Courts have found many ways to award attorney fees and force litigants to pay them.  Sometimes it is on the merits and sometimes litigants are the losers on technical issues.  One of the more interesting wrinkles in legal malpractice  is the question of attorney fee awards and collateral estoppel of the subsequent legal malpractice case. 

Urias v Daniel P. Buttafuoco & Assoc., PLLC,  2014 NY Slip Op 06198 Decided on September 17, 2014  Appellate Division, Second Department is a recent example.

‘The plaintiff, Delfina Urias, individually and as guardian of her husband, Manuel Urias, commenced a medical malpractice action against the healthcare professionals and providers responsible for treating him. The defendant Daniel P. Buttafuoco & Associates, PLLC (hereinafter the Buttafuoco Firm), represented the plaintiff in the underlying medical malpractice action. On April 2, 2009, shortly before the trial was to begin, the medical malpractice action was settled in open court for the sum of $3,700,000, and the liability was allocated among the various defendants in that action. On July 20, 2009, counsel for the parties to the medical malpractice action appeared before the Supreme Court, Suffolk County, in connection with a proposed change to the terms of the settlement. At that conference, the court, inter alia, approved the award of an attorney’s fee to the Buttafuoco Firm in the sum of $864,552. To calculate the attorney’s fee, the Buttafuoco Firm applied the "sliding scale" set forth in the retainer agreement and in Judiciary Law § 474-a(2) to each individual medical malpractice defendant’s settlement amount, rather than the total settlement amount, which resulted in a larger attorney’s fee for the Buttafuoco Firm. The Buttafuoco Firm later reduced its attorney’s fee to $710,000.

Meanwhile, the plaintiff retained the defendant John Newman to represent her in a proceeding in the Supreme Court, Nassau County, to appoint a guardian on behalf of Manuel Urias and to obtain approval of the settlement in the medical malpractice action. The plaintiff complained to Newman about the manner in which the Buttafuoco Firm calculated its fee. Subsequently, Newman moved for approval of the medical malpractice settlement in the guardianship proceeding. In an order dated October 27, 2009, the Supreme Court, Nassau County, among other things, denied approval of the settlement and the attorney’s fee, without prejudice to reconsideration, and directed that the issue of the Buttafuoco Firm’s attorney’s fee be revisited by the Supreme Court, Suffolk County. Newman then moved in the Supreme Court, Suffolk County, to confirm the amount of the attorney’s fee awarded to the Buttafuoco Firm. In an order dated March 24, 2010, the Supreme Court, Suffolk County, formally approved the attorney’s fee as previously calculated. Thereafter, in an order dated June 7, 2010, the Supreme Court, Nassau County, in the context of the guardianship proceeding before it, approved the settlement agreement and the attorney’s fee awarded in the malpractice action.

In 2011, the plaintiff commenced the instant action against Newman, as well as the Buttafuoco Firm, the related law firm of Daniel P. Buttafuoco, LLC, and the Buttafuoco Firm’s principal attorney, Daniel P. Buttafuoco (hereinafter collectively the Buttafuoco defendants), inter alia, to recover damages for legal malpractice. The Buttafuoco defendants and Newman separately moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against each of them.

Moreover, the Buttafuoco defendants were not entitled to dismissal pursuant to CPLR 3211(a)(5) on the ground of collateral estoppel. Generally, the award of an attorney’s fee to an attorney necessarily establishes that there was no legal malpractice (see Izko Sportswear Co., Inc. v Flaum, 25 AD3d 534, 537; Siegel v Werner & Zaroff, 270 AD2d 119, 120). The Buttafuoco Firm established, prima facie (see Plain v Vassar Bros. Hosp., 115 AD3d 922, 923), that the issue of whether it committed legal malpractice was necessarily decided in its favor when it was awarded a fee in connection with its representation of the plaintiff in the underlying medical malpractice action (see D’Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659, 664; Montoya v JL Astoria Sound, Inc., 92 AD3d 736, 738). However, in opposition, the plaintiff raised a question of fact as to whether she was deprived of a full and fair opportunity to litigate the issue. Inasmuch as Newman moved, on behalf of the plaintiff, to confirm the amount of the attorney’s fee awarded to the Buttafuoco Firm, and that relief was granted, had the plaintiff attempted to appeal from that order, her appeal would have been dismissed for lack of aggrievement (see CLPR 5511; Village of Croton-on-Hudson v Northeast Interchange Ry., LLC, 46 AD3d 546, 548). Under these particular circumstances, where the plaintiff could not appeal, an issue of fact was raised as to whether she had a full and fair opportunity to litigate the issue of the alleged malpractice committed by the Buttafuoco Firm and, thus, whether she was collaterally estopped from asserting that the Buttafuoco defendants committed legal malpractice in obtaining judicial approval of the fee award (see Davidov v Searles, 84 AD3d 859, 860)."