Today’s New York Law Journal reports on a fee dispute.in an article by Susan Beck of The American Lawyer.  This, however is not a fee dispute one might see on a typical day in the fee dispute world.  Typically, those fee disputes are for sums less than $ 50,000.  Here, the client paid $ 5 million to Boies Schiller and the dispute is over an additional $ 5 million.  Besides those sums, the client paid Davis Polk an additional $ 7 million in fees before it ran out of money.

"In a lawsuit filed Oct. 1 in Manhattan Supreme Court, G.K. Las Vegas Limited Partnership is seeking to force Mr. Boies’s firm, Boies Schiller & Flexner, to arbitrate a fee dispute before the American Arbitration Association and to place more than $5.04 million in disputed fees in escrow.

G.K. claims that it has already paid the firm $5 million and disputes its obligation to pay another $5.04 million. It alleges that Boies Schiller breached its agreement that Mr. Boies would serve as lead counsel and "shirked its professional responsibilities" to the client.

Justice Bernard J. Fried (See Profile) has ordered Boies Schiller to respond to G.K.’s petition to compel arbitration by Oct. 15. A hearing in G.K. Las Vegas Limited Partnership v. Boies Schiller & Flexner, 651632/2010, is scheduled for Oct. 19.

G.K. claims that Mr. Boies immediately turned over the matter to less experienced counsel and more junior associates. As a result of the lack of senior partner attention, G.K. in 2007 brought in Davis Polk & Wardwell, which billed more than $7.6 million, the complaint states.

By 2008 the client was running out of money and could no longer pay Davis Polk. Mr. Boies agreed to resume his role as lead counsel under a new fee arrangement. According to the complaint, the amended fee agreement "substantially increased" the success fee. A letter signed by Mr. Boies in November 2008 and included as an exhibit states the success fee would be modified to 10 percent of the total recovery.

Boies Schiller also agreed not to charge for its hourly billings, except for work handled in its Las Vegas office, which would continue to bill at 80 percent of normal rates, the letter said. According to the complaint, the new fee agreement did not deduct the $250,000 engagement fee from the success fee.

Despite the new arrangement, the complaint alleges Mr. Boies continued to neglect the Nevada action, skipping one mediation session and arriving four hours late for another. G.K. claims Mr. Boies lied to the parties attending the mediation by claiming he was stuck on the tarmac at Los Angeles airport when he was actually giving a live interview with CNN. The client turned to Davis Polk on short notice to make a summary judgment motion because Mr. Boies was not prepared, the complaint asserts.

Mr. Boies nevertheless was expected to be lead trial counsel."
 

 Carl v. Cohen, Supreme Court, New York County, Justice Edmead 2009 NY Slip OP 30806(U), April 15, 2009 illustrates two distinct principals in the area of attorney-client privilege. The first is privilege and at issue communications.  The second principal, to be discussed on Friday, is relation-back and the statute of limitations.

Plaintiff in this case was an employee at a mutual fund operation, and was embroiled in a market timing case in which it was alleged that someone was utilizing the time-zone differences between the east coast and California to make money in the mutual funds market.  He hired law firm 1, then fired it, and went on to law firm 2 and 3.  This case discusses the question of whether target attorney in the legal malpractice case may obtain otherwise privileged materials from the successor attorneys.

"The issue at bar in this case is whether Cohen may depose plaintiff’s successor attorneys about the contents of and subject matter of these documents, as well as other communications "A waiver may also be found where the client places the subject matter of the privileged communication at issue, or where invasion of the privilege is required to determine the validity of the client’s claim or defense and application of the privilege would deprive the adversary of vital information [internal citations omitted] (Jakobleff v. Cerrato, Sweeney & Cohn, 97 AD2d 834, 835 [2d Dept 1983] [plaintiff did not place her privileged communications with her present attorney at issue, nor was discovery of such communications required to enable defendants to assert a defense merely by bringing an action against her former attorney for legal malpractice]; Credit Suisse First Boston v. Ultrecht-American Fin. Co., 27 AD3d 253, 254 [1st Dept 2007]; Raphael v. Clune White & Nelson, 146 AD2d 762, 763 [2d Dept 1989] [attorney-client privilege between client and attorneys who had taken over case from law firm was not waived by client’s initiating lawsuit. In addition, appellants failed to establish why the disclosure of privileged correspondence was vital to their defense in light of the broad range of materials already supplied by plaintiff]).

However, "that a privileged communication contains information relevant to issues the parties are litigating does not, without more, place the contents of the privileged communication at issue in the lawsuit; if that were the case, a privilege would have little effect [internal quotation marks omitted]" (Deutsche Bank Trust Co. Of Americas v. Tri-Links Inv. Trust, 43 AD3d 56, 64 [1st Dept 2007]; Veras Investment Partners, LLC v. Akin Gump Strauss Hauer & Feld LLP, 52 AD3d 370, 374 [1st Dept 2008] [Court found that it was error for the JHO to have found a waiver on the basis of relevance alone]). Thus, there is no "at issue" waiver where the party asserting privilege "does not need the privileged documents to sustain its cause of action" (Manufacturers & Traders Trust Co. v. Servotronics, Inc., 132 AD2d 392, 397 [4th Dept 1987]; (Deutsche Bank Trust Co. Of Americas v. Tri-Links Investment Trust, 43 AD3d at 64 [at issue waiver occurs when a claim or defense has been asserted by a party that he intends to prove by use of the privileged materials]).

Plaintiff asserts that the testimony of his successor attorneys is not discoverable in this case, as it cannot be said that plaintiff placed his privileged communications with his successor attorneys at issue, or that discovery of these communications is required to enable defendants to assert a defense (see Jakobleff v. Cerrato, Sweeney & Cohn, 97 AD2d at 834). Specifically, plaintiff asserts that, as he did not begin consulting with his successor attorneys until after his termination on November 14, 2003, and, as plaintiff’s successor attorneys did not simultaneously counsel him with Cohen in any post-termination matters, there is no possibility that his successor attorneys have any information that Cohen requires in order to defend plaintiff’s claims that Cohen had impermissible and undisclosed conflicts of interest, or that he failed to act in plaintiff’s best interests regarding Alliance’s defamatory U-5 form and subsequent misleading press releases. In addition, plaintiff notes that he concedes and will stipulate that his successor attorneys have not initiated a "whistleblower" cause of action on his behalf.
  

However, Cohen does not need further discovery of plaintiff’s successor attorneys to determine whether or not these actions were timely taken, as these facts are plain on their face. Thus, plaintiff is entitled to a protective order denying defendant Cohen’s third-party subpoena ad testificandum on his successor attorneys."

Plaintiff sues defendant attorneys for legal malpractice.  Among the claims of damages are financial losses in the underlying case, as well as emotional -pain and suffering-damages based upon outrageous conduct by the attorneys.  Are these non-economic damage claims permissible?

In New York, there may not be claims for non-economic damages arising from legal malpractice.  When one says A"arising" from legal malpractice, it is correct to say that the behavior of the attorneys cannot give rise to emotional damages.  Of course, if the legal malpractice took place in , say, a personal injury action, then the emotional damages which might have been collectable there are part of the overall legal malpractice damages, as they are now economic, and must be calculated as if in a hypothetical judgment that was never obtained.

In Taylor v Paskoff & Tamber, LLP ;2010 NY Slip Op 20405 ;Decided on October 4, 2010 ;Supreme Court, New York County ;Stallman, J.  we see his decision on an offshoot of this issue.  ""Emotional damages are not recoverable in a legal malpractice action." Kaiser v Van Houten, 12 AD3d 1012, 1014 (3rdDept 2004); Risman v Leader, 256 AD2d 1245, 1245 (4th Dept 1998); Dirito v Stanley, 203 AD2d 903 (4th Dept 1994). " A cause of action for legal malpractice does not afford recovery for any item of damages other than pecuniary loss so there can be no recovery for emotional or psychological injury." Wolkstein v Morgenstern, 275 AD2d 635, 637 (1st Dept 2000).

Plaintiffs argue that emotional distress and pain and suffering should be recoverable where the legal malpractice concerns adoption and custody cases. Plaintiffs concede that New York courts have never recognized such an exception, but assert that other states have permitted recovery of emotional damages in legal malpractice actions, citing Kohn v Schiappa (21 NJ Super 235 [1995]), McAvoy v Helikson (277 OR 781 [1977]). Plaintiffs also cite Douglas v Delp (987 SW2d 879 [1999]), which reviewed the cases that have addressed the issue and held that "when a plaintiff’s mental [*3]anguish is a consequence of economic losses caused by an attorney’s negligence, the plaintiff may not recover damages for that mental anguish." Douglas, 987 SW2d at 885.

The Court finds unpersuasive the out-of-state cases that plaintiffs cite. "This Court’s holding in Wolkstein v Morgenstern, (supra), limiting victims of legal malpractice to pecuniary damages, although issued in the context of a claim of legal malpractice in a civil action, amounts to a policy-based ruling not limited to that context." Wilson v City of New York, 294 AD2d 290, 292-293 (1st Dept 2002). Given that plaintiffs conceded that no reported New York case has permitted recovery of emotional damages in a legal malpractice action involving representation in adoption or custody matters, the Court sees no reason to depart from well-established appellate authority. Plaintiffs have not their burden of convincing the Court to depart from well-settled principles of New York law. Accordingly, the Court adheres to its prior rationale, decision, and order, which dismissed defendants’ tenth affirmative defense.

That is not to say that the measure of damages for pecuniary loss in a legal malpractice action could not, as a matter of law, include the amount of pain and suffering that a plaintiff would have recovered in a negligence action but for the malpractice of the attorney representing that plaintiff in the underlying negligence action. Such non-economic loss may be sought in certain kinds of legal malpractice actions unlike that alleged here. For example, should an attorney’s malpractice vitiate a plaintiff’s opportunity to pursue an underlying action in which non-economic loss might have been sought, that non-economic loss would be an element of the damages of economic loss attributable to the attorney’s wrongdoing sought to recovered in the legal malpractice action. Here, there was no underlying tort litigation that the attorney allegedly mishandled.

The decision in this case is straightforward, but gives practitioners little practical advice on how to word and present an expert’s affidavit.  In Giardina v Lippes, 2010 NY Slip Op 06834; Decided on October 1, 2010;  Appellate Division, Fourth Department we see two things.  The first is that the two summary judgment motion rule is not really a rule at all; it is really just guidance to the Court.  Two motions for summary judgment might be entertained after all.
 

The second issue we see is that of the quality of expert opinions in summary judgment.  Once, the rule was that courts scrutinize whether movant demonstrates prima facie entitlement to summary judgment, and if so, whether opponent demonstrates material questions of fact that continue to require resolution by the trier of fact.

The quality of an expert’s opinion was sacrosanct, since facts may not be debated in a motion for summary judgment.  Here, and in many other cases the kicker is when a court feels permitted to rule out the expert’s opinion as "conclusory."  In this case, as in many other appellate decisions, no time is taken to explain why the particular affidavit was "conclusory" rather than permissible.  What makes the difference?

Here, defendant’s expert presented a "good" affidavit, and plaintiff’s expert presented a "conclusory" affidavit in a lawn care products liability case.  How does one tell the difference?

Thomas v Dinkes & Schwitzer, P.C. .2010 NY Slip Op 51666(U) ,Decided on September 23, 2010
Supreme Court, Kings County ,Rivera, J. tells us that a completely inchoherent complaint, while "filled with verbs, nouns, adverbs" etc, will be dismissed. 
 

"On June 16, 2009, plaintiff, proceeding pro se, filed a summons and complaint under index number 14881/09 with the Kings County Clerk’s office. On February 22, 2010, plaintiff filed an amended complaint. On April 15, 2010, plaintiff filed a rewritten amended complaint, which is dated March 9, 2010. Plaintiff’s amended complaint consists of seven pages and eleven paragraphs. Above every paragraph are headings which name various causes of action. The headings above the first, second, sixth, and seventh paragraphs state that the sentences below them are for causes of action in legal malpractice, and the headings [*2]above the third, fourth, fifth, eighth, ninth, tenth, and eleventh paragraphs state that the sentences below them are for causes of action for breach of fiduciary duties, vicarious liability, fraud, intentional infliction of emotional distress, breach of contract, unjust enrichment, and conspiracy, respectively. The sentences in these paragraphs are not consecutively numbered. The complaint, although it contains numerous words, phrases, and sentences, is completely devoid of any coherent allegations of fact.
 

 Defendant strains to read meaning into plaintiff’s complaint, and addresses the requisite elements of causes of action for legal malpractice, breach of fiduciary duties, vicarious liability, fraud, intentional infliction of emotional distress, breach of contract, unjust enrichment, and conspiracy. However, since plaintiff has not satisfied the first requirement of pleading facts which give notice of the transactions or occurrences intended to be proved, there are no facts against which to apply the second requirement of whether the alleged facts state a cognizable cause of action (see CPLR 3013).

For example, "[a] cause of action to recover damages for legal malpractice requires proof of three elements: (1) that the defendant 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 action" (Simmons, 32 AD3d at 465; see also Caruso, Caruso & Branda, P.C. v Hirsch, 41 AD3d 407, 409 [2007]; Edwards v Haas, Greenstein, Samson, Cohen & Gerstein, P.C.,17 AD3d 517, 519 [2005]; J-Mar Serv. Ctr., Inc. v Mahoney, Connor & Hussey, 14 AD3d 482, 483 [2005]). Since plaintiff has failed to satisfy the first hurdle of pleading factual allegations, he cannot meet the requirements of satisfying the above stated necessary showing to allege a sustainable cause of action for legal malpractice.

While, as discussed above, the court must liberally construe factual allegations and will not dismiss a complaint simply because of poor draftsmanship, here, the court cannot strain to give meaning to a pleading which completely fails to state any coherent or comprehensible factual allegations (see CPLR 3013). Thus, inasmuch as plaintiff’s complaint does not state any cognizable claim in law or in equity, it must be dismissed pursuant to CPLR 3211 (a) (7) (see Heffez, 56 AD3d at 526; Simmons, 32 AD3d at 465).

Real Estate contracts are signed in 2009  A clause states that the deposits may be reclaimed (returned to buyers) if the first closing does not take place by September 2008.  Sellers really meant by Weptember, 2009.  First Closing took place in February 2009.  Buyers want $ 16 million in deposits returned.  Sellers want to hold on to the money.  Who made the mistake and who’s to blame.?

Today’s NYLJ discusses in CRP/Extell Parcel I, L.P., v. Andrew Cuomo, in his capacity as Attorney General of the State of New York,  10-1929-cv,U.S. Court of Appeals, Second Circuit
which "The mistake in the offering documents that triggered the dispute said the buyers could get their deposits back if the first closing in the condominium, The Rushmore, did not occur by Sept. 1, 2008, when, in fact, the year was supposed to read Sept. 1, 2009. The first closing did not occur until February 2009.

Attorney General Andrew Cuomo sued the developers to force them to release the money to proposed buyers of units in the 41-story luxury condominium at 64th Street and Riverside Boulevard on the Upper West Side.

Judge George Daniels denied a motion by CRP/Extell for preliminary injunctive relief on May 19.

"Stroock has filed an interpleader action in federal court seeking the court’s direction on what to do with the monies.

Marc Held of Lazarowitz & Manganillo represents two buyers, one in the case before Judge Daniels and a second in a state case in which he named Stroock as a co-defendant, charging fraud and third-party malpractice. The firm also was named for its role as escrow agent in the case, Coffey v. CRP/Extell I and Stroock & Stroock & Levan, 114073-2009. "

One of the more intriguing aspects of the attorney fee and disputes field is the interplay of a strongly put rule to attorneys, and the consequences of ignoring that rule.  The rule:  "You must have a retainer agreement."  What happens when an attorney sues for fees, yet failed to have a retainer agreement as defined in 22 NYCRR 1215 et seq ?  Really nothing.  The Second Department in Seth Rubenstein PC v. Ganea, 41 AD3d 54 (2nd Dept, 2007)

"22 NYCRR 1215.1, otherwise known as the "letter of engagement rule," was promulgated by joint order of the appellate divisions, and applies to all civil actions where the amount in controversy is $3,000 or more. The rule requires attorneys to provide all clients with a written letter of engagement explaining the scope of legal services, the fees to be charged, billing practices to be followed, and the right to arbitrate a dispute under Rules of the Chief Administrator of the Courts (22 NYCRR) part 137 (see 22 NYCRR 1215.1 [b]; see generally Grossman v West 26th Corp., 9 Misc 3d 414 [2005]). The rule is also satisfied if the attorney and client execute a formal written retainer agreement reflecting the same information as required for a letter of engagement (see Beech v Gerald B. Lefcourt, P.C., 12 Misc 3d 1167[A] [2006]). The rule became effective on March 4, 2002 (see 22 NYCRR 1215.1 [a]; Brown Rudnick Berlack Israels LLP v Zelmanovitch, 11 Misc 3d 1090[A] [2006]), approximately seven weeks before Ganea retained Rubenstein for the guardianship matter underlying this appeal.

The language of 22 NYCRR 1215.1 contains no express penalty for noncompliance (see 22 NYCRR 1215.1; Beech v Gerald B. Lefcourt, P.C., supra; Matter of Feroleto, 6 Misc 3d 680, 682 [2004]). Indeed, the intent of rule 1215.1 was not to address abuses in the practice of law, but rather, to prevent misunderstandings about fees that were a frequent source of contention between attorneys and clients. This intent was described by Chief Administrative Judge Jonathan Lippman upon the rule’s adoption, that "this [rule] is not about attorney discipline in any way, shape or form, [*5]and we certainly do not expect in any{**41 AD3d at 61} significant degree there to be a large number of disciplinary matters coming out of this rule" (Caher, Rule Requires Clients Receive Written Letters of Engagement, NYLJ, Jan. 22, 2002, at 1, col 1, and quoted in Matter of Feroleto, supra at 683). The purpose of the rule therefore is to aid the administration of justice by prodding attorneys to memorialize the terms of their retainer agreements containing basic information regarding fees, billing, and dispute resolution which, in turn, minimizes potential conflicts and misunderstandings between the bar and clientele. "

Now, in Roth Law Firm, PLLC v Sands  we see the tortured path analysis must take.  Justice Madden of Supreme Court, New York County must decide what services were being offered by plaintiff law firm, who received the services and in what setting the services were offered, and then, determine the quantum meruit aspects of the whole case.

Plaintiff suffers a personal injury trip and fall, and hires attorney 1 to sue the landlord.  The landlord is sued.  Case continues and eventually an inquest is ordered.  At the inquest, the Court tells the attorneys that they need medical records.  This seems to be an elementary point, since it’s well known that one needs medical records at an inquest.  Case is marked off.  Time passes by and the client becomes disenchanted.  She files a Disciplinary complaint.  Law firm makes motion to restore this pre-note case.  Motion is denied.  That’s the last client ever hears of law firm.  Disciplinary complaint dismissed.

Client sued defendants in 2010 and the motions to dismiss for statute of limitations comes on before Justice Gische in Supreme Court, New York County.  In Reynolds v Ross, Suchoff, Hankin, Maidenbaum, Handwerker & Mazel, P.C  Justice Gische has to choose between two opposing narratives. Plaintiff’s is that as the law firms formed and ended, her case was lost in the cracks, and no one ever told her the case was actually dismissed.  Law firms view is that she knew and thus the S/L was running against her.

Court dismissed the case, finding that plaintiff knew as of 2005 that her case was dismissed and that the S/L thus started to run.  Legal malpractice action, dismissed.