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. "

It may be a sign of the new economic times, or it may simply be a new trend, but legal malpractice cases are increasing in the bankruptcy setting.  NY Lawyer reports a fraudulent concealment – legal malpractice case by the trustee against an attorney and firm today.

"In In re Food Management Group (Grubin v. Rattet), 04-22880, Judge Martin Glenn ruled that allegations of fraudulent concealment, breach of fiduciary duty, negligence and fraud on the court could proceed against attorneys Robert L. Rattet and Jonathan S. Pasternak, as well as the law firm Rattet, Pasternak & Gordon Oliver.

The lawyers and the firm are accused of failing to disclose that an "insider" of debtor Food Management Group had violated a court order by submitting a bid in the auction of the company’s assets.

The trustee also alleged that the lawyers improperly failed to disclose that they had represented one of the insiders before the auction.

Judge Glenn said that if the allegations are proven, the attorneys and their firm engaged in "serious wrongdoing."

Purolite hired defendant law firm Morgan Lewis & Bockius for advice on whether they could sell products to Cuba.  The law firm gave advice, Purolite came under criminal investigation, and a law suit was born. NY Lawyer reports

"Both sides said Morgan Lewis’ original advice in 1993 was for the company to stop all sales to Cuba and a memorandum was sent to all employees to that effect. When two Purolite sales people from Canada and the United Kingdom called to say such a move would put them in violation of their respective countries’ blocking orders, Morgan Lewis advised Purolite days later to continue to sell to Cuba from foreign offices but to ensure that there was no U.S. involvement with those sales, Purolite’s attorney told the jury."

Now, it seems the central issue at the trial of this case is the statute of limitations.  When did Purolite realize it had a legal malpractice cause of action?  "After more than two weeks of testimony and years of previous litigation, the $20 million case that pits water filtration company Purolite against its former law firm, Morgan Lewis & Bockius, could come down to the first question on the verdict sheet – whether the case is barred by the statute of limitations.

Although attorneys for both sides in Bro-Tech v. Morgan Lewis spent the majority of yesterday morning’s closing statements discussing whether Purolite and its owners, Stefan and Don Brodie, should prevail in their breach of contract claim against the firm, they concluded with discussions of whether the claim was properly filed within the four-year statute of limitations. Bro-Tech is the parent company of Purolite ."

This case has gone from US District Court to the US Court of Appeals for the Second Circuit, to the NY Court of Appeals, and back to District Court.  It’s a case in which the question now is whether the retainer agreement is in effect, whether misconduct by the attorney vitiates the agreement, and to whom a big fee goes.

"This dispute between the plaintiff, Edward C. King ("King" or the "Plaintiff"), a musician, and his lawyer, defendant Lawrence A. Fox ("Fox" or the "Defendant") concerning the retainer agreement between them has occupied this Court, the magistrate judge, the Court of Appeals on two occasions, and the New York Court of Appeals over the past ten years. Presently at issue is Fox’s motion to strike King’s demand for a jury trial; initially made in August, 2003, deferred as a consequence of the grant of summary judgment for Fox in January, 2004, and renewed on October 31, 2007, after the remand from the Court of Appeals on August 11, 2006. For the reasons stated below, the motion will be denied."

22 NYCRR 1215 is a section of the law that governs attorney fees and engagement letters or retainer agreements.  Until recently, courts have had differeing interpretations of the penalty when an attorney seeks fees but has no retainer agreement or engagement letter.

The cases were decided in three different ways:  the first allowed the attorrney fees determined in quantum meruit, the second was that the attorney could keep collected fees but no future fees, and the third was to allow no fees at all.

Along came the case of Rubenstein v. Ganea held:

"We find that a strict rule prohibiting the recovery of counsel fees for an attorney’s noncompliance with 22 NYCRR 1215.1 is not appropriate and could create unfair windfalls for clients, particularly where clients know that the legal services they receive are not pro bono and where the failure to comply with the rule is not willful (see Matter of Feroleto, supra at 684). Our holding would be different were this matter a matrimonial action governed by the more stringent disciplinary requirements of 22 NYCRR 1400.3 and Code of Professional Responsibility DR 2-106 (c) (2). Here, Ganea concedes in her reply brief that "she did not think all legal services received would be free." Rubenstein’s failure to comply with 22 NYCRR 1215.1 was unintentional, no doubt attributed to the promulgation of the rule only seven weeks prior to his retention. Accordingly, the{**41 AD3d at 64} Supreme Court correctly held that Rubenstein could seek recovery of attorneys’ fees upon the theory of quantum meruit.[FN7]"

Now, the case of Mallin v. Nash in New York County adopts the Second Department’s holding:

"Public policy dictates that courts pay particular attention to fee arrangements between attorneys and their clients, as it is important that a fee contract be fair, reasonable, and fully known and understood by the client (see Jacobson v Sassower, 66 NY2d 991, 993, 499 NYS2d 381, 489 NE2d 1283 [1985]; Shaw v Manufacturers Hanover Trust Co., 68 NY2d 172, 176, 507 NYS2d 610, 499 NE2d 864 [1986]; Matter of Bizar & Martin v U.S. Ice Cream Corp., 228 AD2d 588, 644 NYS2d 753 [2d Dept 1996]). If the terms of a retainer agreement are not established, or if a client discharges an attorney without cause, the attorney may recover only in quantum meruit to the extent that the fair and reasonable value of legal services can be established (see Matter of Cohen v Grainger, Tesoriero & Bell, 81 NY2d 655, 658, 602 NYS2d 788, 622 NE2d 288 [1983]; Campagnola v Mulholland, Minion & Roe, 76 NY2d 38, 43, 556 NYS2d 239, 555 NE2d 611 [1990]; Matter of Schanzer, 7 AD2d 275, 182 NYS2d 475 [1st Dept 1959], affd 8 NY2d 972, 204 NYS2d 349, 169 NE2d 11 [1960]).

 In Mallin, the attorney was awarded no fees under quantum meruit.

Christian, son of Marlon Brando died last week, and the AP his former wife has now started a legal malpractice action concerning his will and codicils.  "But his family requested the autopsy on Monday "based on his past drug history," Los Angeles County coroner’s Lt Fred Corral said.

The autopsy, including a toxicology analysis, was scheduled for Tuesday, Mr Corral said.

Also on Monday, Christian Brando’s ex-wife Deborah sued the executors of Marlon Brando’s estate, claiming she is a victim of professional negligence, fraud and deceit.

She claimed that, as part of a February 2007 settlement with Christian Brando in a domestic violence case, she would become assignee of her ex-husband’s rights and claims in the estate.

Deborah Brando accused producer Mike Medavoy and fellow executors Larry J Dressler and Avra Douglas of executing a forged codicil to Brando’s will days before his death in July 1, 2004.