Actions For Legal Malpractice

From the 1980‘s onward, Carmen D. Caruso has frequently represented both plaintiffs and defendants in cases in which other lawyers or law firms have been charged with legal malpractice, breaching their fiduciary duties to their clients (including but not limited to fee disputes and allegations of self-dealing), or otherwise violating their ethical responsibilities to their clients or the court.

For example:

• Caruso obtained a substantial settlement on behalf of a client who was victimized by the negligence of a prominent intellectual property law firm in failing to procure available insurance coverage for the defense of an action against the client for alleged copyright infringement. This case was especially egregious because what started as a bad mistake became an outrageous cover-up. Under cross-examination at their depositions, the defendant lawyers badly contradicted each other. The cover-up was exposed and the case quickly settled.
• Caruso successfully defended a law firm in a nearby mid-western state that was charged with malpractice in negligently preparing franchising agreements and disclosure documents for their client, a local business that sought to launch a national franchising program, and then allegedly trying to cover up their errors. There was no cover-up, and the damage claim was wildly inflated.
• Caruso successfully defended a law firm in multiple federal securities fraud and RICO actions in connection with the lawyers’ offering of a failed oil and gas investment opportunity, where the lawyers had invested in the deal with their clients and allegedly received favorable treatment over the passive investors.
• Defense of transactional lawyers from allegations of negligence in the closing of the sale of a client’s business, where the law firm accepted (on behalf of their client) an unenforceable guaranty from the buyer.

Protecting Client in Fee Dispute

A prominent CEO retained Caruso to resolve his fee dispute with his lawyers at a prominent matrimonial law firm, and an equally prominent firm representing his wife in their divorce case, after the two law firms collectively billed more than $3 million in fees while being unable to bring the case to a successful negotiated conclusion.

Legal Malpractice Claims against a prominent IP law firm

Caruso has filed claims for legal malpractice against an IP law firm that was initially retained to protect the patents and trademarks of a “green” technology start-up company, but then expanded its scope of representation to prepare a franchise agreement for its client to use in selling franchises, but without complying with the FTC Franchise Rule and applicable state laws.

Sanctionable Conduct By Lawyers In Litigation

Caruso has obtained sanctions against opposing counsel who broke the rules, and has defended other lawyers from sanctions motions. For example:

• In Brandt v. Schal Associates, Inc., 960 F.2d 640, 649 (7th Cir. 1992), Caruso and his former partners obtained one of the largest sanctions ever awarded by a federal court under Federal Rule of Civil Procedure 11 in favor of a construction management client firm that had been frivolously sued for RICO violations arising from three large scale construction projects. After the federal court issued a liability opinion that was over 100 pages long, the court held an evidentiary hearing to determine the sanction. The offending attorney presented expert evidence in mitigation that he had allegedly suffered a silent heart attack and became clinically depressed when he read the lengthy liability opinion. The court rejected these arguments and the entire award, including 100% of the fees incurred in defense of the underlying RICO case, the “fees on fees” in pursuing the Rule 11 motion, and the fees on appeal, was affirmed on appeal.
• Caruso successfully defended lawyers in a client’s in house legal department against a motion for Rule 11 sanctions where the corporate attorneys had brought suit against a New Jersey construction firm with reputed ties to organized crime, alleging that there had been a fraud scheme with respect to regional store remodeling projects.
• In a case where Caruso was initially asked to serve as local counsel for an East Coast firm that was defending a client in Chicago, Caruso wound up defending those attorneys from sanctions under 28 U.S.C. §1927 for filing and then withdrawing claims against a franchisor that the court found to have been without sufficient merit to have been filed.

Challenging Legal Relationships In Underlying Deals

Caruso has also had success in examining the manner in which opposing parties structured their relationships with their transactional counsel in connection with franchise offerings that Caruso alleged to be tainted by fraud.

• In two separate actions involving U.S. subsidiaries of a foreign company, where the subsidiary was franchising or sub-franchising on behalf of the parent company, Caruso found advantage for his clients (U.S. franchisees) from the manner in which the franchisor’s counsel had structured their relationship to the foreign parent company. In the first case, the U.S. lawyers had not been retained by the foreign parent company, which enabled Caruso to argue that communications between the U.S. lawyers and the foreign parent company were not privileged – and hence were discoverable. In the second case, where the foreign parent had retained the Illinois law firm that was representing the U.S. licensor, that fact supported the exercise of personal jurisdiction over the parent company in Illinois.

All of these cases have a common denominator. Questions of unethical or other improper conduct by other lawyers are very serious and can affect the results in your case. Caruso’s experience as a “lawyer’s lawyer” gives you the added advantage of knowing that your case will be litigated properly and that you will not be victimized by overreaching lawyers on the other side.

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