Court explores the balance between a lawyer’s obligation to investigate the facts, and a lawyer’s reliance on what the client chooses to disclose or not disclose
March 09, 2021
Pursuant to Part 130 , attorneys are obligated to undertake an investigation of a case. But is an attorney responsible for ignorance of facts which the client neglected to disclose? “No,” says the Commercial Division.
In a recent decision by Justice Andrew Borrok, the Commercial Division discussed this very issue. In Morgan and Mendel Genomics v Amster Rothstein & Ebenstein, LLP, Albert Einstein College of Medicine (“Einstein”) hired the law firm of Amster Rothstein & Ebenstein, LLP (“Defendant”) to assist Einstein in obtaining a patent for its new genetic testing technology, invented by Einstein employees, Dr. Ostrer and Mr. Loke. By way of background, the publication date of the technology is critical because it starts the one-year clock for filing a patent application.
In Morgan and Mendel Genomics, Einstein advised Defendant that it first published an article (the “Article”) about its technology in March 2012—which would start the one-year timeframe by which Defendant would have to file a patent application. In addition, Einstein submitted to Defendant an Invention Disclosure Form, which confirmed in writing that the technology was first published in March 2012. However, Defendant learned, on its own, that the Article appeared online on January 11, 2012 and communicated that fact to Einstein. And so, Defendant filed a provisional patent application on January 8, 2013 and a non-provisional application on January 8, 2014.
On September 14, 2016, the United States Patent and Trademark Office (the “USPTO”) rejected the application as untimely because the Article was available online on December 15, 2011, more than a year before the provisional patent application was filed with the USPTO.
On November 22, 2019, plaintiff Morgan and Mendel Genomics (“Plaintiff”), who purports to have entered into an agreement with Einstein wherein Einstein assigned to Plaintiff its claim against Defendant, commenced an action for legal malpractice.
Defendant moved to dismiss the motion under CPLR § 3211(a)(7) arguing , among other things, that the law firm was retained solely to file a patent application – not to investigate whether the information provided to it by its client was not false. Justice Borrok concluded that “[a]lthough an attorney is responsible for investigating and preparing a client’s case, the attorney ‘should not be held liable for ignorance of facts which the client neglected to tell him or her.’” To that end, the Court determined that “Plaintiff’s claim is doomed by the fact that the claim is premised on false information which the Defendant’s lawyers were allowed to rely on and for which they were not hired to investigate (i.e. that the article had in face been published earlier).”
The Second Department in Green v Conciatori similarly dismissed a legal malpractice claim against attorneys who represented plaintiff in a personal injury action. In Green, plaintiff alleged that his lawyers were negligent in failing to discover certain facts about the plaintiff’s accident, which differed from the facts disclosed to them by their client, i.e., the plaintiff. The Second Department held that “[w]hile an attorney has a responsibility to investigate and prepare every phase of a client’s case, an attorney should not be held liable for ignorance of facts which the client neglected to tell him or her.” In Green, the court further determined that plaintiff did not show that counsel “failed to exercise the ordinary reasonable skill and knowledge possessed by a member of the legal profession” in relying on the information provided by the client.
The Third Department in Parksville Mobile Modular, Inc. v Fabricant also determined that although an attorney “has the responsibility to ‘investigate and prepare every phase’ of his client’s case,” “an attorney should not be held liable for his ignorance of facts which his client neglected to tell him” (73 AD2d 595, 598 [3d Dept 1979] [holding that the fact that the attorney did not develop as full record as was developed following a trial cannot be grounds for a legal malpractice claim]). In Thompson v Seligman, however, the Third Department denied defendant law firm’s motion for summary judgment on a legal malpractice claim where the plaintiff was under a mistaken belief as to an important fact regarding its worker’s compensation claim, and the attorney failed to review the record evidence, which would have shown plaintiff’s mistaken belief (Thompson v. Seligman, 53 A.D.3d 1019 [3d Dept 2008]). There, the court stated that the question becomes “whether, in the performance of that duty [to investigate and prepare for his client’s case], defendants “ ‘exercise[d] that degree of care, skill, and diligence commonly possessed and exercised by a member of the legal community’ ” (see id.).
Can you safely rely on facts provided to you by your clients? It depends. The Commercial Division says: yes, you can and a client’s failure to provide his or her counsel with correct information is not a basis for a legal malpractice claim. However, the steps one takes to investigate will always, of course, be judged by whether they were consistent with the care and diligence exercised by others in the field.