Zibell v. County of Westchester, 10866/06 ;Decided: June 20, 2007 ;Justice William J. Giacomo
WESTCHESTER COUNTY Supreme Court .

Here, the attorney but not the client was sanctioned.  Will further problems follow?

From the decision: "If the credibility of court orders and the integrity of our judicial system are to be maintained, a litigant cannot ignore court orders with impunity." (Kihl v. Pfeffer, 94 N.Y.2d 118,123 [1999]).

In this personal injury action in which plaintiffs’ counsel has chosen to ignore a court order and has continually and wilfully refused to ensure that his clients’ pretrial discovery and pleading obligations are fully satisfied, the Court concludes that in addition to granting conditional relief as against plaintiffs, their counsel should be sanctioned by ordering his firm to pay counsel fees and motion costs to defendant County of Westchester (the County).

Having determined that Gertel has engaged in frivolous conduct with respect to the positions taken by him as to the Two Disputes, the only remaining question is what is an appropriate sanction. Here, as a direct result of Gertel’s frivolous conduct, the County has had to incur costs in the nature of the time spent by their counsel in attending conferences to determine the status of discovery in the lawsuit, at two of which the issue of Gertel’s frivolous positions was raised, and in filing the instant motion. Likewise, this Court has endured a waste of its limited resources in having to address a motion made necessary because Gertel simply refuses to acknowledge the complete absence of legal support for his views as to the Two Disputes, when the Court’s time and effort could be put to better use resolving the meritorious legal disputes of other litigants. And adverse consequences such as these are precisely the type that are intended to be addressed by Section 130-1.1(a) (see Levy v. Carol Management Corp., 260 A.D.2d 27,34 [1st Dept. 1999] ["The goals [of the sanction rules] include preventing the waste of judicial resources, and deterring vexatious litigation and dilatory or malicious litigation tactics"]). Under these circumstances, an appropriate sanction is warranted (see Drummond v. Drummond, 305 A.D.2d 450,451-452 [2d Dept. 2003], lv. denied 1 N.Y.3d 504 [2003] [Affirming imposition of sanction upon "finding that ‘(1) the attorney has abused the judicial process; (2) the attorney has caused the unnecessary expense of the court’s resources to respond to a wholly frivolous motion, one that is completely without merit in law and which cannot be supported by any reasonable argument; [and] (3) there is a need to prevent the attorney from engaging in further frivolous motion practice in this or any future matter.’"]).

Upon that determination, the Court grants the County’s motion to the extent that the law firm of Kagan & Gertel shall pay an award of counsel fees and motion filing costs to the County of Westchester in an amount to be determined upon the consideration of further written submissions (see Curcio v. J.P. Hogan Coring & Sawing Corp., supra, 303 A.D.2d, at 359 [Law Firm ordered to pay sanctions and costs where one of its attorneys had engaged in frivolous conduct]). By no later than July 3, 2007, the County shall submit a detailed billing statement reflecting the hours expended at the conferences on December 13, 2006 and January 31, 2007, and in the preparation of this motion, and the hourly pay rate of its counsel. Plaintiffs shall then have until July 13, 2007 to submit papers in response to the County’s submission. After considering the papers submitted by the parties, the Court shall determine the amount of the award to be paid by law firm of Kagan & Gerstel, which shall be set forth in a further order."

This case was widely reported, and we discussed it yesterday.  From the Decision in Ideal Steel Supply Corp. v. Beil, 20519/06 ,Decided: July 3, 2007 Justice Peter J. Kelly QUEENS COUNTY
Supreme Court

"On or about December 11, 2001, plaintiff Ideal Steel Supply Corp. retained defendant the law firm of Ross and Hardies, LLP (R&H), in contemplation of legal action against National Steel Supply, Inc., a competitor. Both Ideal and National operate stores in Queens and the Bronx, and Ideal asserts that wrongful action by its competitor cost it approximately $10,000,000. Ideal signed a retainer agreement with defendant R&H, the predecessor of defendant McGuire Woods LLP (MW) which stated, inter alia, that defendant Marshall Beil (Beil) would provide representation at the rate of $400.00 per hour. Ideal allegedly paid the defendants approximately $1,000,000 in legal fees.

Plaintiff began this action for, inter alia, legal malpractice on September 19, 2006, alleging that the defendants (1) "[u]nilaterally chose to pursue unique and novel claims in their litigation of the matter, when an expedited recovery could have been obtained pursuant to other causes of action . . . ", (2) "[f]ailed and refused to pursue other bona fide claims, by ignoring relevant case law and Facts", (3) failed to prevent costs and expenses from rising above a reasonable level, (4) made decisions that resulted in unnecessarily high fees, costs, and expenses, (5) increased hourly fees without the prior consent of the client, (6) engaged in dilatory and wasteful litigation conduct, (7) mismanaged the work of experts and litigation support consultants, (8) charged the plaintiff for resources not actually needed, and (9) violated the attorney client relationship, by, for example, revealing strategy to the adversary. The plaintiff’s attorney asserts that "[e]ssentially, the mismanagement of the federal litigation and pursuit of inappropriate claims under the civil RICO Act were part of a scheme by the defendants to bill exorbitant legal fees and costs and exclusively pursue those claims that defendant Beil found intellectually novel

Turning to the third cause of action for legal malpractice, two distinct prongs are discernable. The first pertains to the selection of only a RICO cause of action for prosecution and the second pertains to mismanagement of the RICO cause of action itself. Regarding the selection of only a RICO cause of action for prosecution, plaintiff Ideal did not adequately plead that the defendants failed to exercise the degree of skill and care commonly possessed by a member of the legal community (See, Hwang v. Bierman, 206 AD2d 360). "An attorney has broad discretion concerning . . . the theories to plead . . . " (4 Mallen & Smith, Legal Malpractice [2007 Ed], §30.8; see, Patterson v. Powell, 31 Misc 250 [AT], affd 56 App Div 624), and he is not subject to a "rule of infallibility, but is responsible to his client only for those mistakes as a pleader which indicate a lack on his part of the attainments and diligence commonly possessed and exercised by legal practitioners". (Rapuzzi v. Stetson, 160 App Div 150, 157). Although there may be several alternatives, the selection of one of many reasonable defenses or causes of action does not constitute malpractice (See, Hwang v. Bierman, supra).

In view of the history of the Anza litigation, particularly the decision rendered by the Second Circuit Court of Appeals, plaintiff Ideal cannot adequately establish that the selection of a RICO cause of action for prosecution against National was unreasonable. The "selection of one among several reasonable courses of action does not constitute malpractice". (Rosner v. Paley, 65 NY2d 736, 738; see, Dimond v. Kazmierczuk & McGrath, 15 AD3d 526; Holschauer v. Fisher, 5 AD3d 553). The court also notes that plaintiff Ideal’s complaint and opposition papers only conclusively allege that other causes of action were available; conclusory and speculative allegations do not support a cause of action for legal malpractice (See, Holschauer v. Fisher, supra; Pellegrino v. File, 291 AD2d 60).

Additionally, even if the selection of a RICO claim involved an error in judgment, such an error does not amount to legal malpractice (See, Rosner v. Paley, supra; Hand v. Silberman, 15 AD3d 167; Alter & Alter v. Cannella, 284 AD2d 138). The Anza litigation presented novel issues from its inception that ultimately had to be decided by the United States Supreme Court. Attorneys "cannot be held liable for exercising their professional judgment on a question that was not elementary or conclusively settled by authority . . . " (Town of North Hempstead v. Winston & Strawn, LLP, 28 AD3d 746, 748; see, Parksville Mobile Modular, Inc. v. Fabricant, 73 AD2d 595; Byrnes v. Palmer, 18 App Div 1, affd 160 NY 699). In sum, the recommendation by the defendants that plaintiff Ideal pursue certain litigation against National did not, under all of the circumstances, rise to the level of malpractice (See, Boulanger, Hicks, Stein & Churchill, P.C. v. Jacobs, 235 AD2d 353).

In the case at bar, the plaintiff’s allegations regarding increased expenses resulting from the defendants’ alleged mismanagement of the RICO claim are sufficient to survive a mere CPLR 3211(a) (7) motion. Whether the plaintiff’s case can withstand a motion for summary judgment is a matter not taken into consideration here (See, Shaya B. Pacific, LLC v. Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, supra)."
".

Here is a cross-border story about a Walgreen store, the Mass Land Court, legal malpractice, and discipline of attorneys.

"The state agency that oversees lawyers has concluded that there is insufficient evidence to discipline James P. Killoran for advice he offered and an emphatic promise he made during a 1999 Town Meeting, actions that paved the way for a controversial Walgreens drug store at Buffinton and West County streets.
The company developing the Walgreens store, the Richmond Company, has sued Killoran for legal malpractice.

Richmond alleges that when it hired Killoran, he failed to inform the company of two issues surrounding that land, issues that have sent the case to Massachusetts Land Court for a lengthy — and expensive — trial.

Richmond alleges that the omissions have cost it in excess of $250,000 in development expenses. "

Plaintiff attorney was retained by defendant Chemipal Company, and [unsuccessfully ?] tried a case for them.  Fredericks sued Chemipal Company, who then brought in appellate attorney Nathan Dershowitz. Result?  Lawyer loses, Chemipal Company wins, third-party legal malpractice case against Dershowitz  dismissed.   Fredericks v. Chemipal Ltd., 06 Civ. 966
Decided: July 6, 2007 District Judge Gerard E. Lynch U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

This three-party litigation began when plaintiff trial attorney Barry I. Fredericks ("Fredericks") sued for non-payment of what he claimed was a contingent fee owed to him by his former client, defendant Chemipal, Ltd. ("Chemipal"). Chemipal, in turn, impled its appellate attorney, Nathan Z. Dershowitz ("Dershowitz"), and his firm, Dershowitz, Eiger, & Adelson, P.C. ("DEA"), charging them with malpractice and breach of contract. In an Opinion and Order dated May 3, 2007, the Court granted Chemipal’s motion for summary judgment on the grounds that the ambiguous fee agreement was to be construed in favor of the client. This rendered the third-party action moot.

Fredericks now moves for reconsideration of the May 3 Opinion and Order, and for leave to amend his complaint to add a claim for quantum meruit recovery for services allegedly performed after the period covered by the fee agreement. The motions will be denied. "
"

Attorney Eleanor Capogrosso is the subject of a decision of Justice Debra James, reported in today’s NYLJ.  Rarely are litigants "enjoined" from bringing law suits without prior permission of the court, but this attorney apparently went too far.  "After filing 16 lawsuits on her own behalf – eight pro se and eight using seven various law firms – a Manhattan solo practitioner has been barred from initiating litigation as a party-plaintiff.

In throwing out Eleanor Capogrosso’s legal malpractice action against the attorney she hired to litigate a medical malpractice claim, Manhattan Supreme Court Justice Debra A. James (See Profile) also issued an order requiring Ms. Capogrosso to receive approval from an administrative judge before filing future actions or motions on her own behalf.

"Though a review of the record shows that plaintiff has flirted with placing her own license to practice law in jeopardy, of more moment is her pattern of commencing frivolous and repetitious actions," Justice James wrote in Capogrosso v. Kansas, 112291/06. "Based on a pattern of vexatious conduct and repetitive litigation and proceedings brought by plaintiff . . . this court grants a protective order prohibiting plaintiff from initiating any further litigation as party plaintiff without prior approval."

"Justice James cited Ms. Capogrosso’s challenges to "the integrity of at least three judges" – including Justice James – and a 2003 decision, Capogrosso v. Hospital for Special Surgery, 112075/02, in which Supreme Court Justice Eileen Bransten (See Profile) stated that "Capogrosso narrowly escapes sanctions this time but hopefully will nonetheless learn that she must follow court orders."

The NYLJ reports:

"Former Supreme Court Justice Lawrence I. Horowitz used his status as a judge to seek preferential police treatment for his girlfriend and to have authorities investigate the woman’s estranged husband, the state Commission on Judicial Conduct said yesterday.

The commission announced that Mr. Horowitz, who resigned on June 20, has signed a stipulation acknowledging that he could not defend himself against the disciplinary charges. He also agreed not to serve again as a judge or judicial hearing officer.

The commission contended that from the beginning of his tenure, Mr. Horowitz used Supreme Court stationery to write letters concerning personal or family business matters. The correspondence included letters to the schools his children attended to comment on school policies, to his house of worship to discuss his membership dues and to Verizon, contesting an unpaid bill of $14,707 for a phone number associated with his former law practice, according to the commission.

Mr. Horowitz also violated judicial canons beginning on Feb. 3, 2005, when his girlfriend, Michelle Nolan, was stopped for speeding in Yorktown, Westchester County, the commission charged. A police computer check indicated Ms. Nolan’s estranged husband, Christopher Angiello, had reported the vehicle stolen. Mr. Horowitz called the officer investigating Ms. Nolan’s case and identified himself as her friend and assuring him Ms. Nolan would respond to any traffic summonses, the commission charged. In the stipulation with the commission, Mr. Horowitz acknowledged his inability to defend himself against the charges in the complaint and that he has resigned from the court. While the commission has 120 days under Judiciary Law §47 to complete an investigation against judges if they resign, commission administrators and Mr. Horowitz agreed that all matters in his case should be closed.

The stipulation made reference to the commission’s notification to Mr. Horowitz that it was also investigating "additional allegations" against him unrelated to the 2006 complaint, but the nature of the other allegations was not revealed.

Several summonses were issued against Ms. Nolan, though the officer’s supervisor had recommended she be charged with a crime and that bail be set, the commission noted.

Mr. Horowitz then accompanied Ms. Nolan to the Yorktown police station to file a complaint against Mr. Angiello for having made a false report about the car. At that time, he identified himself as a judge and demanded that police investigate Mr. Angiello and his brother, Yorktown Police Officer Dominic Angiello, for allegedly working together to improperly report the vehicle as stolen.
In his verified answer, Mr. Horowitz noted that his misconduct came in his first 18 months as a "relatively new" judge. He also made reference to a series of personal setbacks dating from his 2003 campaign for Supreme Court, when his wife, Alexis Furer, began a bitterly contested divorce proceeding against him. "

Jackson Lewis LLP reports this Federal Case from the DC Circuit which holds that they are taxable.

"DC Circuit rules that damages for non-physical injury are subject to federal taxation
Jackson Lewis LLP

USA
July 13 2007

The U.S. Court of Appeals for the District of Columbia Circuit has resolved the constitutional question it first created concerning the taxability of damages for emotional distress or mental anguish and loss of reputation (non-physical personal injury). After reviewing the issue, the D.C. Circuit has held that such damages were taxable. Murphy v. IRS, No. 05-5139 (D.C. Cir. July 3, 2007). "

Plaintiff’s cause of action for negligent misrepresentation was dismissed as duplicitive in this 2nd Department case.  Iannucci v Kucker & Bruh, LLP ;2007 NY Slip Op 06026 ;Decided on July 10, 2007 ;Appellate Division, Second Department

"The Supreme Court should have granted those branches of the defendants’ motion which were, in effect, pursuant to CPLR 3211(a)(7) to dismiss the third and fourth causes of action for failure to state a cause of action. These causes of action, which alleged negligent misrepresentation and fraud, arise from the same facts as the legal malpractice cause of action alleged in the complaint, and do not allege distinct damages (see Town of N. Hempstead v Winston & Strawn, LLP, 28 AD3d 746, 749; Daniels v Lebit, 299 AD2d 310; Best v Law Firm of Queller & Fisher, 278 AD2d 441, 442). By contrast, the second and fifth causes of action seek a refund of alleged excess fees that were paid to the defendants. These causes of action invoke facts different from those alleged in the first cause of action, which seeks damages in a different amount for legal malpractice."