Justia Professional Malpractice & Ethics Opinion Summaries

Appellant Sara Ladd, a New Jersey resident, owned two vacation properties on Arrowhead Lake in the Pocono Mountains. Ladd started renting one of these properties in 2009 and the other in 2013 to supplement her income after being laid off from her job as a digital marketer. Eventually, some of her Arrowhead Lake neighbors learned of her success and asked her to manage rental of their own properties. Ladd considered “short-term” vacation rentals to be rentals for fewer than thirty days, and limited her services to such transactions only. Ladd acted as an “independent contractor” for her “clients” and entered into written agreements with them related to her services. In January 2017, the Commonwealth’s Bureau of Occupational and Professional Affairs (the Bureau), charged with overseeing the Commission’s enforcement of Real Estate Licensing and Registration Act (RELRA), called Ladd to inform her she had been reported for the “unlicensed practice of real estate.” Ladd reviewed RELRA and concluded her short-term vacation property management services were covered by the statute, and she would have to obtain a real estate broker license to continue operating her business. As Ladd was sixty-one years old and unwilling to meet RELRA’s licensing requirements, she shuttered PMVP to avoid the civil and criminal sanctions described in the statute. The Pennsylvania Supreme Court considered the Commonwealth Court's holding that the RELA's broker licensing requirements satisfied the heightened rational basis test articulated in Gambone v. Commonwealth, 101 A.2d 634 (Pa. 1954), and thus do not violate Article I, Section 1 of the Pennsylvania Constitution when applied to a self-described “short-term vacation property manager.” The Supreme Court concluded the Commonwealth Court erred in so holding, and therefore reversed and remanded for further proceedings. View "Ladd et al v. Real Estate Commission, et al." on Justia Law

The district court held defendant in contempt after finding him in violation of a consent order limiting his participation in the mortgage industry. The district court ordered the disgorgement of over half-a-million dollars of defendant's contemptuous earnings.The Fourth Circuit affirmed the district court's contempt decision, holding that the district court cited several proper reasons for holding defendant in contempt. However, the district court based its disgorgement sanction on an erroneous legal interpretation of the terms of the underlying consent order. Accordingly, the court vacated the disgorgement order and remanded for further proceedings. View "Consumer Financial Protection Bureau v. Klopp" on Justia Law

Jimmy Leftwich, Jr., appealed a circuit court's denial of his motion for a new trial in his negligence action against Steven Brewster. Leftwich alleged that Brewster breached a duty to competently inspect a house that Leftwich purchased. The jury returned a verdict in favor of Brewster. On appeal, Leftwich contended the trial court erred in failing to disqualify two jurors for cause and that the trial court erroneously excluded vital evidence that provided estimated costs to repair the home. After review, the Alabama Supreme Court found no reversible error and affirmed the judgment of the trial court. View "Leftwich v. Brewster" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals concluding that Tex. R. Civ. P. 91a permits dismissal based on an affirmative defense and that the alleged destruction of evidence is an action "taken in connection with representing a client in litigation," thus entitling the defendant attorneys to attorney immunity.Plaintiff hired Defendants to represent her in a lawsuit. Plaintiff later sued Defendants for, inter alia, fraud, trespass to chattel, and conversion, alleging that Defendants intentionally destroyed key evidence in the case. Defendants moved to dismiss the case under Rule 91a, claiming that it was entitled to attorney immunity on all of Plaintiff's claims. The trial court granted the motion and dismissed the case. Plaintiff appealed, arguing that affirmative defenses such as attorney immunity cannot be the basis of a Rule 91a dismissal and that Defendants were not entitled to attorney immunity. The court of appeals affirmed. The Supreme Court affirmed, holding (1) Rule 91a permits motions to dismiss based on affirmative defenses "if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought"; and (2) because Defendants' allegedly wrongful conduct involved the provision of legal services that conduct was protected by attorney immunity. View "Bethel v. Quilling, Selander, Lownds, Winslett & Moser, P.C." on Justia Law

BrunoBuilt, Inc. appealed a district court’s dismissal of its claims against Strata, Inc., Chris Comstock, H. Robert Howard, and Michael Woodworth (collectively, “the Strata Defendants”). BrunoBuilt filed a professional negligence action against the Strata Defendants alleging that when the Strata Defendants rendered engineering services for the Terra Nativa Subdivision they failed to identify a pre-existing landslide and negligently failed to recommend construction of infrastructure that would stabilize and prevent further landslides within the Subdivision. A home BrunoBuilt had contracted to build and the lot on which the dwelling was located were allegedly damaged as a result. The district court dismissed BrunoBuilt’s claims after holding that the parties had entered into an enforceable settlement agreement, or alternatively, that summary judgment was warranted in favor of the Strata Defendants based on the economic loss rule. After review of the situation, the Idaho Supreme Court affirmed the district court judgment because the parties entered into an enforceable settlement agreement. View "Brunobuilt, Inc. v. Strata, Inc." 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

The Supreme Judicial Court vacated the judgment of the superior court entering summary judgment in favor of Defendants on Plaintiff's complaint alleging attorney malpractice, holding that the court erred in concluding that Plaintiff failed to present evidence of causation to proceed with its legal malpractice claim.Plaintiff submitted an application for site plan review for approval of a commercial facility. The town's planning board approved the application. Abutters to the site appeal the decision to the town's board of appeals (BOA), and Plaintiff hired Defendants to represent it before the BOA. The BOA ultimately reversed the planning board's decision. Plaintiff appealed, but because Defendants failed to file a brief, the appeal was dismissed. Plaintiff then brought this action alleging that it suffered harm due to Defendants' negligence. The court granted summary judgment for Defendants, concluding that Plaintiff could not show either that the planning board's decision would have been upheld or that the BOA's decision would have been overturned absent Defendants' negligence. The Supreme Court vacated the judgment and remanded for further proceedings, holding that the superior court, had it originally reviewed the planning board's decision, would have concluded that the board's approval of the site plan did not reflect error. View "MSR Recycling, LLC v. Weeks & Hutchins, LLC" on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment in favor of Respondents, a real estate appraisal company and a professional real estate appraiser, as to Appellants' allegations that Respondents' negligence prevented them from refinancing their home loan, holding that Appellants' claims lacked evidentiary support and were based on little more than conclusory allegations and accusations.After purchasing a home, Appellants brought this action against Respondents asserting claims for professional negligence, negligent misrepresentation, breach of the statutory duty to disclose a material fact, and breach of contract as third-party beneficiaries. Specifically, Appellants alleged that Respondents negligently relied on inaccurate information in calculating the home's size and market value, which resulted in a misleading appraisal report and inflated purchase price. The district court granted summary judgment for Respondents. The Supreme Court affirmed and took the opportunity of this case to emphasize the important role of summary judgment in promoting sound judicial economy. View "Boesiger v. Desert Appraisals, LLC" on Justia Law

David Kosmann appealed a district court judgment relating to a dispute that arose from the sale of real property. He claimed the district court erred in enforcing an oral settlement agreement reached in mediation between Kosmann, Kevin Dinius, and Dinius & Associates, PLLC (collectively “Dinius”). Kosmann also argued the trial court erred in: (1) awarding attorney fees to Dinius as a sanction against Kosmann and his attorney; (2) declining to impose sanctions against Dinius and his attorney; and (3) striking an untimely memorandum and declaration in support of his motion to reconsider. After review of the trial court record, the Idaho Supreme Court affirmed in part and reversed in part. The Supreme Court determined the district court did not err in enforcing the settlement agreement; the court also did not err in declining to impose sanctions against Dinius on ethics violations. However, the Supreme Court determined the district court abused its discretion in imposing I.R.C.P. 11 sanctions against Kossman and his counsel: the district court did not act consistently with the applicable legal standard for imposing sanctions pursuant to I.R.C.P. 11(b). The Supreme Court declined to address all other issues Kossman raised, and determined he was not entitled to attorney fees on appeal. "The record in this case is so tarnished with questionable conduct that it has presented this Court with a vexing ethical and legal dilemma. While we are gravely concerned over the potential ethical lapses which allegedly occurred during the mediation of this matter, there are no findings in the record concerning these matters. Therefore, as the trial court determined, we will leave to the Idaho State Bar, if properly called upon, the responsibility to investigate this matter further and make the necessary findings and conclusions as to the ethical issues presented." View "Kosmann v. Dinius" on Justia Law

The issue this case presented for the Ohio Supreme Court centered on whether whether oil-and-gas land professionals, who help obtain oil-and-gas leases for oil-and-gas-development companies, must be licensed real-estate brokers when they engage in the activities described in R.C. 4735.01(A) with respect to oil-and-gas leases. Specifically, the Court addressed address whether R.C. 4735.21 precluded a person not a licensed real-estate broker from bringing a cause of action to recover compensation allegedly owed for negotiating oil-and-gas leases. The Court concluded the plain language of R.C. 4735.01 did not exclude oil-and-gas land professionals or oil-and-gas leases from the relevant definitions set forth in the statute; appellants Thomas Dundics and his company, IBIS Land Group, Ltd., engaged in activities that required a real-estate-broker’s license and were precluded from bringing a cause of action to recover compensation for those activities. View "Dundics v. Eric Petroleum Corp." on Justia Law