Justia Professional Malpractice & Ethics Opinion Summaries

Plaintiffs, current and former employees of Amgen and AML, participated in two employer-sponsored pension plans, the Amgen Plan and the AML Plan. The Plans were employee stock-ownership plans that qualified as "eligible individual account plans" (EIAPs) under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1107(d)(3)(A). Plaintiffs filed an ERISA class action against Amgen, AML, and others after the value of Amgen common stock fell, alleging that defendants breached their fiduciary duties under ERISA. The court concluded that defendants were not entitled to a presumption of prudence under Quan v. Computer Sciences Corp., that plaintiffs have stated claims under ERISA in Counts II through VI, and that Amgen was a properly named fiduciary under the Amgen Plan. Therefore, the court reversed the decision of the district court and remanded for further proceedings. View "Harris v. Amgen" on Justia Law

Gomberg briefly represented Goyal in 2004 settlement negotiations with a former employer over his claims of retaliation for whistle-blowing and gave Goyal’s employer notice of an attorney lien on any settlement or judgment. The negotiations did not produce an agreement; Goyal later retained new counsel to pursue litigation. In 2009, without the aid of any counsel, Goyal settled with his former employer. After Goyal settled, Gomberg reappeared and demanded a share. The employer paid a portion of the settlement to Gomberg. The district court granted Goyal’s motion to quash the lien, effectively ordering Gomberg to pay Goyal. The Seventh Circuit affirmed, stating that Gomberg is not entitled to any part of the settlement funds Goyal secured and that “Gomberg’s professional conduct is questionable.” His position that he “secured” funds for Goyal when the opposing party made an unacceptable and unaccepted settlement offer is unreasonable to the point of being frivolous and possibly warranting sanctions. Gomberg’s assertion of a lien for $70,000 was far greater than 10 percent of even the employer’s unaccepted (and not yet made) offer of $375,000 and was without basis. View "Goyal v. Gas Tech. Inst." on Justia Law

Tommy Hand sued the Prattville law firm of Howell, Sarto & Howell and William P. Roberts II, an attorney formerly employed by the Howell firm, asserting a claim under the Alabama Legal Services Liability Act based on their alleged negligent representation of him in an action seeking damages for personal injuries he suffered as a result of an automobile accident. The trial court entered a summary judgment in favor of the Howell firm and Roberts; Hand appealed. On appeal, Hand argued that Roberts and the Howell firm committed legal malpractice when they failed to name the Montgomery Advertiser, which Hand labeled "the critical deep-pocket defendant" as a party in Hand's personal injury action. Hand argues that the failure devalued his case to the extent that he had to settle for approximately half of what the case was worth and for an amount significantly less than his actual economic damage, not to mention his pain and suffering. Because there was no evidence indicating, only speculation, that Hand would have been able to settle his injury claim for a higher amount if Roberts and the Howell firm had also named the Montgomery Advertiser as a defendant, the Supreme Court affirmed the grant of summary judgment in favor of Roberts and the firm. View "Hand v. Howell, Sarto & Howell " on Justia Law

The issue before the Supreme Court in this case centered on a jury award of emotional distress and economic damages in a legal malpractice action. Defendant challenged the damages award on the grounds that emotional distress damages were not available in a legal malpractice case and that the award of economic damages equal to the amount plaintiff paid to settle the underlying case was improper because plaintiff failed to establish that the underlying settlement was reasonable. Upon review, the Supreme Court reversed as to the award of emotional distress damages and affirmed as to the economic damages award. View "Vincent v. DeVries" on Justia Law

Ciavarella and another state court judge, Conahan, received $2.8 million in three years from a commercial builder, Mericle, and an attorney and businessman, Powell, during the “Kids for Cash” scandal in Luzerne County, Pennsylvania . Ciavarella committed hundreds of juveniles to detention centers co-owned by Powell, including many who were not represented by counsel, without informing the juveniles or their families of his conflict of interest. The judges, aware that they were under investigation, met with Mericle and Powell to coordinate their stories in 2008. Powell was wearing a recording device, exposing the judges’ efforts to obstruct justice. The judges pled guilty to wire fraud and conspiracy in exchange for an agreed 87-month sentence. Noting that the stipulated sentences were significantly lower than the advisory Sentencing Guidelines for the offenses, the district court rejected the plea agreement; the judges withdrew their pleas. Ciavarella proceeded to trial, was convicted of racketeering, honest services mail fraud, money laundering conspiracy, filing false tax returns, and several other related crimes and was sentenced to 336 months’ imprisonment, restitution, forfeiture, and a special assessment. The Third Circuit remanded for modification of the special assessment for mail fraud, but otherwise affirmed, rejecting an argument that the trial judge was biased. View "United States v. Ciavarella" on Justia Law

The Trustee for McKenzie’s bankruptcy estate filed an adversary proceeding against GKH, McKenzie’s law firm (and a creditor), seeking records pertaining to entities in which McKenzie allegedly had an interest (11 U.S.C. 542). The parties entered into an agreed order. The Trustee then filed other actions, arising from the same post-petition transfer of 50 acres from the Cleveland Auto Mall, an entity in which McKenzie had a 50% interest, to a newly formed entity in which McKenzie had no interest. The Trustee alleged violation of the automatic stay, 11 U.S.C. 362(k) and preferential or fraudulent transfer, 11 U.S.C. 547(b) and 544(g)). The Bankruptcy Court dismissed, finding that under Tennessee law and notwithstanding prior dissolution, CAM existed as a separate legal entity such that the land remained its separate property. The Trustee then filed a state court action, alleging breach of fiduciary duty and civil conspiracy to commit fraud; GKH allegedly represented McKenzie under a conflict of interest in drafting the transfer documents. Several claims were dismissed as untimely. GKH then sued the Trustee alleging malicious prosecution and abuse of process. The Bankruptcy Court dismissed GKH’s adversary proceeding alleging claims, citing quasi-judicial immunity and failure to state a claim, and denied GKH’s motion for leave to file a complaint in state court. The district court and Seventh Circuit affirmed. View "In re McKenzie" on Justia Law

Exact developed business software. Infocon began distributing Exact’s software in 1998. A conflict arose when Exact allegedly abandoned a scheduled upgrade, leaving distributors like Infocon out to dry, and Infocon allegedly failed to remit fees. Exact sued Infocon in 2003. According to the district court, Exact showed “persistent noncompliance with… ever more stringent” discovery orders. When Infocon moved for a default judgment, Exact fired its lawyer, hired new counsel and entered settlement negotiations. . On the eve of settlement, Infocon fired its lawyer, DeMoisey. DeMoisey placed a charging lien on the settlement proceeds. Exact delivered the $4 million settlement to the district court, which distributed most of it to Infocon and placed the remaining $1.2 million in escrow pending resolution of the fee dispute. Nine months later, Infocon sued DeMoisey in Kentucky state court for malpractice. After a summary judgment ruling in favor of the lawyer, the district court held a bench trial and awarded DeMoisey $1.4 million in quantum meruit relief. The Sixth Circuit affirmed, rejecting arguments that the amount was too high, that Infocon had a right to a jury trial and, for the first time on appeal, that the district court lacked jurisdiction because DeMoisey and Infocon are both from Kentucky. View "Exact Software N. Am., Inc. v. Infocon Sys., Inc." on Justia Law

Appellant Mauricio Celis was never licensed to practice law in Texas or any other jurisdiction, but he continuously held himself out as a lawyer in Texas over a period of several years in a lucrative business. Appellant acknowledged that he did not have a "cedula," nor a certificate from Mexico's Ministry of Education. Rather, he testified that he had a diploma in judicial sciences and that he, therefore, believed that he was "considered a lawyer in Mexico." He called two witnesses who testified that every Mexican citizen who was of legal age and sound mind is a "licenciado." Appellant was charged with 23 counts of falsely holding himself out as a lawyer in violation of Texas Penal Code Section 38.122 (the "false-lawyer statute"). With respect to a culpable mental state, the trial court's instructions required the jury to determine only whether appellant intended to obtain an economic benefit for himself in holding himself out as a lawyer. The instructions did not include a culpable mental state with respect to the remaining elements that alleged that appellant had held himself out as an attorney, was not currently licensed to practice law, and was not in good standing with the State Bar of Texas and other applicable authorities. In deciding appellant's petition for discretionary review, the Supreme Court considered three issues: (1) whether the offense of falsely holding oneself out as a lawyer does not require an instruction as to a culpable mental state beyond the intent expressly prescribed by the plain language in that statute; (2) whether appellant was not entitled to an instruction on a mistake-of-fact defense because his requested instruction did not negate the culpability required for the offense; and (3) whether the appellate court properly determined that the trial court's instruction on the definition of "foreign legal consultant" was not an improper comment on the weight of the evidence. Finding no error, the Supreme Court affirmed. View "Celis v. Texas" on Justia Law

Petitioner served two terms as a Public Service Commissioner (PSC). While serving his first term at the PSC, Respondent, campaign manager for Petitioner's opponent in the upcoming election, filed four complaints against Petitioner with the Commissioner of Political Practices (Commissioner), alleging that Petitioner had violated the statutory Code of Ethics by accepting gifts of substantial value from two corporations with which the PSC regularly dealt and by using state resources to aid his reelection campaign and for personal business. Following a three-day hearing on Respondent's complaints, a hearing examiner determined that Petitioner violated Mont. Code Ann. 2-2-104 two times by receiving "gifts of substantial value" and violated Mont. Code Ann. 2-2-121 five times by using state facilities and equipment for election purposes. The Commissioner affirmed, ordering Petitioner to pay $5,750 in fines and $14,945 for the costs of the hearing. The district court affirmed. The Supreme Court affirmed, holding that the district court did not err by concluding (1) Respondent had legal standing to file ethics complaints against Petitioner; (2) Petitioner received unlawful gifts; (3) Petitioner improperly used State facilities for political purposes; and (4) the penalty statute for ethics violations was not unconstitutionally vague. View "Molnar v. Fox" on Justia Law

On May 25, 2011, Lassiter filed a complaint alleging Fourth Amendment violations for excessive force and false arrest. The complaint stated that the incident giving rise to Lassiter’s cause of action took place on May 22, 2009. On August 2, 2011, defendants filed an answer asserting six affirmative defenses, but did not raise the two-year statute of limitations as a defense. During a pretrial conference on September 20, 2011, without being prompted by either party, the district court observed that the statute of limitations appeared to have expired but that defendants failed to raise the issue in their answer. Defendants’ counsel acknowledged that they had missed this issue. The court suggested that defendants could amend their answer. On February 23, 2012, over Lassiter’s opposition, the court granted leave to amend the answer. On May 29, the court dismissed the complaint as time-barred. The Third Circuit affirmed, holding that the court had authority to raise the statute of limitations issue during the Rule 16 conference. View "Lassiter v. City of Philadelphia" on Justia Law