Countersuing Your Attorney For Legal Malpractice: A Real Case Of A Disastrous Strategy
So, you have decided you have better things to do with your money than to pay your lawyer the fees he has incurred in representing you. The lawyer sues you for his fees. You make the further decision to file a counterclaim for legal malpractice even though you know there is no basis for the malpractice claim. Your strategy is that the malpractice claim will induce the lawyer to drop his suit for fees or to settle the claim cheaply. At the very worse, the countersuit will delay the day you actually have to pay your former lawyer.
What could go wrong?
Plenty, particularly if you, the client, are also an attorney and your former attorneys are not intimated by the malpractice claim and are unwilling to play the passive role you had planned for them.
The Appellate Division of the Superior Court of New Jersey recently affirmed a trial court’s decision award to Cuyler Burk attorneys fees and costs pursuant to New Jersey’s statute and court rules which authorize reimbursement of fees and costs incurred in defending frivolous claims. The Appellate Division formally published its decision (Cuyler Burk, LLP v. Robert M. Silverman, Esq., 2007 WL 2934997, V N.J. Super. ______ (App. Div. 2007)). The opinion has received significant attention in the media as well as among members of the Bar.
The facts were not complicated and for the most part were not disputed. Robert Silverman, a highly-advertised “Lemon Law” attorney, had engaged Cuyler Burk to defend him against ethics charges that had been filed against him by a Lemon Law client. Ironically, one of the ethics charges was that Silverman had filed a frivolous lawsuit against the client for his fees. Cuyler Burk originally recommended that Silverman contest the ethics charges, because a finding of ethical violations would disrupt plans to expand his practice by opening offices in other jurisdictions. Silverman disagreed, and instructed Cuyler Burk to negotiate the best deal possible with the Attorney Disciplinary Review Board.
Cuyler Burk did just that. It negotiated the most lenient form of discipline by consent available under the circumstances: discipline by consent with an admonition. But Silverman delayed signing the necessary documentation to finalize the settlement, and then, notwithstanding his previous direction, questioned why Cuyler Burk had negotiated the discipline by consent with an admonition. He also delayed in paying his bills for the legal services that were being rendered to him and paid none of the monthly bills totaling $18,748, which had been sent to him over the seven-month period of Cuyler Burk’s representation. Not surprisingly, this produced a parting of ways.
Silverman engaged a new attorney who defended him in the ethics proceedings. Following an ethics hearing, a thirty-day suspension from the practice of law was ordered. After Silverman’s appeal, the suspension was changed to a reprimand, which was still a more severe form of punishment than the admonition Cuyler Burk had negotiated.
Meanwhile, Cuyler Burk sued Silverman for its $18,748 in fees. Rather then paying his bills for legal services, Silverman’s next fateful decision was to file a counterclaim against Cuyler Burk for legal malpractice. Silverman eventually settled the complaint for fees by paying Cuyler Burk $15,000, but the counterclaim for malpractice remained.
Generally, claims for professional malpractice require that the claim be supported by an opinion of an expert. To support his legal malpractice claim against Cuyler Burk, Silverman engaged a well-known legal malpractice expert, Anthony Ambrosio. Ambrosio first offered an opinion that Cuyler Burk had committed malpractice by failing to recommend that Silverman settle the ethics charges. However, when Cuyler Burk deposed Ambrosio, and Ambrosio was shown documents that demonstrated that Cuyler Burk had negotiated a discipline by consent with an admonition, Ambrosio testified that, in forming his original opinion, he had not been provided with all of the pertinent facts and documents and, upon further consideration, he withdrew his opinion in the course of the deposition. Faced with the documentary record, Ambrosio testified that the ethics settlement negotiated by Cuyler Burk was a better result then could have been reasonably anticipated, and that Cuyler Burk had done an excellent job on Silverman’s behalf. Sometime after the deposition, Silverman dismissed his counterclaim.
Cuyler Burk however continued to press its claim for fees and costs under the frivolous claims statute and rule. After a hearing (at which Silverman offered no witnesses), Superior Court Judge John Harper awarded Cuyler Burk a total of $59,793.50 in fees and costs in defending the malpractice counterclaim. Judge Harper found that Silverman had filed the counterclaim in bad faith in an effort to frustrate Cuyler Burk’s efforts to collect the legal fees owed for defense against the ethics charges.
Silverman’s next tactic was to appeal Judge Harper’s decision. In order to stay enforcement of the judgment against him, Silverman was required to deposit cash security in the amount of $90,000 with the court.
Silverman’s principal arguments on appeal were that he could not be held liable for filing a frivolous claim, because he subsequently had withdrawn the claim, and the counterclaim against Cuyler Burk could not be deemed frivolous because he originally had the Ambrosio opinion to support it. In this latter regard, he disputed Ambrosio’s assertion that he had not given Ambrosio all of the facts and documents. Silverman also argued that the award of fees was excessive.
The Appellate Division rejected all of these arguments. While the counterclaim may have been voluntarily dismissed, it was only dismissed after Cuyler Burk demonstrated through the Ambrosio deposition that it had no merit. The Appellate Division remarked that the counterclaim had “all of the earmarks of a pleading meant simply to intimidate an adversary and to delay entry of a judgment ….” Ambrosio’s report, the Court held, did not afford Silverman a safe-harbor because the facts that the expert relied upon were untrue. Finally, the Appellate Court found that Judge Harper’s fee award was reasonable and would not be disturbed.
After the Appellate Division decision, Silverman agreed to pay Cuyler Burk $70,000 out of the funds on deposit with the clerk. Cuyler Burk agreed not to pursue a claim for additional fees and costs incurred in defending Silverman’s appeal.
It is difficult to imagine a strategy producing a more disastrous result then the one embarked upon here. Rather then accepting the settlement of the ethics matter negotiated by Cuyler Burk and pay Cuyler Burk the $18,748 in fees he owed – an amount that would have been less had the ethics settlement negotiated by Cuyler Burk been executed - here is what Silverman’s grand plan produced:
On the positive side:
- Silverman saved $3,800 by settling Cuyler Burk’s $18,748 claim for $15,000.
On the not-so-positive side:
- Silverman ended up with a discipline of reprimand, rather then the lesser discipline negotiated by Cuyler Burk;
- Silverman incurred the cost of engaging an attorney to take over the defense of the ethics matter for the ethics hearing and subsequent appeal;
- Silverman lost the time of his firm’s attorneys and staff while they engaged in defending the Cuyler Burk complaint and prosecuting the counterclaim, in addition to incurring litigation costs;
- Silverman incurred the cost of engaging an attorney to represent him at the fee hearing, as well as the subsequent appeal of Judge Harper’s decision to the Appellate Division;
- Silverman incurred the cost of funds on deposit as security;
- Silverman paid Cuyler Burk $70,000;
- Silverman received unfavorable publicity calling attention to his ethical violations, that he had failed to pay an amount justly owed, and that he had filed a lawsuit premised on facts which he knew to be untrue.
This saga provides real-life proof for the old adage about a lawyer who represents himself. Had Silverman engaged independent counsel before filing the counterclaim, it’s likely he would have been counseled against doing so. Independent counsel could not have signed and filed the counterclaim without subjecting himself to risk. Of course, this assumes that Silverman would have given independent counsel all of the facts and documents. The experience with Mr. Ambrosio’s experience suggests Silverman might not have done so.
Cuyler Burk was represented by Cuyler Burk partner Stephen Cuyler in connection with Cuyler Burk’s complaint for fees and defense of the counterclaim, and by partner David Menzel at the fee hearing and subsequent appeal.
Tags: legal malpractice
June 14th, 2008 at 2:10 pm
interesting that the people who behave the worst are those in the legal and academic professions.