Justia Professional Malpractice & Ethics Opinion Summaries

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

Sanowicz and Bacal are licensed real estate salespersons. Sanowicz alleges that he and Bacal agreed to share commissions earned by either of them on certain sales of real property, but that Bacal breached that agreement. The two did share some commissions. The trial court dismissed, based on Business and Professions Code section 10137,4 which provides that it is unlawful for a real estate agent to accept compensation from any person other than the real estate broker under whom he or she is licensed. The court of appeal reversed, holding that licensed real estate agents may agree to share commissions earned under certain circumstances. In stating that an agent may pay commission to another licensee, the Legislature did not limit the payee to a licensed broker; instead it required that any such payment be made “through the broker” thus permitting payments to be made to licensed real estate professionals, whether agents or brokers. View "Sanowicz v. Bacal" on Justia Law

The Nelsons sued Chicago law firm Freeborn & Peters for malpractice, seeking $1.3 million in damages and were awarded more than $1 million. The malpractice claim arose from a transaction that the law firm handled involving acquisition of a shopping center under construction in Algonquin, Illinois. The law firm represented both the contract purchaser and the Nelsons, who invested in the venture, which suffered losses following the downturn of September 2008. The Seventh Circuit affirmed, finding that any error in the allocation of damages did not hurt the law firm or any creditors. View "Nelson Bros. Prof'l Real Estate, LLC v. Freeborn & Peters, LLP" on Justia Law

Plaintiff-appellant Joanne Peake purchased a home from Marviel and Deanna Underwood. About two years later, Peake brought an action against the Underwoods and the Underwoods' real estate agent, Paul Ferrell. Peake sought to recover damages for defendants' alleged failure to disclose defective subfloors in the home. After the case had been pending for more than one year, Ferrell moved to dismiss and for monetary sanctions against Peake and her counsel Norman Shaw under Code of Civil Procedure section 128.7, arguing Peake's claims were factually and legally frivolous because the undisputed evidence showed Ferrell had fulfilled his statutory and common law disclosure duties, and Peake had actual notice of facts disclosing prior problems with the subfloors. Peake declined to dismiss the action during the statutory safe harbor period, and instead amended her complaint to add claims similar to claims she had previously dismissed. The trial court found Ferrell met his burden to show Peake's claims were "without legal or evidentiary support" and Peake's continued maintenance of the lawsuit demonstrated "objective bad faith" warranting sanctions. As sanctions, the court dismissed Peake's claims against Ferrell and ordered Peake and her attorney to pay Ferrell for his attorney fees incurred in defending the action. On appeal, Peake and Shaw challenged the sanction order. The Court of Appeal concluded that the trial court acted within its discretion in awarding the section 128.7 sanctions. View "Peake v. Underwood" on Justia Law