Wednesday, July 28, 2010

Don't Mess With Texas

The New York Appellate Division for the First Judicial Department affirmed the denial of a motion to move a legal malpractice action to Texas. The case involves allegations that the defendant law firm identified the wrong entity entitled to payment from the client, causing the client to pay the wrong entity.

A dissent makes a powerful argument in favor of Texas, recounted in part below:

The motion court never expressly applied the factors that go into deciding a forum non conveniens motion but seemed to recognize that this case had little connection to New York. Instead, the court denied the motion because the parties represented that the Texas statute of limitations was shorter than New York's and defendant did not agree to the application of the borrowing statute. Nevertheless, this case clearly does not belong in New York. Defendant maintains an office here, but none of the attorneys at the New York office were involved in the events underlying this case. Plaintiffs' principal places of business are now in Connecticut and virtually all the underlying events occurred, for the most part, after plaintiffs had moved their offices. That plaintiffs previously maintained places of business in New York is not relevant, because the documents and witnesses are no longer within this jurisdiction.

More important, there will likely be a need for testimony from non-party witnesses, such as individuals from the two Apollo entities, who are located in Texas. Plaintiff argues that there will be no need to call anyone from Apollo. I cannot agree. Rather, testimony from Apollo witnesses may be integral to determine whether defendant law firm was negligent in confusing the Apollo entities. For instance, the determination could depend on what someone at one of the Apollo entities communicated to defendant. The lead attorney on the underlying transaction, who lives in Texas, no longer works for defendant, and as with the Apollo witnesses, it is unlikely a New York court itself can compel his live testimony without assistance from a Texas court. This case thus represents an unnecessary burden on the New York courts. In addition, all records that either Apollo entity has are located in Texas. Further, the events pertinent to this case all occurred outside New York, the documents are in Texas and, as this case concerns what defendant did or did not do, all of the relevant witnesses are in Texas. Finally, Texas certainly has an overriding interest in regulating the conduct of the lawyers admitted in that state. (citation omitted)

(Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2010/07/the-new-york-appellate-division-for-the-first-judicial-department-affirmed-the-denial-of-a-motion-to-move-a-legal-malpractice.html

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