Thursday, March 10, 2016
The Mississippi Supreme Court reversed the grant of summary judgment to defendants in a legal malpractice claim arising out of a conservatorship and estate matter.
The plaintiff ("Bobby") is the spouse of the decedent ("Debbie") , whose brother ("Michael") served as her conservator. .Michael spent nearly all the funds that she had prior to her death and failed to file an inventory.
When Debbie died, it is alleged
Following Debbie’s passing, [attorney] Montgomery summoned Bobby and others to a meeting at the offices of WWM to discuss Debbie’s estate. At the meeting, Montgomery informed Bobby that he was the only “interested party” who had not signed the combined probate proceeding petition” and that, if he signed the combined petition, he would receive “big money,” but if he did not sign, the estate would sell certain guns which had sentimental value to Bobby. Montgomery also informed Bobby that Debbie’s estate lacked sufficient assets to fund a $50,000 legacy to Bobby’s grandson, and that Bobby should contribute $50,000 of the proceeds he received as beneficiary of Debbie’s $400,000 life-insurance policy. The unpaid bequest to Bobby’s grandson was the only one that had not already been satisfied. Further, Montgomery promised Bobby that, in exchange for contributing the $50,000 from his life insurance proceeds, he would give Bobby the guns, which were valued at only $14,468.48, but had high sentimental value to Bobby.
As a result of Montgomery’s representations, Bobby signed the combined petition, which designated him as a “Petitioner.” Montgomery signed the petition as an “Attorney for Petitioners.” At the time he signed the petition, Bobby was not told that Debbie’s estate had been significantly depleted by Michael’s expenditures as conservator, and Montgomery did not inform him that, by signing the petition, he would be waiving his rights to contest and to renounce Debbie’s will and receive a child’s share of the estate.
Throughout the estate proceedings, Bobby did not challenge any distributions made pursuant to the will, the status of Debbie’s estate, or the actions of the conservator, executor, or Montgomery.
The court rejected res judicata grounds for summary judgment
Montgomery and WWM argue that, because Bobby asserted a similar factual account in his Petition to Re-open Debbie’s estate, res judicata precludes him from litigating his legal-malpractice action which is predicated on the same facts. Bobby indeed alleges almost identical facts in both his Petition to Re-open and his Complaint, and this Court reasonably could conclude that the two actions contain the same “identity of the subject matter of the action.”
The “identity of the cause of action,” however, is absent. In his Petition to Re-open, Bobby merely asked that the estate proceedings be reopened to further investigate alleged wrongful conduct and specifically requested relief through the creation of a constructive trust, injunctive relief, and an accounting of the conservatorship and estate. Importantly, within the petition to reopen, Bobby did not assert any legal-malpractice or fiduciary-duty claims. In other words, Bobby sought relief solely within the context of the estate. Conversely, in his legal-malpractice complaint, Bobby specifically alleged claims (including fiduciary-duty claims)—arguing duty, breach, and causation—against Montgomery and WWM, and he requested relief in the form of damages—both actual and punitive.
On the merits
this Court has held that fiduciary relationships can arise in a variety of contexts, and that relationships between attorneys and third parties can give rise to a fiduciary relationship—and the requisite fiduciary duties—despite the absence of an actual “attorney-client” relationship. Accordingly, the general rule in Mississippi is that, under certain facts and circumstances, attorneys can acquire fiduciary obligations to third parties who are not their clients where no attorney-client relationship is present. Fiduciary relationships often turn on questions of fact related to exertion of influence, whether the reliance was justified.
In other words, while it is true that we have never held—and we do not hold today—that attorneys for estates always owe fiduciary duties to every estate beneficiary, we see no reason to carve out a rule of special protection for estate attorneys, exempting them from any beneficiary claim of a fiduciary relationship. An attorney for the estate may, under certain circumstances, owe fiduciary duties to a beneficiary of the estate based on the same considerations relevant to determine fiduciary duties to all third parties. The existence of these fiduciary relationships are questions to be determined in the trial court, and here, we believe sufficient evidence exists in the record for a factfinder to conclude that Montgomery owed Bobby fiduciary duties, even without a finding of an attorney-client relationship...
And, should the trial court find that Montgomery assumed fiduciary duties to Bobby, we also find that—viewing the facts and allegations in the light most favorable to
Bobby—Montgomery allegedly induced Bobby into signing a petition without first informing him of the consequences. This, in effect, caused Bobby to waive his statutory rights to contest and renounce Debbie’s will. Montgomery approached Bobby under circumstances which, if not enough to create an attorney-client relationship, could support an inference of dependence and trust, as Montgomery purported to have Bobby’s interests in mind and to exercise control over Debbie’s estate. There is evidence in the record to support Bobby’s claim that Montgomery coerced or compelled him to deduct $50,000 of life-insurance proceeds to fund a bequest in Debbie’s will. These acts, if true—and assuming a fiduciary relationship is found to have existed—would constitute a breach of that fiduciary duty. So genuine issues of material fact remain regarding Bobby’s fiduciary-duty claims.
To be clear, we do not address today the duties of attorneys who represent executors and administrators of estates. Montgomery claims he was the attorney for the estate and not for the executor of the estate. In thirty filings with the trial court, Montgomery was either listed as or signed as the “attorney for the Estate.”
Saturday, March 5, 2016
The Kentucky Supreme Court recently held that sanctions imposed against attorneys who provided services but did not sign pleadings as part of a limited scope representation could not stand.
Sarah Jackson and David Thomas, of Owensboro, individually retained Appellants Persels & Associates, LLC (“Persels”) to defend them in their debt collection cases that were pending before the Daviess Circuit Court. Persels is a national law firm organized in Maryland and engaged primarily in unsecured debt collection cases such as credit card debt. Here, Persels attempted to negotiate with the credit card companies on behalf of its clients. To assist in negotiations, Persels retained Kentucky attorneys K. David Bradley of Salt Lick, Kentucky, and Robert Gillispie of Leesburg, Virginia, to provide limited representation. Mr. Bradley was assigned to “assist” Sarah Jackson; and Mr. Gillispie was assigned to “assist” David Thomas.
The terms of Jackson's and Thomas's limited-representation agreements with Persels were confined to drafting and consultation services. The agreements specifically provided that neither Kentucky lawyer was required to sign pleadings, enter an appearance, or attend court proceedings. Therefore, it appears that the defendants were nominally pro se. They either signed the documents that were prepared for them, or were at least instructed to do so by counsel. In 2011, however, the Daviess Circuit Court ordered Attorneys Bradley and Gillispie to appear and show cause as to why they should not be held in contempt for their failure to enter their appearances and sign documents filed with the court. The trial court consolidated the two cases and permitted Persels to intervene as a third party respondent.
Sanctions under Kentucky's Rule 11 were imposed and affirmed by the Court of Appeals.
The rationale behind CR 11 is to regulate the litigation process so that pleadings are valid for everyone – indigent or not. Second, pro se clients, indigent or not, must follow the rules of civil procedure, too. Unfortunately, the solution for providing legal service for indigent clients is much broader and more complex than this case. Undoubtedly, a decision to authorize limited representation through unbundled legal services in Kentucky would likely necessitate a review of the rules of practice, and perhaps, amendments to the civil rules. Such a course of action is not impeded or prevented by the actions of the Daviess Circuit Court in enforcing CR 11.
In conclusion, the trial court was not clearly erroneous in its findings nor did it abuse its discretion in the imposition of its sanction. In sum, we concur with the legal reasoning of the trial court and hold that pleadings prepared with the assistance of an attorney in the Commonwealth must be signed by the attorney.
The court here disagreed and considered the policy implications of limited scope representation agreements.
Kentucky Supreme Court Rule (“SCR”) 3.130 (Rule 1.2) governs the scope of representation and allocation of authority between client and lawyer. It provides in part: “A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent.” SCR 3.130(1.2)(c). Comment 6 further defines the nature and scope of limited representation agreements and provides in part:
A limited representation may be appropriate because the client has limited objectives for the representation. In addition, the terms upon which representation is undertaken may exclude specific means that might otherwise be used to accomplish the client's objectives. Such limitations may exclude actions that the client thinks are too costly or that the lawyer regards as repugnant or imprudent...
There is a significant portion of the population comprised of individuals who are not indigent yet do not possess the means to afford full and rigorous representation of counsel. See Cristina L. Underwood, Comment, Balancing Consumer Interests in a Digital Age: A New Approach to Regulating the Unauthorized Practice of Law, 79 Wash. L.Rev. 437, 442 (2004) (“Many low- and moderate-income households simply cannot afford the cost of personal legal services.”). Indeed, “[s]ubstantial evidence indicates the existence of a latent marketplace for personal civil legal services to those of low and moderate incomes.” Accordingly, many of our citizens cannot afford the full breadth of legal representation but are nevertheless in need of representation of some degree.
We encourage lawyers to take on cases that service the less fortunate.
The image of our profession is enhanced by these admirable efforts. Therefore, it is clear that limited-representation agreements are necessary to some extent. However, we acknowledge that these types of arrangements may be abused to the detriment of the litigants and the courts.
These policy concerns lead to this conclusion
In keeping with the letter and spirit of SCR 3.130 (Rule 1.2) and its accompanying commentary, we authorize agreements that limit the scope of legal assistance or that limit representation to discrete legal tasks, so long as they are reasonable under the circumstances and the client gives informed consent. See Rochelle Klempner, Unbundled Legal Services in New York State Litigated Matters: A Proposal to Test the Efficacy Through Law School Clinics, 30 N.Y.U. Rev. L. & Soc. Change 653, 654 (2006). This includes limitations on services provided in furtherance of traditional litigation as well as alternative dispute resolution methods.
Agreements that limit representation to distinct stages of litigation may also be reasonable under the circumstances. The monumental increase in pro se and nominal pro se domestic filings provides a particularly apt example of the need for this unique type of limited-representation. For instance, family law practitioners may provide comprehensive representation during property division proceedings but not provide representation in any form during child custody proceedings, or vice versa. However, these types of agreements must be carefully tailored to avoid abuse and confusion from the perspective of the client and the court.
To clarify, in addition to being reasonable under the circumstances, all agreements which limit representation must be in writing, require the informed consent of the client(s), and must comport with our rules, including the rules of professional conduct.
However, we do not adopt a strict rule requiring drafting attorneys to sign the documents they prepare pursuant to limited-representation agreements. An attorney involved in the preparation of initial pleadings (complaint, answer, cross-claims and counter-claims), must indicate that the document has been prepared by or with the assistance of counsel by providing “Prepared By or With Assistance of Counsel” on the document concerned. See Bhojani, 65 SMU L.Rev. at 680 (“since the court is not being misled as to the fact of the drafting assistance, the attorney is not violating the duty of candor and not deceiving the court.”). Of course, in cases where there is one or more attorneys of record, at least one attorney of record must sign documents presented to the court and provide their address in accordance with CR 11. Pro se litigants must also satisfy the signature and address requirements of CR 11.
Furthermore, active assistance by counsel must be disclosed to the presiding tribunal and adversaries. Active assistance includes drafting documents in furtherance of litigation that extend beyond initial pleadings. Notice of active assistance shall include the name, address, and telephone number of the attorney(s) working on the case, and the nature of the limited representation agreement at issue. However, such disclosures do not constitute an appearance by counsel, nor do they require the drafting attorney to appear in court on behalf of the litigant receiving limited representation unless the court or the surrounding circumstances dictate otherwise. For example, cases involving expedited or emergency relief may justify comprehensive representation, or at least a limited appearance of counsel, for the purpose of resolving the expedited matter.
In all cases, attorneys providing limited-representation are required to adequately investigate the facts to ensure that the pleadings or other documents drafted in furtherance of litigation are tendered in good faith. See Rule 3.1. Moreover, attorneys providing limited-representation of any kind may not deceptively engage in a more complete role. See Rule 8.4.
Lastly, limited representation does not require proof of indigence. Although the financial means of litigants pursuing limited-representation may be considered by courts as relevant to the overall reasonableness of the agreement, a litigant's financial status is not a dispositive factor. On this issue, deference should be afforded in favor of the litigant seeking limited representation.
...whether the agreement is reasonable also goes to the question whether it is ethical And because it is an agreement entered into by an attorney, if it is unreasonable, for example as to the fees charged, then the attorney may have committed an ethical violation by negotiating an unreasonable contract with his client. Certainly, if a trial court becomes aware of such unreasonable aspects of a limited-representation agreement, then the court has a duty to file a bar complaint against the offending attorney, as does opposing counsel who may become aware of the situation. Indeed, the party to the agreement may do likewise. But collateral contract disputes or ethical violations are not proper issues for a trial court to address with CR 11 sanctions merely because a pleading is not signed by the attorney who drafted the document.
To clarify, we do not limit the authority of courts to impose other appropriate remedies that are necessary to maintain order and the integrity of the legal profession. For example, if the court determines that a limited representation agreement is unreasonable, the court may order counsel to cease providing legal assistance of any kind to the client. If an attorney continues to provide legal assistance for a client in violation of the court's order, the court may exercise its contempt authority in order to enforce its order.
The court remanded for a hearing on the reasonableness of the limited scope representation of the clients.
This is a decision of potential significance. (Mike Frisch)
Thursday, January 7, 2016
Georgetown Law's Center for the Study of the Legal Profession has an announcement of a significant report
Law firm leaders need to make bold, proactive changes in how legal services are delivered if firms are to thrive in the rapidly changing legal marketplace. That is among the findings of the “2016 Report on the State of the Legal Market” just issued by the Center for the Study of the Legal Profession at Georgetown University Law Center and Thomson Reuters Peer Monitor.
Two thousand fifteen saw a sixth consecutive year of largely flat demand, weakening pricing power and falling productivity. The report notes that since 2008, the law firm market “has changed in significant and fundamental ways.” Clients have assumed active control of the organization, staffing, scheduling and pricing of legal matters, where previously they had largely left those decisions in the hands of law firms. In addition, competitors such as alternative legal services providers, accounting firms and consultants, continue to grow market share.
The report suggests that law firms need to shift their focus from growth to market differentiation and profitability. But resistance to change can make it difficult for firms to adopt new strategies such as redesigning work processes, adopting new staffing models or setting new pricing strategies. In addition, many firms are locked into a “billable hour mentality” that inhibits creative alternate approaches to the delivery of legal services.
The report is jointly issued on an annual basis by the Center for the Study of the Legal Profession at Georgetown University Law Center and Thomson Reuters Peer Monitor and reviews the performance of U.S. law firms and considers the changed market realities that drive the need for firms to take a longer-range and more strategic view of their market positions going forward.
“Fundamental shifts such as we have seen in the market for law firm services since 2008 require firms to take a hard look at the long-term viability of operating and pricing models that have worked well in the past but may be at risk in the newly developing market environment,” said James W. Jones, a senior fellow at the Center for the Study of the Legal Profession and one of the report's authors. “Firms that are able to redesign their models to better respond to the changing demands and expectations of their clients will have a substantial long-term competitive advantage.”
“A ‘buyer’s market’ for legal services is bringing increasing demands from clients, more nimble and leaner competitors and greater pressures for efficiency,” said Mike Abbott, vice president, Client Management & Global Thought Leadership, Thomson Reuters. “The good news is that some firms are already making strategic changes and performing strongly. The imperative is for firms to identify the best strategy for adapting to the rapidly evolving marketplace, given their unique strengths, talent, geographies and other assets.”
The “2016 Report on the State of the Legal Market” can be downloaded here.
Tuesday, November 17, 2015
Samuel Levine of Touro Law Center has announced that the winners have been selected for the sixth annual Fred C. Zacharias Memorial Prize for Scholarship in Professional Responsibility. The Prize will be awarded to Elizabeth Chamblee Burch, for her article Judging Multidistrict Litigation, 90 NYU L. Rev. 71 (2015), and Morris A. Ratner, for Class Counsel as Litigation Funders, 28 Geo. J. Legal Ethics 271 (2015). The Prize will be awarded at the AALS Annual Meeting in New York in January. Congrats! (Alan Childress)
Monday, October 19, 2015
An attorney for a bank that had initiated foreclosure proceedings against a homeowner was entitled to summary judgment when sued by the opposing party, according to a decision of the Louisiana Supreme Court.
We granted certiorari to determine whether private attorneys for a lender which improperly seized a home are entitled to judgment as a matter of law on the ground their actions did not violate 42 U.S.C. § 1983. For the reasons that follow, we find the district court properly granted summary judgment, and the court of appeal erred in reversing that judgment.
we find no unconstitutional seizure of Ms. Smith’s property occurred. Rather, she was given sufficient opportunity to contest the actual seizure of her property. This conclusion is supported by the fact that Ms. Smith successfully obtain an injunction to prevent the seizure of her property.
Ms. Smith contends Dean Morris acted recklessly in proceeding with the executory process after she sent a letter to Saxon (which was ultimately forwarded to Dean Morris) advising that the executory foreclosure was not properly supported. We acknowledge the mortgage was not in authentic form due to the absence of witnesses during the execution of the mortgage. However, as explained by the district court, the physical absence of a witness in the execution of the act of mortgage is a latent defect which is not chargeable to the attorney petitioning for executory process.
Louisiana subscribes to the traditional, majority view that an attorney does not owe a legal duty to his client's adversary when acting on his client's behalf. Penalber v. Blount, 550 So.2d 577, 581 (La. 1989). A non-client, therefore, generally cannot hold his adversary's attorney personally liable for either malpractice or negligent breach of a professional obligation. Id. However, intentionally tortious actions, ostensibly performed for a client's benefit, will not shroud an attorneywith immunity. Id.
There is no evidence Dean Morris acted with specific intent to harm Ms. Smith. At most, its actions were negligent. Under the clear language of Penalber, such negligence is not sufficient to make an attorney liable to a non-client such as Ms. Smith.
In summary, we conclude Ms. Smith has failed to produce any evidence supporting her conclusion that Dean Morris violated her constitutional rights in violation of section 1983. At most, Ms. Smith has shown Dean Morris misused the executory process provisions. Such allegations are insufficient to support an action against private attorneys under the parameters set forth in Lugar v. Edmonston Oil Co., 457 U.S. 922 (1982).
Wednesday, July 22, 2015
There had been bad blood between the judge and petitioner's counsel such that, as a matter of tactics, another member of counsel's firm handled a second trial,
The alleged hostility arose in an unrelated Engle case wherein the judge issued a fifteen-page order granting a motion for new trial based largely on counsel’s courtroom behavior.
Within that order the judge detailed the attorney’s conduct characterizing it as misleading and a fraud on the court. The hostility between the two carried over into proceedings concerning the judge’s nomination for appointment to the federal bench. The judge furnished the nominating committee a copy of the order as a writing sample. Thereafter, the attorney sent the committee a letter challenging the facts contained in the order and questioning the judge’s suitability for appointment to the federal bench. Following the judge’s unsuccessful nomination, petitioner and other Engle plaintiffs represented by the attorney and his firm moved to disqualify the judge. The judge denied the motion, and we denied the prior prohibition petition.
But an issue arose when counsel attended closing arguments
The events surrounding this second motion arose after the attorney was present in the courtroom to observe a portion of a firm member’s closing arguments and after the jury returned its verdict. According to petitioner, she and her trial counsel approached the bench to thank the judge. Petitioner alleges that as the two were walking away from the bench, the judge commented that she had seen the attorney in the courtroom and that she would “never forgive him for what he did to me.” Petitioner alleged that it appeared to her that the judge was “highly emotional and on the verge of tears as she said this.”
Petitioner alleged that while she was previously aware of the issues between the judge and her attorney, she did not appreciate “the depth of the hostility or how deeply hurt the judge was by [counsel’s] active opposition to her quest for a federal judgeship.” Petitioner’s trial attorney, who was present at the bench with petitioner, furnished an affidavit echoing petitioner’s representation of the judge’s comments and adding that the judge said she “will never forget what he did. I will never forgive him and I took it personally. It was very hurtful and it made me cry.” Counsel added that the judge told him that he could communicate that sentiment to the attorney...
Accepting the allegations within the motion and affidavits as true, we conclude that the judge’s alleged inability to restrain either her utterances or her emotions in front of the petitioner would, if true, show that the experience profoundly affected her and made her future impartiality reasonably suspect. The source of this prejudice is personal and unrelated to petitioner’s case and trial counsel’s conduct therein. See, e.g., Lamendola v. Grossman, 439 So. 2d 960 (Fla. 3d DCA 1983). Though we previously concluded that any hostility arising from the events of the judicial nominating process did not warrant disqualification, the judge allegedly opened the door and displayed the depth of such hostility by failing to remain silent despite the passage of time.
Based on the foregoing, we conclude that a reasonably prudent person would be in fear of not receiving fair and impartial judicial review of the pending matters.
Sunday, May 31, 2015
The Montana Supreme Court has reversed and remanded with spoilation sanctions a verdict in favor of defendant BNSF Railway based on its failure to preserve a video of the accident of an employee plaintiff.
BNSF is a seasoned and sophisticated corporate litigant well aware of its obligations when responding to workplace violations and employee injuries and accidents. These obligations include the retention of evidence relevant to injury claims. In this case, BNSF supervisors took immediate action within minutes of Spotted Horse’s alleged accident. While Price drove Spotted Horse to the hospital for medical treatment, BNSF supervisors began gathering and analyzing information related to the incident. Within hours of the alleged accident, according to testimony, three individuals viewed a brief portion of the video footage from one camera in the shop stall where Spotted Horse and Syverson were apparently working. And yet–inexplicably–this and other video footage from the shop was not retained...
We reject the notion that BNSF is entitled to unilaterally determine which evidence is relevant or valuable when investigating an alleged work-related accident preceding litigation. Such a decision must be left to the trial court.
Justice Wheat would order default
I agree with the Court’s decision to reverse the judgment of the District Court and to order more serious spoliation sanctions against BNSF on remand. I would, however, remand to the District Court with an instruction to enter default judgment, because the audacity of the spoliation in this case warrants more than a mere negative inference in favor of Spotted Horse...
Montana courts should not shrink from granting default judgment where, as here, spoliation is willful, in bad faith, or knowingly committed in order to obscure the truth and to prevent accurate decision making. By failing to take such action when it is warranted, we fail the spoliation victim and our system of justice, while at the same time rewarding the spoliator with the result he or she sought: an advantage in litigation. By failing to take such action, we set the stage with perverse incentives and encourage further spoliation. Until we are willing to respond with sanctions commensurate to the damage caused by intentional spoliation – that is, with default judgment – the reward from destroying evidence will continue to outweigh the risk.
Justice McKinnon dissented and would affirm the trial court's exercise of discretion. (Mike Frisch)
Monday, May 11, 2015
The case was described in this post by Alyson Palmer of the Daily Report
As recounted in briefs for both sides, the advertisement said the government had cited a nursing facility, Heritage Healthcare of Toccoa, "for failing to assist those residents who need total help with eating/drinking, grooming and personal and oral hygiene." The ad rhetorically asked whether readers' loved ones had suffered bedsores, broken bones, unexplained injuries or death. Providing the firm's contact information, the ad invited anyone concerned that a loved one was being "neglected or abused" at the facility to call McHugh Fuller.
The day after the ad ran, the owner of the facility, PruittHealth-Toccoa, sued the law firm in the Mountain Circuit Superior Court. Beside citing Georgia legal ethics rules on advertising and contacting prospective clients, the complaint alleged the ad had violated Georgia's version of the Uniform Deceptive Trade Practices Act because it was false and misleading. The nursing home company initially requested damages but later amended its complaint to seek only injunctive relief.
Superior Court Judge B. Chan Caudell promptly granted PruittHealth's request for a temporary restraining order prohibiting the law firm from running similar advertisements, then set the case for a hearing a little less than a month later.
In its defense, the firm pointed to a 2012 inspection report by the Department of Health and Human Services' Centers for Medicare & Medicaid Services. That report listed multiple deficiencies at the site under the heading "Assist those residents who need total help with eating/drinking, grooming and personal and oral hygiene." In particular, the document referred to one resident not having access to mouthwash in her room and another resident's long, dirty fingernails.
At the close of the hearing, Caudell found the ad was misleading and deceptive because it said the nursing facility had been cited "for failing to assist" residents in certain areas, while the government report did not use that "failing to" language in its report. He later issued a written order prohibiting McHugh Fuller from publishing or causing the ad to be published in the future and giving the firm 20 days to make sure any electronic posting of the ad by the newspaper was removed.
The law firm appealed to the Georgia Supreme Court, raising several arguments. The firm says that Caudell abused his discretion in finding the ad false and misleading. But the law firm also raises a procedural argument, saying it didn't have advance notice that the judge was going to make a final decision in the case based on the May 2014 hearing. McHugh Fuller later filed a separate appeal complaining that Caudell had excluded from the appellate record materials that the law firm thought should be included.
The court found that the trial court had erred in granting a permanent injunction without clear notice to the law firm that such an order was contemplated. (Mike Frisch)
Friday, April 17, 2015
The Nebraska Supreme Court overturned the grant of a new trial to the plaintiff in a legal malpractice case and reinstated the verdict in favor of the defendant law firm.
Thomas Balames, filed this legal malpractice action against Robert Ginn and Brashear LLP, formerly known as Brashear and Ginn (collectively Ginn), the firm where Ginn practiced when the alleged malpractice occurred. Balames brings this action for himself and three other individuals for whom he serves as attorney in fact (collectively Balames). Balames claimed that Ginn negligently failed to obtain signatures on a guaranty for a loan that Balames made to a third party and failed to inform Balames of the missing signatures. When the third party defaulted, Balames could not obtain a judgment against the individuals who were the intended guarantors for the full amount of the third party’s obligation. The jury returned a general verdict for Ginn, but the court granted Balames a new trial.
The client sought to complete the transaction while the attorney was on vacation. The client had not previously advised the attorney that the situation was urgent and terminated his services shortly thereafter.
[Client] Balames admitted to being pressured by his bank to complete the transaction, and he insisted upon getting the documents to the bank as soon as humanly possible. [Attorney] Ginn’s evidence supported a reasonable inference that because Balames and his business associates had personally guaranteed the loan, they had an immediate need to show the bank that they had renegotiated the debt with Banopu. The crucial point here is that a client has the ultimate authority to determine the objective of a legal representation. Of course, an attorney should make reasonable efforts to explain the legal consequences of a course of conduct that a client insists upon taking. Yet, evidence regarding Ginn’s advisement raised a question of fact whether Ginn had breached a duty of care. That is, if the jury determined that Balames insisted upon closing without Ginn’s review, whether Ginn’s advisements were sufficient to inform Balames of the potential consequences was a question of fact.
The jury verdict sufficiently dealt with the issues
When the jury returns a general verdict for one party, a court presumes that the jury found for the successful party on all issues raised by that party and presented to the jury, particularly when the opposing party did not ask the court to give the jury a special verdict form or require the jury to make special findings. This is true both for Ginn’s failure-of-proof defense and his statute of limitations defense which barred Balames’ recovery even if he proved his malpractice claim. Because the court erred in concluding that plain error permeated the trial, this presumption controlled...
If the jury believed Ginn’s version of the facts, then Ginn did not breach a duty to ensure that the documents were signed before or after the closing. Instead, Balames’ injury was caused by his failure to follow Ginn’s advice, his failure to review the documents for the required signatures, and his misrepresentation to Ginn that the documents were signed.
Thursday, April 9, 2015
From the Indiana Supreme Court
The law firm Cohen & Malad, LLP ("C & M"), filed a quantum meruit claim for part of the contingent fees earned in cases that were handled first by C & M attorneys (including John P. Daly, Jr., when employed there as an associate) and later by Daly and his law firm after he left C & M. The trial court found that C & M attorneys – including Daly while employed there – worked a substantial number of hours on those cases and that most of those cases generated attorney fees. The court nevertheless denied C & M quantum meruit relief because it found Daly was not unjustly enriched where: (1) the client in each case at issue chose to continue with Daly when he left C & M, (2) C & M and Daly had no agreement about what would happen if they parted ways, (3) their employment agreement had no provision for file ownership and lacked a non-competition covenant, and (4) C & M made a "very shrewd deal" for Daly’s services when it employed him on a salary basis, and C & M was "very well compensated" for Daly’s time at C & M, as shown by the amount of fees Daly helped C & M generate on other cases while he worked there. (App. at 32-33.) C & M appealed. Citing the four enumerated findings above, the Court of Appeals affirmed, over Judge Crone’s dissent. Cohen & Malad, LLP v. Daly, 17 N.E.3d 940 (Ind. Ct. App. 2014). We grant transfer.
Absent agreement otherwise, "a lawyer retained under a contingent fee contract but discharged prior to the contingency is entitled to recover the value of services rendered if there is a subsequent settlement or award[,]" and in that case, "the fee is to be measured by the proportion of the total fee equal to the contribution of the discharged lawyer’s efforts to the ultimate result[.]" Galanis v. Lyons & Truitt, 715 N.E.2d 858, 860 (Ind. 1999). The trial court’s findings of fact and conclusions of law do not acknowledge Galanis or apply its standards. Accordingly, we reverse and remand with instructions to determine, in accordance with Galanis, what proportional contributions toward the results in the cases at issue were made by attorneys working for C & M, and to enter a corresponding judgment in C & M’s favor. We summarily affirm the part of the Court of Appeals opinion addressing whether C & M should have sued its former clients to recover attorney fees from them. see Ind. Appellate Rule 58(A)(2).
Opinion linked here. (Mike Frisch)
Thursday, December 4, 2014
We don't report on many (indeed any) worker's compensation cases but this one from the West Virginia Supreme Court of Appeals caught our eye.
The employee worked as a legal secretary for a law firm. She was diagnosed with carpel tunnel syndrome and cubital tunnel syndrome.
The court affirmed the findings below that the condition was not the result of her clerical work
This Court agrees with the reasoning of the Office of Judges and the conclusions of the Board of Review. Under West Virginia Code of State Rules § 85-20-41.5, clerical work is not a high risk job for producing or developing carpal tunnel syndrome, and Ms. Whitten does not have any of the contributing factors listed under § 85-20-41.5. Ms. Whitten also has a non-occupational risk factor of obesity. Dr. Mukkamala and Dr. Thaxton found Ms. Whitten’s condition was not related to her work duties. Dr. Bolano opined Ms. Whitten’s condition was occupationally related, but not until January of 2013 after he had already been treating Ms. Whitten for these diagnoses and symptoms since February 27, 2012. In addition, her symptoms began in November of 2010, but she did not mention that her symptoms were caused by her work or related to her job duties until January of 2013.
The work responsibilities did not include "[a]wkward wrist position, vibratory tools, significant grip force, and high force of repetitive manual movements" that can lead to the diagnosed conditions. (Mike Frisch)
Friday, November 14, 2014
The New Jersey Appellate Division has reversed a lower court order and dismissed a legal malpractice claim.
Under the facts of this case, [attorney] Ward argues that he is shielded from liability as a partner in a limited liability partnership ("LLP") and is therefore not vicariously liable for the alleged legal malpractice of his former partner, defendant John Olivo. Ward also contends that he is otherwise entitled to a dismissal of the complaint because plaintiff Mortgage Grader, Inc. ("MG") failed to serve an affidavit of merit ("AOM") on Ward or substantially comply with the AMS.
The primary issue is whether Ward loses his liability protection as a partner in an LLP if the LLP failed to purchase a tail insurance policy. We disagree with the motion judge that such a sanction is authorized and hold that when attorneys practice law as an LLP, and the LLP fails to obtain and maintain professional liability insurance as required by Rule 1:21-1C(a)(3), the LLP does not revert to a general partnership ("GP") under the Uniform Partnership Act ("UPA"),
if attorneys practice as an LLP, and the LLP fails to maintain malpractice insurance as required by the court rules, then the Supreme Court may terminate or suspend the LLP's right to practice law or otherwise discipline it. As currently written, however, the court rules do not authorize a trial court to sanction a partner of an LLP for practicing law as an LLP without the required professional liability insurance by converting an otherwise properly organized LLP into a GP.
Monday, July 28, 2014
The District of Columbia Bar Legal Ethics Committee has a new opinion on an important real-world issue
When a lawyer is seeking employment with an entity or person adverse to his client, or with the adversary's lawyer, a conflict of interest may arise under Rule 1.7(b)(4) if the lawyer’s professional judgment on behalf of the client will be, or reasonably may be, adversely affected by the lawyer’s own financial, business, property, or personal interests (for purposes of this Opinion, a lawyer’s own financial, business, property, or personal interests are collectively referred to as a “personal interest conflict”). Both subjective and objective tests must be applied to determine whether a personal interest conflict exists.
There is no “bright line” test for determining the point during the employment process when a personal interest conflict arises, and that point may vary. There are a number of factors to consider in determining whether a personal interest conflict exists, including whether the individual lawyer is materially and actively involved in representing the client and, if so, whether the lawyer’s interest in the prospective employer is targeted and specific, and/or has been communicated to, and reciprocated by, the prospective employer.
Where the prospective employer is affiliated with, but separate and distinct from, the entity adverse to the job-seeking lawyer's client, there may be no personal interest conflict in the first instance, because the adversary and the prospective employer may be separate entities for conflicts purposes.
If a personal interest conflict arises, there are three possible courses of action that may be available to the individual lawyer, each of which is subject to applicable requirements of the D.C. Rules of Professional Conduct: (a) disclosing to the client the existence and nature of the personal interest conflict and the possible adverse consequences of the lawyer's representation of the client and obtaining the client's informed consent to the representation; (b) withdrawing from the representation; or, (c) discontinuing seeking employment with the client's adversary or the adversary's lawyer until all pending matters relating to that potential new employment have been completed.
The personal interest conflict of an individual lawyer in a law firm, nonprofit, or corporate legal department is not imputed to the other lawyers in the law firm, nonprofit, or corporate legal department, so long as the personal interest conflict does not present a significant risk of adversely affecting the representation of the client by such other lawyers. The imputation rule does not apply to a government agency.
A subordinate lawyer who discusses a potential personal interest conflict with his supervisory lawyer, and acts in accordance with the supervisory lawyer's reasonable determination of whether the subordinate lawyer has a personal interest conflict and follows the supervisory lawyer's recommended course of action, will not be held professionally responsible even if it is subsequently determined that the supervisory lawyer's determination of whether there was a personal interest conflict, and/or the recommended course of action, were incorrect under the Rules.
I have found this issue to arise with some frequency. Guidance always is helpful. (Mike Frisch)
Tuesday, July 1, 2014
The New York Court of Appeals has answered a question posed by the United States Court of appeals for the Second Circuit as follows
We hold that pending hourly fee matters are not partnership "property" or "unfinished business" within the meaning of New York's Partnership Law. A law firm does not own a client or an engagement, and is only entitled to be paid for services actually rendered.
The litigation involved trustee claims against Thelan and Coudert Brothers.
The notion that law firms will hire departing partners or accept client engagements without the promise of compensation ignores commonsense and marketplace realities. Followed to its logical conclusion, the trustees' approach would cause clients, lawyers and law firms to suffer, all without producing the sought-after financial rewards for the estates of bankrupt firms.
Treating a dissolved firm's pending hourly fee matters as partnership property, as the trustees urge, would have numerous perverse effects, and conflicts with basic principles that govern the attorney-client relationship under New York law and the Rules of Professional Conduct. By allowing former partners of a dissolved firm to profit from work they do not perform, all at the expense of a former partner and his new firm, the trustees' approach creates an "unjust windfall," as remarked upon by the District Court Judge in Geron (476 BR at 740)...
Ultimately, what the trustees ask us to endorse conflicts with New York's strong public policy encouraging client choice and, concomitantly, attorney mobility...
Thursday, June 26, 2014
A longtime Kansas City Royals baseball fan who lost a jury verdict for an eye injury allegedly sustained during the "Hotdog Launch" by team mascot Sluggerrr gets a new trial.
The plaintiff was at a sparsely attended game with the Tigers.The court noted that the Royals won.
He and his father had moved down into choice seats nearthe dugout. He claimed he was struck by a hand-tossed hotdog but did not report any injury at the time. In fact, he attended the next night's game.
He sought medical attention and claimed the toss caused a detached retina. He advised the Royals of his claim eight days after the incident.
Sluggerrr had no memory of the event.
The jury found the plaintiff 100% at fault.
From the web page ofthe Missouri Supreme Court
Monday, May 12, 2014
An interesting decision last week from the Georgia Supreme Court on disqualification premised on a non-attorney employee
We granted certiorari in this case to determine whether the Court of Appeals correctly held that a conflict of interest involving a nonlawyer can be remedied by implementing proper screening measures in order to avoid disqualification of the entire law firm. For the reasons set forth below, we hold that a nonlawyer’s conflict of interest can be remedied by implementing proper screening measures so as to avoid disqualification of an entire law firm. In this particular case, we find that the screening measures implemented by the nonlawyer’s new law firm were effective and appropriate to protect against the nonlawyer’s disclosure of confidential information. However, we remand this case to the trial court for a hearing to determine whether the new law firm promptly disclosed the conflict.
The case involves a wrongful death action brought by the estate of a person who was shot and killed at an apartment complex. The paralegal was the plaintiff 's primary contact and worked on the fact investigation before moving (with an intervening stop at another job) to the firm that represented the defendant apartment complex.
The conflict was not discovered when the paralegal first moved to the defendant's firm, as suit had not yet been filed and the paralegal did not know that the firm represented the defendant.
Screening was implemented after the conflict was discovered.
The court set forth a test for disqualification under the circumstances
...the new firm will be disqualified where (1) the nonlawyer has already revealed the confidential information to lawyers or other personnel in the new firm; (2) screening would be ineffective; or (3) “the nonlawyer necessarily would be required to work [or has actually worked at the new firm] on the other side of the same or a substantially related matter on which the nonlawyer [previously] worked.”
Justice Nahmias concers but has concerns about the state of screening in Georgia
It should be noted... that this is yet another case that raises questions about whether Rule 1.10, and in particular its implicit rejection of the use of screening measures to avoid imputed disqualification of an entire law firm when one of their lawyers would be disqualified, should be reconsidered and amended or at least clarified. After all, the rules already allow the use of screening to avoid conflicts imputed from some lawyers – former government lawyers, judges, and arbitrators. See Rules 1.11 (a) and 1.12 (c). And many of the factors that the Court discusses in support of our conclusion that screening measures, rather than imputed disqualification, may be appropriate for nonlawyers also apply to many other lawyers – especially associates. In addition, we should acknowledge that, as in the rest of our economy, it is becoming far less common for lawyers and their nonlawyer assistants to remain with the same firm for an entire career, whether by choice or due to layoffs or merger and dissolution of firms. This Court can continue deciding – or avoiding deciding – the impact of Rule 1.10 on a case-by-case basis, but the process for amending the Bar Rules provides opportunities for greater and broader input from those whose interests may be affected by imputed disqualification as well as consideration of facts and circumstances beyond those presented in the record of a particular case. That seems a preferable way to address these issues.
Tuesday, May 6, 2014
A law firm's suit for defamation was dismissed by the New York Appellate Division for the First Judicial Department:
In this action for defamation, plaintiffs, a law firm and its two members, allege that defendant, the chief executive of a party named as a defendant in a law suit brought by plaintiffs on behalf of their client, NDTV, defamed them in an interview conducted by a journalist in India and published in an online Indian financial publication. Among the allegedly false and defamatory statements made by defendant were that the plaintiff firm is a two-lawyer, Florida-based law firm specializing in restaurant law, that it accepted cases on a contingency basis, and that it broached the topic of settlement with their client's adversaries in an attempt to "extort" money from them.
The motion Court properly found that plaintiffs failed to state a valid cause of action for defamation. Given the overall context in which the statements were made, a reasonable reader would conclude that they constitute hyperbole and convey non-actionable opinions about the merits of the lawsuit and the motivation of NDTV's attorneys, rather than statements of fact.
Wednesday, April 30, 2014
The Minesota Supreme Court has remanded the order that had disqualified Covington & Burling in civil litigation
This case presents several issues regarding disqualification of legal counsel because of a violation of Minn. R. Prof. Conduct 1.9(a) arising from a conflict of interest with a former client. These issues include who has standing to appeal a district court order granting a motion to disqualify, the legal standard for determining whether Rule 1.9(a) has been violated, and whether the right to seek disqualification can be waived. Appellant State of Minnesota retained appellant Covington & Burling, LLP (Covington) to represent it in a natural resource damages (NRD) case against respondent 3M Company involving the manufacture and disposal of perfluorochemicals (PFCs). Covington previously had represented 3M in legal and regulatory matters related to 3M’s fluorochemicals (FC) business from 1992 to 2006. Covington first appeared on behalf of the State in this action in January 2011. In October 2012, the district court granted 3M’s disqualification motion. Both the State and Covington appealed. The court of appeals dismissed Covington’s appeal for lack of standing and affirmed the disqualification of Covington. We granted Covington’s and the State’s respective petitions for review. For the reasons that follow, we affirm in part, reverse in part, and remand to the district court.
Here, the district court concluded, based on the evidence in the record, that Covington obtained confidential information in its prior representation of 3M, and the district court presumed that the information was shared with all Covington attorneys. But the district court did not meaningfully assess Covington’s claims that this information was no longer confidential either because the information had been disclosed to regulatory authorities and the public or because 3M waived the attorney-client privilege by initiating a separate, concurrent lawsuit against Covington for breach of fiduciary duty and breach of contract. The district court also did not analyze whether there is a substantial risk that any remaining confidential information would materially advance the State’s position in the NRD case. Therefore, the district court abused its discretion by failing to consider all legally relevant factors before concluding that the matters are substantially related...
Because we conclude that the district court did not consider legally relevant factors in conducting its disqualification analysis under Rule 1.9(a) and we conclude that a party can waive the right to seek disqualification of opposing counsel, we remand this case to the district court for its full consideration of these issues in a manner consistent with this opinion. The decision whether to reopen the record on remand rests within the discretion of the district court.
The ABA Journal had reported the trial court's order. (Mike Frisch)
Monday, February 24, 2014
The Virginia State Bar seeks comment on a proposed revision to the Imputed Conflicts Rule:
Pursuant to Part Six: Section IV, Paragraph 10-2(C) of the Rules of the Supreme Court of Virginia, the Virginia State Bar’s Standing Committee on Legal Ethics (“Committee”) is seeking public comment on a proposed amendment to Rule 1.10 of the Rules of Professional Conduct.
This proposed Rule amendment is intended to avoid a situation in which a lawyer avoids the imputation of a conflict of interest by avoiding the knowledge that another lawyer in the firm has a conflict as to the representation. Under the current standard of “knowing” that another lawyer in the firm is prohibited from undertaking the representation, a lawyer can avoid the application of Rule 1.10(a), which would impute a conflict to him, by willfully failing to learn the information that establishes the existence of the conflict. The proposed Rule amendment imputes a conflict if the lawyer “knows or reasonably should know” that another lawyer in the firm is prohibited from representing the client. The proposed amendment adds a new Comment [2a] to explain that the failure to maintain or use a system for identifying conflicts may be deemed a violation of Rule 1.10(a), if proper use of the system would have identified the conflict.
My comment --a good idea. (Mike Frisch)
Tuesday, February 11, 2014
The Virginia State Bar has put out for comment a proposed ethics opinion
This proposed opinion addresses a hypothetical situation in which lawyers Smith and Jones practiced together in the firm Smith & Jones P.C., which used the URL smithjones.com. After Smith withdrew from the firm and began practicing with another firm, Jones changed the firm’s name to “Jones Law Office, P.C.” and established a new website at the URL “joneslawoffice.com.” Jones proposes to automatically redirect anyone who attempts to access smithjones.com to joneslawoffice.com, or alternatively, to put a notice on the smithjones.com website that Smith & Jones, P.C. has now become the Jones Law Office because of Smith’s withdrawal from the firm, providing the date of Smith’s withdrawal and a link to joneslawoffice.com.
In this proposed opinion, the Committee concluded that both of Jones’s proposed alternatives are misleading in the absence of additional information about Smith’s withdrawal from the firm and his continued practice of law. The proposed notice, which would say that Smith & Jones, P.C. “has now become” the Jones Law Office, is misleading without the additional information that Smith continues to practice law, and automatically redirecting website visitors to joneslawoffice.com without providing some explanation is misleading for the same reason.
Comments are due by February 28. (Mike Frisch)