This case discusses three important concepts in legal malpractice.  Standing, immunity  and proximate cause. Cangro v. Solimon  2008 Slip Op. 33345. holds that  under Rule 1(h) of Part 36 of the Rules of the Chief Judge, a guardian ad litem’s attorney requires judicial appointment, and is immune from suit, absent permission from the court. The same is true of trustees, referees and receivers.

Beyond this interesting tidbit, the case is worth reading for questions of proximate cause, emotional damages in legal malpractice and qualified immunity for attorneys in litigation.

There is a traditional cadence to the start of a legal malpractice case.  First comes a dispute, retention of an attorney, initial success, then a downturn into failure followed by a legal malpractice case.  With the real estate market very troubled, and foreclosures on the rise, a prediction of legal malpractice/foreclosure actions is warranted. Here is one such possibility.Greenpoint Mtge. Funding, Inc. v Valentin ; 2009 NY Slip Op 50002(U) ; Decided on January 5, 2009 ; Supreme Court, Kings County ; Lewis, J.  
 

Defendant home owner had several opportunities to fix the foreclosure situation, but failed in the end to stave off the foreclosure sale.There is a tantalizing clue that an attorney was retained and was unable to fix the situation.

"Calixte Valentin, one of the named defendants herein, has moved this court by Order to Show Cause, dated the 2nd day of October, 2008 to vacate the judgment of foreclosure auction and sale of his home, located at 3510 Avenue L, Brooklyn, NY, and to void and reverse the transfer of title to said premises from Rafael Badalov, the successful bidder at the mentioned sale, to him and his wife, Marie Valentin. Mr. Valentin represents that he and his wife executed a Greenpoint mortgage on the subject property for $93,750.00 on December 16, 1992 on which a foreclosure action was commenced in 2006. In October of said year, a reinstatement letter was received by him calling for payment of $11,045.49 ($9,806.75 in loan defaults plus $1,238.74 in legal fees) to restore the mortgage, which sum he withdrew from his checking account and sent to plaintiff’s attorneys on November 18, 2006. Approximately six weeks later the check was returned to him, whereupon he and his wife consulted with an attorney who advised them that he was in contact with Greenpoint’s lawyer. Thereafter, he ceased receiving monthly mortgage statements, and thereafter received court documents which were turned over to the lawyer that he had retained whom he assumed was negotiating a payment plan with the bank until receiving notice that a foreclosure sale had taken place and the property deeded over to Rafael Badalov on or about June 13, 2008. "
 

Might we be seeing a legal malpractice case now that the house has been sold, and the owner won’t take his surplus funds? "In addition, counsel[ for the foreclosure sale purchaser] stresses the injustice of the current situation in that although his client acquired title to the subject premises on June 13, 2008, is making monthly payments of $2,620.00, the defendant and his family continue to occupy the premises without paying rent or use and occupancy despite the fact that surplus funds of $213,569.91 are due him from the auction sale
 

As yet another example of why legal malpractice is a difficult discipline, here is a case in which there was a failure to file a counterclaim,  The legal malpractice case ends in dismissal, because the Appellate Division determines that the counterclaim, even if made would have failed. Ginther v Rosenhoch ;2008 NY Slip Op 10292 ;Decided on December 31, 2008 ;Appellate Division, Fourth Department
 

"One necessary element of such a cause of action is that, " but for the [defendants’] negligence, the plaintiff[] would have been successful in the underlying action’ " (Oot v Arno, 275 AD2d 1023, 1023). Here, plaintiff alleges that defendants committed legal malpractice by, among other things, failing to assert a counterclaim in the underlying action, for recovery of premiums paid by plaintiff under a disability insurance policy. We note, however, that the Second Circuit affirmed the judgment of the District Court in favor of the plaintiff insurer in the underlying action on the sole ground that the claim for benefits made by defendant, the plaintiff herein, was untimely under the policy (Provident Life & Cas. Ins. Co. v Ginther, 51 Fed Appx 72). Thus, it cannot be said that, but for defendants’ negligence, plaintiff would have been successful on a counterclaim for recovery of premiums in the underlying action (see Oot, 275 AD2d 1023).
 

The matter of Chen v. Mt. Sinai was handled by attorney Steven F. Goldman, and settled just after depositions for $ 2.4 million.  Mt. Sinai was represented by Martin Clearwater & Bell, a premiere NY med-mal defense firm.  One would think that was good news for Mr. Goldman.  However, he ends up, after a Second Circuit decision, with no fee at all.  Legal Malpractice litigation might follow had he garnered a fee.  It might still if one scrutinizes the question of whether sufficient provision was made for a severely injured child. From the opinion: "The circuit noted that Mr. Goldman provided no real assistance to Judge Korman in his effort to determine whether the settlement was reasonable."Equally disturbing, the record suggests that Goldman himself had made only limited inquiries into David’s condition and the nature and extent of David’s future medical needs,"

Law.Com writes: "A federal judge acted within his authority when he denied all fees to a lawyer who won a $2.4 million medical malpractice case but who failed to investigate the future needs of a child disabled at birth and overcharged his client, a federal appeals court has ruled.

The U.S. Court of Appeals for the Second Circuit on Monday upheld the discretion of Eastern District Judge Edward Korman to refuse Steven F. Goldman’s application for $388,000 in fees.

Mr. Goldman obtained a settlement with the Mt. Sinai-NYU Medical Center Health Systems, NYU Downtown Hospital and the doctors involved. He then filed a stipulation of settlement and infant compromise order directing that he be paid $408,000 in fees and $20,000 in expenses, and that Ms. Chen be paid $250,000 for her loss of services claim, and $1.7 million as trustee for her son’s special needs trust.

But Judge Korman said he was unable to analyze the reasonableness of the settlement because Mr. Goldman failed to provide documentation for his fees and for David’s current medical condition and a projection of his expenses for future medical care.

Saying the attorney’s information was "totally unhelpful," the judge appointed a special master, attorney Steven North, who was told by Mr. Goldman that he had applied the sliding scale fee system set forth in New York Judiciary Law §474-a for medical malpractice compensation.

When Mr. North inquired as to the fee, Mr. Goldman claimed he had miscalculated it under the sliding scale, and it was actually $388,000."
 

Law.Com reports [as does the BLT Blog] that a legal malpractice case by Blackwater Security Consulting has been dismissed, now for the second time against Wiley Rein.    The legal malpractice case arises from the horrible death of Blackwater employees in Falugia, Iraq.

The fact of deaths in Iraq ending in US litigation brings to mind a recent speech which attributed the idea to Alexis de Tocqueville that all serious issues in the US ultimately end in courts.  If it ends in court, look for legal malpractice litigation to follow.

"On Dec. 29, Judge Jennifer Anderson of D.C. Superior Court dismissed the $30 million malpractice suit brought against the firm by Blackwater Security Consulting on summary judgment. She’s the second judge to throw out the case since it was filed last January.

"They have the right to ask more judges to look at it," says Zuckerman Spaeder partner Mark Foster, who represents Wiley Rein in the matter. But if Blackwater’s lawyer, Barry Nace of Paulson & Nace, chooses to do so, Foster says, "I think he’d be wasting his time." (Nace is on overseas travel and could not immediately be reached for comment.)

Blackwater alleged that Wiley botched its defense of the security contractor in a wrongful death case brought on behalf of four Blackwater guards killed in Iraq in 2004. Blackwater claimed the suit would have been dismissed if it had been heard in federal court, instead of in a North Carolina trial court. Blackwater said the Wiley lawyers failed to get a venue change because they didn’t invoke the federal officer removal statute, which grants federal jurisdiction to claims involving federal officers."

A recurring theme of these entries is the ubiquitous nature of legal malpractice.  All roads, it seems, require attorneys to mix a metaphor.  Downturns in the real estate marketplace are no exception.  Here is a story from Law.Com about a legal malpractice case against Quinn Emanuell, a biglaw litigation firm.  This one is from California:

"Quinn Emanuel Urquhart Oliver & Hedges has been hit with a malpractice lawsuit that claims the firm botched a $48.8 million settlement even as it took in some $12 million in contingency fees.

Former client Todd Kurtin, a one-time principal at the real estate concern SunCal Cos., filed the claim earlier this month in Los Angeles Superior Court. In his complaint, Kurtin accuses Quinn Emanuel of negligence for failing to advise him of "the meaning and ramifications of all terms of the settlement agreement" he reached with a former business partner, Bruce Elieff, that unwound their co-ventures.

Under the 2005 settlement, Kurtin was to receive his payout in four installments, but, according to the complaint, wound up getting only two payments and is still owed nearly $23 million not including interest. Kurtin is pursuing claims against Elieff for reneging on the settlement agreement.

The complaint against Quinn Emanuel highlights how — as a result of a contingency agreement that essentially guaranteed Quinn Emanuel half of any amount recovered up to $20 million and 20 percent thereafter — the firm has received approximately $12 million in fees for representing Kurtin. That amount is equal to what Kurtin himself has gotten to date from the settlement, which was reached a little more than four months after Quinn Emanuel took on the case.

SunCal, like other real estate development companies, has been hit hard by the downturn in the economy. The company has been plagued with cash flow issues and has had to back out of several projects. Lehman Brothers Holding Inc. was a major backer of the company."

Asbestos settlements have changed the landscape of tort law, and especially mass tort law.  Back in the mid ’90s asbestos cases started to cascade and overwhelm the system.  The defense bar’s response was to try to streamline the process.  While this may seem counter intuitive, the intersection between defense costs and settlement costs, especially when insurance/limited insurance coverage was factored in, required litigation committees, typology of injury and the like.  On occasion, good claims were lost and bad claims were paid.

This article from the venerable Madison County Record tells the story of the aftermath of an asbestos case.  Aftermaths often mean legal malpractice litigation.

"Asbestos lawyer John Simmons, facing trial on a widow’s malpractice claim, boasts that he obtained $100,000 from W.R. Grace & Co. after the statute of limitations ran out, plus $214,000 from other businesses despite "sketchy product identification."

Simmons offered these examples in hopes of winning summary judgment and escaping a trial that Madison County Circuit Judge Barbara Crowder has set for Feb. 9.
 

Buckles hired Simmons in 1999, when he worked at Hopkins Goldenberg, to represent the estate of her late husband Charles Buckles, she claims. When Simmons left Hopkins Goldenberg, he retained her case and others.

Roy Dripps of the Lakin firm alleges in Buckles’ complaint that Hopkins Goldenberg entered into secret agreements with asbestos defendants to classify claims of clients and settle them "in accordance with predetermined figures of money for each such classification."

The complaint stated that Hopkins Goldenberg settled claims "for amounts of money which were manifestly inadequate and which bore no reasonable relationship to the actual loss sustained by the clients."

It stated that Hopkins Goldenberg "fabricated, exaggerated, or otherwise manipulated the bookkeeping" and wrongly ascribed advanced costs to Buckles, and that Hopkins Goldenberg settled groups of claims without obtaining consent of each client.

Simmons failed to provide timely, aggressive and zealous representation to Buckles, according to Dripps.

For Simmons, A.J. Bronsky of St. Louis moved in 2007 for summary judgment.

Bronsky attached an affidavit in which Simmons wrote, "Even though the statute of limitations had run with respect to W.R. Grace, I was able to, with Judy Buckles’ consent, obtain a settlement for $100,000 in October of 2000."
 

The question of when a legal malpractice claim belongs to the debtor and when it belongs to the debtor’s estate is of strong significance.  If the former, plaintiff may hire his own attorney and proceed; if the latter, then the trustee in bankruptcy or debtor’s estate holds the reins.  Here, from Bankruptcy Law Network is a case in which the legal malpractice included a claim of negligently advising a Chapter 11 filing rather than a Chapter 13 filing.

"A recent New Jersey case, In re Hussain, 2008 WL 5102458 (Bky.D.N.J. Dec. 5, 2008), held that a bankruptcy debtor’s legal malpractice claim against his former bankruptcy attorney was property of the estate, to be administered by the bankruptcy trustee for the benefit of creditors.

The bankruptcy court observed that the legal malpractice claim involved the alleged failure to advise the debtor that he could have filed a Chapter 11 case rather than a Chapter 13 case, and the failure to propose a Chapter 13 plan which could be confirmed by the court. These were actions involving pre-bankruptcy conduct. Accordingly, the legal malpractice claim accrued on the date the bankruptcy petition was filed, and it was therefore property of the estate under bankruptcy code section 541(a)(1). Although the filing of the legally inadequate chapter 13 plan was a post-petition event, it served only to magnify the malpractice claim, and not to create a new malpractice claim belonging to the debtor."