This is a saga of a shipwreck two decades adrift in our legal system with multiple appearances before the Trial and Appellate Courts. The plaintiff, Lindenman retained the defendant attorney to pursue an action against a Yacht Club for what he described as "horrific brain injuries resulting from being hit in the head by a tray full of dirty dishes" carried by a busboy. The accident happened in 1989 and attorney Kreitzer filed suit but it was dismissed in 1992 because he failed to obey a preclusion Order giving him one last chance to serve a bill of particulars. For the next five years attorney Kreitzer led his client to believe the action was still pending.
In 1997 client Lindenman filed a legal malpractice claim against Kreitzer (now disbarred from the practice of law) and a three day non-jury trial was held in 2001. Kreitzer's attorney's successfully moved to dismiss on the ground that plaintiff Lindenman had not proved their prima facie case of legal malpractice because they had not presented any evidence that a judgment against the Yacht Club could have been collected. In other words, was there evidence the Yacht Club had assets and/or insurance coverage? More importantly, which side has the burden of proof on the issue of collectability in a legal malpractice case?
In 2004, the Appellate Division, First Department in a landmark ruling reversed the trial court and declared that the issue of collectability would no longer be a burden for plaintiff to prove its case but an affirmative defense that the defendant would have to prove in avoidance or mitigation of damages. 775 N.Y.S.2d 4. Lindenman returned for a second non-jury trial in 2008 for the limited issue of whether Lindenman would have established that the Yacht Club's busboy was negligent.
The non-jury trial was held in March and September, 2008, and concluded with the Court finding the Yacht Club 60% at fault, Lindenman 40% at fault and awarded a total of $12,800,000 in damages to Lindenman and his wife. However, Kreitzer's motion for a post verdict hearing on collectability was denied. After reductions for Lindenman's 40% culpable conduct, structuring and collateral source set offs, attorney defendant Kreitzer appealed from the Judgment entered in 2010, arguing that the damages awarded were excessive and that they were denied a post verdict collectability hearing.
- In Round 2 the Appellate Division (now April 2013) reduced the damages award to under 2 million noting that Lindenman's brain injury didn't require surgery and that he could drive and play tennis. Moreover, it agreed that Kreitzer was entitled to a hearing on collectability. Simply put, if Kreitzer (someday in the future) proves that the Yacht Club's liabilities exceeded its assets and that it didn't have insurance coverage, Lindenman will not recover a penny from Kreitzer despite his negligent handling of the underlying case. Lindenman v Kreitzler, Appellate Division, Second Department April, 2013 Slip Op. 02356