Legal Malpractice Law Review : Professional Responsibility Case Summaries & Commentary : Bennett J. Wasserman : LegalMalpractice.com : Lawyer Malpractice & Legal Ethics

 Douglas v. Delp, 987 S.W.2d 879 (Tex. 1999)

TX: Underlying commercial transaction; litigation; bankruptcy

Student Contributor: Chelsea Tucker* 

Facts:  Billy Delp, his wife Gertrude Delp, and John Harvison were business partners who had formed various companies. Billy believed Harvison was attempting to buy businesses outside of the companies’ core business activities. Billy and Gertrude removed Harvison as an officer of two of the companies, Nu-Way and Economy Oil. Harvison filed suit against Billy and Gertrude. Billy and Gertrude were represented by Douglas and Douglas, Kressler & Wuester, P.C. (collectively DKW). Two days into a temporary injunction hearing in which Gertrude was the primary witness, the two sides began settlement negotiations. After a short meeting with DKW, Billy and Gertrude signed a compromise settlement agreement (finalized by Harvison’s attorneys) in which Gertrude was required to resign from the boards of Nu-Way and Economy Oil. The Delps soon lost all assets held through Nu-Way. Billy and Gertrude Delp brought a legal malpractice suit against DKW over its handling of the settlement agreement and for failing to adequately prepare Gertrude for her testimony in the temporary injunction hearing. Soon after, Billy filed for bankruptcy. Billy listed the malpractice claims against DKW as an asset. The bankruptcy trustee sold the claims to Philip Treacy & Associates, which was acting on behalf of DKW’s malpractice carrier. Treacy filed a trial court motion to dismiss Billy’s malpractice claims. This motion was granted.   Following trial on Gertrude’s claims, the trial court granted a directed verdict for DKW. Gertrude and Billy appealed the directed verdict and the dismissal of Billy’s claims. The court of appeals reversed and remanded both Gertrude’s and Billy’s interest in the malpractice claims and part of Gertrude’s DTPA claims.

 Issues:

1) Whether Billy and/or Gertrude had standing to pursue their claims.
2) Whether a plaintiff may recover damages for mental anguish in a legal malpractice suit.
3) Whether DKW’s representation that the agreement would protect the Delps’ interests supports DTPA liability.

Ruling:

The Supreme Court held that:

1. Billy lacked standing to pursue claims in state court because the claims swept into his bankruptcy estate and Gertrude lacked standing because her claims for economic loss related to jointly managed business were part of her husband’s bankruptcy estate.

2. Mental anguish damages are not recoverable when the mental anguish is a consequence of economic losses caused by an attorney’s negligence; and (3) DKW’s representation that the agreement would protect the Delps’ interests was too vague to be actionable under DTPA.

Lesson:
1. A claim of mental anguish damages in a legal malpractice suit will generally not prevail.
2. Give your client enough information so that she is capable of making an informed decision before signing a settlement agreement.
3. Counsel clients on all legal aspects of documents they sign, especially those that may have a detrimental effect on the client.
4. Have the client sign a document saying that she has read and understands the agreement in its entirety, and acknowledges the possible negative results of signing the agreement.

*Chelsea Tucker is in her second year at Texas Tech School of Law and is a candidate for her Juris Doctor in May 2011. She is currently employed as a law clerk for a personal injury attorney and drafts petitions, motions, and appeals, consults with clients, and files documents at the courthouse. Chelsea has also interned with the District Attorney’s Office in Kerrville, Texas. During her first year at Texas Tech School of Law, Chelsea was awarded the Jurisprudence Award for Superior Academic Achievement in Legal Practice.

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 Aiken v. Hancock, 115 S.W.3d 26 (Tex. App.—San Antonio 2003, pet. denied).

TX: Underlying civil litigation "catastrophe".

Student Contributor: Courtney E. Hamilton*

Facts:   Douglas Aiken brought action against his former attorneys Patrick Hancock and Mark Ferguson, and their firm, Deadman and Ferguson, alleging violations of the Deceptive Trade Practices Act (DTPA), breach of fiduciary duty, negligence, gross negligence and breach of contract. The trial court partially granted Ferguson’s motion for summary judgment and dismissed Aiken’s breach of contract claims. The trial court also granted Ferguson’s first amended motion for summary judgment. Aiken appealed the decision of the trial court and neither the law firm of Deadman and Ferguson or Deadman were parties to the appeal. Aiken’s arguments to support his claim of breach of fiduciary duty were that Ferguson (1) falsely represented to Aiken his readiness to go forward and try Aiken’s case, and (2) failed to disclose that he was not ready to try Aiken’s case. Aiken also alleged that Ferguson falsely represented to him that the expert witness was ready to testify about a full audit and failed to disclose that the expert witness was not ready to testify about a full audit.
On appeal, Ferguson argued that Aiken’s claims are actually a single legal malpractice claim, and violating the Texas law that prohibits a plaintiff from fracturing legal malpractice claims.

Issue:  Whether Aiken improperly "fractured" his legal malpractice claims against Ferguson.

Ruling:  The San Antonio Court of Appeals held that Aiken improperly fractured his legal malpractice claim against Ferguson. The court found that Aiken’s classification of his claim as breach of fiduciary duty was improper because allegations did not consist of “self dealing, deception, or express misrepresentations in Ferguson’s legal misrepresentations in Ferguson’s legal representation.” The proper classification of these allegations would be a legal malpractice claim.
The court also held that Aiken’s assertion that Ferguson’s DTPA allegations based on alleged express misrepresentations did not state a cause of action independent from the malpractice claim.
After the court found that there was only one cause of action for legal malpractice the court applied the summary judgment standard of review. In doing so, the court held that summary judgment was proper because Aiken failed to prove causation and damages, two necessary elements for a legal malpractice claim.

Lesson:  A breach of fiduciary duty involves issues of loyalty, confidentiality, and candor while a legal malpractice claim involves negligence and the lawyer’s alleged failure to exercise ordinary care. A plaintiff cannot fracture their malpractice claim when they cannot meet the elements of the additional malpractice claims. The court will view this as one malpractice claim and the plaintiff must establish by a preponderance of the evidence all the elements of a malpractice claim (duty, breach, causation, and damages).
 

*Courtney E. Hamilton is a third year law student at Texas Tech School of Law, and a candidate for her J.D. in May 2010. She currently serves as Articles Editor for the Texas Tech Administrative Law Journal. She has served as a law clerk for the U.S. Attorneys’ Office for the Northern District of Texas, the Texas State Board of Pharmacy, and the Texas Commission on Environmental Quality. Courtney received her B.S. in Chemistry from Sam Houston State University.

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Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193 (Tex. 2002)

TX: Underlying referral of a personal injury case to another law firm

Student Contributor: Anna Ford (J.D. ( 2011) Texas Tech University School of Law; B.B.A. (2008) Emory University)

FACTS:  After a helicopter crash, James Chang, an associate with the firm of Brewer & Pritchard, recommended that the firm take the personal injury cases for the victims of the crash. Chang personally knew one of the victims, Herbert King, because he was Chang’s close friend’s father. After a partner at the firm recommended that the case be referred to another firm, Chang scheduled a meeting for King with Nick Johnson, a personal injury lawyer and close friend of Chang’s. Johnson referred the case to the firm of Jamail & Kolius, who made an agreement to pay Johnson a referral fee. A year after the case settled, Chang and Johnson formed a partnership together. Chang never told his employer about the referral but defendants’ facts support their contention that Chang did not receive any compensation as a result of the King suit or Johnson’s referral to Jamail & Kolius.  Thereafter, the firm sued its former associate, Chang, and Johnson, alleging breach of fiduciary duty, actual and constructive fraud, conversion, and negligence.
The district court entered summary judgment for defendants on all causes of action. The appellate court reversed and remanded the breach of fiduciary duty and constructive fraud causes of action against both defendants and affirmed the remaining causes of action. The Supreme Court affirmed the appellate court’s holding, disagreeing with its reasoning.
On appeal, the firm asserts that Chang had breached a fiduciary duty that he owed to the firm and that Johnson had knowingly assisted Chang in committing that breach. The firm contends that Chang violated the policies in place forbidding associates to refer cases without securing a referral fee for Brewer & Pritchard.
Defendants argue that as a matter of law Chang owed no fiduciary duty to plaintiff, mainly because there was no employment agreement to that effect.

ISSUE:  Does an associate of a law firm breach a fiduciary duty to his employer when gainfully referring a matter to another firm or lawyer without the employer’s permission?

RULING:  Yes. The associate owes a fiduciary duty to his employer not to personally profit or realize any gain or advantage from referring a matter to another law firm or lawyer, absent the employer’s agreement otherwise. However,

“an associate may participate in referring a client or potential client to a lawyer or firm other than his … employer without violating a fiduciary duty to that employer as long as the associate receives no benefit, compensation, or other gain as a result of the referral.”

LESSON:  The employee of a law firm should not profit from a referral to another firm or lawyer without the consent of his employer. The employee should disclose to his employer when he has referred a case to another lawyer or firm.   A lawyer should not share a fee with a lawyer who is not in the same firm without permission of his client.
 

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 In re Segerstrom 247 F. 3d 218 (5th Cir. 2001)

TX: Underlying personal injury then bankruptcy, post judgment

Student Contributor: Brad Kvinta (J.D. (2010), Texas Tech University School of Law, B.S. (2006)Texas A & M University)

FACTS: In 1995, a vehicle driven by Kayla Segerstrom (Segerstrom) was involved in a collision with a vehicle driven by the Colvins. The collision caused one death and other serious injuries. The Colvins sued Segerstrom, her parents, and her parents’ sole proprietorship (“defendants”). The defendants’ insurance company hired Touchstone as defense counsel. A judgment was then entered solely against Segerstrom. Shortly thereafter, “the Colvins filed an involuntary bankruptcy petition against Segerstrom.” The bankruptcy estate (“estate”) then filed a complaint against Touchstone and the insurance company. “The complaint alleged that Touchstone had an inherent conflict of interest in representing Segerstrom, her parents, and her parents’ sole proprietorship as defendants in the same litigation.” “In October 1998, Segerstrom’s personal liability to the Colvins was discharged.” Summary judgment was entered against the estate, and the trustee appealed.

ISSUE: Whether Segerstrom’s bankruptcy estate included a legal malpractice claim against Touchstone and, if so, whether Touchstone, and the insurance company, are liable under that claim?

RULING: On appeal, the court indicated that Segerstrom’s bankruptcy estate included a legal malpractice claim against Touchstone. “As of the commencement of Segerstrom’s bankruptcy case, a legal malpractice claim against Touchstone had accrued to Segerstrom according to Texas law.” See In re Swift, 129 F.3d 792, 795-96 (5th Cir. 1997). “Segerstrom never denied or waived that malpractice action prior to the commencement of her bankruptcy.” Thus, the court indicated that the estate could maintain a legal malpractice claim against Touchstone.

Although the court indicated that a legal malpractice action could be filed on behalf of the estate, the estate did not prove that “but for the manner in which Touchstone conducted her defense, Segerstrom would have obtained a better result in the prior litigation.” In other words, the estate failed to prove the Segerstrom suffered any injury as a result of the alleged malpractice.

The court based this conclusion on Segerstrom’s post-petition affidavit, which denied the existence of a legal malpractice claim. The court noted that although this affidavit is irrelevant to the existence of a legal malpractice claim, it “carries considerable weight in determining whether the estate has met its burden of establishing injury and causation in accordance with Texas law.” Therefore, summary judgment in favor of Touchstone was proper.

Further, “Texas requires that insurance companies act with reasonable care in fulfilling their duty to defend under insurance contracts.” See Meridian Oil Production, Inc. v. Hartford Accident, 27 F.3d 150, 153 (5th Cir. 1994). The court indicated that the estate pointed to no authority in Texas that shows this duty requires the insurance company to identify conflicts and take steps to address them prior to hiring legal counsel for its insured. The court also indicated that even if this duty existed, there is insufficient evidence presented to support a breach of that duty. Therefore, summary judgment in favor of the insurance company was proper.

LESSON: Lawyers may be liable for legal malpractice to a plaintiff’s successor in interest. A successor in interest is a person entitled to the same legal rights as the plaintiff. In other words, a successor in interest is free to pursue any claim that the plaintiff was entitled to pursue. Thus, a lawyer must defend a legal malpractice claim against a successor in interest so long as the successor in interest is legally entitled to pursue such a claim and meets all requirements to successfully prosecute the claim.

In this case, legal malpractice claims survive the initiation of bankruptcy proceedings, even if personal liability in the underlying lawsuit has been discharged. Trustees (the successor in interest in this case) are free to pursue any claims which the debtor could have pursued prior to the initiation of a bankruptcy proceeding. Further, there is no duty under Texas law for an insurance company to identify conflicts and take steps to rectify said conflicts prior to the commencement of any legal proceeding.

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 LEGAL MALPRACTICE LAW REVIEW

              is pleased to present 

      Paul M. Koning                                                               

                                                             Brent Basden

                                                                     of

                                                           K & L Gates, LLP

                     LEGAL MALPRACTICE IN TEXAS--THE BASICS, April, 2010

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Higgins v. Thurber (N.J. App. Div. April 21, 2010)

NJ Underlying will contest

Facts: At the time Salvatore Calcaterra died, he had been married to his second wife, Donna. Prior to his death, Sal executed a Will disinheriting Donna. Prior to his death, Donna transferred four New York Mercantile Exchange seats to herself using Sal’s Power of Attorney.

The executor of Sal’s estate, his son Michael, commenced an action against Donna. Approximately two years later, the estate experienced difficulty with payment of its legal fees. Accordingly, the beneficiaries of the estate, including Michael and his two sisters, agreed that the attorneys would be entitled to a portion of the estate’s gross recovery from the litigation against Donna.

Subsequently, the trial court held that Donna was entitled to only two of the four NYMEX seats. Donna appealed and the estate cross-appealed. In the meantime, Donna commenced a suit against Michael and his sister, Robyn. Donna alleged that Michael had engaged in misconduct as executor and Robyn, guardian ad litem to Donna’s daughter, Jenna, had not acted in Jenna’s best interests. Donna’s complaint was dismissed with prejudice.

Donna then commenced yet another action seeking an accounting from Michael. Jenna, thereafter, commenced an action against Michael, Robyn, and their attorneys alleging breach of fiduciary duty and legal malpractice. Robyn sought contribution and indemnification from the attorneys and Michael.

Although Jenna’s legal malpractice action was dismissed, Robyn, and her sister Laura, also filed exceptions in the accounting action brought by Donna questioning the propriety of the fee agreement they had entered into with the attorneys. Robyn and Laura’s claims against the estate’s attorneys were limited to issues “related to legal fees and costs charged to the estates and the trust as reflected in the accountings submitted for approval”.

The entire accounting action was, however, eventually resolved and the pertinent order provided that Robyn and Laura’s claims against the estate’s attorneys were:

[V]oluntarily dismissed, without prejudice…for repayment of fees paid to her by the Estate and Trust;

[M]emorialized defendant attorneys’ waiver of the defense of the bar of the entire controversy doctrine and the defense of Laura and Robyn’s lack of standing to sue defendant attorneys in a separate action seeking disgorgement of a portion of the attorney fees charged to the estate…but did not constitute a waiver of any other claim;

[D]eclared that with respect to any claim in a separate action by Laura and Robyn against defendant-attorneys for disgorgement of their proportionate share of the interest component of the hourly portion of the contingent fee, defendant attorneys will not raise or have the benefit of any statute of limitations defense not now available to Michael…

Soon thereafter, Robyn and Laura filed an action for malpractice, breach of contract, breach of the covenant of good faith and fair dealing, and excessive and unreasonable fees against the defendant attorneys. The attorneys moved to dismiss under the entire controversy doctrine and on the basis that the action was barred by the statute of limitations.

Issue: Whether a legal malpractice action commenced by plaintiffs against the attorneys for the estate of their father was properly precluded by the disposition of earlier lawsuits or barred by the statute of limitations?

Ruling: The Appellate Division held that the entire controversy doctrine did not bar Robyn and Laura’s malpractice claim because it was “either unknown or unaccrued” during the earlier probate proceedings. Moreover, the assertion of a legal malpractice claim would have been “inconsistent with the nature of those particular proceedings”.

The Appellate Division did note, however, that:

[T]he exceptions filed…in the formal accounting action were chiefly directed at the services directed by defendant attorneys and the propriety of the 1998 contingency fee agreement…

Nevertheless, the Court held that the entire controversy doctrine could not bar the action, since “the action on an accounting in probate is a vehicle for addressing the conduct of the executor, not the conduct of others”. Furthermore, the Court noted that the “summary nature of the accounting action would prevent a person interested in an estate from filing an affirmative pleading other than exceptions to the accounting and, thus, eliminate any opportunity to join new parties”. The Court also noted that the plaintiffs’ previous action against the attorneys’ had been dismissed with specific reference to the potential for subsequent proceedings between them.

The Court held that application of the entire controversy doctrine in such circumstances would be inequitable, since:

[The previous proceedings] did not provide the concomitant right to a full and fair exploration or development of those issues prior to a trial date that loomed a mere two months after expansion of the accounting action’s scope.

The Appellate Division also declined to bar Laura and Robyn’s claim for fee disgorgement on the basis of the expiration of the six year statute of limitations:

Although Laura and Robyn were parties to the 1998 fee modification agreement – an event that demonstrably occurred more than six years before the commencement of this action – there is nothing about the agreement that would necessarily provide Laura and Robyn with an inkling of the ultimate counsel fee burden to the extent required by our summary judgment standards.

Consequently, the Court held that the defendant attorneys could again move for summary judgment on statute of limitation grounds after a more “fully developed exposition of the issues”.

Lesson: The entire controversy doctrine will not bar legal malpractice claims where plaintiff has not previously been afforded “a full and fair opportunity to prosecute that claim”. A claim for fee disgorgement will not always be barred six years from the date of the signing of the retainer agreement. The determinative date appears to be when the client “understood the overall quantum of fees” to be charged, and that “a failure to object would later preclude their assertion of the excessiveness” of the fee.

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Cobalt Multifamily Investors I, LLC v. Shapiro, 2009 WL 2058530 (S.D.N.Y. July 15, 2009)

Facts:  Receiver for the defunct Cobalt Multifamily Investors I, LLC entities (“Cobalt”) filed suit against three sets of attorneys and their law firms for malpractice, looting, aiding and abetting conversion, conversion, unjust enrichment, breach of fiduciary duty, and breach of contract.  

The defendants moved to dismiss for lack of standing under the Wagoner Rule and the Court granted their motion.  The Wagoner Rule provides that a bankrupt corporation, and by extension, an entity that stands in the corporation’s shoes, lacks standing to assert claims against third parties for defrauding the corporation where the third parties assisted corporate managers in committing the alleged fraud. The Court rejected the Receiver’s argument that the adverse interest exception applied and granted the motion to dismiss, holding that the managers’ misconduct provided at least some financial benefit to the Cobalt entities, and therefore, they did not totally abandon the interests of the corporation, and were not acting entirely for their own or another’s purpose.  The Receiver filed a Motion for Reconsideration.  

Issue:  Did the Receiver have standing to bring a professional malpractice claim against the law firm defendants on behalf of Cobalt?

Ruling:  The Receiver had standing to bring a malpractice suit on behalf of the defunct entity. 

Applicability of the Adverse Interest Exception to the Wagoner Rule:

In granting the Motion for Reconsideration, the Court rejected the notion that a benefit to the corporation from the wrongdoer’s conduct precludes application of the adverse interest exception, and instead held that a corporation’s manager can totally abandon a corporation’s interests even if the manager’s actions somehow benefit the corporation because the relevant inquiry is whether the manager intended to benefit the corporation. 

Under this standard, the Court agreed that the Receiver’s allegations supported the conclusion that Cobalt’s managers had the intent to totally abandon Cobalt’s interests by utilizing investor funds for their personal benefit.  

The Court rejected the attorneys’ argument that the adverse interest exception is inapplicable because the managers set up a corporation expressly for the purpose of defrauding outsiders and by doing exactly that, they actually furthered the corporation’s interests:

Implicit in this argument is the view that the interests of the corporation should be defined solely by considering the interests of the managers, and not by considering the interests of the shareholders as well. Law Firm Defendants offer no compelling legal support for this position. Moreover, this position runs contrary to basic principles of corporate law that take into account the interests of the shareholders when defining the interest of the corporation.

Applicability of the Sole Actor Rule to the Adverse Interest Exception:

The Law Firm Defendants argued that even if the adverse interest exception applied to the Wagoner Rule, the sole actor rule would still preclude the Receiver’s standing to bring claims against them. The sole actor rule is an exception to the adverse interest principle and applies where the principal and agent are one and the same. In such instances, the agent’s knowledge is imputed to the principal, unless the corporation had owners or managers who were innocent of the fraud. 

The Court held that the sole actor rule would not prevent the Receiver from pursing his claims against the Law Firm Defendants, since the corporation (the principal) had 300 innocent shareholders versus three fraudulent managers. More importantly, the shareholders had the authority to stop the fraud, and would have done so had they known about it.

The Law Firm Defendants argued that the managers dominated and controlled the corporation, and therefore, the sole actor rule must apply notwithstanding the innocent shareholders. The Court found no merit to this argument, however, since the managers of Cobalt did not have “complete control”, i.e. the shareholders had the authority to remove them.

Lesson:  A Receiver will be allowed to bring professional malpractice claims where he can establish the insiders' intent to benefit themselves at the expense of the corporation and its shareholders.

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Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, 538 F.3d 469 (6th Cir. 2008)

Facts:  Plaintiff alleged that the Defendant law firm violated the Federal Debt Collection Practices Act (“FDCPA”) by representing to her that her debt would be assumed valid unless she disputed the debt “in writing” even though the FDCPA does not require a written dispute.  Defendants filed a motion for summary judgment on the basis that that they qualified for the FDCPA bona fide error defense. The district court granted the motion and Jerman appealed on two grounds: (1) the district court erred in concluding that the FDCPA’s bona fide error defense may apply to mistakes of law, and (2) even if the defense does apply to mistakes of law, a question of fact remains as to whether defendants maintained procedures reasonably calculated to avoid the violation.
 

Issue:  Was the Defendant law firm's mistake a bona fide error under the FDCPA?

Ruling:  Yes.

The FDCPA bona fide error defense (15 U.S.C. § 1692k(c)) provides:

A debt collector may not be held liable in any action brought under this subchapter if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.

Whether the bona fide error defense applies to mistakes of law or procedural/clerical error was an issue of first impression for the Court. The Court reviewed the case law from the Sixth Circuit as well as other jurisdictions, and ultimately rejected Jerman’s argument that the FDCPA bona fide error defense should apply only to clerical mistakes because the Truth In Lending Act (“TILA”) bona fide error defense applies only to clerical errors, since the TILA, unlike the FDCPA, is explicitly limited to “clerical, calculation, computer malfunction and programming, and printing errors, except that an error of legal judgment with respect to a person's obligations under this subchapter is not a bona fide error.” The FDCPA, on the other hand, has no such provision.

The Court also rejected Jerman’s argument that the phrase “maintenance of procedures reasonably adapted to avoid any such error” references clerical errors because “ it makes no sense that a collector can maintain procedures reasonably adapted to avoid mistakes of law”.  The Court stated:

[T]here is nothing unusual about attorney collectors maintaining procedures, such as frequent education and review of the FDCPA.

After concluding that mistakes of law may be considered bona fide errors, the Court held that defendants had , in fact, set up satisfactory procedures in an effort to avoid such errors by:

• Designating a principal of the firm for handling compliance issues;
• Regularly attending seminars on FDCPA issues;
• Subscribing to relevant publications; and
• Counseling attorneys and other employees on the firm’s obligations under the FDCPA and providing them with a procedures manual;

Finally, the Court rejected Jerman’s argument that adoption of the model language contained in the International Guide to the FDCPA of the American Collector’s Association is the only acceptable procedure to avoid the legal error at issue.

Lesson:  Attorneys may be able to rely on the bona error defense to avoid liability under the FDCPA for mistakes of law by incorporating compliance mechanisms into their practice, keeping abreast of pertinent developments, and educating support staff of the firm's obligations under the FDCPA.

Note: The US Supreme Court has granted cert. See 129 S.Ct. 2863 (2009),  as  there is conflict among the circuits with the 2d, 8th and 9th circuits holding that the bona fide error defense does not apply to violations resulting from legal mistakes. Stay tuned. We will keep  you posted as soon as the Court rules. 

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Staron v. Weinstein, 305 N.J. Super. 236 (App. Div. 1997).

Student Contributor:  Daniel Schick

NJ Underlying Personal Injury Action

Facts:  Staron was allegedly injured in an auto accident in October, 1985 and retained Weinstein to represent her in the pursuit of her personal injury claims.  The parties signed an "An Agreement to Provide Legal Services", the first page of which referred to "Sheldon G. Weinstein, Esq." as the "law firm" being retained.  The next page of the Agreement, however, listed "Robert C. Thelander, Esq.".  Weinstein further submitted a request for Personal Injury Protection benefits on Thelander's stationery with Weinstein listed as "Of Counsel".  Thelander disassociated himself from Weinstein's practice in September, 1986.  Weinstein continued to represent Staron through 1989, but never timely filed a Complaint with regard to her personal injury claims.

Several years later, Plaintiff bought a suit for legal malpractice against Weinstein and Thelander.

Issue:  Did Thelander owe any duty to Staron? 

Ruling:  Yes.

In the context of a motion for summary judgment, plaintiffs made a sufficient showing that Thelander's firm became counsel for plaintiffs by virtue of both the retainer agreement and the fact that defendant had at least apparent authority to enter into such agreements on behalf of the firm...Having become counsel for plaintiffs, it was the responsibility of the Thelander firm to either terminate the representation or give notice that it was terminated by virtue of Weinstein's departure.

In reaching its holding, the Court further noted that Thelander's role in Weinstein's cases and his entitlement to a share of the proceeds of any recovery obtained by Weinstein was not clear.  Moreover, it was not know what, if any, control mechanisms Thelander had in place to determine in what matters Weinstein had been retained in his capacity as "Of Counsel" to his firm. 

Lesson:  A law firm and its principals are ordinarily liable for wrongful acts and omissions of lawyers who have an "Of Counsel" relationship with the firm.  The scope of liability for acts of an "Of Counsel" lawyer may be affected by the terms of the Of Counsel relationship and the extent of the lawyer's affiliation to the firm apparent to the lawyer's clients.

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The Legal Malpractice Law Review  

is proud to celebrate its 6 month anniversary today 

and the

30,000th visit to its site

by a growing list of loyal readers. 

Thank you for your vote of confidence!

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The American Bar Association's Lawyers' Professional Liability Committee's National Legal Malpractice Conference in Washington DC has been a smash hit, with 500+ lawyers in attendance.

The Legal Malpractice Law Review was showcased at a well-attended roundtable discussion called  "Teaching Tomorrow's Lawyers to Avoid Legal Malpractice". It  demonstrated this blog as the latest cutting edge internet based method for teaching law students --and practicing lawyers, about how malpractice occurs and how to avoid those risks.  Pointing out that  a mere 10 per cent of the 193 ABA approved law schools in the US offer their students a full semester course on legal malpractice, panelists Ben Wasserman, Susan Fortney, Mitch Simon and Jett Hanna, sought to enlist  the professional liability insurance industry in a pro-active drive to encourage more law schools to offer such a course to their law students.  Ron Mallen, co-author of the leading treatise, Legal Malpractice,  has long called for legal malpractice to be taught as a required course in law school and he was there to join in the discussion. 

The two and a half day conference started off with a wonderful presentation by Associate Supreme Court Justice Antonin Scalia, who spoke with Bryan A. Garner of Law Prose, Inc. about the basics contained in  their new book, Making Your Case: The Art of Persuading Judges. (very worthwhile reading)

A central theme of the Conference focused on how emerging legal technology is reshaping the lawyer's  standards of care in the 21st century and how this brings new malpractice risks to practicing lawyers.

And as the lawyers at the Conference saw this web-based cost-free educational blog and heard from  Hofstra Law  students who helped to create it, the Legal Malpractice Law Review welcomed the 30,000th "visitor"  to its pages in the less than 6 months since it went live. "A great blog" , one lawyer in attendance at the Conference immediately "tweeted".  

Kudos to the Committee for a job well done!

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Shaw v. Manufacturers Hanover Trust Co.,  68 N.Y.2d 172, 499 N.E.2d 864(App. Div.1986)

NY: Underlying  Personal Injury Action--Fee Dispute

Student Contributor: Candice L. Deaner

Facts: The Plaintiff brought a personal injury claim and retained the law firm  on a contingent fee basis. The agreement did not mention appeals. After the trial ended in a verdict for the defendant, the Plaintiff wanted to appeal. The law firm agreed, on the condition that Plaintiff advance the litigation expenses. Plaintiff refused and retained new counsel and eventually obtained an award of $1.5 million in the retrial. The original law firm then sought to collect on the award and the client objected.

Issue: Whether an attorney can collect on a contingency fee agreement when the terms of representation were not clearly stated?

Ruling: The New York State Court of Appeals denied the fee request.

1)  Retainer agreements should be clear on the scope of representation. The Court said,

"The importance of an attorney's clear agreement with a client as to the essential terms of representation cannot be overstated. The client should be fully informed of all relevant facts and the basis of the fee charges, especially in contingent fee arrangements.”

2) The contract should be viewed in a light most favorable to the client. The court held “Had the client maintained that the retainer agreement required respondent's representation through conclusion of the matter, that would have been the mandated interpretation. But here, the client has asserted that the contract terminated upon entry of an adverse judgment. We hold that the agreement must be construed so to provide."

3) The court found that the agreement only spoke of adjudicating the claim. Even if the contract applied to an appeal, the law firm breached the contract by insisting on an additional term for handling the appeal; namely, advancing  expenses. The retainer agreement only addressed the computation of the ultimate fee, it made no provision for expenses.

The Lesson: Retainer agreements should contain clear language stating the legal services to be provided. The attorney should be sure that the client understands the scope of the attorney’s representation.. Attorney’s can safeguard themselves by including any and all limitations in writing, so that there is no question as to what the scope of employment was from the beginning of the attorney/client relationship.

Note: From a malpractice viewpoint, a clear "scope of the engagement" clause is critical to protecting the lawyer from liability for services that are beyond the scope of the engagement.

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Piluso v. Cohen, 2000 P.A. Super. 335, (2000).

PA underlying medical malpractice action.

Student Contributor: Colleen Gaedcke

Facts: Appellant sued two doctors and the hospital for medical malpractice. Attorney for the appellant, the appellee, entered into a settlement agreement for $100,000 with doctor A and the hospital. Appellant was not present for the settlement negotiations. Appellant argues on appeal that the appellee settled the case without her consent or knowledge. Appellant stated that she did first learned of the settlement at trial when asked the appellee why the other defendants were not present at the trial. However, the appellant did not repudiate the settlement, but rather proceeded to trial against doctor B. The jury entered a 1.5 million dollar verdict in favor of the appellant, holding the hospital and doctor A liable. After the verdict was entered, the appellant tried to repudiate her attorney’s authority to enter into the settlement for the first time. Appellant brought a malpractice claim against the appellee. The lower court grated summary judgment in favor of the attorney and the woman appealed.

Issue: Whether a client can repudiate a settlement that was entered into by his or her attorney without his or her expressed authority?

Ruling: In affirming the lower courts grant of summary judgment in favor of the appellees, the Superior Court held:
1) “A client ratifies his attorney’s act if he does not repudiate it promptly upon receiving knowledge that the attorney has exceeded his authority.”
2) As a matter policy, settlements are favored by the law and must be sustained in the absence of fraud and mistake.

“We foreclose the ability of dissatisfied litigants to agree to a settlement and then file suit against their attorneys in the hope that they will recover additional monies…[because] to permit otherwise…places an unnecessarily arduous burden on an overly taxed court system.”

Lesson: If an attorney makes a decision to settle their client’s case without their clients authority or knowledge and the client does not attempt to immediately repudiate the authority of his counsel to enter into a settlement, but rather accepts the benefits flowing from the settlement, the client has ratified the act of the attorney and will be prevented to bring a malpractice claim against his or her attorney.

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First American Title Ins. Co v. Jordan W. Kapchan,  Superior Court of NJ App Div. Docket No. A-5953-08T2 (decided April 12, 2010)

NJ Underlying mortgage loan

Facts: Plaintiff title insurer from California,  had to pay out $150,000 to 5 intended payees of mortgage proceeds—all from outside NJ, who did not receive payment from mortgage closing related to NJ property. Title Insurer now sues its closing attorney for not following closing instructions. The closing attorney was located in New York. He was not admitted to practice in NJ, had no office in NJ and did not solicit business in NJ. There was no physical loan closing in NJ. The loan proceeds were deposited by the California mortgage lender into the closing attorney’s trust account in NY and was disbursed by the closing attorney from NY. The NY closing attorney sent the mortgage for recordation in Mercer County, NJ to the title agency, which was in NJ.
The trial court dismissed for lack of personal jurisdiction over the NY attorney.
The Appellate Division reversed and found that NJ had personal jurisdiction over the NY attorney.

ISSUE: How little must a NY closing attorney do to be subject to suit for legal malpractice in NJ?

RULING:

The NJ property “itself, provides a very tangible and central nexus between [the NY closing attorney] and the State of New Jersey.” 

The only other NJ contact was that the NY lawyer mailed the marked up title binder, the HUD-1 and the mortgage for recordation to the title agency in NJ. And that was all done from NY.

LESSON: The case shows how  truly “minimal” the out-of-state closing attorney’s contacts with the State of NJ needs to be and how very long NJ’s jurisdictional arm can be. Other issues to be decided: Choice of law. Will the NY lawyer’s conduct be measured by NY or NJ standards? Will the California title insurer be entitled to recover consequential damages such as its attorney’s fees and litigation expense under Saffer v. Willoughby or will the law of some other state apply?

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Maritrans GP, Inc. v. Pepper, Hamilton & Scheetz, 529 Pa. 241 (Pa. 1992)

Student Contributor: Melissa Goldberg

Underlying: Motion to disqualify for  Conflict of Interest 

Facts: Defendant represented Plaintiff in broad range of labor matters for well over a decade. During the course of their labor representation of Plaintiff, Defendant became familiar with Plaintiff’s operations and "gained detailed financial and business information. The Court of Common Pleas of Philadelphia County entered an order preliminarily enjoining Pepper and Messina from continuing to act as labor counsel for seven of Plaintiff’s New York-based competitors. The trial court ruled that preliminary injunctive relief was necessary given the existence of a substantial relationship between Defendant’s current representation of the New York companies, whose interests were adverse to the interests of Plaintiff, and their former longstanding representation of Plaintiff.

Issue: Is the conduct of Defendant Attorney’s is actionable independent of any violation of the Code of Professional Responsibility?

Result: Violations of the Code do not per se give rise to legal actions that may be brought by clients or other private parties; however, the record supports a finding that Defendant’s conduct here constituted a breach of common law fiduciary duty owed to Plaintiffs.
1) there is a well-entrenched body of substantive law prohibiting fiduciaries from engaging in conflicts of interest, and that there is no law excepting attorneys from that prohibition.
2) the trial court improperly relied upon the Rules of Professional Conduct without any independent finding that Pepper and Messina's conduct was "actionable." Just as there would be an independent cause of action available to a client whose attorney has misappropriated his funds, so too there is an independent cause of action available to a client whose attorney engaged in impermissible conflicts of interest vis a vis that client.

Lesson: The public's trust in the legal profession undoubtedly would be undermined if the Court did not recognize the common law foundation for the principle that an attorney's representation of a subsequent client whose interests are materially adverse to a former client in a matter substantially related to matters in which he represented the former client constitutes an impermissible conflict of interest actionable at law.

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Rechberger v. Scolaro, Shulman, Cohen, Fetter & Burstein, P.C., 45 A.D.3d 1453, 848 N.Y.S.2d 459 (2007)

NY Underlying Commercial Transactions

Student Contributor: Maninder (Meena) Saini

Facts: Plaintiff (Rechberger) filed a lawsuit against defendant (law firm), alleging legal malpractice. Plaintiff was seeking damages for investment losses arising from the defendant’s malpractice. The plaintiff contended that defendant's representation of a corporation of which plaintiff was a shareholder establishes that defendant had an attorney-client relationship with plaintiff.

Issue: Does an attorney’s representation of a corporation establish an attorney-client relationship with its investors/shareholders?

Holding: The Appellate court held that the defendant lacked an attorney-client relationship with plaintiff. A “unilateral belief by parties that they had an attorney-client relationship with an attorney does not by itself confer upon them the status of clients,” for purpose of a legal malpractice action. The plaintiff’s complaint was dismissed.

Rule: A unilateral belief by one party that an attorney-client relationship exits is not dispositive of the actual existence of such a relationship. To succeed on an action for legal malpractice, a plaintiff must prove, among other things, the existence of an attorney-client relationship.

Lesson: This case illustrates the principal of privity between individuals, corporations and attorneys. An attorney is not liable to plaintiff for damages in a legal malpractice action unless the attorney and the plaintiff had a direct attorney-client relationship. In this case, the defendants met its burden by establishing that it had no attorney-client relationship with plaintiffs.

NOTE: See also, RPC 1.13 Organization as the Client, where the representation by a lawyer of an entity is separate and distinct from its members. That Rule applies, with few exceptions, to business entities and shareholders, partners or members.  

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Sash v. Schwartz,  2007 WL 30042 (S.D.N.Y. 2007).

N.Y. underlying criminal conviction

Student contributor: Cheryl Neuman

Facts: Plaintiff was represented by defendant attorney in a criminal proceeding. Plaintiff was arrested for unlawfully possessing and producing N.Y.P.D. badges and selling counterfeit police badges. He was also arrested for possession of counterfeit bar code stickers for merchandise at K-Mart stores. After appearing before the magistrate judge, plaintiff pled guilty to two counts. He was  sentenced to eight years of supervised release. The Second Circuit affirmed the conviction but decreased the supervised release to three years. Plaintiff was also indicted for fraud, arising from filing false insurance documents claiming that his wife had been killed in the World Trade Center attacks on 9/11. Plaintiff claims that but-for defendant’s negligent representation, he would not have pled guilty to the various crimes with which he was charged.

Issue: Is the defendant liable to the plaintiff for legal malpractice?

Ruling: No, the defendant is not liable to the plaintiff for legal malpractice because a criminal defendant must show that the alleged legal malpractice was the “cause of the conviction.” Claudio v. Heller, 119 Misc.2d 432 (N.Y. Sup. Ct. 1983). The standard for a criminal defense malpractice claim differs from the standard for civil legal malpractice.  A plaintiff must allege his innocence of the underlying offense to successfully bring a legal malpractice case against his attorney in an underlying criminal proceeding. The elements of a malpractice case in N.Y. are:
1) A duty
2) A breach of the duty, and
3) Proof that actual damages were proximately caused by breach of the duty

Lesson: “A criminal defendant may be able to prove that but for the action of his counsel he would have invoked the 5th amendment or succeeded in suppressing evidence.” Carmel, 70 N.Y.S.2d 173. A criminal defendant, however, who pled guilty or was found to be guilty, cannot assert his innocence. It is for that reason that a criminally convicted plaintiff cannot bring a legal malpractice cause of action under these circumstances. Had the conviction been overturned or vacated, then plaintiff’s claim might  not have been barred.

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Baccash v. Sayegh, 862 N.Y.S.2d 564 (App. Div. 2008); 53 A.D.3d 636.

Student contributor: Cheryl Neuman

N.Y. underlying business acquisition

Facts: Plaintiff owned Iman Bridal Couture, Inc. and retained Defendant lawyer to represent her in connection with buying the “Peggy Peters’” trade name. Peggy Peters was another bridal boutique located near plaintiff’s store. Plaintiff wanted to buy the trade name so that she could open a bridal boutique under the Peggy Peters name. The defendant, however, told plaintiff that she would have to buy all the inventory in order to buy the Peggy Peters trade name. The plaintiff agreed to that arrangement, but unbeknownst to the plaintiff, defendant negotiated a stock purchase rather than an asset purchase of Peggy Peters. The plaintiff didn’t read the stock purchase agreement because she trusted and relied on defendant. Plaintiff subsequently sued defendant for legal malpractice because he negotiated a stock purchase agreement rather than an asset agreement, as they had agreed.

Issue: Whether defendant is liable to plaintiff for legal malpractice because he negotiated a stock purchase agreement instead of an asset purchase agreement?

Ruling: Defendant is not liable to plaintiff for legal malpractice because the plaintiff’s proof was insufficient to establish that she sustained actual damages as a result of the defendant’s conduct.

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.  (citing, Rudolf v. Shayne, Dachs, Stanisci, Corker, & Sauer, 8 N.Y.3d 483 (App. Div. 2007).

Lesson:  The plaintiff paid off the debts of Peggy Peters through Iman Bridal Couture. This fact, however, was not dispositive in ascertaining damages because the court stated, “Although it is undisputed that the plaintiff is Bridal Couture’s sole officer and shareholder, a corporation has a separate legal existence from its shareholder even when the corporation is wholly owned by a single individual,” such as in this case. 

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Rudolf v. Shayne, Dachs, Stanisci, Corker, & Sauer,8 N.Y.3d 438; 867 N.E.2d 385 (2007).

N.Y. underlying personal injury action

Student contributor: Cheryl Neuman

Facts: Plaintiff was walking across Sunrise Highway when he was struck by a car. He suffered personal injuries and retained defendants to represent him in his case against the driver. There was a traffic signal that controlled the intersection where the accident occurred. There was conflicted testimony as to whether plaintiff was in the crosswalk at the time that the car struck him. Defendants requested, at the completion of testimony, that the court should instruct the jury regarding the statutory requirements of Vehicle and Traffic Law § 1151. Section 1151 concerns intersections without traffic signals. The provision also imposes a duty on pedestrians not to “suddenly leave a curb or other place of safety and walk or run into the path of a vehicle which is so close that it is impractical for the driver to yield.” The jury returned a verdict that both plaintiff and driver were negligent, apportioning 50% of the liability to each party. Plaintiff retained new counsel to set aside the verdict, claiming that the court gave the wrong charge to the jury.

Issue: Whether it was legal malpractice for the defendants to request a jury charge of §1151, when §1111 was the appropriate section that defendants should have requested?

Ruling: Yes, the failure to object to the §1151 jury charge and not to request §1111 was legal malpractice. Section 1111 applies to intersections regulated by traffic signals and grants pedestrians “facing any steady green signal the right of way within a crosswalk.” The erroneous charge was a fundamental error requiring a new trial because it affected the jury’s consideration of the plaintiff’s liability.

Lesson: Damages in a legal malpractice case are designed to make the injured client whole. A plaintiff’s damages may include litigation expenses incurred in attempt to avoid, minimize, or reduce the damage caused by the attorney’s wrongful conduct. The plaintiff in this case was therefore entitled to litigation expenses he incurred in the legal malpractice lawsuit. 

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Koen Book Distributors v. Powell, Trachtman, Logan, Carril, Bowman & Lombardo, P.C.,
212 F.R.D. 283 (E.D. Pa. 2002).

PA. underlying bankruptcy proceeding

Student contributor: Cheryl Neuman

Facts: Plaintiffs retained Defendants for advice concerning a security interest from one of its customers. After the customer filed for bankruptcy, defendants continued to represent plaintiffs as creditors in the bankruptcy proceeding. Plaintiffs eventually informed defendants that they would be initiating a malpractice action against them due to their dissatisfaction with the defendants’ services. The attorney client relationship was terminated 3 months later. During the time when the defendants were first put on notice about the pending the lawsuit and the time when the attorney-client relationship was actually terminated, defendants consulted with other lawyers in their firm concerning ethical and legal issues regarding the upcoming malpractice action. The plaintiffs wanted access to the documents that were produced as a result of the inquiry within defendants’ law practice.

Issue: Does the attorney-client privilege apply to documents that a lawyer prepared in response to an ethical inquiry concerning the client, who has threatened to initiate a malpractice action against the firm?

Ruling: No. The attorney client privilege does not apply in this situation. The defendants also relied on the work-product doctrine, but this doctrine does not apply where a client, as opposed to another party, seeks discovery of the lawyer’s mental impressions. The documents are therefore discoverable.

Lesson: The purpose of the attorney client privilege is to promote full disclosure and communication between attorneys and their clients, thereby encouraging broader public interests. In this case, had the defendants realized the predicament involved in this situation, they should have either
a) Withdrawn from representing the plaintiff, or
b) They could have requested consent from the plaintiff and continued representation after full disclosure and consultation. 

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In re Estate of Westin, 874 A.2d 139, 2005 PA Super 158 (Pa. Super. Ct. 2005)

PA Underlying Will Probate

Student Contributor: John Anzalone

Facts: Creditors of an estate bring suit to remove  Attorney as the executor of the estate because of the embezzlement of the estate's funds by an employee of the law firm. The lower court held that the request to remove Executor Attorney was moot since he voluntarily agreed to withdraw.

Issue: Did the Orphan's Court err in refusing the creditor's request to remove the Executor Attorney as executor of the estate?

Ruling: In reversing the lower court, the Superior Court held that the lower court should have dismissed the Executor Attorney and appointed a new executor, based on the following considerations:
1) The court  can remove an executor of an estate when that executor's personal interests conflict with the estates and "cannot be served simultaneously."
2) Here, the estate has an action against the executor for the embezzlement from the account maintained by the executor for the estate. There is a conflict of interest here because the Executor Attorney would have to sue himself and his law firm on behalf of the estate to protect the estate's interests.

Lesson: Even where an attorney-executor recognizes his conflict of interest and resigns, the court can still officially remove him and appoint another in his place.  Here is another example of the sometimes troubling issues raised when an attorney who prepares a will, names himself as Executor and serves in that role. 

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SUPREME COURT OF THE UNITED STATES
Syllabus
PADILLA v. KENTUCKY
CERTIORARI TO THE SUPREME COURT OF KENTUCKY
No. 08–651. Argued October 13, 2009—Decided March 31, 2010

Petitioner Padilla, a lawful permanent resident of the United States for over 40 years, faces deportation after pleading guilty to drug-distribution charges in Kentucky. In postconviction proceedings, he claims that his counsel not only failed to advise him of this consequence before he entered the plea, but also told him not to worry about deportation since he had lived in this country so long. He alleges that he would have gone to trial had he not received this incorrect advice. The Kentucky Supreme Court denied Padilla post conviction relief on the ground that the Sixth Amendment’s effective-assistance-of-counsel guarantee does not protect defendants from er-roneous deportation advice because deportation is merely a “collateral” consequence of a conviction.

Held: Because counsel must inform a client whether his plea carries a risk of deportation, Padilla has sufficiently alleged that his counsel was constitutionally deficient. Whether he is entitled to relief depends on whether he has been prejudiced, a matter not addressed here. Pp. 2–18.

(a) Changes to immigration law have dramatically raised the stakes of a noncitizen’s criminal conviction. While once there was only a narrow class of deportable offenses and judges wielded broad discretionary authority to prevent deportation, immigration reforms have expanded the class of deportable offenses and limited judges’authority to alleviate deportation’s harsh consequences. Because the drastic measure of deportation or removal is now virtually inevitablefor a vast number of noncitizens convicted of crimes, the importance of accurate legal advice for noncitizens accused of crimes has never been more important. Thus, as a matter of federal law, deportation is an integral part of the penalty that may be imposed on noncitizen de-fendants who plead guilty to specified crimes. Pp. 2–6.

(b) Strickland v. Washington, 466 U. S. 668, applies to Padilla’s claim. Before deciding whether to plead guilty, a defendant is entitled to “the effective assistance of competent counsel.” McMann v. Richardson, 397 U. S. 759, 771. The Supreme Court of Kentucky rejected Padilla’s ineffectiveness claim on the ground that the advice he sought about deportation concerned only collateral matters. However, this Court has never distinguished between direct and collateral consequences in defining the scope of constitutionally “reason-able professional assistance” required under Strickland, 466 U. S., at 689.

The question whether that distinction is appropriate need not be considered in this case because of the unique nature of deportation. Although removal proceedings are civil, deportation is intimately related to the criminal process, which makes it uniquely difficult to classify as either a direct or a collateral consequence. Because that distinction is thus ill-suited to evaluating a Strickland claim concerning the specific risk of deportation, advice regarding deportation is not categorically removed from the ambit of the Sixth Amend-ment right to counsel. Pp. 7–9.

(c) To satisfy Strickland’s two-prong inquiry, counsel’s representation must fall “below an objective standard of reasonableness,” 466 U.S., at 688, and there must be “a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different,” id., at 694. The first, constitutional deficiency, is necessarily linked to the legal community’s practice and expectations. Id., at 688. The weight of prevailing professional norms supports the view that counsel must advise her client regarding the deportation risk. And this Court has recognized the importance to the client of “ ‘[p]reserving the . . . right to remain in the United States’ ”and “preserving the possibility of” discretionary relief from deporta-tion. INS v. St. Cyr, 533 U. S. 289, 323. Thus, this is not a hard case in which to find deficiency: The consequences of Padilla’s plea could easily be determined from reading the removal statute, his deportation was presumptively mandatory, and his counsel’s advice was incorrect. There will, however, undoubtedly be numerous situations in which the deportation consequences of a plea are unclear. In those cases, a criminal defense attorney need do no more than advise a noncitizen client that pending criminal charges may carry adverse immigration consequences. But when the deportation consequence is truly clear, as it was here, the duty to give correct advice is equally clear. Accepting Padilla’s allegations as true, he has sufficiently alleged constitutional deficiency to satisfy Strickland’s first prong.Whether he can satisfy the second prong, prejudice, is left for the Kentucky courts to consider in the first instance. Pp. 9–12.

(d) The Solicitor General’s proposed rule—that Strickland should be applied to Padilla’s claim only to the extent that he has alleged affirmative misadvice—is unpersuasive. And though this Court must be careful about recognizing new grounds for attacking the validity of guilty pleas, the 25 years since Strickland was first applied to ineffective-assistance claims at the plea stage have shown that pleas are less frequently the subject of collateral challenges than convictions after a trial. Also, informed consideration of possible deportation canbenefit both the State and noncitizen defendants, who may be able toreach agreements that better satisfy the interests of both parties. This decision will not open the floodgates to challenges of convictions obtained through plea bargains. Cf. Hill v. Lockhart, 474 U. S. 52,58. Pp. 12–16. 253 S. W. 3d 482, reversed and remanded.

STEVENS, J., delivered the opinion of the Court, in which KENNEDY, GINSBURG, BREYER, and SOTOMAYOR, JJ., joined. ALITO, J., filed an opin-ion concurring in the judgment, in which ROBERTS, C. J., joined. SCALIA, J., filed a dissenting opinion, in which THOMAS, J., joined

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