Wednesday, December 6, 2006
The Nevada Supreme Court addresses its rules of professional conduct that prohibit contingent fees in domestic relations matters in a case involving litigation over a 25-year-old divorce settlement. The agreement addressed alimony and community property distribution through a $600,000 promissory note in which Husband was to pay Wife for her half of the community property by paying up to $ 50,000 per year in principal and monthly interest-only payments, beginning at a rate of 6%. The increase in interest payments each year, based on annual adjustments according to the consumer price index, served as Wife's alimony. The note prohibited Husband from prepaying principal, and instead provided that Wife could demand up to $ 50,000 of principal annually. If Wife never demanded principal, interest would accrue indefinitely; if she requested the maximum every year, then the note would be fully paid in twelve years. 25 years later, with Husband having paid a total over over twice the original note amount and with monthly payments of $8,500, he brought a civil action to reform, rescind, or recover damages based on usury, unconscionability, and fraud.
Wife's attorneys offered her the choice of a $ 5,000 retainer with hourly billing or a one-third contingency fee. She insisted on a contingency arrangement. Ultimately, the firm negotiated a settlement for Wife of a $ 600,000 lump sum payment, an amount that was more than she had indicated she would be willing to settle and which entitled the firm to $ 200,000 fees.
In this action, seeking a writ to review the trial court's decision to enforce the contingent fee agreement, the Nevada Supreme Court found that the fee was indeed contingent and involved alimony, thus violating the rule of professional conduct. The court reviewed decisions from other states, some of which recognized exceptions to the contingent fee prohibition for collecting past due support, but concluded that in the context of this action, this was not an action for past due support but an action whose outcome would determine the amount of future alimony Wife would receive.
A dissenting judge would interpret the rule to permit such a contingency fee agreement and urged the court to modify its rule in the future.
Marquis & Aurbach v. Eighth Judicial Dist. Court, 122 Nev. Adv. Rep. 97 (November 30, 2006)
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Wednesday, November 15, 2006
A cautionary tale: In any area of law, missed deadlines and delay are a common cause of malpractice. In divorce practice, a common area for delay to cause harm is in the follow through required after a dissolution.
The New York Court of Appeals reversed a trial court’s dismissal of a malpractice action premised on delay in transferring funds from a pension. The trial court had held that the plaintiff’s damages were speculative as they were based on her argument that the pension investment had declined in value during the delay and if she had received the funds sooner, she could have made wiser investments and avoided that loss. The court of appeals found that “the complaint sufficiently asserts that defendants' inordinate delay in effecting the stipulated transfer of funds resulted in a loss of principal attributable to defendants' lack of professional diligence. For purposes of this appeal, we reject the intimation that plaintiff must be treated as an investor who implicitly assumed the market risk inherent in an investment vehicle such as the Plan… Plaintiff agreed to accept the proceeds of the Plan, not the investments it represented. Moreover, it is clear that the stipulated agreement contemplated a prompt transfer and distribution of funds. Finally, at this stage of the proceedings, we are not prepared to rule that defendants' failure to fix the value of the Plan in the stipulated agreement or otherwise insulate plaintiff from the market risk attendant upon a delay in transfer and distribution of the proceeds cannot be deemed a lapse in the exercise of professional diligence.”
Lappin v Greenberg, 2006 NY Slip Op 8168 (November 14, 2006)
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Monday, October 30, 2006
The Supreme Court of Arkansas, interpreting its new rules of professional conduct regarding duties to prospective clients, has held that an attorney may be disqualified from representing a wife based on the husband's prior consultation with an attorney in the firm regarding possible representation in the case, even if no representation ensued. The new Arkansas rule, based on ABA Model Rule of Professional Responsibility Rule 1.18, bars an attorney from representing a client with adverse interests to those of a prospective client in a substantially related matter if the attorney "received information from the prospective client that could be significantly harmful to that person in the matter."
The trial court had used the same presumption of receipt of confidential information it applies when using a former client conflicts analysis. The Supreme Court affirned, stating that the duty an attorney owes to a prospective client under Rule 1.18(b) is "coextensive with the duty an attorney owes to a former client" and "exists regardless of how brief the initial conference may have been and regardless of the fact that no client-attorney relationship ensued."
The court noted that in this case, husband's consultation with the attorney involved the same custody proceeding as in the later representation and that he had given the attorney a copy of his journal, told her about facts that were not in the journal, and "disclosed everything he knew and his concerns about the children and his former wife." The court concluded that "a lawyer who consults with a prospective client about a change-of-custody proceeding will necessarily become privy to information that could be used to the disadvantage of that person in the same proceeding." The fact that the husband had indicated in his testimony on the disqualification that he had not disclosed harmful information was not determinative, according to the court, because "a prospective client would not know whether the information disclosed during the consultation could be significantly harmful."
Sturdivant v. Sturdivant, 2006 Ark. LEXIS 536 (October 26, 2006)
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Wednesday, August 30, 2006
The Ohio Court of Appeals clarified the jurisdiction of a court to enforce agreed-to amendments to property division judgments in a case in which the divorce judgment had provided that husband would receive 50 percent of the marital portion of wife's pension. When the first QDRO prepared pursuant to this judgment was rejected by the plan administrator becuase of uncertainty as to the portion of the pension that was marital, the parties signed an amended QDRO which gave husband a full 50 percent of the wife's total pension. Wife sought to amend that QDRO, claiming that she never intended to relinquish her premarital interest in the plan and that she had misread the amended QDRO. The trial court sua sponte vacated the amended QDRO, finding that without the wife's intended consent to the amended QDRO, it lacked jurisdiction to have entered it.
The court of appeals reversed. While the court did agree that the trial court's jurisdiction to enforce a post-decree modification depended on the agreement of the parties, the court concluded that there was no evidence to support wife's claim that she did not agree to the amended QDRO, as she conceded that she had given her attorney authority to sign the QDRO. The court pointed out that "The attorney-client relationship is considered to be a limited agency. The attorney has no implied power to do more than relates to the proper conduct of a suit, and cannot, without specific authority, bind the client. However, it is beyond question that a duly authorized attorney may enter into an agreed judgment entry the terms of which will be binding on his or her client. " Thus, wife was bound by her attorney's actions and the trial court had jurisdiction to enter the order. To the extent relief was available for her mistaken agreement, it would be under Ohio's relief from judgment rule to have the original order set aside.
McGee v. McGee, 2006 Ohio 4417; 2006 Ohio App. LEXIS 4343 (August 28, 2006)
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Tuesday, August 15, 2006
The New Jersey court recently addressed a divorce action which included Husband's allegations that Wife had violated the New Jersey wiretap act by tape recording home telephone conversations and that she had violated his privacy by placing hidden video cameras in the home office at their New Jersey marital residence and in the bedroom of their New York apartment. The trial court awarded Husband statutory damages of $1000 for the phone wiretap and, for the invasion of privacy claim, $1 in nominal damages (as there had been no proof of actual damages) and $125,000 in punitive damages.
The New Jersey Court of Appeals reversed, concluding that award was erroneous. As to the New Jersey home office, there was no finding that Husband had a reasonable expectation of privacy in the home office, as the whole family freely used the room. As to the New York apartment, New York law provided no common law or statutory right of privacy. Moreover, even if there were a right of action, the court held that before punitive damages can be awarded, there must be a finding of compensatory damages, for which there was no proof here.
Colon v. Colon, (August 11, 2006)
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Monday, July 31, 2006
The Alaska Supreme Court holds that a prevailing party in actions to enforce custody under Alaska's version of the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA) shall be awarded actual reasonable attorney's fees and expenses. Alaska is the only state that has adopted general fee-shifting, allowing partial attorney's fees to the prevailing party as a matter of course in any case. However, the court here noted that the UCCJEA provides for an award of reasonable attorney's fees to a prevailing party, and concluded that "reasonable actual fees are intended rather than reasonable partial fees" (as would be the result under general Alaska court rule).
This case also raised the issue of recovery of attorneys fees by legal services attorneys. The prevailing party here was represented by Alaska Legal Services Corporation. Nonetheless, Alaska courts have been consistent in awarding attorneys fees even if the litigant is not personally responsible for fees to his or her attorney. The court found an argument that petitioner's counsel had violated legal services legal services funding restrictions (which prohibit requests for attorneys fees) to be irrelevant, noting that the remedy for any such violation is with the funder not the court.
Vazquez v. Campbell, 2006 Alas. LEXIS 115 (July 28, 2006) bgf
The New York Appellate Division has concluded that a prenuptial agreement precluding either spouse from seeking legal fees from the other in the event of a divorce, while not invalid on its face, is against public policy in this case given the gross disparity in the couple's finances. The court announced that fee waiver provisions should be reviewed on a case-by-case basis.
If, upon such an inquiry, the court determines that enforcement of the provision would preclude the non-monied spouse from carrying on or defending a matrimonial action or proceeding as justice requires, the provision may be held unenforceable. Also relevant to such a determination is the conduct of the parties over the course of the matrimonial action. Such a determination is frequently best made at the conclusion of the action. However, because an attorney's fee is authorized when needed to carry on or defend an action, it may be necessary to make such a determination at an earlier point in the litigation.
Kessler v. Kessler, NY App Div (July 11, 2006)
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Tuesday, June 20, 2006
Case Law Development: Judicial Determination that a Father is the Equitable Parent of a Child Precludes Paternity Actions against Other Fathers
A Michigan attorney was properly held liable for malpractice in failing to perfect an appeal of a child support order against a biological father because another man - the husband of the child's mother - had been already been adjudged to be the equitable parent. "Because a court determination that a man is the equitable father of a child is mutually exclusive of a determination that the child was born out of wedlock, an equitable parentage order precludes the mother from having standing to assert a paternity action regarding that child." Thus, had the support order been appealed, it would have surely been reversed, making the case for malpractice one readily proven.
Coble v. Green, 2006 Mich. App. LEXIS 1835 (June 15, 2006)
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Friday, June 16, 2006
Case Law Development: Attorneys Fees to Be Based on Relative Financial Ability not Success in Litigation
A Florida trial court denied attorney’s fees to wife in a child support modification and abatement action on the basis that she had received a substantial tax return the prior year and that her attorney had taken several “needless actions” in the litigation. The Florida Court of Appeals reversed, finding that the trial court erred in basing the fee decision on these factors and ignoring the gross disparity in income and resources between husband and wife. The court noted that the purpose of the fee-shifting statute in Florida family action statutes is “to ensure that both parties will have similar financial ability to obtain competent legal counsel. The primary factor in considering whether to award one party's fees is the financial resources of the parties. Other factors that may also be considered include the merits of the parties' respective positions, the duration of the litigation, whether the litigation is brought or maintained primarily to harass, or whether the defense is brought primarily to frustrate or stall.”
Here, the court of appeals noted that one need not be totally unable to afford attorneys fees in order to merit an award. Neither is success on issues necessary in order to be awarded attorneys fees. The court found that wife’s attorney had provided competent representation and had that there was no evidence of bad faith in any of the actions relied on by the trial court to deny fees.
Humerickhouse v. Humerickhouse, June 16, 2006.
Opinion on the web (last visited June 16, 2006)
Tuesday, June 13, 2006
Attorneys who had established a specialty practice representing individuals before the Family Court Division of the District of Columbia Superior Court, including volunteering as court appointed attorneys, sued the court, judges and officies of the DC Public Defender Service arguing that their property interest "taken" by District of Columbia Superior Court Administrative Order, which established panels of lawyers who were eligible for appointment to represent indigent parties in family court matters. The order established panels of qualified attorneys for representation of indigent clients in four types of cases: (1) juveniles alleged to be delinquent or in need of supervision, (2) minor children needing guardians ad litem in neglect and termination proceedings, (3) parents and caretakers in neglect and termination proceedings, and (4) children needing special education advocates.
The district court dismissed the attorneys' claims for money damages but did not dismiss their claims for injunctive and declaratory relief. The United States Court of Appeals for the District of Columbia reversed and remanded with directions to dismiss the Fifth Amendment claims.
The court of appeals held that the attorneys asserted no property interest that was protected by the Fifth Amendment, as they had no guaranteed entitlement to compensated appointments prior to the order. "There never has been a statute or rule, or even a practice, securing to attorneys a right to compensated Family Court Division of the District of Columbia Superior Court appointments. And a lawyer's inability to make a living as a family court practitioner without such appointments does not remotely create an entitlement." The court also noted that the defendant judges were entitled to judicial immunity with respect to their role in the panel selection process.
Roth v. King, June 9, 2006
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Tuesday, May 16, 2006
Case Law Development: North Dakota Holds Sex With Divorce Clients Constitutes Conflict of Interest Even if No Specific Rule Prohibits These Relationships
The North Dakota Supreme Court suspended an attorney for 90 days who had accepted about $20,000 from a mother he was representing in a custody action without providing accounting or billing statements and without determining what portion of the funds received were for fees not yet earned. The attorney also failed to maintain records of the cash payments from the mother and did not deposit the payments into a trust account. He also had begun a sexual relationship with the client during the representation.
The hearing panel had recommended a 30-day suspension for the fee violations, they did not recommend any sanction for the sexual relationship, as North Dakota Rules of Professional Conduct did not have a rule specifically prohibiting sexual relationships with clients (a new rule on the subject will take effect in August) and there was no proof that the sexual relationship affected the attorney's independent professional judgment.
The North Dakota Supreme Court agreed that there was clear evidence of violation of Rule 1.5 on fees, the court disagreed with the hearing panel's analysis of the propriety of the sexual relationship. Reviewing decisions from other courts, the court concluded that there was ample evidence of violation of the conflict of interest rule: "[Attorney] is an experienced lawyer who had to have known that the sexual relationship jeopardized the disposition of his client's custody case. The absence of a bright-line rule prohibiting sexual relationships with clients, and the lack of evidence of impaired representation, provide no excuse. The client's "motives" for becoming involved in the sexual relationship with [Attorney] are irrelevant. By engaging in a sexual relationship with his client during the course of the representation, [Attorney] placed his own interests above those of his client."
Disciplinary Board v. Chinquist, 2006 ND 107 (May 16, 2006)
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Thursday, April 27, 2006
The Florida Court of Appeals upholds a sanction against an attorney for abuse of process in which he is prevented from filing any further future pleadings, petitions, motions, documents or other filings in any way related to his domestic disputes unless signed by another member in good standing of the Florida Bar. Since 2002, the attorney had submitted numerous meritless filings in the state court, all related to or emanating out of his 1994 dissolution of marriage proceedings. The most recent filing, which resulted in the sanction order, was one in which the attorney sought to challenge the Judicial Qualifications Commission's decision not to pursue formal charges against several judges about whom he had filed complaints in relation to his ongoing child custody and child support disputes with his ex-wife.
Sibley v. Florida Judicial Qualifications Comm'n, 2006 Fla. LEXIS 667 (April 27, 2006)
Friday, April 21, 2006
Family law practice is a high burn-out field and our students should be repeatedly cautioned to take care of themselves and get help before they become overwhelmed, lest they find themselves harming clients and out of the profession entirely. Case in point: The Ohio Supreme Court indefinitely suspended an attorney for a series of representations in divorce actions in which she accepted retainers and then failed to carry through on the representation. Attorney cited her depression as a mitigating circumstance but the court noted in this regard her failure to comply with a previous lawyer’s assistance program contract.
Columbus Bar Association v. Harris, 108 Ohio St. 3d 543; 2006 Ohio 1715; 2006 Ohio LEXIS 974 (April 19, 2006)
Opinion on the web (last visited April 20, 2006 bgf)
Friday, April 14, 2006
A Connecticut divorce attorney has been reprimanded for violation of Rule 4.4 of the Rules of Professional Conduct for humming "The Twilight Zone" theme song to imply a client's ex-wife -- seated at the same table during a post-judgment divorce proceeding -- is mentally unstable. The statewide grievance committee found the action in violation of the discipline rule that prohibits using "means that have no substantial purpose other than to embarrass, delay, or burden a third person." Reported in The Connecticut Law Tribune.
Click here to read the story on Law.com (last visited April 13, 2006 bgf)
Tuesday, April 4, 2006
Family law clients may pressure attorneys to raise every conceivable argument available in pursuit of their case and attorneys are rightfully concerned when clients second guess their judgment not to raise a particular argument or defense. The Michigan Court of Appeals emphasizes in a decision this past week that an attorney is not liable for malpractice if he or she is exercising good faith strategic judgment. The case involved an attorney's failure to raise a statute of limitations defense in a child support action. The parent was subsequently arrested for non-payment of the ordered support and the trial judge in that action had sua sponte raised the statute of limitations issue and released the parent. Parent then sued his attorney, arguing that he would not have been arrested at all had the attorney raised the statute of limitations defense in the support action. Attorney argued that raising the statute of limitations defense was meritless because parent had made partial payments of support, which under Michigan law, serves to renew the child support obligation and thereby extend the statute of limitations. The trial court agreed and the court of appeals affirmed, noting that, simply because the judge in the criminal action had overlooked the exception to the statute of limitations, attorney had not duty to "forsee and exploit such an error." Moreover, the court of appeals emphasized that even assuming the statute of limitations defense would have properly barred the proceedings, attorney was not liable for malpractice. "By developing a strategy that a reasonable attorney could honestly believe was consistent with and well founded in state law, [attorney] acted in the best interests of this client."
Wickham v. Lepley, 2006 Mich. App. LEXIS 905 (March 30, 2006)
Opinion on the web (last visited April 4, 2006)
Friday, March 24, 2006
In nearly all states, attorneys in family law practice generate more disciplinary complaints than in other fields of law. While attorneys will argue that the high-emotional stakes of their cases are the cause of this higher complaint rate, all will agree that there are also attorneys practicing family law who simply aren't fulfilling their responsibilities. What to do with these attorneys?
Justices of the Ohio Supreme Court in two different opinions could not agree on the appropriate sanctions for attorneys who had taken money from clients in family law matters and then not carried out the representation. In both cases, the attorney's failure to cooperate with disciplinary authorities aggravated their sanctions and in both cases, dissenting justices argue that the sanctions imposed were too lenient.
In Dayton Bar Ass'n v. Stephan, 108 Ohio St. 3d 327; 2006 Ohio 1063; 2006 Ohio LEXIS 656, (March 22, 2006), the Supreme Court of Ohio issued a two-year suspension but stayed the entirety of the suspension on conditions of CLE requirements and supervision of the attoreny's practice management. The attorney had charged his divorce client an additional $350 to prepare a QDRO and then did not do so, requiring that she hire another attorney in order to avoid contempt for failing to prepare the document. Justices Moyer and O'Connor dissented, arguing that at least a portion of the suspension should be actually imposed rather than suspended.
In Erie-Huron Counties Joint Certified Griev. Comm. v. Huber, 108 Ohio St. 3d 338; 2006 Ohio 1066; 2006 Ohio LEXIS 662 (March 22, 2006) the lawyer was suspended for one year for misconduct in which he took retainers and did little or no work for three clients, made dishonest statements to clients during his representation, failed to provide requested information about malpractice-insurance coverage, and had been unwilling to refund fees to clients whose legal affairs he neglected. Two of the three cases were divorce actions. Justice Moyer again dissented, expressing dismay over the court's justifying its leniency because of the attorney's "long career in the legal profession." Justice Moyer ntoed "That is a new standard. I can only hope that this is the sole case in which it will be applied as the reason for such leniency. We should adopt the recommendation of the Board of Commissioners on Grievances and Discipline and issue an indefinite suspension to assure those who use the services of lawyers in Ohio that we are serious about our responsibility to appropriately sanction those lawyers who breach the rules of ethical conduct."
Tuesday, March 14, 2006
Rotating family law cases through judges and court dockets has many downsides. Recognizing this, the California Court of Appeals has held that a judge's impatience to finish up divorce trials the judge moves on to another courtroom is not a basis for declaring a mistrial when the parties are unable to conclude the trial in less than two days. In reversing the judge's declaration of mistrial, the court noted that there was only one witness left to call and only a few more hours left to go in the trial. The court determined that the judge's dissatisfaction with the amount of time the trial was taking in relationship to the amount at issue in the case could not by itself justify a mistrial and emphasized the importance in family law that one judge hear a case through to its conclusion. The court noted that the trial judge could take the case with her to her new courtroom assignment, which was only one courtroom away in the same courthouse and was still a family law assignment.
Blumenthal v. Superior Court, 2006 Cal. App. LEXIS 330 (March 10, 2006) BGF
Friday, March 10, 2006
An Ohio Attorney has had his licensed suspended for two years for incompetent and dishonest representation in a number of cases. Worth bringing to the attention of the family law student is the fact that a number of the attorney's violations included telling a client to keep his children in violation of a court order to transfer the children to the other parent and sending other attorneys to hearings when those attorneys were not prepared to handle the case.
Muskingum County Certified Griev. Comm. v. Greenberger, 108 Ohio St. 3d 258; 2006 Ohio 790; 2006 Ohio LEXIS 540 (March 8, 2006)
Opinion on the web (last visited March 10, 2006 bgf)
Case Law Development: New Jersey Supreme Court Requires Appointed Counsel for Indigent Parents Facing Coercive Incarceration for Non-payment of Child Support
The New Jersey Supreme Court has joined a number of other states in concluding that, even when a court is pursuing civil child support enforcement proceedings, if an indigent litigant faces a risk of incarceration, he or she has a right to assigned counsel. The Court rejected the contention that a judge can adequately protect an indigent parent by conducting a "thorough and searching ability-to-pay hearing. However well intentioned and scrupulously fair a judge may be, when a litigant is threatened with the loss of his or her liberty, process is what matters." The court concluded that from now on in enforcement hearings, "parents facing potential incarceration must be advised of their right to appointed counsel if they are indigent and, on request and verification of indigency, must be afforded counsel. Otherwise incarceration may not be used as an option to coerce compliance with support orders."
In considering the practical implications of its ruling the court commented: "We realize that unless there is a funding source for the provision of counsel to indigent parents in [child support enforcement] proceedings, coercive incarceration will not be an available sanction. We will not use our authority to impress lawyers into service without promise of payment to remedy the constitutional defect in our system. The benefits and burdens of our constitutional system must be borne by society as a whole. In the past, the Legislature has acted responsibly to provide funding to assure the availability of constitutionally mandated counsel to the poor. We trust that the Legislature will address the current issue as well."
Pasqua v. Council, 2006 N.J. LEXIS 171 (March 8, 2006)
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Friday, January 27, 2006
In another blow against hardball litigation tactics in divorce actions, a divorce attorney was given a two-year suspension for counseling Husband not to comply with the part of the divorce decree requiring that transfer certain documents and information to his former wife within 30 days. Rather the attorney had drafted deeds transferring the property to others and then, after her client was in contempt, drafted a deed transferring the property to wife, even though at that point her client no longer owned the property.
The Supreme Court of Nebraska, in affirming the recommendation of discipline, concluded "it is apparent that [Attorney] assisted her client, Ronnie, in an attempt to frustrate his divorce decree and that when that attempt failed, she engaged in a prolonged series of misleading transactions intended to extricate herself and Ronnie from the consequences of her actions. Not only was her conduct deceitful and prejudicial to the administration of justice, but it was a poor discharge of her ethical responsibility to Ronnie, who landed in jail as a result of [her] counsel." The court concluded that the attorneys' conduct involved dishonesty, fraud, deceit, or misrepresentation; that she counseled and assisted her client in conduct she knew to be illegal or fraudulent; and that she engaged in conduct prejudicial to the administration of justice.
State ex rel. Counsel for Discipline v. Horneber, 270 Neb. 951; 2006 Neb. LEXIS 13 (January 20, 2006)
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