November 19, 2011
Reward Without Risk Leads To Suspension
The Massachusetts Supreme Judicial Court has imposed a suspension of a year and a day of an attorney who had charged a contingent fee where recovery was a certainty. The attorney was aware that the client was the named beneficiary of an annuity.
According to this summary on the web page of the Board of Bar Overseers:
By entering into an agreement for, charging, and collecting a contingent fee for filing
a claim for an annuity when there was no contingency, the respondent charged a clearly
excessive fee in violation of Mass. R. Prof. C. 1.5(a). By failing to explain to his client in
advance of entering into the contingent-fee agreement that he had already discovered the
existence of the annuity for which she was a beneficiary, the respondent failed to explain a
matter to the extent necessary to permit the client to make informed decisions regarding the
representation in violation of Mass. R. Prof. C. 1.4(b). By concealing from his client that he
was already aware of the existence of the annuity naming her as a beneficiary before entering
into the contingent-fee agreement, the respondent engaged in conduct involving dishonesty,
fraud, deceit, or misrepresentation, in violation of Mass. R. Prof. C. 8.4(c). In aggravation,
the respondent had substantial experience in the practice of law, and a selfish motive for the
November 18, 2011
From Horses To Gerbils
The Montana Supreme Court affirmed the dismissal of a legal malpractice claim on statute of limitations grounds.
The plaintiff had been represented by the defendant in connection with charges arising out of an animal cruelty investigation. Plaintiff was "charged with 130 counts of failure to vaccinate, 138 counts of failure to tag, and six counts of animal cruelty. Over 200 animals ranging from horses to gerbils were seized."
The defendant filed a motion to suppress the evidence, which was denied.
Plaintiff claims that defendant told her, "I know we can win this case." She nonetheless signed a plea agreement and pled to nine failures to vaccinate and tag and no contest to single count of cruelty. Defendant moved to withdraw from the case after sentencing. Plaintiff sought to appeal but was foreclosed by the plea agreement.
The suit here was filed more than three years after the sentencing. (Mike Frisch)
Ante Upped For Practice While Suspended
The Michigan Attorney Discipline Board increased the sanction of reprimand to a 30-day suspension where an attorney had knowingly appeared for a court proceeding while suspended for non-payment of dues. The board agreed with the Administrator that the sanction was insufficient in light of the misconduct. (Mike Frisch)
Proceedings In Chambers Lead To Admonishment
A town court justice who "as a practice...regularly held court proceedings in chambers as opposed to the courtroom" has been admonished by the New York Commission on Judicial Conduct.
The agreed statement accepted by the commission recites that the justice engaged in chambers proceedings for "personal convenience" notwithstanding the fact that "[t]he courtroom is well-equipped and spacious. It can accommodate numerous members of the public who wish to observe court proceedings."
The chambers-as-courtroom conduct spanned a period of seven years and continued in the face of concerns expressed by the clerk's office and others. The practice has now stopped. (Mike Frisch)
A Loose Ship, An Incredible Witness
A Louisiana Hearing Committee has recommended a fully-deferred suspension of 60 days as sanction for an attorney who failed to properly supervise his employees (which included his office manager daughter). As a result of his inattention, one of the employees was able to perpetrate a "house-flipping" scheme that resulted in harm to two victims.
The committee found that the attorney had captained an "extremely loose ship" where his non-lawyer daughter essentially ran the practice.
The committee further found the attorney to be a "sympathetic, but credible witness." By contrast, the bad employee "lacked credibility in all aspects of his testimony, except maybe when he stated his name." (Mike Frisch)
November 17, 2011
Claims Against Law Firm Barred
The West Virginia Supreme Court of Appeals affirmed the grant of summary judgment to Kutak Rock in an action brought by an accounting firm found liable to the FDIC for a negligent bank audit.
The court held that the accounting firm:
...may not file a subsequent action against the bank's law firm alleging direct claims for fraud, negligent misrepresentation and tortious interference with contract where: (1) the law firm, as joint tortfeasor, executed a prior, good faith settlement with the FDIC, thereby extinguishing the accounting firm's right of contribution, (2) the accounting firm was awarded a credit reduction on the verdict based on the settlement, (3) the direct claims alleged by the accounting firm arose from the same facts and circumstances which contributed to the bank's loss and resulted in judgment obtained by the FDIC, (4) the damages sought by the accounting firm against the law firm are substantially the same as the judgment obtained by the FDIC, (5) the accounting firm knew in advance that the audit would involve a high risk of misrepresentation of data by bank managers and (6) the engagement of the accounting firm to perform the audit, originating through the Office of the Comptroller of the Currency, performed a public function.
The claims asserted against the firm "are, in reality, contribution claims rather than direct or independent claims and are, therefore, barred by the May 2003 settlement agreement made in good faith between Kutak and the FDIC."
The underlying representation involved the activities of the First National Bank of Keystone, which had implemented a "securitization" strategy that had led to disaster. (Mike Frisch)
November 16, 2011
The Louisiana Supreme Court has accepted a proposed consent sanction of a fully deferred six-month suspension and probation of two years for an escrow account overdraft.
The shortfall was caused by bank service charges. (Mike Frisch)
Living Outside Of Hennepin County
The Minnesota Supreme Court has imposed a censure and six-month suspension without pay for judicial misconduct by a Hennepin County District Court Judge. The misconduct involved the judge's failure to reside in her judicial district while serving in office and lack of candor and cooperation with the ensuing investigation of her residency status.
The judicial residence requirement is contained in the Minnesota Constitution.
There is a concurring opinion that would find the sanction appropriate solely for the lack of candor.
StarTribune has this report and description of the hearing:
A three-day hearing in January delved into a litany of personal information about Karasov and her family, including her two daughters and her ex-husband, Hennepin County District Judge Fred Karasov.
Karasov represented herself during the hearing, cross-examining her ex-husband and his wife. Witnesses also included people who said they were neighbors of Karasov when she lived at the lake home in Chisago City, northeast of the Twin Cities and well outside her district.
According to the board, Karasov, who was elected to serve in the Fourth Judicial District in 1995, lived in Chisago City with Hennepin County Sheriff's Deputy Catherine Christman from April 2007 until the fall of 2009.
The board alleged that Karasov tried to justify withholding information about her residences by saying that a man had stalked her. She refused to tell the board the man's name or give other details, saying that "the board does not have unlimited power to delve into the personal life of every judge.''
More on the hearing from StarTribune here. (Mike Frisch)
Referring Doctor Not Liable
In a decision that may provide some level of comfort to attorneys who refer persons to other counsel, the Delaware Supreme Court has held that a doctor who refers a patient to a specialist for treatment is not liable for the specialist's medical malpractice. The referring doctor had transferred full responsibility for the patient's care to the specialist. (Mike Frisch)
I Could Write A Book
The Indiana Court of Appeals has reversed a murder conviction and ordered the appointment of a special prosecutor where the prosecutor had entered into a (now cancelled) literary contract for a book about the case. The contract "created an irreversible, actual conflict of interest with [the prosecutor's] duty to the people of Indiana...the trial court erred when it denied [the defendant's] petition."
The defendant was facing a third trial and second retrial on charges that he had murdered his wife and two children. The first conviction was reversed due to prejudicial evidence concerning the defendant's extramarital affairs. After the second conviction, he filed an interlocutory appeal seeking a special prosecutor in light of the book deal.
The Floyd County Prosecutor prosecuted the defendant in the second trial. He was contacted by a literary agency "hours before the jury reached a verdict..." He inked the deal before sentencing. The defendant got life without parole.
The book deal progressed under the working title, "Sacred Trust: Deadly Betrayal." The prosecutor received an advance payment of $1,700. After the conviction was reversed by the Indiana Supreme Court, Penguin (the publisher) decided to delay any decision about moving forward with the book. Eventually, the deal fell through. The prosecutor returned the advance to Penguin.
The prosecutor refiled the murder charges. The defendant sought to remove him and have a special prosecutor appointed because of the book deal. At a hearing on the motion, Dean Emeritus Norman Lefstein at Indiana University School of Law testified that there was a conflict of interest. The trial court nonetheless denied the motion in light of the cancellation of the contract.
The court here found that the book deal was "a bell that cannot be unrung" that "permanently compromised [the prosecutor's] ability to advocate on behalf of the people of the state of Indiana in this trial."
Thanks to my favorite Hoosier attorney - Don Lundberg - for sending me the case.
Inspiration for the title to the post: Frank Sinatra. (Mike Frisch)
November 15, 2011
Update: Harvard Law Review's Supreme Court survey issue now also an ebook in Kindle, Nook, Apple formats
Just an update to my post this weekend about Yale L.J. Yesterday, Harvard L. Rev. also added its first ebook edition of the academic year--its annual special issue on the Supreme Court last term. In addition to extensive summaries of major cases of the 2010 Term, the issue features a substantive Foreword by Dan Kahan and an article by Judith Resnik. Its ebook formats (Amazon Kindle and B&N Nook; or at Apple iBooks) have linked notes, tables, and cross-references. [Alan Childress]
"Reasonable Remedial Measures"
You don't see many bar discipline cases that address the issue of what constitutes a "reasonable remedial measure" under Rule 3.3 when a lawyer learns of false evidence or fraudulent client conduct.
In a case filed yesterday, the Illinois Review Board found the measures taken by the attorney sufficient and recommended that surviving charges against the attorney be dismissed.
The facts are complicated, involving an attorney admitted in 1966 who has engaged primarily in solo practice. He had represented the client's parents and known the client ("Nick") since childhood.
Nick was married with six kids. He was also having an affair with the nanny. The attorney represented Nick in defending a divorce and domestic violence charges. Nick and Mrs. Nick later reconciled.
The attorney then agreed to represent the nanny in a divorce action against Mr. Nanny. As part of that matter, Mr. Nanny was ordered to pay temporary support for the child born while he was married to Mrs. Nanny. Mrs. Nanny testified that her husband was the father of her child.
Trouble was, the child's father was Nick, a fact learned by the attorney subsequent to the hearing where support had been ordered. He told Mr. Nanny's attorney but not the court. He also represented Nick at a hearing where his paternity for the child was established.
Meanwhile, Mrs. Nick had filed a new divorce action. The matter unraveled when she retained new counsel, who was advised of the paternity action and sought to intervene.
The complaint was initiated by three judges who presided over the various matters.
The Review Board found that the attorney's behavior was reasonable:
Here, [the attorney] Rantis reasonably believed that his communications with [Mrs. Nanny] Sylwia and [Mr. Nanny's] attorney Zarnecki were sufficient to undo the effects of Sylwia’s false statements. After learning the results of the paternity test, Rantis advised Sylwia that she could no longer collect child support from [Mr. Nanny] Dariusz, that she would be required to reimburse him, and that it would be necessary to file a parentage action to legally establish Nick’s paternity. There is no evidence in the record that Sylwia declined to cooperate with Rantis’s advice. On the contrary, the evidence showed that Rantis, presumably with Sylwia’s approval, told attorney Zarnecki that Dariusz should stop making support payments. Rantis then worked with attorney Zarnecki on a settlement in the dissolution matter, which was intended to resolve the reimbursement of Dariusz’s prior support payments and to clarify that Dariusz was not Constantine’s father. Rantis and attorney Zarnecki believed that these steps adequately addressed the issue. Attorney Zarnecki testified that he felt that Rantis was always honest and straightforward with him regarding the paternity issue.
We do not disregard Rantis’s duty of candor toward the court. However, the evidence did not demonstrate that disclosure to the court was required during the stage of the proceedings at issue. Although the order of protection remained in effect, the record indicates that it was extended by agreement while the parties worked on the settlement. The order of protection was not enforced, and Rantis had no reason to believe that it would be enforced.
Between the time that Rantis disclosed Nick’s paternity to attorney Zarnecki and December 8, 2008, when Judge Betar confronted Rantis about the parentage action, nothing of significance occurred in the Murawska/Ziembinski dissolution case that would have compelled the disclosure of Sylwia’s false statements. Additionally, by the time Rantis appeared before Judge Betar on December 8, 2008, he and attorney Zarnecki had filed pretrial memoranda indicating that Dariusz was not Constantine’s father and providing for the reimbursement of Dariusz’s earlier payments to Sylwia. The record does not reveal, and the Administrator does not explain, how an earlier disclosure was necessary or would have made any difference in the Murawska/Ziembinski dissolution case. This does not mean that the case may not have reached the point where disclosure was necessary, but the case resolved itself prior to that time. For all of the foregoing reasons, we conclude that Rantis’s remedial measures were reasonable and the circumstances did not require disclosure of Sylwia’s false statements to Judge Betar. Consequently, we recommend that the Hearing Board’s finding that Rantis violated Rule 3.3(a)(1) be reversed.
Any PR profs out there looking for an exam question? (Mike Frisch)
November 14, 2011
A Florida Reprimand
A reprimand was imposed by the Florida Supreme Court against Larry Klayman arising from his representation of a client in a criminal matter.
The client filed a bar grievance alleging that he had failed to provide the paid-for services. The matter was submitted to mediation and Klayman failed to comply with the terms of the mediation agreement. He "indicated that he was facing a very difficult financial situation but that he had every intention of honoring his agreement with [the client]." He was then unable to make the agreed payment by the agreed date.
When he then made a payment, the grievance committee determined that the matter should be closed without a probable cause finding.
He made two more payments but "did not make any additional payments at that time because of his claimed financial distress." After further correspondence from the Bar and a formal complaint, he made a payment in full satisfaction of the obligation.
Klayman accepted the reprimand, which was reported to the District of Columbia Bar. Consistent with present D.C. procedure, the Florida reprimand is available for review on the D.C. Bar's web page but not otherwise pursued as reciprocal discipline.
The Florida reprimand may be accessed at this link by entering the name of the attorney. (Mike Frisch)
Improper Delegation Leads To Suspension
The Indiana Supreme Court has suspended an attorney for at least one year without automatic reinstatement.
The attorney had a bankruptcy practice. His secretary "routinely prepared and signed his name to petitions and other papers filed in the cases, even though the bankruptcy rules require an attorney of record to make certain certifications about the filings and to sign pleadings, motions, and most other documents presented to the court."
The secretary filed a case in the Northern rather than Southern District court and then filed and signed a motion to dismiss the case. A hearing was set and the attorney failed to appear. He was held in contempt, fined and prohibited from future Northern District filings until he petitioned for reinstatement. He filed ten more cases on the day after the contempt order and drew a second show cause order.
He was eventually reinstated by the bankruptcy court.
The sanction here was based on consent of the attorney and the Disciplinary Commission. (Mike Frisch)