Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: August 9, 2016

Disagreements With Counsel’s Professional Decisions on Trial Strategy Not Actionable

On July 28, 2016, Justice Scarpulla of the New York County Commercial Division issued a decision in Bison Capital Corp. v. Hunton & Williams LLP, 2016 NY Slip Op. 31467(U), dismissing legal malpractice claims, explaining:

In a legal malpractice claim seeking damages, a plaintiff must demonstrate that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the attorney’s breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages. Additionally, to show the causation element, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence. Whether a complaint makes out a claim for legal malpractice is a question of law, capable of determination on a motion to dismiss.

Bison’s allegations in support of the malpractice claim – that Hunton & Williams failed to call an expert witness, to introduce into evidence ATP’ s SEC reports, and to rebut attacks on the credibility of Bison’s President – are plainly disagreements with Hunton & Williams professional decisions related to trial strategy and are not actionable as a matter of law. Further, Bison’s allegations fail to meet the case within a case requirement, that is, the allegations fail sufficiently to allege that but for Hunton & Williams’ conduct Bison would have prevailed in the underlying matter or would not have sustained any ascertainable damages.

Similarly, Hunton & Williams’ decision to wait to enforce the judgment against ATP during its appeal to the Second Circuit was a reasonable course of action which does not constitute malpractice. While there is nothing inconsistent in a party’s accepting the benefit of a judgment and appealing in an attempt to increase the award, when an appellate body has authority as broad as that of the Trial Judge and can accordingly decrease a judgment, a party may not simultaneously accept the trial court’s judgment and appeal that award. Here, the Second Circuit, engaging in de novo review, could have found that ATP was entitled to a reduced judgment.

In addition, Bison has not alleged sufficient facts to show that Hunton & William’s alleged negligence in not immediately seeking to enforce the judgment proximately
caused its injuries.

(Internal quotations and citations omitted) (emphasis added).

View posts