Legal malpractice insurance policies require, in general, that the insured notify the carrier of all incidents and claims, on penalty of forfeiting coverage.  Here is an interesting article from Wiley Rein on this issue:

"The United States District Court for the Middle District of Florida, applying Florida law, has held that a letter that gave notice of a potential lawsuit and requested information but that did not demand money or advise the recipient to put his insurance carrier on notice did not constitute a "Claim" under a medical malpractice professional liability policy. Myers v. Interstate Fire & Cas. Co., 2008 WL 276055 (M.D. Fla. Jan. 30, 2008).

An insurer issued a claims-made malpractice policy to a physician for a policy period ending June 19, 2003. The policy defined a "Claim" as "a demand for money, or the filing of Suit naming the Named Insured and alleging a Bodily Injury or Property Damage as a result of a Medical Incident."

Counsel for a former patient sent the doctor a letter on September 6, 2002, stating that he had been retained to represent the patient in a "claim for damages" arising from the doctor’s negligence and requesting a copy of any statements made by the patient, as well as a written statement identifying the doctor’s liability carrier. The insurance broker purportedly forwarded this letter to the insurer’s managing agent on September 22, 2002, though the agent had no record of having received it. "

Pleading in legal malpractice can be tricky.  Here is a recent New York case Shefa Unlimited, Inc., et al. respondents, v Amsterdam & Lewinter, 2006-10191 SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT 2008 NY Slip Op 1937; March 4, 2008, Decided, which reports the unsuccessful attempt to add new allegations against a law firm in a "relation back" setting.

"In the proposed second amended complaint, the plaintiffs sought, in effect, to assert a new cause of action to recover damages for legal malpractice. However, that cause of action was time-barred (see CPLR 214[6]). Moreover, the original complaint did not give the appellants notice [*2]of the alleged transactions, occurrences, or series of transactions and occurrences that formed the basis for the new cause of action (see CPLR 203[f]). Under these circumstances, where the proposed pleading was not a "mere extension" of the allegations in the original complaint, and thus, did not "relate back" to that pleading, the Supreme Court improvidently exercised its discretion in permitting the amendment (Krioutchkova v Gaad Realty Corp., 28 AD3d 427, 428). Indeed, although leave to amend a pleading is to be freely granted, leave should be denied where, as here, the opponent would suffer prejudice or surprise resulting directly from the delay in seeking leave, or the proposed amendment is palpably insufficient or patently devoid of merit (see CPLR 3025[b]; Nissenbaum v Ferazzoli, 171 AD2d 654, 655; Barnes v County of Nassau, 108 AD2d 50, 52). "

Plaintiff in Gersten v. Lemke, 110651/07 ,Decided: February 14, 2008 ,Justice Marylin G. Diamond ,NEW YORK COUNTY Supreme Court  was indicted.  He was convicted.  He successfully had the indictment dismissed, after demonstrating ineffective assistance of counsel.

Start the legal malpractice case now?  Yes, but there is little use for the Fed. District Court finding of ineffective assistance.  In fact, plaintiff has three hurdles: (a) actual innocence; (b) statute of limitations and (c) showing the actual deviation.

Here, no collateral estoppel.  Defendant attorney did not have a "full and fair" opportunity to be heard, and was not at the ineffective assistance hearing.

The statute of limitations starts to run with the dismissal of the indictment, not on the date of the deviation. 

Actual innocence must be demonstrated by plaintiff.  It is still his burden.

The general rule is that one may not sue an attorney, unless that attorney was working for you.  Privity is the concept that the attorney was hired by you, and worked for you.  You may not sue the other party’s attorney, no matter how badly you were treated in court by that attorney.

As in all things, there are exceptions.  Fraud, malicious behavior, and special circumstances might allow plaintiff to sue an attorney not his own.  It did not work in this case, however. Fred W. Nelson, etc., respondent, v Stanley Kalathara, v. Claude Simpson, SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT  2008 NY Slip Op 1313;

"A predecessor guardian had sold property belonging to the incapacitated person. The lawyer represented the purchasers and the purchasers’ lender in that transaction. The successor guardian alleged that the predecessor guardian misappropriated, inter alia, funds that were received from that closing that belonged to the incapacitated person. The appellate court held that the successor guardian’s allegations against the lawyer, that by virtue of his role in the real property sale, he knew or should have known that the incapacitated person would rely on his skills as an attorney to issue checks payable to the guardian, and not to the predecessor guardian individually, did not fall within the narrow exception of fraud, collusion, malicious acts, or other special circumstances under which a cause of action alleging legal malpractice may have been asserted absent a showing of actual or near-privity. "

In this case, Tanger v Ferrer ,2008 NY Slip Op 01866 ,Decided on March 4, 2008 ,Appellate Division, First Department . the following mistakes led Supreme Court to grant summary judgment to plaintiff: "This Court found that the tenders were conditional and therefore did not act to stop the accrual of interest on the landlord’s claim (Solow Mgt. Corp. v Tanger, 1 AD3d 165, 166 [2003]). In addition, in the underlying action, defendants filed untimely post-trial briefs, which were not considered by the court, and prepared, but did not file, an appellate reply brief, contrary to their written acknowledgment to plaintiff. "  Good enough for plaintiff’s summary judgment motion?  No!

"In any event, by including a "reservation of rights" in the tender notice, defendants imposed a condition on the tender, by seeking to allow plaintiff’s defenses and counterclaims to survive, contrary to a satisfaction of the landlord’s claim in that action (see CPLR 3219). Having [*2]chosen the litigation strategy of employing a CPLR 3219 tender, defendants were obligated to execute the strategy in compliance with the statute. This does not necessarily constitute malpractice in the context of the ongoing dispute between Solow and plaintiff which involved six separate and ongoing lawsuits arising out of a rent strike. An explication of this strategy necessarily requires trial as it is a contested issue unresolved by discovery."

The case of Orchard Motorcycle Distributors v. Morrison Cohen shows just how easy it is to lose a motion for summary judgment, and not on the merits, either.

1.  Plaintiff did not submit an expert’s affidavit in opposition to an expert’s affidavit.  Fatal mistake.

2. Plaintiff did not deal with the collateral estoppel issue of Bankruptcy Court’s grant of legal fees. Fatal mistake 2.

3.  Plaintiff did not deal with the central issue of the case…how did the malpractice cause the result.

The problem of the uninsured or underinsured defendanat-attorney is illustrated in this West Virginia Case., Horkulic v. Galloway. 

Plaintiff settled th case for the full policy limit of TIG, and in a deal with the defendant attorney, took his putative bad faith claim, and agreed not to seek the attorney’s personal assets.  Along with that, it was agreed that plaintiff could seek attorney fees against TIG.  Good deal in a bad situation? 

Now it has unraveled. Jeffrey Mehalic at The West Virginia Litigation Blog  describes the situation.  TIG, naturally does not like the result.  "The Court has issued its decision in Horkulic v. Galloway, 2008 WL 481000 (W.Va. 2008), which involved a dispute between the lawyer for William Galloway, the defendant in a legal malpractice case, and TIG Insurance Company, which insured Galloway and had retained his lawyer, William Wilmoth. Galloway’s lawyer claimed that a settlement had been reached with plaintiff Jeffrey Horkulic, in which Galloway would confess judgment in the amount of $1,500,000, but that Horkulic would accept Galloway’s policy limits of $500,000 in satisfaction of his claim, would not pursue Galloway’s personal assets, and would not record the judgment.

TIG argued that the purported settlement would enable Horkulic to use Galloway’s confession of judgment in a separate bad faith action in order to establish the value of that claim, and appealed the Circuit Court of Hancock County’s order approving the settlement, including Galloway’s confession of judgment. "

What are the odds that plaintiff and plaintiff’s attorney will have a dispute?

The Magna v. Coburn case in which the bank is suing attorney Coburn over "steering" to a settlement structuring company which eventually swindled clients, took an unusual turn.  Lead attorney Rex Carr was called away from counsel table to the witness stand.

"In an odd twist Magna’s lead lawyer, Rex Carr, was called to testify as a witness for the defense.

Representing Thompson Coburn, Carrie Hogan of Jones Day in Chicago asked Carr a series of questions about his role in steering clients to James Gibson — the notorious businessman who ended up swindling structured settlements from children and widows.

According to Carr, it all started in 1985 when Gibson took up the business of structuring settlements under an agreement with a bank that Magna later acquired. "