Lewis Brisbois Secures Summary Judgment for Law Firm Client in High-Value Legal Malpractice Suit

New York, N.Y. (February 21, 2019) – New York Partners Mark K. Anesh and Jamie R. Wozman recently obtained summary judgment and the dismissal of a third-party complaint from a New York state court on behalf of their client Brown Rudnick LLP, an international corporate law firm, which had been brought into a multi-million-dollar legal malpractice action as a third-party defendant.

The malpractice action was brought by several business owners who alleged that defendant Morrison Cohen LLP, a New York-based commercial law firm, had cost them a combined $42 million by mishandling a reinvestment transaction. Morrison Cohen then tried to shift some of the liability to Brown Rudnick, claiming that a tax opinion issued by Brown Rudnick to the plaintiff investors regarding potential tax implications of the reinvestment transaction had impacted the plaintiffs’ decision to go through with the transaction.

In sum, we argued that Brown Rudnick did not deviate from the accepted standard of care in issuing the tax opinion and that the tax opinion was not the proximate cause of the plaintiffs’ alleged loss. The court agreed, finding that: (1) the tax opinion did not fall below the degree of skill commonly exercised by an ordinary member of the legal community; (2) the testimony we elicited from the plaintiffs showed a minimal reliance, at best, on the tax opinion and a reliance solely in connection with the treatment of the transaction if analyzed by the IRS; and (3) the tax opinion did not cause the loss alleged to have been sustained by the plaintiffs.

The court also refused to drop the claims against Morrison Cohen, ruling that the plaintiffs had a plausible claim for malpractice against their former attorneys.

Mr. Anesh and Ms. Wozman are both members of Lewis Brisbois’ Professional Liability Practice, which Mr. Anesh also co-chairs.

Further details of this case are available in the Law360 article “Brown Rudnick Slips Liability In Biz Owners’ ESOP Tax Suit” (subscription required).