Justia Professional Malpractice & Ethics Opinion Summaries

GMG Insurance Agency filed a legal malpractice claim against Margolis Edelstein, alleging professional negligence in Margolis's representation of GMG in a non-compete action brought by Lyons Insurance Agency in the Court of Chancery. GMG claimed that Margolis's inadequate handling of discovery and failure to develop a proper factual record led to GMG's unfavorable position in the litigation. GMG eventually settled the case for $1.2 million after a key employee, Howard Wilson, recanted his prior testimony in an affidavit that was detrimental to GMG's defense.The Superior Court of Delaware granted summary judgment in favor of Margolis Edelstein, finding that Margolis's representation did not fall below the applicable standard of care. The court also concluded that Wilson's affidavit was a superseding cause that broke the causal chain linking Margolis's alleged negligence to GMG's claimed damages. GMG appealed this decision.The Delaware Supreme Court reviewed the case and found that the Superior Court erred in its judgment. The Supreme Court held that there were material disputed facts regarding whether Margolis deviated from the requisite standard of care. The court also found that the Superior Court failed to address GMG's contention that, but for Margolis's alleged negligence, GMG would have prevailed on all claims in the Court of Chancery litigation. Additionally, the Supreme Court concluded that the Superior Court erred in determining that Wilson's affidavit was a superseding cause as a matter of law.The Delaware Supreme Court reversed the Superior Court's judgment and remanded the case for further proceedings, emphasizing that the issues of negligence and causation should be resolved by a jury. View "GMG Insurance Agency v. Edelstein" on Justia Law

The case revolves around a claim of professional negligence against a law firm, Margolis Edelstein, by its former client, GMG Insurance Agency. Margolis had represented GMG and one of its employees, Howard Wilson, in a non-compete dispute. After GMG failed to fully prevail on a motion for summary judgment and settlement talks broke down, GMG fired Margolis. On the eve of trial, Wilson, represented by separate counsel, filed an affidavit recanting his prior testimony and providing new testimony, which was unfavorable to GMG. GMG then sued Margolis for legal malpractice, asserting that Margolis's negligent representation led to GMG's exposure to the consequences of Wilson's pre-trial change in testimony.The Superior Court granted summary judgment in favor of Margolis, finding that Wilson's affidavit was a superseding cause that broke the causal chain linking Margolis's alleged negligence and GMG's claimed damages. GMG appealed this decision.The Supreme Court of the State of Delaware found that the Superior Court erred in its decision. The Supreme Court held that there were disputes of material fact as to whether Margolis deviated from the requisite standard of care. The court also found that the Superior Court erred by failing to address GMG's contention that, but for Margolis's alleged negligence, GMG would have prevailed on all claims in the previous litigation—a circumstance that would have effectively negated Margolis's superseding cause argument. The Supreme Court reversed the judgment of the Superior Court and remanded the case for further proceedings. View "GMG Insurance Agency v. Edelstein" on Justia Law

The Supreme Court of the State of Delaware considered an appeal from a decision of the Superior Court regarding the adoption of a Medicare Advantage Plan for State retirees by the State Employee Benefits Committee (SEBC). The Superior Court had found that the SEBC's decision was subject to the requirements of Delaware’s Administrative Procedures Act (APA), granted a motion to stay the implementation of the Medicare Advantage Plan, and required the State to maintain its retirees’ Medicare Supplement Plan. The Superior Court also denied the plaintiffs' application for attorneys’ fees.The Supreme Court of the State of Delaware disagreed with the lower court's ruling. It found that the SEBC's decision to adopt a Medicare Advantage Plan was not a "regulation" as defined by the APA. The court reasoned that the decision did not meet the APA's definition of a regulation because it was not a "rule or standard," nor was it a guide for the decision of future cases. Therefore, the Superior Court did not have jurisdiction to stay the implementation of the plan. The Supreme Court reversed the decision of the Superior Court.On cross-appeal, the plaintiffs argued that the Superior Court erred by refusing to grant their application for attorneys’ fees. However, the Supreme Court found this argument moot because fee shifting is available only against a losing party in favor of a prevailing party. Since the Supreme Court reversed the decision below, fee shifting was foreclosed. View "DeMatteis v. RISE Delaware, Inc." on Justia Law

A Delaware superior court affirmed decisions by the Delaware Secretary of State (the “Secretary”) and the Delaware Board of Medical Licensure and Discipline (the “Board”) to revoke Dr. Nihar Gala’s medical license and controlled substance registration (“CSR”). The court upheld the Board’s and Secretary’s decisions after finding that substantial evidence existed to support the issued discipline. On appeal, Gala argued: (1) the Board’s decision to deliberate “behind closed doors” rendered the record incomplete for judicial review; (2) the Board and the Secretary were biased; and (3) the Board’s and the Secretary’s decisions to revoke his medical license and CSR were not supported by substantial evidence. The Delaware Supreme Court found the the Board and Secretary's decisions were supported by substantial evidence and were free from legal error. Accordingly, it affirmed the superior court. View "Gala v. Bullock" 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 Delaware Board of Medical Licensure and Discipline (the “Board”) reprimanded Dr. Bruce Grossinger, for violating various regulations governing the use of controlled substances for the treatment of pain. Specifically, the Board adopted the detailed report and recommendation of a Division of Professional Regulation hearing officer, who had found that Dr. Grossinger, in his care of a heroin-addicted patient (“Michael”), had not complied with the Board’s rules and regulations. The Board found that Dr. Grossinger failed to, among other things, document Michael’s history of substance abuse, discuss with Michael the risks and benefits of treatment with controlled substances, order urine samples or require pill counts, and keep accurate and complete treatment records. After a hearing, the hearing officer recommended that the Board find Dr. Grossinger guilty of unprofessional conduct and discipline him by placing his medical license on probation for six months and requiring him to complete additional medical education and pay a fine. Board adopted the hearing officer’s findings but reduced Dr. Grossinger’s discipline from probation to a letter of reprimand. Dr. Grossinger appealed the Board’s decision to the Superior Court, which reversed on all but one of the five findings. The Superior Court’s reversal of the Board rested on several legal conclusions, including that some of the regulations that Dr. Grossinger was said to have violated were unconstitutionally vague as applied to him, that expert testimony was required to establish the standard of care under the regulations, and that Dr. Grossinger’s due process rights were violated because the Board relied on evidence - its own expertise - outside the record. The parties cross- appealed: the Board appealed the Superior Court’s reversal of all but one of the findings; and Dr. Bruce Grossinger appealed the Superior Court’s failure to reverse the final finding. The Delaware Supreme Court disagreed with the Superior Court’s reversal of the Board’s decision and, therefore, reversed. View "Delaware Bd. of Med. Licensure & Discipline v. Grossinger" on Justia Law

Licensed nurses may be disciplined if they engage in “unprofessional conduct.” The applicable Delaware statute did not define “unprofessional conduct,” so the Board of Nursing adopted a rule to flesh the term out. Two nurses who held supervisory roles at a correctional facility were disciplined by the Board under that rule after they participated in the retrieval of medication from a medical waste container for eventual administration to an inmate. The nurses appealed to the Superior Court, and the court set their discipline aside. The court read the Board’s rule to require not just proof that the nurses breached a nursing standard, but also proof that in doing so, they put the inmate or the public at risk. And in the court’s view, the State had not made that showing. Because the Board applied the correct standard and its decision was supported by substantial evidence, the Delaware Supreme Court affirmed its decision and reversed the Superior Court. View "Delaware Board of Nursing v. Francis" on Justia Law

Family Court Judge Arlene Minus Coppadge was subject to disciplinary proceedings for failing to properly report matters held under advisement. Specifically, this matter arose from two instances of delay in the disposition of cases pending before the judge and her subsequent failure to include those cases on the "90 day report" required by Administrative Directive 175. Upon review of the complaint, the Supreme Court concluded that the judge violated Rule 2.5(C) of the Delaware Judges' Code of Judicial Conduct, and was accordingly sanctioned. View "In Re: The Honorable Arlene Minus Coppadge" on Justia Law

DTC filed a complaint with the Court of Chancery against the Union and Harry Bruckner, a para-transit driver, in the nature of a declaratory judgment action (Complaint) pursuant to Title 1, Chapter 65. The Complaint sought an order vacating or modifying a labor arbitration award issued by a certain arbitrator pursuant to a collective bargaining agreement between DTC and the Union. The award reinstated Bruckner, who was terminated by DTC, with back pay less interim earnings. The Court of Chancery granted the Union's motion for summary judgment. DTC's sole argument on appeal was that the arbitrator's decision should be vacated due to the appearance of bias or partiality on the part of the arbitrator. The court held that the alleged bias or partiality which DTC attributed to the arbitrator failed to meet the "evident partiality" standard where the mere fact that an arbitrator may share a personal life experience with a party or a party's agent was legally insufficient to constitute a substantial relationship that a reasonable person would conclude was powerfully suggestive of bias. Accordingly, the judgment was affirmed. View "Delaware Transit Corp. v. Amalgamated Transit Union Local 842" on Justia Law

A real estate agent served as the seller's agent for two sales of the same house. The initial purchaser submitted a bid for the house and, the same day, hired the initial seller's agent to serve as seller's agent for the second sale. A few days later, the agent convinced the initial seller to accept the initial purchaser's bid without disclosing his conflict of interest or the purchaser's interest in flipping the house. After one day of trial concerning the initial seller's complaint against the agent alleging, inter alia, breach of fiduciary duties, the trial judge granted defendant's motion for a directed verdict. The court held that because plaintiff raised issues of material fact concerning whether defendant breached his fiduciary duties to the seller, the court remanded the case for a new trial. View "Estate of Eller v. Bartron" on Justia Law