Here is the story of a three-way deal in a legal malpractice / overpayment of fees / municipal negligence case which we reported at the onset.  In Lodi, California [I must admit that the CCR song quickly comes to mind] target attorney had represented the city in litigation, especially an underground pollution case, and claimed he was owed $ 7 million or more.  Here, from Recordnet.com is the story:

"Lodi officials called lawyer Michael C. Donovan incompetent and a fraudster.

Over the course of seven years, they paid Donovan and his firms $16 million to pursue a legal strategy that was later discredited.

After they fired him in 2004 and abandoned his failed legal tactics in a behemoth underground pollution ordeal, officials said they did not owe him a penny more.

Now, after already spending millions more fighting him in court, it will cost the city another $1 million to make Donovan go away for good.

A divided City Council on Wednesday approved settlement agreements that end a back-and-forth legal battle:

The city will drop its 2005 lawsuit against Donovan, in which it claimed he committed fraud and legal malpractice, and receive $200,000 from the attorney’s legal insurance.

Donovan, in turn, will get $1.2 million to drop his countersuit"

If one were to peruse the legal press, headlines seem limited to merger, layoffs and legal fee disputes.  There is a definite tie-in to legal malpractice litigation.  Lesson one by legal malpractice insurers to attorneys is that legal fee cases engender legal malpractice defenses.

Here, from Legal Profession Blog is yet another example:  attorney who has the benefit of an arbitration clause in its retainer agreement sues for fees.  Client defends with malpractice claim.  Outcome?  Attorney gets no fees, client recovers fees. 

"A Maryland lawyer retained to handle a custody suit filed suit against the client for unpaid fees. The client counterclaimed alleging that the lawyer had breached the retainer contract by failing to properly represent him and sought the return of fees that had been paid. Counsel for the lawyer then sought but did not get arbitration of the dispute, as contemplated by the retainer agreement. The jury gave the lawyer nothing; the client won the return of almost $25,000 in previously paid fees."

"The lawyer appealed, claiming that the arbitration provision should have been applied and that the breach of contract counterclaim was a veiled claim of legal malpractice. The Maryland Court of Special Appeals rejected these contentions, "

For some reason, it seems legal malpractice cases are subject to an inordinately high percentage of motions to dismiss, more so than other categories of cases.  Here in SHAHRAM DAVID LAVIAN,  -v.- IRA DANIEL TOKAYER, ESQ., 08 Civ. 938 (PAC) (GWG);
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 6066

we have a primer on the law of 12(b)(6) motions:  "A party may move for judgment pursuant to Fed. R. Civ. P. 12(b)(6) where the opposing party has "fail[ed] to state a claim upon which relief can be granted." Separately, Fed. R. Civ. P. 8(a)(2) requires that a pleading contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Under this rule, a complaint "must simply ‘give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.’" Kassner v. 2nd Ave. Delicatessen Inc., 496 F.3d 229, 237 (2d Cir. 2007) (quoting Swierkiewicz v. Sorema N. A., 534 U.S. 506, 512, 122 S. Ct. 992, 152 L. Ed. 2d 1 (2002)). When considering motions [*4] to dismiss the claims of a plaintiff proceeding pro se, pleadings are construed liberally. See, e.g., Haines v. Kerner, 404 U.S. 519, 520-21, 92 S. Ct. 594, 30 L. Ed. 2d 652 (1972)."

Nonetheless, "a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level . . . ." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1964-65, 167 L. Ed. 2d 929 (2007) (citations, internal quotation marks, and brackets omitted); see also 127 S. Ct. at 1966 (pleading must "possess enough heft to show that the pleader is entitled to relief") (citations, internal quotation marks, and brackets omitted). Thus, "a complaint must allege facts that are not merely consistent with the conclusion that the defendant violated the law, but which actively and plausibly suggest that conclusion." Port Dock & Stone Corp. v. Oldcastle Ne., Inc., 507 F.3d 117, 121 (2d Cir. 2007) (citation omitted). As one case puts it, the factual allegations of a complaint must be sufficient to render the claim "plausible." Boykin v. KeyCorp, 521 F.3d 202, 213 (2d Cir. 2008) [*5] (citing Iqbal v. Hasty, 490 F.3d 143, 158 (2d Cir. 2007)) (emphasis omitted).

On a motion to dismiss for failure to state a claim, all factual allegations in the complaint are accepted as true. See Swierkiewicz, 534 U.S. at 508 n.1. While a court normally examines only these allegations on a motion to dismiss, "[d]ocuments that are attached to the complaint or incorporated in it by reference are deemed part of the pleading and may be considered." Roth v. Jennings, 489 F.3d 499, 509 (2d Cir. 2007) (citations omitted). In addition, matters of public record, such as court filings, may also be considered. See, e.g., Blue Tree Hotels Inv. (Can.), Ltd. v. Starwood Hotels & Resorts Worldwide, Inc., 369 F.3d 212, 217 (2d Cir. 2004).
 

The principal of "continued representation" in Legal Malpractice is that the statute of limitations does not start to run upon the making of a mistake,  while the attorney continues to represent the client.  "The statue of limitations sounding in legal malpractice is tolled until the completion of the attorney’s ongoing representation concerning the matter out of which the malpractice claim arises. Pellati v. Lite & Lite, 290 AD2d 544 (2d Dept. 2002).

Here is an example of a case in which there was no continued representation.  Mark v Dechert, LLP ;  2009 NY Slip Op 00437 ;  Decided on January 27, 2009 ;  Appellate Division, First Department .  The court does not explain why, but it appears that the attorneys represented the client in the run up to a merger, and then may have represented the entire entity, once merged.
 

In this case, "Plaintiffs’ legal malpractice claim is barred by the statute of limitations (CPLR 214[6]), which began to run in January 2000, when the merger of the corporate plaintiffs was completed and defendant law firm filed the merger documents. Even assuming plaintiffs could sustain their allegations that defendant represented them with respect to the merger, the complaint would have to be dismissed because their claim of continued representation is without merit (see West Vil. Assoc. Ltd. Partnership v Balber Pickard Battistoni Maldonado & Ver Dan Tuin, PC, 49 AD3d 270, 270 [2008]). [*2]"

The poor deserve an adequate criminal defense as much as anyone else.  While everyone gets an attorney when arrested, even if they cannot afford one, publicly funded legal Aid or 18b attorneys don’t always get sufficient funding to handle large caseloads/  Who suffers? 

Here is a case from Seattle in which an innocent man sat in jail for months after his accuser recanted.  Apparently, [we really don’t have the details] his publicly funded public defender did nothing to handle his case.  The Seattle Times reports: "A Grant County man has been awarded $3 million for spending months in jail because of poor work by his public defender.

Felipe G. Vargas was awarded more than $3 million payable by his public defender by a U.S. District Court jury in Spokane after spending more than seven months in the Grant County Jail, falsely accused of child molestation.

Grant County public defender Thomas Earl allegedly pocketed much of his fee for representing Vargas, instead of spending it to mount an adequate defense, the jury decided. Vargas’ alleged victim recanted three days after Vargas was arrested in November 2003, but authorities took no steps to free Vargas from jail."

The Washington Injury Blog reports: "Vargas was arrested and placed in jail in November 2003 where he remained for seven months although his accuser recanted three days later. Vargas’ court-appointed attorney was Grant County Public Defender Thomas Earl. Earl was working under a contract which paid him $500,000 annually. In finding Earl negligent in his representation of Vargas, the court heard testimony that Earl did not hire experts and investigators to clear Vargas, in part because of his case load, but also because he had a financial incentive not to spend money on services to defend Vargas. Earl was eventually disbarred.

A legal ethics professor at Seattle University, John Strait, testified in the trial calling flat fee contracts, "illegal and unethical for any attorney to enter into." Court watchers across Washington State believe that flat fee contracts for people needing court-appointed lawyers does not provide indigents a fair representation because defenders like Earl may not properly defend a client due to their own profit motive. In September, the Washington State Supreme Court barred any Washington lawyer from working under a contract such as Earl’s."

Judges handle hundreds of cases a year, many more during a career.  what happens when a judge is removed from the bench for criminal acts?  Can the cases presided over by this particular judge unravel?

In this Pennsylvania legal malpractice case, the judge recused himself during trial when an attorney accused him of showing favoritism.  The attorney nevertheless lost, and in a facially unrelated coincidence, the judge was removed from the bench.  Now the judge faces criminal charges, and the attorney is the target in a legal malpractice case arising from that trial.  How do these intersect?

"A Hazleton law firm seeking to overturn a $3.4 million legal malpractice award wants to use information regarding criminal charges against two Luzerne County judges in its appeal.

Attorneys for the Laputka, Bayless, Ecker and Cohn law firm filed a motion Thursday asking a judge to allow them to use information released this week regarding the plea agreements of former judges Mark Ciavarella and Michael Conahan.

The Laputka firm is seeking to negate a jury verdict entered in favor of Bernadette Slusser. Slusser’s family filed a legal malpractice case against the Laputka firm alleging it provided faulty legal representation in a series of lawsuits related to land transactions.

The Slussers were represented by the Powell Law Firm.

In the motion filed on Thursday, Jeffrey McCarron, an attorney for the Laputka firm, said the recent allegations against Ciavarella and Conahan should be included in their post-trial motions. The two former jurists, who were removed from the county bench by the state Supreme Court this week, face federal charges in an ongoing public corruption probe. They are accused of taking $2.6 million in kickbacks in connection with a juvenile detention center."

May the defendant attorney collect attorney fees for the successful defense of a legal malpractice case?  One would immediately think not. The "American Rule" is that each side pays for its own attorneys, and the blackletter rule in NY is that absent an agreement or a statute, attorney fees are not collectible.

Here is a case, Lok Praknashan LTD v. Berman, Kern, Davidoff & Mallito04 Civ. 7212 (BSJ)(AJP);
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK     2008 U.S. Dist. LEXIS 101756 which determines the meaning and validity of a retainer agreement which gives the law firm attorney  fees for collection of unpaid fees, but does not mention attorney fees to defend a legal malpractice action.
 

"Defendants move for summary judgment on their counterclaim for (1) unpaid legal fees from their underlying representation of Plaintiff, (2) costs and attorneys’ fees associated with their efforts in bringing their counterclaim, and (3) costs and attorneys’ fees associated with their efforts to defend themselves pro se against the legal malpractice action. For the reasons that follow, the Court concludes that while Defendants are entitled to recover the unpaid legal fees and expenses incurred in bringing the instant counterclaim, Defendants are not entitled to the additional costs and fees for the time spent in defending the legal malpractice action.

As an initial matter, Plaintiff does not contest the terms of the Retainer Agreement or the time spent and bills for Defendants’ underlying representation. Because this Court has already granted summary judgment dismissing the claims of [*6] legal malpractice against Defendants, and because there are no disputed issues of material fact on this point, the Court concludes that Defendants are entitled to judgment on their counterclaim for $ 24,265.31, including legal fees and interest through December 20, 2004, as well as $ 4,267.75 in additional interest for the period of December 21, 2004 through December 20, 2005. (See Pl.’s R. 56.1 Stmt., at No. 11.)

Next, pursuant to the Retainer Agreement, Fed. R. Civ. P. 54(d)(2), and 28 U.S.C. § 1927, Defendants move for summary judgment for costs and attorneys’ fees expended in making the instant counterclaim to collect their underlying legal fee, and in defending against the legal malpractice action. The Retainer Agreement provides in relevant part: "If it is necessary to institute litigation to collect our fee . . . you will be responsible for all costs and legal fees associated with such action []." (Kern Decl. P 10.) Under the plain language of the Agreement, Defendants are entitled to the costs and legal fees associated with bringing this counterclaim. Defendants are directed to submit a declaration within thirty (30) days of this Memorandum and Order, detailing this precise [*7] amount.

Contrary to Defendants’ assertions, however, the plain language of the Retainer Agreement does not enable Defendants to recover costs and fees incurred in defending against the legal malpractice action. The Retainer Agreement nowhere mentions defense against litigation. Further, although the Agreement refers to the collection of costs and legal fees, the Court does not believe that this reference encompasses expenses incurred in an ensuing malpractice suit. As described above, the language instead refers to the expense of litigation to recover the fee for the services covered by the Retainer Agreement. Accordingly, the Court concludes that the Retainer Agreement does not authorize the award of costs and legal fees for the defense of the instant action."

ROBERTO BERAS, Plaintiff-Appellant, -v.- STEPHANIE M. CARVLIN, ROBERT C. GOTTLIEB, MARK STEIN, THE FIRM FRIED, FRANK, HARRIS, SHRIVER, AND JACOBSON, CHARLES A. ROSS, THE FIRM OF BRAFMAN & ROSS, Defendants-Appellees.;No. 07-2514-cv;UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT;2008 U.S. App. LEXIS 19805

is a prime  example of  pro-se litigation in legal malpractice.  It seems that there are two tiers of litigation; one has real substance, and is brought within the accepted norms and rules of legal malpractice litigation; the second is a pro-se tier where there is much procedural fuss, but little traction or success.  This case and its predecessor are examples of a pro-se case doomed from the start..

"On January 28, 2001, Beras was convicted of multiple counts of money laundering following a trial by jury, during which he was represented by Charles A. Ross. See United States v. Dinero Express, Inc., 57 Fed. Appx. 456, 457 (2d Cir. 2002). Beras then filed an action on November 14, 2003 (the "2003 Action") in the Southern District of New York (Charles L. Brieant, J.) against Ross for legal malpractice, breach of fiduciary duty, breach of contract, and fraud.

Adopting the report and recommendation of a magistrate judge, the District Court dismissed the complaint because (1) the "malpractice claim fail[ed] at the outset as [Beras] has not secured a reversal of his criminal conviction [as required by New York law];" [*3] (2) "[Beras] fail[ed] to show that [Ross] breached his fiduciary duty;" (3) the breach of contract claim was "not supported by any facts in the record" and was "completely without merit;" and (4) because Beras "simply repeat[ed] his [breach-of-duty] claims" as the basis for his fraud claim, his pleadings were "insufficient to support a claim of fraud." Beras appealed the dismissal of his complaint, and on June 20, 2006, our Court dismissed his appeal "because it lack[ed] an arguable basis in fact or law."

Three months later, Beras commenced the instant action (the "2006 Action") against Ross, Ross’s law firm, the attorneys representing Beras’s co-defendants, and one of their law firms. He alleged legal malpractice, a violation of his due process rights, breach of fiduciary duty, breach of contract, and fraud, all arising from the criminal proceedings that resulted in his 2001 conviction.

Because the 2006 Action constitutes an attempt to relitigate issues that were or could have been raised in the 2003 Action, it is barred by the doctrine of res judicata. See Rivet v. Regions Bank, 522 U.S. 470, 476, 118 S. Ct. 921, 139 L. Ed. 2d 912 (1998). HN1Res judicata applies when "1) the previous action involved an adjudication on [*4] the merits; 2) the previous action involved the [same parties] or those in privity with them; and 3) the claims asserted in the subsequent action were, or could have been, raised in the prior action." Monahan v. New York City Dep’t of Corrections, 214 F.3d 275, 285 (2d Cir. 2000). Each of these elements has been satisfied here.