Tuesday, December 15, 2015
The New York Court of Appeals has reversed an Appellate Division decision on spoliation of evidence.
A party that seeks sanctions for spoliation of evidence must show that the party having control over the evidence possessed an obligation to preserve it at the time of its destruction, that the evidence was destroyed with a "culpable state of mind," and "that the destroyed evidence was relevant to the party's claim or defense such that the trier of fact could find that the evidence would support that claim or defense" (Voom HD Holdings LLC v Echostar Satellite L.L.C., 93 AD3d 33, 45 [1st Dept 2012], quoting Zubulake v UBS Warburg LLC, 220 FRD 212, 220 [SD NY 2003]). Where the evidence is determined to have been intentionally or wilfully destroyed, the relevancy of the destroyed documents is presumed (see Zubulake, 220 FRD at 220). On the other hand, if the evidence is determined to have been negligently destroyed, the party seeking spoliation sanctions must establish that the destroyed documents were relevant to the party's claim or defense (see id.).
On this appeal, we are asked to decide whether the Appellate Division erred in reversing an order of Supreme Court that imposed a spoliation sanction on the defendants. We hold that it did, and remand the matter to the trial court for a determination as to whether the evidence, which the Appellate Division found to be negligently destroyed, was relevant to the claims asserted against defendants and for the imposition of an appropriate sanction, should the trial court deem, in its discretion, that a sanction is warranted.
Justice Stein dissented
I part ways with the majority over its determination that the MP defendants' "culpable state of mind" amounted to, at most, simple negligence. I would hold that defendants acted with gross negligence in failing to preserve the ESI.
I further disagree with the majority's view that relevance is not to be presumed because the evidence was not intentionally or wilfully destroyed. The majority endorses the conclusion of the First Department in VOOM and the case upon which it relies -- Zubulake v UBS Warburg LLC (220 FRD 212, 220 [SD NY 2003] -- that, "[w]here the evidence is determined to have been intentionally or wilfully destroyed, the relevancy of the destroyed documents is majority neglects to mention that VOOM further held that "destruction that is the result of gross negligence" also "is sufficient to presume relevance" (VOOM, 93 AD3d at 45). Inasmuch as, under VOOM, the MP defendants' gross negligence gives rise to a presumption of relevancy, I would remit to the Appellate Division for consideration of whether, in its discretion, a sanction is warranted.
Tuesday, May 5, 2015
The New York Appellate Division for the First Judicial Department recently held that the litigation privilege did not protect statements made by an attorney in connection with "sham" litigation
Plaintiff is an attorney who, after dissolving his own practice, became associated with nonparty Jacoby & Meyers, LLP (Jacoby). Defendant Andrew Finkelstein (Finkelstein) is an attorney and is the managing partner of defendant law firm Finkelstein & Partners, LLP (FLLP), and the sole shareholder of defendant Finkelstein, PC (FPC). FPC is a partner of both Jacoby and of FLLP. In April 2009, Jacoby assigned plaintiff to work on a personal injury action that had been commenced on behalf of nonparty Joel Harrison (Harrison) in Supreme Court, Broome County. In December 2009, plaintiff resigned from Jacoby and re-formed his old practice. Harrison decided to have plaintiff continue his representation in the personal injury action and Jacoby caused the necessary consent to be executed and transferred the file. The retainer agreement between plaintiff and Harrison provided that plaintiff would advance all litigation expenses and would be reimbursed out of Harrison's recovery, if any. After the passage of only a few months, Harrison terminated plaintiff and re-retained Jacoby.
In August 2010, Harrison, represented by FLLP, commenced an action against plaintiff in Supreme Court, Broome County. The allegations in the complaint, most of which were made upon information and belief, revolved around the litigation expenses that had been discussed in the retainer agreement between the two parties. Harrison asserted that, notwithstanding plaintiff's promise that he would advance litigation expenses, plaintiff told him that he would not do so and urged Harrison to borrow $40,000 for the expenses from a litigation funding company. The complaint alleged, inter alia, that plaintiff directed the loan company to pay the proceeds to his law firm and that he failed to place them in an attorney escrow account. Harrison asserted causes of action for conversion, breach of fiduciary duty, legal malpractice, and fraud, and sought an accounting from plaintiff.
This Court has recognized...that the privilege is capable of abuse and will not be conferred where the underlying lawsuit was a sham action brought solely to defame the defendant (see Lacher v Engel, 33 AD3d 10, 13-14 [1st Dept 2006]). Lacher derived this principle from Halperin v Salvan (117 AD2d at 544), in which this Court declined to dismiss a defamation claim based on the pertinency privilege where the context in which the allegedly offending statement was made was a litigation that the plaintiffs filed but never prosecuted. The existence of this "sham litigation" exception has been confirmed (but not applied) in other cases in this Department...
Even assuming that plaintiff's fraud claim is not barred solely because he was not the direct recipient of the alleged misrepresentations, we find that he was not entitled to rely on them. That is because, according to the complaint, the misrepresentations were made sometime after June 16, 2010, which was when Harrison re-retained Jacoby to handle his personal injury action. As admitted in the complaint herein, plaintiff learned on December 29, 2009, that he had already been the subject of separate statements by defendants which he alleged were defamatory (see Flomenhaft v Jacoby & Meyers, LLP, 122 AD3d at 423). Accordingly, knowing defendants were, according to him, bent on destroying his reputation, it was not justifiable for plaintiff to view the statements to Harrison as anything other than a further salvo in that campaign.
Friday, April 17, 2015
The Nebraska Supreme Court overturned the grant of a new trial to the plaintiff in a legal malpractice case and reinstated the verdict in favor of the defendant law firm.
Thomas Balames, filed this legal malpractice action against Robert Ginn and Brashear LLP, formerly known as Brashear and Ginn (collectively Ginn), the firm where Ginn practiced when the alleged malpractice occurred. Balames brings this action for himself and three other individuals for whom he serves as attorney in fact (collectively Balames). Balames claimed that Ginn negligently failed to obtain signatures on a guaranty for a loan that Balames made to a third party and failed to inform Balames of the missing signatures. When the third party defaulted, Balames could not obtain a judgment against the individuals who were the intended guarantors for the full amount of the third party’s obligation. The jury returned a general verdict for Ginn, but the court granted Balames a new trial.
The client sought to complete the transaction while the attorney was on vacation. The client had not previously advised the attorney that the situation was urgent and terminated his services shortly thereafter.
[Client] Balames admitted to being pressured by his bank to complete the transaction, and he insisted upon getting the documents to the bank as soon as humanly possible. [Attorney] Ginn’s evidence supported a reasonable inference that because Balames and his business associates had personally guaranteed the loan, they had an immediate need to show the bank that they had renegotiated the debt with Banopu. The crucial point here is that a client has the ultimate authority to determine the objective of a legal representation. Of course, an attorney should make reasonable efforts to explain the legal consequences of a course of conduct that a client insists upon taking. Yet, evidence regarding Ginn’s advisement raised a question of fact whether Ginn had breached a duty of care. That is, if the jury determined that Balames insisted upon closing without Ginn’s review, whether Ginn’s advisements were sufficient to inform Balames of the potential consequences was a question of fact.
The jury verdict sufficiently dealt with the issues
When the jury returns a general verdict for one party, a court presumes that the jury found for the successful party on all issues raised by that party and presented to the jury, particularly when the opposing party did not ask the court to give the jury a special verdict form or require the jury to make special findings. This is true both for Ginn’s failure-of-proof defense and his statute of limitations defense which barred Balames’ recovery even if he proved his malpractice claim. Because the court erred in concluding that plain error permeated the trial, this presumption controlled...
If the jury believed Ginn’s version of the facts, then Ginn did not breach a duty to ensure that the documents were signed before or after the closing. Instead, Balames’ injury was caused by his failure to follow Ginn’s advice, his failure to review the documents for the required signatures, and his misrepresentation to Ginn that the documents were signed.
Thursday, April 9, 2015
From the Indiana Supreme Court
The law firm Cohen & Malad, LLP ("C & M"), filed a quantum meruit claim for part of the contingent fees earned in cases that were handled first by C & M attorneys (including John P. Daly, Jr., when employed there as an associate) and later by Daly and his law firm after he left C & M. The trial court found that C & M attorneys – including Daly while employed there – worked a substantial number of hours on those cases and that most of those cases generated attorney fees. The court nevertheless denied C & M quantum meruit relief because it found Daly was not unjustly enriched where: (1) the client in each case at issue chose to continue with Daly when he left C & M, (2) C & M and Daly had no agreement about what would happen if they parted ways, (3) their employment agreement had no provision for file ownership and lacked a non-competition covenant, and (4) C & M made a "very shrewd deal" for Daly’s services when it employed him on a salary basis, and C & M was "very well compensated" for Daly’s time at C & M, as shown by the amount of fees Daly helped C & M generate on other cases while he worked there. (App. at 32-33.) C & M appealed. Citing the four enumerated findings above, the Court of Appeals affirmed, over Judge Crone’s dissent. Cohen & Malad, LLP v. Daly, 17 N.E.3d 940 (Ind. Ct. App. 2014). We grant transfer.
Absent agreement otherwise, "a lawyer retained under a contingent fee contract but discharged prior to the contingency is entitled to recover the value of services rendered if there is a subsequent settlement or award[,]" and in that case, "the fee is to be measured by the proportion of the total fee equal to the contribution of the discharged lawyer’s efforts to the ultimate result[.]" Galanis v. Lyons & Truitt, 715 N.E.2d 858, 860 (Ind. 1999). The trial court’s findings of fact and conclusions of law do not acknowledge Galanis or apply its standards. Accordingly, we reverse and remand with instructions to determine, in accordance with Galanis, what proportional contributions toward the results in the cases at issue were made by attorneys working for C & M, and to enter a corresponding judgment in C & M’s favor. We summarily affirm the part of the Court of Appeals opinion addressing whether C & M should have sued its former clients to recover attorney fees from them. see Ind. Appellate Rule 58(A)(2).
Opinion linked here. (Mike Frisch)
Monday, April 6, 2015
An attorney disciplined in Indiana for a contractual provision that limited an associate's post-employment ability to practice was reprimanded as reciprocal discipline by the Kentucky Supreme Court.
The misconduct at issue in this disciplinary action arises from an employment contract Respondent required his new associate attorney to sign as a condition of his hiring. The contract included a "Separation Agreement" (the "Agreement"), which specified that in the event the employment relationship ended, the associate was prohibited from contacting, notifying, or soliciting the clients he obtained while working at Respondent's law firm. Only Respondent had the luxury of notifying the clients of the associate's departure. The Agreement further included a fee arrangement which highly deterred the associate from continuing to represent those clients.
The associate filed the bar complaint in Indiana.
The court rejected private discipline. (Mike Frisch)
The Kentucky Supreme Court has held that the appearance of impropriety is a legally insufficient basis to disqualify a law firm in a shareholder-derivative action.
The Court concludes that review of the disqualification order in this case is available through the special-cases exception for writs. Further, this Court concludes the trial court applied a disqualification standard that is no longer appropriate under the Rules of Professional Conduct, and that the trial court's factual findings are insufficient to allow disqualification under the proper standard of a showing of actual conflict. For those reasons, a writ of prohibition barring enforcement of the trial court's order is appropriate at this time, even though the issue of disqualification may be revisited in the trial court. The Court of Appeals' decision to deny the writ is therefore reversed, and this matter is remanded to that court to issue the writ.
As noted, disqualification may be appropriate later
This is not to say, however, that Plante cannot show a sufficient conflict to have ]law firm] MGM disqualified once this case returns to the trial court. It is possible that by advising the board, of which Plante was a member, about the Bioniche litigation, MGM was representing Plante. Since the allegedly improper resolution of the Bioniche litigation is part of the underlying derivative suit, among other things, it is possible that MGM may have an actual conflict under Rule of Professional Conduct 1.9, which governs duties to former clients. There has also been some suggestion that MGM now represents the entire board, including Plante, in the derivative action, although only the Appellants appear to have been named as defendants. If MGM is representing the entire board, that could give rise to a conflict with an existing client under Rule 1.7.
Thursday, April 2, 2015
The Nevada Supreme Court has held a law firm not liable for estate planning work that transferred a client's assets to a trust.
The suit was brought by a creditor of the client
In this case, we consider whether, under Nevada's fraudulent transfer law, a nontransferee law firm may be held liable for its client's fraudulent transfers under the accessory liability theories of conspiracy, aiding and abetting, or concert of action. We hold that Nevada, like most other jurisdictions, does not recognize accessory liability for fraudulent transfers. We therefore affirm the district court's judgment in favor of the law firm. We further hold, however, that the district court abused its discretion by awarding costs to the law firm without sufficient evidence showing that each cost was reasonable, necessary, and actually incurred. Thus, we reverse, in part, the district court's post-judgment order awarding costs.
In 2004, Robert Krause retained respondent law firm Woods & Erickson, LLP, for estate planning services. The following year, Woods & Erickson created for Krause various legal entities, including an asset protection trust, into which Krause eventually transferred his assets. Meanwhile, appellant The Cadle Company (Cadle) was attempting to collect on a California judgment against Krause. After learning of the transferred assets, Cadle sued Krause and Woods & Erickson in the underlying action, alleging that Krause had fraudulently transferred assets in order to escape execution of the judgment and that Woods & Erickson had unlawfully facilitated the fraudulent transfers.
Plaintiff loses; law firm wins.
The case is Cadle Co. v. Woods & Erickson LLP, decided March 26, 2015. (Mike Frisch)
Wednesday, March 4, 2015
Allegations of conflict of interest were properly alleged in litigation against the Blank Rome law firm, according to this decision of the New York Appellate Division for the First Judicial Department.
the complaint alleges that defendants concealed a conflict of interest that stemmed from defendant law firm's attorney-client relationship with Morgan Stanley while simultaneously representing plaintiff in divorce proceedings against her ex-husband, a senior Morgan Stanley executive, who participated in Morgan Stanley's decisions to hire outside counsel..
plaintiff identifies the nature of the conflict as stemming from defendants' interest in maintaining and encouraging its lucrative relationship with Morgan Stanley and the impact of that interest on defendants' judgement in its representation of plaintiff in the divorce proceedings..
Further, the complaint alleges numerous acts of deceit by defendants, committed in the course of their representation of plaintiff in her matrimonial action. Additionally, the complaint sufficiently alleges that the individual defendants knew of but did not disclose defendant law firm's representation of Morgan Stanley to plaintiff, and it details the calculations of her damages.
The allegations were not subject to strike as scandalous or prejudicial. (Mike Frisch)
Tuesday, February 24, 2015
A recent opinion from the District of Columbia Bar Legal Ethics Committee.
Headnote summary of Opinion No. 368:
A law firm may not provide for or impose liquidated damages on a lawyer who, after departure, competes with the firm. A firm and a departing lawyer may have liability to one another, though, for work done before the lawyer's departure. Also, a firm may not restrict a departed lawyer's subsequent professional association or affiliation with partners or employees of the firm, except insofar as such activity is subject to legal limitations outside the Rules of Professional Conduct. Whether a choice of law provision in a partnership or employment agreement can avoid application of the D.C. Rule governing lawyer departures usually will depend on the location where the departing lawyer principally practiced.
The opinion also deals with choice of law issues. (Mike Frisch)
Thursday, February 12, 2015
The District of Columbia Court of Appeals has affirmed the dismissal of claims brought by a former Wiley Rein employee against the firm.
Alvin Hoff, formerly an at-will employee at the Wiley Rein law firm, seeks reversal of the trial court‟s dismissal of his two-count lawsuit against the firm. He claims: (1) "wrongful termination" of his employment because he refused the firm‟s demand to violate a criminal law, and (2) "retaliatory discharge" because that refusal, contrary to the direction of his supervisor, was protected by the District of Columbia Human Rights Act (DCHRA). More specifically, appellant Hoff, a former records coordinator for appellee Wiley Rein, claims that he was fired unlawfully because he had not been willing to enhance, and thus falsify, the performance evaluation of another employee at the request of Hoff‟s supervisor, who allegedly had tender feelings for that employee. Hoff contends that the trial court erred in granting Wiley Rein‟s motion to dismiss on the ground that he had failed to plead facts sufficient to support either count in his complaint. Perceiving no error, we affirm.
Senior Judge Ferren for a unanimous division of the court
whatever reason Wiley Rein may have had for firing Hoff, his complaint offers no explanation beyond the fanciful proposition that [supervisor] McCleskey fired Hoff because Hoff had filed an "unsatisfactory" evaluation of Ward—an evaluation that, as Hoff‟s own complaint acknowledges, McCleskey himself had requested.
Thursday, December 4, 2014
We don't report on many (indeed any) worker's compensation cases but this one from the West Virginia Supreme Court of Appeals caught our eye.
The employee worked as a legal secretary for a law firm. She was diagnosed with carpel tunnel syndrome and cubital tunnel syndrome.
The court affirmed the findings below that the condition was not the result of her clerical work
This Court agrees with the reasoning of the Office of Judges and the conclusions of the Board of Review. Under West Virginia Code of State Rules § 85-20-41.5, clerical work is not a high risk job for producing or developing carpal tunnel syndrome, and Ms. Whitten does not have any of the contributing factors listed under § 85-20-41.5. Ms. Whitten also has a non-occupational risk factor of obesity. Dr. Mukkamala and Dr. Thaxton found Ms. Whitten’s condition was not related to her work duties. Dr. Bolano opined Ms. Whitten’s condition was occupationally related, but not until January of 2013 after he had already been treating Ms. Whitten for these diagnoses and symptoms since February 27, 2012. In addition, her symptoms began in November of 2010, but she did not mention that her symptoms were caused by her work or related to her job duties until January of 2013.
The work responsibilities did not include "[a]wkward wrist position, vibratory tools, significant grip force, and high force of repetitive manual movements" that can lead to the diagnosed conditions. (Mike Frisch)
Sunday, November 30, 2014
A decision issued last week by the California Court of Appeals, Second District, Division Three holds
The question before us is whether the attorney-client privilege applies to intrafirm communications between attorneys concerning disputes with a current client, when that client later sues the firm for malpractice. We conclude that when an attorney representing a current client seeks legal advice from an in-house attorney concerning a dispute with the client, the attorney-client privilege may apply to their confidential communications. Adoption of the so-called "fiduciary" and "current client" exceptions to the attorney-client privilege is contrary to California law because California courts are not at liberty to create implied exceptions to the attorney-client privilege. In the unpublished portion of the opinion, we hold that the exceptions to the attorney-client privilege embodied in Evidence Code sections 958 and 962 do not apply to the circumstances presented here. Accordingly, we grant in part the petition of Edwards Wildman Palmer LLP and Dominique Shelton for a writ of mandate, and remand to the trial court for further proceedings.
The client had retained the law firm to pursue an invasion of privacy claim against the Daily Mail. As the court noted
The relationship between [client] Mireskandari and the Firm was short lived and, for the most part, contentious.
The court rejected the suggestion that internal counsel and the client were "joint clients" of the firm
Shelton and Mireskandari were not joint clients for purposes of section 962. Shelton and Mireskandari did not retain the Firm "upon a matter of common interest." Mireskandari retained the Firm and Shelton to represent him in the Daily Mail case; Shelton consulted with in-house counsel not as a party to that action, but to obtain advice on how best to address Mireskandari's complaints about billing and his threats to hold the firm responsible for any damages he suffered. Mireskandari and Shelton were not co-parties; they did not employ the same attorney to oppose claims of an adversary or pursue a claim as joint plaintiffs; they were not represented by the same attorney in a business transaction.
The court vacated an order that had permitted discovery into the firm's internal communications.
Thank you to my former student Daniel Woofter for sending me the case. His article from the Georgetown Journal of Legal Ethics is cited in the opinion. (Mike Frisch)
Friday, November 14, 2014
The New Jersey Appellate Division has reversed a lower court order and dismissed a legal malpractice claim.
Under the facts of this case, [attorney] Ward argues that he is shielded from liability as a partner in a limited liability partnership ("LLP") and is therefore not vicariously liable for the alleged legal malpractice of his former partner, defendant John Olivo. Ward also contends that he is otherwise entitled to a dismissal of the complaint because plaintiff Mortgage Grader, Inc. ("MG") failed to serve an affidavit of merit ("AOM") on Ward or substantially comply with the AMS.
The primary issue is whether Ward loses his liability protection as a partner in an LLP if the LLP failed to purchase a tail insurance policy. We disagree with the motion judge that such a sanction is authorized and hold that when attorneys practice law as an LLP, and the LLP fails to obtain and maintain professional liability insurance as required by Rule 1:21-1C(a)(3), the LLP does not revert to a general partnership ("GP") under the Uniform Partnership Act ("UPA"),
if attorneys practice as an LLP, and the LLP fails to maintain malpractice insurance as required by the court rules, then the Supreme Court may terminate or suspend the LLP's right to practice law or otherwise discipline it. As currently written, however, the court rules do not authorize a trial court to sanction a partner of an LLP for practicing law as an LLP without the required professional liability insurance by converting an otherwise properly organized LLP into a GP.
Wednesday, October 22, 2014
My favorite issue of the Georgetown Journal of Legal Ethics -our yearly compilation of student notes on current developments in ethics law - has just hit the street.
This issue holds up well with the past editions and gives the reader excellent exposure to the hottest legal ethics issues that face 21st century members of the legal profession.
As co-faculty advisor (along with my colleague Professor Mitt Regan) to the journal, I am biased in its favor.
With that disclaimer, I highly recommend that all practitioners with an interest in ethics take a look.
Kudos to the journal staff for their hard work and dedication to this notable contribution to the profession. (Mike Frisch)
Wednesday, August 13, 2014
The New Hampshire Supreme Court has reversed an order dismissing a legal malpractice case.
The court held that there is no per se rule that requires a legal malpractice plaintiff to offer expert testimony
...the trial court granted the defendants’ motion to dismiss because "the plaintiff . . . failed to disclose an expert capable of establishing the standard of care and the breach of that standard of care as well as the proximate cause of the alleged injuries." The trial court based its decision on a categorical rule that, "[b]ecause the extent to which an attorney, in the exercise of due care, should investigate a claim to file a timely action is not a matter of common knowledge, a jury would not be able to evaluate the adequacy of the attorney’s actions without the aid of expert testimony." (Quotation omitted.) Because we have not adopted such an unqualified rule, the trial court erred as a matter of law in granting the motion to dismiss. See, e.g., Carbone, 151 N.H. at 528-29 (explaining case was not "one of those exceptional cases where [the defendant’s] breach of the standard of care was so obviously the legal cause of [the plaintiff’s] injuries that expert testimony was not required"); Wong, 148 N.H. at 374 (affirming dismissal of legal malpractice claim for lack of expert testimony because evidence of negligence was not "so patent and conclusive that reasonable persons c[ould] reach only one conclusion" (quotation omitted)).
The underlying case was brought by the plaintiff against a defendant wjo was alleged to have removed timber from his property. That case was dismissed on statute of limitations grounds. (Mike Frisch)
Tuesday, August 5, 2014
Collection of papers on "Jews and the Law" and in the legal profession: now published as a book and ebook
Collecting essays presented in a conference held at Cardozo Law School a few years ago, editors Ari Mermelstein, Victoria Saker Woeste, Ethan Zadoff and Marc Galanter have published a new book on Jews and Judaism in the legal profession and law. Called Jews and the Law, it is a book of legal history and current insights about the profession, law firms, networks, assimilation, and antisemitism. Here is a story about it by Dan Ernst on Legal History Blog. It was published through my Quid Pro Books publishing project, and so it no longer sits as a collection of unpublished papers from a conference but is now -- I am proud to say -- a resource that can be read by anyone or recommended to a library to acquire. Its Amazon page for the paperback is here, and it can also be bought at many other places and in ebook sites such as Apple, Play, Kindle and Nook. [Alan Childress]
Monday, July 28, 2014
The District of Columbia Bar Legal Ethics Committee has a new opinion on an important real-world issue
When a lawyer is seeking employment with an entity or person adverse to his client, or with the adversary's lawyer, a conflict of interest may arise under Rule 1.7(b)(4) if the lawyer’s professional judgment on behalf of the client will be, or reasonably may be, adversely affected by the lawyer’s own financial, business, property, or personal interests (for purposes of this Opinion, a lawyer’s own financial, business, property, or personal interests are collectively referred to as a “personal interest conflict”). Both subjective and objective tests must be applied to determine whether a personal interest conflict exists.
There is no “bright line” test for determining the point during the employment process when a personal interest conflict arises, and that point may vary. There are a number of factors to consider in determining whether a personal interest conflict exists, including whether the individual lawyer is materially and actively involved in representing the client and, if so, whether the lawyer’s interest in the prospective employer is targeted and specific, and/or has been communicated to, and reciprocated by, the prospective employer.
Where the prospective employer is affiliated with, but separate and distinct from, the entity adverse to the job-seeking lawyer's client, there may be no personal interest conflict in the first instance, because the adversary and the prospective employer may be separate entities for conflicts purposes.
If a personal interest conflict arises, there are three possible courses of action that may be available to the individual lawyer, each of which is subject to applicable requirements of the D.C. Rules of Professional Conduct: (a) disclosing to the client the existence and nature of the personal interest conflict and the possible adverse consequences of the lawyer's representation of the client and obtaining the client's informed consent to the representation; (b) withdrawing from the representation; or, (c) discontinuing seeking employment with the client's adversary or the adversary's lawyer until all pending matters relating to that potential new employment have been completed.
The personal interest conflict of an individual lawyer in a law firm, nonprofit, or corporate legal department is not imputed to the other lawyers in the law firm, nonprofit, or corporate legal department, so long as the personal interest conflict does not present a significant risk of adversely affecting the representation of the client by such other lawyers. The imputation rule does not apply to a government agency.
A subordinate lawyer who discusses a potential personal interest conflict with his supervisory lawyer, and acts in accordance with the supervisory lawyer's reasonable determination of whether the subordinate lawyer has a personal interest conflict and follows the supervisory lawyer's recommended course of action, will not be held professionally responsible even if it is subsequently determined that the supervisory lawyer's determination of whether there was a personal interest conflict, and/or the recommended course of action, were incorrect under the Rules.
I have found this issue to arise with some frequency. Guidance always is helpful. (Mike Frisch)
Tuesday, July 1, 2014
The New York Court of Appeals has answered a question posed by the United States Court of appeals for the Second Circuit as follows
We hold that pending hourly fee matters are not partnership "property" or "unfinished business" within the meaning of New York's Partnership Law. A law firm does not own a client or an engagement, and is only entitled to be paid for services actually rendered.
The litigation involved trustee claims against Thelan and Coudert Brothers.
The notion that law firms will hire departing partners or accept client engagements without the promise of compensation ignores commonsense and marketplace realities. Followed to its logical conclusion, the trustees' approach would cause clients, lawyers and law firms to suffer, all without producing the sought-after financial rewards for the estates of bankrupt firms.
Treating a dissolved firm's pending hourly fee matters as partnership property, as the trustees urge, would have numerous perverse effects, and conflicts with basic principles that govern the attorney-client relationship under New York law and the Rules of Professional Conduct. By allowing former partners of a dissolved firm to profit from work they do not perform, all at the expense of a former partner and his new firm, the trustees' approach creates an "unjust windfall," as remarked upon by the District Court Judge in Geron (476 BR at 740)...
Ultimately, what the trustees ask us to endorse conflicts with New York's strong public policy encouraging client choice and, concomitantly, attorney mobility...
Tuesday, June 3, 2014
The civil claims of an associate attorney against her former firm may proceed in some respects, according to a decision issued today by the New York Appellate Dvision for the First Judicial Department.
In January 2008, plaintiff Ji Sun Jennifer Kim was hired as an associate attorney in the tax certiorari department of defendant law firm Goldberg, Weprin, Finkel, Goldstein, LLP. In January 2009, plaintiff learned she was expecting a child and informed the law firm of her pregnancy. In June 2009, while visibly pregnant, plaintiff was reprimanded by a partner at the law firm for allegedly reading a book during work hours. According to plaintiff, the partner stood extremely close and screamed at her, causing plaintiff to fear that she would be hit.
Plaintiff promptly emailed a complaint about the incident to defendants Arnold Mazel and Barry Zweigbaum, both partners in the law firm. In that complaint, plaintiff alleged that two other attorneys, both male, were engaging in similar behavior at the same time but were not admonished. Plaintiff's email expressed concern that she was singled out and treated unfairly due to her pregnancy. Defendant Andrew Albstein, the law firm's managing partner, wrote an email to plaintiff reiterating that reading a book during work hours was inappropriate, and denying that plaintiff was reprimanded due to her pregnancy. Plaintiff also alleges that Mazel told her that she made her situation worse by complaining.
In September 2009, plaintiff took 12 weeks' maternity leave. Upon her return to work in December 2009, plaintiff began to express breast milk at the office. At some point in February 2010, Zweigbaum, within earshot of plaintiff, is alleged to have made an inappropriate gender-based comment. The next day, plaintiff complained to Zweigbaum and another partner about the offensive remark. Plaintiff alleges that after she complained, Zweigbaum barely spoke to her.
At around the same time, plaintiff asked if she could work a reduced schedule so she could take care of her baby at home, but Mazel denied the request. According to Mazel, February was the tax certiorari department's busy season, and firm policy did not allow lawyers to work a reduced work schedule. Albstein confirmed that in the previous 10 years, the law firm had never allowed any associate attorney to work part-time. In April 2010, the law firm terminated plaintiff's employment, purportedly for budgetary reasons.
The court affirmed the dismissal of claims of gender discrimination and hostile work environment.
The retaliation claim can go forward.
Law360 had this earlier report. (Mike Frisch)
Monday, May 12, 2014
An interesting decision last week from the Georgia Supreme Court on disqualification premised on a non-attorney employee
We granted certiorari in this case to determine whether the Court of Appeals correctly held that a conflict of interest involving a nonlawyer can be remedied by implementing proper screening measures in order to avoid disqualification of the entire law firm. For the reasons set forth below, we hold that a nonlawyer’s conflict of interest can be remedied by implementing proper screening measures so as to avoid disqualification of an entire law firm. In this particular case, we find that the screening measures implemented by the nonlawyer’s new law firm were effective and appropriate to protect against the nonlawyer’s disclosure of confidential information. However, we remand this case to the trial court for a hearing to determine whether the new law firm promptly disclosed the conflict.
The case involves a wrongful death action brought by the estate of a person who was shot and killed at an apartment complex. The paralegal was the plaintiff 's primary contact and worked on the fact investigation before moving (with an intervening stop at another job) to the firm that represented the defendant apartment complex.
The conflict was not discovered when the paralegal first moved to the defendant's firm, as suit had not yet been filed and the paralegal did not know that the firm represented the defendant.
Screening was implemented after the conflict was discovered.
The court set forth a test for disqualification under the circumstances
...the new firm will be disqualified where (1) the nonlawyer has already revealed the confidential information to lawyers or other personnel in the new firm; (2) screening would be ineffective; or (3) “the nonlawyer necessarily would be required to work [or has actually worked at the new firm] on the other side of the same or a substantially related matter on which the nonlawyer [previously] worked.”
Justice Nahmias concers but has concerns about the state of screening in Georgia
It should be noted... that this is yet another case that raises questions about whether Rule 1.10, and in particular its implicit rejection of the use of screening measures to avoid imputed disqualification of an entire law firm when one of their lawyers would be disqualified, should be reconsidered and amended or at least clarified. After all, the rules already allow the use of screening to avoid conflicts imputed from some lawyers – former government lawyers, judges, and arbitrators. See Rules 1.11 (a) and 1.12 (c). And many of the factors that the Court discusses in support of our conclusion that screening measures, rather than imputed disqualification, may be appropriate for nonlawyers also apply to many other lawyers – especially associates. In addition, we should acknowledge that, as in the rest of our economy, it is becoming far less common for lawyers and their nonlawyer assistants to remain with the same firm for an entire career, whether by choice or due to layoffs or merger and dissolution of firms. This Court can continue deciding – or avoiding deciding – the impact of Rule 1.10 on a case-by-case basis, but the process for amending the Bar Rules provides opportunities for greater and broader input from those whose interests may be affected by imputed disqualification as well as consideration of facts and circumstances beyond those presented in the record of a particular case. That seems a preferable way to address these issues.