ITHACA:     There are two rules on how to divide contingent attorney fees.  One rule applies when the dispute is between the client and the attorney,and a second rule, which is itself more complex, applies when the dispute is between two attorneys.  Here in Wiggins v Kopko  2013 NY Slip Op 02312 [105 AD3d 1132]   April 4, 2013  Appellate Division, Third Department we the full panoply of human interaction…attorneys meeting each other, liking eachother and then falling out of love.

"In October 2004, a client retained the law firm of Wiggins & Masson, LLP, in which plaintiff was a partner, to represent him in a legal malpractice action on a contingency fee basis. Plaintiff thereafter retained defendant Edward E. Kopko to work on this action. Kopko became the attorney with primary responsibility for the action, and eventually entered into a partnership agreement with plaintiff, forming defendant Wiggins & Kopko, LLP (hereinafter referred to as the partnership).[FN1] Disagreements later arose and, in May 2010, plaintiff commenced this action seeking a judgment dissolving the partnership and compelling Kopko to pay certain legal fees.

Upon learning that Kopko had drafted a letter to the client advising him of the partnership’s dissolution and soliciting him as a personal client, plaintiff telephoned the client, [*2]discussed the deteriorating relationship between himself and Kopko and warned the client that fee issues might result if he signed a retainer agreement with Kopko. Angered by this call, the client wrote a letter stating that he was discharging plaintiff and the partnership and retaining Kopko, followed—apparently after consultation with Kopko—by a second letter stating that he had discharged plaintiff, the partnership and Wiggins & Masson "for cause." Plaintiff thereafter executed a consent to withdraw himself, the partnership and Wiggins & Masson from the malpractice action and to substitute Kopko. The action was later tried before a jury, resulting in a substantial award."

"We therefore agree with Supreme Court that plaintiff is entitled to share in the fee obtained in the malpractice action on the partnership’s behalf. However, we disagree with the further conclusion that the amount should be determined on the basis of quantum meruit. As against a client, a discharged attorney is entitled to a fee determined on a quantum meruit basis at the time of discharge, but different rules apply where, as here, the fee dispute is between attorneys (see Lai Ling Cheng v Modansky Leasing Co., 73 NY2d 454, 457-458 [1989]). In such circumstances, an outgoing attorney may choose to receive immediate compensation on a quantum meruit basis at discharge or to receive a share of a contingent fee based on a proportionate share of the work he or she performed; if no such election is made at the time of discharge, the attorney is presumed to have elected a contingent fee (see Matter of Cohen v Grainger, Tesoriero & Bell, 81 NY2d 655, 658-660 [1993]; Matter of Benjamin E. Setareh, P.C. v Cammarasana & Bilello Esqs., 35 AD3d 600, 601 [2006]; Connelly v Motor Veh. Acc. Indem. Corp., 292 AD2d 332, 333 [2002]; see also Buchta v Union-Endicott Cent. School Dist., 296 AD2d 688, 689 [2002]). Here, Supreme Court found that plaintiff elected quantum meruit compensation in a July 2011 memorandum of law. Even assuming that an election could be made in this manner, it would have been untimely, as the discharge had occurred more than a year earlier. Nothing in the record reveals that an election as to payment of fees was made at or near the time of discharge. Accordingly, as counsel of record, the partnership is presumed to have elected a contingent fee computed according to the proportionate share of work that was performed on its behalf and that of its predecessor firms before the June 2010 substitution of Kopko, to be divided as appropriate between the partners (see Grant v Heit, 10 AD3d 539, 540 [2004], lv denied 4 NY3d 701 [2004]).

Finally, we reject Kopko’s contention that plaintiff and the partnership waived a fee by failing to petition the court for a lien pursuant to Judiciary Law § 475. Such a lien attaches by operation of law for the attorney of record when an action is commenced, even if that attorney is no longer counsel of record upon the action’s conclusion (see Klein v Eubank, 87 NY2d 459, 462-463 [1996]; Matter of Cohen v Grainger, Tesoriero & Bell, 81 NY2d at 657-658). An outgoing attorney’s failure to seek statutory enforcement does not defeat his or her entitlement to [*4]a fee (see Lai Ling Cheng v Modansky Leasing Co., 73 NY2d at 458-459; Ruta & Soulios, LLP v Litman & Litman, P.C., 27 AD3d 236, 236 [2006])."

The Appellate Division looked over a Supreme Court decision dismissing a legal malpractice case.  The case alleged that the estate attorneys advised the executor to pay the estate taxes from decedent’s estate rather than using an alternative method which would have saved plaintiff a specific amount of tax.  In Estate of Feder v Winne, Banta, Hetherington, Basralian & Kahn, P.C.
2014 NY Slip Op 03593  Decided on May 15, 2014 Appellate Division, First Department wrote:

"The motion court properly dismissed the legal malpractice claim. Plaintiff, the wife of decedent, failed to adequately allege that defendant acted negligently in advising her to pay the estate tax out of decedent’s estate, rather than making a qualified terminable interest property (QTIP) election (see IRC § 2056[b][7]). Such a QTIP election would have deferred payment of any estate taxes until plaintiff’s death, at which time they would be paid out of her estate. Defendant explained that while a QTIP election might have resulted in an immediate tax savings during plaintiff’s lifetime, it could have left significantly less to the residuary beneficiaries of decedent’s estate. Defendant’s legal obligation was to the estate, not to plaintiff. Thus, as the motion court concluded, defendant selected one among several reasonable courses of action (see Rosner v Paley, 65 NY2d 736, 738 [1985]; Rodriguez v Lipsig, Shapey, Manus & Moverman, P.C., 81 AD3d 551, 552 [1st Dept 2011]). Indeed, another firm with whom plaintiff consulted stated that defendant’s analysis was correct. To the extent plaintiff argues that defendant failed to consider other alternatives, such as gifts or other trusts, those options would have contradicted the decedent’s apparent testamentary intent to retain control and distribute the remainder of his assets to his children upon plaintiff’s death.

The court also correctly concluded that plaintiff failed to adequately allege that defendant’s conduct proximately caused any ascertainable damages. Plaintiff’s damages claim was based largely on speculation that the estate tax payment could have been avoided in the future, which, as plaintiff itself acknowledged in her motion papers, depended on too many [*2]uncertainties, including future tax laws, tax rates, and the future value of the trust property (see e.g. Brooks v Lewin, 21 AD3d 731, 734-735 [1st Dept 2005], lv denied 6 NY3d 713 [2006]).

"

There are several views of the legal malpractice world.  One (the most cynical) is that all legal malpractice cases are reflexive attempts to get out of paying attorney fees.  A second view is that legal malpractice is venomous hindsight and unfair to the hard working attorney.  A third view is that legal malpractice is a discipline arising from the thoughtful analysis of reasonable attorney conduct. 

Whatever your view, this attorney is extraordinary, and not in a good way.  Matter of Novins
2014 NY Slip Op 03465 Decided on May 13, 2014 Appellate Division, First Department Per Curiam.  Not only did Mr. Novins completely lack any sense of loyalty, he was awfully clumsy at the same time.

"In February 2006, respondent was hired by Ginarte O’Dwyer Gonzalez Gallardo & Winograd LLP (the Ginarte firm), where he was assigned to work on Bernardini v City of New York and Angel Villirrini [sic], a personal injury action filed in June 1994. While off duty, Bernardini, a New York City police officer, had been shot and wounded in a bar by Villarini, another off-duty police officer. Although the Ginarte firm served the City with the summons and complaint, it never served Villarini.

In March 2007, the City was granted summary judgment in the personal injury action on the ground that the City had not negligently supervised Villarini because it did not have notice of his dangerous propensities. This Court affirmed (45 AD3d 466, 466 [1st Dept 2007], lv denied 10 NY3d 702 [2008]).

On January 12, 2008, while the motion for leave to appeal to the Court of Appeals was pending, respondent and Bernardini met in a restaurant and signed a "Personal Services Agreement" (the Agreement) under which Bernardini agreed to "give" respondent 45% of any net recovery he received relating to the Villarini incident. This included the personal injury action and a legal malpractice claim to be brought against the Ginarte firm "for negligently failing to timely serve … Villarini, …, for neglecting to work on [the] case over the many years, for failing to take the deposition of …Villarini, for having failed to obtain a copy of … Villarini’s …. Personnel File in a timely manner and for failing to bring a Motion …, for spoliation of this key evidence." Although the Agreement, which respondent drafted, did not specify the services that he was to provide, respondent acknowledges that he agreed to serve as a witness for Bernardini in the malpractice action against his employer.

In May 2008, Bernardini commenced a malpractice action against the Ginarte firm and its principals. Between February and March 2009, respondent left a series of voice-mail messages for Bernardini, asking Bernardini to call him back. On April 28, 2009, respondent left Bernardini a message in which he referred to risking his neck by putting certain notes back into the personal injury action file which Bernardini would need for the malpractice action. In May 2009, respondent left a message stating that he would be leaving the Ginarte firm in 30 days and would be able to prove the malpractice and coverup. On May 28, 2009, respondent left a message [*3]complaining that he had called Bernardini about 30 times but received only one call back a few weeks earlier. Falsely stating that he had given up his job, respondent also said that he considered the Agreement to be in full force and effect and threatened to throw out all the evidence in his possession unless Bernardini called him back. Ten minutes later, respondent left another message stating he would take appropriate recourse to enforce the Agreement as soon as he left his firm.

In April or May 2010, during the course of discovery, the Ginarte firm learned of respondent’s secret side agreement with Bernardini, but did not fire him. On or about August 17, 2010, the firm learned of the messages respondent had left on Bernardini’s voice mail. On August 20, 2010, respondent was deposed in the malpractice action, at which time he retreated from his prior accusations of malpractice against the Ginarte firm. On or about August 26, 2010, Bernardini filed a disciplinary complaint against respondent. On or about August 31, 2010, the Ginarte firm fired respondent, and on September 7, 2010 they filed a disciplinary complaint against him.

Result?    " Accordingly, the Committee’s motion should be granted, the Hearing Panel’s findings of fact and conclusions of law sustaining charges one through four and six confirmed, and respondent suspended from the practice of law for a period of one year and until further order of this Court. "

Rochester:   Pro se claims in general are regarded with skepticism, and even more so in legal malpractice. The Bar (and judiciary’s) take on legal malpractice cases in general is that they are reflex "dissatisfaction" cases, and are often meritless.  This applies with greater force to pro se cases, where the general thought is that plaintiff could not attract an attorney to prosecute the matter.  In Seubert v Marchioni  2013 NY Slip Op 08761 [112 AD3d 1370]  December 27, 2013
Appellate Division, Fourth Department  the Fourth Department takes a sly swipe at plaintiff.

"Memorandum: Plaintiffs commenced this legal malpractice action seeking damages based on defendants’ representation of them in their purchase of a membership interest in a limited liability company. Defendants moved for summary judgment dismissing the complaint, and Supreme Court granted the motion. We affirm. In order to establish their entitlement to judgment as a matter of law, defendants had to present evidence in admissible form establishing that plaintiffs are "unable to prove at least one necessary element of the legal malpractice action" (Giardina v Lippes, 77 AD3d 1290, 1291 [2010], lv denied 16 NY3d 702 [2011]; see Ginther v Rosenhoch, 57 AD3d 1414, 1414-1415 [2008], lv denied 12 NY3d 707 [2009]), e.g., " ‘that the defendant attorney failed to exercise that degree of care, skill, and diligence commonly possessed by a member of the legal community’ " (Phillips v Moran & Kufta, P.C., 53 AD3d 1044, 1044-1045 [2008]; see generally McCoy v Feinman, 99 NY2d 295, 301 [2002]; Williams v Kublick, 302 AD2d 961, 961 [2003]). Here, defendants met their initial burden on the motion with respect to that element (see generally Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). Inasmuch as plaintiffs did not submit expert testimony or, indeed, any opposition to defendants’ motion, they failed to raise an issue of fact concerning defendants’ compliance with the applicable standard of care (see Merlin Biomed Asset Mgt., LLC v Wolf Block Schorr & Solis-Cohen LLP, 23 AD3d 243, 243 [2005]; see also Zeller v Copps, 294 AD2d 683, 684-685 [2002]). Plaintiffs’ remaining contentions are raised for the first time on appeal and thus are not properly before us (see Ciesinski v Town of Aurora, 202 AD2d 984, 985 [1994]). Present—Smith, J.P., Fahey, Lindley, Valentino and Whalen, JJ.

Buffalo and Rochester:  When Plaintiff settles the underlying action, or fails to take an appeal on a dismissal, may he still commence a legal malpractice case?  In Grace v Law  2013 NY Slip Op 05383 [108 AD3d 1173]  July 19, 2013  Appellate Division, Fourth Department

"We reject defendants’ invitation to extend the ruling in Rupert to a per se rule that a party who voluntarily discontinues an underlying action and forgoes an appeal thereby abandons his or her right to pursue a claim for legal malpractice. Indeed, we noted in Rupert that, in determining that the court erred in granting the defendants’ cross motion for summary judgment dismissing the complaint in the context of a prior appeal (Rupert v Gates & Adams, P.C., 48 AD3d 1221 [2008]), we "necessarily rejected the very premise upon which the court denied the instant motion for summary judgment," i.e., that "this legal malpractice action is barred by [the] plaintiff’s failure to perfect an appeal from the judgment in the matrimonial action" (83 AD3d at 1395).

Although the precise question presented herein appears to be an issue of first impression in New York, we note that several of our sister states have rejected the per se rule advanced by defendants herein (see e.g. MB Indus., LLC v CNA Ins. Co., 74 So 3d 1173, 1176 [2011]; Hewitt v Allen, 118 Nev 216, 217-218, 43 P3d 345, 345-346 [2002]; Eastman v Flor-Ohio, Ltd., 744 So 2d 499, 502-504 [1999]; Segall v Segall, 632 So 2d 76, 78 [1993]). As has been noted, such a rule would force parties to prosecute potentially meritless appeals to their judicial conclusion in order to preserve their right to commence a malpractice action, thereby increasing the costs of litigation and overburdening the court system (see Eastman, 744 So 2d at 504). The additional time spent to pursue an unlikely appellate remedy could also result in expiration of the statute of limitations on the legal malpractice claim (see MB Indus., 74 So 3d at 1181). Further, requiring parties to exhaust the appellate process prior to commencing a legal malpractice action would discourage settlements and potentially conflict with an injured party’s duty to mitigate damages (see Crestwood Cove Apts. Bus. Trust v Turner, 164 P3d 1247, 1254 [2007]; Eastman, 744 So 2d at 504).

Cooperstown, NY:  Plaintiff wanted to sell his construction company, and was very involved in the transaction.  In retrospect, the Appellate Division, Third Department found that he was too involved to merely blame his attorney for the bad outcome. Hattem v Smith    2013 NY Slip Op 07791 [111 AD3d 1107]  November 21, 2013  Appellate Division, Third Department tells its story, and then slips in a twist.  Follow for the "a-ha" moment.

"In 2003, plaintiff retained defendant Robert J. Smith, an attorney with defendant Coughlin & Gerhart, LLP, to represent him in the sale of his business, JMF Associates, Inc., to O’Connor and Shew Construction, Inc. (hereinafter OSC). The sale documents included a stock purchase agreement by which the shares in JMF would be conveyed to OSC for a down payment and a balance paid pursuant to a promissory note guaranteed by OSC’s two individual owners. The note was backed by a security agreement naming plaintiff as the secured party and JMF as the debtor, and covering all of JMF’s assets, including vehicles and construction equipment. In September 2004, Smith sent the proposed sale documents to OSC’s attorney; that attorney forwarded the documents to one of OSC’s owners and asked that individual to have all parties—including plaintiff—sign the documents and thereafter return them to him. The OSC owners met plaintiff at a branch of NBT Bank, where the documents were fully executed and notarized. Immediately thereafter and without the knowledge of either attorney, OSC obtained a loan from NBT that was secured by the assets of OSC and JMF and consisted of funds sufficient to cover the down payment, bank fees and a line of credit. On October 5, 2004, NBT perfected its [*2]security interest by filing a UCC-1 financing statement (hereinafter a UCC-1). Neither Smith nor OSC’s attorney learned about this UCC-1 or the underlying loan from NBT until several years later.

Following these transactions, OSC’s owners returned the executed sale documents to OSC’s attorney, who sent them to Smith on October 25, 2004. Smith prepared but never filed a UCC-1 securing plaintiff’s security interest in the construction equipment, and did not prepare or file Department of Motor Vehicle (hereinafter DMV) liens securing plaintiff’s interest in the vehicles (see Vehicle and Traffic Law § 2118). In 2006 and 2007, the Internal Revenue Service filed federal tax liens against JMF, now owned by OSC. OSC’s owners stopped making payments upon plaintiff’s promissory note and, in 2007, filed for bankruptcy. When plaintiff attempted to repossess the vehicles and equipment pursuant to the security agreement, he discovered that his first-priority security interest had not been protected. Thereafter, NBT sold its security interest to a third party and, in October 2011, by a default order and judgment in a civil action prosecuted by the third party against plaintiff and other defendants, Supreme Court awarded possession of all assets, inventory and other property of JMF and OSC to this third party.

We agree with defendants’ contention that Supreme Court erred in refusing to charge the jury regarding plaintiff’s comparative fault. The culpable conduct of a plaintiff client may be asserted as an affirmative defense in a legal malpractice action in mitigation of damages (see CPLR 1411, 1412; Schaeffer v Lipton, 243 AD2d 969, 971 [1997]; Caiati v Kimel Funding Corp., 154 AD2d 639, 639-640 [1989]; see also Shapiro v Butler, 273 AD2d 657, 658 [2000]). Here, the evidence was sufficient to support a finding that plaintiff could reasonably have been expected to understand the underlying obligations and formalities (compare Cicorelli v Capobianco, 90 AD2d 524, 524 [1982], affd 59 NY2d 626 [1983]). Plaintiff was experienced in commercial transactions, including secured loans, understood that loans such as the one from NBT to OSC generally require collateral, and testified that his purpose in retaining Smith was to protect his security interest in the vehicles and equipment. He acknowledged that none of the discussions among the parties and their counsel leading up to the execution of the sale documents had included any mention of outside loans to OSC, and that he introduced OSC’s owners to the NBT officer who later approved the loan.

Plaintiff’s testimony as to his purpose in making this introduction and his personal knowledge regarding the owners’ intention to obtain financing for the purchase of JMF was contradictory and inconsistent. The loan officer testified that plaintiff introduced OSC’s owners to him for this specific purpose, and one of the owners testified that their plan to obtain a loan was discussed with plaintiff before the sale documents were signed; both the owner and the loan officer testified that plaintiff was present during transactions pertaining to the loan. Plaintiff never advised Smith that he had signed the sale documents, nor did he contact Smith after engaging in these transactions. As this evidence provided "a valid line of reasoning and permissible inferences from which rational people can draw a conclusion of negligence," the [*3]question of plaintiff’s comparative fault should have been submitted to the jury (Bruni v City of New York, 2 NY3d 319, 328 [2004]; see Gotoy v City of New York, 94 NY2d 812, 814 [1999]; Klingle v Versatile Corp., 199 AD2d 881, 882 [1993]). Accordingly, the matter must be remitted for a new trial."

White Plains:  We’ve often identified ways in which legal malpractice is not like other litigation.  One such area is the successor attorney problem.  In legal malpractice, if attorney 1 makes a mistake, and the client then fires attorney 1 and hires attorney 2, then attorney one is basically off the hook if there is time for attorney 2 to clean up the mess.  In a chain personal injury tort, (think a car accident followed by med mal), the first tortfeasor is responsible for all subsequent forseeable torts.

Anisman v Nissman  2014 NY Slip Op 03218  Decided on May 7, 2014  Appellate Division, Second Department is an example.  Here, the court found that there was insufficient time, but the principal still stands.

"In an action to recover damages for legal malpractice, the defendant Peter N. Nissman appeals from an order of the Supreme Court, Westchester County (O. Bellantoni, J.), entered January 16, 2013, which denied his motion for summary judgment dismissing the amended complaint insofar as asserted against him.

The Supreme Court properly denied Nissman’s motion for summary judgment dismissing the amended complaint insofar as asserted against him. Nissman failed to show, prima facie, that the plaintiff was unable to prove at least one of the essential elements of his legal malpractice cause of action (see Bells v Foster, 83 AD3d at 877; Mueller v Fruchter, 71 AD3d at 651; Pedro v Walker, 46 AD3d 789, 790). Contrary to Nissman’s contention, he did not establish that successor counsel had a sufficient opportunity to protect the plaintiff’s rights such that Nissman’s conduct could not have proximately caused the plaintiff’s alleged damages (see Gelobter v Fox, 90 AD3d 829, 832). Nissman’s failure to make such a showing required denial of the motion, [*2]regardless of the sufficiency of the opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853). "
 

Albany:  Even when plaintiff points out a mistake that an attorney "unfamiliar with the Board’s apportionment doctrine" made  at the Workers’ Compensation hearing his argument that the Board would have found differently was "too speculative."  Result?  Case dismissed.

"Plaintiff received workers’ compensation benefits as a result of a strained hip he sustained in the course of his employment. When his long-standing orthopedic surgeon, who had previously diagnosed him with osteoarthiritis of the hip, concluded that the work-related injury was fully resolved and any remaining symptoms were solely related to the preexisting condition, the State Insurance Fund (hereinafter SIF) requested that his benefits be suspended. Plaintiff then retained defendant to represent him and, on defendant’s advice, plaintiff went to see another orthopedic surgeon, who attributed 50% of plaintiff’s disability to the work-related injury. At a conciliation hearing, defendant negotiated a settlement with a representative from SIF whereby plaintiff agreed to benefits based upon a temporary, marked disability apportioned 50% to the work-related injury.

Even assuming that defendant was negligent because he was unfamiliar with the Board’s apportionment doctrine (see e.g. Matter of Nye v IBM Corp., 2 AD3d 1164, 1164 [2003]; Matter of Krebs v Town of Ithaca, 293 AD2d 883, 883-884 [2002], lv denied 100 NY2d 501 [2003]), he could nevertheless succeed on his motion for summary judgment by demonstrating that his negligence was not a proximate cause of any actual and ascertainable damages to plaintiff (see Geraci v Munnelly, 85 AD3d 1361, 1362 [2011]; Bixby v Somerville, 62 AD3d 1137, 1139 [2009]; Tabner v Drake, 9 AD3d 606, 609 [2004]). In the context of the compromise reached in settlement of plaintiff’s workers’ compensation claim, a legal malpractice cause of action would be viable " ‘if it is alleged that [the] settlement . . . was effectively compelled by the mistakes of counsel’ " (Tortura v Sullivan Papain Block McGrath & Cannavo, P.C., 21 AD3d 1082, 1083 [2005], lv denied 6 NY3d 701 [2005], quoting Bernstein v Oppenheim & Co., 160 AD2d 428, 430 [1990]; see Rau v Borenkoff, 262 AD2d 388, 389 [1999]).

Nor is there any evidence that defendant could have litigated a more favorable result for plaintiff (see Sevey v Friedlander, 83 AD3d 1226, 1227 [2011], lv denied 17 NY3d 707 [2011]; Mega Group, Inc. v Pechenik & Curro, P.C., 32 AD3d 584, 586-587 [2006]). In determining whether plaintiff was entitled to continued benefits, the Board would have been confronted with differing medical opinions and would have been free to credit the opinion that plaintiff was no longer disabled as a result of the work-related injury (see e.g. Matter of Altobelli v Allinger Temporary Servs., Inc., 70 AD3d 1083, 1084 [2010]; Matter of Moore v St. Peter’s Hosp., 18 AD3d 1001, 1002 [2005]). Had the Board accepted the opinion of plaintiff’s treating orthopedist, plaintiff would have been entitled only to a lump-sum payment for his work-related injury, and would not be receiving the continuing benefits provided by the settlement."