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.’"

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

Plaintiff’s Suffolk County case dismissed on 3211(a)(5) grounds, and reversed upon adequate showing of continuous representation.

Milton B. Shapiro, etc., respondent, v Deborah Shapiro Kurtzman, appellant, et al., defendants. (Index No. 7875/01)

2007-01139, 2007-07057
SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT
2008 NY Slip Op 3194;
April 8, 2008, Decided

Borrower successfully moves to dismiss case against lender based on failure in discovery. Lender moves to vacate on the basis that its attorney retired from practice suffering from Alzheimer’s syndrome. Court vacates, but imposes a $ 10,000 sanction. Queery: how did the lender get its attorney’s medical/psychiatric records? Now did it present this info to the court? Why a big sanction?

We reported on this situation more than a year ago. Leeds Morelli & Brown apparently cut its own deal not to sue Prudential again, in exchange for a hefty legal fee paid to it.  One of its clients, Linda Guyden, is trying to set aside an arbitration award on the basis that her attorney was conflicted.  Here is the latest fromOverlawyered:

"The law firm of Leeds Morelli & Brown has recently been embroiled in controversy over episodes in which it has settled batches of employment discrimination claims while contemporaneously entering agreements in which the defendants agree to hire it (the Leeds Morelli firm) for substantial sums. Now an African-American woman who was once a vice president at Prudential Insurance and then sued the company for racial bias as a Leeds Morelli client "is asking a federal judge to set aside an arbitration award, alleging her lawyers were given improper financial inducement to keep her claim and hundreds of others out of court. According to Linda Guyden, the company paid $5 million to the law firm representing her and 358 other employees, in return for which Prudential’s total exposure was capped at $10 million and the claims were kept secret."

Bankruptcy legal malpractice is again in the news.  As the economy cycles through bankruptcy issues, attorneys advising large corporations become targets for the trustees as well as the creditors.  Latest in the news is the Catholic Medical Center and McDermott, Will & Emery.

From Law.Com: "A bankruptcy trustee for Saint Vincent’s Catholic Medical Centers of New York has sued McDermott, Will & Emery for legal malpractice, charging that partners at the Chicago-based law firm "put their personal relationships and selfish economic concerns above the interests of the charitable institution they were entrusted to protect."

The 75-page complaint, filed Monday in Manhattan Supreme Court by trustee Richard Gray, alleges McDermott Will put off a much-needed Chapter 11 filing to facilitate self-dealing by two other members of the hospital group’s restructuring team. As a result of the delay, the trustee claims, Saint Vincent’s incurred greater operating losses, paid more professional fees and took longer to emerge from bankruptcy after it finally did file.

The suit is requesting $1.2 billion in damages for legal malpractice, fraud and breach of fiduciary duty, among other claims, as well as disgorgement of $4.5 million in previously paid legal fees. In addition to the firm itself, partners William P. Smith, Stephen B. Selbst and David D. Cleary are individually named as defendants. "

This New Jersey real estate case makes little sense, unless you read it as envy transformed into litigation.  Plaintiff-seller decides to sell 6 lots for $ 2,000,000.  Everyone follows the contract of sale, which provided for interim payments, penalty payments, and no assignments.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

MARIO ARGENZIANO and MARAGEN CORPORATION, Plaintiffs-Appellants, v. THOMAS YACCARINO, ATLANTIC GROUP REALTY, BY THE SEA REAL ESTATE, LLC, WILLIAM WEBBER, ANDREW BOECKEL, LIBERTY CIRCLE LLC, TROUTMAN PORT, LLC and JOSEPH MEEHAN,

In the meantime, buyer finds customers who are willing to pay $ 2.5 million for the 6 lots, and arranges to flip them at closing.  Plaintiff is paid its contract price, and when it finds out that buyer found a way to make a profit, sues.   The court found: "With respect to defendant Meehan, plaintiffs’ claim was that the attorney breached a duty of care owed to plaintiffs by advising them to grant a six-month extension to buyers and thereby caused plaintiffs to lose an opportunity to retain the property and its appreciated value. Although plaintiffs produced an affidavit of merit, they did not provide an expert report or request an adjournment of the summary judgment motion to permit them to secure one. Thus, they did not have evidence to establish that the attorney breached a duty of care."