Justia Professional Malpractice & Ethics Opinion Summaries

In a 2007 RICO action, Needle (a Pennsylvania sole practitioner) and Illinois attorneys represented the plaintiffs under a contingent fee agreement. The Illinois attorneys withdrew; Needle recruited Illinois attorney Royce as local counsel. They eventually settled the case for $4.2 million. The settlement agreement did not address attorney’s fees, costs, or expenses. Needle wanted $2.5 million, leaving the plaintiffs with $1.7 million. The attorneys also disagreed over the division of the fee between themselves. Royce filed an interpleader action. Needle “routinely and unapologetically tested the district court’s patience, disregarded court orders, and caused unnecessary delays.” The court repeatedly sanctioned Needle, ultimately following the written fee agreement. The Seventh Circuit affirmed an award of attorneys’ fees of one-third of the settlement, with Needle 60 receiving percent and Royce 40 percent of the aggregate. During the dispute, Needle was without counsel and was on the verge of a default judgment, when three partners from the O’Connor law firm stepped in to represent Needle P.C. Less than three months after appearing as counsel, O’Connor “understandably” withdrew due to irreconcilable differences and a total breakdown of the attorney-client relationship. O’Connor sought compensation under a quantum meruit theory and perfected an attorney’s lien. The district court granted O’Connor’s petition to adjudicate and enforce the lien. The Seventh Circuit affirmed. O’Connor is entitled to recover in quantum meruit and the district court properly concluded that the petitioned fees were reasonable. View "Michael Needle, P.C. v. Cozen O'Connor" on Justia Law

In the underlying 2007 civil RICO action, Needle (a Pennsylvania sole practitioner) and two Illinois attorneys represented the plaintiffs. The attorneys executed a contingent fee agreement with their clients. The Illinois attorneys later withdrew from the representation, so Needle recruited Illinois attorney Royce as local counsel. Needle and Royce agreed to split half of any fee equally and the other half proportional to the time each spent on the matter. Needle and Royce litigated the suit for several years before successfully settling the case for $4.2 million. The settlement agreement did not address attorney’s fees, costs, or expenses. All payments were made to Royce as escrow agent. Needle wanted $2.5 million, leaving the plaintiffs with $1.7 million. Needle and Royce also disagreed over the division of the attorney’s fee between themselves. Royce filed an interpleader action. The Seventh Circuit described what followed as “a long, tortured history” based on an “objectively frivolous" position; Needle “routinely and unapologetically tested the court’s patience, disregarded court orders, and caused unnecessary delays.” The court repeatedly sanctioned Needle for “obstructionist and vexatious” tactics. The district court followed the written fee agreement and awarded attorneys’ fees of one-third of the settlement, then awarded Needle 60 percent and Royce 40 percent of the aggregate. The Seventh Circuit affirmed: The district court’s rulings were correct, the sanctions were appropriate, and Needle’s other arguments are baseless. View "Royce v. Needle" on Justia Law

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

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

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

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

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

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. 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

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