Justia Professional Malpractice & Ethics Opinion Summaries

Jill Brenden appealed an order from the Eighteenth Judicial District Court, Gallatin County, which denied her claims against the estate of her late husband, Robert Brenden. Jill sought reimbursement for expenses and objected to the distribution and valuation of certain property in the estate. Barbara Jensen, Robert's sister and the appellee, sought attorney fees. Jill and Robert had a long-term relationship, cohabitated, and married in 2010. They purchased a home together in 2006 and later built another home on a property Robert inherited. Robert was diagnosed with cancer, which went into remission but later returned. Before his death, Robert designated Barbara as the Payable on Death (POD) beneficiary of his bank account.The District Court found that Jill converted funds from Robert's account after his death, despite her claim that Robert instructed her to transfer the funds before he died. The court admitted bank records as business records, which showed the transfers occurred after Robert's death. Jill continued to access the account and transferred funds to herself without notifying the estate. Barbara intervened in the probate action, filing a third-party complaint against Jill for wrongful conversion and deceit. Jill counterclaimed, alleging unjust enrichment and seeking a constructive trust over the proceeds from the sale of their jointly owned home.The Supreme Court of the State of Montana reviewed the case. It held that the District Court did not abuse its discretion in admitting the bank records as business records. The court affirmed the District Court's finding that Jill converted the funds in Robert's account, as Barbara became the rightful owner upon Robert's death. However, the court found that Jill was entitled to her share of the proceeds from the sale of their jointly owned home, held in a resulting trust. The court denied Barbara's request for attorney fees and remanded the case for further proceedings consistent with its opinion. View "In re Estate of Brenden" on Justia Law

Minority partners in various cellular telephone partnerships hired attorney Michael A. Pullara to pursue breach of fiduciary duty claims against the majority partner, AT&T. The client agreements allowed Pullara to hire joint venture counsel, and he retained Ajamie LLP. Both firms agreed to a 50% discount on their hourly rates in exchange for a contingency fee if they prevailed. After lengthy litigation, the minority partners reached a favorable settlement with AT&T. However, a dispute arose between Pullara and Ajamie over the fee division, leading Ajamie to file for a charging lien to secure its fee.The Court of Chancery of the State of Delaware granted a charging lien to preserve Ajamie’s claim against the settlement proceeds. Ajamie then sought to enforce the lien. The court held that the fee-sharing agreement between Pullara and Ajamie was unenforceable under the Texas Disciplinary Rules of Professional Conduct because the clients had not consented to the specific terms of the fee-sharing arrangement. However, the court ruled that Ajamie was still entitled to reasonable compensation under the principle of quantum meruit.The court calculated Ajamie’s lodestar at $13,178,616.78, based on market rates adjusted annually. Considering the Mahani factors, the court found that an upward adjustment was warranted due to the complexity and duration of the litigation, the significant results obtained, and the partially contingent nature of the fee arrangement. The court awarded Ajamie a total fee of $15,814,340.14, including a 20% increase for the contingency risk. After deducting amounts already paid, Ajamie was awarded $13,014,721.87 plus pre- and post-judgment interest. The court ordered the escrow agent to release this amount to Ajamie. View "Cellular Telephone Company Litigation cases" on Justia Law

Niv Goomai and Bar Hajbi purchased a property in Cincinnati and contracted with H&E Enterprise, L.L.C., Ohad Investment Group, and Avi Ohad for renovations. The renovations were not completed, leading Goomai to sell the property. Goomai then sued the defendants for breach of contract, violation of the Deceptive Trade Practices Act, and fraudulent misrepresentation, seeking actual damages but not injunctive relief.A jury trial was held before a magistrate, where the jury found that H&E had breached its contract and awarded Goomai $30,604.09 in damages. The jury also found that H&E and Ohad had engaged in deceptive trade practices but awarded $0 in damages for this violation. The jury ruled in favor of the defendants on the fraudulent misrepresentation claim. Goomai subsequently filed a motion for attorney’s fees and costs, which the magistrate denied, reasoning that Goomai did not qualify as a prevailing party under the Deceptive Trade Practices Act since they did not obtain any relief on the merits of their claim. The trial court adopted the magistrate’s decision, and Goomai appealed.The First District Court of Appeals reversed the trial court’s decision, holding that a prevailing party under the Deceptive Trade Practices Act is one who obtains a judgment in their favor, regardless of whether they received a remedy. The court remanded the case to the trial court to determine the amount of attorney’s fees to which Goomai was entitled.The Supreme Court of Ohio reviewed the case and concluded that to be a prevailing party under the Deceptive Trade Practices Act, a plaintiff must obtain actual damages or injunctive relief. Since Goomai did not receive any monetary damages or injunctive relief, they were not considered prevailing parties. The Supreme Court of Ohio reversed the judgment of the First District Court of Appeals and reinstated the trial court’s judgment denying attorney’s fees. View "Goomai v. H&E Enterprise, L.L.C." on Justia Law

Hurricane Katrina destroyed Paul and Sylvia Minor’s home in 2005. The Minors had a homeowner’s insurance policy with United Services Automobile Association (USAA) that covered wind damage but excluded storm surge or flood damage. USAA issued payments for wind damage but not for storm surge or flood damage, leading to a dispute. The Minors claimed a total loss due to wind and demanded policy limits. In 2013, a jury awarded the Minors $1,547,293.37 in compensatory damages.The Minor Estate appealed a pretrial order granting partial summary judgment to USAA on the Minors’ bad faith claim. The Mississippi Court of Appeals reversed the trial court’s decision, finding a genuine issue of material fact regarding USAA’s denial and delay of payment. The case was remanded for further proceedings on the bad faith claim. On remand, a jury awarded the Minors $10,000,000 in punitive damages and $457,858.89 in extra-contractual damages (attorneys’ fees). USAA appealed, and the Minor Estate cross-appealed the denial of its post-trial motion for additional attorneys’ fees.The Supreme Court of Mississippi reviewed the case and found no reversible error, affirming the jury’s award of $10,457,858.89 in damages. The court also reversed and rendered attorneys’ fees on behalf of the Estate in the amount of $4,500,000, plus post-judgment interest. The court held that the trial judge did not err in submitting the issue of punitive damages to the jury and that the $10 million punitive damages award was not unconstitutionally disproportionate. The court also found no error in the jury’s award of extra-contractual damages and no errors warranting a new trial. View "United Services Automobile Association v. Estate of Minor" on Justia Law

Nolan D. Palmer appealed a circuit court order enforcing sureties' liability related to a fee dispute among attorneys Barry Wade Gilmer, Seth Little, and Chuck McRae. McRae had initially sued Barry in Hinds County Chancery Court, and Barry subsequently filed a complaint in Madison County Circuit Court against Little, McRae, and McRae's attorneys, Michele Biegel and Bettie Ruth Johnson. The Madison County Circuit Court transferred the entire suit to Hinds County Chancery Court, but the Mississippi Supreme Court reversed this transfer for the claims against Biegel and Johnson, remanding the case back to Madison County Circuit Court. On remand, the circuit court dismissed Barry's complaint against Biegel and Johnson as frivolous and ordered Barry to pay their costs.Barry appealed and filed an appeal bond with supersedeas, signed by Barry, Matthew Gilmer, and Palmer. The bond was not signed by the circuit clerk. The Mississippi Supreme Court affirmed the circuit court's orders, and Biegel and Johnson moved to enforce the sureties' liability, claiming Barry had not satisfied the judgments. The circuit court found the bond enforceable as a contract, holding Barry and Palmer liable.Palmer appealed, arguing he was denied due process, the bond was invalid, and the circuit court erred in enforcing the bond as a contract. The Mississippi Supreme Court reviewed the case de novo and found that Palmer waived his arguments by failing to appear or defend the motion in the circuit court. The court held that Palmer was provided due process as required under Rule 8(d) and affirmed the circuit court's order enforcing sureties' liability. View "Palmer v. McRae" on Justia Law

Hudgen LeBlanc and Jodi LeBlanc filed a complaint against Residence Doctor Home Inspection, LLC, and its owner-operator, Terry J. Holder, alleging negligence, wantonness, gross negligence, fraudulent/innocent misrepresentation, suppression, and breach of contract. The claims arose from a pre-purchase home inspection performed by Holder, which the LeBlancs claimed failed to report structural issues with the flooring of the home they purchased. Instead, the report only mentioned "microbial growth" on the floor joists and recommended hiring a mold-remediation specialist. After purchasing the home, the LeBlancs hired a mold-remediation specialist who discovered rotten floor joists, costing nearly $40,000 to repair.The St. Clair Circuit Court granted summary judgment in favor of the inspection company and Holder on the negligence and breach-of-contract claims and dismissed the fraud, suppression, and wantonness claims with prejudice. The court found that the LeBlancs failed to provide expert testimony to establish the applicable standard of care or Holder's breach of that standard, which was necessary to prove their claims.The Supreme Court of Alabama reviewed the case de novo. The court held that expert testimony is required to establish a home inspector's breach of the applicable standard of care, similar to other professionals such as real-estate appraisers, engineers, and architects. The LeBlancs did not present expert testimony or establish that the breach was so obvious that it did not require expert testimony. Consequently, the Supreme Court of Alabama affirmed the trial court's summary judgment in favor of the inspection company and Holder. View "LeBlanc v. Residence Doctor Home Inspection, LLC" on Justia Law

LCPFV, LLC owned a warehouse with a faulty sewer pipe. After experiencing toilet backups, LCPFV hired Rapid Plumbing to fix the issue for $47,883.40. Rapid's work was unsatisfactory, leading LCPFV to hire another plumber for $44,077 to correct the problem. LCPFV sued Rapid Plumbing, which initially appeared in court but later defaulted. LCPFV sought a default judgment of $1,081,263.80, including attorney fees and punitive damages. The trial court awarded a default judgment of $120,319.22, significantly less than LCPFV's demand, and also awarded $11,852.90 in sanctions.The Superior Court of Los Angeles County, presided over by Judge Mark V. Mooney, reviewed the case. The court scrutinized LCPFV's default judgment package and found the requested amount excessive. The court emphasized its role as a gatekeeper in default judgment cases, ensuring that only appropriate claims are granted. The court rejected LCPFV's use of requests for admissions obtained after Rapid Plumbing had ceased participating in the case, citing a lack of candor and evidentiary value.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. The court affirmed the lower court's judgment, agreeing that the trial court acted within its discretion in rejecting the inflated default judgment request. The appellate court upheld the trial court's decision to award $120,319.22, including $91,960.40 for breach of contract and $4,948.46 in attorney fees, rejecting the fraud and punitive damages claims. The court also affirmed the sanctions award and the decision to grant prejudgment interest from the date of the lawsuit filing, not from the date of payment to Rapid Plumbing. The appellate court found no abuse of discretion in the trial court's rulings and emphasized the importance of judicial vigilance in default judgment cases. View "LCPFV v. Somatdary" on Justia Law

John A. Daugherty, an attorney, filed a breach-of-contract claim against his former client, Molly Chew Baker, in the Jefferson Circuit Court. Daugherty and Molly had an agreement where Daugherty would help Molly collect alimony arrears from her ex-husband, Christopher, on a contingency-fee basis. Daugherty later agreed to represent Molly in additional matters related to her divorce, including a petition to modify alimony payments filed by Christopher. Molly eventually terminated Daugherty's services, and Daugherty sought to recover his fees through the court.The Jefferson Circuit Court dismissed Daugherty's complaint, concluding that the contingency-fee arrangement in the contract was against public policy under Rule 1.5(d)(1) of the Alabama Rules of Professional Conduct, which prohibits contingency fees in domestic relations matters involving alimony or support. The court also noted that the contract did not provide for compensation in the event of a settlement, which occurred when Molly and Christopher jointly dismissed their respective petitions.Daugherty appealed to the Supreme Court of Alabama, arguing that the contingency-fee arrangement was permissible under an exception for collecting alimony arrears after a completed divorce. However, the Supreme Court affirmed the lower court's decision, noting that Daugherty's representation extended beyond collecting arrears to include ongoing alimony matters, which did not fall under the exception. Additionally, Daugherty's claim for quantum meruit was not properly pleaded in the lower court and was inconsistent with his breach-of-contract claim. The Supreme Court concluded that the circuit court's judgment was correct and affirmed the dismissal of Daugherty's complaint. View "Daugherty v. Baker" on Justia Law

The plaintiffs, who operate restaurants under franchise agreements, filed a Chapter 11 bankruptcy petition based on advice from their legal counsel. This led to the franchisor terminating the franchise agreements. The plaintiffs then sued their lawyers and law firms for legal malpractice and breach of written contracts for legal services, alleging that the lawyers' advice constituted malpractice. The defendants moved to dismiss both claims, arguing they were barred by a four-year statute of limitation under OCGA § 9-3-25.The trial court dismissed the legal-malpractice claims but denied the motion to dismiss the breach-of-contract claims. Later, it granted summary judgment for a subset of defendants, ruling that the breach-of-contract claims were also barred by the four-year statute of limitation. The Court of Appeals affirmed the dismissal of the legal-malpractice claims and concluded that the breach-of-contract claims were duplicative and should be dismissed as well.The Supreme Court of Georgia reviewed the case to determine which statute of limitation applies to breach-of-contract-for-legal-services claims and whether the Court of Appeals erred in dismissing these claims as duplicative. The Supreme Court concluded that such claims could be governed by either a six-year statute of limitation under OCGA § 9-3-24 or a four-year statute under OCGA § 9-3-25, depending on whether the breach arose directly from a written contract. The Court also held that the Court of Appeals erred in dismissing the breach-of-contract claims as duplicative without applying the proper motion-to-dismiss standard.The Supreme Court vacated the Court of Appeals' judgment and remanded the case for further proceedings consistent with its opinion, emphasizing that plaintiffs can pursue alternative theories of relief based on the same conduct. View "TITSHAW v. GEER" on Justia Law

The plaintiffs alleged that the defendants marketed fraudulent franchise opportunities to foreign nationals seeking to invest in the United States to obtain residency visas. The complaint included claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) and state-law claims for fraud, breach of contract, and malpractice. The plaintiffs claimed that the defendants misrepresented the nature of the investment opportunities, leading the plaintiffs to believe they were purchasing franchises that would qualify them for E-2 or EB-5 visas. Instead, they received licenses that did not meet visa requirements, resulting in financial losses and visa application issues.The United States District Court for the Southern District of Texas dismissed the case for failure to state a claim. The court found that the plaintiffs did not adequately allege a cognizable enterprise under RICO and failed to meet the heightened pleading standards for fraud under Federal Rule of Civil Procedure 9(b). The district court also denied the plaintiffs leave to amend their complaint, citing undue delay and the plaintiffs' failure to provide a proposed amended complaint or additional facts that would cure the deficiencies.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's decision. The appellate court agreed that the plaintiffs failed to plead a RICO enterprise, as the complaint did not provide sufficient factual detail to support the existence of an association-in-fact enterprise. The court also upheld the dismissal of the fraud and fraudulent inducement claims, finding that the plaintiffs did not meet the particularity requirements of Rule 9(b). Additionally, the court found no abuse of discretion in the district court's denial of leave to amend the complaint and the dismissal of claims against certain defendants for failure to effect timely service of process. View "Crosswell v. Rodriguez" on Justia Law