Here is the difference between legal malpractice and all other forms of litigation, distilled to a single sentence by Justice Kornreich in NextEra Energy, Inc. v Greenberg Traurig, LLP 2018 NY Slip Op 30638(U) April 11, 2018 Supreme Court, New York County Docket Number: 652484/2017
“Between August 2002 and December 2010, NextEra was represented in the Bankruptcy
Action by Greenberg Traurig. From December 2010 through the remainder of the proceedings,
NextEra was represented by Skadden, Al-ps, Slate, Meagher & Flom LLP (Skadden). NextEra
changed counsel due to Greenberg Traurig’s failure to assert an affirmative defense at the outset
of the Bankruptcy Action. As discussed herein, such delay resulted in the bankruptcy court
(Gerber, J.), upon Skadden’s motion, denying NextEra’s motion for leave to amend. That said,
Judge Gerber made it clear at oral argument that even if the defense had been timely pleaded by NextEra, it would have failed on the merits. “
The facts and analysis of why the defense would have failed on the merits takes up many pages, but the message is that a mistake has been pointed out, and the mistake is clear. However, in this “case-within-a-case” analysis, it would not have made a whit of difference.
Put in more elegant language by the Judge: “This fact is dispositive. It is well settled that “in order to prevail in an action for legal malpractice, the plaintiff must plead factual allegations which, if proven at trial, would demonstrate that counsel had breached a duty owed to the client, that the breach,was the proximate cause of the injuries, and that actual damages were sustained.” Dweck Law Firm, LLP v Mann, 283 AD2d 292, 293 (1st Dept 2001) (emphasis added); see Heritage Partners, LLC v Stroock & Stroock & Lavan LLP, 133 AD3d 428, 428-29 (1st Dept 2015). On a malpractice claim, proximate causation is “but for” causation. Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 50 (2015), citing AmBase, 8 NY3d at 434. Here, there is nothing that Greenberg Traurig could have done to avoid a trial and, therefore, its alleged
malpractice was not the “but for” cause of NextEra’s trial and appellate expenses. While it surely would have been better practice for Greenberg Traurig to plead a section 546( e) defense at the outset if that was a defense it intended to assert, the failure to do so in this instance did not end up harming NextEra. FPLG ultimately won at trial because Adelphia failed to prove insolvency. 16 The only marginally better outcome would have been a win on summary judgment. Given the timeline of the Bankruptcy Action, an earlier assertion of a section 546( e) defense could not have plausibly resulted in summary dismissal. See Heritage Partners LLC v Stroock & Stroock & Lavan LLP, 155 AD3d 561 (1st Dept 2017) (causation cannot be based on “speculative nature of plaintiffs’ claim.”). NextEra’s section 546(e) defense had two possible fates: (1) early pleading, which would have resulted in dismissal based on Judge Gerber’s clear pre-Enron view of the law; or (2) late pleading, which, as we know, resulted in dismissal for inexcusable delay. Greenberg Traurig could not have avoided these outcomes. Ergo, it cannot be held liable for malpractice.”