Rhee-Karn v. Lask

Background

The court issued this decision after the parties briefed damages questions following an earlier order on their motions in limine, which are requests to limit the evidence or arguments presented at trial. The case concerns alleged legal malpractice by Susan Chana Lask. Earlier rulings found that Lask committed malpractice in connection with the First Federal Action and that her negligence caused Rhee-Karn’s legal expenses in that action. Those rulings also found that Lask was not liable for malpractice concerning the Second Federal Action because Lask had researched and advised Rhee-Karn about issues that had not previously been addressed in the First Federal Action.

The court stated that legal-malpractice damages should put the client in the position she would have occupied without the malpractice, without providing a windfall.

Rulings on Damages Arguments

Work connected to the Second Federal Action. The court ruled that Lask may present evidence and argue that particular tasks and fees performed for the First Federal Action would have been incurred for the Second Federal Action even without the malpractice. If the First Federal Action work replaced work that otherwise would have been performed for the Second Federal Action, the court held that reimbursing those fees could improperly give Rhee-Karn a windfall. Lask therefore may present this theory to the jury as a reduction to the damages Rhee-Karn claims.

Discounted fees. The court rejected, at least as Lask framed it, Lask’s theory that damages should be reduced based on discounts she voluntarily gave for work in the Second Federal Action and the Family Court Action. The court said those discounts were irrelevant because the damages concern amounts Rhee-Karn paid for First Federal Action tasks that would not otherwise have been needed for the Second Federal Action.

The court clarified that Lask may present evidence that she reduced, forgave, or discounted fees invoiced for the First Federal Action. The amount Rhee-Karn actually paid for those tasks is the measure of any reimbursement that may be due.

Forfeiture and disgorgement arguments. Rhee-Karn argued that Lask should not receive any reduction of damages because Lask was discharged for cause and because the retainer agreement allegedly violated New York professional-conduct rules. Rhee-Karn also argued that Lask should repay amounts above $100,000. The court said these arguments were moot and irrelevant to the damages issues before it. Because all claims other than malpractice had been dismissed, and claims concerning the Second Federal Action and Family Court Action had also been dismissed or resolved against Rhee-Karn on summary judgment, the court precluded Rhee-Karn from presenting arguments or evidence that Lask’s retainer agreement violated professional-conduct rules or that Lask misled her about the fees she would have to pay.

Disposition

The court allowed Lask’s theory concerning work that would have been performed for the Second Federal Action, rejected Lask’s theory based on discounts for the Second Federal Action and Family Court Action, allowed evidence of discounts related to the First Federal Action, and precluded Rhee-Karn’s retainer-agreement and fee-misleading arguments. Judge Robert W. Lehrburger entered the order on June 28, 2023.