Its a huge legal malpractice case, and we reported it over the summer.  Now WG moves for summary judgment against the National Benevolent Association of the Christian Church, which claims malpractice in their Chapter 11 Bankruptcy filing.  We’ll follow for the decision.  In the meantime, Anthony Lin of the NYLJ writes:

"Weil Gotshal Moves to End Legal Malpractice Suit

Weil, Gotshal & Manges has moved for summary judgment in a legal malpractice suit brought against it in Texas by a former bankruptcy client. The National Benevolent Association of the Christian Church (Disciples of Christ), one of the largest non-profits ever to file for bankruptcy, sued Weil Gotshal in September 2005, claiming the New York law firm pushed it into a "disastrous" Chapter 11 filing rather than exploring a negotiated settlement with creditors. The St. Louis, Missouri-based group, which runs shelters for the elderly and teens, once had 2,500 employees in 20 states and annual revenues and contributions of $145 million. Following the 2004 bankruptcy, the group shrank to 365 employees in five facilities, though it retained a $70 million endowment. But in its summary judgment motion filed last week, Weil Gotshal said the group’s claims were based on "nothing more than speculation, conjecture and surmise." The law firm said there was no evidence that the group’s creditors had ever offered it any out-of-court restructuring, much less a "better deal" than the group got through its bankruptcy filing. Weil Gotshal also noted that the malpractice suit was filed by the association’s current board of trustees, not the one it had represented. The firm said all of the board members in office at the time were fully apprised of the bankruptcy and alternatives, and none held Weil Gotshal to blame for the outcome. The firm’s motion will be heard Jan. 27 in the U.S. Bankruptcy Court for the Western District of Texas, where the group filed its Chapter 11 petition." – Anthony Lin

Legal malpractice is always a case within a case.  This particular report is of a collection matter, followed by a failed legal malpractice matter, followed by a malicious prosecution case.  Anthony Lin at the NYLJ reports:

"A New York judge has permitted a lawyer to proceed with a malicious prosecution suit against the mortgage company and law firm that previously brought a legal malpractice suit against her. "

"In denying motions to dismiss by both Blue Chip and the law firm, Manhattan Supreme Court Justice Shirley Werner Kornreich (See Profile) said Ms. Strumpf’s suit had sufficiently alleged a lack of probable cause for the legal malpractice suit against her as well as injury stemming from that suit. "

The case is Stumpf v. Asdourian   and is found at http://www.nylawyer.com/adgifs/decisions/122606kornreich.pdf

The Madison Record reports on legal malpractice.  It is perhaps the largest contributor to legal malpractice journalism we’ve encountered.  Here is an interesting point.  Madison County, IL has more class actions than any other single county in the US. 

Here is a story about a big class action firm, which is reported not to have legal malpractice insurance.  The story.

In     Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP    the question of whether a law firm defending a client has an obligation to determine whether there is excess insurance available. 

This case, determined by the Second Department, has the following issue:

"The principal issue presented on this appeal concerns whether a law firm, retained by a primary carrier to defend its insured in a pending action, has any obligation to investigate whether the insured has excess coverage available and, if so, to file a timely notice of excess claim on the insured’s behalf. " 

"In any event, it seems self-evident that the question whether, in the ordinary case, an attorney could be found negligent for failing to investigate insurance coverage would turn primarily on the scope of the agreed representation – a question of fact – and on whether, in light of all relevant circumstances, the attorney "failed to exercise the reasonable skill and knowledge commonly possessed by a member of the legal profession" (Arnav Indus. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 303-304; see Darby & Darby v VSI Intl., supra at 313; Levy v Greenberg, 19 AD3d 462). We cannot say, as a matter of law, that a legal malpractice action may never lie based upon a law firm’s failure to investigate its client’s insurance coverage or to notify its client’s carrier of a potential claim."

"Consequently, just as we are unprepared to say, as a matter of law, that a failure to investigate the existence of excess insurance coverage may never give rise to a legal malpractice action against an attorney retained directly by a defendant in a personal injury action, we take the same view with respect to an attorney who is retained, not by the defendant directly, but by its carrier. Accordingly, the defendant’s pre-discovery motion to dismiss the cause of action sounding in legal malpractice should have been denied. "

Here is the entire Case

 

Privity is a requirement in almost all cases of legal malpractice.  One particular sticking point is the negligently created estate.  Who has the right to sue, if anyone?  Here is a Texas case which differentiates between the damaged estate [think: unnecessary tax, costs, loss of assets] and a disappointed will beneficiary.

In this case, the estate was able to sue its attorney, even thought testator was dead. The Texas case.

 

Insurers, defense counsel, lecturers all tell us that attorney fee suits, and threats, are a major source of discipline and legal malpractice litigation.  Here is yet another example.

"When a client hesitated over paying his bill, Richard Ledingham threatened her with criminal prosecution for "theft of services" and he didn’t stop there: He also warned that she might lose her business, her home and her professional license.

Those actions — all to collect a fee judged to be exorbitant — are cause for suspending the River Vale solo from practice for three months, says New Jersey’s Disciplinary Review Board.

Despite an ethics committee’s call for a reprimand and Ledingham’s lack of prior discipline in 25 years of practice, the board sought suspension "insomuch as he threatened his client’s ruination in all aspects of her life, even including her ability to provide for her children."

In its opinion issued Monday, In re Richard Ledingham, DRB 06-235, the board noted Ledingham’s failure to appear at the District IIA Ethics Committee hearing below, his lack of contrition and his attempt to collect "a grossly excessive fee."

According to the opinion, Ledingham billed his client Karen Ferwerda $52,742 for representing her in the purchase of a Sylvan Learning Center franchise in December 2003. When Ferwerda retained him in June 2003, Ledingham agreed to send monthly invoices but never did do until the purchase closed.

Ledingham’s work for Ferwerda was not extensive, the DRB found. He reviewed documents for a Small Business Administration loan for which she was approved but did not pursue. He reviewed a lease agreement but did not negotiate the terms. And he looked over the Sylvan franchise agreement, which was presented to her as a "take-it-or-leave-it" deal.

Ledingham, also a certified public accountant, charged Ferwerda $175 an hour. But his charges included 47 hours for studying a four-page section of the Internal Revenue Code §197, which deals with amortization of intangibles. "