Justia Professional Malpractice & Ethics Opinion Summaries

David Kosmann appealed a district court judgment relating to a dispute that arose from the sale of real property. He claimed the district court erred in enforcing an oral settlement agreement reached in mediation between Kosmann, Kevin Dinius, and Dinius & Associates, PLLC (collectively “Dinius”). Kosmann also argued the trial court erred in: (1) awarding attorney fees to Dinius as a sanction against Kosmann and his attorney; (2) declining to impose sanctions against Dinius and his attorney; and (3) striking an untimely memorandum and declaration in support of his motion to reconsider. After review of the trial court record, the Idaho Supreme Court affirmed in part and reversed in part. The Supreme Court determined the district court did not err in enforcing the settlement agreement; the court also did not err in declining to impose sanctions against Dinius on ethics violations. However, the Supreme Court determined the district court abused its discretion in imposing I.R.C.P. 11 sanctions against Kossman and his counsel: the district court did not act consistently with the applicable legal standard for imposing sanctions pursuant to I.R.C.P. 11(b). The Supreme Court declined to address all other issues Kossman raised, and determined he was not entitled to attorney fees on appeal. "The record in this case is so tarnished with questionable conduct that it has presented this Court with a vexing ethical and legal dilemma. While we are gravely concerned over the potential ethical lapses which allegedly occurred during the mediation of this matter, there are no findings in the record concerning these matters. Therefore, as the trial court determined, we will leave to the Idaho State Bar, if properly called upon, the responsibility to investigate this matter further and make the necessary findings and conclusions as to the ethical issues presented." View "Kosmann v. Dinius" on Justia Law

David Calvert was disbarred for various ethical violations, including entering into an oral agreement with a client without complying with the requisite safeguards of Colorado Rule of Professional Conduct 1.8(a). After being disbarred, Calvert sued his former client, Diane Mayberry, for breach of that same oral agreement, claiming that there was a contract between them. The trial court granted Mayberry’s motion for summary judgment, and the court of appeals affirmed. On appeal to the Colorado Supreme Court, Calvert challenged: (1) whether an attorney who was found to have violated Rule 1.8(a) in a disciplinary proceeding was estopped from relitigating the same factual issues in a civil proceeding; (2) whether a contract between an attorney and a client entered into in violation of Rule 1.8(a) was enforceable; and (3) whether the trial court abused its discretion in awarding attorney’s fees against Calvert after finding his lawsuit groundless and frivolous. The Colorado Supreme Court declined the issue preclusion issue raised because Calvert conceded he could not relitigate whether he entered into an agreement with a client without meeting Rule 1.8(a)’s requirements. The Court held that when an attorney enters into a contract without complying with Rule 1.8(a), the contract was presumptively void as against public policy; however, a lawyer may rebut that presumption by showing that, under the circumstances, the contract does not contravene the public policy underlying Rule 1.8(a). Further, the Court held the trial court did not abuse its discretion in awarding attorney’s fees at the trial level because the record supported the finding that the case was groundless, frivolous, and brought in bad faith. But as to attorney’s fees at the appellate level, because the questions of whether issue preclusion applied in this proceeding and whether a contract made in violation of Rule 1.8(a) is void as against public policy were legitimately appealable issues, thereby making a grant of appellate attorney’s fees inappropriate. Therefore, the Supreme Court affirmed the court of appeals as to the merits on other grounds, affirmed the award of attorney’s fees at the trial level, and reversed the court of appeals’ order remanding for a determination of appellate attorney’s fees. View "Calvert v. Mayberry" on Justia Law

In 2002, in Texas, Dr. Phillips performed a laparoscopic hysterectomy on Bramlett, a 36-year-old mother. While hospitalized, Bramlett suffered internal bleeding and died. Her family filed a wrongful death lawsuit against the hospital and Dr. Phillips, who held a $200,000 professional liability insurance policy with MedPro. He notified MedPro of the lawsuit. In 2003, the hospital settled with the Bramletts for approximately $2.3 million. The Bramletts wrote to Dr. Phillips’s attorney, Davidson, with a $200,000 Stowers demand; under Texas law, if an insurer rejects a plaintiff's demand that is within the insured’s policy limit and that a reasonably prudent insurer would accept, the insurer will later be liable for any amount awarded over the policy limit. MedPro twice refused to settle. The family won a $14 million verdict. The Supreme Court of Texas capped Dr. Phillips’s liability. The family sued MedPro, which settled. MedPro was insured by AISLIC, which declined to cover MedPro’s settlement. The district court granted AISLIC summary judgment, concluding that coverage was excluded because MedPro should have foreseen the family’s claim. An exclusion precluded coverage for “any claim arising out of any Wrongful Act” which occurred prior to June 30, 2005, if before that date MedPro “knew or could have reasonably foreseen that such Wrongful Act could lead to a claim.” The Seventh Circuit reversed in part, finding genuine issues of material fact regarding whether MedPro’s failure to settle was a Wrongful Act and whether MedPro could have foreseen a "claim" before the malpractice trial. View "Medical Protective Co. of Fort Wayne, Indiana v. American International Specialty Lines Insurance Co." on Justia Law

The Supreme Court remanded this matter to the circuit court with directions to reinstate a default judgment granted to Bingham Greenebaum Doll, LLP and J. Richard Kiefer (collectively, Bingham) against Meredith Lawrence on its counterclaim to enforce a promissory note made by Lawrence in partial payment of attorney’s fees owed by Lawrence to Bingham, holding that the trial court erred in setting aside the default judgment and that the Court of Appeals erred in affirming that order.Specifically, the Court held that because Bingham’s counterclaim was a compulsory counterclaim to Lawrence’s action against Bingham for professional negligence and because the complaint called into question the validity of the promissory note at issue, Bingham’s counterclaim was justiciable even though it was filed three an a half months prior to the promissory note’s due date. View "Bingham Greenebaum Doll, LLP v. Lawrence" on Justia Law

In this civil case, the Supreme Court held that, for purposes of measuring fault under the doctrine of in pari delicto, only the conduct of senior management is imputed to the plaintiff organization.Plaintiff in this case was a college acting through its agents. At issue was whether courts in this case should follow the traditional principles of agency law and impute the wrongdoing of those agents to Plaintiff when determining whether it should be barred from recovery under the in pari delicto doctrine. The trial judge granted summary judgment to Defendant under the doctrine of in pari delicto after imputing to Plaintiff the wrongdoing of an employee who was not a member of senior management. The Supreme Judicial Court vacated the summary judgment order, holding that where summary judgment was granted to Defendant on the sole ground that Plaintiff’s claims were barred under the in pari delicto doctrine, the case must be remanded for consideration of Defendant’s other grounds for summary judgment. View "Merrimack College v. KPMG LLP" on Justia Law

Belsen Getty, LLC, a registered investment adviser owned by Terry Deru, obtained a claims-made financial-services-liability policy (the Policy) from XL Specialty Insurance Company covering Belsen Getty and its advisers for the period for one year. Under the policy, XL had no duty to defend. During the policy period James, Jenalyn, and Wade Morden brought claims against Belsen Getty and Deru alleging improper and misleading investment advice. XL denied coverage, asserting the Mordens’ claims and claims brought by the Securities and Exchange Commission (SEC) before the policy period concerned “Interrelated Wrongful Acts,” as defined by the Policy, and that the Policy therefore required treating the two claims as one claim made before the policy period. Belsen Getty and Deru then settled with the Mordens, assigning their rights against XL; and the Mordens sued XL in federal district court, raising the assigned claims that XL breached its covenant of good faith and fair dealing and its fiduciary duties to Belsen Getty and Deru in denying coverage under the Policy. XL counterclaimed that the Policy’s Interrelated Wrongful Acts provision precluded coverage. The Mordens moved for partial summary judgment on the counterclaim and on several of XL's affirmative defenses. XL moved for summary judgment based on the policy and for failure to prove bad faith or breach of fiduciary duty. The district court denied XL's counterclaim, but granted summary judgment on the bad-faith and fiduciary-duty claims. The Mordens appealed summary judgment against them on their bad-faith and fiduciary-duty claims and on the denial of their motion to amend their complaint to add a breach-of-contract claim. XL cross-appealed the summary judgment against it on its counterclaim that the Policy’s Interrelated Wrongful Acts provision barred all the Mordens’ claims. The Tenth Circuit reversed the denial of XL’s motion for summary judgment on its counterclaim: this reversal undermined the Mordens’ challenges to the summary judgment against them and the denial of their motion to amend. The Court therefore affirmed summary judgment against the Mordens on their claims and the denial of their motion to amend. View "Morden v. XL Specialty Insurance" on Justia Law

This appeal stemmed from plaintiff Lucia Serico’s motion for attorney’s fees and other litigation expenses pursuant to Rule 4:58 after a jury trial on medical malpractice claims against Robert Rothberg, M.D. At issue was whether Serico could collect attorney’s fees from Rothberg despite entering into a “high-low agreement” that limited the amount she could recover at trial to $1,000,000. Based on the expressed intent of the parties and the context of the agreement, the New Jersey Supreme Court found the agreement set $1,000,000 as the maximum recovery. Therefore, Serico could not seek additional litigation expenses allowed by Rule 4:58. View "Serico v. Rothberg" on Justia Law

The Supreme Court vacated the jury’s $2.75 million award for non-economic damages in this legal malpractice and breach of contract case, holding that the case did not qualify as one of the “rare” cases where non-economic damages can be recovered for breach of contract.Plaintiff sued Defendants for legal malpractice, breach of contract, breach of fiduciary duty, and negligent hiring, training, and supervision after Defendants failed to bring Plaintiff’s claim before the statute of limitations ran. The jury found in favor of Plaintiff on each of the claims, awarding her $750,000 in damages for breach of contract and $2.75 million for the emotional distress Plaintiff suffered as the result of the malpractice. The Supreme Court vacated the non-economic damages award, holding that, under either a breach of contract or breach of fiduciary duty theory, the district court erred in upholding the award for emotional distress damages. The Court also vacated the attorney fees award and held that the district court correctly denied Plaintiff’s litigation expenses. View "Gregory & Swapp, PLLC v. Kranendonk" on Justia Law

The Supreme Court vacated the judgment of the superior court in favor of Rhode Island Resource Recovery Corporation (Resource Recovery) in the amount of $5,733,648.18, inclusive of interest, on Resource Recovery’s claims of professional malpractice and breach of contract, holding that the trial justice erred in failing to grant Restivo Monacelli LLP’s (Restivo) motion for judgment as a matter of law.Although Restivo raised numerous contentions as to alleged error by the trial justice, the Supreme Judicial Court on appeal focused its inquiry only on Restivo’s contention that the trial justice erred in denying its motion for judgment as a matter of law because expert testimony with respect to proximate cause was required but was not presented by Resource Recovery. The Supreme Judicial Court agreed with Restivo, holding that expert testimony on the issue of proximate cause was required in this case, and Resource Recovery did not provide the required expert testimony as to proximate cause. View "Rhode Island Resource Recovery Corp. v. Restivo Monacelli LLP" on Justia Law

The Supreme Court held that summary judgment was improper in this case alleging fraudulent concealment and professional negligence.In her complaint, Plaintiff alleged that Defendants failed properly to prepare and file her delinquent tax returns for tax years 2006 through 2009 and intentionally deceived her about the status of the returns. The trial court allowed Defendants’ motion for partial summary judgment regarding Plaintiff’s fraudulent concealment claim, the corresponding claim for punitive damages, and Defendants’ statute of repose defense for professional negligence for tax years 2006 and 2007. The court of appeals reversed the trial court’s decision regarding the statute of repose and affirmed the trial court’s dismissal of Plaintiff’s fraudulent concealment claim and Plaintiff’s related claim for punitive damages. The Supreme Court reversed in part, holding that genuine issues of material fact existed regarding the fraudulent concealment claim and the accompanying punitive damages claim, as well as the triggering event for the running of the statute of repose. View "Head v. Gould Killian CPA Group, P.A." on Justia Law