Justia Legal Ethics Opinion Summaries

Articles Posted in Idaho Supreme Court – Civil

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Appellant Michael Molen appealed the district court’s summary judgment dismissal of his legal malpractice action. The malpractice action stems from respondent Ronald Christian’s representation of Molen in a criminal case. The crux of this appeal was whether the statute of limitations on Molen’s malpractice cause of action accrued upon Molen’s initial criminal conviction or when Molen was later exonerated. After review, the Supreme Court held: (1) the statute of limitations for a legal malpractice action does not begin to run until the plaintiff has been exonerated of the underlying criminal conviction; and (2) actual innocence is not an element of a criminal malpractice cause of action. The Court vacated the district court’s summary judgment order and remanded the case for further proceedings. View "Molen v. Christian" on Justia Law

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Counsel for appellant Martin Frantz hired attorney Merlyn Clark as an expert witness in an unrelated matter in 2009. Clark was a partner with respondent law firm Hawley Troxell Ennis & Hawley LLP (“Hawley Troxell”). In 2010, Frantz’ creditor, Idaho Independent Bank, hired Hawley Troxell to represent it in a contract action against Frantz. In 2011, while that matter was pending, Frantz filed for bankruptcy. Hawley Troxell continued to represent the Bank as a creditor in the bankruptcy, including in an adversary proceeding the Bank filed against Frantz in 2013. Frantz alleged in the adversary proceeding that Clark’s interactions with Frantz in the 2009 matter created an attorney-client relationship and that it was therefore a conflict of interest for Clark’s firm to represent the Bank against Frantz. Frantz also alleged that Hawley Troxell improperly used confidential information Clark acquired in the 2009 matter. The bankruptcy court concluded that there was no attorney-client relationship between Clark (or Hawley Troxell) and Frantz. The adversary proceeding was later dismissed as moot. Frantz subsequently sued Hawley Troxell in Idaho district court, alleging legal malpractice and breach of fiduciary duty. The district court denied pro hac vice admission to attorney Jeffrey Katz, Frantz’ chosen counsel. The district court also dismissed the complaint on the grounds of judicial estoppel, lack of standing, and abatement. Finally, it awarded Hawley Troxell attorney fees under Idaho Code sections 12-120(3) and 12-121. Frantz appealed the denial of pro hac vice admission, the dismissal of his complaint, and the award of attorney fees. Finding no reversible error after review of the trial court record, the Supreme Court affirmed. View "Frantz v. Troxell" on Justia Law

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Vint Hughes and H-D Transport, an Idaho partnership, appealed the grant of summary judgment in favor of Michael Pogue and Lawson & Laski, PLLC (collectively Pogue) in a legal malpractice action. Hughes and H-D Transport brought suit against Pogue claiming that at various points starting in October 2011, until present, Pogue had an attorney-client relationship with both Hughes and H-D Transport. In August of 2011, Hughes and Andrew Diges entered into a 50-50 partnership, under the name H-D Transport, to haul hydraulic fracturing fluid. Disagreements arose between the partners concerning the operation and finances of the partnership. On October 21, 2011, Diges hired Pogue to draft a formal partnership agreement. Diges told Hughes that he had hired an attorney to prepare a partnership agreement, and about a month later Pogue, Hughes and Diane Barker, the partnership bookkeeper, participated in a conference call regarding the partnership. Despite the efforts to create a partnership agreement, Pogue, on behalf of Diges, sent Hughes a letter “regarding the problems and irregularities concerning the operation of H-D Transport, and to propose a wind-up of the business.” Pogue filed a complaint requesting declaratory relief, an accounting, and a dissolution of the partnership (the Dissolution Action). In the complaint, Pogue named H-D Transport and Diges as the plaintiffs and Hughes as the defendant. Following trial of the Dissolution Action, the district court entered findings of fact and conclusions of law which largely decided issues in Hughes’ favor. Diges was ordered to repay H-D transport more than $50,000, including $1,500 in partnership funds for legal fees paid to Pogue. Following trial, but prior to the district court’s decision in the Dissolution Action, Hughes and H-D Transport filed the present action naming Pogue and his firm as defendants, alleging two counts of professional negligence and breach of fiduciary duty and two counts of unreasonable restraint of trade under the Idaho Competition Act. The district court granted Pogue’s motion for summary judgment on all claims, concluding Hughes and H-D Transport failed to establish that an attorney-client relationship existed with Pogue. The Supreme Court found that it was unreasonable, under the facts of this case, for Hughes to believe he had an attorney-client relationship with Pogue. The Court therefore affirmed the district court judgment. View "H-D Transport v. Pogue" on Justia Law

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Plaintiff-appellant Patricia McKay appealed the grant of summary judgment in favor of Thomas Walker and Cosho Humphrey, LLP, in a legal malpractice action. McKay contended that Walker negligently drafted a property settlement agreement by failing to include provisions that would have resulted in a judgment lien against payments owed to her husband which were secured by a mortgage. The district court concluded that because a mortgage was personal property and not real property, the failure to include a description of the real property subject to the mortgage and the mortgage’s instrument number would not have resulted in the creation of a security interest. Based upon this legal conclusion, the district court held that Walker had not breached a duty to McKay and the alleged breach was not the proximate cause of any damages. McKay argued the district court erred in its conclusion. Finding no reversible error, the Supreme Court affirmed. View "McKay v. Walker" on Justia Law

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Justin S. Reynolds, Kristine Reynolds, and their construction company, Sunrise Development, LLC (Reynolds) brought a malpractice action against their law firm, Trout Jones Gledhill Fuhrman, P.A., and its attorney-employee, David T. Krueck. Reynolds alleged professional negligence in both the drafting of a real estate agreement between Reynolds and Quasar Development, LLC, and in the subsequent handling of the litigation regarding that agreement. The district court granted summary judgment in favor of Trout Jones, holding that the two-year statute of limitations found in Idaho Code section 5-219(4) applied to bar the action and Reynolds timely appealed. Upon review of the matter, the Supreme Court affirmed. View "Reynolds v. Trout, Jones, Gledhill, Fuhrman, P.A." on Justia Law

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The United States District Court for the District of Idaho certified a question of law to the State Supreme Court: whether a legal malpractice claim that is transferred to an assignee in a commercial transaction (along with other business assets and liabilities) is assignable under law. The issue stemmed from St. Luke's Magic Valley Regional Medical Center's purchase of Magic Valley Medical Center. Thomas Luciani and his law firm Stamper, Rubens, Stocker & Smith, P.S. represented Magic Valley in defending a wrongful termination and False Claims Act action brought by former hospital employees. After the sale of the medical center closed, Magic Valley no longer existed. The operation and management of the center was taken over by St. Luke's. St. Luke's then sued its former lawyer and law firm. The District Court noted that the assignability of a legal malpractice claim in the factual context presented had not yet been squarely addressed by the Idaho Supreme Court. Upon review, the Idaho Supreme Court answered the district court's question in the affirmative: although legal malpractice claims are generally not assignable in Idaho, where the legal malpractice claim is transferred to an assignee in a commercial transaction, along with other business assets and liabilities, such a claim is assignable. View "In re: St. Lukes Magic Valley RMC v. Luciani, et al." on Justia Law

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The Idaho Supreme Court was asked in a certified question of law from the United States District Court for the District of Idaho whether a legal malpractice claim that is transferred to an assignee in a commercial transaction, along with other business assets and liabilities, is assignable. The question arose from a a wrongful termination and False Claims Act action brought by former hospital employees against their employer. Magic Valley Medical Center was the entity being sued. Twin Falls County owned Magic Valley. Twin Falls County (on behalf of itself and Magic Valley), Twin Falls Health Initiatives Trust, Ltd. (TFHIT), and St. Luke’s Health System, Ltd., St. Luke’s Regional Medical Center, Ltd., and St. Luke’s Magic Valley Regional Medical Center (St. Luke's) entered into a Sale and Lease Agreement for the Creation of a New Health System (Agreement). The sale closed, and St. Luke's carried the burden of the employee litigation, ultimately settling with the plaintiffs. After the transaction closed, Magic Valley no longer existed. Though technically not a merger, the operation and management of the center was taken over by St. Luke's. St. Luke's then sued Magic Valley's former legal counsel for legal malpractice in connection with the employee litigation. The firm moved for summary judgment, arguing that St. Luke's could not pursue a malpractice claim because the purported assignment of such a claim was invalid in Idaho as a matter of law. Upon review, the Idaho Supreme Court answered the district court's certified question in the affirmative: although legal malpractice claims are generally not assignable in Idaho, where the legal malpractice claim is transferred to an assignee in a commercial transaction, along with other business assets and liabilities, such a claim is assignable. View "RE: Order Certifying Question - St. Lukes Magic Valley RMC v. Luciani, et al." on Justia Law

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Justin S. Reynolds, Kristine Reynolds, and their construction company, Sunrise Development, LLC (Reynolds) brought a malpractice action against their law firm, Trout Jones Gledhill Fuhrman, P.A., and its attorney-employee, David T. Krueck. Reynolds alleged professional negligence in both the drafting of a real estate agreement between Reynolds and Quasar Development, LLC, and in the subsequent handling of the litigation regarding that agreement. The district court granted summary judgment in favor of Trout Jones, holding that the two-year statute of limitations found in Idaho Code section 5-219(4) applied to bar the action and Reynolds timely appealed. Upon review of the matter, the Supreme Court affirmed. View "Reynolds v. Trout, Jones, Gledhill, Fuhrman, P.A." on Justia Law

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A jury returned a special verdict that: (a) awarded damages against an attorney and his girlfriend based upon the jury's finding that they had breached their fiduciary duties to a former client of the attorney by purchasing half of his stock in a closely held corporation for less than its fair market value; and (b) cancelled debts owing by the corporation to the attorney and his girlfriend based upon the jury's finding that they had breached their fiduciary duties to a shareholder, the former client's widow, by making loans to the corporation. The district court granted a new trial on the ground that there was insufficient evidence to justify the verdict, and this appeal followed. Finding sufficient evidence to support the jury's verdict, the Supreme Court affirmed the grant of a new trial. View "Berry v. McFarland" on Justia Law

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Patricia Shelton filed suit alleging breach of contract a legal malpractice against her former attorneys Defendants-Appellants R. Bruce Owens, Jeffrey Crandall, and Owens and Crandall, PLLC (Owens). During the pendency of her action, Ms. Shelton passed away. Plaintiff-Appellee Lois Bishop sought to assert Ms. Shelton's claims as her personal representative. Owens unsuccessfully argued that the legal malpractice claim abated upon Ms. Shelton's death, and that her breach of contract claim did not state a claim. Owens appealed. Because Patricia Shelton’s legal malpractice claim sounds in tort and abated upon her death, and her breach of contract claim fails to state a claim, the Supreme Court concluded the district court erred in denying Owens’s motion for summary judgment and in granting Bishop’s motion to substitute as plaintiff. View "Owen v. Bishop" on Justia Law