Justia Professional Malpractice & Ethics Opinion Summaries

Elmer Gaede, who owned a 120-acre farm together with his wife, died testate on February 2005. Elmer’s daughter, Diean, was named executor under the will. Diean designated Ivan Ackerman to render legal services in the administration of the estate. During the pendency of the probate proceedings, Elmer’s son James and his wife, who were leasing the farm, exercised the option under the lease agreement to purchase the farm. Diean later filed this legal malpractice lawsuit against Ackerman, alleging that Ackerman failed to adequately protect her personal interests relating to the enforceability of the option. The district court granted summary judgment for Ackerman, determining that Ackerman did not have a duty to protect Diean’s personal interests. The court of appeals reversed, holding that a factual dispute existed over the question of whether Diean had a reasonable expectation that Ackerman was representing her personal interests. The Supreme Court vacated the decision of the court of appeals and affirmed the judgment of the district court, holding that insufficient facts supported Diean’s claim that Ackerman reasonably understood that Diean expected him to protect her personal interests in challenging the option. View "Sabin v. Ackerman" on Justia Law

These appeals arose out of LJL's exercise of its contractual option to purchase Pitcairn's ownership stake in a jointly owned high-rise luxury residential building in New York City, after which the parties pursued an arbitration to determine the value of the property. Both parties subsequently appealed from the district court's judgment. In LJL's appeal, the court agreed with its contention that the arbitrator's exclusion of Pitcairn's hearsay exhibits was within the arbitrator's authorized discretion and, therefore, vacated the district court's order overturning the arbitrator's determination of the Stated Value. The court agreed with the district court's conclusion that the arbitrator acted in accordance with the terms of the arbitration agreement in refusing to determine the Purchase Price and, therefore, remanded with instructions to confirm the arbitration award in its entirety. In Pitcairn's appeal, the court found no error in the district court's dismissal of Pitcairn's claims for breach of fiduciary duties and breach of the covenant of good faith and fair dealing. Accordingly, the court affirmed the judgment. View "LJL 33rd Street Associates, LLC v. Pitcairn Properties Inc." on Justia Law

In 1998, Hedstrom married Kotter, a real estate agent. The marriage lasted two years, but the two were on good terms when Hedstrom died. There is no evidence that Hedstrom lacked mental capacity. In 2006 Hedstrom purchased two Chicago condominiums. Kotter acted as his real estate agent and Geldes acted as his real estate attorney. Kotter told Geldes that Hedstrom would take title in another name and that Hedstrom could not hear over a phone so she would answer questions for him. Hedstrom died in 2007. Hedstrom’s children from a prior marriage were appointed administrators. Title to one condominium vested fully in Kotter, the other was titled to the Kotter Family Trust. The administrators sued, alleging breach of fiduciary duty by a real estate agent and legal malpractice. Because the administrators failed to timely identify experts, the magistrate barred them from presenting expert testimony encompassing Kotter’s position as a real estate agent and Geldes’ position as an attorney. The district judge affirmed and the administrators did not appeal. The district court granted summary judgment because expert testimony was needed on the standard of care and because undisputed evidence demonstrated the units were titled in accordance with Hedstrom’s intent. The Seventh Circuit affirmed. View "Ball v. Kotter" on Justia Law

In this case, a federal jury found that the defendant properties were subject to civil forfeiture. The jury found that each property derived from the proceeds of a health care fraud and money laundering scheme committed by Dr. Mert Kivanc - the son of Turan and Duygu Kivanc (Claimants). The court concluded that the district court correctly denied Claimants' motion to dismiss based on the statute of limitations; the district court did not err in denying Claimants' motions to permit Turan and Dr. Kivanc to testify remotely from Turkey; the district court did not abuse its discretion by admitting Dr. Kivanc's statements and two documents at issue; the district court did not abuse its discretion in declining to give Claimants' proposed jury instructions; and Dr. Kivanc's statements and transfer of defendant properties to Claimants and money to Turan were sufficient evidence of his intent to conceal his unlawful activities to withstand Claimants' Rule 50 motion. Accordingly, the court affirmed the judgment. View "United States v. Kivanc" on Justia Law

Developers purchased forty acres with the intent to develop it. Appellants secured a mortgage on the property with a bank. Later Developers formed a municipal property owners' district (the District). Law Firm was retained by the District as legal counsel for the proposed issuance of improvement bonds to finance public improvements in the development. At issue in this case were certain bonds issued by the District that were sold to several banks (Appellants). Developer defaulted on payment of the capital improvement use fees on the bonds and subsequently defaulted on the original mortgage, and the property was sold. Appellants sued Law Firm, alleging that Law Firm had a duty to inform Appellants of the mortgage on the real property and that it failed to inform them. The circuit court granted summary judgment for Law Firm. The Supreme Court affirmed in part and reversed and remanded in part, holding that the circuit court (1) correctly found Law Firm was not liable under the Arkansas Security Act; (2) erred in granting judgment on the issue of attorney malpractice; and (3) correctly found Law Firm had no duty to Appellants under contract, negligence, or breach of a fiduciary duty. View "First Ark. Bank & Trust v. Gill Elrod Ragon Owen & Sherman, P.A." on Justia Law

In 2007, Appellant Derick Villanueva acted as the closing attorney for a mortgage-refinance transaction in which Homecomings Financial, LLC served as the lender supplying funds to pay off earlier mortgages on the secured property. Appellee First American Title Insurance Company issued title insurance on the transaction. Pursuant to Villanueva’s instructions, Homecomings wired funds into a specified escrow account. However, the funds were not used to pay off the earlier mortgages; instead, the funds were withdrawn and the account closed by a person not a lawyer. First American paid off the earlier mortgages and, pursuant to its closing protection letter to Homecomings, became "subrogated to all rights and remedies [Homecomings] would have had against any person or property…." First American then filed this lawsuit against appellants, the estate of another attorney, the escrow account, the non-lawyer who withdrew the funds from the escrow account, and others, seeking damages for legal malpractice and breach of a contract with Homecomings. The trial court denied summary judgment to appellants. The issue before the Supreme Court was whether a legal malpractice claims were not per se unassignable. After studying the issue, the Court agreed with the appellate court that legal malpractice claims are not per se unassignable. View "Villanueva v. First American Title Ins. Co." on Justia Law

Homeowners challenged the validity of the foreclosure of their home mortgages. The district court dismissed the suit under Rule 12(b)(6). The court affirmed the district court's dismissal of the law firm as fraudulently joined and concluded that the court had subject matter jurisdiction over the appeal because the doctrine of prior exclusive jurisdiction was inapplicable. The court concluded that Homeowners' pleadings mirrored those in Karnatcheva v. JPMorgan Chase Bank, N.A. and affirmed the district court's dismissal. Homeowners have failed to plead factual content that permitted the court to infer more than the mere possibility of misconduct where the pleadings contained nothing but naked assertions that one or more of the named defendants suspected that Wells Fargo lacked legal title to the mortgages yet chose to publish statements to the contrary. The district court was well within its discretion to file sanctions. Accordingly, the court affirmed the district court's judgment. View "Dunbar, et al v. Wells Fargo Bank, N.A., et al" on Justia Law

Curley Haisch and his wife Rose owned Mulehead Ranch. Joe Duling was the Haisches' financial advisor as well as a realtor and broker. When Curley was ninety years old, he decided to sell the ranch and signed a listing agreement with Joe. Approximately one year later, Joe suggested that Curley and Rose form a charitable remainder trust (Trust) into which the ranch and chattels could be gifted. Curley and Rose executed the Trust, to which the Ranch was transferred. The Trustee then sold the Ranch to Joe and Lynne Duling. Later, it was discovered that the Trust contained multiple defects. The Trustee brought suit against the Dulings, their businesses, and the Mulehead Ranch on behalf of the Trust and the Haisches. The complaint alleged negligence, negligent misrepresentation, and breach of fiduciary duties. A jury found in favor of the Trust awarded Plaintiffs $1,568,200, including punitive damages. The Supreme Court reversed in part and remanded for a new trial on damages, holding (1) the circuit court erred in failing to give a proper instruction on the statutes of limitation applicable to Plaintiffs' claims for future tax consequences related to the defects in the Trust; and (2) the court did not err in the remainder of its judgment. View "Bailey v. Duling" on Justia Law

The underlying case in this matter concerned a property dispute between BNSF Railway (BNSF) and Roy D. Mercer, LLC (Mercer) and the interpretation of an easement. BNSF claimed a right to construct large berms on Mercer's property (to divert water from railroad tracks) pursuant to a 1936 easement granted to BNSF's predecessor in interest by Mercer's predecessor in interest. BNSF hired Gandy Dancer, LLC to construct the new berms. Mercer objected and threatened to remove them. Relying upon its easement claim, BNSF filed suit in state court against Mercer seeking to enjoin Mercer from removing the berms and requesting damages. Mercer filed a counterclaim against BNSF for tort damages and inverse condemnation, and joined Gandy Dancer as a party defendant for trespass, negligence, and prima facie tort. Once joined as a party, Gandy Dancer, through its attorneys Riley, Shane & Keller, P.C. (Riley Law Firm), removed the matter to federal court. Upon removal, Mercer hired the Wagner Ford Law Firm. At that time, the firm consisted of attorneys Kenneth Wagner and Lisa Ford. Although the firm was named "Wagner Ford," Ford was only an associate. In January 2010, Mercer added another law firm, Law & Resource Planning Associates, P.C. (the LRPA Law Firm) to represent it in the state court proceeding because of water law issues involved in that case. The Wagner Ford Law Firm ceased representing Mercer in late 2010. In late June 2012, while the state court proceeding was ongoing, the LRPA law firm learned via the Riley firm's website that the Riley firm had hired Ford as a new associate. LRPA promptly sent a letter to the Riley firm raising Ford's conflict of interest and stating that the Riley firm could no longer represent Gandy Dancer in the litigation with Mercer, Ford's former client. The Riley firm filed a motion in the state case seeking judicial approval of a Rule 16-110(C) screening process for Ford that Riley believed would allow its continued representation of Gandy Dancer. The court found that Ford had previously represented Mercer in the same or a substantially similar matter, her role was substantial, and she had a conflict of interest. Nevertheless, the district court found that the equities favored Gandy Dancer and declined to disqualify the Riley firm. Mercer appealed the district court's decision not to disqualify the Riley Firm. In interpreting and applying the rule to this case, the Supreme Court held that when an attorney has played a substantial role on one side of a lawsuit and subsequently joins a law firm on the opposing side of that lawsuit, both the lawyer and the new firm are disqualified from any further representation, absent informed consent of the former client. "We also specifically conclude under the same rule that screening the new attorney from any involvement in the lawsuit is not an adequate response to the conflict." View "Mercer v. Reynolds" on Justia Law

Appellant RFT Management Co., L.L.C. (RFT) brought this action against respondents Tinsley & Adams, L.L.P. and attorney Welborn D. Adams (collectively, Law Firm) based on their legal representation of RFT during the closing of its purchase of two real estate investment properties in Greenwood County. RFT alleged claims for (1) professional negligence (legal malpractice), (2) breach of fiduciary duty, (3) violation of the South Carolina Unfair Trade Practices Act1 (UTPA), and (4) aiding and abetting a securities violation in contravention of the South Carolina Uniform Securities Act of 2005 (SCUSA). The trial court granted a directed verdict in favor of Law Firm on RFT's causes of action regarding the UTPA and SCUSA, and it merged RFT's breach of fiduciary claim with its legal malpractice claim. The jury returned a verdict in favor of Law Firm on RFT's remaining claim for legal malpractice. RFT appealed, and the Supreme Court certified the case from the Court of Appeals for its review. Upon review of the matter, the Supreme Court affirmed the trial court with respect to all issues brought on appeal. View "RFT Management Co. v. Tinsley & Adams" on Justia Law