Opinion
005818/2003.
Decided March 27, 2006.
Defendant Hytner, an attorney, has moved via a motion in limine to preclude plaintiffs and third-party defendants Tilton and Mitchell from presenting an expert witness on legal ethics and eliciting testimony that he (defendant Hytner) had committed an ethical code violation.
The essence of the underlying claim of malpractice goes to the drafting of Operating Agreements for the respective LLC's set up by Hytner as the attorney for Ms. Tilton, Ms. Mitchell and Mr. Trezza. The expert would be called by Tilton to testify that Hytner violated an ethical rule by representing multiple parties without advising them of the possible conflict between them and obtaining their waiver of joint representation. See DR 5-105(c); NYCRR § 1200.24(c). Apparently, based upon oral argument made to the court, Tilton will argue that based upon the ethical violation of a conflict of interest and as a result of the conflict, he committed malpractice.
To prove malpractice a plaintiff must prove (1) the negligence of the attorney, (2) that the negligence was the proximate cause of the loss sustained, and (3) proof of actual damages. Plaintiff must also prove that she would have succeeded on the merits on the underlying action "but for" the attorney's negligence. Davis v. Klein, 88 NY2d 1008 (1996); Maillet v. Campbell, 280 AD2d 526 (1st Dept. 2001). In other words, the causation element becomes a "but for" causation (that "but for" the negligence of the attorney the loss would not have been sustained). No where in the case law does the violation of a DR form the foundation of legal malpractice.
The act of negligence constitutes malpractice, not any alleged underlying reason, be it code violation or something else.
Hytner argues that to allow the admission of a claimed ethical violation against an attorney in a case of legal malpractice "would be tantamount to allowing an expert to testify that a defendant was a criminal based on alleged criminal activity without a conviction being established." (No grievance has been filed against Hytner based upon this case.)
Tilton argues, with citation to Swift v. Ki Young Choe, 242 AD2d 188 (1st Dept. 1998), that the ethical standard should be presented to the jury and that the expert should be able to opine on it. Tilton also refers the court to the treatise Legal Malpractice, Mallen Smith, § 19.7 (5th ed. 2000), specifically, the following excerpted quotation:
Ethics standards have relevance in civil litigation. . . . The common judicial application is that an ethics rule may be relevant as evidence' of the standard bearing on negligence or fiduciary misconduct.
Typically, the evidence is presented as testimony by an expert witness, who refers to ethics standards as a consideration in opining about whether the lawyer's conduct comported with the standard of care or conduct.
3 Ronald E. Mallen Jeffrey M. Smith, Legal Malpractice § 19.7 (5th ed. 2000).
In Swift, the Appellate Division reversed a lower court's dismissal of a legal malpractice action. The lower court had granted defendant summary judgment based upon a waiver of a conflict of interest obtained by the defendant-attorney. A waiver that was so thorough that "it contained a general release of the defendant-attorney from all actions, causes of action, . . . for all claims arising from the representation by [the attorney Choe] of all the parties [plaintiffs and defendants]." It was this waiver or general release that the lower court relied upon in granting the summary judgment motion. The Appellate Division strongly disagreed.
Essentially finding that DR 5-105(c) cannot form the basis for the dismissal of the action without going further into the facts of Swift, it is sufficient to say they were outrageous. Further, the general release itself violates DR 6-102(A) which states that a lawyer cannot limit prospectively his or her individual liability to a client. It should be clear that it was not the violation of a Disciplinary Rule (DR) that formed the basis of Swift's case, but was the release; a "release obtained in violation of a disciplinary rule should not serve to shield a lawyer from liability before the facts and circumstances surrounding the execution of the document are fully examined." Swift at 193.
Plaintiff points to the language of the Appellate Division in support of her request to call the expert:
We emphasize that it is not an alleged . . . violation of the disciplinary rules that forms the basis of the malpractice claim, although some of the conduct constituting a violation of a disciplinary rule may also constitute evidence of malpractice.
It should be noted that the Appellate Division continued:
In support of the attorney malpractice claim, plaintiff asserts that defendants violated the duty of care owed to clients by failing to provide necessary and appropriate advice to Carl as an individual client, with respect to the ramifications of going through with the deal. Particularly in view of the unusual risks this transaction offered to the Swifts, any attorney representing Carl (as attorney-in-fact for David) was under an obligation to make sure he understood exactly what those risks were.
Id. at 194.
The question of whether the defendants satisfied that obligation must be answered by the finder of fact. William Kaufman Organization, Ltd. 269 AD2d 171 (1st Dept. 2000) (which cites Swift) and Mackley v. Sullivan Liapakis, 2001 U.S. Dist. Lexis 21723 which cites William Kaufman Organization, add absolutely nothing to the argument.
In a more recent case, People v. Garson, 17 AD3d 695 (2nd Dept. 2005), the Kings County District Attorney indicted Judge Garson on a variety of charges including receiving a reward for official misconduct. The official misconduct charge, which relies on a violation of the defendant's duty as a public servant, was defined solely by reference to the Rules of Judicial Conduct. The Appellate Division found that such an indictment is insufficient. That court relied on the Court of Appeals decision in People v. Carrubba, 46 NY2d 658 (1979) which dismissed a case brought against a Suffolk County District Court Judge for official misconduct, who was convicted after trial, where she had dismissed a Vehicle and Traffic Law charge against a personal friend in violation of Canons 2 and 3 of the Code of Judicial Conduct. Essentially, the Code of Judiciary Conduct could not be enforced by criminal prosecution.
Neither Garson nor Carrubba are controlling here on the extant facts, but the reasoning is of interest, that being that an ethical code could not be the basis for a criminal prosecution. Defendant/third-party plaintiff Hytner argues that the code alone cannot be the basis of legal malpractice and he is correct.
The defense has provided the court with an expanded portion of the 16 page section 19.7 of Mallen and Smith's treatise on Legal Malpractice. First, the area quoted to the court follows the quote "There are other judicial views regarding the use of ethical standards in legal malpractice litigation." Thus, it appears the quoted area is far from an accepted standard.
In fact, as pointed out by defense counsel, Mallen and Smith note that neither the ABA Model Code of Professional Responsibility nor the Model Rules of Professional Conduct were ever intended to define standards of civil liability for professional misconduct and that the violation of a rule should or does not create the presumption that a legal duty has been breached.
Though the ABA Model Code has not been adopted in the State of New York, there would appear to be no difference in Mallen and Smith's view of the Model Code and that of the New York Code of Professional Responsibility.
There is no issue in the mind of this Justice that our code was never intended to be used in civil litigation to compensate for an injury, nor that it would be the basis for negligence per se.
Mallen and Smith point out at pages 1218-1220:
There are significant procedural and substantive differences between a civil malpractice and a disciplinary proceeding. . . . These differences often mean that a rule promulgated for discipline is inappropriate as a principle of civil law or standard for defining proper civil conduct. . . .
Such factors were examined comprehensively in the 1992 Washington [State] Supreme Court decision of Hizey v. Carpenter. . . . The Court . . . concluded that a plaintiff should not argue or provide expert testimony that the ethical standards are equal to and coexistent with the legal standard of care. The expert may use the language of the ethical rules but should not identify the rule. . . .
In Hizey v. Carpenter, 119 Wash.2d 251, 830 P. 2d 646, the trial court ruled that plaintiff's ethics expert could not "ground" his testimony on the CPR (Washington's Code of Professional Responsibility), specifically he could not refer to specific rules or testify as to the existence of a codified body of ethics rules for attorneys. Nor could he testify that the Washington code set the standard of care in an action for legal malpractice. He was allowed to testify that an attorney has ethical duties and to explain what those duties were in this case. He further defined a conflict of interest and explained an attorney's obligation when a conflict arises. He also testified that in the Hizey case there was a conflict and that Carpenter failed to fulfill his obligations in the conflict setting. The defendant was successful at trial. On appeal the question for the appellate court was: "In a legal malpractice case may the jury be informed of the Code of Professional Responsibility either directly through jury instruction or by the testimony of experts who refer to said code?"
The plaintiff argued that a breach of the code is evidence of a breach of the attorney's duty and the expert should have been allowed to refer to the code sections in testifying as to the standard of care and its breach (and the court should have so charged the jury).
The court found that the lower court was correct in refusing to charge that code violations may be used as evidence of malpractice.
It should be noted that in Washington the elements necessary for proof of malpractice are slightly different than in New York. They are:
(1) Attorney client relationship which gives rise to a duty of care.
(2) An act or omission in breach of the duty of care.
(3) Damage to the client.
(4) Proximate cause between the breach and the damages caused.
The court refused to analogize code violations to statutory violations or violations of an administrative code. In Washington, as in New York, the court, not the Legislature, adopts the code that regulates the practice of law within that state.
The Washington court cited to a Tennessee decision, Lazy Seven Coal Sales, Inc. v. Stone Hinds, P.C., 813 SW 2d 400 (Tenn. 1991): "In a civil action charging malpractice, the standard of care is the particular duty owed the client under the circumstances of the representation, which may or may not be the standard contemplated by the code."
Over and over again the Hizey court cites to legal treatises, including Mallen and Smith, for the proposition that the code is meant to protect the public and the integrity of the profession. It was not and is not meant to be extended into the malpractice area. See Faure Strong, The Model Rules of Professional Conduct: No Standard for Malpractice, 47 Mont. L.Rev. 363, 367-368, 375.
The Washington court did not stop the ethics professor from testifying, but held that his testimony must not be presented in such a way that the jury could conclude it was ethical violations that were actionable, rather than the breach of the legal duty of care. The court ruled that the expert must testify generally as to ethical requirements, concluding the attorney's violations of the ethical rules constituted a deviation from the legal standard of care. (The expert could testify to the content of the rules, but was prohibited from explicit reference to them.) It is interesting to note that the Hizey court found that their code was never intended as a basis for civil liability and it so states in a preamble or introduction. It also contains standard phrases which, when relied upon to establish a breach of the legal standard of care, it provides only vague guidelines. Hizey at 652-53.
In New York the code, as found in the uniform rules 22 NYCRR 1200.1 et al., contains no Preamble or Preliminary Statement. However, as published by the New York State Bar Association, as approved by the Appellate Division, such material does appear and states: "The Code makes no attempt to prescribe either disciplinary procedures or penalties for violation of a Disciplinary Rule, nor does it undertake to define standards for civil liability of lawyers for professional conduct." Preliminary Statement of Lawyers Code of Professional Responsibility, January 1, 2002.
This court does not believe the intent as described in the Preliminary Statement (above) has been replaced or intentionally deleted by placing the code within the Uniform Rules.
Accordingly, the defendant Hytner's motion is granted to limit the argument of plaintiffs, their counsel and their witnesses by precluding any mention of an alleged ethical code violation by defendant Hytner, most specifically, that of DR 5-105(c) and related code sections.
This court adopts the philosophy of the state of Washington's Supreme Court in Hizey v. Carpenter and would allow the expert to testify as to what he or she considers correct ethical conduct under the circumstances of this case, even using the language of the rule without citing to specific sections.
As the Hizey court stated, the expert's testimony may not be presented in such a way that the jury could conclude that it was the ethical violations that were actionable, rather than the breach of the legal duty of care. This can be achieved by allowing the expert to use language from the code, but prohibiting specific reference to said code. "The expert [may] testify generally as to the ethical requirements, concluding the attorney's violation of the ethical rules constituted a deviation from the legal standard of care." Hizey, at 265.
Of course, such deviation, if proven, must still be shown to have caused damages and that those damages would not have been caused "but for" the negligence of the attorney in departing from the legal standard of care. Within that context, the expert may be called as a witness by plaintiff, Tilton.
SO ORDERED.