Legal Malpractice

Further Lessons in Legal Malpractice from Kirk

By (Andrew Lavoott Bluestone)

Continuing from yesterday, what is the relationship between legal malpractice litigation and breach of fiduciary duty?  One reflexive answer is that the broad category of legal malpractice litigation, which requires a demonstration of deviation, proximate cause, "but for" causation and damages contains breach of fiduciary duty as a subset.  Often, alternative claims of breach of fiduciary duty are routinely dismissed as included in , or "coextensive" with the legal malpractice claims.

In one species of breach of fiduciary duty area, there is divergence.  Here, plaintiff seeks disgorgement or reimbursement of legal fees paid to the attorney on the theory that there was a fiduciary duty between attorney an client and there was a breach of that duty.  No proof of damages is offered, and none is alleged.  Plaintiff simply wants his fees returned.  Is this proper?

Here is Judge Sweet's reasoning from KIRK , -against-  HEPPT, ESQ., 05 Civ. 9977;UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 80989;September 1, 2009,

"in order to prevail on a cause of action for breach of fiduciary duty in New York, a plaintiff must prove only two elements: (1) the existence of a fiduciary duty between the parties and (2) the breach of that duty by defendant. See January 9, 2008 Opinion at 592. In holding that the Kirks were not required to allege causation, the Court relied on cases from this District, see Official Comm. of Asbestos Claimants of G-l Holding, Inc. v. Heyman, 277 B.R. 20, 37 (S.D.N.Y. 2002) ("Under New York law, the elements of a claim for breach of fiduciary duty are (1) existence of fiduciary relationship and (2) breach of a fiduciary duty."); Schweizer v. Mulvehill, 93 F. Supp. 2d 376, 401 (S.D.N.Y. 2000) ("[A] breach of fiduciary duty may give rise to liability in the absence of damages."), as well as a New York Supreme Court case, Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, et al., 843 N.Y.S.2d 749 (Sup. Ct. 2007).

In Ulico, the New York Supreme Court, New York County, held that unless a legal malpractice claim and a breach of fiduciary duty claim are [*34] "co-extensive," "no proof of damages is required where the remedy that is sought for the breach is forfeiture of compensation." Id. The First Department recently addressed the lower court's application of that "considerably lower standard of recovery" in the breach of fiduciary duty context, clarifying "that to recover under a claim for damages against an attorney arising out of the breach of the attorney's fiduciary duty, the plaintiff must establish the 'but for' element of malpractice, irrespective of how the claim is denominated in the complaint." Ulico Cas. Co. v. Wilson, Elser, Mosokowitz, Edelman & Dicker, 865 N.Y.S.2d 14, 22 (App. Div. 2008) .
 

Full post as published by New York Attorney Malpractice Blog on September 11, 2009 (boomark / email).