Here is a divorce legal malpractice legal fee case from the upper reaches of NJ society, complete with client meetings at the country club, promises to pay for the divorces of others, vindictive hiring of attorneys…you name it.

By way of background, on August 18, 1997, defendant retained plaintiff to represent him in a contentious divorce action already underway and involving substantial marital assets. At the time, defendant and his wife were separated and defendant was residing with Moran and her children, one of whom was the daughter of John Izmirlian, from whom Moran had already been divorced.

Defendant’s own matrimonial dispute was scheduled for trial on May 19, 1998, less than nine months after plaintiff was retained. Rather than proceed to trial, defendant and his former wife elected to engage in settlement negotiations and after two days, on May 21, 1998, reached an agreement. A final judgment of divorce was entered the next day, May 22nd, after a hearing in which the terms of the property settlement agreement (PSA) were placed on the record and the parties testified they entered into it knowingly, freely and competently.

Defendant also appeals from an October 28, 2005 order of final judgment holding him liable for fees and costs incurred by plaintiff on behalf of Moran. The genesis of that matter was in late January-early February, 1999 when, during the course of his own post-divorce litigation, defendant arranged a meeting with plaintiff and Moran to discuss plaintiff’s representation of Moran in a post-divorce action initiated by Moran’s former husband Izmirlian. Earlier, defendant had conveyed to plaintiff his opinions that Izmirlian was dishonest, concealing his income from both the Internal Revenue Service and Moran, and that he should be made to pay all the child support for the daughter then living with defendant and Moran. By all accounts, that meeting was held at a local country club and thereafter, on February 5, 1999, plaintiff and Moran signed a retainer agreement.

According to plaintiff, the meeting lasted two hours during which they talked almost exclusively about Moran’s legal situation. Defendant once again mentioned that Izmirlian was attempting to hide his finances and that he wanted to ensure Izmirlian paid his support obligations. Moran said she was unable to pay for plaintiff’s services and plaintiff herself knew that Moran had no steady means of supporting herself, that Izmirlian had no money, and that Moran had previously discharged a fee obligation of approximately $15,000 in bankruptcy proceedings. Consequently, plaintiff raised the issue of payment, asserting that litigation would be expensive and that she could not proceed without payment. According to plaintiff, defendant assured her that he was "willing to throw some money at this, so that that little prick pays to support his kid." With that assurance, plaintiff entered into a retainer agreement, and commenced preliminary work on the case, including arranging a meeting between the parties, which turned out to be unproductive.

The following day, May 23rd, defendant, apparently concerned for his former wife, agreed to renegotiate the PSA, however, these negotiations eventually proved unavailing. As a result, defendant’s former wife moved to set aside the PSA and a twenty-two day plenary hearing ensued in which she claimed she was under duress at the time. At the conclusion of the evidence, Judge Cass denied the application to set aside the PSA, finding it was fair and reasonable and not the product of duress or incompetence. "  Read the rest!

Anthony Lin reports in the NYLJ that Sidley Austin has avoided prosecution for tax shelter manipulation, even though one of its "expelled" attorneys is facing felony charges.  SA will pay $ 39 milliion in fines.

"Federal prosecutors have decided not to bring criminal charges against Chicago law firm Sidley Austin over its involvement with illegal tax shelters, though the law firm will pay a civil penalty of $39.4 million to the Internal Revenue Service.

In announcing the decision yesterday, U.S. Attorney Michael J. Garcia of the Southern District of New York distinguished the actions of the firm from that of former tax partner Raymond J. Ruble, who is already facing a criminal trial in Manhattan federal court.

Mr. Ruble, who was expelled from Sidley Austin in 2003, and several former employees of accounting firm KPMG are charged with creating and promoting tax shelters banned by the IRS, with Mr. Ruble also issuing hundreds of opinion letters meant to provide legal cover for the shelters. The IRS estimates 700 wealthy individuals and corporations relied on Sidley Austin opinions in purchasing illegal tax shelters.

In deciding not to prosecute the law firm, Mr. Garcia said his office took into account the fact that most of Mr. Ruble’s activities took place when he was a partner at New York’s Brown & Wood, with which the firm then known as Sidley & Austin merged in 2001. The former Sidley & Austin had never had a tax shelter practice and took steps at the time of the merger to rein in Mr. Ruble’s practice. Mr. Garcia said Mr. Ruble continued his practice only by misleading his partners at the merged firm. "

Here is a very interesting case from the 2d Department.  It involves one of the best and most known medical malpractice practitioners, who has more multi-million dollar verdicts and settlements than most of us have even read about.  This case teaches three lessons.

The first is that an infant’s compromise, a wrongful death compromise or other judicially decided award of legal fees virtually kills any legal malpractice claim.

The second is that it is probably always better to communicate with your clients over settlement demands in writing.  Here there was an offer of $ 1 million to settle, which was turned down, ending in a verdict of $ 350,000.  Client admitted, kind of, that she knew of offer, perhaps…but called it a "settlement value" rather than an offer.

Third lesson, well known to all, is don’t ask a question without either knowing what answer will be given, or prepping the witness with an appropriate answer.  Here, plaintiff’s attorney asked what would have happened if the $1 million had been offered, and the client waffled.

Result?  Legal malpractice dismissed.

What an International Cast!  "Southern District of New York Judge Lewis Kaplan dismissed civil racketeering charges seeking millions in damages against Faith Zaman and Thomas William Derbyshire by the younger brother of the Sultan of Brunei — Duli Yang Teramat Mulia Paduka Seri Pengiran Digadong Sahibul Mal Pengiran Muda Haji Jefri Bolkiah, otherwise known as Prince Jefri — and companies he controls. Alleged frauds committed by an English husband-and-wife legal team were not enough to support a prince’s claim that his former advisers were engaged in a racketeering enterprise, a federal judge has ruled.

Prince Jefri had hired the barristers to serve as "principal legal advisors, strategists and confidantes" from May 2004 to November 2006.

But he claimed they abused his trust by selling a piece of the prince’s property in a "sham transaction" to an entity they owned, used his money to buy property for one of their own companies, faked documents to overstate Zaman’s compensation and hired her brother for an unnecessary job at New York’s Palace Hotel, which was owned by one of Prince Jefri’s companies.

Here a tax preparer was sued for not telling an "innocent spouse" about the danger of filing a joint return, when she could have filed an individual return and avoided a startling amount of liability.  After bankruptcy, wife sued and lost.

"Shortly before Ted’s death, Camille discovered that Ted had failed to pay the taxes. When attempting to sell the marital home, Camille learned that tax liens had been placed on the property to secure Ted’s business liability for federal withholding tax, interest and penalties. Camille ultimately fi led for bankruptcy and settled the federal and state tax liabilities. Camille then sued Crincoli and his fi rm for accounting malpractice, asserting that he had failed to advise her that, by fi ling a joint tax return, she could be exposed to personal liability for taxes, interest and penalties relating to her husband’s business – liabilities that she would not have borne had she fi led separately.

At trial, Camille’s accounting expert testifi ed that Crincoli had deviated from accepted accounting practices by failing to explain the risks of fi ling a joint return to both spouses. The expert conceded, however, that these “accepted practices” did not derive from standards set by the AICPA or the IRS, but rather were based upon his “personal” standards. In contrast, Crincoli’s expert testifi ed that Crincoli had acted properly and should not have been expected to investigate the accuracy of the information provided by the husband or to discover that the marital home was held in the wife’s name. The expert testifi ed further that it was not uncommon for one spouse to act as the agent for the other in communicating with a tax preparer.

After a four-day trial, the trial judge dismissed the complaint and entered judgment in the amount of $6,000 (the outstanding accounting fees) in favor of Crincoli. On appeal, the Appellate Division affi rmed the lower court’s ruling. The appeals court agreed with the trial court’s ruling that Camille’s expert was not credible, and that the standard of care set forth by Crincoli’s expert should govern. The appeals court also noted, that even if Crincoli had been negligent, that his negligence was not the proximate cause of Camille’s damages; she did not present any evidence that, had she been informed of the risks of fi ling jointly, she would have acted differently.

While both the trial and appeals courts ultimately sided with the tax preparer in Daunno, accountants and tax preparers should consider providing a standard written disclosure to their clients making clear that they are relying on the information supplied to them by the clients themselves and that they are undertaking no duty to conduct an independent investigation to confi rm the accuracy or completeness of that information. "

Dismissal under CPLR 3216, for a failure to provide discovery, or to follow a court order of discovery has been generally thought to preclude the use of CPLR 205.  CPLR 205 is a "saving statute"  which allows plaintiff to start a second action within 6 months of the dismissal of the first, so long as it was not for certain reasons.  Here, in this case:

"CPLR 205(a) provides that

"[i]f an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff, or, if the plaintiff dies, and the cause of action survives, his or her executor or administrator, may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after the termination provided that the new action would have been timely commenced at the time of commencement of the prior action and that service upon defendant is effected within such six-month period."
While dismissal of an action for failure to comply with discovery orders has been held to be a dismissal for neglect to prosecute the action’ within the meaning of CPLR 205(a) (see Andrea v Arnone, Hedin, Casker, Kennedy & Drake, Architects & Landscape Architects, P.C. [Habiterra Assoc.], 5 NY3d 514, 518), here, the plaintiffs’ conduct did not rise to that level. "

There is a saying that bad cases make bad law.  We’ve always understood that proverb to mean that poorly argued or conceptualized cases affect the entire field of law.  Here is an example of the situation.  Pro-se defendant attorney in a legal malpractice case was served directly in hand by the attorney for plaintiff.  Why the attorney did not use a process server is beyond us.  Nevertheless, this appellate division case is now law, and must be digested.

"The advocate-witness disqualification rules contained in the Code of Professional Responsibility provide guidance, not binding authority, for courts in determining whether a party’s [counsel], at its adversary’s instance, should be disqualified during litigation" (S & S Hotel Ventures Ltd. Partnership v 777 S. H. Corp., 69 NY2d 437, 440). At bar, the hearing court providently exercised its discretion in permitting the plaintiffs’ counsel to testify at a hearing that he personally delivered the summons and complaint, by hand, to the defendant Ronald J. Chisena. Where, as here, there is no necessity for the plaintiffs’ counsel to be called as a witness at trial, no violation of the advocate-witness rule exists (see Code of Professional Responsibility DR 5-102[c][22 NYCRR 1200.21(c)]; S & S Hotel Ventures Ltd. Partnership v 777 S. H. Corp., supra at 443). "

Attorney Malpractice is a litigation form with many highly sophisticated rules.  Attorneys make up the rules of attorney litigation.  Legal malpractice is subject to very stern analysis by judges.  Here is an article from Texas which sets forth rules on specificity there.

"In a further illustration of the need to avoid conclusory affidavits in summary judgment proceedings, a legal malpractice claim foundered when an affidavit concerning damages was found to be conclusory in United Genesis Corp. v. Brown, No. 04-06-00355-CV, 2007 WL 1345372 (Tex. App.—San Antonio May 9, 2007). "

Roger D. Blackwell is a former marketing professor in college, who did very well for himself.  However, he was convicted of insider trading when a "federal jury in Columbus found that Blackwell, a member of Worthington Foods Inc.’s board of directors, illegally tipped off friends and relatives in 1999 to Kellogg Co.’s secret pending purchase of Worthington Foods, and then covered it up"  Now, in this story, a " Minnesota insurer wants former marketing professor Roger D. Blackwell to return $2.6 million the company gave him to help pay for his legal defense against federal insider-trading charges."

What is even more astounding is that he paid $6 million to his criminal defense attorneys.  How does a professor even contemplate such a big fee?  Better yet, the law firm is now suing him for an additional $ 2.7 million which they say he owes! "The former consumer-behavior professor said in a legal malpractice suit filed last year that he paid nearly $6 million to his previous trial attorney, Thomas O. Gorman, and law firm Porter, Wright, Morris & Arthur.

Blackwell said Gorman and Porter, Wright, based in Columbus, misled him about his defense, did a poor job handling his criminal trial and charged him excessive fees.

Gorman and Porter, Wright denied Blackwell’s claims and countersued for more than $2.7 million in allegedly unpaid fees and expenses.

After Blackwell was convicted, he hired attorney William Wilkinson and law firm Thompson Hine for the appeals process, which was unsuccessful.

In addition to Blackwell’s six-year sentence, he was fined $1 million by U.S. District Judge James L. Graham. Blackwell also faces a potential $1 million judgment in a civil insider-trading complaint filed against him by the U.S. Securities and Exchange Commission.

It bills itself as "The Oldest Law Journal in the United States", and reports today on this legal malpractice dismissal in Pennsylvania.  Here, in an estate/inheritance legal malpractice, the case was dismissed on motion, and the appeal ran afoul of a Penn statute against vagueness.  What follows is a discussion of the statute:

"A Superior Court panel has affirmed the dismissal of a legal malpractice action brought against Fox Rothschild by two brothers who claimed the firm’s handling of a family will left their inheritance lighter than it should have been.

However, the appellate judges in Hess v. Fox Rothschild ruled that Philadelphia Common Pleas Judge Annette M. Rizzo had been wrong to reject the brothers’ appeal as too vaguely worded.

The case sheds light on a rare theme of the ongoing Rule 1925(b) saga.

Typically, state court judges have used that appellate procedural rule to bounce an appeal if the appellate statement was too long and/or raised too many issues."

But the rule also directed attorneys not to make their statements overly vague, and a number of appeals were quashed under that provision of the rule.

When the justices approved amendments to Rule 1925 earlier this month, they prospectively precluded judges from nixing an appeal solely because of the number of issues raised. That measure was likely in response to practitioners’ gripes that appeals in complex or high-stakes cases might necessarily involve dozens of issues.

But the high court also added new language to the rule that will permit civil litigation appellants to attach to their 1925(b) statements a preface explaining why the statement has been phrased in general terms if don’t believe they can "readily discern the basis" for trial judges’ decisions.