Wednesday, April 27, 2022
Lawyer Medical Advice In Ads Subject To Reasonable Restrictions
West Virginia's disclosure requirements in advertising for clients in medical device cases passes Constitutional muster as a regulation of commercial speech per a decision of the United States Court of Appeals for the Fourth Circuit
West Virginia by statute regulates legal advertisements that solicit clients in litigation involving medications or medical devices. The plaintiffs in this case, two West Virginia attorneys and a client, contend that the statute violates the First Amendment by prohibiting attorneys from using certain terms or images in their advertisements and by requiring such advertisements to include certain disclosures. The district court agreed, granting summary judgment to the plaintiffs.
In March 2020, West Virginia passed the Prevention of Deceptive Lawsuit Advertising and Solicitation Practices Regarding the Use of Medications Act. See W. Va. Code §§ 47-28-1 et seq. The Act is designed to regulate legal advertisements, i.e. the ads that attorneys use to solicit plaintiffs in litigation stemming from the use of medications or medical devices. It serves to ensure that such advertisements do not mislead or confuse the public.
The statute applies to advertisements that constitute “a solicitation for legal services regarding the use of medications through television, radio, newspaper or other periodical, outdoor display, or other written, electronic, or recorded communications wherein the advertisement solicits clients or potential clients for legal services.” Id. § 47-28-2(1). The statute regulates such advertisements in two ways: by prohibiting certain terms or images that may mislead the public, and by requiring certain disclosures to prevent confusion and protect public health.
The Act’s prohibitions target attorney advertisements that give the false impression that they reflect medical or governmental advice. So the statute prohibits attorneys from “[p]resent[ing]” an advertisement as a “consumer medical alert,” “health alert,” “consumer alert,” or “public service health announcement” so as to suggest “to a reasonable recipient that the advertisement is offering professional, medical, or government agency advice about pharmaceuticals or medical devices rather than legal services.” Id. § 47-28-3(a)(2). Similarly, an advertisement may not display “the logo of a federal or state government agency in a manner that suggests affiliation with the sponsorship of that agency.” Id. § 47- 28-3(a)(3). And a third prohibition operates to make sure that attorney advertisements do not provide misleading information about the status of medications by preventing advertisements from using “the word ‘recall’ when referring to a product that has not been recalled by a government agency or through an agreement between a manufacturer and government agency.” Id. § 47-28-3(a)(4).
District court reversed here
The disclosure requirements here pose no such issue. In response to concrete concerns supported by empirical evidence, West Virginia imposes relatively benign burdens on attorneys. First, the Act mandates commonplace disclosures clarifying the nature and identity of the advertisements at issue, requirements that plaintiffs do not specifically challenge. And second, the Act requires two or three short sentences informing patients that they should not discontinue a drug without consulting a doctor, that discontinuing a drug may be hazardous, and, if applicable, that the drug remains FDA approved. This limited intrusion into a given advertisement is entirely commonplace. Rare is the radio listener or television viewer who has not sat through far more voluminous warnings and disclosures than those mandated here.
In short, we conclude that the disclosure requirements at issue here are subject to Zauderer and that they easily pass the deferential standard articulated by that case. We therefore reverse the district court’s holding that these requirements violate the First Amendment.
Plaintiffs try to transfigure the Act into a sweeping and draconian enactment. But all West Virginia requires is that attorneys truthfully present themselves as attorneys. The Act’s prohibitions and disclosures work together to accomplish this end—and to protect the health of West Virginia citizens who may be misled into thinking that attorneys are reliable sources of medical advice. The Act survives constitutional challenge. We thus reverse the judgment of the district court and remand the case with directions that it be dismissed.
April 27, 2022 in Law & Business | Permalink | Comments (0)
Wednesday, June 2, 2021
No Summary Judgment For Departed Associate On Non-Compete Provision
A law firm associate and the office manager who departed and were sued by the former firm were granted summary judgment on a punitive damages claim but the denial of that relief was otherwise affirmed by the New York Appellate Division for the First Judicial Department
Plaintiff Feiner & Lavy, P.C., is a law firm that specializes in immigration law. Defendant Gadi Zohar, Esq. was a former associate attorney with plaintiff, and defendant Jihan Asli was its office manager for several years before joining Zohar's law firm, Zohar Law PLLC. Plaintiff alleges that defendants breached the terms of their employment agreements. According to plaintiff, Zohar entered into an employment agreement with plaintiff that included a requirement to maintain as confidential customer lists or other customer information, a noncompetition agreement, and a nonsolicitation agreement. According to plaintiff, the employment agreement prohibited Zohar from engaging in any business that conducts the same or similar business as plaintiff for a period of 36 months, within 90 miles of New York City or in the Israeli community. The agreement also purported to prohibit Zohar from directly or indirectly soliciting any business from customers or clients of plaintiff for a period of 36 months within 90 miles of New York City or in the Israeli community; or advertise on Israeli/Hebrew websites, TV or newspaper ads.
Plaintiff alleges that Asli entered into a confidentiality agreement wherein she agreed to maintain the confidentiality of customer or client information. Plaintiff alleges that Zohar breached the terms of his employment agreement by directly and indirectly engaging in the practice of immigration law in New York City and soliciting plaintiff's clients. As to defendant Asli, plaintiff alleges that she breached the terms of the confidentiality agreement by divulging confidential information pertaining to plaintiff's clients. Plaintiff contends that it is entitled to recover damages for defendants' alleged solicitation of its clients.
Defendants moved for summary judgment to dismiss the complaint, arguing that the employment agreement was null and void under Rule 5.6(a)(1) of the New York Rules of Professional Conduct, as it barred Zohar from representing clients and performing legal work within 90 miles of New York City. They argued that the noncompete clause should not be saved by partial severance to bring it into compliance with Rule 5.6(a)(1) because it was so overly broad that it constituted anticompetitive conduct and demonstrated plaintiff's lack of good faith in protecting its business interest. In addition, they argued that Zohar did not solicit plaintiff's clients, but its clients sought out Zohar after they were informed that he was no longer with plaintiff's law firm.
We find that Supreme Court properly denied defendants' motion for summary judgment in that there remain issues of fact as to whether the non-solicitation clause is enforceable, and whether defendants solicited plaintiff's clients or disclosed confidential client information in violation of their respective agreements with plaintiff.
Rule 5.6(a)(1) of the Rules of Professional Conduct (22 NYCRR 1200.0) bars lawyers from "participat[ing] in offering or making a partnership, shareholder, operating, employment, or other similar type of agreement that restricts the right of a lawyer to practice after termination of the relationship," except under limited circumstances that are not relevant to this appeal. To the extent the noncompete provision in the employment agreement that Zohar executed with plaintiff seeks to prevent him from "conducting business activities that are the same or similar to those of [plaintiff]" within 90 miles of New York City or in the Israeli community, it is void and unenforceable (see Cohen v Lord, Day & Lord , 75 NY2d 95 ; see also Denburg v Parker Chapin Flattau & Klimpl , 82 NY2d 375, 381 ).
However, the noncompete clause here may be enforceable to the extent that it prohibits Zohar from soliciting plaintiff's clients (see Graubard Mollen Dannett & Horowitz v Moskovitz , 86 NY2d 112, 119-120 ; see e.g. Feldman v Minars , 230 AD2d 356 [1st Dept 1997]).
Defendants' submissions failed to establish that the nonsolicitation clause was unenforceable as an undue restriction on Zohar's ability to practice law (see Cohen , 72 NY2d 95), or that Zohar did not solicit plaintiff's clients, through Asli, in violation of his employment agreement, which would be actionable (see generally Greenwich Mills Co. v Barrie House Coffee Co. , 91 AD2d 398, 404-405 [2d Dept 1983]). As for plaintiff's claims against Asli, rule 5.6(a)(1) precludes agreements that "restrict the right of a lawyer to practice after termination of the relationship," and is thus inapplicable to the enforceable confidentiality agreement that she executed with plaintiff. Accordingly, defendants' argument that this agreement was void and unenforceable, based solely on rule 5.6(a)(1), is unavailing.
The court found no basis for a punitive damages claim. (Mike Frisch)
June 2, 2021 in Law & Business, Law Firms | Permalink | Comments (0)
Thursday, October 15, 2020
Inherent Conflicts; Trade Names
A Staff Report from the web page of the Ohio Supreme Court
The Ohio Board of Professional Conduct has issued two advisory opinions addressing rules regarding law firm representation of current clients and the use of trade names by law firms.
Advisory Opinion 2020-10 analyzes a law firm’s proposed representation of two adverse clients negotiating the same transaction. The board found an inherent conflict of interest in such an arrangement, even when the lawyers are separately assigned to each client, screening of the lawyers is utilized, and both clients consent to the arrangement.
The board concluded that the lawyers’ independent professional judgment and competence would be compromised by the concurrent representation and would require an impermissible departure from the rules governing the imputation of conflicts.
Advisory Opinion 2020-11 concludes that a recent amendment to the Rules of Professional Conduct permits the use of trade names by Ohio law firms, provided the trade name is not false, misleading, or unverifiable. The opinion gives several examples of trade names that would be prohibited and identifies names that would be considered permissible.
Screening does not cure direct adversity
The steps proposed by the law firm in order to represent the two clients underscore the inherent nature of the conflict of interests that exist in the concurrent representation of two or more firm clients in the same transaction. The key features of the law firm’s proposal to resolve the conflicts, a combination of client consent and the screening of two groups of assigned lawyers, is not provided for in the Rules of Professional Conduct as a method to ameliorate conflicts arising from concurrent representation in the same law firm. The firm’s proposal would require a departure from the rules governing the imputation of conflicts that the Board is reluctant to endorse. For the foregoing reasons, the Board concludes that the law firm’s proposed concurrent representation of the two adverse clients in the same transaction is not permissible.
The trade name opinion
Because a trade name may contain one word or a combination of words, it may be considered misleading if it contains a material misrepresentation of fact or omits a fact necessary to make the trade name, considered as a whole, not materially misleading. Prof.Cond.R. 7.1, cmt. . A trade name may also be misleading if a substantial likelihood exists that it will lead a prospective client to formulate a specific conclusion about the lawyer or the lawyer’s services for which there is no reasonable factual foundation. Id. For example, a trade name that implies results, such as “Zero Tax” or “Winning Law Firm,” would be considered misleading because it could lead a reasonable person or a prospective client to form an unjustified expectation that certain results can be obtained from the lawyer or firm. Id., cmt.. In addition, trade names that imply a connection to a governmental agency, e.g. “Attorney General Collections,” “Public Defenders,” “Ohio Judge’s Law Group,” “Social Security Administration Associates;” imply expediency, e.g. “Divorce Fast,” “EZ Divorce,” “Quick Settlement;” or that imply a connection to an existing nonprofit or charitable organization, e.g. “Legal Aid Associates,” “Project Innocence Associates,” or “Legal Assistance Foundation;” are inherently false or misleading and implicate Prof.Cond.R. 7.1. See generally S.C. Bar Eth. Adv. Op. 03-04.
On the other hand, there exists a number of possible law firm names that utilize a trade name and that would be permissible under Prof.Cond.R. 7.1 and 7.5. For example, a law firm with multiple lawyers that concentrates its law practice in representing plaintiffs in personal injury law cases could ethically use the trade name “Ohio Personal Injury Associates.” Prof.Cond.R. 7.4(a), cmt.. The name would only be considered false or misleading if no lawyers in the firm practice personal injury law or the firm ceased providing any legal services in the area of law used in the trade name. Likewise, a firm that exclusively practices in the area of insurance defense law may appropriately use the trade name “Ohio Insurance Defense Counsel.” However, a trade name is not required to reference the area of legal services the lawyer or the law firm provides in order to not be false, misleading, or nonverifiable. For example, a trade name such as “Summit Law” or “First Legal” would be permissible, even though the trade name does not indicate the area of law practiced
October 15, 2020 in Clients, Law & Business, Law Firms | Permalink | Comments (0)
Wednesday, November 27, 2019
No Interlocutory Appeal Of Denied Motion To Disqualify Counsel
The Maine Supreme Judicial Court declined to reach the merits of an interlocutory appeal of a denied motion to disqualify counsel
In her complaint, Flanders alleges that, in January 2017, she was attacked by Gordon’s dog. Flanders retained Attorney Sarah Gilbert and commenced this personal injury lawsuit against Gordon in October 2017. Gordon retained Attorney Eric Morse of Strout & Payson, P.A., to defend her.
In January 2018, while the lawsuit against Gordon was still pending, Flanders was injured in a motor vehicle accident. Flanders sought legal assistance from Attorney Darby Urey, a partner of Attorney Morse at Strout & Payson, P.A., who continued to represent Gordon in the dog-attack case. Attorney Urey discussed the potential conflict with Flanders, who then signed a conflict waiver agreement provided to her by Attorney Urey. Attorney Urey met and consulted with Flanders several times and gathered her medical information; however, Flanders eventually terminated Attorney Urey’s services and engaged new counsel.
On February 15, 2019, Flanders moved to disqualify Attorney Morse from representing Gordon in this personal injury case based on an alleged conflict created by Attorney Urey’s earlier representation of Flanders in connection with the January 2018 motor vehicle accident. On February 25, 2019, following a hearing on the motion at which Flanders briefly testified, the court denied Flanders’s motion to disqualify Attorney Morse.
On interlocutory appeal
The death knell exception is inapplicable here. Under this exception, an order granting a motion to disqualify is immediately appealable; however, an order denying a motion to disqualify generally is not. State v. Carrillo, 2018 ME 84, ¶¶ 5-6, 187 A.3d 621. The reason for this rule is straightforward. Disqualification involves a disadvantage and expense that cannot be remedied once the case is over, whereas an order denying a motion to disqualify “implicates no such concerns.”
A footnote on exceptions to that general rule
We have twice permitted interlocutory appeals from orders denying motions to disqualify counsel, but those cases involved facts distinguishable from the facts here. In Estate of Markheim v. Markheim, 2008 ME 138, ¶¶ 20-21, 957 A.2d 56, we considered the merits of a denial of a motion to disqualify under the death knell exception because the moving parties identified specific examples of confidential information that the attorney had acquired from his prior representation that could be harmful to them in the pending case. Here, the court found, with support in the record, that Attorney Morse did not receive any confidential information as a result of Attorney Urey’s representation of Flanders. See Liberty v. Bennett, 2012 ME 81, ¶¶ 20-21, 46 A.3d 1141. Similarly, we permitted an interlocutory appeal from an order denying a motion to disqualify counsel in Butler v. Romanova, 2008 ME 99, ¶¶ 5-10, 953 A.2d 748, a divorce case, after concluding, without elaborating, that otherwise the moving party “st[ood] to irreparably lose substantial rights.” Flanders has not identified what substantial rights she stands to lose. See State v. Carrillo, 2018 ME 84, ¶¶ 7-8, 187 A.3d 621; Liberty, 2012 ME 81, ¶¶ 20-21, 46 A.3d 1141.
...permitting an interlocutory appeal here would unnecessarily delay the litigation in the trial court regardless of the outcome of the appeal. Thus, allowing the appeal of this
interlocutory order to proceed would not be in the interest of judicial economy. Liberty, 2012 ME 81, ¶¶ 22-23, 46 A.3d 1141. We therefore decline to reach the merits of this appeal.
November 27, 2019 in Law & Business | Permalink | Comments (0)
Thursday, February 14, 2019
Ohio Drops A Hot Potato
A staff report on the web page of the Ohio Supreme Court
The Ohio Board of Professional Conduct has issued an advisory opinion concerning the representation of current or former clients in unrelated matters when the clients are directly opposed.
Advisory Opinion 2019-01 replaces a 1988 opinion concerning a lawyer’s representation of employers in workers’ compensation matters when the lawyer represents the claimant employee in unrelated matters.
The former opinion also addressed whether a lawyer may withdraw from the representation of the claimant employee in order to undertake the more profitable representation of the employer. The opinion analyzes the same questions previously posed to the board, but under the current Rules of Professional Conduct.
In the new opinion the board reiterates that absent informed written consent of the client, lawyers may not represent clients who will be directly adverse to another client the lawyer is representing in an unrelated matter.
The board finds that the situation creates a conflict of interest because there is a substantial risk that the lawyer’s duties to one client may be materially limited by the responsibilities to the adverse client or the lawyer’s own personal interests.
Ohio courts and other jurisdictions have historically declined to uphold a practice, known as the “hot potato” doctrine, in order that the lawyer or law firm may undertake the representation of a new client under a less-stringent conflict of interest analysis. The board consequently holds that a withdrawal from representation under the “hot potato” doctrine is not ethically appropriate and does not constitute “good cause” for withdrawal under the conduct rules.
The opinion also addresses questions concerning the representation of clients involving former clients in matters that are not substantially related and the ability of lawyers to recommend other lawyers to prospective clients when the lawyer is unable to undertake representation due to a conflict of interest.
February 14, 2019 in Clients, Law & Business | Permalink | Comments (0)
Sunday, October 14, 2018
Doctor In The House
A staff report from the web page of the Ohio Supreme Court
The Ohio Board of Professional Conduct has issued an advisory opinion concerning the advertisement by lawyers of their juris doctor degrees and other earned academic degrees and professional licenses.
Advisory Opinion 2018-06 replaces a 1994 opinion that addressed the ability of lawyers to advertise their juris doctor (J.D.) degrees while working in other professions or business and communicate the holding of other degrees and licenses while engaged in the practice of law.
The board concludes that the J.D. degree represents formal training in the law and may be displayed by a lawyer in another business or profession even when the lawyer does not actively practice law. The board advises however, that an appropriate disclaimer be added to the display of the J.D. degree in order to not mislead business clients that the lawyer does not provide legal advice or services. The display of other academic degrees or professional licenses is permitted, the board concludes, as long as the information is not false, misleading, or non-verifiable.
The board cautions lawyers that the display of other degrees and licenses should be done in a manner to avoid an implication that the lawyer specializes in an area of law. Specialization in an area of the law requires certification by organizations approved by the Ohio Supreme Court.
Finally, the board concludes that the display of the J.D. in a law-related business such as real estate consulting, title agency, or accounting requires the lawyer to pay close attention to a professional conduct rule dictating the requirements for lawyers to reiterate in writing to business clients that they are not providing legal services that carry the ordinary protections of conflicts of interest checks, attorney-client confidentially, and professional independence found in the practice of law.
October 14, 2018 in Law & Business, Professional Responsibility | Permalink | Comments (0)
Monday, August 6, 2018
Dissolution Obligations At Issue
Certified questions in the Howrey bankruptcy case are up for argument before the District of Columbia Court of Appeals on September 12
No. 18-SP-0218 ALLAN B. DIAMOND, CHAPTER TRUSTEE OF HOWREY, LLP V. BENSON KASOWITZ, ET AL
Christopher R. Murray, Esquire
Christopher Sullivan, Esquire
Shay Dvoretzky, Esquire
Michael Ryan Pinkston, Esquire
Robert Radasevich, Esquire
Jack Mckay, Esquire
Robert Novick, Esquire
Gregory G. Garre, Esquire
Brian R. Matsui, Esquire
Logan G. Haine-Roberts, Esquire
In a February 2018 opinion, the United States Court of Appeals for the Ninth Circuit sought guidance on governing District of Columbia law
Pursuant to D.C. Code § 11-723 we respectfully ask the District of Columbia Court of Appeals to resolve three questions of District of Columbia law that “may be
determinative” of this bankruptcy appeal. D.C. Code § 11- 723(a):
(1) Under District of Columbia law does a dissociated partner owe a duty to his or her former law firm to account for profits earned post-departure on legal matters that were in progress but not completed at the time of the partner’s departure, where the partner’s former law firm had been hired to handle those matters on an hourly basis and where those matters were completed at another firm that hired the partner?
(2) If the answer to question (1) is “yes,” then does District of Columbia law allow a partner’s former law firm to recover those profits from the partner’s new law firm under an unjust enrichment theory?
(3) Under District of Columbia law what interest, if any, does a dissolved law firm have in profits earned on legal matters that were in progress but not completed at the time the law firm was dissolved, where the dissolved law firm had been retained to handle the matters on an hourly basis, and where those matters were completed at different pre-existing firms that hired partners of the dissolved firm post-dissolution?
Our phrasing of the questions should not restrict the Court’s consideration of the issues. The Court may rephrase a question as it sees fit in order to best address the contentions of the parties or the specifics of D.C. law.
The Ninth Circuit cites the 1990 D.C. decision in Beckman v. Farmer on partnership dissolution.
The case is one of the career highlights of my friend and mentor Jake Stein, perhaps the most universally beloved lawyer in the history of the District of Columbia Bar. (Mike Frisch)
August 6, 2018 in Law & Business, Law Firms | Permalink | Comments (0)
Sunday, October 22, 2017
Ethics Of Spam Filters
The best Florida ethics blog - sunEthics - has a recent post of interest
Firm had duty to have sufficient procedures to ensure timely receipt of orders, and in using email system without safeguards or oversight firm could not claim excusable neglect under Fla.R.Civ.P. 1.540 when it failed to timely appeal emailed order it allegedly did not receive. [Added 10/18/17]
A trial court rendered an order assessing fees against Law Firm’s client. The order was emailed to the mail addresses designated by each party’s counsel. The clerk’s records showed that the email sent to Law Firm was accepted by the recipient server. Law Firm, however, claimed that it never received the emailed order. Accordingly, Law Firm’s client missed the deadline to appeal the order. Law Firm filed a motion for relief from judgment under Fla.R.Civ.P. 1.540(b), alleging excusable neglect.
A consultant who had provided IT services for Law Firm testified that the Firm’s system “was configured to drop and permanently delete emails perceived to be spam without alerting the recipient that the email was deleted.” He had advised the Firm against this. The Firm rejected the consultant’s recommendation to hire a third-party vendor to handle spam filtering “because [the Firm] did not want to spend the extra money.” The Firm also rejected his recommendation to get an online backup system for about $700 to $1200 per year. The consultant eventually ceased working for the Firm “because the firm rejected his recommendations.”
An expert witness testified that Law Firm “did not properly implement and utilize its email filtering system.” He understood that the Firm’s email system “was set to drop and delete emails identified as spam.” The expert stated that, if the Firm was his client and wanted to implement such a system, “he would require the client to sign a waiver exonerating him from responsibility.”
The trial court denied the motion for relief from judgment. The First DCA affirmed, concluding that no excusable neglect was demonstrated. The appeals court stated that, based on the testimony, the trial court could conclude that [Law Firm] made a conscious decision to use a defective email system without any safeguards or oversight in order to save money. Such a decision cannot constitute excusable neglect.” See, e.g., Bequer v. Nat’l City Bank, 46 So.3d 1199 (Fla. 4th DCA 2010) (reversing an order setting aside a default final judgment based on excusable neglect where the bank’s inaction was not the result of a ‘system gone awry,’ but rather of a ‘defective system altogether’).”
The court concluded: “Counsel has a duty to have sufficient procedures and protocols in place to ensure timely notice of appealable orders. This includes use of an email spam filter with adequate safeguards and independent monitoring of the court’‘s electronic docket. In cases where rendition of an appealable order has been delayed for a significant period of time, it might also include the filing of a joint motion for a case management conference to ensure that the order has not slipped through the cracks. [Law Firm] made no effort to do any of these things, reflecting an overall pattern of inaction and disengagement. In short, there was an absence of ‘any meaningful procedure in place that, if followed, would have avoided the unfortunate events that resulted in a significant judgment against’ [Law Firm’s client].” Emerald Coast Utilities Authority v. Bear Marcus Point, LLC, __ So.3d __ (Fla. 1st DCA, No. 1D15-5714, 10/6/2017) (on rehearing), 2017 WL 4448526.
October 22, 2017 in Law & Business, Law Firms | Permalink | Comments (1)
Wednesday, May 17, 2017
Former Firm May Sue Successor Firm For Failure To Honor Lien
The New Hampshire Supreme Court has reversed and remanded the dismissal of a claim of one law firm against another alleging conversion
The plaintiff was retained by a client to pursue a personal injury action. In connection with the representation, the client signed the plaintiff’s standard engagement contract, which states, in relevant part:
If I discharge my attorney or he withdraws from representation, I agree to pay him at the rate of $350.00 per hour, $175.00 per hour for his legal assistant(s), quantum meruit, or thirty-three and one-third percent (33-1/3%) of the last settlement offer, whichever is greater, from any recovery obtained on my behalf. I do further agree that my attorney will be entitled to the full contingency fee identified in this contract if he substantially performs under the contract. I grant my attorney a lien for his fees and costs on any recovery I receive in my case.
The plaintiff worked for the client for two years before being discharged without cause. The client subsequently hired the defendants, who filed an action (underlying action) on behalf of the client. The defendants ultimately settled the underlying action on the client's behalf.
Prior to settlement, the plaintiff filed a motion to intervene in the underlying action, asserting that he possessed a contractual lien for fees and costs incurred during his representation of the client. The client objected to the motion, claiming, among other things, that: (1) intervention would be inappropriate because of the possibility of juror confusion and because the plaintiff retained the ability to bring a separate quantum meruit claim; and (2) the plaintiff had "neither a lien nor a contractual claim" and was limited to recovery in quantum meruit. The court denied the plaintiff’s motion "for the reasons stated in the [client’s] objection," without further elaboration. According to the defendants, the plaintiff subsequently filed a motion to vacate the court’s order, which the court denied, ruling that it was "an untimely motion to reconsider."
After the settlement of the underlying action, the client filed a motion to order that the settlement check be made "payable solely to [the client] and her counsel, R. James Steiner." The court granted the motion.
On the same day, the plaintiff filed a series of motions in the underlying action, including a second motion to intervene wherein he again asserted that he possessed a contractual lien, a motion for interpleader, and a motion to foreclose lien. The client objected to all these motions, and the court denied all of them without explanation.
The plaintiff then initiated this action against the defendants, again alleging that he had an enforceable contractual lien for fees against the defendants. The defendants moved to dismiss the action for failure to state a claim. In its order granting the motion, the court noted that the plaintiff’s contractual lien claim was "arguably barred by the doctrine of collateral estoppel." Nonetheless, the court found that the plaintiff’s claim failed on the merits because he had not submitted any evidence of his contract with the client, and, thus, failed to allege "facts that c[ould] be reasonably construed to meet the elements of an enforceable contract containing the lien term."
On the merits
Having thus established that the plaintiff may have a valid lien for the reasonable value of his services, we next consider whether that lien is enforceable against the defendants. The plaintiff asserts that the contract signed by the client is enforceable against the defendants because the defendants were aware of the lien at the time they were retained, and because the client should not be required to pay both lawyers’ fees. The defendants’ position is that, if the plaintiff has any claim for fees, the claim lies only against the client. Under the particular circumstances of this case, we are persuaded by the plaintiff’s argument.
Because the defendants do not argue that they were unaware that the client had discharged a prior attorney before retaining their services, we conclude that the lien for fees claimed by the plaintiff may be enforceable against the defendants. In so holding, we follow the view espoused by the Indiana Supreme Court in Galanis v. Lyons & Truitt, 715 N.E.2d 858 (Ind. 1999). As that court aptly explained:
In a system of professional responsibility that stresses clients’ rights, it is incumbent upon the lawyer who enters a contingent fee contract with knowledge of a previous lawyer’s work to explain fully any obligation of the client to pay a previous lawyer and explicitly contract away liability for those fees. If this is not done the successor assumes the obligation to pay the first lawyer’s fee out of his or her contingent fee. [The successor lawyer] was in the best position to evaluate and to reach an agreement as to a reasonable fee for the value of the work already done in [the client’s] case. "Lawyers almost always possess the more sophisticated understanding of fee arrangements. It is therefore appropriate to place the balance of the burden of fair dealing and the allotment of risk in the hands of the lawyer in regard to fee arrangements with clients." In the Matter of Myers, 663 N.E.2d 771, 774-75 (Ind. 1996). [The successor lawyer] also had the option to discuss with [the client] the need for someone to pay [the prior lawyer’s] fee and to refuse to accept the case if [the client] could not resolve any open issues with [the prior lawyer]. [The successor lawyer] neither advised [the client] of the need to pay the fee nor contracted away that responsibility for himself. Under these circumstances, [the successor lawyer], not [the client], should bear the burden of his silence. Accordingly, [the prior lawyer] is entitled to recover the compensation due [him] from [the successor lawyer’s] contingent fee...
We find the Galanis court’s reasoning persuasive, and, therefore, hold that the trial court erred in dismissing the plaintiff’s amended complaint. Accordingly, we reverse the trial court’s judgment and remand for further proceedings consistent with this opinion. In so doing, we emphasize that, for purposes of this appeal, we have accepted the plaintiff’s allegations as true. See Coyle, 147 N.H. at 100. On remand, the plaintiff will bear the burden of establishing the reasonable value of his services, which, as the Galanis court observed, is to be measured by the benefit conferred upon the client –– an amount that may or may not be commensurate with the time or effort expended by the plaintiff. See Galanis, 715 N.E.2d at 862. Also relevant to the plaintiff’s entitlement to fees will be the issue of whether he was, as he alleges, discharged without cause. See First National Bank of Cincinnati v. Pepper, 454 F.2d 626, 633 (2d Cir. 1972) (stating that "attorney discharged for cause. . . has no right to payment of fees"); cf. People ex rel. MacFarlane v. Harthun, 581 P.2d 716, 718 (Colo. 1978) (en banc) (stating that attorney discharged or removed "for professional misconduct in the handling of his client’s affairs" has no right to assert a statutory attorney’s lien).
May 17, 2017 in Current Affairs, Law & Business, Law Firms | Permalink | Comments (0)
Monday, April 17, 2017
Ohio Opines On Ethics Of Email Solicitations
A staff report from the web page of the Ohio State Bar
The Ohio Board of Professional Conduct today issued advisory opinions on lawyer advertising and the representation of clients by a former magistrate. The opinions update and replace opinions previously issued by the Board under the former Code of Professional Responsibility and the former Code of Judicial Conduct.
In Advisory Opinion 2017-3, the Board provides guidance for lawyers who desire to use unsolicited emails as a form of advertising to attract new clients.
As a general rule, lawyers are not permitted to solicit clients through in-person contact, real-time electronic contact, or by live telephone. However, other forms of non-direct solicitation by lawyers are permissible. The Board advises that email is a form of an indirect communication that may be utilized by lawyers seeking new clients. When using email as a form of advertisement, the lawyer must abide by other conduct rules including avoiding misleading communications, not engaging in unwanted communications or harassment, and adding a disclaimer that the email is an “Advertisement Only.” The opinion also advises that a lawyer may use third-party services to send the emails, as long as the lawyer maintains responsibility for the actions of the service and the content of the emails. The opinion updates and withdraws former Adv.Op 2004-1.
In Advisory Opinion 2017-04, the Board considered the ability of a former magistrate, now practicing law, to represent a domestic relations client, post-decree, in a matter originally heard by the magistrate.
The Board advises that a former magistrate may not represent the client, unless all parties give informed consent, in writing, to the representation. If the former magistrate is not permitted to represent the client, no lawyer in the former magistrate’s firm may represent the client unless the former magistrate is timely and properly screened by the firm, receives no part of the fee, and written notice is provided to the parties and the court.
The Board also advises that under the Ohio Ethics Law, the former magistrate is prohibited for 12 months from representing a client in any matter the former magistrate personally participated before leaving public office. The opinion updates and withdraws former Adv. Op. 2005-5.
April 17, 2017 in Economics, Judicial Ethics and the Courts, Law & Business | Permalink | Comments (0)
Friday, March 24, 2017
No Right For Firms To Accept Outside Investments
An opinion issued today by the United States Court of Appeals for the Second Circuit
Plaintiffs‐Appellants Jacoby & Meyers, LLP, a limited liability law partnership, and Jacoby & Meyers USA II, PLLC, a related professional limited liability company (together, “plaintiffs” or “the J&M Firms”), challenge the constitutionality of a collection of New York regulations and laws that together prevent for‐profit law firms from accepting capital investment from non‐lawyers. The J&M Firms allege that, if they were allowed to accept outside investment, they would be able to—and would—improve their infrastructure and efficiency and as a result reduce their fees and serve more clients, including clients who might otherwise be unable to afford their services. By impeding them from reaching this goal, the J&M Firms contend, the state has unconstitutionally infringed their rights as lawyers to associate with clients and to access the courts—rights that are grounded, they argue, in the First Amendment. The District Court (Kaplan, J.) dismissed the complaint, concluding that the J&M Firms failed to state a claim for violation of any constitutional right and that, even if such rights as they claim were to be recognized, the challenged regulations withstand scrutiny because they are rationally related to a legitimate state interest. We agree that under prevailing law the J&M Firms do not enjoy a First Amendment right to association or petition as representatives of their clients’ interests; and that, even if they do allege some plausible entitlement, the challenged regulations do not impermissibly infringe upon any such rights. We therefore AFFIRM the District Court’s judgment.
Through a set of prohibitions of long standing in New York and similar to those widely prevalent in the fifty states and the District of Columbia, the State of New York prohibits non‐attorneys from investing in law firms. See generally N.Y. State Bar Ass’n, Report of the Task Force on Nonlawyer Ownership, reprinted at 76 Alb. L. Rev. 865 (2013) (“NYSBA Report”). The prohibition is generally seen as helping to ensure the independence and ethical conduct of lawyers. See id. at 876‐77. Plaintiffs‐Appellants Jacoby & Meyers, LLP, a limited liability partnership (the “LLP”), and Jacoby & Meyers USA II, PLLC, a related professional limited liability company (the “PLLC”; together, “plaintiffs” or the “J&M Firms”) bring a putative class action challenging New York’s rules, regulations, and statutes prohibiting such investments. The infusions of additional capital that the regulations now prevent, they declare, would enable the J&M Firms to improve the quality of the legal services that they offer and at the same time to reduce their fees, expanding their ability to serve needy clients. They assert that, were they able to do so, they would act on that ability in the interests of such potential clients. Because the laws currently restrict their ability to accomplish those goals, they maintain, he state regime unlawfully interferes with their rights as lawyers to associate with clients and to access the courts—rights they see as grounded in the First Amendment.
Circuit Judge Susan Carney affirmed the district court disposition. (Mike Frisch)
March 24, 2017 in Billable Hours, Law & Business, Law Firms | Permalink | Comments (0)
Protecting Vulnerable Hoosiers: State May Sue Foreclosure Defense Law Firms
The Indiana Supreme Court affirmed the denial of summary judgment in favor of defendant law firms
Consumer Attorney Services, P.A., The McCann Law Group, LLP, and Brenda McCann (collectively “Defendants”) appeal the trial court’s denial of their motion for summary judgment, claiming they are all expressly or impliedly exempt from liability under each of the four statutes cited by the State in this civil suit. Finding that none of the Defendants properly fit within these statutory exemptions, we affirm.
CAS is a Florida corporation that purports to specialize in foreclosure- and mortgage related legal defense work, requiring non-refundable retainers and monthly fees up front to be automatically deducted from bank accounts. McCann was an attorney licensed in Florida, who acted as CAS’s manager. CAS subcontracted with at least five Indiana attorneys to provide local services, who executed “Of Counsel,” “Associate,” and/or “Partnership” agreements with CAS. Under the “Partnership” agreement, the attorney acquired a 1% non-voting interest in CAS, and was to be involved with client intake and screening, to administer the referral of Indiana cases to other Indiana lawyers employed by CAS, and to provide clients with direct legal services as needed. Under the “Associate” agreements, CAS handled all aspects of client intake and communication, document preparation, and billing, with the attorney’s role limited to speaking with clients only when directly asked by the client, and meeting with them only once prior to filing any legal documents such as a bankruptcy petition (in order to obtain appropriate signatures), and speaking with opposing counsel only when “necessitated.” Appellant’s App. at 86. Under the “Of Counsel” agreements, the lawyer was a completely independent contractor, but was to perform essentially the same functions as under the Associate agreement. All of these agreements were entered into before CAS registered as a foreign entity authorized to do business in Indiana.
Complaints against the firms came quickly and the state filed this civil case.
The court found the claims were properly brought
This Court has not previously interpreted the CSOA, but as discussed above, it is designed to serve the humane purpose of protecting vulnerable Hoosiers from further financial depletion by predators, and its specific protections exceed those contained in our common law. It is thus appropriate that the CSOA be liberally construed, in favor of those invoking its protections...
[Our] interpretation also compliments this Court’s disciplinary authority. In its argument supporting a CSOA law firm exemption, CAS asserts that such a ruling would “uphold the authority of the Indiana Supreme Court to discipline attorneys [and] regulate the practice of law[.]” Appellant’s Br. at 21. But the case for this construction of our Admission and Disciplinary Rules does not persuade. Rule 23 governs the discipline of attorneys, as individuals – it contains no provisions for the discipline of an entire firm as a whole. See Ind. Admis. Disc. R. 23 Sec. 3(a) (2017) (listing “types of discipline [which] may be imposed upon any attorney found to have committed professional misconduct”) (emphasis added). Indeed, with respect to law firms specifically, we have only three significant provisions regulating their conduct: (1) the unauthorized practice of law, Ind. Admis. Disc. R. 24; (2) registration as a Professional Company, Limited Liability Company or Limited Partnership practicing law in the State of Indiana, Ind. Admis. Disc. R. 27 Sec. 1, 1(b); and (3) maintaining adequate professional liability insurance for the firm, Ind. Admis. Disc. R. 27 Sec. 1(g). We thus find it reasonable that our General Assembly would choose to exempt attorneys specifically (who are subject to far more extensive disciplinary action by this Court5 ) while not exempting their firms.
March 24, 2017 in Bar Discipline & Process, Hot Topics, Law & Business, Law Firms | Permalink | Comments (0)
Tuesday, March 21, 2017
No Rule 3.7 Exception For Fee Collection Actions
An opinion of the North Carolina Court of Appeals affirms a disqualification order based on the witness-advocate rule.
This case presents the question of whether a categorical exception to the applicability of Rule 3.7 of the North Carolina Rules of Professional Conduct exists in fee collection cases. Harris & Hilton, P.A. (“Harris & Hilton”) appeals from the trial court’s order disqualifying Nelson G. Harris (“Mr. Harris”) and David N. Hilton (“Mr. Hilton”) from appearing as trial counsel in this action based on their status as necessary witnesses. Because this Court lacks the authority to create a new exception to Rule 3.7, we affirm the trial court’s order.
On 10 June 2015, Harris & Hilton filed the present action in Wake County District Court against James C. Rassette (“Defendant”) to recover attorneys’ fees for legal services the firm had allegedly provided to Defendant prior to that date. The complaint asserted that Harris & Hilton was entitled to recover $16,935.69 in unpaid legal fees. On 13 November 2015, Defendant filed an answer in which he asserted various defenses, including an assertion that no contract had ever existed between the parties.
On 10 June 2016, a pre-trial conference was held before the Honorable Debra S. Sasser. During the conference, Judge Sasser expressed a concern about the fact that Harris & Hilton’s trial attorneys — Mr. Harris and Mr. Hilton — were also listed as witnesses who would testify at trial on behalf of Harris & Hilton. After determining that Mr. Harris and Mr. Hilton were, in fact, necessary witnesses who would be testifying regarding disputed issues such as whether a contract had actually been formed, Judge Sasser entered an order on 20 June 2016 disqualifying the two attorneys from representing Harris & Hilton at trial pursuant to Rule 3.7. On 27 June 2016, Harris & Hilton filed a notice of appeal to this Court.
Harris & Hilton does not dispute the fact that (1) Mr. Harris and Mr. Hilton will both be necessary witnesses at trial; (2) their testimony will encompass material, disputed issues; and (3) none of the three above-quoted exceptions contained within Rule 3.7 are applicable. Nor does it contest the fact that a literal reading of Rule 3.7 supports the trial court’s ruling. Instead, it asks this Court to adopt a new exception based on its contention that Rule 3.7 should not be applied in fee collection actions to disqualify counsel from both representing their own firm and testifying on its behalf.
Harris & Hilton argues that permitting a law firm’s attorney to serve both as trial counsel and as a witness in a fee collection case is no different than allowing litigants to represent themselves pro se. It is true that litigants are permitted under North Carolina law to appear pro se — regardless of whether the litigant is an attorney or a layperson. See N.C. Gen. Stat. § 1-11 (2015) (“A party may appear either in person or by attorney in actions or proceedings in which he is interested.”); N.C. Gen. Stat. § 84-4 (2015) (“[I]t shall be unlawful for any person or association of persons, except active members of the Bar . . . to practice as attorneys-at-law, to appear as attorney or counselor at law in any action or proceeding before any judicial body . . . except in his own behalf as a party thereto[.]” (emphasis added)).
However, the present case does not involve the ability of Mr. Harris or Mr. Hilton to represent themselves on a pro se basis. Instead, they seek to represent their law firm — a professional corporation — in a suit against a third party while simultaneously serving as witnesses on their firm’s behalf as to disputed issues of fact. It is well established that an entity such as Harris & Hilton is treated differently under North Carolina law than a pro se litigant. See LexisNexis, Div. of Reed Elsevier, Inc. v. Travishan Corp., 155 N.C. App. 205, 209, 573 S.E.2d 547, 549 (2002) (holding that under North Carolina law, a corporation is not permitted to represent itself pro se).
Harris & Hilton also makes a policy argument, contending that the current version of Rule 3.7 is archaic and fails to take into account the disproportionate economic burden on small law firms that are forced to hire outside counsel to litigate fee collection cases. However, in making this argument, Harris & Hilton misunderstands the role of this Court given that it is asking us not to interpret Rule 3.7 but rather to rewrite it — a power that we simply do not possess.
we cannot say that the trial court abused its discretion by applying Rule 3.7 as written as opposed to creating a new exception that neither appears within the Rule itself nor has been recognized by North Carolina’s appellate courts. Accordingly, we affirm the trial court’s disqualification order.
March 21, 2017 in Clients, Current Affairs, Economics, Law & Business, Law Firms | Permalink | Comments (0)
Tuesday, May 31, 2016
Court Holds Mintz Levin Not Entitled To Summary Judgment On Discrimination And Retaliation Claims
The Massachusetts Supreme Judicial Court has held that summary judgment is not appropriate on most of an attorney's claims against the Mintz Levin law firm.
The court also held that some "self-help" options are available to an attorney alleging discrimination.
Here, we are asked to determine whether summary judgment should have entered for the employer on an employee's claims for gender discrimination and retaliation. In addressing the retaliation claim, we confront the novel question whether it is "protected activity" for an employee to search for, copy, and share with the employee's attorney confidential documents that the employee is authorized to access in the course of employment and that may help prove a discrimination claim.
The plaintiff is an attorney who worked for a Boston law firm, defendant Mintz, Levin, Ferris, Cohn, Glovsky and Popeo, P.C. (firm). During the course of her employment with that firm, from June, 2004, to November, 2008, she complained to her superiors and, ultimately, to the Massachusetts Commission Against Discrimination (MCAD), that she was being subjected to discriminatory treatment on the basis of her gender -- treatment that, she believed, led to her demotion in February, 2007. In the wake of this demotion, and on the advice of her attorney, the plaintiff searched the firm's document management system for items that might prove her assertions of discrimination. In November, 2008, after these searches were made known to the firm's chairman, the plaintiff's employment was terminated "for cause."
The plaintiff sued; the firm countersued. All the plaintiffs claims were thrown out on summary judgment
We conclude, first, that the plaintiff has presented evidence from which a reasonable jury could infer that both her demotion and her termination were the result of unlawful discrimination, as well as evidence allowing an inference that both were the result of retaliation. Therefore, summary judgment for the defendants on those counts was inappropriate. Second, we hold that an employee's accessing, copying, and forwarding of documents may, in certain limited circumstances, constitute "protected activity," but only where her actions are reasonable in the totality of the circumstances. Finally, we conclude that judgment was entered properly on the claim against Cohen for tortious interference with contractual relations.
On self help
The question whether an employee's acts of self-help discovery in aid of claims under G. L. c. 151B, § 4, may ever, under any circumstances, constitute protected activity is one of first impression for this court. Taking into consideration the interests at stake and the views of other courts that have addressed the matter, we conclude that such conduct may in certain circumstances constitute protected activity under that statute, but only if the employee's actions are reasonable in the totality of the circumstances.
New England In House had this report on the case. (Mike Frisch)
May 31, 2016 in Law & Business, Law Firms | Permalink | Comments (0)
Thursday, March 10, 2016
Estate Lawyers And Fiduciary Duties
The Mississippi Supreme Court reversed the grant of summary judgment to defendants in a legal malpractice claim arising out of a conservatorship and estate matter.
The plaintiff ("Bobby") is the spouse of the decedent ("Debbie") , whose brother ("Michael") served as her conservator. .Michael spent nearly all the funds that she had prior to her death and failed to file an inventory.
When Debbie died, it is alleged
Following Debbie’s passing, [attorney] Montgomery summoned Bobby and others to a meeting at the offices of WWM to discuss Debbie’s estate. At the meeting, Montgomery informed Bobby that he was the only “interested party” who had not signed the combined probate proceeding petition” and that, if he signed the combined petition, he would receive “big money,” but if he did not sign, the estate would sell certain guns which had sentimental value to Bobby. Montgomery also informed Bobby that Debbie’s estate lacked sufficient assets to fund a $50,000 legacy to Bobby’s grandson, and that Bobby should contribute $50,000 of the proceeds he received as beneficiary of Debbie’s $400,000 life-insurance policy. The unpaid bequest to Bobby’s grandson was the only one that had not already been satisfied. Further, Montgomery promised Bobby that, in exchange for contributing the $50,000 from his life insurance proceeds, he would give Bobby the guns, which were valued at only $14,468.48, but had high sentimental value to Bobby.
As a result of Montgomery’s representations, Bobby signed the combined petition, which designated him as a “Petitioner.” Montgomery signed the petition as an “Attorney for Petitioners.” At the time he signed the petition, Bobby was not told that Debbie’s estate had been significantly depleted by Michael’s expenditures as conservator, and Montgomery did not inform him that, by signing the petition, he would be waiving his rights to contest and to renounce Debbie’s will and receive a child’s share of the estate.
Throughout the estate proceedings, Bobby did not challenge any distributions made pursuant to the will, the status of Debbie’s estate, or the actions of the conservator, executor, or Montgomery.
The court rejected res judicata grounds for summary judgment
Montgomery and WWM argue that, because Bobby asserted a similar factual account in his Petition to Re-open Debbie’s estate, res judicata precludes him from litigating his legal-malpractice action which is predicated on the same facts. Bobby indeed alleges almost identical facts in both his Petition to Re-open and his Complaint, and this Court reasonably could conclude that the two actions contain the same “identity of the subject matter of the action.”
The “identity of the cause of action,” however, is absent. In his Petition to Re-open, Bobby merely asked that the estate proceedings be reopened to further investigate alleged wrongful conduct and specifically requested relief through the creation of a constructive trust, injunctive relief, and an accounting of the conservatorship and estate. Importantly, within the petition to reopen, Bobby did not assert any legal-malpractice or fiduciary-duty claims. In other words, Bobby sought relief solely within the context of the estate. Conversely, in his legal-malpractice complaint, Bobby specifically alleged claims (including fiduciary-duty claims)—arguing duty, breach, and causation—against Montgomery and WWM, and he requested relief in the form of damages—both actual and punitive.
On the merits
this Court has held that fiduciary relationships can arise in a variety of contexts, and that relationships between attorneys and third parties can give rise to a fiduciary relationship—and the requisite fiduciary duties—despite the absence of an actual “attorney-client” relationship. Accordingly, the general rule in Mississippi is that, under certain facts and circumstances, attorneys can acquire fiduciary obligations to third parties who are not their clients where no attorney-client relationship is present. Fiduciary relationships often turn on questions of fact related to exertion of influence, whether the reliance was justified.
In other words, while it is true that we have never held—and we do not hold today—that attorneys for estates always owe fiduciary duties to every estate beneficiary, we see no reason to carve out a rule of special protection for estate attorneys, exempting them from any beneficiary claim of a fiduciary relationship. An attorney for the estate may, under certain circumstances, owe fiduciary duties to a beneficiary of the estate based on the same considerations relevant to determine fiduciary duties to all third parties. The existence of these fiduciary relationships are questions to be determined in the trial court, and here, we believe sufficient evidence exists in the record for a factfinder to conclude that Montgomery owed Bobby fiduciary duties, even without a finding of an attorney-client relationship...
And, should the trial court find that Montgomery assumed fiduciary duties to Bobby, we also find that—viewing the facts and allegations in the light most favorable to
Bobby—Montgomery allegedly induced Bobby into signing a petition without first informing him of the consequences. This, in effect, caused Bobby to waive his statutory rights to contest and renounce Debbie’s will. Montgomery approached Bobby under circumstances which, if not enough to create an attorney-client relationship, could support an inference of dependence and trust, as Montgomery purported to have Bobby’s interests in mind and to exercise control over Debbie’s estate. There is evidence in the record to support Bobby’s claim that Montgomery coerced or compelled him to deduct $50,000 of life-insurance proceeds to fund a bequest in Debbie’s will. These acts, if true—and assuming a fiduciary relationship is found to have existed—would constitute a breach of that fiduciary duty. So genuine issues of material fact remain regarding Bobby’s fiduciary-duty claims.
To be clear, we do not address today the duties of attorneys who represent executors and administrators of estates. Montgomery claims he was the attorney for the estate and not for the executor of the estate. In thirty filings with the trial court, Montgomery was either listed as or signed as the “attorney for the Estate.”
March 10, 2016 in Clients, Law & Business, Law Firms | Permalink | Comments (0)
Saturday, March 5, 2016
Sanction Not Sustained For Limited Scope Representation
The Kentucky Supreme Court recently held that sanctions imposed against attorneys who provided services but did not sign pleadings as part of a limited scope representation could not stand.
Sarah Jackson and David Thomas, of Owensboro, individually retained Appellants Persels & Associates, LLC (“Persels”) to defend them in their debt collection cases that were pending before the Daviess Circuit Court. Persels is a national law firm organized in Maryland and engaged primarily in unsecured debt collection cases such as credit card debt. Here, Persels attempted to negotiate with the credit card companies on behalf of its clients. To assist in negotiations, Persels retained Kentucky attorneys K. David Bradley of Salt Lick, Kentucky, and Robert Gillispie of Leesburg, Virginia, to provide limited representation. Mr. Bradley was assigned to “assist” Sarah Jackson; and Mr. Gillispie was assigned to “assist” David Thomas.
The terms of Jackson's and Thomas's limited-representation agreements with Persels were confined to drafting and consultation services. The agreements specifically provided that neither Kentucky lawyer was required to sign pleadings, enter an appearance, or attend court proceedings. Therefore, it appears that the defendants were nominally pro se. They either signed the documents that were prepared for them, or were at least instructed to do so by counsel. In 2011, however, the Daviess Circuit Court ordered Attorneys Bradley and Gillispie to appear and show cause as to why they should not be held in contempt for their failure to enter their appearances and sign documents filed with the court. The trial court consolidated the two cases and permitted Persels to intervene as a third party respondent.
Sanctions under Kentucky's Rule 11 were imposed and affirmed by the Court of Appeals.
The rationale behind CR 11 is to regulate the litigation process so that pleadings are valid for everyone – indigent or not. Second, pro se clients, indigent or not, must follow the rules of civil procedure, too. Unfortunately, the solution for providing legal service for indigent clients is much broader and more complex than this case. Undoubtedly, a decision to authorize limited representation through unbundled legal services in Kentucky would likely necessitate a review of the rules of practice, and perhaps, amendments to the civil rules. Such a course of action is not impeded or prevented by the actions of the Daviess Circuit Court in enforcing CR 11.
In conclusion, the trial court was not clearly erroneous in its findings nor did it abuse its discretion in the imposition of its sanction. In sum, we concur with the legal reasoning of the trial court and hold that pleadings prepared with the assistance of an attorney in the Commonwealth must be signed by the attorney.
The court here disagreed and considered the policy implications of limited scope representation agreements.
Kentucky Supreme Court Rule (“SCR”) 3.130 (Rule 1.2) governs the scope of representation and allocation of authority between client and lawyer. It provides in part: “A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent.” SCR 3.130(1.2)(c). Comment 6 further defines the nature and scope of limited representation agreements and provides in part:
A limited representation may be appropriate because the client has limited objectives for the representation. In addition, the terms upon which representation is undertaken may exclude specific means that might otherwise be used to accomplish the client's objectives. Such limitations may exclude actions that the client thinks are too costly or that the lawyer regards as repugnant or imprudent...
There is a significant portion of the population comprised of individuals who are not indigent yet do not possess the means to afford full and rigorous representation of counsel. See Cristina L. Underwood, Comment, Balancing Consumer Interests in a Digital Age: A New Approach to Regulating the Unauthorized Practice of Law, 79 Wash. L.Rev. 437, 442 (2004) (“Many low- and moderate-income households simply cannot afford the cost of personal legal services.”). Indeed, “[s]ubstantial evidence indicates the existence of a latent marketplace for personal civil legal services to those of low and moderate incomes.” Accordingly, many of our citizens cannot afford the full breadth of legal representation but are nevertheless in need of representation of some degree.
We encourage lawyers to take on cases that service the less fortunate.
The image of our profession is enhanced by these admirable efforts. Therefore, it is clear that limited-representation agreements are necessary to some extent. However, we acknowledge that these types of arrangements may be abused to the detriment of the litigants and the courts.
These policy concerns lead to this conclusion
In keeping with the letter and spirit of SCR 3.130 (Rule 1.2) and its accompanying commentary, we authorize agreements that limit the scope of legal assistance or that limit representation to discrete legal tasks, so long as they are reasonable under the circumstances and the client gives informed consent. See Rochelle Klempner, Unbundled Legal Services in New York State Litigated Matters: A Proposal to Test the Efficacy Through Law School Clinics, 30 N.Y.U. Rev. L. & Soc. Change 653, 654 (2006). This includes limitations on services provided in furtherance of traditional litigation as well as alternative dispute resolution methods.
Agreements that limit representation to distinct stages of litigation may also be reasonable under the circumstances. The monumental increase in pro se and nominal pro se domestic filings provides a particularly apt example of the need for this unique type of limited-representation. For instance, family law practitioners may provide comprehensive representation during property division proceedings but not provide representation in any form during child custody proceedings, or vice versa. However, these types of agreements must be carefully tailored to avoid abuse and confusion from the perspective of the client and the court.
To clarify, in addition to being reasonable under the circumstances, all agreements which limit representation must be in writing, require the informed consent of the client(s), and must comport with our rules, including the rules of professional conduct.
However, we do not adopt a strict rule requiring drafting attorneys to sign the documents they prepare pursuant to limited-representation agreements. An attorney involved in the preparation of initial pleadings (complaint, answer, cross-claims and counter-claims), must indicate that the document has been prepared by or with the assistance of counsel by providing “Prepared By or With Assistance of Counsel” on the document concerned. See Bhojani, 65 SMU L.Rev. at 680 (“since the court is not being misled as to the fact of the drafting assistance, the attorney is not violating the duty of candor and not deceiving the court.”). Of course, in cases where there is one or more attorneys of record, at least one attorney of record must sign documents presented to the court and provide their address in accordance with CR 11. Pro se litigants must also satisfy the signature and address requirements of CR 11.
Furthermore, active assistance by counsel must be disclosed to the presiding tribunal and adversaries. Active assistance includes drafting documents in furtherance of litigation that extend beyond initial pleadings. Notice of active assistance shall include the name, address, and telephone number of the attorney(s) working on the case, and the nature of the limited representation agreement at issue. However, such disclosures do not constitute an appearance by counsel, nor do they require the drafting attorney to appear in court on behalf of the litigant receiving limited representation unless the court or the surrounding circumstances dictate otherwise. For example, cases involving expedited or emergency relief may justify comprehensive representation, or at least a limited appearance of counsel, for the purpose of resolving the expedited matter.
In all cases, attorneys providing limited-representation are required to adequately investigate the facts to ensure that the pleadings or other documents drafted in furtherance of litigation are tendered in good faith. See Rule 3.1. Moreover, attorneys providing limited-representation of any kind may not deceptively engage in a more complete role. See Rule 8.4.
Lastly, limited representation does not require proof of indigence. Although the financial means of litigants pursuing limited-representation may be considered by courts as relevant to the overall reasonableness of the agreement, a litigant's financial status is not a dispositive factor. On this issue, deference should be afforded in favor of the litigant seeking limited representation.
...whether the agreement is reasonable also goes to the question whether it is ethical And because it is an agreement entered into by an attorney, if it is unreasonable, for example as to the fees charged, then the attorney may have committed an ethical violation by negotiating an unreasonable contract with his client. Certainly, if a trial court becomes aware of such unreasonable aspects of a limited-representation agreement, then the court has a duty to file a bar complaint against the offending attorney, as does opposing counsel who may become aware of the situation. Indeed, the party to the agreement may do likewise. But collateral contract disputes or ethical violations are not proper issues for a trial court to address with CR 11 sanctions merely because a pleading is not signed by the attorney who drafted the document.
To clarify, we do not limit the authority of courts to impose other appropriate remedies that are necessary to maintain order and the integrity of the legal profession. For example, if the court determines that a limited representation agreement is unreasonable, the court may order counsel to cease providing legal assistance of any kind to the client. If an attorney continues to provide legal assistance for a client in violation of the court's order, the court may exercise its contempt authority in order to enforce its order.
The court remanded for a hearing on the reasonableness of the limited scope representation of the clients.
This is a decision of potential significance. (Mike Frisch)
March 5, 2016 in Clients, Current Affairs, Law & Business, Law & Society | Permalink | Comments (0)
Thursday, January 7, 2016
State Of The Profession
Georgetown Law's Center for the Study of the Legal Profession has an announcement of a significant report
Law firm leaders need to make bold, proactive changes in how legal services are delivered if firms are to thrive in the rapidly changing legal marketplace. That is among the findings of the “2016 Report on the State of the Legal Market” just issued by the Center for the Study of the Legal Profession at Georgetown University Law Center and Thomson Reuters Peer Monitor.
Two thousand fifteen saw a sixth consecutive year of largely flat demand, weakening pricing power and falling productivity. The report notes that since 2008, the law firm market “has changed in significant and fundamental ways.” Clients have assumed active control of the organization, staffing, scheduling and pricing of legal matters, where previously they had largely left those decisions in the hands of law firms. In addition, competitors such as alternative legal services providers, accounting firms and consultants, continue to grow market share.
The report suggests that law firms need to shift their focus from growth to market differentiation and profitability. But resistance to change can make it difficult for firms to adopt new strategies such as redesigning work processes, adopting new staffing models or setting new pricing strategies. In addition, many firms are locked into a “billable hour mentality” that inhibits creative alternate approaches to the delivery of legal services.
The report is jointly issued on an annual basis by the Center for the Study of the Legal Profession at Georgetown University Law Center and Thomson Reuters Peer Monitor and reviews the performance of U.S. law firms and considers the changed market realities that drive the need for firms to take a longer-range and more strategic view of their market positions going forward.
“Fundamental shifts such as we have seen in the market for law firm services since 2008 require firms to take a hard look at the long-term viability of operating and pricing models that have worked well in the past but may be at risk in the newly developing market environment,” said James W. Jones, a senior fellow at the Center for the Study of the Legal Profession and one of the report's authors. “Firms that are able to redesign their models to better respond to the changing demands and expectations of their clients will have a substantial long-term competitive advantage.”
“A ‘buyer’s market’ for legal services is bringing increasing demands from clients, more nimble and leaner competitors and greater pressures for efficiency,” said Mike Abbott, vice president, Client Management & Global Thought Leadership, Thomson Reuters. “The good news is that some firms are already making strategic changes and performing strongly. The imperative is for firms to identify the best strategy for adapting to the rapidly evolving marketplace, given their unique strengths, talent, geographies and other assets.”
The “2016 Report on the State of the Legal Market” can be downloaded here.
January 7, 2016 in Current Affairs, Law & Business, Law Firms, The Practice | Permalink | Comments (0)
Tuesday, November 17, 2015
Zacharias Prize Recipients Named
Samuel Levine of Touro Law Center has announced that the winners have been selected for the sixth annual Fred C. Zacharias Memorial Prize for Scholarship in Professional Responsibility. The Prize will be awarded to Elizabeth Chamblee Burch, for her article Judging Multidistrict Litigation, 90 NYU L. Rev. 71 (2015), and Morris A. Ratner, for Class Counsel as Litigation Funders, 28 Geo. J. Legal Ethics 271 (2015). The Prize will be awarded at the AALS Annual Meeting in New York in January. Congrats! (Alan Childress)
November 17, 2015 in Judicial Ethics and the Courts, Law & Business, Professional Responsibility | Permalink | Comments (0)
Monday, October 19, 2015
No Duty To Adversary
An attorney for a bank that had initiated foreclosure proceedings against a homeowner was entitled to summary judgment when sued by the opposing party, according to a decision of the Louisiana Supreme Court.
We granted certiorari to determine whether private attorneys for a lender which improperly seized a home are entitled to judgment as a matter of law on the ground their actions did not violate 42 U.S.C. § 1983. For the reasons that follow, we find the district court properly granted summary judgment, and the court of appeal erred in reversing that judgment.
we find no unconstitutional seizure of Ms. Smith’s property occurred. Rather, she was given sufficient opportunity to contest the actual seizure of her property. This conclusion is supported by the fact that Ms. Smith successfully obtain an injunction to prevent the seizure of her property.
Ms. Smith contends Dean Morris acted recklessly in proceeding with the executory process after she sent a letter to Saxon (which was ultimately forwarded to Dean Morris) advising that the executory foreclosure was not properly supported. We acknowledge the mortgage was not in authentic form due to the absence of witnesses during the execution of the mortgage. However, as explained by the district court, the physical absence of a witness in the execution of the act of mortgage is a latent defect which is not chargeable to the attorney petitioning for executory process.
Louisiana subscribes to the traditional, majority view that an attorney does not owe a legal duty to his client's adversary when acting on his client's behalf. Penalber v. Blount, 550 So.2d 577, 581 (La. 1989). A non-client, therefore, generally cannot hold his adversary's attorney personally liable for either malpractice or negligent breach of a professional obligation. Id. However, intentionally tortious actions, ostensibly performed for a client's benefit, will not shroud an attorneywith immunity. Id.
There is no evidence Dean Morris acted with specific intent to harm Ms. Smith. At most, its actions were negligent. Under the clear language of Penalber, such negligence is not sufficient to make an attorney liable to a non-client such as Ms. Smith.
In summary, we conclude Ms. Smith has failed to produce any evidence supporting her conclusion that Dean Morris violated her constitutional rights in violation of section 1983. At most, Ms. Smith has shown Dean Morris misused the executory process provisions. Such allegations are insufficient to support an action against private attorneys under the parameters set forth in Lugar v. Edmonston Oil Co., 457 U.S. 922 (1982).
October 19, 2015 in Law & Business | Permalink | Comments (0)
Wednesday, July 22, 2015
Tears Of A Judge
SunEthics has a recent case of interest involving judicial disqualification from the Florida Fourth District Court of Appeal.
There had been bad blood between the judge and petitioner's counsel such that, as a matter of tactics, another member of counsel's firm handled a second trial,
The alleged hostility arose in an unrelated Engle case wherein the judge issued a fifteen-page order granting a motion for new trial based largely on counsel’s courtroom behavior.
Within that order the judge detailed the attorney’s conduct characterizing it as misleading and a fraud on the court. The hostility between the two carried over into proceedings concerning the judge’s nomination for appointment to the federal bench. The judge furnished the nominating committee a copy of the order as a writing sample. Thereafter, the attorney sent the committee a letter challenging the facts contained in the order and questioning the judge’s suitability for appointment to the federal bench. Following the judge’s unsuccessful nomination, petitioner and other Engle plaintiffs represented by the attorney and his firm moved to disqualify the judge. The judge denied the motion, and we denied the prior prohibition petition.
But an issue arose when counsel attended closing arguments
The events surrounding this second motion arose after the attorney was present in the courtroom to observe a portion of a firm member’s closing arguments and after the jury returned its verdict. According to petitioner, she and her trial counsel approached the bench to thank the judge. Petitioner alleges that as the two were walking away from the bench, the judge commented that she had seen the attorney in the courtroom and that she would “never forgive him for what he did to me.” Petitioner alleged that it appeared to her that the judge was “highly emotional and on the verge of tears as she said this.”
Petitioner alleged that while she was previously aware of the issues between the judge and her attorney, she did not appreciate “the depth of the hostility or how deeply hurt the judge was by [counsel’s] active opposition to her quest for a federal judgeship.” Petitioner’s trial attorney, who was present at the bench with petitioner, furnished an affidavit echoing petitioner’s representation of the judge’s comments and adding that the judge said she “will never forget what he did. I will never forgive him and I took it personally. It was very hurtful and it made me cry.” Counsel added that the judge told him that he could communicate that sentiment to the attorney...
Accepting the allegations within the motion and affidavits as true, we conclude that the judge’s alleged inability to restrain either her utterances or her emotions in front of the petitioner would, if true, show that the experience profoundly affected her and made her future impartiality reasonably suspect. The source of this prejudice is personal and unrelated to petitioner’s case and trial counsel’s conduct therein. See, e.g., Lamendola v. Grossman, 439 So. 2d 960 (Fla. 3d DCA 1983). Though we previously concluded that any hostility arising from the events of the judicial nominating process did not warrant disqualification, the judge allegedly opened the door and displayed the depth of such hostility by failing to remain silent despite the passage of time.
Based on the foregoing, we conclude that a reasonably prudent person would be in fear of not receiving fair and impartial judicial review of the pending matters.
The case involves litigation against tobacco companies.
Palm Beach Coast had this coverage. Daily Business Review also had a report. (Mike Frisch)
July 22, 2015 in Judicial Ethics and the Courts, Law & Business | Permalink | Comments (0)