Banks routinely assign mortgages to each other.  That is one reason that FHA conforming mortgage and forms are prevalent.  The banks take in application fees, points, etc., and then sell blocks of mortgages to others, at a discount. 

Legal malpractice cases, even when arising from mortgages may not be similarly traded in Florida.  Here is a case in which an attorney discontinued an earlier foreclosure in order to start a new one.  This action violated the statute of limitations, and the bank ultimately lost.  However, as they had assigned the mortgage to yet another bank, the successor bank not only lost on the foreclosure, but were unable to sue the attorney.

We believe that they really play hardball in New Jersey, putting NY attorneys to shame.  Here, sanctions and attorney fees seem to be the apex of unsocial behavior, and once in a while, a fist fight.  But New Jersey!!!

This story illustrates how far they would go. "A federal judge denounced lawyers at Hackensack’s Cole, Schotz, Meisel, Forman & Leonard on Thursday, and threatened them with sanctions, for trying to meddle with an opposing attorney’s personal finances.

Two Cole, Schotz partners admitted to U.S. District Judge Harold Ackerman that an associate asked a bank counsel whether a client of the firm could buy mortgages the bank held on property of litigation foe Gregg Trautmann of Rockaway.

Such purchases would have made Cole, Schotz’s client – a lender defending itself against six suits brought by Trautmann – holder of the mortgages on his home and office.

Nothing in the record explained what the Cole, Schotz associate, or the partner who authorized the inquiry, had in mind.

But Ackerman said he reached the "evil conclusion" that the goal was to control Trautmann’s mortgages so Cole, Schotz’s client, Kennedy Funding Inc. of Hackensack, could "put the squeeze, as we use that colloquial phrase, on him and on the litigation."

In the Creditanstalt Inv. Bank AG v Chadbourne & Parke LLP , 2007 NYSlipOp 02794 .April 3, 2007 ,
Appellate Division, First Department  case, the AD1 allowed an invasion of the attorney-client privilege regarding discussions plaintiff had with other law firms about the problem they sued over.

Although the dissent makes a good case for continued privilege, the majority simply did away with any attorney client secrecy.  Follow for the inevitable Court of Appeals case.

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.

The first element of a relationship between the client and the professional was previously discussed. The second element, deviation, is shown by evidence, not necessarily expert, which shows that the acts of the professional fell so below the good and accepted practice of law in New York, that a jury would be permitted to find that the acts below standard.

Expert testimony is necessary when the deviation is subtle; an example could be the failure to supply an affidavit of merits to restore a case marked off calendar, the failure to respond to a CPLR 3216 notice, or failures in response to a motion for summary judgment. Expert testimony is not always necessary however. None is needed to demonstrate the deviation in failing to file within the statute of limitations. Bad outcome do not necessarily equal a deviation. Furthermore, questions of judgment of strategic choice cannot serve as the basis of malpractice. An attorney is permitted the reasonable choice of strategy, if supported by acceptable reasoning. The strategic choice must be reasonable both objectively and subjectively. The difference between strategic choice and mistake are subtle, and create the most difficult cases.

The third element of proximate cause encompasses both the typical analysis that arises in all negligence litigation and the additional element of "but for." The plaintiff must demonstrate not only that the deviation was a substantial cause of the poor outcome, but must additionally show that "but for" the deviation there would have been a different, better or more positive outcome. An example of this potential difficulty arises in an automobile accident. No matter how many deviations are shown, it may be that the maximum insurance for the other driver limits the recovery. If that is true, it will be impossible to show that "but for" the deviation, more than the policy limit was available and could have been recovered from the defendant.

Clients understood that a request for legal fees in Surrogate’s Court would preclude any legal malpractice case later.  Their claim was that they would have accepted a settlement offer, but their attorney assured them that they had a meritorious case.  Surrogate’s court then ruled against them in the will contest.  Attorney sought fees, they sued for legal malpractice.

The Court of Appeals Case, Leder v Spiegel,2007 NY Slip Op 05588, Decided on June 28, 2007, Court of Appeals  holds:

"The order of the Appellate Division should be affirmed, with costs.

After unsuccessfully representing two objectants at a will contest trial in Surrogate’s Court, respondent attorney petitioned the same court for legal fees. In their answer, objectants counterclaimed for legal malpractice, arguing that, but for respondent’s negligent representation, they would have accepted a $108,000 settlement. In particular, objectants cited respondent’s failure to anticipate that Surrogate’s Court would not admit certain evidence. Respondent moved pursuant to CPLR 3211(a)(7) for an order dismissing objectants’ [*2]counterclaim.

Surrogate’s Court dismissed objectants’ counterclaim and awarded respondent her legal fees. In a 3-2 decision, the Appellate Division affirmed. Objectants appeal as of right, and we now affirm.

"In order to sustain a claim for legal malpractice, a plaintiff must establish both that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession which results in actual damages to a plaintiff, and that the plaintiff would have succeeded on the merits of the underlying action ‘but for’ the attorney’s negligence"

(AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428 [2007] [internal citations omitted]). Under the circumstances of this case, objectants’ allegation regarding respondent’s failure to anticipate the court’s evidentiary rulings — even if accepted as true — does not establish negligence. Thus, objectants did not allege a prima face case of legal malpractice and the courts below properly dismissed their counterclaim. Objectants’ remaining contentions also lack merit. "

TheLA Times reports on a proposed legal malpractice insurance disclosure rule in California.

"California lawyers will have to tell their clients whether they carry malpractice insurance under a proposed rule that opponents say could add to the costs of going to court.

About 20% of the state’s 150,000 lawyers don’t have malpractice coverage, according to Jim Towery, chairman of the State Bar of California task force that drafted the proposed rule. Towery and others who support the rule said most clients want to know whether a prospective lawyer has insurance, or a history of complaints, but many fail to ask.

Opponents fear that requiring disclosure might effectively force all lawyers to buy such insurance and pass on the costs — up to $9,000 a year — to clients.

Most of those who lack the insurance are sole practitioners who represent accident or consumer fraud victims. "

The Blog, LA BizObserved reports that:

"Malpractice disclosure: A task force of the State Bar of California is proposing that lawyers be required to tell their clients whether they carry malpractice insurance (about 20 percent of the state’s 150,000 lawyers don’t, many of them sole practitioners). Opponents say the the requirement could force all lawyers to buy such insurance and pass on the costs to clients. Legal malpractice cases worth $2 million or more jumped 60 percent between 1996 and 2003. Most legal malpractice claims result from personal injury and real estate cases, according to the study, and close to 70 percent of these suits were lodged against small firms. The proposed rule would have to be approved by the State Bar’s Board of Governors and the California Supreme Court. (LAT) "

Attorney 1 starts to look at a case for client, files a retainer statement and a month later is told to stop work.  Attorney 2 starts to work on the case, but we do not know what happened after that, except that the case settled for $ 450,000. Michael B. Miller PC v. Joel J. Turney LLC, 9654-2007
Decided: May 29, 2007 ,Justice Sandra L. Sgroi ,SUFFOLK COUNTY ,Supreme Court

Attorney 1 then files papers against attorney 2.  Mistakes: 

1.  They used the same index number as the underlying case;

2.  No summons and complaint was filed by attorney 1 versus attoren 2;

3.  Attorney 1 didn’t file a summons or complaint in the underlying case, and probably will not be able to recover legal fees.

4. Both attorneys used affirmations even though they were parties.