August 3, 2009
What's In A Name?
The Louisiana Attorney Disciplinary Board has recommended the permanent disbarment of an attorney found to have engaged in a number of rule violations including conversion. The attorney's last name is Tooke. (Mike Frisch)
Larceny Charges Lead To Discipline
A South Carolina Magistrate received a public reprimand based on the following findings of fact:
On January 30, 2008, respondent was arrested and charged with petit larceny. The charge stemmed from the removal of a statue from the yard of a member of his wife’s family. The charge was nolle prossed on July 17, 2008. In the Agreement for Discipline by Consent, respondent does not admit any criminal wrongdoing, but acknowledges that as a sitting judge he should not have involved himself in his wife’s family matter because it could call into question the integrity of the judiciary.
On February 6, 2008, an order was issued placing respondent on interim suspension as a result of the criminal charge. On November 6, 2008, this Court found respondent in criminal contempt for violating the terms of the order. The finding of contempt was based on telephone calls made by respondent to his former magisterial employees in an effort to obtain a continuance in a case pending before the magistrate’s court to which he was not a party.
The sanction was an agreed disposition that took into account that the magistrate is no longer in office. (Mike Frisch)
Vicarious Malpractice Liability
Also from the Ohio Supreme Court web page:
The Court’s lead opinion, authored by Justice Terrence O’Donnell, was rendered in response to a certified question of state law submitted by the U.S. Sixth Circuit Court of Appeals.
The National Union Fire Insurance Company of Pittsburgh retained the Columbus law firm of Lane Alton & Horst and a partner in that firm, attorney Richard Wuerth, to defend a claims adjustment firm, McLarens Toplis, and an individual claims adjustor, Lany Wood, against a civil lawsuit filed against them in federal court by Nationwide Insurance. During the second week of an extended trial, Wuerth informed several Lane Alton partners and also mentioned to the trial judge that he was not feeling well. Later that week, while the trial was still underway, Wuerth collapsed at home and was taken to the hospital. His doctor subsequently advised the court that Wuerth was not physically or mentally capable of continuing with the trial, and would not be able to do so for a significant period of time. Lane Alton filed an unsuccessful motion for a mistrial, then assigned other firm attorneys to complete the trial. On Feb. 21, 2002, the jury returned a verdict in favor of Nationwide for $16.2 million. As the result of a high/low settlement agreement previously negotiated between the parties, National Union paid Nationwide $8.25 million on behalf of its insureds.
On Feb. 21, 2003, National Union filed suit in the United States District Court for the Southern District of Ohio, claiming that Wuerth had committed legal malpractice, that Lane Alton was vicariously liable for Wuerth’s malpractice, and that the firm itself committed malpractice. While National Union alleged numerous wrongful acts and omissions by several individuals in the firm, Wuerth was the only individual named as a defendant in the complaint. On a motion for summary judgment filed by Wuerth and Lane Alton, the district court dismissed Wuerth from the action because National Union had filed its complaint after the expiration of the one-year statute of limitations for legal malpractice claims set forth in R.C. 2305.11(A). Because National Union was time-barred from obtaining a judgment against Wuerth, the district court also dismissed the company’s claims for vicarious liability against Lane Alton. Finally, the district court determined that Lane Alton cannot be held directlyliable for legal malpractice because it is not an attorney and does not practice law.
National Union appealed to the United States Court of Appeals for the Sixth Circuit, asserting among other arguments that Lane Alton may be held directly liable for legal malpractice. The court of appeals determined that Ohio law is unsettled on this issue and asked the Supreme Court of Ohio to answer the following certified question: “Under Ohio law, can a legal malpractice claim be maintained directly against a law firm when all of the relevant principals and employees have either been dismissed from the lawsuit or were never sued in the first instance?” The Court agreed to answer the certified question.
In today’s decision, Justice O’Donnell wrote that the Sixth Circuit’s inquiry raised two separate issues: “one, whether a law firm may be directly liable for legal malpractice – i.e., whether a law firm, as an entity, can commit legal malpractice – and two, whether a law firm may be held vicariously liable for malpractice when none of its principals or employees are liable for malpractice or have been named as defendants.”
With regard to direct liability, Justice O’Donnell noted that in past rulings dealing with professional malpractice issues the Court has applied similar standards to physicians and attorneys. He cited several decisions in which the Court has held that the practice of medicine is limited to individual practitioners, and therefore that “because only individuals practice medicine, only individuals can commit medical malpractice. For instance, in Browning v. Burt (1993) ... we explained that ‘[a] hospital does not practice medicine and is incapable of committing malpractice,’” Justice O’Donnell wrote.
“This precedent concerning medical malpractice is consistent with the general definition of ‘malpractice’ that we set forth in Strock v. Pressnell (1988) wherein we stated, ‘The term “malpractice” refers to professional misconduct, i.e., the failure of one rendering services in the practice of a profession to exercise that degree of skill and learning normally applied by members of that profession in similar circumstances.’ As with the practice of medicine, it is apparent that only individuals may practice law in Ohio. Section 2(B)(1)(g), Article IV of the Ohio Constitution grants this court original jurisdiction with respect to ‘[a]dmission to the practice of law, the discipline of persons so admitted, and all other matters relating to the practice of law.’” Pointing to multiple provisions in the Court’s rules governing the practice of law that apply only to “persons” rather than business entities, Justice O’Donnell concluded: “(A) law firm is a business entity through which one or more individual attorneys practice their profession. While clients may refer to a law firm as providing their legal representation or giving legal advice, in reality, it is in every instance the attorneys in the firm who perform those services and with whom clients have an attorney-client relationship. Thus, in conformity with our decisions concerning the practice of medicine, we hold that a law firm does not engage in the practice of law and therefore cannot directly commit legal malpractice.”
With regard to the issue of vicarious liability of a law firm when none of the firm’s attorneys has been found liable for malpractice, Justice O’Donnell wrote that Ohio’s law of agency is based on the well-established doctrine of respondeat superior (the master is responsible for the acts of its servant).
“Although a party injured by an agent may sue the principal, the agent, or both, a principal is vicariously liable only when an agent could be held directly liable ... (I)n Comer v. Risko (2005) we recognized that ‘[t]he liability for the tortious conduct flows through the agent by virtue of the agency relationship to the principal. If there is no liability assigned to the agent, it logically follows that there can be no liability imposed upon the principal for the agent’s actions.’ ... There is no basis for differentiating between a law firm and any other principal to whom Ohio law would apply. In fact, the Restatement of the Law 3d, The Law Governing Lawyers (2000) ... indicates that a law firm has no vicarious liability unless at least one principal or employee of the firm is liable. ... Based on this authority, we hold that a law firm is vicariously liable for legal malpractice only when one or more of its principals or associates are liable for legal malpractice. Accordingly, we answer the certified question of state law in the negative.”
Justice O’Donnell’s opinion was joined by Chief Justice Thomas J. Moyer, Justices Maureen O’Connor and Robert R. Cupp and Judge Mary DeGenaro of the 7th District Court of Appeals, who sat by assignment in place of Justice Evelyn Lundberg Stratton.
Chief Justice Moyer also entered a separate concurring opinion that was joined by Justice O’Connor, Judge DeGenaro and Justices Paul E. Pfeifer and Judith Ann Lanzinger in which he emphasized that today’s ruling was in response to the very narrow legal question posed by the U.S. Sixth Circuit, and does not preclude the possibility of direct liability by a law firm to a client based on tortious conduct other than legal malpractice.
He concluded: “I stress the narrowness of our holding today. This opinion should not be understood to inhibit law-firm liability for acts like those alleged by the petitioner. Rather, a law firm may be held vicariously liable for malpractice as discussed in the majority opinion. Further, our holding today does not foreclose the possibility that a law firm may be directly liable on a cause of action other than malpractice. Yet the limited record and the nature of answering a certified question do not permit us to entertain such an inquiry in this case. Therefore, I concur in the majority opinion.”
Here is the court's opinion. (Mike Frisch)
Foreclosure Related Misconduct
From the web page of the Ohio Supreme Court:
The Court adopted findings by the Board of Commissioners on Grievances & Discipline that Willard violated multiple provisions of the Rules of Professional Conduct by partnering with the non-attorney owners of a company called Foreclosure Alternatives. The company identified homeowners against whom mortgage foreclosure actions had been filed and contacted them offering to negotiate a settlement with the lender that would halt the foreclosure process. Under Willard’s arrangement with Foreclosure Alternatives, when a homeowner responded to the company’s solicitation, the company would forward a power of attorney signed by the client and information about the foreclosure action to Willard, who would prepare and file an answer to the lender’s foreclosure complaint without meeting or speaking with the homeowner for a flat fee of $150 that he received from Foreclosure Alternatives. All negotiations with the lender and virtually all subsequent information and advice provided to homeowners about their cases was provided by the company’s non-attorney employees.
The Court agreed with the board’s findings that in collaborating with the non-attorney owners of Foreclosure Alternatives in at least 28 cases, Willard violated the state attorney discipline rules that prohibit requesting a third party to promote or recommend an attorney’s professional services; aiding a non-lawyer in the unauthorized practice of law; forming a partnership with a non-attorney and sharing legal fees with a non-attorney. The Court also found that Willard was guilty of two additional rule violations that were dismissed by the board: handling a legal matter without adequate preparation and failing to pursue the lawful objectives of a client.
Writing for a 4-3 majority of the Court, Chief Justice Thomas J. Moyer found that an actual suspension from practice, rather than a fully stayed suspension as recommended by the board, was appropriate because Willard’s ill-prepared representation and relegation of legal work to non-lawyers exposed vulnerable clients to an increased possibility of losing their homes. He also cited as an aggravating factor one instance in which Willard admitted accepting a fee despite knowing that a default judgment had already been entered against the homeowner and there was nothing that could be done to prevent foreclosure.
Chief Justice Moyer’s opinion was joined by Justices Evelyn Lundberg Stratton, Maureen O’Connor and Robert R. Cupp. Justices Paul E. Pfeifer, Terrence O’Donnell and Judith Ann Lanzinger dissented, stating that they would impose a one-year license suspension with all 12 months stayed on conditions.
The opinion is linked here. (Mike Frisch)
August 2, 2009
The Illinois Administrator has filed ethics charges against two co-respondents accused of the following course of conduct towards the opposing party in a divorce case:
On January 9, 2007, Respondents Muller and Walters filed their appearances on behalf of [the client] in case number 06 D 4687.
On January 29, 2007, Respondents, on behalf of [the client], filed a document entitled Petition For Issuance of a Rule to Show Cause, Petition for Temporary Child Support, and A Petition for Temporary Child Support in case number 06 D 4687.
On or about February 2, 2007, the Honorable David Delgago conducted a hearing in case number 06 D 4687 to determine whether [the husband] should be held in civil contempt.
On February 2, 2007, after Judge Delgado adjourned the proceedings in case number 06 D 4687 and left the bench, Respondent Muller, Respondent Walters, [the client and her husband], and his attorney, Barbara Lusky continued to have discussions about the case.
During the course of their discussions in on February 2, 2006, Respondent Muller and Respondent Walters taunted [the husband] by telling him that there would be a significant amount of homosexual activity in jail, that [he] would be a good target for inmates desiring sexual acts during his incarceration, and that [he] that he would be subjected to extensive cavity probes.
During the course of discussions on February 2, 2007, Respondent Walters taunted [the husband] by telling him that "Bubba would insert a probe up your penis"
During the course of these discussions on February 2, 2006, Respondent Muller and Respondent Walters taunted [the husband] by singing "Jail House Rock" him.
At the time Respondent Muller and Respondent Walter made the statements referenced...above, they knew or should have known that the statements served no substantial purpose other than to harass, embarrass or injure [the husband].
Of course, these are charges, not proven misconduct. If the charges are proven, I suspect that the sanction decision will be be, to a large degree, tied to their present attitude towards the behavior. (Mike Frisch)