Justia Professional Malpractice & Ethics Opinion Summaries

This case was a class action brought on behalf of the former shareholders of Alloy, challenging a going-private transaction (Merger) that cashed out the company's public shareholders for allegedly inadequate consideration. Although the shareholders voted to approve the Merger, two of Alloy's nine directors retained their senior management positions at and received an equity interest in the now privately-held company. The former shareholders claimed that those two directors thus unfairly extracted for themselves an opportunity to share in Alloy's continued growth without offering the same opportunity to the public shareholders. Regarding the alleged breaches of fiduciary duty by the directors in negotiating and approving the Merger, the court found that the complaint failed to state a claim for damages. The court also found that the complaint failed to allege sufficient facts to support an inference that the alleged disclosure violations were the product of anything other than good faith omissions by the directors who authorized them. Because of the exculpatory provision of Alloy's certificate of incorporation, the complaint thus failed to state a claim for damages against the Alloy directors for beach of their duty of disclosure. Finally, the court also dismissed the claims for aiding and abetting against defendants who were not affiliated with Alloy. Therefore, the court granted defendants' motions to dismiss in all respects. View "In re Alloy, Inc. Shareholder Litigation" on Justia Law

This matter arose from a recommendation of the Judiciary Commission of Louisiana (Commission) regarding Justice of the Peace Tina Revette LaGrange's failure to comply with the financial disclosure requirements of Louisiana Supreme Court Rule XXXIX. The Commission found that Justice of the Peace LaGrange failed to file her 2009 personal financial disclosure statement timely, thereby subjecting her to a monetary penalty. The Commission determined Justice of the Peace LaGrange acted willfully and knowingly in failing to comply with the financial disclosure rule and recommended that she be ordered to pay a penalty and reimburse the Commission for costs. Following the Supreme Court's precedent, the Commission filed an amended recommendation, recommending penalties be limited to $200.00, with no request for reimbursement of costs. After review, the Supreme Court found that the record supported the Commission’s finding that Justice of the Peace LaGrange acted willfully and knowingly in failing to file the financial disclosure statement. Justice of the Peace LaGrange was thereafter ordered to pay a civil penalty in the amount of $500.00. View "In re: Justice of the Peace Tina LaGrange" on Justia Law

This matter arose from a recommendation of the Judiciary Commission of Louisiana (Commission) regarding Justice of the Peace Thomas Threet’s failure to comply with the financial disclosure requirements of Louisiana Supreme Court Rule XXXIX. The Commission found that Justice of the Peace Threet failed to file his 2009 personal financial disclosure statement timely, thereby subjecting him to a monetary penalty. The Commission determined Justice of the Peace Threet acted willfully and knowingly in failing to comply with the financial disclosure rule and recommended that he be ordered to pay a penalty and to reimburse the Commission for costs. Following the Supreme Court's precedent, the Commission filed an amended recommendation, recommending penalties be limited to $200.00, with no request for reimbursement of costs. After review, the Supreme Court found that the record supported the Commission’s finding that Justice of the Peace Threet acted willfully and knowingly in failing to file the financial disclosure statement. Justice of the Peace Threet was thereafter ordered to pay a civil penalty in the amount of $300.00. View "In re: Justice of the Peace Thomas Threet" on Justia Law

This matter arose from a recommendation of the Judiciary Commission of Louisiana (Commission) regarding Justice of the Peace Stacie P. Myers’ failure to comply with the financial disclosure requirements of Louisiana Supreme Court Rule XXXIX. The Commission found that Justice of the Peace Myers failed to file her 2009 personal financial disclosure statement timely, thereby subjecting her to a monetary penalty. The Commission determined Justice of the Peace Myers acted willfully and knowingly in failing to comply with the financial disclosure rule and recommended that she be ordered to pay the penalty and reimburse the Commission for costs. Following the Supreme Court's precedent, the Commission filed an amended recommendation, recommending penalties be limited to $200.00, with no request for reimbursement of costs. After review, the Supreme Court found that the record supported the Commission’s finding that Justice of the Peace Myers acted willfully and knowingly in failing to file the financial disclosure statement. Justice of the Peace Myers was thereafter ordered to pay a civil penalty in the amount of $500.00. View "In re: Justice of the Peace Stacie Myers " on Justia Law

This matter arose from a recommendation of the Judiciary Commission of Louisiana (Commission) regarding Justice of the Peace David E. Cook's failure to comply with the financial disclosure requirements of Louisiana Supreme Court Rule XXXIX. The Commission found that Justice of the Peace Cook failed to file his 2009 personal financial disclosure statement timely, thereby subjecting him to a monetary penalty. The Commission determined Justice of the Peace Cook acted willfully and knowingly in failing to comply with the financial disclosure rule and recommended that he be ordered to pay the penalty and reimburse the Commission for costs. Following the Supreme Court's precedent, the Commission filed an amended recommendation, recommending penalties be limited to $200.00, with no request for reimbursement of costs. After review, the Supreme Court found that the record supported the Commission’s finding that Justice of the Peace Cook acted willfully and knowingly in failing to file the financial disclosure statement. Justice of the Peace Cook was thereafter ordered to pay a civil penalty in the amount of $200.00. View "In re: Justice of the Peace David Cook" on Justia Law

This case involved a legal malpractice claim brought by Plaintiff MB Industries, LLC (MBI) against attorneys Steven Durio and John Weinstein. The attorneys represented MBI in an ultimately unsuccessful lawsuit against former MBI employees. Rather than appeal the unfavorable judgment, MBI chose to sue its former attorneys. The issues before the Supreme Court were: (1) whether a party's failure to appeal an underlying judgment waived any right to bring a legal malpractice claim based on that judgment; and (2) whether summary judgment was properly granted in light of MBI's failure to introduce expert testimony to establish the applicable standard of care which would have demonstrated the attorneys' actions fell below that standard. After careful review, the Court found that Louisiana law does not impose a "per se" rule requiring an appeal before a client can sue his former attorney. Furthermore, the Court found that a party alleging legal malpractice must introduce expert testimony to establish a standard of care "except in those rare cases involving malpractice so egregious that a lay jury could infer the defendant's actions fell below any reasonable standard." The Court found that under the particular facts of this case, there were no genuine issues of material fact, and that MBI failed to establish it could satisfy its evidentiary burden of proof at trial. The attorneys were entitled to judgment as a matter of law. Accordingly, the Court reversed the appellate court and reinstated the trial court's original judgment in favor of the attorneys. View " MB Industries, LLC v. CNA Insurance Co." on Justia Law

Plaintiffs appealed from a decision granting defendants' motion to dismiss plaintiffs' complaints for failure to state a claim upon which relief could be granted. Plaintiffs, participants in two retirement plans offered by defendants, brought suit alleging breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. Plaintiff alleged that defendants acted imprudently by including employer stock as an investment option in the retirement plans and that defendants failed to provide adequate and truthful information to participants regarding the status of employer stock. The court held that the facts alleged by plaintiffs were, even if proven, insufficient to establish that defendants abused their discretion by continuing to offer plan participants the opportunity to invest in McGraw-Hill stock. The court also held that plaintiffs have not alleged facts sufficient to prove that defendants made any statements, while acting in a fiduciary capacity, that they knew to be false. Accordingly, the judgment was affirmed. View "Gearren, et al. v. The McGraw-Hill Companies, Inc., et al." on Justia Law

Plaintiffs, participants in retirement plans offered by defendants and covered by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., appealed from a judgment dismissing their ERISA class action complaint. Plan documents required that a stock fund consisting primarily of Citigroup common stock be offered among the plan's investment options. Plaintiffs argued that because Citigroup stock became an imprudent investment, defendants should have limited plan participants' ability to invest in it. The court held that plan fiduciaries' decision to continue offering participants the opportunity to invest in Citigroup stock should be reviewed for an abuse of discretion and the court found that they did not abuse their discretion here. The court also held that defendants did not have an affirmative duty to disclose to plan participants nonpublic information regarding the expected performance of Citigroup stock and that the complaint did not sufficiently allege that defendants, in their fiduciary capacities, made any knowing misstatements regarding Citigroup stock. Accordingly, the court affirmed the judgment. View "Gray, et al. v. Citigroup, Inc., et al." on Justia Law

Plaintiff Terrance White appealed a superior court's order in his wrongful death action that granted summary judgment to Defendant Fletcher Allen Health Care, Inc. This case arose from the suicide of Plaintiff's fourteen-year-old daughter. Plaintiff sued Defendant, which employed a psychiatrist who was briefly involved with the decedent's case through a telepsychiatry research study. Plaintiff argued that summary judgment was improperly granted on the issue of the duty owed to decedent by the psychiatrist. Ultimately, the trial court found that the psychiatrist's contact with decedent was "so minimal as to not establish a physician-patient relationship," and consequently found that no duty existed at the time of decedent's death. Even assuming that a doctor-patient relationship was established, the court concluded that it was terminated following the video-conference and, thus, any duty was extinguished by termination of the relationship and no duty existed at the time of decedent's death. The court thus granted defendant's summary judgment motion. Plaintiff argued that the court erred in finding that the doctor owed no duty to decedent. They maintained that the doctor had a duty to exercise reasonable care to protect decedent from the danger she posed to herself, and that the doctor did not effectively terminate the doctor-patient relationship prior to decedent's death. Upon review, the Supreme Court agreed with Plaintiff and thus reversed the trial court's decision and remanded the case for additional proceedings. View "White v. Harris" on Justia Law

Respondent Deborah Spence alleged that attorney Kenneth Wingate breached a fiduciary duty to her as a former client in its handling of her late husband's life insurance policy. Mr. Spence was a member of United States House of Representatives, and he held a life insurance policy.  Mr. Spence named Mrs. Spence and his four sons from a prior marriage as the beneficiaries of the policy, with all five to receive equal shares of the proceeds. Wingate undertook representation of Mrs. Spence with regards to the assets of her husband, her inheritance rights, and her rights in his estate.  Wingate advised Mrs. Spence that she was entitled to nothing from her husband's estate and that she was barred from receiving an elective share by a prenuptial agreement. Wingate advised Mrs. Spence to enter into an agreement with the four adult sons of Mr. Spence to create a trust to provide her with a lifetime income stream. The trust was to be created and funded from one-third of the value of Mr. Spence's probate estate. Mrs. Spence thereafter came to believe that the amount she received under the agreement negotiated by Wingate was much less than what she was entitled to under the will and its codicil or if she had opted for an elective share. Mrs. Spence thereafter brought a lawsuit to set aside the agreement creating the trust. The agreement was eventually set aside. The circuit court granted partial summary judgment in favor of Wingate and found that, "[b]y statute, [Wingate] owed no duty or obligation to [Mrs. Spence] in connection with the congressional life insurance policy or the manner in which it was paid." The Court of Appeals reversed the grant of summary judgment to Wingate and remanded the matter for trial. Upon review, the Supreme Court concluded Wingate owed a fiduciary duty to Mrs. Spence: "[t]his duty included, among other obligations, the obligation not to act in a manner adverse to her interests in matters substantially related to the prior representation.  … we uphold the decision of the Court of Appeals to reverse the grant of summary judgment and remand this matter for trial.  To the extent the Court of Appeals indicated whether a duty was owed was a question of fact for the jury, the decision is modified to recognize that whether a fiduciary relationship exists between two classes of persons is a matter to be determined by a court." View "Spence v. Wingate" on Justia Law