We reported on this Pennsylvania case last week, having come across several previously unknown words in the decision and article, such as prothonotary.  Here is a follow up article in which the judge recuses himself after the verdict.

"Luzerne County President Judge Mark A. Ciavarella Jr. has recused himself from making post-trial rulings in a $3.4 million legal malpractice case won in February by Robert J. Powell, the prominent attorney with whom Ciavarella has had financial ties.

Ciavarella issued an order Monday directing court administrators to assign another judge to rule on two motions filed by Jeffrey McCarron, the attorney representing the Hazleton law firm that lost to Powell’s clients — a group that includes members of the Slusser family of contractors and construction material suppliers.

In the first motion, filed May 13, McCarron requested a new trial, saying Ciavarella showed an “obvious display of favoritism” toward Powell’s clients. McCarron accused the judge of excluding evidence presented on behalf of his clients, Laputka, Bayless, Ecker & Cohn; making statements in front of the jury that prejudiced the firm’s case; and limiting the testimony of the firm’s witnesses, while granting more leeway to Powell and his witnesses. "

Chicago Business Litigation Lawyer Blog reports that a huge class action legal malpractice case against DLA Piper Rudnick has been dismissed.  Plaintiff’s and defendants had entered into a tolling agreement that was amended and went on for several years.  This case was valued at over $ 19 million dollars.  After several amendments of the tolling agreement plaintiffs started the case, but the court determined that it was started a year too late!  Joyce v. DLA Piper Rudnick ended in dismissal.

From the Blog: "The underlying dispute started in 1999, when 21st Century agreed to merge with competitor RCN. DLA Piper attorneys drafted a merger agreement with a mistake that lowered the price of the stock 21st Century shareholders were to receive by $19 million. In response, Edward Joyce, the stockholders’ representative, made a tolling agreement with DLA Piper, in which the statute of limitations was tolled unless a stockholder lawsuit was filed against the firm on or before December 31, 2002. The firm agreed not to avail itself of any statute of limitations defense until after that day. This agreement was amended four times, each time altering only the date. The last agreement set that date at August 21, 2005.

Joyce filed a legal malpractice class action in Cook County against DLA Piper on August 30, 2006. After some procedural disputes, including a finding by the trial court that the filing was timely, the firm won a motion to dismiss based on plaintiff’s lack of standing as a non-client. The plaintiffs appealed and the defendant cross-appealed on the trial court’s decision that the suit was timely.

The appeals court upheld that cross-appeal, finding that the plaintiffs were barred because they filed nearly a year after the last agreement expired. The court rejected the defendants’ contention that it was timely because each amended tolling agreement constituted a new contract that extended the statute of limitations. "

Here, we have Section 130 and Rule 11.  In South Carolina, there are frivolous law suit penalties and sanctions too.  Ex Parte Gregory v. Malloy. is the rather unflattering story of one legal malpractice attorney who went ahead and started a ridiculous suit, all for naught.

Plaintiff is injured in an automobile accident case, and his attorney successfully settles the case.  There is a medicaid lien dispute and the proceeds are not readily distributed.  Plaintiff hires a new attorney, who starts a conversion action against target attorney, and incidentally, makes inflammatory remarks to a newspaper, too.

From the decision:

"In May 1999, Jerry Bittle (Bittle) was seriously injured in an automobile accident in which one person died and four additional people were injured. Bittle sustained a brain injury and is now unable to care for himself. After the accident, Bittle’s elderly mother, Melton, retained respondent to represent Bittle’s interests in seeking recovery for his injuries.

In June 2001, an agreement was reached on how the available insurance coverage would be allocated among the claimants. Bittle was to receive $14,868.97. Within two months, Melton and Bittle went to respondent’s office to consummate the settlement. Respondent was not present. Bittle endorsed the settlement check and respondent’s secretary explained that Bittle would not receive the endorsed check but he would receive another check later.

Melton called and visited respondent’s office several times to determine when the settlement check would be transferred to them; however she was unable to reach him. Melton was aware there was not enough money available from the settlement to pay all of the medical bills; however, she testified she thought respondent had either kept or spent the settlement proceeds.

Melton consulted appellant in January 2004. After the above facts were related to appellant, appellant contacted the insurance agency for the at-fault party and talked with the adjuster who had handled the claim. After obtaining the settlement documents, appellant determined the settlement check was presented for payment on August 24, 2001. Appellant reviewed telephone records that revealed the number of times Melton had called respondent. Appellant also knew that Melton had sought help from a North Carolina attorney; however, seeking that attorney’s help did not produce any response from respondent.

Appellant informed Melton she should file a grievance with the Office of Disciplinary Counsel because he felt that if Melton filed a grievance then it might “shake [the money] loose” from respondent. Appellant prepared the letter to disciplinary counsel for Melton and also prepared a subsequent letter. At this point, appellant indicated he was waiting to see what would happen with the grievance and that he was hoping respondent would deliver the money; however, he became concerned that the statute of limitations on any claim concerning the settlement proceeds would run by the end of August 2004.

In June 2004, Melton wrote respondent a letter terminating his services for failure to account for the settlement proceeds. She then entered into a retainer agreement with appellant so that he would pursue claims for wrongfully holding the settlement funds. Appellant was to take one-third of Melton’s recovery, plus any expenses were to come from Melton’s portion of her recovery. Appellant associated J. Leeds Barroll as co-counsel in late July 2004.

After Barroll and appellant discussed the facts of the case, Barroll researched causes of action and drafted the complaint. Barroll asked appellant if he thought he should contact respondent but appellant did not think it would “do any good.” Because respondent had not responded to Melton’s requests for information regarding the funds, Barroll included the conversion action in the complaint. Barroll testified that because the statute of limitations was going to run, he felt they were in a “shoot first, ask questions later” mode. Barroll stated appellant did not initially tell him that he had been on the case since January.

Appellant testified that the basis of the claim for conversion against respondent was that respondent refused to account for the money. Appellant stated he had no knowledge that respondent had actually converted the money.

Leighton Bell, a staff writer with the Cheraw Chronicle, learned of Melton’s suit against respondent when the process server personally gave the summons and complaint to him. As a result, he wrote two articles regarding the suit. He stated he spoke to appellant first and that appellant was not surprised by his call and was very helpful with the article. In one article, appellant was quoted as saying: “As an attorney [respondent] should have known he couldn’t co-mingle funds,” and “If for some reason he couldn’t disperse the check he should have put it in a separate fund. Whatever [respondent] did, he should’t have kept it in his pocket and collected all the interest on it.”

After the action began, respondent immediately transferred the settlement proceeds from his trust account to appellant. Barroll then deposed the Medicaid agent regarding Medicaid’s lien on the settlement proceeds. After the deposition, Barroll voluntarily dismissed the case with prejudice a mere seven weeks after filing. Barroll stated that if he had been involved in the case since January, as appellant had been, he would have had time to interview the Medicaid agent prior to filing a lawsuit. Barroll also acknowledged that once he requested respondent’s file and reviewed it, he was able to determine that respondent had been in touch with Medicaid about reducing its lien against the settlement proceeds. Although the contact was minimal, Barroll felt it was a waste of time to proceed with the lawsuit. He indicated there was no evidence that appellant ever asked for respondent’s file.

As soon as respondent transferred the money to appellant, Barroll began negotiations with Medicaid and the medical providers to compromise the liens and bills. The Medicaid lien was compromised for $3,469 and the balance of the settlement funds, after subtracting $4,956.32 in attorney fees and $1,045.15 in expenses, was paid to Melton. Melton received $5,398.50.

Respondent filed his motion for sanctions and contended that appellant had no basis for filing a claim, and in particular, the conversion claim. Respondent stated in his affidavit that he was representing Melton and Bittle for free. He stated he discussed with Melton and Bittle how to deal with all of the medical liens and that they agreed that they did not want to jeopardize Bittle’s Medicaid eligibility. He requested a waiver of the Medicaid lien but was only able to obtain an agreement for reduction. He stated, even with the reduction, there would be no funds left over for Bittle.

Due to Rule 1.15 of the Rules of Professional Conduct, respondent stated he was obligated to hold the settlement funds until the disputes between the lienholders and his client were resolved, a fact he explained to Bittle and Melton.[2] He informed them he may be able to recover funds for Bittle if he held the funds until the statute of limitations had expired on the medical provider liens. This method would leave only the Medicaid lien to resolve. He then held the funds per their agreement. The C.P.A. who reviewed respondent’s account stated the funds never left respondent’s trust account until the check was written to appellant.

Appellant testified he did not contact respondent because he thought if respondent would not respond to his clients or the North Carolina attorney, then he would not respond to him. He also felt it was unnecessary to contact respondent because he expected Disciplinary Counsel to take care of it. Appellant stated he did not get respondent’s file because he did not think he would learn anything from it.

The trial court granted respondent’s motion for summary judgment and found there was no dispute the funds remained in respondent’s trust account from the time of the settlement until the funds were disbursed to appellant. The court concluded the cause of action for conversion was frivolous. The court did not issue a judgment against Melton because she had relied on the advice of counsel. The court found appellant had not conducted a reasonable investigation before filing the conversion suit. The court awarded respondent $27,364.31 in attorney fees and costs in defending the action and in pursuing the claim for sanctions.

In New York, there is no absolute requirement to appeal a negative outcome prior to bringing a legal malpractice action, nor is there a requirement "not to settle" a case prior to bringing a legal malpractice case.  The standard is whether plaintiff was "effectively compelled" to settle.

Here is a Florida Case, Technical Packaging v. Hanchett on the issue of whether an appeal is absolutely required prior to bringing the legal malpractice case.  They wanted to sue, and consulted with the target attorney.  Target attorney told them that the statute of limitations was 5 years, when in fact it was 4.  Target attorney turned down the case, and plaintiff hired other attorneys, only to find out it was late in starting the case.  Now, target attorney defends on the basis that plaintiff did not appeal the outcome. 

Read the case for Florida reasoning, but the outcome is that no appeal is absolutely necessary.

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. "