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October 31, 1984


The opinion of the court was delivered by: SOFAER



 Plaintiff, Cyrus Hashemi, is a citizen of the Islamic Republic of Iran and the Dominican Republic.Although Hashemi now resides in London, during all times relevant to this litigation he resided in New York, where he was acting as Senior Advisor to Bank Sepah. Defendant, Thomas G. Shack, Jr., is an attorney licensed to practice law in Washington, D.C., and was a member of the defendant, Abourezk, Shack & Mendenhall, P.C., a Washington, D.C. firm, whose name was subsequently changed to Shack & Kimball, P.C. The basis for jurisdiction is diversity of citizenship, 28 U.S.C. § 1332 (1982), and New York law applies.

 Hashemi seeks damages against defendants for legal malpractice based upon defendants' alleged failure to protect his interests in three civil suits in the New York State Supreme Court, in which he had been named as a defendant. Defendants' alleged failure to protect Hashemi's interest result in defaults in those actions, causing Hashemi to retain separate counsel to vacate the defaults. Hashemi's second cause of action is based upon the defendants' alleged refusal to submit a signed affidavit in connection with Hashemi's motions to vacate the defaults, unless Hashemi executed a waiver and release of all claims against defendants. Plaintiff argues that this refusal constituted willful misconduct; gross, reckless and wanton indifference to professional responsibilities; and an egregious breach of fiduciary duty. Complaint PP20-22. Plaintiff and defendants have moved for summary judgment pursuant to Rule 56, Fed. R. Civ. P. The material facts are not in dispute and, for the reasons that follow, defendants' motion for summary judgment is granted.

 I. The Attorney-Client Relationship.

 The requisite elements of a legal malpractice action are (1) the existence of an attorney-client relationship creating a duty of care in the attorney, and (2) the failure to perform, or breach of, that duty. 7A C.J.S. Attorney and Client § 255, at 461 (1980). In general, the relationship of an attorney and client is contractual, and the rules governing contract formation determine whether such a relationship has been created. Id.. § 169, at 249. Formality is not an essential element in the employment of an attorney, and since "[t]he initial arrangements for representation are often informal . . ., it is necessary to look at the words and actions of the parties." People v. Ellis, 91 Misc.2d 28, 35, 397 N.Y.S.2d 541, 545 (N.Y. Sup. Ct. 1977).

 On February 5, 1981, Hashemi telephoned defendant Shack concerning three multi-million dollar actions pending against him in the New York State Supreme Court. At the time of this request, the defendant Abourezk, Shack and Mendenhall, P.C., was counsel to the Government of Iran, and plaintiff allegedly made this request "on the grounds that the New York civil actions were based upon the plaintiff's duties as a Senior Advisor to Bank Sepah which had by then been nationalized by the Government of Iran." Shack Affidavit at 3. Hashemi argues that in this conversation and in a follow-up letter to Shack, dated February 6, 1981, he "requested defendants' professional assistance" in these three actions. Cross-Motion for Summary Judgement at 4-5.

 Shack argues that Hashemi, "in his communication of February 6, 1981, did not request either Abourezk, Shack & Mendenhall, P.C., or [Shack] personally to represent him in the New York actions. . . ." Shack Affidavit at 3. Instead, Hashemi asked Shack if he would "arrange New York counsel to take care of this as this relates to [his] responsibility as Senior Advisor. . . ." Shack Affidavit, Ex. A. (Letter of February 6, 1981). Shack asserts further that, in the telephone conversation of February 5, 1981, he told Hashemi that neither he nor his law firm could represent him, nor retain counsel for him at the expense of the Government of Iran, without Iran's express authorization; Shack offered, however, to advise the Foreign Ministry of the Government of Iran that they should provide Hashemi with defense counsel. Shack Affidavit at 3. Shack also claims he told Hashemi that he and his firm would monitor the case, but that "plaintiff should protect his own interests in the interim by alerting counsel representing him in other matters." Shack Affidavit at 3-4.

 These contrasting versions fail to create a genuine dispute of material fact, because the absence of any contractual agreement between plaintiff and defendants on the issue of representation is established by Hashemi's letter of February 6, 1981. This letter clearly reflects Hashemi's understanding that defendants would not represent him: "I would appreciate [it] if you [would] arrange New York counsel to take care of this as this relates to my responsibility as Senior Advisor, looking over the activities of Bank Sepah, right after the Revolution." Shack Affidavit, Ex. A (Letter of February 6, 1981). Another letter from Hashemi to Shack, dated March 2, 1981, also reflects Hashemi's understanding that Shack did not represent him, but rather that Shack was trying to get authorization from Iran to act as, or to obtain, counsel for him; the letter also reveals that Hashemi knew that action needed to be taken immediately in the New York actions to avoid defaults:

 The 20 days is up and I would suggest that you communicate as quickly as possible so we may not face any initial problem with this lawsuit. I do appreciate your efforts and the fact that you have advised our foreign ministry to provide defense counsel.

 Shack Affidavit, Ex. C (Letter of March 2, 1981). Hashemi's March 2, 1981 letter indicates he was aware that he was already in default; he nevertheless made no appearance in the suit and failed to obtain counsel to make an appearance for him. It was not until Hashemi received a letter from Shack, dated September 23, 1981, informing him conclusively that Iran had failed to authorize appointment of counsel on his behalf that he retained his own counsel. See Bergadano Affidavit, Ex. C; Complaint at 4.

 Hashemi argues that defendants' actions "constituted a constructive agreement on the part of defendants to protect plaintiff's interests in the New York litigation, or [estop] defendants from disclaiming that they were retained in those actions." Cross-Motion for Summary Judgment at 3. The actions which Hashemi alleges constituted a constructive agreement on the part of the defendants included: (1) soliciting from Hashemi the summonses which had been served on him in the New York actions; (2) advising the Government of Iran that it should provide defense counsel; and (3) using the word "we" in regard to filing a notice of appearance, informing the court as to who would represent plaintiff, and monitoring the suits on plaintiff's behalf. The language Hashemi relies on, from Shack's letter of February 23, 1981, reads:

 I have received the summonses and notices of suit in the above referenced cases which you sent to me by letter of February 6, 1981. Since there was no complaint served, we are not required to file an answer. However, we must file a notice of appearance -- we must inform the court who will represent you -- within 20 days if you were personally served, or within 30 days if you were served by mail. . . .

 In the meantime, we are monitoring the suits and are informing the Foreign Ministry that the Government of Iran should provide you with defense counsel because the suits are based on your ...

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