Assignments

Florida Federal District Court Upholds Insurer’s Legal Malpractice Claim Against Defense Counsel
Hartford Insurance Co. of the Midwest v. Koeppel, 629 F. Supp. 2d 1293 (M.D. Fla.2009)

Plaintiff Hartford Insurance Company of the Midwest (Hartford) filed a diversity action against defendants seeking damages for legal malpractice, equitable subrogation, legal malpractice as third-party beneficiary, and breach of contract as third-party beneficiary. Hartford’s lawsuit arose from its retention of defendants to handle a demand letter from an attorney representing an individual who had been injured in an accident with one of Hartford’s insureds. Defendants filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), which was denied by the district court.

Fee Agreements / Fees

Court Declines to Meddle With Fee Sharing Agreement Despite Unequal Sharing of Workload
Samuel v. Druckman & Sinel, LLP, 12 N.Y.3d 205, 906 N.E.2d 1042 (N.Y. 2009)

In summary, in a fee sharing dispute between a referring attorney and the lawyer to whom he referred the case, the referring attorney was entitled to a share of an enhanced fee award even though the enhancement was primarily attributable to the work performed by the latter attorney. Attorney Elliot Sinel referred a medical malpractice case to attorney Steven Samuel. The referral agreement called for Sinel to be “compensated at the rate of one-third of the entire legal fee recovered.” Samuel then brought in another attorney, Steven Pegalis, and together they tried the case and recovered a settlement of $6.7 million. Due to the amount of work they had performed, Samuel and Pegalis successfully moved for an enhanced fee of $1.9 million. They split the fee, and Samuel forwarded one-third of his share to Sinel.

Fee Agreements / Fees

Court Denies Prevailing Party Fees Due to Client’s and Lawyer’s Lack of Collegiality
Sahyers v. Prugh, Holliday & Karatinos, P.L., 560 F.3d 1241 (11th Cir. 2009)

In summary, the court denied legal fees and costs of litigation to the prevailing plaintiff because plaintiff and her lawyer had demonstrated a lack of collegiality and wasted judicial resources by failing to give notice to, or attempt to settle with, defendant law firm prior to filing suit. A paralegal, Christine Sahyers, sued her former employer, the law firm of Prugh, Holliday & Karatinos, P.L. (Prugh), for failure to pay overtime. Sahyers asked her lawyer simply to file suit under the Fair Labor Standards Act (FLSA) and not to inform Prugh of the issue or attempt to settle the issue pre-filing. Defendants tendered an offer of judgment — without admitting wrongdoing — under Fed. R. Civ. P. 68, and Sahyers accepted. Sahyers then moved for litigation expenses. Although reasonable fees and costs are usually available to prevailing plaintiffs under the FLSA, the district court exercised its inherent power and awarded nothing to Sahyers.

Assignments

Illinois Court Allows Assignment of Legal Malpractice Claim
Learning Curve Intern., Inc. v. Seyfarth Shaw, LLP, 392 Ill. App. 3d 1068, 911 N.E.2d 1073 (1st Dist. 2009)

Acknowledging the rule against assignments of malpractice claims, an Illinois appellate court found an exception where a company assigns its cause of action to its former shareholders as part of a commercial corporate merger. The lawyers unsuccessfully defended a trade secret lawsuit with a resulting judgment for $6 million in compensatory damages. But the trial court granted judgment notwithstanding the verdict (JNOV), and plaintiff appealed. While an appeal was pending, Learning Curve merged with RC2, leaving essentially a shell corporation. Shortly thereafter, the appellate court reversed the underlying matter, reinstated the verdict, and remanded for calculation of exemplary damages.

Fees / Fee Agreements

Court Reduces Attorney Fee Despite Skillful Representation
White v. DaimlerChrysler Corp., 57 A.D.3d 531, 871 N.Y.S.2d 170 (N.Y.A.D. 2 Dept. 2008)

In summary, the court was authorized to reduce a contingent fee for the representation of infants. In doing so, the court will determine suitable compensation for the attorney in light of all facts and circumstances. An attorney, Kerry E. Connolly, sued DaimlerChrysler (Daimler), among others, on behalf of five infant passengers who were injured in a car accident. In her retainer agreement, Connolly contracted for a one-third contingent fee. When the parties settled, Connolly moved the trial court to approve the settlement and award her fee. The court approved the settlement but reduced Connolly’s award to one-fourth of the net amount.

This newsletter has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.

REGISTER NOW for the Ninth Annual Legal Malpractice & Risk Management Conference

March 3-5, 2010
The Westin Chicago River North Hotel
320 North Dearborn Street
Chicago

Attend the industry's premier annual event focused on current and important developments in the law and litigation of malpractice claims, legal malpractice insurance and risk management strategies. Each conference panel examines recent case law and significant developments throughout the last year. One and one-half days will be devoted to legal malpractice (March 3-4), and one and one-half days will be devoted to risk management (March 4-5).

Earn up to 15 hours of CLE credit, including up to 6.50 ethics credit!

Conference Topics

Legal Malpractice Sessions (March 3-4)

• Standing to Sue, Privity and Duty of Disclosure
• Significant Developments in Litigating Legal Malpractice Claims
• What's Your Little Secret? They Want to Know
• Judgmental Immunity — A Modern Look at the Legal Profession's Oldest Defense 
• Insurance Coverage Update: The Year in Review – Prior Knowledge Redux and the Definition of Professional Services
• 2009 LMRM Case Updates and Statutory Causes of Action
• Stump the Panel

Legal Malpractice/Risk Management Cross-Over Sessions (March 4)

• The Insurance Marketplace and Considerations
• Who is the Client and Standing to Sue – Successor Entities, Affiliates and Subsidiaries
• Advance Conflict Waivers, Screening and How to Do It

Risk Management Sessions (March 4-5)

• The General Counsel Forum
• Suits for Fees/Mandatory Fee Arbitration
• Risk Management Considerations in Restructuring and Winding-Up Law Firms
• Managing Client and Law Firm Data, and What Gives When Client and Firm Policies Conflict?
• On the Horizon – The Slow Motion Revolution

Registration Fees

$1,300 for the Entire Conference - March 3-5
$925 for the Legal Malpractice Sessions Only - March 3-4
$925 for the Risk Management Sessions Only - March 4-5

Discounts (maximum 15% discount per registration)

Returning registrants receive 5% off the conference price
Multiple registrants receive 15% off when two or more colleagues from the same company register for the conference 

For more information, please visit www.LMRM.com or click here to Register Now!