Friday, November 21, 2008

Rightful Discharge

An attorney-shareholder in a law firm organized as a corporation was discharged after acknowledging that he had altered time records in connection with the representation of a firm client. He sued and summary judgment was granted to the defendant-law firm. The Kansas Court of Appeals upheld the dismissal:

This lawsuit pitted attorney Daniel K. Diederich, plaintiff, against the stockholders in his former law firm, Kennedy Berkley Yarnevich & Williamson, Chartered, of Salina. The stockholders are Defendants George W. Yarnevich, Larry G. Michel, Tom A. Williamson, and James R. Angell. Using several theories – breach of contract, breach of fiduciary duty, tortious interference with a contract, and civil conspiracy – Diederich sued the stockholders after he was fired. The district court granted summary judgment to the Defendants while denying Diederich's motion for partial summary judgment. Diederich appeals, contending error in all the court's rulings. A corporation acts through the work of its officers, directors, and employees. Because the Defendants are stockholders and directors of the corporation and they were acting within the scope of their duties when they dismissed Diederich for cause, we hold Diederich's claims do not survive summary judgment. We affirm.

The work at issue involved an estate client:

Diederich admitted that he did not do the work for the entries he changed. He admitted he made the changes intentionally so he could get credit for the time. The changes would have allowed Diederich to bill for 37.5 hours instead of the 16.2 that he recorded for the client. Though the altered entries were for work done in 2001, the bonus program in effect in 2004 stated that for fixing bonus compensation, they would credit an associate for revenues collected in a given year for work billed in that year. Diederich admitted that making the changes to the ledger would have affected the attorneys' collections for the year.

(Mike Frisch)

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