Justia Legal Ethics Opinion Summaries

Attorney Stilp represented Miller in claims concerning the construction of Miller’s house by contractor Herman. The district court dismissed. Stilp recommended that Miller terminate the action based on state law. Miller told Stilp that needed time to consider whether to refile., Herman filed a Chapter 7 bankruptcy petition. Herman’s bankruptcy attorney, Jones, prepared schedules listing the addresses of all creditors. Miller was listed as a creditor on the bankruptcy schedules and creditor matrix, but his address was listed as “c/o Thomas Stilp, Attorney” at Stilp’s office address. Notice of the bankruptcy was delivered to Stilp’s office but was routed to another attorney. Neither Stilp nor Miller was informed of the notice. Miller subsequently informed Stilp that he wanted to refile his complaint against Herman. Stilp then discovered that Herman had filed for bankruptcy protection. Miller did not take immediate action and, about a month later, the bankruptcy court entered a discharge order. About 13 months after he learned of Herman’s bankruptcy petition, Miller moved to reopen the case (11 U.S.C. 727(a)(4)(A)). The bankruptcy court denied the motion. The district court and Seventh Circuit affirmed, finding that Miller had been properly served when notice was delivered to Stilp’s firm.View "Miller v. Herman" on Justia Law

In her representation of a client charged with alien smuggling, 8 U.S.C. 1324, Migdal, an attorney who has served as an Assistant Federal Public Defender for nearly 25 years, had a number of disagreements with the federal prosecutor, who ultimately moved for sanctions against Migdal. The prosecutor failed to follow Department of Justice policy requiring supervisory approval of sanctions requests. Despite the government withdrawing the motion and indicating that it did not believe that Migdal acted in bad faith, the district court entered orders strongly publicly reprimanding Migdal. The Sixth Circuit vacated, stating that the record does not support any basis for the orders. View "United States v. Llanez-Garcia" on Justia Law

Steidl and Whitlock were convicted of 1987 murders, largely based on testimony by two supposed eyewitnesses. Long after the convictions, an investigation revealed that much of the testimony was perjured and that exculpatory evidence had been withheld. The revelations led to the release of the men and dismissal of all charges. Steidl had spent almost 17 years in prison; Whitlock had spent close to 21 years. They sued. By 2013, both had settled with all defendants. Because the defendants were public officials and public entities, disputes arose over responsibility for defense costs. National Casualty sought a declaratory judgment that it was not liable for the defense of former State’s Attorney, McFatridge, or Edgar County, agreeing to pay their costs under a reservation of rights until the issue was resolved. The Seventh Circuit ruled in favor of National Casualty. In another case McFatridge sought a state court order that the Illinois Attorney General approve his reasonable expenses and fees; the Illinois Supreme Court rejected the claim. In a third case, National Casualty sought a declaratory judgment that another insurer was liable for costs it had advanced. The Seventh Circuit affirmed that the other company is liable. It would be inequitable for that company to benefit from National’s attempt to do the right thing, especially since it did not do the right thing and contribute to the defense costs under a reservation of rights. View "Nat'l Cas. Co. v. White Mountains Reinsurance Co." on Justia Law

This case arose when plaintiff filed an employment discrimination suit against his employer, Wal-mart. Plaintiff's attorney represented to the court that plaintiff had pled a gender discrimination claim when he had not. The district court subsequently reprimanded the attorney and imposed Rule 11 sanctions on her. The attorney appealed. The court concluded that the district court did not apply the correct legal standard where the district court's analysis indicated that it was applying an objective reasonableness test. Under the proper standard, pursuant to In re Pennie & Edmonds LLP, sua sponte sanctions should issue only upon a finding of subjective bad faith. Accordingly, the court reversed and vacated the district court's judgment. View "Muhammad v. Wal-Mart Stores East, L.P." on Justia Law

Brindley and Thompson entered appearances as counsel for one of two defendants charged with drug offenses. A joint trial was scheduled. Both moved for continuance; the court set a hearing and ordered defendants counsel to be present. Thompson was present; Brindley was not. At a subsequent status conference, the court scheduled a jury trial and set a deadline for pretrial motions. Britton did not file any motions. On November 6, the court set a status conference for November 26 to discuss pretrial motions and ordered Brindley “to be present in person … not through other counsel.” Defendant appeared, but Brindley and Thompson did not and did not contact the court. The court set a show cause hearing; Brindley moved for continuance, claiming that he had not seen the order and had obligations in another trial. He apologized. The district court denied the motion and ordered Brindley to appear on November 30. Brindley appeared, but the court rejected his explanations as lies, held Brindley in contempt under Fed. R. Crim. P. 42(b), and remanded him to custody for two days. The Seventh Circuit vacated. The court erred in using Fed. R. Crim. P. 42(b)ʹs summary contempt procedures, which apply only when there is a compelling reason for an immediate remedy, contempt occurred in the judge’s presence, and the judge saw or heard the contemptuous conduct. The court noted that if the district court chooses, on remand, to proceed under 18 U.S.C. 401, a different judge will preside. View "United States v. Britton" on Justia Law

After the mutual funds, known as the Lancelot or Colossus group, folded in 2008, the trustee in bankruptcy filed independent suits or adversary actions seeking to recover from solvent third parties, including the Funds’ auditor, law firm, and some of the Funds’ investors, which the Trustee believes received preferential transfers or fraudulent conveyances. The Funds had invested in notes issued by Thousand Lakes, which was actually a Ponzi scheme, paying old investors with newly raised money. In these proceedings the trustee contends that investors who redeemed shares before the bankruptcy received preferential transfers, 11 U.S.C. 547, or fraudulent conveyances, 11 U.S.C. 548(a)(1)(B) and raised a claim under the Illinois fraudulent-conveyance statute, using the avoiding power of 11 U.S.C. 544. The bankruptcy court dismissed the claims against the law firm that prepared circulars for the Firms. The Seventh Circuit affirmed. No Illinois court has held that failure to report a corporate manager’s acts to the board of directors exposes a law firm to malpractice liability. The complaint does not plausibly allege that alerting the directors would have made a difference. View "Peterson v. Winston & Strawn, LLP" on Justia Law

This case arose after the settlement of Guard v. American Home Products, Inc., which was brought by Kentucky residents who had taken the diet drug known as Fen-Phen. Each Appellant was a plaintiff in the Guard case and was represented under a contingent fee contract by Appellees, a team of four attorneys. Appellants filed a complaint alleging that Appellees breached their fiduciary duties by wrongfully retaining or improperly disbursing a portion of the Guard case settlement money that should have gone to Appellants. The trial court granted partial summary judgment to Appellants, finding three of the attorneys breached their fiduciary duty. The court of appeals reversed and remanded the case against the three attorneys for further proceedings. The Supreme Court reversed the court of appeals' opinion regarding the issue of the three attorneys' breach of fiduciary duty and reinstated the partial summary judgment entered against them, holding, primarily, (1) the facts established a breach of fiduciary duty that entitled Appellants to summary judgment on the three attorneys' liability as a matter of law; and (2) the court of appeals did not err by declining to review the trial court's denial of summary judgment against the fourth attorney, as the order was not appealable. View "Abbott v. Chelsea " on Justia Law

Thomas Konrad accepted a loan from Bob Law upon the advice of attorney Douglas Kettering. Law and Kettering had been partners in at least one of Law's business ventures and had an attorney-client relationship. Thomas's parents (the Konrads) provided their land as collateral for Thomas's loan. Thomas later defaulted on the note. Seven months after Kettering passed away, Law brought suit to enforce the note and mortgage against Thomas and the Konrads. Law settled with Thomas and the Konrads. Law then sought to recover from the Kettering Estate the amounts outstanding on the note, claiming that Kettering's acts - including his conflict of interest with Law and his alleged fraudulent inducement of the Konrads into signing the note and mortgage - voided the note and mortgage, and therefore, the Estate was liable to Law for the interest due on the note. The circuit court granted summary judgment for the Estate. The Supreme Court affirmed, holding (1) the contract between Law and Thomas did not contravene public policy because it was drafted by an attorney who failed to disclose a conflicting attorney-client relationship; and (2) the theory that Kettering fraudulently induced the Konrads into signing the note and mortgage rested on mere speculation. View "Law Capital, Inc. v. Kettering" on Justia Law

The Kivers retained C&T, an Illinois law firm, to prepare trusts to benefit their daughters, Diane and Maureen, among others. Maureen and Diane each served as trustee of various trusts. Maureen died in 2007. Her husband, Minor, represents Maureen’s estate, which filed suit against C&T, alleging that C&T failed to disclose the existence and terms of certain trusts to Maureen, to her detriment, and failed to make distributions to her. The estate filed a separate state court suit against Diane, alleging that Diane breached her duties as trustee by failing to disclose the existence of certain trusts to Maureen or make distributions to her. Diane was a client of C&T during the relevant period. The district court entered an agreed protective order governing discovery disclosure to deal with privilege issues and denied the estate’s motion to compel production. The estate violated the protective order. The district court imposed sanctions and dismissed several of the estate’s claims. The Seventh Circuit affirmed, stating that “The complexity of the multiple trusts … the untimely death of Maureen, the pursuit of concurrent state and federal suits … the length of this litigation, and the disorderly nature of the estate’s presentation… evoke a middle installment of Bleak House." View "Scott v. Chuhak & Tecson, PC" on Justia Law

Hinds County Youth Court Judge William Skinner, II took action in a case in which he was recused and abused the contempt power. Judge Skinner and the Mississippi Commission on Judicial Performance submitted a Joint Motion for Approval of Recommendations, recommending that Judge Skinner be publicly reprimanded, fined $1,000, and assessed $100 in costs. The Supreme Court found that the more appropriate sanction was a thirty-day suspension without pay, a public reprimand, a $1,000 fine, and $100 in costs. Furthermore, the Court modified "Mississippi Commission on Judicial Performance v. Gibson," (883 So. 2d 1155 (Miss. 2004)) and its progeny to the extent that they mandated the Court examine moral turpitude as a factor in determining sanctions. Instead, the Court and the Commission should examine the extent to which the conduct was willful and exploited the judge's position to satisfy his or her personal desires. View "Mississippi Commission on Judicial Performance v. Skinner, II" on Justia Law