Justia Professional Malpractice & Ethics Opinion Summaries

After the BP Stock Fund lost significant value, the affected investors filed suit alleging that the plan fiduciaries breached their duties of prudence and loyalty by allowing the Plans to acquire and hold overvalued BP stock; breached their duty to provide adequate investment information to plan participants; and breached their duty to monitor those responsible for managing the BP Stock Fund. The district court held that the stockholders had failed to overcome the Moench v. Robertson presumption and dismissed their claims. The stockholders appealed, and while their appeal was pending in this court, the Supreme Court issued Fifth Third Bancorp v. Dudenhoeffer, holding that there was no such “presumption of prudence” under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. On remand, the district court held that the stockholders had plausibly alleged that defendants had inside information; and the stockholders had plausibly alleged two alternative actions that defendants could have taken that met the Fifth Third standard: freezing, limiting, or restricting company stock purchases; and disclosing unfavorable information to the public. The district court granted the motion to amend with respect to pleading these alternative actions. It then certified defendants’ motion for interlocutory appeal. The court concluded, however, that the district court here erred when it altered the language of Fifth Third to reach its holding. Under the Supreme Court’s formulation, the plaintiff bears the significant burden of proposing an alternative course of action so clearly beneficial that a prudent fiduciary could not conclude that it would be more likely to harm the fund than to help it. In this case, the stockholders have failed to do so. Because the stockholders' amended complaint is insufficient and the district court erred in granting their motion to amend, the court reversed and remanded. View "Whitley v. BP, P.L.C." on Justia Law

CommScope Credit Union (Plaintiff), a state-chartered credit union, hired Butler & Burke, LLP (Defendant), a certified public accounting firm, to conduct annual independent audits of its financial statements. Plaintiff later filed a complaint alleging breach of contract, negligence, breach of fiduciary duty, and professional malpractice. Defendant pleaded seven affirmative defenses, including contributory negligence and in pari delicto. The trial court subsequently granted Defendant’s motion to dismiss and for judgment on the pleadings. The court of appeals reversed, concluding (1) the specific allegations in Plaintiff’s complaint were sufficient to state a claim for breach of fiduciary duty, and (2) Defendant’s affirmative defenses would not entitle Defendant to dismissal at this stage. The Supreme Court affirmed in part and reversed and remanded in part, holding (1) Plaintiff’s allegations did not establish that Defendant owed it a fiduciary duty in fact, and therefore, the trial court correctly dismissed Plaintiff’s breach of fiduciary duty claim; and (2) the members of the Court are equally divided on whether the facts alleged in the complaint established the defenses of contributory negligence and in pari delicto, and therefore, the court of appeals’ decision on this issue is left undisturbed. View "CommScope Credit Union v. Butler & Burke, LLP" on Justia Law

A client personally financed the sale of his business corporation. His attorney drafted documents that secured the buyer’s debt with corporate stock and an interest in the buyer’s home. Over seven years later the government imposed tax liens on the corporation’s assets; according to the client, it was only then he learned for the first time that his attorney had not provided for a recorded security interest in the physical assets. The client sued the attorney for malpractice and violation of the Alaska Unfair Trade Practice and Consumer Protection Act (UTPA). The superior court held that the statute of limitations barred the client’s claims and granted summary judgment to the attorney. But after review, the Alaska Supreme Court concluded that it was not until the tax liens were filed that the client suffered the actual damage necessary for his cause of action to be complete. Therefore, the Court reversed the superior court's judgment and remanded the case for further proceedings. View "Jones v. Westbrook" on Justia Law

Jon Haddow, an attorney, represented and Frank and Beverly Pawlendzio in personal bankruptcy proceedings. Following the proceedings, the Pawlendzios filed a complaint against Haddow, asserting claims of legal malpractice and seeking damages for economic loss and extreme emotional distress. The Pawlendzios based their claims on the fact that, contrary to Haddow’s advice, loans made to them by friends and relatives lost their protected status as a result of the bankruptcy proceedings. The superior court entered an order granting summary judgment in favor of Haddow. The Supreme Judicial Court affirmed, holding that the Pawlendzios failed to produce expert-based evidence that Haddow breached his duty owed to the Pawlendzios. View "Pawlendzio v. Haddow" on Justia Law

Defendant served as Plaintiff’s defense counsel in a criminal jury trial in which Plaintiff was convicted of fourteen offenses. While awaiting sentencing, Plaintiff filed this action against Defendant, alleging legal malpractice and breach of fiduciary duty. After precluding Plaintiff from presenting expert testimony on the issue of causation due to her failure to disclose an expert witness by a date previously ordered, the trial court granted summary judgment in favor of Defendant. Plaintiff appealed, arguing that the trial court erred in concluding that expert testimony was necessary to prove her allegations. The Supreme Court affirmed, holding that expert testimony was required for Plaintiff to establish the element of causation in her legal malpractice case. View "Bozelko v. Papastavros" on Justia Law

Appellants N.C. and Alethea Young, Ph.D., appealed superior court orders denying Dr. Young’s motion to quash a subpoena for N.C.’s psychological records issued by appellee, the New Hampshire Board of Psychologists (Board), and dismissing N.C.’s petition for a declaratory judgment to prevent the Board from obtaining the records. N.C. has been a patient of Young for many years, attending at least two therapy sessions per week since the age of two. In August 2013, when N.C. was still a minor, she informed Young that her father, S.C., had physically and emotionally abused her. According to Young, throughout her treatment of N.C., she witnessed what she described as S.C.’s aggressive and humiliating treatment of his daughter, both in public as well as in therapy sessions. In September, S.C. filed a written complaint against Young with the Board. The complaint alleged that Young had breached her professional obligations by: (1) becoming personally over-involved with N.C., thus sacrificing her objectivity; (2) providing counseling to both S.C. and his daughter, thus creating an insurmountable conflict of interest; (3) violating RSA 169-C:29 (2014) by failing to timely report suspected abuse of a child to DCYF; (4) violating RSA 633:1, I-a (2007) and 18 U.S.C. § 1201(a) (2012) by detaining and concealing N.C., who was a minor at the time, from S.C. when she drove N.C. to Vermont without S.C.’s knowledge or consent; and (5) failing to respect S.C.’s wishes that she no longer treat his daughter. On appeal, appellants argued that the trial court erred in enforcing the subpoena because the Board failed to establish that it had just cause to issue the subpoena. Appellants also contended that, even if just cause existed to issue the subpoena, once they objected, the subpoena could not be enforced by the court because the Board failed to sustain what, in their view, was the additional burden necessary to pierce the patient’s privilege by showing that there was a reasonable probability the records were relevant and material and that the Board had an essential need for them. Furthermore, appellants argued that, even if the Board met the burden necessary to pierce the privilege, the court erred in not conducting an in camera review of the records before ordering compliance with the subpoena in order to limit the scope of disclosure. After review, the New Hampshire Supreme Court agreed with appellants that the statute required a court order to obtain a patient’s records when there was an objection to compliance with a subpoena based upon a claim of privilege. However, the Court concluded that the trial court did not err in finding that, under the circumstances of this case, the privilege must yield to the Board’s proper exercise of its regulatory responsibilities with regard to its licensee, Dr. Young. View "N.C. v. New Hampshire Board of Psychologists" on Justia Law

Means, 18 weeks pregnant, went into labor. She went to Mercy Health, the only hospital within 30 minutes of her residence. Doctors diagnosed preterm premature rupture of the membrane, which usually results in a stillbirth or the baby's death. Means’s unborn baby still had a heartbeat. Mercy sent her home with pain medication without telling Means that the baby would likely not survive or that continuing her pregnancy could endanger her health. The next morning, Means returned with a fever, excruciating pain, and bleeding. Mercy did not give her additional treatment or options, although Means’s physician suspected she had a serious bacterial infection. Mercy sent her home. Means returned that night with contractions. The baby was delivered and died. The pathology report confirmed that Means had acute bacterial infections. Two years later, a public health educator discovered and inquired into Means’s case. Mercy explained that its Directives (ethical guidelines dictated by Catholic doctrine) prohibited inducing labor or similar action. The limitations period had run out on medical malpractice claims. Means sued the Conference of Catholic Bishops, alleging negligence for promulgating and enforcing the Directives. The Sixth Circuit affirmed dismissal. The only link to the Eastern District, where the case was filed, was the decision of Catholic Health Ministries to adopt the Directives. Each individual defendant lives out of state. Means lives in and Mercy is located in the Western District. Means did not allege that the defendants, by adopting the Directives, caused her any cognizable injury.. View "Means v. United States Conference of Catholic Bishops" on Justia Law

David Savell filed a complaint against Michael Duddy and the law firm of Kelly, Remmel & Zimmerman (KRZ) founded upon his assertion that an attorney-client relationship existed between himself and Duddy. Among other claims, Savell alleged claims for attorney malpractice and breach of fiduciary duty. The court granted Duddy and KRZ’s motion for summary judgment, concluding that Savell failed to demonstrate an attorney-client relationship between himself and Duddy. The Supreme Judicial Court affirmed, holding (1) an attorney-client relationship did not exist between Savell and Duddy; and (2) Duddy did not owe Savell a duty of care as a nonclient. View "Savell v. Duddy" on Justia Law

Westside Gilts RE, LLC submitted an application to the Beadle County Planning Commission for a conditional use permit (CUP) to construct and operate a concentrated animal feeding operation. The Planning Commission recommended approval of the CUP. The Beadle County Board of Adjustment (Board) approved the CUP. Petitioners appealed, arguing that the Board was without authority to issue the CUP because the county zoning ordinances passed in 2011 (Ordinances), which authorized the Board to grant the permit, were improperly enacted. The circuit court reversed the Board’s decision granting the CUP, concluding that the Ordinances were improperly enacted. The Supreme Court (1) affirmed the circuit court’s ruling reversing the Board’s decision to grant the CUP, holding that the Ordinances were invalid because the Planning Commission failed to comply with S.D. Codified Laws 11-2-18, and therefore, the Board lacked jurisdiction to grant a CUP; but (2) reversed the circuit court’s order declaring the Ordinances invalid, as the order exceeded the options available to the court under its limited scope of review on certiorari. View "Wedel v. Beadle County Comm’n" on Justia Law

Tower Homes, LLC retained William Heaton and his law firm (collectively, Heaton) for legal guidance in developing a residential common ownership project. The project eventually failed, and Tower Homes entered Chapter 11 bankruptcy protection. The plan of reorganization and confirmation order stated that the trustee and bankruptcy estate retained all legal claims. The trustee subsequently entered into a stipulation with a group of creditors (collectively, the Creditors) permitting the Creditors to pursue any legal malpractice claims in the Tower Homes’ name. The bankruptcy court then entered an order authorizing the trustee to permit the Creditors to pursue Tower Homes’ legal malpractice claim in Tower Homes’ name. The Creditors subsequently filed a legal malpractice lawsuit against Heaton, naming Tower Homes as plaintiff. The district court granted summary judgment in favor of Heaton, concluding that the stipulation and order constituted an impermissible assignment of a legal malpractice claim to the Creditors. The Supreme Court affirmed, holding (1) the stipulation and order constituted an assignment, which is prohibited under Nevada law; and (2) the Creditors may bring a debtor’s legal malpractice claim pursuant to 11 U.S.C. 1123(b)(3)(B) when certain conditions are met, but those conditions were not met in this case. View "Tower Homes, LLC v. Heaton" on Justia Law