Justia Professional Malpractice & Ethics Opinion Summaries

Plaintiffs appealed a trial court’s grant of summary judgment in favor of defendant on their legal-malpractice and Vermont Consumer Protection Act (VCPA) claims. Mongeon Bay Properties, LLC (MBP) owned property abutting Lake Champlain in Colchester, Vermont, and leased the property to Malletts Bay Homeowner’s Association, Inc. Under the lease, the Association had the obligation to keep the property in good condition. In 2011, following major erosion damage on a portion of the embankment on the lakefront, MBP’s manager notified the Association it was in default for failing to maintain the property and gave the Association forty-five days to make specified, substantial repairs. After the Association failed to make the repairs, MBP filed a complaint against the Association seeking damages and to void the lease for the Association’s violation of its terms. The Association retained defendant Heilmann, Ekman, Cooley & Gagnon, Inc. In the following months, the Association took steps to address MBP’s complaints. However, following a bench trial, the trial court concluded that the Association breached the lease and was in default but declined to grant MBP’s request for lease forfeiture. Instead, it awarded MBP damages for remediation and attorney’s fees and costs. Both parties appealed. The Vermont Supreme Court reversed the trial court’s decision, concluding that the Association breached the lease and that MBP was entitled to termination of the lease. Ultimately, the lease was terminated, and the Association’s members were evicted. Members then sued the Association, alleging that it was negligent in its administration of the provisions of the lease requiring it to keep the property in good condition. Members and the Association settled in 2018. As part of the settlement, the Association assigned members its right to sue defendant for legal malpractice. The Association and members filed a complaint against defendant in the instant case in December 2019, alleging legal malpractice and a violation of the VCPA. The crux of their legal-malpractice claim is a lost opportunity to settle. They proposed that, had defendant tried to settle, the Association and MBP would have likely agreed to terms involving repairs and payment of MBP’s attorney’s fees thus avoiding lease termination and eviction of the Association’s members. The Vermont Supreme Court concluded summary judgment was appropriate on the legal-malpractice claim but not on the VCPA claim, and thus reversed and remanded. View "Mansfield, et al. v. Heilmann, Ekman, Cooley & Gagnon, Inc." on Justia Law

Relator John Hendrix and five public-agency exemplar plaintiffs claim that J-M Manufacturing Co. (“J-M”) violated the federal and various state False Claims Acts (“FCAs”) by representing that its polyvinyl chloride (“PVC”) pipes were compliant with industry standards. In Phase One of a bifurcated trial, a jury found that J-M knowingly made false claims that were material to the public agencies’ decisions to purchase J-M pipe. After the jury was unable to reach a verdict in Phase Two, the district court granted J-M judgment as a matter of law (“JMOL”) on actual damages and awarded one statutory penalty for each project involved in plaintiffs’ claims.   The Ninth Circuit affirmed. The panel held that sufficient evidence of falsity, materiality, and scienter supported the Phase One verdict. A reasonable jury could conclude that plaintiffs received some pipe not meeting industry standards. Further, the jury reasonably found that plaintiffs would not have purchased or installed J-M pipe had they been told the truth that J-M knew it had stopped producing pipes through processes materially similar to those used at the time of compliance testing and also knew that a significant amount of the pipe later produced did not meet industry standards. Plaintiffs’ failure to prove that any individual stick of pipe that they received was non-compliant did not mean that they failed to establish scienter. The panel held that the district court properly awarded JM judgment as a matter of law on actual damages under the federal False Claims Act. Plaintiffs did not establish actual damages by showing that they would not have bought the pipe had they known the truth. View "JOHN HENDRIX, ET AL V. J-M MANUFACTURING CO., INC., ET AL" on Justia Law

Mac Naughton, a New Jersey attorney, represented Harmelech in a lawsuit filed by RMG until Harmelech failed to pay his legal fees. Mac Naughton later purchased from RMG the rights to the unpaid portion of a settlement judgment and filed multiple actions against Harmelech, seeking to collect the Judgment. He sought to set aside Harmelech’s conveyance of his Highland Park home to his son. Harmelech moved to disqualify Mac Naughton under New Jersey Rule of Professional Conduct 1.9(a): A lawyer who has represented a client “shall not thereafter represent another client in … a substantially related matter in which that client’s interests are materially adverse to the interests of the former client.” Judge Holderman barred Mac Naughton from acting as counsel in efforts to collect the RMG Judgment. Mac Naughton continued prosecuting the matter and filed similar actions before different judges. The Highland Park action was dismissed as a sanction for Mac Naughton’s defiance of the Order. The Seventh Circuit affirmed the dismissals of four other cases.Mac Naughton then sued Harmelech, seeking to set aside a purportedly fraudulent stock transfer to collect the RMG Judgment. The Seventh Circuit affirmed the suit's dismissal. This lawsuit was another attempt to circumvent the Holderman Order. Mac Naughton again argued that he did not violate Rule 1.9(a); he expects a New Jersey proceeding to vindicate him. But this dismissal was based on the Holderman Order, not Rule 1.9(a). Whether or not Mac Naughton violated his ethical duties as a New Jersey lawyer, he has a duty to comply with orders issued by Seventh Circuit courts. The appeal was frivolous; sanctions are warranted. View "Mac Naughton v. Asher Ventures, LLC" on Justia Law

The Supreme Court quashed the decision of the superior court granting Defendant's motion to compel production of a complete, unreacted copy of a settlement agreement between Plaintiffs and the former codefendants who settled Plaintiffs' claims, holding that the trial justice abused her discretion in granting Defendant's motion.In granting Defendant's motion to compel production, the trial justice concluded that the amount paid in accordance with the settlement agreement was not discoverable "pursuant to Rhode Island and federal law." When Plaintiffs failed to comply with the order the superior court granted Defendant's motion to dismiss. The Supreme Court quashed the decision below and remanded the case, holding that the trial justice abused her discretion in granting Defendant's motion to compel production of a complete, unreacted copy of the settlement agreement. View "Noonan v. Sambandam" on Justia Law

The attorney appointed to represent Defendant moved for leave to withdraw and has filed a brief in accordance with Anders v. California, 386 U.S. 738 (1967), and United States v. Flores, 632 F.3d 229 (5th Cir. 2011). Defendant did not file a response.The Fifth Circuit granted the motion to withdraw. The court concurred with counsel’s assessment that the appeal presents no nonfrivolous issue for appellate review. The court wrote that consistent with Crawley, it holds that Defendant’s restitution order does not present a nonfrivolous issue for appeal because he is liable for the same restitution amount regardless of the ultimate recipients. View "USA v. Fults" on Justia Law

In this § 1983 lawsuit, Plaintiff sought declaratory and injunctive relief to stop ongoing physician disciplinary proceedings in which the Iowa Board of Medicine (“the Board”), represented by the Attorney General of Iowa, charges Wassef with violating Iowa law by inappropriately accessing patient records during his residency at the University of Iowa Hospitals and Clinics (“UIHC”). The Board is responsible for regulating the practice of medicine in Iowa and is authorized to discipline doctors who do not meet minimum practice standards established by the Board and by the Iowa Legislature. Plaintiff alleged the ongoing proceedings violate federal law -- the Health Insurance Portability and Accountability Act (“HIPAA”). The district court dismissed the action, concluding that it must abstain pursuant to Younger v. Harris, 401 U.S. 37 (1971). The court also dismissed the due process claim because Plaintiff failed to exhaust state remedies and failed to plausibly allege a claim.   The Eighth Circuit modified the dismissal to be without prejudice, vacated the district court’s due process ruling, and granted Plaintiff’s unopposed Motion To Substitute Parties. The court concluded the district court properly abstained under Younger. However, as the state disciplinary proceedings are ongoing, the court should have declined to reach the merits of the due process claim, which Plaintiff can litigate in the state proceedings. Accordingly, the court modified the dismissal to be without prejudice, which is usually the proper disposition when a court abstains under Younger. View "Shafik Wassef v. Dennis Tibben" on Justia Law

Plaintiff, a Virginia-licensed mental health counselor, appealed from a district court judgment dismissing her First Amendment and Due Process challenges to a New York law requiring her to obtain a further license in that state to provide mental health counseling to New York residents. Plaintiff argued that the district court erred in (1) dismissing her as-applied challenges for lack of standing, (2) construing her First Amendment facial challenge as alleging overbreadth and concluding therefrom that she failed to state a plausible claim for relief, and (3) overlooking her facial Due Process claim.   The Second Circuit affirmed. The court explained that because Plaintiff need not satisfy the particular requirements for initial licensure to provide mental health counseling to New York residents, she can allege no injury from, and therefore has no standing to challenge, that part of the law. Moreover, as to Plaintiff’s First Amendment claims, the court explained that New York’s license requirement withstands intermediate scrutiny as a matter of law because there is no question that the law (i) serves an important government interest in promoting and protecting public health, specifically, public mental health; and (ii) is narrowly tailored by statutory definition and exemptions to advance that interest without unduly burdening speech. View "Brokamp v. James" on Justia Law

Law firm Halscott Megaro, P.A. (“Halscott Megaro” or “the firm”) sued former clients and their guardians (collectively “former clients”), seeking to recover unpaid legal fees and expenses. A district court dismissed the action under Federal Rule of Civil Procedure 12(b)(6). The district court took judicial notice of a North Carolina State Bar Disciplinary Hearing Commission (“Commission”) decision that found the firm’s lead partner misled the former clients and engaged in other unethical conduct. The court then held the firm was precluded from relitigating issues decided by the Commission. It held that Halscott Megaro failed to plausibly plead claims for which relief could be granted. Halscott Megaro appealed, arguing the district court improperly considered matters outside the pleadings and failed to accept its allegations and all reasonable inferences from them as true in concluding that the Commission’s decision as to its lead partner bound the law firm.   The Fourth Circuit affirmed and held that the district court committed no reversible error in granting the former clients’ motion to dismiss or in denying the law firm’s motion for recusal. The court wrote that it agreed with the district court’s conclusion that the Commission was acting in a judicial capacity when it entered its discipline order against Megaro. The court also agreed that Megaro received a full and fair opportunity to litigate the issues and due process protections. Further, the court held that the firm’s allegations of impartiality were not related to any particular facts, sources or statements. A presiding judge is not required to recuse himself simply because of unsupported or highly tenuous speculation. View "Halscott Megaro, P.A. v. Henry McCollum" on Justia Law

The Commission on Teacher Credentialing (Commission) and its Committee of Credentials (Committee) (collectively, defendants) appealed the grant of mandamus relief to petitioner Russell Earnest, setting aside the Committee’s disciplinary recommendation against him and enjoining the Commission from acting on that recommendation. Defendants argued the trial court erred in finding: (1) Earnest was excused from exhausting his administrative remedies; and (2) the Committee lacked jurisdiction to conduct a formal review pursuant to Education Code1 section 44242.5 (d). They further asserted the trial court should have denied the petition under the doctrine of judicial restraint. In the unpublished portion of the opinion, the Court of Appeal concluded all three factors outlined in Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd., 35 Cal.4th 1072 (2005) weighed in favor of excusing Earnest from exhausting his administrative remedies. In the published portion of the opinion, the Court found that although section 44242.5 (b)(3) generally provided a jurisdictional basis for the Committee to commence initial reviews, as discussed post, the provision was also incorporated in section 44242.5 (d)(3) to provide a jurisdictional basis for the Committee to commence formal reviews. It was this jurisdictional provision the Committee relied upon in commencing a formal review of Earnest’s fitness to hold a credential. The Court thus concluded the plain language of section 44242.5(b)(3) imposed the onus on the employer to determine whether to provide a notifying statement to the Committee, and thus only the employer may determine whether an enumerated action was the “result of an allegation of misconduct,” triggering the Committee’s jurisdiction. Applying that interpretation to the facts of this case, the Court concluded the Committee did not have jurisdiction to commence a formal review of Earnest’s fitness to hold a credential. The grant of mandamus relief was thus affirmed. View "Earnest v. Com. on Teacher Credentialing" on Justia Law

Attorney and his law firm, Pesner Kawamato Conway, P.C. (collectively, Conway), appealed the district court’s order rejecting the bankruptcy court’s report and recommendation to enjoin Smith Development, Inc.’s legal malpractice suit against Conway and to impose sanctions for violating the Barton doctrine and the automatic stay.   The Fourth Circuit dismissed the appeal, finding that it lacks subject-matter jurisdiction because the district court’s decision rests on the abstention principles. The court explained that Conway suggests the district court had no authority to enter an abstention order because, under Barton, the district court itself lacked jurisdiction over Smith Development’s malpractice claims. However, the court wrote that this argument fares no better than the first. Barton concerns subject-matter jurisdiction over a separate action, not jurisdiction over the proceedings in which a party seeks Barton protection in the first place. And even if the court accepted the argument’s doubtful premise, it fails on its own logic because the bankruptcy court issued a report and recommendation to the district court, thereby authorizing the district court to rule on the matter. Further, the court found that even if it recognized a narrow exception to Section 1334(d)’s clear jurisdictional bar, the district court’s order would not fall within it. View "Martin Conway v. Smith Development, Inc." on Justia Law