What is a question of judgment, what is neglect of a case and what is ignorance of the rules in legal malpractice?  Sometimes this is an easy question, other times, slightly more complex. in  MCCORD -v.- O’NEILL,;  No. 08-3096-cv ;  Summary Order;  UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT;2010 U.S. App. LEXIS 5139 we see the 2d Circuit’s general definitions;
 

"Construing all the facts in McCord’s favor, an independent review of the record shows that the district court properly granted O’Neill’s motion for summary judgment. "To state a claim for legal malpractice under New York law, a plaintiff must allege: (1) attorney negligence; (2) which is the proximate cause of a loss; and (3) actual damages." Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006). Under this standard, "[a] complaint that essentially alleges either an ‘error of judgment’ or a ‘selection of one among several reasonable courses of action’ fails to state a claim for malpractice." Id. (quoting Rosner v. Paley, 65 N.Y.2d 736, 481 N.E. 2d 553, 554, 492 N.Y.S.2d 13 (N.Y. 1985)). And, in general, "an attorney may only be held liable for ‘ignorance of the rules of practice, failure to comply with conditions precedent to suit, or for his neglect to prosecute or defend an action.’" Id. (quoting Bernstein v. Oppenheim & Co., 160 A.D.2d 428, 554 N.Y.S.2d 487, 489-90 (N.Y. App. Div. 1st Dep’t 1990)).

Here, McCord’s malpractice claim rested on the allegation that O’Neill’s failure to contact Ron Lawrence, another employee of McCord’s former employer, as a possible witness constituted [*4] negligence, and that, had Lawrence been a witness in his case, the district court would not have granted Airborne’s motion for judgment of a matter of law and dismissed McCord’s discrimination claims. O’Neill met his initial burden of demonstrating that his decision was a reasonable strategic choice by showing that the only information regarding Lawrence in McCord’s possession at the time was Lawrence’s "Summary of Disciplinary/Attendance History." This document showed that Lawrence, a Caucasian, had received much the same disciplinary treatment as McCord, undermining McCord’s contention that calling Lawrence would have enabled him to demonstrate that his employer treated him less favorably than a similarly situated employee outside of his protected group. See Mandell v. County of Suffolk, 316 F.3d 368, 379 (2d Cir. 2003). As the district court correctly observed, McCord adduced no evidence in response suggesting that O’Neill’s failure to contact Lawrence was negligent, or that this decision could have proximately resulted in the court’s unfavorable decision in Hill."
 

Clients depend on attorneys to advise them on the law.  Quick, what do you know about usury?  Do you know enough competently to advise a client, or just enough to get yourself into trouble?  Here is a legal malpractice story about the later.Theresa Striano Revocable Trust v Blancato
2010 NY Slip Op 02773 ;Decided on March 30, 2010 ;Appellate Division, Second Department
 

Attorney is retained to perform two mortgage transactions, and notes that the interest rate is 17%.  Usury, he wonders?  He asks the borrower’s attorney, who tells him not to worry, its a commercial transaction.  Naturally, it all falls apart soon enough.

"Before the closing documents were finalized, the defendant Richard T. Blancato, who was the plaintiffs’ attorney, observed that the 17% annual interest rate on the loans might be usurious under General Obligations Law § 5-501 and Banking Law § 14-a, which generally fix the maximum annual interest rate which may be charged for these types of transactions at 16%. He shared his concern with the borrower’s counsel, who assured him that the rate was not usurious because the loans were commercial in nature. Based on this explanation, the defendant was persuaded that no usury issue existed, and never notified Striano about the potential problem.
 

Here, the defendant’s reliance upon the advice of the borrower’s attorney reflects a failure to exercise ordinary reasonable skill (see Shopsin v Siben & Siben, 268 AD2d 578; McCoy v Tepper, 261 AD2d 592, 593; Logalbo v Plishkin, Rubano & Baum, 163 AD2d 511, 514). As the plaintiffs’ current counsel correctly notes, even a cursory review of the relevant statutes would have revealed that the proposed loans did not fall under any usury exceptions. Additionally, the defendant’s efforts to paint his actions in a favorable light are unavailing, as his recent averments directly contradict both his 2008 affirmation and the averments of Thomas Fatato, Striano’s brother, who submitted an affidavit on the defendant’s behalf (see Denicola v Costello, 44 AD3d 990; Telfeyan v City of New York, 40 AD3d 372, 373).

The defendant contends that Fatato ultimately was responsible for the decision to provide the loans despite the potential usury problem. Assuming, however, that Fatato acted as Striano’s agent and was aware of the borrower’s counsel’s advice (such that Fatato’s knowledge can be imputed to Striano), the defendant "may not shift to the client the legal responsibility [he] was specifically hired to undertake because of [his] superior knowledge" (Hart v Carro, Spanbock, Kaster & Cuiffo, 211 AD2d 617, 619).

Accordingly, the plaintiffs established, prima facie, that the defendant acted negligently with respect to the usury issue. Issues of fact exist, however, as to whether Striano was involved in certain decisions regarding the handling of the mortgage foreclosure actions filed against the borrower and, if so, whether those decisions constituted an intervening cause of the plaintiffs’ injuries (see Eisenberger v Septimus, 44 AD3d 994, 995; Brooks v Lewin, 21 AD3d 731, 734; Selletti v Liotti, 22 AD3d 739, 740; Blank v Harry Katz, P.C., 3 AD3d 512, 513). The Supreme Court’s denial of the plaintiffs’ motion was, therefore, proper. "

Associate is hired and assigned to a case. A mistake of malpractice proportions takes place, and the associate leaves to form his own firm. He takes the case with him, and is alleged to have made more mistakes of malpractice proportion. Is the Original law firm still responsible?"

in this case, yes. In Red Hook/Gowanus Chamber of Commerce, Inc. v Brightbill ;2010 NY Slip Op 02719 ; Decided on April 1, 2010 ; Appellate Division, First Department .

"In preparing the CPLR article 78 proceeding seeking to vacate a determination approving a variance, Brightbill allegedly committed malpractice in failing to name a necessary party. Brightbill subsequently left the firm and formed his own firm, which was substituted for appellants in prosecuting plaintiff’s claims. Additional acts of malpractice were allegedly committed in connection with Brightbill’s subsequent representation of plaintiff, and appellants maintain that they cannot be held liable for the alleged negligence of Brightbill and his firm.

"[A]n intervening act which is a normal consequence of the situation created by a defendant cannot constitute a superseding cause absolving the defendant from liability" (Lynch v Bay Ridge Obstetrical & Gynecological Assoc., 72 NY2d 632, 636-637 [1988]). Here, the motion court properly determined that appellants failed to sustain their prima facie burden of establishing that the alleged negligence of Brightbill and his firm was not a normal consequence of the situation created by the initial purportedly negligent act of failing to name a necessary party in the article 78 proceeding. In this regard, we note that plaintiff does not allege that the motion to amend the petition to request a remand rather than vacatur of the variance was an act [*2]of malpractice.

We have considered appellants’ remaining arguments, including that they cannot be held liable because their conduct could not be considered the proximate cause of plaintiff’s damages, and find them unavailing. "

We’ve discussed whether courts disfavor law suits against attorneys in the past.  It sometimes appears that Courts are more willing to grant CPLR 3211 (a)(1) motions for attorneys than for the general run of cases.  While all agree that the "case within a case" presents unique barriers to litigation, one must remember the human factor too.  After all, the rules of legal malpractice are written by attorneys, concerning attorneys and administered by attorneys. 

In any event, here is a case in which the Appellate Division reversed Supreme Court’s dismissal of a legal malpractice complaint, sua sponte, when it was unwarranted, Rotering v Satz ;2010 NY Slip Op 02120 ; Decided on March 16, 2010 ; Appellate Division, Second Department .  "The Supreme Court, sua sponte, directed dismissal of the complaint on the basis, inter alia, that the plaintiff failed to file proof of service of the summons and complaint, citing CPLR 306-b. Pursuant to that statute, a court may only dismiss a complaint for failure to effect timely service of process "upon motion," not on its own initiative (see CPLR 306-b). The defendants never moved to dismiss the complaint (see CPLR 3211[a][8]; [e]). Thus, the Supreme Court erred in doing so sua sponte (see Daniels v King Chicken & Stuff, Inc., 35 AD3d 345). "

Continuing our discussion of Decker v. Nagel Rice LLC, 09 Civ. 9878 from yesterday, we see the proposed plaintiff’s attorney, Mr. Lowy, being denied admission pro haec vice. One reason for the denial by judge Scheindlin was the Advocate-Witness Rule.  But that was  only one reason.

A second reason was the announcement that Mr. Lowy was to become a third-party defendant.  A strongly held belief in the world of litigation is that when an attorney sees something wrong, he/she looks for someone to blame. Third-party actions in legal malpractice are all about blame., sometimes after trying to fix a problem.

Here, Mr. Lowy will also be disqualified as plaintiff’s attorney should he become a third-party defendant.  This situation perennially arises when the eventual plaintiff’s attorney in a legal malpractice case earlier tries to fix the problem [contra to the attorney rule] tries to fix the underlying problem, but fails.  After this failure, plaintiff turns to legal malpractice with that attorney.  Problems ensue.

"Defendants oppose the foreign plaintiffs’ pro haec vice motion on the grounds that Lowy should be disqualified from representing plaintiffs. According to Defendants, Lowy (1) is a material fact witness; (2) will be named as a third-party defendant for contribution and/or indemnification; and (3) was sued by one of the plaintiffs in this action for legal malpractice in connection with the In re Ski Train Litigation and made sworn statements adverse to that plaintiff. For all three reasons, Lowy is disqualified.

First, Lowy is disqualified under the advocate-witness rule. The malpractice allegedly occurred when Defendants failed to move to certify the foreign plaintiffs as an opt-out class in either 2004, 2005, or 2006 or move this Court for relief from its judgment dismissing Siemens AG. As co-counsel to the foreign plaintiffs in 2005 and responsible for the foreign plaintiffs’ unsuccessful appeal, Lowy had direct, personal, involvement in the alleged acts of malpractice. Even counsel for the foreign plaintiffs recognizes that Lowy had at least some involvement arguing only that "he was not involved in the case at all at the time when most of the acts of malpractice occurred." 

In addition, the advocate-witness rule is intended to address four concerns. All are present here. Lowy declares that he will testify that Defendants engaged in malpractice while he and his co-counsel attempted to rectify those mistakes.  Given Lowy’s involvement with the underlying lawsuit and the prior malpractice action brought against him, this testimony may cause jurors and this Court to fear that he is distorting the truth as a result of bias in favor of plaintiffs or to protect his own interests. Defendants’ counsel will vigorously cross-examine Lowy regarding the actions he took or failed to take as the foreign plaintiffs’ counsel in the In re Ski Train Litigation. Defendants’ counsel will seek to impeach Lowy’s credibility with regard to whether it was Defendants or Lowy that caused the foreign plaintiffs’ alleged harm. Such cross-examination places opposing counsel in a difficult situation and will require Lowy to vouch for his own credibility. Lowy’s simultaneous representation of plaintiffs and his need to defend his own conduct will "’blur the line between argument and evidence [such] that the jury’s ability to find facts [will be] undermined.’"

Furthermore, Lowy’s testimony is both necessary and prejudicial.  Lowy did not merely play a passive role in the In Re Ski Train Litigation. Instead, Lowy was one of only three attorneys — one of which was disqualified in 2007 — that zealously represented the foreign plaintiffs during the precise time when the alleged malpractice was ongoing. Lowy will need to explain why he did not take steps to minimize plaintiffs’ alleged harm, such as by seeking certification of the foreign plaintiffs as an opt-out class in the wake of the Second Circuit opinion or pursuing a judgment on appeal with regard to the dismissal of the claims against Siemens AG. Any such testimony will necessarily be adverse to plaintiffs’ position and undermine their claim that Defendants’ malpractice caused their harm. Because his testimony is both necessary and prejudicial, I find that Lowy must be disqualified under the advocate-witness rule. 

Second, I find that Lowy’s presence as both an attorney and a third-party defendant presents a conflict of interest in violation of Rule 1.7 and Canons 5 and 9. Defendants intend to name Lowy as a third-party defendant for contribution and/or indemnification. 45 Defendants contend that Lowy should be disqualified from representing plaintiffs due to the conflict of interest presented by his position as both plaintiffs’ counsel and a third-party defendant. Plaintiffs attempt to rebut disqualification on this ground by asserting that whether Lowy will be named a third-party defendant is "mere speculation." 46 I disagree. Given Lowy’s prior involvement in this case during the time period in question and Defendants’ stated intention to name him as a third-party defendant, I find that it is a near certainty, and not merely speculative, that he will be named as a third-party defendant."
 

An Ski-Train fire killed 155 people in Kaprun, Austria and left twelve survivors. American and foreign survivors and relatives brought multiple lawsuits in federal court called "In re Ski Train Litigation").  That case went through some permutations, was certified as a class action, then partially de-certified and in the end, the foreign plaintiff cases were dismissed.  Why and how they were dismissed is now the subject of a legal malpractice case in Southern District of New York.

In a decision this week,Decker v. Nagel Rice LLC, 09 Civ. 9878 Judge Scheindlin denied the request of one attorney to be admitted pro haec vice as a plaintiff’s attorney on the Advocate-Witness Rule.  Judge Scheindlin writes:

"Attorneys appearing before this Court must abide by the New York State Rules of Professional Conduct (the "Rules"). 32 Rule 3.7(a) addresses the situation where an attorney may be a witness. Commonly referred to as the "advocate-witness" rule, Rule 3.7(a) states:

A lawyer shall not act as advocate before a tribunal in a matter in which the lawyer is likely to be a witness on a significant issue of fact unless: (1) the testimony relates solely to an uncontested issue; (2) the testimony relates solely to the nature and value of legal services rendered in the matter; (3) disqualification of the lawyer would work substantial hardship on the client; (4) the testimony will relate solely to a matter of formality, and there is no reason to believe that substantial evidence will be offered in opposition to the testimony; or (5) the testimony is authorized by the tribunal.

The advocate-witness rule is based upon concerns that:

(1) the lawyer might appear to vouch for his own credibility; (2) the lawyer’s testimony might place opposing counsel in a difficult position when she has to cross-examine her lawyer-adversary and attempt to impeach his credibility; (3) some may fear that the testifying attorney is distorting the truth as a result of bias in favor of his client; and (4) when an individual assumes the role of advocate and witness both, the line between argument and evidence may be blurred, and the jury confused. 33

"In order to disqualify an attorney on the basis of the advocate-witness rule, a party must demonstrate that the testimony is both necessary and substantially likely to be prejudicial." 34 "Prejudice in this context means testimony that is ‘sufficiently adverse to the factual assertions or account of events offered on behalf of the client, such that the bar or the client might have an interest in the lawyer’s independence in discrediting that testimony.’"

When a tort is committed outside of New York and a non-resident sues within the State of New York, courts apply the borrowing statute, especially with regard to the statute of limitations.  As an example, Kat House Prods., LLC v Paul, Hastings, Janofsky & Walker, LLP ; 2010 NY Slip Op 02489 ; Decided on March 25, 2010 ; Appellate Division, First Department  reminds us that although the NY statute of limitations is 3 years, the California statute of limitations for legal malpractice is only 1 year.  In this case, the Court applied the California time limits.
 

"When a nonresident sues in New York’s courts on a cause of action accruing outside the state, our "borrowing statute" (CPLR 202) requires that the cause of action be timely under the limitation periods of both New York and the jurisdiction where the claim arose (see Global Fin. Corp. v Triarc Corp., 93 NY2d 525, 528 [1999]). Generally, a tort action accrues "at the time and in the place of the injury," and "[w]hen an alleged injury is purely economic, the place of injury usually is where the plaintiff resides and sustains the economic impact of the loss" (id. at 529).

Applying these principles, it is clear that plaintiffs’ legal malpractice claim accrued in California, where their residences and principal place of business were located and the alleged economic injury was sustained, at the latest, in March 2006. Under that state’s applicable one-year statute of limitations (Cal Civ Proc Code § 340.6), this action, commenced in November 2007, was time-barred. "

We often present cases here from the plaintiff’s point of view.  Here is a case by attorney v. insurance broker over the purchase of "nose" insurance [the opposite of tail insurance.  The attorney wanted to procure "a policy, covering all acts of malpractice prior to the effective date of the policy, irrespective of the date such acts occurred, and irrespective of the date the claim stemming from such acts of malpractice is first interposed."  She did not receive such coverage, although the policy was renewed three times.  Attorney sues broker, and broker moves to dismiss,

Justice Goodman, writing in Steier v. Todd Pallack Insurance runs up against an interesting situation.  Plaintiffs apparently put up an argument which is absolutely not supported by the complaint. "Citing to its complaint, plaintiffs maintain that the action is based on an insurance brokers’ failure to obtain coverage specifically requested by the insured, although as defendants note, the complaint supports no such argument." 

The Court permits plaintiff to ‘amplify" and then asks for more briefs on whether this departure is tort or contract, and if so, whether subject to a continuing duty analysis.  More soon…