Justia Legal Ethics Opinion Summaries

The Sellers bought an Oakland property to “flip.” After Vega renovated the property, they sold it to Vera, providing required disclosures, stating they were not aware of any water intrusion, leaks from the sewer system or any pipes, work, or repairs that had been done without permits or not in compliance with building codes, or any material facts or defects that had not otherwise been disclosed. Vera’s own inspectors revealed several problems. The Sellers agreed to several repairs Escrow closed in December 2011, but the sewer line had not been corrected. In January 2012, water flooded the basement. The Sellers admitted that earlier sewer work had been completed without a permit and that Vega was unlicensed. In 2014, the exterior stairs began collapsing. Three years and three days after the close of escrow, Vera filed suit, alleging negligence, breach of warranty, breach of contract, fraud, and negligent misrepresentation. Based on the three-year limitations period for actions based on fraud or mistake, the court dismissed and, based on a clause in the purchase contract, granted SNL attorney’s fees, including fees related to a cross-complaint against Vera’s broker and real estate agent.The court of appeal affirmed. Vera’s breach of contract claim was based on fraud and the undisputed facts demonstrated Vera’s claims based on fraud accrued more than three years before she filed suit. Vera has not shown the court abused its discretion in awarding fees related to the cross-complaint. View "Vera v. REL-BC, LLC" on Justia Law

Linda and her husband Milton set up an estate plan with the help of attorney Roth. Milton created a trust and designated himself as sole trustee. Upon his death, Linda and his accountant, Sanders, would become cotrustees. Milton’s assets included a $1.5 million Vanguard account. Milton later changed the Vanguard account and other accounts to transfer on death directly to Linda as the sole primary beneficiary. Milton died in 2016. Linda believed that Roth was still her attorney. Roth and Sanders convinced Linda to waive her rights as co-trustee and to disclaim her interest in the Vanguard account; they suggested that she had acquired these interests through wrongdoing. Roth then transferred the disclaimed Vanguard account directly to Milton’s son, David, instead of to the trust. David sued Linda and obtained an Indiana state court judgment that she exerted undue influence on Milton and that the trust was the proper owner of certain assets Milton had transferred to Linda.Linda sued in federal court, asserting fraud, conspiracy, and malpractice against Roth and Sanders, claiming the two “duped” her into disclaiming certain assets and that Roth committed malpractice by transferring the account to David rather than the trust. The Seventh Circuit affirmed the dismissal of the suit; issue preclusion based on the Indiana judgment foreclosed Linda’s claims because the Indiana jury’s finding of undue influence showed that Roth and Sanders’s advice to disclaim her illegally-obtained interests was neither negligent nor fraudulent. View "Bergal v. Roth" on Justia Law

Fuston, Petway & French, LLP ("the Firm"), appealed the grant of summary judgment entered in favor of The Water Works Board of the City of Birmingham ("the Board") regarding the Board's termination of a contract between the parties. In September 2015, the Firm and the Board entered into a one-year contract in which the Firm agreed to provide legal representation for the Board. In 2016, the Firm and the Board entered into negotiations for a new contract. The chairman of the Board approached the Firm regarding the Board's need to have independent oversight and review of a program designed to attract "historically underutilized business entities" ("the HUB program"). Board meeting minutes at the end of 2016 reflected that the contract was approved. The contract between the Firm and the Board provided, in pertinent part, that the Firm would administer a Contract Compliance Program for the HUB program. Before the contract expired, the Board elected to terminate its contract with the Firm. The Firm sued for breach of contract and other theories. In its judgment, the trial court found, among other things, that the entirety of the Firm's obligations in the contract entailed legal services and that, as a result, the contract was terminable by the Board at any time. After review of the Firm's arguments appealing the trial court judgment, the Alabama Supreme Court found no reversible error and affirmed. View "Fuston, Petway & French, LLP v. Water Works Board of the City of Birmingham" on Justia Law

The Georgia Supreme Court granted certiorari to consider whether the Court of Appeals properly identified the accrual date of the legal malpractice claim in this case. The court determined that the accrual date for the malpractice action based on failure to protect an underinsured motorist (“UM”) claim was the date on which the plaintiff’s attorney first became aware that the plaintiff potentially had a UM claim with available coverage. Under the facts of this case, the Supreme Court disagreed, holding that the accrual date was the last day counsel could protect the client’s UM claim by lawfully effecting service on the UM carrier. View "Armstrong et al. v. Cuffie et al." on Justia Law

After plaintiff was injured from a slip and fall in a Home Depot parking lot, he filed suit against the store claiming that he sustained substantial injuries and alleging that his injuries required multiple surgeries, as well as physical and occupational therapy.The Seventh Circuit concluded that plaintiff's appeal is limited to the district court's denial of his second post-judgment motion filed under Rule 60(b). The court noted that, as a practical matter, that conclusion changes very little because plaintiff's appeal is all and only about whether the district court abused its discretion in dismissing his case for lack of prosecution. The court explained that the district court's denial of the Rule 60(b) motion effectively amounted to reinforcing and standing by its original dismissal decision. In this case, the court concluded that the district court acted well within its discretion dismissing plaintiff's suit where plaintiff's counsel missed many conferences. Because plaintiff chose counsel as his agent, he bears the consequences of counsel's actions. Accordingly, the court affirmed the district court's refusal to reopen the case. View "Krivak v. Home Depot U.S.A., Inc." on Justia Law

Brace, a farmer, owns hundreds of acres in Erie County, Pennsylvania. He cleared 30 acres of wetlands, draining it to grow crops. In 1994, the Third Circuit affirmed that Brace had violated the Clean Water Act. In 2012, Brade bought 14 additional acres of wetlands. Again, he engaged in clearing, excavation, and filling without required permits. During a second suit under the Act, Brace’s counsel submitted perfunctory pleadings and failed to cooperate in discovery, repeatedly extending and missing deadlines. Counsel submitted over-length briefs smuggling in extra-record materials. The court repeatedly struck Brace’s materials but generally chose leniency. Eventually, the court struck Brace’s opposition to summary judgment after analyzing the “Poulis factors,” then granted the government summary judgment on liability, holding that Brace had violated the Act. The court ordered Brace to submit a proposed deed restriction and restoration plan.The Third Circuit rejected Brace’s appeal. While “it stretches credulity [to believe that Brace had] no idea how counsel [wa]s conducting this case,” the court gave Brace the benefit of the doubt. Brace’s lawyer’s misconduct forced the government to waste time and money “deciphering incomprehensible pleadings, scouring through noncompliant briefs, and moving again and again for compliance" to no avail. Counsel acted in bad faith; repeated orders to show cause, warnings, and threats of sanctions did not deter counsel’s chronic misbehavior. The sanction “was hardly an abuse of discretion.” View "United States v. Brace" on Justia Law

The Law Offices of Jeffrey Sherbow, PC, brought an action against Fieger & Fieger, PC (the Fieger firm), asserting that the Fieger firm breached its referral- fee contract with plaintiff when the Fieger firm refused to pay plaintiff 20% of a contingent fee that the Fieger firm had received after it successfully represented several clients in a personal- injury and no-fault action related to an automobile accident in Ohio. The primary question in this case was whether, in order to enforce a fee- splitting agreement, MRPC 1.5(e) required the referring attorney to have an attorney-client relationship with the individual he or she refers. The Michigan Supreme Court held that it does but that the relationship could be limited to the act of advising the individual to seek the services of the other attorney if the referring attorney and client expressly or impliedly demonstrate their intent to enter into a professional relationship for this purpose. Consequently, the Court reversed the Court of Appeals’ judgment to the extent that it held to the contrary. The Supreme Court agreed with the appellate court, however, that the defendant bore the burden of proving noncompliance with MRPC 1.5(e) when the defendant raised the violation of the rule as a defense against enforcement of the referral agreement. The result in this case was that the trial court properly instructed the jury that an attorney-client relationship was required but erroneously instructed the jury about the burden of proof. This error required a new trial as to only one of the potential clients at issue. View "Law Offices of Jeffrey Sherbow v. Fieger & Fieger, PC" on Justia Law

After a jury awarded plaintiff $16 in unpaid minimum wages and $16 in liquidated damages and found against her on causes of action alleging she had been raped by her employer, the trial court determined that plaintiff was the prevailing party for purposes of Code of Civil Procedure section 1032 and awarded her $19,523 in costs, as well as $3.20 in attorney fees based on the formula in section 1031 that multiples the wages recovered by 20 percent.In the published portion of the opinion, the Court of Appeal concluded that, in this case where plaintiff lost all of the California Fair Employment and Housing Act (FEHA) claims, lost some non-FEHA claims, and prevailed on some non-FEHA claims, the award of costs is governed by the interaction of section 1032 and Government Code section 12965, subdivision (b). The court concluded that section 12965, subdivision (b) bars plaintiff from recovering the costs caused solely by the inclusion of the FEHA causes of action in this lawsuit. Furthermore, the other costs incurred in the lawsuit are recoverable under section 1032, subject to the discretionary exception in section 1033, subdivision (a). The court directed the trial court on remand to determine which cost items, if any, are barred by section 12965, subdivision (b) before entering an award in accordance with sections 1032 and 1033.The court also concluded that the parties' dispute over attorney fees requires an interpretation of section 1031 and Labor Code section 1194. The court explained that the literal terms of these attorney fees provisions cover this case because of the recovery of minimum wages. In situations where these statutes overlap, the court concluded that section 1194 controls because it is the more specific statute and its attorney fees provision is the most recently enacted. Therefore, the trial court court should have exercised the discretion granted by section 1194 and awarded plaintiff reasonable attorney fees, rather than applying section 1031 and awarding 20 percent of the wages recovered. The court remanded for reasonable attorney fees. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings on the issues of attorney fees and costs. View "Moreno v. Bassi" on Justia Law

Three clients filed separate discrimination cases, which were consolidated for discovery. The defendants obtained summary judgment. The clients filed a notice of appeal, then hired Paddick, who entered into a contingency fee agreement with each client, providing that Paddick would serve as counsel on remand and promising Paddick a 40 percent fee of any trial or settlement proceeds. Paddick prevailed in the appeal, then took 24 depositions, presented two oral arguments, attended two settlement conferences, and filed nine substantive motions or responses. When it came time to retain an expert witness, Paddick was unable to advance the necessary funds. The clients terminated their relationship with Paddick and retained Thompson to pursue their claims for a 35 percent contingent fee. Paddick informed Thompson of his work, noting that “fees remain due.” Thompson did not respond. The case settled for $380,000; Thompson’s share was $133,000. The district court acknowledged the settlements and dismissed the cases.A month later, Paddick successfully moved to intervene to enforce an attorney’s charging lien against the settlement proceeds. The Third Circuit affirmed an order that Thompson pay Paddick $54,562.73 from Thompson’s portion of the recovery. The district court had ancillary enforcement jurisdiction to resolve Paddick’s lien motion. The clients did not produce clear and convincing evidence of duress; imperfect representation does not necessarily bar Paddick from recovery. A client “should never be made to pay twice.” View "Butt v. United Brotherhood of Carpenters & Joiners of America" on Justia Law

The Orlans law firm, sent a letter on law-firm letterhead, stating that Wells Fargo had referred the Garland loan to Orlans for foreclosure but that “[w]hile the foreclosure process ha[d] begun,” “foreclosure prevention alternatives” might still be available if Garland contacted Wells Fargo. The letter explained how to contact Wells Fargo “to attempt to be reviewed for possible alternatives,” the signature was typed and said, “Orlans PC.”Garland says that the letter confused him because he was unsure if it was from an attorney and “raised [his] anxiety” by suggesting “that an attorney may have conducted an independent investigation and substantive legal review ... such that his prospects for avoiding foreclosure were diminished.” Garland alleges that Orlans sent a form of this letter to thousands of homeowners, without a meaningful review of the homeowners’ foreclosure files, so the communications deceptively implied they were from an attorney. The Fair Debt Collection Practices Act (FDCPA) prohibits misleading debt-collection communications that falsely imply they are from an attorney.The Sixth Circuit affirmed the dismissal of the purported class action for lack of jurisdiction. Garland lacks standing. That a statute purports to create a cause of action does not alone create standing. A plaintiff asserting a procedural claim must have suffered a concrete injury; bare allegations of confusion and anxiety do not qualify. Whether from an attorney or not, the letter said nothing implying Garland’s chance of avoiding foreclosure was “diminished.” View "Garland v. Orlans, PC" on Justia Law