Town of Amherst v. Weiss

This appeal addresses the tolling of the statute of limitations in a legal malpractice action under the continuous representation doctrine. This appeal also considers whether an attorney who was hired by the Defendant-attorney to assist in the matter leading to the alleged malpractice had sufficient privity of contract with the client to be amenable to suit for legal malpractice as well. The Plaintiff, the Town of Amherst (the “Town”), hired the Defendant-attorney, Weiss, to investigate bringing disciplinary charges against one of the Town’s employees. Weiss then hired Gladl (together, “Defendants”), another attorney, to assist in bringing the charges. The two attorneys did work for the Town, including drafting the charges against the employee and presenting evidence on behalf of the Town at a disciplinary hearing before the Town Board. The hearing resulted in the termination of the employee, and the Defendants drafted the Town Board’s resolution to terminate the employee.

The employee challenged the termination, alleging that the Town Board had not properly appointed the hearing officer. The resolution and the first hearing were annulled, and a second hearing was required. The Town again retained the Defendants to represent the Town in the second hearing in order to, as stated by the court, “correct the legal error resulting in the need to nullify the first hearing and initial . . . terminat[ion of] the employee.” Town of Amherst v. Weiss, 120 A.D.3d 1550, 993 N.Y.S.2d 396, 399 (4th Dep’t. 2013). The Defendants prosecuted the employee at the second hearing and drafted another resolution. The employee challenged the second termination as well, and the Town again retained the Defendants to represent the Town and defend its decision to terminate the employee in a proceeding the Town expected the employee to initiate.

The Town sued the Defendants to recover the costs and expenses relating to the first annulled hearing, alleging that the Defendants were negligent in not advising the Town regarding proper appointment of the hearing officer. Defendant Weiss moved for summary judgment to dismiss the complaint, arguing that the action was time-barred by the three year statute of limitations for legal malpractice. Defendant Gladl moved to dismiss for the same reason, and also argued that he did not have sufficient privity of contract with the Town to be amenable to suit for legal malpractice. The Supreme Court granted Defendants’ motions for summary judgment. The Town appealed, and the Appellate Division, Fourth Department, reversed, holding that triable issues of fact existed as to whether the statute of limitations was tolled by continuing representation of the Town by the Defendants.

The court held that the Defendants’ doing work for the Town relating to the second hearing and resolution raised triable issues of fact as to whether that representation “‘pertain[ed] specifically to the matter in which [Defendants] committed the alleged malpractice[,]’” and therefore whether there existed continuous representation, tolling the statute of limitations. Weiss, 993 N.Y.S.3d at 399 (quoting Shumsky v. Eisenstein, 726 N.Y.S.2d 365, 369 (2001)). Had representation relating to the initial matter ceased after the first hearing, the statute of limitations would have run since the alleged malpractice was committed on the date of the improper first hearing. However, the court held that it could not say, as a matter of law, that the Defendants’ subsequent acts were not so interrelated to the initial matter as to constitute continuing and interconnected representation related to terminating the employee. Therefore, triable issues of fact existed as to whether the separate retainer agreements pertained to separate and distinct matters, or whether they pertained to the ongoing initial matter. Since questions existed on the issue, the court held that summary judgment was improper.

The court also held that the Town submitted enough evidence to raise a triable issue of fact as to whether there was actual privity of contract (or a relationship close enough to actual privity) between Gladl and the town to make Gladl amenable to suit, and that summary judgment on that ground was also improper.

993 N.Y.S.2d 396 (4th Dep’t. 2014)

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Grace v. Law

This appeal addresses whether a client’s failure to appeal the underlying action bars the client’s legal malpractice claim, an issue of first impression for the court. In October 2002, the plaintiff, John W. Grace began receiving treatment from Dr. Shoba Boghani for an eye condition at the Veteran’s Administration Rochester Outpatient Clinic. After Dr. Boghani cancelled the plaintiff’s July 2003 appointment, he was diagnosed with neovascular glaucoma during the next appointment, which was not until approximately one year later. This condition resulted in blindness in his left eye. After learning that the blindness may have been prevented if diagnosed sooner, the plaintiff hired defendants Robert L. Brenna, Jr. and Brenna, Brenna & Boyce, PLLC (the Brenna defendants) and initiated an administrative proceeding against the VA for its failure to reschedule an appointment sooner.

Delays in the proceeding led the Brenna defendants to recommend plaintiff retain Michael R. Law and Phillips Lytle LLP (the Law defendants) to pursue a medical malpractice action against the VA, but soon after the Law defendants initiated the action in federal court, they discovered a conflict of interest: Dr. Boghani was primarily employed by the University of Rochester, one of the their existing clients. Thereafter the plaintiff returned to the Brenna defendants for representation. The plaintiff added Dr. Boghani and the University of Rochester to the existing claim against the VA, but the United States District Court found that the action was time-barred and granted defendant’s motion for summary judgment. The court also found that since Dr. Boghani was an independent contractor, there was no jurisdiction for plaintiff’s claim that the VA Clinic was liable for the Dr.’s actions. The only surviving claim was that the VA was liable for medical malpractice for failing to reschedule the plaintiff’s appointment sooner.

After the Brenna defendant’s informed the plaintiff that success on this claim was unlikely, the plaintiff retained other counsel and brought an action in state court against the Brenna and Law defendants for legal malpractice for failing to bring suit against Dr. Boghani and the University in a timely fashion.

Here, the Court adopted the plaintiff’s “likely to succeed” standard in determining whether his claim was barred because of his failure to pursue an appeal for the underlying medical malpractice claim over the defendants “nonfrivolous or meritorious” standard, which would bar a legal malpractice claim when the plaintiff failed to pursue any appeal that a reasonable attorney would pursue. The Court held that the “likely to succeed” standard would require a plaintiff to, prior to commencing a legal malpractice claim, bring an appeal for the underlying action if he or she is likely to succeed on that claim; if not likely to succeed, the plaintiff would be free to pursue a legal malpractice claim without appealing the underlying action. Under this standard, the Court held that the defendants failed to meet their summary judgment burden, that the plaintiff raised a triable issue of fact regarding the statute of limitations, and affirmed the Appellate Division’s decision to deny the defendant’s motion for summary judgment.

997 N.Y.S.2d 334 (N.Y. 2014)

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Survey: 2012 Professional Responsibility

Survey of New York Professional Responsibility for 2011–2012.

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James T. Townsend practices in Rochester at Remington, Gifford & Williams, LLP, advising small businesses and their owners and attorneys on professional responsibility matters; he is a member of the New York State Bar Association Ethics Committee and has been the Chair of the Monroe County Bar Association Ethics Committee; he has chaired the Seventh Judicial District Attorney Grievance Committee; he has presented in several state and local programs regarding ethics; and he has been a guest speaker on several occasions. Mr. Townsend also wishes to acknowledge Edward H. Townsend, IV, Esq., an Associate with the Harter, Secrest & Emery, LLP, law firm, for his editorial assistance.

New York Court of Appeals: People v. Solomon

This case dealt with the question of whether a lawyer can, with the consent of his client, represent both his client, and, in an unrelated matter, one of the prosecution’s witnesses against his original client. The defendant in this case, Solomon, was charged with raping his daughter over a four year period.  The lawyer that was representing the defendant also represented Kuebler, one of the police officers who had interviewed the defendant after his arrest.  Prior to the trial, the attorney informed the judge that he represented Kuebler in an unrelated civil matter, but that the defendant had been informed of the situation and had consented to the representation.  The judge asked the defendant if it was correct that he consented to the representation, which the defendant affirmed.  Kuebler testified at trial that, in an interview, the defendant had confessed to having sex with his daughter at least once.  The attorney for the defendant, and for Keubler in the second matter, was able to cross-examine Kuebler at trial.  The defendant was convicted.  After the trial, the defendant appealed on the ground that the lawyer’s conflict had denied him effective assistance of counsel.

The Court of Appeals held that the defendant was denied effective assistance of counsel.  In a criminal matter, the defendant may waive an attorney’s conflict, “but only after an inquiry has shown that the defendant ‘has an awareness of the potential risks involved in that course and has knowingly chosen it.’”  People v. Gomberg, 38 N.Y.2d 307, 313-314, 342 N.E.2d 550, 554 379 N.Y.S.2d 769, 775 (1975).  The consent in this case was inadequate where the inquiry into the nature of the defense counsel’s simultaneous representation was not even placed on the record.  However, the Court explained, inadequate representation is not enough to require reversal.  There must also be an actual conflict of interest, not just a potential conflict of interest.

A potential conflict of interest may arise when an attorney represents co-defendants or both a client and a prosecution witness.  However, in neither case will there be an actual conflict of interest, per se.  An actual conflict of interest arises when the conflict has a “‘substantial relation to the conduct of the defense.’”  People v. McDonald, 68 N.Y.2d 1, 9, 496 N.E.2d 844, 847, 505 N.Y.S.2d 824, 827 (1986).  It is not necessary to look into the actual quality of the representation, only whether an actual conflict existed.  In this case, the lawyer simultaneously owed a duty of loyalty to both the defendant on trial and to the police officer being cross-examined.  This represented an actual conflict and required reversal.

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20 N.Y.3d 91, 980 N.E.2d 505, 956 N.Y.S.2d 457 (2012).

New York Court of Appeals: In the Matter of Galasso

Respondent, Peter J. Galasso, was a partner at the law firm Galasso & Langione, LLP.  Anthony Galasso, the respondent’s brother, worked as the firm’s bookkeeper and office manager.  Over a period of three years, Anthony Galasso misappropriated funds from and between two different accounts—an escrow account with four million dollars and an Interest on Lawyer Account (IOLA)—after altering the account application to permit him to act as a signator.  The misappropriation was not detected for three years because of minimal oversight over Anthony Galasso’s activities and because of his practice of switching funds back-and-forth between the two accounts, while removing some for himself.  Anthony Galasso pled guilty to grand larceny, and the Nassau County District Attorney’s Office submitted its conclusions to the Grievance Committee that no one else had participated in or knew about the misappropriation.

Nevertheless, the Grievance Committee charged the respondent with ten charges of professional misconduct: four of the charges alleged breach of fiduciary duty to safeguard client funds, three of the charges alleged failure to supervise a nonlawyer employee resulting in misappropriation of client funds, one charge alleged unjust enrichment by use of funds for personal benefit, one charge alleged failure to provide appropriate accounts to clients with respect to escrow funds, and one charge alleged failure to timely comply with the lawful demands of the Committee.  The Special Referee sustained all ten charges, and the appellate division affirmed.  The respondent was suspended from practicing law for two years, resulting in this appeal.

The issue before the Court of Appeals was whether the respondent’s motion to dismiss the ten charges alleging misconduct should have been granted.  The Court held that nine of the ten charges should be affirmed, but modified as to the charge alleging a failure to timely comply with the Grievance Committee’s lawful demands for information.

In affirming the nine charges, the Court first stated that an attorney has a clear duty to safeguard client funds.  The Court stated that an attorney has a fiduciary relationship with the clients, which requires an attorney to act with a “high degree of vigilance” to ensure that the funds placed in escrow are returned to the clients.  Here, the respondent failed to establish adequate procedures to detect misappropriation by placing too much control over the accounts with a non-lawyer.

The Court also reasoned that there was, at one point, a $5,000 discrepancy in the escrow account.  Respondent allowed Anthony Galasso to resolve the issue.  The Court stated that this type of discrepancy should have been alarming to a reasonably prudent attorney.  Any delegation of authority should have been done with more oversight, but the respondent failed to properly supervise the employee.  Therefore, the disciplinary action was warranted and was sustained for the first nine counts.

Finally, in modifying the last charge of failure to comply, the Court found that there was no evidence to support the charge. When the respondent could not immediately meet the demands, he notified the Committee, explained his reasons why, and stated that he would comply at the earliest opportunity.  The Court found the respondent complied to the best of his ability and remitted the case to the appellate division for it to reconsider whether the suspension imposed was still appropriate.

19 N.Y.3d 688, 978 N.E.2d 1254, 954 N.Y.S.2d 784 (2012)

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Survey: 2011 Professional Responsibility

James Townsend provides an overview of Professional Responsibility in the state of New York between July 1, 2010 and June 30, 2011.  He discusses Advertising, Social Media, Cloud Computing, Electronic Communications, In-House Counsel Rules, Conflicts of Interest, Privilege, Fiduciary Obligations, Disclosure, Improper Solicitation, and Reporting Misconduct.

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Mr. Townsend is the managing partner of Remington, Gifford, Williams & Colicchio, LLP, a small general civil practice firm in Rochester; he is a member of the New York State Bar Association Ethics Committee and a member and immediate past chair of the Monroe County Bar Association’s Ethics Committee; he has chaired the Seventh Judicial District Attorney Grievance Committee; he has presented in several state and local programs regarding ethics; and he has been a guest speaker on several occasions.

Survey: 2010 Professional Responsibility

James Townsend provides an overview of Professional Responsibility in the state of New York between July 1, 2009 and June 30, 2010.  He discusses the protection of confidences, advertising and solicitation, judiciary law, disciplinary matters, and disqualification for conflict of interest.

View Full PDF.

Mr. Townsend is the managing partner of Remington, Gifford, Williams & Colicchio, LLP, a small general civil practice firm in Rochester; he is a member of the New York State Bar Association Ethics Committee and a member and immediate past chair of the Monroe County Bar Association’s Ethics Committee; he has chaired the Seventh Judicial District Attorney Grievance Committee; he has presented in several state and local programs regarding ethics; and he has been a guest speaker on several occasions.