Legal Malpractice

In Hard Financial Times, Legal Malpractice Shadows Bankruptcy

By (Andrew Lavoott Bluestone)

Our meme today, again, is that legal malpractice is to be found in all endeavors involving attorneys.  It is no stranger to Bankruptcy proceedings, and in today's case, a verdict is found against a Long Island Bankruptcy attorney.  Mizuno v Fischoff & Assoc. ;2010 NY Slip Op 50064(U) Decided on January 14, 2010 Supreme Court, Suffolk County ;Whelan, J.  demonstrates how plaintiff lost his house when the case could have been saved.  Supreme Court, Suffolk County entered a judgment for plaintiff in a substantial amount.
 

"Can a homeowner who loses his home to foreclosure, after filing four separate bankruptcy petitions, prevail on a legal malpractice claim against his bankruptcy attorney and recoup the remaining equity in the home as damages? This Court not only finds the claim to viable but, based upon this record, holds that a substantial award of damages is appropriate. "

"In order to prevail in an action to recover damages for legal malpractice, a plaintiff must establish both that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, resulting in actual damages to the plaintiff, and that "but for" the attorney's negligence, the plaintiff would have succeeded on the merits in the underlying action or not have sustained any damages (Dupree v Voorhees, _ AD3d _ , 2009 WL 4681166 [2d Dept Dec. 8, 2009]; Ali v Fink, 67 AD3d 935, _ NYS2d _ [2d Dept 2009]; Santiago v Fellows, Epstein & Hymowitz, P.C., 66 AD3d 758, 886 NYS2d 766 [2d Dept 2009]).

Here, it is obvious, from the testimony of defendant's associate, that the provision in the Conditional Order which held that a default would not be protected by the filing of a new petition, was simply forgotten. The legal advise to commence a new bankruptcy proceeding was contrary to the dictates of the May 1, 2000 order and offered no protection to plaintiff, in response to the foreclosing bank's claim that plaintiff was in default of the Conditional Order. Moreover, the defendant's law office just assumed that plaintiff had not complied with the Conditional Order and accepted the representations made by the foreclosing bank's attorney."
 

"With regard to the element of causation, plaintiff has to show that he would not have incurred any damages but for the attorney's negligence. Defendant attempted to show that plaintiff did not have the ability to pay the monthly mortgage payments and offered plaintiff's tax returns for the 1998 (Def. Ex. P), 1999 (Def. Ex. Q), 2000 (Def. Ex. L), 2001 (Def. Ex. M), and 2002 (Def. Ex. O) as evidence of plaintiff's inability to pay. Plaintiff offered bank account statements from December 2001 to April 2002 (Pl. Ex. 8) to demonstrate the ability to pay the monthly payments. Plaintiff also testified that for the year, 2002, the month of July was the only [*6]month that he would have had difficulty making the required payments.

In deciding the issue of causation, the Court need not speculate as to the financial ability of the plaintiff to pay into the future. The sole issue to be determined is whether "but for" the negligence of the defendant, plaintiff would not have lost his home to foreclosure. Here, plaintiff satisfied his burden by the submission of evidence that he could comply with the Conditional Order during the time frame in question, that is, satisfaction of the November 15, 2001 payment by January 15, 2002 and each monthly payment thereafter up to the foreclosure sale date of April 4, 2002. Such evidence satisfied plaintiff's obligation to establish causation.

Having found for the plaintiff on the issue of liability, the Court must address the issue of damages. The object of awarding damages in a legal malpractice action is "to make the injured client whole" (Campagnola v Mulholland Minion & Roe, 76 NY2d 38, 42, 556 NYS2d 239 [1990]). Compensatory damages are generally awarded where a plaintiff can demonstrate that he or she suffered any actual damages (see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 31 AD3d 418, 818 NYS2d 153 [2d Dept 2006]). "

Full post as published by New York Attorney Malpractice Blog on January 26, 2010 (boomark / email).