Friday, July 18, 2008

Vicarious Liability For Legal Malpractice

A New York law firm was retained to assist the client in recovering her interest in a partnership. The firm secured a judgment against Julius Gerzof for over $1.2 million dollars. Gerzof died in Florida before the judgment had been satisfied. The firm hired Florida counsel to preserve the claim against Gerzof's estate. Florida counsel did not file a timely notice and the client "was unable to satisfy any of her judgment from the substantial assets of the estate." The client then sued the New York firm on a theory of vicarious liability for the mistake of Florida counsel.

The New York Appellate Division for the Third Judicial Department rejected the New York firm's contention that it had met its obligation to the client by retaining the Florida lawyer. While a firm is ordinarily not liable for the acts or omissions of a co-counsel outside the firm, here the New York firm solicited and hired Florida counsel without the client's knowledge. The client had no retainer agreement or contact with the Florida lawyer: "Under these circumstances, defendant assumed responsibility to plaintiff for the filing of the Florida estate claim and [the Florida lawyer] became defendant's sub-agent." Thus, summary judgment was properly denied to the New York firm. (Mike Frisch)

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