Justia Professional Malpractice & Ethics Opinion SummariesArticles Posted in West Virginia Supreme Court of Appeals
Grant Thornton, LLP v. Kutak Rock, LLP
First National Keystone Bank retained an independent accounting firm to audit its records at a time that members of the bank's management were fraudulently concealing the bank's financial condition. The accounting firm issued a clean audit concerning the bank. It was later discovered that the bank had overstated its assets by over $500 million. Upon investigation, the FDIC concluded that the law firm that represented the bank had engaged in legal malpractice. The FDIC settled its claims against the law firm. The accounting firm was later found liable to the FDIC in federal district court for a negligent bank audit. The accounting firm subsequently sued the law firm, alleging fraud, negligent misrepresentation, and tortious interference with the accounting firm's contract to perform the audit. The circuit court granted summary judgment in favor of the law firm. The Supreme Court affirmed, holding that the claims of the accounting firm against the law firm were, in reality, contribution claims rather than direct or independent claims and were, therefore, barred by the settlement agreement between the law firm and the FDIC. View "Grant Thornton, LLP v. Kutak Rock, LLP" on Justia Law
Abadir v. Dellinger
Appellants Farouk Abadir, Hosny Gabriel, Ricardo Ramos, Alfredo Rivas and Michael Vega sued their former attorney Mark Dellinger and his law firm Bowles Rice McDavid Graff & Love, LLP because Mr. Dellinger settled a case in which they were all defendants without their consent. The circuit court dismissed the case, concluding that the Supreme Court had already decided that Mr. Dellinger had the âapparentâ authority to settle. Furthermore, the court held that the doctrine of collateral estoppel precluded Appellants from challenging what Mr. Dellinger had done. In this latest appeal, Appellants alleged that the circuit court erred in granting Mr. Dellingerâs motion to dismiss because the court failed to distinguish between the âactualâ and âapparentâ authority an attorney had to settle a case. After a thorough review of the record, the Supreme Court agreed, and held that the circuit court erred in granting Mr. Dellingerâs motion to dismiss. The Court remanded the case to the circuit court for further proceedings.