A Southern District judge has dismissed a bankrupt furniture distributor’s malpractice suit against DLA Piper that alleged the firm failed to properly advise it in transactions and subsequent litigation with a Taiwanese company. Joseph DelGreco & Co., a privately owned New York corporation that filed for Chapter 11 in October 2009, sued DLA Piper in 2010, claiming among other things, DLA failed to advise it of the consequences of a minor default on a loan and also pressured DelGreco to let the firm withdraw as counsel on the eve of a multi-million-dollar arbitration (NYLJ, July 13, 2010).
Ruling on a motion for summary judgment, Judge Paul Engelmayer (See Profile) inJoseph DelGreco & Co. v. DLA Piper, 1:10-cv-06422-PAE, found 11 of 13 episodes of alleged malpractice were unsupported by expert opinion evidence and thus could not go forward. The plaintiff’s expert, New York Law School professor Jeffrey Haas, maintained DLA Piper deviated from the standard of care by not ensuring DelGreco made a required interest payment and by not providing copies of transaction documents in their final form at the time of closing. Engelmayer found DelGreco made a sufficient showing of negligence on these points, but ultimately fell short of showing how the conduct caused damages. “No reasonable jury could find that, had the initial interest payment been paid on time…DelGreco would not have defaulted,” the judge wrote.
James Ulwick, DLA Piper’s lawyer and a partner at Baltimore-based Kramon & Graham, said he was pleased “but not surprised that the judge found that there was no malpractice committed by any of the DLA Piper lawyers. It was clearly the right decision.” Hartley Bernstein, DelGreco’s attorney, did not return a call for comment.