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. "

One unique aspect of Legal Malpractice is the principal that an attorney may not be held responsible for a strategic decision, even if it is a loser.  So long as it is reasonable, both subjectively and objectively, the attorney will not be held in legal malpractice.

This 2d Circuit case,Rubens v. Mason bears on this principal.  This is the third go-round for plaintiff.  Her case was dismissed by Judge Chin, and she went to the 2d Circuit, which reversed.  The case was again dismissed by Judge Chin, and again, the 2d Circuit has reversed.  At the first reversal, the court wrote that "whether Mason’s alleged failures were negligent or merely reasonable tactical decisions presented a question of fact that could not be resolved on summary judgment.”

Interestingly, the court found an allegation that defendants did not bring the correct expert to a Dalkon Shield arbitration to be the strongest theory of causation.  Beyond the implicit annoyance of the 2d Circuit at this decision, is the broader question of whether strategic or tactical decisions may be the subject of a motion to dismiss or summary judgment.

One of the more pleasant aspects of reading cases early in the morning is the occasional new word or concept that leaps from the page.  This article discusses a court official called the "Prothonotary,"  A prothonotary is an elected Clerk of the Court of Common Pleas Civil Division.

"A $3.4 million legal malpractice verdict in Luzerne County President Judge Mark A. Ciavarella Jr.’s courtroom should be overturned because the judge failed to reveal his business ties to the winning law firm in the case, according to a motion filed Tuesday in county court.  This report comes from the Citizens Voice.

At the beginning of the February jury trial, in response to questions from a defense attorney, Ciavarella denied having any relationship with attorney Robert J. Powell that would raise questions about his ability to fairly preside over the case. But, the motion argues, Ciavarella should have recused himself without being asked because of his financial interest in a land development deal tied to Powell and his partner in the Powell Law Group, county Prothonotary Jill A. Moran, which was revealed in The Citizens’ Voice last week.

“The Court’s undisclosed business relationship with plaintiffs’ counsel constituted conduct which denied defendants their due process right to a disinterested and impartial tribunal,” said the motion, filed by Philadelphia attorney Jeffrey B. McCarron.

At the beginning of the malpractice trial, without the jury present, Ciavarella reacted testily when McCarron asked him if he had any relationship with Powell that would prevent him from presiding fairly. McCarron said he had information about a possible relationship, including shared vacations, from other attorneys, whom he would not name. McCarron also made a vague reference to Powell’s investment in a private juvenile detention center in Pittston Township, which made millions from a county contract after the county’s judges closed a county-owned center in 2003.

Ciavarella denied taking vacations with Powell or having any relationship beyond normal socializing that he would have with other lawyers in the county. He criticized McCarron for failing to be specific

In an earlier motion seeking a new trial filed on May 13, McCarron alleged Ciavarella had exhibited bias during the trial by excluding defense evidence and making prejudicial statements in front of the jury. At the time the motion was filed, McCarron was unaware of the judge’s business ties to Moran and Powell, he said last week. "