A legal malpractice case involving $2.5 million dollars in legal fees survived a motion to dismiss, and will continue. Brendon Pierson of the  The NYLJ reported yesterday  that Justice Gische of Supreme Court, New York County decided motions.

"Winston & Strawn must face a $2.5 million malpractice suit from former shareholders of pharmaceutical company Biosynexus for allegedly botching the 2005 sale of the company, a Manhattan judge has ruled.

In OrbiMed v. Winston & Strawn, 13708/10, Supreme Court Justice Judith J. Gische (See Profile) allowed to go forward two of three claims in the suit, which was filed by medical investment firm OrbiMed on behalf of all Biosynexus’ former shareholders. The shareholders claimed Winston & Strawn failed to disclose details of Biosynexus’ licensing agreements while the shareholders were negotiating the company’s sale to the hedge fund QVT Fund LP. As a result of that alleged failure, the shareholders claim they spent $2.5 million suing QVT in order to get paid in full for the $56 million sale.

Biosynexus was a private, closely held company with about 35 shareholders, including OrbiMed, which also held a seat on the company’s board of directors, according to Justice Gische’s decision. The company licensed one of its key products, an antibody called A110 used to prevent bacterial infection, from the Henry M. Jackson Foundation. Under the terms of that license, Biosynexus was allowed to sublicense the product to other companies as long as the sublicense included a provision that the sublicensee agree to all the terms of the original license. In 2002, Biosynexus sublicensed the product to Glaxo Group Ltd., but did not include that mandatory provision, according to Justice Gische.

Both the license with the Jackson Foundation and the sublicense were drafted by Winston & Strawn through its attorney Gerald Farano, who is now a partner at Jones Day and is not a party in the lawsuit. Mr. Farano was also a shareholder in Biosynexus"
 

We’re pleased to point to our NY Law Journal article in today’s paper on changes in the law following  Estate of Schneider v. Finmann, 15 NY3d 306 (2010).   For the full article, see today’s NYLJ.

OK, George Clinton was not exactly our first choice for music.  After Jobim, Steely Dan, David Bromberg, he almost always came next.  We are more interested, however, in his legal malpractice story.  Here, without further embellishment is a very interesting article  from the Hollywood Reporter.com.

"George Clinton is taking some revenge on the law firm that sought to garnish his wages over unpaid legal bills. On Monday, the funk pioneer filed a $10 million lawsuit against Hendricks & Lewis for legal malpractice, fraudulent inducement, and breach of contract.

Long-time readers of this blog will know that Clinton’s name has been connected to a number of aggressive — sometimes trailblazing — legal actions, including lawsuits over samples and trademarked phrases like "Bow wow wow yippe yo yippie yay."

In February, Hendricks & Lewis looked to garnish Clinton wages for $1.7 million owed and described its arbitration battles with the musician over legal fees. At the time, it appeared that Clinton’s heavy litigation appetite had proven too costly, but in truth, determining who’s responsible for the historically bullish litigation is extremely complicated. "  Read on…
 

We admit that this case has us a little confused.  In Pollan v Attie ;2011 NY Slip Op 51285 (U)decided on July 11, 2011 ;Supreme Court, Nassau County ; Marber, J. we see a plaintiff with a car accident personal injury case.  Attorney 1 stipulates to an arbitration with a high low.  It seems not to be arbitrated.  The court case is dismissed for failure to prosecute.  Attorney 2 is retained, more than a year later.  It is unclear whether he is retained to take over the car case or to sue attorney 1.  He does not restore the case, and eventually, he is sued. 
 

The kicker comes in the middle of the opinion, when the judge tells us that there was an arbitration award.  Because of this, all counts of the case are dismissed.  Question?  Why wasn ‘t the arbitration award part of the factual setting by the judge?

"With particular respect to the First cause of action, the Plaintiff alleges that due to the Defendant, Attie’s, malpractice, she "was caused to lose her right to recover" in the personal injury action (see Verified Complaint at ¶ 38). However, inasmuch as that action has proceeded to arbitration, which resulted in the Plaintiff receiving an award in connection thereto, the allegations contained in the within complaint are plainly contradicted by the record (Doria v. Masucci , 230 AD2d 764 [2d Dept. 1996], supra; Mayer v. Sanders, 264 AD2d 827 [2d Dept. 1999], supra). Moreover, given the Plaintiff’s arbitration award, the Plaintiff has suffered no damages proximately caused by the Defendant’s purported malpractice (Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438 [2007], supra).

Accordingly, the First cause of action is hereby DISMISSED. "

Malvasio v Savran;  2011 NY Slip Op 31763(U);  June 30, 2011; Supreme Court, Nassau County
Judge: Jeffrey S. Brown is an illustration of the "but for" element of legal malpractice.  Plaintiff must be able to demonstrate that there would have been a better or different outcome had the attorneys done their job.

"Plaintiffs claim fails to allege material facts giving rise to a cognizable claim alleging
legal malpractice. By demonstrating that plaintiff did not possess, and was unable to submit
sufficient evidence, i. , documentary evidence, of the existence of the purported loans, and
Ursula Egger s promise to repay same, the moving defendants have shown that the essential
element of "but for" causation is absent from plaintiffs legal malpractice claim. Plaintiff failed
to establish defendants ‘ negligence by showing they did not exercise the ordinary reasonable skill
and knowledge commonly possessed by a member of the legal profession.
Although the court must accept the allegations in the complaint as true, bare legal
conclusions, as well as factual claims either inherently incredible or flatly contradicted by
documentary evidence, are insuffcient to defeat a motion to dismiss. Here, the complaint fails to
plead specific allegations demonstrating that "but for" defendants ‘ alleged negligence , she would
have prevailed in the underlying action. Nothing in plaintiffs submissions sheds any additional
light on or demonstrates that plaintiff has a meritorious claim against defendants Katherine
Richards and/or the Pellegrini law firm. The facts show that defendants notified plaintiff that
they could no longer represent her and had closed their file in the underlying matter as of March
, 2008.
The summary judgment motion in the Suffolk County action was granted on default
seven months after plaintiff had retained new counsel on June 17 2008. Plaintiff has failed to set
forth any factual basis on which to conclude that had defendants opposed the summary judgment
motion at issue, plaintiff would have prevailed in the suit against Mark Egger and ultimately
received the monies allegedly due and owing by the Egger estate."

A Long Island practitioner persisted in moving and appealing, and the AD rewarded him with reversal of the dismissal of two of the causes of action in his case.  In Hoffman v Colleluori
2011 NY Slip Op 05669  Decided on June 28, 2011 ; Appellate Division, Second Department we see the AD calculating the statute of limitations for plaintiff, and his ability to sue.
 

"The Supreme Court erred in, upon reargument, adhering to its original determination granting those branches of the defendants’ motion which were pursuant to CPLR 3211(a)(1) and (7) to dismiss the second and third causes of action to recover damages for legal malpractice. "A motion to dismiss pursuant to CPLR 3211(a)(7) will fail if, taking all facts alleged as true and according them every possible inference favorable to the plaintiff, the complaint states in some recognizable form any cause of action known to our law" (Kennedy v H. Bruce Fischer, Esq., P.C., 78 AD3d 1016, 1018 [internal quotation marks and citation omitted]; see Arnav Inds., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 303).

Accepting all the facts alleged in the complaint as true, the allegations are sufficient to state a cause of action to recover damages for legal malpractice in an underlying federal civil rights action. The plaintiff alleged in his complaint, inter alia, that the defendants failed to assert the underlying causes of action before the expiration of the applicable statutes of limitations, and that their negligence was a proximate cause of his damages (see Jennings v Raso, 251 AD2d 380, 380). While most of the underlying causes of action were time-barred before the plaintiff retained the [*2]defendants, the plaintiff’s claim under 42 USC § 1983 arising from malicious prosecution was viable at the time the defendants commenced the federal action on the plaintiff’s behalf (see Palmer v State of New York, 57 AD3d 364, 364; Pendelton v City of New York, 44 AD3d 733, 737). Moreover, contrary to the defendants’ contention, the complaint "set forth allegations from which damages attributable to the defendant[s’] alleged malpractice might be reasonably inferred" (Caruso, Caruso & Branda, P.C. v Hirsch, 41 AD3d 407, 410; see Fielding v Kupferman, 65 AD3d 437, 442).

The Supreme Court also erred in, upon reargument, adhering to its original determination granting those branches of the defendants’ motion which were pursuant to CPLR 3211(a)(1) to dismiss the legal malpractice causes of action. A motion pursuant to CPLR 3211(a)(1) may be granted "only where the documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; see Thompsen v Baier, 84 AD3d 1062). Here, the documentary evidence did not conclusively establish that all of the underlying causes of action were time-barred before the plaintiff retained the defendants. "

Legal proceedings in foreclosure settings have ebbed and flowed over the years.  Right now there is a tremendous backlog in the cases, mostly as a result of tightened rules.  The concept of Robosigners has recently been in the news, and this case highlights the dangers to bank attorneys in foreclosures.  HSBC Bank USA, N.A. v Taher ;2011 NY Slip Op 51208(U) ;Decided on July 1, 2011 ;Supreme Court, Kings County ;Schack, J.
 

"In this foreclosure action, plaintiff HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2 (HSBC), moved, upon the default of all defendants, for an order of reference and related relief for the premises located at 931 Gates Avenue, Brooklyn, New York (Block 1632, Lot 57, County of Kings). Before considering plaintiff HSBC’s instant motion, I issued a decision and order, dated November 8, 2010, instructing plaintiff’s counsel, to comply with the requirements of Chief Administrative Judge Ann T. Pfau, in her Administrative Order 548/10 of October 20, 2010, that an affirmation be submitted "within sixty (60) days of this decision and order, or the instant foreclosure action will be dismissed with prejudice."

"On plaintiff HSBC’s deadline day, January 7, 2011, the 60th day after issuing my November 8, 2010 decision and order, plaintiff’s counsel, Frank M. Cassara, Esq., of Shapiro, DiCaro & Barak, LLC, submitted to my chambers the required affirmation, pursuant to Chief Administrative Judge Pfau’s Administrative Order 548/10. Mr. Cassara, affirmed "under the penalties of perjury":

"Mr. Cassara’s affirmation, affirmed "under the penalties of perjury," that to the best of Mr. Cassara’s "knowledge, information, and belief, the Summons and Complaint, and other papers filed or submitted to the [*4]Court in this matter contain no false statements of fact or law," is patently false. Moreover, the Court is troubled that: the alleged representative of plaintiff HSBC, Christina Carter, who according to Mr. Cassara, "confirmed the factual accuracy and allegations set forth in the Complaint and any supporting affirmations filed with the Court, as well as the accuracy of the notarizations contained in the supporting documents filed therewith," is not an employee of HSBC, but a robosigner employed by OCWEN LOAN SERVICING, LLC [OCWEN], whose signature on legal documents has at least three variations; the MERS to plaintiff HSBC assignment of the subject mortgage and note was executed by Scott W. Anderson, a known robosigner and OCWEN employee, whose signature is reported to have appeared in at least four different variations on mortgage assignments; and, the instant affidavit of merit was executed by Margery Rotundo, another robosigner, OCWEN employee and self-alleged employee of various other banking entities. "

Read on through the long discussion of robosigners, to the end.

American Lawyer reports that legal malpractice claims are on the rise in the US.

"Law firms are being hit with significantly more malpractice claims in 2011 than they were in 2010, according to a new survey of insurers that specialize in legal malpractice coverage. The sputtering economy and a sagging real estate market are the main culprits.
The survey–which covers the first six months of the year and was conducted by broker Ames & Gough–found that the volume of malpractice claims is up by between 11 and 20 percent at one insurance company so far this year.
The insurers polled by Ames & Gough–AXIS Insurance, Beazley Group, Berkley Select, CNA, Lexington Insurance, and Hartford Financial Services Group–collectively provide legal malpractice coverage to about 75 percent of large and midsize firms in the United States.
In addition to the company that said its claims’ rate has jumped by as much as 20 percent, three others said they have seen claims rise by between 6 and 10 percent. The remaining two said their claims rates have remained stable so far this year. (Ames & Gough did not identify which of the surveyed insurers fell into which category and did not analyze the merits of any claims.)
The survey cited real estate practices as the most likely to be sued, with "conflict of interest" and "failure to file timely" as the most common claims. Real estate claims, Ames & Gough notes, have been on the rise for the past three years, thanks to the large volume of transactions that occurred between 2005 and 2008 and the collapse in property values that followed amid the country’s broader financial collapse. The twin forces have prompted many parties to try to recoup real estate losses any way they can, according to Ames & Gough. "