Justia Professional Malpractice & Ethics Opinion Summaries

The Real Estate Bar Association of Massachusettes ("REBA") claimed that certain activities undertaken by the National Real Estate Information Services ("NREIS") constituted an unauthorized practice of law. At issue was whether NREIS's activities, either in whole or in part, based on the record and as described in the parties' filings, constituted the unauthorized practice of law in violation of Mass. Gen. Laws ch. 221, section 46 et seq. Also at issue was whether NREIS's activities, in contracting with Massachusetts attorneys to attend real estate closings, violated Mass. Gen. Laws ch. 221, section 46 et seq. The court held that certain of the real estate settlement activities undertaken by NREIS did not constitute the unauthorized practice of law but the court could not determine based on the record whether the other described settlement activities did. The court also held that the closing or settlement of the types of real estate transactions described in the record required not only the presence but the substantive participation of an attorney on behalf of the mortgage lender and that certain services connected with real property conveyances constituted the practice of law.

Plaintiff sued a former employee after a number of the former employee's clients left plaintiff's wealth management and investment advisory firm for the firm that the former employee currently works at. The United States Court of Appeals for the Second Circuit certified the following question for the court: "What degree of participation in a new employer's solicitation of a former employer's client by a voluntary seller of that client's good will constitutes improper solicitation?" In answering the certified question, the court continued to apply its precedents in Von Breman v. MacMonnies and Mohawk Maintenance Co. v. Kessler and held that the "implied covenant" barred a seller of "good will" from improperly soliciting his former clients. The court also held that, while a seller may not contact his former clients directly, he may, "in response to inquiries" made on a former client's own initiative, answer factual questions. The court further held that the circumstances where a client exercising due diligence requested further information, a seller may assist his new employer in the "active development... of a plan" to respond to that client's inquires. Should that plan result in meeting with a client, a seller's "largely passive" role at such a meeting did not constitute improper solicitation in violation of the "implied covenant." As such, a seller or his new employer may then accept the trade of a former client.

Sixteen former clients (Clients) sued two lawyers (Lawyers) who had represented them in a mass-tort litigation, claiming the lawyers had breached their fiduciary duty by prematurely settling their cases in order to maximize attorney fees. Responding to a motion for summary judgment, the Clients produced a witness who testified that he had worked for the Lawyers and had settled numerous similar cases for much more than the Clients received. The witness also produced a document he prepared that the Lawyers used as a settlement template. The trial judge found the witnessâ testimony and template were inadmissible as hearsay, and that the Clients could not prove they would have won their mass-tort case at trial in order to sue their Lawyers for breach of fiduciary duty. The trial court granted summary judgment against the Clients, and they appealed. The Supreme Court found that the trial court erred by requiring the Clients prove they would have won their mass-tort case at trial. Furthermore, the Court held that the witnessâ testimony should not have been excluded at trial as hearsay. The Court found that the witnessâ testimony was offered to establish facts already in the record: â[w]hile those decisions may have been based on [the witnessâ] opinions at the time, the decision-making process and the resultant [template] wasâ a matter of fact. The Court reversed the decision and remanded the case to the lower court for further proceedings.

Disciplinary Counsel filed a complaint charging Respondent Kevin Hallquist with professional misconduct arising from his failure to reasonably communicate with two clients, his neglect of their legal matters, and his failure to cooperate in the ensuing disciplinary investigations. The Board of Commissioners on Grievances and Discipline concluded that Respondent's conduction was a violation of the rules of attorney conduct. Because Respondent has practiced law for more than 20 years without a disciplinary violation, and although serious, his misconduct has not caused irreparable harm to any clients, the Supreme Court agreed with the recommended sanction of a two-year suspension, with the last six months stayed on condition that he commit no further misconduct and pay restitution to clients harmed by his acts.

Kristan Peters, an attorney admitted to the bars of both New York and Connecticut and formerly a partner at the law firm of Dorsey & Whitney, appealed from an order of the Committee on Grievances for the United States District Court for the Southern District of New York ("Grievance Committee") suspending her from practicing law before that court for a period of seven years. The Grievance Committee found that she had engaged in misconduct which involved instructing a junior attorney to deface transcripts ("Brackett allegation") and violating a confidentiality order ("Confidentiality Order allegation"). At issue was whether the Grievance Committee's failure to hold an independent hearing, and its reliance on a prior sanctions hearing in the underlying litigation, violated her due process rights and the district court's local rules. Also at issue was whether the two charges of misconduct now at issue did not, as a matter of law, support the Grievance Committee's imposition of discipline. The court held that Peters was not provided adequate prior notice of the Brackett allegation or adequate opportunity to cross-examine witnesses. The court also held that evidence concerning the Confidentiality Order allegation was not adequately developed during that prior proceeding so as to permit the Grievance Committee to forego an independent evidentiary hearing in the present matter. Therefore, the court vacated the Grievance Committee's suspension order and remanded the matter for the further proceedings.

Appellant GMAC Mortgage Corporation, through its attorneys Appellants Morgan & Potter, Attorneys, P.S.C. filed a disciplinary complaint against Appellee Noel Botts. Botts had represented GMAC's successor-in-interest in a foreclosure action. The trial commissioner conducted an evidentiary hearing and ultimately determined that the Kentucky Bar Association failed to prove by a preponderance, that Botts committed any of the acts or omissions charged. The Board of Governors accepted the trial commissioner's determination, and charges against Botts were ultimately dismissed. Subsequently Botts filed suit against GMAC and Morgan & Pottinger in circuit court, requesting relief from pecuniary and professional harm he allegedly suffered as a result of the disciplinary complaint. In his suit, Botts alleged wrongful use of civil proceedings, defamation and slander, abuse of process, fraud and outrageous conduct. Appellants filed numerous motions to dismiss based on claims of immunity, all of which were denied. Because Appellants claimed immunity as the basis for their motions, the order is appealable. Because the claim raises an issue of statewide importance, the Supreme Court granted Morgan & Pottinger's motion to transfer. State law holds that any statement made in the institution of, or during the course of an attorney disciplinary proceeding, is privileged so long as it is material, pertinent and relevant to that proceeding. Even if it patently fails or is entered with malice, the Kentucky "judicial statements" privilege is absolute and would still apply. The Court noted that Botts' allegations of wrongful use of civil proceedings, abuse of process, fraud and outrageous conduct are not based singly on Appellants' statements contained in the Bar Association complaint, but also on the act of filing the complaint. Whether the "judicial statements" privilege encompasses the act of filing the complaint is a matter of first impression. The Court decided that any communication or statement made to the Bar Association during the course of a disciplinary hearing or investigation, including the contents of the complaint initiating such proceedings, are absolutely privileged and extend to the act of filing the complaint. The Court remanded the case back to the circuit court for additional fact finding to address the basis of Botts' claims for fraud, defamation and slander.