Monday, June 25, 2012
The New Jersey Appellate Division has held that, under the "most significant relationship" test, the New York statute of limitations applies to a tort action brought by an attorney against his former firm. Accordingly, the litigation was dismissed.
Plaintiff was a partner in a New York firm with a Newark satellite office. He was terminated as a result of charges that he had sexually harassed female employees. He sued the firm in New York for defamation. The firm sued him, also in New York, based on allegations of improper conduct as a firm partner. The New York Supreme Court dismissed both actions. The Appellate Division affirmed the dismissals.
After a second action filed by the plaintiff in New York was dismissed, he sued the firm in New Jersey for malicious prosecution. The action was time barred in New York but not in New Jersey.
Here, the court applied the New York limitations rule, concluding that the Empire State was "the locus of all the claims and counterclaims between the parties." (Mike Frisch)
Thursday, June 14, 2012
The Nevada Supreme Court has remanded a matter for an evidentiary hearing on the sufficiency of screening measures. The disqualified attorney served as a settlement judge in an appeal. A partner of the settlement judge entered an appearance for one of the parties after settlement talks failed. The other party objected.
The court sets forth the facts:
Although the Nevada Rules of Professional Conduct (RPC) permit the screening of disqualified attorneys to prevent an associated law firm’s imputed disqualification in some cases, RPC 1.10(e); 1.11(b); 1.12(c), we have never considered whether screening is appropriate with regard to a settlement judge acting under this court’s settlement conference program or how to determine the sufficiency of any screening measures utilized. We take this opportunity to consider the practice of attorney screening to cure imputed disqualification.
The parties agree that supreme court settlement judge Nicholas Frey is disqualified from representing respondent Amador Stage Lines, Inc., in the present matter. Pursuant to RPC 1.12(c), Frey’s disqualification is imputed to the remaining members of his law firm, Woodburn and Wedge, but the parties disagree on whether screening may be utilized to cure the imputed disqualification. In order to resolve appellant Ryan’s Express Transportation Services, Inc.’s pending motion to disqualify Woodburn and Wedge from representing Amador in this appeal, we must consider whether screening may be used to cure imputed disqualification in this situation and whether the screening measures taken by Woodburn and Wedge are sufficient.
However, because we conclude that more facts are necessary for us to consider the sufficiency of Woodburn and Wedge’s screening measures, we defer ruling on the motion to disqualify and remand this matter to the district court for the limited purpose of conducting an evidentiary hearing and entering written findings of fact and conclusions of law regarding the adequacy of the screening.
When presented with a dispute over whether a lawyer has been properly screened, Nevada courts should conduct an evidentiary hearing to determine the adequacy and timeliness of the screening measures on a case-by-case basis. The burden of proof is upon the party seeking to cure an imputed disqualification with screening to demonstrate that the use of screening is appropriate for the situation and that the disqualified attorney is timely and properly screened.
When considering whether the screening measures implemented are adequate, courts are to be guided by the following nonexhaustive list of factors:
(1) instructions given to ban the exchange of information between the disqualified attorney and other members of the firm;
(2) restricted access to files and other information about the case;
(3) the size of the law firm and its structural divisions;
(4) the likelihood of contact between the quarantined lawyer and other members of the firm; and
(5) the timing of the screening.
As with motions to disqualify, the consideration of the adequacy of screening is within the sound discretion of the district court, LaSalle, 703 F.2d at 256; however, the district court must justify its determination as to the adequacy of the screening in a written order with specific findings of fact and conclusions of law.
The hearing on remand will address the adequacy of the screening measures. (Mike Frisch)
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, June 5, 2012
In a lawsuit brought by the estate of a deceased attorney against her law partner, the New York Appellate Division for the First Judicial Department affirmed the denial of a motion to dismiss a count of the complaint:
Under New York law, partners owe each other a fiduciary duty. Defendants also owed a fiduciary duty to Yee's estate, as Yee's successor in interest. Plaintiff has sufficiently pled a claim for breach of fiduciary duty; paragraphs 18 and 19 of the complaint allege that defendant Donovan continues to operate the partnership in violation of the Partnership Agreement and failed to distribute Yee's interest to Yee's estate in accordance with the Partnership Agreement. Contrary to defendants' contention, plaintiff has alleged more than a mere accounting, and if defendants did not understand the separate causes of action, the appropriate remedy was to file a motion for a more definite statement under CPLR 3024(a). (citations omitted)
Ms. Yee died from injuries sustained in a small plane crash in California, reported here. (Mike Frisch)
Thursday, May 24, 2012
WorldCom settled a claim brought by the State of Mississippi with respect to delinquent tax liability for 100 million dollars. The company also paid 4.2 million to a private charity and 42.2 million to the private law firm that had represented the State. On request from the State Auditor, the private charity turned the money over to the State; the law firm refused to do so.
The Mississippi Supreme Court reversed the grant of summary judgment to the firm firm, holding that, when the Attorney General pays special assistants, they must be paid from the AG's contingency fund or from other funds approved by the AG's office. Further, public funds (such as the court holds these payments were) must be paid into the state reasury.
Neither requirement was met in the case. (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.
Monday, May 7, 2012
The New Jersey Supreme Court has reversed and remanded a determination not to disqualify an attorney retained in connection with delays in a construction dispute. The Appellate Division had affirmed the trial court's denial of the motion to disqualify.
The unanimous court held that the law firm's representation would violate Rule 1.9(a). The court found that the firm had provided advice and an opinion letter to a party and billed for approximately 20 hours of work. The firm thereafter entered an appearance on behalf of an opposing party.
The court found that the two representations were substantially related as it involved the "same discrete phase of the overall construction project, the same parties and the same dispute." In order to undertake the adverse matter, the law firm was required to have the former client's written permission. (Mike Frisch)
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)
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)
Wednesday, April 11, 2012
Cynthia Fuchs Epstein (CUNY, Sociology) has republished her classic and foundational study Women in Law as part of the Quid Pro book project. It adds a new Foreword by Stanford's Deborah Rhode. Excerpt on the demise of 'Ladies' Day' in law schools, and other info, found at MsJD blog. And the book itself is at Amazon in paperback or Kindle, plus B&N for Nook and Apple iBooks. Although the book certainly covers women as law students and in law teaching, most chapters are about professional practice as such, in firms, solo practice, public interest work, government, and the judiciary.
Also out in paperback is a book I edited, written by Tulane students: Hot Topics in the Legal Profession 2012. Those two are the newest ones on topic with the U.S. legal profession. Upcoming is a reissue in paperback of Llewellyn's The Bramble Bush, though already in Kindle and other ebook formats. [Alan Childress]
Monday, January 30, 2012
Charles Weisselberg and Su Li (Cal., Berkeley Law [and its great Center for Study of Law & Society]) have posted to SSRN their study of the transformation of the white collar defense bar. Its title is Big Law's Sixth Amendment: The Rise of Corporate White-Collar Practices in Large U.S. Law Firms and its abtract is:
Over the last three decades, corporate white-collar criminal defense and investigations practices have become established within the nation’s largest law firms. It did not used to be this way. White-collar work was not considered a legal specialty. And, historically, lawyers in the leading civil firms avoided criminal matters. But several developments occurred at once: firms grew dramatically, the norms within the firms changed, and new federal crimes and prosecution policies created enormous business opportunities for the large firms. Using a unique data set, this Article profiles the Big Law partners now in the white-collar practice area, most of whom are male former federal prosecutors. With additional data and a case study, the Article explores the movement of partners from government and from other firms, the profitability of corporate white-collar work, and the prosecution policies that facilitate and are in turn affected by the growth of this lucrative practice within Big Law. These developments have important implications for the prosecution function, the wider criminal defense bar, the law firms, and women in public and private white-collar practices.
Tuesday, January 17, 2012
The New York Appellate Division for the First Judicial Department has reinstated a legal malpractice case that had been dismissed on statute of limitations grounds.
The pro se plaintiff had been represented in an arbitration claim. She filed her suit within the three-year limitation period but had trouble serving the law firm.
The court concluded:
Even if this case does not qualify for an extension under the "good cause" exception...we find that it qualifies under the "interest of justice" category. Under this prong of CPLR 306-b, the Court of Appeals has instructed that a court "may consider [plaintiff's] diligence, or lack thereof, along with any other relevant factor . . ., including expiration of the Statute of Limitations, the meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiff's request for the extension of time, and prejudice to defendant."
Here, plaintiff's attempted March 2008 service, although ultimately deemed defective, was a diligent attempt by a pro se plaintiff to hire a process server to serve defendants at their law firm, within 120 days of the timely filing of a summons with notice. By the time the court ruled on the motions in the 2007 Action, the statute of limitations had expired, precluding the filing of a new action. In addition, defendants were aware of the 2007 Action and appeared to demand a complaint as early as April 2008 - they were not prejudiced by the service errors and were afforded full participation in discovery. Finally, construing the pleading in the light most favorable to plaintiff, as is required on consideration of a CPLR 3211 motion to dismiss, we find that it asserts actions and omissions by defendants that support viable claims for recovery. (citations omitted)
Friday, January 13, 2012
The Nebraska Supreme Court has held that a law firm is liable to a court reporting service for the payment of fees for services.
The litigation involved services provided in five cases in a total amount of a tad below $6,000. The law firm had contended that their clients were the proper defendants. The court held that the firm was liable but not the contracting attorney as an individual under the particular facts.
The law firm had invoked agency law in support of its position.
The court responded:
As a practical matter, in today's legal system, an attorney dealing with those who provide legal support services acts less as an agent who relies on the client for authority to manage the case, and more as a "general contractor," who is responsible for supervising the various aspects of litigation. In that context, it is appropriate that the attorney, with superior knowledge and familiarity with the case and client, should bear the burden of clarifying his or her intent regarding payment. It is, in fact, a relatively simple matter foe an attorney to disclaim liability with a clear statement to that effect. And an attorney's liability for (and payment of) expenses of litigation is consistent with our ethical rules.
Thursday, January 5, 2012
In this employment discrimination action arising from the termination of the petitioner attorney by the respondent law firm, we reiterate that a petitioner's disability does not shield him from the consequences of workplace misconduct.
Respondent Hill Betts & Nash (hereinafter referred to as "HBN") terminated the petitioner, James Hazen, on March 15, 2006, upon discovering that the petitioner charged hotel rooms, limousines, alcohol, adult movies and calls to escort services to his corporate American Express card and then attempted to have these charges billed to clients. On August 30, 2006, HBN reported the petitioner's misconduct to the Departmental Disciplinary Committee for the First Judicial Department (hereinafter referred to as the "DDC"). The petitioner filed a verified complaint with the New York State Division of Human Rights (hereinafter referred to as the "DHR") on November 7, 2006 charging HBN with unlawful discrimination and retaliation. The petitioner claims that his misconduct was caused by his bipolar disorder, that HBN failed to accommodate his mental illness, that his termination was discriminatory, and that HBN retaliated against him by reporting him to the DDC.
The court concluded:
The record reflects that until the petitioner began receiving requests from HBN in December 2005 to account for his credit card expenses, there was no indication that the petitioner was suffering from a mental illness. By his own account, the petitioner was able to produce "quality professional legal work" during the time he was allegedly disabled, and argued his portion of a complex summary judgment motion on December 9, 2005. [petitioner's friend] Russotti testified that when he saw the petitioner in December, shortly before their January meeting, the petitioner's behavior did not seem unusual. The petitioner's doctor's records also indicate that neither the internist who had been treating him for more than a year for diabetes, nor the therapist who had been treating him for post-9/11 stress, diagnosed the petitioner with bipolar disorder or even mentioned the possibility that he was bipolar.
Furthermore, once the petitioner began alluding to an "emotional illness," HBN specifically requested the details of the petitioner's condition in order to evaluate the medical benefits available to the petitioner, and the petitioner flatly refused to provide any information. The communications from Russotti, the petitioner, and the petitioner's doctor, contained only vague references to emotional illness or "mood disorder," and thus did not fall into the category of an "impairment [...] which [...] is demonstrable by medically accepted clinical [...] techniques." Executive Law § 292(21)(a).
Thus, all that was before HBN when it terminated the petitioner on February 3 was that he had charged more than $21,000 in hotels and other personal expenses to the corporate credit card and tried to bill HBN's clients for personal expenses. Then, when confronted and asked for an explanation, he did not reimburse HBN and instead blamed his conduct on a "mood" illness, which he still did not identify.
Despite this total lack of evidence as to the petitioner's termination due to his bipolar disorder, the ALJ incomprehensibly found that HBN's legitimate reason for terminating the plaintiff was a pretext. The ALJ relied on evidence that another HBN attorney had charged $25,000 to his corporate credit card and was not terminated. However, this demonstrates only that the ALJ misapprehended the nature of the professional misconduct. The other HBN attorney did not attempt to charge clients for his personal expenses and paid the money back over time; therefore, his conduct is clearly distinguishable from the petitioner's, which essentially amounted to attempted theft from HBN and its clients.
Wednesday, December 14, 2011
Georgetown Law has announced a significant addition to its Center for the Study of the Legal Profession:
Georgetown University Law Center Dean William M. Treanor is pleased to announce that James Jones, former chair of the Hildebrandt Institute and managing partner of Arnold & Porter, will assume the role of senior fellow with Georgetown Law’s Center for the Study of the Legal Profession, beginning in January 2012.
"Jim Jones is one of the world’s leading thinkers about trends in law practice and the legal profession," said Dean Treanor. "His affiliation with Georgetown will enhance our ability to anticipate changes in the legal profession, strengthen our efforts to prepare students to meet the challenges they will face and enrich the research that we do on a profession undergoing profound changes."
Jones has served over the years in a variety of leadership positions in the legal industry. He spent more than 20 years at Arnold & Porter, serving as managing partner of the firm from 1986 to 1995. From 1995 to 2000, he was vice chairman and general counsel of APCO Worldwide. Since 2001, he has been at Hildebrandt International (later Hildebrandt Baker Robbins), a leading consultant to law firms and legal departments around the globe. For the past four years, he served as Hildebrandt's managing director. Since 2000, Jones also served as chair of the Hildebrandt Institute, the division responsible for executive education and research activities. Jones received his J.D. from New York University in 1970.
Jones has served since 1993 as chair of the Pro Bono Institute. He was also instrumental in the creation of TrustLaw, a project of the Thomson Reuters Foundation designed to promote pro bono collaboration between leading law firms and major NGOs throughout the world. He is an author and frequent speaker on topics relating to the "business of law" and has been a regular speaker to student audiences at Georgetown on trends in the legal profession.
On his new relationship with Georgetown Law, Jones said, "I am delighted to be affiliated with the Georgetown Center for the Study of the Legal Profession. Under the able direction of Mitt Regan and Jeff Bauman, the Center and its talented members have already made a positive impact on the legal profession through insightful research and publications, as well as well-focused educational programs. I look forward to contributing to the Center's success in the future, particularly in the area of executive education."
The Center for the Study of the Legal Profession was created in 2007 to promote interdisciplinary scholarship on the legal profession informed by the dynamics of modern practice; provide students and faculty with an understanding of the opportunities and challenges of a 21st century legal career; and furnish members of the bar, particularly those in public and private decision-making positions, broad perspectives on trends and developments in law practice.
Wednesday, November 30, 2011
The New York Appellate Division for the First Judicial Department has dismissed a complaint alleging legal malpractice and breach of fiduciary duty against Dechert LLP premised on the following alleged facts:
In 2005, Marc Dreier, who was then an attorney, proposed to plaintiffs that they participate in a short-term note program to finance the purchase of foreign real estate assets. The designated borrower would be Dreier's clients, Solow Realty & Development Company, LLC, and affiliated companies controlled by real estate developer Sheldon Solow (collectively Solow Realty), and Dreier would be the guarantor. The parties executed two loans totaling $60 million in 2006, and, in 2008, Dreier proposed another $50 million loan transaction. For this last loan transaction, plaintiffs required Solow Realty and Dreier to retain independent counsel to issue a legal opinion as to whether Solow Realty and Dreier had carried out the necessary formalities to render the loan documents valid and binding on them. Ostensibly, Solow Realty and Dreier retained defendant for this purpose. Dreier furnished the necessary documents and information to defendant for the preparation of the opinion. All the documents to which Solow Realty was a signatory appeared to have been signed by Solow Realty, and some bore "what appeared to be" the signatures of Sheldon Solow and Solow Realty's CEO.
Plaintiffs contend that they relied on defendant's legal opinion that the loan documents were duly executed and delivered and that the loan was a valid and binding obligation on Solow Realty and Dreier. Plaintiffs wired $50 million to an attorney trust account set up at Dreier's firm. Several months later, Dreier was arrested in connection with another fraud scheme, and plaintiffs discovered that Solow Realty had no knowledge of and was never a party to the loan transactions and that Dreier had falsified the documents and forged the Solow Realty signatures.
The malpractice claim failed because there was no attorney-client relationship. As to the fiducuary claims:
Although there is no contractual privity between the parties, the complaint sufficiently alleges a relationship of "near privity" for the purpose of stating a cause of action for negligent misrepresentation or negligence. Plaintiffs allege that the particular purpose of the opinion letter was to aid them in deciding whether to enter into the loan transaction, that defendant was aware that they were relying on the opinion in making that decision, and that defendant evinced its understanding of that reliance by addressing the legal opinion to them. However, the complaint fails to allege (a) that plaintiffs informed defendant that its obligations were not limited solely to a review of relevant and specified documents or (b) that plaintiffs informed defendant that it was to investigate, verify and report on the legitimacy of the transaction. Absent such factual allegations, plaintiffs cannot establish that defendant breached a duty of care. As Dreier was Solow Realty's attorney and the guarantor of the loan, defendant had no reason to suspect that Solow Realty was not in fact a party to the loan transaction or that Dreier forged the signatures of its principal and CEO. We note that plaintiffs had previously made two large loans to Dreier, while represented by international firms that specialized in financial transactions. Prior to Dreier's arrest, plaintiffs never suspected fraud.
Moreover, the opinion, by its very terms, provided only legal conclusions upon which plaintiffs could rely. The opinion was clearly and unequivocally circumscribed by the qualifications that defendant assumed the genuineness of all signatures and the authenticity of the documents, made no independent inquiry into the accuracy of the factual representations or certificates, and undertook no independent investigation in ascertaining those facts. Thus, defendant's statements as contained in the opinion, were not misrepresentations. Finally, in accordance with the loan agreement, the opinion was reviewed by plaintiffs' counsel before plaintiffs accepted it. (citations omitted)
Thursday, November 17, 2011
The West Virginia Supreme Court of Appeals affirmed the grant of summary judgment to Kutak Rock in an action brought by an accounting firm found liable to the FDIC for a negligent bank audit.
The court held that the accounting firm:
...may not file a subsequent action against the bank's law firm alleging direct claims for fraud, negligent misrepresentation and tortious interference with contract where: (1) the law firm, as joint tortfeasor, executed a prior, good faith settlement with the FDIC, thereby extinguishing the accounting firm's right of contribution, (2) the accounting firm was awarded a credit reduction on the verdict based on the settlement, (3) the direct claims alleged by the accounting firm arose from the same facts and circumstances which contributed to the bank's loss and resulted in judgment obtained by the FDIC, (4) the damages sought by the accounting firm against the law firm are substantially the same as the judgment obtained by the FDIC, (5) the accounting firm knew in advance that the audit would involve a high risk of misrepresentation of data by bank managers and (6) the engagement of the accounting firm to perform the audit, originating through the Office of the Comptroller of the Currency, performed a public function.
The claims asserted against the firm "are, in reality, contribution claims rather than direct or independent claims and are, therefore, barred by the May 2003 settlement agreement made in good faith between Kutak and the FDIC."
The underlying representation involved the activities of the First National Bank of Keystone, which had implemented a "securitization" strategy that had led to disaster. (Mike Frisch)
Thursday, September 15, 2011
The New Hampshire Supreme Court has affirmed and reversed in part the dismissal of an action brought by the wife of a Manchester attorney against Nixon Peabody and an attorney there named Regina Rockefeller.
The Manchester attorney had handled an estate matter. The Nixon Peabody attorney accused him of misappropriation and threatened to report him to criminal and bar authorities if he did not repay the estate.
The wife claimed that these threats forced her to execute a reverse mortgage on her family home. The defendants reported him anyway. Suit was brought and the home was foreclosed.
The wife sued on a variety of claims stemming from her alleged resulting severe emotional and physical distress.
The court here found that the claim of fraudulent misrepresentation was sufficiently pled:
The writ alleges that in reliance upon the defendants’ promises not to report her husband’s misconduct, the plaintiff agreed to execute a reverse mortgage on, and release her homestead interest in, the family home in Manchester and the settlement agreement dated April 2, 2007. In her prayer for relief, the plaintiff states that her payments were made to the defendants involuntarily and as a result of fraud. We read the facts set forth in the writ as alleging that the defendants either intended or had reason to expect that the promises made to Attorney Tessier would be communicated to the plaintiff and would influence her decision to enter into the settlement agreement with Dr. Jakobiec. The trial court also erred in denying the plaintiff's motion to amend claims of breach of the duty of good faith and fair dealing. Because the court reversed the trial court's dismissal of some of the claims against the individual attorney, claims against the firm survive on the basis of respondeat superior. The failure to supervise claim against the firm was properly dismissed. The Manchester attorney consented to disbarment. (Mike Frisch)
The writ alleges that in reliance upon the defendants’ promises not to report her husband’s misconduct, the plaintiff agreed to execute a reverse mortgage on, and release her homestead interest in, the family home in Manchester and the settlement agreement dated April 2, 2007. In her prayer for relief, the plaintiff states that her payments were made to the defendants involuntarily and as a result of fraud. We read the facts set forth in the writ as alleging that the defendants either intended or had reason to expect that the promises made to Attorney Tessier would be communicated to the plaintiff and would influence her decision to enter into the settlement agreement with Dr. Jakobiec.
The trial court also erred in denying the plaintiff's motion to amend claims of breach of the duty of good faith and fair dealing.
Because the court reversed the trial court's dismissal of some of the claims against the individual attorney, claims against the firm survive on the basis of respondeat superior. The failure to supervise claim against the firm was properly dismissed.
The Manchester attorney consented to disbarment. (Mike Frisch)
Tuesday, June 7, 2011
From the New York Appellate Division for the First Judicial Department:
Order, Supreme Court, New York County (Bernard J. Fried, J.), entered March 3, 2011, which, to the extent appealed from, granted defendants' motion for an order striking the demand for punitive damages, and denied plaintiff's cross motion for an order permitting plaintiff to seek full economic damages on his claim of conspiracy to commit fraud, unanimously affirmed, without costs.
Plaintiff was an associate at defendants' firm when two of its partners left to open a intellectual property practice at another firm. This new firm offered plaintiff a "partnership track" position with a salary increase and signing bonus. Plaintiff commenced this action alleging that, from March 2002 to May 2005, defendants entered into a deceitful scheme to prevent him from leaving the firm at a point in time when he was the key associate on patent infringement litigation for an important client. Plaintiff claims that, while he was promised that he would be voted on for partnership, and assured that he would eventually be made partner, his employment was terminated soon after he successfully concluded the litigation which the firm had been eager to keep.
Punitive damages are not available "in the ordinary fraud and deceit case" (Walker v Sheldon, 10 NY2d 401, 405  [internal quotation marks and citation omitted]), but are permitted only when a "defendant's wrongdoing is not simply intentional but evince[s] a high degree of moral turpitude and demonstrate[s] such wanton dishonesty as to imply a criminal indifference to civil obligations'" (Ross v Louise Wise Servs., Inc., 8 NY3d 478, 489 , quoting Walker at 405). Mere commission of a tort, even an intentional tort requiring proof of common law malice, is insufficient; there must be circumstances of aggravation or outrage, or a fraudulent or evil motive on the part of the defendant (Prozeralik v Capital Cities Communications, 82 NY2d 466, 479 ).
Neither defendants' alleged misrepresentations concerning their support for plaintiff's partner candidacy, nor the breach of their contractual promise to put him up for a partnership, evidence such a high degree of moral turpitude and wanton dishonesty as to imply criminal indifference. Cases involving mere fraudulent misrepresentations to induce a party to accept an employment agreement, do not warrant imposition of punitive damages (see Kelly v Defoe Corp., 223 AD2d 529 ).
As for plaintiff's cross motion, it is well settled that New York does not recognize an independent civil tort of conspiracy (Jebran v LaSalle Bus. Credit, LLC, 33 AD3d 424, 425 ; see Algomod Tech. Corp. v Price, 65 AD3d 974 , lv denied 14 NY3d 707 ). While a plaintiff may allege, in a claim of fraud or other tort, that parties conspired, the conspiracy to commit a fraud or tort is not, of itself, a cause of action (see MBF Clearing Corp. v Shine, 212 AD2d 478, 479 , citing Brackett v Griswold, 112 NY 454 ).
Given that civil conspiracy is not an independent tort, it cannot have its own independent measure of damages; any damages attributable to plaintiff's conspiracy claim exists only within those damages that may be assessed for fraud. Those damages, as previously determined by this Court, are "the difference between the immediately payable portion of the other firm's offer, such as the signing bonus, and the sum [plaintiff] received from defendant law firm immediately after agreeing to remain with defendant" (citations omitted)...We have previously held that plaintiff's damages may not include any amount based on continued employment with the other firm, since the duration and success of his career with that firm are speculative (citation omitted)
I'm having trouble with links. The case is Hoeffner v. Orrick, Herrington & Sutcliffe LLP, decided today. (Mike Frisch)
Monday, April 25, 2011
The Maine Professional Ethics Commission has issued an opinion on the propriety of a waiver of right to a jury trial in a retainer asgreement in the event of a dispute between attorney and client. The bottom line:
The Commission concludes that a client’s informed consent to a jury trial waiver in an engagement agreement must be confirmed in writing and that prior to agreeing to such a limitation, the client must be advised in writing of the desirability of seeking, and given a reasonable opportunity to seek, the advice of independent legal counsel. In contrast to arbitration agreements, there is no public policy favoring the waiver of jury trials, and a limitation that excludes the right to a jury trial has potentially serious constitutional dimensions. Hence, a jury trial waiver is of a commensurate level of importance with business transactions between lawyers and clients or the settlement of potential or actual claims for liability.
Clients range from extremely sophisticated business clients to those with limited mental capacity. What constitutes “informed consent” for different clients within that spectrum will, as a result, vary as will the resulting written confirmation. The sophisticated client will in all likelihood already understand that they can retain independent legal counsel when entering into an engagement agreement as they can with any other contractual arrangement. It costs nothing to inform that client of the desirability of doing so in the context of a jury waiver agreement, while for those clients who would have difficulty evaluating the desirability of such an agreement before a dispute has arisen, it emphasizes to them the importance of the issue.
The answer to the question posed is therefore that while the Maine Rules of Professional Conduct do not prohibit engagement agreements from stating that “[i]n the event that a dispute between us ends up in court, both parties agree that it shall be tried exclusively in a court in Maine without a jury,” they do require that the client be fully informed as to the scope and effect of a jury waiver, that the client’s informed consent be confirmed in writing, and that the client be advised in writing of the desirability of seeking, and given a reasonable opportunity to seek, the advice of independent legal counsel prior to entering into such an agreement.