Justia Legal Ethics Opinion Summaries

Articles Posted in Delaware Supreme Court
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In 2010, Appellants Meso Scale Diagnostics, LLC and Meso Scale Technologies, LLC (collectively “Meso”) filed suit in Delaware against Appellee entities Roche Diagnostics GmbH, Roche Diagnostics Corp., Roche Holding Ltd., IGEN LS LLC, Lilli Acquisition Corp., IGEN International, Inc., and Bioveris Corp. (collectively “Roche”), all of which were affiliates or subsidiaries of the F. Hoffmann -- La Roche, Ltd. family of pharmaceutical and diagnostics companies. Meso alleged two counts of breach of contract. Roche prevailed at trial, and the Delaware Supreme Court affirmed the judgment in 2014. Then in 2019, Meso brought a new action asking the court to reopen the case, vacate the judgment entered after trial, and order a new trial. Meso alleged that the Vice Chancellor who decided its case four years earlier had an undisclosed disabling conflict, namely, that Roche’s counsel had been simultaneously representing him in an unrelated federal suit challenging the constitutionality of Delaware’s law providing for confidential business arbitration in the Court of Chancery (“Section 349”). In that federal litigation, which ended in 2014, the Chancellor and Vice Chancellors of the Court of Chancery, as the parties responsible for implementing the challenged statute, were nominal defendants. The Court of Chancery denied relief and dismissed the action. Meso appealed. Finding no reversible error, the Delaware Supreme Court affirmed dismissal. View "Meso Scale Diagnostics, LLC v. Roche Diagnostics GMBH" on Justia Law

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The issue this case presented was a legal negligence case arising from the preparation of a premarital agreement. Plaintiff-Appellant Dean Sherman, appealed the Superior Court’s grant of summary judgment in favor of Defendant-Appellee Stephen P. Ellis, Esquire. The appeal presented two issues: (1) whether the traditional “but for” test for proximate cause applied in a “transactional” legal negligence case, or whether it is sufficient that the alleged negligence creates an increased risk of future damages; and (2) whether the evidence satisfied the summary judgment requirement that there be no genuine issue as to any material fact. As to the first issue, the Delaware Supreme Court concluded the traditional “but for” test, not a risk of future damages test, was the appropriate test for determining proximate cause. As to the second issue, the Court concluded the evidence, viewed in the light most favorable to Mr. Sherman, raised a genuine issue of material fact and that summary judgment should have been denied. In light of the Court's second conclusion, the Superior Court's judgment was reversed and the matter remanded for further proceedings. View "Sherman v. Ellis" on Justia Law

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In 2010, Appellants Meso Scale Diagnostics, LLC and Meso Scale Technologies, LLC (collectively “Meso”) filed suit in the Delaware Court of Chancery against Appellee entities Roche Diagnostics GmbH, Roche Diagnostics Corp., Roche Holding Ltd., IGEN LS LLC, Lilli Acquisition Corp., IGEN International, Inc., and Bioveris Corp. (collectively “Roche”), all of which were affiliates or subsidiaries of the F. Hoffmann -- La Roche, Ltd. family of pharmaceutical and diagnostics companies. Meso alleged two counts of breach of contract. Roche prevailed at trial, and the Delaware Supreme Court affirmed the judgment in 2014. In 2019, Meso brought a new action asking the court to reopen the case, vacate the judgment entered after trial, and order a new trial. Meso alleged that the Vice Chancellor who decided its case four years earlier had an undisclosed disabling conflict, namely, that Roche’s counsel had been simultaneously representing him in an unrelated federal suit challenging the constitutionality of Delaware’s law providing for confidential business arbitration in the Court of Chancery, 10 Del. C. 349. In that federal litigation, which ended in 2014, the Chancellor and Vice Chancellors of the Court of Chancery, as the parties responsible for implementing the challenged statute, were nominal defendants (hereinafter, the “Judicial Officers”). The Court of Chancery denied relief and dismissed the action. Meso appealed. Finding no reversible error, the Supreme Court affirmed the Court of Chancery. View "Meso Scale Diagnostics, LLC v. Roche Diagnostics GMBH" on Justia Law

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Plaintiff-Appellant Dean Sherman appealed a superior court's grant of summary judgment in favor of Defendant-Appellee Stephen P. Ellis, Esquire. The appeal presented two issues: (1) whether the traditional “but for” test for proximate cause applied in a “transactional” legal negligence case, or whether it is sufficient that the alleged negligence creates an increased risk of future damages; and (2) whether the evidence satisfied the summary judgment requirement that there be no genuine issue as to any material fact. As to the first issue, the Delaware Supreme Court concluded the traditional “but for” test, not a risk of future damages test, was the appropriate test for determining proximate cause. As to the second issue, the Court concluded the evidence, viewed in the light most favorable to Sherman, raised a genuine issue of material fact, and that summary judgment should have been denied. This second conclusion required that the superior court's judgment be reversed and the case remanded for further proceedings. View "Sherman v. Ellis" on Justia Law

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The trustees of the Delaware Lawyers’ Fund for Client Protection (the “LFCP”) requested an advisory opinion from the Delaware Supreme Court regarding whether the trustees had discretion to consider paying claims involving misconduct by attorneys who were not members of the Delaware bar, but who were admitted pro hac vice or who had in the past received limited permission to practice. The question arose from the language of Supreme Court Rule 66(a)(ii), which stated that the purpose of the trust fund was to address “losses caused to the public by defalcations of members of the Bar;” subsections 1 and 2 of Rule 4(1) of the LFCP Rules, which provide that the Trustees will consider for reimbursement from the fund certain claims involving “a member of the Delaware Bar;” and subsection 3 of Rule 4(1) of the LFCP Rules, which provides that the trustees will consider for reimbursement certain claims involving a “member of the Bar.” The Supreme Court held that the trustees’ discretion was not limited to paying claims for reimbursement involving an attorney who was a member of the Delaware bar at the time of the defalcation that gave rise to the claim. View "IN RE: Request of the Trustees of the Lawyers' Fund for Client Protection for an Advisory Opinion" on Justia Law

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For tax reasons ISN Software Corporation wanted to convert from a C corporation to an S corporation. But four of its eight stockholders, representing about 25 percent of the outstanding stock, could not qualify as S Corporation stockholders. ISN sought advice from Richards, Layton & Finger, P.A. (RLF) about its options. RLF advised ISN that before a conversion ISN could use a merger to cash out some or all of the four stockholders. The cashed-out stockholders could then accept ISN’s cash-out offer or exercise appraisal rights under Delaware law. ISN did not proceed with the conversion, but decided to use a merger to cash out three of the four non-qualifying stockholders. After ISN completed the merger, RLF notified ISN that its advice might not have been correct. All four stockholders, including the remaining stockholder whom ISN wanted to exclude, were entitled to appraisal rights. ISN decided not to try and unwind the merger, instead proceeding with the merger and notified all four stockholders they were entitled to appraisal. ISN and RLF agreed that RLF would continue to represent ISN in any appraisal action. Three of the four stockholders, including the stockholder ISN wanted to exclude, eventually demanded appraisal. Years later, when things did not turn out as ISN had hoped (the appraised value of ISN stock ended up substantially higher than ISN had reserved for), ISN filed a legal malpractice claim against RLF. The Superior Court dismissed ISN’s August 1, 2018 complaint on statute of limitations grounds. The court found that the statute of limitations expired three years after RLF informed ISN of the erroneous advice, or, at the latest, three years after the stockholder ISN sought to exclude demanded appraisal. On appeal, ISN argued its legal malpractice claim did not accrue until after the appraisal action valued ISN’s stock because only then could ISN claim damages. Although it applied a different analysis, the Delaware Supreme Court agreed with the Superior Court that the statute of limitations began to run in January 2013. By the time ISN filed its malpractice claim on August 1, 2018, the statute of limitations had expired. Thus, the Superior Court’s judgment was affirmed. View "ISN Software Corporation v. Richards, Layton & Finger, P.A." on Justia Law

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This appeal centered on a dispute over when a charging lien could be imposed on a judgment to recover unpaid attorney's fees. The Vice Chancellor supplemented the prerequisites for a charging lien to confine an attorney to her unpaid fees that are directly connected to the recovery she obtained on her client‘s behalf. But, that supplement was, in the Delaware Supreme Court's view, inequitable because it denies an attorney full compensation for the work she contracted to do on behalf of her client and thus undermines the utility of a charging lien in encouraging counsel to provide legal services to clients by ensuring them that their contractual right to a fee will be upheld by the judiciary. Accordingly, the Court reversed. View "Katten Muchin Rosenman LLP v. Sutherland" on Justia Law

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Plaintiffs-Appellees Carl and Pamela Morton filed a petition for guardianship against Defendant-Appellant Terry Hanson. An in-house attorney who did not carry malpractice insurance was appointed by the Family Court to represent Defendant. The Family Court certified a question to the Supreme Court concerning in-house attorneys appointed to represent indigent parties. Upon review, the Supreme Court held that in-house counsel appointed by the Family Court had qualified immunity under the Delaware Tort Claims Act. Furthermore, lack of malpractice insurance is not "good cause" for an attorney to withdraw from court-appointed representation. View "Hanson v. Morton" on Justia Law

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In a reformation action concerning cash flow distributions in three real estate joint venture agreements, the Supreme Court held that the Vice Chancellor properly reformed the agreements on the basis of unilateral mistake and knowing silence by the other party. "Negligence in discovering an alleged mistake does not bar a reformation claim unless the negligence is so significant that it amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing. Ratifying a contract does not create an equitable bar to reformation unless the ratifying party had actual knowledge of the mistake giving rise to the reformation claim." In this matter, the Court reversed the Vice Chancellor's fee award because a contractual fee-shifting provision incorporating the words "incurred" and "reimburse" did not apply where counsel for the party seeking fees represented the party free of charge to avoid a malpractice claim. View "Scion Breckenridge Managing Member, LLC, et al. v. ASB Allegiance Real Estate Fund, et al." on Justia Law

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Family Court Judge Arlene Minus Coppadge was subject to disciplinary proceedings for failing to properly report matters held under advisement. Specifically, this matter arose from two instances of delay in the disposition of cases pending before the judge and her subsequent failure to include those cases on the "90 day report" required by Administrative Directive 175. Upon review of the complaint, the Supreme Court concluded that the judge violated Rule 2.5(C) of the Delaware Judges' Code of Judicial Conduct, and was accordingly sanctioned. View "In Re: The Honorable Arlene Minus Coppadge" on Justia Law