Representation of clients may be limited or general.  An attorney-client relationship is considered to be general unless it is specifically limited by a retainer agreement.  That retainer agreement had best be very specific, and it should set the limits quite clearly.  If it does not, then the attorney can be held responsible for all acts that should have been performed, even if outside the scope of the "limited" retainer.

In Superior Tech. Solutions, Inc. v Rozenholc ;  2013 NY Slip Op 30690(U)  April 1, 2013
Sup Ct, New York County  Docket Number: 100856/12  Judge: Joan A. Madden we see one such example.  The attorney says that he was retained solely for  potential litigation with the commercial landlord.  The client then, after some representation, fails to renew the lease.  Is the attorney responsible?

"However, the issue of whether Rozenholc had a duty to renew the plaintiffs’ lease is different from whether the plaintiffs’ orally renewed their lease, and this issue was not addressed in the prior two actions. In the New York Supreme Court decision dated May 1 1,20 1 1 , the court merely determined that Lee’s alleged attempt to orally renew the lease was insufficient under the terms of the lease. The Bankruptcy Court similarly discussed the validity of Lee’s oral lease renewal. A determination of whether the lease renewal was within Rozenholc‘s duties was not made within the course of either litigation, so the doctrine of law does not apply.

Under this standard, the complaint adequately states a cause of action for legal malpractice based on allegations that Rozenholc failed to advise the plaintiffs of the date that the renewal option had to be exercised? and/or failed to exercise the renewal option on behalf of plaintiffs and that but for Rozenholc’s negligence, Superior would not have become holdover tenant, subject to an eviction proceeding and ineligible for a buyout offer, and therefore damaged.

The court also rejects Rozenholc’s argument that he is not the proximate cause of plaintiffs’ damages due to successor counsel’s liability. While it has been held that predecessor counsel’s negligence may not be the proximate cause of plaintiffs’ alleged damages when subsequent counsel had a sufficient opportunity to protect plaintiffs’ rights (E& Perks v. Lauto & Garabedian, 306 A.D.2d 261,262 (2nd Dept 2003), this rule is inapplicable here, as the right to renew the relevant lease expired on October 3 1,20 10, before the subsequent counsel was retained ."

Finally, the documentary evidence and in particular the retainer agreement does not establish that the legal malpractice action is insufficient as a matter of law. Specifically, the retainer agreement which describes Rozenholc’s services to include which includes bringing actions to protect plaintiffs’ interest in the lease and representing plaintiffs in negotiations with the landlord arguably can be interpreted to include exercising plaintiffs’ renewal option under the lease."

Hearing that your legal malpractice case is "unavailing" is terrifying.  Nevertheless, this case was dismissed, appealed, reversed, remanded, and immediately dismissed again, this time on summary judgment.  Garnett v Fox, Horan & Camerini, LLP  2013 NY Slip Op 30703(U)  April 5, 2013  Sup Ct, New York County  Docket Number: 114079/2008  Judge: Cynthia S. Kern is the story of a business gone bad, with crippling rent that it could no longer handle.

"Plaintiff commenced the instant action asserting, among other things, a claim for legal malpractice against defendant in relation to defendant’s representation of Boylan International,
Inc. (“Boylan International”) in an underlying rent non-payment action. Defendant now moves
for an order granting it summary judgment and dismissing plaintiffs complaint. For the reasons
set forth below, defendant’s motion is granted.

Over the years, Boyland International failed to make payments required by the Lease and
subsequent non-payment proceedings were initiated, including the Underlying Action herein at
issue. The Underlying Action was brought on or about August 2003, On or about April 2 1,
2004, Boylan International retained Fox Horan to represent it in the Underlying Action pursuant
to a written retainer (the “Retainer Agreement”). At that time, Boylan International was already
in default and facing eviction. However, after retaining Fox Horan, a stipulation was entered into
which, among other things, allowed Boylan International to Answer and assert an affirmative
defense. During the course of the litigation, the landlord’s attorney became ill and the case was
marked off the calendar for approximately two years. During this period, Boylan International
did not pay rent or additional rent and the arrears grew to approximately $675,000.

During trial, Fox Horan presented expert testimony of Gary Goldman in order to establish
that Boylan International should not be liable for $243,897 of the $276,000 in real estate tax
arrears based on the New York Supreme Court’s holding in Blacktar Publishing Company v.
460 ParkAssociates, 137 Misc.2d 414 (N.Y. Sup. Ct. 1987) (the“Blackstar defense”). In
Blackstar, the court found that a tax escalation clause in a commercial lease requiring the tenant
to pay as additional rent a percentage of real estate taxes for every year during the lease did not
necessarily require the tenant to pay for any increased tax assessments which resulted from
extraordinary improvements to the premises that were not contemplated by the parties at the time
the lease was executed. See id. Thus, both parties agree that the testimony of Mr. Goldman was
crucial as this was its only viable defense to the non-payment of the real estate taxes. Fox Horan
tried to offer various exhibits to corroborate the testimony of Mr. Goldman but the Court refused to admit these exhibits based on objections by opposing counsel. Both parties herein agree that
these exhibits were “improperly precluded.” After Mr. Goldman finished his testimony, Fox
Horan called Ms. Boylan to testify. While on the stand, after having been sworn in, Ms. Boylan
addressed the Judge directly before counsel from Fox Horan had an opportunity to ask any
questions. The Judge then went off the record and a settlement was reached (the “Stipulation of
Settlement”).

In the instant action, the defendant has presented sufficient evidence demonstrating the
absence of any material issues of fact warranting a grant of summary judgment in its favor. A
prima facie case for legal malpractice requires a plaintiff to establish “that the defendant attorney
failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member
of the legal profession which results in actual damages to a plaintiff, and that the plaintiff would
have succeeded on the merits of the underlying action ‘but for’ the attorney’s negligence.” Lsder
v. Spigel, 9 N.Y.3d 836 (2007) (quoting Am-Base Corp. Y: Davis Polk & Wardwell, 8 N.Y.3d 6
 

Specifically, when the underlying action was settled, a plaintiff must show that
but for its attorney’s actions it would not have entered into the settlement or it would have been
entitled to a more favorable settlement. See Rau v. BorenkofJ; 262 A.D.2d 388,389 (lst Dept
1999); See Rogers v. Ettinger, 163 A.D.2d 257 (lst Dept 1990). Thus, in order to succeed “on a
motion for summary judgment to dismiss the action, a defendant must proffer admissible
evidence establishing that the plaintiff is unable to prove at least one of the essential elements of
his or her case.” E. Suydam v. J 0 ’Neill, 276 A.D.2d 549 (2ndD ept 2000).

Legal malpractice plaintiffs argue that defendant attorney handled the case badly, and then go on to say that if the attorney had done "x", there would have been a better or different outcome.  Defendant argues that this is all "speculation."  If you were the Court, how would you decide?  Remember that legal malpractice analysis is always a comparison of how a "hypothetical" judgment, which might have been reached had the attorney done "x" versus the actual outcome.

In Citidress II Corp. v Tokayer  2013 NY Slip Op 02369   Decided on April 10, 2013   Appellate Division, Second Department we see the AD taking a position that "Speculative contentions about what might have happened had the defendant attorney (hereinafter the defendant) taken a different approach in litigating a case on behalf of the plaintiff were not sufficient to support the plaintiff’s allegations of legal malpractice (see Humbert v Allen, 89 AD3d 804; Dempster v Liotti, 86 AD3d 169, 180; Wald v Berwitz, 62 AD3d 786)."

Isn’t all legal malpractice "speculation" about what would have happened if the attorney had done "x" and whether the failure to do "x" was a departure?

One of the cornerstones of legal malpractice law is that any hypothetical judgment that plaintiff should have received must have been collectible.  If defendant had filed a bankruptcy petition, or there was no insurance and no assets, then any hypothetical judgment that the attorneys did not obtain would not have been collectible, hence, there are no actual and ascertainable damages in the legal malpractice.  Example:  a judgment proof person negligently breaks your leg.  Whom would you have successfully sued and collected from?  If the answer is "nobody" then you do not have a good legal malpractice case.

In New York, the four departments disagree with each other over who has the burden of proof of collectibility.  In the Second and Fourth Departments, its plaintiff.  In the First Department, its defendant.  Lindenman v Kreitzer  2004 NY Slip Op 02498 [7 AD3d 30] ; April 6, 2004
Appellate Division, First Department is the landmark case.  "To the extent that Larson v Crucet (105 AD2d 651 [1984]) holds that proof of the collectibility of the underlying judgment is an essential element of the plaintiff’s cause of action for legal malpractice, we overrule that decision.

We further find that, where relevant, the issue of noncollectibility should be treated as a matter constituting an avoidance or mitigation of the consequences of the attorney’s malpractice (see e.g. Jourdain v Dineen, 527 A2d 1304, 1306 [Me 1987]) and the erring attorney should bear the inherent risks and uncertainties of proving it (see Kituskie v Corbman, 452 Pa Super 467, 474, 682 A2d 378, 382 [1996], affd 552 Pa 275, 714 A2d 1027 [1998]; Power Constructors, Inc. v Taylor & Hintze, 960 P2d 20, 31 [Alaska 1998]; Smith v Haden, supra, 868 F Supp at 2-3). "

Now, after many years, we see the near end of the Lindenman case. Lindenman v Kreitzer
2013 NY Slip Op 02356  Decided on April 9, 2013  Appellate Division, First Department.  From what we can glean, defendant presented sufficient evidence to trigger a hearing on the collectibility of the hypothetical judgment.  Put another way, defendant shouldered its burden on the issue, and a hearing is now to be held. 

"The trial court’s award of $5,500,000 for past and future pain suffering deviated materially from reasonable compensation to the extent indicated. Although plaintiff Bruce Lindenman demonstrated that he suffered a brain injury, he did not undergo surgery and was able to continue to engage in activities such as driving and playing tennis (cf. Paek v city of New York, 28 AD3d 207 [1st Dept 2006], lv denied 8 NY3d 805 [2007]). The award for past and future loss of services deviated materially from reasonable compensation under the circumstances to the extent indicated (see Penn v Amchem Products, 85 AD3d 475 [1st Dept 2010]; Cutrone v New York City Transit Auth., 73 AD3d 462 [1st Dept 2010]. Given that this was a bench trial, we need not remand for a new trial on the issue of damages (see Chock Full O’Nuts Corp. v NRP LLC I, 47 AD3d 189 [1st Dept 2007]; Hernandez v Bentinck, 17 AD3d 532 [2d Dept 2005]).

The trial court should have granted defendant’s motion for a collectibility hearing following the verdict and award of damages. In a legal malpractice action, it is not until "plaintiff has proved the case within the case, including the value of the lost judgment, that the issue of collectibility may arise" (see Lindenman v Kreitzer, 7 AD3d 30, 34-35 [1st Dept 2004]). [*2]The value of the lost judgment was proved on June 25, 2009 when the trial court issued its finding on the apportionment of liability and the value of the damages, and, at that time, defendant’s request for a hearing on the issue of noncollectibility should have been granted (id.). "

Consolidation or a joint trial are subject to judicial discretion.  Judges are said to be the master of their calendar, and the Appellate Division rarely steps in and rearranges it.  Here, inCounty of Westchester v White Plains Ave., LLC 2013 NY Slip Op 02212  Decided on April 3, 2013
Appellate Division, Second Department consolidation is denied as unwieldy.
 

""Where common questions of law or fact exist, a motion to consolidate or for a joint trial pursuant to CPLR 602(a) should be granted absent a showing of prejudice to a substantial right by the party opposing the motion" (Perini Corp. v WDF, Inc., 33 AD3d 605, 606; see Brown v Cope Bestway Express, Inc., 99 AD3d 746, 747-748; Alizio v Perpignano, 78 AD3d 1087, 1088; Mas-Edwards v Ultimate Servs., Inc., 45 AD3d 540). Here, although the action to recover damages for breach of contract (hereinafter Action No. 1) and the action, inter alia, to recover damages for legal malpractice (hereinafter Action No. 2) involve a common question of fact, Action No. 2 involves numerous additional allegations of professional negligence that are irrelevant to Action No. 1. Furthermore, the issues and applicable legal principles in the respective actions are so dissimilar, and the trial may prove so unwieldy, that consolidation will result in jury confusion and prejudice the respondents’ right to a fair trial (see D’Abreau v American Bankers Ins. Co. of Fla., 261 AD2d 501, 502; 197 Merrick Rd. Corp. v 185 Merrick Rd. Assoc. Corp., 152 AD2d 551; Gouldsbury v Dan’s Supreme Supermarket, Inc., 138 AD2d 675, 676; Brown v Brooklyn Union Gas Co., 137 AD2d 479, 480). Accordingly, the Supreme Court properly denied the appellants’ motion pursuant to CPLR 602(a) to consolidate the actions."

Wiggins v Kopko   2013 NY Slip Op 02312  Decided on April 4, 2013   Appellate Division, Third Department  is a primer on attorney fees, contingent fees and what happens when the firm breaks up with the client and with itself.
 

"Kopko contends that plaintiff was discharged for cause due to alleged misconduct in his call to the client. However, without regard to whether the call constituted misconduct — which we do not decide — we agree with Supreme Court that the relevant inquiry is whether the partnership was discharged for cause. The client originally retained Wiggins & Masson — not plaintiff individually — and when Kopko later assumed primary responsibility for the malpractice litigation, he did so on behalf of the partnership or its predecessors, which continued to act as counsel of record in the malpractice action until Kopko was substituted shortly before the trial. Plaintiff was not counsel of record in the malpractice action, and so could not be discharged from that role (see generally Rodriguez v City of New York, 66 NY2d 825, 827-828 [1985])[FN3]. Further, we find no reason to disturb Supreme Court’s determination that neither the partnership nor Wiggins & Masson was discharged for cause. Essentially, the client testified that he had discharged plaintiff because he was angry about plaintiff’s "distasteful" telephone call. However, from the balance of the testimony, it is clear that the client was pleased with the prior services he had received from the partnership and its predecessors (see De Luccia v Village of Monroe, 180 AD2d at 899), specifically including those services rendered by Kopko prior to the substitution.

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]). "

New York has a very comprehensive attorney fee-dispute arbitration process, detailed under 22 NYCRR 137.  When does it apply, and how does a legal malpractice claim affect its application? 

Wenig Saltiel, LLP v Secord  2013 NY Slip Op 23104  Decided on March 29, 2013  Appellate Term, Second Department is a nicely detailed explanation.  Law firm was terminated with a letter stating that "defendants were discharging plaintiff "with cause" due to "acts of the firm relating to legal malpractice."  Law firm then sued former clients for fees.
 

"Plaintiff law firm commenced this action in September 2010 to recover legal fees from defendants, whom plaintiff had represented in a prior judicial proceeding. Plaintiff’s verified complaint contains the allegation that part 137 of the Rules of the Chief Administrator of the Courts (22 NYCRR 137.0 et seq.; hereinafter part 137), governing the "Fee Dispute Resolution Program," is inapplicable because the action falls within one of the exceptions to the program, i.e., the claim involves "substantial legal questions, including professional malpractice or misconduct" (Rules of Chief Admin of Cts [22 NYCRR] § 137.1 [b] [3]). Prior to serving an answer, defendants moved to dismiss the complaint, alleging, in an affidavit in support of the motion, that they had signed an August 27, 2009 retainer agreement with plaintiff, and that they [*2]had terminated their relationship with plaintiff on or about July 20, 2010 "for cause and malpractice." They further alleged that the retainer agreement did not include a provision advising them of their right to arbitrate fee disputes; that prior to initiating this action, plaintiff had not sent them notice of their right to arbitrate, pursuant to Rules of the Chief Administrator of the Courts (22 NYCRR) § 137.6; and that plaintiff had not alleged in its complaint compliance with that provision, as required by Rules of the Chief Administrator of the Courts (22 NYCRR) § 137.6 (b). Defendants further contended that plaintiff had excessively billed and overcharged them for the services provided.

In opposition to the motion, plaintiff noted that defendants’ letter dated July 20, 2010 stated that defendants were discharging plaintiff "with cause" due to "acts of the firm relating to legal malpractice," and that, therefore, because defendants’ claim involved "substantial legal questions, including professional malpractice or misconduct" (Rules of Chief Admin of Cts [22 NYCRR] § 137.1 [b] [3]), this action was excepted from the application of part 137. By order dated August 10, 2011, the Civil Court denied defendants’ motion to dismiss, finding that the issue of defendants’ termination of plaintiff based on plaintiff’s alleged legal malpractice was inextricably intertwined with the issue of the reasonableness of the legal fees sought by plaintiff. Accordingly, since defendants’ claim of legal malpractice could not be considered in fee dispute arbitration, defendants’ malpractice claim was a threshold issue to be determined in litigation before the fee dispute could be resolved. We affirm. "

""An attorney who institutes an action to recover a fee must allege in the complaint: (i) that the client received notice under this Part of the client’s right to pursue arbitration and did not file a timely request for arbitration; or (ii) that the dispute is not otherwise covered by this Part" (Rules of Chief Admin of Cts [22 NYCRR] § 137.6 [b]). Plaintiff contends that the complaint in this case properly alleges that the fee dispute is not covered by part 137 because there are substantial legal questions involved regarding plaintiff’s alleged legal malpractice."

"Where an attorney fails to comply with part 137’s pleading requirements, the appropriate remedy will generally be the dismissal of the complaint without prejudice to the commencement of a new action (see Kerner & Kerner v Dunham, 46 AD3d 372 [2007]; Herrick v Lyon, 7 AD3d 571 [2004]; Paikin v Tsirelman, 266 AD2d 136 [1999]; see also Hobson-Williams v Jackson, 10 Misc 3d 58 [App Term, 2d & 11th Jud Dists 2005]). In the instant case, however, the dismissal of the complaint is not warranted at this juncture, as plaintiff did comply with the pleading requirements of part 137 by alleging that part 137 was inapplicable because the claim involves "substantial legal questions, including professional malpractice or misconduct" (Rules of Chief Admin of Cts [22 NYCRR] § 137.1 [b] [3]). Defendants’ letter, stating that they were terminating the attorney-client relationship "for cause and malpractice," in conjunction with their affidavit in support of their motion to dismiss, which specifically references that letter, supports plaintiff’s contention that its pleading did not run afoul of the requirements of part 137. Under these circumstances, and as defendants did not conclusively establish that plaintiff has no cause of action (cf. Lorin v 501 Second St., LLC, 2 Misc 3d 646, 649 [Civ Ct, Kings County 2003]), their motion was properly denied. "

The essentials of legal malpractice litigation, including standing and ascertainable pecuniary loss come up over and over in the Appellate Division cases. Young v Quatela  2013 NY Slip Op 02243
Decided on April 3, 2013   Appellate Division, Second Department is an example.  Plaintiff’s father either suffered the loss or paid for it, and there is some question whether a pecuniary loss happened at all.  Result is is dismissal.
 

"The plaintiff commenced this action against the defendants, inter alia, to recover damages for legal malpractice. The defendants met their prima facie burden of establishing entitlement to judgment as a matter of law (see Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065, 1068). In opposition, the plaintiff failed to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324). As the plaintiff correctly concedes, nonpecuniary damages may not be recovered in an action alleging legal malpractice (see Dombrowski v Bulson, 19 NY3d 347, 349). Moreover, the plaintiff failed to raise a triable issue of fact as to whether he sustained any pecuniary damages, as the pecuniary losses described in the complaint were incurred by the plaintiff’s father, who is not a party to the action (see Radcliffe v Hofstra Univ., 200 AD2d 562). The plaintiff’s professed intention to repay his father for the expenses incurred on the plaintiff’s behalf amount to a moral obligation, which does not support a viable claim for damages (see Coyne v Campbell, 11 NY2d 372, 375). Accordingly, the Supreme Court properly granted the defendants’ motion for summary judgment dismissing the complaint.
SKELOS, J.P., LEVENTHAL, HALL and SGROI, JJ., concur. "