This is the type of case that gives litigation [and especially legal malpractice litigation] a bad name.  Phung v. Summerville is a well written, reasoned NJ decision which discusses an inexplicable situation.  Plaintiff has a nice 12 unit building in Elizabeth NJ.  She agrees to sell, but then makes unreasonable demands of the buyers.  They refuse to close.  She finds other buyers, but at closing demands that the buyers pay back taxes on the building.  They refuse, and eventually win a specific performance action.

Then things really go bad.  The story line is a sad tale.  Look at how much time was wasted by all:

"Plaintiff claimed that Espinosa committed legal malpractice in his handling of both the Rodriguez and Abreu matters. Espinosa denied any deviation from the standards of care. He contended that both matters ended unfavorably for plaintiff because of her own statements and actions. His account of the events diverged substantially from plaintiff’s.

Plaintiff initially retained Ambrosio to sue Espinosa for legal malpractice. Ambrosio brought such a lawsuit on plaintiff’s behalf in September 1996 in the Law Division in Union County. As the case progressed, plaintiff had disagreements with Ambrosio. The disagreements led Ambrosio to withdraw from plaintiff’s representation and to disclaim any fee. Ambrosio arranged, with plaintiff’s assent, to have Summerville substitute for him as her counsel in the litigation. At the time of the substitution, the discovery period had not yet elapsed.

Plaintiff then had disagreements with Summerville. One of their disputes concerned her firing of a real estate expert, William Ard, who Summerville had arranged to prepare a valuation of the subject property. The purpose of Ard’s valuation was to attempt to show that plaintiff had suffered damages in the real estate transactions that Espinosa handled. Four months after succeeding Ambrosio, Summerville moved to withdraw as plaintiff’s counsel, but the court denied his application.

Prior to the scheduled trial in Union County in the fall of 1998, the Law Division granted Espinosa’s motion to dismiss plaintiff’s legal malpractice case against him, with prejudice. Among other things, the dismissal was based on plaintiff’s failure to have an expert who could demonstrate at trial that any alleged malpractice by Espinosa had caused her actual damage in the forced sale of the premises. The dismissal was also predicated on the court’s application of principles of collateral estoppel against plaintiff, stemming from the Chancery judge’s express findings in 1995 that (1) plaintiff had proper notice of the Abreus’ specific performance case, and (2) the plain meaning of the Abreus’ contract did not require them, as buyers, to pay the outstanding realty taxes.
Plaintiff retained a new attorney and appealed the dismissal order. We affirmed the order in a per curiam opinion in July 2000. Phung v. Espinosa, No. A-2884-98 (App. Div. July 27, 2000).

Subsequently, plaintiff filed the present legal malpractice action in the Law Division in Hudson County against Ambrosio, Summerville, and their respective law firms. She was represented in the case by another attorney, who was replaced by yet another attorney before trial.

Before trial, the court granted Ambrosio summary judgment for lack of proof of causation, because both Summerville and plaintiff’s legal malpractice expert conceded that Summerville had ample time to prepare the case against Espinosa after Ambrosio withdrew. The summary judgment was memorialized in an order dated June 7, 2006.

The case proceeded to trial in Hudson County solely against Summerville and his firm. Plaintiff testified on her own behalf, and also presented testimony from a legal malpractice expert and a real estate broker. Summerville testified for the defense, along with Espinosa, Ard, and a competing legal malpractice expert.

After about thirty minutes of deliberations, the jury returned a verdict for the defendants. On the corresponding verdict sheet, the jury unanimously decided that plaintiff had failed to meet her burden of proving that Espinosa deviated from the standards of care in both the Rodriguez and Abreu matters. Those threshold determinations made it unnecessary for the jury to reach secondary questions on the verdict sheet concerning Summerville’s own alleged deviations.

Plaintiff moved for a new trial, alleging that the verdict was against the weight of the evidence. The

In New York a Notice to Admit is a discovery device which is used, but which has a small part in the panaply of discovery weapons.  Failure to admit that which is later provded is subject to sanctions and costs, but nominal costs are the usual outcome.

Here, in a report from California Attorney’s fees blog about a cost-shifting statute put into play in a legal malpractice case which cost $ 80,000.  Here are the details:

"The fee-shifting provision of Code of Civil Procedure section 2033.430(a). allows a trial court to award “costs of proof,” including reasonable attorney’s fees, to a party that proves facts that should have been admitted through the requests for admission (RFA) discovery process. This case is the second illustration of how practitioners need to be very careful in responding to requests for admission or else expose their clients to substantial “cost of proof” awards. West Side Health Care Dist. v. Hooper, Lundy & Bookman, Case No. B190562 (2d Dist., Div. 4 June 11, 2008) (unpublished), involved a plaintiff suing its Former Attorneys for transactional legal malpractice. The trial judge granted summary judgment based on the statute of limitations contained in Code of Civil Procedure section 340.6 and on lack of causation, rulings which were affirmed on appeal.

Winning Former Attorneys also moved for an award of $122,626.42 in attorney’s fees and costs (mainly fees) under the RFA fee-shifting statute, plus $3,240 of costs in bringing the fee motion. "

We’ve written about retaining and charging liens, the Judiciary law, and how hearings on attorney fees can have collateral estoppel effects on legal malpractice litigation.  Here is aConnecticut case which discusses the same issues, albeit in a habeas corpus and "file retention" setting. 

Plaintiff hired the target attorney, had 13 boxes of files transferred, and the "situation deteriorated."   This led to firing, naming a new attorney who did not file transfer papers in CT, and legal malpractice litigation.  We can’t clip the decision for you, so you’ll have to read it on your own using the link.

Law.Com reports that the law firm of Ballard Spahr won a jury trial yesterday. 

Beyond the usual legal malpractice issues and testimony, there was plenty of star power [in a law sort of way] as " famed Florida litigator Roy Black of Black Srebnick Kornspan & Stumpf represented Epstein along with Boca Raton-based Lance W. Shinder and local counsel Marc R. Steinberg, managing partner of Rubin Glickman Steinberg & Gifford in Lansdale, Pa.

His attorneys said in court documents that Crusader was never mentioned at the meeting with Epstein and Kaplinsky and that Epstein met with Crusader, and its then-executive — now gubernatorial candidate — Tom Knox, on his own in February 1999. "

"A Montgomery County jury vindicated Ballard Spahr Andrews & Ingersoll on Monday in a breach of fiduciary duty suit brought against the firm by a man seeking between $17 million to $30 million in lost profits plus interest and punitive damages.

Plaintiff Saul R. Epstein originally claimed the firm and Alan S. Kaplinsky, the firm’s consumer financial services group chairman, committed legal malpractice, breached their fiduciary duty and interfered with a prospective contractual relationship, according to court documents. In Epstein v. Kaplinsky, Epstein claimed the firm shared his prospective business interests with another firm client involved in similar work, according to court documents.

An 11-to-1 jury found that Ballard Spahr owed a duty to Epstein but found by the same margin that neither Kaplinsky nor the firm breached that duty, according to Ballard Spahr partner Darryl May who acted as in-house counsel for the firm during the case. "

This case, Elacqua v. Physicians Reciprocal Insurers is a medical malpractice matter, in which the doctors had both covered and non-covered claims against them  Naturally, the insurance company had coverage for certain of the claims.  Although this case is in the medical malpractice area, it is fully applicable to legal malpractice.

The insurer was under an obligation to inform the doctors that they could have independent counsel, at the insurer’s cost, to represent them.  The failure to inform the doctors could amount to deceptive business practices under Business Law 349. 

The NYLJ reports: "Drs. Mary S. Elacqua and William Hennessey alleged deceptive business practices because they were not told they were entitled to choose independent counsels, at the insurance company’s expense, to represent them when a conflict of interest arose between covered and uncovered claims in the malpractice case against them. They were each represented by lawyers assigned by their insurance company.

The state Court of Appeals recognized the obligation by an insurer to provide independent representation to insureds in Public Serv. Mut. Ins. Co. v. Goldfarb, 53 NY2d 392 (1981), the Third Department panel said.

Yet, according to last week’s ruling, a lawyer for Physicians’ Reciprocal Insurers and the company’s general counsel both acknowledged that its "practice is not to inform its insureds with whom it has conflicts that they have the right to select independent counsel at defendant’s expense." In fact, the Third Department noted that in a 2005 ruling in the same case, Elacqua v. Physicians’ Reciprocal Insurers, 21 AD3d 707, it confirmed that insurers have an "affirmative obligation" to inform insureds of their rights.

"Here, the partial disclaimer letters sent by defendant to its insureds – including plaintiffs – failed to inform them that they had the right to select independent counsel at defendant’s expense, instead misadvising that plaintiffs could retain counsel to protest their uninsured interests ‘at [their] own expense,’" Justice Karen K. Peters wrote for the panel. "Equally disturbing is the fact that defendant continued to send similar letters to its insureds, failing to inform them of their rights, even after this Court’s pronouncement in Elacqua I."

Law.Com reports that "Alston & Bird and and the bankruptcy trustee for one of its former clients, the beleaguered Friedman’s Jewelers Inc., are on the verge of settling a suit over allegations that the firm committed legal malpractice. "

"Alston & Bird, which served as Friedman’s outside general counsel from the 1990s until the company terminated their relationship in 2004, contributed to some of those troubles, according to Alan Cohen, Friedman’s bankruptcy trustee. He filed a complicated adversary complaint on behalf of the Friedman’s Creditor Trust against the law firm and five other defendants in the U.S. Bankruptcy Court for the Southern District of Georgia in January 2007.

The first claim is that Alston & Bird committed legal malpractice by failing to disclose material facts related to Friedman’s $85 million investment in Crescent Jewelers Inc., which became irrecoverable when Crescent declared bankruptcy in 2004.

In the second claim, the trustee complains about the fees Alston charged Friedman’s. He claims that Alston took $5 million in legal fees but did not give an equivalent value of services. In the third claim, the trustee alleges that Friedman’s — while it was insolvent — paid Alston almost $700,000. That’s more than the company should have paid, given its financial posture, under the Bankruptcy Code, according to the trustee.

Now, more than a year later, the parties are close to striking a deal to resolve those disputes. "

The case of Rozen v. Nite Rider Group, Inc. seems to be going on in three different venues.  There was the original case, based on loans and property noldings, there is a legal malpractice case, and apparently there is also a Judiciary Law 487 case too. "This motion by former defense counsel, Russ & Russ, P.C., Jay Edmond Russ, Daniel P. Rosenthal, Kenneth J. Lauri and Ira Levine, (the Russ attorneys), for an order dismissing the parties’ motions for sanctions on the moving parties for engaging in frivolous conduct as defined in 22 NYCRR 130-1.1, or, in the alternative, staying a hearing on the aforesaid motions, dated March 18, 2008, and March 24, 2008, until a decision is rendered on the Russ attorneys’ motions to dismiss the complaint in an action brought against them by Rozen for breach of section 487 of the Judiciary Law (pending under Index Number 19442/2007), and another action brought against them for malpractice (pending under Index Number 01462/2008)"

Here, "After the trial concluded, the plaintiffs became aware that a certain parcel of real property situate in Mattituck, New York, which had been the subject of financial transactions between the parties, and on which it was understood at the time of trial that defendant Sally Omar held an option, was no longer subject to that option. The option had, on May 12, 2007, been assigned by Omar to her attorneys, seemingly in lieu of payment of fees. Plaintiffs assert that settlement offers extended to the Omar defendants, and their business entities, were not transmitted to them by defense counsel insofar as the offers involved the Mattituck property to which the defendants no longer held any interest."

Now, sanctions are sought against the attorneys, even though they are no longer in the case. "In March of 2008 both the plaintiffs and the defendants moved for a hearing to impose sanctions on Russ & Russ, P.C., and those professionals affiliated with them, for engaging in [*2]litigation conduct which satisfies the definition of frivolous conduct as set forth in 22 NYCRR § 130-1.1. (Motion Sequence No. 008 and No. 009.). It is alleged that the conduct of the moving parties undermined the integrity of the judicial process and increased the legal fees of the plaintiffs. Specifically that : "It was the intention of the Russ & Russ Attorneys to take the option to the Mattituck property from the Omars and then cause the Rozens to incur extensive delays and expense so that they would relinquish their rights to the Mattituck property without the knowledge that the Russ & Russ Attorneys sought to develop and profiteer from the property." Rosen OSC dated March 18, 2008, ¶ 11. "

An action agains tShearman & Sterling for failures in a loan transaction continues, after the First Department affirmed denial of a motion to dismiss.  In Garten v. Shearman & Sterling. 

"Plaintiff has stated a cause of action for legal malpractice by alleging that "but for" defendant’s failure to prepare and procure documents necessary to provide him with a first-priority security interest, he would have been able to recover the amounts owed to him by the defaulting borrower (see AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 [2007]). The documentary evidence does not establish a defense as a matter of law (see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326-327 [2002]). Under "Documentation relating to Security Agreement," defendant’s closing documents checklist included "[e]vidence that all other action that the Lender may deem necessary or desirable in order to perfect and protect the first priority liens and security interests created under the Security Agreement has been taken (including, without limitation, UCC-3 termination statements)." Thus, defendant was obligated not only to prepare the loan documents, but also to protect plaintiff’s expectation that the agreement that he would hold a senior security interest was effective. However, defendant allegedly neither attempted to obtain such documentation from the senior creditors nor advised plaintiff of the hazards of proceeding with the loan without it. "