New York Court Limits Insured's Malpractice Suit Against Anderson Kill Law Firm
In recent months, there have been press reports of client claims against the Anderson Kill firm by disgruntled clients whose representation was handled by a paralegal who passed himself as a lawyer on various insurance coverage cases as well as products liability actions. A new opinion of the First Department of the New York Supreme Court in Natural Organics, Inc. v. Anderson Kill and Olick, P.C., 2008 N.Y. slip op. 08472 (App. Div. November 17, 2009) considers aggrieved policyholders can sue the firm for malpractice in such circumstances.
The case in question involved a large insurance coverage matter that AKO had apparently told Natural Organics was worth at least $1.3 million. Several years later, the case settled for $750,000. Thereafter, Natural Organics learned that one of the lead attorneys involved in the case was, in fact, a paralegal who had never been to law school or passed the bar. Natural Organics sued AKO, seeking the difference between $1.3 million and the $750,000 settlement as well as all the legal fees billed in the interim arguing that it would have obtained a more favorable result had it been represented by lawyers.
In affirming the trial court’s dismissal of the plaintiff’s malpractice claims, the First Department ruled that the allegations in the plaintiff’s complaint had failed to support any inference that, but for the defendant’s alleged negligence, the plaintiffs would have obtained a more favorable result. Further, the court ruled that the malpractice claims must be dismissed with prejudice as re-pleading a new set of facts would now be barred by the statute of limitations. Additionally, the First Department affirmed the lower court’s dismissal of the plaintiff’s breach of contract claims insofar as allegations based upon a breach of professional standards was duplicative of the malpractice claim.
The First Department ruled, however, that Natural Organics was entitled to proceed with a lawsuit against AKO for $70,000, the amount that the law firm had billed out for Brian Valerie claiming that he was a licensed attorney. The court ruled that, at this early stage of the proceedings, it cannot be said that these particular damages were too speculative.
Although the Appellate Division’s opinion is brief and contains few details concerning the back story to the dispute, subsequent reports in the Wall Street Journal and the New York Times indicate that the “lawyer in question, Brian Valery was a 32-year old paralegal who fooled the firm into believing that he was a lawyer and masqueraded as such for two years.” Valerie is scheduled to be arraigned on criminal charges of perjury and impersonating a lawyer. Valery went to work for Anderson Kill as a paralegal in 1996. In 2004, he told the firm that he had passed the bar. According to filings in a state proceeding in Connecticut, it appears that Anderson Kill never confirmed his account and hired him as an associate where he continued to work until October 2007 when the deception finally came to light.
