Foley & Lardner Beats Malpractice Suit Over Its Malpractice Work

Foley & Lardner LLP and attorney Jonathan E. Moskin defeated legal malpractice claims by a company that hired them to sue another law firm for malpractice.

The Eastern District of New York said it lacked jurisdiction over the former client’s suit. The sole asserted basis for federal jurisdiction, diversity of citizenship, is lacking because the defendants and plaintiff Protostorm Inc. are citizens of New York, the U.S. District Court for the Eastern District of New York said Aug. 29.

Protostorm retained a Virginia law firm, Antonelli, Terry, Stout & Kraus, LLP, to prepare and file patent applications for a software product.

In February 2006, Protostorm learned that the firm had failed to properly prosecute the patent and, consequently, it was unenforceable in the U.S..

Protostorm retained the defendants to bring a malpractice suit against Antonelli, Terry.

Although Protostorm obtained a judgment against the firm, the judgment is unenforceable because the firm’s individual attorneys weren’t held jointly and severally liable, the company said. The Virginia firm dissolved shortly after the trial.

Protostorm alleged Foley & Lardner and other attorneys and firms committed legal malpractice by waiving the issue.

The New York-based court granted Foley & Lardner’s motion to dismiss the claims against them for lack of jurisdiction.

Protostorm hasn’t been involved in any active business since 2008. However, in 2016, Protostorm’s president began developing a waffle manufacturing business with a friend who had owned a prior company in Long Island.

The company argued it is a citizen of Delaware both because it is incorporated there and its headquarters are there. However, a corporation’s headquarters isn’t automatically its nerve center for determining citizenship, the court said.

Protostrorm’s Delaware office is empty and no meetings have taken place in Delaware, the court said.

And although Protostorm’s recipe-testing and manufacturing preparation activities may have mainly taken place in Delaware, the decision-making that drove and supported those activities, all took place in New York, the court said.

The company’s principal place of business is New York, it said, dismissing for lack of diverse parties.

Claims against the other defendant attorneys sued by the company were dismissed earlier.

Schwartz & Ponterio PLLC represented Protostorm. Foley & Lardner represented itself.

The case is Protostorm, Inc. v. Foley & Lardner LLP, 2019 BL 324785, E.D.N.Y., No. 18-CV-2107, 8/29/19.