Tuesday, October 15, 2013
The Tennessee Court of Appeals has reversed and remanded an order dismissing claims brought against a Washington, D.C. attorney by a Memphis law firm.
The D.C. attorney sought the assistance of the Memphis firm in connection with a lawsuit filed in Maryland. A contract was entered into for the attorney and the firm to serve as co-counsel.
The Memphis firm sued the attorney for not paying one-half of the expenses, as provided for in the contract.
The trial court dismissed for lack of personal jurisdiction. The court here disagreed and reinstated the suit. (Mike Frisch)
Tuesday, October 1, 2013
A former colleague at the Office of Bar Counsel brought a 2010 decision of the District of Columbia Court of Appeals to my attention.
The case - Bergman v. District of Columbia, et al. , - raises some interesting questions concerning the ethical obligations of attorneys who solicit clients in the District of Columbia.
Historically, enforcement of solicitation restrictions has been the lowest of priorities in D.C. The Court of Appeals did not adopt ABA Model Rules 7.2 through 7.4 and seeded in its Rule 7.1 a provision that permits in-person solicitations that do not involve false statements or undue influence.
As a result, prosecutions for improper client solicitation rarely, if ever, take place.
In one reciprocal case I handled, the court declined to impose any discipline on an attorney sanctioned in Maryland for approaching a potential client as he was leaving a courthouse. The case is In re Roger Gregory.
The Bergman case involved a suit by a D.C. Bar member challenging the validity of a City Council act that, among other thing, makes it unlawful for an attorney to solicit business from a potential motor vehicle accident client within 21 days of an accident.
In an opinion authored by Senior Judge Frank Schwelb, the court upheld the provision and rejected the contention that the act contravened the court's exclusive authority to regulate the legal profession. The court relied on United States Supreme Court jurisprudence in the area of attorney solicitation, primarily Ohralik v. Ohio and Florida Bar v. Went For It.
Rather, the power is inherent but not exclusive: "we believe that it would be an inappropriate exercise of judicial power to restrict the legislative authority of our elected representatives in the manner that Bergman suggests...we are dealing here with uninvited attempts to secure employment for renumeration - a classic example of a business transaction."
The court gave short shrift to the attorney's First Amendment claims: "this case...is not about the benign democratic ideal of opposing views competing for public acceptance. Rather, it is about practitioners aggressively seeking to secure potentially profitable employment."
So, as a result, in the District of Columbia, attorneys are forbidden by legislative act from a form of solicitation that is not in any manner in violation of the court's own ethical rules.
Are D.C. lawyers now subject to bar proceedings if they violate the statute but not the ethics rules?
Should the ethics rules be amended to harmonize with the now-governing law?
Will the City initiate criminal prosecutions of soliciting attorneys?
I will confess myself a bit surprised to see the court's embrace of Ohralik and Went For It given the state of its own disciplinary rules.
The opinion is linked here. (Mike Frisch)
Thursday, September 19, 2013
The District of Columbia Court of Appeals has affirmed an order to arbitrate a dispute between a former partner of K &L Gates and the firm.
The attorney had filed suit against the firm in California. The firm invoked arbitration and forum selection clauses in the firm partnership agreement, and moved in the D.C. Superior Court to compel arbitration.
The Superior Court ordered the parties to arbitrate the dispute. The attorney appealed the order.
The court here entertained the appeal and concluded that the dispute must be arbitrated.
The attorney had signed a supplement to the firm's partnership agreement when Kilpatrick & Lockhart merged with Preston, Gates & Ellis that bound him to the agreement "as amended."
The attorney (who was a partner at the Preston firm) agreed to the supplement when he chose to become a K &L Gates partner. The agreement provided for arbitration of disputes that arose between him and the firm and chose the District of Columbia as the forum.
The court rejected a host of contentions, including the suggestion that the firm engaged in fraud in having the agreement signed. The court held that the arbitration agreement broadly covered all issues in dispute between the attorney and the firm.
Associate Judge McLeese wrote the opinion. There are concurring opinion from Senior Judge Ferren, joined by Associate Judge Easterly.
The issue of the concurrences involved footnote four of the opinion. The concurring opinion proposes an alternate version.
Judge McLeese defended the footnote in a concurring opinion. (Mike Frisch)
Friday, August 16, 2013
The New Jersey Appellate Court has issued a 105 page opinion in a case involving former friends and business partners who "pursued their respective claims against each other with the same passion and zeal that once characterized their success in business."
The defendant and plaintiff met in 1997. At first, defendant was plaintiff's personal attorney. He later became the chief operating officer as well as general counsel to business entities of the plaintiff.
The court notes that he was also an entertainment lawyer who had represented Bette Midler, Rod Stewart, Neil Sedaka, Andrew Lloyd Webber and the Bee Gees.
The plaintiff has risen from a limited eduction to great success. The defendant (who is admitted in New York but not New Jersey) was alleged to have engaged in self-dealing as well as lavish personal spending on the company dime.
In particular, the court describes a three-night, all expenses paid (by the company) trip to Las Vegas.
While the lesser mortals stayed elsewhere, the defendant had a penthouse at the Bellagio Hotel. He brought the gang back from dinner (where he let the company pick up the tab), along with "three young ladies" that he introduced as his "friends."
At the penthouse, the friends performed with, as a witness testified, "nothing on, nude show, did things to each other, that sort of stuff..." The witness was particularly impressed by the fact that the penthouse had a grand piano.
The court affirmed the rescission of the defendant's ownership interests in three entities. Further, the court affirmed legal malpractice and civil fraud claims against the defendant as in-house and general counsel as well as personal attorney for the plaintiff. Awards of counsel fees and punitive damages to the plaintiff were reversed.
The court squarely rejected the defendant's contention that RPC 1.8(a) (the business transactions with clients rule) did not apply to him as an in-house counsel.
As a sidelight, the litigation also led to the censure of the first trial judge.
The censured judge had violated judicial ethics by attending court proceedings after his recusal, a situation that did not create an issue for the court:
...we are satisfied that Judge Nugent's role as fact-finder and legal arbiter was not compromized by [former] Judge Perskie's conduct. Although we have disagreed with some of the legal rulings he made in the case, Judge Nugent's integrity as a jurist is beyond reproach.
The court departed from its usual pratice of not identiying the trial judge by name and noted that the judge had already been named in publicity generated by the case. (Mike Frisch)
Wednesday, June 19, 2013
The Utah Supreme Court has ruled in favor of an attorney in a fee dispute with a client.
The attorney represented the client pursuant to a 1/3 contingency fee argeement for "all monies paid" in the case.
The representation spanned 13 years and resulted in a judgment in excess of $6 million. The client had retained another law firm to recover the attorneys fees.
The issue was whether the agreement allowed payment of the stated percentage of the award of attorneys fees as well as the judgment.
The court held that the ageement was "unambiguous" and complaint with the Rules of Professional Conduct. Thus, the attorney was entitled to his 1/3 cut of the attorneys fees. (Mike Frisch)
Wednesday, June 12, 2013
A non-attorney may file a claim on behalf of a business entity in probate court without running afoul of unauthorized practice restrictions, according to an opinion issued today by the South Carolina Supreme Court.
The process for an allowance of claim merely requires the filing of a single page standard form that can be found on a court web page. The form requires an attestation that the claim is valid, timely and unpaid.
None of these activities require the professional judgment of an attorney or entail specialized legal knowledge and ability.
Bravo. (Mike Frisch)
Monday, May 6, 2013
In a lawsuit involving a dispute between lawyers over the legal fees in a complex medical malpractice case, the Maryland Court of Special Appeals has held that
...we will apply the general rule that the termination of a contingency fee agreement terminates the fee-sharing agreement predicated on it. Because PGA [the law firm of Orioles owner Peter Angelos] is not entitled to a contingency fee, there is no contingency fee for Mr. Brault to share. Accordingly, to the extent the circuit court factored in the fee-sharing agreement, the circuit court's ruling must be vacated and remanded for further proceedings.
We stress that our decision in this case does not mean that Mr. Brault is not entitled to compensation for his work while the contingency arrangement was in effect. Like PGA, howver, his claim would be for the reasonable value of his services.
The case involved an attorney (Mr. Gately) who while with PGA undertook the representation of the client with assistance from other firm attorneys. Mr. Brault was brought in as co-counsel and a favorable verdict was obtained. The verdict was overturned on appeal.
Mr. Gately was then discharged from PGA. The client followed him and Mr. Brault. The case later settled for an undisclosed amount. PGA sued to enforce its lien. The disputed funds remained in escrow.
Mr. Gately acknowledged that no post-verdict effort had contributed to the settlement, which he attributed to an act of God.
The court here held that PGA had behaved ethically and was not deprived of it entitlement to fees.
The court also held that the discharged attorneys may properly sue successor counsel. (Mike Frisch)
Wednesday, May 1, 2013
From the web page of the Tennessee Supreme Court:
The Tennessee Supreme Court has sent a dispute between a Memphis law firm and a former partner and paralegal back to the trial court to determine whether arbitration is appropriate.
The law firm of Glassman, Edwards, Wyatt, Tuttle & Cox, P.C. filed a lawsuit against B.J. Wade, a former partner, and Shannon Crowe, a former paralegal, alleging fraud and breach of their duties to the firm. Mr. Wade and Ms. Crowe both asked the trial court to send their cases to arbitration, as required by agreements they maintain govern resolution of each case. The firm, however, asserts that none of the agreements require arbitration.
The trial court consolidated the cases and initially ordered the parties to proceed with limited discovery to determine whether the cases were subject to arbitration. When disagreement arose, however, the trial court expanded the scope of discovery to include “all necessary documents to conduct a meaningful attempt at resolution of this matter.” The trial court also ordered the parties to mediation in an attempt to resolve all of their disputes. The Tennessee Supreme Court granted the request of Mr. Wade and Ms. Crowe for an immediate appeal.
In a unanimous opinion issued today, the Supreme Court concluded that the trial court erred in ordering discovery without limiting the scope of discovery to the issue of the enforceability of the arbitration provisions and erred in ordering the parties to mediation in an effort to resolve all aspects of their disputes.
The Supreme Court ordered that the case be returned to the trial court to determine whether arbitration was required of any dispute between the parties under any of the agreements at issue. The Court also held that discovery must be limited to the issue of whether the arbitration clauses contained in the agreements are enforceable.
The court's opinion is linked here.
Wednesday, April 24, 2013
From the web page of the Ohio Supreme Court:
The Ohio Supreme Court Board of Commissioners on Grievances & Discipline no longer advises that a lawyer may not practice with more than one firm in Ohio at the same time, according to an advisory opinion.
Finding “substantial justification for a new perspective on practice in multiple firms” and considering “the context of current rules and modern practice,” the board concluded in Opinion 2013-1 that practice in multiple firms can occur in compliance with the Rules of Professional Conduct.
The board withdrew three previous advisory opinions on the issue. The reasoning behind the update includes, among other things, the fact that other jurisdictions have ruled that the practice is permissible, an expanded definition of “firm,” and financial considerations for lawyers in smaller communities who work more than one part-time job.
The opinion’s syllabus gives the following guidance.
“A lawyer who engages in simultaneous practice in multiple firms must recognize the potential ethical issues connected with such practice. The lawyer has to be diligent in avoiding conflicts of interest, and the imputation of conflicts will apply across all associated ‘firms.’ The lawyer is also required to scrupulously maintain client confidentiality and professional independence. As part of the lawyer’s duty to refrain from false, misleading, or nonverifiable communications about the lawyer or the lawyer’s services, the lawyer must inform his or her clients of all multiple firm associations."
Thursday, March 14, 2013
The New Jersey Supreme Court has issued an opinion that amends RPC 7.5 to allow the use of a law firm trade name "so long as [the name] describes the nature of the legal practice in terms that are accurate, descriptive, and informative, but not misleading, comparative, or suggestive of the ability to obtain results."
The court considered the trade name Alpha Center for Divorce Mediation, P.C. and concluded that all of the name was permissible save for the "Alpha." The rest of the name, along with the name of a managing New Jersey attorney, passes muster.
Alpha is impermissibly comparative, like (as the court had suggested) "Best Tax Lawyers" and "Tax Fixers" would be.
The court also directed that a committee be established to implement its new Rule.
The case had been remanded in 2009 and reargued twice after the remand.
Question: What if your last name is Best? What if I change my name to Mike Superlawyer? (Mike Frisch)
Thursday, February 21, 2013
The Rhode Island Supreme Court affirmed the grant of summary judgment to an attorney in a suit for fees against a former client.
The attorney had represented the client in actions against her late father's estate for a 15% contingency fee.
After the claim was reduced to settlement, the attorney collected his fees as payments were recovered. The client later discharged the attorney and claimed no obligation to continue to pay.
The court found that the attorney's rights under the contingent fee agreement had fully vested when the underlying claim was settled. Although the client was free to discharge the attorney, such action "does not alter his entitlement to fees already earned." (Mike Frisch)
Monday, June 18, 2012
A plaintiff's verdict in a legal malpractice case has been reversed by the Georgia Supreme Court.
The court found error in the admission of expert testimony on causation:
...the second jury in a malpractice action is not deciding what the first jury would have done in the underlying case had the attorney not been negligent, but only what a reasonable jury would have done had the underlying case been tried without the attorney negligence alleged by the plaintiff. The second jury does this by independently evaluating the evidence in the underlying case as it should have been presented to determine whether it belives that the plaintiff has a winning case, not by deciding whether some prior jury may or may not have believed that the plaintiff had a winning case...the Court of Appeals was incorrect in its conclusion that the jury in a malpractice case was tasked with deciding an issue that could not be resolved by the average lay person. Because the jury in the malpractice case was not being asked to decide what a prior jury would have done, it was merely being asked to do what any jury in a discrimination lawsuit would do, which is, evaluate the evidence in the case and decide the case on the merits. This is a task solely for the jury, and that is not properly the subject of expert testimony.
The inadmissible testimony on the ultimate issue resulted in reversal of the judgment. (Mike Frisch)
Friday, June 15, 2012
From the Ohio Supreme Court:
Law firm letterhead and websites may list the names of non-lawyer employees if their status is clearly identified, according to a Supreme Court of Ohio Board of Commissioners on Grievances & Discipline advisory opinion.
Opinion 2012-2 departs from a previous advisory opinion issued by the board, so Advisory Opinion 89-16 is withdrawn.
The board’s 1989 opinion did not discuss law firms communicating with clients and the public via their websites. The opinion did, however, find that the inclusion of non-lawyers on letterhead was prohibited, but their inclusion on business cards was proper.
In revisiting its 23-year-old advice, the board considered Rules 7.1 and 7.5(a) of the Ohio Rules of Professional Conduct and the standard that “law firm letterhead and websites cannot be false or misleading, or contain a non-verifiable communication about a lawyer or the lawyer’s services.”
The board reiterated that firm business cards may identify non-lawyer employees.
Read the complete text of the opinion.
Monday, June 11, 2012
The New York Appellate Division for the First Judicial Department held that a plaintiff stated a valid cause of action under the following circumstances:
The following facts are undisputed: In 2002, plaintiff, a newly admitted
attorney, placed an advertisement in the New York Law Journal seeking a
mentorship opportunity with an experienced solo practitioner in order to gain
trial experience. Defendant responded to the advertisement and the parties met.
Subsequently, plaintiff saw an advertisement in the Journal placed by a Bronx
solo practitioner looking to refer cases out to other experienced attorneys.
Defendant met with the Bronx practitioner and agreed to act as trial counsel for
the Bronx attorney's clients with a 40% referral fee payable to the Bronx
attorney. It is further undisputed that plaintiff referred at least two cases to
defendant's law office, and that he conducted some depositions for cases on
which defendant was working, and drafted some bills of particulars — even though
plaintiff had not litigated any personal injury cases prior to meeting
defendant. Plaintiff received some payments from defendant which defendant
characterized as mostly for per diem work. Eventually, however, according to
plaintiff, the payments ceased.
In August 2006, plaintiff filed a summons and complaint alleging 10 causes of
action as follows: (1) breach of an oral partnership agreement; (2) breach of an
oral agreement; (3) fraud; (4) an accounting; (5) unjust enrichment; (6) fraud
in the inducement; (7) breach of fiduciary duty; (8) estoppel; (9) contract
implied in the law based on past performance; and (10) quantum meruit.
Plaintiff alleged, inter alia, that defendant had proposed that they should work
together as partners in a personal injury law practice with each having an equal
share of the profits gained from the cases they worked on jointly. Plaintiff
further alleged that between 2002 and 2005 he worked on more than 100 personal
injury cases for defendant, expended approximately 500 hours in connection with
these cases, and contributed $5,000 in capital to the partnership
The quantum meruit claim survives:
In the absence of a valid contract, plaintiff, however, does set forth a
prima facie case for recovery in quantum meruit. It is hornbook law that in
order to establish a claim in quantum meruit, a claimant must establish "(1) the
performance of services in good faith; (2) the acceptance of the services by the
person to whom they are rendered; (3) an expectation of compensation therefor;
and (4) the reasonable value of the services" (Soumayah v Minnelli, 41 AD3d 390, 391 ; see 22A NY Jur2d Contracts § 610;). Defendant agreed that plaintiff
worked for him in some capacity on a certain number of cases. Further, plaintiff
points to two e-mails purportedly sent by defendant to plaintiff in August 2005
acknowledging that defendant owes plaintiff certain fees on cases after they
"come to trial." Thus, plaintiff may recover based on quantum meruit for work he
performed without compensation on behalf of defendant.
Tuesday, May 29, 2012
The Idaho Supreme Court has affirmed the grant of a new trial to an attorney and his girlfriend who were found by special jury verdict to have breached fiduciary duties to a former client by purchasing half of his stock in a closely-held corporation for less than fair market value.
The stock was for a resort property on the shore of Lake Pend Orielle and was held in equal shares by two couples. The stock of one couple was purchased by a man with the wonderful name of Jerry Berry.
The attorney, who practiced bankruptcy law, visited the resort and made Mr. Berry's acquaintance. Berry consulted him about a possible bankruptcy but did not pursue that option. Later, Berry wished to purchase the other 50% of the stock, with money lent by the attorney in part and his girlfriend in part. The attorney thought he would be repaid on sale of the resort, but the sale did not happen.
Berry was diagnosed with pancreatic cancer, triggering events that led Berry to transfer the stock to the attorney and girlfriend to repay the obligation and the attorney to take control of the corporation. Berry died in November 2006.
The attorney then had the locks to the resort changed and did not give a key to Mrs. Berry. He approached her the day after the memorial service with a proposed special resolution and shortly thereafter was elected corporation president by 2-1 majority vote of himself and the girlfriend, who was elected treasurer by the same margin.
As they say, litigation followed, initiated by Berry's widow.
The court here found that the trial court's instructions on the attorney-client relationship were "clearly inadequate." The district court "did not err in holding that there was insufficient evidence to sustain the verdict that when [the attorney] purchased the stock he breached his fiduciary duty to Mr. Berry arising from an attorney-client relationship."
The court noted a dearth of evidence of an attorney-client relationship between Berry and the attorney after the 2000- 2001 consultation. The stock purchase took place in 2006.
The court and a concurring opinion were unimpressed by the attorney's "shabby" treatment of Mrs. Berry, which may have contributed to the jury's verdict.
Justice Jones, concurring, opines that while plaintiff's case raised "some smoke, it did not produce the actual fire necessary to support the verdict" against the attorney and the girlfriend. (Mike Frisch)
Wednesday, May 16, 2012
The New York Appellate Division for the First Judicial Department has affirmed the grant of summary judgment to a law firm sued for discrimination by a terminated attorney:
In this discrimination action, plaintiff alleges that the defendant law firm terminated her because of her age and gender. The motion court properly determined that plaintiff failed to meet her burden of showing that she was discharged under circumstances giving rise to an inference of discrimination. Even assuming arguendo that plaintiff had met that burden, defendant law firm offered legitimate, non-discriminatory reasons for plaintiff's termination since she had engaged in misconduct by, over a period of several years, using a car service hundreds of times in violation of defendant's policy. Plaintiff would commute to and from her home, and to her personal appointments and the office, and then charge those trips to various clients. Plaintiff failed to show that defendants' stated reasons for her termination were false or pretextual or that defendants were motivated by discrimination. (citations omitted)
The motion court did not abuse its discretion in denying plaintiff's motion to amend the complaint to add a claim under New York Judiciary Law § 487 and to add a partner at the law firm as a party. Plaintiff failed to allege facts demonstrating that the law firm or its partners intended to commit deception in a letter to the Departmental Disciplinary Committee reporting plaintiff's misconduct.
Tuesday, May 8, 2012
The New York Court of Appeals has declined to extend the Wieder exception to the doctrine of at-will employment and affirmed the grant of summary judgment to a defendant hedge fund company and its president, who had fired its chief compliance officer.
The plaintiff had claimed he was fired for reporting misconduct.
The Wieder exception involved an attorney who had been fired from his law firm for reporting unethical conduct.
Chief Judge Lippman dissented:
In the wake of the devastation caused by fraudulent financial schemes - such as the Madoff ponzi operation, infamous for many reasons including the length of time during which it continued undetected - the courts can ill afford to turn a blind eye to the potential for abuses that may be committed by unscupulous financial services companies in violation of the public trust and law. In the absence of conscientious efforts by those insiders entrusted to report such abuses of investors, such behavior can run rampant until a third part outside the company discovers it and takes action. The message that will be taken from the majority's decision is self-evident: if compliance officers (and other similarly situated) wish to keep their jobs, they should keep their heads down and ignore good-faith suspicions or evidence they may have that their employers have engaged in illegal and unethical behavior, even where such violations could cause or have caused staggering losses to their employer's clients. The majority's conclusion that an investment advisor like Peconic has every right to fire its compliance officer, simply for doing his job, flies into the face of what we have learned from the Madoff debacle, runs counter to the letter and spirit of the Court's precedent, and facilitates the perpetration of frauds on the public.
Friday, April 27, 2012
The New York Appellate Division for the First Judicial Department has held that a law firm employee is not bound by an earlier agreement to arbitrate:
The record shows that the parties entered into an employment agreement that contained a broad arbitration clause. The agreement also provided that it could not be extended except by a writing signed by both parties. At the time of plaintiff's termination, the employment agreement had expired by its own terms, and no written agreement signed by both parties had extended it. Although plaintiff continued to work for defendant law firm after the expiration of the agreement, evincing an agreement to extend some of the provisions of the contract, that was insufficient to extend the arbitration provision without a clearly expressed intention to do so. Accordingly, since no agreement to arbitrate existed at the time of plaintiff's termination, the court improperly stayed the proceedings and directed arbitration. (citation omitted)
Wednesday, April 18, 2012
The New Jersey Appellate Division has reversed an order of summary judgment as to two of three defendants sued under the New Jersey Law Against Discrimination ("LAD").
The plaintiff (a truck driver) had claimed to be subject to regular anti-Semitic comments from the defendants, who mistakenly thought that he was Jewish. The trial court held that the fact that the plaintiff was not in fact Jewish barred the action.
The court here found that conclusion to be erroneous as a matter of law:
...the individual defendants, all of whom were plaintiff's supervisors, were motivated by their belief that plaintiff was Jewish, and thus engaged in "real discrimination and harassment" of the kind that the LAD seeks to eliminate...That their target happened not to be Jewish should not serve to excuse their conduct.
The defendants had initially denied the comments had been made until a DVD was produced by the plaintiff that had such expressions as "Jew Bag," "F... you Hebrew," "Jew Bastard," "If you were a German, we would burn you in the oven," and "Only a Jew would argue over his hours."
At his deposition, one of the defendants admitted that the DVD was accurate and that he "used the song Hava Nagila as the ring tone for calls on his cell phone from plaintiff." (Mike Frisch)
Tuesday, April 17, 2012
The Tennessee Court of Appeals has reversed and remanded an order dismissing a case against a law firm that had defended a personal injury claim against a commercial driver.
The plaintiffs settled for insurance policy limits of $500,000. As part of the seetlement, they signed a release of all claims against the law firm and insurance company as well as the defendants. The plaintiffs later discovered that defendants also had a substantial general insurance liability policy of a million dollars.
Plaintiffs then sued the attorneys for the defendants for fraud in the inducement of the settlement agreement. The trial court granted summary judgment based on the language of the release.
The court here held that the trial court erred in refusing to hear extrinsic evidence of fraud. (Mike Frisch)