It’s often surprising, when reading a newly published case, at the wide difference between plaintiff’s take on the case, and the defense presented by his former attorneys.  The attorneys, who just a short period earlier had been plaintiff’s paragons, now have a diametrically opposed viewpoint.  Sometimes it may be justified.  Here is a newly published case in which plaintiff went into bankruptcy, and suspended his mortgage and other payments on a house.  Years went by, and inter alia the house became more valuable.  Then he was forced to pay the old arrears. 

John Vlahakis, appellant, v Mendelson & Associates, et al., respondents. (Index No. 13210/04)2007-06336  SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT2008 NY Slip Op 6703;September 2, 2008, Decided

"The plaintiff alleged that he sustained damages because the defendants, who were his attorneys in a bankruptcy proceeding, advised him that he would not have to pay the arrears which he owed on the mortgage on his residence. The plaintiff further alleged that this advice constituted legal malpractice, and that as a result, he was required to pay interest and late charges on the arrears, as well as attorneys’ fees."

"Here, the defendants met their initial burden on their motion for summary judgment by demonstrating, prima facie, that the plaintiff did not sustain any damages as a result of their actions. Specifically, the defendants established that their efforts on the plaintiff’s behalf resulted in his continuing to reside in his house for approximately seven years, during which [*2] time the value of his house increased significantly. Moreover, the defendants established that during that period the plaintiff was not paying his mortgage, taxes, or insurance. In opposition, the plaintiff failed to raise a triable issue of fact as to whether the sum he eventually paid to the bank exceeded the amount that he saved by not paying his mortgage, taxes, and insurance for approximately seven years. The plaintiff’s mere assertion, which was unsupported by competent evidence, that he had sustained monetary damages, was insufficient to raise a triable issue of fact."

This seems to be a new twist.  It dovetails with our earlier discussions of  new venues in legal malpractice, and cases being brought against lawyers by persons other than their clients.  Here, former opponents sue the attorneys after bargaining with the bankrupt client and obtaining communications between bankrupt client and its attorney.  Now:

"Eager to put an end to a fraud suit brought by a software developer, New Century Mortgage agreed, as part of a settlement in federal bankruptcy court in Delaware, to turn over to opponent Positive Software Solutions Inc. privileged material and internal company documents that also concern a related federal software licensing suit, according to Texas Lawyer.

Now, Positive Software is using those privileged materials to seek sanctions against New Century’s counsel, the Susman Godfrey law firm and two of its partners, Barry Barnett and Ophelia Camina in a federal lawsuit in Texas. It contends that they engaged in fraud and misconduct that eventually caused Positive Software to lose a 2004 arbitration of the software licensing suit, the legal publication explains.

The partners say they did nothing wrong, Texas Lawyer reports. But Positive Software is using material it got from New Century to bolster its argument, in an August filing, that Susman Godfrey should have to turn over internal litigation work product, on the theory that the crime-fraud exception applies, according to attorney Michael Shore of Shore Chan Bragalone in Dallas. He represents the software developer.

"As a practical matter, documents that were thought to be privileged are in the other side’s hands. So, basically, what they did was bought the privilege. And that, in my experience, is unprecedented," says partner David Beck of Beck Redden & Secrest in Houston, who represents the Susman Godfrey defendants."

 

Legal Pad discusses the ABA ABA’s Standing Committee on Lawyers’ Professional Liability  Report on Legal Malpractice in this report. 

"Legal malpractice claims have gotten more expensive. We think.The claims that result in the highest of indemnity payments appear to be on an upward march, according to an ABA study unveiled this morning at the ABA’s national legal malpractice conference in San Francisco.It’s just not clear how vigorous a march.  The study showed a "“significant increase” in multimillion dollar payouts in the past four years. The study found that claims leading to payments of more than $2 million had more than doubled, from 19 in the 2003 study to 44 in the latest study"

 

In this short article [no link to the decision] it is reported that in the Cal City v. Wilson Elser case, a legal malpractice jury verdict of $ 17 million + has been dismissed and reduced to below $ 1 million dollars.

" California appeals court has upheld a $941,000 legal malpractice verdict against Wilson Elser Moskowitz Edelman & Dicker, but has thrown out $1.7 million of the original award given to the firm’s former client.

The California Court of Appeal, Second District, on May 28 affirmed the $941,000 award to Cal-City Construction, a company that had hired Wilson Elser after the Los Angeles Unified School District removed the company from one construction project and refused to make payments on another.

According to the decision, Wilson Elser had advised the construction company to walk off the job on the second project. However, prior to the construction company’s breach of contract trial against the school district, the law firm told the client that it should not have walked off the job, and that its only option was to settle under unfavorable terms.
 

Thomas Hyland, managing partner of Wilson Elser’s New York office, said the firm was evaluating the decision.
"We are disappointed that any part of the verdict against our firm was affirmed, but we are pleased that the majority of claim has been knocked out," Hyland said. "
 

Legal Profession Blog reports this dismissed legal malpractice case.  Before reading, please see the last paragraph in which the court holds that there still is a remedy available.

"The North Carolina Court of Appeal today held that a claim of legal malpractice was barred by the statute of repose against a lawyer who had dismissed his client’s accident claim and concealed the dismisal through a series of false representations."

"The court held:

`In the instant case, the facts show that on 21 October 1997, McLaurin voluntarily dismissed without prejudice plaintiff’s claims arising from the 1992 accident. Rule 41(a) of the North Carolina Rules of Civil Procedure requires that any new action after a voluntary dismissal be refiled within one year after the dismissal. N.C. Gen. Stat. § 1A-1, Rule 41(a) (2007). Thus, the last opportunity for McLaurin to act on plaintiff’s claim occurred on 21 October 1998. Plaintiff brought his professional malpractice action against McLaurin on 9 May 2006, nearly seven years after McLaurin’s last act. Thus, plaintiff’s professional negligence claim was barred by the statute of repose, and the trial court did not err in dismissing plaintiff’s claim.
We note that the actions of McLaurin, as alleged in plaintiff’s complaint, are particularly egregious. However, it is for the legislature, and not the courts, to establish statutes of limitations, statutes of repose, and any exceptions to those rules. It is not the role of the courts to create exceptions to the laws established by the legislature where the intent of the legislature is made manifestly clear on the face of the statute.

The court further held that a claim of fraudulent concealment was properly brought against the individual lawyer but not his law firm. ‘"
 

We reported on this case, and its little known term, Prothonotary last month.  Now the Times Leader reports: "Luzerne County Prothonotary Jill Moran has once again entered a $3.4 million judgment against a law firm in a hotly contested legal malpractice case that included allegations of bias against Judge Mark Ciavarella.

 

Moran on Friday signed a court document that will allow attorneys with Robert Powell and Associates, a law firm in which she is a partner, to collect on a jury verdict awarded to Bernadette Slusser against the law firm of Laputka, Bayless, Ecker and Cohn.

Moran’s action comes six weeks after a specially appointed Centre County judge struck down a previous judgment Moran signed. Senior Judge Charles C. Brown Jr. ruled on July 14 that the Powell firm had acted prematurely in obtaining the judgment because an outstanding legal claim had not yet been resolved.

That outstanding claim, known as detrimental reliance, became a non-issue on Thursday, however, after Jonathan Lang, an attorney with the Powell firm, filed court papers dropping the claim. That opened the door for the firm to once again seek to collect on the judgment.

The move is the latest legal salvo in a highly contentious battle over the $3.4 million verdict a jury entered in February against the Laputka firm."

 

Plaintiff is injured at work and sues the third-party.  Plaintiff asks attorney whether she may sue her employer.  The answer is "No", isn’t it?  After all, one may not sue one’s employer, correct?

In a fine example of how much investigation may be necessary, Thompson v Seligman
2008 NY Slip Op 06496 Decided on July 31, 2008 Appellate Division, Third Department  reports that plaintiff has raised a question of fact whether defendant attorneys investigated enough.  It turns out that plaintiff was not employed by the entity where she worked.
 

"Plaintiff was employed by AMFAC Recreational Services, Inc., which had contracted to regularly provide the Gideon Putnam Hotel with cleaning persons. Plaintiff was injured while she was cleaning rooms at the Gideon. She retained defendant Raymond J. Seligman and his law firm to represent her in a claim for workers’ compensation benefits. Plaintiff also inquired about suing the Gideon for recovery for pain and suffering. Seligman informed her that she could not pursue such a claim, based upon his mistaken belief that she was employed by the Gideon. By the time that plaintiff consulted with a different attorney who advised her that she could have brought a third-party claim for pain and suffering, the statute of limitations had expired. "

 

Reading this case, in which there is an ancillary legal malpractice case, reminded us of the ubiquitousnature of legal malpractice.  This case, ELIOT I. BERNSTEIN, et al., Plaintiffs, – against – STATE OF NEW YORK, et al., Defendants.07 Civ. 11196 (SAS);  UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK  2008 U.S. Dist. LEXIS 61269August 8, 2008, Decided   August 8, 2008, Filed  makes for fascinating reading.  Just look how it starts:
 

Plaintiff: "This action presents a dramatic story of intrigue, car bombing, conspiracy, video technology, and murder. In short, plaintiffs allege that hundreds of defendants engaged in a massive conspiracy to violate their civil rights and, in the process, contributed to the Enron bankruptcy and the presidency of George W. Bush. In plaintiffs’ words:
Plaintiffs depict a conspiratorial pattern of fraud, deceit, and misrepresentation, that runs so wide and so deep, that it tears at the very fabric, and becomes the litmus test, of what has come to be known as free commerce through inventors’ rights and due process in this country, and in that the circumstances involve inventors’ rights tears at the very fabric of the Democracy protected under the Constitution of the United States."

Defendants: " For many years, pro se Plaintiffs Eliot I. Bernstein and Plaintiff Stephen Lamont have engaged in a defamatory and harassing campaign . . . alleging an immense global conspiracy . . . . Although largely unintelligible, the  [*3] [Amended Complaint] purports to describe a fantastic conspiracy among members of the legal profession, judges and government officials and private individuals and businesses to deprive plaintiffs of what they describe as their "holy grail" technologies"

We often remark that legal malpractice may be found everywhere, and in many an unusual circumstance.  The "Big Dig?"  Sure.  Here is a story from NY Lawyer about a whistle blower whose case was overlooked:

"A would-be whistle blower is suing Washington-based firm Phillips & Cohen in the U.S. Court for the District of Massachusetts for allegedly failing to pursue his false claims case against a contractor to the state’s massive "Big Dig" highway project.

According to the lawsuit for legal malpractice and breach of contract, the plaintiff claimed that he entered into a contract with Phillips & Cohen and attorney Peter W. Chatfield around June 2000. The plaintiff alleged that the firm failed to pursue his case for several years, also that he "did not discover that he had suffered any damages or losses resulting" from Phillips & Cohen’s lack of action until September 2006. Johnston v. Chatfield, No. 1:08-cv-11219-WGY (D. Mass.)

The plaintiff is a former employee of asphalt and concrete supply company Aggregate Industries Northeast Region Inc.

In July 2007, the company pleaded guilty and agreed to pay $50 million to settle criminal and civil charges related to a fraudulent scheme involving concrete. Aggregate agreed to provide up to $75 million in insurance coverage for maintenance problems related to the scheme. "

 

Matrimonial law is rife with questions of legal malpractice.  As in most spheres of the law, settlements take place in the majority of cases.  The general rule in legal malpractice is that one may sue the attorney after a settlement if the settlement was "effectively compelled" by the actions of the attorney.  Here is a case which seem to have arisen after the attorney sued for fees.Steven L. Levitt & Assoc., P.C. v Balkin ;2008 NY Slip Op 06640 Decided on August 19, 2008 Appellate Division, Second Department .
 

"The Supreme Court should have denied that branch of the motion of the plaintiff/counterclaim defendant and the additional counterclaim defendant (hereinafter together the respondents) which was for summary judgment dismissing the appellants’ first counterclaim alleging legal malpractice, based upon allegations that the respondents misrepresented the scope of the oral stipulation of settlement in the related civil action, and that the settlement of the related civil action was not knowingly and voluntarily made. The respondents made a prima facie showing of entitlement to judgment as a matter of law by submitting evidentiary proof, in the form of the transcript of the aforementioned oral stipulation (see Pacella v Whiteman Osterman & Hanna, 14 AD3d 545; Malarkey v Piel, 7 AD3d 681; Laruccia v Forchelli, Curto, Schwartz, Mineo, Carlino & Cohn, 295 AD2d 321). In response, the appellants raised a triable issue of fact as to whether or not they in fact voluntarily and knowingly entered into the terms of the stipulation, specifically with respect to Ronald’s receipt of a credit in the sum of only $500,000, rather than in the sum of $937,000, from Karen’s share of her equitable distribution award. The appellants raised a triable issue of fact by showing that Ronald, in response to a question posed by the court during the proceeding in which the stipulation was placed on the record, changed his response from "no" to "yes," when asked by the court if he understood that it would "not entertain any setting aside of the [settlement] without a showing of extreme circumstances." Ronald explained, in an affidavit, that he changed his answer at the explicit instruction of his attorney, Steven L. Levitt, the plaintiff’s principal. This change in his answer was allegedly based upon statements in the record that the settlement of the related civil action would "be effective as of the date of execution of the documents," and not the date of the court appearance. Ronald averred that he understood that "[t]he formal stipulation of settlement" would reflect his attorney’s representation to him that the misstated sum of $500,000 was to be corrected to $937,000, that the correction would be worked out when the stipulation was put on paper, and that "[i]t would all be fixed’ later."

 

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