Justia Legal Ethics Opinion Summaries

South Carolina Attorney General Alan Wilson retained Respondents Willoughby & Hoefer, P.A., and Davidson, Wren & DeMasters, P.A., (collectively, the Law Firms) to represent the State in litigation against the United States Department of Energy (DOE). Wilson and the Law Firms executed a litigation retention agreement, which provided that the Law Firms were hired on a contingent fee basis. When the State settled its claims with the DOE for $600 million, Wilson transferred $75 million in attorneys' fees to the Law Firms. Appellants challenged the transfer, claiming it was unconstitutional and unreasonable. The circuit court dismissed Appellants' claims for lack of standing, and the South Carolina Supreme Court certified the case for review of the standing issue. The Supreme Court reversed the circuit court's finding that Appellants lacked public importance standing and remanded the case for the circuit court to consider the merits of Appellants' claims. View "South Carolina Public Interest Foundation, et al. v. Wilson" on Justia Law

Respondent, magistrate judge of Greenwood County Walter Martin, and the South Carolina Office of Disciplinary Counsel (ODC) entered into an Agreement for Discipline by Consent (Agreement) pursuant to Rule 21 of the Rules for Judicial Disciplinary Enforcement (RJDE) contained in Rule 502 of the South Carolina Appellate Court Rules (SCACR). In the Agreement, Respondent admitted misconduct, consented to any sanction ranging from a confidential admonition up to a six-month definite suspension, and agreed to attend anger management counseling and pay costs. This discipline stemmed from two incidents in 2021 in which Respondent used profanity toward plaintiff's counsel at a jury trial, and for complaining "in a loud and agitated manner" toward a scheduling clerk for failing to provide him timely notice of a jury trial. The South Carolina Supreme Court accepted the Agreement and issued a public reprimand. View "In the Matter of Walter Rutledge Martin of the Greenwood County Magistrate's Court" on Justia Law

The issue this case presented for the South Carolina Supreme Court's review centered on whether Respondent, the Murkin Group, LLC (Murkin), engaged in the unauthorized practice of law (UPL). In April 2017, the Wando River Grill (Restaurant) became dissatisfied with the service of its linen supplier (Cintas) and Cintas' ability to supply the type of linens Restaurant needed. Restaurant contacted another supplier to secure some or all of its required linens and notified Cintas of its need to suspend at least a portion of Cintas' services. Cintas claimed Restaurant's suspension of service constituted a breach of the parties' contract, invoked a liquidated damages provision in the contract, sought more than $8,000 in damages, and hired Murkin to collect the outstanding debt. Petitioner, a South Carolina attorney, represented Restaurant in the resulting dispute. In April 2018, Murkin sent a demand-for-payment letter to Restaurant. Because a Murkin-prepared reinstatement agreement materially altered the terms of the parties' original contract and imposed new obligations on Restaurant and because the agreement's terms were contrary to discussions Cintas personnel had directly with Restaurant, Restaurant sent the proposed reinstatement agreement to Petitioner. All further communications were handled through Murkin. Ultimately, Restaurant did not sign the reinstatement agreement, and no South Carolina counsel for Murkin or Cintas contacted Petitioner. Further, Murkin threatened litigation of the dispute was not resolved. Petitioner then asked Murkin for the South Carolina Bar numbers of several Murkin employees, but Murkin felt Petitioner's desire to deal with Murkin's local counsel "means nothing, since that is a decision made between our client and our office." Murkin further claimed authority to bind any attorney to whom Murkin referred the matter to settle for no less than Murkin demanded. Petitioner lodged a petition with the Supreme Court, alleging UPL. A special master appointed by the Court determined Murkin went beyond the "mere collection of debt" and crossed into UPL by negotiating the contract dispute; purporting to advise Cintas as to what legal action it should take; advising the parties as to whether to take a settlement offer; and purporting to control whether and when the case would be referred to an attorney. The Supreme Court concurred Murkin's actions constituted UPL. View "Westbrook v. Murkin Group" on Justia Law

The South Carolina Supreme Court granted Scott Ledford’s petition for review of the Court of Appeals’ decision to affirm the outcome of a Workers’ Compensation Commission hearing. Ledford was a former lance corporal with the South Carolina Highway Patrol. While employed as a highway patrolman, Ledford was injured in two separate work-related accidents: in July 2010, Ledford sustained injuries to his spine after being tasered during a training exercise; and in March 2012, Ledford was involved in a motorcycle accident while attempting to pursue a motorist. Ledford settled the 2010 claim with Respondents. Following the second accident, Ledford filed two separate claims for workers' compensation benefits. The Workers' Compensation Commission Appellate Panel declined to find Ledford suffered a change of condition; however, she found Ledford was entitled to medical benefits for injuries to his right leg and aggravated pre-existing conditions in his neck and lower back due to the motorcycle accident. Neither party appealed the Commission’s order. Months later, Ledford reached maximum medical improvement ("MMI"). Commissioner Susan Barden held a hearing on Ledford’s Form 21 in August 2014. Following the hearing, but prior to the issuance of a final order, Ledford filed a motion to recuse Commissioner Barden. According to Ledford's motion, Commissioner Barden requested a phone conference with the parties a month after the hearing during which she allegedly threatened criminal proceedings against Ledford if the case was not settled; indicated that she engaged in her own investigation and made findings based on undisclosed materials outside the record; suggested Ledford used "creative accounting" in his tax returns; and questioned Ledford's credibility regarding his claims of neck pain. Ledford contended any one of these grounds was sufficient to warrant recusal. The Court of Appeals affirmed the Commission, finding: (1) Commissioner Barden was not required to recuse herself; (2) substantial evidence supported the Appellate Panel's decision to reverse Commissioner Barden's permanency determination; and (3) substantial evidence supported the Appellate Panel's findings that Ledford was not credible and his landscaping business remained lucrative following the injury. The Supreme Court held the Court of Appeals erred in finding Commissioner Barden was not required to recuse herself. The Court was “deeply concerned” by the Commissioner’s conduct in this matter. “Ledford's counsel provided an opportunity for Commissioner Barden to right her wrong by moving for recusal. Instead of stepping aside, Commissioner Barden became more abusive and strident in both her ruling on the recusal motion and her final order.” The Commission’s orders were vacated and the matter remanded for a new hearing before a different commissioner. View "Ledford v. DPS" on Justia Law

The United States Court of Appeals for the Fourth Circuit certified a question of South Carolina law to the South Carolina Supreme Court. The underlying case was an insurance bad faith action against an insurance company for its failure to defend its insured in a construction defect action. The insured settled the construction defect action and brought a bad faith tort action. When the insurer asserted it acted in good faith in denying coverage, the insured sought to discover the reasons why the insurer denied coverage. According to the insurer, the discovery requests included communications protected by the attorney-client relationship. The federal district court reviewed the parties' respective positions, determined the insured had established a prima facie case of bad faith, and ordered the questioned documents to be submitted to the court for an in camera inspection. The insurer then sought a writ of mandamus from the Fourth Circuit to vacate the district court's order regarding the discovery dispute. In turn, the Fourth Circuit asked the South Carolina Supreme Court whether state law supported the application of the "at issue" exception to attorney-client privilege such that a party may waive the privilege by denying liability in its answer. The South Carolina Supreme Court found that the parties, especially the insured, contended the certified question did not accurately represent the correct posture of the case. In fact, the insured conceded the narrow question presented required an answer in the negative. The Supreme Court agreed, finding “little authority for the untenable proposition that the mere denial of liability in a pleading constitutes a waiver of the attorney-client privilege.” The Court elected to analyze the issue narrowly in the limited context of a bad faith action against an insurer, and felt constrained to answer the certified question as follows: "No, denying liability and/or asserting good faith in the answer does not, standing alone, place the privileged communications 'at issue' in the case." View "Mt. Hawley Insurance Company v. Contravest Construction" on Justia Law

Sentry Select Insurance Company brought a legal malpractice lawsuit in federal district court against the lawyer it hired to defend its insured in an automobile accident case. The federal court certified two questions of South Carolina law to the South Carolina Supreme Court pertaining to: (1) whether an insurer may maintain a direct malpractice action against counsel hired to represent its insured where the insurance company has a duty to defend; and (2) whether a legal malpractice claim may be assigned to a third-party who was responsible for payment of legal fees and any judgment incurred as a result of the litigation in which the alleged malpractice arose. The South Carolina Court answered the first question "yes:" "However, we will not place an attorney in a conflict between his client's interests and the interests of the insurer. Thus, the insurer may recover only for the attorney's breach of his duty to his client, when the insurer proves the breach is the proximate cause of damages to the insurer. If the interests of the client are the slightest bit inconsistent with the insurer's interests, there can be no liability of the attorney to the insurer, for we will not permit the attorney's duty to the client to be affected by the interests of the insurance company. Whether there is any inconsistency between the client's and the insurer's interests in the circumstances of an individual case is a question of law to be answered by the trial court." As to question two, the Supreme Court declined to answer the question: "We are satisfied that our answer to question one renders the second question not 'determinative of the cause then pending in the certifying court,' and thus it is not necessary for us to answer question two." View "Sentry Select Insurance v. Maybank Law Firm" on Justia Law

The South Carolina Supreme Court accepted a declaratory judgment matter in its original jurisdiction to determine if Respondents-Petitioners Quicken Loans, Inc. and Title Source, Inc. engaged in the unauthorized practice of law (UPL). Petitioners-Respondents (collectively "Homeowners"), alleged the residential mortgage refinancing model implemented by Quicken Loans and Title Source in refinancing the Homeowners' mortgage loans constituted UPL. In addition to seeking declaratory relief, Homeowners' complaint also sought class certification and requested class relief. The Supreme Court found the record in this case showed licensed South Carolina attorneys were involved at every critical step of these refinancing transactions, and that requiring more attorney involvement would not effectively further the Court’s stated goal of protecting the public from the dangers of UPL. The Court therefore reject the Special Referee's conclusion that Quicken Loans and Title Source committed UPL. View "Boone v. Quicken Loans" on Justia Law

The South Carolina Supreme Court accepted this declaratory judgment action in its original jurisdiction to determine whether Community Management Group, LLC; its president, Stephen Peck; and its employee, Tom Moore, engaged in the unauthorized practice of law while managing homeowners' associations. Community Management Group managed homeowners' associations and condominium associations in Charleston, Dorchester, and Berkeley Counties. Until the Supreme Court issued a temporary injunction in connection with this case, when a homeowner in an association did not pay an overdue assessment, Community Management Group (without the involvement of an attorney) prepared and recorded a notice of lien and related documents; brought an action in magistrate's court to collect the debt; and after obtaining a judgment in magistrate's court, filed the judgment in circuit court. Community Management Group also advertised that it could perform these services. After review, the Supreme Court found Community Management Group engaged in the unauthorized practice of law. View "Rogers Townsend & Thomas, PC v. Peck" on Justia Law

The Supreme Court granted Dana Medlock's petition for certiorari to determine whether a non-attorney who files a claim in probate court for a business entity engages in the unauthorized practice of law. Upon review, the Supreme Court concluded that a non-attorney may present claims against an estate on behalf of a business without unduly engaging in the practice of law. View "Medlock v. University Health Services" on Justia Law

From 2002 through 2004, George Harper and his law firm at that time, Jackson Lewis, represented EnerSys Delaware, Inc. in a variety of employment and labor law matters. Harper served as EnerSys' attorney of record in at least five employment-related lawsuits during this time. The relationship between Jackson Lewis and EnerSys deteriorated in 2004 when EnerSys brought a malpractice claim against the firm based on some labor-related legal advice that it claimed resulted in fraudulent testimony. In 2011, EnerSys filed this suit against a former EnerSys employee, Tammy Hopkins, alleging six causes of action including breach of contract based on violations of the confidentiality agreement and various computer use policies and agreements, breach of the duty of good faith and fair dealing, and breach of contract accompanied by a fraudulent act. When EnerSys learned that Hopkins had retained Harper to represent her, it moved to have him disqualified pursuant to Rule 1.9(a) of the Rules of Professional Conduct. The circuit court denied the motion, concluding that Harper's previous assistance in developing EnerSys' litigation strategy was insufficient grounds upon which to disqualify him due to the dissimilarities of his previous representations and the current suit. EnerSys then filed this appeal. This case presented the question of whether the denial of a motion to disqualify an attorney was immediately appealable. The Supreme Court held it was not and dismissed the case as interlocutory. View "EnerSys Delaware v. Hopkins" on Justia Law