Duty to Investigate and the Statute of Limitations Discovery Rule

Thu, 11 Mar 2010 05:26:03 GMT

Brizak v. Needle 239 N.J. Super. 415 (App. Div. 1990)

Student Contributor: Maninder (Meena) Saini

NJ Underlying Medical Malpractice Action

Facts: Plaintiff-client commenced a malpractice lawsuit against defendant-attorney, alleging the defendant was negligent by failing to file a medical malpractice claim before the expiration of the statute of limitations (“SOL”). The defendant argued that the SOL did not start until there was expert opinion recognizing that medical malpractice had occurred. The facts are as followed: In 1981, plaintiff sustained an arm injury and was treated by Dr. Shafi. Instead of conducting surgery, the doctor simply placed her arm in a hanging cast. On December 5, 1983, plaintiff retained defendant to pursue an action against Dr. Shafi because she was still suffering from the affects of her arm injury. In May 1984, the defendant requested a copy of the hospital records. Next, in March 1985, the defendant obtained an opinion from a radiologist who advised defendant that no malpractice transpired. In June 1987, defendant obtained another medical expert opinion that found that malpractice had occurred.

Issue: When does the “discovery” rule apply in any given case?

Rule: The “discovery rule” tolls the statute of limitations when one “is either unaware that he has sustained an injury, or although aware that an injury has occurred, he does not know that it is, or may be, attributable to the fault of another.” When one knows or has reason to know of the injury, the statute of limitations starts to run.

Issue: Whether an attorney has the duty to investigate the basis of their client’s claim?

Rule: An attorney must undertake a reasonable diligent investigation to determine if there is a reasonable basis for commencing an action.

D]efendant’s clearly erroneous advice to plaintiff that she need not be concerned about the time limitations until she found a physician to support her claim was itself a sufficient basis for linking his negligence to her failure to commence a timely action against the doctor.

The SOL started in December 1983 when the plaintiff had suspicion of the malpractice and retained a lawyer.

Lesson: The defendant was not diligent in his investigation of medical malpractice. An attorney has a duty to take any steps reasonably necessary to properly handle the case, which includes the duty to investigate and to file any action necessary for recovery within the applicable time period.

Duty to Communicate and Explain Significance of Contract Terms

Wed, 10 Mar 2010 22:48:17 GMT

Conklin v. Hannoch Weisman, 281 N.J.Super. 448 (App. Div. 1995)

Student Contributor: Maninder (Meena) Saini

NJ Underlying failure to explain contract terms leading to loss of equity in realty.

Facts: A New Jersey partnership, Conklin Farms (plaintiff), was represented by Kemph and his law firm, Hannoch Weisman, P.C. (defendants) in the sale of undeveloped land. Initially, plaintiff used that land for mining, but due to rezoning laws, the plaintiff sold the land to a developer because the value of their land increased significantly. Through advice from the defendants, the plaintiff agreed to subordinate the mortgage to institutional construction-money mortgages. The sale closed and the development project failed. The property was foreclosed by the mortgage lenders and left no equity for the plaintiff. In addition, the plaintiff’s buyers and guarantors all filed for bankruptcy, leaving the plaintiff with a substantial loss. The plaintiff then filed a lawyer malpractice lawsuit claiming that the defendants’ explanations to plaintiff of the meaning and risks of the subordination agreement were inadequate and inaccurate.

Issue: Did the defendants adequately inform the plaintiff of the meaning and risks of the subordination agreement?

Ruling: The appellate court held that the defendant was negligent in representing the plaintiffs in connection with explaining subordination and the risks associated with it.

An attorney has a legal duty to explain to their clients the meaning of an agreement and to further warn them of its risks, even if the risks are not reasonably foreseeable. The duty to advise the client fully and truthfully is inherent in the attorney-client relationship.

Lesson: An attorney must always fully and truthfully explain any agreements into which its client is entering. Further, the attorney must alert its clients of all risks so they can make an informed decision. This rule is even more important whenever the client raises any doubt as to the agreement because the court may instruct the jury to apply a “subjective standard” in deciding the negligence claim; that is, would the plaintiff, not the objective "prudent person", have declined to enter into the agreement knowing all the risks? This subjective standard is easier to overcome and may be damaging to the attorney’s case.

Note: Make sure to see the NJ Supreme Court decision in this case which held that to prove proximate cause in a legal malpractice case, the negligence of the attorney need be a "substantial factor" in causing the damages. 145 N.J.395 (1996)

Touro and Other Area Law Schools Participating in Lobby Day to Repeal "Don't Ask Don't Tell"

Tue, 09 Mar 2010 15:53:56 GMT

Touro Law Center is participating in the Servicemembers Legal Defense Network Washington, D.C. Lobby Day, Friday, March 19, 2010. Students, faculty, and staff are invited to join a group from area law schools to travel to D.C. to lobby members of Congress to repeal "Don't Ask Don't Tell." Fordham Law is coordinating a bus (air conditioned, reclining seats, toilet, sound system, dvd player) which

Twitter Updates for 2010-03-09

michael@michaelricelaw.com (Michael Rice) — Tue, 09 Mar 2010 15:00:00 GMT

I've only been here for a few weeks, and my blood already thinned out. I'm freezing. It's 60 degrees. # Powered by Twitter Tools Share on Facebook var button = document.getElementById('facebook_share_link_915') || document.getElementById('facebook_share_icon_915') || document.getElementById('facebook_share_both_915') || document.getElementById('facebook_share_button_915'); if (button) { button.onclick = function(e) { var url = this.href.replace(/share\.php/, 'sharer.php'); window.open(url,'sharer','toolbar=0,status=0,width=626,height=436'); return false; } if (button.id === 'facebook_share_button_915') { button.onmouseover = function(){ this.style.color='#fff'; this.style.borderColor = '#295582'; this.style.backgroundColor = '#3b5998'; } button.onmouseout = [...]

I've only been here for a few weeks, and my blood already thinned out. I'm freezing. It's 60 degrees. #

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Early reactions to Milavetz around the blogospher

michael@michaelricelaw.com (Michael Rice) — Tue, 09 Mar 2010 13:12:13 GMT

I took a peak around the internet to see what bloggers were saying about today’s Supreme Court decision in Milavetz, Gallop, & Milavetz, P.A. v. United States, no. 08-1119. Bob Lawless at the popular Credit Slips blog seems satisfied that the decision came out the way he expected, and chastised early reports for [...]

I took a peak around the internet to see what bloggers were saying about today’s Supreme Court decision in Milavetz, Gallop, & Milavetz, P.A. v. United States, no. 08-1119.

Bob Lawless at the popular Credit Slips blog seems satisfied that the decision came out the way he expected, and chastised early reports for their inaccuracies. By contrast, M. Jonathon Hayes at the BankruptcyProf Blog was “shocked” given his read of the oral argument.

On the other hand, Scott Riddle at the Georgia Bankruptcy Blog was surprised that lawyers could be called anything but debt relief agencies under BAPCPA. Stephen Sather, an Austin bankruptcy, lawyer yawned along with Riddle on the designation, but made the point that BAPCPA survived its first constitutional salvo.

Steve Jakubowski at Bankruptcy Litigation Blog took the opportunity to remind us that today would have been Holmes’ 169th birthday. While Washington State bankruptcy lawyer Jay Jump lamented the decision as a lose-lose proposition for lawyers and their clients alike and rings the free speech warning siren in the process (maybe rightly) at the National Bankruptcy Forum.

As for the McLeod Law Offices, they are probably too busy to read the opinion, at least until the weekend. After all, if you haven’t heard, bankruptcy firms debt relief agencies are a little busy these days–just a little.

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Malpractice Trap: First Mortgage Liens

Tue, 09 Mar 2010 11:45:03 GMT

Commonwealth Land Title. & Citicorp Mortgage. v. Kurnos 340 N.J.Super. 25 (App. Div. 2001)

NJ Underlying mortgage refinance

Student Contributor: Maninder (Meena) Saini

Facts: New Jersey property owners (the borrowers) wanted to refinance their home mortgage and retained attorney/defendant (Kurnos). The plaintiffs to this action are Citicorp Mortgage (the bank) and Title Insurance Company (the title company). The defendant was to refinance the property by discharging the existing liens on the property. The title company was to provide title insurance certifying that the bank’s mortgage was the first lien on the property. One of the existing liens on the home was held by Midlantic National Bank (Midlantic). Midlantic issued a letter to the defendant indicating that a written statement instructing Midlantic to close the account was required. However, no letter was sent and Midlantic’s mortgage became the first lien on the property. So, the bank’s mortgage was actually the second lien instead of the first. In June 1991, within nine months of the error, the title company knew of the defendant’s error. The borrowers then withdrew money on their available line of credit from Midlantic. In 1996, the borrowers defaulted on the loan, forcing a foreclosure. The bank paid Midlantic the outstanding balance in order to protect their interest and then filed a malpractice lawsuit against the defendant in 1998, alleging that he failed to secure the bank’s first lien position.

Issue: When did the six-year statute of limitation for the attorney’s malpractice start to run?

Ruling: The six-year statute of limitation commenced at the time the negligent conduct was discovered by plaintiffs even though monetary damages were not readily ascertainable at the moment of discovery. The appellate court held that the statute began running in June 1991 when the title company first became aware of the attorney’s error.

The cause of action accrues when the mortgagee knows or has reason to know that its lien has been impaired or endangered by the defendant’s negligence. At that time of negligent discovery, the mortgagee has suffered a legal injury.

Lesson: The lawyer committed malpractice by failing to secure the plaintiff’s first lien on the property. At the moment an individual discovers an error, a legal injury had occurred even though monetary damages are not present. According to N.J.S.A. 2A:14-1, after six years of discovery, the client is barred from collecting damages.

Fearsome footnote two

michael@michaelricelaw.com (Michael Rice) — Tue, 09 Mar 2010 05:31:19 GMT

I was reading Ninth Circuit BAP case Dunn v. Chase Home Finance, LLC (In re Dunn), no. 09-1176 (9th Cir. B.A.P. Feb. 4, 2010) when I came across footnote two. It says: Dunn has provided us with little in the way of excerpts of record to work with. For instance, she did not provide us with [...]

I was reading Ninth Circuit BAP case Dunn v. Chase Home Finance, LLC (In re Dunn), no. 09-1176 (9th Cir. B.A.P. Feb. 4, 2010) when I came across footnote two. It says:

Dunn has provided us with little in the way of excerpts of record to work with. For instance, she did not provide us with copies of her bankruptcy schedules and statements, nor do we have the transcripes . . . nonetheless [we] have independently reviewed [the electronic docket] . . . we have done our best to reconstruct what what transpired . . . [the appellant] bears the consequences of failing to meet [her] burden.

I’m pretty sure it was an oversight on the lawyer’s part, and I’m pretty sure the omissions alone would not prejudice the case too much, but this is the stuff that makes a geeky law student’s mouse finger twitch.

There are so many little twists and turns in procedure, so many chances to make a mistake. I hope I never get my own footnote two from a panel of appellate judges. Or any judge. Or equity partner, senior partner, junior partner, senior associate, associate, paralegal, or even copier repair guy. I hate making mistakes.

Somewhat interestingly (again, to a geeky law student), the Bankruptcy Appellate Panel Judges, Markell, Montali, and Pappas, cited to Ehrenberg v. Cal. State Fullerton (In re Beachport Enter.), 396 F.3d 1083 (9th Cir. 2005) for the seeming proposition that they could reconstruct the transcripts. I wonder what that case says…

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Mr. Nice Guy Wins in the End.

Mon, 08 Mar 2010 22:00:51 GMT

Schenck v. K.E David, Ltd. 446 Pa.Super. 94, 666 A.2d 327 (1995)

PA Underlying Settlement paid by lawyer on behalf of client

Student Contributor: Maninder (Meena) Saini

Facts: Plaintiff/attorney, Schenk claimed that defendant/client, K.E. David, Ltd. was unjustly enriched when he refused to reimburse the plaintiff with $32,000 that the defendant owed to satisfy a settlement agreement between the defendant and the Commonwealth. Plaintiff represented defendant and negotiated a settlement amounting to $82,000. In the agreement, the Commonwealth was to collect $32,000 from another settling defendant, who owed the defendant that amount. Unfortunately, the settling defendant died before paying the debt. So, the law firm advanced the outstanding amount to the Commonwealth on behalf of the client. The client/defendant then refused to reimburse the law firm. So, the law firm sued for reimbursement. The defendant counterclaimed for legal malpractice because the plaintiff failed to explain that the defendant would have to pay the $32,000 if the other defendant was unable to pay. The jury found that plaintiff did not commit malpractice and held the client/defendant had been unjustly enriched. The defendant then appealed.

Issue: Was the lawyer entitled to get back what he paid on behalf of the client in view of the clients not understanding the ramifications of the settlement agreement?

Ruling: The appellate court found that it was unjust for the defendant to retain the benefits of the law firm’s payment to the Commonwealth, especially after the plaintiff/lawyer obtained successful results for the defendant.

The law will find that a quasi-contract exists when unjust enrichment is found. The beneficiary will be required to pay the plaintiff the value of the benefit conferred.
The elements of unjust enrichment are:
• Benefits conferred on defendant;
• Appreciation of such benefits by defendant; and
• Acceptance and retention of such benefits under circumstances that make it inequitable for defendant to retain the benefit without payment of value.

Lesson: The lawyer’s work was successful for the client. What if the underlying matters were not successful because the lawyer was negligent? Would the lawyer be entitled to reimbursement of the monies he advanced? In applying the “unjust enrichment” doctrine, one must focus on whether the enrichment of the defendant is unjust and not on the intention of the parties. Accordingly, an attorney should consider using the theory of “unjust enrichments” to seek full compensation for work performed.

Furor Over the Cheney Ad

Mon, 08 Mar 2010 21:13:21 GMT

The furor generated by the Liz Cheney ad – or rather the organization that Cheney run, Keep America Safe – is interesting to me. (Ad and story here)

Isn’t it all just a question of whether a current client should consent to a potential conflict with the interests of a former client? Or is it really [...] No related posts.

The furor generated by the Liz Cheney ad – or rather the organization that Cheney run, Keep America Safe – is interesting to me. (Ad and story here)

Isn’t it all just a question of whether a current client should consent to a potential conflict with the interests of a former client? Or is it really something more?

By now, you’ve probably heard about this discussion (or rather shouting match). The organization produced an ad, demanding to know the identities of those current Justice Department lawyers who were hired by the Attorney General, are now engaged in formulating detainee policy (or prosecuting detainees), and who formerly represented alleged terrorists in custody. The furor has centered on the risk this ad has of demonizing (McCarthy-style) those who defend bad people:

The ad—in one frame, a headline refers to the DOJ as the “Department of Jihad”—has been denounced as McCarthyism by liberal critics. It’s also being condemned by a growing number of former George W. Bush administration lawyers. Ted Olson, who served as Bush’s solicitor general, says he has the “greatest respect” for lawyers who represented Gitmo clients; they were acting “consistent with the finest traditions of the legal profession,” he says. He calls the attacks on one of the targets, Deputy Solicitor General Neal Katyal, “outrageous.” Four years ago, Katyal represented Salim Ahmed Hamdan, Osama bin Laden’s former driver, in a landmark Supreme Court case that overturned the military tribunals that Bush created. (Katyal did a “marvelous job” on the case, says Olson.)

(links omitted)

I get that point. But I also get the importance of asking the question: does their prior representation of detainees impact the ability of these lawyers to carry out their duty in the Justice Department?

Setting aside the question of whether the ad itself is the most constructive way to raise this question, people have a right to ask the queston, right?

These lawyers are representing us today. Because their prior representation of the detainees could present a conflict isn’t the question merely one of an actual or potential conflict with a former client? If it is, shouldn’t it be disclosed and consented to by the lawyers’ clients? Or is the fact that they’re working for the government change the calculus?

It doesn’t work like that, I know. But raising the question is a way for a democratically-governed people to shed light on the potential conflict and, in a manner of speaking, consent to it. Is it not?

Setting aside whether there can really be a constructive dialogue over this or whether there is really a way to determine whether people consent to something like this, raising the question is not unreasonable it seems to me. Just as it’s not unreasonable to push back with concern asking the question at all (let alone in such a provocative fashion) would result in the demonization of those who have represented the accused.

Is it even possible to raise the point without unleashing the fury?

No related posts.

Having a Milavetz for lunch

michael@michaelricelaw.com (Michael Rice) — Mon, 08 Mar 2010 19:38:56 GMT

I’m skimming one of the long-awaited Supreme Court bankruptcy cases, Milavetz, Gallop, & Milavetz, P.A. v. United States, no. 08-1119, a Justice Soyomayor opinion, for lunch at a Starbucks at Park Central Mall in Phoenix. By now, far more intelligent pundits than I have surely commented on it. Hopeful they are not confused by one of [...]

By now, far more intelligent pundits than I have surely commented on it. Hopeful they are not confused by one of it’s most important holdings like I am.

In ruling that BAPCPA prohibitions do not violate free speech, the Court argued that section 526(a) “prohibits a debt relief agency only from advising an assisted person to incur more debt when the impelling reason for the advice is the anticipation of bankruptcy.”

I’m still confused because I was hoping it would more clearly address the situation where a client says, “I’m thinking about filing for bankruptcy, should I pay my Visa bill considering they will charge a late fee and increased interest rates?”

Doesn’t that incur more debt?

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Recession-Proof Practice Areas: A Program for Law Students and Recent Law School Graduates

Mon, 08 Mar 2010 17:10:43 GMT

A New York City Bar Association Program:This tough legal market demands that you think outside the box, be creative, and consider a variety of practice areas. Attend this program and hear a panel of attorneys discuss several practice areas that concentrate on assisting clients with everyday legal issues. Panelists will also discuss how they have maintained successful law practices in this economy

New York City Bar's Thurgood Marshall Fellowship Program

Mon, 08 Mar 2010 16:55:09 GMT

The New York City Bar Association has announced this year's Thurgood Marshall Fellowship Program. This program provides an opportunity for second and third year minority law students from New York area law schools to work with the Association on community legal services or civil rights projects that are the legacy of Justice Marshall. One student from participating schools will be selected as

Twitter Updates for 2010-03-07

michael@michaelricelaw.com (Michael Rice) — Sun, 07 Mar 2010 15:00:00 GMT

I am intensely jealous of Nick Spitzer # Powered by Twitter Tools Share on Facebook var button = document.getElementById('facebook_share_link_903') || document.getElementById('facebook_share_icon_903') || document.getElementById('facebook_share_both_903') || document.getElementById('facebook_share_button_903'); if (button) { button.onclick = function(e) { var url = this.href.replace(/share\.php/, 'sharer.php'); window.open(url,'sharer','toolbar=0,status=0,width=626,height=436'); return false; } if (button.id === 'facebook_share_button_903') { button.onmouseover = function(){ this.style.color='#fff'; this.style.borderColor = '#295582'; this.style.backgroundColor = '#3b5998'; } button.onmouseout = function(){ this.style.color = '#3b5998'; this.style.borderColor = '#d8dfea'; this.style.backgroundColor = '#fff'; } } }

I am intensely jealous of Nick Spitzer #

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Thinking about adequate protection

michael@michaelricelaw.com (Michael Rice) — Sun, 07 Mar 2010 03:57:36 GMT

One of the most important things a bankruptcy court offers is the so-called automatic stay. One of my bankruptcy professors called it the most powerful tool any lawyer has in any field of law. It stops almost everything, stops it immediately. That collection company has to stop garnishing your wages. The county judge has [...]

One of the most important things a bankruptcy court offers is the so-called automatic stay. One of my bankruptcy professors called it the most powerful tool any lawyer has in any field of law.

It stops almost everything, stops it immediately. That collection company has to stop garnishing your wages. The county judge has to stop that lawsuit. The foreclosure sale on your house stops. Visa cannot so much as dial the phone to call you. Yet, if you owe a bank (or other creditor) for a payment on a car or house, the bank is likely going to be able to convince the bankruptcy court to lift the stay if they can convince the judge that they are not “adequately protected.” Why?

At first, I thought “adequate protection” was Congress’s way of trying to throw creditors a bone. That is, Congress gave a bankruptcy filers a lot of power, but Congress also wanted a way to protect a secured creditor’s collateral.

But when I looked at the legislative commentary, Congress didn’t mention that particular concern in 1978. Instead, it seems like Congress was more concerned about Fifth Amendment Takings issues.

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Legal Malpractice Law Review: Progress Report March, 2010

Sat, 06 Mar 2010 05:24:58 GMT

The Legal Malpractice Law Review is pleased to announce that:

1. Professor Susan Saab Fortney of Texas Tech University School of Law has joined our Editorial Board. Professor Fortney is co-author of LEGAL MALPRACTICE LAW: Problems and Prevention (Thomson/West, 2008), the first law school level casebook in its field.

2. Law Students in Texas Tech Law School’s legal malpractice course have joined with Hofstra Law School students to help build our archive of case summaries so as to provide an ongoing supply of content for readers of the Legal Malpractice Law Review.

3. Our list of outside content Contributors continues to grow, with more and more lawyer professional liability practitioners from across the country wanting to contribute.

4. The Legal Malpractice Law Review went live less than 6 month ago. We are approaching 25,000 visits ("hits") from new and repeat readers.

5. Legal Malpractice Law Review appears to have become the premier one-stop site for anything and everything pertaining to the law governing lawyers.

Please let us know if there is any way we can make the Legal Malpractice Law Review better and more useful to you. Just go to the "Contact Us" box to the left.

"Walk Through the Supreme Court" Program with the Nassau County Bar Association

Fri, 05 Mar 2010 17:07:21 GMT

The Nassau County Bar Association invites you join them, as their guest, at an Orientation and Cocktail Party on Monday, March 15, 2010 at 5:15 p.m., so that you can have a tour of Domus, the beautiful, 75-year old home of the Association, and to learn about the benefits of belonging to this organization. In addition, you will be introduced to some members of our Executive Committee, Board of

Emotional Distress Damages: Tied to the Interest Protected by the Attorney-Client Relationship

Fri, 05 Mar 2010 05:00:01 GMT

Kohn v. Schiappa, 281 N.J. Super. 235 (1995)

NJ Underlying Adoption Action

Student Contributor: Daniel Schick

Facts: Plaintiffs retained counsel to assist them in adopting a child. Defendant's alleged malpractice arose from serving the adoption complaint on the birth parents, thereby erroneously disclosing to them privileged information, including the name and address of the adoptive parents and the adoptee. This breach of confidentiality allegedly caused the plaintiffs to suffer severe emotional distress.

The defendant attorney moved for summary judgment urging that under New Jersey law, recovery for emotional distress is precluded in actions for legal malpractice. Plaintiffs, however, argued that they were entitled to damages for emotional distress, since the attorney-client relationship was never predicated upon the protection of any economic interest.

Issue: Are damages for emotional distress recoverable where an attorney is retained to pursue non-economic claims?

Ruling: Yes. Plaintiffs retained the defendant attorney to handle an adoption, not to seek recovery for an economic loss. If plaintiffs are precluded from asserting and proving the mental anguish and distress purportedly caused by counsel's wrongful disclosure of confidential information, then they are, for all intents and purposes, left without any remedy for counsel’s negligence. Accordingly, affording virtual immunity to negligent attorneys who are retained for non-economic purposes is contrary to the public interest.

Lesson: Damages for emotional distress will be allowed in an action for legal malpractice where the foundation of the attorney-client relationship is something other than the protection of the client’s economic interests.

Recent Articles in Law Student Blogs from LexMonitor

Duty to Investigate and the Statute of Limitations Discovery Rule

Duty to Communicate and Explain Significance of Contract Terms

Touro and Other Area Law Schools Participating in Lobby Day to Repeal "Don't Ask Don't Tell"

Recommended reading for the past few days

Twitter Updates for 2010-03-09

Early reactions to Milavetz around the blogospher

Malpractice Trap: First Mortgage Liens

Fearsome footnote two

Mr. Nice Guy Wins in the End.

Furor Over the Cheney Ad

Having a Milavetz for lunch

Recession-Proof Practice Areas: A Program for Law Students and Recent Law School Graduates

New York City Bar's Thurgood Marshall Fellowship Program

Twitter Updates for 2010-03-07

Thinking about adequate protection

Legal Malpractice Law Review: Progress Report March, 2010

Recommended reading for the past few days

"Walk Through the Supreme Court" Program with the Nassau County Bar Association

Emotional Distress Damages: Tied to the Interest Protected by the Attorney-Client Relationship

Recommended reading for the past few days