We are pleased to announce the publication of out Outside Counsel Column " Legal Malpractice in Matrimonial Litigation" from this week.

Fortress Credit Corp. suedDechert LLP, and lost  after Marc Dreier "proposed to plaintiffs that they participate in a short-term note program to finance the purchase of foreign real estate assets. The designated borrower would be Dreier’s clients, Solow Realty & Development Company, LLC, and affiliated companies controlled by real estate developer Sheldon Solow (collectively Solow Realty), and Dreier would be the guarantor. The parties executed two loans totaling $60 million in 2006, and, in 2008, Dreier proposed another $50 million loan transaction. For this last loan transaction, plaintiffs required Solow Realty and Dreier to retain independent counsel to issue a legal opinion as to whether Solow Realty and Dreier had carried out the necessary formalities to render the loan documents valid and binding on them. Ostensibly, Solow Realty and Dreier retained defendant for this purpose. Dreier furnished the necessary documents and information to defendant for the preparation of the opinion. All the documents to which Solow Realty was a signatory appeared to have been signed by Solow Realty, and some bore "what appeared to be" the signatures of Sheldon Solow and Solow Realty’s CEO.

Plaintiffs contend that they relied on defendant’s legal opinion that the loan documents were duly executed and delivered and that the loan was a valid and binding obligation on Solow Realty and Dreier. Plaintiffs wired $50 million to an attorney trust account set up at Dreier’s firm. Several months later, Dreier was arrested in connection with another fraud scheme, and plaintiffs discovered that Solow Realty had no knowledge of and was never a party to the loan transactions and that Dreier had falsified the documents and forged the Solow Realty signatures.

The allegation that defendant acted recklessly in failing to confirm that Solow Realty was in fact involved in the loan transaction is not a sufficient allegation of scienter, an element of the cause of action for fraud, especially since the factual allegations of this complaint do not establish that defendant made a knowingly false statement or that defendant was a knowing participant in the fraud (see LaSalle Natl. Bank v Ernst & Young, 285 AD2d 101, 110 [2001]). [*2]"

Now, in a second try, they sue Ruskin Moscou Faltischek P.C. 2012 NY Slip Op 03954
Decided on May 22, 2012  Appellate Division, First Department .  Although plaintiff’s attorney made many significant arguments, the AD found that it too should be dismissed.  "For the reasons stated in Fortress Credit Corp. v Dechert LLP (89 AD3d 615 [2011]) — a case involving virtually identical facts and allegations — the complaint in this action fails to state claims for fraud, legal malpractice, negligence, negligent misrepresentation, and breach of fiduciary duty. Plaintiffs have not distinguished this case from Dechert and there has been no change in the law to warrant reexamination of the issues (see NAMA Holdings, LLC v Greenberg Traurig, LLP, 92 AD3d 614 [2012]; compare George Campbell Painting v National Union Fire Ins. Co. of Pittsburgh, PA, 92 AD3d 104, 105-106 [2012]). "

Nachama Hirsch is the pro-se defendant in this attorney fee-legal malpractice case.  She was the wife in a divorce where the husband was able to take the couples assets into bankruptcy during the period between the grant of an order against him and the entry, and in doing so took millions away from the rightful wife.  No amount of litigation in Bankruptcy Court, or in Supreme Court ever cured the problem.  Wile lost.

Now, in Forchelli , Curto , Deegan, Schwartz, Mineo, Cohn & Terrana, LLP v Hirsch, 2012 NY Slip Op 31317(U)  May 4, 2012  Sup Ct, Nassau County  Docket Number: 8151-11  Judge: Steven M. Jaeger she has avoided a huge bankruptcy attorney fee, and may even be able to prove legal malpractice.

"With respect to the first counterclaim, based on alleged misconduct committed prior to 2007 in the
underlying Chapter 11 bankruptcy proceeding, issues of fact exist as to whether Forchelli’ s admittedly continuing, post-2007 bankruptcy representation, operated as toll of the limitations period within the meaning of the continuous representation doctrine (e. g., DeStaso v. Condon Resnick, LLP 90 AD3d 809 812; Putnam County Temple Jewish Center, Inc. v. Rhinebeck Sav. Bank 87 AD3d 1118; Howish v. Perrotta 84 AD3d 1312; Leon Petroleum, LLC v. Carl S. Levine
& Associates, pc. 80 AD3d 573 , 574 see generally, Zorn v. Gilbert 8 NY3d 933 934 (2007); McCoy v. Feinman 99 NY2d 295, 306 (2002J;Shumsky v. Eisenstein 96 NY2d 164, 167- 168 (2001); CPLR 214(6J). Notably, "(tJo dismiss a cause of action pursuant to CPLR 3211 (aJ(5) on the ground that it is barred by the applicable statute of limitations, a defendant bears the initial burden of
establishing, prima facie that the time in which to sue has expired" (DeStaso Condon Resnick, LLP, supra 90 AD3d 809 812).
Contrary to Forchelli’ s assertions (Gatto Aff. , ~~ 45-46), the conclusorily supported claim that its subsequent representation was entirely distinct because the bankruptcy proceeding was converted from a Chapter 11 to a Chapter 7 proceeding (Gatto Aff. , ~ 43; Gatto Reply Aff. , ~~ 33-37), does not establish its * 8] entitlement to judgment as a matter of law. Similarly, the defendant’ s over biling and related claims (as interposed in the second counterclaim) – are not amenable
to summary resolution at this essentially pre-discovery juncture of the action (see generally, Gelobter v. Fox 90 AD3d 829, 831; Melito Adolfen, P. C. v. Travelers Indem. Co. , supra 2008 WL 4308287, at 3 see also, Bank of America NA. v. Hillside Cycles, Inc. 89 AD3d 653 , 654; Valdivia v. Consolidated Resistance Co. of America, Inc. 54 AD3d 753 , 755). The Court notes that in
advancing several of its factual claims , Forchelli relies on inconclusive snippets of testimony culled from the defendant’ pro se deposition, which was taken in one of the prior dismissed Forchell non-payment actions (e. g.,  Gatto Aff. , ~~ 31  , 53; Reply Aff.  30)(cf, Baillargeon Kings County Waterproofing Corp. , 29 AD3d 838, 839). "

Legal malpractice cases are ubiquitous an pop up everywhere attorneys handle problems for people.  We’ve wondered how a firm like Dewey (and its predecessor LeBoeuf, Lamb) are handled at the highest levels, and how a firm such as Dewey implodes.  Was it a big big legal malpractice case brought by the State of Missouri?  Take a look at thisAM Law Daily article., by Sara Randazzso.

"On February 15, with Dewey & LeBoeuf entering what would prove to be its death spiral, the firm quietly settled a $3 billion malpractice suit filed against it in Missouri three years ago by state insurance regulators who accused predecessor firm LeBoeuf, Lamb, Greene & MacRae of participating in a conflict-riddled scheme to push General American Life Insurance Co.—at one time the Show Me State’s largest life insurer—into insolvency and, ultimately, the hands of fellow LeBoeuf Lamb client MetLife.

The abrupt dismissal of the case less than a month before it was to go to trial came amid a stream of partner departures and mounting concerns about the firm’s financial condition, but it is hard to know whether resolving it added to the fiscal woes that ultimately doomed Dewey to oblivion. That’s because, three months later, the settlement’s terms—and details about how much money the firm agreed to pay out—remain shrouded in secrecy.

The Missouri Department of Insurance’s Web site lists the settlement amounts paid by three other defendants targeted in related suits—accounting firm KPMG ($18 million), Morgan Stanley ($95 million), and Goldman Sachs (just over $100 million)—that have contributed to $1.425 billion in distributions that General American’s holding company had dispersed to some 300,000 policyholders as of September 2009. (A final distribution for an undisclosed amount is scheduled for later this year.)

No such information is available about the suit against Dewey. All the insurance department Web site says on the subject is that as of February 2012, "The Dewey & LeBoeuf case has been resolved." Contacted for comment by The Am Law Daily, insurance department spokesman Travis Ford declined to elaborate on that single sentence. A mid-February court filing simply says the case has been dismissed with prejudice by stipulation and that the parties must bear their own costs.

One person familiar with the settlement would only say the amount Dewey agreed to pay was less than KPMG’s $18 million settlement figure and should be covered by the firm’s professional liability policy. According to a second source familiar with the firm’s operations, that policy has a $300 million cap and a $2 million deductible, was brokered by AON, and was issued by Bar Insurance and Reinsurance, a company incorporated in Bermuda that provides professional liability insurance to an unspecified number of large law firms. Richard Howe, a Bar Insurance director and of counsel at Sullivan & Cromwell in New York, declined to confirm that Dewey is among the firms served by the insurance group."
 

Experts are often needed in litigation, and always in medical malpractice litigation. Med Mal cases are lost and it is sometimes thought that they are lost because of experts. Was the expert good enough? Did the expert "give" the departures?

In Healy v Finz & Finz, P.C. 2011 NY Slip Op 01616 Decided on March 1, 2011 Appellate Division, Second Department we see an awful choice foisted on parents. Mother has triplets, one is dying in utero. The two others are well but very small, and at risk for low birth weight. What to do?
 

One child was "born with periventricular leukomalacia, a form of cerebral palsy that renders him dependent on others for his basic needs. There is no dispute that the infant plaintiff’s condition resulted from him sharing a placenta with his deceased brother.

"The plaintiffs retained the defendant law firm, Finz & Finz, P.C. (hereinafter the firm), to represent them in the underlying medical malpractice action, which they commenced in 1997. The firm’s theory of the case was that the doctors should have delivered the surviving babies immediately after learning of Sean’s death, and that the delay caused Kevin’s injury. Most of the defendants in the medical malpractice action obtained summary judgment dismissing the complaint insofar as asserted against them, and the one defendant who went to trial obtained a directed verdict dismissing the case. The plaintiffs’ expert medical witnesses were unable to testify as to when Kevin’s injury occurred, acknowledging that it could have been immediately after Sean’s death. Thus, the Supreme Court held that the plaintiffs could not establish the proximate cause element of medical malpractice. This Court affirmed (see Healy v Spector, 287 AD2d 541). "

"The plaintiffs thereafter commenced the instant action alleging legal malpractice [*2]against the firm. The firm moved for summary judgment dismissing the complaint, submitting in support the affirmations of three physicians, in which they stated that Kevin’s injury was caused by Sean’s death. The plaintiffs submitted the affirmation of their own expert physician in response, who stated that, although Sean’s death caused Kevin’s injuries, the damage would have occurred over time. They also submitted the affirmation of an attorney, who stated that the firm failed to exercise the care and skill commonly exercised by a member of the legal profession, because its attorneys failed to find an appropriate medical expert. The Supreme Court denied the firm’s motion for summary judgment dismissing the complaint. We reverse"

""Attorneys are free to select among reasonable courses of action in prosecuting clients’ cases without thereby exposing themselves to liability for malpractice" (Iocovello v Weingrad & Weingrad, 4 AD3d 208, 208). Here, the firm established, prima facie, that its choice of experts in this case was a reasonable course of action, and the plaintiffs failed to raise a triable issue of fact in opposition. The conclusory assertion of the plaintiffs’ expert attorney—that the firm simply chose the wrong experts—is insufficient to sustain a cause of action alleging legal malpractice (see Dimond v Kazmierczuk & McGrath, 15 AD3d 526, 527). Moreover, the affirmation of the plaintiffs’ expert physician was itself conclusory and was, thus, insufficient to raise a triable issue of fact in opposition to the motion for summary judgment (see Brady v Bisogno & Meyerson, 32 AD3d 410). As the firm demonstrated that it could not have proven proximate cause in the underlying medical malpractice action, and as the plaintiffs failed to raise a triable issue of fact in opposition, the Supreme Court should have granted the firm’s motion for summary judgment dismissing the complaint (see generally Zuckerman v City of New York, 49 NY2d 557, 562). "
 

Plaintiff hires defendant attorney to represent plaintiff when he is sued.  The underlying case seems to be a construction accident matter.  Did plaintiff lose the case because defendant failed to make certain arguments, or was defendant prevented from making those arguments by his client?  We can’t really tell from the decision, but it seems that defendant undercut his own case here.’

Affordable Community, Inc. v Simon   2012 NY Slip Op 03789   Decided on May 15, 2012
Appellate Division, Second Department  tells us:  "The defendant here is an attorney who represented the plaintiff in a lawsuit asserted against the plaintiff by an individual who was injured at a construction site owned by the plaintiff. In this legal malpractice action, the defendant alleged that the plaintiff limited him to presenting only certain unsuccessful defense arguments in the course of representation. However, the defendant’s own evidence raised a triable issue of fact regarding this allegation. Consequently, there remain triable issues of fact as to whether the defendant negligently failed to present viable defenses in the underlying action and if so, whether, as a result of such failure, the plaintiff incurred liability for damages in that lawsuit. Accordingly, the defendant’s submissions in support of his motion for [*2]summary judgment did not establish, prima facie, that the plaintiff will be unable to prove the elements of legal malpractice and, thus, he failed to demonstrate his entitlement to judgment as a matter of law (see Mueller v Fruchter, 71 AD3d 650, 651; Rosenstrauss v Jacobs & Jacobs, 56 AD3d 453, 454). In light of our determination, we need not address the sufficiency of the plaintiff’s opposition papers (see Scott v Gresio, 90 AD3d 736, 737; see generally Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853). "

Truebright Co., Ltd. v Lester ; 2011 NY Slip Op 04235 ; ;Appellate Division, Second Department is yet another example of a lost legal malpractice case, but not based upon the innocence or non-departure of the attorney. In fact, just as in a recent case dismissed because the statute of limitations had passed on a case the attorney failed to file, here, there was a lack of capacity to sue. Was it a bankruptcy filing that killed the capacity? Was it a sale of the business to another that killed the capacity? We do not know.
 

What we do know is:

"Under the circumstances, the Supreme Court did not improvidently exercise its discretion when it, in effect, granted the defendant’s motion for leave to amend his answer, as the proposed amendment was neither palpably insufficient nor patently devoid of merit, and there was no evidence that it would prejudice or surprise the plaintiffs (see CPLR 3025 [b]; Matter of Roberts v Borg, 35 AD3d 617, 618; Public Adm’r of Kings County v Hossain Constr. Corp., 27 AD3d 714, 716). To the extent that the plaintiffs "wish[ ] to test the merits of the proposed added . . . defense, [they] may . . . move for summary judgment upon a proper showing" (Lucido v Mancuso, 49 AD3d 220, 229). "
 

Attorney fee disputes often blossom into legal malpractice cases, although Stephan B. Gleich & Assoc. v Gritsipis ; 2011 NY Slip Op 05483 ;  Appellate Division, Second Department is not one of these. Nevertheless, it is one of the longest attorney fee disputes in memory. The case itself started in 1993 as the AD tells us:
 

"An affidavit of service reflects service upon the defendant on September 7, 1993, by delivery of a copy of the summons with notice to a person of suitable age and discretion named Evelyn Monterosa at the defendant’s place of business.

A clerk’s judgment was thereafter executed on February 7, 1994, for the requested sum of $66,875.41, plus statutory costs and disbursements in the sum of $370, for a total judgment in the sum of $67,245.41 (hereinafter the 1994 judgment).

The plaintiff commenced a second action against the defendant on March 17, 2009, by the filing of a summons and complaint in the Supreme Court, Nassau County, under Index No. 09-006753 (hereinafter the 2009 complaint). The plaintiff alleged that no portion of the 1994 judgment had been satisfied, that more than 10 years had passed since the judgment was docketed, and that the judgment should be renewed pursuant to CPLR 5014(1). The defendant answered the 2009 complaint, asserted affirmative defenses, and separately moved under the index number of the 1993 action, inter alia, to vacate the 1994 judgment.
 

Contrary to the defendant’s contention, the plaintiff properly obtained jurisdiction over him under CPLR 308(2). The affidavit of the plaintiff’s process server constitutes prima facie evidence of proper service (see Matter of Perskin v Bassaragh, 73 AD3d 1073; Prospect Park Mgt., LLC v Beatty, 73 AD3d 885; Pezolano v Incorporated City of Glen Cove, 71 AD3d 970, 971; Cavalry Portfolio Servs., LLC v Reisman, 55 AD3d 524, 525; Jefferson v Netusil, 44 AD3d 621). The defendant’s failure to recall the person of suitable age and discretion who was served, without specific facts of the identity of his employees, employment records, payroll records, or affidavits from others, fails to rebut the process server’s affidavit (see Interlink Metals & Chems. v Kazdan, 222 AD2d 55, 56; see also Pezolano v Incorporated City of Glen Cove, 71 AD3d at 971; Sturino v Nino Tripicchio & Son Landscaping, 65 AD3d 1327; Silverman v Deutsch, 283 AD2d 478, 478-479). Thus, there is an insufficient basis to vacate the 1994 judgment for lack of jurisdiction under CPLR 5015(a)(4).

Clerks’ judgments may nevertheless be vacated pursuant to CPLR 5015(a)(1) where the [*3]defendant demonstrates both a reasonable excuse for the default and a potentially meritorious defense to the action (see Verde Elec. Corp. v Federal Ins. Co., 50 AD3d 672, 672-673; see generally Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141; Gray v B. R. Trucking Co., 59 NY2d 649, 650; Yao Ping Tang v Grand Estate, LLC, 77 AD3d 822; Zanani v Schvimmer, 75 AD3d 546, 547; Li Gang Ma v Hong Guang Hu, 54 AD3d 312, 313). The defendant failed to establish a reasonable excuse for his default since the only excuse he proffered was that he was not served with process. Moreover, we agree with the Supreme Court that the defendant also failed to establish a potentially meritorious defense to the action. Contrary to the defendant’s contention that the legal services were rendered solely to his corporation, the documentary evidence, including the invoices for legal fees incurred and the pleadings in the earlier landlord-tenant litigations, establish that the defendant was an individually named party in those actions who received individualized legal services. Other issues that the defendant raises as to the invoices themselves speak to the specific amount of damages, and not to liability or to his default in the 1993 action.

III. The Clerk’s Judgment Under CPLR 3215(a) The defendant’s argument that the clerk of the court lacked authority to enter a judgment is raised for the first time on appeal. However, where, as here, an argument presents an issue of law appearing on the face of the record which could not have been avoided if raised at the proper juncture, it may be considered by an appellate court (see Parry v Murphy, 79 AD3d 713; Verde Elec. Corp. v Federal Ins. Co., 50 AD3d at 673; Chrostowski v Chow, 37 AD3d 638, 639; Beepat v James, 303 AD2d 345, 346; Hanna v Ford Motor Co., 252 AD2d 478). The nature of this appeal warrants the exercise of our discretion in reaching on its merits the issue of the propriety of the clerk’s judgment. "