Justia Legal Ethics Opinion Summaries

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

Mapes was arrested for trespassing after being refused service at a CVS store. He sued the state, CVS, and several individual defendants asserting a long list of grievances under federal and state law. Mapes asserted the need for pro bono representation based on his poor hearing, social anxiety, a speech disorder, and an unidentified mental disability. The district judge denied Mapes’s request to recruit counsel, dismissed Mapes’s complaint without prejudice for failure to state a claim, and suggested several amendments to the complaint. The judge informed Mapes that his amended complaint “should set forth what happened during the incident and the facts that support his belief that CVS refused to serve him because of his disability.” She explained that Mapes should identify the people who harmed him and describe how they did so. The Seventh Circuit affirmed the judge’s refusal to recruit counsel. The inquiry into the plaintiff’s capacity to handle his own case is a practical one, made in light of whatever relevant evidence is available on the question. Mapes demonstrated that he was physically able to file a complaint and mentally able to recall the relevant events. The judge was not required to offer legal guidance. View "Mapes v. Indiana" 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

Uniclass and ATEN make and sell switch systems that allow a user to control multiple computers from a single keyboard, video device, and mouse. ATEN sued Uniclass and the customer defendants alleging infringement of its 141 and 289 patents. A jury found that Uniclass did not infringe the asserted claims and that the asserted claims of the 141 patent were invalid as anticipated (35 U.S.C. 102) without specifying which reference was the basis for its finding. The Federal Circuit reversed as to invalidity and affirmed as to infringement. The court affirmed the denial of Uniclass’s motion to declare the case exceptional under 35 U.S.C. 285. Uniclass argued that ATEN did not conduct an adequate pre-filing investigation, unnecessarily increased the costs of claim construction, drastically increased discovery costs by frequently changing counsel and infringement positions, and engaged in unreasonable litigation behavior requiring additional motion practice and leading to an expensive and disproportionate trial. The court noted that note that ATEN’s primary argument on appeal—that the court improperly gave claim construction disputes to the jury—was rejected because ATEN did not timely raise the issue below and found that ATEN’s positions were not so objectively unreasonable or exceptionally meritless as to stand out from other cases. View "ATEN International Co., Ltd. v. Uniclass Technology Co., Ltd." 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

After JetMidwest filed suit against JMG for breaching a loan agreement, the district court granted summary judgment to JetMidwest but denied its motion for reimbursement of its attorneys' fees under the agreement.As a preliminary matter, the Eighth Circuit held that a Hong Kong limited company is equivalent to a U.S. corporation under 28 U.S.C. 1332. Therefore, the district court properly exercised subject matter jurisdiction under section 1332 and the court had appellate jurisdiction under 28 U.S.C. 1291. On the merits, the court disagreed with the district court's interpretation of the agreement, holding that the use of the sweeping language "all costs and expenses" reflects the parties' intent that JMG would pay Jet Midwest's attorneys' fees and other costs for enforcing as well as preparing the agreement. Accordingly, the court reversed and remanded for consideration of an appropriate award. View "Jet Midwest International Co., Ltd. v. Jet Midwest Group, LLC" on Justia Law

After appellant successfully litigated her claim to supplemental social security income, she challenged the district court's denial of her application for attorney's fees under 42 U.S.C. 406(b).The Second Circuit affirmed the denial of appellant's attorney's fee application as untimely, because she filed well beyond the 14 days prescribed by Federal Rule of Civil Procedure 54(d)(2)(B). Assuming the court would entertain appellant's argument, it failed on the merits because she provided no factual basis to support a claim that it was reasonable to delay the filing of her section 406(b) application for more than six months after she received notice of the benefits calculation on remand. View "Sinkler v. Berryhill" on Justia Law

Plaintiff appealed the trial court's order denying in part his fee request stemming from an underlying action brought by plaintiff for the wrongful denial of unemployment benefits by EDD and the Board.The Court of Appeal held that the trial court improperly limited the scope of permissible fees in this case to those incurred solely in connection with the Robles II litigation. Therefore, the trial court's fee order was reversed to the extent it declined to award fees under Code of Civil Procedure section 1021.5 for work related to Robles I. The court remanded for the trial court to make an additional award of attorney fees and costs. View "Robles v. Employment Development Dept." 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

Cash Depot underpaid employees for their overtime work. Fast filed suit under the Fair Labor Standards Act, 29 U.S.C. 203 (FLSA), on behalf of himself and other Depot employees. Depot hired an accountant to investigate. The accountant tallied Depot’s cumulative underpayments at less than $22,000. Depot issued checks to all underpaid current and former employees covered by the suit and issued checks to Fast for his underpaid wages, for liquidated damages under the FLSA, and for Fast’s disclosed attorney fees to that point. Fast and his attorney never cashed their checks. The district court denied a motion to dismiss because Fast contested whether Depot correctly calculated the amount it owed but granted partial summary judgment for Depot, “to the extent that [it] correctly calculated” what it owed Fast. Eventually, Fast conceded that Depot correctly paid the missing wages and urged that only a dispute over additional attorney fees remained. After Fast’s demand for additional attorney fees went unanswered, he filed a motion for attorney fees. The court determined that because Fast was not a prevailing party for the purposes of the FLSA, he was not entitled to attorney fees, and granted Depot summary judgment. The Seventh Circuit affirmed. Fast never received a favorable judgment. View "Fast v. Cash Depot, Ltd." on Justia Law