This is a seminal, important case which will, we predict, be widely cited and discussed in Legal Malpractice.   Barnett v. Schwartz, 2007 NY Slip Op. 09712, 2d Dept, December 11, 2007 is important for several reasons. We’ll discuss the first here

“But for” causation is not as difficult as had previously been believed.

Does the failure to exercise” that degree of care, skill and diligence commonly possessed and exercised by members of the legal community.” have to be “the” proximate cause of damages? Must it be “a” proximate cause of damages?

The Appellate Division says that it must be nether “the” or “a” proximate cause of action, but simply requires proof that “but for” the negligence of the defendant-attorney, the plaintiff-client would have prevailed in the underlying action.”

This formulation does not require a greater, more direct degree of causation, and the Appellate Division did not find a “substantive import to the variations in the formulations discussed above, holding that a plaintiff-client in a legal malpractice action need prove only that the defendant-attorney’s negligence was a proximate cause of damages.”

“But for” causation is not synonymous with sole proximate cause, and it is not required that the degree of causation in legal malpractice be any greater than “proximate cause. i.e., greater than that which must be typically proved as against any other professional or lay defendant in a negligence action. There is no case which singles out attorneys for “special treatment on causation.”

Here is an article from Hinshaw which tells us that  "A law firm may represent itself and may pursue not only contract or quasi-contract but also tort theories in suing a former client, at least as long as the amount sought in damages does not exceed the amount of unpaid legal fees"

"Law firm Pedersen and Houpt provided a variety of legal services to Summit Real Estate Group, LLC (Summit) including successfully litigating a breach of contract claim. Soon thereafter Summit’s assets were transferred to another entity, Main Street West, and Summit was dissolved. The two members of Summit were 50 percent owners of Main Street West. Id. Pedersen and Houpt brought suit to recover attorney’s fees naming five closely related defendants including Summit and Main Street West.

Pedersen and Houpt sued on multiple causes of action including breach of contract, quantum meruit and account stated. However, given Summit’s insolvency, Pedersen and Houpt’s best chance at recovery was through more far-reaching legal theories such as piercing the corporate veil and unjust enrichment. Defendants argued that these more far reaching legal theories were “an attempt to create new liabilities beyond the scope of [Pedersen and Houpt’s] contractual relationship with its clients.” Id at 8. Defendants consequently asserted that any use of confidential information to pursue these “new liabilities” was beyond the scope of Illinois RPC 1.6(c), which provides: “[a] lawyer may use or reveal * * * (3) confidences or secrets necessary to establish or collect the lawyer’s fee.” Id.

The trial court agreed with the defendants’ argument and granted a motion to compel Pedersen and Houpt to seek outside counsel. Reviewing this decision on an abuse of discretion standard, the court of appeals reversed, noting that the plaintiff’s legal theories were within the scope of RPC 1.6(c)(3) and that requiring Pedersen and Houpt to seek outside counsel did not resolve or even address the issue of the scope of RPC 1.6(c)(3).

The appellate court’s reasoning was based on the premise that limiting the legal theories available under RPC 1.6(c)(3) would reward fraudulent behavior by clients and would not serve any reasonable client expectation or legitimate purpose. The appellate court also noted that the damages sought by Pedersen and Houpt were limited under all theories to the amount of legal fees owed. Consequently, Pedersen and Houpt was not attempting to profit improperly from its former attorney-client relationships "

This story from LA is about a failed City of LA law suit over an underground gas main construction project.  The action was filed late, and dismissed.  Now the city attorney is a defendant.

"A jury will decide if the former attorney for the city of Vernon committed legal malpractice and if he should pay more than $1 million in damages.

The city sued Eduardo Olivo in April 2005, alleging that he mishandled various litigation involving the city. One allegation stems from Olivo’s decisions involving work done by contractor Kenko in the installation of an underground gas main.

The city alleged the work was defective and that Olivo did not act quickly enough to sue Kenko. When the city did eventually file a complaint against the firm, it was dropped because it was lodged after the statute of limitations had expired. "

In this New Hampshjre newspaper report, a city attorney is now a defendant in legal malpractice.

"CLAREMONT – The City of Claremont has filed a lawsuit alleging malpractice and negligence on the part of then-city solicitor John J. Yazinski for his role in the dismissal of former city tax assessor Steve Snelling in September 2000. The suit was filed in Sullivan County Superior Court late last week.  It alleges Yazinski, now a Claremont District Court judge, acted in "derogation of his duty and in violation of the applicable standard of care," and that he "failed to reasonably advise the city in this regard."

"Shortly after his firing, Snelling asked for a hearing before the Claremont Personnel Advisory Board, during which Yazinski and his partner Daniel G. Smith of Hughes, Smith, and Yazinski, LLP of Claremont were present in an advisory role to the city. The city said that although Snelling informed the board that night he intended to file suit, "the law firm failed to notify the city that Snelling had given notice of his intention to sue and failed to give notice of the threat of suit to the insurance carrier providing coverage to the city at the time or to recommend to the city that such a notice be given."

As a result, "the insurance carrier to which the city had paid insurance premiums at all times material would not provide coverage to the city for the Snelling suit because no notice had been provided of Snelling’s intention to sue during the applicable policy period."

Snelling filed suit against the city in 2003, claiming his termination was a violation of his First Amendment free speech rights. Snelling won his case, which was upheld by the state Supreme Court following appeal. A second trial to examine damages is set to begin in March.

Specifically, the suit alleges "legal malpractice" against Yazinski, and the same allegation against the firm. In the suit against Yazinski, the city said that "had Yazinski provided the advice required by the standard of care under these circumstances, Snelling would not have been terminated. "

While, generally, patent law depends on Federal Law, and provides federal question jurisdiction in Federal District Court for patent legal malpractice cases, here is an interesting state court appellate decision from Colorado.  Bristol v. Osman, Court of Appeals, Colorado.  It involves patent laches, and the statute of limiations in legal malpractice.  It also involves 6 amended complaints, the last four of which were submitted in contravention of the rules, and without any motion seeking leave.

 

Small towns have communities that notice small events.  Here is an example:  a lawfirm throws out old files, and they mistakenly sit on the curb, awaiting the garbage truck.  The local news station finds out, and puts this story on their website.

"A call to the Channel 2 News Tipline asked why open boxes with files were out on the curb in front of a law firm in Orchard Park. Channel 2 News then found some of those same open boxes.

The boxes were on the curb of South Buffalo Street in front of the Berkowitz and Pace Law Firm. One of the open boxes had a visible file labeled "Medical Malpractice" with a name and phone number visible.

Attorney Leonard Berkowitz told us they were remodeling their office and that’s why the boxes were thrown out that way. Berkowitz was asked if he felt there could be confidential records or information in the boxes. "These are old boxes. We thought they were going to be picked up immediately. They probably should have been shredded. We’re gonna take ’em back in now based upon what you said. It was a mistake and they should have been shredded."

Law.Com reports on this Venable Legal malpractice case:

"In 2004, Venable partner Stefan Tucker’s former client Alan Weinberger sued him for malpractice. The claim stemmed from a prior suit between Weinberger and another of Tucker’s ex-clients, Lev Volftsun. After years of this messy legal spat, the 4th U.S. Circuit Court of Appeals affirmed that Weinberger had no case late last month. But it seems Tucker hasn’t shaken his ex-client just yet: Weinberger has confirmed plans to file a motion this week for a new hearing before the entire court.

Tucker first introduced his two clients in 2000. Weinberger needed investors for his company TechNet, so Tucker helped Volftsun negotiate an agreement to loan TechNet $250,000 and to become a company board member. In 2001, Weinberger created a holding company into which he merged TechNet and another company, ASCII. Volftsun sought repayment of the loan. The company did not repay him, and Volftsun consequently sued in the U.S. District Court for the Eastern District of Virginia.

Weinberger appealed in September, only to have the lower court’s decision affirmed by a three-judge panel on Dec. 20, but that decision clearly has not discouraged him. "

McNight v. Public Defender is  recently decided New Jersey Legal Malpractice Case.   We started a discussion yesterday.

Today, let’s look at the court’s description of the three approaches to criminal defense legal malpractice cases.

1.  Need for Actual Innocence:  NY is among these jurisdictions.  One must demonstrate a reversal, or an exoneration, which starts the statute of limitations running.

2.  No Need for Actual Innocence:  Plaintiff”s s/l starts running on the date of the malpractice.

3. A two tiered approach.  The NJ solution is that a post-conviction process in criminal court must be started, and the legal malpractice must be simultaneously started, but the legal malpractice case should be stayed.

The 55 page decision is well worth reading for the many nuances set forth.

 

NY Lawyer [and Law.Com] report that a Texas business owner has sued Weil Gotshal & Manges over its handling of a Texas credit union acquisition.

"Dallas businessman has sued Weil, Gotshal & Manges, alleging that the firm and two of its partners took advantage of him as a client by lessening his interest in a deal while he was undergoing treatment for cancer.

In David M. Radman, et al. v. Richard M. Boyd, et al., Radman — individually and as trustee of the DMR Trust — and CU Commercial Services LLC allege that the firm and two of its Dallas partners, Michael A. Saslaw and Robert C. Feldman, conspired with Radman’s then-business partner and others to reduce Radman’s interest in a proposed acquisition of a Dallas-based credit union subsidiary.

In his Dec. 12 petition filed in the 160th District Court in Dallas, Radman also names as defendants his business partner, Richard M. Boyd; Dallas-based Texans Credit Union; TCU’s president and CEO, David Addison; Texans Commercial Capital LLC; and Credit Union Liquidity Services LLC.

Radman’s petition also alleges the following against Weil, Saslaw and Feldman: breach of contract, breach of fiduciary duty, fraud, negligent misrepresentation, professional malpractice, violation of the Texas Deceptive Trade Practices Act, conversion, tortious interference with existing and prospective contracts and civil conspiracy to commit harm. "

Legal malpractice cases against the criminal defense attorney are confusing.  In addition to all the other elements, in NY one must prove actual innocence or exoneration.  When the statute begins to run [date of malpractice, date of last representation, date of final judgment, date that post-conviction motion decided, reversal or exoneration] is a difficult call. 

McNight  v. Office of Public Defender.  This NJ case is remarkable for several reasons.  The first is a discussion of how an attorney, "on a busy Wednesday plea day" simply forgot to ask his client whether he was a US citizen and how a misdemeanor conviction would impact him.  Here, it led to a deportation order, and when Trinidad would not take him back, imprisonment without end.

The second reason is the legal aid attorney’s willingness to admit his wrong.  Sometimes, it seems that criminal defense attorneys are much more willing than other attorneys to admit they made a mistake, if it helps the client get a new trial or get his plea back.

For us, the most important reason is the compelling discussion of the state’s different positions on how to handle a criminal defense legal malpractice case.  More tomorrow.