Failure To Supervise Local Counsel Is Legal Malpractice
November, 2008
In Whalen v. DeGraff, Foy, Conway, Holt-Harris & Mealy, 53 A.D.3d 912, 863 N.Y.S.2d 100, 2008 N.Y. Slip Op. 06342 (3d Dep’t), the Appellate Division reversed the trial court’s denial of Plaintiff’s summary judgment motion which sought to establish that Defendant law firm committed legal malpractice as a matter of law. Plaintiff alleged that Defendant law firm was vicariously liable for the negligence of local counsel retained by Defendant law firm and negligent in failing to supervise local counsel. Id. at 913.
Defendant asserted that its duty to Plaintiff was satisfied once it retained local counsel. Id. The trial court denied both Plaintiff’s and Defendant’s motions for summary judgment. Id.
Defendant law firm secured a Judgment for Plaintiff of over $1,000,000.00. In January, 1995, before that Judgment was satisfied, however, the Judgment-debtor died a resident of Florida. Defendant law firm enlisted the aid of a Florida law firm in April, 1995, to protect Plaintiff’s rights against the Judgment-debtor’s substantial Florida estate. Id. at 912. Initially, Florida counsel was only asked to ascertain whether an estate was established, how to proceed with a claim against it, and the time frame to do so. Id. Florida counsel advised that no estate was established and that it will take no further action unless instructed otherwise by Defendant law firm. Id. Defendant law firm then advised Plaintiff that local counsel was retained to pursue necessary claims against the Judgment-debtor’s estate in order to recover the Judgment. Id.
In early 1996, Defendant law firm learned that the Judgment-debtor’s estate was established and began negotiating with the attorneys for the estate to settle Plaintiff’s Judgment. Id. In late February, 1996, Defendant law firm sent Florida local counsel the information necessary to file a claim against the estate and instructed them to do so. Id. In early 1998, the estate’s attorney advised Defendant law firm that no claim was filed against the estate within the required time period, withdrew all offers of settlement and refused to negotiate further. Id. Plaintiff was unable to recover her Judgment from the estate. Id.
The appellate division discussed the general rule that a law firm is not liable for the acts or omissions of co-counsel or other non-firm attorneys working with the firm, as those attorneys are usually independent agents of the client. Id. at 913. Here, although Plaintiff was advised of Florida counsel’s involvement, she did not solicit them nor enter into a retainer with them. Id. Plaintiff also had no contact with Florida counsel and relied exclusively upon Defendant law firm to recover her Judgment from the Judgment-debtor’s estate. Id. The Court found that under these circumstances, Defendant law firm was responsible for the filing of any claim against the Judgment-debtor’s estate necessary to recover Plaintiff’s Judgment and that Florida counsel was their sub-agent. Id. Defendant law firm was, therefore, obligated to supervise Florida counsel and ensure that Florida counsel took the appropriate action to protect Plaintiff’s interests. Id.
Although there was some question whether Defendant law firm actually directed Florida counsel to file the claim against the estate, the Court found that issue irrelevant to its decision. Id. at 912, f.n. 1.
The Court also addressed another common issue in legal malpractice matters, the necessity of expert testimony to establish the defendant attorney’s failure to meet the standard of care. Id.
The Court found no such testimony necessary here, because Defendant law firm knew of the filing deadline for claims against the Judgment-debtor’s estate but did not even inquire as to the status of the necessary claim for almost two years. Id.
Learning Point
When it becomes necessary to enlist the services of another attorney or firm to properly perform the legal services for which a lawyer was retained, the client’s approval must be obtained and a retainer agreement or letter of engagement must be procured between the client and retained counsel. In the absence of a separate agreement between retained counsel and the client, the attorney originally engaged will be responsible for the acts or omissions of the attorney or attorneys they retained. More importantly, an attorney who procures the assistance of other counsel must be diligent in his oversight of the assisting attorney or risk the consequences of the latter’s actions or omissions.
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