New York law firm shaves claim in malpractice litigation

A New York financial services law firm has convinced a federal court to narrow the scope of a claim against it in a malpractice lawsuit brought by an aerospace and defense.

Applied Energetics Inc. sued Gusrae Kaplan Nusbaum PLLC in January 2021, alleging legal malpractice in connection with the firm’s representation of Applied in a proxy solicitation. The company said Gusrae did not disclose a potential conflict of interest arising from the company’s prior representation of the company’s former chief executive and sole director, George Farley, in a derivatives lawsuit. shareholders.

Gusrae asked for the complaint to be dismissed, and U.S. Magistrate Judge Debra Freeman granted a small portion of that motion on Wednesday. While the legal malpractice complaint survived intact, the court dismissed a complaint alleging Gusrae violated three rules under the New York Rules of Professional Conduct.

The lawsuit seeks to void the attorneys’ fee agreement and allow Applied to recover the fees paid to date. He claims this is justified when rules 1.5, 1.7 and 1.8 are violated. Freeman noted that only rule 1.5 covers excessive fee agreements, and she said rules 1.7 and 1.8 duplicate the malpractice claim.

Applied Energetics is represented by Bond, Schoeneck & King PLLC. Gusrae is represented by Lewis, Brisbois, Bisgaard & Smith LLP.

The case is Applied Energetics, Inc. v. Gusrae Kaplan Nusbaum PLLC, SDNY, No. 21cv382, 3/30/22.

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