their action; it would extinguish a claim that plaintiffs had already filed within the limitations period then applicable.
New York's earliest ruling prohibiting the retroactive application of a reduced limitations period to bar an otherwise timely claim occurred nearly 100 years ago. See Gilbert, 159 N.Y. 118, 53 N.E. 753. The Gilbert decision was seemingly grounded in the due process provision of the 14th Amendment to the United States Constitution. Gilbert, 159 N.Y. at 122-123. In recent times, New York's courts have simply repeated the Gilbert rule, typically as part of the legal boilerplate framing discussions of retroactivity, without analyzing its underpinnings and without assessing its continued vitality. In light of recent Supreme Court precedent, those state courts that have continued to cite Gilbert may be wrong in their unexamined assumptions regarding federal due process. See Industrial Consultants, Inc. v. H.S. Equities, Inc., 646 F.2d 746, 749 (2d Cir. 1981) ("The district court was not bound to adopt the Oklahoma court's interpretation of federal constitutional principles, even as applied to Oklahoma statutes.").
In its most recent discussion of retroactivity, the United States Supreme Court considered the evolving nature of due process in economic affairs, and determined that "the constitutional impediments to retroactive civil legislation are now modest." Landgraf v. USI Film Products, 511 U.S. 244, 272, 114 S. Ct. 1483, 1501, 128 L. Ed. 2d at 257 (1994).
The Court did suggest, however, that assorted Constitutional provisions, including the Contract Clause and the Due Process Clause, retain at least some role in matters of retroactivity. 114 S. Ct. at 1497 ("antiretroactivity principles find expression in several provisions of our Constitution."). The Court need not determine whether, after Landgraf, these "modest" constraints are enough to bar retroactivity in the circumstances of this case.
I find that the Gilbert rule is so firmly entrenched in state law that it is likely that New York's Court of Appeals will find that rule rooted in the state Constitution if necessary to preserve it. See People v. Isaacson, 44 N.Y.2d 511, 519, 406 N.Y.S.2d 714, 718, 378 N.E.2d 78 (1978) (New York's due process clause "may impose higher standards than those held to be necessary by the Supreme Court under the corresponding Federal constitutional provisions."); see generally Marshall J. Tinkle, Forward Into The Past: State Constitutions And Retroactive Laws, 65 Temp. L. Rev. 1253 (Winter, 1992) (proposing application of state constitutions to bar retroactivity as a feasible way in which to deal with the perceived inequity permitted under the modern federal approach).
The rule announced in Gilbert is routinely incorporated by New York's courts into discussions of retroactivity. See, e.g., O'Connor, 509 N.Y.S.2d at 473; Alston, 639 N.Y.S.2d at 360; Glod, 546 N.Y.S.2d at 754; McGuirk, 501 N.Y.S.2d at 478; Dunkum, 256 N.Y. at 285. The state's leading legal treatises have followed suit, incorporating this rule into their description of the state's black letter law on retroactivity. See e.g., 75 N.Y. Jur.2d 48 (1989) ("a reasonable time must be allowed after the effective date of the amended or new statute . . ."); McKinney's Cons. Laws of N.Y., Book 1, Statutes § 59 ("Where a statute of limitations shortens the time for the enforcement of an existing right the Legislature must nevertheless afford the parties a reasonable time in which to prosecute their claims . . . "). In recent decisions, coming after Landgraf, trial courts have relied upon Gilbert and declined to enforce amended limitations periods against litigants whose actions were otherwise timely filed. See, e.g., Alston, 225 A.D.2d 424, 639 N.Y.S.2d 359. In fact, the two decisions addressed specifically to the applicability of C.P.L.R. 214 to pending actions, though diverging in result, each reasoned that the retroactive application of the provision would violate the Constitution. See Garcia, N.Y.L.J. 26; Russo, N.Y.L.J. 29.
These numerous expressions of state law counsel against retroactivity in the circumstances of this case. The fact that the Gilbert rule is still invoked -- even after Landgraf -- suggests that the New York courts continue to view it as antithetical to long-held notions of equity and fairness to apply a revised limitations period retroactively to bar an action that was timely when filed. Thus, if forced to confront the potentially faulty assumption that federal due process justifies the continued operation of the rule first announced in Gilbert, the New York Court of Appeals can be expected to preserve that rule -- if need be -- by tieing it explicitly to the due process clause of the state constitution.
II. Merits Of Plaintiffs' Claims
Defendants argue that plaintiffs' claims are substantively deficient. What plaintiffs have identified as malpractice, defendants contend, amounted simply to a series of reasonable decisions by defendants at the time they were made. Moreover, defendants maintain that plaintiffs cannot establish the "but for" causation necessary to sustain their cause of action under either a theory of breach of contract or malpractice. As to the alleged breach of fiduciary duty, relating to the supposed conflict of interest involving defendants and Paul Weiss, defendants argue that there were no actual conflicts, and that plaintiff is again unable to demonstrate causation.
Plaintiffs respond to defendant's motion by cross-moving for summary judgment with respect to two of their claims; i) the alleged malpractice arising out of the failure to present evidence of damages, and ii) the alleged breach of fiduciary duty based upon defendants' conflict of interest. As for their remaining allegations of malpractice, plaintiffs argue broadly -- without any particular discussion of the allegations in the complaint -- that there are triable issues which require that defendants' motion be denied.
A. Malpractice & Breach of Contract
To prevail in a claim of legal malpractice, plaintiffs must establish: "(1) the existence of an attorney-client relationship; (2) negligence on the part of the attorney or some other conduct in breach of that relationship; (3) that the attorney's conduct was the proximate cause of injury to the plaintiff; and (4) that but for the alleged malpractice the plaintiff would have been successful in the underlying action." Sloane v. Reich, 1994 U.S. Dist. LEXIS 2851, 1994 WL 88008, *3 (S.D.N.Y. March 11, 1994) (citations omitted); see also L.I.C. Commercial Corp. v. Rosenthal, 202 A.D.2d 644, 609 N.Y.S.2d 301, 302 (2d Dep't 1994) ("It is well settled that a claim of legal malpractice requires proof that the defendant 'failed to exercise that degree of care, skill and diligence commonly possessed and exercised by an ordinary member of the legal community, that such negligence was the proximate cause of the actual damages sustained by the [plaintiff], and that but for the [defendant's] negligence, the [plaintiff] would have been successful in the underlying action'") (citations omitted).
Plaintiffs' breach of contract theory depends upon much the same showing as does their malpractice claim, Plaintiffs are not alleging that defendants guaranteed any particular result in the arbitration. Instead, they are arguing that, by committing "numerous omissions and negligence," defendants failed to meet their contractual obligation to make their best efforts on plaintiffs' behalf. (Am. Comp. P 90.) Plaintiffs' contract and malpractice claims, "therefore, require identical proof of the deviation of the standard of care, causation, and damages." See DaSilva v. Suozzi, English, Cianciulli & Peirez, 165 Misc. 2d 792, 797, 629 N.Y.S.2d 952, 955 (Sup. Ct. Queens County 1995), rev'd on other grounds, 649 N.Y.S.2d 680 (1st Dep't 1996). Thus, whether framing their claim as breach of contract or attorney malpractice, plaintiffs must demonstrate the same thing, that defendants did not perform with the appropriate level of care, and that plaintiffs suffered damages as a result. Id.
1. Reasonable Professional Decisions
In their Amended Complaint, plaintiffs marshall several allegations in support of their malpractice claim. According to plaintiffs, defendants erred by agreeing to proceed before a single arbitrator, by not objecting to the particular arbitrator selected, by failing to cross examine an adverse witness, by failing to prepare their own witness, by failing to name Bear Stearns as a defendant, by failing to comply with the arbitrator's instruction that they present evidence as to damages, and by failing to highlight Section 10.16 of the Bear Stearns partnership agreement.
As defendants contend, however, none of these decisions -- whatever the alternatives then available -- can now give rise to a viable claim for attorney malpractice.
An attorney cannot be held liable for malpractice for reasonable discretion exercised during the course of a litigation. See Rosner v. Paley, 65 N.Y.2d 736, 738, 492 N.Y.S.2d 13, 14, 481 N.E.2d 553 (1985) ("selection of one among several reasonable courses of action does not constitute malpractice."); see also Hwang v. Bierman, 206 A.D.2d 360, 614 N.Y.S.2d 51, 52-53 (2d Dept. 1994) ("Even where there may be several alternatives, the selection of one of many reasonable defenses does not constitute malpractice."). "An attorney . . . is not held to a rule of infallibility, and is not liable for an honest mistake of judgment where the proper course of action is open to reasonable doubt." DaSilva v. Suozzi, English, Cianciulli, 649 N.Y.S.2d 680, 683 (1st Dep't 1996) (citations omitted). Plaintiffs' kitchen sink approach cannot overcome this basic restraint on a claim of malpractice. None of the identified "errors" by defendant in connection with the unsuccessful arbitration were nearly so egregious that they could now be considered as unreasonable or otherwise sufficient to sustain a claim for malpractice.
In their opposition papers, plaintiffs discuss few of their malpractice allegations, focusing almost exclusively upon their claim that defendants disregarded the arbitrator's clear warning that testimony was required to establish the appropriate measure of relief. In one exchange, Mr. Finley indicated that he found "nothing in the record so far to establish" Mr. Re's requested damages. (Arbitration Hearing Tr. at 209.) Near the end of the proceedings, Mr. Finley reiterated his concern:
Arbitrator: But the thing I fail to see here, and I am telling this to you: assuming hypothetically that the preponderance is with the petitioner, I still haven't got evidence of the money question. Which you said you're going to cover in your brief.
Mr. Wexler: Yes. Well, the evidence is in documentary fashion, and we will explain it to you in the brief.