we’re proud to announce that our article on the Attorney Judgment Rule was published by the New York Law Journal today.

"Medicine and law have ancient parallel histories. Each practices self-regulation, and each has developed deep and extensive internal rules of professional conduct. Both have a tentative claim as one of the world’s oldest professions. Each requires extensive education and testing to join a prehistoric and socially revered cadre. Both require an extensive apprenticeship before acceptance into the guild.

Beyond the obvious ancient quality of the professions, there is a similar intellectual bias evident. Both claim that their decision-making apparatus is unique, internally regulated and virtually unassailable.

Medicine and law share a concept unknown to other professions: the "judgment rule." In medicine, it is aptly summed up in the well-known medical aphorism originally attributed to Armand Trousseau (1801-1867): "Medicine is an art and not a science." For lawyers, it was most forcefully stated by the Court of Appeals in Rosner v. Paley, 65 NY2d 736 (1985). A "mere error of judgment" need not rise to the level of malpractice. When several other alternatives might have been pursued, "selection of one among several reasonable courses of action does not constitute malpractice." For this concept the Court of Appeals looked back to 1897.

Byrnes v. Palmer, 18 AD 1 (2d Dept. 1897), was a Second Department case decided by Judge Edgar M. Cullen, later chief justice of the Court of Appeals, more than 100 years ago. In a conveyancing case the court held that "It is undoubtedly true that an attorney is only bound to exercise the ordinary reasonable skill and knowledge of his profession, and is not liable for every error of judgment or opinion as to the law." Byrnes at 5.

Byrnes itself looked further backward to Montriou v. Jefferys (2 Car. & P. 113 (1825)). There, Chief Judge Charles Abbot, 1st Baron Tenterden of England, stated that "No attorney is bound to know all of the law; God forbid that it should be imagined that an attorney, or a counsel, or even a judge, is bound to know all the law, or that an attorney is to lose his fair recompense on account of an error, being such an error as a cautions man might fall into." "In a litigation a lawyer is well warranted in taking chances. To some extent litigation is a game of chance. The conduct of a lawsuit involves questions of judgment and discretion as to which even the most distinguished members of the profession may differ. They often present subtle and doubtful questions of law. If in such cases a lawyer errs on a question not elementary or conclusively settled by authority, that error is one of judgment for which he is not liable."
 

Plaintiff is the administratrix of decedent’s estate.  This is a very sad story.  Decedent entered United Presbyterian Residence after a stroke, and was the victim of a most avoidable problem:  pressure ulcer, or more commonly, a bedsore.  It eventually, and after much suffering, killed her.  Her family hired an attorney to sue the residence, and the attorney failed to start the case.  Later the attorney was disbarred when he was convicted of a felony.

Corsiatto v Maddalone  2013 NY Slip Op 30553(U)  March 13, 2013  Supreme Court, Suffolk County  Docket Number: 2009-14305  Judge: John J.J. Jones Jr is mostly the story of bad medical care.  It was an inquest, so we guess that there was no legal malpractice insurance.  It may have been a Pyrrhic or a technical victory.

"The medical record indicates that although a wound care specialist was ordered, the decedent was never seen. No order was written for culture of the wound at the decubitus site; no orders were made to obtain blood cultures, both departures from good and accepted medical standards. According to Knieste, the poor management of the decedent’s Stage IV pressure sore was contrary to good and accepted medical practice and a contributing cause of the formation of a Stage IV pressure ulcer, the decedent’s continued suffering, and death. The decedent’s discharge note contained a diagnosis of sepsis."

"The issue of causation has been resolved in the plaintiffs favor due to the defendant’s default, that is, it is established that the plaintiff would have prevailed in the underlying action against UPR. However, it is not established that the plaintiff would have prevailed on all three claims: medical malpractice, negligence and the statutory claim under Public Health Law ij 2801 – d(1). At least one court has addressed the distinction between medical malpractice and negligence claims on the one hand, and a statutory cause of action under the Public Health Law on the other. See Butler v. Shorefront Jewish Geriatric Center, 33 Misc.3d 686, 693, 932 N.Y.S.2d 672 (Kings Sup. Ct. 2011)."

"The court is obliged to award an amount in compensatory damages that does not materially deviate from what would be considered “reasonable compensation” under the Circumstances given the plaintiffs injuries (CPLR 5501 (c); Slzurgan by Shurgan v. Tedesco, 179 A.D.2d 805, 578 N.Y.S.2d 658 [2d Dept.19921). Although the plaintiff assented to conduct the inquest “on papers”, the court has not been provided with any comparable awards or verdicts for similar injuries of comparable duration to assist the court’s determination of what can be considered reasonable compensation for the decedent’s pain and suffering. The court has found several cases where patients have endured pressure sores similar to that endured by the decedent. For example, in Parson v. Interfaith Medical Center, a jury verdict of $1,000,000 was reduced to $400,000 to compensate the plaintiffs decedent for the mismanagement of her numerous bedsores that were a cause of her death (Parson v. Interfaith Medical Center, 267 A.D.2d 367, 700 N.Y.S.2d 224 [2d Dept. 1999).

Client has a really horrible situation in her apartment.  First there is a flood of raw sewerage. She hires law firm 1 to sue.  They commence an action.  Then, she has a water flood from the neighbor upstairs.  She hires law firm 2 to handle that case.  They commence an action.  Law firm 2 settles the case for a big number.  A release is signed, and there the trouble begins.

in Strougo & Blum, Esqs. v Zalman & Schnurman, Esqs, 2013 NY Slip Op 30559(U) March 15, 2013Supreme Court, New York County  Docket Number: 603665/09  Judge: Eileen A. Rakower has to decide what happens after the release in case 2 ends case 1.  Was the law firm in case 1 injured by the acts of law firm 2?

"Defendant states that, in or about December 2006, a mediation was held in the 2004 Hixon Action before JAMS, the purpose of which was to resolve the claims Ms. Hixon asserted in the 2004 Hixon Action. As a result of the mediation, a settlement agreement was reached, whereby Ms. Hixon agreed to settle her action for payment in the amount of $1,450,000. On December 7,2006, Ms. Hixon executed a General Release in the 2004 Hixon Action, which released 12-14, Goodman, Inc., and the Adams’ from:
all actions, causes of action, suits . . . specifically with respect to damages that RELEASOR  sustained which were the subject of a lawsuit pending in the Supreme Court. . .

The defendants in the 2002 Hixon Action thereafter moved to amend their answer to add the release as an affirmative defense, and to dismiss the 2002 Hixon Action on collateral estoppel and res judicata grounds. By Order entered August 12, 2009, Judge Jose A. Padilla, Jr. granted all aspects of the motion and dismissed as to all defendants2 Thereafter, plaintiff brought the instant action against Defendant alleging that Defendant fraudulently induced Ms. Hixon to sign the General Release by reassuring her that it would not effect the 2002 Hixon Action. As such, plaintiff
alleges, Defendant tortiously interfered with the retainer agreement between plaintiff and Ms. Hixon, and alleges civil conspiracy with the former co-defendants by way of interference with plaintiffs retainer agreement.

“Tortious interference with contract requires the existence of a valid contract between the plaintiff and a third party, defendant’s knowledge of that contract, defendant’s intentional procurement of the third-party‘s breach of the contract without justification,’ actual breach of the contract, and damages resulting therefkom” (Havana Cent. NY2 LLC v. Lunney ’s Pub, Inc., 2007 N Y Slip Op 10509, * 5 [ 1 st Dept. 2007), citing Lama Holding Co, v Smith Barney, 88 N.Y.2d 413,424 [ 19961).
A retainer agreement between an attorney and a client is terminable at will because the client has an “absolute right . . to terminate the attorney client relationship at any time without cause . . .” (Demov, Morris, Levin & Shein v. Glantz, 53 NY2d 553,556-557[ 198 13). When alleging tortious interference with a contract that is terminable at will, plaintiff must also show that the alleged interference was achieved through “wrongful means,” such as fraudulent misrepresentations (see
Guard-Life Corporation v, S. Parker Hardware Manufacturing Corp., 50 NY2d 183).

Defendant has made a prima facie showing of entitlement of summary judgment. Defendant submits the affidavit of Benjamin Zalman. Mr. Zalman states that the 2006 General Release which Ms. Hixon executed expressly states that the claims being released are those with respect to the 2004 Hixon Action, not the 2002 Hixon Action. Mr. Zalman states that at all times Defendant represented to Ms. Hixon that her execution of the Release would only serve to release the defendants from the 2004 Hixon Action and that at no time did Defendant intend to defraud
Defendant or interfere with the retainer agreement. In opposition, Plaintiff fails to raise a triable issue of fact. Plaintiff submits only the affirmation of Robert I. Strougo, which annexes previous orders of the Court on former defendants’ motions to dismiss, a copy of the 2006 General Release, Judge Padilla’s 2009 decision dismissing the 2002 Hixon Action, and contends without any merit that these orders preclude summary judgment. Nor does Plaintiff contend that
Defendant’s motion is premature or that Plaintiff needs to conduct discovery in order
to allow it to obtain facts to oppose Defendant’s motion."

Jurisdiction in US District Court is a serious matter, and may be based (in general)  upon diversity or upon federal question jurisdiction.  When a legal malpractice case is based upon some uniquely federal issue, ERISA or a FDA issue or a patent issue, does that allow the action to be brought in District Court?  We’ve argued in the past that mere incantation of the word "patent" does not allow a defendant to remove the case to District Court.  In Gunn v. Minton, 133 S.Ct. 1059 (Feb. 20, 2013) the US Supreme Court agreed. 

Well, perhaps it did not agree with us, but an article in today’s NYLJ talks about the decision.  Scheinfeld and Bagley write that "The Supreme Court, however, held unanimously in Gunn, that state courts indeed may hear legal malpractice claims involving federal patent questions, reversing the Texas Supreme Court’s decision that federal courts had exclusive jurisdiction." 

"Gunn originated in Texas state court, as the fallout from an underlying patent litigation in which respondent Vernon Minton sued Nasdaq for patent infringement in the Eastern District of Texas. That action was dismissed when the court there invalidated the patent in suit for violating the on-sale bar of 35 U.S.C. 102(b). Allegedly, the lawyers representing Minton neglected to assert the experimental use exception to the on-sale bar, and the decision was upheld on appeal.

Minton responded by filing a malpractice suit in Texas state court, alleging that the lawyer’s negligent failure to timely raise the experimental use exception to the on-sale bar cost him the opportunity of winning his federal patent infringement litigation. The trial court dismissed the action for lack of evidence, and Minton appealed to the state appellate court in Fort Worth. While the appeal was pending, the U.S. Court of Appeals for the Federal Circuit issued its opinions in Air Measurement v. Akin Gump1 and Immunocept v. Fulbright,2 holding that when a state-law malpractice case arises from a substantive issue of patent law, federal courts have jurisdiction over such claims. Minton then moved to dismiss his own case for lack of subject matter jurisdiction, hoping to re-file the malpractice suit in federal court. The appeals court was unmoved, however, and instead affirmed the trial court’s ruling dismissing the suit with prejudice.

On appeal to the Texas Supreme Court, Minton prevailed: The court held that, purportedly under U.S. Supreme Court precedent, Minton’s malpractice case belonged exclusively in federal court, and granted the motion to dismiss. The court agreed that because his legal malpractice claim was based on an alleged error in a patent case, it "aris[es] under" federal patent law for purposes of 28 U.S.C. §1338(a). And because, under §1338(a), no "state court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents," the Texas court lacked subject matter jurisdiction to decide the case.
 

The Supreme Court disagreed, relying on its precedent set in Grable & Sons Metal Products v. Darve Engineering & Mfg., 545 U.S. 308, 314 (2005):

Does the "state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities?" Grable, 545 U.S., at 314, 125 S.Ct. 2363. That is, federal jurisdiction over a state law claim will lie if a federal issue is (1) necessarily raided, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress. Where all four of these requirements are met we held, jurisdiction is proper because there is a "serious federal interest in claiming the advantages thought to be inherent in a federal forum," which can be vindicated without disrupting Congress’s intended division of labor between state and federal courts.

Id., at 313-314, 125 S.Ct. 2363.

Applying Grable’s inquiry, the Supreme Court found that this particular legal malpractice claim does not "arise" under federal patent law and, indeed, state legal malpractice claims based on underlying patent matters will "rarely, if ever," arise under federal patent law for purposes of 1338(a).

In Minton’s case, although a federal patent question (i.e., whether the experimental use exception to an on-sale bar factually applied) was "necessarily raised," and "actually disputed," the federal issue, the court concluded, was "not substantial in the relevant sense:"

As our past cases show, however, it is not enough that the federal issue be significant to the particular parties in the immediate suit; that will always be true when the state claim "necessarily raises[s]" a disputed federal issue, as Grable separately requires. The substantiality inquiry under Grable looks instead to the importance of the issue to the federal system as a whole. [emphasis in original]"
 

Hand in hand with legal malpractice cases are attorney fee cases.  We’ve commented that attorney fee disputes are of  biblical proportion, and have existed as long.  Today’s New York Law Journal reports that "DLA Piper Emails Reveal Firm Overbilled, Former Client Says"

In an article written by Christine Simmons, she reports that internal e-mails from DLA Piper are being used in an attorney fee dispute, and are said to show intentional and gleeful churning of a bankruptcy representation bill.  "According to court papers, Thomson replied to Eisenegger and Johnson: "What was our estimate? But Tim [Walsh] brought Vince [Roldan] [two other DLA Piper attorneys working on POA] in to work on the objection for whatever reason, and now Vince has random people working full time on random research projects in standard ‘churn that bill, baby!’ mode. That bill shall know no limits."

Thomson, who no longer works at DLA Piper, could not be reached for comment.

Roldan was a senior associate at DLA Piper who now practices at Vandenberg & Feliu, according to the firm’s website. He did not return a call for comment.

Eisenegger, Johnson and Walsh are now all partners at McDermott Will & Emery. They did not return calls for comment. McDermott spokesman Christopher Rieck declined to comment.

Victor claims in his papers that Eisenegger, Thomson and Johnson continue the email thread, "with each joking about how many attorneys were over-staffed on the POA file and how little work those attorneys actually accomplished."

According to the attached exhibits, Thomson writes to Eisenegger and Johnson, "DLA seems to love to low ball the bills and with the number of bodies being thrown at this thing, it’s going to stay stupidly high and with the absurd litigation POA has been in for years, it does have lots of wrinkles."

Johnson allegedly replied: "Didn’t you use 3 associates to prepare for a first day hearing where you filed 3 documents?"

Thomson allegedly responded to Johnson and Eisenegger, "And it took all of them 4 days to write those motions while I did cash collateral and talked to the client and learned the facts. Perhaps if we paid more money we’d have more skilled associates."

According to the court exhibits, Johnson also allegedly said, "It’s a Thomson project, he goes full time on whatever debtor case he has running. Full time, 2 days a week.""

It’s rare that the Appellate Division looks back and says that its own decisions were "simply wrong."  Here, in Goodwin v Pretorius  2013 NY Slip Op 01931   March 22, 2013  Appellate Division, Fourth Department   Scudder, P.J., the Court does it twice.
 

"First, as defendants correctly conceded at oral argument of this appeal, General Municipal Law § 50-e does not require service of a notice of claim on the Employee Defendants as a condition precedent to the commencement of this action. ECMCC is a public benefit corporation (see Public Authorities Law § 3628 et seq.) and, therefore, it is undisputed that the provisions of General Municipal Law § 50-e apply (see Public Authorities Law § 3641 [1] [a]; see e.g. Stanfield v Nohejl, 182 AD2d 1138, 1138). General Municipal Law § 50-e (1) (b) provides, in pertinent part, that

"[s]ervice of the notice of claim upon an . . . employee of a public corporation shall not be a condition precedent to the commencement of an action or special proceeding against such person.

We thus note that, to the extent that our prior decision in Rew v County of Niagara (73 AD3d 1463, 1464) suggests that service of a notice of claim upon an employee of a public corporation is a condition precedent to commencement of the action against such employee, that decision is no longer to be followed.

Second, defendants contend that, although service of the notice of claim on the Employee Defendants was not required, plaintiff was nevertheless required to name those individual defendants in the notice of claim as a condition precedent to the commencement of an action against them. Despite precedent supporting that contention, we agree with Supreme Court that there is no such requirement.

While stare decisis is the preferred course, that doctrine "does not enjoin departure from precedent or preclude the overruling of earlier decisions" (Matter of Simonson v Cahn, 27 NY2d 1, 3; see Dufel v Green, 198 AD2d 640, 640-641, affd 84 NY2d 795).Although "[p]recedents involving statutory interpretation are entitled to great stability" (People v Hobson, 39 NY2d 479, 489; see Matter of Chalachan v City of Binghamton, 81 AD2d 973, 974, affd 55 NY2d 989), we conclude that the courts have misapplied or misunderstood the law in creating, by judicial fiat, a requirement for notices of claim that goes beyond those requirements set forth in the statute. If the legislature had intended that there be a requirement that the individual employees be named in the notices of claim, it could easily have created such a requirement. Indeed, the absence of such a requirement has previously been noted (see Verponi v City of New York, 31 Misc 3d 1230 [A], 2011 NY Slip Op 50908 [U], *5). It is a well-settled rule of statutory construction that, "where as here the statute describes the particular situations in which it is to apply, an irrefutable inference must be drawn that what is omitted or not included was intended to be omitted or excluded’ " (Patrolmen’s Benevolent Assn. of City of N.Y. v City of New York, 41 NY2d 205, 208-209, quoting McKinney’s Cons Laws of NY, Book 1, Statutes, § 240). Inasmuch as the notice of claim requirements are "in derogation of [a] plaintiff’s common-law rights," the statute creating such a requirement should be strictly construed in the plaintiff’s favor (Sandak, 308 NY at 230). "

Plaintiff sues for negligence in the preparation, filing and work on a trade dress application, and is then sued for fees.  Settlement of the fee dispute ensued.  Was this settlement of all claims?  Of interest is the AD’s comment in Pure Power Boot Camp, Inc. v Fross Zelnick Lehrman & Zissu, P.C.   2013 NY Slip Op 01920   Decided on March 21, 2013   Appellate Division, First Department 
 that the lack of a release is not dispositive of whether there is a release.

"Defendant failed to establish that plaintiff’s legal malpractice action is barred by an agreement, purportedly entered into in connection with the settlement of a legal fee dispute, to release the firm from all claims. The parties agreed to settle their legal fee dispute for $5,000, and $5,000 was paid to defendant. At issue is the scope of the settlement and whether the settlement was intended to include a general release of all claims against defendant. While the absence of an executed general release is not necessarily dispositive, defendant failed to establish that the parties agreed to execute the release and intended to be bound by it (see Kowalchuk v Stroup, 61 AD3d 118, 121 [1st Dept 2009]). Defendant also failed to establish that it was not negligent in preparing, filing and amending a trade dress application, since the mere fact that the [*2]application was accepted by the U.S. Patent and Trademark Office is not evidence of a lack of negligence. "

This must have been a highly contentious legal malpractice  case, with the Court showing its displeasure to both attorneys.  A sanction of $10,000 on defendant pro-se attorney is unusual; a sanction on both sides even more so

Selletti v Liotti    2013 NY Slip Op 01816   Decided on March 20, 2013   Appellate Division, Second Department ended with defendant being given a $ 10,000 sanction, and with plaintiff’s attorney being given a $ 2500 sanction.  It ended with $10,000 on each.
 

"ORDERED that the order is modified, on the facts and in the exercise of discretion, by deleting the provision thereof granting that branch of the defendant’s motion which was pursuant to 22 NYCRR 130-1.1 to impose a sanction upon the nonparty Jeffrey Levitt only to the extent of directing Jeffrey Levitt to pay the sum of $2,500 to the Lawyers’ Fund for Client Protection, and substituting therefor a provision granting that branch of the defendant’s motion to the extent of directing Jeffrey Levitt to pay the sum of $10,000 to the Lawyers’ Fund for Client Protection; as so modified, the order is affirmed insofar as appealed and cross-appealed from, without costs or disbursements.

The Supreme Court providently exercised its discretion in granting the plaintiff’s cross motion pursuant to 22 NYCRR 130-1.1 to impose a sanction upon the defendant in the sum of $10,000 (see 22 NYCRR 130-1.1[a], [c]; Grossman v New York Life Ins. Co., 90 AD3d 990, 992). Contrary to the defendant’s contention, since the plaintiff expressly requested the subject relief in [*2]his cross motion papers, and the defendant was afforded an opportunity to be heard and to oppose the cross motion, a hearing was not required (see 22 NYCRR 130-1.1[d]; Matter of Minister, Elders & Deacons of Refm. Prot. Dutch Church of City of N.Y. v 198 Broadway, 76 NY2d 411, 413 n; Matter of Nazario v Ciafone, 65 AD3d 1240, 1241). Although the Supreme Court did not set forth "the reasons why the court found the amount . . . imposed to be appropriate" (22 NYCRR 130-1.2), we find that the sum imposed upon the defendant was appropriate in light of his conduct (see Schwab v Phillips, 78 AD3d 1036, 1037; see also Bernadette Panzella, P.C. v DeSantis, 36 AD3d 734, 736).

However, the Supreme Court improvidently exercised its discretion in granting that branch of the defendant’s motion which was pursuant to 22 NYCRR 130-1.1 to impose a sanction upon the plaintiff’s attorney, the nonparty Jeffrey Levitt, only to the extent of directing Levitt to pay the sum of $2,500 to the Lawyers’ Fund for Client Protection. Under the circumstances of this case, the court should have granted that branch of the defendant’s motion to the extent of directing Levitt to pay the sum of $10,000 to the Lawyers’ Fund for Client Protection (see generally Commissioners of State Ins. Fund v Kernell, 91 AD3d 811). "