This case, in which DP represented AmBase Corp. involved litigation in a tax matter.  AmBase sued DP on the theory that it never owed taxes, and DP failed to represent it carefully.  Supreme Court, New York County dismissed the case, the AD 1 affirmed, the Court of Appeals granted leave to appeal, and then affirmed,  Joel Stashenko of Law Com writes:

"Davis Polk was retained in 1992 to represent AmBase in a dispute over about $20 million in federal withholding taxes the Internal Revenue Service sought from the company for 1979 through 1985. In May 2001, the U.S. Tax Court ruled that AmBase owed none of the money sought by the IRS.

Though it won the tax case, AmBase balked when Davis Polk submitted a bill for a $1,424,104 "success fee" that was provided for in the retainer agreement between the company and the firm. The fee was calculated at 150 percent of Davis Polk’s billed time, subject to a $2 million cap. AmBase filed a legal malpractice claim and sought to have Davis Polk return previously paid legal fees.

It contended that Davis Polk should have informed the company sooner that it did not appear AmBase would be liable for any of the taxes sought by the IRS. AmBase argued that its financial condition was weakened, and its economic opportunities were limited, because it had to carry a large loss reserve for years on the possibility that it could lose the tax case.

Both Manhattan Supreme Court Justice Louis B. York and the Appellate Division, 1st Department, in AmBase Corporation v. Davis Polk & Wardwell, 30 A.D. 3d 171, 172 (2006), dismissed the complaint. Both lower courts, like the Court of Appeals on Thursday, found AmBase’s contention that it suffered from the lack of earlier notice it was probably off the hook for the tax bill "purely speculative" and an insufficient basis for a legal malpractice claim.

In AmBase Corp. v. Davis Polk & Wardwell, 51, Judge Carmen Beauchamp Ciparick wrote Thursday that Davis Polk "exercised the ordinary reasonable skill and knowledge commonly possessed by a member of a legal profession" as established under McCoy v. Feinman, 99 N.Y. 2d 295, 301-302 (2002). "

From the W Va Record: "CHARLESTON – A Kanawha County attorney is being sued by his former clients who claim he failed to file their lawsuit within the statute of limitations period.

Dayton Price and Suzan Price named Stephen P. Swisher as defendant in a lawsuit filed April 11 in Kanawha Circuit Court.

The Prices were married at the time, but are currently separated.

According to the suit, Swisher was retained by the Prices after Dayton Price was in an accident at the Lowe’s store in Nitro on April 15, 2003.

"Despite being cognizant of the date of Mr. Price’s injury, (Swisher) failed to effectively preserve and/or pursue plaintiffs’ underlying claims by filing a civil action for such claims within the applicable statute of limitations period," the suit states.

The Prices claims Swisher did not file the suit in an attempt to conceal or erase the error to further their detriment, the suit says.

From Law Com:

"Popular belief, at least in medical communities, holds that juries in medical malpractice cases tend to side with plaintiffs, even where the case against a doctor is a weak one.

But jurors actually tend to believe doctors more than they do plaintiffs, says a law professor who examined numerous data on medical malpractice litigation, including cases in New Jersey.

Philip Peters Jr., of the University of Missouri-Columbia School of Law, concluded that juries treat doctors favorably, "perhaps unfairly so," and are more likely than even fellow physicians to defer to a doctor’s opinion.

Peters found that most malpractice suits end in defense verdicts, and that the cases that go to trial tend to be the weakest ones, since those with strong evidence usually settle before trial.

In an examination of win rates, Peters found that 27 percent to 30 percent of filed medical malpractice suits end in a plaintiff’s verdict, the lowest success rate of any type of tort litigation.

Peters researched the data to test the assumption that juries lack capacity to evaluate medical malpractice suits fairly — an assumption implicit in legislation pending in Congress that would create specialized courts for such cases.

"Politicians and critics of jury performance should think twice before concluding that doctors will be treated more favorably in health courts," wrote Peters, whose report will be published in May in the Michigan Law Review. "

Legal and medical malpractice share roots, histories and are both about professional shortcomings.  Do they share this attribute too?

The end of the relationship can come from any number of reasons, but the end is reached either before or at the end of the underlying litigation.

<strong>Termination by client</strong>

It is the general rule in the United States, and the rule in New York that an attorney’s representation of a client may be terminated at any time by the client, either for good cause or for no cause. Analysis of a client’s termination of the attorney’s retention [hereinafter "termination"] starts with determination of whether the termination was for good cause or for no cause.

While the difference between "for cause, good cause, or cause" for termination and "no cause" has been endlessly debated, a "for cause" termination may be based upon misconduct which manifestly does not rise to the level of attorney malpractice.

<strong>Where the discharge is for
cause,the attorney has no
right to compensation</strong>

Where the discharge is for cause, the attorney has no right to compensation. This rule exists regardless of the terms of a retainer or other agreement between the attorney and the client. Traditional contract principles are not always applied to govern disputes between attorneys and clients.

Where the discharge is for cause, the attorney has no right to compensation or a retaining lien, regardless of pleading or stated defenses. "This rule is well calculated to promote public confidence in the members of an honorable profession whose relation to their clients is personal and confidential." "An attorney discharged for cause has no right to a fee or a retaining lien."

<strong>Where the discharge is without
cause, the attorney is limited
to recovering in quantum meruit</strong>

"When an attorney is discharged without cause, the attorney is entitled to recover compensation from the client measured by the fair and reasonable value of the services rendered whether that be more or less than the amount provided in the contract or retainer agreement." This rule, set forth by the Court of Appeals exists as a matter of law, whether pled or not, and whether set forth as an affirmative defense or not.

Where the discharge is without cause, the attorney is limited to recovering in quantum meruit the reasonable value of the services rendered. The courts clearly "possess the traditional authority to "supervise the charging of fees for legal services," pursuant to their "inherent and statutory power to regulate the practice of law."

<em>Quantum meruit</em> means "as much as he deserved, and is premised upon the finding of an implied promise to pay as much as he reasonable deserved." If it is determined that the termination was without cause, recovery should be determined to be an amount which "they reasonably deserved."

The Court of Appeals has found that where the discharge is without cause, as a matter of law, the attorney is limited to recovering the reasonable value of the services rendered, in quantum meruit.

"<strong>Cause" is not the
equivalent of "malpractice"</strong>

Good cause for termination is not the same as malpractice. Attorney malpractice, defined as a deviation from good and accepted practice, which proximately damaged the party, in which, but for the negligence of the attorney there would have been a different or better result is not the same as good cause for termination.

<strong>"Termination for cause"</strong> has arisen in many situations in which malpractice was not even discussed, much less claimed. For example, substantial delays in prosecuting the case or failing to bring the action until 2 days before the statute of limitations is sufficient; failure timely to obtain medical records is similarly sufficient .

Failure to retain an expert is similarly sufficient . "Employment [which] contravenes specific legal requirements is sufficient, as is abandonment of a case, ; or a conflict of interest; a refusal personally to try a case ; or a failure to disclose a settlement offer are all these examples misconduct which resulted in termination for cause, with no fee to the attorney. They do not amount to malpractice, however.

Termination for cause threshold lies well below any question of malpractice. As an example, Dagny Management Corp.,supra, is instructive. Friction between the client and the attorney grew over the management of the settlement funds, in which the attorneys frustrated, but did not destroy, the settlement. The Appellate Division determined that the "firm’s interference with the client’s right to settle constitutes misconduct sufficient to rise to a level warranting discharge for cause and forfeiture of its fee", citing De Luccia v. Village of Monroe, 180 AD2d 897 [3d Dept, 1992]

The difference flows logically from the question of damages is that in malpractice there is a positive claim for damages, over and above fee considerations from attorneys; in the question of termination for cause, there can be but a reduction of the fees paid, but no positive claim for damages. The heightened burden for malpractice logically accompanies the heightened possibility of damages.

It is the general rule in the United States, and New York that the client, either for good cause or for no cause, may terminate an attorney’s representation at any time. While the difference between "for cause" and "no cause" has been endlessly debated, a "for cause" termination may be based upon misconduct which does not rise to the level of attorney malpractice.

Where the discharge is for cause, the attorney has no right to compensation, regardless of the agreement between the attorney and the client. Traditional contract principles are not always applied to govern disputes between attorneys and clients. Where the discharge is for cause, the attorney has no right to compensation or a retaining lien. When discharged without good cause, compensation is measured by the fair and reasonable value of the services rendered whether that is more or less than the amount provided in the contract or retainer agreement. The attorney is limited to recovering in <em>quantum meruit</em>.

The courts possess authority to supervise fees for legal services. Quantum meruit means, "as much as he deserved, premised upon an implied promise to pay as much as reasonable. Put in short, quantum meruit is the fair and reasonable value of the services rendered, which may be more or less than the amount provided in the contract or retainer agreement. It is determined by taking into consideration the character of the services, the nature and importance of the litigation, the degree of responsibility, the amount or value involved, the length of time spent, the ability, skill and experience required, the character, qualifications and standing of the attorney and the results achieved. The recovery is not limited to the amount billed or the original terms of the retainer agreement, and may be less or more than the amount, which might have been recovered under a contingency fee.

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.

The City of New York, the Health & Hosptials Corporation, individual hospitals.  The ownership and place of service of a summons and complaint, as well as a notice of medical malpractice have long been a trap for the unwary.

NOTE:  The New York Law Journal reports that "starting April 30, 2007 service of process and notice of claims must be filed in Room 650 at 346 Broadway at the new HHC Office of Legal Affairs Medical Litigation Unit."

Don’t serve the notice or the summons in the wrong place!

Here is a Florida case whcih discusses the obligation between attorneys on a fee split, and the difference between an attorney split and a fee owed by the client.  Here, attorney 1 referred the case to attorney 2, and was then terminated.  Result?  Attorney 2 owes a specific percentage to Attorney 1.

"An appellate court has ruled that two Miami lawyers should split a contingency fee award based on their written fee agreement — even though one lawyer was fired by the client on the advice of the other lawyer before the case was won.

A 4th District Court of Appeal panel unanimously ruled April 2 that Scott Jay, who referred a legal malpractice case to Warren Trazenfeld, is entitled to 25 percent of the $218,000 fee Trazenfeld won as part of a $485,000 judgment in Broward Circuit Court in 2003.

Trazenfeld had argued that Jay was not entitled to any fees because he thought that when his client terminated Jay, the fee agreement was voided. Jay’s only claim, he said, was based on quantum meruit, meaning that payment should be based on the reasonable value of services provided. But Jay was not even entitled to that, Trazenfeld said, because Jay had not kept complete time records of his work.

Broward Circuit Judge Robert Lance Andrews agreed with Trazenfeld. But the 4th DCA panel rejected that argument. First, it said case precedent holds that the quantum meruit rule was inapplicable because it applies to the client’s obligation, not to co-counsel’s obligation.

"The written fee agreement provides that co-counsel are jointly owed the fee," the panel wrote. "And because the contract did not specify otherwise, the division of the fee would ordinarily be equal."

The panel also rejected Trazenfeld’s argument about the time records.

"Here, where the fee agreement effectually makes the division, it would serve no purpose to keep such records to establish the share of each," the panel wrote. "In this kind of joint representation, counsel may recognize from the beginning of their undertaking that the amount of time spent by either will not control the division. … As long as such a division is not unreasonable and does not violate the regulatory rules of the Florida Bar, there is no good reason why courts should resort to time records to divide the fee."

Read this:

"After a Preston Hollow, Texas, neighbor complained that his son’s pet donkey was a loud nuisance, Dallas lawyer C. Gregory Shamoun brought the donkey, known as Buddy, into a courtroom on Wednesday to attempt to prove to a jury that the burro’s not. When the suit went to trial on Wednesday, Buddy was the first witness.

Although Buddy clearly couldn’t testify, Shamoun says he wanted the jury to see that Buddy is his 7-year-old son’s well-behaved pet.

Cantrell’s attorney, Chandler, confirms that Buddy wasn’t noisy in the courtroom.

"The donkey did behave. It was a nice donkey, as donkeys go, I suppose," says Chandler, of Chandler & Chandler in Dallas.

Seider says he allowed Buddy to appear in court as a witness, because Cantrell had pleaded in his counterclaim that Buddy was a nuisance.

"He behaved perfectly. They led him in, and the jury observed him for a minute or two, and then he went peaceably away," Seider says, adding that Shamoun assured him that if Buddy made a mess in the courtroom, he would clean it up. "