Well, not for simply hiring an e-Discovery company, but for hiring a pet e-Discovery company which egregiously overbilled might lead to liability for the law firm. We look at FTI Consulting, Inc. v CT Miami, LLC 2018 NY Slip Op 31923(U) August 6, 2018 Supreme Court, New York County
Docket Number: 654062/2016 Judge: Melissa A. Crane for a second day.
“The following facts are from the third-party complaint (TPC). Akerman, a law firm, represented CT Miami in connection with a certain Florida litigation (the Florida litigation) (TPC, ¶2-3, 5). While that matter was ongoing, Akerman recommended that CT Miami hire an e-discovery company, plaintiff FTI Consulting, Inc. (FTI) to provide support services (TPC, ¶ 8-9). CT Miami hired FTI in September 2013 (id., i!7). CT Miami claims at that time the estimated cost of FTI’s services the parties agreed to was $4,900 (id., ¶ 8-10). CT Miami also claims that “Akerman explicitly confirmed” that it was only obligated to pay the $4,900 estimate amount (id.,¶ 15).
Nevertheless, “[i]n late 2013 and early 2014, CT Miami began to receive outrageous bills from plaintiff, in amounts in excess of $100,000” (id., 21 ). CT Miami claims it was unaware that FTI had undertaken further work beyond the $4,900 estimate and expected to be compensated for this work (id., 22). CT Miami also claims that, “[t]he Florida litigation did not require e-discovery in the scope billed by plaintiff’ (id., 23). When it raised the issue with its counsel, Akerman urged CT Miami to just pay FTI’s bill (id., 25-28). CT Miami claims that Akerman had a preexisting relationship with FTI and was interested in maintaining that relationship to the detriment of CT Miami (id., 32-33). When CT Miami refused, FTI commenced an action against it (the main action) (id., 29). CT Miami now brings this third party action against Akerman for: (1) breach of contract; (2) declaratory judgment; (3) breach of fiduciary duty; (4) contribution/indemnification; and (5) negligence. ”
“It is well settled that the relationship of client and counsel is one of ‘unique fiduciary reliance”‘ (Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 9 [1st Dept 2008] [citing Matter of Cooperman, 83 NY2d 465, 472 ). CT Miami claims that it hired FTI based solely on Akerman’s recommendation and trusted Akerman to oversee that relationship. Akerman, in tum, claims that the plain language of FTI’s engagement letter makes clear that CT Miami obligated itself to pay all of FTI’ s bills. A client may reasonably rely on their counsel’s advice in choosing vendors and outside contractors. The court cannot determine on this motion what representations Akerman may have made to CT Miami with respect to the services that FTI would provide or how much they would cost. On this record, it is clear that CT Miami, at minimum, inquired and was concerned about the costs involved. Moreover, Akerman was aware of these concerns. On a motion to dismiss, the Court must credit CT Miami’s allegations that, among other things: (1) FTI was not authorized to undertake additional work, (2)that Akerman never discussed the charges this work would involve, (3) that Akerman prioritized its relationship with FT Miami over its fiduciary obligations to its client, and (4) that CT Miami had no knowledge of the e-discovery process and relied on Akerman to oversee that process (TPC, 22, 24, 26-28, 48-52). The claim for breach of fiduciary duty is, thus, sufficient. “