[ by Melanie Gretchen ]

DLA Piper is in the clear.

A $17 million malpractice suit against the law firm was dismissed by a federal judge who on Monday said there wasn't enough evidence to show DLA Piper had acted improperly.  Joseph DelGreco & Company, Inc, a bankrupt luxury outdoor furniture distributor based in New York, had alleged that the firm breached its duties in 13 separate episodes.

Judge Paul A. Engelmayer of the Southern District of New York presided over the law suit filed in 2010.  In 2007, the law firm advised DelGreco in a manufacturing and licensing agreement with Eastwest, a Taiwanese furniture maker.  As part of the deal, Eastwest loaned DelGreco $1 million.  Between the time of the loan and July 2008, DelGreco failed to make at least 5 monthly interest payments and defaulted on several other obligations under its agreements with Eastwest, for which Eastwest sued DelGreco.

Before DLA withdrew as counsel, DelGreco failed to pay its legal fees, the law firm advised DelGreco to pursue arbitration, which the distributor lost (the arbitrator ruled that DelGreco owed EastWest over $4.5 million).  DelGreco filed for bankruptcy a month later.  In Del Greco's suit against the law firm, the distrubtor said DLA Piper failed to (i) notify the company that an initial interest payment was due and (ii) abandoned the company on the eve of arbitration.  Unfortunately for him, Judge Engelmayer ruled that in 11 of the 13 instances, the distributor didn't provide evidence that DLA Piper deviated from the standard of care.

Representation:

For DelGreco: Hartley T. Bernstein of Bernstein & Wasserman.

For DLA Piper: Jeffrey Schreiber of Meister Seeling & Fein and James P. Ulwick of Kramon & Graham.

The case: Joseph DelGreco & Company Inc v. DLA Piper L, U.S. District Court for the Southern District of New York, No. 1:10-cv-6422.