Board of Mgrs. of the Bay Club v Borah, Goldstein, Altschuler, Schwartz & Nahins, P.C. ; 2010 NY Slip Op 52129(U) ; Decided on December 13, 2010 ; Supreme Court, Queens County ; Markey, J. is a legal malpractice case against one of the best known and best regarded landlord law firms in NY.  Borah, Goldstein represents landlords in all phases of L&T work, and can be seen every day in the commercial L&T parts, playing the elephant in the room.  Nevertheless, this complaint says that they made a simple mistake, which cost the client extra legal fees.  Is this allegation enough for a Legal Malpractice case?  Answer: Yes.
 

"Among the services that Borah Goldstein did on behalf of the Bay Club Board was the preparation and filing of notice of a lien for unpaid common charges pursuant to section 339 of the Condominium Act. The complaint in this action alleges that the Borah Goldstein firm was negligent in drafting and filing the notice of lien, which failed to include a verification of the information set forth therein. The complaint further alleges that as a result of this negligence the Bay Club board sustained damages by requiring it to incur more litigation expenses in defending the validity of the lien."

"The defendant argues that the plaintiff did not state a claim for malpractice as the plaintiff cannot establish the essential "but for" element in a legal malpractice action, arguing that there was no proof of damages as a result of the alleged malpractice. However, a plaintiff can recover in a legal malpractice action even if it is successful in the underlying action if it incurred increased expenses due to the attorney’s negligence in the handling of the action (see, DePinto v Rosenthal & Curry, 237 AD2d 482 [2nd Dept. 1997]). Here, the plaintiff sufficiently alleged that it has sustained ascertainable damages as a consequence of increased litigation expenses that it incurred attributable to the unverified lien. Plaintiff argues that it has stated a cause of action for legal malpractice. "

Proving the point that attorneys should not dabble in areas of the law unfamiliar them, we learned of the "7 month Rule" in estate and trust work.  The rule is that an executor is not liable for good faith distribution of estate proceeds if the distribution takes place at least 7 months after the death. In this case the executrix became personally liable to the DSS for monies distributed.

Central to Orosz v Eppig ;2010 NY Slip Op 33312(U); November 16, 2010 ;Supreme Court, Suffolk County ;Judge: Joseph C. Pastoressa is a discussion of the obligations of an attorney retained to investigate and handle a transactional or litigation matter.  Similar in our minds to a full-service elevator contract, it requires the attorney to do more than take the information from the client and make certain filings.  It requires the attorney to investigate, determine and act.

"An attorney may not shift to the client the legal responsibility the attorney was specifically hired to
undertake because of the attorney’s superior knowledge (see, Hart v Carro, Spanbock, Kaster &
Cuiffo, 21 1 AD2d 617, 619; Cicorelli v Capobianco, 90 AD2d 524, 525, affd 59 NY2d 626).
An attorney may be liable for ignorance of the rules of practice, for failure to comply with conditions
precedent to suit, for neglect to prosecute or defend an action, or for failure to conduct adequate legalresearch (see, Conklin v Owen, 72 AD3d 1006; McCoy v Tepper, 26 1 AD2d 592; Gardner v Jacon,148 AD2d 794, 796; Grago v Robertson, 49 AD2d 645,646). While an attorney has a responsibility toinvestigate and prepare every phase of a client’s case, an attorney should not be held liable for ignoranceof facts which the client neglected to tell him or her (see, Green v Conciatori, 26 AD3d 410, 41 1;Parksville Mobile Modular v Fabricant, 73 AD2d 595, 598)."

Bernardi v Spyratos ;  2010 NY Slip Op 09097 ;Decided on December 7, 2010 ;Appellate Division, Second Department  is the story of two neighbors who have locked horns over a waterfront property.  There are issues of encroachment, adverse possession, hidden water damage, legal malpractice and failures to take a survey at or before closing.  Important to this article is whether the attorneys for buyer failed to advise the client to get a new survey.  Interestingly there is no letter or writing on the issue.
 

"In order to recover damages against the Wilcox defendants for legal malpractice, the plaintiffs must show (1) that the Wilcox defendants failed to exercise the care, skill, and diligence commonly possessed and exercised by a member of the legal profession, and (2) that such negligence was a proximate cause of the actual damages sustained (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sayer, 8 NY3d 438, 442). Here, the plaintiffs submitted the deposition testimony of Wilcox, in which she repeatedly testified that she advised the plaintiffs of the possibility of obtaining an updated survey, which they refused to obtain. Accordingly, the plaintiffs failed to meet their initial burden of establishing an absence of triable issues of fact as to the alleged malpractice. Moreover, given that the underlying boundary dispute has not yet been resolved, the plaintiffs failed to establish causation or damages as a matter of law (id., see Northrop v Thorsen, 46 AD3d 780, 782). Accordingly, that branch of the plaintiffs’ motion which was for summary judgment on the complaint insofar as asserted against the Wilcox defendants was properly denied (see generally Zuckerman v City of New York, 49 NY2d at 562).

However, the Supreme Court should have granted the plaintiffs leave to amend the complaint in Action No. 2 to assert a claim against the Wilcox defendants based upon their alleged failure to explain or delete certain clauses in the contract of sale. In the absence of prejudice or surprise to the opposing party, leave to amend a pleading should be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit (see CPLR 3025[b]; Lucido v Mancuso, 49 AD3d 220; Unger v Leviton, 25 AD3d 689). Here, there will be no prejudice or surprise to the Wilcox defendants by virtue of the amendment. They were aware of the plaintiffs’ allegations against Harrison concerning the condition of the premises, and Wilcox was extensively questioned during her deposition about her advice to the plaintiffs concerning the relevant clauses. Further, the allegation is not patently nonmeritorious. However, the plaintiffs’ proposed allegation against the Wilcox defendants in paragraph 106 of the proposed amended complaint, concerning the property condition disclosure statement, is patently without merit and was properly disallowed, as the Wilcox defendants were not the owners of the subject property (see Real Property Law § 465[1]). "

 We continue to the second issue raised in Leviton Mfg. Co., Inc., v. Greenberg Traurig LLP, et al., , 09 Civ. 8083 (GBD) (THK); U.S. District Court, Southern District illustrates theprincipals of "at issue" attorney-client privilege and " work-product" discovery. 
 

What documents must be turned over to defendants when they are sued?  Must documents from successor attorneys be turned over?  The Court addressed the questions here:

"In sum, while Greenberg Traurig is free to attempt to demonstrate that factors other than its failure to timely file the patent applications resulted in the loss of the economic value of the patents, it is not necessary to invade Leviton’s confidential communications with its attorneys in order to do so.

The same analysis applies to documents withheld on the basis of the work-product doctrine, although very few documents on Leviton’s privilege log appear to have been withheld solely on the basis of work-product. See Veras Inv. Partners, 52 A.D.3d at 372, 860 N.Y.S.2d at 82-83 (where plaintiffs brought malpractice claim based, inter alia, on representation during regulatory investigations, subsequent settlement agreement with regulators did not place in issue or waive successor attorney’s work-product with respect to rationale for entering into the settlementagreement); Deutsche Bank, 43 A.D.3d at 66, 837 N.Y.S.2d at 25 (commencement of indemnity action did not, in itself, imply an at issue waiver of the protection of the attorney-client privilege or work-product doctrine, for documents concerning the defense and settlement of the underlying action); Goldberg v. Hirschberg, 10 Misc. 3d at 298-99, 806 N.Y.S.2d 337-338 ("work-product protection…,like the attorney-client privilege, may be waived pursuant to the ‘at issue’ doctrine").

However, there is one caveat on work-product. The work-product doctrine is inapplicable to documents prepared for, or in anticipation of, submission to the Patent Office. The prosecution of a patent is not, standing alone, in anticipation of litigation. See In re Rivastigmine Patent Litig., 237 F.R.D. 69, 85 (S.D.N.Y. 2006) ("In patent matters, the work product doctrine is less likely to be applicable, because the drafts of patent applications, unlike draft legal memoranda, are generally prepared prior to any expectation of litigation."); Genal Strap, Inc. v. Dar, No. CV2004-1691 (SJ) (MDG), 2006 WL 525794, at *3 (E.D.N.Y. Mar. 3, 2006) ("work performed by an attorney to prepare and prosecute a patent application does not fall within the parameters of the work-product protection because it is not created ‘in anticipation of litigation’"); Softview Computer Prods. Corp. v. Haworth, Inc., No. 97 Civ. 8815 (KMW) (HBP), 2000WL 351411, at *5 (S.D.N.Y. Mar. 31, 2000) ("Documents that are generated in connection with a patent application are not protected by the work-product doctrine simply because an issued patent may give rise to an infringement action."); Minebea Co. Ltd. v. Minebea Co., Ltd., 143 F.R.D. 494, 499 (S.D.N.Y. 1992) ("Generally, work performed by an attorney to prepare and prosecute a patent application does not fall within the parameters of the work-product protection, since the prosecution of a patent application is a non-adversarial ex parte proceeding.")."

Discovery in legal malpractice litigation often turn around the "but for" portion of the case.  The question of why was the underlying case ultimately lost, why didn’t plaintiff succeed with successor counsel and why are we responsible for this bad outcome, are often heard, and usually must be dealt with.  Here in Leviton Mfg. Co., Inc.,  v. Greenberg Traurig LLP, et al., , 09 Civ. 8083 (GBD) (THK); U.S. District Court, Southern District illustrates  theprincipals of "at issue" attorney-client privilege and " work-product" discovery.

"Plaintiff Leviton Mfg. Co. ("Leviton") alleges in its Complaint that Defendant Greenberg Traurig LLP and certain individual attorneys at Greenberg Traurig were professionally negligent in prosecuting a number of patent applications before the United States patent and Trademark Office ("USPTO" or "Patent Office"). As a consequence, the "on-sale bar" foreclosed the patentability of Leviton’s inventions, because the inventions, were on sale in the United States for more than one year prior to the date of the patent applications.

The attorney-client privilege may be waived. Although Defendants’ rely primarily upon federal law in arguing the issue of waiver, Leviton correctly argues that it is New York law that provides the law of decision for Leviton’s claim of legal malpractice. See Chin v. Rogoff & Co., P.C., No. 05 Civ. 8360 (NRB), 2008 WL 2073934, at *4 (S.D.N.Y. May 8, 2008) ("when a discovery dispute involves an attorney-client relationship with a New York attorney, New York privilege law applies"). Nevertheless, the parties cite both New York and federal law in support of their positions, and appear to hold the view that there is no material difference in New York and federal law on this issue. (See Pl.’s Br. at 2.)

Under Second Circuit law, waiver of attorney-client privilege may occur,

when a client testifies concerning portions of the attorney-client communication,…when a client places the attorney-client relationship directly at issue,…and when a client asserts reliance on an attorney’s advice as an element of a claim or defense.

In re County of Erie, 546 F.3d 222, 228 (2d Cir. 2008) (quoting Sedco Int’l S.A. v. Cory, 683 F.2d 1201, 1206 (8th Cir. 1982)). Courts have recognized that a party need not explicitly rely upon advice of counsel to implicate privileged communications. Instead, advice of counsel may be placed in issue where, for example, a party’s state of mind, such as his good faith beliefin the lawfulness of his conduct, is relied upon in support of a claim of defense. Because legal advice that a party received may well demonstrate the falsity of its claim of good faith belief, waiver in these instances arises as a matter of fairness, that is, it would be unfair to allow a party to "use[] an assertion of fact to influence the decisionmaker while denying its adversary access to privileged material potentially capable of rebutting the assertion." John Doe Co. v. United States, 350 F.3d 299, 306 (2d Cir. 2003); accord County of Erie, 546 F.3d at 229; see also Bilzerian, 926 F.2d at 1292; von Bulow, 828 F.2d at 103; Am. S.S. Owners Mut. Prot. and Indem. Ass’n v. Alcoa S.S. Co., 232 F.R.D. 191, 199 (S.D.N.Y. 2005).

Like the Second Circuit, New York courts will not find an at issue waiver merely because privileged information is relevant to the issues being litigated; "(r]ather, at issue waiver occurs when the party has asserted a claim or defense that he intends to prove by use of the privileged materials," Deutsche Bank, 43 A.D.3d at 23, 837 N.Y.S.2d at 64 (internal quotation marks omitted; accord Veras Inv. Partners, LLC v. Akin Gump Strauss Hauer & Feld LLP, 52 A.D.3d 370, 374, 860 N.Y.S.2d 78, 82 (1st Dep’t 2008), or, where rather than being merely relevant, "the privileged documents are indispensable to a party’s claims or defenses." Chin, 2008 WL 2073934, at *5; Carl v. Cohen, 23 Misc. 3d 1110 (A), 886 N.Y.S.2d 66 (Table), 2009 WL 997517, at *3 (S. Ct. N.Y. Cty. 2009). For example, where a claim of malpractice is premised upon reliance on the erroneous advice of predecessor counsel, under both New York and federal law, the legal advice received from any other counsel on the same issue is placed at issue. See, e.g., Goldberg v. Hirschberg, 10 Misc. 3d 292, 297-98, 806 N.Y.S.2d 333, 337 (S. Ct. N.Y. Cty. 2005) (citing to the "remarkable similarity" to Bank Brussels Lambert v. Fiddler, Gonzalez & Rodriquez, No. 96 Civ. 7233 (LMM) (RLE), 2003 WL 21277139 (S.D.N.Y. June 2, 2003), aff’d 2005 WL 756859 (S.D.N.Y. April 1, 2005), for the proposition that "because plaintiff was claiming that it relied on defendant’s advice on a certain issue to its detriment, the legal advice it received from any other lawyers on that issue related to the reasonableness of plaintiff’s reliance and was not subject to the attorney-client privilege")."
 

Legal malpractice proofs have 4 elements.  They are Departure, Proximity, "But for" and Ascertainable damages.  The sad truth is that in almost every human endeavor, one may find departures.  In a case that goes to trial, there are arguably many departures.  A simple question must be asked:  "Did this departure proximately cause permanent damage, and would there have been a different outcome "but for" this departure?  Often the answer is no.

In Pozefsky v Aulisi ;  2010 NY Slip Op 08999 ;  Decided on December 7, 2010 ;  Appellate Division, First Department we see one such example. This was a medical malpractice case in which the claim was that plaintiff "sought damages resulting from a breast implant rupture allegedly causing her to suffer systemic tissue disease and/or other autoimmune/rheumatic conditions" by virtue of silicone breast implants.
 

Her expert at trial was not permitted to testify because defendants failed to produce the proposed expert for depositions.  Does this make a difference, and can she win a legal malpractice case?

No, says the Court.  The expert would not have been permitted to testify in any event, because there was no scientific validity to his proposed testimony.

"The record demonstrates that plaintiff’s proposed expert would not have been allowed to testify at the federal court trial in which plaintiff sought damages resulting from a breast implant rupture allegedly causing her to suffer systemic tissue disease and/or other autoimmune/rheumatic conditions, regardless of any negligence on the part of defendants in failing to produce the proposed expert for depositions, since his testimony on the issue of causation would not have survived a hearing pursuant to Daubert v Merrell Dow Pharms., Inc. (509 US 579 [1993]).

In granting a motion to preclude the testimony of two of plaintiff’s designated experts, the federal court conducted a thorough Daubert analysis with respect to the issue of causation in the context of injuries purportedly caused by or associated with silicone breast implants. The court reviewed the reports of three groups of independent experts, as well as studies published by many well known national and international, medical and scientific organizations, which all concluded that there was insufficient evidence to support the allegation that silicone breast implants are associated with defined or atypical connective tissue diseases, or other autoimmune-rheumatic diseases or conditions in women with such implants (see Pozefsky v Baxter Healthcare Corp., 2001 WL 967608, 2001 US Dist LEXIS 11813 [ND NY 2001]). The federal court also cited to [*2]cases where the proposed expert was precluded from testifying on the causation issue since his theory that silicone implants could cause undifferentiated connective tissue diseases was not based on scientifically valid methodologies and has not been accepted in the scientific community (see Havard v Baxter Intl. Inc., 2000 US Dist LEXIS 21316, *12-13 [2000]; Grant v Bristol-Myers Squibb, 97 F Supp 2d 986, 992 [2000]). "

Yesterday, we looked at  Escape Airports (USA), Inc. v Kent, Beatty & Gordon, LLP
2010 NY Slip Op 08981 ;  Decided on December 7, 2010 ;  Appellate Division, First Department in which Justice Kornreich was affirmed across the board. 
 

One defense in legal malpractice cases is that damages are speculative, conclusory, or cannot be stated in an ascertainable fashion.  This case revolved around an airport vendor’s claim that the attorneys failed to advise them to insert two clauses into the contracts.  Defendants said that there could be no proof that the airlines would accept the clauses. The Court wrote:

"We also decline to upset the court’s refusal to dismiss the claim to the extent it is predicated on defendant’s alleged failure to include upper-limit-of-passengers and exclusivity provisions. Plaintiff has offered evidence that it suffered damages due to one airline vacating the premises during the lease period, and using the services of another lounge. Whether restrictive lease provisions would have been acceptable to the vacating airline is an issue we need not determine.

That portion of the motion addressing plaintiff’s claim predicated on the occupancy agreement entered into with JFK International Air Terminal LLC was also correctly denied. The fact that plaintiff signed, and is thus bound by, the terms of this agreement does not preclude an action for malpractice against the attorney who assisted in drafting it. Plaintiff alleges that it retained defendant for the express purpose of providing advice with respect to standard terms and conditions to be incorporated in the occupancy agreement. It further alleges that defendant agreed to undertake this task, and did provide plaintiff with very specific comments regarding the standard terms and conditions, but failed to highlight or comment on the termination provision. It is axiomatic that counsel "may not shift to the client the legal responsibility it was specifically hired to undertake because of its superior knowledge" (Hart v Carro, Spanbock, Kaster & Cuiffo, 211 AD2d 617, 619 [1995]). Thus, a fact issue is presented as to whether defendant was negligent in the performance of duties within its area of expertise, and for which expertise it was retained. "

A unique principal in malpractice cases, both medical and legal is the question of professional judgment.  In medicine, it is said that "medicine is an art and not a science" and in law, it is said that a legal malpractice action may not be based solely upon a failed strategy or question of professional judgment, upon which opinions may vary.

Many legal malpractice cases have been dismissed on the principal that the complained of acts were questions of judgment, failed or not, and not a departure from good and accepted standards.  Here in this very interesting case, the First Department affirms the decision of Justice Kornreich, in Supreme Court, New York County.  In Escape Airports (USA), Inc. v Kent, Beatty & Gordon, LLP
2010 NY Slip Op 08981;;  Decided on December 7, 2010, the Court writes:
 

"The essence of plaintiff’s claim is that it consulted defendant for advice concerning the individual contracts with airlines that were based on the template agreement defendant had drafted; defendant gave it bad advice in failing to recommend that a termination provision be added or otherwise advise plaintiff that such protection was lacking; plaintiff had no way of knowing that it had been given bad advice until after it signed the individual agreements; the airlines had an incentive to agree to a termination provision because plaintiff would not otherwise have been able to provide the contracted for lounge services; and but for this omission, plaintiff would not have incurred damages.

At this juncture, i.e., the motion to dismiss, the professional judgment rule cannot be invoked to determine whether defendant was negligent in failing to include a termination provision, because the state of the record does not allow a determination as a matter of law that [*2]defendant deliberately excluded that provision in favor of an equally protective alternative provision (see e.g. Rosner v Paley, 65 NY2d 736, 738 [1985]; Zarin v Reid & Priest, 184 AD2d 385, 386-387 [1992]). Nor can we conclude that it is or is not overly speculative to surmise that a carrier would have agreed to a termination clause in its lease equivalent to that found in plaintiff’s agreement with the airport. "