Justia Legal Ethics Opinion Summaries
Articles Posted in Legal Ethics
Thrash v. Deutsch, Kerrigan & Stiles, LLP
This appeal arises from a trial court’s grant of summary judgment dismissing Ike Thrash’s and Dawn Investments LLC’s claims for negligence and breach of fiduciary duty against Deutsch Kerrigan & Stiles, LLP (DKS). The dispute underlying this appeal arose over the purchase of land at a trustee sale. Joel Blackledge, the acting trustee, prepared a trustee's deed in favor of Dawn Investments. Thrash deposited $5.6 million dollars into the trust account of his attorney, Charliene Roemer. The trustee’s deed was then delivered to Dawn Investments, and Thrash authorized the transfer of the funds. The former owner of the property, Coastal Land Development Company, filed for Chapter 11 Bankruptcy. Neither Thrash nor Blackledge was aware of the bankruptcy filing, but William Little Jr., Coastal’s bankruptcy attorney, notified Roemer through email. Subsequently, Thrash and Roemer discovered that the foreclosure sale had been conducted improperly. According to statute, the foreclosure sale must occur one week
following the last day of publication; however, the foreclosure sale was conducted one day after the last day of publication. Thrash notified the seller of the error and demanded the funds be returned, but the request was refused. DKS filed suit in circuit court against Thrash, Dawn Investments, and the seller seeking a declaratory judgment that the failure of Blackledge to conduct a foreclosure sale properly was not the proximate cause of Thrash’s and Dawn Investments’ damages. Thrash and Dawn Investments counterclaimed, alleging that Blackledge was negligent and breached his fiduciary duty by improperly conducting the foreclosure sale, leading to Thrash and Dawn Investments to suffer damages. The parties agreed to dismiss DKS’s complaint for declaratory judgment and proceed under Thrash’s and Dawn Investments’ counterclaim. The parties were realigned, naming Thrash and Dawn Investments as Plaintiffs and DKS as Defendant. Both parties filed motions for summary judgment, and the trial court granted DKS’s motion. The Dawn Plaintiffs then filed this appeal. The Supreme Court found that the trial court was correct in finding that DKS did not owe the Dawn Plaintiffs a duty. View "Thrash v. Deutsch, Kerrigan & Stiles, LLP" on Justia Law
Kelly v. Orr
James Kelly, as trustee of the Beverly Snodgrass Clark Inter Vivos 1999 Separate Property Trust, sued Barbara J. Orr, Joseph Holland, Gretchen Shaffer, and DLA Piper LLP (US) (Defendants) for professional negligence in relation to legal advice they provided to his predecessor trustee of the Trust. Defendants demurred on statute of limitations grounds, arguing his action was barred by the one-year statute of limitations under Code of Civil Procedure section 340.6. The trial court sustained Defendants' demurrer without leave to amend, and Kelly filed a timely notice of appeal. On review of the matter, the Court of Appeal concluded the statute of limitations was tolled under section 340.6, subdivision (a)(2), until March 22, 2013, the date Kelly alleged Defendants ceased representation of Kelly's predecessor trustee. Because Kelly filed suit on February 27, 2014, less than one year after Defendants ceased representation of the predecessor trustee, the Court of Appeal concluded Kelly's action was not time-barred. The Court reversed the judgment and remanded for further proceedings. View "Kelly v. Orr" on Justia Law
Haggart v. United States
Landowners filed a class action suit challenging the federal Surface Transportation Board’s approval of King County using a Burlington Northern Railroad corridor as a public trail, pursuant the National Trails Systems Act Amendments of 1983, 16 U.S.C. 1247(d). The Claims Court approved a $110 million settlement agreement and an award to class counsel of approximately $35 million in attorney fees under the common fund doctrine. Two class members challenged the approval and award. The Federal Circuit vacated, noting that the government also challenged the approval, claiming that class counsel failed to disclose information necessary to allow class members to assess the fairness and reasonableness of the proposed settlement. The government had standing to raise its challenge under the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA), 42 U.S.C. 4654(c) and its arguments were not barred by waiver or estoppel.The Claims Court erred in approving a settlement agreement where class counsel withheld critical information not provided in the mailed notice to class members, but which had been produced and was readily available. Although a “common fund” exists in this case, the URA attorney fee provision provides for reasonable fees and preempts application of the common fund doctrine. View "Haggart v. United States" on Justia Law
Shirrod v. OWCP
Petitioner was awarded benefits under the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. 928(a), for injuries he sustained while working for PacificRim. On appeal, petitioner challenged the Board's decision affirming an ALJ's award of attorney's fees under the Act. The court concluded that the proxy market rate relied upon by the ALJ does not adequately reflect market rates for Portland, Oregon, the relevant community, because it is based entirely on data not tailored to Portland, even though reliable information about attorney billing rates in Portland was readily available. Therefore, the court held that the Board erred in affirming the attorney’s-fee award based on a proxy market rate not tailored to the “relevant community.” Accordingly, the court granted the petition for review, vacated the judgment, and remanded for further proceedings. View "Shirrod v. OWCP" on Justia Law
CFE Group, LLC v. FirstMerit Bank, N.A.
FirstMerit Bank sued CFE Group in federal court to enforce a promissory note and guaranties. The district court dismissed without prejudice, with leave to amend. Rather than amend, FirstMerit filed a notice of voluntary dismissal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). FirstMerit then filed a new complaint in an Illinois state court asserting the same claims. CFE moved to dismiss the new suit, arguing that the earlier federal dismissal meant that FirstMerit’s claims were barred by claim preclusion (res judicata). The state trial court denied the motion. CFE filed a new federal action, seeking to enjoin the state court under the relitigation exception to the federal Anti‐Injunction Act, 28 U.S.C. 2283. The district court refused, ruling that the dismissal of the first federal case was not a judgment on the merits and, therefore, did not preclude the state action. The Seventh Circuit affirmed, noting that CFE’s request for an injunction was also barred by the Full Faith and Credit Act, 28 U.S.C. 1738, and finding the appeal frivolous, so that sanctions on CFE are appropriate. View "CFE Group, LLC v. FirstMerit Bank, N.A." on Justia Law
M’Guinness v. Johnson
In 2013, M’Guinness sued fellow shareholder, Johnson, for claims arising out of the operation of a small construction firm, TLC. M’Guinness also sought involuntary dissolution and appointment of a receiver. Johnson cross-complained against M’Guinness, TLC, and the third TLC shareholder. Johnson was represented by the Casas law firm. The other parties moved to disqualify the firm, claiming it had been retained by TLC as its counsel in 2006, TLC never discharged the firm; the firm never withdrew as counsel. The court denied the motion, finding the evidence insufficient to warrant automatic disqualification based upon a concurrent representation conflict and rejecting a claim of subsequent representation conflict of interest. The court of appeal reversed. The firm continued to represent TLC through the time the lawsuit was instituted. If a party moving to disqualify an attorney establishes concurrent representation, the court is required, “in all but a few instances,” to automatically disqualify the attorney without regard to whether the subject matter of the representation of one client relates to the representation of the second client. While disqualification is a drastic measure and motions to disqualify are sometimes brought for improper tactical reasons, disqualification is not “generally disfavored,” and, in this situation, was required. View "M'Guinness v. Johnson" on Justia Law
Lanz v. Goldstone
Goldstone and Lanz are Santa Rosa attorneys. Lanz represented Garcia-Bolio in a “Marvin” action and had a contingency fee agreement. The suit settled on the third day of trial. There was a dispute as to the value of the settlement and Lanz’s fee. Lanz sued Bolio, who failed to respond, and her default was taken. Goldstone became Bolio’s lawyer and, following relief from default, filed an answer and a cross-complaint, alleging breach of fiduciary duty, professional negligence, and several ethical violations by Lanz, including that he acted with “moral turpitude.” Lanz defeated Bolio’s cross-claims, leaving only Lanz’s claim against Bolio. Lanz obtained a complete victory at trial, in a decision highly critical of Bolio’s conduct. Lanz then sued Goldstone for malicious prosecution. Goldstone filed an anti-SLAPP (strategic lawsuit against public participation) motion to dismiss. The court of appeal affirmed denial, concluding that Lanz met his burden under prong two of the anti-SLAPP analysis, demonstrating a probability of success on all three elements of malicious prosecution. View "Lanz v. Goldstone" on Justia Law
Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
Plaintiff engaged Defendants, a law firm and three individual attorneys, to represent him in connection with the prosecution of patents for Plaintiff’s inventions for a new screwless eyeglasses. After learning that Defendants had been simultaneously representing another client that competed with Plaintiff in the screwless eyeglass market, Plaintiff commenced this action alleging harm resulting Defendants’ failure to disclose the alleged conflict of interest. The trial judge dismissed Plaintiff’s complaint for failure to state a claim. The Supreme Judicial Court affirmed, holding (1) the simultaneous representation by a law firm in the prosecution of patents for two clients competing in the same technology area for similar inventions is not a per se violation of the Massachusetts Rules of Professional Conduct; and (2) based on the facts alleged in his complaint, Plaintiff failed to state a claim for relief. View "Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP" on Justia Law
Egan v. Pineda
Lawyer Spicer represented plaintiff Egan in a case that alleged sex discrimination and the creation of a hostile work environment. The complaint included allegations that Egan, at her deposition, emphatically denied. Spicer conceded that the allegations in the paragraph were false and claimed “proofreading error.” The case was ultimately dismissed for lack of personal jurisdiction. The district judge imposed a $5,000 sanction on Spicer for “bad faith” misconduct/ The Seventh Circuit affirmed, calling Spicer’s excuses “pathetic” and noting that it took six months for Spicer to correct the complaint. View "Egan v. Pineda" on Justia Law
Salazar v. District of Columbia
In this 42 U.S.C. Medicaid class action, the District appealed two separate awards of attorneys’ fees and expenses for work performed from 2010 to 2012. The court concluded that the district court acted within its discretion with respect to its determinations about the reasonableness of the attorneys' hours in the fee applications; the court rejected plaintiffs' threshold contention that the District waived its challenge to the LSI Laffey rates and determined that the district court did not abuse its discretion in selection of LSI Laffey rates in light of this court's intervening decision in Eley v. District of Columbia; and the court affirmed the award of fees requiring the District to pay for the time plaintiffs’ counsel spent responding to an appeal involving an effort to obtain information used by one of the District’s contractors because the information was necessary for plaintiffs' counsel to litigate some of the claims underlying the Settlement Order. Accordingly, the court affirmed the judgment. View "Salazar v. District of Columbia" on Justia Law