Justia Legal Ethics Opinion Summaries

Klie purchased property with financing from Coldwell Banker, which assigned its rights to the Federal National Mortgage Corporation (Fannie Mae) but continued to service the loan. The assignment was never recorded. In 2007, servicing rights transferred to JP Morgan. Coldwell Banker assigned its rights in the note and mortgage (none) to JP Morgan, which reassigned to Fannie Mae. Chase, an arm of JP Morgan, serviced the loan until Klie died. With the loan in default, Chase’s law firm, RACJ, prepared an assignment of the note and mortgage that purported to establish Chase’s right to foreclose and filed a foreclosure actionf, naming Glazer, a beneficiary of Klie’s estate. The court entered a decree of foreclosure, but later vacated and demanded that RACJ produce the original note. Chase dismissed the foreclosure without prejudice. Glazer filed suit, alleging that Chase and RACJ violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692, and Ohio law by falsely stating that Chase owned the note and mortgage, improperly scheduling a foreclosure sale, and refusing to verify the debt upon request. Chase and RACJ moved to dismiss. The district court dismissed. The Sixth Circuit reversed, holding that mortgage foreclosure is debt collection under the Act. View "Glazer v. Chase Home Fin. LLC" on Justia Law

Todd attempted to purchase claims against a collection agency (Franklin) from Fletcher. He then sued Franklin. The district court dismissed the complaint, ruling that the assignment was void because Todd was using it merely to attempt to practice law without a license and that Todd failed to state a claim for relief. The Seventh Circuit affirmed. The assignment was void as against public policy. Illinois public policy forbids the assignment of legal claims to non-attorneys in order to litigate without a license. Undisputed evidence showed that Todd created a business providing legal advice and repeatedly agreed to purchase claims in order to litigate. Even if the assignment was not void, Todd failed to state a claim. The Fair Debt Collection Practices Act preempts state-law claims, 15 U.S.C. 1681t(b)(1)(F). Todd did not attempt could not bring a claim directly under the FCRA because the section Franklin allegedly violated does not create a private right of action. View "Todd v. Franklin Collection Serv., Inc." on Justia Law

In a suit alleging engine defects in Volkswagen and Audi vehicles, the district court awarded $30 million in attorneys' fees to several groups of plaintiffs' attorneys who achieved a class action settlement agreement. The award was based in federal law. The First Circuit vacated the fee award and remanded for calculation using Massachusetts law. In a diversity suit, where the settlement agreement expressly states that the parties have not agreed on the source of law to apply to the fee award and there is an agreement that the defendants will pay reasonable fees, state law governs the fee award. View "Volkswagen Grp of Am. v. McNulty Law Firm" on Justia Law

After losing on her Colorado Fair Debt Collection Practices Act claim at the county court, Elizabeth Flood's trial counsel, Gary Merenstein, paid the fees of several appellate attorneys who represented Flood in an appeal to the district court and later to the Supreme Court because they were not willing to work on a contingency basis. Flood ultimately prevailed in her appeal, and the Supreme Court awarded attorneys' fees. On remand to the county court to determine Flood's entitlement to and the amount of the attorneys' fees, the opposing party, debt collector Mercantile Adjustment Bureau(MAB), argued that Flood was not entitled to receive attorneys' fees for her appellate counsel's work. MAB argued that the arrangement between Merenstein and Flood, wherein he agreed to pay her appellate attorneys' fees and expected to be reimbursed for these fees from any court award of attorneys' fees received by Flood, constituted unethical financial assistance of a client in violation of Rule 1.8(e) of the Colorado Rules of Professional Conduct. The county court rejected MAB's argument and awarded Flood the requested attorneys' fees. MAB appealed to the district court, which affirmed the county court. Upon review, the Supreme Court held that Merenstein did not violate Rule 1.8(e) by paying the fees of Flood's appellate counsel and therefore affirmed the district court's decision in part. However, the Court concluded that the district court erred in applying the Colorado Appellate Rules, which require an appellee to make her request for attorneys' fees in her answer brief, to an appeal to the district court from the county court. The Court reversed that part of the district court's ruling applying the Colorado Appellate Rules to deny Flood's request for attorneys' fees incurred in the current appeal. The case was remanded to the district court to return it to the county court for proceedings to determine whether Flood was entitled to appellate fees as the prevailing party in this appeal and, if so, the amount of Flood's reasonable attorneys' fees and costs incurred in connection with this appeal—including the proceedings before the Supreme Court. View "Mercantile Adjustment Bureau v. Flood" on Justia Law

Plaintiffs defaulted on a loan that they had secured by giving the lender a mortgage on their property. A law firm representing the lender sent plaintiffs a letter and documents demanding payment of the debt and threatening to foreclose on the property if they did not pay it. Plaintiffs then filed a putative class action lawsuit against the law firm alleging that the communication violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692e. The district court dismissed the complaint for failure to state a claim. The court held, however, that the complaint contained enough factual content to allow inference that the law firm was a "debt collector" because it regularly attempted to collect debts. The complaint also alleged that the law firm was "engaged in the business of collecting debts owed to others incurred for personal, family[,] or household purposes" and that in the year before the complaint was filed, the firm had sent more than 500 people "dunning notice[s]" containing "the same or substantially similar language" to that found in the letter and documents attached to the complaint in this case. Further, the complaint alleged enough to constitute regular debt collection within the meaning of 1692a(6). Accordingly, the court reversed the judgment and remanded for further proceedings. View "Reese, et al. v. Ellis, Painter, Ratterree, & Adams, LLP" on Justia Law

This appeal arose from the dismissal of all claims alleged in a putative class action complaint filed pursuant to the Driver's Privacy Protection Act of 1994 (DPPA), 18 U.S.C. 2721-2725. Appellees (Lawyers) were South Carolina attorneys who in 2006 and 2007 instituted several "group action" lawsuits in South Carolina state court against numerous car dealerships under the South Carolina Regulation of Manufacturers, Distributors, and Dealers Act (Dealers Act), S.C. Code Ann. 56-15-10 et seq. Appellants (Buyers) were car buyers who received mailings from Lawyers regarding the Dealers Act litigation. Buyers sued Lawyers in this action alleging that Lawyers violated the DPPA when they obtained and used Buyers' personal information without their consent in connection with the Dealers Act litigation. The court held that the district court erred in its determination that the conduct of Lawyers did not constitute solicitation within the contemplation of the applicable DPPA prohibition. Nevertheless, the district court correctly ruled that Lawyers' conduct in respect to Buyers' personal information was undertaken in anticipation and in connection with litigation, a use permitted by the DPPA. View "Maracich v. Spear" on Justia Law

Plaintiff commenced this action in federal court alleging that M&K violated multiple provisions of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692d-f, by making false statements and misrepresentations in a memorandum filed in the state court action in support of Discover's motion for summary judgment. The complaint also asserted state law claims for malicious prosecution, abuse of process, and the recovery of treble damages for attorney deceit under Minn. Stat. 481.071. Plaintiff subsequently appealed the district court's grant of summary judgment dismissing these claims. The court affirmed the dismissal of the FDCPA claims on the merits where it was not false or misleading to submit a client affidavit and legal memorandum arguing M&K's legal position that plaintiff was liable for the unpaid account balance at issue. The court also affirmed the dismissal of plaintiff's state law claims where plaintiff failed to submit sufficient evidence of intentional fraud and deceit. Accordingly, the court affirmed the judgment. View "Hemmingsen v. Messerli & Kramer, P.A., et al." on Justia Law

The State brought a consumer-protection action against Bennett & DeLoney, a Utah law firm, and the owners and principals thereof to redress and restrain alleged violations of the Arkansas Deceptive Trade Practices Act (ADTPA). The thrust of the complaint alleged that Bennett & DeLoney violated the ADTPA by attempting to collect penalties on dishonored checks greater than those amounts permitted by Ark. Code Ann. 4-60-103. The circuit court (1) granted partial summary judgment for the State, finding that the collection of amounts in excess of those set forth in section 4-60-103 violated the ADTPA; and (2) found that section 4-60-103 provided an exclusive remedy for recovery on dishonored checks and that the use of remedies set forth in Ark. Code Ann. 4-2-701, relating to a seller's incidental damages, was not permitted. The Supreme Court reversed and dismissed, holding that the ADTPA has no application to the practice of law by attorneys, and the circuit court erred in concluding otherwise. View "Bennett & Deloney P.C. v. State" on Justia Law

Plaintiff sued defendants in Missouri state court, on behalf of a putative class of similarly situated borrowers, alleging that defendants engaged in the unauthorized practice of law in violation of Mo. Rev. State 484.020 when they charged certain fees in the course of refinancing plaintiff's mortgage. Defendants moved the suit to federal court under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d) and plaintiff subsequently appealed the district court's judgment. The court held that plaintiff failed to show that she was charged any fees, directly or indirectly, for legal work performed by non-lawyers. Therefore, plaintiff had not shown injury and did not have standing to bring her claim. In light of plaintiff's lack of standing, the district court should have dismissed for lack of jurisdiction rather than reaching the merits of the summary judgment motion. Accordingly, the judgment was affirmed in part, vacated in part, and remanded with instructions that the action be dismissed for lack of jurisdiction. View "Hargis v. Access Capital Funding, LLC, et al." on Justia Law

In this appeal the Supreme Court considered whether the clerk of superior court had the authority to determine the reasonableness of attorney's fees that a trustee-attorney in a foreclosure proceeding paid to himself in addition to his trustee's commission. The superior court affirmed the clerk's order. The court of appeals vacated the clerk's and trial court's orders, holding that the clerk lacked the statutory authority to determine the reasonableness of attorney's fees paid in a foreclosure proceeding. The Supreme Court affirmed the court of appeals, holding (1) the clerk exceeded his statutory authority by reducing the trustee-attorney's attorney's fees, and (2) absent a viable challenge for breach of fiduciary duty from a creditor with standing, the trustee-attorney's payment of attorney's fees to himself in addition to a trustee's commission could not be upset. View "In re Foreclosure of Vogler Realty, Inc." on Justia Law