Commercial Litigation and Arbitration

Advising Client to Pursue Litigation in Allegedly “Biased” Court Does Not Constitute Legal Malpractice — Conflict of Interest States No Claim Absent Damages

From Stonewell Corp. v. Jerseysearch Title Servs., 2010 U.S. Dist. LEXIS 1107 (S.D.N.Y. Jan. 7, 2010):

The Court is not persuaded by Stonewell's contention that Dollinger was negligent in advising Stonewell to proceed in the "bias[ed] forum" of the Middle District of Florida instead of the more "impartial" forum of the New York district court. *** The Court will not endorse the view that some district courts are "biased" while others are "impartial," and that an attorney's duty to a client includes determining whether or not a court is "bi-ased." The appropriate inquiry is whether the defendant-attorney exercised a "degree of care, skill and diligence commonly possessed and exercised by a member of the legal community." *** Based upon the record before the Court, Dollinger met the requisite standard of care and conduct in pursuing the first "innocent owner" petition.***

A "conflict of interest, even if a violation of the Code of Professional Responsibility, does not by itself support a legal mal-practice cause of action." Sumo Container Station, Inc. v. Evans, Orr, Pacelli, Norton & Laffan, P.C., 278 A.D. 2d 169, 171 (1st Dep't 2000). Even if a potential conflict of interest existed, Stonewell must still establish that such a conflict caused an actual injury. A failure to establish that an attorney's conduct proximately caused harm requires dis-missal of the malpractice action, regardless of whether the attorney was in fact negligent. See Bauza v. Livington, 40 A.D. 3d 791, 793 (2d Dep't 2007); Leder v. Spiegel, 31 A.D. 3d 266, 268 (1st Dep't 2006); Schwartz v. Olshan Grundman Frome & Rosenzweig, 753 N.Y.S. 2d 482, 486 (1st Dep't 2003).

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