This article from the Daily Report tells us more about a new trend, legal malpractice cases arising and related to bankrupcy filings:

"A federal judge has approved a settlement—apparently totaling $4.25 million—of a lawsuit against Paul, Hastings, Janofsky & Walker.

The suit had alleged that some of the firm’s Los Angeles lawyers helped Mobile Billboards of America and its affiliates sell investments in roving billboards that they should have realized were a scam. The plaintiff was a court-appointed receiver for Mobile Billboards, but U.S. District Judge Charles A. Pannell Jr.’s March 7 order approving the settlement makes clear settlement monies will go to those who purchased billboards.

The Securities and Exchange Commission has contended Mobile Billboards was a “Ponzi scheme.” The receiver’s suit against the firm alleged that billboard purchasers relied on misrepresentations in the circulars reviewed by the Paul Hastings lawyers.

In court filings, Paul Hastings maintained that its lawyers didn’t know at the time Mobile Billboards’ promotional materials may have contained false information and had warned the company that it risked SEC problems. Pannell’s order declares that the settlement agreement is not an admission of liability by Paul Hastings.

Prior to the March 7 hearing on the settlement, one investor had written a letter to the judge saying the settlement was inadequate. But Pannell’s order of the same date shows that no one appeared at the hearing to argue any objection. It also prohibits all purchasers from suing Paul Hastings over Mobile Billboards."

In this Fourth Department case  Kumar v, American Transit Co, the Appellate Division has reversed and sent a case of legal malpractice back for trial.  It is an interesting application of equitable subrogation.  Plaintiff is an auto insurer who was involved in bad faith litigation.  Briefly, driver agrees to pay his policy limits of $ 25000 to settle a case.  [More likely, demanded the insurer settle within policy limits.]

Insurer tried to settle for $ 15,000 rather than the entire $ 25,000, and the case went sour, ending in a $ 500,000 inquest determination against driver.  Of course, bad faith litigation ensued, and now, the insurer sued Hiscock & Barclay, of Albany fame.  The AD is allowing them to continue the case on the basis that they "having paid the losses" of their insured, now step into his shoes.They blame the attorneys for not settling the case for the policy limits.

Surcharged as an executor, this attorney has an ongoing legal malpractice case against several sets of his own attorneys.  In Alaimo v. Mongelli, we see several varieties of legal malpractice allegations.  One of them is in contract for failure to undertake an appeal, which was paid for, and one is for straight negligence.  The NYLJ reports:

"AN ATTORNEY can pursue his malpractice action against two law firms that allegedly failed to challenge a $630,000 judgment against the plaintiff-attorney for breaching his duty as an executor of an estate, a Nassau County judge has ruled.

A decision last month in Alaimo v. Mongelli, 10651-07, by Supreme Court Justice Joseph P. Spinola, marks the second time that the judge has refused to dismiss the case of Richard J. Alaimo, a Queens attorney who lives on Long Island.

A Queens surrogate ruled in June 2005 that Mr. Alaimo had to pay a $630,000 surcharge, plus 9 percent interest, for incorrectly distributing to the brothers of a client assets from a $1.1 million estate that should have gone to a daughter born out of wedlock. "

In the latest decision, Justice Spinola (See Profile) ruled that there was a factual dispute as to whether Michael F. Mongelli, who formerly represented Mr. Alaimo, had agreed to seek a stay of the judgment in the Appellate Division, Second Department.

This report from the Wall Street Journal Law Blog suggests that JP Morgan may have had to raise its buying price from $ 2 to $10 because of legal malpractice.  What was the legal malpractice?  A sentence inadvertently left in the agreement, which required JP Morgan to guarantee certain trades. 

Whether this is true or not, this Law blog sentence certainly sounds right: "M&A lawyering, remunerative though it may be, is a bit of a thankless job. If you do it well, and the deal goes off smoothly, perhaps you get a Lucite deal toy and a seat at the closing dinner, but no one really notices. But the moment there’s an un-dotted i or an un-crossed t, or if negotiations head south, then all eyes are on you: Must be the lawyers’ fault! "

Clients often come to speak with a legal malpractice attorney, and concentrate on the mistakes made by their attorney.  While there can be many mistakes, not all of them lead to a successful case.  Here is an example of many mistakes in a NJ case in which, at the end, there may be no provable damages. In VERDURE ASSET CORP., v. JONATHAN WHEELER, ESQ., THE LAW OFFICES OF JONATHAN WHEELER, P.C., Defendants, , the SUPERIOR COURT OF NEW JERSEY ,
APPELLATE DIVISION  worked its way through a long list of mistakes, possible kickbacks, spoliation and other problems to come to this conclusion:

"Therefore, we are convinced that there is a genuine issue of material fact as to whether Verdure suffered any monetary loss due to the damage to the truck repair shop. That issue cannot be resolved as a matter of law. We reject defendants’ contention that the order granting summary judgment should be affirmed on this alternative basis."

This legal malpractice case from New Jersey illustrates an interesting point.  DONALD ERICKSON, Plaintiff-Appellant, v. JEFFREY S. LEONARD, ESQ., and HERSH, RAMSEY AND BERMAN, P.C., Defendants-Respondents. 

 Plaintiff’s attorney seems to have narrowed the issues after remand from an appeal, and narrowed them so much, that he lost a second motion for summary judgment.  From reading the decision, it seems that if he had not been so argreeable, there might have been a different outcome.

"On June 1, 2006, the parties appeared before the trial court for a case management conference, contending that they believed the issue, of whether defendants were negligent by not asserting the corporate shield defense in the underlying action, could be resolved on cross-motions for summary judgment. In presenting the matter to the trial court, plaintiff’s counsel stated:

Essentially, the whole issue of the malpractice is whether or not the [defendants] should have made a motion for summary judgment to get [plaintiff] personally out of that case.

We say [they] should have. They say it wouldn’t have been successful.

. . . .

That’s the one question: Was [plaintiff] entitled to have gotten out of the underlying case on summary judgment or not. If he was, the defendants are guilty of malpractice. If he wasn’t, we lose. End . . . of story . . . .

In addressing how the motion would be presented, defense counsel stated:

[A]ll I got to show you is that there was enough for a judge . . . presented with that issue in [20]01 to have said, fact questions, I’m not granting the motion. So I win the motion by just demonstrating enough of a burden to show . . . that the underlying motion wouldn’t have been granted.

The trial judge replied in the affirmative.

"Here, on plaintiff’s motion for summary judgment, the trial judge would have considered the motion as if it had been brought by plaintiff in the underlying action, seeking dismissal of Visakays’ complaint, and as such, would have construed the facts, giving the Visakays, the non-moving parties, "all legitimate inferences therefrom." R. 4:46-2(c). We are satisfied that the trial judge properly denied plaintiff’s motion for summary judgment, which sought a determination that he was not liable to the Visakays in the underlying action as a matter of law because of the corporate shield doctrine. We do not determine whether plaintiff would have been successful in defending the underlying action based on the corporate shield doctrine if the matter had proceeded through trial to a final judgment, only that questions of material fact existed, prohibiting the grant of summary judgment. Having correctly denied plaintiff’s motion, the judge properly granted defendants’ cross-motion, not only because of the limited theory of negligence contained in plaintiff’s expert liability report, but because of the agreement reached between the parties at the case management conference. "That’s the one question: Was [plaintiff] entitled to have gotten out on the underlying case on summary judgment or not. If he was, the defendants are guilty of malpractice. If he wasn’t, we lose. End . . . of story . . . ." "

Plaintiff, a kid on in-line skates, runs into debris at a construction site.  He hires defendant attorneys to sue the construction defendants and the land owner for debris on a public sidewalk.  First he loses against one defendant, and then, by res judicata against the other,  Why did he lose? 

If, on the one hand it was because the debris was open and obvious, then it was not the attorney’s fault.  If, on the other hand it was because his attorneys did not do discovery, then there may be legal malpractice.  Gamer v. Ross, 2008 NY Slip Op 02107, Decided on March 11, 2008 ,
Appellate Division, Second Department , look at that question.

"Moreover, a landowner may be held liable for injuries sustained by a third party due to the defective condition of a sidewalk adjoining its property where it retains an independent contractor to perform work for its benefit, the contractor creates a special danger upon the sidewalk in the course of its work that is inherent in the work and anticipated by the landowner, and the landowner has notice of the condition (see Emmons v City of New York, 283 AD2d 244, 245; cf. Schwartz v Merola Bros. Constr. Corp., 290 NY 145, 155). Since it is well settled that, under those circumstances, "such owner will be liable for injuries resulting from its nonperformance, even though the work is done by [a] contractor" (2A NYJur2d Agency § 413), we cannot subscribe, on the facts presented, to the defendants’ view that no amount of additional discovery could have prevented the dismissal of the underlying actions against the landowner and contractor.

Equally unavailing is the defendants’ claim that the instant action is barred by principles of res judicata and collateral estoppel. Contrary to the defendants’ contention, the pretrial dismissal of the underlying actions did not constitute conclusive proof that those actions were without merit; it showed only that the plaintiffs were unable to raise triable issues of fact regarding the potential [*3]liability of the landowner and its contractor. The plaintiffs are not precluded by principles of res judicata or collateral estoppel from alleging, in the instant action, that their inability to raise triable issues of fact in the underlying actions was caused by the defendants’ failure to conduct proper discovery. "

This case Wolski v. Wandel is a well written, well thought out discussion of summary judgment motions in legal malpractice.  Although the primary subject is the use of expert testimony in opposing a motion for summary judgment, this decision sets forth many aspects of Nebraska Legal Malpractice law.