From this weeks advance sheets:

"Although plaintiff denominated the motion denied by the May 2006 order as one to vacate a default, the dismissal order was not rendered on default within the meaning of CPLR 5015(a)(1), since plaintiff had appeared in opposition to the motions and cross motions to dismiss. Given that plaintiff’s motion to vacate was based on evidence that had not previously been submitted to the IAS court, we exercise our discretion, in the interest of justice, to deem that motion to have sought renewal of the dismissal order pursuant to CPLR 2221(e) (see Tishman Constr. Corp. of New York v City of New York, 280 AD2d 374, 376-377 [2001]), and, upon review, we find that the new evidence warranted reinstatement of the complaint. That evidence, including the affirmation of a psychiatrist and the affidavit of a licensed clinical social worker, establishes that plaintiff’s former attorney failed to comply with the October 31, 2005 discovery deadline due to panic and anxiety attacks he was suffering as the result of a diagnosed mental illness, combined with other difficulties in functioning caused by a change in the dosage of his psychiatric medication. Since it is undisputed that plaintiff has now provided all required disclosure, and there has been no showing that reinstatement of the complaint will cause any cognizable prejudice to defendants, we decline to impose on plaintiff the drastic penalty of dismissal of the complaint as a sanction for the non-volitional failures of its former attorney related to his mental illness (see Jiminez v St. John’s Riverside Hosp., 161 AD2d 497 [1990]). "

"Settlement" was binding after attorney agreed to settle case in court, with City of NY.  The evidence?  Not a transcript, not the client in open court; it was a marking on the "court card" of "settled" made by the clerk. 

This is an expansion of the "settlement in open court" doctrine, which holds that there must be either a writing or an acknowledgement of settlement in open court, on the record.  Here plaintiff wanted to try the case, but was bound by her attorney’s apparent although exceeded authority.

"Plaintiff implicitly ratified the settlement by making no formal objection for nearly seven months after being told about it (Clark v Bristol-Myers Squibb & Co., 306 AD2d 82, 85 [2003]). Furthermore, the requirements of CPLR 2104 were met when, following the conference and counsel’s acceptance of the settlement, the court clerk updated the court card to read "settled before trial" and marked the case "disposed" in the court’s records (Popovic v New York City Health & Hosps. Corp., 180 AD2d 493 [1992]). "

Victoria Kremen suffered unnecessary bilateral mastectomomy, and then legal malpractice, and then bankruptcy, Law.com reports:

"A New York state judge has permitted a legal malpractice suit to proceed against plaintiffs lawyers who allegedly failed to seek a bankruptcy extension for their client, causing her medical malpractice case to be thrown out as untimely.

The article does not make this clear:  why legal malpractice?  A medical malpractice case was brought 1 month after retaining Benedict Morelli’s law firm, and took place during/around the bankruptcy.  Is the legal malpractice for allowing the case to be dismissed?

In denying a motion to dismiss the action against law firms Morelli Ratner and Schapiro & Reich, Manhattan Supreme Court Justice Emily Jane Goodman said a combination of equitable estoppel and the U.S. Bankruptcy Code’s tolling of statutes of limitations might have saved the underlying lawsuit, even though the medical malpractice at issue took place over a decade ago. "

"The statute of limitations for medical malpractice cases in New York is 2 1/2 years following the malpractice. The trial court dismissed the suit as untimely and rejected the plaintiff’s argument that the misdiagnosis had been fraudulently concealed from her. The Appellate Division, 1st Department, upheld the ruling in 2005, finding that Kremen’s 25-month delay in bringing an action even after learning of the alleged malpractice in 1999 was "unreasonable as a matter of law."

But Justice Goodman, in Kremen v. Morelli & Associates, 101739/06, said the delay may not have been unreasonable in light of §108 (a) of the Bankruptcy Code, which grants debtors an additional two years to file claims that "applicable nonbankruptcy" laws would otherwise require them to file in the midst of bankruptcy.

The judge said New York’s laws on the tolling of statute of limitations law constituted the type of non-bankruptcy law contemplated in the Bankruptcy Code. "

We’ll report the case when it is published.

This Appellate Division Case points up how the court  treats just one too many mistakes.  Default, followed by failure to oppose a motion followed by….  The court uses the phrase "pattern of willful default.

"To vacate the order dated February 18, 2005, entered upon the plaintiffs’ default in opposing the appellants’ motion pursuant to CPLR 3042 and 3126 to dismiss the complaint insofar as asserted against them, the plaintiffs were required to demonstrate both a reasonable excuse for their default and a meritorious cause of action (see CPLR 5015[a][1]; Watson v New York City Tr. Auth., 38 AD3d 532; Echevarria v Waters, 8 AD3d 330, 331). Although the Court may, in its [*2]discretion, accept law office failure as a reasonable excuse (see CPLR 2005; Putney v Pearlman, 203 AD2d 333), "’a pattern of willful default and neglect’ should not be excused" (Roussodimou v Zafiriadis, 238 AD2d 568, 569, quoting Gannon v Johnson Scale Co., 189 AD2d 1052). Here, the plaintiffs’ attorney’s failure to respond to the demand for a bill of particulars, to timely comply with the preliminary conference order dated September 14, 2004, and to oppose the appellants’ motion to dismiss the complaint, and his further one-year delay in moving to vacate the order dated February 18, 2005, constituted a pattern of willful default and neglect that cannot be excused (see Diamond v Vitucci, 36 AD3d 650; Amato v Fast Repair, Inc., 15 AD3d 429, 430; Santiago v New York City Health & Hosps. Corp., 10 AD3d 393, 394). Under these circumstances, the Supreme Court improvidently exercised its discretion in granting the plaintiffs’ motion to vacate the order dated February 18, 2005, entered upon their default. "

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.

In this NJ case, [which the NJLJ calls "Bad Bedside Manner"], client has car accident. We’ll call him driver 1.  Relative of driver 2 comes to hospital room and gets hired as attorney,  He doesn’t tell driver 1 that he is related to Driver 2.

Here is the rest of the case.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1862-05T21862-05T2
MIGUEL HERRERA, Plaintiff-Appellant,
v.
JEFFREY HARK, ESQUIRE,
and HARK & HARK, P.C.,

"These are the salient facts. On or about March 1, 2002, Herrera was the operator of a motor vehicle involved in a collision with a vehicle owned and operated by Vernon Roth, the grandfather of Jeffrey Hark’s wife. Herrera was injured and hospitalized. During Herrera’s hospitalization, and without his authorization, Hark obtained access to Herrera’s hospital room. Despite the fact that Herrera was in severe pain and under the influence of pain medication, Hark induced Herrera to sign a contingency fee agreement. Hark disclosed neither his conflict of interest nor that his conduct in soliciting to be retained under these circumstances was in violation of the Rules of Professional Conduct. RPC 7.3(b)(1); see In re Pajerowski, 156 N.J. 5, 515 (1998) (finding a violation to send runner to accident victims hospital rooms shortly after accident). "

"It is well-settled that a legal malpractice claim is a negligence action brought against an attorney. Kranz v. Tiger, 390 N.J. Super. 135, 147 (App. Div. 2007); Sommers v. McKinney, 287 N.J. Super. 1, 9 (App. Div. 1996). In order to establish legal malpractice, the plaintiff must demonstrate: 1) the existence of an attorney-client relationship creating a duty of care upon the attorney; 2) that the attorney breached the duty owed; 3) that the breach was the proximate cause of any damages sustained; and 4) that actual damages were incurred. Jerista v. Murray, 185 N.J. 175, 190-191 (2005); Conklin v. Hannoch Weisman, 145 N.J. 395, 416 (1996). The law imposes upon the attorney a standard of care to ensure adequate legal needs of the client. Lamb v. Barbour, 188 N.J. Super. 6, 12 (App. Div. 1982), certif. denied, 93 N.J. 297 (1983); Lovett v. Estate of Lovett, 250 N.J. Super. 79, 88 (Ch. Div. 1991). The claim is based on alleged negligence in the practice of law because the attorney did not comply with the requisite standard of care. McGrogan v. Till, 167 N.J. 414, 425 (2001); Carney v. Finn, 145 N.J. Super. 234, 236 (App. Div. 1976).

It is part of the claimant’s burden to show that the attorney’s negligence proximately caused damages. Davin, L.L.C. v. Daham, 329 N.J. Super. 54, 72 (App. Div. 2000); Lamb, supra, 188 N.J. Super. at 12. That is to say, the negligence of the lawyer must have been a substantial factor in bringing about the loss and in addition some harm must have been foreseeable. Conklin, supra, 145 N.J. at 418-22.

Usually, a legal malpractice trial follows the "trial within a trial" format because the claimant has to show what result would have been obtained, but for the attorney’s negligence. Garcia v. Kozlov, Seaton, Romanini & Brooks, P.C., 179 N.J. 343, 358, petition denied, 182 N.J. 151 (2004). At such a trial, "plaintiff has the burden of proving by a preponderance of the evidence that (1) he would have recovered a judgment in the action against the main defendant, (2) the amount of that judgment, and (3) the degree of collectability of such judgment." Garcia, supra, 179 N.J. at 358 (quoting Hoppe v. Ranzini, 158 N.J. Super. 158, 165 (App. Div. 1978)). The plaintiff’s damages are the difference between the result sought and the actual result. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001); see Gautam v. De Luca, 215 N.J. Super. 388, 397, certif. denied, 109 N.J. 39 (1987) ("The measure of damages is ordinarily the amount that the client would have received but for his attorney’s negligence.").

Here, Herrera has not shown how he would have obtained a better result than the $95,000 settlement, even if Hark had disclosed his conflict of interest. In short, no showing of damages has been made.

We are still concerned by the conduct alleged here; however, disciplinary code violations are not designed to establish standards for civil liability, but rather to provide standards of professional conduct for which lawyers are to be disciplined. Baxt v. Liloia, 155 N.J. 190, 200 (1998). Accordingly, a copy of this opinion will be sent to the Office of Attorney Ethics, for its review and further action if appropriate. "

Interview a represented client?  Wrong!  or perhaps Sometimes Wrong!  or perhaps something else.  Scott Greenfield writes about this evolving question today in his Simple Justice blog.  Making waves in criminal law, testing the limits.  The Tom Liotti story.

From today’s NYLJ by Anthony Lin:  Attorney loses case on summary judgment, and tells client that he is not obliged to handle appeal.  Client, chemical company, hires Nathan Dershowitz to handle appeal, which he does.  At appellate level, case settles for $ 250,000. 

Client pays Dershowitz a contingent fee, and original attorney sues client for his contingent fee.  Client inpleads Dershowitz on theory that he did not ascertain whether first attorney was due fees.

Result:  Attorney 1 gets no fee, Legal mal against Dershowitz dismissed.

 "A federal judge in Manhattan has ruled against a lawyer seeking to collect a contingent fee on a case he lost at the trial level but which his client settled after filing an appeal.

Lawyer Barry I. Fredericks represented Chemipal Ltd. in a 2003 suit against weight-loss company Slim-Fast, whose products Chemipal distributed in Israel. Israeli-based Chemipal, which agreed to pay Fredericks $40,000 and a 35 percent contingent fee, claimed Slim-Fast violated its contract with it by not providing adequate marketing and advertising support.

But a federal court in Delaware granted summary judgment to Slim-Fast. Fredericks declined to handle the appeal and Chemipal hired Nathan Z. Dershowitz of Dershowitz, Eiger & Adelson. After the appeal was filed, Chemipal accepted a $250,000 settlement offer.

Fredericks sued Chemipal last year, arguing that his contingent fee arrangement with the company applied to the settlement. But Southern District of New York Judge Gerard E. Lynch granted summary judgment to Chemipal last week, finding that, though Fredericks’ argument was plausible, New York law required an ambiguous retainer agreement to be read in favor of the client.

The agreement at issue specified the fees Fredericks would receive in the event of a successful result at the trial level. It also said Fredericks was not obligated to handle the appeal and his contingent fee would not be reduced by the costs necessary to defend a successful result on appeal. But the agreement was silent on the scenario that actually unfolded, with Chemipal losing at trial and recovering after its appeal.

Judge Lynch said Fredericks’ argument that the agreement limited his responsibility to the trial level but not his fee was "perfectly reasonable" and the parties would have been free to contract as such. But the judge said the agreement also was open to other interpretations.

"Chemipal’s argument that this was an unforeseen contingency, and that the agreement should be read as ending when the case was (temporarily) ‘lost’ is also not an impossible reading of the parties’ intentions," the judge wrote in Fredericks v. Chemipal, Ltd., 06 Civ. 966."