The Labor Law and its connection with union contracts, employment at will and whistle blower statutes is complicated.  Clients are well advised to go to an attorney who concentrates in this area.  Here is a case in which plaintiff’s case went awry, and ended in legal malpractice.

Hayes v Bello   2009 NY Slip Op 29065   Decided on February 11, 2009  Supreme Court, Richmond County illustrates the complicated nature of these interacting statutes, and what happens when a claim in one cancels out the other claims.
 

"By way of background, plaintiff’s employment at SIUH began in April 1996 and ran through April 1997 pursuant to a one-year employment contract. Her contract was subsequently renewed in December 1997 for a three-year term, and was thereafter renewed twice more for a period of three years each. Her employment was terminated in July 2003. Each of plaintiff’s contract renewals was retroactive to the expiration date of the previous contract. According to plaintiff, prior to her termination, she had notified her superiors of the illegal activities of another employee in conjunction with the clinical trial of a drug named "Tysabri". Plaintiff contends that her employment was terminated as of July 31, 2003 as a result of her having reported this information to her superiors."

"In September 2003, plaintiff retained the legal services of defendant THOMAS F. BELLO, Esq. (hereinafter BELLO) to represent her in a wrongful termination action against SIUH. An action was subsequently commenced by BELLO on her behalf in July 2005. The complaint alleges five causes of action, one each for breach of contract, promissory estoppel, breach of implied contract, specific performance and violation of Labor Law §740, also known as New York’s "Whistleblowers Act". In September 2005, SIUH moved to dismiss the first four causes of action on the ground that an action under Labor Law §740 constitutes an exclusive remedy such that the assertion of a cause of action thereunder precludes plaintiff from pursuing any other causes of action related to the alleged wrongful termination of his or her employment. In addition, dismissal of plaintiff’s Labor Law cause of action was sought on the basis that the one-year statute of limitations applicable thereto had expired in or about July 2004, one year from the date of plaintiff’s termination. In response, BELLO served an amended complaint withdrawing the cause of action under Labor Law §740. "

"On appeal, however, the Appellate Division, Second Department dismissed the complaint in its entirety on the ground that (1) the assertion of a claim under Labor Law §740 operated as a waiver of all rights and remedies available to plaintiff under any contract, collective bargaining agreement, law, rule or regulation or under the common law, and (2) BELLO’s attempt to amend the complaint to exclude the time-barred Labor Law §740 cause of action was insufficient to nullify the waiver (see Hayes v. Staten Island University Hospital, 39 AD3d 593). "
 

An attorney is free to utilize a reasonable trial strategy for its client without a risk of legal malpractice.  So goes the "judgment" principal in legal malpractice.  What constitutes a reasonable trial strategy?

As an example, Noone v Stieglitz ;2009 NY Slip Op 01093 ;Decided on February 10, 2009 ; Appellate Division, Second Department  is instructive.  Attorneys win in this case, having demonstrated a "reasonable" trial strategy:
 

"The defendants Michael Steiglitz and Sobel, Ross, Fleigel & Suss, LLP (hereinafter the respondents), represented the plaintiff in an underlying personal injury action to recover damages she sustained in an automobile accident, which occurred when the defendant in the underlying action drove his truck into her lane. The defendant in the underlying action testified that he was forced into the plaintiff’s lane by a yellow car which drove into his lane from the side of the road. The plaintiff relied upon the testimony of a nonparty eyewitness, who stated there was no yellow car.

During jury deliberations at the trial on the issue of liability in the underlying action, the plaintiff accepted a "high-low" settlement offer whereby she would receive $1,000,000 if the jury found in her favor on the issue of liability and $500,000 if the jury found in favor of the defendant. The jury returned a verdict for the defendant.

The plaintiff then commenced the instant action to recover damages for legal malpractice against the respondents alleging, inter alia, that they committed legal malpractice by failing to present at the trial a map of the area of the road where the accident occurred and related records of [*2]recent highway construction demonstrating that there was no shoulder or entrance on the side of the road from which the yellow car could have come. The plaintiff further alleged that the respondents failed to advise her of the consequences of the high-low settlement.

The respondents moved for summary judgment on the grounds, inter alia, that the plaintiff was advised of the consequences of the high-low settlement on the record in the underlying action, their strategy was to rely upon the favorable testimony of a nonparty eyewitness, and submitting a map of the road would not have helped the plaintiff’s case. The respondents noted that at the trial in the underlying action, the plaintiff’s position was that if there was no shoulder, there was no place for the yellow car to come from, but if there was some sort of shoulder, the defendant in the underlying action should have used the shoulder rather than the plaintiff’s lane to avoid the yellow car. "

"

We predict a change in the focus of legal malpractice cases reflecting the economic changes going on today.  Here is a case more indicative of the former red-hot real estate market in Manhattan.  Plaintiffs buy two apartments, plan to combine them, are told that some outside space on a setback will be theirs, and then it all goes sour.  Plaintiffs sue the brokers and their attorneys.  They hit .500 with the brokers out and the attorneys in.  In Pappas v. New 14 West LLC we see how the court treated the broker defendants differently from the attorney defendants, essentially saying that plaintiffs could not show writings which would support a fraud claim against the brokers, not withstanding any sales pitches which did not pan out, and that it was the attorney’s responsibility to make sure the clients got what they expected.  In addition, the attorneys seem to have provided the title insurance company as well as the mortgage lending.

The decision is not reproducible here, but we do love the huge number of Mattone names in the defendant law firm’s name: Mattone, Mattone, Mattone, Mattone, Mattone, Magna & Todd.

It’s not the 10 Commandments, and it’s not the Magna Carta, but as this Court of Appeals case demonstrates, it’s not far off.  Amalfitano v. Rosenberg is a new Court of Appeals decision which traces Judiciary Law section 487 all the way back to 1275. 

Deceit, or a chronic pattern of extreme deceptive practice is the touchstone of this almost 750 year old law.  The Court of Appeals found "remarkable" how consistent it has remained in the incarnations between the First Statue of Westminster (1275) to the deceit statute of 1787, to the 1836 Revision, through the 1881 Penal Code to Section 79 of the Code of Civil Procedure, to the Penal Code of 1909 to the Penal Code of 1965 to today’s Judiciary Law.

Running as a thread through the entire history of this law is the concept that attorneys have a higher duty to truth and honest dealings, and in their absence, pay not only a criminal but an enhanced financial penalty.  There is little to scare an attorney more than jail and a treble fine.

We’ve written about Judiciary Law section 487 before, and have an article in the New York Law Journal awaiting publication.  Like an appellate litigant who reads a new and important case the morning of oral argument, we came across the Amalfitano v. Rosenberg case from the Court of Appeals today.  It is an opinion that traces the statute back to 1275 and the time of the Magna Carta (1215)  Remembering that our law derives from the Norman conquest (1066);  that’s really a long time ago.

In Amalfitano v. Rosenberg the court first re-itereated the ancient origins of this statute, which they determined was "the modern day counterpart of a statute dating from the first decades after Magna Carta, its language virtually (and remarkably) unchanged from that of a law adopted by New York’s Legislature two years before the United States Constitution was ratified."

They traced the law from the First Statute of Westminster, adopted by the "Parliament summoned by King Edward of England in 1275."  500 years later, the NY Legislature adopted a law almost identical in 1787.  (L 1787, ch 36, section 5)

The statute followed, and continued through a series of statutory revisions to today’s Judiciary Law section 487.

Tomorrow:  the history through the 1800’s to today and application in state and federal courts.

Rounding out the week in legal malpractice, this article caught our eye.  Law firm represents company seeking to go national in the cable market.  Advises in a transaction so large it gets its own nickname.  In one of probably hundreds of document drafts two paragraphs go missing, and everything falls apart. 

What secondarily caught the eye was a month long mediation.  That’s longer than many trials.  Here is the story from the National Law Journal:

"LOS ANGELES – Irell & Manella has settled a $150 million legal malpractice lawsuit with one of its largest clients, Charter Communications Inc., according to a Feb. 10 filing in the case.

The settlement was reached following two months of mediation, according to court documents. Charter Communications Inc. v. Irell & Manella LLP, No. 07-cv-00402 (C.D. Calif.). No details of the settlement, including the dollar amount, were provided.

Irell, based in Los Angeles, had represented Charter and its chairman, Paul Allen, while both were looking to acquire cable systems to build a nationwide cable television company. In 2000, while working on an acquisition dubbed "the Bresnan Transaction," an unnamed Irell associate deleted two important paragraphs of the contract, giving Allen an unintended type of stock. No one noticed the mistake until 2002, after which Charter was forced to negotiate with Allen over millions of dollars to rectify the deal.

Charter then sued Irell for legal malpractice, breach of fiduciary duty, breach of contract and other claims. "
 

Much litigation arises from the "deep pocket" theory.  Put in the best light, it might be said that a plaintiff has really been wronged, and now the search is on for the usual suspects.  Put another way, someone has lost a lot of money, due to no fault of his own, and he would like to be reimbursed.  Who is available to reimburse plaintiff?

Here, in Winter v. Dowdall a New York County case, we see how this unwinds. Will it be the attorneys who handled a transaction?   Justice Tolub analyzes the following:

Plaintiff wants to sell property and do a 1031 like-kind exchange.  He hires attorneys who correctly tell him that a third-party must hold the proceeds of the sale in a designated account, and then give the proceeds back to purchase the second property.

The sale goes correctly, the money is delivered to a company which specializes in like-kind exchanges, and apparently it disappears while it is supposed to be in the company’s accounts.

Is Citibank responsible?  Is the attorney responsible?  From the caption and the opinion, it seems that the actual holder of the funds is no longer a defendant, and probably [we are guessing] no longer is of any use to plaintiff.  Lost, stolen or missing?

In the event, both attorneys are out of the case, because they are not responsible for the independent torts of the third party funds holder.  Although not specifically stated, there does not seem to be a theory of negligence in the selection of the fund holder, which was probably just another company without apparent faults.

Attorney Referrals are a significant part of the attorney compensation field, and some attorneys derive considerable fees from their practice of taking in a large catchment population, and then referring the cases out to attorneys in specialized fields.  What is their potential liability?

Bloom v Hensel ;2009 NY Slip Op 00884 ;Decided on February 6, 2009 ;Appellate Division, Fourth Department discusses this issue.
 

""[A]n attorney-client relationship may exist in the absence of a retainer or fee" (Gardner v Jacon, 148 AD2d 794, 795) and, "[i]n determining the existence of an attorney-client relationship, a court must look to the actions of the parties to ascertain the existence of such a relationship" (Wei Cheng Chang v Pi, 288 AD2d 378, 380, lv denied 99 NY2d 501; see McLenithan v McLenithan, 273 AD2d 757, 758-759). The unilateral beliefs of plaintiffs, without more, do not render them Calandra’s clients (see e.g. Volpe, 237 AD2d at 283; Jane St. Co., 192 AD2d 451). Here, plaintiffs submitted evidence that Calandra referred the personal injury action to Hensel and that plaintiffs met with Hensel in Calandra’s office for the initial meeting and on another occasion as well. Plaintiffs also [*2]submitted evidence that Calandra’s staff arranged for the initial meeting, that both defendants met with plaintiffs during that meeting, and that, at the conclusion of the meeting, Hensel stated that "they would call [Robert W. Bloom, Jr. (plaintiff)] . . . if they were going to take the case." In addition, plaintiffs submitted the affidavit of Hensel in which he stated that he had previously engaged in fee-sharing arrangements in several cases referred to him by Calandra and that there was an oral agreement to split the fee with respect to the instant personal injury action. Hensel also stated that Calandra inquired with respect to the progress of the underlying action several times, and plaintiff testified at his deposition that Hensel informed him of that fact. Several of the pleadings or proposed pleadings in the personal injury action list both defendants as plaintiffs’ attorneys, and plaintiffs also submitted evidence establishing that Hensel sent Calandra copies of certain of his correspondence with plaintiffs. Viewed as a whole, we conclude that the evidence submitted in opposition to the motion raises a triable issue of fact whether there was an attorney-client relationship between plaintiffs and Calandra (see Tropp, 23 AD3d 550; cf. Jane St. Co., 192 AD2d 451). "