Collateral Estoppel and Legal Malpractice have an interesting intertwining existence.  Put briefly, once an attorney is awarded a legal fee [by a court, an arbitrator, or a judicial hearing officer] a subsequent legal malpractice case fails on the basis that a court has already implicitly determined that there can be no legal malpractice, because no fee may be awarded in the face of legal malpractice.  This principal has been criticized as circular, and basely favoring attorneys. 

Here, in York v Landa ;2008 NY Slip Op 10614 ;Decided on December 30, 2008 ;Appellate Division, Second Department we see a rare variation on the theme.  Attorney represents plaintiff in a matrimonial and agrees with the client that she will pay a compromised fee of $ 75,000, for which he obtains a lien.  When she does not pay, he enforces that lien.  Later she sues him for legal malpractice, and surprisingly, does not have her suit dismissed.
 

"The doctrine of collateral estoppel "bars relitigation of an issue which has necessarily been decided in [a] prior action and is decisive of the present action’ if there has been a full and fair opportunity to contest the decision now said to be controlling’" (Tydings v Greenfield, Stein & Senior, LLP, 11 NY3d 195, 199, quoting Buechel v Bain, 97 NY2d 295, 303-304 [emphasis added]). Pursuant to this doctrine, a legal malpractice action generally will be barred by the defendant’s "successful prosecution of a prior action to recover fees for the same legal services which the [plaintiff] presently allege[s] were negligently performed" (Pirog v Ingber, 203 AD2d 348, 348-349; see Blair v Bartlett, 75 NY 150; Altamore v Friedman, 193 AD2d 240, 244-248).

Here, in support of his motion to dismiss the complaint, the defendant failed to establish that the services for which he secured payment through the November 2002 settlement agreement with the plaintiff were "the same legal services" as those which are the subject of the instant legal malpractice action (Pirog v Ingber, 203 AD2d at 348; see Blair v Bartlett, 75 NY at 154 [medical malpractice action barred where defendant physician’s complaint in prior action to collect payment for his services involved "the same services which are set forth in the complaint in the action now before us, as the malpractice sued for"] [emphasis added]).

Moreover, only those facts which "must have been proved" by the defendant in the underlying matrimonial action can be deemed to have been necessarily decided in that action (Blair v Bartlett, 75 NY 150, 154). Regardless of how the defendant’s motion in the underlying action was denominated, the true nature of the relief sought in that motion was not payment for services rendered to the plaintiff, but the enforcement of the November 2002 settlement agreement, which fixed the amount owed to the defendant at $75,000. Thus, in procuring the order dated March 13, 2007, the defendant was not required to prove that he performed legal services for the plaintiff, or that those services were worth $75,000 (see Resnick v Resnick, 24 AD3d 238; cf. Chisholm-Ryder Co. v Sommer & Sommer, 78 AD2d 143, 145-146). Rather, the only issue actually before the court was whether the defendant and the plaintiff had entered into a valid, enforceable agreement requiring the plaintiff to pay the defendant $75,000.

Thus, the issue of whether the defendant committed legal malpractice was not necessarily decided in the underlying action, and the plaintiff is not precluded from raising that issue in the instant action. Accordingly, the Supreme Court properly denied the defendant’s motion to dismiss the complaint as barred [*3]by collateral estoppel. "

Here is a pdf version of the Oxman v Herman Sloan Robarge & Sullivan, LLP  case, which is a not unusual matrimonial legal malpractice case, As in many of these cases, plaintiff-wife believes that her attorney has insufficiently investigated the assets of her husband, to the extent that she has been significantly short-changed in equitable distribution.  The wife alleges that she was shortchanged $ 300,000 in the guitar alone.

In this particular case, there was a guitar collection, including a very valuable Eric Clapton guitar, a house in Greenwich, CT, jewlery and stocks.  What will be at issue will be the attorney’s investigation, whether he retained a forensic accountant, and to what extent her attorney acquiesced in the husband’s valuations.

Motion to dismiss denied and the case continues.

Legal malpractice is a world within itself.  Beyond the obvious small universe of defendants, all attorneys of course, and the unique rules, the serious questions are almost always how the underlying case was lost, and could it have been won.  While much litigation today centers on meta data and electronic discovery, most of legal malpractice centers on metaphysics, or the ultimate nature of proofs and hypothetical outcomes.

Here is an example from the West Virginia Record.  "A 2005 legal malpractice case against a Ritchie County attorney has a new twist, as the attorney hired to help with the suit has himself been sued for legal malpractice.

On Jan. 8, James and Frances Arthur filed suit against James M. Bradley Jr. in Wood Circuit Court. In their complaint and suit, filed with the assistance of Bruce L. Freeman, with the Charleston law firm of Freeman and Chiartas, the Arthurs allege Bradley failed to properly represent them in a suit against Rodney C. Windom.

According to court records, the Arthurs retained Bradley on Jan. 5, 2004 to pursue a legal malpractice suit against Windom, an attorney in Harrisville. In their suit filed a year later, the Arthurs accused both Windom and Edward R. Coakley, a Pennsboro certified public accountant, of not protecting their interests in a 2000 condemnation proceeding.

At the time, the Arthurs were owners of Artie’s Exxon and Mini-Mart on U.S. 50 near the Interstate 77 interchange. Along with several other businesses, Artie’s Exxon was taken by eminent domain by the state Division of Highways as part of the Corridor D project in Wood County.

In their first malpractice suit, the Arthurs allege Windom and Coakley informed them so long as their property was replaced they would not have to pay any recognizable tax on the gain they received from DOH for three years after conclusion of the condemnation proceeding. However, the Arthurs allege they received a call from Windom on Dec. 23, 2003, saying he and Coakley were mistaken about the timetable."
 

Legal Malpractice in Hollywood should come as no surprise.  We’ve commented on the widespread omnipresence of legal malpractice litigation, but had no idea we would be quoting Variety on the subject.  Here is their report on legal malpractice and the "9 to 5" screen, stage and trust saga as well as the cult classic Harold and Maude.

"The trust representing the late writer-director Colin Higgins has sued attorney Barry Hirsch for failing to properly represent his interests in the "9 to 5" stage musical.
Colin Higgins Prods. filed suit on Jan. 14 against Hirsch and his law firm in L.A. County Superior Court, accusing Hirsch of legal malpractice and breach of fiduciary duty. The trust seeks damages to be determined in a jury trial.

Among the many charges in the filing: Hirsch failed to adequately secure Higgins’ rights to a live stage show from Patricia Resnick, the original scribe for the movie, and failed to advise the trustee in 2006 that the firm was representing Resnick at the time she was writing the book for "9 to 5: The Musical."

When the trustee asked how such a musical could be mounted without stage rights from Higgins Prods., Hirsch supposedly stated, "It may not be ethical, but it is legal."

According to the suit, Higgins, best known for penning "Harold and Maude," inked his deal with Fox to rewrite Resnick’s "9 to 5" screenplay in 1979. Hirsch represented the writer-director and his shingle on various entertainment matters, including that contract.

As the economy has sunk, it is expected that legal malpractice cases will increase.  One reason is that cases previously thought to be unworthy will garner new luster; another is that in commercial circumstances there will be opportunities for cases.  Here is one example which did not work out for plaintiff.  As more sub-prime lending practices surface, we may expect to see further examples of this litigation, both in bankruptcy court and in district courts.

Law.Com reports the Dorsey saga.  "What started off as a run-of-the-mill loan arrangement turned into a decade of litigation for Dorsey & Whitney that could have cost the firm up to $4 million in malpractice verdicts — until the 8th U.S. Circuit Court of Appeals tossed out the entire case Thursday.In 1999, a now-defunct investment bank in Minneapolis, Miller & Schroeder, packaged about $12 million in bonds and sold them to 32 banks. The banks then became the direct lenders to a Mohawk tribe in upstate New York which used the money to open a casino.

There was a problem, though. Miller & Schroeder hadn’t gotten the go-ahead on the loan for the casino project from the National Indian Gaming Commission. Internal documents showed Dorsey lawyers knew this could jeopardize the entire project. They told Miller & Schroeder to go ahead with the financing anyway.

The casino was a huge failure and its management defaulted on the loans starting in 2000. The banks sued, but the casino administrators said they didn’t have to repay the loans. Why? Because without the gaming commission’s approval, the casino project itself wasn’t valid — and neither were the loans.

Litigation ensued. Miller & Schroeder, Dorsey’s client, sued the casino management and the Mohawk tribe in bankruptcy court. Dorsey advised Miller & Schroeder to drop the tribe from the lawsuit, a strange decision. A federal district court in 2007 concluded that Dorsey made that decision only to prevent the disclosure of its mistake in advising Miller to proceed with the loans without getting the gaming commission’s approval.

There was more: One of the banks involved, Bremer Business Finance Corp., sued Miller & Schroeder. Dorsey lawyers badly wanted to keep representing Miller, especially because a rival firm was pushing for the business, court records show. But could they ethically do so if their own error would be at the heart of Bremer’s claim? Dorsey decided they could, and continued on the case. Finally, Bremer sued Dorsey, claiming that, in effect, Dorsey, by representing the arranger of the loan, also indirectly represented all the banks who eventually bought those loans.

Two federal courts — a bankruptcy court and a federal district court — basically agreed and ruled against Dorsey in judgments that added up to $900,000, according to stories in The National Law Journal. Those judgments also kept the door open for larger judgments in the future. But the Minnesota Supreme Court went the opposite way in a parallel case brought against Dorsey by the banks. That court ruled that Dorsey’s conduct didn’t amount to malpractice, and it discredited the idea that the banks, as third parties, were Dorsey clients all along. "

This case illustrates the difference between legal malpractice and all other litigation, the "case within a case."  Defendant attorneys admitted that they allowed a case to go into default, yet were successful in avoiding liability.  Their defense?  Even if we made the mistake, plaintiff could not have won the case after all.

From NY Lawyer comes this story:

"The 6th U.S. Circuit Court of Appeals dismissed a legal malpractice suit against a Cincinnati law firm that acknowledged its error for failure to prosecute a civil suit over the sale of a race horse, but argued that its client’s suit would have failed on the merits anyway.

The 6th Circuit agreed on Jan. 12 that White, Getgey & Meyer Co., though it stipulated to legal malpractice, showed that the underlying suit by its client, Leonard Pivnick, would not have succeeded on the merits.

Pivnick purchased a one-year-old thoroughbred horse for $410,000 in a 1997 New York auction but failed to pay the auction house for the horse despite repeated demands, according to the ruling. Pivnick v. White, Getgey & Meyer Co., No. 07-4304 (6th Cir.).

The auction house, Fasig-Tipton Co., subsequently recovered the horse and sold it privately for $375,000. Eventually, the horse sold, after training as a racehorse, for $800,000, according to the court.

Pivnick sued the auction house, arguing that demand notices from Fasig-Tipton regarding the default did not make clear that it planned to sell the horse, and violated Kentucky’s commercial code.

For an attorney, being sued is a traumatic event.  Ones advice and acts are being criticized, and a former client is claiming injury as a result of your professional work.  Not a good feeling.  What could be worse?  How about being arrested for giving advice to a client?

In this case, Vinluan v. Doyle, we see that the attorney defendant gave a group of nurses from the Philippines advice that they could resign.  He gave that advice based upon an analysis that the hospital had already breached their contract.

The New York Law Journal reports that attorney Oscar Michelen was successful in an Article 78 proceeding ending the prosecution.

The Appellate Division [and incidentally, the State Education Department) ultimately cleared the nurses of professional misconduct after taking into account that "no children were deprived of nursing care."  determined that     "We cannot conclude that an attorney who advises a client to take an action that he or she, in good faith, believes to be legal, loses the protection of the First Amendment if his or her advice is later determined to be incorrect," Justice Randall T. Eng wrote.

"Indeed, it would eviscerate the right to give and receive legal counsel with respect to potential criminal liability if an attorney could be charged with conspiracy and solicitation whenever a District Attorney disagreed with that advice," the panel said. 
 

From the NYLJ article: "In yesterday’s ruling, Justice Eng pointed out that the nurses "did not abandon their posts in the middle of their shifts." Rather, he wrote, they resigned "after the completion of their shifts, when the pediatric patients at Avalon Gardens were under the care of other nurses and staff members."

Justice Eng also noted that the state Education Department ultimately cleared the nurses of professional misconduct after taking into account that "no children were deprived of nursing care."

Next, the judge turned to the role Mr. Vinluan played as an advocate.

"It cannot be doubted that an attorney has a constitutional right to provide legal advice to his clients within the bounds of the law," the judge wrote, citing Matter of Primus, 436 US 412, among others. Here, the indictment "seeks to punish Vinluan for providing legal advice, which he avers was given in good faith." "
 

We’ve noted in the past that many legal malpractice cases arise when attorneys work outside of their zone of experience.  As an example, there are unique rules for medical malpractice which do not exist elsewhere.  A certificate of merit is required to be filed with the complaint, and the failure to file it can have serious ramifications.  That obligation does not exist elsewhere.

Experienced medical malpractice attorneys know this; one-timers may not.  Beyond a special filing, an experienced practitioner has a bevy of experts and techniques to obtain the medical records, to review for deviations, to understand the case law in the area.  One-timers do not, and trouble may well ensue.

Injuryboard.com brings us this insight:  when the economy dips and attorneys take cases outside of their core areas, legal malpractice claims show an uptick. "Experts predict that the current economic downturn will give rise to an increasing number of legal malpractice lawsuits. Historically, claims against lawyers escalate during economic downturns.

There are several different reasons for the increase in malpractice claims: (1) assets lose value; (2) deals go sideways; and (3) attorneys start practicing outside of their core competence. This last reason is perhaps the most interesting.

Lawyers feeling economic pressure are more likely to retain work they would otherwise refer out to someone with more specific knowledge. We see this with increasing frequency when it comes to personal injury claims.

Instead of referring personal injury claims to personal injury attorneys, business and real estate and family law attorneys are starting to handle these claims to prop up their own sagging practices. This leads to a host of problems.

While personal injury claims can see simple on their faces, they are laced with complexities and really only can be competently handled by experienced practitioners. There are just too many "hidden" traps for the occasional practitioner."