This is a law.com subscription site, but the jist is:

"Texas’ 1st Court of Appeals has breathed new life into a quarter-century old legal battle that began when one Houston lawyer agreed to represent a woman seeking to collect on loans she made to another Houston lawyer. Although Carol Whitsett died in 2002, her $6.5 million legal malpractice suit against her former attorney, William E. Junell Jr., and Junell’s former firm, Andrews Kurth, lives on, with the state appeals court ruling that the statute of limitations does not block the continued litigation.

The law.com subscription site.

Here is a fuller story on the legal malpractice bridge.

Toronto-based law firm Gowling Lafleur Henderson is being sued by Ambassador Bridge owner and trucking mogul Manuel "Matty" Moroun in U.S. District Court.
According to the Detroit News, bridge execs say the Canadian law firm has jeopardized the Ambassador Bridge’s plan to build a second six-lane span across the Detroit River because one of the firm’s partners is also representing the bridge’s opponents to the plan in Windsor, Ont.

Ambassador execs say a law firm hired to secure funding
for a twin span was also batting for the other side
The law partner named in the suit, environmental expert David Estrin, has asked U.S. District Judge Nancy Edmunds to dismiss the suit.

Law.Com reports this case Acosta v. PACE Local I-300 Health Fund, 04-CV-3885

"A New Jersey federal judge’s dismissal of legal malpractice and breach-of-fiduciary-duty claims against counsel in an ERISA case shows that trustees sued for misfeasance can’t easily pass the buck to their lawyers.

Though he dismissed the claims on procedural grounds, U.S. District Judge Joel Pisano held that even if attorney Gary Carlson knew of prohibited transactions and failed to disclose them, the fund’s trustees "cannot show that Carlson’s conduct — rather than that of the actual wrongdoers — was the proximate cause of any losses they allegedly suffered."

Carlson was counsel to the PACE Local I-300 Union and its health fund. The ERISA suit, Acosta v. PACE Local I-300 Health Fund, 04-CV-3885, alleged that the trustees and administrators of the fund drained it of money, paying themselves excessive salaries, leasing fancy cars, using funds for the benefit of the union and other improper purposes. The plaintiffs are hundreds of workers whose health claims went unpaid, the companies they worked for, and health care providers seeking to recover unpaid medical bills.

The trustees, Matthew DiMinno and Allan Funk, turned around and sued Carlson, alleging he was aware of the improper expenditures and had a duty to inform the trustees but failed to do so, resulting in a loss of more than $1 million.

The third-party complaint alleged the failure to act was a breach of fiduciary duty and of legal ethics rules and constituted malpractice by Carlson, his current firm, Kroll Heineman Giblin, and the firm he left in 2004, Lynch Martin.

Here is a case in which a divorce attorney was permitted it attach a lien to the equitable distribution.  Generally, a new "fund" must be created by the attorney’s work [as in a personal injury case with a settlement], but here, the attorney got to attach property which was already the wife’s.

From the NYLJ  Zelman v. Zelman, New York County:

"PLAINTIFF WIFE’S former attorney in an underlying matrimonial action moved to enforce a charging lien which he filed pursuant to Judiciary Law §475, upon plaintiff’s distributive award of equitable distribution. Plaintiff argued the attorney’s efforts on her behalf did not create any new funds in the form of equitable distribution to which a charging lien could attach. She alleged the settlement awarded her equitable distribution equal only to the value of real property she already had legal title to. The attorney calculated that the $1.6 million settlement, awarded to plaintiff, exceeded her share of the actual real estate proceeds by at least $300,000. The court found such calculation reasonable, stating the excess amount represented the creation of a new fund by the attorney’s efforts to which a charging lien may attach. Thus, it granted the motion to enforce a charging lien in the amount of nearly $170,000, referring the matter to a special referee for a hearing to determine the amount of legal fees dues. "

Here is a story which about a legal malpracice suit in Detroit.  Plaintiffs say that one law firm argued in Canada to build a bridge, and in the US to stop the bridge.  The article.

"A two-timing law firm has jeopardized the Ambassador Bridge owner’s $500 million plan to build a second span between Detroit and Windsor, according to federal court records.

Companies owned by bridge mogul Manuel "Matty" Moroun have sued Toronto firm Gowling Lafleur Henderson in U.S. District Court, claiming it represented them while a partner fought the bridge plan on behalf of Windsor officials.

"A lot of firms work for the city, but when you take out a sword and try to hurt me, it’s a problem," said Dan Stamper, president of the Detroit International Bridge Co., which owns and operates the Ambassador Bridge. "We see that as a huge conflict and it ought to stop."

The law partner named in the suit, environmental expert David Estrin, has asked U.S. District Judge Nancy Edmunds to dismiss the suit; a response from Moroun’s lawyers is due Feb. 23. "

The lawsuit chronicles an international battle between one of the nation’s largest private companies and one of Canada’s largest law firms and comes amid a U.S. Coast Guard review of Moroun’s plan to add a second span at least six lanes wide on the west side of the Ambassador Bridge.

Will there be an estate of Anna Nicole Smith Legal Malpractice Case.  This particular commentator thinks so. Johanna Grossman of Findlaw thinks so in this article. 

"There were at least two pending lawsuits against her at the time of her death, which will likely now be waged against her estate. Anna Nicole had spent recent months as a spokesperson for TrimSpa, a diet products company. She and TrimSpa are named in a class action lawsuit filed last week, which alleges that they made false or misleading claims about the product’s ability to cause weight reduction. This lawsuit has the potential to deplete Anna Nicole’s estate. Perhaps a loss here could be countered by a victory in yet another lawsuit: a legal malpractice suit brought by Anna Nicole against one of the law firms that has represented her in some of her legal battles. "

Nextel workes bring legal malpractice action against Leeds Morelli & Brown. 

"A group of former Nextel employees from New Jersey alleges that their former lawyers struck a sweetheart deal with the wireless communications giant to cap a settlement of their discrimination claims.

The five plaintiffs — all former employees at Nextel’s Rutherford office — are suing both the law firm and the company individually and as representatives of a larger class of at least 500 people. "

"Representatives of Nextel Communications Inc. and the Long Island law firm Leeds, Morelli & Brown deny any impropriety. In legal papers, they argue that all of the plaintiffs signed off on the settlement and can’t revoke their consent now.

"The plaintiffs either lied when they made those statements, or are lying now when they allege they were ignorant of the terms," wrote Nextel attorney Lawrence R. Sandak.

Plaintiffs: 500 former Nextel employees

Defendants: Nextel Communications Inc.; Leeds, Morelli & Brown

The complaint: The former employees claim Nextel paid Leeds, Morelli $7.5 million to cap a potential $2 billion settlement of their discrimination claims at $4.5 million. 

After failing to persuade a federal judge to seal the proceedings, Nextel and the law firm have requested the case be dismissed.

The article

One rarely finds an article about the business side of law firms, and almost never about legal malpractice.  We reported this bankruptcy and legal malpractice problem for Coudert Brothers a while back.  Today Ellen Rosen of  the New York Times reports:

"At one time, the breakup of a big, prestigious law firm was rare. But since the technology boom and bust, implosions of once highflying firms like Brobeck, Phleger & Harrison and Testa, Hurwitz & Thibeault have occurred with more frequency. 

Creditors and at least one former partner have filed lawsuits against Coudert Brothers.
Yet the bankruptcy of Coudert Brothers still stands out. Eighteen months after the firm voted to dissolve, its unwinding continues to be a complicated, messy affair.

Creditors and at least one former partner have filed lawsuits against the firm. Malpractice claims have accrued as well. There are allegations in court filings that three overseas lawyers sequestered money from the firm as it tried to pay off its creditors.

And the committee for unsecured creditors contends that payments to partners were done improperly at a time when the firm should have known it was insolvent, an assertion that lawyers for Coudert deny. Although it is difficult to determine just how much is at stake, the lawyer for the creditors’ committee, David Adler of the New York office of McCarter & English, said the amount could exceed $25 million.

Coudert, experts say, may be an example of what happens when lawyers do not run their firm on sound business principles.

This case from Kings county is puzzling because the court found it was permitted to treat a 3211[a][7] motion as a 3212 Motion for Summary Judgment, without notice to the parties, based upon  use of extrinsic materials.  Read the decision:

"Defendants, Lindenbaum & Young and Alan Young, Esq. (the Young defendants), in this legal malpractice action, move, pursuant to CPLR Rule 3211 (a) (7), for dismissal of the cross-claim against them by defendants, Pollack & Associates, PLLC and Ira B. Pollack, Esq. (the Pollack defendants). The instant case and the earlier cases that led to this case have meandered through the courts and Part 27. My March 27, 2006 decision and order, Richardson v. Lindenbaum & Young, 11 Misc 3d 1070 (A), 2006 NY Slip Op 50453 (U), granted the Young defendants, pursuant to CPLR Rule 3211 (a) (7), dismissal from the action due to plaintiffs’ failure to state a cause of action against them. I observed, at 2, in paraphrasing Paul McCartney, that "the instant action is part of a ‘long and winding road’ of litigation." However, the legal "road" traveled in this litigation has yet to reach its final destination. Last week, in Richardson v. Lindenbaum & Young, 2007 NY Slip Op 50130 (U), I denied plaintiffs’ motion and the cross-motions of the Pollack defendants and plaintiffs, pursuant to CPLR Rule 2221, for leave to renew and reargue the March 27, 2006 decision and order. I held, at 1, that:

t]his Court did not overlook or misapprehend matters of fact in making its March 26, 2006 decision and order. Plaintiffs and the Pollack defendants failed to introduce new facts not offered in the prior determination or demonstrate that there has been a change in the law. Further, this Court did not have to give notice that it intended to treat the Young defendants’ prior motion for dismissal as a summary judgment motion, because the parties deliberately charted a summary judgment course, by laying bare their proof in submitting extensive extrinsic documentary evidence and affidavits, which set forth the convoluted chronology that led to this action.

The underlying actions which led to the instant legal malpractice case involved an alleged fraudulent conveyance of real property and collection on a judgment. The Pollack defendants were relieved as counsel for plaintiffs and replaced by the Young defendants. Subsequently, the now retired Justice Lewis Douglass, in a September 19, 2002 order, held plaintiffs in contempt for their wilful failure to comply with a subpoena duces tecum and deposition in connection with a judgment entered on December 12, 2001 for $727,847.27 [my March 27, 2006 decision and order, p. 2]. Thereafter, Justice Douglass refused to vacate the default and contempt of plaintiffs in the instant action. He found "no excusable grounds for default nor do I find [a] meritorious defense [my March 27, 2006 decision and order, p. 3]." In my March 27, 2006 decision, at 3, I held that:

[P]laintiffs have failed to allege that the Young defendants were the proximate cause of their loss, that they sustained actual damages, and "but for" the malpractice of the Young defendants, plaintiffs would not have sustained some actual and ascertainable damages. Further, subsequent to the substitution of the Pollack defendants as new counsel there was ample opportunity to vacate plaintiffs’ default and present a meritorious defense, if plaintiffs had one. When Justice Douglass issued his September 19, 2002 and January 9, 2003 orders, plaintiffs were then represented by the Pollack defendants, not the Young defendants.

To establish legal malpractice, as instructed in Iannarone v. Gramer, 256 AD2d 443, 444 (2d Dept 1998), a plaintiff must establish, "(1) that the defendant attorney failed to exercise that degree of care, skill, and diligence commonly possessed by a member of the legal community, (2) proximate cause, (3) damages, and (4) that the plaintiff would have been successful in the underlying action had the attorney exercised due care." See Tortura v. Sullivan Papain Block McGrath & Cannavo, P.C., 21 AD3d 1082, 1083 (2d Dept 2005); Volpe v. Canfield, 237 AD2d 282 (2d Dept 1997). In the underlying decision, at 4, I found that plaintiffs failed to allege that they would have prevailed but for the malpractice of the Young defendants. I held, at 4 – 5, that:

plaintiffs’ theory of liability is based upon Justice Douglass’ September 19, 2002 and January 9, 2003 orders for contempt and refusal to vacate plaintiffs’ default, finding that plaintiffs lacked an excusable default or a meritorious defense. Plaintiffs’ claims were viable when the Pollack defendants became plaintiffs’ counsel on August 7, 2002. According to plaintiffs’ complaint, it was the failure of the Pollack defendants to comply with various Court instructions to submit proof of a meritorious defense that caused Justice Douglass to deny the motion to vacate the default judgment. Justice Douglass, in his January 9, 2003 Order, discussed Mr. Pollack’s "continuing pattern of default followed by motion to vacate, followed by default," and "how this litigation is regularly delayed." In cases where a successor counsel had sufficient time to protect a party’s rights, as in the instant case, the outgoing counsel could not be liable for malpractice. Any alleged negligence by an outgoing attorney cannot be the proximate cause of any of plaintiffs’ alleged damages. Kozmel v. Law Firm of Allen L.Rothenberg, 241 AD2d 484 (2d Dept 1997); Golden v. Cascione, Chechanover & Purcigliotti, 286 AD2d 281 (2d Dept 2001); Albin v. Pearson, 289 AD2d 272 (2d Dept 2001); Perks v. Lauto & Garabedian, 306 AD2d 261 (2d Dept 2003); Ramcharan v Pariser, 20 AD3d 556 (2d Dept 2005).

In viewing plaintiffs’ evidence in opposition to summary judgment and dismissal, I found that plaintiffs failed to demonstrate the existence of any triable issues of fact. Therefore, I granted the motion of the Young defendants, pursuant to CPLR 3211 (a) (7), to dismiss plaintiffs’ verified complaint against them, for failure to state a cause of action.

However, this Court’s March 27, 2006 decision and order was silent as to the status of the cross-claim brought by the Pollack defendants for contribution and/or indemnification [exhibit B of affirmation in opposition – verified answer with cross-claim of the Young defendants]. The Young defendants, to put this issue to rest, argue that the Pollack defendants’ cross-claim against them is baseless because it is derived from the plaintiffs’ dismissed complaint for legal malpractice against the Young defendants. In opposition, the Pollack defendants assert that their cross-claim is an independent pleading. It is not dependent upon the survival of plaintiffs’ complaint. The Pollack argument is correct as far as it goes. However, in the instant case, the Pollack defendants’ cross-claim against the Young defendants is impossible to separate from plaintiffs’ claims in the complaint. Therefore, it follows logically, that upon the dismissal of the complaint against the Young defendants the cross-claim of the Pollack defendants, derived from plaintiffs’ complaint, is dismissed.

Discussion

CPLR §3019 (b) states:

A cross-claim may be any cause of action in favor of one or more defendants or a person whom a defendant represents against one or more defendants, a person whom a defendant represents or a defendant and other persons alleged to be liable. A cross-claim may include a claim that the party against whom it is asserted is or may be liable to the cross-claimant for all or part of a claim asserted in the action against the cross-claimant.

While a cross-claim "may be any cause of action in favor of one or more defendants" [Emphasis added], it is clear that the Pollack defendants’ cross-claim is derived from and related to plaintiffs’ claims against both the Young defendants and the Pollack defendants. It cannot survive the dismissal of the complaint against the Young defendants. The cross-claim [exhibit B of affirmation in opposition] states:

[t]hat if it is determined that the answering defendants are liable to any degree to the plaintiff [sic], whether because of negligence, by operation of law or any other reason, the answering defendants are entitled to have the liability apportioned among and between the co- defendants by way of contribution and/or is entitled to be indemnified by said co-defendants.

In this case the cross-claim arises directly and solely from plaintiffs’ claims. The Young defendants successfully demonstrated that plaintiffs failed to properly plead the necessary elements for legal malpractice against them. In my March 27, 2006 decision and order, at 3, I concluded that "plaintiffs have failed to allege that the Young defendants were the proximate cause of their loss, that they sustained actual damages, and ‘but for’ the malpractice of the Young defendants, plaintiffs would not have sustained some actual and ascertainable damages." Given these findings, and the undisputed fact that no judgments were entered against plaintiffs until well after the Young defendants were relieved as counsel, the Young defendants have no liability in the instant action as to the Pollack defendants.

The Pollack defendants rely upon Brooks v. Chemical Leamon Tank Lines, Inc., 71 AD2d 405 [1st Dept 1979] for the proposition that a cross-claim is not required to be dependent upon the claim of a plaintiff. While this is true, in the case at bar the Pollack defendants’ cross-claim is dependent upon plaintiffs’ claims. The Pollack cross-claim does not arise out of a separate transaction with the Young defendants, apart from plaintiffs’ malpractice claims. As a result, the Pollack defendants’ cross-claim for contribution and/or indemnification is no longer viable and must be dismissed.

Further, the Pollack defendants’ reliance on La France Carpets, Inc. v. U. S. Rubber Co., 19 AD2d 812 [1st Dept 1963] is similarly misplaced. While the La France Carpets Court correctly states that CPLR §3019 (b) "allows a cross claim for any cause of action and does not require it to be dependent on the claim of the plaintiff," this is not the situation before the Court. Plaintiffs’ claims and those of the Pollack defendants are inextricably intertwined. Therefore, the Pollack defendant’s cross-claim is subsumed within the plaintiffs’ complaint. Thus, the dismissal of plaintiffs’ claims against the Young defendants renders the cross-claim of the Pollack defendants against the Young defendants meritless.

Conclusion

Accordingly, it is

ORDERED that the motion by defendants Lindenbaum & Young and Alan Young, Esq., pursuant to CPLR Rule 3211 (a) (7), for dismissal of the cross-claim against them by defendants Pollack & Associates, PLLC and Ira B. Pollack, Esq., because of the failure of defendants Pollack & Associates, PLLC and Ira B. Pollack, Esq. to state a cause of action against them, is granted. "

This constitutes the Decision and Order of the Court