Sometimes lawyers believe that they can affect the climate of litigation by getting a little press attention. This may work on occasion, but can wreck a case as well. Barr v Liddle & Robertson, L.L.P. 2018 NY Slip Op 33113(U) December 3, 2018 Supreme Court, New York County Docket Number: 159781/14 Judge: Manuel J. Mendez is an example of the dangers of announcing a new law suit.
“This action arises from an alleged legal malpractice occurring in December 2002 and January 2003. Plaintiff was a managing director at an investment firm, Robertson Stephens Inc. (hereinafter “RSI”), which was indirectly owned by Robert Stephens Group Inc. (RSGI), both entities were subsidiaries of the parent company, FleetBoston Financial Corporation (hereinafter “FleetBoston”). In July of 2002 plaintiff was terminated from his employment as part of FleetBoston’s shut down of the subsidiaries. Plaintiff’s alleged compensation structure prior to termination consisted of a base salary and an annual bonus that included deferral of bonuses earned in the prior fiscal year, a Cash Equivalent Plan (CEP) and equity in the investment firm in the form of Restricted Stock Units (RSUs). ”
“Instead of signing the separation agreement plaintiff and 41 other former employees of RSI each separately retained defendants to represent them and commenced an arbitration action before the New York Stock Exchange against the RSI, RSGI, and FleetBoston (Mot. Exh.C). After commencement of the action, defendants made comments to the Wall Street Journal and the New York Times about the arbitration. On December 12, 2002 an article was published in the Wall Street Journal titled “Robertson Band Claims Fleet Owes Some Bonuses.” The article specifically
referred to statements made by defendant Jeffrey Liddle (Mot. Exh. E, Cross-Mot., Barr Aft. Exh. G).
Plaintiff alleges that on December 10, 2002 defendants provided the Wall Street Journal with copies of two press releases, and a copy of a draft Statement of Claim for the arbitration, the day before it was actually filed (Cross-Mot., Haley Aft., Exhs. E, F, G and H). In a letter dated May 2, 2003 RSGI advised plaintiff that he was in violation of the non-disparagement provisions of the CEP section 8.1 and the Restricted Unit Award Agreement, section 4.6. The letter stated that plaintiff would not be paid his Deferred Compensation or awards of stock. The letter does not state the reasons for finding plaintiff was in violation of CEP section 8.1 or the Restricted Unit Awards Agreement (Mot. Exh. F).”
“The parties proceeded with the arbitration. On September 12, 2007 the arbitration panel issued a full and final award of $14,690,000.00, but only as to twenty seven of the claimants. Plaintiff and eleven other claimants were not awarded their bonuses or any compensation (Mot. Exh. I). The parties then commenced an action in the United States District Court which determined that the CEP and RSU claims were resolved as part of the arbitration and barred by res judicata (Mot. Exh. K). On March 23, 2011 the United States Court of Appeals for the First Circuit affirmed the United States District Court (Mot. Exh. L). The United States Court of Appeals for the First Circuit noted that the arbitration panel was silent as to how they reached the amount of the award, but none of the parties requested remand to the arbitral panel for clarification (Mot. Exh. L). On October 11, 2011 the Supreme Court of the United States denied plaintiff’s petition for writ of certiorari (Alt v. Robertson Stephens Group, Inc., 132 S. Ct. 414 ). ”
‘Plaintiff raises an issue of fact on the issue of negligence and duty of care by arguing that only defendants’ “fee” was excluded in the retainer agreement, and that there is no specific language excluding representation as to the CEP plan. Paragraphs D and E exclude the CEP for 2001 and 2002 from the percentage of “recovery” defendants would be entitled to as part of their fees (Mot. Exh. C). The retainer agreement goes on to state ” … our understanding is that…Robertson Stephens and FleetBoston have indicated you will be paid the items listed in A through I above. In the event Robertson Stephens and/or FleetBoston contend, however that you are not entitled to any of the items listed in A through I above, then such contested items will be included within the term “recovery” for the purposes of the above percentages”(Mot. Exh. C). Plaintiff also claims he provided the Separation Agreement and release to the defendants, before he signed the retainer agreement, to show that they were aware his Deferred Compensation was guaranteed, as long as he complied with the requirements of section 8.1 of the CEP (Barr Aff. in Opp., Exh. D). ”
“Plaintiff correctly argues that the “litigation privilege” protects lawyers from claims of defamation and that the defendants have conflated “disparagement” as relevant to the provisions of CEP section 8.1, with “defamation.” Plaintiff has raised an issue of fact as to whether defendants acted negligently in making statements to the press in reliance on the “litigation privilege.” There remains issues of fact as to whether defendants’ erroneously relied on the “litigation privilege” and whether their actions were a reasonable pre-emptive measure to avoid anticipated negative publicity of their clients.”
“The conflicting facts presented warrant a determination at trial as to whether the defendants
act of filing for arbitration on December 11, 2002 was reasonable, warranting denial of plaintiff’s
cross-motion for summary judgment (See Ansah v. A.W.I. Sec. & Investigation, Inc., 129 A.O. 3d
538, 12 N.Y.S. 3d 35 [1st Dept., 2015], 180 Ludlow Development LLC v. Olshan Frome Wolosky LLP, 165 A.O. 3d 594, supra and Genesis Merchant Partners, LP. v. Gilbride, Tusa, Last & Spellane, LLC 157 A.O. 3d 479, supra).
Accordingly, it is ORDERED that defendants’ LIDDLE & ROBERTSON, L.L.P. and JEFFREY
L. LIDDLE’s motion pursuant to CPLR §3212 for summary judgment dismissing plaintiff’s
complaint, is denied, and it is further,
ORDERED that plaintiff’s cross-motion pursuant to CPLR §3212 for summary judgment on
the complaint and for an award of damages against the defendants, LIDDLE & ROBERTSON, L.L.P.
and JEFFREY L. LIDDLE, in the amount of $1,299,999.84 with interest, is denied. “