Attorney Hit With $6.6 Million Malpractice Verdict

Shannon P. Duffy
The Legal Intelligencer
April 23, 2007

A lawyer who is now with Montgomery McCracken Walker & Rhoads was hit with a legal malpractice verdict of more than $6.6 million in a suit brought against her and her former firm by a corporate real estate client that said her poor drafting of a lease agreement sparked a lawsuit in California that cost $4 million to settle.

In his verdict from a nonjury trial, Judge Mark I. Bernstein of Philadelphia's Commerce Court ruled that attorney Karen Senser and Segre & Senser must reimburse Crown Cork & Seal the $4 million it paid to settle the California suit, as well as more than $972,000 in attorney fees and $1.6 million in interest.

Bernstein's one-page ruling included no discussion of the case, but simply announced his verdict and damages awards totaling $6,643,054.

Crown had initially filed suit against both Senser and her partner, Nina Segre, as well as Montgomery McCracken. But in pretrial rulings, 1st Judicial District President Judge C. Darnell Jones II dismissed Segre from the suit and ruled that all claims against Montgomery McCracken were barred on statute of limitations grounds. Jones also dismissed all claims of breach of fiduciary duty and negligence-based malpractice claims.

As a result, the case went to trial only on a contract-based malpractice claim against Senser and her former firm.

Senser's lawyer, James W. Christie of Christie Pabarue Mortensen & Young, said he was "surprised and disappointed" by the ruling, and that he intends to file an appeal.

But Christie said that since Bernstein has not yet written an opinion, he cannot discuss the issues in detail because he is "confused about the basis for the decision." The evidence at trial, he insisted, showed that "there was no malpractice," and that "no contract was breached."

Crown's lawyers -- John M. Elliott, Henry F. Siedzikowski and Mark J. Schwemler of Elliott Greenleaf & Siedzikowski -- said that if the judgment is not satisfied, they, too, intend to appeal and seek reinstatement of the dismissed claims against all of the defendants, including Montgomery McCracken.

The case centered on work done by Segre & Senser in 1996 and 1997 when Crown hired the firm to work on the leasing and sale of a large piece of real estate in Van Nuys, Calif. (Both Senser and Segre joined Montgomery & McCracken in 1998.)

Crown claims in the suit that it asked the firm to draft a lease for the property that could be canceled by Crown if the property sold.

But when Crown evicted Universal Warehouses from the property, the suit says, the tenant sued for wrongful eviction.

After protracted litigation in the California courts, the case went to trial in February 2002, the suit says, and Crown was hit with a verdict against it in the liability phase of the trial.

Crown claims in the suit that the liability verdict pointed up the malpractice by Segre & Senser.

In announcing his ruling, Los Angeles County Superior Court Judge Stanley Weisberg said the lease agreement drafted by Segre & Senser was "inartfully written and done so in a confusing fashion, which lends itself to ambiguities and disagreements."

Weisberg also said in his ruling from the bench that he was forced to decide whose testimony was more credible, and that he rejected Senser's testimony.

According to a transcript of the judge's bench ruling, Weisberg said: "Had she [Senser] meant the first right to cancel to be as expansive as she described it here in court, then she would have described it that way in her written communications and binding agreement she prepared between Crown and Home Depot. She did not do that."

Crown claims in the suit against Senser that Weisberg's ruling on the liability phase of the case forced it to settle for $4 million in order to avoid the prospect of a much larger verdict if the case had gone forward.

But Christie said in an interview that Crown's decision to settle was "voluntary," and that it continued to have "complete defenses" that would have prevented it from facing any money judgment against it in the California court.

Elliott, in an interview, disputed that claim, saying the law is clear that a former client such as Crown has the right to settle under such circumstances where it has already been hit with a liability verdict and faces the prospect of a much larger verdict if it refuses to settle prior to the damages phase.

source : www.law.com