LITIGATION: Can a Law Firm Avoid A Legal Malpractice Claim Under The Entire Controversy Doctrine?

Yes, under certain circumstances, according to a March 9, 2019 opinion by the New Jersey Supreme Court in the case of Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman and Stahl, P.C.  Dimitrakopoulos hired the Borrus firm to represent him in a business dispute with Steven Eleftheriou.  The Borrus firm withdrew from that case, but sought to be paid over $93,000 for its work up to that point, and filed a lawsuit against Dimitrakopoulos to collect.  Dimitrakopoulos made no legal malpractice claims in response to the collection case.  After both the collection case and the case against Eleftheriou were resolved, Dimitrakopoulos made a legal malpractice claim against the Borrus firm.

Generally, the entire controversy doctrine requires litigants to consolidate their claims arising from a single controversy whenever possible.  If a party fails to assert a claim that the entire controversy doctrine requires to be joined in a given action, a court may bar that claim.  The New Jersey Supreme Court carved out an exception in the 1997 case of Olds v. Donnelly, holding legal malpractice claims are exempt from the entire controversy doctrine to the extent that they need not be asserted in the underlying action.  This exception was created in large part because the claimant could still be victorious in the underlying case which would preclude a legal malpractice claim.

But the Dimitrakopoulos Court held that the Olds exception does not apply to a separate collections case brought by a law firm against its client.  Once the case against Eleftheriou was resolved, the legal malpractice claim became ripe, and could have been asserted in the collection case.

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