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.

Here is a well-written decision by NY Supreme Court Justice Stallman on a very complicated question of attorney-client privilege, confidentiality, issues of whether there was an attorney-client relationship, and how to resolve the competing rights of discovery, business secrets and confidentiality. 

Hélie v McDermott, Will & Emery ,2007 NY Slip Op 27523 ,Decided on December 17, 2007 ,Supreme Court, New York County ,Stallman, J.

"In this legal malpractice action, plaintiff Marc Helie claims that defendant John J. Sullivan, a partner in the law firm of defendant McDermott, Will & Emery, failed to disclose an alleged conflict of interest while Sullivan was allegedly representing plaintiff and acting as outside corporate counsel to Gramercy Advisors, LLC and related entities. Plaintiff alleges that, in June 1998, Sullivan represented him in connection with the formation of Gramercy Advisors, LLC and related entities. In January 2000, non-party Jay Johnston purchased a 30.43% interest in the business, which resulted in amendments to Gramercy’s original operating agreement. Plaintiff alleges that, during the drafting of those amendments, Sullivan allegedly advised plaintiff that, in the event of plaintiff’s resignation, his resignation would not be considered "an event of dissociation" under the operating agreement, which would trigger a payment based on a specified formula. Plaintiff alleges that Sullivan advised plaintiff that his interest in Gramercy upon resignation would reflect current market value. Plaintiff claims that, on the basis of that advice, Helie executed the revised operating agreement. Plaintiff claims that, during the drafting process and in rendering the alleged advice, Sullivan was acting as plaintiff’s attorney. "

Read the balance of the decision for Justice Stallman’s discussion of the competing rights of the litigants.

In this NY Lawyer’s blurb, we see th outcome of a new variety of legal malpractice action:  a sort of secondary liability suit in a transactional setting.

"A New York appeals court has thrown out a lawsuit against Seward & Kissel over the law firm’s representation of failed hedge fund Wood River Partners.

A group of institutional investors had charged that the law firm shared blame for an alleged fraudulent scheme in which investors were misled about the fund’s holdings, 60 percent of which turned out to be in one small technology company named EndWave Corp. That company’s stock collapsed in July 2005, triggering the investors’ claimed $200 million in losses.

But the Appellate Division, First Department, ruled yesterday in Eurycleia Partners v. Seward & Kissel, 600704/06, that the law firm’s preparation of Wood River’s offering memo did not constitute a representation, fraudulent or otherwise, to the investors.

The court noted that Seward & Kissel’s work for the fund was focused on the fund’s formation and its taxes and not its investment strategy. The appellate panel also found that the investors had no relationship with Seward & Kissel as Wood River’s counsel that would impose a duty on the firm to investors.

The court dismissed claims against Wood River’s auditor, American Express Business & Tax Services, on similar grounds. "

The simple answer to this question is, Yes!

Delaware is the state of choice for many corporations, and it is said that there are more attorneys in Manhattan giving advice on Delaware corporate law than there are in Delaware.  Now Sheri Qualters of the NYLJ reports that the Delaware  Court of Chancery has ruled that non-Delaware attorneys are subject to suit there.

"A recent Delaware Court of Chancery ruling that non-Delaware attorneys and law firms can be sued in the state for their advice to Delaware-incorporated companies has raised concerns about courts’ jurisdictional reach and about a lawyer’s duty to challenge a client’s business decisions.

The case is of concern to law firms, investment banks and others who advise companies on Delaware issues, said Barry Sher, the chairman of the litigation practice in the New York office of Paul, Hastings, Janofsky & Walker.

"With relatively minimal actual contact with the state of Delaware in the normal jurisdictional sense, they could nonetheless be brought into court," Mr. Sher said.

Since many U.S. companies are chartered in Delaware and subject to Delaware corporation law, Delaware Court of Chancery decisions have had a major impact on corporate law.

The recent case involves allegations that Baker Hostetler and a Columbus, Ohio-based corporate partner, Joseph Boeckman, aided and abetted the breach of fiduciary duty committed by three managers of Lima, Ohio-based bronze ball bearings maker Randall Bearings Inc. Sample v. Morgan, No. 1214-VCS (New Castle Co., Del., Ch.).

According to court papers, the managers and their lawyer allegedly orchestrated a scheme to entrench and enrich themselves by buying a large block of voting stock from the company at an unfairly low price. "

LEGAL MALPRACTICE CASES IN
FEDERAL COURT THIS MONTH

1. WESTPORT INSURANCE CORP. v. GOLDBERGER & DUBLIN, P.C.
United States Court of Appeals for the Second Circuit 2007 US App Lexis 27612

Law firm was sued by former clients, and insurance company disclaimed coverage because law firm did not give reasonable notice of potential suit. Law firm defended by arguing that it had no basis to expect a suit by its client, who had assured them that she did not intend to sue. She, however, did. Court noted that no court in New York “has addressed the question” of the objective inquiry into a client’s assurances “in deciding what an attorney in the insured’s position could reasonably have foreseen.”

2. SMARTIX INTERNATIONAL LLC v. GARRUBBO, ROMANKOW & CAPESE PC, United States District Court for the Southern District of New York, 2007 US Dist Lexis 85807

Discussion of post-end of discovery subpoenas, as well as whether non-party subpoenas are permissible in what might be called a fishing expedition. These personal records are “not relevant to the claim or defense of any party.”

3. KING v. FOX
United States District Court for the Southern District of New York, 2007 US Dist Lexis 85396

This case 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.”

Judge Sweet discusses the equitable/law nature of the legal malpractice claims, and gives a short historical tour of the right to a jury trial.”

4. BRITESTARR HOMES INC. v. PIPER RUDNICK LLP
United States Court of Appeals for the Second Circuit 2007 US App Lexis 27935

Piper Rudnick wins motion for summary judgment, finding that client “failed to establish the required proof of damages for any of its claims.” “In particular, as to the difference between the value of the client’s property in bankruptcy and outside of bankruptcy, the client failed to show that any damage to the property was” the result of the bankruptcy proceeding.