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

Kahn v. Hart, 270 A.D.2d 231 (N.Y. App. Div. 2d Dep't 2000)

NY: Underlying loan transaction

Student Contributor: Melissa Goldberg

Facts: The Plaintiff commenced this action against Defendants alleging legal malpractice arising from representation on two loan transactions. The Plaintiff alleged that he did not learn until ten years later, after defaults on the loans, that Defendants failed to record two mortgages executed to secure the loans.

Issue: Was this action barred by the statute of limitations?

Result: the Plaintiff's claims of legal malpractice should have been dismissed as time-barred.
1) Pursuant to CPLR 214 (6), an action to recover damages for legal malpractice must be commenced within three years of the accrual of the claim;
2) A claim to recover damages for legal malpractice accrues when the malpractice is committed, not when it is discovered;
3) The legal malpractice complained of occurred more than three years before the commencement of this action, and the Statute of Limitations.

Lesson: This is a harsh rule for Plaintiffs. It does not matter when a Plaintiff learns of a potential legal malpractice action. It only matters when the malpractice occurs. 

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Middleton v. Kenny,286 A.D.2d 957;731 N.Y.S.2d 425 (4th Dept.2001)

NY:Underlying Personal Injury Action

Student Contributor: Natalie Resto

Facts: The plaintiff in the underlying action sued the architects, engineers and HVAC contractors for the alleged exposure to fumes and chemicals at their workplace. The appellate division dismissed the underlying action holding that the lower court abused its discretion in granting the plaintiff’s motion for an extension of time to file a note of issue after having been served with a 90-day demand pursuant to CPLR 3216. The defendant attorneys argued that the court erred in denying their cross motion seeking summary judgment because the plaintiff’s employer, not them, was the one responsible for the ventilation problem.

Issue: Did the attorneys submit evidence establishing as a matter of law that plaintiff would have been successful in the underlying action?

Ruling: No. The court found that the conflicting opinions of the experts presented issues of credibility to be determined by a trier of fact. The court held that the defendants were negligent in failing to respond to the 90-day demand and ordered a trial on the issues of proximate cause and damages.

Lesson: Even if the attorney can substantiate that someone else, here the employer, was liable for the plaintiff’s injuries, the attorneys still need to establish as a matter of law that the plaintiff would have been unsuccessful in the underlying action. 

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LAWYER MALPRACTICE COURSE SYLLABUS

      SPRING SEMESTER, 2012

     Maurice A. Deane School of Law 

      HOFSTRA UNIVERSITY

Prof. Bennett Wasserman
E: Bennett.Wasserman@hofstra.edu or benwasserman@legalmalpractice.com
C: 201.803.6464    Law Office:  (201) 907.5000


Purpose of the Course:

This course explores legal malpractice law, policy, and problems. In addition to studying the civil liability claims and defenses relating to lawyer and law firm malpractice, the course will survey the development of new theories of liability that over the past two and a half decades have expanded the accountability of practicing lawyers for their professional services. In addition, the course will cover approaches to managing risk,  avoiding malpractice claims and defending them.

This course is designed to: 1) enable students to learn the law and policy related to the professional liability of lawyers; 2) expose students to legal malpractice issues encountered by practicing lawyers in a variety of substantive areas of law; 3) familiarize the student about the central role played by expert witnesses in legal malpractice litigation; 4) enable students to identify, analyze, address and prevent common malpractice traps 5) familiarize the students with the litigation process that is unique to legal malpractice litigation and 6) to see how different states have developed their own unique approach to the legal malpractice law. The class will combine lecture and class discussion of assigned reading materials, a substantial portion of which is taken from actual cases in which the professor has been professionally involved as either an advocate or expert witness. By the end of the course, students will have command of the most important concepts involved in legal malpractice from both the plaintiff and defendant perspectives. Moreover, the course will be entirely based on resources and materials that are available on the internet. 

Course Materials:

Almost  all course materials will be posted on line  at www.legalmalpracticelawreview.com under the link entitled "Topics" / "CLE & Law School Course" on the left hand column.  The class will also use this blog to have on line class discussions in addition to in class discussions. Also, the class writing assignments will be posts to the blog in order to continue to build an online archive of reported and important unreported court decisions,  statutes and authorities  that affect the substantive law of lawyer malpractice.

Non-internet based materials that may be referred to during the semester include the following, all of which are available at the Reference Desk of the Law Library or the Bookstore: 

1) Mallen & Smith, Legal Malpractice (Thomson/West) 

2) Restatement of the Law Governing Lawyers (ALI, 2000)

3) Fortney & Johnson, LEGAL MALPRACTICE LAW: PROBLEMS and PREVENTION (Thomson/West, 2008). (Available in the Bookstore).

4) A Concise Restatement of the Law Governing Lawyers (American Law Institute, 2007). (Available in the Bookstore)

Classes:

This class is scheduled to meet on Thursdays between 12:10 and 2:00 pm in KOPPL Room 0206.

Attendance and Preparation:

Students are expected to attend classes regularly and to prepare for classes conscientiously. If you miss class frequently or are unprepared several times, your grade may be lowered. Alternatively, I may ask the Registrar to withdraw you from the course. Sometimes you can’t avoid missing a class. If you know in advance that you will be missing a class for a compelling reason, or if you have missed a class due to illness or emergency, please send me an e-mail at Bennett.Wasserman@Hofstra.edu or at benwasserman@legalmalpractice.com briefly explaining the situation. As required by the Law School’s attendance policy, an attendance sheet will be circulated at each class, which the student must sign. No student is permitted to sign the attendance sheet on behalf of another student who is either absent or late for class. All students must be familiar with the Law School’s attendance policy and abide by it.

Lateness:

Students are expected to be on time to class. However, it is better to come to class late than not at all. You may walk in late if you have a good reason, as long as you don’t abuse this privilege.

Final Grade for the Course:

The final grade for the course will be determined as follows: Twenty percent (20%) will be based on class participation and your level of preparedness for class discussions. Five percent (5%) will be based on the quantity and quality of your postings on line at www.legalmalpractice.com. Seventy-five percent (75%) of the final grade will be based on your final writing assignments.

Final Writing Assignment:

There is no final exam in this course. Instead, students are required to submit their  writing assignments on a regular basis during the course of the semester.  The details of the writing assignment will be discussed at the first class meeting. It is expected that this course will satisfy the Law School's writing requirement #2.

Computer Policy: Because this course is based almost entirely on internet resource materials, access to a  laptop computer with an internet connection is important for class participation as well as for your assignments. During class, please do not use your computers to “surf the net”, email, text message or shop. If any student does not have access to a laptop, please see Prof. Wasserman  so that arrangements can be made to have one available.  

Communications:

The best way to communicate with me is by email at Bennett.Wasserman@Hofstra.edu or at benwasserman@legalmalpractice.com. I will get back to you within 24 hours. While I do not maintain regular office hours at the Law School, if you need to speak with me in person, we can set up an appointment either before or after class. You may also call me at my law office: (201) 907.5000 extension 473. If I am not there, please  ask for my assistant, Renee Schell at extension 471. My cell phone is (201) 803-6464, which you should always feel free to call after first trying to reach me by email.  You can also text me at my cell number. 

Welcome to the Spring 2012 semester and to this exciting course. 

Prof. W. 

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LAWYER MALPRACTICE  

SPRING SEMESTER, 2012 

        COURSE OUTLINE & READING ASSIGNMENTS

                        Maurice A. Deane School of Law

                           HOFSTRA UNIVERSITY

(updated Jan. 9, 2012)

Prof. Bennett  Wasserman

Contact information:
Email:     Bennett.Wasserman@hofstra.edu or benwasserman@legalmalpractice.com
Cell:        201-803-6464  or      Law Office: 201.907-5000

Class Meets on Thursdays, starting January 12, 2012  between from 12:10 to 2:00 pm in KOPPL Room 0202
 

All Required Reading Materials are hyperlinked below in this  Course Outline & Reading Assignment List. Those that are not linked  are not required for class meetings,  but are recommended. You can  access via  the internet, for example through  Google Scholar or your own student Westlaw or Lexis accounts virtually all other  materials. Materials that you cannot readily access will be placed in a Dropbox folder by Prof. Wasserman,  to which all students will receive an invitation to link to the folder.   Obviously, Google provides an excellent search engine to locate anything you might want to find, as do the official judiciary websites in many states, including New Jersey and New York. 

Additional  Reading Materials:.

Fortney & Johnson,  Legal Malpractice Law: Problems and Prevention (Thomson/West, 2008) (Hereafter referred to as "FJ").

 Restatement of the Law Governing Lawyers (ALI, 2000) (Hereafter "RLGL")

 Rules of Professional Conduct NY  (NY RPC)

Rules of Professional Conduct NJ  (NJ RPC)

________________________________________________________________________________
Class #1- INTRODUCTION TO THE LAW OF LAWYER MALPRACTICE

Topics for Class Discussion:

Sources of Lawyer Liability Common Law;  Rules of Professional Conduct: The Overlapping Worlds of Legal Ethics and Legal Malpractice;  Rules of Professional Conduct as Proof of the Standard of Care; The Malpractice Cause of Action: The Basic Elements

Required Readings:

Savings Bank v. Ward 100 U.S. 195 (1880)

Baxt v. Liloia, 155 N.J. 190 (1998)

Additional Readings:

FJ: Chap. 1 (pp. 1-13); Chap 2 (pp.30-32)

 
 _______________________________________________________________________________

Class #2- THE INDICIA OF THE LAWYER-CLIENT RELATIONSHIP

Topics For Class Discussion:
Forming the Relationship: What you need and what you don’t need; The Scope of the Relationship (Limiting the lawyer’s duty to the client); Ending the Relationship; The Enduring Relationship

Procanik v. Cillo, 226 N.J. Super. 132 (App. Div. 1988) cert. denied 113 N.J. 357 (1988)

Togstad v. Vesely, Otto, Miller et al 291 N.W.2d 686 (1980).

Jordan v. Lipsig Sullivan et al 689 F. Supp. 192 (SDNY 1988)

Gilles v. Wiley, Malehorn & Sirota, 345 N.J. Super 119 (App Div. 2001)

Kriegsman v. Kriegsman, 150 N.J. Super (App Div 1977)

Estate of Albanese v. Lolio 393 N.J. Super 355 (App Div 2007) 

Herbert v. Haytaian, 292 N.J. Super 426 (App. Div. 1996)

Lerner v. Laufer, 359 N.J. Super. 201 (App. Div.) cert. denied 177 N,J.223 (2003)

NY Letters of Engagement Rules 

NJ RPC 1.5 (b):

When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated in writing to the client before or within a reasonable time after commencing the representation. 

Additional Readings:

FJ: Ch. 3 (pp.35-50) 

_____________________________________________________________________________

Class #3- The Client’s "Hybrid" Cause of Action against the Lawyer

Topics for Class Discussion: Breach of Contract; Negligence;Breach of Fiduciary Duty;
Intentional Torts (fraud, conversion)

Required Readings:

 RLGL § 48, 49 

Fiorentino v. Rapaport, 693 A. 2d 208 (Pa. Super. 1997)

Hutchinson v. Smith, 417 So. 2d 926 (Miss. 1982)

Hall v. Nichols, 400 S.E.2d 901 (W.Va. 1990)

Estate of Re v. Kornstein, Veisz & Wexlert, 958 F. Supp.907 (SDNY 1997)

Affidavit of Merit  NJ: 2A:53A--§§26,27,29. 

Additional Readings:

FJ: Ch. 2 (pp. 15-33)

______________________________________________________________________________
Class #4- The Lawyer’s Basic Duties to the Client and the Standard of Care

Topics For Class Discussion:
The Duty of Competence;The Duty of Diligence; The Duty to Investigate; The Duty to Communicate; The Standard of Care--for most of us; For specialists; For local counsel

Required Readings:

RLGL §§ 15 (Prospective Clients,) 16 (A Lawyers Duties to a Client--In General), 48 (Professional Negligence), 50 (Duty of Care to a Client), 51 (Duty of Care to Certain Non-Clients) , 52 (Standard of Care).
RLGL § 20 (Duty to Inform and Consult with Client);  

RPC 1.1 (Competence); 1.3 (Diligence); 1.4 (Duty to Communicate)

RPC 1.2 The Scope of the Relationship

Hodges v. Carter, 239 N.C. 517, 80 S.E.2d 144 (1954). (standard of care)

Matter of  Yetman, 113 N.J.556 (1989)  (competence)

Olds v. Donnelly, 150 N.J. 424 (1997)  (diligence, candor with client) (entire controversy doctrine)

Brizak v. Needle, 239 N.J. Super. 415, 571 A.2d 975 (App Div.1990). (diligence, duty to investigate)

Ingemi v. Pelino & Lentz, 866 F. Supp. 156 (DNJ, 1994)  (role of local counsel)

Dixon-Ticonderoga Co. v. Estate of O’Connor 248 F.3d 151 (2001)

Additional Reading

FJ: Ch 3 (pp. 51-78)

_____________________________________________________________________________
Class #5- The Lawyer’s Fiduciary Duties 

Topics for Class Discussion:
The Fiduciary Duty;   Defining the Essence of the Fiduciary Duty-putting the interests of the client ahead of those of the lawyer. Conflicts of Interest Self-Dealing and Disloyalty; Abusing the position of trust (e.g., excessive billing) Misuse of Confidential Information

Readings:

RLGL § 49

RPC 1.6 (confidentiality) 1.7, 1.8, 1.9 (conflicts of interest)

RPC 1.5 (Reasonable Fees)

Traditional Notions of the Fiduciary Duty

 Profit Sharing Trust v. Lampf Lipkind, 267 N.J.Super 174 (L.Div 1993).

Maritrans v. Pepper, Hamilton & Scheetz, 529 Pa. 241,602 A.2d 1277 (1992)

Matter of Silverman, 113 N.J. 193 (1988)

 NJ ACPE Op.684

The New Frontier: Abusive Billing Practices

Charnay v. Colbert, 51 Cal. Rptr.3d 471 (Cal. App.2d Dist. 2006)

Cripte v. Leiter, 184 Ill. 2d 185, 703 N.E.2d 100 (1998) (IL Supreme Court)

Additional Reading:

FJ: Ch. 4 (pp. 101-116) Ch. 11 (pp.421-424).

______________________________________________________________________________
Class #6 and #7 - The Demise of Privity and The Rise of “Quasi” Client’s Causes of Action for Lawyer Malpractice.

Topics for Class Discussion: Privity and What’s Left of it;  The New York perspective; Other States, a sampling; The “prospective” client;The “implied” client; Duties to the adverse parties and their attorneys
Negligence;Negligent Misrepresentation;   Overcoming Privity’s obstacles:  Assigning the Legal Malpractice Cause of Action Conspiracy; Aiding and Abetting Breach of Fiduciary Duty.

Readings:

RLGL §§15, 51

Traditional Exceptions to Privity: fraud and  collusion

Dodging the Privity Blockade  

The Balancing of Factors Test

Biakanja v. Irving, 49 Cal. 2d 647,320 P.2d 16 (1958)

Lucas v. Hamm, 56 Cal.2d 583, 364 P. 2d 685 (1962)

Heyer v. Flaig, 70 Cal.2d 223, 449 P.2d 161 (1969).

Third Party Beneficiaries of the Lawyer-Client Relationship:

NY: Prudential Ins. Co v. Dewey Ballantine, 80 N.Y.2d 377 (1992).

NJ:  Stewart v. Sbarro  142 N.J. Super 561 (App. Div. 1976) cert denied 72 N.J. 459 (1976)

Albright v. Burns, 206 N.J. Super 625 ((1986)

Aiding and Abetting Breach of Fiduciary Duty

Wasserman, “Where Were the Lawyers?” N.J. Law J. 1/23/07

Duties to our Adversaries?

Petrillo v. Bachenberg,139 N.J.472 (1995)

Davin, LLC v. Daham 329 N.J. Super 54 (2000)

              Contract: Assigning the Legal Malpractice Cause of Action

PA: Hedlund Mfg. Co. v. Weiser, Staper & Spivak, 517 Pa. 522(1988)

NY: Oppel v. Empire Mutual Ins. Co., 517 F. Supp. 1305 (SDNY1981)  

NJ: Alcman Serv.Corp. v. Bullock, 925 F. Supp. 252 (DNJ, 1996)

Additional Reading:

FJ: Ch. 5 (133-179); Ch. 4 (pp.117-128)

Martyn, The Accidental Client, 33 Hofstra L. Rev. 913 (2005)
_____________________________________________________________________________

Class#7- Continuation of Class #6

_____________________________________________________________________________
Class#8- The Legal Malpractice Expert Witness: Why is this Witness Different from
All Others?

 Topics for Class Discussion: The Expert’s Qualifications; The Expert’s Opinion and his Report; Daubert, Kumho Tire, etc.; “Net Opinion” Rule

 Readings:

FRCP 26 

NY CPLR 3101 (d)

NJ Court Rule 4:10-2

Wasserman, "On Being an Expert Witness in Legal Malpractice Cases" (January 2012)

The Federal Approach: Killing  "Junk" Science

Daubert v. Merrill Dow, et al. 509 U.S. 579 (1997)

Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999)

The States' Approach:  No "Net Opinions" 

Celucci v. Bronstein, 277 N.J. Super 506 (App. Div. 1994)

Kaplan v. Skoloff & Wolfe, 339 N.J. Super 97 ( App. Div. 2001)

Froom v. Perel, 377 N.J. Super. 298 (App. Div. 2005) 

Hedinger & Lawless v. Betal, (NJ App. Div. 3-10-2011)

Guarding Against the Expert's "Net Opinion"

Carbis Sales v. Eisenberg, 397 N.J. Super 64 (App. Div. 2007)

Carbis Sales v. Eisenberg  Expert report for Plaintiff

Additonal Reading:

FJ: Chap 3 (pp. 59-70)

______________________________________________________________________________

Class#9- Proximate Cause in Underlying Litigation Cases

Topics for Class Discussion:  Underlying Civil Cases; Proving a Case Within a Case;The “Old Fashion” Way The Streamlined Way;  Underlying Criminal Cases: Constitutional Right to Effective Assistance of Counsel

 Readings:

 RLGL: § 53

The Case Within a Case: "But For the Lawyer's Negligence..."

Hoppe v. Ranzini, 158 N.J. Super. 158 (App. Div. 1978)

Leavy v. Kram, 34 Misc. 2d 479, 226 NYS2d 349 (1962) (collectibility) 

Duncan v. Lord, 409 F. supp. 687 (ED Pa. 1976) (solvency of underlying defendant)

Albee Associates v. Orloff Lowenbach, et al. 317 N.J. Super 211(App.Div.1999)

The Substantial Factor Test

Conklin v. Hannoch Weisman, 145 N.J. 395 (1996)

Burdens of Proof 

Garcia v. Kozlov, 179 N.J. 343 (2004)

Lieberman v. Employers of Wausau, 84 N.J. 325 ((1980)

Pivnick v. Beck 326 N.J.Super 655 (App Div 1999)

Pivnick v. Beck, 165 N.J. 670 (2000)

Vahila v. Hall 674 N.E.2d 1164 (Ohio 1997)

Kelly v. Berlin

Bailey v. Tucker, 533 Pa. 237 (1993)

Fuschetti v. Bierman, 128 N.J. Super 290 (1974) (malpractice jury decides what  a reasonalbe underlying jury would have awarded). 

Additional Readings:

 FJ: Chap 3 C (pp. 79-99);

_____________________________________________________________________________
Class#10-- Proximate Cause in Underlying Transactions

Topics For Class Discussion:
"But for" is alive and well in Commercial Transactions;  Real Estate; Botched  Litigation Settlements as "transactions" and other non-litigation based legal malpractice.

Readings:

Botched Settlements: Litigation Based Malpractice or Transactional Based Malpractice?

 Wasserman, “Holding Lawyers Accountable for Bad Settlements” NJ Law J. Jan 21, 2008)

Muhammad v. Straussburger, 526 Pa. 541 (1991) 

In re New York Diet Drug Litigation, 850 NYS2d 408 (2008)

Ziegelheim v. Appolo 128 N.J. 250 (1992)   

Grayson v. Wofsey, Rosen, Kweskin & Kuriansky 231 Conn. 168, 646 A. 2d 195 (1994)

Puder v. Buechel, 183 N.J. 428  (2005)

Guido v. Duane Morris, LLP  202 NJ 79 (2010)

The Problem of Aggregate Settlements

RPC 1.8(g)

Mass Tort Cases

_______________________________________________________________________

Class#11- Damages and other Remedies for Malpratice

Topics for Class Discussion: “Actual Damages”;Compensatory Damages; Consequential Damages;
Punitive Damages; Emotional Distress; Loss of Liberty; Attorney’s Fees and Expenses to Correct the Malpractice;  Fee Disgorgement

Readings:


 Saffer v. Willoughby, 143 N.J.256 (1996)

Merenda v. Superior Court, 3 Cal App 4th 1 (1992)

Gautam v. De Luca, 215 N.J. Super. 388 (App Div., 1987)

Kohn v. Schiappa, 281 N.J. Super 235 ( L. Div.,1995) 

Campagnola v. Mulholland, Minion & Rice 76 N.Y. 2d 38 (1990)

Strauss v. Fost, 213 N.J.Super 239 (App Div 1986)

Perl v. St. Paul Fire and Marine Ins. Co., 345 N.W.2d 209 (Minn 1984)

Wagenmann v. Adams, 829 F. 2d 196 (1st Cir., 1987)

Snyder v. Baumecker, 708 F. Supp. 1451 (DNJ, 1989).

Smith v. Lewis, 13 Cal. 3d 349 533 P. 2d 589 (Cal. Supt Ct. 1975) ovr'ld on other grounds, Re Marriage of Brown, 15 Cal. 3d 838, 544 P.2d 561 (Cal Sup. Ct. 1976)  (loss of opportunity damages)

Additional Reading

FJ: Chap. 6 (pp.181-203)

_____________________________________________________________________________
Class#12-  Defending Legal Malpractice Lawsuits

Topics For Class Discussion: Insurance Defense- The “triadic” relationshipVicarious Liability: The “art” of blaming others for your malpractice; Affirmative Defenses:  Statute of Limitations;Sharing the Risk: Indemnity and contribution; Judgmental Immunity; Prematurity;  Settlement of the Underlying matter; the Entire Controversy Doctrine; Collateral Estoppel; Mitigation; “The client made me do it”

Readings:

Statute of Limitations-Discovery Rule

NY: CPLR 214 (6)- 3 years whether in contract or tort-overruling Santulli v. Englert, Reilly, et ago, 78 NY 2d 700 (1992)

NJ: 

PA: 

Vastano v. Algier, 178 N.J. 230 (2003)

Covino v. Peck, 

Scope of Engagement

Lerner v. Laufer, 359 N.J. Super 201 (App. Div. 2003)

Prior Settlement

Contributory Negligence

Conklin v. Hannoch Weisman, 145 N.J. 395 (1996)

Caiati v. Kimel Funding Corp., 154 A.D. 2d 639 (2d Dept. 1989)

Judgmental and Strategic Decision Immunity

Charter Oak Fire Ins. Co. v. State Farm Ins. Co., 344 N.J.Super 401 (2001)

Attorneys Fee Award Negates Malpractice

NY: John Grace & Co., Inc. v. Turnstead, Schechter & Torre, 186 A.D.2d 15 (1st Dept 1992)

 

Additional Reading

FJ: Chaps. 8 (pp.255-287) then Ch. 7 (pp.205-252)

 ______________________________________________________________________________
Class#13- New Frontiers in Legal Malpractice

Topics for Class Discussion: The Tension between the Court and the Legislature controlling the practice of law.  Legislative Efforts to Limit the Rights of Victims of Lawyer
Malpractice.

Readings:

Wasserman, The Professional Services Business Enhancement Act: Myths and Realities (Dec. 2011)

Additional Reading: 

FJ: Chap. 9 (pp.289-349)

______________________________________________________________________________

Class#14- Preventing Malpractice and Protecting Yourself and Your Clients from it.

Topics For Class Discussion:
Principles of Risk Management; Professional Liability Insurance Alternate Dispute Resolution (Arbitration and Mediation)

Readings:

Wasserman, Mandatory Legal Malpractice Insurance: The Time has Come  (NJ Law J., Jan. 14, 2010)


Russo, The Consequences of Arbitrating a Legal Malpractice Claim, 35 Hofstra L. Rev. 327 (2006)

Additional Reading:

FJ: Chaps. 10 (pp. 369-401) and 11 (pp.403-420)

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Pollicino v. Roemer & Featherstonhaugh, 277 A.D.2d 666; 716 N.Y.S.2d 416 (3rd Dept. 2000)

NY Underlying Personal Injury Action; Notice of Claim vs. municipality

Student Contributor: Natalie Resto

Facts: Plaintiff retained defendant law firm to represent him in a personal injury action against the New York City Transit Authority when he lost sight in his eye after a bus ran over a glass bottle causing a shard of glass to strike him in the eye. The notice of claim that the law firm actually served incorrectly listed the date of the accident, which was also repeated in the summons and complaint. About a month later the law firm amended the pleadings correcting the accident date but it made no motion to similarly amend the notice of claim until some three years after service of the erroneous notice of claim. The Transit Authority cross-moved to dismiss the complaint on the ground that the plaintiff’s notice of claim was defective and the action should be dismissed. The lower court denied the law firm’s motion to amend the notice of claim on the ground that the 4 ½-year delay in seeking to amend the notice of claim was prejudicial to the Transit Authority.
The plaintiff then commenced this malpractice suit against the law firm. The lower court granted the defendant law firm’s motion for summary judgment on the ground that the underlying decision holding that the plaintiff’s negligence action would have been dismissed regardless of the alleged malpractice, was entitled to preclusive effect. The plaintiff appealed.

Issue: Does collateral estoppel preclude the malpractice action?

Ruling: Here the court found that the lower court’s comment that the plaintiff’s action would have been dismissed was not entitled to preclusive effect because it was dicta and not necessary to resolve the issue. The court found that the law firm’s failure to serve a proper notice of claim was the error that required dismissal, and that the complaint was dismissed on that ground.

Lesson: To invoke the doctrine of collateral estoppel it must be shown that there is an identity of issue that has necessarily been decided in the prior litigation and which is decisive of the present action, and that the party sought to be estopped had a full and fair opportunity to contest the decision that is now claimed to be controlling.

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Rudd v. Timm, 1995 WL 298950 (E.D. Pa. 1995).

Pa. underlying medical and legal malpractice

Student contributor: Cheryl Neuman

Facts: Plaintiff fell in a motel bathtub and sustained injuries. She visited various doctors over the next number of years and eventually developed a pseudomeningocele on her back. Doctor 1 stated that the medical condition was caused by Doctor 2’s injection. After hearing this information, plaintiff retained Law firm 1 to bring a medical malpractice claim against Doctor 2. Law firm 1 failed to identify any expert witnesses and Doctor 1 refused to testify as to the appropriate standard of care that Doctor 2 should have complied with. Law firm 1 eventually did get an expert report which stated that the medical condition was not necessarily caused by the injection and was therefore not negligence, but rather it was negligence for Doctor 3, plaintiff’s treating physician, not to have diagnosed the medical condition. The expert opinion further stated that it could have been caused by other surgeries as well. The lawsuit against Doctor 2 was therefore dismissed. Plaintiff then hired lawyer 2 to file a malpractice case against law firm 1. Lawyer 2, however, failed to answer the pleadings properly and then plaintiff filed a legal malpractice action against lawyer 2.

Issue: Should the claim against lawyer 2 be viable?

Ruling: Yes. The lawsuit is viable. In order for the plaintiff to recover against lawyer 2, she must establish  she would have prevailed in the underlying suit against law firm 1, assuming that law firm 1 conducted proper research and sued the proper parties.

Lesson: The plaintiff wasn't barred by the statute of limitations in this case because the underlying medical malpractice case was brought against the wrong doctor as a result of law firm 1’s negligence. Therefore, if the plaintiff could show that she would have prevailed against the appropriate doctor, then the malpractice case against the first lawyer and second lawyer is still available to the plaintiff. 

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Welcome to Hofstra Law School’s course on “Lawyer Malpractice”

This is the first installment of what will be an effort to make available to all law students  and lawyers the contents of the course materials which I use in teaching this course at Hofstra University  Law School. I have had the privilege and pleasure of teaching this course since 1990. In the process, I've learned a lot about this fascinating and relatively new  area of law. I've even gained a few insights into what it's all about. In addition to academics, I've also been professionally involved as an advocate and expert in over a thousand of these cases. Now, it's time to share whatever I may have learned in the process with a larger "classroom". Why?

The aim of this course is simple:  to teach law students and lawyers how NOT to practice law. Now with the technology of this blog, and the consequential morphing of the classroom into an online lecture hall with no borders or time limits,  my hope remains humble: to do something meaningful that will help make us all better lawyers, if for no other reason than  to help  restore the faith of too many disappointed clients in our legal and judicial system. Learning about how we commit malpractice and how to avoid it is not limited to a course in law school. Nor should it be left behind once new lawyers go out into the real world. That's why we've gone to the internet. It's here. Whenever you want and wherever you are. 

Legal malpractice lawsuits have proliferated in the past couple of decades to the point where it has been called “the tort of the new millennium.” That may well be why it makes sense to learn from the mistakes of others.  And that is what we plan to do here. We are going to be studying court decisions which read like short stories of what, why and how not to practice law. But we're going to learn more. For those litigators among us, we are going to learn how to prosecute legal malpractice actions where that's warranted and necessary and how to defend against legal malpractice actions that should not have been brought.

Actually, legal malpractice is a hybrid type of claim that mixes elements of contract law and tort law with an abundant serving of fiduciary duty law. It also throws in to the mix elements of consumer protection law and legal ethics. It has clearly become one of the prominent subdivisions of one of the newest areas of substantive law called “the law governing lawyers”.

Different states have developed their own unique approach to lawyer malpractice. Some states might be characterized as pro-lawyer others pro-client. Still others seem pro-plaintiff (whether one is a client or some third party  who is outside of the traditional client-lawyer relationship) or pro- defense. Liability insurance is an important driving force in legal malpractice litigation. But the insurance industry is, and should be, essential in helping lawyers learn which professional standards are acceptable and which are not.

There is much debate about many topics in the area of lawyer malpractice. But one thing on which most agree is defining the constituent elements of a legal malpractice claim. In general, here are the elements of the cause of action:

1. An attorney–client relationship (or some other relationship wherein a non-client relies on an attorney and the attorney is aware of that reliance);
2. The relationship gives rise to a duty of care on the part of the attorney which the attorney fails to comply with;
3. That breach of duty is the proximate cause of
4. Actual damages suffered by the plaintiff.

Short of these 4 constituent elements of the cause of action for legal malpractice, the debate rages:

What is an attorney-client relationship? What is the scope of the relationship? Who is entitled to rely on an attorney even though they are outside of the relationship? How to define the duty? Does the duty fall within the scope of the relationship? Can a duty that is provided in, say, the Rules of Professional Conduct be enforced in the setting of a legal malpractice law suit? Does the contract statute of limitations apply or the tort statute? Is the fiduciary duty statute of limitations any different? Does that apply in all legal malpractice cases? How do we define proximate cause? Is it “but for” or is it “substantial factors” or something else”? How do you prove or disprove proximate cause? What’s a “case within a case” anyway”? How do you prove what would have happened in the case out of which the legal malpractice arises? How do you prove what would have happened in a non-litigation (transactional) matter if the lawyer wasn’t professionally negligent?

And these are just some of the questions, for starters. So, where to start is the question. If you choose to read only one case throughout this entire course, here’s where you should begin: Probably one of the oldest and one of the few legal malpractice cases decided by the United States Supreme Court.

Savings Bank v. Ward, 100 US 195  (1880). 

Student feed back is important. That's why we have the ability to post comments to this lesson. Please feel free to do so. In that way, we can have discussions on what I hope will be helpful to you. 

Welcome aboard!

Prof. W.

PS If you prefer not to post publicly, feel free to contact us. There's a "Contact Us" box for your convenience, on the margin to your left. 

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Estate of Nevelson v. Carro, Spanbock, Kaster et al. 259 A.D.2d 282; 686 N.Y.S.2d 404 (1st Dept.1999)

NY Underlying Estate Tax Matter

Student Contributor: Natalie Resto 

Facts: Plaintiff corporation was created upon the advice of defendant law firm for the purpose of organizing the financial affairs of Louise Nevelson, a deceased sculptor, and in an attempt to cause her artwork and the income from it to pass outside of her taxable estate. Nevelson’s son, who was also the executor of her estate, owned the corporation. This malpractice action arose after the IRS assessed millions of dollars in estate taxes against Nevelson’s estate and gift taxes against her son. After Nevelson’s death, the IRS determined that the corporation was a sham used to gift the decedent’s income and assets to her son, and that all the assets of the corporation should have been included in the sculptor’s gross estate. The plaintiffs claimed that the law firm never advised them of any risks of potential gift or estate tax liability that could arise based on the level of compensation that the corporation paid Nevelson.

Issue: Did the law firm depart from the requisite standard of care when they failed to adequately advise the plaintiffs that their failure to substantially compensate the decedent could result in adverse tax consequences under the plan that they recommended?

Ruling: Yes. The court found that here the defendants offered only conclusory, self-serving statements with no expert or other evidence that would establish that they did not depart from the requisite standard of care. The defendants had an obligation to do so. 

Lesson: The requirement that a plaintiff come forward with expert evidence on the professional’s duty of care may be dispensed with where ordinary experience of the fact finder provides sufficient basis for judging the adequacy of the professional service. Id. at 283; Kulak v. Nationwide Mut. Ins. Co., 40 NY2d 140, 148.

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Black v. White, Court of Appeals of California, Second District, Division Four, April 27, 2010

Facts:  Plaintiff filed this malpractice action against his criminal attorney after his conviction for first degree burglary was affirmed.  The trial court sustained the attorney's demurrer to Plaintiff's complaint on the basis that actual innocence is a prerequisite to filing a malpractice action in California.  Plaintiff appealed and argued that his petition for writ of habeas corpus had not yet been decided.  Accordingly, he alleged that the trial court was required to stay the action pending resolution of the underlying matter. 

Issue:  In the event plaintiff pursues a malpractice action in California prior to obtaining the necessary postconviction relief, should the court stay the action or dismiss it for failure to establish one of the necessary "elements" of a legal malpractice action? 

Ruling:  The action ought to be stayed until the underlying matter is resolved.  In California, actual innocence is a necessary element of plaintiff's malpractice action: 

[P]ermitting a convicted criminal to pursue a legal malpractice claim without requiring proof of innocence would allow the criminal to profit by his own fraud, or to take advantage of his own wrong, or to found [a] claim upon his iniquity, or to acquire property by his own crime. As such, it is against public policy for the suit to continue in that it would indeed shock the public conscience, engender disrespect for courts and generally discredit the administration of justice.

The Court further discussed that this policy promoted judicial economy, since issues litigated to obtain postconviction relief, including ineffective assistance of counsel, would be duplicated in a malpractice action.

This requirement of exoneration, however, poses a statute of limitations dilemma for the criminal defendant.  In California, a legal malpractice action must be filed within one year of the client's discovery of the malpractice, or four years from the date of actionable malpractice, but in no event can the time to commence the action exceed four years.  In matters involving postconviction proceedings, however, the statute of limitations would run long before the individual established his "actual innocence". 

Accordingly, the Court applied the "two-track approach":  Although plaintiff must file the malpractice action within the applicable limitations period, the court should stay the action during the period in which plaintiff "timely and diligently" pursues postconviction remedies.

Lesson:  A criminal defendant may pursue his action for legal malpractice within the statute of limitations.  In the event he is not able to establish "actual innocence" because the criminal matter is not yet concluded, the malpractice action will be stayed pending a decision in the underlying action.

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Harris v. Farmer, Court of Appeals of Michigan, February 4, 2010

Facts:  Defendant served as Plaintiff's court-appointed attorney in a criminal proceeding in which plaintiff was charged with identity theft.  The prosecution alleged that plaintiff attempted to use another individuals social security number to obtain employment.  Plaintiff was convicted and his claim for ineffective assistance of counsel was rejected. 

Plaintiff subsequently filed an action for legal malpractice against his court-appointed attorney, alleging that he had failed to properly cross-examine a witness, failed to object to evidence offered by the prosecution, and failed to present necessary evidence.  The attorney moved for summary judgment, and the lower court granted his motion.  Plaintiff appealed.

Issue:  Are counsel's alleged shortcomings at trial actionable as professional negligence? 

Ruling:  No. 

Although an attorney has the duty to fashion a strategy so that it is consistent with prevailing Michigan law, he does not have a duty to ensure or guarantee the most favorable outcome possible

***

[M]ere errors in judgment by a lawyer are generally not grounds for a malpractice action where the attorney acts in good faith and exercises reasonable care, skill, and diligence.

The Court further noted that even if the attorney had done everything Plaintiff complained he did not do, the result of the proceeding would not have been different.  Accordingly, the Court affirmed the dismissal of the malpractice action.

Lesson:  Decisions involving trial tactics or litigation strategy are not subject to attack in an action for legal malpractice pursuant to Michigan law.  This is especially so where counsel's professional judgment was not the cause in fact of his former client's alleged injuries. 

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Keller v. Loews Corp., 895 NYS 2d 376 (2nd Dept. 2010)

Facts:  In house counsel sued for religious discrimination after the termination of his employment.  The defendant counterclaimed for breach of fiduciary duty.  More specifically, the defendant alleged that counsel disclosed confidential information in his discrimination complaint.  The trial court dismissed the counterclaim on the ground that there is no fiduciary relationship between an employer and an at-will employee.

Issue:  Does in house counsel owe any fiduciary upon the termination of his at-will employment? 

Ruling:  Yes.

[A] lawyer, as one in a confidential relationship and as any fiduciary, is charged with a high degree of undivided loyalty to his client.  Indeed, the duty to preserve client confidences and secrets continues even after representation ends.  Thus, we conclude that an in-house attorney, his status as an at-will employee notwithstanding, owes his employer client a fiduciary duty.

Lesson:  In house counsel owes his client a fiduciary duty irrespective of his status as an "at-will employee".  The fiduciary duty continues even after termination of counsel's employment.

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Liberty Associates v. Etkin, 2010 NY Slip Op 225 (2nd Dept. Jan. 10, 2010)

Facts:  In March, 2002, the plaintiff, Liberty Associates, commenced an action to recover damages for legal malpractice against their former attorney. In January, 2003, the attorney's firm commenced an action against Liberty Associates in the Superior Court of New Jersey to recover fees for the legal services rendered. In 2004, during the pendency of the malpractice action, Liberty Associates and the attorney's firm settled the New Jersey fee dispute action, which was dismissed with prejudice. Upon learning of the settlement, the attorney moved for summary judgment dismissing the complaint in the malpractice action. The Supreme Court granted the attorney's motion.

Issue: Was Liberty Associates' pending malpractice claim against its former attorney barred by the doctrine of res judicata because of the dismissal of a separate action by the former attorney's firm to collect attorney's fees?

Ruling:  Yes.  

[T]he plaintiff's claim is barred by the doctrine of res judicata, which "precludes a party from litigating a claim where a judgment on the merits exists from a prior action between the same parties involving the same subject matter. A valid final judgment bars future actions between the same parties on the same cause of action, which includes "all other claims arising out of the same transaction or series of transactions . . . even if based upon different theories or if seeking a different remedy."

The Court further noted that a stipulation of discontinuance with prejudice without reservation of right or limitation of the claims disposed of is entitled to preclusive effect under the doctrine of res judicata.

Lesson:  Dismissal of one action involving the underlying matter, without an adequate reservation of rights, will preclude the client from pursing malpractice claims as to the same matter in a separately filed action. 

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Alaimo v. McGeorge, 893 N.Y.S.2d 331 (3rd Dept. 2010)

Underlying Personal Injury Action

Facts:  Plaintiffs initiated a pro-se personal injury action in 1999.  In May, 2004, Plaintiffs retained the defendant attorneys to prosecute their claims.  Approximately one month later, Plaintiffs' action was struck for failure to present a medical expert.  Plaintiffs were given one year to restore the case, but failed to timely comply.  Defendants subsequently refunded the retainer and terminated representation. 

Shortly thereafter, Plaintiffs moved to restore their complaint pro-se.  The Supreme Court denied the motion and dismissed the case with prejudice for failure to present a reasonable excuse for not refiling the personal injury action within the one year time limit.  The Court further noted that the reports from Plaintiffs' medical providers with the motion to reinstate "failed to establish any causal connection between any allegedly improper conduct [and the injuries complained of]."

Plaintiffs subsequently sued the defendant attorneys for legal malpractice.

Issue:  Is Plaintiffs' legal malpractice action barred by the doctrine of collateral estoppel, since the Court had already made a determination as to the Plaintiffs' inability to succeed in the underlying personal injury matter?  Did Plaintiffs state a cause of action for legal malpractice in light of the Supreme Court's finding that they failed to establish proximate cause?

Ruling:  Plaintiffs stated a cause of action for legal malpractice and the doctrine of collateral estoppel did not apply. 

The Appellate Division explained the elements of collateral estoppel:

• An identical issue decided in the prior action that is decisive of the instant action; and
• The party to be precluded from relitigating the issue had a full and fair opportunity to contest the prior determination.

The Court ruled that collateral estoppel did not apply, since Plaintiffs' motion to reinstate the case required a showing of merit sufficient to establish a triable issue of fact, and that in that setting conclusory allegations are insufficient.  In contrast, on defendants' motion to dismiss, even conclusory allegations with respect to the medical evidence are deemed to be true.  Accordingly, defendants failed to establish that the showing of proximate cause as to Plaintiffs' alleged injuries was identical in the underlying action and the malpractice action.

Similarly, although the medical evidence may not have been sufficient for purposes of the motion to reinstate the underlying matter, it was entitled to the benefit of every reasonable inference on a motion to dismiss for failure to state a claim.   

Lesson:  Where the plaintiff's burden of proof is heavier in the underlying action than in a preliminary motion in the malpractice action, plaintiff's claims will not be barred based upon its failure to meet a heavier burden in the underlying matter.  

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Mamorella v. Derkasch, 716 N.Y.S.2d 211(2000).

NY: Underlying employment law

Student Contributor: Jason Zemsky

Facts: Plaintiff Mamorella was appointed to a three-year probationary appointment as principal of the Auburn West Middle School. One year into her employment the Superintendent of Schools sent plaintiff a letter notifying her of his intention to terminate her probationary appointment. Plaintiff contacted Empire State Supervisors and Administrators Association (ESSAA), an association of local bargaining units of public school administrators and supervisors across the State, which represents the bargaining unit to which plaintiff belonged to represent her. Derkasch was assigned to her case and filed a grievance against the school, which was denied. The plaintiff commenced the instant action against Derkasch for legal malpractice and against ESSAA for the negligence of Derkasch under the doctrine of respondeat superior, based upon the alleged status of Derkasch as an employee of ESSAA. The court dismissed the plaintiff’s claims finding that Derkasch was an independent contractor and that ESSAA cannot be held liable for negligent acts of an independent contractor. The plaintiff appealed.

Issue: Can an attorney who performs services on behalf of a union be held liable to individual members of the union where the services at issue constitute a part of the collective bargaining process?

Ruling: No. the plaintiff's legal malpractice claim is preempted by Federal labor law, and that attorneys who perform services for and on behalf of a union may not be held liable for malpractice to individuals where the services performed constitute part of the collective bargaining process.

Lesson: An attorney who is handling a labor grievance on behalf of a union as part of the collective bargaining process has not entered into an ‘attorney-client’ relationship in the ordinary sense with the particular union member who is asserting the underlying grievance.
 

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Kohler v. Hawkins, 15 Ill.App.3d 455, 304 N.E.2d 677(App. Ct. 1973)

IL. underlying tort action

Student contributor: Cheryl Neuman

Facts: Two men were killed a car accident. Their estates hired defendant attorney in an action against the driver of the car in which the two men were killed. The defendants filed demands for arbitration and the arbitration hearings were held and damages were awarded. The award was subsequently vacated because the demand for arbitration was not filed within two years of the death of the decedents as required by the Injuries Act (Ill.Rev.Stat. 1965, ch. 70, pars. 1 and 2.). After the denial of a petition for leave to appeal, the defendants told the administrators of the estates that there would not be any recovery. The administrators then filed a complaint against the defendants alleging that the defendants were negligent and carelessly filed the demand for arbitration after the two year statutory allowance, thereby causing the administrators and heirs of the decedents the lost value of the arbitrator’s award. The defendants contend, however, that the statute of limitations has run and the plaintiffs can no longer sue them for a legal malpractice action.

Issue: Whether the statute of limitations for legal malpractice commences at the time of the negligent act or when the client discovers or should discover the facts establishing the elements of his cause of action?

Ruling: The cause of action for legal malpractice does not accrue until the client discovers or should have discovered the facts establishing the elements of his cause of action. Therefore, the complaint for legal malpractice was timely filed in this case. The statute of limitations did not begin to run until the administrators of the estates were advised by the defendant that they wouldn’t be able to recover in the underlying suit. Complaints filed within 5 years from that date were considered proper and timely filed.

Lesson: It is unrealistic and unfair to bar a negligently injured party’s cause of action before he had an opportunity to discover that it exists. The court reasoned that a client may not realize the negligence of an attorney when it occurs and to require a professional to check the work of the attorney would be impractical and would destroy the confidential relationship between attorney and client.
 

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Mentzer & Rhey, Inc. v. Ferrari, 367 Pa. Super. 123 (Pa. Super. Ct. 1987)

PA. Underlying Real Estate Transaction

Student Contributor: Melissa Goldberg

Facts: Bruno Ferrari, the original Defendant, sold a parcel of land located in Westmoreland County to Mentzer and Rhey, Inc., the Plaintiff. A portion of the land located on Mentzer & Rhey's used car lot collapsed, creating a dangerous hole. Mentzer & Rhey filed an action for damages alleging the cause of the collapse to be a defective culvert constructed by Ferrari and fraudulently concealed by him during the sales transaction. Ferrari filed a complaint to join Fisher, Long and Rigone, the law firm representing Mentzer & Rhey in the property sale. The complaint alleged that Mentzer & Rhey's lack of knowledge of the existence of the culvert was due to the attorneys' negligence in performing the title search and that therefore the proposed third-party attorneys should be solely liable to Mentzer & Rhey for damages or in the alternative should be jointly liable with original Defendant.

Issue: Were the attorneys who performed a title search for buyers of property properly joined as third-party Defendants under Pa.R.C.P. 2252(a) where the buyers sue the seller for damages resulting from an allegedly fraudulently concealed and defective culvert and the attorneys failed to discover the existence of the culvert in their title search?

Result: A party must show an attorney-client relationship or a specific undertaking by the attorney furnishing professional services as a necessary prerequisite for maintaining a suit.
• Ferrari is not in privity with Plaintiff's attorneys, he has no cause of action against them and thus may not, under Pa.R.C.P. 2252(a), join the attorneys as third-party Defendants

Lesson: The general rule in Pennsylvania is that an attorney will be held liable for negligence only to his client. In the absence of special circumstances, he will not be held liable to anyone else.

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McHugh v. Litvin, Blumberg, Matusow & Young, 525 Pa. 1, 574 A.2d 1040 (Pa. 1990)

PA Underlying Representation: Personal Injury

Student Contributor: John Anzalone

Facts: Plaintiffs retained Attorney 1 to sue Plaintiff Husband's employer for injuries suffered while working. Attorney 1 later referred Plaintiffs' case to Defendant Attorneys. Defendant Attorneys also were retained by Plaintiff Wife in her action for loss of consortium. The suits were dismissed for improper service. Plaintiffs brought a malpractice suit.

Issue: Was the Plaintiffs' malpractice suit for the loss of the wife's consortium action prohibited because the cause of action only applied to the loss of a wife's consortium when Plaintiff Husband was injured?

Ruling: In reversing the lower court's dismissal of the lost consortium claim, the court held that the wife's consortium claim was valid, based on the following considerations:
1) In Pennsylvania, court decisions changing the law are to be applied retroactively unless the court holds that it's not to be applied retroactively.
2) Since the Plaintiffs had already filed an action when the law was changed, Plaintiffs were entitled to rely on the change of the law.
3) Since the Plaintiffs' claims were pending when the change of law happened, they could rely on the new law.
4) Defendants additionally filed for the loss of consortium claim for the Plaintiffs after the change in the law. The court inferred from this that Defendants believed that the change was applicable to the Plaintiffs. The court held that after filing the claim, the Defendants can not claim that they had no duty to not file it negligently.

Lesson: Attorneys  are responsible for complying with changes in the law that effect the standards of care that occur while cases they are representing clients in are pending. Attorneys especially can not claim that they did not believe that the change in law applied to a case they were representing a client when they made a claim based on that change of law.

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Storm v. Golden, 371 Pa. Super. 368, 538 A.2d 61 (1988)

Student Contributor: Christopher Henn

PA Underlying real estate transaction

Facts: Storm (the Client) retained Golden (attorney) in connection with the sale of her residence after an agreement was reached with a buyer. From the record, it appears that the client had “irrational trust in [a third party that] was founded in Christian faith and fueled by his representation of faith and Biblical interest” and “she couldn’t think for herself.” At the closing, a check for the proceeds was made to the order of the client and that third party. Thereupon the client endorsed the check to the third party and delivered it to him. He has not been seen or heard from since receiving the nearly $25,000 check. After suing the attorney for alleged malpractice, the trial court dismissed the suit at the end of client’s case for a failure to present expert testimony.

Issue: A question of first impression at the time, the court considered whether expert testimony was required to establish an attorney’s breach of his duty of care.

Ruling: The Superior Court held that;
“As a general rule, our Supreme Court has held that “expert testimony is necessary to establish negligent practice in any profession.” Id. at 375 citing Powell v. Risser, 375 Pa. 60, 65, 99 A.2d 454, 456 (1953);
And that “[b]y its very nature, the specific standard of care attributed to legal practioners necessitates an expert witness' explanation where a jury sits as the fact finder.” Id. at 375-76.
Finally, “[w]hether an attorney failed to exercise a reasonable degree of care and skill related to common professional practice in handling a real estate transaction is a question of fact outside the normal range of the ordinary experience of laypersons.” Id. at 377.

Lesson: This case is the beginning in a long line of decisions in Pennsylvania that recognizes the importance of expert testimony in legal malpractice cases. While the court noted there would be many times in which layperson jurors can decide for themselves, at least in a real-estate transaction such is not the case.

The State Supreme Court denied an appeal. 524 Pa. 630, 574 A.2d 71 (Pa. Nov 03, 1989).

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Wagner v. Orie & Zivic, 431 Pa. Super. 337 (Pa. Super. Ct. 1994)

PA Underlying Tort action

Student Contributor: Melissa Goldberg

Facts: Plaintiff suffered physical injuries resulting from a work-related accident. Plaintiff retained Defendant for the purpose of representing him in a personal injury action against the manufacturer, distributor, and/or shipper of the product alleged to cause the injury. Defendant never filed the complaint and the statute of limitations expired. A jury found for the Plaintiff in the legal malpractice suit. The Plaintiff requested that the trial court mold the verdict to award damages for delay pursuant to Rule 238 of the Pennsylvania Rules of Civil Procedure.

Issue: Whether Rule 238 of the Pennsylvania Rules of Civil Procedure provide for delay damages to be awarded in a legal malpractice action where the underlying claim resulted from improper handling of a personal injury claim.

Result: Rule 238 provides for an award of damages "in an action seeking monetary relief for bodily injury, death or property damage . . . ."
1) While the underlying cases which precipitated the instant action were both personal injury cases, the instant case was an action for legal malpractice.
2) The rule is explicitly limited by its own language, and it is not applicable to a legal malpractice action. "

Lesson: Rule 238 of the Pennsylvania Rules of Civil Procedure, in determining whether delay damages are available, will only look at the case at bar, and not the underlying action. Thus, it does not extend to Legal Malpractice cases. 

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Proskauer Rose Goetz & Mendelsohn LLP v. Munao, 270 A.D.2d 150 (N.Y. App. Div. 1st Dep't 2000)

NY Underlying business transaction

Student Contributor: Melissa Goldberg

Facts: In April 1991, Plaintiff allegedly gave Defendants negligent advice that they could shelter income through a certain joint venture. Plaintiff filed a summons with notice in October 1996, and served a complaint in December 1996, to which Defendants responded, in January 1997, with an answer containing counterclaims alleging the negligent advice. October 8, 1996 therefore marks the timeliness of the claims.

Issue: Which Statute of Limitations applied to this cause of action?

Result: Claims subject to six-year statute of limitations. The newly enacted three years statute does not bar it.

“While amended CPLR 214 (6), which reduced what would have been a six-year Statute of Limitations in this case to three years, applies to claims, such as these, interposed after its effective date of September 4, 1996, due process requires that such claims be entertained if brought within a reasonable time after September 4, 1996--clearly the case here, where the claims were presumably interposed only one month, and actually interposed only four months, after September 4, 1996.” 

Lesson: The Statute of Limitations in New York is now three years. 

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 Oster v. Kirschner, et al 2010 NY Slip Op. 05981 (App Div, 1st Dept. 7-6-2010)

NY: Underlying Private  investment

FACTS: A NJ law firm, Lum, Danzis, Drasco & Positan,LLC lost its bid to stay out of a NY law suit brought by investors in a private investment  plan named Cobalt,  which turned out to be a Ponzi scheme  operated by a convicted felon with the help of an admitted criminal with numerous convictions for securities violations and  who was banned from the securities industry.  Investors lost over $22 million. As Cobalt's attorneys,  the law firm is accused of preparing the private placement memorandum  (PPM) which failed to disclose the criminal histories  of the investment's managers, although the Firm's attorneys were aware of it.  Also, the PPM allegedly contained other affirmative misrepresentations to which plaintiffs pointed in their "aiding and abetting" , fraud and breach of fiduciary duty Complaint. The Law Firm also served as the  escrow agent for the investment transactions. The Law Firm "did not seriously dispute that they had knowledge of [their clients'] criminal backgrounds." It just claimed that knowledge and the knowledge of misrepresentations in the PPMs--"the admitted vehicle by which investment in the Ponzi scheme was carried out--does not sufficiently allege actual knowledge..."

ISSUE: Does the Complaint adequately plead fraud, or should the trial court's dismissal of the Complaint be reversed?

HELD: Order dismissing Complaint reversed. Complaint re-instsated.

1. A plaintiff alleging an aiding and abetting fraud claim must allege the existence of he underlying fraud, actual knowledge and substantial assistance.  Actual knowledge of fraud can be "discerned from surrounding circumstances."

2. The Law Firm's preparation of the PPM, including, significantly, a backdated amendment to it that showed the investment managers criminal past which it had not previously disclosed, constitutes "substantial assistance."

The PPMs authored by defendant attorneys were the means by which the Cobalt...entities were able to solicit funds for ...[the] Ponzi scheme. The PPM is the very mechanism by which investments such as Cobalt are placed in the marketplace, and the admitted "but for" cause of plaintiff's investment losses. Yet defendants assert that "loss causation" is lacking because it has not been adequately pleaded that defendant attorneys had actual knowledge that their clients--whom they admittedly knew to be criminals, banned from the securities industry for engaging in fraudulent investment schemes--would operate...Cobalt...as a Ponzi scheme. If the facts and circumstances herein do not support an inference of actual knowledge, then it is doubtful that any action for aiding-and-abetting fraud could be sustained against any attorney, who, like defendant attorneys, consciously chose to look the other way when their clients asked them to prepare the PPM...To say that defendant attorneys merely furnished legal services to help solicit investments in...Cobalt..., and did not have knowledge of the fraud they helped perpetrate...[is] simply not tenable. The Court cannot and will not endorse what is essentially a "see no evil, hear no evil" approach. 

LESSON:  Is the NY Court expanding the duty of vigilance of the lawyer regarding disclosure of information that non-clients should be entitled to know?  Will there be an appeal from this ruling? Let's wait and see. 

For an interesting NJ case involving a different NJ law firm also involved in composing a "defective" PPM, see Profit Sharing Trust v. Lampf Lipkind, 630 A.2d 1191 (1993).

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Rizzo v. Haines, 520 Pa. 484, 555 A.2d 58 (Pa. 1989)

PA Underlying Personal Injury and Medical Malpractice

Student Contributor: John Anzalone

Facts: Plaintiff retained Defendant Attorney to represent him in a personal injury case against Philadelphia and in a related medical malpractice case. Settlement offers were made by Philadelphia and were not conveyed to Plaintiff before Defendant rejected them. Later, at defendant's suggestion, Plaintiff settled the personal injury case, believing the medical malpractice case was viable since Defendant claimed that it was. A fee dispute then took place between Defendant and Plaintiff's prior attorney, in which the attorneys' claims for 50,000 dollars in an escrow account were rejected by the court which ordered that the funds be returned to Plaintiff. However, Defendant was later able procure them from Plaintiff as a "gift." The medical malpractice case was subsequently dismissed on summary judgment. Plaintiff then sued for legal malpractice alleging negligence and a breach of the attorney's fiduciary duty. The lower court held for Plaintiff.

Issue: Was an expert witness's testimony regarding the breach of the standard of care required?

Ruling: In affirming the lower courts ruling, the Pennsylvania Supreme Court held an expert witness's testimony regarding the breach of the standard of care was not required, based on the following considerations:
1) Attorneys commit malpractice if they fail to use "ordinary skill and knowledge" in settlement negotiations and that failure damages their client.
2) Defendant had a duty to investigate the settlement offers made and to convey them to his client. His failure to do so breached his duty to the client. This breach was accompanied by harm, so malpractice occurred.
3) The court held that this breach of duty does not require an expert witness's testimony. The average person would know that failing to investigate a settlement offer is a breach of the attorney's duties.
4) Expert testimony was also not needed about the breach of fiduciary duty because the Code of Professional Responsibility establishes these duties and prohibits an attorney from suggesting that the client make a gift to the lawyer. (Code of Professional Responsibility EC 5-5).

Lesson: Expert testimony is not required in Pennsylvania when the breach would be obvious to an average person or when the rules governing professional conduct in the state have been violated. 

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Torgro Limousine Service, Inc v. 76 Carriage Co., Inc., Superior Court of New Jersey, Appellate Division, May 25, 2010

Facts:  The defendant filed suit against the plaintiff in Pennsylvania for breach of contract.  Defendant obtained a default judgment and docketed the judgment in New Jersey.  Plaintiff then unsuccessfully attempted to reopen the default judgment in Pennsylvania.  Plaintiff's counsel then unsuccessfully pursued a suit in New Jersey for breach of contract and defendant moved to dismiss on the basis of res judicata. 

Notwithstanding the dismissal, Plaintiff's counsel filed another complaint for breach of the same contract, breach of the covenant of good faith and fair dealing, and consumer fraud.  Defendant responded with a "Notice & Demand" pursuant to New Jersey Court Rule 1:4-8.  Torgro's counsel. however, failed to withdraw the allegedly frivolous complaint in the time prescribed by Rule 1:4-8.  76 Carriage, in turn, filed a motion to dismiss, followed by a motion for sanctions under Rule 1:4-8.  The trial court awarded sanctions against Torgro's attorney in the amount of $6,500.

Issue:  Did counsel's behavior constitute a violation of Rule 1:4-8?

Ruling:  Perhaps. 

An award of sanctions under the rule is dependent upon a finding that the attorney filed the offending pleading in bad faith...Further, we have explained that the concept of bad faith in relation to an application for sanctions under Rule 1:4-8 means that the harm was inflicted intentionally and without justification for excuse...In addition, we have stressed the necessity of a trial court making detailed factual findings when it determines that an award under Rule 1:4-8 is appropriate.

The Appellate Division remanded the case to the trial court, since the court had failed to make a finding that counsel acted in bad faith when the second action was filed.  More specifically, the trial court needed to make a determination as to whether counsel's actions were motivated by an "improper purpose" and whether counsel "knew, or should have known, that the complaint's factual allegations lacked any evidentiary support".  Furthermore, the trial court must explain how the amount of sanctions imposed on counsel were necessary "to deter repetition". 

Lesson:  An award of sanctions under New Jersey Court Rule 1:4-8 must be accompanied by a finding of bad faith on the part of counsel and that the amount of the award was tailored to avoid such conduct in the future.

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Hofstra Law School: Lawyer Malpractice Class #2.

I.   What does it take to form a client-lawyer relationship?

Restatement of the Law Governing Lawyers (ALI 2000) (hereafter RLGL)

§ 14. Formation of a Client-Lawyer Relationship
A relationship of client and lawyer arises when:
(1) a person manifests to a lawyer the person’s intent that the lawyer provide legal services for the person; and either
a. the lawyer manifests to the person consent to do so; or
b. the lawyer fails to manifest lack of consent to do so, and the lawyer knows or reasonably should know that the person reasonably relies on the lawyer to provide the services;
(2) a tribunal with power to do so appoints the lawyer to provide the services.

It really takes very little to start a Client-Lawyer Relationship. That may be good in terms of getting clients.  But it can be very risky in terms of incurring liability for malpractice to the client.  Ultimately,  the question to ask is: Who is my client?  

One party's unilateral beliefs and actions , standing alone, does not necessarily confer upon him or her the status of client. 

Moran v. Hurst, 32 AD3d 909, 822 NY2d 564

Solondz v. Barash, 225 AD2d 996, 639 NYS2d 410

Read Pam Bresnahan's article from the American Bar Association Journal about how little it takes.

Then, read each of the following cases:

In re Palmieri, 76 N.J. 51 (1978)

Procanik v. Cillo, 226 N.J. Super 132 (1988)

Togstad v. Vesely, Otto, Miller et al, 291 N.W. 2d 686 (1980)

Jordan v. Lipsig Sullivan, et al 689 F. Supp. 192 (DNY 1988)

How to you document the start of the Client-Lawyer Relationship ?

Rules of Professional Conduct (hereafter RPC)

RPC 1.5 Fees
(b) When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated in writing to the client before or within a reasonable time after commencing the representation.

The New York Rule:

22 NYCRR §1215.1
(a)…an attorney who underakes to represent a client and enters into an arrangement for, charges or collects any fee from a client shall provide to the client a written letter of engagement before commencing the representation, or within a reasonable time thereafter (i) if otherwise impracticable or (ii) if the scope of services to be provided cannot be determined at the time of the commencement of representation. For purposes of this rule, where an entity (such as an insurance carrier) engages an attorney to represent a third party, the term “client” shall mean the entity that engages the attorney. Where there is a significant change in the scope of services or the fees to be charged, an updated letter of engagement shall be provided to the client.

(b) the letter of engagement shall address the following matters:
(1) Explanation of the scope of the legal service to be provided;
(2) Explanation of attorney’s fees to be charged, expenses and billing practices; and, where applicable, shall provide that the client may have a right to arbitrate fee disputes…

(c ) Instead of providing the client with a written letter of engagement, an attorney may comply with the provisions of subdivision (a) by entering into a signed written retain agreement with the client before or within a reasonable time after commencing the representation, provided the agreement addresses the matters set forth in subdivision (b).

§ 1215.2 Exceptions
This section shall not apply to (1) representation of a client where the fee to be charged is expected to be less than $3000, (2) representation where the attorney’s services are of the same general kind as previously rendered to and paid for by the client, or (3) representation in domestic relations matters…, or (4) representation where the attorney is admitted to practice in another jurisdiction and maintains no office in the State of New Yoir, or where no material portion of the services are to be rendered in New York.

CAVEAT: Failure to have a written engagement letter or agreement does not prevent a client-lawyer relationship from coming in to existence. But it can certainly have a negative impact if the client refuses to pay you for any reason and you have to sue the client to pay you (not a good idea in any event, which we'll discuss, soon enough.)

The existence of a client-lawyer relationship does not depend on a formal retainer or the payment of a fee. 

Moran v. Hurst, 32 AD3d 909, 822 NYS2d 564

Tropp v. Lumer, 2005 NY Slip Op. 872 (App. Div.)

Jane Street Co. v. Rosenberg & Estis, PC, 192 AD2d 451, 587 NYS 2d 17. 

 II.   What does it take to define or limit the scope of the client-lawyer relationship?

RLGL § 19. Agreement Limiting Client or Lawyer Duties

(1) Subject to other requirements stated in this Restatement, a client and lawyer may agree to limit a duty that a lawyer would otherwise owe to the client if:

(a) the client is adequately informed and consents; and 

(b) the terms of the limitation are reasonable in the circumstances. 

(2) A lawyer may agree to waive a client's duty to pay or other duty owed to the lawyer. 

                                                          * * *

RPC 1.2 (c) A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent. 

How broad is the scope of the client-lawyer relationship? These next linked cases will give you some insight into  how to narrow the  scope of the relationship and whether that can save  save you from liability for professional mistakes outside the scope of the relationship. 

Campbell v. Fine Olin, 168 Misc. 2d 305 (NY 1996)

Greenwich v. Markhoff, 650 N.Y.S.2d 704 (App Div. 1996)

Lerner v. Laufer, 359 N.J. Super. 201, 819 A.2d 471 (App Div. 2003)

Estate of Albanese v. Lolio, 393 NJ Super 355 (App Div. 2007)

III.   What does it take to End the Client-Lawyer Relationship?

RLGL § 31. Termination of a Lawyer's Authority

RLGL § 32. Discharge by a Client and Withdrawal by a Lawyer

RLGL § 33. A Lawyer's Duties When a Representation Terminates

RPC  1.16  Declining or Terminating Representation

Gilles v. Wiley, Malehorn & Sirota, 345 N.J. Super 119 (App Div. 2001)

Disengagement Letters

Suggested Readings: Fortney & Johnson, Legal Malpractice Law, Ch. 3 pages 35-50.  

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Primis Corp. v. Milledge, Court of Appeals of Texas, Fourteenth District, Houston, May 27, 2010

Facts:  Defendants agreed to represent the plaintiffs in a certain lawsuit and plaintiffs paid the defendants a $5,000 retainer.  Plaintiffs contend the retainer was a "general retainer", while Defendants contend the retainer was specifically for the work to be performed on the particular lawsuit. 

Several weeks after plaintiffs paid the retainer, they were served with another suit wherein plaintiff sought confirmation of an arbitration award rendered against Primis Corporation.  Plaintiffs delivered the citation to the Milledge law office when no attorneys were present.  Soon thereafter, Samuel Milledge sent plaintiffs a letter noting the deadline to file an answer and requesting a retainer.  Plaintiffs never furnished the retainer and, eventually, a default judgment was entered. 

Primis then filed suit against Milledge asserting claims for negligence, breach of contract, and violations of the Texas Deceptive Practices Act.  The trial court found that Milledge owed Primis a duty to clearly and unambiguously advise Primis that Milledge would not be filing an answer for Primis.  Although the court noted that Milledge failed to give advice when legally obligated to do so and delayed handling a matter entrusted to his care, no damages were assessed against Milledge since Primis did not present expert testimony to establish that Milledge's negligence was the proximate cause of its injuries. 

Issue:  Whether expert testimony was necessary to establish proximate cause? 

Ruling:  Yes.

In a legal malpractice case predicated on professional negligence during litigation, expert testimony generally is required to determine whether the result of the underlying litigation would have been different but for the attorney's alleged negligence.

***

[Here] the trier of fact would have to assess whether, with reasonably prudent counsel, the trial court would have vacated or modified the arbitration award against Primis Corporation...The causation inquiry was beyond the trier of fact's common understanding, therefore, expert testimony was necessary for Primis to prove causation.

Lesson: To prevail in a legal malpractice action, Plaintiff must present expert testimony to establish that "but for" his attorney's negligence he would have prevailed in the underlying litigation. 

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