We’re proud to announce that the New York Law Journal published out Outside Counsel column entitled “The Basics of Legal Malpractice” today.

We hope you enjoy.  “The term “legal malpractice” is loosely used, not only by the public but by attorneys as well. Generically, it conveys something wrong, boneheaded or contrary to the way things are usually done. It can sometimes mean that otherwise reputable work ended in a bad result.

When attorneys comment on the work of other attorneys, they often resort to an attorney malpractice scale. What they mean is that another attorney’s work fell below the standard believed to be “good and acceptable.” However, departure from good practice is just the start of the analysis.”

May plaintiff sue the former attorney after settling the underlying case?  It depends on whether plaintiff was effectively compelled to settle the underlying case or not.  This differs from a situation where the underlying case is lost.  How to tell whether the client was compelled or merely took the easy path?  Glenwayne Dev. Corp v James J. Corbett, P.C.  2019 NY Slip Op 06069 [175 AD3d 473] August 7, 2019 Appellate Division, Second Department discusses how.

“”In an action to recover damages for legal malpractice, a plaintiff must demonstrate that the attorney ‘failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession’ and that the attorney’s breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages” (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007], quoting McCoy v Feinman, 99 NY2d 295, 301 [2002]; see Darby & Darby v VSI Intl., 95 NY2d 308, 313 [2000]). “To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence” (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d at 442; see Davis v Klein, 88 NY2d 1008, 1009 [1996]). A legal malpractice cause of action “is viable, despite settlement of the underlying action, if it is alleged that settlement of the action was effectively compelled by the mistakes of counsel” (Bernstein v Oppenheim & Co., 160 AD2d 428, 430 [1990]; see Maroulis v Sari M. Friedman, P.C., 153 AD3d 1250, 1251 [2017]; Keness v Feldman, Kramer & Monaco, P.C., 105 AD3d 812, 813 [2013]; Tortura v Sullivan Papain Block McGrath & Cannavo, P.C., 21 AD3d 1082, 1083 [2005]).

In support of their motion, the defendants submitted the transcript of the court proceeding setting forth the terms of the settlement of the underlying action, which conclusively established that the plaintiff was not coerced into settling (see Schiller v Bender, Burrows & Rosenthal, LLP, 116 AD3d 756, 757 [2014]; Pacella v Whiteman Osterman & Hanna, 14 AD3d 545 [2005]; Laruccia v Forchelli, Curto, Schwartz, Mineo, Carlino & Cohn, 295 AD2d 321, 322 [2002]). The plaintiff’s allegations that it was coerced into settling the underlying action were utterly refuted by the admissions of its principals during the settlement proceeding that they had discussed the terms of the settlement with their attorneys, understood the settlement terms, and had no questions about them; that they were entering into the settlement freely, of their own volition, and without undue influence or coercion; and that they were satisfied with their legal representation (see Schiller v Bender, Burrows & Rosenthal, LLP, 116 AD3d at 757-758; Boone v Bender, 74 AD3d 1111, 1113 [2010]).

Accordingly, the defendants were entitled to dismissal of the complaint pursuant to CPLR 3211 (a) (1).”

Legal malpractice issues, and definitely attorney-client privilege issues arise in Estates.  They can come up prior to death, by virtue of the death or afterwards, but in each instance there is a question of the relationship of the estate and the attorney, and who is now the “client” in terms of rights and privileges between the client (Deceased and the Estate) and the attorney.

Matter of Thomas  2019 NY Slip Op 08293  Decided on November 15, 2019 Appellate Division, Fourth Department DeJoseph, J. is an example of the attorney-client privilege issue.

“In a prior appeal, we remitted the matter to Surrogate’s Court for further proceedings on the issue of ownership of certain stock in New York State Fence Company (NYSFC) after concluding that “[w]here, as here, an asset is not included in the inventory of the estate based upon respondent fiduciary’s assertion that he is the owner of the asset, it is respondent’s burden to show a legal and sufficient reason for withholding’ the asset from the estate” (id. at 1765). Upon remittal, the Surrogate held a nonjury trial during which respondent, in his capacity as executor, [*2]waived decedents’ attorney-client privilege, and decedents’ former counsel thereafter testified that she did not include a specific bequest with respect to Anthony’s NYSFC shares in his most recent will because Anthony had already transferred those shares to respondent. After the trial, the Surrogate concluded that respondent had in fact satisfied his burden and specifically established that the shares of NYSFC were sold and transferred to respondent prior to Anthony’s death. Petitioners appeal, and we affirm.

The primary issue on appeal is one of first impression in this Department and requires us to determine whether an executor has the authority to waive a decedent’s attorney-client privilege. The Second and Third Departments have answered that question in the affirmative, and we agree.

In Mayorga v Tate (302 AD2d 11 [2d Dept 2002]), the assignee of the executor of the decedent’s estate brought a legal malpractice action against the decedent’s attorney and sought to obtain pretrial disclosure “of the file that [the attorney] maintained in connection with” his representation of the decedent (id. at 12). The attorney refused to disclose the file, claiming that it was protected by the attorney-client privilege (id.). The trial court held that the assignee could waive the privilege and that the attorney could not invoke the privilege to avoid producing the requested discovery (id.). The Second Department affirmed, stating:

“We conclude by returning to the basic thesis that it makes no sense to prohibit an executor from waiving the attorney-client privilege of his or her decedent, where such prohibition operates to the detriment of the decedent’s estate, and to the benefit of an alleged tortfeasor against whom the estate possesses a cause of action . . . That an executor . . . may exercise authority over all the interests of the estate left by the [decedent], and yet may not incidentally have the right, in the interest of that estate, to waive the [attorney client] privilege . . . would seem too inconsistent to be maintained under any system of law . . . We therefore conclude that, under the terms of CPLR 4503, just as under the common law, an executor may waive the attorney-client privilege of his or her decedent” (id. at 18-19 [internal quotation marks omitted]).

The Third Department endorsed that same view in Matter of Johnson (7 AD3d 959, 960-961 [3d Dept 2004], lv denied 3 NY3d 606 [2004]).”

There is nothing new about the requirement that a defendant show both a reasonable excuse for the default as well as a meritorious defense to the action when seeking to vacate a default judgment.  Neely v Felicetti
2019 NY Slip Op 08282  Decided on November 14, 2019  Appellate Division, First Department simply repeats this ancient formula.

“Defendants’ motion to vacate the default judgment entered against them was properly denied. Defendants’ explanation that their October 20, 2017 email forwarding plaintiff’s summons and complaint to their counsel was not received may explain their failure to timely answer (see Matter of Rivera v New York City Dept. of Sanitation, 142 AD3d 463, 464 [1st Dept 2016]). However, defendants failed to explain their continued failure to answer the complaint, or why they did not submit opposition to plaintiff’s motion for a default judgment despite their acknowledgment that they received it. Nor did they seek vacatur of the default judgment until more than nine months after it was entered (see Hertz Vehs. LLC v Westchester Radiology & Imaging, PC, 161 AD3d 550 [1st Dept 2018]). Defendants’ claim that the parties were engaged in settlement negotiations is not a reasonable excuse for their default (see Flora Co. v Ingilis, 233 AD2d 418, 419 [2d Dept 1996]).

In view of the foregoing, this Court need not consider whether defendants demonstrated a potentially meritorious defense to the action (see Colony Ins. Co. v Danica Group, LLC, 115 AD3d 453, 454 [1st Dept 2014]).”

Personal injury law is rife with violations of the Judiciary Law.  Cases over the years have identified “runners” who go to accident sites and hospital ERs to get clients, payments of cash to clients, promises to “fund” the case and improper solicitations.  Ginarte Gallardo Gonzalez & Winograd, LLP v Schwitzer  2019 NY Slip Op 33275(U) November 4, 2019 Supreme Court, New York County Docket Number: 159991/2018 Judge: James E. d’Auguste is the latest case to be heard, and it asks the question of whether this conduct supports a Judiciary Law §487 claim.  Here, it does not.

“The complaint alleges that beginning in June 2018, several of plaintiff’s clients, all of whom had previously executed retainer agreements, substituted the Schwitzer Firm or the Garcia Firm for plaintiff (id., iii! 31-33). The complaint alleges that plaintiff had referred each of those clients to the same pain management specialist, “Dr. X,” that defendants  met with plaintiff’s clients at or near Dr. X’s office, and that defendants improperly solicited or enticed plaintiff’s clients to substitute the Schwitzer Firm or the Garcia Firm as legal counsel (id., iii! 34-35). Pena and Gomez accompanied each client to the Schwitzer Firm’s office, where they met with Schwitzer, Merlino, Semel-Weinstein, and Diamond (id., iii! 36-37). The complaint further alleges that defendants offered to pay each client $2,000 or $3,000, help them obtain financing for their cases, and arrange transport to and from their medical appointments as part of a concerted effort to persuade them to terminate their retainers with plaintiff (id., if 35). The complaint asserts that defendants purportedly told plaintiff’s clients that plaintiff was ill-equipped or incompetent to handle their cases, that plaintiff was a “thief’ or “the biggest thief,” that plaintiff lied and stole its clients’ money, and that plaintiff was the equivalent of “doctors that kill you” (id.). ”

“The second cause of action is grounded upon an alleged violation of Judiciary Law§ 487. Defendants argue the claim must fail because it was not pled with the requisite particularity describing defendants’ intentional deceit or egregious conduct. Plaintiff posits that its submissions establish a pattern of wrongdoing and deceit.

Judiciary Law § 487 provides, in part, that an attorney who is “guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party … forfeits to the party injured treble damages, to be recovered in a civil action.” The statute focuses
on the intent to deceive (see Amalfitano v Rosenberg, 12 NY3d 8, 14 [2009]). Thus, a plaintiff must plead the attorney’s intentional deceit damages caused by the deceit (see Doscher v Mannatt, Phelps & Phillips, LLP, 148 AD3d 523, 524 [1st Dept 2017]). The alleged deceit must be directed at the court or must occur during a pending judicial proceeding (see Costalas v Amalfitano, 305 AD2d 202, 204 [1st Dept 2003]). It must be shown that the alleged deceit “reaches the level of
egregious conduct or a chronic and extreme pattern of behavior” (Savitt v Greenberg Traurig, LLP, 126 AD3d 506, 507 [1st Dept 2015] [internal quotation marks and .citation omitted]; but see Dupree v Voorhees, 102 AD3d 912, 913 [2d Dept 2013]). The allegations must be pied with particularity (see Facebook, Inc. v DLA Piper LLP (US), 134 AD3d 610, 615 [1st Dept 2015], Iv denied 28 NY3d 903 [2016]).

As an initial matter, the statute does not apply to non-attorneys, such as the Individual Defendants (see Neroni v Follender, 137 AD3d 1336, 1338 [3d Dept 2016], appeal dismissed 27 NY3d 1147 [2016], rearg denied 28 NY3d 1024 [2016]). Accordingly, the second cause of action
is dismissed against them.

As to the remaining defendants, the second cause of action is also dismissed. Relief under the statute is available only to a plaintiff who was a party in a pending judicial proceeding (see Costa/as, 305 AD2d at 204). While the statute does not limit recovery only to the offending
attorney’s client (see Fields v Turner, 1Misc2d 679, 680-681 [Sup Ct, NY County 1955]), “[t]he ‘party’ referred to is clearly a party to an action pending in a court in reference to which the deceit is practiced, and not a person outside, not connected with the same at the time or with the court” (Gelmin v Quicke, 224 AD2d 481, 483 [2d Dept 1996], quoting Looff v Lawton, 97 NY 478, 482 [1884]). Plaintiff was not a party to any pending, underlying judicial proceeding.

Plaintiffs reliance on the client affidavits, if considered, is misplaced. Essential to a claim under Judiciary Law § 487 is harm to the plaintiff caused by the purportedly deceitful acts (see Doscher, 148 AD3d at 524). Each affiant chose to remain a client of plaintiff. The facts in Fields
(1 Misc 2d 679) are also dissimilar. In Fields, an attorney, who  represented the plaintiffs wife, made several representations to the court in order to procure an arrest warrant for the plaintiff (id
at 680), whereas here, the purportedly false statements by the Schwitzer Defendants and the Garcia Defendants were not made to the court while they were representing a party in a pending judicial
proceeding.”

This multi-million dollar fraud led to convictions and a claim against Katten Muchin.  Nevertheless, too much time has gone by and Katten is off the hook.  Wimbledon Financing Master Fund, Ltd. v Hallac  2019 NY Slip Op 33281(U)  November 4, 2019  Supreme Court, New York County
Docket Number: 652769/2018 Judge: Saliann Scarpulla discusses two interesting issues:  continuous representation and whether concealing malpractice is a separate claim for fraud.

“This action is one of several stemming from a massive fraud involving
Wimbledon’s investment advisor, Weston Capital Asset Management, LLC (“Weston”), and its related affiliates, which resulted in guilty pleas by defendant Albert Hallac (“Hallac”), Weston’s founder and president, and Keith Wellner (“Wellner”), Weston’s general counsel. In addition, Hallac’s and Wellner’s co-conspirators – David Bergstein (“Bergstein”), Gary Hirst (“Hirst”) and Jason Galanis (“Galanis”) – have been convicted or pleaded guilty for their roles in the schemes. ”

“The statute of limitations for claims of legal malpractice is three years. CPLR 214(6); see also Duane Morris LLP v. Astor Holdings Inc., 61 A.D.3d418, 420 (1st Dept. 2009). A legal malpractice cause of action accrues “when the malpractice is committed, not when the client learns of it.” Palmeri v. Willkie Farr & Gallagher LLP, 156 A.D.3d 564, 567 (1st Dept. 2017) (citation omitted); see also DeStaso v. Condon Resnick, LLP,
90 A.D.3d 809, 812 (2d Dept. 2011).

Notably, the New York legislature amended CPLR 214 (6) in 1996 to “make clear that ‘where the underlying complaint is one which essentially claims that there was failure to utilize reasonable care or where acts of omission or negligence are alleged or claimed, the statute of limitations shall be three years if the case comes within the purview of CPLR Section 214 ( 6), regardless of whether the theory is based in tort or in a breach of contract.”‘ In re R.M Kliment & Frances Hals band, Architects (McKinsey & Co., Inc.), 3 N.Y.3d 538, 541-542 (2004) (citation omitted). Further, CPLR 214 (6) “was enacted to prevent plaintiffs from circumventing the three-year statute of limitations for professional malpractice claims by characterizing a defendant’s failure to meet professional standards as something else.” Johnson v. Proskauer Rose LLP, 129 A.D.3d 59, 68 (1st Dept. 2015). To determine whether a claim is duplicative of a malpractice claim, a court must “discern[] the essence of each claim.” Id. ”

“Additionally, Wimbledon’s allegations that Katten engaged in continuing concealment by failing to disclose information about Gerova and Arius Libra to the board amount to allegations that Katten failed to disclose its own malpractice, and do not furnish support for fraud claims. See White of Lake George v. Bell, 251 A.D.2d 777, 778 (3d Dept. 1998) (finding that where “a fraud claim is asserted in connection with charges of professional malpractice, it is sustainable only to the extent that it is premised upon … something more egregious than mere ‘concealment or failure to disclose [one’s] own malpractice.”‘) (citations omitted). ”

“The continuous representation doctrine “tolls the Statute of Limitations only where the continuing representation pertains specifically to the matter in which the attorney committed the alleged malpractice.” Shumsky v. Eisenstein, 96 N.Y.2d 164, 168 (2001). The doctrine, however, “is limited ‘to the course of representation  concerning a specific legal matter,’ and is not applicable to the client’s ‘continuing general relationship with a lawyer. .. involving only routine contact for miscellaneous legal representation … unrelated to the matter upon which the allegations of malpractice are predicated.”‘
Encalada v. McCarthy, Chachanover & Rosado, LLP, 160 A.D.3d 475, 476 (1st Dept. 2018) (citation omitted).

Wimbledon has not demonstrated that the continuous representation doctrine applies, nor can it, as the last action by Katten detailed in the complaint occurred in July 2012. See 860 Fifth Ave. Corp. v. Superstructures-Eng’rs & Architects, 15 A.D.3d 213, 213 (I st Dept. 2005), (noting that “plaintiff [has] the burden of demonstrating that the
continuous representation doctrine applied”). The fact that Katten was still retained as attorney for Wimbledon and Partners II until 2014 is insufficient to establish applicability of the continuous representation doctrine because such representation is not related to the transactions giving rise to the claims. See Zaref v. Berk & Michaels, 192 A.D.2d at 348
(1st Dept. 1993) (stating that a “pleading must assert more than simply an extended general relationship between the professional and client … in that the facts are required to demonstrate continued representation in the specific matter directly under dispute”) (internal citations omitted).

In additions, I find Wimbledon’s remaining arguments unavailing. “

Many cases are lost, across the spectrum of legal issues, for procedural issues.  It is especially poignant to see a legal malpractice case lost on service of process issues. Gengo v Storms  2019 NY Slip Op 02504 [171 AD3d 709]  April 3, 2019  Appellate Division, Second Department presents such a situation.

“On October 23, 2016, the plaintiff commenced this action sounding in legal malpractice. In March 2017, the defendant moved, inter alia, pursuant to CPLR 3211 (a) (8) to dismiss the complaint based on the failure to serve process after two defective attempts at service. The plaintiff opposed the motion and cross-moved, among other things, pursuant to CPLR 306-b to extend the plaintiff’s time to serve process. After a hearing to determine the validity of service, the Supreme Court granted the subject branch of the defendant’s motion and denied the subject branch of the plaintiff’s cross motion. The plaintiff appeals.

“An extension of time for service is a matter within the court’s discretion” (Leader v Maroney, Ponzini & Spencer, 97 NY2d 95, 101 [2001]). Such a motion may be granted upon “good cause shown or in the interest of justice” (CPLR 306-b). “ ’Good cause’ and ‘interest of justice’ are two separate and independent statutory standards” (Bumpus v New York City Tr. Auth., 66 AD3d 26, 31 [2009]).

Both of the plaintiff’s attempts at service were defective. The plaintiff failed to establish that he exercised reasonably diligent efforts in attempting to effect proper service. Accordingly, he did not establish a basis for a “good cause” extension of time to serve process pursuant to CPLR 306-b (see Hobbins v North Star Orthopedics, PLLC, 148 AD3d 784, 787-788 [2017]; Wilbyfont v New York Presbyt. Hosp., 131 AD3d 605, 607 [2015]). Nor has the plaintiff set forth grounds for an extension of time in the interest of justice. Accordingly, we agree with the Supreme Court’s determination to grant that branch of the defendant’s motion which was to dismiss the complaint and to deny that branch of the plaintiff’s cross motion which was to extend the time to serve process. Mastro, J.P., Roman, Hinds-Radix and Maltese, JJ., concur.”