This report of a Texas Case that garnered a $ 71 Million dollar verdict, only to see it overturned on appeal.  Now, the Texas court of last resort has denied review. 

"The Texas Supreme Court handed Houston-based Baker Botts a big victory. On Aug. 31, the Supreme Court denied a petition for review in Kathleen C. Cailloux v. Baker Botts, et al., a ruling that upheld a take-nothing judgment in favor of Baker Botts and Wells Fargo Bank Texas in a big-bucks estate-planning suit.

In 2005, 198th District Judge Karl Emil Prohl of Kerr County ordered Baker Botts and Wells Fargo to pay $71 million in damages to former estate-planning client Kathleen C. Cailloux, a wealthy widow in Kerrville. A jury found Baker Botts breached its fiduciary duty for failing to disclose all important information when doing estate-planning work for Cailloux after the death of her husband, Floyd, in January 1997.

The jury also found Wells Fargo breached its fiduciary duty to Cailloux.

Cailloux alleged in the Sixth Amended Petition that the defendants conspired to convince her, right after her husband’s death, to disclaim her rights to her husband’s estate and transfer more than $60 million to the Floyd A. Cailloux and Kathleen C. Cailloux Foundation — ostensibly to save more than $30 million in taxes — without informing her of other estate-planning options.

In February, a three-justice panel of the 4th Court of Appeals in San Antonio reversed the judgment and rendered a take-nothing judgment in favor of the firm and the bank. In the opinion, Justice Catherine Stone wrote that nothing in the record proved that Baker Botts or Wells Fargo breached a fiduciary duty that caused Cailloux to disclaim her right to the estate of her late husband. "

Legal malpractice litigation is always about compensation.  In addition, sometimes it is also about vindication.  Here in this fascinating story it may well be about jail and disbarment.  Right now, hearings are continuing before Judge Richard Owen in Southern District of New York, and the attorney witnesses are reportedly coming in with their criminal defense attorneys.

Andrew Longstreth of the American Lawyer in Law.Com relates the story of Biovail. 

"Racketeering Lawsuit by Biovail Backfires Against Company and Lawyers
Company’s litigation tactics are in spotlight, as Biovail execs and lawyers from Howrey and Kasowitz Benson feel the heat

This wasn’t how it was supposed to go for Biovail Corp., Canada’s largest publicly traded drugmaker. Biovail was supposed to be the victim, the ill-used dupe of powerful hedge funds, analysts and bankers, whose short-selling scheme to spread false information about the company led to a plunge in its share price in 2003. And Biovail’s lawyers, respected litigators from Howrey and Kasowitz, Benson, Torres & Friedman, were supposed to be the ones to help the company prove it.

Mark Wegener, co-chair of Howrey’s global litigation practice, had been hired to defend Biovail in a shareholder class action in federal district court in New York. His job was to shift blame for the company’s disastrous market fall away from Biovail and its executives, including Chairman Eugene Melnyk. The company’s other lead outside counsel, Marc Kasowitz, played offense. After more than a year of investigation — which included shoe-leather sleuthing by his firm’s in-house detective agency — he had filed a 90-page racketeering suit in New Jersey state court. It was a document as detailed as it was audacious, lobbing charges against some of the most powerful financial figures on Wall Street.

"When Adelphia Communications and founding members from the Rigas family became mired in fraud charges and bankruptcy proceedings, a criminal trial and numerous civil cases were quick to follow.

It was a specific malpractice case for professional negligence brought by the cable company against auditing firm Deloitte & Touche that created a years-long battle between the companies and a list of attorneys that read more like the who’s who of Philadelphia legal circles.

Who knew Robert C. Heim, the late Alan J. Davis, Richard Bazelon, Philadelphia’s commerce court program, David Pittinsky, Arlin Adams, Larry McMichael and a couple of New York firms had so much in common?

Adelphia filed a motion Friday to discontinue Adelphia Communications v. Deloitte & Touche due to a $167.5 million settlement agreement reached this summer that attorneys said was one of the largest ever seen in Philadelphia Common Pleas Court.

With the settlement comes an end to a case that began in 2002 and still promises future litigation work for some of the attorneys involved.

Heim, chairman of Dechert’s litigation group, was contacted by Boies Schiller & Flexner in 2002, the firm representing Adelphia in its bankruptcy case, to see if Dechert would sign on as co-counsel in the malpractice case. "  From Law.Com

What is one to do after a heart attack?  Here, plaintiff says: soldier on!.  Attorney says:  Withdraw!  The court chose attorney’s version.  The Legal Profession Blog writes:

"A lawyer who had represented a client in a construction lawsuit suffered a heart attack five years into the litigation. As a result, a lawyer assigned to assist in the case left the lawyer’s firm. Seven weeks before the scheduled trial, the lawyer moved to withdraw, citing his health problems. The client obtained new counsel, who sought to continue the trial (denied with leave to renew on the scheduled trial date). The case settled prior to the scheduled trial.

The client then sued the lawyer for malpractice. The North Carolina Court of Appeals held that the lawyer was ethically obligated to move to withdraw: "Because [the lawyer] asserted a proper basis and moved to withdraw, [his] conduct did not breach [his] fiduciary duty owed to plaintiff." Further, seeking withdrawal seven weeks prior to the scheduled trial due to health reasons complied with ethical mandates of North Carolina Rule 1.16, notwithstanding the contrary expert opinion offered in opposition to the motion for summary judgment. (Mike Frisch) "

Recent legislative changes to CPLR 2001 and to filing statutes  have cleared out some well known, but still troublesome traps for the unwary.  Many cases have been dismissed because a practitioner re-used an index number for a new case.  An example:  plaintiff starts a special proceeding seeking leave to file a late notice of claim, succeeds, and then files a summons against the municipality under the original index number.  Another example:  practitioner starts a special proceeding by filing with the Supreme Court clerk rather than the County Clerk.

Here is an article from the NYLJ by Palu Aloe.Chapter 529 aims to give some relief for those who file papers incorrectly.2 It amends CPLR 2001, which permits courts to overlook nonprejudicial mistakes, to include mistakes in the filing of the initial process, including the failure to pay the index number fee or acquire an index number, provided the applicable fee is paid.3 This measure became effective on its signing on Aug. 15, 2007. Although, the apparent focus of the bill appears to be cases in which the index number fee is not paid because the summons is filed under a previously obtained index, the legislative history indicates a more expansive purpose and is intended "to correct or ignore mistakes or omissions occurring at the commencement of an action that do not prejudice the opposing party, in the same manner and under the same standards that it already does with regard to all other nonprejudicial procedural events."4 Although not explicitly stated, this would appear to apply to other types of filing mistakes, such as filing of the initial papers in the wrong office, as was the case in Matter of Mendon Ponds Neighborhood Assn. v. Dehm, 98 NY2d 745, 747 (2002). It appears intended to repudiate arguments that strict adherence to CPLR 304 is required for commencement, and any defect in the filing process will result in dismissal so long as there is a timely objection by the defendant. Instead, the new regime requires that the defect in the filing process actually results in some actual prejudice to the defendant, and if no such prejudice can be shown, then the defect is to be ignored."

Motion dates and service are also changed. "The timing of motions under New York practice has long been a source of problems. The time frames, unrealistically short, are rarely followed and usually just the starting point for a discussion between counsel of a briefing schedule, or worse, a series of appearances at a calendar call and a request for adjournments so that answer and reply papers may be submitted. Chapter 185 seeks to step into this morass, but it does so in a manner not wholly satisfactory, and adds as many problems as it solves. It amends CPLR 2214(b) to require the moving party seeking a reply to serve the motion 16 (instead of 12) days before the return date. If 16 days are provided, then answering papers and any notice of cross-motion must be served seven days in advance of the motion. CPLR 2214(b) further provides that reply as well as "responding" affidavits must then be served one day in advance. "Responding" affidavits presumably means affidavits in response to the cross-motion, although the new statute is not explicit, and in fact, continues to provide no response for a cross-motion served two days in advance of the motion (which still can be served if the moving party does not provide the extra notice)."

"

Hinshaw reports that this attorney was granted coverage in Legal Malpractice coverage for work done:“while acting solely in a professional capacity on behalf of” the partner’s former firm – required the insurer to defend and indemnify for work the lawyer did both before and after he had left the firm. The decision has important things to say not only about the scope of malpractice coverage but also about the importance for attorneys and insurers alike of proper transfer of client matters when a lawyer leaves a firm. "

Here is the Popper take on this strange GA legal malpractice case.  Did the defendant attorneys really take a car case to trial without speaking with the defendant?  Did they admit liability without his permission?  Why did the jury award only 1/2 of the damages? 

Was there a settlement of the underlying case for less than the verdict?  Were there other defendants [owner, lessor] who were found liable?

We’ll keep looking into this case.

 

Not in Florida, and not likely in New York either.  Lender retained attorney to start a foreclosure.  He did not.  Lender started legal malpractice case, and assigned both the foreclosure, the loan, the mortgage, as well as the legal malpractice case.  Florida court did not permit the suit,  Hinshaw reports:

"Florida Supreme Court underscores adherence to not permitting assignment of legal malpractice claims.  Law Office of David J. Stern, P.A. v. Security National Servicing Corp.,___So. 2d___2007 WL 1932251 (Fla. 2007)

In Security National Servicing Corp. v. Law Office of David J. Stern, P.A., 916 So.2d 934 (Fla. App. 2005), the District Court of Appeal of Florida, Fourth District, cited prior Florida precedent regarding cases in which a legal malpractice claim arose from a lawyer’s failure to timely file a foreclosure action, such as that before the court. An appeal to the court followed. While the appeal was pending, the client assigned both the subject loan and the client’s legal malpractice claim to plaintiff.

The trial court granted summary judgment in favor of defendant on the ground that the cause of action was not assignable. The appellate court acknowledged that rule, but distinguished the case on appeal, stating that the subject policy factors were not present. Specifically, plaintiff was not an adversary; there was no risk of disclosure of confidential information; and there was no risk of the commercialization of legal malpractice claims. Citing Cowan Liebowitz & Latman, P.C. v. Kaplan, 902 So. 2d 755 (Fla. 2005) and Cerberus Partners, L.P. v. Gadsby & Hannah, 728 A.2d 1057, 1061 (R.I. 1999), the court allowed the assignment."

Until three years ago a personal injury attorney knew that a trip and fail on a NYC sidewalk meant that a Big Apple map was needed.  Then the law changed, and the attorney needed to know who owned the adjacent building.  Now, a new wrinkle.  The adjoining landowner is responsible for the sidewalk, but the City remains responsible tree wells and trees.

Vucetovic v Epsom Downs, Inc. 2007 NY Slip Op 06577, Decided on September 6, 2007
Appellate Division, First Department, Buckley, J., J. "At issue on this appeal is whether tree wells are part of the "sidewalk" for purposes of Administrative Code of the City of New York § 7-210, which requires owners of real property to maintain abutting sidewalks in reasonably safe condition.

Title 19 of the Administrative Code, "Streets and Sidewalks," defines "sidewalk" as "that portion of a street between the curb lines, or the lateral lines of a roadway, and the adjacent property lines, but not including the curb, intended for the use of pedestrians" (Administrative Code § 19-101[d] [emphasis added]). Neither trees nor tree wells are "intended for the use of pedestrians," and therefore they are not part of the sidewalk.

Administrative Code § 18-104 entrusts the Department of Parks and Recreation with "exclusive jurisdiction" over "[t]he planting, care and cultivation of all trees and other forms of vegetation in streets." The "care" of the trees would necessarily entail the tree wells, which encompass soil and roots. Moreover, the statute makes evident that the trees are "in streets," and thus something separate and distinct from streets. The Department is to "employ the most improved methods for the protection and cultivation" of trees under its "exclusive care and cultivation" (Administrative Code § 18-105), which would include tree wells, which exist for the protection of trees. "

Here is a case, reported by Hinshaw in which a firm was required not only to disgorge fees based upon its malpractice, but had to pay the client’s legal fees generated in the dispute.

"In re SRC Holding Corp., f/k/a Miller & Schroeder, Inc., Debtor – Bremer Business Finance Corporation v. Dorsey & Whitney, LLP, Memorandum Opinion and Order, 2007 WL 1464385 (D. Minn.)

Risk Management Issue: What should a law fi rm do when it realizes it has developed a confl ict of interest with its client, or arguably has made an error that could harm the client?

The Case: Dorsey & Whitney was engaged by Miller & Schroeder, an investment banking fi rm, to close a loan transaction to President, a management company, which had contracted with the St. Regis Mohawk Tribe to build and operate casinos. Miller & Schroeder placed the loan with several different investors, including Bremer Business Finance Corporation. The loan package required approval of the National Indian Gaming Commission (“NIGC”) in order to be enforceable against the tribe. Dorsey submitted the loan to the NIGC for approval, but the approval was not obtained before the fi nancing package closed, and the NIGC never gave its consent. When the casino project failed, President became insolvent and the tribe refused to repay the loans.

Bremer fi led suit against Dorsey & Whitney and, as reported in our December 2006 issue, a bankruptcy judge denied the law fi rm’s motion to dismiss the malpractice claim. The law fi rm claimed it only represented Miller & Schroeder, which brokered the loan, and not the individual banks who participated in it; Bremer contended it was a client with standing to sue for malpractice and the bankruptcy judge agreed. Recent Developments: Dorsey’s appeal from the bankruptcy judge’s Recommendations and Order was decided on April 7, 2007, by U.S. District Court Judge Donovan Frank. Judge Frank affirmed the bankruptcy court’s determination that Bremer had standing to sue the law firm, finding that a direct attorney-client relationship existed as of June 2000. Judge Frank agreed that the law firm violated its ethical duties by failing to disclose a potential malpractice claim involving allegedly erroneous advice, and he ultimately upheld the prior order that the law firm must disgorge nearly $900,000 in fees received from Miller & Schroeder and pay Bremer’s legal costs of around $409,000 as well. "