Thursday, November 8, 2007
A brewery owner who sought financing to expand his business entered into an agreement with a friend to seek investors in exchange for a finder's fee. The deal that the friend attempted to arrange collapsed and the brewery owner sued the friend and his attorneys on a theory of tortious interference. The case was thrown out on summary judgment and the defendants prevailed at trial on counterclaims asserting bad-faith litigation. The judgments were affirmed in 2003.
The D.C. Court of Appeals issued an opinion today that, among other things, affirmed Rule 11 sanctions against the two lawyers who brought the original suit for their conduct in suing opposing counsel. Quoting the finding of the trial judge, who ordered sanctions of $50,000: "the professional conduct of [the two attorneys] to be well beyond the pale. These two experienced lawyers knew, or had to know, they did not have sufficient evidence to make a case for tortious interference...[one of the lawyers] should have removed his blinders, faced up to the insubstantiality of the claim...and dismissed it from the case."
The court here held: "Only in rare circumstances will a party be justified in suing his opponent's lawyer. An attorney who pursues in good faith his or her client's case on a matter fairly debatable in the law cannot be held liable to an opposing party. Similarly, there can be no conspriracy when an attorney acts within the scope of his employment...[that is,] where an attorney's advice or advocacy is for the benefit of his client and not for the attorney's sole personal benefit." (citations and internal quotations omitted)(Mike Frisch)