Here , in AccuWeb, Inc., Raymond Buisker, v.  Foley & Lardner, Harry C. Engstrom, Quarles & Brady LLP and Nicholas Seay, we find one of the rare state court patent legal malpractice cases.  Generally, as patent law is a federal question, one of the parties either brings the action in Federal District Court or removes it there.  Here is the decision on a motion for summary judgment:

"This case centers on whether AccuWeb, at the summary judgment stage, put forth sufficient evidence to raise a genuine issue of material fact on the question of whether the alleged failure of the Respondents to prevent the premature expiration of AccuWeb’s 5,072,414 patent (the 414 patent) was a substantial factor in causing AccuWeb actionable damages, thus preventing summary judgment. The second issue is whether AccuWeb presented sufficient evidence to allow a fair and reasonable estimate of the amount of such damages, so that there was a genuine issue of material fact, thus preventing summary judgment as to the amount of those damages. We address the second issue because it was addressed by the circuit court. This case involves the interpretation and application of Wis. Stat. § 802.08 (2003-04),[2] the Wisconsin summary judgment statute. "

The familiar triumverate of client, insurance company and independent defense attorney is a familiar model.  Certainly, there are cracks in the facade.  The attorney has dual roles, and a divided loyalty…  In Texas, a recent ruling permits the insurance company to use in-house attorneys to defend insureds. 

Law and Insurance Blog reports: "Unauthorized Practice of Law Committee v. American Home Assur. Co., #04-0138 (Tex. March 28, 2008) See Law Committee Decision.

The Texas Supreme Court ruled that, despite genuine concerns for potential conflicts of interest, insurers’ use of salaried employee-staff lawyers to defend insureds did not constitute an unauthorized practice of law by an insurance company. However, staff lawyers may be used only where the interests of the insurer and the insured are aligned in defeating the claim against the insured. Also, the insurer must fully disclose the defense attorney’s affiliation with the insurer.

Unauthorized Practice of Law Committee v. American Home Assur. Co., #04-0138 (Tex. March 28, 2008) See Law Committee Decision.

The Texas Supreme Court ruled that, despite genuine concerns for potential conflicts of interest, insurers’ use of salaried employee-staff lawyers to defend insureds did not constitute an unauthorized practice of law by an insurance company. However, staff lawyers may be used only where the interests of the insurer and the insured are aligned in defeating the claim against the insured. Also, the insurer must fully disclose the defense attorney’s affiliation with the insurer. "

Here is a subscription article from Law.com  on recoverable legal fees in NJ legal malpractice litigation:

"A six-year-long legal malpractice epic shows why the N.J. State Bar Association wants to abolish the state’s unique fee-shifting benefits. A jury found that a firm that had sued its client for an unpaid fee, and was countersued, had handled the case improperly. The judge then ordered the firm to pay $52,000 in fees, plus costs, based on case precedent that says sums spent in the successful pursuit of a negligent lawyer are recoverable. The State Bar is hoping the Legislature will step in to change the law."

We’ve been following this case.  Bank is scammed by person running a structured settlement company, and clients’ structured settlement funds are lost.  Bank sues the attorney who recommended the structure guy, and on Friday, a jury awarded the bank $ 3.7 million in damages.

Here is the story of the verdict in Magna v. Coburn.

 "The day after he won $3.7 million in a legal malpractice case, East St. Louis lawyer Rex Carr said he would ask that part of the case be retried because he believes the jury should have awarded his client more money.

Carr had asked the jury for more than $11 million for his client, Regions Bank, then named Magna Bank. The bank had sued the St. Louis law firm of Thompson Coburn, alleging that bad legal advice opened the bank to liability in the meltdown of financial scam artist James Gibson in the 1990s.

Gibson’s scheme involved the establishment of trusts for people, mostly accident victims, who had won large civil suit awards or settlements. Gibson initially invested the money with various banks, including Magna, but eventually took direct control of the money through a series complicated court cases.

Gibson then lavishly spent the money on himself and his family and squandered most of it on a failed attempt to resurrect the National supermarket chain.Advertisement
In the end, 155 investors lost some or all of their funds, more than $60 million at the time and more than $150 million in promised payments over time. Gibson was sent to prison for 40 years. "

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 . . . ." "