Here is a further article on a $ 19 Million settlement in a Japanese American anti-dumping case arising from discovery mistakes by Perkins Coie.

"Perkins Coie reached a multimillion-dollar settlement last month with former client Tokyo Kikai Seisakusho, a manufacturer of large newspaper printing presses. The Japanese company sued two of the firm’s Washington-based partners for malpractice in February 2006 stemming from work they did in a legal dispute involving anti-dumping laws.

TKS agreed to drop its suit against the Seattle-based firm on Aug. 22. Days before the settlement documents were filed, the company announced in a press release that it would receive $19 million to settle a malpractice suit arising from an anti-dumping case. It did not name the law firm in the release, citing a nondisclosure agreement.

"By the time the case went to trial in November 2003, the parties had exchanged more than a million pages of documents, taken scores of depositions on two continents, and translated thousands of communications from Japanese to English.

But in its malpractice complaint, TKS says there was one document in particular that proved critical to the case: In 1996, the company sold two printing presses to The Dallas Morning News with a disguised rebate. TKS and the News originally agreed on a price of $5.2 million for the two presses — the same price TKS had charged the News two years earlier in a similar deal that the Commerce Department later determined to have violated anti-dumping laws. With that in mind, TKS says in its complaint that Perkins’ Saito advised the company to raise the price on the new presses by $2.2 million to avoid another government review. In conjunction with the price increase, though, Saito built a hidden rebate for the News into the deal through a combination of cancelled fees and free supplies that would reduce the paper’s cost back to the 1994 price tag. TKS followed Saito’s advice.

A SECRET REBATE REVEALED

And that’s when Goss got lucky. During discovery, TKS claims that Perkins Coie made the costly error of sending Goss’ attorneys privileged documents outlining the printing press transaction with the News. According to the complaint, those documents also showed that Saito advised TKS to destroy any evidence of the true cost of the presses sold to the News.

But Nicholas Critelli, name partner of Nicholas Critelli Associates, who was local counsel for TKS in the Goss trial, says it was unclear that handing over the documents was inadvertent or, in hindsight, a poor tactical decision. "

This is an estate legal malpractice case in which "In 1993, nonparty Ricki Singer created an irrevocable inter vivos trust for the benefit of herself and her son as a remainderman, with plaintiff Frieda Tydings, her aunt, designated as the sole trustee. The trust agreement did not require plaintiff to offer an accounting, nor is there any indication that the grantor ever requested an accounting until on or about August 20, 2003, over six years later, when she filed a petition in the Surrogate’s Court for a compulsory accounting and the suspension of Steven Singer’s authority pending a proceeding to remove him as trustee.

Plaintiff retained defendant Greenfield, Stein & Senior, LLP to represent her in the proceeding. While the firm submitted a notice of appearance dated September 9, 2003, it did not thereafter file an answer to the petition or any other response. As a result, on September 24, 2003, the Surrogate issued an order directing both plaintiff and successor trustee Steven Singer to provide an accounting.

Plaintiff thereafter retained a new attorney, and her final accounting was filed on November 14, 2004. However, the grantor objected to the accounting and sought to surcharge plaintiff with respect to certain matters that had purportedly occurred prior to her resignation as trustee. Plaintiff’s new lawyer moved to dismiss the objections, relying on the applicable six year statute of limitations (CPLR 213).

The Surrogate denied plaintiff’s motion, holding that "the statute of limitations can begin to run on the beneficiary’s right to an accounting only where the former fiduciary has failed to have accounted after a reasonable time to do so has passed" (Matter of Singer, 12 Misc 3d 621, 625 [2006]). This Court affirmed, but did so on the ground that the "former trustee waived her statute of limitations defense by failing to raise it in response to the grantor’s petition to compel an accounting,

Plaintiff former trustee then commenced this legal malpractice action against her first attorneys. Defendant law firm moved for dismissal on grounds of collateral estoppel, arguing that the Surrogate’s determination in Matter of Singer, (12 Misc 3d at 621, supra), rejecting the statute of limitations defense, which decision was subsequently affirmed, established that plaintiff could not have prevailed in the accounting proceeding in any event.

We therefore conclude that collateral estoppel cannot properly be relied upon to preclude plaintiff from demonstrating that but for defendant’s alleged malpractice, she would have prevailed in that accounting action, and the motion to dismiss is therefore denied.

"

A trove of photos, including the famous Marilyn Monroe up-draft photo are the res over which the Shaw family fought for years.  Father against son, sisters against brother… Finally it ended, with an Appellate Decision which sets forth the attorney rights to billing, doubling of bills and judiciary law liens.

"Over the course of his photographic career, Sam Shaw took thousands of pictures of celebrities, including the famous photograph of Marilyn Monroe with her skirt blowing upward. In 1994, he commenced an action against his son Larry, also a photographer, for conversion of over 200,000 commercially valuable photographic images and related claims, and sought a declaration of ownership rights, an accounting of the images, unspecified compensatory damages, and $100 million in punitive damages (the Shaw family action). Larry, contending that Sam had gifted or assigned rights in the photographs to him, and that he, not Sam, had shot some of them, raised ten counterclaims. In 1995, Supreme Court dismissed several of the counterclaims, but in 1998 granted Larry the right to examine all 500,000 photographs in Sam’s possession.

Upon Sam’s death in April 1999, Supreme Court appointed his daughters, Edith Shaw Marcus and Meta Shaw Stevens (collectively, the Shaw sisters), temporary administrators to prosecute the action against Larry, and appointed a receiver of the 500,000 photographs that had been in Sam’s possession. The receiver stored the photographs in a warehouse, where they were damaged. The receiver filed a $2 million claim with the insurer, which filed for bankruptcy protection; the claim was turned over to the New York State Liquidation Bureau and assigned to an adjuster, but remains unresolved. The charging liens also attach to any insurance proceeds for damage to photographic images while in storage. The "enforcement of a charging lien is founded upon the equitable notion that the proceeds of a settlement are ultimately under the control of the court, and the parties within its jurisdiction, [and the court] will see that no injustice is done to its own officers’" (Schneider, Kleinick, Weitz, Damashek & Shoot v City of New York, 302 AD2d 183, 187 [2002], quoting Rooney v Second Ave. R.R. Co., 18 NY 368, 369 [1858]). "The statute is remedial in character, and hence should be construed liberally in aid of the object sought by the legislature, which was to furnish security to attorneys by giving them a lien upon the subject of the action" (Fischer-Hansen v Brooklyn Hgts. R.R. Co., 173 NY 492, 499 [1903]). The lien is imposed on the client’s cause of action, in whatever form it may take during the course of litigation, and follows the proceeds, wherever they may be found (see Matter of Cohen v Grainger, Tesoriero & Bell, 81 NY2d 655, 658 [1993]). "

 

Law firm is sued for legal malpractice.  May they deduct their unearned contingent fee from the malpractice award?  On the one hand, it seems that plaintiff may have a windfall.  It would never have walked away with 100% of the verdict had defendants been successful.  On the other hand, why should the defendant earn a hypothetical fee when it  was negligent and failed?

In NY the rule is that there is no deduction.  Here is a report from Texas on the same issue.

"If a firm is hit with a malpractice jury verdict, is it entitled to subtract a portion of the damages award if it handled its former client’s case on a partial contingent-fee basis?

That was the issue of first impression Akin Gump Strauss Hauer & Feld presented to Dallas’ 5th Court of Appeals recently after a jury found Akin Gump negligent in a legal malpractice suit and hit the firm with a $922,631 verdict. On appeal, the firm argued in its brief that attorney fees the former client paid Akin Gump should not have been part of the jury’s verdict, because only judges can order disgorgement.

Akin Gump also argued that the award should have been reduced by 10 percent, because the firm had a partial contingent-fee arrangement with the client: Lawyers worked at a reduced billing rate but were entitled to take 10 percent of National Development Research Corp.’s recovery. According to its brief, Akin Gump’s theory was that its former client should not be allowed to recover more money in a malpractice suit than it would have recovered from its client if the firm had successfully represented the client.

In its Aug. 29 opinion in Akin Gump Strauss Hauer & Feld v. National Development Research Corp., et al. the 5th Court ruled that the attorney fees former client NDR paid to the allegedly negligent firm "are not recoverable as an element of damages" in a legal malpractice suit against a firm. The holding conflicts with rulings from Texarkana’s 6th Court of Appeals and Eastland’s 10th Court of Appeals.

But the 5th Court rejected the firm’s contingent-fee argument, saying the former client "should not be forced to pay a contingency fee that Akin Gump never earned." It also noted the client had to hire a second set of lawyers to "be in the same position it would have been absent Akin Gump’s negligence "

This report notes that $ 35 million was too little a payout to the overcharged clients of the John M. O’Quinn law firm.

"An arbitration panel has ordered John M. O’Quinn’s firm to pay a little more to a class of 3,450 former breast implant clients who allege O’Quinn’s firm overcharged them for expenses.

In July, a three-member arbitration panel ordered O’Quinn’s firm to pay $35.7 million in damages to the class. But in an order issued on Sept. 11, a three-member arbitration panel ordered the firm to pay a total of $41,465,950. That $41.5 million breaks down to $9,979,364 for breach of contract damages, $2,494,841 for attorney fees on the breach of contract claim, $3,991,745 in interest on the breach of contract claim and $25 million for fee forfeiture.

The panel allocated $500,000 for expenses and $10,241,487 for attorney fees, leaving $30,724,463 to be distributed to class members.

O’Quinn, of the O’Quinn Law Firm in Houston, did not return a telephone call seeking comment. Neither did his attorney, Billy Shepherd, a partner in Cruse, Scott, Henderson & Allen in Houston, who said in an earlier interview that they are researching avenues of appeal.

An attorney for the plaintiffs, Joseph Jamail, a partner in Jamail & Kolius in Houston, says, "It came out pretty much where I thought we were going to, based on the original order." Jamail says the former O’Quinn clients "felt cheated" but are now vindicated.

In their petition in Martha Wood, et al. v. John M. O’Quinn, P.C., the plaintiffs allege O’Quinn’s firm wrongfully deducted "Breast Implant General Expenses" — expenses such as the cost of taking depositions that were relevant to all the suits — and other fees from their settlement checks. O’Quinn denied the allegations. "

Last week we discussed the racketeering lawsuit by Biovail and the Kasnowitz, Benson law firm.

Today, this article from Law.Com relates that Biovail has re-hired the Kasnowitz law firm who has appeared for it in NJ.

"Biovail Corp. has taken a page from the George Steinbrenner/Billy Martin playbook in order to reignite its well-publicized conspiracy suit against short-sellers and analysts. The Canadian drugmaker has rehired its former lead firm in the case — Kasowitz, Benson, Torres & Friedman. Biovail fired Kasowitz last March amid legal proceedings surrounding the company’s misuse of court-protected documents.

The suit began in February 2006, when Biovail sued analysts and hedge funds, including SAC Capital and its founder Steven Cohen, in New Jersey state court. Biovail claims that it was the victim of a conspiracy to spread false information about it in an effort to depress its stock and profit. The company’s chairman at the time, Eugene Melnyk, appeared on "60 Minutes" to tout the complaint.

But the company’s suit has been stalled since January, when Manhattan federal district court Judge Richard Owen ruled that Biovail violated a protective order in his courtroom where the company is a defendant in a shareholder class action. Specifically, Owen found that Biovail had used court-protected documents it had subpoenaed from Banc of America to support its allegations in the New Jersey case.

The dispute was embarrassing and costly for both Biovail and its lawyers. It was amidst the hearings that Biovail fired the Kasowitz Benson firm. "

 

Will digital text and its manipulation become the fodder of legal malpractice cases?  As in each new refinement of media or even printing, attorneys must keep up.  Carbon paper, phtotstats, photocopies, computers, fax, scanning; each has been a refinement of the prior world, and each then sets a high water mark. This article  suggests that digital manipulation of text, and files will eventually become the standard, deviation from which may be malpractice.

We’ve been following this in the Madison Record for a few months.  Now it appears that Lloyds is out, but the remaining insurance companies are still in.

"Lloyd’s Illinois and underwriters at Lloyd’s London have settled a suit the Lakin Law Firm filed against them in a legal malpractice case.

Madison County Circuit Judge Barbara Crowder signed an order Sept. 6, granting a Lakin motion to dismiss Lloyd’s with prejudice.

Affinity Insurance Services and the Norton and Rain Insurance agency (NRI) remain as defendants.

The Lakins sued for coverage of an order from a federal judge in Oklahoma awarding about $4 million to former Lakin client Stephen Williams.

The Lakins obtained a settlement for Williams and structured the payout so he would receive regular payments for many years.

The Lakins entrusted the payout to investor James Gibson, who for years piled up payouts from clients of the Lakins and other firms.

Gibson looted the funds and fled to Belize.

Today he occupies a prison cell.

Last year Williams sued the Lakins in U.S. district court at Tulsa, for recommending Gibson.

The Lakins did not respond, so this year Chief Judge Claire Eagan granted a default"

"Celebrity Photographer" Kenneth Nahum owned two penthouses, and sat on the condo board.  Nevertheless, he and his attorneys failed successfully to purchase the rooftop area in between, and he has now successfully passed a motion to dismiss.

"A Manhattan judge has ruled that celebrity photographer Kenneth Nahoum may proceed with a legal malpractice suit stemming from his attempt to purchase 2,000 square feet of common space in his Soho building for less than $70,000.

Mr. Nahoum, who owns two penthouses at 95 Greene Street, retained real estate lawyer Carolyn L. Weiss and her Scarsdale, N.Y.-based law firm Weiss & Weiss in 2000 to represent him in the purchase of common rooftop space from the building’s board of managers, on which he then sat.

The sale was challenged by a later board, which said Mr. Nahoum had never gotten the required unanimous approval from the building’s unit owners and that the property at issue was larger than originally stated.

Mr. Nahoum sued Ms. Weiss for failing to recognize that his purchase was defective. "