Justia Legal Ethics Opinion Summaries

In this case, the parties consented to have their commercial dispute tried before a United States magistrate judge. But, allegedly unbeknownst to Defendant, the judge was longtime family friends with the lead trial lawyer for the plaintiff. Specifically, the lawyer had been a groomsman in the judge’s own wedding, and the judge officiated the wedding of the lawyer’s daughter three months before this lawsuit was filed. None of this information was disclosed to Defendant. After a twenty-day bench trial, the magistrate judge rendered judgment for the Plaintiff, awarding $124.5 million, including over $100 million in trebled damages. After the issuance of the judgment and award, Defendant learned about the undisclosed longstanding friendship and sought to have the magistrate-judge referral vacated. The district judge denied the request and denied discovery on the issue. Defendant appealed.   The Fifth Circuit vacated. The court concluded that the facts asserted here, if true, raise serious doubts about the validity of Defendant’s constitutionally essential consent to have its case tried by this magistrate judge. Further, the court explained remand was necessary because the facts were not sufficiently developed for the court to decide whether Defendant’s consent was validly given or whether vacatur of the referral was otherwise warranted. Accordingly, the court remanded for an evidentiary inquiry. View "I F G Port Hold v. Lake Charles Harbor" on Justia Law

Amanda Bryant filed suit against State Farm Automobile Insurance Company (State Farm) and its attorneys, Henley, Lotterhos & Henley, PLLC (HLH), claiming negligence, malicious prosecution, abuse of process, and intentional infliction of emotional distress based on HLH’s actions in a prior subrogation claim. HLH argued in a Motion to Dismiss or, In the Alternative, Motion for Summary Judgment that it was not a proper party to this lawsuit because it was the legal representative of the adverse party in the prior subrogation matter. For this reason, HLH argued it did not owe a duty to Bryant that could give rise to tort liability. The trial court disagreed with HLH and denied its motion. The Mississippi Supreme Court granted HLH’s petition for interlocutory appeal. Based on caselaw, the Supreme Court reversed the trial court’s order and rendered judgment in favor of HLH. Because State Farm was still party to the action, the case was remanded to the trial court for continuation of the proceedings. View "Henley, Lotterhos & Henley, PLLC v. Bryant" on Justia Law

The 2010 ACA (Patient Protection and Affordable Care Act; Health Care and Education Reconciliation Act) created a three-year Risk Corridors program with the creation of new health-insurance marketplaces, which presented uncertain risks for participating health-insurance companies. Qualified health-plan issuers (QHP issuers) that offered their products in the new marketplaces were entitled to payments from HHS if they suffered sufficient losses, 42 U.S.C. 18062(b).The government failed to make those payments. QHP issuers sued under the Tucker Act, 28 U.S.C. 1491(a)(1). In two such lawsuits, the Quinn law firm was lead counsel for classes of QHP issuers seeking payments. In the opt-in notices sent to potential class members with court approval, Quinn represented that it would seek attorney’s fees out of any recovery, that it would seek no more than 5% of any judgment or settlement, and that the Claims Court would determine the exact amount by considering how many issuers participated, the amount at issue, and a “lodestar cross-check” (based on hours actually worked). Meanwhile, the Supreme Court, in other cases, held that QHP issuers were entitled to collect ACA-promised payments.The Claims Court entered judgments in favor of the classes, totaling about $3.7 billion, then awarded Quinn 5% of the common funds, rejecting objections. The total fee was about $185 million. The Federal Circuit vacated. The Claims Court’s analysis was inconsistent with the class opt-in notices and did not adequately justify the extraordinarily high award. View "Health Republic Insurance Co. v. United States" on Justia Law

Larry Nassar, who was affiliated with USAG, sexually assaulted hundreds of female athletes. After Nassar’s conduct was revealed, USAG faced multiple lawsuits and investigations. USAG and its insurers, including Liberty, litigated questions about insurance coverage in an adversary proceeding before a bankruptcy court. In a previous appeal, the Seventh Circuit affirmed the decision that Liberty had a duty to defend USAG. There were ancillary disputes over the amounts of attorneys’ fees that Liberty owed USAG. While an appeal was pending, USAG sought to enforce the order entitling it to reimbursement. Liberty resisted, asserting that large portions of the fees USAG claimed were not reasonable and necessary. The bankruptcy court recommended that the district court award USAG nearly all the requested fees. The district court adopted most of the bankruptcy court’s findings and entered judgment for USAG.The Seventh Circuit affirmed. The lower courts correctly concluded that USAG was entitled to a presumption that the fees it incurred were reasonable and necessary despite Liberty’s challenges to the nature of USAG’s supervision of outside counsel and the proportion of fees paid by USAG. The particular form of supervision suggested by Liberty and the policyholder’s full payment of all the fees it incurred are not prerequisites for that presumption. Liberty failed to rebut the presumption. View "USA Gymnastics v. Liberty Insurance Underwriter, Inc." on Justia Law

The issue this case presented for the Pennsylvania Supreme Court's review centered on whether Appellant’s legal malpractice claims against Appellees, her former attorneys, were barred under the Court’s decision in Muhammad v. Strassburger, McKenna, Messer, Shilobod & Gutnick, 587 A.2d 1346 (Pa. 1991), which held that a plaintiff could not sue his attorney on the basis of the adequacy of a settlement to which the plaintiff agreed, unless the plaintiff alleged the settlement was the result of fraud. Appellant, Dr. Ahlam Kahlil, owned a unit in the Pier 3 Condominiums in Philadelphia; the unit was insured by State Farm Fire and Casualty Company (“State Farm”). The Pier 3 Condominium Association (“Pier 3”) was insured under a master policy issued by Travelers Property Casualty Company of America (“Travelers”). In May 2007, Appellant sustained water damage to her unit as a result of a leak in the unit directly above hers, which was owned by Jason and Anne Marie Diegidio. Due to the water damage, Appellant moved out of her unit and stopped paying her condominium fees. Appellant filed suit against State Farm and Travelers, alleging breach of contract and bad faith, and against the Diegidios, alleging negligence. A year later, Pier 3 filed a separate lawsuit against Appellant for her unpaid condominium fees and charges. In affirming in part and reversing in part the trial court, the Supreme Court found that by finding Appellant’s claims were barred under Muhammad, the lower courts ignored other averments in Appellant’s complaint which did not allege fraud, but, rather, alleged legal malpractice by Appellees in allowing Appellant to enter into a settlement agreement in the Water Damage Case that subsequently precluded her from raising her desired claims in the Fees Case, while repeatedly advising Appellant that the settlement agreement would not preclude those claims. "[A]s our review of Appellant’s complaint demonstrates that she was not merely challenging the amount of her settlement in the Water Damage Case, but rather alleged that Appellees provided incorrect legal advice regarding the scope and effect the Travelers Release, we hold that Muhammad’s bar on lawsuits based on the adequacy of a settlement is not implicated in this case." View "Khalil v. Williams" on Justia Law

Lawyers brought claims against schools under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400. After the claims failed, the schools sought their attorney’s fees from the lawyers under the IDEA’s fee-shifting provision. The School Districts alleged that, during the administrative process, the attorneys presented sloppy pleadings, asserted factually inaccurate or legally irrelevant allegations, and needlessly prolonged the proceedings. The lawyers asked their insurer, Wesco, to pay the fees. Wesco refused on the ground that the requested attorney’s fees fell within the insurance policy’s exclusion for “sanctions.”The Sixth Circuit affirmed summary judgment in favor of Wesco. The IDEA makes attorney misconduct a prerequisite to a fee award against a party’s lawyer, so the policy exclusion applied. The court noted that the legal community routinely describes an attorney’s fees award as a “sanction” when a court grants it because of abusive litigation tactics. View "Wesco Insurance Co. v. Roderick Linton Belfance, LLP" on Justia Law

In 2015, Elite sued Legacy for breach of contract. Attorney Bredahl received a $5,000 check from Legacy. On December 30, 2015, and February 26, 2016, he appeared on behalf of Legacy in the Elite suit. Bredahl did not respond to discovery, resulting in an order banning Legacy from putting on evidence at trial. Legacy later retained Hankey Law but neither Legacy nor any defense counsel attended the March 2017 trial. Elite won a $1 million judgment. Elite and Legacy settled the suit for $575,000 in 2018.In October 2017, ALPS issued an insurance policy to Bredahl with loss inclusion starting October 1, 2016. In January 2018, Legacy notified ALPS of a potential claim. Legacy sued Bredahl in April 2019. Bredahl notified ALPS, which indicated that it would defend that suit subject to a complete reservation of rights, then sought a declaratory judgment that the Policy did not apply to the Legacy suit.The district court held that ALPS had no duty to indemnify or defend Bredahl. The Eighth Circuit affirmed. The Policy does not apply to the Legacy suit if the “Insured” knew or reasonably should have known, as of the October 1, 2017 effective date, that his conduct during the Elite suit might be the basis for a “demand for money” against him. Before that date, Bredahl knew of acts or omissions in the Elite suit and reasonably should have known Legacy might bring a claim against him, View "ALPS Property & Casualty Insurance Co. v. Legacy Steel Building, Inc." on Justia Law

Letgolts and Plattner (plaintiffs) remodeled their home in 2008. The contractor, Pinchevskiy, did some demolition and then walked away, causing extensive damage to the home. The plaintiffs retained attorney Marks, who sued Pinchevskiy, the plaintiffs’ home insurer, and their insurance agent who allegedly inaccurately advised the plaintiffs that their existing homeowners' policy would cover possible property damage by Pinchevskiy. The complaint detailed property damage but did not mention personal injury. Marks withdrew from the case in 2012. The plaintiffs retained Pierce, who secured a default judgment against Pinchevskiy in 2015; his insurer, National, filed for liquidation before Pierce could collect on the judgment. Pinchevskiy was bankrupt.The plaintiffs sued Pierce for negligent delay in seeking recovery from National. Pierce’s lawyers argued the plaintiffs could never have prevailed against National because Pinchevskiy’s policy did not cover construction defects. The court entered judgment for Pierce. The court of appeal affirmed, rejecting the plaintiffs’ attempt to assert a personal injury claim based on Plattner’s alleged 2008 fall from temporary stairs installed by Pinchevskiy. National’s policy did cover personal injuries but the tardy, uncorroborated claim was at odds with the detailed lists of problems given to the insurer years before. Pursuing insurance money from National was a lost cause from the start, so whether Pierce committed malpractice did not matter, View "Letgolts v. David H. Pierce & Associates PC" on Justia Law

The Georgia Supreme Court granted certiorari to consider whether the Court of Appeals properly identified the accrual date of the legal malpractice claim in this case. The court determined that the accrual date for the malpractice action based on failure to protect an underinsured motorist (“UM”) claim was the date on which the plaintiff’s attorney first became aware that the plaintiff potentially had a UM claim with available coverage. Under the facts of this case, the Supreme Court disagreed, holding that the accrual date was the last day counsel could protect the client’s UM claim by lawfully effecting service on the UM carrier. View "Armstrong et al. v. Cuffie et al." on Justia Law

The Louisiana Supreme Court granted this writ application to determine whether “collectibility” was a relevant consideration in a legal malpractice action. Specifically, the issue presented was whether plaintiff’s damages in this legal malpractice action were limited to the amount she could have actually collected on a judgment against the tortfeasor in the underlying lawsuit. Elaine Ewing was injured in an automobile accident in 2015, when her vehicle was hit by a vehicle driven by Marc Melancon. Her counsel failed to forward the original petition for damages within seven days as required by La. R.S. 13:850. The original petition was filed on April 22, 2016, after the one-year prescriptive period had passed. Ms. Ewing’s suit was dismissed on an exception of prescription. Ms. Ewing subsequently filed a legal malpractice action against her attorney and Westport Insurance Corporation, counsel's malpractice insurer. Defendants filed a motion for partial summary judgment asserting the court should apply the “collectibility rule.” Defendants alleged Ms. Ewing’s recovery could be no greater than her potential recovery in the underlying personal injury lawsuit, and recovery in this case should have been capped at Mr. Melancon’s insurance policy limits. The Supreme Court held that proof of collectibility of an underlying judgment was not an element necessary for a plaintiff to establish a claim for legal malpractice, nor could collectibility be asserted by an attorney as an affirmative defense in a legal malpractice action. View "Ewing v. Westport Ins. Co., et al." on Justia Law