Legal Updates for Lawyers’ Professional Liability – RESULTS*

Matthew Flanagan (Melville, NY and New York City) and Jack Yau (New York City) 

• Secured dismissal of Judiciary Law § 487 claims against an insurance defense firm and its attorneys. The plaintiffs sued our clients—a partner and associate at a well-known insurance defense firm—alleging violations of Judiciary Law § 487(1), which provides that an attorney who engages in “deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party . . . is guilty of a misdemeanor and may be liable to the injured party for treble damages in a civil action.” The plaintiffs alleged the defendants engaged in deceit in asserting false positions on behalf of their clients in the underlying action and in falsely representing to the court that the plaintiffs had not opposed a motion to dismiss, even though they had. Matt and Jack argued that mere advocacy does not give rise to a cause of action under Judiciary Law § 487 and, even if a misstatement had been made to the court regarding whether the plaintiffs had opposed a motion, there was no indication it was intentional or that it caused the plaintiffs any damages. The court agreed and granted the pre-answer motion to dismiss. 

Aaron Moore and Claire McCudden (both of Wilmington, DE) 

• Obtained a summary judgment dismissal on behalf of their client, a law firm, that was sued by its former clients for legal malpractice. The plaintiffs, seven affiliated companies and their owners in the business of developing property, had been sued by their bank for defaulting on multiple lines of credit. The bank filed several lawsuits against the property developers, claiming approximately $7 million in damages, plus attorneys’ fees, recoverable pursuant to the terms of the promissory notes. The property developers retained our client to defend the lawsuits, arguing the amounts claimed owed to the bank were significantly overstated. Our client vigorously defended the bank’s underlying lawsuits. Ultimately, the property developers settled the bank’s lawsuits for the entire amount owed, plus interest and the bank’s legal fees. The developers argued its attorneys should have advised them to settle the bank’s claims after the lawsuits were commenced and that, had they done so, they would not have had to pay the bank’s legal fees ($825,000), our client’s legal fees ($485,000), expert witness fees ($335,000) or the additional interest on the loan. The property developers also claimed that not settling with the bank earlier caused them lost business opportunities valued at nearly $1 million. The plaintiffs’ legal malpractice claims were dismissed because their expert witness, a Maryland attorney with no business litigation experience, was not qualified to serve as an expert and because their damages claims were speculative.

Jacob Schultz and Josh J.T. Byrne (both of Philadelphia, PA)

• Obtained dismissal of entire action against an attorney. The plaintiff’s complaint alleged dissatisfaction with our client’s underlying representation. Preliminary objections were filed, arguing the plaintiff did not allege that our client’s conduct fell below the applicable standard of care, did not assert what the outcome of the underlying matter was, and had not filed a certificate of merit. The preliminary objections were sustained, and the plaintiff’s complaint was dismissed in its entirety. Also, the plaintiff did not timely file an amended complaint, although he was granted leave to do so. After the plaintiff did not respond to a notice of intent to enter judgment of non-pros, we filed a praecipe to enter judgment of non-pros, which the court granted. 
• Obtained dismissal of entire action against an attorney and his law firm. The plaintiff alleged he had suffered mentally because he was forced to work while on his vacation to respond to a certification for a discovery motion our client had purportedly improperly filed. In our preliminary objections, we argued the plaintiff had not identified any cause of action and, moreover, the allegations solely arose from conduct which occurred in connection with our clients’ representation of the plaintiff such that dismissal was warranted under the doctrine of judicial privilege. We further argued the matter should be dismissed under the doctrine of collateral estoppel because the plaintiff had brought a motion for sanctions in the underlying matter which was denied and the discovery motion upon which the plaintiff based his complaint was granted. The court agreed with our preliminary objections and dismissed the complaint with prejudice. 

*Prior Results Do Not Guarantee a Similar Outcome 

^{Legal Updates for Lawyers’ Professional Liability – February 2025 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2025 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.}