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The case, Nancy Setterquist v. Law Offices of Ted D. Billbe, P.C., N0. 18-35880, is an unpublished decision of the Ninth Circuit that raises important issues. The case is a divorce malpractice case. Setterquist alleged that her lawyer allowed the court to enter an erroneous order. Based on the text of that order, her ex-husband filed a post-decree claim against her for maintenance and was able to recover. The facts are not summarized well in the opinion, unfortunately, leaving me with questions about what happened and why it happened.

The defense strategy was to move to dismiss on the basis that Setterquist engaged a new lawyer post-decree. The defense argued in a motion to dismiss that successor counsel could have corrected the error made by Billbe and defeated ex-husband’s claims.

The district court dismissed the case on the basis that Setterquist could not allege proximate causation because she employed successor counsel.

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Over the years, I have thought about this a bit. My current answer to this question is to be mindful of your own emotions when dealing with clients.

If a client criticizes you unfairly or makes you angry, stop writing that letter or email and let things cool off. You have may have to write to the client to correct the record, but do not do so when you are angry. Angry lawyers do dumb things like (a) disclose a client confidence to a third party; (b) threaten to file an ARDC grievance against another lawyer; or (c) file an angry motion with a judge.

When you are angry, you are not thinking correctly. Take time and cool off. Discuss the matter with a colleague or an experienced ethics lawyer. Then it may be necessary to write back to the client and inform that person or corporation of your opinion.

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Illinois does not require a lawyer to have insurance. However, the ARDC requests that you inform it each year whether or not you have insurance.

My advice to the public is that you should never hire a lawyer who is uninsured. First, if something goes wrong, you have little chance of any recovery. Second, the insurance process forces lawyers to look at their own conduct and consider whether certain practices are appropriate. Third, most policies have coverage for any grievance that someone may file with the bar association or attorney regulator. Having insurance gives you access to free CLE and you can usually call your insurer and ask questions about some practices. (Not every policy has all of these benefits, but your policy might have them.)

Most important of all, having insurance will discourage you from filing a lawsuit for legal fees against a former client.

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There are a number of issues that you should consider before you file a legal malpractice claim against a lawyer. Your lawyer should discuss these issues with you so that you understand how to proceed:

  1. Did the lawyer cause your harm or was it caused by someone or something else? You are required to prove that the lawyer was the proximate cause of the loss of your case. Consider whether you would have won the case absent whatever error you believe the lawyer made. Play Devil’s Advocate – even if the lawyer had done what he was supposed to do, would I have won the case? Often the answer to this question is “No” because the case could not be won under any circumstances.
  2. Am I prepared to waive the attorney-client privilege? When you sue your lawyer you are almost always deemed to have waived the attorney-client privilege. That privilege shields communications from you to the lawyer and from the lawyer to you. It allow you to seek legal advice without fear that your own words will come back to haunt you. But if you sue a lawyer, you waive the privilege. Consider carefully whether the waiver of the privilege is worth it to you.
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In Flusser v. Bikel, 2019 NY Slip Op 32847(U), the plaintiff was involved in a contentious divorce. She discharged one firm and then hired the Defendant law firm (Bikel v. Mandarano) to represent her. At the conclusion of the divorce case, Plaintiff filed a legal malpractice claim against the Defendant law firm. In her complaint Plaintiff alleged that the Defendants had failed to sue prior counsel for alleged malpractice by those lawyers during the divorce case.

The Defendants responded that they had entered into an engagement agreement with Plaintiff under which Defendants representation would be limited to two areas:  “(i) “the prosecution or defense of a divorce action;” and (ii) “the prosecution or defense of a Family Court proceeding concerning custody, visitation and support proceedings, including the attempt to negotiate a resolution of the matter.'”

The trial court dismissed the legal malpractice action on the ground that the Defendants were not retained to investigate or prosecute a legal malpractice claim: The reasoning:

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Two law professors, Robert Anderson IV and Derek Muller, have published “The High Cost of Lowering the Bar,” in the Georgetown Journal of Legal Ethics. It can be found in Volume 32, page 307 of that law review.

Anderson and Muller argue, based on statistical evidence that lowering the bar passage score will mean an increase in attorney disciplinary claims. They show that students with lower bar passage scores are more likely to have public disciplinary matters. They argue that the attorney’s score on the bar exam correlates with discipline rates throughout the lawyer’s career. Lawyers with higher scores are far less likely to be disciplined. Lawyers with low scores are more likely to be disciplined.

Anderson and Muller argue against lowering the bar exam score because lower scores mean weaker quality lawyers.

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The case is captioned American Inter-Fidelity Exchange v. Hope, 17 C 7934, the District Court for the Northern District of Illinois rejected a law firm’s summary judgment motion based on the doctrine of judicial error. Usually, if there is a judicial error, that would constitute a defense to a legal malpractice claim. Here, as we shall see, the district court rejected the defense.

The underlying facts were mundane – the insured Rypninskiy was involved in an auto accident and was sued by

The insurance company filed a declaratory judgment action against Iurii Rypninskyi on the ground that he had not cooperated in the defense of an auto accident case filed against him.  The insurance company argued that Rypninskyi did not cooperate in the defense of his case. Rypninskyi, in turn, sued Cassiday Schade, LLP, alleging that the law firm committed legal malpractice in the defense of the action.

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In Parkinson v. Bevis, (Docket No. 46269), the Idaho Supreme Court reinstated an equitable disgorgement action filed by a client against her former divorce attorney.

Parkinson filed a claim for breach of fiduciary duty against her former attorney, alleging that he wrongfully revealed a confidential email to her ex-husband’s attorney after a settlement had been reached in her case. The trial court dismissed the action on the ground that Parkinson was not damaged because the email was revealed after the case settled.

The Idaho Supreme Court reversed the dismissal and reinstated the complaint for breach of fiduciary duty. The Court explained that Parkinson was not seeking damages for legal malpractice, but was seeking equitable disgorgement of legal fees paid to her prior attorney. The explanation

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An engagement letter can be very important in that it sets limits on the attorney-client relationship. A good engagement letter defines what the lawyer will do and what the lawyer will not do. In the case captioned, Attallah v. Milbank Tweed, Hadley & McCloy, 168 A.D.3d 1026 (2019), 93 N.Y.S.3d 353, the Appellate Division of the Supreme Court of New York affirmed the dismissal of a legal malpractice case based on the precise terms of the engagement letter.

The law firm agreed to represent Attallah on a pro bono basis to investigate whether or not he could be reinstated by a school that had expelled him.  The engagement letter made it clear that the law firm’s engagement did not include litigation with the professional school.  It provided:

To that end, the parties executed a letter of engagement dated July 7, 2011. The letter of engagement provided, in relevant part, that: “Our services will include all activities necessary and appropriate in our judgment to investigate and consider options that may be available to urge administrative reconsideration of your dismissal from the New York College of Osteopathic Medicine (the `College’). This engagement does not, however, encompass any form of litigation or, to the extent ethically prohibited in this circumstance, the threat of litigation, to resolve this matter. This engagement will end upon your re-admittance to the College or upon a determination by the attorneys working on this matter that no non-litigation mechanisms are available to assist you. The scope of the engagement may not be expanded orally or by conduct; it may only be expanded by a writing signed by our Director of Public Service.”

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This case, Ostrolenk Faber LLP v. Sakar International, Inc., 2019 NY Slip Op 31303(U), holds that a counterclaim for legal malpractice against an intellectual property firm stated a claim. Sakar retained Ostrolenk to defend it in a patent infringement lawsuit. In the underlying case, a plaintiff alleged that a product manufactured and sold by Sakar to Office Depot violated plaintiff’s patent.The case was eventually settled.

The current case involved (a) the law firm suing for legal fees; and (b) the former client, Sakar, filing a counterclaim for legal malpractice.  The counterclaim alleged that the law firm failed to promptly research the “prior art” in the particular invention. Had it done so, the law firm would have realized that the patent infringement claim against Sakar had no merit. Instead, the firm engaged in other litigation activity which, in Sakar’s view, ran up costs.

The court held that the counterclaim stated a claim and reasoned as follows: