Friday, February 17, 2017

No Lien On Property Not Owned By Former Client

The North Dakota Supreme Court rejected the assertion of an attorneys' lien because the former client had no interest in the subject real property.

DeWayne Johnston, individually, and as registered agent of Johnston Law Office, P.C., appeals from a judgment invalidating a notice of attorney lien recorded against Johnston's former client and ordering Johnston Law Office and Johnston, individually, to pay $1,330 in costs and attorney fees. We modify the judgment to relieve Johnston of personal liability and affirm the judgment as modified.

Wayne and Janel Nusviken acquired real property from Johnston's former client Barbara McDermott on October 2, 2013. On October 8, 2013, Johnston recorded a "notice of attorney lien" against McDermott. The notice of attorney lien included the legal description of Nusviken's property and stated McDermott owed Johnston nearly $66,000 in attorney's fees relating to Johnston's representation of McDermott in earlier matters unrelated to the sale of the property.

The Nusvikens petitioned the district court to invalidate the notice of attorney lien, arguing McDermott no longer owned any interest in the property. The court issued an order to show cause directing Johnston to appear and show why the notice of attorney lien should not be declared void. At the hearing, Johnston argued the notice of attorney lien was not a nonconsensual common-law lien but a valid attorney's lien under N.D.C.C. § 35-20-08, and therefore, the court did not have jurisdiction to invalidate the lien. In response Nusviken's attorney stated the notice of attorney lien was invalid because McDermott no longer had an interest in the property and no attorney-client relationship existed between Johnston and the Nusvikens. The court concluded the purported lien was a nonconsensual common-law lien and not a valid attorney's lien because it failed to satisfy the statutory requirements for an attorney's lien under N.D.C.C. § 35-20-08. The court invalidated the lien and ordered the Johnston Law Office and Johnston, individually, to pay the Nusvikens $1,330 in costs and attorney's fees.

No lien on thee

We agree with the district court's analysis. The notice of attorney lien recorded by Johnston against McDermott referenced two cases in which Johnston represented McDermott. Johnston did not submit any evidence indicating a judgment was awarded in favor of McDermott or that she was due any money in those cases. McDermott no longer had an interest in the real property when Johnston recorded the notice of attorney lien, nor did Johnston represent McDermott in the land sale to the Nusvikens. Johnston appears to argue it had a valid attorney's lien simply because the document is titled "notice of attorney's lien." As the district court noted, however, the document on its face failed to meet the requirements of N.D.C.C. § 35-20-08. The district court did not err by invalidating Johnston's "notice of attorney lien."

Johnston argues the district court lacked jurisdiction because under N.D.C.C. § 35-35-05(1) only those who have property subject to nonconsensual common-law lien may petition the court to invalidate the lien. Johnston also argues that before entering the order to show cause the court was required to make a finding that the Nusvikens were subject to a nonconsensual common-law lien...

Here, there was no attorney-client relationship between Johnston and the Nusvikens. We decline to extend Amundson to an attorney's improper or unethical actions toward parties who are not clients. We therefore modify the judgment to relieve DeWayne Johnston of personal liability.

(Mike Frisch)

February 17, 2017 in Billable Hours, Clients | Permalink | Comments (0)

More Than Unhappiness Needed To Establish Legal Malpractice

The Delaware Superior Court affirmed the dismissal of a legal malpractice claim involving the representation of the plaintiff in a personal injury action.

Appellant engaged Appellee to represent her in a personal injury lawsuit. Initially, Appellee, representing Appellant, made a demand on the defendant in that lawsuit for $20,000. The defendant in that action refused to pay the $20,000, and Appellee then filed a personal injury action alleging $20,000 in damages. The Appellant then engaged in mediation with the defendant in that lawsuit, represented by Appellee. The mediation resulted in Appellant accepting a settlement offer for less than the full $20,000 claimed. Appellant received and subsequently cashed the settlement check.

Unhappy with Appellee’s representation of her, Appellant filed a complaint with the Office of Disciplinary Counsel (“ODC”). In her complaint to the ODC, Appellant claimed that Appellee tricked her into signing the settlement agreement. The ODC reviewed the complaint and Appellee’s response to the complaint and determined that Appellee’s representation of Appellant did not fall below the acceptable level of representation.

Appellant then filed a legal malpractice action with the Court of Common Pleas. In that action, Appellant alleged that “[she] was promised to be fully compensated with all medical bills paid, . . . and was encouraged to sign paperwork of legal documentation without any clarity of what [she] was signing.”1 Appellee then filed a Motion to Dismiss pursuant to Court of Common Pleas Civil Rule 12(b)(6) on grounds that Appellant had not sufficiently made a claim for legal malpractice.

The Court of Common Pleas held argument on Appellee’s Motion to Dismiss on April 29, 2016. The Court of Common Pleas issued on oral ruling granting Appellee’s motion to dismiss.

The malpractice claim failed

It appears from the record that the trial court’s factual findings are the result of a logical and deductive reasoning process. The trial court found that Appellee put forth his best efforts in representing Appellant in her personal injury action. Appellant was able to obtain a settlement offer to which Appellant ultimately agreed. Although Appellant may now be unhappy with the settlement agreement into which she entered, that does not create a colorable claim for legal malpractice against the attorney who represented her. Additionally, it is noteworthy that the ODC, upon investigating Appellant’s claim of legal malpractice, found that Appellee committed no malpractice. Accordingly, as Appellant has failed to set forth any reason that Appellee neglected his professional obligation owed to her, her general claim that the trial court committed reversible error is without merit.

(Mike Frisch)

February 17, 2017 in Bar Discipline & Process, Clients | Permalink | Comments (0)

Tuesday, January 31, 2017

Right To Fee Vindicated

A law firm that had secured a judgment in excess of $28 million and sought fees from a guardianship trust  won a significant victory in the Florida Supreme Court.

This case arose after the birth of Aaron Edwards, during which he sustained a catastrophic brain injury as a result of the negligence of employees at Lee Memorial Health System (Lee Memorial) in 1997. The law firm of Searcy Denney Scarola Barnhart & Shipley, P.A. (Searcy Denney) was retained by the family to seek compensation under a standard contingency fee agreement providing for a payment of 40 percent of any recovery if a lawsuit was filed, plus costs. The agreement also stated that “[i]n the event that one of the parties to pay my claim for damages is a governmental agency, I understand that Federal and Florida Law may limit the amount of attorney fees charged by [Searcy Denney], and in that event, I understand that the fees owed to [Searcy Denney] shall be the amount provided by law.”

Collection was limited by sovereign immunity but 

Searcy Denney and various other firms were involved in litigation of the medical malpractice suit, the first appeal, and a subsequent two-year lobbying effort to secure a claims bill from the Legislature on behalf of the injured child and his parents.  Because the waiver of sovereign immunity in section 768.28 limited the family’s recovery to only $200,000 of the $28.3 million judgment, a claims bill for the excess judgment amount was filed in the Florida Legislature in 2011, but was not passed during that legislative session. However, in 2012 the Legislature passed a claims bill, chapter 2012-249, Laws of Florida, directing Lee Memorial to pay $10 million, with an additional $5 million to be paid in annual installments of $1 million each to “the Guardianship of Aaron Edwards, to be placed in a special needs trust created for the exclusive use and benefit of Aaron Edwards, a minor.” Ch. 2012-249, § 2, Laws of Fla. The claims bill further stated that payment of fees and costs from funds awarded in the claims bill shall not exceed $100,000. No funds were awarded in the claims bill for the parents. In November 2012, the child’s mother petitioned to establish a guardianship over the minor son’s property, and Lee Memorial subsequently made its first payment of $10 million.

Searcy Denney, with the full support of the family, then petitioned the guardianship court to approve a closing statement allowing $2.5 million for attorneys’ fees and costs. This requested amount was based on the contract that existed with the Edwards family, as limited by the provisions of section 768.28(8), Florida Statutes. Section 768.28(8), a provision of the limited waiver of sovereign immunity statute, states in pertinent part, “No attorney may charge, demand, receive, or collect, for services rendered, fees in excess of 25 percent of any judgment or settlement.”

The court

The right to contract for legal services in order to petition for redress is a right that is related to the First Amendment, and any impairment of that right not only adversely affects the right of the lawyer to receive his fee but the right of the party to obtain, by contract, competent legal representation to ensure meaningful access to courts to petition for redress...

This same constitutional right extends to a party’s right and practical ability to retain an attorney by contingency fee contract in order to have meaningful access to courts. The “draconian limitation” on the fees in this case, in contravention of the preexisting contract and the provisions of section 768.28, sets an unfortunate precedent that, if allowed to stand, would effectively chill the right of future litigants to obtain effective counsel to make their case for compensation due for injuries caused by the State or its agencies and subdivisions.

...we conclude that the $100,000 fee limitation contained in the claims bill impermissibly impairs the preexisting contract between Searcy Denney and the Edwards family, and that nothing has been presented to justify this violation of the family’s constitutional right to contract with legal counsel to seek full redress of injury, as well as Searcy Denney’s contract right to receive the agreed-upon fees. This is especially true where, as here, the services producing the judgment and claims bill, and the fee amount sought under the contract, are in accord with sections 768.28(5) and (8). The Legislature has expressly provided for both the claims bill mechanism and for fees payable from the judgments obtained under the limited waiver of sovereign immunity statute. We conclude the permissible fees based upon recovery of those funds include funds recovered pursuant to the claims bill process. 

...we conclude there is no impediment to the law firms seeking contractual attorneys’ fees and costs in this case pursuant to the preexisting contract up to and including the amount previously sought—an amount that the Edwards family has urged the courts to award—based on the limitation contained in section 768.28(8), which is 25 percent of the initial $10 million payment made pursuant to the claims bill enactment.

There were dissents

CANADY, J., dissenting. I dissent from the majority’s decision regarding both the certified question and the issue of severability.

POLSTON, J., dissenting. I would answer the certified question in the affirmative. The Florida law limiting the amount of attorneys’ fees does not unconstitutionally impair a preexisting contract that expressly contemplates and accepts that Florida law may limit the amount of attorneys’ fees.

(Mike Frisch)

January 31, 2017 in Clients | Permalink | Comments (0)

Thursday, January 26, 2017

Not Patently Unreasonable

The dismissal of a legal malpractice claim against Alston & Bird was affirmed by the New York Appellate Division for the First Judicial Department

A focal point of this appeal is Brookwood's claim that A & B, in the patent action, negligently litigated defenses that were available to Brookwood pursuant to 28 USC § 1498. 28 USC § 1498 provides that when a patent is infringed for the benefit of the United States government, the patent holder's remedy is against the United States in the United States Court of Federal Claims. Brookwood alleges that had A & B not been negligent, the motions that A & B eventually brought based on 28 USC § 1498 would have been granted and Brookwood would have avoided the approximately $10 million it expended on defending itself at trial and on appeal. Important in this analysis is the fact that Brookwood ultimately prevailed in the underlying patent action, achieving a judgment of noninfringement. The theory of Brookwood's malpractice case is not that but for A & B's negligence it would have prevailed in the patent action; rather Brookwood's claim is that but for the manner in which A & B interposed the defenses available to Brookwood under 28 USC § 1498, Brookwood would have prevailed without incurring the additional legal fees it expended. In other words, but for A & B's negligence, Brookwood could have achieved the same result more expeditiously and economically. The Supreme Court granted A & B's motion and dismissed the complaint in its entirety, holding, among other things, that the allegations did not support a finding of attorney negligence or of proximate cause. We now affirm.

Second-guessing the strategy of counsel was an insufficient basis for a malpractice claim

Decisions regarding the evidentiary support for a motion or the legal theory of a case are commonly strategic decisions and a client's disagreement with its attorney's strategy does not support a malpractice claim, even if the strategy had its flaws. "[A]n attorney is not held to the rule of infallibility and is not liable for an honest mistake of judgment where the proper course is open to reasonable doubt" (Bernstein v Oppenheim & Co., 160 AD2d 428, 430 [1st Dept 1990]). Moreover, an attorney's selection of one among several reasonable courses of action does not constitute malpractice (see Rosner v Paley, 65 NY2d 736, 738 [1985]; Rodriguez v Lipsig, Shapey, Manus & Moverman, P.C., 81 AD3d 551, 552 [1st Dept 2011]). Brookwood has not alleged facts supporting its claim that A & B's evidentiary decision, to rely on Nextec's expert, rather than compromise the merits of Brookwood's position on other arguments, was an unreasonable course of action.

Other hindsight arguments concerning the nature and quality of the evidence supporting the second summary judgment motion in the patent action fare no better. There is no factual basis to conclude that the governmental email to Brookwood about the inclusion of a broad patent infringement indemnity clause would have changed the outcome of the motion because the clause never made its way into the government's contract with ADS. Nextec's attorney's letter stating that Brookwood necessarily infringed on Nextec's patents is hearsay. Not only was it apparently sent by the attorney after the underlying lawsuit had been commenced, it was not based upon any personal knowledge. Thus, Brookwood's negligence claim is wholly speculative and "depend[s] on too many uncertainties" to support a conclusion that there would have been a more favorable, that is quicker, outcome in the underlying litigation (Estate of Feder v Winne, Banta, Hetherington, Basralian & Kahn, P.C., 117 AD3d 541, 542 [1st Dept 2014]; Sherwood Group v Dornbush, Mensch, Mandelstam & Silverman, 191 AD2d 292, 294 [1st Dept 1993]). Having prevailed in the underlying patent action and having otherwise failed to plead negligence, Brookwood has also failed to show that its litigation expenditures were damages proximately caused by A & B's alleged negligence (see e.g. Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer., 8 NY3d 438, 443 [2007]).

(Mike Frisch)

January 26, 2017 in Clients | Permalink | Comments (0)

Legal Malpractice Claim Survives In Idaho

The Idaho Supreme Court has issued this recent decision in a legal malpractice case.

Some background

On September 19, 2005, Molen was charged with lewd conduct with a minor child, S.Z. Molen pleaded not guilty at his arraignment. On the morning of trial, Christian arrived at the courthouse under the influence of alcohol. His blood alcohol content was measured at .329 and .344. The trial was vacated. An amended information was filed on May 11, 2007, and the case proceeded to jury trial on June 18, 2007. 

Yes, the attorney showed up for trial with a blood alcohol content way north of legally intoxicated and just south of legally dead.

I might look for another lawyer right there. 

At the rescheduled trial

On June 22, 2007, the jury returned a guilty verdict. Molen moved for a new trial arguing that the disclosure of the photographs of the colposcopic examination was unfair. The district court denied Molen’s motion. On June 4, 2008, Molen was sentenced to twenty years consisting of eight years fixed and twelve years indeterminate. Molen appealed his conviction, but the conviction was affirmed by the Idaho Court of Appeals.

Post-conviction relief was secured in 2014

The district court’s grant of postconviction relief was premised on the conclusion that Molen’s trial counsel’s performance fell below an objective standard of reasonableness in: (1) failing to consult with and/or retain an expert in pediatric sexual abuse; (2) failing to discover the existence of the colposcopic photographs prior to trial; and (3) failing to request either a continuance of the trial or a mistrial so that the new evidence could be reviewed by an expert in pediatric sexual abuse. The district court vacated the judgment of conviction entered on January 7, 2008, granted Molen a new trial, and ordered the Idaho Department of Corrections to release Molen from custody. In a hearing on July 10, 2014, the district court granted the State’s motion to dismiss the case.

The former client filed his legal malpractice claim in February 2015.

The court summary

In a case arising out of Ada County, the Idaho Supreme Court vacated the district court’s summary judgment dismissal of a legal malpractice action brought against Ronald Christian (“Christian”). The malpractice action stemmed from Christian’s defense of criminal charges brought against Michael Scott Molen (“Molen”). The crux of Molen’s appeal was whether the statute of limitations on his malpractice cause of action had accrued at the time of his initial criminal conviction in 2007 or when he was later exonerated in 2014. In granting summary judgment in favor of Christian, a district court made two holdings: (1) Molen’s malpractice cause of action against Christian accrued at the time of Molen’s initial conviction, and (2) whether actual innocence is an element of a legal malpractice claim arising from a criminal conviction would only be an issue if the Idaho Supreme Court adopts the exoneration rule. Generally, the exoneration rule requires a convicted party to obtain direct or collateral relief on that conviction prior to filing suit against a criminal defense attorney for legal malpractice.

The Idaho Supreme Court held that Molen’s malpractice cause of action did not accrue until he was exonerated, which occurred on July 10, 2014. The Court explained that if the exoneration rule was not adopted, a convicted defendant would have to file two lawsuits simultaneously: (1) a malpractice claim, and (2) an appeal and/or post-conviction relief proceeding. The malpractice claim would serve as a protective lawsuit to prevent the claim from being later barred by the statute of limitations, and the appeal and/or post-conviction proceeding, if successful, would be the basis for the malpractice action. The Court held that such a result would be contrary to this Court’s holding in City of McCall v. Buxton, 146 Idaho 656, 663, 201 P.3d 629, 636 (2009). That is, the Idaho Supreme Court does not favor protective lawsuits that must be filed only to be stayed.

Additionally, the Court held that actual innocence is not an element of a criminal malpractice cause of action because: (1) requiring a plaintiff to prove actual innocence is contrary to the fundamental principal that a person is presumed innocent until proven guilty beyond a reasonable doubt; (2) a criminal defendant can be harmed separately from the harm he or she incurs as a result of being guilty of a crime; and (3) requiring actual innocence would essentially eliminate a defense attorney’s duty to provide competent counsel to a client he or she knows to be guilty. Christian’s request for attorney’s fees on appeal was denied because he was not the prevailing party. Costs on appeal were awarded to Molen.

(Mike Frisch)

January 26, 2017 in Clients | Permalink | Comments (0)

Monday, January 23, 2017

Discovery Of Work Done For Other Clients Permitted In Legal Malpractice Case

The Rhode Island Supreme Court decided a case where the court had granted review of the following question

“May a former client in a legal malpractice action against his former attorney properly compel discovery from his former attorney and law firm related to documents the attorney prepared for the attorney’s other clients in order to gain evidence to prove subsequent remedial measures in the legal malpractice action?”

The unhappy client sued and sought discovery

This case came before the Supreme Court on November 2, 2016, on certiorari from the Superior Court, seeking review of a discovery order entered on October 2, 2014, compelling production of any antenuptial or postnuptial agreements drafted, prepared, or negotiated by the defendant, Richard A. Boren (Attorney Boren), from 2005 through 2009 and in 2013, while he was employed at the defendant law firm, Visconti, Boren & Campbell, Ltd. (VBC), (collectively, defendants). Before this Court, the defendants contend that the documents sought exceed the scope of permissible discovery, as provided by Rule 26 of the Superior Court Rules of Civil Procedure, and are protected under the attorney-client privilege, the marital privilege, and the work product doctrine. For the reasons discussed herein, we affirm the discovery order in its entirety.

The story

In 2000, plaintiff, Sergio A. DeCurtis (plaintiff or DeCurtis), retained Attorney Boren to draft an antenuptial agreement. DeCurtis and his then-fiancée, Michelle Tondreault (Tondreault), executed the antenuptial agreement on March 22, 2000, and were married on March 28, 2000. They did not live happily ever after, and Tondreault filed for divorce in 2005.

The divorce petition was dismissed in a negotiated settlement that required DeCurtis and Tondreault to execute a postnuptial agreement. Attorney Boren drafted the postnuptial agreement for the couple, which was executed in November of 2005. The marriage nonetheless failed.

The plaintiff claims that the six antenuptial and postnuptial agreements drafted by Attorney Boren are discoverable under Rule 26(b)(1) because they are relevant to demonstrate if and when Attorney Boren undertook subsequent remedial measures in the drafting of antenuptial and postnuptial agreements. Unlike many other jurisdictions, subsequent remedial measures are admissible in Rhode Island to prove negligence “[w]hen, after an event, measures are taken which, if taken previously, would have made the event less likely to occur...

In the case before us, plaintiff initially retained Attorney Boren in 2000, and the antenuptial agreement between plaintiff and Tondreault was drafted in that same year. In 2005, Attorney Boren drafted a postnuptial agreement, which affirmed the terms stated in the prior agreement. The instant malpractice suit arises out of language that was included in both documents. As a result, we are of the opinion that the triggering “event” for purposes of Rule 407 is the drafting of the later document, the 2005 postnuptial agreement. Accordingly, any measures taken after 2005 would be relevant under Rule 407 and, therefore, discoverable under Rule 26(b)(1)

The attorney-client, work product and marital privileges did not prevent discovery

we are of the opinion that defendants do not have standing to assert the attorney-client privilege on behalf of their clients in this context. In this case, the documents are not confidential communications such that third parties were privy to the discussions surrounding the documents and their execution, thus vitiating the privilege. We conclude that the Superior Court justice amply placed safeguards on the order by requiring redaction and limiting the purpose for which the documents could be used. Adequate redaction will eliminate any sensitive or identifying information and prevent the disclosure of any confidential interests contained in the documents...

The defendants’ argument that the marital privilege applies in this context is unavailing. The parties to the six agreements are not testifying, and the production of executed contracts is not testimonial in any way. Furthermore, the parties were not married at the time the antenuptial agreements were executed. The marital privilege focuses on communications between a husband and wife, such that the communications must occur “during [the] marriage.”


In complying with this discovery order, the defendants are directed to adequately redact all confidential information and take any additional steps they deem reasonably necessary to ensure confidentiality, including contacting their clients should that be deemed necessary. To the extent that the clients wish to assert the attorney-client privilege, the Superior Court should welcome those motions and use our discussion herein as guidance in rendering a decision.

Finally, we anticipate that the trial justice will act as an additional gatekeeper and conduct an in camera review of the documents after adequate redaction by the defendants, in order to ensure that all confidential and identifying information has been removed.

The court thus affirmed the discovery order. (Mike Frisch)

January 23, 2017 in Clients, Current Affairs, Privilege | Permalink | Comments (0)

Saturday, January 7, 2017

Between Scylla And Charybdis

The United States District Court for the District of Maryland Southern Division (Judge Paul Grimm) disqualified an attorney and his firm for both a former client conflict and a material limitation in the representation of the current client.

Attorney Jonathan Rose represented CytImmune with respect to employee non-compete agreements and other matters while at Katten Muchin. Now at Alston & Bird, he undertook to represent a former employee in litigation adverse CytImmune.

In March 2016, CytImmune filed its complaint against Dr. Paciotti in the Circuit Court for Montgomery County. Dr. Paciotti’s out-of-state attorney retained Rose as local counsel to handle the case. Shortly thereafter, CytImmune notified Rose of its belief that he had a conflict of interest in the case. Rose consulted his firm’s general counsel, who concluded that no conflict existed. 

Dr. Paciotti then removed the case to this Court, Notice of Removal, where CytImmune filed the instant Motion to Disqualify. (record cites deleted)

The court

I am left with the impression that Rose’s inability to recall the precise details of his prior work for CytImmune placed him squarely between the Scylla of MLRPC 1.9 and the Charybdis of MLRPC 1.7. And if Odysseus could not navigate such treacherous waters, then, respectfully, neither can Rose. And the Rules forbid any such attempt. In light of the apparent constraints that I have observed Defense counsel struggle with, I am persuaded that Rose cannot continue to represent Dr. Paciotti without a significant risk of a materially limited defense. Accordingly, I find that Rose has a conflict of interest in representing Dr. Paciotti. Additionally, MLRPC 1.10(a) imputes Rose’s conflict to all of the attorneys at Alston. Waiver of the conflict is possible, but only with the informed consent of “each affected client.” MLRPC 1.7(b); see also MLPRC 1.10(d) (allowing waiver of imputed conflicts according to the requirements enumerated at MLRPC 1.7(b)). CytImmune has made clear that it will not consent to Rose’s representation of Dr. Paciotti. Pl.’s Mem. Supp. Mot. Disqualify 17. Accordingly, both Rose and Alston are disqualified from representing Dr. Paciotti in the remainder of this litigation.

The court did not reach the Rule 3.7 (lawyer as witness) issue

Given the significant divergence between Rose’s recollection of the legal advice he provided concerning CytImmune’s NDA and Marder’s, I cannot discount the possibility that Rose will be called as a fact witness should the case proceed to trial. The Defense does not appear to disagree but argues that Rose need not be disqualified at this juncture because the conflict contemplated by the Rule is only triggered “at trial,” which has not yet been scheduled. Def.’s Opp’n Mot. Disqualify 18–20. The Defense cites no case law in support of its position. In any event, because I find Rose disqualified under MLRPC 1.7, I do not find it necessary to resolve the issue.

Bottom line

MLRPC 1.7 exists for the very purpose of ensuring that a litigant’s claims or defenses are not refracted through the multifaceted prism of an attorney’s conflicts. Dr. Paciotti is entitled to a lawyer whose ability to develop a theory of the case is unencumbered by his own uncertainty concerning his representation of a former client. I am persuaded based on how this case has evolved that Rose and the other lawyers at Alston are unable to provide such unfettered counsel.

CytImmune’s Motion to Disqualify is GRANTED.

(Mike Frisch)

January 7, 2017 in Clients | Permalink | Comments (0)

Tuesday, January 3, 2017

Katten Muchin Prevails In Charging Lien Litigation

The Delaware Supreme Court has ruled in favor of the Katten Muchin law firm in a case involving application of the law of charging liens.

The case was a complex fight over the client's ouster from a family business

Martha reacted to her ouster by, among other things, litigating. She first retained plaintiff Katten Muchin Rosenman LLP to represent her in a § 220 books and records request of the Sutherland Lumber Companies.  Although Martha and Katten disagree over whether they entered into a written fee agreement, the parties agree that Katten was not providing its services on a contingency fee basis and was instead entitled to fees on an hourly rate basis and to reimbursement of its expenses.   Indeed, Katten sent Martha monthly invoices based on hourly billing, which Martha paid for several years.

In 2006, Martha, with Katten as her counsel, filed a derivative and double derivative action against Perry, Todd, and Mark alleging, among other things, that Perry‘s and Todd‘s employment agreements with the Sutherland Lumber Companies were a result of self dealing...

Some benefits were realized with respect to the employment agreements at issue but 

By 2011, [client] Martha accrued $766,166.75 in unpaid attorney‘s fees for services that Katten provided in this litigation between 2009 and 2011. In the spring of 2011, Katten withdrew as counsel. One of Martha‘s attorneys from Katten, Stewart Kusper, left the firm and continued to represent her.

After Martha‘s litigation concluded in 2012—without her securing any additional relief on behalf of the Sutherland Lumber Companies—she sought an award of attorney‘s fees from the Sutherland Lumber Companies for all of her fees arising from the § 220 action and from overcoming the special litigation committee‘s investigation and recommendation to terminate the litigation, plus $25,000 in fees for defending against the summary judgment argument aimed at the employment agreement claim. In total, Martha asked for $1.4 million in attorney‘s fees and, in doing so, she used Katten‘s invoices that detailed the services it provided to her and its expenses incurred on her behalf while it represented her as a reasonable basis for the fees she should be awarded.  Indeed, in Martha‘s petition for an award of attorney‘s fees, she argued that the $1.4 million in attorney‘s fees she incurred from Katten were "fair and reasonable."

...Relying on Katten‘s invoices, the Court of Chancery awarded Martha $275,000 in fees for the minor benefits that she obtained on behalf of the Sutherland Lumber Companies in 2007 when, as a result of Martha‘s and Katten‘s efforts, the Sutherland Lumber Companies amended Perry‘s and Todd‘s employment agreements.

The firm intervened and asserted a lien on the fee award.

The court here reversed the Court of Chancery

Although Delaware does not have a statute governing charging liens, Delaware has a long lineage of cases recognizing charging liens as a matter of common law.  Two recent Delaware cases address charging liens.   In Doroshow,  this Court confirmed that Delaware recognizes the long-standing common law right of charging liens. In Zutrau, the Court of Chancery adopted the definition provided by Corpis Juris Secundum that a charging lien is "an equitable right to have costs advanced and attorney‘s fees secured by the judgment entered in the suit wherein the costs were advanced and the fee earned." Today, we also endorse that definition of a charging lien.

Here, the modifications to Perry‘s and Todd‘s employment agreements— which are the basis for Court of Chancery‘s fee award—were adopted as a result of Martha‘s and Katten‘s efforts in the derivative and double-derivative action. Furthermore, Katten‘s unpaid fees arose from the same litigation that produced the benefits for the Sutherland Lumber Companies and which led to the Court of Chancery‘s award of attorney‘s fees. Therefore, based on our definition of a charging lien, Katten is entitled to a lien on the entire fee award of $275,000. The historical rationale for a charging lien—to promote justice and equity by compensating the attorney for her efforts and thus encouraging attorneys to provide legal services to clients—also supports this conclusion.

In its decision, the Court of Chancery seemed to read Doroshow as standing for a rule that an attorney may only seek a charging lien for fees the attorney incurred that were directly connected to her client‘s recovery. The Court of Chancery cited Doroshow‘s finding that, because the law firm in that case represented its client on a contingent fee basis, it was entitled to a charging lien because "the law firm had not been compensated before its work produced the funds." The Court of Chancery reasoned that because Katten had already been paid for the services that led to the benefits for the Sutherland Lumber Companies, it was not entitled to a charging lien. But, Doroshow dealt with a charging lien based on a contingency fee, and we held that the law firm was entitled to its agreed 40% contingent fee. Our decision in Doroshow did not limit the scope of charging liens in general. Rather, Doroshow demonstrates the application of this equitable right to a particular type of fee arrangement, and one fundamentally different than the one between Martha and Katten.

Here, Katten billed Martha regularly for its services based on the amount of time Katten‘s attorneys spent on the case and the attorneys‘ hourly rates. Katten billed Martha for approximately $3.5 million, of which Martha paid roughly $2.7 million. That Katten‘s services underlying the unpaid fees did not result in any benefit to the Sutherland Lumber Companies does not matter. In the case of hourly billing, unlike with a contingency fee, the total amount that the client is required to pay her lawyer is not based on the client‘s recovery. In Zutrau, the Court of Chancery considered the scope of a charging lien in the context of hourly billing and explained that "[i]t is no secret that litigation is expensive and that the costs of prosecution easily can exceed the recovery." The Court of Chancery found, "that the cost of prosecution conceivably could exceed the recovery does not excuse Zutrau from paying those fees." If, as here, an attorney has unpaid fees that are greater than the client‘s recovery, the attorney is entitled to a charging lien on the entire recovery. Moreover, the client remains obligated to pay her attorney any remaining unpaid fees. Martha was required to pay Katten its reasonable fees in accordance with their agreement whether she won or lost. Because Martha did not pay Katten for all of its services stemming from the litigation in which Katten produced the only benefits, Katten is entitled to the equitable right of a charging lien on the entire $275,000 fee award. Finding otherwise would lead to an inequitable result where attorneys with a claim for unpaid fees from litigation— where work had been billed on an hourly basis—could use the equitable right of a charging lien only to recover fees relating to the services that were directly connected to the litigation‘s beneficial results.

Like other contracts, contracts for the provision of legal services create incentives for parties, including clients. When a party, such as Martha, agrees to pay hourly fees to prosecute a complex case, she is assuring her counsel that it will not suffer the commercial damage of uncompensated services if it presses her claims as aggressively as she demands and as the law permits. To permit a client who is a party to such an agreement to escape a charging lien as if she made a strict contingency fee agreement limiting fees to a percentage of recovery is to judicially rewrite the contract at the expense of the attorney and to undermine the traditional purpose of a charging lien.

(Mike Frisch)

January 3, 2017 in Billable Hours, Clients, Current Affairs, Hot Topics | Permalink | Comments (0)

Wednesday, December 21, 2016

Second Thoughts

A client's instruction to her attorney not to deliver an executed deed for property to her grandson negated his interest in the property, according to a decision of the North Dakota Supreme Court.

Cory Rice is Joyce Neether's grandson. Joyce Neether and her late husband, Alvin Neether, raised Rice at their farm. Alvin Neether was diagnosed with ALS in 2009. Sometime before July 29, 2009, Joyce Neether contacted attorney Wayne Enget to draft a bill of sale for the purchase of personal property and two warranty deeds conveying real property to Rice, reserving a life estate in that property for the Neethers.

In July 29, 2009, Enget met with the Neethers to sign the warranty deeds. At that time, Alvin Neether was terminally ill and, while he was physically unable to sign his own name, the district court found he was mentally competent to transfer property. Joyce Neether had authority through a Power of Attorney to manage Alvin Neether's real and personal property. After consulting with Enget, Joyce Neether signed the deeds on behalf of herself and Alvin Neether. Rice was not present when Joyce Neether signed the deeds. Enget told the Neethers he would record the deeds the following day, July 30, 2009.

Before Enget recorded the deeds, Joyce Neether called Enget and instructed him not to record the deeds. Joyce Neether told Enget that she would call him when he was authorized to record the deeds and the bill of sale. Joyce Neether never contacted Enget to either record the deeds or deliver them to Rice.

Rice contended that Enget had duties as his attorney but

it is undisputed that Rice knew Enget went to the Neethers' residence on July 29, 2009, but was unaware the purpose was to sign these deeds. The district court found "[a]t all times during this action Attorney Enget was acting as an attorney for the Neethers and was not acting as an attorney for Rice." Rice asked Enget some questions regarding a separate matter. Rice never signed a fee agreement or paid Enget, and Enget never prepared any documents for Rice. Because the district court found there was no attorney-client relationship between Rice and Enget, there could be no agency relationship...

The district court found that while the deeds were not in Joyce Neether's physical possession, she still had dominion or control over them through her attorney. This Court will only overturn the district court's finding "if there is no evidence to support it, if the finding is induced by an erroneous view of the law, or if the reviewing court is left with a definite and firm conviction a mistake has been made." Kelly, 2002 ND 37, ¶ 15, 640 N.W.2d 38. Evidence in this record supports the district court's findings that Enget was not acting as Rice's attorney and was acting as Neether's attorney. Therefore, the district court's finding is not clearly erroneous...

The district court's findings that the deeds never left Joyce Neether's control and the Neethers lacked intent to deliver the deeds to Rice is supported by the record and, therefore, not clearly erroneous.

(Mike Frisch)

December 21, 2016 in Clients, Ethics | Permalink | Comments (0)

Tuesday, December 13, 2016

Interesting Decision

A law firm is entitled to prejudgment interest on its judgment against a former client, according to a decision of the New York Appellate Division for the First Judicial Department

The addition of prejudgment interest to plaintiff's award for unpaid legal fees under quantum meruit was mandatory (see CPLR 5001; Ash & Miller v Freedman , 114 AD2d 823 [1st Dept 1985]). Moreover, where plaintiff was required to seek permission to withdraw, it was required to continue to zealously represent defendants until the court granted its motion to withdraw (Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.16[d], [e]). Therefore, it was incorrect for the JHO to refuse to consider any value for plaintiff's work from the time it moved by order to show cause to withdraw. This is particularly true where plaintiff sought, but was denied, an adjournment of the trial date, and the court took six months to grant the application.

(Mike Frisch)

December 13, 2016 in Billable Hours, Clients | Permalink | Comments (0)

Thursday, December 8, 2016

No Malpractice If Attorney Limits Representation

The Ohio Supreme Court reversed a denial of summary judgment for the defendant in a legal malpractice case

The issue on appeal in this case is whether the trial court’s grant of summary judgment in favor of an attorney and his law firm in a legal-malpractice action was appropriate. For the reasons that follow, we conclude that it is clear from the evidence that the attorney refused to undertake representation of the clients on the matter at issue and therefore he did not commit malpractice with respect to the matter. Accordingly, we reverse the judgment of the court of appeals and reinstate the trial court’s judgment. 

Some background

The facts of the underlying case paint a tale of caution for all real estate investors...

Appellees Lorna B. Ratonel and her company Carmalor, Inc., entered into an agreement to purchase an apartment building known as Holden House in August 2007. Attorney Gail Pryse and her law firm, Keating, Muething & Klekamp, P.L.L. (collectively, “KMK”) represented Ratonel and Carmalor during that transaction. Ultimately, Ratonel, Carmalor, and Carmalor Ohio, L.L.C., which is also an appellee herein, engaged appellants, Mark Ropchock and his law firm, Roetzel & Andress, L.P.A, to file a legal-malpractice claim against KMK, based largely on Ratonel’s allegation that KMK failed to ensure that Holden House was inspected prior to the purchase. Ratonel also wanted appellants to pursue a legal malpractice suit against KMK relating to French Village, a building in Nebraska she had purchased.

The original complaint filed by Ropchock against KMK contained a paragraph that mentioned French Village, but a later-filed amended complaint did not mention French Village. Although the record reflects that Ratonel and Ropchock frequently discussed French Village, Ropchock did not file a legal malpractice claim relating to that property. The court directed a verdict in favor of KMK, and Ratonel engaged new counsel to represent her, Carmalor, and Carmalor Ohio in a legal-malpractice claim against appellants based in part on appellants’ failure to assert a legal-malpractice claim against KMK relating to French Village.

The court held that the representation was properly limited as allowed by Rule 1.2

To prove that an attorney owed a duty to a plaintiff with regard to a specific legal matter, the plaintiff must establish that the scope of the attorney-client relationship included the specific legal matter.


Viewing the evidence most strongly in favor of Ratonel, we come to the same conclusion as the trial court. There is significant evidence in the record that Ratonel wanted Ropchock to represent her in asserting a legal-malpractice claim relating to the French Village transaction. There is also significant evidence that Ropchock seriously considered and investigated asserting a French Village claim. But there is clear evidence that he ultimately determined that such a claim was not viable and that he communicated to Ratonel that he was not going to represent her in asserting it.

We note that it is common for a client and counsel to discuss multiple potential claims and then later, after the attorney gathers evidence, agree to have the attorney pursue only those claims he believes are viable...

It is clear to us that the engagement letter limited the scope of representation in conformity with Prof.Cond.R. 1.2(c). It is equally clear that nothing in the letter indicates an intention on the part of appellants to represent Ratonel and her companies with respect to the alleged malpractice regarding the purchase of French Village. Nevertheless, the record is replete with references by both Ratonel and Ropchock to French Village. We will now examine the references relied upon by the parties and determine whether the initial scope of representation was expanded to include French Village.

(Mike Frisch)

December 8, 2016 in Clients | Permalink | Comments (0)

Wednesday, December 7, 2016

Immutable Fact Sinks Malpractice Claim In Maritime Litigation

An order dismissing a legal malpractice action was affirmed by the New York Appellate Division for the First Judicial Department.

In this legal malpractice action, plaintiff Optical asserts that its former attorneys, Rubin, Fiorella and Friedman, mishandled the litigation of a maritime action in which it sought to recover damages caused when its submarine fiber optical cable was struck and destroyed by an anchor inadvertently released from a cargo vessel owned by Marbulk Canada, Inc. Rubin Fiorella, on behalf of Optical, brought a maritime action in federal court against the vessel and Marbulk. In the maritime action, Optical alleged that the vessel dropped its anchor in an area designated for laying cable, and that Marbulk was therefore liable. The parties agreed that Marbulk would be liable only if the vessel was located in the designated cable area when its anchor dropped.

Marbulk successfully moved for summary judgment dismissing the complaint in the maritime action. The district court found, inter alia, that sonar data evidence submitted by plaintiff Optical showed that the vessel was outside the boundaries of the designated cable area (Optical Communications Group, Inc. v M/V Ambassador, 938 F Supp 2d 449 [SD NY 2013] [Optical I], affd. 558 Fed Appx 94 [2d Cir 2014] [Optical II]). The conclusion was also supported by evidence submitted by Marbulk, specifically, a screen shot of Simplified Vessel Data Radar (SVDR) data that pinpointed the location of the vessel outside the boundaries of the cable area. As indicated, that decision was affirmed on appeal by the Second Circuit.

In the instant action, plaintiff alleges that, as noted by the Second Circuit in Optical II, Rubin Fiorella failed to preserve an objection to the SVDR data submitted by Marbulk in support of its motion, and also failed to renew a discovery motion that had been denied without prejudice to renewal. Optical alleges that but for these failures, it would have defeated the motion for summary judgment and ultimately prevailed in the maritime action.

The motion court properly found that the Second Circuit's order in Optical II, affirming [*2]Optical I, is documentary evidence within the meaning of CPLR 3211(a)(1), and that its holding flatly contradicts the legal conclusions and factual allegations in the complaint (see Amsterdam Hospitality Group, LLC v Marshall-Alan Assoc., Inc., 120 AD3d 431, 432 [1st Dept 2014]; Morgenthow & Latham v Bank of N.Y. Co., 305 AD2d 74, 78 [1st Dept 2003], lv denied 100 NY2d 512 [2003]).

Even assuming that Rubin Fiorella had successfully challenged the admissibility and authenticity of the SVDR data proffered by Marbulk, the district court found that plaintiff Optical's own sonar data evidence, submitted through its expert, indicated that the vessel was outside the cable field when it released its anchor. Thus, plaintiff's evidence submitted in the maritime action refutes its allegations in this action that, but for Rubin Fiorella's negligence, it would have prevailed in the maritime action (see e.g. Brooks v Lewin, 21 AD3d 731, 734 [1st Dept 2005], lv denied 6 NY3d 713 [2006]).

The district court's decision also refutes Optical's allegation that, but for Rubin Fiorella's failure to conduct further discovery, it would have prevailed in the maritime action, since that court found that the record with respect to the location of the vessel was "immutable and complete" so that "further discovery will not recreate the events underlying the anchor drop or enhance the existent evidence in any meaningful way" (Optical I, 938 F Supp 2d at 464; see Biondi v Beekman Hill House Apt. Corp., 257 AD2d 76, 81 [1st Dept 1999], affd 94 NY2d 659 [2000]).

December 7, 2016 in Clients | Permalink | Comments (0)

Tuesday, December 6, 2016

A "Special Circumstance" Exception To Privity Requirement In Legal Malpractice Case

The dismissal of portions of a legal malpractice claim has been reversed by the New York Appellate Division for the First Judicial Department

Defendant Pryor Cashman LLP represented nonparty David Lichtenstein in a transaction in which Lichtenstein was to purchase $10 million worth of stock in nonparty Park Avenue Bank. Before the transaction could close, nonparty Savings Deposit Insurance Fund of the Republic of Turkey (SDIF) sued the holder of 99% of the bank's shares and obtained a restraining order preventing any transfer of the shares (Deep Woods Holdings, L.L.C. v Savings Deposit Ins. Fund of the Republic of Turkey, 745 F3d 619, 621 [2d Cir 2014], cert denied __ US __, 135 S Ct 964 [2015]).

On June 22, 2004, Lichtenstein and SDIF entered into a stipulation, pursuant to which Lichtenstein had the right to exercise a call option to buy shares of stock in the bank for a specified sum, provided Lichtenstein exercised his right within 45 days after SDIF was able to deliver the shares. SDIF was able to deliver the shares on July 12, 2005, but Pryor Cashman did not exercise Lichtenstein's call option until November 2, 2005 (Deep Woods, 745 F3d at 623), and SDIF then refused to honor it.

Thereafter, Pryor Cashman recommended to Lichtenstein that he, together with nonparties Donald Glascoff, chairman of the bank, and Charles Antonucci, form plaintiff Deep Woods Holdings LLC, and that Lichtenstein assign the call option to Deep Woods, which would then sue SDIF to exercise the call option. In or about 2007, Pryor Cashman organized Deep Woods, drafted the assignment, and insisted on acting as counsel for Deep Woods in the litigation against SDIF. The assignment read in its entirety: "In consideration of the issuance to David Lichtenstein ("Assignor") of a 75% interest in Deep Woods Holdings LLC, a Delaware limited liability company ("Deep Woods"), as described in the Deep Woods Operating Agreement dated February 6, 2007, the Assignor hereby assigns, transfers and delivers to Deep Woods his entire right, title and interest in and to the option contained in Paragraph 8 of that certain Stipulation dated June 22, 2004 between the Assignor and [SDIF]." Pryor Cashman did [*2]not draft the assignment so as to specifically assign any tort claims Lichtenstein might have in connection with the exercise of the call option to Deep Woods.

According to Mr. Glascoff, when Pryor Cashman formed Deep Woods and prepared the assignment, it acted on behalf of Lichtenstein, the other members of Deep Woods, and Deep Woods itself. Mr. Glascoff further alleges that, during this process, Pryor Cashman was silent on the issue of whether the assignment transferred tort claims, but that it was Mr. Glasscoff's understanding that it did, and, if he had understood that it did not, he would have insisted on adding any necessary language so that it did.

At the trial level, Deep Woods won $25.3 million in damages. However, the Second Circuit reversed, finding that the call option had not been not exercised in a timely manner (Deep Woods, 745 F3d at 620).

After the U.S. Supreme Court denied certiorari, Deep Woods brought the instant action against Pryor Cashman, alleging, inter alia, malpractice based on Pryor Cashman's failure to exercise the call option in a timely manner. On February 11, 2016, the motion court issued the order appealed from, granting Pryor Cashman's motion to dismiss so much of the malpractice claim as was based on the failure to timely exercise the call option. The motion court found that, because the assignment Pryor Cashman had drafted did not specifically assign Lichtenstein's tort claims, and because the malpractice alleged occurred while Lichtenstein owned the call option, Deep Woods did not have standing to sue Pryor Cashman. Deep Woods now appeals.


 The motion court correctly found that the subject assignment, which merely transferred the assignor's "entire right, title and interest in and to the [call] option contained in Paragraph 8 of" another contract, did not explicitly assign tort claims (see e.g. Commonwealth of Pennsylvania Pub. Sch. Employees' Retirement Sys. v Morgan Stanley & Co., Inc., 25 NY3d 543, 550-551 [2015]; Dexia SA/NV v Morgan Stanley, 135 AD3d 497 [1st Dept 2016]). Unlike the assignment in Banque Arabe et Internationale D'Investissement v Maryland Natl. Bank (57 F3d 146 [2d Cir 1995]), this assignment did not, by its terms, transfer rights to a transaction. The assignment is not ambiguous; even if it were (and if we therefore considered parol evidence), an unexpressed understanding does not suffice (see Commonwealth of Pennsylvania, 25 NY3d at 551).

However, accepting plaintiff's affidavit in opposition to defendants' motion as true, we find that plaintiff sufficiently pleaded that defendants should be equitably estopped from arguing that the assignment did not assign tort claims. Contrary to defendants' contention, estoppel can be based on silence as well as conduct (see e.g. Rothschild v Title Guar. & Trust Co., 204 NY 458, 462 [1912]). Under these circumstances, where defendants drafted the assignment at a time when it represented both Lichtenstein and plaintiff, and that interpreting the assignment to exclude tort claims would mean that neither the assignor nor plaintiff, the assignee, would be able to sue defendants for malpractice for failing to exercise the call option in a timely manner, we find that the "special circumstances" exception to the privity requirement applies (see [*3]generally Estate of Schneider v Finmann, 15 NY3d 306, 308-309 [2010]; Good Old Days Tavern v Zwirn, 259 AD2d 300 [1st Dept 1999]). To do otherwise might insulate defendants from liability for their alleged wrongdoing.

(Mike Frisch)

December 6, 2016 in Clients | Permalink | Comments (0)

Saturday, October 22, 2016

Lawyer Witness Disqualified In Escrow Dispute

Disqualification was proper due to the witness-advocate rule, according to a recent decision of the New York Appellate Division for the Second Judicial Department

Consolata A. Bajohr commenced an action against attorney Stuart R. Berg and his law firm, Stuart R. Berg, P.C. (Action No. 1), in which she alleged that Berg breached his fiduciary duty in connection with certain money that he was holding in escrow. Josephine Longo and Phyllis Longo commenced a separate action against Bajohr (Action No. 2), seeking, among other things, a judgment declaring that they were entitled to the money that Berg was holding in escrow. The two actions were joined for trial. In an order entered August 26, 2014, the Supreme Court, inter alia, granted that branch of Bajohr's oral application which was to disqualify Berg and his law firm from representing Josephine Longo in Action No. 2. Josephine Longo appeals, by permission, from that portion of the order.

The disqualification of an attorney is a matter that rests within the sound discretion of the trial court (see Ike & Sam's Group, LLC v Brach, 138 AD3d 690, 692;Goldberg & Connolly v Upgrade Contr. Co., Inc., 135 AD3d 703, 704; Spielberg v Twin Oaks Constr. Co., LLC, 134 AD3d 1015). " The advocate-witness rules contained in the Rules of Professional Conduct (22 [*2]NYCRR 1200.0) rule 3.7 provide guidance, but not binding authority, for courts in determining whether to disqualify an attorney'" (Spielberg v Twin Oaks Constr. Co., LLC, 134 AD3d at 1015, quoting Gould v Decolator, 131 AD3d 448, 449). " [P]ursuant to rule 3.7 of the Rules of Professional Conduct (22 NYCRR 1200.0), unless certain exceptions apply, [a] lawyer shall not act as an advocate before a tribunal in a matter in which the lawyer is likely to be a witness on a significant issue of fact'" (Spielberg v Twin Oaks Constr. Co., LLC, 134 AD3d at 1016, quoting Friia v Palumbo, 89 AD3d 896, 896).

Here, Berg, who is a defendant in Action No. 1, is likely to be called as a witness on significant issues of fact regarding his conduct with respect to the money that he is holding in escrow (see Goldberg & Connolly v Upgrade Contr. Co., Inc., 135 AD3d at 704; Spielberg v Twin Oaks Constr. Co., LLC, 134 AD3d at 1016; Gould v Decolator,131 AD3d at 449). Accordingly, the Supreme Court providently exercised its discretion in granting that branch of Bajohr's oral application which was to disqualify Berg and his law firm from representing Josephine Longo in Action No. 2.

(Mike Frisch)

October 22, 2016 in Clients | Permalink | Comments (0)

Monday, October 10, 2016

"Th[e] Type Of Shenanigan That Judicial Estoppel Cuts Off At The Knees" But With A Dissent

The West Virginia Supreme Court of Appeals denied a writ of prohibition brought by a criminal defendant to prevent disclosure of a report prepared at the behest of the defendant and her counsel.

The limited record in this proceeding indicates that the Petitioner was charged...with two counts of child neglect creating a risk of injury, and two counts of child neglect causing injury.  In September of 2015, the Petitioner pled guilty to all the charges. Prior to the scheduled sentencing hearing, a psychological evaluation and risk assessment was arranged for the Petitioner by defense counsel. To facilitate the psychological assessment, the Petitioner wanted the psychologist to review the medical records of her two children, which had been generated during a prior child abuse and neglect proceeding. The Petitioner also wanted to have her attorney discuss with the psychologist the specifics of her case and other confidential information that involved the victims...

The Petitioner underwent the psychological assessment. After the Petitioner had the psychological assessment done, she refused to disclose the report to the trial court and State. A hearing was held over the Petitioner’s refusal to disclose the psychological report. At the end of the hearing, the trial court ordered the Petitioner to disclose the report to the State and court. The Petitioner thereafter filed this proceeding to prevent enforcement of the disclosure order.

The court majority was sharply critical of defense counsel

In this proceeding the Petitioner contends that disclosure of her psychological report would violate the attorney-client privilege and work product doctrine. Assuming, without deciding, that the attorney-client privilege and work product doctrine would prevent disclosure of the psychological report, we find that the doctrine of judicial estoppel prevents the application of those doctrines...

After obtaining a favorable ruling from the trial court allowing disclosure of confidential information to the psychologist, in exchange for a specific promise to turn over the psychological report for sentencing purposes, the Petitioner now asserts for the first time that the psychological report is protected from disclosure by the attorney-client privilege and the work product doctrine. We are gravely concerned by the Petitioner’s blatant attempt to insult the integrity of the judicial process by pretending that her promise to the court did not exist. It is precisely this type of shenanigan that judicial estoppel cuts off at the knees. “The doctrine estops a party from playing ‘fast-and-loose’ with the courts or to trifle with the proceedings.”

...The Petitioner came to the trial court with a promise to disclose the psychological report to the court, if the court allowed the Petitioner to reveal certain information to the psychologist. In making this promise to the court, the Petitioner implicitly waived any attorney-client privilege and work product protections the psychological report may have had. However, now that the report has been generated, the Petitioner has changed her mind about disclosure and is seeking the protection of those privilege doctrines. We will not allow this.

Justice Benjamin dissented

The criminal defense bar ought to be able to confidently develop expert services and opinions on behalf of their clients for sentencing purposes without fear that the information thereby derived, if proved harmful instead of useful, will fall into the hands of the prosecution. The adversary process and its attendant safeguards, including time-honored privileges and the work-product doctrine, does not cease to exist once a criminal defendant has pleaded guilty or is found to be so. Unfortunately, the majority’s well-intentioned efforts in this instance to improve the flow of relevant information to the circuit court will, in the longer term, perversely and inevitably impede the truth-seeking function of sentencing proceedings and render them less accurate by chilling the efforts of criminal defense lawyers to effectively advocate for their clients.

(Mike Frisch)

October 10, 2016 in Clients, Privilege | Permalink | Comments (0)

Friday, October 7, 2016

Client Perjury Rules Clarified In Virginia

A recent notice on the web page of the Virginia State Bar

September 30, 2016

Supreme Court of Virginia Approves Rule Changes and Legal Ethics Opinion 1884

The Supreme Court of Virginia has approved amendments to Rules 1.6: Confidentiality of Information and 3.3: Candor Toward the Tribunal, as well as Legal Ethics Opinion 1884.

Effective December 1, 2016, the Supreme Court of Virginia has approved amendments to Rules 1.6: Confidentiality of Information and 3.3: Candor Toward the Tribunal.

The amendments clarify a lawyer’s obligations when a client discloses an intent to commit perjury well in advance of trial, and when the lawyer can withdraw from the representation before the client’s intended perjury occurs. The order may be found here.

Effective immediately, the Supreme Court of Virginia has approved Legal Ethics Opinion 1884: Conflicts arising from a lawyer-legislator’s employment with a consulting firm owned by a law firm.

The opinion addresses a situation where a lawyer who is a member of the Virginia General Assembly joins a consulting firm. The lawyer asks whether the lawyers and non-lawyers in the consulting firm would be barred from lobbying the General Assembly and whether that bar would extend to members of the law firm as well. In this opinion, the Committee concluded that both lawyers and non-lawyers in the consulting firm, as well as the lawyers in the law firm that own the consulting firm, would be barred from representing clients or otherwise lobbying before the General Assembly. The order may be found here.

(Mike Frisch)

October 7, 2016 in Bar Discipline & Process, Clients, Current Affairs, Ethics | Permalink | Comments (0)

Wednesday, September 28, 2016

Client Autonomy Trumps Attorney's Desire To Press Insanity Defense

The New Jersey Supreme Court has held that a competent defendant retains the authority to refuse to pursue an insanity defense notwithstanding the wishes of her attorney.

When a criminal defendant is found competent to stand trial under N.J.S.A. 2C:4-4, he or she has the autonomy to make strategic decisions at trial, with the advice of counsel, including whether to assert the insanity defense. Based on the trial court’s finding that defendant was competent to stand trial, and the detailed explanation that it gave defendant of the potential benefits and risks of the insanity defense, the court should have permitted her to decide whether to assert the defense, rather than invoking it on her behalf. We reverse the trial court’s judgment of acquittal by reason of insanity on the stalking charge, and remand for a new competency determination and, if appropriate, a new trial on this charge. We affirm defendant’s conviction on the weapons charges.

From the court's headnotes

 Through persistent efforts over more than a decade, defendant June Gorthy attempted to commence a relationship with C.L., a mental health therapist residing in New Jersey whom she met only briefly in 1998 at a conference in California. After the conference, defendant repeatedly sent C.L. gifts, letters and phone messages, stating that she was in love with C.L. C.L. categorically rejected these overtures. Defendant then abandoned her home in Colorado and drove to New Jersey, where she repeatedly contacted C.L. Defendant was arrested when she was found sitting on the floor in front of C.L.’s office. Defendant was carrying a knife, and, after a consent search of her truck, the police found several guns, ammunition, including hollow point bullets, another knife and an axe. Upon her release from jail, she initially complied with instructions not to contact C.L., but then resumed doing so.

Defendant was arrested again, and charged with stalking and weapons offenses. Defendant was released on bail, and admitted to pre-trial intervention subject to conditions, including that she have no contact with C.L. Defendant complied until the spring of 2006, when she made seventy-four calls to C.L. over a three-week period. On November 15, 2006, defendant was charged under a superseding indictment with stalking and weapons offenses.

Defendant filed a pretrial motion challenging her competency to stand trial. After reviewing defendant’s medical records and mental health evaluation, and questioning defendant, the trial court concluded that she was competent. Prior to trial, defendant’s counsel served notice that defendant may assert an insanity defense, and submitted the report of a psychiatrist who opined that defendant was psychotic and delusional at the time of the alleged offenses. The psychiatrist further opined that, if defendant were to decide not to assert an insanity defense, she would be doing so knowingly, but not intelligently or voluntarily.

Defendant declined to raise the insanity defense, over the objection of her attorney. The trial court held a hearing at which the judge explained to defendant the consequences of declining to assert the defense, and of asserting it and being acquitted by reason of insanity. Defendant continued to refuse to assert an insanity defense. The trial court concluded that defendant’s delusional condition had limited her ability to knowingly, intelligently and voluntarily determine whether to raise the defense, and then asserted the defense on her behalf on the stalking charge. Defendant was found not guilty by reason of insanity on that charge, and convicted on the weapons charges. The court entered an order of civil commitment on the stalking charge, and probation on the weapons convictions.

Defendant appealed her conviction, challenging the trial court’s decision to assert the insanity defense on her behalf, and also raising several trial errors. The Appellate Division reversed the trial court’s judgment on the insanity defense, and remanded for a bifurcated hearing on the insanity defense and the substantive defenses. This Court summarily remanded for reconsideration as to the insanity defense in light of the Court’s disapproval of bifurcated proceedings where an insanity defense is raised. On the remand, another panel of the Appellate Division, in a published opinion, affirmed the trial court’s judgment of acquittal by reason of insanity on the stalking charge. The panel rejected defendant’s contention that because she was found competent to stand trial, the court should have permitted her to decline to raise the insanity defense, holding that a defendant’s determination not to raise a defense is subject to a higher standard than that set by the competency statute.

The Appellate Division decision is linked here.

Clearly, defendant lacked the ability to make a rational choice on the question of defenses to the stalking count. She wanted validation of the “truth” of her imagined relationship with the victim, a motive irrelevant to the legal decision of waiver, unrelated to trial strategy, or even to any legal question. On the subject of the stalking charge, defendant's reasons for waiving the insanity defense were neither intelligent, nor voluntary, arising as they did from a compulsion.

Accordingly, we find that the trial judge did not err. His conclusion was, indeed, based on “sufficient supporting evidence.” See State v. Purnell, 394 N.J.Super. 28, 50 (App.Div.2007). Defendant's decision to waive the insanity defense was not knowing, voluntary, and intelligent. See Handy, supra, 215 N.J. at 362. The judge's decision to interpose the defense over defendant's objection was correct.

Asbury Park Press covered the trial. (Mike Frisch)

September 28, 2016 in Clients | Permalink | Comments (0)

Friday, September 23, 2016

Not To Late To Sue

A legal malpractice suit was not time-barred, according to an opinion of the Alaska Supreme Court. 

A client personally financed the sale of his business corporation. His attorney drafted documents that secured the buyer’s debt with corporate stock and an interest in the buyer’s home. Over seven years later the government imposed tax liens on the corporation’s assets; according to the client, it was only then he learned for the first time that his attorney had not provided for a recorded security interest in the physical assets. The client sued the attorney for legal malpractice and violation of the Alaska Unfair Trade Practice and Consumer Protection Act (UTPA).

The superior court held that the statute of limitations barred the client’s claims and granted summary judgment to the attorney. But we conclude that it was not until the tax liens were filed that the client suffered the actual damage necessary for his cause of action to be complete. We therefore reverse the judgment of the superior court and remand the case for further proceedings.

The statute does not begin to run until all elements of the action exist.

In this case the superior court found that Jones was injured when he and Grunwald signed a sale document that failed to secure Jones’s interest in the business assets. The court reasoned that once Jones had contracted for an inadequate security interest, the attorney’s alleged failure to meet his professional duty of care had injured Jones and the malpractice claim accrued.

But Jones did not suffer any appreciable injury at the time the sale documents were signed in 2004. Like the plaintiffs in Austin, Jones received a contract that was less than he allegedly expected it to be, since it failed to give him a security interest in the corporation’s physical assets. But as long as Grunwald substantially abided by his contractual obligations, Jones had no reason to execute on a security interest and therefore suffered no actual injury from being unable to do so.

Nor did Jones suffer an appreciable injury in October 2005, when the escrow manager first notified him that Grunwald had missed a payment. Jones agreed to extend Grunwald’s payments at that time and to work out an alternative arrangement rather than foreclose on the debt. Because the stock purchase agreement allowed this forbearance without waiving “any obligation of Debtor or right of Secured Party,” Jones again suffered no injury. And Grunwald continued to make at least partial or late payments through February 2012. Jones was satisfied with the parties’ arrangement and did not attempt to use any remedies he would have had as a secured party; he therefore continued to suffer no harm from his lack of a security interest.

.Jones did suffer an appreciable injury in late 2011. The IRS recorded liens on Northern Heating’s physical assets on October 31 and November 14 of that year; at that time Jones lost his ability to acquire anything greater than junior lienholder status. Since the legally protected interest at issue was Jones’s ability to recover the corporation’s physical assets in case of the buyer’s default, this was clearly an appreciable injury. We conclude that Jones’s professional malpractice claim accrued on October 31, 2011.

The three-year statute of limitations for the malpractice claim therefore expired on October 31, 2014. Because Jones filed his complaint in December 2013, within the time allowed, it was clear error to find the action barred by the statute of limitations.

(Mike Frisch)

September 23, 2016 in Clients | Permalink | Comments (0)

Monday, September 19, 2016

Jury Reunion No Substitute For Expert Opinion

The Connecticut Supreme Court has affirmed the dismissal of a legal malpractice claim against a criminal defense attorney for lack of an expert opinion

In the present case, from the perspective of a lay juror, the causal link between the plaintiff’s allegations of negligence and the plaintiff’s criminal convictions is far from obvious. Specifically, even if the defendant’s omissions or conduct were shown to be negligent, it would be entirely unclear to a jury that those omissions or conduct, rather than the plaintiff’s commission of the charged crimes and the resulting evidence of her guilt, were the proximate cause of the plaintiff’s convictions. Stated otherwise, even if the defendant had done everything that the plaintiff now claims she should have done differently over the course of the plaintiff’s criminal trial, the state’s case might have been strong enough that the defendant still would have been convicted. Without any specialized knowledge of criminal law and procedure, specifically, the statutes proscribing the charged offenses and the rules governing the undertaking of a criminal trial, the jurors would be unable to determine, in light of the case the state presented, whether the alternative strategies suggested by the plaintiff had a viable chance of succeeding...

 Notably, many of the plaintiff’s allegations of negligence concern matters of pretrial preparation and trial strategy. It is true that ‘‘[l]egal malpractice may include an attorney’s failure to exercise ordinary care in preparing, managing, and presenting litigation. . . . But [d]ecisions of which witnesses to call, what testimony to obtain or when to cross-examine almost invariably are matters of judgment. . . . As such, the wisdom and consequences of these kinds of tactical choices made during litigation are generally matters beyond the ken of most jurors. And when the causal link is beyond the jury’s common understanding, expert testimony is necessary.’'

This was not the solution

As a final matter, we reject the plaintiff’s claim that the only way to prove causation in this malpractice action was to call as witnesses the jurors from her criminal trial, and elicit from them testimony regarding how they would have voted if the case had been defended differently.

Case dismissal affirmed. (Mike Frisch)

September 19, 2016 in Clients | Permalink | Comments (0)

Wednesday, July 13, 2016

Disruptive Client Did Not Forfeit Right To Counsel

The Massachusetts Supreme Judicial Court has held that a difficult client (to put it mildly) did not by his behavior forfeit his right to counsel in a probation revocation proceeding.

The principal issue in this appeal is whether a Superior Court judge properly ordered the forfeiture of the defendant's right to counsel in a probation revocation hearing. The judge, faced with a defendant who admittedly engaged in a pattern of quarrelsome, confrontational, hostile, and threatening conduct toward a succession of nine different court appointed attorneys over the course of the trial and post trial proceedings, ordered forfeiture on those grounds. Subsequent to the forfeiture order, the defendant appeared pro se at the probation revocation hearing. A different judge found the defendant in violation of probation and sentenced him to State prison for a term of not less than seven years and not more than eight years, from and after the sentence he was then serving. The defendant appealed, claiming error in the forfeiture order and the probation revocation hearing...

Although we appreciate the imperative to force an end to the defendant's interference with the timely and fair disposition of the probation revocation matter, we are constrained to conclude that the forfeiture order must be reversed, as it does not comply with the strict guidelines we adopted in Means, supra. Therefore, we vacate the forfeiture order based on our conclusion that (1) the forfeiture hearing did not meet the procedural due process requirements of Means; and (2) the defendant's conduct, although egregious in many respects, did not warrant forfeiture under the guidelines established in Means.

The Means factors

The guidelines require consideration of four factors: (1) whether the defendant has had the services of more than one attorney; (2) the type of proceeding in which forfeiture is ordered; (3) the type of conduct offered as the basis for forfeiture; and (4) the availability of a less restrictive measure or whether forfeiture is a last resort.

The outcome

It would be an understatement to say that over the course of the seven years between the defendant's arraignment and the forfeiture order, the defendant's turbulent relationship with his withdrawing attorneys demonstrated an extraordinary inability or unwillingness to cooperate with counsel. Therefore, we have no quarrel with the judge's frustration with what could have been a tactical ploy by the defendant to delay the resolution of the matter likely to result in the revocation of his probation and the imposition of a State prison sentence. And we recognize that cases in which defendants consistently find frivolous reasons to withhold their cooperation from appointed counsel can and must be dealt with appropriately...

We conclude, however, that the forfeiture order in this case was erroneous for two reasons. First, the defendant's conduct, consisting mainly of threats to report counsel to the board over a seven-year period, was not sufficiently "egregious" to warrant forfeiture. Second, even if the defendant's conduct met the threshold for forfeiture, the judge failed to consider whether forfeiture was in the interests of justice, the second prong of the two-part test for forfeiture.

(Mike Frisch)

July 13, 2016 in Clients, The Practice | Permalink | Comments (0)