Justia Legal Ethics Opinion Summaries

Georgia citizen George Skipper was involved in a motor vehicle accident with a logging truck that was driven by Harold Moors and owned by Specialty Logging, LLC. Specialty had a commercial automobile insurance policy with a $1,000,000 per occurrence limit, which was issued by ACE Property and Casualty Insurance Company (ACE). Following the accident, Skipper retained an attorney who wrote a demand letter to ACE offering to settle the case for the limits of the Policy. ACE retained two lawyers from Atlanta, Brantley Rowlen and Erin Coia, to represent Specialty and Moors. Specialty and Moors offered Skipper $50,000. Not satisfied with that offer, Skipper and his wife filed a lawsuit in the Allendale County Court of Common Pleas against Specialty and Moors. Unbeknownst to ACE or its attorneys, the Skippers entered into a settlement with Specialty and Moors, agreeing to execute a Confession of Judgment for $4,500,000, in which they admitted liability for the Skippers' injuries and losses. The Specialty Parties also agreed to pursue a legal malpractice claim against ACE and its attorneys Rowlen and Coia, and assigned the predominant interest in that claim to the Skippers.1 In exchange for the Specialty Parties' admission of liability, the Skippers agreed not to execute the judgment as long as the Specialty Parties cooperated in the legal malpractice litigation against Defendants. Armed with the assignment, the Skippers and Specialty Parties filed a legal malpractice action against the attorneys, also with the Allendale County court. The case was removed to the United States District Court for the District of South Carolina. In federal court, ACE and its attorneys argued that the assignment of the malpractice claim was invalid and that the Skippers had no valid claims to assert. Because the question of whether a legal malpractice claim could be assigned between adversaries in litigation in which the alleged malpractice arose was a novel question in South Carolina, the South Carolina Supreme Court accepted a certified question South Carolina law from the federal district court. After review, the South Carolina Court held that in South Carolina, the assignment of a legal malpractice claim between adversaries in litigation in which the alleged malpractice arose was prohibited. View "Skipper v. ACE Property" on Justia Law

Humphrey sued under the Federal Tort Claims Act on behalf of her daughter Teniscia, alleging that medical malpractice during Teniscia’s 2008 birth left her permanently disabled. Teniscia’s father, Lee, participated in the litigation, but did not ask to be joined as a party. Humphrey and Lee are not married; Teniscia lives with Humphrey, but both are Teniscia’s legal custodians. The case was settled for $13 million, used to buy an annuity to provide care over the course of Teniscia’s life. Porter, who represents Lee, demanded a share of the 25% contingent fee that had been negotiated between Humphrey and her lawyer, who opposed this request, arguing that Lee was not a party and that Porter had not performed any of the legal work that led to the settlement. After the settlement Lee moved to file an amended complaint naming himself as a plaintiff. The district court denied Lee’s motion, stating that Lee not only had approved the settlement but also had not filed an administrative claim, as the FTCA requires. Lee then moved to intervene. The court denied that motion as untimely. Porter unsuccessfully sought fees notwithstanding Lee’s non-party status. The Seventh Circuit affirmed, concluding that the district court could not have allowed intervention even on a timely motion. View "Lee v. United States" on Justia Law

McVey sued for injuries she sustained after a waitress dropped a tray on her foot. Memorial Hospital of Carbondale treated her. McVey settled the lawsuit for $7,500, then filed a petition to adjudicate liens. The hospital’s lien was $2,891.64. In addition to attorney fees, McVey allegedly incurred litigation costs of $846.66 in securing the settlement. The trial court entered an order recognizing that under the Health Care Services Lien Act (Act) (770 ILCS 23/10), no individual licensed category of health care professional or health care providers may receive more than one-third of the award or settlement, so that the hospital could recover no more than $2,500. The court acknowledged precedent holding, that in order to ensure that a plaintiff receives 30% of the judgment, the computation of the amount available to health care providers should not begin until costs associated with bringing the case and securing payment have been deducted, but refused to deduct attorney fees and costs before calculating the amount available to the hospital. The appellate court reversed and remanded. The Illinois Supreme Court reversed, holding that hospitals are not required to contribute to the costs of litigation. View "McVey v. M.L.K. Enters., LLC" on Justia Law

Rosemann hired attorney Sigillito after Sigillito falsely informed Rosemann that he was an expert in international investments. In 2007, Rosemann received a $15.6 million buyout from the sale of his family’s company. Sigillito instructed Rosemann to loan $5 million of the buyout to Metis, a Turkish contractor. When Rosemann resisted, Sigillito told him “the loan was guaranteed by [North Atlantic Treaty Organization] contracts and that Sigillito would structure the deal to protect Rosemann and defer taxes.” Rosemann transferred $15.6 million to Sigillito, who wrote a $5 million check to Metis. For that service, Sigillito charged Rosemann $100,000. Sigillito took some money for his own use and loaned $10.8 million to another party in England. Approximately $2.75 million was repaid. In 2009, Metis defaulted and filed for bankruptcy protection in Turkey. Sigillito filed suit against Metis but the suit eventually was dismissed. The loan remains in default. In 2012, Sigillito was convicted of nine counts of wire fraud, four counts of mail fraud, six counts of money laundering, and conspiracy to commit mail and wire fraud. He was sentenced to 480 months’ imprisonment. Rosemann sued for legal malpractice. The Eighth Circuit affirmed dismissal because Rosemann failed to name an expert who would testify about the appropriate standard of care. View "Rosemann v. Sigillito" on Justia Law

In 2010, Debra Hackett was seriously injured in an accident in Sacramento County in which a tractor and trailer owned by Silva Trucking, Inc. and driven by Elaine McDonold jackknifed and collided with the vehicle being driven by Hackett. In 2012, the Hacketts filed a personal injury action in Sacramento County against Silva Trucking and McDonold. The jury awarded the Hacketts $34.9 million in damages. Silva Trucking was insured by Carolina Casualty Insurance Company (CCIC), who retained the law firm Cholakian & Associates to provide a defense. Silva Trucking had an excess liability insurance policy with Lexington Insurance Company (LIC), who retained the law firm Lewis, Brisbois, Bisgaard & Smith, LLP (Lewis Brisbois) as counsel. In 2014, Silva Trucking and McDonold brought suit in Sacramento County against LIC, CCIC, Cholakian & Associates and individual attorneys Kevin Cholakian and Jennifer Kung (collectively Cholakian), and Lewis Brisbois and individual attorney Ralph Zappala (collectively Lewis Brisbois). As to LIC and CCIC, the complaint alleged bad faith and breach of contract. As to the law firms and attorneys, the complaint alleged legal malpractice. The gravamen of the complaint was that the insurers unreasonably refused to accept the policy limit demand when the insured’s liability was clear and damages were known to be in excess of the policy limit. The attorneys failed to advise their insurer clients to accept the demand and the consequences of failing to do so, and failed to advise Silva Trucking and McDonold of their need for personal counsel. LIC and CCIC responded with demurrers. Lewis Brisbois answered with a general denial and asserted 22 affirmative defenses. Under Code of Civil Procedure section 396b, subdivision (a), where an action has been filed in the “wrong venue,” a defendant may move to transfer the case to the “proper court for the trial thereof.” In such a case, “if an answer is filed,” the court may consider opposition to the motion to transfer and may retain the action in the county where filed to promote the convenience of witnesses or the ends of justice. The question this case presented for the Court of Appeal's review was whether, in a multi-defendant case, an answer must be filed by all defendants before the court may consider opposition to the motion to transfer venue. The Court concluded the answer was yes. In this case, the trial court considered opposition to the motion before all defendants had answered the complaint. Accordingly, the Court issued a preemptory writ of mandate directing the trial court to vacate its order denying the motion to transfer and to issue a new order granting the motion. View "Cholakian & Assoc. v. Super. Ct." on Justia Law

In 2004 the law firm was engaged to bring a medical malpractice action on behalf of a 14-year-old girl who had become paralyzed after surgery. The firm filed two complaints in Virginia state court. Each was dismissed: the first without prejudice for failure to correctly caption a pleading; the second with prejudice for filing outside the statute of limitations. Shortly thereafter, the firm applied for and obtained a new professional liability insurance policy. Asked whether there were “any circumstances which may result in a claim being made,” the firm responded “no.” The firm informed the insurer of the incident in 2009, but represented that it had occurred in 2008. In 2011, the insurance company noticed that the firm had made the caption error in 2006, before the policy period. In 2012, it notified the firm that it reserved its rights to deny coverage under the known risk exclusion. The girl filed a legal malpractice action in 2012, and was awarded $1,750,000 in 2013. The court found, as a matter of law and without expert testimony, that the firm was on notice of the potential malpractice claim and rejected arguments that the insurer had forfeited or waived its right to deny coverage. The D.C. Circuit affirmed. View "Chicago Ins. Co. v. Paulson & Nace, PLLC" on Justia Law

Howard allegedly rear-ended Gumby's vehicle, Gumby sued Howard and his employer, UPS. Contending that Gumby’s health might have contributed to the accident, UPS requested information including medical records and the identity of anyone with knowledge concerning this defense. Gumby provided the names of one physician and one hospital from which he had received pre-accident care. Gumby died a year later. Comstock, Gumby’s daughter and estate administrator, was substituted as plaintiff. A year after discovery began, Comstock produced documents revealing more medical providers, but did not produce all requested information. The court ordered Comstock to complete production by September 28. She failed to do so. In December 2012, Comstock provided UPS with over 3,000 pages of documents. Some were duplicates, but new documents showed that Gumby had vision problems; suffered dizziness, paranoia, and hallucinations while driving; had been instructed not to drive at night; and had been hospitalized hours before the accident. Comstock had called law enforcement that night, worried because Gumby, had left Pennsylvania to drive to Arkansas. UPS had already deposed Gumby and family members. The district court noted further misconduct concerning expert test results. The court found “extreme prejudice” and sanctioned Comstock under FRCP37(b)(2) by dismissal. The Eighth Circuit affirmed. View "Comstock v. UPS Ground Freight, Inc." on Justia Law

Howard allegedly rear-ended Gumby's vehicle, Gumby sued Howard and his employer, UPS. Contending that Gumby’s health might have contributed to the accident, UPS requested information including medical records and the identity of anyone with knowledge concerning this defense. Gumby provided the names of one physician and one hospital from which he had received pre-accident care. Gumby died a year later. Comstock, Gumby’s daughter and estate administrator, was substituted as plaintiff. A year after discovery began, Comstock produced documents revealing more medical providers, but did not produce all requested information. The court ordered Comstock to complete production by September 28. She failed to do so. In December 2012, Comstock provided UPS with over 3,000 pages of documents. Some were duplicates, but new documents showed that Gumby had vision problems; suffered dizziness, paranoia, and hallucinations while driving; had been instructed not to drive at night; and had been hospitalized hours before the accident. Comstock had called law enforcement that night, worried because Gumby, had left Pennsylvania to drive to Arkansas. UPS had already deposed Gumby and family members. The district court noted further misconduct concerning expert test results. The court found “extreme prejudice” and sanctioned Comstock under FRCP37(b)(2) by dismissal. The Eighth Circuit affirmed.View "Comstock v. UPS Ground Freight, Inc." on Justia Law

Bell sued attorney Ruben and his firm, alleging that they negligently and fraudulently mismanaged her trust, causing a loss of $34 million. Before arbitration, Ruben filed for Chapter 7 bankruptcy. Bell filed an adversary complaint opposing discharge of Ruben’s fraud-based debt to her, 11 U.S.C. 523(a)(2)(A), (4). The bankruptcy judge granted Ruben a discharge of his other debts, but not of that fraud debt. Ruben’s liability insurance did not cover fraud. Bell settled her negligence claims against Ruben and all claims against the other defendants in arbitration. The arbitration panel ruled, with respect to the fraud claim, that “damages proven to be attributable to the actions of [Ruben] have been compensated,” but ordered Ruben to pay administrative fees and expenses of the American Arbitration Association (AAA) totaling $21,200.00 and that compensation and expenses of the arbitrators, advanced by Bell, totaling $150,304.54 would be borne by Ruben. AAA rules, which governed the arbitration, provide that expenses of arbitration “shall be borne equally” unless the parties agree otherwise or the arbitrator assesses expenses against specified parties. Ruben refused to pay. The bankruptcy judge entered summary judgment in favor of Ruben. The district court reversed, in favor of Bell. The Seventh Circuit affirmed. View "Ruben v. Bell" on Justia Law

In December 1995, Teresa Schmidt slipped and fell while visiting a Tacoma grocery store. She retained Timothy Coogan to represent her in a claim against the store. Just days before the statute of limitations ran, Coogan filed a complaint naming the wrong defendant. He subsequently filed two amended complaints, but the trial court dismissed the case as barred by the statute of limitations. Schmidt filed a complaint against Coogan, asserting claims for negligence and breach of contract. The case went to trial in November 2003, and the jury returned a verdict in favor of Schmidt and granted recovery for past economic and noneconomic damages. The trial court granted a new trial on the issue of damages only, finding that Coogan was denied a fair trial: Schmidt's counsel gave an improper closing argument, and the damages were so excessive as to unmistakably indicate that the verdict was the result of passion and prejudice. The Court of Appeals affirmed the trial court's order granting a new trial. In 2010, Schmidt moved for leave to amend the complaint to add a claim for outrage/reckless infliction of emotional distress, alleging that Coogan harassed, intimidated, and belittled her when she raised the problem of the statute of limitations before it expired. In the 2003 trial, the jury was instructed to determine general damages arising out of Coogan's conduct and malpractice. In the second trial, however, Coogan challenged the availability of general damages in legal malpractice cases. Because her counsel could not find settled authority either affirming or denying the availability of emotional distress damages in Washington, Schmidt sought to add a claim that encompassed the damages. The trial court denied Schmidt's motion to amend. Schmidt also filed a motion for summary judgment on the availability of general damages and a motion in limine. The court denied both motions. After Schmidt rested her case in the damages-only trial, Coogan moved for judgment as a matter of law, arguing that collectibility was an essential element of legal malpractice and that Schmidt presented no evidence that a judgment against Grocery Outlet would have been collectible. The court denied the motion, and the jury again returned a verdict in favor of Schmidt. Coogan appealed the jury verdict, and Schmidt cross appealed on the ground that general damages are available in attorney malpractice claims and that the trial court erred in denying her motion to amend the complaint. The Court of Appeals concluded that collectibility was an essential component of damages that Schmidt failed to prove, and it reversed the trial court's denial of Coogan's motion. This case presented two issues of first impression for the Supreme Court: (1) whether the elements of legal malpractice include the collectibility of an underlying judgment; and (2) whether emotional distress damages are available in legal malpractice cases. The Supreme Court reversed the Court of Appeals and affirm the trial court's judgment, holding that the uncollectibility of an underlying judgment is an affirmative defense to legal malpractice that defendant-attorneys must plead and prove. Furthermore, the Court held that the trial court properly denied emotional distress damages because Coogan's actions were not particularly egregious, nor was the subject matter personal. View "Schmidt v. Coogan" on Justia Law