Justia Professional Malpractice & Ethics Opinion Summaries

Articles Posted in Idaho Supreme Court – Civil

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Counsel for appellant Martin Frantz hired attorney Merlyn Clark as an expert witness in an unrelated matter in 2009. Clark was a partner with respondent law firm Hawley Troxell Ennis & Hawley LLP (“Hawley Troxell”). In 2010, Frantz’ creditor, Idaho Independent Bank, hired Hawley Troxell to represent it in a contract action against Frantz. In 2011, while that matter was pending, Frantz filed for bankruptcy. Hawley Troxell continued to represent the Bank as a creditor in the bankruptcy, including in an adversary proceeding the Bank filed against Frantz in 2013. Frantz alleged in the adversary proceeding that Clark’s interactions with Frantz in the 2009 matter created an attorney-client relationship and that it was therefore a conflict of interest for Clark’s firm to represent the Bank against Frantz. Frantz also alleged that Hawley Troxell improperly used confidential information Clark acquired in the 2009 matter. The bankruptcy court concluded that there was no attorney-client relationship between Clark (or Hawley Troxell) and Frantz. The adversary proceeding was later dismissed as moot. Frantz subsequently sued Hawley Troxell in Idaho district court, alleging legal malpractice and breach of fiduciary duty. The district court denied pro hac vice admission to attorney Jeffrey Katz, Frantz’ chosen counsel. The district court also dismissed the complaint on the grounds of judicial estoppel, lack of standing, and abatement. Finally, it awarded Hawley Troxell attorney fees under Idaho Code sections 12-120(3) and 12-121. Frantz appealed the denial of pro hac vice admission, the dismissal of his complaint, and the award of attorney fees. Finding no reversible error after review of the trial court record, the Supreme Court affirmed. View "Frantz v. Troxell" on Justia Law

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Plaintiff-appellant Patricia McKay appealed the grant of summary judgment in favor of Thomas Walker and Cosho Humphrey, LLP, in a legal malpractice action. McKay contended that Walker negligently drafted a property settlement agreement by failing to include provisions that would have resulted in a judgment lien against payments owed to her husband which were secured by a mortgage. The district court concluded that because a mortgage was personal property and not real property, the failure to include a description of the real property subject to the mortgage and the mortgage’s instrument number would not have resulted in the creation of a security interest. Based upon this legal conclusion, the district court held that Walker had not breached a duty to McKay and the alleged breach was not the proximate cause of any damages. McKay argued the district court erred in its conclusion. Finding no reversible error, the Supreme Court affirmed. View "McKay v. Walker" on Justia Law

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Robert Mena was licensed to practice medicine and surgery in Idaho in 2003. In 2007, staff members at the hospital in Jerome where he had privileges reported behaviors that suggested to them that Dr. Mena might have been abusing drugs or alcohol. Dr. Mena was evaluated and tested negative for chemical dependency. But staff, still concerned about Dr. Mena's psychological status, opined that he was not then currently fit to practice medicine. After further evaluation, it was recommended that Dr. Mena curtail his work-weeks to 40 to 50 hours. The Idaho State Board of Medicine ("Board") also had begun an investigation regarding Dr. Mena's training and ability to perform certain medical procedures. The Board and Dr. Mena entered into a Stipulation and Order in 2009, in which he admitted that he had violated the Medical Practice Act by failing to provide health care that met the required standard and in which he agreed to specific conditions of probation and restrictions on his license to practice medicine. On September 26, 2011, the Board issued an order terminating the Stipulation and Order. That same day, the hospital in Jerome gave Dr. Mena written notification that it had granted him limited medical privileges on the condition that he obtain additional training, that he had failed to do so, and that his privileges were forfeited. A month later, the Board sent Dr. Mena a letter asking him to respond to the hospital's action. He eventually submitted a thirteen-page written response that was rambling with many obscure references, grammatical and syntax errors, and vague sentences. More evaluations were ordered. The Board issued its Final Order in early 2014, finding that Dr. Mena suffered from "some level of impairment," and it stated that "sanctions were necessary upon [Dr. Mena's] license." Dr. Mena filed a petition for judicial review to the district court, arguing: (1) the Board initiated proceedings pursuant to the Disabled Physician Act and then imposed sanctions that were not permitted by that Act; (2) the Board's order was not supported by substantial evidence; and (3) the hearing officer erred in holding that certain evidence was inadmissible. The district court upheld the Board's action, and Dr. Mena then appealed to the Idaho Supreme Court. The Supreme Court reversed and remanded, finding that Board's own evaluation of the evidence showed that there was insufficient evidence to support the Board's order. View "Mena v. Idaho Bd. of Medicine" on Justia Law

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Justin S. Reynolds, Kristine Reynolds, and their construction company, Sunrise Development, LLC (Reynolds) brought a malpractice action against their law firm, Trout Jones Gledhill Fuhrman, P.A., and its attorney-employee, David T. Krueck. Reynolds alleged professional negligence in both the drafting of a real estate agreement between Reynolds and Quasar Development, LLC, and in the subsequent handling of the litigation regarding that agreement. The district court granted summary judgment in favor of Trout Jones, holding that the two-year statute of limitations found in Idaho Code section 5-219(4) applied to bar the action and Reynolds timely appealed. Upon review of the matter, the Supreme Court affirmed. View "Reynolds v. Trout, Jones, Gledhill, Fuhrman, P.A." on Justia Law

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The United States District Court for the District of Idaho certified a question of law to the State Supreme Court: whether a legal malpractice claim that is transferred to an assignee in a commercial transaction (along with other business assets and liabilities) is assignable under law. The issue stemmed from St. Luke's Magic Valley Regional Medical Center's purchase of Magic Valley Medical Center. Thomas Luciani and his law firm Stamper, Rubens, Stocker & Smith, P.S. represented Magic Valley in defending a wrongful termination and False Claims Act action brought by former hospital employees. After the sale of the medical center closed, Magic Valley no longer existed. The operation and management of the center was taken over by St. Luke's. St. Luke's then sued its former lawyer and law firm. The District Court noted that the assignability of a legal malpractice claim in the factual context presented had not yet been squarely addressed by the Idaho Supreme Court. Upon review, the Idaho Supreme Court answered the district court's question in the affirmative: although legal malpractice claims are generally not assignable in Idaho, where the legal malpractice claim is transferred to an assignee in a commercial transaction, along with other business assets and liabilities, such a claim is assignable. View "In re: St. Lukes Magic Valley RMC v. Luciani, et al." on Justia Law

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The Idaho Supreme Court was asked in a certified question of law from the United States District Court for the District of Idaho whether a legal malpractice claim that is transferred to an assignee in a commercial transaction, along with other business assets and liabilities, is assignable. The question arose from a a wrongful termination and False Claims Act action brought by former hospital employees against their employer. Magic Valley Medical Center was the entity being sued. Twin Falls County owned Magic Valley. Twin Falls County (on behalf of itself and Magic Valley), Twin Falls Health Initiatives Trust, Ltd. (TFHIT), and St. Luke’s Health System, Ltd., St. Luke’s Regional Medical Center, Ltd., and St. Luke’s Magic Valley Regional Medical Center (St. Luke's) entered into a Sale and Lease Agreement for the Creation of a New Health System (Agreement). The sale closed, and St. Luke's carried the burden of the employee litigation, ultimately settling with the plaintiffs. After the transaction closed, Magic Valley no longer existed. Though technically not a merger, the operation and management of the center was taken over by St. Luke's. St. Luke's then sued Magic Valley's former legal counsel for legal malpractice in connection with the employee litigation. The firm moved for summary judgment, arguing that St. Luke's could not pursue a malpractice claim because the purported assignment of such a claim was invalid in Idaho as a matter of law. Upon review, the Idaho Supreme Court answered the district court's certified question in the affirmative: although legal malpractice claims are generally not assignable in Idaho, where the legal malpractice claim is transferred to an assignee in a commercial transaction, along with other business assets and liabilities, such a claim is assignable. View "RE: Order Certifying Question - St. Lukes Magic Valley RMC v. Luciani, et al." on Justia Law

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Justin S. Reynolds, Kristine Reynolds, and their construction company, Sunrise Development, LLC (Reynolds) brought a malpractice action against their law firm, Trout Jones Gledhill Fuhrman, P.A., and its attorney-employee, David T. Krueck. Reynolds alleged professional negligence in both the drafting of a real estate agreement between Reynolds and Quasar Development, LLC, and in the subsequent handling of the litigation regarding that agreement. The district court granted summary judgment in favor of Trout Jones, holding that the two-year statute of limitations found in Idaho Code section 5-219(4) applied to bar the action and Reynolds timely appealed. Upon review of the matter, the Supreme Court affirmed. View "Reynolds v. Trout, Jones, Gledhill, Fuhrman, P.A." on Justia Law

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Petitioner-Appellant Michael Maclay appealed the district court's decision affirming the Idaho Real Estate Commission's Final Order, which revoked his real estate license and assessed him a $5,000 fine. Petitioner allegedly used another person's broker's license to carry on Help-U-Sell List 4 Less Realty, prepared incomplete brokerage representation agreements without either a price provision or a conspicuous beginning and end date, advertised listed properties without a listing broker's licensed business name, used a new brokerage name prior to its approval by the Commission, provided misleading advertising to the public, accepted real estate fees not paid through a broker for the performance of acts requiring a real estate license, engaged in a continued or flagrant course of misrepresentation, failed to account for or remit any funds coming in his possession belonging to a brokerage, engaged in dishonorable dealings and recklessness or gross negligence, and acted as a real estate salesperson without a license. Petitioner challenged the sufficiency of the evidence presented against him, and that the Commission's decision exceeded its authority. Because the Commission's decision was supported by substantial evidence and the other issues were waived, the Supreme Court affirmed the Commission's decision. View "Maclay v. Idaho Real Estate Comm'n" on Justia Law

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Patricia Shelton filed suit alleging breach of contract a legal malpractice against her former attorneys Defendants-Appellants R. Bruce Owens, Jeffrey Crandall, and Owens and Crandall, PLLC (Owens). During the pendency of her action, Ms. Shelton passed away. Plaintiff-Appellee Lois Bishop sought to assert Ms. Shelton's claims as her personal representative. Owens unsuccessfully argued that the legal malpractice claim abated upon Ms. Shelton's death, and that her breach of contract claim did not state a claim. Owens appealed. Because Patricia Shelton’s legal malpractice claim sounds in tort and abated upon her death, and her breach of contract claim fails to state a claim, the Supreme Court concluded the district court erred in denying Owens’s motion for summary judgment and in granting Bishop’s motion to substitute as plaintiff. View "Owen v. Bishop" on Justia Law

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At the center of this case was a permissive appeal from the district court's interlocutory entry of a protective order, which held certain documents related to the suspension of Appellant Paul J. Montalbano’s privileges at Saint Alphonsus Regional Medical Center (SARMC) were not discoverable by Montalbano. The interlocutory order came from Dr. Montalbano’s lawsuit filed against SARMC in district court with ten causes of action including breach of fiduciary duties and defamation; this appeal dealt solely with the protective order. In 2009, Appellant filed suit and sought to discover an extensive list of documents "related to the processes, activities, and decisions that ultimately led to the suspension of his privileges." When SARMC asserted a peer review privilege, Appellant filed a motion to compel. SARMC then moved for a protective order. The court granted in part and denied in part the motion to compel. The district court concluded that the materials related to the peer review process were protected: "[t]here can be no discovery of the peer review records nor can any witness be questioned about any information provided to the peer review committees nor the interpretation nor analysis of any evidence submitted as part of this process." Appellant thereafter moved for leave to file a permissive appeal of the court’s interlocutory order. The Supreme Court granted the permissive appeal to review the applicability of I.C. 39-1392b in physician disciplinary proceedings because it posed a question of first impression. The Court found that the applicable peer review statute " cannot be reasonably construed to state that if a physician brings a lawsuit, the privilege is waived in order to permit the physician to use otherwise privileged records. … The physician cannot waive the right of the hospital or anyone else who is entitled to assert it." Accordingly, the Court affirmed the district court's ruling to deny Appellant discovery of the records. View "Montalbano v. St. Alphonsus Regional Med. Ctr. " on Justia Law