Justia Professional Malpractice & Ethics Opinion Summaries

Utrecht represented Loanvest in a lawsuit arising out of a loan that was secured by an interest in Oakland property. Utrecht successfully opposed Madow’s motion for a preliminary injunction that would have prevented Loanvest from paying out of the proceeds of the property’s sale. In 2013, Madow became manager of Loanvest, which then sued Utrecht, claiming breach of the duty of loyalty and “looting” Loanvest to pay other obligations. The trial court dismissed under the anti-SLAPP (strategic lawsuit against public participation) statute (Code Civ. Proc., 425.16), finding that the claim was based on an act in furtherance of the right of petition and that Loanvest failed to make a prima facie showing of its ability to prevail in the action. The court of appeal reversed. Loanvest is not a third party allegedly harmed by Utrecht’s representation of another client, but Utrecht’s former client that allegedly was harmed as the result of his “egregiously breaching the duty of loyalty.” That the complaint refers to another as Utrecht’s “true client” and Loanvest as his “purported client” does not alter that admitted fact. A lawsuit that concerns a breach of duty does not depend on the exercise of a constitutional right. View "Loanvest I, LLC v. Utrecht" on Justia Law

In 2008 Knox, the mother of Keys and the sister of Smith underwent surgery on her thyroid. When Knox was transferred from a post-anesthesia care unit to a medical-surgical unit, a nurse noticed Knox’s breathing was “noisy,” and called the hospital’s rapid assessment team to evaluate her. During the medical team’s efforts Knox was without a pulse for a number of minutes and as a result of her blocked airway, she suffered a permanent brain injury. She died after life support was withdrawn. A jury awarded Keys and Smith damages on their claims for negligent infliction of emotional distress. The court of appeal affirmed, rejecting an argument that there was no evidence to support the jury’s finding that plaintiffs meaningfully comprehended the medical negligence that led to the death of their family member at the time the negligence was occurring. View "Keys v. Alta Bates Summit Med. Ctr." on Justia Law

John Stokes appealed the judgment against him in a defamation case and retained attorney Greg Duncan to advise him on how to maintain his appeal while discharging his obligation in bankruptcy. After Duncan filed a bankruptcy petition on Stokes’ behalf, the bankruptcy court granted Duncan’s motion to withdraw. While the bankruptcy action was pending, Stokes filed the present action in state court against Duncan and his paralegal (collectively, Duncan) seeking damages for legal malpractice. The bankruptcy trustee intervened in the malpractice action, arguing that the action was an asset of the bankruptcy estate. The district court stayed all proceedings in the malpractice action. The bankruptcy court concluded that the malpractice action was an asset of the bankruptcy estate and subsequently sold the action to Duncan. After Stokes’ bankruptcy proceeding was discharged, the bankruptcy court entered an order concluding that Stokes’ claims against Duncan were property of the bankruptcy estate that had been purchased by Duncan. The state district court subsequently lifted the stay and granted Duncan’s motion for summary judgment, concluding that Stokes’ malpractice claims were property of the bankruptcy estate and had been purchased by Duncan. The Supreme Court affirmed, holding that Stokes’ claims were part of the bankruptcy estate. View "Stokes v. Duncan" on Justia Law

In 2005 E3’s predecessor began construction of an ethanol plant, to be powered, in part, by methane, and contracted with Biothane for a boiler system. Biothane, an expert in systems integration but not in boilers specifically, subcontracted with PEI to install and integrate the boilers. Biothane retained overall responsibility. Both are engineering companies. In 2007, PEI’s engineer repeatedly tried and failed to light the main flame of one of the boilers. The repeated attempts caused gas to build up and explode. E3 claims that the boiler never worked properly afterward and that the plant failed as a result. The plant’s owners eventually reorganized in bankruptcy. In 2011 (3 years and 364 days after the explosion) E3 sued, alleging torts against both companies and breach of contract against Biothane. The district court granted defendants summary judgment, finding all of E3’s claims time-barred under Neb. Rev. Stat. 25-222, Nebraska’s two-year limitations period for actions based on professional negligence. The Eighth Circuit affirmed. Regardless of whether the chain of events ultimately led to the breach of a contract, E3 still sued Biothane “for an action performed in a professional capacity.” View "E3 Biofuels, LLC v. Biothane, LLC" on Justia Law

The district court dismissed a suit brought by Sanderson, individually and on behalf of all others similarly situated, alleging that auditors (defendants) committed securities fraud by falsely representing that they performed their audits of Advanced Battery Technologies in accordance with professional standards and that the company’s filings accurately reflected its financial condition from the 2007 through the 2010 fiscal years. The court found that the complaint failed adequately to plead scienter as required by the Private Securities Litigation Reform Act of 1995, 15 U.S.C. 78u‐4. Sanderson sought to correct these deficiencies by moving to file an amended complaint. The court denied the motion, concluding that even the new allegations failed to “rise to the level of recklessness.” The Second Circuit affirmed, finding that the factual allegations did not give rise to a strong inference of either fraudulent intent or conscious recklessness, rather than mere negligence. View "In re: Advanced Battery Techs., Inc." on Justia Law

One Hope contracts with the Illinois Department of Children and Family Services to provide services with the objective of keeping troubled families together. Seven-month-old Marshana died while her family participated in One Hope’s program. The Cook County public guardian, as administrator of Marshana’s estate, filed a wrongful death case to recover damages against One Hope and Marshana’s mother,alleging that One Hope failed to protect Marshana from abuse or neglect and should not have allowed Marshana to be returned to her mother because of her unfavorable history and failure to complete parenting classes. Attorneys for the Public Guardian deposed the executive director of One Hope, who revealed the existence of a “Priority Review” report regarding Marshana’s case. The priority review process considers whether One Hope’s services were professionally sound, identifies “gaps in service delivery” and evaluates “whether certain outcomes have been successful or unsuccessful.” The Public Guardian moved to compel production of the report. One Hope argued that the report was protected from disclosure by the self-critical analysis privilege. The circuit court determined that the privilege did not apply. The appellate court and Illinois Supreme Court affirmed. Relevant legislative acts and omissions evince a public policy determination by the General Assembly that the type of information sought in discovery here is not subject to a “self-critical analysis privilege.” View "Harris v. One Hope United, Inc." on Justia Law

Brunton sued her brother, Kruger, as trustee of the trusts established by their late parents and as representative of their estates, and individual family members. Brunton, who was not named a beneficiary of the trusts, alleged undue influence and her mother’s diminished capacity. The elder Krugers had consulted with an accounting firm (Striegel) for estate planning. They provided Striegel with confidential information about their family, income, assets, and goals. Striegel provided information to the attorney who prepared the Krugers’ trust documents and wills. Brunton and the Estates issued subpoenas seeking discovery of the information and documents. A CPA at Striegel complied with the Estates’ subpoenas, but did not provide the documents to Brunton. Striegel invoked the Illinois Public Accounting Act (225 ILCS 450/27), governing confidentiality of records. The circuit court ordered Striegel to produce tax documents, but held that the estate planning documents were privileged. Brunton then issued deposition subpoenas to a Striegel CPA and a non-CPA employee, seeking production of the estate planning documents. The court again found the estate planning documents privileged, but held that Striegel had waived the privilege by providing the documents to the representative of the Estates. The appellate court and Illinois Supreme Court affirmed. The privilege belongs to the accountant, not the client, and there is no testamentary exception to the privilege, but the accountant waived the privilege by disclosing information to one party. He cannot claim the privilege to avoid disclosure of the same information to the other party. View "Brunton v. Kruger" on Justia Law

Amis alleged that his former attorneys committed malpractice by “caus[ing]” him to execute a settlement agreement that converted his company’s corporate obligations into Amis’s personal obligations without advising Amis that he had little to no risk of personal liability in the underlying litigation. All advice he received from the attorneys regarding the settlement agreement was given during mediation. The attorneys argued that Amis could not obtain evidence to support his claims, and that the law firm could not produce evidence to defend itself, because the disclosure of such evidence was barred by the mediation confidentiality statutes, Evidence Code section 1115. The trial court agreed on both counts and entered summary judgment for the firm. The court of appeal affirmed. The California Supreme Court has broadly applied the mediation confidentiality statutes and all but categorically prohibited judicially crafted exceptions, even in situations where justice seems to call for a different result. View "Amis v. Greenberg Traurig, LLP" on Justia Law

This matter stemmed from a recommendation of the Judiciary Commission of Louisiana regarding the failure of respondent Justice of the Peace Lorne L. Landry to comply with the financial reporting requirements of Supreme Court Rule XXXIX. Upon review, the Supreme Court found that the record established by clear and convincing evidence that Respondent willfully and knowingly failed to comply with the filing requirement of Rule XXXIX, thereby subjecting him to discipline. Respondent was ordered to pay a civil penalty of $500, plus costs. Respondent was further ordered to file his 2011 financial disclosure statement. View "In re: Justice of the Peace Lorne L. Landry, Plaquemines Parish, Ward 8" on Justia Law

This matter comes before the court on the recommendation of the Judiciary Commission of Louisiana that Judge Sheva M. Sims of the Shreveport City Court, Caddo Parish, be suspended without pay for 90 days and ordered to reimburse the Commission's costs. The charge arose from an incident that occurred between Judge Sims and an assistant city prosecutor, Katherine Gilmer, on April 24, 2012, wherein Judge Sims stated that Ms. Gilmer was “held in contempt” of court and then ordered the dismissal of fifteen criminal cases on the docket that day. After reviewing the record and applicable law, the Supreme Court found that the charge against Judge Sims was supported by clear and convincing evidence. However, the Court rejected the recommended discipline and instead ordered Judge Sims be suspended without pay for a period of 30 days. Furthermore, the Court ordered Judge Sims to reimburse the Commission’s costs incurred relative to its investigation and prosecution of this case. View "In re: Judge Sheva M. Sims, Shreveport City Court, Caddo Parish" on Justia Law