Saturday, January 31, 2009
The Missouri Supreme Court indefinitely suspended an attorney for a minimum of six months for misconduct committed during his representation of a defendant on felony forgery charges. The lawyer advised the prosecutor that his client was the godchild of Terry Bradshaw and offered a signed baseball of the former Super Bowl MVP in exchange for reduced charges against the client. The prosecutor disbelieved the story. The lawyer obtained a ball and sports cards from the client that Bradshaw purportedly had signed and told the prosecutor he that had it. The prosecutor was "shocked" and refused to accept the ball. The FBI later determined that the signature was forged (who would accept as genuine an "autographed" ball from a defendant accused of multiple forgeries) ?
Conversations between the lawyer and client about the offer were taped. He told the client that the charges could be "taken care of" in exchange for the signed ball. The lawyer falsely denied the offer until confronted with the incriminating tape. The lawyer was able to get a deferred prosecution agreement and was not convicted of any offense.
The court here refused to impose the sanction retroactive to the deferred prosecution, which had included a provision that he voluntarily cease practice for a year. The charges against the client were reduced, apparently not in exchange for sports memorabilia.
The Florida Supreme Court upheld the decision of its Board of Bar Examiners to refuse to process the application for readmission of a disbarred lawyer. The court declined the applicant's plea to "extricate and rescue him from the web of deceit, deception and lies that he has woven since he was first suspended [in Florida] in 1988."
He had been originally admitted in the District of Columbia in 1968 and was subject to a series of sanctions in Florida including a suspension for escrow account violations. He failed to advise D.C. of the Florida discipline and concealed the sanction in order to secure admission in Palau. His "gossamer guile was eventually discovered" by a number of jurisdictions (the Federal States of Micronesia, Palau and D.C.) that then disbarred him, which led to his Florida disbarment on the basis of reciprocal discipline.
Here, the court held that he may not seek reinstatement in Florida until he obtains it in the jurisdiction that originally had disbarred him. To hold otherwise, the court concluded, would create the possibility of turning Florida into a "safe haven" for lawyers determined to be worthy of the ultimate sanction by another jurisdiction.
A dissent would find that Florida, rather than Palau, is the applicant's "home state" and thus would not apply the jurisdictional bar to possible readmission found by the majority.
Note: I had some involvement in the D.C. disbarment. (Mike Frisch)
The Louisiana Supreme Court imposed a suspension of two years in a matter where the attorney had been convicted of felony unauthorized entry into an inhabited dwelling stemming from a dispute with his former fiancee. After he was suspended on an interim basis as a result of the conviction, he failed to so advise a client; rather, he told the client that the case had been reassigned to another attorney. The client objected to the transfer of the case and filed a bar complaint. A third matter involved the lawyer's representation of his employee in an accident case. He had failed to provide the case file to new counsel after he was discharged.
The court imposed the suspension nunc pro tunc to the date of the November 2004 interim suspension, concluding that a two year prospective suspension would be punitive. (Mike Frisch)
Friday, January 30, 2009
In a civil case brought by the victims of an attorney who had misappropriated entrusted funds, the Vermont Supreme Court reversed and remanded a jury award to consider additional damages based on the lawyer's malice. The key facts:
Here, plaintiffs’ complaint contained the following allegations. When mother hired defendant to obtain estate funds earmarked for her children following their father’s suicide and their grandmother’s death, defendant unsuccessfully tried to persuade mother to invest the funds in his real estate business as they became available. Even though mother declined this offer, defendant transferred $300,000 of estate funds he received into his own account to support his business, without informing plaintiffs that he had received the funds. Mother called defendant regularly about the status of the funds, but defendant deceived her by saying that the funds were tied up in probate or were otherwise not available. Defendant’s theft of the funds and deceit about their availability continued for over two years, until mother learned that the funds had been sent to defendant for the children years earlier. Defendant did not dispute any of these facts, contending only—and not by affidavit—that he was not aware of the children’s needs for the funds, as mother claimed. In short, the undisputed facts demonstrated that defendant was a lawyer who breached his fiduciary duty to vulnerable clients recovering from the loss of a family member by stealing their money and then lying about it over a period of years until the clients discovered the theft.
The court notes:
In this case, although defendant acknowledges stealing plaintiffs’ money and then lying to them about the theft for years notwithstanding his fiduciary duty to them, he contends that the jury could reasonably have found no malice because (1) he did not intend to harm them, and (2) he always intended to return the money to them sooner rather than later. We conclude that even if the jury accepted this explanation entirely, defendant’s fraudulent conduct demonstrated bad motive and malice. Defendant’s admitted motive was to enrich himself and promote the interests of his company, which in and of itself demonstrates a bad motive. To find malice, the jury was not required to determine that defendant’s motive in stealing plaintiffs’ estate funds was to harm them rather than enrich himself. If that were the case, punitive damages would never be available against companies that, for example, knowingly placed dangerous products into the market, hoping that people would not get hurt, but willing to ignore a great risk of harm to increase profits.
The court concludes that malice was established as a matter of law. The jury had awarded compensatory but not punitive damages. On remand,the jury must consider whether to award punitive damages against the attorney. (Mike Frisch)
An attorney was suspended for two years (which requires that he petition for reinstatement) by the Kansas Supreme Court. The attorney engaged in misconduct in three client matters, failed to respond to disciplinary counsel and provided false testimony in the bar proceedings. One of the client matters involved his representation of a Cleveland Browns football player in a child support action. The attorney failed to seek modification of court-ordered support after a series of injuries led to the client's reduction in salary and eventual release. The following misconduct was found:
[the attorney] failed to keep Chapman [the client] reasonably informed about the status of the matter or failed to provide requested information...the panel found a violation under KRPC 8.4(c) for engaging in dishonest conduct when he (1) proffered to the court that Chapman failed to timely provide requested financial documents, (2) testified at the disciplinary hearing that neither Chapman nor anyone on his behalf asked Swanson to file a motion to modify child support, (3) testified that neither Chapman nor anyone on his behalf provided Swanson with a letter of release from the Cleveland Browns, and (4) provided the Chapmans and Mrs. Madden with false information about filing the motion to modify child support.
A second matter involved the attorney's representation of an accident victim. After the attorney was discharged (and after the statute of limitations had run), the client sued for legal malpractice. The lawyer produced a letter purporting to terminate him before the statute had run, which the client denied sending:
During a hearing in the professional negligence case, the district court asked Swanson why he had not previously produced the December 2, 1999, letter. The exchange was as follows:
"THE COURT: Why wasn't the letter produced?
"MR. SWANSON: Your Honor, I don't know why the letter was not produced. I had a flood in my office on May 15th of '03, and I have had all kinds of files that I have rearranged and transferred and tried to pull apart because they were stuck together, and I can't tell you why it was not produced. There was no intent on [my part] to not produce this document. I think that–this document is the same document that [Ybarra], himself, has been aware of since December of 1999, so this is no surprise to [Ybarra] at all about this document. This December 2, 1999 document written by [Ybarra] terminating me as his attorney of record, that document has been in [Ybarra]'s possession. [He] knew of that document, and why [Ybarra] did or did not tell [his] attorney, I don't know. But there's no surprise about that document. . . . Well, I can't tell you that I lost it in the flood. I'm not trying to make up things. I'm telling you that this file, along with a whole bunch of files, were in disarray because they were sitting on the floor, and I had four inches of water."
At the disciplinary hearing, Swanson explained why he did not produce the December 2, 1999, letter earlier in a number of different ways. He testified that he had a flood in his office, it was a frivolous claim and the jury agreed with him, he could not locate the original copy of the letter and Ybarra's daughter later gave him a copy of the letter after Ybarra moved out of the family home, he did not know why he did not produce the letter, and he did not produce the letter earlier because he was confident a jury of 12 people would believe him that Ybarra fired him before the statute of limitations ran.
The court affirmed panel findings of dishonest conduct in personal injury matter ans false testimony at the disciplinary hearing. A minority of the court would disbar. (Mike Frisch)
Posted by Jeff Lipshaw
I can't let it pass without comment when a front page story in the New York Times claims "Billable Hours Giving Ground at Law Firms." I don't need to call my friend and empirical guru Bill Henderson to peg this as anecdotal, since the story itself concedes that explicitly. Indeed, there are a number of truths in the story, not the least of which are (a) David Wilkins' prescient comment to the effect that billable hours show clients' revealed preferences, notwithstanding a lot of yapping to the contrary, and (b) the very open question whether lawyers are good enough business people to operate a business model in which they have to price according to another measure of value, and bear the operating risk of a cost base that exceeds the revenue. (I acknowledge, by the way, this is generally a "Big Law" issue.)
The real question is whether, overall, the total price approximated by billable hours is an acceptable surrogate for the value to the client. Bill is free to chime in with hard evidence, but my intuition as a former buyer and seller is that the overall acceptability of the surrogate is indeed revealed by the overwhelming instance of its use in the market.
There's no question that alternative fee arrangements work around the edges. There's a lot of commodity work out there in which scrivening takes priority over analysis, risk assessment, or judgment, and that can occur even within assignments. Even in a huge bet the company transaction, I could tell you how much, roughly, it ought to cost to produce the first draft of the merger agreement and supporting documents.
But let's take an example of a real problem. Back a few years ago, companies were looking for a way to make their pension plan obligations more determinate, but without going to defined contribution plans. In a defined benefit plan, the company promises to pay the employee according to a formula that has to do with years of service and rate of pay. It's the company's responsibility to make sure it has assets available to pay the pension, and it's the gap between the assets available and the obligations that cause the problems (i.e., investments go up and down, but the obligations don't!). In a defined contribution plan, the company simply makes a contribution to the employee's account, usually in the form of a match to the employee's own contribution, as in a 401(k) plan. In the cash balance plan, the company says: "We know employees don't do a great job of managing their own 401(k) plans. But we are getting killed by the actuarial uncertainty of making promises for benefits years in the future, and then leaving ourselves at risk on the investment side. So here's our new promise: we will put a set amount in your pension account every year, and we promise that it will grow at 5% a year. We'll take the risk that we can't get a five percent return on the pension assets (which is what makes it a defined benefit plan)."
For somebody starting out, it doesn't make too much difference. But if you are an older worker affected by the conversion, you will lose value, because even though your defined benefit plan gets vested and terminated, the reality is that most of the value in the traditional plan accrues in the last years of service. The test case was in Illinois, and older employees at IBM got the federal district judge to agree that somehow the fact that older people didn't get as much benefit from the time value of money constituted discrimination among employees, which would violate ERISA. The Seventh Circuit ultimately reversed it, but there were a lot of employee benefits lawyers giving advice to companies on cash balance plans for a number of years, given the uncertainty.
The first prong of my thesis is that this is precisely the kind of mixed law and business problem on which law firms assist clients all the time, and it's really difficult for either side to price the assignment by any method other than the billable hour. The firm wants to be sure it has its ducks in a row, and so does the client. Both tend to agree (implicitly) that the number of hours the lawyers spend doing that is a pretty good surrogate for the value to the client. To return to the "bet the company" transaction, as I said, I can price certain aspects of the deal (what we used to call "activity-based billing") either as a seller or a buyer. What is far more difficult to price is the service provided when, as always occurs, the s*** hits the fan, and we have an all-night negotiation, or the need for research into whether the tender offer will violate the best price rule, or some such issue.
The second prong of my thesis is that it's not clients who hate billable hours, but the lawyers themselves. A Cravath partner said "this is the time to get rid of the billable hour," which might have been the lyrics to my theme song when I moved from a firm to a corporation twice. I don't think it has anything to do with billable hours per se, but with the fact that being an outside lawyer is a tough and exhausting profession (one that usually happens to pay pretty well) very often entered into by smart people with lots of fungible smarts, but without any particular passion for what they are doing. (Hence, the fact that well-paid lawyers are among the most prolific whiners in the charted universe!) The problem isn't the billable hour, but the fact that the lawyer is only slightly more vested in the outcome or the business (other than by fear of failure) than the typical assembly line worker is in the car.
As I've said before, I was a 1,800 hour biller as a law firm lawyer (to my everlasting shame, I actually hit it on the nose one year, provoking a lot of comment, and my response being if I was looking at it, do you think I'd actually hit it on the mark instead of going home five hours early or coming in for five hours over the weekend?) My first year in the corporation I'm sure I worked what would have been the equivalent of 2,500 or 2,600 hours, but the fact that the time was means and the business (not just the deal) was the end stood in contrast to the other model, in which the outcomes are means, and the time is the end. That is certainly the law firm business model!
That's not to say that there aren't deal lawyers and trial lawyers and tax lawyers and environmental lawyers in big firms who don't love what they do. There are, and for them, billable hours simply aren't an issue.
A truly radical approach to the practice would recognize that lawyers in big firms might well have more passion around the firm as a business if they had a meaningful stake in it as owners. I'm not just speaking about associates. There are a lot of nominal partners who can't say that they have any meaningful ownership commitment.
End of screed.
A case decided today by the Nebraska Supreme Court analyzes the question of the extent to which an attorney can competently represent clients in an area of practice where the attorney has little or no prior experience. The attorney has practice for 40 years in Kearney, Nebraska. He was contacted by clients who wished to franchise their coffee shop business, which operated under the name Barrista's Daily Grind. The attorney had previously reviewed franchise agreements for purchasers but had never represented a seller and was generally unfamiliar with state and federal law in the area. He contacted a Washington, D.C. attorney who warned him that franchising agreements were a specialized field fraught with problems for the uninitiated lawyer. Nonetheless the lawyer proceeded with the representation.
As one might guess, this turned out badly for the clients. The completed franchise agreements (21 in all) were not compliant with legal requirements and led to significant adverse consequences. The problems surfaced when franchises were sold out of state.
The Nebraska court, although concluding that suspension was not required, took the opportunity to warn the bar against undertaking representations for which an attorney is not qualified by training and experience. (Mike Frisch)
An attorney who had mishandled a civil appeal was publicly reprimanded by the Wisconsin Supreme Court.The factual predicate:
January 2, 2004, Attorney Mulligan filed a cross-appeal seeking reversal of the jury's finding that a breach of contract had occurred. He argued that the evidence at trial was not sufficient to support the jury's verdict. However, Attorney Mulligan never obtained the transcripts from the trial and never filed a transcript from the jury trial with the court of appeals. Attorney Mulligan never consulted with or advised D.C. [the client] that he was proceeding with the appeal without having obtained the trial transcripts. Indeed, Attorney Mulligan did not communicate with his client after January 17, 2004——the date Attorney Mulligan received advance fees to pursue the appeal——until June 3, 2005——the date he notified D.C. of the court of appeals' adverse decision.
In its decision, the court of appeals observed:
On cross-appeal, [D.C] challenges the sufficiency of the evidence to support the jury's verdict. His argument, however, is wholly undeveloped and unsupported by any reference to the record or trial testimony. See
Wis. Stat. (Rule) 809.19(1)(e) (2003-04). Because [D.C] proffers no argument susceptible to meaningful appellate review, we affirm the judgment against him.
The attorney must also complete CLE-approved courses in legal writing and appellate practice. (MIke Frisch)
The Nebraska Supreme Court disbarred an attorney who had previously been admonished and suspended for twelve months without reinstatement. In the present matters, among other things, the attorney had escalated a simple contract matter into one involving possible illegal and criminal conduct, contacted a represented party without counsel's permission, taken a disputed fee without authority and forged her client's name to a purported pro se pleading.
The misconduct was compounded by the failure to respond to the bar complaints, which Nebraska takes as a serious obligation: "Failure to respond to inquires and requests for information from [disciplinary counsel] is an important matter and a threat to the credibility of attorney discipline proceedings." (Mike Frisch)
An attorney who had accepted advanced fees from four clients seeking bankruptcy protection, misled the clients into believing that their case had been filed and defaulted on the ensuing bar charges was indefinitely suspended by the Ohio Supreme Court. When he eventually filed the cases, the petitions were incomplete and inaccurate. He then failed to appear for scheduled hearings in the matters.
According to the court's web page, there is no current contact information for the suspended lawyer. (Mike Frisch)
Thursday, January 29, 2009
An attorney who had been twice convicted of alcohol-related traffic offenses was suspended for two years, stayed in its entirety in favor of probation for two years, based on an agreed disposition adopted by the Pennsylvania Supreme Court. The attorney has been sober since August 2007 and must remain so during the period of probation. There are a number of probationary conditions imposed to monitor his compliance.
The attorney has a record of prior discipline including a current three year suspension imposed retroactive to December 2004 for indecent assualt on a client. The two year probation goes into effect when the attorney obtains his reinstatement to practice. (Mike Frisch)
Posted by Alan Childress
And if the product of law school is humorless people, is that caused by the education, or are humorless people drawn to enroll in the first place? That's after years of people telling them they should go to law school, which was said sarcastically, but they did not get the sarcasm because they are humorless. I do not know, but I hope Bill Henderson launches a multivariate longitudinal study of the phenomenon. Maybe there is grant money available from Pfizer or whoever makes the anti-restless-leg drug.
I think it is pretty clear that legal education at least alters the sense of humor palpably, similar to how Duncan Kennedy's classic 1982 crit thinkpiece, Law School and the Reproduction of Hierarchy, argued that an ostensibly neutral education is a cover for an intensely person-altering political and social indoctrination. Maybe med school does the same thing to someone's funny bone--I would never get through the day with a straight face saying "infarction" and "acute angina." But that only proves I am 14; last week,I kept giggling at an exam answer's reference to a "federal fee-shitting statute" even though I know it's just a typo. And for sure law school destroys the ability to say "statue" without thinking twice.
Lawyers have our own sense of humor, which isn't funny to "laypeople" (heh heh) and objectively isn't funny. The punch line of several of my conversations is "Well, yeah, res ipsa loquitur!" A student lamented to me just last week that she could not get through a lawyer's helping her move in his pickup without enduring several attempts to call himself a "lodestar." That kind of thing. You know, unaware unfunny. I told her to get used to it--you will be this way soon enough. (Sort of like pod people.)
We also don't laugh at some things lay people find very funny. I got an email today from a non-lawyer all mocking us because of some list going around of stupid questions lawyers ask in court. The rest of the viral email is below the fold, but here are the sort:
ATTORNEY: Were you present when your picture was taken?
WITNESS: Are you shittin' me?
ATTORNEY: How was your first marriage terminated?
WITNESS: By death.
ATTORNEY: And by whose death was it terminated?
WITNESS: Now whose death do you suppose terminated it?
Because the guy who forwarded this to me asked "Where do these things come from?," and I humorlessly took that as non-rhetorical, I wrote this reply, really:
Half of them come from my teaching in evidence class, to get something in the record even though it seems obvious and a necessary inference from the prior statement. While inartfully stated, many of these make sense to me. Some things (like death) are an element of a crime or tort and must be proved in the record by a statement of the witness, not the lawyer, or else it won't hold up on appeal. Even a picture cannot be admitted into evidence without a witness "authenticating" it, for example by stating that he was there when it was made (and by the next question, recognizes it). Other questions are worded so as to not sound leading, when really they are, so as to avoid an objection that it is leading. And some may just be designed to elicit a snear that makes the jury like the witness less.
So that is my reply to this viral email. (I have reacted humorlessly before to those emails about stupid tort suits; most of them are urban myths.) I get the joke, but I also get what the lawyer was trying to do.
A county court judge was reprimanded by the Florida Supreme Court as a result of his filing a petition for writ of mandamus seeking to compel the public defender, states attorney, county sheriff and various judges to "comply with the constitutional, statutory, and procedural rules...long ago put in place to provide for a meaningful first appearance hearing for all citizens accused of a crime who cannot immediately make bond." The court held:
While we agree that much of the judge's criticism [in the petition] would not be subject to sanction if presented in another context, such as a discussion at a judicial conference, we agree with the JQC [Judicial Qualifications Commission] that the filing of the petition was inappropriate. In sum...the petition was highly critical of the local judiciary and its filing clearly crossed the line between what is appropriate and what is not.
The court held that the judge had not followed proper channels regarding the alleged misconduct of other judges but rejected the charge that the pro se filing involved the unauthorized practice of law. (Mike Frisch)
From the Daily News Brooklyn:
A crooked Brooklyn lawyer ripped off disabled people to the tune of $4 million and used the cash to spruce up his plush suburban home, prosecutors charged Wednesday.
Steven Rondos, 44, and his law firm, Raia & Rondos of Bay Ridge, blew cash from clients' malpractice settlements on a home theater, a fancy new kitchen and landscaping for his Ridgewood, N.J., home, authorities said.
"The son of a b---- was a pretty vicious guy, preying on incapacitated people," Manhattan District Attorney Robert Morgenthau said.
Rondos stole more than $4 million from 23 incapacitated victims between 2001 and 2008 by putting the bulk of money from their medical malpractice settlements into his firm's account, Morgenthau said.
Rondos used the money to make mortgage payments and renovate his New Jersey house, and to pay for landscaping and install a home theater, prosecutors said.
Rondos recently agreed to be disbarred over similar allegations in New Jersey, court papers revealed.
Rondos' lawyer, David Frankel, did not return calls.
Morgenthau said it was "shocking" that court-appointed regulators never spotted the fraud.
"A lot of people should have paid more attention to what this [guy] was doing," he said.
David Bookstaver, a spokesman for the Office of Court Administration, claimed officials have closed loopholes in the system that helped allow the scam to go unnoticed.
An attorney who had been suspended for 60 days and reinstated subject to a two year probationary period was suspended for a minimum of six months for failure to comply with the terms of probation and failure to cooperate with disciplinary counsel. The Minnesota Supreme Court rejected the "contention that where there are no underlying ethical violations, an attorney should should not be sanctioned for failing to cooperate with the [bar counsel]... Rather, [the attorney] utterly failed to cooperate in the performance of stipulated terms of probation, terms that [he] agreed to not once, but twice, in the original stipulation and in the stipulation extending probation." (Mike Frisch)
An attorney was disbarred by the New Hampshire Supreme Court for misconduct committed in conjunction with another now-disbarred lawyer. The two attorneys had initiated two actions on behalf of the clients concerning alleged construction defects in thier newly-built home. They ignored motions and failed to appear at a status conference. They concealed the dismissal of one case and moved to non-suit the remaining case. When the court directed the clients to pay the fees of opposing counsel and notice was served on the clients, the clients reviewed the court file: "[o]nly then did the [clients] learn the duration and extent of [the two lawyers' ] neglect and malfeasance." The clients filed a bar complaint.
The court here noted that the lawyer had voluntarily ceased his practice and will allow a petition for reinstatement to be filed three years after the date of cessation. The attorney had shown remorse and sought treatment for alcohol addiction. However, the lawyer's "deliberate deception of his clients over a substantial period can abide no less a sanction than disbarment." (Mike Frisch)
From the web page of the Ohio Supreme Court:
The Supreme Court of Ohio today publicly reprimanded Judge John M. Stuard of the Trumbull County Court of Common Pleas and assistant county prosecutor Christopher D. Becker for professional misconduct arising from Becker’s preparation, at Stuard’s request, of the judge’s sentencing opinion affirming the death sentence in the 2003 murder case of Donna Roberts.
Roberts’ sentence was subsequently reversed by the Supreme Court, and the case was remanded for resentencing based on the prosecutor’s improper involvement in preparation of the court’s sentencing order.
The Court adopted findings by the Board of Commissioners on Grievances & Discipline that, following Stuard’s personal review and agreement with the jury’s recommendation of a death sentence, Stuard and Becker engaged in improper ex parte communications when, without notifying defense counsel, Stuard gave his notes to Becker and asked Becker to draft the court’s sentencing opinion. The Court also found ex parte communication violations when Stuard and Becker subsequently exchanged edited versions of the sentencing order.
The Court also agreed with the board’s findings that Becker’s actions violated the state attorney discipline rule that bars conduct prejudicial to the administration of justice, and that Stuard’s conduct violated the judicial ethics canon that requires a judge to “respect and comply with the law and … act at all times in a manner that promotes public confidence in the integrity of the judiciary.”
Finding that there were no aggravating factors in the case and that both Stuard and Becker had acknowledged the impropriety of their actions, had no prior disciplinary infractions and enjoyed reputations in the community for honesty, good character and professional competence, the Court adopted the board’s recommendation of a public reprimand as the appropriate sanction for both parties.
The Court dismissed a disciplinary charge that was brought against a second assistant prosecutor, Kenneth Bailey, who reviewed the draft sentencing order and recommended several changes. The Court agreed with the disciplinary board’s finding that Bailey had not engaged in improper ex parte communications with the judge and was not guilty of misconduct.
The court's opinion is linked here. (Mike Frisch)
Wednesday, January 28, 2009
In an action brought by the Oregon State Bar Professional Liability Fund and two lawyers in a law firm, the Oregon Court of Appeals held that the trial court had correctly granted a declaratory judgment. The defendants were investors in a business enterprise who sued two attorneys insured by the Fund. The business objective was to provide continuing education to dentists. The claim against the one of the lawyers was settled for the full amount of coverage and the defendants sought additional payment fron the second lawyer.
The court here concluded that the coverage provided to the lawyers was limited to $300,000 for the "same or related" claim and that the claims brought were related. Thus, the second lawyer had no additional coverage under the insurance policy:
...we conclude that the [insurance policy's] definition of the phrase "same or related claims" is not ambiguous or reasonably susceptible to more than one plausible meaning. Indeed, the phrase is broadly defined and expressly encompasses a number of considerations that are clear on their face. Pursuant to the policy definition, two claims are the "same or related" where they arise out of any of the listed categories between which there is a causal or logical connection or common bond or nexus.
The evidentiary record on summary judgment demonstrates that the claims at issue in this case fall within the Plan's definition as the "same or related" as a matter of law. The clients represented by both attorneys were the same or were at least connected to one another. The business enterprise was started by the organizers for the purpose of providing continuing education to dentists. As part of that business enterprise, Case formed an LLC and performed legal work to assist the organizers in securing investors. Newton thereafter changed the form of the business, whose purpose remained the same, and did legal work to retain the investments made by the same investors. Moreover, the professional malpractice claims against both attorneys arise out of the efforts of Case and Newton to retain the same investment funds for the organizers. Case's failure to properly comply with securities laws gave rise to the later employment of Newton, who sought to remedy what Case had not accomplished. Additionally, as evidenced by the amended complaint, the claims by the investors against Newton and Case sought the same damages. Indeed, the complaint specifically refers to the investors' original investments in the company as the basis of their claim for damages against Case. Likewise, in the demand for relief against Newton, the investors sought to recover their original investments in the company.
We conclude, therefore, that the claims against Case and Newton are the "same or related" as that term is defined within the Plan. Accordingly, the trial court correctly concluded that the $300,000 limit of coverage applies to Newton's coverage under the Plan.
Tuesday, January 27, 2009
[posted by Bill Henderson]
Thanks to the Georgetown Center for the Study of the Legal Profession and the Georgetown Journal of Legal Ethics, on March 3, 2009, GULC will be holding another major conference on the empirical research on the legal profession. As always, the public is welcomed to attend. Details online here.
One of the best features of the Georgetown conferences is the intense interaction between the academics and the practitioners -- both groups learn a lot and really enjoy the experience. Over the years, the Center has generated a loyal following within the DC Bar.
Congrats to Carole Silver, Mitt Regan, Jeff Bauman, and the editors of the Georgetown Journal on Legal Ethics for putting together a wonderful program.
A trip to the Maine home of an attorney eight or nine years ago does not automatically require the disqualification of a judge in matters involving the attorney's clients, according to a recent opinion of the Florida Judicial Ethics Advisory Committee. The judge had previously entered a standing recusal order in the attorney's matters. They remain friendly and occasionally email each other. The committee opines that the trip must be disclosed to the opposing side for purposes of considering a motion to disqualify:
Under the facts provided here, the Committee concludes that the lapse of eight to nine years greatly lessens the chance that a displeased litigant will blame his or her loss on the judge’s acceptance of a gift from opposing counsel. Accordingly, so long as the judge concludes that there is no personal bias, the Committee believes that automatic recusal is no longer necessary.
As to the remaining issue of disclosure, the Committee concludes that disclosure on the record of the judge's prior standing recusal order and the judge’s relationship with the attorney is required. The judge's obligation to disclose relevant information is broader than the duty to disqualify. In re Frank, 753 So. 2d 1228, 1239 (Fla. 2000); Stevens v. American Healthcare Corp., 919 So. 2d 713, 715 (Fla. 2d DCA 2006). The Commentary to Canon 3E(1) states that “[a] judge should disclose on the record information that the judge believes the parties or their lawyers might consider relevant to the question of disqualification, even if the judge believes there is no real basis for disqualification.”
The Committee concludes that parties or their lawyers who appear before the judge might consider the gift of a long weekend trip to the lawyer's home in Maine to be relevant to the question of disqualification, particularly in light of the fact that the judge and the lawyer continue to email each other regularly. See Fla. JEAC 89-03 (accepting contributions to son’s quail-raising hobby, hunting with attorney, and use of attorney’s North Carolina cabin requires disclosure of the relationship and benefit received); but see Fla. JEAC 99-2 (judge is in best position to make decision as to whether disclosure is required).
Although the nature of the emails has not been described, the fact of the continuing correspondence by email and its regularity suggests some degree of personal familiarity beyond the type of ordinary social pleasantries one would expect to be exchanged between a judge and an attorney who regularly appears before the judge. Accordingly, the Committee further advises that if the judge decides to cease the practice of automatic recusal from cases involving the attorney and the attorney’s firm, the judge should either discontinue the practice of regular email with the attorney or should disclose the fact of those communications now and for some reasonable period of time after termination of the practice.
Finally, the Committee reminds the judge that "disclosure of information is not an admission of bias but is necessary to enable a party to make an informed decision as to whether or not to seek disqualification." See Fla. JEAC Op. 04-06; Fla. JEAC Op. 01-17. The disclosure of a social or personal relationship does not automatically trigger an obligation to disqualify. See Stevens, 919 So. 2d at 715; Commentary to Canon 3E(1).