CELEBRITY CRUISES INC., and FANTASIA CRUISING INC., Plaintiffs, – against – ESSEF CORP., PAC-FAB, INC., and STRUCTURAL EUROPE N.V. (f/n/a SFC), Defendants.

96 Civ. 3135 (JCF)

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
2008 U.S. Dist. LEXIS 568
January 4, 2008, Decided

This is a cruise line injury action. “After passengers sued plaintiff cruise line for injuries from an illness suffered while on a trip, the cruise line sued defendant manufacturer, which had designed, manufactured, and distributed the water filter in the whirlpool spa where the illness originated. After two damages trials, which resulted in an award of $ 15 million lost profits award for the cruise line, the parties filed various motions regarding damages.”

“This case has been litigated in installments. Having agreed to proceed before me for all purposes pursuant to 28 U.S.C. § 636(c), the parties stipulated to determination of all liability issues–those arising out of Celebrity’s claims as well as those related to the passengers’ claims–in a single bellwether trial. That trial took place in May 2000. The jury returned a verdict in favor of the passenger plaintiffs and against both Celebrity and Essef. The jury also found in favor of Celebrity on its claims against Essef, and a damages trial based [*4] on that determination was conducted in the spring of 2006. When the jury in the 2006 damages trial returned a verdict in favor of Celebrity for approximately $ 190 million, Essef moved for judgment as a matter of law or, in the alternative, for a new trial. I granted that motion in part, awarding judgment to Essef on one category of damage claims and ordering the retrial of another. Celebrity Cruises Inc. v. Essef Corp., 478 F. Supp. 2d 440 (S.D.N.Y. 2007) ("Celebrity IV"). A second trial on damages was held in June 2007, and this time the jury found Essef liable to Celebrity for approximately $ 15 million in lost profits.

“Second, Celebrity points out that in a legal malpractice action brought by Essef against its former counsel, Squire, Sanders and Dempsey LLP, Essef has argued [*21] that it was injured by the firm’s failure to seek a jury determination of comparative fault with respect to Celebrity’s claims against Essef. This, according to Celebrity, estops Essef from contending that it did not waive the right to avail itself of principles of comparative negligence. (Celebrity Memo. at 10). But nothing prevents Essef from pleading in the alternative by, as in this instance, asserting a contingent or hypothetical claim: if Essef is found to have waived comparative negligence, only then does it have a malpractice claim arising out of that failure. See Lawser v. Poudre School District R-1, 171 F. Supp. 2d 1155, 1158 (D. Colo. 2001) (finding that HN3 contingent claim is permissible hypothetical pleading). The predicate pled for that contingent claim, however, does not operate as a binding admission. See Henry v. Daytop Village, Inc., 42 F.3d 89, 95-96 (2d Cir. 1994); Ascher v. Target Corp., No. 05-CV-4826, 522 F. Supp. 2d 452, 2007 U.S. Dist. LEXIS 84015, 2007 WL 3287441, at *5 (E.D.N.Y. Oct. 16, 2007).”

CITAK & CITAK et al., Plaintiffs, -against- THE ST. PAUL TRAVELERS COS., INC., Defendant.

07 Civ. 5459 (WHP)

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
2007 U.S. Dist. LEXIS 94040
December 26, 2007, Decided

This is a diversity jurisdiction case in which the law firm has asked for a declaratory judgment that it is covered by a subject legal malpractice insurance policy..

The Citak Firm “claims that St. Paul’s refused to provide counsel and indemnify them for a malpractice claim tiled against them on November 3, 2006 in New York State Supreme Court (New York County) by Stuart and Carina Marton (the "Marton Action"). The Martons allege that the Citaks’ legal malpractice damaged them in their pursuit of an arbitration award against a contractor. (Harwood Decl. Ex. C: Complaint, Marton v. Citak & Citak, No. 116472-06 (N.Y. Sup. Ct. Nov. 3, 2006.) The Martons seek "at least $ 60,000 in damages, with interest from November 29, 2000, together with plaintiffs’ costs and disbursements in [the] action." (Harwood Decl. Ex. C at 9.) After an arbitrator awarded the Martons $ 62,367.32 against their contractor, the Citaks moved [*3] to dismiss the Marton Action arguing that, having won the arbitration, the Martons could not demonstrate that the Citaks’ alleged malpractice had caused them any harm. On October 11, 2007, the New York State Supreme Court denied the Citaks’ motion to dismiss because (1) "but for defendants’ negligence, [the Martons] would have procured a judgment against [the contractor] while that entity had assets sufficient to satisfy the judgment;" and (2) the arbitrator denied the Martons’ request for $ 36,632.11 in pre-judgment interest, finding that the Citaks, and not the contractor, were responsible for the nearly seven year delay in bringing the arbitration. (Decision and Order, Marton v. Citak & Citak, No. 116472-06 (N.Y. Sup. Ct. Oct. 11, 2007) at 4.)”