The plaintiff alleges that it is entitled to summary judgment in its favor because the defendants never disputed their legal bills and, in fact, partially paid the total amount due. However, on a motion for summary judgment, evidence of an oral objection to an account rendered, made with some specificity, is enough to rebut an inference of an implied agreement to pay the stated amount. See Kaye Scholer Fierman Hays & Handler v. L.B. Russell Chemicals, Inc., _AD2d_, 667 NYS2d 753 (1st Dept. 1998); Collier Cohen Crystal & Bock v. McNamara, 237 AD2d 152 (1st Dept. 1997). Here, the defendants have submitted two affidavits from defendant Orlinsky which detail numerous conversations he allegedly had with Bert J. Lewen, a member of the plaintiff law firm, in which he repeatedly complained about and disputed the legal bills which the defendants were receiving from the plaintiff. Since these affidavits raise issues of fact which can only be resolved at trial, they are sufficient to defeat the plaintiff's summary judgment motion.
The plaintiff has also moved, pursuant to CPLR 3211(7), to dismiss the defendants' counterclaim which asserts that the firm committed legal malpractice by failing to advise the defendants of the possibility that their insurance might cover the costs of the intellectual property litigation in Florida.. The plaintiff argues that its professional responsibilities and duties as attorneys for the defendants only extended to the actual litigation and that it was not incumbent upon the law firm to advise the defendants about matters which related to the financing of the litigation. The plaintiff argues that the defendants, as the holders of the insurance policy, had the sole responsibility for realizing that the policy might cover the lawsuits against them and for submitting a claim for coverage.
In opposing the plaintiff's motion to dismiss their counterclaim, the defendants argue that an attorney who is retained to represent a client in litigation is not merely a technician whose responsibilities, as plaintiff suggests, are limited to legal strategy. They assert that an attorney is also a counselor who has a duty to advise a client who has been sued on all matters pertaining to the litigation so as to minimize the client's liability. Thus, the defendants argue that they would not have incurred the plaintiff's legal fees had the firm advised them about the possibility that the claims against them were covered by insurance. They point out that they did not incur legal fees after February, 1994 because the law firm which replaced the plaintiff provided them with prompt and proper advice about their insurance coverage.
An attorney may be liable for malpractice if it is established that his or her conduct fell below the ordinary and reasonable skill and knowledge commonly possessed by a member of his or her profession. See DaSilva v. Suozzi English Cianciulli & Peirez, 233 AD2d 172, 174 (1st Dept. 1996). Whether malpractice has been committed is ordinarily a factual determination to be made by the jury. See Corley v. Miller, 133 AD2d 732, 735 (2nd Dept. 1987). Moreover, "unless the ordinary experience of the fact-finder provides sufficient basis for judging the adequacy of the professional service, or the attorney's conduct falls below any standard of due care, expert testimony will be necessary to establish that the attorney breached a standard of professional care and skill." Greene v. Payne Wood and Littlejohn, 197 AD2d 664, 666 (2nd Dept. 1993). The plaintiff has failed to cite a single case supporting its contention that, as a matter of law, it did not owe the defendants a duty to inquire about their insurance coverage. The court has been unable to find any New York authority on this point. However, in a recent decision, the Supreme Court of California found that for the purposes of the statute of limitations on legal malpractice claims, the plaintiff manufacturer was deemed to have suffered "actual injury" when its law firm failed to investigate its insurance coverage or advise the manufacturer to notify its insurer of the underlying suit. See, e.g., Jordache Enterprises, Inc. v. Brobeck Phleger & Harrison, 958 P.2d 1062 (Cal. 1998). It was implicit in the decision that, under certain circumstances, the failure of a law firm to inquire about its client's insurance is actionable.
This court is persuaded that the plaintiff's failure to investigate the defendants' insurance coverage or alert them to the potential availability of insurance to cover their litigation expenses may have constituted legal malpractice. The issue of whether the plaintiff committed legal malpractice raises numerous questions of fact, including but not limited to, the sophistication of each party regarding potential insurance coverage and the scope of the plaintiff's engagement. It is particularly noteworthy that counsel which succeeded the plaintiff promptly pursued the insurance issue to the defendants' substantial benefit.
Therefore, the issue of whether or not the plaintiff breached a standard of professional care and skill can only be resolved at trial. The plaintiff's motion to dismiss the counterclaim with respect to this issue is denied.
As to the defendants' cross-motion for an order directing that the plaintiff accept their amended pleadings, the court agrees with the defendants that they are entitled to serve these pleadings without leave of court since the plaintiff's motion to dismiss their original counterclaim tolled the plaintiff's time to answer the counterclaim which, under CPLR 3025(a), also tolled the defendants' time to amend their pleadings as of right. See Sholom & Zuckerbrot Realty Corp. v. Coldwell Banker Commercial Group, Inc., 138 Misc2d 799, 800-801 (Sup. Ct. Queens Co. 1988).
The plaintiff has also moved to dismiss the amended counterclaim. The law firm argues that the defendants' allegation that the plaintiff had committed malpractice by failing to advise the defendants of the potential costs, liability and damages which they could incur if they marketed and used the disputed hanger tags is barred by the statute of limitations and, in addition, fails to state a cause of action.
As to the statute of limitations, CPLR 203(d) provides that a counterclaim is not barred "if it was not barred at the time the claims asserted in the complaint were interposed, except that if the . . .counterclaim arose from the transactions, occurrences, or series of transactions or occurrences, upon which a claim asserted in the complaint depends, it is not barred to the extent of the demand in the complaint. . .". Here, the Florida litigation against the defendants commenced in December, 1990. As of the commencement of that litigation, the defendants should have become aware, if they had not already, of the potential costs, liability and damages of their use of the hanger tags. Thus, the statute of limitations began to run as of this time. The defendants, however, never brought a legal malpractice claim against the plaintiff until the present action was commenced by the plaintiff in August, 1996 and their counterclaim is thus barred by the three-year statute of limitations contained under CPLR 214. Nevertheless, since the plaintiff's claim is based on the legal services which it provided to the defendants and the counterclaim asserting a failure to inform arises from the alleged inadequacy of these legal services, the amended counterclaim is not barred, under CPLR 203(d), to the extent of the demand asserted in the complaint.
Finally, the amended counterclaim clearly states a cause of action for legal malpractice. The failure of an attorney to provide material information to a client about the legal implications of the actions which the client is deciding whether to undertake falls squarely within an attorney's obligations and duties. The plaintiff's assertion that the defendants were, in fact, advised about the legal implications of marketing the disputed hanger tags and, in addition, were otherwise aware of the costs they would be exposing themselves to by doing so is more properly addressed in a summary judgment motion or at trial.
Accordingly, the plaintiff's motion for summary judgment on the second cause of action is denied. The defendants' cross-motion to require the plaintiff to accept its amended answer and counterclaims is granted. The plaintiff's motion to dismiss the counterclaims is denied with the exception that the defendants' assertion of legal malpractice with respect to the plaintiff's alleged failure to advise them of all of the legal implications of marketing the hanger tags is limited to the amount of damages sought in the complaint.
