A former director a furniture business has filed a legal malpractice suit against Schulte Roth & Zabel, claiming the New York-based firm duped him while it drafted a 2015 agreement between him and his then-wife, leading him to incur more than $3 million in damages.
The plaintiff, Jordan Seaman, represented by Emery Celli Brinckerhoff & Abady, claims Schulte Roth failed to disclose a trustee relationship that created a “personal financial relationship” between a Schulte Roth partner handling the matter and his now ex-wife.
Promptly firing back, Schulte Roth, just two days after the suit was filed in Manhattan Supreme Court on March 28, moved to dismiss, claiming that it had repeatedly advised Seaman that it was not acting as his legal counsel for the 2015 agreement.
“Mr. Seaman reviewed and signed a two-page agreement stating clearly that [Schulte Roth] was not representing him and that he should get his own lawyer. In fact, he does not dispute that he read and signed that agreement and that he had his own, separate lawyer at the time,” the firm said in a statement to the New York Law Journal.
Seaman, whose family is tied to the now-defunct Seaman Furniture Co., filed suit against Schulte Roth and Susan Frunzi, a top trusts and estates partner at the firm who sits on its executive committee. Seaman, represented by Emery Celli partner Ilann Maazel, said Frunzi had regularly advised him on a variety of personal legal matters over the course of a decade, including estate planning.
Leading up to the 2015 agreement, Seaman said he was separated from his wife, Rebecca Colin, a daughter of real estate developer Fred Colin, and the two were operating under a prenuptial agreement.
As part of an effort to repair and strengthen their marriage, Seaman alleges the couple retained Frunzi to prepare an agreement between them in which he would contribute to the cost of a new house for his wife. Schulte Roth represented both him and his then-wife as their attorneys, he claims.
Seaman said he repeatedly told Frunzi he didn’t want to change the pre-existing prenuptial agreement. He said Frunzi knew that the purpose of an agreement was to preserve the marriage, not to give Colin “a lifetime windfall” if there was a divorce.
But Seaman now alleges that Frunzi circulated a new agreement that imposed a new multimillion-dollar lifetime financial obligation on him that would survive the divorce. Seaman said Frunzi did not flag that for him in the agreement and falsely told him only “boilerplate” and irrelevant material has been removed from earlier drafts.
Seaman signed the agreement in March 2015, believing his financial obligations under it would terminate in the event of a divorce, he said.
Less than two months after moving into the new house, Colin asked Seaman for a divorce, he said. Seaman said he then learned from Frunzi that the March agreement was not designed to terminate his contributions to the costs of Colin’s house on divorce. He said he also learned during divorce proceedings that Frunzi failed to disclose that she personally was an active trustee “of two extremely valuable trusts” for his wife’s benefit.
Schulte Roth “failed to disclose Ms. Frunzi’s personal financial relationship with Ms. Colin to Mr. Seaman,” Seaman’s lawyers claim in court papers.
Seaman asserts the firm’s billing statements include entries for “legal services” for the agreement and at no point before the agreement was signed did the firm describe itself as a “mediator” to him. “Defendants were, in fact, Mr. Seaman’s lawyers,” he said.
In a statement, the plaintiff’s attorney, Maazel, said, “Schulte billed Mr. Seaman for ‘legal services.’ Schulte accepted payment for ‘legal services.’ Schulte did legal work for Mr. Seaman. But now Schulte claims not to be his lawyer, as a matter of law? I don’t think so.”
In the March 30 papers moving to dismiss the suit, Schulte Roth said the 2015 agreement “clearly” provides that Seaman will pay $3.5 million toward a new home for his then-wife and their two children and assume costs of one-half of the home. He now “wishes to avoid his obligations,” said the firm, represented by partner Robert Abrahams, a co-chairman of Schulte Roth’s litigation group and a member of its executive committee.
While there are “many problems” with Seaman’s malpractice suit, Schulte Roth said, “the biggest” is a provision in the March 2015 agreement that states the firm did not represent either of the parties to negotiate it and that each had been informed of the right to retain counsel. Schulte Roth said Seaman had his own separate lawyer and he even sent the firm several comments of a draft agreement and an attached redline reflecting his counsel’s comments.
Schulte Roth said the drafting and negotiation of the agreement was outside the scope of its representation of Seaman and it advised him in writing on at least 11 prior occasions that it did not represent him for the negotiation leading to the March 2015 agreement and that he should seek independent counsel, according to court filings.
Addressing conflict arguments that Frunzi acted as a trustee for Colin’s trusts, Schulte Roth said lawyers in New York regularly serve as trustees for their client’s trusts and Seaman’s argument is an “after-the-fact attempt to find a hook in some potential conflict he can argue was not covered” by the nonrepresentation acknowledgment and conflict waiver in the agreement.
The suit is one of the latest examples of trusts and estates client matters leading to liability claims for law firms, both nationally and in New York. According to an American Bar Association study of malpractice claims released in 2016, trust, estate and probate matter liability claims have been on the rise and the practice area was one of the top five areas to generate liability claims against law firms.