Justia Legal Ethics Opinion Summaries

Chase sued to recover millions of dollars under a credit agreement "between Chase and entities owned and operated by [Winget]” and obtained an award of over $425 million. Winget’s personal trust was liable for the full amount. Winget, protected by a limitation in his personal guaranty, owed Chase only $50 million, which he paid. The parties then litigated attorneys’ fees and whether Winget was personally liable for Chase’s $12.6 million in fees and expenses. The Sixth Circuit held that despite Winget’s limited personal guaranty, he “is still liable for Chase’s costs and expenses associated with collection of the Guaranteed Obligation.” The district court then entered a final amended judgment against Winget and his trust. Rather than use the trust’s assets to pay Chase, Winget transferred the assets out of his trust and filed a new lawsuit, seeking a declaration that Chase had no recourse against those assets. Chase filed counterclaims, alleging that the transfers were fraudulent conveyances. The district court consolidated the new lawsuit with the previous litigation, calling it “the functional equivalent of post-judgment proceedings,” and granted one motion, awarding Chase another $2 million for expenses from June 2015 through November 2016. The court noted that “Chase’s efforts to collect the Guaranteed Obligations are ongoing.” The Sixth Circuit dismissed an appeal for lack of jurisdiction, reasoning that the order is not a “final decision” under 28 U.S.C. 1291. View "JPMorgan Chase Bank, N.A. v. Winget" on Justia Law

David Calvert was disbarred for various ethical violations, including entering into an oral agreement with a client without complying with the requisite safeguards of Colorado Rule of Professional Conduct 1.8(a). After being disbarred, Calvert sued his former client, Diane Mayberry, for breach of that same oral agreement, claiming that there was a contract between them. The trial court granted Mayberry’s motion for summary judgment, and the court of appeals affirmed. On appeal to the Colorado Supreme Court, Calvert challenged: (1) whether an attorney who was found to have violated Rule 1.8(a) in a disciplinary proceeding was estopped from relitigating the same factual issues in a civil proceeding; (2) whether a contract between an attorney and a client entered into in violation of Rule 1.8(a) was enforceable; and (3) whether the trial court abused its discretion in awarding attorney’s fees against Calvert after finding his lawsuit groundless and frivolous. The Colorado Supreme Court declined the issue preclusion issue raised because Calvert conceded he could not relitigate whether he entered into an agreement with a client without meeting Rule 1.8(a)’s requirements. The Court held that when an attorney enters into a contract without complying with Rule 1.8(a), the contract was presumptively void as against public policy; however, a lawyer may rebut that presumption by showing that, under the circumstances, the contract does not contravene the public policy underlying Rule 1.8(a). Further, the Court held the trial court did not abuse its discretion in awarding attorney’s fees at the trial level because the record supported the finding that the case was groundless, frivolous, and brought in bad faith. But as to attorney’s fees at the appellate level, because the questions of whether issue preclusion applied in this proceeding and whether a contract made in violation of Rule 1.8(a) is void as against public policy were legitimately appealable issues, thereby making a grant of appellate attorney’s fees inappropriate. Therefore, the Supreme Court affirmed the court of appeals as to the merits on other grounds, affirmed the award of attorney’s fees at the trial level, and reversed the court of appeals’ order remanding for a determination of appellate attorney’s fees. View "Calvert v. Mayberry" on Justia Law

In July 2012, Maguire, represented by attorney Bornstein, brought an unlawful detainer action against Connelly. In September 2012, Maguire voluntarily dismissed the unlawful detainer action. On September 16, 2014, Connelly sued Maguire and Bornstein for malicious prosecution, alleging the two “actively were involved in brin[g]ing and maintaining” the unlawful detainer action, which ended in appellant’s favor; “no reasonable person in [Maguire and Bornstein’s] circumstances would have believed that there were reasonable grounds” to bring and/or maintain the action; and Maguire and Bornstein “acted primarily for a purpose other than succeeding on the merits” of the action. The trial court dismissed, citing the one-year statute of limitations in Code of Civil Procedure section 340.6(a), governing “[a]n action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services.” The court of appeal affirmed, recognizing that finding section 340.6(a) applicable to malicious prosecution claims against attorneys will result in a one-year statute of limitations for such claims, while a two-year statute of limitations will apply to malicious prosecution claims against litigants. View "Connelly v. Bornstein" on Justia Law

After Brown Sims, a Houston law firm, successfully obtained a favorable result for its client, AJR, the client colluded with the opposing party, CNA and its attorneys, to consummate a settlement just between themselves. After settlement, the district court dismissed the case as moot.The Fifth Circuit held that the district court had subject matter jurisdiction over Brown Sims's claims against CNA. The court also held that Brown Sims met all of Federal Rule of Civil Procedure 24's criterion for intervention as of right and the district court erred in concluding otherwise. Furthermore, the district court erred in denying the Rule 60(b)(5) and (b)(6) motions. Accordingly, the court reversed in part, vacated in part, and remanded for further consideration. View "Adam Joseph Resources v. CNA Metals Limited" on Justia Law

A district court ordered Jackson National Life to pay about $191,000 on a policy of life insurance. The court added that the insurer had litigated unreasonably and ordered it to reimburse Cooke’s legal fees under 215 ILCS 5/155. The insurer paid the death benefit and appealed the attorneys’ fees. Because the district court had not specified the amount, the Seventh Circuit dismissed the appeal as premature. The district court then awarded $42,835 plus interest. The district judge concluded that there had been a good faith coverage dispute, so the insurer could not be penalized for insisting that a judge resolve the parties’ dispute, but added, “Jackson’s behavior in this litigation has been much less reasonable.” The Seventh Circuit reversed, first rejecting Cooke’s appeal on the merits award. Cooke did not appeal within 30 days of the order specifying the amount payable on the policy, and a later award of fees did not reopen that subject. The court erred in applying Illinois state law to the conduct of litigation in federal court and Jackson’s litigation conduct did not violate the Federal Rules of Civil Procedure. View "Cooke v. Jackson National Life Insurance Co." on Justia Law

The Second Circuit affirmed the district court's order enjoining Reed Smith's action for tortious interference and unjust enrichment in New York state court against Wohl & Fruchter, in a dispute arising from the two firms' concurrent representation of the plaintiff class in the now-settled litigation. The court held that the district court had ancillary jurisdiction over the motion to stay the state court proceedings; the district court properly declined to abstain from exercising jurisdiction where all six factors in Woodford v. Cmty. Action Agency of Green Cty., Inc., 239 F.3d 517, 522 (2d Cir. 2001), favored retaining jurisdiction; the injunction was proper under the Anti-Injunction Act where the district court properly issued the injunction to prevent Reed Smith from relitigating the terms of the Fee Order; and Wohl & Fruchter's cross appeal was procedurally untenable. View "Kaplan v. Reed Smith LLP" on Justia Law

Plaintiffs were all former members of the Fundamentalist Church of Jesus Christ of Latter-Day Saints (“FLDS”), which illegally practiced polygamy. In 2016, plaintiffs filed suit against the FLDS Prophet, Warren Jeffs, and Jeff’s lawyers, the law firm of Snow Christensen & Martineau (“SC&M”) and one of its partners, Rodney Parker, alleging defendants: (1) directly worked with Jeffs to create a legal framework that would shield him from the legal ramifications of child rape, forced labor, extortion, and the causing of emotional distress by separating families; (2) created an illusion of legality to bring about plaintiffs’ submission to these abuses and employed various legal instruments and judicial processes to knowingly facilitate the abuse; (3) held themselves out to be the lawyers of each FLDS member individually, thus creating a duty to them to disclose this illegal scheme; and (4) intentionally misused these attorney-client relationships to enable Jeffs’ dominion and criminal enterprise. Jeffs defaulted, and the district court dismissed every cause of action against the remaining defendants under Fed. R. Civ. P. 12(b)(6). The issue before the Tenth Circuit Court of Appeals stemmed from the district court’s dismissal of all claims against SC&M and Parker (collectively “defendants”). Reviewing the facts in the light most favorable to plaintiffs, the Court affirmed in part and reversed in part. For fifteen plaintiffs who brought legal malpractice and breach of fiduciary duty claims, the Court determined they pled facts sufficient to survive a motion to dismiss: a factual question remained for each of these plaintiffs regarding whether (and how long) equitable tolling applies to their limitations periods, and whether individual implied attorney-client relationships existed. Twelve plaintiffs pled facts sufficient to survive dismissal of their fraudulent and negligent misrepresentation claims, again, there was a factual question regarding when they discovered their claims, thereby starting the running of the statutory period, and whether an implied attorney-client relationship existed. Civil RICO claims were deemed forfeited as inadequately presented in plaintiffs’ opening brief. With respect to TVPRA claims, nine plaintiffs pled facts sufficient to pass muster under the plausibility standard and thus survived dismissal. View "Bistline v. Jeffs" on Justia Law

In 2005, Evangelos Dimitrakopoulos retained the law firm of Borrus, Goldin, Foley, Vignuolo, Hyman and Stahl, P.C. ("Borrus firm"), for help with a business dispute with Steven Eleftheriou. Represented by the Borrus firm, Dimitrakopoulos and his wife filed a complaint against Eleftheriou and his wife. For undisclosed reasons, the Borrus firm filed a motion to withdraw as counsel shortly after it was retained. Days later, the Borrus firm filed a complaint against Dimitrakopoulos, alleging that its former client owed it $93,811.95 in fees for legal services and that payment had been demanded and not made. Dimitrakopoulos, acting pro se, filed an answer to the collection complaint but filed no counterclaim or third-party claim. In a proceeding before an arbitrator six months after the collection action was filed, the Dimitrakopouloses and the Eleftherious settled their dispute. In light of the settlement, the arbitrator did not issue an award. Months later, the court in the collection matter granted the Borrus firm’s unopposed motion for a final judgment by default in the amount of $121,947.99 for legal services, interest, attorneys’ fees, and court costs. Dimitrakopoulos did not appeal. A total of sixteen months elapsed between the filing of the Borrus firm’s collection action and the entry of the default judgment in that action. After the resolution of the business dispute between the Dimitrakopouloses and the Eleftherious, the collection action remained pending for an additional ten months. On September 10, 2015, approximately three years after the entry of judgment in the collection action, the Dimitrakopouloses sued the Borrus firm and the principal attorneys who worked on their matter for legal malpractice. Defendants moved to dismiss the complaint based on the "entire controversy" doctrine and the doctrine of waiver. The Dimitrakopouloses argued that the damages claimed in the malpractice action were known to them as of September 6, 2011, the day that they settled their dispute with the Eleftherious. The trial court concluded that the Dimitrakopouloses could have asserted their malpractice claim in the collection matter. An Appellate Division panel affirmed that judgment and stated that under Olds v. Donnelly, 150 N.J. 424 (1997), legal malpractice claims were exempt from the entire controversy doctrine to the extent that they need not be asserted in the underlying action. The New Jersey Supreme Court concluded the collection action at issue in this matter was not an “underlying action” as that term was used in Olds, and that the entire controversy doctrine could bar the claim. The record of this appeal, however, was inadequate for an application of the equitable rules that governed here. The Court therefore reversed the Appellate Division, and remanded the case for further proceedings. View "Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman and Stahl, P.C." on Justia Law

A jury awarded Oracle damages after finding that Rimini had infringed Oracle copyrights. The court awarded Oracle fees and costs, including $12.8 million for litigation expenses such as expert witnesses, e-discovery, and jury consulting. The Ninth Circuit affirmed, acknowledging that the award covered expenses not included within the six categories of costs identified in 28 U.S.C. 1821 and 1920, and citing the Copyright Act, which gives district courts discretion to award “full costs” to a party in copyright litigation, 17 U.S.C. 505. A unanimous Supreme Court reversed in part. The term “full costs” in the Copyright Act means costs specified in the general costs statute (sections 1821 and 1920), which defines what the term “costs” encompasses in subject-specific federal statutes such as section 505. Courts may not award litigation expenses that are not specified in sections 1821 and 1920 absent explicit authority. The Copyright Act does not explicitly authorize the award of litigation expenses beyond the six categories; the six categories do not authorize an award for expenses such as expert witness fees, e-discovery expenses, and jury consultant fees. Oracle has not shown that the phrase “full costs” had an established legal meaning that covered more than the full amount of the costs listed in the applicable costs schedule. View "Rimini Street, Inc. v. Oracle USA, Inc." on Justia Law

Following the termination of his employment, plaintiff Fernando Martinez sued Stephen Stratton O’Hara (O’Hara), Career Solution and Candidate Acquisitions (CSCA), O’Hara Family Trust, OCRE, Inc., Professional Realty Council, Inc., and Pacific Valley Realty, Inc. (collectively, defendants) alleging five employment-related claims. Plaintiff’s wage claim was resolved before trial and his fraud claim was dismissed when the trial court granted defendants’ motion for nonsuit. A jury returned a verdict awarding a total of $8,080 in damages on the claim for sexual harassment in violation of the California Fair Employment and Housing Act (FEHA). Following a bench trial of plaintiff’s remaining claims seeking an injunction for unfair advertising and unfair business practices, the trial court found in favor of defendants. Plaintiff moved for attorney fees, which was denied. Plaintiff appealed the fee order, but the Court of Appeal affirmed. The Court reported plaintiff’s attorney Benjamin Pavone to the California State Bar for manifesting gender bias: the notice of appeal signed by Mr. Pavone on behalf of plaintiff referred to the ruling of the female judicial officer as “succubustic.” The Court published this portion of the opinion to make the point that gender bias by an attorney appearing before the Court would not be tolerated. Furthermore, the attorney was reported to the Bar for a statement in the notice of appeal suggesting the trial court attempted to thwart service of the signed judgment on plaintiff in an effort to evade appellate review and statements in the appellate briefs he signed on behalf of plaintiff accusing the judicial officer who ruled on the motion for attorney fees of intentionally refusing to follow the law. None of these serious charges was supported by any evidence. View "Martinez v. O'Hara" on Justia Law