New York Attorney Malpractice Blog

The relationship between a motion to dismiss [CPLR 3211]. a request to amend the pleadings, and dismissal on the merits is wrought with both emotion yet is based upon logic.  No author of pleadings appreciates a motion to dismiss.  The motion generally brays that there is "no merit", the pleading is "frivolous", is badly written, etc.

Yet, the rule of logic generally prevails.  A pleading in legal malpractice  must adequately plead that the defendants "failed to exercise that degree of care, still, and diligence commonly possessed by a member of the legal community," and that their negligence was "a proximate cause of damages" (DeNatale v Santagelo, 65 AD3d 1006, 1007), and,is sufficient to state a cause of action to recover damages for legal malpractice.

"[M]otions for leave to amend pleadings should be freely granted, absent prejudice or surprise directly resulting from the delay in seeking leave, unless the proposed amendment is palpably insufficient or patently devoid of merit" (Aurora Loan Servs., LLC v Thomas, 70 AD3d 986, 987; see CPLR 3025[b]; Tyson v Tower Ins. Co. of N.Y., 68 AD3d 977, 979; Peerless Ins. Co. v Micro Fibertek, Inc., 67 AD3d 978, 979-980).

And so it went in Feldman v Finkelstein & Partners, LLP ,2010 NY Slip Op 06517 ,Decided on August 31, 2010 , Appellate Division, Second Department , a legal malpractice case.  "Contrary to the defendants' contention, there is no indication that the Supreme Court considered evidentiary submissions and, thus, the issue to be determined at this stage is not whether the plaintiffs have a cause of action, but only whether they have stated one (see Guggenheimer v Ginzburg, 43 NY2d 268, 275; Sokol v Leader, 74 AD3d at 1181-1182). Accordingly, the Supreme Court improperly granted that branch of the defendants' motion which was to dismiss the first cause of action. "
 

TJS of N.Y. Inc. v. Koppelman, 2010 NY Slip Op 32329(U), by Justice Denise F. Molia of Supreme Court, Suffolk County is something of a cliff-hanger.  When we read it, there was no foreshadowing, no pre-tensioning nor any insight into how the decision would come out.  it's a classic didhedoit.

Plaintiff claims a longstanding relationship with attorney defendant.  The two of them and others seem to have been in and out of business in the vending and bar areas.  In this case, plaintiff eventually bought a bar, and assumed what he thought was going to be debts of $ 40,000 or so.  it turned into $1 million.  Question:  was the defendant his attorney or not?

In the end, this summary judgment decision went against defendant, and the motion was denied.  Plaintiff's affidavit seems to be the turning point, especially when it was dotted with several troubling deposition answers by defendant and a few inconvenient facts.

Plaintiff said that he used defendant as an attorney several times over the years, building up a relationship.  Defendant says no, but testified that he may have undertaken an incorporation in which plaintiff was a shareholder.  Plaintiff says that he paid defendant in cash, and defendant says that when he wrote the bar contact that plaintiff may have had some input into the terms.

Plaintiff says that defendant represented him in the transaction, but defendant says that one Navaretta was plaintiff's attorney.  Inconveniently, defendant sent the contract of sale directly to plaintiff, bypassing the "attorney."  An so it goes, with "facts" that cannot be conclusively found.

In the end, motion for summary judgment denied.

We grant that it is a stretch to jump from new statutes to legal malpractice, but it is a given that when the rules change, there will be mistakes made.  Mistakes, the eternal produce of human endeavor is known as legal malpractice within the legal community. 

It is no novelty, nor a surprise that negligent handling of discovery might lead to dismissals and sanctions.  U.S. Judge Shira Scheindlin's decisions in Zubulake v. UBS Warburg  and Pension Committee are considered groundbreaking, yet merely restate and interpret the existing law. 

Parties in litigation are required to save and exchange electronically stored information.  No clearer message could be stated in the twin decisions.  Now, the State of New York has adopted a set of regulations which are calculated to streamline the discovery proceedings.

Preliminary conferences now must include a complete discussion of ESI, and provisions must be made to preserve and  exchange ESI.  Failures by attorneys to issue "litigation holds" and to preserve ESI will inevitably lead to problems, sanctions and dismissals.  Legal malpractice litigation will follow, as surely as day follows night.

Legal representation in even simple matters can lead to unintended consequences. As an ExampleH & J Restaurant v, A & J Grand Enterprises and Leigh, 2009 Slip OP 31544, authored by Justice Edmead, demonstrates how a simple ministerial mistake can end up with a potential $ 400,000 loss, with later judgment against the attorney.

It's a simple transaction, A buys a restaurant from B. As might be expected, Seller exaggerates the sales, or hides underpayment of taxes. Since these commercial transactions have taken place since time immemorial, there are safeguards and protections. Buyer can take the business free of personal liability if it notifies the tax authorities 10 days prior to the sale, in which case the tax authorities have 5 days to assert tax liability. Should it happen, buyer can then back out.

Here, the notification was not made within 10 days, and several months later the tax authorities asserted personal liability to buyer in the neighborhood of $ 400,000. Seller is in default, and no where to be found.

What is the lesson here? Lesson 1: Legal malpractice is everywhere lawyers represent clients. Lesson 2: Know the subject matter of your area of law and don't make simple transactions difficult. Lesson 3: Review lesson 2.
 

It's not exactly legal malpractice and its not New York, but the headline and back story of this $ 1.96 Million sanction to Paul, Weiss, Rifkind, Wharton & Garrison and Lowenstein Sandler shocks the eye.  Celebrity sues celebrity over an oral agreement to make a bequest.  This case ends in a finding of frivolity and the largest sanction we remember seeing.  Here is the story from Law.Com:

 "Bergen County, N.J., Superior Court Judge Ellen Koblitz doesn't seem too worried about sparing the reputations of Paul, Weiss, Rifkind, Wharton & Garrison and Lowenstein Sandler. In June, you'll recall, she found that the two firms had filed a frivolous suit on behalf of billionaire Ronald Perelman in a family dispute over hundreds of millions of dollars. On Friday she issued a final opinion , rejecting the firms' arguments for mercy and ordering them to pay $1.96 million in legal fees to the defendants, Perelman's former father-in-law and brother-in-law.

Patent Litigators held their breath all through the summer, as the Supreme Court considered whether a patent could be enforced in the Internet process area.  Bilski v. Kapos was decided by terms end, but did not really put the issues to bed. 

Apparently, while others were holding their breath, this plaintiff/client and her attorney were starting their own litigation cycle.  As Law.Com reports dueling suits in Westchester and New York bring up the question of whether the attorneys abused plaintiff in their billing while representing her in patent litigation.

"A retired university professor who has pursued dozens of electronics companies for patent infringement on Monday filed a notice to sue her former attorneys for $10 million, accusing them of misusing escrow funds and charging her excessive fees.

Gertrude Neumark Rothschild filed a summons in Manhattan Supreme Court against Troutman Sanders; an intellectual property boutique chaired by Albert L. Jacobs Jr. before he became a partner at Troutman; and Jacobs.

Her motion comes only days after Troutman, Jacobs and the now-defunct boutique filed separate lawsuits against her in Westchester County Supreme Court for a combined $4.4 million in unpaid legal bills. Rothschild said in her court papers that she fired Troutman Sanders for cause in June.

Jacobs began representing Rothschild, a former Columbia physics professor, in October 2007 after arriving a few months earlier at Dreier from Greenberg Traurig, according to his boutique's complaint. Rothschild retained him to represent her before the International Trade Commission in cases against companies importing devices using light-emitting diodes that she claimed infringed on patents she held.

Rothschild turned to Jacobs for later disputes both in the United States and abroad, his complaint said. Among those Jacobs targeted for Rothschild were Sony Corporation, Motorola Inc. and Hitachi Ltd. and 31 other companies, according to records filed in February 2008 before the U.S. International Trade Commission.

By November 2009, when Jacobs formally became a partner at Troutman Sanders, he had obtained $14 million in settlements and licensing fees for Rothschild, according to the boutique's complaint, which said settlements and agreements came from 10 large consumer electronic companies.

Rothschild paid Albert Jacobs LLP on some of its invoices, "but has failed and refused" to pay other ones, the boutique said in its complaint. She "never expressed any dissatisfaction with the legal services" the boutique rendered, the suit claimed, but instead "commended" its efforts. "

Sanna v Polizzotto ;2010 NY Slip Op 51496(U) ;Decided on August 23, 2010 ;Supreme Court, Richmond County ;Minardo, J.  discusses several interesting aspects of legal representation, contingent fees, what is unconscionable in contingencies, and legal malpractice.
 

Plaintiffs and their family were in a dispute over property.  Attorneys were retained to represent one of the feuding sides, and successfully concluded the case with a cooperative effort to sell the property and divide the proceeds.  All good, so far.  The rub occurs when fees come into play.  Attorneys:  we offered to do this on an hourly basis.  Client could not pay, so we went to a contingency.  Client:  25% is way too much!

In this decision, the court considered:  how large may a contingency be and what must plaintiff do when they enter into a contingent fee arrangement with the attorneys? 

"According to the retainer agreement, plaintiffs had agreed to pay defendants as consideration for their legal services "twenty-five (25%) of the property or sum recovered, whether recovered by suit, settlement or otherwise" (see Defendants' Exhibit "E", emphasis supplied).

On the basis of these facts, plaintiffs commenced this action against the defendants on or about April 22, 2008 asserting causes of action for conversion, breach of contract, fraud, breach of fiduciary duty and punitive damages, each arising out of their retainer agreement with defendants and the amount of the legal fees payable thereunder "
 

"Attorney-client fee agreements are a matter of special concern to the courts and, while enforceable, are affected by "lofty principles" different from those applicable to commonplace commercial contracts (Law Off of Howard M. File, Esq., PC v. Ostashko, 60 AD3d 643, 644 [2nd Dept 2009] quoting Matter of Cooperman, 83 NY2d 465, 472 [1994]; Malamut v. Doris L. Sassower, PC, 171 AD2d 780 [2nd Dept 1991]). "

"Contingent fee agreements between attorneys and their clients generally operate to allow a client without sufficient financial means to obtain access to the justice system (see Law Office of Howard M. File, Esq., PC v. Ostashko, 60 AD3d at 644). However, for attorneys entering into such arrangements, there is always the risk that their time and resources will be expended in the pursuit of legal endeavors that may ultimately prove fruitless (see King v. Fox, 7 NY3d 181, 192 [2006]). In addition, it is well settled that while the attorney is obligated to comply with the terms of the agreement, the client may unilaterally terminate the contingent fee arrangement at any time, leaving the lawyer with no cause of action for breach of contract and a recovery limited to quantum meruit (id.). Case law also provides that circumstances arising after contract formation can render a contingent fee agreement unenforceable, even though it was not unconscionable [*3]when entered into, e.g., where the agreed percentage of the recovery allocated to legal fees is deemed disproportionate to the value of the services rendered (see Lawrence v. Miller, 11 NY3d 588 [2008]). In this regard, it is not only the agreed-upon percentage of the recovery that can render a contingent fee agreement unconscionable."

"Assuming arguendo that the defendants have demonstrated prima facie that (1) the legal services which they performed on the plaintiffs' behalf were rendered in good faith; (2) plaintiffs knowingly accepted those services; and (3) they were fully informed of the terms of the contingency, plaintiffs' present assertion that they did not fully understand its terms is insufficient to generate a triable issue. There is no evidence to indicate the plaintiffs are under some type of disability which would prevent them from understanding a one (1) page retainer agreement which clearly and unambiguously indicated it was a 25% contingency agreement whether recovered in suit, settlement or otherwise."

In Brackman v Medical Liab. Mut. Ins. Co. ; 2010 NY Slip Op 51432(U); Supreme Court, Nassau County , Winslow, J. we see an unusual but doctrinaire situation in which a doctor sues his defense attorneys for settling a case in which he was sued.  The decision lays bare the method by which medical malpractice insurers settle cases.  if the carrier wants to settle and the doctor does not [and there is a consent provision in the policy], then the parties engage in binding arbitration over whether to settle the case with plaintiff or not. 
 

In two different actions, Brackman was sued for medical malpractice.  MLM wanted to settle both; he did not want to settle either.  After an arbitration in one, that case was settled.  An arbitration is scheduled, or has been held, in the other.

"Although the pro se complaint is not a model of clarity, Brackman alleges in relevant part that MLM: (1) breached the policy since it allegedly had no right to compromise either the Jones or the Diresta malpractice claims without his unconditional consent; (2) that the Angel defendants committed legal malpractice and breached their fiduciary duty in the Jones action; and (3) both MLM and the Angel defendants conspired together to bully, coerce and pressure Brackman into accepting the proposed settlement over his objection in the Jones case (Cmplt., ¶¶ 37-38, 45-48). There is no allegation made, to the effect that the Jones arbitration proceeding was corrupt and/or that the decision reached by the medical advisor was made in bad faith. "

"With respect to damages, the plaintiff maintains that by virtue of defendants' wrongful conduct and MLM's cancellation of his malpractice coverage, he was forced to close his New York practice. Moreover, he lost income and sustained emotional distress since he was unemployed for some six months and could not secure "traditional" medical malpractice insurance — although he eventually secured a license and surgery privileges in, inter alia, Florida (Cmplt., ¶¶ 15, 17-18, 32).

"It is settled that malpractice claims grounded upon contingent or hypothetically projected injuries are generally insufficient to establish liability (Bauza v. Livington, supra; Brooks v. Lewin, supra, at 734-735; Pellegrino v. File, 291 AD2d 60, 63). Indeed, while the plaintiff alleges, inter alia, that the Angel defendants' conduct was coercive and that he was damaged thereby, the plaintiff's pleaded factual claim is that, in fact, he never succumbed to any alleged pressure or coercion(Cmplt., ¶¶ 37, 45-48). Rather, he alleges that he refused to consent and that his injuries flowed from MLM's decision to refer the matter to a medical [*8]advisor over his express objection.

Nor does the complaint contain anything other than vague factual allegations supporting the theory that the delays supposedly generated by the Angel defendants were causally related to, or facilitated, MLM's subsequent decision to refer the Jones dispute to a settlement medical advisor (e.g., Cmplt., ¶¶ 15, 34). "

Bankruptcy and legal malpractice have a special relationship.  There are special rules, there are collateral estoppel dimensions to fee requests, and the mere filing of bankruptcy may end a plaintiff's right to a cause of action.  Here, in GREENSTREET FINANCIAL, L.P., against- GREENSTREET FINANCIAL, L.P.,  UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; 2010 U.S. Dist. LEXIS 84827 we see  the principal that all elements of a legal malpractice case, incliuding damages must be in place before the case is ripe.

"In the instant case, "actual damages" have not been determined, since judgment has not been entered against Smul and the Smul Trust in this action, and, according to the fourth-party defendants, litigation is also pending in Florida, that might affect the amount, if any, for which Smul is liable to the plaintiff and/or the third-party plaintiffs. Therefore, to the extent the fourth-party defendants move for summary judgment, their motion must be denied, without prejudice, as premature, since the issue of "actual damages" has not yet been determined. See id. at 214 (finding that adjudication of a legal malpractice claim was "premature" when the plaintiff could not "establish actual damages absent a final judgment or resolution in the still pending controversy"). As a result, the fourth-party defendants' request, that the claims [*7] made against them in the Fourth-Party complaint be stayed, pending resolution of the claims against Smul and the Smul Trust, is granted. See id (noting that "a legal malpractice claim may not be asserted until the matter on which the claim is based has been concluded," and determining that the legal malpractice claim would be tried after a verdict was rendered, if still appropriate). The motion to sever is denied, as moot."

It being a Friday in the Summer, we bring you legal malpractice news from the Jersey Shore, by way of Law.Com.  Legal malpractice issues arise wherever attorneys represent clients.  Clients sometimes bear some portion of the blame when cases/transactions go sour.  Here is a description of one, from Law.Com.

Charles Toutant writes: "Warning clients of their own duty to read critical documents, a New Jersey appeals court held Wednesday that a malpractice suit over Sills, Cummis & Gross' drafting of a bank-merger agreement was time-barred and meritless.

The panel found in Sullivan v. Sills, Cummis, Zuckerman, Radin, Tischman, Epstein & Gross, A-4805-07, that the plaintiffs were experienced in the world of banking and failed to follow their lawyers' advice to look over the agreement.

At issue was the suit by four directors of the former West Jersey Community Bank in Fairfield, N.J., who claimed they were shortchanged when Sovereign Bank of Wyomissing, Pa., bought their institution in 1995. They said their lawyers failed to incorporate into the merger agreement Sovereign's oral promises to form a post-merger advisory board and, as a result, the plaintiffs lost out on stock options and fees they would have received from serving on the board.

The bank retained Sills Cummis in 1995 to represent it in the Sovereign negotiations. Soon after, the law firm instructed the plaintiffs and other board members in a letter that their duty of care included "carefully reviewing all documents and other items presented" and that "blind reliance on the opinions of legal or financial advisors without independent fact gathering or decision-making" was "viewed unfavorably by courts."

The merger agreement was approved on Sept. 29, 1995. It called for formation of the advisory board and for members of that board to receive stock options if the bank were to adopt a stock option plan for its main board of directors.

But Sovereign never formed the advisory board, and when it created a stock options plan for its board of directors in 1997, it never gave that benefit to the plaintiffs -- John Sullivan, Peter Stewart, Raymond Durkin and Leonard Schneider.

In December 1999, the plaintiffs and two other former West Jersey directors sought to enforce the oral promises in a suit against Sovereign in federal court in Newark. Sovereign moved for dismissal for failure to state a claim on which relief could be granted, and the case was dismissed in January 2001.

The plaintiffs then filed their malpractice suit against Sills Cummis and lawyers Steven Gross, Frederick Tudor and Victor Boyajian on Jan. 21, 2003. Hudson County Superior Court Judge Maurice Gallipoli granted summary judgment to the defendants, finding the suit time-barred and meritless."

In Garnett v. Fox Horan & Camerini LLP the unusually but by no means novel situation arises where a "liquidating trustee" sues the debtor's pre-petition attorney for acts that may have led to the Chapter 11 bankruptcy.  Here, in a decision by Justice Jane Solomon, of Supreme Court, New York County

Boylan International, Inc. was an entity that ran into trouble.  It was assessed with additional rent in the nature of tax escalation costs and hired Fox Horan to litigate the $ 275,000 issue.  The law firm did so for three years which ended in a stipulation of settlement.  Shortly thereafter, Boylan filed for Chapter 11 relief and the trustee determined the settlement to be improvident and onerous.  The stipulation was vacated and a new arrangement made with the landlord.

Supreme Court found the legal malpractice claim to be that "a better lawyer would have been able to eliminate the increased amount of tax escalation rent.  that claim is unsound, and defeats the malpractice claim."

Landau P.C. v. Goldstein is the latest chapter in the Morris Eisen saga.  Once king of the Woolworth Building, Morris Eisen PC was perhaps the largest/most powerful plaintiff's personal injury law firm in NYC.  The firm had a full floor there, comprising half a city block.  Mornings (6am) saw a gathering of trial attorneys having breakfast and being sent to the boroughs, inner and outer each day for a new multi-million dollar trial.

It ended badly, of course, with disgrace and jail.  But, attorney fee litigation, resilient and agile as money its self, lives on.  Here, some 15 years after the disgrace, is more litigation over division of fees.

"Defendant Lloyd F. Goldstein ("Goldstein") moves for an order dismissing this action, with prejudice, on the grounds that it is time barred. He also seeks costs and sanctions. The underlying complaint claims that prior to the time, Morris J. Eisen ('Eisen"), an attorney, was disbarred from practicing law in 1992, he referred certain cases to Goldstein, pursuant to an understanding that Goldstein would pay Eisen a "percentage of the legal fees earned as remuneration for [Eisen's] uncompensated work, disbursement expended, labor and services performed in connection with said cases prior to the disbarment of [Eisen]." Eisen and his alleged successor in interest have asserted causes of action for breach of contract (first cause of action), unjust enrichment (second cause of action), under Judiciary Law §475 (third cause of action) and an accounting (fourth cause of action). Goldstein interposed an answer denying the material allegations of the complaint and asserting various affirmative defenses, including the statute of limitations.

The parties agree that a six year statute limitations applies in this case. They differ on when the statute of limitations accrued. Goldstein argues that these matters date back 20 years or more and are therefore barred by the applicable statute of limitations. Plaintiffs, however, are no strangers to this issue, having litigated it in at least one prior case brought by them against other attorneys. The rule of law is that the statute of limitations for the breach of contract claims accrue when defendants received fees for the referred cases and refused demands for payment and that the statute of limitations for any quantum meruit recovery began to run when such cases were disposed of. Eisen v. Feder, 47 AD3d 595 (1s dept. 2008).

At bar, the only demand for payment was made to Goldstein by letter dated January 10, 2003. The demand included some, but not anywhere near the number of, cases that are the subject of he underlying action. The action was brought within six years of the demand. Consequently, the first cause of action, for breach of contract, is not barred by the statute of limitations. Goldstein argues that the demand itself was made many years after the alleged operative events. This argument may go to Goldstein other defenses, like laches, (see: Charles v. Charles, 296 AD2d 547 [2nd dept. 2002]; Bailey v. Chernoff, 45 AD3d 1113 [3rd dept. 2007]). It does not affect the accrual of the statute of limitations."

Ableco Finance LLC v. Hilson,  Ippolito and Paul, Hastings, Janofsky & Walker LLP; Supreme Court, New York County, [Justice Kornreich ]is a case we reported on last year.  Now, Justice Kornreich has dismissed some parts of the case, and retained some other causes of action.  "1This malpractice action arises from a 2008 transaction in which plaintiff, Ableco Finance LLC (Ableco), retained defendant attorneys, John F. Hilson and Mario J. Ippolito, and their law firm, defendant Paul, Hastings, Janofsky & Walker LLP, (collectively, Paul, Hastings) in connection with a loan transaction. Defendants now move to dismiss the First Amended Complaint (seq. no. 002) pursuant to CPLR 3211(a)(1) (documentary evidence) and (a)(7) (failure to state a claim)."
 

"Paul Hastings has not shown, with conclusive documentary evidence, that it accurately advised Ableco regarding the terms of the underlying acquisition documents and their impact on the security for its Loan. Any negligence on the part of Ableco in reviewing the underlying documents is merely a factor to be assessed in mitigation of damages. See Arnav Indus. Inc. Retirement Trust v. Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 305 n2 (2001). Ableco's additional allegations of attorney negligence also are sufficient. According to the complaint, Paul Hastings advised Ableco that it was not necessary to include, in the Funds Flow, a certification that the borrower (BH) would have merchandise "having an aggregate Cost Value…of no less than $183,700,000 immediately after giving effect to the Acquisition," because it was already a condition of the LC Letter. ¶31, Ex. E. Questions of fact remain as to the "aggregate cost value" of the S&B assets that BH did acquire.

Further, it is not incontrovertible that Ableco understood, or should have understood, from the Agency Agreement and the APR, that S&B would retain control over certain credit card receivables. It is apparent from statements by Ippolito in a November 21, 2008 e-mail that Paul Hastings was unaware of this fact prior to the Loan closing. The first Security Agreement specifically provides that Ableco has a security interest in BH's accounts, its interest in any Deposit Account, and General Intangibles, "whether now owned or hereafter acquired." S&B thereafter exercised control and took credit card receivables from accounts in which Ableco alleges it had a security interest. Questions remain as to whether Paul Hastings was negligent in not being aware that S&B had the right to do this and in failing to disabuse Ableco of the notion that the Security Agreement somehow protected its interest in ensuring that credit card receivables deposited into these accounts would be used to repay the Loan."

"Paul Hastings argues that Ableco has not sufficiently pled that its attorneys' negligence proximately caused it specific damages. Ableco, however, has repeatedly alleged that if Paul Hastings had properly advised it (as to matters discussed above), then it would not have closed on the Loan and would not have lost $55 Million, including the monies taken by S&B. This is sufficient. A complaint for malpractice need allege only that the defendants should have been able to foresee that some injury might result from their acts [see Singer v. Jefferies & Co., Inc., 160 AD2d 216, 219 (1st Dept 1990)],and that "but for" their negligence, the alleged loss would not have been suffered. See Fielding, 65 AD3d 439-440 (reversing dismissal of malpractice complaint where plaintiff alleged that but for attorney negligence in failing to advise of certain tax consequences in signing stipulation, plaintiff would not have suffered damages). "Specific" damages need not be pled. It is sufficient if some injury can reasonably be inferred from the attorney's conduct. Id."

We report mostly on New York cases, but on ocassion, our net is more widespread.  Today, a story from Massachussets.  Its a big number legal malpractice case in which no appeal was filed.  From Law.Com and Sheri Qualters at The National Law

"Massachusetts' high court has ruled that Jackson Lewis and Winokur Serkey & Rosenberg of Plymouth, Mass. are liable for a $1 million-plus verdict against a telecommunications company in an employment discrimination case.

On Aug. 9 in Global NAPS Inc. v. Awiszus, the Massachusetts Supreme Judicial Court ruled that Global NAPS could recover damages from its former attorneys and their firms for missing the deadline for appealing a jury verdict in an the case. Martha Awiszus of Winokur Serkey and David Kerman of Jackson Lewis' Boston office were Global NAPS' lawyers on the case.

Global sued the lawyers and firms for negligence, breach of contract and loss of chance.

Sandy Stephens, a former housekeeper for Global NAPS, originally sued the company alleging a violation of the Massachusetts Maternity Leave Act because the company fired her while she was on maternity leave.

State law requires eight weeks for maternity leave, but Stephens alleged that a company supervisor told her she would receive two additional weeks if she gave birth by Caesarean section.

Guidelines issued in April 2000 by the Massachusetts Commission Against Discrimination on the state's maternity leave law called for employers to notify workers in writing if the company does not intend to offer full maternity leave rights for more than eight weeks.

The jury's July 2004 verdict against Global totaled more than $2.5 million, including punitive damages. "
 

It's rare, but here is a case in which plaintiff was granted summary judgment against the target attorney in a legal malpractice case.  in Anne Koplick Designs, Inc. v Lite ; 010 NY Slip Op 06356
Decided on August 10, 2010 ; Appellate Division, Second Department .  In its short, but stark decision the Second Department writes:\

"Here, the plaintiffs made a prima facie showing of their entitlement to judgment as a matter of law on the issue of liability (see CPLR 3212[b]; Yiouti Rest. v Sotiriou, 151 AD2d 744, 745). In support of their motion, the plaintiffs submitted an expert affirmation of an attorney establishing that the defendant Justin N. Lite failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession by, among other things, advising the plaintiffs to default in a lawsuit commenced against them in California and advising them that a default judgment obtained in California would not be enforceable in New York, a clearly incorrect statement of the law (see Logalbo v Plishkin, Rubano & Baum, 163 AD2d 511; Yiouti Rest. v Sotiriou, 151 AD2d at 745). The plaintiffs' submissions also established that, but for the defendants' malpractice, they would have succeeded in defending the underlying claim. In opposition, the defendants failed to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324)."
 

It may be too late to sue, which implicates the statute of limitations.  Then again, it may be too early to sue,  Why would one bring an action too soon?  The answer is that sometimes time could run out before events can support a legal malpractice case which will mature later.  Here is an example from Law.Com and Gina Passarella atT he Legal Intelligencer
August 02, 2010

"Wolf Block and a number of former partners are seeking a stay of a legal malpractice lawsuit brought against them by car dealership owner Alan Potamkin over the firm's drafting of a prenuptial agreement.

Potamkin is in the midst of a divorce action in Florida in which the validity of the prenuptial agreement has been brought into question. He entered a tolling agreement with Wolf Block to toll the statute of limitations while his attorneys as well as lawyers for Wolf Block attempted to enforce the prenuptial agreement in the divorce action. When the Florida judge denied summary judgment on the issue and ruled discovery of assets should continue, Potamkin filed the complaint in the malpractice case in Philadelphia Common Pleas Court.

Wolf Block, through its attorney, Nicholas M. Centrella of Conrad O'Brien, requested the Philadelphia court issue a stay in the malpractice action until the divorce is finalized.

In denying summary judgment, the Florida court ruled the prenuptial agreement does not conclusively establish that either party waived equitable distribution of the assets. Wolf Block now counters that the Florida ruling was "simply an interlocutory ruling" that denied summary judgment and did not determine the legal effect of the prenuptial agreement.

"At the present time, therefore, plaintiff cannot establish the essential elements of his claims beyond piecemeal allegations of purported damages based on what has transpired thus far in the divorce action," Wolf Block said in its motion. "Until the Florida court enters judgment assessing damages, if any, against plaintiff in the divorce action on the basis of its interpretation of the prenuptial agreement and post-trial remedies are pursued to completion, the scope of plaintiff's claims and the alleged damages he purportedly suffered will not be known."

Wolf Block said in its motion to stay and supporting brief that it understood Potamkin had to file the suit before the completion of the divorce action because of statute of limitations concerns. But it said the state Supreme Court's 1993 opinion in Bailey v. Tucker allows for the defense to file preliminary objections and seek a stay, at which point "the trial court shall then reserve its ruling" until resolution of the underlying action"
 

This case Tavarez v Hill ;2009 NY Slip Op 29002 ;Decided on January 5, 2009 ;Supreme Court, Bronx County ;Victor, J. recently partially decided covers two areas. The first area is disqualification of counsel because of multiple representation of four car accident victims, all in one car. "Should the court, sua sponte, stay the motion made for summary judgment until there is a final resolution of a potential "conflict of interest" issue arising from plaintiffs' counsel's representation of multiple parties in the same action? "

"The court's records reflect that no additional motion on the issue of liability has been made; and thus, there is a meaningful risk that counsel for plaintiffs may be burdened with a conflict of interest, since the issue of liability of each driver is yet to be determined, and, in this proceeding, the passenger plaintiffs may have interests adverse to those of their driver."

"An attorney who chooses to represent multiple parties in the same action will risk being held to have violated the Code of Professional Responsibility (and its applicable Disciplinary Rules); as well as sanctioned for having engaged in a conflict of interest; and in addition thereto, suffer the indignity and cost of becoming a defendant in a malpractice action. "

The second area is shortcomings in opposition to a motion for summary judgment. "In support of the motion, the defendants have submitted, among other things, numerous affirmations from physicians in various specialties. In opposition, counsel for the plaintiffs has submitted only unaffirmed medical reports and test results; and in adddition, failed to address arguments made by the defendants as to "gaps in treatment" and the failure to provide evidence of "recent" examinations supporting the serious injury claims made by each said plaintiff. "

Guardians, Referees and other court appointees have a qualified immunity to suit.  At a bare minimum, permission from the court is required before bringing suit.  Here in Cangro v. Solomon Justice Edmead of Supreme Court, New York County sets forth the rules in three areas:  suing guardians, privity and an eventual requirement that permission be sought before suing either of these attorneys again.

Phyllis C. Solomon, Esq. was retained as attorney for  guardian to plaintiff in a 2001 matrimonial action.  She was tasked with the question of whether the proposed Stipulation of Settlement between plaintiff and her husband appeared to be fair to plaintiff.  Her answer was yes.

Plaintiff then sued Solomon on a number of theories, all in the nature of fraud and misrepresentation.  That law suit was dismissed, on the basis that no permission to sue was obtained before commencing an action against the guardian and its appointees,  and on appeal, plaintiff's appendix was struck.

Plaintiff then sued Solomon and her attorney in that proceeding.  The attorney, Ms. Shepps, was sued in her individual capacity, and the law firm was not named.

Justice Edmead determined that there was no privity between Solomon and Plaintiff, that the action was time barred, and that litigation against plaintiff's guardian or the guardian's agents cannot proceed without court permission. pursuant to section 1(H) of Part 36 of the Rules of the Chief Judge.

All of this ended with an order that plaintiff may not file any future actions against defendants or the respective law firms without prior permission of the administrative judge

One may lose the right to bring a legal malpractice case based on earlier attorney fee dispute resolution. In this case , Margrabe v. Sexter & Warmflash, PC, 07-CV-2798, District Judge Kenneth M. Karas, SDNY, we see just how the process operates. Plaintiff retains attorneys to represent her in a shareholder derivative matter. Attorneys were successful in obtaining a significant amount of money for her, but from then on things went badly. Attorneys were terminated, fees were disputed, escrow accounts started, and a defamation action commenced over the termination letter. Eventually the attorneys smartly started an attorney fee dispute action under Judiciary Law 475, and were awarded fees. This was the end of the issue, although plaintiff did not yet know it.

From the Court: "Plaintiff claims that Defendants failed to exercise the degree of skill and knowledge commonly possessed by members of the legal profession in their representation of her in the Rusciano Lawsuit. (Compl. ¶27.)

In the R&R, Magistrate Judge Yanthis recommended that the Court grant Defendants' Motion to Dismiss Plaintiff's legal malpractice claim on res judicata and collateral estoppel grounds. (R&R 4-5.)

Although Plaintiff initially objected to Magistrate Judge Yanthis's recommendation (Pl.'s Objections to R&R ("Pl.'s Obj.") 4), Plaintiff has since acknowledged to the Court that, based on the Court of Appeals' denial of Plaintiff's appeal, her legal malpractice claim "is barred under New York State law by the doctrine of res judicata." (Letter from William Greenberg, Esq. to the Court (Jan. 30, 2009).)

The Court agrees that, in New York, a judgment "fixing the value of a professional's service necessarily decides that there was no malpractice." Lipani v. Collins, Collins & Dinardo, P.C., No. 90-CV-5278, 1992 WL 168267, at *3 (S.D.N.Y. June 25, 1992) (quoting Nat Kagan Meat & Poultry, Inc. v. Kolter, 416 N.Y.S.2d 646, 647 (App. Div. 1979)); accord Best v. Law Firm of Queller & Fischer, 718 N.Y.S.2d 397, 397 (App. Div. 2000) (holding that plaintiffs were "precluded from asserting a cause of action alleging malpractice" against the defendant law firm inasmuch as the New York Supreme Court had found that law firm was entitled to its agreed-upon legal fee).5 Here, it is undisputed that the Plaintiff's legal malpractice claim is precluded by the state supreme court decision that Sexter & Warmflash was entitled to its reasonable legal fees. Accordingly, Plaintiff's malpractice claim is dismissed as barred by the doctrines of res judicata and collateral estoppel."
 

As yet another example of why legal malpractice is a difficult discipline, here is a case in which there was a failure to file a counterclaim, The legal malpractice case ends in dismissal, because the Appellate Division determines that the counterclaim, even if made would have failed. Ginther v Rosenhoch ;2008 NY Slip Op 10292 ;;Appellate Division, Fourth Department
 

"One necessary element of such a cause of action is that, " but for the [defendants'] negligence, the plaintiff[] would have been successful in the underlying action' " (Oot v Arno, 275 AD2d 1023, 1023). Here, plaintiff alleges that defendants committed legal malpractice by, among other things, failing to assert a counterclaim in the underlying action, for recovery of premiums paid by plaintiff under a disability insurance policy. We note, however, that the Second Circuit affirmed the judgment of the District Court in favor of the plaintiff insurer in the underlying action on the sole ground that the claim for benefits made by defendant, the plaintiff herein, was untimely under the policy (Provident Life & Cas. Ins. Co. v Ginther, 51 Fed Appx 72). Thus, it cannot be said that, but for defendants' negligence, plaintiff would have been successful on a counterclaim for recovery of premiums in the underlying action (see Oot, 275 AD2d 1023).

 

Gina Passarella of the Legal Intelligenser reports on a case from Philadelphia that illustrates the difference between Breach of Fiduciary Duty and Legal Malpractice involving  Cravath, Swaine & Moore.  and Airgas, inc.

From the article:  'U.S. District Court Judge Eduardo C. Robreno ruled that under Pennsylvania law, Airgas sufficiently showed that Cravath had a fiduciary duty to Airgas and sufficiently supported its four damages claims for attorney fees, cost of obtaining new financing counsel, inability to obtain new financing and disgorgement of fees paid to Cravath. Robreno also upheld, at this juncture, Airgas' claims for punitive damages.

Airgas sued Cravath after the firm decided to represent other longtime client Air Products & Chemicals in Air Products' takeover bid for Airgas. Robreno had said the Delaware Chancery Court, which was overseeing litigation between the two companies regarding the takeover bid, should be the one to decide whether Cravath can represent Air Products or if it is barred by a conflict of interest.

The Delaware court in March ruled Cravath could continue in its representation, finding Airgas didn't show how it would be harmed by Cravath's involvement. But Airgas' claims for damages based on an alleged breach of fiduciary duty have continued in the Eastern District of Pennsylvania before Robreno.

In his opinion Tuesday denying Cravath's motion for judgment on the pleadings, Robreno said the parties "hotly dispute" the nature and scope of Cravath's representation of Airgas and Air Products, when Cravath officially stopped representing Airgas and what Cravath learned while representing the company. He said he would treat the motion for judgment on the pleadings as a motion to dismiss.

"Airgas has pleaded its claim in detail and alleged facts that Cravath disregarded its duty of undivided loyalty to its client Airgas by accepting, without a prior disclosure, a representation of Air Products designed explicitly to help Air Products take over Airgas," Robreno wrote in a 23-page opinion in Airgas Inc. v. Cravath Swaine & Moore. "Airgas alleges that at the same time (August-October 2009) that Airgas had engaged Cravath and assumed its undivided loyalty, Cravath was covertly advising Air Products on how to end Airgas's independent corporate existence. This pleading sufficiently sets forth a claim for breach of fiduciary duty."

Legal Malpractice rules are either legislated or court created.  There is no general underpinning such as an amendment to the Constitution, nor is there a basic common law history (with the very notable exception of the area of attorney deceit, which is as old as the Magna Carta.)  But as we have commented before, legal malpractice is the law of lawyers, written by lawyers, prosecuted by lawyers, and ruled on by lawyers.

Criminal defendants have no real ability to sue their attorneys for the mistakes which may have ended in the conviction.  In New York, a criminal defendant must demonstrate "actual innocence" before suing the attorney.  The thinking goes that a criminal was convicted on the evidence and not simply on blunders or shoddy work.  This must be true, no?

Yesterday's New York Times tells of a simple calendaring mistake by Sullivan & Cromwell which could lead to an execution.  Cory R. Maples was convicted in Alabama of murder, and in the sentence phase, was sentenced to death.  Sullivan & Cromwell offered pro bono work on his case.  When an order, which required a responsive filing was mailed to the attorneys listed at Sullivan & Cromwell, they had moved on, and the envelopes were returned.

This was a most common law office failure/calendaring error.  This time, the consequences were not a loss of money, but, rather a potential execution.  The matter is now before the Supreme Court on a cert application. 

Is this the case that might change the rule in criminal legal malpractice? 

BAKER,  -v.- CHARLES SIMPSON, WINDELS MARX LANE & MITTENDORF, LLP  is the story of a Chapter 7 petitioner whose case was converted into a Chapter 11 proceeding.  He had counsel appointed, who then represented him until the end of the proceedings. The proceedings ended badly, with plaintiff Baker alleging "that: (1) On the advice of counsel, he refinanced through appellee Galster Capital LLC, which he contends misrepresented itself as a lender and failed to fund his mortgage loans as agreed. 1 (2) Galster Capital caused him to incur legal fees, forgo offers from other prospective lenders, and [*4] accrue interest on his debt. (3) During a status conference before the bankruptcy court, attorney Simpson made a misrepresentation concerning the bankruptcy estate. (4) Simpson arranged an improperly "fixed" auction sale of two of his commercial properties without notice to Baker, and after a prospective buyer moved to reopen the sale, the bankruptcy court issued an order vacating the original sale and scheduling a new sale on notice. (5) Allstate Insurance Company acted negligently when, at Simpson's direction, it deposited insurance proceeds into a JPMorgan Chase bank account in Baker's name. (6) And, Simpson improperly converted the funds deposited into the JPMorgan account for his personal use."

How did the Second Circuit handle this matter?  In the end, it ruled that there it had no jurisdiction to determine whether Bankruptcy Court had the right to take the state court legal malpractice action over, and then dismiss. The rules of permissive abstention and mandatory abstention are implicated here.

"Having determined that the bankruptcy court had jurisdiction over this matter, we look to the abstention doctrine to [*10] provide guidance as to the proper exercise of that jurisdiction. See In re Southmark Corp., 163 F.3d at 929-30. As we have previously explained, "the abstention provisions implicate the question whether the bankruptcy court should exercise jurisdiction, not whether the court has jurisdiction in the first instance." In re S.G. Phillips Constructors, Inc., 45 F.3d 702, 708 (2d Cir. 1995).

Mandatory abstention applies when "a proceeding based upon a [s]tate law claim or [s]tate law cause of action" is "related to a case under [T]itle 11" but does not arise under or arise in a case under Title 11. 28 U.S.C. § 1334(c)(2). In the proceeding before the district court, Baker conceded that the mandatory abstention provision set out in section 1334(c)(2) is inapplicable to this case. Baker, 413 B.R. at 42 n.4. Therefore, this Court may properly find any argument that the mandatory abstention provision governs this appeal waived. See United States v. Brown, 352 F.3d 654, 663 (2d Cir. 2003); Billing v. Ravin, Greenberg & Zackin, P.A., 22 F.3d 1242, 1245 n.1 (3d Cir. 1994).

In any event, any argument that -- in the absence of a waiver -- mandatory abstention would apply, is without merit. A bankruptcy [*11] court has "plenary jurisdiction over 'all cases under [T]itle 11 and all core proceedings arising under [T]itle 11, or arising in a case under Title 11'" Mt. McKinley Ins. Co. v. Corning Inc., 399 F.3d 436, 447-48 (2d Cir. 2005) (quoting 28 U.S.C. § 157(b)(1)). As the Fifth Circuit has explained, although the definition of a proceeding "arising in" Title 11 is not entirely clear, it covers claims that "are not based on any right expressly created by [T]itle 11, but nevertheless, would have no existence outside of the bankruptcy." In re Wood, 825 F.2d 90, 97 (5th Cir. 1987)."
 

Result?  State Court action removed to Bankruptcy Court, Bankruptcy Court dismisses, no effective appeal.

Cases in which attorneys steal money rather than lose money [or commit blunders which lose otherwise meritorious cases] are in the jurisdiction of the New York Lawyers' Fund for Client Protection.  This fund fills an important role, and covers areas which will not be susceptible to a legal malpractice case.  Malpractice Insurance carriers will not likely cover thefts, nor fraud by the attorneys; hence the added importance of this Fund.

The fund is paid for by attorney fees levied by New York.  Attorneys now pay $ 350. per two year period merely to register.  A significant portion of these monies goes to the fund.  Claims have picked up recently, probably consistent with the economy, as  Joel Stashenko of the NYLJ reports:

"In the first six months of this year, 349 new claims were filed with the fund, a 44.2 percent increase from the 249 received in the same period last year.

As of July 1 of this year, 762 claims were pending. If all were paid out at the maximum eligible reimbursement rate of $300,000, the fund would be liable for $35 million.

By comparison, the fund faced 612 claims on the same date last year with a potential exposure of $24 million. Halfway through 2008 the fund had 536 pending claims.

Awards also are running ahead of last year's rates. In the first six months of the year, the fund paid out $4.3 million, up $2.9 million in the same period of 2009."

Attorneys for insurance carriers are rarely the subject of a legal malpractice case...it is much more often plaintiff's attorney. The Poppe law firm blog reports this case of a car insurance defense attorney who goes to trial on the underlying auto accident without ever meeting with the client, and to make matters worse, admits liability without the client's consent. While the Poppe blog does not set forth the full facts, it's my guess that there was a verdict in excess of the policy, and that the resulting case against the attorney is for the amount above the policy along with disbursements and interest.

Here is the report:"Lawyer Osborne never contacted client Turner about the trial. In fact, he never even spoke to his client before the trial. One more thing. Lawyer Osborne stipulated (admitted) that client Tuner was negligent---even though he never spoke with his client. The jury awarded $1.7 million against the absent Turner. By the time Turner knew about the trial it was over, and he was facing a huge judgment.

In the legal negligence trial, Taylor W. Jones of Jones Jensen & Harris sued the former law firm alleging they bungled the car wreck defense and would have won the case if they had not commited legal malpractice. A jury agreed.

Georgia insurance defense law firm, Swift, Currie McGehee and Hiers defended lawyer Osborne. James T. McDonald, of the Swift law firm defended Osborne.

The jury awarded Turner $991,000 against his "lawyer."

The rules for attorney billing are different from those of any other profession.  While the general principals are the same, attorneys are required to utilize retainer agreements, or a similar document, while this is not true for accountants, dentists, etc.  There are consequences for the failure to use a retainer agreement, but Courts, especially the Second Department have permitted vast exceptions.  How does one understand the various factors?

One way is to read Constantine Cannon LLP v. Parnes,  2010 Slip Op  31956  a recent decision by Justice Edmead.  In this decision, she carefully dissects the various strands of claims and defenses.

"Plaintiff alleges that its invoices to defendants were carefully itemized, with each entry containing the date, amount of time, and a detailed description of the work performed, as well as the attorney's name and billing rate. Mr. Matz, as the billing partner on defendants' matters, reviewed each invoice before it was sent out, and his administrative assistant addressed and mailed each invoice to Ms. Parnes via first class mail (see the "invoices"). From September 2008 through February 2009, plaintiff provided defendants with approximately $630,000 worth of legal services, and defendants paid the invoices for those services without protest. "

"defendants' "first affirmative defense and counterclaim" allege that plaintiff failed to issue defendants a written letter of engagement, pursuant to 22 NYCRR §1215.1. Therefore, plaintiff is barred from collecting a fee, and defendants are entitled to judgment against plaintiff for the full amount of all fees paid: $627,845.31. Defendants' "second affirmative defense and counterclaim," allege that plaintiff "vastly overcharged" for its services, for example, charging for the time of persons apparently not admitted to the New York bar at the same hourly rate as admitted lawyers. "

The Court: "The rule covering engagement letters provides in relevant part: "[A]n attorney who undertakes to represent a client and enters into an arrangement for, charges or collects any fee from a client shall provide to the client a written letter of engagement before commencing the representation, or within a reasonable time thereafter" (22 NYCRR §1215.1). ""However, a law firm's "failure to comply with the rules on retainer agreements (22 NYCRR 1215.1) does not preclude it from suing to recover legal fees for the services it provided" (Miller v Nadler, 60 AD3d 499, 500 [Sup Ct New York County 2009], citing Egnotovich v Katten Muchin Zavis & Roseman LLP, 55 AD3d 462, 464 [1st Dept 2008]; Nicoll & Davis LLP v Ainetchi, 52 AD3d 412 [1st Dept 2008]; Seth Rubenstein, P.C. v Ganea, 41 AD3d 54, 63-64 [2d Dept 2007]). The First Department explains in Nabi v Sells (70 AD3d 252, 253-254 [1st Dept 2009]): "Against the client's unqualified right to terminate the attorney-client relationship is balanced the notion that a client should not be unjustly enriched at the attorney's expense or take undue advantage of the attorney, and therefore the attorney is entitled to recover the reasonable value of services rendered." Further, the caselaw does not distinguish between the recovery of fees under a theory of quantum meruit or an account stated. Instead, this Court has held that [22 NYCRR §1215.1] "contains no provision stating that failure to comply with its requirements bars a fee collection action. Indeed, the regulation is silent as to what penalty, if any, should be assessed against an attorney who fails to abide by the rule" (Morgan, Lewis & Bockius LLP v IBuyDigital.com, Inc., 2007 WL 258305, 1 [Sup Ct New York County 2007] [emphasis added]). Therefore, defendants' first affirmative defense fails to defeat plaintiff's account stated and quantum meruit claims."

"[Courts] have held that the client may [not] use the attorney's noncompliance [with 22 NYCRR §1215.1]…as a sword to compel disgorgement of fees already paid. This is particularly relevant with respect to plaintiff's claim against [the defendants] since it appears that she has paid only a portion of the fees billed… . The issue has yet to be addressed by the First Department… . The Second Department [in Seth Rubenstein, P.C. v Ganea, supra]…ruled that the attorney discharged without cause was not precluded from recovering in quantum meruit the fair and reasonable value of the legal services provided, but did not address the issue of whether fees already paid were disgorgeable. That issue was determined by the Appellate Term, 9th & 10th Judicial Districts, in [Jones] v. Wright… where the court held that "while an attorney's failure to comply with the provision does not entitle a client to a return of legal fees where the services have already been rendered…a client may seek to recover a fee already paid if it appears that the attorney did not properly earn said fee." This appears to be consistent with the well established principles that an attorney who is discharged for cause does not have the right to recover legal fees, provided "the misconduct relates to the representation for which the fees are sought."

(Most citations omitted) (Emphasis added).

The Court in Jones v Wright (2007 WL 2247199, 1 [App Term 9th & 10th Jud Dists 2007]), which is cited by the Matos Court, stated:

Indeed, while an attorney's failure to comply with the provision does not entitle a client to a return of legal fees where the services have already been rendered, a client may seek to recover a fee already paid if it appears that the attorney did not properly earn said fee [citing Beech v Gerald B. Lefcourt, P.C., 2006 NY Slip Op 51092U, 4 (Civ Ct New York County 2006) ("While a client cannot maintain a cause of action for return of a legal fee based on noncompliance with Rule 1215.1, a client may seek recovery of the already paid fee grounded in a breach of contract theory, if an attorney did not properly earn any part of such fee")]."

Patriot Exploration, LLC v Thompson & Knight LLP ;  2010 NY Slip Op 06217 ;  Decided on July 27, 2010 ; appellate Division, First Department presents a discussion of forum non conveniens
 as well as the question of why this is a NY case?  Defendants wanted the case to be moved to Texas, notwithstanding the 2 year statute of limitations.  Plaintiff is represented by a Massachusetts attorney admitted pro haec vice.

 "In this legal malpractice action, the motion court did not abuse its discretion in declining to dismiss this action on forum non conveniens grounds (see Shin-Etsu Chem. Co., Ltd. v ICICI Bank Ltd., 9 AD3d 171, 175-77 [2004]). Since the court may grant a forum non conveniens motion "on any conditions that may be just" (CPLR 327[a]), which includes the power to impose "reasonable conditions designed to protect plaintiffs' interests" (Chawafaty v Chase Manhattan Bank, 288 AD2d 58, 58 [2001], lv denied 98 NY2d 607 [2002]), the court could properly condition an inconvenient-forum dismissal on a waiver of the foreign forum's
two-year statute of limitation (see e.g. Healy v Renaissance Hotel Operating Co., 282 AD2d 363, 364 [2001]; Seung-Min Oh v Gelco Corp., 257 AD2d 385, 387 [1999]; Highgate Pictures v De Paul, 153 AD2d 126, 129 [1990]). "

Nelson v. Patterson, 2010 NY Slip Op 31799 [Justice Mdden in NY County Supreme Court] is a case about loans, employment contracts, fraud and, oh yes, legal malpractice.  After a discussion of breached employment contracts and the like, the court grants plaintiff's request to add a cause of action for quantum meruit.  "In general the existence of an express agreement ordinarily precludes recoery in quantum meruit.  However, where as her, a bona fide dispute as to the application of a contract is demonstrated, a plaintiff will not be required to elect his or her remedies."

Quantum meruit, breach of fiduciary duty and legal malpractice, all tied together, continue in this case.

When does the statute of limitations start to run in legal malpractice?  Is it on the day that former attorneys are "substituted out" or perhaps on the day that successor counsel sign a retainer agreement?  One answer is found in Fur Online v. Rivkin Radler, LLP, Supreme Court, New York County, Index No. 113292/08. 

There, Justice Friedman determines that CPLR 214(6) applies, and that the rule in Matter of Kliment, 3 NY3d 535 (2004) is illustrative.  Where the "underlying complaint is one which essentially claims that there was a failure to utilize reasonable care or where acts of omission or negligence are alleged or claimed, the statute of limitations shall be three years if the case comes within the purview of CPLR Section 214(6) regardless of whether the theory is based in tort or in breach of contract."

Here, the decision illustrates the problems inherent.  In a US District Court case, Judge John G. Koeltl so ordered a letter application to be relieved as counsel on September 14, 2005.  The attorney-client relationship ended on that day.  Another attorney purportedly took over the case on October 14, 2005, but this "does not show that plaintiff was continuously represented by defendant up until that date."

Result?  Case dismissed.

Frederick v Meighan ; 2010 NY Slip Op 06076 ;Decided on July 13, 2010 ;Appellate Division, Second Department is a case in which Supreme Court dismissed, sua sponte on the basis of statute of limitations, the Appellate Division reversed. 

When does the statute of limitations start to run in legal malpractice?  The easy answer is as of the date of the mistake, or, with continuing representation, on the last day the attorneys represent plaintiff.  But, the more complex answer is on the day that a cause of action for malpractice comes into existence.  It may be years later than either of the first two dates.  Here, the cause of action did not come into existence until the Appellate Division ruled in the underlying case.

"Following this Court's decision on the appeal in the underlying action and the subsequent award of damages to the buyers, the plaintiff commenced this action against the Meighan defendants and the DeCaro defendants to recover damages for legal malpractice. As against the Meighan defendants, the plaintiff principally alleged that the inclusion of the executed construction agreement in the package of documents sent back to the buyers' attorney constituted legal malpractice, as it enabled the buyers to obtain specific performance of the contract of sale (see Suchin v Frederick, 30 AD3d 503). As against the DeCaro defendants, the plaintiff principally alleged that their failure to interpose a rescission defense based upon mistake in the underlying action constituted legal malpractice. In addition, the plaintiff alleged that the DeCaro defendants' failure to advise him of a potential legal malpractice claim against the Meighan defendants and to interpose a legal malpractice cross claim against them in the underlying action constituted legal malpractice.

At the outset, we find that the Supreme Court improvidently exercised its discretion in, sua sponte, directing dismissal of the complaint insofar as asserted against the Meighan defendants pursuant to CPLR 3211(a)(4) in view of the continued pendency of the first legal malpractice action against those defendants, which relief was not requested by any party in this action (see Clair v Fitzgerald, 63 AD3d 979, 980; Frankel v Stavsky, 40 AD3d 918, 919).

We further find that the Supreme Court should have granted that branch of the plaintiff's motion which was for summary judgment on the issue of liability against the Meighan defendants. In order to prevail in an action to recover damages for legal malpractice, a plaintiff must establish that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442).
 

Contrary to the Meighan defendants' contention, inasmuch as the plaintiff did not sustain "actionable injury" until this Court awarded the buyers specific performance in the underlying action, the plaintiff's legal malpractice cause of action against them was not time-barred (McCoy v Feinman, 99 NY2d 295, 301; see Kerbein v Hutchison, 30 AD3d 730, 732). "

The question of whether legal malpractice litigation is tied to [and affected by] downturns in the financial and economic worlds is often asked.  Our answer is that legal malpractice litigation is apt to come up in every situation where attorneys are present. 

The Drier episode, punctuated by fraud, crimes and large money numbers is a prime example.  In this NYLJ article by Nate Raymond we see that opinion letters assuring some aspect of a transaction, issued by attorneys, are now the subject of a legal malpractice case.  From the article:

"Fortress Investment Group LLC filed suit against Ruskin Moscou Faltischek on Tuesday for allegedly issuing "utterly false" legal opinion letters used by ex-lawyer Marc S. Dreier, who is now in prison for his role in a massive Ponzi scheme.

In a complaint filed in Manhattan Supreme Court, Fortress claims the Uniondale-based law firm issued three letters that Mr. Dreier used to defraud the investment firm out of $50 million. The suit against Ruskin Moscou follows one filed by Fortress in December against Dechert that made similar allegations.

The Ruskin opinion letters, issued in 2006 and 2007, stated that the firm was "special transaction counsel" to companies controlled by real estate developer Sheldon Solow. But Fortress said Ruskin Moscou never checked with anyone working for Mr. Solow's companies to confirm the relationship between the firm and Solow. Loan documents that Ruskin Moscou in its letters claimed to have been "duly executed and delivered" by the real estate companies had been forged by Mr. Dreier, the complaint said.

"We believe the suit is baseless and look forward to complete vindication through the judicial process," Barbara Cerrone, a spokeswoman for Ruskin Moscou, said in a statement."

Yesterday, the Appellate Division, First Department, reversed Supreme Court and reinstated the negligence causes of action on behalf of Mary Anne Fletcher against Boies Schiller in Fletcher v Boies, Schiller & Flexner, LLP; 2010 NY Slip Op 06140 ;Decided on July 20, 2010 .
 

From the Decision:  "Plaintiff, a fashion model, pleaded that a prominent agency mismanaged her and lost or withheld her crucial portfolio; that she had evidence of a scheme involving bogus expenses charged by that agency against other models; that images of her were profitably used by a large retail chain, wrongfully and without her authorization, via a subsidiary; and that a second agency had interfered with bookings that would have earned her $275,000, and instead booked another model for those jobs.

Plaintiff further pleaded that, when she consulted the Boies Schiller law firm and met with defendant Hayes, she was persuaded to turn over a large body of self-gathered evidence and told that her claims were worth large, specified amounts, and that the firm, and defendant Hayes concealed a conflict of interest between her and existing classes in state and federal actions; excluded her from the federal class action; subordinated her interests to those of other class members; participated lackadaisically in settlement discussions; and failed to timely file a claim in a crucial bankruptcy proceeding while successfully prosecuting the claim of the federal class.

The complaint should not have been dismissed insofar as it pleaded two causes of action for malpractice. Plaintiff has pleaded that, but for defendants' malpractice in failing to advise her properly, she "would have avoided some actual
ascertainable damage" (see IMO Indus. v Anderson Kill & Olick, 267 AD2d 10, 11 [1999]), [*2]including sufficient detail as to the "nature of" the underlying claim (see Reid v Druckman, 309 AD2d 669 [2003]). She need not, at this early stage, offer a detailed pleading to support her quantifying her alleged loss (see Proskauer Rose Goetz & Mendelsohn v Munao, 270 AD2d 150, 151 [2000]). "

One theme that we have considered over the years is whether attorneys get preferential treatment in legal malpractice litigation.  Are motions to dismiss granted on too little evidence?  Do the attorneys get the benefit of the doubt?  Is the fact that legal malpractice law is written mostly by attorneys, is decided upon by attorneys and affects attorneys sometimes dispositive of the outcome?

Well, all that aside, sometimes the client just can't help themselves.  Here is an example from today's NYLJ:  Uzamere v. Uzamere;  KINGS COUNTY;  Justice Schack;

"Pro se plaintiff CHERYL D. UZAMERE (UZAMERE) moves by order to show cause for: summary judgment, pursuant to CPLR Rule 3212; and, upon the failure of all defendants to answer, pursuant to CPLR §3215, for a default judgment of $100,000,000.00 plus interest against defendants SENATOR EHIGIE EDOBOR UZAMERE a/k/a "GODWIN E. UZAMERE" (SENATOR UZAMERE), ALLEN E. KAYE, P.C., ALLEN E. KAYE, ESQ., HARVEY SHAPIRO, ESQ. (SHAPIRO), BERNARD J. ROSTANSKI (ROSTANSKI), and JACK GLADSTEIN, ESQ. (GLADSTEIN), in an action arising from defendants' alleged misdeeds and misconduct related to plaintiff UZAMERE's 1979 marriage and subsequent abandonment by SENATOR UZAMERE. Defendants ALLEN E. KAYE, P.C. and ALLEN E. KAYE, ESQ. will be collectively referred to as "KAYE."

Plaintiff UZAMERE, in her verified complaint, asserts that: defendant SENATOR UZAMERE retained KAYE in 1977 to apply for lawful permanent residence in the United States; defendants KAYE and SHAPIRO, an associate of defendant KAYE, suborned defendant SENATOR UZAMERE's perjury by having him swear to false personal information on an immigration form, notarized in December 1979 by defendant ROSTANSKI; and, in 2003, defendant GLADSTEIN, defendant SENATOR UZAMERE's divorce attorney, sent correspondence to plaintiff UZAMERE, using the alleged fraudulent name of "GODWIN UZAMERE," duping plaintiff UZAMERE into commencing a divorce action against defendant SENATOR UZAMERE. Further, plaintiff UZAMERE alleges, among other things, that defendants' actions resulted in her: inability to obtain the use of her husband's proper name; becoming an unwitting participant in "an act of green card marriage fraud for permanent residence" [¶20 of verified complaint]; financial deprivation; and, a victim of defendants' fraudulent acts.

In three separate cross-motions, the first by defendants KAYE and SHAPIRO, the second by defendant GLADSTEIN, and the third by defendant ROSTANSKI, they all move to dismiss plaintiff UZAMERE's complaint, pursuant to various subsections of CPLR Rule 3211. Defendants claim that plaintiff UZAMERE's claims are barred: by res judicata and/or collateral estoppel, pursuant to CPLR Rule 3211 (a) (5); by lack of personal jurisdiction because of improper service of the instant verified complaint, pursuant to CPLR Rule 3211 (a) (8); by failure to state a cause of action upon which relief can be granted, pursuant to CPLR Rule 3211 (a) (7); and, by the applicable statute of limitation, pursuant to CPLR Rule 3211 (a) (5).

This Court finds that plaintiff UZAMERE failed to properly serve defendants and obtain personal jurisdiction over defendants. More important, this is not the first time that she has brought an action against these defendants based upon the same series of transactions and occurrences. In 2008, plaintiff UZAMERE commenced a previous action in Kings County Supreme Court against defendants but failed to proceed. Moreover, plaintiff UZAMERE failed to prevail on the merits in 2008 and 2009 in two separate Untied States District Court actions against these and other defendants based upon the same transactions and occurrences. The 2009 federal court action was dismissed by the United States District Court for the Southern District of New York. This was unanimously affirmed by the Second Circuit Court of Appeals and the United States Supreme Court denied a writ of certiorari.

Therefore, plaintiff UZAMERE's order to show cause for summary judgment and a default judgment against defendants is denied for plaintiff's failure to obtain personal jurisdiction and res judicata. Defendants' three cross-motions to dismiss the complaint are granted. Plaintiff's verified complaint is dismissed with prejudice. Further, plaintiff UZAMERE is enjoined from commencing future litigation in the New York State Unified Court System against defendants SENATOR UZAMERE, KAYE, SHAPIRO, ROSTANSKI and GLADSTEIN without prior approval of the appropriate Administrative Justice or Judge.

Background
 

9/11 is almost 10 years behind us.  Its direct effects may have passed, but the indirect effects still resonate.  Here is a fraud, foreclosure scam and legal malpractice case which arises out of the post 9/11 world.

Cullen v. Steinberg, 2010 U.S. Dist. LEXIS 62138 is a case in which plaintiff was the surviving widow of a murdered victim of 9/11.  She invested her compensation in real estate, and then fell prey to a variant of a scheme.  "In 2004, plaintiff received $ 1.9 million in compensation for her husband's murder in the 9/11 attacks on the World Trade Center. She invested some of the money in [*4] real estate, buying residential property at 653 Jacey Drive in Fort Lee, New Jersey in 2004, and at 1400 Outlook Avenue in the Bronx in 2006."
 

"At a party in December 2006, plaintiff met Maximo (Max) Almonte, who had gone to grammar school with her. Almonte initially told plaintiff he was a stock broker; plaintiff learned in May 2007 that he was actually a felon who had been convicted of real estate fraud. Almonte moved in with plaintiff at 653 Jacey Drive two days after meeting her at the party.In late December 2006 or early January 2007, Almonte introduced plaintiff to Robert (Bob) Kotch, who, plaintiff later learned, had been convicted of mortgage fraud and had met Almonte while they were both in prison. Almonte took plaintiff to Kotch's office in Manhattan's Wall Street area to discuss plaintiff's involvement in a potential real estate [*5] business in which Kotch and plaintiff would buy foreclosed homes and resell them for a profit. Kotch represented to plaintiff that if she invested $ 100,000, she would be able to earn an additional $ 90,000 in a short amount of time. Plaintiff orally agreed to this transaction during their meeting. She told Kotch she did not have the cash but that she owned the 653 Jacey Drive property and that it was not subject to any mortgage. Kotch told plaintiff that he could arrange a $ 100,000 loan for her, secured by that property."

"On or around March 13, 2007, at the request of Jason Steinberg, plaintiff signed a letter on behalf of Wholistic Change, LLC, authorizing the disbursement of $ 104,000 from the loan proceeds to "Private Lenders" [*8] (DX 5), the company Kotch purportedly was going to use to buy and sell foreclosed homes in partnership with plaintiff. It is Jason Steinberg's practice to get written authorization from the borrower before a loan closing if any of the loan proceeds will be disbursed directly to third parties. On or around March 13, 2007, plaintiff signed an agreement with Ellissa Liebowitz of Be Approved which stated that plaintiff agreed to pay Be Approved, the broker, three percent of the total loan amount (DX 6). Both Jason and Ronald Steinberg understood the loan was being made to a corporation rather than an individual."

"Plaintiff's second claim alleges that Jason Steinberg violated New York Judiciary Law Section 487 by deceiving or colluding to deceive plaintiff. Section 487 provides: "[a]n attorney or counselor who . . . [i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party . . . [i]s guilty of a misdemeanor, and in addition to the punishment prescribed therefor by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action."

 Section 487 only applies to an attorney's conduct in a pending judicial proceeding. Mahler v. Campagna, 60 A.D.3d 1009, 1012-13, 876 N.Y.S.2d 143, 147 (2d Dep't 2009); Jacobs v. Kay, 50 A.D.3d 526, 527, 857 N.Y.S.2d 81, 83 (1st Dep't 2008); Tawil v. Wasser, 21 A.D.3d 948, 949, 801 N.Y.S.2d 619, 620 (2d Dep't 2005) (Judicary Law Section 487 did not apply to conduct by attorney in a real estate transaction); Henry v. Brenner, 271 A.D.2d 647, 648, 706 N.Y.S.2d 465, 466 (2d Dep't 2000); Stanski v. Ezersky, 228 A.D.2d 311, 313, 644 N.Y.S.2d 220, 223 (1st Dep't 1996).

None of the alleged conduct by Jason Steinberg took [*21] place in the context of a judicial proceeding. Further, I find no deceit or collusion on the part of Jason Steinberg with the intent to deceive plaintiff. Accordingly, Jason Steinberg did not violate Section 487 of the Judiciary Law of the State of New York in connection with the loan to Wholistic Change, LLC. Thus, plaintiff's second claim fails."

At the outset, we find that the Supreme Court improvidently exercised its discretion in, sua sponte, directing dismissal of the complaint insofar as asserted against the Meighan defendants pursuant to CPLR 3211(a)(4) in view of the continued pendency of the first legal malpractice action against those defendants, which relief was not requested by any party in this action (see Clair v Fitzgerald, 63 AD3d 979, 980; Frankel v Stavsky, 40 AD3d 918, 919).

"We further find that the Supreme Court should have granted that branch of the plaintiff's motion which was for summary judgment on the issue of liability against the Meighan defendants. In order to prevail in an action to recover damages for legal malpractice, a plaintiff must establish that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442). Here, in opposition to the plaintiff's prima facie showing of entitlement to judgment as a matter of law, the Meighan defendants failed to demonstrate the existence of any triable issues of fact with respect to their liability for legal malpractice (see Alvarez v Prospect Hosp., 68 NY2d 320, 324; Northrop v Thorsen, 46 AD3d 780, 784; Jampolskaya v Victor Gomelsky, P.C., 36 AD3d 761, 762). Contrary to the Meighan defendants' contention, inasmuch as the plaintiff did not sustain "actionable injury" until this Court awarded the buyers specific performance in the underlying action, the plaintiff's legal malpractice cause of action against them was not time-barred (McCoy v Feinman, 99 NY2d 295, 301; see Kerbein v Hutchison, 30 AD3d 730, 732). Also contrary to the Meighan defendants' contention, their malpractice was a proximate cause of the injury in this case. If the DeCaro defendants are found to have also committed malpractice, the Meighan defendants and the DeCaro defendants may both be liable as successive tortfeasors who each contributed to the same injury (see Schauer v Joyce, 54 NY2d 1, 6; Soussis v Lazer, Aptheker, Rosella & Yedid, P.C., 66 AD3d 993, 994-995; Khlevner v Tylo, 16 Misc 3d 1129[A]).

The Supreme Court should have denied those branches of the DeCaro defendants' cross motion which were for summary judgment dismissing so much of the complaint as alleged that they committed legal malpractice by failing to interpose a claim in the underlying action for rescission of the construction agreement based on mistake, by failing to interpose an affirmative defense in the underlying action of rescission based on mistake, and by arguing on appeal in the underlying action that the plaintiff instructed the Meighan defendants to send the construction agreement to the attorneys for the other parties to that agreement, which argument was contrary to the plaintiff's testimony at the underlying trial. While the DeCaro defendants contend that a rescission defense based on unilateral mistake would not have been successful in the underlying action for specific performance, specific performance may be denied based on unilateral mistake [*4]where the other party must have been aware of the mistake (see Da Silva v Musso, 53 NY2d 543, 548; Sheridan Drive-In v State of New York, 16 AD2d 400, 405; Harper, Inc. v City of Newburgh, 159 App Div 695, 696-697). However, the Supreme Court should have granted that branch of the DeCaro defendants' cross motion which was for summary judgment dismissing so much of the complaint as alleged that they committed legal malpractice by failing to advise the plaintiff of a potential legal malpractice claim against the Meighan defendants. As discussed above, the plaintiff lacked a viable legal malpractice claim against the Meighan defendants until this Court awarded the buyers specific performance.

in Frederick v Meighan ;2010 NY Slip Op 06076 ;Decided on July 13, 2010 ;Appellate Division, Second Department  we see the effect of Attorney 2 failing to clean up Attorney 1's mistakes.  In addition we see an instance of what we believe to be a systemic aversion to legal malpractice cases.  Here, for example, Supreme Court sua sponte grants dismissal to Attorney 1 in this legal malpractice case; the Appellate Division not only reinstates the case, it grants summary judgment to plaintiff.  But, on to the substance"
 

Tsafatinos v Wilson Elser Moskowitz Edelman & Dicker, LLP ;2010 NY Slip Op 06085 ;decided on July 13, 2010 ;Appellate Division, Second Department is short on details as to how and why the legal malpractice case was filed on a date the Appellate Division determined to be too late.  The rules, however, are clear:
 

"To dismiss a cause of action pursuant to CPLR 3211(a)(5) on the ground that it is barred by the Statute of Limitations, a defendant bears the initial burden of establishing prima facie that the time in which to sue has expired" (Savarese v Shatz, 273 AD2d 219, 220; see Morris v Gianelli, 71 AD3d 965, 967). Here, the defendants demonstrated that the plaintiffs' cause of action to recover damages for legal malpractice accrued no later than July 2005, more than three years before the commencement of the instant action in August 2008 (see CPLR 214[6]; McCoy v Feinman, 99 NY2d 295, 301; Nickel v Goldsmith & Tortora, Attorneys at Law, P.C., 57 AD3d 496). Thereafter, "the burden shifted to the plaintiffs to aver evidentiary facts establishing that the case falls within an exception to the Statute of Limitations" (Savarese v Shatz, 273 AD2d at 220 [internal quotation marks omitted]). Contrary to the plaintiffs' contention, they failed to establish that the statute of limitations was tolled by the continuous representation doctrine (see McCoy v Feinman, 99 NY2d at 306; cf. Shumsky v Eisenstein, 96 NY2d 164, 168). "
 

Justice Gische, of Supreme Court, New York County has written a number of legal malpractice decisions over the years.  One recently decided  is Kleinser v Astarita  NY Slip Op 31675U.

Here, plaintiff was a trader and employee of Rockrimon Securities.  He was fired by them and sued.  The case was litigated before Justice Ramos.  At issue was whether he was a partner or an employee.  After a full litigation, Justice Ramos determined that he was an employee and reduced the claims to an accounting.  Plaintiff believed that he had a claim of $ 1 million.  The Court awarded $ 67,000.  Plaintiff appealed and lost.  This was the bad-good result.

In this legal malpractice case, issues turned on a statute of limitations issue.  When did the representation end?  Was it when plaintiff wrote to the attorneys and "I understand you will not continue with my case despite our earlier agreement that was affirmed.  Again, I do not believe you  'have completed our assignment'" or was it when the law firm finally returned the file?

The Court determined that representation ended with the letter, and that this case was untimely.

Justice Goodman of Supreme Court, New York County has a caseload full of legal malpractice cases.  Here is an accounting malpractice case coming as a counterclaim for accounting fees, but the idea is just the same.  In Perelson Weiner, LLP v Allison 06/29/2010 Supreme Court, New York County, Goodman, J. the claim was that client did not pay fees, and client counterclaimed that the accountant committed malpractice in handling a foreign investment, to the tune of $ 61,000.  Client alleges that accountant overbilled him and advised him that litigation in the Cayman Islands was essential, when in fact it was useless.

In this motion on the amended pleadings, Justice Goodman lays out a well enunciated explanation of how such a pleading should look and why it is permissible. Here, it is neither too late, nor too prejudicial to dismiss.

LOK PRAKASHAN, LTD.  -v.- RALPH A. BERMAN, DAVIDOFF MALITO & HUTCHER, LLP,
No. 09-0136-cv; UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT;2009 U.S. App. LEXIS 22988 is an example of the Court's continued romance with the concept that litigation is an art and not a science.

What is a question of judgment? " "A complaint that essentially alleges either an 'error of judgment' or a 'selection of one among several reasonable courses of action' fails to state a claim for malpractice." Id.

The District Court concluded that "[b]ecause there is ample evidence in the record that Defendants' omission of the specified document was a conscious and reasonable decision regarding trial strategy, not negligence, and the omission of the document was not the proximate cause of any loss, Plaintiff has failed to show the elements required to support a claim of legal malpractice." [*4] Order of November 1, 2005. We agree and, substantially for the reasons stated by the District Court in its well-reasoned orders of November 1, 2005 and December 12, 2008, find plaintiff's arguments to be without merit."
 

Fees and Attorneys seem to be a dyad that never stops recurring.  More correctly put, disputes about  fees and attorneys have been here forever.  we're certain that the bible contains some commentary, and we do know that Abraham Lincoln had attorney fee cases in his docket.  Here is a decision from Judge Scheindlin on the issue.

Simon v. Unum Group, 07 Civ. 11426;  Decided: June 22, 2010;  District Judge Shira A. Scheindlin; U.S. DISTRICT COURT  SOUTHERN DISTRICT OF NEW YORK. 

"Section 475 of the New York Judiciary Law provides, in pertinent part:

From the commencement of an action,…the attorney who appears for a party has a lien upon his client's cause of action, claim or counterclaim, which attaches to a verdict, report, determination, decision, judgment or final order in his client's favor…. The court upon the petition of the client or attorney may determine and enforce the lien.

However, attorneys are not entitled to a charging liens in all instances. Under New York law, a client has an absolute right to terminate the attorney-client relationship at any time, with or without cause. 7 "If a lawyer is discharged for cause, he or she is not entitled to legal fees." 8 However, "[p]oor client relations, differences of opinion, or personality conflicts do not amount to cause." 9 Cause requires a showing of "impropriety or misconduct on the part of the attorney." 10 If the lawyer is not discharged for cause, then he or she is entitled to legal fees—which may be recovered either (1) in quantum meruit, the fair and reasonable value of the services rendered, or (2) as a contingent portion of the former client's ultimate recovery if the parties entered into a contingency agreement. 

If awarding fees in quantum meruit, the court may consider multiple factors to determine the fair and reasonable value of an attorney's legal services, including:

[(1)] the difficulty of the matter, [(2)] the nature and extent of the services rendered, [(3)] the time reasonably expended on those services, [(4)] the quality of performance by counsel, [(5)] the qualifications of counsel, [(6)] the amount at issue, and [(7)] the results obtained (to the extent known).

"It is appropriate, after 'consider[ing] all the factors relevant to a quantum meruit fee analysis…[to] turn[] to lodestar analysis to reach a specific dollar figure for the value of the services rendered[.]'"  "This method, which results in the determination of the presumptively reasonable fee, is comprised of a reasonable hourly rate multiplied by a reasonable number of expended hours."

In this most simple of legal malpractice cases, plaintiff was the victim of a rear-end Motor Vehicle accident.  She retained attorney who failed to bring the action within the statute of limitations.  Plaintiff sues attorney and settles for $ 50,000. which was the amount of the underlying car insurance.  She is said to have sought the approval of her own carrier for the settlement, but there was no response.

Now, when plaintiff seeks underinsured/uninsured coverage from her own carrier, it declines to cooperate and seeks to stay arbitration.  Was there double legal malpractice?  Should the underlying attorney have been liable for both primary and underinsured coverage amounts?

In Matter of Kemper Mut. Ins. Co. v Russell ;  2010 NY Slip Op 05847 ;Decided on July 1, 2010
Appellate Division, Third Department  we see the majority opinion:
 

"An insurer is obligated to pay under SUM coverage if the bodily injury liability insurance limits of its insured's policy exceed those of the other policy, subject to the condition that "the limits of liability of all bodily injury liability bonds or insurance policies applicable at the time of the accident shall be exhausted by payment of judgments or settlements" (Insurance Law § 3420 [f] [2] [A]; see Matter of Federal Ins. Co. v Watnick, 80 NY2d 539, 546 [1992]). The statute, in short, "requires primary insurers to pay every last dollar, and requires [respondent] to accept no less, prior to the initiation of an underinsurance claim" (Matter of Federal Ins. Co. v Watnick, 80 NY2d at 546). The primary insurer here, however, has paid nothing, as respondent was forced to recover damages in a separate legal malpractice claim. As the other driver's policy limit was not exhausted by payment, respondent's own SUM coverage does not come into play, and Supreme Court should have granted petitioners' application for a permanent stay. "

While the minority opinion comes to the conclusion that it is the amount and not the source of the insurance proceeds that controls, neither opinion asks whether the attorney should have demanded or obtained settlement in the amount of primary and underinsured coverage.

One theme of this blog is that where ever attorneys represent clients [all over] there will be legal malpractice claims.  GUS Consulting GMBH v Chadbourne & Parke LLP ;2010 NY Slip Op 05672 ;Decided on June 24, 2010 ;Appellate Division, First Department  is a prime example.  This case involves the Russian Tax Police, gas service across Europe and legal malpractice here in the US.  Can one get any more global?
 

"The complaint alleges that the SP Structure was illegal under Russian law, specifically Decree No. 529, and that the Russian tax police undertook an investigation because the SP Structure was illegal. However, the contention that the SP Structure was illegal under Russian law was rejected in an arbitration brought against plaintiff CIS Emerging Find Limited (CISEF) in which CISEF asserted that its contract with the claimant was void because it was part of the SP Structure that was illegal under Decree No. 529. Since the issue was actually and necessarily decided in the arbitration, in which CISEF had a full and fair opportunity to litigate the issue, CISEF and the other plaintiffs, who are admittedly in privity with it, are precluded from relitigating it herein (see Kaufman v Eli Lilly & Co., 65 NY2d 449, 455 [1985]; Active Media Servs., Inc. v Grant Prideco, Inc., 35 AD3d 165 [2006]). Thus, to the extent the complaint is based on allegations that Chadbourne negligently advised plaintiffs that the SP Structure was legal, although risky, under Russian law, the malpractice claim is foreclosed.

Summary judgment dismissing the entire legal malpractice action was correctly granted [*2]because CAIB failed to present evidence in admissible form sufficient to raise a triable issue of fact as to proximate cause, which requires a showing that Chadbourne's alleged failure to warn it of potential criminal consequences of its use of the SP Structure proximately caused reasonably ascertainable damages (see AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007]; Barbara King Family Trust v Voluto Ventures LLC, 46 AD3d 423, 424-425 [2007]). CAIB submitted no admissible evidence to dispute Chadbourne's showing that the 1999 tax police raid was precipitated by a terminated employee in an effort to delay CAIB's discovery of his theft of 100,000,000 shares of Gazprom stock. Further, the shares of Gazprom stock that were "arrested" by Russian authorities following the 1999 raids were eventually released to CAIB, and no formal criminal prosecution was ever commenced against CAIB or any of its affiliates or officers. CAIB's claim that, had Chadbourne properly advised it of potential criminal exposure, it would have changed or ceased its use of the SP Structure and then would have been able to maintain its presence in Russia and grow its business there over the next six years, while the Russian economy rebounded, is too speculative to support a legal malpractice claim (see AmBase ."
 

A common and recognized mistake resulting in legal malpractice is the double use of an index number.  in Wilk v Lewis & Lewis, P.C. ;2010 NY Slip Op 05897 ;Decided on July 2, 2010 ;Appellate Division, Fourth Department  the index number came from an earl er pre-complaint discovery motion.  It might also come in a motion for leave to file a late notice of claim or some other variant.

Attorneys got the discovery but then sued under the same index number.  At the time, such a filing was a nullity, which had statute of limitations significance. 

"Defendants commenced a pre-action discovery proceeding against plaintiff's employer to obtain information concerning the accident and, when defendants thereafter commenced a Labor Law and common-law negligence action on behalf of plaintiffs (hereafter, underlying action), they used the same index number that had been used in the pre-action discovery proceeding. Supreme Court granted the motions of the defendants in the underlying action (Labor Law defendants) to dismiss the complaint. Under the law at that time, the failure to purchase a new index number rendered the action a nullity because it was never properly commenced (see Chiacchia & Fleming v Guerra, 309 AD2d 1213, 1214, lv denied 2 NY3d 704). No appeal was taken by plaintiffs from that order, although plaintiffs retained other attorneys (plaintiffs' successor counsel) shortly prior to the expiration of the time in which to take an appeal. Plaintiffs commenced a second Labor Law and common-law negligence action against the Labor Law defendants, who moved to dismiss the complaint as time-barred. We previously reversed an order denying those motions and instead granted the motions and dismissed the [*2]complaint (Wilk v Genesee & Wyoming R.R. Co., 45 AD3d 1274). We concluded that the second action did not relate back to the filing of the underlying action pursuant to CPLR 205 (a) because the failure to purchase a new index number rendered the underlying action a nullity (id. at 1275).

Defendants also failed to establish that plaintiffs could not prove the remaining elements of a legal malpractice cause of action. Defendants contend that their negligence was not a proximate cause of plaintiffs' injuries because plaintiffs' successor counsel did not file a notice of appeal when the Court of Appeals issued its decision in Harris v Niagara Falls Bd. of Educ. (6 NY3d 155). We reject that contention. Defendants are correct that the Court of Appeals changed the law by holding in Harris that a defendant could waive a defect in connection with filing requirements such as the failure to purchase a new index number (see id. at 159). Even assuming, arguendo, however, that we agree with defendants that the time within which plaintiffs could file a notice of appeal expired 35 days after the final Labor Law defendant had served the order dismissing the first complaint against the Labor Law defendants (see Blank v Schafrann, 206 AD2d 771, 773; Williams v Forbes, 157 AD2d 837, 838-839; Dobess Realty Corp. v City of New York, 79 AD2d 348, 352, appeal dismissed 53 NY2d 1054, 54 NY2d 754), we note that the time in which to file a notice of appeal against that final Labor Law defendant expired [*3]approximately 30 hours after the Harris decision was issued. It cannot be said that the failure of plaintiffs' successor counsel to learn of the Harris decision and file a notice of appeal within that narrow time period constituted an "intervening and superseding failure of plaintiff[s'] successor [counsel]" to file a timely notice of appeal (Pyne v Block & Assoc., 305 AD2d 213). Defendants thus failed to establish that "plaintiff[s'] successor counsel had sufficient time and opportunity to adequately protect plaintiff[s'] rights" (Somma v Dansker & Aspromonte Assoc., 44 AD3d 376, 377; cf. Ramcharan v Pariser, 20 AD3d 556, 557; Albin v Pearson, 289 AD2d 272). "

What partners will do to each other continues to amaze.  here, in Rock City Sound, Inc. v Bashian & Farber, LLP ;2010 NY Slip Op 05533 ;Decided on June 22, 2010 ;Appellate Division, Second Department.  here, "A dispute arose between Kalish and Lindsay as to the Established Value of Kalish's shares, and in August 2004 Kalish commenced an action against Lindsay (hereinafter the Kalish action). The defendants Gary E. Bashian and Bashian & Farber, LLP (hereinafter Bashian and B & F) represented both Lindsay and Rock City in the Kalish action. Upon Kalish's application, the Supreme Court, Dutchess County, awarded him a preliminary injunction, inter alia, enjoining Lindsay from exercising any control over [*2]Kalish's Rock City shares (see Kalish v Lindsay, 47 AD3d 889, 890).

Subsequently, Lindsay authorized himself to vote all of Kalish's shares, called shareholder meetings at which he was the only one present, deemed himself to have complete authority to operate Rock City, and made decisions about Rock City without notifying Kalish, such as voting to sell all of its equipment and assets. "

Where did that leave Kalish?  Things became even more difficulty when Lindsay filed for personal bankruptcy.  "Kalish appealed both the order and judgment and the order to this Court. By decision and order dated January 29, 2008, this Court modified the order and judgment by deleting the provision thereof denying that branch of Kalish's motion which was to hold Bashian and B & F in civil contempt pursuant to Judiciary Law § 753, and remitted the matter to the Supreme Court for a hearing and new determination on that branch of the motion. This Court reversed the order denying Kalish's motion for partial summary judgment, and granted that motion (id. at 890-892). Thereafter, the Supreme Court issued what was denominated a partial judgment, declaring and adjudging the total value of Kalish's shares to be $1,145,580, and that Rock City was required to perform under the shareholder's agreement and purchase Kalish's shares for that amount, which was due and payable at the time of the judgment.

Subsequently, Lindsay filed for personal bankruptcy, and his bankruptcy trustee, Paul Banner, took over his interests in Rock City. Banner and Kalish then voted their shares to authorize Rock City to commence the instant action against the defendants Bashian & Farber, LLP"

For a technical discussion of standing for the bankruptcy trustee and the entities, see the balance of the decision.  "Contrary to the defendants' contention, Kalish and Banner had the authority to vote their shares to authorize Rock City to commence this action. The Shareholders Agreement entitled Kalish to exercise full voting rights on his shares "until such time as payment in full has been made." Since his shares were never purchased, Kalish's withdrawal from the corporation was never accomplished, and he had the right, according to the agreement, to vote his shares to bring the instant action (cf. Cooper, Selvin & Strassberg v Soda Dispensing Sys., 212 AD2d 498). Further, a bankruptcy trustee stands in the shoes of the debtor and is able to maintain actions that the debtor could have brought prior to the bankruptcy proceedings (see generally Hirsch v Arthur Andersen & Co., 72 F3d 1085). Since, pursuant to the Shareholder's Agreement, Lindsay could have voted his shares to authorize this action, his bankruptcy trustee, Banner, had the authority to do so. "

Boone v Bender ;2010 NY Slip Op 05497 ;Decided on June 22, 2010 ;Appellate Division, Second Department is a matrimonial legal malpractice case.  The Appellate Division decision does not shed much light on the allegations in the complaint. 
 

Often, matrimonial legal malpractice cases rest on failures in investigation of the other spouses' finances, in failures to seek pendente lite relief, in the failure to obtain maintenance, and in one variety of capitulation concerning equitable distribution.  We cannot really tell how this case proceeded.

Notable, however, is the Second Department's reliance on plaintiff's statement of satisfaction with her attorney at the settlement.  This is a newly emerging trend in legal malpractice.  In the settlement of some types of cases, matrimonial especially, the court asks whether the client was satisfied with its attorney's work.  The client is in a bind, as the attorney usually advises the client to say "yes."  Clients universally believe that if they don't answer, or say "no" then there will be no settlement.  This is a trap.

"The open-court stipulation of settlement established that the plaintiff was satisfied with the defendants' representation of her, that she had discussed the terms of the settlement with the defendants, that she understood that she would have the right to a trial if she did not wish to enter into the stipulation, that she had not been threatened or forced into entering into the stipulation, that she was entering into the stipulation voluntarily and of her own free will, that she had not taken any medications that would hamper her ability to understand the court proceedings, and that she had no additional questions for the defendants. "The fact that the plaintiff subsequently was unhappy with the settlement obtained by the defendant does not rise to the level of legal malpractice" (Holschauer v Fisher, 5 AD3d 553, 554). "

The recent decision in Gucci  America Inc. v. Guess? Inc.,  doesn't answer the legal malpractice question, but it does answer the privilege question.  Here's the back story from Noeleen Walder at the New York Law Journal:

"Mr. Moss, a graduate of Fordham University School of Law, passed the California bar exam in 1993 but went on inactive status three years later.

He was referred to Gucci by two of its outside counsel from Patton Boggs in Washington, D.C., and joined the company's Secaucus, N.J., office in 2002 to analyze real estate financials.

Just months after joining the company, Mr. Moss, who maintains he was hired as a "legal associate," filed a pro hac vice motion in U.S. Bankruptcy Court for the Southern District to represent Gucci, according to Magistrate Judge Cott's decision.

In 2003, Gucci promoted Mr. Moss to in-house counsel. In that position, Mr. Moss filed trademark applications in which he was labeled an "attorney-at-law and member of the Bar of California," represented Gucci in employment matters, and appeared before courts and administrative agencies on the company's behalf. In 2005, Gucci once again promoted Mr. Moss, this time appointing him director of legal services. Three years later, Mr. Moss was appointed vice president and director of legal and real estate.

In an affidavit, Mr. Moss said, "I did not believe that my inactive status in California limited my ability to practice law in any other jurisdiction where such practice was permissible."

Mr. Moss insists that no one ever brought up the issue of his inactive status during his eight years at Gucci.

For its part, Gucci has maintained that it "perceived" Mr. Moss to be an attorney authorized to practice law.

In an affidavit, Christy Leleck, a director of Human Resources at Gucci during Mr. Moss' tenure, said she never thought to confirm Mr. Moss' qualifications since "he was already perceived by senior management as the company's lawyer."

It was not until December 2009 that Gucci launched a "preliminary investigation" into Mr. Moss' status.

Gucci terminated Mr. Moss on March 1, a month after he reactivated his bar status in California.

In court papers filed in April, Guess maintained that Gucci could have discovered "with a few clicks of the mouse" that Mr. Moss was not licensed to practice law (NYLJ, April 19).

"Gucci could have readily learned that Jonathan Moss was not authorized to practice law simply by asking him whether he was an active member of the California Bar… And this is what Gucci never did in all these years as Gucci's legal counsel."

Magistrate Judge Cott agreed.

In 601 Realty Corp. v Conway, Farrell, Curtin & Kelly, P.C. ;2010 NY Slip Op 05538 ;Decided on June 22, 2010 ;Appellate Division, Second Department we see the case continuing, with some rough edges removed.  Conway Farrell used to be a big legal malpractice defense firm, until it split off.  Now it is being defended by its former self.  Here, both sanctions and some discovery disputes have been resolved, and the case continues.
 

"Under the circumstances of this case, the conduct of the appellants after the Supreme Court declined to sign their order to show cause had a good faith basis and did not constitute frivolous conduct (see Dank v Sears Holding Mgt. Corp., 69 AD3d 557, 558; Yenom Corp. v 155 Wooster St. Inc., 33 AD3d 67, 70; Matter of Wecker v D'Ambrosio, 6 AD3d 452, 453). Accordingly, the Supreme Court erred in granting the plaintiffs' motion for an award of sanctions against the appellants. "
 

The answer is yes, it can.  in Kram Knarf, LLC v Djonovic ;2010 NY Slip Op 05464 ;Decided on June 22, 2010 ;Appellate Division, First Department we see the following explanation:
 

"Accepting the facts alleged in the complaint as true and according plaintiffs the benefit of every possible favorable inference (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]), we agree that the allegations that defendant attorneys negligently gave their plaintiff clients an incorrect explanation of the contents of legal documents in connection with a property acquisition sufficiently states a legal malpractice claim against them (see Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300 [2001]; cf. Bishop v Maurer, 33 AD3d 497, 499-500 [2006], affd 9 NY3d 910 [2007]). The documents do not conclusively establish that defendants' explanation was correct, and thus do not constitute a defense based on "documentary evidence" (CPLR 3211[a][1])."

In legal malpractice litigation there is a holy triumvirate of causes of action.  In general, they are ranked in this order:  legal malpractice, breach of fiduciary duty, and breach of contract.  There is a well known principal that if duplicative, there must be dismissal of some of these causes of action.

In Safe Flight Instrument Corp v. Sporn,  108497/08 Justice Emily Jane Goodman sets forth some of the principals in this area.  The story is a tangled web of patents, estate planning, an inventor who started up a company from 1946, eventually took it public, retired and continued to invent.  Sporn, defendant in the case seems to have represented both the old and a new company which was created by the inventor.

"The breach of fiduciary duty claim against Sporn is redundant, and is dismissed, because it is "essentially based on the same facts and seek[s] the same relief" as the legal malpractice claim against Sporn (AmBase Corp. v. Davis Polk & Wardwell, 30 AD3d 171, 172 [1st Dept 2006], affd 8 NY3d 428 [2007]; see also Weil, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 271 [1st Dept 2004]). 2

The legal malpractice and breach of fiduciary duty claims share in common the allegations that: Sporn was Safe Flight's attorney during the time when Greene was developing and applying for the Patents (Complaint, ¶¶194, 211); Sporn was also acting as Greene's attorney while he was developing and applying for the Patents (id., ¶¶196, 213); while serving as Safe Flight's primary outside counsel, but in his capacity as Greene's personal attorney, Sporn assisted Greene in incorporating Greenleaf, counseled Greene with regard to the proposed assignment of the Patents to Greenleaf, and drafted the Will, which named Sporn as the executor of the Will and provided that, at the sole discretion of Sporn as executor, all of Greene's patents and inventions that had not been assigned to Greenleaf prior to his death should be so assigned (id., ¶¶197-199, 214-216); Sporn, in his capacity as the executor of Greene's estate, engaged in efforts to probate the Will, which—absent the settlement between Safe Flight, the Siblings, Greene's estate and Greenleaf—would have resulted in the Patents being transferred or assigned to Greenleaf and/or the Siblings (id., ¶¶200, 217); Safe Flight never granted Sporn a waiver or consent with respect to the conflicts of interest that his representation of Greene and Safe Flight entailed (id., ¶¶204, 230); and from 2005 until the time of his termination as counsel for Safe Flight, Sporn was engaged in a persistent pattern of disloyalty to Safe Flight in connection with his ongoing efforts to assist Greene with his plans to assign or transfer the Patents to an entity and/or persons other than Safe Flight (id., ¶¶203, 232).

Safe Flight concedes that both the legal malpractice claim and the breach of fiduciary duty claim arise in connection with Sporn's alleged conflict of interest in representing Safe Flight, on the one hand, and Greene and Sporn's own interests, on the other. However, Safe Flight argues that the two claims are premised upon different facts because: the legal malpractice claim is based upon Sporn's alleged failure to disclose to Safe Flight that Greene was planning to assign the Patents to an entity other than Safe Flight, and to represent Safe Flight's interests by attempting to stop Greene from doing so (see Pl. Mem. of Law, at 21; Complaint, ¶202); and the breach of fiduciary duty claim is based upon Sporn's acts in setting up Greenleaf as an entity which competed with Safe Flight, taking a pecuniary interest in Greenleaf as its president, advising Greene in connection with the assigning and/or bequeathing of the Patents to an entity or persons other than Safe Flight, assisting Greene in diverting Safe Flight's business opportunities in the Patents away from Safe Flight, securing a legal opinion from Dougherty as to whether Greene could deprive Safe Flight of ownership of the Patents, and giving his own personal interests and/or the interests of others priority over Safe Flight's interests (see Pl. Mem. of Law, at 21; Complaint, ¶¶223-227). Thus, Safe Flight contends that the two claims are not duplicative, because the legal malpractice claim is based upon Sporn's alleged negligence in failing to exercise the requisite standard of care in the performance of his duties as Safe Flight's attorney, whereas the breach of fiduciary duty claim is based upon Sporn's alleged actions in diverting corporate opportunities or assets away from Safe Flight, and to the benefit of himself and others (see Pl. Mem. of Law, at 21-22). Safe Flight also argues that its breach of fiduciary duty claim is not duplicative of its legal malpractice claim because the two claims seek different damages. Safe Flight asserts that it is entitled to disgorgement of the fees and compensation that were paid to Sporn during the period of his alleged disloyalty, and apparently contends that the recovery of those amounts is sought only as part of its breach of fiduciary duty claim and/or may not appropriately be sought as part of its legal malpractice claim (Pl. Mem of Law, at 24).

Safe Flights claims are not premised upon sufficiently separable or different facts as to warrant Safe Flight's assertion of the breach of fiduciary duty claim in addition to its legal malpractice claim. "The attorney-client relationship is both contractual and inherently fiduciary," and, although "a complaint seeking damages alleged to have been sustained by a plaintiff in the course of such a relationship will often advance one or more causes of action based upon the attorney's breach of some contractual or fiduciary duty owed to the client," "courts normally treat the action as one for legal malpractice only" (Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 8-9 [1st Dept 2008]). Here, the legal malpractice and breach of fiduciary duty claims are based upon essentially the same factual allegations"
 

Today's New York Law Journal reports as news, and the Appellate Division, First Department reports as law a decision in McCagg v Schulte Roth & Zabel LLP ;2010 NY Slip Op 05463
Decided on June 22, 2010 ;Appellate Division, First Department  an unusual case in which it is alleged that a law firm aided and abetted a breach of fiduciary duty.  Note that this case is at least two levels of abstraction away from a typical legal malpractice case.  On the first level, it is a breach of fiduciary duty rather than a straight malpractice; on the second level, it is the law firm allegedly aiding, not directly doing.
 

"In 2000 and 2001, defendant Clingman and others formed a company called Marquis Jet Partners, Inc. Marquis is one of a handful of fractional jet ownership companies that maintain fleets of aircraft and sell the rights to travel on those planes for fixed periods of time to frequent users of jet travel. In August 2002, Marquis terminated Clingman. Clingman retained 12% of Marquis common stock, and refused an offer to sell back his shares and sign a non-compete agreement.

In November of the same year, Clingman invited plaintiff McCagg to attend a meeting in Florida with the senior management of Flexjet/Bombardier, a Canadian jet manufacturer. The purpose of the meeting was to discuss creating a company to compete with Marquis. Clingman allegedly thought the new company could have a competitive advantage over Marquis by offering the sale of airplane usage in smaller blocks of time.

McCagg and Clingman decided to pursue the venture. On December 17, 2002, the law firm of Schulte Roth & Zabel (SRZ), handled the incorporation of the corporation, which was called Clearjets, in the State of Delaware. SRZ had done legal work for Clingman, and he recommended it to McCagg to handle the incorporation.

Two days later, on December 19, 2002, Marquis's counsel demanded that Clingman abandon any plans to engage in any venture that would compete with his former firm. The letter threatened that if Clingman did not accede, Marquis would take necessary legal action to protect its rights. SRZ responded by letter dated December 24, 2002. The correspondence stated, among other things, that Clingman had been terminated by Marquis, that he was not given any severance when he was terminated, that he had not executed a non-competition agreement, and that he was not otherwise bound to suspend involvement in any competing venture in the industry.

By complaint dated May 19, 2004, McCagg brought this action against the SRZ defendants and Clingman (the SRZ litigation). Clearjets was not a named plaintiff. The complaint contained eight causes of action. The first five were asserted against Clingman. They alleged: (1) breach of contract; (2) breach of fiduciary duty; (3) common-law fraud; (4) misappropriation of corporate opportunity and unjust enrichment; and (5) a claim for an accounting and constructive trust. The sixth through eighth causes of action were asserted against the SRZ defendants and certain SRZ partners. These claims were for: (6) breach of fiduciary duty; (7) aiding and abetting breach of fiduciary duty and fraud; and (8) legal malpractice. "

""[W]here the primary purpose for the creation of Clearjets was to compete with Marquis, I cannot say as a matter of law that Clingman's negotiation and execution of a non-competition agreement with Marquis, while still chairman and CEO of Clearjets, was not a breach of his fiduciary duty owed to Clearjets. Nor can I say, as a matter of law, based on the parties' submissions - including redacted and incomplete billing statements - that [the SRZ defendants] did not aid and abet Clingman in the alleged breach. As noted above, the statements show that [SRZ] advised Clingman on "all aspects of Marquis relationship including . . . non-competition and release agreements"

"The Marquis action and this SRZ litigation are separate lawsuits, and, under the express language of 8 Del Code § 278, Clearjets no longer existed when, more than three years after its dissolution, plaintiff moved to add it as a party in this action (see Marsh v Rosenbloom, 499 F3d 165, 172-73, 175 [2d Cir 2007]; In re Citadel Indus., 423 A2d at 502-503; Smith-Johnson S.S. Corp. v United States, 231 F Supp 184 [D Del 1964];). Finally, the motion court incorrectly concluded that because the derivative claims sought to be raised in this litigation related back to the commencement of the Marquis litigation (see CPLR 203[f]), they were not barred by 8 Del Code § 278. In view of these conclusions, we need not reach the SRZ defendants' contentions relating to the merits of a proposed seventh cause of action sought to be asserted derivatively by McCagg on behalf of Clearjets.

In the second order appealed, the motion court correctly ruled that plaintiff acted improperly in filing, without its permission, an amended complaint that differed substantially from the proposed amended complaint that the court had granted plaintiff leave to file in its August 4, 2008 order (see CPLR 3025[b]; cf. CPLR 2001]). Indeed, plaintiff's attorney conceded at the oral argument before the motion court that he should have obtained further permission to file the amended complaint. However, in view of this concession, our preference for resolving controversies on the merits (see Spira v New York City Tr. Auth., 49 AD3d 478 [2008]), and the absence of a pattern of willful or contumacious conduct by plaintiff (see Kaplan v KCK Studios, 238 AD2d 264 [1997]), it was an improvident exercise of discretion for the motion court to dismiss the amended complaint with prejudice (see Grant v Rattoballi, 57 AD3d 272, 273 [2008]; Kaplan, 238 AD2d at 264-265; cf. Corsini v U-Haul Intl., 212 AD2d 288, 291 [1995], lv dismissed in part and denied in part 87 NY2d 964 [1996]). "

The Law sites are consistently filled with stories of partners leaving firm A for firm B, and sometimes taking assoicates with them.  Law firms fold and are re-cast as new firms.  How does this restelss movement affect legal malpractice clients?

In The New Kayak Pool Corp. v Kavinoky Cook Llp ;2010 NY Slip Op 05176 ;Decided on June 11, 2010 ;Appellate Division, Fourth Department we see the Third Department's short-form answer. 
 

"Plaintiffs commenced this legal malpractice action seeking damages arising from defendants' alleged malpractice in failing to ascertain the existence of insurance coverage for the parties sued by plaintiffs in the underlying trademark infringement action. The same attorney represented plaintiffs throughout the course of that action. That attorney began representing plaintiffs in 1999 when he was a partner in defendant Kavinoky Cook LLP (Kavinoky). When he subsequently joined defendant Hodgson Russ, LLP (Hodgson), plaintiffs executed a consent to change attorney form in June 2003, thereby substituting Hodgson for Kavinoky as plaintiffs' attorney of record in the underlying action. That action settled in February 2004 and the instant action was commenced in January 2007.

Supreme Court properly denied the motion of Kavinoky seeking summary judgment dismissing the amended complaint and cross claims against it. Kavinoky contends that the action against it is time-barred because it was commenced more than three years after the attorney in question left Kavinoky and the consent to change attorney form was executed by plaintiffs (see CPLR 214 [6]). We reject that contention inasmuch as the statute of limitations was tolled by the doctrine of continuous representation during the time that the same attorney represented plaintiffs in the underlying action (see [*2]Waggoner v Caruso, 68 AD3d 1, 7, affd ___ NY3d ___ [May 11, 2010]; HNH Intl., Ltd. v Pryor Cashman Sherman & Flynn LLP, 63 AD3d 534, 535)"
 

This legal malpractice case has been active for 21 years, and dates from the Club dominated 1980's.  Plaintiff is a model-actor-club owner who has had a $ 1.25 million judgment from what is described as an accident.  "In December 1988, non-party David W. Ross ("Ross") allegedly had an accident and sustained injuries at the World Night Club (the "World" or "nightclub"), which was then jointly owned by Frank Roccio (Roccio) and Peter Frank (Frank). As a result, in November 1989, Ross brought suit against the World, El Mundo, Inc., and plaintiff, although plaintiff had not owned the World Club at the time of the accident. Plaintiff's then personal attorney, Oleh N. Dekajlo, Esq. ("Mr. Dekajlo") of Berns Dekajlo & Castro ("Berns Dekajlo"), who had represented plaintiff in the sale of his interests in the World nightclub, allegedly received a copy of the Summons and Complaint in October or November 1989. Allegedly, Berns Dekajlo did not notify plaintiff that Ross had sued him personally."

Thus starts the 21 year life of this legal malpractice case.  Garcia v. Berns Dekajlo & Castro, 106895/06;Decided: June 1, 2010;Justice Carol Robinson Edmead.  The court, after a thorough discussion of argument points, and the law concerning summary judgment determined;

"The Issler defendants entered into a retainer agreement with plaintiff and upon its execution, agreed to the express terms stated therein (see Maysek & Moran, Inc. v. S.G. Warburg & Co., Inc., 284 AD2d 203, 726 NYS2d 546 [1st Dept 2001]; see e.g., Ginther v. Scinta, 31 AD3d 1135, 818 NYS2d 376 [4th Dept 2006]). Under the Retainer Agreement, the Issler defendants were "to act as [plaintiff's] attorney…for the purposes of appealing the order…dated December 10, 2003 and…bringing on a motion to renew and/or reargue the motion which was decided by the aforesaid order" (emphasis added). Thus, arguably, the Issler defendants had an obligation to also renew the December 10, 2003 order. As such, the plain terms of the Retainer Agreement, while defeating plaintiff's claim that the Issler defendants had a duty to reargue the Court's January 3, 2002 order, arguably bound the Issler defendants to move to renew. Thus, it cannot be said that the Issler defendants had no obligation to move to renew the December 10, 2003 Order.

Further, contrary to Issler defendants' contention, it cannot be said, as a matter of law, that the Issler defendants did not commit legal malpractice by failing to move for renewal. It is uncontested that as relevant herein, a motion for leave to renew under CPLR 2221 "shall be based upon new facts not offered on the prior motion that would change the prior determination" and "shall contain reasonable justification for the failure to present such facts on the prior motion." The motion to renew, when properly made, posits newly discovered facts that were not previously available or a sufficient explanation is made why they could not have been offered to the Court originally (see discussion in Alpert v. Wolf, 194 Misc 2d at 133, 751 NYS2d 707; D. Siegel New York Practice §254 [3rd ed. 1999]). Further, to vacate a default judgment, plaintiff would have had to "demonstrate both a reasonable excuse and a meritorious defense" (Benson Park Associates, LLC v. Herman, 899 NYS2d 614 [1st Dept 2010] citing Mutual Mar. Off., Inc. v. Joy Const. Corp., 39 AD3d 417, 419, 835 NYS2d 88 [2007]). Thus, in order for the Issler defendants to move to renew, seeking to vacate the default judgment entered against the plaintiff, plaintiff via the Issler defendants would have to have shown not only a meritorious defense, but, that the three affidavits constituted newly discovered facts that were not previously available or a sufficient explanation as to why such affidavits "could not have been offered to the Court originally," and that such affidavits would have changed the Court's prior determination finding proper service.

It is clear to this Court that upon renewal of the motion to vacate the default judgment, plaintiff would have established the first prong of vacatur, i.e., he had a meritorious defense to Ross's Action. The documentary evidence established that plaintiff was not an officer nor did plaintiff have any interest in the World nightclub at the time of Ross's accident, and bore no responsibility for the injuries Ross sustained at the nightclub.

Further, contrary to the Issler defendants' contention, it cannot be said, as a matter of law, that the December 2003 order finding proper service upon plaintiff and consequently, jurisdiction, would have remained intact if the Issler defendants presented the three affidavits."

It's usually the Court of Appeals which issues a game changing decision, which sets stare decisis on its ear.  From time immemorial, the question of privity has predominated the estate legal malpractice area.  In essence, is the estate in privity with the attorney who set up the estate?   Mostly the answer was no.  Now, we have Estate of Saul Schneider v Finmann
2010 NY Slip Op 05281 ;Decided on June 17, 2010 ;Court of Appeals ;Jones, J.  The plain statement of the case is: "At issue in this appeal is whether an attorney may be held liable for damages resulting from negligent representation in estate tax planning that causes enhanced estate tax liability. We hold that a personal representative of an estate may maintain a legal malpractice [*2]claim for such pecuniary losses to the estate."
 

"Strict privity, as applied in the context of estate planning malpractice actions, is a minority rule in the United States [FN1]. In New York, a third party, without privity, cannot maintain [*3]a claim against an attorney in professional negligence, "absent fraud, collusion, malicious acts or other special circumstances" (Spivey v Pulley, 138 AD2d 563, 564 [2d Dept 1988]). Some Appellate Division decisions, on which the Appellate Division here relied, have applied strict privity to estate planning malpractice lawsuits commenced by the estate's personal representative and beneficiaries alike (Deeb v Johnson, 170 AD2d 865 [3d Dept 1991]; Spivey, 138 AD2d at 564; Viscardi v Lerner, 125 AD2d 662, 663-664 [2d Dept 1986]; Rossi v Boehner, 116 AD2d 636 [2d Dept 1986]). This rule effectively protects attorneys from legal malpractice suits by indeterminate classes of plaintiffs whose interests may be at odds with the interests of the client-decedent. However, it also leaves the estate with no recourse against an attorney who planned the estate negligently. "

"We now hold that privity, or a relationship sufficiently approaching privity, exists between the personal representative of an estate and the estate planning attorney. We agree with the Texas Supreme Court that the estate essentially "'stands in the shoes' of a decedent" and, therefore, "has the capacity to maintain the malpractice claim on the estate's behalf" (Belt v Oppenheimer, Blend, Harrison & Tate, Inc., 192 SW3d 780, 787 [Tex 2006]). The personal representative of an estate should not be prevented from raising a negligent estate planning claim against the attorney who caused harm to the estate. The attorney estate planner surely knows that minimizing the tax burden of the estate is one of the central tasks entrusted to the professional. Moreover, such a result comports with EPTL § 11-3.2(b)[FN2], which generally permits the personal representative of a decedent to maintain an action for "injury to person or property" after that person's death.

Despite the holding in this case, strict privity remains a bar against beneficiaries' and other third-party individuals' estate planning malpractice claims absent fraud or other circumstances. Relaxing privity to permit third-parties to commence professional negligence actions against estate planning attorneys would produce undesirable results — uncertainty and limitless liability. These concerns, however, are not present in the case of an estate planning malpractice action commenced by the estate's personal representative. "

We think the legal malpractice after a medical malpractice case is amongst the most difficult.  In order to proceed, the attorney must be well versed in both fields, and must understand the psychological set up necessary to succeed.  In our view, the psychological set up is that most courts are wary of medical malpractice cases, and even more wary of legal malpractice cases.  In this situation it's an exponential product that requires careful treading.

Here, in Healy v Finz & Finz, P.C. 05/19/2010 Other Courts 2010 NYSlipOp 31391(U) we see a clear explanation of the rules of summary judgment, with appropriate deference to questions of fact.  Plaintiffs claim that Finz & Finz negligently represented them in a medical malpractice and failed to name at least three doctors.  The complaint there was dismissed against two doctors, who would still be in the case but for the negligence.  In this case plaintiff mother was carrying triplets, two of whom were sharing a placenta.  One of the fetuses died.  One of the infants was born with periventricular leukomalacia.

"Summary judgment is not appropriate in medical malpractice actions where the parties adduce conflicting expert opinions.  Such credibility issues can only be resolved by the jury. Both plaintiff and defendant offered affidavits of Board Certified Obstetrical physicians which, in effect, cancelled each other.

Summary Judgment denied.

From the NYLJ on 6/16/10 by Nate Raymond:  "Dechert Loses Bid to Dismiss Suit Over Letter Used by Dreier."  The case is Fortress Credit Corp. v. Dechert LLP, 603819/2009

"Dechert has lost a motion to dismiss Fortress Investment Group LLC's $50 million lawsuit over the law firm's issuance of an "utterly false legal opinion letter" that ex-attorney Marc S. Dreier used in his $700 million scam. Manhattan Supreme Court Justice Charles Ramos (See Profile) last week called Dechert's motion "premature," according to a transcript. "This is really a summary judgment motion," he said. "After we have discovery, we'll know what we're talking about here. You are raising interesting issues, but I'm not going to dismiss any part of this complaint."

Dechert, which declined comment, was sued by Fortress in December over an opinion letter by the law firm that was used in Mr. Dreier's fraud. Fortress, which spent $125 million purchasing fake notes from Mr. Dreier, claimed in 2008 it required the lawyer to obtain an opinion letter from an "internationally recognized law firm" in connection with a $50 million loan he was arranging supposedly for his client, Solow Realty & Development Company. Mr. Dreier proposed Dechert, where then-partner Bruce Wood drafted the opinion letter.

Dechert in the letter said it represented developer Sheldon Solow and assured Fortress the deal was legitimate, according to the complaint, when in fact it was a "sham." Fortress argued Dechert misrepresented itself as lawyers to Solow Realty without doing "even the most basic due diligence" on the deal. Dechert contended it was not the firm's responsibility to ensure Mr. Solow's signatures were legitimate, and that the opinions themselves in the letter were accurate. The letter, included as an exhibit to the complaint, said Dechert had been retained by both Solow Realty and Mr. Dreier. Joel Miller, Dechert's lawyer at Miller & Wrubel, at the hearing last week said there "is nothing that says that Dechert cannot deal with one client or the other client."

Here are the minutes from the case.

. Defendants sometimes say that a legal malpractice case is a grudge match, or a lawsuit based solely upon pique.  Sometimes it is true, and the legal malpractice law suit serves as the last act of a badly ended attorney-client relationship. 

Here in this case, we have a pro-se plaintiff pursuing a pro-se defendant, over a case which was lost prior to plaintiff's retention of defendant in the underlying action.  in Kuzmin v Nevsky
2010 NY Slip Op 04959 ;Decided on June 8, 2010 ;Appellate Division, Second Department  plaintiff had already lost her employment discrimination case when she hired Nevsky.  From there, it went downhill.
 

"On May 17, 2001, the plaintiff, Tatiana Kuzmin, commenced an action against Visiting Nurse Service of New York (hereinafter VNS), Rockaway Home Attendant Services, Inc. (hereinafter Rockaway), and Oleg Beretsky, alleging sexual harassment, assault and battery, intentional infliction of emotional distress, and other causes of action. In an order dated November 13, 2002, the Supreme Court granted the motion of the defendants in that action to dismiss the complaint in that action, except for one cause of action alleging assault and battery, which was directed solely at Beretsky. Kuzmin retained the defendant, Lena Nevsky, as her attorney on January 31, 2003. Nevsky moved, on behalf of Kuzmin, inter alia, for leave to reargue Kuzmin's opposition to the defendants' motion to dismiss the complaint in the underlying action, and the Supreme Court denied the motion. The relationship between Kuzmin and Nevsky began to deteriorate, and Nevsky moved to withdraw as counsel in the underlying action on October 21, 2003. The Supreme Court granted Nevsky's motion to withdraw.  On April 10, 2007, Kuzmin filed a pro se complaint against Nevsky alleging legal malpractice. Nevsky moved to dismiss the complaint pursuant to CPLR 3211(a)(7). The Supreme Court denied the motion, stating that Nevsky failed to attach a copy of the complaint. Nevsky then moved, inter alia, for leave to renew her prior motion to dismiss, this time attaching a copy of the complaint. In an order dated May 15, 2009, the Supreme Court granted that branch of Nevsky's motion which was for leave to renew and, upon renewal, granted Nevsky's motion to dismiss the complaint. [*2]

Kuzmin also moved for leave to enter a default judgment based on Nevsky's failure to answer the complaint. In an order dated June 17, 2009, the Supreme Court denied the motion on the ground that the matter had been dismissed. Kuzmin appeals from the orders dated May 15, 2009, and June 17, 2009. We affirm. "

. 

Attorney represents X and then later represents X's opponent in litigation.  Aside from the fact that the opponent is X's mother, when does such representation cause a conflict and legal malpractice?  We see in Benaquista v Burke ;2010 NY Slip Op 04896 ;Decided on June 10, 2010
Appellate Division, Third Department  that there is no per se rule.
 

"Plaintiff and his mother co-owned two corporations and defendant represented the corporations in various matters. In December 2002, plaintiff was removed as an officer and director of one of the corporations. Shortly thereafter, his mother and the corporations commenced an action against him for, among other things, mismanagement and misappropriation [*2]of corporate funds. Defendant was the attorney of record for plaintiff's mother and the corporations in that action. Plaintiff then commenced this action alleging, as pertinent here, that defendant committed legal malpractice. In the complaint, plaintiff alleged that he had previously sought legal advice from defendant concerning business issues between plaintiff and his mother and, in doing so, he had discussed confidential legal and personal matters with defendant. Plaintiff asserted that defendant then used such confidential information against him in commencing the action on behalf of his mother and the corporations, as a result of which he had suffered damages.

In order to recover for legal malpractice, plaintiff must demonstrate that defendant "'failed to exercise the reasonable skill and knowledge commonly possessed by a member of the legal profession'" (Bixby v Somerville, 62 AD3d 1137, 1139 [2009], quoting Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 301-304 [2001]) and that plaintiff was damaged as a result of such negligence (see Bixby v Somerville, 62 AD3d at 1139). Nonetheless, as the proponent of a motion for summary judgment, defendant had the initial burden of establishing his prima facie entitlement to judgment as a matter of law (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). Defendant met this burden by proffering defendant's sworn affidavit, alleging that his firm had represented plaintiff's mother and the corporations prior to his representation of plaintiff — which consisted only of the incorporation of a business owned by plaintiff — and that no conflict of interest existed. In addition, defendant provided plaintiff's bill of particulars and asserts that it fails to specifically identify any personal or confidential information used by defendant against plaintiff or any damages suffered by plaintiff [FN2]. Thus, the burden shifted to plaintiff to raise a question of fact requiring a trial (see CPLR 3212 [b]; Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065, 1067-1068 [1979]).

Plaintiff's only opposition to defendant's cross motion was an attorney affirmation and various documents which, as relevant to this appeal, consisted primarily of billing records. Inasmuch as plaintiff failed to proffer any sworn allegations of an individual with personal knowledge of the relevant facts and the documents submitted were not in admissible form, his opposition was insufficient to sustain his burden of raising a triable issue of fact to defeat defendant's entitlement to judgment as a matter of law (see Alvarez v Prospect Hosp., 68 NY2d at 327; Zuckerman v City of New York, 49 NY2d at 562; Bixby v Somerville, 62 AD3d at 1139; Polyglycoat Ctr. of Conn. v Arace's Ford, 126 AD2d 844, 845 [1987]). Accordingly, Supreme Court properly granted defendant's cross motion for summary judgment dismissing the complaint. "

Attorney and law firm arrange a house sale from plaintiff to defendant in which the sale price is well below market, and plaintiff retains a life estate in the house.  At closing, everything starts to go wrong.  Seller is persuaded to take a mortgage, and the attorney agrees to file the mortgage as well as the life estate.  Neither is recorded.  Buyer then goes out and gets a mortgage almost three times the size of the sale price and defaults.  More than three years passes.  Has the statute of limitations passed?

In Lytell v Lorusso ;2010 NY Slip Op 04964 ;Decided on June 8, 2010 ;Appellate Division, Second Department we see a reversal of the dismissal of the legal malpractice case.
 

"Assuming that the legal malpractice causes of action accrued more than three years before this action was commenced (see McCoy v Feinman, 99 NY2d 295, 301; Ackerman v Price Waterhouse, 84 NY2d 535, 543; Melendez v Bernstein, 29 AD3d 872, 872; Alicanti v Bianco, 2 AD3d 373, 374), nevertheless, the complaint adequately alleged that the plaintiff was "left with the reasonable impression that [Levinson] was, in fact, actively addressing [his] legal needs" after the closing date (Shumsky v Eisenstein, 96 NY2d 164, 169). Thus the "pleading is sufficient to establish that the parties mutually contemplated that [Levinson's] work and representation for [the transaction] would continue after [the closing date] and, therefore, the continuous representation doctrine applies," and the statute of limitations was tolled (Symbol Tech., Inc. v Deloitte & Touche, LLP, 69 AD3d 191, 195; see Carnevali v Herman, 293 AD2d 698, 699; Khan v Hart, 270 AD2d 231). Levinson failed to demonstrate that the plaintiff knew or should have known that Levinson had stopped representing him in the matter more than three years before the action was commenced (cf. Santulli v Englert, Reilly & McHugh, 78 NY2d 700, 709). Accordingly, the legal malpractice claims should not have been dismissed since Levinson failed to establish that they were time-barred (see Zorn v Gilbert, 8 NY3d 933, 934; 730 J & J, LLC v Polizzotto & Polizzotto, Esqs., 69 AD3d 704; Town of Wallkill v Rosenstein, 40 AD3d 972, 974). In any event, we further note that "the plaintiff adequately pleaded facts which, if proven, would establish the existence of an equitable estoppel" in this case (Doe v North Shore Univ. Hosp., 28 AD3d 603, 604; see Simcuski v Saeli, 44 NY2d 442; General Stencils v Chiappa, 18 NY2d 125).

The Supreme Court properly denied that branch of Levinson's motion which was to dismiss the cause of action alleging fraud insofar as asserted against them, for failure to state a cause of action (see CPLR 3211[a][7]). "[T]he allegations in the complaint describe a case where a defendant has fraudulently and positively as with personal knowledge stated that something was to be done when he knew all the time it was not to be done and that his representations were false" (Channel Master Corp. v Aluminium Ltd. Sales, 4 NY2d 403, 407-408 [internal quotation marks omitted]; see Braddock v Braddock, 60 AD3d 84, 90; Romano v Key Bank of Cent. N.Y., 90 AD2d 679, 680). Moreover, the cause of action alleged in the complaint "is premised upon one or more [*3]affirmative, intentional misrepresentations . . . which have caused additional damages, separate and distinct from those generated by the alleged malpractice" (White of Lake George v Bell, 251 AD2d 777, 778; see Simcuski v Saeli, 44 NY2d 442, 451-452; Bernstein v Oppenheim & Co., 160 AD2d 428, 430). Additionally, the assertions in the complaint permit a reasonable inference of the alleged conduct (see Pludeman v Northern Leasing Sys., Inc., 10 NY3d 486, 492), and the complaint is otherwise "sufficient to advise [Levinson] of the incidents complained of" (Union State Bank v Weiss, 65 AD3d 584, 585; see CPLR 3116[b]). Thus the complaint adequately alleged fraud. "

In an unusual procedural setting, a suspended attorney's request for contingent legal fees in a medical malpractice action was denied by Justice Joan Carey, and then vacated by Justice Alice Schlesinger.  in Warren v Del Principio 06/02/2010 Other Courts.  Likely based upon her retiring last year, Justice Schlesinger took over her caseload, and likely took a second look at this case.

Here, the attorney was suspended for reasons other than this case,and presented evidence to show that his work led to a settlement of $ 100,000.  Is he then due a fee?  Justice Schlesinger thinks that he has at least made the first hurdle.

In his affidavit the attorney enumerated the services rendered to plaintiff before suspension from the practice of law, including the initial meeting with decedent, investigation of the merits of the case, consultation with an expert, commencement of a medical malpractice action, depositions and the discovery and securing of a $ 100,000 settlement offer, which was eventually taken. 

Details, Details!  Is this a Connecticut or a New York Case?  Is there standing or not?  Who has the right to sue the attorneys?  in JP MORGAN CHASE BANK, N.A.,  -against- LAW OFFICE OF ROBERT JAY GUMENICK, P.C., ET AL.,08 Civ. 2154 (VM);UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2010 U.S. Dist. LEXIS 53993;
May 26, 2010 we see the following:

"Under New York law, the relevant analytical approach to choice of law in tort actions is the "interest analysis," where "the law of the jurisdiction with the most significant interest in, or relationship to, the dispute" is applied. 3 Lazard Freres & Co. v. Protective Life ins. Co., 108 F.3d 1531, 1539 (2d Cir. 1997). And for contract claims, New York courts typically look to the "center of gravity" of the dispute or the "grouping of contacts" in the jurisdictions at issue, unless the policies underlying conflicting laws in a contract dispute are "readily identifiable and reflect strong governmental interests." Allstate, 613 N.E.2d at 940. Regardless of whether the center of gravity or interest analysis is applied, both require consideration of the facts and significant contacts underpinning the dispute. See id. ("[C]ritical to a sound [center of gravity] analysis is selecting the contacts that contain significance in the particular contract dispute."); see also Warshay v. Guinness PLC, 750 F. Supp. 628, 632 (S.D.N.Y. 1990), [*7] aff'd, 935 F.2d 1278 (2d Cir. 1991) ("[T]he facts or contacts which obtain significance in defining State interests are those which relate to the particular law in conflict.")
 

Perhaps its the economic downturn, perhaps just a coincidence, but we have heard of three "imposter" closing scenarios recently.  Here is one that stands out.  In Layton v Layton 06/04/2010 Other Courts 2010 NYSlipOp 31381(U)  wife and husband are divorcing, and the marital house is to go to the wife. A closing is scheduled, and defendant attorneys are there for the bank.  They are to earn $ 580 to be the settlement agent.  At the closing a man, with two forms of expired identification, appeared as husband.  He was not.

What remedies does husband have against the attorneys?  Here is the more interesting question.  If there is no privity between the husband and the settlement agent, does the settlement agent owe a fiduciary duty to the husband [as transferror}?  If the settlement agent owes a fiduciary duty, does presentation of a legal malpractice cause of action in addition to a breach of fiduciary duty cause of action doom the fiduciary duty cause of action?  Here is seems to have colored the picture to the detriment of plaintiff.  The general rule is that a breach of fiduciary duty which relies on the same facts as a legal malpractice cause of action is faulty.  How about a single cause of action on the one set of facts>

We do not know the answer to this question, but would a single cause of action for breach of fiduciary duty have succeeded? 

We're proud to announce that the New York Law Journal today published an article about Judiciary Law 487.entitled  An Explosion of Developments in Judiciary Law 487

"Legal concepts change by evolution and revolution. Evolution is the most familiar process in legal scholarship. A principle or a statute is analyzed, then re-interpreted in the light of newer or novel events. The basic principles remain in effect. An example of evolutionary change is seen in the process by which intangible computer files have come to be subjected to conversion analysis. Shmueli v. NRT N.Y. Inc., 68 AD3d 479 (2009). Another example is the gradual acceptance of e-mails in contract and communications law.

Revolutionary change is different and sudden. One example is the emergence of Judiciary Law §487 from its centuries long slumber. After a recent decision by the Court of Appeals on this ancient statute, the world of legal malpractice has been stood on its head. What was formerly an ill-known extreme fringe theory of law has burst into prominence and scholarly acceptance. Although the statute is more than 700 years old, it today stands in the mainstream."

Judiciary Law 487 may well be the newest oldest thing in legal malpractice.  Coming, as it does, from medieval England just after the Magna Carta, it is the oldest statute in Anglo-American jurisprudence.   As for continuity, this seems to be the only attorney-specific statute that has survived 100 years, much less 700+

Today, with a boost from the Court of Appeals, the limits of Judiciary Law 487 law are under tremendous expansion, with its outer edges being defined daily.  We'll comment on the expansion in coming articles.

Justice March Friedman, of Supreme Court, New York County recently decided Tanger v Ferrer  2010 NYSlipOp 31355(U) in which the third-party claim between attorneys was that DLA Piper, US LLP owed a duty to Eaton & Van Winkle LLP after plaintiff sued Ferrer and Eaton  for legal malpractice.  The malpractice is alleged to be the negligent preparation of thee tenders pursuant to CPLR 3219.  Eaton alleged, in its third-party complaint that the tenders were prepared while Eaton was employed by DLA Piper, while the last was prepared while Eaton was in his own firm.

Supreme Court dismissed the third party action,  The partnership agreement between Eaton and DLA did not provide for DLA to indemnify or provide contribution to Ferrer for the acts alleged in the complaint, and there were no facts alleged in the main action to support a claim against DLA for negligent supervision of or control of Ferrer's work.

The third party action was dismissed.

Is legal malpractice litigation held to a higher standard? Are there more motions to dismiss the complaint granted against legal malpractice complaints than against the rest of the law-o-sphere? We have no hard figures, but anecdotal evidence suggests that legal malpractice is held to a higher standard. As an example, how could Supreme Court and the Appellate Division see things so differently?

In Minsky v Haber ;2010 NY Slip Op 04754 ;Decided on June 1, 2010 ;Appellate Division, Second Department Supreme Court dismissed the action across the board. The Appellate Division held:

"Contrary to the determination of the Supreme Court, the motion of the defendants Eugene Haber, Edward Cobert, and Amy Cobert, individually and doing business as Cobert, Haber & Haber (hereinafter collectively the Haber defendants), to dismiss the complaint insofar as asserted against them pursuant to CPLR 3211 should have been denied. Affording the complaint a liberal construction, and according its factual allegations every possible favorable inference (see Leon v Martinez, 84 NY2d 83, 87-88; Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34, 38), we find that the complaint sufficiently stated distinct causes of action to recover damages for legal malpractice, breach of contract, breach of fiduciary duty, and fraud. With regard to the privity requirement of the legal malpractice cause of action, the plaintiff satisfactorily alleged that she was assigned a claim of right by her father sounding in legal malpractice against the Haber defendants, that the Haber defendants also were retained to represent her personal interests in addition to her father's interests, that she was also a third-party beneficiary of the representation of her father by the Haber defendants, and was injured by their alleged misconduct (see generally Nelson v Kalathara, 48 AD3d 528; Fredriksen v Fredriksen, 30 AD3d 370). The other causes of action are sufficiently different from the legal malpractice claim to survive that branch of the Haber defendants' motion which was pursuant to CPLR 3211(a)(7). [*2]

Furthermore, dismissal of the complaint as time-barred pursuant to CPLR 3211(a)(5) was error, since the plaintiff alleged facts supporting the application of the continuous representation doctrine to toll the statute of limitations for legal malpractice (see CPLR 214[6]; Griffin v Brewington, 300 AD2d 283; Mancino v Levin, 268 AD2d 507; Kuritsky v Sirlin & Sirlin, 231 AD2d 607), and the remaining causes of action also were timely interposed under the circumstances.

The Haber defendants' submission of documentary evidence did not conclusively establish a defense to the claims asserted by the plaintiff (see CPLR 3211[a][1]; see generally Held v Kaufman, 91 NY2d 425, 430-431; Leon v Martinez, 84 NY2d 83, 88; Peter F. Gaito Architecture, LLC v Simone Dev. Corp., 46 AD3d 530), but merely revealed the existence of factual questions with regard to the propriety of the Haber defendants' conduct. "

"

Its a most unusual case, and one rarely sees a law firm in Bankruptcy.   IN RE: THE LAW FIRM OF FRANK R. BAYGER, P.C., Debtor.09-CV-735A;UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NEW YORK;2010 U.S. Dist. LEXIS 51537;May 24, 2010, illustrates how tenacious a legal malpractice plaintiff may be.

"The events underlying the Bankruptcy Order trace back to a personal injury lawsuit that the debtor prosecuted in the late 1990s. In 1996, the debtor commenced a personal injury lawsuit in state court on behalf of Donald L. Dolson ("Dolson"). In the lawsuit, Dolson alleged that he suffered injuries when his head struck a screw sticking out of the side of a water slide at a local theme park. In August 2001, a jury awarded Dolson $ 15,000. The debtor timely took an appeal with the New York State Supreme Court, Appellate Division. That appeal never was perfected.

Bankruptcy proceedings against the law firm proceeded.  It would appear that there was no insurance for the legal malpractice case, which is now a claim.  As for now, plaintiff's claim in bankruptcy remains alive.  To what end, or how this will turn out, keep tuned.

Reading the decision in a case like this requires both a score card and a play diagram.  In LZG Realty LLC v H.D.W. 2005 Forest LLC  ;2010 NY Slip Op 50958(U) ; Decided on May 28, 2010
Supreme Court, Richmond County ; McMahon, J.  a series of real estate transactions led to mortgages, foreclosure and charges of professional negligence and fraud.
 

"These actions have been joined for trial and are brought by the first and second mortgagees to foreclose mortgages held against real property owned by defendant H.D.W. 2005 Forest LLC, ("H.D.W.") and guaranteed by defendant Eli Weinstein ("Weinstein"). Defendants Benjamin Hager, Esq. and Mallow Konstam & Hager, P.C. (collectively, the "Hager defendants") allegedly represented the mortgagor and Weinstein at the title closing and at both mortgage closings. "

"In its first claim against the Hager defendants, H.D.W. alleges that "[as] a result of Hager's negligence . . . H.D.W. is now defending itself in the foreclosure action brought by LZG and Tissa, and the premises has two invalid mortgages placed against them (sic)."

In seeking summary judgment dismissing this claim, the Hager defendants allege that Benjamin Hager never purported to represent either H.D.W. or Wolinetz, and argue that the claim sounds in legal malpractice and therefore must be dismissed as there is no privity between Hager and either H.D.W. or its alleged principal, Wolinetz.[FN6] "

"However denominated, it cannot be gainsaid that the pleadings herein give the Hager defendants notice of the transaction out of which H.D.W.'s claim purports to arise. CPLR 3017 allows the Court to grant "any type of relief... appropriate to the proof whether or not demanded." Here, the third-party complaint sets forth sufficient facts to state a claim upon which relief can be granted, and so long as that pleading can be read to embrace the elements of a provable claim, the fact that the pleading theorizes it as something else is immaterial (see e.g. McGinnis v. Bankers Life Co., 39 AD2d 393 [2nd Dept 1972]).

To that extent, so much of the Hager defendants' motion for summary judgment addressed [*8]to the third-party claim of professional negligence and grounded on the argument that "H.D.W. cannot establish privity, a necessary element in order to prove legal malpractice" is denied. "

In Reiver v Burkhart Wexler & Hirschberg, LLP ; 2010 NY Slip Op 04565 ; Decided on May 25, 2010 ; Appellate Division, Second Department we see the Appellate Division reversing  dismissal of a legal malpractice action under CPLR 3211.
 

The rules of CPLR 3211 motions are as well known to the parties and the Court.   Nevertheless, cases [especially in legal malpractice, we think] are routinely dismissed under CPLR 3211 after the rules are simply scrapped.

"In lieu of answering, the defendants moved to dismiss the complaint pursuant to CPLR 3211(a). In support of their motion, the defendants submitted the complaint, the affidavit of an attorney from another firm who was alleged by the plaintiffs to have been engaged by the defendants as a legal consultant, and copies of the invoices the defendants had sent to the plaintiffs. The Supreme Court granted the motion, concluding that the plaintiffs' allegations in support of the cause of action sounding in breach of fiduciary duty "are unsupported by any documentation, and without any affidavits from the plaintiffs that remed[y] such defect, the plaintiffs do not establish such a cause of action."

In considering a motion to dismiss pursuant to CPLR 3211, the court must afford the complaint a liberal construction and "determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88). "Whether a plaintiff can ultimately establish its allegations is not part of the calculus" (EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19). Contrary to the defendants' contentions on appeal, the allegations of the complaint are sufficient to state a viable cause of action sounding in breach of fiduciary duty. Furthermore, "CPLR 3211 allows plaintiff to submit affidavits, but it does not oblige him to do so on penalty of dismissal . . . [U]nless the motion to dismiss is converted by the court to a motion for summary judgment, he will not be penalized because he has not made an evidentiary showing in support of his complaint" (Rovello v Orofino Realty Co., 40 NY2d 633, [*2]635). Since the Supreme Court did not convert the defendants' motion into one for summary judgment, "the plaintiff[s] [were] not put on notice of any obligation to come forward with evidentiary support for [their] claims" (Russo v Macchia-Schiavo, 72 AD3d 786; see Nonnan v City of New York, 9 NY3d 825, 827). Thus dismissal pursuant to CPLR 3211(a)(7) was not warranted.

Moreover, the materials submitted by the defendants in support of their motion did not constitute "documentary evidence" within the meaning of CPLR 3211(a)(1) (see Fontanetta v John Doe 1,AD3d, 2010 NY Slip Op 02743 [2d Dept 2010]) and, in any event, did not "utterly refute[] plaintiff[s'] factual allegations, conclusively establishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; see Leon v Martinez, 84 NY2d at 88; Russo v Macchia-Schiavo, 72 AD3d 786; Martin v New York Hosp. Med. Ctr. of Queens, 34 AD3d 650). Thus, dismissal pursuant to CPLR 3211(a)(1) was not warranted. "

An oft repeated mistake in NY litigation, especially in NYC litigation is that of the leave to file a late notice of claim index number trap.  Put in short, plaintiff successfully seeks leave to file a late notice of claim, and then, using the same index number, files a summons and complaint against the governmental entity. This is a mistake, and will lead to dismissal.  Unless, Wait!  CPLR 2001 may apply and allow the Court equitably to fix the problem.  So we see a similar issue in MacLeod v County of Nassau ;2010 NY Slip Op 04344 ;Decided on May 18, 2010 ;Appellate Division, Second Department .
 

"In 2007, CPLR 2001 was amended to provide a measure of judicial forgiveness for certain mistakes that a plaintiff or petitioner might make with respect to the commencement of an action or special proceeding. On this appeal, the question presented is whether the plaintiffs, who filed a summons and complaint in a personal injury action with the appropriate clerk and within the applicable limitations period, but mistakenly filed those papers under the index number assigned to a related proceeding for leave to conduct pre-action disclosure that had been previously terminated, should, pursuant to the 2007 amendment to CPLR 2001, be deemed to have commenced the personal injury action on the date of that filing, where they later paid an additional index number fee. We answer that question in the affirmative.
 

On August 14, 2007, the MacLeods, intending to commence the personal injury action against the County and certain other defendants, filed a summons and complaint with the Nassau County Clerk. However, the MacLeods did not pay the filing fee, and failed to obtain a new index number. Rather, they mistakenly filed the summons and complaint under the index number assigned to the disclosure proceeding.

On August 17, 2007, the MacLeods served the County with the summons and complaint. Approximately three weeks later, the County interposed an answer, and made certain discovery demands. In its answer, the County did not raise any affirmative defense based on the MacLeods' mistake with respect to the commencement of a personal injury action.

Subsequently, one of the parties attempted to file a request for judicial intervention, in order to schedule a preliminary conference. At that point, it was discovered that the summons and complaint bore the index number assigned to the disclosure proceeding, which had been terminated upon the issuance of the judgment (see CPLR 5011; Towley v King Arthur Rings, 40 NY2d 129, 132). The MacLeods were then informed that the index number was "invalid" (cf. Mandel v Waltco Truck Equip. Co., 243 AD2d 542, 543).

Thus, on June 2, 2008, the MacLeods paid an additional index number filing fee, obtained a new index number, and filed a new summons and complaint under that index number. The complaint was identical to the complaint filed by the MacLeods under the index number assigned to the disclosure proceeding. "

Plaintiff is a Czech national, married to a US citizen.  Matrimonial litigation takes place here in NY, and an allegation is made that the husband fraudulently denied the existence of a child, avoided child support issues, and in general, lied.  Plaintiff, wife, had several attorneys, and alleges that she was shuttled between attorneys, one hiring the next for her.  How do the motions to dismiss play out?

Koch v Sheresky, Aronson & Mayefsky LLP , decided by Justice Goodman in Supreme Court, New York County, sets forth the rules and decides the case based upon those rules.  She determines the difference in litigation between suing your attorney [in legal malpractice terms] and suing your husband's attorney [in fraud terms.]

The Court also discusses redundancy of Judiciary law section 487 and the more general malpractice and fraud claims.  Does dismissal of one defendant's case require dismissal of other defendants' cases under "the law of the case"?  In this situation, no.

Justice Goodman quotes Peo. v. Evans 94 NY2d 499 (2000) for the holding that law of the case "does not contemplate that every trial ruling is binding on retrial: and that "distinctions must be made."

Reported in today's NYLJ, we see the tragic story of an arrest, an attorney who does little or nothing, a conviction and a world turned upside down.  Plaintiff  obtains reversal and acquittal, thus demonstrating "actual innocence."  Glassman v. Blau is Referee Doyle's decision on damages. 

"Defendant, an attorney, represented plaintiff in a criminal proceeding in New York Supreme Court, Criminal Term, based upon criminal charges for assault and battery and rape, as the result of claims made by defendant's ex-wife.

Defendant did no preparation for the trial; he failed to interview witnesses; he failed to keep in contact with the plaintiff, never returning telephone calls and e-mails; he failed to cross-examine the People's witnesses; he failed to put on any case for plaintiff and while originally informing the jury that plaintiff would testify, he failed to call plaintiff as a witness even though plaintiff wanted to testify.

Plaintiff was convicted of the felony of rape in the third degree and two misdemeanors of prohibited contact, on October 16, 2007." 

Nate Raymond  reports today: "Mr. Blau did not appear in the malpractice case, and the referee ordered judgment on default. Mr. Glassman will now seek to collect the sum, said his lawyer, Kenneth F. McCallion at McCallion & Associates in Manhattan. The decision in Glassman v. Blau, 111703/2008, by the referee, Nicholas Doyle, has given Mr. Glassman "some vindication with regard to his claims of being wrongfully and improperly and negligently represented by Mr. Blau," Mr. McCallion added.

The Special Referee's decision will appear on page 25 of the print edition of tomorrow's Law Journal.

"He hasn't quite been able to get his life back, and probably never will," Mr. McCallion said. However, the written decision and a judgment against Mr. Blau gives Mr. Glassman "some minimal satisfaction," Mr. McCallion said.

A call to the last known number for Mr. Blau found it had been disconnected. He did not respond to an e-mail seeking comment.

The judgment would be the latest in a string of problems facing Mr. Blau. The Appellate Division, First Department, suspended him in February 2008 after he allegedly misappropriated nearly $764,000 from three clients' funds. When Mr. Blau continued to practice law despite the suspension, the First Department disbarred him in October 2009. Other default judgments in suits by ex-clients have accumulated since the suspension."

Lurking in the back of the mind is the belief that all the work that has been put into this case may be for naught. 

Sometimes one reads a decision not knowing whether the court will dismiss or not dismiss.  Sometimes, the question is whether the attorney's acts amount to legal malpractice or breach of fiduciary duty.  Here, the Court points out exactly how it perceives the case.  In B&R Consol LLC v. Powell we see the story of an attorney who is accused of handling a loan, receiving the pay-off, holding the money and making believe that the loan was still in existence.

Is taking money from the client by withholding the pay-off sum legal malpractice or breach of fiduciary duty.  The Court finds that "However, this failure, the failure to keep the plaintiff apprised of the status of the loan, and the bad advice given were clearly not stand-alone errors by Powell.  All were committed in the service of hiding the loss caused by the misappropriation, or at best, constituted an excuse for the loss - an excuse that would not relieve Powell of liability in any event."

The Court found the "facts" asserted in opposition to be patently incredible, "even under the generous standards to be applied to such opposing proof under the authority regarding summary judgment...."  Summary judgment was granted to Plaintiff.

 Dupree v. Vorhees,  68 AD3d 807, remains an interesting case.  Traditionally this type of case has been out of bounds. For policy reasons, courts do not like suits against your adversary's attorney...they might come after every case if allowed. Here, however, after the Judiciary Law 487 claims were initially dismissed,, continued to remain dismissed on renewal, and then reversed on appeal.
 It is alleged that the husband's attorneys deceived the court on an Order to Show Cause application, which permitted a receivership to be established while the wife's attorney was kept from knowing about the application.

"Based upon events which occurred in an underlying divorce action, the plaintiff commenced this action against her former attorney, Oliver Raymond Voorhees III, her former husband's attorney, Karyn A. Villar, and Villar's law partner, Dorothy A. Courten. As is relevant [*2]to this appeal, the third cause of action sought damages for abuse of process against Villar and Courten, alleging that Villar made certain misrepresentations in applying for a receivership order in the underlying action. In the fourth cause of action, the plaintiff seeks treble damages against Villar and Courten under Judiciary Law § 487, alleging that Villar intended to deceive the court in connection with a receivership application. The complaint further alleged that because Courten and Villar were partners in the same law firm, Courten was vicariously liable for the damages the plaintiff sustained as a result of Villar's alleged wrongdoing. "

"The court determined that a subsequent decision of the Court of Appeals in Amalfitano v Rosenberg (12 NY3d 8) provided a reason for granting renewal, and, upon renewal, to deny that branch of the motion which was to dismiss the complaint as against Villar with respect to the Judiciary Law § 487 cause of action. The court, however, denied the plaintiff relief with respect to the Judiciary Law § 487 cause of action against Courten, noting that Judiciary Law § 487 is rooted in the criminal law and that it would be inconsistent with this history and the statute itself to hold a second attorney responsible for the deceit of another unless the attorney participated in or ratified the wrongdoer's actions. We disagree.

Partnership Law § 24 provides that "[w]here, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership, or with the authority of his copartners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act" (Partnership Law § 24 [emphasis added]). Partnership Law § 26(a)(1) provides that "all partners are liable . . . [j]ointly and severally for everything chargeable to the partnership under section[ ] twenty-four." The pivotal test for liability in this regard is whether the wrong was committed on behalf of and within the reasonable scope of the partnership business, not whether the wrongful act was criminal in nature, or whether the other partners condoned the offending partner's actions (see Rudow v City of New York, 642 F Supp 1456, affd 822 F2d 324; Muka v Wiliamson, 53 AD2d 950; see also Clients' Sec. Fund v Grandeau, 72 NY2d 62). Therefore, the Supreme Court erred in adhering to the determination in the order dated May 1, 2008, dismissing the Judiciary Law § 487 cause of action against Courten. "

Depositions usually are scheduled and taken without undue turmoil.  Recent changes to the rules concerning the behavior of counsel at depositions have further regulated the proceedings.  Counsel may no longer make talking objections, may not direct their client not to answer, except in rare circumstances, and must be polite.  We've not heard of any more "barking dog" depositions in which one attorney baits the other.

Where the deposition takes place is rarely a question of anything other than "your office or mine?" but in this case defendants demanded an in-person deposition of the plaintiff who could not travel to the US anymore.  Here, in Koch v. Sheresky, Aronson & Mayefsky LLP, 112337/07
Decided: May 13, 2010 we see how Justice Goodman solved the problem:
 

"Presumably based upon the document from the American Embassy, plaintiff contends that under the Immigration and Naturalization Act (8 USC §1182 [a] [9]), a new application for admission to the country can only be entertained toward the end of 2010. Defendants offer no proof to contest this statement.

Thus, all of the cases relied on by defendants in support of their motion to require plaintiff to submit to an examination in New York, are inapposite and in those cases travel to New York was within the power and control of the party whose deposition was sought.

Courts have often directed the deposition of a party by video-conference, where the party had difficulty obtaining, or had been denied, a visa, or because of stringent U.S. travel restrictions with respect to the country of residence of the party to be deposed. See Doherty v. City of New York, 24 AD3d 275 (1st Dept 2005) (affirming an order to take deposition in Ireland, where plaintiff was denied necessary visa, and directing plaintiff to pay costs of defendant's travel-related expenses); Semenov v. Semenov, 24 Misc 3d 1241(A), 2009 NY Slip Op 51836(U) (Sup Ct, Richmond County 2009)(granting application for live video-conference deposition of plaintiff and permission to use videotape at trial, where there were restrictive travel policies and stringent visa requirements for Latvian residents); Matter of Singh, 22 Misc 3d 288 (Sur Ct, Bronx County 2008)(permitting deposition of petitioner and other witnesses residing in India by video-conference, where affidavit submitted by attorney indicating that visa applications were denied by U.S. Embassy); Kirama v. New York Hospital, 13 Misc 3d 1246(A), 831 NYS2d 360, 2006 NY Slip Op 52356(U) (Sup Ct, NY County 2006) (ordering deposition by video conference in Morocco, where plaintiff could not obtain a visa and, thus, could not legally travel to the United States, despite her efforts and those of her counsel, her relatives and even the court). As in Kirama v. New York Hospital, plaintiff did not absent herself from New York in order to evade being deposed in New York, rather, she was required to leave the state because of the change in her immigration status (here, her conditional permanent resident status had expired).

Even assuming that, at some time in the future, plaintiff can obtain a visa to enter the United States her appearance will be completely dependent on the administrative process of the American Embassy and/or the Attorney General, who may grant exceptions to the normal requirements of the immigration law. 8 USC §1182 (d). Moreover, should the United States government again deny plaintiff's request for a visa, thereby precluding her appearance in New York for deposition and/or trial, her ability to proceed with this litigation could be severely hampered, despite the fact that her complaint survived defendants' motion to dismiss. Thus, it is preferable, for all parties, and for the court as well, that a reasonable process be provided to enable the oral examination of plaintiff by defendants to proceed, without the uncertainty involved in the visa application process.

In recent correspondence, counsel for plaintiff has offered to assume the costs of setting up a video-conference deposition, and to accommodate defendants' schedules, in light of the time difference between New York and Prague. Counsel for plaintiff has also offered to pay travel costs of counsel for defendants, should they agree to depose plaintiff in person in the Czech Republic. The court will offer defendants a number of alternatives, which would avoid any undue prejudice. See Wygocki v. Milford Plaza Hotel, 38 AD3d 237 (1st Dept 2007) (because a deposition in New York would impose an undue hardship on an elderly resident of Ireland, the alternatives of a deposition on written questions, a deposition in Ireland, a deposition by telephone or video deposition, or deposition in New York 30 days before trial avoided any undue prejudice to defendant)."

 What is a question of judgment, what is neglect of a case and what is ignorance of the rules in legal malpractice? Sometimes this is an easy question, other times, slightly more complex. in MCCORD -v.- O'NEILL,; No. 08-3096-cv ; Summary Order; UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT;2010 U.S. App. LEXIS 5139 we see the 2d Circuit's general definitions;
 

"Construing all the facts in McCord's favor, an independent review of the record shows that the district court properly granted O'Neill's motion for summary judgment. "To state a claim for legal malpractice under New York law, a plaintiff must allege: (1) attorney negligence; (2) which is the proximate cause of a loss; and (3) actual damages." Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006). Under this standard, "[a] complaint that essentially alleges either an 'error of judgment' or a 'selection of one among several reasonable courses of action' fails to state a claim for malpractice." Id. (quoting Rosner v. Paley, 65 N.Y.2d 736, 481 N.E. 2d 553, 554, 492 N.Y.S.2d 13 (N.Y. 1985)). And, in general, "an attorney may only be held liable for 'ignorance of the rules of practice, failure to comply with conditions precedent to suit, or for his neglect to prosecute or defend an action.'" Id. (quoting Bernstein v. Oppenheim & Co., 160 A.D.2d 428, 554 N.Y.S.2d 487, 489-90 (N.Y. App. Div. 1st Dep't 1990)).

Here, McCord's malpractice claim rested on the allegation that O'Neill's failure to contact Ron Lawrence, another employee of McCord's former employer, as a possible witness constituted [*4] negligence, and that, had Lawrence been a witness in his case, the district court would not have granted Airborne's motion for judgment of a matter of law and dismissed McCord's discrimination claims. O'Neill met his initial burden of demonstrating that his decision was a reasonable strategic choice by showing that the only information regarding Lawrence in McCord's possession at the time was Lawrence's "Summary of Disciplinary/Attendance History." This document showed that Lawrence, a Caucasian, had received much the same disciplinary treatment as McCord, undermining McCord's contention that calling Lawrence would have enabled him to demonstrate that his employer treated him less favorably than a similarly situated employee outside of his protected group. See Mandell v. County of Suffolk, 316 F.3d 368, 379 (2d Cir. 2003). As the district court correctly observed, McCord adduced no evidence in response suggesting that O'Neill's failure to contact Lawrence was negligent, or that this decision could have proximately resulted in the court's unfavorable decision in Hill."

One aspect of legal malpractice litigation is the failure to follow developments in the law.  Rules change and not keeping up with the changes leads to mistakes, criticism and, later, litigation.  The rules for non-party discovery have undergone some changes over the years, and today's decision is worth reading.

In Kooper v Kooper ; 2010 NY Slip Op 04147 ;Decided on May 11, 2010 ;Appellate Division, Second Department ;Angiolillo, J., J. the Court lays out an arc of procedure for non-party discovery.  Prior to 1984 a motion was required.  The rule was amended and then in 2002 the rule was amended again to allow for subpoenas instead of motions when seeking documents from a  non-party.  Now the rule again changes:
 

"Subsequent to Dioguardi, many of our cases involving nonparty discovery continued to hold that "special circumstances" must be shown (see e.g. Katz v Katz, 55 AD3d 680, 683; Moran v McCarthy, Safrath & Carbone, P.C., 31 AD3d 725, 726; Attinello v DeFilippis, 22 AD3d 514, 515; Tannenbaum v Tenenbaum, 8 AD3d 360; Lanzello v Lakritz, 287 AD2d 601; Bostrom v William Penn Life Ins. Co. of N.Y., 285 AD2d 482, 483; Tsachalis v City of Mount Vernon, 262 AD2d 399, 401; Mikinberg v Bronsther, 256 AD2d 501, 502; Matter of Validation Review Assoc. [Berkun- Schimel], 237 AD2d at 615; Wurtzel v Wurtzel, 227 AD2d 548, 549), while many of our most recent cases have avoided the "special circumstances" rubric (see e.g. Cespedes v Kraja, 70 AD3d 622; Step-Murphy, LLC v B & B Bros. Real Estate Corp., 60 AD3d 841, 843-844; Tenore v Tenore, 45 AD3d 571, 571-572; Smith v Moore, 31 AD3d 628, 629; Matter of Lutz v Goldstone, 31 AD3d 449, 450-451; Thorson v New York City Tr. Auth., 305 AD2d 666). In light of its elimination from CPLR 3101(a)(4), we disapprove further application of the "special circumstances" standard in our cases, except with respect to the limited area in which it remains in the statutory language, i.e., with regard to certain discovery from expert witnesses (see CPLR 3101[d][1][iii]). On a motion to quash a subpoena duces tecum or for a protective order, in assessing whether the circumstances or reasons for a particular demand warrant discovery from a nonparty, those circumstances and reasons need not be shown to be "special circumstances."

Whether or not our cases have applied the "special circumstances" standard, however, they contain underlying considerations which the courts may appropriately weigh in determining whether discovery from a nonparty is warranted. We look, then, to the reasoning in our cases to find guidance with respect to the circumstances and reasons which we have considered relevant to the inquiry with respect to discovery from a nonparty. Since Dioguardi, this Court has deemed a party's inability to obtain the requested disclosure from his or her adversary or from independent sources to be a significant factor in determining the propriety of discovery from a nonparty. A motion to quash is, thus, properly granted where the party issuing the subpoena has failed to show that the disclosure sought cannot be obtained from sources other than the nonparty (see Moran v McCarthy, Safrath & Carbone, P.C., 31 AD3d at 726; Tannenbaum v Tenenbaum, 8 AD3d at 360; Lanzello v Lakritz, 287 AD2d at 601; Tsachalis v City of Mount Vernon, 262 AD2d at 401; Matter of Validation Review Assoc. [Berkun-Schimel], 237 AD2d at 615), and properly denied when the party has shown that the evidence cannot be obtained from other sources (see Cespedes v Kraja, 70 AD3d at 722; Tenore v Tenore, 45 AD3d at 571-572; Thorson v New York City Tr. Auth., 305 AD2d at 666; Bostrom v William Penn Life Ins. Co. of N.Y., 285 AD2d at 483). Our cases have not exclusively relied on this consideration, however, and have weighed other circumstances which may be relevant in the context of the particular case in determining [*6]whether discovery from a nonparty is warranted (see Abbadessa v Sprint, 291 AD2d 363 [conflict in statements between the plaintiff and nonparty witness]; Mikinberg v Bronsther, 256 AD2d at 502 [unexplained discontinuance of the action against the witness, formerly a party]; Patterson v St. Francis Ctr. at Knolls, 249 AD2d 457 [previous inconsistencies in the nonparty's statements]).

We decline, here, to set forth a comprehensive list of circumstances or reasons which would be deemed sufficient to warrant discovery from a nonparty in every case. Circumstances necessarily vary from case to case.
 

When one reads a decision in a pro-se legal malpractice case strange facts often emerge.  Aponte v. City of New York Department of Corrections et al.,09-2634-cv UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT;010 U.S. App. LEXIS 9988 is no exception. 

Plaintiff has been litigating this case, in various forms, for a number of years.  It seems that plaintiff was now appealing from the denial of reconsideration of earlier decisions.  His argument is premised on legal malpractice, presumably the legal malpractice of his current attorney in the handling of the motions and reconsiderations motions. Now, plaintiff wants to re-open a 1998 appeal. 

"The district court did not abuse its discretion by denying Appellant's Rule 60(b) motion for reconsideration because it was premised on the legal malpractice of counsel and not the merits of the underlying litigation. Likewise, the additional evidence referenced by Appellant was in support of his claim of legal malpractice. See Boule v. Hutton, 328 F.3d 84, 95 (2d Cir. 2003) ("Rule 60(b)(2) provides relief when the movant presents newly discovered evidence that could not have been discovered earlier and that is relevant to the merits of the litigation."); see also Fed. R. Civ. P. 60(c)(1) (a motion for Rule 60(b)(2) relief must be made "no more than a year after the entry of judgment").

Appellant requests that we "reopen" his appeal docketed under 98-9067-cv. We construe this request as a motion to recall [*3] our mandate and to reinstate his appeal. Our "power to recall a mandate is unquestioned." Sargent v. Columbia Forest Prods., Inc., 75 F.3d 86, 89 (2d Cir. 1996). "However, this power is to be exercised sparingly . . . and reserved for exceptional circumstances." Id. (citations and internal quotation marks omitted). "'The sparing use of the power demonstrates it is one of last resort, to be held in reserve against grave, unforeseen contingencies.'" British Int'l Ins. Co. v. Seguros la Republica, S.A., 354 F.3d 120, 123 (2d Cir. 2003) (quoting Calderon v. Thompson, 523 U.S. 538, 549-50 (1998)). Appellant fails to make any such showing. The only explanation he offers for waiting almost ten years to raise these claims is that he only "recently" received this Court's decision in an "anonymous package," but concedes later in his brief that, in 2000, his counsel had informed him that his appeal, docketed under 09-9067-cv, had been decided. No argument is made as to why this Court should recall the mandate other than to request that we reopen the appeal so he can add a legal malpractice claim. See Singleton v. Wulff, 428 U.S. 106, 120 (1976) ("It is the general rule . . . that a federal appellate [*4] court does not consider an issue not passed upon below."). Accordingly, we find no manifest injustice would result from not recalling the mandate because any appeal would be meritless."
 

In Berry v Utica Natl. Ins. Group ;2009 NY Slip Op 06935 ; Appellate Division, Fourth Department we see a situation in which plaintiff was suing Utica National Insurance Group and evidently there was communication between plaintiff and the defendant law firm. "evidence that plaintiff contacted defendant concerning his dispute with Utica National does not establish the existence of an attorney-client relationship absent further evidence of an "explicit undertaking [by defendant] to perform a specific task" (Wei Cheng Chang v Pi, 288 AD2d 378, 380, lv denied 99 NY2d 501; see McGlynn v Gurda, 184 AD2d 980, appeal dismissed and lv denied 80 NY2d 988).

How do these situations arise? Generally, there are telephone calls, and even letters between the attorneys and the plaintiff over starting a law suit. We cannot say what the evidence in this case was, but in typical cases, either the attorney takes on tasks 1,2,3 but not 4 (where 4 is the case sued upon), or there are "agreements to agree" over a retainer agreement that never jell.

One solution that is raised in almost every advice article for attorneys is a retention/no retention letter that states affirmatively, for example, that "we are not retained nor will we be representing you in the -______________ case.

The general rule is that one may not sue an attorney, unless that attorney was working for you. Privity is the concept that the attorney was hired by you, and worked for you. You may not sue the other party's attorney, no matter how badly you were treated in court by that attorney.

As in all things, there are exceptions. Fraud, malicious behavior, and special circumstances might allow plaintiff to sue an attorney not his own. It did not work in this case, however. Fred W. Nelson, etc., respondent, v Stanley Kalathara, v. Claude Simpson, SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT 2008 NY Slip Op 1313;

"A predecessor guardian had sold property belonging to the incapacitated person. The lawyer represented the purchasers and the purchasers' lender in that transaction. The successor guardian alleged that the predecessor guardian misappropriated, inter alia, funds that were received from that closing that belonged to the incapacitated person. The appellate court held that the successor guardian's allegations against the lawyer, that by virtue of his role in the real property sale, he knew or should have known that the incapacitated person would rely on his skills as an attorney to issue checks payable to the guardian, and not to the predecessor guardian individually, did not fall within the narrow exception of fraud, collusion, malicious acts, or other special circumstances under which a cause of action alleging legal malpractice may have been asserted absent a showing of actual or near-privity. "

For those who grew up in the shadow of WWII, the Nazis were a foreboding presence.  The war was over for the parents, and children learned of the war, the atrocities and the aftermath.  For the family in this case, Matter of Jacobsen ;2010 NY Slip Op 50816(U) ;Decided on May 10, 2010
Sur Ct, Monroe County , even in upstate NY, the war has never really ended.  Now, after a trip to the SDNY, the 2d Circuit and back, a legal malpractice portion ends.
 

"This case primarily comes before this Court to determine which of the parties is entitled to seek restitution for assets that were confiscated by the Nazi party in Germany in 1939. The Decedent, Gabriella Jacobsen, and her sister, Marianne Reitz Baer, were each entitled to half of the estate of Clara Kirstein, their mother, upon Clara's death in Leipzig, Germany in 1939. However, upon Clara's death, those assets ("the Kirstein Assets") were confiscated from the estate, and therefore did not pass to Gabriella and Marianne. Gabriella died on December 8, 1957 in Monroe County, New York survived by her husband, Erich Jacobsen, an infant son, Godfrey Jacobsen, and other family members, including the Petitioner, Thekla Stein Nordwind, and the remaining surviving distributees, Greta Hoerman, Peter Franke-Ruta and Michael Franke (collectively "the Nordwind Parties").[FN1] Gabriella's will, which left her estate to her husband, Erich Jacobsen, was admitted to probate on January 21, 1958. Erich Jacobsen died on December 16, 1977. Pursuant to Erich's will, his residuary estate passed to his son, Godfrey Jacobsen. Godfrey Jacobsen died on August 10, 1980, and left his residuary estate to Christel Gauger, who was not a blood relative of Godfrey or his parents, Gabriella and Erich Jacobsen. Christel Gauger died on September 23, 2008, a resident of Germany, and Dr. Michael Gauger ("Dr. Gauger" or "Respondent") was appointed as the German equivalent of her Executor and residuary beneficiary. Thekla Nordwind was appointed administrator of the Estate of Gabriella Jacobsen by this court on July 7, 2009 in order to pursue the Kirstein Assets.
 

No claim for restitution for the Kirstein Assets was filed by the June 30, 1993 deadline, so recovery was later sought through the Claims Conference, an organization that established a Goodwill Fund for those who did not file claims before the GPCA deadline. The Nordwind Parties retained an attorney, David J. Rowland, Esq., to file a claim with the Claims Conference on their behalf. Through circumstances that are not before this Court, in the end Mr. Rowland filed a claim on behalf of Ms. Gauger while arguably still representing the Nordwind parties, and obtained an Erbschein (a German certificate of inheritance) from the German Courts that established Ms. Gauger's rights to pursue reparations for the Kiersten Assets due to her being Godfrey Jacobsen's proper "legal successor" pursuant to the terms of the GPCA.

The issue sought to be determined by this Court, i.e., whether the Nordwind Parties are entitled to the right to pursue reparation under German Law, has been previously decided by the United States District Court for the Southern District of New York, in Nordwind v. Rowland, 2007 WL 2962350 (S.D.NY Oct. 10, 2007) (Pogue, J., sitting by designation) (the "Federal Court Action"). The Southern District's decision was later affirmed by the United States Court of Appeals for the Second Circuit (Nordwind v. Rowland, 584 F.3d 420 (2d Cir. 2009), and the Nordwind Parties' petition for panel rehearing before the United States Court of Appeals for the Second Circuit was denied (Order, Docket Number 07-4862-cv, (Dec. 10, 2009)). Despite the fact that the issue currently before this Court was raised in the context of the malpractice action against Mr. Rowland, the District Court fully addressed, under both German and New York law, whether the Nordwind [*3]Parties had an entitlement to the Kirstein Assets that originally would have gone to Gabriella Jacobsen.

The District Court completely determined the issue presented by the instant petition based both on German and New York law such that there is no ruling this Court could make on this matter that would not be barred by collateral estoppel."

Plaintiff's practitioners are caught between a rock and a hard place when deciding how much to put in the ad damnum clause.  Is $ 1 Million too little or too much?  these legal malpractice defendant attorneys forgot  the rule that no actual amount must be pled... So, they demanded $ 1 Million, and got a verdict for $ 2 million.  What to do?

In Ambra v. Awad, 487/05;Decided: April 13, 2010;Justice F. Dana Winslow;NASSAU COUNTY
Supreme Court we see how the problem plays out:

"Plaintiff JOHN AMBRA ("AMBRA") brings this action against his former attorneys, defendants JOSEPH P. AWAD ("AWAD"), SILBERSTEIN, AWAD & MIKLOS, P.C. and GREGORY D. BELLANTONE ("BELLANTONE") (collectively, the "SILBERSTEIN, AWAD defendants" or "SILBERSTEIN, AWAD"), for losses incurred as a result of their alleged legal malpractice in a personal injury action entitled John Ambra v. Makko of Brooklyn, Ltd., Index No. 27901/98, Supreme Court, Kings County (the "Personal Injury Action"). The Court refers to the prior order of this Court entered September 20, 2007 [16 Misc.3d 1128(A)] (the "Prior Order"), and the decision of the Second Department affirming the Prior Order as modified [62 AD3d 732], for a complete recitation of the facts and procedural history of this action.

On April 15, 2002, Makko's excess insurer, with whom Makko had a $5,000,000 policy, disclaimed coverage on the basis of late notice. The disclaimer letter was forwarded to SILBERSTEIN, AWAD. On or about May 17, 2002, SILBERSTEIN, AWAD filed a written motion to increase the ad damnum. Before that motion was decided, AMBRA agreed to a settlement of the Personal Injury Action for $1,000,000, the amount of the primary insurance policy. A General Release was forwarded to AMBRA on or about May 29, 2002, and signed by AMBRA on June 17, 2002. The settlement resulted in a net recovery to AMBRA, after costs, expenses and attorneys fees, of $658,917.37. On or about July 8, 2002, SILBERSTEIN, AWAD sent a check to AMBRA (after deducting the amount of the workers' compensation lien) in the amount of $626,172.41.

AMBRA brought the instant action against the SILBERSTEIN, AWAD defendants, alleging, in sum and substance, that as a result of their negligence or malpractice, AMBRA was deprived of full recovery of the damages awarded to him by the jury. The Amended Complaint originally included four causes of action. The SECOND and THIRD causes of action were dismissed by this Court in the Prior Order, and the dismissal was affirmed by the Appellate Division.

On the evidence presented, the Court cannot find, as a matter of law, that the SILBERSTEIN, AWAD defendants were not negligent in their advice to AMBRA regarding the resources of Makko available to satisfy the verdict. The investigation regarding the potential assets of Makko is described in the BELLANTONE Affidavit. BELLANTONE states that he went to Makko's premises to view the property and operations. In addition, "[s]omeone from the firm conducted an internet investigation, went to the county clerk's office or consulted with a realtor to determine that Makko did not own its buildings…During the deposition of the witness from Makko in the underlying case, I inquired about Makko's operations, contracts and assets… . Prior to the trial of the underlying matter, I determined that Makko had a few trucks and a contract with Yankee Stadium to deliver pretzels and was an ongoing business. This was discussed with plaintiff." [BELLANTONE Affidavit, ¶¶5-8.]

The description of BELLANTONE's investigation is imprecise at best. To the extent that BELLANTONE relied on public records or reports regarding the financial condition of Makko at the time of settlement, he did not attach or incorporate specific reference to them in his Affidavit. To the extent that BELLANTONE relied on the deposition of a principal of Makko in the underlying trial, he also did not attach or incorporate specific testimony from the transcript of that deposition."

We think there is no more difficult case in litigation than a legal malpractice action arising from a medical malpractice case.  The issues of proximity and "but for" multiply and boggle the mind.  One needs a medical expert as well as a legal expert, and while having to prove the causation in a medical malpractice case, hypothetically is difficult anyway, moving on to prove the causation in the legal malpractice portion squares rather than doubles the effort.

In Palumbo v Dell ; 2010 NY Slip Op 03889 ; Decided on May 4, 2010 ; Appellate Division, Second Department we see an example. In a simple situation in which the note of issue was not timely filed, plaintiff loses the whole case for lack of a medical expert.  Note that suing the attorney who did not file the note of issue is practically impossible, as proximate cause now must be proven to the 4th power.
 

"An action dismissed pursuant to CPLR 3216 may be restored only if the plaintiff can demonstrate both a reasonable excuse for the default in complying with the 90-day notice and a meritorious cause of action (see Picot v City of New York, 50 AD3d 757; Sapir v Krause, Inc., 8 AD3d 356, 356-357; Lopez v Imperial Delivery Serv., 282 AD2d 190, 197). Here the plaintiff failed to demonstrate the merits of his legal malpractice action, which alleged that the defendants were negligent in failing to pursue a strict products liability claim against the manufacturer of a phacoemulsification unit utilized during the plaintiff's cataract surgery. Notably, the record is devoid of any expert medical evidence establishing the merits of the products liability claim, and there is no other showing that the plaintiff would have succeeded on such a claim (see N.A. Kerson Co. v Shayne, Dachs, Weiss, Kolbrenner, Levy & Levine, 45 NY2d 730, 732; Matera v Catanzano, 161 AD2d 687, 688; see also Ideal Steel Supply Corp. v Beil, 55 AD3d 544; Payette v Rockefeller Univ., 220 AD2d 69, 74). Accordingly, the Supreme Court [*2]properly denied the plaintiff's motion (see Mosberg v Elahi, 80 NY2d 941, 942; Serby v Long Is. Jewish Med, Ctr., 34 AD3d 441). "
 

Sometimes, the highest court in the State answers the questions, and sometimes its the lowly Civil Court.  In Kushner v Eliopulos ;2010 NY Slip Op 50798(U) ;Decided on May 3, 2010 ;Civil Court Of The City Of New York, Kings County ;Fisher, J. we see a comprehensive decision setting forth all aspects of attorney-client compensation.
 

"[Despite the fact that Defendants failed to sign the retainer agreement, there was an implied promise that Defendants would pay the costs for Plaintiff's legal services. Plaintiff proffered an agreement which the Defendants rejected. The absence of a signed written retainer agreement does not preclude the recovery of legal fees. Minz v. Gold, LLP v. Hart, 48 AD3d 526 (2nd Dept. 2008). An attorney who fails to obtain a written retainer agreement may recover the reasonable value of services rendered on a quantum meruit basis. Seth Rubenstein, PC v. Ganea, 41 AD3d 54 (2nd Dept. 2007); Volosevich v. Nunziata, 2008 NY Slip Op 51697U (NY Sup. Ct. 2008).
 

It is well established that a client may terminate his relationship with an attorney at any time with or without cause. Friedman v. Park Cake, Inc., 2006 NY Slip Op 8171 (1st Dep't 2006); Campagnola v. Mulholl, 76 NY2d 38 (1990). Defendants terminated Plaintiff on April 15, 2009. When an attorney is discharged for cause, the attorney has no right to compensation or a retaining lien, notwithstanding a specific retainer agreement. Id. When an attorney is discharged without cause, the attorney is limited to recovering in quantum meruit for the reasonable value of the services rendered. Id.

An attorney who is discharged without fault has an immediate right to recover the fair and reasonable value of the services rendered, determined at the time of discharge, and computed on the basis of quantum meruit, namely the value of the services. Cohen v. Grainger, Tesoriero & Bell, 81 NY2d 655 (1993); Lai Ling Cheng v. Modansky Leasing Co., 73 NY2d 454 (NY 1989); Reubenbaum v. B. & H. Express, Inc., 6 AD2d 47 (1st Dep't 1958); In re Estate of Montgomery, 272 NY 323 (1936). If a client exercises the right to discharge an attorney after some services are performed, but prior to the completion of the services for which the fee was agreed upon, the discharged attorney is entitled to recover compensation from the client measured by the fair and reasonable value of the completed services. Id. at 454; In re Cooperman, 83 NY2d 465 (1994). In general, factors to be considered include: (1) the time and labor required, the difficulty of the questions involved, and the skill required to handle the problems presented; (2) the lawyer's experience, ability, and reputation; (3) the amount involved and benefit resulting to the client from the services; (4) the customary fee charged for similar services; (5) the contingency or certainty of compensation; (6) the results obtained; and (7) the responsibility involved. Diaz v. Audi of Am., Inc., 2008 NY Slip Op 10118, 2 (2d Dep't 2008); Matter of Thompson, 2009 NY Slip Op 7855, 2 (2d Dep't 2009).

An attorney's alleged violation of a disciplinary rule does not, by itself, give rise to a private cause of action. Steinowitz v. Gambescia, 2009 NY Slip Op 51370U, 2 (NY App. Term 2009). However, in some cases conduct constituting a violation of a disciplinary rule may constitute evidence of malpractice. Steinowitz v. Gambescia, 2009 NY Slip Op 51370U, 2 (NY App. Term 2009). In legal malpractice actions the claimant must establish that "but for" the attorney's negligence the result of the prior case would have been more favorable. Carmel v. Lunney 70 NY2d 169 (1987); Lemke v Zurich N. Am., 2009 NY Slip Op 29545 (NY Misc. 2009). "
 

It is said that problems, or bad things, come in threes.  In this example, the client lost a contract action, in which he had good counterclaims, because of his attorney's failures.  Plaintiff then sues the attorney, and in Benson Park Assoc., LLC v Herman ;2010 NY Slip Op 03847 ;Decided on May 6, 2010 ;Appellate Division, First Department  the defendant attorney defaulted on an answer.  Then, the attorney for defendant apparently defaulted on the motion for partial summary judgment itself.
"In the underlying action, defendant failed timely to file an answer on behalf of plaintiff, and a default judgment was entered against it (Mega Constr. Corp. v Benson Park Assoc. LLC, 60 AD3d 826 [2d Dept 2009]).

A party seeking to vacate a judgment on the basis of excusable default must demonstrate both a reasonable excuse and a meritorious defense (Mutual Mar. Off., Inc. v Joy Const. Corp., 39 AD3d 417, 419 [2007]). The court properly denied defendant's third request for an adjournment of plaintiff's motion for
partial summary judgment (see Matter of Desmond K. v Kevin K., 59 AD3d 240 [2009], lv denied 12 NY3d 711 [2009]; Treppeda v Treppeda, 212 AD2d 592 [1995]). While in support of the motion to vacate the default, defendant claimed that he had had a "previously scheduled engagement," he offered nothing to substantiate this claim. Moreover, at no time after the motion for partial summary judgment was submitted did defendant seek leave to submit opposition. In addition, defendant failed to offer a meritorious defense to the malpractice claim, other than to question the amount of damages. "

It is an anachronism in New York practice that there is no specific time in which to name an expert.  While the 3d and 4th departments have rules that derive from case law [and not specifically, the CPLR], the 1st and 2d Departments are much looser.  In general, a "reasonable time" period obtains.  There are some courts which will require that the expert be named 30 days or 15 days prior to trial,  there is no unanimity of what day that might be.  Is it the first day of jury selection?  is it the first day of testimony? 

On a finer level of analysis is the relationship of naming an expert pursuant to CPLR 3101 and motions for summary judgment.  In the 2d Department, especially Kings County, a body of law has arisen which holds that one must name an expert and serve a CPLR 3101 notice prior to the note of issue.  Here is an excerpt from Sierra v. D'Apuzzo, 6321/08;Decided: April 21, 2010;Judge Robert J. Miller;KINGS COUNTY;Supreme Court

"Before the Court considers whether the landlord caused or created the condition or had actual or constructive notice of the condition, the Court must first address the threshold issue of whether the plaintiff's expert's affidavit should be considered in opposition to the defendant's motion. The defendant in reply to the plaintiff's opposition asserts that the Court should reject the plaintiff's expert's report pursuant to Construction by Singletree, Inc. v. Lowe, 55 AD3d 861 [2d Dept 2008]. The Appellate Division, in Singletree rejected a plaintiff's expert affidavit in opposition to the defendant's motion for summary judgement because the plaintiff's expert was not identified until after the note of issue and certificate of readiness were filed and the plaintiff offered no valid excuse for failure to give notice of the expert.

Here, plaintiff filed her note of issue and certificate of readiness attesting to the completion of discovery on July 29, 2009. The defendant moved for summary judgment on September 25, 2009. Plaintiff served her CPLR3101(d) response on October 12, 2009 and did not serve her expert affidavit until she served her opposition to the defendant's summary judgment motion. Plaintiff offers no excuse for the delay.

However, at oral argument on the motion, the plaintiff raised the issue that the defendant did not serve his expert's affidavit until the defendant submitted his summary judgment motion. The Court has not been provided with any discovery orders issued prior to the note of issue and certificate of readiness and therefore cannot opine on what demand or schedule of exchange may have been agreed upon by the parties. Any exchange of expert reports to be used in a summary judgement motion should have been exchanged prior to the note of issue and certificate of readiness following the ruling in Singletree.

The Court notes that the plaintiff's expert Robert C. Schwartzberg's report indicates he visited the scene of the accident on July 27, 2009 (two days prior to the note of issue and certificate of readiness were filed) and wrote a report dated August 20, 2009. The defendant's expert, Mark I. Marpet, visited the scene on September 10, 2009 and wrote a report dated September 22, 2009.

Here, since both parties submit expert reports that are written after the note of issue and certificate of readiness were filed, the Court, in its discretion, declines the defendant's request to reject the plaintiff's expert report and considers both the defendant's and the plaintiff's expert reports. (Howard v. Kennedy, 60 AD3d 905 [2d Dept 2009].)"

 Here is a short decision with deep reaching consequences.  In Kurman v Schnapp ;2010 NY Slip Op 03786 ;Decided on May 4, 2010 ;Appellate Division, First Department we see the deceitful act of an attorney, and the Appellate Division substituting its finding for that of Supreme Court.  We have commented on the natural inclination of attorneys, applying rules of attorney behavior to other attorneys, to minimize and overlook.  How, one asks, could Supreme Court have come to such a different conclusion from the Appellate Division?
 

"Plaintiff stated a cause of action under Judiciary Law § 487 by alleging that defendant deceived or attempted to deceive the court with a fictitious letter addressed to him from the former licensing director of the City's Taxi and Limousine Commission (TLC) that stated, inter alia, that plaintiff was under a lifetime ban on owning any licenses with the TLC (see Amalfitano v Rosenberg, 12 NY3d 8, 14 [2009]). Plaintiff further sufficiently alleged specific damages that could not have occurred in the absence of defendant's conduct (see id. at 15). The 2008 affidavit by the TLC's former licensing director offered by defendant in support of his motion fails to demonstrate conclusively that plaintiff has no cause of action (see Lawrence v Graubard Miller, 11 NY3d 588, 595 [2008]).

Plaintiff's breach of fiduciary duty cause of action is not duplicative of his legal malpractice cause of action, since it is premised on separate facts that support a different theory (see Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 58 AD3d 1, 9-10 [2008]; Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 271 [2004]. As alleged, plaintiff's breach of fiduciary duty claim arose in December 2006, when defendant commenced his litigation activities against plaintiff in the Westchester County Supreme Court action, and continued through defendant's 2007 disqualification from representing the Queens Medallion Leasing Inc. defendants, and thereafter. In contrast, plaintiff's legal malpractice claim is based upon defendant's alleged 2005 and 2006 "communications with the TLC that may have left the impression that [defendant] was still representing [plaintiff] at that time."

Lamont Dozier, author of "Baby I need your Loving" [the Four Tops], "Baby Love", "Back in my Arms Again", "Come See about Me" [The Supremes] and many many others, got snagged in the Pullman financing scheme. the Pullman Bonds.  Before him, David Bowie was the recipient of the financing arrangement.

In LAMONT DOZIER, Plaintiff, - against - WILLKIE FARR & GALLAGHER LLP, DEUTSCHE BANK TRUST COMPANY AMERICAS ;  09 Civ. 9865 (LMM); UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2010 U.S. Dist. LEXIS 42321; April 26, 2010, Decided  we see a simple discussion of amendment of pleadings.

The motion for leave to amend is denied, first, because it contravenes the November 9, 2009 stipulation and, second, because amendment as to Willkie (against whom, alone, the new claim is asserted) would be futile as time-barred.

The proposed second amended complaint identifies and describes the transaction which is (as alleged in the new fourth claim against Willkie. (Proposed Second Am. Compl. P 37) "the subject matter of this litigation," as follows:
In or about June 2, 1998, Defendant Willkie represented Dozier in a securitized transaction (the "Transaction") entered into by Dozier with entities and individuals identified as David Pullman (hereinafter "Pullman") and Fahnestock & Company (hereinafter "Fahnestock") wherein the Transaction was to provide revenue to Dozier through the securitization of his future stream of music, entertainment and intellectual property royalties.
(Id. P 8.)

"An action to recover damages arising from an attorney's malpractice must be commenced within three years from accrual." McCoy v. Feinman, 99 N.Y.2d 295, 301, 785 N.E.2d 714, 755 N.Y.S.2d 693 (2002) (citing N.Y.C.P.L.R. § 214(6) ) . "An action [*4] to recover damages for legal malpractice accrues when the malpractice is committed." Shumsky v. Eisenstein, 96 N.Y.2d 164, 166, 750 N.E.2d 67, 726 N.Y.S.2d 365 (2001) (citation omitted). More than three years has, plainly, passed since the 1998 malpractice alleged by plaintiff.
 

In Macdonald v Guttman ;2010 NY Slip Op 03519 ;Decided on April 29, 2010 ;Appellate Division, Third Department  one gets a whif of some questionable behavior.  Plaintiff is the wife in a divorce action.  A footnote to the dcision tells us of the Husbands situation: "  Footnote 1:According to the complaint, Lucenti suffered from mental illness that occasionally required hospitalization, and he was alleged to have been institutionalized at a mental health facility at the time that plaintiff commenced the divorce action. Seven months later, Lucenti executed the stipulation pro se. "
 

The divorce was completed and each side agreed that their securities were to be jointly held, and all dividents reinvested.  Soon after, it became apparent that the wife was not re-investing dividends, and the case devolved into a referee's search for assets.  It turns out that the wife eventually got "$89,323 in dividends from the jointly held securities and plaintiff received $5,176. "
 

So, "When plaintiff and Lucenti could not reach an agreement regarding the distribution of the securities, and after hearing arguments of counsel, Supreme Court (Relihan Jr., J.), in a November 2003 order, determined that all the securities listed in the referee's report were marital property, and redistributed them almost evenly between plaintiff and Lucenti based on their value at the time of the 1996 stipulation. A notice of appeal was filed by plaintiff, but defendant failed to timely perfect the appeal. In December 2005, this Court denied defendant's motion seeking an [*3]extension of time to perfect the appeal. Plaintiff then commenced this legal malpractice action against defendant and his law firm, claiming that, but for defendant's failure to perfect the appeal, she would have been successful on the appeal on the ground that, in its November 2003 order, Supreme Court improperly set aside the provisions of the stipulation in redistributing the parties' securities. Supreme Court (Garry, J.) granted defendants' motion to dismiss the complaint for failure to state a cause of action. Plaintiff appeals, and we now affirm. "

A recurring theme in legal malpractice litigation is the law firm which takes on a case, and just days before the statute of limitations runs out, says, we don't want the case.  Courts often accept this type of behavior, reasoning that if the client has a good case, there are many attorneys who would take it, and if it is not good, then "so what?"  So long as there is some time left on the s/l, the attorney will be off the hook.

This view fails to take into account those cases which have merit but might take some investigation, or some preparation, or some actual work to get started.  Then sometimes, this type of bait and walk away backfires.  One repeated instance in the NJ/NY situation in which the NJ 2 year statute of limitations on personal injury conflicts with the NY 3 year.  This is exactly what happened in Conklin v Owen ;2010 NY Slip Op 03399 ; Decided on April 27, 2010 ;Appellate Division, Second Department .  From the decision:
 

"In September 2002 the plaintiff retained the defendant Joseph A. Owen, a New York attorney, and his law firm, the defendant Owen Law Firm, PLLC, to represent him. The representation arose out of an accident that occurred on August 4, 2002, at a fair in Sussex County, New Jersey, when a swing the plaintiff sat on allegedly flipped over. The swing allegedly was owned or maintained by a New Jersey entity named Images of Our Own (hereinafter Images). By letter dated June 21, 2005, Owen withdrew as counsel, advising the plaintiff that New York's three-year statute of limitations was about to expire and to consult another attorney. The plaintiff alleged that the defendants failed to commence an action before the two-year statute of limitations expired in New Jersey, and, as a result, the plaintiff commenced this legal malpractice action.

An attorney is liable in a malpractice action if the plaintiff can prove that the attorney failed to exercise the skill commonly exercised by an ordinary member of the legal community and that such negligence was the proximate cause of damages (see Rudolph v Shayne, Dachs, Stanisci, Corten & Sauer, 8 NY3d 438, 442; Barnett v Schwartz, 47 AD3d 197, 203; Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, LLC v Comprehensive Mental Assessment & Med. Care, P.C., 26 Misc 3d 1109, 1120-1121). An attorney may be liable for ignorance of the rules of practice, for failure to comply with conditions precedent to suit, for neglect to prosecute or defend an action, or for failure to conduct adequate legal research (see McCoy v Tepper, 261 AD2d 592; [*2]Gardner v Jacon, 148 AD2d 794, 796; Grago v Robertson, 49 AD2d 645, 646).

To succeed on a motion for summary judgment, the defendants were required to demonstrate that the plaintiff is unable to prove at least one of the essential elements of a legal malpractice cause of action (see Allen v Potruch, 282 AD2d 484; Shopsin v Siben & Siben, 268 AD2d 578). The defendants, as the movants, failed to submit evidence sufficient to establish their entitlement to judgment as a matter of law (see Alvarez v Prospect Hosp., 68 NY2d 320). The plaintiff likewise also failed to meet his initial burden on his cross motion (id.). There are triable issues of fact, inter alia, as to whether a timely action could have been commenced in a New York court at the time the defendant attorney withdrew (see CPLR 202). Therefore, the Supreme Court properly denied that branch of the defendants' motion which was to dismiss the cause of action to recover damages for legal malpractice and the plaintiff's cross motion for summary judgment on the cause of action to recover damages for legal malpractice. "

This is really the central question in legal malpractice.  While the popular conception is that one needs to find the mistakes, the truth is that there are mistakes in every human endeavor.  What counts in legal malpractice is the linkage to a bad outcome.  However, Justice Schaffer gives a much better response in Landau, P.C. v LaRossa, Mitchell & Ross ;  2010 NY Slip Op 50620(U)
Decided on April 7, 2010 ;  Supreme Court, New York County ;  Schlesinger, J.
 

"This brings the Court to its final discussion of what precisely the plaintiff has to prove to recover from the defendant, and whether either side is deserving of having its motion granted.

As everyone here acknowledges, because it is the law (!), a plaintiff in a legal malpractice case, must do more than simply allege and prove that his attorneys were negligent in representing him; he also must show that the negligence made a difference in the outcome, so that a plaintiff must show that he would have prevailed or received a greater award but for the negligence of his lawyer. [See, e.g., Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438 (2007)] Or in the case of a defendant, would not have suffered the damages he did. The latter situation is what the plaintiff argues here. He urges that because there was ample evidence to show the cases would have likely settled or been successfully tried without the tainted evidence, even if those awards might have been less than was actually received, the damages that he ultimately paid back to the City would have been less, and perhaps much less. The opposing sides differ as to how much the plaintiff has to prove on that point at this stage of the proceedings.

In this regard, a legal malpractice action has often been described as a trial within a trial. This is so because the plaintiff must adduce evidence that shows at least a likelihood that he would prevail on the underlying merits of the case. So, for example, in the First Department decision, Tanel v. Kreitzer & Vogelman, 293 AD2d 420 (2002) the Appellate Division found that the defendants' motion for summary judgment in the malpractice action should have been granted. While it was conceded that the defendant law firm was negligent in failing to move for a default judgment within one year of the hospital's default, the plaintiff had failed to successfully oppose the affidavit of the medical expert who opined that there was no medical malpractice. Therefore, the plaintiff was unable to show the underlying case had merit or that but for the negligence of the [*6]defendant, they would have prevailed. All that was required there, as suggested by the Court, was to successfully present competing proof to show that their claim had merit. But they did not and so the action was dismissed.

But here, the plaintiff does show, despite the contrary arguments made by defense counsel, that in both actions there was testimony and documents to prove a prima facie case on the issue of constructive notice, the only seriously contested issue, without the use of the tainted evidence. The 1995 reargument papers by the defendant, for which they must take responsibility, prove that point.

So has the plaintiff here done enough to satisfy the "but for" element of a legal malpractice case? I believe it has. As the Court said in Gladden v. Logan, 28 AD2d 1116 (1st Dep't, 1967):

Obviously it is impossible to show conclusively that had that action gone to trial it would have resulted in a verdict favorable to plaintiff. What plaintiff must do is to prove such facts in regard to the accident as enables a jury to find that she would have recovered.

As was said in Zarin v. Reid & Priest, 184 AD2d 385 (1st Dep't. 1992 citing to Carmel v. Lunnay, 70 NY2d 169). "The test is whether a proper defense would have altered the result of the prior action.' "The plaintiff maintains that it is likely here that it would. The defendants insists that it would not have. Thus, I find a classic dispute regarding the interpretation to be given to the same facts. This, then, should result in a denial of both motions, and it does.

Eisen, P.C. should finally have its day in court on its claim that the defense did not adequately oppose the City's motion leading to a settlement in the latter's favor for over a million dollars. There were factual contentions made by the City in that motion that were never challenged. That arguably was not simply a matter of judgment. I say that, because nowhere in the voluminous papers submitted by the defense, is the argument ever made that there were good reasons or any reasons for the omission. The only explanation proferred was that it was Mr. Eisen's idea and decision to exclude that argument. For reasons previously discussed, that is not good enough.

The plaintiff is not entitled to summary judgment on liability because it is part of its burden in a legal malpractice to show both aspects, i.e., that there was substandard representation which influenced the result in an unfavorable way. The defendants counter that they were not negligent, or that even if they were, there would have been no different result. "

In Martinez v Te 2010 NY Slip Op 03391 ;Decided on April 27, 2010 ;Appellate Division, First Department Catterson, J.  Justice Catterson of the First Department discusses a trial gone wrong in Bronx County, and overrules Judge Wright's post trial decision.
 

In this  medical malpractice case, the jury sent notes, and then decided against plaintiff.  We'll let Judge Catterson take it from here: "At 3:15 P.M., the jury returned a verdict for Dr. Te. During polling, one juror, regarding the second interrogatory (whether Dr. Te departed from accepted standards of care by performing the WIT on plaintiff in view of the size of his middle lobe), responded "yes, because we don't have the actual - well, I say yes and why, because I say no, because we don't have the standard procedures to go for." The court responded "there was a question from the jury asking for anything, any documents setting forth the standard. There were none." The juror responded "[t]here weren't, so." Again, plaintiff sought no clarification of the juror's statements nor made any objections prior to the jury being discharged.

Several months later, the plaintiff moved to set aside the verdict. The plaintiff argued that the proof of liability was "overwhelming," in contrast to Dr. Te's "weak defense." The plaintiff argued that Dr. Te conceded that it was a reasonable conclusion that the "impassable" stricture in the urethra was caused by the hot water therapy. The plaintiff concluded that this concession weakened the defense, especially in view of Dr. Kaminetsky's evidence that the stricture was in the bulbar urethra and Dr. Cohen's testimony that the stricture was caused by the misplacement of the catheter during the WIT procedure. Hence, the plaintiff argued that the verdict was inconsistent with the weight of the evidence. "

One thing we've remebered for many years is that an inconsistent verdict must be preserved by asking for corrective action before the jury is disbanded.  Here, the Court holds, "Initially, we note that the bulk of the plaintiff's arguments are unpreserved. The absence of any objection or request for clarification with regard to the court's response to the jury note, or to the verdict (Rodriguez v. Budget Rent-A-Car Sys., Inc., 44 AD3d 216, 220, 841 N.Y.S.2d 486, 490 (1st Dept. 2007); Maione v. Pindyck, 32 AD3d 827, 829, 821 N.Y.S.2d 110, 112-113 (2d Dept. 2006)), on the basis that the jury was "confused," prior to the jury being discharged, has deprived this Court of an adequate record to review the claim. If the verdict had been questioned at that time, the matter could have been promptly resolved. Hence, the court, in setting aside the verdict on the basis asserted, necessarily deprived Dr. Te of an opportunity to address the claim when it could have been resolved prior to the jury being discharged.

Accordingly the order of the Supreme Court, New York County (Geoffrey D. Wright, J.), entered on or about August 5, 2009, which granted plaintiff's motion to set aside the verdict, should be reversed, on the law, the motion denied and the verdict reinstated."

A trend in legal malpractice retainer agreements, especially in the Intellectual Property field is the all encompassing Arbitration clause.  Beyond the statutory required arbitration in attorney fee disputes below a certain dollar figure, these arbitration clauses require arbitration of all disputes, whether in tort, contract or other claims. 

Arbitration has long been said to be quick and economic, but recent experience has led to a different take.  In a $1 million dollar legal malpractice case, the fees to the arbitration company and to the arbitrator may approach $ 75-$100,000.  Of course to bring the same action in Supreme Court costs about $ 385. 

Matter of Brady v Williams Capital Group, L.P. ;2010 NY Slip Op 02434 ;Decided on March 25, 2010 ;Court of Appeals ;Jones, J. investigates the situation in which a litigant can't afford arbitration, and the consequences.  Without deciding the case [it requires further fact finding in Supreme Court] the Court of Appeals reviewed Federal law in pursuit of an answer.
 

in Green Tree Financial Corp-Ala. v Randolph (531 US 79 [2000]). In Green Tree, the Supreme Court, applying Gilmer, recognized that "the existence of large arbitration costs could preclude a litigant . . . from effectively vindicating her federal statutory rights in the arbitral forum" (531 US at 90), a result which cuts against the broad public policy in favor of arbitration. Further, the Supreme Court adopted a case-by-case approach by ruling that "where . . . a party seeks to invalidate an arbitration agreement on the ground that arbitration would be prohibitively expensive, that party bears the burden of showing the likelihood of incurring [the] costs" that would deter the party from arbitrating the claim (id. at 92). Although the Green Tree Court did not set forth a standard of how detailed a showing the party seeking to invalidate an arbitration agreement must make, the Court held the "risk" of "prohibitive costs is too speculative to justify the invalidation of an arbitration agreement" (id. at 91). "
 

In adopting the standard New York courts are to apply in resolving the question of a litigant's financial ability, we are mindful of the strong State policy favoring arbitration agreements and the equally strong policy requiring the invalidation of such agreements when they contain terms that could preclude a litigant from vindicating his/her statutory rights in the arbitral forum. We believe that the case-by-case, fact-specific approach employed by the federal courts (see e.g. Bradford; Morrison v Circuit City Stores, Inc., 317 F3d 646 [6th Cir 2003]; Spinetti v Service Corp. Intl., 324 F3d 212, 218 [3d Cir 2003]), as well as the principles set forth in Gilmer and Green Tree, properly acknowledge and balance these competing policies.

Based on the foregoing, we hold that in this context, the issue of a litigant's financial ability is to be resolved on a case-by-case basis and that the inquiry should at minimum consider the following questions: (1) whether the litigant can pay the arbitration fees and costs; (2) what is the expected cost differential between arbitration and litigation in court; and (3) whether the cost differential is so substantial as to deter the bringing of claims in the arbitral forum (see Bradford, 238 F3d at 556). Although a full hearing is not required in all situations, there should be a written record of the findings pertaining to a litigant's financial ability. Finally, we do not see the need to detail the precise documentation a court should request to resolve this issue. Such matters are best left to the court's discretion.

Legal malpractice sometimes seems to be the language franca in law news. It can show up in any setting. Here is a most unusual story from Law.com [link unavailable]:

"A legal malpractice lawsuit against Baker, Donelson, Bearman Caldwell & Berkowitz stemming from a case involving a 6-ton marble sculpture of Jesus Christ's face may proceed to trial.

The Court of Appeals of Tennessee ruled Aug. 15 that the lower court erred when it threw out two of the former client's theories for malpractice and granted a final judgment to the plaintiff on a third theory. The decision remanded the case back to the lower court for trial.

The former client is Christus Gardens, a tourist attraction and gift shop in Gatlinburg, Tenn. It sued Baker Donelson for its alleged failure to file an appeal on time in a copyright infringement lawsuit that Christus Gardens was defending.

Christus Gardens lost the infringement case brought by the copyright owner of "Miracle Face," a giant sculpture resembling a burial stone that served as the main attraction at Christus Gardens.

Self-described as "America's No. 1 Religious Attraction," the park closed in January, according to its Web site.

The owner of the "Miracle Face" copyright sued Christus Garden in federal court after it began selling in its gift shop miniature versions of the sculpture created by other companies. Those companies had used the copyrighted sculpture to create a mold for the smaller items.

The federal district court found Christus Gardens liable for $100,000. "

Sometimes its obvious what responsibilities the attorney will take on in a new representation.  If it's a motor vehicle accident, then the attorney is hired to prosecute the personal injury action, up to and including trial.  Here, in  Hallman v Kantor ;2010 NY Slip Op 03280 ;Decided on April 20, 2010 ;Appellate Division, Second Department  the attorneys took on a more limited role.
 

From the decision:  "The defendants submitted a retainer agreement reflecting that the plaintiff "understood, accepted and agreed" that the "scope of" their "engagement" was "to represent" her as a co-executor of her deceased father's estate. This documentary evidence conclusively established a defense to the plaintiff's claims of malpractice. The plaintiff alleged that she was the subject of a pending lawsuit, in effect, to recover sums of money due under certain notes she executed before her father died, and that the defendants committed legal malpractice by, inter alia, failing to speak with her "about the circumstances surrounding [her] signing of [those] notes," and failing to "question[ ]" their "validity." However, the documentary evidence demonstrated that the plaintiff's individual liability on the notes was a matter outside of the scope of the defendants' representation of the plaintiff in her capacity as co-executor of the estate (see CPLR 3211[a][1]; AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 435; DeNatale v Santangelo, 65 AD3d 1006, 1007; Turner v Irving Finkelstein & Meirowitz, LLP, 61 AD3d 849, 850). [*2]"

The perennial question of whether a prior proceeding might influence a later proceedings arises again in Feinberg v. Boros, 2010 NY Slip Op 30797, by Justice Emily Jane Goodman, in Supreme Court, New York County. 

The legal malpractice claim arose after an arbitration between plaintiff and his former business partner, where defendants acted as Feinberg's party arbitrator and later as counsel in a law suit against the former accountants to the business.  The claim is that defendants failed to advise plaintiff about the collateral estoppel effect of the arbitration award on his subsequent suit against the accountants for malpractice.

Such malpractice - malpractice lawsuits are more common than one might imagine.  While the popular conception is that the client is litigious, or lawsuit-crazy, the better and more accurate version is that the client has moved from one situation to the next in search of a proper finding of liability.

The decision in Scartozzi v Potruch   10 NY Slip Op 03102 ; decided on April 13, 2010 ; Appellate Division, Second Department is long on discussion of summary judgment standards and a little short on background, but it appears that defendants gave advice to plaintiff in her divorce proceeding to forego trying to avoid payments to the prior attorney, and failed to advice her that she could instead collect her own attorney fees.
 

At the end of the day, plaintiff has two causes of action for legal malpractice left, with the balance of the claims weeded out.

"The Supreme Court properly granted those branches of the defendants' motion which were for summary judgment dismissing the fourth cause of action, as well as the fifth cause of action alleging that the defendants improperly entered into a stipulation with prior counsel on the plaintiff's behalf. In opposition to the defendants' prima facie showing with respect to those causes of action, the plaintiff failed to raise a triable issue of fact.

Furthermore, as the defendants correctly argue, so much of the first cause of action as alleged, and the second cause of action alleging, breach of contract were duplicative of the cause of action alleging legal malpractice, as there was no evidence that the defendants promised to obtain a particular result (see Magnacoustics, Inc. v Ostrolenk, Faber, Gerb & Soffen, 303 AD2d 561, 562). Accordingly, the Supreme Court properly dismissed the second cause of action, and the first cause of action insofar as it alleged breach of contract.

However, the Supreme Court erred in granting that branch of the defendants' motion which was for summary judgment dismissing the first cause of action insofar as it alleged legal malpractice. Contrary to the defendants' contention, the Supreme Court erred in determining that collateral estoppel barred the plaintiff from challenging as legal malpractice the defendant's advice that she waive her right to seek prior counsel fees in the matrimonial action because she sought, unsuccessfully, to set aside the stipulation waiving the fees. In order to invoke the doctrine of collateral estoppel, (1) the identical issue must have necessarily been decided in the prior action and be decisive of the present action, and (2) the party to be precluded from relitigating the issue must have had a full and fair opportunity to contest the prior determination (see D'Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659, 664; Franklin Dev. Co., Inc. v Atlantic Mut. Ins. Co., 60 AD3d 897, 899). Here, the issue of whether the stipulation could be set aside was not identical to the issue of whether the defendants were negligent in advising the plaintiff to waive the fees. Thus, the plaintiff is not precluded from asserting a cause of action alleging legal malpractice based on the defendants' allegedly negligent advice (see Bishop v Maurer, 9 NY3d 910, 911).

To succeed on a motion for summary judgment dismissing the complaint in a legal malpractice action, the defendant must present evidence in admissible form establishing that the plaintiff is unable to prove at least one essential element of his or her cause of action alleging legal malpractice (see Boglia v Greenberg, 63 AD3d 973, 974; Fasanella v Levy, 27 AD3d 616; Suydam v O'Neill, 276 AD2d 549, 550). Here, the defendants failed to demonstrate their prima facie entitlement to judgment as a matter of law by presenting admissible evidence establishing that the plaintiff could not prove that, in advising her to waive her right to request an award of her prior counsels' fees, they "failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession" (McCoy v Feinman, 99 NY2d 295, 301).

The defendants demonstrated their prima facie entitlement to judgment as a matter of law dismissing the third cause of action insofar as it alleged that they were negligent in giving incorrect information to successor counsel concerning the date by which the plaintiff's motion pursuant to CPLR 4404 had to be filed. In opposition, the plaintiff failed to raise a triable issue of fact. However, the defendants failed to demonstrate their prima facie entitlement to judgment as a matter of law on the third cause of action insofar as it alleged that the defendants failed to present certain evidence at trial. "

Sometimes we ruminate on the fact that legal malpractice law is written by attorneys, utilized against attorneys, and rulled on by attorneys.  There is no way around the conundrum.  In Christ v Law Offs. of William F. Levine & Michael B. Grossman ; 2010 NY Slip Op 03056 ; Decided on April 13, 2010 ; Appellate Division, Second Department  we perceive a glimmer of how attorneys may get a leg up, or an easier time in legal malpratice litigation.  From the case:
 

"The plaintiffs retained attorney Harold Solomon to prosecute a property damage claim against the Village of Garden City arising from a sewer backup at their house. Solomon failed to timely commence a negligence action against the Village based on that claim. Thereafter, the plaintiffs hired the defendants in this action to represent them in a legal malpractice action against Solomon, which the defendants commenced. In an order dated April 18, 2002, the Supreme Court (Franco, J.), granted Solomon's motion for summary judgment dismissing the complaint in that legal malpractice action. The Supreme Court found that the plaintiffs failed to raise any triable issues of fact as to the Village's negligence, as there was no evidence showing that the sewer backup was a recurring condition or that the Village had notice of the defect which caused the sewer backup. The plaintiffs subsequently discovered documents which allegedly demonstrated a history of sewer [*2]backups in the vicinity of their home. They also discovered that both Solomon and the defendants had made Freedom of Information Law requests (see Public Officers Law article 6) for those documents, but had failed to follow up when the Village did not respond to those requests. The plaintiffs then commenced this action, alleging the defendants committed legal malpractice by failing to obtain the documents relating to recurring sewer backups in their neighborhood prior to the dismissal of their action against Solomon.

The plaintiffs retained attorney Harold Solomon to prosecute a property damage claim against the Village of Garden City arising from a sewer backup at their house. Solomon failed to timely commence a negligence action against the Village based on that claim. Thereafter, the plaintiffs hired the defendants in this action to represent them in a legal malpractice action against Solomon, which the defendants commenced. In an order dated April 18, 2002, the Supreme Court (Franco, J.), granted Solomon's motion for summary judgment dismissing the complaint in that legal malpractice action. The Supreme Court found that the plaintiffs failed to raise any triable issues of fact as to the Village's negligence, as there was no evidence showing that the sewer backup was a recurring condition or that the Village had notice of the defect which caused the sewer backup. The plaintiffs subsequently discovered documents which allegedly demonstrated a history of sewer [*2]backups in the vicinity of their home. They also discovered that both Solomon and the defendants had made Freedom of Information Law requests (see Public Officers Law article 6) for those documents, but had failed to follow up when the Village did not respond to those requests. The plaintiffs then commenced this action, alleging the defendants committed legal malpractice by failing to obtain the documents relating to recurring sewer backups in their neighborhood prior to the dismissal of their action against Solomon.

A jury verdict should not be set aside as contrary to the weight of the evidence unless the jury could not have reached its verdict by any fair interpretation of the evidence (see Lolik v Big V Supermarkets, 86 NY2d 744; Nicastro v Park, 113 AD2d 129, 134). Whether a jury verdict should be set aside as contrary to the weight of the evidence does not involve a question of law, but rather, requires a discretionary balancing of many factors (see Cohen v Hallmark Cards, 45 NY2d 493, 499). It is for the trier of fact to make determinations as to the credibility of the witnesses, and great deference is accorded to the factfinders, who had the opportunity to see and hear the witnesses (see Bertelle v New York City Tr. Auth., 19 AD3d 343). Under the circumstances, the jury's determination that the Village was negligent in maintaining its sewer system was supported by a fair interpretation of the evidence. "

Today, we continue the story of the legal malpractice law suit against the LaRossa law firm. In Landau, P.C. v LaRossa, Mitchell & Ross ;2010 NY Slip Op 50620(U) ;Decided on April 7, 2010 ;Supreme Court, New York County ;Schlesinger, J.

Two interesting issues are discussed.  The first is whether an expert affidavit is needed in all legal malpractice summary judgment cases, and the second is whether a sophisticated client can be held to have negated the malpractice by his participation in the underlying litigation.  Here the answer is twice, no.

"Second, the lack of an expert affirmation in the moving papers is not fatal. The argument put forth by the plaintiff that his former attorneys failed to exercise ordinary reasonable skill and knowledge commonly possessed by members of the legal profession practicing this kind of law, is not a particularly esoteric or technical one. While an expert affirmation can serve a useful purpose in channeling the Court's focus as to the relevant issues, an experienced Court can usually detect whether or not there has been competent presentation of arguments to defeat a summary judgment motion. Also, Kenneth Mauro's affirmation, served not only to oppose the motion by the plaintiff but to support the defendants' cross-motion as well. In the latter case, the plaintiff appropriately responded with an expert affirmation of its own, one by Brian Shoot, an expert also in civil appellate advocacy.

But most important, this controversy will not now be decided by this Court on technical arguments. While such serve their purpose, and this Court is not in any way criticizing the multiple decisions made during the long pendency of this case by itself and others, again the overriding principle gleamed by this Court from the Court of Appeals is that Eisen, P.C. has yet to have its day in court on the merits of its legal malpractice claim.The second argument proferred by the defense is an exhaustive discussion of the Aboud and Rehberger actions concluding that, despite the arguments made by it in its reargument motion that, in fact there were no viable claims apart from the fraud and no viable case to be made for constructive notice of the alleged negligent conditions in either action. In other words, the same law firm is now agreeing with the City's position in the first instance, one they forcefully repudiated in their reargument motion. [*5]

This brings the Court to another argument put forth by the defense, that the original papers opposing the City's motion were discussed with Mr. Eisen who approved of them before they were submitted. This is presented in affirmations from a member of the firm, John W. Mitchell and from an associate, Susan LaRossa. They claim that it was Mr. Eisen who essentially directed the opposition.

Mr. Eisen in his Reply adamantly denies these assertions. Frankly, I believe these assertions not only diminish the overall arguments proferred by the defense, but are also irrelevant. At the time of the summary judgment motion, Mr. Eisen was not only not co-counsel to the firm he retained, but he was a disbarred lawyer as well. Therefore, to suggest that he not only aided the defense decisions but directed them is not only inappropriate (if it occurred) but more important, does not relieve the law firm from proffering the best arguments it could come up with to defeat the motion. Arguably one of those was that the central premise of the City's argument was wrong. "

Morris Eisen was a huge figure in the personal injury law sector.  As the Sun King of PI attorneys, Eisen could truthfully say "Le etat ce moi!" His firm had a full floor at the Woolworth Building, and early every morning, breakfast was served there.  Anything from 10-30 trial attorneys assembled and were given new trial assignments.  We first met him, as an opponent, sitting on a Judge's robing room desk, using her telephone, while she sat in the visitor's chair, and told us to go get money to settle "Mr. Eisen's" case

Of course, it changed as do all things.  The entire structure came crashing down, and Eisen ended up doing time in Federal prison.  But that's not our story today.  Today, we see his legal malpractice law suit against the LaRossa law firm.  In Landau, P.C. v LaRossa, Mitchell & Ross ;2010 NY Slip Op 50620(U) ;Decided on April 7, 2010 ;Supreme Court, New York County ;Schlesinger, J.
 

From the decision: "In June of 2008, the highest court of this State decided that a legal malpractice action instituted by Landau, P.C., as successor to Morris J. Eisen, P.C., should, for the first time, go forward on its merits.

It was the City's position that in two of the three cases named in their action, (the third was a Bronx case wherein no settlement occurred) Aboud and Rehberger, both of which settled, the former for $700,000, the latter for $15,000 (an additional $45,000 was paid by a private defendant), they were entitled to a return of this money (in fact tripled, pursuant to § 487 of the Judiciary Law) because their sole reason for settling was the [*2]introduction at trial by defendants of perjured testimony.[FN2]

The plaintiffs claim that the law firm committed malpractice in its failure to put into issue the factual under-pinnings of the City's claim, in the City's motion for summary judgment before Justice Jane Solomon. As stated earlier, the City claimed that its sole reason for settling these two matters was the perjured testimony presented at their respective trials. Since this testimony had been proven false at the Federal trial, the City argued that the defendant, Eisen, P.C. was collaterally estopped from challenging this falsity.

The sole opposition interposed by LaRossa, Mitchell & Ross was that collateral estoppel did not apply under these circumstances. However, the law firm never challenged the central premise of the motion, that the City's sole reason for settling was the perjured testimony. That is, they never challenged that premise, so plaintiff argues here, until it was too late.

Justice Solomon ruled in favor of the City in a Decision and Order dated February 24, 1995. In the course of that decision she made the following correct statements:

...none of these defendants challenges any of the City's contentions as to the underlying facts, including that, but for the fabricated testimony, and evidence, there would have been no viable claim in any of the three lawsuits (pp 14-15)

and

The City argues that but for the criminal acts of defendants, it would not have paid any money in connection with these cases because there would have been no evidence of prior notice which was required to establish a prima facie case against the City... This contention is unrefuted (p. 27). [*3]

But the plaintiff very definitely in his complaint and papers accompanying this motion, refutes that. Plaintiff takes great pains to show that conclusion was not true, and in fact, that there was clear evidence to rebut said conclusion. Plaintiff asserts their was sufficient evidence without the use of perjured testimony to merit a jury trial, or alternatively to have convinced the City to settle the actions, albeit perhaps for lesser figures.

Further plaintiff argues, and it is a good argument, that by the defendants' firm's very own words and actions, taken soon after Justice Solomon's decision, it is clear the firm felt similarly.

What was that action? In May of 1995, the defendants moved for reargument/renewal of Justice Solomon's decision. That motion was supported with a nine-page affirmation by an associate of the law firm, Susan G. LaRossa. Eight of these pages addressed the defendant's position in detail. Ms. LaRossa argued that in fact the defendants were contesting the City's claim that but for the fabricated evidence and perjurious testimony, the cases had no value. The affirmant tried to explain why these new facts had not been argued earlier, that there had not been a conviction of mail fraud, merely bribery, which went to their argument why collateral estoppel was not applicable, and that true discovery had not yet occurred. However, the thrust of the affirmation, citing the deposition testimony of Daniel Loveglia from the City Department of Highways, read at the trial regarding a daily log for the Queensboro Bridge, as well as repair records, supported the plaintiff Aboud's position that there were potholes on the bridge and that only three days before the accident, repairs had begun to address these. The LaRossa deposition also referred to attached memoranda from the City evaluating the case as an extremely serious one and taking note of these repair records. "

The matter of  Steinberg v. Schnapp, 2010 NY SlipOp 02991 relates the story of three lawyers, all of whom labored over a decedent's estate, and how the triumvirate fell apart.  Steinberg and Schnapp were retained to handle the estate by the executor who in this case was the third attorney.  Things fell apart rapidly, and, although unsaid, some mistakes were made.  Attorney 1 sues attorney 2 over fees, but does not sue the estate.  Why is this?

Judge Nardelli seems to have hit it on the head when he wrote "Inchoate in his complaint and the averments in support is a veiled concern that he might face a legal malpractice action for actions for which he was not responsible. Why a claim in quantum meruit against co-counsel would forestall such an action is left unsaid, but, in any event, the only issue before us with regard to the quantum meruit claim is whether Steinberg has raised any questions of fact as to Schnapp's argument that he has failed to state a cause of action.

At issue is the propriety of the motion court's dismissal of an attorney's claims under the theories of quantum meruit, as well as tortious interference with advantageous economic relationships. Both plaintiff Robert Steinberg and defendant Stanley Schnapp are attorneys admitted to practice in New York. Non-party Leon Baer Borstein also is an attorney, and was the preliminary executor of the estate of Isi Fischzang.

In the claim for tortious interference Steinberg alleges that he was fired because the "underlying client" (Borstein) had become dissatisfied with the delays in the probate of the estate, but that Schnapp fired Steinberg to shift the blame for the delays to Steinberg. Notably, Steinberg acknowledges that the "underlying client" could have requested his discharge "whimsically or capriciously or for any reason or for no reason, but the discharge would remain without cause.'" His concern that there is an intimation that his termination was "for cause" apparently provides much of the impetus for this litigation.

"[W]e are required to adjudicate [parties'] rights according to the unambiguous terms of the contract and therefore must give the words and phrases employed their plain meaning (Laba v. Carey, 29 NY2d 302, 308 [1971]). The plain language of all the written documents presented in this record evidences that Steinberg's client was the estate, and not Schnapp. Certainly, "[i]f a client exercises the right to discharge an attorney after some services are performed but prior to the completion of the services for which the fee was agreed upon, the discharged attorney is entitled to recover compensation from the client measured by the fair and reasonable value of the completed services" (Matter of Cooperman, 83 NY2d 465, 473 [1994] [emphasis added]). In this case Steinberg has sought to recover compensation for his services from a party who did not have any obligation to compensate him - his co-counsel - with whom he was clearly not in privity. There is not even a suggestion that the estate is an undisclosed principal, in which case liability might attach to Schnapp, under time-honored principles (see e.g. Ell Dee Clothing Co. v. Marsh, 247 NY 392, 397 [1928])."

Legal Malpractice and immigration cases are a rare fit.  Practitioners in legal malpractice get lots of calls about immigration malpractice, but the elements and the parties rarely line up.  Often if there is a good liability case, the client is no longer in the US.  If the client is available, there is little evidence of actually out-of pocket loss.  If the client is available, and there is proof of loss, then liability is a mixed issue.  Here, in Jansz v Meyers, 2010 NYSlipOp 30781, we see all three line up.

Plaintiff is an Australian citizen, and an attorney.  She was here legally on a H1-B visa.  She wanted to switch jobs, and hired the defendant attorney to handle the transition and visa renewal. He failed to file the visa application, and she lost her visa.  Able to remain in the US, but unable to leave and return, she made applications for hardship exemptions.  Here the attorney wrote that the client placed her trust in him, and he "failed her miserably" and that none of this was her fault.  The hardship request failed. 

In the ensuing legal malpractice law suit, the attorney, of course backtracked, and said that he wrote the material for her hardship application merely out of the goodness of his heart, and that it was indeed her fault.  Justice Solomon found for plaintiff on summary judgment.

We continue from yesterday in an examination of the statute of limitations in legal malpractice.  It's three years, pursuant to CPLR 214(6). It is a "bright line" rule,  but it can have exceptions. Beyond the exceptions there is always a question as to when the statute begins to run. For example, there is a line of cases which hold that the statute does not begin to run until all elements of a case are in place. 

However, A recent US District Court case, in Southern District of New York, authored by Judge Sullivan has an excellent discussion of the traditional rule, the origins of the rule, of continuous representation and its relation to the continuous treatment concept of medical malpractice, and how it impacts transactional work, which has negative results years later. We'll discuss this case today and tomorrow.

MIG, INC., v. PAUL, WEISS, RIFKIND, WHARTON & GARRISON, L.L.P., No 09 Civ. 5593 (RJS)UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2010 U.S. Dist. LEXIS 29548; March 29, 2010. While the facts of the case are somewhat complicated and deal with corporate documents and share holding issues, the legal malpractice issue is simpler. It is alleged that Paul Weiss made mistakes in the drafting of corporate documents in 1997 that had real world consequences in 2009.
 

From the opinion: "The alleged drafting malpractice occurred in September 1997, the date when the COD was filed. (See FAC P 2.) Clearly, the cause of action accrued at the same time. Absent the continuing representation doctrine, then, the claim would have expired in September of 2000. Accordingly, the Court must determine whether there was "a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim." McCoy, 99 N.Y.2d at 306. Of course, a plaintiff cannot simply make conclusory allegations that such an understanding existed, but must plead facts that support such an understanding. See W. Vill. Assocs., 854 N.Y.S.2d at 341 ("[F]acts are required to demonstrate [*20] continued representation in the specific matter directly under dispute."); cf. Iqbal, 129 S. Ct. at 1949. Therefore, the Court must evaluate the specific allegations in the Complaint that support Plaintiff's conclusion.

Plaintiff offers two theories of how the continuing representation doctrine tolls the statute of limitations until 2007. First, Plaintiff argues that it has alleged specific representations related to the COD in each year from 1997 through 2007. (Pl.'s Opp. 11-18.) In the alternative, Plaintiff argues that it need not describe specific instances of continuing representation each year because the parties' "mutual understanding" suffices to toll the statute of limitations. Neither of these arguments is persuasive.

a. Continuing Representations

Plaintiff first argues that specific work done by PW for MIG each year from 1997 through 2007, mostly in the form of SEC filings, is sufficient to satisfy the continuing representation doctrine. Thus, Plaintiff alleges that after the COD was filed in 1997, "PW consistently monitored the COD . . . [and] represented MIG in connection with each and every development concerning the COD through March, 2008." (FAC P 19.)

To support this claim, [*21] MIG alleges that "PW advised, reviewed, commented, edited and wrote MIG's 10Ks, 10KAs, 10Qs, 10QAs and other SEC filings that concerned both the Preferred Stock and the COD." (Id. P 20.) For example, in 1998, PW prepared MIG's 10K for 1997, which "recites that the sum of 199.4 million dollars was raised by the preferred stock public offering." (Id. P 21.) In addition, the 1997 10K provides, inter alia, a summary of the Company's outstanding equity, including the amount of preferred shares and their principal rights. (Glanc Decl. Ex. 15 (Form 10K filed by Metromedia International Group, Inc. on March 31, 1998) at F-37.) The 10K did not, however, address the Preferred Holders' conversion rights under section 8 -- the provision containing the alleged malpractice. (Id.)

Plaintiff's memorandum also argues that a 1999 bond offering in connection with a merger is further evidence of a continuing representation with respect to the 1997 COD. (Pl.'s Opp. 15-16.) Plaintiff contends that PW's opinion letter in that offering, incorporated into the Registration Statements of those notes (Form S-4s), brings this representation within the continuing representation doctrine. (FAC P 21.) In the opinion [*22] letter, PW states that, "[i]n connection with this opinion . . . we have examined . . . those corporate records of the Company as we have considered appropriate, including copies of its Amended and Restated Certificate of Incorporation." (See Gluckow Supp. Ex. D (Form S-4, filed by Metromedia International Group, Inc. on Aug. 31, 1999) & Ex. E (Form S-4/A, filed by Metromedia International Group, Inc. on Sept. 24, 1999).) Plaintiff concludes that, because the COD "amends" the Certificate of Incorporation, "Defendant flatly admitted it 'examined' the COD in connection with the merger." (Pl.'s Opp. 15-16.) Similarly, Plaintiff alleges that PW analyzed the effects of the new issue on the Preferred Stock: "a 10K405 filing states that the indenture for the senior discount notes limits the ability of MIG and certain of its subsidiaries to, among other things, incur additional indebtedness or issue capital or preferred stock." (FAC P 21.) 8
 

The statute of limitations in legal malpractice in NY is three years, pursuant to CPLR 214(6).  It is a "bright line" rule, and can be both harsh and unbending.  There are exceptions, and there are question as to when the statute  begins to run.  A recent US District Court case, in Southern District of New York, authored by Judge Sullivan has an excellent discussion of the origins of the rule, of continuous representation and its relation to the continuous treatment concept of medical malpractice, and how it impacts transactional work, which has negative results years later.  We'll discuss this case today and tomorrow.

MIG, INC., v. PAUL, WEISS, RIFKIND, WHARTON & GARRISON, L.L.P., No 09 Civ. 5593 (RJS)UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2010 U.S. Dist. LEXIS 29548;  March 29, 2010.  While the facts of the case are somewhat complicated and deal with corporate documents and share holding issues, the legal malpractice issue is simpler.  It is alleged that Paul Weiss made mistakes in the drafting of corporate documents in 1997 that had real world consequences in 2009.  During the period between drafting and an adverse outcome in the Chancery Court of Delaware, Paul Weiss worked on the issue, billed the client on the issue, made presentations and wrote letters on the issue.  Does this amount to continuous representation?

From the decision: "New York's statute of limitations for legal malpractice is three years. See N.Y. C.P.L.R. § 214(6). The claim accrues when the [*17] malpractice is committed. Shumsky v. Eisenstein, 96 N.Y.2d 164, 166, 750 N.E.2d 67, 726 N.Y.S.2d 365 (2001). Accordingly, the three years begins to run "when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court." Williamson ex rel. Lipper Convertibles, L.P. v. PricewaterhouseCoopers LLP, 9 N.Y.3d 1, 8, 872 N.E.2d 842, 840 N.Y.S.2d 730 (2007) (quotation omitted); accord McCoy v. Feinman, 99 N.Y.2d 295, 301, 785 N.E.2d 714, 755 N.Y.S.2d 693 (2002). "In most cases, this accrual time is measured from the day an actionable injury occurs, even if the aggrieved party is then ignorant of the wrong or injury." McCoy, 99 N.Y.2d at 301 (quotation omitted).

New York does, however, recognize a limited exception to the three-year bar. The continuing representation doctrine "'recognizes that a person seeking professional assistance has a right to repose confidence in the professional's ability and good faith, and realistically cannot be expected to question and assess the techniques employed or manner in which the services are rendered."' Shumsky, 96 N.Y.2d at 167 (quoting Greene v. Greene, 56 N.Y.2d 86, 94, 436 N.E.2d 496, 451 N.Y.S.2d 46 (1992)). In such cases, the three-year statute of limitations will not begin to run until the representation ends. See Glamm v. Allen, 57 N.Y.2d 87, 94, 439 N.E.2d 390, 453 N.Y.S.2d 674 (1982).

The [*18] continuing representation doctrine is an exception, however, and not the rule. "Application of the [continuing representation doctrine is] . . . generally limited to the course of representation concerning a specific legal matter," Shumsky, 96 N.Y.2d at 168, and courts must determine "'whether there has been continuous treatment, and not merely a continuing relation'" between the attorney and client. Id. at 168 (quoting McDermott v. Torre, 56 N.Y.2d 399, 405, 437 N.E.2d 1108, 452 N.Y.S.2d 351 (1982)) (borrowing rationale from medical malpractice cases). Thus, "the doctrine is not applicable to a client's or patient's continuing general relationship with a lawyer or physician involving only routine contact for miscellaneous legal representation or medical care, unrelated to the matter upon which the allegations of malpractice are predicated." Id.; accord Williamson ex rel. Lipper Convertibles, L.P, 9 N.Y.3d at 9 ("The [continuing representation doctrine] does not apply to a continuing general relationship between patient and physician or to situations where the patient initiates routine, periodic examinations to check a condition."). Rather, the continuing representation doctrine is only applicable "where the continuous [*19] representation pertains specifically to the matter in which the attorney committed the alleged malpractice." Id.; cf. W. Vill. Assocs. Ltd. P'ship v. Balber Pickard Battistoni Maldonado & Ver Dun Tuin, PC, 49 A.D.3d 270, 854 N.Y.S.2d 340, 341 (1st Dep't 2008) ("The pleading must assert more than simply an extended general relationship between the professional and client, and the facts are required to demonstrate continued representation in the specific matter directly under dispute.")"  More tomorrow.

Sometimes a court opinion sets forth a grand landscape of the facts, the law, and public policy.  These cases are revered forever. They are studied in law school, and provide fodder for generations of law students.  We may not remember the names of the cases, but they remain in memory as mileposts.  The folding box case about privacy rights; the firefighter's case about whether the municipality owes a duty to landowners to put out a fire, the ancient case over what power the Supreme Court has. 

Sometimes the decision is cryptic and requires ferreting out the facts.  Here is one such case. Zinger v Levinson ; 2010 NY Slip Op 50562(U) ; Decided on April 7, 2010 ; Appellate Term, First Department . What do we gather from this case?  We see that it started in Civil Court, so either the amounts in dispute are less than $ 25000 or it was started by a pro-se litigant who either didn't want to spend $ 210 for an index number, or didn't know better.  We see that there no attorney names which suggests a pro-se plaintiff.  We see that the dispute is over succession to a rent stabilized apartment which suggests that plaintiff was the decedent of a parent who lived in a rent stabilized apartment and wanted to move in, and was willing to hire an attorney to try for that right.  We see that the plaintiff didn't get the apartment and was willing to sue the attorney over this issue.
 

Finally, we see that plaintiff was unable to offer proof of the attorney's negligence.  Not much going on, but definitely a bad outcome for plaintiff.

Today we report on a recent US District Court case, in Southern District of New York, authored by Judge Sullivan  which has an excellent discussion of the traditional rule, of continuous representation,  the origins of the rule and its relation to the continuous treatment concept of medical malpractice.  Transactional legal work such as drafting of contracts, preparing wills, and performing closings of real estate may have negative results years later. How does the statue of limitations and its exceptions apply?

MIG, INC., v. PAUL, WEISS, RIFKIND, WHARTON & GARRISON, L.L.P., No 09 Civ. 5593 (RJS)UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2010 U.S. Dist. LEXIS 29548; March 29, 2010. concerning the drafting of corporate documents in 1997 that had real world consequences in 2009.  Eventually the Chancery Court of Delaware and its highest court found that mistakes in the corporate shareholder documents would cost MIG about $ 130 million,  Their legal malpractice case has been dismissed on statute grounds.  The documents were drafted in 1997, but "On October 13, 2004, while advising MIG on a series of proposals for the "sale of the majority of MIG," PW issued a memorandum informing the MIG Board of a potential problem with the COD. (FAC P 21; Decl. of Paul C. Gluckow in Supp. of Def.'s Mot. to Dismiss or Stay ("Gluckow Supp.") Ex. B (Mem. from James M. Dubin & Jeffrey D. Marell to the Board of Directors of Metromedia International Group, Inc. (Oct. 13, 2004) (the "2004 Memo")).) The 2004 Memo informed MIG that an "inconsistency" or "ambiguity" in the COD could be read to provide the Preferred Holders with greater financial rights than either MIG or PW had intended.
 

On April 16, 2009, the Delaware Chancery Court concluded that the COD entitled preferred shareholders to "double-dip," or be paid twice for the accrued dividends. (FAC PP 28, 30.) See Metromedia I, 971 A.2d at 906-07 (Del. Ch. 2009); In re Appraisal of Metromedia Int'l Group, Inc. (Metromedia II), No. 3351-CC, 2009 Del. Ch. LEXIS 92, 2009 WL 1509182, at *3 (Del. Ch. May 28, 2009)

New York's statute of limitations for legal malpractice is three years. See N.Y. C.P.L.R. § 214(6). The claim accrues when the [*17] malpractice is committed. Shumsky v. Eisenstein, 96 N.Y.2d 164, 166, 750 N.E.2d 67, 726 N.Y.S.2d 365 (2001). Accordingly, the three years begins to run "when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court." Williamson ex rel. Lipper Convertibles, L.P. v. PricewaterhouseCoopers LLP, 9 N.Y.3d 1, 8, 872 N.E.2d 842, 840 N.Y.S.2d 730 (2007) (quotation omitted); accord McCoy v. Feinman, 99 N.Y.2d 295, 301, 785 N.E.2d 714, 755 N.Y.S.2d 693 (2002). "In most cases, this accrual time is measured from the day an actionable injury occurs, even if the aggrieved party is then ignorant of the wrong or injury." McCoy, 99 N.Y.2d at 301 (quotation omitted).

New York does, however, recognize a limited exception to the three-year bar. The continuing representation doctrine "'recognizes that a person seeking professional assistance has a right to repose confidence in the professional's ability and good faith, and realistically cannot be expected to question and assess the techniques employed or manner in which the services are rendered."' Shumsky, 96 N.Y.2d at 167 (quoting Greene v. Greene, 56 N.Y.2d 86, 94, 436 N.E.2d 496, 451 N.Y.S.2d 46 (1992)). In such cases, the three-year statute of limitations will not begin to run until the representation ends. See Glamm v. Allen, 57 N.Y.2d 87, 94, 439 N.E.2d 390, 453 N.Y.S.2d 674 (1982)."  We'll continue this discussion.
 

What is a question of judgment, what is neglect of a case and what is ignorance of the rules in legal malpractice?  Sometimes this is an easy question, other times, slightly more complex. in  MCCORD -v.- O'NEILL,;  No. 08-3096-cv ;  Summary Order;  UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT;2010 U.S. App. LEXIS 5139 we see the 2d Circuit's general definitions;
 

"Construing all the facts in McCord's favor, an independent review of the record shows that the district court properly granted O'Neill's motion for summary judgment. "To state a claim for legal malpractice under New York law, a plaintiff must allege: (1) attorney negligence; (2) which is the proximate cause of a loss; and (3) actual damages." Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006). Under this standard, "[a] complaint that essentially alleges either an 'error of judgment' or a 'selection of one among several reasonable courses of action' fails to state a claim for malpractice." Id. (quoting Rosner v. Paley, 65 N.Y.2d 736, 481 N.E. 2d 553, 554, 492 N.Y.S.2d 13 (N.Y. 1985)). And, in general, "an attorney may only be held liable for 'ignorance of the rules of practice, failure to comply with conditions precedent to suit, or for his neglect to prosecute or defend an action.'" Id. (quoting Bernstein v. Oppenheim & Co., 160 A.D.2d 428, 554 N.Y.S.2d 487, 489-90 (N.Y. App. Div. 1st Dep't 1990)).

Here, McCord's malpractice claim rested on the allegation that O'Neill's failure to contact Ron Lawrence, another employee of McCord's former employer, as a possible witness constituted [*4] negligence, and that, had Lawrence been a witness in his case, the district court would not have granted Airborne's motion for judgment of a matter of law and dismissed McCord's discrimination claims. O'Neill met his initial burden of demonstrating that his decision was a reasonable strategic choice by showing that the only information regarding Lawrence in McCord's possession at the time was Lawrence's "Summary of Disciplinary/Attendance History." This document showed that Lawrence, a Caucasian, had received much the same disciplinary treatment as McCord, undermining McCord's contention that calling Lawrence would have enabled him to demonstrate that his employer treated him less favorably than a similarly situated employee outside of his protected group. See Mandell v. County of Suffolk, 316 F.3d 368, 379 (2d Cir. 2003). As the district court correctly observed, McCord adduced no evidence in response suggesting that O'Neill's failure to contact Lawrence was negligent, or that this decision could have proximately resulted in the court's unfavorable decision in Hill."
 

Clients depend on attorneys to advise them on the law.  Quick, what do you know about usury?  Do you know enough competently to advise a client, or just enough to get yourself into trouble?  Here is a legal malpractice story about the later.Theresa Striano Revocable Trust v Blancato
2010 NY Slip Op 02773 ;Decided on March 30, 2010 ;Appellate Division, Second Department
 

Attorney is retained to perform two mortgage transactions, and notes that the interest rate is 17%.  Usury, he wonders?  He asks the borrower's attorney, who tells him not to worry, its a commercial transaction.  Naturally, it all falls apart soon enough.

"Before the closing documents were finalized, the defendant Richard T. Blancato, who was the plaintiffs' attorney, observed that the 17% annual interest rate on the loans might be usurious under General Obligations Law § 5-501 and Banking Law § 14-a, which generally fix the maximum annual interest rate which may be charged for these types of transactions at 16%. He shared his concern with the borrower's counsel, who assured him that the rate was not usurious because the loans were commercial in nature. Based on this explanation, the defendant was persuaded that no usury issue existed, and never notified Striano about the potential problem.
 

Here, the defendant's reliance upon the advice of the borrower's attorney reflects a failure to exercise ordinary reasonable skill (see Shopsin v Siben & Siben, 268 AD2d 578; McCoy v Tepper, 261 AD2d 592, 593; Logalbo v Plishkin, Rubano & Baum, 163 AD2d 511, 514). As the plaintiffs' current counsel correctly notes, even a cursory review of the relevant statutes would have revealed that the proposed loans did not fall under any usury exceptions. Additionally, the defendant's efforts to paint his actions in a favorable light are unavailing, as his recent averments directly contradict both his 2008 affirmation and the averments of Thomas Fatato, Striano's brother, who submitted an affidavit on the defendant's behalf (see Denicola v Costello, 44 AD3d 990; Telfeyan v City of New York, 40 AD3d 372, 373).

The defendant contends that Fatato ultimately was responsible for the decision to provide the loans despite the potential usury problem. Assuming, however, that Fatato acted as Striano's agent and was aware of the borrower's counsel's advice (such that Fatato's knowledge can be imputed to Striano), the defendant "may not shift to the client the legal responsibility [he] was specifically hired to undertake because of [his] superior knowledge" (Hart v Carro, Spanbock, Kaster & Cuiffo, 211 AD2d 617, 619).

Accordingly, the plaintiffs established, prima facie, that the defendant acted negligently with respect to the usury issue. Issues of fact exist, however, as to whether Striano was involved in certain decisions regarding the handling of the mortgage foreclosure actions filed against the borrower and, if so, whether those decisions constituted an intervening cause of the plaintiffs' injuries (see Eisenberger v Septimus, 44 AD3d 994, 995; Brooks v Lewin, 21 AD3d 731, 734; Selletti v Liotti, 22 AD3d 739, 740; Blank v Harry Katz, P.C., 3 AD3d 512, 513). The Supreme Court's denial of the plaintiffs' motion was, therefore, proper. "

Associate is hired and assigned to a case. A mistake of malpractice proportions takes place, and the associate leaves to form his own firm. He takes the case with him, and is alleged to have made more mistakes of malpractice proportion. Is the Original law firm still responsible?"

in this case, yes. In Red Hook/Gowanus Chamber of Commerce, Inc. v Brightbill ;2010 NY Slip Op 02719 ; Decided on April 1, 2010 ; Appellate Division, First Department .

"In preparing the CPLR article 78 proceeding seeking to vacate a determination approving a variance, Brightbill allegedly committed malpractice in failing to name a necessary party. Brightbill subsequently left the firm and formed his own firm, which was substituted for appellants in prosecuting plaintiff's claims. Additional acts of malpractice were allegedly committed in connection with Brightbill's subsequent representation of plaintiff, and appellants maintain that they cannot be held liable for the alleged negligence of Brightbill and his firm.

"[A]n intervening act which is a normal consequence of the situation created by a defendant cannot constitute a superseding cause absolving the defendant from liability" (Lynch v Bay Ridge Obstetrical & Gynecological Assoc., 72 NY2d 632, 636-637 [1988]). Here, the motion court properly determined that appellants failed to sustain their prima facie burden of establishing that the alleged negligence of Brightbill and his firm was not a normal consequence of the situation created by the initial purportedly negligent act of failing to name a necessary party in the article 78 proceeding. In this regard, we note that plaintiff does not allege that the motion to amend the petition to request a remand rather than vacatur of the variance was an act [*2]of malpractice.

We have considered appellants' remaining arguments, including that they cannot be held liable because their conduct could not be considered the proximate cause of plaintiff's damages, and find them unavailing. "

We've discussed whether courts disfavor law suits against attorneys in the past.  It sometimes appears that Courts are more willing to grant CPLR 3211 (a)(1) motions for attorneys than for the general run of cases.  While all agree that the "case within a case" presents unique barriers to litigation, one must remember the human factor too.  After all, the rules of legal malpractice are written by attorneys, concerning attorneys and administered by attorneys. 

In any event, here is a case in which the Appellate Division reversed Supreme Court's dismissal of a legal malpractice complaint, sua sponte, when it was unwarranted, Rotering v Satz ;2010 NY Slip Op 02120 ; Decided on March 16, 2010 ; Appellate Division, Second Department .  "The Supreme Court, sua sponte, directed dismissal of the complaint on the basis, inter alia, that the plaintiff failed to file proof of service of the summons and complaint, citing CPLR 306-b. Pursuant to that statute, a court may only dismiss a complaint for failure to effect timely service of process "upon motion," not on its own initiative (see CPLR 306-b). The defendants never moved to dismiss the complaint (see CPLR 3211[a][8]; [e]). Thus, the Supreme Court erred in doing so sua sponte (see Daniels v King Chicken & Stuff, Inc., 35 AD3d 345). "

Continuing our discussion of Decker v. Nagel Rice LLC, 09 Civ. 9878 from yesterday, we see the proposed plaintiff's attorney, Mr. Lowy, being denied admission pro haec vice. One reason for the denial by judge Scheindlin was the Advocate-Witness Rule.  But that was  only one reason.

A second reason was the announcement that Mr. Lowy was to become a third-party defendant.  A strongly held belief in the world of litigation is that when an attorney sees something wrong, he/she looks for someone to blame. Third-party actions in legal malpractice are all about blame., sometimes after trying to fix a problem.

Here, Mr. Lowy will also be disqualified as plaintiff's attorney should he become a third-party defendant.  This situation perennially arises when the eventual plaintiff's attorney in a legal malpractice case earlier tries to fix the problem [contra to the attorney rule] tries to fix the underlying problem, but fails.  After this failure, plaintiff turns to legal malpractice with that attorney.  Problems ensue.

"Defendants oppose the foreign plaintiffs' pro haec vice motion on the grounds that Lowy should be disqualified from representing plaintiffs. According to Defendants, Lowy (1) is a material fact witness; (2) will be named as a third-party defendant for contribution and/or indemnification; and (3) was sued by one of the plaintiffs in this action for legal malpractice in connection with the In re Ski Train Litigation and made sworn statements adverse to that plaintiff. For all three reasons, Lowy is disqualified.

First, Lowy is disqualified under the advocate-witness rule. The malpractice allegedly occurred when Defendants failed to move to certify the foreign plaintiffs as an opt-out class in either 2004, 2005, or 2006 or move this Court for relief from its judgment dismissing Siemens AG. As co-counsel to the foreign plaintiffs in 2005 and responsible for the foreign plaintiffs' unsuccessful appeal, Lowy had direct, personal, involvement in the alleged acts of malpractice. Even counsel for the foreign plaintiffs recognizes that Lowy had at least some involvement arguing only that "he was not involved in the case at all at the time when most of the acts of malpractice occurred." 

In addition, the advocate-witness rule is intended to address four concerns. All are present here. Lowy declares that he will testify that Defendants engaged in malpractice while he and his co-counsel attempted to rectify those mistakes.  Given Lowy's involvement with the underlying lawsuit and the prior malpractice action brought against him, this testimony may cause jurors and this Court to fear that he is distorting the truth as a result of bias in favor of plaintiffs or to protect his own interests. Defendants' counsel will vigorously cross-examine Lowy regarding the actions he took or failed to take as the foreign plaintiffs' counsel in the In re Ski Train Litigation. Defendants' counsel will seek to impeach Lowy's credibility with regard to whether it was Defendants or Lowy that caused the foreign plaintiffs' alleged harm. Such cross-examination places opposing counsel in a difficult situation and will require Lowy to vouch for his own credibility. Lowy's simultaneous representation of plaintiffs and his need to defend his own conduct will "'blur the line between argument and evidence [such] that the jury's ability to find facts [will be] undermined.'"

Furthermore, Lowy's testimony is both necessary and prejudicial.  Lowy did not merely play a passive role in the In Re Ski Train Litigation. Instead, Lowy was one of only three attorneys — one of which was disqualified in 2007 — that zealously represented the foreign plaintiffs during the precise time when the alleged malpractice was ongoing. Lowy will need to explain why he did not take steps to minimize plaintiffs' alleged harm, such as by seeking certification of the foreign plaintiffs as an opt-out class in the wake of the Second Circuit opinion or pursuing a judgment on appeal with regard to the dismissal of the claims against Siemens AG. Any such testimony will necessarily be adverse to plaintiffs' position and undermine their claim that Defendants' malpractice caused their harm. Because his testimony is both necessary and prejudicial, I find that Lowy must be disqualified under the advocate-witness rule. 

Second, I find that Lowy's presence as both an attorney and a third-party defendant presents a conflict of interest in violation of Rule 1.7 and Canons 5 and 9. Defendants intend to name Lowy as a third-party defendant for contribution and/or indemnification. 45 Defendants contend that Lowy should be disqualified from representing plaintiffs due to the conflict of interest presented by his position as both plaintiffs' counsel and a third-party defendant. Plaintiffs attempt to rebut disqualification on this ground by asserting that whether Lowy will be named a third-party defendant is "mere speculation." 46 I disagree. Given Lowy's prior involvement in this case during the time period in question and Defendants' stated intention to name him as a third-party defendant, I find that it is a near certainty, and not merely speculative, that he will be named as a third-party defendant."
 

An Ski-Train fire killed 155 people in Kaprun, Austria and left twelve survivors. American and foreign survivors and relatives brought multiple lawsuits in federal court called "In re Ski Train Litigation").  That case went through some permutations, was certified as a class action, then partially de-certified and in the end, the foreign plaintiff cases were dismissed.  Why and how they were dismissed is now the subject of a legal malpractice case in Southern District of New York.

In a decision this week,Decker v. Nagel Rice LLC, 09 Civ. 9878 Judge Scheindlin denied the request of one attorney to be admitted pro haec vice as a plaintiff's attorney on the Advocate-Witness Rule.  Judge Scheindlin writes:

"Attorneys appearing before this Court must abide by the New York State Rules of Professional Conduct (the "Rules"). 32 Rule 3.7(a) addresses the situation where an attorney may be a witness. Commonly referred to as the "advocate-witness" rule, Rule 3.7(a) states:

A lawyer shall not act as advocate before a tribunal in a matter in which the lawyer is likely to be a witness on a significant issue of fact unless: (1) the testimony relates solely to an uncontested issue; (2) the testimony relates solely to the nature and value of legal services rendered in the matter; (3) disqualification of the lawyer would work substantial hardship on the client; (4) the testimony will relate solely to a matter of formality, and there is no reason to believe that substantial evidence will be offered in opposition to the testimony; or (5) the testimony is authorized by the tribunal.

The advocate-witness rule is based upon concerns that:

(1) the lawyer might appear to vouch for his own credibility; (2) the lawyer's testimony might place opposing counsel in a difficult position when she has to cross-examine her lawyer-adversary and attempt to impeach his credibility; (3) some may fear that the testifying attorney is distorting the truth as a result of bias in favor of his client; and (4) when an individual assumes the role of advocate and witness both, the line between argument and evidence may be blurred, and the jury confused. 33

"In order to disqualify an attorney on the basis of the advocate-witness rule, a party must demonstrate that the testimony is both necessary and substantially likely to be prejudicial." 34 "Prejudice in this context means testimony that is 'sufficiently adverse to the factual assertions or account of events offered on behalf of the client, such that the bar or the client might have an interest in the lawyer's independence in discrediting that testimony.'"

When a tort is committed outside of New York and a non-resident sues within the State of New York, courts apply the borrowing statute, especially with regard to the statute of limitations.  As an example, Kat House Prods., LLC v Paul, Hastings, Janofsky & Walker, LLP ; 2010 NY Slip Op 02489 ; Decided on March 25, 2010 ; Appellate Division, First Department  reminds us that although the NY statute of limitations is 3 years, the California statute of limitations for legal malpractice is only 1 year.  In this case, the Court applied the California time limits.
 

"When a nonresident sues in New York's courts on a cause of action accruing outside the state, our "borrowing statute" (CPLR 202) requires that the cause of action be timely under the limitation periods of both New York and the jurisdiction where the claim arose (see Global Fin. Corp. v Triarc Corp., 93 NY2d 525, 528 [1999]). Generally, a tort action accrues "at the time and in the place of the injury," and "[w]hen an alleged injury is purely economic, the place of injury usually is where the plaintiff resides and sustains the economic impact of the loss" (id. at 529).

Applying these principles, it is clear that plaintiffs' legal malpractice claim accrued in California, where their residences and principal place of business were located and the alleged economic injury was sustained, at the latest, in March 2006. Under that state's applicable one-year statute of limitations (Cal Civ Proc Code § 340.6), this action, commenced in November 2007, was time-barred. "

We often present cases here from the plaintiff's point of view.  Here is a case by attorney v. insurance broker over the purchase of "nose" insurance [the opposite of tail insurance.  The attorney wanted to procure "a policy, covering all acts of malpractice prior to the effective date of the policy, irrespective of the date such acts occurred, and irrespective of the date the claim stemming from such acts of malpractice is first interposed."  She did not receive such coverage, although the policy was renewed three times.  Attorney sues broker, and broker moves to dismiss,

Justice Goodman, writing in Steier v. Todd Pallack Insurance runs up against an interesting situation.  Plaintiffs apparently put up an argument which is absolutely not supported by the complaint. "Citing to its complaint, plaintiffs maintain that the action is based on an insurance brokers' failure to obtain coverage specifically requested by the insured, although as defendants note, the complaint supports no such argument." 

The Court permits plaintiff to 'amplify" and then asks for more briefs on whether this departure is tort or contract, and if so, whether subject to a continuing duty analysis.  More soon...

Plagiarism is the act of appropriating the intellectual property of others and passing the material off as one's own creation [Webster, 2009] is a subject we thought was left behind in school.  Really, all one needs to do is use a pair of quotation marks and a few words which say that we were clever enough to find someone else's better composition.  Here, in a NYLJ article we see a multi-million dollar plagiarism-legal malpractice law suit against the IP firm Ropes & Grey.  Here, with proper attribution is the story by Nate Raymond:

"Vladimir Drozdoff had just started working at Cold Spring Harbor Laboratory when he was asked to investigate why a patent had been denied for what the lab considered a genetics breakthrough.

Cold Spring, the former home of DNA researcher James Watson, is well known for genetics research. But the U.S. Patent and Trademark Office in 2007 denied one of its top scientists, Gregory Hannon, a patent for technology that would allow researchers to selectively turn off genes.

Mr. Drozdoff's probe led him to conclude that Matthew Vincent, a partner at Cold Springs' outside counsel Ropes & Gray, had plagiarized a patent by a rival researcher. Mr. Drozdoff, a former senior IP associate at Kaye Scholer, discovered that 11 pages of text in Mr. Hannon's patent application had been lifted without citation directly from one by Andrew Fire, a Nobel Prize winner in medicine. Many of Mr. Hannon's other patent applications contained similar copied passages.

In February, Cold Spring sued Ropes & Gray in the U.S. District Court for the Eastern District, accusing the firm and Mr. Vincent of malpractice. Cold Spring, represented by Chad Ziegler at Scully Scott Murphy & Presser in Garden City, claims it has lost millions of dollars in potential licensing and royalty revenue, and seeks $37.5 million to $82.5 million, plus punitive damages.

Ropes & Gray, in a motion to dismiss filed Tuesday, contends the alleged copying was not the cause of the rejection of the applications. "Cold Spring Harbor Laboratory's lawsuit lacks merit because the determination of the [Patent and Trademark Office] to reject the patent applications is based on the existence of prior work of other respected scientists and not on our firm's efforts," the firm said in a statement."

The decision in International Electron Devices (usa) LLC v Menter, Rudin & Trivelpiece, P.C.
2010 NY Slip Op 02343 ; Decided on March 19, 2010 ;Appellate Division, Fourth Department is not groundbreaking, but it is illustrious of what sometimes appears to be unwarranted deference to target attorneys on the question of the statute of limitations.  Defendant attorneys represented plaintiffs in the purchase and closing of business assets and commercial property.  Some two years later, plaintiffs became enmeshed in an Environmental Protection Agency (EPA) investigation about contamination on the property requiring abatement at an estimated cost of $8 million.
 

Plaintiffs sued defendants more than three years after the closing.  Does this fact alone warrant dismissal based upon the statute of limitations?  Supreme Court granted dismissal, but the 4th Department reversed:

"We agree with plaintiffs that Supreme Court erred in granting defendant's motion for summary judgment dismissing the amended complaint on the ground that it was time-barred. As plaintiffs correctly concede, the three-year statute of limitations applicable to a legal malpractice cause of action accrued on October 26, 2004, the date of the closing and thus when the malpractice was committed, and it expired on October 26, 2007 (see CPLR 214 [6]; Shumsky v Eisenstein, 96 NY2d 164, 166; see also Williamson v PricewaterhouseCoopers LLP, 9 NY3d 1, 7). Defendant thus met its initial burden of establishing that this action, commenced in October 2008, was time-barred (see Gravel v Cicola, 297 AD2d 620, 620-621). The burden then shifted to plaintiffs to raise a triable issue of fact whether the statute of limitations was tolled by the continuous representation doctrine (see id. at 621). "For the continuous representation doctrine to apply to an action sounding in legal malpractice . . ., there must be clear indicia of an ongoing, continuous, developing, and dependent relationship between the client and the attorney[,] which often includes an attempt by the attorney to rectify an alleged act of malpractice" (Luk Lamellen U. Kupplungbau [*2]GmbH v Lerner, 166 AD2d 505, 506-507; see Aaron v Roemer, Wallens & Mineaux, 272 AD2d 752, 754, lv dismissed 96 NY2d 730). That doctrine "tolls the [s]tatute of [l]imitations only where the continuing representation pertains specifically to the matter in which the attorney committed the alleged malpractice" (Shumsky, 96 NY2d at 168; see Amendola v Kendzia, 17 AD3d 1105, 1108-1109). Thus "if there is merely a continuing general relationship with [an attorney] . . . involving only routine contact for miscellaneous legal representation . . . unrelated to the matter upon which the allegations of malpractice are predicated' . . ., the toll will not be found" (Chicago Tit. Ins. Co. v Mazula, 47 AD3d 999, 1000, quoting Shumsky, 96 NY2d at 168).

In opposition to the motion, plaintiffs established that defendant represented them in the late summer and fall of 2006 in connection with the EPA investigation. We agree with plaintiffs that there is a triable issue of fact whether that representation was related to defendant's alleged malpractice in failing to conduct a thorough environmental investigation of the property prior to the closing (see generally Shumsky, 96 NY2d at 168). Plaintiffs also raised a triable issue of fact whether that representation constituted an attempt to rectify the alleged malpractice (see Gravel, 297 AD2d at 621). "

Humans have fingers, and are willing to point with them.  Looking back over events and apportioning blame is not particularly limited to legal malpractice questions, but seems to be very prevalent there.  Here, in Sklover & Donath, LLC v Eber-Schmid ; 2010 NY Slip Op 02002
Decided on March 16, 2010 ; Appellate Division, First Department  the justices borrow from an unidentified law review article to state that hindsight is "an unreliable test for determining the past existence of legal malpractice" (Darby & Darby v VSI Intl., 95 NY2d 308, 315 [2000] [law review source omitted]).
 

Attorneys represented clients in a federal criminal proceeding as well as a related civil proceeding.  Relations broke down over legal fees, and eventually the attorneys moved to be relieved.  A fee action with a legal malpractice counterclaim followed.  The counterclaim fails for several different reasons.

"Defendants failed to allege a viable counterclaim for breach of contract, as they were unable to identify the terms of the agreement allegedly breached (767 Third Ave. LLC v Greble & Finger, LLP, 8 AD3d 75 [2004]). Nothing in the modified agreement prohibited plaintiff from requesting a lien on real property, withdrawing as counsel, or commencing an action based on unpaid legal fees.

Nor did defendants properly allege a counterclaim for legal malpractice. The steps plaintiff took in litigating these cases were among many reasonable options (see Rosner v Paley, 65 NY2d 736, 738 [1985]). The allegations that plaintiff's decisions were unreasonable are based on hindsight, As to breach of fiduciary duty, defendants' contention that plaintiff prolonged the litigation for purposes of "churning" the case to increase the legal fees is speculative and conclusory. Defendants failed to otherwise allege any facts showing that their attorney followed any inappropriate course of action. "

Client from outside New York is sued in Federal Court in New York.  Client hires a NY attorney, and then the case shifts focus to a London Arbitration.  When does the billing in NY end, when does the London case take over, and what happens when there is a billing dispute later?  Justice Edmead's decision in Eaton & Van Winkle LLP v. Midway Oil Holdings Ltd. sets forth a well written explanation of jurisdiction and account stated.

How much must take place in NY for the out of state defendant to be jurisdictionally available in NY?  The short answer is:  enough to satisfy due process.  The longer answer is:  The burden of proving jurisdiction is on the party asserting it.  Long arm jurisdiction is found at CPLR 302(a)(1), and allows for jurisdiction over any non-domiciliary who "transacts any business" within the State, provided that the cause of action arises out of that transaction of business.  A single act will suffice, so long as there is a substantial relationship between that transaction and the injury. The test is the totality of circumstances when determining the existence of purposeful activity. Such acts may include contract negotiations between the parties, meetings, letters or phone calls.  For a fuller description see the decision at pp. 10-13.

The decision also sets forth a full description of the account stated principal.  Where an agreement between the parties holds that when the bill is presented, the recipient is bound to examine it, and if the accounting is admitted as correct, it becomes binding upon both parties.  Receipt and retention of a law firm bill , without objection within a reasonable time, gives rise to an actionable account stated, thereby entitling a firm to summary judgment.

How long is too long? "A lapse of two months is not so long as to constitute such an assent, nor a lapse of three months.  However, four months..."  For a longer explanation, see p. 31-34 of the decision.

In today's NYLJ  article by Drew Combs we see the interim outcome we see the basic outline of the attorney-client relationship gone bad.

"A California venture capitalist who has admitted to bribing New York state pension officials has sued Gibson Dunn & Crutcher over $1.3 million in fees the firm seeks for representing him during the investigation that precipitated that admission.

Elliott Broidy's lawsuit—filed March 15 in Los Angeles Superior Court—comes in response to a Gibson Dunn motion to have an arbitrator in New York resolve the fee dispute between the two parties (NYLJ, Feb. 18). Mr. Broidy wants the disagreement handled in California.

The clash stems from work done by Gibson Dunn on behalf of Mr. Broidy and his Markstone Capital Group private equity firm while both were targets of an investigation into "pay-to-play" investments made by the New York State Common Retirement Fund.

Wherever the matter is ultimately decided, Mr. Broidy also claims in his complaint that Gibson Dunn is not entitled to any legal fees because it committed fraud by failing to obtain appropriate conflicts waivers while representing him.

Mr. Broidy seeks an order compelling Gibson Dunn to dismiss the New York arbitration proceedings as well as orders preventing the firm from any further efforts to collect the $1.3 million in legal fees it claims it is owed.

At the heart of the dispute, according to Mr. Broidy's complaint, are two retainer agreements and an engagement letter prepared by Gibson Dunn in connection with the pension probe.

Under terms of the first retainer agreement, Mr. Broidy's complaint maintains, any dispute that might arise between the investor and the law firm would be submitted to arbitration in Los Angeles and California law would govern.

Mr. Broidy alleges that in April 2009, New York-based Gibson Dunn partner Randy Mastro "demanded" that Mr. Broidy sign a new retainer with the firm on his own behalf. Mr. Broidy says in his complaint that Mr. Mastro allegedly assured him that the terms of the two were otherwise the same, and acknowledges signing the new agreement."

This story about a Kentucky case comes from the Legal Profession Blog. 

"A high school English teacher was sitting in her living room when a small plane hit the roof of the second story of her home. She suffered no direct physical injury but went into a state of shock, which led to health problems.

She retained an attorney to file suit against the pilot. The attorney missed the one-year statute of limitations despite reminders and also failed to comply with discovery obligations and court orders. The suit was dismissed. The teacher then sued her attorney for malpractice. A jury returned a verdict in her favor of over $5 million. The lawyer appealed.

The Kentucky Court of Appeals affirmed the jury verdict of malpractice and punitive damages against the attorney. The court vacated some aspects of the damage award. In particular, the teacher's "case-within-a-case" proving negligence on the part of the pilot could not sustain a claim for punitive damages because of Kentucky's "impact" rule. (Mike Frisch)"

As further proof of the wide-ranging nature of legal malpractice litigation, we see in D'Elia v. D'Amico & Associates  , 2010 NY Slip Op 30545, Supreme Court, Nassau County, J. McCarty a plaintiff who has claims against the target attorneys for estate matters for two relatives as well as in the purchase of a house.

One important aspect of legal malpractice is the relatively high incidence of pro-se representation.  This case is chock full of missed deadlines, failures to obtain adjournments, etc.  The bottom line here is the statue of limitations.  Unclear from the decision is how the three year legal malpractice statute applies to work completed within that time frame, but what is absolutely clear is the effect of a disorganized approach to litigation leads to dismissal.  We see:  "To the extent that plaintiff failed to offer any opposition to any of the defendants' motions to dismiss, this Court cannot be said to have overlooked or misapprehended the matters of fact or law prof erred by plaintiff, as there were none, and plaintiff may not include such matters of fact now, having failed to offer them in opposition to defendants' prior motions."

"With regard to the issue of reasonable justification, plaintiff alleges that she failed to oppose defendants' motions to dismiss because she needed additional time to prepare her opposition to such motions, and she misunderstood this Court's procedure for the granting of adjournments on motions."

We're not sure how to value this legal malpractice law suit reported in Law.Com in a story by Julia Kay.    It's not simply a $ 168 Million claim, it's a class action case too.

"A Sarasota, Fla., judge dismissed some counts but let stand malpractice and breach of fiduciary duty charges in a lawsuit filed against Holland & Knight by the receiver in a $168 million Ponzi scheme.

The rulings by Circuit Judge Rick DeFuria keep alive a suit filed last year by Burton Wiand against the law firm and one of its partners, Scott MacLeod. Wiand of Wiand Guerra King of Tampa was appointed receiver in January 2009 to try to recover funds from indicted Sarasota hedge fund manager Arthur Nadel.

Nadel, 77, pleaded guilty last month to 15 counts of operating a Ponzi scheme in Sarasota from 1999 to 2009. In a case that has been compared to Bernard Madoff's, Nadel's investors thought they were investing in a variety of hedge funds under Nadel's control or association. He is awaiting sentencing in a New York prison and faces up to 300 years. "

"Wiand hired the law firm Johnson Pope Bokor Ruppel & Burns of Tampa to sue Holland & Knight for allegedly preparing disclosure documents for investors that failed to mention Nadel was a disbarred New York attorney who had drained a client's escrow account. The suit also accuses Holland of conflicts of interest for representing Nadel and his investment funds simultaneously.

Wiand is seeking up to $168 million from Holland, equal to the amount of the Ponzi loss.

A separate class action suit brought by investors is pending in Tampa federal court with motions to dismiss filed by Holland & Knight. "

"

Legal Malpractice cases arise from any number of interesting underlaying matters.  In Shawandya L. Simpson v. Bernard M. Alter and Diana A. Johnson, the legal malpractice case alleges breach of fiduciary duty, conflict of interest, legal malpractice and wrongful disclosure of information.

Here, Simpson was running for judicial office in Brooklyn as was Diana Johnson.  Simpson had retained Alter to help her "establish a sufficient residency in the borough of Brooklyn to allow her to run for judicial office in that County."  He did the work, and she ran for office.

In the internecine world of borough politics, naturally an opponent sought to keep her off the ballot.  Johnson retained Alter to do so, in 2004.  There was a hearing on interlocutory applications as well "as the ultimate relief to remove Simpson from the ballot."  Alter no longer represented Simpson, and was permitted to represent her opponent on trial.  However, there were limits on the questions he could ask. The Court challenged Alter on his cross-exam, threatening to disqualify him.  Alter tailored his questions in the face of the court's ruling.

Now, Simpson successfully avoids dismissal, and may move ahead on her breach case.

One rule that we think distinguishes legal malpractice from all other areas of the law (with the possible exception of medical malpractice) is the question of judgment and how it might insulate the practitioner from claims of negligence.  Here, in MARK A. MCCORD, -v.- MICHAEL G. O'NEILL, UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT;2010 U.S. App. LEXIS 5139;March 11, 2010, Decided the principal is defined.
 

"Construing all the facts in McCord's favor, an independent review of the record shows that the district court properly granted O'Neill's motion for summary judgment. "To state a claim for legal malpractice under New York law, a plaintiff must allege: (1) attorney negligence; (2) which is the proximate cause of a loss; and (3) actual damages." Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006). Under this standard, "[a] complaint that essentially alleges either an 'error of judgment' or a 'selection of one among several reasonable courses of action' fails to state a claim for malpractice." Id. (quoting Rosner v. Paley, 65 N.Y.2d 736, 481 N.E. 2d 553, 554, 492 N.Y.S.2d 13 (N.Y. 1985)). And, in general, "an attorney may only be held liable for 'ignorance of the rules of practice, failure to comply with conditions precedent to suit, or for his neglect to prosecute or defend an action.'" Id. (quoting Bernstein v. Oppenheim & Co., 160 A.D.2d 428, 554 N.Y.S.2d 487, 489-90 (N.Y. App. Div. 1st Dep't 1990)).

Here, McCord's malpractice claim rested on the allegation that O'Neill's failure to contact Ron Lawrence, another employee of McCord's former employer, as a possible witness constituted [*4] negligence, and that, had Lawrence been a witness in his case, the district court would not have granted Airborne's motion for judgment of a matter of law and dismissed McCord's discrimination claims. O'Neill met his initial burden of demonstrating that his decision was a reasonable strategic choice by showing that the only information regarding Lawrence in McCord's possession at the time was Lawrence's "Summary of Disciplinary/Attendance History." This document showed that Lawrence, a Caucasian, had received much the same disciplinary treatment as McCord, undermining McCord's contention that calling Lawrence would have enabled him to demonstrate that his employer treated him less favorably than a similarly situated employee outside of his protected group. See Mandell v. County of Suffolk, 316 F.3d 368, 379 (2d Cir. 2003). As the district court correctly observed, McCord adduced no evidence in response suggesting that O'Neill's failure to contact Lawrence was negligent, or that this decision could have proximately resulted in the court's unfavorable decision in Hill.

The Appellate Decision in Steven Von Duerring,  v. Hession & Bekoff,  is so sparse that one has absolutely no idea what the case is about.  When we turn to the Supreme Court case from which the appeal emanates we see that it is a legal malpractice arising out of a claim that "they were negligently represented by defendants in the failed purchase of a house to be constructed on plaintiff's behalf by third parties (sellers).

The deal fell apart.  Plaintiffs did not get a mortgage, but seemed to be able to demonstrate financial ability and willingness to set aside funds to comply.  Did the deal fall apart because of negligence of the attorneys or not?  Supreme Court determined that under the circumstances, issues of fact existed as to whether defendant attorneys breached their duty of care in advising plaintiffs during the closing process that an escrow deposit would be sufficient to avoid cancelling the contract.

Supreme Court said yes, the Appellate Division said no.  Unfortunately for us, the AD did not set forth its reasons.

If thing go wrong, sue the attorney!  It's a familiar meme, yet there are more and more arbitration clauses found in retainer agreements, especially media representations and patent law.  On the one hand, in NYS there are the mandatory fee dispute arbitrations, but that is now what we are thinking about.  As an example: PROTOSTORM, LLC and PETER FAULISI, Plaintiffs, -against- ANTONELLI, TERRY, STOUT & KRAUS, LLP, DALE HOGUE, FREDERICK D. BAILEY, CARL I. BRUNDRIDGE, ALAN E. SCHIAVELLI; 08-CV-931 (NGG)(JO);  UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK; 2010 U.S. Dist. LEXIS 20894 is a multi-defendant patent action.  One of the defendants had an arbitration clause in its retainer agreement.
 

"The party seeking to resolve a dispute by arbitration has the burden of proving a valid [*12] arbitration agreement. See Symphony Fabrics, 2008 U.S. Dist. LEXIS 44588 at *31; Peterson v. Beale, No. 92-CV-5412 (RPP), 1995 U.S. Dist. LEXIS 11580 at *3 (S.D.N.Y. Aug. 11, 1995). A court evaluating this issue applies the same standard as it would when faced with a motion for summary judgment. See Mina v. Foot Locker, Inc., No. 09-CV-0472 (DB), 2009 U.S. Dist. LEXIS 93155 at *3 (S.D.N.Y. Sept. 30, 2009) (citing Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003). "If there is an issue of fact as to the making of the agreement for arbitration, then a trial is necessary." Bensadoun, 316 F.3d at 175. "[W]hether the parties agreed to arbitrate is determined by state law," Bell v. Cendant Corp., 293 F.3d 563, 566 (2d Cir. 2002), and a party contesting the existence of a an agreement to arbitrate may assert all "generally applicable contract defenses, such as fraud, duress, or unconscionability." Doctor's Assocs. v. Casarotto, 517 U.S. 681, 687, 116 S. Ct. 1652, 134 L. Ed. 2d 902 (1996).

The court must first determine which state's contract law applies to the threshold issue of the existence of an agreement to arbitrate. A district court sitting in diversity applies the choice-of-law rules of the state in which it sits. [*13] See Lee v. Bankers Trust Co., 166 F.3d 540, 545 (2d Cir. 1999) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941)). New York courts generally honor an express choice-of-law clause if the selected state has sufficient contacts with the matter in dispute, so long as there is no fraud or violation of public policy. See Hartford Fire Ins. Co. v. Orient Overseas Containers Lines, 230 F.3d 549, 556 (2d Cir. 2000).
 

Unlike the existence of an agreement to arbitrate, the scope of such an agreement, once shown, is a question of law to be determined by a court. See Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84, 123 S. Ct. 588, 154 L. Ed. 2d 491 (2002). Plaintiffs assert that the Arbitration Clause solely governs fee disputes. (See Pl. Mem. 46.) Hogue, by contrast, argues that the Arbitration Clause is sufficiently broad to encompass all of Plaintiffs' claims. (See Reply 16-18.) Each side cites to California law to support their arguments regarding the scope of the Arbitration Clause. No party, however, explains why California law should apply to this question. While the existence [*16] of a binding agreement to arbitrate is a matter of state law, "[t]he issue of an arbitration agreement's scope is governed by the federal substantive law of arbitrability." Progressive Cas. Ins. Co. v. Reaseguradora Nacional De Venezuela, 991 F.2d 42, 48 (2d Cir. 1993).

"Federal policy strongly favors arbitration as an alternative dispute resolution process." Collins & Aikman Prods. Co. v. Building Sys., Inc., 58 F.3d 16, 19 (2d Cir. 1995); see also JLM Indus., Inc. v. Stolt-Nielsen SA, 387 F.3d 163, 171 (2d Cir. 2004). "[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone Mem. Hosp. v. Mercury Const. Com., 460 U.S. 1, 24-25, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983)."

The first cousin to Legal Malpractice is the eternal question of legal fees.  Who pays them?  From whom may they be obtained?  How does one calculate them?  What is reasonable?  Under which situations might an attorney forfeit them?  Might one law firm be responsible to another when it says that it will cover the legal fees of a client?

DePetris & Bachrach, LLP v. Srour   2010 NY Slip Op 01840 ; Decided on March 9, 2010
Appellate Division, First Department  speaks to some of these issues. 
 

"Applying these standards, the motion court erroneously dismissed the fourth and fifth causes of action which allege claims against defendants-respondents for breach of the implied warranty of authority and for tortious misrepresentation of authority and assurances of payment, respectively. These causes of action seek to hold defendants-respondents liable for their own action in misrepresenting that they had authority from the Nassers to enter into a contract in which the defendants, Jacques and Ezequiel Nasser would pay plaintiff law firm $75,000 ($37,500 each) of the legal fees incurred by plaintiff's client Srour.

Under the doctrine of implied warranty of authority, a person who purports to make a [*2]contract, representation, or conveyance to or with a third party on behalf of another person, lacking power to bind that person, gives an implied warranty of authority to the third party and is subject to liability to the third party for damages for loss caused by breach of that warranty, including loss of the benefit expected from performance by the principal (see Restatement (Third) of Agency § 6.10 [2006]).

Under the doctrine of tortious misrepresentation and assurances of payment, if the person who falsely claims to have power to bind another knows that the claim is untrue, the person has made a fraudulent misrepresentation and is subject to liability to those who, justifiably relying on the representation, suffer a loss as a consequence (see Restatement (Third) of Agency § 7.01 [2006]).

The complaint alleges that defendants-respondents represented to plaintiff law firm that they had authority from the Nassers to promise payment of $75,000 of the legal fees incurred by plaintiff's client when, in fact, they lacked the authority to bind the Nassers. Thus, the complaint alleges a viable claim for breach of the implied warranty of authority. The complaint also alleges that defendants-respondents falsely represented to plaintiff law firm that they specifically discussed the subject matter of their authority and representations with the Nassers. Thus, the complaint alleges a viable clam for tortious misrepresentation of authority and assurances of payment.

To the extent the motion court relied on the principle of apparent authority, lack of consideration and the statute of frauds to dismiss these causes of action, such was error. The doctrine of apparent authority is irrelevant because the fourth and fifth causes of action are not seeking to hold the principals (the Nassers) liable on the ground that defendants-respondents had apparent authority from the Nassers to make promises of payment. Rather, these causes of action are seeking to hold the agents, defendants-respondents, liable for contracts or representations they purported to make on behalf of the principal (the Nassers) while acting without authority from the principal."
 

We recently reported on this Case in SDNY, captioned STONEWELL CORP., and RICHARD GLADSTONE, Plaintiffs, -against- CONESTOGA TITLE INSURANCE CO., WILLIAM KOLSHORN, and JERSEYSEARCH TITLE SERVICES, INC., Defendants. - as consolidated with - CONESTOGA TITLE INSURANCE CO., WILLIAM KOLSHORN, and JERSEYSEARCH TITLE SERVICES, INC.,

As is common in Federal District Court cases, there are complaints, and then amended complaints and so on.  Today's iteration of the case involves a second amended complaint.  Here, from the decision:

"For the reasons stated below, Stonewell's motion for leave to amend as set forth in the Corrected Proposed Second Amended Third-Party Complaint is granted in part and denied in part.

II. Analysis of Proposed Amendments

Stonewell has proposed three new causes of action in its Corrected Proposed Second Amended Third-Party Complaint. The Court finds that: (1) proposed Cause of Action Two is approved as consistent with the Court's Opinion and Order, dated January 7, 2010; (2) proposed Cause of Action Three is approved as sufficiently related to the original pleadings; (3) proposed Cause of Action Four is denied as unmeritorious and futile; and (4) Dollinger's other objections to the Corrected Proposed Second Amended Third-Party Complaint are denied.

A. Proposed Cause of Action Two is Approved

Cause of Action Two sets forth the relevant facts in support of the claim that Dollinger failed to convey two offers of settlement to Gladstone. These two instances of a purported breach of duty formed the basis for Stonewell's first motion for leave to amend the Third-Party Complain, which was granted by the Court. The Court therefore approves the proposed Cause of Action Two [*4] in Stonewell's Corrected Proposed Second Amended Complaint.

B. Proposed Cause of Action Three is Approved

In its Second Motion to Amend its Third-Party Complaint, Stonewell also seeks to add Cause of Action Three, which provides, in pertinent part:
41. On information and belief, at various times during the period of 1997 and 2007, a variety of settlement discussions were entered into between Conestoga representatives and Dollinger (on behalf of Stonewell/Gladstone). . . . Further, Dollinger admitted in his deposition that he tried to settle the pending matters at various times.

42. At no time did Dollinger communicate any of these discussions of settlement with Stonewell/Gladstone, who would have instructed Dollinger to proceed and settle the case.

43. Dollinger had an absolute duty to bring all settlement discussions to his client's immediate attention, and to discuss its relative merits and demerits. His failure to do so breaches a fundamental duty to his client.

In support of this new cause of action, Stonewell provides Proposed Exhibit A, which includes several of Dollinger's invoices. These invoices, dating from between March 1999 and February 2006, make a number of references to Dollinger [*5] engaging in settlement negotiations on behalf of Stonewell. Dollinger objects to the proposed Cause of Action Three on the ground that the allegations are too vague and lack adequate specificity.

The Court finds that the facts and allegations developed during discovery and set forth in Paragraphs 41-43 of the proposed amended pleadings are sufficiently related to the original claims and are foreshadowed in the earlier pleadings. See Bridgeport Music, Inc. v. UMG Recordings, Inc., 248 F.R.D. 408, 415 (S.D.N.Y. 2008); State Farm Mut. Auto. Ins. Co. v. CPT Med. Servs., P.C., 246 F.R.D. 143, 148 (S.D.N.Y. 2007). Permitting the proposed amendment would allow for the full adjudication of the merits of the remaining claim in this litigation - to wit, that, in the course of the attorney-client relationship, Dollinger failed to convey one or more settlement offers to Stonewell, and that this alleged breach caused damages to Stonewell. See Morin v. Trupin, 835 F. Supp. 126, 129 (S.D.N.Y. 1993). Accordingly, the Court grants the motion for leave to amend the pleadings to include Cause of Action Three. The Court also permits the addition of Proposed Exhibit A to the Third-Party Complaint.

C. Proposed [*6] Cause of Action Four is Denied

Stonewell next seeks, for the first time, to add a cause of action based on Dollinger's alleged failure to send Stonewell copies of invoices for legal fees and expenses that Dollinger sent to Conestoga during the period that Conestoga funded Dollinger's legal representation of Stonewell. Stonewell offers no legal basis for such a claim, nor does it allege any damages from this purported breach of Dollinger's duty to Stonewell.

The Court therefore denies leave to amend with respect to proposed Cause of Action Four (Paragraphs 44 and 45) on the ground that such amendment would be futile. See Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962).

D. Dollinger's Other Objections Are Without Merit

Dollinger objects to specific contents of the Corrected Proposed Second Amended Third-Party Complaint that are unchanged from the original pleadings. Dollinger contends that the First Cause of Action (Legal Malpractice) and the Fifth Cause of Action (Failure to Cooperate and Failure to Produce Documents) should be excised from the proposed amended pleadings because they have been dismissed by the Court in its Opinion and Order, dated January 7, 2010. Dollinger further objects to "background [*7] allegations" in the pleadings that relate to these now-dismissed causes of action. 2

FOOTNOTES

2 These "background allegations" appear in Paragraphs 16-26 and 29-31.

These two causes of action have been dismissed and are not the subject of the upcoming trial. Their continued presence in the pleadings is inconsequential to the adjudication of this case. Requiring a redrafting of the original pleadings based on a summary disposition is unnecessary and would be a waste of time and resources. Dollinger's objections with respect to these portions of the Corrected Proposed Second Amended Third-Party Complaint are therefore denied. 3 "

It's fairly rare for defendant-attorney to move for summary judgment in a legal malpractice case, lose, and then lose at appeal.  Why do defendants move for summary judgment ?  Beyond the obvious answer that it is a shot that they can take without any downside, the general reason is that defendant believes that it can win in one of two areas. 

The first area is generally some lack of privity, or some lack of authority in the representation.  For example, that plaintiff did not cooperate in giving an affidavit, or plaintiff did not pay expenses for an expert, or lacked standing because of bankruptcy,

The second area is plaintiff's  generalized inability to prove success on the underlying case.  As examples, that there was no collectible assets, or the statute had already passed when the client came to the attorney, or the such.

While we cannot tell why defendant took his appeal in Mueller v Fruchter ;2010 NY Slip Op 01771 ;Appellate Division, Second Department ; Decided on March 2, 2010  we do see that neither Supreme Court nor the Appellate Division thought much of the motion:

"Here, the Supreme Court properly denied that branch of the defendants' motion which was for summary judgment dismissing the plaintiff's first cause of action (see Rosenstrauss v Jacobs & Jacobs, 56 AD3d 453, 454; Velie v Ellis Law, P.C., 48 AD3d 674, 675; Pedro v Walker, 46 AD3d 789, 790). The defendants failed to make a prima facie showing of their entitlement to judgment as a matter of law since they failed to show that the plaintiff was unable to prove at least one of the essential elements of her legal malpractice cause of action (see Rosenstrauss v Jacobs & Jacobs, 56 AD3d at 454; Velie v Ellis Law, P.C., 48 AD3d at 675; Pedro v Walker, 46 AD3d at 790). Thus, we need not address the sufficiency of the opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).


 

Legal Malpractice is family to its cousin, Medical Malpractice. In either situation, a person has put faith in a professional, asking that a threatening problem be solved. It matters little to the client/patient whether the situation is an operation or a trial. in either, the problem is overwhelming and threatening. What happens when something goes wrong.

There are financial considerations, but equally as important is the anger which comes from believing that you've been let down. Here, at the crux, is where an apology might help. Dr. Emily Senay, of CBS reports on medical malpractice. It is equally applicable to legal malpractice:

"It's not greed that drives most people to file medical malpractice lawsuits," Wojcieszak said. "It's anger. They get — people get angry when they think there's a cover-up."

Wojcieszak's anger turned into action. He created the Sorry Works Coalition with a simple idea: Reduce malpractice lawsuits by telling patients the truth followed by an apology.

"Basically, what it is is we're advocating good customer service. Without apology and disclosure, there can be no patients' safety because as long as you're coving up and denying, you're never gonna learn," Wojcieszak said.

According to healthcare litigation attorney Jim Saxton even lawyers say empathy works.

"That 'I'm sorry' done the right way with the right process can, number one, derail a lawsuit," Saxton said.

It could also reduce costs. After the University of Michigan health system changed its medical error policy on malpractice cases, legal fees per case were more than cut in half. The legal climate is slowly changing. Twenty-nine states now have laws that protect doctors from lawsuits when they say they're sorry.

It was the apology that opened the door for Kenney the patient and Van Pelt the doctor. "

Infant Plaintiff is injured in a paper shredder, and goes to attorney 1.  Attorney 1, who wisely understands that he lacks the special expertise to handle the case correctly in US District Court hands case off to Attorney 2.  After a while attorney 2 speaks to a law firm even more experienced, and they together bring the case to an almost  $1 million settlement.  At the infant's compromise, all the attorneys agree on a split between them.  Balance is to go to a structured settlement for the infant.  Done, ok?  Not so ok. 

The Magistrate decides that Attorney 1 is in violation of the then Dr-102 and has not done enough work to warrant a fee.  So, what does the Magistrate do?  The money which was to go to Attorney 1 is given to the plaintiffs, so that they get roughly 75% of the settlement. 

In   WAGNER & WAGNER, LLP, DANIEL J. BAURKOT, ESQ., Non-Party-Appellants, DAYANARA RODRIGUEZ, an infant by her , Plaintiffs, v. ATKINSON, HASKINS, NELLIS, BRITTINGHAM, GLADD & CARWILE, P.C., Non-Party-Appellee, INTERNATIONAL SALES, INC., INTERNATIONAL GROUP OF COMPANIES, Docket No. 08-4966-cv; UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT;2010 U.S. App. LEXIS 3170;August 25, 2009, Argued ; February 18, 2010, Decided  we see:

"After an infant compromise hearing, Judge Mann awarded $ 107,654.56 in attorneys' fees and $ 49,866.84 in expenses to Atkinson, Haskins, Nellis, Brittingham, Gladd, & Carwile , P.C. (the "Atkinson firm" or "appellees"), and $ 133,286.60 in attorneys' fees and $ 2,378.86 in expenses to Wagner & Wagner, LLP. She denied an award of fees to Baurkot because Wagner & Wagner's sharing of the fees with Baurkot was not properly disclosed to plaintiffs and Baurkot had performed no services of value in the litigation. Therefore, she concluded, the fee sharing agreement was in violation of New York Disciplinary Rule 2-107 ("DR 2-107"). 1 The magistrate judge awarded Baurkot's portion of the fee to the plaintiffs. Appellants then took this appeal. The Atkinson firm has filed a brief responding to Wagner & Wagner's argument that if we affirm the award to the plaintiffs, the fee splitting agreement between Wagner & Wagner and the Atkinson firm requires a redistribution of fees between the two firms."
 

"The magistrate judge then denied any portion of the attorneys' fees to Baurkot because DR 2-107 prohibited it. First, she found that DR 2-107 was violated because plaintiffs never received the required disclosure of the fee-sharing agreement. The judge rejected Wagner & Wagner's and Baurkot's contentions that they [*9] had orally sought and received the required consent. Instead, the magistrate judge relied on the plaintiffs' testimony indicating they were unaware that Baurkot would be working on the case.

Second, the magistrate judge concluded that DR 2-107 was violated because the requirement that either the work done be in proportion to the fee received or that the attorneys agree in a writing to undertake joint responsibility was not met. In so finding, she relied on several pieces of evidence, including: (i) Wagner & Wagner's initial failure to disclose Baurkot's share of the fee to plaintiffs; (ii) Wagner & Wagner's and Baurkot's failure to show specific work he performed on the case; and (iii) the lack of any documents in Wagner & Wagner's file to corroborate the claim that Baurkot performed services on the case.

The magistrate judge determined that the portion of the fee claimed by Baurkot should be awarded to the plaintiffs, rather than going to Wagner & Wagner. She expressed a concern that the fee would still find its way to Baurkot if Wagner & Wagner received it, and, moreover, noted that Wagner & Wagner had acknowledged that it considered $ 133,286.60 fair and adequate compensation for [*10] its efforts.

Wagner & Wagner and Baurkot filed timely objections to the Report and Recommendation. They objected to those parts of the order that determined that Baurkot's portion of the fee should go to plaintiffs. These objections included an objection to the awarded fees because they resulted in a 55.3%/44.7% split between Wagner & Wagner and the Atkinson firm, rather than the agreed upon 65%/35% split. However, Wagner & Wagner and Baurkot specifically stated that "[t]he Wagner Firm, [sic] is not suggesting that the fee to the Atkinson Firm be reduced. . . . What we are stating is that since the fee to the Atkinson Firm is 35% of the full one-third contingency fee, the fee to the Wagner Firm should be 65% of the full one-third contingency fee." Judge Gleeson adopted the magistrate judge's Report and Recommendation in full. This appeal followed."
 

Some states have mandatory legal malpractice insurance, but New York does not.  Result?  Plaintiffs who have suffered real damages at the hands of uninsured attorneys pursue them, and cannot collect their actual damages from the attorneys.  Here is one sad example. Matter of Jobi
2010 NY Slip Op 01704 ;Decided on March 2, 2010 ;Appellate Division, First Department .
 

Not only did this attorney convert monies, which the Clients' Fund reimbursed, but the attorney avoided several legal malpractice judgments.  It is a violation of attorney ethics to avoid satisfying a judgment which arises from professional acts, but, in this case, the attorney could [apparently] care less.

"Respondent's affidavit of resignation, sworn to on December 21, 2009, complies with 22 NYCRR 603.11[a][1-3] in that she states: (1) her resignation is rendered freely, voluntarily, without coercion or duress and that she is fully aware of the implications of submitting her resignation; (2) she is aware of a pending investigation based upon allegations of deceit involving the conversion of funds held in escrow, giving false testimony with respect thereto and the failure to satisfy judgments entered against her by two former clients and a third party; and (3) she acknowledges that if charges were predicated upon the misconduct under investigation by the Committee, she could not successfully defend herself.

With respect to one of the charges of conversion, it is alleged that respondent converted the sum of $21,250 which she deposited into her escrow account after she received the same from a real estate contract vendee named Jean John. A default judgment John subsequently obtained against respondent as a result of the conversion remains unsatisfied. Two other judgments entered against respondent in legal malpractice actions brought by former clients also remain unsatisfied. The Committee has reviewed respondent's affidavit, found it in compliance with Rule 603.11 and recommends its acceptance by this Court.

Pursuant to Judiciary Law § 90(6-a)(a), restitution may be ordered in a disciplinary proceeding where that attorney has wilfully misappropriated or misapplied money or property in the practice of law. An order directing such restitution may be entered as a civil judgment (Judiciary Law § 90[6-a][d]). Here, an order directing restitution would be futile in light of the fact that John has entered judgment against respondent as set forth above. In any event, respondent should reimburse the Lawyers' Fund for Client Protection of the State of New York as provided for by the statute.

Accordingly, the Committee's motion should be granted to the extent that respondent's resignation be accepted,
 

Legal malpractice seems to exist across the board everywhere an attorney interacts with a client.  Like the New Yorker cartoon showing a 5 year old who has dropped an ice cream cone, with an adult standing above and asking "Do you need an attorney?"  we see legal malpractice cases stitched in all settings.

Here in AMUSEMENT INDUSTRY, INC. dba WESTLAND INDUSTRIES; and PRACTICAL FINANCE CO., INC., Plaintiffs, -v.- MOSES STERN, aka MARK STERN; JOSHUA SAFRIN; FIRST REPUBLIC GROUP REALTY LLC; EPHRAIM FRENKEL; and LAND TITLE ASSOCIATES ESCROW, Defendants.;07 Civ. 11586 (LAK) (GWG);UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2010 U.S. Dist. LEXIS 11817 the attorney is Buchanan Ingersol.
This case is about a failed real estate partnership.  From the case: "On June 29, 2007, third-party defendants Steven Alevy and Friedman -- who "was acting, at all times mentioned herein, in his capacity as an attorney and shareholder of [Buchanan]," 3d-Party Compl. P 5 -- "presented an investment opportunity to Amusement, purportedly on behalf of Safrin and others," although Safrin had not authorized either party to do so, id. PP 26-27. Indeed, while Friedman held himself out as Safrin's representative, "Safrin never retained or otherwise authorized Friedman to speak or act on his behalf in connection with the transactions described in the [underlying] Complaint." Id. P 29.

On that same date, Steven Alevy drafted [*10] a "letter of intent," which was "signed by [defendant Moses] Stern on behalf of First Republic Corp.," and which "identifies as its parties First Republic Corp. and Westland Industries, the name under which Amusement does business." Id. P 30. Safrin was not a party to the letter of intent. Id. P 31. That day, Amusement wired $ 13 million into an escrow account. Id. P 33.

Amusement and First Republic agreed to "work in good faith 'to finalize [their agreements]'" during the seven-day period following June 29, 2007. Id. P 37. During this period, Amusement "drafted and forwarded three partnership agreements to Friedman for Safrin, among others, to sign in order 'to complete a transaction.'" Id. (emphasis omitted). Nonetheless, "[n]one of these draft agreements called for Safrin's signature." Id. P 38.
 

Buchanan argues that Safrin's claim for implied indemnification against it must be dismissed because "Safrin's denial of any contractual relationship between he [sic] and BIR makes it impossible for him to allege an implied contractual right to indemnification because there is nothing from which to create any implied obligation running from BIR to Safrin." Buchanan Mem. at 6 (citing 3d-Party Compl. PP 28, 63, 65, 66, 72, 73).

Buchanan's argument must be rejected because Fed. R. Civ. P. 8(d) expressly permits "hypothetical" pleading and the assertion of "inconsistent claims or defenses." See Fed. R. Civ. P. 8(d)(2)-(3). Safrin's assertion that there was no relationship between him and Buchanan, see, e.g., 3d-Party Compl. P 3, does not, therefore, bar him from asserting that, should such a relationship be found, Buchanan is obligated to indemnify him, id. PP 85-86. See, e.g., Henry v. Daytop Vill., Inc., 42 F.3d 89, 95 (2d Cir. 1994) ("Under [Rule 8(d)] of the Federal Rules of Civil Procedure, a plaintiff may plead two or more statements of a claim, even within the same count, regardless of consistency. [*17] . . . [T]herefore, we may not construe [the] first claim as an admission against another alternative or inconsistent claim.") (citations omitted); Padre Shipping, Inc. v. Yong He Shipping, 553 F. Supp. 2d 328, 333 (S.D.N.Y. 2008) ("plaintiffs are allowed to assert inconsistent facts in support of alternative claims, and courts may not construe allegations regarding one claim to be an admission against another") (citation omitted); Ascher v. Target Corp., 522 F. Supp. 2d 452, 458 (E.D.N.Y. 2007) ("the Court cannot construe one claim as an admission against another alternative or inconsistent claim") (citation omitted)."
 

We are reminded yet again that the statute of limitations starts to run in legal malpractice on the day that the mistake is made.  It's not the day that you realize that a mistake was made.  This issue arises mostly in transactional representations, such as the lease in this case.  When there is litigation, then a continuous representation question comes into play, and plaintiffs usually know when the case ends.  Case endings, although not always a milestone, often provide a comfortable point of reference.

Here,  in Lincoln Place, LLC, Plaintiff, v. RVP Consulting, Inc., et al., Defendants. Robert Peters, et al., Third-Party Plaintiffs-Appellants, Michael E. Pekofsky, Esq., . 
plaintiff hired attorney to write up and administer a lease.  Things went wrong from the beginning, when there was an assignment rather than designating a lessee.  What is the difference?  In one, the plaintiff remained responsible for unpaid rents when the lessee stopped paying.  In the other, plaintiff would not have been responsible.

When and how was the mistake made?  When and how did plaintiff become aware?  When did the statute of limitations start to run?  To save the statue, plaintiff argues that a decision had to be made on the underlying case before he had the ability to sue.  This argument loses. Justice Kornreich of Supreme Court, New York County writes:

"The third-party complaint alleging legal malpractice is time-barred, the action having been commenced more than three years after the malpractice was committed (CPLR 214[6]; Ackerman v Price Waterhouse, 84 NY2d 535, 541 [1994]). Third-party defendant Pekofsky negotiated a lease on behalf of third-party plaintiffs RVP Consulting and Robert Peters (collectively, Peters), as tenants, in 1997. He then assigned the lease, rather than designating a lessee, thereby causing Peters, pursuant to the terms of the lease, to remain liable for the full performance of all the tenant's obligations thereunder. In 1998, the assignee defaulted in its rent obligations, triggering Peters's liability for the outstanding rent. This action was not commenced until 2002.

Contrary to Peters's contention, an adjudication of the meaning of Pekofsky's 1997 letter was not a prerequisite to the existence of an actionable injury. Indeed, while Peters may not have been aware until 2001 or 2002 that Pekofsky's actions could result in liability, it is not the date on which Peters learned that malpractice had occurred, but the date on which the malpractice was committed, that is relevant (West Vil. Assoc. Ltd. Partnership v Balber Pickard Battistoni [*2]Maldonado & Ver Dan Tuin, PC, 49 AD3d 270, 270 [2008]). Peters's subjective belief that Pekofsky had designated a lessee rather than assigning the lease is of no consequence. "

In Seaview Mezzanine Fund, LP v. LoPresti, 2010 NY Slip Op 30350(U), decided by Justice York on February 18, 2010, in New York County, we see a well written explanation of several basic principals.  In this case a review of releases, of contract interpretation and the difference between a CPLR 3211(a)(7) and a CPLR 3211(a)(1) motion.

CPLR 3211(a)(7)  v.  CPLR 3211(a)(1) motion:   "When evaluating  a defendant's motion to dismiss, pursuant to CPLR 3211(a) the test is `not whether the plaintiff has artfully drafted the complaint,  but whether, deeming the complaint to allege whatever can be reasonably implied from its statements, a cause of action can be sustained." That's true for all CPLR 3211 motions except under (a)(1), where "A CPLR 3211(a)(1) motion to dismiss on the ground that the action is barred by documentary evidence...may be appropriately granted only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law.'"

Contract interpretation:  "On a motion to dismiss, the interpretation of this contractual language is a question of law for the court to determine. `The fundamental rule of contract interpretation is that agreements are to be construed in accord with the parties intent...and the best evidence of what parties to a written agreement intend is what they say in their writing."

Releases:  Need there be actual consideration in a release?  No.  General Obligations Law 15-303 states:  A written instrument which purports to be a total or partial release of all claims, debts, demands or obligations, or a total or partial release of any particular claim...shall not be invalid because of the absence of consideration or of a seal.

This week brings a decision in SHEEHY,v. NEW CENTURY MORTGAGE CORP., ET AL., No. 08-CV-377 (JFB) (MLO);UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK;2010 U.S. Dist. LEXIS 15201,  We have noted a trend in legal malpractice cases involving allegaions of breach of fiduciary duty.  Here is another one.
 From the decision:

"Breach of Fiduciary Duty

Under New York law, the elements of a breach of fiduciary duty claim are (1) that a fiduciary duty existed between plaintiff and defendant, (2) that defendant breached that duty, and (3) damages as a result of the breach. Meisel v. Grunberg, 651 F. Supp. 2d 98, 114 (S.D.N.Y. 2009) (citing Whitney v. Citibank, N.A., 782 F.2d 1106, 1115 (2d Cir. 1986) and Regions Bank v. Wieder & Mastroianni, P.C., 423 F. Supp. 2d 265, 270 (S.D.N.Y. 2006), remanded on other grounds by 253 Fed. Appx. 52 (2d Cir. 2007)).

Halpern does not--and cannot--dispute that, by serving as plaintiff's attorney, she had a fiduciary relationship with plaintiff. (See Halpern Mem. of Law at 17); see also Graubard Mollen Dannett & Horowitz v. Moskovitz, 86 N.Y.2d 112, 653 N.E.2d 1179, 1182, 629 N.Y.S.2d 1009 (N.Y. 1995) ("[A]n attorney stands in a fiduciary relation to the client.").

Instead, Halpern argues that plaintiff cannot establish a breach of fiduciary duty occurred because plaintiff has not submitted any expert testimony. (See id. at 17-18.) In support of this argument, Halpern cites the fact that New York courts generally require expert testimony to establish the standard of care in legal malpractice [*24] cases. See, e.g., D'Jamoos v. Griffith, No. 00 CV 1361, 2001 U.S. Dist. LEXIS 17595, 2001 WL 1328592, at *6 (E.D.N.Y. Aug. 1, 2001). Typically, in these cases, expert testimony is used to establish the reasonableness of discretionary decisions made by an attorney, such as a decision to question a witness, raise a particular argument, or make a particular motion. See, e.g., Kranis v. Scott, 178 F. Supp. 2d 330, 335 (E.D.N.Y. 2002) (requiring expert testimony where malpractice claim involved, inter alia, questions of the reasonableness of failure to raise a particular defense); Hatfield v. Herz, 109 F. Supp. 2d 174, 179-80 (S.D.N.Y. 2000) (granting summary judgment to defendant where plaintiff failed to provided expert testimony on malpractice claim that concerned, inter alia, defendant's failure to request a jury trial, failure to prepare adequately for trial, failure to call certain witnesses, and failure to file and litigate certain pre-trial motions); Greene v. Payne, Wood and Littlejohn, 197 A.D.2d 664, 602 N.Y.S.2d 883, 885 (App. Div. 1993) (requiring expert testimony to address "the question of whether the defendants were negligent in failing to separately plead the pendent State claim at the time they instituted the Federal [*25] suit"). However, there are exceptions to the rule requiring expert testimony. Expert testimony is not required in legal malpractice cases if "'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 . . . ." Greene, 602 N.Y.S.2d at 885; see also Stonewell Corp. v. Conestoga Title Ins. Co., No. 04 CV 9867 (KMW) (GWG), F. Supp. 2d , 2010 U.S. Dist. LEXIS 1107, 2010 WL 46015, at *5 (S.D.N.Y. Jan. 7, 2010) ("[E]xpert testimony may be deemed unnecessary [in legal malpractice cases] where the ordinary experience of the fact finder provides sufficient basis for judging the adequacy of the professional service." (internal quotations and citations omitted)).

Here, plaintiff asserts a breach of fiduciary duty claim against Halpern, not a legal malpractice claim. However, the Court will assume, arguendo, that the rule regarding expert testimony applies to breach of fiduciary duty claims against an attorney as well as legal malpractice claims because these causes of action are closely related under New York law. For example, the Appellate Division, First Department, has described breach [*26] of fiduciary duty and legal malpractice claims as "co-extensive," 11 and, when a plaintiff asserts both a legal malpractice claim and a breach of fiduciary duty claim against an attorney, New York courts typically dismiss the breach of fiduciary duty claim as duplicative of the malpractice claim. See, e.g., Joyce v. Thompson Wigdor & Gilly, LLP, No. 06 Civ. 15315 (RLC) (GWG), 2008 U.S. Dist. LEXIS 43210, 2008 WL 2329227 (S.D.N.Y. June 3, 2008) ("Under New York law, where claims of negligence, breach of contract, breach of fiduciary duty, negligent misrepresentation, or fraudulent misrepresentation are premised on the same facts and seek identical relief as a claim for legal malpractice, those claims are duplicative and must be dismissed."); Amadasu v. Ngati, No. 05 CV 2585 (JFB) (LB), 2006 U.S. Dist. LEXIS 19654, 2006 WL 842456, at *9 (E.D.N.Y. Mar. 27, 2006) (collecting cases); Fashion Boutique of Short Hills, 780 N.Y.S.2d at 596; Schweizer v. Mulvehill, 93 F. Supp. 2d 376, 400 & n.29 (S.D.N.Y. 2000) ("New York law clearly provides . . . that where breach-of-fiduciary duty claims mirror allegations of malpractice, they must be dismissed.").

FOOTNOTES

11 Weil, Gotshal, & Manges v. Fashion Boutique of Short Hills, 10 A.D.3d 267, 780 N.Y.S.2d 593, 596 (App. Div. 2004); [*27] see also Kirk v. Heppt, 532 F. Supp. 2d 586, 591 (S.D.N.Y. 2008) (construing pro se plaintiff's claim for breach of fiduciary duty as a claim for legal malpractice).

In any event, plaintiff need not provide expert testimony to survive summary judgment because both above-referenced exceptions to the rule apply here. Typically, the exceptions apply in cases where the attorney's alleged conduct is so egregious that the reasonableness of the conduct is not at issue. See, e.g., Northrop v. Thorsen, 46 A.D.3d 780, 848 N.Y.S.2d 304, 308 (App. Div. 2007) (stating that expert testimony not required because attorney's disregard of "clearly defined and firmly established" rule set forth in New York Worker's Compensation law "fell below any permissible standard of due care"); Shapiro v. Butler, 273 A.D.2d 657, 709 N.Y.S.2d 687, 689 (App. Div. 2000) (expert testimony not required to establish that lawyer who failed to file an answer, which led to a default judgment against client, acted negligently); S & D Petroleum Co. v. Tamsett, 144 A.D.2d 849, 534 N.Y.S.2d 800, 802 (App. Div. 1988) (expert testimony not required to establish that lawyer retained to secure a debt rendered inadequate professional service by failing to file a security agreement [*28] necessary to secure the debt). The allegations in this case clearly fall within the exceptions to the requirement of expert testimony. The gravamen of plaintiff's breach of fiduciary duty claim is that Halpern lied to her and had conflicting loyalties. Specifically, plaintiff claims that Halpern provided false assurances and made material omissions during the October 10, 2006 meeting--which included, among other things, allegedly lying to plaintiff by telling her that Adlerstein was also going to be on the mortgage--and thereby convinced plaintiff to close on 111 Berkley Street and that, by doing so, Halpern furthered Adlerstein's interests at plaintiff's expense. (See Pl. Mem. of Law (Halpern) at 10; see also, e.g., Pl. Dep. 112:6-22; 114:10-115:20.) Additionally, plaintiff has submitted evidence that Halpern knew about the $ 21,567.52 payment to Adlerstein (see DeRossi Dec. Ex. N) and that she failed to disclose this payment to plaintiff.

False statements or material omissions by an attorney to a client clearly breach the attorney's fiduciary duties, particularly where those false statements and omissions further conflicting interests. See, e.g., Summit Rovins & Feldesman v. Fonar Corp., 213 A.D.2d 201, 623 N.Y.S.2d 245, 246 (App. Div. 1995) [*29] (noting that attorney has fiduciary duty "to bring to the client's attention all relevant considerations" and denying defendant-attorney summary judgment because triable issues of fact existed regarding adequacy of attorney's disclosures about conflicts of interest). See generally Mermelstein v. Spector, 485 F.2d 474, 479 (2d Cir. 1973) (classifying, as a "recognized basic principle," the rule than an attorney who "negligently or willfully withholds from his client information material to the client's decision to pursue a given course of action, or to abstain therefrom, . . . is liable for the client's losses suffered as a result of action taken without benefit of the undisclosed material facts"); Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d 1, 865 N.Y.S.2d 14, 21 (App. Div. 2008) ("[A]ny act of disloyalty by counsel will also comprise a breach of the fiduciary duty owed to the client.") Assuming the jury credited plaintiff's version of events, it would not need expert testimony to find that a lawyer who allegedly violated basic requirements of the attorney-client relationship--candor and loyalty -- by engaging in, among other things, outright fraud (as is alleged here) [*30] failed to provide "adequa[te] professional service" and "fell [] below any standard of due care." Therefore, where, as here, the issue is whether an attorney breached her fiduciary duty by engaging in outright fraud in connection with a real estate transaction, plaintiff need not provide expert testimony to survive summary judgment on this claim."

It's a rare phenominom, but in this case the Second Department took another look at a case, and significantly changed its decision regarding legal malpractice.  in Uzzle v Nunzie Ct. Homeowners Assn., Inc. ;2010 NY Slip Op 01476 ;Decided on February 16, 2010 ;Appellate Division, Second Department   under 2008 NY Slip Op 7905, the AD wrote:"Given the limited scope of the plaintiff's notice of appeal, the issue of whether the Supreme Court erred in dismissing the causes of action aserted against the defendant John C. DiGiovanna is not peroperly before this Court."
 

Today, that decision was recalled and this is the final outcome: "The Supreme Court properly granted that branch of DiGiovanna's motion which was to dismiss the cause of action to recover damages for breach of contract insofar as asserted against him, as that cause of action was duplicative of the legal malpractice cause of action (see Maiolini v McAdams & Fallon, P.C., 61 AD3d 644, 645; Gelfand v Oliver, 29 AD3d 736; Shivers v Siegel, 11 AD3d 447). However, affording the legal malpractice cause of action a liberal construction and according the plaintiff every favorable inference, the complaint does state a cause of action to recover damages for legal malpractice (see generally Hamoudeh v Mandel, 62 AD3d 948, 949; Maiolini v McAdams & Fallon, P.C., 61 AD3d 644, 645; Malik v Beal, 54 AD3d 910, 911). "
 

What was it that turned the case around?

In Yakubov v Borukhov we see a common fact pattern.  It consists of an early event followed by litigation, bad outcome, and a look back, in legal malpractice, at the original attorney from years before.

Here the sequence is:  Real estate contract which was to allow plaintiff to subdivide property.  Seller balks, and Plaintiff-buyer litigates, eventually winning what turns out to be a damaged property.  Presumably, no subdivision is permitted.  Client, now years later, looks back at contract attorney seeking legal malpractice damages, some 5 years later.  How does this come out?

Attorney wins dismissal.  Plaintiff offers the following arguments:  I thought he was still my attorney.  This is patently insufficient, and the court so finds, in rather summary fashion.  Well then, says plaintiff, how about continuous representation ?  That's no good either, says the Court.  There is no indication, either in affidavit form or in evidence that there was a continuing, ongoing relationship.

Case dismissed.

How does an attorney prove negligence in a trip & fall case?  Failures in such proof provide a steady steam of legal malpractice inquiies, and fuel much plaintiff suspicion that the law is either not fair, or that their attorney could have done a better job.

In  Grazidei v. Mezeny Inc., 4903/07; Decided: February 9, 2010; Justice Jack M. Battaglia;KINGS COUNTY; Supreme Court we find the following discussion of the law of trip & fall:

"As summarized by Mezeny, Defendants contend that they are entitled to summary dismissal of Plaintiff's Verified Complaint "because the evidence demonstrates that [Plaintiff] did not know what caused her to fall and to the extent she now claims that she fell on the single step, a single step is not [an] inherently dangerous condition." (Affirmation, ¶8.) Defendants contend, in effect, that Plaintiff cannot establish the existence of an unreasonably dangerous condition on the premises, or that any such condition caused her to fall. Although questions as to breach of duty conceptually precede questions as to causation, where the plaintiff cannot identify the cause of a fall, the questions are conflated and addressed in the caselaw under the rubric of proximate cause. Here, by their contention on this motion that a single step is not an unreasonably dangerous condition, after service and acceptance of the Supplemental Verified Bill of Particulars and expert disclosure, Defendants recognize that Plaintiff has identified the single step as a cause of her fall. Their complaint becomes, in the first instance, therefore, that disclosure did not reveal any evidence that would relate the single step to Plaintiff's fall.

"In a trip and fall case, [a] plaintiff's inability to identify the cause of his or her fall is fatal to his or her cause of action, since, in that instance, the trier of fact would be required to base a finding of proximate cause upon nothing more than speculation." (Antonia v. Srour, 2010 NY Slip Op 213, * 1 [2d Dept Jan 12, 2010] [internal quotation marks and citations omitted]; see also Cherry v. Daytop Vil., Inc., 41 AD3d 130, 131 [1st Dept 2007]; Jackson v. Fenton, 38 AD3d 495, 495 [2d Dept 2007].) The defendant in a trip and fall case establishes its entitlement to judgment as a matter of law by submitting the deposition testimony of the plaintiff, demonstrating that the plaintiff cannot identify the cause of the fall. (See Scott v. Rochdale Vil., Inc., 65 AD3d 621, 621 [2d Dept 2009]; Hunt v. Meyers, 63 AD3d 685, 685 [2d Dept 2009]; Plowden v. Stevens Partners, LLC, 45 AD3d 659, 660 [2d Dept 2007]; Lee v. J&R Electronic, Inc., 38 AD3d 501, 501 [2d Dept 2007].)

"Proximate cause may be established without direct evidence of causation, by inference from the circumstances of the accident." (Constantino v. Webel, 57 AD3d 472, 472 [2d Dept 2008]; see also Cintron v. New York City Tr. Auth., 61 AD3d 803, 804 [2d Dept 2009]; Manning v. 6638 18th Ave. Realty Corp., 28 AD3d 434, 435 [2d Dept 2006].) But there must be "a sufficient nexus between the condition of the [property] and the circumstances of [the plaintiff's] fall to establish causation" (see Cherry v. Daytop Vil., Inc., 41 AD3d at 131), that is, "a reasonable inference of causation" and not "mere speculation" (see Constantino v. Webel, 57 AD3d at 472-473; see also Lissauer v. Shaarel Halacha, Inc., 37 AD3d 427, 427-28 [2d Dept 2007] ["sheer speculation"]; Grob v. Kings Realty Assocs., LLC, 4 AD3d 394, 395 [2d Dept 2004] ["purely speculative"].)

The "unknown cause" caselaw is most appropriately applicable where a foreign object or substance on the floor or stairs is alleged to have created the danger, or some defect in construction, such as a hole or broken step. It must be applied realistically where there is an alleged flaw in structural design, since a plaintiff cannot be expected to testify with an engineer's eye to the presence of the flaw and its likely effect in bringing about a fall.

With this in mind, the Court finds that Plaintiff's deposition testimony is insufficient to satisfy Defendants' prima facie burden based upon the "unknown cause" caselaw. As quoted above, Plaintiff testified that she "fell on the step," and, although she did not know "if there was anything about the step which caused [her] to fall," she described what happened. "I felt my left foot go under me…It's like walking out straight and not knowing…If you are walking out straight you are thinking you are going to be on a flat level, and I wasn't…It looked like I was going straight. I didn't see any difference."

Plaintiff's description of her fall is, at the least, consistent with a height differential, such as is presented by the single-step riser addressed in the expert disclosure. Moreover, although the "slope on the step" does not appear to be addressed in the expert disclosure, Plaintiff's testimony about it clearly points to the step itself as the cause of her fall.

Assuming, however, that Defendants have made a prima facie showing under the "unknown cause" caselaw, then the affidavits of Plaintiff and her expert engineer, submitted in opposition, are sufficient to raise triable issues as to whether the absence of handrails "constituted a violation of the subject building code ordinances, and whether the lack of handrails was a proximate cause of the accident." (See Spallina v. St. Camillus Church, 53 AD3d 650, 651 [2d Dept 2008].) Plaintiff asserts that "[w]hen [her] right foot buckled, [she] reached to [her] right for something to stop [her] from falling but there was nothing to hold onto and [she] fell to the ground." (Affidavit of Nancy Grazdei, ¶4.) "Even if the plaintiff's fall was precipitated by a misstep, given her testimony that she reached out to try to stop her fall, there is an issue of fact as to whether the absence of a handrail was a proximate cause of her injury." (See Antonia v. Srour, 2010 NY Slip Op 213, at * 1; see also Christian v. Railroad Deli Grocery, 57 AD3d 599, 601 [2d Dept 2008]; Scala v. Scala, 31 AD3d 423, 425 [2d Dept 2006].) The expert's affidavit tracks the 3101 (d) disclosure, and specifically addresses the absence of a handrail at the subject premises.

Defendants contend that the Court should not consider Plaintiff's affidavit as it relates to the absence of a handrail to find a triable issue, because she did not testify at her deposition that the absence of a handrail contributed to her fall. They contend that Plaintiff's affidavit "present[s] feigned issues of fact designed to avoid the consequences of [her] earlier deposition testimony, and thus [is] insufficient to defeat the defendants' motion." (See Hunt v. Meyers, 63 AD3d at 685-86]; see also Wilson v. Prazza, 306 AD2d 466, 467 [2d Dept 2003].) There is nothing in Plaintiff's affidavit that contradicts her deposition testimony, and the most that could be argued is that she would have been expected to mention the absence of a handrail as contributing to her fall. But the Court disagrees that the relevant questions asked, most of which are quoted above, would have elicited such a response. Moreover, it is debatable whether a layperson would immediately think of the lack of a handrail as the cause of a fall.

Defendants may yet succeed in at least removing the single-step issue from the case, if they are correct that "a single step is not an inherently dangerous condition." (Affirmation, ¶8.) But Defendants clearly overstate the significance of the caselaw on the issue. A defendant may establish its entitlement to judgment as a matter of law with evidence that a single step is both "open and obvious and not inherently dangerous." (See Bretts v. Lincoln Plaza Assoc., Inc., 2009 NY Slip Op 8771, * 1-* 2 [2d Dept Nov 24, 2009]; Groon v. Herricks Union Free School District, 42 AD3d 431, 432 [2d Dept 2007]; Luciano v. 144-18 Rockaway Realty Corp., 32 AD3d 505, 506 [2d Dept 2006].) Where a sufficient showing is not made, however, the defendant will be denied summary judgment. (See Kempter v. Horton, 33 AD3d 868, 869 [2d Dept 2006].) The caselaw on single steps or other height differentials is consistent with premises liability authority generally that, in the absence of a warning, the defendant seeking summary dismissal must demonstrate "as a matter of law, that the condition was both open and obvious and not unreasonably dangerous." (See Holly v. 7-Eleven, Inc., 40 AD3d 1033, 1033 [2d Dept 2007] [emphasis added]; see also Selig v. Burger King Corp., 66 AD3d 986, 986 [2d Dept 2009].)

And so, in a case involving an interior single-step riser, the defendant made a sufficient showing with evidence that "[t]here was a gold-color nosing on the step and the pattern of the tiles on the top of the steps was different from the pattern of the tiles below the steps"; and "[t]here was also a sign stating "Watch Your Step" adjacent to the step." (See Bretts v. Lincoln Plaza Assocs., Inc., 2009 NY Slip Op 8771, at * 1-* 2.) And where there was a single step in a hallway, the defendant made a sufficient showing with photographs revealing that "a yellow line had been painted across the top of the step to alert passersby of the height differential and that, also present, to the side, was a short ramp, allowing passersby to circumvent the step altogether." (See Groon v. Herricks Union Free School District, 42 AD3d at 432.)

Here, Defendants make no showing that the single step in front of the doors to the restaurant is either open and obvious or not inherently dangerous. Although defendant Prime Holdings does include photographs in its motion papers, they are not authenticated or otherwise shown to be admissible as evidence (see Corsi v. Town of Bedford, 58 AD3d 225, 228-29 [2d Dept 2008]), and they are not supported by any opinion, lay or expert, admissible or not, on the controlling issues.

Defendants cannot, therefore, obtain summary dismissal under either the "unknown cause" or single-step caselaw."

A common law retaining lien entitles the outgoing attorney to retain all papers, securities, or money belonging to the client that came into the attorney's possession in the course of representation, as security for payment of attorney's fees. Arising from Judiciary Law 475, it is enforceable only by retention of the items themselves and is lost if the file or documents are no longer in the attorney's possession.

A charging line similarly arises and attaches to any recovery and thus secures the attorney's right to compensation. A hearing will be held to determine fees, based upon Quantum meruit.

Quantum meruit is the fair and reasonable value of the services rendered, which may be more or less than the amount provided in the contract or retainer agreement and is determined by "taking into consideration the character of the services, the nature and importance of the litigation, the degree of responsibility imposed or incurred, the amount or value involved, the length of time spent, the ability skill and experience required and exercised, the character, qualifications and standing of the attorney and the results achieved. The recovery is not limited to the amount billed, the original terms of the retainer agreement, and may be less or more than the amount which might have been recovered under a contingency fee or other measuring tools of fees.

Unions provide attorneys and legal coverage for their members.  Sometimes employers provide attorneys for their employees.  Do they have legal malpractice responsibility to the member-employee ?  Does the attorney have a legal malpractice responsibility to the client, in the absence of privity?  Some answers are set forth in   NADA, -against- 1199 SEIU HEALTH CARE EMPLOYEES UNION, 09 Civ. 5796 (SAS);UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2010 U.S. Dist. LEXIS 12061;February 11, 2010,

Take this situation.  Client is a member of a union that provides legal free attorneys to its members. Perhaps the client needs an attorney for a closing, or to handle a simple contract.  In most cases, the attorney and the client do not sign a retainer agreement.  The attorney is paid, in some fashion, by the union, or in some cases, by the employer.  Then something goes wrong.  The main doctrinal problem in a legal malpractice analysis is that there is no professional relationship between the attorney and the client.  Resort  to an argument that the relationship is "so close" as to resemble privity often fails.  What then?

A suit against the union for lack of fair representation, or against the employer for breach of a collective bargaining agreement is one resort.  If that is the action, what is the statute of limitations?

Judge Scheindlin in Nada tells us: 'Liberally construed, Nada alleges that 1199 has breached its duty of fair representation. 12 In DelCostelio v. Teamsters, the Supreme Court held that the six-month statute of limitations of section 10(b) of the National Labor Relations Act applies to cases in which employees sue both their employer for breach of the collective [*5] bargaining agreement pursuant to section 301(a) of the Labor Management Relations Act, and their union for breach of its duty of fair representation. 13 In reaching this conclusion, the Court rejected the notion that state statute of limitation periods for vacating an arbitration award and for legal malpractice were applicable to such claims. 14 The Second Circuit has held "DelCostello to require that the § 10(b) six-month limitations period also be applied to unfair representation claims standing alone…."

"Here, Nada asserts that 1199 breached the duty of fair representation by failing to remedy the pay differential for certain of the former-144 members through the committee created by the May 2004 side letter agreement. Nada was aware of this claim on October 30, 2007, when he signed a grievance form complaining about 1199's failure to secure the raises and benefits mentioned in that agreement. Therefore, the six-month limitation period in which to bring this cause of action expired, at the latest, on April 30, 2007. Because Nada did not commence this action until June 5, 2009, it is untimely."

Once, the Corning glass works were a behemoth in upstate New York.  World class, cutting edge [no pun], and hugely successful, ownership of Corning stock was both a good investment and an emblem of upstate NY industriousness.  This case, Matter of Hsbc Bank U.S.A. v Jesse T. Littleton, 2010 NY Slip Op 01099 ; Decided on February 11, 2010 ; Appellate Division, Fourth Department demonstrates both the economic downturn in NY as well as the principal of trusts and releases.
Beneficiaries of a trust took a big hit in the value of Corning stock held in the trust.  The Corning stock comprised 80% of the corpus, and when its value went down, it hurt.  We pick up from the 4th Department opinion:

"The accounting revealed significant declines in the value of Corning stock, which constituted more than 80% of the trust corpus. Petitioners signed their respective releases, which provided that HSBC was forever absolved of all liability for the handling of trust assets.

More than three years later, petitioners commenced this proceeding seeking to set aside the releases, and Surrogate's Court granted the motions of HSBC and respondent law firm to dismiss the petition. We affirm.

According to petitioners, HSBC and respondent law firm committed fraud by failing to disclose the possible legal effect of the accounting and the execution of the releases. Contrary to petitioners' contention, however, the petition fails to state a cause of action for fraud or constructive fraud against either HSBC or respondent law firm because it fails to make a "factually supported allegation" of misrepresentation (Pope v Saget, 29 AD3d 437, 441, lv denied 8 NY3d 803; see Simmons v Washing Equip. Tech., 51 AD3d 1390, 1391-1392). We further conclude that the Surrogate properly determined that the breach of fiduciary claim against respondent law firm was, in essence, a claim for legal malpractice and thus was barred by the three-year statute of limitations (see CPLR 214 [6]; Harris v Kahn, Hoffman, Nonenmacher & Hochman, LLP, 59 AD3d 390). Even assuming, arguendo, that the petition states a separate claim for breach of fiduciary duty against respondent law firm, we conclude that such claim arises from the same facts as those from which the legal malpractice claim arises, and thus the Surrogate properly dismissed that claim as duplicative of the legal malpractice claim (see TVGA Eng'g, Surveying, P.C. v Gallick [appeal No. 2], 45 AD3d 1252, 1256).

Finally, we conclude that the Surrogate properly dismissed the breach of fiduciary duty claim against HSBC. HSBC fulfilled its fiduciary duty by providing petitioners with a full accounting of the trust, and petitioners failed to object to the accounting and executed releases waiving their rights against HSBC (see Matter of Hunter, 4 NY3d 260, 270-271; Matter of Schoenewerg, 277 NY 424, 427-428). "

When one starts to read a case, and the plaintiff is pro-se, look out for common mistakes within.  In Williams v Bushman ;2010 NY Slip Op 00840 ;Decided on February 2, 2010 ;Appellate Division, Second Department  we see at least two.  Here is the story line:
 

"The plaintiff, Nathaniel N. Williams, retained the law firm of Goldberg, Scudieri & Block, P.C. (hereinafter the Goldberg firm), to defend him in a mortgage foreclosure action. Franklin moved for summary judgment on the complaint, submitting in support of its motion the executed mortgage and evidence of Williams's default. In opposition, Mark K. Lindenberg, an attorney associated with the Goldberg firm, submitted an affidavit from Williams asserting, inter alia, that Williams had tendered a notice rescinding the mortgage to Franklin's predecessor in interest, Interstate Resource Corporation (hereinafter Interstate). Williams did not have a mail receipt or any other proof that the rescission notice had been sent to Interstate. Williams also asserted that Interstate had used unspecified "high pressure tactics" to induce him "to execute a high rate note and mortgage." In July 2000 the Supreme Court, Kings County, granted Franklin's motion for summary judgment. 

Problem 1

Williams subsequently retained the defendant, David M. Bushman, to prosecute an action in the Supreme Court, Rockland County, to recover damages for legal malpractice against Lindenberg and the Goldberg firm. In July 2004 the Supreme Court granted the motion of Lindenberg and the Goldberg [*2]firm to dismiss the complaint as time-barred. 

Problem 2

Williams then commenced the instant action alleging legal malpractice against Bushman on the ground that he failed to commence the legal malpractice action against Lindenberg and the Goldberg firm within the statute of limitations. Bushman moved for summary judgment dismissing the complaint, arguing that Williams could not show that he would have been successful in the underlying legal malpractice action but for Bushman's alleged error, because he could not show that Lindenberg committed malpractice or that any actions or omissions on Lindenberg's part were a proximate cause of the unfavorable resolution of the foreclosure proceeding. In an order dated May 21, 2008, the Supreme Court denied Bushman's motion for summary judgment.

Following the denial of summary judgment, Bushman moved to enforce a settlement agreement, which he alleged had been approved by Williams. In an order dated April 17, 2009, the Supreme Court denied Bushman's motion, holding that, although a settlement was apparently reached in principle, "it was never finalized by the execution of the settlement documents."  Plaintiff resisted taking a settlement from defendant.
 

Problem 3

 Through, inter alia, the affidavit of an attorney who specialized in real estate law, Bushman made a prima facie showing that Lindenberg's alleged omissions did not constitute a failure to exercise the skill and knowledge commonly possessed by an attorney, and were not the cause of Franklin's motion for summary judgment being granted. That motion was granted because Franklin submitted validly executed mortgage documents and evidence of Williams's default, and Williams could not raise a triable issue of fact (see Wells Fargo Bank, N.A. v Webster, 61 AD3d 856).

Plaintiff's complaint dismissed.

Courts are closed today and on Monday for the President's weekend.  Nevertheless, today we present an Appellate Term case on the interplay of fee dispute arbitration and legal malpractice.

Calabro & Assoc., P.C. v Katz ;2010 NY Slip Op 50192(U) ;Decided on February 9, 2010 ; Appellate Term, First Department .  This was a garden or varietal version of a fee demand, legal malpractice counterclaim.  Client successfully seeks dismissal of the case in favor of Part 137 fee arbitration, but then roundly loses the balance of his argument.  From the decision:
 

"As defendant conceded in his opposition papers below, his counterclaims alleging that plaintiff over-billed him are properly addressed in the attorneys' fees arbitration proceeding, since the arbitrators must determine the reasonableness of the fees based on "all relevant facts and circumstances" (22 NYCRR 137.0) and those counterclaims relate to a potential "adjustment of the fee" (22 NYCRR 137.1[b][4]). The counterclaim for legal malpractice should have been dismissed. Plaintiff made a prima facie showing that it was not negligent and that any alleged negligence did not proximately cause defendant's claimed damages. In opposition, defendant failed to raise a triable issue on either score. On the issue of plaintiff's alleged negligence, defendant did not submit any competent evidence showing that plaintiff failed to exercise the degree of care commonly exercised by a member of the legal profession (see Orchard Motorcycle Distrib., Inc. v Morrison Cohen Singer & Weinstein, LLP, 49 AD3d 292 [2008]; Schadoff v Russ, 278 AD2d 222 [2000]). Moreover, defendant failed to show that "but for" plaintiff's alleged negligence defendant would have obtained a more favorable result in the underlying landlord-tenant proceeding or would have successfully sold his business to a third-p[*2]arty (see AmBase Corp. v Davis Polk & Wardell, 8 NY3d 428 [2007]; Davis v Klein, 88 NY2d 1008 [1996]). "

Actually we're a little shocked at the facts of this matrimonial action involving Thomas Liotti.  in Coccia v Liotti ;2010 NY Slip Op 00917 ; Decided on February 9, 2010 ; Appellate Division, Second Department  we see some very unusual language from the Appellate Division.  Beyond reinstating [or more correctly put, modifying] the legal malpractice claims, the AD basically granted summary judgment wiping out attorney fees by Liotti on the almost unheard of use of a disbarred attorney and misleading the client into thinking that the attorney was in good standing.
 

Rather than explain, here is the decisional language:

"The Supreme Court also erred by, in effect, upon renewal, vacating the determination in the order entered September 13, 2007, denying that branch of the initial cross motion which was for summary judgment dismissing the fourth cause of action to the extent that it was based upon a failure to render itemized bills, and in thereupon granting that branch of the initial cross motion. Although the court appropriately reasoned that noncompliance with 22 NYCRR 1400.2 does not require an attorney to return fees already paid to him or her for services properly rendered (see Mulcahy v Mulcahy, 285 AD2d 587, 588; Markard v Markard, 263 AD2d 470, 471), this cause of action sought the return of counsel fees already paid by the plaintiff not only on the ground that the defendant failed to render itemized bills in compliance with 22 NYCRR 1400.2 and 1400.3, but also on the ground that the defendant breached the retainer agreement by virtue of the manner, form, substance, and timeliness of his billing. Based on the contents of the defendant's submissions on the initial cross motion, the defendant failed to make a prima facie showing that he complied with the provision in the retainer agreement related to the manner of billing. Thus, the court erred in awarding summary judgment to the defendant dismissing this cause of action to the extent that it was based upon a failure to render itemized bills.

The Supreme Court properly, in effect, upon renewal, vacated the determination in [*5]the order entered September 13, 2007, denying that branch of the initial cross motion which was for summary judgment dismissing the fifth cause of action to recover damages for fraudulent inducement, based upon the defendant's alleged misrepresentation that he would prosecute an appeal from an order in the underlying malpractice action, and in thereupon granting that branch of the initial cross motion. "In an action to recover damages for fraud, the plaintiff must prove a misrepresentation or a material omission of fact which was false and known to be false by [the] defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury" (Lama Holding Co. v Smith Barney, 88 NY2d 413, 421). The plaintiff alleged that she was fraudulently induced into executing the retainer agreement by the defendant's alleged promise that he would prosecute an appeal from an order in the underlying matrimonial action. She also asserted that she was informed during the course of the representation that the defendant's firm would address the appeal, but that the defendant failed to prosecute the appeal. Since the plaintiff is, in essence, arguing that the defendant breached the retainer agreement, the Supreme Court appropriately awarded summary judgment to the defendant dismissing this cause of action. " [A] cause of action to recover damages for fraud will not arise when the only fraud alleged relates to a breach of contract'" (Biancone v Bossi, 24 AD3d 582, 583, quoting Rosen v Watermill Dev. Corp., 1 AD3d 424, 426). Further, a representation of opinion or a prediction of something which is hoped or expected to occur in the future does not sustain an action to recover damages for fraud (see Chase Invs. v Kent, 256 AD2d 298, 299).

However, the Supreme Court erred by, in effect, upon renewal, vacating the determination in the order entered September 13, 2007, denying that branch of the initial cross motion which was for summary judgment dismissing the sixth cause of action to recover damages for fraudulent inducement, based upon the defendant's alleged misrepresentation that the person who would be substantially responsible for her case was an attorney. The plaintiff alleged that she later learned that such person was a disbarred attorney, prohibited from practicing law, and that the defendant fraudulently concealed this information. Contrary to the Supreme Court's conclusion, we find that the defendant failed in his initial submissions to establish, as a matter of law, that the plaintiff did not justifiably rely upon his representation of this individual's status as an attorney in good standing.

The Supreme Court erred in denying those branches of the plaintiff's cross motion which were for summary judgment dismissing the first, second, and third counterclaims seeking to recover outstanding counsel fees. The Supreme Court, in denying these branches of the plaintiff's cross motion, reasoned that questions of fact existed as to whether the defendant was justifiably discharged for cause, based upon his alleged failure to perfect and prosecute the appeal from the matrimonial order. However, as the plaintiff correctly points out, this was not the only basis upon which she sought summary judgment dismissing these counterclaims. The plaintiff also argued to the Supreme Court, inter alia, that these counterclaims should be dismissed since, had she known that a disbarred attorney was working on her case, she would have been justified in discharging the defendant for cause.

"[A] client has an absolute right, at any time, with or without cause, to terminate the attorney-client relationship by discharging the attorney" (Campagnola v Mulholland, Minion & Roe, 76 NY2d 38, 43; see Solomon v Bartley, 203 AD2d 449). Where the discharge is for cause, the attorney has no right to compensation, and may not assert a retaining lien on the client's file (see Campagnola v Mulholland, Minion & Roe, 76 NY2d at 43; Orendick v Chiodo, 272 AD2d 901; Matter of Leopold, 244 AD2d 411). "Misconduct that occurs before an attorney's discharge but is not discovered until after the discharge may serve as a basis for a fee forfeiture" (Orendick v Chiodo, 272 AD2d at 902). An attorney may be discharged for cause where he or she has engaged in misconduct, has failed to prosecute the client's case diligently, or has otherwise improperly handled the client's case or committed malpractice (see e.g. Costello v Kiaer, 278 AD2d 50; Hawkins v Lenox Hill Hosp., 138 AD2d 572).

In her cross motion, the plaintiff alleged that the disbarred attorney was closely involved in her case, and reassured her that he was working on her appeal from the matrimonial [*6]order. The plaintiff alleged that the disbarred attorney not only had contact with her, but also dealt with the husband's attorney and with the attorney for the children who had been appointed by the court. She claimed that the defendant seemed unfamiliar with her case, consulted with the disbarred attorney, and sought advice from the disbarred attorney when it was necessary to appear in court. The time records which the plaintiff submitted on her cross motion indicated that the defendant intended to bill her for conferring or meeting with the disbarred attorney on several occasions, that the disbarred attorney drafted memos and notes and that, on one occasion, the disbarred attorney accompanied the defendant to court. The plaintiff alleged in her affidavit that, while in court, the disbarred attorney consulted with her and the defendant "on how to handle whatever was in front of the court at that time."

Based upon the plaintiff's allegations, it appears that the disbarred attorney was engaged in the practice of law (see Matter of Rowe, 80 NY2d 336, 341-342, cert denied sub nom. Rowe v Joint Bar Assn. Grievance Comm. for Second & Eleventh Jud. Dists., 508 US 928 ["The practice of law involves the rendering of legal advice and opinions directed to particular clients"]). A disbarred attorney may not engage in the practice of law (see 22 NYCRR 691.10[e]), and an attorney may be guilty of professional misconduct where he intentionally aids a disbarred attorney to continue to practice law (see Matter of Raskin, 217 AD2d 187). Further, the plaintiff alleged that the defendant knew that this individual was disbarred, yet intentionally failed to reveal this information. Moreover, the orders related to this individual's suspension and disbarment involve sustained charges of lying to clients and neglecting their cases. By entrusting the plaintiff's case to this individual to the extent alleged by the plaintiff, the defendant failed diligently to handle her case. Thus, the plaintiff met her burden of establishing, as a matter of law, that she would have been justified in discharging the defendant for cause.

In response to these allegations, the defendant merely asserted that the disbarred attorney's involvement in the plaintiff's case had no bearing on the issue of counsel fees since the plaintiff received a "phenomenal result," and that the Grievance Committee for the Tenth Judicial District "took no action with respect to [these allegations]." The defendant, however, never attempted to raise a triable issue of fact as to the level of this individual's involvement in the plaintiff's case, and never claimed that he was unaware of this person's status as a disbarred attorney. Although, on this appeal, the defendant raises a number of allegations in this regard, including that the disbarred attorney was only minimally involved in the plaintiff's case, these allegations are dehors the record. Accordingly, in response to the plaintiff's prima facie showing with respect to the defendant's lack of entitlement to retain counsel fees that she already paid, the defendant failed to raise a triable issue of fact. "

Macaluso v Pollack , 2010 NYSlipOp 30276(U) , Justice Diamond, Nassau County presents an interesting story of how a case can get dismissed. Beyond the storyline, the case presents analysis of liability of predecessor/subsequent attorneys, how the dissolution of a partnership affects legal malpractice litigation, what subsequent attorneys  can accomplish in the Second Circuit, and potential liability of associate attorneys.

The original attorneys were to represent plaintiff in an employment discrimination case, but negligently failed to follow court orders in US District Court.  Eventually, the case was dismissed by the US District Judge, on one particular day in which the attorneys did not appear for a conference.  This was apparently the last straw, as there had been many previous late filings, etc.  So case is dismissed.  Attorneys for plaintiff at that point were a partnership of two attorneys.  These attorneys then file an appeal to the Second Circuit, but leave out several essential filings which dooms the appeal.

Plaintiff hires set two of attorneys, who try to fix the appeal, but fail.  The appeal is dismissed by the Second Circuit. This firm consists of attorneys and an associate attorney who are sued.  Who is at fault?

Read the decision for the full analysis, which cannot be excerpted here. In the end, first attorneys remain in the case, second attorneys are out, and the associate is out, too.

Carboni v Ginsberg ; 02/02/2010 2010 NYSlipOp 30256(U) Maltese, J. is an illustration of how a potential legal malpractice case underlays almost all activity within the realm of attorney representation, which is to say, everything.

Here, the question is whether plaintiff lost his employment in a wrongful manner, and after that determination, whether he has sued the attorneys within the appropriate statute of limitations time.

In a meticulous, fact specific decision, Justice Maltese writes that under CPLR 3211(a)(1) "the movant is required to demonstrate that the `documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law.'"

In this case, defendant's documents were less than conclusive.  A stipulation did not end the question of whether a discharge from employment could still be litigated.  On the opposite side, there was inconclusive proofs of whether a named defendant continued to be an employee of the law firm on the date of the purported malpractice.

Lastly, defendants wanted to demonstrate that they did not yet represent plaintiff when his statute of limitations against the Transit Authority expired. 

In Edelman v Poster ;  2010 NY Slip Op 00788 ;  Decided on February 4, 2010 ;  Appellate Division, First Department  we see a situation in which a matrimonial retainer agreement boldly stated a right to arbitrate, yet the Appellate Division, First Department, determined that client has no right to arbitrate.
 

Here is the retainer language:  "While I seek to avoid any disputes concerning the payment of our fee, in the event such a dispute does arise, you have the right, at your election, to seek arbitration, the results of which are binding on both parties. I shall advise you in writing by certified mail that you have 30 days from receipt of such notice in which to elect to resolve the dispute by arbitration, and I shall enclose a copy of the arbitration rules and a form for requesting arbitration. If no action is pending and if you do not timely enforce your rights to enter into fee arbitration, I may commence legal proceedings against you to recover any unpaid fee "

Here is how the First Department interpreted this language:

"Because we do not believe that the parties' retainer agreements may be interpreted without reference to the matrimonial rules in effect at the time they were entered, which governed the attorney-client relationship in domestic relations matters with respect to fee disputes and arbitration, we reverse the grant of summary judgment in defendant's favor and reinstate the complaint. A contrary result would do violence to the very rules we endeavor to enforce and penalize an attorney who complied in all respects with the matrimonial rules in effect at the time each retainer agreement was drafted and executed.

While these retainer agreements evidence a clear intent to give defendant the right to binding arbitration of fee disputes at her option, to be governed by arbitration rules to be provided by plaintiff, material terms are missing in that they do not specify what those rules are or identify the forum for the arbitration. However, there is no requirement that an agreement to arbitrate be encompassed in "a single comprehensive document" (5 NY Jur 2d, Arbitration and Award § 17, at 45-46; see also American States Ins. Co. v Sorrell, 258 AD2d 782, 783 [1999]), and where it is clear from the language of an agreement that the parties intended to be bound and there exists an objective method for supplying a missing term, the court should endeavor to hold the parties to their bargain (166 Mamaroneck Ave., 78 NY2d at 91; see also Cobble Hill Nursing Home v Henry & Warren Corp., 74 NY2d 475, 483 [1989] cert denied 498 US 816 [1990] [before rejecting an agreement as indefinite, a court must be satisfied that the agreement cannot be rendered reasonably certain by reference to an extrinsic standard that makes its meaning clear]; Marshall Granger & Co., CPA's, P.C. v Sanossian & Sardis, LLP, 15 AD3d 631, 632 [2005]). "

In this Case Egnotovich v. Katten Muchin Zavis & Roseman LLP, 604101/06 , Decided January 23, 2008 ,Justice Bernard J. Fried NEW YORK COUNTY ,Supreme Court Plaintiffs joined a vacation club in which they each deposited $ 400,000, and the group was to purchase or lease apartments or houses in prime vacatiion spots. These spots included Paris, Mexico, Teluride, and other hot spots. More than $1.6 million was collected, and the Katten law firm drafted escrow agreements in which it was to hold 80% of the collections and pay them out when the club gave the law firm vouchers. The money was collected and paid out.

For reasons unstated [bad locations? no houses actually available?] some of the members sue the law firm for fraud and escrow violations. "Plaintiffs are former founding members of nonparty Havens, Inc. (Havens), a resort destination club in the business of acquiring vacation properties to be used by the club members. Funding for these property acquisitions was to be generated principally through the financial contributions of the founding members. To become founding members, plaintiffs were required to sign a membership agreement, and to pay $150,000 in membership dues. A portion of the membership dues was to be held as a deposit in escrow. Defendant Katten Muchin Rosenman LLP, sued here as Katten Muchin Zavis & Roseman LLP (Katten), acted as escrow agent for the escrow account. In 2006, Havens failed as a going concern, and is now apparently without funds to pay damages suffered by plaintiffs. Plaintiffs then brought this action against Katten seeking return of their deposits, and alleging wrongful release of escrowed funds and furtherance of fraud by the club's sponsors. Katten now moves for summary judgment dismissing the amended complaint1 on the ground that it fails to state a cause of action, and is contradicted by clear and unambiguous documentary evidence.

For the reasons set forth below, Katten's motion is granted. "

"absolutely secured were not collateral to the Membership Documents (see e.g. Martian Entertainment , LLC v. Harris, 12 Misc 3d 1190[A], * 5 [representations underlying fraudulent inducement claim must be "collateral to the contract"]). To the contrary, the degree of security backing the Deposits is expressly provided by the Certificates (see Certificate, ¶1 [the membership deposits are subject to refund 30 years from the date of the Certificate and "pursuant to and subject to the terms and conditions of the Membership Agreement and the Membership Plan]"; id., ¶2 [the refund right "is backed by and subject to the availability of the assets of (Havens)"]). Indeed, it is plaintiffs' own position that each of the Membership Documents "discusses Deposits and their use and repayment . . . and thereby implicates use of an escrow" (Pls Facts, ¶¶2, 4, 6). An issue "central" to a contract cannot be construed as collateral to that contract (PSI Intl., Inc. v. Ottimo, 272 AD2d 279 [1st Dept 2000]).

Moreover, even fraudulent inducement requires "misrepresentations of present Facts (rather than merely of future intent)" (Martian Entertainment, LLC v. Harris, 12 Misc 3d 1190[A], * 5). Plaintiffs allege that Havens promised that "deposits would be handled in a specified way," that they "would be held in escrow . . . for the protection and benefit of the Founding Members," and that "[Founding Members] would be protected by the continuing existence of cash on deposit or real estate available to fund repayment if the venture failed" (Opp Br., at 24, 25 [emphasis added]; Egnotovich Aff., ¶6 [emphasis added]; see also Loeb Aff., ¶¶4-5). To the extent, if any, that these representations made by Havens are untrue, they are broken promises, and not fraudulent statements of fact (see e.g. Morgan, Lewis & Bockius LLP v. IBuyDigitial.com, Inc., 14 Misc 3d 1224[A], 2007 NY Slip Op 50149[U], *7 [Sup Ct, NY County 2007] [dismissing counterclaim that plaintiff "fraudulently induced (defendant) into entering the engagement letter by stating that (plaintiff) would be personally involved in handling the IPO, that the fees would be capped at $425,000, that the IPO would be consummated by March 2005 and that the legal fees charged would be limited to work on the IPO"] [emphasis added]; Ullmann v. Norma Kamali, Inc., 207 AD2d 691, 692-693 [1st Dept 1994] ["cause of action for fraud does not arise" based on "failure to perform promises of future acts"] [citation omitted]).

Consequently, the aiding and abetting fraud claim must be dismissed."

There are a few situations in legal malpractice where an expert is not needed for plaintiff.  An expert is needed, in general, when the subject matter is unknown or too complicated for lay jurors to understand or determine, and they require explanation by a person who is professionally or educationally acquainted with the specialized field. 

Whether an act by the target attorney was a departure from the good and applicable standards of attorney practice is almost always the province of an attorney-expert.  The few exceptions are only the most basic of mistakes, such as a forgotten statute of limitations.

Here, in Tran Han Ho v Brackley   2010 NY Slip Op 00575   Decided on January 28, 2010   Appellate Division, First Department  we see two mistakes:  the failure to offer an expert, and an attempt to offer an expert opinion on sur-reply.  We envision plaintiff's attorney reading defendant''s reply with dread, seeing [hypothetically] the argument that no expert opinion has been submitted and that summary judgment must issue.
 

"The motion court properly refused to consider the sur reply affirmation of plaintiffs' legal expert presented to the court after the motion had been fully submitted (see Foitl v G.A.F. Corp., 64 NY2d 911 [1985]). Absent an expert's affidavit, and given claims that, as pleaded, raise issues of professional standards and causation beyond the ordinary experience of persons who are not lawyers, summary judgment was properly granted (see Ehlinger v Ruberti, Girvin & Ferlazzo, 304 AD2d 925, 926 [2003]; cf. Butler v Brown, 180 AD2d 406, 407 [1992], lv denied 80 NY2d 751 [1992], citing S & D Petroleum Co. v Tamsett, 144 AD2d 849, 850 [1988])."

We can't tell an awful lot of the facts of the underlying case from the Second Department decision in Nelson v Roth   2010 NY Slip Op 00658   Decided on January 26, 2010   Appellate Division, Second Department but we do see the ironic clash of two well known Legal Malpractice defense firms, one acting as a plaintiff's attorney while at the same time defending an attorney in this case. 
 

Plaintiff sues defendant for legal malpractice.  In an attempt to knock out the plaintiff's attorney (success would not end the case, but would definitely place it in jeopardy, and create a time out ) defendant started a third party action against the plaintiff's attorney, and then at the same time moved to dismiss the complaint.

"The Supreme Court properly granted that branch of Sieradzki's motion which was to dismiss the third-party cause of action to recover damages for legal malpractice. "On a motion to dismiss pursuant to CPLR 3211(a)(7), the pleading is to be afforded a liberal construction" (Kempf v Magida, 37 AD3d 763, 764). The court must accept the facts as alleged in the complaint as true, accord the plaintiffs the benefit of every possible favorable inference, and determine whether the facts as alleged fit within any cognizable legal theory (see Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 303; Leon v Martinez, 84 NY2d 83, [*2]87-88). To establish a cause of action alleging legal malpractice, a plaintiff must prove, inter alia, the existence of an attorney-client relationship (see Terio v Spodek, 63 AD3d 719, 721; Velasquez v Katz, 42 AD3d 566, 567). To prove an attorney-client relationship, there must be an explicit undertaking "to perform a specific task" (Terio v Spodek, 63 AD3d at 721). " It is well established that, with respect to attorney malpractice, absent fraud, collusion, malicious acts, or other special circumstances, an attorney is not liable to third parties, not in privity, for harm caused by professional negligence'" (Moran v Hurst, 32 AD3d 909, 911, quoting Rovello v Klein, 304 AD2d 638, 638). Viewing the third-party complaint in the light most favorable to Roth, she failed to allege the existence of an attorney-client relationship between herself and Sieradzki.

Further, the Supreme Court properly denied that branch of Roth's cross motion which was for summary judgment dismissing the complaint. "To make a prima facie showing on a motion for summary judgment, the attorney in a legal malpractice action must present admissible evidence that the plaintiff cannot prove at least one of the essential elements of a legal malpractice claim" (Terio v Spodek, 63 AD3d at 721). The evidence submitted demonstrated the existence of a triable issue of fact as to whether there was an attorney-client relationship between Roth and the plaintiffs. In light of Roth's failure to meet her prima facie burden, it is unnecessary to consider the adequacy of the plaintiffs' opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).

Finally, the Supreme Court properly, in effect, denied that branch of Roth's cross motion which was to disqualify Sieradzki as counsel for the plaintiffs. Roth failed to satisfy her burden by offering any proof that Sieradzki's testimony would be "necessary" (Bentvena v Edelman, 47 AD3d 651, 652). "

Client hires law firm, law firm is said to have made mistakes, law firm is said to have made corrective motions based upon its own mistakes, and then charged client.  Law firm sues client, and client answers without filing a counterclaim.

Its not evident from the decision but we guess that client then hired an attorney who seeks to change an affirmative defense to a counterclaim for legal malpractice.  in addition, attorney seeks to add an employee of the law firm as a "third party" defendant, and asks for a copy of the file and discovery responses.  How does Judge Gische of Supreme Court, New York County decide?

In Wagner Divs, P.C. v Gargano 01/20/2010 ;  2010 NYSlipOp 30156(U)  Justice Gische decides:

a.  In a regular case, retaining lien trumps need for file

b.  In a case with a legal malpractice counterclaim, need for file trumps law firm's retaining lien

c.  Law firm has to allow photocopying

d.  Defendant must pay for the copies

e. Amendment should be, and is, freely granted here.

 

Victoria Kremen suffered unnecessary, and negligent bilateral mastectomy.  It is said that removal of secondary sexual characteristics is akin to removal of ones central identity.  Ms. Kremen was subjected to a horrible misdiagnosis, with subsequent surgery.

Things only went from bad to worse.  She hired attorneys, but the action was not filed correctly.  From law.com: ""[T]he following illustrates why members of the public may hold cynical views of the legal profession," Supreme Court Justice Emily Jane Goodman began her ruling in Kremen v. Benedict P. Morelli & Associates, 101739/06.

Victoria Kremen underwent a double mastectomy after allegedly being misdiagnosed with breast cancer. She accused Morelli Ratner and the now defunct Schapiro & Reich of mishandling the action she brought against her doctors, a suit that was ultimately dismissed because the 2 1/2-year statute of limitations had expired.

Morelli Ratner was formerly known as Benedict P. Morelli & Associates.

Kremen also lost her bid to sue the attorneys for legal malpractice on the ground that they had failed to preserve her case. Now, Morelli Ratner is pressing a counterclaim against Kremen to recoup $6,000 the lawyers spent in advancing her medical malpractice case. "

The Appellate Division reversed Justice Goodman's decision on the statute of limitations against Morelli Ratner and dismissed. "Plaintiffs allege negligence in legal representation in their original medical malpractice action, which was dismissed as untimely. Specifically, they allege failure to argue their entitlement to the "bankruptcy toll" of the statute of limitations. 11 USC § 108 (a) (2) provides debtors a two-year toll of an existing statute of limitations period, but only if "such period has not expired before the date of the filing of the petition." Here, the bankruptcy toll was not triggered because the statute of limitations had already run. "

Morelli Ratner then sued plaintiff for $ 6000 of expenses.  Justice Goodman has rendered a decision on this claim. From Law.Com: "A Manhattan judge has slapped the personal injury firm of Morelli Ratner with $6,000 in sanctions for bringing a "spiteful" and "wasteful" suit against a former client. Supreme Court Justice Emily Jane Goodman's ruling comes three months after she sharply criticized the firm for launching a "nonsensical" action to recover the costs of an unsuccessful medical malpractice action from Victoria Kremen. "

Professional Judgment is what we hire attorneys for, and what we expect from them.  Litigants are generally unable to proceed through difficult thickets of choice of courts, choice of strategy, choice of questions to ask at a trial.  Nevertheless, we expect that our attorney will exercise correct and satisfactory professional judgment.  When the client suspects that a bad result came is a departure from good and accepted practice, rather than justified by the facts, a legal malpractice case will follow.

In our examination of STONEWELL CORP., and RICHARD GLADSTONE, Plaintiffs, -against- CONESTOGA TITLE INSURANCE CO., WILLIAM KOLSHORN, 04 CV 9867 (KMW)(GWG) we looked at the legal malpractice definitions and application.  Today, we look at the professional judgment defense.

"The Court is not persuaded by Stonewell's contention that Dollinger was negligent in advising Stonewell to proceed in the "bias[ed] forum" of the Middle District of Florida instead of the more "impartial" forum of the New York district court. (See Pl. Resp. at 10, 13, DE 126.) The Court will not endorse the view that some district courts are "biased" while others are "impartial," and that an attorney's duty to a client includes determining whether or not a court is "biased." The appropriate inquiry is whether the defendant-attorney exercised a "degree of care, skill and diligence commonly possessed and exercised by a member of the legal community." Nobile, 265 F. Supp. 2d at 288. Based upon the record before the Court, Dollinger met the requisite standard of care and conduct in pursuing the first "innocent owner" petition. 5

 Stonewell's reliance [*19] on Rubens v. Mason, 527 F.3d 252 (2d Cir. 2008), is without merit. In Rubens, the Court of Appeals for the Second Circuit vacated the district court's granting of defendant's motion for summary judgment in a legal malpractice suit, holding that one alleged act -- the attorney's decision not to present an expert witness in an arbitration proceeding -- may have constituted negligence. In a highly fact-specific analysis, the appellate court noted that, under some circumstances, "[d]etermining whether [the attorney's] alleged failures were negligent or merely reasonable tactical decisions present[] a question of fact that [can]not be resolved on summary judgment." Rubens, 527 F.3d at 254 (quoting Rubens v. Mason, 387 F.3d 183, 190 (2d Cir. 2004)). In the instant case, the Court must engage in its own fact-specific analysis to determine whether there is a disputed issue of fact as to whether Dollinger's conduct was negligent or proximately caused any damages to Stonewell. See Rubens, 527 F.3d at 255; Wester, 757 N.Y.S. 2d at 501.

The Court finds that Dollinger's decision to notify the court in the Southern District of New York of the status [*20] of the Florida proceedings and to request an interim stay pending decision on the first "innocent owner" petition in Florida satisfies the basic standards of legal practice. It is undisputed that the Florida and New York courts both had jurisdiction over the issue of whether Stonewell was a bona fide purchaser of the Center Point Mall property, a legal matter that would essentially determine the validity of Stonewell's title. See United States v. Weiss, 467 F.3d 1300, 1307 (11th Cir. 2006) (holding that the Florida district court had jurisdiction over the criminal forfeiture proceeding pursuant to 18 U.S.C. § 3231, while the New York district court had diversity jurisdiction over the Williams action pursuant to 28 U.S.C. § 1332).

Given the highly complex and substantively overlapping legal proceedings touching upon the validity of Stonewell's purported title to the Center Point Mall property at the time, there was no clearly superior legal strategy for Stonewell. It was reasonable for Dollinger to inform the Williams court about the Florida proceedings and to seek an interim stay in the Southern District of New York. The Williams court itself agreed with Dollinger's assessment of the [*21] situation in granting the interim stay. The record does not indicate that Dollinger's decision to give priority to the litigation in the Florida district court by filing the "innocent owner" petition there, and to seek the interim stay of the Williams action, constituted anything less than competent legal representation under difficult circumstances. Where a claim of legal malpractice is based upon a plaintiff's displeasure, developed only with the benefit of hindsight, regarding a defendant-attorney's selection of one among several reasonable strategic options, summary judgment should be granted in defendant's favor. See Rosner, 481 N.E. 2d at 554; Bernstein, 554 N.Y.S. 2d at 490."

Complex multi-state, multi-district, criminal-civil high stakes litigation...really, it can only end in a legal malpractice case.  Here, in Stonewell Corp. v. Conestoga Title Ins. Co., 2010 U.S. Dist. LEXIS 1107 [2004 cv 9867] a decision by Judge Kimba Woods lays out just how complex a case can get.  Today we will deal with the elements of legal malpractice, and tomorrow, with the defense of "professional judgment."

"Stonewell asserts three separate claims alleging that Dollinger committed legal malpractice while representing Stonewell in proceedings related to Stonewell's purported property rights over a Center Point Mall property in New Jersey. First, Stonewell claims that Dollinger committed legal malpractice by: (1) advising Stonewell to pursue certain legal actions, including filing an "innocent owner" petition pursuant to 18 U.S.C § 1963(l) in the Middle District of Florida; (2) failing to advise Stonewell of the risks of taking such legal actions; (3) advising Stonewell to stay related proceedings in the Southern District of New York; and (4) failing to advise Stonewell of or otherwise [*3] address an alleged conflict of interest with respect to a second "innocent owner" petition in light of Dollinger's relationship with Conestoga Title Insurance Company (hereinafter "Conestoga"). "
 

"A plaintiff must establish the following elements for a claim of legal malpractice under New York State law: (1) an attorney-client relationship, (2) attorney negligence (3) that is the proximate cause of a loss, and (4) actual damages. See Allianz Ins. Co. v. Lerner, 416 F.3d 109, 118 (2d Cir. 2005); Estate of Re v. Kornstein Veisz & Wexler, 958 F. Supp. 907, 920 (S.D.N.Y. 1997). To succeed on a motion for summary judgment in a legal malpractice action, the defendant must establish that the plaintiff cannot prove at least one of these essential elements. See Rubens v. Mason, 527 F.3d 252, 255 (2d Cir. 2008); Carney v. Philippone, 332 F.3d 163, 167 (2d Cir. 2003).

To find negligence, a court must find sufficient evidence that the defendant-attorney's conduct "fell below the ordinary and reasonable skill and knowledge commonly [*14] possessed by a member of his profession." Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006) (quoting Grago v. Robertson, 49 A.D.2d 645, 370 N.Y.S. 2d 255 (N.Y. 1975)). If the pleadings and evidence indicate no more than an "error of judgment" or a "selection of one among several reasonable courses of action," dismissal of the claims is warranted. Rosner v. Paley, 65 N.Y.2d 736, 481 N.E. 2d 553, 554, 492 N.Y.S.2d 13 (N.Y. 1985); see also Nobile v. Schwartz, 265 F. Supp. 2d 282, 288 (S.D.N.Y. 2003) (noting that a plaintiff must show that the attorney "failed to exercise that degree of care, skill and diligence commonly possessed and exercised by a member of the legal community").

Common examples of circumstances for which an attorney may be held liable include "ignorance of the rules of practice, failure to comply with conditions precedent to suit, or . . . neglect to prosecute or defend an action." Hatfield v. Herz, 109 F. Supp. 2d 174, 180 (S.D.N.Y. 2000) (quoting Bernstein v. Oppenheim & Co., 160 A.D.2d 428, 554 N.Y.S. 2d 487, 489-90 (1st Dep't 1990)) Allegations that amount to nothing more than a "dissatisfaction with strategic choices" will not support a malpractice claim as a matter of law. Bernstein, 554 N.Y.S. 2d at 490."

We're proud to point today to the article "Settlements and Subsequent Legal Malpractice" in today's New York Law Journal.  One interesting wrinkle on the legal malpractice scene is how settlements, and the rote allocutions at settlement affect legal malpractice.

"It is well settled that to establish a cause of action 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." Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438 (2007), quoting McCoy v. Feinman, 99 NY2d 295 (2002), "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" Rudolf at 442; Fireman's Fund Ins. Co. v. Farrell, 57 AD3d 721 (2d Dept. 2008).

The four elements of legal malpractice, put more simply, are: departure, proximity, ascertainable damage, and the "but for" element. The defense of a legal malpractice action may take place on any of the four elements set forth. Was the behavior of the attorney a departure from the degree of skill and care? Was the departure a proximate cause of the damage? Was there one or more than one cause of the damage? "

One way that settlements may upset a later legal malpractice case is when the judge asks "Are you satisfied with the work of your attorney?"  How this question crept into a settlement allocution is buried in ancient ritual.  How important it is is shown in a few recent cases.

"Recently, one Appellate Division case and two Supreme Court cases have challenged the "effectively compelled" principle, and in effect, turned it on its head. The setting for this triumvirate of cases is matrimonial settlements. For reasons not sanctioned in the CPLR or any statute, the custom on settlement of a matrimonial action is to allocute the two parties to the settlement. Beyond the questions of whether the parties have capacity, are in sufficient health to understand, are not taking cognitive altering medication, the court often chooses to ask whether the clients are satisfied with their attorney's work. The genesis of this practice is not clear; its purpose seems to be to insulate the attorneys from later criticism. In this latest set of cases, the insulation appears to work."

For the rest of the discussion, please see today's NYLJ.

Our meme today, again, is that legal malpractice is to be found in all endeavors involving attorneys.  It is no stranger to Bankruptcy proceedings, and in today's case, a verdict is found against a Long Island Bankruptcy attorney.  Mizuno v Fischoff & Assoc. ;2010 NY Slip Op 50064(U) Decided on January 14, 2010 Supreme Court, Suffolk County ;Whelan, J.  demonstrates how plaintiff lost his house when the case could have been saved.  Supreme Court, Suffolk County entered a judgment for plaintiff in a substantial amount.
 

"Can a homeowner who loses his home to foreclosure, after filing four separate bankruptcy petitions, prevail on a legal malpractice claim against his bankruptcy attorney and recoup the remaining equity in the home as damages? This Court not only finds the claim to viable but, based upon this record, holds that a substantial award of damages is appropriate. "

"In order to prevail in an action to recover damages 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, resulting in actual damages to the plaintiff, and that "but for" the attorney's negligence, the plaintiff would have succeeded on the merits in the underlying action or not have sustained any damages (Dupree v Voorhees, _ AD3d _ , 2009 WL 4681166 [2d Dept Dec. 8, 2009]; Ali v Fink, 67 AD3d 935, _ NYS2d _ [2d Dept 2009]; Santiago v Fellows, Epstein & Hymowitz, P.C., 66 AD3d 758, 886 NYS2d 766 [2d Dept 2009]).

Here, it is obvious, from the testimony of defendant's associate, that the provision in the Conditional Order which held that a default would not be protected by the filing of a new petition, was simply forgotten. The legal advise to commence a new bankruptcy proceeding was contrary to the dictates of the May 1, 2000 order and offered no protection to plaintiff, in response to the foreclosing bank's claim that plaintiff was in default of the Conditional Order. Moreover, the defendant's law office just assumed that plaintiff had not complied with the Conditional Order and accepted the representations made by the foreclosing bank's attorney."
 

"With regard to the element of causation, plaintiff has to show that he would not have incurred any damages but for the attorney's negligence. Defendant attempted to show that plaintiff did not have the ability to pay the monthly mortgage payments and offered plaintiff's tax returns for the 1998 (Def. Ex. P), 1999 (Def. Ex. Q), 2000 (Def. Ex. L), 2001 (Def. Ex. M), and 2002 (Def. Ex. O) as evidence of plaintiff's inability to pay. Plaintiff offered bank account statements from December 2001 to April 2002 (Pl. Ex. 8) to demonstrate the ability to pay the monthly payments. Plaintiff also testified that for the year, 2002, the month of July was the only [*6]month that he would have had difficulty making the required payments.

In deciding the issue of causation, the Court need not speculate as to the financial ability of the plaintiff to pay into the future. The sole issue to be determined is whether "but for" the negligence of the defendant, plaintiff would not have lost his home to foreclosure. Here, plaintiff satisfied his burden by the submission of evidence that he could comply with the Conditional Order during the time frame in question, that is, satisfaction of the November 15, 2001 payment by January 15, 2002 and each monthly payment thereafter up to the foreclosure sale date of April 4, 2002. Such evidence satisfied plaintiff's obligation to establish causation.

Having found for the plaintiff on the issue of liability, the Court must address the issue of damages. The object of awarding damages in a legal malpractice action is "to make the injured client whole" (Campagnola v Mulholland Minion & Roe, 76 NY2d 38, 42, 556 NYS2d 239 [1990]). Compensatory damages are generally awarded where a plaintiff can demonstrate that he or she suffered any actual damages (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 31 AD3d 418, 818 NYS2d 153 [2d Dept 2006]). "

Plaintiff sues law firm for legal malpractice.  Case rests on representation in a commercial real estate lease.  There was a four year period in which the landlord was building the premises, and the question of in what year  a tax escalation clause starts led to this legal malpractice case. 

Global Bus. Inst. v Rivkin Radler, LLP 01/13/2010 Other Courts 2010 NYSlipOp 30062(U)  follows a familiar path in which the court makes factual determinations, as a matter of law even when the parties have not moved for summary judgment.

Several years ago, the matter was transferred to Civil Court pursuant to CPLR 321(d).  Now plaintiff seeks to increase the ad damnum clause and restore to Supreme Court.  They fail, because the court scrutinizes the evidence and determines [via summary judgment or something like it] that it was the client and not the law firm who negotiated the tax escalation clause themselves.

Judiciary Law  487 is suddenly all the rage.  Ironic, as it may be the oldest statute in Anglo-American jurisprudence, coming only years after the Magna Carta.  We see references to  Marbury v. Madison once in a while, but this statute is  perhaps 500 years older.

Here, in Cinao v. Reers, Index no.  12274/04 , Supreme Court, Kings County, we see a discussion of whether a case must be pending in a New York Court for Judiciary Law 487 to apply.

There is scant judicial opinion on this issue.  Justice Battaglia discusses his take on whether a case in Hawaii, with a NY plaintiff and a NY attorney might fall under Judiciary Law 487.

"Based as it is on a line of judicial decisions, beginning with the Second Circuit's decision in Schertenleib v. Traum (589 F2d 1156 [2d Cir 1978]), Defendant's most serious objection to Plaintiff's motion is that Judiciary Law §487 applies only to misconduct by attorneys in connection with proceedings pending in New York courts. As stated by the Second Circuit:

"[S]ection 487…is…intended to regulate, through criminal and civil sanctions, the conduct of litigation before the New York courts. We doubt it was the purpose of the New York legislature to fasten on its attorneys criminal liability and punitive damages for acts occurring outside the state. It seems more likely that the concern is for the integrity of the truth-seeking processes of the New York courts, not for injury to foreign litigants." (Id. at 1166.)

No authority or other source is cited by the court for its understanding of the New York Legislature's intent as to the scope of Judiciary Law §487. Schertenleib was relied upon by a federal district court in dismissing a §487 claim based upon a restraining order obtained from a federal district court in Florida, stating that "Section 487 only applies to conduct within the borders of New York State" (see Papworth v. Steel Hector & Davis, 2007 US Dist LEXIS 72864, * 33 [NDNY 2007]; see also Nardella v. Braff, 621 F Supp 1170, 1172 [SDNY 1985].) The subsequent decisions by federal courts have not added to Schertenleib's rationale.

Schertenleib has been relied upon in one New York state court decision. Civil Court held in Southern Blvd. Sound v. Felix Storch Inc. (165 Misc 2d 341 [Civ Ct, NY County 1995], mod. on other grounds 167 Misc 2d 731 [App Term, 1st Dept 1996]) that "Judiciary Law §487 (1) does not apply to acts committed in courts of States other than the State of New York" (see id. at 344), offering the following rationale:

"If the Legislature wanted to regulate the behavior of New York State attorneys in courts other than those of our State, it would have had to have been more specific or have stated 'any court' in Judiciary Law §487 (1). The use of the term 'the court' means a court of the State of New York." (Id.)

Civil Court's reading may be even narrower that the Second Circuit's if understood as precluding applicability of the statute to deceit on a federal court sitting in New York. In any event, this Court respectfully disagrees if either court would refuse to apply the statute here for the sole reason that the allegations relate to proceedings pending in a Hawaii court and not a court sitting in New York.

The statute itself states no such limitation. "The statutory text is the clearest indicator of legislative intent." (Maraia v. Orange Regional Med. Ctr., 63 AD3d 1113, 1116 [2d Dept 2009] [internal quotation marks and citations omitted].) "[A] court cannot amend a statute by inserting words that are not there, nor will a court read into a statute a provision which the Legislature did not see fit to enact." (Matter of Charles S., 60 AD3d 954, 955 [2d Dept 2009] [internal quotation marks and citations omitted].)

"[T]he statute's evident intent [is] to enforce an attorney's special obligation to protect the integrity of the courts and foster their truth-seeking function" (see Amalfitano v. Rosenberg, 12 NY3d at 14), with a related "concern for curbing and providing redress for attorney overreaching vis-a-vis clients" (see Liddle & Robinson v. Shoemaker, 276 AD2d 335, 336 [1st Dept 2000].) The first New York statute on the subject, adopted in 1787, provided redress for attorney deceit or collusion "in any court of justice." (See Amalfitano v. Rosenberg, 12 NY3d at 12 [quoting L 1787, ch 36, §5] [emphasis added].)

Generally, Judiciary Law §487 "applies only to wrongful conduct by an attorney in an action that is actually pending." (See Mahler v. Campagna, 60 AD2d 1009, 1012 [2d Dept 2009].) "Where the deception is directed against a court, a pending judicial proceeding is not required; it is sufficient if the deception relates to a prior judicial proceeding or one which may be commenced in the future." (Singer v. Whitman & Ransom, 82 AD2d 862, 863 [2d Dept 1981]; see also Costalas v. Amalfitano, 305 AD2d 202, 204 [1st Dept 2003]; Hansen v. Caffry, 280 AD2d 704, 705 [3d Dept 2001].) "Deception of a court is not confined to the actual appearance in court but has reference to any statement, oral or written, made with regard to a proceeding brought or to be brought therein and communicated to the court with intent to deceive." (Fields v. Turner, 1 Misc 2d 679, 681 [Sup Ct, NY County 1955]; see also Amalfitano v. Rosenberg, 533 F3d 117, 123 [2d Cir 2008].)

The limitation, in the case of deceit of a party, to a pending proceeding was first articulated by the Court of Appeals more than a century ago in Loof v. Lawton (97 NY 478 [1884].) "The 'party' referred to is clearly a party to an action pending in a court in reference to which the deceit is practiced, and not a person outside, not connected with the same at the time or with the court." (Id. at 482.) "In placing a construction upon the section cited," a predecessor to Judiciary Law §487, "we should consider its provisions in connection with others which relate to the same general subject, and in view of the object to be attained." (Id. at 481-82.)

With respect to Supreme Court's ruling in Southern Blvd. Sound (165 Misc 3d 341), there is nothing in Judiciary Law §487 that would limit its applicability to deceit practiced on a court sitting in New York, and a limitation cannot be fairly implied from the use of the definite article "the," rather than the indefinite article "a." Section 487 appears as part of Article 15 of the Judiciary Law, "Attorneys and Counselors," with statutory provisions governing the admission and supervision of attorneys. The "integrity of the courts and…their truth-seeking function" (see Amalfitano v. Rosenberg, 12 NY3d at 14) is no less worthy of protection because the court sits in a sister state, and, in any event, the statutory purpose extends to "curbing and providing redress for attorney overreaching vis-a-vis clients" (see Liddle & Robinson v. Shomaker, 276 AD2d at 336.)

This Court is not bound by the federal court decisions in Schertenlieb and its progeny, nor is it bound by Supreme Court's and Appellate Term's decision in Southern Blvd. Sound. (See Cox v. Microsoft Corp., 290 AD2d 206, 207 [1st Dept 2002]; People v. Gundarev, 2009 NY Slip Op 51972 [U], * 1-* 2 [Crim Ct, Kings County 2009]; King Transp. Servs. v. State, 185 Misc 2d 684, 687 [Ct Cl 2000].) Nonetheless, a court should be reluctant to divert from an accepted view of the law, particularly where interpretation of a statute is at issue. Here, however, only the Schertenleib and Southern Blvd. Sound courts offered any reasoning to support the implied limitation on the applicability of Judiciary Law §487, and neither cited any authority or other support for its reading of the statute.

In light of the statutory language and purposes, this Court sees no basis for limiting the applicability of Judiciary Law §487 to judicial proceedings pending in New York courts. A New York court has sufficient interest in supervising the conduct of attorneys admitted before its bar, and protecting resident clients who have been harmed by the deceit of an admitted attorney, to apply Judiciary Law §487 to the attorney's conduct no matter where the action is pending."

Attorney fees and legal malpractice should have nothing to do with each other.  However, the general rule is that no legal fees may be awarded in the face of legal malpractice and its corollary is that if legal fees are awarded by a court or tribunal, then there could have been no legal malpractice, whether the issue is briefed or not.

Here is another example: Liberty Assoc. v Etkin ; 2010 NY Slip Op 00225 ; Decided on January 12, 2010 ;Appellate Division, Second Department :
 

"In January 2003 the Ravin Firm commenced an action against Liberty Associates in the Superior Court of New Jersey to recover fees for the legal services rendered. In 2004, during the pendency of the instant action, Liberty Associates and the Ravin Firm settled the New Jersey fee dispute action (hereinafter the fee dispute action), which was dismissed with prejudice. Upon learning of the settlement, Etkin moved for summary judgment dismissing the complaint in the instant action. The Supreme Court granted the defendant's motion. We affirm. ""This action to recover damages for legal malpractice against Etkin, as a member of the Ravin Firm, arises out of the same series of transactions as the fee dispute action asserted by the Ravin Firm against the plaintiff herein for legal fees. Upon resolution of the fee dispute action, the parties, by their attorneys, executed a stipulation of dismissal with prejudice and without costs. A stipulation of discontinuance with prejudice without reservation of right or limitation of the claims disposed of is entitled to preclusive effect under the doctrine of res judicata (see Matter of Hofmann, 287 AD2d 119, 123 ["An order of discontinuance effecting settlement on the merits is accorded the same res judicata effect as the entry of judgment on the merits"]; see also Fifty CPW Tenants Corp. v Epstein, 16 AD3d at 294).

Here, Etkin established, prima facie, that the legal services at issue in the instant action and in the fee dispute action were the same and, thus, that Liberty Associates' settlement of the fee dispute action with the Ravin Firm, of which Etkin was a member, precludes Liberty Associates from maintaining the instant action against Etkin under the doctrine of res judicata (see Izko Sportswear Co, Inc. v Flaum, 25 AD3d 534, 537)."

 

It should be fairly easy to determine when the statute of limitations ends, no?  In legal malpractice, one must commence an action within three years of when the cause of action accrues, unless there continues to be "continuous representation."  When does the cause of action accrue?  This question remains thorny, and not always easily resolved.  Here, as an example is 730 J & J, LLC v Polizzotto & Polizzotto, Esqs. ;2010 NY Slip Op 00244 ;Decided on January 12, 2010 ;Appellate Division, Second Department  found that the statute had not expired some 6 years after the "error" and at least 5 years after another specified date that defendants argued was the start:
 

"Summary judgment based on the defense of the statute of limitations requires that a defendant make a prima facie showing that an action to recover damages for legal malpractice was filed more than three years after the cause of action accrued (see CPLR 214[6]; Rachlin v LaRossa, Mitchell & Ross, 8 AD3d 461), when "all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court" (McCoy v Feinman, 99 NY2d 295, 301 [internal quotation marks omitted]). An action to recover damages for legal malpractice is deemed to accrue on the date the [*2]malpractice was committed, not when it was discovered (see Shumsky v Eisenstein, 96 NY2d 164, 166).

Under the doctrine of "continuous representation," the three-year statue of limitations for legal malpractice is tolled while the attorney continues to represent the client in the same matter in which the malpractice allegedly occurred, after the alleged malpractice is committed (Shumsky v Eisenstein, 96 NY2d at 168). The parties must have a "mutual understanding" that further representation is needed with respect to the matter underlying the malpractice claim (McCoy v Feinman, 99 NY2d at 306).

Here, the defendant failed to establish its prima facie entitlement to summary judgment dismissing the legal malpractice cause of action by demonstrating that the statute of limitations expired (see generally Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853). Accordingly, the Supreme Court properly denied that branch of the defendant's motion which was for summary judgment dismissing the complaint as time-barred without prejudice to renewal after completion of discovery.

Plaintiff starts a case on their own, and then when they get near trial, hire the defendant attorneys to represent them in an action for personal injury to their child either at school, or due to the alleged negligence of the School district.  The attorneys take over, and are said to agree that they can provide a doctor/expert and obtain all the necessary medical records to try the case.

Defendants take the case off the trial calendar, work/fool around with it for a few months, then "Plaintiffs were given one year to restore the case to the calendar but failed to timely comply, and defendant subsequently refunded plaintiffs' retainer and terminated the representation. Six months after their time to do so had expired, plaintiffs moved, pro se, to restore the case to the calendar. Supreme Court (Meddaugh, J.) denied the motion and dismissed the case with prejudice retroactive to June 14, 2005, finding that plaintiffs "set forth no meritorious claim [and] no reasonable excuse for their failure to restore the case to the calendar within [one] year of the case being struck." Plaintiffs' subsequent pro se submission, attaching affidavits, letters and reports from plaintiffs' medical providers was deemed a motion to renew/reargue. In denying that motion, the court noted that the papers submitted with that application "were couched in only the most conclusory terms and failed to establish any causal connection between any allegedly improper conduct by [the school district] and the [infant's] medical conditions."
 

Plaintiffs sue for legal malpractice and defendants move to dismiss the complaint.  The Court's decision reads: "Defendant's attempt to invoke collateral estoppel is unavailing. Plaintiffs' motion to restore their case against the school district to the calendar required a showing of merit sufficient to establish a triable issue of fact (see Alise v Colapietro, 119 AD2d 921, 922 [1986]) and conclusory allegations are inadequate in that setting (see Fountain v Village of Canastota, 219 AD2d 781, 782 [1995]). In contrast, on defendant's motion to dismiss, plaintiffs' allegations, including conclusory allegations in supporting affidavits, are deemed to be true (see Berry v Ambulance Serv. of Fulton County, Inc., 39 AD3d 1123, 1124 [2007]). Defendant, therefore, failed to carry his burden to establish an identity of issues between the two actions and is not entitled to invoke the doctrine of collateral estoppel (see Cary v Fisher, 149 AD2d 890, 891 [1989]).

On the record before us, plaintiffs have stated a cause of action for legal malpractice. "'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'" (Leder v Spiegel, 9 NY3d 836, 837 [2007], cert denied Spiegel v Rowland, ___ US ___, ___, 128 S Ct 1696 [2008], quoting AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007] [internal citation omitted]). Although plaintiffs' evidence may be insufficient to withstand a motion for summary judgment, on an unconverted preanswer motion to dismiss, plaintiffs' allegations are accepted as true and are entitled to the benefit of every reasonable inference (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]; Rovello v Orofino Realty Co., 40 NY2d 633, 634 [1976]).

How does one prove legal malpractice, and what documents are necessary to support a successful legal malpractice case?  A colliery to that question is how do you get those documents, and when is a request too broad, and when does a demand go to far?  An illustration of a request which went too far is found in Aaron v Pattison, Sampson, Ginsberg & Griffin, P.C. ;2010 NY Slip Op 00342 ;Decided on January 14, 2010 ;Appellate Division, Third Department .
 

Aaron asked for: "documents showing Katzman's time entries and billings related to other client matters; documents showing Katzman's employment contracts, partnership agreements and income; evidence of loans to Katzman by PSGG; evidence of any malpractice suits against Katzman; claims against Katzman made to the Committee on Professional Standards; documents showing Katzman's absences from work, including vacation, personal and sick time; and documents pertaining to Katzman's reviews, disciplinary actions, internal grievances, demotions and promotions. "

Instead of getting such documents, he ended up paying attorney fees to the other side.  "As Aaron has failed to demonstrate that these materials are in any way material and necessary to proving a claim of legal malpractice (see AmBase Corp. v Davis Polk & Wardwell, [*3]8 NY3d 428, 434 [2007]) or to defending against PSGG's claims for counsel fees, the motion to compel must be denied (see CPLR 3101 [a]). Furthermore, under the same rationale, we find that Supreme Court did not abuse its discretion in granting the protective order (see CPLR 3103 [a]). Nor do we find an abuse of discretion in the award of counsel fees and costs on the motion (see 22 NYCRR 130-1.1 [a]). As set forth in the court's amended order, Aaron's motion to compel the production of the patently immaterial and unnecessary information detailed above was nothing more than a "fishing expedition" made for the "illegitimate purpose" of "uncovering facts supporting insufficient, conclusory allegations."

in Lyons v Cronin & Byczek, LLP 01/06/2010 2010 NYSlipOp 30006(U Plaintiff started an employment discrimination case against the LIRR and while it was pending, filed a petition in Bankruptcy.  How this fact was not known to his attorneys, or the LIRR is not explained, but he settled the case and accepted the proceeds.  Later, after being discharged in Bankruptcy.

He was dissatisfied with the settlement, and retained the target attorneys to sue his former attorneys.  In this round it was established that he had filed bankruptcy during the pendency of the underlying case, and the rule is that he lost rights to that case at the moment that the petition was filed.  It belonged to the debtor's estate, to be administered by the Chapter 7 trustee.

So, case dismissed.  Now he sues his own attorneys, saying that they should have known.  If they knew, they also should have known that he could move to reopen the bankruptcy, amend the petition and schedules, have the trustee cede the cause of action back to him, and refile under CPLR 205. They didn't, and this forms the basis of his second legal malpractice action.

Currently, motion for summary judgment by the target attorney was dismissed.

It's popularly thought that legal malpractice is all about the mistakes made by an attorney.  While that is the first elements of legal malpractice, there are far harder hurdles to jump in a successful case.  Mistakes, or problems in the way a case was handled are not that difficult to fine, attorneys being human, and the natural law of imperfection still remains in effect.

A successful legal malpractice case requires departure, proximate connection with some financial loss, ascertainable collectible  damages and proof that the attorney's mistake was the real ["but for"] reason for the financial loss.  In Route 9A Realty Corp. v. Vincent A. DeIorio Law Firm, 015931/06;Decided: January 6, 2010; Justice Ute Wolff Lally  we see defendants showing how the last three elements often decide how a case ends.

"According to the complaint, "[d]uring the period 1998 through 2002, on at least two occasions, defaults occurred on the payments due pursuant to the tax installment agreement." Further, "[o]n or about July 31, 2002 the Town commenced a tax foreclosure proceeding against numerous property owners, including Route 9A which allegedly owed taxes in the amount of $105,905.75.The last day to redeem the property was November 7, 2002.On or about August 8, 2002 the plaintiff retained the defendants attorneys (the Firm) as counsel for the plaintiff in the Tax Foreclosure Action.

It is alleged that from the time the Firm was retained until the November 7, 2002 redemption date, the Firm did not advise the plaintiff that if the taxes were not paid by the redemption date, it would lose all right, title and interest in the Property.

The complaint also alleges as follows: the firm breached its duty of care to the plaintiff by failing to research and correctly interpret provisions of the Real Property Tax Law; by failing to perfect an appeal; and by failing to ensure that plaintiff would be able to recover and develop the Property. Moreover, the plaintiff alleges it "had the financial wherewithal to obtain the necessary monies to satisfy the outstanding taxes." However, in December 2005 a judgment of foreclosure was entered as a result of which the plaintiff lost its right, title and interest in the Property and its right to develop the Property.

In opposition to the motion for summary judgment the plaintiff contends that from February 7, 2002, to December 5, 2004, defendants led plaintiff to believe the property would not be lost even if a foreclosure occurred, but rather could be recovered at auction. In support of this assertion, plaintiff refers to the deposition of Bernard Deutsch. However, the one page of the Deutsch transcript, a copy of which is annexed to the Notice of Cross Motion does not support plaintiff attorney's claim. Nor does Exhibit 18 support plaintiff's attorneys' claim that "defendants insisted that plaintiff could buy back the property, pay the taxes, receive the proceeds from the sale over and above the taxes." In further opposition to defendants' motion for summary judgment the plaintiff submitted a 10-page affidavit by David C. Wilkes, a purported expert on real property tax matters. Plaintiff's expert opines that "[i]n my opinion, an ordinary attorney with reasonable skill and ability, after having read the installment agreement, would have advised plaintiff the only manner in which to retain the property was to pay the taxes. Without such payment, the Town was entitled to awny [sic] entry of judgment as of the redemption date of November 7, 2009. However, it is clear from the testimony of defendant Patrick V. Deiorio, he advised the plaintiff that if the taxes were not paid by the redemption date the plaintiff would risk losing the property. Plaintiff has failed to present any documentary evidence to support the conclusory allegations that the plaintiff had sufficient resources to pay the taxes as of the redemption date. Plaintiff does not refute defendants' assertion that as of the redemption date, the plaintiff owed debts in excess of $1.2 million. Nor does plaintiff establish its ability to pay the taxes, its access to funds, its ability to borrow such funds or its desire to borrow said funds."

For those with any knowledge of the history of the statute of limitations in legal malpractice, there was once a time in which a three year s/l for tort and a six year s/l for contract existed.  Under the Court of Appeals in Santulli it was permissible.  In response the Legislature passed CPLR 214-6:

" an action to recover damages for malpractice, other than medical, dental or podiatric malpractice, regardless of whether the underlying theory is based in contract or tort; "

Now, however, we see a quasi-legal malpractice cause of action with a 6 year s/l:  disgorgement of excessive fees.  In Loria v Cerniglia ;  2010 NY Slip Op 00112 ;  Decided on January 5, 2010
Appellate Division, Second Department  the court reversed and remanded to Supreme Court for trial on the issue of excessive fees even when it decided that the s/l for legal malpractice had passed.
 

"The Supreme Court properly granted that branch of the defendant's motion which was to dismiss the first cause of action, alleging legal malpractice, as time-barred. The action was commenced on August 14, 2008, and the three-year statute of limitations (see CPLR 214[6]) began to run on August 12, 2005, when the plaintiff signed a consent to change attorney form, relieving the defendant as counsel in the underlying action (see Frost Line Refrig., Inc. v Gastwirth, Mirsky & Stein, LLP, 25 AD3d 532, 532-533; Sommers v Cohen, 14 AD3d 691, 692; Marro v Handwerker, Marchelos & Gayner, 1 AD3d 488, 488; Daniels v Lebit, 299 AD2d 310, 310).

However, the second cause of action, alleging that the defendant charged an excessive fee, was not duplicative of the first cause of action, and should not have been dismissed (see Boglia v Greenberg, 63 AD3d 973, 976). "

For those with any knowledge of the history of the statute of limitations in legal malpractice, there was once a time in which a three year s/l for tort and a six year s/l for contract existed.  Under the Court of Appeals in Santulli it was permissible.  In response the Legislature passed CPLR 214-6:

" an action to recover damages for malpractice, other than medical, dental or podiatric malpractice, regardless of whether the underlying theory is based in contract or tort; "

Now, however, we see a quasi-legal malpractice cause of action with a 6 year s/l:  disgorgement of excessive fees.  In Loria v Cerniglia ;  2010 NY Slip Op 00112 ;  Decided on January 5, 2010
Appellate Division, Second Department  the court reversed and remanded to Supreme Court for trial on the issue of excessive fees even when it decided that the s/l for legal malpractice had passed.
 

"The Supreme Court properly granted that branch of the defendant's motion which was to dismiss the first cause of action, alleging legal malpractice, as time-barred. The action was commenced on August 14, 2008, and the three-year statute of limitations (see CPLR 214[6]) began to run on August 12, 2005, when the plaintiff signed a consent to change attorney form, relieving the defendant as counsel in the underlying action (see Frost Line Refrig., Inc. v Gastwirth, Mirsky & Stein, LLP, 25 AD3d 532, 532-533; Sommers v Cohen, 14 AD3d 691, 692; Marro v Handwerker, Marchelos & Gayner, 1 AD3d 488, 488; Daniels v Lebit, 299 AD2d 310, 310).

However, the second cause of action, alleging that the defendant charged an excessive fee, was not duplicative of the first cause of action, and should not have been dismissed (see Boglia v Greenberg, 63 AD3d 973, 976). "

In Denenberg v Rosen ;2010 NY Slip Op 00081 ;Decided on January 7, 2010 ;Appellate Division, ;First Department ; Moskowitz, J. the question of when the relationship begins between client and attorney is discussed.  Plaintiff, who was a knowledgeable investor, as a commodities trader, formed a retirement account that was ultimately disallowed by the IRS.  He incurred big losses.
At the time he formed the tax shelter, his accountants used the name of a law firm to highlight the deal.  Bryan Cave had issued an opinion letter, but in this case it was to be narrowly construed.

"The marketing materials included an opinion letter that Smith and Bryan Cave had issued, on September 10, 1999, to Hartstein/ECI expressing that the Pendulum Plan was legal. The opinion letter contained the caveat that it was solely for ECI:

"This opinion is solely for the information of ECI Pension Services, LLC and its professional advisors. We have not considered whether adoption of the Plan would be appropriate for any particular employer. ..."

Privity is the relationship between client and attorney.  At the strongest, there is a contractual relationship, undisputed, between them.  At the far reaches, on some occasions, an opinion letter upon which a person might reasonably rely has been sufficient.

Here, it was not enough. "The motion court should have dismissed the legal malpractice claims against Bryan Cave and Smith because no attorney-client relationship existed in 2002. The motion court was correct that the tax opinion letter was insufficient to support an attorney- client relationship, considering the letter stated it was for ECI solely and contained disclaimers cautioning readers to procure tax advice tailored to their specific plan. The motion court was also correct that the limited power of attorney was insufficient to show an attorney-client relationship as that document could also have [*7]authorized nonattorneys to act on behalf of plaintiff. The limited power of attorney only authorized Bryan Cave to represent "Robert A. Dennenberg, a Sole Proprietorship Defined Benefit Pension Plan" before the IRS and only for "Form 5307," which was the application submitted to the IRS for it to determine whether to approve the Plan. Plaintiff does not contend that Bryan Cave was negligent in submitting the Form 5307.

However, the motion court improperly relied on plaintiff's entirely conclusory allegations that plaintiff retained the services of Bryan Cave in 2001 to support the legal malpractice claim. Plaintiff points to no communications with Bryan Cave for legal advice about implementation of the Plan. Plaintiff offers no objective facts or actions to show the existence of an attorney-client relationship or the parties' mutual agreement that Bryan Cave would perform ongoing legal services for plaintiff. "

We have written that legal malpractice cases arise from a large base of underlying matters.  Here is a huge NY case that starts in Austria, travels east to Russia, and then is dismissed in New York.  In this story from the NYLJ by Nate Raymond we see how an Austrian Bank which lost it all in Russia came to New York to sue and lose a legal malpractice case against Chadbourne & Parke.

"A state judge on Friday threw out a $500 million lawsuit by an Austrian bank against Chadbourne & Parke stemming from advice its Moscow office gave the bank about the structure of an investment vehicle whose legality later came under scrutiny.

"Chadbourne in 2004 lost a bid to have the case tried in Russia instead of New York (NYLJ, June 14, 2004). The firm had better success in 2007, when a divided First Department, Appellate Division, panel ruled that the bank had waived its right to attorney client privilege (NYLJ, April 5, 2007).

Creditanstalt, with advice from the Denver-based firm of Holme Roberts & Owen, in 1996 acquired the assets of a Russian company engaged in securities brokerage activities. The bank then allegedly turned to Holme Roberts for advice on a legal structure that would allow its clients to invest in Russian securities. Those securities included Gazprom, the Russian natural gas giant.

Holme Roberts closed its Moscow office in 1998 as its team there joined Chadbourne, which took over the Creditanstalt relationship. The bank said Chadbourne provided a legal opinion on the structure's legality, specifically with regards to a decree by President Boris Yeltsin in 1997 limiting the extent foreign entities could invest in Gazprom. It also issued a risk assessment letter in 1998 advising on the legality of the structure.

Creditanstalt claimed Chadbourne later realized its advice was faulty but failed to tell the bank. It also claimed Chadbourne failed to warn about any potential repercussions. Chadbourne disputed that its advice was wrong and claimed it warned the bank of tax and political consequences of the structures."
 

We've discussed the oft-found fact situation of how a fee determination by a bankruptcy court may block a later legal malpractice action.  In Breslin Realty Dev. Corp. v Shaw ;  2010 NY Slip Op 00087 Decided on January 5, 2010; Appellate Division, Second Department; Chambers, J., J.  the court writes persuasively about the concept:
 

"In bankruptcy proceedings, the general rule arising under 11 USC § 330(a)(4) is that "a finding of malpractice would mean that the attorneys were not entitled to compensation for those services found to be substandard" and, accordingly, failure to raise the malpractice claims when the final fee applications were considered and approved by the Bankruptcy Court barred later litigation of such claims under principles of res judicata (In re Iannochino, 242 F3d 36, 42; see Grausz v Englander, 321 F3d 467; Osherow v Ernst & Young [In re Intelogic Trace], 200 F3d 382; cf. Clement v Brumfield, 2004 Cal. App. Unpub. LEXIS 1031, citing Matter of Boddy, 950 F2d 334). Res judicata bars future litigation between the same parties or those in privity arising out of transactions giving rise to a cause of action which could have been raised in a prior bankruptcy proceeding (see Truesdell v Donaldson, Lufkin & Jenrette Sec. Corp., 281 AD2d 334; Evergreen Bank v Dashnaw, 246 AD2d 814). An exception lies if the plaintiff was deceived in the prior action or proceeding (see Izko Sportwear Co. Inc., v Flaum, 25 AD3d 534; Penthouse Media Group v Pachulski Stang Ziehl & Jones [US Dist Ct, SD NY, 9 Civ 85, Scheindlin, J., 2009]).

Applying these principles, we conclude that the final award of fees in the bankruptcy proceeding bars the plaintiffs' malpractice claim based upon the same services in the present litigation. The final fee award in the bankruptcy proceeding was a determination on the merits, barring the legal action sounding in legal malpractice pursuant to the doctrine of res judicata (see Izko Sportwear Co. Inc. v Flaum, 25 AD3d 534).

Further, we are unpersuaded that there is evidence in this case that the defendants deceived the debtors or the Bankruptcy Court. The June 2003 agreement demonstrates that the plaintiffs were aware of the factual basis of their malpractice claim at the time of the defendants' fee application. Moreover, the June 2003 agreement was drafted at least in part by separate and independent counsel—the Dollinger law firm. Thus, on the date that the Bankcuptcy Court entered the defendants' final award, December 15, 2003, the debtors had ample opportunity to raise their malpractice claims as objections to the fee award. Accordingly, we conclude that the plaintiffs failed to meet their burden of demonstrating under the doctrine of collateral estoppel that they lacked a full and fair opportunity to litigate the legal malpractice claim in the Bankruptcy Court (see Izko Sportswear Co. Inc. v Flaum, 25 AD3d 534; cf. Penthouse Media Group v Pachulski Stang Ziehl & Jones [US Dist Ct, SD NY, 9 Civ 85, Scheindlin, J., 2009]). "

Criminal defendants have a well known and exacting path.  Arrest, Indictment, Trial, Appeal, CPL 440 Motion (or its federal equivalent) habeas proceedings, and finally, they often turn to a legal malpractice action.  In New York there is a strict prohibition against suing ones criminal defense attorney.  Its sort of a quasi-immune situation.  "New York law also demands that, in order to "open the door for even a colorable claim of innocence, criminal defendants must free themselves of the conviction, for the conviction precludes those potential plaintiffs from asserting innocence in a civil suit." Britt v. Legal Aid Soc., Inc., 95 N.Y.2d 443, 447, 741 N.E.2d 109, 718 N.Y.S.2d 264 (N.Y. 2000)." 

So, in Sash, v. Schwartz,No. 07-1249-pr;UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT;2009 U.S. App. LEXIS 27421; December 16, 2009 we see plaintiff lose in summary judgment.  "As Appellant's brief does not raise the issue of whether he established diversity jurisdiction, that argument is waived on appeal. See LoSacco v. City of Middletown, 71 F.3d 88, 92-93 (2d Cir. 1995) (holding that, where a litigant, including one proceeding pro se, raises an issue before the district court but does not raise it on appeal, it is abandoned).

In any case, the district court properly granted summary judgment to Appellee. [*2] We review orders granting summary judgment de novo and focus on whether the district court properly concluded that there was no genuine issue as to any material fact and the moving party was entitled to judgment as a matter of law. See Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292, 300 (2d Cir. 2003). Under New York law, in order to state a cause of action for legal malpractice arising from negligent representation in a criminal proceeding, the plaintiff "must allege his innocence or a colorable claim of innocence of the underlying offense . . . for so long as the determination of his guilt of that offense remains undisturbed, no cause of action will lie." Carmel v. Lunney, 70 N.Y.2d 169, 173, 511 N.E.2d 1126, 518 N.Y.S.2d 605 (N.Y. 1987). "

Continuing the trend towards a combination of bankruptcy and legal malpractice, we note that bankruptcy follows, and rarely precedes legal malpractice situations, hence, we expect a swell of the intersection following the financial down-trends of the past year.  Here, Tabner v Drake
2009 NY Slip Op 10006; Decided on December 31, 2009 ; Appellate Division, Third Department is an example of how settlement of an underlying case is handled in Bankruptcy Court, even when the attorneys seeking their fee have nothing to do with the bankruptcy.  Apparently, individual Drake had carved out a portion of the settlement that was then taken away from him by the Bankruptcy Court, and as a result he would not sign a stipulation and release so that the law firm which had produced the settlement sums might get paid.
 

"In 1998, plaintiffs commenced an action to recover legal fees for services allegedly rendered to defendant Ralph H. Drake Jr.'s residential and commercial real estate business — defendant RHD Construction Corporation. In response, Drake and RHD asserted negligence and malpractice counterclaims against plaintiffs. Multiple pretrial proceedings ensued (see e.g. Tabner v Drake, 9 AD3d 606 [2004]) and, in 2001, Drake filed for bankruptcy under chapter 7 of the Bankruptcy Code.

Shortly after the start of trial, the parties entered into a stipulation of settlement in open court which, among other things, contemplated the exchange of general releases from the parties with respect to all aspects of the litigation. The parties acknowledged that the Bankruptcy Court's approval of the settlement was required and, in November 2007, the Bankruptcy Court issued an order approving the settlement and authorizing the bankruptcy estate's trustee to execute general releases in accordance therewith, specifically authorizing the payment of $50,000 to plaintiffs by the trustee. Nevertheless, citing purported inconsistencies between the actual [*2]terms of the settlement and the "Bankruptcy Court approval relative to the amounts to be paid to each defendant," Drake and RHD refused to execute their respective releases. Consequently, plaintiffs moved in Supreme Court for an order directing that defendants execute the releases called for within the agreement and enforcing the stipulation of settlement. Supreme Court granted the motion, prompting this appeal. "

"Accordingly, although the parties agreed to a total settlement of $350,000, with $50,000 going to plaintiffs, $295,000 to RHD and $5,000 to Drake, the Bankruptcy Court properly observed that the bankruptcy estate was the "legal and equitable owner of the litigation whether through [Drake] directly or as the sole shareholder of RHD" (see 11 USC § 541). Its resultant order — that $50,000 be tendered to plaintiffs and $300,000 be tendered to the bankruptcy trustee — thus adequately reflects the terms and conditions of the settlement. In view of the foregoing, we find no reason to disturb Supreme Court's order."

Plaintiff suffers a construction accident, and his attorneys wait too long to bring the action.  He had a Labor Law 200.240, 241 and other claims, typical in a gravity-fall construction case.  His attorney admit that they waited too long to commence the action, but was successful in dismissal of the Labor la 200 and 240 causes of action.  Then, after an appeal, plaintiff moved for partial summary judgment on Labor Law 241,  In Long v. Cello & Barnes, 2009 NY Slip Op 09790 ; Decided on December 30, 2009 ; Appellate Division, Fourth Department we see
 

"Plaintiff commenced this legal malpractice action seeking, inter alia, damages resulting from the conceded negligence of defendants in representing him in the underlying action by failing to commence the action against the proper parties in a timely manner. Supreme Court erred in denying plaintiff's motion seeking partial summary judgment on the first cause of action against defendants insofar as it is based upon the loss of a viable Labor Law 240 (1) claim in the underlying action. We note that, on a prior appeal, we affirmed an order granting, inter alia, those parts of the cross motion of defendants seeking summary judgment dismissing the second and third causes of action against them (Long v Cellino & Barnes, P.C., 59 AD3d 1062). We agree with plaintiff that he met his burden of establishing that he would have prevailed on the Labor Law § 240 (1) claim in the underlying action but for defendants' negligence (see generally McKenna v Forsyth & Forsyth, 280 AD2d 79, 81, lv denied 96 NY2d 720). In support of his motion, plaintiff established that he was injured by a fall from an elevated work site and that the absence of appropriate safety devices was a proximate cause of his injuries (see Ewing v ADF Constr. Corp., 16 AD3d 1085, 1086). Defendants failed to raise a triable issue of fact in opposition to the motion (see generally Zuckerman v City of New York, 49 NY2d 557, 562). Contrary to defendants' contention, the nondelegable duty imposed upon the owner and general contractor under section 240 (1) " is not met merely by providing safety instructions or by making other safety devices available, but by furnishing, placing and operating such devices so as to give [a worker] proper protection' " (Haystrand v County of Ontario, 207 AD2d 978; see Heath v Soloff Constr., 107 AD2d 507, 512). "
 

In today's NYLJ, Abraham B. Krieger writes a compelling article about "negligent referral ", and gives some history and out of state cases, along with a discussion of NY cases in the area.  To backtrack, Mr. Krieger writes: "Recently, New York's Appellate Divisions in the First, Second and Third departments, and a number of other state courts, implicitly recognized negligent recommendation/referral as a potential cause of action. While New York does not yet expressly recognize "negligent referral" or "negligent recommendation" as a cause of action, such a claim may be supported by applying the tort of negligent misrepresentation. A claim for negligent recommendation/referral may also be supported by the scope of duty voluntarily taken as part of a professional's responsibility under the rules governing professional ethics, conduct and responsibility."

Looking from a slightly different viewpoint, both under the old rules and the new (since April 2009) "Rules of Professional Conduct"   Rule 1.5(g):  "A lawyer shall not divide a fee for legal services with another lawyer who is not associated in the same law firm unless: (1) the division is in proportion to the services performed by each lawyer, or, by a writing given to the client, each lawyer assumes joint responsibility for the representation; (2) The client agrees to employment of the other lawyer after a full disclosure that a division of fees will be made, including the share each lawyer will receive, and the client''s agreement is confirmed in writing and (3) the total fee is not excessive."

Under these rules, there is no more "sub silentio" referral of cases to trial attorneys, or to outside attorneys, or to "specialists."  Hence, the theory of referral malpractice seems to be a relic.  Referral malpractice now appears to be simply another variant of legal malpractice, although in this iteration, referring to multiple attorneys.

In Dischiavi v Calli ;2009 NY Slip Op 09773 ;Decided on December 30, 2009 ;Appellate Division, Fourth Department  we see a discussion of the effects of a bankruptcy filing on a legal malpractice claim.  While the governing principal applies to any cause of action which a plaintiff had when bankruptcy was filed. it seems to come up especially frequently in legal malpractice cases.  Briefly put, any claim at all, whether in suit, or simply in existence, which exists at the time a bankruptcy petition is filed, becomes an asset of the debtor's estate, and thus passes out of the hands of the individual debtor.  The usual scenario is that the debtor obtains a discharge in bankruptcy, then sues an attorney.  Absent some act which allows the debtor to keep the asset [cause of action] it belongs to the estate, and the debtor lacks standing to bring the action.
 

In Dischiavi, the court found it a question of fact whether the debtor [plaintiff] had reason to know of the cause of action at the time of petition filing. "Defendants met their initial burdens in part by establishing that plaintiffs failed to include any of their causes of action against defendants in their schedule of assets for their bankruptcy proceeding, that the causes of action for breach of contract, legal malpractice, breach of fiduciary duty and negligence accrued prior to the commencement of the bankruptcy proceeding, and that plaintiffs obtained a [*2]discharge in bankruptcy (see Wright v Meyers & Spencer, LLP, 46 AD3d 805; Nationwide Assoc., Inc. v Epstein, 24 AD3d 738; see also Whelan v Longo, 23 AD3d 459, affd 7 NY3d 821). Defendants failed, however, to demonstrate that plaintiffs "knew or should have known of" those causes of action against defendants prior to commencing the bankruptcy proceeding (Dynamics Corp. of Am., 69 NY2d at 197; see R. Della Realty Corp. v Block 6222 Constr. Corp., 65 AD3d 1323). Defendants also failed to establish that the fraud cause of action accrued prior to commencement of the bankruptcy proceeding (cf. Wright, 46 AD3d 805). "
 

"The Cobbler's Son had no shoes..." is an ancient way of saying that people attend to the needs of others, including clients, while ignoring the requirements closer to home.  While the decision does not make this analogy, nor does it explicitly hinge the reasoning on the lack of an affidavit of plaintiff, we wonder whether there is some connection in a legal malpractice case which had the lack of an affidavit of plaintiff as a central motif in the underlying action.

In McComsey v. Kera Graubard & Litzman we see the plight of a Manhattan tenant.  She rented an apartment on East 67th Street, and obtained a two year lease, with a renewal clause.  Renewal required a certified or registered letter by a date certain.  Instead, plaintiff left a renewal notice in the spot where she left the rent.  After much litigation in both Supreme Court and in Housing Court, plaintiff lost, and had to pay a hefty legal bill to the landlord's attorneys.

She sued her attorneys.  One central issue was that while she was traveling in Europe a motion for summary judgment was filed, and no affidavit was submitted in opposition.  Her fault or the attorneys?

When the client sued the attorneys, they moved pursuant to CPLR 3211(a)(7)  and submitted affidavits.  But, a motion under CPLR 3211(a)(7) is on the sufficiency of the pleadings, no?  Do you need an affidavit in opposition, as if it were CPLR 3212?

Left unanswered, the court did state: 'Plaintiff opposes Defendant's motion but notably fails to submit an affidavit from Plaintiff and instead relies on counsel's affirmation.  Was the malpractice attorney wrong to respond in this way?

There is a tension between responding strongly to a CPLR 3211(a)(7) motion and going over the edge, "charting a course to summary judgment" and impelling the Court to consider the 3211 motion under 3212 rules. This is a danger, and one not to be lightly discarded as impossible.

Today's NYLJ article by Daniel Wise chronicles the chilling story of an attorney who put his own freedom at risk in order to stymie a former client, and a successor attorney.  Why, and the clumsy method undertaken is the mystery.  in In re: RUBY G. EMANUEL, Debtor.;Chapter 7, Case No. 97-44969 (SMB); UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 Bankr. LEXIS 4024;December 23, 2009

"This matter has its origins in an unfortunate, fatal accident involving the debtor's husband. On December 17, 1992, Mr. Emanuel's employer was performing repairs on a barge in dry dock at the Brooklyn Navy Yard. The task called for the placement of a gangway connecting the barge to the dock. Mr. Emanuel was charged with the responsibility of placing the gangway. While standing on the gangway as it was being hoisted into place, Mr. Emanuel fell 45 feet to the bottom of the dry dock, sustaining massive injuries that rendered him a quadriplegic and ultimately led to his death on August 30, 2004. Emanuel v. Sheridan Transp. Corp., 10 A.D.3d 46, 779 N.Y.S.2d 168, 170-71 (N.Y. App. Div. 2004) ("Emanuel I").

The debtor retained Heller, individually and as administratrix of her husband's estate, to file a wrongful death action. Heller commenced suit against the barge owner, among others, asserting claims under the Jones Act, New York Labor Law and in negligence (the "Action"). Prior to the trial, on July 28, 1997, the debtor filed a voluntary petition [*3] for relief under chapter 7. By Order dated August 10, 1999, the Trustee retained Heller (and Samuel Hirsch) as special personal injury counsel to the Trustee to prosecute the Action." Heller won a multi million dollar verdict

Approximately one month after the Appellate Division reversal, Heller was disbarred. The charges that triggered the disbarment were unrelated to the Emanuel case.. The Appellate Division disagreed. Citing Heller's pattern of misconduct, "utter contempt for the judicial system" and "his consistent, reprehensible, [*5] unprofessional behavior," the court concluded that he should be disbarred rather than suspended:
In light of the cumulative evidence of respondent's 24-year history of sanctions, his perverse and persistent refusal to accept adverse rulings, reflective of an utter contempt for the judicial system, and his consistent, reprehensible, unprofessional behavior, which has included screaming at, threatening and disparaging judges, adversaries and experts, intentionally defying court rulings, and disrupting and thwarting proper legal process through both physical and verbal aggression, we are of the opinion that the appropriate sanction here is disbarment.
Heller failed to purge himself of the contempt, and state Supreme Court Justice Silver issued a warrant for Heller's arrest on February 26, 2007. In re Emanuel, 406 B.R. 634, 635 (Bankr. S.D.N.Y. 2009) ("Emanuel II"). Heller was arrested that same day, and was subsequently sentenced to 30 days in jail and a $ 10,000 fine (the "Sentencing Order").

Deprived of Heller's files, J&M carried on the best it could relying on the Record on Appeal. 5 Eventually, it procured a $ 3.65 million settlement that the Trustee accepted.

Heller's post-disbarment conduct caused prejudice to his former clients. Having lost the case he tried, Heller obstructed J&M's attempts to retry the case he lost. His refusal to turn over the files, in the face of several court orders directing him to do so, was symptomatic of what the Appellate Division described as his "utter contempt for the judicial system, and his consistent, reprehensible, unprofessional behavior, which has included . . . intentionally defying court rulings" in the Heller disbarment order. In re Heller, 780 N.Y.S.2d at 319. Furthermore, although he argued to the Appellate Division, as he does here, that the Record on Appeal included everything that [*25] J&M needed to retry the case, (see J&M Findings, Ex. 25, at 51-53), the Appellate Division concluded that Heller's contemptuous refusal to turn over the files caused "resulting prejudice to plaintiff's right to a new trial."

The rule is pretty clear; one may not sue a criminal defense attorney unless there is a showing of innocence.  Innocence means acquittal or reversal on appeal.  Here, in Peo v. Radcliff is a stunning example of how and why the rule exists.  In this case, defendant was convicted after a bench trial.  The implication is that the attorney told his client that the trial judge gave him "the wink" and that an acquittal was in the offing.  Note the confluence of literature, TV and this trial.

In People v Radcliffe ;2009 NY Slip Op 52593(U) ; Decided on December 18, 2009 ; Supreme Court, Bronx County ; Price, J. , "On July 10, 2003, defendant was convicted after a non-jury trial of criminal possession of a weapon in the second degree (PL 256.03 [2]) and assault in the second degree (PL 120.05 [2]) by Supreme Court Justice Dominic Massaro. Upon that conviction, Justice Massaro entered judgment against this defendant on September 25, 2003, sentencing him to two concurrent determinate terms of imprisonment of fifteen years and seven years, respectively. On November 22, 2005, the Appellate Division, First Department, rejected defendant's challenge to the trial court's suppression rulings and affirmed his conviction. On February 24, 2006, Court of Appeals Judge Victoria Graffeo denied defendant's petition seeking leave to appeal. "

"The People, in opposing defendant's motion, argue that Mr. Feige indeed provided meaningful and effective representation in that he thoroughly cross-examined the People's witnesses at the pre-trial suppression hearing, emphasized weaknesses in the People's case and delivered a persuasive summation. They further argue that defendant's waiver of his right to a jury trial and Mr. Feige's decision to rest on the pre-trial hearing testimony and stipulations as the trial record were not only a reasonable trial strategy, but were tactically justifiable since they were based on Mr. Feige's belief that doing so would achieve a favorable result. The People also correctly note that although the determination of whether counsel provided meaningful and effective representation is not dependent on achieving the desired outcome, here the trial court ultimately acquitted the defendant of the most serious charges, attempted murder in the second degree and assault in the first degree. This, they argue, supports the notion that Mr. Feige's representation was indeed meaningful and effective; that the result was not what the defendant desired, expected or liked is of no moment. This court agrees. "
 

"Since defendant's motion is predicated on Mr. Feige's mea cupla statements, scrutiny is warranted here as well. Generally, mea culpa statements made by trial counsel cannot be taken at face value because counsel may be motivated by either a desire to assist a former client or protect their own reputation (Barclay v Spitzer, 371 F Supp 2d 273, 283 [EDNY 2005]; but cf, e.g., Henry v Poole, 409 F3d 48 [2d Cir 2005]). Moreover, where, as here, an otherwise excellent attorney, who consistently performs in a highly credible manner as a member of the criminal defense bar, unexpectedly and inexplicable pleads ineptitude, skepticism is particularly called for. As such, this court is wary of Mr. Feige's claim that he lays awake at night wrought with guilt for having made "the most stunning and appalling decision" of his career.

This court finds it acutely disturbing that after spewing his mea culpas, Mr. Feige implicitly abdicates responsibility to Justice Massaro for the verdict not being what he anticipated. "Had Justice Massaro not done what he did, I would had [sic] proceeded with a trial, as I had throughout my career and as I always intended to do." Unfortunately, for both Mr. Feige and the defendant, nothing in the record before this court remotely suggests that Justice Massaro assured, promised or guaranteed that he would acquit the defendant. Even Mr. Feige's characterization that Justice Massaro gave him the "wink" is devoid of any factual support. In fact, as noted above, Mr. Feige based his strategic decision on a dubious head-nod and "unmistakable" look, which does not remotely qualify as a promise or guarantee.[FN1] To infer that Justice Massaro somehow made false or misleading representations is intellectually dishonest.

If Mr. Feige is indeed guilty of that which he claims to be, it would perhaps constitute far more than ineffective assistance of counsel. It is patently absurd to believe that an extraordinarily experienced defense attorney with an admittedly inherent distrust for the judiciary would suddenly unravel into a hideously incompetent advocate merely by the way a judge looked at him.[FN2] Of course, it is not for this court to speculative what Mr. Feige thought, believed or intended when concluding that defendant's best opportunity for success was to waive a jury. What appears unmistakable, however, is the striking similarity between the defendant's case and an ostensibly fictitious case contained in Mr. Feige's book "Indefensible."[FN3] Also unmistakable is that in one episode of Mr Feige's television drama, "Raising the Bar," another ostensibly similar [*10]fictitious case involves a corrupt judge who agrees to acquit the defendant but fails to do so.[FN4]

Perhaps Mr. Feige does indeed seek redemption for his perceived malpractice or perhaps there are other motivational forces in operation. Neither is of any moment. If, however, Mr. Feige is indeed guilty of the ills he claims to be, then in light of the accomplished author and producer he has become, disbarment, which he curiously appears too eager to accept, seems far from adequate. If, on the other hand, Mr. Feige is simply remorseful for misreading Justice Massaro, such remorse hardly qualifies as error, much less ineffective assistance of counsel; it is merely an unsuccessful defense strategy.

A recurring problem in medical malpractice cases is one in which the attorneys take on a case, start the case, and then at the critical juncture when an expert has to be named, abandon the case.  From a business point of view, this behavior is incomprehensible.  On further reflection, it seems to us that the real explanation is that some medical malpractice attorneys really believe that enough cases will settle prior to needing an expert, that it is feasible to start cases they never intend to finish.

In Riley v. Segan Nemerov & Singer P.C., 303097/08;  Decided: December 14, 2009;  Justice George D. Salerno;BRONX COUNTY;  Supreme Court we see a slightly different variant.  In this med mal case, the claim was lack of informed consent to plastic surgery, and the case went well until it was ready for trial, and the expert dropped out.  From the decision it seems that the surgeon-expert lost his license.  From that point on, the law firm just did not get a new expert, or even oppose the eventual motion to dismiss after the case was marked off calendar.  Shockingly, the court determined that no expert was even needed at all.

"Applying the above principals, this legal malpractice action was timely commenced within three years after its accrual. This legal malpractice claim accrued on the date that plaintiffs' actionable injury occurred, namely, the date of the Order dismissing the case, June 20, 2005, or on the date of the decision, April 29, 2005, upon which the said Order was made. Using either date as the date of accrual, this action was timely commenced within three years of accrual, because it was commenced on April 16, 2008. See McCoy v. Feinman, supra.

Even assuming, arguendo, that the legal malpractice claim accrued prior to April 16, 2005, the continuous representation doctrine would toll the statute of limitations until the attorney-client relationship ended. Segan has not shown that their representation was unequivocally ended prior to April 16, 2005.

Leon Segan never sought leave of court to withdraw as counsel, as required by CLR 321 and 22 NYCRR 604.1(6). Rather, Segan remained the attorney of record until after Justice Silver rendered his decision on April 29, 2005. Segan continued to make appearances in the STP Part of this court on plaintiffs' behalf, including appearing for oral argument on Dr. Goldstein's motion to dismiss, on March 11, 2005, and April 8, 2005.

The Segan firm represented plaintiffs for seven years when Leon Segan sent his clients the letter dated the August 25, 2004. Lisa Riley states that, at that time: "it was [her] understanding that my medical malpractice action against Dr. Goldstein was active and that the defendants were doing everything possible to represent [her] best interests." Lisa Riley also indicates that she relied upon and trusted Segan to legally represent her, and she cooperated with them at every juncture. 7

It is also noted that, from the Bill of Particulars served by the Segan firm in the underlying Malpractice action against Dr. Goldstein, that Lisa Riley had suffered severe depression including a "suicide attempt", requiring psychiatric attention, caused by the deformities and scarring resulting from the alleged botched breast-reduction surgery. 8 Especially under such circumstances, Segan should have unambiguously orally communicated with the Plaintiffs, preferably in-person, (and certainly not merely by crafted letters), if they intended to end this long-term relationship of trust and confidence, which began when Lisa Riley was an infant.

"An attorney "does not have an unfettered right to unilaterally withdraw" as counsel, and "[good cause is required, to be determined, ultimately, by the Court" upon motion by said counsel.[citations omitted]." Frenchman v. Queller, Fisher, Danced, Saurianness, Washer & Pool, LP, 24 Misc. 3d 486 (N.Y. Sup. Ct. 2009)."

An often found situation in legal malpractice cases is the successor counsel problem.  In a nutshell, here it is.  Plaintiff hires attorney 1 who makes a mistake.  Plaintiff finds out about the mistake, which has not led to outright dismissal, but rather, to a problem.  Plaintiff hires attorney 2 who is unable to solve the problem, and the case is dismissed.  May plaintiff sue attorney 1 ?  The answer is not clear, as it depends on the individual facts, but attorney 1 will certainly defend on the proposition that successor counsel took over prior to outright dismissal, and had the last clear chance to fix the problem, thus insulating attorney 1 from liability.

Here, in Guzzello v Steinberg, Finneo, Berger, Barone & Fischoff, P.C. ;2009 NY Slip Op 09427 ;
Decided on December 15, 2009 ;Appellate Division, Second Department  we see one additional element added in.  Plaintiff is too late to sue one of the defendants, but they are free to cross-claim amongst themselves.
 

"Although Berger and the Berger firm established that the action insofar as asserted against them was time-barred, the appellants are not precluded from asserting the cross claims against Berger and the Berger firm (cf. Sommer v Federal Signal Corp., 79 NY2d 540, 558; Hill v Metropolitan Suburban Bus Auth., 157 AD2d 93, 100). Moreover, the Supreme Court improperly considered the argument of Berger and the Berger firm that they were entitled to summary judgment dismissing the appellants' cross claims insofar as asserted against them on the ground that the appellants, as successor counsel, had the opportunity to protect the plaintiff's rights. That argument was raised for the first time in the reply papers of Berger and the Berger firm (cf. Matter of Harleysville Ins. Co. v Rosario, 17 AD3d 677, 677-678). In any event, since, under the circumstances, the appellants cannot be considered successor counsel (cf. Northrop v Thorsen, 46 AD3d 780, 783; Johnson v Berger, 193 AD2d 784, 786; Sucese v Kirsch, 177 AD2d 890, 892), that argument is without merit. Accordingly, the court should have denied that branch [*2]of the motion of Berger and the Berger firm which was for summary judgment dismissing the appellants' cross claims insofar as asserted against them. "
 

Rule 1215, setting forth the necessity for a retainer agreement between attorney and client, has some very strong language.  Under the rule, in the absence of a retainer agrement, no legal fee can be enforced.  This is the rule, no?

Actually, no.  A case this week in the Appellate Division, First Department underscores the reluctance of a court to give the rule any substance.  in Nabi v Sells ;2009 NY Slip Op 09408 ;Decided on December 17, 2009 we see yet another re-iteration of the rule in Seth Rubenstein.  No retainer agreement is necessary, and while collection under the retainer agreement may not proceed, the attorney may yet recover in quantum meruit.

"It was error to dismiss the first cause of action merely because plaintiff is not entitled to the declaration he seeks (see Lanza v Wagner, 11 NY2d 317, 334 [1962], cert denied 371 US 901 [1962]); the proper course is to declare in favor of defendants (see Holliswood Care Ctr. v Whalen, 58 NY2d 1001, 1004 [1983]; Mongelli v Sharp, 140 AD2d 273 [1988]). The aspects of the contingency fee retainer agreement prepared by defendants and signed by plaintiff that allegedly render it noncompliant with 22 NYCRR 1215.1 do not bar defendants from recovering in quantum meruit (see Seth Rubenstein, P.C. v Ganea, 41 AD3d 54, 60-64 [2007]; see also Egnotovich v Katten Muchin Zavis & Roseman LLP, 55 AD3d 462, 464 [2008]; Nicoll & Davis LLP v Ainetchi, 52 AD3d 412 [2008]). " We need not decide whether any of the alleged defects in the retainer agreement, alone or in combination, bar recovery in contract. Provided that defendant attorneys were not discharged for cause, in which case they would not be entitled to any fee
(see Matter of Montgomery, 272 NY 323, 326 [1936]), their recovery would be limited to the fair and reasonable value of their services, computed on the basis of quantum meruit (see Matter of Cohen v Grainger, Tesoriero & Bell, 81 NY2d 655, 658 [1993]; Lai Ling Cheng v Modansky Leasing Co., 73 NY2d 454, 457-458 [1989]; Schneider, Kleinick, Weitz, Damashek & Shoot v City of New York, 302 AD2d 183, 186, 188-189 [2002]; Smith v Boscov's Dept. Store, 192 AD2d 949, 950 [1993]). The rationale for the rule is that, due to the special relationship of the utmost trust and confidence between a client and an attorney, the client has the right to discharge the attorney at any time, for any reason, or for no reason, regardless of any particularized retainer agreement, and the client should not be compelled to pay damages for exercising the absolute right to cancel the contract (see Martin v Camp, 219 NY 170, 173-176 [1916]; see also Demov, Morris, Levin & Shein v Glantz, 53 NY2d 553, 556-557 [1981]; Matter of Montgomery, 272 NY at 327; Matter of Krooks, 257 NY 329, 331-332 [1931]). Against the client's unqualified right to terminate the attorney-client relationship is balanced the notion that a client should not be unjustly enriched at the attorney's expense or take undue advantage of the attorney, and therefore the attorney is entitled to recover the reasonable value of services rendered

Is there a difference between quantum meruit and the retainer agreement amounts?  Actually, no. "Although the annulled contingency fee agreement no longer governs the parties' relationship, it may "be taken into consideration as a guide for ascertaining quantum meruit" (Matter of Tillman, 259 NY 133, 135 [1932]), in addition to such pertinent factors as " the nature of the litigation, the difficulty of the case, the time spent, the amount of money involved, the results achieved and amounts customarily charged for similar services in the same locality'" (Schneider, Kleinick, Weitz, Damashek & Shoot, 302 AD2d at 188-189 [quoting Smith, 192 AD2d at 951]).
"

It's just a few words spoken to the record, and in this case, none of the participants dispute what was the agreement between the parties, yet, here, a settlement was not a settlement, and all because the judge made a decision and held firmly to it.

In Diarassouba v Urban ;2009 NY Slip Op 09420 ; Decided on December 15, 2009 ;Appellate Division, Second Department  here is what happened:

"While the court was in recess and the jury was deliberating, Conrad Jordan, counsel for the plaintiff, communicated to the defendants' counsel, Barry M. Viuker, that his client had authorized him to accept a settlement offer in the sum of $150,000. Viuker provided no confirmation of the settlement, but rather asked, "Do we have a settlement?" Jordan responded that [*2]he accepted the settlement offer. Viuker proceeded to leave the room for several minutes, without having responded in any way to Jordan's statement. The defense counsel's question, "Do we have a settlement?" was his only and final mention of the settlement agreement until after the court took the jury's verdict.

During Viuker's absence from the courtroom, Jordan informed the court clerk that the parties had reached a settlement, although he did not provide a specific settlement amount. The clerk did not record this information, but said that he would inform the Judge, who was already on her way to the courtroom to read a new jury note. Viuker then returned to the courtroom. When the judge arrived at the courtroom, Viuker inquired, off the record, as to the contents of the jury note. The Judge responded that the jury had reached a verdict. Once again, Viuker left the room for a short while.

When Viuker returned, Jordan asked the court to memorialize the settlement on the record prior to taking the verdict, but the court refused Jordan's requests.

"Mr. Jordan: Could I put my request on the record?
"The Court: Once I have a verdict, I take the verdict, and then the parties are free to do what they agreed to. An agreement is an agreement, counsel.
"Mr. Jordan: Why can't we put the agreement to settle the case for $150,000 on the record?
"The Court: Because I said what I have to say. Let's proceed."

Viuker was silent throughout this whole exchange.
The verdict was then taken in the plaintiff's favor, finding that Dr. Lubin and Dr. Horiuchi were each 35% at fault for the plaintiff's injury. The jury awarded the plaintiff the sum of $800,000 for past pain and suffering and the sum of $650,000 for future pain and suffering over 30 years. "

Even though Supreme Court ruled that the settlement was effective, the Appellate Division stated a blackletter rule:  "Thus, a settlement agreement is valid only if both parties stipulate to the settlement in a written agreement or it is made in open court and placed on the record. "

" 
 

One might think that after a loss of the underlying case, a legal malpractice action will undoubtedly be successful.  That thought is, of course, naive.  As an example. suppose you are a landlord and owner of a commercial setting who sells to buyer, who is to pay for the sale over time.  buyer disappears, and the store is left unattended.  Seller watches, then padlocks the store for safety, then later runs the business to pay for the upkeep.  Buyer later returns and sues.  Seller's attorney defends, does not file a counterclaim, then bails out just before trial.  Seller loses the trial.  Malpractice?  US District Court says no.

In CHARL-HO PARK, v.. REIZES; 5:06-CV-0843 (GTS/GJD)UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK 009 U.S. Dist. LEXIS 117077 the court summarizes: "Plaintiff's Complaint alleges that Defendant committed legal malpractice in the following ways: (1) he improperly advised Plaintiff of his legal rights regarding the padlocking of the premises in question; (2) he improperly advised Plaintiff of the amount that Plaintiff's tenants needed to pay to cure a default; (3) he failed to assert affirmative defenses and counterclaims on behalf of Plaintiff in an action filed against Plaintiff; and/or (4) he breached his professional duty by abandoning Plaintiff on the eve of trial, thereby [*2] causing Plaintiff to lose that action."

"Specifically, the Court finds that whatever issue of fact may exist with regard to the padlocking incident is not material to the issue of whether Defendant breached a legal duty to Plaintiff. The Court makes this finding for two reasons.

First, whether Plaintiff notified Defendant that his wife had padlocked the area is immaterial because Plaintiff admitted in his deposition that he asked his wife to lock the store for security reasons, as opposed to locking the store for the purpose of keeping the Lees from entering. (Dkt. No. 23, Part 10, at 30-31 [Plf.'s Deposition].) Defendant properly notes that New York courts recognize a landlord's padlocking or changing of locks as an eviction only when the landlord does so for the purpose of keeping a tenant out. 1 As a result, even assuming that Defendant owed Plaintiff a duty to advise him with regard to whether to padlock the premises in question, Defendant would have had a reasonable basis for not advising Plaintiff to remove the lock. As a result, Defendant [*7] did not breach any duty to Plaintiff with regard to the padlocking incident.

"In any event, whether or not Defendant gave this advice or calculated the amount owed (or even whether the calculation was incorrect) is immaterial to Defendant's motion for summary judgment. This is because, just as Plaintiff has done with regard to the issue of the padlocking of the doors discussed above in Part III.A. of this Decision and Order, Plaintiff has failed to provide admissible evidence to meet the burden needed to survive summary judgment on the element of causation in his claim regarding the default claim. "

"However, even assuming that Defendant erroneously notified Plaintiff that filing a counterclaim would cost more money (rather than notifying him that it merely could cost more money and time), Plaintiff has failed to adduce admissible record evidence from which a rational factfinder could conclude that such an error caused him any harm. "The object of compensatory damages is to make the injured client whole. Where the injury suffered is a loss of a cause of action, the measure of damages is generally the value of the claim lost." Campagnola v. Mulholland, Minion and Roe, 76 N.Y.2d 38, 42 (N.Y. 1990).."


 

Nate Raymond of the NYLJ reports a second unusual legal malpractice case, this time with an attorney as the plaintiff.  He sues over a case concerning his former law office and whether he was due money in the wake of its breakup.  "Partnership law expert Leslie Corwin is being sued by an attorney he represented who claims Mr. Corwin mishandled an arbitration with the attorney's former firm.  The case seems to revolve around the failure of either plaintiff or defendant to list an expert witness for use in the arbitration.  Because he was listed as a witness, but not an expert witness, his testimony on valuation was precluded.

Unanswered, but discussed in the case is why plaintiff did not take advantage of the right to offer documentary evidence on valuation.  Is that comparative negligence?

Allen Roberts, a partner at Epstein Becker & Green, sued Mr. Corwin and his firm, Greenberg Traurig, in October, claiming they were negligent in failing to prove liability against Mr. Roberts' former partners at New York employment boutique Roberts & Finger. Mr. Roberts is seeking more than $6.6 million in damages (See the Complaint).

Mr. Corwin, in an answer filed earlier this month, acknowledged Mr. Roberts lost the dispute but said the fault lies with Mr. Roberts, who, as an experienced lawyer, acted as co-counsel in his own case. Mr. Roberts "failed to heed advice" from Mr. Corwin, the answer claims, and caused the alleged damages himself. Greenberg also said Mr. Roberts owes the firm more than $141,000 in legal fees."
 

"Mr. Roberts' side rested without offering other testimony to support theories of valuation and liability, according to Mr. Roberts complaint.

The arbitration panel gave Mr. Corwin the opportunity to submit valuation theories in a chart or addendum. Mr. Corwin did not submit those, the complaint said, nor did he seek to reopen the hearing to receive further evidence"
 

Nate Raymond of the NYLJ reports on a $55 Million legal malpractice case  Ableco Finance LLC v. Hilson, Ippolito and Paul Hastings Janofsky & Walker LLP arising from loans made to a large retailer, and events after the loan went sour, bankruptcy filings, and apparently a big pay back by the lender in Bankruptcy Court.

"A financing unit of Cerberus Capital Management L.P. has sued Paul, Hastings, Janofsky & Walker, claiming the law firm gave it bad advice in connection with a loan the private equity firm made last year to a company looking to bring retailer Steve & Barry's out of bankruptcy.

Ableco Finance LLC, a unit of Cerberus with more than $6 billion under management, filed an amended complaint Friday in Manhattan Supreme Court against its former lawyers seeking more than $55 million it said it lost because of the $125 million loan. Ableco claims it would never have made the loan last year if the Paul Hastings team had advised it that the buyer would not have rights to all of Steve & Barry's inventory, which Ableco understood would back the loan.

"No competent, diligent finance lawyer would have put his client in such a vulnerable position," Ableco's complaint reads in part."

We obtained the Amended Complaint which  has as its main point "Paul Hastings Failed to Advise Ableco That the Terms of the BH/S&B Agency Agreement Made it  Impossible for Ableco to Get a Perfected First Priority Lien on S&B's Entire Inventory"

The Amended Complaint has but a single claim in Legal Malpractice against all defendants.

As the NYLJ article continues: "It was a difficult time to make a loan, given "an economy that was suffering major disruptions in the housing and credit markets," Ableco said in its complaint. To ensure it got paid back in full, Ableco said it told Paul Hastings lawyers to require a first priority lien on Steve & Barry's entire inventory, which Ableco estimated to be worth $183.7 million. Language agreeing to a first priority lien made it into the commitment letter drafted by Paul Hastings, and Ableco agreed to make the loan.

But according to the complaint, Ableco had not been advised about an earlier agreement between Bay Harbour and Steve & Barry's that would have made a right to the entire inventory impossible. Bay Harbour's earlier agreement with Steve & Barry's left the retailer with control of more than 50 percent of its stores. While the estate had given Bay Harbour a lien on the assets at these stores, the estate kept priority rights to the inventory and sales proceeds that came ahead of that lien.

As a result, Ableco claimed it was in fact impossible for it to receive its lien on a large portion of Steve & Barry's inventory. Ableco said Paul Hastings did not provide a copy of the earlier agreement between Bay Harbour and the retailer's estate, nor communicated its terms, before Ableco made the loan.

With the economy worsening, the company created by Bay Harbour, BH S&B Holdings, began to struggle and it filed for Chapter 11 bankruptcy in the Southern District in November 2008. "

One has to shake the head and ask why all the effort goes into a law suit that will [or is so likely to] fail?  The question is multiplied when plaintiff is an attorney seeking fees.

Rule 137 seems pretty comprehensive and exacting.  Attorney who seeks a fee needs to serve th client with an opportunity to arbitate.  Here in Messenger v Deem ; 2009 NY Slip Op 29501 ;Decided on December 7, 2009 ;Supreme Court, Westchester County ;Giacomo, J. we see what turns out to be a total waste of time for everyone, including the jurors.
 

"In his complaint, plaintiff alleged that "Pursuant to Second Department case law, notice of right to arbitrate legal fees need not be provided to a client who never disputes the reasonableness of an attorney's legal fees...Defendant never disputed the reasonableness of Plaintiff's fees." (Complaint at ¶¶6-7.)

In her answer [FN1], defendant denied the allegations of the complaint and plead thirteen affirmative defenses including that plaintiff was not entitled to an attorney's fee because of his: failure to provide defendant with notice of arbitration before commencement of the suit ."
 

"Part 137 of the Rules of the Chief Administrator of the Courts provides for a Fee Dispute Resolution Program. A mandatory Arbitration Procedure is set forth therein for all representations that commenced on or after January 1, 2002, and is applicable "to all attorneys admitted to the bar of the State of New York who undertake to represent a client in any civil matter." 22 NYCRR 137.1.

Plaintiff argues that the mandatory arbitration provisions of Part 137 are inapplicable to the instant matter because, like in the Scordio matter, there was no disagreement as to the amount of attorney's fee due to plaintiff, and that defendant [*3]simply did not pay what was due. In Scordio, the Appellate Division, Second Department held that the mandatory arbitration notice provided for by then Court Rule 136.5 did not apply where the client did not dispute the reasonableness of the fees charged, and specifically declined "to follow the rule adopted by the Appellate Division, First Department, which obligates an attorney to send such a notice even in the absence of any fee disagreement with a client." Scordio v. Scordio, 270 AD2d at 329, 705 NYS2d at 59.

Court Rule 136.5, upon which Scordio was premised, was repealed in January 2002 and replaced with Court Rule 137.6. Former Rule 136, which was applicable only to domestic matters has been subsumed by the newer Part 137 which, with limited exceptions that are not alleged here, is applicable to all civil matters. Court Rule 137.6 is applied in the same manner as former Rule 136.5. See, Abinanti v. Pascale, 41 AD3d 395, 837 NYS2d 740 (2nd Dept., 2007); Borah, Goldstein, Altschuler, Schwartz & Nahins, PC v. Lubnitzki, 13 Misc 3d 823, 822 NYS2d 425 (N.Y.Civ.Ct., 2006). "

"A "fee dispute" (22 NYCRR §137.2) or a disagreement as "to the attorney's fee" [22 NYCRR §137.6(a)] is not only found when the former client complains as to time billings on a line by line basis. Under Part 137, arbitrators are entrusted to "determine the reasonableness of fees for professional services". 22 NYCRR §137.0. Here the defendant "disputed the reasonableness of the fees" plaintiff was charging. See, Scordio v. Scordio, supra , 270 AD2d at 329, 705 NYS2d at 59. The "reasonableness" of the fee cannot be limited to disputes as to whether an attorney should have charge "1.0 hours of billing time" instead of "1.2 hours of billing time". If such were the case a simple audit of the bill would be all that was necessary. Instead, arbitrators are given authority to evaluate and make a subjective finding of reasonableness. For something to be reasonable it must be fair and proper under the circumstances. To hold otherwise would render the Rule impotent and unenforceable. "

Yesterday we discussed the plaintiff v. her own attorney part of Dupree v Voorhees ; 2009 NY Slip Op 09183 ; Decided on December 8, 2009 ; Appellate Division, Second Department .  Today we look at Dupree v. her husband's attorneys.  Traditionally this type of case has been out of bounds.  For policy reasons, courts do not like suits against your adversary's attorney...they might come after every case if allowed.  Here, however, after the Judiciary Law 487 claims were initially dismissed,, continued to remain dismissed on renewal, and then reversed on appeal.
For the bizarre events, see yesterday's blog entry.  It is alleged that the husband's attorneys deceived the court on an Order to Show Cause application, which permitted a receivership to be established while the wife's attorney was kept from knowing about the application.

"Based upon events which occurred in an underlying divorce action, the plaintiff commenced this action against her former attorney, Oliver Raymond Voorhees III, her former husband's attorney, Karyn A. Villar, and Villar's law partner, Dorothy A. Courten. As is relevant [*2]to this appeal, the third cause of action sought damages for abuse of process against Villar and Courten, alleging that Villar made certain misrepresentations in applying for a receivership order in the underlying action. In the fourth cause of action, the plaintiff seeks treble damages against Villar and Courten under Judiciary Law § 487, alleging that Villar intended to deceive the court in connection with a receivership application. The complaint further alleged that because Courten and Villar were partners in the same law firm, Courten was vicariously liable for the damages the plaintiff sustained as a result of Villar's alleged wrongdoing. "

"The court determined that a subsequent decision of the Court of Appeals in Amalfitano v Rosenberg (12 NY3d 8) provided a reason for granting renewal, and, upon renewal, to deny that branch of the motion which was to dismiss the complaint as against Villar with respect to the Judiciary Law § 487 cause of action. The court, however, denied the plaintiff relief with respect to the Judiciary Law § 487 cause of action against Courten, noting that Judiciary Law § 487 is rooted in the criminal law and that it would be inconsistent with this history and the statute itself to hold a second attorney responsible for the deceit of another unless the attorney participated in or ratified the wrongdoer's actions. We disagree.

Partnership Law § 24 provides that "[w]here, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership, or with the authority of his copartners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act" (Partnership Law § 24 [emphasis added]). Partnership Law § 26(a)(1) provides that "all partners are liable . . . [j]ointly and severally for everything chargeable to the partnership under section[ ] twenty-four." The pivotal test for liability in this regard is whether the wrong was committed on behalf of and within the reasonable scope of the partnership business, not whether the wrongful act was criminal in nature, or whether the other partners condoned the offending partner's actions (see Rudow v City of New York, 642 F Supp 1456, affd 822 F2d 324; Muka v Wiliamson, 53 AD2d 950; see also Clients' Sec. Fund v Grandeau, 72 NY2d 62). Therefore, the Supreme Court erred in adhering to the determination in the order dated May 1, 2008, dismissing the Judiciary Law § 487 cause of action against Courten. "

Dupree v. Voorhees, 2009 NY Slip Op 09183 ;Decided on December 8, 2009 ;Appellate Division, Second Department  is an example of the breathtaking reversals that might happen on appeal, and how the law can "change" in the period between dismissal and the appeal.  Today we will look at the legal malpractice part of this case which is more traditional; on Monday we will look at the Judiciary Law 487 reversal, and how it kept two attorneys in the case.
In this matrimonial case, it appears that some very strange motion practice took place.  we;ll quote:

"Specifically, the record reveals that the attorneys representing the plaintiff's former husband in a matrimonial action failed to provide advance notice to the appellant, the plaintiff's [*2]former counsel in the matrimonial action and a solo practitioner, of a closing scheduled for November 21, 2003, for the refinancing of the former marital residence. Rather, on the date in question, the appellant, who was in Suffolk County serving jury duty, received a voice mail message from one of those attorneys, Karyn A. Villar, advising him of a purportedly "emergency" application being made that day before Justice John C. Bivona in the Supreme Court, Suffolk County (hereinafter the motion court). Shortly thereafter, during a break, the appellant returned Villar's call and was informed by Villar that the closing would be taking place later that day. The application made by order to show cause ostensibly was to allow the former husband to effectuate the refinancing transaction.

Although Villar advised the motion court that the appellant was unavailable, and although the order to show cause had a return date of November 25, 2003, four days later, the order to show cause was signed by the motion court on November 21, 2003. The order to show cause granted the ultimate relief requested therein, essentially appointing the former husband receiver of the plaintiff's interest in the marital residence without her consent. The former husband, after the closing, failed to comply with an earlier stipulation in the matrimonial action requiring him to buy out his wife's interest in the marital property for the sum of $95,000.

Notably, a copy of the order to show cause signed by the motion court was faxed to the appellant's office at 3:54 P.M., approximately one hour after the time the closing was scheduled to occur. The appellant submitted opposition papers on the return date but, necessarily, after the closing had occurred. Under these circumstances, the appellant demonstrated the absence of any negligence on his part.

Result?  Case dismissed and affirmed against this attorney.  But, the case continues against two others under Judiciary Law 487.  Tomorrow, we'll see how a motion to renew worked and how the Court of Appeals decision in Amalfitano v. Rosenberg alerted Supreme Court that a lot had changed.

Reading between the lines in Minkow v. Sanders, plaintiff was a difficult client.  To begin, he was her third attorney.  As a digression, defense attorneys in legal malpractice cases often tee off with the assertion that their client is the "third" or "fourth" attorney that plaintiff has had, and boot strap from that to the assertion that only a despicable person has more than one attorney.  While in the main this is unwarranted, in this particular case, it seems that the client was already about to be held in contempt for financial issues in the matrimonial action when defendant attorney took over.

Plaintiff seems to have had the money in this relationship, as there was eventually a pre-nup agreement found, and she had control of the bank accounts, and the kid's money.  Needless to say, it turned sour, and Ms. Minkow ended up in jail over Christmas.  In matrimonial litigation, this is almost unheard of.

She sued and had her case dismissed by Justice Solomon in Supreme Court, New York County for the basic reasons:  failure to state a cause of action   Interestingly, Justice Solomon "summarily dismissed" several of the causes of action, and then dismissed the balance of them

The decision should be read for two reasons.  The first is a discussion of termination of the attorney-client relationship when "trust and confidence" has fled.  The second is Justice Solomon's treatment of a cause of action for the attorney's "inability to gain plaintiff's compliance with a court order."  As Justice Solomon states:"A client's wilful disregard of a court order cannot be attributed to her attorney who consistently advised compliance" no matter that it got her locked up over Christmas.

What do the parties really think in an attorney - fee dispute which totals in the $6 million range.  Most attorney fee disputes are less than $50,000,  In NY that qualifies for the court monitored Attorney-Fee dispute program  Here, in a startling NYLJ article Nate Raymond writes about the Debevoise & Plimpton cases against Candlewood Timber Group LLC.
 

Here are some of the issues in the case, from the NYLJ:  "Debevoise, which grossed $760.8 million in 2008, in its complaint said it submitted invoices and requests for payment to Candlewood for a year after trial wrapped in May 2006. Debevoise also attempted earlier this year to take Candlewood to arbitration.

But in March, Candlewood filed a petition to stay the proceedings, arguing its engagement letter with the firm did not cover arbitration.

Debevoise withdrew its notice to arbitrate in June, according to an affirmation in the proceedings in Debevoise & Plimpton LLP v. Candlewood Timber Development, LLC, 103982-2009. It then sued Candlewood and its principal, Jeffrey Kossak, on Nov. 12 (Debevoise & Plimpton LLP v. Candlewood Timber Group, LLC, 603479-2009).

According to the state court complaint, the fee dispute stems from Debevoise's representation of Candlewood in litigation against Pan American Energy LLC, a joint venture of BP p.l.c. and Bridas Corporation, which had subsurface rights to extract oil and gas in Argentina on land owned by Candlewood.

In an interesting side note to the article, a "legal cost" expert tells the firm not to sue for $6 million in fees.  Aside from the astounding concept, we wonder about the advice:

"John Marquess, president of Legal Cost Control Inc. in Haddonfield, N.J., said he would counsel a firm not to sue for fees, even with a "significant" demand like the more than $6.37 million Debevoise is seeking.

"If I were advising any law firm, I would tell them suing a client over fees is a no-win situation," he said. "It's going to get you adverse publicity you may or may not recover from. And if it went before a jury, juries hate lawyers."

Mr. Marquess said law firms usually attempt to resolve the disputes quietly to avoid litigation, which Debevoise tried to do."

There are lawyers who try cases to the limit and there are lawyers who try too hard.  This morning we were reading a NY Times article about the "capital panel.'  These are attorneys who will eventually represent the Guantanimo defendants at their Federal terrorism trials.  A potential for the death penalty exists in these cases.

In contradistinction, there is the garden or varietal civil case in which an attorney just goes too far.   KLIN Construction Group Inc. v. Blue Diamond Group Corp., 5215/09;Decided: November 20, 2009;  Justice Arthur M. Schack; KINGS COUNTY is one such case.  Justice Schack has become known recently for his imposition of sanctions, and has held attorneys in contempt.  Read the case closely, and we come away with the belief that a little less hostility by the sanctioned attorney would have gone a long way.

"Defendants' counsel, in his affirmation in support of MS # 2, asserts that he received this Court's April 24, 2009 Northside Tower Realty, LLC decision and order on April 27, 2009. Then, that day, he wrote and faxed a letter to Ms. Wang, with a copy of my April 24, 2009 decision and order, asked her to withdraw the instant action as moot and warned her that her failure to do so would result in a sanctions motion [exhibit B of MS # 2 OSC]. Ms. Wang, the same day, wrote and faxed to plaintiff's counsel a response rejecting the notice because she had not been served with a notice of entry. Further, she alleged that defendants' counsel's letter was a threat, which is "attorney misconduct, and in and of itself sanctionable [exhibit C of MS # 2 OSC]."

The letter by defendants' counsel was not a threat but fair warning of the consequences to follow if Ms. Wang continued the instant action. Further, CPLR Rule 2220 (b) states that "[s]ervice of an order shall be made by serving a copy of the order." Notice of entry of an order only affects the time to appeal and the time to re-argue. CPLR §5513; CPLR Rule 2221 (d) (3)."
 

"In MS # 2, plaintiff's counsel also raised the issue of false jurats in the subject November 21, 2009-mechanic's lien and the November 21, 2009-affidavit of service of the mechanic's lien. The November 21, 2008-mechanic's lien was executed by Ming Chin Lin, President of KLIN, who swore that she signed the mechanic's lien in the State of New York, County of Kings [exhibit E of MS # 2 OSC]. The notary who took her signature was plaintiff's counsel, Ms. Wang. Further, Ms. Lin swore in the affidavit of service that she served the mechanic's lien on the same day, November 21, 2008, on defendant BLUE DIAMOND, "by depositing a true copy of [mechanic's line]…in an official depository of the United States Postal Service in New York State." Ms. Wang signed the jurat as the notary [exhibit E of MS # 2 OSC].

However, in a related Supreme Court, Nassau County action, Blue Diamond Group Corp. v. Klin Construction Group, Inc. and Chunyu Jean Wang, Index No. 22040/08, for breach of contract and the filing of false jurats with respect to the subject November 21, 2008-mechanic's lien, both Ms. Wang and Ms. Lin admitted that the mechanic's lien was signed in Taiwan, not New York. Ms. Wang, in her January 14, 2009 affirmation in support of her motion to dismiss [exhibit F of MS # 2 OSC] states in ¶3:

Pictures of Ming Chin Lin and Ms. Wang at the marriage ceremony of her brother, Kenny Lin…prove that Ms. Wang, attorney for defendants, witnessed Ming Chin Ling, the President of the corporate defendant, KLIN Construction Group, Inc., sign the refiled Mechanic's Lien on behalf of the corporate defendant in Taiwan. Ming Lin Chin met Ms. Wang in Taiwan on November 21, 2008, because both were attending the marriage ceremony of Ming Chin Lin's brother, Kenny Lin, on November 22, 2008…As attorney for the corporate defendant, Ms. Wang is fit to acknowledge her client's signature in Taiwan, especially since the papers are to be filed in the same proceeding as her representation."

"Ms. Wang's conduct with respect to: her use of false jurats and material factual statements that are false; her continued failure to discontinue the instant action when notified of my cancellation and discharge of the subject November 21, 2008 mechanic's lien on April 27, 2009; and, her contemptuous refusal to provide this Court with affirmations as to her Father's alleged medical emergency on May 29, 2009 and her absence on June 26, 2009; is completely without merit in law. This Court, in having to adjudicate MS #'s 2, 3 and 5, conduct hearings and conferences on May 29, 2009, June 1, 2009, June 26, 2009 and July 13, 2009, and draft this decision and order wasted valuable judicial resources.

Therefore, this Court, pursuant to 22 NYCRR §130-1.1 (a), and as discussed above, has the discretion to award costs for reimbursement of "for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct as defined" in 22 NYCRR §130-1.1 (c), and may impose sanctions upon an attorney who engages in frivolous conduct. In his post hearing brief, defendants' counsel, Mr. Scher, submitted detailed documentation with respect to defendants' "actual expenses reasonably incurred and reasonable attorney's fees resulting from frivolous conduct," from April 27, 2009 to the August 17, 2009 submission of the post hearing brief. The documentation demonstrates that defendants had actual expenses, which the Court deems reasonably incurred, of $4,158.83, resulting from Ms. Wang's frivolous conduct. Further, with respect to reasonable attorney's fees, Mr. Scher billed $53,910.45 (108.91 hours at $495.00 per hour, pursuant to Retainer Agreements, submitted with the post-hearing brief), and his associate, Austin Graf, Esq., billed $9,967.50 (26.58 hours at $375.00 per hour, pursuant to Retainer Agreements, submitted with the post-hearing brief). This total of $63,877.95 ($53,910.45 + $9,967.50) is deemed by the Court as reasonable attorney's fees resulting from Ms. Wang's frivolous conduct."

We are proud to report that Andrew Lavoott Bluestone has been admitted as a Diplomate to the American Board of Professional Liability Attorneys.  Andrew Lavoott Bluestone is the author and publisher of the New York Attorney Malpractice Blog

The American Board of Professional Liability Attorneys (ABPLA) is the only organization accredited by the American Bar Association (ABA) to certify attorneys in the areas of medical malpractice and legal malpractice. Legal & medical malpractice lawyers who are Board Certified must meet and exceed rigorous standards set by the ABPLA, and are recognized as leaders in professional negligence law.

LEGAL PROFESSIONAL LIABILITY REQUIREMENTS

To become Board Certified in the area of Legal Professional Liability, the following requirements must also be met:

Demonstrate substantial involvement in Legal Professional Liability by showing you:

• Have served as LEAD counsel during your legal career in at least 10 trials or arbitrations where testimonial evidence was presented and the matters were submitted to the finder of fact; and of the aforesaid 10 trials, 2 must involve claims of Legal Professional Liability and 1 must be a jury trial.
• Participated in 20 additional contested matters (trials, hearings, depositions) involving claims of Legal Professional Liability.
• Within the 3 years prior to application, have done any one of the following:
  • 1. Participated in 10 matters involving claims of Legal Professional Liability that went to trial or alternate dispute resolution;
  • 2. Concluded 24 litigated matters involving claims of Legal Professional Liability as lead counsel or in a supervisory capacity to lead counsel;
  • 3. Had 24 performances (depositions, hearings) involving claims of Legal Professional Liability; or
  • 4. Any combination of trial days, participation in litigated matters or performances which demonstrates substantial involvement in Legal Professional Liabiity

Andrew Lavoott Bluestone can be reached:  233 Broadway, Suite 2702, New York, NY 10279  His telephone number is (212) 791-5600.

It's a complex question, but in troubled financial times, legal malpractice law suits become more visible and valuable.  Receivers, Trustees in Bankruptcy, and other fiduciary appointees all eye and measure pockets in an ongoing attempt to broaden and increase the fisc.

in COBALT MULTIFAMILY INVESTORS I, LLC, , -against- MARK A. SHAPIRO, UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 111399; November 30, 2009, Decided  we see Justice Wood's analysis of the relationship:
 

"The court-appointed receiver (the "Receiver") for Plaintiffs Cobalt Multifamily Investors I, LLC, and its related, defunct entities (collectively, "Cobalt"), filed suit against numerous Defendants, including three sets of attorneys and their law firms ("Law Firm Defendants") who provided professional services to Cobalt. Law Firm Defendants moved to dismiss the claims against them on the ground that the Receiver lacks standing. On March 28, 2008, the Court granted the motion to dismiss the Receiver's claims against Law Firm Defendants.

In light of a subsequent decision issued by the Court of Appeals for the Second Circuit, Bankruptcy Services, Inc. v. Ernst & Young ("CBI Holding Co."), 529 F.3d 432 (2d Cir. 2008), the Receiver moved for reconsideration of the motion to dismiss. On July 15, 2009, the Court granted the motion for reconsideration on the ground that failure to do so would result in clear error. On reconsideration, the Court granted in part and denied in part Defendants' motion to dismiss. Relevant to the instant motion, the Court denied Law Firm Defendants' motion to dismiss [*3] Plaintiffs' legal malpractice and corporate looting claims."
 

"A receiver or trustee representing a bankrupt corporation generally does not have standing to assert claims against third parties for defrauding the corporation where the third parties assisted corporate managers in committing the alleged fraud. See In re Bennett Funding Group, Inc., 336 F.3d 94, 99-100 (2d Cir. 2003). This legal principle is based on the Wagoner rule, which states that a bankruptcy trustee has standing to assert only those claims that the bankrupt corporation itself could have brought. See Shearson Lehman Hutton, Inc. v. Wagoner, 944 F.2d 114, 120 (2d Cir. 1991)."

"The adverse interest exception is an exception to the Wagoner rule that [*7] is applicable when the corporate managers "totally abandoned [the corporation's] interests and [acted] entirely for his own or another's purposes." Center v. Hampton Affiliates, Inc., 66 N.Y. 2d 782, 784-85, 488 N.E.2d 828, 497 N.Y.S.2d 898 (1985). Determination of the exception's applicability requires a court to engage in a fact-specific inquiry. Such an inquiry may include consideration of (1) the manager's intent with respect to abandoning the corporation's interests, (2) the nature and extent of the benefit (if any) obtained by the manager as a result of the fraudulent conduct, (3) the nature and extent of the benefit (if any) received by the corporation itself as a result of the fraudulent conduct, (4) the various financial losses caused by the fraudulent conduct, and (5) other dynamics and details of the fraud relevant to analysis the party's standing to sue. See In re CBI Holding Co., Inc., 529 F.3d at 451-53."

"If a court finds that the adverse interest exception applies, the receiver or trustee representing the bankrupt corporation has standing to assert claims against a third party that assisted the corporate agent in the fraudulent conduct. In re Bennett Funding Group, 336 F.3d at 100 (citing Wight v. BankAmerica Corp., 219 F.3d 79, 87 (2d Cir. 2000)."

"Even if the Court were to consider [*21] this argument's merit, there is no clear error warranting reconsideration of the July 2009 Order. The decisions cited by Certilman Defendants stand for the proposition that outside attorneys, like Law Firm Defendants, represent the corporate entity. See, e.g., Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y. 3d 553, 562, 910 N.E.2d 976, 883 N.Y.S.2d 147 (2009) ("a corporation's attorney represents the corporate entity"). Here, the Receiver stands in the shoes of Cobalt, the corporate entity, and thus has standing to assert claims that would belong to Cobalt, such as claims for legal malpractice. See Wagoner, 944 F.2d at 120. The issue of Law Firm Defendants' fiduciary duty to shareholders is no barrier to the Receiver's standing at this stage of the litigation."
 

"

The rules concerning fee-sharing, and the precision of detail which must be given to a client. have changed.    Now, one must be precise in the percentages between attorneys, lest a violation of the rule lead to the Court denying attorney fees at a later stage of the proceedings.

In Lapidus & Associates LLP v. Elizabeth Street Inc., 601955/05;Decided: November 4, 2009;Decided on November 4, 2009 ;Supreme Court, New York County ;Goodman, J.  we see he difference between the old rule and the new:

"Defendants also contend that the account stated has been impeached because Lapidus engaged in an unethical and undisclosed fee-sharing agreement with Fass that violates DR 2-107 (A). DR 2-107(A) provides:

"(A) A lawyer shall not divide a fee for legal services with another lawyer who is not a partner in or associate of the lawyer's law firm, unless:

(1) The client consents to employment of the other lawyer after a full disclosure that a division of fees will be made. [*6]

(2) The division is in proportion to the services performed by each lawyer or, by a writing given the client, each lawyer assumes joint responsibility for the representation.[FN6]

(3) The total fee of the lawyers does not exceed reasonable compensation for all legal services they rendered the client."

Defendants argue that in the Dencorp Matter, the facts suggest that Fass was being paid less than he was being billed to defendants. This conclusion is based on Fass's deposition testimony that he was paid $273.00 per hour from plaintiff. The submitted invoices demonstrate, and it is undisputed, that plaintiff billed Reiver $390.00 per hour for Fass's work, including for his communications with Lapidus. "

"With the adoption of the Rules of Professional Conduct (the Rules) in April of this year, New York is now among the states that wisely require that the percentage fee split be disclosed to [*7]a client (see section 1.5 [g] [2] of the Rules). However, representation in this action occurred in 2003-2005, when the Code, and specifically DR 2-107, did not so state, and was not interpreted as requiring such detailed disclosure.[FN8] In instances, such as here, where all of the involved attorneys worked on the case, the court has uncovered no New York authority or expert commentary suggesting that attorneys are required to provide the level of disclosure for which defendants advocate. In fact, according to an expert commentator, DR 2-107 was intended to address referral situations, prevent unreasonable fees to a client and to ensure that the client was made aware of the identities of attorneys working on his or her case and there has never been a controversy as to fee sharing where a lawyer works on a case (Simon, New York Code of Professional Responsibility Annotated, at 402-405 [2007 ed]; see also Lapidus & Associates, LLP v Reiver, 2008 WL 909670, 2008 NY Misc LEXIS 2577 [Sup Ct, NY County 2008] [discussing DR 2-107 extensively]).

The retainer letter submitted by defendants indicates that more than one firm would be working on the case, and identifies the attorneys that would be working on the matter. As payments were to be made only to the plaintiff law firm, and defendants do not contend that it was their understanding that any of the involved attorneys or firms would not receive payment, the only reasonable inference to be drawn is that the attorneys or firms working on the case would be sharing in the fees paid by plaintiff. While defendants may have benefitted from knowing the percentage split, DR 2-107 has not been interpreted to require this level of disclosure.

Concerning the proportionality requirement of DR 2-107, in fee-splitting disputes between attorneys, the Court of Appeals has stated that "courts will not inquire into the precise worth of the services performed by the" attorneys (see Benjamin v Koeppel, 85 NY2d 549, 556 [1995]). Defendants argue that courts should employ greater scrutiny when, as here, the dispute is between an attorney and a client. But defendants also effectively suggest that each attorney should be paid just what was billed to the client for his or her work, but, as discussed extensively in the Dencorp Matter, fee-sharing arrangements where one attorney receives a larger cut than others are not prohibited under the Code.

Finally, "fee forfeitures are disfavored" (Benjamin, 85 NY2d at 553), and "the courts are especially skeptical of efforts by clients or customers to use public policy as a sword for personal gain rather than a shield for the public good'' (id. [citation and internal quotation marks omitted]). While a more expansive interpretation of the DR 2-107 would perhaps permit defendants to avoid paying their legal fees, defendants do not make persuasive arguments as to why the interpretation they seek is justified. Consequently, while the court is pleased that the Code has been changed in a way that may benefit some clients, defendants present no basis for a finding [*8]that plaintiff's fee sharing agreement violates DR 2-107. "

Judiciary Law 487 may be the oldest statute in the English-American Law world.  It dates from 1275, just years after the Magna Carta,  Once in a while we see a reference to Marbury v. Madison, 5 US (1 Cranch) 137 (1803) and think that perhaps this a law student or a new lawyer flexing some muscle.

1275 is a whole other ballgame, however.  There are some misconceptions about the statute which may have been cured by the Court of Appeals decision in Amalfitano v. Rosenberg, 12 NY3d 8 (2009).  One, taken up here, is whether the deceit or attempt to deceive has to be to a judge, or may it be to litigants, or even non-litigants.  In Mokay v Mokay ;2009 NY Slip Op 08528
Decided on November 19, 2009 ;Appellate Division, Third Department  we see that even a non-party may be the subject of an attempt to deceive, and this behavior will be sufficient for a violation of Judiciary Law 487.
 

"Next, we turn to Neroni's argument that his conduct was "covered by advisor's immunity" and therefore not actionable. It is the general rule that "attorneys, in the exercise of their proper functions as such, shall not be civilly liable for their acts when performed in good faith and for the honest purpose of protecting the interests of their clients" (Gifford v Harley, 62 AD2d 5, 7 [1978] [internal quotation marks and citation omitted]). However, "[a]n attorney may [*3]be liable to third parties for wrongful acts if guilty of fraud or collusion or of a malicious or tortious act" (Kahn v Crames, 92 AD2d 634, 635 [1983]; see Mills v Dulin, 192 AD2d 1001, 1003 [1993]; Koncelik v Abady, 179 AD2d 942, 944 [1992]). Moreover, Judiciary Law § 487 sets forth a civil cause of action that may be established by, among other things, an attorney's intent to deceive (see Amalfitano v Rosenberg, 12 NY3d 8, 14 [2009]; Scarborough v Napoli, Kaiser & Bern, LLP, 63 AD3d 1531, 1533 [2009]; Singer v Whitman & Ransom, 83 AD2d 862, 863 [1981]).

Here, Neroni's actions were directed at a judgment of Supreme Court of which he was fully aware and had, in fact, participated in constructing the terms thereof. He was present and representing decedent at the time the terms of the pertinent stipulation were placed on the record and he was involved in the stipulation being incorporated into the judgment of divorce. The stipulation was neither ambiguous nor unenforceable. It clearly provided that decedent would keep the two parcels during his life, but that such parcels would ultimately pass to his five children [FN1]. Plaintiffs presented proof, including a detailed affidavit from Mokay, establishing that, despite his obvious knowledge of the stipulation, Neroni suggested to decedent shortly after the divorce various schemes to attempt to circumvent the transfer and, when decedent elected one of those schemes, Neroni prepared the documents he had advised would successfully accomplish the nefarious goal. The documents were executed and Neroni had them recorded in a fashion aimed at avoiding publication of the transactions. This proof was sufficient to meet plaintiffs' threshold burden and Neroni failed to contest these basic underlying facts. Accordingly, Supreme Court properly granted plaintiffs' motion for partial summary judgment. "

Plaintiff sells meat, made loans to a restaurant and its owner.  It was partially repaid, over many years by the restaurant, which added a payment to the meat bills.  All things end, and the owner of the meat company died; then the restaurant went under.  Meat company went to the attorneys and asked them to start a suit.  We see the outcome in Empire Purveyors, Inc. v. Brief Justice Carmen & Kleiman LLP, ; Supreme Court, New York County, NY Slip Op 2009  32752.

This case alleges that one of the attorneys lied to the client for years, and claimed that an action had been commenced, when none had actually been started.  "Plaintiffs contend that Cook misled them about work done on the matter by falsely representing that a lawsuit was commenced against Weinberg, a judgment obtained and that collection efforts were underway.  In a companion law suit [with the same parties] plaintiffs allege that the attorney converted funds returned from their landlord, and violated Judiciary Law 487.

To what extent can plaintiff's subsequent attorney be disqualified, and to what extent may plaintiff's communications with subsequent counsel be discovered?  In this case, to no extent. 

Defendants seek discovery on what the attorney tried to do to fix the problems of missing documents, to ameliorate the consequences of defendant's alleged misconduct, the failure to obtain written acknowledgment of the restaurant's indebtedness and the litigation strategy.

Justice Solomon of Supreme Court, New York County  determined that the party seeking disqualification "bears the burden of showing the taint or unfairness arising from the lawyer's testimony in this Case, that the attorney is likely to be called as a witness and that the testimony is necessary."

More to the point, the testimony about communications must be relevant to this lawsuit (it must be "at issue"), under Jakobleff v. Cerrato, Sweeney and Cohn, 97 Ad2d 834 (3d Dept, 1983),  Here, Justice Solomon determined that it was not 'at issue."

Plaintiff retains attorney to handle promissory note case, and a default judgment is obtained.  Defendant owns real property, yet no lis pendens is filed.  Is this legal malpractice?  In Ali v Fink
2009 NY Slip Op 08766 ;Decided on November 24, 2009 ; Appellate Division, Second Department  we see the following:
"Several months later, the defendant commenced a second action on the plaintiff's behalf, seeking to set aside a transfer of real property which the debtor had allegedly made to impede the plaintiff's ability to recover under the promissory notes (hereinafter the fraudulent conveyance action). Although the defendant obtained a default judgment against the debtor and the transferee in the fraudulent conveyance action, while that action was pending, title to the property was transferred twice more. The plaintiff subsequently commenced this legal malpractice action against the defendant, alleging, inter alia, that he had negligently failed to file a notice of pendency upon commencement of the fraudulent conveyance action, and that his failure to do so had allowed title to the subject property to be transferred to bona fide purchasers, thus effectively putting the property out of reach as a means of enforcing her judgment in the collection action."

"Contrary to the defendant's contention, the Supreme Court properly concluded that he failed to sustain his prima facie burden of demonstrating that the plaintiff would be unable to prove one of the essential elements of her malpractice cause of action. Although the defendant contends that the plaintiff cannot establish the element of causation because she could not have prevailed on the merits in the underlying collection and fraudulent conveyance actions, neither of the default judgments have been set aside. Under these circumstances, the Supreme Court correctly determined that the plaintiff need not prove that she would have prevailed on the merits in those actions in order to establish the element of causation. "

When do divorce, crime and legal malpractice intertwine?  In this case, at the intersection of divorce and fighting ex's  In short, plaintiff had a child with GF, and they were separating, and at the same time arguing over custody and support.  GF charges plaintiff with child abuse, and a series of investigations start.  Attorney represents plaintiff and helps settle the custody/support issues, and gets a [shaky?] written agreement that GF will not testify against plaintiff.  What happens then?  We see the story in Boykin v. Campbell, NY Slip Op 32721(U). Supreme Court, Nassau, Judge Adams.

For his part, plaintiff gives GF half of a Florida house as tenants in common.  As you might guess, the deal unravels, probably after the criminal and abuse charges were dismissed.  What does one do after the deal works to plaintiff's benefit, where plaintiff successfully ends the criminal and abuse problems and is prepared to walk away from the litigation?  One sues the attorney.

Eventually this legal malpractice action is dismissed on the grounds that there is no showing [in summary judgment] that the attorney departed from good and accepted practice.  Of interest is the court;s last paragraph in which it opines that the stipulation of settlement of the custody/support case itself is valid...although we do not understand the relevance to the legal malpractice case.

The decision doesn't tell us in what capacity the attorneys represented the client, but they are now in suit over legal fees, with a legal malpractice counterclaim.  As we read this case, we wondered whether the time and effort was worth it.  Will there ever be a collection of fees?

in Bender, Jenson & Silverstein, LLP v Walter ;  2009 NY Slip Op 08572 ;Decided on November 17, 2009 ;Appellate Division, Second Department  the attorney is seeking fees.  Defendant-counterclaimant asked the court to "assign counsel", a sure sign that the client has few funds. The Court declined, and the Appellate Division determined that "on the Court's own motion, the appeal from the first order dated June 6, 2008, is dismissed, on the ground that no appeal lies as of right from an order that does not affect a substantial right of the appealing party (see CPLR 5701[a][2][v]), and we decline to grant leave to appeal."  Next, the court looked at plaintiff's claim that she could not afford photocopies.
 

The balance of the decision covers a frequent situation in pro-se representation; getting tangled up in discovery problems.  "The plaintiff sought to recover its fee for legal services provided to the defendant, who asserted counterclaims sounding in legal malpractice. In response to the plaintiff's requests for the production of documents, the defendant claimed to be without financial resources to photocopy the requested documents and refused to produce them, in spite of the plaintiff's offer to bear the cost of photocopying. [*2]

Since the defendant failed to establish that she made any effort to comply with the plaintiff's repeated discovery requests, the Supreme Court properly considered her lack of cooperation to be willful and contumacious, and properly conditionally granted the plaintiff's motion to preclude her from introducing the requested documents in evidence (see Kihl v Pfeffer, 94 NY2d 118; D'Aloisi v City of New York, 7 AD3d 750; Brooks v City of New York, 6 AD3d 565; Donovan v City of New York, 239 AD2d 461; cf. Scardino v Town of Babylon, 248 AD2d 371).

In light of the defendant's noncompliance with discovery, the Supreme Court properly denied her motion to quash certain subpoenas which had been served on nonparty witnesses
 

Almost as popular as attorney fee cases are defenses of legal malpractice.  Here, in Sieratzki v Sei Global, Inc., NY Slip Op 32656(u), all the basics are laid out.  Attorney represents client for a longish period of time, and substitutes into an Arbitration entitled  HL Group Partners, LLC v. Sei Global, Inc  He worked on the case for a while, He did some other work, in three other matters, including a holdover proceeding.  The general picture [one conjectures[  is that of a failing NY business, which is having landlord problems, is being sued by a trader, and is not paying its bills.  What happens to the attorney? 

He sends his bills, and when they are not paid, asks the arbitrator to be relieved as attorney.  The decision indicates that the reasons set forth were lack of communication and non-payment of legal fees.  Mr. Sohn told the arbitrator that he would continue pro-se and the attorney ws relieved.

Was this enough?  In this case, bills were sent on a monthly basis and ignored.  Fee arbitration, set forth in the retainer agreement was for sums greater than $ 50,000. 

The court held that attorney correctly withdrew from arbitration, and that the counterclaim for legal malpractice was completely conclusory, with "not a single fact' included.

Decision:  summary judgment to plaintiff for fees.  Effect?  We guess that it may be too little and too late to collect fees from this corporation. 

It does not happen often, but non-lawyers sometimes come to represent clients.  An impostor?  A simple clerical mistake?  We don't know how it happened in this case, but in Natural Organics Inc. v Anderson Kill & Olick, P.C. ;2009 NY Slip Op 08472 ;Decided on November 17, 2009 ;Appellate Division, First Department "Plaintiff alleged that it retained defendant law firm to
bring an action against an insurance company. After several years of litigation, plaintiff agreed to settle the matter for $750,000, which was less than the $1.3 million claimed value of the lawsuit. Several years after the settlement, the law firm informed plaintiff that Brian Valery, who had held himself out as an attorney and worked on plaintiff's case, was in fact not licensed to practice law. Plaintiff then brought this action, alleging it would have obtained a more favorable result in the insurance litigation if the firm had exercised more care with regard to Valery's employment. The complaint sought damages for the difference between the purported $1.3 million value of plaintiff's insurance claim and the $750,000 settlement amount, as well as all of the legal fees billed by the law firm for the entire matter. "

"That part of the breach of contract cause of action alleging a breach of professional standards and seeking damages for the alleged shortfall from the settlement and all of plaintiff's legal fees is dismissed as duplicative of the malpractice claim (see Rivas v Raymond Schwartzberg & Assoc., PLLC, 52 AD3d 401 [2008]). However, to the extent that plaintiff's [*2]breach of contract claim rests on the fees it paid for Valery's services, plaintiff has pleaded sufficient facts to state a claim. The complaint alleges that the law firm continuously held out Valery as a licensed attorney and billed in excess of $70,000 for his services, even though it is undisputed that he was, in fact, not an attorney. At this early stage of the proceedings, it cannot be said that these particular damages are too speculative (see Fielding v Kupferman, 65 AD3d 437, 442 [2009]).

Monique Pillard, president of Elite Models, is the plaintiff in this legal malpractice case,  She was a defendant in a highly significant employment discrimination case revolving around an asthmatic worker who was fired, and the harassment and smoking that took place all around her.

in Pillard v. Goodman, Supreme Court, New York County, we see one of Justice Lehner's opinions.  Pillard was at one time president of Elite, and then moved around by John Casablancas to another position. Victoria Gallegos was hired as a liaison between Elite and its clients.  After complaining about smoke, she was filed in 1999.  Pillard was one of several defendants in the employment discrimination and eventually received an award of $ 2.6 million in compensatory damages and $ 2.6 million in punitive damages.  The awards were later reduced, but remained substantial.

Pillard was forced into voluntary bankruptcy under Chapter 11, but the crux of this case is whether the attorneys for all the Elite Defendants committed legal malpractice with regard to the smallest defendant in the group.  Supreme Court has determined that the claims survive a motion to dismiss the complaint under CPLR 3211(a)(7).

Pillard's claim arises from the dense relationship between the attorneys, the company, the board, and the individual defendants. Pillard alleges that attorney Curtin was both her private attorney as well as attorney for Elite, and failed to advise Pillard that asthma was a disability under the Human Rights law and that accommodations had to be made for Gallegos.

More to the point, Pillard alleges multiple conflicts of interest and a wrongful joint representation, failed to offer crucial documents and failed to demonstrate that Pillard was no longer the president of Elite at the time.

Justice Lehner dismissed certain of the causes of action, but the case continues.

There are some basic rules in legal malpractice litigation about fees.  One of these rules is that an attorney may be terminated at any time by the client, either for cause or without cause.  A corollary rule is that when an attorney is terminated for cause, he is due no compensation. 

That's a pretty stark rule, and admits of little wiggle room.  Nevertheless, in Felix v. Law Office of Thomas F. Liotti, 8395/07;Decided: October 28, 2009; Justice Ute Wolff Lally;NASSAU COUNTY
Supreme Court found a middle path.

"It has already been determined by the order of Justice Diamond dated June 30, 2008 that defendant failed to file a CPL 440 motion as promised in the retainer. Further, in said decision Justice Diamond stated that "the letters attached to defendant's motion to reargue as exhibits that were allegedly received from plaintiff do not indicate plaintiff's consent to ignore the filing of the CPL 440 motion that defendant was retained to prepare and submit to the court."

Plaintiff further claims that defendant failed to file the Nassau County appeal provided for in the Retainer Agreement. Defendant asserts that the Nassau County brief was filed before discharge and submits a copy of the brief showing a date of January 23, 2006 (Exh. F). However, said brief was not served upon the Nassau County District Attorney's office until March 1, 2006 and caused the District Attorney to cross-move the Appellate Division, 2nd Dept. for an order striking said brief as "filed by an attorney who does not represent defendant" (Exh. 7).

Plaintiff seeks a refund of $20,000.00 (see complaint, Exh. 5) arguing that defendant forfeited his entire fee due to his discharge for cause.

At trial plaintiff requested treble damages pursuant to Judiciary Law §487 claiming that defendant deceived this court and committed perjury in claiming to have filed a CPL 440 motion and thus forcing the court (Diamond, J.) to order the Kings County Supreme Court file (People v. Felix, No. 9425/98) and conduct an inspection of same and thereafter making a determination that plaintiff was correct in stating that no CPL 440 motion was filed by defendant. Since plaintiff failed to make such a demand in his pleadings the request is denied as untimely.

Based upon the testimony of plaintiff and defendant and the exhibits the court finds that defendant was discharged for cause on February 8, 2006, and that defendant attempted to file the Nassau County brief on March 1, 2006, although dated January 23, 2006, thirty-five days after discharge.

A client has the absolute right to discharge an attorney at any time with or without cause (Campagnola v. Mulholland, Minion & Roe, 76 NY2d 38; Byrne v. Leblond, 25 AD3D 640).

Where the discharge is without cause, the attorney is limited to recovering in quantum meruit the reasonable value of the services he rendered. However, if the discharge is for cause the attorney has no right to compensation, notwithstanding a retainer agreement (Cheng v. Modansky Leasing Co., Inc., 73 NY2d 454; Teichner v. W & J Holsteins, Inc., 64 NY2d 977; Crowley v. Wolf, 281 NY 59; In the Matter of Terijon Weitling, 266 NY 184).

Here the retainer agreement was for a flat fee. Notably, it specifically stated in paragraph 2: "It is understood that we are not entering into an hourly rate contract, and will not bill on such basis."

Although an attorney discharged for cause is not entitled to any fees, here plaintiff requested in his discharge notice that "all unearned funds be refunded to Rufina Felix promptly (Exh. 2).

Consequently, since the fee agreement had provided for a flat fee of $20,000.00 for two Appellate briefs and one CPL 440 motion, and defendant performed work for only one brief, plaintiff is entitled to a refund of two-thirds of said $20,000.00, to wit $13,333.34."

New York traveled through a sea change in its attorney disciplinary and ethical rules when the new rules were enacted in April.  Prior to the change, DR 2-107 did not require that a client be notified of the "percentage split" of fees between multiple attorneys working on a case; only the fact of multiple attorneys and fee sharing was required.

Now, the NY rules require that a percentage fee split be disclosed to the client under section 1.5[g][2] of the Rules.  As based upon this interpretation, Justice Goodman of Supreme Court, New York County has decided Lapidus & Associates, LLP v, Elizabeth Street Inc. we wee a result.  Plaintiff attorney seeks $90,000 in fees, and defendants have put up several defenses to the claim, with their own counterclaim of $ 175,000 for overbilling.

Clients are in a tough spot when the attorney sends out regular bills, and the client does not vociferously dispute the bills.  Of course, when the litigation is ongoing, and the client needs representation; when the bills are mostly ok, and there is a percentage of overbilling, the client has to decide what to do.  Does it fire the attorney and pay new counsel to pick up ?  Does it bite the bullet?  Does it find a middle course>

Here, client loses almost all around.  It makes an argument that the attorneys were wrongfully sharing fees;  it loses under the old rules, although the court implies that the result would be different for work performed today.  The Client loses on account stated, which is well described in this decision.

Legal malpractice plaintiffs who are suing for representation in a divorce action are routinely placed between a rock and a hard place, when asked at the settlement of their divorce action whether they are satisfied with attorney's representation.  They are told to say 'yes" and often do, simply to end the torture.  This simple "yes" can negate the issue of whether they were "effectively compelled to settle" the case.

In Harvey v. Greenberg we see the ultimate negative outcome to plaintiff.  Plaintiff's theory (as is almost aways true) is that attorney's mistakes were not clear to the non-attorney client, and were not evident until explained by successor attorney, hence, how could client be held to a "satisfied" standard?

"According to the First Department, a "claim for legal malpractice is viable, despite settlement of the underlying action, if it is alleged that settlement of the action was effectively compelled by the mistakes of counsel" (Bernstein v. Oppenheim & Co., P.C., 160 AD2d 428, 429-430 [1st Dept 1990]) (emphasis added). However, the First Department also makes clear that an allocution at settlement wherein the client states that she is satisfied with the attorney's performance constitutes documentary evidence that contradicts an allegation of legal malpractice (Katebi v. Fink, 51 AD3d 424, 425 [1st Dept 2008], citing Bernstein [holding that while a "'claim for legal malpractice is viable, despite settlement of the underlying action if it is alleged that settlement of the action was effectively compelled by the mistakes of counsel,' here, the complaint is contradicted by the evidentiary material submitted on the motion to dismiss"]). In Katebi, the plaintiff/client settled the matrimonial action during trial, and the plaintiff's allocution took place on the record. The Court granted defendants' motion to dismiss the complaint for failure to state a cause of action for legal malpractice, on the following grounds:

Plaintiff testified that she did not wish to proceed with the trial of the matrimonial action, that she decided instead to enter into the stipulation of settlement because she wanted no further connection with her husband, that she understood that by settling the action before the completion of the trial she was foregoing the right to pursue the funds allegedly dissipated by him, and that she was satisfied with the services provided by her attorney . (Id. at 425)

Similarly, in dismissing another plaintiff's legal malpractice case, the Court in Weissman v. Kessler, 2008 WL 6920033 [Sup Ct, NY County 2008]) noted that the plaintiff "allocuted that she was satisfied with her counsel and that no one forced her to settle…. Defendants have demonstrated that the documentary evidence conclusively establishes that [plaintiff's legal malpractice claims] should be dismissed."])."

Corporate clients assign causes of action between themselves on a fairly regular basis.  Often, for purely economic reasons, in mergers, and in other corporate maneuverings, a cause of action will become one of many assets to be exchanged.  Here, in NEW FALLS CORP.,  v. EDWARD N. LERNER,No. 08-4991-cv;UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT;2009 U.S. App. LEXIS 24627;November 10, 2009, Decided it was not permitted, since this 2d Circuit case was decided under California substantive law.
 

"New Falls brought this diversity action alleging [*2] that Lerner committed legal malpractice by failing to perfect an attachment of real estate. Lerner committed the alleged malpractice while representing another entity, Stornawaye Capital, LLC, in an action to enforce a loan. Id. at 283-84. Stornawaye assigned its rights in the loan enforcement action to New Falls, and New Falls subsequently brought this claim for legal malpractice as Stornawaye's successor.

"Reviewing the District Court's grant of summary judgment de novo, Sassaman v. Gamache, 566 F.3d 307, 312 (2d Cir. 2009), we affirm the District Court's clear and thoughtful order. Stornawaye and New Falls unequivocally agreed that California law "determined" their "rights and obligations" under the assignment contract. New Falls, 579 F. Supp. 2d at 286. As a result, the "rights" that New Falls acquired in the assignment could not have included a right to bring malpractice claims, which is a right that cannot be assigned under California law. As the District Court aptly put it, "[b]ecause any attempt to assign a legal malpractice claim by a contract governed by California law is rendered void on the basis of California's emphatic public policy prohibiting the assignment of legal malpractice claims, Stornaware's [*4] attempt to transfer its legal malpractice claim against Lerner to New Falls was ineffective as a matter of law." Id. at 288. New Falls, therefore, may not assert Stornawaye's rights in this malpractice action, and the District Court correctly granted summary judgment for Lerner."
 

Yesterday we discussed medical treatment liens and when an attorney might become liable to pay them, even though the attorney did not deduct from the settlement proceeds when making the distribution.

Today, Joel Stashenko in the NYLJ reports passage of a bill to eliminate "double dipping" by public employees in the disability area.  Specifically, "The bill, contained in a mandate relief measure put on the Legislature's special session agenda Tuesday by Governor David A. Paterson, eliminates a quirk in state law that has allowed public employees injured due to employer negligence who successfully sue for loss of future wages to get those payments plus whatever disability benefits workers qualify for."

While this is of interest to public employees who are injured, there is a much wide application and interest that this bill addresses.  The entire area of lien recovery, of attorney representation in post-verdict (or settlement) lien resolution, and equitable subrogation is in flux, and this bill simply adds to the mix.

"Another compromise was a provision that eliminates subrogation in medical malpractice suits that litigators have complained has made it more difficult to reach settlements.

The legislation prohibits insurers, except in a few narrow exceptions, from seeking from either plaintiffs or defendants to recoup insurers' coverage costs if a settlement has been reached in a malpractice case.

"The parties can freely settle a tort suit without being concerned that the disability provider is going to go after those monies," Mr. Schwartz said.

Mr. Cardozo said the provision would effectively undo the Court of Appeals' ruling in Fasso v. Doerr, 12 NY3d 80, in which the Court ruled that an insurer's equitable subrogation rights could not be extinguished without the insurer's consent in the settlement of a personal injury action (NYLJ, Feb. 25, 2009)."

Personal injury law requires doctors, doctor reports, doctor testimony and medical treatment of the plaintiff-clients.  Clients rarely have the means to pay for medical treatment after an injury, yet need it.  Because of this need a system has developed in which plaintiff-clients go to medical providers, who provide medical treatment and file a "doctor's lien." 

The lien is supposed to work like this:  client sues for the personal injury and if they win, the medical treatment is part of the damages, and then the attorney is supposed to pay off the lien.  Good?  Sure, but what happens when the case is settled 5 years later, and the file is a little confused, and the lien does not get paid?  What happens is that the attorney deducts his fee, the client gets the rest, and then years later, the doctor comes to the attorney for payment.  Naturally, the attorney does not want to pay the client's medical costs from his own pocket, and litigation ensues.

Here in Complete Management Inc. v. Bader, 112683/08; Decided: October 13, 2009; Justice Emily Jane Goodman , Supreme Court, New York County we see one outcome:

"On April 25, 2005, AR Synergy LLC (ARS), an escrow and collection agent for CMI, mailed listings of reported open liens to Defendants to begin the collection of the outstanding GMMS receivables. Id., ¶23. A spreadsheet listing such liens or GMMS receivables is annexed as "Exhibit B" to the complaint. CMI alleges that, in the ensuing months following the mailing, ARS received no cooperation from Defendants, who have failed to make "subsequent payments of any owed GMMS Receivables to ARS or CMI." Id., ¶24. CMI brings this action against Defendants for "refusing to remit proceeds of liens owed to Plaintiff, or to provide Plaintiff with a more detailed accounting of the status of many of Defendants' [personal injury] cases."
 

"In Leon v. Martinez (193 AD2d 788 [2d Dept 1993]), the defendant attorney who drafted and notarized a document that gave plaintiffs a lien on the proceeds of his client's personal injury action was sued by the plaintiffs, after he disbursed proceeds from the settlement of the action to his client in disregard of the lien or assignment. The trial court granted the attorney's CPLR 3211 motion to dismiss, reasoning that his preparation of the document did not create a personal liability on his part. The Appellate Division reversed, and held that "[w]here attorneys have notice of an assignment or [sic] a portion of their client's claim for personal injuries and pay out money in disregard of the assignment, they may be liable to the assignees." Id. at 789 (citations omitted). The appellate court's decision was affirmed by the Court of Appeals. Leon, 84 NY2d 83, supra (Court concluded that there were sufficient allegations in plaintiff's complaint and supporting affidavit to withstand the motion to dismiss); see also Stanger, D.C., P.C. v. Panzella, 13 Misc 3d 130(A), 2006 NY Slip Op 51842(U) (App Term, 1st Dept 2006) (affirming small claim court's award of damages to plaintiff chiropractor because, in disregard of assignment, defendant attorney failed to make direct payment of medical fees to plaintiff upon attorney's receipt of client's personal injury action settlement proceeds); Williamsburg South Medical v. Maloney, NYLJ, Feb. 10, 2003, at 20, col 6 (Civ Ct, NY County 2003) (court denied defendant lawyer's motion to dismiss plaintiff doctor's claims based on breach of contract and breach of fiduciary duty, because complaint contained sufficient facts to support allegation that defendant failed to pay plaintiff with funds from settlement proceeds in which plaintiff has a lien).

In the instant case, the complaint alleges that Defendants knew of the liens in favor of CMI-GMMS, but disregarded such liens by refusing to remit to CMI the settlement or judgment proceeds of their clients. Complaint, ¶¶41-43, 47-52, 58-59. The supporting affidavit submitted by CMI's agent, Ray Rowney, Jr., also stated, inter alia, that Defendants knew of these liens because (1) they compensated CMI on some of the liens over a period of eight years; (2) CMI communicated with Defendants about payment of the liens and status of the personal injury cases for a 10-year period; and (3) CMI sent the executed lien documents to Defendants. Rowney Affidavit, ¶¶11-12; Exhibit 3. This court may "freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint." Leon, 84 NY2d at 88."

Any place there are disputes over anything, legal malpractice questions lurk.  One is reminded of the New Yorker cartoon in which a 4 year old has dropped his ice cream cone, only to have an adult ask if he needs an attorney.

in a far more serious vein, here is a legal malpractice case arising from return and reimbursement of Nazi confiscated artworks.  Eventually one attorney represented a massive family tree of descendants, all of whom had some claim on a vast trove of artwork which was boxed up and ready to leave Germany in 1939, only to be intercepted by the Nazis and taken away.

In THEKLA NORDWIND and GRETA HOERMAN,  - v.- DAVID J. ROWLAND and ROWLAND & ASSOCIATES we look back to WWII.  ,Clara and Gustav Kirstein lived in Leipzig, Germany with their two daughters, Gabrielle and Marianna, in the 1930s. They were "a close Jewish family of means." Gustav, who was a renowned art publisher and art collector, died in 1934, leaving a life estate in all of his assets to his wife Clara and the remainder to Marianna and Gabrielle in equal shares.

Before his death, Gustav had experienced the beginnings of Nazi persecution when his business was subjected to a forced sale. Faced with the continuing rise of Nazi power, Clara sent her two daughters [*4] to the United States after Gustav's death. Clara, intending to emigrate to the United States after her daughters, remained in Germany to "sell whatever she could of her remaining artwork and business" and to "ship the balance of her artwork and other personal property to . . . New York, where she planned to join [her family]." On June 29, 1939, however, the Nazis confiscated Clara's passport and denied her permission to leave Germany. That night, Clara returned to her home in Leipzig and committed suicide. Thereafter, the Nazis confiscated her assets (the "Kirstein Assets"), which included "the artwork and other property that had been packed for shipment to . . . the United States."

In September of 1998, the Nordwind Parties, who are nieces and nephews of Clara Kirstein, became aware of the possibility that they may be entitled to recover restitution for the Kirstein Assets. After conducting research on the Internet, the Nordwind Parties retained defendant Rowland [*7] on October 1, 1998, to "file a claim . . . to the Kirstein Assets and to maximize [their] recovery on the claim to the extent possible." 

"At no point did Rowland inform the Nordwind Parties of any potential conflicts of interests arising from his representation of persons who might hold interests adverse to the Nordwind Parties. Rowland did inform the Nordwind Parties, however, that "[b]oth Miriam Reitz [Baer] . . . and Christel Gauger have indicated that they may wish to assign their rights to Clar[a] Kirstein's nieces and nephews[, i.e., the Nordwind Parties,] at some time in the future." Rowland had also informed the Nordwind Parties that "only heirs are eligible to file claims under the [German Property Act], a prerequisite status to the assertion of a claim [*9] to the JCC Goodwill Fund." Although it is disputed whether Rowland received oral consent from the Nordwind Parties to contact Gauger and offer his services, it is undisputed that Rowland never obtained a written waiver from them to do so."

"On December 22, 1998, Rowland filed a restitution claim with the JCC Goodwill Fund on behalf of only Miriam Baer and Gauger as heirs to the Kirstein Assets. The following year, on December 3, 1999, Miriam Baer and the Oriental Institute assigned their interests in the Kirstein Assets to the Nordwind Parties. Gauger, however, refused to assign her interests in the Kirstein Assets to the Nordwind Parties."

"The Nordwind Parties also argue that the District Court erred in dismissing their breach of fiduciary duty claim as duplicative of their legal malpractice [*28] claim. We disagree because we conclude, as did the District Court, that the breach of fiduciary duty claim that plaintiffs combined in the first cause of action with their legal malpractice claim must be dismissed as duplicative of the malpractice claim.

HN8Under New York law, where a claim for breach of fiduciary duty is "premised on the same facts and seeking the identical relief" as a claim for legal malpractice, the claim for fiduciary duty "is redundant and should be dismissed." Weil, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 10 A.D.3d 267, 780 N.Y.S.2d 593, 596 (App. Div. 2004). However, if the remedy sought by the plaintiffs "is a restitutionary one to prevent the fiduciary's unjust enrichment," the "less stringent 'substantial factor' standard" would apply to the causation element of the claim for breach of fiduciary duty. See LNC Invs., Inc. v. First Fidelity Bank, N.A. N.J., 173 F.3d 454, 465 (2d Cir. 1999) (Sotomayor, J.); see also, e.g., RSL Commc'ns PLC v. Bildirici, F. Supp. 2d , 2009 U.S. Dist. LEXIS 72691, 2009 WL 2524614, at 23 n.15 (S.D.N.Y. 2009). Otherwise, "where damages are sought for breach of fiduciary duty under New York law, the plaintiff must demonstrate that the defendant's [*29] conduct proximately caused injury in order to establish liability." LNC Invs., Inc., 173 F.3d at 465; cf. Achtman, 464 F.3d at 337 (requiring proximate-causation standard to establish legal malpractice claim)."

One of the paradoxes of the legal malpractice world is the number of pro-se plaintiffs.  While there are some pro-se defendants [both top-tier and totally uninsured], pro-se plaintiffs are often present.  Here, in Walter v Jones, Sledzik, Garneau & Nardone, LLP ;  2009 NY Slip Op 08003 ;  Decided on November 4, 2009 ; Appellate Division, Second Department we see a pro-se plaintiff who sues the law firm, only to fail at the very begining of the case.
 

"The plaintiff did not effect proper service of process upon the defendant, since she failed to deliver the summons, or cause it to be delivered, to an individual who was authorized to accept service on behalf of the defendant (see Hossain v Fab Cab Corp., 57 AD3d 484, 485; Kurshan v Townhouse Mgmt. Co., 223 AD2d 402). The defendant moved pursuant to CPLR 3211(a)(8) to dismiss the complaint for lack of personal jurisdiction. The plaintiff failed to oppose that motion, and the Supreme [*2]Court granted it upon her default.

Thereafter, the plaintiff moved, in effect, to vacate her default. The Supreme Court properly denied her motion. A party seeking to vacate an order entered on his or her default must establish both a reasonable excuse for the default and a meritorious cause of action (see Matter of Jones v Stewart, 63 AD3d 836, 836; Aguilera v Pistilli Constr. & Dev. Corp., 63 AD3d 765, 768; Zherka v Zherka, 17 AD3d 668, 668). Contrary to the plaintiff's contention, neither the fact that she was proceeding pro se, nor her belief that the defendant's motion was frivolous and, therefore, that opposition was unnecessary, constituted a reasonable excuse for her default (see Kanat v Ochsner, 301 AD2d 456, 458). " A litigant appearing pro se acquires no greater right than any other litigant and such appearance may not be used to deprive defendants of the same rights enjoyed by other defendants'" (Roundtree v Singh, 143 AD2d 995, 996, quoting Morgan v Sylvester, 125 F Supp 380, 388, affd 220 F2d 758, cert denied 350 US 867). Accordingly, the Supreme Court providently exercised its discretion in denying the plaintiff's motion, in effect, to vacate her default. "

Cohen v Engoron, 2009 Slip Op 32521 is a fascinating look at the lower end of legal malpractice litigation.  In this case, plaintiff is an incarcerated inmate who tried to sue his attorney for the return of $ 8500 in legal fees.  While being incarcerated was painful for plaintiff, his attorney suffered a worse fate, dying about three months before the summons and complaint.

Everyone in this case has a bad outcome to consider.  Plaintiff, who had the time to litigate this matter, and some significant motivation to move forward, determined that an estate existed, and successfully served the voluntary administrator.  The estate hired an attorney who had a NY address, but apparently practiced out of North Carolina. 

The attorney attempts to have the case dismissed in Supreme Court, and Justice Kapnick denies his motions, then transfers the case pursuant to CPLR 325(d).  While in Civil Court, the estate wins an appeal dismissing the case, as the death preceded the summons.  As far as the estate goes, this seems to be the end.

However, while in Civil Court, plaintiff succeeds in an order which finds that the attorney may not practice in NY since he lacks an office for the practice of law in NY.  This leads to the current Article 78 against the Civil Court Judge, which fails in this decision.

Topless photographs, sexual harassment, "heavy-handed" negotiations, emotional distress to highly pregnant women - it all seems to be out of a TV show.  Nevertheless, these are the elements of Abrams v. Pacile, Supreme Court, New York County, Justice Tolub.  In this decision, printed in the NYLJ today, and soon to be on the Court's website, we see brothers in the financial industry, their workers, their wives, topless photos on the honeymoon, entrustment of the photos to assistants for printing at Duane Reede, and the fallout in dueling suits.  By the way, how could a guy send his assistant out with topless photos of his wife, and ask her to go to Duane Reede to get prints made?  Was he expecting his assistant or the clerk there to make them?  What reaction did he expect?

This blog is devoted to attorney behavior and legal malpractice, so we will detour there.

"Claims Against Mr. Wigdor and TWG

Under New York law, attorneys are afforded immunity where their conduct arises out of the professional representation of their clients.

There is a general principle embodied in the law of the State of New York that attorneys should be free to advise their clients without fear of liability [to] third parties. However, the mere fact one is an attorney acting in a professional capacity does not make him absolutely immune from responsibility for his wrongful acts.

An attorney may be held personally liable to a third party who sustains an injury in consequence of his wrongful act of improper exercise of authority, where the attorney has been guilty of fraud, collusion or of a malicious or tortious act.

Beatie v. DeLong,164 AD2d 104, 108 [1st Dept 1990].

Here, Plaintiff has not sufficiently alleged, let alone submitted any evidence, that Mr. Wigdor or his firm acted with either malice or bad faith or that they colluded with Danielle and Cristina in some illegal manner. The "settlement" negotiations of May 2008, as heavy handed as they were, provide no basis for a recovery. Indeed, there is nothing to indicate from the Plaintiff herself that she was ever aware of the letters Mr. Wigdor sent. In the absence of fraud, collusion, malice or bad faith, Mr. Wigdor and TWG are immunized from liability under the shield afforded attorneys in advising their clients, even when such advice is erroneous. The Complaint as to Mr. Wigdor and TWG is dismissed(id.)."

"Rule 1.16(a)(1) provides:

(A) A lawyer shall not accept employment of behalf of a person if the lawyer knows or reasonably should know that such person wishes to:

(1) bring a legal action, conduct a defense, or assert a position in a matter, or otherwise have steps taken for such person, merely for the purpose of harassing or maliciously injuring any person;

It is clear to the Court that the Complaint as to Ms. Culicea and Mr. Wigdor has no basis in law and fact and could only have been brought to harass Ms. Culicea and the Wigdor law firm. As such, counsel's actions are sanctionable."

Dismissals are not always dismissals on the merits, and dissolved corporations are not always unable to sue in New York.  In this legal malpractice case, we see the intersection of Chapter 11, Tax Law 203-a, CPLR 205(a) and Res judicata.

In Moran Enters., Inc. v Hurst ;  2009 NY Slip Op 07807 ;  Decided on October 27, 2009 ;  Appellate Division, Second Department plaintiff corporation had several brushes with Bankruptcy.
"The plaintiff, Moran Enterprises, Inc. (hereinafter MEI), was incorporated in New York in January 1996. On or before August 15, 2000, MEI retained attorney Margaret Hurst to represent it in certain matters, including filing a Chapter 11 petition for bankruptcy on its behalf. In November 2000, Hurst left active practice and transferred her clients to another attorney. On December 27, 2000, MEI was dissolved by the Secretary of State pursuant to Tax Law § 203-a for failure to pay franchise taxes. On July [*2]23, 2001, MEI retained attorney Heath Berger and the law firm Steinberg, Fineo, Berger & Fischoff, P.C. (then known as Steinberg, Fineo, Berger & Barone, P.C.) (hereinafter together the Berger defendants) to file another Chapter 11 bankruptcy petition on its behalf."

"The Supreme Court erred in dismissing the complaint pursuant to CPLR 3211(a)(5). The principle of res judicata bars relitigation of claims where a judgment on the merits exists from a prior action between the same parties involving the same subject matter (see Matter of Hunter, 4 NY3d 260, 269). Dismissal of the prior action insofar as asserted by MEI was upheld by this Court on the ground that MEI failed to appear by an attorney as required by CPLR 321(a) (see Moran v Hurst, 32 AD3d 909). Such was not a determination on the merits and thus res judicata does not apply to bar commencement of another action based on the same transactions (see Sclafani v Story Book Homes, 294 AD2d 559; Matter of Farkas v New York State Dept. of Civ. Serv., 114 AD2d 563). Moreover, since the issue of MEI's capacity to commence an action was not determined on appeal, collateral estoppel does not bar relitigation of that issue (see Tydings v Greenfield, Stein & Senior, LLP, 11 NY3d 195, 200; Sabbatini v Galati, 43 AD3d 1136; Bergstol v Town of Monroe, 305 AD2d 348). Further, this action was timely commenced pursuant to CPLR 205(a). Contrary to the Berger defendants' contention, the prior action was commenced by MEI within the meaning of CPLR 205(a), despite its dismissal for MEI's failure to appear by an attorney "

"Pursuant to Tax Law § 203-a, the Secretary of State may dissolve a corporation by proclamation for the nonpayment of franchise taxes. Upon dissolution, the corporation's legal existence terminates (see Lorisa Capital Corp. v Gallo, 119 AD2d 99, 109). A dissolved corporation is prohibited from carrying on new business (see Business Corporation Law § 1005[a][1]) and does not enjoy the right to bring suit in the courts of this state, except in the limited respects specifically permitted by statute (see Vantrel Enters. v Vantage Petroleum Corp., 270 AD2d 412; De George v Yusko, 169 AD2d 865; [*3]Lorisa Capital Corp. v Gallo, 119 AD2d 99, 110-111). "

Attorneys regularly drop in and out of cases, and for the most part, there is no particular notice taken of the event.  Here, in Soussis v Lazer, Aptheker, Rosella & Yedid, P.C. ; 2009 NY Slip Op 07823 ; Decided on October 27, 2009 ; Appellate Division, Second Department  we see a wholly different result.  In Soussis,  Plaintiff hired the target defendants to arbitrate over unpaid commissions, which are said to have arisen from employment discrimination.  Target attorneys did not raise the discrimination claim.  Benjamin Vinar to sue the attorneys; at the same time he stepped in and settled the arbitration case targets had started.  In turn, target attorneys bring a third-party action against Vinar.  Vinar does not succeed on summary judgment, and is held in the case for a portion of the third party claims.

"The plaintiff retained the defendant law firm, Lazer, Aptheker, Rosella & Yedid, P.C. (hereinafter the Lazer firm), in connection with her claims for unpaid commissions and unreimbursed expenses, alleging employment discrimination against her former employer, Stephens, Inc. (hereinafter Stephens), a member of the New York Stock Exchange.""It is undisputed that Goidell failed to bring a federal or state action against Stephens on the plaintiff's behalf before the statute of limitations applicable to the employment discrimination claim expired. The plaintiff retained the third-party defendant Benjamin Vinar to commence the instant action against the Lazer firm, Goidell, and two partners in the firm, David Lazer and Ralph A. Rosella, to recover damages for legal malpractice. While represented by Vinar, the plaintiff settled her arbitration claims against Stephens."

"Subsequently, the Lazer firm, David Lazer, and Rosella (hereinafter together the Lazer defendants) impleaded Vinar, asserting claims for contribution and/or indemnification. They alleged that [*2]Vinar was negligent in settling the plaintiff's arbitration claims. Specifically, they alleged that Vinar was negligent in failing to seek leave to amend the plaintiff's statement of claim in the arbitration proceeding to add the employment discrimination claim. They also alleged that Vinar was negligent in failing to seek reformation of the National Association of Securities Dealers, Inc., Form U-5 (hereinafter the U-5), provided by the plaintiff's employer to remove an allegedly false or defamatory statement contained therein regarding the reason for the termination of her employment. "

"The Supreme Court properly denied that branch of Vinar's motion which was for summary judgment dismissing so much of the third-party complaint as asserted claims for contribution and indemnification. Contrary to Vinar's contention, the Lazer defendants are entitled to seek contribution or indemnification from him, as a subsequently retained attorney, to the extent his alleged negligence in settling the plaintiff's arbitration claims may have contributed to or aggravated her injuries (see Schauer v Joyce, 54 NY2d 1, 3-6; Alfaro v Schwartz, 233 AD2d 281, 281-282; Herkrath v Gaffin & Mayo, 192 AD2d 487, 488).

Furthermore, in opposition to Vinar's prima facie showing on the issue of his failure to seek reformation of the U-5, the plaintiff's deposition testimony and the Lazer defendants' expert affidavit were sufficient to raise a triable issue of fact as to whether Vinar was negligent in failing to seek reformation and, if so, whether the plaintiff suffered a greater loss of future earnings than she would have had the U-5 been reformed to remove the damaging information regarding the reason for her termination from Stephens.

Plaintiff and a buddy go to attorney to start a business.  Attorney is retained, and eventually Plaintiff is the odd-person out.  Attorney's retainer agreement names only the buddy, and even though attorney sends letters to both Plaintiff and buddy, and creates documents which plaintiff and buddy sign, it is Buddy who comes out with 75% of the business.  Is there a breach of fiduciary duty, and if so, what is the statute of limitations, 3 years or 6?

Some answers are found in Schlissel v Subramanian ;2009 NY Slip Op 52188(U) ; Decided on October 26, 2009 ; Supreme Court, Kings County ; Demarest, J.   As to Breach of Fiduciary Duty:
 

""In order to establish a breach of fiduciary duty, a plaintiff must prove the existence of a fiduciary relationship, misconduct by the defendant, and damages that were directly caused by the defendant's misconduct" (Kurtzman v Bergstol, 40 AD3d 588, 590 [2d Dept 2007]).

"An attorney stands in a fiduciary relation to the client" (Graubard Mollen Dannett & Horowitz v Moskovitz, 86 NY2d 112, 118 [1995]). As a fiduciary, an attorney "is charged with a high degree of undivided loyalty to his [or her] client" (Matter of Kelly v Greason, 23 NY2d 368, 375 [1968]). "In this case, plaintiff alleges that Van Epps was her attorney, that he unilaterally advanced Wasan's interests over those of plaintiff, that he prepared certain corporate documents for the purpose of diluting and diminishing plaintiff's interest in T & T, and that he concealed material information from plaintiff concerning the adverse contents of these documents (Stark Affirmation in support of the Cross Motion, Ex. 2, Proposed Amended Complaint, ¶¶ 46-47). In opposition, Van Epps contends that he was not plaintiff's attorney and that, in any event, his representation of her had ended by the time she signed the corporate documents.

There is no set of rigid rules that must be followed to form an attorney-client relationship (see McLenithan v McLenithan, 273 AD2d 757, 758 [3d Dept 2000]). It may exist without an explicit retainer agreement or payment of fee (see Tropp v Lumer, 23 AD3d 550, 551 [2d Dept 2005]). "Rather, to establish an attorney-client relationship there must be an explicit undertaking to perform a specific task. In determining the existence of an attorney-client relationship, a court must look to the actions of the parties to ascertain the existence of such a relationship," (id., at 551 [internal quotation marks and citations omitted]) [*8]bearing in mind that plaintiff's unilateral belief does not confer upon her the status of defendant's client (see Volpe v Canfield, 237 AD2d 282, 283 [2d Dept 1997], lv denied 90 NY2d 802 [1997]). "

"Ultimately, the evidence as to the alleged existence of an attorney-client relationship between plaintiff and defendant Van Epps is inconclusive, depends on a fact-finder's [*11]assessment of the parties' credibility, and thus is outside the scope of the court's review on a motion to dismiss. Assuming the truth of her affidavits, plaintiff sufficiently alleges that Van Epps represented conflicting interests at the time plaintiff signed the corporate documents (see Shumsky, 96 NY2d at 168). Plaintiff thus adequately alleges the first element of her breach of fiduciary duty claim — the existence of a fiduciary relationship. Furthermore, having alleged misconduct by defendant by his alleged simultaneous representation of adverse interests, and damages directly caused by his misconduct (Proposed Amended Complaint, ¶¶ 47-50), plaintiff adequately pleads the other two elements of her claim. Defendant's motion seeking dismissal of the breach of a fiduciary duty cause of action pursuant to CPLR 3211(a) (7) is denied. Defendant's motion pursuant to CPLR 3211 (a) (1) is also denied inasmuch as defendant's affidavit and the documents attached thereto do not definitively and "conclusively establish[ ] a defense to the asserted action as a matter of law" (Leon, 84 NY2d at 88); the documentary evidence merely raises numerous issues of fact, rather than finally dispose of them (see Bernstein v Oppenheim & Co., P.C., 160 AD2d 428, 435 [1st Dept 1990]). "

"Defendant contends that plaintiff's claims against him are in the nature of professional malpractice and, therefore, are barred by the three-year statute of limitations of CPLR 214 (6), which is applicable to legal malpractice actions. Defendant asserts that by formulating her proposed amended complaint using language such as fraud and breach of fiduciary duty, plaintiff is attempting to circumvent the three-year limitations period applicable to legal malpractice claims pursuant to CPLR 214 (6) regardless of whether the underlying theory is based in contract or tort. However, as discussed, plaintiff adequately pleads a distinct cause of action for fraud against Van Epps which goes beyond ordinary malpractice (see Simcuski v Saeli, 44 NY2d 442, 453 [1978][finding that an independent cause of action for fraud against a professional may be established when exposure to liability "is not based on errors of professional judgment, but is predicated on proof of the commission of an intentional tort, in this instance, fraud"]; see also Mitschele v Schultz, 36 AD3d 249 [1st Dept 2006]). Defendant's malpractice argument fails, as the gravamen of plaintiff's suit is fraud. The motion to dismiss the action is therefore denied. "

Matrimonial legal malpractice is typically all about the money - and the money is usually about equitable distribution.  Money, or having to give it to someone else drives people insane.  in this case it apparently drove the husband to solicit the murder of his wife.  Luckily, the plan fizzled, and ended in divorce and equitable distribution instead.  After settlement of the divorce case, husband sued his attorney.  He lost in summary judgment, in an instructive decision. 

In Pascarella v Goldberg, Cohn & Richter, LLP ; 2009 NY Slip Op 52193(U) ;Decided on October 23, 2009 ; Supreme Court, Kings County ; Hinds-Radix, J. we see how the court works its way through plaintiff's claims.  "On December 15, 2003, on the eve of trial on the ancillary issues in the matrimonial action, the parties entered into a stipulation of settlement (the settlement) which was placed on the record in open court before Justice Yancey. The settlement fixed Susan's equitable distribution award at $400,000 and required that plaintiff pay it to her in lump sum by March 1, 2004.[FN15] In connection with the settlement, plaintiff testified under oath before Justice Yancey that (1) he heard and understood the terms of the settlement as it was placed on the record; (2) he discussed its terms with his lawyer (Mr. Goldberg), had enough time [*4]to speak with his lawyer about it, and required no additional time; (3) he was satisfied with the services of his lawyer; (4) he was not forced, threatened, or coerced to enter into the settlement; (5) the terms of the settlement were acceptable to him; and (6) he promised to live by its terms.
 

"Plaintiff's first charge of malpractice is that Goldberg was negligent in failing to seek discovery from Susan concerning her non-marital property. The court notes that plaintiff and Susan were married from July 28, 1984 until September 1, 2001, when plaintiff abandoned the marital home, and thus were together for 17 years.[FN24] Yet, plaintiff has never claimed in any of his numerous affidavits filed in this action or in the matrimonial action that Susan had any non-marital property. Nor has plaintiff submitted to the court Susan's Statement of Proposed Disposition, which was to indicate if she had any separate property. There is not one iota of evidence that suggests that Susan had any separate property. To the contrary, the gravamen of plaintiff's legal malpractice claim is that plaintiff overpaid Susan because he used his own separate property, and not because Susan already had too much on account of her own separate property. Without some evidence of actual, ascertainable damages flowing from Goldberg's alleged failure to conduct discovery, this branch of plaintiff's legal malpractice claim fails (see Luniewski, 188 AD2d at 643).

"Plaintiff's second charge that the settlement was coerced or fair has no merit. As stated, the matrimonial action was scheduled for trial on the equitable distribution issue when the parties entered into a settlement of $400,000, which was higher than plaintiff's counter-offer of $300,000 and lower than Susan's initial offer of $450,000. Plaintiff took the stand where he was allocuted on the settlement. He testified that he understood the settlement, wanted to accept it, and was satisfied with Goldberg's services as his counsel. Plaintiff's allegations in support of his claim that the settlement was a product of coercion or duress are inherently incredible and flatly contradicted by documentary evidence, including (1) the minutes of Justice Yancey's careful and thorough allocution of plaintiff, during which he showed no sign that he was compelled to enter into the settlement, and (2) his "Affidavit of Appearance and Adoption of Oral Stipulation," in which he acknowledged that the terms of the settlement were fully explained to and understood by him, and that he consented to its terms voluntarily and with advice of counsel (see Kinberg v Kinberg, 50 AD3d 512, 513 [1st Dept 2008]).

"As a matter of policy, cases once settled should not be readily re-litigated as to their merits before another judge, where the original party has been released and the plaintiff's original attorney has become the defendant. "Under those circumstances, the burden must be on the plaintiff seeking such a recovery to demonstrate by evidence rather than by conclusory allegations, that he indeed suffered substantial financial loss because of misdeeds by his attorneys and not by second guessing as to their judgment" (Becker v Julien, Blitz & Schlesinger, P.C., 95 Misc 2d 64, 68 [Sup Ct, New York County 1977], modified on other grounds 66 AD2d 674 [1st Dept 1978], appeal dismissed 47 NY2d 705 and 761 [1979], lv dismissed 47 NY2d 800 [1979]). "

LOK PRAKASHAN, LTD.  -v.- RALPH A. BERMAN, DAVIDOFF MALITO & HUTCHER, LLP,
No. 09-0136-cv; UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT;2009 U.S. App. LEXIS 22988 is an example of the Court's continued romance with the concept that litigation is an art and not a science.

What is a question of judgment? " "A complaint that essentially alleges either an 'error of judgment' or a 'selection of one among several reasonable courses of action' fails to state a claim for malpractice." Id.

The District Court concluded that "[b]ecause there is ample evidence in the record that Defendants' omission of the specified document was a conscious and reasonable decision regarding trial strategy, not negligence, and the omission of the document was not the proximate cause of any loss, Plaintiff has failed to show the elements required to support a claim of legal malpractice." [*4] Order of November 1, 2005. We agree and, substantially for the reasons stated by the District Court in its well-reasoned orders of November 1, 2005 and December 12, 2008, find plaintiff's arguments to be without merit."
 

Way back when, there were different statute of limitation in legal malpractice cases which sounded in either tort [3 years] or contract [6 years].  The Court of Appeals approved, and it was the law of the land.  As is its power, the legislature then passed CPLR 214(6) which created a single 3 year statute of limitations for legal malpractice actions, whether sounding in tort or contract. 

With enterprising attorneys, and strange damage situations, this was not the end of the question.  Can there be a cause of action for breach of contract between a client and an attorney?  The short answer is yes.  As an example, were the attorney to contract to write an appeal, and no appeal was written, that would be a breach of contract.  Damages would be limited to traditional contract damages:  payments made but not earned, and perhaps the additional cost of cover [paying someone else a higher fee to do the work.]

Here, in Lambroza v. Tworney, Latham, Shea, Kelly, Dubin & Quartararo, 2009 NY Slip Op 32333(U) we see a slightly different fact pattern.  Plaintiff alleges that he hired defendant attorney to provide legal services in the purchase of real property in the Hamptons.  Plaintiff alleges that defendant was to compare the survey of the Property and the existing deed and look for differences. 

Some 6 years later differences arise, an encroachment existed, and plaintiff had to drop his sale price by $ 50,000 to cover the problem.  Is the attorney liable for breach of contract, since the statute of limitations for legal malpractice has long passed?

The answer in this case is no, as Justice Solomon was unpersuaded that this was really a contract action and not a traditional legal malpractice case. She determined that comparison of a deed to the survey is within the normal realm of legal services and was not the basis of a real contract.  Accordingly, case dismissed on statute of limitations.

In General Credit Corp v. Guidice 2009 NY Slip Op 32418(U), Supreme Court, New York County, Decided 10/15/09, Justice Kornreich, we one reason that the public has less than stellar views of attorneys.  Here, evidence was produced to show that one attorney wrested control of the corporation and caused it to enter into adverse financial transactions that benefited the attorney, prepared agreements to give that attorney control of the board, obtained loans from a captive entity controlled by the attorney at interest rates above 20%, seized control of all the bank accounts, changed the locks in the office, fired the staff, interfered with its banking relationships and drove the company to file bankruptcy.

The case ended in a judgment of about $ 864,000 along with punitive damages (10x compensatory damages) in the amount of $ 1.5 million and additional punitive damages of $ 850,000 against others of the attorneys.

When is it the attorney's fault, and when the Client's ?  That question is answered, in this particular situation, by the decision in Bernard v/ Proskauer Rose LLP.

Client is an extraordinarily accomplished real estate transactionalist.  In 1994 he joined the Trust Company of the West, as a portfolio manager for certain real estate investment funds.  He and others left TCW to create Oaktree Capital Management LLC which managed funds catering to high net-worth investors. 

During his time there, he earned a lot of money, and had more than $ 51 million owed to him in back end incentive fees and other fees.  Nevertheless, he wanted to leave and form his own company, and so he hired Proskauer.

Even though plaintiff knew that he had to hang around Oaktree for 120 days after giving notice of resignation, he asked his secretary to copy lists of investors and to put his quarterly investment letters onto a computer disk for him.  Furthermore, there were some questions about a diverted opportunity called 60 Main Street property.

In the end, he was expelled, and lost all.  He lost the 60 Main Street Property, and lost his back incentive fees.  His fault or Proskauer's ?  Arbitration of the underlying case ensued and plaintiff lost.

Justice Lowe determined that it was not Proskauer's fault, and dismissed.  He too, determined that the arbitrator had already determined the issues, and that plaintiff loses.  However, it was not due to collateral estoppel and res judicata, It was due, instead, to the court's determination that plaintiff had breached his fiduciary duty to Oaktree, and that the breach preceded and had nothing to do with Proskauer's advice.

Jousting with the landlord over rent stabilized apartments is a uniquely NYC type of activity. Violations of the rent-stabilization laws may lead to treble damages, and tenants routinely litigate over the actual v. statutory rent, whether there has been an illegal rent increase, and over violations.

Here, in Kyle v. Heiberger, NY Slip Op 32409(u) we see how the process can linger and sometimes go off the rails.  Tenant was successful, and eventually obtained a $ 21,000 or so judgment against the landlord in litigation that lasted from 2002 - 2007.  That litigation and the legal malpractice case it spawned reached New York and Bronx Counties, took place in L &  Court, included two Article 78 cases, and ended up in Supreme Court, Bronx County where the legal malpractice case was recently dismissed.

The legal malpractice case is against Ronald Hart who represented plaintiff from 2002-2007.  The gist of this case is that he won the L & T case after much procedural wrangling, and sought attorney fees from the landlords, as plaintiff was permitted.  Those legal fees were said to be in the vicinity of $ 426,000.  Eventually the landlord agreed to pay $ 190,000 which ended the dispute with a stipulation.  Shortly thereafter, tenant started its attempts to vacate the stipulation.

The theory against the attorney was that he settled the case and then withdrew in favor of successor attorney, and breached his fiduciary duty.  Defendant Heiberger & Associates PC is a later successor attorney and is now a defendant.

The breach of fiduciary duty claim was dismissed by Supreme Court, on the basis that no damages could be demonstrated, and that when a breach of fiduciary duty claim is based upon the legal malpractice [rather than, for example, a disgorgement of fees for overbiling], then one must demonstrate the "but for" aspect of legal malpractice. Citing Kurtzman v. Bergstol, 40 AD3d 588 (2d Dept,2007) the court held:  In order to establish a breach of fiduciary duty, a plaintiff must prove the existence of a fiduciary relationship, misconduct by the defendant, and damages that were directly caused by the defendant's misconduct."

Izko Sportswear Co., Inc. v Flaum ; 2009 NY Slip Op 04387 [63 AD3d 687] ; June 2, 2009 ; Appellate Division, Second Department  is a somewhat famous case in Legal Malpractice.  In earlier decisions, the Appellate Division determined that plaintiff stated a cause of action in Judiciary Law 487.  Now, the case has ended with a dismissal;   The Court of Appeals then denied leave to appeal.  Two lessons are to be learned here:
 

1.  Violation of Judiciary Law 487 may be demonstrated either by deceit or by chronic extreme pattern of delinquency; and

2.  Judicial determinations of attorney fees act as collateral estoppel to a later legal malpractice or Judiciary Law 487 determination.

Reviewing the findings of the Appellate Division, we see:

"A violation of Judiciary Law § 487 may be established "either by the defendant's alleged deceit or by an alleged chronic, extreme pattern of legal delinquency by the defendant" (emphasis supplied) (Knecht v Tusa, 15 AD3d 626, 627 [2005]; see O'Connell v Kerson, 291 AD2d 386, 387 [2002]; see also Bridges v 725 Riverside Dr., 119 AD2d 789 [1986]; Trepel v Dippold,2005 WL 1107010, 2005 US Dist LEXIS 8541 [May 9, 2005]). "

Now the AD affirms the dismissal of the case:  "On a prior appeal, this Court found that the plaintiffs stated a cause of action pursuant to Judiciary Law § 487, against the defendants, who were the former bankruptcy attorneys for the plaintiff Izko Sportswear Co., Inc. (hereinafter Izko). The plaintiffs alleged in the complaint that the defendants concealed their relationship with Heartland Rental Properties Partnership (hereinafter Heartland), who was Izko's primary creditor, and also denied having a relationship with any of Izko's creditors (see Izko Sportswear Co., Inc. v Flaum, 25 AD3d 534 [2006]). In so doing, this Court noted that on a motion to dismiss pursuant to CPLR 3211 (a) (7), the plaintiffs' allegations must be accepted as true, and "whether the defendants would be entitled to summary judgment" was not an issue (see Izko Sportswear Co., Inc. v Flaum, 25 AD3d 534, 537 [2006]).

After discovery, the defendants moved for summary judgment dismissing the complaint based upon evidence which established, as a matter of law, that the plaintiffs were not [*2]deceived, and that the plaintiffs learned of the defendants' representation of Heartland on March 3, 2000, at the latest. In opposition, the plaintiffs failed to raise a triable issue of fact.

Thus, the revelation of the defendants' representation of Heartland occurred prior to May 31, 2000, when the Bankruptcy Court approved of a stipulation with respect to the amount of fees payable by Izko to the defendants. Accordingly, the plaintiffs' claim pursuant to Judiciary Law § 487 based upon the defendants' prior representation of Heartland is barred by the doctrines of collateral estoppel and res judicata, as the plaintiffs had a full and fair opportunity to raise the issue before the Bankruptcy Court (see generally Lefkowitz v Schulte, Roth & Zabel, 279 AD2d 457 [2001]).

The folks over at Attorney.org recently contacted me about an interview for their website. If you don't know who they are, check them out.  . In addition to legal news, they also highlight noteworthy attorneys from around the country. One of their upcoming features is a highlight of local Attorney Generals and District Attorneys. They interviewed me for an article about how to decide if you need a Legal Malpractice Attorney and whether or not you have a case. You can view the article here: Attorney.org
 

A prime worry for the legal malpractice practitioner, on either side of the aisle, is whether there is legal malpractice insurance.  For the defendant, it is paramount; for the plaintiff it is significant.  Much thought has gone into how to determine whether the target defendant has adequate [or indeed, any] insurance, and planning has to go into the target's application for insurance."

One prime weapon that the insurer has is the "prior acts" doctrine.  It says in essence that you must report all past prior acts that one might reasonably believe could lead to a law suit for legal malpractice, whether it has been started or not.  We remember one managing attorney who shouted at least once a week: "Put the Carrier on Notice!"  Sometimes he was right.

Here, in Executive Risk Indemnity v, Pepper Hamilton, LLP, we see Justice Jone's decision on this issue:

"We are asked to determine, under Pennsylvania law, whether excess insurers Executive Risk Indemnity Inc. and Twin City Fire Insurance Company, based upon their prior knowledge exclusions, and Continental Casualty Company, based upon rescission of its policies, were entitled to summary judgment declaring that they have no obligation to indemnify defendants Pepper Hamilton LLP and one of its members W. Roderick GagnÉ (collectively, the law firm defendants) in actions asserted against them for, among other claims, professional malpractice."

"Executive Risk commenced this action against the law firm defendants and Westport, seeking a declaration that it had no obligation to indemnify defendants in the underlying actions. The law firm defendants counterclaimed for a declaration in their favor and brought third-party claims against Twin City and Continental Casualty. Executive Risk and Twin City relied upon Westport's prior knowledge exclusion, expressly incorporated into their policies, and Continental Casualty cross-claimed for rescission of its excess policies for 2002-[*4]2003 and 2003-2004. "

"Here, it is undisputed that the law firm defendants knew of SFC's securities fraud months prior to the effective dates of the Executive Risk and Twin City policies. The courts below noted that GagnÉ subjectively believed, and informed Mr. Wilcox at least one month prior to the submission of one of the law firm's insurance applications, that he and the law firm could be subject to a lawsuit from their representation of SFC. Such a belief, although subjective, was also reasonable, but Pepper Hamilton did not provide that information to its insurers. Given the law firm defendants' role in the securitization of the loans and GagnÉ's close involvement with SFC, a reasonable attorney with the law firm defendants' knowledge should have anticipated the [*5]possibility of a lawsuit, particularly when millions of dollars may have been lost from activities of which they were aware. Here, the law firm's knowledge of its client's fraudulent payments prior to its application for excess coverage coupled with the fact that a reasonable attorney would have concluded that the law firm defendants would likely be included in the litigation because of their role in their client's business satisfy the test of Coregis and create an obligation for the law firm to inform its insurers of this potential litigation.

Contrary to the Appellate Division's holding, the prior knowledge exclusion in this case does not require the known of act, error, omission or circumstance to be "wrongful conduct on the part of the insured" (Executive Risk Indem. Inc. v Pepper Hamilton LLP, 56 AD3d 196, 204 [1st Dept]). It excludes coverage of "any act, error, omission, circumstance . . . occurring prior to the effective date of the [policy] if any [insured] at the effective date knew or could have reasonably foreseen that such act, error, omission, circumstance . . . might be the basis of a [claim]." Here, on October 27, 2002, the effective date of the Executive Risk and Twin City policies, the law firm defendants knew of acts that occurred prior to that date, which they could have foreseen to be the basis of a claim. Thus, the prior knowledge exclusions apply to those policies.
 

In    PETER GIANOUKAS, DORIS GIANOUKAS and NICHOLAS TARSIA, Plaintiffs, - against - PETER CAMPITIELLO, ESQ., LEVY & BOONSHOFT P.C., DAVID M. LEVY, ESQ., STEPHEN BOONSHOFT, ESQ. and EAST WEST ACQUISITIONS, LLC, Defendants.;09 Civ. 1266 (PAC);UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 95354;October 13, 2009   we see the outer reaches of a breach of fiduciary duty and of legal malpractice in a well written and reasoned decision by Judge Paul Crotty of Southern District of New York. The facts and allegations are simple:

"The Amended Complaint alleges five separate fraudulent transactions: (1) Codine(x), (id. PP 41-68); (2) Pay Pad, (id. PP 69-87); (3) LIMPE, (id. PP 88-106); (4) Acellus, (id. PP 107-16); [*3] and (5) UTTI, (id. PP 117-34). Throughout the Amended Complaint, Campitiello is portrayed as the architect of the fraudulent transactions which bilked Plaintiffs out of in excess of $ 400,000. He did this as an employee of L&B, and used L&B's escrow account to receive funds from the Plaintiffs and thereafter funds were disbursed from the account to consummate the fraud. The Amended Complaint does not allege that Levy and Boonshoft were involved in, or knew of, the fraud"

"According to the Amended Complaint, the L&B escrow account is an "interest on lawyer account," also known as an "IOLA" account. (Am. Compl. PP 10-11); see N.Y. JUD. LAW § 497. Plaintiffs contend that Levy and Boonshoft owed them a fiduciary duty as escrow agents and as "signatories on the defendant law firm IOLA account."  "Next, Plaintiffs claim that Levy and Boonshoft are liable for breach of fiduciary duty as "signatories" on the L&B IOLA account. An IOLA account "is a creation of New York State statute, and is defined as 'an unsegregated interest-bearing deposit account … for the deposit by an attorney of qualified funds.'"

"Plaintiffs argue that lawyers "who accept funds from persons [*11] in escrow or make a decision to have funds in the firm IOLA accounts are fiduciaries to such persons with respect to those funds." (Pls.' Opp'n at 10.) The Amended Complaint does not, however, allege that Levy and Boonshoft agreed to accept funds from the Plaintiffs or that they were involved in the decision to have the Plaintiffs transfer funds to the L&B IOLA account. Nor does the Amended Complaint allege that Levy and Boonshoft misappropriated or commingled Plaintiffs' funds; it is Campitiello who allegedly misappropriated the Plaintiffs' money."
 

"Most importantly, "[w]hatver may be the constraints imposed by the Code of Professional Responsibility with the associated sanctions of professional discipline . . . [New York] courts have not recognized any liability of the lawyer to third parties . . . [for violations of disciplinary [*12] rules] where the factual situations have not fallen within one of the acknowledged categories of tort or contract liability." Drago v. Buonagurio, 386 N.E.2d 821, 46 N.Y.2d 778, 779-80, 413 N.Y.S.2d 910 (N.Y. 1978). Plaintiffs do not contend that they had an attorney-client relationship with Levy or Boonshoft. (Pls.'s Opp'n at 3.) As shown above, Levy and Boonshoft were not the Plaintiffs' escrow agents. Thus, to the extent Plaintiffs rely on DR 9-102 as the basis for their breach of fiduciary duty claim, the claim fails because "an alleged violation of a disciplinary rule 'does not, without more, generate a cause of action.'

In Santiago v Fellows, Epstein & Hymowitz, P.C. ; 2009 NY Slip Op 07393 ; Decided on October 13, 2009 ;Appellate Division, Second Department we see a rather stark and short decision from the Appellate Division after dueling summary judgment motions are decided in defendant's favor.  There is not a lot of factual background, but plaintiff aparently thought that a $1 million offer was made, and defendant denied that any offer was made.  If no offer was made, then how can there be malpractice?
 

From the decision:  "In support of that branch of their cross motion which was for summary judgment, the defendants established, prima facie, that during their representation of the plaintiff in the underlying action, Selective Insurance Company (hereinafter Selective), the insurer of two of the four defendants in the underlying action, did not offer to settle the matter on behalf of its insureds for the $1,000,000 policy limit. The defendants submitted an affidavit from the individual defendant Robert L. Fellows, who categorically denied that Selective ever made a $1,000,000 settlement offer to the defendants or to the plaintiff during [*2]the defendants' representation of the plaintiff. Rather, he explained that by letter dated August 6, 2002, from Selective to Travelers Insurance Company (hereinafter Travelers), the insurer of one of the defendants in the underlying action, Selective "tendered its $1 million single limit policy to Travelers. Selective requested that Travelers assume the handling and defense of the action. On August 15, 2002, a mere nine days after Selective's letter tender to Travelers of its policy limits, Selective retracted the tender." According to Fellows, it was not until June 2003 that the plaintiff directed him to settle the underlying action with Selective for a total sum of $1,000,000. However, Selective never made such an offer, and thus, Fellows could not possibly have acted on the plaintiff's behalf to settle the case, and his failure to do so cannot be deemed malpractice."

In Pu v. Mitsopoulos, Supreme Court, New York County recalls what every CLE program tells its audience:  Fee suits invite legal malpractice counterclaims.  Invariably, the suing attorney says that the counterclaim has no merit, and that it is sour grapes, and motivated solely by a deadbeat who refuses to pay wholly justified legal fees for work well done.

Here, the situation seems just a little different.  Plaintiff represented defendants when a franchisor sued the defendant-pharmacist over unpaid royalties.  Defendant, who became educated through the litigation, arbitration, appeals and other proceedings, says that the franchisor never had the right to sue in NY courts; it was a foreign corporation doing business in NY and had not paid taxes.  Under Business Corporation Law section 1312, a foreign corporation which conducts business in the state without authority cannot maintain an action in the state, and any action initiated by that corporation must be dismissed.

So, reasons defendant, a simple motion to dismiss would have succeeded, and a debt of $ 231,000 would not have turned into a total debt of $ 1,2 Million.  Who is right?

Justice Feinman, for the Court, found that defendant's counterclaims have merit, and has allowed the case to go forward. 

In Acosta v. Falick & RochmanPLATZER, FALLICK & STERNHEIM, LLP, 05 Civ. 8254 (KTD)UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; 2009 U.S. Dist. LEXIS 70878 we see a case brought pro-se and "in forma pauperis against his former lawyer, Barry M. Fallick, and his former lawyer's firm, Rochman, Platzer, Fallick & Sternheim, LLP (collectively, "Defendants"). Acosta seeks the return of legal fees paid to Defendants plus other incidental costs arising out of Defendants' representation of him in a criminal matter." 

There, Judge Duffy "satisfied myself of both the guilt of the defendant and that the plea was being made voluntarily by a person who knew exactly what his rights were and knew exactly what he was doing. Indeed I remember thinking about the arguments that must have been raised by defense counsel in bargaining with the government, and I still marvel at the wonderful result defense counsel obtained for his client. The government had originally charged Acosta with dealing in narcotics--a charge reduced by the bargain to use of a "communication facility" in connection with drug dealing. I knew that Acosta, as a police officer, would face a tough time in prison, but believed that he was not exempt from jail time. On January 9, 2001, I sentenced him to forty-eight months' imprisonment, two years' supervised release, and charged the mandatory $ 100 special assessment."

Apparently there was no diversity jurisdiction, so plaintiff " alleges violations of 41 U.S.C. § 37 and 28 U.S.C. § 1927, but neither of these statutes provide a legal basis for his claims. First, 41 U.S.C. § 37 authorizes the Comptroller General of the United States to distribute to certain government agencies lists of persons who have breached public contracts. See 41 U.S.C. § 37. The fee agreement in this case is not a public contract, so it is not covered under the statute. Further, the statute does not authorize a private right of action or money damages at all."
"However, Plaintiff's complaint in this case, broadly construed, alleges only facts most closely resembling state law breach of contract and legal malpractice claims over which this Court does not have subject matter jurisdiction. As Defendants point out, complete diversity is lacking and Plaintiff does not claim more than $ 75,000 in damages, so 28 U.S.C. § 1332(a) cannot provide a basis for jurisdiction. Therefore, as Acosta's complaint lacks any basis in law and is consequently frivolous under 28 U.S.C. 1915 (e) (2) (B) (i), I must dismiss it."
 

Different result in State Court?

X is sued by defendants.  He loses at trial using target attorneys.  He hires new attorneys, mediates, settles, and assigns his rights to a legal malpractice action against his former [target] attorneys to plaintiff, who now sues target attorneys in the place of X.  Is there still any confidentiality to the mediation asks the target attorney?

Yes, there is, says Judge Bernstein of US Bankruptcy Court, SDNY in In re: TELIGENT, INC., Reorganized Debtor. SAVAGE & ASSOCIATES, P.C., as the Unsecured Claims Estate Representative for and on behalf of TELIGENT, INC., et al., Plaintiff, -- against -- ALEX MANDL, Defendant.

Chapter 11, Case No. 01-12974 (SMB), Adv. Proc. No. 03-2523; UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; 2009 Bankr. LEXIS 3037; 
September 24, 2009

"Non-party K&L Gates LLP ("K&L") formerly represented the defendant Alex Mandl. The parties engaged in unsuccessful pre-trial mediation, and following trial, the Court entered a judgment in excess of $ 12 million against Mandl and in favor of the plaintiff, Savage & Associates, P.C. ("Savage"), the Unsecured Claims Representative for and on behalf of Teligent, Inc. ("Teligent"). After the entry of [*2] judgment, Mandl discharged K&L, participated in a second round of mediation with new counsel, and eventually settled with Savage. As part of the settlement, Mandl assigned to Savage a portion of the proceeds derived from his legal malpractice claim against K&L. As contemplated by the settlement, Mandl sued K&L for legal malpractice in the District of Columbia (the "DC Action").

K&L contends that it needs the documents and communications generated during the two mediations to defend itself in the DC Action. (Memorandum of Points and Authorities in Support of [K&L's] Motion to Lift Mediation Confidentiality Restrictions, dated March 5, 2009 (the "Motion"))(ECF Doc. # 227.) 1 Toward that end, it has moved for relief from the confidentiality provisions contained in this Court's General Order M-143, dated Jan. 17, 1995 ("General Mediation Order") and the specific mediation order entered in this case.

K&L offers several reasons why the Mediations communications and the mediator's testimony "may be relevant." First, they may shed light on the issues of causation, mitigation, and damages, and in particular, why Mandl settled at the price he did rather than pursue his post-trial motions or an appeal. (See id., at 13-14.) K&L speculates that Mandl may have settled without regard to his actual exposure, which GT had estimated to be $ 3.19 million, (id., at 14-15), or because Savage threatened Mandl with criminal and tax-related liability. (Id., at 15.) Moreover, Savage discontinued the fraudulent conveyance action against Susan Mandl and ASM without extracting a separate payment from either defendant. The release of his wife and affiliate may have affected Mandl's decision to settle at a higher number than his potential exposure. (Id., at 15-16.)

Second, the Mediations communications may be relevant to Mandl's damages. The parties valued the Settlement at $ 16 million (i.e., the Agreed Valuation), but the amount of consideration that Mandl committed to pay, aside from half of the net proceeds of the DC Action, was far [*12] less. (Id., at 16-17.) The mediator's report stated that he was "not aware of any reason why that amount is not a reasonable approximation of the value of the settlement," and Savage asserted at the time that she sought judicial approval of the Settlement that the Settlement would include a claim of $ 16 million against K&L. (Id., at 16-17.) Lastly, Mandl responded to an interrogatory that the Agreed Valuation was based on the probabilities assigned by each party to the outcome of the post-trial motions, and K&L's failure to exercise due diligence in discovering important evidence that surfaced after the trial. (Id., at 17.)

Third, K&L contends that the Proceeds Assignment is invalid, and suggests that the Mediations communications may be relevant in establishing that the assignment was improper. (Id., at 18-19.)
 

K&L has plainly failed to meet its burden. Although the Mediations communications may be relevant to some of the issues in the DC Action, K&L has not explained satisfactorily why they are critically needed. Mandl has not charged K&L with committing malpractice in connection with the 2004 Mediation, and K&L did not participate in the 2008 Mediation. Hence, K&L's conduct during the Mediations is not material to the malpractice [*21] claim."
 

We reported on this case back on5/14/07 and again on 9/19/08.  Today, the NYLJ reports that the Morelli law firm's attempt to garner disbursements from plaintiff has failed.

From the decision of Justice Goodman:  "The following illustrates why members of the public may hold cynical views about the legal profession. This motion seeks to renew and reargue denial of a motion to restore a counterclaim for disbursements from defendants' former client. Granted to the extent of considering the present submission; but on reargument the motion is denied.
 

A legal malpractice action against Benedict P. Morelli & Associates, P.C. (Defendants/Movants) of plaintiff resulted from the representation of plaintiff in a medical malpractice action. In that medical malpractice action, which was dismissed as untimely, Victoria Kremen (Plaintiff/Client) claimed that certain doctors and hospitals misdiagnosed her as having breast cancer, when she did not; the result was an unnecessary bi-lateral mastectomy. (Kremen v. Brower, Index No. 112829/01, Joan B. Carey, Sup Ct NY County 2001, affd, Kremen v. Brower, 16 AD3d 156 [1st Dept 2005]). This Court's denial of summary judgment to defendants in the ensuing legal malpractice action which was based on the prior case being dismissed on statute of limitations grounds, was reversed (in connection with a time calculation of Plaintiffs' filing bankruptcy) and the legal malpractice action was dismissed (Kremen v. Benedict P. Morelli & Assoc. P.C., 54 AD3d 596 [1st Dept 2008]).

In the legal malpractice action defendants had argued, inter alia, that there had been no merit to the medical malpractice case in the first instance, even though they had clearly undertaken the engagement of representing plaintiffs, which suggests that they must have or should have believed it was a meritorious action. Defendants then took the uncommon step in the legal malpractice action, of asserting a counterclaim for disbursements allegedly incurred in the medical malpractice action. However, the law firm submitted to this Court no support whatsoever for the motion to restore their unusual counterclaim."

Now, for the first time, and in violation of motion practice parameters concerning reargument under CPLR 2221, defendants submit a copy of the retainer agreement which was drafted by them and was in their possession when they originally made the motion hereunder. Aside from that impropriety, and despite being an experienced tort firm active in the field of personal injury, defendants obviously are not familiar with the terms of their own retainer agreement.

Hinshaw reports an interesting South Carolina case in which plaintiff is estopped from a legal malpractice case against his attorney, on the basis that he is a wrongdoer, and one in in pari delicto may not recover civil liability.

From the Hinshaw alert:  "Plaintiff William Whiteheart sued his former law firm, Waller & Stewart, for malpractice. Whiteheart’s claim was based on multiple instances in which Waller & Stewart facilitated Whiteheart’s wrongdoing. For example, Waller & Stewart reviewed a per se defamatory letter that Whiteheart wrote about one of his business competitors. Waller & Stewart did not warn Whiteheart of potential liability for the letter, and he later distributed the letter. In a related matter, Waller & Stewart helped Whiteheart maintain a billboard well past the term of the billboard’s lease, even though the landlord rightfully sought removal of the billboard. Waller & Stewart even went so far as to obtain a temporary restraining order to prevent removal of the billboard, despite no apparent legal basis for maintaining the billboard on the property."
 

"The court of appeals affirmed based on the doctrine of in pari delicto. The doctrine prevents courts from redistributing losses among wrongdoers. The court held that this doctrine bars recovery in legal malpractice unless the client acts pursuant to legal advice so complex that assessing the illegality of the advice would not be possible. Whiteheart was barred from arguing that he was ignorant of any wrongdoing, the court held, because in the prior proceeding the court had found Whiteheart’s misconduct intentional.

Whiteheart, therefore, was collaterally estopped from arguing against the court’s application of in pari delicto. Because no North Carolina court had applied in pari delicto to a legal malpractice case, the court of appeals looked to other jurisdictions for guidance. The court noted that allowing malpractice recovery in such cases could encourage clients to commit illegal acts upon the advice of their lawyers, and that malpractice liability is not needed to deter such faulty legal advice because the threat of attorney discipline serves as an adequate deterrent."
 

Much of the law-related news is about multi-national law firms.  Leaving them aside there is a serious question over whether our regular old national law firms can be sued in US District Court under diversity jurisdiction. 

Let's review the basics, as set forth in Lee v. Brown, 3:08-CV-01206 (CSH);  UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT; 2009 U.S. Dist. LEXIS 88494; September 25, 2009

1.  It's citizenship, not residence in diversity jurisdiction:  "District courts have subject matter jurisdiction based on diversity of citizenship in civil cases where the matter in controversy exceeds the sum or value of $ 75,000 and is between citizens of different states. 28 U.S.C. § 1332(a)(1). Diversity of citizenship requires "complete diversity between all plaintiffs and all defendants," Lincoln Prop. Co. v. Roche, 546 U.S. 81, 88, 126 S. Ct. 606, 163 L. Ed. 2d 415 (2005), meaning that no plaintiff and no defendant are citizens of the same state. Wis. Dep't of Corr. v. Schacht, 524 U.S. 381, 389, 118 S. Ct. 2047, 141 L. Ed. 2d 364 (1998). The party seeking to invoke diversity jurisdiction -- here plaintiffs [*4] -- bears the burden of demonstrating that complete diversity exists. Herrick Co. v. SCS Commc'ns, Inc., 251 F.3d 315, 322-23 (2d Cir. 2001).
 

2.  Citizenship [domicile] is more than residence:    "Domicile is the place where a person has his true fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning." " A natural person is considered to be a citizen of the state where he is domiciled, Palazzo v. Corio, 232 F.3d 38, 42 (2d Cir. 2000), and "it is well-established that allegations of residency alone cannot establish citizenship." Canedy v. Liberty Mut. Ins. Co., 126 F.3d 100, 102-103 (2d Cir. 1997).

3.Partnerships are citizens of the state of each parthers' domicile:  A person's domicile is "the place where a person has his true fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning." Palazzo, 232 F.3d at 42. A partnership, which is not a natural person, has the citizenship of each of its partners. Herrick Co. v. SCS Commc'ns, Inc., 251 F.3d 315, 322-23 (2d Cir. 2001).at 322. This is true also of limited liability partnerships. See Mudge Rose Guthrie Alexander & Ferdon v. Pickett, 11 F. Supp. 2d 449 (S.D.N.Y. 1998).
 

4. Lack of complete diversity may result in no subject matter jurisdiction..   "In moving to dismiss this action for lack of subject matter jurisdiction, McDermott claims that a number of its partners are domiciled in, and thus citizens of, the same states of which plaintiffs claim to be "residents" -- California, Massachusetts, and Connecticut. The declaration of Alan M. Rutkoff indicates that 41 of McDermott's partners work at the firm's office in Boston, Massachusetts, and that at least 104 of its partners work at one of the firm's California offices. According to the declaration, all or substantially all of the partners who work at these offices [*7] are domiciled in the state wherein their office is located."  "If plaintiffs are indeed citizens of the states in which they claim to reside, then a number of McDermott's partners are citizens of the same states and complete diversity is lacking in this action."

5.  That determination may not be the end of the story   Even if there is overlap between the citizenship of some of the plaintiffs and some of McDermott's partners, it does not follow that the entire action must be dismissed for lack of subject matter jurisdiction. Under Fed. R. Civ. P. 21, a district court have the power to dismiss nondiverse dispensable parties to preserve diversity jurisdiction. Kafaru v. Burrows, 2008 U.S. Dist. LEXIS 1797, *4 (D. Conn. 2008); See Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 832, 109 S. Ct. 2218, 104 L. Ed. 2d 893 (1989). McDermott appears to be a dispensable party.

 Rule 21 reads: "On motion or on its own, the court may at any time, on just terms, add or drop a party."

Sheri Qualters at The National Law Journal reports that Mintz, Levin and its attorney Steven Rosenthal  have been sued for "allegedly misusing his position to enrich himself and a friend."  Rosenthal, formerly an attorney there, has moved on to real estate investment and development at Northland Investment Corp.

The suit revolves around a claim that Rosenthal "appointed a friend, Neil Cooper, and his company, Macher Management and Development Corp.

The Lamb v. Rosenthal lawsuit, which was filed in Suffolk County Superior Court in Massachusetts on Sept. 16, accuses Rosenthal and Mintz Levin of fraud, breach of fiduciary duty and legal malpractice. The plaintiffs also allege that the defendants violated the Massachusetts consumer protection law, which allows plaintiffs to collect triple damages and attorney fees. They accuse Rosenthal of threatening to oppose the appointment of the plaintiffs as their mothers' guardian unless they signed a settlement agreement, which was finalized in 2006.

The plaintiffs claim they learned of Rosenthal and Cooper's close friendship and how they improperly protected each others' interests at the expense of the plaintiffs when Cooper's company sued them in Essex County Superior Court in Massachusetts.

Cooper filed the 2007 lawsuit, Macher Development & Management Company LLC v. Stevens, to collect money the plaintiffs in the Rosenthal case allegedly owed him under his contracts to manage their commercial property. The Macher lawsuit was settled in July 2008.

According to the complaint in the recently filed lawsuit, during the discovery process in the Macher suit, Mintz Levin produced e-mails in which Cooper referred to Rosenthal as his "best friend" and "soul mate." The complaint cites another Cooper e-mail in which he said he didn't want it to look as though Rosenthal was negotiating for him and that a little "fake tension" between them would look good. "

Legal malpractice is a filed associated with situations in which a person has lost their case.  In real legal malpractice, but for the mistake of the attorney, there would have been a positive outcome.  In a small subset of cases, however, there really is no merit to the action at all.  Defense counsel in legal malpractice all too often use a broad brush and paint any complaint as "frivolous'; sometimes they are right.  Here is an example:

ELIOT S. SASH, Plaintiff, - against - UNITED STATES OF AMERICA et al., Defendants; 09 Civ. 450 (DC);UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 90866   we are looking at this case because in earlier matters, Mr. Sash unsuccessfully sued his attorneys.  Here is his story:
 

"On September 4, 2002, federal and state officials executed a search warrant at Sash's home in Yonkers, New York. United States v. Sash, 396 F.3d 515, 517 (2d Cir. 2005). The search uncovered thousands of false federal, state, and local identification documents and badges, along with the tools, computers, and printers necessary to manufacture such documents and badges. Id. Sash was not authorized to manufacture any of the badges or documents found. Id.

On November 27, 2002 Sash was charged in a twenty-one count indictment with producing, and unlawfully possessing with intent to transfer, hundreds of NYPD badges and ID cards; selling counterfeit badges through the mail; and making false statements to federal customs officials. Id.

On December 30, 2002, while free on bail, Sash was arrested in New Jersey for defrauding a K-Mart department store. His bail was revoked, and he was [*4] charged in a superseding indictment that included charges relating to Sash's attempt to defraud K-Mart. Id. He later agreed to plead to an information, and pled guilty on September 30, 2003 to access device fraud and unlawful transfer of police badges. Id. at 518. On January 13, 2004, Judge Casey sentenced Sash to twenty-seven months in prison followed by eight years of supervised release, which was subsequently lowered to two years and nine months. Id. As a special condition of his supervised release, Sash was explicitly prohibited from
possess[ing] any law-enforcement equipment, such as New York Police Department shields and badges, that [he was] not authorized to possess, [and] . . . possess[ing] any raw materials, inventory, or badge components that could be used to manufacture law-enforcement equipment that [he was] not authorized to manufacture.
United States v. Sash, 444 F. Supp. 2d 224, 228 (S.D.N.Y. 2006).

On March 3, 2006, after Sash completed his sentence and was subject to supervised release, Sash's Probation Officer conducted a search of his home. Id. at 226. That search uncovered a number of NYPD badges and shirts, which Sash was prohibited from possessing. Id. A subsequent [*5] search took place on March 6, 2006 and revealed, as Judge Casey later put it, "enough law-enforcement equipment to outfit a small police force." Id. at 228. Sash possessed, inter alia, NYPD uniforms, NYPD badges, Department of Defense badges, seals used to make FBI, Department of Justice, and Customs Service badges, and several fake handguns. Id. at 227.

On March 6, 2006, the Probation Office filed a Request for Court Action, charging Sash with two violations of supervised release -- possessing law enforcement badges and equipment, and lying to his Probation Officer. Sash, who denied both charges, was arrested that same day. Id. at 225. Judge Casey held a hearing on April 4, 2006, and on August 2, 2006 issued a decision, concluding that Sash had committed the two violations. Id. On September 25, 2006, Judge Casey sentenced Sash to twenty-four months in prison and twelve months of supervised release. United States v. Sash, 02 Cr. 1519 (S.D.N.Y. 2002) (Docket Entry 73).

B. Procedural History

Upon his release from prison in late 2007, Sash moved, pursuant to Federal Rule of Criminal Procedure 41(g), for the return of his property seized in 2001, 2002, and 2006. The property in possession [*6] of the Probation Office generally includes law enforcement pins, tie clips, uniforms (including clothing), money clips, badges, utility belts, DVDs, fake ammunition, fake ammunition magazines, and fake firearms. (Merrigan Decl. Ex. A (full catalog of items); Arce Decl. P 5). The property in possession of the NYPD Property Clerk generally includes thousands of NYPD badges, hundreds of other badges, thousands of molds for producing NYPD badges, police shields and shield components, ten fake firearms, a variety of government identification cards and identification documents, two police vehicle identification plaques, assorted police paraphernalia, business and personal records, a computer along with parts and hardware, and $ 869 in United States currency. (Weir Decl. Ex. C (full catalog of items)).
 

On February 5, 2009, Sash filed an amended complaint, full of elaborate conspiracy theories as to how he was "persecuted" by the City and Federal Defendants for his "legitimate" badge-making business. The complaint cast aspersions not only on the Assistant United States Attorney who prosecuted Sash, but also the late Judge Casey. (Compl, at 11 ("The Pro-Se Plaintiff appealed but the appeal was allegedly not filed due to the clandestine orders and interference of Judge Casey."))."
 

We don't understand why, but in Hashmi v Messiha ;  2009 NY Slip Op 06665 ; Decided on September 22, 2009 ;  Appellate Division, Second Department  the court places great weight on a mix-up between brothers.  The basic claim is that plaintiff asked his attorneys to make a motion to dismiss would undoubtedly be successful.  They didn't do it as quickly as he would have liked.  Here's the story: 

"almost immediately after the appellant was retained, but prior to November 7, 2005, the individual plaintiff, Imaduddin Syed Hashmi (hereinafter Hashmi) requested that Patricia E. Permakoff, the attorney assigned by the appellant to defend him, make a motion to dismiss the complaint in the medical malpractice action insofar as asserted against him on the ground that he never physically worked at the Hospital, but she allegedly refused to do so. Significantly, Hashmi does not deny that he was aware, prior to consulting with Permakoff, that his brother, Kabeerudin Hashmi, was the physician who was actually present at the Hospital and treated Sahar, but that he did not inform her of that fact.
 

On November 7, 2005, approximately three weeks after the appellant assumed Hashmi's defense in the medical malpractice action, the defendant New York Post published an article identifying Hashmi as the "Death Sentence Doc" in the underlying malpractice action.

Apparently the brother question was insufficient for the Appellate Division:

"The plaintiffs' mere conclusory allegations as to Hashmi's requests that Permakoff take certain actions, together with their failure to allege any knowledge by the appellant that the New York Post planned to publish an article in connection with this matter and their failure to immediately inform the appellant that it was Hashmi's brother, Kabeerudin Hashmi, who was actually the physician present in the Hospital when Sahar was examined and treated, render the allegations in the complaint conclusory and speculative insofar as asserted against the appellant. The allegations are thus insufficient, as a matter of law, to show that the plaintiffs have a cause of action sounding in legal malpractice. Accordingly, the Supreme Court should have granted the appellant's motion to dismiss the complaint insofar as asserted against it (see Wald v Berwitz, 62 AD3d 786; Riback v Margulis, 43 AD3d 1023; Hartman v Morganstern, 28 AD3d at 424).

Moreover, in any event, the plaintiffs' allegations as to the consequences and damages flowing from the appellant's alleged failure to accede to Hashmi's request that Permakoff immediately move to dismiss the complaint in the medical malpractice action are also too speculative to permit a trier of fact to find that such failure caused "actual and ascertainable damages" (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442) to them. "

In Berry v Utica Natl. Ins. Group ;2009 NY Slip Op 06935 ; Decided on October 2, 2009 ;Appellate Division, Fourth Department we see a situation in which plaintiff was suing Utica National Insurance Group and evidently there was communication between plaintiff and the defendant law firm.  "evidence that plaintiff contacted defendant concerning his dispute with Utica National does not establish the existence of an attorney-client relationship absent further evidence of an "explicit undertaking [by defendant] to perform a specific task" (Wei Cheng Chang v Pi, 288 AD2d 378, 380, lv denied 99 NY2d 501; see McGlynn v Gurda, 184 AD2d 980, appeal dismissed and lv denied 80 NY2d 988).

How do these situations arise?  Generally, there are telephone calls, and even letters between the attorneys and the plaintiff over starting a law suit.  We cannot say what the evidence in this case was, but in typical cases, either the attorney takes on tasks 1,2,3 but not 4 (where 4 is the case sued upon), or there are "agreements to agree" over a retainer agreement that never jell.

One solution that is raised in almost every advice article for attorneys is a retention/no retention letter that states affirmatively, for example, that "we are not retained nor will we be representing you in the -______________ case.

Yesterday, we started to discuss  Waggoner v. Caruso 2009 NY Slip Op 06739 Decided on September 29, 2009 ; Appellate Division, First Department ; (DeGrasse, J.)

Today we discusse continuous representation, which, in this form, is a question of first impresssion, an issue taken up directly by Justice DeGrasse in the Appellate Division order:
 

"Although we affirm Supreme Court's order, we do not do so on the ground that plaintiffs' legal malpractice claim against Pillsbury is time-barred. A legal malpractice action must be commenced within three years of accrual (CPLR 214[6], 203[a]). Accrual occurs when the malpractice is committed (Shumsky v Eisenstein, 96 NY2d 164, 166 [2001]). In this case, plaintiffs' malpractice claim against Pillsbury accrued nearly six years before this action was commenced. Under the doctrine of continuous representation, however, the statute of limitations is tolled while representation on the same matter in which the malpractice is alleged is ongoing (see Glamm v Allen, 57 NY2d 87 [1982]). The doctrine is rooted in recognition that a client cannot be expected to jeopardize a pending case or relationship with an attorney during the period that the attorney continues to handle the case (see id. at 94). In rendering its decision, Supreme Court ruled that the statute of limitations was not tolled as to Pillsbury because it ceased representing plaintiff in January 2002 when Caruso left the firm and took plaintiffs' case with him. In HNH Intl., Ltd. v Pryor Cashman Sherman & Flynn LLP (63 AD3d 534 [2009]), this Court has since held that the statute was tolled as to a malpractice claim against a law firm because the attorneys who handled the case continued to represent the plaintiffs in the same matter, albeit at different law firms. Guided by this precedent, we now hold that the statute of limitations was tolled by the doctrine of continuous representation during the time that Caruso represented plaintiffs in the underlying matter while he was a partner at Chadbourne and Bracewell.

Sound policy considerations also support the tolling of the statute of limitations with respect to the legal malpractice claim against Pillsbury. Any suit brought by plaintiffs against Pillsbury would have been based upon Caruso's acts of malpractice. Caruso would have thereby been exposed to Pillsbury's potential claims for contribution or indemnification. As noted by the [*5]Court of Appeals in Glamm, a person cannot be expected to jeopardize a relationship with the attorney handling his or her case during the period that the attorney continues to represent him (57 NY2d at 94). An attorney-client relationship would certainly be jeopardized by a client's allegation that his or her attorney committed malpractice while representing the client. Beal Bank, SSB v Arter & Hadden, LLP (42 Cal 4th 503, 167 P3d 666 [2007]), a case defendants cite, is distinguishable because it involves the interpretation of a California statute that codifies the continuous representation doctrine. New York does not have a similar statute.

Accordingly, the order of Supreme Court, New York County (Bernard J. Fried, J.), entered September 11, 2008, which granted defendants' motion to dismiss the complaint pursuant to CPLR 3211, should be affirmed, with costs. "

This is a Politico - A List legal malpractice case.  In Waggoner v. Caruso   2009 NY Slip Op 06739 Decided on September 29, 2009 ; Appellate Division, First Department ; (DeGrasse, J.) we see some of the nations biggest names.

Besides being about a $ 10 Million loss, the players are all very recognizable.  For Plaintiff, Helms & Greene along with Asa Hutchinson [former Representative (R-AK), former US Attorney, Former DEA Administrator, House Manager of the impeachment case and Venable LLP..  For Defendants, Bracewell & Giuliani, Pillsbury Winthrop,  Patterson Belknap and Chadbourne & Parke. 

After dismissal in Supreme Court  this case then went to the First Department.  The original  decision was by Justice Fried, There were four causes of action:  malpractice, breach of fiduciary duty, fraud and conspiracy to commit fraud.  On the malpractice portion, Pillsbury argued that no court in New York has ever addressed the issue of applying the continuous representation doctrine to the former firm of an attorney who left that firm and took the client with him. 

Supreme Court went on to discuss the breach of Fiduciary duty claim, citing Weil Gotschal & Manges LLP v, Fashion Boutique of Short Hills, Inc., 10 AD3d 267 (1st Dept, 2004). Supreme Court found that plaintiff must prove the existence of a fiduciary relationship and a breach of the duty imposed by such a relationship that  directly caused actual damages.  "Where the only actual damage alleged is the value of a lost claim, a plaintiff  client must prove that he or she would have prevailed in the underlying action but for the attorney's conduct.  In other words, as in a malpractice claim, the plaintiff must meet the case within a case requirement."

More tomorrow

Justice Judith Gische of Supreme Court, New York County presents a primer on attorney fee litigation and the disposition of counterclaims for legal malpractice in Hurley v. Bulah Church of God in Christ Jesus, Inc.  In this case the Church had gone through some hard times.  A pastor was accused of financial wrongdoing, and the Church was in Bankruptcy Court for taxes and other debts.  Attorney was retained, and worked on the case in what turns out to be an admirable fashion.  When the Bankruptcy was winding up, leadership of the Church changed, and he was no longer so admired there.  Effect?  The Bankruptcy court approved fees, and he was paid.  Nevertheless, there were post-discharge work and fees, and this dispute in state court followed.

Read for the excellent description of why and how an attorney is due fees. "an attorney who is discharged by a client for cause has no right to compensation or a retaining lien, notwithstanding a specific retainer agreement.  Teichner by Teichner v. W & J Holsteins, Inc., 64 NY2d 977 (1985).    On this motion plaintiff has successfully established that he: 1) owed unpaid legal fees; 2) was not discharged for cause, but withdraw as counsel with court approval; 3) deposited money into his attorney escrow account to be applied to post closing matters, like distribution of money to creditors, etc; and 4) Deacon Roberts was authorized to attend to the church's financial matters with respect to the reorganization.  Thus, plaintiff has proved he is owed unpaid legal fees and other fees."

Today's NYLJ features an article by Marcia Coyle on a series of cases coming up before the US Supreme Court.  Of the 6 cases to be heard [almost triple the usual number] at least four are legal malpractice scenario:  Wood v. Allen  is a death penalty case in Alabama in which a newly admitted attorney failed to investigate mental deficiency of his client in the death penalty phase.  The second case, Padilla v. Kentucky [see article for briefs] concerns deportation consequences and lack of  advice in taking a criminal plea,  The fourth case is described as follows:  "Pottawattamie v, McGhee, in which two Iowa prosecutors, who fabricated evidence and used it in the murder trial of two men, seek immunity from a civil rights damages suit by the wrongfully convicted men. 

Lastly is Milavetz, Gallop & Milavetz v. United States [briefs in the article] on whether attorneys are properly subject to the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act.  Are attorneys required to be part of the "debt relief agencies" and may they properly be prohibited from advising clients "to incur more debt in contemplation of bankruptcy."

We end this week with a look at a huge legal malpractice action just brought against Greenberg Traurig LLP, based upon patent work, and a more than $1 million judgment entered against their client.  Widely reported yesterday, the complaint was set forth in the NYLJ.  What is it about?

The complaint alleges that defendants Sutton and predecessors had handled the IP and patent work for Leviton Manufacturing Co. and with a former partner, had handled the Leviton work for 35+ years.  Leviton holds more than 800 patents in the electrical and electronic wiring field.

It is alleged that problems arose in the patent applications for a Ground Fault Circuit interruption device which was the mainstay of the Leviton company.  More problems followed, and it is alleged that Greenberg Traurig failed to make proper disclosures to the US Patent office.

Litigation with Shanghai Meihao Electric Inc then started and went badly.  It was argued that "inequitable conduct" by Greenberg Traurig might invalidate and make unenforceable the patent.  US District court agreed and found that GT had intended to deceive the PTO.

This led to sanctions in excess of $ 1 Million, along with attorney fees. This litigation ensues.  Of interest will be the Breach of Fiduciary Duty cause of action.  Breach of Fiduciary Duty, best illustrated by the Ulico v. Wilson Elser case, stands for a claim of damages, not for malpractice, but for billing, and quasi-fraudulent activity.  Damages generally are the return of fees, and re-imbursement of sanctions and attorney fees to others.  Beyond the Breadh of Fiduciary Duty is a legal malpractice for a wide variety of patent application mistakes.

Here is how a borrowing statute affects litigation and why a Pennsylvania statute of limitations applies to New York litigation.  CPLR 202 requires that when a nonresident sues on a cause of action accruing outside New York, CPLR 202 requires the cause of action to be timely under the limitations periods of both New York and the jurisdiction where the cause of action accrued.   "This prevents nonresidents from shopping in New York for a favorable Statute of Limitations." Global Financial Corp v. Triarc, 93 NY2d 525 (1999).

In Merritt v. Blumenthal, Supreme Court, New York County, Fried, J. we find:

" New York's borrowing statute, CPLR §202, applies to determine the statute of limitations that governs the malpractice and Judiciary Code claims at issue here. The parties' dispute regards the outcome of the application of CPLR §202. Specifically, Defendants contend that proper application CPLR §202 requires that the claims in this case be subject to the Pennsylvania statute of limitations, whereas Plaintiff argues that analysis under CPLR §202 leads to the conclusion that either the Delaware of New York statute of limitations applies. Under the shorter Pennsylvania statute of limitations, Plaintiff's claims would be time-barred. They would still be viable under the New York or Delaware statutes.
 

"This action arises out of Plaintiff's failed business relationship with a former client of Defendant Michael V. Blumenthal, Esq., involving investments in real estate and race horses. Plaintiffs' allegations can be characterized as (1) claiming that Mr. Blumenthal committed malpractice against Plaintiff in the course of his involvement in the business transactions and subsequent litigation between Plaintiff and Mr. Blumenthal's then-client, Ira Russack, and (2) claiming that Defendant violated New York Judiciary Code §487 by offering false testimony when called as a fact witness in the litigation between Plaintiff and Mr. Russack. Defendants Mr. Blumenthal and his former law firms, Brown Raysman Millstein Felder & Steiner LLP and Thelen LLP (collectively, Defendants) move to dismiss on the grounds that Plaintiff's claims are time-barred and, additionally, that the Complaint does not state a cause of action under New York Judiciary Code §487. For the reasons stated below, Defendants' motion is granted."
 

Landlord hires big-time Landlord-Tenant attorneys in New York City, and expect that the attorneys are in fact bringing a series of eviction proceedings.  This case alleges that they did not, yet charged fees, and misled the client.  What is a client to do?  In this instance they sued for legal malpractice, breach of fiduciary duty, fraud, breach of contract, etc.  Justice Joan Madden of Supreme Court, New York County decided a CPLR 3211 motion to dismiss in Cayuga Capital Mgt. LLC v, Borah Goldstein.

The fraudulent inducement, fraudulent misrepresentation and negligence claims were all trimmed as duplicitive of a potential legal malpractice case. Justice Madden reasoned that they were based upon the same facts, and sought the same damages, and thus were duplicates of the potential legal malpractice.

More interesting was plaintiff's invocation of Ulico v. Wilson Elser, 56 AD1 (1st Dept, 2008),  That case has been the center of a growing number of "breach of fiduciary duty" cases, and supports a claim for such a breach.  Here, in a footnote, Justice Madden disposes of reliance upon Ulico.

The legal malpractice action was dismissed without prejudice, allowing plaintiff to amend and demonstrate the "but for" aspects of the eviction cases.  Presumably, if the evictions are now in process, claims for damage will be limited to the delays, and not for a permanent loss of the ability to evict.

Were one to read each of the 150+ legal malpractice cases decisions filed each year, one would see a wide range of attorney-client problems.  Some are frivolous and some very serious.  This case, DAVID GOLDSTEIN, Plaintiffs, - against - ALLEN S. GOLD and LAW OFFICES OF ALLEN S. GOLD, Defendants;No. 06 CV 6707 (ERK)(VVP); UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 78822; September 1, 2009 is remarkable for the "brazen" behavior by the attorney.  Judge Korman disposes of a motion for summary judgment in this decision.

"Plaintiff further alleges that, in early 2001, defendant informed him that he filed a complaint against Mass Mutual ("2001 action"), "seeking the relief [plaintiff] had requested." (Id. P 8). This was not true - defendant never filed the 2001 action. (Id. P 9.) Nevertheless, from 2001 to 2005, in response to plaintiff's repeated inquires as to the status of the 2001 action (id. PP 10-12), defendant led plaintiff to believe that he was vigorously litigating the 2001 action against Mass Mutual (id. PP 8, 13-22).

Although defendant denies telling plaintiff that he filed a lawsuit in 2001 (Niehaus Aff., Ex. B, Answer P 22), the record does not support this assertion. Indeed, between November 2, 2001, and August 6, 2006, plaintiff sent defendant at least twenty-three emails and letters that referenced the 2001 action. (See Pl.'s Aff. Exs. B-U, W, Z, AA.) It is clear from this correspondence that plaintiff believed defendant had not simply filed the 2001 action but was aggressively litigating it on his behalf. (See, e.g., id., Ex. E, letter, dated February 24, 2002 ("What is [*5] your legal opinion on how [Mass Mutual's] response to your serving them with the order to show cause will impact my '3 part lawsuit' commenced against them?"); id., Ex. F, letter, dated March 27, 2002 ("is there any additional information on the status (date) for the 'Preliminary Conference' for the 3-part lawsuit that you commenced on my behalf?"); id., Ex. N, letter, dated December 27, 2003 ("thank god the court has ordered a January 20, 2004 status conference; with the intent being; as I understand it; to get this case on a tight schedule in order to bring it to completion.").) Plaintiff alleges that "at no point did Mr. Gold ever state that no lawsuit had been filed" (Pl.'s Aff. P 26), nor did he "ever question what lawsuit [plaintiff] was referring to in any of the above correspondence" (Pl.'s Aff. P 27). On the contrary, plaintiff "specifically recall[s defendant] informing [him] that he had engaged in extensive discovery with MassMutual" (id. P 16), "that MassMutual was engaged in delaying tactics to slow the case down" (id. P 17), "that he had responded to numerous sets of interrogatories propounded by MassMutual" (id. P 18), "that a 'Preliminary Conference' had been scheduled [*6] . . . for July 23, 2002" (id. P 20), and "that a 'Status Conference' had been scheduled . . . for January 20, 2004" (id. P 21).
 

The dismissal of the 2005 action "shocked" plaintiff, particularly the Supreme Court's findings "regarding my not 'interposing' claims three through six b[y] the end of 2001", because he believed that defendant had "interposed" these claims in the 2001 action. (Id., Ex. T.) Indeed, plaintiff was so convinced that the Supreme [*11] Court had erred in finding his tort claims time-barred that he decided to appeal the decision. (See id., Ex. HH.) In an email to defendant on December 7, 2005, shortly before defendant filed the appeal, plaintiff wrote: "I am sure the appellate guy you met with on Monday had the opportunity to realize that [the Supreme Court Justice']s finding that I had not "'interpos[ed]' claims three through six b[y] the end of 2001 w[as] outright [i]ncorrect." (Id., Ex. T (emphasis in original).) Plaintiff believed that all the documents defendant told him he had filed in the 2001 action were "sit[ting] within the 'sealed 100545/01' part" of the file for the 2005 action. (Id.)

Defendant never disabused plaintiff of these views. On the contrary, in response to plaintiff's numerous requests for a "copy of the originally filed, 'interposed' . . . claims that [the Supreme Court Justice] has apparently not had an opportunity to read" (id., Ex. T; see also id., Exs. U, W, X, Z), defendant fabricated documents and provided them to plaintiff as evidence that he had filed the 2001 action. (Pl.'s Aff. PP 28a-d.) Indeed, defendant produced a summons and verified complaint, dated February 12, 2001, which bore [*12] no index number (id., Ex. CC); a check, dated February 1, 2001, made out to the Queens County Clerk (id., Ex. DD); and an unsigned Notice of Deposition and Verified Answer, both dated April 27, 2001 and bearing the Index No. 10054/01, which defendant represented had been filed and served by Mass Mutual's counsel, Michael Yoeli of the law firm Assail & Yoeli, LLP (id., Ex. EE)."
 

"Each of plaintiff's claims -- for fraud, attorney malpractice, breach of contract, attorney misconduct under New York Judiciary Law § 487 and intentional infliction of emotional distress -- is based on defendant's alleged failure to file the 2001 action and his continued misrepresentation that he had not only filed the action but was vigorously litigating it. Moreover, defendant concedes that "[t]here is no doubt that the counterclaim [for attorney's fees] arises under the same circumstances and facts that form the basis for the Plaintiff's claims." (Niehaus Aff., Ex. F, at 5.) Defendant does not contest plaintiff's allegations that he failed to file the 2001 action or that he "deceived [plaintiff] about commencing an action in 2001. . . ." (Def.'s Reply Mem. at 5.) Instead, he argues that plaintiff's claims fail, because "plaintiff simply cannot establish damages" (Def. Mem. 2), and that he entitled to summary [*15] judgment on his counterclaim, because "plaintiff's account was in arrears at the time of his termination" (Def.'s Reply Mem. at 2).

As to the fraud, breach of contract, attorney misconduct and intentional infliction of emotional distress claims, defendant argues merely that it is "indisputable" that plaintiff cannot establish damages. (Def.'s Mem. at 2.) Defendant, however, does not offer any evidence nor point to a single material fact that supports this "indisputable" conclusion. The facts material to plaintiff's alleged damages are (1) whether he "paid [defendant] tens of thousands of dollars based on [defendant]'s false representation that the money was paying for an ongoing litigation [the 2001 action]" (Pl.'s Opp'n Mem. 8); (2) whether the 2005 action was dismissed as untimely due to defendant's failure to interpose the tort claims by the end of 2001 (Pl.'s Aff., Ex. GG); and (3) whether plaintiff "suffer[ed] severe-mental trauma as a result of [defendant]'s deliberate and knowing actions in . . . fraudulently leading [him] to believe that the MassMutual situation was being addressed" (Pl.'s Opp'n Mem. at 9)."
 

When one files a petition in bankruptcy, ownership of assets is upended.  Some if not all assets of the debtor become part of the estate, and will be used to pay creditors.  A current cause of action in legal malpractice, even if not reduced to a law suit is one such asset.  What happens if the negligence is unearthed in the bankruptcy proceedings?  Is it the property of the estate or that of the debtors; is is pre-petition or post-petition.

in IN RE: ANNE DE HERTOGH and PETER DE HERTOGH, DEBTOR;  CASE NO. 04-22006 (ASD), CHAPTER 7; UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF CONNECTICUT;2009 Bankr. LEXIS 2466;August 28, 2009 we see the following:

"The major point of contention in the present proceeding concerns whether the Malpractice Action is property of the estate or of the Debtors. Courts have taken several approaches to this question. Some, relying on Butner v. United States, 440 U.S. 48, 99 S.Ct. 914, 59 L. Ed. 2d 136 (1979), and the language of Section 541, have looked to whether, as of the petition date, a cause of action had accrued under applicable state law. See, e.g. Swift v. Seidler (In re Swift), 198 B.R. 927 (Bankr. W.D.Tex. 1996) (under Texas law, cause of action for legal malpractice causing loss of an exemption could only accrue post-petition and was therefore not property of the estate); Holstein v. Knopfler (In re Holstein), 321 B.R. 229 (Bankr. N.D. III. 2005) (cause of action for legal malpractice allegedly causing denial of discharge accrued post-petition; was property of debtor, not property of estate); But see Helbling v. Josselson (In re Almasri), 378 B.R. 550 (Bankr. N.D. Ohio 2007) (concluding that, under Ohio law, a malpractice claim that accrued at the time petition was filed rather than post-petition when discharge was revoked; held property of estate). Other courts, relying on Segal v. Rochelle, 382 U.S. 375, 380, 86 S.Ct. 511, 515, 15 L. Ed. 2d 428 (1966) [*8] considered whether a cause of action that accrued post-petition was nevertheless "sufficiently rooted in the pre-bankruptcy past and so little entangled with the bankrupt's ability to make an unencumbered fresh start that it should be regarded as 'property' under § 70(a)(5) [of the former Bankruptcy Act]." See, e.g. Casey v. Grasso (In re Riccitelli), 320 B.R. 483, 491-92 (Bankr. D.Mass. 2005) (malpractice claim alleging loss of homestead exemption that accrued post-petition was not "sufficiently rooted in the pre-bankruptcy past" to become property of the estate); But see Wheeler v. Magdovitz (In re Wheeler), 137 F.3d 299 (5th Cir. 1998) (malpractice claim for allegedly causing debtor's conviction for bankruptcy fraud held property of estate even though cause of action did not accrue under Mississippi law until post-petition); Rich v. Strada Design Associates, Inc. (In re Strada Design Associates, Inc.), 326 B.R. 229, 236 (Bankr. S.D.N.Y. 2005) (concluding that claim that attorney filed petition under wrong chapter was property of estate; held that "a cause of action will be 'property of the estate' if it has sufficient roots in the debtor's pre-bankruptcy activities and is not entangled [*9] with the debtor's 'fresh start,' regardless of when the claim accrues under state law.").

The Court finds the matter best resolved by direct reference to Bankruptcy Code Sections 541(a)(1) and § 541(a)(7), and the property interests created by state law. Such an approach, the same as is used to determine whether any other interest in property becomes property of the estate, is most consistent with the language, precedents and policy of the Bankruptcy Code. See, e.g. Hirsch v. Arthur Andersen & Co., 72 F.3d 1085, 1093 (2d Cir. 1995) ("Whether the rights belong to the debtor . . . is a question of state law. Thus, the trustee stands in the shoes of the debtors, and can only maintain those actions that the debtors could have brought prior to the bankruptcy proceedings.") (citations and internal quotation marks omitted). Accordingly, the Court's analysis focuses on when (pre- or post-petition) and to whom (the estate or the post-petition debtor) a legally cognizable interest in the cause of action arose under the applicable state law.

HN2The filing of a Chapter 7 petition creates a bankruptcy estate encompassing "all legal or equitable interests of the debtor in property as of the commencement [*10] of the case," 11 U.S.C. § 541(a)(1), including any causes of action possessed by the debtor. Seward v. Devine, 888 F.2d 957, 963 (2d Cir. 1989). "Property interests are created and defined by state law. Unless some federal interest requires a different result, there is no reason why such interests should be analyzed differently simply because an interested party is involved in a bankruptcy proceeding." Butner v. United States, 440 U.S. 48, 55, 99 S.Ct. 914, 918, 59 L. Ed. 2d 136 (1979).
HN3The federal bankruptcy code broadly defines property of a debtor's estate as including "all legal or equitable interests of the debtor in property as of the commencement of the case." 11 U.S.C. § 541(a)(1) (1988). Within this definition of a debtor's property fall the debtor's rights of action. . . .

HN4Although federal bankruptcy law determines the outer boundary of what may constitute property of the estate, state law determines the "nature of a debtor's interest" in a given item. Therefore, whereas federal law instructs us that [an action] may constitute property of [the Debtors'] estate, state law determines whether [the Debtors'] interest in the cause of action is sufficient to confer on the estate a property right in [*11] the action."
 

Since the Court of Appeals decided Amalfitano v. Rosenberg  we have seen an upswing in reported successful Judiciary Law 487 cases.  Here in Moormann v Hoerger ;2009 NY Slip Op 06518 ;Decided on September 15, 2009 ;Appellate Division, Second Department plaintiff loses legal malpractice, but avoids summary judgment on the Judiciary Law cause of action. 

Plaintiff was convicted of DWI (he blew a .30) and the DA moved to forfeit his car.  Attorneys were retained to defend criminal action and to defend the forfeiture.  Here is the shocking testimony which supported the Judicary Law case and the court's analysis.  Note that there seems to have been a single instance of deceit.

"In this regard, the defendant sent an affidavit to the plaintiff to sign in August 2004, allegedly related to the forfeiture action. The associate who sent the affidavit and the cover letter admitted, at his deposition, that he knew at the time that the default judgment had been entered and there was no possibility that the plaintiff could retrieve his vehicle, but he did not so inform the plaintiff. Eventually, the plaintiff learned through other means that the default judgment had been entered and his vehicle had been auctioned. [*2]

The Supreme Court properly granted that branch of the defendant's motion which was for summary judgment dismissing the causes of action alleging legal malpractice. The defendant established that the plaintiff would be unable to prove that he would have been successful in the forfeiture action but for the alleged negligence (see Simmons v Edelstein, 32 AD3d 464, 465; Lichtenstein v Barenbaum, 23 AD3d 440; Edwards v Haas, Greenstein, Samson, Cohen & Gerstein, P.C., 17 AD3d 517, 519). In opposition, the plaintiff failed to raise a triable issue of fact.

In addition, the defendant established, prima facie, its entitlement to judgment as a matter of law dismissing the cause of action alleging fraud, as that cause of action was not pleaded with the specificity required under CPLR 3016(b) (see Dumas v Fiorito, 13 AD3d 332, 333).

The court erred, however, in dismissing, as duplicative of the causes of action alleging legal malpractice, the cause of action alleging violation of Judiciary Law § 487. A violation of Judiciary Law § 487 requires an intent to deceive (see Judiciary Law § 487), whereas a legal malpractice claim is based on negligent conduct (see Simmons v Edelstein, 32 AD3d at 465; Edwards v Haas, Greenstein, Samson, Cohen & Gerstein, P.C., 17 AD3d at 519). Furthermore, in opposition to the defendant's establishment, prima facie, of its entitlement to judgment as a matter of law as to this cause of action, the plaintiff raised a triable issue of fact as to whether the defendant intentionally deceived him (cf. Izko Sportswear Co., Inc. v Flaum, 25 AD3d 534, 537; Knecht v Tusa, 15 AD3d 626, 627). "

In Tatum v. Oberg; UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT;2009 U.S. Dist. LEXIS 82208;September 3, 2009 we see a spirited discussion of the overlap between fraud claims and negligence, as well as a discussion of the overlap between breach of contact claims and negligence.  It is a 2d Circuit case decided on Connecticut law, but the basic premises are similar.

"Oberg and FOMH first move to dismiss Tatum's fraud claim. Under Connecticut law, a fraud claim is established if "(1) a false representation was made as a statement of fact; (2) the statement was untrue and known to be so by its maker; (3) the statement was made with the intent of inducing reliance thereon; and (4) the other party relied on the statement to his detriment." Weinstein v. Weinstein, 275 Conn. 671, 685, 882 A.2d 53 (Conn. 2005). In this case, Tatum alleges that Oberg and FOMH committed fraud because Oberg made numerous false statements of fact related to Tatum's dissolution action (see, supra section II); Oberg knew such statements to be untrue; Oberg intended to induce Tatum to rely [*9] on her statements; and Tatum relied on Oberg's statements to his detriment. ""It is also worth noting that Tatum does not specify facts in support of his assertion that Oberg knew her allegedly fraudulent statements to be false and made them for the purpose of inducing Tatum to rely on them. While Rule 9(b) states that the scienter element of fraud "may be alleged generally," pleadings with respect to scienter must still comply with the requirements of Rule 8(a)(2). See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1954, 173 L. Ed. 2d 868 (2009). As the Supreme Court has held, a pleading offering [*11] merely "labels and conclusions" or "a formulaic recitation of the elements of a cause of action" is insufficient to satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. In this case, Tatum's Amended Complaint contains merely a bare-bones assertion of scienter. It alleges no "facts that give rise to a strong inference of fraudulent intent," as is required by the law of this Circuit. Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir. 1994).
 

"Under Connecticut law, the elements of a breach of contract are "the formation of an agreement, performance by one party, breach of the agreement by the other party and damages." Rosato v. Mascardo, 82 Conn. App. 396, 411, 844 A.2d 893 (Conn. App. Ct. 2004) (quoting Bouchard v. Sundberg, 80 Conn. App. 180, 189, 834 A.2d 744 (Conn. App. Ct. 2003)). In general, a client may sue his or her attorney for either breach of contract, negligence or both. Conn. Educ. Ass'n, Inc. v. Milliman USA, Inc., 105 Conn. App. 446, 458, 938 A.2d 1249 (Conn. App. Ct. 2008). See also Mac's Car City, Inc. v. DeNigris, 18 Conn. App. 525, 529-30, 559 A.2d 712 (Conn. App. Ct. 1989). The court must dismiss a claim for breach of contract, however, if the claim is in fact "a claim that one has breached a standard of care in the language of contract." Caffery v. Stillman, 79 Conn. App. 192, 197, 829 A.2d 881 (Conn. Ct. App. 2003). See also Gazo v. City of Stamford, 255 Conn. 245, 263, 765 A.2d 505 (Conn. 2001) [*13] ("[W]e look beyond the language used in the complaint to determine what the plaintiff really seeks. . . . [P]utting a contract tag on a tort claim will not change its essential character.").

Tatum's breach of contract and malpractice claims are based largely on the same underlying facts. The only difference in this respect is that the malpractice claim, but not the breach of contract claim, rests in part on allegations that Oberg and FOMH "[c]onceal[ed] discovery and/or fail[ed] to obtain discovery that would have alerted Plaintiff to their failure to comply with the standard of care," and "[f]ail[ed] to respond to Plaintiff's request regarding the manner in which the case proceeded." Am. Comp. P 19(f)-19(g). 3 Despite similar factual underpinnings, Tatum asserts that his breach of contract claim derives from Oberg and FOMH's "contractual duty to provide timely and correct legal advice to Plaintiff," and that his malpractice claim derives from the defendants' "duty to provide Plaintiff with professional services equal to the degree of skill and learning commonly applied under the circumstances then and there existing by a prudent member of the legal profession." Am. Comp. PP 18, 18.

"

In Felt v. Van Alstyne we see an interesting real estate-legal malpractice case, one which is, unfortunately, no so uncommon.  Plaintiff owns 51 acres of property in Greene County and wants to sell a portion, 6.1 acres.  The balance of 45 acres or so, which is unimproved, is to be sub-divided and kept.  Defendant attorney is hired to do the closing.

What is a closing?  It is the sale transaction, and the attorney for a party is supposed to make sure that the transaction actually follows the intent of the parties.  Here everything went wrong.  Now, plaintiff, who has sued the buyers in a separate action, must sue the attorney and the title closing company over this mistake:  the deed did not have a description of the premises to be sold attached to it.  Imagine that, the deed simply recited all 51 acres, when in fact only 6 acres were to be sold.

The defense?  That's how it's done here!    The lesson to be taken from this case, is that when plaintiff moves for summary judgment, and includes the affidavit of an expert, defendant better have one too.  The affidavit of co-defendant was simply not enough.  Result?  Plaintiff is granted partial summary judgment with the damages to await the outcome of another trial, presumably against the buyer.

In law, sometimes a single case decision opens the flood gates.   This is an oft-heard argument, with a rarely seen result, yet in legal malpractice the Ulico v. Wilson Elser, 56 AD3d 1 (1st Dept, 2008) case seems to have accomplished the re-awakening of "breach of fiduciary duty."

As an example, see Colucci v. Arisohn, 2009 NY Slip Op 32053(U).  There the claim was that plaintiff had been involved in a medical billing scheme which went into the 70+ million range, and involved Beth Israel Hospital.  He hired attorneys who at the same time were representing another plaintiff in a qui tam whistle blower action.  The plaintiff [relator] in such a case may reap a significant reward, and here, a Mr. Perez did.

Colucci ended up pleading guilty to Grand Larceny and settling a civil suit as a defendant.  He felt that his own qui tam information was taken from him by the attorneys and used in the Perez case, all to the attorney's benefit.

The interesting aspect of this case is that the legal malpractice case was dismissed on the basis that a criminal defendant who cannot demonstrate actual innocence may not sue for legal malpractice.  Plaintiff's Judiciary Law section 487 case was dismissed as too similar to the legal malpractice case.

The Breach of fiduciary duty matter, however, remains vital, and in the case.  Based upon Ulico the court held:

"The attorney-client relationship imposes on the attorney `the duty to deal fairly, honestly and with undivided loyalty...including maintaining confidentiality, operating competently, safeguarding client property and honoring the client's interests over the lawyers [Matter of Cooperman, 83 NY2d 465 (1994).  Thus any act of disloyalty by counsel will also comprise a breach of the fiduciary duty owed to the client."

"The Labaton Defendants argue that plaintiff's breach of fiduciary duty-based claims (as well as fraud, usurpation of economic opportunity and unjust enrichment claims) should be dismissed because they are duplicitive of plaintiff's malpractice claims.  This argument is rejected."

When practitioners in Legal Malpractice stay in the area long enough, older cases they handled come back to save or haunt them.  A prime example is DeNatale v Santangelo ;  2009 NY Slip Op 06398 ;  Decided on September 8, 2009 ;  Appellate Division, Second Department .  Here the defendant law firm wins dismissal based upon a now well known case.  In that case, defendant attorney lost the motion and the appeal, here, based on the same law, defendant attorney wins. 
 

The case in common is Barnett v Schwartz ;2007 NY Slip Op 09712 [47 AD3d 197] .  Important language there:  "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 Socy., 95 NY2d 443, 446 [2000]; see e.g. Kleeman v Rheingold, 81 NY2d 270 [1993]; Caruso, Caruso & Branda, P.C. v Hirsch, 41 AD3d 407 [2007]; Cohen v Wallace & Minchenberg, 39 AD3d 691 [2007]; Cummings v Donovan, 36 AD3d 648 [2007]; Kotzian v McCarthy, 36 AD3d 863 [2007]), while others hold that it must be "a" proximate cause of damages (Bauza v Livington, 40 AD3d 791, 793 [2007]; see e.g. Moran v McCarthy, Safrath & Carbone, P.C., 31 AD3d 725 [2006]; Terio v Spodek, 25 AD3d 781 [2006]; Pistilli v Gandin, 10 AD3d 353 [2004]). 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 [2007]; Kotzian v McCarthy, 36 AD3d 863 [2007]; Moran v McCarthy, Safrath & Carbone, P.C., 31 AD3d 725 [2006]). 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 [2007]; Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438 [2007]; AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428 [2007]; Davis v Klein, 88 NY2d 1008 [1996]; Carmel v Lunney, 70 NY2d 169 [1987]). 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{**47 AD3d at 204} 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. "

"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.""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. "

Continuing from yesterday, what is the relationship between legal malpractice litigation and breach of fiduciary duty?  One reflexive answer is that the broad category of legal malpractice litigation, which requires a demonstration of deviation, proximate cause, "but for" causation and damages contains breach of fiduciary duty as a subset.  Often, alternative claims of breach of fiduciary duty are routinely dismissed as included in , or "coextensive" with the legal malpractice claims.

In one species of breach of fiduciary duty area, there is divergence.  Here, plaintiff seeks disgorgement or reimbursement of legal fees paid to the attorney on the theory that there was a fiduciary duty between attorney an client and there was a breach of that duty.  No proof of damages is offered, and none is alleged.  Plaintiff simply wants his fees returned.  Is this proper?

Here is Judge Sweet's reasoning from KIRK , -against-  HEPPT, ESQ., 05 Civ. 9977;UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 80989;September 1, 2009,

"in order to prevail on a cause of action for breach of fiduciary duty in New York, a plaintiff must prove only two elements: (1) the existence of a fiduciary duty between the parties and (2) the breach of that duty by defendant. See January 9, 2008 Opinion at 592. In holding that the Kirks were not required to allege causation, the Court relied on cases from this District, see Official Comm. of Asbestos Claimants of G-l Holding, Inc. v. Heyman, 277 B.R. 20, 37 (S.D.N.Y. 2002) ("Under New York law, the elements of a claim for breach of fiduciary duty are (1) existence of fiduciary relationship and (2) breach of a fiduciary duty."); Schweizer v. Mulvehill, 93 F. Supp. 2d 376, 401 (S.D.N.Y. 2000) ("[A] breach of fiduciary duty may give rise to liability in the absence of damages."), as well as a New York Supreme Court case, Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, et al., 843 N.Y.S.2d 749 (Sup. Ct. 2007).

In Ulico, the New York Supreme Court, New York County, held that unless a legal malpractice claim and a breach of fiduciary duty claim are [*34] "co-extensive," "no proof of damages is required where the remedy that is sought for the breach is forfeiture of compensation." Id. The First Department recently addressed the lower court's application of that "considerably lower standard of recovery" in the breach of fiduciary duty context, clarifying "that to recover under a claim for damages against an attorney arising out of the breach of the attorney's fiduciary duty, the plaintiff must establish the 'but for' element of malpractice, irrespective of how the claim is denominated in the complaint." Ulico Cas. Co. v. Wilson, Elser, Mosokowitz, Edelman & Dicker, 865 N.Y.S.2d 14, 22 (App. Div. 2008) .
 

Sometimes a court's decision will simply tell how the case came out.  Sometimes a decision can teach a lesson; in this case one decision teaches several lessons in Legal Malpractice.  KIRK , -against-  HEPPT,   05 Civ. 9977;UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 80989;September 1, 2009, Decided
by Judge Sweet is one such case. We will look at this case today and tomorrow.

"The Kirks, pro se, filed their complaint against Heppt, Kirk's former attorney, on November 28, 2005, alleging claims for, inter alia, breach of contract, fraudulent misrepresentation, and breach of fiduciary duty arising out of Heppt's representation of Kirk in an action brought by Kirk against his former employer. On October 2, 2003, Kirk filed suit against Schindler in New York State Supreme Court, New York County, asserting causes of action for breach of contract and defamation and seeking a declaratory judgment that Kirk had been constructively discharged by Schindler.

In November 2003, Schindler removed the state court action to federal court on the ground that Kirk's breach of contract claim was preempted by ERISA. At the time, Heppt believed that proceeding in federal court offered certain advantages, namely that the fast pace of litigation there would make it more likely [*9] that Schindler would enter into settlement negotiations."

Issue:  May an attorney hire a contract attorney to work on the case, and bill rates for that contract attorney in excess of the contract attorneys pay?

In January 2004, Heppt hired a contract attorney, Elizabeth Hill ("Hill"), to assist him with Kirk's case. Hill's time was listed on Heppt's invoices beginning with an invoice dated January 31, 2004, identifiable by the use of her initials in the "lawyer" column. According to the Kirks, they did not know that Heppt had been charging them for Hill's time beginning [*15] in January and dispute that Hill's time was readily identifiable. According to the Kirks, Heppt did not obtain their consent to Hill's participation until three months after she began working on the case. The Kirks further allege that they never formally agreed to pay Heppt for Hill's services.According to the Kirks, Heppt "grossly overcharged" them for Hill's work and charged for work performed by Hill for which she was not paid by Heppt."
"The Kirks make the following allegations with respect to their breach of fiduciary duty cause of action: 1) Heppt's hiring of Hill was unauthorized and resulted in inflated fees; 2) the sole purpose of the April 2004 remand motion was to increase fees; 3) Heppt produced incomplete responses to Schindler's summary judgment motion; and 4) Heppt failed to advise Kirk about the limited value of his defamation claim."
 

"Assuming that such conduct on the part of Heppt constituted a breach of his fiduciary duty, the Kirks have not satisfied their burden in pointing to any injuries suffered as a result of such a breach. Beginning in January 2004, Heppt's invoices listed Hill's time and gave a detailed description of the work that she was performing. Kirk then met Hill at Heppt's offices in March 2004, at which time Heppt informed Kirk that he wanted Hill to assist on the case, and Kirk asked Heppt about Hill's billable rate. The Kirks never questioned or objected to Hill's participation, either when they received the invoices in January or when they met Hill in March 2004."

Sometimes we find a stimulating discussion of a principal of legal malpractice in decisions concerning other professions.  In this case Sykes v RFD Third Ave. 1 Assoc., LLC ;2009 NY Slip Op 06387 ;Decided on September 8, 2009 ;Appellate Division, First Department ;Moskowitz, J.  we find a discussion of privity and third-party beneficiary law which informs legal malpractice issues.
 

"Plaintiffs' negligent misrepresentation claim fails to allege a "special relationship," i.e., "a relationship so close
as to approach that of privity" (Parrott v Coopers & Lybrand, 95 NY2d 479, 484 [2000]). The New York Court of Appeals takes a rather cautious approach to determining whether a relationship necessary to support a claim for negligent misrepresentation exists (see Ossining Union Free School Dist. v Anderson LaRocca Anderson, 73 NY2d 417, 424 [1989] ["[w]e have defined this duty narrowly, more narrowly than other jurisdictions"]). This narrow approach developed out of concern for the "limitless liability" that could result that otherwise would stop with the contracting parties (Parrott at 483 citing Prudential Ins. Co., v Dewey Ballantine, Bushby, Palmer & Wood, 80 NY2d 377, 382 [1992]; see also Credit Alliance Corp. v Arthur Andersen & Co., 65 NY2d 536, 553 [1985] [explicitly rejecting a rule "permitting recovery by any foreseeable plaintiff"]; Ossining, 73 NY2d at 421 ["[i]n negligent misrepresentation cases especially, what is objectively foreseeable injury may be vast and unbounded, wholly disproportionate to a defendant's undertaking or wrongdoing"]).

Therefore, before a stranger to a contract can claim harm from negligent misrepresentation, there must be: "(1) an awareness by the maker of the statement that it is to be used for a particular purpose; (2) reliance by a known party on the statement in furtherance of that purpose; and (3) some conduct by the maker of the statement linking it to the relying party and evincing its understanding of that reliance" (Parrott, 95 NY2d at 484 [citations omitted]; see also Securities Investor Protection Corp. v BDO Seidman, 95 NY2d 702, 712 [2001] [no privity between SIPC and accountants where accountants had not prepared audit reports for the specific benefit of SIPC, did not send them to SIPC and SIPC never read these reports]). [*4]

Accordingly, we have been circumspect when assessing privity (see e.g. Houbigant, Inc. v Deloitte & Touche, 303 AD2d 92, 94-95 [2003] [accountant's audit "was a task performed pursuant to professional standards applicable in the context of any audit, and was not undertaken pursuant to any duty owed toward [plaintiff]"); LaSalle Natl. Bank v Ernst & Young, 285 AD2d 101, 107-108 [2001] no privity between lender and borrower's accountants where only contact was single phone call]; see also Israel Discount Bank of N.Y. v Miller, Ellin & Co., 277 AD2d 58, 59 [2000]).

"Although this rule first developed in the context of accountant liability, it has applied equally in cases involving other professions" (Parrott, 95 NY2d at 483; see also Ossining at 424 ["[n]or does the rule apply only to accountants"]). This Court too has extended the privity requirements of Parrott beyond
the accountant arena (see e.g. Bri-Den Constr. Co., Inc. v Kappell & Kostow Architects P.C., 56 AD3d 355 [2008], lv denied 12 NY3d 703 [2009] [no privity between architect and bidder]); Point O'Woods Assn. v Those Underwriters at Lloyd's, London subscribing to Certificate No. 6771, 288 AD2d 78, 79 [2001], lv denied 98 NY2d 611 [2002] [no privity between insurance carrier and broker]). "

In "Boglia,  v  Greenberg, et al., ; SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT;2009 NY Slip Op 5278; 63 A.D.3d 973; 882 N.Y.S.2d 215; 2009 N.Y. App. Div. LEXIS 5183  the court writes:

"The client retained the attorneys to represent her in a matrimonial action. After terminating the attorneys' representation, the client settled the underlying action and received a settlement in the amount of $ 200,000. Thereafter, the client sued the attorneys alleging, inter alia, that they negligently advised her of her rights to equitable distribution of the residence, and failed to communicate an offer of settlement to her in the amount of $ 250,000. She also sought to recover legal fees already paid to the attorneys."

"The defendants met their burden of establishing entitlement to judgment as a matter of law by demonstrating that the plaintiff would be unable to prove that, but for the defendants' alleged negligent advice regarding her rights to equitable distribution, she would have prevailed in the underlying action had it proceeded to trial. The plaintiff, in opposition, failed to raise a triable issue of fact. Accordingly, the Supreme Court properly granted that branch of the defendants' cross motion which was for summary judgment dismissing the first cause of action, alleging legal malpractice based upon the defendants' alleged negligent advice regarding her rights to equitable distribution of the [***218] residence, and properly denied that branch of the plaintiff's motion which was for summary judgment on that cause of action (see Oberkirch v Charles G. Eichinger, P.C., 35 AD3d 558, 559, 827 N.Y.S.2d 192).

However, the Supreme Court should have denied that branch of the defendants' cross motion which was for summary judgment dismissing the second cause of action, alleging legal malpractice based upon their alleged failure to convey her former husband's $ 250,000 settlement offer to her, as triable issues of fact exist regarding whether the defendants failed to convey the settlement offer to the plaintiff and whether the plaintiff would have accepted that offer (cf. Bauza v Livington, 40 AD3d "

In MELNICK  v. CARY PRESS,;No 06-CV-6686 (JFB) (ARL);UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 77609; August 28, 2009, Decided  we find an excellent discussion of the rules of attorney fee liens under the Judiciary Law.
 

"Under New York law, an attorney who is discharged is statutorily entitled to a charging lien on any monetary recoveries obtained by the former client in the proceedings in which the attorney had rendered legal services. 1 See N.Y. Judiciary Law § 475. The Second Circuit has [*7] explained the rationale behind the charging lien:
New York's statutory charging lien, see N.Y. Judiciary Law § 475 (McKinney 1983), is a device to protect counsel against "the knavery of his client," whereby through his effort, the attorney acquires an interest in the client's cause of action. In re City of New York, 5 N.Y.2d 300, 307, 184 N.Y.S.2d 585, 157 N.E.2d 587 (1959). The lien is predicated on the idea that the attorney has by his skill and effort obtained the judgment, and hence "should have a lien thereon for his compensation, in analogy to the lien which a mechanic has upon any article which he manufactures." Williams v. Ingersoll, 89 N.Y. 508, 517 (1882).
Butler, Fitzgerald & Potter v. Sequa Corp., 250 F.3d 171, 177 (2d Cir. 2001).

FOOTNOTES

1 A discharged attorney is also entitled to a retaining lien on the former client's papers and property that are in the attorney's possession, under New York common law. See Resolution Trust Corp. v. Elman, 949 F.2d 624, 626 (2d Cir. 1991); see also McDermott v. Great Am. Alliance Ins. Co., No. 5:02 Civ. 0607 (NAM/DEP), 2006 U.S. Dist. LEXIS 52878, 2006 WL 2038452, at *2 (N.D.N.Y. July 18, 2006) ("In New York, an attorney who ceases to represent his or her client but has rendered [*8] services for which payment has not yet been received has two forms of recourse against non-payment, other than commencement of a plenary action -- one derived from the common law [generally referred to as a retaining lien], and the other created by statute [referred to as a charging lien]."). Wagner Davis' assertion of a retaining lien is discussed in connection with plaintiffs' motion to compel infra.

Specifically, Section 475 of the New York Judiciary Law provides:
From the commencement of an action . . . the attorney who appears for a party has a lien upon his client's cause of action, claim or counterclaim, which attaches to a verdict, report, determination, decision, judgment or final order in his client's favor, and the proceeds thereof in whatever hands they may come; and the lien cannot be affected by any settlement between the parties before or after judgment, final order or determination. The court upon the petition of the client or attorney may determine and enforce the lien.
N.Y. Judiciary Law § 475. The Second Circuit has made clear that Section 475 governs attorneys' charging liens in federal courts sitting in New York, and such liens are "enforceable in federal courts in [*9] accordance with its interpretation by New York courts." Itar-Tass Russian News Agency v. Russian Kurier, Inc., 140 F.3d 442, 449 (2d Cir. 1998) (internal quotation marks and citations omitted). In order to establish a lien under Section 475, "there must be asserted a claim which can eventuate in there being proceeds payable to, or assets recoverable by, the client as a result of the efforts of the attorney." Rosewood Apartments Corp. v. Perpignano, No. 99 Civ. 4226 (NRB), 2005 U.S. Dist. LEXIS 8396, 2005 WL 1084396, at *3 (S.D.N.Y. May 3, 2005). Further, attorneys who terminate their representation are still entitled to enforce their charging liens, as long as the attorney does not withdraw without "good cause" and is not discharged for "good cause." See, e.g., McDermott v. Great Am. Alliance Ins. Co., No. 5:02 Civ. 0607 (NAM/DEP), 2006 U.S. Dist. LEXIS 52878, 2006 WL 2038452, at *2 (N.D.N.Y. July 18, 2006); Hill v. Baxter, No. 98 Civ. 4314 (SJF) (ASC), 2005 U.S. Dist. LEXIS 7157, 2005 WL 465429, at *2 (E.D.N.Y. Feb. 7, 2005); Petition of Harley & Browne, 957 F. Supp. 44, 48 (S.D.N.Y. 1997); Rankel v. Tracey, No. 84 Civ. 3412 (KMW), 1991 U.S. Dist. LEXIS 10673, 1991 WL 156324, at *7 (S.D.N.Y. Aug. 2, 1991); Klein v. Eubank, 87 N.Y.2d 459, 663 N.E.2d 599, 600, 640 N.Y.S.2d 443 (N.Y. 1996).
 

On calculating the actual amount the court wrote: "The Court does, however, find it necessary to subtract those hours that the firm spent on its motion to withdraw and on this pending motion. Such activities were not in furtherance of obtaining a favorable judgment on behalf of plaintiffs in this case and are thus not properly the subject of the charging lien. See, e.g., Cutner & Assocs., P.C. v. Kanbar, No. 97 Civ. 1902 (SAS), 1998 U.S. Dist. LEXIS 1045, 1998 WL 104612, at *3 (S.D.N.Y. Feb. 4, 1998)

"The Johnson factors are: "(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitation imposed by the client or the circumstances; (8) the amount involved in the case and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the 'undesirability' of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." 488 F.2d at 717-19."

How much does one take on as attorney, and how does that scope of work affect legal malpractice litigation?  In Douglas v. Dashevsky, SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT; 2009 NY Slip Op 4187; 62 A.D.3d 937, ; 880 N.Y.S.2d 667, plaintiff says that she was terminated, and was terminated while disabled.  She retained defendant attorney, and now sues in legal malpractice on the theory that :

"The plaintiff retained the defendant to represent her in a claim against her former employer for wrongfully discharging her as a result of a medical condition. The plaintiff contends that the defendant advised her not to file a claim with her employer's disability carrier and as a result she was denied disability benefits for not filing a timely claim. The defendant moved to dismiss the complaint pursuant [**669] to CPLR 3211(a)(1) and (7). The defendant maintained that the plaintiff retained him solely for the purposes of obtaining a damage award on the wrongful termination claim and restoring her to her prior position. [***2] The defendant argues that the plaintiff's claim that she was disabled at the time and entitled to benefits contradicts the representations that the plaintiff made to him and alleged in her termination action that she was capable of performing her job.

The motion to dismiss was denied.  "Here, the retainer agreements submitted by the defendant do not establish, as a matter of law, that the defendant's obligation was to advise the plaintiff solely with respect to her wrongful termination action against her employer. The one page of the disability carrier's policy along with the complaint from the action alleging wrongful termination fails to conclusively establish that the plaintiff would not otherwise have been entitled to receive benefits under the policy, had she filed a timely claim.""The action is not barred by the doctrine of judicial estoppel since the plaintiff's action predicated upon wrongful termination was settled and did not result in a judgment (see Kimco of [*939] New York, Inc. v Devon, 163 AD2d 573, 575, 558 N.Y.S.2d 630).

What is obvious to one is a judgment call to another.  in Noone v Stieglitz ;2009 NY Slip Op 01093 ; 59 AD3d 505]  February 10, 2009 ;Appellate Division, Second Department we see a plaintiff involved in a motor vehicle accident.  Defendant in that MV case claimed that it was forced out of its lane into plaintiff's lane by an errent cab.  When the target attorney says that such a decision was a "judgment call" it often carries the day.
 

Case went to trial, and there was strong evidence for plaintiff, strong enough for plaintiff and defendant to enter into a high/low agreement while awaiting the jury.  High was $ 1 million and low was $ 500,000.  Verdict was for defendant, and plaintiff received the $ 500,000.

Plaintiff sues the attorneys on the theory that a map of the accident site would have demonstrated that there was no place from which a cab could have come, and if a map had been introduced in evidence, there would inevitably have been a plaintiff''s verdict.

"The respondents moved for summary judgment on the grounds, inter alia, that the plaintiff was advised of the consequences of the high-low settlement on the record in the underlying action, their strategy was to rely upon the favorable testimony of a nonparty eyewitness, and submitting a map of the road would not have helped the plaintiff's case. The respondents noted that at the trial in the underlying action, the plaintiff's position was that if there was no shoulder, there was no place for the yellow car to come from, but if there was some sort of shoulder, the defendant in the underlying action should have used the shoulder rather than the plaintiff's lane to avoid the yellow car.

The Supreme Court granted the respondents' motion for summary judgment dismissing the complaint insofar as asserted against them, noting that the respondents "offered a reasonable trial strategy as to why they did not submit the maps and diagrams." The plaintiff appeals.

To establish a claim 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" (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007], quoting McCoy v Feinman, 99 NY2d 295, 301-302 [2002])."Attorneys are free to select among reasonable courses of action in prosecuting clients' cases without thereby exposing themselves to liability for malpractice" (Iocovello v Weingrad & Weingrad, 4 AD3d 208, 208 [2004]; see Rosner v Paley, 65 NY2d 736, 738 [1985]). Here, the respondents established their entitlement to judgment as a matter of law by demonstrating that they were pursuing a reasonable trial strategy. Further, they demonstrated that the plaintiff was advised of the consequences of the high-low settlement. In opposition, the plaintiff failed to raise a triable issue of fact.

in Williams v Omrani & Taub, P.C. ;2009 NY Slip Op 51832(U) ;Decided on August 25, 2009 ;Supreme Court, Kings County ;Rivera, J. rendered a tri-partate decision, reviewing a dismissal motion pursuant to CPLR 3211(a)(1)  (a)(5) and  (a)(7).  Reading like a thriller, first the court denies dismissal on documentary grounds by the unusual reasoning:
 

"On a motion to dismiss based upon documentary evidence, dismissal is only warranted if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law" (Klein v Gutman, 12 AD3d 417, 418 [2004]; CPLR 3211 [a] [1]; see also Saxony Ice Co., Div. of Springfield Ice Co., Inc. v Ultimate Energy Rest. Corp., 27 AD3d 445 [2006]). A complaint containing factual claims that are flatly contradicted by documentary evidence should be dismissed (Well v Rambam, 300 AD2d 580, 581 [2002]; Kenneth R. v Roman Catholic Diocese of Brooklyn, 229 AD2d 159, 162 [1997], cert. denied 522 US 967 [1997]). However, in considering a motion to dismiss, the plaintiff's pleadings must be given their most favorable intendment (Arrington v New York Times Co., 55 NY2d 433, 442 [1982]), and the plaintiff's allegations which are contrary to the documentary evidence must be accepted (Scheller v Martabano, 177 AD2d 690 [1991]).

Here, defendants rely on documentary evidence that allegedly conclusively demonstrates that defendants' representation of plaintiff ended prior to April 12, 2005 (rendering the instant action untimely). However, this court must accept the sworn statement of plaintiff's current counsel, who stated that pursuant to a referral arrangement, Omrani (and, by extension, Fink), continued to represent plaintiff until December 20, 2007"
 

For the same reasons, the court denied plaintiff's CPLR 3211(a)(5) motion on S/L grounds.

However, and contrary to this reader's expectation as the decision was followed, the court dismissed under CPLR 3211(a)(7).

"The Second Department of the Appellate Division recently stated in Kluczka v Lecci (63 AD3d 796 [2009]) that:

"[i]n order to prevail in an action to recover damages for legal malpractice, a plaintiff must establish that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]; Malik v Beal, 54 AD3d 910, 911 [2008]; Carrasco v Pena & Kahn, 48 AD3d 395, 396 [2008]). To establish the element of 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 attorney's negligence (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442; Wray v Mallilo & Grossman, 54 AD3d 328, 329 [2008]; Carrasco v Pena & Kahn, 48 AD3d at 396). The failure to demonstrate proximate cause requires dismissal of a legal malpractice action regardless of whether the attorney was negligent (see Leder v Spiegel, 31 AD3d 266, 267-268 [2006], affd 9 NY3d 836 [2007])" (id. at 797).

Here, plaintiff cannot show either that defendants failed to exercise reasonable attorney skill and knowledge or the requisite causation. First, although plaintiff conclusorily states that "defendants have offered no defense or explanation" for their failure to file the Reliance proof of claim, the court notes that there is in fact a defense and explanation—the failure of outgoing counsel Don Carlos Jr. to transfer the subject file to Omrani until after March 17, 2004. Indeed, given that Omrani (and, by extension, Fink) did not possess the file before December 31, 2003, it would have been difficult, if [*7]not impossible, for Omrani to file the subject proof of claim before the deadline. Thus, plaintiff has failed to plead facts that demonstrate defendants breached the duty of professional legal representation. "

This is part 3 of a series based on the case of ASTON BAKER,  -against- CHARLES SIMPSON, ESQ., WINDELS MARX LANE & MITTENDORF, LLP, STANLEY GALLANT, GALSTER CAPITAL LLC, GARLSTER MANAGEMENT CORP., ALLSTATE INSURANCE COMPANY, AND JP MORGAN CHASE BANK, N.A.,

Here the court discusses the "abstention" question, whether the court should permit state court actions to go on, or to remove them to the Bankruptcy court as a "core" issue.

"Appellant contends that, even if the bankruptcy court had jurisdiction over his claims, it should have abstained from hearing the state court action. Section 1334(c)(1) [*16] gives the district court the power to abstain from hearing civil proceedings arising under Title 11, or arising in or related to cases under Title 11 "in the interest of justice, or in the interest of comity with State courts or respect for State law." 28 U.S.C. § 1334(c)(1). This section "is informed by and interpreted according to 'the principles developed under the judicial abstention doctrine,'" which impose on federal courts a "virtually unflagging obligation . . . to exercise the jurisdiction given them." Norkin, 2006 U.S. Dist. LEXIS 14254, 2006 WL 839079, at *5 (citations omitted). Accordingly, federal courts "may abstain only for a few 'extraordinary and narrow exceptions.'" Id. (quoting Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976)).

Courts often apply a twelve-factor test, or some variation of it, to decide whether to abstain from hearing a lawsuit related to a bankruptcy under Section 1334(c)(1). See, e.g., In re Bay Point Assocs., No. 07 Civ. 1492 (JS), 2008 U.S. Dist. LEXIS 108402, 2008 WL 822122, at *2-3 (E.D.N.Y. Mar. 19, 2008); In re Twin Labs. Inc., 300 B.R. 836, 841 (S.D.N.Y. 2003). The twelve factors are:
(1) the effect or lack thereof on the efficient administration of the estate if a Court [*17] recommends abstention, (2) the extent to which state law issues predominate over bankruptcy issues, (3) the difficulty or unsettled nature of the applicable state law, (4) the presence of a related proceeding commenced in state court or other nonbankruptcy court, (5) the jurisdictional basis, if any, other than 28 U.S.C. § 1334, (6) the degree of relatedness or remoteness of the proceeding to the main bankruptcy case, (7) the substance rather than form of an asserted "core" proceeding, (8) the feasibility of severing state law claims from core bankruptcy matters to allow judgments to be entered in state court with enforcement left to the bankruptcy court, (9) the burden [on] the court's docket, (10) the likelihood that the commencement of the proceeding in bankruptcy court involves forum shopping by one of the parties, (11) the existence of a right to a jury trial, and (12) the presence in the proceeding of nondebtor parties.
See In re Twin Labs. Inc., 300 B.R. at 841 (citations omitted). Here, these twelve factors do not favor discretionary abstention.

Most significantly, although appellant's causes of action "are styled as New York State law claims, they turn largely on issues that [*18] are intertwined" with his bankruptcy, including the propriety of Simpson and Windel Marx's advice regarding his bankruptcy proceedings. Norkin, 2006 U.S. Dist. LEXIS 14254, 2006 WL 839079, at *5. In Norkin, which also involved allegations of legal malpractice for advice rendered by a law firm during a debtor's Title 11 proceedings, the court refused to exercise discretionary abstention because "[s]tate law issues do not predominate here," and where such issues did arise, "they are in the well settled areas of professional malpractice, negligence, and breach of fiduciary duty." Id. A similar conclusion is warranted here."

We reviewed this case in part yesterday.  Here is the balance of the case, ASTON BAKER, , -against- CHARLES SIMPSON, ESQ., WINDELS MARX LANE & MITTENDORF, LLP, STANLEY GALLANT, GALSTER CAPITAL LLC, GARLSTER MANAGEMENT CORP., ALLSTATE INSURANCE COMPANY, AND JP MORGAN CHASE BANK, N.A.,

Curiously, Footnote 3 seems to say that the entire case has been dismissed. ":FOOTNOTES

3 In addition to denying appellant's motion to remand, the bankruptcy court also dismissed appellant's case in its entirety. (See Tr. at 18:24-19:6.) Indeed, appellee JP Morgan Chase invites the court to consider on appeal whether the bankruptcy court properly dismissed the underlying action. However, Appellant does not challenge the merits of the bankruptcy court's dismissal of the complaint, but rather limits his appeal to review of the bankruptcy court's assertion of jurisdiction over this matter and its refusal to abstain from considering the same. Accordingly, the court need not address the merits of appellant's substantive claims."

However: "Appellant contends that the bankruptcy court's jurisdiction over his claims was circumscribed by the disposal of his estate. Once all the property has been disposed of, he argues, the Title 11 proceeding terminated, and, with it, the court's original jurisdiction under Section 1334(a) over the instant case.

The court finds that the disposal of appellant's estate is immaterial to the jurisdictional issue for two reasons. First, "a bankruptcy court retains post-confirmation jurisdiction to interpret and enforce its own orders, particularly when disputes arise over a bankruptcy plan of reorganization." In re Millenium Seacarriers, Inc., 419 F.3d 83, 96 (2d Cir. 2005) (internal quotation [*11] marks omitted). Second, the Title 11 case ends only when it is closed under Section 350(a) of Title 11, and not, as appellant argues, with disposition of the estate. See 11 U.S.C. § 350(a) (2006).

The question of whether the bankruptcy court has exclusive jurisdiction over appellant's claims is similarly immaterial, as is appellant's assertion that it is unlikely that his state court claims will have any conceivable effect on the bankruptcy case. For this court to uphold the exercise of jurisdiction, the bankruptcy court need not have exclusive jurisdiction under Section 1334(a), or find that appellant's claims are "related to" his bankruptcy petition. As set forth below, the court finds that appellant's claims are civil proceedings arising in a case under Title 11, and are thus subject to the bankruptcy court's jurisdiction under Section 1334(b). 28 U.S.C. § 1334(b).

District courts in this circuit have found that "[a] matter 'arises in' [T]itle 11 when 'the gravamen of the proceeding arises in the particular bankruptcy case and would have no existence outside of bankruptcy,'" even if the matter is not based on any right expressly created by Title 11. D.A. Elia Constr. Corp. v. Damon & Morey, LLP, 389 B.R. 314, 317 (W.D.N.Y. 2008) [*12] (citation omitted). Since claims arising out of services rendered in connection with a debtor's bankruptcy proceeding "are inextricably connected to the bankruptcy proceeding," courts generally find "no bar, statutory, constitutional, or otherwise, to the [b]ankruptcy [c]ourt exercising jurisdiction" over such claims. In re SPI Commc'ns & Mktg., Inc., 114 B.R. at 18.

For instance, in D.A. Elia Construction Corp., a plaintiff asserted various claims against a law firm for failure to provide adequate legal representation in connection with a Title 11 petition and related proceedings, alleging, inter alia, legal malpractice and conversion of funds belonging to the bankruptcy estate. 389 B.R. at 317. The district court found that "there can be no doubt that all of [plaintiff's] state law claims 'arise in' the bankruptcy proceeding within the meaning of 28 U.S.C. § 1334 . . . But for [the law firm's] representation of [plaintiff] in the bankruptcy case, there would be no cause of action." Id.

Similarly, in Norkin v. DLA Piper Rudnick Gray Cary, LLP, a plaintiff sued a defendant law firm alleging legal malpractice and breach of fiduciary duty for advice rendered during his personal bankruptcy [*13] and the bankruptcy of a company that he owned and managed. 05 Civ. 9137 (DLC), 2006 U.S. Dist. LEXIS 14254, 2006 WL 839079 (S.D.N.Y. March 31, 2006). The district court upheld the exercise of jurisdiction over state law claims by a bankruptcy court, finding, inter alia, that because some of the claims "arise out of advice provided by [law firm] to [plaintiff] in his bankruptcy proceeding, they cannot be considered independent of that petition." 2006 U.S. Dist. LEXIS 14254, [WL] at *3.

Here too, the gravamen in each claim is that Simpson and Windels Marx provided substandard legal services in the course of representing appellant in his Title 11 and related legal proceedings. Appellant's case, which asserts claims of legal malpractice, conversion, negligence, fraud and intentional misrepresentation, would have no existence but for the bankruptcy. The bankruptcy court appointed Simpson and Windels Marx as bankruptcy counsel, and appellant's relationship with all appellees arose only in connection with his Title 11 proceeding. The Galster mortgage loans that appellant complains about were authorized and approved by the bankruptcy court, as were the allegedly fixed auction sales. Moreover, to the extent that Simpson made misrepresentations during [*14] a bankruptcy court hearing and fraudulently or negligently added certain tenants to his list of creditors, this claim is inseparable from the bankruptcy context. With respect to appellant's claims concerning the collection and disbursement of insurance proceeds, appellees respond that the JP Morgan Chase account and insurance proceeds were handled pursuant to and consistent with bankruptcy court orders. (See Tr. 12:2-21; 18:2-5.) The alleged malpractice thus implicates the integrity of the entire bankruptcy process. As such, appellant's claims "arise in" the Title 11 case, and Section 1334(b) clearly gives the bankruptcy court jurisdiction over them. See Elia Constr. Corp., 389 B.R. at 318.

Although the Second Circuit has not directly considered whether claims of professional malpractice based on services rendered pursuant to a Title 11 petition fall within Section 1334's scope of jurisdiction, this court's holding is consistent with the conclusions reached by other circuit courts addressing the issue. See, e.g., In re Seven Fields Dev. Corp., 505 F.3d 237, 259, 262 (3d Cir. 2007) (internal quotation marks omitted) (finding that state law "claims of professional malpractice . . . based [*15] on services provided during the bankruptcy, under the supervision of, and subject to the approval of, the bankruptcy court," are subject to the court's Section 1334(b) "arising in" jurisdiction); In re V&M Mgmt., Inc., 321 F.3d 6, 7 (1st Cir. 2003) (where allegations of fraud, professional malpractice, and breach of fiduciary duties by legal counsel "wholly arise out of the . . . counsel's performance of their duties with respect to the Debtor after the petition for bankruptcy was filed," such claims are subject to the court's jurisdiction under Section 1334(b)); Grausz v. Bradford, 321 F.3d 467, 469 (4th Cir. 2003) (holding that the district court had bankruptcy jurisdiction over a professional malpractice action filed by a Title 11 debtor against the law firm that represented him in his bankruptcy case under Section 1334(b) "because the malpractice claim arose in the bankruptcy case"); see also In re Southmark Corp, 163 F.3d 925, 931 (5th Cir. 1999); In re Ferrante, 51 F.3d 1473, 1476 (9th Cir. 1995)."

When may plaintiff bring a state court action for legal malpractice and when may it be removed, as a "core" proceeding, to US Bankruptcy Court.  It's an involved question, and ASTON BAKER,  -against- CHARLES SIMPSON, ESQ., WINDELS MARX LANE & MITTENDORF, LLP, STANLEY GALLANT, GALSTER CAPITAL LLC, GARLSTER MANAGEMENT CORP., ALLSTATE INSURANCE COMPANY, AND JP MORGAN CHASE BANK, N.A.,   08-CV-1855 (DLI);
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK;
2009 U.S. Dist. LEXIS 73098;August 18, 2009,  discusses this issue.

"On February 8, 2002, Simpson and Windels Marx, the law firm to which Simpson belonged, were appointed by the bankruptcy court as counsel for appellant and two additional entities for which appellant was the sole or controlling shareholder, in their jointly administered Title 11 cases. (See Order Authorizing Retention of Windels Marx Lane & Mittendorf [*3] as Attorney for Debtor-in-Possession, Dkt. # 20.) Appellant brings claims related to legal malpractice, conversion, negligence, fraud and intentional misrepresentation, based primarily on four incidents that occurred during the course of Simpson's engagement as counsel in connection with appellant's bankruptcy petition.

First, appellant independently found a broker that allegedly would refinance all his properties and net him enough money to pay off his creditors. On the advice of Simpson, appellant did not retain such broker, and, instead, refinanced through appellee Galster Capital LLC ("Galster"), whose services were procured by Simpson. The bankruptcy court issued three orders, dated April 17, 2003 (Dkt. # 142), June 4, 2004 (Dkt. # 207), and July 2, 2004 (Dkt. # 214), authorizing and approving mortgage loans from Galster to appellant. Appellant now claims that Galster misrepresented itself as a lender, and, after two years, failed to fund the loan as agreed, causing appellant to forgo offers from other prospective lenders, incur legal fees, and accrue interest on his debt.

Second, at the inception of the Title 11 case, during a status conference before the bankruptcy court, Simpson [*4] allegedly misrepresented that appellant was holding security deposits for the tenants at one of the buildings that formed part of appellant's bankruptcy estate. Simpson then allegedly produced a document bearing appellant's forged signature to substantiate said misrepresentation. As a result, all tenants were erroneously added to appellant's list of creditors pursuant to Rule 1007-1 of the Eastern District of New York's Local Bankruptcy Rules.

Third, Simpson allegedly arranged an auction sale of two of appellant's commercial properties that resulted in winning bids by Simpson's friends or affiliates. Although appellant alleges that Simpson arranged these sales without communicating to appellant his intent to proceed, the record shows that at least one of these sales was approved by the bankruptcy court. (See Order Granting Mot. to Sell Free and Clear of Liens Real Property located at 1801 Pitkin Avenue, Brooklyn, NY on April 23, 2002, Dkt. # 37.) After a prospective buyer moved to reopen the sale, the bankruptcy court issued an order on May 3, 2002 vacating the original sale and scheduling a new sale on notice. (See Decision and Order Granting Mot. to Vacate the Oral Decision of the [*5] Court on April 23, 2002, Approving the Sales of Pitkin Avenue Property & Forest Avenue Property, Dkt. # 52.) 1 The winning bids were for significantly higher amounts than those offered in the initial, allegedly fixed auction arranged by Simpson.

"Appellant contends that the bankruptcy court's jurisdiction over his claims was circumscribed by the disposal of his estate. Once all the property has been disposed of, he argues, the Title 11 proceeding terminated, and, with it, the court's original jurisdiction under Section 1334(a) over the instant case.

The court finds that the disposal of appellant's estate is immaterial to the jurisdictional issue for two reasons. First, "a bankruptcy court retains post-confirmation jurisdiction to interpret and enforce its own orders, particularly when disputes arise over a bankruptcy plan of reorganization." In re Millenium Seacarriers, Inc., 419 F.3d 83, 96 (2d Cir. 2005) (internal quotation [*11] marks omitted). Second, the Title 11 case ends only when it is closed under Section 350(a) of Title 11, and not, as appellant argues, with disposition of the estate. See 11 U.S.C. § 350(a) (2006).

The question of whether the bankruptcy court has exclusive jurisdiction over appellant's claims is similarly immaterial, as is appellant's assertion that it is unlikely that his state court claims will have any conceivable effect on the bankruptcy case. For this court to uphold the exercise of jurisdiction, the bankruptcy court need not have exclusive jurisdiction under Section 1334(a), or find that appellant's claims are "related to" his bankruptcy petition. As set forth below, the court finds that appellant's claims are civil proceedings arising in a case under Title 11, and are thus subject to the bankruptcy court's jurisdiction under Section 1334(b). 28 U.S.C. § 1334(b).

District courts in this circuit have found that "[a] matter 'arises in' [T]itle 11 when 'the gravamen of the proceeding arises in the particular bankruptcy case and would have no existence outside of bankruptcy,'" even if the matter is not based on any right expressly created by Title 11. D.A. Elia Constr. Corp. v. Damon & Morey, LLP, 389 B.R. 314, 317 (W.D.N.Y. 2008) [*12] (citation omitted). Since claims arising out of services rendered in connection with a debtor's bankruptcy proceeding "are inextricably connected to the bankruptcy proceeding," courts generally find "no bar, statutory, constitutional, or otherwise, to the [b]ankruptcy [c]ourt exercising jurisdiction" over such claims. In re SPI Commc'ns & Mktg., Inc., 114 B.R. at 18."
 

As we have reported before, sometimes legal malpractice cases arise by action of the plaintiff, and sometimes they arise after the attorney sues for legal fees.  Courts often take the later situation as a "reflexive" or "defensive" maneuver, and may not always believe that the client is genuinely prosecuting a legal malpractice case so much as avoiding paying a fee. 

In this case, it appears that the Appellate Division came down half-way between the two poles.  Bender Burrows & Rosenthal, LLP v Simon ;2009 NY Slip Op 06296 ;Decided on August 25, 2009 ; Appellate Division, First Department holds that plaintiff, who is defending a fee claim, is unable to prove legal malpractice, but has demonstrated a question of whether the law firm is aptly holding escrowed monies or not.

"Defendant's first counterclaim for malpractice should have been dismissed since she failed to demonstrate that she would have succeeded on the merits of the underlying action for divorce but for plaintiff's negligence (Maillet v Campbell, 280 AD2d 526, 527 [2001]). Defendant was not prejudiced by plaintiff's mid-trial motion to withdraw. On defendant's earlier appeal from the judgment of divorce (55 AD3d 477 [2008]), this Court found that the trial court appropriately exercised its discretion in granting a five-day adjournment rather than the longer one requested by defendant's counsel since successor counsel had nearly a month to prepare for trial. Moreover, although this Court remanded the matter for recalculation of the parties' respective child support obligations and a finding as to the cost of health insurance for defendant at the predivorce level of coverage, it found defendant's arguments relating to the classification, valuation and distribution of property and the award of maintenance unavailing (id. at 478). Cruciata v Mainiero (31 AD3d 306 [2006]), which was decided on the specific facts of that case, is not to the contrary.

As to defendant's second counterclaim seeking recovery of her escrow funds, the motion court aptly concluded that there are triable questions of fact as to what agreement, if any, the parties had reached as to the disposition of those funds. [*2]"

The New York Court of Appeals determined that a medical insurance provider has the right to intervene in a personal injury case to protect its right to subrogation and to assert  "lien" on the proceeds of the case.  In a well researched article, J. Michael Hayes writes:

"Recent developments have changed the way that lien law is applied given Arkansas Department of Health and Human Services v. Ahlborn, 126 S.Ct. 1752 (2006) and Fasso v. Doerr, MD, et al., 12 NY3d 80, 875 NYS2d 846 (2009). Medicare, Medicaid and Workers' Compensation carriers claim they are entitled to full recovery of their expenses under the lien statutes. The reality is that recent decisions in Ahlborn and Fasso, combined with New York's shift to comparative negligence and itemized verdicts since the 1970s, confirm that at best, they have a right of apportionment for their "subrogation" claims.

Whether the right is a lien or subrogation affects the relationships between the co-claimants and the attorney as well as his fees. If these constitute subrogation rights then the attorney is clearly representing two claimants, negotiating an aggregate settlement and taking a fee from each. A conflict arises because the attorney must reduce/assign part of his client's recovery to the insurance carrier for medical expenses. Ethically, an attorney is barred from representing more than one party where there may be a lump sum award that has to be divided/allocated. "

For as long as there have been attorneys, it seems that there have been fee disputes.  Fee disputes and legal malpractice counterclaims go together like, well you fill in the simile...love and marriage, horse and carriage...

Here is a case from Nassau which illustrates that question of whether defendant counterclaminant has the right to a jury trial, when plaintiff elects to have a bench trial.

"The plaintiff also submits, essentially, that the defendant waived her right to serve a Demand for Jury pursuant to CPLR §4101, as plaintiff has asserted a cause of action for unjust enrichment, (equitable), along with plaintiff's claim for legal fees, (law), and the defendant has asserted the affirmative defense of estoppel, (equitable), and a counterclaim sounding in breach of fiduciary duty and legal malpractice, (equitable and legal).

"A plaintiff cannot, by artful pleading, deprive a defendant of his constitutionally guaranteed right to a trial by jury by limiting his demand for relief to a declaration of rights instead of seeking whatever coercive relief would be appropriate in enforcing the rights thus established." (Gordon v. Continental Casualty Company, 91 AD2d 987). When the facts pleaded permit a judgment for a sum of money, the defendant's jury demand must be honored under CPLR §4101 despite plaintiff's framing his demand for relief in equity. (Id.) Where one cause of action seeks equity, and another law, the plaintiff may have waived its right to a jury trial, but the plaintiff cannot deprive defendant of its rights to a jury trial of all issues so triable. (L.C.J. Realty Corp. v. Back, 37 AD2d 840). An executor was held to be entitled to a jury trial on a legal malpractice claim even where the attorney fee proceeding was equitable. (Sackler v. Breed, Abbott & Morgan, 222 AD2d 9). In Behrins & Behrins, P.C. v. Chan, 15 AD3d 515, following a divorce action, the law firm that represented the wife brought an action against her seeking payment of outstanding attorney fees. The wife also brought a legal malpractice action against the firm and made a jury demand on both actions. The Second Department reversed the lower court's decision that held that the wife was not entitled to a jury trial on such claims. The Court found that plaintiff's action involved actions at law seeking money judgments, and thus the wife was entitled to a jury trial. (Id.) The Court also stated that although the jury may have to incidentally have to examine a prior equitable distribution award, it is irrelevant as the jury is not being called upon to change the prior distribution of the assets between the appellant and her former husband. (Id.)

Here, the defendant is entitled to a jury trial as the defendant has asserted a counterclaim sounding in malpractice, and the plaintiff's action seeks a money judgment from the defendant in order to recoup its legal fees in connection with the plaintiff's representation of the defendant in her divorce action.

In light of the foregoing, the plaintiff's motion is denied."

Often, the only way plaintiff knows whether target attorney defendant has legal malpractice insurance is by the name of the attorneys who answer the complaint.  If they are attorneys who normally are retaied by legal malpractice insurance carriers, then plaintiff knows there is insurance.  If not, then there is trouble brewing.  What happens if the attorney simply is out of the picture, and completely refuses to answer any correspondence, and never notifies his carrier?

McCabe v St. Paul Fire & Mar. Ins. Co. ;2009 NY Slip Op 29341 ;Decided on August 19, 2009 ;Supreme Court, Erie County ;Nemoyer, J. is one such case.  "Factually speaking, the focus of the motion and cross motion is on the repeated efforts by plaintiffs to communicate with Fretz, the eventual communications by both Fretz and plaintiffs with St. Paul, and St. Paul's responses to those communications. Apparently, plaintiffs' first attempt to communicate with Fretz following his catastrophic neglect of their insurance claim came in late September 2006, after plaintiffs had consulted with attorney John J. Fromen for the purpose of engaging in such communication. Plaintiffs apparently do not contend that Fromen's September 22, 2006 letter to Fretz constituted the making of a claim against Fretz, so this Court will not summarize that letter. It is enough to note that Fretz did not respond to Fromen's entreaties to contact Fromen with regard to plaintiff's matter. "

"The fundamental question is whether the instant policy insuring Fretz against liability for attorney malpractice is a "policy or contract insurance liability for injury to person," within the meaning of Insurance Law § 3420 (a). St. Paul says that it is not, relying on a decision of the Federal District Court in Sirignano v Chicago Ins. Co. (192 F Supp 2d 199, 206-207 [SDNY [*6]2002]). The Court cannot accept that contention for several reasons. First, Sirignano was concerned with the applicability to a malpractice insurance policy of Insurance Law § 3420 (d) — which pertains to the timeliness of a disclaimer by an insurer of a liability for "death or bodily injury" arising out of an "accident" — not the discernibly distinct provisions of section 3420 (a), which are by no means limited to "accident" insurance. The same is true with regard to various New York cases cited by St. Paul on this question on the applicability of section 3420 (see e.g. Doyle v Siddo, 54 AD3d 988, 989 [2d Dept 2008]; Iafalo v Nationwide Mut. Fire Ins. Co. 299 AD2d 925, 926-927 [4th Dept 2002]; Fairmont Funding Ltd. v Utica Mut. Ins. Co., 264 AD2d 581 [1st Dept 1999]). This case has nothing to do with section 3420 (d). "

"Having determined the applicability of Insurance Law § 3420 (a) (2), it remains for this Court to determine the validity of St. Paul's disclaimer under the policy. St. Paul now contends that it validly disclaimed coverage under the policy on two grounds: first, that no claim was made during the policy period; and second, that no claim was reported to St. Paul during the policy period or the 60-day extension period. The problem for St. Paul is that only the second of those disclaimer grounds was articulated in St. Paul's July 17, 2007 disclaimer letter to Fretz. The pertinent paragraph of the letter stated that St. Paul was denying Fretz any defense and indemnity in the malpractice action on the ground that "this Claim' was neither reported to St. Paul during the Policy Period,' nor was the Claim' or your disability reported within the 60 days following the date of the St. Paul Policy's" lapse. It is of course a fundamental principle of the law in this realm that an insurer's attempt at disclaimer is strictly limited to those grounds articulated in the notice of disclaimer, and that a ground not raised in a disclaimer letter may not be later asserted by the insurer (see General Accident Ins. Co v Cirucci, 46 NY2d 862, 864 [1979]; City of Kingston, Harco Nat. Ins. Co., 46 AD3d 1320, 1321 [3d Dept 2007]; Benjamin Shapiro Realty Co. v Agric. Ins. Co., 287 AD2d 389 [1st Dept 2001]; see also Wraight v Exchange Ins. Co., 234 AD2d 916, 917-918 [4th Dept 1996] [held: where insurer disclaimed coverage based solely upon its insured's failure to provide timely notice, insurer is subsequently estopped from raising the injured party's allegedly untimely notice as a defense in the declaratory judgment action]). Indeed, St. Paul's July 17, 2007 letter explicitly assumed, based on Doyle's representations, that the claim was first made against the insured on January 2, 2007, within the policy period. The Court understands that St. Paul entertained that assumption without having seen the January 2, 2000 letter, but St. Paul's own lack of reasonable investigation into the circumstances is not a ground for departing from the aforementioned principle that the insurer is strictly limited to those disclaimer grounds articulated in the letter of disclaimer (see 2540 Associates, Inc. v Assicurazioni Generali, S.p.A., 271 AD2d 282, 284 [1st Dept 2000] [held: "as a matter of policy, [*8]reasonable investigation is preferable to piecemeal disclaimers"]; see also DiGuglielmo v Travelers Property Cas., 6 AD3d 344, 346 [1st Dept 2004], lv denied 3 NY3d 608 [2004]). Contrary to St. Paul's contention, enforcement of the rule that an insurer's attempt at disclaimer is strictly limited to those grounds articulated in the notice of disclaimer does not involve the creation of coverage where none would otherwise exist. St. Paul's belated attempt to supplement its disclaimer letter to Fretz by adding or resurrecting the "claim not timely made" disclaimer ground — an attempt not made until October 7, 2008, after the commencement of this declaratory judgment action by plaintiffs and indeed following the interposition of St. Paul's answer and counterclaim asserting only that the malpractice claim had not been timely reported — cannot avail for obvious reasons, both procedural and substantive. "{

There are conflicting rules in the 4 departments of New York. In legal malpractice, it is plaintiff's obligation to demonstrate that a hypothetical judgment could be collected in a legal malpractice case in the 2d, 3d and 4th departments. In the First Department, it is an affirmitive defense for defendant to prove.

Here is a procedural case from the 4th Department on the issue. Williams v Kublick
2007 NY Slip Op 04932 Decided on June 8, 2007 Appellate Division, Fourth Department .

"We conclude that Supreme Court erred in granting defendants' motion, and we therefore modify the order accordingly. In granting the motion, the court determined, inter alia, that defendants established as a matter of law that plaintiff is unable to prove that defendants' [*2]negligence is a proximate cause of plaintiff's damages (see Robbins v Harris Beach & Wilcox, 291 AD2d 797, 798). That was error."

"A necessary element of a cause of action for legal malpractice is the collectibility of the damages in the underlying action (see McKenna v Forsyth & Forsyth, 280 AD2d 79, 82-83, lv denied 96 NY2d 720; cf. Lindenman v Kreitzer, 7 AD3d 830, 835). Here, regardless of whether the value of the property was improperly considered by the experts, we conclude that the otherwise conflicting opinions of the experts concerning the value of the assets of the joint venture precluded the court from determining as a matter of law that defendants established that plaintiff is unable to prove that he could collect damages in the underlying lawsuits (see generally Simmons v State Farm Mut. Auto. Ins. Co., 16 AD3d 1117; Herzog v Schroeder, 9 AD3d 669, 670)."

Legal Malpractice cases are dismissed upon a motions on the pleadings.  It happens not infrequently.  It seems that legal malpractice actions are more scrupulously examined for the "but for" portion of the matter than might occur in other aras of the law.

Here is a case in which not only was the case dismissed at pleadings, but it was ruled frivolous as a matter of law.  ACOSTA,, -against- BARRY M. FALLICK & ROCHMAN, PLATZER, FALLICK & STERNHEIM, LLP, 05 Civ. 8254 (KTD);  UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;  2009 U.S. Dist. LEXIS 70878; August 11, 2009, Decided
 

"Plaintiff alleges violations of 41 U.S.C. § 37 and 28 U.S.C. § 1927, but neither of these statutes provide a legal basis for his claims. First, 41 U.S.C. § 37 authorizes the Comptroller General of the United States to distribute to certain government agencies lists of persons who have breached public contracts. See 41 U.S.C. § 37. The fee agreement in this case is not a public contract, so it is not covered under the statute. Further, the statute does not authorize a private right of action or money damages at all.

Second, 28 U.S.C. § 1927 provides that an "attorney . . . who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." 28 U.S.C. § 1927. In this case, Plaintiff alleges facts opposite to the evil that the statute seeks to prevent--unreasonable and vexatious expansion of litigation. See id. Plaintiff [*5] alleges that his attorney minimized his criminal proceedings allegedly in violation of the fee agreement by failing to file several motions and inducing Plaintiff to sign a plea agreement.

It is true that when a plaintiff proceeds pro se, I must construe his complaint broadly. See Livingston, 141 F.3d at 437. However, Plaintiff's complaint in this case, broadly construed, alleges only facts most closely resembling state law breach of contract and legal malpractice claims over which this Court does not have subject matter jurisdiction. As Defendants point out, complete diversity is lacking and Plaintiff does not claim more than $ 75,000 in damages, so 28 U.S.C. § 1332(a) cannot provide a basis for jurisdiction. Therefore, as Acosta's complaint lacks any basis in law and is consequently frivolous under 28 U.S.C. 1915 (e) (2) (B) (i), I must dismiss it.

Accordingly, Plaintiff's claims are DISMISSED. "

GABRIEL D'JAMOOS, , v. MICHAEL GRIFFITH, No. 08-3668-cvUNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT;2009 U.S. App. LEXIS 17868;August 12, 2009, discusses termination for cause and the proofs needed:

"Under New York law, an attorney may be dismissed by a client at any time with or without cause." Garcia v. Teitler, 443 F.3d 202, 211 (2d Cir. 2006). "If the discharge is for cause, [*7] the attorney is not entitled to fees." Id. "If, however, the discharge is without cause, the attorney may recover the value of services rendered in quantum meruit," id. at 211-12, "even where the attorney discharged without fault was employed under a contingent fee contract," Universal Acupuncture Pain Servs., P.C. v. Quadrino & Schwartz, P.C., 370 F.3d 259, 263 (2d Cir. 2004) (internal quotation marks omitted). "Poor client relations, differences of opinion, or personality conflicts do not amount to cause, which is shown by impropriety or misconduct on the part of the attorney." Garcia v. Teitler, 443 F.3d at 212.

We identify no error in the district court's conclusion that Griffith was not terminated as a result of such "impropriety or misconduct." Id. D'Jamoos's December 1, 1999 letter releasing Griffith notes plaintiff's "profound dissatisfaction with the [1998 settlement] and the quality of the representation that [he] received." At his deposition, D'Jamoos noted as causes for the termination, inter alia, Griffith's failure to enforce the 1997 settlement, his dissatisfaction with the 1998 settlement, and various trial-related omissions. To the extent these complaints "consist solely [*8] of dissatisfaction with reasonable strategic choices regarding litigation," under New York law, "[s]uch choices do not, as a matter of law, constitute cause for the discharge of an attorney." Callaghan v. Callaghan, 48 A.D.3d 500, 501, 852 N.Y.S.2d 273 (2d Dep't. 2008). Moreover, as the district court rightly emphasized, on March 27, 1998, D'Jamoos expressed, under oath, his agreement with the 1998 settlement. That he subsequently became dissatisfied with that settlement does not constitute "cause" for Griffith's termination warranting D'Jamoos's withholding compensation for counsel's services. To the extent plaintiff also cites certain litigation and enforcement delays that might support termination for cause, plaintiff has failed to offer evidence indicating that such delays were caused by Griffith. Finally, while we have noted that, "[i]f a client who retained an attorney under a contingent-fee agreement discharges that attorney because there is no chance of recovery for the client, the discharge may be for cause, and the attorney may not be entitled to fees in quantum meruit," Universal Acupuncture Pain Services, P.C. v. Quadrino & Schwartz, P.C., 370 F.3d at 265 n.7, we agree with the district [*9] court that the record does not demonstrate this to be such a case."
 

A common law retaining lien entitles the outgoing attorney to retain all papers, securities, or money belonging to the client that came into the attorney's possession in the course of representation, as security for payment of attorney's fees. Arising from Judiciary Law 475, it is enforceable only by retention of the items themselves and is lost if the file or documents are no longer in the attorney's possession.

A charging line similarly arises and attaches to any recovery and thus secures the attorney's right to compensation. A hearing will be held to determine fees, based upon Quantum meruit

Quantum meruit</em></strong> is the fair and reasonable value of the services rendered, which may be more or less than the amount provided in the contract or retainer agreement and is determined by "taking into consideration the character of the services, the nature and importance of the litigation, the degree of responsibility imposed or incurred, the amount or value involved, the length of time spent, the ability skill and experience required and exercised, the character, qualifications and standing of the attorney and the results achieved. The recovery is not limited to the amount billed, the original terms of the retainer agreement, and may be less or more than the amount which might have been recovered under a contingency fee or other measuring tools of fees.
 

One answer to this question is found in Carl v, Cohen,  NY Slip Op 31747(u), a decision by Justice Edmead.  Here defendants Joel Cohen and Greenberg Traurig, LLP reached a "so ordered" stipulation concerning depositions of subsequent attorneys, against whom, presumably, defendants would either like to bring a third-party action, or to say that these subsequent attorneys could have saved the day, and who had a "last clear-chance."  Depending on that stipulation, which concerned depositions of the subsequent attorneys, defendants Cohen and Greenberg Traurig asked Justice Edmead to hold off on other depositions.  Defendants argued that a motion on whether the attorney-client privilege would be invaded be held off in view of the stipulation.

The Court acknowledged that there was indeed a stipulation, but determined that it could decide the motion, and that because plaintiff was willing to authenticate documents, that no deposition of the subsequent attorneys was necessary.  Accordingly, defendant's attorneys will not get to ask the subsequent successor attorneys any questions.

In Fielding v Kupferman ;2009 NY Slip Op 06151 ;Decided on August 11, 2009 ;Appellate Division, First Department  we see a reversal of a dismissal in Supreme Court.  The facts are uncomplicated.  Wife sues for divorce and husband hires target attorney.  A settlement is reached, and the couples funds are accurately set forth in the settlement agreement.  H's funds are mostly in a "Profit Sharing Keogh Account" which is characterized as "immediately available,"  The funds were not, and plaintiff suffered a significant tax burden in withdrawing the funds to satisfy the settlement of the divorce.

Defendant moved to dismiss, and Supreme Court granted the motion.  In reversing, the AD wrote:

"Here, not only are the allegations of the giving of incorrect advice sufficient and nonconclusory, as noted above, the documentary evidence provides significant support for plaintiff's claim. It clearly establishes that the overwhelming majority of plaintiff's funds, including the amount necessary to satisfy the obligation to his wife, were not, as characterized by the stipulation, "immediately available." Plaintiff alleges that he did not know that under the applicable tax laws the necessary funds were not "immediately available" — we must accept that allegation as true (see Leon v Martinez, 84 NY2d 83, 87 [1994]) —- and that a reasonably competent matrimonial attorney who read the stipulation would not have advised him to sign it. Given these allegations, the stipulation may constitute evidence of defendants' negligence and does not constitute a defense to the malpractice claim (see Mandel, Resnik & Kaiser, P.C. v E.I. Elecs., Inc., 41 AD3d 386 [2007]; IMO Industries Inc. v Anderson Kill & Olick, 267 AD2d 10 [1999]). "

"Defendants' documentary evidence not only fails to refute plaintiff's allegations [*3]conclusively, it supports plaintiff's claim of malpractice in a key respect. The stipulation identifies four accounts in plaintiff's name representing his financial assets and states that $894,530 of the total ($1,258,854) is in a "Profit Sharing Keogh Account," a retirement account that has specific rules regarding the withdrawal of funds and requires that significant taxes be paid upon preretirement withdrawal. Thus, the stipulation makes clear that the sum of money that plaintiff needed to comply with its requirements was not "immediately available," yet defendants advised plaintiff to sign it. Given that the ground for plaintiff's claim of malpractice is apparent from the face of the stipulation, the allegations contained in the complaint are not conclusory and plaintiff properly has pleaded a cause of action for legal malpractice. "

From Gina Passarella at  the Legal Intelligencer today:  Blank Rome settles a huge legal malpractice law suit brought by a bankrutpcy trustee.

"Blank Rome has entered into a $20 million agreement with the trustee of a former client that is now in bankruptcy to settle a complaint that alleged breach of fiduciary duty, professional malpractice and breach of contract claims against the firm.

The settlement, reached in the Philadelphia Common Pleas Court case Miller v. Blank Rome, was approved by U.S. Bankruptcy Judge Mary F. Walrath for the District of Delaware on July 28.

Walrath is overseeing the bankruptcy of American Business Financial Services, which is involved in a string of litigation in both state and federal court stemming from its bankruptcy and business dealings.

Blank Rome does not admit any liability or wrongdoing in agreeing to the settlement, according to the agreement.

"Blank Rome has expressly denied and continues to deny all allegations of any wrongdoing or liability against it whatsoever arising out of any of the conduct, statements, acts or omissions alleged, or that could have been alleged by the Trustee," the settlement agreement reads.

"Nonetheless, Blank Rome has concluded that further conduct of the Blank Rome Litigation would be protracted, expensive and distracting and that it is desirable that the Blank Rome Litigation be settled. Blank Rome has also taken into account the uncertainty and risks inherent in any litigation, especially in complex cases such as the Blank Rome Litigation."

Blank Rome represented ABFS in a variety of legal matters prior to the company's January 2005 Chapter 11 bankruptcy filing and acted as debtors' counsel in the Chapter 11 proceeding. The bankruptcy was converted to a Chapter 7 in May 2005 and George L. Miller was named trustee of the ABFS estate, according to the agreement.

Miller filed suit — Miller v. Santilli — in Philadelphia Common Pleas Court against former officers and directors of ABFS in July 2006 as well as a number of financial institutions. Those financial institutions joined accounting firm BDO Seidman. [Read more in The Legal this week about BDO Seidman's defeat of a class action motion in the related federal court case.] "

What are the elements of Professional 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."

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.
 

Plaintiff has a right to sue target attorney, and then, for strategic reasons, agrees to put the case aside for the time being.  Plaintiff and target attorney reach a stand-still agreement, but the question of tolling or abatement of  the statute of limitations remains.  How is the statute of limitations calculated in this situation?

In  CMI Capital Mkt. Inv., LLC v Buchanan Ingersoll & Rooney P.C., 2009 NY Slip Op 31708(u) we see Justice Tolub's definitions and answer.  In that case, the statute of limitations was tolled, not abated.  Tolling is the suspension of the running of a statute for a period of time.  Abatement is the ending of the statute, allowing for it to start running again, from the beginning.

Both parties wanted to "temporarily suspend the running of the statute to await the outcome of [other] litigation."  Abatement would "nullify the period of the statute of limitations and for it to run anew at the expiration of the parties agreement."

The court then goes on to set forth how one decides whether an agreement is ambiguous:

"Despite CMI's best arguments, contractual language does not become ambiguous simply because the parties to the litigation argue different interpretations. Riverside S. Planning Corp.,60 AD3d 61."

Defendant hired plaintiff to represent him in a Federal Court law suit over NYC placard holders parking on sidewalks and curbs in front of his commercial establishments, depriving defendant of use of his properties.  He retained plaintiff who started the Federal law suit, and was attorney until a settlement conference.  Defendant's story is that he was so taken aback by the negligence of plaintiff, that he settled the case for $ 2,125,000 against the City.

We are amazed that the case settled at all, but confess not to have seen anything by Justice Gische's decision in Bellinson Law LLC. v. Iannucci.  Justice Gische found enough in the motion to deny the attorney's dismissal request.  While the decision does not discuss the shortcomings in any sort of detail, it does give a good blackletter recitation of the standard for a motion to dismiss.

Defendant was required to place the sum of $ 376,000 in escrow pending the outcome of the case.

In MICHAEL S. JOHNSON, DONNA DYMKOWSKI, PATRICIA LONG-CORREA, , -against- NEXTEL COMMUNICATIONS, INC.,  LEEDS, MORELLI & BROWN, P.C.,  , which ws reviewed on Friday we see more of a clutch of definitions which are quite useful:

Breach of Contract:  To state a claim of breach of contract, the plaintiff must establish 1) the formation of a contract between the plaintiff and defendant, 2) performance by the plaintiff, 3) failure by the defendant to perform, and 4) resulting damages. Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d 168, 177 (2d Cir. 2004) (citing Harsco Corp. v. Segui, 91 F.3d 337, 348 (2d Cir. 1996); Furia v. Furia, 116 A.D.2d 694, 498 N.Y.S.2d 12, 13 (2nd Dep't 1986).
To state a claim of breach of contract, the plaintiff must establish 1) the formation of a contract between the plaintiff and defendant, 2) performance by the plaintiff, 3) failure by the defendant to perform, and 4) resulting damages. Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d 168, 177 (2d Cir. 2004) (citing Harsco Corp. v. Segui, 91 F.3d 337, 348 (2d Cir. 1996); Furia v. Furia, 116 A.D.2d 694, 498 N.Y.S.2d 12, 13 (2nd Dep't 1986).
 

Common Law Fraud:, the plaintiff must show that the defendant (1) made a material false representation or omission of an existing fact; (2) defendant made such false representation with knowledge of its falsity; (3) with the intent to defraud; (4) which plaintiffs justifiably relied upon to their detriment. Compudyne Corp. v. Shane, 453 F. Supp. 2d 807, 831 (S.D.N.Y. 2006) (citing Kline v. Taukpoint Realty Corp., 302 A.D.2d 433, 754 N.Y.S.2d 899 (2nd Dep't 2003)); Century Pacific, Inc. v. Hilton Hotels Corp., 528 F. Supp. 2d 206, 217 (S.D.N.Y. 2007) (citing PPI Enters., Inc. v. Del Monte Foods Co., No. 99 Civ. 3794, 2003 U.S. Dist. LEXIS 16006, 2003 WL 22118977, at * 19 (S.D.N.Y. Sept. 11, 2003)). Additionally, in the complaint, the plaintiff must specify the particulars of the alleged [*20] fraud such as the misleading statements along with the speaker, time, place, individuals involved, and specific conduct at issue. Sullivan v. Kodsi, 373 F. Supp. 2d 302, 306 (S.D.N.Y. 2005) (citing United Feature Syndicate, Inc. v. Miller Features Syndicate, Inc., 216 F. Supp. 2d 198, 221 (S.D.N.Y. 2002)); Dover Ltd. V. A.B. Watley, Inc., 423 F. Supp. 2d 303, 317 (S.D.N.Y. 2006) (citing Acito v. IMCERA Group, Inc., 47 F.3d 47, 51 (2d Cir. 1995)).
 

Legal Malpractice:   the plaintiff must show that the attorney acted negligently, such negligence was the proximate cause of the loss sustained, and the loss sustained is actual and ascertainable. Mega Group, Inc. v. Pechenik & Curro, P.C., 32 A.D.3d 584, 819 N.Y.S.2d 796, 798 (3rd Dep't 2006) (citing Ehlinger v. Ruberti, Girvin & Ferlazzo, 304 A.D.2d 925, 758 N.Y.S.2d 195 (3rd Dep't 2003)); Flutie Bros. v. Hayes, No. 04 Civ. 4187, 2006 U.S. Dist. LEXIS 31379, 2006 WL 1379594, at *5 (S.D.N.Y. May 18, 2006) (citation omitted). To qualify as negligence, the conduct of the lawyer [*22] must fall below "the ordinary and reasonable skill and knowledge commonly possessed by a member of the profession." Achtman v. Kirby McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006) (citing Grago v. Robertson, 49 A.D.2d 645, 370 N.Y.S.2d 255 (3rd Dep't 1975). To adequately plead causation, the plaintiff must show that "but for" the attorney's negligence "what would have been a favorable outcome was an unfavorable outcome." Flutie Bros., 2006 U.S. Dist. LEXIS 31379, 2006 WL 1379594, at *5; Even Street Productions, Ltd. v. Shkat Arrow Hafer & Weber, LLP, No. 05 Civ. 3834, 2008 U.S. Dist. LEXIS 42397, 2008 WL 2224297, at *3 (S.D.N.Y. 2008) (citing D'Jamoos v. Griffith, No. 00 Civ. 1361, 2001 U.S. Dist. LEXIS 17595, 2001 WL 1328592, at *5 (E.D.N.Y. Aug. 1, 2001)).
 

Conversion:  conversion is the unauthorized dominion over property by the defendant that interferes with the plaintiff's superior right of possession. U.S. v. New York State Div. Of Lottery, No. 92 Civ. 9001, 2007 WL 1703656, at *4 (S.D.N.Y. Mar. 13, 2007); see Zendler Const. Co. v. First Adjustment Group, Inc., 59 A.D.3d 439, 873 N.Y.S.2d 134, 2009 WL 260905, at *1 (2nd Dep't 2009). To establish a conversion claim, the plaintiff must show: (1) a specific identifiable thing is the subject of the conversion claim; (2) prior to the conversion plaintiff retained ownership or [*26] possession of the property; (3) exercise of unauthorized dominion by the defendant was to the exclusion of the plaintiff's rights. Moses v. Martin, 360 F. Supp. 2d 533, 541 (S.D.N.Y. 2004).
 

This case presents a most unusual fee arrangement and litigation strategy in which the attorneys took on a large number of discrimination cases against a single employer, fashioned a reverse payment strategy for themselves and then settled a large number of discrimination cases through arbitration and other ADR means.  Was this malpractice? 

In MICHAEL S. JOHNSON, DONNA DYMKOWSKI, PATRICIA LONG-CORREA, , -against- NEXTEL COMMUNICATIONS, INC.,  LEEDS, MORELLI & BROWN, P.C., ;07 CV 8473 (GBD); UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 35137;March 31, 2009,  we see a longish explanation of how the attorneys adequately advised their clients and why there was no conflict.  This case is notable for its definitions.

Breach of Fiduciary Duty:  To state a claim for breach of fiduciary duty in New York, 3 "plaintiff must allege three elements: (1) the existence of fiduciary relationship; (2) knowing breach of a duty that relationship imposes; and (3) damages suffered." Nay ex. rel. Thiele v. Merrill Lynch, Pierce, Fenner & Smith, Inc., No. 05 Civ. 10264, 2006 U.S. Dist. LEXIS 52074, 2006 WL 2109467, at *6 (S.D.N.Y. July 25, 2006) [*10] (quoting Carruthers v. Flaum, 388 F. Supp. 2d 360, 380 (S.D.N.Y. 2005)) (internal quotation marks omitted).
 

Common Law Fraud: In New York, to establish common law fraud, the plaintiff must show that the defendant (1) made a material false representation or omission of an existing fact; (2) defendant made such false representation with knowledge of its falsity; (3) with the intent to defraud; (4) which plaintiffs justifiably relied upon to their detriment. Compudyne Corp. v. Shane, 453 F. Supp. 2d 807, 831 (S.D.N.Y. 2006) (citing Kline v. Taukpoint Realty Corp., 302 A.D.2d 433, 754 N.Y.S.2d 899 (2nd Dep't 2003)); Century Pacific, Inc. v. Hilton Hotels Corp., 528 F. Supp. 2d 206, 217 (S.D.N.Y. 2007) (citing PPI Enters., Inc. v. Del Monte Foods Co., No. 99 Civ. 3794, 2003 U.S. Dist. LEXIS 16006, 2003 WL 22118977, at * 19 (S.D.N.Y. Sept. 11, 2003)). Additionally, in the complaint, the plaintiff must specify the particulars of the alleged [*20] fraud such as the misleading statements along with the speaker, time, place, individuals involved, and specific conduct at issue. Sullivan v. Kodsi, 373 F. Supp. 2d 302, 306 (S.D.N.Y. 2005) (citing United Feature Syndicate, Inc. v. Miller Features Syndicate, Inc., 216 F. Supp. 2d 198, 221 (S.D.N.Y. 2002)); Dover Ltd. V. A.B. Watley, Inc., 423 F. Supp. 2d 303, 317 (S.D.N.Y. 2006) (citing Acito v. IMCERA Group, Inc., 47 F.3d 47, 51 (2d Cir. 1995)).
 

In this highly complicated case, COBALT MULTIFAMILY INVESTORS I, LLC, , -against- MARK A. SHAPIRO, et al., Defendants.;06 Civ. 6468 (KMW) (MHD);UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 60481 we see what may turn out to be a blueprint for a legal malpractice niche.  In this case a receiver brings legal malpractice actions against the attorneys for a situation in which "The Complaint alleges that Mark A. Shapiro, Irving J. Stitsky, and William B. Foster (collectively, "Individual Defendants" or "managers") engaged in a massive fraud on the investing public by founding the Cobalt entities and making egregious misrepresentations in order to persuade members of the public to invest millions of dollars in Cobalt. 2 In the written materials disseminated to potential and actual investors, Individual Defendants allegedly misrepresented: (1) their personal and professional backgrounds, such as failing to disclose their past criminal histories; (2) Stitsky and Foster's involvement in Cobalt; (3) their plans for [*4] the investors' funds; and (4) the nature and scope of Cobalt's property holdings. Individual Defendants allegedly appropriated the majority of the funds invested in Cobalt for their own personal use."

This case has already been to a magistrate's hearing, a decision by Judge Kimba Wood, to the 2d Circuit, and now back.  Turning in large part on the Waggoner rule, the question before the court was whether the receiver had standing to sue on behalf of the corporation, or whether the receiver was divested of standing based upon the acts of the managers of the corporation.

"The Complaint alleges that all of Law Firm Defendants assisted the Individual Defendants in committing investor fraud, and in subsequently looting the Cobalt entities of corporate assets. Law Firm Defendants allegedly: (1) approved documents that they should have known contained material misrepresentations; (2) assisted the Individual Defendants in siphoning corporate funds into the Individual Defendants' bank accounts; and (3) helped conceal the Individual Defendants' criminal activities from both investors and law enforcement."
 

We will discuss this rule in upcoming posts.

In ST. PAUL FIRE & MARINE INSURANCE COMPANY, v.SLEDJESKI & TIERNEY, PLLC,;  No 08-CV-5184 (JFB) (ETB);  UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK; 2009 U.S. Dist. LEXIS 61393; July 17, 2009, Decided  we see an excellent discussion of the standard for a 12(b)(6) motion in this post-Iqbal world, as well as a discussion of legal malpractice insurance coverage for defendants. 
 

Here, the insurance company for defendant attorneys wishes to disclaim coverage on the basis of lack of notice.  So far, they are succeeding.  The court denied a 12(b)(6) motion with a fulsome discussion of the new standards there.

The facts are simple:  "Candice Nelson retained that firm to represent her and the Nelson estate for recovery of damages resulting from the death of her husband, Jeffrey Nelson, in a July 26, 2003 motor vehicle accident. (Compl. P 16.) The firm of Michael T. Clifford & Associates thereafter dissolved, and S&T assumed the representation of Candice Nelson and the Nelson estate. (Compl. PP 17-18.) The applicable statute of limitations for recovery of damages for the wrongful death of Jeffrey Nelson expired on July 26, 2005, two years after the death. (Compl. P 19.) On July 26, 2005, S&T filed a summons and complaint in the Supreme Court, Suffolk County, captioned Candice Nelson as proposed Administratrix for the Estate of Jeffrey Nelson, and Candice Nelson, individually, v. Bonnie A. Rubin and Maier A. Rubin (hereinafter, "the wrongful death action"). "

"Prior to the filing of the malpractice action, in October 2007, Tierney mailed a letter to S&T's broker, which St. Paul received on November 8, 2007, regarding the alleged error that could potentially lead to the legal malpractice action" 

Notice, rather than occurrence [service of the malpractice complaint] is important,  "Despite defendants' insistence that the policy is a "claims-made," as opposed to "occurrence-based" policy, discussed in more detail infra, that fact does not change the analysis; although the general rule of a claims-made policy may be that coverage is triggered upon filing of a claim or suit against an insured and/or notice to the insurer thereof, that does [*15] not mean that the potential claim provision cannot provide for an earlier policy period under certain circumstances. It also does not mean that all claims filed during that period are automatically covered by the policy, as then any exclusion policy would be meaningless, and it is clear under New York law that the policy should be interpreted to give meaning and effect to all of the provisions, if possible."

Fraud is often alleged in legal malpractice cases, for one of several reasons.  One common reason is for a longer statute of limitations, 6 years rather than 3.  For as long as there has been a different statute of limitations in fraud and tort, this tension has existed.  After the NY legislature enacted CPLR 214(6) in reaction to a Court of Appeals decision in Santulli v. Englert, 78 NY2d 700 (1992), the tension escalated.  CPLR 214(6) determined that there was a 3 year statute whether the theory of liability is described in tort or fraud, so long as it is for professional work done by non-medical professionals.

A second reason is that the behavior feels more like fraud than malpractice, and the temptation is to plead and describe it as a misrepresentation type of wrong rather than a departure type of wrong.  However, the fraud must be more than a mere variant of the malpractice, and it must be more than the hiding of malpractice.

Here, in Reichenbaum v Cilmi ;2009 NY Slip Op 05954 ;Decided on July 21, 2009 ;Appellate Division, Second Department we see one description of the issue:
 

"The factual allegations in support of the cause of action to recover damages for fraud fail to meet the heightened pleading requirement of CPLR 3016(b) (see Kline v Taukpoint Realty Corp., 302 AD2d 433) and, in any event, the "mere failure to disclose malpractice does not give rise to a cause of action alleging fraud or deceit separate from the underlying malpractice cause of action" (Ferdinand v Crecca & Blair, 5 AD3d 538, 539). "
 

When does the statute of limitations start to run in legal malpractice?  Is it on the day that former attorneys are "substituted out" or perhaps on the day that successor counsel sign a retainer agreement?  One answer is found in Fur Online v. Rivkin Radler, LLP, Supreme Court, New York County, Index No. 113292/08. 

There, Justice Friedman determines that CPLR 214(6) applies, and that the rule in Matter of Kliment, 3 NY3d 535 (2004) is illustrative.  Where the "underlying complaint is one which essentially claims that there was a failure to utilize reasonable care or where acts of omission or negligence are alleged or claimed, the statute of limitations shall be three years if the case comes within the purview of CPLR Section 214(6) regardless of whether the theory is based in tort or in breach of contract."

Here, the decision illustrates the problems inherent.  In a US District Court case, Judge John G. Koeltl so ordered a letter application to be relieved as counsel on September 14, 2005.  The attorney-client relationship ended on that day.  One Roberta Ashkin purportedly took over the case on October 14, 2005, but this "does not show that plaintiff was continuously represented by defendant up until that date."

Result?  Case dismissed.

No matter how you phrase it, it's a 3 year statute under CPLR 214(6).  Attorneys try to phrase it as contract, or breach of fiduciary duty, or misrepresentation, but so long as the wrong arises from a professional relationship between client and attorney its a 3 year statute.  In Matter of R.M. Kliment & Frances Halsband, Architects (McKinsey & Co., Inc.) ;2004 NY Slip Op 09319 [3 NY3d 538] December 16, 2004 Ciparick, J. Court of Appeals  we see:
 

"CPLR 214 (6) states that "an action to recover damages for malpractice, other than medical, dental or podiatric malpractice, regardless of whether the underlying theory is based in contract or tort" is subject to a three-year statute of limitations. The Legislature specifically amended this statute in 1996 to counteract the effect of decisions by this Court that "abrogat[ed] and circumvent[ed] the original legislative intent" by allowing actions that were technically malpractice actions to proceed under a six-year contract statute of limitations (Revised Assembly Mem in Support, Bill Jacket, L 1996, ch 623).

Prior to the 1996 amendment, we determined the appropriate statute of limitations in nonmedical malpractice actions based upon the proposed remedy instead of the theory of liability (see e.g. Santulli v Englert, Reilly & McHugh, P.C., 78 NY2d 700, 708 [1992]; Sears, Roebuck & Co. v Enco Assoc., Inc., 43 NY2d 389, 394-395 [1977]). These cases held that liability would not have existed between the parties without the contractual relationship and that there was an implied agreement to perform professional services using due care (see Santulli, 78 NY2d at 707; Sears, 43 NY2d at 396). Parties were permitted to maintain a malpractice action under a breach of contract theory within the six-year statute of limitations, but were limited to damages available in a contract action if the three-year malpractice limitations period had expired (see Santulli, 78 NY2d at 709).

It is the effect of these decisions that the amendment to CPLR 214 (6) was intended to change. The legislative history makes clear that "where the underlying complaint is one which essentially claims that there was a failure to utilize reasonable care or where acts of omission or negligence are alleged or claimed, {**3 NY3d at 542}the statute of limitations shall be three years if the case comes within the purview of CPLR Section 214 (6), regardless of whether the theory is based in tort or in a breach of contract" (Revised Assembly Mem in Support, Bill Jacket, L 1996, ch 623). [*4]"

Actions have consequences, and in legal representation it may be malpractice,   Here is an example.  Say, for example that you have a robust asbestos practice, and in one of your many pending actions, you have one of many defendants file a motion for summary judgment.  You may not be sure whether there is any evidence against that particular defendant and sign a stipulation of discontinuance.  Is the stipulation binding, when a couple of months later you determine that there was evidence against that defendant?  Can you vacate?  The short answer is NO.  The longer answer is found in Hallock v. State of New York and in Charlop v A.O. Smith Water Prods.
2009 NY Slip Op 05911 ;Decided on July 21, 2009 ;Appellate Division, First Department

"stipulations of settlement are judicially favored and should not be lightly cast aside (see Hallock v State of New York, 64 NY2d 224, 230 [1984]; Matter of Kanter, 209 AD2d 365 [1994]). Thus, a party will not be relieved from the consequences of a stipulation unless there was sufficient cause to invalidate it, such as fraud, mistake, collusion, accident, or some other ground (see Hallock, 64 NY2d at 230; Daniel v Long Is. Univ., 184 AD2d 350, 352 [1992]). The party seeking to vacate the stipulation should do so with reasonable promptness under the circumstances (see Hallock, 64 NY2d at 231)[parties bound by a stipulation where they voiced no objection for two months following the execution of a stipulation]).

In Structured Asset Sales Group LLC v Freeman (45 AD3d 327 [2007]), the parties mutually decided to discontinue the action. The plaintiff received the proposed stipulation — which stated on its face that the discontinuance was "with prejudice" — and held onto it for two months before executing it (id. at 328). The plaintiff then sought to set aside the stipulation, a request which was denied by Supreme Court. This Court upheld the dismissal of the action (id.)."
 

Plaintiff loses a commercial law case, and sues his attorneys for legal malpractice.  During discovery, while preparing responses to interrogatories, he discovers, and then sues over what he claims is a forged affidavit said to be prepared by the attorneys and unsuccessfully used in his case.  Worse he says, the affidavit contained inaccurate information which was the cause of the loss, and hence a sort of double malpractice.  Defendants say, its too late, and what kind of a cause of action is this, anyway?

In Shelly v. Mintz Levin Cohn Ferris Glovsky & Popeo PC we see Justice Emily Jane Goodman's answer to these two questions.  Forgery is a civil cause of action, akin to fraud, but without some of the more onerous elements.  No "reliance" is necessary in a forgery case; it is "counterintuitive."

Forgery is "the fraudulent making of a writing to the prejudice of another's rights, or the making malo animo of any written instrument for the purpose of fraud and deceit...."  It is subject to a 6 year from the making or two year from the reasonable discovery statute of limitations.

Attorney takes on case for client, and the job is to check whether client can erect a Walgreens in Brooklyn.  Attorney does research, and determines that the building and parking lot will be legal in that zoning.  Attorney, however, fails to check if any new laws have been passed by the NYC Council on zoning recently. Two weeks prior to the report, the Council had passed a law which made the parking lot illegal, and those changes were certified. 

$5 million in loans and construction pre-costs later, plaintiff cannot build the Walgreens,  Legal Malpractice law suit follows.  Will a restrictive retainer agreement be applicable ?  Is the attorney responsible for checking the up-to-date law?

In Santo Nostrand LLC v. Cozen O'Connor  602415/08 we see the answer, at least at the pleading stage.  Plaintiff states a cause of action.  The importance of a parking lot to plaintiff in attempting to contract with Walgreens was known to defendants, and it was their obligation to be up to date on the law.  The case continues.

Legal representation in even simple matters can lead to unintended consequences.  As an Example  H & J Restaurant v, A & J Grand Enterprises and Leigh, 2009 Slip OP 21544, authored by Justice Edmead, demonstrates how a simple ministerial mistake can end up with a potential $ 400,000 loss, with later judgment against the attorney. 

It's a simple transaction, A buys a restaurant from B.  As might be expected, Seller exaggerates the sales, or hides underpayment of taxes.  Since these commercial transactions have taken place since time immemorial, there are safeguards and protections.  Buyer can take the business free of personal liability if it notifies the tax authorities 10 days prior to the sale, in which case the tax authorities have 5 days to assert tax liability.  Should it happen, buyer can then back out.

Here, the notification was not made within 10 days, and several months later the tax authorities asserted personal liability to buyer in the neighborhood of $ 400,000.  Seller is in default, and no where to be found.

What is the lesson here?  Lesson 1:  Legal malpractice is everywhere lawyers represent clients.  Lesson 2:  Know the subject matter of your area of law and don't make simple transactions difficult.  Lesson 3:  Review lesson 2.

Today we look at a second legal malpractice motion decided this week by Justice Emily Jane Goodman in Supreme Court, New York County.  This case involves a divorce action between a US husband and a Czech wife, with immigration and fraud elements mixed in.  On top of the international aspects of the case, Justice Goodman upheld [in a motion to dismiss] the viability of a Judicary Law 487 claim.

 IN Koch v. Sheresky, Aronson & Mayersky,  2009 NYSlip Op 31520 (u), the claim is that husband left the Czech Republic and his marriage to her, after adopting her son, and commenced a marital action in NY.  In that marital action he claimed that there were no children of the marriage, and that significant commercial assets were marital property, rather than being subject to partnership agreements.In the case plaintiff-wife alleges that her attorneys failed to challenge subject matter as well as personal jurisdiction issues, and withdrew without resolving partnership/business interests. More interesting is the Judiciary Law 487 claim against the Husband's attorneys [with whom she had no privity] over alleged immigrration advice which led to her not being able to come to the US to contest the divorce proceedings.

An inquest followed, and not until much later was the default judgment vacated. By then all the business assets had vaporized. Husband is now himself absent and in default, and the legal malpractice action, after mixed results in the motions to dismss, continues.
 

In Supreme Court, New York County, Justice Emily Jane Goodman issued not one but two legal malpractice decisions this week.  We'll cover Koch tomorrow.  Today, Esterman v. Schwartz, New York Slip Op. 2009-31523.

Plaintiffs are a subset of a group of owners of a waterfront Staten island development which suffered retaining wall damage in a storm.  The group was divided into waterfront owners and inland owners, and they did not agree on who had to pay for the retaining wall to be fixed.  Plaintiff's group retained defendant attorneys, and in the end, they were the only group that did not sue the City and other defendants who constructed the wall which failed.

This case is interesting for three reasons.  The first is a question of how parol evidence may affect a limited retainer agreement between attorney and client.  The retainer agreement was only for investigation, not litigation.  The claim was that the attorneys did not file a notice of claim and did not move for permission to file a late notice of claim, although the unaffected waterfront owners who hired other counsel were successful in bringing suit.

Justice Goodman held that in the absence of a merger clause in the retainer agreement [ e.g.,"this is the complete agreement and may not be changed or altered without express written agreement"] parol evidence that the attorneys orally agreed to bring suit was permissible.

The second area of interest is the "but for" aspect of the case.  As do all defendants, here they argued that there is no evidence that plaintiffs would be successful against the city.  Justice Goodman made an interesting observation.  If there is no possible merit to such a claim against the City, why did the attorneys send a contingent retainer agreement which called for them to bring such an action.  That the retainer remained unsigned is of no moment.

Lastly, the court gruffly laid aside questions of sanctions. 

Here, in GURVEY,, v. COWAN, LIEBOWITZ & LATMAN, PC., CLEAR CHANNEL COMMUNICATIONS, INC., INSTANTLIVE CONCERTS, LLC, LIVE NATION, INC., NEXTICKETING, INC. DALE HEAD, STEVE SIMON, and DOES I-VIII, INCLUSIVE, ; 06 Civ. 1202  UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 34839; 2009-1 Trade Cas. (CCH) P76,623; we see a unique combination of legal malpractice claims, cliams of "passing off", Lahham Act claims and general conversion causes of action.  Plaintiff, who was of counsel to Cowan, brought a new ticketing/management/sales "invention" to the law firm, and it was eventually filed with the Patent office.  Beyond that,Phish is a part of it all.

"At that time, CLL agreed to represent the Plaintiff before the US Patent and Trademark office ("USPTO") to file Provisional Patent Applications ("PPA"s) for inventions developed by Plaintiff prior to joining CLL. (TAC PP28, 33).

Plaintiff's inventions included business plans to edit, package and distribute live recordings of live music events, as well as electronic ticketing methods related to these recordings. (TAC PP 28, 33.)

Shortly after beginning at CLL, Plaintiff presented her projects, business plans, and inventions at the firm's monthly partners' conference. (TAC P34).

After the meeting a CLL [*3] Partner told Plaintiff that the her business plans would be of significant interest to the firm's client CCC. (TAC P36). This same CLL Partner also told Plaintiff that he preferred to have her as a client of CLL rather than as Of Counsel. (TAC P37.)

In early May 2002, Plaintiff was notified that she would no longer be employed Of Counsel, but that CLL continued to have interest in the subject matter of her patents and would file the Plaintiff's PPA's before the USPTO. (TAC P43). On May 22, 2002 and May 24, 2002, CLL filed two patents with the USPTO naming the plaintiff as sole inventor and CLL as attorneys of record. (TAC P44).

In August 2002, Plaintiff returned from a business trip to find that she had been locked out of her office. (TAC P47)

On or about February 16, 2003, the Plaintiff received notification from the USPTO that CLL had withdrawn as the attorney on one of her patents because of a conflict of interest. (TAC P50).

In March 2003, the CCC affiliated entity InstantLive posted ads/statements on their website announcing a new program that would allow concert-goers to purchase its recordings. (TAC P55). On May 5, 2003, The New York Times published an article describing InstantLive. [*4] Plaintiff alleges that this description mirrored her business models for the onsite distribution of live recordings at concerts. (Band members of Phish were also interviewed for the article and identified their interest in this new product. (TAC P52). A member of Phish is married to a CLL attorney.)
 

"Here, Plaintiff offers only vague and non-actionable challenges to CLL's legal representation. Plaintiff first pleads that CLL "failed to protect and safeguard her trade secrets." TAC P120(1). This allegation appears to refer either to the presence of non-attorney CLL employees at the initial presentation of Plaintiff's inventions or to the misappropriation at the heart of Plaintiff's TAC. However, neither instance is premised on anything more than speculation, and neither presents a challenge to the actual quality of CLL's legal representation Plaintiff also alleges that CLL "fail[ed] to properly advise [her] with respect to the opportunities for commercial exploitation of [her] [*20] inventions and trade secrets" (TAC P120(2)). This allegation again does not address CLL's legal representation and merely challenges the "selection of one among several reasonable courses." Finally, Plaintiff alleges that CLL failed to eliminate a conflict of interest to its representation of Plaintiff TAC PP120(3) and (4). Because this allegation includes no detail, even in speculation, as to the supposed conflict, the allegation does not provide a basis for a malpractice claim."
 

In Boglia v Greenberg ; 2009 NY Slip Op 05278 ; Decided on June 23, 2009 ; Appellate Division, Second Department  wee see a successful opposition to summary judgment based upon a claim of failure to report a settlement  offer to plaintiff.
 

"To sustain a cause of action alleging legal malpractice, a plaintiff must establish 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 the plaintiff actual and ascertainable damages (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442, quoting McCoy v Feinman, 99 NY2d 295, 301-302; see Bauza v Livington, 40 AD3d 791, 792-793; Magnacoustics, Inc. v Ostrolenk, Faber, Gerb & Soffen, 303 AD2d 561, 562). To obtain summary judgment dismissing a complaint in an action to recover damages for legal malpractice, a defendant must demonstrate that the plaintiff is unable to prove at least one of the essential elements of its legal malpractice cause of action (see Kotzian v McCarthy, 36 AD3d 863, 863; Fasanella v Levy, 27 AD3d 616, 616).

However, the Supreme Court should have denied that branch of the defendants' cross motion which was for summary judgment dismissing the second cause of action, alleging legal malpractice based upon their alleged failure to convey her former husband's $250,000 settlement offer to her, as triable issues of fact exist regarding whether the defendants failed to convey the settlement offer to the plaintiff and whether the plaintiff would have accepted that offer (cf. Bauza v Livington, 40 AD3d at 793). "

There are two traps for the unwary legal malpractice litigant in Bankruptcy Court.  One is the failure to list a potential or actual legal malpractice claim in the schedules, depriving the emergent litigant from bringing a legal malpractice case later.  A second trap is the attorney fee hearing, which if it allows fees to the attorney may insulate that attorney from a later legal malpractice case.

Here is an example where there is no res judicata. In PENTHOUSE MEDIA GROUP, INC.,  - against - PACHULSKI STANG ZIEHL & JONES LLP, UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 46617; June 2, 2009, Decided  we see:
 

"Even when all of the elements of res judicata are satisfied, a malpractice claim remains viable unless a party "could and should have brought [it] in the former proceeding." 40 "In this context, important factors in this analysis include whether the fee hearing [*12] was an adversary proceeding or contested matter, the nexus between the order awarding [] fees and the claims now being asserted, and 'the amount of time that has elapsed since the case commenced.'" 41 Such a determination depends on "whether and to what extent [the party] had actual or imputed awareness prior to the fee hearing of a real potential for claims . . . and whether the bankruptcy court possesse[s] the procedural mechanisms that . . . allow [the party] to assert such claims." 42

40 In re Intelogic Trace, Inc., 200 F.3d 382, 388 (5th Cir. 2000). Accord EDP Med. Computer Sys., Inc. v. United States, 480 F.3d 621 (2d Cir. 2007) HN8("Under the doctrine of res judicata, or claim preclusion, '[a] final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.'") (quoting St. Pierre v. Dyer, 208 F.3d 394, 399 (2d Cir. 2000) (emphasis added)); Sure-Snap Corp. v. State Street Bank & Trust Co., 948 F.2d 869, 875 (2d Cir. 1991) (finding that a claim for tortious infliction of emotional distress against creditors should have been brought as part of a prior bankruptcy proceeding and was therefore [*13] barred by res judicata).

41 In re Intelogic, 200 F.3d at 388 (quoting Matter of Howe, 913 F.2d 1138, 1147 n.28 (5th Cir. 1990)).

42 Id.

For the reasons discussed above, the bankruptcy court's Order granting Pachulski's motion for summary judgment is reversed. This case shall be remanded to the United States Bankruptcy Court for the Southern [*25] District of New York for actions consistent with this opinion. The Clerk of the Court is directed to close this case."
 

Legal malpractice in the estate and probate areas is limited by the concept of privity.  Errors in the preparation or wills, and mistakes in the handling of probate proceedings are often precluded on one of two bases.  The first is that a beneficiary may not sue for malpractice to the decedent, and the second is lack of privity...a contractual or near-contractual relationship with the attorney.

In Leff v. Fullbright & Jaworsky, LLP. we see a well reasoned and explained decision which covers all the areas of estate and probate legal malpractice.  Beyond the shocking size of the estate [90 Million] and the cavalier attitude decedent had to his wife [the anniversary present, and the language of his letters to her] we see the bedrock principals of legal malpractice, and the eternal question of whether this attorney is susceptible to suit by this plaintiff.  Here, Leff may not successfully sue her attorneys, as they provided legal advice and work to her husband, and not to her.  By her reasoning, she is out $9 million. 

One of the beautiful things about the US is that every state has its own law.  It was shocking to learn in Law School that events a few miles away, across a state border could be handled differently.  Sure, other countries, but Connecticut?

Here is a story  from Law.Com about how Texas handles executor-estate attorney legal malpractice cases.

"In a 5-2 decision, the Texas Supreme Court held on June 26 that the executor of an estate may sue a decedent's attorneys for alleged malpractice committed outside the realm of estate planning.

"We hold that the executor should not be prevented from bringing the decedent's survivable claims on behalf of the estate," Justice Harriet O'Neill wrote for the majority in Smith, et al. v. O'Donnell.

According to the majority opinion, Corwin Denney retained the San Antonio firm Cox & Smith to advise Denney in the independent administration of the estate of his wife following her death in 1968. The firm's legal name is Cox Smith Matthews.

As noted in Cox & Smith's petition for review to the state Supreme Court, the defendants in Smith also include attorneys Paul H. Smith and Jack Guenther and the former partnerships of Cox, Smith & Smith; Cox, Smith, Smith, Hale & Guenther; and Cox, Smith, Smith, Hale & Guenther Inc., all predecessors to Cox & Smith Inc.

The Supreme Court's majority opinion in Smith provides the following background: Denney contended that he and his wife had agreed orally that stock in Automation Industries Inc. would be his separate property, and property in Gilcrease Oil Co. would be hers. Cox & Smith advised Denney in a memorandum that additional information was necessary before classifying the assets. According to Cox & Smith, the firm advised Denney that he probably should seek a declaratory judgment to properly classify the stock, but Denney declined to do so. Without seeking a declaratory judgment and relying on an analysis by Denney's California accountant, Cox & Smith prepared an estate tax return that omitted Automation stock from a list of the deceased wife's assets. After Denney died 29 years later, leaving the bulk of his estate to charity, the Denney children sued Denney's estate, alleging that he underfunded their mother's trust. Thomas O'Donnell, the executor of Denney's estate, settled the children's claims for $12.9 million and then sued Cox & Smith, alleging that the firm failed to properly advise Denney about the serious consequences of mischaracterizing assets and that their negligence caused damage to Denney's estate. Asserting a claim of malice, O'Donnell alleged that Cox & Smith's conduct constituted gross negligence."
 

Criminal law and legal malpractice law seldom intersect.  One reason is an almost complete ban on criminal defendants suing their defense attorneys.  In order to sue, one must show "actual innocence" which is customarily demonstrated by reversal upon appeal or exoneration.  Since that is a rare occurrence, there is little vitality to criminal defense legal malpractice.

Here, the view is obverse, and a real estate broker [perhaps an investor ?] sues an attorney involved in the real estate transaction for legal malpractice.  The kicker is that the attorney has been arrested upon a felony complaint, and now awaits the action of the Grand Jury.

In  THE CORCORAN LAW GROUP, L.L.C. et ano., -against- JANE Y. POSNER, ESQ. ;09 Civ. 1861 (WHP)UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 we see that the Court grants a stay of legal malpractice proceedings to see what happens to the felony complaint.  In criminal prosecutions, the DA files a complaint, in this case for a felony,  which may not serve as an accusatory instrument for trial upon a felony.  The Constitution and the Bill of Rights requires the action of the Grand Jury which must issue a true bill, otherwise known as an indictment.
 

"In determining whether a stay is appropriate, courts balance the following factors: (1) the extent to which the issues in the criminal case overlap with those presented in the civil case; (2) the status of the case, including whether the defendant has been indicted; (3) the interests of the plaintiffs in proceeding expeditiously, weighed against the prejudice to plaintiffs caused [*3] by a delay; (4) the private interests of and burden on the defendant; (5) the public interest; and (6) the interest of the Court in the efficient management of cases. See, e.g., Transworld Mechanical, 886 F. Supp. at 1139.
"[D]istrict courts in this Circuit generally grant the extraordinary remedy of a stay only after the defendant seeking a stay has been indicted." Sterling Nat'l Bank, 175 F. Supp. 2d at 576 (citation and internal quotation marks omitted). However, at least one district court in this Circuit has noted that the filing of a felony complaint should be treated as the substantial equivalent of an indictment. See Parker v. Dawson, No. 06-CV-6191 (JFB), 2007 U.S. Dist. LEXIS 63068, 2007 WL 2462677, at *4 (E.D.N.Y. Aug. 27, 2007). The [*4] question is "whether the criminal proceedings have substantially progressed beyond the investigatory stage to the filing of formal charges against a particular defendant, so that there is an imminent likelihood that the defendant will be subject to a criminal proceeding, including a trial, in the very near future." Parker, 2007 U.S. Dist. LEXIS 63068, 2007 WL 2462677, at *4 (collecting cases).

Corcoran submitted its supporting deposition to the Putnam County DA on October 30, 2008, and a felony complaint was filed four months later. Therefore, it is evident that the "criminal proceedings have substantially progressed beyond the investigatory stage." Parker, 2007 U.S. Dist. LEXIS 63068, 2007 WL 2462677, at *4. Accordingly, this factor weighs in favor of a stay."

Privity of contract is an important element of legal malpractice.  For policy reasons [and to avoid infinite and endless litigation] courts enforce a rather strict requirement that one may sue their own attorney, but not the opponent's in legal malpractice. There are exceptions.

In LYDIAN PRIVATE BANK d/b/a VIRTUALBANK, -v- RICHARD A. LEFF, UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 48756
June 8, 2009, we see a well enunciated set of rules for the combination of breach of fiduciary duty and legal malpractice by Judge Laura Taylor Swain.

" "An action for legal malpractice requires proof of three essential elements: (1) the negligence of the attorney; (2) that the negligence was the proximate cause of the loss sustained; and (3) proof of actual damages." Mendoza v. Schlossman, 87 A.D.2d 606, 606-7, 448 N.Y.S.2d 45 (2d Dep't 1982). In some cases, a lawyer may owe duties to a nonclient that are actionable in a legal malpractice claim if his client has a fiduciary relationship with the nonclient, to the extent that action necessary to prevent or rectify the [*9] breach of a fiduciary duty owed by the client to the nonclient falls within the scope of his representation. 4 In order to state a claim for negligence, a plaintiff must demonstrate "(1) a duty owed by the defendant to Plaintiff, (2) a breach thereof, and (3) injury proximately resulting there from." Solomon by Solomon v. City of New York, 66 N.Y.2d 1026, 1027, 489 N.E.2d 1294, 499 N.Y.S.2d 392 (N.Y. 1985).

FOOTNOTES

4 As one court noted in In re Food Mgmt. Group, LLC, 380 B.R. 677, 708-10 (Bankr. S.D.N.Y. 2008) (citing Law Governing Lawyers § 51(4)), a lawyer owes a duty to a nonclient when and to the extent that:
(a) the lawyer's client is a trustee, guardian, executor, or fiduciary acting primarily to perform similar functions for the nonclient;

(b) the lawyer knows that appropriate action by the lawyer is necessary with respect to a matter within the scope of the representation to prevent or rectify the breach of a fiduciary duty owed by the client to the nonclient, where (i) the breach is a crime or fraud . . . ;

(c) the nonclient is not reasonably able to protect its rights; and

(d) such a duty would not significantly impair the performance of the lawyer's obligations to the client.

The duty imposed by [this] rule . . . arises [*10] when the lawyer knows that appropriate action by the lawyer is necessary to prevent or mitigate a breach of the client's fiduciary duty. . . . [A]ctual knowledge by the . . . Defendants is not required to impose liability predicated on this theory. The . . . Defendants cannot escape liability if they closed their eyes to what someone with their 'superior intelligence' would find obvious. [However, the plaintiff] cannot predicate liability . . . on the . . . Defendants' failure to investigate facts beyond those of which they were otherwise aware."
 

In SASH v.  ROSAHN, ESQ., as the Supervising Attorney for the Parole Revocation Unit of Defendant The Legal Aid Society, UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK  2009 U.S. Dist. LEXIS 52480   June 16, 2009, Decided  we see a three-pronged attack on plaintiff's criminal defense attorney, each of which fails.
 

Legal malpractice against one's criminal defense attorney is difficult to impossible. "[t]o state a cause of action for legal malpractice arising from negligent misrepresentation in a criminal proceeding, plaintiff must allege his innocence or a colorable claim of innocence of the underlying offense." Sash v. Dudley, No. 05-cv-7498, 2006 U.S. Dist. LEXIS 20146, 2006 WL 997256, at **2 -3 (S.D.N.Y. April 17, 2006); Carmel v. Lunney, 70 N.Y.2d 169, 511 N.E.2d 1126, 518 N.Y.S.2d 605, 607 (1987). It is well established under New York law that "so long as the determination of [a plaintiffs] guilt for that offense remains undisturbed, no cause of action will lie." Id. A guilty plea will therefore generally preclude a defendant from lodging a malpractice claim against his defense lawyer. See Scanio v. Palmiere & Pellegrino, 251 A.D.2d 1018, 674 N.Y.S.2d 527, 528 (4th Dep't 1998); see also Estes v. Doe, No. 97 Civ. 8133, 1999 U.S. Dist. LEXIS 16768, 1999 WL 983886, at *4 (S.D.N.Y. Oct. 29, 1999). "Thus, a criminal defendant cannot even state a claim for legal malpractice until his conviction is overturned or vacated." Smith v. Morgenthau, No. 95 Civ. 4159, 2001 U.S. Dist. LEXIS 15690, at *8 (S.D.N.Y. June 8, 2001). Public policy prevents maintenance of a malpractice action against a defense attorney if a criminal defendant cannot assert his innocence. "This is so because criminal [*11] prosecutions involve constitutional and procedural safeguards designed to maintain the integrity of the judicial system and to protect criminal defendants from overreaching governmental actions. These aspects of criminal proceedings make criminal malpractice cases unique, and policy considerations require different pleading and substantive rules." Carmel, 518 N.Y.S.2d at 607."

Suing one's criminal defense attorney in defamation for words spoken at the trial or hearing is similarly difficult.  "Under New York law, the elements of a defamation claim are a false statement, published without privilege or authorization to a third party, constituting fault and it must either cause special harm or constitute defamation per se." Peters v. Baldwin Union Free School Dist., 320 F.3d 164, 169 (2d Cir.2003) [*14] (citation omitted); see also Albert v. Loksen, 239 F.3d 256, 265-66 (2d Cir.2001) (spoken defamation is slander and "[t]he elements of a cause of action for slander under New York law are (i) a defamatory statement of fact, (ii) that is false, (iii) published to a third party, (iv) of and concerning the plaintiff, (v) made with the applicable level of fault on the part of the speaker, (vi) either causing special harm or constituting slander per se, and (vii) not protected by privilege" (citation omitted)).

At the parole revocation hearing, Sash pled guilty with an explanation to the charge of violating the conditions of his release, at which time Rosahn provided mitigating factors to the court on Sash's behalf. Following the hearing, Rosahn made the above-described statements to various court officers (stating that she had to "bite her tongue" in representing Sash). (Comp. para. 35; Def. Motion Ex. D.)

To the extent that Sash seeks to base a claim of defamation on words spoken by Rosahn during the hearing, those words are privileged and cannot give rise to an actionable claim here. Shernoff v. Soden, 266 Fed.Appx., 12, 12 (2d Cir. 2008); Park Knoll Assocs. v. Schmidt, 59 N.Y.2d 205, 464 N.Y.S.2d 424, 451 N.E.2d 182, 184 (1983) [*15] ("[A] lawyer has immunity for defamatory words spoken in a judicial proceeding[.]").

To the extent that Sash seeks to base a claim of defamation on Rosahn's statements to the administrative law judge and the parole specialist, those statements are protected expressions of opinion, not defamatory assertions of fact of or concerning Sash, and cannot give rise to a claim of defamation. See Shernoff v. Soden, 266 Fed.Appx., 12, 12 (2d Cir. 2008); Celle v. Filipino Reporter Enters. Inc., 209 F.3d 163, 177-79 (2d Cir.2000)."

Defendant attorneys in legal malpractice cases often have valid, technical, factual and compelling defenses.  Sometimes they claim that the alleged malpractice is a question of judgment; sometimes the law suit is too late.  In other examples, there is a less than clear relationship between the attorney and plaintiff, perhaps beneficiary to an estate or plaintiff sues an opponent's attorney.

Here, in Zautner v. Arcodia, 2009 Slip Op 31362(u), Justice  Joseph C. Terasi cuts to the chase, and denies summary judgment.  Plaintiff is the seller of a house, and defendant is his attorney.  The contract called for defendant to hold the down payment, which in this case was sizeable.  Down payments are, in one instance, the remedy for buyer wrongfully cancelling the contract.

Defendant failed to collect the down payment, and of course, the buyer wrongfully cancelled.  What was defendants excuse?  He said that in his area of the state, brokers usually held onto the deposits, so he allowed the broker to hold onto it.  What of the fact that seller had no broker, and the house was for sale "by owner ?"

Defendant apparently had no answer.  Summary judgment granted against the attorney.

In a short, one line reversal, the Court of Appeals put to rest a very old legal malpractice case, Gotay v. Breitbart..  The Court of Appeals simply wrote: "Plaintiff's legal malpractice claim was not brought within the applicable statute of limitations period, and defendants-appellants established as a matter of law that the continuous representation doctrine does not apply."

This is a case that arose in the 1990's at a time when it was not necessary to purchase an index number, and cases were commenced by service of a summons and complaint.  In this Erbs palsy case against the NYCHHC, we see several traps that personal injury attorneys feared at the time.  Service of the complaint on NYCHHC rather than the hospital, loss of the files in a long intervening period, and failure to purchase an index number when the rules changed.

For a longer discussion of judicial activism and "fanciful" theories see Justice Friedman's dissent in the Appellate Division.  This dissent, although not credited in the Court of Appeals decision, is the reason for reversal.  It is interesting to note that Justice Lippman wrote the majority opinion in the Appellate Division, which his new court reversed.

From the Dissent:

"This legal malpractice action is the culmination of a long and convoluted chain of events that began three decades ago. Ultimately, however, the lawsuit's timeliness turns on an attorney's sworn—and entirely uncontradicted—account of what occurred at his meeting with plaintiff and her father on January 28, 1999, more than three years before the commencement of the action. The attorney (Mark Hankin) avers in his affidavit that, at the January 1999 meeting, he advised plaintiff and her father that his firm would not undertake plaintiff's representation in a medical malpractice matter arising from her birth in 1977.[FN1] Hankin further states that, in response to his rejection of plaintiff's case, "plaintiff's father requested the immediate return of the file."

In opposing defendants' summary judgment motion, plaintiff submitted no evidence of any kind—not in deposition testimony, not in an affidavit, not in a letter, not in a jotted piece of notepaper—controverting Hankin's account of the January 28, 1999 meeting. Indeed, Hankin's account of the meeting is not even challenged in plaintiff's appellate briefs. The majority nonetheless denies summary judgment to the appealing defendants, based on two theories never suggested by plaintiff. The majority's first theory is that plaintiff and her father (although neither [*6]makes this claim) were unaware that Michael Handwerker, the attorney who had accepted plaintiff's matter several years before, had joined Hankin's firm. The other theory the majority has devised is that Hankin's claim that plaintiff's father requested the return of the file at the January 1999 meeting is somehow placed in doubt by boilerplate language in Hankin's follow-up letter, dated February 22, 1999, offering to return the file "[i]n the event you require the whole or any portion thereof."

Here is a blackletter rule:  You must obtain consent from the Worker's Compensation carrier before settling a personal injury action in which there was WC payments.  If you don't, the WC carrier takes a 'vacation" and the plaintiff stops getting money.  Easy, No?

in Flaherty v Attie ;2009 NY Slip Op 51296(U) ; Supreme Court, Queens County ; Markey, J. we see what happens.  Our guess is that plaintiff stopped getting paid a few months after settling the case. but the decision does not supply this detail.  Plaintiffs sue their attorney, and lose on statute of limitations grounds.
 

"[P]laintiffs commenced their action against defendant to recover damages for, inter alia, legal malpractice and fraudulent concealment. Plaintiffs allege that, in 1998, they retained the legal services of defendant to represent them in an underlying personal injury suit. The injury allegedly sustained by plaintiff John J. Flaherty (Flaherty) occurred during the course of his employment. On December 24, 1998, a retainer agreement was signed, and defendant filed a summons and complaint on March 26, 1999 in connection with the underlying accident. During the pendency of that action, Flaherty was receiving workers' compensation benefits, said benefits creating a lien against plaintiffs and their potential recovery.  [D]efendant Attie had failed to obtain pre-settlement consent from the workers' compensation carrier and/or the New York State Insurance Fund and/or plaintiff's [*3]employer, which ultimately negatively affected plaintiffs' right to future workers' compensation benefits; and failure to obtain such clearance, approval, or consent constituted legal malpractice. Plaintiffs, furthermore, allege that defendant's failure to disclose this to plaintiffs was an attempt by defendant to fraudulently conceal any alleged malpractice.
 

In or about 2006, plaintiffs contacted defendant Attie with regard to the above circumstances. Plaintiffs allege that from 2006 until May of 2008, a new attorney-client relationship was formed by defendant Attie undertaking the responsibility to seek nunc pro tunc consent and approval of the settlement. Plaintiffs contend that, in so doing, defendant Attie made affirmative representations to plaintiffs that he would and could secure such consent and approval and, that, in May 2008, defendant Attie acknowledged to plaintiffs that he failed to seek nunc pro tunc consent to the settlement during this time. Plaintiffs claim that the above constituted a second instance of legal malpractice, as well as fraudulent concealment, by making affirmative representations that defendant Attie could do that which he could not, and by, again, failing to disclose to plaintiffs the malpractice which he had allegedly committed in 2001. Plaintiffs then filed the subject suit on December 18, 2008.

On the contrary, plaintiffs improperly attempt to convert defendant's alleged failure to obtain pre-settlement consent — a negligent act — into an active, ongoing, concealment. However, failure to disclose the wrongdoing is insufficient to invoke this "uncommon remedy," which requires fraudulent behavior (Ross, 8 NY3d at 491; see also, Zumpano, 6 NY3d at 675; Weiss v Manfredi, 83 NY2d 974, 977 [1994]; Ferdinand v Crecca & Blair, 5 AD3d 538, lv. to appeal denied, 5 NY3d 710 [2004]). Based on the above, plaintiffs failed to show that they were prevented from bringing suit due to their justifiable reliance on some intentional [*5]misrepresentation made by defendant after his alleged failure to obtain pre-settlement consent (see, Bevinetto, 51 AD3d at 614). The fact that defendant claimed on the closing statement that there were no "medical liens" does not rise to the level of wrongfully inducing plaintiffs not to file suit; rather, this speaks to the alleged malpractice about which plaintiffs are complaining. By plaintiffs' own admission, they had no contact whatsoever with defendant until sometime in 2006. Notably, then, there is no evidence of any type of ongoing misrepresentation made to plaintiffs for an approximate five-year period (see, e.g., Melnitzky v Hollander, 16 AD3d 192 [1st Dept.], lv. to appeal denied, 5 NY3d 710 [2005]). "

Legal Malpractice is unique, in that lawyers write the rules for suing lawyers, and those cases are heard by lawyers.  This situation does not obtain in any other field of jurisprudence.  Here is an interesting case from Small Claims Court and a report from the NYLJ by Mark Fass.  Read the case for its wide-ranging discussion of Citibank's practices, and its findings on Claimant's attorney, who was not present nor a party.

"A Staten Island judge has thrown out a small claims action over a broken furnace filed by the buyer of a house against the seller's attorney."""This is another case of what appears to be a disturbing trend of litigation being brought by persons suing attorneys who did not represent them for that attorney's proper representation of his or her client," Judge Straniere wrote in DeFelice v. Costagliola, 81/09. "The theory behind bringing these baseless legal actions being that owing to the small amount of money involved, the lawyer would pay the claim rather than engage in the cost of litigation."

"Claimant testified that when he moved into the premises on December 12, 2008 the furnace was not operating properly. Claimant had temporary repairs done on December 13, 2008 at a cost of $425.00 and then on December 18, 2008 paid $1,800.00 for the installation of a new furnace. Claimant spoke to his attorney whom, the claimant credibly testified, advised him to sue the seller's lawyer because the seller allegedly had moved from New York. There is no evidence as to the new address of the seller and if she is beyond the jurisdiction of the court. "

"Claimant's cause of action is dismissed on the merits. Defendant has no personal liability for the actions or inactions of his client. Defendant is not a stakeholder pursuant to an escrow agreement nor did he personally promise to perform any obligations for his client. This suit is completely baseless. The court commends the claimant for being honest and forthright admitting that his attorney suggested that he bring this suit, however, there are consequences of his actions. Defendant was required to incur the expense of hiring an attorney to represent him in this matter and was subjected to public ridicule as a defendant in a crowded small claims courtroom in regard to an alleged breach of contract arising from his work as an attorney.

Many times in legal malpractice cases, courts find causes of action to be duplicitive.  Some of this arises from over-pleading.  As an example, plaintiff may plead legal malpractice, negligence, breach of contact, breach of fiduciary duty, unjust enrichment, fraud, and so on  Courts will trim these causes of action, all the while assuring plaintiff that any damages will still be permitted before the jury.

In our continued examination of SMARTIX INTERNATIONAL CORPORATION, a.k.a. SMARTIX INTERNATIONAL, LLC, - against - GARRUBBO, ROMANKOW & CAPESE, P.C. AND ANTHONY RINALDO, ; 06 Civ. 1501 (JGK); UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; 2009 U.S. Dist. LEXIS 29114; 
March 30, 2009,  we look at the non-duplicitive cause of action for inflated billing and unjust enrichment.

"The plaintiff brings a claim for unjust enrichment against the defendants on the basis of alleged over-billing. The elements for a claim of unjust enrichment under New York law are: (1) that the defendant was enriched; (2) the enrichment was at the plaintiff's expense; and (3) the circumstances were such that equity and good conscience require the defendants to make restitution. See, e.g., Golden Pac. Bancorp v. Fed. Deposit Ins. Corp., 273 F.3d 509, 519 (2d Cir. 2001).
 

"In connection with its unjust enrichment claim, the plaintiff asserts, among other things, that the defendants inflated their bills without justification. The plaintiff produces evidence raising issues of fact with respect to whether bills were inflated without justification. (See, e.g., Dus Decl. Ex. 42 at 10/3/2000 and 10/11/2000 entries.) The defendants do not respond substantively to the plaintiff's unjust enrichment claim, arguing only that the unjust enrichment claim should be dismissed [*28] as duplicative of the plaintiff's legal malpractice claims. See, e.g., Town of Wallkill v. Rosenstein, 40 A.D.3d 972, 837 N.Y.S.2d 212, 215 (App. Div. 2007) (holding that claims for unjust enrichment and breach of fiduciary duty, among other claims, should be dismissed because "[t]hey were merely duplicative of the legal malpractice cause of action, as they arose from the same facts and did not allege distinct and different damages").

This argument is without merit, because the unjust enrichment claim is not duplicative of any of the legal malpractice claims. The unjust enrichment claim alleges that the defendants inflated their legal bills. The legal malpractice claims allege errors in judgment and performance by the defendants with respect to the legal services they provided to the plaintiff. Plainly these are different claims relying on different facts.

In a well-reasoned opinion from the SDNY, Judge Koeltl determined that plaintiff may continue with three claims against the attorneys.  In SMARTIX INTERNATIONAL CORPORATION, a.k.a. SMARTIX INTERNATIONAL, LLC,  - against - GARRUBBO, ROMANKOW & CAPESE, P.C. AND ANTHONY RINALDO, 6 Civ. 1501 (JGK); UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; 2009 U.S. Dist. LEXIS 29114;March 30, 2009, Decided
 

In this case, Smartix, a corporation with certain ticketing intellectual property, was in the business of selling and licensing that technology, and wanted to enter into a contract with Mastercard.  They retained the defendant law firm to advise them on the contract negotiation, to engage in corporate governance, and put one of the attorneys on the board.

Things went wrong with the MC contract and then Smartix was sued by plaintiffs named Metzger.  Plaintiffs retained defendants to defend that suit.  In this blog entry we'll look at the legal malpractice claims, and in tomorrow's we'll look at the unjust enrichment claim.

Plaintiffs complained that defendants failed to advise them correctly on the Mastercard contract negotiation and left them open to Mastercard's exploitation.  Beyond that, they claim malpractice when defendant attorney failed to attend a court ordered mediation session, [as well as the other attorneys] and was open to a sanctions hearing for which they billed plaintiffs.

Judge Koeltl denied summary judgment on both counts. "The plaintiff's first legal malpractice claim is based on the defendants' representation of the plaintiff in the course of the Metzger litigation. The plaintiff alleges that it was billed for the defendants' attendance at a sanctions hearing resulting from Mr. Rinaldo's failure to attend a court-ordered mediation. The defendants [*11] point out that both Metzger parties failed to attend the court-ordered mediation and that no sanctions were ultimately imposed.

The allegation regarding the sanctions hearing raises an issue of material fact with respect to the plaintiff's first legal malpractice claim. The plaintiff has provided evidence that it was billed in connection with a sanctions hearing resulting in part from Mr. Rinaldo's failure to attend a court-ordered mediation.  [T]he failure to follow direct orders from the court would fall below any standard of care. Cf. Logalbo v. Plishkin, Rubano & Baum, 163 A.D.2d 511, 558 N.Y.S.2d 185, 187-88 (App. Div. 1990) (finding in the absence of expert testimony or expert report that attorney who disregarded "clearly defined and firmly imbedded" obligation failed to meet any permissible standard of due care). Moreover, although the defendants point out that the trial judge in the Metzger litigation did not ultimately [*12] impose sanctions on the defendants, they do not argue that this decision by the trial judge precludes a finding of legal malpractice against the defendants, and there is no reason that would be so. Plainly claims for legal malpractice may exist even where attorneys have not been sanctioned for their conduct."
 

"The plaintiff has produced evidence in the form of deposition testimony that the MasterCard Agreement was drafted to the disadvantage of the plaintiff and contained certain vagaries that MasterCard was able to exploit at the expense of the plaintiff. (Katz Dep. at 47-49 ("[The Agreement] was very vague . . . . It did not protect Smartix from MasterCard's efforts to secure [*19] use of the software outside the contract."), 101 ("The MasterCard Agreement was vague enough so that MasterCard felt that they would roll the dice and try to do these businesses without us, which they subsequently did . . . ."); Huber Dep. at 72 ("It sounds as if MasterCard can do pretty much anything they want with this in one part of the contract . . . . There's also penalty clauses in here that would cause Smartix enormous damages if they wanted to market this outside of MasterCard . . . .").)
"

Privity of contract is an essential in legal malpractice litigation.  One may not sue the opponent's attorney; only one's own.  What makes for privity of contract?  As all know, no writing is necessary to create a contract.  So, can there be privity of contract without a retainer agreement.  Putting aside Rule 137 questions about the attorney's obligation to provide a writing, in Denise Terio,  v Lance Roger Spodek, Reich Reich & Reich, P.C., 2008-03594, 2008-04435;  SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT; 2009 NY Slip Op 4412; 2009 N.Y. App. Div. LEXIS 4411June 2, 2009, Decided we see a short answer:
 

"To recover damages for legal malpractice, a plaintiff [**4] must prove, inter alia, the existence of an attorney-client relationship (see Velasquez v Katz, 42 AD3d 566, 567, 840 N.Y.S.2d 410; Moran v Hurst, 32 AD3d 909, 822 N.Y.S.2d 564; Wei Cheng Chang v Pi, 288 AD2d 378, 380, 733 N.Y.S.2d 471; Volpe v Canfield, 237 AD2d 282, 283, 654 N.Y.S.2d 160). While a plaintiff's unilateral belief does not confer upon him or her the status of client (see Volpe v Canfield, 237 AD2d at 283), an attorney-client relationship may exist in the absence of a formal retainer agreement (see e.g. Swalg Dev. Corp. v Gaines, 274 AD2d 385, 386, 710 N.Y.S.2d 619). To establish an attorney-client relationship there must be an explicit undertaking to perform a specific task (see Wei Cheng Chang v Pi, 288 AD2d 378, 733 N.Y.S.2d 471; Volpe v Canfield, 237 AD2d at 283)."

So often, the practice of law seems to have devolved into an attorney v. client battle over the work and fees.  Here in Morelli & Gold  LLP v. Altman, NY Slip Op 31492(U) we see a large scale battle over a child support/custody case in which there has been litigation, fees, fee dispute, trial de novo, counterclaims and appeals. All this, and the case has not yet left the pleadings stage.

In her 32 page decision, Justice Edmead goes through a complete primer on:

a.  Rule 137 fee disputes, trial de novo, the pleading requirements for a trial de novo, and the forms used;

b.  Defenses and counterclaims after a fee dispute;

c.  Proper pleadings in legal malpractice counterclaims;

d.  The role of res judicata and collateral estoppel in legal malpractice fee disputes.

It's a long decision,,,look to the link and read through it for a good discussion on these issues.

Legal Malpractice litigation is a world apart from the rest of regular litigation ; it has its own rules, it has its own prinicipals, and is the sole set of rules written by attorneys to regulate attorneys.  Criminal legal malpractice is a world within a world...not unlike a russian doll set.

Here, in a Federal District Court case, we see how criminal defense attorneys enjoy almost total freedom from legal malpractice suits, and how a defamation law suit for words spoken in litigation will have little heft.

In Sash v. Rosahn, 08 cv 4032; Decided: June 16, 2009 ; District Judge Barbara S. Jones;U.S. DISTRICT COURT; SOUTHERN DISTRICT OF NEW YORK
 

"Plaintiffs bring a variety of claims stemming from Rosahn's legal representation of Sash at an April 2005 parole revocation hearing, during which Sash pled guilty with explanation to violations of conditional release.

The Court construes Plaintiffs' Complaint to state claims of legal malpractice, defamation, and intentional and/or negligent infliction of emotional harm.3

Specifically, Sash alleges that Rosahn committed malpractice in ineffectively representing him at a 2005 parole revocation hearing (including allegations that Rosahn failed to move to suppress certain evidence potentially relevant to the hearing, that Rosahn arranged with officers of the court to "fix" the hearing against Sash, and that Rosahn abaondoned representation of Sash following the hearing), defamed Sash in conversation with officers of the Court following the hearing, and intentionally or negligently inflicted emotional harm on Plaintiff Sash therein.4

On January 17, 2003, Plaintiff Sash was sentenced to a term of one to three years following a guilty plea on a second-degree forgery charge. Sash was placed on conditional release in January of 2005. In February 2005, Sash was arrested at his wife's residence in New Jersey for violation of his conditional release (leaving the state of New York without permission).

On April 4, 2005, at a parole revocation hearing, Sash pled guilty with explanation to violating the conditions of his release. Rosahn, then an employee of the Legal Aid Society of New York, represented Sash during that hearing and provided the explanation to the charges as requested by Sash.

Directly following the hearing Rosahn spoke with the administrative law judge and the parole specialist, during which conversation transcripts indicate that Rosahn stated, "thank you for biting your tongue," and "I had to bite my tongue," Comp. paras. 41-42. The Complaint alleges that these statements referred to Sash.
 

"[t]o state a cause of action for legal malpractice arising from negligent misrepresentation in a criminal proceeding, plaintiff must allege his innocence or a colorable claim of innocence of the underlying offense." Sash v. Dudley, No. 05-cv-7498, 2006 WL 997256, at **2-3 (S.D.N.Y. April 17, 2006); Carmel v. Lunney, 518 N.Y.S.2d 605, 607 (1987). It is well established under New York law that "so long as the determination of [a plaintiff's] guilt for that offense remains undisturbed, no cause of action will lie." Id. A guilty plea will therefore generally preclude a defendant from lodging a malpractice claim against his defense lawyer. See Scanio v. Palmiere & Pellegrino, 674 N.Y.S.2d 527, 528 (4th Dep't 1998); see also Estes v. Doe, No. 97 Civ. 8133, 1999 WL 983886, at *4 (S.D.N.Y. Oct. 29, 1999). "Thus, a criminal defendant cannot even state a claim for legal malpractice until his conviction is overturned or vacated."

Attorneys deal in areas of well settled law and in areas of "unsettled law."  Clients have problems or issues which exist, no matter how settled the law is in that area.  Attorneys are held to a standard of reasonable care in all aspects of their representation.  How does one square these contradictory settings?

An answer is given in HNH Intl., Ltd. v Pryor Cashman Sherman & Flynn LLP ; 2009 NY Slip Op 04964 ; Decided on June 18, 2009 ;Appellate Division, First Department .
 

"Plaintiffs allege that defendant, a law firm, incorrectly advised them concerning the early 20th century sound recordings they proposed to re-engineer, re-master and distribute as CDs. After the CDs had been manufactured and distributed, plaintiffs were sued and found liable for common-law copyright infringement.

The court dismissed the legal malpractice complaint, pursuant to CPLR 3211(a)(1), based on documentary evidence from which it concluded that the state of the law at the time the advice was given was unsettled and defendants therefore had not " failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession'" at that time (quoting Darby & Darby v VSI Intl., 95 NY2d 308, 313 [2000]).

We conclude, however, that the state of the law was not so unsettled at the time the advice was given as to bar as a matter of law plaintiffs' claim that a reasonably skilled attorney would have advised that the CDs were or might be entitled to common-law copyright protection and would not have advised that the release of the CDs would not result in any copyright liability. Although defendant maintains that it did advise plaintiffs of the possibility of common-law liability and did not advise plaintiffs that the release of the CDs would not result in any copyright liability, we must accept the facts alleged in the complaint as true and accord plaintiffs the benefit of every possible
favorable inference (Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & [*2]Steiner, 96 NY2d 300, 303 [2001]). "
 

In Weksler v Kane Kessler, P.C. ;2009 NY Slip Op 04957 ;Decided on June 16, 2009 ;Appellate Division, First Department  we see the fatal duo of lack of privity and lack of proximity.  The short story is that Plaintiff, while married to decedent was promised a life-long annuity of $ 4000 per month, said to come from the adult sons, so long as she remained married until decedent's death.  He went into the hospital, came out and filed for divorce.  The sons never funded the annuity.  Plaintiff sues the decedent's attorney who prepared the plan and the sons, and loses all around.
 

"As to the claim for legal malpractice, there was never an attorney-client relationship between plaintiff and the firm. Even assuming plaintiff had been the firm's client, she failed to show how such alleged malpractice caused her injury, as the agreement simply effectuated the intent of the parties, i.e., to provide plaintiff with an annuity during her lifetime subject to the stated terms and conditions (see Finova Capital Corp. v Berger, 18 AD3d 256 [2005]; cf. Mandel, Resnik & Kaiser, P.C. v E.I. Elecs., Inc., 41 AD3d 386 [2007]).

Plaintiff's remaining causes of action against the firm, for negligent misrepresention and tortious interference, are dismissed as redundant of the legal malpractice claim (see Shwartz v Olshan Grundman Frome & Rosenzweig, 302 AD2d 193 [2003]; Reyes v Leuzzi, 2005 NY Misc LEXIS 2914, *3, 2005 WL 3501578, *4; cf. William Kaufman Org. v Graham & James, 269 AD2d 171 [2000]). Finally, although such affirmative relief was not sought, the court did not err in denying plaintiff an opportunity to amend her complaint for a second time, as the proposed speculative allegations failed to establish any viable cause of action (see Davis & Davis v Morson, 286 AD2d 584 [2001]). "

The short answer is when there is spoliation.  Spoliation is the intentional or negligent destruction of evidence.  It may take place prior to, or during litigation, and it always deprives one side of the use of otherwise admissible evidence. 

In the helicopter case, it seems to have been intentional. IN RE HELICOPTER CRASH NEAR WENDLE CREEK, BRITISH COLUMBIA, ON AUGUST 8, 2002; Docket No. 3:04md1649 (SRU)
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT; 2009 U.S. Dist. LEXIS 41477; May 18, 2009,

Spoliation comes into the legal malpractice picture when, for example, defendant attorney fails to take discovery of important evidence in the underlying case, and the ability later to obtain that evidence no longer exists.  In a matrimonial legal malpractice case, it may no longer be possible to discovery the other spouse's financial records, and so plaintiff cannot show exactly how much she lost by target attorney's negligent failure to take discovery.

In the helicopter case: "...defendants' alleged failure to maintain or produce the allegedly "missing" records materially impaired her prosecution of her medical negligence and informed consent claims.

Plaintiff's "negligent spoliation" claim is akin to a legal malpractice claim [*6] in that "damages arise from the loss" -- or diminution of value -- of an underlying claim. . . . [P]plaintiff's primary medical negligence and informed consent claims ultimately failed for lack of proof of scientific/medical causation. Plaintiff argues that, if the allegedly absent records had been created or maintained and produced, Williamson might have been provided with the "missing link" that would have enabled him to identify and persuasively explain the causal relationship between gadolinium extravasation and Raynaud's syndrome. Specifically, plaintiff points to the fact that no records reflect the amount of gadolinium used during the procedure. . . .
 

We have commented about the Collateral Estoppel trap in legal malpractice with regard to fee arbitrations and hearings.  in short, when a court grants an attorney fee application, it implicitly determines that there can have been no malpractice, as the court may not award fees in the face of malpractice.  Fee arbitrations and hearings in state court happen, but not that often.  Bankruptcy fee hearings happen in every case, and in every case where fees are awarded to counsel, the question of res judicata comes up.

In re D.A. ELIA CONSTRUCTION CORP., Plaintiff, v. DAMON & MOREY, LLP, Defendant.;07-CV-143A  ;  UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NEW YORK;   389 B.R. 314; 2008 U.S. Dist. LEXIS 25496 has been the leading case on this issue.  There, attorneys who had been granted fees were able to fend off legal malpractice claims based upon res judicata.

Now, in PENTHOUSE MEDIA GROUP, INC., , - against - PACHULSKI STANG ZIEHL & JONES LLP, ;UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;  2009 U.S. Dist. LEXIS 46617 we see a slightly different result.  Judge Scheindlin sitting in appeal of a US Bankruptcy decision by Judge Bernstein, finds that the legal malpractice plaintiffs did not have a full and fair opportunity to be heard, and that res judicata does not control the issue of legal malpractice.

"Although Pachulski's fee application was approved by the bankruptcy court in the prior proceeding, I cannot conclude as a matter of law that PMG had a full and fair opportunity to litigate allegations of Pachulski's malpractice during that hearing. Many of the factors used to consider whether a party had a full and fair opportunity to litigate an issue favor PMG, particularly given PMG's continued retention of Pachulski as its counsel. For instance, one of the factors courts have considered is "the importance of the claim in the prior litigation." 45 PMG had just undergone a reorganization with the help of Pachulski as its counsel. The possibility that Pachulski may have committed malpractice while representing PMG during that reorganization may not have been at the forefront of PMG's concerns. In addition, PMG [*16] had no "incentive [or] initiative to litigate" the malpractice issue, 46 considering that it expected Pachulski to continue to advise PMG in the winding down of its bankruptcy proceeding.

Of particular importance to this Court is the bankruptcy court's reliance on D.A. Elia Construction Corp. 50 Judge Bernstein concluded that D.A. Elia was directly on point, 51 but D.A. Elia is perhaps even more clearly distinguishable from the instant case than other cases cited by Pachulski, as in that case the malpractice claim was actually litigated during the fee application proceeding. D.A. Elia emphasized that
many of the same allegations made by Elia in its [malpractice] complaint were previously made by Elia in its objections to Damon & Morey's final fee application. Specifically, Elia argued to the bankruptcy court that the firm had labored under a conflict of interest, had committed legal malpractice and had failed to turn over money owed to the estate. The bankruptcy court provided Elia with ample opportunity [to] raise those claims, but ultimately rejected them as meritless. 52
The district court concluded that "it cannot be said that Elia was denied the opportunity to raise these [malpractice] claims in the prior action." 53 In the instant case, PMG raised no such objections [*19] at the fee hearing."

Clients often ask whether it matters that their legal malpractice case comes as a defense to an attorney fee case.  It should not, but judges are swayed by the procedural setting of cases before them.  Does it make a difference whether the legal malpractice case is a main action or a counterclaim?  Taking a look at this case gives possible insight.

Kluczka v Lecci  2009 NY Slip Op 04867  Decided on June 9, 2009  Appellate Division, Second Department  holds that:
 

"The plaintiff retained the defendant attorney to represent him in a divorce action commenced by his former wife. The divorce action was settled by a stipulation pursuant to which the plaintiff agreed, inter alia, to waive his interest in the marital residence and give his former wife a share of his pension benefits, while she agreed to waive her interest in another property, and forgive certain child support arrears. The plaintiff thereafter commenced this action, contending that the defendant had committed legal malpractice by recommending that the plaintiff enter into the stipulation without obtaining appraisals of the subject real property or his pension.

Here, the defendant made a prima facie showing that he was entitled to summary judgment by demonstrating that the stipulation in the underlying divorce action was a provident agreement which provided both parties with benefits, and that his allegedly negligent failure to obtain appraisals did not cause the plaintiff to incur any damages. In opposition, the plaintiff failed to raise an issue of fact as to whether he incurred damages by submitting evidentiary proof that, but for the defendant's alleged negligence, he would have been able to negotiate a more favorable settlement (see Rapp v Lauer, 229 AD2d 383, 384; Rogers v Ettinger, 163 AD2d 257, 258). Accordingly, the Supreme Court should have granted that branch of the defendant's motion which was for summary judgment dismissing the complaint.

However, the court properly denied that branch of the plaintiff's cross motion which was for summary judgment dismissing the defendant's counterclaim to recover unpaid legal fees. An attorney may not recover fees for legal services performed in a negligent manner even where that negligence is not a proximate cause of the client's injury (see Martin, Van de Walle, Guarino & Donohue v Yohay, 149 AD2d 477, 480; Campagnola v Mulholland, Minion & Roe, 148 AD2d 155, 158, affd 76 NY2d 38). Here, the submissions of both parties demonstrate that there is a sharply disputed issue of fact as to whether the defendant's performance of legal services, as measured against that of an attorney of reasonable skill and knowledge, was negligent (see Kutner v Catterson, 56 AD3d 437). Thus, the issue of whether the defendant is entitled to recover legal fees on his counterclaim must await resolution at trial. "

CPLR 3211 (a)(1) is the "documentary evidence" portion of a general pre-answer motion to dismiss.  The standard applied to dismissal motions under this particular sub-section is:

"On a motion to dismiss based upon documentary evidence, dismissal is only warranted if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law" (Klein v Gutman, 12 AD3d 417, 418; see CPLR 3211[a][1]; Saxony Ice Co., Div. of Springfield Ice Co., Inc. v Ultimate Energy Rest. Corp., 27 AD3d 445). Moreover, where "evidentiary material is submitted and considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), the court must determine whether the plaintiff has a cause of action, not whether the plaintiff has stated one" (Steve Elliot, LLC v Teplitsky, 59 AD3d 523, 524, citing Guggenheimer v Ginzburg, 43 NY2d 268, 275). "[U]nless it has been shown that a material fact as claimed by the [plaintiff] to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it . . . dismissal should not eventuate" (Guggenheimer v Ginzburg, 43 NY2d at 275).
 

Here, in the quote taken from Walker v Kramer ; 2009 NY Slip Op 04414 ;  Decided on June 2, 2009 ;  Appellate Division, Second Department we see a situation in which neither defendant demonstrated their right to dismissal.  Plaintiff has adequately stated a cause of action, or indeed, has a cause of action which the court discerned, in this matrimonial legal malpractice case.
 

A "client's unilateral belief" in the attorney-client relationship is insufficient to prove privity between the attorney and client, sufficient for a legal malpractice lawsuit, but subsequent behavior or acts by the attorneys might provide the necessary proof.  Here, in Terio v Spodek ;  2009 NY Slip Op 04412
Decided on June 2, 2009 ; Appellate Division, Second Department  we see how that might happen:
 

"To recover damages for legal malpractice, a plaintiff must prove, inter alia, the existence of an attorney-client relationship (see Velasquez v Katz, 42 AD3d 566, 567; Moran v Hurst, 32 AD3d 909; Wei Cheng Chang v Pi, 288 AD2d 378, 380; Volpe v Canfield, 237 AD2d 282, 283). While a plaintiff's unilateral belief does not confer upon him or her the status of client (see Volpe v Canfield, 237 AD2d at 283), an attorney-client relationship may exist in the absence of a formal retainer agreement (see e.g. Swalg Dev. Corp. v Gaines, 274 AD2d 385, 386). To establish an attorney-client relationship there must be an explicit undertaking to perform a specific task (see Wei Cheng Chang v Pi, 288 AD2d 378; Volpe v Canfield, 237 AD2d at 283).

Here, Reich failed to establish, as a matter of law, that an attorney-client relationship was not formed and did not exist during the time that the alleged acts of negligence occurred. Reich's submissions demonstrated that it consulted with the plaintiff, advised her of her chances of success, and negotiated a settlement with a bankruptcy trustee. Contrary to Reich's arguments, the fact that it was purportedly not the attorney of record at the time of a hearing before the United States Bankruptcy Court to determine whether the particular asset at issue qualified as an exemption, is not dispositive of the existence of an attorney-client relationship during the period of the alleged negligence. "

In the past six months, new life has been breathed into Judiciary law 487.  It may well be the oldest statute in Anglo-American jurisprudence.  Dating from1275  the statute provides that an attorney who is guilty of any deceit or collusion, may be guilty of a misdemeanor and held for treble damages.

Since the Court of Appeals decided Amalfitano v Rosenberg   12 NY3d 8 a rise in the acceptance of, and application of the statute has been seen.  Here, in a Fourth Department case, Scarborough v Napoli, Kaiser & Bern, Llp ;2009 NY Slip Op 04475 ;Decided on June 5, 2009 ;Appellate Division, Fourth Department  we see summary judgment being denied to the target attorney defendants,

"The medical malpractice action was dismissed against the underlying medical defendants after defendants failed to file a timely note of issue. Following the dismissal of that action, defendants asked plaintiff to sign a stipulation of discontinuance with respect to the underlying action, which in fact had already been dismissed. According to plaintiff, he was informed that he could not prevail in his underlying action but was never informed that the action already had been dismissed as a result of defendants' failure to file [*2]a timely note of issue. Subsequently, a member of defendants' firm telephoned plaintiff and told him the actual basis for the dismissal of the underlying action.

Plaintiff thereafter commenced this action asserting causes of action for legal malpractice and for treble damages pursuant to Judiciary Law § 487. Defendants moved for summary judgment dismissing the amended complaint in its entirety on the ground that no acts or omissions by the underlying medical defendants were the proximate cause of the death of plaintiff's father, an essential element of a cause of action for legal malpractice.

Contrary to the further contention of defendants, the court properly determined that none of the defendants is entitled to summary judgment dismissing the Judiciary Law § 487 cause of action. That statute provides in relevant part that an attorney who is "guilty of deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party . . . [i]s guilty of a misdemeanor, and . . . he [or she] forfeits to the party injured treble damages, to be recovered in a civil action." "A violation of Judiciary Law § 487 may be established either by the defendant's alleged deceit or by an alleged chronic, extreme pattern of legal delinquency by the defendant' " (Izko Sportswear Co., Inc. v Flaum, 25 AD3d 534, 537; see Amalfitano v Rosenberg, 12 NY3d 8; Schindler v Issler & Schrage, 262 AD2d 226, lv dismissed 94 NY2d 791, rearg denied 94 NY2d 859). Here, the documents submitted by defendants in support of their motion establish that some of the attorneys at defendant law firm engaged in intentional deceit, and thus by their own submissions defendants defeated their entitlement to summary judgment dismissing that cause of action. "

In both Federal District Court and in State Court in New York attorneys have a "retaining lien" under Judiciary Law 475.  In Federal District Court the rule is set forth in Katz v. Image Innovations Holdings Inc., 06 Civ. 3707;Decided: May 27, 2009; District Judge John G. Koeltl

U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

"It is well settled in this Circuit that an attorney may claim a retaining lien for outstanding unpaid fees and disbursements on a client's papers and property that came into the attorney's possession as the result of his professional representation of that client. See Pomerantz v. Schandler, 704 F.2d 681, 683 (2d Cir. 1983) (per curiam) (citing In re San Juan Gold, Inc., 96 F.2d 60 (2d Cir. 1938)). This right to a retaining lien is grounded in common law, and is enforced in federal courts unless a specific federal law alters the parties' rights. See Allstate Ins. Co. v. Nandi, 258 F.Supp.2d 309, 311 (S.D.N.Y. 2003) (citing Rivkin v. A.J. Hollander & Co., Inc., No. 95 Civ. 9314, 1996 WL 633217, at *2 (S.D.N.Y. Nov. 1, 1996)). In this case, no federal law prevents the Court from fixing a retaining lien.

The decision to fix a retaining lien lies within the discretion of the district court. See Allstate, 258 F.Supp.2d at 311 (citing Pay Television of Greater New York, Inc. v. Sheridan, 766 F.2d 92, 94 (2d Cir. 1985) (per curiam)). A retaining lien attaches "when the action is commenced and remains in force when an attorney is discharged without cause." See Allstate, 258 F.Supp.2d at 312 (quoting Casper v. Lew Lieberbaum & Co., Inc., No. 97 Civ. 3016, 1999 WL 335334, at *8 (S.D.N.Y. May 26, 1999)). While an attorney who has been discharged for cause has no right to compensation or to a retaining lien, an attorney who has been discharged without cause is entitled to be paid a fee on a quantum meruit basis for the reasonable value of the legal services that were provided. See Viada v. Osaka Health Spa, Inc., No. 04 Civ. 2744, 2005 WL 3481196, at *2 (S.D.N.Y. Dec. 19, 2005) (citing Gurry v. Glaxo Wellcome, Inc., No. 98 Civ. 6243, 2000 WL 1702028, at *1 (S.D.N.Y. Nov. 14, 2000)). When counsel is granted leave to withdraw by the court, the discharge is not for cause. See Viada, 2005 WL 3481196, at *2. Absent a defendant's urgent need for the papers subject to the retaining lien, such as for a criminal trial, the Court of Appeals for the Second Circuit has held it an abuse of discretion to require withdrawing counsel to turn over papers subject to a retaining lien without conditioning it on payment or posting bond for payment of outstanding legal fees. See Pomerantz, 704 F.2d at 683-684."
 

How are "inefficiencies" such as intra-office conferences and duplication of effort handled?

"There is some duplication caused by McCarter's employment of 14 attorneys in this matter, and its billing for internal conferences. (See generally Ex. A, Moran Decl., Jan. 21, 2009.) A deduction of 5 percent from the attorney's fees adequately compensates for this inefficiency. See New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1146 (2d Cir. 1983) (endorsing percentage reductions as a practical means of reducing a fee application to avoid an excessive fee, and noting percentage reductions of 5 percent to 22 percent ); Mr. X v. New York State Educ. Dept., 20 F.Supp.2d 561, 564 (S.D.N.Y. 1998) (reducing requested attorney's fees award by twenty percent for, among other considerations, duplicative work)."