In this upstate 4th Department grievance/disciplinary case we see the effect an attorney can have on the lives of his clients.  Plaintiffs’ house burns down, and they retain this attorney to represent them.  He waits until the very last day to file, and then allows the case to be dismissed on discovery shortcomings.  The homeowners sue for legal malpractice and Judiciary Law 487, and win on default.  "Respondent did not contest the malpractice action, and a judgment was entered awarding the homeowners compensatory damages in the amount of $226,000 and punitive damages in the amount of $700,180.82. Respondent failed to appear in response to a subpoena for a judgment debtor examination and failed to respond to an order to show cause brought by the homeowners seeking an order finding him in contempt." 

Respondent raised as affirmative defenses and in mitigation of the misconduct that he began suffering from severe depression in 2005, but ignored advice to seek mental health treatment until 2007; that he did not contest the legal malpractice judgment, including the finding of intentional deceit, because he had been advised by a pro bono attorney to allow the homeowners to obtain a default judgment against him to enable them to recover damages from his malpractice insurer and he was unaware that they were seeking treble damages; and that he did not respond to the subsequent judgment debtor subpoena or order to show cause for contempt because he mistakenly believed that an agreement had been reached with the homeowners pursuant to which the default judgment would not be executed against respondent in his individual capacity. "

In determining an appropriate sanction, we have considered respondent’s previously unblemished record during his 22 years of practicing law and his expression of remorse. Respondent, however, has committed serious misconduct that caused harm to his clients. In particular, we have considered that respondent’s neglect of the fire insurance matter and his deceit in trying to conceal that neglect deprived the homeowners of an opportunity to retain new counsel who could have acted in a timely manner to preserve their claim for damages. Accordingly, after consideration of all of the factors in this matter, we conclude that respondent should be suspended for three years and until further order of the Court. "
 

Sub-prime mortgages and mortgage litigation in general has expanded if not exploded.  New rules, new fees, limitations and new court parts have all followed in the wake.  Borrowers who lose at the mortgage litigation stage then look to legal malpractice as a follow up.  in Jay v. Gallagher
2011 NY Slip Op 32563(U); September 20, 2011; Supreme Court, Nassau County; Docket Number: 323/11; Judge: Karen V. Murphy we see one example.

Plaintiff borrowed and then defaulted on mortgage 1.  Plaintiff e-negotiated and then defaulted on mortgage 2.  Plaintiff filed for bankruptcy, had the bankruptcy dismissed, and then settled the foreclosure litigation.  As part of that litigation the target attorneys moved for and received a charging and retaining lien.

Plaintiff then sued, pro se for legal malpractice.  She loses, for reasons of collateral estoppel and res judicata.

"Collateral estoppel bars relitigation of an issue that has already been decided in prior action, and where the part against whom the estoppel is being asserted had a full and fair opportunity to contest the issue in the prior proceeding (Tydings v. Greenfield, Stein & Senior, LLP 11 N.Y.3d 195, 199, 897 N. 2d 1044, 868 N. S.2d 563 (2008); Jeffreys v. Grifn 1 N.Y.3d 34, 801 N. 2d 404, 769 N. 2d 184 (2003); Schwartz v. Public Administrator 24 N. 2d 65 , 246 N. 2d 725 298 N. S.2d 955 (1969)).
Pursuant to this doctrine, a legal malpractice action generally will be barred by the defendant’ s ‘ successful prosecution of a prior action to recover fees for the same legal services which the (plaintiff) presently allege(s) were negligently performed”’ (York v. Landa 57 A.D.3d 980 981 , 870 N. 2d 459 (2d Dept., 2008) citing Pirog v. Ingber, 203 2d 348, 348-349, 609 N. 2d 675 (2d Dept., 1994)). Specifically, a charging lien entered in an underlying action against plaintiff in a legal malpractice action bars plaintiff from asserting the malpractice claim. By fixing the value of the defendant attorney services, the court necessarily concludes that there is no malpractice. (see Lusk v. Weinstein 85 A.D.3d 445, 924 N. 2d 91 (1 st Dept. , 2011); Wallach v. Unger Stutman, LLP, 48 D.3d 360, 853 N. 2d 295 (2d Dept., 2008); Afsharimehr v. Barer 303 A. 2d 432 755 N. 2d 888 (2d Dept., 2003); Lefkowitz v. Schulte, Roth Zabel 279 A. 2d 457 718 N. 2d 859 (2d Dept. , 2001))."

We sometimes ponder whether attorneys are held to a lesser standard in Legal Malpractice, or to put it a different way, are plaintiffs in legal malpractice forced to overcome sympathy for attorneys?  It cannot be argued that there is a fourth element in legal malpractice – the "but for" rule – that exists no where else.  But, let’s look at a recent case.

In Putnam County Temple & Jewish Ctr., Inc. v Rhinebeck Sav. Bank ; 2011 NY Slip Op 06829
Decided on September 27, 2011 ; Appellate Division, Second Department  Supreme Court dismissed the Temple’s complaint.  The Appellate Division reversed most of the dismissals.  Did Supreme Court just have it wrong, or does this reflect an institutional bias for attorneys?  You decide.
 

"The Supreme Court held that the attorneys were entitled to dismissal of the eighth cause of action to recover damages for legal malpractice insofar as asserted against them on the grounds that the applicable statutes of limitations had run, the attorneys had presented documentary evidence that conclusively disposed of the temple’s claims, and the temple failed to state a cause of action. We disagree. Based upon the allegations in the complaint and the documentary evidence presented, it cannot be determined at this juncture whether the continuous representation doctrine tolls the three-year statute of limitations for attorney malpractice under the circumstances (see Kanter v Pieri, 11 AD3d 912, 913-914). Moreover, the temple properly alleged all of the elements necessary to recover damages for legal malpractice. Accordingly, the Supreme Court erred in holding that the eighth cause of action to recover damages for legal malpractice should be dismissed insofar as asserted against the attorneys. "

"The Supreme Court further erred in holding that the seventh cause of action to recover damages for fraud should be dismissed insofar as asserted against the attorneys. Contrary to the attorneys’ contention, that cause of action was pleaded with sufficient specificity (see CPLR [*3]3016[b]; Pludeman v Northern Leasing Sys., Inc., 10 NY3d 486, 492; PDK Labs v Krape, 277 AD2d 211), and the attorneys’ documentary evidence failed to "resolve[] all factual issues as a matter of law, and conclusively dispose[] of the plaintiff’s claim" (Brunot v Eisenberger & Co., 266 AD2d 421, 421; see CPLR 3211[a][1]). However, in its current form, the sixth cause of action alleging a violation of Judiciary Law § 487 lacks the required specificity (see Mars v Grant, 36 AD3d 561; Briarpatch Ltd., L.P. v Frankfurt Garbus Klein & Selz, P.C., 13 AD3d 296, 297-298), and, under the circumstances of this case, we modify the order dated August 2, 2010, to grant that branch of the motion which was pursuant to CPLR 3211(a) to dismiss the sixth cause of action insofar as asserted against the attorneys with leave to the temple to replead the allegations in an amended complaint. "

Much of what we report is legal malpractice, and that almost always deals with money.  What did plaintiff lose?  How much was plaintiff required to pay?  What are the attorney fees?  Why is plaintiff liable to pay an attorney some money?  All important questions, and often they tell of a subtext of injury, divorce, disenfranchisement, and sadness.  Rarely, however, does legal malpractice result in death.

Yet, it can happen.  Pro bono capital crimes representation is a lovely act, and many innocent prisoners have benefited from Project Innocence and other similar programs.  Many of the big NY firms do criminal pro bono work, and they extol it on their web sites.  Here, is the flip side.  Associate attorneys working for Sullivan & Cromwell take on a pro bono case, and then as the years go by, they move on to other firms.  What happens to the case?

Today’s Law,Com answers the question, in the US Supreme Court.  "Alabama death row inmate Cory Maples, who lost his chance to bring a critical appeal because of a mailroom snafu in a New York law firm, may be getting a second chance from the U.S. Supreme Court.

In fast-paced arguments on Tuesday that delved into the obligations of lawyers representing criminal defendants, all of the justices, with the exceptions of Justice Antonin Scalia and a silent Justice Clarence Thomas, appeared concerned about the predicament in which Maples finds himself and skeptical of the state’s arguments that they should do nothing about it.

Maples, sentenced to death for the 1995 murders of two men, was represented pro bono in his state post-conviction appeal by two associates at New York’s Sullivan & Cromwell. As required by Alabama rules at the time, the two lawyers associated themselves with a local attorney, John Butler, in order to be admitted to practice in the state. Although the rules required Butler to be jointly and severally responsible for the case, he claimed his only role was to secure the New York attorneys’ admission.

The three attorneys filed a state post-conviction petition for Maples in which they raised ineffective assistance of trial counsel claims. After 18 months, the trial judge denied the petition, and then Maples’ problems began.

The court clerk sent notices of the denial order to the two associates and Butler. The associates, however, had left the firm for other jobs and failed to inform Maples or the court that they no longer represented him. Neither they nor Marc De Leeuw, the partner who worked with the associates, filed a substitution of counsel form. The firm’s mailroom returned the denial notices to the court clerk marked "return to sender" and "left firm." Butler did nothing with his notice, assuming the associates were handling the case. Maples actually learned of the denial and the missed appeal deadline when the prosecutor sent him a letter alerting him that the time for filing a federal habeas petition was close to expiring. He contacted his stepmother, who then contacted Sullivan & Cromwell. De Leeuw and Butler scrambled to ask the trial court to reissue its denial order so they could file an out-of-time appeal, but their motion was denied as was a request to the state criminal appeals court.

"

When does continuous representation end?  Sometimes there is a specific event (a judgment, a verdict, a motion decision) and sometimes there is a specific event plus a specific period of time (the date of the injury + three years) and sometimes continuous representation ends when the parties believe it ends.  So it is in Hadda v Lissner & Lissner LLP ; 2011 NY Slip Op 32519(U)
September 19, 2011; Sup Ct, NY County; Docket Number: 109329/10; Judge: Emily Jane Goodman.

"The continuous legal representation doctrine recognizes that the statute of limitations for  ommencing a malpractice action may be tolled, if the continuing representation "pertains specifically to the matter in which the attorney committed the alleged malpractice." Shumsky, 96 NY2d at 168. In other words, the doctrine permits the tolling of the statute of limitations "until
the ongoing representation is completed." Id. at 167-168. The plaintiff bears the burden to prove that the doctrine applies. See Corless v Mazza, 295 AD2d 848 (3d Dept 2002). The doctrine
requires a clear indicia of an ongoing, continuous, developing and personal relationship between the attorney and client or a mutual understanding of the need for further representation on
the specific subject matter underlying the malpractice claim.  See Matter of Merker, 18 AD3d 332 (1st Dept: 2 0 0 5 ) ."

"Defendants have not demonstrated, by conclusive documentary evidence, when the legal  alpractice action accrued (i.e, defendants rely on April 2006 as the date, which was when the
firm participated in a conference call, but did not bill for the work)’ and have not demonstrated that the continuous representation doctrine does not apply. Although it is true that the relationship may have ended prior to the time that plaintiffs’ terminated the relationship by l e t t e r , no conclusive
proof has been submitted regarding when the relationship ended.  Defendants note that the doctrine applies until the client is on notice that the attorney is no longer addressing their needs,
which need not be in the form of a motion to withdraw, but only needs to be reasonably sufficient to advise the client that the attorney w i l l no longer pursue the matter. However, contrary to defendants’ argument, that ”[pllaintiffs were surely on notice that the Law Firm w a s no longer addressing their legal needs” (Reply Affirm at 4), the affidavits of the husband of Ceri Hadda,
(who is himself an attorney), and Ceri herself, paint a different picture.  because he ‘is not a plaintiff in this action and his surname is not ‘Hadda”‘ and, because he was not party to the retainer (Id.at 16). While it is true that the doctrine depends upon the relationship between the attorney and the client (see Grlffen v Anslow, 17 AD3d 889 (3d Dept 2005) (retainer agreement and other documents conclusively established that the legal malpractice action should be dismissed because they indicated that the attorney-client relationship was not between plaintiff and
defendant, but was between plaintiff‘s corporations and defendant), nothing has been cited to support defendants’ contention that the client cannot act through her attorney husband. Here, apparently the f i r m itself recognized the husband’s authority to act on behalf of plaintiffs."

Decedent hires attorney to prepare a will, and to make changes to beneficiaries for her assets.  As one might predict, something goes wrong.  in Gurvitz v Wank; 2011 NY Slip Op 32511(U); September 19, 2011; Supreme Court, Nassau County; Docket Number: 10468/06; Judge: Ute W. Lally we see the results.  The litigation goes on for years, and only now, some 20 years later, are the actual claims honed to an amended complaint.

"In December 1989 , defendant Jerald Wank, an attorney and a certified public accountant, prepared the Last Will and Testament for non-party Marta Wisterich (the Will"). The Will was executed on January 3 , 1990 and named , both , the plaintiff Barbara Gurvitz, and the defendant, Jerald Wank, as co-executors of her Estate. The Will also named the plaintiff as the sole beneficiary. Apparently, at the time of the preparation and execution of the Will , Marta Wisterich asked Wank to change the beneficiary of her Teacher s Insurance and Annuity Association (TIM) Equity Fund to Barbara Gurvitz. Plaintiff claims that the defendant failed to file the requisite paperwork with the TIM reflecting the requested change. As a result, plaintiff filed the appropriate papers with TIM herself on April 22 1991.  Marta Wisterich died on May 28 , 1991.

Plaintiff claims that the defendant then negotiated an agreement to split the Estate of Marta Wisterich in half as between the decedent’s aunt and the plaintiff. She claims that during the negotiations therein , defendant apparently represented the interests of the plaintiff as well as the interests of the Estate. Furthermore , plaintiff claims that the defendant failed to pay her the half of the estate to which she was entitled , instead retaining said share and telling her that he would first pay the outstanding taxes on her behalf. Plaintiff claims that the defendant deposited said monies into a new (escrow) account created under her name, from which defendant withdrew the money to give to the decedent’s aunt. Plaintiff claims that the escrow account created an appearance of income that the plaintiff did not in fact receive. She also claims that not only did the defendant fail to
file or pay plaintiff’ s taxes , but he also refused to pay back the money he held in escrow and refused to represent her before the IRS and the New York State Department of Finance when plaintiff received a tax bill. Plaintiff claims that as the result of defendant’s mistakes, her liability to the IRS totaled more than $160 977. 84 and the amount paid to the Department of Finance totaled more than $23 361. 11. In addition plaintiff claims that as the executor, defendant failed to sell Wisterich’ s cooperative apartment in New York for two years after her death , resulting in  fines and penalties to the Estate and further diminishing the value of the residual Estate.

The statute of limitations begins to run when the cause of action accrues (CPLR 9203(aD, Le.
 "when all of the facts necessary to the cause of action have occurred so that the party would be entitled to obtain relief in court"(Aetna Life Cas. Co. v Nelson 67 NY2d 169 , 175).  Plaintiff claims in her first cause of action (breach of fiduciary duty as attorney) that plaintiff was represented by the defendant from "March 1992 to now acting as her  attorney with respect to the estate of Marta Wisterich". As alleged in her proposed amended complaint, the claimed breach , as attorney, occurred when the defendant misappropriated funds with respect to plaintiff’ s taxes. According to the plaintiff’ s own allegations said breach occurred some time after May 1992 and before 2000 when defendant forwarded the funds held for the plaintiff in his escrow account to the plaintiff’  then attorney, Mr. Caro. Clearly, under these facts , and even assuming that the breach of fiduciary duty occurred at the very latest in 2000, the cause of action to recover damages for breach of fiduciary duty is time-barred insofar as asserted against Wank as attorney (CPLR 3211 (a)5.). Accordingly, plaintiffs proposed first cause of action for breach of fiduciary duty as attorney is dismissed. Plaintiff has failed to make the requisite evidentiary showing establishing merit to her proposed amended claim (Joyce v McKenna Assoc. , supra; Morgan v Prospect Park Assocs. Holdings, supra). ‘

Might we trust our attorneys?  Can a plaintiff be assured that the attorneys are not conspiring with defendants to "carve" up the settlement between them.  Our system is based upon trust and loyalty, and a belief in the incentive of success.  However…

It need not always be true.  as an example, the Second Circuit reversed the dismissal of a major case against Leeds Morelli & Brown, finding  "overriding and abiding conflicts of interest for LMB and thoroughly undermined its ability to "deal fairly, honestly, and with undivided loyalty to [appellants]"  "The overriding nature of the conflict is underscored by the fact that, when fourteen of the 587 clients failed to agree,Nextel’s final, but pre-consultancy, payment to LMB was reduced from $2 million to $1,720,000, or $20,000 per non-agreeing client. "  In Johnson v. Nextel Communications 1892-cv -09 we see:

"Once all the claims were processed, LMB would formally go to work for Nextel as a consultant for two years at $1 million per year. LMB also promised in the DRSA not to accept new clients with claims against Nextel, not to refer any such client to another lawyer or firm, and not to accept compensation for any prior referral.

It cannot be gainsaid that, viewed on its face alone, the DRSA created an enormous conflict of interest between LMB and its clients. Such a conflict is permissible only if waivable by a client through informed consent. See Int’l Bus. Machs, Corp. v. Levin, 579 F.2d 271, 282 (3d Cir. 1978); Filippi v. Elmont Union Free Sch. Dist. Bd. of Educ., 722 F. Supp. 2d 295, 310-11 (E.D.N.Y. 2010). However, there may be circumstances in which a conflict is not consentable. See GSI Commerce Solutions, Inc. v. BabyCenter, L.L.C., 618 F.3d 204, 212 n.2 (2d Cir. 2010); CenTra, Inc. v. Estrin, 538 F.3d 402, 412 (6th Cir. 2008); Cohen v. Strouch, No. 10 Civ. 7828, 2011 WL 1143067, at *2-3 (S.D.N.Y. Mar. 24, 2011). For two reasons, this is such a case."

"Therefore, LMB’s clear duty as counsel to the parties seeking relief from Nextel was to advise each client individually as to what was in his or her best interests taking into account all of the differing circumstances of each particular claim. See Ziegelheim v. Apollo, 128 N.J. 250, 260-61 (1992); Jones Lang Wootton USA v. LeBoeuf, Lamb, Greene & MacRae, 674 N.Y.S.2d 280, 284-85 (N.Y. App. Div., 1st Dep’t. 1998). The DRSA was flatly antagonistic to that duty.

On the face of the DRSA, its inevitable purpose was to create an irresistible incentive—millions of dollars in payments having no relation to services performed for, or recovery by, the claimants—for LMB to engage in an en masse solicitation of agreement to, and performance of, the DRSA’s terms from approximately 587 claimant clients. The effectiveness of the DRSA, and therefore the payments to LMB, depended on Nextel’s conclusion that a sufficient number of clients had agreed to it.3 Any number short of all 587, and Nextel would have no obligation to pay anything, as Amendment 2 demonstrated by reducing the final, pre-consultancy $2 million payment to LMB to $1,720,000, a reduction of $280,000, or $20,000 apiece for the fourteen clients LMB failed to deliver. By entering the DRSA, agreeing to be bound by its terms and accepting the financial incentives available therein, LMB violated its duty to advise and represent each client individually, giving due consideration to differing claims, differing strengths of those claims, and differing interests in one or more proper tribunals in which to assert those claims.4 See Elacqua, 860 N.Y.S.2d at 232-33; accord Matter of Educ. Law Ctr., Inc., 86 N.J. 124, 133 (1981).