Sunday, December 31, 2017

Muddied Waters

A Louisiana Hearing Committee proposes  disbarment of an attorney who had defaulted on four counts of misconduct.

Two of the cases were client-related lapses; two other counts involved domestic violence against two victims.

The client matters involved accepting fees and abandoning the clients.

As to the domestic violence:

On July 23, 2014, the attorney pinned the victim (his live-in girlfriend) to the ground and told her she "deserved to die." He then rose and menaced her with a leather belt but she was able to escape.

The attorney "who consumes chewing tobacco, spat tobacco saliva in her face." He also held a straight razor to her throat.

The other victim was the attorney's ex-wife, who he kicked in the knee in 2005 and pushed  in 2010.

When they were in a family law dispute, the attorney was ordered to take a drug test. He refused and was held in contempt.

On the day after the contempt finding, he announced that he was running to replace the judge in the family case.

A hearing committee filed a recommendation for disbarment in September for misconduct that included false allegations against the judge in the family law matter. The attorney falsely claimed that the judge had altered a transcript. 

There were two client misconduct matters in that case as well. 

Per the Times-Picayune

Gretna lawyer Juan Labadie...wants to unseat Judge Michael Mentz...during this fall's elections. Mentz, who was elected to the 24th Judicial District's Division F seat two years ago, is presiding over Labadie's ongoing custody battle with his ex-wife. On Monday (Aug. 11), Mentz held Labadie in contempt of court, finding that the lawyer failed to submit to a court-ordered drug test in connection with that domestic case. Hours later, Labadie, who had previously sought to have Mentz removed from his case, launched a political campaign to unseat him.

During a hearing at the Jefferson Parish Courthouse, Judge Michael Mentz ordered Gretna lawyer Juan Labadie to serve 30 days of house arrest. The judge held Labadie in contempt of court, punishing him for disregarding a court-ordered drug test in his child-custody battle with his ex-wife.

Just hours later, Labadie responded: He launched a campaign to unseat Mentz in the Nov. 4 election. Without mentioning the judge by name, Labadie shifted his contentious divorce case into a political battle for the Division F seat on the 24th Judicial District Court.

"The concept that no man is above the law seems to ring true more of a history lesson than real life," Labadie wrote in his campaign announcement. "That should not be. The principal should be a living, breathing concept that is actively applied every day in our courts."

Mentz would not comment directly but on Thursday confirmed he will seek re-election. Judges are ethically barred from publicly discussing cases over which they preside. In his campaign announcement, Mentz said that "litigants and their counsel know that in my court they have a fair and impartial judge."

He was elected to the bench two years ago, to fill the time left on the term of Patrick McCabe, who retired early. Now Mentz seeks a full six-year term.

Labadie denied Wednesday that his motivation to force Mentz into a campaign was spite for rulings he asserts are unlawful and seem to smack of "clear politics." Nor, he said, is he trying to do politically what he has been unable to do through the courts in recent months: Remove Mentz from his domestic case. "I don't have to run against him to get him off my case," Labadie said.

Mentz inherited Labadie's divorce case from McCabe when he took office Jan. 1, 2013. By then, Labadie and his ex-wife, Lori, already were divorced for more than two years. The couple had two children. He sued her for divorce in January 2010, and she countersued the following month, accusing him of adultery and saying he fathered twins with another woman, who works at the courthouse.

Labadie said he is still in a relationship with that woman. It's not always pretty, however, judging from his July 23 arrest on a charge of domestic abuse battery involving the woman. Labadie was released on a $1,000 bond and hasn't been formally charged. "It was blown completely out of proportion, and I will be completely exonerated of that," he said.

He said his dispute with Mentz dates from April, when his ex-wife asked the judge to order him to submit to a drug test. Her attorney wrote that Labadie had shown "a pattern of irrational behavior over the past month." She cited "rambling" and "incoherent" text messages he sent to her, and she pointed to a minor traffic wreck in Marrero on April 9, when his vehicle struck the rear of another car. One of their two children was in the car with him.

Labadie denied being on drugs. His attorney, Zoe Fleming, called Lori Labadie's accusations "false disgusting allegations."

"It has been an accumulated series of actions of the law -- I'm not going to say ignored -- not followed," Labadie said. "I finally said this is not right. If I'm going to complain about it, I should put my money where my mouth is."

The qualifying period for the fall ballot begins Wednesday and ends Aug. 22. Should they both sign up to run, Mentz likely would have to step off Labadie's domestic case.

If he goes through with his campaign announcement, Labadie faces an uphill battle. It's rare for a challenger to defeat a sitting judge in Jefferson Parish; most lawyers don't even try. Plus as a West Jefferson resident, Labadie, a lawyer for 18 years, would be campaigning in an East Jefferson election district against an East Jefferson resident who practiced law for 33 years before becoming a judge. Mentz, with the backing of business interests and some of the parish's elected officials, ran unopposed in 2012.

Lori Labadie asserted that she found pills and plastic bags for narcotics storage in their house after a failed attempt at reconciliation. Despite having no evidence to support the accusation, Labadie said, Mentz sided with her.

During the week of the wreck, Labadie was defending a Waggaman man standing trial on a charge of molesting a 5-year-old girl. Mentz also presided over that criminal case. So in preparing to defend himself against his ex-wife's accusations, Labadie subpoenaed the two prosecutors on the criminal case - and Mentz. The prosecutors and judge, Labadie said, could testify whether they observed erratic behavior in the courtroom during that trial.

That would make Mentz a witness in the domestic case. As such, he should no longer preside over it, Labadie said.

Over the next three months, the district attorney's office successfully argued against having its prosecutors testify in Labadie's domestic case and state Attorney General Buddy Caldwell's office intervened for Mentz. Judge John Molaison in June shot down the subpoena of Mentz and refused to remove him from the domestic case. An appeals court declined to intervene.

On Aug. 7, Mentz gave Labadie one day to submit to the drug screen that his ex-wife sought. Labadie didn't do it, and so on Monday the judge held him in contempt of court. He  ordered 30 days of house arrest and gave Labadie until Tuesday at noon to register with the home incarceration office or be jailed, according to court records. Mentz also said he would extend the house arrest 30 days if Labadie refused to submit to a drug screen.

Labadie found some relief Tuesday when the 5th Circuit Court of Appeal suspended Mentz's order. By Wednesday, he was released from house arrest, and the 5th Circuit reversed Mentz's contempt order, finding the judge did not give Labadie sufficient notice before holding a contempt hearing. Another hearing on the matter is scheduled for Monday.

"Case law holds you cannot be held in contempt for not following an unlawful order," Labadie said of the drug screen.

While Mentz wouldn't testify, Labadie said, the judge let his administrative assistant testify in a hearing last week on whether to hold Lori Labadie in contempt, for allegedly changing her phone's voicemail greeting to duck a telephone conference with the judge in April. Mentz hasn't ruled on that issue. But Labadie said that Mentz allowing his assistant to testify is more reason for why he shouldn't preside over the case.

He said he's not trying to dodge the drug screen to hide drug use. "This is a privacy issue, and this is a civil rights issue," he said.

"If submitted I would pass, but that's not the issue," he said. "My ex-wife has gotten exactly what she wanted out of this, which is to muddy the waters. And I'm not going to play that."

(Mike Frisch)

December 31, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Saturday, December 30, 2017

Lien Times In Idaho

The Idaho Supreme Court held that a discharged attorney had failed to profect the lien he had asserted on opposing counsel in litigation

This appeal from the Ada County district court concerns attorney liens under Idaho Code section 3-205. In March 2016, Eric R. Clark and Clark and Associates, PLLC (collectively, Clark) sued the law firm of Jones Gledhill Fuhrman Gourley, P.A., and two individuals associated with that firm—William Fuhrman and Christopher Graham (collectively, Jones Gledhill). Clark alleged that Jones Gledhill, as Clark’s former opposing counsel, was liable for failing to protect his attorney lien. Jones Gledhill moved to dismiss Clark’s amended complaint (complaint) under Idaho Rule of Civil Procedure 12(b)(6), and the district court granted the motion. In addition to dismissing Clark’s complaint, the district court sealed several documents containing correspondence with and information about Clark’s former clients, denied Clark’s motion to amend, and awarded attorney fees under Idaho Code section 12-121 to Jones Gledhill. We affirm.

The case

The genesis of this appeal is Forbush v. Sagecrest Multi Family Property Owners’ Association, Inc., 162 Idaho 317, 396 P.3d 1199 (2017), a tort case that was recently before this Court in which a water heater emitted hazardous levels of carbon monoxide, killing one and seriously injuring another. In Forbush, Clark initially represented the plaintiffs (Forbush plaintiffs), and Jones Gledhill represented two of the defendants, Anfinson Plumbing and Daniel Bakken (Forbush defendants). As his co-counsel, Clark enlisted the Spence Law Firm (Spence), but after approximately three years, irreconcilable differences came to plague Clark and Spence’s relationship, and Clark withdrew.

After withdrawing, in September 2015, Clark sent a letter to Jones Gledhill, which stated that he was “asserting an attorney lien according to I.C. § 3-205, which attaches to any settlement or verdict. Please include [Clark’s] name on any settlement checks payable to the [Forbush] plaintiffs or any other payments related to a verdict or judgment.”

A settlement between the Forbush defendants and the Forbush plaintiffs was reached in January 2016, at which time the Forbush defendants wrote a settlement check to the Forbush plaintiffs. Without informing Clark of the settlement, Jones Gledhill forwarded the settlement check to Spence. When Clark learned of the settlement and contacted Jones Gledhill, the enforceability of Clark’s claimed lien became disputed. Clark then filed a complaint against Jones Gledhill in March 2016, alleging Jones Gledhill had “breached [its] duty to protect Clark’s lien . . . .” Prior to filing this lawsuit, Clark had also filed lawsuits against Spence and the Forbush plaintiffs with claims arising from their alleged failures to protect Clark’s lien.

Jones Gledhill moved to dismiss Clark’s complaint under Idaho Rule of Civil Procedure 12(b)(6). Clark responded by filing a brief, declaration, and several exhibits revealing information about and correspondence with the Forbush plaintiffs, his former clients. Jones Gledhill moved to strike this information and correspondence. Moreover, the Forbush plaintiffs intervened and moved for the information and correspondence to be sealed as confidential client information. The district court granted Jones Gledhill’s motions to strike and to dismiss. It  further granted the Forbush plaintiffs’ motion to seal. Thereafter, Clark filed a motion to amend his complaint, but the district court denied the motion. Finally, the district court granted Jones Gledhill’s request for attorney fees under Idaho Code section 12-121, finding that Clark had pursued the case frivolously, unreasonably, and without foundation. Clark timely appeals.

No lien here

...the lien must first be created by an attorney’s “commencement of an action, or the service of an answer containing a counterclaim.” I.C. § 3-205. The lien must next attach to “a verdict, report, decision or judgment in his client’s favor and the proceeds thereof,” i.e., the res. Id. Finally, after creation and attachment occur, the lien must be foreclosed by taking the above-discussed affirmative steps in an adjudicative process. Frazee, 104 Idaho at 466, 660 P.2d at 931; accord Skelton, 102 Idaho at 73, 76, 625 P.2d at 1076, 1079.

In this case, Clark’s complaint is clear that, while lien creation and attachment occurred, foreclosure did not. Clark took no affirmative step to reduce his lien to a judgment or court order before the settlement proceeds were delivered to Spence. Clark merely sent a letter to Jones Gledhill claiming an uncertain amount of a lien and filed the instant action seeking to hold Jones Gledhill liable in tort, alleging that Jones Gledhill “owed Clark a duty to protect his lien” but had nonetheless “fail[ed] to protect his lien.” To the extent Clark’s complaint attempted to allege a claim to enforce his lien against Jones Gledhill, it failed to state a claim for relief.

Appellee was awarded attorneys' fees. (Mike Frisch)

December 30, 2017 | Permalink | Comments (0)

Friday, December 29, 2017

Crime Of The Heart Gets Former Prosecutor Disbarred

The New York Appellate Division for the Second Judicial Department found that an attorney's felony conviction resulted in her automatic disbarment

The Grievance Committee contends that the respondent’s conviction of the federal felony of illegal interception of communications under 18 USC §§ 2511(1)(a) and (4)(a) is essentially similar to the New York class E felony of eavesdropping (Penal Law § 250.05). Pursuant to Penal Law § 250.05, “[a] person is guilty of eavesdropping when he [or she] unlawfully engages in wiretapping, mechanical overhearing of a conversation, or intercepting or accessing of an electronic communication.” During the respondent’s plea allocution, she admitted that she was guilty of both counts of an indictment filed March 23, 2017, in that, between approximately 2015 and 2016, while working as an Assistant District Attorney for the Office of the Kings County District Attorney, she, inter alia, misappropriated that office’s equipment and facilities in order to illegally intercept and record the oral and electronic communications transmitted to and from two cellular telephones, and that she did illegally intercept, eavesdrop on, and record such communications.

We conclude that the respondent’s conviction of illegal interception of communications, in violation of 18 USC §§ 2511(1)(a) and (4)(a), constitutes a felony within the meaning of Judiciary Law § 90(4)(e). As such, upon her conviction of that crime, the respondent was automatically disbarred and ceased to be an attorney pursuant to Judiciary Law § 90(4)(a).

The New York Daily News reported the crimes

An ex-Brooklyn prosecutor in an ill-fated love triangle broke down as she admitted Monday to snooping on another prosecutor and a married detective with bogus wiretap orders.

"I knew my conduct was illegal," Tara Lenich said Monday in Brooklyn federal court, her voice going shaky while she fessed up to the forged judicial documents. "I'd just like to apologize and say I'm so sorry for my actions and for everyone that they affected."

That's when Lenich, 41, began to cry.

She needed a moment before she could continue with her guilty plea to the charges that derailed her high-flying position as deputy chief of the Brooklyn District Attorney's Violent Criminal Enterprises Bureau.

The case was done even before it started.

Just last Monday, Brooklyn federal prosecutors charged Lenich with two counts of illegal interception of communications. Those were the same charges she copped to a week later.

Lenich turned the clout and reach of her office and the state court system into her gossipy go-between — allegedly to keep up on what was up with Detective Jarrett Lemieux and Brooklyn Assistant District Attorney Stephanie Rosenfeld.

         For nearly 16 months, Lenich cut judges' signatures from real documents and put them on fabricated wiretap orders that would let monitor the pair's cellphones.
(Mike Frisch)

December 29, 2017 | Permalink | Comments (0)

Discovery Rule In Legal Malpractice

The United States Court of Appeals for the District of Columbia Circuit has held that a legal malpractice case survives the pleading stage

This legal-malpractice action arises from Defendant Michael M. Davidson’s representation of Houshang and Vida Momenian (the “Momenians”) in a lawsuit filed in D.C. Superior Court on August 18, 2009 (the “2009 Litigation”). The Momenians settled the 2009 Litigation on October 12, 2010, but allege Defendant failed to explain that the settlement meant all of their claims were fully and finally dismissed. On May 6, 2015, the Momenians (collectively with the Houshang Momenian Revocable Trust, “Plaintiffs”) sued Defendant for, inter alia, his allegedly negligent settlement advice. Defendant moved to dismiss pursuant to the three-year statute of limitations, arguing that if Plaintiffs had exercised reasonable diligence investigating their claims, they would have been on notice of the cause of action at some point prior to May 6, 2012. Defendant also moved to dismiss for failure to state a claim on the merits.

The District Court twice dismissed the complaint as untimely: first with leave to amend, and second with prejudice, concluding that Plaintiffs’ amended complaint failed to allege facts sufficient to overcome the timeliness bar. The District Court engaged in a thorough and careful analysis of the timeliness issue. However, taking the allegations of the complaint as true and drawing all reasonable inferences in Plaintiffs’ favor, we do not agree that Plaintiffs’ claims are conclusively time barred at the pleading stage.

Under the circumstances of this case, including the parties’ attorney-client relationship, Plaintiffs’ efforts to check in with Defendant about the 2009 Litigation every three months following the 2010 settlement plausibly fulfilled their duty to investigate their affairs with reasonable diligence. It is therefore plausible that Plaintiffs’ claims did not accrue prior to May 6, 2012. Accordingly, we reverse and remand for proceedings consistent with this opinion.

The court on the discovery rule in legal malpractice claims

Where an injury is by its nature not readily apparent, D.C. courts apply a more forgiving “discovery rule” under which a claim accrues only if a plaintiff has actual or inquiry notice of a cause of action, regardless of when the injury occurred.

...the existence and nature of a fiduciary relationship are important aspects of the relevant circumstances a court assesses to determine whether a plaintiff exercised reasonable diligence investigating claims against her fiduciary. BDO Seidman, 89 A.3d at 500 (“The analysis is highly factbound and requires an evaluation of all of the circumstances, including the conduct and misrepresentations of the defendant, the reasonableness of plaintiff’s reliance on the defendant, and the existence of a fiduciary relationship between the parties.” (quotation marks omitted)). A fiduciary relationship between a plaintiff and defendant may “reduce the significance of[] any lack of diligence on [a plaintiff’s] part,” and courts have given heightened protection to a client’s reliance upon her lawyer’s advice and representations when evaluating a plaintiff’s reasonable diligence investigating malpractice claims. See Drake v. McNair, 993 A.2d 607, 620 (D.C. 2010); Ray, 747 A.2d at 1142 (collecting cases)...

We conclude Plaintiffs’ allegations plausibly demonstrate reasonable diligence under the circumstances here. Assuming the posture of review on a motion to dismiss, we are not persuaded that calling one’s lawyer every three months to check in on a case, and relying on the lawyer’s assurances that he was “working on it,” is insufficient to fulfill a plaintiff’s duty to investigate her affairs. See Ray, 747 A.2d at 1142. It is plausible that a reasonable person would rely on an attorney’s regular assurances that he was working on a case and feel no need to investigate further, at least not after only eighteen months. Indeed, it is common knowledge that litigation often lasts for years.

Circuit Judge Wilkins authored the opinion. (Mike Frisch)

December 29, 2017 in Clients | Permalink | Comments (0)

What's Right With Kansas

You do not see many bar discipline cases in the Midwest defended by high-profile Washington, D.C. lawyers from the law firm Williams & Connolly. 

A disbarment imposed by the Kansas Supreme Court today is one.

This is a contested attorney discipline proceeding against Rickey Edward Hodge, Jr., who was admitted to practice law in Kansas in September 2008. A panel of the Kansas Board for Discipline of Attorneys made lengthy findings of fact and concluded Hodge violated the Kansas Rules of Professional Conduct (KRPC) while representing a financially distressed Wichita-based landscaping company. Highly summarized, Hodge attempted to purchase the company's assets, as well as an 80-acre ranch held by the company's majority shareholder. The accusations involve conflict of interest, client exploitation, and self-dealing.

After five days of hearings, spread out between October 2015 and March 2016, the  panel unanimously determined that Hodge violated KRPC 1.7 (2017 Kan. S. Ct. R. 300)
(concurrent conflict of interest); 1.8(a) (2017 Kan. S. Ct. R. 307) (conflict of interest arising from entering business transaction with client), and 1.8(b) (using information to the client's disadvantage); 4.2 (2017 Kan. S. Ct. R. 353) (communication with person represented by counsel); and 8.4(g) (2017 Kan. S. Ct. R. 379) (engaging in conduct adversely reflecting on lawyer's fitness to practice law). The panel unanimously recommended Hodge be disbarred.

The court here affirmed the hearing panel's conclusions in a 97-page opinion laying out the current client conflicts, business transactions with a client misconduct and unauthorized communications.

The entire panel report is recited in the opinion.

Oral argument video linked here.

The story, as argued by Deputy Disciplinary Administrator, is "factually dense."

I also approvingly note the practice of the court in hearing argument of the attorney personally after counsel speaks. Sometimes (as here) it is painful to watch.  (Mike Frisch)

December 29, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Fiduciary Breach Claim Against Willkie Farr Survives

A legal malpractice claim was untimely but a breach of fiduciary duty claim survives, according to an opinion of the New York Appellate Division for the First Judicial Department.

In January 2001, nonparty Ramius Securities LLC hired plaintiff Dennis T. Palmeri, Jr. to serve as manager of its stock lending securities department. At some point in 2007, the Financial Industry Regulatory Authority (FINRA) began a regulatory investigation seeking information on the use of so called finders in Ramius's stock lending business. In December 2007, after having received information from Ramius in response to its initial requests, FINRA served both Ramius and plaintiff with letter requests for additional information regarding transactions that had included a finder's fee.

In preparing his responses to the FINRA request, plaintiff conferred with Ramius's General Counsel and its Chief Operating Officer, both of whom were attorneys. Plaintiff alleged that the GC and the COO informed him they were "there as his counsel," allegedly leading plaintiff to believe that an attorney-client relationship was formed.

Plaintiff left Ramius's employ in 2008. In early 2009, plaintiff retained defendant Willkie Farr & Gallagher LLP to represent him in connection with the FINRA investigation. Before undertaking any representation of plaintiff, defendant informed plaintiff that Ramius, which was then a client of defendant, would not accept any situation in which defendant was adverse to Ramius. At the same time, defendant noted that it did not foresee any set of circumstances in which plaintiff would be adverse to Ramius. Defendant sent plaintiff an engagement letter dated January 14, 2009; the letter made no mention of any conflict of interest arising from defendant's representation of both plaintiff and Ramius, nor did it enumerate the rights plaintiff would have if he and Ramius were to become adverse. Approximately one month afterward, in connection with the same FINRA investigation, Ramius also retained defendant to represent it and certain of its current or former employees.

On or about January 27, 2009, defendant represented plaintiff during his investigative examination before FINRA. In June 2009, however, defendant informed plaintiff that defendant could no longer represent him because of a conflict of interest concerning defendant's concurrent representation of Ramius and its current and former employees, and unilaterally terminated its representation of him on June 25, 2009. By letter dated September 23, 2009 from defendant to FINRA, defendant appeared to shift to plaintiff all or most of the responsibility for any alleged violations of FINRA's rules.

In January 2010, Ramius entered into a letter of acceptance, waiver, and consent (AWC) with FINRA; defendant negotiated the letter on Ramius's behalf. The AWC absolved Ramius and its employees of further liability.

On or about December 1, 2010, FINRA commenced a disciplinary proceeding against plaintiff, alleging that he had made false and misleading statements to Ramius's chief compliance officer during the FINRA investigation, thus causing Ramius to give inaccurate responses to FINRA.

The hearing on the disciplinary proceeding was held on June 28 and 29, 2011. In the months leading up to the hearing, defendant communicated with FINRA about matters related to the hearing, such as testimony to be given by Ramius employees. Moreover, at the hearing, defendant was present on behalf of Ramius and Ramius employees who testified.

By decision dated on or about November 18, 2011, the hearing panel dismissed the complaint, finding that FINRA had failed to prove by a preponderance of the evidence that plaintiff had violated FINRA rules. The panel also determined that certain of the Ramius employees who testified were not credible. On February 15, 2013, upon FINRA's appeal, the National Adjudicatory Council for FINRA upheld the hearing panel's dismissal of the FINRA complaint against plaintiff.

In the complaint in this action, dated February 15, 2013, plaintiff asserted causes of action against defendant for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, gross negligence, professional negligence, breach of contract, and breach of the implied covenant of good faith and fair dealing. Plaintiff alleged that defendant, during its representation of Ramius in the FINRA investigation, shifted all responsibility for any alleged violations of FINRA's rules to him, suggesting that plaintiff undertook certain wrongful actions without Ramius's knowledge. Plaintiff further asserted that defendant disclosed to FINRA his internal, privileged communications with Ramius's counsel, thus causing FINRA to assert charges against Palmieri. Moreover, plaintiff alleged that defendant disclosed information that it had learned during the time it represented him. Plaintiff also alleged that the FINRA complaint was primarily based on privileged statements he had made to counsel at Ramius, and that these statements were also disclosed during the course of Willkie's representation of Ramius after it ceased representing him.

Defendant moved under CPLR 3212 to dismiss the complaint as time-barred and for failure to state a claim. Plaintiff cross- moved for summary judgment in his favor. In its decision, which it read into the record, the IAS court found that all six of plaintiff's claims were premised on the same operative facts and sought identical monetary damages. Accordingly, the IAS court "merged" plaintiff's claims for gross negligence, breach of contract and breach of the implied covenant of good faith and fair dealing into his legal malpractice claim, leaving for consideration only that claim and claims based on breach of fiduciary duty.

The IAS court then dismissed both claims as untimely. Because plaintiff sought purely monetary damages, the court applied the three-year statute of limitations to the breach of fiduciary duty claim, rather than the six-year period. The court held that the claim was time-barred, since plaintiff filed it in February 2013, more than three years after defendant represented him from January through June 2009.

To begin, the motion court properly dismissed plaintiff's claims for gross negligence, breach of contract, and breach of the implied covenant of good faith and fair dealing as duplicative of his legal malpractice claim, given that they are all based on the same facts and seek the same relief (Sun Graphics Corp. v Levy, Davis & Maher, LLP, 94 AD3d 669 [1st Dept 2012]).

Plaintiff's claim for legal malpractice, in turn, is untimely. Claims for legal malpractice are subject to a three-year statute of limitations and accrue when the malpractice is committed, not when the client learns of it (Lincoln Place, LLC v RVP Consulting, Inc., 70 AD3d 594 [1st Dept 2010], lv denied 15 NY3d 710 [2010]; CPLR 214[6]). Plaintiff's legal malpractice claim first accrued on or about June 25, 2009, when defendant terminated its legal representation of him, but continued to represent Ramius in the ongoing FINRA investigation. He did not, however, file his claim until February 15, 2013, more than three years later.

In addition, the motion court correctly dismissed the claim for aiding and abetting a breach of fiduciary duty, as plaintiff is collaterally estopped from relitigating the question of whether an attorney-client relationship existed between him and his employer's in-house counsel. The identical issue was decided in the FINRA proceeding and plaintiff had a full and fair opportunity to litigate it before FINRA (see Jeffreys v Griffin, 1 NY3d 34, 39 [2003]; Auqui v Seven Thirty One Ltd. Partnership, 22 NY3d 246, 255 [2013]).

However, the IAS court should have permitted the breach of fiduciary duty claim to proceed. The IAS court correctly noted that the claim was subject to a three-year statute of limitations. The court was mistaken, however, in finding that the allegedly wrongful conduct ended on June 25, 2009, when defendant unilaterally terminated its representation of plaintiff. On the contrary, defendant's conduct extended through at least June 29, 2011, during which time it represented Ramius and its employees in their participation at plaintiff's FINRA disciplinary hearing.

Here, plaintiff alleges not only that defendant breached its fiduciary duty when it terminated its professional relationship with him, but also when, until at least June 2011, it acted in a manner directly adverse to his interests. Where there is a series of continuing wrongs, the continuing wrong doctrine tolls the limitation period until the date of the commission of the last wrongful act (Harvey v Metropolitan Life Ins. Co., 34 AD3d 364 [1st Dept 2006]; see also Ring v AXA Fin., Inc., 2008 NY Slip Op 30637[U] [Sup Ct, NY County 2008] [applying continuing violations doctrine to General Business Law § 349 claim where initial payments occurred outside statute of limitations but "the insurer [] continued to bill, and ... [plaintiff] ... continued to pay" within three years of filing suit]).

Here, plaintiff has presented evidence of a "continuing wrong," which is "deemed to have accrued on the date of the last wrongful act" (Leonhard v United States, 633 F2d 599, 613 [2d Cir. 1980], cert denied 451 US 908 [1981]; Harvey, 34 AD3d at 364). Indeed, the record contains evidence sufficient to create an issue of fact as to whether defendant breached its fiduciary obligations to plaintiff after June 2009 and well into June 2011 during its ongoing representation of the Ramius parties.

For example, as noted, the record contains evidence that in the early portion of 2011, defendant helped Ramius identify witnesses who would testify against plaintiff at his FINRA disciplinary hearing. Similarly, defendant was present on behalf of Ramius and Ramius employees who testified at plaintiff's FINRA hearing on June 28 through 29, 2011 — a hearing at which the employees gave testimony that was generally adverse to plaintiff's interests. This evidence is sufficient for a fact-finder to determine that defendant breached its duty of loyalty to plaintiff, a former client (see Cooke v Laidlaw, Adams & Peck, 126 AD2d 453, 456 [1st Dept 1987] [ethical standards applying to the practice of law impose a continuing obligation upon lawyers to refuse employment in matters adversely affecting a client's interests, even if the client is a former client]).

(Mike Frisch)

December 29, 2017 in Clients | Permalink | Comments (0)

Claims Rejected

A divided Wisconsin Supreme Court has ruled in favor of the defendants in a claim brought by an ex-fiancee attorney against a prominent businessman who, among other things, operates a chain of midwestern home improvement stores.

First, at the time Sands and Menard met, Menard, Inc. had been a business for almost forty years, and Menard was already a multi-millionaire. Sands, meanwhile, was a graduate of law school operating at least three separate businesses with her sister in St. Paul, Minnesota. Therefore, while Menard's net worth was undoubtedly higher than Sands', both parties had sufficient financial means and business acumen. We therefore reject any comparison of Sands' contributions to those of Sue Ann Watts, who helped James Watts begin and grow his landscaping business, or to those of Sandra Ward, whose contributions allowed Dennis Jahnke to save $11,000 for the down payment on a house. In each of those cases, the parties had very little, and it was only through their joint efforts that their assets or property increased. Sands, however, did not support Menard as he built his empire; he already had it when they met.

Second, we note the inherent differences between how Sue Ann and James Watts conducted themselves, and how Sands and Menard conducted themselves during their respective relationships. Sands has not alleged that during their relationship she and Menard commingled finances, filed joint tax returns, or made joint purchases of real and/or personal property. Sands did not obligate herself to any business or personal debt Menard incurred. Given these undisputed facts, we conclude that Sands and Menard were not engaged in a "joint enterprise" as required under Watts.

As to the business transaction rule

In light of our conclusion that Sands has failed to allege facts which, if true, would support what she has styled as a Watts unjust enrichment claim, analyzing whether her claim also is barred by SCR 20:1.8(a) may not seem necessary. Nonetheless, because the question of whether a Supreme Court Rule can be used as an absolute defense against an attorney in a civil action is an important issue, we address it here. For the reasons stated below, we conclude: (1) the court of appeals erred in holding SCR 20:1.8(a) created an absolute bar to Sands' unjust enrichment claim; and (2) although SCR ch. 20 may not be used as an absolute defense to a civil claim where an attorney is a party, SCR 20:1.8(a) may guide courts in determining whether those standards of care that generally are required of lawyers have been met.

...we conclude that SCR ch. 20 does not apply here for at least two reasons. First, Supreme Court Rules that regulate the ethical practice of law in Wisconsin cannot be used as an absolute defense in a civil action in which an attorney is a party. In that regard, we clarify Foley Ciccantelli to so hold. Second, Sands' provision of legal services was not the practice of law, as we defined the practice of law in Mostkoff; therefore, she was not entitled to membership in the State Bar of Wisconsin during the times relevant to her Watts claim. Accordingly, she was not subject to SCR 20:1.8(a).

Sands was admitted to practice in Minnesota. 

The court affirmed the dismissal of a counterclaim.

Justice Abrahamson dissented

Unlike the majority, I conclude that Debra Sands pleaded sufficient facts to establish an unjust enrichment claim under Watts v. Watts, 137 Wis. 2d 506, 405 N.W.2d 303 (1987), against John R. Menard, Jr.  I would remand Sands' unjust enrichment claim against Menard to the circuit court for trial. Accordingly, I dissent from the majority's contrary conclusion.

The Court of Appeals decision is linked here.

Urban Milwaukee reported on Menard in this 2013 story. (Mike Frisch)

December 29, 2017 | Permalink | Comments (0)


From the web page of the Ohio Supreme Court

The Ohio Board of Professional Conduct has issued two new ethics guides to assist the bar and bench with issues commonly faced when changing law firms or leaving the practice of law when becoming a judge.

The Ethics Guide on Switching Law Firms provides guidance on ethical issues that must be addressed when a lawyer switches from one law firm to another. The guide emphasizes the importance of protecting clients’ interests and ensuring clients have the right to choose who represents them. The guide provides practical ethics advice on issues such as confidentiality, notice to clients, and conflicts of interest. The guide includes sample forms for lawyers and law firms to use when a lawyer changes firms.

The Ethics Guide on Transition from the Practice of Law to the Bench addresses the necessary steps an incoming judge must take to wind up his or her legal practice and prepare for the role of judge. The first steps outlined by the guide focus on the duties owed to clients to ensure that their ongoing matters, files, and property are timely and properly transitioned to new counsel. The guide references financial and practical matters related to the receipt of earned fees and settlement proceeds, retirement and partnership benefits, as well as the sale of a law practice. The guide also details whether a new judge should consider recusal in light of appearances by former partners, associates, clients, and defendants.

These new guides mark the third and fourth ethics guides issued by the Board of Professional Conduct. Earlier this year, the Board issued the Ethics Guide on Succession Planning and, in 2016, the Board issued the Ethics Guide on File Retention. Ethics Guides provide nonbinding advice from the staff of the Board based on frequent inquiries from the Ohio bench and bar.

(Mike Frisch)


December 29, 2017 in The Practice | Permalink | Comments (0)

Thursday, December 28, 2017

Interference Draws Censure

The New York Appellate Division for the Third Judicial Department censured an attorney who interfered with a representation

These violations arose from respondent's interference with an attorney's representation of a child in a custodial matter. Respondent's own client was involved in the aforementioned custodial matter with her then husband in Supreme Court. Subsequently, respondent was retained by his client to represent her in an unrelated civil matter against her then husband. At some point after he was retained, respondent notified the court ordered attorney for the client's child (hereinafter the AFC) in the custodial matter that he represented both his client and her child in a civil matter against his client's husband, and that he would not allow the child to attend a scheduled meeting with the AFC, nor would he allow any further meetings.

The AFC complained to the Supreme Court

Supreme Court ultimately found respondent in contempt and ordered him to pay a $5,000 sanction to the Lawyers' Fund for Client Protection within 60 days. Respondent failed to comply with that order, despite multiple directives by Supreme Court to do so. Supreme Court then determined that respondent had willfully violated its order and imposed an additional $500 sanction along with a 15-day jail sentence. Following his unsuccessful appeal and denial of his motion to stay enforcement before this Court, respondent appeared before Supreme Court and was remanded to county jail, which finally prompted him to discharge the sanctions levied against him.


Taking note of the magnitude of respondent's misconduct, lack of a disciplinary record and his expressed remorse, we find that public censure is an appropriate sanction and consistent with our prior precedent.

Details here in the appeal of the contempt. (Mike Frisch)

December 28, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Judges On Parade

From the web page of the Ohio Supreme Court

The Board of Professional Conduct issued an advisory opinion concerning the permissibility of judges appearing in community parades.

In Advisory Opinion 2017-8, the board concludes that a judge may appear in a community parade, regardless of whether the parade is held in an election year. A judge is not barred by the Code of Judicial Conduct from appearing in a parade in a non-election year, even if the activity may be considered “campaigning.”

Judges generally are encouraged by the Code of Judicial Conduct to participate in community activities. However, participation is only permitted if it will not undermine the independence, integrity, or impartiality of the judge.  For that reason, the opinion recommends that a judge consider the nature and purpose of the organization sponsoring a parade before agreeing to participate. Participation in a parade organized by a group that practices discrimination is prohibited by the Code of Judicial Conduct. Participation in a parade sponsored by an entity that is promoting a particular position on a controversial issue may later call into question the judge’s impartiality in cases involving the same issue.

The opinion further advises that judges avoid the appearance of a political endorsement by not walking with or riding in a parade with non-judicial candidates. The same advice applies to appearing with officeholders with whom the judge may frequently interact, including prosecutors and sheriffs, because of the potential for eroding judicial independence and impartiality.

The opinion withdraws former Advisory Opinion 1993-09.

(Mike Frisch)

December 28, 2017 in Judicial Ethics and the Courts | Permalink | Comments (0)

Indefinite Suspension Of Former Judge For Domestic Violence

The Ohio Supreme Court declined to impose disbarment of a former judge for a serious act of domestic violence

We agree with the board that Mason committed the violations alleged in the complaint. However, we disagree with the board that disbarment is the appropriate sanction for Mason. Instead, we impose an indefinite suspension with no credit for time served on the interim felony suspension and with added conditions for reinstatement.

The case

When the misconduct in this case occurred, Mason was a sitting judge on the Cuyahoga County Court of Common Pleas, General Division. During all relevant times, he was subject to the Code of Judicial Conduct as well as the Rules of Professional Conduct.

In March 2014, Mason and his wife, Aisha Fraser Mason (“Fraser”), separated, with Mason continuing to live in what was the marital home and Fraser residing in an apartment. During their separation, Mason and Fraser shared equally in the custody and parenting of their two minor children.

On August 2, 2014, Mason, Fraser, and the children attended a funeral service for Mason’s aunt. Mason and Fraser agreed that after the service, Mason would drop Fraser off at her apartment and Mason would spend the afternoon with the children.

During the ride to Fraser’s apartment, the couple engaged in a conversation about their relationship. As the discussion progressed, Mason became upset and began assaulting Fraser, all the while continuing to drive. Mason struck Fraser repeatedly in the head, hit Fraser’s head against the armrest, the dashboard, and the window of the passenger door, and bit Fraser on her face. Fraser attempted to escape the moving car, but Mason grabbed her hair. When the car stopped at a red light, Fraser was able to open the door, but fell to the ground as she tried to flee. With the two children still in the car, Mason placed the vehicle in park, got out, and began to strike Fraser as she lay on the ground.

Mason then returned to his vehicle and drove away, leaving Fraser behind. Mason and Fraser’s two children (ages six and four at the time) were seated in the back seat and witnessed the events. The older child, who has special needs and possesses limited verbal abilities, was quiet while the attack was occurring, but the younger child was screaming.

Upon arriving at the house, Mason called his sister, Dr. Lynn Mason, and asked her to come and pick up the two children because he intended to shoot himself. He was arrested by police later that day.

 As a result of the attack, Fraser sustained severe physical harm to her head, face, and neck, including an orbital blowout fracture under her left eye. She was hospitalized overnight from August 2-3, 2014, following the attack, and again from August 8-9, 2014, for surgery. Fraser subsequently arranged for her two children to begin counseling. As of February 2017, they continued to receive counseling as a result of what they witnessed on August 2, 2014.

He was removed from office and pleaded guilty to felony charges.

Sanction less than disbarment

In this case, Mason was convicted of a felony based on a single violent assault. Brutal it surely was. But it was not shown to be premeditated or part of a pattern of behavior. In this regard, we consider this case to be distinguishable from those cited by the board. Instead, we look to Ohio State Bar Assn. v. McCafferty, 140 Ohio St.3d 229, 2014-Ohio-3075, 17 N.E.3d 521. In that case, a sitting judge was convicted of lying to the Federal Bureau of Investigation. This court imposed an indefinite suspension with no credit for time served. We distinguished previous cases, including those cited by the board in this case: “[T]he circumstances in this case can be distinguished from Gallagher, McAuliffe, and Hoskins, in which judges were permanently disbarred. In those cases, the judges had engaged in criminal conduct over a period of time, from a few days to months, and the misconduct was preplanned.” Id. at ¶ 23. We emphasized that McCafferty’s violations were unplanned and occurred on a single impromptu occasion, rather than as a pattern of premeditated criminal conduct. Id. at ¶ 24. Therefore, we concluded, “imposition of the system’s most severe sanction [was] not warranted * * *.” Id.

The court imposed an indefinite suspension with conditions for reinstatement.

The oral argument is linked here. (Mike Frisch)

December 28, 2017 in Bar Discipline & Process, Judicial Ethics and the Courts | Permalink | Comments (0)

Bad News

The Pennsylvania Supreme Court accepted the consent disbarment of an attorney convicted of mail fraud.

Note the new look for the Disciplinary Board web page (linked to recent actions)

The story from of the charges from the Observer-Reporter. 

A suspended Charleroi attorney who publishes a Mon Valley newspaper has been accused in federal court of stealing more than half a million dollars from a client with Alzheimer’s disease and using some of it to finance his newspaper.

Keith Alan Bassi, 61, used a general power of attorney to steal the money from a woman identified in court records as “N.J.L.,” beginning in 2012 when she was diagnosed as having dementia and Alzheimer’s, prosecutors allege in the bill of information filed Monday.

Bassi intends to waive the grand jury indictment, which charges him with three felony counts of mail fraud, and the court will schedule a date for him to enter a plea, said Margaret Philbin, spokeswoman for Acting U.S. Attorney Soo Song in Pittsburgh. Bassi had yet to enter an attorney of record in the case, she said.

 The bill of information accuses him of using about $110,000 to fund his publication, Mon Valley Independent of Monessen, and using other funds stolen from the woman for his personal use, the record shows.

He also is accused of using the woman’s money to pay premiums on a $1.2 million life insurance policy insuring him, with death benefits going to a person identified only as B.B., who is not a defendant, according to the record signed by Song. In September 2016, Bassi filed a “surrender request” for the policy and received a check from the insurance company for $163,086, which he deposited into his money market account, prosecutors said.

Bassi, of 109 Mood Lane, Jefferson Township, Fayette City, hasn’t practiced law since June at Bassi, Vreeland and Associates in Charleroi, the state Supreme Court said last month when his suspension was announced. The temporary suspension became effective Sept. 15, and there has been no further action by that court regarding Bassi’s status.

The power of attorney executed by N.J.L. gave Bassi permission to authorize the spending of money for her “material care, investments and compensation for services rendered,” the prosecution stated in the record. She has been in the dementia unit of a care facility since 2015 and has no living family members other than distant cousins.

Bassi is accused of drawing $50,000 from the woman’s assets in February 2016 and depositing the money into a checking account at CFS Bank held in the name of Mid-Mon Valley Publishing Co., which he owns with three other investors. Additionally, he is accused of drawing $60,000 from her assets between July and August 2016 and depositing it into a payroll account at the bank used to operate the newspaper, court records claim.

 It also is alleged that Bassi diverted $74,876 of the woman’s money into his personal checking account at CFS between November 2013 and May 2014. Another $136,473 was stolen from her in July 2016 and deposited into his savings account, the prosecution alleges. Bassi was previously listed as general counsel for CFS, also based in Charleroi.

He also is accused of opening a money market account at a PNC branch in September 2016 with a deposit of $72,429 from the woman’s assets.

Bassi is expected to forfeit $235,515 held in his PNC money market account. The federal government also will seek a judgment against Bassi of at least $269,616 to settle the case, the record shows.

Bassi could not be reached for comment Tuesday.

The same source reported on his guilty plea. (Mike Frisch)

December 28, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Stealing From Widow Draws Disbarment

The New York Appellate Division  for the Second Judicial Department disbarred an attorney who admitted to willful misappropriation.

The respondent acknowledges in her affidavit that her resignation is freely and voluntarily rendered, and t hat she is not being subjected to coercion or duress by anyone. She acknowledges that she is the subject of a disciplinary charge pending before this Court, as set forth in a verified petition dated August 9, 2017, alleging willful misappropriation of money or property. The respondent acknowledges that she could not successfully defend herself against the allegations based upon the facts and circumstances of her professional conduct. Further, she acknowledges that she is fully aware of the implications of submit t ing her resignation, including that the Court’s acceptance and approval shall result in the entry of an order of disbarment striking her name from the roll of attorneys and counselors-at-law

The Huntington Patch reported on related criminal charges

The founding partner of a Huntington-based personal injury and medical practice law firm was arraigned Friday for stealing more than $800,000 from a widowed client's settlement fund, according to Suffolk County District Attorney Thomas Spota.

Carol Schlitt, 58, of Huntington Bay, represented a widow in a wrongful death action involving the woman's deceased husband, the DA said. Schlitt held the money from the settlement of the wrongful death action in an escrow account and embezzled the money for her personal use, the DA said.

"Our investigation found that even after obtaining a significant fee in excess of $400,000, the defendant over a four year period siphoned off over $800,000 of the widow's settlement funds," Spota said in a press release.

The Schlitt Law Firm has an office located at 79 Wall St. in Huntington Village. The firm's website says it is currently down for maintenance and its Facebook page "isn't available right now."

Patch called the Schlitt Law Firm's number and left a message for Schlitt. Patch also sent an email to the Schlitt Law Firm requesting a statement regarding Schlitt's charges.

(Mike Frisch)

December 28, 2017 in Bar Discipline & Process | Permalink | Comments (1)

Wednesday, December 27, 2017

Not A Term Of Endearment

An oral argument before the Kansas Supreme Court in December 2017 deals with an attorney's admitted misconduct in his interactions with a prospective female client in a domestic matter.

In the initial telephone call, the attorney referred to the prospective client as "baby" and, as a result, she decided to record the rest of the conversation. 

He ended with the statement advising her to "don't wear underpanties" when they met.

She filed a complaint with the Disciplinary Administrator instead. 

The issue before the court is whether to impose probation or a suspension. (Mike Frisch)

December 27, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Monday, December 25, 2017

Struck Off But Otherwise Famous

The web page of Victorian (Australia) Legal Services Board + Commissioners reports a recent sanction

A former Melbourne solicitor has been struck off after pleading guilty to committing a multi-million dollar fraud against two banks.

Mr Denis Angeleri, formerly of the law practice Angeleri & Co, was struck off by the Supreme Court of Victoria following an application brought by the Victorian Legal Services Board.

The Board told the Court that in May 2015 Mr Angeleri had been found guilty by the County Court of using his position as a company director to defraud two major banks of $24.7 million through 885 false loans. The Board explained Mr Angeleri was also found to have persuaded individuals to invest a total of $900,000, but had lied about both the terms and conditions and the security that would be provided for their investments.

The County Court had sentenced Mr Angeleri to a total of 13 years’ imprisonment after he pleaded guilty to 19 criminal charges brought by Victoria Police involving conspiracy to defraud, theft, obtaining property by deception and obtaining financial advantage by deception.

Board Chairperson, Ms Fiona Bennett, welcomed the Court’s decision.

‘Disgraceful conduct such as that displayed by Mr Angeleri casts a shadow over all lawyers. This strike-off decision is the culmination of several years’ work to make Mr Angeleri accountable for his actions, and is the most severe civil sanction that can be brought against a legal practitioner under Victorian law,’ Ms Bennett said.

The Supreme Court order

The plan was elaborate, sophisticated and well planned and no stone was left unturned to avoid detection either by the banks themselves or by auditors. In this way, the offending proceeded unabated and undetected for nearly seven years. The enormity of the fraud meant that the false loans were monitored on a daily basis by those involved in the fraud including you.

The Age Victoria had the complicated  story involving four defendants

The company [Australia Motor Finance] had apparently begun well. It occupied a niche in the Australian market that was ripe for plucking before the global financial crisis.

It had attracted funding from National Australia Bank and from private investors. Many of these were friends and family lured into the business by Porcaro.

But as early as 2003, it was struggling to make ends meet.

"You were self-insuring, the lending practices were reckless, you were being pursued by the banks and you should have simply closed the business down," County Court chief judge Michael Rozenes said in sentencing O'Brien.

Instead, Angeleri developed a plan to create fake loans to get enough money to cover the problems. In some cases, money flowed in a mad loop: borrowed from the bank on the back of a fake loan and then paid back to the bank to meet the payments on an old loan. In the end, AMF had written more than $24 million of fake loans.

"The plan was elaborate, sophisticated and well planned and no stone was left unturned to avoid detection either by the banks themselves or by auditors," said County Court judge Paul Lacava In sentencing Angeleri. "This way, the offending proceeded unabated and undetected for nearly seven years."

That morning, Stephanie didn't make it to work. As a result, the job of prepping the paperwork was given to someone more junior.

He didn't follow the normal drill. Instead of passing the loan documents to someone ready to doctor them, he sent them straight to the bank.

And alarm bells started ringing.

Angeleri was the mastermind of the scheme. He is otherwise famous for being the husband of the woman credited with putting Liz Hurley off her flirtation with Shane Warne.

Angeleri's wife, Adele, received a string of racy text messages from the cricketing legend in 2010. The texts came as Warne's relationship with supermodel Hurley was front-page news.

Denis Angeleri responded to Warne's advances with a twitter campaign that included the memorable tweet "The only thing Shane Warne is interested in is his dick." Hurley later referred to the episode as "Jerry Springer-esque".

The story ran in London's News of the World the day before Angeleri was ordered to pay $4.8 million in damages for his role in the AMF fraud.

Details on l'affaire Hurley here from the Daily Mail. (Mike Frisch)

December 25, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Sunday, December 24, 2017

Informed Consent Required To Enforce Arbitration Of Legal Malpractice Claim

The Maine Supreme Judicial Court held an agreement to arbitrate legal malpractice was unenforceable against the former client absent informed consent

Bernstein, Shur, Sawyer & Nelson, P.A., and J. Colby Wallace  (collectively, Bernstein) appeal from a Superior Court (Cumberland County,  Warren, J.) order denying its motion to compel arbitration in a legal  malpractice claim filed against it. Bernstein contends that the court erred  when it concluded that Bernstein failed to obtain informed consent from its  client, Susan Snow, to submit malpractice claims to arbitration, and that  federal law does not preempt a rule requiring attorneys to obtain such  informed consent from their clients. We agree with the Superior Court and  affirm the judgment.

The firm sought to compel arbitration citing language in a document attached to the retainer agreement

In the event of a fee dispute that is not readily resolved,  you shall have the right to submit the fee dispute to arbitration  under the Maine Code of Professional Responsibility. Any fee  dispute that you do not submit to arbitration under the Maine Code  of Professional Responsibility, and any other dispute that arises out  of or relates to this agreement or the services provided by the law  firm shall also, at the election of either party, be subject to binding  arbitration. Either party may request such arbitration by sending  a written demand for arbitration to the other.

The court below

The court denied Bernstein’s motion and granted Snow’s. Relying on the Maine Rules of Professional Conduct, comments to those Rules, and  opinions of the Maine Professional Ethics Commission that interpreted the  Rules, the court concluded that, to include an agreement to arbitrate future  malpractice claims against the firm in an engagement letter, Bernstein was  obligated to fully inform Snow of the scope and effect of that agreement.  Because Bernstein had failed to obtain informed consent, the court concluded  that the arbitration provision violated public policy and was therefore  unenforceable. The court further concluded that, because an attorney’s  obligation to obtain the informed consent of his clients does not apply solely  to arbitration agreements, requiring informed consent in this context was not  preempted by the Federal Arbitration Act

The court here

  The Maine Rules of Professional Conduct do not explicitly address the issue presented by this appeal: if, and to what extent, an attorney  or law firm must inform a prospective client about the effect of a provision  that prospectively requires the client to submit malpractice claims against  that attorney or firm to arbitration. However, interpretations of the Rules by both the Maine Professional Ethics Commission and the ABA, expressed in  advisory opinions, indicate that for such a provision to comply with the Rules,  the client must be fully informed of its scope and effect.

...we now implement the public policy reflected by Maine Rule of Professional Conduct 1.8 cmt. (14) and the opinions of the  Maine and ABA Ethics Commissions. Maine attorneys must obtain a client’s  informed consent regarding the scope and effect of any contractual provision  that prospectively requires the client to submit malpractice claims against  those attorneys to arbitration. See M.R. Prof. Conduct 1.8 cmt. (14). To obtain the client’s informed consent, the attorney must effectively communicate to  the client that malpractice claims are covered under the agreement to  arbitrate. The attorney must also explain, or ensure that the client  understands, the differences between the arbitral forum and the judicial forum, including the absence of a jury and such “procedural aspects of forum  choice such as timing, costs, appealability, and the evaluation of evidence and  credibility.” Me. Prof. Ethics Comm’n, Op. No. 202. Furthermore, to ensure the  client is informed “to the extent reasonably necessary to permit the client to  make [an] informed decision[],” the attorney should take into account the particular client’s capacity to understand that information and experience  with the arbitration process, as these factors may affect both the breadth of  information and the amount of detail the attorney is obligated to provide.4

On this record

the undisputed evidence supports the  conclusion that Bernstein did not fully inform Snow as to the scope and effect  of the agreement to arbitrate, as is required by the Maine Rules of  Professional Conduct and the Maine Professional Ethics Commission opinions  interpreting those Rules. Therefore, the Superior Court did not err in  concluding that the arbitration provision was unenforceable for violating public policy.

(Mike Frisch)

December 24, 2017 | Permalink | Comments (0)

When A Change Of Mind Is Prejudicial To The Administration Of Justice

An attorney who agreed to arbitrate a dispute with a client and thereafter reneged on that agreement had been suspended for one month with the sanction stayed by the Nevada Supreme Court

Sullivan's violation of the Rules of Professional Conduct stem from a prior disciplinary action where, to settle the claims against him, Sullivan agreed to participate in binding fee dispute arbitration with a former client. When the arbitration coordinator contacted Sullivan to schedule the arbitration, Sullivan asked the coordinator if he was required to attend. The coordinator, who was not involved in Sullivan's settlement and therefore unaware that he had already agreed to participate, responded that participation was not mandatory. Sullivan neither attended the arbitration nor paid the $1,711 awarded to the client, leading to the current disciplinary action.

At the hearing on the matter, Sullivan testified that although he had agreed to participate in binding arbitration as part of his settlement, he later changed his mind. He also testified that he believed the arbitration coordinator had the authority to waive his participation and that she would have had knowledge of his settlement agreement, thus he did not need to inform her that his participation was mandatory under the settlement agreement or inform State Bar counsel about his change of mind. The arbitration coordinator testified that she had no knowledge of the prior settlement agreement.

Based on the foregoing, the panel found that Sullivan violated RPC 8.4(d) (conduct that is prejudicial to the administration of justice) due to his failure to uphold his agreement to participate in binding fee dispute arbitration. Based on this violation and considering the aggravating factors (substantial experience in the practice of law and prior disciplinary offenses) and the lack of mitigating factors, the panel recommended that he be suspended from the practice of law for one month, stayed subject to Sullivan paying $1,711 in restitution to his former client. The panel further recommended that Sullivan be publicly reprimanded and pay the actual costs of the hearing, plus $1,500 for administrative costs.

A footnote

In that grievance, a client alleged that Sullivan failed to perform services the client had paid for and also refused to return the client's funds. Sullivan claimed that he stopped performing legal work for the client because the client stole a gun from Sullivan's home.

The court accepted the proposed sanction in Discipline of Christopher Sullivan except

We decline, however, to adopt the recommendation that Sullivan also be publicly reprimanded.

(Mike Frisch)

December 24, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Lord Of The Files

The Nevada Supreme Court has ordered a six-month and one day suspension of an attorney

Lord violated duties owed to her clients (competence, diligence, and safekeeping property), the legal system (impartiality and decorum of the tribunal, making false statements about the integrity of a judge, and engaging in conduct prejudicial to the administration of justice), the public (engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation), and the profession (failing to respond to a lawful demand for information from a disciplinary authority). The record supports the panel's finding that Lord knowingly engaged in the misconduct as she knew that she needed to file the opening brief with this court, that the statements she made about the judge were false, and that she could not use her trust account as a personal account especially since she had been previously disciplined for doing so. Lord's misconduct harmed her client because her client's appeal was dismissed as a result of Lord's failure to file the opening brief and appendix. Additionally, the legal system was harmed because Lord's criminal case was continued as a result of her disruption and dishonest statements regarding the judge.

Pahrump Valley Times reported on this incident

Embattled attorney Nancy Lord was handcuffed and taken into custody on Monday after she and her co-defendant, Lawrence Moore, arrived 30 minutes late for their scheduled court appearance before Judge Margaret Whitaker.

Both were in Pahurmp [sic] Justice Court for arraignment on several animal code violations dating back several years.

When all was said and done, bond for Lord was set at $50,000 while Moore’s was set at $10,000.

A bench trial for Lord is scheduled for April 21, at 9 a.m.

Though the hearing was scheduled to begin at 9 a.m., Lord’s appointed public defender, Nathan Gent told Whitaker his client was not in the courtroom.

“I have no idea why she is not here today.” Gent said.

Nye County Deputy District Attorney Michael Vieta-Kabell reminded Whitaker of Lord’s history of tardiness and previous failures to appear over a period of several years, in relation to the case.

“Not only is she repeatedly reoffending in defiance of this court, but she is thumbing her nose by failing to appear,” he said. “I am going to ask for bench warrants in all of these cases.”

After assuming Lord and Moore were a definite no-show for the hearing, Whitaker issued a bench warrant for both and moved on to the next case.

Roughly 30 minutes later however, both defendants arrived at the courthouse much to the surprise of prosecutors and several observers following the case.

When queried by Whitaker about her late arrival, Lord replied she was ‘caring for a sick puppy,’ at home.

Both were subsequently handcuffed and placed into custody by the court bailiff shortly after their arrival.

“The court started at 9 a.m., not at your convenience,” Whitaker said. “That’s it. I’m done, I’m done. You never show up on time. I’m done, I’m done.”

Lord is facing multiple charges from allowing her animals to run at large, failure to provide proper sustenance and torture at her Pechstein Street neighborhood off of Blagg Road.

On Tuesday, Lord and Moore, still in custody, appeared before Judge Gus Sullivan in the matter. Vieta-Kabell successfully urged Sullivan to keep the defendants in custody.

“I argued to keep her in custody because she continually fails to appear for her cases or shows up 20, 30, and sometimes 60 minutes late,” he said following the hearing. “Frankly, she deserves to be in custody. If you can’t make your court appearances that’s what happens.”

After hearing arguments from the state and Lord’s newly-appointed public defender Lisa Chamlee, Sullivan remanded both into custody.

“The reason why Nancy Lord is in jail is because she failed to appear for a 9 a.m. hearing on Monday,” Vieta-Kabell said. “She has multiple new criminal prosecutions against her. She had a status check for failure to abide by the court sentence in a 2014 case. The new cases are the same old cases, including animals running at large, dogs in excess of limits per Nye County animal ordinance.”

Lord’s problems did not end with her incarceration on Monday.

The following day, she found herself in an eviction hearing before Sullivan.

An attorney representing Duke Partners LLC, a management consulting firm, argued that Lord has no claim to the property.

“Per the owners of the property, she needs to get out,” the attorney said. “There is no legal justification for her being on the property.”

Following arguments between Lord and the attorney, Sullivan ruled in favor of the consulting firm.

Lord has until Tuesday April 19, to vacate the property.

Moore, meanwhile, has since bailed out of custody.

Though Vieta-Kabell was not a party to that hearing, he said Sullivan made the right decision.

“That’s a civil issue between the new owners of the property and Ms. Lord,” he said. “As a preliminary matter, the judge did give at least temporary possession, which will later be made permanent to the new owners of the property. He gave Ms. Lord one week to vacate the property.”

Officials with Nye County Animal Control this week removed all but five of the several dozen dogs on the property, to bring Lord and Moore into compliance with the ordinance.

Contact reporter Selwyn Harris at On Twitter: @pvtimes

The case is Discipline of Nancy Lord.

Among her diverse accomplishments is a 1992 Vice Presidential run on the Libertarian Party ticket. (Mike Frisch )

December 24, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Colorado Sanctions Violent Behavior

The Colorado Presiding Disciplinary Judge approved admissions of misconduct in two matters (summaries linked here and here) involving violent behavior

The Presiding Disciplinary Judge approved the parties’ conditional admission of misconduct and suspended J.M. Sandlow (attorney registration number 43146) for six months, with ninety days to be served and the remainder stayed upon the successful completion of a two year period of probation, with conditions, including continued individual therapy. The suspension takes effect December 28, 2017.

On May 14, 2017, Sandlow and his girlfriend had an altercation, resulting in her calling 911. She claimed that Sandlow had tried to strangle her. Officers who responded to the call noted some indistinct red marks on her neck. Sandlow does not agree that he tried to strangle his girlfriend; he claims he grabbed her near the neck/collarbone area as she was trying to tear an item off a wall. On September 20, 2017, Sandlow pleaded guilty to second degree assault as an act of domestic violence pursuant to C.R.S. section 18-3-203. He stipulated to a two-year deferred judgment and sentence. The terms include compliance with Jefferson County’s diversion program, including domestic violence treatment and community service.

An unrelated matter

The Presiding Disciplinary Judge approved the parties’ conditional admission of misconduct and suspended William W. Muhr (attorney registration number 18093) for one year and one day, effective December 6, 2017. To be reinstated, Muhr will bear the burden of proving by clear and convincing evidence that he has been rehabilitated, has complied with disciplinary orders and rules, and is fit to practice law.

On June 29, 2016, Muhr pleaded guilty to assault in the third degree, a class-one misdemeanor. The elements of the charge were that he knowingly or recklessly caused
bodily injury to another person. He received a twelve-month deferred sentence. Muhr failed to report that conviction to disciplinary authorities.

The Gazette reported on the Muhr charges. (Mike Frisch)

December 24, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Friday, December 22, 2017

A Rant For The Holiday Season

In an earlier blog post, I noted that a test case had finally arisen to challenge  the single worst rule ever dreamed up by the District of Columbia Board on Professional Responsibility.

I have been waiting a long time for a case to come along that would provide District of Columbia Bar (now Disciplinary) Counsel with an opportunity to test the single most public protection-unfriendly rule of the Board on Professional Responsibility, the infamous Board Rule 9.8

Evidence of unadjudicated acts of misconduct occurring prior to the Court’s order of disbarment or suspension with fitness (“unadjudicated acts”) may be introduced by Disciplinary Counsel at a hearing on reinstatement only if: (i) Disciplinary Counsel demonstrates that the attorney seeking reinstatement received notice, in Disciplinary Counsel’s letter dismissing the complaint alleging the unadjudicated acts, that Disciplinary Counsel reserved the right to present the facts and circumstances of the unadjudicated acts at a reinstatement hearing; and (ii) Disciplinary Counsel gives notice in the Answer to the petition for reinstatement that he intends to raise the unadjudicated acts at reinstatement.

Let me say it plainly: No legitimate public policy purpose underpins any rule that excludes relevant evidence in the reinstatement hearing of a disbarred attorney.

Question: who in their right mind dreams up a procedural rule to exclude evidence in a reinstatement matter on grounds other than its merits?

Answer: the District of Columbia Board on Professional Responsibility.

And there is no reason for Disciplinary Counsel to waste its limited resources on sending notices of anything to disbarred lawyers. Rather, the petition for reinstatement makes any past misconduct fair game if proven. 

The case here involves the exclusion of evidence beyond the four corners of the criminal plea and consent to disbarment of Chris C. Yum. The consent came after a felony false statement conviction.

A hearing committee excluded proferred evidence of wider misconduct and recommended reinstatement.

The case was argued before the Court of Appeals and, I learned today in an order of  the Board on Professional Responsibility

After oral argument, the Court referred the matter to the Board on Professional Responsibility (“Board”) to weigh in on two questions:

First, whether the Hearing Committee should have considered additional facts about Petitioner’s conviction that were not a part of the record in his original disbarment proceeding, or whether that additional information is precluded from being considered under Board Rule 9.8.

Second, whether, on the record before the Court of Appeals, the petitioner should be reinstated.

Order, In re Yum, No. 16-BG-838 (D.C. June 22, 2017) (per curiam).

I was quite disappointed with the BPR's spirited defense of this ugly rule

Disciplinary Counsel is correct that the result of our reading of Rule 9.8(a) is that some otherwise admissible evidence will not be considered in this reinstatement proceeding. The trouble is that Disciplinary Counsel doesn’t offer a competing interpretation of the Rule. Indeed, it is hard to see what Rule 9.8(a) means if it does not mean that Disciplinary Counsel must give notice to Petitioner in this circumstance. We decline to read Rule 9.8(a) out of existence.

With all due respect, better that than to blindly readmit a convicted felon with blinders on concerning the true scope of the acts that led to his consent disbarment 

Disciplinary Counsel is correct that generally evidence is admissible under Rule 11.3. But it offers no reason – beyond a policy argument in favor of admitting relevant evidence – for why Rule 11.3 trumps the plain language of 9.8(a). This is not how statutes should be interpreted; “[a] general statutory rule usually does not govern unless there is no more specific rule.” Green v. Bock Laundry Machine Co., 490 U.S. 504, 524 (1989). Disciplinary Counsel has provided no reason to depart from this familiar canon of statutory construction.

It is true that the Hearing Committee, the Board, and the Court will not have some evidence in this reinstatement proceeding. However, the fault is not with these entities; the power to prevent that result lies entirely with Disciplinary Counsel. It could have complied with Rule 9.8(a). It did not. We cannot read Rule 9.8(a) into a nullity to forgive or correct its errors. 


The supposed raison d'etre of the BPR is to protect the public from unfit attorneys.

Stop worrying about blame and start doing the business of self-regulation in a responsible manner. 

And the policy argument, if there is something to it, would obligate the BPR to defend this indefensible rule rather than just read it.

D.C. App. R. XI section 4(e) empowers the BPR

(10) To adopt rules, procedures, and policies not inconsistent with this rule or any other rules of this Court.

Rule 9.8 violates the most fundamental policy that obligates a trier of fact to consider any relevant evidence in determining the present fitness of a disbarred attorney.  

The BPR tag line:

we recommend that Petitioner’s petition be denied on the record before us on the ground that the seriousness of Petitioner’s misconduct, compounded by the relative weakness of his evidence on the last three Roundtree factors, is not sufficient for Petitioner to meet his burden.

 Thus, the issue may not even get decided on the merits.

My more thorough analysis of this rule may be found here in an excerpt from No Stone Left Unturned. 

Parting shot: If the BPR loves notice so much, perhaps it would care to post public notice that a disbarred attorney is seeking reinstatement and inviting the views of any interested person.

It does not.

Nor are petitions alleging misconduct (public by rule for several decades now) posted on the Bar's web page.

Happy holidays to all! (Mike Frisch)

December 22, 2017 in Bar Discipline & Process | Permalink | Comments (0)