Counsel Concerns

MALPRACTICE CLAIMS/CONFLICTS OF INTEREST

The U.S. Court of Appeals for the Second Circuit reinstated a legal malpractice claim against the New York firm Cowan, Liebowitz & Latman that was brought by former of-counsel Amy Gurvey. Gurvey v. Cowan, Liebowitz & Latman (CLL) P.C., 09-2185. The malpractice claim arose out of CLL's representation of Gurvey on her invention for selling on-the-spot concert recordings, though CLL had withdrawn from representing Gurvey by citing conflicts of interest from its representation of Clear Channel Communications (CCC), whose affiliate InstantLive developed its own process for on-the-spot concert recordings.

Gurvey's suit alleged unfair competition and interference with prospective economic advantage against CLL, InstantLive, Clear Channel and its then-concert affiliate SFX (now Live Nation), as well as misappropriation of trade secrets against all the defendants. Gurvey's suit additionally alleged fraud, breach of fiduciary duty and malpractice by CLL, and state and federal anti-trust claims against several of the defendants. The U.S. District Court for the Southern District of New York dismissed both CCC and Live Nation for lack of personal jurisdiction. The district court then ruled, among other things, that Gurvey's claims for misappropriation and for tortious interference were time-barred, and that the anti-trust and malpractice claims were too vague.

The Second Circuit upheld dismissal of all of Gurvey's claims, except for malpractice and breach of fiduciary duty. Remanding, the appeals court noted in its unpublished decision that “accepting all the factual allegations in the complaint as true, and drawing all reasonable inferences in Gurvey's favor, ' we conclude that Gurvey stated a plausible claim by alleging that the defendants used the information given to them as part of a confidential attorney-client relationship to their own advantage by disclosing it to other clients who then profited therefrom to Gurvey's detriment.”

The U.S. Court of Appeals for the Eleventh Circuit affirmed dismissal of a lawsuit over a law firm retainer agreement. Abecassis v. Cummings, 10-12837. Max Abecassis and his company Nissim Corp. had hired Joseph M. Vanek and Eugene M. Cummings, P.C., to “enhance, defend, and enforce” patents Nissim owned, though the retainer agreement excluded CustomPlay, through which users could skip objectionable content in movies they viewed. Nissim later filed a patent infringement suit against competitor ClearPlay, with whose owners Nissim had discussed licensing CustomPlay rights.

After Vanek and Cummings declined to work on the ClearPlay case, Nissim terminated its retainer agreement with the firm, hired counsel for the ClearPlay litigation and later sued Vanek and Cummings for breach of contract, fraud in the inducement and for a declaratory judgment on contingency-fee royalties from CustomPlay licensing deals. The U.S. District Court for the Southern District of Florida dismissed all three claims ' the last without prejudice, though Nissim failed to file an amended complaint.

The Eleventh Circuit found on the breach of contract claim that Nissim failed to fulfill the retainer agreement's notice-and-cure clause, which gave the law firm 30 days to cure a material breach. According to the appeals court's unpublished opinion: “Nissim's notice of breach was inadequate because it was given roughly two weeks after Nissim settled the ClearPlay litigation. The thirty-day notice requirement ' was expressly intended to give Vanek and Cummings an opportunity to cure any default. Here, Vanek and Cummings were deprived of any opportunity to cure because they were not informed of their purported breach until cure became impossible.”

The appeals court also found that a Florida's four-year statute of limitations barred Nissim's claim for fraud in the inducement.

MALPRACTICE CLAIMS/CONFLICTS OF INTEREST

The U.S. Court of Appeals for the Second Circuit reinstated a legal malpractice claim against the New York firm Cowan, Liebowitz & Latman that was brought by former of-counsel Amy Gurvey. Gurvey v. Cowan, Liebowitz & Latman (CLL) P.C., 09-2185. The malpractice claim arose out of CLL's representation of Gurvey on her invention for selling on-the-spot concert recordings, though CLL had withdrawn from representing Gurvey by citing conflicts of interest from its representation of Clear Channel Communications (CCC), whose affiliate InstantLive developed its own process for on-the-spot concert recordings.

Gurvey's suit alleged unfair competition and interference with prospective economic advantage against CLL, InstantLive, Clear Channel and its then-concert affiliate SFX (now Live Nation), as well as misappropriation of trade secrets against all the defendants. Gurvey's suit additionally alleged fraud, breach of fiduciary duty and malpractice by CLL, and state and federal anti-trust claims against several of the defendants. The U.S. District Court for the Southern District of New York dismissed both CCC and Live Nation for lack of personal jurisdiction. The district court then ruled, among other things, that Gurvey's claims for misappropriation and for tortious interference were time-barred, and that the anti-trust and malpractice claims were too vague.

The Second Circuit upheld dismissal of all of Gurvey's claims, except for malpractice and breach of fiduciary duty. Remanding, the appeals court noted in its unpublished decision that “accepting all the factual allegations in the complaint as true, and drawing all reasonable inferences in Gurvey's favor, ' we conclude that Gurvey stated a plausible claim by alleging that the defendants used the information given to them as part of a confidential attorney-client relationship to their own advantage by disclosing it to other clients who then profited therefrom to Gurvey's detriment.”

The U.S. Court of Appeals for the Eleventh Circuit affirmed dismissal of a lawsuit over a law firm retainer agreement. Abecassis v. Cummings, 10-12837. Max Abecassis and his company Nissim Corp. had hired Joseph M. Vanek and Eugene M. Cummings, P.C., to “enhance, defend, and enforce” patents Nissim owned, though the retainer agreement excluded CustomPlay, through which users could skip objectionable content in movies they viewed. Nissim later filed a patent infringement suit against competitor ClearPlay, with whose owners Nissim had discussed licensing CustomPlay rights.

After Vanek and Cummings declined to work on the ClearPlay case, Nissim terminated its retainer agreement with the firm, hired counsel for the ClearPlay litigation and later sued Vanek and Cummings for breach of contract, fraud in the inducement and for a declaratory judgment on contingency-fee royalties from CustomPlay licensing deals. The U.S. District Court for the Southern District of Florida dismissed all three claims ' the last without prejudice, though Nissim failed to file an amended complaint.

The Eleventh Circuit found on the breach of contract claim that Nissim failed to fulfill the retainer agreement's notice-and-cure clause, which gave the law firm 30 days to cure a material breach. According to the appeals court's unpublished opinion: “Nissim's notice of breach was inadequate because it was given roughly two weeks after Nissim settled the ClearPlay litigation. The thirty-day notice requirement ' was expressly intended to give Vanek and Cummings an opportunity to cure any default. Here, Vanek and Cummings were deprived of any opportunity to cure because they were not informed of their purported breach until cure became impossible.”

The appeals court also found that a Florida's four-year statute of limitations barred Nissim's claim for fraud in the inducement.