Seyfarth Shaw will get a new trial in a legal malpractice case brought by the creator of a popular exercise program, who won a $30 million verdict against the law firm in 2005.
A California state appeals court has thrown out a jury verdict, which found that the Chicago-based law firm committed malpractice when one of its lawyers representing Tae Bo creator Billy Blanks failed to file court papers on time in the right venue.
The Feb. 20 decision from the California Court of Appeal 2nd District remands the case back to the lower court. It calls for the lower court to change the instructions it gave the jury related to how much Blanks could recover for the firm's alleged wrongdoing.
Seyfarth Shaw Chairman Stephen Poor said in a written statement that the firm "look[ed] forward to being fully vindicated in this matter."
Blanks' attorney, James R. Rosen, called the decision "a major disappointment," but he said that the overriding conclusion regarding the law firm's malpractice remained intact.
"The proceedings may have been questioned, but the underlying facts haven't changed," said Rosen, a partner at Rosen Saba in Beverly Hills, Calif.
The decision in Blanks v. Seyfarth Shaw, No. B183426, stems from a case that Blanks brought against an accountant who acted as his agent -- even though he did not have an agent's license -- in violation of the Talent Agencies Act. Blanks was represented in that action by Seyfarth Shaw attorney William H. Lancaster, a partner in its Los Angeles office.
In March 2002, the California labor commissioner dismissed the case against the accountant, finding that Lancaster, acting on behalf of Blanks, had not met the deadline for filing it with Labor Commissioner. In addition, the California state court dismissed the case because it was not filed on time with the Labor commissioner.
Blanks then filed a legal malpractice lawsuit against Seyfarth Shaw and Lancaster, alleging that the attorney's failure to file the action on time before the labor commissioner caused Blanks to lose millions. In addition, Blanks asserted that Lancaster purposely delayed filing in order to generate fees.
After a six-week trial, a jury found the law firm liable on all causes of action and ordered it to pay Blanks $15 million in punitive damages, in addition to about $15 million in compensatory damages.
But in the Feb. 20 decision, the appeals court found that the trial court erred in instructing the jury that Blanks' recovery could extend to all losses from the accountant's conduct, even if some of those losses were from actions other than his talent agent services.
Instead, the appeals court determined, the jury should have received an instruction that Blanks could recover from the law firm only for his losses originating from the accountant's agent-related activities that were in violation of the Talent Agencies Act.
In other words, the appeals court found that the jury instruction should have incorporated the doctrine of severability.
Representing Lancaster were Gibson Dunn & Crutcher attorneys Daniel M. Kolkey and Kevin S. Rosen.
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