We discussed Hinshaw & Culbertson, LLP v e-Smart Tech., Inc.; 2011 NY Slip Op 30651(U);
March 18, 2011; Sup Ct, New York County; Docket Number: 113108/09; Judge: Judith J. Gische on the question of dropping a client just before a deadline. That shortcoming was held not to be legal malpractice.  What about unauthorized divulgance of privileged documents or cooperating with an opponent after the romance wears off?  Those allegations lead to a different result.

"Although Smart states that Fitz and Hinshaw breached their fiduciary duty by providing confidential and/or privileged documents to the SEC and other persons, they have not specified, even in the most general way, what kinds of documents they are referring to, with two exceptions, one being a single document attached as an exhibit to Fitz’s motion to be relieved as counsel in one of the California cases.  It is unrefuted that she attached this documents, it was obtained by defense counsel in the other California action and that, eventually, the file was sealed by the court because the document was privileged. At the pleading stage, Smart‘s facts support the claim of breach of fiduciary duty asserted as to that document. Other documents readily identified are those Fritz provided to the SEC without Smart’s consent. Though the documents were produced pursuant to a subpoena, that defense can be raised in Fritz and Hinshaw answer."
 

CLE lecturers almost always warn the listener not to sue for fees. They tell attorneys at the lectures that there will be an inevitable legal malpractice counterclaim.  In the case of sole practitioners or small firms, a comparison of their insurance deductible with the fee claim should be made, because they may have to pay the deductible even before they have any possibility of collection.

One legal malpractice claim which comes up regularly is a law firm that takes a case for "investigation" or simply takes a case, and then drops it just before the statute of limitations expires.  This seems to happen more often in medical malpractice.  An expert (at least theoretically) must be on board before bringing the case (certificate of merit) and sometimes attorneys take on a case in the hope of a pre-complaint settlement, or in the hope of getting an expert.  When neither happens, they give the case back to the client.  Is this legal malpractice?  Is a similar situation where the attorneys wait until the very last minute to work on a motion legal malpractice?

In Hinshaw & Culbertson, LLP v e-Smart Tech., Inc.  ;2011 NY Slip Op 30651(U); March 18, 2011
Sup Ct, New York County;  Docket Number: 113108/09;  Judge: Judith J. Gische we see that the latter situation is not a good legal malpractice claim.

"Fritz and Hinshaw have successfully established – and Smart does not disagree -that Fritz and
Hinshaw were discharged as their lawyers August 1, 2008. It is also unrefuted that there was a pending motion in one of the California cases in which Smart’s opposition was due August 4, 2008. Smart’$ argument, that it was negligent for Fritz and Hinshaw to wait until the last moment to work on the motion, which is why they were discharged, does not support a claim for legal malpractice. No deadline was missed. The supplemental claim, that Smart had to scramble to find new lawyers, is also unavailable. To establish a prima facie case of legal malpractice or negligence, the client must plead and prove facts tending to show that the law firm: 1) failed to exercise that degree of care, skill, and diligence commonly possessed and exercised by an ordinary member of the legal community, 2) that such negligence was the proximate cause of the actual damages sustained by the plaintiff and, 3) that “but for” the defendant’s negligence, the plaintiff would have been successful in the underlying matter (Laventure v, Galeno, 307 AD2d
255 [Ist Dept. 2003] ;Wexler v. Shea & Gould, 21 I AD2d 450, 621 NYS2d 858 [Ist Dept. 1995]. The facts do not support any of these elements and the claim for legal expenses spent to hire another attorney is not a malpractice claim. Therefore, Fritz and Hinshaw’s motion to dismiss the legal malpractice claim based upon the failure to timely prepare a response to the motion in the California action granted and that aspect of the malpractice claim is severed and dismissed."

The Elite Models litigation, in which a class action set of models challenged the industry practices on expenses and allocation of fees to the models ended with a group of US District Court cases, a multi-million dollar settlement and a raft of legal malpractice cases which followed.  This case, Pillard v Goodman ;2011 NY Slip Op 01929 ;Decided on March 17, 2011 ;Appellate Division, First Department  is one of them.

Of import is the finding that a conflict of interest, or a violation of attorney disciplinary rules which alone cannot support a law suit, may support liability when malpractice follows.

"This action alleging legal malpractice arose out of defendants’ representation of plaintiff in a lawsuit brought by Victoria Gallegos alleging employment discrimination against nonparty Elite Model Management Corp.; plaintiff, a 10% shareholder; and Elite’s majority shareholder, director of finance and co-president. A bifurcated trial resulted in a verdict of liability against the Elite defendants and an award to
Gallegos of approximately $2.6 million in compensatory damages and $2.6 million in punitive damages against the corporate defendant. On appeal, this Court affirmed the liability verdict but vacated the damages award and remanded the matter for a new trial on the issue of damages (see Gallegos v Elite Model Mgt. Corp., 28 AD3d 50 [2005]).

The instant complaint states a cause of action for legal malpractice by alleging that defendants were negligent in failing to proffer evidence at trial that plaintiff was no longer president of Elite when Gallegos’s employment commenced, had limited authority to respond to Gallegos’s complaints, and did not approve of or participate in the termination of Gallegos’s employment, and that but for this negligence plaintiff would have been exonerated of liability and would not have incurred damages (see InKine Pharm. Co. v Coleman, 305 AD2d 151 [2003]). Plaintiff also alleges sufficiently that Curtin mishandled the Gallegos in-house complaint and failed to apprise her of Gallegos’s early settlement demand in the amount of $50,000 (see Boglia v Greenberg, 63 AD3d 973, 975 [2009]).

The complaint further alleges that defendants’ joint representation of all the Elite defendants in the Gallegos
action, in violation of Code of Professional Responsibility DR 5-105 (22 NYCRR 1200.24) (effective through March 31, 2009), divided their loyalties and prevented them from asserting the [*2]defense that plaintiff’s co-defendants were the primary, if not the sole, actors in the decision to terminate Gallegos’s employment; because of their joint representation, defendants could not request that the jury apportion liability among plaintiff and her co-defendants, resulting in the automatic imposition of joint and several liability on her (see CPLR 1601). While these allegations of a conflict of interest or a violation of attorney disciplinary rules alone could not support a cause of action, liability can follow where the divided loyalty results in malpractice (see Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 8 [2008]; Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267 [2004]). "

Attorneys move around, and law firms morph.  What happens when one attorney is sued for legal malpractice which is said to have taken place at two law firms?  One answer is that both firms may be sued in the main action if plaintiff chooses, another choice is the third party action.  Here, in Tanger v Ferrer ;  2011 NY Slip Op 01954 ;  Decided on March 17, 2011 ; Appellate Division, First Department we see how the procedural aspects might play out.  Questions of successive tortfeasors and the one direction in which liability might flow are not unique to legal malpractice, and seem to flow in the opposite direction as time…later might be liable to earlier, but not earlier to later.

 "In this legal malpractice action, plaintiff alleges that defendant Alfred Ferrer III, when serving as a lawyer for him and his wife, negligently prepared three settlement tenders. Ferrer was employed by third-party defendant DLA Piper US LLP f/k/a Piper & Marbury LLP when he prepared the first two tenders, and by defendant Eaton & Van Winkle, LLP (EV) when he prepared the third tender. Ferrer and EV instituted a third-party action for, among other things, contribution against DLA Piper. DLA Piper moved to dismiss the third-party complaint against it, arguing, in pertinent part, that EV, as a successive tortfeasor, had no right to contribution from it, as prior tortfeasor. We agree.

Where, as here, "the injuries caused by the original and successive tortfeasor are capable [*2]of being separated from or divided between one another, the successive tortfeasor, being liable only for the injuries that tortfeasor caused, has no right of contribution from the original tortfeasor" (Cohen v New York City Health & Hosps. Corp., 293 AD2d 702, 703 [2002])."

The Defendant in this case was a well known (and ground-breaking) legal malpractice attorney who has been in a swirl of late career litigation.  There have been RICO cases, there have been intra-office blow-ups, and herein this case he was sued for legal malpractice.  However, here, all went wrong for plaintiff.

In Callaghan v Curtis ; 2011 NY Slip Op 01786 ; Decided on March 8, 2011 ; Appellate Division, Second Department we see a case dismissed, basically on an attorney’s misbehavior at a deposition.

Speaking objections were once the realm of a truly experienced attorney.  That attorney, defending a deposition, would object in a way that either re-phrased the questions, totally confused the record, allowed the witness to infer a better answer (rather than tell the client how to answer) and in general, made the transcript utterly ineffective for trial.  But all that is changing.

Here, plaintiff is non-suited because of the deposition.  "[A] trial court is given broad discretion to oversee the discovery process" (Castillo v Henry Schein, Inc., 259 AD2d 651, 652). Here, the plaintiff clearly violated a prior order of the Supreme Court by failing to bring certain documents to her deposition. Her attorney also made extensive "speaking objections" during the deposition, and the plaintiff herself repeatedly refused to answer clear questions. We conclude that the Supreme Court providently exercised its discretion, upon the defendants’ motion pursuant to CPLR 3126 to strike her reply to their counterclaims, by, inter alia, precluding the plaintiff from offering any documents at trial (see e.g. O’Neill v Ho, 28 AD3d 626, 627). "

There are at least three forms of pleading available in a legal malpractice case.  The first is malpractice itself, the second breach of contract and the third breach of fiduciary duty.  For legal malpractice  "a plaintiff must demonstrate that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the attorney’s breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442). "To establish causation, a plainitff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence" (id.). "

As we see in Alizio v Feldman ; 2011 NY Slip Op 01776  Decided on March 8, 2011  Appellate Division, Second Department  not all need exist at the same time.  There (although the decision is very opaque on the facts, as are the decisions below) "Accordingly, the Supreme Court properly denied those branches of the defendants’ motion which were for summary judgment dismissing the causes of action alleging legal malpractice.

However, the Supreme Court should have granted those branches of the defendants’ [*2]motion which were for summary judgment dismissing so much of the first, third, and fifth causes of actions as alleged breach of contract as duplicative of the causes of action alleging legal malpractice, as they arose from the same facts and do not allege distinct damages (see Financial Servs. Veh. Trust v Saad, 72 AD3d 1019, 1020; Town of Wallkill v Rosenstein, 40 AD3d 972, 974). In addition, the Supreme Court should have granted those branches of the defendants’ motion which were for summary judgment dismissing so much of the second, fourth, and sixth causes of action as sought declaratory relief. Declaratory relief is inappropriate since the plaintiffs have an adequate alternative remedy in the form of a cause of action alleging legal malpractice (see BGW Dev. Corp. v Mount Kisco Lodge No. 1552 of Benevolent & Protective Order of Elks of U.S. of Am., 247 AD2d 565, 568; Apple Records v Capitol Records, 137 AD2d 50, 54). "

Sometimes, its just better not to continue the fight.  Sometimes, when it seems things can’t get worse, they might anyway.  In Mizuno v Fischoff & Assoc. ;2011 NY Slip Op 01811 ;Decided on March 8, 2011 ;Appellate Division, Second Department  defendant attorneys had already lost the fight and had been found to be negligent.  Plaintiff’s lost their house as a result.
 

So, why not settle?  We don’t know, but the Appellate Division made the situation even worse for defendants." ‘As a result of the defendants’ legal malpractice, which is not contested on this appeal, the plaintiff’s house was sold at a foreclosure sale on April 4, 2002. The plaintiff and his wife held title to the subject property as tenants by the entirety and were, thus, each seized of the whole property (see Kahn v Kahn, 43 NY2d 203, 206-207; Stelz v Shreck, 128 NY 263, 266; Paterno v CYC, LLC, 46 AD3d 788, 789). Since the plaintiff owned the entire property, the Supreme Court properly held that he was entitled to recover 100% of the lost equity in the property.

We agree with the plaintiff’s contention that May 1, 2003, is not a "reasonable intermediate date" from which to calculate prejudgment interest (CPLR 5001[b]). Instead, we find that April 4, 2002, is a "single reasonable intermediate date" (CPLR 5001[b]) from which to calculate prejudgment interest on the damages awarded in this case. Accordingly, we remit the matter to the Supreme Court, Suffolk County, for a new calculation and award of prejudgment interest, and for the entry of an appropriate [*2]amended judgment."

The Appellate Division added about 10% to the verdict.

Where else in the world of law might a party say that they had definitely made a mistake, and definitely departed from good practice, yet be immune?  We’re not talking about an act too many years ago, or an act that was compelled.  Here, in a familiar but fascinating story, attorney  Diarmuid White freely admits that he departed from proper standards in representing a client. 

The story in the NY LJ today by Mark Hamblett tells how a mob related trial ended with only one person convicted.  While attorney White succeeded on murder and  other very significant criminal charges, he failed in the RICO charges.  Now, Michael Yanotti asks the court to give him a new trial on those RICO charges.  Judge Scheindlin turned him down.

"Judge Scheindlin found in Yannotti v. United States, 10 Civ. 2546, that Mr. Yannotti was not prejudiced by Mr. White’s error at his 2005 trial.

Mr. Yannotti was the lone defendant convicted in a trial that ended with a hung jury for his co-defendants, including John "Junior" Gotti.

Despite Mr. White’s error, he achieved considerable success on other counts, as Mr. Yannotti was acquitted on two murder charges and the allegation he attempted to kill Guardian Angels founder and radio talk show host Curtis Sliwa in 1992 out of revenge for comments Mr. Sliwa had made about the late head of the Gambino crime family, John Gotti.

And post-trial, Judge Scheindlin entered a judgment of acquittal on a substantive racketeering count involving loansharking.

Following his conviction, Mr. Yannotti appealed to the U.S. Court of Appeals for the Second Circuit, which in 2008 held that "the fact that the government did not prove Yannotti’s specific knowledge of or participation in each predicate act conducted by other members of the Gambino family does not undermine the sufficiency of the evidence establishing his conviction."

After the U.S. Supreme Court denied his petition for a writ of certiorari in 2009, Mr. Yannotti filed a motion challenging his sentence under 28 U.S.C. §2255 as imposed in violation of his right to effective assistance of counsel."

So, one asks, might he sue his attorney?  The resounding answer is no…no!  A criminal defendant may not sue his criminal defense attorney for legal malpractice until and unless he can show "actual innocence" which generally means reversal, acquittal or exoneration.