Whalen v. DeGraff, Foy, Conway, Holt-Harris & Mealey

Alice Whalen (plaintiff) sued the New York law firm DeGraff, Foy, Conway, Holt-Harris & Mealey (DeGraff) (defendant) for failing to recover a judgment against a substantial estate before the deadline. Whalen had originally retained DeGraff to recover her interest in a partnership. DeGraff secured a judgment of over $1.2 million against Julius Gerzof, a Florida resident who died leaving a substantial estate before the judgment was satisfied. DeGraff hired Florida attorney Scott Cagan with the firm Bailey, Hunt, Jones and Besto (Bailey) to assist with preserving Whalen’s rights against the estate. Initially DeGraff simply asked Kagan to determine whether an estate had been opened and to advise how to make a claim against the estate and the timeline. Bailey said an estate had not yet been opened and would take no further action until further instruction. DeGraff told Whalen that DeGraff had retained Bailey to follow the estate and file any claims required to collect her judgment. Whalen had no contact with and did not retain Bailey herself. Meanwhile, DeGraff negotiated with attorneys for the Gerzof estate attempting to settle Whalen’s judgment. DeGraff learned an estate had been opened, told Bailey to file a notice of claim in late February 1996, and sent Bailey the information necessary. Nearly two years later, the Gerzof estate attorneys told DeGraff no notice of claim had been filed before the deadline, withdrew all settlement offers, and ended negotiations. As a result, Whalen never satisfied any of her judgment from the estate. Whalen sued contending DeGraff was liable for failing to file the notice of claim, either because DeGraff had a nondelegable duty to do so or because DeGraff negligently supervised Bailey. DeGraff countered that it met its duty to Whalen when it retained Bailey to file the notice of claim and was entitled to rely on Bailey filing it. Both sides filed for summary judgment. The trial court twice denied both motions. Both sides appealed.