Good cause for termination is not the same as malpractice. Attorney malpractice, the deviation from good and accepted practice, which proximately damaged the party, in which, but for the negligence of the attorney there would have been a different or better result is not the same as good cause for termination. Termination for cause has arisen in many situations in which malpractice was not even discussed, much less claimed. Substantial delays in prosecuting the case, failure timely to obtain medical records, failure to retain an employment [which] contravenes specific legal requirements is sufficient, abandonment of a case, a conflict of interest, a refusal personally to try a case, a failure to disclose a settlement offer, are all examples of misconduct which does not amount to malpractice.

The difference flows logically from the question of damages. In malpractice there is a positive claim for damages, over and above fee considerations from the attorneys; in the question of termination for cause, there can be but a reduction of the fees paid, but no positive claim for damages. As one might expect, the burden of proof for malpractice requires much more than the burden of proof to decide between "good cause" and "no cause."

Suri Katebi, Plaintiff-Appellant, v Paul Fink, et al., Defendants-Respondents.

SUPREME COURT OF NEW YORK,
APPELLATE DIVISION, FIRST DEPARTMENT

2008 NY Slip Op 4141
May 1, 2008, Decided
May 1, 2008, Entered

Clients are often asked at an allocution, settling a matrimonial action whether they are satisfied with their attorney’s work. It is highly questionable whether they, at that time, knew whether the work is satisfactory or not, but the practice goes on.

Here is a legal malpractice case, arising from a matrimonial action which, at least in part, depends on this practice.

“While "[a] claim for legal malpractice is viable, despite settlement of the underlying action, if it is alleged that settlement of the action was effectively compelled by the mistakes of counsel" (Bernstein v Oppenheim & Co., 160 AD2d 428, 430, 554 N.Y.S.2d 487 [1990]), here, the complaint is contradicted by the evidentiary material submitted on the motion to dismiss (see Guggenheimer v Ginzburg, 43 NY2d 268, 275, 372 N.E.2d 17, 401 N.Y.S.2d 182 [1977]). Plaintiff testified that she did not wish to proceed with the trial of the matrimonial action, that she decided instead to enter into the stipulation of settlement because she wanted no further connection with her husband, that she understood that by settling the action before the completion of the trial she was foregoing the right to pursue [**2] the funds allegedly dissipated by him, and that she was satisfied with the services provided by her attorney.

We have considered plaintiff’s remaining contentions and find them unavailing.

JOSEPH G. HUGAR AND LKC, LLC, PLAINTIFFS-APPELLANTS, v DAMON & MOREY LLP, CHRISTOPHER T. GREENE, ESQ., ANTHONY L. EUGENI, ESQ., AND ROBERT J. PORTIN, ESQ., DEFENDANTS-RESPONDENTS.

596 CA 07-02311

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, FOURTH DEPARTMENT

2008 NY Slip Op 4167; 2008
May 2, 2008, Decided
May 2, 2008, Entered

When are attorneys treated the same as their clients? Here is an example of attorneys getting the benefit of the client’s release.

“Memorandum: Plaintiffs commenced this action seeking damages for breach of fiduciary duty and legal malpractice arising out of defendants’ representation of plaintiffs and two other individuals and their respective limited liability companies in the formation of Aurora Healthcare LLC (Aurora). When Aurora terminated the employment of Joseph G. Hugar (plaintiff), defendants continued to represent Aurora and its remaining principals in negotiations with plaintiff to resolve his claims against Aurora and its two remaining principals and their respective limited [**2] liability companies. Plaintiff and his own limited liability company, plaintiff LKC, LLC, retained new counsel during the negotiations, and their claims were eventually resolved. Plaintiff then, on behalf of both plaintiffs, executed a settlement agreement that included a general release (Settlement Agreement). Defendants moved to dismiss the complaint pursuant to CPLR 3211 (a) (1), (5) and (7), contending that the action is barred by the covenants and general release in the Settlement Agreement. We conclude that Supreme Court properly granted the motion.

We agree with plaintiffs that the terms of the general release do not apply to defendants because they were not "Grantees and their respective successors and assigns," and those were the only parties encompassed by the general release. We conclude, however, that the complaint was properly dismissed because the action is barred by the covenant not to sue in the Settlement Agreement. Pursuant to that covenant, plaintiffs agreed not to institute any action at law or equity or to assert any claim against various entities relating to any "Company Matters." The term "various entities" includes "Company Affiliates," and the Settlement Agreement [**3] defines [*2] Company Affiliates as, inter alia, the parties to the agreement, as well as "all agents and employees thereof."

Legal malpractice has lately been examining securities transactions, bankruptcies and other phenomina of the downward trend in the economy.  Here, Law Com reports a new case against outside counsel for Brocade.

"Few plaintiffs have gone after companies’ outside lawyers in backdating lawsuits. But a new derivative case against directors and officers at Brocade Communications Systems Inc. also targets the company’s law firm, Wilson Sonsini Goodrich & Rosati. Filed April 18 in Northern District federal court by a small San Diego firm, Johnson Bottini, the suit accuses Wilson Sonsini of legal malpractice for allegedly blessing backdating at Brocade, a company that saw two of its former executives convicted of criminal charges.

In particular, the plaintiff alleges that the firm signed off on a part-time program for new Brocade hires that was really set up to grant stock options for the new employees at low points. The complaint also claims that Wilson Sonsini gave bad legal advice on a settlement proposal that didn’t give enough to Brocade in another derivative case.

Although firm Chairman Larry Sonsini has been named in backdating suits in his role as a director, as in this case with Brocade, the firm hasn’t (aside from a case brought by a pro se Rambus investor).

"The obvious reason that people don’t sue them is because they’re going to have a lot of cases with Wilson Sonsini in the future," said Francis Bottini Jr., the lead lawyer on the case. "But if there’s a valid claim, it’s our duty as lawyers to bring them for the company."

In the high-stakes Estates and Trust world of Suffolk County [think East Hampton, not Patchogue], this case was reported last week.  Plaintiff  John Randolph Hearst [of the publishing family] sued his attorney on the theory that he and his former wife "fraudulently deprived him of title and use of more than $ 20 million in real property." on a theory of undue influence. The case was decided by the Appellate Division, 2d Departmenbt.

The defendant attorney’s CPLR 3211 motion was converted to a CPLR 3212 motion.  Plaintiff demonstrated that the defendant attorney represented both husband and wife, and was therefore burdened by a conflict of interest.  The AD determined that the case must be tried.

The law firm Clifford Chance was the latest participant in a swelling bankruptcy legal malpractice series of cases.  Anthony Lin of the NYLJ writes:

"Citing ‘Stoneridge,’ Judge Releases Law Firm From Securities Suit

A federal judge in Philadelphia has dropped Clifford Chance from a securities class action, citing the U.S. Supreme Court’s recent decision in Stoneridge Investment Partners v. Scientific-Atlantic Inc. The London-based Clifford Chance firm had been facing suit by shareholders of DVI Inc., a health care finance company the law firm had represented in the months leading up to its 2003 bankruptcy filing. The shareholders had accused the firm of participating in a scheme with DVI’s executives to engage in sham transactions designed to conceal the company’s true financial health. In its January decision in the closely watched Stoneridge case, the Supreme Court rejected such "scheme liability" claims against third parties because the alleged schemes generally did not result in public statements on which investors could claim reliance. Applying this reasoning to the DVI class action, Judge Legrome Davis of the U.S. District Court for the District of Pennsylvania said: "Though Lead Plaintiffs allege that Clifford Chance knew of the scheme, and at times took a more active part in assisting DVI in the scheme, the fact remains that none of this alleged conduct was publicly disclosed such that it affected the market for DVI’s securities." Though he declined to certify a class against Clifford Chance, the judge did allow the case to proceed against other defendants, including Merrill Lynch and Deloitte. The case is one of the first to cite Stoneridge, and Clifford Chance’s lawyer, William J. Schwartz of Cooley Godward Kronish, said Judge Davis’ decision would satisfy law firms that "hoped there would be meaning in the Supreme Court’s decision." Clifford Chance continues to face a suit by DVI’s bankruptcy trustee."

Frederick Rehberger, appellant,
v
Garguilo & Orzechowski, LLP, et al., respondents. (Index No. 30120/05)

2007-05158

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT

2008 NY Slip Op 3187
April 8, 2008, Decided

“In an action to recover damages for legal malpractice, the plaintiff appeals, as limited by his brief, from so much of an order of the Supreme Court, Suffolk County (Kerins, J.), dated May 10, 2007, as granted the motion of the defendants Garguilo & Orzechowski, LLP, and Stanley E. Orzechowski to dismiss the complaint insofar as asserted against them pursuant to CPLR 3211(a)(5) as time-barred and that branch of the separate motion of the defendant Jerry Garguilo which was to dismiss the complaint insofar as asserted against him pursuant to CPLR 3211(a)(5) as time-barred.

In support of their respective motions pursuant to CPLR 3211(a)(5), each of the defendants demonstrated, prima facie, that the time in which to sue had expired and that the complaint was time-barred as against them (see McCoy v Feinman, 99 NY2d 295, 785 N.E.2d 714, 755 N.Y.S.2d 693; Sabadie v Burke, 47 AD3d 913, 849 N.Y.S.2d 440; Matter of Schwartz, 44 AD3d 779, 843 N.Y.S.2d 403; Savarese v Shatz, 273 AD2d 219, 708 N.Y.S.2d 642; CPLR 214[6]). However, in opposition, the plaintiff raised a triable issue of fact as to whether the statute of limitations was tolled by the [**3] continuous representation doctrine (see Town of Wallkill v Rosenstein, 40 AD3d 972, 837 N.Y.S.2d 212; Tropp v Lumer, 23 AD3d 550, 806 N.Y.S.2d 599; Savarese v Shatz, 273 AD2d 219, 708 N.Y.S.2d 642). Thus, the complaint should not have been dismissed as time-barred.”

William Jacobs, et al., Plaintiffs-Appellants, v Richard L. Kay, et al., Defendants-Respondents.
3460, 117332/05
SUPREME COURT OF NEW YORK, APPELLATE DIVISION, FIRST DEPARTMENT
2008 NY Slip Op 3710;
April 24, 2008, Decided
April 24, 2008, Entered

“After settling with the executrix their objections to the probate of their father’s will and trust, plaintiffs commenced this action against the attorneys for alleged fraudulent misrepresentation, fraudulent concealment, legal malpractice, breach of contract and for treble damages, in the preparation of those instruments. Not only does HN1 New York not recognize a right of action for tortious interference with prospective inheritance (see Vogt v Witmeyer, 87 NY2d 998, 665 N.E.2d 189, 642 N.Y.S.2d 619 [1996]), but having earlier settled their objections, plaintiffs may not now seek, in effect, to challenge indirectly the validity of the will and trust by suing these defendants with whom they had absolutely no privity.

Absent a contractual relationship between the professional and the party claiming injury, the potential for liability "is carefully circumscribed" (William Iselin & Co. v Mann Judd Landau, 71 NY2d 420, 425, 522 N.E.2d 21, 527 N.Y.S.2d 176 [1988]). [**2] A viable tort claim against a professional requires that the underlying relationship between the parties be one of contract or the bond between them so close as to be the functional equivalent of contractual privity (Ossining Union Free School Dist. v Anderson LaRocca Anderson, 73 NY2d 417, 539 N.E.2d 91, 541 N.Y.S.2d 335 [1989]). However, plaintiffs have not pleaded any facts setting forth the existence of a contractual relationship or the functional equivalent thereof between themselves and defendants. Moreover, they have no viable cause of action for treble [*2] damages under Judiciary Law § 487, since defendants’ purported deceit did not occur during the course of a pending judicial proceeding (see Costalas v Amalfitano, 305 AD2d 202, 203-204, 760 N.Y.S.2d 422 [2003].”

John Randolph Hearst, Jr., appellant, v Barbara Hearst, et al., respondents. (Index No. 06-01959)
SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT
2008 NY Slip Op 3590; 2008 N.Y. App. Div. LEXIS 3495
April 22, 2008, Decided

“The Supreme Court also improperly dismissed the cause of action alleging legal malpractice insofar as asserted against the Ackerman defendants. A prima facie case of legal malpractice requires proof that the attorney failed to exercise the ordinary and reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the attorney’s breach of that duty proximately caused the plaintiff to sustain actual and ascertainable [**10] damages (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442, 867 N.E.2d 385, 835 N.Y.S.2d 534; Bauza v Livington, 40 AD3d 791, 792-793, 836 N.Y.S.2d 645; Magnacoustics, Inc. v Ostrolenk, Faber, Gerb & Soffen, 303 AD2d 561, 562, 755 N.Y.S.2d 726). Here, the plaintiff alleges that Ackerman represented both Barbara and himself, and was thereby burdened by a conflict of interest, that Ackerman aided Barbara’s misappropriation of his assets, and concealed these activities from him. Consequently, there are triable issues of fact with respect to the cause of action alleging legal malpractice (see Tabner v Drake, 9 AD3d 606, 610, 780 N.Y.S.2d 85), as well as the cause of action alleging the aiding and abetting of fraud, insofar as asserted against the Ackerman defendants.”

We can’t read the case, and a subscription to the Minnesota lawyer site is required, but third-hand, here is an interesting take on a legal malpractice case from the Minnesota Lawyer Blog.

"Minnesota Lawyer has an interesting story this week about a local attorney who found himself being sued for malpractice in Kentucky by a woman who claimed that she was his client.  The woman was mulling filing a medical-malpractice suit against the decedent’s health-care providers, and for reasons that are unclear contacted the Minnesota attorney. She filed out his retainer agreement and returned it, but the two had no further contact. The attorney officially declined the case in a letter sent several months later, shortly after the expiration of the applicable Kentucky statute of limitations on the estate’s med-mal claim.

Minnesota Lawyer Blog’s take on the case is puzzlement.  "In the meantime, you may want to be careful about whom you give a copy of your retainer agreement to … "

A different take?  Attorney is retained to handle a medical malpractice case, and a written retainer is signed by the client.  Attorney holds onto the case until the statue of limitations has passed and then tells the client that he is not interested in the case.  Attorney may not have know of Kentucky’s statute of limitations, but he has allowed the statute to pass.

 

 

 

 

It is rare to depose opposing counsel.  Here is an interesting case in which the question to be determined is whether plaintiff knew his union would not participate in a discrimination case, and if so, whether the statute of limitations had passed.

From Wilmer Cutler Pickering Hale and Dorr LLP :

"The Southern District of California ordered the deposition of Plaintiff’s attorney after finding that he had information crucial to Defendant’s statute of limitations defense, and that the information could not be otherwise obtained. Pastrana v. Local 9509 Commc’ns Workers of Am., No. 06cv1779 W (AJB), 2007 U.S. Dist. LEXIS 73219 (S.D. Cal. Sept. 28, 2007).

Plaintiff brought suit against Local 9509 after he was fired from his job with AT&T, and the union declined to appeal his grievance to arbitration. Id. at *3. Local 9509 raised the six-month statute of limitations as a defense to Plaintiff’s claim that it had breached its duty of fair representation. Thus the date by which the union notified Plaintiff and his attorney that it would not appeal was significant. Id. at *3-4.

If Plaintiff had been given notice by the union prior to February 28, 2006, his claim, brought on September 1, would be untimely. Id. at *4. Defendant claimed that a union employee had informed Plaintiff and his attorney via several teleconferences in February 2006 that it would not pursue his grievance to arbitration; Plaintiff disputed this account and offered a Declaration of his counsel that these teleconferences had not occurred until March 2006. Id. at *4. Defendant filed a motion to compel the deposition of Plaintiff’s counsel on the grounds that he was the only person besides Plaintiff and a union employee to participate in those conversations. Id. at *4-5. Defendant also moved to compel the production of any notes Plaintiff’s attorney took during those conversations. Plaintiff opposed the motion and moved for a protective order on the grounds that the testimony and documents sought were protected by the attorney-client privilege and work product doctrine. Id."