May 09, 2015 Practice Points

New York Embraces "Likely to Succeed" Standard for Appeals

Exhaustion of appeal options is unnecessary.

By Saleel V. Sabnis

The New York Court of Appeals, in a case of first impression, recently recognized the “likely to succeed” standard in appeals of an underlying case leading up to the commencement of an attorney malpractice action. Grace v. Law, 2014 WL 53253632014, N.Y. Slip Op. 07089 (N.Y. Oct. 21, 2014). In short, prior to commencing a legal malpractice action, a party who is likely to succeed on appeal of the underlying action should file an appeal so that the appellate courts are given the opportunity to correct a trial court mistake and essentially vindicate the attorney’s representation. Yet, under the standard set forth in Grace v. Law, if the client is not likely to succeed on appeal, he or she can file a legal malpractice action without first pursuing an appeal of the underlying action.

In Grace, the plaintiff began receiving treatment for an eye condition with a specific ophthalmologist at a Veterans Administration (VA) clinic. In June 2003, the VA canceled an appointment and did not reschedule the plaintiff until August 2004. At that 2004 appointment, the plaintiff was diagnosed with glaucoma and subsequently became blind in one eye. The plaintiff alleged that had the glaucoma been diagnosed at his initial appointment, his blindness would have been prevented. In June 2006, the plaintiff retained a law firm to commence a medical malpractice lawsuit against the VA; he was then referred to a second firm to continue the suit. The second firm learned that the doctor was not a VA employee but an independent contractor, and it referred the case back to the original firm due to a conflict of interest. The plaintiff eventually amended his complaint to name the correct employer, but the court dismissed the claims against the doctor and new defendant as time-barred.

The plaintiff then sued both firms for legal malpractice for failing to timely sue the doctor and his correct employer. The firms argued that because the plaintiff had not appealed the dismissal of his medical malpractice action, he could not maintain the legal malpractice claim. The defendants argued that the plaintiff was estopped from commencing the legal malpractice action and moved for summary judgment on this issue. The trial court denied their motions.

The New York Court of Appeals recognized that previous lower court decisions “generally stand for the proposition that an attorney should be given the opportunity to vindicate him or herself on appeal of an underlying action prior to being subjected to a legal malpractice suit.” However, the court decided that there should be an exception to the general rule, pointing to decisions from other jurisdictions. To apply the “likely to succeed” standard, courts will determine whether a client can commence a legal malpractice action without taking an appeal in the underlying action based on the likelihood of success of that underlying appeal. The court opined that this standard was the “most efficient and fair to all parties.” Furthermore, because courts are routinely required to analyze whether the plaintiff would have been successful on the merits (i.e., a “case within a case”), the new standard aligned with typical analysis in malpractice actions.

In Grace, the court determined that the defendants failed to establish that the plaintiff was likely to succeed on appeal and affirmed the denial of summary judgment. The upshot of this new standard is that claimants will no longer be required to exhaust the appeal process for cases with little chance of success prior to suing for malpractice. One such example would be a decision involving a claim clearly barred by the statute of limitations. To make use of this defense in circumstances where an appeal could be meritorious, defendants will now need to provide sufficient evidence to show that the plaintiff would have been successful on the underlying appeal. But this approach poses difficulties. For one, it requires the client or subsequent malpractice counsel to make fundamental assumptions on how an appellate court would rule. This approach seems rooted in uncertainty leading many practitioners to follow the safest practice, which is to take an appeal as a matter of course before filing the malpractice lawsuit.

Keywords: litigation, professional services liability, New York, legal malpractice, likely to succeed, appeal

— Saleel V. Sabnis, Goldberg Segalla, LLP, Philadelphia, PA


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