Client is misdiagnosed with breast cancer.  Typically the misdiagnosis is that the doctor missed the cancer.  Here it was the opposite.  The doctor is alleged to have found a false positive diagnosis.  Ms. Kremen underwent unnecessary bilateral mastectomy.  There was no cancer.

She hired the Benedict Morelli firm to sue.  The case was eventually dismissed on the statute of limitations.  A bankruptcy intervened.  The legal complications multiplied.  A legal malpractice case against the Morelli firm was dismissed.  Then, in what was viewed by Supreme Court as just too much, the Morelli firm sued plaintiff for its disbursements.  Justice Goodman sanctioned the Morelli firm.  Now, on appeal, the sanctions have been vacated.

Kremen v Benedict P. Morelli & Assoc., P.C.  ;2011 NY Slip Op 00405 ;Decided on January 25, 2011 ;Appellate Division, First Department
 

"The parties have been to this court before. First, we dismissed as untimely a medical malpractice action in which defendant law firm represented plaintiffs (Kremen v Brower, 16 AD3d 156 [2005], lv denied 5 NY3d 705 [2005]). Then, we dismissed this action in which plaintiffs sued defendants for legal malpractice arising out of the medical malpractice action as against the Morelli Ratner defendants (54 AD3d 596 [2008]).

After we dismissed plaintiffs’ legal malpractice claim, defendant law firm moved in the motion court to restore its counterclaims for reimbursement of litigation expenses. Defendant had advanced these funds to plaintiff in the medical malpractice action. Defendant reasoned that because neither we nor the motion court had addressed these counterclaims, it was error for the motion court to mark the entire case "disposed." In an order dated February 29, 2009 and entered August 3, 2009, the motion court denied defendant’s motion because defendant had not submitted any evidence that plaintiffs had agreed to be personally liable for the expenses.

Defendant argued that the terms of the retainer agreement required plaintiffs to repay all disbursements when plaintiffs used a different law firm to appeal the dismissal of the medical malpractice action.

In an order entered October 8, 2009, the motion court denied defendant’s motion to renew and reargue. It rejected defendant’s argument that plaintiffs had replaced defendant with another firm, because, although another firm took the appeal, defendant was never replaced in the underlying medical malpractice action. Finding defendant’s argument "nonsensical and frivolous," the motion court also declared its intention to impose sanctions. The court gave defendants the opportunity to submit a memorandum in opposition, of which defendant availed itself. On January 25, 2010, the motion court found that defendant had violated Uniform Rules for Trial Courts (22NYCRR) § 130-1.1, and imposed a sanction of $6,000 payable to the Lawyers’ Fund for Client Protection of the State of New York. Defendant appealed only from the January 25, 2010 order imposing sanctions. We now reverse. "