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Use of Collateral Estoppel in Discipline and Malpractice
Gary Muldoon
Muldoon & Getz
Rochester, NY 14614
585 262-5130

The doctrine of collateral estoppel (issue preclusion) is frequently encountered in civil law, such as in a motion for summary judgment or partial summary judgment, as well as an affirmative defense. With attorney discipline issues, the doctrine may be applied in various ways.

The basis of the doctrine is that, where a party has had a full and fair opportunity to litigate an issue, and the issue has been decided against that party, the ruling may bar the party from later disputing the issue in another legal context. Siegel, New York Practice, 4th ed., §§ 457 et seq.

Use in disciplinary proceeding

Collateral estoppel of a judgment from a civil suit in which the attorney was a litigant may apply against the attorney in a disciplinary proceeding. Where the attorney had full and fair opportunity to be heard, ample notice of the claims against the attorney, and to vigorously defend, the attorney testified, was represented by counsel, and had the opportunity to appeal the adverse decision and order, collateral estoppel was properly invoked. The prior judgment need not contain a specific recitation; it is sufficient that the judgment encompasses the ruling requiring that legal conclusion. In re Harley, 293 AD2d 131, 746 NYS2d 137 (1st Dept 2001).

With a federal court’s finding of malpractice and fraud, collateral estoppel was applied in a disciplinary proceeding, resulting in censure. Matter of Dorfman, 304 AD2d 273, 760 NYS2d 413 (1st Dept 2003).

An order directing sanctions for frivolous litigation eventually led to disbarment. See Yao v Bult, 245 AD2d 136, 666 NYS2d 159 (1st Dept 997); Matter of Yao, 231 AD2d 346, 661 NYS2d 199 (1st Dept 1997).

Collateral estoppel was also applied from a proceeding, which resulted in a judge’s removal from office, to a disciplinary hearing dealing with the former judge’s license to practice law. Matter of Collazo, 299 AD2d 96, 750 NYS2d 263 (1st Dept 2002).

A court decision in a privately litigated matter is collateral estoppel, which attorney cannot now litigate against. securities fraud Matter of Sylvor, 225 AD2d 87, 648 NYS2d 440 (1st Dept 1996); see also Levy v Association of the Bar of the City of NY, 37 NY2d 279, 372 NYS2d 41 (1975).

Reciprocal discipline

Collateral estoppel is frequently applied from the determination of the disciplinary body of one state to that of another state. See, e.g., Matter of Thrasher, 308 AD2d 160, 763 NYS2d 24 (1st Dept 2003); Annotation, 81 ALR3d 1281, Disbarment or suspension of attorney in one state as affecting right to continue practice in another state.

Use in civil suit

May collateral estoppel apply in reverse, i.e., from a disciplinary proceeding to other litigation? Where the client brought a fraud action against his former attorney, the attorney sought to use the Grievance Committee’s finding in defense. The committee’s summary decision found that the attorney had not violated the Code of Professional Conduct. Plaintiff had no opportunity to testify at the hearing. The attorney-defendant’s motion to amend his complaint and for summary judgment were therefore denied. Bennardo v Equitable Land Servs, 244 AD2d 304, 663 NYS2d 892 (2d Dept 1997).

No collateral estoppel effect was given to a summary decision by the Grievance Committee without the benefit of a hearing, where the client afterwards brought a small claims action against his former law firm for allegedly improperly paying medical bills out of his settlement proceeds. Klejmont v DeProspo, Petrizzio, Longo & Bartlett, 195 Misc2d 538, 758 NYS2d 760 (App Term 2002).

Similarly, a letter by the Grievance Committee finding that the attorney had engaged in professional misconduct was ambiguous and did not have preclusive effect against the attorney. DellaGiala v Brown, 178 Misc2d 445, 679 NYS2d 526 (City Civ Ct 1998).

A different result was reached in a small claims proceeding by a former client against the former attorney. The previous administrative determination was held conclusive in a later action between the parties. Doe v Roe, 190 Misc2d 517, 739 NYS2d 542 (Dist Ct 2002).

In a civil case, a corporation sued a defendant for tortious interference with contractual relation. Defendant’s former attorney, a shareholder in plaintiff corporation, had been the subject of a disciplinary proceeding, which resulted in disbarment. Defendant moved for summary judgment based on the results of the disciplinary proceeding. The First Department rejected application of the doctrine. The hearing panel’s findings and conclusions as to the attorney were not entitled to preclusive effect with respect to the corporation's suit, as there was no identity of issues that were necessarily decided in the disciplinary proceeding and the corporation did not have a full and fair opportunity to contest decision now claimed to be controlling. The disciplinary committee had considered the attorney's fitness to practice law and did not determine the validity and enforceability of agreements that the defendant had entered into. Gloria Vanderbilt Home Furnishings, Inc. v Cooper, 215 AD2d 162, 626 NYS2d 135 (1st Dept 1995).

Outside effect of disciplinary proceedings

The findings of a hearing panel may be accorded collateral estoppel effect in other actions or proceedings. A to Z Associates v Cooper, 161 Misc2d 283, 613 NYS2d 512 (Sup Ct 1993), affirmed 215 AD2d 161 626 NYS2d 143 (1st Dept 1995).

Attorney fees application

Elsewhere, with a prior lawsuit against the client that resulted in an award of attorney fees, collateral estoppel applied to bar a later malpractice suit. The previous judgment was a finding that no malpractice occurred. Koppelman v Liddle, O'Connor, Finkelstein & Robinson, 246 AD2d 365, 668 NYS2d 29 (1st Dept 1998); Chisholm-Ryder Co., Inc. v Sommer & Sommer, 78 AD2d 143, 434 NYS2d 70 (4th Dept 1980).

A prior court order allowing an attorney to withdraw was not given collateral estoppel effect that the withdrawal was justified. Allen v Rivera, 125 AD2d 278, 509 NYS2d 671 (3d Dept 1986).

Use of default judgment

Where the earlier judgment for attorney fees was taken by default, collateral estoppel still applied to bar the later malpractice suit. However, this result has been criticized. See Kossover v Trattler, 82 AD2d 610, 442 NYS2d 554 (2d Dept 1981) (Gibbons, J., concurring); cf. Robbins v Michigan Millers Mutual Ins. Co., 236 AD2d 769, 653 NYS2d 975 (3d Dept 1997) and Pigliavento v Tyler Equipment Corp, 233 AD2d 810, 650 NYS2d 414 (3d Dept 1996).

© 2008 by Gary Muldoon