Reported today in the NYLJ, plaintiff won a discrimination case. Now the battle has ranged into a legal fees dispute with her attorney. Even on the verge of winning, plaintiff herself has been sanctioned $5000 by Justice Acosts of Supreme Court, New York County for a series of ex-parte faxes. “A Manhattan judge has sanctioned a pro se plaintiff $5,000 for “contumacious conduct” after she inundated the court with ex parte communications concerning a dispute with her former lawyer.””In an Aug. 10 ruling, Justice Acosta awarded Ms. Jordan $257,428 in attorney’s fees and Mr. Lebowitz $205,410. He then sanctioned Ms. Jordan.

“Although plaintiff has been proceeding pro se in the attorneys fees portion of this litigation, the Court can no longer ignore her conduct nor excuse it by plaintiff’s personal circumstances or her frustrating ten-year battle with defendants,” Justice Acosta wrote in Jordan v. Bates Advertising, 118783/99.”

Details.

We reported on this case a short while ago. Plaintiff had her med mal case discontinued without permission, and then when she started a legal malpractice case, was told that her attorney was disciplined, only allowed to participate in mental hygiene cases and penniless. She settled the case for
$ 2000 only to find out that he had just been paid $ 94,000 by the state for his mental hygiene work. Now she is starting a public campaign in WVa for some form of compulsory legal malpractice insurance. Details.

Judge Squire, running in an election this year in Columbus, OH, is facing ethcial and judicial conduct charges. They will not be resolved until after the election. Of interest to this blog is the legal malpractice/judicial misconduct policy of $ 25,000 per claim. That amount seems woefully low. In her case there are 4 charges, thus $ 100,000 in coverage…and she has worked her way through already. Details.

Reporting again from the Madison County Record, here is an automobile legal malpractice case. “Two people involved in an auto accident in 2002 claim legal malpractice in a lawsuit filed against their former attorney and law firm.

According to the complaint filed Aug. 17 in St. Clair County Circuit Court, Sidney and LaToi Williams sustained neck and back injuries in an accident on Dec. 21, 2002, in Fairview Heights.

The Williams, represented by Thomas C. Rich of Fairview Heights, claim attorney Lisa Pennock and the firm Dixon & Johnston failed to properly and timely file a complaint for comparative negligence against the driver responsible for the accident.” Details

Imputation Doctrine No Longer Shields Negligent Auditors
Shareholders may sue accountants for negligent failure to detect fraud

Stephen V. Falanga
New Jersey Law Journal
August 30, 2006

“The New Jersey Supreme Court’s decision in NCP Litigation Trust v. KPMG, LLP, may dramatically affect the relationship between corporations and their outside auditors. The case, decided June 28, altered the legal landscape in New Jersey by holding that shareholders of defunct corporations may now pursue third party actions against the company’s accountants for negligent failure to detect fraud of corporate principals.” Details

“Minneapolis law firm Dorsey & Whitney breached its fiduciary duty of client loyalty by representing two clients on opposite sides of related cases and withheld from the clients that it may have committed legal malpractice during the Miller & Schroeder Investments bankruptcy case several years ago, a federal judge ruled this week. U.S. Bankruptcy Judge Nancy Dreher ordered the firm to surrender $887,444 in related legal fees.” Details

Could be the largest group of plaintiffs in a legal malpractice case. Defendant law firm represented health insurer. “The jury found Fillenwarth Dennerline liable for failing to notify the health plan’s trustees of its growing financial losses. The now-defunct plan, the Indiana Construction Industry Trust, was set up by about a dozen construction-related companies to cover their nonunion employees.”

“The verdict, by a Marion Circuit Court jury after a six-day trial, amounts to a potentially crippling financial blow for the 43-year-old Eastside firm Fillenwarth Dennerline Groth & Towe, known for its labor law practice.” Details

As a reminder of the many and varied paths of law and law practice, here is a quote from today’s NYLJ Outside Counsel Column, written by T. James Bryan, of Herrick Feinstein. He discusses an arcane area of tax law coupled with condo sales.

The bottom line? Legal malpractice.

“You are asked to represent a purchaser of a condominium unit in a building that was recently converted into a condominium. The building was a commercial building before the sponsor purchased it for the purpose of converting it into residential use.

The building, a ministorage facility, was purchased by the sponsor on or about June 10, 1998. The sponsor rehabilitated the building for residential use and filed an offering plan with the attorney general to sell condominium units in the building. This offering plan was accepted for filing by the attorney general on Jan. 31, 2000. The closings for sales of the units did not start until sometime after May 11, 2001. Your client closed on the purchase of her unit in August 2001.

So far, nothing unusual. You agree to a standard fee of between $1,500 and $2,000 for your services. As part of your due diligence, you read the offering plan that was approved by the attorney general a year before, and a title report that you carefully scrutinized.

Everything appears in order and your client closes on the purchase of her unit. One year after the August 2001 closing, your client calls you and, in a distressed (perhaps hostile) tone, tells you that she has just been received a tax bill from the city of New York (the July 1, 2002 tax bill for 2002-’03) for her share of $338,339 in “deferred taxes.” The title report made no mention of “deferred taxes.” Nothing in the offering plan indicated or even hinted at such a potential liability.

‘7 Vestry LLC v. N.Y.C. Dept. of Finance’

According to a recent decision of the Appellate Division, First Department, you did not do your job. 7 Vestry LLC v. New York City Dept. of Finance, 22 AD3d 174, 800 N.Y.S.2d 398 (1st Dept. 2005), appeal denied, 2006 N.Y.App. LEXIS 596 (lst Dept. Jan. 19, 2006).

You should have examined the July 1, 2000 bill rendered to sponsor, and have seen a notation on that bill indicating that $6,046 of that bill was noted as being for “ICIP DEFERRED.” From this, you should have realized that your client would be liable for paying taxes that otherwise would have been paid by an owner of the building that was sold to the sponsor and converted from commercial to residential use. The court said that:

The individual unit owners had constructive notice [of their future tax liability] because a prudent purchaser would have scrutinized the tax bills for the current year and years prior to the purchase date and would have seen the ICIP deferral notation in 2000 and investigated further. Each purchaser who purchased his/her unit after the July 1, 2000 tax bill took title subject to the tax lien created by the ICIP tax deferral repayment requirement, which lien is enforceable against that purchaser. Id. at 184.

You never thought, as part of your due diligence, to ask for the July 1, 2000 tax bill since the offering plan contained the total taxes for 1999-’00 and 2000-’01, and made no mention that a portion of the 2000-’01 bill was for “deferred ICIP taxes.”