Legal Profession Blog

Gambling On Malpractice

The New Jersey Appellate Division reversed the grant of summary judgment to a defendant attorney in a legal malpractice case.

One plaintiff is a former police officer who claimed that the defendant's incorrect legal advice led to his conviction for third degree promotion of gambling. The other plaintiff is married to the co-plaintiff and was the legal owner of the gambling enterprise.

The court

...a rational jury in this case could find that defendant's role as legal advisor was a substantial factor that led plaintiffs to engage in criminal conduct.

The conviction of one of the plaintiffs was held to be no bar to the legal malpractice claim. Notably, all of the criminal conduct took place after the attorney was retained as legal advisor.

The court affirmed the dismissal of emotional stress claims.

The conduct of the plaintiffs involved a poker tournament. (Mike Frisch) 

If I Had A Million Dollars...

The New York Appellate Division for the First Judicial Department reversed an order dismissing a case brought against an attorney who received a million dollar gift from his client shortly before the client died:

Defendant served as decedent's attorney on personal and corporate matters for more than 40 years and thus held a fiduciary relationship with decedent. Defendant therefore had the burden of proving by clear evidence that there was no fraud or undue influence in connection with decedent's gift of $1million, made weeks before his death at the age of 82, and deposited in a trust account held jointly by decedent and defendant, clearly for defendant's benefit.

Surrogate's Court erred in dismissing the claim of undue influence as there were conflicting inferences of both undue influence and the lack thereof. For example, the evidence showed that, from September 2009 to January 2010, as decedent's health continued to deteriorate, defendant repeatedly wrote and called decedent to request the creation of a $1 million trust account and suggested that he would suffer a financial crisis if he did not receive it, and decedent complained to plaintiff (his wife) that defendant would not stop asking him for money. While such evidence allowed for an inference of undue influence, the evidence presented by defendant suggested that decedent on occasion expressed a desire to compensate defendant for legal services defendant had performed and might perform for decedent's company after his death, by the creation of this account. Under the circumstances presented, defendant failed to overcome the presumption of undue influence and failed to eliminate any triable issue of fact warranting dismissal of the count.

Surrogate's Court further erred in concluding that decedent had the benefit of consulting with independent counsel regarding the $1 million gift. Decedent's estate planning counsel were introduced to him by defendant to advise decedent regarding his will. Counsel, who were not truly independent, further averred that they did not advise decedent regarding the $1 million gift and instead told him to contact his financial advisor should he wish to proceed. When decedent terminated the representation and obtained other independent counsel, it was solely for purposes of revising his will, and there was no evidence to suggest that he consulted with them regarding the $1 million gift. Thus, there was no meaningful consultation with independent counsel that would support a finding that decedent was not unduly influenced by defendant.

The count of constructive fraud was also improperly dismissed. Defendant, who had a substantial net worth at the time of decedent's death, nevertheless repeatedly represented that his savings were suffer a financial crisis if decedent did not give him the $1 million. While decedent was aware of the salary paid to defendant over the years as counsel to decedent's company, this alone did not amount to clear evidence to eliminate any triable issue of fact as to whether defendant had misrepresented his financial condition, and whether decedent relied upon it. (citations omitted)

(Mike Frisch)

Texting Prospective Clients OK In Ohio

CNO has this report of a recent Ohio ethics opinion:

Ohio lawyers can text prospective clients if they comply  with applicable rules and abide by restrictions, according to an Ohio Supreme  Court Board of Commissioners on Grievances & Discipline advisory opinion.

Opinion  2013-2 notes that Prof.Cond.R. 7.2, which governs lawyer advertising,  allows text message advertising but “all lawyer advertising, including text  message advertising, must comply with Prof.Cond.R. 7.1 and 7.3.”

The opinion’s ethical guidance examines the implications of  text message advertising in light of these rules.

Under Rule 7.1, “the text message may not contain a false,  misleading, or nonverifiable communication about the lawyer or the lawyer’s  service.”

The opinion cites additional requirements under Rule 7.3.  The text cannot create a “real-time” interaction or involve coercion, duress,  or harassment. The lawyer must state how he or she learned of the prospective  client’s need for legal services. A lawyer must verify that a prospective  client who’s a defendant in a civil case has been served. Texts sent within 30  days of an accident or disaster must include the “Understanding Your Rights”  statement in the body of the text and not as a link, attachment, or photograph.

In addition to the requirements under the rules, the opinion  also identified three practical considerations.

• “First, the text message should not create a  cost to the prospective client.”
• “Second, the lawyer should be mindful of the age  of the recipient of the text message.”
• “Finally, lawyers must use due diligence to  ensure that any text message advertisement or solicitation complies with the  applicable federal and state telemarketing laws.”

(Mike Frisch)

As Near As Possible

The Utah Supreme Court has considered whether an attorney-client relationship betwen the United Effort Plan Trust ("UEP") and a law firm continued after the trust was reformed cy pres.

The trust was created in 1942 and reformed in 2005. The district court used the doctrine of cy pres to reform the trust to fulfill its purpose to "provide for the wants and needs of FLDS Church members."

The court held that the UEP and the reformed trust are not the same client. As there was no attorney-client relationship between the law firm and the reformed trust, the district court erred in disqualifying the law firm in the litigation and ordering the firm to disgorge privileged information to the reformed trust.

Chief Justice Durrant concurred and dissented in part.

The Chief Justice would hold that the district court did not abuse its discretion in ordering the law firm to turn over privileged information and disqualifying the law firm:

The reformed trust is the same trust [the law firm] previously represented. As a result, the district court did not abuse its discretion when it disqualified [them] and ordered disclosure of privileged communications. But even under the court's legal fiction that the two trust are distinct for the narrow purpose of deciding matters of attorney-client relations, I believe that the special fiduciary remains the best person to assert privileges on behalf of a hypothetically nonexistent trust and that this case is too full of potential nascent conflicts to hold that the district court's order was an abuse of discertion.

 (Mike Frisch)

Not Yet

An attorney represented an organization in defense of several employment matters from 2002-2004. The relationship ended when the client sued the attorney for malpractice.

The organization moved for disqualification in a pending case in which the attorney represented a plaintiff suing it in an employment matter. The trial court denied a motion to disqualify.

The South Carolina Supreme Court held that interlocutory appeal of the denial is not an available remedy. The issue can be addressed on appeal of the judgment. (Mike Frisch)

Fee In Land Not Simple Or Proper

An Alaskan Native corporation entered into a fee agreement with a law firm in connection with litigation over "its certification of and title to certain lands" under the Native Claims Settlement Act.

The contingent fee agreement gave the law firm an interest in the lands at issue.

After the client had prevailed, a bar arbitration panel found that the firm could not take the land, but was entitled to a fee payment equal to the land's value. A 1995 court judgment enforced the arbitration award. The client paid the law firm for several years.

The client eventually was unable to continue the payments and litigation ensued.

The Alaska Supreme Court held that the contingency agreement violated provisions of the Act and that the arbitration award was improper. The court noted tht the case presented "complex" issues as to whether the 1995 judgment was void or voidable.

The court ordered the law firm to return $643,760 in paid fees.

The firm may now establish its entitlement for fees under quantum meruit. (Mike Frisch)

Confidentiality Issues When Former Client Claims Ineffective Assistance

A recently issued opinion of the District of Columbia Bar's Legal Ethics Committee deals with the issue of confidentiality when a former client claims ineffective assistance of counsel:

When a former client challenges a criminal conviction or sentence on the grounds of ineffective assistance of counsel (“IAC”), D.C. Rule 1.6(e)(3) permits the lawyer to disclose client confidences and secrets only insofar as reasonably necessary to respond to the client’s specific allegations about the lawyer’s representation. Where appropriate, the lawyer should take steps, such as seeking a judicial protective order or entering into an agreement with the prosecutor, to limit the use of such disclosures to the IAC proceeding.

The committee's conclusion:

D.C. Rule 1.6(e)(3) permits a defense lawyer whose conduct has been placed in issue by a former client’s ineffective assistance of counsel claim to make, without judicial approval or supervision, such disclosures of information protected by Rule 1.6 as are reasonably necessary to respond to the client’s specific allegations about the lawyer’s performance. Even so, a lawyer should reflect before making disclosures of protected information to prosecutors, courts, or others. A lawyer’s confidentiality obligations to her former client are broader than the attorney-client privilege. Although the former client’s claim likely waives the evidentiary privilege, that alone does not eliminate the broader confidentiality obligation owed under Rule 1.6. Nor does the limited “self-defense” exception to confidentiality in Rule 1.6(e)(3) open the door to unlimited disclosures to prosecutors, courts or others of protected information. The rule allows a lawyer to disclose protected information only to the extent “reasonably necessary” to respond to “specific allegations” by the former client. Reasonableness is a fact-bound issue about which others may later disagree. Lawyers who are uncertain about the permissibility of disclosing protected information in response to an IAC claim should consider seeking independent advice or judicial approval of the disclosure.

(Mike Frisch)

Probation Revocation Ineffective Assistance Claim Remanded

The Kansas Supreme Court has held that a defendant in a probation revocation proceeding is entitled to the effective assistance of counsel.

The case involved allegations of a conflict in interest. The attorney who represented the defendant also served as the victim's guardian ad litem. He briefly noted the conflict in a proffer to the probation revocation court. No objections were lodged and the court did not conduct any inquiry.

The court here remanded for either a fresh revocation hearing with conflict-free counsel or a hearing into whether the conflict created an adverse effect on the representation. (MIke Frisch)

The Trouble With Tribble

The Vermont Supreme Court reversed the conviction of defendant Dennis Tribble, who had admittedly shot his neighbor to death.

The court concluded that the defendant's right to confrontation was violated by allowing a videotape of the testimony of a key prosecution witness to be played for the jury.  The witness was out of the country but willing to return. The error was not harmless.

Counsel did not object to the videotape, but the client did.

The court also addressed a disagreement between client and counsel over trial strategy and concluded that the client's wishes must prevail:

...we conclude that defendant here—having been found competent to assist in his own defense—retained final authority over the decision to present a diminished capacity case.  Plainly, as other courts have recognized, the fundamental right to maintain a plea of complete innocence would be impaired, if not eviscerated, if counsel were allowed, over defendant’s objection, to assert a defense seeking a less serious conviction.  Indeed, as the parties here clearly understood, evidence of defendant’s delusional disorder directly undermined the self-defense theory that defendant preferred by discrediting the claim that his perception of the threat was a reasonable one.  The basic right to contend for outright acquittal that bars defense counsel from overriding a defendant’s objection to instructing the jury as to lesser-included offenses applies with equal force to preclude the assertion of a theory, such as diminished capacity, that supports conviction on a lesser-included charge contrary to a defendant’s express wishes.  Moreover, like insanity, a defense of diminished capacity based on mental impairment is a highly personal and potentially stigmatizing one, and should remain the prerogative of an otherwise competent defendant in the final analysis.  Accordingly, we conclude that the trial court here erred in authorizing defense counsel to assert the defense contrary to defendant’s wishes.    

(Mike Frisch)  

Loyalty Trumps Mobility In New Mexico Decision

In a case of first impression, the New Mexico Supreme Court has held that disqualification is mandatory when an associate who played a 'substantial role" in litigation and possesses confidential information moves to a firm involved in the litigation against her former client.

Both the moving associate and her new firm are barred from further representation.

The court noted that it had adopted a more restricted version of Rule 1.11than the ABA Model Rule, and that its rule does not permit screening to prevent imputed disqualification.

While the rule may have a chilling consequence for lawyer mobility, the court emphasized that the public policy considerations that underpin the loyalty to clients justifies the result:

In the practice of law, there is no higher duty than one's loyalty to a client.

(Mike Frisch)

Ethics Opinion On Confidentiality And In-House Counsel Claims Against Employer

A recently-issued opinion of the District of Columbia Bar Legal Ethics Committee concludes:

An in–house lawyer may not disclose or use her employer/client’s confidences or secrets in support of the lawyer’s claim against the employer/client for employment discrimination or retaliatory discharge unless expressly authorized by Rule 1.6. If the employer/client puts the lawyer’s conduct in issue, however (e.g., by lodging an affirmative defense or a counterclaim), the lawyer may disclose or use the employer’s confidences or secrets insofar as reasonably
necessary to respond to the employer/client’s contention. An in–house lawyer is not prohibited from bringing such a claim against her employer/client merely because the employer/client may find it necessary or helpful to disclose its confidences or secrets in defending against the lawyer’s claim.

(Mike Frisch)

A Few Phone Calls Do Not Establish Continuous Representation

The "continuous representation doctrine did not save a claim of legal malpractice from dismissal on statute of limitations grounds, according to a recent decision of the New York Appellate Division of the First Judicial Department:

Defendants made out a prima facie showing that the three-year statutory limitations period (CPLR 214[6]) expired before this legal malpractice action was commenced in July 2010. Plaintiffs failed to raise an issue of fact whether the doctrine of continuous representation applied here to toll the limitations period. The only evidence plaintiffs submitted on this issue was an affidavit by the husband of one of the plaintiffs, not a party to plaintiffs' retainer agreement with defendants, stating that he spoke to the individual defendant four times between January and May 2007. Even assuming the husband had the authority to speak for plaintiffs, the intermittent telephone contact between himself and defendants does not constitute "clear indicia of an ongoing, developing and dependent relationship between the client and the attorney" or of "a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim" (citations omitted)

The dismissal of a related breach of fiduciary duty claim was also affirmed. (Mike Frisch)

No Lien On Me

The New York Appellate Division for the First Judicial Department has held that a trial court improperly granted a charging lien to a law firm as a result of the former client's settlement of a damages claim by other counsel:

The Laskin firm cannot have a charging lien on the settlement proceeds in the Ascot action where it never commenced an action against Ascot and thus was never attorney of record for the Papaioannous in the Ascot action, but instead commenced an action against other parties, months after the Ascot action was filed and settled. Rather, the remedy available to the Laskin firm is a plenary action.

(Mike Frisch)

A Lien Not A Judgment

In a matter involving a law firm's efforts as a third party to secure payment of fees, the New York Appellate Division for the First Judicial Department held that the firm had not established a basis to award a money judgment:

The law firm was not entitled to entry of a money judgment. Although the amount of a charging lien may be determined and fixed before the outcome of the case, the charging lien does not provide for an immediately enforceable judgment against all assets of the former clients. Rather, the lien is security against a single asset of the client - a judgment or settlement reached in favor of the former client in the underlying matter. Since the record here does not show that there has been a final judgment in this action, the law firm's request for a money judgment was properly denied. Should the law firm wish to obtain a judgment enforceable against plaintiff's other assets, it can bring a separate plenary action. (citations omitted)

(Mike Frisch)

Attorney May Appeal Denied Motion To Withdraw As Counsel

The Maryland Court of Special Appeals has held that an attorney may appeal an interlocatory order denying his motion to withdraw as counsel. The court held that the denial of the motion was an abuse of discretion and remanded the case to the Circuit Court with instructions to grant the attorney's motion.

The case involved unpaid legal fees and a motion filed five weeks before a scheduled trial.

The court here held that there was no injustice to the client; rather, denying the motion was an injustice to the attorney:

...the circuit court's order, effectively compelling [the attorney] to continue representing [the client], without reasonable likelihood of compensation, imposed an unreasonable financial burden on him.

(Mike Frisch)

Son May Represent Father In Divorce Against His Mother

The Nevada Supreme Court has held that the son of a divorcing couple is not disqualified from representing his father in the litigation:

This original petition for a writ of mandamus raises two novel issues regarding attorney disqualification: should an attorney who represents one of his parents in a divorce action between both parents be disqualified either (1) because the attorney’s representation will constitute an appearance of impropriety or (2) because representing the parent will violate the concurrent-conflict-of-interest rule in Nevada Rule of Professional Conduct (RPC) 1.7?  Because appearance of impropriety is no longer recognized by the American Bar Association, and we have not recognized the appearance of impropriety as a basis for disqualifying counsel except in the limited circumstance of a public lawyer, we reject that conclusion when the alleged impropriety is based solely on a familial relationship with the attorney.  We also conclude that absent an ethical breach by the attorney that affects the fairness of the entire litigation or a proven confidential relationship between the nonclient parent and the attorney, the nonclient parent lacks standing to seek disqualification under RPC 1.7.

The court reversed the trial court, which had disqualified the son.

The Las Vegas Review-Journal noted that the representation might be contrary to common sense, if not legal ethics. (Mike Frisch)

Don't Knock The Block (Billing)

An award of fees to an attorney who sued his client in a matrimonial case was affirmed by the New York Appellate Division for the First Judicial Department:

"Where there has been substantial compliance' with the matrimonial rules, an attorney will be allowed to recover the fees owed for services rendered, but not yet paid for" (Edelman v Poster, 72 AD3d 182, 184 [2010], quoting Flanagan v Flanagan, 267 AD2d 80, 81 [1999]). The applicable rule, 22 NYCRR 1400.3, mandates that an attorney in a matrimonial matter file a copy of the signed retainer agreement with the court, along with the statement of net worth. Here, the record shows that a copy of the executed retainer was filed with the court on May 14, 2004, along with the updated statement of net worth. Even if plaintiff, as substituted counsel, should have filed the retainer within 10 days of its execution, he substantially complied with the requirements by filing the executed copy with the updated statement of net worth. Although it would have been better practice for plaintiff to have put proof of the filing in evidence on his direct case, his failure to do so does not change the fact that he substantially complied with the rule (see Kurtz v Kurtz, 1 AD3d 214, 215 [2003]).

Defendant also argues that plaintiff's billing practices and willful spoliation of evidence should result in sanctions, and dismissal of his claims. Specifically, defendant argues that block billing was improper and that "task billing," which lists the time for each separate task and is an enhanced level of billing, should have been used. However, block billing is common practice among law firms and neither 22 NYCRR 1400.3 nor the retainer agreement calls for task based billing. Regarding the spoliation of evidence allegation, defendant contends that plaintiff intentionally destroyed a particular attorney's individual time sheets, thereby preventing her from using those records to impeach plaintiff. Plaintiff testified at trial that the information from that attorney's individual time sheets was entered into the firm's time entry system, then reviewed by him and incorporated into the firm's bills to defendant. In any event, the time sheets were not key evidence, and thus their alleged destruction did not deprive defendant of the ability to defend against plaintiff's claim for fees(Coleman v Putman Hops. Center, 74 AD3d 1009 [2010], lv dismissed 16 NY3d 884 [2011]). Accordingly, a spoliation sanction is not warranted.

(Mike Frisch)

Bankruptcy Non-Disclosure Bars Malpractice Claim

The New York Appellate Division for the Second Judicial Department has affirmed the dismissal of a legal malpractice counterclaim under the following circumstances:

... it is undisputed that the defendant did not disclose, in a bankruptcy petition
that he filed in September 2007, the existence of the causes of action he now
asserts as counterclaims. The plaintiff showed, prima facie, that at the time of
the filing of that petition the defendant knew or should have known of the
existence of those causes of action, and the defendant failed to raise a triable
issue of fact in opposition to that prima facie showing. Further, under the
circumstances of this case, the fact that the defendant's bankruptcy petition
was later dismissed does not change this result. Moreover, although the defendant stated in his opposition to the plaintiff's motion that, in 2010, he filed a second bankruptcy
petition in which he did disclose his malpractice cause of action, in support of
that claim he submitted only a single page of the Schedule of Assets from that
petition. He also submitted no evidence as to the ultimate disposition of the
second bankruptcy petition. He therefore failed to raise a triable issue of fact
as to whether he regained his capacity to assert his legal malpractice claims
against the plaintiff by filing the second bankruptcy petition. (citations omitted)

(Mike Frisch)

Retainer Agreement Sufficiently Clear

The New York Appellate Division for the First Judicial Department has affirmed a arbitrator's decision interpreting a retainer agreement in favor of a law firm:

In this proceeding alleging the law firm's breach of performance of a
retainer agreement, including breach of an alleged oral agreement to have a
particular attorney in its firm serve as lead counsel in an underlying matter,
the client failed to preserve its arguments that the law firm did not meet its
burden of demonstrating that the client fully understood the terms of the
parties' retainer agreement, and that public policy rendered such retainer
agreement unenforceable, as these arguments were not sufficiently brought to the
attention of the arbitrator. The client did not explicitly argue that the law firm
violated public policy by failing to ensure that the client fully understood the
terms of the parties' retainer agreement. It only argued that parol evidence was
needed because the retainer agreement, as written, was allegedly incomplete
and/or ambiguous.

Were we to reach the merits of the client's public policy argument, we would
find it unavailing. The parties agreed to arbitrate any disputes arising from
their retainer agreement, and there is no basis to conclude that the asserted
public policy ground (requiring a client's full knowledge and understanding of
an attorney-client retainer agreement) was violated. The arbitrator's award
dismissing the client's challenge to the legal fees that were due in accordance
with the express terms of the parties' amended written retainer agreement had a
rational basis, inasmuch as the Arbitrator found the written retainer arrangement to be unambiguous and to constitute a fully integrated agreement that would satisfy the requirements of 22 NYCRR 1215.1 The arbitrator's rejection of the sophisticated client's argument that sought inclusion of claimed oral terms that would modify the clear terms of the amended retainer agreement was rationally based in contract principles, including New York's parol evidence rule, and the criteria for allowing modification of written terms without altering them was not established by the client. Since the terms of the fully integrated retainer agreement were unambiguous, there was no basis to consider parol evidence.

Moreover, the client's argument that the arbitrator, in deciding the
dismissal motion, denied it "fundamental fairness" by refusing to accept the
truth of its allegations regarding the oral promise, including that the parties
intended this oral promise to be a component of the parties' retainer agreement,
thereby precluding it from offering evidence to demonstrate the parties'
understanding in regard to the alleged oral promise, is unavailing. It was
within the province of the arbitrator to find, as a matter of law, that the
retainer agreement was not ambiguous, notwithstanding the client's claims that alleged oral promises were intended to be added as components of the written retainer agreement. Since an arbitrator's award ordinarily will not be vacated even if founded upon errors of law and/or fact, there is no basis to vacate this award founded upon applicable contract principles.

Furthermore, the arbitrator appropriately rejected the client's attempt to
modify the clear terms of the parties' fully integrated retainer agreement.
There was no basis to conclude that the alleged oral agreements were merely
collateral to the retainer agreement (as amended), that they did not tend to
contradict the terms of the retainer, and that the oral modifications would
otherwise ordinarily be omitted from a writing. (citations omitted)

(Mike Frisch)

The Ultimate Issue

A plaintiff's verdict in a legal malpractice case has been reversed by the Georgia Supreme Court.

The court found error in the admission of expert testimony on causation:

...the second jury in a malpractice action is not deciding what the first jury would have done in the underlying case had the attorney not been negligent, but only what a reasonable jury would have done had the underlying case been tried without the attorney negligence alleged by the plaintiff. The second jury does this by independently evaluating the evidence in the underlying case as it should have been presented to determine whether it belives that the plaintiff has a winning case, not by deciding whether some prior jury may or may not have believed that the plaintiff had a winning case...the Court of Appeals was incorrect in its conclusion that the jury in a malpractice case was tasked with deciding an issue that could not be resolved by the average lay person. Because the jury in the malpractice case  was not being asked to decide what a prior jury would have done, it was merely being asked to do what any jury in a discrimination lawsuit would do, which is, evaluate the evidence in the case and decide the case on the merits. This is a task solely for the jury, and that is not properly the subject of expert testimony.

The inadmissible testimony on the ultimate issue resulted in reversal of the judgment. (Mike Frisch)