A Party Who Voluntarily Discontinues An Underlying Action and Foregoes An Appeal Does Not Abandon His Or Her Right To Pursue A Claim …

A party who voluntarily discontinues an underlying action and foregoes an appeal does not abandon his or her right to pursue a claim for legal malpractice.

While a party who agrees to dismiss an appeal pursuant to a settlement agreement may, under some circumstances, be precluded from pursuing a legal malpractice claim against his or her attorneys, the NY Appellate Division recently rejected the notion of a per se rule that a party who voluntarily discontinues an underlying action and foregoes an appeal abandons his or her right to pursue a claim for legal malpractice. In Grace v. Law, 2013 N.Y. App. Div. LEXIS 5320, 2013 NY Slip Op 5383 (4th Dep’t 2013), the defendants had represented plaintiff in a medical malpractice action arising from plaintiff’s treatment for an eye condition at a Veterans’ administration clinic. Plaintiff alleged that the VA failed to properly monitor and/or treat his eye condition, resulting in a loss of vision. After the action against the VA had been pending, plaintiff learned that the treating physician had not been employed by the VA, and filed an amended complaint against her and her employer, the University of Rochester. However, the claims against the physician and the University of Rochester were dismissed as time–barred, leaving only a claim that the VA was negligent in failing to reschedule an ophthalmology appointment.  Plaintiff then dismissed the malpractice action and commenced a legal malpractice action against his former attorneys, alleging that they were negligent in failing to name the physician and the University of Rochester in their initial complaint. The attorney defendants moved to dismiss, arguing that the plaintiff waived or abandoned his legal malpractice claim by voluntarily discontinuing what remained of his medical malpractice action and failing to take an appeal of the order dismissing the bulk of his claims. The Appellate Division rejected the application of such a per se rule. While noting that this was an issue of first impression in New York, the Court noted that a number of sister states have rejected such a per se rule on policy grounds, as such a rule would force parties to prosecute potentially meritless appeals to their judicial conclusion in order to preserve their right to commence a malpractice action, increasing the costs of litigation and the burdens on the judicial system. The Court further noted that the additional time spent pursuing unlikely appellate remedies could result in the expiration of the statute of limitations, would discourage settlements, and would potentially conflict with an injured party’s duty to mitigate damages. The court denied the defendants’ motion for summary judgment, holding that they had failed to demonstrate, as a matter of law, that their representation of the plaintiff did not preclude him from prevailing in the underlying lawsuit or on appeal.

Practice Note:  A legal malpractice plaintiff’s voluntary discontinuance of an underlying actiondoes not bar him or her from pursuing a claim against his or her attorney.

Reprinted with permission from the August 2013 lpl eadvisory – ABA Standing Committee on Lawyer’s Professional Liability.  All rights reserved.