Justia Professional Malpractice & Ethics Opinion Summaries

Attorney-defendant Peter Porter represented plaintiff Elise Sharon in a lawsuit resulting in a 2008 default judgment entered in favor of Sharon. In October 2015, a judgment debtor wrote to Sharon, claiming the judgment was void. In November 2015, Sharon’s new attorney correctly opined that the judgment was indeed void. In September 2016, the debtor filed a motion to vacate the judgment, which was granted the following month. In May 2017, Sharon filed a legal malpractice lawsuit against Porter. During a court trial on stipulated facts, the trial court found the judgment had been valid until it was vacated. The court also found the statute of limitations applicable to Sharon’s lawsuit had been tolled until “actual injury” first occurred in September 2016, when Sharon began incurring hourly attorney fees to oppose the judgment debtor’s motion to vacate the judgment. After review, the Court of Appeal reversed, finding the default judgment was void independent of it being vacated. "Discovery of the void judgment and whatever injury resulted therefrom occurred at least by November 2015 when the judgment debtor wrote to Sharon and her new attorney claiming the judgment was void. The statute ran one year from that date. Sharon’s 2017 lawsuit was time-barred." View "Sharon v. Porter" on Justia Law

Plaintiff filed a malpractice action against Zbylut, Cox and LPS alleging they had violated their professional duties by undertaking representation of Purposeful Press without her consent, and rendering legal advice in the underlying lawsuits that was adverse to her interests.The Court of Appeal affirmed the trial court's grant of defendants' motions for summary judgment, holding that plaintiff did not dispute that she lacked standing to seek reimbursement of Purposeful Press's funds, and plaintiff failed to present any evidence that would support a finding of an implied attorney-client relationship with the firm. In this case, plaintiff has not identified any harm that defendants' representation of Purposeful Press was alleged to have caused her in her representative capacity as a shareholder. Furthermore, even if there were circumstances under which a corporate attorney might owe such a duty to individual shareholders, no such circumstances were present here. View "Sprengel v. Zbylut" on Justia Law

Antoinette Belle, as personal representative of the estate of Edith Mitchell, deceased, sued various health-care providers that treated Mitchell while she was hospitalized in April 2009. Belle eventually reached settlements with all of those health-care providers except two physicians. The trial court entered a summary judgment against Belle and in favor of the two physicians, bringing the medical-malpractice action to a close. Belle then filed a legal-malpractice case against four attorneys and three law firms that had represented her at varying times in the medical-malpractice action, alleging they had been negligent in representing her. Belle later brought an additional claim of fraudulent concealment. The attorneys and law firms denied the allegations against them, arguing that Belle's claims were untimely and that they had no factual or legal basis. The trial court agreed and entered judgments in favor of the attorneys and law firms. Belle appealed. Finding no reversible error, the Alabama Supreme Court affirmed judgment in the attorneys and law firms. View "Belle v. Goldasich, Jr., et al." on Justia Law

Rebecca Parkinson appealed a district court’s dismissal of her claim for breach of fiduciary duty against her attorney, James Bevis. Parkinson filed a complaint alleging Bevis breached his fiduciary duty when he disclosed a confidential email to the opposing attorney after reaching a settlement in Parkinson’s divorce action. Bevis moved to dismiss under Idaho Rule of Civil Procedure 12(b)(6), arguing that Parkinson’s complaint failed to state a claim for relief. The district court agreed and dismissed Parkinson’s claim after determining that it was, in essence, a legal malpractice claim, on which Parkinson could not prevail because she admitted that she suffered no damages from Bevis’ disclosure. The Idaho Supreme Court determined the district court erred in dismissing Parkinson's complaint: whether an attorney must forfeit any or all fees for a breach of fiduciary duty to a client must be determined by applying the rule as stated in section 37 of the Restatement (Third) of the Law Governing Lawyers and the factors the Supreme Court identified to the individual circumstances of each case. In light of this conclusion, the district court’s determination that Parkinson could not pursue her claim on an equitable basis as a matter of law was incorrect. The matter was remanded for further proceedings. View "Parkinson v. Bevis" on Justia Law

Gulfport OB-GYN was a professional association of physicians specializing in obstetrical and gynecological care. In 2008, it hired the law firm Dukes, Dukes, Keating & Faneca, P.A., to assist in negotiating the hiring of Dr. Donielle Daigle and to prepare an employment agreement for her. Five years later, Dr. Daigle and another physician left Gulfport OB-GYN to establish their own practice. They sued Gulfport OB-GYN for unpaid compensation and sought a declaratory judgment that the noncompetition covenant was unenforceable. The departing physicians ultimately prevailed, with the chancery court holding the noncompetition covenant not applicable to Dr. Daigle because she left voluntarily and was not “terminated by the Employer.” The chancery court decision was initially appealed, but the dispute was later settled through mediation when Gulfport OB-GYN agreed to pay Dr. Daigle $425,000. Gulfport OB-GYN then filed this legal-malpractice suit against the attorney who drafted the employment agreement and her firm. The circuit court granted summary judgment to the defendants after finding Gulfport OB-GYN had failed to produce sufficient evidence that it would have received a better deal but for the attorneys’ alleged negligence, i.e., Gulfport OB-GYN failed to prove that the alleged negligence caused it damages. The Mississippi Supreme Court agreed and affirmed. View "Gulfport OB-GYN, P.A. v. Dukes, Dukes, Keating & Faneca, P.A." on Justia Law

Cases consolidated for review came to the Court of Appeal as part of ongoing litigation between The National Grange of the Order of Patrons of Husbandry (the National Grange) and the Order’s relatively recent charter the California State Grange (the California Grange) (collectively, respondents) against the Order’s former California charter, now known as the California Guild (the Guild), which operated the California Grange Foundation (the Foundation) when the Guild’s charter was previously active. At issue was the disqualification of the law firm representing the Guild and the Foundation following its hiring of an attorney who previously worked for the law firm representing the National Grange. The trial court granted respondents’ motions to disqualify Ellis Law Group in litigation initiated in 2012 while the court’s prior order granting summary judgment in favor of the National Grange was pending on appeal in this court. In litigation initiated in 2016 by only the California Grange against the Foundation, the trial court granted the California Grange’s motion to disqualify Ellis Law Group too. The Court of Appeal found no reversible error in disqualifying the Ellis Law Group, and affirmed the trial court's orders. View "The Nat. Grange of the Order of Patrons of Husbandry v. California Guild" on Justia Law

Ahmed co‐owned an LLC that owned a condominium building. Ahmed recruited individuals to pose as buyers for the building's units and to submit fraudulent loan applications to lenders, including Fifth Third. The participants split the loan proceeds; no payments were made on the loans. Kaufman was the seller's attorney for every closing. The closings were conducted by Traditional Title at Kaufman’s law office. Traditional received closing instructions from Fifth Third to notify it immediately of any misrepresentations and to suspend the transaction if “the closing agent has knowledge that the borrower does not intend to occupy the property.” Kaufman concealed the buyers’ misrepresentations and instructed closing agents to complete closings even when buyers were purchasing multiple properties. Ahmed and Kaufman extended the scheme to other buildings. Although Kaufman testified that he was not aware of the fraud, Ahmed testified that Kaufman knew the buyers were part of the scheme. Two closing agents testified that they informed Kaufman about misrepresentations in loan applications. The Seventh Circuit affirmed a fraud judgment for Fifth Third. Kaufman participated individually in each closing as counsel and personally directed Traditional’s employees to conceal the fraud from Fifth Third, for his personal gain. The judgment against Kaufman was not derived solely from Traditional’s liability, based on his membership in the LLC, so the Illinois LLC Act does not bar his liability. Kaufman is not shielded by being the attorney for the seller in the fraudulent transactions. View "Fifth Third Mortgage Company v. Kaufman" on Justia Law

Nutmeg LLC, formerly managed by Goulding, served as an investment advisor and sole general partner of more than a dozen investment funds, each a limited partnership under Illinois or Minnesota law. Goulding’s management of the Funds ended in 2009, when the SEC brought an enforcement action against him, Nutmeg, and others under the Investment Advisors Act of 1940, alleging that Nutmeg misappropriated client assets and failed to maintain proper records. The district court found that the SEC made the showing necessary to warrant the issuance of a restraining order prohibiting Goulding from managing the Funds and granted the SEC’s unopposed motion to appoint attorney Weiss as receiver for Nutmeg. Unsatisfied with Weiss’s performance, Goulding and limited partners from certain funds managed by Nutmeg filed an individual and derivative action on behalf of the Funds, alleging breach of fiduciary duty and legal malpractice. The court dismissed the federal securities law claim, claims against Nutmeg, all legal malpractice claims against Weiss and her firm, and two breach of fiduciary duty claims. The Seventh Circuit Affirmed, holding that even when viewed in the light most favorable to the plaintiffs, no reasonable jury could find that either Weiss or her firm willfully and deliberately violated any fiduciary duties. View "Goulding v. Weiss" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment to defendant in an action brought by plaintiffs and Glow Hospitality alleging claims against defendant, an attorney, for fraud and breach of fiduciary duties. Plaintiffs also alleged a vicarious liability claims against defendant's law firm.Count I is premised on a factually-complex relationship and intertwined history and on allegations that defendant failed to disclose information, failed to investigate, made false statements to the state court, and, primarily, engaged in dual representation. The court held that the district court correctly granted summary judgment, because Glow failed to support Count I, which lies outside the jury's common knowledge, with expert testimony. Count II alleged that defendant breached his fiduciary duties to Glow by failing to conduct further investigation into Glow's ownership interests, failing to update his opinion letter to First National, making false representations in his affidavits to the state court, and negligently overseeing the operation of Glow. The court held that Minn. Stat. 544.42 applies to Count II, and Glow's failure to comply with section 544.42's affidavit requirements mandated dismissal of this claim. Finally, the court held that the fraud claims were property dismissed, summary judgment on the aiding and abetting claim was proper, and the vicarious liability claims failed. View "Sandhu v. Kanzler" on Justia Law

RMG sued Harmelech in 2006. Attorney Mac Naughton represented Harmelech in that suit for 10 weeks. The relationship ended in a fee dispute. After he withdrew, the case settled with a consent judgment against Harmelech. Mac Naughton pursued Harmelech by acquiring rights to that judgment. In 2014, Mac Naughton and his company, Casco sued Harmelech to collect the RMG judgment and to set aside a conveyance. In 2015, Judge Holderman disqualified Mac Naughton from attempting to collect the judgment personally and from representing Casco in its collection efforts. Mac Naughton defied that order. In 2018, Judge Feinerman dismissed the 2014 claims predicated on the RMG judgment as a sanction for willful defiance of the Holderman Order. In 2016, Mac Naughton sued third parties to collect for himself money owed to Harmelech. Judge Blakey dismissed that case as a sanction for violating court orders. In 2017, Mac Naughton sued Harmelech to set aside another property conveyance. Judge Durkin dismissed the case on the same grounds. The Seventh Circuit affirmed in the consolidated cases. The Holderman Order disqualified Mac Naughton. It barred him from pursuing his former clients to collect on the RMG judgment. Mac Naughton willfully defied disqualification. The judges were within their discretion in sanctioning Mac Naughton by dismissing the actions he should not have brought. Regardless of whether Mac Naughton agreed with the Holderman Order, he had to follow it until it was undone through proper channels. View "Mac Naughton v. Harmelech" on Justia Law