An attorney departs from good practice and an immigrant is jailed for a year.  The attorney is sued and (presumably) is not insured.  He gets a childhood friend to defend the legal malpractice case.  The childhood friend departs from good practice and the immigrant wins a large verdict.  Attorney cannot pay the judgment and files bankruptcy.  Bankruptcy is not discharged.  Can things get worse?  Yes.  In the end, no one wins and no one is compensated.

Borges v Placeres  2019 NY Slip Op 29221  Decided on July 18, 2019  Appellate Term, First Department is a tragedy all round.

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The underlying facts of this legal malpractice case are set forth in our prior decision (see Borges v Placeres, 43 Misc 3d 61 [App Term, 1st Dept 2014], affd 123 AD3d 611 [2014]). Briefly stated, plaintiff, a Venezuelan native, retained defendant Placeres, an attorney, in connection with an immigration matter. As a result of Placeres’ negligence (i.e., his departure from an attorney’s professional standard of care), the Immigration Court issued an in absentia deportation order against plaintiff, resulting in plaintiff spending 14 months in detention lockdown. The jury verdict finding that defendant committed malpractice, and awarding plaintiff damages in the amount of $1,249,121.37, inclusive of $900,000 for pain and suffering, was affirmed following two appeals.

It is not seriously disputed that, but for the error of Placeres’ litigation counsel, namely Jose Luis Torres and Brian Robinson, in failing to object to plaintiff’s pain and suffering evidence or the related jury charge and verdict sheet, Placeres might not have been liable for [*2]$900,000 in pain and suffering damages (see Borges v Placeres, 43 Misc 3d at 64).^[FN1] After the verdict, Placeres filed for bankruptcy, but he was ultimately denied a discharge because he “knowingly failed to disclose” his potential malpractice claim against his litigation counsel, for the errors resulting in the $900,000 pain and suffering award (In re Placeres, 578 BR 505, 523 [Bankr SD NY 2017]).

Plaintiff’s judgment against Placeres remains unsatisfied. As a means of enforcing the judgment, plaintiff moved, inter alia, for an order directing Placeres to turnover or assign to plaintiff the (unasserted) cause of action for legal malpractice that Placeres has against his litigation counsel. Placeres opposed the motion on various grounds. As the Bankruptcy Court explained, Placeres refused to assign the malpractice cause of action to plaintiff because his attorney of record, specifically, Jose Luis Torres, “was his friend since high school, he represented Placeres for free, Torres did not represent him at trial and he was not going to throw Torres ‘under the bus'” (In re Placeres, 578 BR at 523).”

“Plaintiff’s judgment against Placeres remains unsatisfied. As a means of enforcing the judgment, plaintiff moved, inter alia, for an order directing Placeres to turnover or assign to plaintiff the (unasserted) cause of action for legal malpractice that Placeres has against his litigation counsel. Placeres opposed the motion on various grounds. As the Bankruptcy Court explained, Placeres refused to assign the malpractice cause of action to plaintiff because his attorney of record, specifically, Jose Luis Torres, “was his friend since high school, he represented Placeres for free, Torres did not represent him at trial and he was not going to throw Torres ‘under the bus'” (In re Placeres, 578 BR at 523).

Civil Court granted plaintiff’s motion to the extent that “any and all rights to any prospective cause of action arising from the professional negligence and/or legal malpractice of defendant’s attorneys in the scope of their representation in this action is hereby immediately assigned to plaintiff…” (Borges v Placeres, 60 Misc 3d 1033, 1043 [Civ Ct, NY County 2018]). With respect to Placeres’ argument that the assignment is barred by judicial estoppel, the court held that the only issue before it is the assignability, not vitality, of the potential malpractice cause of action, and that any judicial estoppel defense could be asserted in the ensuing litigation.

Defendant appeals, and we now reverse. In the particular facts of this case, we conclude that plaintiff is judicially estopped from pursuing any assigned legal malpractice cause of action that Placeres has against his litigation counsel.

The doctrine of judicial estoppel “prevents a party who assumed a certain position in a prior proceeding and secured a ruling in his or her favor from advancing a contrary position in another action, simply because his or her interests have changed” (Becerril v City of NY Dept. of Health & Mental Hygiene, 110 AD3d 517, 519 [2013], lv denied 23 NY3d 905 [2014]; see Herman v 36 Gramercy Park Realty Assoc., LLC, 165 AD3d 405, 406 [2018], lv denied __ NY3d __, 2019 NY Slip Op 72363 [2019]). The doctrine rests upon the principle that a litigant should not be permitted to lead a court to find a fact one way and then contend in another judicial proceeding that the same fact should be found otherwise (see Leonia Bank v Kouri, 3 AD3d 213, 219 [2004]).”