Sometimes a court’s decision will simply tell how the case came out.  Sometimes a decision can teach a lesson; in this case one decision teaches several lessons in Legal Malpractice.  KIRK , -against-  HEPPT,   05 Civ. 9977;UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 80989;September 1, 2009, Decided
by Judge Sweet is one such case. We will look at this case today and tomorrow.

"The Kirks, pro se, filed their complaint against Heppt, Kirk’s former attorney, on November 28, 2005, alleging claims for, inter alia, breach of contract, fraudulent misrepresentation, and breach of fiduciary duty arising out of Heppt’s representation of Kirk in an action brought by Kirk against his former employer. On October 2, 2003, Kirk filed suit against Schindler in New York State Supreme Court, New York County, asserting causes of action for breach of contract and defamation and seeking a declaratory judgment that Kirk had been constructively discharged by Schindler.

In November 2003, Schindler removed the state court action to federal court on the ground that Kirk’s breach of contract claim was preempted by ERISA. At the time, Heppt believed that proceeding in federal court offered certain advantages, namely that the fast pace of litigation there would make it more likely [*9] that Schindler would enter into settlement negotiations."

Issue:  May an attorney hire a contract attorney to work on the case, and bill rates for that contract attorney in excess of the contract attorneys pay?

In January 2004, Heppt hired a contract attorney, Elizabeth Hill ("Hill"), to assist him with Kirk’s case. Hill’s time was listed on Heppt’s invoices beginning with an invoice dated January 31, 2004, identifiable by the use of her initials in the "lawyer" column. According to the Kirks, they did not know that Heppt had been charging them for Hill’s time beginning [*15] in January and dispute that Hill’s time was readily identifiable. According to the Kirks, Heppt did not obtain their consent to Hill’s participation until three months after she began working on the case. The Kirks further allege that they never formally agreed to pay Heppt for Hill’s services.According to the Kirks, Heppt "grossly overcharged" them for Hill’s work and charged for work performed by Hill for which she was not paid by Heppt."
"The Kirks make the following allegations with respect to their breach of fiduciary duty cause of action: 1) Heppt’s hiring of Hill was unauthorized and resulted in inflated fees; 2) the sole purpose of the April 2004 remand motion was to increase fees; 3) Heppt produced incomplete responses to Schindler’s summary judgment motion; and 4) Heppt failed to advise Kirk about the limited value of his defamation claim."
 

"Assuming that such conduct on the part of Heppt constituted a breach of his fiduciary duty, the Kirks have not satisfied their burden in pointing to any injuries suffered as a result of such a breach. Beginning in January 2004, Heppt’s invoices listed Hill’s time and gave a detailed description of the work that she was performing. Kirk then met Hill at Heppt’s offices in March 2004, at which time Heppt informed Kirk that he wanted Hill to assist on the case, and Kirk asked Heppt about Hill’s billable rate. The Kirks never questioned or objected to Hill’s participation, either when they received the invoices in January or when they met Hill in March 2004."