Dorsey & Whtney is reported to be facing further woes from its Casino legal representation.  Law.Com writes:

"A legal battle over a bungled finance deal for an Indian casino in upstate New York has Dorsey & Whitney scrambling to deflect a multimillion-dollar hit for legal malpractice.

Dorsey & Whitney already has filed an appeal to a judgment of about $1 million from a decision in Minnesota bankruptcy court. At the same time, it is fighting a recommendation from the same bankruptcy court that calls for the firm to pay $2.8 million for its part in the failed casino deal.

By the time it is all over, the law firm could be forced to pay up to $4 million in damages.

The malpractice matter stems from a $28 million financing arrangement for the Akwesasne Mohawk casino, which opened in Hogansburg, N.Y., in 1999. Dorsey & Whitney served as outside counsel for Minnesota investment bank Miller & Schroeder, which helped secure financing for the project and administered loans provided by 31 banks to the casino’s owner."

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Plaintiff was the finacee of a World Trade Center victim and hired defendant attorney to pursue the WTC 9/11 Fund.  She was shut out on all counts.  As a fiancee she was not premitted recovery under any NJ statute, and the 9/11 Fund followed state law.

After being shut out across the board, she sued her attorney.  The matter was dismissed on Summary Judgment, and the Appellate Court worked its way through all the different permutations or claims.  The case.

All right, this is admittedly a very dry subject.  However, this legal malpractice case arose after a federal class action securities case, and involves $ big money.  Here is the 2d Circuit Court’s decision, as reported in the Federal Civil Practice Bulletin.

Here is an article from Law.Com which tells the story of resignor Jay I. Gordon.  He resigned from the bar last month after admitting $2 million in kickbacks from tax shelters to whom he referred and sent clients.  The story. GT is also defendant in at least one legal malpractice case mentioned in the article.

Here is a sad report from Las Vegas.  Attorney Lawrence Davidson is a missing defendant in a Federal indictment which was to be tried starting October 30.  Defendant is charged with stealing $936,300 in settlement proceeds and taking off.  Apparently not everone stays in Las Vegas.

One  of the elements in legal malpractice is privity.  That term means, a contractual relationship.  Cllients often want to sue their opponent’s attorney, usually for the things they did for the opponent.  For the most part, one may sue only his attorney, the is, the attorney who was retained.

One exception comes up with opinion letters or due dilligence reports.  If a third party relies upon such letters or reports, even by an attorney whom they did not hire, and does so to a detriment, then there may be a close enough relationship for a legal malpractice case.

What happens when the plaintiff may or may not have been able to collect from the underlying defendant? In attorney malpractice, it is always the obligation of plaintiff  to prove that "but for" the negligence of the attorney, he would have had a successful or better outcome. What happens when the entity he would have successfully sued, "but for" the defendant attorney’s negligence, has gone out of business, or had no insurance, or its insurance carrier denied coverage?

Prior to <em>Lindenman v. Kreitzer</em> 7 AD3d 30 [1st Dept 2004] it was the obligation of plaintiff to prove collectability as a <strong><em>prima facie</em></strong> element of its direct case.

Now, however, it is defendant attorney’s burden to show an "avoidence or mitigation" that the judgment, hypothetical or real, was uncollectable. "The attorney should bear the inherent risks and uncertainties of proving it."

The attorney is required to prove uncollectability only for a "reasonable time", not 20 years.

A common law retaining lien entitles the outgoing attorney to retain all papers, securities, or money belonging to the client that came into the attorney’s possession in the course of representation, as security for payment of attorney’s fees. Arising from Judiciary Law 475, it is enforceable only by retention of the items themselves and is lost if the file or documents are no longer in the attorney’s possession.

A charging line similarly arises and attaches to any recovery and thus secures the attorney’s right to compensation. A hearing will be held to determine fees, based upon <em>Quantum meruit</em>.

<strong><em>Quantum meruit</em></strong> is the fair and reasonable value of the services rendered, which may be more or less than the amount provided in the contract or retainer agreement and is determined by "taking into consideration the character of the services, the nature and importance of the litigation, the degree of responsibility imposed or incurred, the amount or value involved, the length of time spent, the ability skill and experience required and exercised, the character, qualifications and standing of the attorney and the results achieved. The recovery is not limited to the amount billed, the original terms of the retainer agreement, and may be less or more than the amount which might have been recovered under a contingency fee or other measuring tools of fees.