An Arbitration, A Falling Out of Attorneys, Legal Malpractice Litigation
Two mega law firms work together to present the case of an attorney against his former partnership. The arbitration goes badly, expert witnesses are precluded and the award is not good for plaintiff. Shortly thereafter law firm 1 starts a legal malpractice action against law firm 2. Needless to say, relations between them do not proceed smoothly.
Roberts v Corwin 2013 NY Slip Op 51637(U) Decided on October 3, 2013 Supreme Court, New York County Friedman, J. illustrates the fall-out after unsuccessful litigation.
"Mr. Roberts retained Greenberg Traurig to represent him in an arbitration against the firm he founded, Roberts & Finger, LLP. The arbitration panel issued an adverse interim award on May 11, 2006, finding that Mr. Roberts "failed to establish a prima facie case [*2]that he has suffered any damage as a result of the manner in which the dissolution of Rogers & Finger LLP was carried out." (Interim Award, ¶ 10.) The panel's determination was based in pertinent part on Mr. Roberts' failure to present expert testimony as to the value of the law firm and its assets. (Id., ¶¶ 8, 9, 10.) Mr. Roberts retained Epstein Becker to serve as co-counsel to Greenberg Traurig in the arbitration in May 2006, after the panel's issuance of the interim award. (May 2012 Decision at 19.) The panel issued an adverse final award on July 13, 2006, incorporating the interim award. (Final Award.) Mr. Roberts' petition to vacate the unfavorable final award was denied by order of this Court (Moskowitz, J.), dated April 3, 2007. (Sept. 2012 Decision at 4.) Mr. Roberts ultimately reached a global settlement with Roberts & Finger in August 2007. (Sept. 2012 Decision at 24; Complaint, ¶ 55.)
Shortly after the issuance of the adverse interim award, and while Epstein Becker, through Mr. Cozier, was co-counseling with Greenberg Traurig to obtain relief from the award, Mr. Roberts consulted with John Sachs, also an attorney at Epstein Becker, regarding a possible malpractice action against Greenberg Traurig.[FN1] Although the parties dispute the date as of which Epstein Becker was retained for the malpractice action, it is undisputed that Mr. Roberts consulted with Mr. Sachs as early as May 2006, and that a formal demand was not served until October 2007.[FN2] This demand, made by letter dated October 18, 2007 (Sachs Aff., Ex. 1), asserted that the arbitrators precluded expert testimony on the valuation of Mr. Roberts' partnership interest based on Greenberg Traurig's failure to disclose that it would call an expert, and that such failure constituted malpractice. This malpractice action was filed on October 30, 2009, and was also based on Greenberg Traurig's failure to disclose the expert witness.
Greenberg Traurig contends that Epstein Becker misused its position as co-counsel "to build a record against [Greenberg Traurig] to support a purported malpractice claim." (Ds.' Memo. of Law in Support at 15.) In support, Greenberg Traurig cites Mr. Corwin's testimony that he "disclosed to [Epstein Becker] and Cozier, without reservation of any kind, as I would to any of my own colleagues at [Greenberg Traurig], or to any other qualified lawyer selected by Roberts to be my co-counsel, all information that would be helpful to them in understanding the background of the case and, in particular, all aspects of the underlying arbitration." (Corwin Aff., ¶ 17.) "
"As previously noted, Epstein Becker's simultaneous representation of Mr. Roberts for purposes of both mitigating damages in the arbitration proceeding and preparing for a possible malpractice action raises ethical concerns. (See May 14, 2012 Tr. at 25-26.) However, this case does not involve the egregious conduct in obtaining confidential information through deceptive means, or an inherent conflict of interest, which has been held to require the severe remedy of disqualification.
Greenberg Traurig also relies on alleged violations of the ethical rules governing attorney conduct (22 NYCRR 1200.0) to buttress its claim that Mr. Roberts' complaint should be dismissed or Epstein Becker disqualified as his attorney. (Ds.' Memo. in Support at 18-21.) Rule 4.3, which Greenberg Traurig cites, provides that a lawyer shall not "state or imply that the lawyer is disinterested" when communicating with a person who is not represented, or give legal [*4]advice to that person. Rule 8.4 (c) and its predecessor, Disciplinary Rule 1-102, also prohibit dishonest and deceitful conduct. The court credits Greenberg Traurig's claim that Rule 4.3, which did not exist at the time of Epstein Becker's alleged misconduct, is consistent with a lawyer's " general obligation not to engage in conduct involving dishonesty, deceit, fraud, or misrepresentation.'" (Reply Memo. Of Law at 12 [quoting Roy D. Simon, Simon's New York Rules of Professional Conduct Annotated at 850 ].) The court finds, however, that Rule 4.3 is not applicable to the co-counseling relationship. Rule 8.4 (c) also is not implicated because this case does not involve the type of egregious conduct that has been held to warrant disqualification or sanctions. The court further rejects Greenberg Traurig's claim that Epstein Becker violated Rule 3.1 (a) which provides that a lawyer shall not bring or defend a frivolous claim. Epstein Becker has not engaged in frivolous conduct by arguing in the arbitration proceeding that the panel should not have rejected Mr. Roberts' damages evidence, while now arguing in this malpractice action that Greenberg Traurig committed malpractice by not noticing an expert on damages. "