The Next Year in Legal Malpractice Jurisprudence
(Because precedent is not enough)
1.If The Issue In The Underlying Case Was A Bench Question, Who In The Legal Malpractice Case Decides It, The Judge Or The Jury?
A. Rand, Algiere et al v. Braun v. David Rand:
FACTS: Braun is cheated by his partner of 15 years on a land deal with 10 lots. Rand represents Braun and was to move to get partition. The claim is that he did not do that (or much else) to protect Braun. Braun gets a greatly reduced sum on a forced buy out of the whole project.
Held by the trial judge: She will sit as a chancery judge (actually as Judge McKenzie) and determine the partition action as he would have done.
B. How did we get here? The Judge’s reasoning:
i. Garcia v. Kozlov, Seaton, Romanini & Brooks, P.C., 179 N.J. 343 (2002) and Lieberman v. Employers of Wausau, 84 N.J. 325 (1980) are the reasons. The judge is free to bifurcate and when she separates out the underlying case from the legal malpractice case, she takes one more step and says, it’s now a partition case and partition cases are legal issues and must be heard by a judge.
DO GARCIA AND LIEBERMAN SAY THAT? You get as close as possible to the actual trial below? The argument is that a legal malpractice case, being a case within a case, must hew closely to the circumstances of the underlying case.
ii. Partition claims are just too darn complicated for a jury. How will they know how to resolve something like that? (But consider that there were 10 lots. Hmm, partition in half, ten lots, ok . . . .)
C. The other side of the argument -- The New Jersey Constitution
i. Article I, Paragraph 9 of the New Jersey Constitution guarantees the right of trial by jury. “The right of trial by jury shall remain inviolate . . .” To determine whether a litigant is entitled to a trial by jury one must ask . . . would have been entitled to a trial by jury before 1947. Linn-Anna Properties v. Harbor View Development, 145 N.J. 313, 321 (1996), citing In re LiVolsi, 85 N.J. 576, 587 (1981).
This is a negligence case. Negligence cases got a jury trial in 1946. There is no claim for equitable relief in this case. If a legal malpractice plaintiff is not entitled to a jury, it would be the only class of negligence cases in which that right was taken away.
ii. Juries are smart. They regularly decide questions far harder than partition. Anti-trust and market share. What is pain worth? Why someone died? Who shot Biggie Smalls?
D. This is going to be a huge change -- Judges doing fact-finding in legal malpractice cases
The circumstances where it can come up are many:
i. Family law and adoption issues ii. Contract interpretation
iii. Will Contests, Estate & Trust Law and Probate iv. Duty v. Evidence questions
vi. Duty to appeal vii. Landlord/Tenant
viii Foreclosure
ix. Bankruptcy
x Patent and Trademark
xi. Tax advice
xii Workers compensation
xiii Environmental Clean-up and Pollution
xiv etc. and etc.
No plaintiff will ever win any of these cases. EVER.
It’s the legal equivalent of having a doctor decide a medical malpractice case. Judges, especially trial judges, hate legal malpractice cases and it is pointless to deny that.
Rand, Algiere et al v. Braun v. David Rand is a good example of why judges should be LOATHE to become juries in legal malpractice cases. Rand is now a Judge. If you were the plaintiff in this case, would you think that Judge Davidson was going to be fair about the claims of malpractice of Judge Rand? And if it was a clear case of malpractice, would you actually want to be in that position, perhaps (though I think this would NEVER HAPPEN) finding that one of your colleagues had committed malpractice?
2.What A Particular Jury, Judge Or Arbitrator Would Have Done If The Case Had Been Presented Consistent With The Standard Of Care.
A. The Issue: If the legal malpractice case asks how things would have come out if submitted to a judge, a jury, an arbitration panel, is it THAT PARTICULAR judge, jury or panel, or a theoretical one?
i. Judge Davidson in a negligence case is sitting as a chancery judge namely Judge McKenzie (a well-known Hollywood theme)
ii. Contel v. Dreifuss, et al
FACTS: A lawyer served Chilean defendants but does not move to default them. Two years pass and then the magistrate threatens to dismiss if he does not move for default. He then moves for default and Judge Martini eventually says this:
Moreover, even assuming Defendants were dilatory, Plaintiff was likewise dilatory. Thus granting default would be inequitable. First, Plaintiff filed its Complaint in 2001, but did not serve the Defendants – according to their own admission – until between April to November 2002. This is hardly indicative that delays in these proceedings injured Plaintiff. Second, Plaintiff failed to file its motion for default until after Defendants filed their first responsive motion. This is no picayune matter. Had Plaintiff filed its cross-motion for default in 2002 (when it says service was effected) and had the Court granted it (as it might have absent objections from the nonparticipating Defendants), Plaintiff could have carried a subsequent federal court judgment to Chile for enforcement.
Contel hired new counsel to prosecute the case as the Chilean Defendants were allowed to Answer. Contel could have won by default judgment had their attorneys timely moved. Contel incurred more than $2 million in legal fees to prosecute the case. We filed a legal malpractice case to recoup the legal fees paid.
HELD: We cannot prove what Judge Martini would have done and we can’t prove it as a matter of law. As a matter of law, it is held, defaults are forgiven. No proximate cause, as decided by the trial judge.
iii. Cocco v. Hamilton et al
FACTS: A is under contract to sell to B and B is going to sell to C, using C’s money to buy from A. C cannot get the money to buy and seems to be in breach of contract in a fast rising market. Judge Perskie gives him a month beyond the contract date, until December 14 to get a mortgage. The buyer still cannot get it on the 14th so he and his lawyer and the lawyer for A have a secret and fraudulent closing, cutting out B. When B sues those lawyers for doing this, they defend saying that if they had gone to Judge Perskie again he would have given them more time to close. We know that, the defendants say, because he did that once already.
But the issue is not what Judge Perskie would have done, but what does the law require?
iv. Carbis Sales, Inc. v. Israel Eisenberg, Esq.
Asking the expert to say what would THAT jury have done if the attorney who had handled the case had produced at trial the evidence he overlooked?
v. Glass v. Suburban Restoration Co., Inc., 317 N.J.Super. 574 (1998) (before dismissing legal malpractice counterclaim, judge acted appropriately by consulting another judge who had ruled on earlier motions in case)
3. RESPONSIBILITY FOR YOUR PARTNER, EVEN THE “ROGUE” PARTNER
A. Licette v. Sills Cummis et al (Argued in Appellate Division in February 2009)
FACTS: Sills Cummis employs Napolitano as a partner. Napolitano represents Licette while at Sills, having also been their lawyer while at Reed Smith. And while at Reed Smith, Napolitano had told his client to send a letter to Sills Cummis accusing it of malpractice. Napolitano continues to do work for Licette after he comes to Sills Cummis. But the checks are made out to him personally, not to Sill Cummis, and he cashes them. He uses Sills Cummis resources and Sills Cummis partners see the client there, the work going on. But they never say the client can escape liability for the poor and conflicted legal work done in 1997 and 1998 by its then employee/partner/member of the firm, defendant Andrew Napolitano, in the representation of Licette?
THE ISSUE: Under what circumstances can you disavow responsibility for the legal work of your law partner?
B. First American Title v. Lawson, 177 N.J. 125 (2003) (insurance fraud by the managing partner)
Mallen, Legal Malpractice, 2007 Ed. at §5.8. has said it succinctly:
The doctrine of Respondeat Superior subjects the firm to liability for a tortious wrong committed by an employed attorney. The employed attorney has the same apparent authority concerning legal matters as his or her employer and, when acting within that authority, will bind both the firm and the client. Liability does not depend on whether the conduct furthered the firm’s business nor is it negated because the employee violated ethics rules or made a personal profit. (citations omitted).
New Jersey Partnership Law (N.J.S.A. 42:1-15): All partners are liable:
a. Jointly and severally for everything chargeable to
the partnership under sections 42:1-13 . . . of this title.”
Falzarano v. Leo, 269 N.J.Super. 315 (1993) (It is fundamental that every member of a partnership is jointly and severally liable for torts committed by other members of the partnership acting within the scope of the firm business, even though they do not participate in, or ratify, or have knowledge of such negligence or legal malpractice.
The Professional Services Corporation Act (N.J.S.A. 14A:17-8) does not change any principle governing “legal liabilities between the person furnishing the professional services and the person receiving such professional services . . . .”
Restatement (Third) of the Law Governing Lawyers § 58 (A law firm is subject to civil liability for injury legally caused to a person by any wrongful act or omission of any principal or employee of the firm who was acting in the ordinary course of the firm’s business . . . .)
Homa v. Friendly Mobile Manor, Inc., 93 Md. App. 337, 612 A.2d 322 (1992), cert. granted, 329 Md. 168, 617 A.2d 1085, and cert. dismissed, 330 Md. 318, 624 A.2d 490 (1993) (A suit brought against an attorney and his law firm for fraud, breach of contract, and breach of fiduciary duty owed to the client. One of the issues before the Court of Special Appeals was the liability of the firm for the conduct of attorney Homa. In concluding that Homa had no actual authority to bind the firm, notwithstanding that the “engagement letter” was prepared on the firm stationery with his name listed as “Of Counsel,” the court considered the proofs regarding the nature of the services to be rendered, the reasons why plaintiff selected Homa personally to do the work and Homa's personal involvement as a consultant in the underlying transaction, plaintiff's lack of knowledge of Homa's “affiliation with [the firm] until he received the engagement letter” and the lack of remuneration to be paid to the firm. Upon review of the proofs resulting in the trial court's judgment for the firm after hearing plaintiff's evidence at trial, the court concluded: “In addition, it is reasonable to conclude, based on the express terms of the agreement and lack of any evidence indicating otherwise, that Homa was not engaged in this transaction for the benefit of [the Firm], and that [the Firm] was not to receive remuneration or other benefits for the services provided by Homa. Friendly presented no evidence of any contact with [the Firm] at all, or of any payments made to [the Firm].”
Charleston, S.C. Registry for Golf & Tourism, Inc. v. Young, Clement, Rivers & Tisdale, LLP, 359 S.C. 635 (App. 2004). FACTS: Attorney-golfer acquires ownership interest in business and does unauthorized legal work for the business while at law firm. The company sued attorney-golfer and law firm for malpractice and misappropriation of funds.
HELD: There was no actual or implied authority.
C. It’s the rule in other contexts anyway
Malanga v. Manufacturers Cas., 28 N.J. 220 (1958) (Thompson, while standing on his own property, refused to permit Alfred Malanga, one of the partners, to remove dirt from Thompson’s land. Malanga soon lost patience and conveyed his felonious solution in a succinct couplet, “Get away. Or I will bury you in the dirt.” And then he did and Thompson was injured.)
Lehmann v. Toys R’ US, 132 N.J. 587 (1993) (toy store was liable for one of its managers who was constantly seeking sex from subordinates)
Fischer v. Johns Manville, Co., 103 N.J. 643 (1984) (corporation cannot disavow the conduct of its employees when they were at the business of the company, selling asbestos, even if they lied about its safety in doing so.)
4. CAN A FORMER JUDGE TESTIFY TO THE JURY AS AN EXPERT IN A LEGAL MALPRACTICE CASE?
A. The issue: Does this serve the interests of our legal system?
“I was a judge and so when I say that I know how a judge would have ruled I really do know how a judge would have ruled.”
i. Cross-Examination: How many times have you been reversed? How did you do on the NJLJ rating of judges? How come you never got promoted to the appellate division?
ii. The inevitable arms race: If you get a trial judge, I’ll get an appellate judge, or a Federal Judge.
iii. The puzzling rules: I filed an inquiry with the judicial ethics committee. The rule as far as I know it (no judge in retirement pay status can do it but others can, federal judges can. It’s a rule of the retirement system, not a rule of ethics.
Can’t appear in court as a lawyer (if in retirement pay status) since that would be an unfair advantage but can get on the stand and say, I was a judge, I know how this thing should come out. But if you are not in pay retirement pay status, you can appear in court as a lawyer.
And can’t call yourself a judge.
5. THE LEGISLATURE WILL OVERRULE THE SUPREME COURT ON FEE SHIFTING IN LEGAL MALPRACTICE CASES
A. The Constitution says the Supreme Court is in charge of lawyers and their conduct: (NJ Const. of 1947 Art. VI, § 2, ¶ 3)
“The Supreme Court shall make rules governing the administration of all courts in the State and, subject to law, the practice and procedure in all such courts.”
Winberry v. Sailsbury, 5 NJ 240,255 (1950) and In re LiVolsi, 85 NJ 576, 585 (1981) ("...this Court has exercised plenary, exclusive, and almost unchallenged power of the practice of law in all of its.htmlects under [the NJ Constitution]")
The Supreme Court has spoken clearly that attorneys who commit malpractice have to face fee shifting, like Consumer Fraud Act Defendants, companies that discriminate, people who file frivolous law suits. And now the Bar is subverting that by whining to the legislature on behalf of insurance companies.
The issue is not if legal malpractice cases are economic without fee shifting. The small cases brought to get only fees are bad for the system (my opinion), just as non-economic CFA cases are bad for the system.
The issue is if the Supreme Court has decided that errant lawyers must pay fees for their bad work, should the bar undermine the Court’s control of the profession?
