Legal Malpractice

Legal Malpractice and Compelled Settlements

By (Andrew Lavoott Bluestone)

Matrimonial law is rife with questions of legal malpractice.  As in most spheres of the law, settlements take place in the majority of cases.  The general rule in legal malpractice is that one may sue the attorney after a settlement if the settlement was "effectively compelled" by the actions of the attorney.  Here is a case which seem to have arisen after the attorney sued for fees.Steven L. Levitt & Assoc., P.C. v Balkin ;2008 NY Slip Op 06640 Decided on August 19, 2008 Appellate Division, Second Department .
 

"The Supreme Court should have denied that branch of the motion of the plaintiff/counterclaim defendant and the additional counterclaim defendant (hereinafter together the respondents) which was for summary judgment dismissing the appellants' first counterclaim alleging legal malpractice, based upon allegations that the respondents misrepresented the scope of the oral stipulation of settlement in the related civil action, and that the settlement of the related civil action was not knowingly and voluntarily made. The respondents made a prima facie showing of entitlement to judgment as a matter of law by submitting evidentiary proof, in the form of the transcript of the aforementioned oral stipulation (see Pacella v Whiteman Osterman & Hanna, 14 AD3d 545; Malarkey v Piel, 7 AD3d 681; Laruccia v Forchelli, Curto, Schwartz, Mineo, Carlino & Cohn, 295 AD2d 321). In response, the appellants raised a triable issue of fact as to whether or not they in fact voluntarily and knowingly entered into the terms of the stipulation, specifically with respect to Ronald's receipt of a credit in the sum of only $500,000, rather than in the sum of $937,000, from Karen's share of her equitable distribution award. The appellants raised a triable issue of fact by showing that Ronald, in response to a question posed by the court during the proceeding in which the stipulation was placed on the record, changed his response from "no" to "yes," when asked by the court if he understood that it would "not entertain any setting aside of the [settlement] without a showing of extreme circumstances." Ronald explained, in an affidavit, that he changed his answer at the explicit instruction of his attorney, Steven L. Levitt, the plaintiff's principal. This change in his answer was allegedly based upon statements in the record that the settlement of the related civil action would "be effective as of the date of execution of the documents," and not the date of the court appearance. Ronald averred that he understood that "[t]he formal stipulation of settlement" would reflect his attorney's representation to him that the misstated sum of $500,000 was to be corrected to $937,000, that the correction would be worked out when the stipulation was put on paper, and that "[i]t would all be fixed' later."

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Full post as published by New York Attorney Malpractice Blog on August 27, 2008 (boomark / email).