Justia Professional Malpractice & Ethics Opinion Summaries

Appellants, Jillian Michaels and Empowered Media, filed suit against respondents, a law firm and its shareholder partner, for nine causes of action, including legal malpractice. The legal malpractice claim involved negotiating a branding contract with a diet supplement company called ThinCare. The trial court granted respondents' motions for summary judgment on six of the nine causes of action. Appellants subsequently moved to dismiss the remaining causes of action, which the trial court granted.The Court of Appeal held that the trial court abused its discretion by excluding portions of appellants' expert witness's declaration on damages. In reviewing the evidence, the court concluded that appellants have met their burden of establishing a material factual dispute on causation and their burden of establishing materiality on damages. Furthermore, appellants are not barred from recovery under the doctrine of unclean hands. Finally, the court concluded that there is a statute of limitations question involving materially disputed facts that cannot be resolved by a summary adjudication motion. Therefore, the court reversed the trial court court's grant of summary adjudication on the causes of action for legal malpractice, breach of fiduciary duty, breach of contract, declaratory relief to rescind and void litigation agreement, and negligent misrepresentation. The court remanded for further proceedings. View "Michaels v. Greenberg Traurig, LLP" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment to HHW and DKH in an action brought by plaintiff, alleging professional malpractice and negligence. The court concluded that the district court did not err in ruling that the "Q" deduction did not apply to the estate return in January 2013, and DKH was not professionally negligent in failing to claim the deduction. Furthermore, the district court did not err in ruling that a certified public accountant was not negligent in failing to wait to file the return until the amendment was enacted.The court also concluded that the district court properly granted summary judgment on plaintiff's legal malpractice claim; the district court did not abuse its discretion in failing to sua sponte extend discovery deadlines to allow plaintiff to submit another expert affidavit; and the district court properly granted summary judgment on the aiding and abetting claim, as well as the RICO claim. Finally, the district court did not err in ruling that questions -- regarding whether an individual, who was not a party in this case, breached a fiduciary duty and whether the district court should declare specific rental rates -- were not at issue and denying summary judgment. View "Schreier v. Drealan Kvilhaug Hoefker & Co." on Justia Law

Klayman founded Judicial Watch in 1994 and was its general counsel until 2003. Following a 2013 complaint to the D.C. Bar, a Hearing Committee concluded that Klayman violated Professional Conduct Rules 8.4(d) and 1.9. One client, a former Judicial Watch employee, had alleged a hostile work environment. Klayman had advised Judicial Watch about her complaints. After Klayman left Judicial Watch and without seeking its consent, he entered an appearance on her behalf. Another client was a Judicial Watch donor, seeking the return of her donation, represented by Klayman without consent. The third client, a former Judicial Watch client, sued Judicial Watch; Klayman entered an appearance without seeking consent.The Hearing Committee found that Klayman violated Rule 1.9 or its Florida equivalent in all three representations, Klayman’s representation of the third client violated Rule 8.4(d), by “[e]ngag[ing] in conduct that seriously interferes with the administration of justice,” and that Klayman gave false testimony before the Committee. The Committee recommended a 90-day suspension, with reinstatement contingent upon a showing of his fitness to practice law. The Board on Professional Responsibility agreed with respect to Rule 1.9 but disagreed concerning Rule 8.4(d) and false testimony. It rejected the reinstatement condition. Suspended for 90 days by the D.C. Court of Appeals, Klayman did not challenge the Rule 1.9 finding but sought to avoid reciprocal discipline. The D.C. Circuit imposed a reciprocal 90-day suspension and referred the matter to the Committee on Admissions and Grievances for recommendations on whether further discipline is warranted. View "In re: Klayman" on Justia Law

Plaintiffs, a start‐up company and its founder (Marlowe), sued the company’s former chief legal officer, Fisher, to recover losses from an arbitration award that held them liable for years of unpaid wages owed to Fisher himself. The award comprised unpaid wages and statutory penalties totaling $864,976 and an additional $366,460 because Fisher did not receive written notice of his contract nonrenewal. Plaintiffs alleged that Fisher advised them to enter into what they now say was an illegal agreement to defer Fisher’s compensation until the company was able to secure more funding.The Seventh Circuit affirmed the dismissal of the suit. Even if Marlowe was Fisher’s client regarding her own compensation agreement and a decision not to purchase directors and officers insurance, the plaintiffs failed to plead any plausible malpractice claims arising from those matters. Plaintiffs did not allege that they would have opted against using the compensation agreements had Fisher fully advised them. The company violated the Illinois Wage Act by failing to pay Fisher as agreed. The agreement did not aggravate or add to those violations; it made sense as an interim measure to forestall litigation by acknowledging the obligation and committing the company to one way to satisfy it. View "UFT Commercial Finance, LLC v. Fisher" on Justia Law

Sommer, a psychologist at a mental health clinic on a military base, sexually assaulted three patients under the guise of using “exposure therapy.” A jury convicted Sommer of several felonies, including sexual battery by fraudulent representation (Pen. Code, 243.4(c)). The trial court sentenced him to state prison.The court of appeal affirmed. Sufficient evidence supports the sexual battery by fraud conviction. Confusion is not surprising when a professional unexpectedly touches the sexual parts of the victim’s body during purported professional treatment. Confusion or doubt about the purpose of the touching does not preclude a conviction as long as the jury finds beyond a reasonable doubt that the victim allowed the touching to occur because of the defendant’s fraudulent misrepresentation of a professional purpose. The prosecutor did not misstate the law during his closing argument by saying: “Confusion is unconsciousness.” The court properly instructed the jury with CALCRIM No. 1191B, regarding consideration of charged sex offenses. The court did not err by refusing to release portions of the victims’ sealed mental health records; the undisclosed information “was not material to the defense.” View "People v. Sommer" on Justia Law

Woodson received prenatal treatment from Dr. Ramsey at NorthShore Health Centers. Ramsey informed Woodson that she would likely need to deliver her baby by C-section. Ramsey delivered P.W. vaginally at Anonymous Hospital. Woodson noticed immediately that something was wrong with P.W.’s left arm. P.W.’s arm did not improve.NorthShore is a Federally-qualified health center (FQHC) that receives federal money (42 U.S.C. 1396d(l)(2)(B)); its employees are deemed Public Health Service employees, covered against malpractice claims under the Federal Tort Claims Act (FTCA), 42 U.S.C. 233(g). NorthShore appears in the federal government's online public database of federal funding recipients whose employees may be deemed Public Health Service employees. Woodson’s attorney, Sandoval, failed to recognize NorthShore’s status as an FQHC. Sandoval reviewed the Indiana Department of Insurance (IDOI) and Indiana Patient’s Compensation Fund online databases and learned that Ramsey and Anonymous Hospital were “qualified” providers under the Indiana Medical Malpractice Act. The IDOI forwarded Woodson’s complaint to Ramsey and his insurance carrier. Those claims remain pending.On December 16, 2015, NorthShore informed Sandoval that NorthShore was a federally funded health center. Woodson filed administrative tort claims, which were denied. Nearly three years after P.W.’s birth, Woodson filed suit against the government and Anonymous Hospital. The Seventh Circuit affirmed that the claims accrued on December 7, 2013, the day P.W. was born, and were untimely under the FTCA’s two-year statute of limitations. Woodson had enough information shortly after P.W.'s birth to prompt her to inquire whether the manner of delivery caused P.W.’s injury. The FTCA savings provision does not apply because the IDOI never dismissed the claims. Neither Ramsey nor NorthShore had a duty to inform Woodson of their federal status. View "P.W. v. United States" on Justia Law

This appeal arose from petitioner's mismanagement of two related businesses, Commonwealth Capital and Commonwealth Securities. After FINRA determined that petitioner misused investor funds and tried to cover it up, FINRA barred petitioner from the securities industry, fined her, and ordered her to disgorge certain misused expenses. The SEC affirmed the industry bar and disgorgement order.The DC Circuit affirmed, concluding that petitioner's ambitious constitutional arguments are futile for a simple reason: Congress has prohibited the court from considering issues not raised before the SEC. Furthermore, petitioner has not provided any reasonable grounds that would excuse her failure to exhaust her constitutional claims before the Commission. Nor has there been an intervening change in law that might have excused her failure to press these contentions below. The court also concluded that Saad v. SEC, 980 F.3d 103 (D.C. Cir. 2020), foreclosed petitioner's argument that her lifetime bar is impermissibly punitive. In this case, the SEC's remedial justification finds adequate support in the record. The court rejected petitioner's assertion that continuing education expenses misallocated to the funds—rather than to her companies—were not "net profit," and thus not appropriate for remedial disgorgement after Liu v. SEC, 140 S. Ct. 1936 (2020). Rather, by paying for continuing education expenses out of the funds, instead of her wholly-owned business, the court concluded that petitioner enriched herself by the amount of the savings. View "Springsteen-Abbott v. Securities and Exchange Commission" on Justia Law

The Supreme Court reversed the order of the district court granting partial summary judgment on Donald Clark's legal malpractice claim, holding that Clark may not use his prior successful ineffective assistance of counsel claims to establish preclusively the breach elements of his malpractice claims.Clark, who was represented at his criminal trial by a state public defender, was convicted of second-degree sexual abuse. Clark filed a postconviction relief (PCR) action seeking a new trial based on ineffective assistance of counsel. The PCR court concluded that Clark was entitled to a new trial, and the charges against Clark were eventually dismissed. Clark then brought this malpractice action against the State. In his motion for partial summary judgment, Clark asserted that the breach-of-duty element of his malpractice claim was conclusively established by the ruling of the PCR court under the doctrine of issue preclusion. The district court agreed and granted partial summary judgment. The Supreme Court reversed, holding (1) the State as a defendant in the malpractice action was not the same party or in privity with a party in the PCR action; and (2) therefore, the elements of issue preclusion were not met. View "Clark v. State" on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment in favor of ALPS Property & Casualty Insurance Company and declaring that ALPS owed no duty to defend or indemnify Defendants in a malpractice suit, holding that the district court correctly granted summary judgment to ALPS.ALPS brought this action seeking a declaration that it owed no duty to defendant or indemnify Keller, Reynolds, Drake, Johnson & Gillespie, P.C. (the firm) or any of its members for claims Bryan Sandrock, GG&ME, LLC and DRAES, Inc. (collectively, Sandrock) asserted in a malpractice suit against the firm and three of its attorneys. In granting summary judgment for ALPS, the district court held that the firm's ALPS policy did not provide coverage for Sandrock's claim. The Supreme Court affirmed, holding that the district court correctly concluded that there was no coverage under the policy because a member of the firm knew the basis of the legal malpractice claim before the effective date of the policy. View "ALPS Property & Casualty Insurance Co. v. Keller" on Justia Law

Carrie Thompson-Widmer appealed the dismissal of her claims of defamation and tortious interference with a business relationship against Kimberly Larson, Wells County, Eddy County, and Foster County. In January 2017, Larson filed a formal complaint with the State Board of Social Work Examiners against Thompson-Widmer on the basis of Thompson-Widmer’s actions in two child protection services cases. Larson alleged Thompson-Widmer misrepresented information about a child’s home environment in one case, and altered a report about methamphetamine in an infant’s meconium in the other case. Larson also met with a state’s attorney about Thompson-Widmer’s actions. The attorney referred the matter to a special prosecutor for consideration of potential criminal charges. Because the complaint to the State Board was filed while Thompson-Widmer was a Tri-County employee, Larson placed the complaint and the supporting documents in Thompson-Widmer’s employee personnel file. After the criminal investigation into Thompson-Widmer’s action was suspended, she became employed with Catholic Charities in April 2017. Tri-County worked with Catholic Charities on adoption placement cases. Larson’s staff informed her they did not feel comfortable working with Thompson- Widmer. Larson notified Catholic Charities that Tri-County would rather work with someone other than Thompson-Widmer. Catholic Charities submitted an open records request for Thompson-Widmer’s personnel file, and Larson fulfilled the request on Tri-County’s behalf. In May 2017, after receiving the personnel file, which included Larson’s complaint against Thompson-Widmer, Thompson-Widmer was terminated because she was not forthcoming about her issues while employed by Tri-County. After review, the North Dakota Supreme Court affirmed, concluding Larson’s communications were privileged and therefore not subject to liability for defamation. View "Thompson-Widmer v. Larson, et al." on Justia Law