March 7, 2009
Fair and Reasonable Value
In an action brought for unpaid legal fees, the New York Appellate Division for the Second Judicial Department held that the attorney could not recover pursuant to the retainer agreement because that agreement was "susceptible of no interpretation" other than a prohibited contingent fee arrangement in a domestic relations matter. Any recovery must be on a quantum meruit basis:
"If the terms of a retainer agreement are not established, or if a client discharges an attorney without cause, the attorney may recover only in quantum meruit to the extent that the fair and reasonable value of legal services can be established" In order to make out a claim in quantum meruit, a claimant must establish (1) the performance of the services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services'". In support of its motion for summary judgment, the plaintiff established that it performed legal services on the defendant's behalf in good faith, and that the defendant accepted these services. However, the plaintiff failed, on this motion, to establish that it expected compensation for its services, at least insofar as the matrimonial matter was concerned, and failed to establish the reasonable value of its services. Accordingly, the Supreme Court properly denied that branch of the plaintiff's motion which was for summary judgment on the second cause of action, seeking recovery in quantum meruit. The court also properly denied that branch of the defendant's cross motion which was for summary judgment dismissing the second cause of action.
The court's decision does not address the ethical (as opposed to contractual) issue raised by the prohibited fee agreement. (Mike Frisch)
March 6, 2009
Plea Agreement Not Violated
The Kansas Supreme Court rejected an attempt to allow a defendant to withdraw a guilty plea in connection with murdering one child and molesting another child. The court received a brief from counsel and a pro se brief from the defendant ("We are favored with two briefs"). On the merits, the court concluded that the prosecutor's allocution did not violate the plea agreement:
In essence, the prosecutor's arguments appear to have been directly tailored to address the defense's attempt to cast Woodward in a favorable light. The plea-bargained recommended sentence was not the minimum which the court could impose. If the sentencing court had found the defense's proffered mitigation to be compelling, it was not precluded from doing something less than recommended, such as running all of the convictions concurrently. See State v. Hill, 247 Kan. 377, 385, 799 P.2d 997 (1990) (plea bargain terms not binding on trial court). In that context, the State was free to argue why the recommended sentence was also the most appropriate sentence to impose under the circumstances. The plea agreement did not require the prosecutor to ignore the defense's attempts to minimize Woodward's culpability.
Accordingly, we find that the prosecutor made an unequivocal recommendation that the sentencing court impose a sentence of life plus 10 years to life, as provided in the plea agreement. Nothing the prosecutor said at the sentencing hearing was intended to undermine the State's recommendation or to suggest that the sentencing court impose a harsher sentence. The State did not breach the plea agreement, so there was no manifest injustice to correct. Accordingly, we need not consider whether the district court's denial of the plea withdrawal motion was an abuse of discretion. The district court did not err in summarily denying Woodward's motion to withdraw his plea.
Remand To Determine Reasonable Fee
An attorney represented a client in a workers' compensation matter under a 1/3 contingency fee agreement. The representation terminated prior to completion and the attorney sought a lien or fees against the settlement payments. The Nebraska Supreme Court held that the attorney was entitled to a reasonable fee for services performed but found the record below insufficient to determine the fee amount. The court remanded for further fact finding consistent with the opinion, instructing the lower court to look to the factors set forth in ethics rules governing Nebraska lawyers. (Mike Frisch)
March 5, 2009
Shaggy Cow Story
The California Court of Appeal for the Fourth Appellate Division, Division Three, affirmed an arbitration award, concluding that the trial court had not erred in declining to vacate the award because of alleged bias of the arbitrator. The dispute involved a second boat dock that the dissatisfied claimants marketed while selling their home on Harbor Island in Newport Beach. The buyers (who won the arbitration) claimed that the second dock was a misrepresentation concerning the conveyed property. Three days after the arbitration hearing, the attorneys for both sides attended a St. Patrick's Day party at Muldoon's Irish Pub that the arbitrator also attended. They all exchanged cordial greetings, mingled and parted amicably.
Counsel for the home sellers raised the bias issue after the adverse tentative decision of the arbitrator was released. He represented that he made inquiries that revealed that the arbitrator and opposing counsel "are both in the Celtic Bar Association and regularly attend meetings at Muldoon's..." and may have gone on a CLE trip to Scotland together. Opposing counsel responded that the 10 day Scotland trip was attended by 65 people and that he had had little contact with the arbitrator: "My wife and I were admiring the extraordinary sight of a herd of shaggy long haired cows standing in knee-deep mud in a pasture behind Culloden House when [the judge and others] approached us...We spent a few light moments exchanging comments, primarily about cows, and went on our separate ways."
The court here held that the trial court could reasonably have found insufficient evidence of bias. The common bar membership did not establish that they were "drinking buddies" as alleged. The fact that opposing counsel also had offered a paperback that he had finished reading to the arbitrator's spouse as they were returning from Scotland was also insufficient: "no reasonable person would view such a trivial travel courtesy with suspicion." (Mike Frisch)
Charges Of Instituting Frivolous And Unauthorized Litigation
A recent complaint filed by the Illinois Bar administrator alleges misconduct by an attorney in connection with the representation of a person injured when he was struck by a UPS truck. The lawyer was approached by the wife of the injured person. She had been separated from her husband for a year and had no power of attorney to retain counsel or for any other purpose. The lawyer never met with the client but filed suit on his behalf as co-plaintiff with the wife. When a suit based on the same incident was filed by another attorney who had the authority to do so, it is alleged that the charged attorney moved to dismiss the authorized case and sought to have the wife appointed as guardian without legal grounds.
The lawyer is charged with misconduct that includes making false statements to a tribunal, dishonesty and instituting frivolous claims. (Mike Frisch)
Study Abroad in Greece and the Greek Isles Via Tulane Law's Summer School, Including Class In Comparative Professions
Posted by Alan Childress
My annual reminder is, thankfully, still true in '09: Tulane's summer school program to be held June 21-July 10, 2009, on the beautiful and car-free Isle of Spetses is still available for enrollment this month (the sooner the better). Students from all law schools are welcome to study abroad with us (in English), not just Tulaners. And there are openings in either of the Rhodes programs before and after Spetses, starting May 31. Not too late to book a trip (search Kayak.com) and attend one or more of the three-week sessions in these playful and historic islands.
I teach "Comparative Legal Profession" in Spetses and have posted some pics on my website. Here is the Spetses Hotel where the Spetses program takes place -- nicest people in the world. Its restaurant (meals are included) looks out on palms and sea. There are two bars, overlooking the sea and next to the private beach area.
If you go to the first Rhodos session as well, be sure to take classes from such teaching legends as Thanassi Yiannopoulos and Martin Davies. In Spetses, book my 8:00 a.m. class (there is always siesta time later) or -- if you must -- a later one taught by such all-stars as Mark Wessman, Anastasia Alexiou, and Kathy Lorio. Here are the faculty and all the courses. The view from your room's balcony? Shown right (click to enlarge).
The District of Columbia Court of Appeals decided the first case under the new consent disposition procedure. The court imposed the jointly recommended sanction of a one-year suspension with fitness for an array of violations sounding in pervasive neglecct of client matters. Given the stipulated violations, reinstatement on application will require a significant showing of rehabilitation and fitness to practice that may make the process both lenghty and uncertain as to outcome. The public is thus adequately protected and the prosecutor has given away nothing that gives any concern about plea bargaining the case away.
The other benefits in terms of time and consumption of resources are obvious. The case was heard by a hearing committee in December 2008 and is now over in early March 2009. If tried as was required in the pre-negotiated disposition world, this same result would have taken 5-7 years. Further, there likely would be full briefing before a hearing committee, the board and the court. (MIke Frisch)
The District of Columbia Court of Appeals adopted the recommendation of its Board on Professional Responsibility to impose disbarment in a reciprocal discipline matter. The sanction in Massachusetts had been a two-year suspension. The court agreed with the board that the underlying misconduct findings in Massachusetts established by clear and convincing evidence that a greater sanction than that ordered by the disciplining court.
The lawyer's misconduct involved conversion of corporate funds for personal use, fabricating documents and false statements to conceal his actions. The Massachusetts Supreme Judicial Court had found that the conversion "did not constitute a misappropriation of client funds while...engaged in the practice of law." The summary of the case from the web page of the Massachusetts Bar is linked here. (Mike Frisch)
March 4, 2009
Just Cause For Withdrawal
The New York Appellate Division for the First Judicial Department held that a lawyer firm that withdraws from a personal injury case on the eve of trial must demonstrate just cause for the termination in order to establish a fee claim:
The underlying personal injury action sought damages for serious injuries allegedly sustained by plaintiff while working at a construction site in 2000. On the eve of trial, the Trolman firm moved to be relieved as plaintiff's counsel and for the imposition of a statutory lien for legal fees and disbursements.
It is well settled that "where an attorney's representation terminates and there has been no misconduct, no discharge for just cause and no unjustified abandonment by the attorney, the attorney's right to enforce the statutory charging lien is preserved" (Klein v Eubank, 87 NY2d 459, 464 ; see also Delaj v Jameson, 51 AD3d 450 , lv dismissed 11 NY3d 816 ). However, the moving papers did not give any indication of the ground upon which the relief was sought, stating only that "it became clear to us that we could not proceed as [plaintiff's] attorneys." This vagueness was not cured by counsel's reference, during argument, to an unspecified ethical constraint. In the absence of an adequate showing of the grounds for the relief sought, an evidentiary hearing must be held to determine whether withdrawal was with just cause.
State Must Prove Doctor Trafficked in Drugs
The web page of the Ohio Supreme Court reports:
The Supreme Court of Ohio ruled today that, to convict a licensed health professional of trafficking in drugs under R.C. 2925.03(A), the state bears the burden of showing that a statutory exception for licensed health professionals does not apply by proving beyond a reasonable doubt that the defendant violated statutes or regulations that define the standard of care for dispensing controlled substances.
The Court’s 7-0 decision, authored by Justice Evelyn Lundberg Stratton, affirmed a ruling of the 2nd District Court of Appeals.
In 2004, Dr. William Nucklos of Springfield was charged with 10 felony counts of drug trafficking under R.C. 2925.03 for allegedly prescribing a prescription pain-killer drug to patients in an illegal manner. As a defense against those charges, Nucklos cited an exception in the drug-trafficking statute, R.C. 2925.03(B)(1), which provides that the criminal offense of trafficking in drugs “does not apply” to a licensed health professional who dispenses controlled substances as long as that person’s actions fall within the minimum standard of care set forth in specified sections of state law.
During Nucklos’ trial, the judge instructed jurors that they should consider the licensed health professional exception to the drug trafficking statute as an “affirmative defense,” i.e., that in order to find Nucklos not guilty based on that exception, they must find that Nucklos proved by a preponderance of the evidence that he acted within the minimum standards required by law. Nucklos was found guilty on all counts and sentenced to a total of 20 years in prison.
Nucklos appealed his convictions. Among other claims, he argued that the trial court erred in instructing the jury that he bore the burden of proving that his actions were lawful. The 2nd District Court of Appeals reversed Nucklos’ convictions and remanded the case for a new trial, holding that the licensed health professional exception set forth in R.C. 2925.03(B)(1) does not establish an affirmative defense that a defendant must prove, but rather establishes an additional element that the state must prove beyond a reasonable doubt when it pursues drug trafficking charges against a health professional.
The state sought and was granted Supreme Court review of the 2nd District’s ruling.
Writing for the Court in today’s decision, Justice Stratton noted that under R.C. 2901.05(D) an “affirmative defense” applies where a defendant’s actions would normally constitute commission of a criminal offense, but the applicable statute provides “an excuse or justification peculiarly within the knowledge of the accused” that, if proved by the defendant, exempts him from criminal liability.
“Had the General Assembly intended R.C. 2925.03(B)(1) to be an affirmative defense as defined in R.C. 2901.05(D)(1), it could have stated that a licensed health professional who complies with applicable regulations is excused from criminal liability for trafficking in drugs, or is justified in distributing a controlled substances. However, it did not use either of these terms,” wrote Justice Stratton. “Instead, R.C. 2925.03(B)(1) states that the offense of trafficking in drugs ‘does not apply’ to licensed health professionals who comply with applicable statutes or regulations.”
“Physicians legally and legitimately prescribe drugs to treat their patients on a daily basis. To accept the state’s argument that R.C. 2925.03(B)(1) is an affirmative defense would place an unreasonable burden upon all doctors who prescribe drugs to prove compliance with statutes or regulations to avoid criminal liability for merely practicing medicine. We do not believe that the General Assembly intended to criminalize legitimate medical treatment. Rather, we believe that the General Assembly consciously avoided such an absurd result by stating that trafficking in drugs ‘does not apply’ to licensed health professionals who comply with applicable statutory or regulatory requirements.... Accordingly, we hold that proving a health professional’s compliance with statutes or regulations does not fall within the definition of an affirmative defense in R.C. 2901.05(D)(2) because it is not an excuse or justification, and proof of compliance is not peculiarly within the knowledge of the accused.”
Citing the U.S. Supreme Court’s 1970 holding in In re Winship, Justice Stratton concluded: “The state cannot convict a licensed health professional of trafficking in drugs under R.C. 2925.03(A) unless the licensed health professional has failed to comply with applicable statutory or regulatory requirements. R.C. 2925.03(B)(1). Proving noncompliance is therefore necessary to prove the offense of drug trafficking when a licensed health professional is charged. ... Accordingly, we hold that a licensed health professional’s failure to comply with statutory or regulatory requirements is an element of the offense of drug trafficking that the state must prove beyond a reasonable doubt.”
The court's decision is linked here. (Mike Frisch)
March 3, 2009
The Indiana Supreme Court has disbarred an attorney convicted of filing a false federal income tax return. The attorney had pled guilty to one of three counts charging the criminal violations. Disbarment was found to be the appropriate sanction for a felony that involves false swearing, which here was done with a selfish motive. Also relevant to sanction was the fact that the attorney had been disciplined for unrelated ethical misconduct on three occasions. (Mike Frisch)
March 2, 2009
One of the perils of moving from practice to academia led to the following sanction reported in this month's California Bar Journal:
[An attorney] was suspended for one year, stayed, placed on one year of probation with a 30-day actual suspension, and he was ordered to take the MPRE within one year. The order took effect Sept. 26, 2008.
[He] left his law firm in 2004 to become a professor at Whittier Law School. However, he did not notify the State Bar of a change of address. He later was suspended for failing to complete MCLE requirements or pay bar dues.
While suspended, he handled a case and conducted a deposition. He paid his bar fees and complied with the MCLE requirement the day after the deposition and was reinstated.
[He] admitted he did not change his address and he practiced while suspended. However, the bar court declined to find his actions entailed moral turpitude, as charged by the bar. [He]argued that he was unaware of his suspension through negligence.
In mitigation, he cooperated with the bar’s investigation, immediately paid his dues when he became aware of the suspension, presented favorable reference letters and has done extensive pro bono work.
Charges of moral turpitude? Base, vile and depraved? I think this falls short of conduct that offends the moral code of mankind. (Mike Frisch)
Loans From Client Draw Suspension, Probation
The web page of the California Bar Journal reports:
BYRON LEE LANDAU [#177247], 55, of Aliso Viejo was suspended for two years, stayed, placed on three years of probation with an actual 60-day suspension and was ordered to prove his rehabilitation and take the MPRE within one year. The order took effect Sept. 26, 2008.
Landau stipulated that he entered into a business transaction with a client without fully disclosing the terms of the transaction or advising the client to seek independent legal counsel.
In 2002, Landau became friendly with David Bezar, manager and owner of Interactive Communications, LLC. Landau represented Bezar in a contract dispute and Bezar loaned Landau small amounts of money that he repaid. In May 2003, Bezar hired Landau for another contract dispute and a short time later, loaned Landau money to keep his law practice afloat. Landau and his wife were co-debtors in a bankruptcy action at the time.
Over the next five months, Landau accepted eight loans totaling $115,000 from Bezar, who became a consultant to Landau’s law firm. At one point, Landau offered Bezar positions as chief operating officer and chief financial officer. They hired another lawyer to help negotiate the terms under which Bezar would provide management and consulting services to Landau’s firm, but they never reached a formal agreement.
While negotiations were ongoing, Landau disputed Bezar’s accounting of work done for the law firm. A couple of weeks later, Bezar bought a $25,000 Lexus for Landau, who provided a $2,000 down payment and agreed to pay all expenses including insurance, maintenance and gas. Bezar financed the remaining $23,000 in his name.
Three days after Landau borrowed more than $33,000 from Bezar, bringing the total to $115,000, he informed Bezar his services as COO and CFO would not be required. One of Landau’s employees was promoted to do the work.
Two days later, Landau e-mailed Bezar a proposed MOU under which Bezar/Interactive would provide consultation services worth $3,000 a month and would loan Landau more money, up to $150,000. They could not agree and Bezar asked Landau to either finalize an agreement or repay the loans. Landau agreed to try to finalize an agreement and asked the other lawyer to try again.
Bezar next asked Landau for proof of insurance for the Lexus, instructed the other lawyer to stop working on an agreement, and demanded repayment of some expenses rendered to Landau’s law firm as well as a minimum payment on the loans. Although Landau claimed he made the payments, Bezar demanded repayment of the full amount. Landau refused. He also refused to return the Lexus, which Bezar repossessed.
Bezar sued Landau, who agreed to repay $117,000.
In mitigation, Landau cooperated with the bar’s investigation.
Suspension For Contempt
The West Virginia Supreme Court of Appeals found a lawyer had violated an earlier disciplinary order and suspended the lawyer as a result of the contempt:
It is abundantly clear that Respondent completely failed to comply with the directives set forth in the May 22, 2008, order of this Court. As further evidence of her utter disregard for this Court's authority, she neither responded to the petition for rule to show cause, nor appeared at the February 3, 2009, hearing. We find Respondent to be in contempt of the May 22, 2008, order. Furthermore, we hold that the appropriate sanction in this case is immediate suspension of Respondent's license to practice law in West Virginia until such time as she fully complies with that order...
... Based upon the foregoing, we find Respondent to be in contempt of this Court's order entered May 22, 2008, and order her license to practice law in the State of West Virginia immediately and indefinitely suspended until such time as she can demonstrate full compliance with this Court's order of May 22, 2008.
The court's original disciplinary order involved a finding that the lawyer had failed to diligently represent and communicate with a client. The court had been sympathetic to the lawyer, imposing admonishment and a year of practice supervision. (Mike Frisch)
Rare Day in California
From the California Bar Journal:
The State Bar’s disciplinary unit had a busy day Feb. 11:
The Supreme Court ordered the disbarment of Beverly Hills attorney Richard Isaac Fine, who called himself the “Don Quixote of the Law.”
In a high-profile case, a State Bar Court judge recommended a four-year suspension of a Santa Clara County deputy district attorney.
Working with the Orange County district attorney, the bar shut down three offices operated by a southern California lawyer who has been hospitalized since January, leaving more than 2,000 cases unattended.
“It’s rare that we get three such significant orders on the same day,” said Chief Trial Counsel Scott Drexel. “The orders were all, for different reasons, very important public protection and administration of justice achievements for the State Bar and the citizens of California.”
The article describing each case is linked here. (Mike Frisch)
An Illinois attorney has been charged with ethics violations in connection with his conduct as managing member of Tsunami Capital LLC. the entity was registered with the Commodity Futures Trading commission as a commodity pool operator and trading advisor.
The attorney is alleged to have solicted investors by making false representations about the financial stability of Tsunami and presented potential investors with false financial information. The Adminstrator alleges misconduct involving three investors. One allegation states:
In late 2005, Respondent made oral representations to potential investor Peter Tamuzian ("Tamuzian") that Tsunami Lakeshore had been profitable. In or about February 2006, as a result of Respondent’s representations, Tamuzian invested $60,000 from his employee retirement savings account. Respondent knew that his representations to Tamuzian were false since the Tsunami Lakeshore account had been closed since January 2005.
Sometime after February 2006, Respondent created, or caused to be created, account statements for Tsunami Lakeshore which purported to show that Tamuzian’s investment had earned 7.83% for March 2006. Respondent knew or should have known that the account statements he provided to Tamuzian was false since the Tsunami Lakeshore account had been closed since January 2
In May 2006, based on the false statements provided to him by Respondent, Tamuzian invested an additional $40,000 to Respondent to invest in the Tsunami Lakeshore account.
From at least April 2002 to at least April 2007, by making false oral representations about the profitability of Tsunami Lakeshore and by creating false account statements that reflected profitable track records, Respondent solicited and accepted $16,312,100 from 108 individuals for the purpose of trading financial futures, and used those funds for his own personal purposes.
The CFTC had filed a civil complaint concerning the same allegations and the attorney reportedly has just been indicted on federal criminal charges. The linked Chicago Tribune article describes him as a "big time investor and former owner of two of the hottest high-end nightclubs in Chicago." (Mike Frisch)
March 1, 2009
Law Of The Internet
The Maryland Court of Appeals issued an interesting decision last Friday concerning the authority of a court to compel an Internet website host to identify forum participants that post anonymous comments in a lawsuit brought by a plaintiff claiming defamation. The court notes that the case is one the first in Maryland to consider Internet-related issues. The principal opinion holds that the trial court must allow the defendant a reasonable opportunity to notify the person whose identity is sought, allow that person the opportunity to oppose disclosure, require the plaintiff to identify the allegedly defamatory speech, determine whether the plaintiff has established a prima facie claim and then impose a balancing test of the strength of the claim versus the forum participant's First Amendment rights in determining whether to order disclosure.
A concurring opinion, joined by two judges, is concerned about the application of the balancing test: "I fear that the majority's decision invites the lower courts to apply, on an ad hoc basis, a 'superlaw' of Internet defamation that can trump the well-established defamation law." (Mike Frisch)