Legal Malpractice

The Morris Eisen Saga Continues in the Fee Realm

By (Andrew Lavoott Bluestone)

Landau P.C. v. Goldstein is the latest chapter in the Morris Eisen saga.  Once king of the Woolworth Building, Morris Eisen PC was perhaps the largest/most powerful plaintiff's personal injury law firm in NYC.  The firm had a full floor there, comprising half a city block.  Mornings (6am) saw a gathering of trial attorneys having breakfast and being sent to the boroughs, inner and outer each day for a new multi-million dollar trial.

It ended badly, of course, with disgrace and jail.  But, attorney fee litigation, resilient and agile as money its self, lives on.  Here, some 15 years after the disgrace, is more litigation over division of fees.

"Defendant Lloyd F. Goldstein ("Goldstein") moves for an order dismissing this action, with prejudice, on the grounds that it is time barred. He also seeks costs and sanctions. The underlying complaint claims that prior to the time, Morris J. Eisen ('Eisen"), an attorney, was disbarred from practicing law in 1992, he referred certain cases to Goldstein, pursuant to an understanding that Goldstein would pay Eisen a "percentage of the legal fees earned as remuneration for [Eisen's] uncompensated work, disbursement expended, labor and services performed in connection with said cases prior to the disbarment of [Eisen]." Eisen and his alleged successor in interest have asserted causes of action for breach of contract (first cause of action), unjust enrichment (second cause of action), under Judiciary Law §475 (third cause of action) and an accounting (fourth cause of action). Goldstein interposed an answer denying the material allegations of the complaint and asserting various affirmative defenses, including the statute of limitations.

The parties agree that a six year statute limitations applies in this case. They differ on when the statute of limitations accrued. Goldstein argues that these matters date back 20 years or more and are therefore barred by the applicable statute of limitations. Plaintiffs, however, are no strangers to this issue, having litigated it in at least one prior case brought by them against other attorneys. The rule of law is that the statute of limitations for the breach of contract claims accrue when defendants received fees for the referred cases and refused demands for payment and that the statute of limitations for any quantum meruit recovery began to run when such cases were disposed of. Eisen v. Feder, 47 AD3d 595 (1s dept. 2008).

At bar, the only demand for payment was made to Goldstein by letter dated January 10, 2003. The demand included some, but not anywhere near the number of, cases that are the subject of he underlying action. The action was brought within six years of the demand. Consequently, the first cause of action, for breach of contract, is not barred by the statute of limitations. Goldstein argues that the demand itself was made many years after the alleged operative events. This argument may go to Goldstein other defenses, like laches, (see: Charles v. Charles, 296 AD2d 547 [2nd dept. 2002]; Bailey v. Chernoff, 45 AD3d 1113 [3rd dept. 2007]). It does not affect the accrual of the statute of limitations."

Full post as published by New York Attorney Malpractice Blog on August 18, 2010 (boomark / email).