Legal Malpractice

Legal Malpractice and the Real Estate Downturn

By (Andrew Lavoott Bluestone)

A recurring theme of these entries is the ubiquitous nature of legal malpractice.  All roads, it seems, require attorneys to mix a metaphor.  Downturns in the real estate marketplace are no exception.  Here is a story from Law.Com about a legal malpractice case against Quinn Emanuell, a biglaw litigation firm.  This one is from California:

"Quinn Emanuel Urquhart Oliver & Hedges has been hit with a malpractice lawsuit that claims the firm botched a $48.8 million settlement even as it took in some $12 million in contingency fees.

Former client Todd Kurtin, a one-time principal at the real estate concern SunCal Cos., filed the claim earlier this month in Los Angeles Superior Court. In his complaint, Kurtin accuses Quinn Emanuel of negligence for failing to advise him of "the meaning and ramifications of all terms of the settlement agreement" he reached with a former business partner, Bruce Elieff, that unwound their co-ventures.

Under the 2005 settlement, Kurtin was to receive his payout in four installments, but, according to the complaint, wound up getting only two payments and is still owed nearly $23 million not including interest. Kurtin is pursuing claims against Elieff for reneging on the settlement agreement.

The complaint against Quinn Emanuel highlights how -- as a result of a contingency agreement that essentially guaranteed Quinn Emanuel half of any amount recovered up to $20 million and 20 percent thereafter -- the firm has received approximately $12 million in fees for representing Kurtin. That amount is equal to what Kurtin himself has gotten to date from the settlement, which was reached a little more than four months after Quinn Emanuel took on the case.

SunCal, like other real estate development companies, has been hit hard by the downturn in the economy. The company has been plagued with cash flow issues and has had to back out of several projects. Lehman Brothers Holding Inc. was a major backer of the company."

Full post as published by New York Attorney Malpractice Blog on January 06, 2009 (boomark / email).