Is It Legal Malpractice Not to Tell The Client to Review Its Insurance?
Client is sued for trade dress infringement. "Trade Dress" are those non-functional aspects of an otherwise patented item. Even after the patent runs out, "trade dress", or the appearance of a thing, remains protected.
Client had insurance that may have covered the law suit in which it was a defendant. InUtica Cutlery Co. v Hiscock & Barclay, LLP 2013 NY Slip Op 06171 Released on September 27, 2013 Appellate Division, Fourth Department we see the 4th Department denying summary judgment to defendant on the argument that its malpractice may be "a" proximate cause of the damages, even if not "the" proximate cause of the Damages.
"Defendant moved for summary judgment on the ground that plaintiff had a contractual duty and actual knowledge of the requirement to notify its insurers of the commencement of the underlying action, which superceded any alleged duty that defendant had to plaintiff. We conclude that defendant "failed to meet its burden of establishing as a matter of law that any alleged negligence on its part was not a proximate cause of plaintiff['s] damages" (New Kayak Pool Corp. v Kavinoky Cook LLP, 74 AD3d 1852, 1853). Notably, a plaintiff in a legal malpractice action must establish that the defendant law firm was a proximate cause of damages, but need not establish that it was the proximate cause (see Barnett v Schwartz, 47 AD3d 197, 204-205). Defendant also failed to establish that plaintiff's conduct was an intervening and superseding cause such that defendant's alleged negligence was not a proximate cause of any damages (cf. Alden v Brindisi, Murad, Brindisi, Pearlman, Julian & Pertz ["The People's Lawyer"], 91 AD3d 1311, 1311; see generally Arnav Indus., Inc. Retirement Trust v Brown, [*2]Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 304-305).
Contrary to defendant's contention, the court properly denied its alternative request for partial summary judgment on the second and fourth affirmative defenses and dismissal of a particular claim for damages. Defendant correctly notes that the insurance policies required plaintiff to give timely notice of the underlying action and properly alleges the culpable conduct of plaintiff in failing to give notice in a timely manner to the insurance companies as an affirmative defense (see generally Arnav Indus., Inc. Retirement Trust, 96 NY2d at 305 n 2). On this record, however, defendant has not established that plaintiff was comparatively negligent as a matter of law. Plaintiff's president explained at his deposition and in his affidavit the reason why he failed to give timely notice to the insurance companies, i.e., he did not believe that the underlying claim was covered by insurance. Whether that belief was reasonable and negated any culpable conduct on plaintiff's part is for a jury to determine. We further conclude that defendant failed to establish as a matter of law that the insurance policies would not have covered certain damages paid by plaintiff in the underlying action. "
We wonder why Darby & Darby, P.C. v. VSI, Int;l, 95 NY2d 308 (2000) was not mentioned. The Court of Appeals wrote: "A New York law firm retained to defend a corporate client in a Florida patent infringement litigation had no duty to advise the client about possible insurance coverage for the costs of the litigation. Defendants' claim is based on a then novel theory that patent insurance coverage was available under an "advertising liability" clause in general liability policies, and at the time of plaintiff's representation, neither New York nor Florida recognized the duty of an insurer to defend patent infringement claims under a general liability policy's advertising injury clause. "