CHAPTER 10 - 10-4 OTHER LEGAL EXPOSURES FROM NONCLIENTS

• Jurisdiction: United States

10-4 Other Legal Exposures from Nonclients

10-4:1 Assignability

Under Connecticut law, can a former client assign his claim, or the proceeds from that claim, to an adversary? In Gurski v. Rosenblum & Filan, LLC, the Supreme Court said "no," determining that that would violate public policy.⁷³

In Gurski, the underlying action was a medical malpractice action brought by Lee against his podiatrist Gurski.⁷⁴ After appearing on behalf of Gurski in court, Gurski's counsel was informed by the medical malpractice carrier for Gurski that it was not going to defend or indemnify Gurski.⁷⁵ Gurski's counsel withdrew from the case and informed Gurski he needed to get a new lawyer and that there was a forthcoming settlement conference that Gurski or his new attorney needed to attend.⁷⁶ No one attended the settlement conference and Gurski was defaulted.⁷⁷ A hearing in damages ensued and a judgment was entered against Gurski for $152,000.⁷⁸ Gurski filed for bankruptcy.⁷⁹ The bankruptcy court ordered that Gurski assign to Lee any interest and recovery in the legal malpractice case and the bankruptcy estate retained counsel to bring a claim against Gurski's attorney for legal malpractice.⁸⁰ Suit was brought against the firm which raised the defense that this violated public policy and on that basis moved for a directed verdict.⁸¹ At the conclusion of the law firm's case, the parties agreed by stipulation that the issue of the assignment would be reserved for the court, and the jury returned a verdict in favor of plaintiff in the amount of $136,800.⁸² The law firm filed a motion to set aside the verdict, which was denied.⁸³ The law firm took an appeal, and the Supreme Court agreed with its position.⁸⁴

In so doing, the Gurski Court analyzed cases from other jurisdictions that examined the public policy concerns of assigning legal malpractice claims. The court was particularly concerned that allowing the assignment would "necessitate a duplicitous change in the positions taken by the parties in the antecedent litigation."⁸⁵ "For the law to countenance this abrupt and shameless shift of positions would give prominence (and substance) to the image that lawyers will take any position, depending upon where the money lies, and that litigation is a mere game and not a search for truth."⁸⁶

The court was also concerned that "[p]ermitting an assignment of a legal malpractice claim to the adversary in the underlying litigation that gave rise to the legal malpractice claim also creates the opportunity and incentive for collusion in stipulating to damages in exchange for an agreement not to execute on the judgment in the underlying litigation."⁸⁷ The Gurski court went on to find that legal malpractice actions are not assignable due to the extreme personal nature of them between the attorney and his/her client. The Court recognized that there is an extremely high level of trust and privacy associated with attorneys and their clients which is the main reason for the nonassignable policy of legal malpractice claims.

The Gurski Court did not adopt a per se rule prohibiting the transfer or assignment of legal malpractice claims, as have other states.⁸⁸

10-4:2 Fair Debt Collection Practices

Attorneys who assist in collecting consumer debts are potentially liable for violations of...