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February 2015

New York Team Wins Defense Verdict in Legal Malpractice Action

On Feb. 9, Gordon & Rees New York partner Robert Modica and associate Brian Middlebrook won a defense verdict on behalf of their client in a legal malpractice action filed by the plaintiff, the owner of a Long Island auto repair facility.

The plaintiff filed a claim for legal malpractice against Gordon & Rees’ client, an attorney, alleging that he entered into a global settlement of three related actions on behalf of the plaintiff without authority to do so. The underlying actions involved the dissolution of two corporations owned by the plaintiff and his brother and former business partner, as well as a claim for corporate theft and fraud. The plaintiff sought the return of the $600,000 settlement funds, as well as additional damages for alleged investments in the businesses and theft by his brother. 

In what is believed to be a case of first impression in New York, the court labored over the plaintiff’s burden of proof, specifically as to whether the plaintiff was required to establish that he would prevail in all three underlying actions or if they could be segregated before the jury despite the global settlement.

Gordon & Rees maintained that its client entered into the settlement with the plaintiff’s full consent and authority to do so, and subsequent conduct by the plaintiff served to ratify the settlement agreement.

After a four-week-long trial in the Supreme Court of the State of New York, Nassau County, the jury returned a defense verdict finding that Gordon & Rees’ client acted with full authority to settle the underlying cases, and therefore was not liable to the plaintiff for legal malpractice.

Brian E. Middlebrook