Justia Professional Malpractice & Ethics Opinion Summaries
ISN Software Corporation v. Richards, Layton & Finger, P.A.
For tax reasons ISN Software Corporation wanted to convert from a C corporation to an S corporation. But four of its eight stockholders, representing about 25 percent of the outstanding stock, could not qualify as S Corporation stockholders. ISN sought advice from Richards, Layton & Finger, P.A. (RLF) about its options. RLF advised ISN that before a conversion ISN could use a merger to cash out some or all of the four stockholders. The cashed-out stockholders could then accept ISN’s cash-out offer or exercise appraisal rights under Delaware law. ISN did not proceed with the conversion, but decided to use a merger to cash out three of the four non-qualifying stockholders. After ISN completed the merger, RLF notified ISN that its advice might not have been correct. All four stockholders, including the remaining stockholder whom ISN wanted to exclude, were entitled to appraisal rights. ISN decided not to try and unwind the merger, instead proceeding with the merger and notified all four stockholders they were entitled to appraisal. ISN and RLF agreed that RLF would continue to represent ISN in any appraisal action. Three of the four stockholders, including the stockholder ISN wanted to exclude, eventually demanded appraisal. Years later, when things did not turn out as ISN had hoped (the appraised value of ISN stock ended up substantially higher than ISN had reserved for), ISN filed a legal malpractice claim against RLF. The Superior Court dismissed ISN’s August 1, 2018 complaint on statute of limitations grounds. The court found that the statute of limitations expired three years after RLF informed ISN of the erroneous advice, or, at the latest, three years after the stockholder ISN sought to exclude demanded appraisal. On appeal, ISN argued its legal malpractice claim did not accrue until after the appraisal action valued ISN’s stock because only then could ISN claim damages. Although it applied a different analysis, the Delaware Supreme Court agreed with the Superior Court that the statute of limitations began to run in January 2013. By the time ISN filed its malpractice claim on August 1, 2018, the statute of limitations had expired. Thus, the Superior Court’s judgment was affirmed. View "ISN Software Corporation v. Richards, Layton & Finger, P.A." on Justia Law
Irland v. Iowa Board of Medicine
The Supreme Court vacated the court of appeals' decision affirming the district court's dismissal of a physician's petition for judicial review of the Iowa Board of Medicine's decision to use a "confidential letter of warning" to impose conditions on the physician's return to the practice of medicine over his objection, without a finding of probable cause, and without judicial review, holding that the district court erred by ruling that the Board's letter was not judicially reviewable. Before the physician voluntarily ceased practicing medicine the Board had opened an investigation into the physician. The Board closed the investigation without a finding of probable cause that the physician had violated any rule or standard of practice. In its letter, the Board told the physician that if he returned to practicing medicine he must complete a comprehensive clinical competency evaluation. The physician sought judicial review, contending that the Board's letter constituted illegal agency action. The district court dismissed the action, concluding that the letter was not a disciplinary sanction subject to judicial review. The Supreme Court vacated the decision, holding that the Board's letter was subject to judicial review because the physician was aggrieved by the Board's action where he was unable to resume practicing his profession without triggering the competency evaluation. View "Irland v. Iowa Board of Medicine" on Justia Law
Shubert v. Ada County
Natalie Shubert filed a negligence claim against her former public defender, Michael Lojek, former Ada County chief public defender Alan Trimming, and Ada County (collectively, “Ada County Defendants”). In 2008, Shubert was charged with two felonies and pleaded guilty to both charges. Her sentences were suspended in each case, and she was placed on probation. After a probation violation in 2011, the Ada County district court entered an order extending Shubert’s probation beyond the time period allowed by law, and the mistake was not caught. After Shubert’s probation should have ended in both cases, she was charged and incarcerated for a subsequent probation violation in 2014. Thereafter, in 2016, Shubert was charged with a new probation violation. Shubert was assigned a new public defender, who discovered the error that unlawfully kept Shubert on probation. Shubert’s new public defender filed a motion to correct the illegal sentence, raising the error that had improperly extended her probation. The district court granted Shubert’s motion to correct the illegal sentence and released Shubert from custody. Shubert then sued her original public defender, the Ada County Public Defender’s Officer, and other unknown Ada County employees alleging false imprisonment, intentional infliction of emotional distress, negligence per se, negligence, and state and federal constitutional violations. The district court dismissed all of Shubert’s claims except for negligence. In denying the Ada County Defendants’ motion for summary judgment on Shubert’s negligence claim, the district court held that public defenders were not entitled to common law quasi-judicial immunity from civil malpractice liability, and two provisions of the Idaho Tort Claims Act (ITCA) did not exempt public defenders from civil malpractice liability. The Ada County Defendants petitioned the Idaho Supreme Court, but the Supreme Court affirmed, finding the district court did not err in its finding that the public defenders and the County were not entitled to immunity. The case was remanded for further proceedings. View "Shubert v. Ada County" on Justia Law
Sheehy v. Commissioner of Political Practices
The Supreme Court affirmed in part and reversed in part the judgment of the district court reversing the Montana Commissioner of Political Practices' summary decision of complaint without informal contested case hearing against Montana Board of Regents of Higher Education member Martha Sheehy, holding that Sheehy did not violate the Montana Code of Ethics, that the Commissioner lacks enforcement authority over regents, and that regents are public employees subject to the Ethics Code. The Commissioner concluded that Regents are public employees subject to the Commissioner's Ethics Code enforcement authority and that Sheehy violated the Ethics Code by soliciting support for a ballot issue while suing public time, facilities, and equipment. The district court overruled the Commissioner's summary decision, concluding that the Ethics Code does not apply to regents, that the Commissioner lacked enforcement authority over regents, and that Sheehy's statements did not violate the Ethics Code. The Supreme Court reversed in part, holding (1) the Ethics Code applies to the Board of Regents of the Montana University System; (2) Sheehy did not violate the Ethics Code; and (3) the Commissioner does not have authority to enforce the Ethics Code against members of a state administrative board, like the Board of Regents. View "Sheehy v. Commissioner of Political Practices" on Justia Law
Warner W. Wiggins v. Warren Averett, LLC
Plaintiff Warner Wiggins appeals a circuit court's order compelling him to arbitrate his claims against Warren Averett, LLC. Warren Averett was an accounting firm. Eastern Shore Children's Clinic, P.C. ("Eastern Shore"), a pediatric medical practice, was a client of Warren Averett. In September 2010, while Wiggins, who was a medical doctor, was a shareholder and employee of Eastern Shore, Warren Averett and Eastern Shore entered an agreement pursuant to which Warren Averett was to provide accounting services to Eastern Shore ("the contract"). The contract contained an arbitration clause. Thereafter, Wiggins and Warren Averett became involved in a billing dispute related to the preparation of Wiggins's personal income-tax returns. In 2017, Wiggins filed a single-count complaint alleging "accounting malpractice" against Warren Averett. Warren Averett filed an answer to Wiggins's complaint, asserting, among other things, that Wiggins's claims were based on the contract and were thus subject to the arbitration clause. A majority of the Alabama Supreme Court concluded the determination of whether Wiggins' claims were covered under the terms of the arbitration clause was delegated to an arbitrator to decide. Therefore, it affirmed the trial court's order. View "Warner W. Wiggins v. Warren Averett, LLC" on Justia Law
Furtado v. Oberg
The First Circuit affirmed the decision of the district court entering summary judgment against Plaintiff Jay Furtado and in favor of Defendants, attorney Amy Page Oberg and the law firm DarrowEverett LLP, and dismissing Plaintiff's claims of legal malpractice, breach of fiduciary duty, and misrepresentation, holding that summary judgment was properly granted. Plaintiff was one of three members of a limited liability company (LLC) for a gym. In 2008, Plaintiff engaged Oberg to help to establish the LLC. After the LLC stopped operations, Plaintiff brought this action. The district court entered summary judgment for Defendants. The First Circuit affirmed, holding that, even if there were any doubt that Plaintiff had waived on appeal an argument that a reasonable jury could find that a breach by Defendants proximately caused his harm, this Court would still conclude that summary judgment was proper in this case. View "Furtado v. Oberg" on Justia Law
Brunobuilt, Inc. v. Strata, Inc.
BrunoBuilt, Inc. appealed a district court’s dismissal of its claims against Strata, Inc., Chris Comstock, H. Robert Howard, and Michael Woodworth (collectively, “the Strata Defendants”). BrunoBuilt filed a professional negligence action against the Strata Defendants alleging that when the Strata Defendants rendered engineering services for the Terra Nativa Subdivision they failed to identify a pre-existing landslide and negligently failed to recommend construction of infrastructure that would stabilize and prevent further landslides within the Subdivision. A home BrunoBuilt had contracted to build and the lot on which the dwelling was located were allegedly damaged as a result. The district court dismissed BrunoBuilt’s claims after holding that the parties had entered into an enforceable settlement agreement, or alternatively, that summary judgment was warranted in favor of the Strata Defendants based on the economic loss rule. After review of the situation, the Idaho Supreme Court affirmed the district court judgment because the parties entered into an enforceable settlement agreement. View "Brunobuilt, Inc. v. Strata, Inc." on Justia Law
Robinson-Podoll v. Harmelink, Fox, & Ravnsborg Law Office
The Supreme Court affirmed in part and reversed and remanded in part the judgment of the circuit court entering summary judgment in favor of Attorney in this legal malpractice action and dismissing the action, holding that the circuit court did not abuse its discretion in allowing Attorney's amendment to her answer but erred in determining that Plaintiff's claims were untimely under S.D. Codified Laws 15-2-14.2. Plaintiff brought this action against Attorney and Law Firm arising from Attorney's representation of Plaintiff on a claim for personal injuries. The circuit court determined that the action was time barred by section 15-2-14.2 and dismissed the action. The Supreme Court reversed in part, holding that the circuit court (1) did not abuse its discretion by permitting Attorney to amend her answer to allege section 15-2-14.2 as an affirmative defense; but (2) erred in determining that this action was barred by the repose period under section 15-2-14.2. View "Robinson-Podoll v. Harmelink, Fox, & Ravnsborg Law Office" on Justia Law
Ex parte Sonya C. Edwards and Edwards Law, LLC.
Sonya C. Edwards and Edwards Law, LLC (collectively, "Edwards"), petitioned the Alabama Supreme Court for a writ of mandamus to direct a trial court to enter a summary judgment in their favor in an action filed against them by Ivan Gray. Sonya previously represented Gray in proceedings in federal court. In 2015, after mediation and a settlement, those proceedings concluded with the entry of a final judgment. Thereafter, Gray sought to set aside the settlement, and Sonya terminated her representation of Gray. In 2017, Gray sued Edwards alleging Edwards had entered into a contract with Gray in June 2014 in which Sonya agreed to represent Gray in the federal proceedings in exchange for a contingency fee of 50%. Gray alleged that he paid a total retainer fee in the amount of $14,380.85 to cover expenses. According to Gray's complaint, when his federal case concluded, Edwards disclosed that the actual expenses amounted to $4,516.77, therefore, he felt he was entitled to a refund of $9,864.08. When the refund was not forthcoming, Gray alleged Edward converted his retainer and breached the contract between the two. The Supreme Court determined the "act or omission or failure giving rise to the claim" occurred on September 16, 2015, and that was the operative date from which to measure the applicable two-year limitations period. Gray did not file his action until October 27, 2017, which was beyond the two-year limitations period. Accordingly, Edwards has demonstrated a clear legal right to have a summary-judgment entered in her favor. View "Ex parte Sonya C. Edwards and Edwards Law, LLC." on Justia Law
In re Rademacher v. Greschler
Plaintiff Carol Rademacher challenged a district court’s ruling that she impliedly waived her attorney-client privilege by filing a legal malpractice complaint close to the expiration of the two-year statute of limitations and by then contesting defendant Ira Greschler’s statute of limitations defense. Greschler served as Rademacher’s attorney on various matters for more than two decades. One of the matters in which Greschler represented Rademacher involved the settlement of potential civil claims that Rademacher had brought against a man named John Becker and his wife. Pertinent here, for approximately ten years, Rademacher and Becker were involved in an extramarital relationship. Becker’s wife ultimately confronted and assaulted Rademacher, after which Rademacher contacted the police. The Beckers and Rademacher entered into a settlement agreement, under which Rademacher agreed not to pursue any claims against the Beckers and to ask the Boulder District Attorney’s office to offer Ms. Becker a deferred sentence. In exchange for these promises, Becker executed a $300,000 promissory note payable to Rademacher. Becker stopped making payments, and Rademacher, still represented by Greschler, sued to enforce the agreement. A jury ultimately found for Rademacher, and Becker appealed. After Greschler had orally argued the case in the court of appeals but before an opinion was issued, Rademacher’s divorce attorney, Shawn Ettingoff, sent Greschler a letter “to convey [Rademacher’s] dissatisfaction with [Greschler’s] inadequate representation” in the dispute with Becker. The letter also noted that Greschler’s conduct in representing Rademacher “helped create and perpetuate a situation that may very well lead to the reversal of the judgment in [Rademacher’s] favor.” The court of appeals eventually ruled the agreement between Rademacher and Becker was void as against public policy. Rademacher thereafter sued Greschler, asserting, among other things, a claim for professional negligence (legal malpractice). Several months later, Greschler moved for summary judgment on this claim, arguing that it was barred by the applicable statute of limitations. The Colorado Supreme Court concluded that on the facts presented, Rademacher did not assert a claim or defense that either focused or depended on advice given by her counsel or that placed any privileged communications at issue. Accordingly, the Court further concluded Rademacher did not impliedly waive her attorney-client privilege in this case. View "In re Rademacher v. Greschler" on Justia Law