$17 million malpractice suit against DLA Piper dismissed

Judge says plaintiff didn’t have enough evidence showing that the law firm acted improperly

A plaintiff that accused its outside counsel of malpractice didn’t have enough evidence to prove that the law firm acted improperly, a judge said earlier this week.

In 2007, Joseph DelGreco & Co. Inc., a New York-based luxury outdoor furniture distributor, hired DLA Piper to advise it in a manufacturing and licensing agreement with Taiwan-based furniture maker Eastwest. As part of the deal, Eastwest gave DelGreco a $1 million loan. Over the next year, DelGreco failed to make monthly interest payments and defaulted on other obligations outlined in its agreement with Eastwest.

Eastwest sued DelGreco, and DLA Piper advised the company to pursue arbitration. But in June 2009, the law firm withdrew as counsel, claiming DelGreco didn’t pay its legal fees. DelGreco proceeded with arbitration without counsel, and the arbitrator ruled that the company owed Eastwest more than $4.5 million. DelGreco filed for bankruptcy soon after.

A year later, DelGreco sued DLA Piper for malpractice, claiming the firm breached its duties in 13 different instances. But on Monday, a federal judge ruled that DelGreco didn’t provide evidence proving that DLA Piper acted improperly.

Read Thomson Reuters for more about the case.

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Contributing Author

Ashley Post

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