A recent decision by the New York State Appellate Court highlights why a law firm should precisely identify in its written engagement agreement what tasks the client should and should not expect the firm will perform. Genesis Merchant Partners, L.P. v. Gilbride, Tusa, Last & Spellane, LLC, 69 N.Y.S.3d 30, 2018 WL 358068 (N.Y. App. Div. 1st Dept. Jan. 11, 2018).
The defendant law firm was engaged to assist a client in a loan transaction. Specifically the client agreed to extend loans to buy life insurance policies. The loans were to be secured in part by the policies themselves. But the client’s security interest in the policies was never perfected because the necessary security forms were never recorded.
After the borrower defaulted on the loan, the client was unable to…
