Bruno and Isaacson Secure Dismissal of Legal Malpractice Action from Appellate Division

Jonathan Bruno and Deborah Isaacson secured dismissal from the Appellate Division, First Department of a complaint asserting claims for legal malpractice, breach of fiduciary duty and breach of contract, with the Appellate Division affirming the trial court’s decision granting their motion for summary judgment and denying plaintiff’s motion for summary judgment.

The Firm’s clients represented a trucking company and its driver in an automobile accident wherein the underlying plaintiff sustained injuries requiring multiple surgeries. The clients advised plaintiff, the third-party administrator for the insurance company that insured the trucking company and driver, of the potential exposure to the insureds, but the plaintiff would not provide settlement authority consistent with the clients’ recommendations. The insurer ultimately authorized a settlement on the eve of trial.  Plaintiff sued the clients, alleging that the settlement was excessive and was compelled due to the clients’ purported negligence in failing to serve timely expert witness disclosures, which was likely to result in preclusion of the experts.

In affirming the trial court’s decision, the Appellate Division agreed with Rivkin Radler’s argument that the plaintiff was not an assignee of any potential claim by the insurer.  The Appellate Division also held that plaintiff lacked standing to maintain a legal malpractice claim because there was no attorney-client relationship between plaintiff and the clients.  The Appellate Division also agreed with Rivkin Radler’s argument that there was no near-privity relationship between plaintiff and the clients because plaintiff’s legal malpractice claim was not based on negligent misrepresentation.  The court rejected plaintiff’s reliance on equitable subrogation because plaintiff did not have a contractual obligation to pay the claims in the personal injury action.  The Appellate Division also concluded that plaintiff’s breach of fiduciary duty and breach of contract claims were duplicative of the legal malpractice claim and there was no contract to sustain the breach of contract claim.

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