Delaware Supreme Court to hear appeal in RLF malpractice lawsuit

Texas company ISN Software will appear in Delaware Supreme Court on Wednesday to appeal a Superior Court ruling from February that dismissed its malpractice lawsuit against law firm Richards Layton & Finger PA (RLF). 

The software corporation argues that Superior Court Judge Mary Miller Johnston should not have dismissed ISN’s legal malpractice claim against RLF, Delaware’s largest law firm, on grounds of statutes of limitations.

Johnston’s 11-page decision dismissing the case said ISN Software should have sued RLF within three years after receiving the advice that resulted in the $67 million loss, rather than waiting until the company knew there was some financial damage from the alleged bad advice. 

In its June 10 brief, ISN Software argues that actual damages must be incurred in order for a malpractice claim to exist. 

ISN Software Executive Chairman Bill Addy did not agree with Johnston’s February decision to dismiss ISN's malpractice lawsuit. 

"The Superior Court judge in our case has created a new interpretation of Delaware law regarding the right to sue lawyers for legal malpractice,” Addy said in a previous Delaware Business Daily article. "We created our corporation in Delaware because it had a reputation for consistent and fair application of Delaware law."

He previously said Johnston’s decision makes a "mockery" of consistent and fair application of Delaware law. 

Addy said ISN is incorporated in Delaware because of the state’s reputation as business-friendly. He said he is not surprised that Delaware lost its top ranking in the Legal Climate Survey in 2017, losing the number one spot that Delaware has held since the survey was started by the US Chamber Institute of Legal Reform in 2002. 

“This case is a prime example why," Addy said.

It was announced this week that Delaware was back in top spot this year in the survey.

If Johnston’s decision is upheld, Addy predicted that more corporations will leave Delaware.

Johnston was appointed to the court in September 2003. Her term extends until 2027.

ISN was incorporated in 2001. More than 600 organizations in countries across the globe use ISNetworld to help manage their contractors' and suppliers' information, streamline the prequalification process, promote transparency and improve workplace safety.

It was announced in July that Supreme Court Chief Justice Leo E. Strine Jr. plans to retire this fall. He was appointed by Gov. Jack Markell in 2014 and was only halfway through his 12-year term.

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