Closely related to the prior article on immigration legal malpractice is this story of legal malpractice in translation.  While the attorney was held responsible only for failing to follow a specific court order, his mistake arises from failing to have a translator there.

"Bilingual attorneys are often tempted to provide foreign language translation and even courtroom translation and interpreting services for their non-English-speaking clients. But is it prudent? The following facts apply to this case example:

Prior to trial, an attorney was ordered to provide a Norwegian interpreter for any hearing at which language would be an issue. During trial, the attorney failed to provide an official Norwegian interpreter for his witness’s testimony. Instead, the attorney personally provided the interpretation of the testimony, along with all foreign language documents as the attorney himself had Norwegian language skills. However, the client later testified he felt confused about the court proceeding, a claim in which the malpractice suit was brought. "

Here from the Illinois Legal Malpractice Blog discussing an ABA Journal article about a 2d Circuit Case.  Immigration legal malpractice is a frequent subject, with inherent problems for the plaintiff.  First, the client may not be in the country, and discovery/depositions will be difficult; second, proving the value of damages can be difficult.  The mistake and the consequences are clear:

"With disturbing frequency, this Court encounters evidence of ineffective representation by attorneys retained by immigrants seeking legal status in this country. We have previously indicated that ineffective assistance of counsel can constitute an "exceptional circumstance" warranting the reopening of a deportation order entered in absentia. See Twum v. INS, 411 F.3d 54, 59 n.4 (2d Cir. 2005). We write today to establish [*2] what we would have thought self-evident: A lawyer who misadvises his client concerning the date of an immigration hearing and then fails to inform the client of the deportation order entered in absentia (or the ramifications thereof) has provided ineffective assistance. We further clarify that such misadvice may constitute ineffective assistance of counsel even where it is supplied by a paralegal providing scheduling information on behalf of a lawyer. "

2008 U.S. App. LEXIS 3492,
GARFIELD LIVERN ST. VALENTINE ARIS, Petitioner, –v.– MICHAEL B. MUKASEY, Respondent. Docket No. 07-1211-ag
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
2008 U.S. App. LEXIS 3492
December 21, 2007, Argued
February 20, 2008, Decided

Two starkly differing views come to light in this twisted matrimonial/legalmalpractice case.  It all started with a matrimonial and custody case.  From the NYLJ:

"The underlying case, a contentious divorce and custody proceeding between Ms. Callaghan and her now former-husband Gerard A. Callaghan, began in 2001. In that action, Ms. Callaghan claimed her husband sexually abused their 5-year-old daughter.

Westchester County Court Judge Fred L. Shapiro deemed Ms. Callaghan’s claims baseless, and granted her husband custody of their five children.

Ms. Callaghan then recanted in a 38-page affidavit drafted by her attorney, Allan J. Berke, which spurred Judge Shapiro to deem Ms. Callaghan an unfit parent, and cut off her visitation rights as well.

When Mr. Berke drafted a 66-page recantation of the original recantation, Ms. Callaghan refused to sign, instead hiring Mr. Curtis to file a malpractice action against Mr. Berke.   Curtis and Berke had a 28 day hearing over Berke’s fees, which Curtis won. "Mr. Berke, in turn, refused to hand over the matrimonial file, claiming he was owed $28,000 in fees. Mr. Curtis successfully battled Mr. Berke in a 28-day quantum meruit hearing, in which Mr. Montagnino threw out Mr. Berke’s claim because he had suborned perjury. Mr. Curtis billed Ms. Callaghan $373,000 for his efforts.

Ms. Callaghan refused to pay, hiring yet another attorney, David M. Bushman, to contest the fee. With Mr. Bushman, Ms. Callaghan agreed to a flat rate. "  Now, Curtis sought his own fees.  A Westchester special referee called his fee request "absurd."

The Appellate Division has ruled that Curtis is to have his own fee hearing.

What happened to the kids?

Is legal malpractice litigation simply about the $$?

No one, and by that we mean the New York Attorney Malpractice Blog is accusing anyone of malpractice regarding this story.  Sheila Birnbaum is a demi-god in litigation circles. However, e-mails can trip up anyone.  Will a similar tale end in legal malpractice?  Law blog reports:

"Yesterday, Skadden Arps products-liability superstar Sheila Birnbaum mistakenly sent to reporters an email that was intended to be directed “internally.” The email was in response to a press release issued by the office of Mississippi AG Jim Hood. Birnbaum represented State Farm Insurance in litigation against Hood, which recently settled. Here’s the AP story.

Here is a textbook example of how courts view legal malpractice cases.  Their view does not necessarily comport with the reality of litigation.  In Katz v. Herzfeld & Rubin  the court holds:

"In support of the motion to dismiss, the defendant submitted evidence establishing that the acts of malpractice alleged in the complaint, including the defendant’s refusal to pursue a highly questionable claim for exaggerated lost earnings damages based on the injured plaintiff’s life expectancy and its purported delay in retaining an economist to evaluate the lost earnings claim, did not cause any alleged reduction in the amount of the monetary settlement reached in the underlying personal injury action. The defendant demonstrated that the plaintiffs discharged it and hired new counsel five months before they settled the underlying action. Under these circumstances, the defendant established that its actions did not proximately cause the plaintiffs’ alleged damages, and that subsequent counsel had a sufficient opportunity to protect the plaintiffs’ rights by pursuing any remedies it deemed appropriate on their behalf (see Ramcharan v Pariser, 20 AD3d 556; Perks v Lauto & Garabedian, 306 AD2d 261; Albin v Pearson, 289 AD2d 272; Kozmol v Law Firm of Allen L. Rothenberg, 241 AD2d 484). Thus, the Supreme Court properly dismissed the legal malpractice cause of action.

Things to note:  "A settlement of the underlying claim does not preclude a subsequent action for legal malpractice where the settlement was effectively compelled by the mistakes of counsel (see Tortura v Sullivan Papain Block McGrath & Cannavo, P.C., 21 AD3d 1082.

The Court determined the quality  of plaintiff’s evidence on this CPLR 3211 motion, when it found that their personal injury claims were "highly questionable"  and "exaggerated."

Lastly, as anyone who has looked for a new attorney when the case is underway, trying to get an attorney to take over a case after or close to the note of issue is often impossible.  The court is very optimistic when it says that subsequent counsel had the opportunity, to protect plaintiff.

 

 

In this Case  Egnotovich v. Katten Muchin Zavis & Roseman LLP, 604101/06 , Decided January 23, 2008 ,Justice Bernard J. Fried
NEW YORK COUNTY ,Supreme Court     Plaintiffs joined a vacation club in which they each deposited $ 400,000, and the group was to purchase or lease apartments or houses in prime vacatiion spots.  These spots included Paris, Mexico, Teluride, and other hot spots.  More than $1.6 million was collected, and the Katten law firm drafted escrow agreements in which it was to hold 80% of the collections and pay them out when the club gave the law firm vouchers.  The money was collected and paid out.

For reasons unstated [bad locations? no houses actually available?] some of the members sue the law firm for fraud and escrow violations.  "Plaintiffs are former founding members of nonparty Havens, Inc. (Havens), a resort destination club in the business of acquiring vacation properties to be used by the club members. Funding for these property acquisitions was to be generated principally through the financial contributions of the founding members. To become founding members, plaintiffs were required to sign a membership agreement, and to pay $150,000 in membership dues. A portion of the membership dues was to be held as a deposit in escrow. Defendant Katten Muchin Rosenman LLP, sued here as Katten Muchin Zavis & Roseman LLP (Katten), acted as escrow agent for the escrow account. In 2006, Havens failed as a going concern, and is now apparently without funds to pay damages suffered by plaintiffs. Plaintiffs then brought this action against Katten seeking return of their deposits, and alleging wrongful release of escrowed funds and furtherance of fraud by the club’s sponsors. Katten now moves for summary judgment dismissing the amended complaint1 on the ground that it fails to state a cause of action, and is contradicted by clear and unambiguous documentary evidence.

For the reasons set forth below, Katten’s motion is granted. "

"absolutely secured were not collateral to the Membership Documents (see e.g. Martian Entertainment , LLC v. Harris, 12 Misc 3d 1190[A], * 5 [representations underlying fraudulent inducement claim must be "collateral to the contract"]). To the contrary, the degree of security backing the Deposits is expressly provided by the Certificates (see Certificate, ¶1 [the membership deposits are subject to refund 30 years from the date of the Certificate and "pursuant to and subject to the terms and conditions of the Membership Agreement and the Membership Plan]"; id., ¶2 [the refund right "is backed by and subject to the availability of the assets of (Havens)"]). Indeed, it is plaintiffs’ own position that each of the Membership Documents "discusses Deposits and their use and repayment . . . and thereby implicates use of an escrow" (Pls Facts, ¶¶2, 4, 6). An issue "central" to a contract cannot be construed as collateral to that contract (PSI Intl., Inc. v. Ottimo, 272 AD2d 279 [1st Dept 2000]).

Moreover, even fraudulent inducement requires "misrepresentations of present Facts (rather than merely of future intent)" (Martian Entertainment, LLC v. Harris, 12 Misc 3d 1190[A], * 5). Plaintiffs allege that Havens promised that "deposits would be handled in a specified way," that they "would be held in escrow . . . for the protection and benefit of the Founding Members," and that "[Founding Members] would be protected by the continuing existence of cash on deposit or real estate available to fund repayment if the venture failed" (Opp Br., at 24, 25 [emphasis added]; Egnotovich Aff., ¶6 [emphasis added]; see also Loeb Aff., ¶¶4-5). To the extent, if any, that these representations made by Havens are untrue, they are broken promises, and not fraudulent statements of fact (see e.g. Morgan, Lewis & Bockius LLP v. IBuyDigitial.com, Inc., 14 Misc 3d 1224[A], 2007 NY Slip Op 50149[U], *7 [Sup Ct, NY County 2007] [dismissing counterclaim that plaintiff "fraudulently induced (defendant) into entering the engagement letter by stating that (plaintiff) would be personally involved in handling the IPO, that the fees would be capped at $425,000, that the IPO would be consummated by March 2005 and that the legal fees charged would be limited to work on the IPO"] [emphasis added]; Ullmann v. Norma Kamali, Inc., 207 AD2d 691, 692-693 [1st Dept 1994] ["cause of action for fraud does not arise" based on "failure to perform promises of future acts"] [citation omitted]).

Consequently, the aiding and abetting fraud claim must be dismissed."

CELEBRITY CRUISES INC., and FANTASIA CRUISING INC., Plaintiffs, – against – ESSEF CORP., PAC-FAB, INC., and STRUCTURAL EUROPE N.V. (f/n/a SFC), Defendants.

96 Civ. 3135 (JCF)

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
2008 U.S. Dist. LEXIS 568
January 4, 2008, Decided

This is a cruise line injury action. “After passengers sued plaintiff cruise line for injuries from an illness suffered while on a trip, the cruise line sued defendant manufacturer, which had designed, manufactured, and distributed the water filter in the whirlpool spa where the illness originated. After two damages trials, which resulted in an award of $ 15 million lost profits award for the cruise line, the parties filed various motions regarding damages.”

“This case has been litigated in installments. Having agreed to proceed before me for all purposes pursuant to 28 U.S.C. § 636(c), the parties stipulated to determination of all liability issues–those arising out of Celebrity’s claims as well as those related to the passengers’ claims–in a single bellwether trial. That trial took place in May 2000. The jury returned a verdict in favor of the passenger plaintiffs and against both Celebrity and Essef. The jury also found in favor of Celebrity on its claims against Essef, and a damages trial based [*4] on that determination was conducted in the spring of 2006. When the jury in the 2006 damages trial returned a verdict in favor of Celebrity for approximately $ 190 million, Essef moved for judgment as a matter of law or, in the alternative, for a new trial. I granted that motion in part, awarding judgment to Essef on one category of damage claims and ordering the retrial of another. Celebrity Cruises Inc. v. Essef Corp., 478 F. Supp. 2d 440 (S.D.N.Y. 2007) ("Celebrity IV"). A second trial on damages was held in June 2007, and this time the jury found Essef liable to Celebrity for approximately $ 15 million in lost profits.

“Second, Celebrity points out that in a legal malpractice action brought by Essef against its former counsel, Squire, Sanders and Dempsey LLP, Essef has argued [*21] that it was injured by the firm’s failure to seek a jury determination of comparative fault with respect to Celebrity’s claims against Essef. This, according to Celebrity, estops Essef from contending that it did not waive the right to avail itself of principles of comparative negligence. (Celebrity Memo. at 10). But nothing prevents Essef from pleading in the alternative by, as in this instance, asserting a contingent or hypothetical claim: if Essef is found to have waived comparative negligence, only then does it have a malpractice claim arising out of that failure. See Lawser v. Poudre School District R-1, 171 F. Supp. 2d 1155, 1158 (D. Colo. 2001) (finding that HN3 contingent claim is permissible hypothetical pleading). The predicate pled for that contingent claim, however, does not operate as a binding admission. See Henry v. Daytop Village, Inc., 42 F.3d 89, 95-96 (2d Cir. 1994); Ascher v. Target Corp., No. 05-CV-4826, 522 F. Supp. 2d 452, 2007 U.S. Dist. LEXIS 84015, 2007 WL 3287441, at *5 (E.D.N.Y. Oct. 16, 2007).”

CITAK & CITAK et al., Plaintiffs, -against- THE ST. PAUL TRAVELERS COS., INC., Defendant.

07 Civ. 5459 (WHP)

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
2007 U.S. Dist. LEXIS 94040
December 26, 2007, Decided

This is a diversity jurisdiction case in which the law firm has asked for a declaratory judgment that it is covered by a subject legal malpractice insurance policy..

The Citak Firm “claims that St. Paul’s refused to provide counsel and indemnify them for a malpractice claim tiled against them on November 3, 2006 in New York State Supreme Court (New York County) by Stuart and Carina Marton (the "Marton Action"). The Martons allege that the Citaks’ legal malpractice damaged them in their pursuit of an arbitration award against a contractor. (Harwood Decl. Ex. C: Complaint, Marton v. Citak & Citak, No. 116472-06 (N.Y. Sup. Ct. Nov. 3, 2006.) The Martons seek "at least $ 60,000 in damages, with interest from November 29, 2000, together with plaintiffs’ costs and disbursements in [the] action." (Harwood Decl. Ex. C at 9.) After an arbitrator awarded the Martons $ 62,367.32 against their contractor, the Citaks moved [*3] to dismiss the Marton Action arguing that, having won the arbitration, the Martons could not demonstrate that the Citaks’ alleged malpractice had caused them any harm. On October 11, 2007, the New York State Supreme Court denied the Citaks’ motion to dismiss because (1) "but for defendants’ negligence, [the Martons] would have procured a judgment against [the contractor] while that entity had assets sufficient to satisfy the judgment;" and (2) the arbitrator denied the Martons’ request for $ 36,632.11 in pre-judgment interest, finding that the Citaks, and not the contractor, were responsible for the nearly seven year delay in bringing the arbitration. (Decision and Order, Marton v. Citak & Citak, No. 116472-06 (N.Y. Sup. Ct. Oct. 11, 2007) at 4.)”

Fred W. Nelson, etc., respondent, v Stanley Kalathara, defendant, Claude Simpson, appellant. (Index No. 3167/07)
2006-09551
SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT
2008 NY Slip Op 1313
February 13, 2008, Decided

Here, plaintiff is the guardian of an incapacitated seller of real property, and defendants were the attorneys for purchaser. Purchase funds went astray, going to incapacitated sellers former guardian [and a relative.] Seller’s Guardian unsuccessfully sued purchaser’s attorneys with whom he had no privity, and was unable to convince the court that there was fraud, or independent malicious acts necessary to bring an action against purchaser’s attorneys.

Plaintiff may not sue opponent’s attorneys, or attorneys who were not acting for plaintiff in the absence of independent fraud or malicious acts.

Tsvi Dallal, respondent, v Kantrowitz, Goldhamer & Graifman, P.C., appellant. (Index No. 99/2003)
2007-06135
SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT
2008 NY Slip Op 1295
February 13, 2008, Decided

Defendant attorney waited too long to bring a motion for summary judgment, which had to be brought within 60 days. Court cites two Court of Appeals cases on issue, Miceli and Brill.

Hinshaw reports a fairly complicated commercial liquidated damages case arising from a bank loan to individuals which led to a default, which led to a confession of judgment, which led to a settlement, with inadequate documentation of the settlement.  At least one judgment was not marked "satisfied."  After trips up and down to the Appellate Courts there, and after changes in the law of liquidated damages, it all boiled down to a question of when the bank became aware of its attorney’s mistake.

"In September 2005, Wachovia initiated a legal malpractice action in Leigh County against Ferretti, asserting claims of professional negligence and breach of contract. In February 2006, Ferretti filed an answer, asserting, inter alia, that Wachovia’s claims accrued no later than October 1994—that is, when Pisani commenced his action against Meridian—and were thus time-barred by the statute of limitations. The trial court found in favor of Ferretti and dismissed the complaint with prejudice. More specifically, the trial court found that the negligence cause of action, which carried a two-year statute of limitations, accrued in June 2003. The trial court likewise found that the breach of contract cause of action had accrued in October 1994. Thus, the statute of limitations for both claims had run prior to filing of the complaint.

Wachovia appealed, arguing that it had not in fact experienced an actual loss by that time and that a suit against Ferretti before that time would have been premature. The Pennsylvania appellate court disagreed and affirmed the dismissal. "

Clients claim that attorney forged their names on settlement documents, then stole money.  They sue attorney, get judgment, and then lost any ability to collect, when carrier successfully disclaims and wins a collection case brought by the cleints against the carrier. Wiley Rein, LLP reports:

The Supreme Court of Nebraska has held that misappropriation and dishonesty exclusions in a lawyers professional liability policy barred an attorney’s former clients from executing legal malpractice judgments against the insurer that issued the policy. Fokken v. Steichen, 2008 WL 62539 (Neb. Jan. 4, 2008).

Several of the attorney’s former clients accused him of settling their tort claims without their approval by signing their signatures on release agreements and settlement checks without their authorization. The former clients also asserted that they had not received any of the settlement proceeds from the attorney. Furthermore, the former clients alleged that the attorney (1) failed to communicate with them regarding the defendants’ settlement offers; (2) accepted the settlement offers on their behalf without obtaining their consent; (3) allowed their tort claims to be dismissed with prejudice after the statute of limitations had expired; and (4) breached fiduciary duties owed to them. The former clients won malpractice judgments against the attorney and then instituted garnishment proceedings against the attorney’s insurer, and the parties cross-moved for summary judgment.

In granting the insurer’s motion for summary judgment, the court first observed that the former clients’ garnishment claims against the policy proceeds depended on whether the insurer would have been obligated to indemnify the attorney for the malpractice judgments in the first place because "the claim of a judgment creditor garnishor against a garnishee can rise no higher than the claim of the garnishor’s judgment debtor against the garnishee." The court next considered the former clients’ argument that "where an insurance company is notified of a pending suit against an insured and has a full opportunity to defend the action, the judgment against the insured, if obtained without fraud or collusion, will be conclusive against the insurance company." The court rejected this contention, explaining that the insurer was not challenging the malpractice judgments but was instead contending that the judgments were not covered by the policy. "