Carmel v. Lunney
| Decision Date | 09 July 1987 |
| Citation | 511 N.E.2d 1126,70 N.Y.2d 169,518 N.Y.S.2d 605 |
| Court | New York Court of Appeals Court of Appeals |
| Parties | , 511 N.E.2d 1126 Paul F. CARMEL, Appellant, v. J. Robert LUNNEY et al., Doing Business as Lunney & Crocco, Esqs., Respondents and Third-Party Plaintiffs-Respondents, et al., Defendant. John W. Tabner et al., Third-Party Defendants-Respondents, et al., Third-Party Defendants. |
In this action for legal malpractice based upon the alleged breach of an attorney's duty to advise his client of potential conflicts of interest and of the possible criminal consequences of incriminating testimony given during a Martin Act hearing, the undisturbed determination of the client's guilt in the subsequent criminal prosecution precludes him, as a matter of law, from recovering for civil damages flowing from the allegedly negligent representation.
Plaintiff, Paul Carmel, worked as a licensed securities salesman with the brokerage firm of Fittin, Cunningham & Lauzon. Among the offerings of that firm was the investment service of Michael Starbuck, Inc. & Associates. From 1978 to 1980, plaintiff advised various Fittin clients to transfer their securities to the Starbuck operation, promising them guaranteed returns on their investments. In January 1980, the Starbuck enterprise came under investigation for violation of State and Federal securities regulations. Plaintiff and other employees and principals at Fittin were subpoenaed by the Attorney-General to testify at a hearing incident to a Martin Act (General Business Law art. 23-A) investigation of Fittin's role in the promotion and sale of interests in Starbuck. On Fittin's recommendation, plaintiff retained defendant law firm, Lunney & Crocco, to represent him at the Martin Act hearing. Plaintiff claims he was unaware at the time that defendants had already appeared at hearings before the Securities and Exchange Commission on behalf of Fittin principals and coemployees on the Starbuck matter. Plaintiff alleges that defendants counseled him to appear at the Martin Act hearing and to inform the Attorney-General unreservedly about his activities at Fittin. Subsequently, a Grand Jury returned two indictments charging plaintiff with various Martin Act violations, grand larceny, scheming to defraud, and conspiracy.
Defendants never represented plaintiff after the Martin Act hearing. Following his indictment, plaintiff retained the firm of Tabner, Carlson, Farrell & Cholakis, third-party defendants herein, to defend him in the criminal prosecution. Ensuing plea negotiations resulted in plaintiff pleading guilty to a misdemeanor violation of the Martin Act (General Business Law § 352-c[1][c] ), in full satisfaction of the indictments. Plaintiff then brought this malpractice action against defendants for failing to advise him of the possible criminal implications of testimony given at a Martin Act hearing, of his privilege against self-incrimination, of the possibility of receiving immunity in exchange for cooperating with the Attorney-General in furnishing evidence against actual principals in the fraud scheme, and of potential conflicts of interest stemming from defendants' having already represented other Fittin associates--all in breach of their fiduciary duty, their attorney-client relationship, and the retainer agreement. Plaintiff claims damages in...
To continue reading
Request your trial
-
Hicks v. Nunnery
...that in Massachusetts, a rule applicable to all "criminal malpractice" cases is used. s 104. The majority also considers Carmel v. Lunney, 511 N.E.2d 1126 (N.Y. 1987), to be persuasive. Majority at s 43 n.10. But, as we have seen, New York is the birthplace of Palsgraf, and Justice Cardozo'......
-
Wiley v. County of San Diego
...v. Aiken (1991) 409 Mass. 699, 569 N.E.2d 783, 785; Morgano v. Smith, supra, 879 P.2d at pp. 737-738; Carmel v. Lunney (1987) 70 N.Y.2d 169, 173, 518 N.Y.S.2d 605, 607, 511 N.E.2d 1126; Stevens v. Bispham, supra, 851 P.2d at p. 566; Bailey v. Tucker (1993) 533 Pa. 237, 247, 621 A.2d 108, 11......
-
Dockery v. Tucker, 97-CV-3584 (ARR).
...claim of innocence, in order to state a cause of action for legal malpractice in a criminal case. See Carmel v. Lunney, 70 N.Y.2d 169, 173, 518 N.Y.S.2d 605, 511 N.E.2d 1126 (1987). According to the New York Court of Appeals, so long as the plaintiff's underlying conviction "has not been su......
-
Canaan v. Bartee
...783 (1991); Rodriguez v. Nielsen, 259 Neb. 264, 273, 609 N.W.2d 368 (2000); Morgano, 110 Nev. at 1029-30; Carmel v. Lunney, 70 N.Y.2d 169, 173, 518 N.Y.S.2d 605, 511 N.E.2d 1126 (1987); Mahoney v. Shaheen, Cappiello, Stein & Gordon, P.A., 143 N.H. 491, 496, 727 A.2d 996 (1999); Bailey, 533 ......
-
The lawyer's license to discriminate revoked: how a dentist put teeth in New York's anti-discrimination disciplinary rule.
...Davis v. Klein, 671 N.E.2d 1268, 1269 (N.Y. 1996) (setting out elements for prima facie case of lawyer malpractice); Carmel v. Lunney, 511 N.E.2d 1126, 1128 (N.Y. 1987) (discussing the requirements for stating a cause of action for a lawyer malpractice claim in a criminal (252) The nature o......
-
Legal malpractice in the criminal context: Is postconviction relief required?
...Shaw v. State Dep't of Admin., 816 P. 2d 1358 (Alaska 1991). (3) Morgano v. Smith, 879 P. 2d 735,737 (Nev. 1994). (4) Carmel v. Lunney, 70 N.Y. 2d 169 (5) Stevens v. Bispham, 851 P. 2d 556, 560 (Or. 1993). (6) Peeler v. Hughes & Luce, 909 S.W. 2d 494 (Tex. 1995). (7) Mahoney v. Shaheen,......