Commercial Division Blog

Posted: May 11, 2020 / Categories Commercial, Professional Malpractice

Client's Mistaken Opinion on Law No Defense to Malpractice Claim

On April 23, 2020, Justice Borrok of the New York County Commercial Division issued a decision in Amtrust N. Am., Inc. v. Pavloff, 2020 NY Slip Op. 31005(U), holding that a client's mistaken opinion on the law is no defense to a legal malpractice claim, explaining:

Finally, to the extent that the Defendants argue that Mr. Kuhn as the client authorized Ms. Pavloff as Am Trust's attorney to represent to counsel for Ms. Pruss and Great American and to the court that the $5 million was available for settlement in the Underlying Action, this argument simply misses the point. While it is true that an attorney should not be held liable for ignorance of facts which the client neglected to tell him or her, an attorney also has a responsibility to investigate and prepare every phase of a client's case. There is absolutely no dispute here that Ms. Pavloff knew of the Conservation Order before appearing at the August 10th Settlement Conference, where she represented that the $5 million was still available for settlement and where she signed off on the settlement on Am Trust's behalf Despite her, at best, evasive representation to the court at the subsequent August 9, 2017 hearing that neither she nor her firm were ever presented with the Conservation Order before the Settlement Conference, she admits that she saw the Conservation Order and briefly reviewed it before the fact. This is simply not an instance of her client keeping this secret from her, nor does it matter if Mr. Kuhn advised her that the money was still available because he believed that to be the case as she alleges. It was her job to provide legal advice to Mr. Kuhn and AmTrust as the client, not the other way around.

(Internal quotations and citations omitted).

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