Justia Professional Malpractice & Ethics Opinion Summaries

Plaintiffs were represented by defendant attorneys in an action against State Farm arising out of the 1994 Northridge earthquake. Court-appointed retired judges presided over a 1997 aggregate settlement. In 2012, one of the plaintiffs conducted a random sampling of other plaintiffs’ awards in the action, which, they claimed, revealed that the defendants had not properly disbursed or accounted for the settlement funds and had concealed this conduct from plaintiffs. Plaintiffs sought damages for failure to obtain their informed consent to an aggregate settlement and misappropriation of and failure to account for the settlement funds. The trial court dismissed, finding the claims based on speculation and barred by the statute of limitations. The court of appeal affirmed, rejecting arguments that the statute of limitations had not run under Probate Code section 16460 because they had no notice of wrongdoing and that actions for violations of Business and Professions Code section 6091 in failing to provide an accounting are not barred because their action was filed within one year of failure to comply with the statute. Where there are facts sufficient to put one on inquiry notice, the fraud statute of limitations starts running even when the defendant is a fiduciary. View "Britton v. Girardi" on Justia Law

Plaintiff, a New Jersey resident who was admitted to the practice of law in New York, maintained her only law office in New Jersey. When Plaintiff learned of the statutory requirement that nonresident attorneys must maintain an office within New York in order to practice in the State under N.Y. Jud. Law 470, Plaintiff commenced this action alleging that Judiciary Law 470 violated the Privileges and Immunities Clause of the U.S. Constitution. The U.S. Court of Appeals for the Second Circuit asked the New York Court of Appeals to set forth the minimum requirements necessary to satisfy the mandate that nonresident attorneys maintain an office within the State “for the transaction of law business” under Judiciary Law 470. The Court of Appeals answered by holding that the statute requires nonresident attorneys to maintain a physical office in New York. View "Schoenefeld v. State" on Justia Law

Ronald Hines was a Texas-licensed veterinarian who practiced since the mid-1960s. He worked mainly in traditional veterinary practices until he retired in 2002. After his retirement, he founded a website and began to post articles about pet health and care. These general writings soon turned to more targeted guidance and, as he acknowledged in his complaint, he began “to provide veterinary advice to specific pet owners about their pets.” This advice was given via email and telephone calls, and Hines “never physically examine[d] the animals that are the subject of his advice,” though he did review veterinary records provided by the animal owners. Texas required veterinarians to conduct a physical examination of an animal or its premises before they can practice veterinary medicine with respect to that animal. In 2012, the Texas Board of Veterinary Medical Examiners informed Hines that by providing veterinary advice without a physical examination, he had violated Texas law. Hines eventually agreed to: abide by the relevant state laws, including the physical examination requirement, one year of probation; a stayed suspension of his license; a $500 fine; and to retake the jurisprudence portion of the veterinary licensing exam. Hines thereafter filed suit in federal court, seeking declaratory and injunctive relief. He argued that the physical examination requirement violates his First Amendment right to free speech as well as his rights under the Due Process and Equal Protection Clauses of the Fourteenth Amendment. The Board moved to dismiss under Federal Rule of Civil Procedure 12(b)(6). The district court granted the Board’s motion in part and denied it in part. With respect to the equal protection claim, the court concluded that because the law did not discriminate on the basis of any suspect classification, the count was evaluated pursuant to rational basis review, and held that the physical examination requirement passed that deferential standard. The court dismissed Hines’s substantive due process claim for similar reasons. The district court denied the motion to dismiss the First Amendment claims. It recognized that states have broad power to regulate professionals, but determined that because the physical examination requirement “regulate[s] professional speech itself,” it is subject to the First Amendment. Relying on federal Supreme Court precedent, the district court held that Hines had stated a plausible claim that the Board had infringed his First Amendment rights. The Board moved to certify for interlocutory review the district court’s order. The issue this case presented for the Fifth Circuit's review thus centered on whether Hines' First or Fourteenth Amendment rights were violated. The Court concluded it offends neither, reversing the district court’s denial of the defendants’ motion to dismiss the plaintiff’s First Amendment counts and affirming the district court’s granting of the defendants’ motion to dismiss the plaintiff’s Fourteenth Amendment counts. View "Hines v. Alldredge" on Justia Law

The Georgia Supreme Court granted certiorari to the Court of Appeals in “Fisher v. Gala,” (754 SE2d 160 (2014)) to determine if that the appellate court properly held that, in a professional malpractice action, when a plaintiff files a complaint accompanied by an affidavit from a person not competent to testify as an expert in the action, OCGA 9-11-9.1 (e) permits the plaintiff to cure this defect by filing an amended complaint with the affidavit of a second, competent expert. Finding that the Court of Appeals was correct in holding that the pleading could be so amended, the Supreme Court affirmed the Court of Appeals’ judgment. View "Gala v. Fisher" on Justia Law

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