Justia Legal Ethics Opinion Summaries

Jaworski provided construction services to Master Hand, an Illinois general contractor, over several years. Some of these services went unpaid. Jaworski alleged violations of the federal Fair Labor Standards Act, the Illinois Minimum Wage Law, the Illinois Wage Payment and Collection Act, and the Employee Classification Act, which makes it unlawful for construction firms to misclassify an employee as an independent contractor. The Classification Act presumes that the complainant is an employee unless the contractor proves otherwise; a misclassified employee is entitled to double “the amount of any wages, salary, employment benefits, or other compensation denied or lost to the person by reason of the violation.” The judge held that Master Hand had misclassified Jaworski and was entitled to the compensation guaranteed by the Minimum Wage Law and Wage Payment and Collection Act without having to prove that he is an employee. Those statutes do not include the presumption that plaintiffs are employees. The judge rejected Master Hand’s insolvency defense and ordered Master Hand to pay $200,000 in damages, plus $150,000 in attorneys’ fees. The Seventh Circuit affirmed, adding attorneys’ fees for the frivolous appeal. The court declined to review the rulings challenged by Master Hand, as a sanction for failure to follow court rules. View "Jaworski v. Master Hand Contractors, Inc." on Justia Law

Jaworski provided construction services to Master Hand, an Illinois general contractor, over several years. Some of these services went unpaid. Jaworski alleged violations of the federal Fair Labor Standards Act, the Illinois Minimum Wage Law, the Illinois Wage Payment and Collection Act, and the Employee Classification Act, which makes it unlawful for construction firms to misclassify an employee as an independent contractor. The Classification Act presumes that the complainant is an employee unless the contractor proves otherwise; a misclassified employee is entitled to double “the amount of any wages, salary, employment benefits, or other compensation denied or lost to the person by reason of the violation.” The judge held that Master Hand had misclassified Jaworski and was entitled to the compensation guaranteed by the Minimum Wage Law and Wage Payment and Collection Act without having to prove that he is an employee. Those statutes do not include the presumption that plaintiffs are employees. The judge rejected Master Hand’s insolvency defense and ordered Master Hand to pay $200,000 in damages, plus $150,000 in attorneys’ fees. The Seventh Circuit affirmed, adding attorneys’ fees for the frivolous appeal. The court declined to review the rulings challenged by Master Hand, as a sanction for failure to follow court rules. View "Jaworski v. Master Hand Contractors, Inc." on Justia Law

The district court ordered Jackson to pay Cooke the death benefit on her husband’s life insurance policy and to reimburse Cooke’s legal expenses. The court concluded that her husband died before the end of a grace period allowed for late premium payments and that Jackson should have expedited the litigation by attaching documents to its answer and by making some arguments sooner. The court’s order granted Cooke summary judgment but stated: This case is hereby dismissed with prejudice. The Seventh Circuit dismissed an appeal for lack of jurisdiction under the final-decision rule, 28 U.S.C. 1291. The order is contradictory and does not provide relief. It states that a motion has been granted and an award made, but it does not say who is entitled to what; it “transgresses almost every rule applicable to judgments.” A second document avoided the internal contradiction but lacked vital details and the judge’s signature. The court later entered an order specifying that Jackson must pay $191,362.06 on the insurance policy, plus 10% per annum simple interest, which Jackson paid, but did not specify the amount of attorneys’ fees. A declaration of liability, including an award of attorneys' fees, lacking an amount due is not final and cannot be appealed. View "Cooke v. Jackson National Life Insurance Co." on Justia Law

The Sauter Estate filed a complaint in the Southern District of New York against Citigroup, Banamex and Banamex U.S.A., seeking information pertaining to Sauter’s accounts. The Estate's amended complaint added Grupo as a defendant and added a claim for Racketeer Influenced and Corrupt Organizations Act Infractions, 18 U.S.C. 1961-1968. After defendants moved to dismiss, the Estate filed a notice of voluntary withdrawal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). The defendants unsuccessfully moved to vacate that notice and to dismiss with prejudice and requested sanctions under 28 U.S.C. 1927 and the court’s “inherent powers to impose sanctions as a deterrent against continued vexatious litigation." The court noted that the Federal Rules provide safeguards in case the plaintiff commences a second action, including ordering plaintiff to pay all of defendants’ costs and fees in the dismissed action, Fed. R. Civ. P. 41(a)(1)(B)(d). The Estate subsequently filed a complaint in the Delaware District Court, naming only Citigroup. Citigroup moved for costs, including attorneys’ fees, under Rule 41(d). The district court granted the motion for costs but concluded that because the plain language of Rule 41(d) does not provide for an award of attorneys’ fees. The Third Circuit affirmed. Attorneys’ fees may only be awarded as “costs” under Rule 41(d) when the substantive statute under which the lawsuit was filed defines costs to include attorneys’ fees; no such statute is involved here. View "Garza v. Citigroup Inc" on Justia Law

The Sauter Estate filed a complaint in the Southern District of New York against Citigroup, Banamex and Banamex U.S.A., seeking information pertaining to Sauter’s accounts. The Estate's amended complaint added Grupo as a defendant and added a claim for Racketeer Influenced and Corrupt Organizations Act Infractions, 18 U.S.C. 1961-1968. After defendants moved to dismiss, the Estate filed a notice of voluntary withdrawal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). The defendants unsuccessfully moved to vacate that notice and to dismiss with prejudice and requested sanctions under 28 U.S.C. 1927 and the court’s “inherent powers to impose sanctions as a deterrent against continued vexatious litigation." The court noted that the Federal Rules provide safeguards in case the plaintiff commences a second action, including ordering plaintiff to pay all of defendants’ costs and fees in the dismissed action, Fed. R. Civ. P. 41(a)(1)(B)(d). The Estate subsequently filed a complaint in the Delaware District Court, naming only Citigroup. Citigroup moved for costs, including attorneys’ fees, under Rule 41(d). The district court granted the motion for costs but concluded that because the plain language of Rule 41(d) does not provide for an award of attorneys’ fees. The Third Circuit affirmed. Attorneys’ fees may only be awarded as “costs” under Rule 41(d) when the substantive statute under which the lawsuit was filed defines costs to include attorneys’ fees; no such statute is involved here. View "Garza v. Citigroup Inc" on Justia Law

Petitioners California Self-Insurers’ Security Fund (the Fund) and Nixon Peabody LLP (Nixon Peabody or the firm) sought a writ of mandate to direct the trial court to vacate its order disqualifying Nixon Peabody from representing the Fund in the underlying case. Petitioners argued the trial court mistakenly believed it was compelled by law to disqualify the firm; the court instead should have made further factual findings and exercised its discretion. Real parties in interest contended disqualification was mandatory and therefore no discretion needed to be exercised. The Court of Appeal concluded that automatic disqualification was not required under these facts. View "CA Self-Insurers' Sec. Fund v. Super. Ct." on Justia Law

Debra Sands appealed the grant of summary judgment in favor of Menard, Inc. Sands and John Menard, Jr., were involved in a romantic relationship from late 1997 to April 2006. Sands alleged that from 1998 until 2006 she cohabitated with Menard and they engaged in a "joint enterprise" to work together and grow Menard's businesses for their mutual benefit. Menard and his affiliated entities argued that by failing to comply with Supreme Court Rule 20:1.8(a), which regulated business transactions between lawyers and their clients, Sands was precluded from seeking an ownership interest in any of Menard's various business ventures. As to the claim she characterized as a “Watts” unjust enrichment claim, the Wisconsin Supreme Court concluded Sands failed to allege facts which, if true, would support her legal conclusion that she and Menard had a joint enterprise that included accumulation of assets in which both she and Menard expected to share equally. Furthermore, the Court held SCR 20:1.8(a) could guide courts in determining required standards of care generally; however, it could not be used as an absolute defense to a civil claim involving an attorney. Finally, the Court concluded the court of appeals properly granted summary judgment to Sands on Menard, Inc.'s counterclaim for breach of fiduciary duty, and to the Trustees on their motion for summary judgment dismissing Sands' claim. View "Sands v. Menard, Jr." on Justia Law

In March 2016, Eric Clark and Clark and Associates, PLLC (collectively, Clark) sued the law firm of Jones Gledhill Fuhrman Gourley, P.A., and two individuals associated with that firm, William Fuhrman and Christopher Graham (collectively, Jones Gledhill). The genesis of this appeal started with Forbush v. Sagecrest Multi Family Property Owners’ Association, Inc., 396 P.3d 1199 (2017), a tort case in which a water heater emitted hazardous levels of carbon monoxide, killing one and seriously injuring another. In "Forbush," Clark initially represented the plaintiffs (Forbush), and Jones Gledhill represented two of the defendants, Anfinson Plumbing and Daniel Bakken. As his co-counsel, Clark enlisted the Spence Law Firm (Spence), but after approximately three years, irreconcilable differences plagued Clark and Spence’s relationship, and Clark withdrew. After withdrawing, in September 2015, Clark sent a letter to Jones Gledhill, which stated that he was “asserting an attorney lien according to I.C. 3-205, which attaches to any settlement or verdict. Please include [Clark’s] name on any settlement checks payable to the [Forbush] plaintiffs or any other payments related to a verdict or judgment.” A settlement between the Forbush defendants and plaintiffs was reached in January 2016, at which time the Forbush defendants wrote a settlement check to the Forbush plaintiffs. Without informing Clark of the settlement, Jones Gledhill forwarded the settlement check to Spence. When Clark learned of the settlement and contacted Jones Gledhill, the enforceability of Clark’s claimed lien became disputed. Clark alleged that Jones Gledhill was liable for failing to protect his attorney lien. Jones Gledhill moved to dismiss Clark’s amended complaint under Idaho Rule of Civil Procedure 12(b)(6), and the district court granted the motion. In addition to dismissing Clark’s complaint, the district court sealed several documents containing correspondence with and information about Clark’s former clients, denied Clark’s motion to amend, and awarded attorney fees under Idaho Code section 12-121 to Jones Gledhill. Clark appealed. But finding no reversible error, the Idaho Supreme Court affirmed. View "Clark v. Jones Gledhill Fuhrman Gourley" on Justia Law

The Vethan Law Firm represents Turner in a suit against Lopez, who is represented by Cweren. Vethan hired Wright as a paralegal to work on Turner’s case. Wright exchanged emails with lawyers, communicated with Turner, reviewed confidential information, drafted an engagement letter, and attended meetings in which Vethan attorneys discussed Turner’s case. Wright’s employment ended weeks later. Cweren hired Wright months later. To screen for potential conflicts, Cweren apparently asked interview questions based on the applicant’s resume. Wright did not disclose her employment at Vethan on her resume nor did she volunteer any information during the interview. Wright worked for Cweren on the Turner matter for several months, largely in a clerical capacity. After Vethan noticed Wright’s initials on Cweren documents, Vethan asserted that Wright’s participation required Cweren to withdraw as Lopez’s counsel. Wright denied that she had worked on the Turner matter while employed by Vethan. Cweren refused to withdraw but instructed Wright not to discuss the case with other employees, barred her from viewing any Turner files, and shifted all responsibility for the case to other paralegals. Vethan unsuccessfully moved to disqualify Cweren. The Supreme Court of Texas reversed. A court must grant a motion to disqualify a firm whose nonlawyer employee previously worked for opposing counsel if the nonlawyer obtained confidential information about the matter while working at the opposing firm and then shared that information with her current firm. Both requirements are met here. View "In re Turner" on Justia Law

California-American, a water utility, and Marina and Monterey, public water agencies, entered into contracts to collaborate on a water desalination project, stating that the prevailing party of “any action or proceeding in any way arising from [their a]greement” would be entitled to an award of attorney fees and costs. After learning that a member of Monterey’s board of directors had a conflict of interest, having been paid for consulting work to advocate on behalf of Marina, California-American sued to have the contracts declared void under Government Code section 1090. Monterey agreed that the contracts were void. Marina filed cross-claims seeking a declaration that the contracts were “valid and enforceable.” Years of litigation culminated in a holding declaring the agreements void. Marina challenged post-judgment orders that California-American and Monterey were entitled to costs as prevailing parties under Code of Civil Procedure sections 1032 and 1717 and granting them specific attorney fees awards. The court of appeal affirmed, rejecting Marina’s argument that they were not entitled to awards because the underlying contracts were declared void. The illegality exception to the rule of mutuality of remedies applies when the contract's subject matter is illegal but does not apply when the litigation involves the “invalidity” or “unenforceability” of an otherwise legal contract. View "California-American Water Co. v. Marina Coast Water District" on Justia Law