Court Permits Plaintiff to Discontinue Underlying Medical Malpractice Action and Sue His Attorneys Instead

GRACE V. LAW, PHILLIPS LYTLE, LLP ET AL. (N.Y. 4th Dept., July 19, 2013)

The plaintiff, represented by the defendant law firms, commenced a medical malpractice action in federal court against the Veteran’s Administration under the Federal Tort Claims Act, alleging that the VA failed to monitor and/or treat his eye condition in a proper and timely manner, causing loss of vision in the right eye. During discovery, it was learned that the treating physician was actually an employee of the University of Rochester. The defendant government commenced a third-party action against the treating physician and the university.

Five months later, the plaintiff’s attorney filed an amended complaint, adding the university and treating physician as defendants. Those defendants made a motion for summary judgment dismissing the amended complaint against them as time-barred and the court dismissed the claims. The government defendant also moved for summary judgment, seeking relief from any claims of negligence since the treating physician was an independent contractor, not an employee of the VA. The motion was granted. The plaintiff’s only surviving claim was that the VA was negligent in failing to reschedule the plaintiff’s ophthalmology appointment. The plaintiff directed his attorney to discontinue the claim.

The plaintiff then commenced a legal malpractice action, claiming that his lawyers were negligent in failing to name the treating physician and the university in a timely fashion in the underlying medical malpractice action.

The defendants in this legal malpractice moved for summary judgment, claiming that since the plaintiff voluntarily discontinued his underlying medical malpractice action and did not appeal the court’s granting of summary judgment to the defendants in that action, the plaintiff should not be permitted to pursue a legal malpractice claim.

The court denied summary judgment to the lawyers, holding that the plaintiff did not waive his right to sue his lawyers. The court held that a per se rulev requiring parties to exhaust the appellate process in the underlying action before commencing a legal malpractice action would force parties to prosecute potentially meritless appeals, discourage settlements, conflict with the plaintiff’s duty to mitigate damages, and could also result in the expiration of the statute of limitations on the legal malpractice claim.

The court also found that the legal malpractice defendants failed to establish that the plaintiff was likely to succeed in an appeal in the underlying action, and therefore, their negligence was not a proximate cause of the plaintiff’s damages.

One justice dissented, holding that an appeal by the plaintiff in the underlying medical malpractice action may have been successful. The dissenting judge also reasoned that allowing a plaintiff to discontinue the underlying case in order to pursue a legal malpractice action will result in increased litigation costs and overburdening of the court system, and force the parties to litigate the very issue that would have been decided on appeal in the underlying action if the plaintiff had only pursued it. The dissent noted that a plaintiff should not be allowed to forego an appeal in the underlying case against a physician in order to choose an “easier target”-defendant attorney. Finally, the dissent noted that if there is a risk that the legal malpractice statute of limitations may run, nothing prevents the plaintiff from commencing a legal malpractice action that is stayed until the appeal in the underlying action is completed and final resolution is had.

Impact: This is a case of first impression and changes the prior rule in the Fourth Department. This court had previously held that if a plaintiff voluntarily discontinues the underlying action, it cannot pursue a legal malpractice claim. Now, this court has opened the door permitting plaintiffs to order their counsel to discontinue the underlying action so that they can pursue a legal malpractice case against the attorneys instead. Since there is a dissent, if the parties do not resolve the case, there is a chance of appeal to the Court of Appeals in the future.