It appears certain that they gave bad tax shelter advice, but this plaintiff opted out of a successful class action only to see his own case dismissed,

EDWARD H. ARNOLD, Plaintiff, -against- KPMG LLP, and SIDLEY AUSTIN BROWN & WOOD LLP, Defendants.

05 Civ. 7349 (PAC)
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
2008 U.S. Dist. LEXIS 25855
March 28, 2008, Decided
March 28, 2008, Filed
Plaintiff Edward H. Arnold ("Arnold") brings this action against Defendants KPMG ("KPMG"), an accounting firm, and Sidley Austin Brown & Wood ("Brown & Wood"), a law firm, for damages allegedly suffered when he bought tax shelters from KPMG with Brown & Wood’s endorsement. The tax shelters, which were effectuated through the purchase and sale of securities, were designed to offset Arnold’s income but were determined to be unlawful tax-avoidance schemes.

The Court held oral argument on the matter on March 6, 2008. [*3] (Transcript of Oral Argument, March 6, 2008 ("Tr.").) The Court ruled that: (1) Arnold’s federal securities claims are time-barred by operation of the relevant statute of limitations (Tr. at 7-11); and (2) Arnold’s numerous state law claims merge into single claims for professional malpractice against each defendant (Tr. at 11-12). In light of these holdings, the Court heard oral argument as to: (1) whether the Court should exercise supplemental jurisdiction over the state law malpractice claims in light of the dismissal of the federal claims, and (2) whether the state law malpractice claims are time-barred under the statute of limitations. The Court now exercises its supplemental jurisdiction over the state law malpractice claims and dismisses them as time-barred.

In this case, Defendants argue that the three-year statute of limitations accrued when the opinion letters were issued. Arnold contends that because the fraudulent scheme was continuous, the claim did not accrue against either Defendant until KPMG revealed its fraudulent conduct by entering into a deferred prosecution agreement with the Department of Justice in August 2005. In the alternative, Arnold argues that the statute of limitations was tolled.

The Court rejects the argument that the appropriate date of accrual was August 2005; the claim for malpractice accrued when each Defendant issued its opinion letter.

In re D.A. ELIA CONSTRUCTION CORP., Plaintiff, v. DAMON & MOREY, LLP, Defendant.

07-CV-143A
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NEW YORK
2008 U.S. Dist. LEXIS 25496
March 31, 2008, Decided
March 31, 2008, Filed

“While the matter [the bankruptcy matter] was on appeal to the Second Circuit, Elia filed a complaint against Damon & Morey on February 14, 2007 in New York State Supreme Court asserting [*5] various state law causes of action relating to the firm’s legal representation of Elia during the Chapter 11 proceeding. Specifically, the complaint alleges breach of a legal retainer agreement (first cause of action); legal malpractice (second cause of action); conversion (third cause of action) and attorney misconduct in violation of § 487 of the New York State Judiciary Law (fourth cause of action).”

“In Grausz v. Englander, 321 F.3d 467 (4th Cir. 2003), the Fourth Circuit addressed whether a legal malpractice claim brought after the entry of a final order approving fees under 11 U.S.C. § 330 was barred by the doctrine of res judicata. The Court held that it was because the "legal malpractice claim [was] rooted in the same cause of action as the earlier claim for [attorneys’] fees." Id. at 473. Likewise, the First and Fifth Circuits have also considered this issue and held that HN9 state law malpractice claims brought after the entry of a final order approving 11 U.S.C. § 330 fees are barred by the doctrine of res judicata. See In re Iannochino, 242 F.3d 36 (1st Cir. 2001); In re Intelogic Trace, Inc., 200 F.3d 382 (5th Cir. 2000); see also In re Robotic Vision Sys., Inc., 343 B.R. 393 (D.N.H. 2005); In re Blair, 319 B.R. 420 (D. Md. 2005) In so ruling, [*13] the Circuits considered whether the plaintiff knew or should have known about the basis of its malpractice claim at the time that attorneys fees were approved and whether the bankruptcy court provided an effective forum to litigate those claims. See Grausz, 321 F.3d at 473-74; In re Intelogic Trace, 200 F.3d at 388.

As in Grausz and Intelogic, all of the misconduct alleged to have been committed by Damon & Morey was known to Elia at the time that the bankruptcy court approved the final fee application. In fact, many of the same allegations made by Elia in its state law complaint were previously made by Elia in its objections to Damon & Morey’s final fee application. Specifically, Elia argued to the bankruptcy court that the firm had labored under a conflict of interest, had committed legal malpractice and had failed to turn over money owed to the estate. The bankruptcy court provided Elia with ample opportunity raise those claims, but ultimately rejected them as meritless. Both this Court and the Second Circuit have expressly determined that the bankruptcy court gave adequate consideration to Elia’s allegations of malpractice. See In re Elia, 04-cv 975, Dkt. No. 21 (this Court’s order [*14] affirming bankruptcy court’s award of § 330 fees and finding that bankruptcy court considered but rejected the malpractice allegations); and id. at Dkt. No. 33, at 3 and 4 (Second Circuit’s Summary Order determining that the bankruptcy court gave Elia "more than ample opportunity to present its arguments" regarding its claims of "conflicted and negligent representation"). As such, it cannot be said that Elia was denied the opportunity to raise these claims in the prior action. 4”

ANDREW ORDON, Plaintiff-Appellant, -v.- KAREN L. KARPIE, and MURPHY & KARPIE, LLC Defendants-Appellees.

No. 06-3347-cv
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
2008 U.S. App. LEXIS 7626
April 10, 2008, Decided

“Ordon retained Karpie to represent him in proceedings before the Connecticut Medical Examining Board ("CMEB") after a patient reported to the Connecticut Department of Public Health ("CDPH") an adverse result in a surgery performed by plaintiff. Plaintiff alleges that Karpie advised him to settle the charges against him with the CDPH and accept a Consent Order and fine rather than proceed to a CMEB hearing, but that in doing so she negligently failed to inform him that he might be subject to disciplinary action by licensing authorities in other states pursuant to reciprocal discipline statutes. Plaintiff further alleges as consequences of the settlement that (1) his medical licenses in New York and California were subject to reciprocal disciplinary proceedings; (2) he was unable to obtain malpractice insurance and hospital accreditation for six months in California; (3) he lost income; (4) he suffered from depression; and (5) he became physically disabled as a result of stress-induced carpal tunnel syndrome.”

“Plaintiff’s action fails under a theory of legal malpractice as well. HN3 "As a general rule, for a plaintiff to prevail in a legal malpractice case in Connecticut, he must present expert testimony to establish the standard of proper professional skill or care." Davis v. Margolis 215 Conn. 408, 416, 576 A.2d 489 (1990). In order to prevail, plaintiff must prove that but for defendant’s alleged wrongful act–the recommendation that he settle with the CDPH–that he would have prevailed before the CMEB and there would not have been disciplinary action in New York and California. Plaintiff’s only disclosed legal expert admitted that she had never represented a physician in disciplinary [*5] or medical malpractice actions and had "no way of knowing" whether plaintiff would have prevailed before the CMEB.”

Insurers who pay insureds for medical costs, or for damages sometimes seek the right to share in the proceeds of the insured’s cases.  If an insured gets medical insurance coverage after an accident,] the insurance company would like to be reimbursed from the proceeds.

The right arises from the insurance contract, and sometimes by statute,  Other times, the insurance company asserts an equitable right to subrogation.  Here is a North Dakota case which illustrates the statutory variety.

IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2008 ND 78
Robert N. Haugenoe, Claimant and Appellant
v.
Workforce Safety and Insurance, Appellee
and
Earl’s Electric, Respondent

"Robert Haugenoe appeals from a district court judgment affirming an agency order granting Workforce Safety and Insurance ("WSI") a subrogation interest in a legal malpractice settlement. The legal malpractice action concerned Haugenoe’s attorney’s failure to properly prosecute a medical malpractice claim related to a physician’s aggravation of a work-related injury suffered by Haugenoe. Haugenoe asserts that N.D.C.C. § 65-01-09, the subrogation provision of the workforce safety and insurance law, does not grant WSI a subrogation interest in the legal malpractice settlement. We agree. We hold that N.D.C.C. § 65-01-09 does not grant WSI a subrogation interest in an injured worker’s legal malpractice claim against a third-party tortfeasor. We, therefore, reverse the order of WSI and the district court judgment. "

Hinshaw reports that the Minnesota Supreme Court has determined the rules for legal malpractice liability to third parties, in a business setting.  In New York, liability is generaly limited to situations in which the attorney issued an opinion letter relied upon by non-clients.  Here the rule is similar, and set forth:

"The court held that a party who is not an express client can sue a lawyer for legal malpractice in a business transaction from which the party expected to benefit only if the party was a direct and intended beneficiary of the lawyer’s services or, in other words, if the benefit to that party is a central purpose of the transaction and the lawyer is aware of the client’s intent to benefit that party. The court found no such evidence here.

The court also held that a party did not have an implied contractual attorney-client relationship with a lawyer unless the lawyer is aware of that party’s identity, the party communicates with the lawyer and the lawyer is on notice that the lawyer is expected to represent that party. The court again found no such evidence here. "

The Daily News article relates the story of a penile implant patient whose  surgery went wrong.  He then went to a long island medical malpractice attorney who did not fil the case.  Plaintiff’s attorney says that after the statute passed, the attorney wrote a letter saying: "After due reflectino, we are going to decline to accept your case into our office. "

Some combinations are simply counter-intuitive…ice cream and pickles, waffles and fried chicken, the US House of Representatives and legal malpractice.  Once explained, they are clear as a bell.  The South Carolina Appellate Blog explains how the US legislative body got involved in this legal malpractice case:

"In Spence v. Wingate, the South Carolina Court of Appeals granted a grant of partial summary judgment in a legal malpractice claim. At base, the trial court had held that the law firm did not owe a fiduciary duty to the wife concerning her late husband’s life insurance policy. The law firm represented the wife of the late Congressman Floyd W. Spence. The law firm originally undertook representation to negotiate an agreement on wife’s behalf with four sons of her husband regarding a division of the probate estate. During the course of the representation, the wife also consulted with the law firm about her husband’s federal life insurance policy and informed the law firm that Spence had named her as a beneficiary. The facts developed that shortly before his death Spence did attempt to change the beneficiary on his life insurance policy so the wife would be the sole beneficiary. Prior to this attempted change, Spence had named each of his four sons and the wife as equal beneficiaries. The United States House of Representatives determined that the proceeds should be divided equally among the wife and the four sons. "

Law Com reports that two former clients have sued Howrey LLP and its partner Michael S. Dowler over a failed deal to purchase a patent.  While normally this would not be of interest in a legal malpractice setting, the allegation is that the defendant demanded an ‘under the radar" deal for 505 of the net profits, and then "breached his fiduciary duty by `misrepresenting the value of the patent.’"