Addali v. Boyer, No. 410, 2020 (Supreme Court of Delaware) holds that a legal malpractice plaintiff must obtain an expert witness to prevail at trial. In the Addali case the court affirmed the grant of summary judgment to the Defendant attorney.
Ed Clinton, Jr.
This case is captioned Khoury v. Kathleen Niew, Stanley Niew, and Niew Legal Partners, 2021 IL App (2d) 200388. Kathleen Niew converted funds of the plaintiffs that were held in her firm’s trust account. The only issue on appeal was whether the trial court properly held that Stanley Niew also had a fiduciary duty to the plaintiffs. The Appellate Court reversed the judgment and held that Stanley Niew did not owe a fiduciary duty to the plaintiffs. The court’s reasoning is important for all lawyers to read and understand:
¶47 Plaintiffs do not contend that they had a fiduciary relationship with Stanley as a matter of law based on an attorney-client relationship. This is wise, as the formation of an attorney-client relationship is a consensual relationship in which the attorney must indicate acceptance to work on behalf of the client, and the client must authorize the attorney to work on their behalf. …The record shows that plaintiffs and Stanley barely communicated at all, much less demonstrated a consensual relationship for Stanley to work on their behalf. Plaintiffs admit that they never spoke with Stanley via phone, e-mail, or text and at most Jamal could recall three short interatctions, which can be fairly described as small talk.The record does not support that Stanley ever agreed to perform work on their behalf, performed work on their behalf, or billed them for his services.
The court held that there was no attorney-client relationship with Stanley and held that the trial court erred in failing to grant summary judgment on his behalf.
Like many other states Illinois prohibits a legal malpractice plaintiff from obtaining punitive damages. However, if the plaintiff is a litigant who had punitive damages awarded against him, can he recover against his attorney? A recent decision answered that question with a “Yes.” In Midwest Sanitary Service, Inc. v. Sandberg, Phoenix & Von Gontard, P.C., 2021 IL App (5th) 190360, Midwest was assessed punitive damages. Midwest sued its former lawyers for negligence alleging that, but for the negligence of the attorneys, no punitive damages would have been awarded.
¶ 15 Having examined the reasoning of the circuit court in distinguishing the case at bar from Tri-C, we agree with its conclusion that
“it appears that the unique characteristics associated with legal negligence claims for lost punitive damages, and for which the Illinois Supreme Court [in Tri-C] and the Ferguson court expressed concern, do not necessarily attend legal negligence claims for the recovery of paid or incurred punitive damages. Absent those unique characteristics, it seems to this court that there * * * exists no just reason to deny the plaintiff in this case the opportunity to recover its actual loss. It should be remembered that `[t]he general rule of damages in a tort action is that the wrongdoer is liable for all injuries resulting directly from the wrongful acts * * *, provided the particular damages are the legal and natural consequences of the wrongful act imputed to the defendant, and are such as might reasonably have been anticipated. * * *’ Haudrich v. Howmedica, Inc., 169 Ill. 2d 525, 543 (1996).”
In a story that is sadly all too familiar, the Oregon Supreme Court has issued an opinion and public reprimand of Brian Conry, an immigration lawyer who had the temerity to respond to three negative reviews posted online by a former client. In re Conry (OSB 18-104) (SC S067502). Conry represented a client who was seeking a stay of deportation proceedings. At some point the client engaged a new attorney who obtained the relief that the client was seeking. I will quote one of the reviews and responses:
“Horrible experience with [Respondent]. He lost my case. The government has ordered me deported. I fired him. Went to Gonzales Gonzales Gonzales Immigration law firm. They helped me to appeale [sic] my case and we won in about in about 3 month! [sic]. I found out that in my case I was not even deportable. But [Respondent] never told me that. He took over $20,000 in 5 years of fighting this case and lost it. STRONGLY RECOMMEND NOT TO HIRE THIS GUY.!!!”
The response:
Lawyers are often asked to provide an estimate of the costs of a matter. Inevitably the client regards the estimate as a limit on the attorneys total bill, even if the case becomes more difficult than originally anticipated. In Dubon v. Drexel, 2021 NY Slip Op 04119, the plaintiff claimed that the lawyer promised him that the matter would cost $100,000 and then sued the lawyer for overfilling when that sum was exceeded. That claim was defeated by a written engagement letter. As the court noted:
The plaintiff hired the defendants, Allen Drexel and Drexel, LLC (hereinafter together Drexel), to represent him in a divorce action. The plaintiff and Drexel entered into a retainer agreement (hereinafter the retainer), which set forth the terms of Drexel’s representation of the plaintiff. Pursuant to the retainer, Drexel, among other things, would provide the plaintiff with itemized billing statements at least every 60 days. The retainer further provided that any modifications to the agreement, fee estimates, budgets for work to be done for the plaintiff, or adjustments to Drexel’s bills “will be valid only if in writing and signed by [both parties]” (emphasis in original)…..
The Supreme Court properly granted that branch of Drexel’s motion which was to dismiss so much of the first breach of contract cause of action as alleged that Drexel breached the retainer by billing the plaintiff for legal services in excess of $100,000 (see Palero Food Corp. v Zucker, 186 AD3d at 496). Drexel demonstrated that such claim was conclusively disposed of by the retainer itself, which did not contain a provision stating that the plaintiff’s legal costs would not exceed $100,000, and which stated that any fee estimate must be in a writing signed by both parties.
Minnesota has enacted a statute that requires a plaintiff to file an affidavit with the complaint stating that the complaint is supported by expert testimony. Full expert disclosures are then required within 180 days of filing the case. In Mittelstaedt v. Henney, 954 NW 2d 852 (2021) the Minnesota Court of Appeals held that the expert requirement applies even when the plaintiff sues an attorney for breach of fiduciary duty. Because attorneys enter into fiduciary relationships with their clients, it is often possible to allege that a breach of duty by an attorney was either (a) negligence or (b) a breach of fiduciary duty. The case simply holds that the same expert testimony requirements apply no matter what theory the plaintiff chooses.
In Ring v. Schencker, 2021 IL App (1st) 180909-U, Barry Ring sued his former father-in-law, Richard Schencker for legal malpractice. During the marriage Ring was represented by Schencker in his business dealings. When he was divorced, Ring alleged that Schencker divulged confidential information to the attorneys for Ring’s wife (Schencker’s daughter). According to Ring, they used that information to obtain orders blocking Ring from selling or transferring assets. Judge Thomas Mulroy held a bench trial and held that the alleged disclosures of confidential information did not cause harm to Ring. The Appellate Court affirmed the judgment in favor of the lawyer.
The opinion summarizes Ring’s allegations as follows:
¶ 7 Barry alleged in his amended complaint:
In Walker v. Shaevitz & Shaevitz, 2021 NY Slip Op 1799 (Appellate Division Second Department) the court affirmed the dismissal of a legal malpractice claim where the plaintiff attempted to create an issue of fact with her testimony. The problem for the plaintiff was that her testimony in the legal malpractice case contradicted her testimony in the underlying case. Result: summary judgment for defendant. The court found that the contradictory testimony was insufficient to create an issue of fact.
Should you have a question concerning a legal malpractice issue, do not hesitate to contact us.
Ed Clinton, Jr.
Scarola Malone & Zubatov LLP v. Ellner, 2021 NY Slip Op 31199(U), April 8, 2021 (Supreme Court New York County) began with a lawsuit for legal fees against a client who declined to pay. The Defendant then filed a counterclaim alleging legal malpractice. The counterclaims alleged that the law firm made several errors in representing the defendants in civil litigation essentially by refusing to accept a buyout or settlement of the underlying litigation. The court dismissed the legal malpractice counterclaim on the ground that Ellner was sophisticated and imposed his strategic plan for the case on the lawyers. The lawyers exercised judgment and did not commit malpractice.
The reasoning:
Where a sophisticated client imposes a strategic decision on counsel, the client’s action absolves the attorney from liability for malpractice (Town of North Hempstead v Winston & Strawn, LLP, 28 AD3d 746 [2006]; Stolmeier v Fields, 280 AD2d 342 [2001]). Additionally, with regard to strategic decisions “the selection of one among several reasonable courses of action does not constitute malpractice” (Rosner v Paley, 65 NY2d 736, 738 [1985]). “Attorneys may select among reasonable courses of action in prosecuting their clients’ cases without thereby committing malpractice … so that a purported malpractice claim that amounts only to a client’s criticism of counsel’s strategy may be dismissed” (Dweck Law Firm, LLP v Mann, 283 AD2d 292, 293 [2001]). Hindsight arguments concerning selection of one of several reasonable courses of action do not state a viable cause of action for malpractice (Brookwood Cos., Inc. v Alston & Bird LLP, 146 AD3d 662, 667 [2017]).
The Illinois Appellate Court recently decided Rosenberger v. Meltzer, Purtill & Steele, LLC, 2021 IL App (1st) 200414-U. Rosenberger hired the Defendant Law Firm to represent him in connection with the negotiation of an employment contract with CenTrust. CenTrust had entered into an operating agreement with the Office of the Comptroller of the Currency (OCC). Rosenberger was hired on February 1, 2012. His agreement provided for a three-year employment term with a base salary of $200,000 per year. The agreement also contained a clause providing for severance compensation which provided that:
“If this Agreement is terminated by the Company prior to the expiration of the Employment Period for any reason other than Cause,… then the Employee shall be entitled to receive in a single payment…an amount equals to two times his annual base salary then in effect.” The Agreement also contained section 28, titled Regulatory Suspension and Termination. That section provided that if the employee was “suspended from office and/or temporarily prohibited from participant in the conduct of the affairs of Employer by a notice served under Section 8(e)(3) …of the FDIA [Federal Deposit Insurance Act], Employer’s obligations under this agreement shall be suspended as of the date of service.”
CenTrust terminated Rosenberger on November 5, 2013 and refused to make any severance payment to Rosenberger on the ground that he had been terminated for cause and because OCC would not approve such a payment.
Chicago Legal Malpractice Lawyer Blog