Unions provide attorneys and legal coverage for their members.  Sometimes employers provide attorneys for their employees.  Do they have legal malpractice responsibility to the member-employee ?  Does the attorney have a legal malpractice responsibility to the client, in the absence of privity?  Some answers are set forth in   NADA, -against- 1199 SEIU HEALTH CARE EMPLOYEES UNION, 09 Civ. 5796 (SAS);UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2010 U.S. Dist. LEXIS 12061;February 11, 2010,

Take this situation.  Client is a member of a union that provides legal free attorneys to its members. Perhaps the client needs an attorney for a closing, or to handle a simple contract.  In most cases, the attorney and the client do not sign a retainer agreement.  The attorney is paid, in some fashion, by the union, or in some cases, by the employer.  Then something goes wrong.  The main doctrinal problem in a legal malpractice analysis is that there is no professional relationship between the attorney and the client.  Resort  to an argument that the relationship is "so close" as to resemble privity often fails.  What then?

A suit against the union for lack of fair representation, or against the employer for breach of a collective bargaining agreement is one resort.  If that is the action, what is the statute of limitations?

Judge Scheindlin in Nada tells us: ‘Liberally construed, Nada alleges that 1199 has breached its duty of fair representation. 12 In DelCostelio v. Teamsters, the Supreme Court held that the six-month statute of limitations of section 10(b) of the National Labor Relations Act applies to cases in which employees sue both their employer for breach of the collective [*5] bargaining agreement pursuant to section 301(a) of the Labor Management Relations Act, and their union for breach of its duty of fair representation. 13 In reaching this conclusion, the Court rejected the notion that state statute of limitation periods for vacating an arbitration award and for legal malpractice were applicable to such claims. 14 The Second Circuit has held "DelCostello to require that the § 10(b) six-month limitations period also be applied to unfair representation claims standing alone…."

"Here, Nada asserts that 1199 breached the duty of fair representation by failing to remedy the pay differential for certain of the former-144 members through the committee created by the May 2004 side letter agreement. Nada was aware of this claim on October 30, 2007, when he signed a grievance form complaining about 1199’s failure to secure the raises and benefits mentioned in that agreement. Therefore, the six-month limitation period in which to bring this cause of action expired, at the latest, on April 30, 2007. Because Nada did not commence this action until June 5, 2009, it is untimely."

Once, the Corning glass works were a behemoth in upstate New York.  World class, cutting edge [no pun], and hugely successful, ownership of Corning stock was both a good investment and an emblem of upstate NY industriousness.  This case, Matter of Hsbc Bank U.S.A. v Jesse T. Littleton, 2010 NY Slip Op 01099 ; Decided on February 11, 2010 ; Appellate Division, Fourth Department demonstrates both the economic downturn in NY as well as the principal of trusts and releases.
Beneficiaries of a trust took a big hit in the value of Corning stock held in the trust.  The Corning stock comprised 80% of the corpus, and when its value went down, it hurt.  We pick up from the 4th Department opinion:

"The accounting revealed significant declines in the value of Corning stock, which constituted more than 80% of the trust corpus. Petitioners signed their respective releases, which provided that HSBC was forever absolved of all liability for the handling of trust assets.

More than three years later, petitioners commenced this proceeding seeking to set aside the releases, and Surrogate’s Court granted the motions of HSBC and respondent law firm to dismiss the petition. We affirm.

According to petitioners, HSBC and respondent law firm committed fraud by failing to disclose the possible legal effect of the accounting and the execution of the releases. Contrary to petitioners’ contention, however, the petition fails to state a cause of action for fraud or constructive fraud against either HSBC or respondent law firm because it fails to make a "factually supported allegation" of misrepresentation (Pope v Saget, 29 AD3d 437, 441, lv denied 8 NY3d 803; see Simmons v Washing Equip. Tech., 51 AD3d 1390, 1391-1392). We further conclude that the Surrogate properly determined that the breach of fiduciary claim against respondent law firm was, in essence, a claim for legal malpractice and thus was barred by the three-year statute of limitations (see CPLR 214 [6]; Harris v Kahn, Hoffman, Nonenmacher & Hochman, LLP, 59 AD3d 390). Even assuming, arguendo, that the petition states a separate claim for breach of fiduciary duty against respondent law firm, we conclude that such claim arises from the same facts as those from which the legal malpractice claim arises, and thus the Surrogate properly dismissed that claim as duplicative of the legal malpractice claim (see TVGA Eng’g, Surveying, P.C. v Gallick [appeal No. 2], 45 AD3d 1252, 1256).

Finally, we conclude that the Surrogate properly dismissed the breach of fiduciary duty claim against HSBC. HSBC fulfilled its fiduciary duty by providing petitioners with a full accounting of the trust, and petitioners failed to object to the accounting and executed releases waiving their rights against HSBC (see Matter of Hunter, 4 NY3d 260, 270-271; Matter of Schoenewerg, 277 NY 424, 427-428). "

When one starts to read a case, and the plaintiff is pro-se, look out for common mistakes within.  In Williams v Bushman ;2010 NY Slip Op 00840 ;Decided on February 2, 2010 ;Appellate Division, Second Department  we see at least two.  Here is the story line:
 

"The plaintiff, Nathaniel N. Williams, retained the law firm of Goldberg, Scudieri & Block, P.C. (hereinafter the Goldberg firm), to defend him in a mortgage foreclosure action. Franklin moved for summary judgment on the complaint, submitting in support of its motion the executed mortgage and evidence of Williams’s default. In opposition, Mark K. Lindenberg, an attorney associated with the Goldberg firm, submitted an affidavit from Williams asserting, inter alia, that Williams had tendered a notice rescinding the mortgage to Franklin’s predecessor in interest, Interstate Resource Corporation (hereinafter Interstate). Williams did not have a mail receipt or any other proof that the rescission notice had been sent to Interstate. Williams also asserted that Interstate had used unspecified "high pressure tactics" to induce him "to execute a high rate note and mortgage." In July 2000 the Supreme Court, Kings County, granted Franklin’s motion for summary judgment. 

Problem 1

Williams subsequently retained the defendant, David M. Bushman, to prosecute an action in the Supreme Court, Rockland County, to recover damages for legal malpractice against Lindenberg and the Goldberg firm. In July 2004 the Supreme Court granted the motion of Lindenberg and the Goldberg [*2]firm to dismiss the complaint as time-barred. 

Problem 2

Williams then commenced the instant action alleging legal malpractice against Bushman on the ground that he failed to commence the legal malpractice action against Lindenberg and the Goldberg firm within the statute of limitations. Bushman moved for summary judgment dismissing the complaint, arguing that Williams could not show that he would have been successful in the underlying legal malpractice action but for Bushman’s alleged error, because he could not show that Lindenberg committed malpractice or that any actions or omissions on Lindenberg’s part were a proximate cause of the unfavorable resolution of the foreclosure proceeding. In an order dated May 21, 2008, the Supreme Court denied Bushman’s motion for summary judgment.

Following the denial of summary judgment, Bushman moved to enforce a settlement agreement, which he alleged had been approved by Williams. In an order dated April 17, 2009, the Supreme Court denied Bushman’s motion, holding that, although a settlement was apparently reached in principle, "it was never finalized by the execution of the settlement documents."  Plaintiff resisted taking a settlement from defendant.
 

Problem 3

 Through, inter alia, the affidavit of an attorney who specialized in real estate law, Bushman made a prima facie showing that Lindenberg’s alleged omissions did not constitute a failure to exercise the skill and knowledge commonly possessed by an attorney, and were not the cause of Franklin’s motion for summary judgment being granted. That motion was granted because Franklin submitted validly executed mortgage documents and evidence of Williams’s default, and Williams could not raise a triable issue of fact (see Wells Fargo Bank, N.A. v Webster, 61 AD3d 856).

Plaintiff’s complaint dismissed.

Courts are closed today and on Monday for the President’s weekend.  Nevertheless, today we present an Appellate Term case on the interplay of fee dispute arbitration and legal malpractice.

Calabro & Assoc., P.C. v Katz ;2010 NY Slip Op 50192(U) ;Decided on February 9, 2010 ; Appellate Term, First Department .  This was a garden or varietal version of a fee demand, legal malpractice counterclaim.  Client successfully seeks dismissal of the case in favor of Part 137 fee arbitration, but then roundly loses the balance of his argument.  From the decision:
 

"As defendant conceded in his opposition papers below, his counterclaims alleging that plaintiff over-billed him are properly addressed in the attorneys’ fees arbitration proceeding, since the arbitrators must determine the reasonableness of the fees based on "all relevant facts and circumstances" (22 NYCRR 137.0) and those counterclaims relate to a potential "adjustment of the fee" (22 NYCRR 137.1[b][4]). The counterclaim for legal malpractice should have been dismissed. Plaintiff made a prima facie showing that it was not negligent and that any alleged negligence did not proximately cause defendant’s claimed damages. In opposition, defendant failed to raise a triable issue on either score. On the issue of plaintiff’s alleged negligence, defendant did not submit any competent evidence showing that plaintiff failed to exercise the degree of care commonly exercised by a member of the legal profession (see Orchard Motorcycle Distrib., Inc. v Morrison Cohen Singer & Weinstein, LLP, 49 AD3d 292 [2008]; Schadoff v Russ, 278 AD2d 222 [2000]). Moreover, defendant failed to show that "but for" plaintiff’s alleged negligence defendant would have obtained a more favorable result in the underlying landlord-tenant proceeding or would have successfully sold his business to a third-p[*2]arty (see AmBase Corp. v Davis Polk & Wardell, 8 NY3d 428 [2007]; Davis v Klein, 88 NY2d 1008 [1996]). "

Actually we’re a little shocked at the facts of this matrimonial action involving Thomas Liotti.  in Coccia v Liotti ;2010 NY Slip Op 00917 ; Decided on February 9, 2010 ; Appellate Division, Second Department  we see some very unusual language from the Appellate Division.  Beyond reinstating [or more correctly put, modifying] the legal malpractice claims, the AD basically granted summary judgment wiping out attorney fees by Liotti on the almost unheard of use of a disbarred attorney and misleading the client into thinking that the attorney was in good standing.
 

Rather than explain, here is the decisional language:

"The Supreme Court also erred by, in effect, upon renewal, vacating the determination in the order entered September 13, 2007, denying that branch of the initial cross motion which was for summary judgment dismissing the fourth cause of action to the extent that it was based upon a failure to render itemized bills, and in thereupon granting that branch of the initial cross motion. Although the court appropriately reasoned that noncompliance with 22 NYCRR 1400.2 does not require an attorney to return fees already paid to him or her for services properly rendered (see Mulcahy v Mulcahy, 285 AD2d 587, 588; Markard v Markard, 263 AD2d 470, 471), this cause of action sought the return of counsel fees already paid by the plaintiff not only on the ground that the defendant failed to render itemized bills in compliance with 22 NYCRR 1400.2 and 1400.3, but also on the ground that the defendant breached the retainer agreement by virtue of the manner, form, substance, and timeliness of his billing. Based on the contents of the defendant’s submissions on the initial cross motion, the defendant failed to make a prima facie showing that he complied with the provision in the retainer agreement related to the manner of billing. Thus, the court erred in awarding summary judgment to the defendant dismissing this cause of action to the extent that it was based upon a failure to render itemized bills.

The Supreme Court properly, in effect, upon renewal, vacated the determination in [*5]the order entered September 13, 2007, denying that branch of the initial cross motion which was for summary judgment dismissing the fifth cause of action to recover damages for fraudulent inducement, based upon the defendant’s alleged misrepresentation that he would prosecute an appeal from an order in the underlying malpractice action, and in thereupon granting that branch of the initial cross motion. "In an action to recover damages for fraud, the plaintiff must prove a misrepresentation or a material omission of fact which was false and known to be false by [the] defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury" (Lama Holding Co. v Smith Barney, 88 NY2d 413, 421). The plaintiff alleged that she was fraudulently induced into executing the retainer agreement by the defendant’s alleged promise that he would prosecute an appeal from an order in the underlying matrimonial action. She also asserted that she was informed during the course of the representation that the defendant’s firm would address the appeal, but that the defendant failed to prosecute the appeal. Since the plaintiff is, in essence, arguing that the defendant breached the retainer agreement, the Supreme Court appropriately awarded summary judgment to the defendant dismissing this cause of action. " [A] cause of action to recover damages for fraud will not arise when the only fraud alleged relates to a breach of contract’" (Biancone v Bossi, 24 AD3d 582, 583, quoting Rosen v Watermill Dev. Corp., 1 AD3d 424, 426). Further, a representation of opinion or a prediction of something which is hoped or expected to occur in the future does not sustain an action to recover damages for fraud (see Chase Invs. v Kent, 256 AD2d 298, 299).

However, the Supreme Court erred by, in effect, upon renewal, vacating the determination in the order entered September 13, 2007, denying that branch of the initial cross motion which was for summary judgment dismissing the sixth cause of action to recover damages for fraudulent inducement, based upon the defendant’s alleged misrepresentation that the person who would be substantially responsible for her case was an attorney. The plaintiff alleged that she later learned that such person was a disbarred attorney, prohibited from practicing law, and that the defendant fraudulently concealed this information. Contrary to the Supreme Court’s conclusion, we find that the defendant failed in his initial submissions to establish, as a matter of law, that the plaintiff did not justifiably rely upon his representation of this individual’s status as an attorney in good standing.

The Supreme Court erred in denying those branches of the plaintiff’s cross motion which were for summary judgment dismissing the first, second, and third counterclaims seeking to recover outstanding counsel fees. The Supreme Court, in denying these branches of the plaintiff’s cross motion, reasoned that questions of fact existed as to whether the defendant was justifiably discharged for cause, based upon his alleged failure to perfect and prosecute the appeal from the matrimonial order. However, as the plaintiff correctly points out, this was not the only basis upon which she sought summary judgment dismissing these counterclaims. The plaintiff also argued to the Supreme Court, inter alia, that these counterclaims should be dismissed since, had she known that a disbarred attorney was working on her case, she would have been justified in discharging the defendant for cause.

"[A] client has an absolute right, at any time, with or without cause, to terminate the attorney-client relationship by discharging the attorney" (Campagnola v Mulholland, Minion & Roe, 76 NY2d 38, 43; see Solomon v Bartley, 203 AD2d 449). Where the discharge is for cause, the attorney has no right to compensation, and may not assert a retaining lien on the client’s file (see Campagnola v Mulholland, Minion & Roe, 76 NY2d at 43; Orendick v Chiodo, 272 AD2d 901; Matter of Leopold, 244 AD2d 411). "Misconduct that occurs before an attorney’s discharge but is not discovered until after the discharge may serve as a basis for a fee forfeiture" (Orendick v Chiodo, 272 AD2d at 902). An attorney may be discharged for cause where he or she has engaged in misconduct, has failed to prosecute the client’s case diligently, or has otherwise improperly handled the client’s case or committed malpractice (see e.g. Costello v Kiaer, 278 AD2d 50; Hawkins v Lenox Hill Hosp., 138 AD2d 572).

In her cross motion, the plaintiff alleged that the disbarred attorney was closely involved in her case, and reassured her that he was working on her appeal from the matrimonial [*6]order. The plaintiff alleged that the disbarred attorney not only had contact with her, but also dealt with the husband’s attorney and with the attorney for the children who had been appointed by the court. She claimed that the defendant seemed unfamiliar with her case, consulted with the disbarred attorney, and sought advice from the disbarred attorney when it was necessary to appear in court. The time records which the plaintiff submitted on her cross motion indicated that the defendant intended to bill her for conferring or meeting with the disbarred attorney on several occasions, that the disbarred attorney drafted memos and notes and that, on one occasion, the disbarred attorney accompanied the defendant to court. The plaintiff alleged in her affidavit that, while in court, the disbarred attorney consulted with her and the defendant "on how to handle whatever was in front of the court at that time."

Based upon the plaintiff’s allegations, it appears that the disbarred attorney was engaged in the practice of law (see Matter of Rowe, 80 NY2d 336, 341-342, cert denied sub nom. Rowe v Joint Bar Assn. Grievance Comm. for Second & Eleventh Jud. Dists., 508 US 928 ["The practice of law involves the rendering of legal advice and opinions directed to particular clients"]). A disbarred attorney may not engage in the practice of law (see 22 NYCRR 691.10[e]), and an attorney may be guilty of professional misconduct where he intentionally aids a disbarred attorney to continue to practice law (see Matter of Raskin, 217 AD2d 187). Further, the plaintiff alleged that the defendant knew that this individual was disbarred, yet intentionally failed to reveal this information. Moreover, the orders related to this individual’s suspension and disbarment involve sustained charges of lying to clients and neglecting their cases. By entrusting the plaintiff’s case to this individual to the extent alleged by the plaintiff, the defendant failed diligently to handle her case. Thus, the plaintiff met her burden of establishing, as a matter of law, that she would have been justified in discharging the defendant for cause.

In response to these allegations, the defendant merely asserted that the disbarred attorney’s involvement in the plaintiff’s case had no bearing on the issue of counsel fees since the plaintiff received a "phenomenal result," and that the Grievance Committee for the Tenth Judicial District "took no action with respect to [these allegations]." The defendant, however, never attempted to raise a triable issue of fact as to the level of this individual’s involvement in the plaintiff’s case, and never claimed that he was unaware of this person’s status as a disbarred attorney. Although, on this appeal, the defendant raises a number of allegations in this regard, including that the disbarred attorney was only minimally involved in the plaintiff’s case, these allegations are dehors the record. Accordingly, in response to the plaintiff’s prima facie showing with respect to the defendant’s lack of entitlement to retain counsel fees that she already paid, the defendant failed to raise a triable issue of fact. "

Macaluso v Pollack , 2010 NYSlipOp 30276(U) , Justice Diamond, Nassau County presents an interesting story of how a case can get dismissed. Beyond the storyline, the case presents analysis of liability of predecessor/subsequent attorneys, how the dissolution of a partnership affects legal malpractice litigation, what subsequent attorneys  can accomplish in the Second Circuit, and potential liability of associate attorneys.

The original attorneys were to represent plaintiff in an employment discrimination case, but negligently failed to follow court orders in US District Court.  Eventually, the case was dismissed by the US District Judge, on one particular day in which the attorneys did not appear for a conference.  This was apparently the last straw, as there had been many previous late filings, etc.  So case is dismissed.  Attorneys for plaintiff at that point were a partnership of two attorneys.  These attorneys then file an appeal to the Second Circuit, but leave out several essential filings which dooms the appeal.

Plaintiff hires set two of attorneys, who try to fix the appeal, but fail.  The appeal is dismissed by the Second Circuit. This firm consists of attorneys and an associate attorney who are sued.  Who is at fault?

Read the decision for the full analysis, which cannot be excerpted here. In the end, first attorneys remain in the case, second attorneys are out, and the associate is out, too.

Carboni v Ginsberg ; 02/02/2010 2010 NYSlipOp 30256(U) Maltese, J. is an illustration of how a potential legal malpractice case underlays almost all activity within the realm of attorney representation, which is to say, everything.

Here, the question is whether plaintiff lost his employment in a wrongful manner, and after that determination, whether he has sued the attorneys within the appropriate statute of limitations time.

In a meticulous, fact specific decision, Justice Maltese writes that under CPLR 3211(a)(1) "the movant is required to demonstrate that the `documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law.’"

In this case, defendant’s documents were less than conclusive.  A stipulation did not end the question of whether a discharge from employment could still be litigated.  On the opposite side, there was inconclusive proofs of whether a named defendant continued to be an employee of the law firm on the date of the purported malpractice.

Lastly, defendants wanted to demonstrate that they did not yet represent plaintiff when his statute of limitations against the Transit Authority expired. 

In Edelman v Poster ;  2010 NY Slip Op 00788 ;  Decided on February 4, 2010 ;  Appellate Division, First Department  we see a situation in which a matrimonial retainer agreement boldly stated a right to arbitrate, yet the Appellate Division, First Department, determined that client has no right to arbitrate.
 

Here is the retainer language:  "While I seek to avoid any disputes concerning the payment of our fee, in the event such a dispute does arise, you have the right, at your election, to seek arbitration, the results of which are binding on both parties. I shall advise you in writing by certified mail that you have 30 days from receipt of such notice in which to elect to resolve the dispute by arbitration, and I shall enclose a copy of the arbitration rules and a form for requesting arbitration. If no action is pending and if you do not timely enforce your rights to enter into fee arbitration, I may commence legal proceedings against you to recover any unpaid fee "

Here is how the First Department interpreted this language:

"Because we do not believe that the parties’ retainer agreements may be interpreted without reference to the matrimonial rules in effect at the time they were entered, which governed the attorney-client relationship in domestic relations matters with respect to fee disputes and arbitration, we reverse the grant of summary judgment in defendant’s favor and reinstate the complaint. A contrary result would do violence to the very rules we endeavor to enforce and penalize an attorney who complied in all respects with the matrimonial rules in effect at the time each retainer agreement was drafted and executed.

While these retainer agreements evidence a clear intent to give defendant the right to binding arbitration of fee disputes at her option, to be governed by arbitration rules to be provided by plaintiff, material terms are missing in that they do not specify what those rules are or identify the forum for the arbitration. However, there is no requirement that an agreement to arbitrate be encompassed in "a single comprehensive document" (5 NY Jur 2d, Arbitration and Award § 17, at 45-46; see also American States Ins. Co. v Sorrell, 258 AD2d 782, 783 [1999]), and where it is clear from the language of an agreement that the parties intended to be bound and there exists an objective method for supplying a missing term, the court should endeavor to hold the parties to their bargain (166 Mamaroneck Ave., 78 NY2d at 91; see also Cobble Hill Nursing Home v Henry & Warren Corp., 74 NY2d 475, 483 [1989] cert denied 498 US 816 [1990] [before rejecting an agreement as indefinite, a court must be satisfied that the agreement cannot be rendered reasonably certain by reference to an extrinsic standard that makes its meaning clear]; Marshall Granger & Co., CPA’s, P.C. v Sanossian & Sardis, LLP, 15 AD3d 631, 632 [2005]). "