Justia Professional Malpractice & Ethics Opinion Summaries

Bradley and Karol Johnson appealed a judgment granting the law firm Barna, Guzy, & Steffen, Ltd. ("BGS") foreclosure of a real estate mortgage for payment of a $258,769.97 debt, and an order denying their N.D.R.Civ.P. 60(b) motion for relief from judgment. In 2013 the Johnsons retained BGS to represent them in a lawsuit in connection with the probate of the estate of Bradley Johnson's father in Minnesota. The Johnsons resided in, and BGS was located in, the Minneapolis, Minnesota area. BGS extended credit to the Johnsons for costs, fees, and expenses that would be incurred in representing them in the lawsuit through a revolving line of credit agreement and a revolving promissory note. To secure payment, the Johnsons executed a mortgage on land they owned in North Dakota. The mortgage required the Johnsons to pay all of the principal and interest on the indebtedness when due to BGS. The Johnsons failed to make the payments to BGS as required under the loan agreements. In 2015 BGS brought this action against the Johnsons and others in North Dakota to foreclose the mortgage. The Johnsons counterclaimed, alleging its attorneys committed legal malpractice and other torts during the Minnesota legal proceedings. The district court ultimately dismissed the Johnsons' counterclaim without prejudice for lack of subject matter jurisdiction under N.D.R.Civ.P. 12(h)(3). The court granted summary judgment for foreclosure on the North Dakota property in favor of BGS, concluding the Johnsons were indebted to BGS in the amount of $258,769.97 under the loan agreements with interest continuing to accrue. Because the Johnsons did not establish the district court erred in any of its rulings, the North Dakota Supreme Court affirmed the judgment, and the order denying the motion for relief from judgment. View "Barna, Guzy & Steffen, Ltd. v. Johnson" on Justia Law

In a construction-defect matter filed by a homeowners’ association (HOA) against several developers, an attorney for the HOA previously represented one of the developers. The developers moved to disqualify that attorney under Rules 1.9 and 1.10 of the Colorado Rules of Professional Conduct. The trial court denied the motion, without what the Colorado Supreme Court described as “meaningfully analyzing for purposes” of Rule 1.9 whether this case was “substantially related” to the prior matters in which the attorney represented the developer. Instead, the Court found the trial court relied on issue preclusion, and found that in this situation, the attorney was not disqualified to represent the developer. The Supreme Court concluded the trial court erred by not analyzing the facts of this case under Rule 1.9, and therefore vacated the denial of the developers’ motion, and remanded for further proceedings. View "In re Villas at Highland Park Homeowners Assoc. v. Villas at Highland Park, LLC" on Justia Law

Richard Watters petitioned the Alabama Supreme Court for a writ of mandamus to direct the Mobile Circuit Court to vacate its order denying his motion for a summary judgment as to count one of an amended complaint filed by Michael Gamble, in Gamble's capacity as administrator of the Estate of Barbara Ruth Findley Long ("Long"), deceased. Count one asserted a legal-malpractice claim against Watters under the Alabama Legal Services Liability Act ("the ALSLA"), alleging breach of a fiduciary duty. This proceeding involved title to real property located in Conecuh County, which was owned by Robert Findley at the time of his death. Long retained Watters & Associates, of which Watters was a partner, to represent her "in obtaining estate assets" of Findley, her deceased father. Watters filed suit seeking a declaration of Long's ownership in family property located in Conecuh County. The Circuit Court declaring that Long owned a one-sixth interest (approximately 30 acres) in the Conecuh County property Shortly thereafter, Long discharged Watters from any further representation in the declaratory-judgment action. Watters filed an attorney's lien against the Conecuh property to secure the payment of his attorney fees. Family members eventually quitclaimed their interests to Long. Taxes for 2006 weren't paid on the property, and Long's cousin Larry Findley purchased the property at a tax sale. According to Watters, Long asked him for a loan to redeem the property from the tax sale. Watters told Long that Langley would not record the quitclaim deed if Long repaid the loan within 30 days of redeeming the property; that, in the event the deed was recorded, any claim Watters might have against Long for services rendered regarding her deceased father's estate would be satisfied; and that Watters and Long agreed to terms concerning the loan arrangement. This arrangement was never reduced to writing. Long executed a quitclaim deed prepared by Watters, conveying title to the Conecuh property to "Langley & Watters, LLP." In 2010, Watters submitted to the Conecuh Probate Court a letter, enclosing "his client's" application for redemption of the Conecuh property. Long died on April 2, 2013, and a few months later, the Conecuh Probate Court appointed Gamble as administrator of Long's estate. Gamble filed a complaint against Watters, asserting claims of legal malpractice among other things. After review of this case, the Alabama Supreme Court concluded that Watters had another adequate remedy (i.e., an appeal) other than a writ of mandamus. Therefore, the Court denied relief. View "Ex parte Richard L. Watters." on Justia Law

This case arose from the revocation of a building permit previously granted to R. Bruce Montgomery and Wanda Haddock (collectively, Montgomery). Montgomery, represented by Judy A.S. Metcalf and William V. Ferdinand Jr. (collectively, the Eaton Peabody attorneys), appealed the revocation of the permit, contesting the revocation of the part of the permit dealing with the construction of a garage. The Georgetown Planning Board left in place a stop-work order on the construction of the garage. Montgomery subsequently hired attorney Clifford H. Goodall to assist him in his attempts to apply for a building permit, without success. Montgomery filed a legal malpractice complaint against the Eaton Peabody attorneys. The superior court dismissed five of the six counts of the complaint. Montgomery subsequently filed a second amended complaint raising legal malpractice claims against Goodall. The superior court granted summary judgment in favor of Goodall. The Supreme Judicial Court affirmed, holding that the superior court (1) properly granted the Eaton Peabody attorneys’ motion to dismiss counts one through five of Montgomery’s complaint; and (2) did not abuse its discretion in denying Montgomery’s motion to file a third amended complaint made three years after the commencement of the suit. View "Montgomery v. Eaton Peabody, LLP" on Justia Law

This case arose from the revocation of a building permit previously granted to R. Bruce Montgomery and Wanda Haddock (collectively, Montgomery). Montgomery, represented by Judy A.S. Metcalf and William V. Ferdinand Jr. (collectively, the Eaton Peabody attorneys), appealed the revocation of the permit, contesting the revocation of the part of the permit dealing with the construction of a garage. The Georgetown Planning Board left in place a stop-work order on the construction of the garage. Montgomery subsequently hired attorney Clifford H. Goodall to assist him in his attempts to apply for a building permit, without success. Montgomery filed a legal malpractice complaint against the Eaton Peabody attorneys. The superior court dismissed five of the six counts of the complaint. Montgomery subsequently filed a second amended complaint raising legal malpractice claims against Goodall. The superior court granted summary judgment in favor of Goodall. The Supreme Judicial Court affirmed, holding that the superior court (1) properly granted the Eaton Peabody attorneys’ motion to dismiss counts one through five of Montgomery’s complaint; and (2) did not abuse its discretion in denying Montgomery’s motion to file a third amended complaint made three years after the commencement of the suit. View "Montgomery v. Eaton Peabody, LLP" on Justia Law

This case arose out of a failed development project undertaken by BRN Development, Inc. in Coeur d’Alene. The project was for the development of a high-end 325-unit residential and golf course community on the west side of Lake Coeur d'Alene known as "Black Rock North." American Bank was the lender for this project. The Bank ultimately brought a foreclosure action against BRN. BRN brought a cross-claim against Taylor Engineering, Inc., alleging negligence for its role in the development. Taylor recorded a lien against the development. BRN defaulted on the loan, and the Bank named BRN, Taylor, and any other entity claiming an interest in the development. Taylor made a demand on BRN for payment for services rendered. The demand stated that Taylor would "complete the necessary documents" and request the necessary signatures from the local government entities involved in the final PUD approval. Taylor advised BRN that "if the final subdivision approval is not completed and recorded by May 29, 2009, the PUD and preliminary plat approval will expire, the PUD and plat will not vest in the recorded ownership to the real property involved, and the property will revert to its prior zoning and density." This statement was erroneous; it was undisputed that the final plat did not need to be recorded by May 29 in order to vest the PUD. In BRN's cross-claim against Taylor, it alleged professional negligence, negligent and intentional misrepresentation, and failure to disclose based on the erroneous statement Taylor made in its demand letter. The district court separated the claims between Taylor and BRN from the remainder of the American Bank litigation and ultimately held that Taylor was not liable to BRN. BRN appealed. The Supreme Court found no reversible error with the district court's judgment that BRN failed to meet its burden of proving its claims against Taylor, and affirmed that court's judgment. View "American Bank v. BRN Dev." on Justia Law

Matthew and Caralynn Fonder purchased a home and obtained a mortgage from Wells Fargo Bank, N.A. Wells Fargo selected Wells Fargo Insurance, Inc. Flood Services (WFFS) to conduct a flood hazard determination on the Fonders’ home. WFFS determined the home was not in a special flood hazard area, and therefore, the Bank did not require the Fonders to obtain flood insurance. A flood later destroyed the Fonders’ home. Wells Fargo later filed a complaint to foreclose on the Fonders’ home. The Fonders cross-claimed against WFFS seeking to recover damages sustained a result of their reliance on WFFS’s erroneous flood determination. The circuit court dismissed the cross-claim for failure to state a claim and dismissed the Fonders’ motion to amend their third-party complaint to assert a claim of negligent misrepresentation on the grounds that WFFS did not owe the Fonders a duty. The Supreme Court affirmed in part and reversed in part, holding (1) the circuit court erred when it dismissed the Fonders’ claims for professional negligence and negligent infliction of emotional distress but did not err in dismissing the Fonders’ breach-of-fiduciary duty claim; and (2) upon remand, the Fonders may amend their cross-claim to include negligent misrepresentation. View "Wells Fargo Bank, N.A. v. Fonder" on Justia Law

Amber Johnson filed suit against her closing attorney, Stanley Alexander, arguing he breached his duty of care by failing to discover the house Johnson purchased had been sold at a tax sale the previous year. The trial court granted partial summary judgment in favor of Johnson as to Alexander's liability. On appeal, the court of appeals held Alexander could not be held liable as a matter of law simply because the attorney he hired to perform the title work may have been negligent. Instead, the court determined the relevant inquiry was "whether Alexander acted with reasonable care in relying on [another attorney's] title search"; accordingly, it reversed and remanded. The Supreme Court reversed the court of appeals: even absent Alexander's admissions, the Court found it was error to equate delegation of a task with delegation of liability. The Court therefore agreed with Johnson that an attorney was liable for negligence in tasks he delegates absent some express limitation of his representation. Applying this standard to the facts, the Court found the grant of summary judgment was proper because there was no genuine issue of material fact as to liability. The case was remanded back to the trial court for a determination of damages. View "Johnson v. Alexander" on Justia Law

Amber Johnson filed suit against her closing attorney, Stanley Alexander, arguing he breached his duty of care by failing to discover the house Johnson purchased had been sold at a tax sale the previous year. The trial court granted partial summary judgment in favor of Johnson as to Alexander's liability. On appeal, the court of appeals held Alexander could not be held liable as a matter of law simply because the attorney he hired to perform the title work may have been negligent. Instead, the court determined the relevant inquiry was "whether Alexander acted with reasonable care in relying on [another attorney's] title search"; accordingly, it reversed and remanded. The Supreme Court reversed the court of appeals: even absent Alexander's admissions, the Court found it was error to equate delegation of a task with delegation of liability. The Court therefore agreed with Johnson that an attorney was liable for negligence in tasks he delegates absent some express limitation of his representation. Applying this standard to the facts, the Court found the grant of summary judgment was proper because there was no genuine issue of material fact as to liability. The case was remanded back to the trial court for a determination of damages. View "Johnson v. Alexander" on Justia Law

Plaintiffs Heidi and James Glassford appealed a superior court decision denying their motion for summary judgment and granting it to defendant Dufresne & Associates, P.C. on plaintiffs' claims of negligent misrepresentation and violation of the Vermont Consumer Protection Act (CPA). Plaintiffs were homeowners who purchased their home direct from the builder, D&L Homes by Design, LLC (D&L). D&L hired defendant to certify that the on-site mound sewage disposal system constructed for the home satisfied state permitting requirements. On April 19, 2005, the Vermont Agency of Natural Resources issued a Wastewater System and Potable Water Supply Permit for construction of the sewage disposal system on the property, subject to receiving a certification pursuant to 10 V.S.A 1973(e). On October 20, 2005, defendant's employee sent the certification required by the statute. On December 20, 2005, plaintiffs signed a purchase-and-sale agreement to purchase the home from D&L. Although the seller represented that the home and property had received all the necessary permits, plaintiffs never saw the certificate or the letter from the Agency stating that the certification requirement was satisfied. Sometime thereafter, plaintiffs hired an attorney in connection with the closing. On January 13, just prior, plaintiffs' attorney prepared a certificate of title that noted the wastewater and water supply permit. In February 2006, the sewage disposal system failed. In November 2008, plaintiffs hired defendant to investigate the system's failure because they knew defendant had inspected the system prior to their purchase. Defendant prepared a report stating that he had "completed the original" inspection in 2005 and found the system had been installed according to the permitted design. Plaintiffs received other opinions about the disposal system's failure both before and after hiring defendant to inspect the system. Plaintiffs filed a complaint in superior court alleging pecuniary losses from defendant's failure to properly inspect the sewage disposal system and subsequent misrepresentation about the construction of the system in the certification to the Agency. Upon review of the superior court decision, the Supreme Court found that the completion and filing of defendant's certificate was a prerequisite to D&L's ability to sell the home, the certificate was unrelated to the sale. The law required that it be sent only to the government agency that issued the permit. Furthermore, there was no allegation that D&L used the certificate as part of its sales pitch, and no allegation that defendant had any part in the sales. The standard for CPA liability required that a person be directly involved in the transaction that gave rise to the claimed liability. That standard was not met here. Accordingly, the Court affirmed the superior court's decision. View "Glassford v. Dufresne & Associates, P.C." on Justia Law