A law firm has won dismissal of a legal malpractice suit brought by a Brooklyn man who received only $111 from a $150,000 settlement after litigation financing companies received the bulk of the funds.

Although Elwyn Francis claimed his attorneys at Mirman, Markovits & Landau failed to negotiate or attempt to reduce a litigation funding lien he acquired throughout the duration of his personal injury case, Brooklyn Supreme Justice Bernadette Bayne (See Profile) said in Francis v. Mirman, Markovits & Landau, 2993-2010, that Francis signed each funding agreement on “his own free will and accord.”

A review of the retainer agreement between Francis and Mirman Markovits “reveals that, although it fails to address loans from third parties, it is clearly confined to representation of the plaintiff for injuries sustained as a result of an accident,” Bayne wrote.

Mark Anesh, a partner at Lewis Brisbois Bisgaard & Smith, who represented Mirman Markovits, said the decision supports the proposition that, as long as a lawyer does not assume a duty to advise or consult with a client about a litigation financing agreement before it is signed, the lawyer should not be liable for failing to advise the client of the lien’s financial consequences.

“You can’t be held liable for something you don’t do,” said Anesh.

But Francis’ malpractice lawyer, Adam White, said Bayne’s decision does not address his client’s core claims, including whether attorneys have a duty to ascertain a client’s litigation financing liens before recommending a settlement, to explain what the client will receive after the lien is satisfied and to negotiate down a substantial lien.

“We believe the judge misapprehended the essence of plaintiff’s claims in this case,” said White, a partner of the Law Office of Vaccaro & White. He added that he plans to appeal and is considering a motion to renew and reargue the case.

After Francis severely injured his ankle in 2007 and had surgery, he was unable to earn a living as a day laborer, according to his court papers. He retained Mirman Markovits, a seven-lawyer Manhattan firm, to represent him in a trip-and-fall personal injury case.

Francis’ only option, he claims, was to obtain funds from a litigation financing company that charges high interest rates in exchange for a portion of the plaintiffs’ recovery. The companies are not reimbursed if the plaintiff fails to win a court award.

Francis, whose first name appears as Elwin in some court documents, received cash advances from Case Cash until Law Bucks took over Case Cash’s lien. Francis received about $27,000 in total from the two companies.

He alleged in court papers that Mirman Markovits was aware each time he received funds from Case Cash or Law Bucks.

Shortly after a 2010 settlement conference, Francis applied for funds from a third company, Law Cash, after Law Bucks refused any further advances. Before Law Cash would release funds, it required Mirman Markovits to confirm that Francis stood to receive about $100,000 from the $150,000 settlement and there were no other liens or claims on the settlement.

Francis claimed it was “only after” Mirman Markovits made these representations that he signed the general release that was part of the settlement. He said the firm never acknowledged any lien that Law Bucks had on the settlement proceeds. At that time, the $27,000 in advances had ballooned to a more than $90,000 return payment, Francis said.

He claimed he learned the firm had not negotiated to reduce the Law Bucks lien when he received a closing statement and a check for $111. The closing statement, attached as a court exhibit, shows the attorneys received about $49,263 while Law Bucks received $94,000 and Law Cash got $4,415. The remaining $2,211 went to litigation expenses.

The “defendants’ failure to negotiate or attempt to negotiate a reduction in the Law Bucks lien was a departure from good and accepted practices in the field of personal injury law,” Francis claimed in his malpractice suit. “How could defendants recommend or, as plaintiff alleges, tell plaintiff to settle his case for $150,000 if they did not know the lien amount?”

Mirman Markovits, in its motion to dismiss, argued it was retained to litigate the personal injury suit and Francis’ funding transactions were outside the scope of its representation. It said Francis agreed to the terms of the funding transactions, is bound by them and signed off on the settlement.

“If plaintiff is unhappy with the amount ultimately recovered through the settlement, in light of the high interest rates on the loans he personally obtained, he only has himself to blame,” Anesh said in an affidavit.

In her decision, Bayne wrote Francis was required to initial every page of the financing contracts to demonstrate he read the page and understood it.

“Not only do the contracts clearly state the amount that the plaintiff borrowed in each instance, they also clearly and unambiguously state how much the plaintiff will be required to pay back to the funding company upon resolution of his underlying personal injury case,” Bayne wrote.

“The fact that the plaintiff entered into another loan contract after the case had been settled is further evidence of the fact that the plaintiff was well aware of his actions,” she added.

Bayne said the fact that the law firm signed off on the funding agreement “constitutes nothing more than an acknowledgement by the defendants that the loan company was holding a lien against the proceeds of the plaintiff’s underlying personal injury action.”

She added this was not an agreement to represent the plaintiff for any purpose related to the financing arrangements.

Short of their acknowledgement of the lien, no evidence has been offered that would prove Mirman Markovits had any knowledge about, or participated in, the execution of the financing contracts, she wrote.

Bayne also noted that a review of the closing statement from the personal injury suit indicates Mirman Markovits did negotiate a reduction in a lien by about $2,500.