This NC case illustrates the problems with determining when a statute of limitations starts to run.  Is it on the date of  bad advice, the date of the settlement, the date of the release, or later?  The North Carolina Appellate Blog writes:

"COA: Despite Signed Certified Mail Return Receipt, Service Validity Issues
In In the Matter of K.N., the COA yesterday vacated an order terminating a mother’s parental rights. Importantly for a party bringing any type of suit, the COA did so despite a certified mail return receipt that had been signed, and seemingly without proof as to improper service.

Civil Procedure Rule 4 allows for a presumption of proper service where process was signed for by the named party’s agent or a person who resides in his or her home. Here, the COA found the presumption of proper service rebutted by: 1) the discrepancy between an address the mother gave the trial court and the address to which the certified mail was directed; 2) the mother’s failure to appear at the proceeding; and 3) the lack of information about who the person who signed for the certified mail was.

The COA essentially held that the mother’s procedural due process rights to notice and a hearing (here the hearing was only 20 mins. and the mother had not been represented by counsel) had been violated. The COA therefore vacated the order terminating the mother’s parental rights.

Notably, the Court suggested that "issues" as to valid service may suffice to invalidate an order. The COA did not indicate, for example, that evidence existed demonstrating that the person who had accepted service for the mother was unauthorized to do so. (Carpenter v. Agee suggests that that’s the kind of evidence needed to overcome the presumption of proper service resulting from a return receipt and affidavit of service. 171 N.C.App. 98, 613 S.E.2d 735 (2005)). Nor did the COA indicate (or the appellant affirmatively state in her brief) that the address to which the summons had been sent was actually wrong.

Will future defendants for whom someone else signs when process is delivered be able to overturn adverse judgments by providing discrepant addresses, failing to appear, and leaving unanswered whether the person who signed for service was actually unauthorized? Plaintiffs and petitioners may want to think about these risks in determining whether their proof of service is sufficient.

We are scratching our head over this case.  A 10-2 verdict?  Double Dipping?  Defendants who drop out of the story?

"In Baker Botts, et al. v. Kenneth F. Cailloux, as Next Friend of Kathleen C. Cailloux, the 4th Court of Appeals in San Antonio reversed a 2005 trial court judgment ordering Baker Botts and Wells Fargo Bank Texas N.A. to pay $71 million in damages to their former estate-planning client Kathleen C. Cailloux, a wealthy widow in Kerrville.

In an opinion written by Justice Catherine Stone, the three-justice panel reversed the judgment against Baker Botts and Wells Fargo on the ground that nothing in the record proved that Baker Botts or Wells Fargo breached a fiduciary duty that caused Cailloux to disclaim her right to the estate of her late husband, Floyd Cailloux. The appeals court rendered a take-nothing judgment in favor of the firm and the bank.

In 1995, a jury in 198th District Judge Emil Karl Prohl’s court in Kerrville had found that Kathleen Cailloux would have received $65.5 million in trust if she had not disclaimed her right to Floyd’s estate. However, the jury also found the woman had no lost-income damages or economic-loss damages as a result of executing the disclaimer. Prohl ordered Baker Botts and Wells Fargo, the executor of Floyd’s estate, to pay $71 million in damages to fund a trust for Kathleen Cailloux.

However, in its opinion, the 4th Court found Prohl abused his discretion by creating an "equitable trust" to hold the millions of dollars he ordered Baker Botts and Wells Fargo to pay.

"We are further troubled by the "equitable trust’ fashioned by the trial court because it essentially places Kathleen in a better position than she previously occupied," Stone wrote in the 11-page opinion, in which Chief Justice Alma Lopez and Justice Karen Angelini joined.

The litigation stems from estate planning Baker Botts did for Cailloux and her husband, a founder of Keystone International. According to a lawyer for Kathleen and for her son Kenneth Cailloux, Austin’s Richard Harrison, Kathleen and Floyd were worth about $130 million. Kenneth is his mother’s legal guardian, because Kathleen is incapacitated by Alzheimer’s disease.

The plaintiffs alleged in the sixth amended petition that the defendants conspired to convince her, right after Floyd Cailloux’s death in 1997, to disclaim her rights to her husband’s estate and to transfer more than $60 million to the Cailloux Foundation — ostensibly to save more than $30 million in taxes — without informing her of other estate-planning options.

According to the 4th Court’s opinion, more than six years after Kathleen disclaimed her husband’s estate, her son Kenneth, as her next friend, sued Baker Botts and Wells Fargo for, among other things, breach of fiduciary duty relative to Kathleen’s execution of the disclaimer.

The defendants denied all of the allegations.

In February 2005, a jury in Prohl’s court, by a 10-2 vote, found Baker Botts breached its fiduciary duty to Kathleen Cailloux by failing to disclose "all important information" when doing estate-planning work for Cailloux following the death of her husband in January 1997. The jury, however, found Baker Botts did not breach its fiduciary duty in three other areas: by failing to act with the utmost loyalty toward Cailloux, by participating in transactions that were not fair and equitable to Cailloux, or by failing to act in the utmost good faith and to exercise the most scrupulous honesty toward the widow.

The jury also found Wells Fargo breached its fiduciary duty to Kathleen Cailloux and found that former bank official William Goertz, who also served on the board of the Floyd A. Cailloux and Kathleen C. Cailloux Foundation, individually participated in that breach. Goertz settled before trial.

The jury assessed 25 percent of the responsibility for the injury to Cailloux, another 25 percent against Baker Botts and 25 percent each against Wells Fargo and Goertz.

For the breaches of fiduciary duty, the jury found Kathleen Cailloux should be compensated with $65.5 million — the value she would have received in trust had she not agreed to disclaim her rights to the money.

Prohl signed a judgment in April 2005 ordering Baker Botts and Wells Fargo to pay $71 million into a new trust, the Kathleen C. Cailloux Equitable Trust. He ruled Kathleen Cailloux can use the interest from the trust and can withdraw up to 5 percent of the principal yearly.

While the jury returned a $65.5 million verdict, Prohl added $5.6 million in prejudgment interest, plus court costs and postjudgment interest.

Baker Botts and Wells Fargo appealed the judgment, claiming, among other things, that there was insufficient evidence to support the jury’s findings that their alleged breaches of fiduciary duty proximately caused Kathleen Cailloux damage, and the trial court had no power to create an equitable trust.

Ken Cailloux, Kathleen Cailloux’s son, also appealed the judgment, alleging there was insufficient evidence to support the jury’s finding that his mother is entitled to nothing for lost income.

The 4th Court panel reversed the trial court’s judgment to the extent that it imposes a $65.5 million equitable trust on Baker Botts and Wells Fargo, and rendered a take-nothing judgment in their favor, but it affirmed the trial court’s judgment in connection with Kathleen Cailloux’s claim for lost income.

Bernstein v. State of New York, 06 Civ. 5681
Decided: February 6, 2007

"Disciplinary proceedings were instituted against Bernstein by the Grievance Committee for the Second and Eleventh Judicial Districts. The petition contained three charges of professional misconduct, including a charge that Bernstein "converted clients [sic] funds that were entrusted to him as a fiduciary, in violation of Code of Professional Responsibility DR 9-102(a) and DR 1-102 (a)(3) and (7) (22 NYCRR 1200.46 [a]; 1200.3 [a] , )." The Appellate Division, Second Department, ordered that the matter be referred to a Special Referee for a hearing and report. Following a hearing, the Special Referee sustained all of the charges. The Grievance Committee then moved to confirm the Special Referee’s Report, a motion that Bernstein opposed. In its decision confirming the Special Referee’s Report, the Second Department made the following findings:

On or about July 1, 1999, Dr. Alexander Hollander, a dentist, was arrested pursuant to a 36-count criminal indictment charging him with grand larceny in the third degree (two counts), scheme to defraud in the first degree, offering a false instrument for filing in the first degree (27 counts), falsifying business records in the first degree (three counts), and perjury in the first degree (three counts). The respondent [Bernstein] represented Dr. Hollander at his arraignment, and bail was set at $50,000. Also on July 1, 1999, the respondent received $4,400 in cash on behalf of Dr. Hollander for bail. The respondent failed to apply those funds towards Dr. Hollander’s bail and failed to return the money to Dr. Hollander or his representative upon demand. Instead, he converted the $4,400 to his own use and benefit.

The Second Department sustained the charge of conversion and ordered that "pursuant to Judiciary Law §90, effective immediately, the respondent, Joshua Bernstein, is disbarred, and his name is stricken from the roll of attorneys."

The Court of Appeals dismissed Bernstein’s appeal of his disbarment. Bernstein then made "a combined motion in the Appellate Division for reargument and, in the event of affirmance, for leave to appeal. Same were summarily denied, without Opinion." Bernstein also made "an appeal ‘as of right’ to the Court of Appeals" which was "dismissed on the basis that no criterium [sic] for an ‘as of right’ appeal was met."

In his opposition to the motion to confirm the Referee’s Report, Bernstein argued that he had a right to a retaining lien on the $4,400 that was to be used for Dr. Hollander’s bail "pursuant to an express oral retainer agreement made in open Court between the Plaintiff and said client at the latter’s arraignment therein, in the presence of the prosecutor thereon, upon which retainer agreement, with respect to fees to be paid to the Plaintiff, the client defaulted." Bernstein also "brought to the Appellate Division’s attention the fact that a provision in the Lawyer’s Code of Professional Responsibility explicitly provides that it is NOT a violation thereof for an attorney to act pursuant to a ‘recognized lien’." However, the Second Department concluded that "[t]he respondent presented no mitigating circumstances at the hearing," and that "the fact remains that [Bernstein] allowed his client to remain in prison while he converted to his own use money that was supposed to be used for bail."

Bernstein’s allegations of due process violations, and his position that the Rooker-Feldman doctrine does not bar this Court’s exercise of subject matter jurisdiction, are both based on his conclusion that the New York State court proceedings did not constitute "judicial proceedings" and, as such, could neither legally deprive him of his property by disbarment, nor present an obstacle to this Court’s exercise of jurisdiction. "

He tried in Supreme Court, at the Appellate Division level and now in Federal Court.  Attorney is sanctioned losing at all levels.

"Plaintiff is suing the Appellate Division of the Supreme Court, Second Judicial Department ("Appellate Division"); Appellate Division justices Gail Prudenti, David Ritter, Frank Santucci, and Robert Schmidt, in their individual capacities; and, finally, also in his individual capacity, James E. Pelzer, the Clerk of the Appellate Division.

Plaintiff was admitted to practice law before the courts of the State of New York on December 20, 1950, and was subsequently admitted to practice before the United States District Courts of the Southern and Eastern Districts of New York.

This case arises from two court sanctions against Plaintiff which, coupled with several other disciplinary violations, resulted in the suspension of his license to practice law. First, on September 14, 1999, the Westchester County Supreme Court issued a sanction order directing Plaintiff to pay $4,500 by October 1, 1999 to the Lawyers’ Fund for Client Protection for the State of New York for violating pretrial discovery orders and engaging in frivolous motion practice. Caiola v. AllCity Ins. Co., Nos. 1333/96, 8095/99, 2002 WL 1448855, *1 (N.Y. Sup. June 10, 2002). Second, on July 10, 2001, the Westchester Supreme Court directed Plaintiff to pay $3,500 by July 30, 2001 to the Client Protection Fund for once more engaging in frivolous motion practice. Id. at *2.

Plaintiff did not comply with these sanctions, and the trial court found him guilty of criminal contempt. Id. at *19-20. This order subsequently was overturned by the Appellate Division because Plaintiff was not personally served with notice of the proceeding. Caiola v. Allcity Ins. Co., 305 A.D. 2d 350, 351, 758 N.Y.S. 2d 683, 685 (App. Div. 2d Dep’t 2003). On July 22, 2003, the Westchester Supreme Court judge denied Plaintiff’s motion to dismiss the criminal contempt proceeding against him. Caiola v. Allcity Ins. Co., 7 A.D. 3d 557, 557, 776 N.Y.S. 2d 504, 2004 N.Y. Slip Op. 03756 (App. Div. 2d Dep’t 2004). The Appellate Division affirmed, holding that his argument that the Westchester Supreme Court "did not have the power to commence the criminal contempt proceeding against him sua sponte" was "without merit." Id. "

Here is a story about a Physician with 110 medical malpractice cases pending against him.  He just lost his third legal malpractice case against his attorneys

"The U.S. District Court in Charleston dismissed two lawsuits on Tuesday that Dr. John A. King, whose name is now Christopher Wallace Martin, filed against lawyers who represented him. The court previously dismissed a third lawsuit King had filed.

Today, King has 110 pending medical malpractice lawsuits filed against him in Putnam County Circuit Court related to surgeries he performed at Putnam General Hospital in Hurricane.

Last fall, King generated two more medical malpractice suits while treating patients at clinics near Birmingham, Ala. King filed all three lawsuits against his former West Virginia lawyers on Feb. 20, 2006, seeking “compensatory damages for legal malpractice.” At the time, King said he was living in Florida.

Each suit alleges the West Virginia lawyers King hired after Putnam General Hospital suspended his privileges on June 5, 2003, did not represent him effectively. "

Here is a decision from Civil Court which is a textbook on how to get a trial de novo after an attorney fee arbitration. 

Pruzan v. Levine, 114263/06
Decided: February 6, 2007

Judge Richard Velasquez

KINGS COUNTY
Civil Court

Petitioner: Pro se

Respondent: Pro se

Judge Velasquez

BACKGROUND

Respondent, Laurence A. Levine, moves this Court to dismiss the instant petition on the basis that the Court lacks jurisdiction to hear this matter. Petitioner’s claims arise out of a attorney-client relationship wherein the petitioner, Thomas Pruzan, Esq., was retained by the respondent to represent him in a landlord-tenant proceeding. Respondent paid a retainer of $5,000.00 to petitioner to secure his services. At some point during petitioner’s representation, respondent became dissatisfied with petitioner’s services, and chose to terminate the relationship. Respondent demanded return of his retainer for petitioner’s services, and petitioner refused. Respondent then availed himself of the New York State Fee Dispute Resolution Program (Part 137 of the Office of Court Administration Rules) wherein a dissatisfied client may seek to resolve a fee dispute by arbitration. "Arbitration is mandatory for an attorney if requested by a client, and the arbitration award shall be final and binding unless de novo review is sought as provided in section 137.9." §137.2 of the Office of Court Administration Rules.

Respondent filed a Client Request for Fee Arbitration with the Brooklyn Bar Association on or about February 17, 2006. Arbitration was held at the Brooklyn Bar Association on or about May 30, 2006 before Barbara S. Odwak pursuant to the Office of Court Administration Rules Part 137 entitled Fee Dispute Resolution Program. The amount in dispute was $5,000.00. On June 8, 2006 an Arbitration Award was entered in the "Matter of Fee Dispute Arbitration between Laurence A. Levine, Client and Robert (sic) Pruzan, Esq." wherein Mr. Levine was found to be entitled to a refund by Mr Pruzan of $2500.00. Mr. Pruzan requested that a new Arbitration Award notice be issued as the name of "Robert Pruzan, Esq.", father of petitioner herein, was shown in the caption of the June 8, 2006 Award to be the attorney. Another award notice was issued with the correct attorney’s name in the caption on July 13, 2006. In order to ensure compliance with section 137.8 (30 day requirement), however, Mr. Pruzan filed a Demand for a Trial De Novo on July 6, 2006.

Mr. Pruzan alleges that he was unable to determine what procedure governed his request for a Trial De Novo, and how to obtain a trial on the issue of whether he was entitled to keep his retainer from Mr. Levine. After several conversations with Court Clerks in Kings County Civil Court he was advised to bring a petition under CPLR 7511 to set aside the arbitration award and to determine what, if any, refund Mr. Levine was entitled to receive. Following that advice, Mr. Pruzan brought a Notice of Petition and Petition for the above relief, returnable in Part 34 on August 30, 2006. Mr. Levine, the respondent herein, than brought a Motion to Dismiss and for other relief alleging that petitioner had failed to timely commence an action within thirty (30) days, which was finally heard on October 24, 2006.

The Court has gone to considerable lengths to determine what procedure must be followed where a Demand for a Trial De Novo is timely made pursuant to Part 137 Fee Dispute Resolution Program, but where the action is commenced after thirty (30) days have expired, and what kind of action should be commenced. With the assistance of the Executive Director of the Brooklyn Bar Association, the local administrator for the Fee Dispute Resolution Program and the Office of Alternative Dispute Resolution of the Unified Court System, the Court has determined the proper procedure.

DISCUSSION

Section 137.8(a) of the Rules of the Chief Administrator of the Courts (22 NYCRR §137.8(a)) provides under the caption "De Novo Review":

"A party aggrieved by the arbitration award may commence an action on the merits of a fee dispute in a court of competent jurisdiction within 30 days after the arbitration award has been mailed. If no action is commenced within 30 days of the mailing of the arbitraton award, the award shall become final and binding."

The Court notes that commencing de novo review has been the subject of some confusion among attorneys, clients and court staff. Two recent decisions confirm that litigants and court staff alike have sought guidance regarding not only the appropriate pleadings to commence de novo review but also in which court such review should be sought.

In Borgus v. Marianetti, 7 Misc.3d 1003(A), 801 N.Y.S.2d 230, 2005 WL 742300 (N.Y. City Ct., 2005), the Court discussed the difficulties faced by an aggrieved party who sought relief from an award issued during Fee Dispute Resolution Program (FDRP) arbitration. In Borgus, neither party properly commenced an action in the Rochester City Court in accordance with the statutory procedures for commencing actions in City Courts; rather, the attorney filed a document called a "Demand for a Trial De Novo." Despite the fact that neither party had filed a Summons, Complaint, Answer, Note of Issue, or Certificate of Readiness, the Court held that it was not jurisdictionally fatal for the party who was aggrieved by an FDRP arbitration award to initiate de novo judicial review by filing a document labeled, "Demand for a Trial De Novo."

In Mahl v. Rand, 11 Misc.3d 1072(A), 816 N.Y.S.2d 697, 2006 WL 825117 (N.Y.C. Civ. Ct., 2006), the attorney and client proceeded through the fee dispute arbitration program of the local bar association, and the arbitrator awarded the attorney $4,000. The client then attempted to "commence a proceeding for a trial de novo, and each time the client was told politely that the Civil Court had no known procedure for commencing an action with a demand for a trial de novo." Mahl v. Rand, supra. The client was unable to commence de novo review in a court of competent jurisdiction within the 30-day limit set forth in 22 NYCRR §137.8(a), and the attorney sought to confirm the arbitrator’s award pursuant to CPLR §7510. The Court concluded that the client had made repeated good-faith attempts to commence de novo review and concluded that "it is appropriate to deem the client’s showing to be a cross-petition to vacate the arbitration award and, in light of the established facts, grant such cross petition and order that the legal fees claim of the attorney proceed as a plenary action." Id.

Both Borgus v. Mariannetti and Mahl v. Rand highlight the challenges that some litigants face in exercising their right to de novo review pursuant to 22 NYCRR §137.8(a), and both opinions demonstrate the need for judicial flexibility and creativity when parties seek to comply with deadlines but confusion exists as to proper procedure. Accordingly, this Court seeks to clarify the procedures that should be followed by parties who seek de novo review.

Initially, the following analysis assumes that the parties seek relief through the commencement of a plenary action rather than by motion in any pending litigation in which the attorney represented the client.

A party who is aggrieved by an arbitration award and who seeks to commence de novo review must first determine the remedy sought. In those cases where the aggrieved party seeks a court order stating that he or she does not owe the other party any money (i.e., cases in which a client seeks an order declaring that the client does not have to pay a fee that the attorney claims is due and owing or cases in which an attorney seeks an order declaring that the attorney need not refund money previously paid by the client to the attorney), the aggrieved party must commence an action for declaratory relief, which is available only in Supreme Court pursuant to CPLR §3001.

In those cases where the aggrieved party seeks to recover money (i.e., cases in which an attorney seeks to recover money from a client who has not yet paid a fee or cases in which a client seeks to recover money previously paid to an attorney), the aggrieved party faces a second inquiry: what is the amount sought? The New York City Civil Court has jurisdiction over proceedings for the recovery of money where the amount sought does not exceed $25,000. N.Y.C. Civ. Ct. Act §202.1

In those cases where the amount sought does not exceed $25,000, the aggrieved party may commence an action in the New York City Civil Court. The commencement of such an action must comply with the pleading requirements set forth in Article 9 of the New York City Civil Court Act and 22 NYCRR Part 208 (Uniform Civil Rules for the New York City Civil Court).

In those cases where the amount sought exceeds $25,000, the aggrieved party must commence an action in New York State Supreme Court, and the pleadings must comply with the pleading requirements set forth in Article 30 of the Civil Practice Law and Rules.

In the instant matter, the Court finds that the Petitioner made a good-faith attempt to obtain de novo review within the 30-day window set forth in 22 NYCRR §137.8(a). The Court finds that Mr. Pruzan timely filed a Demand for a Trial De Novo within 30 days of the date when the Brooklyn Bar Association mailed the arbitrator’s award to him and, pursuant to advice received from Kings County Civil Court, he filed a petition pursuant to CPLR §7511 within that 30-day window.

However, given that Petitioner essentially seeks a declaration from the Court that he is under no obligation to refund any of his former client’s money, the Court concludes that it lacks jurisdiction because the Civil Court cannot issue equitable relief, and an action commenced pursuant to CPLR §7511 cannot provide Petitioner with the relief he seeks.

Accordingly, the Court dismisses Mr. Pruzan’s petition with leave to file an action in New York State Supreme Court for declaratory relief.

Petitioner to serve a copy of the Decision/Order on Respondent and the appropriate clerk with notice of entry.

This constitutes the Decision and Order of the Court.

1. The District Courts and the City Courts in cities outside of New York City have jurisdiction over proceedings for the recovery of money where the amount sought does not exceed $15,000 (Uniform Dist. Ct. Act §202 and Uniform City Ct. Act §202), and the Town and Village Courts have jurisdiction over proceedings for the recovery of money where the amount sought does not exceed $3,000 (Uniform Justice Ct. Act §202).

Anthony Lin of the NYLJ writes:

"A Manhattan judge has denied a lawyer’s request for additional fees from a $3.75 million medical malpractice settlement, ruling instead that the lawyer had already taken more than he was entitled to.

Norman L. Cousins represented Kevin Veneski in a 1997 suit against Queens-Long Island Medical Group over Mr. Veneski’s 1996 stroke, which had left him disabled and unable to work. The matter settled in 2002 for a $3 million lump sum and an annuity yielding $750,000 over the next 20 years.

The retainer agreement provided that Mr. Cousins would receive 30 percent only of the first $250,000 of recovery, with his share shrinking to 10 percent of any amount over $1.25 million.

But Manhattan Supreme Court Justice Sherry Klein Heitler (See Profile) ruled in a Feb. 2 decision that Mr. Cousins had already billed and received attorney’s fees of around $948,000, almost one-third of the lump-sum portion of the settlement.

As a result, "the court concludes that Cousins owes Veneski, at a minimum, approximately $513,000 that he has received over and above the statutorily permitted amount," the judge wrote in Veneski v. Queens-Long Island Medical Group, 100011/98. Mr. Cousins had moved for additional fees on the grounds that the expense and length of the litigation had forced him to file for bankruptcy. He claimed he had been forced to resort to predatory lenders to finance the case, accumulating almost $700,000 in interest charges on around $500,000 in principal. 
"

Rattet lawfirm asks court to seal a pleading about it in a bankruptcy case.  It fails.

"The fact that a complaint contains potentially untrue material that could defame a party is not enough to warrant sealing the document, a federal judge has ruled."

Addressing that standard for sealing "scandalous and defamatory" material under 11 U.S.C. §107(b)(2), Southern District Bankruptcy Judge Martin Glenn rejected the sealing request of a law firm that said allegations of fraud made by another party would harm its reputation if aired on the court’s electronic case filing system.

Rattet, Pasternak & Gordon-Oliver in Harrison is the law firm that made the sealing motion in In Re Food Management Group, 04-22880.

In re: Food Management Group LLC, 04-22880
Decided: February 13, 2007

Bankruptcy Judge Martin Glenn

U.S. BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

Appearances:

White, Fleischner & Fino, LLP

Attorneys for Rattet, Pasternak & Gordon Oliver, LLP

New York, NY

Gil M. Coogler, Esq.

Of Counsel

Drinker Biddle & Reath LLP

Attorneys for Janice B. Grubin,

Chapter 11 Trustee for Debtors

Chicago, IL

Warren von Credo Baker, Esq.

Of Counsel

Diana G. Adams

Acting United States Trustee

New York, NY

Richard C. Morrissey, Esq.

Of Counsel

Bankruptcy Judge Glenn