Justia Professional Malpractice & Ethics Opinion Summaries

The Joyce law firm purchased professional liability insurance from Professionals Direct. In 2007 the firm won a large damages award for a class of securities-fraud plaintiffs and hired another law firm to sue to collect the money from the defendant’s insurers. Some class members thought the Joyce firm should have handled enforcement of the judgment itself under the terms of its contingency-fee agreement. They took the firm to arbitration over the extra fees incurred. Professionals Direct paid for the firm’s defense in the arbitration. After the arbitrator found for the clients and ordered the firm to reimburse some of the fees they had paid, the insurer refused a demand for indemnification. The district judge sided with the insurer, concluding that the award was a “sanction” under the policy’s exclusion for “fines, sanctions, penalties, punitive damages or any damages resulting from the multiplication of compensatory damages.” The Seventh Circuit affirmed. While the arbitration award was not functionally a sanction, another provision in the policy excludes “claim[s] for legal fees, costs or disbursements paid or owed to you.” Because the arbitration award adjusted the attorney’s fees owed to the firm in the underlying securities-fraud class action, the “legal fees” exclusion applies. View "Edward T. Joyce & Assocs. v. Prof'ls Direct Ins. Co." on Justia Law

Illinois attorney Jahrling was contacted and paid by attorney Rywak to prepare documents for the sale of 90-year-old Cora’s home. Rywak’s clients paid $35,000 for Cora’s property, which was worth at least $106,000 and was later resold by the purchasers for $145,000. Cora later alleged he understood that he would keep a life estate to live in the upstairs apartment of the home rent-free. Jahrling’s sale documents did not include that life estate. Jahrling and Cora could not communicate directly and privately because Cora spoke only Polish and Jahrling spoke no Polish. Jahrling relied on counsel for the adverse parties for all communication with Cora. After the buyers tried to evict Cora, Cora sued Jahrling in state court for legal malpractice. After a partial settlement with a third party and offsets, the court awarded Cora’s estate $26,000, plus costs. Jahrling filed for Chapter 7 bankruptcy protection. Cora’s estate filed an adversary proceeding alleging that the judgment was not dischargeable under 11 U.S.C. 523(a)(4) because the debt was the result of defalcation by the debtor acting as a fiduciary. The bankruptcy court found in favor of the estate. The Seventh Circuit affirmed.Jahrling’s egregious breaches of his fiduciary duty were reckless and the resulting malpractice judgment is not dischargeable. View "Jahrling v. Estate of Cora" on Justia Law

This matter comes before the Louisiana Supreme Court on the recommendation of the Judiciary Commission that respondent, Justice of the Peace Leroy J. Laiche, Jr., Second Justice of the Peace Court, Parish of Ascension, State of Louisiana, be removed from office and be ordered to reimburse the Commission the costs incurred in the investigation and prosecution of this matter. The Court agreed with the Commission's findings that respondent failed to timely refund bond money and inadvertently held bond money in excess of that permitted by law. Furthermore, the Court found the record demonstrated by clear and convincing evidence that respondent issued peace bond judgments without a hearing or giving the defendants a meaningful opportunity to be heard on five occasions. The Commission determined that respondent violated Canons 1, 2A, 2B, 3A(1), 3A(3), 3A(4), 3A(7), 3B(1) and 3B(2) of the Code of Judicial Conduct, and concluded that Justice of the Peace Laiche’s misconduct constituted egregious legal errors sufficient to rise to the level of judicial misconduct for which a judge should be removed from office under Article V, Section 25(C) of the Louisiana Constitution. After thoroughly reviewing the record, The Supreme Court adopted its recommendation of discipline. View "In re: Justice of the Peace Leroy J. Laiche, Jr." on Justia Law

Plaintiff filed suit against the State Bar, alleging a due process claim under 42 U.S.C. 1983. Specifically, plaintiff alleged that the State Bar’s rules applied the same standards and procedures for reinstatement for disbarred attorneys to attorneys suspended for more than 90 days, amounted to “defacto disbarment,” and violated his Fourteenth Amendment due process rights. The district court dismissed the complaint as barred by the Eleventh Amendment and then denied plaintiff's motion to alter or amend the judgment. Determining that the court has jurisdiction to hear plaintiff's appeal, the court agreed with the district court's conclusion that the Alabama State Bar is an arm of the state of Alabama and thus enjoys Eleventh Amendment immunity from plaintiff's section 1983 claim. Further, the court concluded that the district court did not abuse its discretion in denying plaintiff's FRCP 59(e) motion where, to the extent plaintiff contends his due process claim was a “direct action” under the Fourteenth Amendment, his amended complaint did not allege such a claim, and he could not use his Rule 59(e) motion to do so. Accordingly, the court affirmed the judgment. View "Nichols v. Alabama State Bar" on Justia Law

Plaintiffs filed a putative class action against Allen Standford's lawyers, Thomas Sjoblom, and the law firms where he worked, arguing that they aided and abetted Stanford’s fraud and conspired to thwart the SEC’s investigation of Stanford’s Ponzi scheme. The district court subsequently denied defendants' motion to dismiss the complaint as barred by the attorney immunity under Texas law. The court held that, under Texas law, attorney immunity is a true immunity of suit, such that denial of a motion to dismiss based on attorney immunity is appealable under the collateral order doctrine. The court reversed the district court’s order denying defendants’ motions to dismiss based on attorney immunity now that the Texas Supreme Court has clarified that there is no “fraud exception” to attorney immunity. Accordingly, the court rendered judgment that the case is dismissed with prejudice. View "Troice v. Proskauer Rose, L.L.P." on Justia Law

Bobby Gibson filed a legal-malpractice action against Joe Montgomery and his law firm, Williams, Williams and Montgomery, P.A. (“WWM”), alleging wrongful conduct in connection with the administration of his late wife Debbie's estate. The trial court granted summary judgment to Montgomery and WWM. The Supreme Court reversed and remanded. Bobby timely filed his Notice of Appeal and raised four issues: 1) whether the doctrines of res judicata or collateral estoppel barred his claims, 2) whether judicial estoppel precluded his malpractice action, 3) whether the thirty-day period provided in Section 11-1-39 required dismissal, and 4) whether there remains a genuine issue of material fact as to the elements of his legal-malpractice and fiduciary-duty claims. After review, the Supreme Court concluded: Bobby's claims were not precluded by the doctrines of res judicata and collateral estoppel; judicial estoppel did not preclude Bobby's legal-malpractice action; there was no merit to Montgomery's Section 11-1-39 argument; and there remained a genuine issue of material fact as to whether an attorney-client relationship existed. View "Gibson v. Williams, Williams & Montgomery, P.A." on Justia Law

Hassebrock hired the Bernhoft Law Firm in 2005 to help with legal problems, including a federal criminal tax investigation, a civil case for investment losses, and a claim against Hassebrock’s previous lawyers for fees withheld from a settlement. Hassebrock was ultimately found guilty, sentenced to 36 months in prison, and ordered to pay a fine and almost $1 million in restitution. In 2008, Hassebrock fired the Bernhoft firm. In a malpractice suit against the Bernhoft attorneys and accountants, Hassebrock waited until after discovery closed to file an expert-witness disclosure, then belatedly moved for an extension. The court denied the motion and disallowed the expert, resulting in summary judgment for the defendants. The Seventh Circuit affirmed, rejecting an argument that the judge should have applied the disclosure deadline specified in FRCP 26(a)(2)(D) rather than the discovery deadline set by court order. The disclosure deadline specified in Rule 26(a)(2)(D) is just a default deadline; the court’s scheduling order controls. It was well within the judge’s discretion to reject the excuses offered by Hassebrock to explain the tardy disclosure. Because expert testimony is necessary to prove professional malpractice, summary judgment was proper as to all defendants. View "Hassebrock v. Bernhoft" on Justia Law

The Commission on Judicial Fitness and Disability filed a formal complaint alleging that respondent Walter Miller, then a circuit court judge, had violated the Oregon Code of Judicial Conduct (Code) in connection with a 2014 voters’ pamphlet statement supporting his judicial candidacy. The commission specifically alleged violations of Rule 2.1(D) (judge shall not engage in “conduct involving dishonesty, fraud, deceit, or misrepresentation”) and Rule 5.1(D) (judicial candidate shall not knowingly or with reckless disregard for truth make any “false statement” concerning qualifications, education, experience, or other material fact relating to judicial campaign). The commission conducted a hearing and recommended that the Supreme Court dismiss the formal complaint. The Supreme Court accepted the commission’s recommendation. View "In re Miller" on Justia Law

Gerald Rowlett and his two companies, Westlake Development Company, Inc., and Westlake Development Group, LLC (plaintiffs), filed an action for malpractice against the law firm Schwabe, Williamson, and Wyatt, PC, (Schwabe) and lawyers David Fagan and James Finn (collectively, defendants), alleging claims for negligence, negligent misrepresentation, breach of fiduciary duty, and claims related to attorney fees. Defendants had represented plaintiffs in an action against plaintiffs’ business partners in Sunrise Partners, LLC (Sunrise). Plaintiffs settled the Sunrise litigation in 2007, and, soon thereafter, initiated the malpractice action, alleging that they would have had a better outcome in the Sunrise litigation but for the mishandling of their case by defendants. A jury ultimately found that defendants were negligent in their representation of plaintiffs, but that defendants’ negligence did not cause plaintiffs any damage. The jury also reached a defense verdict on the breach of fiduciary duty, negligent misrepresentation, and attorney fee claims. Plaintiffs appealed, asserting seven assignments of error. The Court of Appeals reversed as to two of those assignments of error and remanded the case for a new trial. The Supreme Court did not agree with the Court of Appeals' judgment with regard to the two alleged errors, reversed in part, affirmed in part and remanded for further proceedings. The Court of Appeals concluded that defendants’ closing argument to the jury improperly invoked the erroneous date on the verdict form to argue that the jury should use the settlement date as the date to “value” Rowlett’s interest in Sunrise and thus conclude that plaintiffs suffered no damages. In so ruling, the court may have misunderstood defendants’ theory of defense and their causation argument. On this ground, the Supreme Court reversed. View "Rowlett v. Fagan" on Justia Law

In 1988, Department of Professional Regulation investigator visited Gekas, a Springfield, Illinois dentist, and expressed concern that Gekas had administered nitrous oxide to a child. He ordered Gekas to provide information on all prescriptions on a continuing basis. Gekas contacted Deputy Governor Riley for assistance. After a meeting, the Department imposed less onerous requirements. In 2002, a Department investigator raided Gekas’ offices, with the assistance of the Federal Drug Enforcement Agency. After failed negotiations, the Department issued a cease and desist order against Gekas for the unlicensed practice of medicine and prescribing controlled substances while not a licensed physician and sought to have his license suspended, on grounds that Gekas had prescribed 4,600 doses of Hydrocodone and Vicoprofen to a patient. Gekas contacted his Senator. In 2008, the cease-and-desist was vacated and the complaint dismissed. Gekas submitted a FOIA request concerning the administrative complaint. The Department responded that no public documents were available. In 2009, Gekas filed suit; it was dismissed by stipulation in 2010. Meanwhile, a Chairman on the Illinois Board of Dentistry issued subpoenas against Gekas, stating that there was reasonable cause to believe that Gekas had violated the Illinois Dental Practice Act. Gekas filed suit, alleging First Amendment retaliation. The district court granted defendants summary judgment, finding no evidence of retaliatory motive. The Seventh Circuit affirmed. View "Gekas v. Vasiliades" on Justia Law