Attorney represented infant in a medical malpractice case.  Case was valued at $ 20 Million.  Just prior to trial, defendants offered $ 1 Million.  Attorney rejected, tried and lost the case.  Later, he asked the client for $ 160,000 in disbursements.  She refused.

Case then went on to a legal malpractice in which it was agreed that attorney had no paper proof that he communicated the offer.  Jury verdict for $1 million 

This blurb thanks toFish Law firm.

Personal injury awards are tax free.  Other awards are taxable.  Here is a question in the middle:  Is an award for mental anquish in a federal whistleblowing case taxable?  

" A federal appeals court ruled Tuesday that awards for mental anguish are taxable, which reversed what it said just 11 months ago. The decision came in the case of Marrita Murphy, who was awarded damages for emotional distress and loss of reputation after she complained to authorities of environmental hazards at a New York Air National Guard base in Syracuse.

The taxpayer’s situation "seems akin to an involuntary conversion of assets; she was forced to surrender some part of her mental health and reputation in return for monetary damages," said the court. Ms. Murphy intends to seek further review in the courts, said one of her lawyers"

In comparison to the prior article, you need not put the insurer on notice until and unless you reasonably know that there really is a claim against the attorney.  In another short subscription blurb:

"MADISON, Wis. – An insurer owes a duty to defend and indemnify its insured against claims of malpractice because the insured attorney did not have a basis to believe that his acts might reasonably be expected to be the basis of a legal malpractice claim against him before the inception of the insurance policy, a federal judge said June 13 (Continental Casualty Co. v. William A. Schembera, Schembera & Smith and Evan Zimmerman, NO. 07-048, W.D. Wisc.; 2007 U.S. Dist. LEXIS 43302). Full story on lexis.com "

Here is a short blurb from the subscription Meeley reporter on a case where the attorney failed to put the insurer on notice of a legal malpractice claim against him, even though he sent a letter to the insurer.

"ATLANTA – No coverage is available for a legal malpractice suit filed against an insured attorney because the insured’s letter informing the insurer of a dispute with a former client did not place the insurer on notice of a claim, the 11th Circuit U.S. Court of Appeals said June 8 (Clarendon National Insurance Co. v. Brad H. Muller, individually, and as trustee of the Corrine R. Muller Trust, No. 06-16184, 11th Cir.; 2007 U.S. App. LEXIS 13393). Full story on lexis.com "

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.