Austin Texas Blogspot reports this multi-state, multi-court personal injury – bakruptcy – legal malpractice case arising from an auto accident.  Texas, California, personal jurisdiction, the place of the wrong.  All are mixed in this swirl.  Eric Red v. John Doherty and Doherty & Catlow, A Law Corporation,
No. 03-06-00478-CV (Tex.App.- Austin, Jul. 20, 2007)(Opinion by Justice Waldrop

"In May 2000 in Los Angeles, California, Red drove his vehicle into a crowded bar, killing two individuals. Family members of those two individuals filed wrongful death claims against Red in California state court, and John Doherty of the California law firm Doherty & Catlow was hired to defend Red against those claims under a $30,000 automobile insurance policy issued by Mercury Insurance Group.
After the wrongful death claims were filed against Red, he briefly moved to Austin, Texas, where he filed for bankruptcy protection. He sought and received a stay of the California state court wrongful death lawsuit. Red retained Austin attorney Steven Hake to represent him in the bankruptcy. Red sought to discharge all of his debts, including any contingent liability to the wrongful death claimants, but the wrongful death claimants filed an adversary proceeding in the bankruptcy objecting to the discharge of their claims. On the advice of Hake, Red hired another Texas attorney, Stephen Sather, to represent him in the adversary proceeding in the bankruptcy. After a trial, the bankruptcy court determined that the wrongful death claims qualified as exceptions to discharge under 11 U.S.C. § 523(a)(6) because the collision was the result of Red’s willful and malicious conduct. The district court affirmed the bankruptcy court’s decision on similar grounds, and the Fifth Circuit Court of Appeals affirmed that decision. See In re Red, 96 F. App’x. 229, 230 (5th Cir. 2004).

After the Texas bankruptcy court rendered its decision, the California state court in which the wrongful death claims were pending ruled that the Texas court’s decision was res judicata as to Red’s liability for the wrongful death claims. The court directed a verdict in favor of the claimants on the issue of liability, and the issue of damages was tried to a jury, which returned a verdict awarding slightly over $1,000,000 to the plaintiffs. That judgment was affirmed on appeal. See Roos v. Red, 130 Cal. App. 4th 870, 874 (Cal. Ct. App. 2005), cert. denied, 546 U.S. 1174 (2006).

In May 2006, Red sued Sather in Texas state court for legal malpractice in connection with the adversary proceeding in the Texas bankruptcy. He later amended his petition to add as defendants John Doherty, the law firm Doherty & Catlow, Mercury Insurance Group, and an employee of Mercury Insurance Group. Against these defendants, Red asserted claims for breach of contract, civil conspiracy, fraud, breach of fiduciary duty and the duty of good faith and fair dealing, negligent misrepresentation, legal malpractice, and DTPA violations.
Appellees John Doherty and Doherty & Catlow filed a special appearance arguing that the Texas court did not have personal jurisdiction over them. After an evidentiary hearing, the trial court granted appellees’ special appearance and dismissed Red’s claims against them. The court issued findings of fact and conclusions of law. This appeal followed

In a recent successful case, plaintiff was a large real estate management company. Plaintiff was involved in a 500 million dollar financing involving 3 NYC downtown buildings. The general counsel asked one of the multiple large firms whether "mortgage spreading" could be used to avoid payment of new mortgage tax. When told "no", the financing continued to closing. At closing it was determined that $1.7 million in mortgage tax could have been legally avoided, contrary to the advice. Prior to jury selection this case settled for $ 900,000.
Attorney malpractice arises in matrimonial settings too. In another recent successful case, Plaintiff -wife had a history of suicide attempts, which were one of the bases of husband’s claim of cruel and inhuman treatment. Plaintiff had a history of psychiatric hospitalizations. Days after her release, her attorney and she attended a court hearing on custody, which turned into a settlement of the entire divorce. At the time, she was still on psychotropic medication, and only days out of the in-patient hospitalization. This attorney malpractice matter was settled for $350,000.

Attorney malpractice case arise in unexpected circumstances and may be more vital and valuable than expected. Analysis of the four elements of attorney malpractice is required to determine whether a case exists, and may successfully be prosecuted. As always, the elements are: professional relationship, deviation, proximate cause [including the "but for" element,] and damages.

Should the client’s legal malprctice award be for the entire sum or should there be a deduction for the contingent fee the negligent attorney would have won?  The debate runs like this;  [For the full amount]  The client will have to hire a malpractice attorney to sue the negligent attorney, and will have to pay a fee, so why should the client have to pay twice.  When the contingent fee the negligent attorney would have won is deducted, the client never gets what he/she would have won had no mistakes been made.

[Against the full amount]  If the client was to et 2/3 of the award in the first place, and the attorney now said to be negligent 1/3, why should the client get a windfall when the first attorney is negligent?

Wyoming, in Horn & Horn v. Wooster & Duddy holds to the later argument.  "The Court stated they have clear authority regarding a prevailing party’s right to collect attorney’s fees from his opponent. In Wyoming the American rule is applied. The Court saw no reason for creating an exception to the American rule when legal malpractice was involved.
Some courts have ruled that a negligence attorney is not entitled to a deduction of his contingent fee from a malpractice award against him but, utilizing a quantum meruit theory, may be entitled to a deduction for the value of his services which benefited the client. The Court stated that using the above approach to calculate damages would be difficult because the facts would present nearly unlimited opportunities for the client to second-guess the first attorney’s tactics and work product. "

    There is a hierarchy of attorney malpractice mistakes, recognizable by even a layperson. At the head of the list is the failure to start an action, whether a result of failure to file a notice of claim under the General Municipal Law, The Public Authorities Law, the Court of Claims act, or other claim-notice acts. That failure may be a result of failing to file the summons and complaint, or failing to purchase a new index number for the complaint. This group of "failing to file" the case is easily recognizable to the lay juror.
The next group consists of failures consists of serving the wrong defendants, failing to obtain jurisdiction over the person, failing to serve an adequate complaint or filing a complaint after the statute of limitations has run. These failures too, are easily recognizable.

The third group arises from calendar control problems and failures to appear on status conferences, clerk’s calls, pre-trial or pre-calendar conferences, and appearances in TAP or the Jury Coordinating Part.

The fourth group arises from other calendar control problems, not created by a failure to appear in court. A case marked off calendar by a party, must be restored within 1 year. A default judgment must be taken within one year. An order must be settled within 60 days or abandoned. A motion to renew or reargue must be made within 20 days, a motion to dismiss for lack of personal jurisdiction must be made within a short time period. A 90-day notice requires a response. A notice of appeal must be filed within 30 days. An appeal must be perfected within the department’s rules.

Clients come in all stripes.  Some are reasonable, some not.  This client hired the Ernst law firm,  but a fee dispute arose.  Ernst sued for fees and he counterclaimed for legal malpractice.  just before trial, his attorney quit.  Why?  We don’t know.  But, an attorney who quits just before trial suggests problems with the case or personality.

Client and Ernst mutually released eachother.  However, client then turned around and sued Ernst for legal malpractice all over again.  Result?  Sanctions, dismissal, loss.

 

The NYLJ’s Anthony Lin reports:

"The private equity firm that owned a controlling interest in failed commodities brokerage Refco Inc. has filed a $245 million lawsuit against Mayer, Brown, Rowe & Maw, accusing the law firm of helping to conceal the sham transactions that led to Refco’s collapse.

Boston-based buyout firm Thomas H. Lee Partners filed a 50-page complaint against Mayer Brown Thursday in federal court in Manhattan (07 Civ. 6767). In the suit, Lee said Mayer Brown handled 17 fraudulent transactions at the behest of Refco’s executives between 2000 and 2005.

"These sham transactions . . . were designed to defraud potential purchasers (such as Plaintiffs), lenders, and potential lenders by concealing Refco’s true financial condition," the complaint states.

One of the nation’s best-known private equity firms, Lee acquired its controlling stake in Refco in August 2004. The deal appeared to be a major success when Refco’s value soared in an August 2005 initial public offering. But the company’s stock collapsed in October 2005 when the executives’ activities came to light. The company filed for bankruptcy days later.

Lee is seeking at least $245 million on claims of securities fraud, common law fraud and negligent misrepresentation. Lee is also charging violation of the Racketeer Influenced and Corrupt Organization Act. A successful RICO claim would entitle Lee to treble damages.

Mayer Brown is being defended by John Villa of Washington, D.C.’s Williams & Connolly. In a statement Mr. Villa denied the allegations. "

Malpractice is a professional’s failure to use minimally adequate levels of care, skill or diligence in the performance of the professional’s duties, causing harm to another. In New York, attorney malpractice is defined as a "deviation from good and accepted legal practice, where the client has been proximately damaged by that deviation, but for which, there would have been a different, better or more positive outcome."

Malpractice typically occurs when a professional fails to exercise his or her professional skills in an assignment at the necessary standard of care, skill and learning applied under the circumstances by the average prudent reputable member of the profession in the "community". The analysis is based upon the standard of care for the professional in the community" what other professionals in the same field do for their clients who are located in the same geographic area. In New York, courts will hold all attorneys to the same standard of professional performance.

The first necessary element is a professional relationship. In order to sue for professional malpractice, the plaintiff must have retained the attorney. There must of course be a relationship in privity, between the professional and the plaintiff such that the professional owes the plaintiff a duty. In attorney malpractice either a written retainer, proof that the attorney engaged in work or proof that the attorney appeared for the client is necessary. While in litigation often there is clear proof of representation; in transactional settings, representation may be less clear. Proof to a jury’s satisfaction of actual representation must be demonstrated. This proof may come from the correspondence of the professional, from papers authored by the attorney or from litigation documents.

This shocking medical malpractice case was won by attorney Larry Eisenberg in California.  Reading to the bottom, even though this attorney cracked the med mal case, he is now being sued in legal malpractice by the first client in the liver series.

"The University of California has agreed to pay $7.5 million to settle 35 claims filed on behalf of patients who waited in vain for liver transplants at UCI Medical Center and who were unaware that the school’s program lacked the staffing to perform the life-saving operations.

The university closed the program in November 2005 after The Times reported that 32 patients died awaiting operations, even as the hospital in Orange turned down scores of organs proffered on their behalf.

A subsequent investigation resulted in a rapid-fire series of resignations, reorganizations and vows to restore the credibility and oversight of the Irvine school’s medical programs.

The agreement by the UC Board of Regents to settle the cases largely closes the book on another embarrassing chapter in the history of UCI’s medical programs, which have been plagued by various lapses over the years: the theft of eggs and embryos from patients in a fertility clinic, the failure to properly keep track of bodies in its medical cadaver program and failings in other transplant programs such as kidney and bone marrow.

The fertility cases were settled for $20

Elodie Irvine, a former client of Eisenberg’s, was not impressed with the settlement.

Irvine’s case prompted the investigation of the transplant center, but she has since alleged that Eisenberg bullied her into accepting a $50,000 settlement. She won an appeals court ruling in April setting aside the original settlement so she can pursue a new case. She has also filed a legal malpractice case against Eisenberg.

California attorney was approached by a new client.  Elder Law Answers  reports that the new client, an elderly woman came with an "advisor" for whom she wanted to get a power of attorney.  The advisor was helping the client by supplying vicodan and marijuhana.  When the advisor stole her money, she turned and sued the attorney in Legal Malpractice. 

"California appeals court has dismissed a legal malpractice suit against an attorney who allowed a client to appoint an untrustworthy individual as her agent under a power of attorney, allegedly without investigating the attorney-in-fact’s background.

In 2004 Diane Mills, who had a long history of mental illness and drug abuse, met Robert Kahuanui. Mr. Kahuanui gained Ms. Mills’s trust and began supplying her with the painkiller Vicodin and marijuana. Ms. Mills subsequently became convinced that her estranged husband was trying to have her committed. Mr. Kahuanui persuaded her that the way to avoid this was for Ms. Mills to appoint him as her attorney-in-fact under a power of attorney.

Accordingly, Mr. Kahuanui located an attorney, Charles A. Triay, and Mr. Kahuanui and his wife accompanied Ms. Mills to see Mr. Triay. Even though Ms. Mills appeared to be impaired, Mr. Triay prepared the power of attorney as well as a will and a health care directive for Ms. Mills. He failed to meet with Ms. Mills alone and he later delivered the prepared documents to Mr. Kahuanui, not Ms. Mills. Over the next several months, Mr. Kahuinui and his wife stole thousands of dollars from Ms. Mills and sold much of her property, although Mr. Kahuanui apparently never actually used the power of attorney to appropriate any of Ms. Mills’s property.

Ms. Mills sued Mr. Triay for legal malpractice, alleging that Mr. Triay was professionally negligent for allowing Ms. Mills to select as her attorney-in-fact an untrustworthy individual without adequate investigation of his background. The trial court dismissed the case against the attorney, finding that Ms. Mills had failed to connect Mr. Triay’s conduct with Mr. Kahuanui’s misdeeds. Ms. Mills appealed, and the California Court of Appeals agreed with the trial court. Neither court, however, considered whether Mr. Triay violated California’s rules of professional responsibility for attorneys ."

We know that there are now specific rules about depositions in New York, and we are familiar with the "barking dog" deposition case here too.  New Jersey has its own story:

"Rough spots are common on the road of civil litigation, but it’s not every day that a plaintiffs attorney sues his adversary for asking "inhumane" questions during a deposition that allegedly inflict "grievous emotional distress."

That’s the thrust of a suit filed July 11 in Essex County, N.J., in which Bruce Nagel claims Judith Wahrenberger, his adversary in a medical malpractice case, acted tortiously by asking a husband whether he felt his wife had played a role in the death of their infant daughter by handling the child roughly.

"Wahrenberger’s unsupported and intentional attack upon the parents was beyond any acceptable behavior of a civilized human being," alleges Nagel, of Nagel Rice in Roseland, N.J.

Wahrenberger, the attorney for an emergency room physician at St. Barnabas Medical Center in Livingston, N.J., says she had an obligation to pursue the line of questioning because an autopsy showed the baby had a subarachnoid brain hemorrhage, which can be a sign of shaken-baby syndrome.

"I would not be doing my job if I didn’t explore these areas," says Wahrenberger, of Springfield, N.J.’s Wahrenberger, Pietro & Sherman. "We were talking about negligent homicide. As heartless as he says I was, the last thing I would be is cruel."

The underlying medical malpractice complaint was filed on Jan. 17, six months after the child died. The parents, Andrew and Phyllis Rabinowitz, alleged they tried to get their 6-day-old daughter admitted to St. Barnabas for breathing problems but were told by emergency room physician Lynn Reyman that the infant had only a common cold. The baby died two days later in her father’s arms, blood running out of her nose, as he tried to administer mouth-to-mouth resuscitation. "