The principal of account stated, "an agreement between parties to an account based upon prior transactions between them with respect to the correctness of the account items and the balance due. By retaining billing statements and failing to object to the account within a reasonable time,  the recipient of the bill implies that he or she agrees with the sender regarding the amount owed."  is a powerful, and often determinative Issue.  In Brunelle & Hadjikow, P.C. v O’Callaghan 2013 NY Slip Op 31302(U) June 17, 2013  Sup Ct, NY County Docket Number: 158213/2012 Judge: Shirley Werner Kornreich it is the decisive and only factor considered.

"There is no doubt that B&H is entitled to an account stated on all amounts included in the June 7 Bill. O’Callaghan’s written acknowledgment that he owed those amounts precludes his current objections as to how they were calculated, such as his qualms about rate increases. As for  O’Callaghan’s objections to the amounts billed after June 7, 2006, which were made for the first time in his December 27,2006 letter, he is precluded from objecting to virtually all of the amounts billed because his objections were not made within 30 days of the relevant monthly invoices (except for his objections to invoices sent after November 27,2006). Nonetheless, even if he were entitled to challenge all of the invoices sent after the June 7 Bill, his objections would still fail. First, his objection to the rate increases, provided for in the Retainer, occurred long after such increases went into effect and were billed. Second, his objection to being overcharged for the NYSE appeal fails because the invoices clearly evidence the credits that lowered the appeal billings to $75,000. His self-serving contention about B&H billing him more than $75,000 for work on the appeal (they purportedly billed it as work for his other NYSE proceedings) is refuted by the invoices and is  insufficient to defeat summary judgment."

We remember some Shakespeare quote about how Caesar’s wife must be more worthy than any other politician/emperor’s wife. Similarly, here a legal malpractice case is dismissed for failure to file a complaint after a demand had been made. In Dayan v Darche 2012 NY Slip Op 04312 Appellate Division, Second Department the Court writes:
 

"To avoid dismissal of the action for failure to serve a complaint after a demand for the complaint has been made pursuant to CPLR 3012(b), a plaintiff must demonstrate both a reasonable excuse for the delay in serving the complaint and a potentially meritorious cause of action (see Perez-Faringer v Heilman, 79 AD3d 837, 838; Gibbons v Court Officers’ Benevolent Assn. of Nassau County, 78 AD3d 654, 654; Pristavec v Galligan, 32 AD3d 834, 834; Maldonado v Suffolk County, 23 AD3d 353, 353-354). Here, the plaintiff failed to proffer any excuse for her lengthy delay in serving the complaint. Furthermore, she failed to establish that she had a potentially meritorious cause of action (see generally Rosner v Paley, 65 NY2d 736, 738; Allen v Potruch, 282 AD2d 484, 484-485; Iannacone v Weidman, 273 AD2d 275, 276-277; Rubinberg v Walker, 252 AD2d 466, 467). Accordingly, the Supreme Court properly granted the defendant’s motion to dismiss the action.

In addition, the plaintiff’s motion for leave to renew her opposition to the defendant’s motion to dismiss the action was properly denied. In support of her motion, the plaintiff proffered her attorney’s affirmation in an attempt to provide a reasonable excuse for the delay in serving the complaint. However, the attorney’s affirmation, which, inter alia, proffered an unsubstantiated excuse of disabling illnesses, was insufficient to warrant a change of the prior determination (see CPLR 2221[e][2]; Cynan Sheetmetal Prods., Inc. v B.R. Fries & Assoc., Inc., 83 AD3d 645, 646; Mattera v Capric, 54 AD3d 827, 828; Borgia v Interboro Gen. Hosp., 90 AD2d 531, affd 59 NY2d 802; Wolfe v Town of Hempstead, Dept. of Parks & Recreation, 75 AD2d 811, 812). Moreover, the plaintiff failed to offer a reasonable justification for failing to present this affirmation in opposition [*2]to the defendant’s original motion (see CPLR 2221[e][3]; Brown Bark I, L.P. v Imperial Dev. & Constr. Corp., 65 AD3d 510, 512; Zarecki & Assoc., LLC v Ross, 50 AD3d 679, 680; Reshevsky v United Water N.Y., Inc., 46 AD3d 532, 533). "

Immigration law legal malpractice cases are relatively rare.  One reason is that the plaintiff is usually not int he US and a second reason is that damages are somewhat difficult to calculate, in these days of purely economic or "out-of-pocket" damages.  Here is an unusual case.  Delgado v Bretz & Coven, LLP   2013 NY Slip Op 04720   Decided on June 20, 2013   Appellate Division, First Department   Manzanet-Daniels, J., J.  
 

"In this case we determine whether plaintiff has sufficiently alleged that defendants’ legal advice concerning the consequences of applying for an adjustment of immigration status constitutes malpractice, and whether she has sufficiently alleged that such misguided advice was the but-for cause of her ultimately being taken into custody and deported. [*2]

Plaintiff is a native of Ecuador. On May 5, 1999, she first attempted to enter the United States at Houston International Airport by falsely presenting herself as a returning resident alien, using a visa belonging to her cousin, who has the same surname. Plaintiff was removed and returned to Ecuador, but in December 2000, reentered the United States without inspection by crossing the Mexican border. As an alien previously ordered removed who thereafter entered the United States without permission, plaintiff was deemed "inadmissible" pursuant to Immigration and Nationality Act (INA) § 212(a)(9)(C)(i)(II) (8 USC § 1182[a][9][C][i][II]), and, by statute, could not apply for readmission until ten years had passed from the date of her last departure from the United States (INA § 212(a)(9)(C)(ii) (8 USC § 1182[a][9][C][ii]).

On January 8, 2006, plaintiff married a United States citizen, Jarret Kahn. On February 23, 2006, plaintiff retained defendant Bretz & Coven LLP to represent her before the United States Citizenship and Immigration Service (CIS) in order to obtain legal residency in the United States. Plaintiff alleges that defendant Kerry Bretz, a partner at the firm, determined that she could apply for adjustment of status without leaving the United States, based on a Ninth Circuit precedent, Perez-Gonzalez v Ashcroft (379 F3d 783, 788-789 [9th Cir 2004]).

On July 11, 2006, the firm filed several immigration forms with CIS, including a Form I-485 petition for adjustment of status to lawful permanent resident, Form I-212 for permission to reapply after deportation or removal, and a Form I-130 petition for classification of an alien as an immediate relative of a United States citizen.

On October 26, 2006, plaintiff and her husband appeared with defendants for an interview at CIS, which denied her requests on the I-485 and I-212 forms that same day. CIS found her ineligible for adjustment of her status because she had entered the United States without permission after having been removed. CIS found that plaintiff did not qualify for a waiver of inadmissibility, as set forth in section (a)(9)(C)(ii) because 10 years had not yet passed from the date of her last departure from the United States, and she did not seek permission for readmission before she reentered in December 2000.

Plaintiff was arrested on the same day by immigration authorities, who reinstated her expedited removal order of May 5, 1999. They released her from detention the same day pursuant to an agreement reached with her lawyers, but the reinstatement order remained in effect. "

"We now modify to reinstate plaintiff’s claim for legal malpractice against defendant law firm and Bretz. The claim against defendant Guadagno was properly dismissed. Inasmuch as the well-reasoned and thorough Second Circuit opinion was not contingent on defendant Guadagno’s argument or briefing, it was not a but-for cause of plaintiff’s deportation.

We disagree with the motion court’s conclusion that due to intervening events, defendant law firm and Bretz’s malpractice was not a "but for" cause of plaintiff’s removal from the United States. Plaintiff was unambiguously ineligible for relief under prevailing case law when defendants submitted her application to immigration authorities. Once her application was submitted and denied and the removal order reinstated, any efforts by Kahn, whom plaintiff had retained to represent her after terminating defendants’ services, were too late to remedy the situation. By that point, the only intervening event sufficient to break the causal chain would have been a change in the relevant immigration law. The passage of four years between plaintiff’s consultation with defendants and her removal did not disrupt the chain of causation.

When defendants submitted plaintiff’s application, the government had already publicly announced that it would not grant relief to those in her position in light of the BIA’s decision in Matter of Torres-Garcia (see e.g. CIS Interoffice Memo dated Mar. 31, 2006, p. 2, attached to the complaint and available at http://www.uscis.gov/USCIS/Laws/Memoranda/Static_Files_Memoranda/Archives%201998-2008/2006/perezgonz033106.pdf, stating that in light of Torres-Garcia, "in any case where an alien is inadmissible under section 212(a)(9)(C)(i) of the INA and 10 years have not elapsed since the date of the alien’s last departure from the United States, USCIS should deny any Form I-212 requesting consent to reapply for admission"). However, instead of advising plaintiff concerning the clear implications of the BIA’s ruling in Torres-Garcia — to which the Ninth Circuit owed deference under Chevron USA — defendants assured plaintiff "she would not be deported much less detained" if she applied.

Given plaintiff’s allegations that she had no chance of obtaining immigration relief and that defendants failed to thoroughly discuss the possibility, if not certainty, of reinstatement of the order of deportation and removal upon submission of the application, plaintiff has sufficiently alleged that defendants followed an unreasonable course of action in pursuing the application (see Phoenix Erectors, LLC v Fogarty, 90 AD3d 468, 469 [1st Dept 2011]). Moreover, she has sufficiently alleged proximate cause, because the submission of the application alerted authorities to her status, which led to the issuance of the reinstatement order and ultimately to her removal (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]; Phoenix Erectors, 90 AD3d at 469). Plaintiff’s unlawful status alone did not trigger her removal, since she had resided in the United States, albeit unlawfully, for more than six years; she was removed only after defendants affirmatively alerted immigration authorities to her presence. The record does not indicate on this motion pursuant to CPLR 3211 that plaintiff would have otherwise come to the attention of the immigration authorities. Without discovery on the issue, it cannot yet be said, as defendants assert, that plaintiff would have been deported regardless of defendants’ malpractice. Indeed, had plaintiff waited four more years she would have been eligible to apply for reinstatement under INA § 212(a)(9)(C)(ii), which provides that an alien in [*5]plaintiff’s position can apply for admission if more than ten years have passed from the date of the alien’s last departure from the United States."

Yesterday we took a look at RGH Liquidating Trust v Deloitte & Touche LLP  2013 NY Slip Op 31224(U)  June 6, 2013 Sup Ct, New York County  Docket Number: 600057/06  Judge: Eileen Bransten on the issue of standing.  Today, we’ll look at the proximate cause issue.  Just to remind you, this billion dollar professional malpractice case involves some of the following parties: According to the Amended Complaint, the Banks included Chemical Bank, Bank of
America of Illinois, Bank of New York, Bankers Trust Company, Credit Lyonnais New York
Branch, Credit Lyonnais Caymen Islands Branch, National Westminster Bank USA, Bank of
Montreal, Corestates Bank, N.A., Union Bank, ABN AMRO Bank N.V., New York Branch,
Sanwa Bank California, Banque Paribas, New York Branch, The Yasuda Trust and Banking Co.,
Ltd., and PNC Bank, National Association.

One of the more interesting parts of the professional malpractice world is the deep (really deep) plunge the court is willing to take in looking at the underlying case.  It’s no exception in this case

"Defendants argue that their reports did not proximately cause Plaintiff s loss, since there is no evidence that the Banks would have taken any of the actions alleged in the pleading but for Defendants’ alleged misrepresentations. These actions include: (1) exercising their rights under the Credit Agreement to declare the loans due and payable and terminate all loan commitments to Reliance Financial Services; (2) refusing to extend the loans from March 31,2000 to August 31, 2000; (3) selling the collateral that secured the loans; (4) recommending that Reliance sell its Financial Products Division and its Excess and Surplus Lines Division, to generate funds to repay the loans; and, (5) contacting Reliance’s independent audit committee and/or state insurance regulators. (Am. Compi. ~~ 44-47.) Each of these allegations is discussed below.
 

1. Declaring the Loans Due and Terminating RFS Loan Commitments

Plaintiff alleges that, had the Banks known that the financial reports were overstated, they would have exercised their rights under the Credit Agreement to declare the loans due and payable on the original maturity date of March 31, 2000, terminating all loan commitments to Reliance Financial Services. However, Defendants submit the Banks’ testimony, stating that they never called due their loans even after discovering Reliance’s true financial condition. (Affirmation of Michael 1. Dell ("Dell Affirm."), Ex. 13 at 29, 67; Ex. 14 at 129; Ex. 15 at 110-111; Ex. 16 at 17; Ex. 17 at 96-97; Plaintiffs Rule 19-a Response ~ 91.) In February 2000, RFS informed the Banks that it could not repay the loans, and Reliance sought a five-month extension for repayment. Thereafter,
the Banks agreed to extend the maturity date of the loans from March 31,2000 to August 31,2000, because failing to do so would have caused a downgrade in Reliance’s ratings, making it difficult for Reliance to write new insurance and repay the loans. (Dell Affirm., Ex. 6 at 32-33,48-50,56-57,87; Ex. 7 at 21,30-33,55-57; Ex. 9 at 40,47; Ex. 10 at 0054; Ex. 11 at 4024; Ex. 18 at 23-24; Ex. 19 at 398,404; Ex. 20 at 5929-5930; Ex. 21 at 3258.) The Banks’ testimony, internal memoranda, and credit extension applications all indicate that the Banks "[did] not have any viable alternative" other than to agree tto RFS’s extension request."

The Banks also did not call due their loans in August 2000, when Reliance announced that: it was increasing loss reserves by $460 million~ it could not repay the loans~ it was further downgraded to "B"; it was unable to write new business and operating in a run-off mode; the sale of Reliance to Leucadia National Corporation fell through in July of 2000; and it was considering a bankruptcy filing. (Dell Affirm. Ex. 6 at 73-74, 78, 89-90, 95; Ex. 7 at 80, 83; Ex. 13 at 29-30, 53-54; Ex. 14 at 88-90; Ex. 29 at 3366-3367; Ex. 31 at 0365; Ex. 43 at 2; Ex. 44 at 0065.) Instead, the Banks agreed to
waive Reliance’s default under the Credit Agreement and to further extend the loan maturity date to November 10, 2000. The Banks acknowledged the possibility that regulators could place Reliance in rehabilitation or liquidation, and that the "regulators are likely to prohibit the upstreaming of any normal dividends, i.e., from the insurance subsidiaries to our Borrower [RFS]." Id., Ex. 29 at 3367; Ex. 13 at 54-55. The Banks testified that, in August 2000, Reliance was not operating as a going
concern, but rather, was operating in a run-off/liquidation mode. "

"Like the plaintiff in Starr Foundation, the Banks "remained in possession of the rue value of the [loans], whatever that value may have been at any given time," and any decline in the value of the loans or RFS’s ability to repay them was caused by RIC’s massive losses, which "would have been incurred regardless of any earlier misrepresentation [defendants] made concerning [RIC’s loss reserves]." Starr Found., 76 A.D.3d at 28-29 ("the paper ‘loss’ the [plaintiff] seeks to recover in this action was caused by the underlying business decision of [defendant’s] management to build up the CDS portfolio on which the losses reported in early 2008 were sustained, not by the earlier alleged misrepresentations forming the basis of the [plaintiffs] complaint"). For the foregoing reasons, Defendants have made a prima facie showing that the Banks would not have called due their loans, and that even if they did, the Pennsylvania Insurance Department would not have permitted RIC to make any payments to RFS, thereby preventing RFS from repaying the loans.
 

It’s shocking to look at the list of banks which made an unsuccessful claim for professional malpractice in RGH Liquidating Trust v Deloitte & Touche LLP  2013 NY Slip Op 31224(U)
June 6, 2013  Sup Ct, New York County  Docket Number: 600057/06  Judge: Eileen Bransten and to realize that they were unable to recoup about a Billion (that’s 1000 Million) dollars in lost loans, all of which they allege were caused by accounting malpractice.  Today, we’ll look at the first of two issues:  standing.

In legal and professional malpractice plaintiff must have a relationship with the attorney.  Primarily this is to keep losing litigants from suing their opponent’s lawyers.  Here, based upon Delaware law, it plays out somewhat differently, in the stockholder/corporation model.

"This action is based upon Defendants’ allegedly improper performance of actuarial and accounting services for Reliance Group Holdings, Inc. ("Reliance Group Holdings" or "RGH"), Reliance Financial Services Corp. ("Reliance Financial Services" or "RFS"), and Reliance Insurance Company (‘~RIC") (together, "Reliance"). Plaintiff RGH Liquidating Trust commenced this action, asserting fraud claims on behalf of the general unsecured creditors of RGH and RFS, including: a syndicate of 15 banks that collectively loaned RFS $237.5 million (Banks");! the Pension Benefit Guaranty Corporation (HPBGC"); and two former employees of RGH and RFS, David Woodward ("Woodward") and Christine Howard ("Howard").

Plaintiff s fraud claims are based upon financial reports prepared by Defendants for the year ending December 31, 1999, including Deloitte’s audit and financial statements, issued on May 30, 2000, and Lommele’s statement of actuarial opinion, issued on February 25,2000. Plaintiff claims that these financial reports overstated Reliance’s surplus by $500 million and under reported its loss reserves by $500 million, resulting in a total misrepresentation of $1 billion. These misstatements allegedly caused Reliance to make improper distributions, incur additional liabilities, and forestall regulatory action.

It is undisputed that Reliance’s financial condition was deteriorating by the end of 1999, prior to the issuance of Defendants’ reports. RGH suffered an operating loss of $318.3 million in 1999, and, in February 2000, announced that it was suspending quarterly dividends and extending the maturity of its bank loans. In May 2000, RGH reported a $36.5 million operating loss for the first quarter 0[2000. By June 2000, RIC stopped underwriting property and casualty insurance. In July, a deal for an outside company to acquire RGH collapsed, and various ratings agencies downgraded Reliance’s rating. By December 2000, RGH’s stock traded at less than $1.00 per share, and the New York Stock Exchange suspended trading of RGH’s securities.

Defendants seek summary judgment dismissing the Amended Complaint, arguing that Plaintiff lacks standing and that the claims are barred by res judicata. On the merits, Defendants argue that Plaintiffs fraud claims should be dismissed for failure to establish proximate cause and reasonable reliance.

Defendants argue that the Banks lack standing, because any injury to the Banks is derivative of harm to Reliance Financial Services ("RFS"), the entity to which the Banks made their loans. Defendants argue that the Pension Benefit Guaranty Corporation ("PBGC"), Woodward, and Howard lack standing for the same reason, incorporating by reference the standing arguments contained in the Banks’ opening brief.

Under Delaware law, in order to determine whether Plaintiffs claims are derivative or individual, the
court should look to the nature of the wrong and to whom the relief should go. The stockholder’s claimed direct injury must be independent of any alleged injury to the corporation. The
stockholder must demonstrate that the duty breached was owed to the stockholder and that he or she can prevail without showing an injury to the corporation. Tooley v. Donaldson, Lufkin, & Jenrette, Inc., 845 A.2d 1031, 1039 (Del. 2004). The court must consider "(1) who suffered the alleged harm (the corporation or the suing stockholders, individually); and (2) who would receive the benefit of any recovery or other remedy (the corporation or the stockholders, individually)." Id. at 1033; Yudell v. Gilbert,, 99 A.D.3d 108, 114 (1st Dep’t 2012) (adopting the Tooley test for distinguishing between direct and derivative claims). "[T]he direct/derivative distinction [does] not vary because the claim was asserted by a creditor instead of a stockholder." North Am. Catholic Educ. Programming Found., Inc. v. Gheewalla, 2006 WL 2588971, * 11 n.lOO,2006 Del. Ch. LEXIS 164, *50 n.100 (Del. Ch. 2006), aff’d 930 A.2d 92 (Del. 2007).

As stated by the Court of Appeals, the Liquidating Trust "is the successor of RGH," and "the assets of RGH’s bankruptcy estate vested in the Trust," including the "claims of the bankruptcy estate’s creditors, who are the beneficiaries of any recoveries from [defendants]." RGH Liquidating Trust, 17 N.Y.3d at 407. In short, the creditor claims were assigned to RGH. RGH, in turn, assigned those claims to Plaintiff, and Plaintiff now asserts them directly. Thus, there are no derivative claims, and Defendants fail to make a prima facie showing that Plaintiff lacks standing. Condren, Walker & Co.,
Inc. v. Portnoy, 48 A.D.3d 331,331 (1st Dep’t 2008) ("[a]n assignee stands in the shoes of its assignor, subject to all the equities and burdens attached to the property acquired"). "

Money disputes between clients and attorneys are a rich source of litigation.  This is likely due to the low entry costs for attorneys to sue their clients, and the fact that clients are really relegated to the closed purse method of dealing with uncooperative attorneys.  Hence the stage is set for a large body of law on the issue.

In Brady v Freidlander  2013 NY Slip Op 31238(U)  June 7, 2013  Sup Ct, NY County  Docket Number: 156825/2012,   Judge Eileen A. Rakower takes on several of the most pressing questions.  Is it permissible to threaten to leave if not paid, is it legal malpractice to get out of the case, and is it a violation of Judiciary Law 487 to tell the court that you want to quit because of differences in strategy when there is a fee dispute too?

"As alleged in the Complaint, on September 1 0, 2009, represented by Defendant, Plaintiffs were  ready to proceed to trial in the Civil Court matters, but the matter was adjourned until September 30,2009. Defendant moved to be relieved as Plaintiffs’ counsel. On September 30,2009, Defendant’s motion was heard before the Honorable Debra Rose Samuels, Plaintiffs opposed, and the Court granted Defendant’s motion. The Complaint alleges that "Defendant intentionally and maliciously misrepresented to the Plaintiffs and to the Court that he was withdrawing
from the representation of plaintiffs because of conflicts involving trial strategy when in fact the defendant’s sole concern [was] that his future legal bills would not be paid."

""An attorney with just cause may withdraw from a case and may recover for his services rendered." In the Matter o/the ME. v. s.G., 124 Misc. 2d 851,851 (N.Y. County 1984). Furthermore, "An attorney may be permitted to withdrawn from employment where a client refuses to pay reasonable legal fees." Weiss v. Spitzer, 46 A.D. 3d 675 [2d Dept 1987]). It is well established that an attorney’s alleged threat to cease representing a client unless the attorney is paid does not constitute duress. See Levitt v. Brooks, 102 A.D. 3d 547 [1 SI Dept 2013] (a lawyer’s threat to cease rendering services unless paid does not constitute coercion); Duane Morris LLP v. Astor Holdings, Inc., 61 A.D. 3d 418 [1 st Dept 2009]; Fred Ehrlich, P. C. v. Tullo, 274 A.D. 2d 303 [1 st Dept 2000]
("[P]laintiff’s ‘threats’ to cease representing defendants unless he were paid were not wrongful. The threatened exercise of a legal right is not economic duress.")"

"Plaintiffs allege that Defendant deceived the Court when he moved in open court to withdraw as their counsel on the basis that plaintiff James Brady questioned strategy and lacked trust in Defendant’s representation "when in fact the real reason for withdrawal was the Defendant’s concern that Plaintiffs could or would not pay defendant’s future legal bills." However, Plaintiffs had the opportunity to raise these issues when opposing Defendant’s motion to be relieved of counsel, and after considering Plaintiff’s opposition, Judge Samuels permitted Defendant to be relieved
of counsel. Plaintiffs did not thereafter appeal Judge Samuels’ decision on that point. Furthermore, even if Plaintiffs’ allegations are true and Defendant was seeking to withdraw based on Plaintiffs’ failure to pay legal fees, an attorney may be permitted to seek withdrawal on this ground. Thus, the conclusion that Defendant acted "with intent to deceive the court or any party" is without factual support. "

"The Complaint fails to allege facts sufficient to show that "but for" Defendant’s negligence,  Plaintiffs would have prevailed in the underlying action. Here, while the Complaint states that
"Plaintiff would have won the trial in the Civil Court based on defendants of Constructive Eviction and breach of warranty … had the defendant not abandoned representation and provided adequate advice concerning the surrender of the possession issue of the Yellowstone injunction … and Plaintiffs would not have lost their [commercial spaces]", these allegations are conclusory and without factual support. Rather, based on the Complaint, after Defendant was relieved of counsel,
Plaintiffs were provided with time to obtain new counsel, and the default entered against the corporate plaintiffs was based on their failure to do so, and that default has now been reversed.
Plaintiffs’ fourth cause of action alleges misrepresentation. The Complaint alleges that "Defendant intentionally and maliciously misrepresented to the Plaintiffs and to the Court that he was withdrawing from the representation of plaintiffs because of conflicts involving trial strategy when in fact the defendant’s sole concern [was] that his future legal bills would not be paid." Here, in light of the fact that Defendant moved in open court to be relieved as counsel, Plaintiffs opposed, Judge Samuels’ granted Defendant’s motion, and Plaintiffs’ did not appeal that order on that issue, the
issue was previously litigated and cannot be relitigated here. "

Uninsured Motorist’s Coverage is insurance that one buys for the instance in which the other driver is uninsured or underinsured.  Before that coverage, which has already been paid for, is triggered, several things must take place.  One is that the entire policy payout of the other driver must be obtained and the second is that your carrier must consent to the settlement.  What happens if one of the two conditions precedent doesn’t happen? 

We see one such situation in Benjamin v Allstate Ins. Co., 2013 NY Slip Op 31248(U) June 10, 2013 Supreme Court, Suffolk County Docket Number: 11-37345 Judge: W. Gerard Asher. 

"This action was commenced to recover damages allegedly sustained by the plaintiff as the result
of the actions of the defendants The Odierno Law Firm, PC and Joseph J. Odierno (Odierno) in failing to timely pay her the proceeds of the settlement of a personal injury action commenced on her behalf, failing to timely notify her of its failure to timely notify her insurance carrier of the potential of her potential “SUM” claim, and for their violation of Judiciary Law 487. The amended complaint in this action sets forth three causes of action. The first cause of action against the defendant Allstate Insurance Company (Allstate) seeks a declaration that she is entitled to supplementary underinsured motorist (SUM) benefits pursuant to her policy of insurance with Allstate. The second and third causes of action against Odierno sound in legal malpractice and violations of Judiciary Law 5 487."

"It is undisputed that plaintiff was involved in a motor vehicle accident on May 7,2004, and that
Odierno was retained by the plaintiff to prosecute an action against both the owner and the operator of the other vehicle (the underlying action). It is also undisputed that Odierno settled the underlying action on or about May 17, 2007. A review of the documentary evidence reveals that Odierno received the settlement check from the defendants’ insurance carrier on or about June 26,2007, and that he filed a closing statement pursuant to 22 NYCRR 691.20 on or about September 14,2007. However, Odierno did not disburse the amount due to his client immediately. Instead, he paid out $6,000 to the plaintiff on March I I, 2008, and the balance due her on October 18, 2008."

"To the extent that the plaintiffs second cause of action can be read to assert that Odierno’s delay
in paying out the subject settlement proceeds to the plaintiff constituted legal malpractice, the action accrued no later than October 18, 2008. In a letter that date, Odierno transmitted the balance of the settlement proceeds to the plaintiff stating “Thank you for the privilege of selecting my office to represent you in this matter. If I can be of service to you in the future, do not hesitate to contact me.” An action to recover damages for legal malpractice must be commenced within three years from accrual (CPLR 214 (6); see McCoy v Feinman, 99 NY2d 295,755 N.Y.S.2d 693 [2002]; Rupolo v Fish, 87 AD3d 684,928 NYS2d 596 [2d Dept 201 13; Williams v Lindenberg, 24 AD3d 434,805 NYS2d 132 [2d Dept 20051). A legal malpractice claim accrues when the malpractice is committed, not when it is discovered (McCoy v Feinman, supra; Shumsky v Eisenstein, 96 NY2d 164,726 NYS2d 365 [2001]; St. Stephens Baptist Church, Inc. v Salzman, 37 AD3d 589, 830 NYS2d 248 [2d Dept 20071; Shivers v. Siegel, 11 AD3d 447,782 NYS2d 752 [2d Dept 20041; Venturella-Ferretti v Kinzler, 306 AD2d 465, 762 NYS2d 254 [2d Dept 20031). In addition, a client’s ignorance of the alleged wrong or injury has no impact upon when the cause of action accrues (see McCoy v Feinman, supra; Alicanti v Bianco, 2 AD3d 373,767 NYS2d 815 [2d Dept 20031; King v Albany County Pub. Defender’s OfJ:2,55 AD2d 770, 680 NYS2d 289 [3d Dept 19981). Here, Odierno has established that this action was commenced on December 7,2011, more than three years after the second cause of action accrued on September 14, 2007 or, in any event, no later than October 18,2008.’"

Question:  How does plaintiff prove that it was negligence to settle for $ 21,500 rather than $ 25,000 and that the other driver would have paid $ 25,000 if the attorney were not negligent?

Two lessons for legal malpractice practitioners and, upon consideration, for all attorneys can be found in Wild v Catholic Health Says. 2013 NY Slip Op 04043   Decided on June 6, 2013  Court of Appeals.  The first lesson is straightforward.  One must preserve objections in order to appeal from the resulting order.  Here,  "On appeal, defendants contend that the trial court improperly instructed the jury on the loss-of-chance theory of liability because New York State has not yet adopted this theory, and the charge relaxed the plaintiffs’ burden of proof [FAN1]. Defendants base their argument on the following jury charge language:
"The negligence of any of the defendants may be considered a cause of the injuries to [decedent] if you find the defendant[s’] actions or omissions deprived [decedent] of a substantial possibility of avoiding the consequences of having a permanent feeding tube. The chance of avoiding a need for a permanent feeding tube to be substantial, does not have to be more likely than not and it does not have to be more than 50 percent, but it has to be more than slight." [*3]
 

In response, plaintiffs argue that defendants’ challenge based on the viability of a loss-of-chance theory of liability under New York law is unreserved, and that regardless, the jury charge was proper.

As a threshold matter we agree that the defendants’ challenge to the viability of the loss-of-chance theory as articulated on appeal is unreserved. The record indicates that defendants did not present the trial court with a direct challenge to the underlying theory of negligence propounded during the trial and eventually charged to the jury. Instead, counsel challenged the jury charge on the ground that the "facts of this case" do not support a loss-of-chance charge, not that such charge is wholly unavailable under New York law. Thus, the concern raised with the trial court was that plaintiffs had failed to present a factual basis for the charge, not that as a legal matter, regardless of the evidence, such a charge was prohibited under New York law. Moreover, defendants’ challenge was asserted as part of counsel’s request for adherence to the PI because, counsel argued, the proposed language deviated from the PI in a way that changed the burden of proof. Thus, the sum and substance of defendants’ argument before the trial judge was that plaintiff failed to present evidence in support of the charge which sought to instruct the jury on a negligence theory of loss-of-chance, and that the jury charge erroneously reduced the plaintiffs’ burden of proof and relaxed the standard for causation."

The Second lesson is on the question of whether a "loss-of-chance" claim might be available for legal malpractice cases.  "The loss-of-chance theory, in certain jurisdictions, "’grant[s] recovery to patients for deprivation of the opportunity of more beneficial treatment and the resulting gain in life expectancy or comfort, although the evidence fails to establish a reasonable probability that without defendant’s negligence a cure was achievable’" (Hill v Novelties Pharmaceuticals Corp. _ F Supp 2d _ [ED NY 2013], quoting Williams v Recall, 33 Cal App4Th 120, 134 [1995]). "

Might not the same theory, that a plaintiff was deprived of the opportunity of a more beneficial outcome to the litigation be available to legal malpractice cases?