Stories & Grievances
Non-Client Lawsuits Against Attorneys
For eleven years an attorney named Mr. Kenneth Wasserman of 350 Fifth Avenue, Suite 4810, New York City, has pursued me for the "crime" of being named the Beneficiary of my mother's Will. He has been busy over these years, fixing the case in Manhattan Surrogate Court with the Senior Law Secretary to former Judge Renee Roth (Mary Santamarina), getting paid by former NY State Supreme Court Judge Karla Moskowitz to start a NY State Supreme Court case that did not exist, and violating every ethical, moral and legal rule in the books. Now, it's my turn, but I'm going to pursue justice the right way. by Betsy Combier
Many people who are Pro Se and end up in court for one reason or another succumb to the massive assault that awaits them. Judges are Royalty in their courtrooms, and no one, absolutely no one, is going to get in his/her way as they collaborate with whoever the Fixer, is.
If you find yourself facing these formidable individuals who may appear similar to Court Mafia, is there anything that you can do to hold them accountable for their actions?
I say yes.
One way is to document the lies, illegal actions and violations of the Code of Judicial Conduct, and file a lawsuit against the opposing party's attorney for the intentional infliction of emotional harm, personal gain, non-compliance with procedures of the court, and violations of Judiciary Law Section 487, 488.
My two cents is always to hold people accountable for their actions
Legal malpractice is a significant problem.
Statistics indicate that the number of legal malpractice cases is increasing. Possible reasons for this discrepancy include increased consumerism, higher client expectations, better educated clients, the need for more specialized legal skills, and the growth in similar fields of litigation.
The two leading areas where claims are made of legal malpractice are Personal Injury (Plaintiff) and Real Estate. Over half the claims alleged an error in litigation.
But lawyers won't sue other lawyers! Many people assume it is difficult or impossible to get a lawyer to represent them in a claim against another lawyer. Sometimes, in a small legal community like Hawaii, you will have to go to more than one lawyer, but if your case has merit, you will probably be able to find an attorney to sue another attorney.
Attorney's Duty to a Client: Attorneys have serious ethical and legal obligations to their clients. The Attorney-Client relationship usually establishes a "fiduciary duty." This is the highest duty the law imposes. It requires the attorney to exercise the "utmost care," and treat the interests of the client as if they were the attorney's own interests. The client is entitled to place complete trust and confidence in the lawyer, and rely on their advice.
In a majority of cases, the client hires a lawyer to handle a specific matter. Once both the attorney and client consent to working with one another on a matter, the attorney has a "fiduciary duty" to protect his or her client's interests. This duty is owed only to the client. An attorney generally does not have any duty to protect the interests of a third-party, adverse party, or non-client.
There are some exceptions to these extensions of duty to third-parties or non-clients. Specifically, if the non-client was supposed to have been a "direct" beneficiary of the work done by the attorney, then the attorney may be obligated to the non-client such that a lawsuit can be initiated by the non-client. However, this exception is void for any situation where the non-client's interests conflicted with the attorney's client.
Conflicts of Interest: Generally, lawyers are not allowed to represent you if they have a "conflict of interest". This duty to the client is extremely strict and demanding (requiring the lawyer to treat the client's interest with the "utmost" care).
Statute of Limitations: In Hawaii, generally, cases of legal malpractice must be filed within six years of when the plaintiff knew or should have known that a claim existed against the defendant attorney. However, you should never wait that long. Sometimes, related claims need to be filed within 2 years of when the misconduct occurred.
Fee Agreements: It is always a good idea to have a written fee agreement with your attorney. The agreement should clearly spell out the scope of the work assignment, the fees, the costs, and all other understandings between the parties. Verbal fee agreements are almost never a good idea. If your attorney wants to represent you without a written fee agreement, you should ask why.
Fee Disputes Sometimes a client does not think their attorney committed malpractice, but does think the bill is unreasonable. Sometimes this can result from simple miscommunication. Sometimes there may be administrative errors. Sometimes there may be an attempt to defraud the client by padding or double-billing. There are audit companies and other professionals which can review legal bills and tell you whether your legal bill is reasonable. Often, it is relatively easy to work out some discounts with law firms, especially when smaller dollar amounts are at stake.
Non-Client Lawsuits Against Attorneys
Approximately 20% of all lawsuits against attorneys arising out of the rendition of legal services are brought by non-clients. These claims are even more dangerous than ordinary malpractice claims for two principal reasons.
First, since a law firm rarely owes a duty of care to anybody other than a client, these lawsuits typically allege intentional misconduct, not negligence. Compared to negligence, intentional misconduct is far more likely to raise the interest of a disciplinary committee, and far less likely to be covered by a malpractice insurance policy.
Second, lawyers should practice law with a healthy fear of malpractice liability, but cannot practice law like they are scared of third parties. Many third party lawsuits are brought by individuals on another side of a litigation. Or transaction. Lawyers are often placed in a position where they are knowingly inflicting some kind of misfortune on others.
It is therefore critical for a lawyer to understand where the line is drawn between zealous advocacy and potential third-party liability.
1. LIABILITY TO ADVERSE PARTIES
1. Aiding or Participating In Client's Breach Of Fiduciary Duty or Contract
1. Be wary of the client looking for "advice" that would breach a fiduciary duty to a third party, especially a business partner. In Joel v. Weber, 602 N.Y.S.2d 383 (1st Dep't 1993), (see also Bankfirst v UBS Paine Webber, Inc.) Billy Joel's business partner allegedly diverted some funds owed to him pursuant to a partnership agreement. The Piano Man sued not only his partner for breach of fiduciary duty, but his partner's attorneys for aiding and abetting that breach. The law firm alleged that it was "immune" for any aiding and abetting liability, since it was merely providing legal advice. The First Department disagreed, holding that "(A)lthough mere negligence by an attorney in rendering advice to a client does not support a separate right of action by a third party allegedly injured by that advice, nevertheless, under New York law, an attorney may be held liable to third parties for actions taken in furtherance of his role as counsel upon proof…of the existence of 'fraud, collusion, malice or bad faith.'" Here, since the gravaman of the underlying claim was breach of fiduciary duty, the attorney could be held liable for aiding and abetting that breach.
2. A related trouble spot occurs when an attorney negotiates an agreement while helping the client avoid performing the same agreement. In Contractors Casualty and Realty Co. v. I.E.A. Electric Group, Inc., 693 N.Y.S.2d 915 (N.Y. Sup., N.Y. County, 1999), an attorney was alleged to have participated in a settlement agreement whereby his client promised to make payments to a supplier. The attorney represented that his client was committed to making payments while simultaneously helping the same client hide assets. Justice Cahn ruled that the attorney could be held liable for common law fraud and a violation of the state fraudulent transfer statute.
3. As attorneys, we are often asked to opine on whether a certain proposed action by a client would breach a contract. Erroneous advice may or may not equal malpractice recoverable by the client, but bad advice alone will not sustain a tortuous interference with contract claim brought by a third party. See Kline v. Schaum, 673 N.Y.S.2d 992 (2nd Dep't 1997) (realtor could not recover commission from seller's attorney who advised sellers that they need not pay commission, since an attorney is not liable for inducing a principal to breach a contract with a third party when acting on behalf of the principal within the scope of his authority); Beatie v. DeLong, 561 N.Y.S.2d 448 (1st Dep't 1990) (discharged contingency fee lawyer has no claim against his successor attorney even though successor erroneously advised client that plaintiff had entered into an unenforceable fee agreement).
4. The only exception to the above rule is if plaintiff can prove fraud, collusion, malice or bad faith.
2. Common Law Fraud/Conversion
1. A client's fraud is not easily imputed to an attorney. However, a fraudulent scheme that is dependant upon an attorney's services can lead to common law fraud liability. See Golden First Mortgage Co. v. Berger, 251 F,Supp.2d 1132 (E.D.N.Y. 2003) (attorney who represented both buyer and corporate seller of mortgage loans at several real estate closings can be liable for fraud where specific allegations indicate that his office notarized forged closing documents).
3. Malicious Prosecution/Abuse of Process
1. These torts involve misuse of the legal system, so even though such claims are rare, attorneys are targeted in some of these suits. Era Realty Co. v. RBS Properties, 576 N.Y.S.2d 831 (2nd Dep't 1992) (attorney may be liable for both abuse of process and conversion for executing on default judgment entered by a court lacking subject matter jurisdiction);
4. NYS Judiciary Law Section 487
1. Section 487 of New York's Judiciary law prohibits all New York attorneys from engaging in deceit that deceives any party or the Court in a pending Court proceeding. The statute also provides treble damages for violations of the statute. The Statute provide that an attorney who "(I)s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party…is guilty of a misdemeanor, and in addition to the punishment prescribed therefore by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action."
2. While some courts require a pattern of deceitful activity, others have held that one instance of deceit is enough to sustain liability. Guardia Life Ins. Co. of America v. Handel, 596 N.Y.S.2d 804 (1st Dep't 1993) (insurance carrier stated Section 487 claim stated where attorney relied on fraudulent embalming certificate in support of an application for a declaratory judgment that insurance carrier's autopsy demand was unreasonable); Fields v. Turner, 147 N.Y.S.2d 542 (N.Y. Sup. Ct. 1955) (false information in affidavit used to procure an arrest warrant subjects attorney to liability); Trepel v. Dippold, 04 Civ. 8310 (DLC) (assistance in helping client remove attachable assets from the jurisdiction subjects attorney to Section 487 liability, where attorney told judge that client was instructed not to remove any such assets).
3. A particular area of concern is when an attorney commits or suborns perjury. New York City Transit Authority v. Morris J. Eisen, P.C., 715 NYS2d 232 (1st Dep't 2000) (knowing use of perjured testimony subjects attorney to common law fraud claim and potential treble damage liability under Judiciary Law Section 487); NYAT Operating Corp v. Jackson Lewis, 741 N.Y.S.2d 385 (Sup. Ct. NY County 2002) (where allegation is that attorney committed perjury in deposition testimony, Section 487 liability attaches).
2. OTHER NON-CLIENT LIABILITY
1. Duty to Spouses
1. Jordan v. Lipsig, Sullivan, Mollen & Liapakis, 689 F.Supp. 192 (S.D.N.Y.) (where lawyer did not represent husband, but represented wife in medical malpractice claim, husband could sue firm for the loss of his potential claim for loss of consortium). The Court reasoned that a spouse "should reasonably be able to rely on the representation afforded to the injured spouse to inform him or her of his or her potential derivative claims of loss of consortium." The Court relied on the derivative nature of loss of consortium (i.e., there is no claim absent the spouse's malpractice claim, where the statute of limitations was missed), but query whether there are other circumstances where a client's spouse can expose a law firm to malpractice liability.
2. Duty To Foreseeable Third Parties
1. In Estate v. Ginor v. Landsberg, 960 F.Supp. 661 (S.D.N.Y. 1996), the Court found that an attorney who represented a general partner and a limited partnership had no duty to a limited partner to disclose information regarding sale of partnership properties. No liability.
2. Many attorneys volunteer their services. This may or may not create an attorney-client representation, but even if it does not, a duty of care may arise. In Schwartz v. Greenfield Stein & Weisinger, 396 N.Y.S.2d 582 (Queens Co. 1977), attorney volunteered to file and perfect plaintiff's security interest in personal property. The attorney failed to do so, relegating plaintiff to general creditor status. The Court ruled against attorney, conceding that there was no attorney/client relationship but citing to general tort law for the proposition that one who gratuitously performs a duty can be held liable for negligence for failing to exercise due care.
3. Law firms often prepare opinion letters on behalf of their clients which will be relied upon by various third parties. The Court of Appeals in Prudential Ins. Co. of America v. Dewey Ballantine, 80 N.Y.2d 377 (1992) made clear that attorneys can be held liable for negligence by third parties when attorneys know said third parties will rely on an opinion letter. In that case, Dewey Ballantine prepared an opinion letter that a lender relied upon in extending credit to Dewey's client-borrower. However, under the facts of that case, the Court found no breach of the duty of care, since the primary misrepresentation (i.e., a sum certain dollar amount of security) was the subject of several disclaimers in the opinion letter at issue.
4. In Crossland Savings, FSB v. Rockwood Ins. Co., 700 F.Supp. 1274 (S.D.N.Y. 1988) Judge Leval ruled that attorneys can be liable to a third party loaner for an opinion letter addressed to that third party that misrepresented that (1) that limited partners had made a "paid-in investment", and (2) said limited partners were all persons of substantial means who would be able to fulfill their obligations under investor notes.
The common thread running through many of these cases is the attorney who overreaches while furthering the goals of the less-than-savory client. The old adage is that if you sleep with excrement you will wind up smelling like excrement. Understand your client's real goals (which may be less-than-obvious), and be especially wary of the client who views the representation as a means to avoid an obligation or deceive others. Also take special care with financially-troubled clients.
Daniel L. Abrams
September 26, 2005
Attorney Malpractice Liability to Non-Client
In the course of an attorney's representation of a client, he may commit legal malpractice with respect to his prosecution, defense, or appeal of the client's action or his preparation of transactional documents for the client. The attorney's actions may constitute legal malpractice if he fails to use the skill, prudence, and diligence that attorneys of ordinary skill and capacity would use in performing their legal tasks. In addition to being liable to the client, the attorney may also be liable to a non-client in certain circumstances.
No Liability to Non-Client
Generally, an attorney is not liable to a non-client for legal malpractice. The basis of this rule is that an attorney cannot breach a duty to a non-client because there is no privity of contract between an attorney and a non-client.
Liability to Non-Client
In some jurisdictions under certain circumstances, the attorney may be held liable for malpractice to a non-client.
An attorney may be liable to a non-client who was an intended beneficiary of the attorney's services to a client. For example, an intended beneficiary of a client's will may be entitled to bring an action against the attorney for improperly drafting the will.
Foreseeable Reliance Exception
A recognized exception to the general rule of no liability to non-clients is that an attorney may be liable if his services to a client were performed so as to influence non-clients to justifiably rely on the services rendered. For example, if an attorney issues an opinion letter regarding the legal status of his corporate client so as to influence potential lenders, the attorney may be liable to the lenders who relied on that letter if the letter was negligently drafted and caused damage to the lenders.
An attorney may be liable for malpractice if his negligence causes damage to a non-client with whom he has established a fiduciary relationship. For example, an attorney for a corporation may have a fiduciary duty to the directors of the corporation. Thus, if his malpractice in relation to his services to the corporation causes damage to the directors, he may be liable.
An attorney, like other people, may be held liable for an intentional tort committed against a non-client, usually an adverse party of the attorney's client. A non-client may bring a malicious prosecution claim if the attorney misused the legal process for a purpose other than that of securing the proper adjudication of the client's claim. An attorney may be liable for abuse of process if he uses the legal process to secure a collateral benefit not directly related to the process. A non-client may bring an action for fraudulent, malicious, or intentional misrepresentations made by the attorney to the non-client (e.g., during the course of negotiating a settlement). An attorney may also be liable for intentional infliction of emotional distress. For example, the attorney may continually harass an adverse party in an attempt to influence the course of litigation.
N.Y. High Court: Lawyer Subject to Treble Damages for Attempt to Deceive Court
Joel Stashenko, Law.com., 02-17-2009
Tracing the legal principles behind a New York statute on lawyer deceit to a law adopted by the English Parliament in 1275, the state Court of Appeals has determined that an attorney can be subject to treble damages (pdf) in New York for an unsuccessful attempt to deceive a court.
The attorney deception issue came to the court in the form of two certified questions from the 2nd U.S. Circuit Court of Appeals.
Three judges on the federal panel asked for guidance after reviewing what they said were conflicting state court interpretations of whether state Judiciary Law §487 allows for treble damages when an attorney is "guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party."
The U.S. Court of Appeals' judges said they were uncertain whether the statute applies when an attorney tries, but fails, to deceive the court. A second certified question posed was whether the cost of litigation instituted by a complaint containing a material misrepresentation of fact should be treated as the proximate result of the misrepresentation if the court was not fooled by the deception.
Attorney Armand Rosenberg argued in Amalfitano v. Rosenberg, 3, that forfeiture under Judiciary Law §487 is analogous to a tort claim for fraud. As such, he contended that the state Court of Appeals has held that a plaintiff must be "deceived and damaged" as the result of an attorney's falsehood, citing Channel Master Corp. v. Aluminum Ltd. Sales, 4 NY2d 403 (1958).
The Court of Appeals ruled, however, that Judiciary Law §487 does not derive from common law fraud but from more venerable sources.
Judge Susan Phillips Read, writing for a 6-0 Court, determined that the law that evolved as §487 can be traced back to the first Statute of Westminster, adopted by the Parliament that was called by King Edward I in 1275.
That statute set penalties of imprisonment for a year and a day and a lifetime ban from court for pleaders engaging in "any manner of Deceit or Collusion in the King's Court" or efforts to "beguile the Court" or parties to its proceedings.
Read wrote that the fledgling New York Legislature adopted a statute with "strikingly similar" wording in 1787 and that laws like it have stayed on the books since. The Legislature added the penalty of a misdemeanor to deceiving the courts in 1836 and, in 1881, prescribed the forfeiture of treble damages to attorneys for deceiving the court.
The statute was transferred from Penal Law to Judiciary Law and numbered §487 in 1965.
"There it remains today, the modern-day counterpart of a statute dating from the first decades after Magna Carta; its language virtually (and remarkably) unchanged from that of a law adopted by New York's Legislature two years before the United States Constitution was ratified," Read wrote for the Court of Appeals.
Analyzing the law that way indicates that §487 is a "unique statute of ancient origin" and not a codification of common law fraud, the court determined.
"The operative language at issue, 'guilty of any deceit,' focuses on the attorney's intent to deceive, not the deceit's success," Read wrote.
Indeed, she continued, to limit forfeiture of treble damages under §487 to only successful deceits would "run counter to the statute's evident intent to enforce an attorney's special obligation to protect the integrity of the courts and foster their truth-seeking function."
In light of the court's finding that deceits need not be successful to fall under the forfeiture ambit of §487, Read, answering the second certified question, wrote that recovery of treble damages does not depend on whether a court accepted a material misrepresentation of fact in a complaint as true or whether it was able to see through the deception.
Rosenberg is contesting before the 2nd Circuit a determination by Southern District of New York Judge Naomi Reice Buchwald that he had engaged in a "persistent pattern of unethical behavior" in his representation of a man who was accused by the clients' two brothers of squandering the family's real estate holdings.
Buchwald assessed damages of $89,415 against Rosenberg, and then trebled them to a total of $268,245. 2nd Circuit Judge Robert Sack wrote the ruling that sent the matter to the state court for a clarification of state law.
2nd Circuit judges John Walker and Guido Calabresi joined Sack's ruling.
Among Rosenberg's actions faulted by Buchwald was his preparation of an affidavit executed by his client, Peter Costalas, in state court in which Costalas acknowledged that a 1993 agreement negotiated by Rosenberg to purportedly settle the Costalas' brothers' real estate disputes was a sham to avoid creditors and was "never intended and did not have real effect."
Filings in subsequent litigation in state court also contained tax returns erroneously listing Peter Costalas as a partner in family partnerships after 1993, according to the 2nd Circuit.
According to previous rulings, Supreme Court Justice Ira Gammerman ruled against Peter Costalas throughout the case and apparently was not taken in by any alleged deception by Rosenberg.
Rosenberg was sued in federal court for deceiving the courts by Peter Costalas's niece, Vivia Amalfitano, and her husband Gerard Amalfitano. At one point in the Costalas family litigation, Peter Costalas had sued the Amalfitanos, contending that they had defrauded the family in connection with the sale of a building in Manhattan. The suit was ultimately dismissed in state court.
Rosenberg's attorney, William J. Davis of Scheichet & Davis, said his client posted the damages ordered by Buchwald and now will presumably lose them when the case goes back to the 2nd Circuit.
Davis said he tried to give the Court of Appeals an alternative to the one dating back to the Middle Ages for how to interpret violations under Judiciary Law §478.
"I can understand them having done this. But, on the other hand, it is somewhat unfair to my client because this is the first instance of a 487 case in which a violation was found without their having been an actual deception of the court or the other side," Davis said.
Buchwald also forwarded the Rosenberg matter to the Committee on Grievances of the Southern District and to the Appellate Division, 1st Department's Disciplinary Committee. Davis said both matters were on hold and he assumed they would now go forward once the 2nd Circuit finally rules.
The Amalfitanos' attorney, Richard E. Hahn of Liorca & Hahn, did not return a call seeking comment.
Judges Carmen Beauchamp Ciparick, Victoria A. Graffeo, Robert S. Smith, Eugene F. Pigott Jr. and Theodore T. Jones Jr. joined in Read's ruling.