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This is an issue that has become controversial. In most states, a criminal defendant who was convicted cannot sue for legal malpractice unless he establishes “actual innocence” or in New York, a colorable claim of innocence. Roy v. The Law Offices of B. Alan Seidler, P.C., (17 Civ. 5644 S.D. N.Y.)   is one such case.  Roy was convicted of wire fraud and conspiracy to commit wire fraud and was sentenced to 87 months in prison. His conviction was affirmed on appeal.  His legal malpractice complaint, which alleged several alleged failings by his trial counsel, was dismissed.

The court explained the rule in this way:

Plaintiff’s legal malpractice claim must be dismissed. As the Second Circuit has repeatedly held, “under New York law, a plaintiff cannot state a malpractice claim against his criminal defense attorney if his conviction `remains undisturbed.'” Hoffenberg v. Meyers, 73 F. App’x 515, 516 (2d Cir. 2003) (quoting Britt v. Legal Aid Soc., Inc., 95 N.Y.2d 443, 446, 718 N.Y.S.2d 264 (2000)); see also Abuhouran v. Lans, 269 F. App’x 134, 135 (2d Cir. 2008) (“Thus, to succeed, [plaintiff] would have had to show innocence or a colorable claim of innocence.”).

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The case is Fulton Market Retail Fish, Inc. v. Todtman, Nachamie, Spizz and Johns, 2018 NY Slip Op o1o38 (Appellate Division First Department).

Plaintiffs, who sued their lawyers for legal malpractice, were concerned that the same judge who heard the underlying case was going to hear the legal malpractice case. They waited ten months after bringing the case to move for recusal. The court explained:

Plaintiffs’ claims are undermined by the fact that, while they argue that the court made biased rulings in the underlying landlord-tenant litigation, they never moved for recusal in that lawsuit, which lasted over a decade (see Glatzer v Bear, Stearns & Co., Inc., 95 AD3d 707 [1st Dept 2012]). Even after the same justice was assigned to the instant action, plaintiffs did not move for recusal until 10 months after the case commenced, and then only after the court, at oral argument on a motion to dismiss, questioned the viability of plaintiffs’ legal malpractice claim on collateral estoppel grounds.

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The case is captioned Kalomakls Management v. Lawrence & Walsh, P.C., 2018 NY Slip Op 00282. The plaintiff filed an arbitration proceeding against a contractor who worked on the renovation of Plaintiff’s diner. The Defendant law firm represented the plaintiff during that trial. The arbitrator ruled in favor of the contractor and dismissed Plaintiff’s claims. Plaintiff then sued the law firm for legal malpractice. The law firm obtained summary judgment and that decision was affirmed on appeal because the Plaintiff could not prove that absent the negligence it would have won the underlying case. Because plaintiff could not prove proximate causation (or negligence) the grant of summary judgment was affirmed.

Ed Clinton, Jr.

http://www.clintonlaw.net

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The case is Millman v. Blatt & Dauman, 2018 NY Slip Op 30016(U).  The plaintiff sued his former divorce attorney and his accountant for providing allegedly faulty tax advice that he should file a joint return with his wife. Because the plaintiff alleged that he relied on the advice of the accounting firm, Blatt & Dauman, the Court dismissed the claim against the divorce lawyer. The court reasoned that if the client relied on the advice of the accounting firm, he could not have relied upon the lawyer’s advice. The court held that the claim against the accounting firm stated a claim and declined to dismiss that claim.

http://www.clintonlaw.net

 

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The case is DePalma v. Maya Murphy, 16 cv 8933, from the Southern District of New York.  The relevant opinion is dated December 1, 2017.

The plaintiff, Carol DePalma, sued her former divorce attorney and the court-appointed financial expert. This post will deal with the claims against the financial expert. During the divorce the parties chose and the court appointed an accounting firm, KLG, LLC. KLG was to render an opinion as to the value of Husband’s interest in Shred-It, a company in the shredding business. KLG issued two reports and the parties ultimately settled the divorce case.

Carol then sued KLG for negligence, for its purported failure to value the interest in Shred-It after it merged with another company.  The court dismissed the negligence claim against KLG and explained that the opinion of KLG did not proximately cause any injury to Carol. The explanation:

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After his divorce case concluded Lancaster sued his former attorney for malpractice. The claim included allegations of fraudulent billing and other claims. The lawyer raised the defense of res judicata. Res judicata is a phrase borrowed from Latin which bars a litigant from re-litigating a claim that was previously litigated to judgment. The basis for the res judicata claim was that the lawyer had filed a fee petition in the divorce case seeking a judgment for fees against Lancaster. The trial court awarded fees. The legal malpractice case was held to be barred by res judicata. The court agreed with the lawyer that the claims for legal malpractice could have been raised in the fee proceeding.

Comment: this is a fairly broad reading of res judicata. Courts are often reluctant to allow the res judicata defense in legal malpractice cases because the whole point of the legal malpractice case is usually that the client lost the underlying case because the lawyer made an error. If the courts applied res judicata in every case that the client lost, malpractice liability would be swallowed up by res judicata. Because this particular case contained allegations that the lawyer’s bills were fraudulent after they had been approved by a court, res judicata makes more sense here. In any event, res judicata remains a controversial defense to the legal malpractice action.

Edward X. Clinton, Jr.

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This is a divorce malpractice case where a lawyer allegedly failed to timely appeal a divorce judgment against his client. His client (Ex-Husband) claimed that the failure to appeal constituted legal malpractice. The Georgia courts disagreed. The holding: even though the lawyer missed the deadline to appeal, there was no legal malpractice because Ex-Husband’s appeal had no merit. Put in more blunt terms, the courts found that Ex-Husband was an adulterer and, in the State of Georgia, was going to lose the divorce case.

The explanation:

We conclude that, as a matter of law, Ward failed to demonstrate that the divorce court abused its discretion and that the Supreme Court thus would have reversed the award but for Benson’s error. Although Ward complained that the divorce court gave undue weight to his alleged adultery, the amended order indicates that the court did consider “all the relevant factors” and did not improperly consider evidence of Ward’s adultery. “[E]ven though an adulterous spouse cannot obtain alimony, an equitable property division is still permissible. . . . However, where equitable division of property is in issue, the conduct of the parties, both during the marriage and with reference to the cause of the divorce, is relevant and admissible.”[

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This issue comes up every now and then. An attorney files a collection lawsuit against a client and obtains a judgment against the client. (Here the client did not appear and a default judgment was entered). Later, the client reviews the attorney’s work and files a legal malpractice lawsuit. May the lawyer argue that the legal malpractice case is barred by the doctrine of res judicata? Here the answer is “No.”

The court includes a discussion of res judicata:

The purpose of this common law doctrine is to “relieve the parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication.” Allen v McCurry, 449 US 90, 94; 101 S Ct 411; 66 L Ed 2d 308 (1980). “For the sake of repose, res judicata shields the fraud and cheat as well as the honest person. It therefore is to be invoked only after careful inquiry [as to whether foreclosing plaintiff’s case would protect] the interests served by res judicata.” Brown v Felsen, 442 US 127, 132; 99 S Ct 2205; 60 L Ed 2d 767 (1979). “The burden of establishing the applicability of res judicata is on the party asserting the doctrine.” Richards v Tibaldi, 272 Mich App 522, 531; 726 NW2d 770 (2006).

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In this case, the Minnesota Court of Appeals holds that a client’s executor has standing to pursue a legal malpractice claim against an estate planning attorney.

Gordon Savoie sought estate planning advice from a law firm. That law firm prepared an estate plan for him. Upon his death, a bank was appointed to be his executor. The bank, on behalf of the estate, sued the law firm for legal malpractice because the firm had failed to adequately plan for generation-skipping taxes. The law firm moved for judgment on the pleadings based on the formalistic argument that the law firm did not have an attorney-client relationship with the law firm. The district court accepted this argument, but the Court of Appeals reversed.

The argument that there was no attorney-client relationship with the bank and therefore no duty is poorly reasoned. If the argument were accepted, no victim of legal malpractice could ever sue if the victim passed away. No such rule applies in personal injury cases, medical malpractice cases, or even breach of contract cases. In all those cases the Estate steps into the shoes of the decedent.

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Some lawyers include arbitration clauses in their agreements with their clients. In this unpublished decision, the Third Circuit upheld an arbitration clause and rejected a challenge that the clause was prohibited by New Jersey law.

Source: Smith v. Lindemann, Court of Appeals, 3rd Circuit 2017 – Google Scholar