Judd Burstein, P.C. V Raymond A. Long
1:15-cv-05295
S.D.N.Y.Aug 16, 2017Background
- Long retained Judd Burstein, P.C. under a May 14, 2013 retainer to handle four matters: two active litigations (Parry and Quorum II) for a $300,000 flat fee (with potential bonus), and two contemplated matters (a rescission claim and a qui tam FCA claim) on contingency.
- The retainer contained three exculpatory clauses permitting cancellation/withdrawal and providing that a “fair and reasonable fee” would be determined if Burstein was discharged or withdrawn by court order.
- Long alleges Burstein did little or no work on the Parry Action, delayed appearance, later sought to withdraw (citing ethical concerns), and disclosed alleged violations of a protective order; Burstein withdrew by court order in July 2015.
- Burstein prosecuted Quorum II to judgment (Long’s claims dismissed); Burstein never filed the Rescission Action or the Qui Tam Action, and Long contends the statute of limitations expired on the qui tam claim while Burstein represented him.
- Long counterclaimed for breach of contract (seeking cover fees and alleged settlement value), legal malpractice (seeking $5M for lost qui tam value), and breach of fiduciary duty (seeking successor counsel fees). Burstein moved to dismiss.
- The court dismissed all three counterclaims but granted Long leave to replead once, finding the pleadings deficient as to damages measure, FCA plausibility/timeliness, and causation.
Issues
| Issue | Plaintiff's Argument (Long) | Defendant's Argument (Burstein) | Held |
|---|---|---|---|
| Measure of damages for breach of contract | Long seeks successor attorney fees for Parry and Qui Tam and the Parry action’s settlement value as direct damages | Contract’s exculpatory clause limits remedy to a fair and reasonable fee (and return of flat fee); alleged consequential damages are speculative | Dismissed: damages sought are consequential/speculative and not shown to have been contemplated; recoverable direct measure is at most refund of the $300,000 flat fee; Long’s claimed cover fees and settlement value dismissed |
| Legal malpractice — causation / "case within a case" | Burstein’s failure to file or pursue Qui Tam caused loss of a meritorious FCA suit worth $5M | Long fails to plead the underlying FCA claim with the particularity required and cannot show he would have prevailed; statute of limitations likely ran before retention | Dismissed: malpractice claim fails because Long did not plead the qui tam with Rule 9(b) particularity or show he could have prevailed; SOL bars the underlying FCA claim, so causation fails |
| FCA pleading particularity | Long alleges Northwestern submitted fraudulent Medicare/Medicaid claims arising from patient infections discovered in 2003 and litigation-related facts | Allegations are vague, lack details about specific false claims and timing; information appears public or otherwise untimely | Dismissed (as to FCA-related malpractice): qui tam allegations do not meet Rule 9(b) and appear time-barred under §3731(b) |
| Breach of fiduciary duty (redundancy and damages) | Fiduciary claim seeks different damages (successor counsel fees) and alleges misstatements and self-interested acts | Overlaps with contract/malpractice; any fiduciary claim must plead independent duty and damages flowing from breach | Dismissed: fiduciary duty exists but Long fails to plead damages causally tied to fiduciary breaches; duplicative theory cannot salvage the claim |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard — plausibility required)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (established the plausibility pleading standard)
- Kenford Co., Inc. v. County of Erie, 73 N.Y.2d 312 (N.Y. 1989) (consequential damages recoverable only if contemplated by parties)
- Univ. Health Servs., Inc. v. U.S. ex rel. Escobar, 136 S. Ct. 1989 (FCA implied certification theory)
- Rubens v. Mason, 527 F.3d 252 (2d Cir. 2008) (elements of legal malpractice under New York law)