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

Hinshaw reports this Missouri case:

"The Missouri Court of Appeals for the Western District held that no attorney-client relationship was created simply by the fact the client’s stepfather paid the lawyer’s fees for a criminal defense and therefore affirmed dismissal of the legal malpractice action filed pro se by the stepfather."

" Mr. Fox asserted that he had standing because his family relationship had been harmed by Mr. White’s alleged malpractice, and he was entitled to client status since he had paid the bills and did not receive from Mr. White a non-representation letter. The court disagreed for several reasons. First, “the mere payment of fees, without more, is not proof of an agency relationship, much less an attorney-client relationship. The relationship between a lawyer and his client is a delicate and exacting one, highly personal. It involves much more than the payment of fees. “ Mid-Continent Cas. Co. v. Daniel, Clampett, Powell & Cunningham, 196 S.W.3d 595, 598 (Mo.App. S.D. 2006). Second, “[a]n attorney-client relationship exists when a person seeks and receives legal advice and assistance from a lawyer who intends to give legal advice and assistance to the person.” Collins v. Mo. Bar Plan, 157 S.W.3d 726, 736 (Mo.App. W.D. 2005). 2007 WL 148648 at *2. "

Finally, and even though it would have been better for Mr. White to have sent a non-representation letter, it was not necessary in these circumstances since there was no basis on which to conclude that an attorney-client relationship did in fact exist between Mr. Fox and Mr. White. Cf. Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice Section 2.12 (2005), cited in this opinion. At the end of the day, however, there simply was no specific undertaking by Mr. White on behalf of Mr. Burns’ family members.

Here is a well written and interesting case from the Court of Appeals of indiana called Queery & Harrow Ltd v. TIC  which discusses whether an excess insurer may sue its defense attorney after a settlement which required payment by the excess insurer.  The case covers a wide range of decisions in the area, both from Indiana and elsewhere, and has a strong discussion of the elements of legal malpractice.

Here is a case in which a $ 2 Million dollar medical malpractice verdict is reversed, partially dismissed and sent back for a new trial based upon late CPLR 3101 notice.  Practitioners should beware of this particular problem.  Notice must be sent within a reasonable time after retention.

"The judgment in favor of the plaintiff was, in part, based upon the jury’s finding that Rosmarin deviated from good and accepted medical practice by not timely shocking the plaintiff three times in succession after the plaintiff developed ventricular fibrillation. The Supreme Court, however, should not have permitted the plaintiff’s expert witness, Rebecca Twersky, to testify at trial as to this and other issues. Twersky was retained on behalf of the plaintiff some time between 1994 and 2002. The trial commenced on November 17, 2002, and Twersky’s identification as an expert witness was not disclosed until December 2, 2002, two weeks after jury selection had commenced. Expert disclosure is of particular importance in medical malpractice actions given their heightened reliance on expert testimony (see Meyer v Zeichner, 263 AD2d 597; Tleige v Troy Pediatrics, 237 AD2d 772, 774). While CPLR 3101(d)(1) vests courts with discretion to allow experts to testify "for good cause shown," here, the Supreme Court improvidently exercised its discretion in admitting the testimony, as the plaintiff failed to establish "good cause" for failing to exchange a proper disclosure as to Twersky within a reasonable time after she had been retained. Accordingly, Rosmarin is entitled to a new trial on the plaintiff’s claim against her alleging professional negligence in failing to timely administer electric shocks. "

Now a judge, then an associate.  A twisted asbestos litigation story from Texas.  "Associate "Deliberately Lied" to Clients, Jury Finds, Awards $129,000 in Damages "

"In a surprising verdict, a jury in a Dallas federal court found that a former associate with Baron & Budd "deliberately lied" to three clients, awarding them $129,000 in damages on Feb. 8.

The case was unusual because the three plaintiffs in Jacobs, et al. v William K. Tapscott Jr., et al. still are current Baron & Budd asbestos clients. Former associate Ken Tapscott recently left Baron & Budd after he was elected judge of Dallas County Court-at-Law No. 4.

As U.S. District Judge Sidney Fitzwater read the jury’s verdict in the case on Thursday evening, Tapscott laughed incredulously and shook his head. The jury found that Tapscott breached his fiduciary duty when he lied to his clients by telling them that all of the asbestos defendants they sued in 1997 had agreed to settle their case when in fact one defendant had not settled. "

Here is a Resources for attorneys Blog entry on Metadata.  Need to know about it?  They say that not knowing leads to malpractice:

"In today’s computer dependant world, the zealous advocate must be able to navigate his way through every conceivable form of discovery in order to effectively represent his or her client. Failure to seek the appropriate records or the failure to respond to discovery requests with the appropriate electronic discovery knowledge could potentially expose both client and attorney to the risk of sanctions for discovery abuses and/or result in the spoliation of evidence. Knowledge of the electronic evidence is crucial to any attorney hoping to retain clients. Once electronic evidence is in hand though, an attorney faces additional obstacles, specifically, regarding how to properly use such evidence. Gaining a true understanding of metadata can mean the difference between success and failure"

Hinshaw reports:  "Missouri Appellate Court Holds Third Party Payment of Lawyer’s Fees Alone Does Not Give Rise to Attorney-Client Relationship "

"The Missouri Court of Appeals for the Western District held that no attorney-client relationship was created simply by the fact the client’s stepfather paid the lawyer’s fees for a criminal defense and therefore affirmed dismissal of the legal malpractice action filed pro se by the stepfather"

This is a further report on a case we discussed this summer:

"$10,800,000 VERDICT AND RECOVERY – PROFESSIONAL NEGLIGENCE – LEGAL MALPRACTICE – BREACH OF DUTY OF LOYALTY OWED BY LAW FIRM TO CLIENTS PARTICIPATING IN NEGOTIATION OF SETTLEMENT AGREEMENT – DEFENDANT ALLEGEDLY CEASED REPRESENTING PLAINTIFFS IN CLASS ACTION LAWSUITS RESULTING IN BREAKDOWN OF MULTI-MILLION DOLLAR SETTLEMENT AGREEMENT BETWEEN PLAINTIFFS AND WELL-KNOWN WATER BOTTLING COMPANY.

County
U.S. District Court, District of Maine

In this legal malpractice matter, the plaintiffs, a group of small spring water bottlers, were represented by the defendant law firm in their claims against Nestle’ doing business as Poland Springs. The plaintiffs alleged that the underlying defendant Nestle’ was not using spring water, but rather, was using well water, consequently mislabeling its product. The defendant law firm was in the process of finalizing a multi-million dollar settlement negotiation when it chose to file class actions on behalf of other similarly situated clients in five states. This second-class action litigation caused Nestle to withdraw consent to the settlement with the initial plaintiffs. The plaintiffs brought suit alleging that the defendant law firm breached its duty of loyalty to the plaintiffs by representing other similar clients and filing suit on behalf of those clients’ on the eve of settling for the plaintiffs.

The evidence revealed that in May 2002, the plaintiffs, independent spring water bottlers approached the defendant law firm and another attorney with claims that the bottling company, Poland Spring, owned by Nestle’ was using well water instead of spring water and was mislabeling its products for the general public. After investigating the plaintiff’s allegations, the defendant law firm and the other attorney entered into a Representation Agreement with the plaintiffs. The plaintiffs agreed, at the defendant’s suggestion, that their claims should be resolved through mediation. Nestle’ had no desire for publicity regarding the case and there was a mediation agreement in place that prevented either party from filing suit or going public with their respective positions until five days after the mediation had ended.

The parties engaged in several mediations sessions commencing February 28, 2003. Following a mediation session on June 10, 2003, the other attorney representing the plaintiffs was able to negotiate the essential terms of a settlement agreement between the plaintiffs and Nestle. The plaintiffs gave the other attorney full authority to enter into a settlement agreement on their behalf. Nestle’ agreed to the settlement proposed. The plaintiffs, Glenwood and Carrabassett were each to receive a ten- year contract to supply Nestle’ with up to 65 million gallons of spring water in exchange for payments to each company of $450,000 annually. Nestle agreed to make a charitable donation of $500,000 per year for five years and supply home and office customers with $2,500,000 worth of free Poland Spring Water. The plaintiffs’ goal of resourcing Poland Spring Water was accomplished to the satisfaction of the plaintiffs under this ten-year plan. It was agreed that final judicial approval of the class action settlement was not required as a condition to settlement of the competitors’ claims. Rather, it was agreed that Nestle’ and representatives of the class would have 90 days in which to make a good faith effort toward achieving judicial approval of the class action settlement.

On June 18, 2003, the defendant law firm solicited new clients and filed multiple Poland Spring-related class actions against Nestle’ with a great deal of publicity in direct contradiction to the plaintiffs’ and Nestle’s agreement to keep the matter confidential. The plaintiffs alleged that these subsequently filed suits and the publicity generated by them were as a direct result of the information provided confidentially to the defendant law firm by the plaintiffs. As a result of the institution of the multiple suits against it in multiple states, Nestle’ refused to honor its settlement agreement with the plaintiffs.

The plaintiffs brought suit against the defendant law firm maintaining that it breached its fiduciary duty to the plaintiffs as clients and used confidential information provided by the plaintiffs in initiating its subsequent class action suits against Nestle.

The defendant denied the allegations of leg malpractice.

At the conclusion of the trial, the jury found in favor of the plaintiffs and against the defendant. The jury awarded the sum of $10,800,000 in damages allocating the damages as follows: $3,900,000 to Glenwood Farms and $3,900,000 to Carrabassett Spring, and $3,000,000 to the third plaintiff, Tears of the Clouds."

Try to make sense of this case.  It involves legal malpractice and the representations of Chinese hair importers.  See below for a discussion of the "discovery statute of limitations" which is very, very rarely invoked successfully.

"On January 9, 2006, pro se plaintiff, Chuanyu Xie ("Xie" or "Plaintiff"), filed a legal malpractice complaint against his former lawyer Chris Lin (a/k/a Xiaoyun Lin), the law firm of Chen, Lin, Li, & Jiang, LLP, the law office of Lin and Li, and the law office of De Hong (collectively "Defendants"). Upon Plaintiff’s request, the complaint was dismissed with prejudice against the law office of De Hong. The remaining Defendants now move to dismiss the complaint against them pursuant to Federal Rules of Civil Procedure 12(b) (1), (2), and (6) – lack of subject matter and personal jurisdiction, failure to state a claim, as well as expiration of the statute of limitations. In the alternative, the law offices of Lin & Li request that all allegations in the complaint related to them be stricken pursuant to Federal Rule of Civil Procedure 12(e), motion for a more definite statement. For the reasons set forth below, the 12(b) motion is GRANTED and thus, I need not reach the 12(e) motion. "

"Defendants also argue that Plaintiff’s legal malpractice claim is time-barred. I agree.

The legal malpractice cause of action must be brought within three years of the alleged malpractice, irrespective of whether the claim is based in contract or tort. N.Y. C.P.L.R. §214(6). Here the claim that gave rise to the cause of action for legal malpractice arose on November 6, 2001 when Judge Cote issued her opinion and held Xie personally liable for the damages. Xie filed his legal malpractice action on January 9, 2006, almost six years later. Nothing in the papers suggests otherwise.

Plaintiff contends however, that he did not discover the malpractice, specifically the alleged collusion between his lawyer, Chris Lin, and his adversary until three years after the conclusion of the case. Even if true, it does not salvage the Plaintiff’s case.[2] It is well-established that a cause of action for legal malpractice accrues on the date of the allegedly improper action, not on the date the malpractice was discovered.[3] Rafter v. Liddle, 2006 WL 2255093, *7 (S.D.N.Y. 2006); see also Wells Fargo Home Mortg., Inc. v. Zeichner, Ellman & Krause, LLP, 771 N.Y.S.2d 892, 893 (N.Y. App. Div. 2004).

Although Xie’s opposition motion (and to a lesser extent, his complaint) is littered with allegations of fraud, these allegations arise out of the same conduct that forms the basis of Xie’s legal malpractice claim. Under New York law, the fraud claim in these circumstances is considered duplicative of the malpractice claim, and thus, must be dismissed. See, e.g., id. at 9; see also Laruccia v. Forchelli, Curto, Schwartz, Mineo, Carlino & Cohn, LLP, 744 N.Y.S.2d 335, 335 (N.Y. App. Div. 2002). As a result, the six year statute of limitations associated with a fraud cause of action is not applicable here. "