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. "

In this pro-se v. pro-sen legal malpractice case between a pro-se plaintiff from Queens and a pro-se defendant from New Jersey, we see a discussion of the correct way to challenge venue.  Kuzmin v. Nevsky, brought in New York County is moved to Queens:

"The plaintiff commenced this action in the Supreme Court, New York County, to recover damages for legal malpractice. The verified complaint alleged, however, that, at the time of the commencement of the action, the plaintiff was a resident of Queens County and the defendant was a resident of New Jersey. Consequently, venue in New York County was improper (see CPLR 503[a]). Pursuant to CPLR 510(1) and 511(a) and (b), the defendant served a timely written demand upon the plaintiff that the action be tried in Queens County. In response, the plaintiff failed to serve a timely affidavit supporting venue in New York County (see CPLR 511[b]), and her untimely affidavit in fact confirmed that venue was improper in New York County but proper in Queens County. The defendant’s subsequent timely motion to change venue to Queens County, in support of which she submitted the verified complaint, was thus properly heard, and granted, in Queens [*2]County (see CPLR 511[a], [b]; Bergman v Fiel, 12 AD3d 337, 337-338; Figueroa v Mari, 5 AD3d 629, 629-630; Hughes v Nigro, 108 AD2d 722, 723; Payne v Civil Serv. Empls. Assn., 15 AD2d 265, 268; cf. Agostino Antiques v CGU-American Employers’ Ins. Co., 6 AD3d 469, 470; Anderson v Ungar, 267 AD2d 186, 187). "

Here is a "brief chambers opinion" from Judge Newman:  Bennett, petitioner v. Mukasey, respondent ,U.S. COURT OF APPEALS, SECOND CIRCUIT.  As you may guess, it was not Mukasey whose legal work was left unfinished.  Bennett’s attorney filed a petition, and then when the legal fees went unpaid, allowed it to be dismissed.  Only a year later, when the client asked how his case was going, and the attorney got paid did the attorney ask the court to re-instate.

"Treating the motion as a one-judge procedural motion, See Fed. R. App. P. 27(c); 2d Cir. R. 27(f), I denied it on April 21, 2008, "without prejudice to a further submission, within ten days, explaining in detail the alleged ‘lack of cooperativeness’ between counsel and petitioner, including whether such lack concerned payment of, or liability for, counsel fees . . . ."

On May 7, 2008 (two days late, see Fed. R. App. P. 26), Rosenthal filed his response. He reported that in May 2006, he met with Bennett and that "[t]erms for . . . retention were discussed, and agreed upon and a modest retainer fee was paid." "Thereafter," the response continued, "as uncomfortable as it is to relate, Petitioner demonstrated a lack of cooperativeness with counsel by failing to pay as agreed upon . . . , and a letter sent to Petitioner advising him of the situation and the need to bring the outstanding balance to date went without response." "In late 2007 or early 2008," the response further continued, "Counsel received a call from Petitioner inquiring as to the status of the case, and was advised accordingly. A further promise to pay was forthcoming, but full payment on that promise was not received until March, 2008. The instant motion ensued."

By his own admission, Rosenthal evidently believes that a retainer agreement and initial payment for an appeal imposes upon counsel no obligation to pursue the appeal, that required steps may await further payment, and that a client’s appeal may be permitted to be defaulted and dismissed for lack of such further payment. The Lawyer’s Code of Professional Responsibility, as adopted by the New York State Bar Association ("NY Code"), makes clear that Rosenthal is incorrect. It provides: "Full availability of legal counsel requires both that persons be able to obtain counsel and that lawyers who undertake representation complete the work involved." NY Code, EC 2-31 (emphasis added). Moreover, "[a] lawyer shall not . . . [n]eglect a legal matter entrusted to the lawyer," id., DR 6-101(A)(3)," and "shall not intentionally . . . [f]ail to carry out a contract of employment entered into with a client for professional services [or] . . . prejudice or damage the client during the course of the professional relationship," id., DR 7-101(A)(2), (3). "

Here is an Indiana Case in which the concept of equitable subrogation is attempted in a legal malpractice case.  Here, insurer seeking equitable subrogation loses. In Queerey & Harrow LTD v. Transcontinental Ins. Co. two hurdles face the insurer:  privity and policy.  Attorney represents insured, and not carrier, much less the more distant excess carrier.  The Indiana Supreme Court holds that there is not a sufficient relationship between the attorneys and the excess carrier.

The second hurdle is policy.  Here the Supreme Court values the "obligations’ of loyalty and client confidentiality over the right of a carrier to re-coup its [unnecessary?] losses.

Attorneys for insurance carriers are rarely the subject of a legal malpractice case…it is much more often plaintiff’s attorney.  The Poppe law firm blog reports this case of a car insurance defense attorney who goes to trial on the underlying auto accident without ever meeting with the client, and to make matters worse, admits liability without the client’s consent.  While the Poppe blog does not set forth the full facts, it’s my guess that there was a verdict in excess of the policy, and that the resulting case against the attorney is for the amount above the policy along with disbursements and interest.

Here is the report:"Lawyer Osborne never contacted client Turner about the trial. In fact, he never even spoke to his client before the trial. One more thing. Lawyer Osborne stipulated (admitted) that client Tuner was negligent—even though he never spoke with his client. The jury awarded $1.7 million against the absent Turner. By the time Turner knew about the trial it was over, and he was facing a huge judgment.

In the legal negligence trial, Taylor W. Jones of Jones Jensen & Harris sued the former law firm alleging they bungled the car wreck defense and would have won the case if they had not commited legal malpractice. A jury agreed.

Georgia insurance defense law firm, Swift, Currie McGehee and Hiers defended lawyer Osborne. James T. McDonald, of the Swift law firm defended Osborne.

The jury awarded Turner $991,000 against his "lawyer."

In New York legal malpractice litigation, the defendant attorney may not ask for a set off in the amount of the hypothetical contingent fee.  That is, defendant attorney is sued for losing a personal injury action argues that the damages must be reduced by one-third, the amount plaintiff would have had to pay to an attorney, and which plaintiff will now be getting as a wind-fall.  No reduction in New York is allowed.

Here is the Poppe law firm blog report on Kentucky and Texas: "Any interesting debate is brewing in the legal malpractice arena. If an attorney takes a case on a contingent basis be entitled to reduce the client’s award for legal malpractice by the amount the attorney would have received as compensation? Sound complicated? Well, it is. Here is an example. Vicky Innocent is hurt badly in a car wreck. She hires Larry Lawyer to represent her on a 1/3 contingent basis. This means that the lawyer will take 1/3 of whatever he recovers Vicky for her injuries (for example, if he recovers $100,000 for her, then Larry’s fee would be $33,333.33). Now let’s assume that Larry Lawyer forgets to file the lawsuit within the statute of limitations and Vicky can no longer recover from the at-fault driver. So, Vicky hires a Malpractice Attorney to to sue Larry Lawyer to recover for her what she would have received from the car wreck. If a jury Vicky $100,000, does Larry Lawyer get to subtract $33,333.33 from it and just give Vicky $66,666.66? If so, then she is likely going to be hit with another whammy when Malpractice Attorney asks for his 1/3 contingent fee. Poor Vicky may only end up with $33,333.33 after the reduction. Such is the argument currently brewing over legal malpractice damages in Texas. "

Plaintiff was driving a truckfull of marijuana when he was stopped and arrested.  He says in the legal malpractice complaint that he spent less than an hour with his attorney prior to pleading guilty.  He believes that this was legal malpractice, and the criminal trial [appellate ?] court agreed with him to a certain extent.  They allowed withdrawal of the plea based upon ineffective assistance.

But is ineffective assistance of counsel legal malpractice?  The Legal Profession Blog reports:

"The Kansas Supreme Court affirmed the dismissal of a legal malpractice claim brought by a convicted defendant against his retained counsel. The client was arrested driving a truck that contained more than 3000 pounds of marijuana. He denied knowledge of the drugs but pleaded guilty on the attorney’s advice. He claimed that the attorney "spent less than 1 hour with him prior to the disposition of his criminal case." He was allowed to withdraw his plea on a finding of ineffective assistance of counsel and got diversion after serving the sentence. A disciplinary investigation "determined that none of [the lawyer’s] actions rose to the level of professional misconduct."

The absence of expert testimony was fatal to the malpractice claim:

The two issues [the client] raised involved matters outside the common knowledge of a lay person. The intricacies of the interplay between state and federal jurisdiction, the customs of a particular court, and the federal law surrounding immigration and deportation are all specialized areas of the law about which a lay juror would not know. Accordingly, we do not believe there was any way Singh could prove deviation from the standard of care without the use of expert witness testimony. The district court properly granted [the attorney’s] motion for summary judgment on that issue. "

Some law firms are sued for malpractice, and some sued twice or thrice.  Here is a story  from the Poppe Law firm blog about an Augusta law firm that has been sued so many times, its first carrier refused to renew the policy of legal malpractice insurance, and the second carrier won’t settle a current legal malpractice case.

"One of Augusta’s best known criminal defense firms has a problem. It seems they have been sued–23 times. Their insurance carrier has settled all of them– but one. The one suit they refuse to settle, or even pay for the defense, was filed by Wendell A. Jenifer.

So, not only is the Fleming firm having to pay the costs of defending themselves in the Jenifer case, they have also sued their insurance carrier, Clarendon National Insurance Co,

Jenifer sued the Fleming firm, John Fleming and his nephew William Fleming in 2006. Mr. Jenifer hired the firm and the attorneys to represent him in a personal injury case against a local hotel, and he alleges his case was thrown out because the attorneys did nothing to pursue it.

Mr. Jenifer’s malpractice case was scheduled for trial last month in U.S. District Court. It was put on hold to give the Fleming firm and the attorneys time to get a legal ruling about their insurance coverage during the time Mr. Jenifer claims he was neglected "