Justia Professional Malpractice & Ethics Opinion Summaries

A trustee filed a lawsuit against a credit union, claiming that the credit union failed to accept negotiable instruments totaling $8,500,000, refused to open a trust account, and did not provide a written explanation for its refusal. The trustee sought declaratory and injunctive relief, as well as damages, on behalf of the trust. The trustee, who is not an attorney, filed complaints with similar allegations and included documents characteristic of the sovereign citizen movement.The District Court of McIntosh County, Southeast Judicial District, presided by Judge Daniel D. Narum, reviewed the case. The court determined that the trustee was not a licensed attorney and therefore could not represent the trust or its beneficiaries in legal proceedings. Despite this, the court considered the merits of the claims and found that the credit union was not obligated to accept the instruments, which were not legal tender. The district court dismissed the case with prejudice.On appeal, the North Dakota Supreme Court concluded that the trustee, as a non-attorney, was not authorized to provide legal representation for the trust beneficiaries. The court held that all filings made by the trustee, including the notice of appeal, were void due to the unauthorized practice of law. It further determined that the lawsuit was void from inception and that dismissal should have been without prejudice, as there was no adjudication on the merits. The Supreme Court imposed sanctions against the trustee individually for pervasive inaccuracies and frivolous arguments, awarded attorney’s fees and double costs to the credit union, denied all motions filed by the trustee as void, and dismissed the appeal. View "Jacobson v. First Community Credit Union" on Justia Law

Cadence Bank hired a law firm in October 2020 to provide legal services related to an $8 million loan to a holding company, with the loan closing in November 2020. The collateral for the loan included assets of a subsidiary insurer, which operated in Louisiana. Following severe hurricane damage in August 2021, the Louisiana Insurance Commissioner (LIC) moved to place the insurer into receivership, contesting the validity and priority of Cadence’s security interest in the insurer’s assets due to a lack of required regulatory approval for the loan. By March 2022, Cadence was aware of the LIC’s position disputing the validity of its security interest.The Jefferson Circuit Court denied the law firm’s motion to dismiss or for summary judgment in Cadence's legal-malpractice lawsuit, which alleged the firm should have advised Cadence to seek regulatory approval for the loan and later added a claim of fraudulent suppression regarding the attorneys’ expertise. The trial court certified questions regarding whether Cadence’s claims were time-barred under the Alabama Legal Services Liability Act (ALSLA), and whether any tolling or ameliorative provision would save the claims.The Supreme Court of Alabama held that, under the plain language of the ALSLA, the statute of limitations for a legal-malpractice claim begins to run when the act or omission giving rise to the claim occurs—the “occurrence” rule—rather than when the client suffers actual damage. The Court found that the relevant act or omission occurred no later than the November 2020 loan closing, and Cadence’s knowledge of the facts within the two-year limitations period barred application of any six-month ameliorative period. The Court also found Cadence’s fraud-based claim insufficiently pleaded to invoke tolling under § 6-2-3. Accordingly, the Supreme Court of Alabama reversed the trial court’s judgment and directed it to enter judgment for the defendant law firm. View "Nexsen, PC v. Cadence Bank" on Justia Law

The plaintiff, acting as executor of a probate estate, brought suit against a law firm and its principal, alleging negligent misrepresentations related to their representation in a probate matter. After initially naming multiple defendants and amending her complaint several times, only the law firm and its principal remained as defendants in this appeal. During the proceedings, the plaintiff filed a Second Amended Complaint that included unsanctioned pro se coplaintiffs and was found by the court to be unnecessarily lengthy and filled with irrelevant allegations. The court struck this complaint and offered the plaintiff options: to dismiss with prejudice, to file a more detailed motion explaining the absence of legal prejudice to the defendants if dismissed without prejudice, or to file a compliant Third Amended Complaint. Instead, the plaintiff filed a notice seeking voluntary dismissal without prejudice, but failed to provide the required explanation.The United States District Court for the Southern District of Ohio determined that, since the defendants had already answered, the dismissal had to proceed under Rule 41(a)(2), which requires a court order and can be with prejudice if warranted. The court found that the plaintiff failed to address its directive and, given her history of frivolous filings and sanctions in other cases, dismissed the action with prejudice. Additionally, the court designated the plaintiff as a vexatious litigator and imposed prefiling restrictions, requiring attorney certification or prior court review for any new cases.Upon appeal, the United States Court of Appeals for the Sixth Circuit reviewed the district court’s actions for abuse of discretion. The appellate court held that the district court properly dismissed the action with prejudice, complied with due process in imposing vexatious litigator restrictions, correctly declined to recuse, and found no merit in the claim of failure to report elder abuse. The Sixth Circuit affirmed the district court’s order in all respects. View "Wasserman v. Beggs" on Justia Law

A Florida limited liability company owned commercial property in Louisville and was advised by its attorneys to lock out a tenant for unpaid rent and sell the tenant’s property to satisfy a lien. The tenant subsequently sued for conversion and other claims, resulting in a multimillion-dollar judgment against the company and its principals. During the litigation, a second, similarly named Kentucky LLC was formed, but it was never made a defendant in the original suit. While appeals were pending, the Kentucky LLC filed for Chapter 11 bankruptcy, and a settlement agreement was reached, contingent upon approval by the bankruptcy court. The bankruptcy court confirmed a plan that substantively consolidated the two LLCs for purposes of the bankruptcy, after which the property was sold to satisfy creditors.In the Jefferson Circuit Court, the Kentucky LLC brought malpractice claims against the attorneys, alleging negligent advice and mishandling of the defense. The Florida LLC and its principal later filed similar claims. The circuit court granted summary judgment, finding the Kentucky LLC was not the client and had no claim, and that the Florida LLC had surrendered its claim through bankruptcy proceedings. The Kentucky Court of Appeals agreed the Kentucky LLC could not maintain the claim, but held the Florida LLC retained the claim since assignment was prohibited; however, it found the claims time-barred because the statute of limitations began at settlement execution.The Supreme Court of Kentucky affirmed the dismissal of all claims. It held that the Kentucky LLC was not owed a client-based duty and did not own the malpractice claim. The court determined that the statute of limitations for malpractice began when the bankruptcy court’s confirmation order made the settlement binding, not at the earlier settlement execution. Because the operative complaint was filed more than a year after this accrual date, all claims were time-barred. The cross-appeals were dismissed as moot. View "MILLERS LANE CENTER, LLC V. MORGAN & POTTINGER, P.S.C." on Justia Law

A pharmacy, operated by a licensed pharmacist, improperly compounded a prescription medication for a patient after a technician mistakenly entered a formula with the wrong dosage. The patient consumed the medication, suffered severe poisoning, required intensive medical treatment, and subsequently filed suit against the pharmacy and the pharmacist. She alleged negligence, wantonness, product liability, breach of the Alabama Extended Manufacturer’s Liability Doctrine, breach of implied warranty of merchantability, and failure to warn. The pharmacy’s liability insurer, Nationwide, declined coverage, citing a professional-services exclusion in its policy. The pharmacy had previously been covered by a different insurer, Zurich, whose policy did not exclude such claims.After the patient obtained a substantial judgment against the pharmacy, a separate action was brought to determine whether the Nationwide policy covered the claim and whether the insurance agents who procured the policy for the pharmacy had been negligent or wanton in failing to secure proper coverage. The Tuscaloosa Circuit Court entered summary judgment for Nationwide, finding the professional-services exclusion applied, and for the insurance agents, concluding the pharmacy was contributorily negligent for not reading its policy.The Supreme Court of Alabama reviewed the case. It held that the professional-services exclusion in the Nationwide policy unambiguously barred coverage for all claims, including product-liability claims, arising from the compounding of medication, which is a professional service under Alabama law. The Supreme Court also held that the pharmacy was contributorily negligent as a matter of law for failing to read its insurance policy, which expressly excluded the type of coverage in question, thereby precluding any claim for negligent failure to procure insurance. The summary judgments in favor of Nationwide and the agency defendants were affirmed. View "OMS Pharmacy, Inc. v. Nationwide Property and Casualty Insurance Company" on Justia Law

Two plaintiffs brought suit against a prominent music record label and several executives, alleging sexual battery, harassment, assault, and unpaid wages. One plaintiff claimed that while performing services for the label, she was sexually battered and harassed by executives and not paid for her work. The other plaintiff alleged assault and harassment by an employee while residing in a label-owned home to support an artist. The lawsuit was initially filed under pseudonyms, but the plaintiffs did not seek court approval to proceed anonymously.After the lawsuit was filed, plaintiffs’ counsel issued a press release using the pseudonyms to publicize the allegations. The defendants then issued their own press release, which publicly disclosed the plaintiffs’ real names. Plaintiffs amended their complaint to add a claim for doxing under Civil Code section 1708.89, asserting that the disclosure of their names constituted doxing. Defendants responded with a special motion to strike this cause of action under California's anti-SLAPP statute, arguing the press release was protected activity. Plaintiffs conceded the activity was protected but argued they could show a probability of prevailing. The Superior Court of Los Angeles County denied the anti-SLAPP motion, reasoning that the disclosure was not necessary and referencing the Rules of Professional Conduct to find potential prejudice to judicial proceedings.The Court of Appeal of the State of California, Second Appellate District, Division Two reviewed the denial. The court held that the defendants' press release was protected activity under the anti-SLAPP statute and that the disclosure of plaintiffs’ names was protected by the fair report privilege, since plaintiffs had not sought court authorization to proceed anonymously. The court reversed the trial court’s order, directed it to grant the anti-SLAPP motion, and strike the doxing cause of action. Defendants were awarded costs on appeal. View "Luna v. Top Dawg Entertainment" on Justia Law

A licensed psychologist faced disciplinary action after being convicted in 2018 of insurance fraud related to a workers’ compensation claim. The Board of Psychology issued an accusation in 2019 based on the conviction and also alleged dishonesty in her 2007 license application for failing to disclose a 1984 conviction. Following a two-day evidentiary hearing in 2020, the Board found cause to discipline her solely for the insurance fraud conviction, dismissed the charge related to the 1984 conviction, and placed her on probation for five years with various conditions, holding the probation in abeyance during periods when she was not practicing in California.After moving out of state and returning, the psychologist petitioned the Board in 2023 for early termination of her probation. The Board held an evidentiary hearing in 2024, found she failed to provide clear and convincing evidence of rehabilitation—citing her lack of insight and responsibility for the insurance fraud conviction—and denied the petition. The Board noted her probation had been tolled due to her absence and non-practice. She then sought judicial review of both the 2021 probation decision and the 2024 denial of early termination in the Superior Court of Sacramento County.The Superior Court denied her petition, finding the challenge to the 2021 decision untimely and concluding the 2024 denial was supported by substantial evidence. On appeal, the California Court of Appeal, Third Appellate District, affirmed the trial court’s judgment. The Court held that the trial court properly applied the substantial evidence test to review the Board’s denial of early termination, as this was analogous to review of an agency’s decision on reinstatement rather than discipline. The Court found the Board did not abuse its discretion and rejected arguments regarding procedural unfairness and relevance of the 1984 conviction. The judgment was affirmed. View "Bombardini v. Board of Psychology" on Justia Law

The parties in this case are former spouses who have been engaged in litigation over their divorce for several years. After the Sarpy County District Court entered a divorce decree in 2023, including a parenting plan, the party awarded sole physical custody sought enforcement of several provisions, alleging that the other party had failed to pay a court-ordered equalization payment, attorney fees, and his share of medical expenses for their children. She also alleged violations of the parenting plan, such as improper transportation arrangements, preventing communication with children, failure to administer medication, unauthorized travel, and exceeding allotted parenting time. The other party claimed inability to pay, disputed some allegations, and asserted misunderstandings regarding the parenting plan.The Sarpy County District Court held an evidentiary hearing, found the party in violation of its orders, and determined his testimony was not credible, particularly regarding his financial situation and explanations for his conduct. As a result, the court found him in willful contempt, ordered a 90-day incarceration which could be avoided by compliance ("purge" conditions), temporarily reduced his summer parenting time, and awarded attorney fees to the opposing party. The party appealed, but his brief contained numerous fictitious case citations and misstatements of law, leading the Nebraska Supreme Court to strike the brief and review only for plain error.The Nebraska Supreme Court found no plain error in the district court’s findings or sanctions. It clarified that self-represented litigants must adhere to the same standards as attorneys and that submission of briefs with fabricated citations is sanctionable. The Supreme Court affirmed the district court’s contempt order, the imposition of attorney fees, denial of in forma pauperis status, and the other sanctions. The district court’s order was affirmed. View "Shannon v. Shannon" on Justia Law

A testamentary trust was created by Ruth Wilson for her daughter, Elizabeth Koeberer, before Wilson’s death in 2013. The trust, named with a misspelling of Koeberer’s surname, was initially managed by Koeberer’s brother, Edson Wilson, who later appointed Robert Weir as successor trustee. JPMorgan Chase Bank held the trust’s financial assets. Nearly a decade after Wilson’s death, Koeberer brought a federal lawsuit against Weir, Chase Bank, her siblings, and her former probate attorney, alleging negligence, violations of federal statutes, and abuse-of-process claims in relation to the trust’s administration.The United States District Court for the Southern District of Ohio dismissed all federal claims against the defendants. It found that Koeberer’s claims under the Bank Secrecy Act, the Electronic Fund Transfer Act (EFTA), and the NACHA operating rules were either untimely, lacked a private right of action, or were unsupported by the agreement between Koeberer and Chase Bank. The court also concluded that the economic-loss rule barred Koeberer’s negligence claim against Chase Bank and found no viable abuse-of-process claim against her siblings. The district court declined to exercise supplemental jurisdiction over the remaining state-law claims against Weir and Ryan Gordon, dismissing them as well.The United States Court of Appeals for the Sixth Circuit reviewed the district court’s decision de novo and affirmed. The appellate court held that there was no private right of action under the Bank Secrecy Act for the SAR filing requirement, Koeberer’s EFTA claim was barred by the one-year statute of limitations, and the NACHA rules were not incorporated into her deposit account agreement. The court also upheld dismissal of the negligence and abuse-of-process claims, and found no abuse of discretion in the district court’s refusal to exercise supplemental jurisdiction over remaining state-law claims. View "Koeberer v. Weir" on Justia Law

The defendant was charged in multiple cases in McLean County, Illinois, primarily involving possession of child pornography and violations of the Sex Offender Registration Act. He pleaded guilty to several charges and was sentenced to probation, jail time, and ordered to pay significant assessments, fines, and fees. Throughout several subsequent probation violation proceedings and new charges, the defendant remained represented by an assistant public defender. Despite this representation, he was assessed various court costs and fees without a waiver being requested or granted under the provisions applicable to indigent defendants represented by public defenders.After sentencing, the defendant appealed. The Illinois Appellate Court, Fourth District, consolidated his appeals and considered, among other issues, his claim that his counsel was ineffective for failing to seek an assessment waiver under Illinois Supreme Court Rule 404(e). The defendant argued that, as he was represented by a public defender, he was entitled to an automatic waiver of certain assessments, and his counsel’s failure to file the required certificate constituted ineffective assistance. The State responded that claims regarding assessment errors must first be raised in the circuit court via a motion under Rule 472, which governs corrections of certain sentencing errors. The appellate court agreed with the State and remanded the case to the circuit court for the defendant to pursue his claim through a Rule 472 motion.The Supreme Court of Illinois reviewed the case and affirmed the appellate court’s judgment. The Court held that when a defendant alleges being improperly assessed costs despite being entitled to a waiver under Rule 404(e), the claim must be first raised in the trial court with a motion under Rule 472. Such claims cannot be raised for the first time on appeal by asserting ineffective assistance of counsel. The Court clarified that Rule 472’s broad remedial purpose encompasses such errors and allows correction at any time following judgment. The case was remanded for further proceedings consistent with this holding. View "People v. Nibbelin" on Justia Law