February 22, 2019

Risk Management Lawyers Rejoice as Clear Scope of Representation Defeats Malpractice Claim

Holland & Knight Alert
Peter R. Jarvis

In Attallah v. Milbank, Tweed, Hadley & McCloy, LLP, 2019 WL 362266, the Supreme Court of New York's Appellate Division upheld the dismissal of a legal malpractice and breach of fiduciary duty case against a law firm on the ground that the firm's letter of engagement with the client established that the firm did not owe the claimed duties to the client.

In 2011, the defendant law firm, Milbank, Tweed, Hadley & McCloy (Milbank), agreed to represent the plaintiff, Ahdy Attallah following Attallah's expulsion from the New York College of Osteopathic Medicine (the College). Pursuant to the terms of the letter of engagement between Milbank and Attallah, Milbank agreed to provide:

[A]ll activities necessary and appropriate in our judgment to investigate and consider options that may be available to urge administrative reconsideration of your dismissal [but] does not, however, encompass any form of litigation or, to the extent ethically prohibited in this circumstance, the threat of litigation, to resolve this matter. This engagement will end upon your re-admittance to the College or upon a determination by the attorneys working on this matter that no non-litigation mechanisms are available to assist you. The scope of the engagement may not be expanded orally or by conduct; it may only be expanded by a writing signed by our Director of Public Service.1

When the College refused to reinstate Attallah, he demanded that Milbank nonetheless attempt to negotiate with or sue the College, but Milbank refused to do either. Attallah then sued Milbank for breach of fiduciary duty and legal malpractice. On appeal, the Appellate Division sustained the trial court's grant of Milbank's motion to dismiss because:

The letter of engagement conclusively demonstrated that there was no promise to negotiate. There was only a promise to investigate and consider whether there were any options possibly available to urge the school to reconsider the plaintiff's expulsion. Anything else, including the defendant's failure to commence litigation against the school and the defendant's alleged rendering of legal advice regarding the efficacy of the plaintiff's commencing a defamation action against others, was outside the scope of the letter of engagement.2

Or, as the Appellate Division went on to say, "An attorney may not be held liable for failing to act outside the scope of a retainer ***."3

Conclusion and Takeaway

In the cabinet of risk management tools, a clear identification of the scope of representation is second in importance only to a clear identification of who is and is not a client. If, for example, the letter of engagement between Attallah and Milbank had merely referred in general terms to the firm representing Attallah with respect to the matter of his expulsion from the College, the agreement could well have been construed against Milbank as its drafter. In-house and outside risk management counsel are unlikely to find a better case to illustrate the point that the few extra minutes it can take to describe the scope of a representation with care are well worth the investment.   


Notes

1 Id. at *1.

2 Id. at *2.

3 Id.


Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.


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