A shockingly large number of educational institutions in New York and all over the country are now facing their history of teacher-student sexual abuse.  Horace Mann, Brown & Nichols, Poly Prep.  Each have had their past investigated, and in many instances come up short. 

What of the law firms that represented these schools?  Are they responsible for wrongful acts, especially in the nature of deceit?  If they forcefully defended the schools, can they now be held to have violated Judiciary Law 487?

In Zimmerman v. O’Melveny & Myers, LLP we see the competing arguments.  As reported in today’s New York Law Journal, by Andrew Keshner  " O’Melveny & Myers, fighting to dismiss a state suit brought by alumni of an elite Brooklyn prep school that was represented by the firm in a prior federal action, said the alumni cannot sue the firm with "previously abandoned" claims of purported deception on the courts.

In December, 10 Poly Prep Country Day School alumni and two former summer camp participants settled a closely-watched Eastern District lawsuit stemming from alleged decades of abuse by the school’s football coach, Philip Foglietta, now deceased, and the school’s concealment of the actions.

Less than a year after the confidential settlement, many of the same plaintiffs sued O’Melveny and Jeffrey Kohn, the New York managing partner, in Manhattan Supreme Court. Pointing to state Judiciary Law §487—which forbids attorneys’ "deceit or collusion, with intent to deceive the court or any party"—the alumni said the defendants should be held accountable for "their grievous and oft-repeated falsehoods" when defending the school in the federal suit (NYLJ, Aug. 15)."

""After settling an earlier federal court litigation on confidential terms, Plaintiffs are now seeking more money by bringing a new action in which they repeat spurious allegations that the defense lawyers made ‘misrepresentations’ in the earlier action. Plaintiffs made—and then voluntarily abandoned—the identical allegations in the earlier federal proceedings. Plaintiffs’ improper attempt to revive in a new action the allegations they previously abandoned fails as a matter of law for several reasons," O’Melveny said in Zimmerman v. Kohn, 652826/2013."

We often wonder whether legal malpractice cases are subject to a higher form of scrutiny, although it may also be true that mistakes are more often made by attorneys in their worst (underlying) cases.  In any event sometimes a legal malpractice case goes to the jury on the real question of whether plaintiff could have prevailed in the underlying case (the "but for" issue) and sometimes the legal malpractice case is ended at the motion stage. Here is one that was ended early.

Magidson v Badash ; 2012 NY Slip Op 00935 ;  Appellate Division, Second Department is a legal malpractice case in which the underlying matter remains undescribed. The legal malpractice suffered from infirmities in the underlying case, and failed the "but for" problem.
 

"The complaint failed to state a cause of action to recover damages for legal malpractice because the plaintiff neglected to plead that she would have prevailed in the underlying action, commenced in the Supreme Court, New York County, but for the defendants’ alleged malpractice in failing to file certain motions and appeal from certain orders issued in that action (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442; Kuzmin v Nevsky, 74 AD3d 896, 898; see also Weiner v Hershman & Leicher, 248 AD2d 193).

Moreover, the Supreme Court providently exercised its discretion in denying the plaintiff’s cross motion for leave to amend the complaint, as the proposed amendment was patently devoid of merit. The Appellate Division, First Department, concluded that the complaint in the underlying action was properly dismissed because the plaintiff commenced that action after the applicable statute of limitations had expired (see Magidson v Otterman, 57 AD3d 264, 264), and the proposed amendment, which did not include allegations that the defendants committed malpractice by failing to timely commence the underlying action, would not alter that result (see Matter of New York County DES Litig., 89 NY2d 506, 514; Byrd v Manor, 82 AD3d 813, 815).

Two mega law firms work together to present the case of an attorney against his former partnership. The arbitration goes badly, expert witnesses are precluded and the award is not good for plaintiff.  Shortly thereafter law firm 1 starts a legal malpractice action against law firm 2.  Needless to say, relations between them do not proceed smoothly.

Roberts v Corwin   2013 NY Slip Op 51637(U)   Decided on October 3, 2013   Supreme Court, New York County   Friedman, J. illustrates the fall-out after unsuccessful litigation. 
 

"Mr. Roberts retained Greenberg Traurig to represent him in an arbitration against the firm he founded, Roberts & Finger, LLP. The arbitration panel issued an adverse interim award on May 11, 2006, finding that Mr. Roberts "failed to establish a prima facie case [*2]that he has suffered any damage as a result of the manner in which the dissolution of Rogers & Finger LLP was carried out." (Interim Award, ¶ 10.) The panel’s determination was based in pertinent part on Mr. Roberts’ failure to present expert testimony as to the value of the law firm and its assets. (Id., ¶¶ 8, 9, 10.) Mr. Roberts retained Epstein Becker to serve as co-counsel to Greenberg Traurig in the arbitration in May 2006, after the panel’s issuance of the interim award. (May 2012 Decision at 19.) The panel issued an adverse final award on July 13, 2006, incorporating the interim award. (Final Award.) Mr. Roberts’ petition to vacate the unfavorable final award was denied by order of this Court (Moskowitz, J.), dated April 3, 2007. (Sept. 2012 Decision at 4.) Mr. Roberts ultimately reached a global settlement with Roberts & Finger in August 2007. (Sept. 2012 Decision at 24; Complaint, ¶ 55.)

Shortly after the issuance of the adverse interim award, and while Epstein Becker, through Mr. Cozier, was co-counseling with Greenberg Traurig to obtain relief from the award, Mr. Roberts consulted with John Sachs, also an attorney at Epstein Becker, regarding a possible malpractice action against Greenberg Traurig.[FN1] Although the parties dispute the date as of which Epstein Becker was retained for the malpractice action, it is undisputed that Mr. Roberts consulted with Mr. Sachs as early as May 2006, and that a formal demand was not served until October 2007.[FN2] This demand, made by letter dated October 18, 2007 (Sachs Aff., Ex. 1), asserted that the arbitrators precluded expert testimony on the valuation of Mr. Roberts’ partnership interest based on Greenberg Traurig’s failure to disclose that it would call an expert, and that such failure constituted malpractice. This malpractice action was filed on October 30, 2009, and was also based on Greenberg Traurig’s failure to disclose the expert witness.

Greenberg Traurig contends that Epstein Becker misused its position as co-counsel "to build a record against [Greenberg Traurig] to support a purported malpractice claim." (Ds.’ Memo. of Law in Support at 15.) In support, Greenberg Traurig cites Mr. Corwin’s testimony that he "disclosed to [Epstein Becker] and Cozier, without reservation of any kind, as I would to any of my own colleagues at [Greenberg Traurig], or to any other qualified lawyer selected by Roberts to be my co-counsel, all information that would be helpful to them in understanding the background of the case and, in particular, all aspects of the underlying arbitration." (Corwin Aff., ¶ 17.) "

"As previously noted, Epstein Becker’s simultaneous representation of Mr. Roberts for purposes of both mitigating damages in the arbitration proceeding and preparing for a possible malpractice action raises ethical concerns. (See May 14, 2012 Tr. at 25-26.) However, this case does not involve the egregious conduct in obtaining confidential information through deceptive means, or an inherent conflict of interest, which has been held to require the severe remedy of disqualification.

Greenberg Traurig also relies on alleged violations of the ethical rules governing attorney conduct (22 NYCRR 1200.0) to buttress its claim that Mr. Roberts’ complaint should be dismissed or Epstein Becker disqualified as his attorney. (Ds.’ Memo. in Support at 18-21.) Rule 4.3, which Greenberg Traurig cites, provides that a lawyer shall not "state or imply that the lawyer is disinterested" when communicating with a person who is not represented, or give legal [*4]advice to that person. Rule 8.4 (c) and its predecessor, Disciplinary Rule 1-102, also prohibit dishonest and deceitful conduct. The court credits Greenberg Traurig’s claim that Rule 4.3, which did not exist at the time of Epstein Becker’s alleged misconduct, is consistent with a lawyer’s " general obligation not to engage in conduct involving dishonesty, deceit, fraud, or misrepresentation.’" (Reply Memo. Of Law at 12 [quoting Roy D. Simon, Simon’s New York Rules of Professional Conduct Annotated at 850 [2012]].) The court finds, however, that Rule 4.3 is not applicable to the co-counseling relationship. Rule 8.4 (c) also is not implicated because this case does not involve the type of egregious conduct that has been held to warrant disqualification or sanctions. The court further rejects Greenberg Traurig’s claim that Epstein Becker violated Rule 3.1 (a) which provides that a lawyer shall not bring or defend a frivolous claim. Epstein Becker has not engaged in frivolous conduct by arguing in the arbitration proceeding that the panel should not have rejected Mr. Roberts’ damages evidence, while now arguing in this malpractice action that Greenberg Traurig committed malpractice by not noticing an expert on damages. "

In a decision about liability for negligent drug testing, Landon v Kroll Lab. Specialists, Inc.  2013 NY Slip Op 06597  Decided on October 10, 2013  Court of Appeals, Ch. J/   Lippman took time to restate the policy rationale for Dombrowski v. Bulson, 19 NY3d 347(2012).
 

In Landon, plaintiff "commenced this action alleging that Kroll had issued the report reflecting the positive test result both negligently and as part of a policy of deliberate indifference to his rights. The basis for his claim was that the screen test cutoff level employed by Kroll was substantially lower than that recommended by Orasure or by federal standards and that Kroll failed to disclose those differences in its report. As alleged in the complaint, the screen test cutoff level recommended by Orasure is 3.0 ng/ml and the level recommended by the United States Department of Health and Human Services Substance Abuse and Mental Health Services Administration (SAMHSA) is 4.0 ng/ml —- both of which are substantially lower than the 1 ng/ml used by Kroll. The complaint further stated that, despite applicable New York State [*3]Department of Health Laboratory Standards requiring samples to be subject to confirmatory testing through the use of gas chromatography-mass spectronomy, Landon’s sample was not subject to any type of confirmation test before defendant reported a positive result. In addition, the complaint alleged that proposed revisions to SAMHSA guidelines contemplated requiring the taking of a urine sample, contemporaneous with the oral fluid sample, in order to protect federal workers from inaccurate results. The complaint maintained that Kroll knew of, and failed to disclose, the potential for false positive THC readings when oral fluid samples were tested without a simultaneous urine sample. Moreover, plaintiff alleged that the VOP petition was the result of systemic negligence in Kroll’s substance abuse testing practices. He asserted that he was required to serve an extended term of probation, thereby suffering a loss of freedom, as well as emotional and psychological harm, and monetary loss in the form of attorneys’ fees expended in defense of the VOP petition."
 

Of interest in legal malpractice, Judge Lippman went on to explain why defendants were wrong to rely upon Dombrowski.  "Defendant places too much weight upon our recent decision in Dombrowski v Bulson (19 NY3d 347 [2012]), characterizing it as holding that loss of freedom damages are not recoverable in negligence actions. In that case, we found that a legal malpractice action did not lie against a criminal defense attorney to recover nonpecuniary damages. The decision was based in part on policy considerations, including the potentially devastating consequences such liability would have on the criminal justice system and, in particular, the possible deterrent effect it would have on the defense bar concerning the representation of indigent defendants (see Dombrowski, 19 NY3d at 352). Similar policy considerations do not weigh in defendant’s favor here. "
 

In Eighth Ave. Garage Corp. v Kaye Scholer LLP 2012 NY Slip Op 02402  Appellate Division, First Department Kaye Scholer defended itself, and obtained dismissal. Schwartz & Ponterio were unable to save the case for plaintiff.
 

The Court held that "Plaintiffs failed to allege facts in support of their claim of legal malpractice that "permit the inference that, but for defendants’ [alleged negligence], [they] would not have sustained actual, ascertainable damages" (Pyne v Block & Assoc., 305 AD2d 213 [2003]). Although they maintain that as a result of defendants’ negligence in failing to obtain an estoppel certificate from the landlord of the premises where the garage is located, they were unable to sell the subject parking garage, they failed to demonstrate that they would have sold the subject garage but for defendants’ alleged malpractice. In any event, plaintiffs are precluded by the doctrine of collateral estoppel from litigating the issue of whether the landlord’s failure to give them the certificate damaged them, as that issue was raised and decided against plaintiff Eighth Avenue Garage Corporation in a prior proceeding (Eighth Ave. Garage Corp. v H.K.L. Realty Corp., 60 AD3d 404 [2009], lv dismissed 12 NY3d 880 [2009]; see Hirsch v Fink, 89 AD3d 430 [2011]).

Supreme Court properly considered the evidence submitted on the motion, including the e-mails, which conclusively disposed of plaintiffs’ claims (see Pitcock v Kasowitz, Benson, Torres & Friedman LLP, 74 AD3d 613 [2010]). Accordingly, it is of no moment that discovery has not been conducted. In addition, plaintiffs have not asserted that facts essential to justify [*2]opposition to the motion may have existed but could not be stated (see CPLR 3211[d]). "

Attorneys are subject to a triumvirate of claims, which may generally be: legal malpractice in tort, legal malpractice in contract and breach of fiduciary duty. Attorneys are fiduciaries of their clients, but interestingly, accountants (even CPAs) are not. In Knockout Vending Worldwide, LLC v Grodsky Caporrino & Kaufman CPA’s, P.C. 2012 NY Slip Op 31855(U) Supreme Court, Suffolk County Judge: Elizabeth H. Emerson we see the distinction.

In this case business buyers claim they were defrauded when business sellers artificially inflated the value of the business through fraud. They sue sellers, sundry others, and their CPAs whom they say were hired to do the due diligence on the value of the business.

"Turning to the motion by the Kauman defendants to dismiss the second cause of action, according the plaintiffs the benefit of every possible favorable inference as a general rule, the plaintiffs have failed to state a second cause of action alleging a breach of fiduciary duty. TheCourt notes that the plaintiffs have alleged a cause of action for accounting malpractice. The existence of negligence claims, however, docs not create a fiduciary relationship between the Kaufman defendants and the plaintiffs (Friedman v Anderson, 23 AD3d 163). In general, there is no fiduciary relationship between an accountant and his client (DG Liquidation, Inc. v Anchin, Block & Anchin, 300 AD2d 70). "A conventional business relationship, without more, does not become a fiduciary relationship by mere allegation" (Friedman v Anderson, supra at 166, Oursler v Women’s Interart Center, Jnc., 170 AD2d 407, 408). Here, the complaint alleges that the Kaufman defendants were the plaintiffs’ personal accountants, and that the plaintiffs placed confidence in the Kaufman defendants’ advice and opinions as professional accountants, consultants and advisors. However, while providing financial advice may be within the scope or an accountant’s duties, and so within the definition of a conventional business relationship, the standard that plaintiffs must meet to sustain a cause of action for breach of fiduciary duty has not been met (Staffenberg v Fairfield Pagma Assoc., L.P., 2012 NY AppDiv LEXIS 3423, citing Friedman v Anderson, supra at 166; ef Lavin v Kaufman, Greenhut, Lebowitz & Forman, 226 AD2d 107). Accordingly, the Kaufman defendants’ motion to dismiss the second cause of action is granted."
 

Attorneys make mistakes. Sometimes mistakes are fixed, sometimes not. Rarely do attorneys go to the length of fabricating complaints, making up stories of ongoing litigation and then running away from the disciplinary committee. We don’t know what defense the attorney might offer, but this tale is both sad and shocking. The attorney in Matter of Gold; Grievance Committee for the Tenth Judicial District ; Motion No: 2011-06543 ; Slip Opinion No: 2012 NY Slip Op 61346(U)
; Appellate Division, Second Department, Motion Decision is now suspended.
 

"We find, prima facie, that the respondent is guilty of professional misconduct immediately threatening the public interest based upon his failure to cooperate with the lawful demands of the Grievance Committee for the Tenth Judicial District (hereinafter the Grievance Committee), with respect to its investigation of one complaint of professional misconduct.

On or about December 6, 2010, the Grievance Committee received a complaint against the respondent submitted by Paul Niehaus, on behalf of his client, David Goldstein. The complaint alleged that the respondent represented Mr. Goldstein in a matter entitled Goldstein v Massachusetts Mutual Insurance Company, commenced in the Supreme Court, New York County, under Index No. 113804/99. Mr. Goldstein, the plaintiff, sought, inter alia, declaratory relief that "the requirement in his disability policy that he be under a doctor’s care and that monthly reports be submitted be deemed waived by defendant." By order dated May 3, 2000, the Supreme Court dismissed the complaint.

On or about February 2, 2005, the respondent commenced another action entitled Goldstein v. Massachusetts Mutual Insurance Company, in the Supreme Court, New York County, under Index No. 2515/05. The verified complaint, dated February 1, 2005, sought a declaratory judgment based, in sum and substance, on the same allegations previously alleged. By order dated August 22, 2005, the court found that the action was barred based on res judicata, as well as the applicable statute of limitations, and the matter was dismissed.

From in or about 2001 through in or about 2006, the respondent allegedly engaged in misleading and deceitful conduct by permitting his client, David Goldstein, to believe that the respondent had commenced a new action on Mr. Goldstein’s behalf in 2001 (hereinafter the purported 2001 action) when, in fact, no new action had been commenced after dismissal of the first action until the commencement of the 2005 action. In response to an inquiry from David Goldstein regarding the purported 2001 action, the respondent, on or about October 29, 2004, forwarded to him copies of a purported amended summons and a purported amended verified complaint, dated November 3, 2003, and on or about January 6, 2006, forwarded to him copies of a purported summons and a purported verified complaint, dated February 12, 2001. None of those pleadings were filed. In response to another inquiry from David Goldstein regarding the purported 2001 action, the respondent, on or about May 3, 2006, forward to him copies of a purported notice of deposition and a purported verified answer, dated April 27, 2001, allegedly submitted by Michael Yoelli, of, Assail & Yoelli, LLP, on behalf of Massachusetts Mutual Insurance Company. Neither the purported notice of deposition, nor the purported verified answer, had been created, prepared or served by Michael Yoelli.

Based on the foregoing, David Goldstein commenced an action against the respondent, on or about December 20, 2006, entitled Goldstein v Gold, in the United States District Court for the Eastern District of New York, under Index No. CV-06-6707, alleging, inter alia, that the respondent had engaged in fraud and legal malpractice. In a Final Judgment by Consent dated November 4, 2010, the respondent consented to the entry of a judgment against him in the amount of $250,000.

By letter dated December 13, 2010, mailed to 5535 42nd Terrace, Vero Beach, Florida 32967 (the business address listed for the respondent with the Office of Court Administration at that time), the Grievance Committee asked the respondent to submit a written answer to the Goldstein complaint. By letter dated December 27, 2010, the respondent submitted an answer and response to a background questionaire. The answer contained another address for the respondent, to wit, P.O. Box 700148, Wabasso, Florida 32970, and the background questionnaire stated that the respondent’s home address was 5535 42nd Terrace, Vero Beach, Florida 32970.

The respondent has neither opposed the Grievance Committee’s motion nor submitted a any response relative thereto."

Based upon the foregoing, the motion is granted, the respondent is immediately suspended from the practice of law, pursuant to 22 NYCRR 691.4(l)(1)(i), pending further order of this Court, the Grievance Committee is authorized to institute and prosecute a disciplinary proceeding against him, and the matter is referred to a Special Referee to hear and report.
 

"The defendants Alisa Schiff and Schiff & Skurnik, PLLC (hereinafter together the Schiff defendants), who served as the plaintiff’s attorney with respect to the drafting, and the execution by the plaintiff, of a contract to sell her home (hereinafter the contract of sale), and the defendant Michael Gross, who served as the plaintiff’s attorney for the related real estate closing, failed to meet this burden. Contrary to the Supreme Court’s conclusion, the Schiff defendants and Gross failed to demonstrate, prima facie, that the plaintiff did not sustain any actual or ascertainable [*3]damages as a result of their alleged negligence. The contract of sale provided that the purchase price of the plaintiff’s home was $615,000, with the plaintiff to credit the purchaser with the sum of $155,000 at the closing. Approximately $241,000 of the proceeds of the sale went to satisfy the plaintiff’s mortgage, and the plaintiff received approximately $216,000. The Schiff defendants and Gross failed to eliminate triable issues of fact as to the propriety of the $155,000 credit to the purchaser and other disbursements made of the proceeds, and thus, as to whether the plaintiff should have obtained more money for the sale of her home than she received. " So, in Gelobter v Fox ;2011 NY Slip Op 09268; Appellate Division, Second Department we see that both sets of defendants failed to clear themselves of potential liability.
 

"The Schiff defendants failed to meet their prima facie burden on the issue of proximate cause, as they merely established, in this respect, that they did not participate in the real estate closing. However, this fact did not negate any negligence on their part in the drafting of the contract of sale, which the plaintiff signed under Schiff’s representation, and in connection with alleged alterations made to the purchase price on the contract prior to the real estate closing. In other words, as the contract of sale had already been signed and altered before the real estate closing, contrary to the Schiff defendants’ contention, they did not establish as a matter of law that Gross had "a sufficient opportunity to protect the plaintiffs’ rights" (Katz v Herzfeld & Rubin, P.C., 48 AD3d 640, 641), such that Schiff’s conduct could not have proximately caused the plaintiff’s damages. "