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.