Justia Legal Ethics Opinion Summaries

Gulfport OB-GYN was a professional association of physicians specializing in obstetrical and gynecological care. In 2008, it hired the law firm Dukes, Dukes, Keating & Faneca, P.A., to assist in negotiating the hiring of Dr. Donielle Daigle and to prepare an employment agreement for her. Five years later, Dr. Daigle and another physician left Gulfport OB-GYN to establish their own practice. They sued Gulfport OB-GYN for unpaid compensation and sought a declaratory judgment that the noncompetition covenant was unenforceable. The departing physicians ultimately prevailed, with the chancery court holding the noncompetition covenant not applicable to Dr. Daigle because she left voluntarily and was not “terminated by the Employer.” The chancery court decision was initially appealed, but the dispute was later settled through mediation when Gulfport OB-GYN agreed to pay Dr. Daigle $425,000. Gulfport OB-GYN then filed this legal-malpractice suit against the attorney who drafted the employment agreement and her firm. The circuit court granted summary judgment to the defendants after finding Gulfport OB-GYN had failed to produce sufficient evidence that it would have received a better deal but for the attorneys’ alleged negligence, i.e., Gulfport OB-GYN failed to prove that the alleged negligence caused it damages. The Mississippi Supreme Court agreed and affirmed. View "Gulfport OB-GYN, P.A. v. Dukes, Dukes, Keating & Faneca, P.A." on Justia Law

Cases consolidated for review came to the Court of Appeal as part of ongoing litigation between The National Grange of the Order of Patrons of Husbandry (the National Grange) and the Order’s relatively recent charter the California State Grange (the California Grange) (collectively, respondents) against the Order’s former California charter, now known as the California Guild (the Guild), which operated the California Grange Foundation (the Foundation) when the Guild’s charter was previously active. At issue was the disqualification of the law firm representing the Guild and the Foundation following its hiring of an attorney who previously worked for the law firm representing the National Grange. The trial court granted respondents’ motions to disqualify Ellis Law Group in litigation initiated in 2012 while the court’s prior order granting summary judgment in favor of the National Grange was pending on appeal in this court. In litigation initiated in 2016 by only the California Grange against the Foundation, the trial court granted the California Grange’s motion to disqualify Ellis Law Group too. The Court of Appeal found no reversible error in disqualifying the Ellis Law Group, and affirmed the trial court's orders. View "The Nat. Grange of the Order of Patrons of Husbandry v. California Guild" on Justia Law

Ahmed co‐owned an LLC that owned a condominium building. Ahmed recruited individuals to pose as buyers for the building's units and to submit fraudulent loan applications to lenders, including Fifth Third. The participants split the loan proceeds; no payments were made on the loans. Kaufman was the seller's attorney for every closing. The closings were conducted by Traditional Title at Kaufman’s law office. Traditional received closing instructions from Fifth Third to notify it immediately of any misrepresentations and to suspend the transaction if “the closing agent has knowledge that the borrower does not intend to occupy the property.” Kaufman concealed the buyers’ misrepresentations and instructed closing agents to complete closings even when buyers were purchasing multiple properties. Ahmed and Kaufman extended the scheme to other buildings. Although Kaufman testified that he was not aware of the fraud, Ahmed testified that Kaufman knew the buyers were part of the scheme. Two closing agents testified that they informed Kaufman about misrepresentations in loan applications. The Seventh Circuit affirmed a fraud judgment for Fifth Third. Kaufman participated individually in each closing as counsel and personally directed Traditional’s employees to conceal the fraud from Fifth Third, for his personal gain. The judgment against Kaufman was not derived solely from Traditional’s liability, based on his membership in the LLC, so the Illinois LLC Act does not bar his liability. Kaufman is not shielded by being the attorney for the seller in the fraudulent transactions. View "Fifth Third Mortgage Company v. Kaufman" on Justia Law

Nutmeg LLC, formerly managed by Goulding, served as an investment advisor and sole general partner of more than a dozen investment funds, each a limited partnership under Illinois or Minnesota law. Goulding’s management of the Funds ended in 2009, when the SEC brought an enforcement action against him, Nutmeg, and others under the Investment Advisors Act of 1940, alleging that Nutmeg misappropriated client assets and failed to maintain proper records. The district court found that the SEC made the showing necessary to warrant the issuance of a restraining order prohibiting Goulding from managing the Funds and granted the SEC’s unopposed motion to appoint attorney Weiss as receiver for Nutmeg. Unsatisfied with Weiss’s performance, Goulding and limited partners from certain funds managed by Nutmeg filed an individual and derivative action on behalf of the Funds, alleging breach of fiduciary duty and legal malpractice. The court dismissed the federal securities law claim, claims against Nutmeg, all legal malpractice claims against Weiss and her firm, and two breach of fiduciary duty claims. The Seventh Circuit Affirmed, holding that even when viewed in the light most favorable to the plaintiffs, no reasonable jury could find that either Weiss or her firm willfully and deliberately violated any fiduciary duties. View "Goulding v. Weiss" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment to defendant in an action brought by plaintiffs and Glow Hospitality alleging claims against defendant, an attorney, for fraud and breach of fiduciary duties. Plaintiffs also alleged a vicarious liability claims against defendant's law firm.Count I is premised on a factually-complex relationship and intertwined history and on allegations that defendant failed to disclose information, failed to investigate, made false statements to the state court, and, primarily, engaged in dual representation. The court held that the district court correctly granted summary judgment, because Glow failed to support Count I, which lies outside the jury's common knowledge, with expert testimony. Count II alleged that defendant breached his fiduciary duties to Glow by failing to conduct further investigation into Glow's ownership interests, failing to update his opinion letter to First National, making false representations in his affidavits to the state court, and negligently overseeing the operation of Glow. The court held that Minn. Stat. 544.42 applies to Count II, and Glow's failure to comply with section 544.42's affidavit requirements mandated dismissal of this claim. Finally, the court held that the fraud claims were property dismissed, summary judgment on the aiding and abetting claim was proper, and the vicarious liability claims failed. View "Sandhu v. Kanzler" on Justia Law

RMG sued Harmelech in 2006. Attorney Mac Naughton represented Harmelech in that suit for 10 weeks. The relationship ended in a fee dispute. After he withdrew, the case settled with a consent judgment against Harmelech. Mac Naughton pursued Harmelech by acquiring rights to that judgment. In 2014, Mac Naughton and his company, Casco sued Harmelech to collect the RMG judgment and to set aside a conveyance. In 2015, Judge Holderman disqualified Mac Naughton from attempting to collect the judgment personally and from representing Casco in its collection efforts. Mac Naughton defied that order. In 2018, Judge Feinerman dismissed the 2014 claims predicated on the RMG judgment as a sanction for willful defiance of the Holderman Order. In 2016, Mac Naughton sued third parties to collect for himself money owed to Harmelech. Judge Blakey dismissed that case as a sanction for violating court orders. In 2017, Mac Naughton sued Harmelech to set aside another property conveyance. Judge Durkin dismissed the case on the same grounds. The Seventh Circuit affirmed in the consolidated cases. The Holderman Order disqualified Mac Naughton. It barred him from pursuing his former clients to collect on the RMG judgment. Mac Naughton willfully defied disqualification. The judges were within their discretion in sanctioning Mac Naughton by dismissing the actions he should not have brought. Regardless of whether Mac Naughton agreed with the Holderman Order, he had to follow it until it was undone through proper channels. View "Mac Naughton v. Harmelech" on Justia Law

Jared Karstetter worked for labor organizations representing King County, Washington corrections officers for over 20 years. In 1987, Karstetter began working directly for the King County Corrections Officers Guild (Guild). Throughout his employment with the Guild, Karstetter operated under successive 5-year contracts that provided for just cause termination. Eventually, Karstetter formed his own law firm and worked primarily for the Guild. He offered services to at least one other client. His employment contracts remained substantially the same. Karstetter's wife, Julie, also worked for the Guild as Karstetter's office assistant. In 2016, the King County ombudsman's office contacted Karstetter regarding a whistleblower complaint concerning parking reimbursements to Guild members. The Guild's vice-president directed Karstetter to cooperate with the investigation. The Guild sought advice from an outside law firm, which advised the Guild to immediately terminate Karstetter. In April 2016, the Guild took this advice and, without providing the remedial options listed in his contract, fired Karstetter. In response, Karstetter and his wife filed suit against the Guild, alleging, among other things, breach of contract and wrongful discharge in violation of public policy. The Guild moved to dismiss the suit for failure to state a claim. The trial court partially granted the motion but allowed Karstetter's claims for breach of contract and wrongful termination to proceed. On interlocutory review, the Court of Appeals reversed and remanded the case, directing the trial court to dismiss Karstetter's remaining breach of contract and wrongful termination claims. The Washington Supreme Court found that “the evolution in legal practice has uniquely affected the in-house attorney employee and generated unique legal and ethical questions unlike anything contemplated by our Rules of Professional Conduct (RPCs).” In this case, the Court found in-house employee attorneys should be treated differently from traditional private practice lawyers under the RPCs. “Solely in the narrow context of in-house employee attorneys, contract and wrongful discharge suits are available, provided these suits can be brought without violence to the integrity of the attorney-client relationship.”Karstetter alleged legally cognizable claims and pleaded sufficient facts to overcome a CR 12(b)(6) motion of dismissal. The Court of Appeals' ruling was reversed. View "Karstetter v. King County Corr. Guild" on Justia Law

Appellant Stephan Palmer, Sr. appealed the grant of summary judgment in favor of appellee, Attorney Mark Furlan. While incarcerated, appellant filed a petition for postconviction relief (PCR). Attorney Furlan, an ad hoc public defender, was assigned to represent appellant in the PCR proceedings. The petition was litigated until the parties agreed to settle, arriving at a proposed stipulation to modify appellant’s sentence. December 23, 2015 the PCR court granted the parties’ stipulation motion. The entry order was immediately emailed to the criminal division; the criminal division issued an amended mittimus to the Commissioner of Corrections the same day; and the following day, the Department of Corrections received the amended mittimus and recalculated appellant’s sentence in accord with the PCR court’s order amending the sentence. Appellant was released from incarceration on December 24. Appellant then filed a civil action against Attorney Furlan, alleging legal malpractice. Not knowing that immediate release was at stake, the PCR court took more time than it would have otherwise in scheduling a hearing and approving the stipulation. Appellant characterized the length of incarceration between when he posited he would have been released if Attorney Furlan had more aggressively attempted to get the PCR court to act in an expedited manner and when he was actually released as wrongful and the basis for his damages. In affirming summary judgment, the Vermont Supreme Court concluded "The proof provided here, or rather the lack thereof, leaves all reasonable minds to speculate as to whether or not the PCR court would have: not scheduled a hearing on the motion; scheduled a hearing on the motion sooner than it did; issued an order on the motion in a shorter period of time after the hearing; come to the same conclusions and granted the stipulation motion; or behaved in any of the seemingly endless alternative manners a reasonable person could posit. Appellant’s argument simply leaves too much to speculation, which is something this Court and trial courts will not do when examining a motion for summary judgment." View "Palmer v. Furlan" on Justia Law

From 2011 to 2015, Appellant Attorney Joanna Vogel represented plaintiff-respondent Angele Lasalle in the dissolution of a registered domestic partnership with Minh Tho Si Luu. Lasalle repeatedly failed to provide discovery in that case, and the court defaulted her as a terminating sanction. She said her failure to provide discovery was caused by Vogel not keeping her informed of discovery orders, so she sued Vogel for legal malpractice. A default judgment was entered against Vogel. Vogel successfully moved to set aside the default judgment pursuant to Code of Civil Procedure section 473(b). In response, LaSalle’s new lawyer asked the trial court to take judicial notice of state bar disciplinary proceedings against Vogel which stayed her ability to practice law. The set aside motion was then denied, and a year later, a default judgment was entered against Vogel for $1 million. She appealed the default and denial of her motion to set aside the default. The Court of Appeal reversed: “[w]e sympathize with the court below and opposing counsel. We have all encountered dilatory tactics and know how frustrating they can be. But we cannot see this as such a situation, and cannot countenance the way this default was taken, so we reverse the judgment.” View "Lasalle v. Vogel" on Justia Law

Francis Ruybalid committed numerous ethical violations arising out of cases that he either prosecuted or supervised while he was the District Attorney for the Colorado Third Judicial District. He argued he was entitled to the attorney’s fees and costs he incurred while defending these allegations. The counties of the Third Judicial District refused to reimburse Ruybalid for these expenses. The Colorado Supreme Court determined that because Ruybalid’s ethical violations were at times committed recklessly or knowingly, his attorney’s fees and costs were not necessarily incurred in the discharge of his official duties, therefore, he was not entitled to reimbursement for fees. View "Ruybalid v. Bd. of Cty. Comm'rs" on Justia Law