We wrote about the Pryor Cashman legal malpractice case last week. Here is the NY Law Journal’s take on it:

"A legal malpractice lawsuit filed by the trustees to a union’s benefit funds against Pryor Cashman for failing to provide advice that would have prevented the funds’ third-party administrator from embezzling $42 million may go forward, a unanimous Appellate Division, First Department, panel ruled Thursday.

The trustees for the three Construction Workers Local 147 filed the lawsuit, Fitzsimmons v. Pryor Cashman, 651360/10, last year (NYLJ, Aug. 30, 2010). It followed the December 2009 arrest of Melissa G. King on federal charges of embezzling millions from the funds as the principal behind administrator King Care LLC.

Pryor Cashman had advised the trustees and benefit funds for more than a decade. The trustees claim the law firm should have realized administrative expenses for the funds were "unusually high" and encouraged the trustees to ask why, the complaint said. Pryor Cashman also should have recommended hiring an independent auditor, the complaint said.

Pryor Cashman moved to dismiss, arguing that the trustees had not brought specific allegations of the firm failing to fulfill its duties. Manhattan Supreme Court Justice Barbara R. Kapnick (See Profile) denied the motion in March, and the First Department affirmed. "Plaintiff put forth sufficient detail to establish the negligence of the attorneys, that the negligence was the proximate cause of the losses sustained by the benefits funds, and actual damages to those funds," the panel said. "Plaintiffs were not required to allege the specific scope of defendants’ duties, given the absence of a governing retainer agreement."