Thanks to William Voorhees, an attorney in NJ who forwarded this story about a NJ legal malpractice case.  The case is Adelman v. Shenker, Superior Court of New Jersey, Appellate Division, A-3233-04T1, Decided 12/14/07.

Defendant attorney had sleep apnea, and after extensive pre-trial activity, had to tell the judge that he just could not go ahead with the trial, for his lack of sleep. anxiety, and other symptoms.  More interesting however, was the use of a sleep apnea specialist in this legal malpractice case. 

Ultimately, the case turned around a pre-trial mediation session, its recommendation, the lack of communication by attorney to plaintiff [then the defendant] client, and its repercussions.

When is Pre-judgment Interest permissible in Legal Malpractice cases?  The Second Department recently wrote on this issue in Barnett v Schwartz ,2007 NY Slip Op 09712 ,Decided on December 11, 2007 ,Appellate Division, Second Department ,Ritter, J., J

"The plaintiffs are entitled to an award of prejudgment interest. "CPLR 5001 operates to permit an award of prejudgment interest from the date of accrual of the malpractice action in actions seeking damages for attorney malpractice" (Horstmann v Nicholas J. Grasso, P.C., 210 AD2d 671; see also Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 444 n 3; Meyer v Glynn, 278 AD2d 291; Butler v Brown, 180 AD2d 406). In relevant part, CPLR 5001(b) provides: "[I]nterest shall be computed from the earliest ascertainable date the cause of action existed, except that interest upon damages incurred thereafter shall be computed from the date incurred. Where such damages were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date." Here, the earliest ascertainable date that the plaintiffs’ legal malpractice cause of action existed is December 21, 1992, the date that the agreement was entered into (see McCoy v Feinman, 99 NY2d 295; Town of Wallkill v Rosenstein, 40 AD3d 972). Thus, interest is to be computed from the dates that the damages were incurred (i.e., the dates that the plaintiffs paid the amounts awarded as damages for rent, renovations, and legal fees) or, if impractical, from a single reasonable intermediate date. "

One unique element in legal malpractice is the "but for" requirement… that "but for" the legal malpractice there would have been a different or better result.  Defendants in legal malpractice are eager to flaunt this requirement, and argue that the legal malpractice must be the "sole" cause of the injury.

The Second Department now clarifies in Barnett v Schwartz ,2007 NY Slip Op 09712 ,Decided on December 11, 2007 ,Appellate Division, Second Department ,Ritter, J., J

"The defendants’ argument concerning causation has an impact upon the analysis of other issues raised. Thus, it will be discussed first.

The defendants argue that the Supreme Court erred when it charged the jury that the plaintiffs needed to prove only that the defendants’ negligence was a proximate cause (i.e., a "substantial" cause) of damages. Rather, they assert, the court should have charged the jury, as they requested, that the plaintiffs needed to prove that "but for" such negligence they would not have sustained damages. The defendants argue that the "less rigorous standard" of causation charged by the Supreme Court warrants reversal and a new trial. However, this argument lacks merit.

The elements to be proved in a legal malpractice action have been subjected to various formulations. Thus, while it is clear that a plaintiff-client must prove negligence (i.e., that the defendant-attorney failed to exercise that degree of care, skill, and diligence commonly possessed and exercised by members of the legal community), some cases hold that the negligence must be "the" proximate cause of damages (Britt v Legal Aid Soc., 95 NY2d 443, 446; see e.g. Kleeman v Rheingold, 81 NY2d 270; Caruso, Caruso & Branda, P.C. v Hirsch, 41 AD3d 407; Cohen v Wallace & Minchenberg, 39 AD3d 691; Cummings v Donovan, 36 AD3d 648; Kotzian v McCarthy, 36 AD3d 863), while others hold that it must be "a" proximate cause of damages (Bauza v Livington, 40 AD3d 791, 793; see e.g. Moran v McCarthy, Safrath & Carbone, P.C., 31 AD3d 725; Terio v Spodek, 25 AD3d 781; Pistilli v Gandin, 10 AD3d 353). There are also cases from this court requiring the damages to be a "direct result" of the negligence (Caruso, Caruso & Branda, P.C. v Hirsch, 41 AD3d 407, 409; Kotzian v McCarthy, 36 AD3d 863; Moran v McCarthy, Safrath & Carbone, P.C., 31 AD3d 725). In the main, the cases from the Court of Appeals, including the most recent, do not expressly require that the negligence be either "the" or "a" proximate cause of damages, but require proof that, "but for" the negligence of the defendant-attorney, the plaintiff-client would have prevailed in the underlying action (in a classic lawsuit-within-a-lawsuit scenario) or would not have incurred damages (in an action alleging negligent advice, etc.) (see e.g., Leder v Spiegel, 9 NY3d 836; Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438; AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428; Davis v Klein, 88 NY2d 1008; Carmel v Lunney, 70 NY2d 169). The defendants here, while not expressly describing the difference between proximate and "but for" causation, argue that the latter requires a greater, more direct degree of causation. However, we find no substantive import to the variations in the formulations discussed above, and hold that a plaintiff-client in a legal malpractice action need prove only that the defendant-attorney’s negligence was a proximate cause of damages.

First, the parties have not cited, and research has not revealed, any case from the Court of Appeals or any other court expressly holding that "but for" causation is synonymous with sole proximate cause, or that requires a degree of causation in legal malpractice cases 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. Similarly, the parties have not cited, and research has not revealed, any case discussing or identifying any basis for singling out attorneys for special treatment on the issue of causation. The Pattern Jury Instruction on legal malpractice, which focuses upon the lawsuit-within-a-lawsuit scenario, does not expressly use either the phrase "but for" or "proximate cause" in its formulation (NY PJI 2:152). However, the comments to the instruction, while noting the "but for" formulation, provide that a defendant-attorney’s negligence need only be [*5]"a" proximate cause of damages and refer the reader to the general Pattern Jury Instruction on proximate cause (NY PJI 2:152, p 872, 880; NY PJI 2:70). Moreover, our reading of the case law does not reveal that a heightened standard for causation is actually being applied in legal malpractice cases. Rather, all results can be explained by application of general principles of proximate cause. For example, in the lawsuit-within-a-lawsuit scenario, the plaintiff-client must prove that but for the defendant-attorney’s negligence they would have prevailed in the underlying action. Stated otherwise, if the plaintiff-client cannot prove that it would have prevailed in the underlying action, the defendant-attorney’s negligence was not a proximate cause of any damages arising from the loss of the same. Further, there are several decisions from this court requiring the plaintiff-client to prove both that the defendant-attorney’s negligence was "a" proximate cause of damages, and that "but for" such negligence it would have prevailed in the underlying action or would not have incurred damages (see e.g. Moran v McCarthy, Safrath & Carbone, P.C., 31 AD3d 725; Terio v Spodek, 25 AD3d 781). Clearly, these decisions do not provide for two different measures of causation in the same standard. Indeed, it would appear that the "but for" language, which grew out of the lawsuit-within-a-lawsuit scenario (see Carmel v Lunney, 70 NY2d 169; N. A. Kerson Co. v Shayne, Dachs, Weiss, Kolbrenner, Levy & Levine, 45 NY2d 730), is merely a recognition of the factual particularities of proving proximate cause and damages in such an action. When applied in a case involving negligent legal advice (i.e., a case where there is no underlying cause of action to lose), it would appear that the "but for" formulation is merely a recognition of the factual complexities that may attend proving proximate cause when the legal advice was merely one of a myriad of factors that contributed to the plaintiff-client’s ultimate decision or course of action (see e.g. AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428). Finally, we note, a conclusion that the "but for" formulation of causation requires proof that the negligence of the defendant-attorney was the sole proximate cause of damages is contrary to the holding of the Court of Appeals that the contributory negligence of the plaintiff-client may be pleaded as an affirmative defense (see Arnav Indus. Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300; see also Boudreau v Ivanov, 154 AD2d 638). In sum, regardless of the formulation employed, a plaintiff in a legal malpractice action need prove only that the defendant-attorney’s negligence was a proximate cause of damages.

Plaintiff  in this Long Island Legal Malpractice case was a company that wanted to create and bottle barbecue sauce. They looked for a site, and unfortunately came up with a building on a hazardous waste site.  However, only the attorneys knew of this small problem, and they did not let the clients know.

"RITTER, J.:  The issue to be decided on this appeal is whether the defendants-attorneys committed legal malpractice in their representation of the plaintiffs in the negotiation and closing of a lease and purchase option agreement concerning certain commercial property. The plaintiffs sought the property for the purpose of manufacturing barbecue sauce. Approximately two years prior to the signing of the agreement, the subject property was classified as an inactive hazardous waste disposal site. The defendants knew that there were [*2]environmental violations concerning the property that had to be dealt with and wrote to the relevant enforcement agencies asking for details. Despite the fact that those letters were never responded to, the defendants advised the plaintiffs to enter into the agreement at issue on an "as is" basis. The defendants never informed the plaintiffs of the environmental violations or the consequence of the "as is" clause of the agreement until two years later. We find the jury’s determination that the plaintiffs were entitled to such information before entering into the agreement, and that the defendants committed malpractice by failing to advise the plaintiffs about the violations and the effect of the "as is" clause, was reached on a fair interpretation of the evidence. "

Law.Com reports  on events in the California Bar discussion on requiring disclosure of legal malpractice insurance coverage.   "Attempting to mollify critics, a California Bar committee on Thursday recommended a significant change to a proposal that would require attorneys to tell clients if they don’t carry malpractice insurance.

But one member opposed to disclosure insisted that the whole idea should be canned before the State Bar rouses the anger of California’s considerable ranks of solo practitioners and small-firm lawyers.

"They know this is going to do very little but adversely affect them," State Bar Governor John Dutton said.

Meeting in Los Angeles, the Committee on Regulation, Admissions and Discipline voted 4-3 to require disclosure in writing only when it’s "reasonably foreseeable" that a lawyer will represent a client for more than four hours.

The amendment was an attempt to pacify several State Bar governors who expressed concerns in November that the original proposal could force attorneys to disclose a lack of insurance during casual talks at parties or friendly phone calls for advice.

State Bar President Jeffrey Bleich, who attended Thursday’s meeting by telephone, liked the amendment and said he hopes it appeases the critics.

"This has just been a politically thorny issue," he said, "and this compromise will hopefully satisfy everyone enough so we can move forward."

What does an Ohio legal malpractice case teach us in New York?  This case illustrates the "but for" aspect of legal malpractice.  While it is not a different burden than showing "proximate cause" in other litigation [we’ll be talking about a 2d Department case in the coming days that illustrates this principal] it is always important.

"Joanne Schneider, 66, and her husband, Alan, 64, of North Royalton, sold at least $60 million worth of promissory notes to 740 investors. They used the money to buy an apartment complex, a pair of wineries, a machine shop and more than 20 rental properties.

Fornshell liquidated about $20 million of the properties, including the couple’s failed Cornerstone development on 34 acres in Parma Heights.

The Schneiders are scheduled to stand trial May 19 in Common Pleas Court on charges of engaging in a pattern of corrupt activity, theft, money laundering and conspiracy.

Judge David Matia threw out the legal malpractice lawsuit after determining Roetzel & Andress had sufficiently warned the Schneiders of the consequences of defying the state’s orders to stop selling promissory notes.

"The Schneiders created the implosion of the Cornerstone project through their own allegedly criminal conduct," Matia wrote in his opinion. "The Schneiders . . . defied the Ohio Division of Securities’ explicit order to stop selling promissory notes . . . despite legal advice from Roetzel & Andress to the contrary."

Joanne Schneider was more aware of her dire financial situation than her lawyers, and bore more responsibility for her failure than anyone else, Matia said.

The plaintiffs argued that Roetzel & Andress could have prevented the collapse, but ignored the Schneiders’ questionable fund-raising activities in order to preserve the firm’s lucrative business arrangement. "

Here is the case , Laddcap Value Partners LP v. Lowenstein Sandler PC, 600973-2007
Decided: December 5, 2007 ,Justice Carol Robinson Edmead ,NEW YORK COUNTY
Supreme Court
Counsel for Plaintiff: Danzig Fishman & Decea
Counsel for defendant: Arkin Kaplan & Rice LLP

We reported on this abusive practices/gender sarcasm case last week. 

"I am "not aware of any rule or law which requires civility between counsel" (Thomas B. Decea, Esq.).

The genesis of this application is a claim of contumacious, abusive, and strident conduct by counsel during a deposition.

Michelle Rice, Esq. ("Rice"), moves pursuant to CPLR 3104 for a Court-appointed referee to supervise further depositions in this case and for an order directing that further depositions be held at the courthouse. Rice represents the defendant/third-party plaintiff, Lowenstein Sandler PC ("Lowenstein LP"), against claims of legal malpractice by plaintiff Laddcap Value Partners, LP ("Laddcap Partners").

On October 1, 3 and 4, 2007, Rice took the deposition of plaintiff’s representative, Robert B. Ladd (the "witness"), who, along with Laddcap Value Associates ("Laddcap Associates"), are third-party defendants in this action. The witness is the sole employee of both plaintiff Laddcap Partners and Laddcap Associates. The witness was represented by Mr. Thomas B. Decea ("Decea").

Rice’s motion is precipitated by the behavior of Decea during the three days of depositions of the witness. Rice points out that during the course of the witness’s deposition, Decea repeatedly directed the witness not to answer certain questions posed to him, which were, on many occasions, followed by inappropriate, insulting, and derogatory remarks against Rice concerning her gender, marital status, and competence. Although both counsel agreed that all objections, except those as to form, were preserved, Decea made numerous speaking objections, and threatened to leave the deposition in response to such "leading" questions. Rice also contends that Decea asked her several times, off the record, whether she was married.

In light of the above, Rice argues that Decea’s conduct was intended to intimidate her and interfere with her ability to zealously defend and conduct further depositions, in violation of New York’s Code of Professional Responsibility, EC 7-37, DR 1-102 [A][6], New York Executive Law §296((1)(d), Rules of the Chief Judge of New York §25.16, and Uniform Rules for the Conduct of Depositions. Because of Decea’s tactics and his demonstrated inability or unwillingness to comply with rules governing professional conduct, the Court should exercise its discretion under CPLR 3104(a) and appoint a special referee to ensure that the depositions are completed in a timely and cost-effective manner.

In opposition, Decea maintains that while he "aspires to be civil" to other counsel, he is "not aware of any rule or law which requires civility between counsel." According to Decea, that Rice was intimidated by him was "unfortunate" and does not substantiate any improper actions on his part. Decea complains that Rice was antagonistic toward him and the witness, was sarcastic with her questions, and harassing with her facial expressions. When Rice threatened to file a complaint against him with the Court, Decea asked to speak with her privately, whereupon both parties shook hands in agreement that if she refrained from asking leading and compound questions and badgering the witness, he would try not to interrupt her and limit his objections. According to Decea, "There was never another word about it for the rest of the week." When Rice threatened to contact the Court during the first day of depositions, Decea offered to arrange a conference call. However, Rice then declined, and continued the deposition. Now, on the eve of producing her client for a deposition, Rice "plays the gender card." Decea claims he instructed the witness not to answer approximately four times, and on each occasion, stated the basis for his objection an proffered a proper question. Decea contends that his references to "hun" and "girl" were not malicious, and if Rice would have advised him that she was offended, he would have stopped. If Rice was truly offended, she would not have completed three days of depositions. Rice’s motion is a delay tactic to permit her client to assess the plaintiff’s testimony and justify the fact that Rice is unavailable to for the deposition of her client scheduled for the following week. Decea intends to move for costs and sanctions."

This case from Washington state, Schmidt v. Coogan, illustrates two common situations in legal malpractice.  The first is on the lawyer’s side.  Client slips and falls on spilled shampoo in a store.  She goes to the attorney, who happily takes the case.  He tells the client that it’s a good case, and he will give it his all.  Client checks in and tries to make sure that everything is going well. 

On the last day of the statute of limitations she finds out that the attorney has not filed, and isn’t even in the office.  Someone else hastily drafts a complaint and files it.  Problems?  Wrong defendant, wrong facts.  Motion to amend is denied.  Case dismissed.

The second situation is proving that the client would have succeeded when the legal malpractice case is brought.  Here, attorney defendants won’t settle, case goes to trial.  Verdict for plaintiff, Motion for a directed verdict denied.  New trial on damages, as jury was "inflamed."

After all this, the intermediate appellate court reverses and directs verdict for attorney on theory that plaintiff could not prove notice of defective condition to the store.  Now, on the same facts,  Supreme Court of Washington reverses again, and enters judgment for plaintiff.