Court Revives Malpractice Suit Against NY Firm

Court Revives Malpractice Suit Against NY Firm
The New York Law Journal by Anthony Lin - June 26, 2008

The Court of Appeals yesterday revived a legal malpractice suit against law firm Larossa, Mitchell & Ross over its representation of a personal injury lawyer found to have defrauded New York City by fabricating evidence in tort cases. The suit, which was previously dismissed because Larossa's ex-client was in dissolution, cannot now be barred on res judicata grounds against a successor firm, the court ruled. The case stems from the travails of the law firm Morris J. Eisen PC. Once one of the New York's top personal injury firms, the firm was accused by the city of falsifying evidence in a 1986 civil suit. Seven lawyers and investigators for the firm, including Morris J. Eisen, were subsequently targeted by federal prosecutors in Brooklyn and convicted on Racketeer Influenced and Corrupt Organizations Act charges in 1991. Mr. Eisen had been represented in the criminal case by James M. Larossa, and the Larossa firm also represented the Eisen firm in the civil suit by the city. Eisen first tried to bring a legal malpractice suit against Larossa after a court granted partial summary judgment to the city on its fraud claims. The city was awarded $2.1 million.

The suit claimed Larossa did not adequately oppose the city's summary judgment motion, failing to present evidence that would have shown that, notwithstanding any false testimony, the city was actually responsible for the injuries in the cases at issue. Eisen's complaint was dismissed in January 2000 on the grounds that the firm was a dissolved professional corporation for failure to pay its franchise taxes, and it lacked capacity to bring the suit. A successor firm, Landau, with Mr. Eisen as an assignee, filed an identical suit, but it was barred on res judicata grounds. The Court of Appeals reversed. In a decision written by Judge Carmen Beauchamp Ciparick, the Court said the dismissal without prejudice in Landau v. Larossa, Mitchell & Ross, 604476/01, "lacks a necessary element of res judicata - by its terms such a judgment is not a final determination on the merits." The Court noted that only the issues of Eisen and Landau's standing and capacity had thus far been litigated.

"We remain mindful that if applied too rigidly, res judicata has the potential to work considerable injustice," the Court said, adding that "Landau has yet to have its day in court to litigate the merits of its legal malpractice claim against defendants and we therefore find that res judicata is not applicable to plaintiff in this case." Mr. Eisen was represented in the appeal by John P. Coffey of Bernstein Litowitz Berger & Grossman, who said he was very pleased Mr. Eisen would get to litigate his claims after "many, many years." Larossa was represented by Nancy A. Breslow of Martin, Clearwater & Bell. The accusations and subsequent prosecution of Mr. Eisen was a major scandal in the legal community at the time. In one case, the personal injury lawyers put on one witness who was in jail at the time of the accident he apparently saw. They also once used a pickax to enlarge a pothole for a photograph to be used as a trial exhibit. But Mr. Coffey said yesterday that Mr. Eisen was found guilty for the actions of his underlings and noted that he was dropped as an individual defendant from the city suit.