterized the counterclaim as a tactic to frustrate the firm's ability to collect the fees owed to it by defendant. Judge Harper also found that defendant knew or should have known that the counterclaim was "without any reasonable basis in law." Furthermore, the judge found that defendant's contention that plaintiff recommended that he not settle the disciplinary matter is "patently untrue." The judge also found that the affidavit of merit submitted by one attorney and the expert report submitted by another were founded on inadequate and incomplete facts.

Once Judge Harper ruled that Cuyler Burk was entitled to an award of fees and costs, it submitted an affidavit of services in which it sought fees and costs in excess of $105,000. On April 24, 2006, Judge Harper conducted a plenary hearing on the fee request at which Cuyler testified in support of the firm's application ."

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Law Firm Web Sites, Links and Legal Malpractice

We read a blog blurb from Eric Turkowitz at his New York Personal Injury Blog which caught our eye and interest.  He discusses a unique warning letter by the Dozier internet Law firm, and the  potential legal malpractice consequences.

"Some lawyer at an outfit calling itself Dozier Internet Law sent a cease and desist letter on behalf of one of its clients, along with this threat:

Please be aware that this letter is copyrighted by our law firm, and you are not authorized to republish this in any matter. Use of this letter in a posting, in full or in part, will subject you to further legal causes of action.
Right. So Public Citizen, after publishing the entire letter on its website, tossed down the gauntlet on behalf of their client with this repsonse:

By this letter, we are inviting you to test the validity of your theory that the writer of a cease and desist letter can avoid public scrutiny by threatening to file a copyright law suit if his letter is disclosed publicly on the internet.
The writer of the original letter, Donald Morris, seems to have clearly done his client a grave disservice with this stupidity. (I mentioned this the other day in my personal injury law round-up, but thought this chuckleheaded conduct needed its own post.)

 Perhaps his threats have succeeded before, but the result is that the letter, and the claims against his client, are now being re-broadcast across the internet."can only think of two reasons for Dozier to publish such a letter on their site: The first is sheer folly, since it draws yet more attention to the charges against the company they wish to defend.

The second is more troublesome. Is Dozier simply trying to create more controversy, and thus more links to their website and hopefully more business? That will surely be one result of publishing a letter to Public Citizen on their website instead of reaching out to them privately. But this would also raise very troubling issues regarding attorney ethics and legal malpractice since this is seems to me clearly detrimental to their client. I prefer the first explanation -- that it is sheer folly and not an ethical breach -- though a savvy Internet based business must surely anticipate the repercussions to their client of additional commentary on the subject.

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Legal Malpractice at the Male Strip Clubs

There is a certain pressure to try to catalogue the vast world of legal malpractice.  Certainly, the court cases, the news releases about law firms being sued are all fodder...but this story stretches the envelope, no?

"Centerfolds Inc. began operating under an adult-entertainment license in 1995, according to Katherine Schubert-Knapp with the city's Executive Administration Department. In so doing, its owner, Mark Overton, snagged one of only five adult-cabaret licenses allowed under a moratorium the city maintained for more than 18 years, before U.S. District Judge James Robart struck it down in September 2005, finding "that the City's current licensing scheme is unconstitutional." (The moratorium wasn't formally lifted until last June.)

That 2004 warrant is significant for Overton because, two years earlier, he dissolved Centerfolds as a corporation and obtained a new license as a sole proprietor. Under that designation, Overton is personally responsible for any debts incurred by Centerfolds. Gowrylow says some people choose the sole-proprietor route to avoid the costs associated with incorporation. Overton's corporation was maintained by attorney John Hess, who was disbarred in 2001 for legal malpractice, one year before Overton became a sole proprietor. "

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Legal Malpractice at the Male Strip Clubs

There is a certain pressure to try to catalogue the vast world of legal malpractice.  Certainly, the court cases, the news releases about law firms being sued are all fodder...but this story stretches the envelope, no?

"Centerfolds Inc. began operating under an adult-entertainment license in 1995, according to Katherine Schubert-Knapp with the city's Executive Administration Department. In so doing, its owner, Mark Overton, snagged one of only five adult-cabaret licenses allowed under a moratorium the city maintained for more than 18 years, before U.S. District Judge James Robart struck it down in September 2005, finding "that the City's current licensing scheme is unconstitutional." (The moratorium wasn't formally lifted until last June.)

That 2004 warrant is significant for Overton because, two years earlier, he dissolved Centerfolds as a corporation and obtained a new license as a sole proprietor. Under that designation, Overton is personally responsible for any debts incurred by Centerfolds. Gowrylow says some people choose the sole-proprietor route to avoid the costs associated with incorporation. Overton's corporation was maintained by attorney John Hess, who was disbarred in 2001 for legal malpractice, one year before Overton became a sole proprietor. "

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Coal, Politics, a $ 50 million verdict and Legal Malpractice

This story is all about energy, coal and political connections,  We'll exerpt it for you:

"More than five years after a Boone County jury decided against it in a coal contract dispute, Massey Energy Co. is arguing its resulting appeal today to the state Supreme Court.

The jurors awarded $50 million in damages to Harman Mining and company president Hugh Caperton, a cousin of former Gov. Gaston Caperton.

Post-judgment interest has increased that award daily. It now approaches $76 million. Lawyers for Massey have also asked the justices to consider reducing that component of the judgment, The Associated Press reports.

As it did in a 2006 federal lawsuit, later dismissed, the leading coal producer blamed much of the delay in appealing on a court stenographer who allegedly botched the trial transcript badly after repeatedly failing to deliver it on time.

Harmon alleged that Massey ruined the company after voiding a 10-year sales contract. "Massey contends Harman filed for bankruptcy because of mounting losses at its Grundy, Va., mining operation and other problems that had nothing to do with Massey," AP reports.

The Supreme Court has posted the briefs filed by both sides in the case. The court's web site also hosts streaming video of its motions and arguments dockets.

The pending appeal may prove one of the most-watched of the term, which began Sept. 11.

Massey and its supporters have cited critical comments by Justice Larry Starcher in seeking to remove him from hearing the case.

The other side points both to Justice Elliott "Spike" Maynard's longtime friendship with Massey chief Don Blankenship, and to Blankenship's bankrolling of a multimillion-dollar ad campaign that helped elect Republican Justice Brent Benjamin over then-incumbent Warren McGraw in 2004.

As AP notes, "Massey has since sued the Kentucky law firm that defended it in the Harman case for legal malpractice. The coal company blames the firm for losing a related claim pursued by Harman in Virginia, which yielded a $6 million judgment against Massey."

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Asbestos Legal Malpractice against Several National Law Firms

This case which is being reported [with some glee] by the asbestos defendant [the complaint mentions Lorillard Tobacco Co., however] claims that several law firms that were admitted pro haec vice in Cleveland committed negligence and fraud,  The Legal Pad blog fills out the story:

"If Bay Area plaintiff’s attorney Christopher Andreas never returned to Cleveland, it would probably be too soon. But a former client wants him back so a jury can hear malpractice claims against Andreas and his firm.

In a complaint (.pdf) filed Oct. 3 in an Ohio state court, Jack Kananian, Andreas’ former client, said he was forced to settle an asbestos suit against Lorillard Tobacco Co. at a discount because of “negligent professional misconduct” by Andreas. Kananian also accused Andreas’ firm, Brayton Purcell of Novato and Early, Ludwick & Sweeney, a firm based in New Haven, Conn., of committing malpractice.

“The collective negligent conduct of all named defendants fell below the acceptable standards of skill, care and diligence requisite in the legal representation of a client,” David Forrest, a Cleveland attorney representing Kananian, said in the complaint.

Kananian’s claims appear to be based on a Cleveland judge’s ruling in January that said Andreas and his firm tried to cash in fraudulent asbestos claim forms then lied in court to cover it up, among other lawyerly no-nos. Andreas has denied those allegations. "

Whats the asbestos-tobacco connection?

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Legal Malpractice after Criminal Conviction in Tennesssee

Hinshaw reports this case: Ellis J. Burnett v. Daryl M. South, Slip Copy, 2006 WL 4497729 (Tenn.Ct.App. 2007)

"Tennessee Appeals Court Concludes Criminal Defendant Client May Bring Legal Malpractice Action Before Seeking or Receiving Post-Conviction Relief . The court held that a criminal defendant who wished to sue his attorney for legal malpractice following a conviction could do so before obtaining relief from the conviction in order to avoid the “Catch 22” situation posed by the one-year statute of limitations for legal malpractice actions. The case may then be stayed to see whether the legal malpractice plaintiff is able to obtain relief from the conviction. "

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Legal Malpractice Case against a Legal Malpractice Law Firm

This case illustrates the difference between legal malpractice claims and overbilling claims.  Ironicly, the defendant law firm concerntrates [specializes?] in legal malpractice litigation.

Gamiel v Curtis & Riess-Curtis, P.C. ,2007 NY Slip Op 07341 ,Decided on October 4, 2007
Appellate Division, First Department 

"Plaintiff's affidavit was conclusory (see Murray Hill Invs. v Parker Chapin Flattau & Klimpl, 305 AD2d 228, 229 [2003]), and failed to set forth the requisite "but for" causation with respect to her legal malpractice claims (see Aquino v Kuczinski, Vila & Assoc., P.C., 39 AD3d 216, 218-219 [2007]), a deficiency not remedied by her attorney's affirmation. However, we find that plaintiff sufficiently set forth the merit of her claims concerning overbilling and the withholding of her files to
preclude summary resolution of those claims (see Batra v Office Furniture Serv., 275 AD2d 229 [2000]). "

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Attorney Fee Dispute Morphs into International RICO Campaign

This report from Law.Com  tells the story of an international quest for payment on a divorce attorney fee, as well as the underlying monies due from a rich husband to the wife and an attorney.

"Lawyers whose clients refuse to pay their fees routinely file lawsuits and win judgments against them. But attorney Ellen Marshall's disputes with a former divorce client have been anything but routine. Then again, Warren Matthei is no ordinary client.

Matthei, a millionaire stockbroker from Summit, N.J., spent nearly a decade in jail -- first for refusing to pay child support to his ex-wife and later for refusing to pay Marshall's attorney fees. Marshall obtained an $85,000 judgment against Matthei, but court records show she has all but given up on getting the money from Matthei.

Instead, in a separate lawsuit, Marshall is pursuing RICO claims against lawyers in Pennsylvania and London, England, who, she claims, have assisted Matthei in hiding his assets from her.

Now a federal judge has refused to dismiss the lawsuit in a scathing opinion that says "this dispute exemplifies why there are reports of the public's disdain for lawyers."

In her 46-page opinion in Marshall v. Fenstermacher, U.S. District Judge Gene E.K. Pratter dismissed Marshall's federal RICO claims, but found that she may nonetheless have valid RICO claims under New Jersey law against attorney Ronald Fenstermacher and his firm, High Swartz Roberts & Seidel, in Norristown, Pa., and British attorney David Burgess and his London law firm, Hetherington & Co. To understand Marshall's claims against the Norristown and London lawyers, one first needs to understand Marshall's long history with Matthei. "

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Legal Malpractice Verdict and Eventual Disbarment

This is an otherwise unremarkable story about an attorney who made a mistake.  Mistakes happen all the time, and when a client is hurt by the mistake, the attorney is guilty of legal malpractice.  Reasonable and competent attorneys make mistakes, and have insurance to cover their mistakes.  This attorney was so unreasonable and obsessed, he was eventually disbarred.

What we loved in this story  were the names of some of these injunctions and motions:

"Courts had entered Bills of Peace and Perpetual Injunctions in a failed attempt to put the matters to an end. The Georgia Supreme Court had imposed sanctions for frivolous appeals three times. The court now has ordered disbarment"

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Stoneridge, The US Supreme Court, and Legal Malpractice

Front page of the Wall Street Journal is all about the US Supreme Court Stoneridge case.  Asode fr, what it will mean for the securities industry, the WSJ believes this to be the largest potential widening of liability for lawyers.

Keep watching this case for its legal malpractice or lawyer liability issues.

 "The Supreme Court is wading into one of the most intense battles ever waged between two deep-pocketed enemies: the trial bar and big business.

Today, the justices will hear arguments in a case that hinges on whether defrauded shareholders should be allowed to sue not just the company that committed the crime, but also its advisers, lawyers, accountants and vendors
The showdown comes at a time when the plaintiffs bar is losing ground. In June, the Supreme Court sided with business when deciding what standard of proof plaintiffs must meet to file securities lawsuits against companies. Earlier this year, the justices essentially inoculated Wall Street firms from antitrust claims. The Bush administration says it is working with regulators on a series of recommendations to "balance" the U.S.'s competitive position with shareholder litigation."


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Can a [Potential] Federal Judge Commit Legal Malpractice?

Here is an interesting report on a trial loss, potential legal malpractice at the trial level, and then a really big mistake on appeal.  The last mistake is said to have been committed by a newly nominated Federal Judge Duncan Getchell, Jr.

"Two years ago, someone made a huge mistake at the Virginia Supreme Court – a clerical error that cost a client a chance to win an $8 million appeal.

“If there is a more terrifying lawyer story than this one, I don’t want to hear it,” wrote one legal analyst, L. Steven Emmert of Virginia Beach, who runs a Web site called Virginia Appellate News & Analysis.

It was a simple goof – someone forgot to file a trial transcript – but it caused the Supreme Court to throw out an appeal of an $8 million jury verdict.

The lead attorney for that appeal was E. Duncan Getchell Jr., who has been nominated by President Bush for a judgeship on the 4th Circuit Court of Appeals, based in Richmond.

Getchell, of Richmond, is a partner with McGuireWoods, one of the largest and most powerful law firms in Virginia.

Was he responsible for the mistake?

It is not clear who was supposed to physically deliver the transcript – Getchell, another lawyer or a paralegal – but court records show that Getchell took over as lead attorney after the verdict in July 2004. Another law firm handled the trial.

Getchell’s firm filed the first post-trial motions three weeks after the verdict, and Getchell personally argued those motions. He also signed the notice of appeal that stated, incorrectly, that the trial transcript had been filed.

Every document after that was signed by Getchell. He was the lawyer in charge when the error was made.

On the other hand, the insurance company that paid the $8 million does not blame Getchell – yet. For now, the company is suing the trial attorney and his law firm in a legal malpractice case to recover the money.

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Defamation, Bad Faith and Legal Malpractice

Here is a report from Law.Com on an appellate reversal after a trial on a bad faith and legal malpractice case.  Plaintiff said that the insurance company should have offered to settle the case within policy limits, and that its defense attorneys committed malpractice.  The jury agreed, while the judge did not.  Now the appellate court has sided with the jury.

"The Pennsylvania Superior Court has reversed a Philadelphia judge's decision to toss out a $3 million verdict awarded to a real estate brokerage that sued its insurer and lawyer after it was hit with an $11.4 million verdict in a defamation suit.

In its 24-page opinion in Marie Miller Century 21 Alliance Inc. v. Continental Casualty Co., a unanimous three-judge panel found that Philadelphia Common Pleas Judge Allan L. Tereshko had no basis for overturning the jury's awards against either the insurer or the lawyer.

In the suit, Marie Miller and her company, Century 21/Marie Miller & Associates, argued that Continental Casualty (also known as CNA) should have settled the defamation case prior to trial, and that news of the verdict had harmed its business.

The plaintiffs also brought a legal malpractice claim against attorney Jonathan D. Herbst and his firm, Margolis Edelstein, claiming that he, too, should have settled the case before Miller was hit with a massive verdict "

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Failure to Take Administrative Appeal and Legal Malpractice

Here is a case from the 2d Department in which plaintiff was represented by defendant attorneys in an EEOC suit.  She lost at the administative lefel, and her legal malpractice suit alleged that defendants did not appeal from that original dismissal, committing malpractice.  Their motion for summary judgment failed.Lamanna v Pearson & Shapiro ,2007 NY Slip Op 06956 , Decided on September 25, 2007 ,Appellate Division, Second Department

"The plaintiff alleges, inter alia, that [*2]the defendants failed to take an administrative appeal from an adverse determination of the Equal Employment Opportunity Commission (hereinafter the EEOC) made in a proceeding they commenced on her behalf and that but for their negligence, she would have prevailed on her administrative appeal or would have been successful in pursuing her discrimination claims in Federal court. In support of their motion, the defendants failed to proffer sufficient evidence to establish, prima facie, that the plaintiff would not have been successful in an appeal from the EEOC determination or that they had properly preserved her right to seek review of her claims in Federal court.

The defendants' failure to make a prima facie showing required the denial of the motion, regardless of the sufficiency of the opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853). Accordingly, the motion for summary judgment was properly denied (see Suydam v O'Neill, 276 AD2d 549, 550). "

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Strip Searches at McDonalds and Legal Malpractice

Plaintiff's case ended with a verdict.  Now, the attorneys are battling over the legal fees generated.  This McDonald's Strip Search case reported in the Kentucky Law Review blog ended in a plaintiff's verdict.  Now the aftermath

"The battle over money in the McDonald's strip-search case didn't end with yesterday's verdict.

Louise Ogborn's original lawyers, whom she fired, filed a lien on the judgment to make sure they are paid for their work.

But Ogborn has sued those lawyers -- William C. Boone Jr. and Steve Yater -- for legal malpractice.

The lawyers claim that the suit is nothing more than an effort by Ogborn's current lead counsel, Ann Oldfather, to avoid sharing fees.

In court papers filed with the legal malpractice suit, Ogborn claims that those two lawyers committed malpractice by making concessions in her case without her knowledge after McDonald's discovered they had allegedly made an ethics violation by notarizing the affidavits of witnesses after they had signed them.

During the four-week trial, Ogborn also claimed Boone and Yater forced her to submit to interviews with The Courier-Journal and ABC's "Primetime" that damaged her psychologically and diminished the value of her case. Lawyers outside the case have said that Ogborn lost the opportunity to leverage a large settlement from McDonald's once the company was exposed to bad publicity.

The malpractice suit was filed in circuit court in Spencer County, where Ogborn lives, but a judge there has ruled it must be pursued in Bullitt County, where it has been refiled and is pending. "

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Estate Planning Legal Malpractice in NJ

Here is a case which, on the one hand point up how disfunctional families can become, while on the other hand, point out how intertwined and difficult estate planning with mutual trusts and wills are.  From a reading of this case, we think the family really did not like one of the sons, and the parents [or was one a step-parent ?] disinherited one kid.  This simply led to a lot of litigation, and in the end, the kid got a more or less fair share.  It looks like everyone paid big legal fees to get to that position.

"Following Grace's death, Elliot reviewed both his mother's and step-father's will. Elliot filed a caveat against the probate of Grace's will, alleging undue influence. Additionally, Elliot filed an exception to the approval of the trustees' final accounting, following the administration of Sidney's estate. Elliot challenged the distribution of the assets of Sidney's estate to Barry and Leslie. A Jamieson partner, other than Leavitt-Gruberger, defended the estates of Grace and Sidney against Elliot's claims and appeared on behalf of the co-trustees. Both sides filed motions for summary judgment. Contrary to the arguments presented, the reviewing judge determined that the issues presented posed a factual dispute as to Sidney's intention in drafting the provisions of Part "B"; additional discovery and a plenary hearing were ordered. To avoid the additional expense of the contested proceeding, plaintiffs settled Elliot's claims against both estates for $130,000.

Thereafter, plaintiffs filed the instant legal malpractice action, contending that Leavitt-Gruberger negligently drafted the will. Plaintiffs asserted that when taken as a whole, the provisions of Part "B" failed to unambiguously satisfy Sidney's intention because it contained confusing and competing instructions to the trustees. Plaintiffs argue that the trust presented "inconsistencies that created the impression that Grace was a major beneficiary." This ambiguity prevented the court from dismissing Elliot's action, and necessitated a plenary hearing to decide whether "it was inappropriate to deplete the trust of all assets while Grace was still alive." Further, because "trustees owe a fiduciary duty to all beneficiaries," Leavitt-Gruberger placed plaintiffs in an unsupportable position as trustees, by advising them to distribute trust assets to themselves, as beneficiaries, to the exclusion of Elliot. Such draftsmanship was "irresponsible and caused plaintiffs to incur enormous legal fees defending Elliot's law suit."

Defendants' motion for summary judgment was returnable on July 21, 2006. Plaintiffs argued Leavitt-Gruberger did not clearly draft the testamentary provisions to unambiguously present Sidney's desire to allow Elliot to share in his estate only if he ended his estrangement with his mother. Plaintiffs urged that the proper estate planning vehicle to accomplish Sidney's purpose was a limited power of appointment. At the very least, plaintiffs argued that the documents should have specifically thwarted any self-dealing claims if the trustees exercised the granted powers and depleted the assets. Additionally, plaintiffs stated that the power to deplete principal contained in section (b)(2) of Article Third was limited by an ascertainable standard so that principal distributions were to satisfy only needs similar to maintenance, support, education, and health. Leavitt-Gruberger's advice to the contrary was incorrect.

After concluding plaintiffs failed to prove by clear and convincing evidence that the trust provisions as written did not properly reflect Sidney's intent, the motion judge determined the benefits designated for Grace were "alternative provisions" to those allowing Barry and Leslie to distribute the principal in their non-reviewable discretion. The motion judge concluded that the trust clause was "broad" and that "it permits the trust to be exhausted . . . including the whole thereof. . . . [I]t's my conclusion that there is nothing ambiguous about this, it's not a question of ambiguity." "

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Mutually Exclusive Positions in a Legal Malpractice Case

This is a  NJ case of legal malpractice, but it touches on "judicial estoppel"  "mutually exclusive positions" the difference between "successive and alternative tortfeasors" and what is in New York called the "effectively compelled" rule.  In New York a legal malpractice plaintiff must prove that a settlement was effectively compelled by the attorney's mistakes, and was not simply a strategic position.

Here in this NJ case:

"While plaintiff in the first action could have joined the defendants in this case, he did not do so, nor did he put the defendants in the first action on notice of the Arnold defendants' potential liability to the plaintiff. It would have been perfectly acceptable for plaintiff in the first action to have advanced alternative theories of liability. See City of Jersey City v. Hague, 18 N.J. 584, 603 (1955). Rather than doing so, however, plaintiff proceeded with his first action against the sellers, realtors, home inspector and other defendants and settled same.

Plaintiff pleaded the defendants in both of these suits as alternative tortfeasors rather than joint or successive tortfeasors. Joint tortfeasors are "two or more persons jointly or severally liable in tort for the same injury to persons or property, whether or not judgment is recovered against all or some of them," N.J.S.A. 2A:53A-1. The test for joint tortfeasor liability is whether defendants had "common liability at the time of the accrual of plaintiff's cause of action." Markey v. Skog, 129 N.J. Super. 192, 200 (Law Div. 1974); and see Cherry Hill Manor Assoc. v. Faugno, 192 N.J. 64, 76 (2004). A successive tortfeasor is one whose liability succeeds that of an initial tortfeasor; for example, a doctor who negligently treats a party injured at an accident caused by an initial tortfeasor. See, e.g. Ciluffo v. Middlesex General Hosp., 146 N.J. Super. 476, 484 (App. Div. 1977), (holding that when a plaintiff settles with an initial tortfeasor for less than the full amount of her damages, she may proceed against the successive tortfeasor for the remainder of her damages).

In this case, the Arnolds are alternative tortfeasors, meaning that once plaintiff recovered from the sellers, he can not recover from the Arnolds. This is because the alternative theories advanced in each of the law suits are based on mutually exclusive inconsistent factual allegations. In going against defendants in the first action, plaintiff alleges that he was not appropriately informed of the serious structural defects in the home. In pursuing his cause against the Arnolds he states he was advised of the serious defects, directed his attorneys to terminate the contract or negotiate a reasonable price reduction to accommodate the repairs and that the attorneys negligently failed to do so. These are two mutually exclusive factually-based theories of liability against two groups of defendants. By settling with the sellers and the other defendants in the first action, plaintiff is estopped from proceeding against the attorneys. This is because in this factual setting the inescapable fact is that the plaintiff could not have recovered against both groups of defendants. See Norcia v. Liberty Mutual Insurance Co., 297 N.J. Super. 563, 570 (Law Div. 1966), aff'd o.b., 308 N.J. Super. 194 (App. Div. 1998), certif. denied, 154 N.J. 608 (1998). If plaintiff had joined all defendants together in the first action, an award against both the attorney defendants and defendants in the first suit, would have been impossible under the mutual exclusive alternative factual theories advanced.

We believe though, that the trial judge mistakenly used the phrase "judicial estoppel" as the rationale for her ruling. Judicial estoppel binds a party only to a position that it successfully asserted in the same or prior proceeding. Kimball Inter. v. Northfield Metal, 334 N.J. Super. 596, 606 (App. Div. 2000). Plaintiff by settling did not successfully advance for judicial acceptance his position. Hence, the doctrine of judicial estoppel does not apply.

That judicial estoppel is not applicable does not mean, however, that plaintiff may advance against defendants in a later suit a position that is mutually exclusive and factually inconsistent with a position advanced against other defendants in an earlier suit. Plaintiff's choice to institute the first action without joining his alternative tortfeasors as co-defendants, and his election to settle the case against the seller defendants and receive those settlement funds can be viewed as confirming plaintiff's assertion that the sellers failed to adequately disclose the conditions of the property. See, e.g., Norcia v. Liberty Mutual supra, at 569.

While we recognize that a party may advance an alternative and inconsistent pleading under Rule 4:5-6, we hold that a plaintiff is estopped from pursuing a successive action against a tortfeasor where: (1) plaintiff earlier settled a suit against other tortfeasors for the same damages; (2) the preceding suit was based upon a mutually exclusive inconsistent position with the successive action; (3) all of the alleged tortfeasors in both suits are alleged to be liable to plaintiff for the same damages but on the basis of a different standard of care or duty; and (4) plaintiff failed to provide the required Rule 4:5-1(b)(2) notice in the preceding suit. Such estoppel is in accord with fairness and public policy. See, e.g., Puder, supra, 183 N.J. Super. 428. Estopping plaintiff from bringing this action is consistent with our court's policy of favoring settlements, promoting judicial economy, promoting party fairness, encouraging comprehensive and conclusive litigation determinations, avoiding fragmented litigation, preserving the integrity of the judicial process, and insuring candor and fair dealing with the courts.

The initial defendants, if informed of potential co-defendants, could have joined them and may have differently evaluated their litigation and settlement strategies. The attorney defendants, while they might file a third-party complaint against the initial defendants for indemnity or contribution in this case, would be prejudiced by having to advance plaintiff's initial factual position without the cooperation of plaintiff - a difficult task where plaintiff's allegation was he was defrauded. "

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Virginia, West Virginia and a $50 Million Legal Malpractice Case

Two things cought our eye in this blog blurb from the West Virginia Business Litigation Blog.  The first is that one can watch a webcast of appellate proceedings in W.Va.  and the second is that this legal malpractice case is about a petition for appeal [similar to a cert request??] which is alleged to have been muddled for the attorney's benefit. 

"According to the article by Gazette reporter Paul J. Nyden, Massey and two related entities have sued Wyatt, Tarrant & Combs, LLP of Lexington, Kentucky and McGuire Woods LLP of Richmond, Virginia for their alleged malpractice in representing Massey in a Virginia lawsuit filed by Hugh Caperton and his companies. In 2001, a Virginia jury awarded the plaintiffs $6 million. The Virginia Supreme Court refused Massey’s appeal because it was filed by a lawyer from Kentucky who wasn’t admitted to practice in Virginia. Massey ended up paying Caperton $7.2 million, including $1.2 million in pre-judgment interest. Here is Massey’s complaint, which was filed on July 13, 2007 in the Circuit Court of Fayette County (Lexington), Kentucky.

Massey alleged claims for negligence, breach of contract, and breach of fiduciary duty/conflict of interest, and claimed that the defendants failed to have a lawyer admitted to practice in Virginia sign the notice of appeal, which resulted in the dismissal of the appeal by the Virginia Supreme Court. Further, Massey alleged that the defendants changed language in its petition for appeal without Massey’s knowledge and for the purpose of making a legal malpractice claim more difficult to assert. Specifically, Massey alleged that the petition in draft form asked that the Supreme Court “reverse and remand” the verdict and “reverse and render final judgment.” But in the final version, only the “reverse and remand” language was included.

According to the complaint, if the defendants had properly filed the notice of appeal and not changed the language in the petition for appeal, “the Virginia Supreme Court would have reversed the judgment of the trial court due to its erroneous rulings at trial and entered final judgment in Wellmore’s [one of the plaintiffs] favor.” "

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Legal Malpractice in a Land Deal

Caveat:  We can't figure out this land deal from the News report.  Here it is:

"Developers behind the failed Pendleton Station project are firing back in court documents against allegations that they misused loan money.

Benjamin Daniel Sr., Benjamin Daniel Jr., Elizabeth Daniel and Thomas Daniel, the family members who ran Pendleton Station LLC, Coastal Plains Development, and the project’s major suppliers, denied claims that they misused money from Enterprise Bank of South Carolina and allege that the bank’s top officials were conspiring against them.

“I look forward to seeing what evidence they have to support it,” said Tom Dudley, a Greenville attorney who represents the bank.

Enterprise Bank says the Daniels and their related companies owed it more than $5.5 million at the beginning of the year.

But the family’s court filings say Enterprise Bank refused to allow construction loans on 10 units at Pendleton Station to be closed. Those units would have brought in $1.6 million. Court filings claim that the bank agreed to give Pendleton Station more money if William Spence, chief financial officer at Coastal Plains Development, cosigned for the loan and if the Daniels offered a piece of Daniel Island property worth about $750,000 as additional collateral.

William Cutchin represented the family and Mr. Spence in the transaction, but at the closing he presented sale papers to Ms. Daniel instead of a secured loan.

Under this new deal, the property was to be sold to Mr. Spence for $300,000, and the bank would pay Pendleton Station’s outstanding debts. When the Daniels could repay Mr. Spence, he would convey the land back.

The latter part of the arrangement never made it onto paper. When the family offered to pay Mr. Spence, he refused to sell it back for less than market value, according to court filings.

Mr. Daniel Sr. was hospitalized for cancer treatment at the time, and the filing claims that the bank and other parties involved in the transaction conspired to force Ms. Daniel into a vulnerable position so she would give them the property at less than half its value.

A similar situation occurred with property Mr. Daniel Sr. was developing on Lake Murray called The Club at Plantation Point, according to the family’s filing.

The family also accuses Mr. Cutchin of attorney malpractice for not advising Ms. Daniel during the land transactions. Mr. Henry and Mr. Mathias are charged with conspiracy. "

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Legal Malpractice Probate Claims in Florida

One would expect a lot of probate work in Florida, as well as a more moderate amount of medical malpractice litigation there.  As surely as night follows day, there will be mistakes, miscommunications and legal malpractice claims where there is legal work.  Probate work involves transfers of money, and one might expect litigation over mistakes in money transfers.

With that, the insurance industry follows the trends.  Here is a blog blurb from the Florida Probate blog which discusses an industry report.

"Against this backdrop, a recently published article by LawPRO, a Canadian professional liability (malpractice) insurance provider, should be of interest. Wills & estates law claims on the rise by Deborah Petch and Dan Pinnington provides claims statistics and risk management advice specifically focused on the probate/estate planning practice area. Although written for a Canadian audience, the advice seems equally applicable in Florida.

I was especially interested to see that "lawyer/client communication failures" was far and away the single most common cause of malpractice claims. This finding is in line with the med-mal statistics and "don't-be-a-jerk" risk management advice given to doctors I previously wrote about [click here]. Another way of stating the don't-be-a-jerk rule is: respectfully listen to and communicate with your clients. "

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Legal Malpractice Morphs into Federal Criminal Charges

This story of an Arkansas lawyer who is alleged to have stolen money moved from the mere mistake, to theft, to tragedy, and then legal malpractice.

"Rogers tax attorney now faces federal charges of transporting stolen funds in addition to state theft charges.

Eric Dean Archer, 36, of Rogers was arraigned Wednesday in Fort Smith on the one-count federal indictment. He was given a Nov. 13 trial date.

If convicted, Archer faces up to 10 years in prison and fines of up to $250,000 or both.

Archer pleaded not guilty Aug. 6 to a theft of property charge in Benton County. Archer was arrested in May in Tunica, Miss., after Carol Fountain and her son, Charles, told police their 2005 federal tax returns, and payment, never reached the Internal Revenue Service.

Archer told police someone embezzled $300,000 from his business, including the Fountains' money, and an insurance company was investigating. Rogers police say Archer never filed a report with them.

The Fountains have also filed a civil lawsuit against Archer in Benton County. That suit claims Carol Fountain gave Archer a check for $36,000 to pay her amended 2005 taxes but he never paid the IRS. Charles Fountain gave Archer $8,300, which was never paid to the IRS, according to the suit.

The civil suit alleges legal malpractice, breach of contract, conversion and constructive trust.

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A Florida Real Estate Development Legal Malpractice Case

Land development in Florida was many years ago the subject of many a scam, with people buying property under water, in swamps and other undesirable places.  Now, the stakes are higher, and the problems less obvious.  Here is a story from Lauderdale about Harborage Club dry-storage marina in Fort Lauderdale’s marine district .

"Two days before the City Commission was to consider the project in May, residents of the nearby Mark I condo building asked Atlantic Marina Holdings for $550,000 and other conditions to quell their opposition to the 15-story project.

The developer didn’t pay, and the city approved a site plan in May for a 340-boat waterfront project at 1335 SE 16th St. about a quarter mile from the landlocked condo building at 1050 SE 15th St.

With approval in hand, Atlantic Marina turned around and sued the Mark I association, its law firm Becker & Poliakoff and several area residents in Broward Circuit Court last summer.

The Mark I proposal was “nothing less than an unlawful, extortionate ‘shakedown’ attempt,” the developer declared in an August court filing in its lawsuit seeking $40 million in damages.

The battle between the condo residents and Atlantic Marina is hardly isolated.

Across South Florida, land-starved developers have pushed into established areas with grandiose plans. "

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The "Two Dismissal" Rule in Washington and Legal Malpractice

Underlining why one does not litigate where one does not know the rules, here is an otherwise meritorious legal malpractice case which is now dismissed with prejudice for breaking the Washington state "two dismissal "rule.  Hinshaw explains:

"In March 2004, Feature filed a new complaint in Seattle against Mr. Neal and Preston Gates, but not Butler. Following a successful motion to change venue to Spokane, Washington, the defendants moved for summary judgment based on the so-called “two dismissal” rule found in Washington CR 41(a)(4), which provides “[u]nless otherwise stated in the order of dismissal, the dismissal is without prejudice, except that an order of dismissal operates as an adjudication upon the merits when obtained by a plaintiff who has once dismissed an action based on or including the same claim in any court of the United States or of any state.” Id. at *2. The lower court granted the summary judgment motion. Feature appealed and the case was transferred to the Supreme Court of Washington for direct review. Id. at *2.

The court noted that the purpose of the “two dismissal” rule was to prevent the abuse and harassment of defendants and the unfair use of dismissals. The court noted that the language of CR 41(a)(4) did not allow for court discretion and operated as a nondiscretionary adjudication on the merits when the dismissals are unilaterally obtained. The court also asserted that the rule should be strictly construed and that if a defendant stipulated to the dismissal or the dismissal was by court order, then it was not unilateral and the rule did not apply. On the other hand, the court would not look to the parties’ intent if the requirements of the rule were met. See also Spokane County v. Specialty Auto & Truck Painting, Inc., 103 P.3d 792 (2004); Burnett v. Spokane Ambulance, 933 P.2d 1036 (1997). "

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Watch Out for 90 Day Notices!

Here is a budding legal malpractice case, arising out of a medical malpractice action.  2 defendants serve 90 day notices, and plaintiff tries to file a Note of Issue.  Clerk rejects NOI, and instead of immediately making a motion seeking more time, or the right to file a NOI, plaintiff puts the entire matter aside.

"Contrary to the defendants' contentions, the Supreme Court could not have properly dismissed the actions for the plaintiffs' failure to comply with the October 23, 2000, compliance conference order. Although a compliance conference order which directs a plaintiff to file a note of issue, and warns that the failure to do so will result in dismissal of the action, may constitute a valid 90-day notice pursuant to CPLR 3216 (see Bowman v Kusnick, 35 AD3d 643; Hoffman v Kessler, 28 AD3d 718), here the plaintiffs' counsel was not present at the October 2000 compliance conference, and there is no evidence that the compliance conference order was ever properly served upon the plaintiffs.

However, the Supreme Court should have dismissed the actions based upon the plaintiffs' failure to comply with the 90-day notices served by the defendants in May 2005. Where a party is served with a 90-day notice pursuant to CPLR 3216, it is incumbent upon that party to comply with the notice by filing a note of issue or by moving, before the default date, to vacate the notice or extend the 90-day period (see Serby v Long Is. Jewish Med. Ctr., 34 AD3d 441; Randolph v Cornell, 29 AD3d 557; C & S Realty, Inc. v Soloff, 22 AD3d 515; Chaudhry v Ziomek, 21 AD3d 922). The plaintiffs did not file a note of issue before the default date set by the 90-day notices, and their August 2005 motion for an extension was rejected without being decided. Since the plaintiffs thus failed to properly respond to the 90-day notices within the allotted period of time, in order to avoid dismissal they were required to demonstrate both a justifiable excuse for the delay and the existence of a meritorious cause of action (see CPLR 3216; Serby v Long Is. Jewish Med. Ctr., 34 AD3d 441; Randolph v Cornell, 29 AD3d 557; Parkin v Ederer, 27 AD3d 633; Chaudhry v Ziomek, [*3]21 AD3d 922). Although the plaintiffs' August 2005 motion was rejected, they took no further steps to obtain an extension of time to file a note of issue until June 2006, when they responded to the defendants' motions to dismiss by filing the cross motion now under review. The plaintiffs offered no excuse to justify their extensive delay in seeking an extension, or their lengthy delays in prosecuting this action (see Harrington v Toback, 34 AD3d 640). Moreover, the plaintiffs failed to demonstrate the existence of a meritorious malpractice cause of action against Eswar (see Mosberg v Elahi, 80 NY2d 941, 942; Salch v Paratore, 60 NY2d 851, 852; Serby v Long Is. Jewish Med. Ctr., 34 AD3d 441; Randolph v Cornell, 29 AD3d 557; Burke v Klein, 269 AD2d 348). "

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Disbarred Attorney and Legal Fee Dispute

This situation comes up more often than we might imagine.  Disbared attorney refers cases to lawfirm which settles them. What fees may the disbared attorney demand?

Rothman v Benedict P. Morelli & Assoc., P.C.
2007 NY Slip Op 06934
Decided on September 25, 2007
Appellate Division, First Department

"Defendants' motion to dismiss the complaint should have been granted. "A disbarred, suspended or resigned attorney may not share in any fee for legal services performed by another attorney during the period of his removal from the bar" (Rules of App Div, 1st Dept [22 NYCRR] § 603.13[b]). Since plaintiff's disbarment occurred during the pendency of the six actions, he is barred from recovering on any of the referral agreements. Accordingly, his claim for breach of contract fails to state a cause of action (Eisen v Feder, 307 AD2d 817, 818 [2003]); Lessoff v Berger, 2 AD3d 127 [2003]). "

"As to plaintiff's unjust enrichment claim, while a disbarred attorney may be compensated on a quantum merit basis for legal services personally rendered prior to disbarment, "[t]he amount and manner of payment of such compensation . . . shall be fixed by the court on the application of either the disbarred . . . attorney or the new attorney, on notice to the other as well as on notice to the client" (22 NYCRR 603.13[b], supra; Eisen, supra). In contravention of this court rule, there is no evidence that any of the clients were given the requisite notice of this application. Also in contravention of this rule, plaintiff combined all six applications into this single proceeding brought in New York County when, at least with respect to the two pending [*2]actions, separate applications should have been made "in the court wherein the action is pending." Accordingly, plaintiff's unjust enrichment claim is also defective."

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Are Top GCs Hopping Around because of Legal Malpractice?

Qualcomm, Apple, Oracle.  Their GCs are moving around, and from this article, it seems as if they are playing musical chairs.  Is the music coming from Qualcomm's "legal malpractice?"

"In a shuffle between companies with legal challenges spanning the globe, Apple Inc. general counsel Donald Rosenberg is leaving for Qualcomm Inc. after just 10 months in the post.

Oracle Corp. general counsel Daniel Cooperman will replace Rosenberg on Nov. 1, Apple said Friday.

Rosenberg joined Apple last November, when the maker of iPod players and Macintosh computers was in the thick of a stock options scandal. His predecessor there, Nancy Heinen, is now fighting civil charges that she fraudulently backdated stock-options awards to the executive team and a grant to CEO Steve Jobs.

Jobs has a reputation as a tough boss, and his Cupertino-based company maintains an overflowing plate of legal work. In addition to shareholder lawsuits, Apple stays busy building and defending a large portfolio of patents and faces copyright concerns and anticompetitive complaints from a string of European agencies over its iTunes-iPod franchise.

Rosenberg, who spent more than 30 years at International Business Machines Corp. before joining Apple, is jumping to another general counsel post brimming with challenges.

San Diego-based Qualcomm, the world's second-largest provider of cellular phone chips, is under investigation in the U.S., Europe and Asia for antitrust claims. It also faces major legal battles with rivals Nokia Corp. and Broadcom Corp. over its patents.

Qualcomm's most recent general counsel, Lou Lupin, resigned in August after a string of legal setbacks and an embarrassing rebuke by a San Diego judge who said Qualcomm was dishonest and committed 'legal malpractice.'

Apple did not disclose why Rosenberg left.

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Divorce Legal Malpractice Case Dismissed

Here is an Appellate Division, Second Department case in which plaintiff is the law firm seeking fees after matrimonial work and defendant is the client.  Parola, Gross & Marino, P.C. v Susskind
2007 NY Slip Op 06850 ; Decided on September 18, 2007 ; Appellate Division, Second Department

Here, the client could not link up mistakes and damages.  "Here, the counterclaims failed to allege any material facts giving rise to a cognizable claim for legal malpractice (see Hartman v Morganstern, 28 AD3d 423). To establish a counterclaim to recover damages for legal malpractice, the defendant is required to show that the plaintiff failed to exercise the care, skill, and diligence commonly possessed and exercised by a member of the legal profession, that the plaintiff's negligence was a proximate cause of the loss sustained, that the defendant incurred actual damages as a result of the plaintiff's actions or inaction, and that but for the plaintiff's negligence, the defendant would have prevailed in the underlying action or would not have sustained any damages ( see Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300; Pistilli v Gandin, 10 AD3d 353, 354). Here, the defendant's counterclaims merely set forth conclusory allegations of negligence on the part of the plaintiff and wholly failed to allege any actual damages that he sustained as a result of the plaintiff's alleged negligence. "

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Legal Malpractice Coverage Continues Even after Attorney Leaves

In this Lexology report from Hinshaw an attorney was covered by the initial insurance even after leaving the firm, even for work later performed:

"Kimberly A. Jolley, et al. v. John J. Marquess, et al., ___A.2d___, 2007 WL 1518114 (N.J.Super.A.D.)

Addressing a question of first impression, the Appellate Division of the New Jersey Superior Court held that a malpractice insurance policy’s definition of “insured” – which included a former partner “while acting solely in a professional capacity on behalf of” the partner’s former firm – required the insurer to defend and indemnify for work the lawyer did both before and after he had left the firm. The decision has important things to say not only about the scope of malpractice coverage but also about the importance for attorneys and insurers alike of proper transfer of client matters when a lawyer leaves a firm. "

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No Legal Malpractice Insurance Disclosure in CA

The State of California has rejected a proposal to require attorneys to disclose whether they carry legal malpractice insurance.  Here is the story:

"The State Bar Board of Governors yesterday rejected rules that would have required California attorneys to disclose to clients and to the State Bar if they do not have malpractice insurance, and would have mandated that the State Bar identify uninsured attorneys on its Web site.

Saying that requiring that such information be posted on the Internet was “over the top,” President Sheldon H. Sloan cast the tie-breaking vote against the proposal, which was defeated by a vote of nine to eight.

The proposal would have amended the California Rules of Professional Conduct and the California Rules of Court.

Board members William Gailey, Jeffrey L. Bleich, Matthew Butler, George Davis, Jeannine English, James N. Penrod, John E. Peterson and James Scharf voted in favor of the proposal. Laura N. Chick, John J. Dutton, Richard A. Frankel, Holly J. Fujie, Jo-Ann Grace, Howard Miller, Danni R. Murphy, and Carmen M. Ramirez voted against it.

Vigorous Debate

The board split on adoption of the proposal after debating the issue and hearing testimony from a number of supporters and opponents. Although the board agreed that everyone was in favor of client protection, individual members disagreed on whether the proposal, or a broad mandate requiring all attorneys to obtain insurance provided by companies at an affordable level, was the best manner in which to proceed.

Supporters of the proposal framed the issue as a matter of client protection, while opponents such as Dutton pointed to the lack of empirical evidence supporting a need for the proposal. "

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A Sad end to a Sad Tale

We reported the story of an attorney who robbed a pharmacy three times in 11 minutes.  His story gets worse.

"An attorney accused of robbing a pharmacy three times in a span of a few minutes jumped head first from his fifth-floor hospital room Thursday, landing on the roof of a nearby two-story building.

Robert Behlen "vaulted himself" through a narrow window in his room and screamed as members of a sheriff's office tactical team on tethers tried to reach him from an outdoor ledge, Oklahoma County Sheriff John Whetsel said.

"Obviously, he was intent on trying to commit suicide," Whetsel said. "We were very hopeful to a different resolution."

Whetsel said Behlen was verbal and conscious following the fall. But he was listed in critical condition Thursday evening to repair a fractured pelvis and dislocated hip, sheriff's spokesman Mark Myers said. "

"They're trying to find out what else is wrong with him. He's taken a turn for the worse," Myers said.


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Shooting: The Old West Alternative to Legal Malpractice

We chanced across this story about Jesse James, his legal problems, and the proposed solution to being sued.  One Lawyer's Showdown With Jesse James

"The thought of a showdown with notorious Wild West bank robber Jesse James conjures up images of six-shooters drawn on a dusty main street. But it appears that one brave Missouri lawyer sought recourse from James in a more lawyerly way, by taking him to court -- and won. James elected not to appeal but, outlaw that he was, twice later tried to shoot the lawyer who beat him in court.

A modern-day Missouri lawyer, James P. Muehlberger of Shook, Hardy & Bacon, last month discovered documents detailing the litigation. His discovery and the story it reveals are reported this week in The Kansas City Star [via Bashman]. The timing of his discovery could not be better, given last week's release of the Brad Pitt movie, The Assassination of Jesse James by the Coward Robert Ford.

As Star writer Brian Burnes recounts, Ford may have been a coward, but young lawyer Henry McDougal was anything but. The case stemmed from an 1869 bank robbery in Gallatin, Mo., in which two robbers shot and killed the cashier. As they made their getaway, one robber's horse bolted, forcing the pair to escape on one horse. The horse they left behind was identified as belonging to James.

Outside town, the bank robbers encountered Daniel Smoote and forced him to hand over his horse. The smitten Smoote wanted to sue James, but could find no lawyer willing to take his case, until he met McDougal, then 25 and a lawyer for just a year. McDougal sued for attachment of the horse James left behind. Surprisingly, James retained a lawyer and responded with legal maneuvers of his own, asking the court to quash service of the complaint. After nearly two years of legal gun slinging, James refused to appear for trial and the court entered judgment for McDougal's client.

That was not the end of the case for James. In 1871, he rode into Gallatin with the aim of shooting McDougal, but failed. A decade later, a second attempt to shoot McDougal was also linked to James. None of that hurt McDougal's career -- he went on to become president of the Kansas City and Missouri bar associations and to partner with the lawyer who founded Shook Hardy. Even in the Wild West, it seems, justice prevailed. "

Posted by Robert J. Ambrogi on September 26, 2007 at 12:09 PM |
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Some Akin Gump Claims Dismissed in Legal Malpractice

The New York Law Journal reports that some of the hedge fund legal malpractice action against Akin Gump have been dismissed.

"A New York state judge has granted Akin Gump Strauss Hauer & Feld's motion to dismiss several claims filed against it by a former hedge fund client, but has permitted a fraud claim to go forward.

In February, James McBride and Kevin Larson, the principals behind the Veras series of funds, sued Akin Gump for $4.4 billion, claiming the firm advised them that the trading of mutual fund shares after the market close was a legal practice.

The funds, which had $1 billion in assets in 2003, were then investigated for "late trading" by the New York attorney general's office and the Securities and Exchange Commission. Veras wound up paying more than $36 million in penalties before shutting down.

McBride and Larson each paid $750,000 and were barred from the industry. Their lawsuit had asserted 11 causes of action against Akin Gump, but Manhattan Supreme Court Justice Bernard Fried ruled Thursday in Veras v. Akin Gump that five of the causes of action, including negligence, negligent misrepresentation and breach of fiduciary duty, were duplicative of Veras' legal malpractice claims.

The judge permitted Veras to proceed, however, with a claim that Akin Gump committed fraud by concealing conflicts "

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Big Fish, Smaller Town Dangers in Legal Malpractice

The axiom is that the gears of the law grind thoroughly, but slowly.  Here is an article from the Madison Record which has asiduously followed the Lakin Group legal malpractice law suit.  Now, defendant's attorney has to report his client's address, so that Lakin can be served with a deposition notice.  He didn't.  The Story: "Tom Lakin's attorney doesn't know where Tom Lakin lives.

Michael Nester of Belleville, defending Lakin in a legal malpractice suit, missed a Sept. 24 deadline to report Lakin's address to Madison County Circuit Judge Barbara Crowder.

Nester had written Sept. 14 that upon information and belief, Lakin resided in Florida.

Nester asked Crowder for a 10 day extension to confirm Lakin's residence, but 10 days later the mystery persisted." Posted In Blog Articles
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Will this Editor's Note lead to a Legal Malpractice Case?

We follow the new appellate decisions in the Case Prep Plus site.  Here is the full note on a case from this week entitled Harrison v Good Samaritan Hosp. Med. Ctr.    2007 NY Slip Op 06833
Decided on September 18, 2007 . Appellate Division, Second Department

"CIVIL PROCEDURE. CPLR 3126 NOTICE. FAILURE TO PROSECUTE. In this medical malpractice action, granting of plaintiff’s motion to vacate prior order dismissing the complaint, which was based upon defendant’s unopposed motion to dismiss for failure to prosecute, is affirmed. CPLR 3126 requires either the court or defendant to serve plaintiff with a written notice to resume prosecution within 90 days and that failing to do so will serve as a basis for a motion to dismiss. Here, because defendant’s notice only demanded that plaintiff resume prosecution of her action, the Supreme Court was without authority to dismiss the action under CPLR 3126. Harrison v. Good Samaritan Hospital Medical Center. [Editor’s comment: defense counsel might be subject to a legal malpractice claim should the case settle or result in a plaintiff’s verdict and judgment.]

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Twists and Turns in a Serial Legal Malpractice Saga

We needed a graph to try to figure out who did what to whom in this case. Levy v Laing
2007 NY Slip Op 06765  Decided on September 18, 2007  Appellate Division, First Department

" In 1986, defendant Jeffrey Laing retained plaintiff John Corcos Levy, Esq., for a one-third contingency fee, to prosecute a legal malpractice action against the law firm of Bushin & Rosman (B & R) for B & R's alleged negligence in an underlying personal injury action. In 1989, an order granting B & R's motion for summary judgment dismissing the legal malpractice action was reversed by this Court (149 AD2d 351). In 1990, Laing substituted the law firm of Gandin, Schotsky & Rappaport (GSR) for Levy. Levy and GSR then entered into a letter agreement giving Levy a 30% share in GSR's fee.

In 1993, the B & R legal malpractice action was marked off the calendar for Laing's failure to appear at a pretrial conference. Four years later GSR attempted to file a note of issue but a second motion by B & R to dismiss the action, this time pursuant to CPLR 3404, was granted. We affirmed (255 AD2d 113 [1998], lv dismissed 93 NY2d 957 [1999]).

Thereafter, in 2000, Laing retained the services of Andrew MacAskill, Esq. to commence a second legal malpractice action, this one against GSR, whose actions and/or inactions during the four-year hiatus had resulted in the final dismissal of the malpractice action against B & R. In 2004, the action against GSR settled for $125,000.

Now, in this action, Levy, appearing pro se, sues former client Laing to recover $10,000 as the reasonable value of his services in the B & R action. He claims that after assisting Laing in the GSR malpractice action, he advised Laing of his position that he was entitled to compensation for the work he did prior to their parting and Laing's retention of GSR. In response, Laing sent Levy $1000, which Levy rejected. "

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Attorney, Client Frivolous? Wrong Defendant Sued

Being a defendant is bad; being an erring plaintiff's attorney is probably worse.  Here is a case from Broolklyn in which a well known plaintiff's personal injury attorney now must show cause why she and her client were not frivolous.  Basically, it is said that they sued the wrong landowner, and did not dismiss after being shown their mistake.

Robertson v. United Equities Inc., 35178/04
Decided: August 31, 2007
Justice Arthur M. Schack

Supreme Court

Plaintiff: Regina Felton, Esq.

Felton & Associates

Defendant: Eli D. Gobol, Esq.

Goldberg Weprin & Ustin LLP

Justice Schack
Click here to see Judicial Profile

"Defendant, United Equities, Inc. (UEI), moves to: restore this matter to the Court calendar; grant summary judgment and dismissal to defendant UEI, pursuant to CPLR Rule 3212; and, impose sanctions and costs of $16,343.75 against plaintiffs and/or their attorney, pursuant to 22 NYCRR §130-1.1, because UEI it is not a correct entity to sue in this action. The Court restores this matter to the calendar to: grant summary judgment to UEI and dismiss the complaint against it; and, conduct a hearing, which will give plaintiffs and their counsel, Regina Felton, Esq., an opportunity to be heard as to why this Court should not sanction them and/or award defendant UEI costs for the "frivolous conduct" of plaintiffs and their counsel in continuing this action against UEI, a corporation that should never have been a party in this action. "

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Kentucky, Indiana Legal Malpractice and the "Tripartate" Relationship

Here is a blog commenting on a blog commenting on a blog.  It demonstrates the viral nature of this medium.  More to the point, it disucsses the relationship between a plaintiff, a defendant, his auto insruance comapny and the attorneys selected by the insurer.  As all know, there is an inherent conflict between the attorney, the insured and the insurer.  How this all plays out in legal malpractice and bad faith litigation is the subject of these cases.

"While perusing the Indiana Law Blog, I came upon this post entitled Ind. Decisions - Supreme Court decides insurance assignment case.

In this case styled State Farm Mutual Automobile Insurance Co. v. Ruth Estep, in which State Farm had offered its limits which were declined by the plaintiff. State Farm continued to defend, but a verdict was obtained against their insured in excess of those limits. The defendant assigned globally his/her causes of action to include those against State Farm and the lawyer whom they paid to defend the insured.

The Indiana Court held the assignment of the claim against State Farm was valid but not the legal negligence claim's assignment.

This is an interesting thought since within the context of Kentucky jurisprudence, the fabled "tripartite" relationship in which the lawyer owes a duty to both the insurer AND the insured might be possibly suspect in the event that a conflict of interest arises, an excess verdict, a perceived legal malpractice in the representation, and then the subsequent assignment by the individual defendant of his claims against his insurer and his lawyer. Even if the assignment of the legal negligence claim is "disallowed", how then do you separate the two sides of that tripartite relationship when the relationship goes sour.

Could this happen in Kentucky? Well, let me remind you that insurance defense lawyer's duties are being tested in the Court of Appeals in a case that has already been argued in which the focus is on which insurance policy will end up paying the plaintiff's excess judgment? The insurance defense law firm's malpractice policy or the insurance company that paid/hired them? See, Insurance Defense Lawyers Duties, Responsibilities, and Liabilities to be tested in Court of Appeals decision argued this past week which we posted this spring. "

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Web Podcast on Legal Malpractice and Computers

We guess that this is Web.3   Its a podcast  [that is, a audio web broaddast] on the use of computers, cumputer security and legal malpractice.  "
Jim Arden, a California litigating attorney who focuses on attorney malpractice and legal ethics, discusses the issues of computer security. Technology is a great tool that allows us to be more effective and more efficient. Along the way, however, we can have our tools corrupted" Posted In Blog Articles
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The Lakin Legal Malpractice Case goes Round and Round

From the Madison Record::

"Madison County Circuit Judge Barbara Crowder overlooked the obvious when she asked appellate judges if the Lakin Law Firm represented a woman, according to the woman's attorney.

George Ripplinger of Belleville, representing Suzanne Krause, asked Crowder on Sept. 13 to vacate an order she signed Aug. 23, certifying questions about the Lakins to the Fifth District in Mount Vernon.

Crowder's order found substantial ground for difference of opinion, but Ripplinger's motion yielded no ground for difference of opinion.

Ripplinger wrote that Lakin attorney Scott Meyer was actively involved day to day in Krause's personal injury claim.

As a minor by the name of Suzanne Topps, she suffered injuries when a tree limb fell on one of her legs in Tennessee. "

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Cadwalader, Wickersham & Taft's Legal Malpractice Case

Anthony Lin, in the NYLJ, reports on this securities based legal malpractice law suit:

"Cadwalader is one of the nation's top law firms when it comes to securitizations, and its large practice in the area has helped catapult the firm to the top of the profitability charts over the past few years. Such transactions involve the creation and issuance of tradeable securities tied to fixed assets or revenue streams, most commonly residential or commercial mortgages.

Nomura Asset Capital Corp., a U.S. division of Japan's largest securities firm, filed suit against Cadwalader last October in Manhattan Supreme Court over documents the law firm drafted for a 1997 securitization transaction in which Nomura pooled 156 commercial mortgages worth around $1.8 billion.

At issue in the Nomura suit are two separate warranties Cadwalader included in the documents for the transaction. Both warranties stated that each mortgage included in the pool "qualified" for special tax status under Internal Revenue Service regulations. But one warranty more specifically stated that this meant the mortgages were backed by properties worth at least 80 percent of the mortgage amounts.

That second warranty became a problem for Nomura after a number of the mortgages went into default. LaSalle Bank, which was holding the securitized pool in trust, sued Nomura on the grounds that the defaulting mortgages were not qualified, with one large mortgage secured by property worth only around 60 percent of the loan.

Nomura hoped to escape liability on the basis of a "safe harbor" provision of the IRS regulations, which state that mortgages should be 80-percent secured by property but allow that an issuer's "reasonable belief" about a property's value may be sufficient to qualify a mortgage. "

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Retained by the Estate or the Executor and Legal Malpractice

Attorneys are retained by persons, not entities, yet they come to represent entities, not only persons.  Here is a report from Hinshaw which discusses, in part, the problems of representation of the estate versus the executor, the statute of limitations, and related issues.

Estate of Albanese v. Lolio, 393 N.J. Super. 355, 923 A.2d 325 (2007)

"A New Jersey appellate court recently decided a case in which an estate, its executrix and two co-beneficiaries sought to recover for defendants’ allegedly negligent advice regarding the payment of federal estate taxes. That advice allegedly resulted in increased tax liability for the beneficiaries. The subject engagement agreement provided that the executrix retained defendant law firm “as attorneys to represent the Estate.” The agreement further provided that the attorneys would “advise us and cause all necessary and proper steps to be taken for the purpose of fixing and paying any and all Federal and state estate taxes.” It was signed by the executrix in her capacity as executrix and “individually.”

To pay the taxes, the executrix withdrew funds from an IRA and made distributions to each individual plaintiff, resulting in each one being liable for $298,000 in taxes, without being advised by defendants of the tax exposure or the alternatives. The lawyers contended that they were retained by the executrix solely in her capacity as executrix and owed no duty to the beneficiaries. The court rejected that argument because the executrix had also signed as an individual. But it agreed that the co-beneficiaries lacked standing to sue. "

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Real Estate Transactional Legal Malpractice

An ironic situation in legal malpractice is the inverse matchup of legal fees in residential real estate legal fees [especially for buyer] and the potential loss when the attorney fails his due dilligence.  Examples?  Bad title searches, poor monitoring of the deed filing, and this article:

"More dangerous is the issue of what if it's the previous owner's loan that was wrongly recorded. The previous owner is obviously no longer making payments on the property. The lender may or may not have been paid off properly; if they were there may not be any difficulties. It could just disappear into some metaphorical black hole of things that weren't done right and were never corrected, but just don't matter because everybody's happy and nobody does anything to rock the boat. However, unlike black holes in astronomy, things do come back out of these sorts of black holes.

However, if the previous lender was not paid off correctly, or if they were paid but something causes it to not process correctly, they've got a claim on your property, and because the usual title search that is done is county-based, it won't show up in a regular title search. Let's face it, property in County A usually stays right where it's always been, in County A. There is no reason except error for it to be recorded in County B. Therefore, the title company almost certainly would not catch it when they did a search for documents affecting the property in County A; it would be a rare and lucky title examiner who caught it.

In some states, they still don't use title insurance, merely attorneys examining the state of title. When the previous owner's lender sues you, you're going to have to turn around and sue that attorney who did your title examination for negligence, who is then going to have to turn around and sue whoever recorded the documents wrong. If it's a small attorney's office and they've since gone out of business, best of luck and let me know how it all turns out, but the sharks are going to be circling for years on this one, and the only sure winners are the lawyers.

In most states, however, the concept of title insurance has become de rigeur. Here in California, lenders don't lend the money without a valid policy of title insurance involved.

Let's stop here for a moment and clarify a few things. When we're talking about title insurance, there are, in general, two separate title insurance policies in effect. When you bought the property, you required the previous owner to buy you a policy of title insurance as an assurance that they were the actual owners. By and large, it can only be purchased at the same time you purchase your property. This policy remains in effect as long as you or your heirs own the property. The first Title Company, which became Commonwealth Land Title (now part of LandAmerica), was started in 1876, and there are likely insured properties from the 19th century still covered. If you don't know who your title insurance company is, you should. Most places, the company and the order of title insurance are on the grant deed. "


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Quantum Meruit and the Possibility of Big Recovery in Attorney Fees

An attorney may be fired for any reason at any time;  this is the rule in NY as well, apparently in California.  In this case, Mardirossian & Associates, Inc. v. Seth Ersoff, et al., ___Cal.Rptr.3d___, 2007 WL 1732896 (Cal.App. 2 Dist. 2007)  reported by Hinshaw attorneys were retained on a commercial case on a contingency.  They were fired, and the clients settled the case immediately thereafter.  What happens?

"Seth Ersoff and Sugar Ray Leonard retained Mardirossian & Associates, Inc. to represent them in a suit for breach of contract and fraud against Universal Management Services, Inc. (“UMSI”). Because of concerns about obtaining a recovery in the case, Mardirossian agreed to represent both Mr. Leonard and Mr. Ersoff for a 50 percent contingency fee of any settlement or award. The retainer agreement also provided that Mardirossian would have a lien on the cause of action for any recovery based on the reasonable value of legal services provided by Garo Mardirossian at $400 per hour and other firm attorneys at $220 per hour. The retainer further provided that if Mardirossian were discharged by the client, Mardirossian could seek the contingency fee or the reasonable value of services based on the quoted rates. Id. at *2.

After Garo Mardirossian had met personally with Mr. Ersoff and Mr. Leonard to determine he could represent both in the lawsuit, he obtained a signed waiver from each which stated they had “separate counsel with whom I have been given an opportunity to consult regarding this matter. I realize there may be conflicts between my goals and those of (Mr. Leonard or Mr. Ersoff). If there are any such conflicts of interest, I waive them.” Id. at fn. 2. After Mardirossian had filed the complaint, worked the case for seven months and prepared for a mediation scheduled for April 1999, Mr. Ersoff terminated the firm and settled the case nine days later for $3.7 million, while represented by a new firm. Id. at *2.

In November 2002, Mardirossian filed a complaint for quantum meruit seeking at least 50 percent of the $3.7 million settlement. The lower court found in favor of Mardirossian and held that it was entitled to reimbursement for the reasonable amount of hours worked on the case six years earlier. Since no hourly time records had been kept on this contingency matter, the attorneys who worked on the case reviewed the file and testified that they had spent approximately 3,700 hours on the case. The jury determined that 2,392 hours were reasonable for reimbursement, which resulted in an award of $645,440, plus interest. This appeal by Mr. Ersoff followed. Id. at *5.

Mr. Ersoff argued on appeal that because detailed time records were not kept by Mardirossian, the testimony from the firm’s attorneys regarding the estimated hours spent on the file was merely guesswork and should have been excluded from evidence. Id. at *6. The court rejected Mr. Ersoff’s argument, noting that there was no legal requirement that an attorney submit billing statements to support an attorney fee claim. “An attorney’s testimony as to the number of hours worked is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records.” Steiny & Co. v. California Electric Supply Co., 79 Cal.App.4th 285, 293, 93 Cal.Rptr.2d 920 (2000). The court rejected the cases cited as supporting precedent by Mr. Ersoff. It also noted that this case was distinguishable because each of the attorneys who testified had personal knowledge of the services performed for Mr. Ersoff and testified about the complexity of the issues and extent of the work that was necessary. 2007 WL 1732896 at *7. These are the types of factors relevant to proving the reasonableness of the fees, factors which also include the attorney’s skill and learning as well as age and experience. See Los Angeles v. Los Angeles-Inyo Farms. Co., 25 P.2d 224 (1933). It was appropriate for the parties to use expert witnesses to also address the issue of reasonableness. See Mattheisen v. Smith, 60 P.2d 873 (1936). The fact that the jury awarded less than the number of hours claimed by Mardirossian indicated that the jury had evaluated the testimony of the Mardirossian attorneys as to the time spent, as well as the expert testimony on the issue and had substantial evidence to support their findings.

Mr. Ersoff also contended that Mardirossian violated California Rule of Professional Conduct 3-310, which provides that an attorney may not represent multiple clients where the interests of the clients may potentially conflict without written consent following written disclosure. 2007 WL 1732896 at *12. The court noted that whether forfeiture of the right to collect the fees is appropriate depends on the egregious nature of the violation. Id. at *14, citing Pringle v. La Chapelle, 87 Cal.Rptr.2d 90 (1999). The court upheld the findings below that the written consent was adequate but that even if it was not, any violation was not egregious and therefore did not justify fee disgorgement. The court also agreed with the lower court that Mr. Ersoff would be unjustly enriched if his fee obligation to Mardirossian were excused. "

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Pan Am Legal Malpractice Case

This news article in Law.Com reports on the Pan Am v. Sheppard Mullin law suit:

"According to the complaint, Nadolny had forged a $320,000 bond meant to secure a settlement Pan Am had reached with the Air Line Pilots Association. When inspectors from the bond company came calling, Nadolny turned to attorneys at Sheppard Mullin, including John Fornaciari, a partner and white-collar defense attorney at the firm, for advice on how to best handle the insurance company's investigation. Nadolny had worked with Fornaciari in the past on Pan Am-related litigation in New England and in Florida.

Sheppard Mullin agreed to take Nadolny on as a client, but here's the interesting part: For several months it allegedly didn't inform Pan Am that it had done so, nor did it alert Pan Am to the problem with the pending bond. Pan Am alleges that this clandestine relationship resulted in damage to the company's reputation and a snarled Transportation Department proceeding that has remained stalled for two years.

And the bond, which Nadolny conjured out of thin air complete with a forged signature, wasn't the only misdeed involved. The former Pan Am senior vice president and general counsel pleaded guilty in late March in the U.S. District Court of New Hampshire to providing false financial information to the Transportation Department and was sentenced last week to six months in a federal prison. "

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Purchasing Legal Malpractice Insurance: A Primer

Here is a scholarly article on legal malpractice insurance called: Legal Malpractice Insurance, Surviving the Perfect Strorn. Posted In Blog Articles
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Louisiana Legal Malpractice Case

In this New OrleansCase:

"NEW ORLEANS - A federal appeals panel on Sept. 13 reversed and remanded a district court order dismissing a legal malpractice claim against an errors and omissions insurer and its insured law firm because the claimant had suffered a compensable injury sufficient to assert a legal malpractice claim (H.S. Stanley Jr., in his capacity as trustee of the bankruptcy estate of Gary Eugene Hale v. Clare W. Trinchard, etc., et al., Clare W. Trinchard, Esq., Trinchard & Trinchard Llc, Leigh Ann Schell; Clarendon National Insurance Co.; H. S. Stanley, Jr., in his capacity as trustee of the bankruptcy estate of Gary Eugene Hale, v. Clare W. Trinchard, etc., et al., Northwestern National Ins. Co. Of Milwaukee, Wis., Nos. 06-30120, c/w 06-30299, 5th Cir.; 2007 U.S. App. LEXIS 21937"

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Not Legal Malpractice, but, a bad day for this Lawyer

This is a shocking story.  "EDMOND, Okla. -- Police have arrested an attorney from Edmond on numerous charges after they say he robbed the same pharmacy three times within an 11-minute time span.

Authorities said Robert Behlen, 50, swallowed painkillers before leaving Barrett Drug Center for the final time on Tuesday morning. Police later arrested Behlen at his home on complaints of armed robbery, kidnapping and pointing a firearm.

Edmond police spokeswoman Glynda Chu said Behlen pointed the gun at employees and took several bottles of painkillers from the pharmacy, going in and out of the business three times in quick fashion. Chu said when officers found Behlen at his home, he did not cooperate and an officer used a Taser weapon on Behlen while making the arrest.

State court records list Behlen as an attorney on dozens of civil litigation cases. A phone message left at Behlen's law office Wednesday morning was not immediately returned.

Chu said Behlen was taken to Edmond Medical Center after his arrest. He was released from the hospital Wednesday morning and processed by Edmond police before being taken to the Oklahoma County jail, she said. "

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Lawyering and Sewer Digging: Discuss!

A classic expression we have heard is that if "x" was not able to be an attorney he would have been digging ditches or sewers.  Here is a case from Kentucky which combines the best of both worlds.

DATE RENDERED: 08/23/2007

SYNOPSIS: Engineering and Land Surveying (as a part of the engineering services) are professional services under KRS 413.245 and although damages were not EXACT they did not toll the statute of limitations.

Gardiner hired Matherly to design sewers and roads for a subdivision. Gardiner alleged that Matherly's work was incorrect and hired other companies to finish the subdivision project. Gardiner also alleged that their attorneys committed malpractice by allowing the statute of limitations to run. The trial court granted the Matherly's motion for summary judgment on the grounds that Gardiner's claims were barred by KRS 403.245, Kentucky's one-year professional services statute of limitations. The Trial court reasoned that Matherly performed engineering services that were supervised by a professional--the engineer. The Court of Appeals reversed on the grounds that Matherly also performed land surveying, which it opined was NOT a professional service and under KRS 413.245. Kentucky Supreme Court disagreed and held that Matherly held itself out as a professional engineering firm and had a professional engineer overseeing work on the ENTIRE project--even the land surveying. In addition, Gardiner believed Matherly was going to perform engineering services. The Supreme Court held that both the engineering and land surveying by Matherly were "professional" and subject to KRS 413.245. The court also held that Gardiner's action was time barred and even if the exact damages may not have been known. Lastly the court rules that KRS 413.120 does not apply because this action is not an indemnity action. "

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NJ Municipal Attorney, Legal Malpractice Insurance and Politics

This attorney was working for the local township and was sued.  Now,  News Transcript reports that he might have a political prosecution defense, and may have either shielded, hid or voided his legal malpractice insurance.

"Ajudge's ruling in Manalapan's lawsuit against a former township attorney leaves both sides preparing for a possible trial.

On Sept. 11 state Superior Court Judge Terence P. Flynn, sitting in Freehold, denied attorney Stuart Moskovitz's motion to dismiss a lawsuit that was filed against him by the Manalapan Township Committee.

Moskovitz was Manalapan's municipal attorney in 2005.

Moskovitz said on Sept. 17 that he will now prepare a motion in which he will seek summary judgment in an attempt to have the lawsuit thrown out. He said it could be several months before he presents that motion to the court. Moskovitz said he may need to conduct depositions in order to prepare that document.

In a lawsuit filed in June, Manalapan officials allege that Moskovitz breached his responsibility to the township in 2005 at the time he was serving as the municipal attorney when he drew up a contract of sale for the township's purchase of two single-family homes on Route 522 in front of the Manalapan Recreation Center.

A home at 95 Freehold Road (Route 522) was purchased for $432,000 and a home at 93 Freehold Road was purchased for $465,500. The township took possession of the properties on June 8, 2005. "

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Court of Appeals Upholds Dismissal of Legal Malpractice Case

Reported in today's NYLJ by Joel Stashenko, is the Court of Appeals affirmance of a dismissal in an estate legal malpractice case. 

"The state Court of Appeals yesterday upheld the dismissal of a legal malpractice action against the firm formerly known as Goodkind Labaton Rudoff & Sucharow. Jack E. Maurer, who died in 2005 at age 86, contended in a 2003 suit that his attorneys misled him into signing away control of his estate. Among Mr. Maurer's holdings were a $12 million apartment on Central Park West and a $3 million home on Long Island. He also contended the law firm was conflicted because it represented his wife, Rona, at the same time it was handling his estate planning. In an unsigned unanimous ruling in Bishop v. Maurer, 162, the Court agreed with the Appellate Division, First Department (NYLJ, Oct. 25, 2006) that while Mr. Maurer was generally bound by the estate planning documents he signed, he was not precluded from bringing a malpractice action if his attorneys negligently gave him an incorrect explanation of their contents. The Court ruled, however, that Mr. Maurer's complaint was "devoid" of nonconclusory allegations of what his attorneys failed to tell him or how he was otherwise misled or given incorrect advice. Prior to his death, Mr. Maurer was chief executive officer of a financial research and consulting firm, Indicator Research Group. The law firm is now known as Labaton Sucharow & Rudoff."

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Indiana Legal Malpractice Case Continues

This Indiana Legal Malpractice Case dismissal is reversed on appeal, and remanded for further proceedings is a primer on matrimonial malpractice, the Indiana standard of care, and summary judgment procedure there. Posted In Blog Articles
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Complicated Mortgage Legal Malpractice Case

In this upstate Legal Malpractice Case, plaintiffs entered into a high stakes high risk real estate and mortgage deal with sellers, who were encumbered and hounded by the IRS, County tax liens, and other debts.  Sales, mortgages, liens and law suits later the results of a legal malpractice case:

"It is undisputed that prior to accepting the mortgage, plaintiff was aware that its $300,000 loan which carried a 16% interest rate was a high risk transaction, as the Carneys had in excess of $1 million in judgments and liens at the time the loan was made. Indeed, the Carneys indebtedness to the Internal Revenue Service alone exceeded $955,000. Significantly, the $300,000 loan proceeds check was made directly payable to the Internal Revenue Service, which accepted this sum in partial satisfaction of the Carneys' indebtedness and agreed to subordinate its remaining liens to plaintiff's mortgage. Hence, the value of plaintiff's security interest, even before the tax certificates were sold, was impacted by the superior liens of the unpaid property taxes. Had plaintiff acquired the property through foreclosure, for example, the taxes still would have had to be satisfied, the Carney debt would have been eliminated and, as such, so would any damages to plaintiff stemming from defendants' alleged malpractice (see Central Hanover Bank & Trust Co. v Roslyn Estates, Inc., 266 App Div 244, 248-249 [1943], affd 293 NY 680 [1944]).

We must also reject plaintiff's assertion that it has, nevertheless, been damaged by the loss of its opportunity to foreclose on the mortgage because the tax sale certificates had already been sold when the Carneys defaulted, giving the holder of the certificates the right to apply for a deed free of plaintiff's mortgage. Plaintiff knew that in order to protect the mortgage, the rapidly accumulating unpaid real property tax liability would ultimately have to be satisfied. Thus, any failure by defendants to report the precise significance of the real property tax liability as of the closing is of no real consequence under these circumstances [FN1]. When plaintiff became aware that [*5]the tax sale certificates had been sold, an opportunity still existed to purchase them from their holder. The resulting devaluation of plaintiff's security interest was no greater than it had been as a result of plaintiff's acceptance of the mortgage with full knowledge of the outstanding tax liens. In fact, Corvetti was able to purchase the tax sale certificates from TCA in December 1996 at essentially the then current cost of satisfying the original tax liens.[FN2]

Thus, we conclude that the purchase of the tax sale certificates and ultimate acquisition of the property would have placed plaintiff in essentially the same position that it would have been in had it been able to foreclose on the property. Plaintiff argues, however, that it remains damaged because it was Corvetti and his wife, rather than plaintiff, that ultimately took title to the property. We reject this argument because, in our view, the facts presented represent one of those rare opportunities where we are able to find, as a matter of law, that a breach of fiduciary duty occurred (see Matter of Greenberg [Madison Cabinet & Interiors], 206 AD2d 963, 964 [1994]). By acquiring the property personally rather than on behalf of plaintiff, Corvetti misappropriated a corporate opportunity in breach of his fiduciary duty as president of plaintiff. Thus, any damage to plaintiff as a result of the tax sale was caused by Corvetti, rather than the alleged negligence of defendants.

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Big discovery Mistake, Big Law Malpractice, Big Settlement

Here is a further article on a $ 19 Million settlement in a Japanese American anti-dumping case arising from discovery mistakes by Perkins Coie.

"Perkins Coie reached a multimillion-dollar settlement last month with former client Tokyo Kikai Seisakusho, a manufacturer of large newspaper printing presses. The Japanese company sued two of the firm's Washington-based partners for malpractice in February 2006 stemming from work they did in a legal dispute involving anti-dumping laws.

TKS agreed to drop its suit against the Seattle-based firm on Aug. 22. Days before the settlement documents were filed, the company announced in a press release that it would receive $19 million to settle a malpractice suit arising from an anti-dumping case. It did not name the law firm in the release, citing a nondisclosure agreement.

"By the time the case went to trial in November 2003, the parties had exchanged more than a million pages of documents, taken scores of depositions on two continents, and translated thousands of communications from Japanese to English.

But in its malpractice complaint, TKS says there was one document in particular that proved critical to the case: In 1996, the company sold two printing presses to The Dallas Morning News with a disguised rebate. TKS and the News originally agreed on a price of $5.2 million for the two presses -- the same price TKS had charged the News two years earlier in a similar deal that the Commerce Department later determined to have violated anti-dumping laws. With that in mind, TKS says in its complaint that Perkins' Saito advised the company to raise the price on the new presses by $2.2 million to avoid another government review. In conjunction with the price increase, though, Saito built a hidden rebate for the News into the deal through a combination of cancelled fees and free supplies that would reduce the paper's cost back to the 1994 price tag. TKS followed Saito's advice.


And that's when Goss got lucky. During discovery, TKS claims that Perkins Coie made the costly error of sending Goss' attorneys privileged documents outlining the printing press transaction with the News. According to the complaint, those documents also showed that Saito advised TKS to destroy any evidence of the true cost of the presses sold to the News.

But Nicholas Critelli, name partner of Nicholas Critelli Associates, who was local counsel for TKS in the Goss trial, says it was unclear that handing over the documents was inadvertent or, in hindsight, a poor tactical decision. "

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Limits of Collateral Estoppel in Legal Malpractice Defense

This is an estate legal malpractice case in which "In 1993, nonparty Ricki Singer created an irrevocable inter vivos trust for the benefit of herself and her son as a remainderman, with plaintiff Frieda Tydings, her aunt, designated as the sole trustee. The trust agreement did not require plaintiff to offer an accounting, nor is there any indication that the grantor ever requested an accounting until on or about August 20, 2003, over six years later, when she filed a petition in the Surrogate's Court for a compulsory accounting and the suspension of Steven Singer's authority pending a proceeding to remove him as trustee.

Plaintiff retained defendant Greenfield, Stein & Senior, LLP to represent her in the proceeding. While the firm submitted a notice of appearance dated September 9, 2003, it did not thereafter file an answer to the petition or any other response. As a result, on September 24, 2003, the Surrogate issued an order directing both plaintiff and successor trustee Steven Singer to provide an accounting.

Plaintiff thereafter retained a new attorney, and her final accounting was filed on November 14, 2004. However, the grantor objected to the accounting and sought to surcharge plaintiff with respect to certain matters that had purportedly occurred prior to her resignation as trustee. Plaintiff's new lawyer moved to dismiss the objections, relying on the applicable six year statute of limitations (CPLR 213).

The Surrogate denied plaintiff's motion, holding that "the statute of limitations can begin to run on the beneficiary's right to an accounting only where the former fiduciary has failed to have accounted after a reasonable time to do so has passed" (Matter of Singer, 12 Misc 3d 621, 625 [2006]). This Court affirmed, but did so on the ground that the "former trustee waived her statute of limitations defense by failing to raise it in response to the grantor's petition to compel an accounting,

Plaintiff former trustee then commenced this legal malpractice action against her first attorneys. Defendant law firm moved for dismissal on grounds of collateral estoppel, arguing that the Surrogate's determination in Matter of Singer, (12 Misc 3d at 621, supra), rejecting the statute of limitations defense, which decision was subsequently affirmed, established that plaintiff could not have prevailed in the accounting proceeding in any event.

We therefore conclude that collateral estoppel cannot properly be relied upon to preclude plaintiff from demonstrating that but for defendant's alleged malpractice, she would have prevailed in that accounting action, and the motion to dismiss is therefore denied.


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Attorney Fees and Liens in a Most Unusual Case

A trove of photos, including the famous Marilyn Monroe up-draft photo are the res over which the Shaw family fought for years.  Father against son, sisters against brother... Finally it ended, with an Appellate Decision which sets forth the attorney rights to billing, doubling of bills and judiciary law liens.

"Over the course of his photographic career, Sam Shaw took thousands of pictures of celebrities, including the famous photograph of Marilyn Monroe with her skirt blowing upward. In 1994, he commenced an action against his son Larry, also a photographer, for conversion of over 200,000 commercially valuable photographic images and related claims, and sought a declaration of ownership rights, an accounting of the images, unspecified compensatory damages, and $100 million in punitive damages (the Shaw family action). Larry, contending that Sam had gifted or assigned rights in the photographs to him, and that he, not Sam, had shot some of them, raised ten counterclaims. In 1995, Supreme Court dismissed several of the counterclaims, but in 1998 granted Larry the right to examine all 500,000 photographs in Sam's possession.

Upon Sam's death in April 1999, Supreme Court appointed his daughters, Edith Shaw Marcus and Meta Shaw Stevens (collectively, the Shaw sisters), temporary administrators to prosecute the action against Larry, and appointed a receiver of the 500,000 photographs that had been in Sam's possession. The receiver stored the photographs in a warehouse, where they were damaged. The receiver filed a $2 million claim with the insurer, which filed for bankruptcy protection; the claim was turned over to the New York State Liquidation Bureau and assigned to an adjuster, but remains unresolved. The charging liens also attach to any insurance proceeds for damage to photographic images while in storage. The "enforcement of a charging lien is founded upon the equitable notion that the proceeds of a settlement are ultimately under the control of the court, and the parties within its jurisdiction, [and the court] will see that no injustice is done to its own officers'" (Schneider, Kleinick, Weitz, Damashek & Shoot v City of New York, 302 AD2d 183, 187 [2002], quoting Rooney v Second Ave. R.R. Co., 18 NY 368, 369 [1858]). "The statute is remedial in character, and hence should be construed liberally in aid of the object sought by the legislature, which was to furnish security to attorneys by giving them a lien upon the subject of the action" (Fischer-Hansen v Brooklyn Hgts. R.R. Co., 173 NY 492, 499 [1903]). The lien is imposed on the client's cause of action, in whatever form it may take during the course of litigation, and follows the proceeds, wherever they may be found (see Matter of Cohen v Grainger, Tesoriero & Bell, 81 NY2d 655, 658 [1993]). "


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Texas Joins NY in the No-Fee Deduction Rule in Legal Malpractice

Law firm is sued for legal malpractice.  May they deduct their unearned contingent fee from the malpractice award?  On the one hand, it seems that plaintiff may have a windfall.  It would never have walked away with 100% of the verdict had defendants been successful.  On the other hand, why should the defendant earn a hypothetical fee when it  was negligent and failed?

In NY the rule is that there is no deduction.  Here is a report from Texas on the same issue.

"If a firm is hit with a malpractice jury verdict, is it entitled to subtract a portion of the damages award if it handled its former client's case on a partial contingent-fee basis?

That was the issue of first impression Akin Gump Strauss Hauer & Feld presented to Dallas' 5th Court of Appeals recently after a jury found Akin Gump negligent in a legal malpractice suit and hit the firm with a $922,631 verdict. On appeal, the firm argued in its brief that attorney fees the former client paid Akin Gump should not have been part of the jury's verdict, because only judges can order disgorgement.

Akin Gump also argued that the award should have been reduced by 10 percent, because the firm had a partial contingent-fee arrangement with the client: Lawyers worked at a reduced billing rate but were entitled to take 10 percent of National Development Research Corp.'s recovery. According to its brief, Akin Gump's theory was that its former client should not be allowed to recover more money in a malpractice suit than it would have recovered from its client if the firm had successfully represented the client.

In its Aug. 29 opinion in Akin Gump Strauss Hauer & Feld v. National Development Research Corp., et al. the 5th Court ruled that the attorney fees former client NDR paid to the allegedly negligent firm "are not recoverable as an element of damages" in a legal malpractice suit against a firm. The holding conflicts with rulings from Texarkana's 6th Court of Appeals and Eastland's 10th Court of Appeals.

But the 5th Court rejected the firm's contingent-fee argument, saying the former client "should not be forced to pay a contingency fee that Akin Gump never earned." It also noted the client had to hire a second set of lawyers to "be in the same position it would have been absent Akin Gump's negligence "

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Changes in City Court

Effective immediately, City courts now follow the Supreme Courts in summons filing requirements.  Now, the summons must be filed withi 120 days, according to a new Administrative Order of the Chief Administrative Judge. Posted In Blog Articles
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Huge Payout for "Overcharges" in Breast Inplant Litigation

This report notes that $ 35 million was too little a payout to the overcharged clients of the John M. O'Quinn law firm.

"An arbitration panel has ordered John M. O'Quinn's firm to pay a little more to a class of 3,450 former breast implant clients who allege O'Quinn's firm overcharged them for expenses.

In July, a three-member arbitration panel ordered O'Quinn's firm to pay $35.7 million in damages to the class. But in an order issued on Sept. 11, a three-member arbitration panel ordered the firm to pay a total of $41,465,950. That $41.5 million breaks down to $9,979,364 for breach of contract damages, $2,494,841 for attorney fees on the breach of contract claim, $3,991,745 in interest on the breach of contract claim and $25 million for fee forfeiture.

The panel allocated $500,000 for expenses and $10,241,487 for attorney fees, leaving $30,724,463 to be distributed to class members.

O'Quinn, of the O'Quinn Law Firm in Houston, did not return a telephone call seeking comment. Neither did his attorney, Billy Shepherd, a partner in Cruse, Scott, Henderson & Allen in Houston, who said in an earlier interview that they are researching avenues of appeal.

An attorney for the plaintiffs, Joseph Jamail, a partner in Jamail & Kolius in Houston, says, "It came out pretty much where I thought we were going to, based on the original order." Jamail says the former O'Quinn clients "felt cheated" but are now vindicated.

In their petition in Martha Wood, et al. v. John M. O'Quinn, P.C., the plaintiffs allege O'Quinn's firm wrongfully deducted "Breast Implant General Expenses" -- expenses such as the cost of taking depositions that were relevant to all the suits -- and other fees from their settlement checks. O'Quinn denied the allegations. "

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Followup on Biovail: Legal Malpractice or Jail

Last week we discussed the racketeering lawsuit by Biovail and the Kasnowitz, Benson law firm.

Today, this article from Law.Com relates that Biovail has re-hired the Kasnowitz law firm who has appeared for it in NJ.

"Biovail Corp. has taken a page from the George Steinbrenner/Billy Martin playbook in order to reignite its well-publicized conspiracy suit against short-sellers and analysts. The Canadian drugmaker has rehired its former lead firm in the case -- Kasowitz, Benson, Torres & Friedman. Biovail fired Kasowitz last March amid legal proceedings surrounding the company's misuse of court-protected documents.

The suit began in February 2006, when Biovail sued analysts and hedge funds, including SAC Capital and its founder Steven Cohen, in New Jersey state court. Biovail claims that it was the victim of a conspiracy to spread false information about it in an effort to depress its stock and profit. The company's chairman at the time, Eugene Melnyk, appeared on "60 Minutes" to tout the complaint.

But the company's suit has been stalled since January, when Manhattan federal district court Judge Richard Owen ruled that Biovail violated a protective order in his courtroom where the company is a defendant in a shareholder class action. Specifically, Owen found that Biovail had used court-protected documents it had subpoenaed from Banc of America to support its allegations in the New Jersey case.

The dispute was embarrassing and costly for both Biovail and its lawyers. It was amidst the hearings that Biovail fired the Kasowitz Benson firm. "


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Digital Text and Legal Malpractice

Will digital text and its manipulation become the fodder of legal malpractice cases?  As in each new refinement of media or even printing, attorneys must keep up.  Carbon paper, phtotstats, photocopies, computers, fax, scanning; each has been a refinement of the prior world, and each then sets a high water mark. This article  suggests that digital manipulation of text, and files will eventually become the standard, deviation from which may be malpractice. Posted In Blog Articles
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Lakins and Lloyds Legal Malpractice Coverage Case

We've been following this in the Madison Record for a few months.  Now it appears that Lloyds is out, but the remaining insurance companies are still in.

"Lloyd's Illinois and underwriters at Lloyd's London have settled a suit the Lakin Law Firm filed against them in a legal malpractice case.

Madison County Circuit Judge Barbara Crowder signed an order Sept. 6, granting a Lakin motion to dismiss Lloyd's with prejudice.

Affinity Insurance Services and the Norton and Rain Insurance agency (NRI) remain as defendants.

The Lakins sued for coverage of an order from a federal judge in Oklahoma awarding about $4 million to former Lakin client Stephen Williams.

The Lakins obtained a settlement for Williams and structured the payout so he would receive regular payments for many years.

The Lakins entrusted the payout to investor James Gibson, who for years piled up payouts from clients of the Lakins and other firms.

Gibson looted the funds and fled to Belize.

Today he occupies a prison cell.

Last year Williams sued the Lakins in U.S. district court at Tulsa, for recommending Gibson.

The Lakins did not respond, so this year Chief Judge Claire Eagan granted a default"

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Kenneth Nahum Legal Malpractice Case Continues

"Celebrity Photographer" Kenneth Nahum owned two penthouses, and sat on the condo board.  Nevertheless, he and his attorneys failed successfully to purchase the rooftop area in between, and he has now successfully passed a motion to dismiss.

"A Manhattan judge has ruled that celebrity photographer Kenneth Nahoum may proceed with a legal malpractice suit stemming from his attempt to purchase 2,000 square feet of common space in his Soho building for less than $70,000.

Mr. Nahoum, who owns two penthouses at 95 Greene Street, retained real estate lawyer Carolyn L. Weiss and her Scarsdale, N.Y.-based law firm Weiss & Weiss in 2000 to represent him in the purchase of common rooftop space from the building's board of managers, on which he then sat.

The sale was challenged by a later board, which said Mr. Nahoum had never gotten the required unanimous approval from the building's unit owners and that the property at issue was larger than originally stated.

Mr. Nahoum sued Ms. Weiss for failing to recognize that his purchase was defective. "

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The Texas Supreme Court and a Legal Malpractice Case

This report of a Texas Case that garnered a $ 71 Million dollar verdict, only to see it overturned on appeal.  Now, the Texas court of last resort has denied review. 

"The Texas Supreme Court handed Houston-based Baker Botts a big victory. On Aug. 31, the Supreme Court denied a petition for review in Kathleen C. Cailloux v. Baker Botts, et al., a ruling that upheld a take-nothing judgment in favor of Baker Botts and Wells Fargo Bank Texas in a big-bucks estate-planning suit.

In 2005, 198th District Judge Karl Emil Prohl of Kerr County ordered Baker Botts and Wells Fargo to pay $71 million in damages to former estate-planning client Kathleen C. Cailloux, a wealthy widow in Kerrville. A jury found Baker Botts breached its fiduciary duty for failing to disclose all important information when doing estate-planning work for Cailloux after the death of her husband, Floyd, in January 1997.

The jury also found Wells Fargo breached its fiduciary duty to Cailloux.

Cailloux alleged in the Sixth Amended Petition that the defendants conspired to convince her, right after her husband's death, to disclaim her rights to her husband's estate and transfer more than $60 million to the Floyd A. Cailloux and Kathleen C. Cailloux Foundation — ostensibly to save more than $30 million in taxes — without informing her of other estate-planning options.

In February, a three-justice panel of the 4th Court of Appeals in San Antonio reversed the judgment and rendered a take-nothing judgment in favor of the firm and the bank. In the opinion, Justice Catherine Stone wrote that nothing in the record proved that Baker Botts or Wells Fargo breached a fiduciary duty that caused Cailloux to disclaim her right to the estate of her late husband. "

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The Highest Stakes: Legal Malpractice or Jail

Legal malpractice litigation is always about compensation.  In addition, sometimes it is also about vindication.  Here in this fascinating story it may well be about jail and disbarment.  Right now, hearings are continuing before Judge Richard Owen in Southern District of New York, and the attorney witnesses are reportedly coming in with their criminal defense attorneys.

Andrew Longstreth of the American Lawyer in Law.Com relates the story of Biovail

"Racketeering Lawsuit by Biovail Backfires Against Company and Lawyers
Company's litigation tactics are in spotlight, as Biovail execs and lawyers from Howrey and Kasowitz Benson feel the heat

This wasn't how it was supposed to go for Biovail Corp., Canada's largest publicly traded drugmaker. Biovail was supposed to be the victim, the ill-used dupe of powerful hedge funds, analysts and bankers, whose short-selling scheme to spread false information about the company led to a plunge in its share price in 2003. And Biovail's lawyers, respected litigators from Howrey and Kasowitz, Benson, Torres & Friedman, were supposed to be the ones to help the company prove it.

Mark Wegener, co-chair of Howrey's global litigation practice, had been hired to defend Biovail in a shareholder class action in federal district court in New York. His job was to shift blame for the company's disastrous market fall away from Biovail and its executives, including Chairman Eugene Melnyk. The company's other lead outside counsel, Marc Kasowitz, played offense. After more than a year of investigation -- which included shoe-leather sleuthing by his firm's in-house detective agency -- he had filed a 90-page racketeering suit in New Jersey state court. It was a document as detailed as it was audacious, lobbing charges against some of the most powerful financial figures on Wall Street.

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$ 167 Million Settlement in Adelphia Legal Malpractice Case

"When Adelphia Communications and founding members from the Rigas family became mired in fraud charges and bankruptcy proceedings, a criminal trial and numerous civil cases were quick to follow.

It was a specific malpractice case for professional negligence brought by the cable company against auditing firm Deloitte & Touche that created a years-long battle between the companies and a list of attorneys that read more like the who's who of Philadelphia legal circles.

Who knew Robert C. Heim, the late Alan J. Davis, Richard Bazelon, Philadelphia's commerce court program, David Pittinsky, Arlin Adams, Larry McMichael and a couple of New York firms had so much in common?

Adelphia filed a motion Friday to discontinue Adelphia Communications v. Deloitte & Touche due to a $167.5 million settlement agreement reached this summer that attorneys said was one of the largest ever seen in Philadelphia Common Pleas Court.

With the settlement comes an end to a case that began in 2002 and still promises future litigation work for some of the attorneys involved.

Heim, chairman of Dechert's litigation group, was contacted by Boies Schiller & Flexner in 2002, the firm representing Adelphia in its bankruptcy case, to see if Dechert would sign on as co-counsel in the malpractice case. "  From Law.Com

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Heart Attack followed by Legal Malpractice Case

What is one to do after a heart attack?  Here, plaintiff says: soldier on!.  Attorney says:  Withdraw!  The court chose attorney's version.  The Legal Profession Blog writes:

"A lawyer who had represented a client in a construction lawsuit suffered a heart attack five years into the litigation. As a result, a lawyer assigned to assist in the case left the lawyer's firm. Seven weeks before the scheduled trial, the lawyer moved to withdraw, citing his health problems. The client obtained new counsel, who sought to continue the trial (denied with leave to renew on the scheduled trial date). The case settled prior to the scheduled trial.

The client then sued the lawyer for malpractice. The North Carolina Court of Appeals held that the lawyer was ethically obligated to move to withdraw: "Because [the lawyer] asserted a proper basis and moved to withdraw, [his] conduct did not breach [his] fiduciary duty owed to plaintiff." Further, seeking withdrawal seven weeks prior to the scheduled trial due to health reasons complied with ethical mandates of North Carolina Rule 1.16, notwithstanding the contrary expert opinion offered in opposition to the motion for summary judgment. (Mike Frisch) "

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Legislative Changes in Filing and Commencing Lawsuits

Recent legislative changes to CPLR 2001 and to filing statutes  have cleared out some well known, but still troublesome traps for the unwary.  Many cases have been dismissed because a practitioner re-used an index number for a new case.  An example:  plaintiff starts a special proceeding seeking leave to file a late notice of claim, succeeds, and then files a summons against the municipality under the original index number.  Another example:  practitioner starts a special proceeding by filing with the Supreme Court clerk rather than the County Clerk.

Here is an article from the NYLJ by Palu Aloe.Chapter 529 aims to give some relief for those who file papers incorrectly.2 It amends CPLR 2001, which permits courts to overlook nonprejudicial mistakes, to include mistakes in the filing of the initial process, including the failure to pay the index number fee or acquire an index number, provided the applicable fee is paid.3 This measure became effective on its signing on Aug. 15, 2007. Although, the apparent focus of the bill appears to be cases in which the index number fee is not paid because the summons is filed under a previously obtained index, the legislative history indicates a more expansive purpose and is intended "to correct or ignore mistakes or omissions occurring at the commencement of an action that do not prejudice the opposing party, in the same manner and under the same standards that it already does with regard to all other nonprejudicial procedural events."4 Although not explicitly stated, this would appear to apply to other types of filing mistakes, such as filing of the initial papers in the wrong office, as was the case in Matter of Mendon Ponds Neighborhood Assn. v. Dehm, 98 NY2d 745, 747 (2002). It appears intended to repudiate arguments that strict adherence to CPLR 304 is required for commencement, and any defect in the filing process will result in dismissal so long as there is a timely objection by the defendant. Instead, the new regime requires that the defect in the filing process actually results in some actual prejudice to the defendant, and if no such prejudice can be shown, then the defect is to be ignored."

Motion dates and service are also changed. "The timing of motions under New York practice has long been a source of problems. The time frames, unrealistically short, are rarely followed and usually just the starting point for a discussion between counsel of a briefing schedule, or worse, a series of appearances at a calendar call and a request for adjournments so that answer and reply papers may be submitted. Chapter 185 seeks to step into this morass, but it does so in a manner not wholly satisfactory, and adds as many problems as it solves. It amends CPLR 2214(b) to require the moving party seeking a reply to serve the motion 16 (instead of 12) days before the return date. If 16 days are provided, then answering papers and any notice of cross-motion must be served seven days in advance of the motion. CPLR 2214(b) further provides that reply as well as "responding" affidavits must then be served one day in advance. "Responding" affidavits presumably means affidavits in response to the cross-motion, although the new statute is not explicit, and in fact, continues to provide no response for a cross-motion served two days in advance of the motion (which still can be served if the moving party does not provide the extra notice)."


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Coverage in Legal Malpractice even after Leaving the Firm

Hinshaw reports that this attorney was granted coverage in Legal Malpractice coverage for work done:“while acting solely in a professional capacity on behalf of” the partner’s former firm – required the insurer to defend and indemnify for work the lawyer did both before and after he had left the firm. The decision has important things to say not only about the scope of malpractice coverage but also about the importance for attorneys and insurers alike of proper transfer of client matters when a lawyer leaves a firm. "

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Another Take on a Perplexing GA Legal Malpractice Case

Here is the Popper take on this strange GA legal malpractice case.  Did the defendant attorneys really take a car case to trial without speaking with the defendant?  Did they admit liability without his permission?  Why did the jury award only 1/2 of the damages? 

Was there a settlement of the underlying case for less than the verdict?  Were there other defendants [owner, lessor] who were found liable?

We'll keep looking into this case.


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Assign a Foreclosure, Assign a Legal Malpractice Claim?

Not in Florida, and not likely in New York either.  Lender retained attorney to start a foreclosure.  He did not.  Lender started legal malpractice case, and assigned both the foreclosure, the loan, the mortgage, as well as the legal malpractice case.  Florida court did not permit the suit,  Hinshaw reports:

"Florida Supreme Court underscores adherence to not permitting assignment of legal malpractice claims.  Law Office of David J. Stern, P.A. v. Security National Servicing Corp.,___So. 2d___2007 WL 1932251 (Fla. 2007)

In Security National Servicing Corp. v. Law Office of David J. Stern, P.A., 916 So.2d 934 (Fla. App. 2005), the District Court of Appeal of Florida, Fourth District, cited prior Florida precedent regarding cases in which a legal malpractice claim arose from a lawyer’s failure to timely file a foreclosure action, such as that before the court. An appeal to the court followed. While the appeal was pending, the client assigned both the subject loan and the client’s legal malpractice claim to plaintiff.

The trial court granted summary judgment in favor of defendant on the ground that the cause of action was not assignable. The appellate court acknowledged that rule, but distinguished the case on appeal, stating that the subject policy factors were not present. Specifically, plaintiff was not an adversary; there was no risk of disclosure of confidential information; and there was no risk of the commercialization of legal malpractice claims. Citing Cowan Liebowitz & Latman, P.C. v. Kaplan, 902 So. 2d 755 (Fla. 2005) and Cerberus Partners, L.P. v. Gadsby & Hannah, 728 A.2d 1057, 1061 (R.I. 1999), the court allowed the assignment."

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Trees and Sidewalks: A New Trap for the Attorney

Until three years ago a personal injury attorney knew that a trip and fail on a NYC sidewalk meant that a Big Apple map was needed.  Then the law changed, and the attorney needed to know who owned the adjacent building.  Now, a new wrinkle.  The adjoining landowner is responsible for the sidewalk, but the City remains responsible tree wells and trees.

Vucetovic v Epsom Downs, Inc. 2007 NY Slip Op 06577, Decided on September 6, 2007
Appellate Division, First Department, Buckley, J., J. "At issue on this appeal is whether tree wells are part of the "sidewalk" for purposes of Administrative Code of the City of New York § 7-210, which requires owners of real property to maintain abutting sidewalks in reasonably safe condition.

Title 19 of the Administrative Code, "Streets and Sidewalks," defines "sidewalk" as "that portion of a street between the curb lines, or the lateral lines of a roadway, and the adjacent property lines, but not including the curb, intended for the use of pedestrians" (Administrative Code § 19-101[d] [emphasis added]). Neither trees nor tree wells are "intended for the use of pedestrians," and therefore they are not part of the sidewalk.

Administrative Code § 18-104 entrusts the Department of Parks and Recreation with "exclusive jurisdiction" over "[t]he planting, care and cultivation of all trees and other forms of vegetation in streets." The "care" of the trees would necessarily entail the tree wells, which encompass soil and roots. Moreover, the statute makes evident that the trees are "in streets," and thus something separate and distinct from streets. The Department is to "employ the most improved methods for the protection and cultivation" of trees under its "exclusive care and cultivation" (Administrative Code § 18-105), which would include tree wells, which exist for the protection of trees. "

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Disgorgement of Fees in Legal Malpractice

Here is a case, reported by Hinshaw in which a firm was required not only to disgorge fees based upon its malpractice, but had to pay the client's legal fees generated in the dispute.

"In re SRC Holding Corp., f/k/a Miller & Schroeder, Inc., Debtor – Bremer Business Finance Corporation v. Dorsey & Whitney, LLP, Memorandum Opinion and Order, 2007 WL 1464385 (D. Minn.)

Risk Management Issue: What should a law fi rm do when it realizes it has developed a confl ict of interest with its client, or arguably has made an error that could harm the client?

The Case: Dorsey & Whitney was engaged by Miller & Schroeder, an investment banking fi rm, to close a loan transaction to President, a management company, which had contracted with the St. Regis Mohawk Tribe to build and operate casinos. Miller & Schroeder placed the loan with several different investors, including Bremer Business Finance Corporation. The loan package required approval of the National Indian Gaming Commission (“NIGC”) in order to be enforceable against the tribe. Dorsey submitted the loan to the NIGC for approval, but the approval was not obtained before the fi nancing package closed, and the NIGC never gave its consent. When the casino project failed, President became insolvent and the tribe refused to repay the loans.

Bremer fi led suit against Dorsey & Whitney and, as reported in our December 2006 issue, a bankruptcy judge denied the law fi rm’s motion to dismiss the malpractice claim. The law fi rm claimed it only represented Miller & Schroeder, which brokered the loan, and not the individual banks who participated in it; Bremer contended it was a client with standing to sue for malpractice and the bankruptcy judge agreed. Recent Developments: Dorsey’s appeal from the bankruptcy judge’s Recommendations and Order was decided on April 7, 2007, by U.S. District Court Judge Donovan Frank. Judge Frank affirmed the bankruptcy court’s determination that Bremer had standing to sue the law firm, finding that a direct attorney-client relationship existed as of June 2000. Judge Frank agreed that the law firm violated its ethical duties by failing to disclose a potential malpractice claim involving allegedly erroneous advice, and he ultimately upheld the prior order that the law firm must disgorge nearly $900,000 in fees received from Miller & Schroeder and pay Bremer’s legal costs of around $409,000 as well. "

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The Danger of Too Much Information

We were told early in life not to talk so much.  This advice may have served the Larkin Law firm well in its dealings with a client.  This report of a question certified to an appellate court, is an example.

"Madison County Circuit Judge Barbara Crowder wants appellate judges to decide whether an attorney-client relationship existed between the Lakin Law Firm and a woman whose injury claim the firm chose not to pursue.

Crowder on Aug. 23 certified questions to the Fifth District in Mount Vernon about the firm's dealings with Suzanne Krause of Tennessee.

The Fifth District's answers will determine whether Krause can seek damages from the Lakins on a claim of legal malpractice.
In 2004 Brad Lakin sent the family a letter stating, "After reviewing the information that we have we believe that the case would be extremely difficult to prove."

He wrote that if they wanted to pursue the claim they should contact another attorney.

"Please remember, the statute of limitation on your case is two years from your daughter's eighteenth birthday," he wrote.

Last year she sued former Lakin lawyer Scott Bruce Meyer, the firm, Brad Lakin and his father Tom Lakin.

Her attorney, Kevin McQuillan of Downers Grove, claimed the Lakins breached their duty to her in their investigation.

He claimed the statute of limitations was one year, not two."

The advice usually given is to say simply that there is a statute of limiations and the clinet should obtain advice how to proceed.

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Whose File Is It?

The question of whose file is it, comes up often in legal malpractice.  The client wants the file back, the lawyers may want a bill paid, each knows that the file may contain valuable information and ammunition.  Here is a report from Hinshaw on the Iowa solution, with a discussion of the majority and minority positions. Posted In Blog Articles
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Turnabout in Texas Fee-Legal Malpractice Case

Attorney Fee disputes can be a landmine, a source of big problems, and a constant source of legal malpractice litigation.  Here is yet another report of a Texas Case.

"For nearly six years, a prominent Dallas plaintiffs firm has battled a former client in an attempt to recover a contingent fee. But after a three-day trial, it was the former client who won the war. On Aug. 21, a Tarrant County jury awarded $1.4 million in damages to defendant Robert L. French.

In its 2001 petition in Law Offices of Windle Turley v. Robert L. French, et al., the firm alleged that a former client took his medical-malpractice case to another lawyer without paying the Turley firm for the legal work it already had done on his case. Under the Texas Supreme Court's 1969 opinion in Mandell & Wright v. Thomas, when a client discharges an attorney without good cause before work has been completed, the attorney may recover on the fee contract for the amount owed.

Windle Turley says his firm sued its former client because it was a matter of principal. In its petition in French, the firm asserted a quantum meruit claim to recover for the work performed in the med-mal suit.

In 2005, French countersued the firm alleging intentional infliction of emotional distress. While the jury awarded zero dollars on the Turley firm's suit, it awarded $1.4 million to French on his countersuit.

Three professional liability attorneys say the jury's award in French is an example of why firms that sue clients over fees need to be careful — a sentiment with which Turley agrees.

"It is risky to ever bring an action against a client," says Turley, who is asking Judge Len Wade of the 141st District Court of Tarrant County to set aside the verdict. "And I don't ever like to go the judicial route to enforce a contract. However, having said that, there are occasions in which the circumstances compel an attorney seeking judicial assistance."

Turley still believes the fee dispute in French justified the firm's suit. His firm sued French to prevent clients from taking away cases and not paying for the work. Turley believes the verdict — if it stands — will weaken the contingent-fee contracts plaintiffs attorneys sign with their clients.

"It's very, very unfortunate," says Turley of the verdict. "And I think it's a distressing sign of the times."

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$1 Million Legal Malpractice for Not telling Client of Offer

We reported on this last month, but here is a Hinshaw report on a legal malpractice case in which an attorney lost a medical malpractice case in illinios, and at the same time failed to tell the client about a $1 Million offer.  He is found liable to the client for the amount of the offer.


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The Devil is in the Details in Legal Malpractice and Elsewhere

Plaintiff wins a big medical malpractice verdict, more than $6 milliion, and then based upon this report from Julie Littky-Rubin everything went wrong.

"Marelia v. Yanchuck, et al., 32 Fla. L. Weekly D1966 (Fla. 2nd DCA August 15, 2007):

A woman sued the lawyers who represented her in a medical malpractice case involving her baby son. The case was settled for 6.75 million dollars. The mother wanted to buy two annuities, but wanted to be sure that the annuities would provide a monthly benefit payment for the child, in addition to a lump sum payment for her to use at her discretion once a year for three years. The documents did not explicitly so reflect.

The guardian ad litem asserted that the payments were for the benefit of the child and brought a declaratory judgment action. This had the effect of freezing the funds, and the mother was then later sued by someone who had purchased an expectancy in her share of the annuity.

The trial court determined there was no issue of fact as to whether the settlement documents in the order approving settlement be made for the benefit of the child because there was nothing in the settlement documents to that effect. The court reversed. It found it was error to rule that way because the plaintiff was contending that this was what she had wanted, and what she advised her attorneys to include, but it never made it into the documents, and that was the issue. One defendant argued that the attorney ad litem would never have approved the settlement if the money were to go to her anyway, and therefore she wasn’t damaged.

The court further found that the statute of limitations did not begin running on the plaintiff’s legal malpractice case (another basis for the summary judgment) until the Alachua County Circuit Court’s order determined that the order approving the settlement was null and void, and that the settlement documents failed to disclose the parties’ intent regarding the payments. The attorneys argued that the action was barred by the statute of limitations because the debt collection judgment filed against her over the expectancy should have put her on notice. The court disagreed.

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Law Firm Blogs and Legal Malpractice

Kevin O'Keefe will be addressing the ABA National Conference on Legal Malpractice, discussing law firm blogs and legal malpractice.  His own blog, Lex Blog Blog discusses how a law firm might safely blog.

For Internal purposes of law firm
Identify who may blog
Identify technology issues and how they will be addressed
Software platform to be used
Graphic design and development
SEO - search engine optimization
RSS feed management
Maintenance of platform, particularly addressing comment and trackback spam issues
Upgrades - who stays abreast of advancing technology and tests upgrades?
Training & follow-up issues
Who trains lawyers and staff?
Who oversees blogging?
Identify branding as firms or individual lawyers
ID ownership and who is speaking
Clearly label copyright
Blog copy
General information and alerts closer to email newsletters/alerts?
Entering into blog/social media discussion by following relevant RSS feeds and referencing in blog posts?
Posting policy
Individual lawyer(s) role
Marketing’s role
Commenting policy
Generally should allow
Software set to moderate so comments are approved before go live
What comments will be allowed?
Who approves comments?
Consider impact of Section 230 of Communications Decency Act
PR and communications
What, if any, PR and marketing will be done to promote blog?
How will networking with other bloggers and media be addressed?
Who responds to media requests of bloggers?
ID processes for unforeseen issues - probably already in place
Ethics Issues
Follow existing protocols of firm
Determine if specific blog rules exist in your state
May wish to file ‘screen shot’ of blog with ethic’s governing body
Follow existing states ethics rules, particularly web advertising rules
Technorati Tags: blog policies, legal ethics

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ABA Legal Malpractice Conference

It's in Scottsdale, AZ on September 19-21.  Here are the details:

Fall 2007 National Legal Malpractice Conference
September 19-21, 2007 - Scottsdale, AZ
A lawyer liability seminar designed to equip you to recognize and avoid communication failures that may result in legal malpractice or disciplinary actions.
Featured presentations:
- Special Pre-Conference Session on the Nuts-and-Bolts of Law Firm Blogs
- The Role of Personality in Determining Predisposition for Liability Exposure
- How Group Dynamics Influence Behavior
- The Internal Discussion: The In-Firm Attorney-Client Privilege
- Getting the Client Communications Right: Engagement, Billing, and Disengagement
- Law Firm Blogs: Truths and Myths on Liability and Ethical Concerns
- Client Development Pitfalls that Await the Unwary
- Avoiding Malpractice: The Art of Client - Centered Communication
- Communicating with Jurors
- Learning What the Medical Profession is Doing About Essential Communication

We thank the sponsors of the 2007 Fall National Legal Malpractice Conference

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Georgia $ 991,000 Legal Malpractice Verdict

Here is a partial report from the Georgia Daily Report [Subscription], which we believe is a legal newspaper there:

" A MONROE LAWYER and a Tennessee insurance defense firm who didn’t talk to their client before a wrongful death trial have been hit with a $991,950 legal malpractice verdict. But one of the plaintiff’s lawyers who won that verdict,..."

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Texas Continuous Representation Wrinkle in Legal Malpractice

Continuous representation of a client by the attorney acts as a toll of the statute of limitations.  In New York, a legal malpractice cause of action accrues at the time of the mistake, but a client is not expcted to fire the attorney and sue, so long as the attorney continues to represent the client in the same matter. While a continuing relationship of trust and confidence must exist, the most easily recognizable fact [especially in litigation] is that the lawyer continues to be the attorney of record.

Texas is apparently different, as this article by James (Sandy) McCorquodale  sets forth.

"The client's divorce proceeding resulted in the entry of a Decree of Divorce on January 23, 1998. Subsequent to entry of the Decree of Divorce, the client was periodically represented by the lawyers on matters related to the enforcement of that decree. The underlying cause of action was filed on June 24, 2004.

Manning and the other defendants filed an Original Answer affirmatively alleging that the client's claims were barred by limitations. The lawyers subsequently filed a traditional and no-evidence Amended Motion for Summary Judgment alleging that the client's claims were barred by limitations and a lack of causation. The client contended that limitations did not operate to bar her cause of action for three reasons: (1) limitations was tolled during the existence of an attorney-client relationship; (2) accrual of her cause of action was deferred due to the discovery rule; and (3) limitations was tolled due to fraudulent concealment by The lawyers. The client further contended the summary judgment evidence raised a question of fact as to causation.

The trial court granted summary judgment in favor of the lawyers, holding that the client’s claims were barred both by the statute of limitations and lack of causation. The Court of Appeals affirmed.

Hughes tolling rule held inapplicable
The Court of Appeals found that the Hughes tolling rule was inapplicable:

Legal malpractice claims are governed by a two year statute of limitations. A legal malpractice claim accrues when the legal injury occurs, unless there is a legal basis for tolling limitations. Appellant's legal malpractice claim centers upon her allegation that she received an inadequate division of community property when Manning incorrectly advised her that she was not entitled to a share of referral or contingency fees from lawsuits pending at the time of her divorce. Therefore, Appellant's legal malpractice claim accrued when she sustained a legal injury, which would have been at the time the community property was divided by the entry of a decree of divorce.

Appellant, relying upon Willis v. Maverick, would have us adopt a bright line rule that says in a legal malpractice cause of action, limitations is tolled so long as the attorney-client relationship exists between the parties. Appellant's reliance on Willis is misplaced. The existence of an attorney-client relationship does not, standing alone, toll limitations in a legal malpractice cause of action. Rather, limitations in a legal malpractice cause of action is tolled due to the attorney-client relationship only when the attorney's malpractice occurs and is discoverable during the course of the underlying litigation being pursued by the attorney on behalf of the client. The Hughes rule, which tolls the limitations period until all appeals in the underlying action are exhausted, is expressly limited to cases involving claims of attorney malpractice in the prosecution or defense of the underlying litigation and does not apply to malpractice claims involving transactional work.

Appellant's Decree of Divorce was signed on January 23, 1998. Therefore, applying the Hughes rule to the facts of this case, the statute of limitations on Appellant's legal malpractice cause of action was tolled until February 22, 1998, the date her divorce decree became final.

Subsequent to the Decree of Divorce becoming final, Manning performed legal services for Appellant in the nature of work incident to the enforcement of the decree. Appellant would have this Court extend the Hughes rule to revive the tolling of limitations during these periods of representation. We conclude that reasons underlying the Hughes rule are inapposite to the facts of this case, and we decline to extend that rule without clear precedent. "

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Pro-Se Legal Malpractice Litigant's Texas Loss

As the commentator says, trying a legal malpractice case as a pro-se is difficult, and a poor choice.  This case was about publicity and litigation.  Pro-se seems not to have opposed a motion for summary judgment, and lost her legal malpractice case.

:Filing a legal malpractice claim pro se is not the best idea. Appellant, a pro se litigant, sought both media attention and judicial relief against an attorney appointed as guardian ad litem and counsel to her. Appellee was appointed attorney and guardian ad litem to Appellant in connection with an emergency removal petition filed against Appellant by the Texas Department of Protective and Regulatory Services on July 26, 2001. On November 13, 2001, Appellee filed a motion to withdraw as counsel of record, based on Appellant’s alleged refusal to follow his advice and insistence on involving the media. Appellee attached a letter from Appellant to the El Paso Times to his motion to withdraw, in which Appellant accused Appellee of being “inadequate and ineffectual.” The trial court granted Appellee’s motion.

On October 21, 2004, Appellant filed a suit against Appellant for legal malpractice, breach of contract, defamation, and violation of her constitutional rights. Appellant filed an answer on November 5, 2004, and then both a traditional and a no evidence summary judgment motion. Both motions were granted; Appellant appeals.

The Court held that it need only analyze the propriety of the no-evidence summary judgment rule, because if its standard was met, the more stringent standard of a traditional summary judgment motion would also be met. "

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Recent Cases and Comments on Legal Malpractice

Norman B. Arnoff and Susan Jacobs'recent article in the NYLJ reviewes three cases with new or novel legal malpractice allegations. They are  Ideal Steel Supply Corp.v. Beil, Grochocinski v. Mayer Brown Rowe & Maw LLP, and Trautenberg v. Paul Weiss Rikind, Wharton & Garrison LLP.

We reported on each of these cases, but the thread, say Arnoff & Jacobs, is that attorneys are using new and unique theories.  In Ideal Steel the theory was that the attorneys pursued a "unique and novel" RICO theory and lost.  In Grochocinski, the theory was that Mayer Brown advised a client not to respond to a TRO motion.  In Trautenberg, the theory was breach of fiduciary duty when Paul Weiss represented Citibank and plaintiff in arbitrations.

For a law professor's comments on these cases, see this article.

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Malpractice Carriers and their Malpractice Law Suits

This is not an entirely new phenominon, nor totally unexpected, but this article relates how carriers and excess carriers are starting to bring legal malpractice law suits after unsuccessful [in this case read: payout] outcomes.

Author: Baldwin, Susan McParland; Breen, Lisa C.

"Malpractice suits by insurance companies against their defense attorneys are increasing. There are two reasons for this phenomenon: the waning of the long-term relationship between insurance companies and their outside counsel and the increased cost-consciousness of these companies. The courts have allowed primary carriers to sue on equitable subrogation or direct duty principles, while some suits by excess carriers have been allowed on the theory that negligent legal advice to the insured caused the settlement to tap the excess policy. The issue has not been conclusively decided."

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New Law on Disclosure of sealed Criminal Histories

This is not strictly legal malpractice, but we wanted to report on this new statute.  Indiscriminate use of youthful offender, or other sealed records of ACDs, dismissals are a frequent problem for attorneys.  What are the rules?  When do these arrest [but not conviction] records surface?  What does a parent do for a kid who has a youthful indiscretion which results in an ACD ?




STATE OF NEW YORK ________________________________________________________________________ 3092 2007-2008 Regular Sessions IN SENATE February 22, 2007 ___________ Introduced by Sen. VOLKER -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the executive law, in relation to unlawful discriminato- ry employer practices concerning youthful offenders and persons convicted of violations The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision 16 of section 296 of the executive law, as 2 amended by chapter 208 of the laws of 1985, is amended to read as 3 follows: 4 16. It shall be an unlawful discriminatory practice, unless specif- 5 ically required or permitted by statute, for any person, agency, bureau, 6 corporation or association, including the state and any political subdi- 7 vision thereof, to make any inquiry about, whether in any form of appli- 8 cation or otherwise, or to act upon adversely to the individual 9 involved, any arrest or criminal accusation of such individual not then 10 pending against that individual which was followed by a termination of 11 that criminal action or proceeding in favor of such individual, as 12 defined in subdivision two of section 160.50 of the criminal procedure 13 law, or by a youthful offender adjudication, as defined in subdivision 14 one of section 720.35 of the criminal procedure law, or by a conviction 15 for a violation sealed pursuant to section 160.55 of the criminal proce- 16 dure law in connection with the licensing, employment or providing of 17 credit or insurance to such individual; provided, however, that the 18 provisions hereof shall not apply to the licensing activities of govern- 19 mental bodies in relation to the regulation of guns, firearms and other 20 deadly weapons or in relation to an application for employment as a 21 police officer or peace officer as those terms are defined in subdivi- 22 sions thirty-three and thirty-four of section 1.20 of the criminal 23 procedure law; provided further that the provisions of this subdivision EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05179-04-7 S. 3092 2 1 shall not apply to an application for employment or membership in any 2 law enforcement agency with respect to any arrest or criminal accusation 3 which was followed by a youthful offender adjudication, as defined in 4 subdivision one of section 720.35 of the criminal procedure law, or by a 5 conviction for a violation sealed pursuant to section 160.55 of the 6 criminal procedure law. 7 § 2. This act shall take effect on the first of November next succeed- 8 ing the date on which it shall have become a law.

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Do a Favor, Get Sued in Legal Malpractice

This Law.Com article describes a star attorney who is now a defendant in a legal malpractice suit in Washington DC. 

"Renowned Washington, D.C., litigator Michele Roberts has the kind of reputation that makes other attorneys salivate with envy.

"She mesmerized juries," says Wiley Rein partner Barbara Van Gelder, who worked for the U.S. Attorney's Office when Roberts was arguably one of the best public defenders in D.C. "She was, to me, one of my most feared adversaries."

Still, there is one case that the seemingly infallible Roberts has not been able to win. It began nearly six years ago as a simple matter, one she agreed to handle as a favor to a federal judge. It has since given rise to a $5 million legal malpractice claim filed against her by a former client.

Vaughn Stebbins, whom Roberts represented in a civil case against the District of Columbia and a Metropolitan Police Department officer, claims that the superstar litigator botched his chance to recover damages for injuries he received after being shot nine times by the police officer in 1998. Stebbins accuses Roberts of blowing deadlines and failing to properly serve a key defendant -- mishaps that led to the dismissal of his case.

Roberts isn't the only defendant in the D.C. Superior Court case. Stebbins has also sued solo practitioner Steven Kiersh and Goodwin Procter, the firm that absorbed Shea & Gardner, where Roberts once worked.

In motions for summary judgment filed in June, Roberts and Kiersh argue that it is irrelevant whether their slip-ups led to Stebbin's case being dismissed, because a reasonable jury would never have sided with him.

Yet that defense has placed the two lawyers in the awkward position of having to tear apart their original case and discount deposition testimony given by the expert witnesses that Kiersh had assembled.

Last month, Stebbins' lawyers -- Richard Swick and David Shapiro of Swick & Shapiro -- filed their own motion for partial summary judgment, alleging that Roberts and Kiersh's negligence was so straightforward that the matter is undisputable.

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Contempt after Legal Malpractice

David Dorfman was a legal malpractice defendant, and then got on the bad side of Federal Judge Denise Cote.  He did not pay the judgment, and eventually, Judge Cote referred the case to the US Attorney.  Here is the result from the NYLJ:

"Attorney Pleads Guilty to Contempt of Court

A lawyer who violated a court order governing management of his law practice following a malpractice verdict has pleaded guilty to contempt of court. David A. Dorfman, who lost a $385,000 malpractice case because he had exaggerated his legal experience and then missed a routine filing deadline in a civil case, repeatedly frustrated the plaintiff and then Southern District Judge Denise Cote as he dragged his heels in paying the judgment. The plaintiff, Ricky Baker, had hired Mr. Dorfman in 1994 to sue New York City after he had been misdiagnosed as HIV-positive, but Mr. Dorfman missed the one-year-and-90-day deadline for filing. On Monday, just a week before his contempt trial was to begin, Mr. Dorfman admitted to violating Judge Cote's order that enjoined him from hiring new staff without the consent of plaintiff's counsel or leave of the court. The contempt prosecution was brought after Judge Cote asked the U.S. attorney's office to bring charges in 2006. Mr. Dorfman faces a maximum of six months in prison when he is sentenced Dec. 7. - "

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No Fee Arbitration Notice, No Lawsuit

A fee arbitration notice is an absolute condition precedent, and must have been given to the client before starting an attorney fee lawsuit.  Here is a case from today in which a client "wins" the County bar fee arbitration, and the attorney seeks a de novo trial, only to have the case dismissed.

"PLAINTIFF LAW firm commenced this action against defendant client alleging defendant failed to pay for legal services rendered. Plaintiff moved for an order permitting it to file an amended summons and complaint asserting an action for a de novo review of the decision of the county bar associations fee dispute arbitration program. Defendant cross-moved for dismissal alleging the original summons and complaint was a nullity as plaintiff failed to offer defendant fee arbitration as required by the Part 137 Rules. The court agreed, ruling any covered action under 22 NYCRR §137.1(b) brought without having previously offered the client fee dispute resolution was a nullity"

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Losing the Underlying Suit is not Fatal in Legal Malpractice

Here is a case in which plaintiff was injured in a construction accident, and lost the case when it was discovered that the wrong parties were sued.  He turns to legal malpractice case, and avoids summary judgment in this decision.Hershorn v Grae, Rybicki & Partners, P.C. ,2007 NY Slip Op 06458 ,Decided on August 21, 2007 ,Appellate Division, Second Department

"The Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint. The issue of whether or not Dinaso could be held liable for the damages alleged in the underlying action was not raised and necessarily determined in the underlying action (see Pinnacle Consultants v Leucadia Natl. Corp, 94 NY2d 426; Gramatan Home Invs. Corp. v Lopez, 46 NY2d 481). Rather, the only issue necessarily determined was that the parties against whom the action was timely commenced, which did not include Dinaso, neither created nor had actual or constructive notice of the alleged dangerous and defective condition caused by the sheetrock. Accordingly, the issue of whether or not the plaintiffs would have prevailed in the underlying action but for the alleged negligence of the defendants in identifying and timely commencing the action as against Dinaso was not raised and necessarily determined in the underlying action, and dismissal of the action at bar was not warranted. "

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How Far Can You Go with a Witness?

Cleary Gottlieb may have gone too far, reports Anthony Lin at the NYLJ when it spoke with a potential deposition witness.  Did they represent the Congo too strongly?

"Manhattan federal judge has sanctioned Cleary Gottlieb Steen & Hamilton for improperly trying to dissuade a witness from testifying about his dealings with the Republic of Congo, which the New York law firm is representing in a dispute with a foreign hedge fund.

In a opinion issued last week, Southern District Judge Loretta Preska said Cleary had acted in "bad faith" by contacting witness Médard Mbemba, a French-Congolese businessman and onetime close friend of Congolese President Denis Sassou-Nguesso, and telling him his participation in a deposition could "destabilize" or "hurt" Congo.

The judge also credited later testimony by the witness that he felt threatened by the warnings delivered by Cleary partner Jean-Pierre Vignaud, because he knew the lawyer had "privileged connections" in the Congolese government.

"[Cleary] has shown a willingness to operate in the murky area between zealous advocacy and improper conduct, and here it crossed the line," Judge Preska wrote in Kensington International Ltd. v. Republic of Congo, 03 Civ. 4578. She ordered that a formal reprimand be circulated to all of Cleary's 950 lawyers and that the firm be assessed the attorney's fees for the sanctions motion. "

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Do Legal Malpractice Defendants Get a Secret Boost?

We have always thought that legal malpractice cases, with the "case within a case"  format were a wee bit more difficult than other litigation.  We had not factored in a "secret bias" aspect.

Federal Judge Dennis Jacobs thinks a little bit differently:

"Dennis G. Jacobs, the chief judge of the federal appeals court in New York, is a candid man, and in a speech last year he admitted that he and his colleagues had “a serious and secret bias.” Perhaps unthinkingly but quite consistently, he said, judges can be counted on to rule in favor of anything that protects and empowers lawyers.

Once you start thinking about it, the examples are everywhere. The lawyer-client privilege is more closely guarded than any other. It is easier to sue for medical malpractice than for legal malpractice. People who try to make a living helping people fill out straightforward forms are punished for the unauthorized practice of law.

But Judge Jacobs’s main point is a deeper one. Judges favor complexity and legalism over efficient solutions, and they have no appreciation for what economists call transaction costs. They are aided in this by lawyers who bill by the hour and like nothing more than tasks that take a lot of time and cost their clients a lot of money. "

"This month, a New Jersey appeals court basically immunized lawyers from malicious prosecution suits in civil cases. Even lawyers who know their clients are pushing baseless claims solely to harass the other side are in the clear, the court said, unless the lawyers themselves have an improper motive.

Lester Brickman, who teaches legal ethics at Cardozo Law School, said the decision was just one instance of a broad phenomenon.

“The New Jersey courts have determined to protect the legal profession in a way that no other professions enjoy,” Professor Brickman said. “It’s regulation by lawyers for lawyers.”

Other professions look for elegant solutions. It is the rare engineer, software designer or plumber who chooses an elaborate fix when a simple one will do. The legal system, by contrast, insists on years of discovery, motion practice, hearings, trials and appeals that culminate in obscure rulings providing no guidance to the next litigant.

Last month, Judge Jacobs put his views into practice, dissenting from a decision in a tangled lawsuit about something a college newspaper published in 1997. The judges in the majority said important First Amendment principles were at stake, though they acknowledged that the case involved, at most, trivial sums of money.

Judge Jacobs’s dissent started with an unusual and not especially collegial disclaimer. He said he would not engage the arguments in the majority decision because “I have not read it.”

He was, he said, incredulous that “after years of litigation over $2, the majority will impose on a busy judge to conduct a trial on this silly thing, and require a panel of jurors to set aside their more important duties of family and business in order to decide it.”

Writing with the kind of verve and sense of proportion entirely absent in most legal work, Judge Jacobs concluded that “this is not a case that should occupy the mind of a person who has anything consequential to do.”

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Attorney Fee Disputes Starts Small, Ends Big

Attorney A hires Attorney B to help in a big antitrust law case, and promises 10% of the fee will go to Attorney B.  When Attorney A is paid, he refused to send 10% to attorney B.  From there, it all goes bad, and after 10 years, Attorney A has to pay not $ 23,000, but rather $ 250,000.

Law.Com reports: "Refusing to pay $28,000 in attorney fees a decade ago has turned into a more than $250,000 headache for Houston attorney Robert S. "Bob" Bennett.

In an Aug. 16 memorandum opinion in Bennett v. Coghlan, a three-justice panel of Houston's 1st Court of Appeals affirmed an award of tens of thousands of dollars in attorney fees that lawyer Kelly Coghlan says he had to run up trying to collect attorney fees Bennett owed him .Coghlan says Bennett received about $250,000 of the approximately $9 million in attorneys' fees the federal court awarded after the Mrs. Baird's litigation settled in 1996, but Bennett refused to pay Coghlan's bill for $28,000 and instead sent him a check for $5,000 on April 3, 1997. But Coghlan says he returned Bennett's check.

"He sort of gave me a tip," Coghlan says. "I took umbrage at that."

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Indian Casino, Its Sponsor and Legal Malpractice

A Federally recognized Indian Tribe Casino right next to Disneyland in California?  How is it possible that in the middle of Orange County there can be an unknown, unrecognized yet legitimate Indian Tribe, which might have the right to a Casino?

We don't know, but the players and participants are already involved in legal malpractice cases.

" GARDEN GROVE – Jonathan Stein believes his tribe is going to build a casino a few blocks away from Disneyland in the heart of Garden Grove.

The Santa Monica attorney and New Jersey native is not a member of the Gabrielino-Tongva Indian tribe or even a resident of Orange County. But as the tribe's chief investor, Stein is the driving force behind an ambitious, long-shot attempt to reshape the landscape of Orange County's high-profile resort area by bringing in the county's first gaming casino.

If built, the casino resort – plans call for high-end hotels, slot machines, card tables, upscale stores and other entertainment venues – is projected to generate about $70 million for the city annually.

Stein's history with Indian tribes started in 2001 when he got together with Sam Dunlap, a Gabrielino, and helped him form the Gabrielino Tribal Council, with the goal of helping the tribe secure gaming rights.

The group fell out with Stein, and each party ended up suing the other. Stein alleged that the group did not pay him what was owed to him. The group accuses Stein of breach of fiduciary duty and trust; legal malpractice and misappropriation of trade secrets, according to court filings.

Tribal vice chairman Martin Alcala said he believes Stein led them down the wrong path by telling them they did not need federal approvals.

"He wanted to take control of everything, including the money," Alcala said. "And when we parted company, he did everything in his power to destroy us."

But Stein dismisses that contention and maintains that it was he who raised more than $20 million from Wall Street for the tribe.

"I spent more than five years unifying the tribe," Stein said. He says the Santa Monica Gabrielinos account for a little over 80 percent of the total Gabrielino population in the country.

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Airplane Crash Legal Malpractice Case Nets $ 5.5 Million

Yesterday we reported on a legal malpractice case in which the attorney "helped" the client to get insurance payments, but did not bring a personal injury action against the pilot or the owner of the private plane which crashed into plaintiff's house.

Today the Poppe Law Firm Blog reports that "In one of the largest legal malpractice verdicts in Kentucky history, a jury returned a verdict today against attorney Steve Keeney for $5 million. The allegations of legal malpractice arise out of his handling of a case for Brenda Osborne, of Middlesboro. The Jefferson Circuit Court jury determine that Keeney lost a federal court case stemming from the an airplane accident in which she could have recovered about $1.3 million (this is known as the "case within a case." It awarded her that amount, as well as $250,000 for mental anguish. The jury also voted 11-1 to award of $3.5 million in punitive damages, which are meted out to deter and punish intentional and willful misconduct.

This was an unusual case because Osborne was not physically injured when a small plane crashed into her home. She escaped her home without physical injury--however, Keeney told her the case was worth about a $1 million. This jury agreed with her; however, it's Keeney's legal malpractice insurance company that will have to pay the verdict, not the pilot of the plane. "

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Try to Make Sense of this Alabama Case of Legal Malpractice

A judge is hired to write a will for a disabled man, and it all ends up with the Judge being sued and then having to give back $ 1.2 million in fees and 600 acres of land.  It's the middle part we cant figure out.

"A Washington County judge has been ordered to repay $1.2 million to a woman he represented in an estate case and give her back 600 acres of land, according to a Mobile County Circuit Court ruling.

Stuart DuBose, who was elected last year to serve as circuit judge over Choctaw, Clarke and Washington counties, responded in a letter faxed to Mobile County Circuit Judge John Lockett by saying that Lockett's ruling was "not legal" and "immoral."

"This order must not become public knowledge," DuBose wrote. "It must not be recorded. It will ruin me professionally and further ruin me financially According to court documents, Weaver soured on DuBose shortly after Sullivan died. After DuBose clarified in a letter that his cut of the estate was a fee of 40 percent, or about $1.2 million, she fired him as her attorney and tried to drop him as the estate's lawyer.

Weaver sued DuBose, accusing him of malpractice, misrepresentation and negligence, as well as designating himself both the attorney for the estate and for Weaver without ever informing her of a potential conflict of interest. That suit was tossed out.

The original settlement was kept confidential. Court files do not specify all the terms of the settlement or make clear Lockett's reasoning for ruling that DuBose failed to live up to the terms.

Lockett ruled that DuBose or the Sullivan estate must pay Weaver $1.19 million. In addition, Lockett said DuBose must return three parcels totaling 605 acres to Weaver within 30 days because DuBose violated the settlement order when splitting Sullivan's land between his law firm and Weaver "

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Suing the Opponent's Attorney in Legal Malpractice

Law.Com reports  on Positive Software Solutions, et al. v. Susman Godfrey, et al.  filed last week in the U.S. District Court for the Northern District of Texas in Dallas, Positive Software and its Chief Executive Officer Edward Mandel allege that the defendants -- Susman Godfrey; firm partners Barry C. Barnett and Ophelia F. Camina of Dallas; Frank Nese, a senior manager at New Century; Jeff Lemieux, the CEO of a New Century-associated entity; and John Norment, New Century's chief technology officer for its retail division -- engaged in fraud and civil conspiracy by knowingly withholding evidence and offering false testimony during a 2004 arbitration hearing and before the district court over a dispute between New Century and Positive Software concerning the ownership of proprietary software. The plaintiffs also bring a copyright infringement action.

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Plane Crashes into Your Home, Attorney Misfiles Your Case

This Kentucky woman was sitting home, minding her own business when a plane crashed into the house.  She hired an attorney.

"An English teacher at Pineville High School, Osborne was devastated by the crash, which destroyed her home and belongings. Her blood pressure skyrocketed and her diabetes flared, according to her doctor, and each time she returned to sift through the contents of her former home, she broke into tears, she said.

She thought Keeney's fee was expensive, but he promised that she had a strong case against the pilot, who owned the plane.

The National Transportation Safety Board's findings, while not admissible in court, said the probable causes of the crash were inadequate maintenance and the pilot's decision to fly with a "known deficiency."

Before the pilot took off, a mechanic saw him spraying fuel from a squirt bottle into an engine, which then backfired and burst into flames. The pilot departed anyway but got only 50 feet off the ground before losing power and crashing into Osborne's attic. The pilot and a passenger survived, but were seriously injured.

The month after retaining Keeney, they met with the company's adjuster, who had already cut checks for $151,390 for the loss of her home.

Even though Keeney had done "nothing to earn it," Sitlinger said, Keeney took 20 percent -- about $30,000. After paying off her $96,000 mortgage, Osborne was left with about $24,000.

A few months later, after Osborne painstakingly worked to draw up an inventory of the home's contents, State Farm paid out another $72,051; Keeney took 20 percent -- again, "for no work," Sitlinger said.

Keeney claimed he sent $5,573 to Osborne's ex-husband, David Osborne, to cover items he had stored in the house, but David Osborne swore later in a deposition that he never received it.

When she inquired about a third check from State Farm, for $11,000 in replacement costs, she discovered Keeney had deposited the check in his personal account -- rather than an escrow account, as required by ethics rules, Sitlinger said.

Keeney had endorsed her signature, which he said he had the authority to do under a contract he produced only after Osborne sued him. He also testified that she had authorized him to put the money in his personal account.

"That's a lie," Sitlinger told the jury. "I can't sugarcoat it."

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Supersize that Legal Malpractice?

Supersize it!  Not a Wendy's advertising pitch. but this legal malpractice case took place in one.  This case is being cited for Federal jurisdiction and removal [not areas we cover often], but for us, the issue will be whether employees have standing and privity to sue attorneys hired by their employer.  We think not, and will follow.

"This consolidated action was initiated by plaintiffs, including present and former employees of defendant Café Express LLC (“CEL”). CEL is a restaurant established by defendant Augusta Foods, LLC (“Augusta”), with majority stock holder being defendant Wendy’s International (“Wendy’s”). Plaintiffs alleged, that in exchange for weekly payroll deductions, defendants CEL, August and Wendy’s agreed to arrange to file and prosecute the employees' Applications for Alien Employment certification (“Applications”) under The Life Act Amendments of 2000, 8 U.S.C. § 1255 (i) (1) (B) and (C) (the “Life Act”). The Life Act enabled certain aliens to apply for an adjustment to permanent resident status, provided the Application was submitted by April 30, 2001.

The restaurant defendants arranged with various law firms to prosecute the Applications, but the plaintiffs contended the defendant attorneys failed to file the Applications by the deadline. Additionally, despite this filing error, the restaurant defendants failed to notify the plaintiffs until July of 2006 and continued to deduct weekly fees. The plaintiffs alleged the defendants were liable under the following legal theories: legal malpractice, breach of contract, negligence, negligent misrepresentation, unjust enrichment, restitution, conversion, breach of fiduciary duty, fraud or intentional misrepresentation. "

This case, similar tothose in which union employees are unable to sue an attorney provided to them by the union, will no doubt be reported again.  Follow with us.

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REFCO, IPOs, and a $! Billion Legal Malpractice Case

IPOs mean big money, Securities trading means big money, and the REFCO IPO has led to a $1 Billion legal malpractice case.  This story is all about big money.

"A court-appointed trustee responsible for retrieving funds for Refco Inc. creditors has sought more than $2 billion in damages from a prominent Chicago law firm, three accounting firms and several investment banks that played a role in Refco's 2005 initial public offering.

The trustee, Marc S. Kirschner, filed a lawsuit Tuesday against law firm Mayer, Brown, Rowe & Mawe; accounting firms Grant Thornton, Ernst & Young and PricewaterhouseCoopers; and Credit Suisse Securities, Bank of America and Deutsche Bank Securities, the investment banks involved in the $583 million IPO.

The IPO, Kirschner said in an interview, was the "cashing-out portion" of a long-running fraud. It came after years of building an illusion that Refco was a successful brokerage, an effort begun by its former Chief Executive Phillip Bennett, but one that could not have been carried out without the help of outside professionals. "

Bennett has pleaded not guilty to fraud charges connected to $430 million worth of hidden bad debt.

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$ 1 Million Florida Estate Legal Malpractice Case Upheld

Law.Com reports: "A unanimous panel of the 4th District Court of Appeal upheld a $1 million legal malpractice judgment against the law firm Gunster Yoakley & Stewart awarded to the heirs of the Gannett newspaper fortune.

The case arose from a dispute over the estate of Charles V. McAdam Jr., a wealthy Palm Beach, Fla., resident who was married to Sarah Gannett -- daughter of Frank Gannett, the founder of one of the largest newspaper chains in the country. His two sons sued Gunster, shareholder Daniel A. Hanley and JPMorgan for breach of fiduciary duty, constructive fraud, civil conspiracy and unjust enrichment.

On Wednesday, the 4th DCA panel, in an opinion written by Judge Mark E. Polen, said the "plaintiffs showed that their father's intent, as expressed in his will, was frustrated by the negligence of Gunster Yoakley and that, as a direct result of such negligence, their legacy was diminished."

Attorneys for two sons of McAdam could not be reached for comment. Gunster Yoakley did not provide comment by deadline Wednesday. The firm's attorneys, Louis Mrachek and Alan Rose of Mrachek Fitzgerald and Rose in West Palm Beach, did not return phone calls seeking comment. "

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This Legal Malpractice Case is Too Twisted to Understand

This case takes a graph to try to understand.  Here is a legal malpractice case in Texas, involving BP and an explosion.

Plaintiffs hire attorney Krist to sue BP, after an explosion.  Krist successfully sues BP and settles the case, taking no fee.  Krist represented the husband only, and not the wife in a loss of consortium claim.

Then Krist moves to the other side, and starts to defend BP in other explosion cases.  Plaintiff sues Krist, using a rival and antagonistic attorney to sue.  Claims that Krist settled for too little, should have represented wife, and sold plaintiff out.

"The high-stakes battle over whether Houston lawyer Ronald D. Krist should help defend BP from suits filed over a deadly explosion at the company's Texas City refinery took another twist on Monday when a former client who had hired Krist's firm to sue BP over the explosion filed a professional negligence suit against Krist, the firm and others.

Jose L. Elizondo, who filed Jose L. Elizondo v. Ronald D. Krist, et al. in state court in Harris County on Aug. 20, is one of four individuals who hired the Krist Law Firm to seek damages from BP for the 2005 explosion, which killed 15 people and caused injuries and property damage.

Elizondo is represented by John M. O'Quinn and Michael J. Lowenberg of the O'Quinn Law Firm of Houston.

In early 2006, Elizondo and three other clients accepted settlements -- without filing suits -- that Ronald Krist negotiated with BP. Krist subsequently signed on to help defend BP in other litigation related to the explosion. "

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Trouble: A Judge and His Maserati

Small town law is a different animal.  NYC lawyers often have no experience, or forget how different law is in the outlying districts.  The NY Times recently ran a series of articles on justice courts upstate, and on the thousands of non-lawyer judges there.

Here is a shocking story.   Small town judge [actually a judge in several small towns] who also has a law practice believes X scratched his Maserati.  He has X arrested, and then, while the case is on the Judge's docket, conditions a dismissal or a transfer to some other judge on restitution.

Conflict of interest?  Well, its hard to argue otherwise. "Hartzman ended up being criminally charged with scratching the car, and while the case was pending on Korpita's docket, the judge pressured Hartzman to pay for the damage, the complaint says.

The suit, filed Aug. 13 in Newark, N.J., includes a civil rights count under 42 U.S.C. 1983, a deceit count and a malicious abuse of legal process count against Korpita, who sits in Rockaway Borough.

Hartzman also sued Korpita and the police department for malicious prosecution. And he claims that Korpita, the borough and the police intentionally or negligently inflicted emotional distress, falsely arrested and imprisoned him, and wrongfully enforced the law. The suit alleges that the police took Hartzman into custody for several hours without charging him.

Hartzman is seeking declaratory and injunctive relief finding that Korpita is unfit to serve on the bench and enjoining him from doing so. In addition, Hartzman is seeking compensatory and punitive damages. The suit is Hartzman v. Korpita, 07-3848. "


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A New Trend or Just Another Way to Anger a Judge?

This interesting twist on an old fashioned desire to win an appeal comes from Texas.  Attorney brings legal malpractice case and loses.  He goes to a hearing with his own court reporter, saying it's to capture any off the record comments by the judge, "in order to to capture for purposes of an appeal any off-the-record comments Walker might make during the hearing that explained the reasoning behind his decision. "

Don't people use yellow pads anymore?



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Jail or Legal Malpractice...Your choice!

First, our disclosure.  We were a prosecutor, and we have done a little criminal defense work, but we have never been in this position, as told by Law.Blog

"A public defender in Ohio was arrested on Thursday for contempt of court after he declined to move forward with a misdemeanor assault trial he had been assigned just a day earlier. At the start of the trial he told the judge he was unprepared"  in Ravenna, Ohio

"Before trial, Judge Plough had reportedly given the public defender, Brian Jones, an extra two and a half hours to prepare. Jones was released from jail on Friday, and his contempt hearing is set for this Friday.

Plough didn’t comment to ABC News but told the Record-Courier: “The public defender’s office is not going to impede justice in Portage County."

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Big Business Legal Malpractice Case

Legal malpractice is not just about missed personal injury statutes, nor about simple failures in calendar practice.  Here is an anti-trust legal malpractice case involving Mylan Labs and the Eliot Disner law firm. The lab paid out more than $ 150 million in penalties and disgorgement.

"In June, Mylan Laboratories Inc. and UDL Laboratories, Inc., one of its subsidiaries, sued their former counsel, Eliot G. Disner and his firm, Eliot G. Disner, P.C., in the Circuit Court of Monongalia County, West Virginia (Morgantown), for what they claimed was negligence and breach of contract regarding advice he provided on antitrust issues. Here's the complaint.

Mylan alleges that Disner committed malpractice in three ways. First, he "allowed Mylan to enter into the exclusive supply agreement with Profarmaco/GYMA [who were to supply Mylan with the "active pharmaceutical ingredients" for lorazepam and clorazepate for the generic versions of the drugs on an exclusive basis] without fully investigating the issues or apprising Mylan of the substantial risks." Mylan also alleges that Disner allowed it "to engage SST/FIS [another supplier of lorazepam and clorazepate] in discussions on a similar exclusive arrangement, introducing a damaging horizontal element into an antitrust equation." Finally, Mylan alleges that after the FTC initiated an investigation into Mylan's conduct, Disner "offered no advice to mitigate the problems facing Mylan or suggesting the risks that Mylan faced -- instead advising that the FTC would accept a harmless consent decree, that the FTC had no ability to seek damages, and that the states would drop their claims when the FTC dropped its claims."

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Even Charity can have Legal Malpractice Considerations

Law Com relays this story of an attorney-executor who had control of an estate's charitible contributions, and is now being sued for his selection of where to give away the money.

"A Pittsburgh no-kill animal shelter has filed a five-count lawsuit against a Pittsburgh attorney, alleging that he illegally reduced its portion of a wealthy widow's multimillion-dollar estate.

Animal Friends Inc. claims in the lawsuit, filed in the court of common pleas, that Gregory Harbaugh of Houston Harbaugh abused his power-of-attorney status and diverted $1.2 million from four charitable organizations to three other charitable organizations with which he or his wife has financial ties.

The suit claims that Harbaugh secured power-of-attorney status in a questionable circumstance against Rita Conrady, whose "physical and mental condition made her an easy prey."

The suit also contends that Harbaugh breached his fiduciary obligations to both Conrady and to the originally named beneficiaries. The other counts in the complaint are breach of contract, intentional interference with an inter vivos trust, and fraud in the inducement. "

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KPMG, Gibson Dunne and The Continuing Trial

 Law.Com reports that the KPMG trial continues, and more attorney witnesses are being called to testify.

 "Collateral damage from the KPMG tax shelter imbroglio has struck Hogan & Hartson and two of the firm's most prominent attorneys -- Prentiss Feagles, co-director of the firm's tax practice, and Paul Rogers, a partner in the firm's health practice.

Both lawyers were subpoenaed last month at the request of KPMG's lawyers at Gibson, Dunn & Crutcher, who are defending their client over work done on behalf of Bernard Salick. Salick is a Los Angeles physician and entrepreneur who filed suit in California Superior Court in March 2005 against KPMG after shady tax shelters were sold to him by the company. Salick used three shelters, all thrown out after state and federal tax audits, to shield a significant part of his estimated $100 million net worth.

At the request of KPMG, the Superior Court issued a subpoena, which was then approved by D.C. Superior Court on July 27, for all documents pertaining to work done for Salick by the two Hogan lawyers from January 1995 to November 2003. Feagles says Salick came to the firm as a client of Rogers.

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A Judge Convicted of Rape, Reversed on Appeal Sues in Legal Malpractice

Its a horrible story.  A respected person,  in this case a judge, convicted of rape, reversed and exonorated on appeal now sues for legal malpractice.  Forgetting the technical issues of arbitration or trial of the legal malpractice case,  how terrible a situation is this? Posted In Blog Articles
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Multiple Parties, Multiple Names

Here is the nightmare:  you have a good case against an international hotel corporation for lack of security, and you have a badly injured client.  Do you take the case or refer it to a law firm that has done this type of work before?  As many attorneys know, sadly, trying to sue Club Med requires learning the actual names of  both the local and US corporations.  Here, in this case  plaintiff's attorney missed several Hilton corporations and now has a problem.

"A Manhattan attorney's confusion about the proper parties to sue did not justify filing a vicarious liability claim four months beyond the statute of limitations, a federal judge has held.

However, Southern District Judge Miriam Goldman Cedarbaum in Chrobak v. Hilton Group, 06 Civ. 1916, allowed to proceed a negligent supervision allegation filed by a woman who claimed that she was raped by a security guard at the hotel where she was vacationing. Mr. Manchanda, an attorney with the Manchanda Law Offices in Manhattan, said in court papers that though the parties were not named in the original complaint they should have known that, but for a "mistake," they would have been named.

Judge Cedarbaum said this argument was "unavailing."

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Legal Malpractice and Representation in Bankruptcy...It's a little Complicated

Here, in acase reported from Texas by James (Sandy) McCorquodale we read of a creditor's committee which wants the court to disqualify Fulbright & Jaworski, LLP from representing the bankrupt, alleging that they misfiled, filed late, and lost assets for the estate.  For now, the court has refused to disqualify the firm. In re Specialty Restaurant Group, LLC, No. 07-30779-HDH-11 (N.D. Tex. April 24, 2007). Ruling on Creditor’s Application to Disqualify Debtor’s Attorneys.
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Changes to GOL 15-108 affect Legal Practice

Here is an article on the changes to General Obligations Law section 15-108 by Patrick D. Bonner, Jr.

"Section 15-108 of the New York General Obligations Law (GOL) is a statute near and dear to any practitioner defending personal injury or product liability lawsuits in New York. The statute establishes the rules for apportionment of damages and contribution claims among joint tortfeasors in the situation where one defendant in a multidefendant lawsuit has settled prior to trial.

Recently, the New York State Legislature enacted an important amendment to GOL §15-108,1 effective July 4, 2007, that potentially may impact the way these cases are defended. The amendment - which adds a subsection (d) to §15-108 - removes from the scope of the statute (1) releases and covenants for less than one dollar; (2) releases and covenants that fail to "completely or substantially" terminate the dispute; and (3) such releases or covenants provided subsequent to the entry of judgment.

This article examines the legal and practical changes the amendment will have on the operation of §15-108 in connection with the defense and potential settlement of personal injury cases in New York. More specifically, the article discusses how the new amendment has the practical effect of shifting the burden to defendants, especially those with deep pockets, with regard to the collection of money judgments against released tortfeasors, as well as some of the unintended pitfalls that the amendment may create for defense counsel. "

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Mistake upon Mistake in Legal Malpractice

Its bad enough to make mistakes, worse to make them while representing clients, and even worse when it comes in a legal malpractice case.  Here is a case from Texas where the attorney lost a motion for summary judgment because he did not submit an expert affidavit on time.

Sprowl v. Dooley, No. 05-06-00359-CV (Tex. App.–Dallas May 8, 2007

"Sprowl had hired the law firm of Dooley & Rucker to pursue a defamation case; she later filing a malpractice claim against the law firm of Marshal Dooley and Michael Scott for negligence, fraud, and violations of the Texas Deceptive Trade Practices Act (DTPA).

The defendants moved for summary judgment. Sprowl failed to timely file an expert’s affidavit addressing the standard of care of a reasonably prudent attorney and the alleged causal link between any breach of the duties by her attorney and her claimed injuries. The associate judge granted the summary judgment.

Sprowl appealed the decision to the district court, which heard arguments on December 12, 2005. Three days later, Sprowl filed an expert affidavit of Charles McGarry to support her legal malpractice claims. In February 2006, the district court entered a final judgment, which affirmed the associate judge’s ruling.

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North Dakota Legal Malpractice Insurance Disclosure

The State Bar Association of North Dakota has proposed a new rule that would require that members of its bar file an annual statement that confirms that the attorney has private clients and, if so, whether the attorney has or intends to obtain malpractice insurance. The North Dakota Supreme Court has put the proposed rule out for comments through September 12 Posted In Blog Articles
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Did This Firm Tell Too Much in Legal Malpractice Case?

Legal malpractice case is brought and settled.  Now, after " a legal malpractice suit against Dallas securities attorney Phillip W. Offill Jr. and his former firm settled, the parties involved seemed happy, but that satisfaction was short-lived. Now a Dallas firm that represented plaintiff Consolidated Sports Media Group in that legal malpractice case has filed its own suit against CSMG, its co-counsel and others, alleging it was cut out of the deal.

But the new suit brought by Nowak & Stauch raises a separate issue: whether it discloses too much information surrounding the confidential settlement CSMG and other plaintiffs reached in the legal malpractice case. "

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In Japan they do things Differently

Here is a news release which tells us precious little about the legal malpractice case.  Would a US newspaper have run this article without telling who the law firm which paid $ 19 million was?

"Tokyo Kikai Seisakusho Ltd. <6335> said Friday it will receive 19 million dollars to settle its dispute with a U.S. law firm over alleged legal malpractice.

The Japanese newspaper rotary press maker declined to name the law firm or give details of the malpractice, citing a nondisclosure agreement.

Tokyo Kikai revised up its group net profit estimate to 2.2 billion yen from 1.1 billion yen for the year to March 2008.

Tokyo Kikai had been seeking damages payments from the law firm blaming it for the loss of a U.S. antidumping suit that led the Japanese company to pay 4,480 million yen in damages to U.S. printing maker Goss International Corp. "

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Keno Operator Wins Legal Malpractice Case Yet Again

We reported on this case several months ago.  Keno operator loses  when"he got bad legal advice from attorneys with Omaha's McGrath North Mullin & Kratz law firm when he sought to dissolve his former partnership with Robert Anderson in 1998. "   Now after a reduction by the trial court, the appellate court has reinstated a higher verdict. "A Douglas County District Court jury awarded Bellino $1.6 million after a 2006 malpractice trial. But the verdict was reduced by the judge to $229,000 — the amount of Bellino's attorney and accounting fees in the case.

In a 6-0 decision, the Supreme Court restored the original award. The high court said it was reasonable for jurors to conclude that the attorneys' negligence substantially increased Bellino's costs for dissolving the partnership. "

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An In-Court Settlement will be Binding

Settlements and the method by which they are reached are often very important in legal malpractice.  Usually, the issue is whether the settlement truely reflects what plaintiff bargained for, or is the plaintiff merely dissatisfied?  Here is a case from the 2d Circuit that comments on this problem.  In court settlements are generally sacrosanct in New York state and federal courts, and this case is no exception.  Here is the decision in Powell v. Omnicom, 06-0300-cv ,Decided: August 7, 2007 in the U.S. COURT OF APPEALS SECOND CIRCUIT
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New Law Solves a Prior Legal Malpractice Trap

The Court of Claims is the only court in which New York State may be sued, and of course, only New York State may be sued in the Court of Claims.  It is often said that the Court of Claims is a statutory court with special rules.  One of the rules was that a specific amount had to be stated in a complaint, and the failure to do so was jurisdictional.

Claimants [not plaintiffs] lost their rights based upon this small defect.  Now, the law has changed. Today'sNYLJ article reports:

"Suits being brought in the Court of Claims need no longer specify how much in damages the plaintiffs are seeking in actions for personal injury, medical, dental or podiatric malpratice or wrongful death, under legislation signed into law by Governor Eliot Spitzer.

The governor wrote in an approval message that the new statute is in response to the ruling in Kolnacki v. State of New York, 8 NY3d 277 (2007) in which the Court of Appeals, ever the stickler for adhering to court filing procedures, dismissed a Court of Claims action because it failed to have a completed ad damnum clause (NYLJ, March 23, 2007)."

The governor also signed a bill that allows judges to ignore, or allow to be corrected, harmless errors made in court papers at the commencement of actions.

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Day Casebeer Attorneys Told to Defend Their Actions

Law Com reports a further spin off of the QualComm litigation problems. 

"It’s something no lawyer wants to get — a ruling from a federal magistrate saying, essentially: “come on down to court and explain to us why you don’t think you should be sanctioned for your behavior.” But that’s what lawyers at Day Casebeer Madrid & Batchelder, based in Cupertino, Calif., received earlier this week from San Diego federal magistrate Barbara Major.

The ruling was essentially a follow-up to a separate ruling made last week by San Diego federal judge Rudi Brewster. Judge Brewster held that wireless giant Qualcomm and its trial counsel, which included lawyers from Day Casebeer, committed “gross litigation misconduct” by withholding crucial evidence in a patent dispute brought by Broadcom. He ordered Qualcomm to pay legal fees to Broadcom, which could amount to $10 million.

Earlier this week, Qualcomm general counsel Lou Lupin resigned in the wake of the situation. Now the spotlight is swinging to the wireless company’s outside counsel, who have been requested to appear in court on Aug. 29 to explain themselves. "

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Here's a Nice Lawyer Story...You supply the Analogy

Law blog reports this story of an attorney who saved a life.

"This past weekend, a Lerach Coughlin lawyer, Paul Geller (pictured, left), a name partner at the firm and head of its Boca Raton, Fla., office, saved a pregnant woman and her small schnauzer, Midnight Duke, from two attacking pitbulls"

"We caught up with Geller this morning, who recounted the tale. Geller was driving his 8-year old son home from a soccer practice last Saturday evening when, on a residential street in Delray Beach, he saw two pit bulls attacking a woman walking her dog. He pulled his car over and, after explaining to his son what he was about to do — “don’t try this at home” — he exited the car and ran to the melee. “The woman was on the ground and one of the pit bulls was on top of her,” he recalls. “Blood was everywhere.”

Geller says he was nervous — “the adrenaline was flowing” — but he had something going for him that the rest of us might not — he’s an expert in jujitsu, chronicled in this recent article from Boca Life. (Note to Hollywood writers looking for quirky-lawyer details for your next screenplay: Geller practices jujitsu in a room in Lerach Coughlin’s offices.)

“My instinct was that I should kick the dog that was attacking,” he says. “So that’s what I did.” Geller says he barked a few loud commands at the startled dog, at which point it and its colleague ran back toward the yard from which they’d come. Geller helped the woman and a badly wounded Midnight Duke into his car and saw them to safety. The aftermath — the woman, who suffered a bite to the face, and her baby are fine, as is Midnight Duke, who had to undergo a lengthy surgical procedure. Geller, who calls himself a dog-lover, says he isn’t sure what became of the pit bulls."

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Reminder: Big Changes in Motion Practice and Service

Times for notice of motion and cross-motion changed in July.  We reported it, and here is an article from the NYLJ by Howard Shafer which gives a comprehensive outline.

"The New York State Legislature passed an act amending New York Civil Practice Law and Rules R. 2214(b) and 2215.1 These recent amendments to the New York CPLR, effective July 3, 2007, make significant changes to the notice requirements for making and responding to motions cross-motions.

Notices of motion are usually served by mail. In the case of ordinary mail, five days are tacked onto CPLR R. 2214(b)'s requirement that the movant must give at least eight days notice of the motion, thus making the notice period 13 days.5 One day is tacked on where overnight mail service is used, making the notice period nine days.6

For example, if today is Aug. 1 and the motion papers are to be mailed today, the earliest day for which the hearing can be set if service is to be via ordinary mail is Aug. 14. If service is to be via overnight mail, the earliest day for which the hearing can be set is Aug. 10.

CPLR R. 2214(b) further requires that answering affidavits be served at least two days before the motion is noticed to be heard. Using the previous example, the other side must now serve its answering papers by placing it in the mail on Aug. 12. CPLR 2103(b)'s tacking-on of days does not apply to answering papers."

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Is Divorce Legal Malpractice a Different Kind of Animal?

In this New Jersey Case , DIANNE VIGLIONE v.CHRISTINE FARRINGTON, ESQ.,  we find the NJ Supreme Court discussing the emotional and cerebral aspects of matrimonial litigation, and giving the plaintiff a little breathing room in bringing this legal malpractice case.  Does this portend a different rule for matrimonial legal malpractice cases in NJ?

Great emotional pain and stress are attached to contested matrimonial proceedings, where "the client's desires may be influenced in large measure by the advice the lawyer provides[.]" Ziegelheim v. Apollo, 128 N.J. 250, 261 (1992). An economically dependent spouse relies on his or her matrimonial attorney to lead the way through the litigation labyrinth to the path of future economic security. Nothing in this record suggests that plaintiff knew or should have known that defendant had taken her off-course. While plaintiff expressed disappointment with the final divorce settlement, she had no reason to know that defendant's advice regarding the resolution of the alimony and equitable distribution issues upon the termination of her long-term marriage, were significantly flawed.

Plaintiff's acceptance of defendant's expertise, supporting her lack of knowledge that malpractice had occurred, was accentuated by plaintiff's execution of a post-judgment retainer agreement with defendant one month following the divorce settlement. Had plaintiff possessed the knowledge that legal malpractice occurred, she would likely not have engaged defendant to provide new legal services.

Also, we do not agree that plaintiff's conversation with Ruitenberg prior to signing the PSA provided sufficient notice of the "facts essential to the malpractice claim," Vastano, supra, 178 N.J. at 236 (quoting Grunwald, supra, 131 N.J. at 494), such that her cause of action accrued. Ruitenberg, an accountant, is unqualified to give legal advice. Further, the record reveals Ruitenberg also told plaintiff "you have to listen to your attorney." And plaintiff did just that by accepting the PSA. Her actions are not only understandable, but were reasonable, under the totality of the circumstances. Giving plaintiff the benefit of the discovery rule, we conclude her cause of action was not barred by the six-year statute of limitations, N.J.S.A. 2A:14-1, when her malpractice complaint was filed.

The motion judge's tangential comments regarding the defenses of waiver and estoppel raise fact-sensitive issues, which cannot properly be determined in a motion for summary judgment. The specific representations by Corcoran, as well as any assertions by plaintiff in the post-judgment hearing before Judge Humphreys, need to be further examined.

Finally, we determine the motion judge must again review her discretionary denial of plaintiff's application to amend her complaint to add an additional cause of action for malpractice based on defendant's alleged violation of RPC 1.4, 1.7, and 1.8. Because the motion judge's conclusion was bottomed on the dismissal of the complaint as barred by the statute of limitations, which decision we have reversed, consideration of plaintiff's request must be made and fairly evaluated in the light of our disposition. "

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Discovery Statute of Limitations in New Jersey

Here is a comprehensive and well written case from NJ which discusses when a statute of limitations starts to run there.  NJ, unlike NY has a "discovery" statute of limitations. DIANNE VIGLIONE v. CHRISTINE FARRINGTON, ESQ.,

"A legal malpractice action is based on negligence. Grunwald v. Bronkesh, 131 N.J. 483, 492 (1993). A cause of action for malpractice usually "accrues when an attorney's breach of professional duty proximately causes a plaintiff's damages." Ibid. This occurs when a plaintiff "detrimentally relies on the negligent advice of an attorney." Id. at 495. The timeliness of a complaint for legal malpractice is governed by N.J.S.A. 2A:14-1; McGrogan v. Till, 167 N.J. 414, 417 (2001). The statute requires that a legal malpractice action commence within six years from the accrual of the cause of action. Id. at 424-26; Grunwald, supra, 131 N.J. at 499.

While the above formulation may seem to provide a bright-line rule, the Court has recognized "the unfairness of an inflexible application of the statute of limitations when a client would not reasonably be aware of 'the underlying factual basis for a cause of action.'" Vastano v. Algeier, 178 N.J. 230, 236 (2003) (quoting Grunwald, supra, 131 N.J. at 492-93). To protect such uninformed clients, the Court has adopted a discovery rule in situations where the injury is "not readily ascertainable." Ibid. On this point, the Court has explained:

Without the discovery rule, the limitations period would run from the occurrence of the negligent act. Therefore, a scoundrel would have an incentive to conceal material facts from or to misrepresent those facts to the client so that a malpractice claim would be time-barred. Applying the discovery rule to legal-malpractice actions will remove the incentive to deceive and thus will preserve the fiduciary duty of full disclosure. [Grunwald, supra, 131 N.J. at 494.]

The Court concluded that the statute of limitation period for a legal malpractice claim, in these circumstances, does not run until "the client suffers actual damage and discovers, or through the use of reasonable diligence should discover, the facts essential to the malpractice claim." Vastano, supra, 178 N.J. at 236 (quoting Grunwald, supra, 131 N.J. at 494).

"The linchpin of the discovery rule is the unfairness of barring claims of unknowing parties." Caravaggio v. D'Agostini, 166 N.J. 237, 245 (2001) (quoting Mancuso v. Neckles, 163 N.J. 26, 29 (2000). Thus, "[i]n applying the discovery rule, a court must determine when the plaintiff became aware of the underlying factual basis for the legal-malpractice action." Olds v. Donnelly, 150 N.J. 424, 437 (1997). "

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Will Hedge Funds and Mortgage Failures be the New Wave of Legal Malpractice?

In a different but related case, Anthony Lin of the NYLJ goes on to tell about "top private equity firm Thomas H. Lee has sued Mayer, Brown, Rowe & Maw for $245 million for allegedly misrepresenting the financial shape of commodities brokerage Refco prior to Lee's acquisition of a controlling interest. Seward & Kissel is also a defendant in a $200 million lawsuit brought by institutional investors who lost money when one of the law firm's hedge fund clients went under.

There are a number of reasons investment fund clients may be more willing to bite the hand that lawyers them when things go wrong. For one thing, there is almost always a lot of money on the line, and given the nature of their business, investment fund principals experience losses in a more visceral way than, say, corporate executives.

"It's up close and personal," said Leslie D. Corwin, a partner at Greenberg Traurig specializing in business disputes involving law firms. When fund principals' expectations of making massive amounts of money are thwarted, he said, they cast around for people to blame.

Law firms are more in the line of fire because they play a much bigger role at investment funds than they do for corporate clients. Even though funds may control companies with large in-house legal departments, they sometimes lack even a general counsel themselves. They therefore develop unusually close relationships with outside lawyers, and feelings can be unusually hard when things do not go well.

"Hedge funds are oftentimes run as if they are small businesses, so every decision matters a lot more to the proprietor," said Barry Barbash, head of the funds practice at Willkie Farr & Gallagher. "The client relationships are more intense and can become more confrontational."

But, from another perspective, Scott Greenfield sees this downturn in mortgages as a new vista for white collar [and potentially, white shoe] criminal defense attorneys.

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Akin Gump, Hedge Funds and a $ 4 Billion Dollar Case

For a while, a million dollar or a multi-million dollar case was a big number.  Imagine, not just several hundred thousands!  Now, Anthony Lin of the New York Law Journal reports that Akin Gump has been sued by a hedge fund client for $ 4 Billion.  Will we be seeing larger than life numbers like this in failed real estate and mortgage  transactions, failed hedge funds, failed REIT transactions in this new economic downturn? 

"Like most hedge fund managers, James McBride and Kevin Larson expected to make a tidy sum. By the fall of 2003, they seemed well on their way. The series of Veras funds they had launched less than two years before had already attracted around $1 billion in investments.

But then regulators, including then-New York state Attorney General Eliot Spitzer and the Securities and Exchange Commission, came after the Veras funds for "late trading," the illegal purchasing of mutual fund shares after the 4 p.m. market close. Veras wound up paying more than $36 million in penalties before shutting down. McBride and Larson each paid $750,000 and were barred from the industry.

But the ex-fund managers are still out for big money, this time from the law firm they claim advised them that late trading was legal. In February, the former hedge fund managers filed suit against Akin Gump Strauss Hauer & Feld in Manhattan Supreme Court.

Their damages claim? A whopping $4.4 billion, not including punitive damages.

Akin Gump has denounced the suit.

"The allegations of wrongdoing in Veras' Complaint are without merit. At all times, Akin Gump acted ethically and in its client's best interests," said firm spokeswoman Kristen White. "Akin Gump is forcefully defending this case, and we are confident we will prevail."

The suit illustrates the risks law firms face as they try to reap the rewards of representing private investment funds, including hedge funds and private equity funds. Such funds generate high legal bills for firms, but they are apt to strike back hard when they feel lawyers have led them astray."

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Tries to Kill his Wife, Now Sues Defense Lawyer

Its often said that jailed defendants have a little too much time on their hands.  Here is a prime example.  This defendant was convicted of trying to kill his wife.  He seems to have used poor workmen.  One would be killer was arrested for tresspass; one had a battle with the wife, but agreed to leave after a little discussion.  Both testified against the defendant. 

"Donald Millard - convicted last year of hiring two assassins to attempt killing his ex-wife - is suing his attorneys for losing at trial. Millard's suit does more than allege that Salt Lake City attorneys Walter Bugden and Tara Isaacson did a poor job of defending him. Millard - who is serving five years to life at the Utah State Prison - claims breach of contract, contending Bugden and Isaacson had all but promised him an acquittal.

They allegedly told Millard his case "would be an easy one to win," according to the lawsuit, filed last week in West Jordan's 3rd District Court.
Millard's current attorney, David Drake, said Monday, "I'm appalled at what I've seen in this case."
Drake said the court records and trial transcripts show that Bugden and Isaacson failed to investigate several legal avenues, failed to obtain records rebutting the stated motive for the crime and failed to impeach witnesses.
Millard wants to be repaid the $137,000 in fees he paid to Bugden and Isaacson, as well as $100,00 in punitive damages. "

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When Judges Bicker and Fight, Who Gets Hurt?

All right, its not strictly legal malpractice, but this story about Family Court Judges bickering and fighting, slamming files and being childish should remind us that these cases involved  parents and kids.  Family Court:  they must have involved custody and support.  Who was the victim here?

"One instance involved a sharply disputed tussle with Judge Monica Drinane (See Profile) over which of the two judges could require an attorney to be in their courtroom. Judge Shelton also quoted from an e-mail that Judge Drinane had sent her apologizing for the incident.

According to the commission's complaint, when Judge Drinane entered Judge Shelton's courtroom to discuss the issue, Judge Shelton told her to "step out of my courtroom, please," and directed a court officer "to shut the door on Judge Drinane."

When Judge Drinane again asked to speak to Judge Shelton, the complaint stated, Judge Shelton responded, "Monica, you are literally over the top."

In her answer, Judge Shelton described Judge Drinane as approaching her "confrontationally, in robes with arms crossed over her chest."

Judge Drinane's comment, "I want to speak to you," the answer further asserted, was a "polite rendition" of what was actually said because "the court reporter has frankly admitted to Judge Shelton that he was hesitant even to record the embarrassing scene created by Judge Drinane."

What should not be forgotten either:  once these problems developed and the cases were troubled, was an attorney blamed? 


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Mistake Imputed to Client, Legal Malpractice is the only Remedy

Here is an interesting blog blurb  from the North Carolina Appellate Blog on how an innocent client was seriously hurt by the acts of its attorney.

"Today the Court of Appeals (COA) issued a harsh reminder that a client is, under the law of agency, responsible with the bad conduct of its counsel in almost all instances. The case is Purcell Int'l Textile Group, Inc. v. Algemene AFW N.V., et al.

Here's what happened. Plaintiff sued a number of businesses alleging contract, tort, and Chapter 75 claims after Defendants terminated certain commercial agreements. Attorney W. Rickert Hinnant were retained by Defendants to represent them in the litigation.

Hinnant began settlement negotiations, reached a settlement, and announced the settlement in open court on the trial date. Hinnant then prepared a settlement agreement, committing Defendants to pay $850,000 in three installments over a 6-month period. Hinnant sent Plaintiff settlement agreement signed by Defendants. Or so it seemed.

The trouble is, Hinnant never sent them the written settlement agreement or even told his clients about the settlement. Instead, he forged their names to the agreement after negotiating it without their consent or knowledge. He never had authority to settle for the amount he did.

Unsurprisingly, Defendants defaulted on the payment under the settlement agreement, since they didn't know about it. This prompted Plaintiff to file a motion to enforce the agreement, which resulted a judgment for $850,000 plus attorneys fees of 15% (as provided in the settlement agreement) as well as an order attaching assets of Defendants.

The first time Defendants learned of the settlement agreement was when they learned the court had entered that judgment against them. They moved under Rule 60(b) for relief from the judgment, urging that Hinnant committed fraud on the court and exceeded his authority. The trial court rejected the motion, and the COA affirmed

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Estates, Executors and Legal Malpractice

Another report of the question of privity and legal malpractice, here in an executor-estate setting.

"In January 1994 the decedent Miguel Perez (hereinafter the decedent) commenced a medical malpractice action (hereinafter the underlying action) against Lutheran Medical Center (hereinafter Lutheran) alleging a failure to timely diagnose and treat his colorectal cancer condition. The decedent was represented by the defendant, Richard J. Katz. Thereafter, on September 16, 1994, the decedent executed his Last Will and Testament (hereinafter the Will), naming the plaintiff, his brother, as executor. The Will was retained in the defendant's possession. On February 5, 1995, the decedent passed away from an unrelated cause.

The defendant alleged that soon after the decedent's passing, he informed the plaintiff of the necessity of probating the Will in order to pursue the underlying action. However, the plaintiff [*2]did not retain the defendant or any other attorney for this purpose at that time. On May 14, 1997, more than two years after the decedent's passing, the plaintiff went to the defendant's office, obtained the Will, and signed an affidavit stating that he was taking the Will "for the purposes of having it probated by the Surrogate of Kings County." Nevertheless, another four years passed before the plaintiff took any steps to probate the Will. In fact, the plaintiff did not obtain provisional letters testamentary until December 28, 2001.

In August 2002 the Supreme Court granted a motion by Lutheran made pursuant to CPLR 1021 to dismiss the underlying action for failure to timely substitute a legal representative following the death of the decedent. Shortly before the motion was granted, the plaintiff commenced this legal malpractice action against the defendant alleging that he failed to timely move to substitute a legal representative in the underlying action. The defendant moved for summary judgment dismissing the complaint. In the order appealed from, the Supreme Court, inter alia, denied the motion finding that there were triable issues of fact. We reverse the order insofar as appealed from.

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Lil Kim and her Attorney's Negligence

In this 'il Kim Case the AD reversed and reinstated a judgment against her, based upon her attorney's negligence. 

 "To vacate her default, the defendant Kimberly Jones, a/k/a "Lil Kim," was required to demonstrate a reasonable excuse for not opposing the plaintiff's motion and a meritorious defense to the motion (see CPLR 5015[a][1]; Piton v Cribb, 38 AD3d 741, 742; Yurteri v Artukmac, 28 AD3d 545, 546). Jones failed to present a reasonable excuse. Where, as here, there is a pattern of default and neglect, the attorney's negligence can properly be imputed to the client (see Dave Sandel, Inc. v Specialized Indus. Servs. Corp., 35 AD3d 790, 791; Edwards v Feliz, 28 AD3d 512, 513; MRI Enters. v Amanat, 263 AD2d 530, 531). Accordingly, the Supreme Court should have denied Jones' [*2]motion to vacate. "

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This is Much Worse then Legal Malpractice

Being Sued - terrible

Losing the suit - worse

Jailed?    This story tells of the worst possibility.  "Three lawyers accused of bilking their clients in a diet drug settlement were jailed Friday after a federal judge agreed to delay their trial date but revoked their bond.

The attorneys, including two co-owners of Preakness winner Curlin, were remanded to custody during a hearing in U.S. District Court in Covington, according to an order filed in the court clerk's office.

Judge William Bertelsman agreed to the lawyers' request to push the trial date back to Jan. 7, 2008. It had been set for Oct. 15.

Shirley Cunningham Jr. and William Gallion, who own 20 percent of Curlin, were jailed, along with another lawyer, Melbourne Mills Jr. "


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San Diego Sues Wilkie Farr in Legal Malpractice

This story out of San Diego has sued Wilkie Farr over its work with Kroll, investigating the finances of the City. 

"City Attorney Michael Aguirre picked a new legal fight for San Diego this week, filing two malpractice suits against a New York law firm that probed the city's financial failures and prepared a report on them a year ago.
The lawsuits, which target a high-powered law firm that has handled billion-dollar deals for business clients, were filed without City Council approval. As a result, they will test not only Aguirre's legal strategies, but also new council limits on his ability to file lawsuits without authorization.

Aguirre alleges that Willkie Farr & Gallagher overbilled the city and essentially failed to follow terms of a contract to assist the risk-management firm Kroll Inc. with a project that became an 18-month, $20 million effort.
The suit alleges that the law firm duplicated much of Kroll's work, submitted inadequate bills to disguise that, and went beyond the scope of its agreement, in part by billing the city for “lobbying” meetings with The San Diego Union-Tribune editorial board and the San Diego Regional Chamber of Commerce. "

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Excess Fees Must be Returned

We reported on this case, based on the hews article.  Here is Siagha v. David Katz & Associates LLP, 603927/05 :

"This is a contract action to recover alleged damages concerning legal fees and expenses allegedly not included in the retainer agreement of plaintiff Omar Siagha ("plaintiff").

Plaintiff moves for an order (1) awarding partial summary judgment pursuant to CPLR 3212 on his claim for disgorgement of all fees as against defendant David Katz ("Katz") and Katz & Associates ("K&A"), (2) disgorging defendants of such fees in excess of one-third of the final amount collected from the underlying defendant and/or its carrier as a result of the judgment obtained in Siagha v. Salant-Jerome, Inc., or (3) awarding partial summary judgment against Keith LePack ("LePack") in the amount of not less than $100,000.

Defendants Katz, K&A and LePack (collectively "defendants") oppose the motion, and cross move for an order dismissing the action pursuant to CPLR 3211(a)(5) and (7), or in the alternative, awarding summary judgment pursuant to CPLR 3212 in favor of Katz, K&A and LePack., and imposing sanctions and costs against plaintiff pursuant to 22 NYCRR 130-1.1, et seq., for plaintiff's frivolous action in keeping LePack named as a defendant.

On or about August 1998, after the damages verdict, Saint Jerome's insurance companies denied coverage and refused to satisfy the judgment. Katz & Rosenblatt commenced a declaratory judgment action. This action was dismissed, Katz & Rosenblatt appealed and the Appellate Division First Department reversed and granted plaintiff summary judgment. The insurance companies sought leave to appeal to the Court of Appeals, and that motion was denied.

Plaintiff's judgment was for $1,680,093.08 and K&A received a total fee of $870,057.60. This was purportedly equal to one-third of the recovery less purported expenses and minus legal fees for the appeal of the summary judgment, the appeal on the merits and the declaratory judgment action. The legal fees charged to plaintiff for the appellate and collateral matters was $182,100.00. Plaintiff recovered approximately 52 percent of the gross settlement.

A client retaining an attorney on a contingent basis, in the absence of clear and express language to the contrary, contemplates that the percentage fixed is to constitute payment for whatever services may be necessary to obtain collection of any judgment which may be recovered, whether the services be in connection with an appeal taken from the judgment or in connection with efforts to collect the judgment, or both (Ellis v. Mitchell, 193 Misc. 956, 85 N.Y.S.2d 398 [Sup. Ct. New York County 1948] citing Larkin v. Frazier, 224 N.Y. 421, 121 N.E. 105). New York law is generally hostile to midstream efforts to increase contingency fee percentages (see, e.g., 22 NYCRR 603.7[e][4] [limiting opportunities for attorneys to increase contingent fee percentages in certain types of actions]; Belzer v. Bollea, 150 Misc2d 925, 928-29 [NY Sup Ct 1990] [rejecting contingent fee increases that did not comport with 22 NYCRR 603.7(e)(4) regardless of "whether the client in fact agreed or disagreed to additional fees"]). Thus, based on a plain reading of the retainer agreement, there was no agreement for plaintiff to compensate any attorneys, including Katz and K&A separate fees related to services performed on appeal or other collateral matters beyond the 33 1/3 amount as specified in the retainer agreement."

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Paul, Weiss Legal Malpractice Lawsuit Decision

Trautenberg v. Paul, Weiss, Rifkind, Wharton & Garrison LLP, 06 Civ. 14211 reported today:

"Plaintiff David H. Trautenberg sued defendants the law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP, attorney Brad S. Karp, and attorney Daniel J. Toal (collectively "Paul Weiss"), for breach of fiduciary duty and violation of New York Judiciary Law §487. Paul Weiss moved to dismiss, pursuant to Fed. R. Civ. P. 12(b)(6), for failure to state a claim. The motion to dismiss is granted.

"Plaintiff and plaintiff's attorneys, however, were aware of Paul Weiss's dual role and its potential for conflict. On many occasions during the negotiations, plaintiff's attorneys told Paul Weiss that its representation of Citigroup against plaintiff was improper. On one such occasion, Karp responded by telling plaintiff's attorneys to "stop lecturing" him. Compl. ¶49. In addition, during the legal preparation for the WorldCom bankruptcy litigation, plaintiff "continually objected to Defendants' representation of Citigroup/SSB in connection with his employment matter and Defendants' conduct in 'holding him hostage' with respect to his employment matter until the completion of his WorldCom civil suit testimony." Id. at ¶61. Despite these objections, Paul Weiss did not withdraw as counsel for Citigroup in the negotiations, nor did plaintiff or his attorneys take any action to force Paul Weiss to withdraw from the negotiations or discontinue their dual representation in the other proceedings. "


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And Now the Third Round as Lakins Sues its Insurer

The Madison St. Claire Record reports

"The Lakin Law Firm filed suit against Certain Underwriters at Lloyd's London, Lloyd's Illinois, Affinity Insurance and Norton & Rain alleging the defendants failed to defend the firm in a federal lawsuit.

Represented by Charles Chapman of the Lakin firm, the suit states the Lakin firm hired Norton & Rain Inc. (NRI), an insurance broker, to procure coverages including professional liability insurance for the firm.

"NRI recommended that Plaintiff purchase professional liability insurance coverage from Lloyd's," states the complaint filed Aug. 3 in Madison County Circuit Court.

Chapman states that the Lakin firm followed the advice of NRI and purchased the insurance from Lloyd's in 2006 and paid the premium of $427,025 for the policy's coverage.

According to Chapman, the Lloyd's policy required the Lakin firm to notify Affinity of any claim made against the firm, which they did after injured railroad worker Stephen Williams filed suit against the firm in the U.S. District Court for the Northern District of Oklahoma on Oct. 7, 2006.

U.S. District Judge Claire V. Eagan, chief judge of the Northern District of Oklahoma, on April 18 entered a default judgment of $3,752,601.80 against Thomas Lakin and the Lakin firm in Williams' legal malpractice claim. "

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Indiana Court and Legal Malpractice Decision

Reported today in the Indiana Law Blog:  Querrey & Harrow v. Transcontinental Ins. Co. (2/19/07), where the COA ruled: "Defendants-Appellees raise numerous issues, which we consolidate as: I. Whether the trial court erred in holding that Indiana allows an excess insurer to bring an action for legal malpractice against an insured’s attorneys. II. Whether the trial court erred in holding there was a genuine issue of material fact as to whether an attorney-client relationship existed between the insured’s attorneys and CNA. III. Whether CNA’s legal malpractice action was timely filed. * * * We remand with instructions that the trial court enter summary judgment for Querry and Sanders." Posted In Blog Articles
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Couple Wins Punitive Damages, Now Sues Defendant's Attorney

This couple won a free speech and damages case in St. Louis.  Now, on behalf of the municipal losers, they are suing the attorney for losing the punitive damages claim.

"A couple who won a nearly $1.4 million federal free speech lawsuit against the city and its former mayor, now are suing the city and its law firm in state court.

Brian Hodak is suing the Hazelwood and Weber law firm on behalf of St. Peters taxpayers alleging negligence and legal malpractice. The suit asks the law firm to pay for the $1 million punitive damages from the federal free speech lawsuit, plus interest and attorney's fees.

His wife Karla's company, H/N Planning and Control Inc., has filed a separate suit seeking $1 million from the city and punitive damages"

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Shot, Medical Malpractice and then Legal Malpractice

How bad can it get?  This story from the Madison St. Claire newspaper, tells the story of a young hunter who is shot in the foot, and taken to a hospital.  There he is discharged, no one treats an infection, he gets gangrene, has toe amputated, hires attorney to sue doctor, and finds out that attorney did nothing.

This is a string of bad luck.  Will his legal malpractice lawyer now drop the ball?  Keep tuned. 


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Lack of Retainer Dooms Fees Beyond Contingency

Anthony Lin in the NYLJ reports that a law firm which was successful in a $1.2 million dollar assault case may only take its 1/3 contingency fee.  It had charged another $ 450,000 for appellate and collateral work without an additional retainer, and without even a letter to the client.

"Lawyers whose original retainer agreement stated only that they would receive a one-third contingent fee must disgorge additional fees collected for an appeal and collateral litigation, a Manhattan judge has ruled.

Omar Siagha was assaulted in 1993 by a bartender at an Upper East Side restaurant called Ruby's River Road Cafe. To pursue a claim against the restaurant, Mr. Siagha contacted lawyer Michael J. Rosenblatt, then an associate at the firm of Schwartz, Gutstein & Associates.

Mr. Rosenblatt soon thereafter left the firm to start his own practice and then to co-found Katz & Rosenblatt with attorney David Katz. The suit against the restaurant was filed by Katz & Rosenblatt, which later became Katz & Associates after Mr. Rosenblatt's resignation. A jury returned a verdict of $1.2 million, which was affirmed on appeal. "

Following further litigation with the insurance companies, Mr. Siagha received a judgment of $1.7 million, from which Katz & Associates took a fee of around $870,000, including one-third of the award and legal costs relating to the appeal and collateral litigation.

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Paul Weiss Rifkind, Wharton & Garrison Legal Malpractice Case Dismissed

The NYLJ reports today that

"A federal judge in Manhattan has thrown out a lawsuit filed against Paul, Weiss, Rifkind, Wharton & Garrison by the onetime private banker to former WorldCom Inc. chief executive officer Bernard Ebbers.

David H. Trautenberg, the former co-head of Citigroup's private wealth management group, sued Paul Weiss in December for breach of fiduciary duty, claiming the law firm used against him in severance negotiations confidences it gained while jointly representing him and Citigroup in WorldCom-related matters.

The ex-banker received a $5 million severance package that he claimed would have been $25 million without Paul Weiss' interference.

But Southern District Judge George Daniels said Mr. Trautenberg had failed to show that "but for" Paul Weiss' actions, he would have received more money.

The judge noted that Mr. Trautenberg had not alleged in his complaint that Citigroup had ever offered or considered offering a $25 million severance package. The banker's belief that he was owed that amount based on the book of business he left at Citigroup was "purely speculative," Judge Daniels said. "


We will note the decision later this week.

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Missouri Estate and Beneficiary Legal Malpractice Case Fails

In another Estate and Beneficiary case, plaintiff loses in this Missouri case/  The Show Me Blog reports:

"Missouri court of Appeals Southern District dismisses deceased heirs' combined suit against deceased's second wife and the law firm that prepared their joint wills after widow disinherited the deceased's children after he died."

Jeana Jackson, et al., v. Williams, Robinson, White & Rigler, P.C., John Williams, and Ellen Moore,  28041

"The possibility that Plaintiffs will be deprived of their inheritance because of the alleged negligence of Williams is, as of now, purely speculative and uncertain. Because it was not certain they would ever have an estate or any vested right to protect, nor that they would survive the life tenant). For the foregoing reasons, Plaintiffs have failed to state a claim for legal malpractice."

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Farmers, The US and Legal Malpractice

Law is the underlying organizer of all things human.  No part of society is truely lawless, and everything that has to do with the government is law based.  No surprise, but here is a blurb from farm and farmer rights activists, touching on legal malpractice.

"Some USDA employees, including a top official in the department, are organizing a lobbying campaign to eliminate a provision in the farm bill passed July 27 by the House of Representatives that would reopen a landmark civil rights case against the department for discrimination in providing farm loans to black farmers.

Deadline barred 64,000 claims, despite lack of notice.The settlement-funded arbitrator rejected 64,000 farmers who came forward with claims during the late claims process established by the court. The farmers' attorneys, whose representation was characterized by the court as "bordering on legal malpractice," were responsible for properly notifying the farmers of the original deadline for application.

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In NJ a Client's Illegtimate Purpose is Not Attorney's Problem

In this NJ Case, the client had an illetimate purpose in bringing the law suit.  Plaintiffs proved the case for malicious prosecution against the client, but not against  the client's attorney.

Giordano, Halleran & Ciesla represented a beach club owner in a failed defamation suit against a neighbor. The neighbor, having won, countersued the club owner and the Middletown, N.J., firm, alleging the first suit had no purpose but to stifle her free speech rights maliciously.

The appeals court found, however, that lawyers cannot be liable for malicious prosecution unless they are acting for an illegitimate purpose of their own. And the fact that a client has an illegitimate purpose does not automatically mean the lawyer does too, the three-judge panel said in Lobiondo v. Schwartz, A-4325-04.

The decision "insures that representation will be available when the client's claim has only marginal merit and may be pursued by the client for other than legitimate purposes," the court said."


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Attorneys must Repay $62 Million in Legal Malpractice Case

Imagine having made enough on a case to have to repay $ 62 Million!   FromLaw Com:

"Three attorneys accused of bilking their clients in a diet drug settlement must repay at least $62.1 million in settlement funds and interest, a Kentucky judge ruled Friday.

Special Judge William Wehr ordered William J. Gallion, 56, Shirley A. Cunningham Jr., 52, and Melbourne Mills Jr., 76, to repay $42 million taken from the settlement and $20.1 million in interest. Wehr said the interest was 8 percent over the six years the attorneys had the funds.

The attorneys are being sued by about 400 former clients who claim the lawyers took too much money as part of a $200 million fen-phen settlement.

Gallion and Cunningham own a 20 percent stake in Curlin, who won the second leg of the Triple Crown in May.

A federal grand jury indicted the attorneys last month, charging them with conspiring to commit wire fraud in representing more than 400 people in a lawsuit over the diet drug. The lawyers, who were temporarily suspended from practicing law by the Kentucky Bar Association, have pleaded not guilty. Federal prosecutors want the lawyers to forfeit any assets they have to pay restitution to their former clients. "

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Privity is Always Important in Legal Malpractice

Estate and surrogate proceedings create a unique problem in legal malpracitce.  May the estate sue the transactional [will] lawyer?  Does a beneficiary have a relationship with the attorney.  Here, in this case we see another face of the problem.  In Velasquez v Katz ,2007 NY Slip Op 06275 , Decided on July 31, 2007 ,Appellate Division, Second Department  the question is raised by the executor against the attorney handling a personal injury case for the deceased.

"In January 1994 the decedent Miguel Perez (hereinafter the decedent) commenced a medical malpractice action (hereinafter the underlying action) against Lutheran Medical Center (hereinafter Lutheran) alleging a failure to timely diagnose and treat his colorectal cancer condition. The decedent was represented by the defendant, Richard J. Katz. Thereafter, on September 16, 1994, the decedent executed his Last Will and Testament (hereinafter the Will), naming the plaintiff, his brother, as executor. The Will was retained in the defendant's possession. On February 5, 1995, the decedent passed away from an unrelated cause.

The defendant alleged that soon after the decedent's passing, he informed the plaintiff of the necessity of probating the Will in order to pursue the underlying action. However, the plaintiff [*2]did not retain the defendant or any other attorney for this purpose at that time. On May 14, 1997, more than two years after the decedent's passing, the plaintiff went to the defendant's office, obtained the Will, and signed an affidavit stating that he was taking the Will "for the purposes of having it probated by the Surrogate of Kings County." Nevertheless, another four years passed before the plaintiff took any steps to probate the Will. In fact, the plaintiff did not obtain provisional letters testamentary until December 28, 2001.

In August 2002 the Supreme Court granted a motion by Lutheran made pursuant to CPLR 1021 to dismiss the underlying action for failure to timely substitute a legal representative following the death of the decedent. Shortly before the motion was granted, the plaintiff commenced this legal malpractice action against the defendant alleging that he failed to timely move to substitute a legal representative in the underlying action. The defendant moved for summary judgment dismissing the complaint. In the order appealed from, the Supreme Court, inter alia, denied the motion finding that there were triable issues of fact. We reverse the order insofar as appealed from.

The plaintiff's unilateral allegations that he was led to believe that the defendant continued to represent the decedent's interests are insufficient to establish the existence of any continuing attorney-client relationship and thus inadequate to raise a triable issue of fact in opposition to the defendant's motion for summary judgment (see Carlos v Lovett & Gould, 29 AD3d 847; Chinello v Nixon, Hargrave, Devans & Doyle, LLP, 15 AD3d 894; see also Moran v Hurst, 32 AD3d 909). Even assuming that the plaintiff was given the impression that the defendant continued to represent the decedent after his death, such a belief was unrealistic after May 1997, when the plaintiff retrieved the Will for the express purpose of having it probated (see e.g. Leffler v Mills, 285 AD2d 774) "


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Question of Judgment in Michigan Legal Malpractice Case

"In New York an attorney may not be held liable for errors in judgment"  So goes the black-letter law.  Here is an illustration of two principals from this Michigan case.  The first is that legal malpractice claims regarding an appeal are not jury questions.  The second is that errors of judgment are not a solid foundation for a legal malpractice case reported in the Michigan Legal Malpractice Blog.

"Plaintiff appealed the grant of summary disposition in favor of defendant Peters on plaintiff's malpractice claims. Those claims arose from a matter involving a property dispute between Plaintiff and Cvetko Zdravovski pertaining to an alleged encroachment of Plaintiff's building onto a property owned by Zdravovski (the "underlying litigation"). Peters filed a motion for summary disposition on plaintiff's behalf in the underlying litigation, which was granted. On appeal, the trial court's ruling was reversed.
Plaintiff appealed the grant of summary disposition in favor of defendant Peters on plaintiff's malpractice claims. Those claims arose from a matter involving a property dispute between Plaintiff and Cvetko Zdravovski pertaining to an alleged encroachment of Plaintiff's building onto a property owned by Zdravovski (the "underlying litigation"). Peters filed a motion for summary disposition on plaintiff's behalf in the underlying litigation, which was granted. On appeal, the trial court's ruling was reversed.
Moreover, an appellate attorney's decision pertaining to which issues to raise is a matter of judgment and generally does not comprise grounds for claiming malpractice if the attorney acts in good faith and exercises reasonable care. Simko v Blake, 448 Mich 648, 658; 532 NW2d 842 (1995). An appellate attorney is not required to raise every claim of arguable legal merit in order to be an effective counsel. People v Reed, 449 Mich 375, 382; 535 NW2d 496 (1995). "

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Where Can the Lawyer be sued in Legal Malpractice?

Austin Texas Blogspot reports this multi-state, multi-court personal injury - bakruptcy - legal malpractice case arising from an auto accident.  Texas, California, personal jurisdiction, the place of the wrong.  All are mixed in this swirl.  Eric Red v. John Doherty and Doherty & Catlow, A Law Corporation,
No. 03-06-00478-CV (Tex.App.- Austin, Jul. 20, 2007)(Opinion by Justice Waldrop

"In May 2000 in Los Angeles, California, Red drove his vehicle into a crowded bar, killing two individuals. Family members of those two individuals filed wrongful death claims against Red in California state court, and John Doherty of the California law firm Doherty & Catlow was hired to defend Red against those claims under a $30,000 automobile insurance policy issued by Mercury Insurance Group.
After the wrongful death claims were filed against Red, he briefly moved to Austin, Texas, where he filed for bankruptcy protection. He sought and received a stay of the California state court wrongful death lawsuit. Red retained Austin attorney Steven Hake to represent him in the bankruptcy. Red sought to discharge all of his debts, including any contingent liability to the wrongful death claimants, but the wrongful death claimants filed an adversary proceeding in the bankruptcy objecting to the discharge of their claims. On the advice of Hake, Red hired another Texas attorney, Stephen Sather, to represent him in the adversary proceeding in the bankruptcy. After a trial, the bankruptcy court determined that the wrongful death claims qualified as exceptions to discharge under 11 U.S.C. § 523(a)(6) because the collision was the result of Red's willful and malicious conduct. The district court affirmed the bankruptcy court's decision on similar grounds, and the Fifth Circuit Court of Appeals affirmed that decision. See In re Red, 96 F. App'x. 229, 230 (5th Cir. 2004).

After the Texas bankruptcy court rendered its decision, the California state court in which the wrongful death claims were pending ruled that the Texas court's decision was res judicata as to Red's liability for the wrongful death claims. The court directed a verdict in favor of the claimants on the issue of liability, and the issue of damages was tried to a jury, which returned a verdict awarding slightly over $1,000,000 to the plaintiffs. That judgment was affirmed on appeal. See Roos v. Red, 130 Cal. App. 4th 870, 874 (Cal. Ct. App. 2005), cert. denied, 546 U.S. 1174 (2006).

In May 2006, Red sued Sather in Texas state court for legal malpractice in connection with the adversary proceeding in the Texas bankruptcy. He later amended his petition to add as defendants John Doherty, the law firm Doherty & Catlow, Mercury Insurance Group, and an employee of Mercury Insurance Group. Against these defendants, Red asserted claims for breach of contract, civil conspiracy, fraud, breach of fiduciary duty and the duty of good faith and fair dealing, negligent misrepresentation, legal malpractice, and DTPA violations.
Appellees John Doherty and Doherty & Catlow filed a special appearance arguing that the Texas court did not have personal jurisdiction over them. After an evidentiary hearing, the trial court granted appellees' special appearance and dismissed Red's claims against them. The court issued findings of fact and conclusions of law. This appeal followed

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Legal Malpractice in Unexpected Places

In a recent successful case, plaintiff was a large real estate management company. Plaintiff was involved in a 500 million dollar financing involving 3 NYC downtown buildings. The general counsel asked one of the multiple large firms whether "mortgage spreading" could be used to avoid payment of new mortgage tax. When told "no", the financing continued to closing. At closing it was determined that $1.7 million in mortgage tax could have been legally avoided, contrary to the advice. Prior to jury selection this case settled for $ 900,000.
Attorney malpractice arises in matrimonial settings too. In another recent successful case, Plaintiff -wife had a history of suicide attempts, which were one of the bases of husband's claim of cruel and inhuman treatment. Plaintiff had a history of psychiatric hospitalizations. Days after her release, her attorney and she attended a court hearing on custody, which turned into a settlement of the entire divorce. At the time, she was still on psychotropic medication, and only days out of the in-patient hospitalization. This attorney malpractice matter was settled for $350,000.

Attorney malpractice case arise in unexpected circumstances and may be more vital and valuable than expected. Analysis of the four elements of attorney malpractice is required to determine whether a case exists, and may successfully be prosecuted. As always, the elements are: professional relationship, deviation, proximate cause [including the "but for" element,] and damages.
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Wyoming Legal Malpractice Fee Deduction

Should the client's legal malprctice award be for the entire sum or should there be a deduction for the contingent fee the negligent attorney would have won?  The debate runs like this;  [For the full amount]  The client will have to hire a malpractice attorney to sue the negligent attorney, and will have to pay a fee, so why should the client have to pay twice.  When the contingent fee the negligent attorney would have won is deducted, the client never gets what he/she would have won had no mistakes been made.

[Against the full amount]  If the client was to et 2/3 of the award in the first place, and the attorney now said to be negligent 1/3, why should the client get a windfall when the first attorney is negligent?

Wyoming, in Horn & Horn v. Wooster & Duddy holds to the later argument.  "The Court stated they have clear authority regarding a prevailing party’s right to collect attorney’s fees from his opponent. In Wyoming the American rule is applied. The Court saw no reason for creating an exception to the American rule when legal malpractice was involved.
Some courts have ruled that a negligence attorney is not entitled to a deduction of his contingent fee from a malpractice award against him but, utilizing a quantum meruit theory, may be entitled to a deduction for the value of his services which benefited the client. The Court stated that using the above approach to calculate damages would be difficult because the facts would present nearly unlimited opportunities for the client to second-guess the first attorney’s tactics and work product. "

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Mistakes and Legal Malpractice

    There is a hierarchy of attorney malpractice mistakes, recognizable by even a layperson. At the head of the list is the failure to start an action, whether a result of failure to file a notice of claim under the General Municipal Law, The Public Authorities Law, the Court of Claims act, or other claim-notice acts. That failure may be a result of failing to file the summons and complaint, or failing to purchase a new index number for the complaint. This group of "failing to file" the case is easily recognizable to the lay juror.
The next group consists of failures consists of serving the wrong defendants, failing to obtain jurisdiction over the person, failing to serve an adequate complaint or filing a complaint after the statute of limitations has run. These failures too, are easily recognizable.

The third group arises from calendar control problems and failures to appear on status conferences, clerk's calls, pre-trial or pre-calendar conferences, and appearances in TAP or the Jury Coordinating Part.

The fourth group arises from other calendar control problems, not created by a failure to appear in court. A case marked off calendar by a party, must be restored within 1 year. A default judgment must be taken within one year. An order must be settled within 60 days or abandoned. A motion to renew or reargue must be made within 20 days, a motion to dismiss for lack of personal jurisdiction must be made within a short time period. A 90-day notice requires a response. A notice of appeal must be filed within 30 days. An appeal must be perfected within the department's rules.
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Michigan Legal Malpractice Client who would not Quit

Clients come in all stripes.  Some are reasonable, some not.  This client hired the Ernst law firm,  but a fee dispute arose.  Ernst sued for fees and he counterclaimed for legal malpractice.  just before trial, his attorney quit.  Why?  We don't know.  But, an attorney who quits just before trial suggests problems with the case or personality.

Client and Ernst mutually released eachother.  However, client then turned around and sued Ernst for legal malpractice all over again.  Result?  Sanctions, dismissal, loss.


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Mayer Brown, Private Equity Trading and Legal Malpractice

The NYLJ's Anthony Lin reports:

"The private equity firm that owned a controlling interest in failed commodities brokerage Refco Inc. has filed a $245 million lawsuit against Mayer, Brown, Rowe & Maw, accusing the law firm of helping to conceal the sham transactions that led to Refco's collapse.

Boston-based buyout firm Thomas H. Lee Partners filed a 50-page complaint against Mayer Brown Thursday in federal court in Manhattan (07 Civ. 6767). In the suit, Lee said Mayer Brown handled 17 fraudulent transactions at the behest of Refco's executives between 2000 and 2005.

"These sham transactions . . . were designed to defraud potential purchasers (such as Plaintiffs), lenders, and potential lenders by concealing Refco's true financial condition," the complaint states.

One of the nation's best-known private equity firms, Lee acquired its controlling stake in Refco in August 2004. The deal appeared to be a major success when Refco's value soared in an August 2005 initial public offering. But the company's stock collapsed in October 2005 when the executives' activities came to light. The company filed for bankruptcy days later.

Lee is seeking at least $245 million on claims of securities fraud, common law fraud and negligent misrepresentation. Lee is also charging violation of the Racketeer Influenced and Corrupt Organization Act. A successful RICO claim would entitle Lee to treble damages.

Mayer Brown is being defended by John Villa of Washington, D.C.'s Williams & Connolly. In a statement Mr. Villa denied the allegations. "

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What is Legal Malpractice?

Malpractice is a professional's failure to use minimally adequate levels of care, skill or diligence in the performance of the professional's duties, causing harm to another. In New York, attorney malpractice is defined as a "deviation from good and accepted legal practice, where the client has been proximately damaged by that deviation, but for which, there would have been a different, better or more positive outcome."

Malpractice typically occurs when a professional fails to exercise his or her professional skills in an assignment at the necessary standard of care, skill and learning applied under the circumstances by the average prudent reputable member of the profession in the "community". The analysis is based upon the standard of care for the professional in the community" what other professionals in the same field do for their clients who are located in the same geographic area. In New York, courts will hold all attorneys to the same standard of professional performance.

The first necessary element is a professional relationship. In order to sue for professional malpractice, the plaintiff must have retained the attorney. There must of course be a relationship in privity, between the professional and the plaintiff such that the professional owes the plaintiff a duty. In attorney malpractice either a written retainer, proof that the attorney engaged in work or proof that the attorney appeared for the client is necessary. While in litigation often there is clear proof of representation; in transactional settings, representation may be less clear. Proof to a jury's satisfaction of actual representation must be demonstrated. This proof may come from the correspondence of the professional, from papers authored by the attorney or from litigation documents.

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Attorney wins Medical Malpractice Cases, Gets sued in Legal Malpractice

This shocking medical malpractice case was won by attorney Larry Eisenberg in California.  Reading to the bottom, even though this attorney cracked the med mal case, he is now being sued in legal malpractice by the first client in the liver series.

"The University of California has agreed to pay $7.5 million to settle 35 claims filed on behalf of patients who waited in vain for liver transplants at UCI Medical Center and who were unaware that the school's program lacked the staffing to perform the life-saving operations.

The university closed the program in November 2005 after The Times reported that 32 patients died awaiting operations, even as the hospital in Orange turned down scores of organs proffered on their behalf.

A subsequent investigation resulted in a rapid-fire series of resignations, reorganizations and vows to restore the credibility and oversight of the Irvine school's medical programs.

The agreement by the UC Board of Regents to settle the cases largely closes the book on another embarrassing chapter in the history of UCI's medical programs, which have been plagued by various lapses over the years: the theft of eggs and embryos from patients in a fertility clinic, the failure to properly keep track of bodies in its medical cadaver program and failings in other transplant programs such as kidney and bone marrow.

The fertility cases were settled for $20

Elodie Irvine, a former client of Eisenberg's, was not impressed with the settlement.

Irvine's case prompted the investigation of the transplant center, but she has since alleged that Eisenberg bullied her into accepting a $50,000 settlement. She won an appeals court ruling in April setting aside the original settlement so she can pursue a new case. She has also filed a legal malpractice case against Eisenberg.

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Attorney Did Not Investigate the "Advisor" and is Sued in Legal Malpractice

California attorney was approached by a new client.  Elder Law Answers  reports that the new client, an elderly woman came with an "advisor" for whom she wanted to get a power of attorney.  The advisor was helping the client by supplying vicodan and marijuhana.  When the advisor stole her money, she turned and sued the attorney in Legal Malpractice. 

"California appeals court has dismissed a legal malpractice suit against an attorney who allowed a client to appoint an untrustworthy individual as her agent under a power of attorney, allegedly without investigating the attorney-in-fact's background.

In 2004 Diane Mills, who had a long history of mental illness and drug abuse, met Robert Kahuanui. Mr. Kahuanui gained Ms. Mills's trust and began supplying her with the painkiller Vicodin and marijuana. Ms. Mills subsequently became convinced that her estranged husband was trying to have her committed. Mr. Kahuanui persuaded her that the way to avoid this was for Ms. Mills to appoint him as her attorney-in-fact under a power of attorney.

Accordingly, Mr. Kahuanui located an attorney, Charles A. Triay, and Mr. Kahuanui and his wife accompanied Ms. Mills to see Mr. Triay. Even though Ms. Mills appeared to be impaired, Mr. Triay prepared the power of attorney as well as a will and a health care directive for Ms. Mills. He failed to meet with Ms. Mills alone and he later delivered the prepared documents to Mr. Kahuanui, not Ms. Mills. Over the next several months, Mr. Kahuinui and his wife stole thousands of dollars from Ms. Mills and sold much of her property, although Mr. Kahuanui apparently never actually used the power of attorney to appropriate any of Ms. Mills’s property.

Ms. Mills sued Mr. Triay for legal malpractice, alleging that Mr. Triay was professionally negligent for allowing Ms. Mills to select as her attorney-in-fact an untrustworthy individual without adequate investigation of his background. The trial court dismissed the case against the attorney, finding that Ms. Mills had failed to connect Mr. Triay's conduct with Mr. Kahuanui's misdeeds. Ms. Mills appealed, and the California Court of Appeals agreed with the trial court. Neither court, however, considered whether Mr. Triay violated California's rules of professional responsibility for attorneys ."

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Going Too Far in a Deposition Can Get You Sued

We know that there are now specific rules about depositions in New York, and we are familiar with the "barking dog" deposition case here too.  New Jersey has its own story:

"Rough spots are common on the road of civil litigation, but it's not every day that a plaintiffs attorney sues his adversary for asking "inhumane" questions during a deposition that allegedly inflict "grievous emotional distress."

That's the thrust of a suit filed July 11 in Essex County, N.J., in which Bruce Nagel claims Judith Wahrenberger, his adversary in a medical malpractice case, acted tortiously by asking a husband whether he felt his wife had played a role in the death of their infant daughter by handling the child roughly.

"Wahrenberger's unsupported and intentional attack upon the parents was beyond any acceptable behavior of a civilized human being," alleges Nagel, of Nagel Rice in Roseland, N.J.

Wahrenberger, the attorney for an emergency room physician at St. Barnabas Medical Center in Livingston, N.J., says she had an obligation to pursue the line of questioning because an autopsy showed the baby had a subarachnoid brain hemorrhage, which can be a sign of shaken-baby syndrome.

"I would not be doing my job if I didn't explore these areas," says Wahrenberger, of Springfield, N.J.'s Wahrenberger, Pietro & Sherman. "We were talking about negligent homicide. As heartless as he says I was, the last thing I would be is cruel."

The underlying medical malpractice complaint was filed on Jan. 17, six months after the child died. The parents, Andrew and Phyllis Rabinowitz, alleged they tried to get their 6-day-old daughter admitted to St. Barnabas for breathing problems but were told by emergency room physician Lynn Reyman that the infant had only a common cold. The baby died two days later in her father's arms, blood running out of her nose, as he tried to administer mouth-to-mouth resuscitation. "

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Lawfirm Cleared of Trying to "Pick the Lock"

Lawfirm looked at party's web site and found documents which were supposed to be protected.

"Although the archived pages were supposed to be shielded from public view, the protections failed and lawyers at Harding Earley Follmer & Frailey in Valley Forge, Pa., did not hack their way in, Eastern District of Pennsylvania Judge Robert Kelly Jr. ruled last week on summary judgment.

"They did not 'pick the lock' and avoid or bypass the protective measure, because there was no lock to pick," Kelly wrote in Healthcare Advocates Inc. v. Harding Earley Follmer & Frailey, No. 05-3524. "Nor did the Harding firm steal passwords to get around a protective barrier. ... The Harding firm could not 'avoid' or 'bypass' a digital wall that was not there."

The ruling, if it stands, wards off a potential judgment of $3 million in damages a patients' advocacy company sought from the firm.

The company, Healthcare Advocates Inc. of Philadelphia, alleged that Harding Earley lawyers violated the Digital Millennium Copyright Act and the Computer Fraud and Abuse Act by fetching protected pages using the "Wayback Machine," a search tool provided by Internet Archive, a San Francisco-based Web page archivist.

Harding Earley represented a rival company, Health Advocate Inc. of Plymouth Meeting, Pa., which Healthcare Advocates accused of stealing trade secrets. Healthcare Advocates also sued Internet Archive for failing to properly protect Web pages that Healthcare Advocates no longer wanted to be available for public view.

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Did This Husband Stalk his Wife's Attorney?

This case from Long Island is tantalizing.  Attorney represents wife in a divorce proceeding, and is stalked by husband.  Attorney successfully obtains a $ 300,000 verdict for intentional infliction of emotional distress, on a counterclaim.  Verdict is reduced and reduced again, but...

Eves v Ray 2007 NY Slip Op 06098 Decided on July 17, 2007 Appellate Division, Second Department

"In particular, the record demonstrates that on several occasions, the plaintiff, in attempt to intimidate the defendant during his legal representation of the plaintiff's former wife in a custody proceeding, threatened the defendant both physically and financially, and stalked him. Moreover, the plaintiff continued to engage in this conduct despite the fact that the defendant had obtained a temporary order of protection and was pursuing a harassment charge against the plaintiff ."

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Lawyer Advertising

This has to be today's big story. This will be all over the web, and will be reported in much greater detail.  But  the NYLJ reports:

"A federal judge has ruled unconstitutional most of the sweeping new restrictions on attorney advertising introduced earlier this year by the New York courts.

The restrictions, which went into effect Feb. 1, had barred lawyers from, among other practices, using nicknames that suggest an ability to obtain results or touting "characteristics clearly unrelated to legal competence."

Alexander & Catalano, the Syracuse personal injury firm that challenged the constitutionality of the advertising restrictions, had previously run ads calling its lawyers "heavy hitters" and showing them towering over downtown office buildings or sprinting at impossible speeds to help clients."

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And Legal Malpractice is Thrown in Too

Here is a story from Texas.  Prominent engineer's downfall:  negligence or conspiracy ?

"The former director of a city sewer program is suing several engineering firms and three Austin lobbyists, alleging that they conspired to get him fired.

Bill Moriarty previously led the Austin Clean Water Program, the city's $200 million effort to fix old sewer lines by 2009 to avoid federal fines. He was fired in 2005 after a city investigation concluded that he should have disclosed that a woman he lives with and is dating, Diane Hyatt, got work through the program.

Moriarty and Hyatt are suing six engineering firms and lobbyists David Armbrust, Cis Myers and former Austin Mayor Bruce Todd, who represent some of the firms.

The firms were seeking retaliation, the lawsuit says, because Moriarty streamlined Clean Water projects and the firms feared that they would lose money or contracts. Moriarty is also suing Armbrust and his law firm, Armbrust & Brown LLP, for legal malpractice. Armbrust helped negotiate Moriarty's contract when he was hired for the Clean Water Program and later worked to get him fired, the lawsuit says.

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When Does the Illinois Legal Malpractice Statute of Limitations Start to Run?

The illinois Legal Malpractice Blog writes about the statute of limitations:

"A recent Illinois Appellate decision (Warnock v. Karm Winand & Patterson) stemming from a failed real estate sale addresses the issue of when the two-year statute of limitations begins to run in a legal malpractice case - is it 1) when the underlying action is first filed and the client is put on notice that his attorney(s) may have been negligent or 2) when a decision is rendered in the underlying action resulting in a monetary loss for the client due to the lawyer's negligence. In it's decision the Appellate Court found that in the majority of legal malpractice cases the answer is the latter, saying "in Illinois, a 'cause of action for legal malpractice will rarely accrue prior to the entry of an adverse judgment, settlement, or dismissal of the underlying action in which the plaintiff has become entangled due to the purportedly negligent advice of his attorney.'" (citations omitted). The Court further stated, "[t]he existence of actual essential to a viable cause of action for legal malpractice."

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Mayer Brown Facing Legal Malpractice Lawsuit for $17 Million

Law.Comreports that :"As Mayer, Brown, Rowe & Maw readies for potential claims arising out of its representation of failed commodities brokerage Refco, the Chicago law firm's work for another bankrupt company has already triggered a $17 million suit against it.

The bankruptcy trustee for defunct health care management company CMGT Inc. has sued its former lawyers at Mayer Brown for failing to challenge lawsuits brought against the company by its former financial adviser, Gerry Spehar. According to the trustee, the unopposed litigation crippled the company and handed Spehar a $17 million default judgment.

But Mayer Brown claims the trustee's suit is part of a scheme by none other than Spehar, who it claims is financing the case in the hopes of turning a worthless default judgment based on meritless and speculative damages claims into a $17 million windfall. In court papers, the firm has denounced the suit as a "perversion of the civil and bankruptcy systems."

However, one man's worthless default judgment based on meritless and speculative damges, is another's diamond.

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Is Legal Malpractice "Cannibalism?"

Randy Johnson of Dallas says that legal malpractice litigation now resenbles cannibalism. "A decision this week requiring Houston trial lawyer John O'Quinn to pay at least $35.7 million to former clients may be a harbinger of a legal trend — lawyer cannibalism.

"When I started suing other lawyers in 1981, no one else wanted to do it. But today, oh my God, everybody is competing for this business. They think it's a gold mine to sue other lawyers. The cannibalism metaphor really works here," said Randy Johnston, a Dallas legal malpractice lawyer."The meaning this litigation has for lawyers is that no matter how good a job you do for your clients, you are always going to be subjected to second-guessing and a second generation lawsuit," said Jefferson, whose clients have included O'Quinn. "

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The Notice to Admit in Legal Malpractice

Defense attorneys in legal malpractice cases often try to use a Notice to Admit [CPLR 3123] to get over the hump of some point within their burden of proof.  A notice to admit is really for use with non-controversial factual situations, for example, whether a documents is genuine, or to avoid proofs of an underlying, but not controversal fact.

Here the Syracuse defense attorneys went beyond the pale, and not only mixed law and facts in their notice to admit, but pushed on with its use after plaintiff's attorney, in effect, denied the notice by letter.  The AD held that SupCt should have denied the defense use of the notice to admit.

Williams v Kublick
2007 NY Slip Op 05844
Decided on July 6, 2007
Appellate Division, Fourth Department

"Memorandum: In this legal malpractice action, Jan S. Kublick and Davoli, McMahon and Kublick, P.C. (collectively, defendants) served a notice to admit facts concerning the underlying lawsuits (see CPLR 3123). We previously affirmed an order denying the motion of defendants for summary judgment dismissing the complaint against them (Williams v Kublick, 30 AD3d 1032), and we thereafter determined that Supreme Court erred in granting defendants' subsequent motion seeking that same relief (Williams v Kublick, ___ AD3d ___ [June 8, 2007]).

The court erred in granting the motion of defendants seeking an order deeming the facts in their notice to admit as having been admitted by plaintiff and in denying plaintiff's cross motion seeking an order permitting plaintiff to respond to the notice to admit "as though [the response was] timely interposed." Although plaintiff failed to comply with CPLR 3123 (a) by responding to the notice in a sworn statement in which he either denied the facts therein or explained why the facts could not be truthfully admitted or denied, it is undisputed that counsel for the parties corresponded with respect to the notice to admit. Defendants' counsel and plaintiff's counsel exchanged correspondence with respect to plaintiff's position that the facts sought to be admitted involved mixed questions of law and fact and therefore required resolution at trial (see generally DeSilva v Rosenberg, 236 AD2d 508). Defendants thus were aware of the basis for plaintiff's failure to respond to the notice to admit. We note in addition that there was [*2]extensive discovery with respect to the issues in the underlying lawsuits. We therefore conclude that the court abused its discretion in denying plaintiff's cross motion (see generally Kowalski v Knox, 293 AD2d 892, 893). "

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Privity in Ohio Legal Malpractice

Majority shareholders, minority shareholders and the company's attorney.  Who has the right to sue if things go wrong?  The answer depends on who has privity with the attorney.  Here is an Ohio case on the issue.

Reported by Legal Newsline: "Attorneys for majority owners of close corporations -- ones allowed by law to act more informally than a normal corporation -- may be sued for malpractice by minority owners, the Ohio Supreme Court recently decided.

The appeal in the case LeRoy, et al. v. Allen, Yurasek & Merklin asked the Court to decide if plaintiffs outside the attorney-client relationship can make a valid malpractice claim against the attorney. In a unanimous decision delivered Wednesday, the Court decided that a bad faith or collusion charge is appropriate.

However, the Court decided that minority owners could not proceed on the basis of being in privity with the majority owner -- having virtually the same legal interests"

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Legal Malpractice is Transitory; Mountains are Forever

Oregon has a state sponsored legal malpractice program.  Here is an idiosyncratic view of the program and its imminent demise?

"My little law office was thriving. We did so many revocable trusts that my paralegal could turn them out in her spare time and I stopped paying attention. My lapse in this particular instance meant that my dead client's stuff went to a near'do-well step-child rather than to her intended second husband--also my client. My survivor-husband-client was not happy, but for some reason continued to trust me, who knows why. I turned the matter over to the Professional Liability Fund (PLF) who assigned it to an able staff claims attorney.It took a united effort with the husband (my client) and the others working together for a reasonable resolution and settlement that made all parties happy. The PLF did not have to hire an outside defense attorney for me because the PLF staff attorney did such an able job.

The upshot was the husband-client and I got to know each other better through these negotiations. When I asked about the odd symbol on his business card he advised me that he was a mountain climbing guide. Before long I was enrolled and the next year he guided me to the top of Mt. Hood. He remains a friend. "

"The PLF was established in 1978 after a two year study by members of the Oregon State Bar and was approved by the Oregon legislature in 1977. Initially headed by Lester Rawls, the former Oregon Insurance Commissioner and past manager of a Portland insurance company, the PLF thrived until 2000. A series of unnecessary misjudgments and minor scandals lead to an able CEO's departure and his replacement by Ira R. Zarov. A lawyer since 1974, Mr. Zarov's career was primarily with Legal Aid before becoming the Chief Executive Officer of the PLF in 2000.

The PLF's annual insurance premium was raised from $3,000 to $3,200 in 2007. There are 6,658 Oregon attorneys covered by the PLF. The PLF has 44 employees. During the last two years the PLF "....has seen dramatic increases in the amounts paid to outside legal counsel..." (PLF 2007 Budget Report Page 3) Surprise, Surprise. Past 'bulletinsfromaloha' articles have warned about the unholy alliance between the Oregon State Bar and Portland lawyers. Well, guess who are the "...outside legal counsel..." that are getting these "...dramatic increases..." Loss of innocence is a lifetime pursuit. "

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GCs and Legal Malpractice

An interesting article in today's NYLJ discusses General Counsel and in-house attorney issues.  True Tales From the Law Department by Susan F. Friedman talks about the problems recently surfacing for these attorneys.  One caught our interest:

"Health Care Entity

In an action against a health care entity in the U.S. District Court for the Southern District of New York, the plaintiffs were hospitals and doctors who sought payment for the services they provided to participating members of the health care entity. The action named the health care entity and certain board directors and officers, including the general counsel, as defendants. The plaintiffs alleged breach of contract, fraud, misrepresentation, negligence, conflict of interest, deceit, conversion, and related allegations. In addition, the state insurance department commenced a simultaneous action making similar allegations including breach of fiduciary duty.

The general counsel was accused of legal malpractice and breaching his fiduciary duties by making misrepresentations to all of the plaintiffs including the regulatory body. He was also accused of negligently rendering legal opinions with regard to the business affairs of the health care entity.

All of the outstanding actions were eventually consolidated after a two-year period. Approximately four years after the initial action was commenced, and following substantial negotiations with all parties, a global settlement was effectuated and the claims were resolved in their entirety for $30 million. The entity and its directors and officers liability insurer both contributed to the settlement. In addition, the employed lawyers professional liability insurer paid for the claims alleging legal malpractice against the general counsel. "

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Attorney Sanctioned for Discovery Lapse

Zibell v. County of Westchester, 10866/06 ;Decided: June 20, 2007 ;Justice William J. Giacomo

Here, the attorney but not the client was sanctioned.  Will further problems follow?

From the decision: "If the credibility of court orders and the integrity of our judicial system are to be maintained, a litigant cannot ignore court orders with impunity." (Kihl v. Pfeffer, 94 N.Y.2d 118,123 [1999]).

In this personal injury action in which plaintiffs' counsel has chosen to ignore a court order and has continually and wilfully refused to ensure that his clients' pretrial discovery and pleading obligations are fully satisfied, the Court concludes that in addition to granting conditional relief as against plaintiffs, their counsel should be sanctioned by ordering his firm to pay counsel fees and motion costs to defendant County of Westchester (the County).

Having determined that Gertel has engaged in frivolous conduct with respect to the positions taken by him as to the Two Disputes, the only remaining question is what is an appropriate sanction. Here, as a direct result of Gertel's frivolous conduct, the County has had to incur costs in the nature of the time spent by their counsel in attending conferences to determine the status of discovery in the lawsuit, at two of which the issue of Gertel's frivolous positions was raised, and in filing the instant motion. Likewise, this Court has endured a waste of its limited resources in having to address a motion made necessary because Gertel simply refuses to acknowledge the complete absence of legal support for his views as to the Two Disputes, when the Court's time and effort could be put to better use resolving the meritorious legal disputes of other litigants. And adverse consequences such as these are precisely the type that are intended to be addressed by Section 130-1.1(a) (see Levy v. Carol Management Corp., 260 A.D.2d 27,34 [1st Dept. 1999] ["The goals [of the sanction rules] include preventing the waste of judicial resources, and deterring vexatious litigation and dilatory or malicious litigation tactics"]). Under these circumstances, an appropriate sanction is warranted (see Drummond v. Drummond, 305 A.D.2d 450,451-452 [2d Dept. 2003], lv. denied 1 N.Y.3d 504 [2003] [Affirming imposition of sanction upon "finding that '(1) the attorney has abused the judicial process; (2) the attorney has caused the unnecessary expense of the court's resources to respond to a wholly frivolous motion, one that is completely without merit in law and which cannot be supported by any reasonable argument; [and] (3) there is a need to prevent the attorney from engaging in further frivolous motion practice in this or any future matter.'"]).

Upon that determination, the Court grants the County's motion to the extent that the law firm of Kagan & Gertel shall pay an award of counsel fees and motion filing costs to the County of Westchester in an amount to be determined upon the consideration of further written submissions (see Curcio v. J.P. Hogan Coring & Sawing Corp., supra, 303 A.D.2d, at 359 [Law Firm ordered to pay sanctions and costs where one of its attorneys had engaged in frivolous conduct]). By no later than July 3, 2007, the County shall submit a detailed billing statement reflecting the hours expended at the conferences on December 13, 2006 and January 31, 2007, and in the preparation of this motion, and the hourly pay rate of its counsel. Plaintiffs shall then have until July 13, 2007 to submit papers in response to the County's submission. After considering the papers submitted by the parties, the Court shall determine the amount of the award to be paid by law firm of Kagan & Gerstel, which shall be set forth in a further order."

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Failure in the US Supreme Court and Queens County Legal Malpractice Case

This case was widely reported, and we discussed it yesterday.  From the Decision in Ideal Steel Supply Corp. v. Beil, 20519/06 ,Decided: July 3, 2007 Justice Peter J. Kelly QUEENS COUNTY
Supreme Court

"On or about December 11, 2001, plaintiff Ideal Steel Supply Corp. retained defendant the law firm of Ross and Hardies, LLP (R&H), in contemplation of legal action against National Steel Supply, Inc., a competitor. Both Ideal and National operate stores in Queens and the Bronx, and Ideal asserts that wrongful action by its competitor cost it approximately $10,000,000. Ideal signed a retainer agreement with defendant R&H, the predecessor of defendant McGuire Woods LLP (MW) which stated, inter alia, that defendant Marshall Beil (Beil) would provide representation at the rate of $400.00 per hour. Ideal allegedly paid the defendants approximately $1,000,000 in legal fees.

Plaintiff began this action for, inter alia, legal malpractice on September 19, 2006, alleging that the defendants (1) "[u]nilaterally chose to pursue unique and novel claims in their litigation of the matter, when an expedited recovery could have been obtained pursuant to other causes of action . . . ", (2) "[f]ailed and refused to pursue other bona fide claims, by ignoring relevant case law and Facts", (3) failed to prevent costs and expenses from rising above a reasonable level, (4) made decisions that resulted in unnecessarily high fees, costs, and expenses, (5) increased hourly fees without the prior consent of the client, (6) engaged in dilatory and wasteful litigation conduct, (7) mismanaged the work of experts and litigation support consultants, (8) charged the plaintiff for resources not actually needed, and (9) violated the attorney client relationship, by, for example, revealing strategy to the adversary. The plaintiff's attorney asserts that "[e]ssentially, the mismanagement of the federal litigation and pursuit of inappropriate claims under the civil RICO Act were part of a scheme by the defendants to bill exorbitant legal fees and costs and exclusively pursue those claims that defendant Beil found intellectually novel

Turning to the third cause of action for legal malpractice, two distinct prongs are discernable. The first pertains to the selection of only a RICO cause of action for prosecution and the second pertains to mismanagement of the RICO cause of action itself. Regarding the selection of only a RICO cause of action for prosecution, plaintiff Ideal did not adequately plead that the defendants failed to exercise the degree of skill and care commonly possessed by a member of the legal community (See, Hwang v. Bierman, 206 AD2d 360). "An attorney has broad discretion concerning . . . the theories to plead . . . " (4 Mallen & Smith, Legal Malpractice [2007 Ed], §30.8; see, Patterson v. Powell, 31 Misc 250 [AT], affd 56 App Div 624), and he is not subject to a "rule of infallibility, but is responsible to his client only for those mistakes as a pleader which indicate a lack on his part of the attainments and diligence commonly possessed and exercised by legal practitioners". (Rapuzzi v. Stetson, 160 App Div 150, 157). Although there may be several alternatives, the selection of one of many reasonable defenses or causes of action does not constitute malpractice (See, Hwang v. Bierman, supra).

In view of the history of the Anza litigation, particularly the decision rendered by the Second Circuit Court of Appeals, plaintiff Ideal cannot adequately establish that the selection of a RICO cause of action for prosecution against National was unreasonable. The "selection of one among several reasonable courses of action does not constitute malpractice". (Rosner v. Paley, 65 NY2d 736, 738; see, Dimond v. Kazmierczuk & McGrath, 15 AD3d 526; Holschauer v. Fisher, 5 AD3d 553). The court also notes that plaintiff Ideal's complaint and opposition papers only conclusively allege that other causes of action were available; conclusory and speculative allegations do not support a cause of action for legal malpractice (See, Holschauer v. Fisher, supra; Pellegrino v. File, 291 AD2d 60).

Additionally, even if the selection of a RICO claim involved an error in judgment, such an error does not amount to legal malpractice (See, Rosner v. Paley, supra; Hand v. Silberman, 15 AD3d 167; Alter & Alter v. Cannella, 284 AD2d 138). The Anza litigation presented novel issues from its inception that ultimately had to be decided by the United States Supreme Court. Attorneys "cannot be held liable for exercising their professional judgment on a question that was not elementary or conclusively settled by authority . . . " (Town of North Hempstead v. Winston & Strawn, LLP, 28 AD3d 746, 748; see, Parksville Mobile Modular, Inc. v. Fabricant, 73 AD2d 595; Byrnes v. Palmer, 18 App Div 1, affd 160 NY 699). In sum, the recommendation by the defendants that plaintiff Ideal pursue certain litigation against National did not, under all of the circumstances, rise to the level of malpractice (See, Boulanger, Hicks, Stein & Churchill, P.C. v. Jacobs, 235 AD2d 353).

In the case at bar, the plaintiff's allegations regarding increased expenses resulting from the defendants' alleged mismanagement of the RICO claim are sufficient to survive a mere CPLR 3211(a) (7) motion. Whether the plaintiff's case can withstand a motion for summary judgment is a matter not taken into consideration here (See, Shaya B. Pacific, LLC v. Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, supra)."

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Walgreen Stores and Legal Malpractice

Here is a cross-border story about a Walgreen store, the Mass Land Court, legal malpractice, and discipline of attorneys.

"The state agency that oversees lawyers has concluded that there is insufficient evidence to discipline James P. Killoran for advice he offered and an emphatic promise he made during a 1999 Town Meeting, actions that paved the way for a controversial Walgreens drug store at Buffinton and West County streets.
The company developing the Walgreens store, the Richmond Company, has sued Killoran for legal malpractice.

Richmond alleges that when it hired Killoran, he failed to inform the company of two issues surrounding that land, issues that have sent the case to Massachusetts Land Court for a lengthy — and expensive — trial.

Richmond alleges that the omissions have cost it in excess of $250,000 in development expenses. "

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Lawyer drafts Retainer Agreement, Lawyer invites Legal Malpractice Case

Plaintiff attorney was retained by defendant Chemipal Company, and [unsuccessfully ?] tried a case for them.  Fredericks sued Chemipal Company, who then brought in appellate attorney Nathan Dershowitz. Result?  Lawyer loses, Chemipal Company wins, third-party legal malpractice case against Dershowitz  dismissed.   Fredericks v. Chemipal Ltd., 06 Civ. 966
Decided: July 6, 2007 District Judge Gerard E. Lynch U.S. DISTRICT COURT

This three-party litigation began when plaintiff trial attorney Barry I. Fredericks ("Fredericks") sued for non-payment of what he claimed was a contingent fee owed to him by his former client, defendant Chemipal, Ltd. ("Chemipal"). Chemipal, in turn, impled its appellate attorney, Nathan Z. Dershowitz ("Dershowitz"), and his firm, Dershowitz, Eiger, & Adelson, P.C. ("DEA"), charging them with malpractice and breach of contract. In an Opinion and Order dated May 3, 2007, the Court granted Chemipal's motion for summary judgment on the grounds that the ambiguous fee agreement was to be construed in favor of the client. This rendered the third-party action moot.

Fredericks now moves for reconsideration of the May 3 Opinion and Order, and for leave to amend his complaint to add a claim for quantum meruit recovery for services allegedly performed after the period covered by the fee agreement. The motions will be denied. "

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Is This the End of Eleanor Capogrosso Legal Malpractice Lawsuits?

Attorney Eleanor Capogrosso is the subject of a decision of Justice Debra James, reported in today's NYLJ.  Rarely are litigants "enjoined" from bringing law suits without prior permission of the court, but this attorney apparently went too far.  "After filing 16 lawsuits on her own behalf - eight pro se and eight using seven various law firms - a Manhattan solo practitioner has been barred from initiating litigation as a party-plaintiff.

In throwing out Eleanor Capogrosso's legal malpractice action against the attorney she hired to litigate a medical malpractice claim, Manhattan Supreme Court Justice Debra A. James (See Profile) also issued an order requiring Ms. Capogrosso to receive approval from an administrative judge before filing future actions or motions on her own behalf.

"Though a review of the record shows that plaintiff has flirted with placing her own license to practice law in jeopardy, of more moment is her pattern of commencing frivolous and repetitious actions," Justice James wrote in Capogrosso v. Kansas, 112291/06. "Based on a pattern of vexatious conduct and repetitive litigation and proceedings brought by plaintiff . . . this court grants a protective order prohibiting plaintiff from initiating any further litigation as party plaintiff without prior approval."

"Justice James cited Ms. Capogrosso's challenges to "the integrity of at least three judges" - including Justice James - and a 2003 decision, Capogrosso v. Hospital for Special Surgery, 112075/02, in which Supreme Court Justice Eileen Bransten (See Profile) stated that "Capogrosso narrowly escapes sanctions this time but hopefully will nonetheless learn that she must follow court orders."

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Reasons why Judge Resigned

The NYLJ reports:

"Former Supreme Court Justice Lawrence I. Horowitz used his status as a judge to seek preferential police treatment for his girlfriend and to have authorities investigate the woman's estranged husband, the state Commission on Judicial Conduct said yesterday.

The commission announced that Mr. Horowitz, who resigned on June 20, has signed a stipulation acknowledging that he could not defend himself against the disciplinary charges. He also agreed not to serve again as a judge or judicial hearing officer.

The commission contended that from the beginning of his tenure, Mr. Horowitz used Supreme Court stationery to write letters concerning personal or family business matters. The correspondence included letters to the schools his children attended to comment on school policies, to his house of worship to discuss his membership dues and to Verizon, contesting an unpaid bill of $14,707 for a phone number associated with his former law practice, according to the commission.

Mr. Horowitz also violated judicial canons beginning on Feb. 3, 2005, when his girlfriend, Michelle Nolan, was stopped for speeding in Yorktown, Westchester County, the commission charged. A police computer check indicated Ms. Nolan's estranged husband, Christopher Angiello, had reported the vehicle stolen. Mr. Horowitz called the officer investigating Ms. Nolan's case and identified himself as her friend and assuring him Ms. Nolan would respond to any traffic summonses, the commission charged. In the stipulation with the commission, Mr. Horowitz acknowledged his inability to defend himself against the charges in the complaint and that he has resigned from the court. While the commission has 120 days under Judiciary Law §47 to complete an investigation against judges if they resign, commission administrators and Mr. Horowitz agreed that all matters in his case should be closed.

The stipulation made reference to the commission's notification to Mr. Horowitz that it was also investigating "additional allegations" against him unrelated to the 2006 complaint, but the nature of the other allegations was not revealed.

Several summonses were issued against Ms. Nolan, though the officer's supervisor had recommended she be charged with a crime and that bail be set, the commission noted.

Mr. Horowitz then accompanied Ms. Nolan to the Yorktown police station to file a complaint against Mr. Angiello for having made a false report about the car. At that time, he identified himself as a judge and demanded that police investigate Mr. Angiello and his brother, Yorktown Police Officer Dominic Angiello, for allegedly working together to improperly report the vehicle as stolen.
In his verified answer, Mr. Horowitz noted that his misconduct came in his first 18 months as a "relatively new" judge. He also made reference to a series of personal setbacks dating from his 2003 campaign for Supreme Court, when his wife, Alexis Furer, began a bitterly contested divorce proceeding against him. "

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Are Damages for Emotional Distess Taxable?

Jackson Lewis LLP reports this Federal Case from the DC Circuit which holds that they are taxable.

"DC Circuit rules that damages for non-physical injury are subject to federal taxation
Jackson Lewis LLP

July 13 2007

The U.S. Court of Appeals for the District of Columbia Circuit has resolved the constitutional question it first created concerning the taxability of damages for emotional distress or mental anguish and loss of reputation (non-physical personal injury). After reviewing the issue, the D.C. Circuit has held that such damages were taxable. Murphy v. IRS, No. 05-5139 (D.C. Cir. July 3, 2007). "

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Legal Malpractice Pleading

Plaintiff's cause of action for negligent misrepresentation was dismissed as duplicitive in this 2nd Department case.  Iannucci v Kucker & Bruh, LLP ;2007 NY Slip Op 06026 ;Decided on July 10, 2007 ;Appellate Division, Second Department

"The Supreme Court should have granted those branches of the defendants' motion which were, in effect, pursuant to CPLR 3211(a)(7) to dismiss the third and fourth causes of action for failure to state a cause of action. These causes of action, which alleged negligent misrepresentation and fraud, arise from the same facts as the legal malpractice cause of action alleged in the complaint, and do not allege distinct damages (see Town of N. Hempstead v Winston & Strawn, LLP, 28 AD3d 746, 749; Daniels v Lebit, 299 AD2d 310; Best v Law Firm of Queller & Fisher, 278 AD2d 441, 442). By contrast, the second and fifth causes of action seek a refund of alleged excess fees that were paid to the defendants. These causes of action invoke facts different from those alleged in the first cause of action, which seeks damages in a different amount for legal malpractice."

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Steven Seagal, Julius Nasso, Loeb & Loeb and Legal Malpractice

Steven Seagal is now suing Loeb & Loeb over the Julius Nasso incident.  Loeb & Loeb has already won a determination that any legal malpractice case has to be arbitrated;  this arbitration provision is found in its retainer agreement, and in the Nasso v. Loeb & Loeb case, got the AD to uphold the arbitration agreement in the face of a public policy argument.

Prediction:  this case too will go to arbitration.

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Speak to Your Client During Trial? 2d Circuit Rules

May a criminal defendant speak with his attorney during cross-examination and  overnight?  The rule, as reported by is reported by Wilmer Cutler Pickering Hale and Dorr LLP .

:The Second Circuit recently clarified the law relating to communications between a defendant and his attorney during the defendant’s ongoing trial testimony. In U.S. v. Triumph Capital Group, Inc., the defendant-appellant alleged that the district court had violated his Sixth Amendment right to counsel when it ordered that his defense counsel not speak to him about his trial testimony during an overnight recess in the midst of the prosecution’s cross-examination.

No. 05-2630-cr, 2007 U.S. App. LEXIS 12221, at 2-3 (2d Cir. May 25, 2007). The district court rescinded its order after three hours, and, the following morning, recessed before the day’s testimony to provide the defendant and his counsel with sufficient time to confer prior to continuing the proceedings. Id. at 5-6. The district court also ordered that defendant and his counsel could not discuss defendant’s testimony during daytime breaks in the cross-examination, including an hour-long lunch break. Id. at 6. "

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Is this Permissible?

We have never heard anything like this.  This attorney goes to trial, and has an indian MD linked up, in real time, and listening to the proceedings.

"U.S. lawyer Dorothy Clay Sims has started using medical experts in India for help in legal cases:

Sims has reduced [medical expert costs] by hiring medical experts in India for a fraction of the price, and she makes the service available to other American lawyers through an Internet-based business called MD in a Box. The U.S. lawyers pay $90 an hour for the medical consulting. The process works through a real-time link to an Indian doctor by computer. Sims describes a typical case in which a U.S. orthopedic surgeon disputes her client's claims in an American courtroom.

"I have my computer with me, and my doctor in India is listening to the orthopedic surgeon the whole time, through a microphone plugged into my laptop," said Dorothy Clay Sims. "He is then sending me instant messages saying, "that is not true. It is actually such and such or so and so." And I look down at my screen and I will just say exactly what the doctor said from India."

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The Computer ate my Court Notification and caused Legal Malpractice

Missing a court date is bad.  Worse is having your computer e-mail system make you miss the date, and having the judge hold a hearing at which you have to produce your IT guy, all to explain how it happened.

Here is a Washington Post article telling how it all went bad.

"The trouble at Franklin D. Azar & Associates PC began with pornographic spam.
Last May the Aurora, Colorado, law firm was being bombarded with offensive messages, and enough of it was seeping through the company's spam filters that employees complained to management, and IT administrator Kevin Rea was told to do something. 

What happened next, as detailed in federal court filings, shows how the fight against spammers can backfire. Spammers have been using increasingly sophisticated techniques to evade filters, so that over the past few years and despite predictions to the contrary, unsolicited e-mail continues to plague businesses worldwide.

On the morning of May 21, Rea dialed up the spam settings on the Barracuda Spam Firewall 200 Azar & Associates was using to block unwanted mail. The changes made it harder for spam to land on the desktops of company employees but they also had one unforeseen consequence: the Barracuda Networks Inc. appliance began blocking e-mail from the United States District Court for the District of Colorado, including a notice advising company lawyers of a May 30 hearing in a civil lawsuit.

Azar & Associates lawyers blew their court date and this week the judge overseeing the matter ordered the company to pay attorney fees and expenses incurred by the lawyers who showed up representing the other side of the case. Rea did not return a call seeking comment on the matter. "

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US Supreme Court loss, now Legal Malpractice Case

About a year ago we wrote on a case in which a US Supreme Court brief and case were dismissed on technical grounds.  Its pretty bad when a mistake is advertised by the US Supreme Court on such a big stage.

Here, a loss at the US Supreme Court has led to a legal malpractice case.  "A civil case reaching the U.S. Supreme Court is generally presumed to have benefited from skillful advocacy, but in a lawsuit filed last year in Queens Supreme Court, Ideal said its former lawyers at McGuireWoods botched the case by pursuing a "unique and novel" but ultimately "inappropriate" civil RICO claim. The company further charges a scheme to bill exorbitant legal fees. In its malpractice suit, Ideal claimed that Beil ignored potential state law claims to focus on the more "intellectually novel" civil RICO claim. Paul Brancato, general manager of Ideal, which his family owns, said that focus was in keeping with Beil's general approach to the case. "

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Attorney Takes Case, Attorney Refers Case, Attorney Indicted

Plaintiff in this case has been through the wringer, hiring an attorney in a car case and having that attorney refer out the case,  2d attorney lets the case go past statute, and 1st attorney suggests suing 2d attorney for legal malpractice.  However, when client sues, Attorney 2 impleads Attorney 1.  Then it gets interesting. 

"After the legal malpractice suit was filed, Mr. Gnall’s name was added as a defendant and eventually a settlement was reached with $567,831.10 going to Ms. Buntz. Mr. Gnall, meanwhile, received a $133,332 referral fee from the firm.

The settlement check, however, was sent to Mr. Gnall, along with paperwork Ms. Buntz had to sign, according to John McGovern, the attorney now representing Ms. Buntz. Instead of handing over the settlement check to Ms. Buntz, Mr. Gnall told her to see Mr. Peperno for investment advice, the suit alleges.

“She’s not a lawyer, and she didn’t understand he had been added to the (legal malpractice) suit,” Mr. McGovern said. “He was still giving her legal advice, when he should have stepped aside.”

"About $300,000 of her settlement money was invested through Mr. Peperno’s cousin, Frank Peperno, who was a licensed stockbroker, according to both federal court paperwork and the lawsuit filed by Ms. Buntz. The rest, both the federal indictment and Ms. Buntz’ suit claims, was used by James Peperno.

Mr. Gnall’s federal indictment contains accusations that he received $275,000 from Mr. Peperno in July 2005, at least some of which was Ms. Buntz’ money. Mr. Gnall allegedly used the money to buy the building where his law practice was located. "

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Who Owns the File? Attorney or Client?

Hinshaw reports an Iowa case which holds that the client owns virtually the entire file when in dispute with the attorney.  In New York, the case of  Sage Realty Corp. v. Proskauer Rose, 91 NY2d 30 (1997) governs.  In NY the client owns the file, and the attorney must reasonably provide the file, including work product.  For the Iowa case, read the Hinshaw alert. Posted In Blog Articles
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A Comedy of Errors in Legal Malpractice and Estate Litigation

Plaintiff's decedent was incapacitated prior to death and a guardian was appointed.  The estate argued with the guardian over fees, and hired attorneys.  Settlement was reached, but the estate now argued with the attorneys over fees, and whether the settlement was appropriated. 

The attorneys withdrew and sued for fees.  For the balance of the procedural thunderstorm read the case.  One interesting element in the NJ case is the continuing failure by litigants to recognize the necessity of an affidavit of merits in a legal malpractice case.

"We assume the motion judge was attempting to provide defendants, appearing pro se, with clear guidance as to their discovery obligations and believed his March 31, 2006, order accomplished that goal. However, as we noted in Colonial Specialty Foods, Inc. v. County of Cape May, 317 N.J. Super. 207, 210 (App. Div. 1999), a subsequent dismissal with prejudice pursuant to R. 4:23-5(a)(2) can only be predicated upon a proper dismissal without prejudice under R. 4:23-5(a)(1).

More importantly in terms of what transpired, the March 31, 2006, order clearly allowed defendants the reasonable belief that if they complied with the order's conditions, their pleadings would be restored, and, of equal importance, SSSG could not move to convert the dismissal to one "with prejudice" until ninety days elapsed.

Unfortunately, within thirty-eight days, the case was listed for trial. When defendants failed to appear, default was entered and two-days later, after a proof hearing, judgment was entered.

The entry of default and judgment were both improper under our Court Rules. First, pursuant to R. 4:43-1, default may be entered against a party who has "failed to appear," or whose "answer has been stricken with prejudice." Since defendants' pleading was specifically stricken and dismissed without prejudice by the terms of the March 31, 2006, order, default was not appropriate. See also Kolczycki v. City of East Orange, 317 N.J. Super. 505, 520 (App. Div. 1999) (holding that proof hearing should not have occurred while suppression of defendant's pleading was "without prejudice"). We assume that defendants' confusion was well-founded given the conflict between the March 31, 2006, order, that implied an available ninety-day period for defendants to restore their pleadings, and SSSG's April 19, 2006, letter that conveyed the court's requirement that defendants appear, not for trial, but for a proof-hearing, which, for the reasons already discussed, was improper."

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is this true for Lawyers?

The Wall Street Journal reports this:

"What do you call a surgeon who wears a suit? A defendant. It's an old joke, but at any given moment in the U.S., approximately 60,000 medical malpractice suits are being tried, many involving multiple physician-defendants. That's roughly 10% of the physician population. And once a physician experiences the legal system, it can scar him permanently"

This is manifestly not true for lawyers.  By our estimation there are 100,000 lawyers in New York State.  There are certainly not 10,000 legal malpractice lawsuits going on at any time, and perhaps not even sequentially.



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Plaintiff agrees to Late Motion for Summary Judgment, but Appellate Division denies anyway

Motion for summary judgment made by defendant 125 days after note of issue. Plaintiff did not object, and may have consented.  AD held that only court may grant extensions, stipulations are void.  Motion dismissed.Coty v County of Clinton ;2007 NY Slip Op 05803 ; Decided on July 5, 2007
Appellate Division, Third Department
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New Trial Subpoena Rules coming into Effect

New rules for service of trial subpoenas are now coming into effect.


Section 1. The civil practice law and rules is amended by adding a new section 2303-a to read as follows:  § 2303-a. Service of a trial subpoena. Where the attendance at trial of a party or person within the party's control can be compelled by a  trial subpoena, that subpoena may be served by delivery in accordance  with subdivision (b) of rule 2103 to the party's attorney of record.  § 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law.

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New Motion Practice Rules now in Effect

Motion practice, expecially cross-motion times have been changed.


 "Section 1. Subdivision (b) of rule 2214 of the civil practice law and rules, as amended by chapter 177 of the laws of 1984, is amended to read  as follows:  (b) Time for service of notice and affidavits. A notice of motion and supporting affidavits shall be served at least eight days before the  time at which the motion is noticed to be heard. Answering affidavits  shall be served at least two days before such time. Answering affidavits  and any notice of cross-motion, with supporting papers, if any, shall be  served at least seven days before such time if a notice of motion served  at least [twelve] sixteen days before such time so demands; whereupon  any reply or responding affidavits shall be served at least one day  before such time. 

 § 2. Rule 2215 of the civil practice law and rules, as amended by 14 chapter 132 of the laws of 1980, is amended to read as follows:  Rule 2215. Relief demanded by other than moving party. At least three  days prior to the time at which the motion is noticed to be heard, or  seven days prior to such time if demand is properly made pursuant to  subdivision (b) of rule 2214, a party may serve upon the moving party a  notice of cross-motion demanding relief, with or without supporting  papers; provided, however, that:  (a) if such notice and any supporting papers are served by mailing, as  provided in paragraph two of subdivision (b) of rule 2103, they shall be  served three days earlier than as prescribed in this rule; and 

 (b) if served by overnight delivery, as provided in paragraph six of  subdivision (b) of rule 2103, they shall be served one day earlier than  as prescribed in this rule. Relief in the alternative or of several 4different types may be demanded; relief need not be responsive to that  demanded by the moving party. 

 § 3. This act shall take effect immediately; provided, however, that  this act shall apply to a notice of motion served on or after the date  on which this act shall have become a law."

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He was my Divorce Lawyer; No, he's my Criminal Defense Lawyer; No, I'm Suing Him!

Plaintiff was the husband in a divorce, and defendant was his attorney.  Husband was advised to tape his wife's telephone calls.  He gets arrested and hires attorney to defend.  Attorney does not tell client of plea offer, and client eventually is convicted.  Lawyer is disbarred and client now sues.

This case is from North Dakota, but we have to believe that there are many other criminal defense attorneys there.  Why didn't the client use another attorney and give up attorney 1?

"jury trial is scheduled Wednesday in Northwest District Court in Minot in a legal malpractice case involving a former Minot attorney.

Donald Peterson, who was disbarred in 2004, is being sued by Robert Taylor of Stanley, a former client whose complaint was a factor in the North Dakota Supreme Court disciplinary board’s action against Peterson. Judge Burt Riskedahl, Bismarck, will preside at the trial.

Taylor is asking unspecified damages from Peterson and Peterson’s former law firm of Kenner, Sturdevant & Cresap. "

Taylor’s complaint, filed nearly three years ago, alleges that Peterson failed to properly represent him and gave him improper and erroneous advice.

Taylor retained Peterson as his attorney in a divorce case in 2002. According to the complaint, Taylor followed his attorney’s advice regarding taping phone conversations, then received a suspended sentence for illegally recording when Peterson inadequately represented him and failed to notify him of a plea agreement offer.

Taylor also alleges that Peterson failed to file an appeal of the divorce judgment by the filing deadline and refused to return funds deposited with him to file the appeal. Papers that Peterson eventually filed included a forged signature for Taylor, the complaint stated.

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Legal Representation and the Long Arm Statute

Although the court reporting service got the cite wrong [we'll get it later today], here is yet another law school  case concerning jurisdiction:  A New York Plaintiff hires a Pennsylvania attorney to litigate in Connecticut." Scheuer v. Schwartz

"CIVIL PROCEDURE. LONG ARM JURISDICTION. TRANSACTION WITHIN STATE. Plaintiff, the estate of a New Yorker who retained defendant, a Pennsylvania attorney, to represent him in a Connecticut probate proceeding, brought an action to recover alleged excess fees charged to the deceased. Granting of defendant’s motion to dismiss for lack of personal jurisdiction reversed, and complaint reinstated. CPLR 302(a)(1) permits long-arm jurisdiction over a nondomiciliary where: (1) defendant transacted business within New York; and (2) cause of action arises out of the transaction. Here, as part of handling the Connecticut probate matter, defendant made 10 trips to New York during a nine month period, during which he met with the deceased and his adversaries in the probate proceeding, and reviewed documents, for which he charged 70 hours of legal time. Thus, defendant engaged in “purposeful activities” in New York, justifying long-arm jurisdiction"

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Here's another take on Accounting Malpractice

Continuous representation, which arose in medical malpractice, and was imported to legal malpractice does apply to all professional malpractice cases, but in this recent federal case, which we reported earlier, it does not save plaintiff when a new contract is arrived at each tax year. Williamson v. Price Waterhouse.

Here the case is reported from a Fed Civ Pro prospective.

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Everyone's a Legal Malpractice Expert

We have no idea why a coin collecting web site features this exposition on legal malpractice, but here it is:

Tips for Beginning Coin Collectors   When is a Settlement Not a Settlement?
By Gerry Oginski When its not recorded in open court, or when the injured victim dies before he receives the settlement check, and the terms of the settlement were never clearly laid out by either side. Usually a settlement is reached among the attorneys or in Court with the assistance of the Judge. Where there is a verbal agreement between the attorneys as to the terms of the settlement, the victims lawyer will usually confirm those details in a written letter to the defense attorney. If a settlement is reached during trial, or at a pre-trial conference, the preferred method of settling the case is to put the settlement on the record. This means that a court reporter is called to the courtroom or Judges chambers, and the terms of the settlement are recorded and agreed to by all parties and later transcribed by the court reporter. Why is this important you ask? Because a settlement is not a settlement until and unless these rules are followed. Many attorneys are

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Here's a Bar Exam Question: Will Bar/Bri settlement lead to Legal Malpractice?

Like all the big issues, this law suit may later lead to a bar exam question. 

"U.S. District Judge Manuel Real approved a roughly $49 million settlement in the BAR/BRI class action Monday -- but only after rejecting incentive payments to five class representatives, claiming they had a conflict of interest.

The judge also delivered lower attorney fees than previously suggested for the class action, which alleged that West Publishing and Kaplan Inc., both major players in the legal test prep market, cut a secret deal to give West's BAR/BRI a virtual monopoly over bar review courses, and Kaplan less competition in LSAT preparation classes. The proposed settlement called for the class of about 300,000 current and former law students to collect about $125 each.

Lisa Gintz, one named plaintiff who said she worked about 480 hours on the case, was "befuddled" by the decision.

"If you're saying all your class representatives had conflicts, how can you approve the settlement? Logically, I just don't understand that," the Louisiana-based attorney said. "  [Our own conflict check:  in Law School we sold Bar/Bri as graduating 3L]

"Nesci said Monday that she's been talking to an attorney about bringing a case of legal malpractice against McGuireWoods

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College, California, Condemnation and Legal Malpractice

College buys land, nearby municipal college gets municipality to condemn the land, buying it in eminent domain while original college puts up a building.  Outcome is that municipal college wins, gets land and buiding, deposits $ 1.8 million for the building, and  loser college sues its attorney.

"An empty $3 million classroom in Riverside County has led Azusa Pacific University to court for the past several years.

Besides fighting a community to obtain compensation for land APU lost in court, the university also sued its former attorneys for legal malpractice.

In 2000, the university acquired a 30-acre lot in Menifee to establish a remote learning center. The land is adjacent to Mount San Jacinto College, which then filed an eminent domain lawsuit to claim the land for its own use.

Despite legal filings, APU started a $3 million construction project for a learning center on the site.

After APU lost the case, it filed the 2005 malpractice suit against its attorney, Edward Szczepkowski of the law firm Brown, Winfield, and Canzoneri, charging he failed to tell them that they should have informed the court that there was a building on the site. "

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$ 1 Million in Legal Malpractice for failing to communicate a settlement Offer

Attorney represented infant in a medical malpractice case.  Case was valued at $ 20 Million.  Just prior to trial, defendants offered $ 1 Million.  Attorney rejected, tried and lost the case.  Later, he asked the client for $ 160,000 in disbursements.  She refused.

Case then went on to a legal malpractice in which it was agreed that attorney had no paper proof that he communicated the offer.  Jury verdict for $1 million 

This blurb thanks toFish Law firm.

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Taxable or Not? Awards for Mental Anguish

Personal injury awards are tax free.  Other awards are taxable.  Here is a question in the middle:  Is an award for mental anquish in a federal whistleblowing case taxable?  

" A federal appeals court ruled Tuesday that awards for mental anguish are taxable, which reversed what it said just 11 months ago. The decision came in the case of Marrita Murphy, who was awarded damages for emotional distress and loss of reputation after she complained to authorities of environmental hazards at a New York Air National Guard base in Syracuse.

The taxpayer's situation "seems akin to an involuntary conversion of assets; she was forced to surrender some part of her mental health and reputation in return for monetary damages," said the court. Ms. Murphy intends to seek further review in the courts, said one of her lawyers"

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But, you must reasonably know that there is a claim out there in Legal Malpractice

In comparison to the prior article, you need not put the insurer on notice until and unless you reasonably know that there really is a claim against the attorney.  In another short subscription blurb:

"MADISON, Wis. - An insurer owes a duty to defend and indemnify its insured against claims of malpractice because the insured attorney did not have a basis to believe that his acts might reasonably be expected to be the basis of a legal malpractice claim against him before the inception of the insurance policy, a federal judge said June 13 (Continental Casualty Co. v. William A. Schembera, Schembera & Smith and Evan Zimmerman, NO. 07-048, W.D. Wisc.; 2007 U.S. Dist. LEXIS 43302). Full story on "

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You must put the Insurer on Notice in Legal Malpractice

Here is a short blurb from the subscription Meeley reporter on a case where the attorney failed to put the insurer on notice of a legal malpractice claim against him, even though he sent a letter to the insurer.

"ATLANTA - No coverage is available for a legal malpractice suit filed against an insured attorney because the insured's letter informing the insurer of a dispute with a former client did not place the insurer on notice of a claim, the 11th Circuit U.S. Court of Appeals said June 8 (Clarendon National Insurance Co. v. Brad H. Muller, individually, and as trustee of the Corrine R. Muller Trust, No. 06-16184, 11th Cir.; 2007 U.S. App. LEXIS 13393). Full story on "

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Assign a Legal Malpractice Case? No!

Banks routinely assign mortgages to each other.  That is one reason that FHA conforming mortgage and forms are prevalent.  The banks take in application fees, points, etc., and then sell blocks of mortgages to others, at a discount. 

Legal malpractice cases, even when arising from mortgages may not be similarly traded in Florida.  Here is a case in which an attorney discontinued an earlier foreclosure in order to start a new one.  This action violated the statute of limitations, and the bank ultimately lost.  However, as they had assigned the mortgage to yet another bank, the successor bank not only lost on the foreclosure, but were unable to sue the attorney.


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Frisky Litigation gets Way out of Hand

We believe that they really play hardball in New Jersey, putting NY attorneys to shame.  Here, sanctions and attorney fees seem to be the apex of unsocial behavior, and once in a while, a fist fight.  But New Jersey!!!

This story illustrates how far they would go. "A federal judge denounced lawyers at Hackensack's Cole, Schotz, Meisel, Forman & Leonard on Thursday, and threatened them with sanctions, for trying to meddle with an opposing attorney's personal finances.

Two Cole, Schotz partners admitted to U.S. District Judge Harold Ackerman that an associate asked a bank counsel whether a client of the firm could buy mortgages the bank held on property of litigation foe Gregg Trautmann of Rockaway.

Such purchases would have made Cole, Schotz's client - a lender defending itself against six suits brought by Trautmann - holder of the mortgages on his home and office.

Nothing in the record explained what the Cole, Schotz associate, or the partner who authorized the inquiry, had in mind.

But Ackerman said he reached the "evil conclusion" that the goal was to control Trautmann's mortgages so Cole, Schotz's client, Kennedy Funding Inc. of Hackensack, could "put the squeeze, as we use that colloquial phrase, on him and on the litigation."

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Just How Far does Attorney Privilege Go?

In the Creditanstalt Inv. Bank AG v Chadbourne & Parke LLP , 2007 NYSlipOp 02794 .April 3, 2007 ,
Appellate Division, First Department  case, the AD1 allowed an invasion of the attorney-client privilege regarding discussions plaintiff had with other law firms about the problem they sued over.

Although the dissent makes a good case for continued privilege, the majority simply did away with any attorney client secrecy.  Follow for the inevitable Court of Appeals case.

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Basics of Legal Malpractice

Malpractice is a professional's failure to use minimally adequate levels of care, skill or diligence in the performance of the professional's duties, causing harm to another. In New York, attorney malpractice is defined as a "deviation from good and accepted legal practice, where the client has been proximately damaged by that deviation, but for which, there would have been a different, better or more positive outcome.

Malpractice typically occurs when a professional fails to exercise his or her professional skills in an assignment at the necessary standard of care, skill and learning applied under the circumstances by the average prudent reputable member of the profession in the "community". The analysis is based upon the standard of care for the professional in the community" what other professionals in the same field do for their clients who are located in the same geographic area. In New York, courts will hold all attorneys to the same standard of professional performance.

The first necessary element is a professional relationship. In order to sue for professional malpractice, the plaintiff must have retained the attorney. There must of course be a relationship in privity, between the professional and the plaintiff such that the professional owes the plaintiff a duty. In attorney malpractice either a written retainer, proof that the attorney engaged in work or proof that the attorney appeared for the client is necessary. While in litigation often there is clear proof of representation; in transactional settings, representation may be less clear. Proof to a jury's satisfaction of actual representation must be demonstrated. This proof may come from the correspondence of the professional, from papers authored by the attorney or from litigation documents.

The first element of a relationship between the client and the professional was previously discussed. The second element, deviation, is shown by evidence, not necessarily expert, which shows that the acts of the professional fell so below the good and accepted practice of law in New York, that a jury would be permitted to find that the acts below standard.

Expert testimony is necessary when the deviation is subtle; an example could be the failure to supply an affidavit of merits to restore a case marked off calendar, the failure to respond to a CPLR 3216 notice, or failures in response to a motion for summary judgment. Expert testimony is not always necessary however. None is needed to demonstrate the deviation in failing to file within the statute of limitations. Bad outcome do not necessarily equal a deviation. Furthermore, questions of judgment of strategic choice cannot serve as the basis of malpractice. An attorney is permitted the reasonable choice of strategy, if supported by acceptable reasoning. The strategic choice must be reasonable both objectively and subjectively. The difference between strategic choice and mistake are subtle, and create the most difficult cases.

The third element of proximate cause encompasses both the typical analysis that arises in all negligence litigation and the additional element of "but for." The plaintiff must demonstrate not only that the deviation was a substantial cause of the poor outcome, but must additionally show that "but for" the deviation there would have been a different, better or more positive outcome. An example of this potential difficulty arises in an automobile accident. No matter how many deviations are shown, it may be that the maximum insurance for the other driver limits the recovery. If that is true, it will be impossible to show that "but for" the deviation, more than the policy limit was available and could have been recovered from the defendant.

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Failure to Anticipate an Adverse Ruling; Is it Legal Malpractice?

Clients understood that a request for legal fees in Surrogate's Court would preclude any legal malpractice case later.  Their claim was that they would have accepted a settlement offer, but their attorney assured them that they had a meritorious case.  Surrogate's court then ruled against them in the will contest.  Attorney sought fees, they sued for legal malpractice.

The Court of Appeals Case, Leder v Spiegel,2007 NY Slip Op 05588, Decided on June 28, 2007, Court of Appeals  holds:

"The order of the Appellate Division should be affirmed, with costs.

After unsuccessfully representing two objectants at a will contest trial in Surrogate's Court, respondent attorney petitioned the same court for legal fees. In their answer, objectants counterclaimed for legal malpractice, arguing that, but for respondent's negligent representation, they would have accepted a $108,000 settlement. In particular, objectants cited respondent's failure to anticipate that Surrogate's Court would not admit certain evidence. Respondent moved pursuant to CPLR 3211(a)(7) for an order dismissing objectants' [*2]counterclaim.

Surrogate's Court dismissed objectants' counterclaim and awarded respondent her legal fees. In a 3-2 decision, the Appellate Division affirmed. Objectants appeal as of right, and we now affirm.

"In order to sustain a claim for legal malpractice, a plaintiff must establish both that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession which results in actual damages to a plaintiff, and that the plaintiff would have succeeded on the merits of the underlying action 'but for' the attorney's negligence"

(AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428 [2007] [internal citations omitted]). Under the circumstances of this case, objectants' allegation regarding respondent's failure to anticipate the court's evidentiary rulings — even if accepted as true — does not establish negligence. Thus, objectants did not allege a prima face case of legal malpractice and the courts below properly dismissed their counterclaim. Objectants' remaining contentions also lack merit. "

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Legal Malpractice Disclosure Rule Considered in California

TheLA Times reports on a proposed legal malpractice insurance disclosure rule in California.

"California lawyers will have to tell their clients whether they carry malpractice insurance under a proposed rule that opponents say could add to the costs of going to court.

About 20% of the state's 150,000 lawyers don't have malpractice coverage, according to Jim Towery, chairman of the State Bar of California task force that drafted the proposed rule. Towery and others who support the rule said most clients want to know whether a prospective lawyer has insurance, or a history of complaints, but many fail to ask.

Opponents fear that requiring disclosure might effectively force all lawyers to buy such insurance and pass on the costs — up to $9,000 a year — to clients.

Most of those who lack the insurance are sole practitioners who represent accident or consumer fraud victims. "

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Legal Malpractice Stats in California

The Blog, LA BizObserved reports that:

"Malpractice disclosure: A task force of the State Bar of California is proposing that lawyers be required to tell their clients whether they carry malpractice insurance (about 20 percent of the state's 150,000 lawyers don't, many of them sole practitioners). Opponents say the the requirement could force all lawyers to buy such insurance and pass on the costs to clients. Legal malpractice cases worth $2 million or more jumped 60 percent between 1996 and 2003. Most legal malpractice claims result from personal injury and real estate cases, according to the study, and close to 70 percent of these suits were lodged against small firms. The proposed rule would have to be approved by the State Bar's Board of Governors and the California Supreme Court. (LAT) "

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More Attorney Fee Disputes: Didn't they know better?

Attorney 1 starts to look at a case for client, files a retainer statement and a month later is told to stop work.  Attorney 2 starts to work on the case, but we do not know what happened after that, except that the case settled for $ 450,000. Michael B. Miller PC v. Joel J. Turney LLC, 9654-2007
Decided: May 29, 2007 ,Justice Sandra L. Sgroi ,SUFFOLK COUNTY ,Supreme Court

Attorney 1 then files papers against attorney 2.  Mistakes: 

1.  They used the same index number as the underlying case;

2.  No summons and complaint was filed by attorney 1 versus attoren 2;

3.  Attorney 1 didn't file a summons or complaint in the underlying case, and probably will not be able to recover legal fees.

4. Both attorneys used affirmations even though they were parties.

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Make a Mistake? Take over the Case? Who gets the fee?

Client is in an auto accident.  Attorney 1 works the case, brings it to a $ 600,000 settlement offer.  Client goes for a 2d opinion, and they tell him the first attorney committed malpractice by not bringing a derivitive action for the wife.  2d Attorney ups the offer to  $950,000 which the client accepts.

Who gets what?  

Were this a law school exam, we would start by citing the responsibilities and rights of the parties.  However, we have the benefit of the AD First Department here:

Matter of Wingate, Russotti & Shapiro, LLP v Friedman, Khafif & Assoc.
2007 NY Slip Op 05655
Decided on June 28, 2007
Appellate Division, First Department

"One month after their retention, the Wingate firm settled the matter for $950,000. It then brought the instant petition, seeking a declaration that the Friedman firm was not entitled to legal fees. The IAS court issued an order, holding that if the parties did not agree upon a particular division of fees ($124,196 for the Wingate firm and $192,470 for the Friedman firm), it would hold a hearing on the issue of whether the Friedman firm had been discharged for cause. Wingate rejected this offer, and a hearing ensued. The Colons also instituted a separate action against the Friedman firm for malpractice in Kings County.

When an action is commenced, the attorney appearing for a party obtains a lien upon his or her client's causes of action, claims, or counterclaims. This lien attaches to any final order or settlement in the client's favor (Judiciary Law § 475). Nevertheless, a client has an absolute right to discharge an attorney. If the discharge is based upon misconduct, the attorney automatically forfeits all rights to compensation (see Teichner v W. & J. Holsteins, 64 NY2d 977, 979 [1985]). However, forfeiture of the fee occurs only where "the misconduct relates to the representation for which the fees are sought" (Decolator, Cohen & DiPrisco v Lysaght, Lysaght & Kramer, P.C., 304 AD2d 86, 91 [2003]).

In the case of a fee dispute between outgoing and incoming attorneys, the outgoing attorney has the right to elect either immediate compensation based on quantum meruit for the reasonable value of the services rendered, or a contingent percentage fee to
be determined at the conclusion of the litigation (see Lai Ling Cheng v Modansky Leasing Co., 73 NY2d 454, 458 [1989]; Matter of Gary E. Rosenberg, P.C. v McCormack, 250 AD2d 679, 679-680 [1998]; Schneebalg v Lincoln Sec. Life Ins. Co., 225 AD2d 684 [1996]). Where a firm has not elected to receive a fixed fee upon discharge, there is a presumption that the firm has instead chosen a proportionate share of a contingency fee (see Fernandez v New York City Health & Hosps. Corp., 238 AD2d 544, 545 [1997]).
Here, the IAS court erroneously concluded that the Friedman firm had committed misconduct warranting forfeiture of its fee. First, the court faulted the Friedman firm for failing to file a derivative claim on behalf of Mrs. Colon. However, the record reveals that Mr. Colon represented in his intake interview that he was single. Moreover, Mr. Colon's tax returns do not indicate whether or not he was married. Mr. Friedman explained at the hearing that he knew Mr. Colon had stated he was single on a Workers' Compensation claim, and that he was concerned that his client had made a false statement under oath. In light of these facts, it was entirely proper for the Friedman firm to not bring a derivative claim on Mrs. Colon's behalf.

Finally, the court faulted the Friedman firm for failing to timely file a retainer statement with OCA. This error, which appears to be ministerial in nature, was corrected. The Friedman firm filed the statement, which was accepted nunc pro tunc prior to the fee hearing, and had no effect upon the representation provided to the Colons.


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NJ Estate-Beneficiary Legal Malpractice Case

A recurring situation is the question of whether an attorney who prepares a will can be held liable to the estate or even more distantly, to the beneficiaries for work performed before the death.  Here ia a NJ case where plaintiff loses. CARL TORBAN, individually and as Executor of the Estate of Albie J. Torban and Lola R. Torban, deceased, v. OBERMAYER REBMANN MAXWELL & HIPPEL and KIMBERLY J. SCOTT .

The questions presented in this situation are whether there is priviity between the estate and the attorney and again, more distantly, whether the beneficiaries can sue the attorney.  Here, no.  In other situations, the attorney is then hired by the estate, and may committ malpractice post death. 

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Read about your Legal Malpractice Case in the Newspaper

New York newspapers don''t generally inform the public about civil trials.  The Madison Record regularly reports on civil cases, and from them we get this story:

"Brad Lakin didn't know that a federal judge in Oklahoma entered default judgment of about $4 million against his firm until he read about it in a newspaper, according to Gail Renshaw of the Lakin firm.

Renshaw moved June 6 to stay collection proceedings on the Oklahoma judgment in U.S. District Court at East St. Louis.

In April the Oklahoma court awarded $3,752,601.80 to former Lakin client Stephen Williams.

Williams claimed that James Gibson, an investor the Lakins recommended, stole most of the proceeds of his injury settlement.

On May 29, Williams asked the court in East St. Louis to examine Brad Lakin about his assets on an expedited basis.

According to Renshaw, Lakin read about the judgment May 30.

She did not identify the source, writing that he read it in "a local Southern Illinois newspaper."

The Madison County Record reported the judgment on its website that day. "

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Arbitration, The E-Street Band and Accountants

While not strictly legal malpractice, this case deals with arbitration of professional fees and accounting malpractice.  The kicker?  It involvs the E-Street Band drummer. 

"Gursey’s retainer agreement contained an arbitration provision that provided for mandatory arbitration of “[a]ny controversy, claim, or dispute relating to . . . unpaid fees for professional services.” Further, the arbitration clause provided that:

if Kathlynn should have any claims of professional malpractice against Gursey, she must raise such claims as a defense to Gursey’s arbitration action for unpaid fees
the only way that Kathlynn can bring an action in court against Gursey for accounting malpractice is if she (i) prevails in the arbitration (i.e., the arbitrator determines that Kathlynn does not owe Gursey any money), and (ii) the arbitrator does not limit Kathlynn’s relief to the amount of Gursey’s contended fees
if, however, the arbitrator determines that Kathlynn does not owe Gursey any money for its services, but that her malpractice claim does not exceed Gursey’s contended fees, Kathlynn “will be prevented from bringing the same contention in any separate civil action.”
In 2002, Kathlynn’s attorney negotiated a marital settlement agreement in which she gave up the rights to certain cash and virtually all of Danny’s E Street Band royalties. Kathlynn later believed that the settlement was extremely unfavorable and that Gursey was partly to blame. She refused to pay Gursey for its services.

In June 2003, Gursey initiated an arbitration proceeding against Kathlynn for unpaid fees. Kathlynn did not oppose the arbitration or raise a counter-claim for accounting malpractice. In July 2003, the arbitrator awarded Gursey over $29,000.

On February 10, 2005, Kathlynn filed a professional negligence complaint in California state court against Gursey alleging that due to Gursey’s malpractice, Kathlynn failed to receive any portion of significant assets in the marital settlement. Gursey filed a demurrer – California’s equivalent of a motion to dismiss – asserting that Kathlynn’s malpractice claim was barred by the doctrines of waiver and res judicata. Among other things, Gursey argued that the arbitration clause obligated Kathlynn to raise the malpractice claim during the arbitration, and her failure to do so effectively waived her malpractice claim. The trial court sustained the demurrer.

On appeal, Kathlynn argued that even if the arbitration provision required her to assert her malpractice claim in connection with the arbitration, such a requirement is unconscionable. The appellate court rejected this argument for two reasons. First, Kathlynn waived the right to argue “unconscionability” because she failed to do so during the arbitration. Second, even assuming that the arbitration provision was procedurally unconscionable (i.e., a contract of adhesion), Kathlynn also failed to show that the provision is substantively unconscionable (i.e., overly harsh or one-sided). Under California law, both types of unconscionability must be established to invalidate a contract.

The appellate court did not believe that Gursey’s arbitration clause was substantively unconscionable, because the arbitration agreement only required Kathlynn to arbitrate Gursey’s claim for unpaid fees. If such arbitration took place, Kathlynn was further obligated to assert any related malpractice claims as a defense/offset to Gursey’s claim for unpaid fees. The court believed that these requirements, by themselves, are not unconscionable. In reaching this conclusion, the court stated: “It is important to note, however, that the arbitration provision did not attempt to impose a monetary ceiling on a potential malpractice recovery; plaintiff did not contract away her right to receive a malpractice award exceeding her accountancy fees.”

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Deficient Papers and the Fix-Up Reply

We have all been faced with a motion that is not so well written or supported.  This case,Root v Brotmann, 2007 NY Slip Op 05353 ,Decided on June 19, 2007 ,Appellate Division, First Department  illustrates the principal that its not right to file deficient papers, and then try to paper over the holes with a reply.

Rule= no new arguments on reply.

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Qualcomm: Lawyers can make mistakes

This report of proceedings in the Qualcomm case is the exception to the rule of making no admission absent a gun to the head.  At stake are attorney fees in a huge patent case.

"“Lawyers can make mistakes,” said Bill Boggs, Qualcomm's new lead attorney in the case.
He explained how the San Diego company had failed to turn over 46,610 documents, totaling 332,101 pages, to Broadcom in the pretrial discovery phase and how Qualcomm had introduced misstatements of fact into the trial.

“It's not intentional,” he said. Later, Boggs said, “Mistakes were made. Documents should have been produced.” Irvine-based chipmaker Broadcom won the case by convincing a jury during a three-week January trial in San Diego federal court that it had not infringed on two of Qualcomm's video compression patents.

Ordinarily, Broadcom would be responsible for paying its own attorneys' fees – which likely run in the millions of dollars. But Broadcom lead attorney William Lee argued yesterday that the case was “exceptional,” a legal term that means a patent-infringement case was prosecuted in bad faith, with gross negligence or with misconduct, and therefore Broadcom was entitled to have Qualcomm pay the Broadcom attorneys.

“This is not, as Qualcomm has said, an innocent oversight, a common mistake or everyday litigation occurrence,” Lee said. "

Perhaps Qualcomm believes a small admission now will save big $$ later.

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Another Federal Deposition Sanctions Case

We recently reported on a federal deposition sanction case in which the attorney was sanctioned.  Here in Cameron Industries v. Mother Work plaintiff's attorney skirts ever so close to sanctions.  He helps out, answers questions for his client, and clariies endlessly.  No sanction, however.

"If an attorney concludes that a deposition "is being conducted in bad faith or in such manner as unreasonably to annoy, embarrass or oppress," application can be made to the court for relief. Fed.R.Civ. P. 30(d) (4). In order to ensure that this remedy will provide relief in an effective and practical manner, I invited counsel in this case, as I do in all cases in which I supervise discovery, to call my chambers for a ruling if they have a dispute at a deposition that they cannot resolve.

As any practitioner unfortunately knows, adherence to the foregoing rules rarely occurs.1

The conduct of plaintiff's counsel here was plainly inconsistent with the foregoing rules. The excerpts quoted above demonstrate that plaintiff's counsel volunteered information to the witness, made unnecessary, unjustified and unprofessional remarks concerning defendant's counsel, made unnecessary and suggestive speaking objections, improperly posed his own questions during defendant's direct examination instead of conducting cross-examination, contradicted the witness's testimony and issued instructions to the witness not to answer questions on the grounds of irrelevance. Plaintiff's counsel claims in his opposition to defendant's motion that his interruptions were necessary to insure an accurate record. This response, however, overlooks what should be obvious. The Federal Rules of Civil Procedure provide two mechanisms to correct or clarify deposition testimony, namely cross-examination and through submission to the witness for review. Fed.R.Civ.P. 30 (e). Since the Rules establish the procedures to be used to clarify or correct testimony, neither counsel nor the court are simply not free to ignore them and create new procedures based on personal preference.

Although plaintiff's counsel's conduct was improper and unbecoming, it does not, however, follow that an award of sanctions is appropriate. Under 28 U.S.C. §1927, an award of sanctions is appropriate when the offending attorney "essentially destroys a deposition through excessive groundless objections or lengthy personal attacks on his or her adversary." Am. Fun & Toy Creators, Inc. v. Gemmy Indus., Inc., 96 Civ. 799 (AGS) (JCF), 1997 WL 482518 at *8 (S.D.N.Y. Aug. 21, 1997); accord Sicurelli v. Jeneric/Pentron, Inc., 03 CV 4934 (SLT) (KAM), 2005 WL 3591701 at *3 (E.D.N.Y. Dec. 30, 2005), report & recommendation adopted by, 2006 WL 681212 (E.D.N.Y. Mar. 14, 2006); Morales v. Zondo, Inc., 204 F.R.D. 50, 54 (S.D.N.Y. 2001). Fed.R.Civ.P. 30(d) (3) provides that an award of sanctions is appropriate "[i]f the court finds that any impediment, delay, or other conduct has frustrated the fair examination of the deponent."

I have reviewed the transcripts of the Waldman and Khayyam depositions in their entirety. Although some of the conduct of plaintiff's counsel is indefensible, his conduct cannot accurately be described as destroying either deposition or as frustrating the fair examination of the deponents."

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NJ Legal Malractice Case Pits Doctor v. Lawyer v. Grand Jury

The facts of thiscase are sad. DR. GARY SAFIER, Plaintiff v.  WALDER, SONDAK & BROGAN, P.C.,

Doctor knowingly prescribes narcotics to a wealthy addict for years, and nets a hue of money for doing so.  Another doctor turns him in, and he ends up working his way into a diversion program.  His attorneys save the doctor's license, and then sue for their unpaid fees.

Doctor resists, sues for legal malpractice and for a number of interesting reasons, loses. One reason for losing is his repeated habit of not paying lawyers and experts.  When the fee arbitration goes sour, he sues his next set of attorneys.  Not only does he lose there, but he is assessed $ 36,000 in sanctions, which is eventually washed away.

"As a final matter in this regard, we reject Dr. Safier's position that, as "malpractice" defendants, the Ambrosio firm bore the burden of establishing the reasonable nature of the Walder defendants' bill. This position would be correct if the dispute were directly with the Walder defendants. Cohen, supra, 146 N.J. at 156. However, this was not such a dispute, but rather, a malpractice action against attorneys whose services did not encompass the work that was the subject of the disputed bill. Dr. Safier has offered no precedent that would suggest the customary burdens of proof applicable to a legal malpractice action would be reversed in this double-tiered malpractice suit, simply because excessive billing was claimed in the underlying matter. "

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Walk out, Stalk out of a Deposition

Quinn Emanuel reports this case:  In a federal legal malpractice and section 1983 case, plaintiff's attorney asked deposition questions of defendant which were intended to harass.  Defendant's attorney told his client not to answer, and ran afoul of the 7th circuit.  They said he should have walked out and moved for a protective order.

"During a deposition, plaintiff ’s counsel asked a witness whether he had ever been “ordered to obtain psychiatric counseling or anger-management therapy.” The lawyer also asked whether the witness had ever engaged in homosexual conduct or been in any type of “homosexual clique with any other defendants” in the action. Id. at 468. The attorney defending the deposition instructed the witness not to answer on the basis that the questions were designed to harass. Id. Plaintiff then moved for sanctions based on the refusal to answer questions.

The district court concluded that “everyone had behaved badly and that, because [plaintiff ’s counsel] was the greater offender, no sanctions would be appropriate.” The district judge added that under the circumstances it was “ludicrous” for plaintiff to argue that “lawyers may not instruct witnesses not to answer.” Id. at 469.

The Seventh Circuit agreed that the questions were, undoubtedly, designed to harass, that plaintiff ’s counsel made no effort to establish how the lines of questioning could lead to admissible evidence, that the witness “would have been entitled to stalk out of the room,” and that his lawyer “could have called off the deposition and applied for a protective order (plus sanctions).” Id. at 468. The court, nonetheless, censured the deponent’s attorney for conduct unbecoming a member of the bar. As the Seventh Circuit explained, when there is harassment, “[c]ounsel for the witness may halt the deposition and apply for a protective order” pursuant to Federal Rule of Civil Procedure 30(d)(4). But he “must not instruct the witness to remain silent.” Id. at 467-68. Instead, “[a] person may instruct a deponent not to answer only when necessary to preserve a privilege, to enforce a limitation directed by the court, or to present a motion under Rule 30(d)(4).” Id. The Seventh Circuit made clear that this bright line rule applies no matter how outrageous or harassing the line of questioning. "

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Vegas Vomit Legal Malpractice Case

We have often thought that plaintiff''s litigation is a high level gamble.  Meeting the client, evaluating the case, gathering the materials, bringing the action and engaging the opposition are the similar to sitting down at a poker table.

Here is a case to the nth power.  Casino patron walks in, slips