Medical malpractice trial lost with $217 Million verdict, which could have been settled within policy limits for $ 4 million leads to a legal malpractice by doctor versus attorney. This article tells us:

"Among the claims against their former lawyers was the fact their lawyers turned down settlement offers of $1,000,000.00 for one doctor and $3,000,000.00 for the other doctor. The doctors claim that the proposed settlements were never adequately explained to them. The doctors say that their attorneys failed to properly advise them, fraudulently concealed information, and failed to respond to settlement demands.

The doctors’ new lawyers who are suing their former malpractice defense lawyers state that the case should have never gone to trial, that it should have been settled, and claim that the doctors were "hung out to dry."

The malpractice case against the doctors seems clear. Their patient went to a hospital emergency room complaining of nausea, headache, dizziness, and double vision. The patient was essentially sent home five hours later with a painkiller prescription and a diagnosis of sinusitis. "

lthough the defendant doctors could not diagnose the condition, the patient in reality was having a stroke. He returned to the hospital with more severe symptoms the next morning, underwent surgery hours later to relieve brain swelling, and ended up in a coma for three months. When he awoke from the coma, he was permanently disabled. The patient, who was 50-years-old at the time was awarded $117,000,000.00 for economic damages, pain, and suffering. The doctors were then ordered to pay $100.1 million dollars in punitive damages. This was the largest jury verdict in Florida ever.

In the doctors’ suit against their former malpractice lawyers, they claim that the lawyers who were hired by their malpractice insurance company were protecting the interest of the insurance company and not theirs. One of the doctors said he was pressured by the lawyers to say that he always gave a patient a physical exam and a patient history even if such an examination was previously performed by a physician’s assistant. This doctor said he did not perform physicals on patients who had already been seen by a physician’s assistant and that he did not remember personally examining the patient who sued him for malpractice. In spite of being informed by the doctors of the truth, the insurance company’s lawyers continued denying that anyone except the doctor was involved in the patient’s care and treatment

This article from the venerable Madison County Record reports that the Lakin Law Firm, which is a defendant in a big legal malpractice case arising from structured settlement loses, may now face loss of coverage.

"Lakin Law Firm founder Tom Lakin has sworn in a civil suit that he saw no liability on his part for the disappearance of money from structured settlements of his clients.

Clients of Lakin and other firms lost about $50 million eight years ago when the manager of their settlement funds, James Gibson, stole the funds.

Gibson was arrested in South America and went to prison in America.

Attorneys who had advised clients to trust him faced possible malpractice charges. Their insurers reimbursed the clients.

Lakin’s malpractice insurers, however, have not paid. "

Since 2002 the Illinois State Bar Association Mutual Insurance Company has sought a Sangamon County circuit court order rescinding a malpractice policy it issued to the Lakin firm in 2001.

ISBA Mutual argues that it would not have issued the policy if the firm had not misrepresented facts in its policy application.

According to ISBA Mutual, the firm stated it did not know of claims or potential claims against it when the firm knew about such claims.

The firm switched its malpractice to ISBA Mutual from American National Insurance, later known as Great American Insurance.

In 2002 ISBA Mutual filed suit in Sangamon County for declaratory judgment against the firm.

Robert Chemers of Chicago wrote that before ISBA Mutual issued the policy, the firm advised clients of potential claims from Gibson’s theft.

The Appellate Division has ruled that plaintiff bank has lost its attorney-client privilege with subsequent attorneys over the securities gone bad legal malpractice case against Chadbourne & Parke. 

"Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered November 23, 2005, which, to the extent appealed from as limited by the briefs, declared that plaintiffs waived the attorney-client privilege as to legal advice they received regarding compliance of their Russian operation with Russian tax laws and licensure requirements, affirmed, without costs.

Defendant sufficiently demonstrated that the advice it gave in the course of its allegedly negligent representation was framed, in this malpractice action, as the sole cause of plaintiffs’ injury in Russia. Invasion of the attorney-client privilege is necessary, under these circumstances, to determine the validity of such claims, and is vital to the defense (see Orco Bank v Proteinas Del Pacifico, 179 AD2d 390 [1992]).

We have considered plaintiffs’ remaining arguments and find them unavailing." 

Note Justice McGuire’s dissent: " For these reasons, I would hold that by bringing this action plaintiffs did not put at issue, and thereby waive the attorney-client privilege with respect to, any advice they received on tax and licensure issues (Stark v Greenberg, Dauber & Epstein, 219 AD2d 571, 572 [1995] [communications between plaintiffs and their attorneys over issues not raised in malpractice action remain privileged]; TIG Ins. Co. v Yules & Yules, 1999 US DIST LEXIS 17607, *4-5, 1999 WL 1029712, *1 [SD NY, Nov 12, 1999] ["at issue" waiver recognized "where the party is in fact invoking the substance of the privileged conversation . . . or where the claim or defense is of such a nature that an assessment of its merits requires an examination of the substance of a privileged conversation"] [construing New York law] [emphasis added

Justice March Friedman ruled last week that Wilson Elser must disgorge $ 3 Million + fees based upon a  breach of fiduciary duty, and faces $100 in legal malpractice damages as the case progresses.  The story goes on:

"Insurance defense giant Wilson, Elser, Moskowitz, Edelman & Dicker has been ordered to disgorge millions of dollars in legal fees paid by an insurance client who accused the firm of helping another client set up a competing business.

In a March 29 decision, Manhattan Supreme Court Justice Marcy S. Friedman granted summary judgment to trustee liability insurer Ulico Casualty Co. on its claim that former counsel Wilson Elser breached its fiduciary duty by participating in a scheme to transfer Ulico policyholders to another insurer.

The judge ruled that there was "no triable issue of fact" about Wilson Elser’s breach of its duty to Ulico and said the law firm had failed "to perceive its ethical obligation to Ulico."

"While Wilson Elser had the right to represent competitors … it did not have the right to represent competitors in setting up a competing business to which it was contemplated that Ulico’s accounts would be transferred," Friedman wrote in Ulico Casualty Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 602229/99.

"Put another way … Wilson Elser did not have the right to prefer one client over another when the clients’ interests diverged," the judge continued.

She ordered Wilson Elser to forfeit all legal fees it received from Ulico from Jan. 1, 1996, to June 30, 1999. Ulico has claimed it paid the law firm more than $3.4 million in fees during that time. The judge also permitted Ulico to go forward with other claims for legal malpractice and tortious interference with contract. Ulico has requested total damages from Wilson Elser of more than $100 million. "

Plaintiff attorney sued defendant client for legal fees and client counterclaimed for legal malpractice.  At trial plaintiff attorney lost and client won a verdict of $ 31,000 for legal malpractice.  The AD1 found that neither the fee case nor the malpractice case were proven. The malpractice case failed because although a conflict of interest was demonstrated, no deviation was shown.

This article is about medical malpractice, but it applies to legal malpractice. Examples?  When is a tax legal malpratice case complete?  is it on the day of the mistake, on the day of the filing, on the last date which a return may be filed, or when the IRS determines there was a mistake?

"Duty, breach, causation and injury: These are the traditional elements of a tort claim. Thus, under customary theories, a tort is inchoate unless and until the plaintiff suffers actual injury. For example, a plaintiff who has an increased risk of disease because she has been exposed to a defective product, but no manifest illness, would have no cause of action. Faced with this quandary, plaintiffs have resorted to novel claims and theories. They have argued, for instance, that recovery should be allowed for increased risk of future disease or for emotional distress"

The NYLJ reports:

Day Pitney Lawyers Let Off Hook in Malpractice Suit Over Arms-Dealer Loan
Mary Pat Gallagher
New Jersey Law Journal
April 4, 2007

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A company that loaned $3.5 million to a business owned by a man convicted of trying to sell military parts to Iran illegally cannot sue the lawyers it says failed to warn it of the risk.

A federal judge on March 30 dismissed malpractice claims against lawyers from Day Pitney and other firms, finding the lender should have sued the lawyers as part of its state court suit against the borrowers and that, in any event, it was the borrowers’ fraud that caused the loss.

The case, Keltic Financial Partners v. Krovatin, 05-4324, stems from Daniel Malloy’s 1997 arrest and indictment for the attempted sale of 20 Phoenix missile-battery components to Iran. The long-range air-to-air missiles were the type used on F-14A Tomcat jets, which the United States had sold to Iran before 1979, when the shah was overthrown and the country became an Islamic republic.

The NYLJ reports:

"Judge Bars Firm From Suing Ex-Client in Two Courts

By Rosamaria Mancini
New York Law Journal
April 4, 2007

A Mineola law firm cannot sue a former client over unpaid legal fees in both state Supreme Court and District Court if the causes of action are the same, a Nassau judge has ruled.

In Shaw Licitra v. Hahn, 039977/2006, District Court Judge Andrew M. Engel dismissed a suit brought by Shaw, Licitra, Gulotta, Esernio & Schwartz against Chris R. Hahn.

The decision will be published Monday.

"The court finds that such conduct was frivolous, being completely without merit in law, unable to be supported by any reasonable argument for an extension, modification or reversal of existing law, and undertaken primarily to harass or maliciously injure the defendant," Judge Engel wrote.

He imposed a $1,000 sanction against the firm and ordered it to deposit the funds in the Lawyers’ Fund for Client Protection. A hearing will be held April 27 to determine how much the firm will pay in attorney’s fees to Mr. Hahn. "

Barcelo v. Elliott is a Texas case which holds that privity is necessary for a legal malpractice case.  Here is an article from Baylor Law Review, the TexSupp which discusses the case, its holding, and how the courts have gradually whittled away the privity requirement.

As in other states, ocassionlly an attorney may be held responsible to non-clients.  Opinion letters, fraud, and some other conditions may apply. 

Its a short opinion, the Court of Appeals reversed and remanded this case for further proceedings.  Zorn v. Gilbert is a legal malpractice arising from a matrimonial.  In the opinion, the Court of Appeals determines the date of the judgment of divorce, and determines that the law firm continued to represent Zorn for some months thereafter.  Based upon this, the Court of Appeals found that the case was timely.