Guido v. Duane Morris LLP

Joseph Guido (plaintiff) was the majority shareholder and chairman of the board of directors of Allstates Worldcargo, Inc. (corporation). Duane Morris LLP (firm) (defendant) represented Guido in a lawsuit against the corporation and several of its officers and directors. Early in the litigation, James J. Ferelli, one of the firm’s partners, faxed Guido a letter that explained in detail the firm’s advice that Guido should not enter into any settlement agreement that compromised his ability to control the company or otherwise devalued his stock. Soon after the letter was faxed, the court ordered the parties to mediate, and Guido subsequently voluntarily dismissed his complaint without prejudice. Several months later, the firm represented Guido in a second lawsuit against the corporation for the same cause of action. In this lawsuit, Guido was advised by Frank Luchak (defendant) and Patricia Kane Williams (defendant), two of the firm’s attorneys. The second lawsuit was sent to mediation and resulted in a settlement agreement that included all the terms Ferelli had counseled Guido not to accept. After the terms of the agreement were entered into the trial-court record, Guido acknowledged to the court that he understood and consented to its terms. Guido subsequently sued Luchak, Williams, and the firm for malpractice. The trial court dismissed Guido’s claim, reasoning that prior to filing a malpractice claim, Guido should have requested that the court set aside the settlement agreement. However, the trial court later vacated its initial ruling that had dismissed Guido’s claim. The appellate division affirmed.