Legal Malpractice can pop up in any number of situations, as we have said just last week.  Here is a short blurb on a big dollar legal malpractice case in California, concerning Surfing Chicks, Paul Hastings, Kat House and trademarks.

"Too many ‘Surf Chicks’?

Los Angeles-based law firm Paul Hastings, Janofsky & Walker LLP has been hit with a $30 million legal malpractice suit by a surfing-gear maker that hired it to trademark the phrase “Surf Chick.” The suit by Ventura, Calif.-based Kat House Productions claims Paul Hastings failed to register trademarks after saying it had done so. The suit, in Manhattan federal court, says Christian Dior SA was able to copy the “Surf Chick” mark because of the alleged negligence of the firm and several attorneys. “Had defendants properly applied for, and diligently prosecuted, the trademark applications, Christian Dior would not have been able to mimic and copy plaintiffs’ mark,” the complaint says. "

Hinshaw reports on Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 2007 WL 1213712 (N.Y. April 26, 2007)   We discussed this case last April.

"The New York Court of Appeals recently held that a client was entitled to recover attorneys’ fees and expert witness costs incurred when his attorney’s error forced him to appeal an adverse verdict and to try the case a second time. The client was entitled to recovery, notwithstanding that a successful settlement was obtained during the second trial.

While walking across a road, the client was struck and injured by an automobile whose driver was making a left turn. A traffic signal controlled the intersection in which the accident occurred. The client retained attorney Corker to sue the driver. At trial, there was conflicting testimony as to whether the client was in the crosswalk at the time of the accident. At Corker’s request, the trial court gave an instruction based on N.Y. Veh. & Traf. Law § 1151, which addresses intersections without operational traffic signals. Section 1151 provides that pedestrians have the right of way in crosswalks, but have a duty not to “suddenly leave a curb or other place of safety and walk or run into the path of a vehicle which is so close that it is impractical for the driver to yield.” A jury found the client and the driver each 50% at fault, and awarded damages of $255,000.

The client retained a new lawyer, who filed a motion to set aside the verdict on the ground that the jury should have been instructed based on N.Y. Veh. & Traf. Law § 1111, which applies to intersections controlled by traffic signals. Section 1111 provides that vehicles “must yield the right of way to other traffic lawfully within the intersection or an adjacent cross walk.” The trial court denied the motion, reasoning that the client’s initial counsel had requested an instruction based on N.Y. Veh. & Traf. Law § 1151. The appellate court reversed, ruling that the client was entitled to a new trial because instructing the jury based on § 1151 was an error, and it affected the jury’s assessment of the client’s fault.

A retrial resulted in a jury’s finding that the driver was solely at fault. Before the jury returned a verdict on damages, the parties settled for $750,000. The client then filed a legal malpractice action against his initial attorney, alleging negligence in requesting an instruction based on § 1151 rather than N.Y. Veh. & Traf. Law § 1111. As damages, plaintiff sought to recover: (1) the legal fees that he incurred in moving to set aside the verdict in the first case, and in appealing the verdict; (2) the expert witness fees that he incurred in the second trial; and (3) $190,000 as an amount representing interest that would have accrued had he obtained a $750,000 recovery in the first trial.

The trial court granted partial summary judgment in favor of plaintiff, ruling that he was entitled to recover $28,703.27 as reimbursement for the attorneys’ fees incurred in obtaining a new trial and the expert fees incurred in the second trial. The trial court denied the motion with respect to plaintiff’s claim for interest. An appellate court reversed, and reasoned that the client did not sustain any actual damages because he had obtained a substantial recovery in the second trial. The Court of Appeals of New York reinstated the trial court’s ruling. "

Legal Malpractice can pop up in any number of situations.  Here is a totally unexpected possibility.  In a Blog blurb the Construction Attorney Blog talks about this problem:

"Much is being written about the 2007 AIA Documents, which were released in early November. One of the much-discussed differences in these documents is the fact that arbitration is no longer the default dispute resolution mechanism, being replaced by a "check-box" system whereby three options are provided: arbitration, litigation and "other." If none of the boxes is checked, then litigation is the default mechanism, following mandatory mediation.

It was with great interest that I opened the new documents using the AIA’s Electronic Documents software system. I immediately printed out several of the new documents, including various owner-architect agreements and an owner-contractor agreement. At this point, I had not filled in anything. I was, therefore, astonished to find that the "arbitration" box had been checked on all of the documents where that option appeared. Thinking that I had made some type of mistake, I again started a brand new document and made sure not to check anything. Once again, the arbitration choice was checked.

However, most users today are using the electronic documents and may not be aware that they actually need to check the litigation box if that is what they intend. If they just read the articles that claim that litigation is the automatic "default," they may not even look at this provision when drafting the documents if they actually want to have litigation as the real default. They may be surprised years later to receive a demand for arbitration. If they are attorneys, they may be open to a claim for legal malpractice if their client insisted on not using arbitration and they relied on the "default" litigation story.

It is usually defendant’s strategy to blame the client, at least to some extent.  Here in this case, even the court joined in.  Plaintiff was in an auto accident, hired an attorney who filed the complaint, and then gave up on discovery responses. Case dismissed, and incidently, the attorney was suspended, for an unrelated case.

Attorney lied to client, who eventually discovered the truth.  Outcome?  She sues attorney, wins uncollectible judgment, loses her attempt to revive auto accident suit.  Court says :

"Bland retained Graham in July 1998,” Sharer wrote. “It was not until December 2004, more than six years later, that she finally grew sufficiently suspicious of Graham’s inaction and failure to respond to her repeated calls, over several years time, to contact the Circuit Court directly to inquire into the status of her case. We agree with the trial court that Bland’s own actions do not rise to the level of ordinary diligence, nor did she satisfy her duty to keep herself informed of the status of her case."

Here is a case in which a husband’s creditors executed upon his wife’s jewlery.  Attorney is hired and the case ends with her having to give up 1/2 of the booty. Husband then sues the attorney.  Guess?  He hired the attorney for his wife, as a nominal defendant, since it was his creditors going after the goods.

Mistake?  In NJ it seems always to be a mistake not to file an affidavit of merits with the complaint, whether the mistake is open and obvious or not. 

The shortcoming?  No privity.  The outcome?  This case did not even get a written opinion.

"After a careful review of the record and briefs, we are satisfied that plaintiff’s arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). The motion for summary judgment was properly granted for the reasons set forth by the trial judge on the record. We add only the following comments on the spoliation claim which was not expressly addressed by the trial judge.

Here is a case from the Bronx in which a matrimonial client unsuccessfully sues her attorney.  Case is dismissed on the statute of limitations.  This was a pro-se plaintiff  v. pro-se defendant case.

"From June 12, 2000 to September 7, 2000, Plaintiff KINBERG retained Defendant GARR to represent her in her matrimonial Action, (which had been pending since 1992). This is evidenced by the parties’ retainer agreement which provides that the legal services that GARR would be providing would be in connection with the then-pending Action, entitled Kinberg v. Kinberg, Index No.: 72304/1992, in New York County Supreme Court. (See Plaintiff’s Exhibit "C"). The matter was scheduled for trial, on the equitable distribution of the marital assets, before the Hon. Justice Jacqueline Silbermann, on September 7, 2000, when the parties entered into a settlement Agreement, and KINBERG took the stand where she was allocuted on the Agreement. KINBERG testified that she understood the Agreement, wanted to accept it, and was satisfied with the services of her Counsel.

The rest of the decision documents the 6 year trail of litigation which ensued.  Plaintiff was successfully sued by the attorney, then she lost an action against her former husband, then lost an action against the attorney, and now, once again, loses.

If the attorney had not sued for his fees, would there have been 5 more years of litigation?

Sidewalk trip and fall cases have special problems associated with them.  As municipalities grew tired of being sued, they enacted strict notice rules, which, along with the General Municipal Law filing procedures, made for a maze.

Here is an example [from Newsbriefs of the NYLJ] of a case in which the town required plaintffs to file their notice in a special place, and then attempted to defend saying that the plaintiff followed the towns rule!

"In a case of first impression, a Brooklyn appeals panel has ruled that a municipality is estopped from claiming a lack-of-notice defense in sidewalk trip-and-fall cases if its employee instructs a member of the public to provide notice of a condition to the wrong department but the notice is nonetheless received by the department responsible for the record-keeping, inspection and repair of sidewalks. In a case involving a plaintiff who fell when her shoe allegedly was caught on an "uneven slab of sidewalk," the Town of Huntington denied receipt of prior written notice of the defect. Supreme Court Justice Gary J. Weber of Suffolk County (See Profile) denied the town’s cross motion for summary judgment. Last week, in a 13-page opinion by Justice Mark C. Dillon (See Profile), the Appellate Division, Second Department, affirmed. "The Town, having instructed [a complainant] to send his written notice . . . to the director of the [Department of Engineering Services], cannot now be permitted to use that instruction as a shield against liability," Justice Dillon wrote. "To do so would result in an injustice to any claimant where there has been compliance with a clear directive, from a Town agent employed by the municipal department that maintains sidewalk complaint records, to file written notice of a dangerous sidewalk condition with someone other than the statutory designee." Gorman v. Town of Huntington, 06-05584, will be published Thursday

When a person who has a personal injury case files bankruptcy, they, in essence, give up that asset to the Trustee in Bankruptcy.  If the recovery is greater than the creditor’s claims, then the plaintiff may get some money.  If not, then the entire proceeds go to the creditors.

Going along with this, the trustee in bankruptcy becomes the plaintiff.  Personal injury attorneys must play by bankruptcy rules, and, for example, must be permitted to represent the trustee by court order, any settlements are subject to court order, as are all fees, regardless of the retainer agreement.

Here is a case in which the personal injury attorney was ousted for simply not following the rules. "In April 2004, Ms. Smith filed for bankruptcy. She had debts of $14,000 and a single potential asset: a personal injury claim based on a sledding accident in which she was blinded in one eye. According to the circuit, "all parties agree that if the personal injury claim is successfully prosecuted, recovery would likely far exceed creditors’ claims against Smith."

Ms. Smith retained Mr. Schwartz for the personal injury case with the initial approval of bankruptcy trustee Robert Geltzer. But the trustee later slammed Mr. Schwartz for naming Ms. Smith, and not Mr. Geltzer, as plaintiff in the action and then stalling for more than nine months to change the caption in the case while he brought in another lawyer without court approval.

The filing of the personal injury action under Ms. Smith’s name, the circuit said in Schwartz v. Geltzer, 06-4450-bk and 06-5323-bk, "was the first in a litany of errors that, when viewed together, reflect at best a lack of understanding of the bankruptcy process and at worst an effort to circumvent its requirements."