Justia Legal Ethics Opinion Summaries

Minority partners in various cellular telephone partnerships hired attorney Michael A. Pullara to pursue breach of fiduciary duty claims against the majority partner, AT&T. The client agreements allowed Pullara to hire joint venture counsel, and he retained Ajamie LLP. Both firms agreed to a 50% discount on their hourly rates in exchange for a contingency fee if they prevailed. After lengthy litigation, the minority partners reached a favorable settlement with AT&T. However, a dispute arose between Pullara and Ajamie over the fee division, leading Ajamie to file for a charging lien to secure its fee.The Court of Chancery of the State of Delaware granted a charging lien to preserve Ajamie’s claim against the settlement proceeds. Ajamie then sought to enforce the lien. The court held that the fee-sharing agreement between Pullara and Ajamie was unenforceable under the Texas Disciplinary Rules of Professional Conduct because the clients had not consented to the specific terms of the fee-sharing arrangement. However, the court ruled that Ajamie was still entitled to reasonable compensation under the principle of quantum meruit.The court calculated Ajamie’s lodestar at $13,178,616.78, based on market rates adjusted annually. Considering the Mahani factors, the court found that an upward adjustment was warranted due to the complexity and duration of the litigation, the significant results obtained, and the partially contingent nature of the fee arrangement. The court awarded Ajamie a total fee of $15,814,340.14, including a 20% increase for the contingency risk. After deducting amounts already paid, Ajamie was awarded $13,014,721.87 plus pre- and post-judgment interest. The court ordered the escrow agent to release this amount to Ajamie. View "Cellular Telephone Company Litigation cases" on Justia Law

Plaintiffs allege Defendants discriminated against them on the basis of their national origin when assessing property taxes due on Plaintiffs’ home in Dover, Delaware and asked the court to “appoint an attorney to file a formal [c]omplaint on their behalf” under the Delaware Fair Housing Act (DFHA), 6 Del. C. 4613(a) and (b). According to Plaintiffs, they have made extensive, unsuccessful, efforts to find counsel during the past year. Plaintiffs do not claim to be unable to pay for counsel. The Chancery Court denied the motion, noting that, counting only their formal assessment appeals, this is Plaintiffs’ third suit. Even disregarding that Plaintiffs are not indigent, they have ably presented their claims thus far and made court filings while appearing pro se; their claims do not appear to be so legally or factually complex as to necessitate the assistance of counsel; Plaintiffs are not met with significant barriers or an inability to conduct a factual investigation; they have not alleged the need for expert discovery; and the case is unlikely to turn on credibility determinations. Plaintiffs do not suffer from a lack of capacity to seek counsel, as evidenced by their substantial efforts to obtain counsel to date. View "Shahin v. City of Dover" on Justia Law

The three underlying legal actions, involving breach of contract, breach of fiduciary duty, stock valuation, bankruptcy, and appeals, took place in Illinois. Plaintiffs, including attorneys involved in the underlying actions, sought to indemnification in post-trial proceedings. Defendant is a Delaware corporation with offices in Illinois. The Delaware Court of Chancery awarded plaintiffs $79,540.14 for pursuing the post-trial action and $241,492.50 for the Illinois proceedings, plus 20% of the expenses they incurred enforcing their indemnification right through this proceeding. The court cited the corporations’ bylaws, under which the plaintiffs are entitled to mandatory if indemnification would be permitted under the Delaware General Corporation Law and Section 145(a) of that law. View "Dore v. Sweports Ltd." on Justia Law

The court issued a post-trial opinion holding that the loan agreement between plaintiff and National was unconscionable and that National violated the federal Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq. At issue is the court's award of attorneys' fees and costs to plaintiff. The court concluded that, because plaintiff prevailed on her TILA claims, and because plaintiff's other claims arose out of the same common core of facts as her TILA claims, the fee award extends to all of plaintiff's attorneys' fees and costs. The court also concluded that the bad faith with which National and its counsel acted throughout the litigation provides an independent basis for awarding plaintiff her attorneys' fees. Finally, the court rejected National's various procedural arguments. Therefore, plaintiff is entitled to the full amount sought and, given the seriousness of the misconduct in which National and its counsel engaged, they are jointly and severally liable for the fee award. View "James v. National Financial, LLC" on Justia Law

CFG produced to defendants 5,000 pages of pleadings and court filings from an action pending in Maryland and later produced 238,000 pages worth of its own documents that it had already produced in the Maryland action. CFG produced all of the documents as Highly Confidential, so that only four of the attorneys representing defendants could review the documents. Defendants moved to vacate the designation. The court determined that defense attorneys may review the documents if they certify that during the pendency of this case they will neither be involved in the New York Litigation, nor represent any client in a matter involving the purchase or sale (including financing) of any nursing home or adult assisted living center. The Court declined to de-designate any of the documents as Highly Confidential; CFG, through its counsel, is to review, within 30 days of the date of this letter opinion, all of the Discovery Documents that refer to Beverly, and determine whether those documents are entitled to be designated Highly Confidential. View "Grunstein v. Silva" on Justia Law

A 2007 conveyance of commercial property in Milton was characterized by mistakes, starting with an error-filled purchase offer, so that the deed ultimately conveyed a residential parcel that was not owned by the seller at the time of conveyance and that the seller did not intend to convey. In an opinion characterized as “unpleasant to write,” the chancellor declared the purported conveyance a nullity and noted that the “matter has been litigated far beyond what a rational evaluation of its costs and potential benefits would dictate.” The chancellor found that the deed, purporting to transfer the residential parcel, was altered by the buyer’s attorney, to the detriment of the seller and without the effective consent of the seller and was ineffective to convey any property. The actual deed signed by the parties contained a reference to the residential parcel by tax number, but omitted that property from the metes and bounds description. View "Point Mgmt., LLC v. MacLaren, LLC" on Justia Law

Plaintiff, a former shareholder of XTO, moved for an award of attorneys' fees and expenses following the stipulated dismissal of her derivative action, which was largely mooted by measures taken by XTO's Board shortly after plaintiff's complaint was served. In addition to XTO, the former members of XTO's Board were named as defendants. Plaintiff objected to the fact that the cash bonuses paid to XTO's CEO and four other officers were not tax-deductible because they did not meet the requirements of section 162(m) of the Internal Revenue Code. The court denied the motion because an arguably poor business judgment, without more, did not excuse demand on the Board in a derivative action. View "Freedman v. Adams, et al." on Justia Law

The parties disputed the amount that defendant, Fitracks, must advance to Noam Danenberg in connection with his defense of claims asserted against him by Aetrix, Fitracks' parent, in litigation pending before the district court (Underlying Action). They also disputed the amount that Fitracks must pay Danenberg as indemnification for this proceeding. Judgment was entered in favor of Danenberg for advancements in the amount of $292,019.91 and indemnification in the amount of $276,332.13. Interest on these amounts, compounded quarterly, shall accrue at the legal rate beginning February 27, 2012 through the date of payment. Going forward, unless modified by stipulation, the parties shall follow the procedures set forth in this opinion. View "Danenberg v. Fitracks, Inc." on Justia Law

Plaintiffs, David and Barbara Smith, asserted various claims arising out of the construction of their home against Defendants, Donald L. Mattia, Inc. (DLM), Donald Mattia, and Barbara Joseph (Barbara). The Chancery Court (1) granted Defendants' motion for summary judgment on (i) Plaintiffs' breach of contract claim and (ii) Plaintiffs' civil conspiracy claim; (2) denied Defendant's motion for summary judgment on (i) Plaintiffs' claim for misappropriation of Plaintiffs' backfill and money paid to DLM that was not applied to their project and (ii) Plaintiffs' claim that Defendants fraudulently induced Plaintiffs to purchase excess lumber and misappropriated $8,836 in connection with the purchase of excess lumber; (2) granted Plaintiffs' motion for summary judgment, as Defendants did not articulate a viable cause of action in their counterclaim; and (3) denied Barbara's motion for Chan. Ct. R. 11 sanctions where there was no evidence that Plaintiffs' attorney did not have a good faith belief in the legitimacy of the claims asserted against Barbara. View "Smith v. Donald L. Mattia, Inc." on Justia Law

Petitioner, former CEO of Fitracks, sought advancements from Fitracks for attorneys' fees and expenses incurred defending claims in litigation in the underlying action. Aetrex sued petitioner in the underlying action and Aetrex is currently the parent corporation of Fitracks, having acquired Fitracks by triangular merger in 2008. Because Aetrex's claims in the underlying action arose out of representations made by petitioner in his capacity as CEO of Fitracks, petitioner was entitled to advancements for the underlying action. Therefore, summary judgment was granted in favor of petitioner and against Fitracks on the issues of liability for advancements in the underlying action and indemnification for this proceeding. View "Danenberg v. Fitracks, Inc." on Justia Law