Justia Professional Malpractice & Ethics Opinion Summaries

Hill formed Blythe Corporation to acquire vacant lots in Chicago and was Blythe’s sole owner and employee. Blythe entered into a contract with Flawless Financial, which was to acquire the lots; Blythe agreed to pay legal fees of $50,000 to the attorney recommended by Flawless (DeAngelis) and deliver a $25,000 retainer fee. Blythe signed a representation agreement that had been drafted by DeAngelis, an employee of Brown Udell, on Brown Udell letterhead, but never informed Brown Udell of the representation. Blythe remitted a $25,000 check, payable to DeAngelis which was deposited into the “John A. DeAngelis Client Fund Account.” DeAngelis never shared fees received from Blythe with Brown Udell. Blythe investors transferred $250,000 to the DeAngelis Client Fund Account. Following Hill’s instructions, DeAngelis transferred $249,978 to a Flawless account. None of those funds were ever used to purchase lots on behalf of Blythe. Forte, a Blythe investor, contributed an additional $250,000. DeAngelis submitted an Application for Purchase of Redevelopment Project Area Property to obtain the vacant lots. The Department of Planning and Development reviewed the application and indicated steps necessary to move forward. Blythe, however made no effort to amend its application or to pursue necessary approvals. Blythe did not respond to inquiries by DeAngelis; Hill “[could] not recall” what happened to the funds received from Forte. Blythe sued DeAngelis and Brown Udell, claiming legal malpractice and unjust enrichment. The district court entered summary judgment for the defendants. The Seventh Circuit affirmed. View "Blythe Holdings, Inc. v. DeAngelis" on Justia Law

Plaintiffs, relatives of Decedent, sought Attorney's services in the administration of Decedent's estate. Plaintiffs later brought this professional negligence case against Attorney and his firm (Defendants), claiming that Attorney failed properly to disclose a conflict of interest to Plaintiffs, Attorney erroneously advised Plaintiffs to execute disclaimers that should be regarded as invalid and ineffective, and Attorney caused the estate to incur additional taxes by failing to include the purportedly disclaimed property in the qualified terminable interest property election on the estate tax return. The district court (1) entered judgment in favor of Defendants on the conflict of interest claim, and (2) dismissed as time barred Plaintiffs' claims regarding the disclaimed property and associated tax return elections. The Supreme Court (1) affirmed the judgment regarding the conflict of interest; but (2) reversed the judgments on Plaintiffs' remaining claims, holding that the district court erred when it concluded that the statute of limitations barred the claims. Remanded.View "Guinn v. Murray" on Justia Law

The Federal Election Commission opened an investigation into alleged discrepancies in ARMPAC's financial reporting. ARMPAC conceded that it had violated federal election laws and agreed to pay a civil penalty and terminate operations. Appellant, former treasurer of ARMPAC, was named in the Conciliation Agreement in his official capacity as treasurer. Appellant then filed suit against the law firm that represented ARMPAC and three lawyers, alleging that defendants failed to keep him informed about the Commission's investigation of ARMPAC, signed documents on his behalf without permission, and defamed him in the Agreement. The district court dismissed or granted summary judgment to defendants on each of appellant's claims. The district court concluded that appellant's defamation claim based on the signing of the Agreement was barred by the judicial privilege. The district court also concluded that appellant's remaining negligence claim was barred under D.C. law. The court concluded that appellant's defamation claim was based on statements contained within the Agreement reached between the Commission and ARMPAC, and therefore was encompassed within the judicial privilege. The court also concluded that no D.C. case holds that a plaintiff may maintain a negligence action based on the allegedly defamatory communication. Accordingly, the court affirmed the judgment of the district court. View "Teltschik v. Williams & Jensen, PLLC, et al." on Justia Law

Plaintiff (the customer) filed suit against State Street (the custodian bank), alleging in essence that it had a duty to notify him that the securities in his account were worthless. The district court granted State Street's motion to dismiss the contract claims on the ground that State Street had a merely administrative role in managing plaintiff's accounts and thus owed him no duty to guard against his investment advisor's misconduct. The district court concluded that plaintiff's negligence claims were barred by Florida's economic loss rule and plaintiff had not sufficiently alleged knowledge on the part of State Street in regards to the aiding and abetting claims. The court affirmed, holding that, under these facts, the custodian bank breached no duty, contractual or otherwise, by accepting on behalf of its customer securities that later turn out to be fraudulent and listing those securities on monthly account statements issued to the customer. Plaintiff's allegations failed to state claims for breach of contract; plaintiff failed to establish that State Street owed him an independent duty to monitor the investments in his account, verify their market value, or ensure they were in valid form; therefore, he failed to state valid negligence claims; plaintiff's allegations were insufficient to state a claim for aiding and abetting; and plaintiff's claims for breach of fiduciary duty and negligent misrepresentation also failed. View "Lamm v. State Street Bank and Trust" on Justia Law

The Mississippi Commission on Judicial Performance filed a formal complaint against Municipal Court Judge Robert Fowlkes following a verbal altercation he had with a probation officer outside the courtroom. The Commission and Judge Fowlkes filed a joint motion asking the Court to approve agreed-upon sanctions of a public reprimand and costs of $200. The Supreme Court agreed that Judge Fowlkes should be publicly reprimanded and assessed $200 for the costs of proceedings, and the Court found he also should be fined $1,000.View "Mississippi Commission on Judicial Performance v. Fowlkes" on Justia Law

Plaintiffs, Joint Official Liquidators of the SPhinX Funds, filed suit against defendants, alleging that defendants aided and abetted fraud and breached their fiduciary duty to Refco, the brokerage and financial services firm that entered bankruptcy in 2005, and whose demise led to the bankruptcies of SPhinX and its investment manager, PlusFunds. The court concluded that the claims against defendants were properly dismissed for failure of the Amended Complaint to contain sufficient allegations that defendants had actual knowledge of Refco's fraud and breach of fiduciary duty. The district court did not abuse its discretion by dismissing the claims without leave to amend where amendment could not cure the absence of factual allegations as to actual knowledge on the part of defendants sufficient to state a claim against them for aiding and abetting Refco's fraud and breach of fiduciary duty. Accordingly, the court affirmed the judgment of the district court and denied the request for leave to amend the Amended Complaint. View "Krys v. Pigott" on Justia Law

Plaintiff filed a professional negligence action against Defendant, a licensed clinical social worker, alleging that Defendant negligently failed to treat Plaintiff after Plaintiff disclosed to Defendant that he had viewed child pornography. Specifically, Plaintiff alleged that Defendant’s failure to treat him caused him to be subjected to a police task force raid, which allegedly caused Plaintiff mental distress and other injuries due to potential criminal prosecution. The trial court granted Defendant’s motion to strike Plaintiff’s amended complaint on the ground that it would violate public policy to allow Plaintiff to profit from his own criminal acts. The Supreme Court affirmed, holding that it would clearly violate public policy to impose a duty on Defendant to protect Plaintiff from injuries arising from his potential criminal prosecution for the illegal downloading, viewing, and/or possession of child pornography. View "Greenwald v. Van Handel" on Justia Law

Plaintiff Joe Encinias and his parents hired defendants Russell Whitener ad the Whitener Law Firm to represent plaintiff in a possible suit against the Robertson High School and the Las Vegas School District after he was badly beaten by a classmate at the school two years earlier. Plaintiff called the firm out of concern on the applicable statute of limitations on his case. In fact, the statute had run by that time. A Whitener attorney testified that he and his colleagues had been aware of the statute of limitations, but allowed it to run because they were concerned about the strength of plaintiff's case. In 2007, Whitener realized the case was barred; in early 2008, the firm decided not to pursue the suit. Whitener waited until the spring of 2008 to tell plaintiff and his family that it had missed the statute of limitations. Later that fall, plaintiff sued the firm for malpractice. The district court granted summary judgment in favor of the firm. Upon review, the Supreme Court concluded the trial court erred in its grant of summary judgment, finding genuine issues of fact remained with regard to plaintiff's case. View "Encinias v. Whitener Law Firm" on Justia Law

Dr. Obteen Nassiri owned and operated a chiropractic practice and employed Dr. Edward Johnson as a chiropractic physician. Both Appellants were licensed chiropractic physicians in Nevada at the time. Responding to allegations of unprofessional conduct, the Chiropractic Physicians’ Board of Nevada filed complaints for disciplinary action against Appellants. After an adjudicative hearing, the Board found Appellants had committed professional misconduct, revoked Nassiri’s license and mandated that Nassiri could not own any interest in a chiropractic practice until his license was restored, and suspended Johnson’s license for one year with conditions. On review, the district court entered judgment against Appellants. On appeal, Appellants argued that the Board improperly used a substantial evidence standard of proof to determine that Appellants committed professional misconduct. The Supreme Court affirmed, holding (1) in the absence of a specific statutory mandate, agencies generally must utilize, at a minimum, the preponderance-of-the-evidence standard in adjudicative hearings as a standard of proof; and (2) because the Board applied at least the preponderance-of-the-evidence standard in this case, the Board did not err in finding that Appellants committed violations warranting professional discipline. View "Nassiri v. Chiropractic Physicians' Bd." on Justia Law

A client sued his lawyer for breach of contract, breach of fiduciary duty, misrepresentation, and professional negligence in a fee agreement dispute. After a jury found in favor of the lawyer and judgment was entered, the client appealed, arguing that the superior court erred by issuing certain jury instructions regarding contract interpretation and by denying the client's motion for a new trial or judgment notwithstanding the verdict. Upon review, the Supreme Court concluded that any error in the superior court's jury instructions was not prejudicial, and affirmed the superior court's decision to deny the client's post-trial motions because there was sufficient evidence for the jury to find for the lawyer on each of the claims. View "Zamarello v. Reges" on Justia Law