Justia Legal Ethics Opinion Summaries

Attorney Novak represented Kelly between 2007 and 2012. The two executed a contingency attorney fee agreement that granted Novak lien rights over any settlement Kelly received. In 2011, Novak filed a probate petition which alleged Kelly was a pretermitted spouse of Teitler and negotiated a considerable settlement. The probate court approved the settlement which awarded Kelly a substantial interest in the Dana Teitler Trust. Kelly died. Novak filed suit to enforce the attorney lien in the 2007 fee agreement. The probate court denied the petition, holding that the proper procedure to recover fees was by claim against Kelly’s estate under section 9000; plaintiff was required to file a creditor’s claim within one year of Kelly’s death; the statute of limitations barred the claim; and section 5000(a), which provides a nonprobate transfer, was inapplicable. The court of appeal reversed. Novak had not forfeited a claim under section 9391, that he was an equitable lienholder and did not need to file a creditor’s claim in probate. An assignment provision in the settlement agreement in the event of Kelly’s death did not destroy Novak’s pre-existing attorney fee lien rights. View "Novak v. Fay" on Justia Law

Petitioner, an attorney, and Respondent, a non-lawyer, entered into a fee-sharing agreement in connection with certain lawsuits. Petitioner later filed a complaint seeking a declaratory judgment on the issue of whether Respondent was entitled to compensation for services he performed in relation to the litigation, seeking a ruling as to whether a sharing of legal fees with Respondent would violate Rule 5.4 of the West Virginia Rules of Professional Conduct. The federal district court certified the following question to the Supreme Court: “Are the West Virginia Rules of Professional Conduct statements of public policy with the force of law equal to that given to statutes enacted by the West Virginia State Legislature?” The Supreme Court affirmed the question, as modified, in the affirmative, holding (1) Rule 5.4, which proscribes the sharing of fees between lawyers or law firms and non-lawyers, is an explicit judicial declaration of West Virginia public policy with the force and effect of law; and (2) accordingly, a fee-sharing agreement between a lawyer or law firm and the non-lawyer that violates the provisions of Rule 5.4 is void as against public policy and wholly unenforceable. View "Rich v. Simoni" on Justia Law

Law firms Campbell Harrison & Dagley, L.L.P. (CHD), and Calloway, Norris, Burdette & Weber, P.L.L.C. (CNBW) (collectively, the firms), challenged the district court’s partial vacatur of most of an arbitration award, rendered pursuant to a fee agreement (combining a high hourly-rate fee and a low-percentage contingency fee), which governed the firms’ representation of Albert G. Hill, III, and his wife, Erin Hill. After arbitrating a dispute over the requested payment to the firms under the fee agreement, the arbitrators awarded them approximately $28 million. Although the district court, inter alia, enforced the hourly-rate fee award, it vacated the contingency-fee award as unconscionable. In rejecting the arbitrators’ determinations regarding the uncertainty of recovery, the reasonableness of the total fee, and unconscionability, the Fifth Circuit concluded the district court “substitute[d] [its] judgment for that of the arbitrators merely because [it] would have reached a different decision”. As a result, it erred in vacating the contingency-fee-portion of the award and related awards (for the arbitration, the firms’ attorney’s fees, other fees, expenses, and arbitrators’ compensation; and pre-judgment interest on the contingency-fee portion). The Fifth Circuit vacated the district court with respect to the unconscionability issue, and remanded the case for further proceedings. The district court was affirmed in all other respects. View "Campbell Harrison & Dagley, et al v. Hill" on Justia Law

Plaintiff, a law firm, appealed the district court's dismissal of its implied-in-fact contract and quasi-contract claims against Kraft. The dispute stemmed from the Firm's advice to Kraft regarding an antitrust claim. The court concluded that the Firm's implied-in-fact contract claim failed because the complaint does not plausibly allege that Kraft was "reasonably notified" that the Firm expected to be paid for any work completed before that point. The Firm's quasi-contract claim failed because the Firm's services were rendered simply in order to gain a business advantage. Accordingly, the court affirmed the judgment of the district court. View "Berry Law v. Kraft Foods Group" on Justia Law

The Fergusons offered to sell their attorney, Yaspan, an interest in a London flat they owned. At Yaspan’s suggestion, the Fergusons hired independent counsel and the parties exchanged five drafts before signing a written agreement in 1995. This agreement enabled the Fergusons to recover nearly all of their original purchase price for the flat and still own half of it. Both the Fergusons and the Yaspans wanted to be partners with each other and not each others’ children, so they agreed that whichever couple outlived the other would have the right to buy out the deceased couple’s interest before that interest could pass to anyone else. The Fergusons were then 70 and 68 years old; the Yaspans were 49 and 47. The trial court concluded that Mrs. Ferguson’s 2011 petition to set aside the agreement as a product of Yaspan’s undue influence was untimely and without merit. The court of appeal affirmed, rejecting arguments that the trial court erred by looking at the fairness of the Agreement as a whole rather than focusing on terms Ferguson identified as unfair, and giving insufficient weight to the statistical likelihood that the buyout provision would favor the Yaspans. View "Ferguson v. Yaspan" on Justia Law

Danko practiced law with the firm of O’Reilly & Collins, until, in 2009, Danko sued O’Reilly, as an individual, and O’Reilly & Collins, for unpaid wages. Before trial, O’Reilly, as an individual, obtained directed verdict. In 2012, judgment was entered in favor of Danko for more than $2,000,000. Danko filed moved to amend the judgment and the costs and fee order “to include Terry O’Reilly as a judgment debtor for all amounts owed to Michael Danko” on the ground that O’Reilly knew that the firm owed Danko more than $2 million, but drew out all the firm’s available funds without reserving any amounts to satisfy the debt he knew was owed to Danko, telling Danko “you will not be able to execute on any judgment.” The court of appeal affirmed the trial court’s amendment of the judgment, citing Code Civ. Proc., 187. The court rejected arguments that the amendment was entered in violation of a stay in the bankruptcy of the firm; the amendment was precluded by the doctrine of res judicata; and the amendment was contrary to the principles governing collateral estoppel. View "Danko v. O'Reilly" on Justia Law

Cobra was a prequalified vendor of information technology goods and services to the city. In 1999-2000, Cobra submitted invoices based on invoices submitted by its subcontractor, Monarch. Monarch had not performed the work, but was a sham corporation run by Armstrong, then-manager of information technology for a city agency. The city paid the invoices. After uncovering another scheme involving Armstrong and a different vendor, the city received complaints that Cobra had not paid subcontractors for work for which the city had paid Cobra. Cobra did not submit to an audit request. The City Attorney had represented Cobra on matters including city contracts while in private practice. Although he had personally been screened from matters related to Cobra, the court ordered the city to retain independent counsel, but stayed proceedings pending appeal. The California Supreme Court affirmed the disqualification. A jury returned verdicts against Cobra and rejected all counterclaims. The court of appeal held that Cobra waived appeal of its motion to preclude the city from using evidence procured with the participation of the City Attorney; reversed as to intentional misrepresentation, negligent misrepresentation, and violation of the false claims acts; and remanded for a new trial limited to those claims. View "City & Cnty, of San Francisco v. Cobra Solutions, Inc." on Justia Law

After Plaintiff fell behind on her payments to Attorney in the underlying litigation, Attorney filed a motion to withdraw as counsel for Plaintiff and requested a charging lien in the amount of approximately $300,000. Plaintiff did not oppose Attorney’s withdrawal but did oppose the entry of a charging lien. The Court of Chancery found that a charging lien was appropriate and granted a charging lien in the amount of $200,000 against any judgment in this action, holding (1) a fee agreement between the parties did not preclude the entry of a charging lien; (2) the total amount of the charging lien that was appropriate in this case should not exceed Plaintiff’s lowest-possible net recovery of $263,872; and (3) Attorney was not liable to the experts for their fees, so there was no basis for include those fees in the charging lien. View "In re Zutrau v. Jansing & ICE Sys., Inc." on Justia Law

Plaintiffs Paul Choiniere and P&D Consulting, Inc. sued defendants, attorney Anthony Marshall and his law firm, Harris Beach, PLLC, alleging that they made negligent and intentional misrepresentations while representing a client in a matter involving commercial loan guaranties. Choiniere argued that he relied upon the misrepresentations when deciding not to call a $1 million loan that he made in September 2003, and P&D Consulting argued that it relied upon the misrepresentations when deciding to loan an additional $1.3 million in June 2004. Upon review of the dispute, the Supreme Court reversed the trial court's decision granting defendants summary judgment. In sum, the Court held that there were several material issues in dispute that preclude summary judgment, including the viability of the guaranty agreement after an April 28, 2004 letter, whether plaintiffs' reliance on the April 28 letter was justifiable, whether Marshall was authorized to send the letter, and whether there are any economic damages. View "Choiniere v. Marshall and Beach, PPLC" on Justia Law

Plaintiff-appellant Nancy Lee hired Attorney William Hanley to represent her in a civil suit. After the litigation settled, Lee sought a refund of unearned attorney fees and unused expert witness fees she had advanced to Hanley. Not having received a refund, Lee hired Attorney Walter Wilson and terminated Hanley. Attorney Hanley thereafter refunded certain expert witness fees, but no attorney fees. More than a year after hiring Wilson, Lee filed a lawsuit against Hanley seeking the return of the unearned fees. Hanley filed a demurrer to Lee’s second amended complaint, based on the one-year statute of limitations contained in Code of Civil Procedure section 340.6. The court sustained the demurrer and dismissed the action with prejudice. Lee appealed. Upon review, the Court of Appeal held that to the extent a claim is construed as a wrongful act not arising in the performance of legal services, "such as garden variety theft or conversion, section 340.6 is inapplicable. . . . Here, the facts alleged in Lee’s second amended complaint could be construed as giving rise to a cause of action for the theft or conversion of an identifiable sum of money belonging to her. This being the case, we cannot say that Lee’s second amended complaint demonstrates clearly and affirmatively on its face that her action is necessarily barred by the section 340.6 statute of limitations." Because this action had not reached a point where the court could determine whether the wrongful act in question arose in the performance of legal services, and thus, whether or not section 340.6 applied, the demurrer should not have been sustained. View "Lee v. Hanley" on Justia Law