Published on:

An estate hired a lawyer to act as the co-executor of the estate. The lawyer was paid on a percentage basis – 3% of the gross amount of the Estate. (In Illinois this type of payment arrangement is illegal. However, in Kentucky is it is perfectly legal). Of note is that the maximum fee in Kentucky is 5% – the lawyer only charged 3%. For those with an understanding of economics, that would indicate a working market in Kentucky where there is bargaining power on both sides of the transaction. In addition, the lawyer’s firm charged over one million in legal fees to the estate. These were apparently hourly charges.

As a result of the fee agreement, the lawyer/executor collected a large fee, in excess of $300,000. The executor then sued the lawyer for legal malpractice for charging excessive fees. (The executor could not sue for breach of contract because the lawyer complied with the terms of the contract and the court approved the payments).

Result: summary judgment for the lawyer. This passage of the opinion sets out the key issues in the dispute:

Published on:

The law firm inserted a fee-shifting clause in its retainer agreement, providing that the “prevailing party” was entitled to attorney fees. The text of the clause is as follows: “”In the event of a dispute between you and the firm regarding any matters relating to the retention . . ., the prevailing party shall be entitled to recover reasonable attorney’s fees” (emphasis added)”

This clause was no doubt intended to allow the lawyers to recover their collection costs in fee litigation. However, because the jury found that they committed malpractice (the opinion does not explain why), the jury awarded plaintiff her attorney fees. The trial court struck the fee award but the Appellate Division reinstated the fee award.

Comment: Lawyers should be cautious before inserting fee-shifting language in fee agreements.

Published on:

Sometimes things get missed or lost in the shuffle when clients change lawyers. It is often difficult to get the new lawyer up to speed in time to get a case ready for dispositive motions or trial.  When I see that the client had numerous lawyers involved in a case, that is usually a good signal that the case cannot be won. Each lawyer will blame another lawyer and its tough for the plaintiff to recover. You can sue everybody, but you will be subject to motions to dismiss and separate defenses.

This is a legal malpractice case recognizing the successor counsel defense. Ryan was represented by the Simmons firm in certain litigation. It was undisputed that they withdrew before the statute of limitations on some of Ryan’s claims ran. Successor counsel appeared 13 weeks before the pleadings closed in the litigation. The court quotes the law, which is well-settled:

Our supreme court has acknowledged the rule that “[a]n attorney cannot be held liable for failing to file an action prior to the expiration of the statute of limitations if he ceased to represent the client and was replaced by other counsel before the statute ran on the client’s action.” Ruden v. Jenk, 543 N.W.2d 605, 612 (Iowa 1996) (quoting Steketee v. Lintz, Williams & Rothberg, 694 P.2d 1153, 1159 (Cal. 1985)). Other courts have further explained the effect of successor counsel in legal malpractice claims. See Norton v. Sperling Law Office, P.C., 437 F. Supp. 2d 398, 402-03 (D. Md. 2006). The actions of successor counsel may create “an intervening cause that breaks the chain of causation arising from the prior attorney’s negligence.” Id. at 402. In order to rely on this rule, the prior attorney must show “a sufficiently long time gap between the severing of the attorney-client relationship and the lapse of the statute of limitations.” Id. at 403. “Courts have not set a minimum baseline for what constitutes `sufficient time,’ although one court has deemed as little as thirty days sufficient.” Id. (citing Sherotov v. Capoccia, 555 N.Y.S.2d 918 (App. Div. 1990)); but see id. at 403 (finding ten weeks was not sufficient time for successor counsel to bring a personal injury case where the proper forum was not clear); Villarreal v. Cooper, 673 S.W.2d 631 (Tex. App. 1984)(finding seventy-seven days was not sufficient time for successor counsel to bring a tort case when prior counsel had the case for sixteen months and evidence and witnesses could no longer be located).

Published on:

The case is Bar Counsel v. Peter Farber, SJC 11171 (Massachusetts Supreme Judicial Court).  This post is a repeat from a few years ago. I regard the opinion highly and think every lawyer should read it before taking any action adverse to an unhappy client.

Farber was the subject of an attorney disciplinary complaint. The complaining party, G. Russell Damon, testified against Farber. Damon accused Farber of wrongful conduct in connection with a real estate transaction. The disciplinary proceeding resulted in a reprimand against Farber.

Farber then brought a defamation case against Damon. Damon argued that he was immune because he testified under oath in a public proceeding. Damon took no other action to publicize his testimony.

Published on:

The Board of Professional Responsibility of the Tennessee Supreme Court has censured a prosecutor who obtained the conviction of three defendants in a murder case. While appeals were pending, the prosecutor wrote a book about the prosecution. Two of the Defendants filed motions for a new trial, alleging that the book demonstrated that there was exculpatory evidence that was not turned over to them before trial. The Board concluded that the lawyer violated Rule 1.8 (conflict of interest) by obtaining a personal benefit from writing the book and Rule 8.4(d) prejudice to the administration of justice.

The lawyer may have avoided some of the ethical problems had he waited ten years after the last appeal was decided.

Edward X. Clinton, Jr.

Published on:

The polarization of politics in our country has caused an attorney to try to compel the Maryland Grievance Commission to investigate attorneys who represented Hillary Clinton. An attorney, Ty Clevenger, believed that three Maryland attorneys who represented Hillary Clinton had violated the Rules of Professional Conduct. He wrote to the Grievance Commission but the Commission closed the investigation because Mr. Clevenger had no personal knowledge of the alleged unethical conduct. Undeterred by that decision, Clevenger then filed a Mandamus Action in the trial court to require the Grievance Commission to investigate the attorneys.  The trial court ordered the Grievance Commission to investigate the complaint. As the court explains:

This case began when the Appellee, Ty Clevenger, submitted to the Attorney Grievance Commission of Maryland a complaint alleging professional misconduct by three Maryland-barred attorneys while they were representing former Secretary of State Hillary Clinton. The Office of Bar Counsel thereafter informed Mr. Clevenger that it would not undertake an investigation of the allegations in his complaint because he had no personal knowledge of the allegations presented and was not an aggrieved party or client…….

On December 20, 2016, Mr. Clevenger, proceeding without the assistance of a Maryland-barred attorney, filed in the Circuit Court for Anne Arundel County a Petition for Writ of Mandamus (“Petition”). He sought to have the circuit court compel Bar Counsel to conduct an investigation, arguing that then-effective Maryland Rule 19-711 required Bar Counsel to investigate every complaint that was not facially frivolous or unfounded. The Commission moved to dismiss the Petition for lack of jurisdiction, among other grounds. It asserted that the Court of Appeals retains original and complete jurisdiction over all attorney disciplinary matters.

Published on:

In a malpractice case, the plaintiff must show that the lawyer breached the standard of care and that the lawyer’s error cost the client money. In most cases, the only way to prove this is to examine the underlying case. The underlying case is the prior case that was handled by the lawyer who allegedly breached the standard of care.

Because underlying cases can come in a variety of disciplines, we have to learn how to analyze (and sometimes prove-up) the allegations of the underlying case.

An example would be a personal injury case that was dismissed because the lawyer missed the statute of limitations. To prove that the error caused the client to lose the case, we must show that the underlying personal injury case had merit and prove the allegations contained in that case. If the underlying case was not well-founded, the lawyer’s error did not cause the loss. The client would have lost the case anyway.

Published on:

The case is Holtzman v. Griffith, 2018 NY Slip Op 04540, decided by the Appellate Division, Second Department.

Holtzman sued for fees and his former client, Griffith, counterclaimed for legal malpractice. The trial court on the basis of an account stated ordered Griffith to pay the legal fees that were due. The trial court dismissed Griffith’s malpractice claim because he had voluntarily settled the underlying divorce case and had agreed that the settlement was fair and equitable.  The explanation:

The plaintiff’s submissions demonstrated that in representing the defendant, who was also the defendant in the divorce action, she exercised the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the stipulation of settlement executed by the defendant in the divorce action was not the product of any mistakes by the plaintiff (see Schiff v Sallah Law Firm, P.C.,128 AD3d 668, 669). The stipulation of settlement recited, among other things, that the defendant reviewed and understood its terms, had an opportunity to consult with counsel and have the legal and practical effect of the stipulation fully explained to him, executed the stipulation voluntarily, without coercion or pressure of any kind, and believed the stipulation to be fair and reasonable (see Chamberlain, D’Amanda, Oppenheimer & Greenfield, LLP v Wilson, 136 AD3d 1326, 1328Schiff v Sallah Law Firm, P.C., 128 AD3d at 669). In opposition, the defendant failed to raise a triable issue of fact.

Published on:

John Crane, Inc. (JCI) was a manufacturer of asbestos. It sued plaintiff lawyers who had filed asbestos-related cases against it. JCI was a citizen of Illinois. One of the defendant law firms was located in Texas; the other in Pennsylvania. JCI argued that the law firms established sufficient contacts with Illinois when they instituted fraudulent litigation against JCI, an Illinois company. The law firms responded that the lawsuits were filed in Pennsylvania and Texas, not in Illinois. Therefore, there were insufficient contacts with Illinois. Although the lawyers directed document requests, interrogatories against JCI and sent those requests to Illinois, that was not sufficient to allow Illinois to assert jurisdiction over the lawyers. Thus, there was no personal jurisdiction over the defendants and the case was dismissed. The Seventh Circuit agreed with this holding and affirmed the dismissal.

The legal standard used in personal jurisdiction cases is legal boilerplate that adds little to the discussion of whether or not there is jurisdiction.

“Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons.”Walden v. Fiore, 134  S.  Ct.  1115,  1121  (2014)  (quoting  Daimler  AG  v.  Bauman, 134  S.  Ct.  746,  753  (2014)). The  Illinois  long-arm  statute  requires  nothing  more  than  the  standard  for  federal  due  process: that the defendant have sufficient contacts with the forum state “such that the maintenance of the suit does not offend  traditional  notions  of  fair  play  and  substantial  justice.” Brook v. McCormley, 873 F.3d 549, 552 (7th Cir. 2017).  This vague formulation means that the party being sued has to have taken some action in the state where the lawsuit is brought. Here, suing an Illinois corporation in Texas or Pennsylvania was not sufficient to give Illinois jurisdiction.

Published on:

This is an opinion of the Iowa Supreme Court, holding that a legal malpractice case was time-barred. The case is Skadburg v. Gately, 17-0151. Skadburg was the administrator of an estate and alleged that she hired the defendant to give her legal advice. Skadburg claimed that she used funds from a life insurance policy to pay debts of the estate. Skadburg alleged that the lawyer failed to inform her that the life insurance proceeds were exempt from any claims and would pass directly to the beneficiary. Thus, in Skadburg’s view, the lawyer’s failure to advise her that the life insurance was exempt cost her the life insurance proceeds.

The case had one huge problem – the estate was closed on August 18, 2010. The malpractice case was filed more than five years later on August 19, 2015. The trial court held the case was time-barred but the appellate court reversed. The Iowa Supreme Court reversed that decision.

The Iowa Supreme Court found that Skadburg had notice of her cause of action in 2008 when she paid the creditors and that the case was filed after the five-year statute of limitations expired.  The continuous representation exception to the statute of limitations did not apply because the plaintiff had actual or constructive notice of her claim before the attorney-client relationship ended. Further, there was no exception for fraudulent concealment of the cause of action.