This case illustrates how difficult it may be to prosecute a Judiciary law 487 case in a legal malpractice setting.  Sara Kinberg, Plaintiff-Appellant, v Heidi Opinsky, Defendant-Respondent.
SUPREME COURT OF NEW YORK, APPELLATE DIVISION, FIRST DEPARTMENT , 2008 NY Slip Op 4616Decided May 22, 2008.

We have seen unsuccessful 487 cases with allegations of forged wills  which were filed with the surrogate.  Here, the court did not discuss the specific evidence before it,

"The record shows that plaintiff failed to demonstrate that defendant committed negligent acts but for which plaintiff’s 1992 matrimonial action, which plaintiff ultimately settled in 2000 after having discharged defendant, would have ended more favorably to her (see e.g. Tanel v Kreitzer & Vogelman, 293 AD2d 420, 421 [2002]). Moreover, in two causes of action, plaintiff fails to plead any demand for compensatory damages, and her demands for punitive damages are unsupported by evidence that would warrant such relief (see Gamiel v Curtis & Riess-Curtis, P.C., 16 AD3d 140, 141 [2005]). Plaintiff’s cause of action alleging that defendant violated Judiciary Law § 487 is not viable, as the requisite evidence of a "chronic and extreme pattern of legal delinquency" is not found in the record (see Nason v Fisher, 36 AD3d 486, 487 [2007], quoting Solow Mgt. Corp. v Seltzer, 18 AD3d 399, 400 [2005], lv denied 5 NY3d 712 [2005]). [*2] "

An unrelated article in the NYLJ related a cycle in the franchising industry yesterday…from settlement by litigation, through resolution by arbitration, and then on to wide-scale mediation.  Legal malpractice may well be following the same cycle.  As the California Attorney’s Fees Bl;og reports, arbitration is the thing in California. 

"First, the appellate court found the retainer agreement, while only talking about representation in the first lawsuit, had saving language to cover the second lawsuit. The fee agreement expressly stated “[a]dditional matters that we agree to undertake will be under the same terms as stated in this letter unless otherwise agreed in writing.” Unlike the trial court, the Court of Appeal found nothing ambiguous about this language, having the power to reverse because interpretation of a written arbitration agreement is a judicial function.

Next, the Second District, Division 2 turned to the unconscionability determination. It found no procedural unconscionability because the parties simply entered into a business relationship, a far cry from employment relationships that have spawned more rigid protections. (Contrasted with Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (2000) [certain additional “badges of fairness” for arbitration clauses required in employment situations].) The appellate court pragmatically noted there happen to be no shortage of attorneys, such that the clients could have simply gone elsewhere. It also had no sympathy for the unsophistication argument, which was based on the premise that the clients did not read the agreement—the law usually requires this diligence, the Second District wrote. The Court of Appeal also rejected the argument that there needed to be magic “read and understood” terminology, noting that the fee agreement did have “carefully look over before signing” language and a conspicuous “AGREED” signal above the signature lines of a sufficiently clear nature. "

The substantive unconscionability finding was also found unsatisfactory on appeal. Because this case involved private rights (a legal malpractice action) rather than a one involving public rights (such as an employment relationship), there is no additional requirement of guaranteeing the right to discovery in the arbitration forum.

The result: the parties were ordered to arbitrate, as the written fee agreement required them to do.

Do you understand Chapter 11 Bankruptcy practice?  Can you define "cram down" or "impaired class" or "non-recourse loans"?  We can’t, but this case is a primer in Chapter 11 practice and the legal malpractice which may arise in a case.

The facts are complicated, involve general and limited partnerships, non-recourse loans, cross-collateralization and multiple state litigation.  Read the entire matter Breslin Realty Dev. Corp. v Shaw 2008 NY Slip Op 50887(U) Decided on April 21, 2008 Supreme Court, Nassau County .

"Plaintiffs’ motion for leave to reargue and leave to renew a prior motion by defendant which resulted in an order dated September 28, 2007 granting summary judgment dismissing the complaint and upon reargument for an order denying such relief is granted. Defendants’ cross-motion for leave to reargue is also granted, but upon defendants’ motion for reargument, the court adheres to so much of its prior decision as denied defendants’ motion for summary judgment on the grounds of lack of standing and res judicata/collateral estoppel.

This is an action for legal malpractice. Defendants were counsel to the plaintiff debtors in a series of jointly administered Chapter 11 bankruptcy proceedings."

This case from New Jersey illustrates the border line between behavior that is so bad that an expert is not needed at trial to testify on whether there was a deviation, and behavior that is bad, but still requires an expert.  The NJ court found in TARUTIS, v. ALAN ACKERMAN and GREGORY WISOTSKY,  that:

"No expert is needed "where the questioned conduct presents such an obvious breach of an equally obvious professional norm that the fact-finder could resolve the dispute based on its own ordinary knowledge and experience and without resort to technical or esoteric information." Brach Eichler, supra, 345 N.J. Super. at 12. For example, no expert testimony was required when the attorney entirely failed to submit a legal argument in his client’s defense, Sommers v. McKinney, 287 N.J. Super. 1, 8-12 (App. Div. 1996), or where the attorney failed to comply with the controlling statute of limitations, Brizak v. Needle, 239 N.J. Super. 415, 429, 431-33 (App. Div.), certif. denied, 122 N.J. 164 (1990). "

But, where the defendant attorney  "did not retain an expert to testify to the coefficient of friction of the floor, nor did he propound interrogatories, depose any witnesses, request documents, or request admissions from Resorts" the legal malpractice client still needs an expert to testify that the attorney was negligent.

The politicians are in Iowa, the primaries started there, and today we report on a legal malpractice and recusal case in Iowa.  Here two different strands of problems for the legal malpractice plaintiff are twisted together.  One of the strands concerns the judges comment about the legal malpractice plaintiff and defendant:  "one is dishonest, and I had lunch with the other."

The second strand is more technical.  if a court finds that an attorney’s work was "ineffective" need the plaintiff then offer an expert to say the attorney was negligent?  So, far the court says, "not yet."

See the case for details. Hanish v. Bracker

This article from The Statesman.com discusses news about a special group of lawyers, appointed by the Texas Supreme Court  who are to vote today.  They are looking at " a proposal that could require lawyers to tell clients whether they have malpractice insurance.

The idea would seem to have a lot going for it. Legal malpractice insurers estimate that at least half of all Texas lawyers — and about two-thirds of sole practitioners — don’t have insurance, leaving clients who been harmed by malpractice without much recourse. "

From the article:

"Public support is deep: Seventy percent of respondents favored the proposal in a poll the State Bar of Texas conducted in April, and 80 percent said the issue was "very" or "moderately" important to them. The American Bar Association endorses the idea, and 23 states have some form of disclosure requirement.

Still, the proposal is far from a sure thing, having drawn opposition from small-firm lawyers and the president-elect of the State Bar, Fort Worth lawyer Roland Johnson.

Sole practitioners and lawyers in small firms complain about the cost of malpractice insurance and argue that clients will be more inclined to file a malpractice claim if they know insurance coverage is there.

"I believe it’s fairly self-evident that any disclosure of carrying insurance is like painting a target on your back," said Charles Awalt, a Plano sole practitioner and a director of the State Bar’s general practice, solo and small-firm section.

"I don’t think it gives clients a piece of information that is useful," added Charles Hood, a lawyer in Port Lavaca. "Are you not going to hire a good lawyer because he doesn’t have malpractice insurance? Or because he doesn’t have enough?"

The vast majority of lawyers without insurance are sole practitioners or work in small firms of two to five lawyers, according to the State Bar.

There are about 80,000 licensed Texas lawyers; the disclosure would apply to the approximately 49,000 who are in private practice. "

Wiley Rein reports on a case in the Ninth Circuit, arising in Arizona concerning prior acts exclusions in legal malpractice coverage:

"The United States Court of Appeals for the Ninth Circuit, applying Arizona law, has reversed a district court’s entry of summary judgment in favor of a professional liability insurer whose policyholder failed to list its inadequate representation of former clients as a potential claim on its policy application. James River Ins. Co. v. Hebert Schenk, P.C., 519 F.3d 917 (9th Cir. 2008), modified, 2008 WL 1836729 (9th Cir. Apr. 25, 2008). In doing so, the court determined that a reasonable person could disagree over whether the application sought the policyholder’s subjective opinion or a factual response and that it was unclear whether the malpractice claim that did result was reasonably foreseeable.

In the underlying matter, the policyholder law firm was retained by a couple seeking representation following a business failure. An attorney for the firm met with the clients and promised to perform certain follow-up actions on their behalf. However, he thereafter failed to respond to numerous phone calls or otherwise communicate with the clients for nearly three months after this meeting. The clients finally sent a letter to the attorney chastising him for his inattention and indicating that they wished to terminate their relationship. To "bring the matter to a close," the clients demanded the return of their documents and a waiver of their legal fees. In a response letter, the attorney "acknowledg[ed] his fault and stat[ed] that [the clients’] complaint was" correct in every aspect." He also agreed to return the documents and waive the fees.

One week before receiving the former clients’ termination letter, the firm had applied for a professional liability policy. The application inquired whether any lawyers within the firm were "aware of any circumstances, allegations . . . or contentions as to any incident which may result in a claim being made" against the firm, and required the attorneys to identify any such potential claims. The firm did not disclose any information regarding a potential claim by the couple. Approximately two weeks after receiving the letter, the insurer issued the firm a quote and advised the firm that before it would issue the policy, the firm would need to update its application and supplement signatures. The firm did so, advising that it "ha[d] no known claims and no known claims incidents" to report at that time. The insurer thereafter issued the policy. "

In re MICHAEL ROY BRESSLER, Defendant. WILLIAM FORREST and SHAWN STEIBEL, Plaintiffs, v. MICHAEL ROY BRESSLER, Defendant. STEVEN STRUM, Plaintiff, v. MICHAEL ROY BRESSLER

Here is a long SDNY Bankruptcy case discussing a series of legal malpractice proceedings, malicious behavior and non-discharageablity. 

"Strum objects to granting Bressler a discharge under section 523(a)(6) of the Bankruptcy Code. Although Forrest and Steibel also seek a denial of discharge under sections 523(a)(4) and 523(a)(6) in their adversary complaint, those plaintiffs have not pursued that avenue of the relief with the Court because of the Court’s prior rulings that their state court malpractice claim should conclude before the Court addresses their section 523 causes of action regarding any debt that may arise from that proceeding. The Court lifted the automatic stay to allow that action to proceed.

Section 523(a)(6) provides an exception to discharge for debts arising from "willful and malicious injury by the debtor to another." See Ball v. A.O. Smith Corp., 451 F.3d 66, 69 (2d Cir. 2006). Neither "willful" nor "malicious" is defined in the Code. See Strauss v. Strauss (In re Strauss), Bankr. No. 05-24910, Adv. No. 06-8229, 2006 WL 2583645 (Bankr. S.D.N.Y. 2006). [*11] The terms, however, are distinct and should not be joined together into one "’amorphous standard.’" See Yash Raj Films (USA), Inc. v. Akhtar (In re Akhtar), 368 B.R. 120, 127 (Bankr. E.D.N.Y. 2007) (quoting Barclays American/Business Credit v. Long (In re Long), 774 F.2d 875, 881 (8th Cir. 1985)). "

"In [*16] Ball, a 2006, decision, the Second Circuit applied collateral estoppel to preclude a debtor-attorney from contesting his debt that arose from a prior proceeding’s sanctions award against him as one for willful and malicious injury under section 523. There, the debtor-attorney, Ball filed suit in a Louisiana federal court on behalf of certain plaintiffs against creditor A.O. Smith Corporation ("A.O. Smith"). In that proceeding, A.O. Smith prevailed at summary judgment and won an award of sanctions against Ball for bringing the suit. The Louisiana district court ordered Ball to pay the cost of A.O. Smith’s defense, an order affirmed by the Fifth Circuit.

Ball then filed for bankruptcy protection in the bankruptcy court of the Northern District of New York. Both that bankruptcy court and the district court for the Northern District of New York held that the debt was non-dischargeable under section 523(a)(6). The Second Circuit affirmed, finding that collateral estoppel applies to the facts found by the Louisiana district court because those facts were "fully litigated" and "necessary" to that court’s decision to impose sanctions, and that those findings "satisfy the Bankruptcy Code’s malice [*17] requirement." 451 F.3d at 69-70. One of the findings was that Ball should have known his plaintiffs’ claims were "obviously barred." Id. at 70.

In In re Jones, the debtor appealed the Bankruptcy Court’s determination that the Massachusetts Commission Against Discrimination’s ("MCAD") finding of willful and malicious conduct was a sufficient basis to deny dischargeability under section 523(a)(6). The Bankruptcy Appellate Panel of the First Circuit (the "BAP") affirmed that decision, finding that "there was sufficient evidence [in the MCAD’s findings] to find that the Appellant’s actions were deliberate or intentional and that he did intend to harm or injure the Appellee." 300 B.R. at 140. The BAP found that despite the lack of a malice requirement in the state’s sexual harassment statute, the MCAD’s finding of sexual harassment "constitutes the requisite injury and is equivalent to a finding of malicious and willful injury under § 523(a)(6)." Id. at 141. "