Saturday, October 22, 2016
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.
Monday, October 10, 2016
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.
Friday, October 7, 2016
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.
Wednesday, September 28, 2016
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)
Friday, September 23, 2016
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.
Monday, September 19, 2016
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)
Wednesday, July 13, 2016
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.
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.
Tuesday, July 12, 2016
The North Carolina Court of Appeals affirmed the dismissal of a legal malpractice case brought by a defendant who pleaded guilty to criminal charges but was later exonerated when the victim recanted her testimony.
On 2 March 2012, defendant was appointed by the Court to represent plaintiff on these charges. Plaintiff sent several notes to defendant. None of the letters in the record that were written by plaintiff to defendant include any assertion by plaintiff that he was factually innocent of the charged offenses or that he wanted a jury trial. Instead, all of plaintiff’s notes urgently requested defendant to negotiate a plea bargain that would enable plaintiff to be released from jail as soon as possible.
The attorney negotiated the plea per the client's instruction.
About a year after pleading guilty to taking indecent liberties, plaintiff obtained a signed statement from Tina stating that she and plaintiff had not had any sexual contact. Plaintiff retained defendant to prepare a motion for appropriate relief, and Mr. Patrick Currie was appointed to represent plaintiff in court. A hearing on plaintiff’s motion for appropriate relief was conducted by Judge Anna Wagoner on 13 May 2013, at which testimony was elicited from Ms. Thomas and Tina in support of plaintiff’s contention that in 2011 Tina had falsely accused him of having sexual relations with her. On 24 May 2013, Judge Wagoner entered an order granting plaintiff’s motion for appropriate relief, setting aside his guilty plea, dismissing all charges against plaintiff related to sexual contact with Tina, and removing plaintiff from the Sex Offender Registry.
The court rejected the ensuing claim of malpractice
It is undisputed that defendant repeatedly directed defendant to negotiate a plea bargain with the prosecutor, under the terms of which plaintiff would be released from jail and allowed to rejoin his family. There is no evidence in the record to suggest that plaintiff ever indicated any desire to resolve the charges against him at a jury trial. Consequently, the question raised by plaintiff’s complaint was whether defendant’s representation of plaintiff met the standard of care for an attorney representing a criminal defendant who has directed his counsel that his preference is to resolve the charges against him with a plea arrangement. The standard of care for an attorney representing a criminal defendant requires more extensive investigation and preparation for a jury trial than for entry of a plea of guilty. Nonetheless, we agree with plaintiff’s general proposition that a client’s preference for a plea bargain as opposed to a trial does not relieve the attorney of the duty to exercise reasonable care and diligence in negotiating an appropriate plea arrangement and representing the client’s interests in this regard...
On this record, we conclude that the charges against plaintiff were supported by adequate evidence to take the case to the jury. Defendant successfully negotiated a plea arrangement pursuant to the terms of which plaintiff pleaded guilty to one charge of taking indecent liberties, agreed to register with the North Carolina Sex Offender Registry, and would be released from jail, in exchange for which the State dismissed the numerous other serious charges against plaintiff. Given plaintiff’s insistence on pleading guilty, the seriousness of the charges against plaintiff, and the strength of the evidence supporting these charges, the plea bargain arranged by defendant appears to reflect a reasonable exercise of professional skill on defendant’s part.
The court found no other basis to sustain the action. (Mike Frisch)
Monday, July 11, 2016
The Virgin Islands Supreme Court vacated an order appointing the Chief Territorial Public Defender as counsel in a complex criminal case. The trial court may appoint the Office to a case but may not designate the particular attorney assigned.
The defendant initially had retained counsel
In 2008, Miller was charged with a litany of offenses, including violations of the Criminally Influenced and Corrupt Organizations Act, 14 V.I.C. § 600 et seq. (“CICO”). Miller’s trial on these crimes commenced in May 2011, in which he was represented by the law firm of Dudley Clark & Chan, LLP. Following five days of deliberations, the jury was unable to reach a unanimous verdict, which resulted in the trial court declaring a mistrial on June 24, 2011.
The firm was thereafter permitted to withdraw for nonpayment of fees.
A public defender was appointed but withdrew due to a claimed conflict of interest.
The court did not find an actual conflict of interest, but nevertheless relieved Attorney Leycock from the case because it concluded that there existed a potential for a conflict of interest which warranted Attorney Leycock’s withdrawal. The court simultaneously ordered, “Chief Public Defender Samuel Joseph, Esq., is appointed to personally represent Defendant Miller.” (JA at 154.) Lastly, the court directed Attorney Joseph to create an “ethical wall” within the Office of the Territorial Public Defender to ensure that Miller received conflict-free representation.
At the beginning of the following year, on January 27 and 28, 2014, Attorney Joseph filed two motions to be relieved as counsel, raising substantially the same two issues. First, Attorney Joseph challenged the legal efficacy of the “ethical wall” which had been ordered by the court. Attorney Joseph argued that members of the Public Defender Administration Board and employees of the Office of the Territorial Public Defender had relationships with related defendants which gave rise to conflicts of interest, and he posited that those conflicts were imputed to the entire office. Attorney Joseph also contended that, under 5 V.I.C. § 3503(a), the Superior Court lacked the requisite authority to select an individual public defender to represent an indigent defendant, adding that such an order was disruptive to the operation processes of the Office of the Territorial Public Defender.
The court decided the appeal on its merits
In his brief, Attorney Joseph informs that Attorney Leycock is no longer employed by the Office of the Territorial Public Defender, and concedes that the conflict-of-interest issue pertaining to Attorney Leycock’s representation of Miller is now moot. (Appellant’s Br. at 15.) Therefore, we proceed to address the sole remaining issue submitted for this Court’s review: whether the Superior Court exceeded its authority by specifically assigning Attorney Joseph to represent Miller in the criminal proceedings attendant to this appeal.
The trial court exceeded its authority by appointed the Chief rather than the Office
Admittedly, the trial court was justified in being concerned about the history of counsel involved in the representation of Miller, and we acknowledge the Superior Court’s emphasis on providing conflict-free representation for Miller. Nevertheless, choosing a specific public defender was not the appropriate solution for addressing the court’s concerns, as the order superseded the role of the Chief Public Defender and violated the separation of powers doctrine. See State ex rel. Robinson, 48 S.W.3d at 69-70 (while the trial court had a legitimate interest in “break[ing] the chain of continuances made by withdrawing defenders,” and ensuring that defendant’s case proceeded to trial without further delays, “[t]he trial court acted in excess of its authority” when it appointed specific public defenders to represent the defendant). It is the Chief Public Defender—and not the court—who possesses statutory managerial authority, and is best positioned to assess the Office’s resources and experience of its lawyers, in achieving effective case management...
Upon a finding of a defendant’s indigence, the Superior Court may appoint the Office of the Territorial Public Defender as counsel. However, the court lacks the statutory authority to order that a specific public defender be assigned to represent a defendant. Accordingly, we vacate the court’s orders appointing Attorney Joseph to represent Miller in the underlying criminal proceedings and remand this case so that the Superior Court may appoint the Office of the Territorial Public Defender, leaving the determination as to the specific attorney to be assigned to Miller to be made within the discretion of the Chief Public Defender.
Thursday, July 7, 2016
Actual Innocence Required To Sue Defense Counsel For Malpractice; Sitting In Jail Extra 13 Months Not Enough
The Washington State Supreme Court has held that a criminal defendant must establish actual innocence to sue the defense attorney for malpractice.
We find that the public policy concerns recognized in Ang require a plaintiff to prove actual innocence of an alleged crime when pursuing a criminal malpractice claim. Because any term of confinement Piris served was within the broad authority of the trial court, the argument for a Powell exception is inapplicable here. We need not overrule Powell but note it involved a unique and narrow set of circumstances where defense counsel and the court were evidently unaware of the class or level of crime to which Powell was pleading guilty. We expect defense counsel to know the level of crime for which a client is being sentenced. That circumstance in Powell is not present in Piris's case before us.
Justice Stephens dissented
Christopher Piris successfully obtained postconviction relief from a miscalculated sentence. But due to alleged attorney negligence, he was not timely resentenced and he spent more time imprisoned than his corrected sentence authorized. The majority holds that Piris cannot pursue malpractice claims against his defense attorneys unless he proves he is actually innocent of the underlying charges. I disagree. When a client wins postconviction relief for resentencing and attorney negligence results in the client's excessive imprisonment because the client did not timely receive the benefit of resentencing, it is no excuse to say that the client was subject to some imprisonment. Extending the "actual innocence rule" to the unique circumstances of this case serves only to perpetuate an injustice. I respectfully dissent...
Undoubtedly, Piris's criminal conduct was the "natural cause" of his 146- month sentence. But the additional 13 months he served on top of his lawful sentence was proximately caused by his attorneys' alleged negligence in not ensuring that he was timely resentenced. Piris should not have to prove his actual innocence as a precondition to seeking damages for these 13 months. From a practical standpoint, he is in the same position as the plaintiff in Powell; regardless of whether his excess sentence exceeded a statutory maximum or the confinement term the court imposed, it was unlawful. He should be entitled to proceed with his claim and attempt to prove that his harm resulted from his attorneys' negligence.
I would hold that a criminal malpractice plaintiff whose sentence is vacated and remanded but who does not timely receive the benefit of resentencing due to alleged attorney negligence need not prove he is actually innocent of the underlying criminal conduct to proceed with his criminal malpractice claim. Because the majority extends the actual innocence rule beyond its justifications in policy or causation principles, I respectfully dissent.
Note correction to our error in identifying the court. (Mike Frisch)
Wednesday, July 6, 2016
Experience teaches us that a typical response when a lawyer sues a former client for an unpaid fee is a counterclaim for legal malpractice.
That counterclaim effort failed in a case before the the New York Appellate Division for the First Judicial Department.
The representation was of a client married to Celeste Holm, recounted in this New York Times story.
The court here
Plaintiff law firm Gallet Dreyer & Berkey represented defendant Basile in connection with the December 21, 2009 settlement of a Surrogate's Court action brought in 2004 by his spouse, Celeste Holm, to revoke an irrevocable trust that she created in 2002. In this action brought by the law firm against Basile to recover outstanding legal fees, Basile has counterclaimed for attorney malpractice, taking the position that due to poor advice, factual omissions, and misinformation, he was persuaded to sign the stipulation in Holm's action to revoke her trust, which stipulation caused him (and Holm) to forfeit valuable assets and the right to pursue valuable claims without their receiving any corresponding benefit.
To sustain a cause of action alleging legal malpractice, a plaintiff must establish not only that the defendant "failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession," but also that "the attorney's breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages" (Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 49 [internal quotation marks omitted]). "An attorney's conduct or inaction is the proximate cause of a plaintiff's damages if but for the attorney's negligence the plaintiff would have succeeded on the merits of the underlying action, or would not have sustained actual and ascertainable damages" (id. at 50 [*2][internal quotation marks and citation omitted]). "[M]ere speculation of a loss resulting from an attorney's alleged omissions . . . is insufficient to sustain a claim for legal malpractice" (Markard v Bloom, 4 AD3d 128, 129 [1st Dept 2004], lv denied 2 NY3d 706 ).
As a signatory to the settlement, Basile certainly had the right to be fully informed of the facts and provided with appropriate advice by his attorney before agreeing to its terms, and we cannot conclude as a matter of law on this record that the law firm's advice to Basile was complete and free of incorrect information. However, nothing in Basile's submissions shows that but for that claimed negligence, he "would not have sustained actual and ascertainable damages" (Nomura, 26 NY3d at 50 [internal quotation marks omitted]).
The irrevocable trust was created and funded with Holm's assets before Basile's marriage to Holm. Basile had no current interest in the trust's assets at the time of the settlement; he had, at best, a potential interest in those assets if the trust were to be set aside and the assets became part of Holm's estate, entitling Basile to an elective share. Similarly, the claims addressed in the stipulation regarding other, non-trust assets also concerned property that belonged to Holm alone, and Basile had no present possessory right to them. Notwithstanding Basile's residuary interest in Holm's eventual estate, and the possibility that if Holm reacquired property that was previously transferred she would gift him a present interest, he had no established right to make any disposition of that property, or to claim ownership of any portion of that property, while she was alive. His lack of a present possessory interest in the property at issue severely restricts any rights to claim that the law firm's alleged failures proximately caused him to experience a financial loss in relation to those properties.
More importantly, Basile has not presented an evidentiary showing supporting a claim to "actual and ascertainable damages," as Nomura requires (26 NY3d at 50 [internal quotation marks omitted]). In cases presenting a valid claim of legal malpractice, the claimed "actual and ascertainable damages" have been clearly calculable (see e.g. Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438 ). In contrast, summary judgment dismissing the legal malpractice claim has been granted where the asserted damages are vague, unclear, or speculative (see Bellinson Law, LLC v Iannucci, 102 AD3d 563, 563 [1st Dept 2013]). Here, Basile essentially speculates that the information he lacked would have provided him with better leverage in negotiations, but he fails to show exactly how, if counsel had properly informed and advised him, the outcome of the litigation would have been more favorable to him. This is particularly so since the settlement netted him a distribution in excess of $2,000,000, as compared to the $25,000 he would have received under the trust alone, in the absence of the stipulation. The submissions simply do not justify a conclusion that Basile would have achieved a more favorable result in the absence of counsel's claimed mistakes.
Plaintiff's motion for summary judgment dismissing the counterclaim and third-party complaint brought against it by defendant Frank Basile was therefore properly granted.
Vanity Fair published this story after Ms. Holm's passing. (Mike Frisch)
Saturday, July 2, 2016
The Idaho Supreme Court affirmed the grant of summary judgment to the defendants in a legal malpractice case, concluding that the plaintiff had failed to establish the existence of an attorney-client relationship with the defendants.
In August of 2011, Hughes and Andrew Diges entered into a 50-50 partnership, under the name H-D Transport, to haul hydraulic fracturing fluid. Hughes contributed money to the partnership and Diges contributed his experience. The partners did not create a written partnership agreement. Sometime prior to October 21, 2011, disagreements arose between the partners concerning the operation and finances of the partnership. On October 21, 2011, Diges hired Michael D. Pogue, an attorney with Lawson, Laski, Clark & Pogue, PLLC, to draft a formal partnership agreement. Diges told Hughes that he had hired an attorney to prepare a partnership agreement, and on November 21, 2011, Pogue, Hughes and Diane Barker, the partnership bookkeeper, participated in a conference call regarding the partnership.
Hughes contended that the partnership had retained attorney Pogue
The district court concluded that Hughes failed to establish that an attorney-client relationship existed between himself and Pogue. The district court explained that there was neither evidence nor any claim in the record that there was any express agreement between Hughes and Pogue. Thus, the district court reasoned that any attorney-client relationship would have to have been based upon an implied-in-fact contract. Based on the rule pronounced in Berry, the district court considered: “(1) Subjectively, did Hughes have a good faith belief that Diges hired Pogue and Pogue agreed to represent not only Diges’ interest but also the interests of Hughes and the Partnership?; (2) Objectively, was the belief of Hughes reasonable in light of the facts and record presented?”
Answering these questions, the district court explained that the evidence in the record showed that the “relationship between Diges and Hughes was very strained and that there was a great deal of distrust between the two of them.” Further, the district court reasoned that while Pogue had participated in a telephone conference with Hughes and the partnership’s bookkeeper, there was no evidence in the record as to the contents of that conversation or why that would lead Hughes to reasonably believe that Pogue was representing his interests or the interests of H-D Transport. Finally, the district court noted that Hughes himself admitted that on November 21, 2011, the same day as the telephone conference, Hughes “became aware that Pogue only represented the interests of Diges . . . .” The district court concluded that it was not “subjectively or objectively reasonable for Hughes to believe that Pogue was his attorney or representing his interest under the circumstances . . . .” On appeal, Hughes argues that the district court erred in the standard it applied and that a genuine issue of material fact exists as to the existence of an attorney-client relationship...
Hughes’ testimony is unambiguous; no later than November 21, 2011, Hughes was aware that Pogue represented Diges, not him or the partnership. We find no error in the district court’s conclusion that it was not reasonable for Hughes to believe that he had an attorney-client relationship with Pogue.
Hughes must pay the law firm's appeals costs. (Mike Frisch)
Thursday, June 23, 2016
The New York Appellate Division for the First Judicial Department affirmed the dismissal of a legal malpractice claim against Boies Schiller.
Plaintiff failed to establish that defendants breached their duty by representing her despite a conflict of interest, in violation of Code of Professional Responsibility DR 5-105 [22 NYCRR 1200.24), the conflicts rule in effect at the time. Unlike current Rules of Professional Conduct (22 NYCRR 1200.0) rule 1.7, DR 5-105 did not require that client consent to a conflict be confirmed in writing. An issue of fact exists whether defendants' clients consented orally.
In any event, the violation of a disciplinary rule, without more, is insufficient to support a legal malpractice cause of action (Cohen v Kachroo, 115 AD3d 512, 513 [1st Dept 2014]). Since plaintiff cannot prove that she suffered damages that were proximately caused by defendants' alleged misconduct, her cause of action must be dismissed (see AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 ).
Nor can plaintiff prove that defendants proximately caused her any injury with respect to her underlying claim for unauthorized use of her image, since that claim was time-barred and had already been released by the time she engaged defendants (see CPLR 215; Nussenzweig v diCorcia, 9 NY3d 184 ).
As for her other, potentially meritorious, claims, plaintiff settled those, and offers no evidence that, but for defendants' negligence, the settlement awards would have been higher (see [*2]Fusco v Fauci, 299 AD2d 263 [1st Dept 2002]).
Indeed, plaintiff failed to demonstrate that she suffered any harm at all as a result of defendants' alleged failings. Although defendants admittedly filed plaintiff's bankruptcy proof of claim one day late, the claim was accepted, and plaintiff received a substantial mediated settlement. Although she complains of defendants' alleged failure to join Elite S.A. as a party in one of the underlying actions, plaintiff nonetheless obtained a substantial settlement from that entity. Although plaintiff objects that she was not named as a class representative in one of the underlying actions, the deadline for adding class representatives had already passed by the time she engaged defendants, and nonetheless she received an incentive award for her active participation in the litigation.
Monday, June 13, 2016
The West Virginia Supreme Court of Appeals reversed the grant of summary judgment to the defendant attorney in a legal malpractice claim and directed that the plaintiff instead be awarded summary judgment.
The issue involved negligent title work that had led to serious repercussions.
Before turning to the arguments of the parties, we note that this case involves malpractice in the performance of transactional work (giving advice or preparing documents for a business transaction) as opposed to litigation malpractice...
The following example illustrates the proximate cause analysis utilized in a transactional legal malpractice claim.
If the client’s position is “my lawyer gave me bad advice that I followed, and it cost me money,” the client in effect is saying, “My lawyer gave me incorrect advice. I acted in reliance on this advice, and as a proximate result, I sustained $ x in damages. But for that advice, I would not have been damaged at all.” At times, the attorney’s negligence does not relate to decisions made in the course of litigation but involves some recommendation or guidance negligently given. Therefore, the “case within a case” will not entail the reconstruction of a trial or appeal; instead, the client must show alternative measures he could have taken “but for” the attorney’s faulty advice.
Richard H.W. Maloy, Proximate Cause: The Final Defense in Legal Malpractice Cases, 36 U. Mem. L. Rev. 655, 676 (2006) (emphasis added). The crux of Rubin’s argument is that the alternative measure here is obvious; had Mr. Morris alerted it to the declaration of pooling, Rubin would have availed itself of the substitution clause in its contract with WVE and avoided the losses at issue.
The court found that damages were established by the undisputed facts and that the plaintiff had mitigated the damages.
Applying this standard to the instant case, it is clear that Rubin took reasonable steps under the circumstances to mitigate its damages. After discovering the title defect, Rubin took responsible actions to minimize the liabilities arising from the problem, which is the essence of mitigation of damages. Rubin weighed the consequences to be avoided and assessed its overall exposure to liability at approximately $147,000 arising from Mr. Morris’s failure to alert it to the title defect.9 By contrast, Rubin negotiated a settlement with CNX that was much less expensive. Based on these facts, we find that Rubin’s decision to settle the matter with CNX instead of pursuing litigation on what it believed to be an unmeritorious affirmative defense of adverse possession was mitigation of damages. “Many settlements are a reasonable response to a difficult situation created by another’s negligence.”
The court also held that the plaintiff was entitled to damages for lost profits.
Application of these principles in a legal malpractice action does not make an attorney an insurer of pie-in-the-sky expectations of the client. Rather, this tenet simply operates to restore the client to the economic position that he or she would be in but for the attorney’s negligence.
Wednesday, June 1, 2016
The Montana Supreme Court affirmed the disqualification of local and national counsel in an action brought against O. F. Mossberg & Sons as a result of a brief consultation with the plaintiff.
The District Court disqualified Mossberg’s out-of-state counsel, Renzulli Law Firm, and its local counsel, Tarlow & Stonecipher, pursuant to Rule 1.20(c) of the Montana Rules of Professional Conduct. The basis for the court’s disqualification order was a prospective client consultation that Luke Keuffer had with an attorney from Tarlow & Stonecipher, which was later used in a deposition of Stephanie Keuffer by John Renzulli of the Renzulli Law Firm. The court found that the continued involvement in the case by Mossberg’s counsel gave the Keuffers reason to question whether their case can proceed fairly and cause to question what they may have disclosed in the consultation to Tarlow & Stonecipher that may later be used against them in the current litigation. The court also found that Mossberg’s counsel’s actions undermine the public’s trust in the legal profession. For the reasons discussed below, we affirm the District Court’s order disqualifying Renzulli and Tarlow & Stonecipher.
Luke and Stephanie were out hunting. She had a Mossberg rifle.
The Keuffers allege that the Mossberg rifle fell and struck Luke’s rifle and then discharged and shot Luke in the face, causing serious and permanent injury. On August 10, 2010, Luke called Tarlow & Stonecipher, PLLC, and spoke to attorney Margaret Weamer “regarding [Luke’s] possible claim against [a] gun manufacturer for injuries sustained in [a] hunting accident.” Weamer’s time record indicates that she spoke with Luke for six to twelve minutes. After discussing the case with Luke, Weamer advised him that Tarlow & Stonecipher would not be interested in taking the case.
The issue came to light at a deposition and led to a disqualification motion
The court found that Renzulli improperly used the Keuffers’ consultation against them during Stephanie’s deposition. The court found that the purpose of Renzulli’s questioning was to intimidate the Keuffers and create an impression they have a bad case. The court indicated the uniqueness of the situation as Renzulli did not use “information learned” from the consultation, but used the fact that the consultation occurred. The court concluded that this was equally a violation of the Rules because Renzulli used the consultation to intimidate and create an adverse inference about the Keuffers’ case. The District Court disqualified Mossberg’s counsel because their actions defeat the purpose of the Rules of Professional Conduct which threatens the public’s trust in the legal system.
In this case...Renzulli consciously used the information learned in Luke’s consultation with Tarlow & Stonecipher for tactical litigation purposes.
The majority concluded that the trial court had not abused its discretion in ordering disqualification.
Justice Beth Baker dissented
The District Court found that Mossberg’s counsel did not use or reveal information learned from the phone conversation in violation of Rule 1.20(b). The court concluded, however, that there was “no reason why the rule should not be equally applicable when an attorney uses the fact that they consulted with a party and declined to represent that party to intimidate that party or to create an adverse inference about that party’s case.” The court concluded further that “knowing that certain information was not disclosed may be just as harmful as information that was disclosed.” The District Court made no finding that Luke disclosed information that could be significantly harmful to him in the case, and acknowledged that “it is not clear what information was disclosed/learned during Luke’s 6-12 minute consultation with Weamer.” It found nonetheless that “defense counsel used the fact that a consultation even occurred against the [Keuffers] in a significantly harmful manner...
Here, Renzulli used Luke’s communication with Weamer during his deposition of Stephanie as a litigation tactic to imply that the Keuffers had a weak case. Renzulli’s questioning demonstrated a lack of professional, courteous, and civil attitude toward not only the Keuffers, but to the legal system. Renzulli’s attempt to harass and intimidate the Keuffers was out of bounds. Even though the District Court found as a matter of fact that Renzulli did not reveal any specific information that Luke divulged to Weamer, the District Court properly recognized that Luke’s communication to Tarlow & Stonecipher of “the facts” that prompted him to seek legal assistance was not to be “used” against him by counsel for the adverse party. Accord Perry, ¶¶ 29-30 (analyzing whether an attorney violated her duty of confidentiality to a prospective client). See also M. R. Prof. Cond. Preamble ¶ 18. Renzulli acknowledged that he was attempting to do just that by suggesting that the Keuffers had to shop the case around before they could find a lawyer who was willing to take it...
The interests of Renzulli’s client—about whom the Court is noticeably silent— also are entitled to consideration before disqualifying counsel of its choice. Recognizing that a party “must not be lightly separated from her counsel of choice,” we have suggested that disqualification of counsel should not be used for punitive purposes.
Justice Laurie McKinnon also dissented
In my opinion, the District Court abused its discretion in imposing the severe remedy of disqualification, particularly given that the relationship between a prospective client and a lawyer do not impose duties as stringent as between an actual and/or former client and his lawyer. Imposition of such a severe remedy as disqualification should be sparingly imposed, in light of its significant effect in disrupting litigation...Under the circumstances here, disqualification of Mossberg’s counsel was an abuse of discretion when the District Court could have simply precluded the offensive line of questioning by both Renzuilli and Tarlow & Stonecipher and thereby maintained the integrity of the proceeding. The public’s trust in the legal system in not undermined when a trial court perceives an abuse by counsel and corrects it by a fair, proportionate, and measured remedy.
Tuesday, May 31, 2016
The CEO of Blue Star Jets has lost his legal malpractice suit of claims brought against the attorneys who had handled his divorce from his first wife.
The New York Appellate Division for the First Judicial Department held that
This malpractice action arises from defendants' representation of plaintiff in a contentious divorce proceeding, and focuses primarily on the matrimonial court's purported improper valuation of plaintiff's interests in two marital assets: Blue Star Jets LLC (Blue Star) and International Star Investments Limited (ISI Ltd.). Plaintiff contends that, but for the negligence and malpractice of defendants, the court's valuation of his interest in Blue Star and ISI Ltd. would have been lower, and that he would have had to pay his ex-wife a lower distributive award.
Plaintiff failed to state a malpractice claim regarding defendants' failure to present independent expert testimony to rebut the court-appointed expert's valuation report regarding Blue Star, because the record shows that defendants' decision not to call such a witness was a strategic and reasonable one (Pouncy v Solotaroff, 100 AD3d 410, 410 [1st Dept 2012], lv denied 21 NY2d 857 ). Plaintiff also has not alleged adequately that this decision was the proximate cause of his damages (Bender Burrows & Rosenthal, LLP v Simon, 65 AD3d 499, 499 [1st Dept 2009]).
Plaintiff failed to state a malpractice claim with respect to defendants' failure to move for a reappraisal or revaluation of Blue Star and ISI Ltd., since plaintiff failed to allege adequately that such a motion would have been successful (id.), particularly given the matrimonial court's discretion in determining valuation issues (see McSparron v McSparron, 87 NY2d 275, 287 ).
Plaintiff failed to state a cause of action based on defendants' failure to move to reargue or reconsider the divorce judgment, since the decision of whether to make such a motion is a strategic one and plaintiff has not alleged adequately that such a motion would have been successful (Warshaw Burnstein Cohen Schlesinger & Kuh, LLP v Longmire, 106 AD3d 536, 536 [1st Dept 2013], lv dismissed 21 NY3d 1059 ).
The motion court correctly dismissed plaintiff's allegation that defendants failed to appeal from the divorce judgment, because the record shows that defendants informed plaintiff of his right to appeal, but that he chose not to do so in light of the cost and his minimal chance of success (Rodriguez v Fredericks, 213 AD2d 176, 177-178 [1st Dept 1995], lv denied 85 NY2d 812 ).
The motion court should have dismissed the allegations regarding defendants' failure to present "appropriate evidence" at trial to establish the correct value of plaintiff's interest in ISI Ltd. The record does not support plaintiff's allegation that defendants possessed this documentation but failed to submit it to the matrimonial court. In any event, the admission of this documentation would not have altered the matrimonial court's calculations and distributive award.
The motion court providently exercised its discretion in denying plaintiff's request for further discovery, since he failed to specify how additional discovery would enable him to state a sufficient claim with respect to the dismissed allegations (see CPLR 3211[d]; Putter v North Shore Univ. Hosp., 7 NY3d 548, 554 ).
Page Six had this story on the post -divorce litigation between the plaintiff and his ex-wife. (Mike Frisch)
Wednesday, May 25, 2016
The South Carolina Supreme Court overruled prior precedent and reinstated a legal malpractice claim that the lower court dismissed on statute of limitations grounds.
the client was an auto dealership sued by an unhappy customer who was awarded judgment.
[Client] Stokes-Craven filed a legal malpractice action against Respondents, alleging negligence and breach of fiduciary duty in trial counsel's representation of Stokes-Craven both prior to and during the trial. Specifically, Stokes-Craven alleged that trial counsel failed to: adequately investigate the facts of the case; prepare or serve written discovery; depose witnesses; obtain copies of the plaintiff's experts' curricula vitae; prepare a pretrial brief, trial exhibits, voir dire, and requests to charge; preserve certain evidentiary issues for appellate review; notify Stokes-Craven's insurance carrier about the claims; and settle the case prior to the jury verdict. Based on these purported errors, Stokes-Craven claimed the jury returned the adverse verdict. Respondents generally denied the allegations and asserted several defenses, including that Stokes-Craven's claims were barred by the expiration of the three-year statute of limitations.
The court acknowledged that its minority position articulated in the Epstein case was problematic
The facts of the instant case present us with an appropriate opportunity to address the criticism and conflict that has arisen out of our decision in Epstein. As legislatively mandated, we begin our analysis with the well-established discovery rule. Pursuant to this rule, all legal malpractice actions must be commenced within three years after the claimant knew or by the exercise of reasonable diligence should have known that he or she had a cause of action...
As evidenced by this case, the key question is when the claimant's cause of action accrues to trigger the running of the three-year statute of limitations. The answer to this question is complicated by the seemingly endless factual scenarios surrounding the underlying claim of a legal malpractice cause of action. For example, legal malpractice claims may stem from matters involving litigation or negotiated settlements while others may arise out of matters involving the probate of a will or a divorce. Further complicating the determination of when a cause of action accrues is if the claimant pursues an appeal of an unfavorable ruling, such as in the instant case.
Our decision regarding the accrual date must also take into consideration the preservation of the attorney-client relationship as well as the public policy that is fundamental to the efficient management of our judicial system. Clearly, if a client files a legal malpractice cause of action while the client is still represented by counsel during an appeal, the attorney-client relationship is compromised and there are simultaneous lawsuits advocating conflicting positions.
Here, the statute of limitations did not commence until the case was lost on appeal. Thus, the malpractice claim was timely. (Mike Frisch)
Tuesday, May 17, 2016
Dan Trevas reports a case decided today by the Ohio Supreme Court
When attorney-fee billing statements with detailed information about the tasks undertaken by a law firm representing a city are intertwined with summaries of the legal work performed, the detailed information is not a public record, the Ohio Supreme Court ruled today.
The Supreme Court voted 5-2 to affirm a Ninth District Court of Appeals decision to release redacted copies of invoices from a law firm representing Avon Lake to James E. Pietrangelo II. The records are connected to pending litigation between Avon Lake and Pietrangelo. In a per curiam decision, the Court majority reasoned that Pietrangelo may acquire information useful in his litigation strategy against the city if provided more details than what the Ninth District permitted to be released.
In a dissenting opinion, Justice Sharon L. Kennedy wrote that only the narrative summary portion of the bills describing the work the firm did can be withheld and that Pietrangelo is entitled to more information as well as damages from Avon Lake.
Detailed Information Sought
Pietrangelo requested from the city and its law director the invoices from a law firm for services it rendered concerning his lawsuit. The city provided copies of invoices with the name of the firm, the general matter for which services were provided, the date of the invoice, the total fees billed for the period, and itemized expenses.
The city redacted the remaining information on the invoices citing exemptions for attorney-client privilege and attorney-work product. The information that was redacted included narrative descriptions of the particular legal services rendered, the name of each attorney in the firm providing services along with the service provided, the time spent, the billing rate, the total number hours billed, and the total fee attributed to each attorney.
Pietrangelo filed a writ of mandamus with the Ninth District to compel the city to provide unredacted invoices and requested statutory damages and attorney fees. Pietrangelo and Avon Lake both filed for summary judgment, but the Ninth District determined it could not side with a party without more information and ordered the city to file unredacted copies of the billing statements for the judges to review under seal.
After review, in March 2015 the Ninth District concluded the city disclosed all the records not exempt from disclosure by the Ohio Public Records Act, which is R.C. 143.43, except for one portion. The Ninth District found the part of the invoice titled “professional fee summary,” that described the hours, rates, and money charged for services was not exempt. It ordered the city to provide Pietrangelo with copies of the billing statements that included the professional fee summary.
The Ninth District denied Pietrangelo’s request for the fully unredacted records plus damages and attorney fees. He appealed to the Supreme Court, which agreed to hear the case.
Extent of Attorney-Client Privilege at Issue
Citing its 2011 State ex rel. Dawson v. Bloom-Carroll Local School Dist. decision, the Court’s opinion explains that narrative portions of itemized attorney billing statements containing descriptions of legal services are protected by attorney-client privilege and are not public records.
Pietrangelo argued that based on the Court’s 2012 State ex rel. Anderson v. Vermillion decision he is entitled to all the dates legal services were performed along with the hours and rates of services, which is more than what is provided in the professional fee summary. The Court in Anderson stated that “the general title of the matter being handled, the dates services were performed, and the hours, rates and money charged for the services,” on an attorney billing statement need to be disclosed.
The Court explained that Anderson was the former mayor of Vermillion and was seeking the billing statements regarding the legal services provided to the new mayor. His entire request was denied. The Court ordered Vermillion to turn over all of the billing statements, ruling only the narrative portions were exempt from the public records act by attorney-client privilege.
Avon Lake argued the situation with Pietrangelo is similar to the Dawson case where a parent sought billing statements for legal services provided to the school district regarding pending litigation between the district, the parent and her children. The district provided summaries with the attorney’s name, invoice total, and the matter involved, but withheld the actual invoices because they contained confidential information.
The Court allowed the district to withhold the invoices because the information in the invoices was “either covered by attorney-client privilege or so inextricably intertwined with privileged materials as to also be exempt from disclosure.”
“Like Dawson, the records that Pietrangelo seeks relate to the pending litigation between the parties. If disclosed, Pietrangelo may acquire information that would be useful in his litigation strategy against the city, whereas in Anderson, any harm from disclosure of attorney-client communication was remote and speculative,” the Court stated. “To the extent that Pietrangelo requests the dates, hours, and rates not identified in the professional-fee summary, they are inextricably intertwined with the narratives of services that are privileged materials. Such information is exempt from disclosure.”
Pietrangelo also sought $1,000 in statutory damages and attorney fees because the Ninth District found the city did not fully comply with the public records law. The Court affirmed the Ninth District’s denial of Pietrangelo’s request because Avon Lake reasonably believed it was entitled to withhold the information it did.
Chief Justice Maureen O’Connor and Justices Paul E. Pfeifer, Terrence O’Donnell, Judith Ann Lanzinger, and William M. O’Neill joined the opinion.
More Disclosure Required, Dissent Maintains
In her dissent, Justice Kennedy stated she would order the redaction of only the narrative services information and release all the other information on the billing statements to Pietrangelo in accordance with the Ohio Public Records Act.
She further disagreed with the majority’s conclusion that the relevant distinction between Dawson and Anderson regarding what information is subject to disclosure is whether litigation is pending between the record requestor and the government entity. Instead, Justice Kennedy wrote that the fact the records requestor is involved in litigation against the government body should have no bearing on whether the records are public.
“Whether a public-records requestor and a government entity are engaged in litigation is irrelevant to the question of whether the information in an itemized attorney-fee billing statement is privileged and exempt from disclosure. Instead, our case law mandates the proper focus is on the information sought and whether that information is privileged,” she wrote.
The relevant distinction between the two cases was that the school board in Dawson reduced the nonexempt information to a summary and released it, whereas the city in Anderson denied the request and failed to provide an alternative record.
Justice Kennedy recognized that the narrative portions of a billing statement containing descriptions of legal service are protected by the attorney-client privilege and not subject to disclosure. She explained that the billing statements at issue contain summary information on the first two pages, and that all subsequent pages contain four independent columns divided into the categories of date, name, services, and hours. Each billing statement concluded with the total number of hours invoiced, a professional fee summary, disbursements and expenses, and a total invoice amount.
She wrote the majority’s reliance upon Dawson to conclude that the date, name, and hours information was inextricably intertwined with the narrative of the services was disingenuous. She noted that Dawson offered little discussion of how the billing statements were constituted, whereas the format used in the statements to Avon Lake separated the information about the attorneys providing the services and the hours billed so that they “are not intertwined with the narrative services column.”
Justice Kennedy reasoned that the ability to redact the narrative services column mandated all remaining portions of the billing statements be released. By affirming the appellate court's decision not to release the remaining non-exempt portions of the billing statements the majority created a new “redundancy” exemption not authorized by the General Assembly she concluded.
Justice Kennedy would have also granted Pietrangelo damages because after Anderson decision it should have been clear to Avon Lake what information in a billing statement was privileged and what must be disclosed.
“Subsequently, no well-informed public office could reasonably believe that any portion of an attorney-fee billing statement, other than the narrative description of the legal services performed, is subject to redaction,” she wrote.
Justice Judith L. French joined the dissent.
Sunday, May 15, 2016
Counsel for a hedge fund may be liable to investors for losses based on assurances provided by them, according to a recent opinion of the New York Appellate Division for the First Judicial Department
The evidence shows that plaintiffs requested a letter from defendants, who were outside counsel to a hedge fund in which plaintiffs had invested, regarding the implications of certain Security and Exchange Commission (SEC) inquiries into the fund. Defendants responded with a letter, addressed to plaintiffs, specifically answering plaintiffs' questions by characterizing the SEC inquiry as part of a new routine the SEC would be following under the newly passed Dodd-Frank legislation. Plaintiffs allege that, based upon defendants' assurances, they did not withdraw their investment in the fund. About a year after receiving the letter, the SEC instituted administrative cease and desist proceedings against the fund's managers, and the SEC ultimately prevailed in the proceedings. Plaintiffs allege that they lost their entire investment as a result of their reliance on defendants' false and misleading statements. Under the circumstances, plaintiffs adequately pleaded and showed the required "privity-like" relationship for their negligent misrepresentation claim (J.A.O. Acquisition Corp. v Stavitsky, 8 NY3d 144, 148 ; see Prudential Ins. Co. of Am. v Dewey, Ballantine, Bushby, Palmer & Wood, 80 NY2d 377, 382-385 ).
Defendants are correct that this Court can affirm on alternative bases argued to, but not reached by, the motion court (Nickerson v Volt Delta Resources, 211 AD2d 512, 512 [1st Dept 1995], lv dismissed in part and denied in part 86 NY2d 860 ), and that they cured their improper submission of the attorney defendant's affirmation by submitting the same affirmation in affidavit form on reply (see Berkman Bottger & Rodd, LLP v Moriarty, 58 AD3d 539, 539 [1st Dept 2009]). Nevertheless, they are not entitled to dismissal of the complaint. Plaintiffs adequately pleaded the other elements of their negligence claim, and defendants failed to establish as a matter of law that there were no false statements in the letter, that plaintiffs' reliance on defendants' statements was unreasonable, or that the alleged false statements did not proximately cause plaintiffs' alleged losses (see generally J.A.O. Acquisition Corp., 8 NY3d at 148).
Thursday, May 12, 2016
The Washington State Court of Appeals has held that a trial court exceeded its authority in reducing an award of wages to a former in-house counsel
Following a month-long jury trial, attorney Geoffrey Chism was awarded $750,000 for breach of two compensation contracts by his former employer, Tri-State Construction, Inc., and exemplary damages for unlawful wage withholding. The trial court then dramatically reduced Chism's recovery, premised on findings that Chism violated Washington's Rules of Professional Conduct (RPCs) during his time as Tri-State's in-house general counsel. By ordering disgorgement of Chism's wages based on novel interpretations of several RPCs, the trial court exceeded the disciplinary authority delegated to it by our Supreme Court. Moreover, the trial court disregarded the strong legislative policy preference in favor of payment of earned wages by failing to even acknowledge that, unsupported by precedent, it was ordering disgorgement of an attorney's wages, as opposed to an attorney's fee. Accordingly, we reverse the trial court's challenged rulings and remand the cause for entry of judgment consistent with the jury's verdict.
The question presented arises at the intersection of judicial power over the practice of law and legislative power over the conditions of employment. Our Supreme Court has offered some guidance about resolving such situations, stating, "While we should jealously protect our prerogatives, if the legislative power is not limited by the constitution, it should be unrestrained." Demopolis, 103 Wn.2d at 65. As previously stated, in the area of attorney wages, the Supreme Court has taken no action, but the legislature has enacted a broad policy in favor of the payment of employee wages. Given this stark contrast, we defer to the strong legislative policy in this area.
This conclusion is consequential for how we view the application of the disgorgement sanction to attorney wages. As has been described, disgorgement does not require proof of either causation or damage, only misconduct. This is unlike other, related claims, including breach of fiduciary duty and restitution, both of which require such proof. Because there is no standard measure for a disgorgement order, nor a requirement that it be imposed as a compensatory measure, it poses a significant threat to the legislative policy in favor of the consistent payment of employee wages.
This threat is illustrated by the trial court's order in this case. Herein, Tri-State chose to pursue only disgorgement from Chism, not a separate claim for damages or restitution. Accordingly, Tri-State was never required to prove that it suffered any injury as a result of Chism's alleged misconduct. Nevertheless, the trial court ordered Chism to disgorge $550,000 in wages (plus another $550,000 in exemplary damages for wage withholding).
The trial court exceeded its disciplinary authority by ordering Chism to disgorge a significant portion of the wages otherwise owed to him without either acknowledging that itwas disgorging wages, not fees, or accounting for the strong legislative preference in favor of employers paying earned employee wages. Therefore, the trial court's order was improper as a matter of law.
Thanks to Alan Kabat for sending this opinion to us. (Mike Frisch)