Imagine having made enough on a case to have to repay $ 62 Million!   FromLaw Com:

"Three attorneys accused of bilking their clients in a diet drug settlement must repay at least $62.1 million in settlement funds and interest, a Kentucky judge ruled Friday.

Special Judge William Wehr ordered William J. Gallion, 56, Shirley A. Cunningham Jr., 52, and Melbourne Mills Jr., 76, to repay $42 million taken from the settlement and $20.1 million in interest. Wehr said the interest was 8 percent over the six years the attorneys had the funds.

The attorneys are being sued by about 400 former clients who claim the lawyers took too much money as part of a $200 million fen-phen settlement.

Gallion and Cunningham own a 20 percent stake in Curlin, who won the second leg of the Triple Crown in May.

A federal grand jury indicted the attorneys last month, charging them with conspiring to commit wire fraud in representing more than 400 people in a lawsuit over the diet drug. The lawyers, who were temporarily suspended from practicing law by the Kentucky Bar Association, have pleaded not guilty. Federal prosecutors want the lawyers to forfeit any assets they have to pay restitution to their former clients. "

Estate and surrogate proceedings create a unique problem in legal malpracitce.  May the estate sue the transactional [will] lawyer?  Does a beneficiary have a relationship with the attorney.  Here, in this case we see another face of the problem.  In Velasquez v Katz ,2007 NY Slip Op 06275 , Decided on July 31, 2007 ,Appellate Division, Second Department  the question is raised by the executor against the attorney handling a personal injury case for the deceased.

"In January 1994 the decedent Miguel Perez (hereinafter the decedent) commenced a medical malpractice action (hereinafter the underlying action) against Lutheran Medical Center (hereinafter Lutheran) alleging a failure to timely diagnose and treat his colorectal cancer condition. The decedent was represented by the defendant, Richard J. Katz. Thereafter, on September 16, 1994, the decedent executed his Last Will and Testament (hereinafter the Will), naming the plaintiff, his brother, as executor. The Will was retained in the defendant’s possession. On February 5, 1995, the decedent passed away from an unrelated cause.

The defendant alleged that soon after the decedent’s passing, he informed the plaintiff of the necessity of probating the Will in order to pursue the underlying action. However, the plaintiff [*2]did not retain the defendant or any other attorney for this purpose at that time. On May 14, 1997, more than two years after the decedent’s passing, the plaintiff went to the defendant’s office, obtained the Will, and signed an affidavit stating that he was taking the Will "for the purposes of having it probated by the Surrogate of Kings County." Nevertheless, another four years passed before the plaintiff took any steps to probate the Will. In fact, the plaintiff did not obtain provisional letters testamentary until December 28, 2001.

In August 2002 the Supreme Court granted a motion by Lutheran made pursuant to CPLR 1021 to dismiss the underlying action for failure to timely substitute a legal representative following the death of the decedent. Shortly before the motion was granted, the plaintiff commenced this legal malpractice action against the defendant alleging that he failed to timely move to substitute a legal representative in the underlying action. The defendant moved for summary judgment dismissing the complaint. In the order appealed from, the Supreme Court, inter alia, denied the motion finding that there were triable issues of fact. We reverse the order insofar as appealed from.

The plaintiff’s unilateral allegations that he was led to believe that the defendant continued to represent the decedent’s interests are insufficient to establish the existence of any continuing attorney-client relationship and thus inadequate to raise a triable issue of fact in opposition to the defendant’s motion for summary judgment (see Carlos v Lovett & Gould, 29 AD3d 847; Chinello v Nixon, Hargrave, Devans & Doyle, LLP, 15 AD3d 894; see also Moran v Hurst, 32 AD3d 909). Even assuming that the plaintiff was given the impression that the defendant continued to represent the decedent after his death, such a belief was unrealistic after May 1997, when the plaintiff retrieved the Will for the express purpose of having it probated (see e.g. Leffler v Mills, 285 AD2d 774) "

"In New York an attorney may not be held liable for errors in judgment"  So goes the black-letter law.  Here is an illustration of two principals from this Michigan case.  The first is that legal malpractice claims regarding an appeal are not jury questions.  The second is that errors of judgment are not a solid foundation for a legal malpractice case reported in the Michigan Legal Malpractice Blog.

"Plaintiff appealed the grant of summary disposition in favor of defendant Peters on plaintiff’s malpractice claims. Those claims arose from a matter involving a property dispute between Plaintiff and Cvetko Zdravovski pertaining to an alleged encroachment of Plaintiff’s building onto a property owned by Zdravovski (the "underlying litigation"). Peters filed a motion for summary disposition on plaintiff’s behalf in the underlying litigation, which was granted. On appeal, the trial court’s ruling was reversed.
Plaintiff appealed the grant of summary disposition in favor of defendant Peters on plaintiff’s malpractice claims. Those claims arose from a matter involving a property dispute between Plaintiff and Cvetko Zdravovski pertaining to an alleged encroachment of Plaintiff’s building onto a property owned by Zdravovski (the "underlying litigation"). Peters filed a motion for summary disposition on plaintiff’s behalf in the underlying litigation, which was granted. On appeal, the trial court’s ruling was reversed.
Moreover, an appellate attorney’s decision pertaining to which issues to raise is a matter of judgment and generally does not comprise grounds for claiming malpractice if the attorney acts in good faith and exercises reasonable care. Simko v Blake, 448 Mich 648, 658; 532 NW2d 842 (1995). An appellate attorney is not required to raise every claim of arguable legal merit in order to be an effective counsel. People v Reed, 449 Mich 375, 382; 535 NW2d 496 (1995). "

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.