Legal Malpractice

Waterfront Retaining Wall Leads to Legal Malpractice Retainer Issue

By (Andrew Lavoott Bluestone)

In Supreme Court, New York County, Justice Emily Jane Goodman issued not one but two legal malpractice decisions this week.  We'll cover Koch tomorrow.  Today, Esterman v. Schwartz, New York Slip Op. 2009-31523.

Plaintiffs are a subset of a group of owners of a waterfront Staten island development which suffered retaining wall damage in a storm.  The group was divided into waterfront owners and inland owners, and they did not agree on who had to pay for the retaining wall to be fixed.  Plaintiff's group retained defendant attorneys, and in the end, they were the only group that did not sue the City and other defendants who constructed the wall which failed.

This case is interesting for three reasons.  The first is a question of how parol evidence may affect a limited retainer agreement between attorney and client.  The retainer agreement was only for investigation, not litigation.  The claim was that the attorneys did not file a notice of claim and did not move for permission to file a late notice of claim, although the unaffected waterfront owners who hired other counsel were successful in bringing suit.

Justice Goodman held that in the absence of a merger clause in the retainer agreement [ e.g.,"this is the complete agreement and may not be changed or altered without express written agreement"] parol evidence that the attorneys orally agreed to bring suit was permissible.

The second area of interest is the "but for" aspect of the case.  As do all defendants, here they argued that there is no evidence that plaintiffs would be successful against the city.  Justice Goodman made an interesting observation.  If there is no possible merit to such a claim against the City, why did the attorneys send a contingent retainer agreement which called for them to bring such an action.  That the retainer remained unsigned is of no moment.

Lastly, the court gruffly laid aside questions of sanctions. 

Full post as published by New York Attorney Malpractice Blog on July 16, 2009 (boomark / email).