Justia Professional Malpractice & Ethics Opinion Summaries

This case involved a legal malpractice claim brought by Plaintiff MB Industries, LLC (MBI) against attorneys Steven Durio and John Weinstein. The attorneys represented MBI in an ultimately unsuccessful lawsuit against former MBI employees. Rather than appeal the unfavorable judgment, MBI chose to sue its former attorneys. The issues before the Supreme Court were: (1) whether a party's failure to appeal an underlying judgment waived any right to bring a legal malpractice claim based on that judgment; and (2) whether summary judgment was properly granted in light of MBI's failure to introduce expert testimony to establish the applicable standard of care which would have demonstrated the attorneys' actions fell below that standard. After careful review, the Court found that Louisiana law does not impose a "per se" rule requiring an appeal before a client can sue his former attorney. Furthermore, the Court found that a party alleging legal malpractice must introduce expert testimony to establish a standard of care "except in those rare cases involving malpractice so egregious that a lay jury could infer the defendant's actions fell below any reasonable standard." The Court found that under the particular facts of this case, there were no genuine issues of material fact, and that MBI failed to establish it could satisfy its evidentiary burden of proof at trial. The attorneys were entitled to judgment as a matter of law. Accordingly, the Court reversed the appellate court and reinstated the trial court's original judgment in favor of the attorneys. View " MB Industries, LLC v. CNA Insurance Co." on Justia Law

Plaintiffs appealed from a decision granting defendants' motion to dismiss plaintiffs' complaints for failure to state a claim upon which relief could be granted. Plaintiffs, participants in two retirement plans offered by defendants, brought suit alleging breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. Plaintiff alleged that defendants acted imprudently by including employer stock as an investment option in the retirement plans and that defendants failed to provide adequate and truthful information to participants regarding the status of employer stock. The court held that the facts alleged by plaintiffs were, even if proven, insufficient to establish that defendants abused their discretion by continuing to offer plan participants the opportunity to invest in McGraw-Hill stock. The court also held that plaintiffs have not alleged facts sufficient to prove that defendants made any statements, while acting in a fiduciary capacity, that they knew to be false. Accordingly, the judgment was affirmed. View "Gearren, et al. v. The McGraw-Hill Companies, Inc., et al." on Justia Law

Plaintiffs, participants in retirement plans offered by defendants and covered by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., appealed from a judgment dismissing their ERISA class action complaint. Plan documents required that a stock fund consisting primarily of Citigroup common stock be offered among the plan's investment options. Plaintiffs argued that because Citigroup stock became an imprudent investment, defendants should have limited plan participants' ability to invest in it. The court held that plan fiduciaries' decision to continue offering participants the opportunity to invest in Citigroup stock should be reviewed for an abuse of discretion and the court found that they did not abuse their discretion here. The court also held that defendants did not have an affirmative duty to disclose to plan participants nonpublic information regarding the expected performance of Citigroup stock and that the complaint did not sufficiently allege that defendants, in their fiduciary capacities, made any knowing misstatements regarding Citigroup stock. Accordingly, the court affirmed the judgment. View "Gray, et al. v. Citigroup, Inc., et al." on Justia Law

Plaintiff Terrance White appealed a superior court's order in his wrongful death action that granted summary judgment to Defendant Fletcher Allen Health Care, Inc. This case arose from the suicide of Plaintiff's fourteen-year-old daughter. Plaintiff sued Defendant, which employed a psychiatrist who was briefly involved with the decedent's case through a telepsychiatry research study. Plaintiff argued that summary judgment was improperly granted on the issue of the duty owed to decedent by the psychiatrist. Ultimately, the trial court found that the psychiatrist's contact with decedent was "so minimal as to not establish a physician-patient relationship," and consequently found that no duty existed at the time of decedent's death. Even assuming that a doctor-patient relationship was established, the court concluded that it was terminated following the video-conference and, thus, any duty was extinguished by termination of the relationship and no duty existed at the time of decedent's death. The court thus granted defendant's summary judgment motion. Plaintiff argued that the court erred in finding that the doctor owed no duty to decedent. They maintained that the doctor had a duty to exercise reasonable care to protect decedent from the danger she posed to herself, and that the doctor did not effectively terminate the doctor-patient relationship prior to decedent's death. Upon review, the Supreme Court agreed with Plaintiff and thus reversed the trial court's decision and remanded the case for additional proceedings. View "White v. Harris" on Justia Law

Respondent Deborah Spence alleged that attorney Kenneth Wingate breached a fiduciary duty to her as a former client in its handling of her late husband's life insurance policy. Mr. Spence was a member of United States House of Representatives, and he held a life insurance policy.  Mr. Spence named Mrs. Spence and his four sons from a prior marriage as the beneficiaries of the policy, with all five to receive equal shares of the proceeds. Wingate undertook representation of Mrs. Spence with regards to the assets of her husband, her inheritance rights, and her rights in his estate.  Wingate advised Mrs. Spence that she was entitled to nothing from her husband's estate and that she was barred from receiving an elective share by a prenuptial agreement. Wingate advised Mrs. Spence to enter into an agreement with the four adult sons of Mr. Spence to create a trust to provide her with a lifetime income stream. The trust was to be created and funded from one-third of the value of Mr. Spence's probate estate. Mrs. Spence thereafter came to believe that the amount she received under the agreement negotiated by Wingate was much less than what she was entitled to under the will and its codicil or if she had opted for an elective share. Mrs. Spence thereafter brought a lawsuit to set aside the agreement creating the trust. The agreement was eventually set aside. The circuit court granted partial summary judgment in favor of Wingate and found that, "[b]y statute, [Wingate] owed no duty or obligation to [Mrs. Spence] in connection with the congressional life insurance policy or the manner in which it was paid." The Court of Appeals reversed the grant of summary judgment to Wingate and remanded the matter for trial. Upon review, the Supreme Court concluded Wingate owed a fiduciary duty to Mrs. Spence: "[t]his duty included, among other obligations, the obligation not to act in a manner adverse to her interests in matters substantially related to the prior representation.  … we uphold the decision of the Court of Appeals to reverse the grant of summary judgment and remand this matter for trial.  To the extent the Court of Appeals indicated whether a duty was owed was a question of fact for the jury, the decision is modified to recognize that whether a fiduciary relationship exists between two classes of persons is a matter to be determined by a court." View "Spence v. Wingate" on Justia Law

This case stemmed from plaintiff's complaint, alleging that on September 11, 2001, a bomb was detonated inside the Pentagon, that no plane hit the Pentagon, and that various identified United States civilian and military leaders knew about the 9/11 attacks in advance, assisted in their planning, and subsequently covered up the government's involvement. Following the court's order to show cause why sanctions should not be imposed for filing a frivolous appeal, sanctions were imposed on plaintiff's counsel of record. One of plaintiff's counsel of record, William Veale, was further sanctioned for filing a frivolous and vexatious motion to disqualify the panel "and any like-minded colleagues" from considering plaintiff's petition for panel rehearing and rehearing in banc of the court's opinion in Gallop I, following a July 7, 2011 order to show cause. In addition, plaintiff's lead counsel of record, Dennis Cunningham, was admitted pro hac vice for the purpose of this appeal and was ordered to show cause why he should not be separately sanctioned for his principal role in drafting the relevant filings. View "Gallop v. Cheney" on Justia Law

This matter was before the court on a motion to dismiss, pursuant to Court of Chancery Rule 23.1, for failure to make a pre-suit demand upon the board, and Court of Chancery Rule 12(b)(6) for failure to state a claim. At issue was whether actions taken by certain director defendants fell outside of the fiduciary boundaries existing under Delaware case law - and were therefore subject to judicial oversight - or whether the acts complained of were within those broad boundaries, where a law-trained judge should refrain from acting. The court held that the facts pled in support of allegations that the director defendants violated fiduciary duties in setting compensation levels and failing to oversee the risks created thereby, if true, only supported a conclusion that the directors made poor business decisions. Thus, plaintiffs have failed to allege facts sufficient to state a claim. Consequently, the court need not reach the Rule 12(b)(6) issue. View "In re: The Goldman Sachs Group, Inc. Shareholder Litigation" on Justia Law

Dissatisfied with the settlement of a trademark case, plaintiffs filed suit on March 30, 2009 in the Superior Court of New Jersey, alleging legal malpractice and related claims. The complaint was served on one defendant on April 14, but others (law firm) were served on April 23. More than 30 days after the first defendant was served but less than 30 days after the law firm was served, the law firm filed a notice of removal. On May 22, plaintiffs filed a motion to remand the action to state court. The federal district court denied remand, finding that the removal was timely under the later-served rule. The Third Circuit affirmed. The later-served rule, under which each defendant gets his own 30-day window, represents a better reading of the language of 28 U.S.C. 1446(b) and results in more equitable treatment to later-served defendants. View "Delalla v. Hanover Ins. Co" on Justia Law

The Tennessee Board of Medical Examiners suspended Dr. Joseph Rich's medical license for one year and imposed other conditions after finding that, among other things, the physician had violated Tenn. Code Ann. 63-6-214(b)(1)(4) and (12). The chancery court affirmed the Board's judgment. The court of appeals reversed because the Board failed to articulate the applicable standard of care in its deliberations. The Supreme Court (1) held that the Board was required by Tenn. Code Ann. 63-6-214(g) to articulate the applicable standard of care in its deliberations; (2) vacated the ruling of the trial court to the extent that it affirmed the Board's decision that Rich had violated sections 63-6-214(b)(1)(4) and (12); (3) vacated the judgment of the court of appeals to the extent it reversed the Board's findings that Rich violated sections 63-6-214(b)(1)(4) and (12); and (4) rather than reversing the Board's findings of violations, remanded the matter to the Board with instructions to conduct deliberations based on the existing record and articulate the applicable standard of care as required by the statute. View "Rich v. Tenn. Bd. of Med. Exam'rs" on Justia Law

In this action brought pursuant to 8 Del. C. 225, plaintiffs sought a determination that certain written consents validly removed defendant directors and replaced them with a new slate. Defendant directors contended that they could not be removed or a new slate elected without the consent of a majority of the Series B Preferred Stock. Applying enhanced scrutiny, the court held that defendant directors breached their fiduciary duties when issuing the Series B Preferred Stock where, although they honestly believed they were acting in the best interests of the company, they breached their duty of loyalty by structuring the stock issuance to prevent an insurgent group from waging a successful proxy contest. Therefore, the class provision could not be given effect and the written consents validly elected a new board. View "Johnston, et al. v. Pedersen, et al." on Justia Law