LAWYER MALPRACTICE: CASES & MATERIALS

Bennett J. Wasserman

This is an effort to make available to all law students  and lawyers, the  materials which I use in teaching this Lawyer Malpractice course at the Maurice A. Deane School of Law at Hofstra University. 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 also gained a few insights into what it’s all about. In addition to academics, I’ve  been professionally involved as an advocate and expert in well over 1500 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  clients who are disappointed with 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 four 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 may be outside of the relationship? How to define the lawyer’s duty? Does the duty fall within the scope of the relationship? Can a duty that is provided for 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 negligent?

And these are just some of the questions, for starters. So, where to start is the question. You can give your feedback by simply clicking the link to  the “Contact Us” box. 

Prof. W.

COURSE OUTLINE AND READING ASSIGNMENTS

CLASS #1  INTRODUCTION and EARLY BEGINNINGS; LINKS TO RESOURCE MATERIALS

A Helpful Guide:   Johnson, Vincent R., LEGAL MALPRACTICE LAW IN A NUTSHELL (WEST, Thompson Reuters, 2011) (hereafter referred to as “Johnson”), but not required.

CASES:

Savings Bank v. Ward, 100 U.S. 195 (1880) (The first reported U.S. Supreme Court decision dealing with lawyer malpractice)

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 to form an attorney-client relationship; How does a lawyer prevent an unwanted attorney-client from forming?  How do we determine the Scope of the Relationship (Limiting or Expanding the lawyer’s duty to the client)? How do we terminate an attorney-client relationship?  Are there any duties inherent in the attorney-client relationship that endure even after the relationship ends?

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. 

New York  Letters of Engagement Rules 

CASES:

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

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)

CLASS #3:  THE CLIENTS’ “HYBRID” CAUSE OF ACTION AGAINST THEIR LAWYER  

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

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.

Affidavit of Merit NJ (continued)

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

RLGL § 15 A Lawyer’s Duties to a Prospective Client

RLGL § 16 A Lawyer’s Duties to a Client—In General

RLGL § 50 Duty of Care to a Client

RLGL § 20 Duty to Inform and Consult with Client  

ATTENTION:  SCROLL UP TO CLASS #1 TO THE RULES OF PROFESSIONAL CONDUCT LINK AND REVIEW THE FOLLOWING RULES:

RPC 1.1 (Competence); RPC 1.3 (Diligence); RPC1.4 (Duty to Communicate)

RPC 1.2 The Scope of the Attorney-Client Relationship

CASES:

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)

CLASS #5- THE LAWYER’S FIDUCIARY DUTY 

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.

ATTENTION:  SCROLL UP TO CLASS #1 TO THE RULES OF PROFESSIONAL CONDUCT LINK AND REVIEW THE FOLLOWING RULES:

RPC 1.6 (confidentiality)

RPC 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)

Classes #6 and #7 –  

THE DEMISE OF PRIVITY AND THE RISE OF THE “QUASI CLIENT’S” CAUSE 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.

RLGL §51 Duty of Care to Certain Non-Clients

For purposes of liability under § 48, a lawyer owes a duty to use care within the meaning of § 52 in each of the following circumstances:

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 581 (App. Div. 1976) cert denied 72 N.J. 459 (1976)

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

Banco Popular, NA v. Ghandi, 184 N.J. 161 (2005)

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)