Legal Malpractice Law Review

ABA National Legal Malpractice Conference in NYC April 18-20

Ben Wasserman — Sat, 14 Apr 2012 08:28:41 -0500

The Legal Malpractice Law Review and legalmalpractice.com are pleased to be among the sponsors of the Spring 2012 American Bar Association National Legal Malpractice Conference, which will take place at New York's Waldorf Astoria Hotel from April 18 to 20.

The ABA National Legal Malpractice Conference has become the showcase event for this newly recognized substantive area of law. The Conference's Primary Sponsor, the ABA Standing Committee on Lawyers' Professional Liability, has graciously invited all law students in Hofstra University Law School's Lawyer Malpractice program to attend all sessions of the Conference.

Hofstra Law School's Lawyer Malpractice program has been offered to its advanced students as a full semester course since 1990. Designed, initiated and taught by Bennett J. Wasserman, the course has become a very popular offering at Hofstra Law. Hofstra has long recognized the value of such a course in its commitment to continuously upgrade the quality of lawyering. The importance of including such a course in the law school curriculum-- in addition to Professional Responsibility, has now been recognized by many other law schools which have begun to include such a stand alone course in their course offerings.

The vitality of Hofstra Law School's ongoing commitment to this substantive area of law--and the central role it plays in building better lawyers, is evident with the recent addition to its full time faculty of Professor Susan Saab Fortney, the lead co-author of the first case book for law students entitled "LEGAL MALPRACTICE LAW: Problems and Prevention" (Thomson/West). The Legal Malpractice Law Review has been proud to count Professor Fortney as a member of its Editorial Board, since its inception.

Professors Wasserman and Fortney are delighted to welcome their Lawyer Malpractice students to the ABA National Legal Malpractice Conference and deeply thank the Standing Committee for its graciousness in extending the invitation to include law students in its Conference events, which are listed in its on line Program.

Hofstra Law Students may find the following events at the Conference to be of particular interest:

Wednesday, April 18:

6 -7:30 pm: Welcome Reception

Thursday, April 19:

10:15 to 11:15 am: Case Law Developments

11:30 am to 12:30 pm: Outside the Box: Non-Traditional Means of Resolving Legal Malpractice Cases

2:45 to 4:15 pm: A New Era: The Trends, Benefits and Risks in Legal Outsourcing

Friday April 20:

9:00 to 10:30 am: In the Trustee's Backyard: Defending Attorneys against [Bankruptcy] Trusee Claims

10:45-11:45: A Day in the Life of a Tablet Litigator [All about the important new role and uses of the iPad and other tablet devices].

To all 500+ Conference guests, Welcome to the "Big Apple". Enjoy this wonderful Conference and all the wonders that New York City has to offer.

NY: Do Attorneys Owe a Fiduciary Duty to Limited Partners?

Ben Wasserman — Tue, 03 Apr 2012 07:06:50 -0500

Eurycleia Partners, LP v. Seward &Kissel, LLP, 12 N.Y.S. 3d 553(2009)

NY: Underlying Securities Fraud

Student Contributor: Mordechai Goldenberg

Facts: Plaintiffs are limited partners in a hedge fund that was managed by John Whittier. Plaintiffs allege that the hedge fund’s offering memorandum asserted the following:
1) That the hedge fund will be audited by American Express Tax and Business Services, Inc.(TBS).
2) To ensure adequate investment diversification, individual holdings in the fund's portfolio would be capped at 10% of the total assets at any given time, based on the original cost of the stock.
Unbeknownst to plaintiffs, the hedge fund—at Whittier's direction—began to invest heavily in the stock of Endwave Corporation. By the summer of 2005, Wood River's investment in Endwave shares represented approximately 65% of the fund's total assets and over 35% of Endwave's outstanding shares. After peaking at $54 per share in mid-July, Endwave's share price gradually declined until it plummeted to $14 in late September. As a result, Whittier was unable to meet plaintiffs' redemption requests.

The offering memorandum had been prepared by defendant- law firm. Plaintiffs allege that the law firm was aware that the hedge fund was not represented by TBS, and that the law firm was aware that the hedge fund had invested more than the 10% cap, and that they had violated SEC laws. Plaintiffs allege that defendants had a duty to disclose this information to them

Issue: Did the law firm have a fiduciary duty to the limited partners?

Ruling: No. The court held that the fiduciary duties owed by a limited partnership's attorney to that entity do not extend to the limited partners.

Lesson: In order to maintain a legal malpractice claim against an attorney the attorney must have a fiduciary duty to plaintiff. As a limited partner, one cannot rely on the fiduciary duty owed to the entity as it does not extend to the limited partners.

NJ: Affidavit of Merit Statute and Lateness

Ben Wasserman — Mon, 02 Apr 2012 06:38:22 -0500

Stoecker v. Echevarria, 975 A. 2d 975 - NJ: Appellate Div. 2009

Student Contributor: Christine Maharaj

NJ: Underlying Real Estate Transaction

Facts: Plaintiff brought malpractice claim against defendant (attorney) but served affidavit of merit more than 120 days after defendant’s amended answer. The trial court dismissed plaintiff’s claim for failure to comply with the affidavit of merit statute.

Issue: (1)Did trial court correctly dismiss plaintiff’s claim for failure to comply with the affidavit of merit statute? (2) Do estoppel and laches prevent defendant from raising the affidavit of merit as a defense? (3) Was dismissal of plaintiff’s malpractice claim unwarranted because of defendant’s failure to mention the affidavit of merit or ask the court to establish a deadline at the case management conference?

Ruling:

1. Yes. An affidavit of merit must be provided to the defendant within sixty days of the filing of the answer, or for good cause shown within an additional sixty day period. The failure to serve the affidavit within 120 days results in a dismissal of the complaint with prejudice. However, if the plaintiff shows that the failure to timely serve it is due to extraordinary circumstances the complaint may be dismissed without prejudice. The doctrine of substantial compliance may be invoked so that technical defects will not defeat a valid claim. A plaintiff must show: a series of steps were taken to comply with the statute, general compliance with the purpose of the statute, the defendant had reasonable notice of the plaintiff’s claim, a reasonable explanation for the plaintiff’s failure to strictly comply with the statute and lack of prejudice to the defendant. Here the plaintiff’s attorney had the affidavit of merit but did not serve it until more than 120 days after the defendant served an amended answer to the complaint. Plaintiff’s attorney did not provide any explanation for failure to serve it within the required time, therefore there was no showing that the failure was due to extraordinary circumstances. Plaintiff did not establish substantial compliance. Defendant did not have reasonable notice of the legal malpractice claim.

2. No. defendant never led plaintiff to believe she had a viable claim, or sit back while plaintiff while plaintiff was incurring expenses pursuing a claim against her.

3. No. The court directed plaintiff to respond to discovery and serve her expert report prior to the deadline for filing the affidavit of merit. If plaintiff complied with the order prior to the motion to dismiss she could have argued substantial compliance.

Lesson: In order for plaintiff’s failure to timely file an affidavit of merit to be dismissed without prejudice the plaintiff must show that the lateness was due to extraordinary circumstances. Or the plaintiff can invoke the doctrine of substantial compliance.

FL: Defendant Can Raise Affirmative Defense SOL in Answer in Complaint Does Not Show the Cause is Time Barred

Ben Wasserman — Thu, 29 Mar 2012 07:16:21 -0500

Jelenc v. Draper, 678 So.2d 917 (Fla. App. 1996)

Student Contributor: Ross Eisenberg

FL: Underlying Personal Injury

Facts: Plaintiffs retained the Defendant law firm for a personal injury action. The partner gave the case to his associate to handle. The associate misrepresented to the Plaintiff that he had commenced legal proceedings. Plaintiff made phone calls to Defendant that were never returned. Finally, defendant told plaintiff that his associate had been discharged from the firm and entered an alcoholics rehabilitation program. Plaintiffs appeal the order dismissing their complaint and claim that it is not time barred.

Issue: Whether the malpractice action fell outside of the SOL and should be dismissed.

Rule: No, the SOL does not bar this action. Paragraph 95.11(4)(a), Florida Statutes (1995) provides a two year statute of limitation for professional malpractice actions, with the period of limitation running "from the time the cause of action is discovered or should have been discovered with the exercise of due diligence."
The fact that the Plaintiff found out in December, 1992, that the Defendant had discharged his associate does not demonstrate when the Plaintiffs knew or should have known the associate had acted negligently with respect to their case, nor does it provide a date from which it could be determined that the Plaintiffs either knew or should have known that the Defendant had negligently supervised his associate. The associate could have been discharged for any number of reasons. Knowledge of the associate's discharge is not synonymous with knowledge of a cause of action for professional malpractice.

Lesson: The Defendant can raise the SOL defense in his answer if the complaint does not indicate that the applicable SOL bars the action. But the discovery rule would seem to bar the defense here.

PA: Burden of Proof Preponderance of the Evidence for Proximate Cause

Ben Wasserman — Thu, 29 Mar 2012 07:10:57 -0500

Ferencz v. Milie, 535 A.2d 59 (1987)

PA: Underlying negligence and malpractice claim

Student Contributor: Christina Tsirkas

FACTS: Client slipped and fell on an icy patch in a hospital parking lot, resulting in a broken knee. Client retained attorney to sue the hospital for negligence. Attorney did not conduct any discovery outside of visiting the parking lot, and did not file client’s claim within the statute of limitations. Client then brought suit against attorney alleging professional negligence and malpractice. Attorney’s defense was that he did not believe client had a viable negligence claim against the hospital. The case was tried under the theory that in an action for attorney negligence/malpractice, client must show that “but for” the attorney’s negligence, client would have recovered money in client’s suit against the hospital.

ISSUE: In Pennsylvania, what standard of proof does a client have to meet with respect to proximate cause in order to recover from attorney in a malpractice claim?

RULING: Client has to prove her underflying case against the hospital by a preponderance of the evidence in order to recover from attorney in a malpractice action.

LESSON: An attorney’s negligence in not timely filing a client’s case is not enough for recovery in a malpractice action unless the client can prove by a preponderance of the evidence that he would have recovered in his other case.

NY: Plaintiff's Misconduct Can't Be Involved In Malpractice

Ben Wasserman — Wed, 28 Mar 2012 06:49:07 -0500

Selletti v. Liotti, 804 NYS 2d 739, 22 A.D.3d 739 (2d Dept 2005)

NY: Underlying litigation; sanctions for discovery abuses

Student Contributor: M. Rubin

Facts: Defendant attorney represented plaintiff client in a federal action. The federal court imposed monetary sanctions of $5,000 on plaintiff client for discovery abuses. Plaintiff then brought a claim in state court alleging that defendant’s mishandling the federal action resulted in the monetary sanction. The state motion court denied plaintiff’s motion for summary judgment on the issue of liability, in plaintiff’s action to recover damages for legal malpractice. The Appellate Court explains that

“While the issue of whether certain conduct constitutes legal malpractice is generally a factual determination to be made by the jury, a plaintiff will be entitled to summary judgment in a case where there is no conflict at all in the evidence, the defendant's conduct fell below any permissible standard of due care, and the plaintiff's conduct was not really involved .”

Issue: Did plaintiff establish that his own conduct was not really involved in the attorney’s actions that were sanctioned?

Ruling: The court held that the plaintiff failed to establish that his own conduct had nothing to do with the monetary sanctions being imposed, and the court thus upheld its denial of plaintiff’s motion for summary judgment

Lesson: In a legal malpractice claim based on sanctions imposed for discovery abuses, it is important for a plaintiff to present evidence sufficient to establish that his own conduct in the sanctioned conduct was not involved.

NJ: Attorney Reliance on Defective Title Report Not Malpractice

Ben Wasserman — Tue, 27 Mar 2012 05:38:23 -0500

Smith v Boyd 272 N.J. Super 186 (L. Div. 1993)

NJ: Underlying foreclosure sale

Student Contributor James Quinn

Facts: Plaintiff won home at sheriff’s foreclosure sale. The sale was conducted at request of second mortgagee, represented by Defendant. However, there had been another mortgage on the property. Defendant relied on title report prepared by insurance company, who is co-defendant in manner. The title report failed to disclose one of the mortgages. Copies of mortgages were attached in material given to Co-Defendant, but was not mentioned in report given to Defendant. Co-Defendant insurance company improperly and negligently prepared report given to Defendant. Defendant relied on this report at the sale of the property, and Plaintiff relied on Defendant’s word. Further claims are discussed against co-defendant insurance company, but are not relevant to malpractice claim.

Issue: Did attorney’s reliance on negligently prepared title report amount to legal malpractice?

Ruling: No. There is no evidence that Boyd acted negligently. He simply did not know there was a second open mortgage on the property. Defendant relied on report prepared by an insurance company, and it was proper for him to rely on that report throughout the foreclosure experience. The Defendant relied on C-Defendant insurance company’s report; however, the insurance company was not an agent of the lawyer. The insurance company was an independent contractor and the Defendant cannot be held liable for their negligence.

Lesson: This case illustrates that a lawyer who relies on a third-party contractor cannot be held liable for that party’s negligence. The opinion does not mention reliability or credibility of the third party contractor, but that could be a factor that determines a lawyer’s liability. A lawyer cannot be held liable when he acts reasonably, relies on reports he has no reason to doubt, and had no reason to suspect what is missing from the report.

NJ: Negligent Private Legal Aid Attorneys Not Liable Under §1983

Ben Wasserman — Mon, 26 Mar 2012 05:12:09 -0500

Thomas v. Howard, 455 F.2d 228 (3d Cir. 1972).

NJ Underlying Criminal Defense Case.

Student Contributor: Michelle Guardado

Facts: A prisoner of the State of New Jersey sued his attorney under the Civil Rights Act, 42 U.S.C. § 1983 (1970) on the ground that the attorney did not represent him to the best of his ability. Defendant attorney had voluntarily represented prisoner during post-conviction proceedings and had been selected from a pool of attorneys who had volunteered for such duty through the Essex County Legal Aid Criminal Division. The United States District Court for the District of New Jersey ruled in favor of the attorney and prisoner then appealed to the Third Circuit.

Issue: Whether prisoner has a valid claim of attorney malpractice under the Civil Rights Act against a private attorney who volunteers to represent prisoner through a government entity.

Ruling: No, the prisoner failed state a cause of action under the Civil Rights Act because the defendant attorney was a private and not a public attorney. Under the Civil Rights Act a cause of action can only be brought against someone acting “under color of state law, custom or usage.” The court held that although the attorney was acting voluntarily by assignment from a pool of attorneys of the Essex County Legal Aid-Criminal Division, he was performing his duties solely for appellant, to whom he owed the absolute duty of loyalty, as if he were a privately retained attorney. Therefore, because defendant attorney was acting as a privately retained attorney, he was not acting “under color of state law, custom or usage” within the meaning of the Civil Rights Act. In addition, the court stated that the prisoner’s claim was barred by the two year New Jersey statute of limitations applicable to this case, since the Civil Rights Act contains no statute of limitations.

Lesson: A private attorney selected from a pool of attorneys who had volunteered to represent an indigent prisoner through a state legal aid division is not necessarily acting “under color of state law” within the meaning of the Civil Rights Act. However, liability can attach under common law legal malpractice claims.

MD: Joint Liability for Joint Representation: Yes or No?

Ben Wasserman — Fri, 23 Mar 2012 05:41:18 -0500

Blondell v. Littlepage, 413 Md. 96, 991 A.2d 80 (2010).

MD: Underlying Joint Representation of Medical Malpractice Claim

Student Contributor: Vanessa L. Wachira

Facts: Six months after Lois Corbin (“Client”) had a mammogram performed by Dr. Amile Korangy (“Doctor”) she detected a lump in her breast and scheduled an appointment with her gynecologist, Dr. Dee Hubbard (“Hubbard”). Hubbard scheduled Client for a second mammogram on January 19, 2000 and a sonogram on the 21st. Both tests indicated malignancy and a biopsy later confirmed that Client had cancer. Believing that Doctor had misread her mammogram, Client retained William J. Blondell (“Co-counsel”) in May 2000 to purse an action for medical malpractice. Co-counsel filed the claim on January 21, 2003 and, the following year, referred the case to Diane Littlepage (“Attorney”). A fee-sharing agreement was executed, stating that they agreed to divide the contingency fee equally. Thereafter, Co-counsel had no further contact with Client and did not actively participate in the case. Doctor unsuccessfully asserted a statute of limitations motion, but during a pre-trail settlement conference, the judge advised Attorney that Doctor’s argument would likely prevail at trial or on appeal. Attorney reported these matters to Co-counsel, but the two did not discuss negotiations further. After continued discussions with Attorney about factors influencing the settlement (including the delayed filing of the claim by Co-counsel), Client settled the claim for significantly less than the initial demand. Attorney remitted half of the fee to Co-counsel. Co-counsel then filed claims against Attorney, alleging that her failure to communicate with him and her communications with Client about his untimely filing caused him to suffer economic and non-economic damages.

Issue: Whether a fee-sharing agreement may give rise to actionable contract and tort duties between co-counsel, other than those related to the fee itself.

Ruling: No. Because there was no breach of the terms of the fee-sharing agreement and the agreement to share equally in the profits failed to establish a joint venture, Attorney could not be liable to Co-counsel for breach of contract. The agreement simply called for an equal division of the fee and stated that Attorney would take “primary responsibly” for the representation and perform services “as requested” by Co-counsel. Attorney split the fee equally and took responsibility of the case. Co-counsel made no requests of Attorney regarding the settlement negotiations and Attorney was not obligated to consult or communicate with Co-counsel, like she would be under the terms of a partnership. Furthermore, Attorney could not have tortiously interfered with Co-counsel’s contractual relationship with Client because tortious interference requires interference from a third party and Attorney was, by virtue of the fee-sharing agreement, a party to the contract.

Lesson: When entering into a fee-sharing agreement with an attorney to whom you have referred a case, if you are concerned about his/her settlement negotiating skills and/or tactics, it may be beneficial to maintain an active role in the case.

NJ: Criminal Defense Malpractice

Ben Wasserman — Thu, 22 Mar 2012 05:29:53 -0500

McGrogan v. Till, 167 N.J. 414, 771 A.2d 1187 (2001)

NJ: Underlying criminal investigation

Student Contributor: Jennifer Hanley

Facts: The client hired the lawyer to represent him in connection with a criminal investigation. The client subsequently files a legal malpractice claim against the lawyer, for his representation during that investigation. When the client brought that claim, New Jersey courts applied a six-year statute of limitations to all legal malpractice claims. The trial court found that the client’s claim was barred by the six-year statute of limitations. The Appellate Division affirmed the trial court’s finding, but also asserted that an applicable two-year statute of limitation also barred the client’s claim. The Appellate Division reached this conclusion based on an earlier New Jersey Supreme Court decision, Montells v. Haynes, 133 N.J. 282 (1993), in which the Court held that the statute of limitations applicable to a particular claim depends on the nature of the complainant’s injury. Thus, the Appellate Division determined that where a client has alleged his defense attorney in a criminal prosecution case has committed legal malpractice, the nature of the injury is such that a shorter statute of limitations period applies than in other legal malpractice cases.

Issue: Where a client brings a legal malpractice claim allegedly committed by his defense attorney in the context of a criminal prosecution, should the court apply a two-year statute of limitation instead of the six-year statute of limitation traditionally applied to legal malpractice claims?

Ruling: No. In New Jersey, a six-year statute of limitations is applied to all legal malpractice claims.

Lesson: The court reasoned that the application of a six-year statute of limitations period to all legal malpractice cases has been an “uncontested principle in New Jersey decisional law” for over twenty-five years. The court recognized that there would be significant consequences resulting from a change to the statute of limitations period, considering the fact that the six-year period had been so widely accepted and that attorneys had come to rely on that statute of limitations in conducting themselves to avoid liability. Nevertheless, the court considers, for argument’s sake, whether a shorter statute of limitations might be more appropriate. Unlike the Appellate Division, the Supreme Court states that pursuant to Montell, if a shorter statute of limitations period is appropriate, it must be appropriate for all legal malpractice cases; the “nature of the injury” analysis pertains to the type of claim, not the particular injuries alleged in a specific case. Ultimately, the court determines that the “nature of the injury” in all legal malpractice cases is the breach of the attorney’s duty to his client, manifested in his negligent performance. As such, the traditional six-year statute of limitations continues to be the appropriate period for legal malpractice claims, since that period pertains to “actions involving tortious injury to the rights of another.”

PA: The Pro Se Plaintiff...and the Rules of Law

Ben Wasserman — Wed, 21 Mar 2012 05:13:06 -0500

Bresnahan v Schenker; 498 F. Supp 2d 758 (E.D PA, 2007)

PA: Procedure for filing a legal malpractice claim.

Student Contributor: Matthew Solomon

Facts: Client was represented by Attorney in a criminal matter and was convicted of multiple counts of theft by failure to make required dispositions of funds received. The Client, who is not incarcerated, decided to file a legal malpractice lawsuit pro se against his former public defender. The Client still had matters pending in the court of appeals at the time of filing his malpractice claim.

Issues:

1. Can a pro se litigant file a Certificate of Merit stating one’s self as a licensed professional?

2. Must a plaintiff obtain post-trial relief on the basis of attorney error before filing a legal Malpractice claim?

3. Did the plaintiff state a claim upon which relief can be granted?

Ruling:

1. NO. In all cases where a plaintiff seeks to assert professional negligence claim a plaintiff must submit a certificate of merit that states either “an appropriate licensed professional has supplied a written statement that there exists a reasonable probability that the care, skill or knowledge exercised … fell outside the acceptable professional standards…or expert testimony of an appropriate licensed professional is unnecessary for prosecution of the claim” A licensed profession is defined to include “an attorney at law.” Since it was improper, a judgment of non pros is awarded, but plaintiff is not barred from commencing another suit upon same course of action.

2. YES, as a matter of law, while an appeal is still pending a plaintiff may not file a professional negligence. A plaintiff must establish “he has pursued post-trial remedies and obtained relief which was dependent upon attorney error.”

3. NO, since the plaintiff did not exhaust post-trial remedies and did not file a timely certificate of merit the Defendants motion to dismiss was granted and the Plaintiff’s complaint was dismissed without prejudice if he prevails in his state court post-trial appeals on the basis of attorney error.

Lesson: In Pennsylvania, to have a valid professional negligence claim, one must exhaust all post trial relief before filing a malpractice claim. Also one must make sure that they follow exactly what the statute defines. If is one is filing a pro se action, and their own testimony is necessary to prove professional negligence, one must have a licensed professional also agree that there is professional negligence.

NY: Agreeing that Fees are Reasonable as a Condition to Representation

Ben Wasserman — Tue, 20 Mar 2012 04:51:13 -0500

Landa v. Blocker, 87 A.D.3d 719, 928 N.Y.S.2d 779 (App.Div. 2d Dep't 2011)

NY Underlying Matrimonial

Student Contributor: Richard Sadowski

Facts: The plaintiff, an attorney, represented the defendant in her divorce. The plaintiff commenced this action to recover the legal fees charged in the matrimonial action based on the theory of an account stated. The defendant brought a counterclaim for, among other things, legal malpractice. The Supreme Court granted the plaintiff’s motion for summary judgment based on the theory of an account stated.Plaintiff timely submitted legal invoices “setting forth his hourly rate, the billable hours expended, and the particular services rendered, and establishing that the defendant signed such invoices, failed to timely object to the invoices, and made partial payments thereon.” In opposition, defendant submitted an affidavit denying she acquiesced to the correctness of the invoices. She claimed that she signed the invoices because plaintiff refused to continue his legal representation until she did so. She asserted that she did not intend to give up her right to ever challenge the invoices.

Issue: Was there a triable issue of fact as to whether defendant’s acts of signing the invoices were acquiescence to their correctness?

Ruling: Yes, the court found there to be a triable issue of fact as to whether the act of signing the invoices constitute acquiescence to the amounts of the invoices. The court points out that the attorney’s refusal to continue work on the case without first obtaining the defendant’s signature would not constitute duress to invalidate the documents. However, here the defendant does not seek to invalidate the invoices. She only seeks to challenge plaintiff’s summary judgment motion by raising a question of fact as to whether she acquiesced to the amounts on those invoices.

Lesson: A client’s affidavit can be enough to present a triable issue of fact as to whether the client’s signature on legal services invoices represents intent to agree to the amount of those invoices. But this case seems to raise another ethical issues such as, is it proper for a lawyer to condition continued representation on a client's agreeing that the fees charged are reasonable?

NY: Double Header: Case within a case, Within a Case...Plaintiff's verdict Upheld

Ben Wasserman — Mon, 19 Mar 2012 08:42:18 -0500

Christ v Law Offs. of William F. Levine & Michael B. Grossman, 72 A.D.3d 721 (2d Dep't 2010)

NY: Underlying legal malpractice suit

Student contributor: Zahava Schwartz

Facts: The underlying case was another legal malpractice action where the clients alleged that the lawyer did not timely bring a property damage claim from a sewer backup at their house against the village. Clients obtained another attorney, defendant in this case, to represent them in that underlying legal malpractice suit but the lower court granted that attorney’s motion for summary judgment dismissing the complaint. That court found no triable issues of fact in regards to the village’s negligence because there was no evidence to show that the sewer backup was recurring or that the village had notice of that defect. Subsequently, plaintiffs discovered documents that there was a history of backups in that village and that both attorneys had made a freedom of information law requests for those documents yet failed to follow up on that request. Accordingly, plaintiffs brought a legal malpractice action alleging that the defendants did not obtain those documents prior to the dismissal. To prevail on this legal malpractice claim they needed to prove that they would have obtained a successful judgment but for the attorneys negligence to obtain those documents. A trial was held on whether the underlying case had merit and the jury returned a verdict that was favorable to the plaintiffs. The defendant made a CPLR 4404 (a) motion “to set aside the jury verdict and for judgment as a matter of law, or to set aside the jury verdict as contrary to the weight of the evidence and for a new trial.” The lower court granted that motion and directed a new trial on that issue. Plaintiffs appealed and the defendants cross-appealed that the lower court should have entered a judgment as a matter of law for the plaintiff.

Issue: Was the lower court correct in granting defendants CPLR 4404(a) motion?

Rule: No. The lower court should have denied the defendants motion to begin with. “To be awarded judgment as a matter of law pursuant to CPLR 4404 (a), a defendant has the burden of establishing that there is no rational process by which the jury could find for the plaintiff against the moving defendant. The plaintiff's evidence must be accepted as true, and the plaintiff is entitled to every favorable inference which can reasonably be drawn from the evidence.” In this case the defendants did not meet that burden and the plaintiffs’ expert testimony established that the village did not properly maintain their sewers. “A jury verdict should not be set aside as contrary to the weight of the evidence unless the jury could not have reached its verdict by any fair interpretation of the evidence” which is not a question about law but rather it is discretionary and about balancing factors. In this case, the jury’s verdict that the village was negligent was supported by a fair interpretation of the evidence.

Lesson: It is a tough burden to have a CPLR 4404 (a) motion granted. It entails the moving party to establish that there is no rational process by which the jury could find for the non-moving party. Also, a jury verdict should not be set aside contrary to the weight of the evidence unless the jury could not have reached that verdict by any fair interpretation which is determined by multiple factors and is discretionary.

NJ: The Lawyer/Broker Conflict

Ben Wasserman — Fri, 16 Mar 2012 06:39:59 -0500

Lovett v. Estate of Lovett, 250 N.J. Super. 79, 593 A.2d 382 (Ch. Div. 1991)

NJ: Underlying will and estate contest

Student Contributor: James Quinn

Facts: Plaintiffs are two former guardians and children of decedent, who passed away during this action. They allege malpractice by attorney in drafting a more simple will for their father, eliminating a more complex will that had been in existence. They are additionally claiming attorney (“defendant”) committed malpractice by allowing decedent’s wife to have power of attorney over the decedent. There were tape recordings of dialogue during the drafting of new testamentary writings, and decedent’s wife remained mostly quiet during drafting. However, she sold three properties of decedent using her power of attorney. Defendant acted as lawyer and broker, taking commission instead of attorney fees for sale of properties. Wife passed away, the plaintiffs obtained guardianship over their father, and began this action against defendant.

Issues: 1. Plaintiffs allege negligence, stating that defendant should have had separate counsel review documents, should have held all will conversations outside presence of decedent’s wife, and gotten a psychiatric evaluation to prevent will challenges
2. Did defendant breach his ethical duty by acting as lawyer and broker for sale of home, and accepting commission instead of legal fees?

Rulings: 1. Defendant was not negligent in executing the new will. Although plaintiff relies on numerous instances, their claims lacks direct proof. The actions taken by defendant were proper with regard to the will, there did not exist a conflict of interest by granting power of attorney to wife and writing husband’s will, a lawyer’s search for information need to be reasonable to inform his client, and The court wrote:

“I am not persuaded that [the lawyer] did not employ the knowledge, skill and ability ordinarily possessed and exercised by other members of the Bar similarly situated. Nor have I concluded that the prudence and care that he did exercise was unreasonable. Plaintiffs have therefore failed to satisfy me by the preponderance of the evidence that defendant's actions constituted legal malpractice” (92-93)

2. An attorney cannot act as broker and attorney in the same transaction. Simply labeling commission as fees will not immunize the attorney from an ethical violation. In doing so, he violated an ethical obligation to his client. The steps by the defendant were not ancillary to his role as attorney. However, the plaintiffs failed to establish legal malpractice was proximate cause of plaintiff’s losses. Defendant was barred from receiving commission for sales.

Lesson: Plaintiffs in legal malpractice case must show direct proof to show breach of attorney-client relationship. That breach must demonstrate the lawyer did not employ knowledge, skill and ability of similarly situated. Additionally, an attorney should never act as broker and attorney in real estate transaction. Attorney will be barred from collecting fees, and if proximate cause is shown to plaintiff losses.

NY: Procedural Defect Yields Failure to Timely Commence an Action

Ben Wasserman — Thu, 15 Mar 2012 07:04:08 -0500

Wilk v. Lewis & Lewis, P.C., 75 A.D.3d 1063 (4th Dep’t 2010)

NY: Underlying personal injury action

Student Contributor: Zahava Schwartz

Facts: The plaintiff was injured while repairing railroad cars. He hired defendant lawyers to handle this case against his employer. His lawyers did not commence the suit on time and he was time barred and his suit was therefore dismissed. When the lawyers (defendants) commenced a Labor Law and common-law negligence action on behalf of plaintiffs they used the same index number that had been used in the pre-action discovery proceeding. The action was dismissed because in New York, failure to purchase a new index number rendered the case a nullity since it was never properly commenced. Plaintiff argues that his lawyers did not commence his labor law and common law negligence case in a timely manner causing its dismissal. The lawyers argued that even if they had commenced his suit on time he would not have succeeded. The lawyers said that their negligent behavior was not a proximate cause of his loss because successor counsel did not file a notice of appeal and this was an intervening cause to their negligence which caused the dismissal.

Issue: Did the lawyers fail to act with ordinary reasonable skill by allowing the case to be dismissed and was the lawyer’s negligence the proximate cause of plaintiff’s loss?

Rule: Yes. In a legal malpractice case the plaintiff must prove that the lawyer did not act with ordinary reasonable skill that a member of the legal community would have. Also, that this breach of attorney-client duty was a proximate cause of the client’s loss. In order to win the legal malpractice case the plaintiff must show that but for the lawyers’ action he would have succeeded on the merits of the case. The lawyers intervening factor argument was dismissed since they did not prove successor counsel had enough time to adequately protect plaintiff’s rights. The lawyer’s failure to commence the action on time would be enough to show they did not exercise the ordinary reasonable skill. The court denied lawyers’ request to dismiss the complaint and gave plaintiff partial summary judgment.

Lesson: In a malpractice claim not only does the plaintiff need to properly plead the substantive elements of the claim-- that the lawyer did not act with ordinary reasonable care that that the breach of duty is the proximate cause of the clients loss, but must also comply with the procedural requirements of how to properly commence the action in a timely manner.

PA: Post-Withdrawal Liability

Ben Wasserman — Wed, 14 Mar 2012 06:50:08 -0500

Capital Care Corp. v. Hunt 847 A.2d 75 (2004)

PA: Underlying legal malpractice and breach of fiduciary duty claims

Student Contributor: Christina Tsirkas

FACTS: Client contracted with a group of British investors for the purchase of one of their subsidiaries. Together, client and these British investors planned to merge and purchase a large homecare business. At a meeting in September of 1986, attorney told client that his firm was going to withdraw as counsel for client. After withdrawing, attorney continued to advise client in corporate matters. Client contended that attorney was still acting as its counsel as of the date of the shareholder’s meeting on June 19, 1987, and that because client simultaneously acted as counsel for both client and the group of British investors--who had interests adverse to client, in the sale of client’s assets (and because attorney allegedly made false statements before the sale) attorney caused the assets to be sold for a lower value. The trial court granted a JNOV in favor of attorney, from which client appealed.

ISSUE: Even though attorney had formally withdrawn from representation, were attorney’s actions enough to constitute continued legal service?

RULING: Yes. After formally withdrawing, attorney continued to assist client regarding corporate law and security transactions, which were attorney’s expertise. Attorney also advised client in the organization and execution of the shareholder’s meeting, and so client could reasonably have believed that attorney was still representing it.

LESSON: Simply withdrawing from representation will not be enough to sever the attorney client relationship if attorney continues to provide legal services to client.

NJ: Affidavit of Merit? Better Safe then Sorry.

Ben Wasserman — Tue, 13 Mar 2012 08:15:21 -0500

Prosser v. Zeldin, 2010 WL 5392707

NJ: Underlying Divorce; Affidavit of Merit

Student Contributor: Mordechai Buls

FACTS: Defendant represented plaintiff in a divorce proceeding for a marriage in which the ceremony was performed in Ocho Rios, Jamaica. In the divorce case Plaintiff claimed that since there was no valid license, the marriage was not legal. The court rejected this claim stating that a lack of license doesn’t prove the marriage was illegal when there are other circumstances presented during the proceedings that would establish the marriage. Plaintiff settled on the first day of trial.
Subsequently, the plaintiff filed a malpractice suit against the defendant lawyer claiming that he coerced the plaintiff to accept the terms of the settlement and that throughout the proceedings Plaintiff kept telling the defendant that there was no public record of a valid marriage license. When the plaintiff failed to submit an affidavit of merit even after a three-week extension the court dismissed the complaint with prejudice. On appeal, l the plaintiff claimed that an affidavit of merit was not required since the act was “blatant and a matter of common sense”.

Issue: Does the Plaintiff need to submit an affidavit of merit in this case?

Ruling: Yes. A condition precedent to maintaining a claim for legal malpractice against an attorney is an affidavit of merit. Although an exception is made where the claimed malpractice involves matters of common knowledge, which refers to the ability of the jury to resort to “ordinary understanding and experience, to determine a defendant's negligence”. This case is different since validity of a marriage is determined by the laws of the jurisdiction where it was performed and Jamaica’s marriage laws are not common knowledge in New Jersey.

Lesson: When suing an attorney for malpractice in New Jersey always err on the side of caution and get an affidavit of merit.

Ben Wasserman — Thu, 08 Mar 2012 20:55:07 -0500

IN MEMORIAM

William W. Voorhees, Jr., Esq.

We are deeply saddened to report that our dear friend and distinguished colleague, Bill Voorhees, died today.

Bill was truly the lawyer's lawyer. For more than a quarter of a century, Bill represented lawyers and their professional liability insurers in legal malpractice and insurance coverage disputes. He then took up the cause of clients who had been victimized by lawyer malpractice.

Bill gave abundantly of his time and efforts to help improve the quality of the practicing bar. He served on the District X Ethics Committee and as President of the Morris County Bar Association. I had the privilege of serving under his Chairmanship of the New Jersey State Bar Association's Malpractice Insurance Committee. Bill and I frequently collaborated on topics of mutual concern relating to the law governing lawyers, including, most recently, the insurance industry and the New Jersey State Bar Association's misguided efforts to legislatively overrule the victories for client rights that Bill and his colleagues achieved in the Courts.

Bill and I shared much in common: We both became Certified Civil Trial Attorneys by the New Jersey Supreme Court at the same time and received recognition from SuperLawyers, Best Lawyers and Martindale Hubbell as being amongst the very few plaintiff legal malpractice specialists. We both worked on CLE programs. We became blogging partners, each presenting our own unique perspectives on this area of the law we both passionately practiced. Bill and I deeply believed that one of the most effective ways to improve the quality of practicing lawyers is by holding those who provided substandard service to their clients accountable for their misdeeds and by seeking compensation for their victims. In that ongoing battle and in all the battles yet to come, I will deeply miss my colleague, my friend and fellow blogger.

Rest in peace my friend. Another scholar, gentleman and warrior on the side of justice like you will be hard to find. Your work and pragmatic approach over the past decades is a legacy to us all and will serve as an ongoing inspiration to your brothers and sisters at the Bar, who seek, as did you with such grace and zeal, to ameliorate the injustices caused by those who should have protected against them. Rest in peace, my friend, I will sorely miss you.

Bennett J. Wasserman, Esq.
Editor-in-Chief

Legal Malpractice Law Review

NY: Defining Continuous Representation to Toll the SOL

Ben Wasserman — Thu, 08 Mar 2012 06:04:31 -0500

R. Brooks Assoc., Inc. v Harter Secrest & Emery LLP ; 2012 NY Slip Op 00602 ; Decided on January 31, 2012 ; Appellate Division,

NY: Underlying corporate and commercial transaction

Student Contributor: Audrey Mars

Facts: Plaintiff retained Defendant law firm to: (1) create a new corporation comprised of the assets of a financially failing pipeline inspection company (PES) and (2) to draft an employment agreement between Company’s former owner (McNulty) and the new corporation. Since PES was so deeply in debt, Plaintiff sought to ensure that he would not be personally held liable its debts. After the closing, McNulty: (1) used the new company’s assets to satisfy his old debt; (2) McNulty’s son left the company and formed a new competitive company; (3) McNulty bad-mouthed the new company to former clients and diverted business to his son’s company. After suspending McNulty, Plaintiff contacted defendant regarding terminating its relationship with McNulty. Instead of terminating McNulty pursuant to the terms in the employment agreement, Defendant claimed that McNulty resigned. McNulty sued plaintiff for breach of contract and prevailed.

Issue: Whether the acts which allegedly constituted malpractice which occurred at the latest August 3, 1999, were time barred when a suit was commenced on August 2004, or whether the continuous representation doctrine applied to toll the statute of representation?

Ruling: Plaintiff’s action is time-barred because defendant’s additional work on plaintiff’s behalf did not constitute continuous representation- it was instead “ an extended general relationship between parties.”

Lesson: For the continuous representation doctrine to apply both plaintiff and defendant must have a mutual understanding to that effect, and (2) plaintiff must be under the impression that defendant was actively addressing [its] legal needs" with respect to the subject of the alleged malpractice.

NJ: Gere v. Louis and DeBartolo: Another Nail in the Puder Coffin

Ben Wasserman — Wed, 07 Mar 2012 05:36:39 -0500

Julia Gere v. Frank A. Louis, Esq., and John DeBartolo, Esq. (A-78-10) (066926) Argued November 7, 2011 -- Decided March 6, 2012

NJ: Underlying divorce settlement; entire controversy doctrine

In this appeal, the Court considers whether plaintiff’s legal malpractice claim is barred under Puder v. Buechel, 183 N.J. 428 (2005). The Syllabus issued by the NJ Supreme Court in conjunction with its decision in Gere is substantially set forth below:

FACTS: Defendant Frank A. Louis, Esq., represented plaintiff Julia Gere in connection with plaintiff’s divorce from Peter Ricker. Pursuant to the property settlement agreement, plaintiff had a six month window, which ended in October 2000, to decide how she wished to proceed with respect to the parties’ ancillary real estate investments. Plaintiff’s understanding was that she would retain a one-half interest in those assets unless she affirmatively advised Ricker within six months that she did not wish to do so. One of those assets was Navesink Partners, which owned both the real estate and business operations of a marina. Based on Louis’s interpretation of plaintiff’s wishes after a discussion with her friend, Louis sent a letter dated October 11, 2000, to Ricker’s attorney stating, “this will confirm that except for the Marina, Mrs. Ricker wishes to maintain one-half interest in all other properties.” Subsequently, a dispute arose in which Ricker maintained that plaintiff had waived any interest in Navesink Partners, and plaintiff contended that she did not waive her interest, that she wanted to continue her ownership interest in the marina’s real estate, and that she was entitled to fair value for her interest in the marina’s business operations. A post-judgment litigation was commenced.

Defendant John DeBartolo, Esq., succeeded Louis as plaintiff’s attorney. The parties agreed to a sixty-day discovery period, after which they filed cross-motions for summary judgment. The trial court denied the motions in August 2003 and ordered a plenary hearing, which was not scheduled until 2006. Shortly before the plenary hearing, Carl Soranno, Esq., succeeded DeBartolo as plaintiff’s attorney. Soranno learned that DeBartolo did not conduct discovery with respect to plaintiff’s interest in Navesink Partners.

The trial court only permitted Soranno limited discovery. The eight-day plenary hearing concluded on October 12, 2006. In addition, the trial court equitably tolled the statute of limitations for initiating a malpractice claim against Louis until May 11, 2007. Prior to the trial court’s decision, on July 27, 2007, the parties achieved a settlement in which plaintiff agreed to receive a reduced interest to avoid the risk of the trial court finding that she was not entitled to anything.

The agreement provided that as of January 1, 2007, plaintiff would have a one-half interest in Ricker’s ownership in the marina’s real estate and a forty percent interest in his ownership in the marina’s business operations. The agreement also preserved plaintiff’s right to pursue claims against her former attorneys. In response to Ricker’s attorney’s inquiry into whether plaintiff believed the agreement was fair and reasonable to her, she answered “Yes. I’m signing it. It’s the best I could do.”

In November 2007, plaintiff filed a malpractice action against Louis and DeBartolo alleging that each had been negligent and that as a consequence, she received less in the July 2007 settlement than she was entitled to under the original settlement. The trial court granted summary judgment to both defendants, finding that Puder barred plaintiff’s action and that plaintiff’s claim against Louis was time-barred. The Appellate Division affirmed, finding that plaintiff’s claim against Louis was time-barred and Puder precluded her claim against DeBartolo because she voluntarily entered into the July 2007 settlement agreement, which she testified was fair and reasonable. The NJ Supreme Court granted certification, limited to the issue of whether Puder barred plaintiff’s malpractice claim against DeBartolo. 205 N.J. 271 (2011).

ISSUE: Does the underlying settlement of the remaining post-divorce issue bar a legal malpractice claim against the plaintiff's post property settlement divorce attorneys?

RULINGS: Because the situation here is materially distinguishable from that which was considered in Puder, plaintiff’s legal malpractice claim is not barred.

1. Because this appeal arises from the grant of summary judgment, the Court’s review of the legal conclusions reached by the trial court and the Appellate Division is de novo. New Jersey has a strong public policy in favor of the settlement of litigation.

2. In Puder, Virginia Puder, Esq., represented Mrs. Buechel in a divorce action against Dr. Buechel. Before trial, although Puder had not conducted significant discovery, Puder negotiated a property settlement agreement. After Mrs. Buechel authorized Puder to accept the settlement and the court was advised that the matter had been settled, but prior to the completion and execution of a written settlement, another attorney advised Mrs. Buechel that the terms were inadequate. Mrs. Buechel told Puder that she would not comply with the settlement, discharged Puder, and hired another attorney. Dr. Buechel then moved to enforce the settlement, and a plenary hearing was ordered. A separate action was initiated in which Mrs. Buechel alleged that Puder had been negligent in negotiating the settlement. The enforcement matter proceeded before the malpractice action and, after six days of testimony, a settlement was reached. Mrs. Buechel testified that she entered the settlement voluntarily and considered the agreement a fair compromise. Subsequently, Puder filed a motion for summary judgment in the malpractice action. The trial court granted the motion, finding that plaintiff, by agreeing to the second settlement before the validity of the first settlement had been determined, had waived her right to pursue a malpractice action against Puder for her work in connection with the first settlement. The Appellate Division reversed, concluding that under Ziegelheim v. Apollo, 128 N.J. 250 (1992), “a former client [may] bring a legal malpractice action against an attorney for professional negligence in divorce litigation where a settlement ensued.” This Court reversed, concluding that any alleged deficiency resulting from the first settlement was ameliorated by the second settlement that Mrs. Buechel deemed to be fair and equitable. This Court noted that unlike the plaintiff in Ziegelheim, Mrs. Buechel made a calculated decision to accept the second settlement before the trial court could decide whether the first settlement was enforceable, and Mrs. Buechel entered the second settlement aware of the discovery deficiencies leading up to the first settlement. In that posture, this Court declined to permit Mrs. Buechel to pursue her legal malpractice claim.

3. Puder did not erect an absolute bar to a claim of malpractice if a former client enters into a settlement with regard to the underlying action before obtaining a decision with respect to the complained-of conduct of the attorney. Puder represented a limited equity-based exception to Ziegelheim’s general rule, and that exception is not warranted by the facts of this matter. Puder barred the client’s malpractice claim because her testimony demonstrated that the second settlement cured the deficiencies she perceived in the first settlement and placed her in the situation she contended she should have occupied at the outset. That is not the situation here. Plaintiff, unlike Mrs. Buechel, made no claim of malpractice with respect to the negotiation of the original property settlement agreement; rather, her claim arose out of Louis’s post-settlement actions.

4. Plaintiff’s claim with respect to DeBartolo is also distinguishable from that asserted in Puder. While the second Puder settlement essentially placed Mrs. Buechel in the same position as she had been at the outset, the second settlement here did not have that effect. Plaintiff contended that under the first settlement agreement, she had, at the end of the six-month window in October 2000, an interest in all of Navesink Partners’ assets. Under the settlement to which she acceded, her interest in Navesink Partners was computed as of January 2007. As a result, she lost nearly six and one-half years of participation in the partnership. In addition, plaintiff’s statement that the July 2007 settlement was “fair” and “reasonable” does not preclude her from now seeking damages from DeBartolo. The assessment of the settlement’s fairness and reasonableness must account for plaintiff’s allegation that DeBartolo’s failure to engage in meaningful discovery severely hampered her successor attorney’s ability to establish her claim, and because this matter was decided by way of summary judgment, the Court is compelled to credit plaintiff’s assertion in that respect.

The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the trial court for further proceedings consistent with the Court’s opinion.

LESSON: With Gere, the Court re-affirms that Puder, which barred a post-settlement legal malpractice action for an alleged botched settlement, is the rare exception to the rule in Ziegelheim v. Apollo, 128 N.J. 250 (1992), which permits legal malpractice actions even after settlement of the underlying case.