Indiana Legal Blog reports on the Transcontinental legal malpractice case.  We reported on it earlier, but there seems to be a new twist:

"On appeal, the Indiana Court of Appeals did not accept the excess insurer’s argument that they should be allowed to bring a legal malpractice claim against the client’s attorneys under the doctrine of equitable subrogation. The Indiana Court of Appeals found no material issue of fact in finding that limited correspondence between the excess insurer and the client’s attorneys fell significantly short of constituting an attorney/client relationship. Id. at 724. Furthermore, the Indiana Court of Appeals held that allowing the legal malpractice suit under the doctrine of equitable subrogation would essentially be the same as allowing an assignment of the cause of action from one party to another, which it will not do. Id. at 723. In support of the holding, the Indiana Court of Appeals explained it will not allow legal malpractice actions in these situations for the reason that allowing them would divide the loyalty of the attorneys. If allowed, attorneys will be tempted in not vigorously representing their clients in order to protect themselves against third parties such as the excess insurer in this case. Id.

The Indiana Supreme Court granted a petition to transfer and the Indiana Court of Appeals opinion has been vacated. "

Here is a commentary from Larry Upshaw  on the pro/con arguments for a law firm putting an arbitration clause in the retainer agreement.  From plaintiff’s prospective, it can be a costly problem.  Take a commercial legal malpractice in which there are potential $ 1 million damages.

A trial can be had for the cost of an index number.  The arbitrator’s fees can be as high as $ 50,000.

From the blog: "It’s curious that many lawyers routinely put arbitration clauses in their engagement letters with clients. Here you have quite literally the foot soldiers in the third branch of government, charged by our professional oath to be officers of the court. And yet, in contracts with clients, these attorneys opt out of the court system by obligating clients to take any dispute to arbitration.

The subtext of that conduct seems clear: these lawyers don’t trust the court system to treat them fairly and prefer the private dispute resolution process of arbitration to court. Call me crazy, but that certainly sounds out of whack. It’s kind of like a doctor saying, “If I get sick, whatever you do, do not take me to a hospital.”

While it may seem ironic that lawyers are running for protection to arbitration clauses, there is an even bigger ironic surprise waiting for these lawyers who opt out of the court system. Keep in mind that the arbitration clause in your engagement letter obligates your client to pursue his or her malpractice claim against you in arbitration instead of in court. And it therefore obligates your insurance carrier to have its liability for your malpractice determined in arbitration instead of in court. It turns out that insurance companies actually like jury trials and are not always all that fond of arbitration. Lawyers who force their clients into arbitration and then get an arbitration case for malpractice are now routinely receiving a “Reservation of Rights” letter from their insurance carrier, threatening to deny insurance coverage because the lawyer deprived the insurance company of its right to a jury trial.

Next time you are tempted to show your distrust for the court system by including an arbitration clause in your fee contracts, keep in mind that you may have just cancelled your malpractice insurance policy. "

Here is a case from Richmond County with an interesting twist.  Facts:  Mother gets into money trouble and faces foreclosure.  Daughter helps out and negotiates a mortgage to pay off the earlier debts and prevent foreclosure.  An attorney is "assigned" by the mortage company for the mother.  Later Mom comes to believe that the terms and fees of the mortgage have been misrepresented.  She stops paying and this action endues.

After being sued, she third-parties the attorney.  Now he, as a third-party defendant moves to dismiss.

"In support of his motion to dismiss the third-party complaint pursuant to CPLR 3211(a)(1), attorney Bellini maintains that the factual allegations in the third-party complaint preclude the maintenance of a cause of action against him for breach of fiduciary duty. In this regard, Bellini purports to rely upon the allegations that: (1) it was the daughter, Elizabeth Giammarino, who was acting as the third-party plaintiff’s attorney-in-fact; (2) the third-party plaintiff did not attend the closing; and (3) attorney Bellini never spoke to the third-party plaintiff prior thereto. On the basis of this "documentary evidence," Bellini contends that any cause of action against him for breach of fiduciary duty could only run in favor of Mrs. Giammarino’s daughter, Elizabeth.

CPLR 3211(a)(1) provides that a party may move for the dismissal of one or more causes of action asserted against it on the ground of a defense founded upon documentary evidence. To succeed on such a motion, however, the documentary evidence that forms the basis of the defense must be such that it resolves all of the factual issues as a matter of law, and conclusively disposes of plaintiff’s claim (see, Scadura v. Robillard, 256 AD2d 567 [2nd Dept. 1998]). Thus, a motion to dismiss the complaint pursuant to CPLR 3211(a)(1) may be granted only where the documentary evidence utterly refutes plaintiff’s factual allegations, thereby conclusively establishing a defense to the action as a matter of law (see, Ruby Falls, Inc. v. Ruby Falls Partners, LLC., 39 AD3d 619 [2nd Dept. 2007]). Here, the third-party defendant has not met this burden.

The allegation that the daughter was acting under a power of attorney as her mother’s attorney-in-fact does not conclusively establish the absence of a fiduciary duty between the third-party plaintiff and counselor Bellini. Accordingly, this fact, standing alone, will not support dismissal. "

Law.Com reports this Philadelphia case.  "In opening statements on Tuesday in Adlerstein v. Duane Morris, physicist Joseph K. Adlerstein’s attorney, Clifford E. Haines, said Duane Morris was responsible for his client only receiving $200,000 of a $1.8 million settlement with SpectruMedix, the company he founded. And that $200,000, he said, ultimately went toward rising legal bills from Duane Morris. Haines is the name partner with Clifford E. Haines & Associates. "

While the case is widely reported in Law.Com and other blogs, there are three standout items here which would have different results in NY:

1.  The defaulting payor filed a bankruptcy action;

2.  There is no discussion of "collectiblity" from the bankrupt;

3.  Plaintiff has already been found liable for attorney fees to Duane Morris.  There is no discussion of collateral estoppel based upon that finding.

Thoroughly investigate any human endeavor, and error can be found.  Legal malpractice law holds that one must demonstrate that "but for" the attorney’s error, there would have been a better or different result.  This case, Cohen v Weitzner ,2008 NY Slip Op 00618 ,Decided on January 31, 2008 .Appellate Division, First Department  illustrates the rule:

"Plaintiffs allege that the settlement required them to pay more in taxes than they had anticipated based on a spreadsheet prepared for them by defendants in which, due to a typographical error, their tax liability for the year 2000 was understated by $121,000, and that they have been damaged in that amount by defendants’ misrepresentation. However, plaintiffs’ tax liability was correctly reflected in the returns they filed before retaining defendants and entering into the settlement agreement. In any event, their tax liability was not the subject of the negotiations with the IRS. Thus, plaintiffs fail to allege how defendants’ error damaged them (see Lama Holding Co. v Smith Barney, 88 NY2d 413, 421-422 [1996]; Zarin v Reid & Priest, 184 AD2d 385, 386-387 [1992]). Further, as defendants were retained to try to obtain a reduction in the penalties assessed against plaintiffs, and they succeeded, there can be no claim
that they breached a duty to plaintiffs (see generally Dweck Law Firm v Mann, 283 AD2d 292, 293 [2001]). "

When does a municipality have knowledge of "the essential facts" upon which a claim is made, and when does a municipality have "actual knowledge"?  This seemingly small distinction has grave consequences for a plaintiff, and incidentally plaintiff’s attorney,

Matter of Felice v Eastport/South Manor Cent. School Dist. ,2008 NY Slip Op 00691 ,Decided on January 29, 2008 ,Appellate Division, Second Department .

"CRANE, J.P. An injured person who has failed to serve a timely notice of claim may, pursuant to General Municipal Law § 50-e(5), apply for permission to serve a late notice. Among the "facts and circumstances" a court must consider in determining an application for permission to serve a late notice of claim are the actual knowledge of the public corporation of the "essential facts constituting the claim" and the prejudice to the public corporation from a claimant’s failure to serve a timely notice of claim (General Municipal Law § 50-e[5]). Here, we take the opportunity to clarify the standards relevant to the courts’ exercise of discretion in deciding these applications, so the outcomes are more predictable and not merely the product of judicial whimsy. More precisely, we grapple with the distinction between, on the one hand, the knowledge obtained by a public corporation [including a school district (see General Municipal Law § 50-e[1][a]; [*2]General Construction Law §§ 66[1]-[4])] of the "essential facts constituting the claim," and, on the other, the knowledge obtained by a public corporation of facts about an accident and the resulting injury that do not amount to the essential facts constituting the claim. We also analyze the effect of this distinction in determining whether the lack of a timely notice of claim has substantially prejudiced a public corporation in its ability to defend the claim on the merits.
 

We have consistently held that a public corporation’s knowledge of the accident and the injury, without more, does not constitute "actual knowledge of the essential facts constituting the claim" (General Municipal Law § 50-e[5]; see Weber v County of Suffolk, 208 AD2d 527, 528), at least where the incident and the injury do not necessarily occur only as the result of fault for which it may be liable. In order to have actual knowledge of the essential facts constituting the claim, the public corporation must have knowledge of the facts that underlie the legal theory or theories on which liability is predicated in the notice of claim; the public corporation need not have specific notice of the theory or theories themselves.

Finally, a claimant seeking leave to serve a late notice of claim pursuant to General Municipal Law § 50-e(5) bears the burden of showing that the delay will not substantially prejudice the public corporation in maintaining its defense on the merits (see Jordan v City of New York, 41 AD3d 658; Matter of Dumancela v New York City Health & Hosps. Corp., 32 AD3d 515, 516; Breedon v Valentino, 19 AD3d 527, 528). It makes sense that the burden of establishing the lack of prejudice be placed on the claimant, who, after all, is seeking to excuse his or her failure to comply with the statute. Of course, when the public corporation has actual knowledge of the facts constituting the claim, it may be easier for a claimant to meet this burden (see Gibbs v City of New York, 22 AD3d 717, 719). Indeed, the Court of Appeals has recently observed that "proof that the defendant had actual knowledge is an important factor in determining whether the defendant is substantially prejudiced by such a delay" (Williams v Nassau County Med. Ctr., 6 NY3d at 539; see Jordan v City of New York, 41 AD3d 658; Matter of Vasquez v City of Newburgh, 35 AD3d 621, 623; Rechenberger v Nassau County Med. Ctr., 112 AD2d 150, 153). Thus, for example, in Jordan v City of New York, which concerned a car accident, the claimant, the driver, was able to establish that the City had actual knowledge of the essential facts constituting the claim because the passengers in his car had served timely notices of claim. A fortiori, the City was not prejudiced by his delay in serving a timely notice of claim (see Jordan v City of New York, 41 AD3d 658).

Here is a case from Louisiana found by the Law Profession Blog..  While it has very unfamiliar language in it, the situation is very familiar.  Doctor is sued for medical malpractice.  He does not have a consent policy.  Carrier settles without telling him some important things, such as, they waived a jury trial for him.  He sues the carrier and the attorneys for settling without telling him.  Result?  The case continues.  Dismissal in favor of the carrier reversed.

Here are some of the interesting terms:  "precription"  "permeptory exception of peremption." 

Familar issues:  discovery versus statute of limitations, waiting too long to sue.  The court says: "After careful review of the record, we find it was reasonable for Dr. Teague not to recognise what prompted the defendants to mediate and settle…."

Yesterday we reported that the Purlite legal malpractice case was going to the jury;  it appeared from reports that a question of the statute of limitations would be the most important issue.  Now, breaking news is that the trial ends with a defense verdict, but on the merits and not on the question of the statute of limitations.  From NY Lawyer:

"Morgan Lewis & Bockius yesterday defeated a $20 million breach of contract claim brought by a former client.

The 12 jurors in Brodie v. Morgan Lewis came back just before noon after three-and-one-half hours of deliberations over two days. They were unanimous in their defense verdict.

While the jury found that Bro-Tech Corp. – operating as Purolite – and its owners Don and Stefan Brodie properly brought the suit within the four-year statute of limitations, they said Morgan Lewis did not breach its contract with the Brodies by advising them to continue selling their water filtration products to companies in Cuba.

The case was held before Senior Judge Albert W. Sheppard in Philadelphia’s Commerce Court Program.

The verdict is a win for Morgan Lewis as well as its counsel, William J. O’Brien and Nancy Gellman of Conrad O’Brien Gellman & Rohn. "