Legal Malpractice

Its Not Legal Malpractice, but Breach of Fiduciary Duty When Defendant is Not Even an Attorney

By (Andrew Lavoott Bluestone)

It does not happen often, but non-lawyers sometimes come to represent clients.  An impostor?  A simple clerical mistake?  We don't know how it happened in this case, but in Natural Organics Inc. v Anderson Kill & Olick, P.C. ;2009 NY Slip Op 08472 ;Decided on November 17, 2009 ;Appellate Division, First Department "Plaintiff alleged that it retained defendant law firm to
bring an action against an insurance company. After several years of litigation, plaintiff agreed to settle the matter for $750,000, which was less than the $1.3 million claimed value of the lawsuit. Several years after the settlement, the law firm informed plaintiff that Brian Valery, who had held himself out as an attorney and worked on plaintiff's case, was in fact not licensed to practice law. Plaintiff then brought this action, alleging it would have obtained a more favorable result in the insurance litigation if the firm had exercised more care with regard to Valery's employment. The complaint sought damages for the difference between the purported $1.3 million value of plaintiff's insurance claim and the $750,000 settlement amount, as well as all of the legal fees billed by the law firm for the entire matter. "

"That part of the breach of contract cause of action alleging a breach of professional standards and seeking damages for the alleged shortfall from the settlement and all of plaintiff's legal fees is dismissed as duplicative of the malpractice claim (see Rivas v Raymond Schwartzberg & Assoc., PLLC, 52 AD3d 401 [2008]). However, to the extent that plaintiff's [*2]breach of contract claim rests on the fees it paid for Valery's services, plaintiff has pleaded sufficient facts to state a claim. The complaint alleges that the law firm continuously held out Valery as a licensed attorney and billed in excess of $70,000 for his services, even though it is undisputed that he was, in fact, not an attorney. At this early stage of the proceedings, it cannot be said that these particular damages are too speculative (see Fielding v Kupferman, 65 AD3d 437, 442 [2009]).

Full post as published by New York Attorney Malpractice Blog on November 20, 2009 (boomark / email).