New York’s highest court recently addressed the question of when a legal malpractice plaintiff must pursue an appeal in an underlying action in order to maintain a viable legal malpractice claim. In an October 21st decision, the Court of Appeals held that if a plaintiff is not likely to succeed in the appeal, he or she may bring a legal malpractice action without first pursuing such an appeal.
In Grace v. Law, 2014 NY Slip Op 07089, the plaintiff had brought a legal malpractice claim against his former attorneys after his underlying medical malpractice claim had largely been gutted on summary judgment as being time-barred. After the summary judgment ruling, plaintiff’s counsel had sent him a letter “which stated that plaintiff was unlikely to succeed on the remaining claim…, and that a trial on that claim would be lengthy and, due to expert costs, expensive.” Based on that letter, plaintiff directed his attorneys to discontinue and voluntarily dismiss the underlying action.
Without appealing the summary judgment ruling in the underlying case, plaintiff filed his legal malpractice claim against his former counsel. Defendants moved for summary judgment, arguing that since the plaintiff voluntarily discontinued the underlying action, he forfeited any right he may have had to pursue the legal malpractice action.
Per Se Rule Rejected
The Appellate Division affirmed the trial court’s denial of defendant’s summary judgment motion, stating that while this is an issue of first impression in New York, “a per se rule that failure to appeal in an underlying action bars a legal malpractice claim has been rejected by several of our sister states.”
The Court of Appeals agreed with the Appellate Division’s conclusion that the “likely to succeed” on appeal is the proper standard in determining whether the pursuit of such an appeal is a prerequisite to a legal malpractice action. The Court held that “prior to commencing a legal malpractice action, a party who is likely to succeed on appeal of the underlying action should be required to press an appeal. However, if the client is not likely to succeed, he or she may bring a legal malpractice action without first pursuing an appeal of the underlying action.”
Efficient And Fair Standard
The Court concluded that the “likely to succeed standard” is the most efficient and fair for all parties because it will obviate premature legal malpractice actions by allowing the appellate courts to correct any trial court error and allow attorneys to avoid unnecessary malpractice lawsuits by being given the opportunity to rectify their clients’ unfavorable result. The Court of Appeals rejected the “nonfrivolous/meritorious appeal standard” put forward by the defendants would that “would require virtually any client to pursue an appeal prior to suing for legal malpractice.”
The Court of Appeals’ decision means that legal malpractice carriers cannot necessarily hang their hat on a plaintiff’s abandonment of their underlying claim as a basis for defeating a malpractice action at the summary judgment stage.