Articles Posted in Attorney-Client Relationship

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One issue that arises frequently in legal malpractice cases is – to whom does the lawyer owe a duty? Here, a condominium owner sued the lawyer for the condominium association for breach of contract. The court dismissed the case and the Colorado Supreme Court affirmed the dismissal.

The Colorado Supreme Court followed well-settled law in holding that the association’s lawyer owed no duty to an individual condominium owner. The lawyer represents the association, an organization composed of individual members. Just because a condominium owner is a member of that group does not create an attorney-client relationship.

The Court reasoned that any other holding would hurt the lawyer’s duty of loyalty to his client, the Association. Further, allowing the lawsuit to proceed would allow “an unforeseeable and unlimited number of people” to make claims against lawyers.

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One question which comes up frequently is whether a client can sue his former lawyer for legal malpractice based on what the client believes is an inflated legal bill.

A legal fee dispute is essentially a breach of contract case filed by the lawyer against the former client. Here the specific complaint was that the lawyer did not explain that, under the fee agreement, the lawyer was not required to refund any portion of the client’s deposit.

“Plaintiff next argues defendants breached a fiduciary duty to plaintiff by failing to properly advise him as to the non-refundable aspect of the retainer agreement. “In entering a contract at the outset of a representation, the lawyer must explain the basis and rate of the fee . . . and advise the client of such matters as conflicts of interest, the scope of the representation, and the contract’s implications for the client. . . .” Restatement (Third) of the Law Governing Lawyers § 18 cmt. d (Am. Law Inst. 2000). RPC 1.4(c) states, “A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.”

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Sandler was a plaintiff in an underlying medical malpractice action in which he alleged that he received substandard care at Advocate Good Samaritan Hospital. Advocate retained a standard of care witness who testified against him. Sandler, even though he won the underlying case, sued Advocate’s expert on the ground that the expert failed to diagnose his brain injury. The trial court dismissed the case on the ground that there was no doctor-patient relationship and no duty of care. The Appellate Court affirmed, but on different reasoning. The Appellate Court reasoned that a statement by an opposing expert in a report or deposition was absolutely privileged. For many years courts have recognized that a lay witness is immune from liability for his pertinent testimony at trial. The relevant caselaw, quoted in Sandler, is as follows: “As a general rule, witnesses enjoy an absolute privilege from civil suit for statements made during judicial proceedings. Ritchey v. Maksin, 71 Ill. 2d 470, 476 (1978). The purpose of the rule is to preserve the integrity of the judicial process by encouraging full and frank testimony. Layne v. Builders Plumbing Supply Co.,210 Ill. App. 3d 966, 969 (1991). ” Sandler ¶ 26.

Source: Sandler v. Sweet, 2017 IL App (1st) 163313 – Ill: Appellate Court, 1st Dist., 6th Div. 2017 – Google Scholar

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This issue comes up fairly frequently and almost all of the courts which have considered it have answered it the exact same way. An owner of a unit of a condominium does not have standing to sue the attorney for the condominium association.

The lawyer for the association is responsible to the association’s board of directors, not the unit owners. Allowing random unit owners to sue the lawyer for the association would place the lawyer in a situation where he would have to serve numerous “clients” all of whom have conflicting interests.

Source: GUEHL v. CARILLON HOUSE ASSN., INC., 2017 Ohio 5491 – Ohio: Court of Appeals, 2nd Appellate Dist. 2017 – Google Scholar

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The case is an important one for lawyers who are faced with an ethical issue. The New York Appellate Division held that the attorneys may communicate with their law firm’s general counsel to seek ethical advice and those communications are privileged and are not subject to discovery. In Stock, the lawyers were representing Stock in an arbitration hearing when one of the lawyers was called as a witness. The lawyers communicated with the firm’s general counsel and sought legal advice.

Stock later sued the law firm, claiming that the law firm gave negligence advice concerning his termination by MasterCard. In particular, Stock alleged that the firm failed to advise him that termination would accelerate the expiration of vested stock options.

In the lawsuit, Stock served discovery and sought disclosure of the communications between the lawyers who were representing him and the law firm’s general counsel. The court held that the attorney-client privilege applied and that the law firm was not required to disclose the communications.

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Source: OAKLAND POLICE AND FIRE RETIREMENT SYSTEM v. MAYER BROWN, LLP, Dist. Court, ND Illinois 2016 – Google Scholar

This is a legal malpractice case that was dismissed because the plaintiff was not a client of Mayer Brown, LLP, a noted Chicago law firm. The plaintiff was part of a group of institutions that made a loan to General Motors before GM filed bankruptcy. Mayer Brown allegedly drafted documents which released certain UCC security interests and allegedly caused harm to the plaintiffs.

The facts of the various transactions are complex. I will do my best to accurately summarize them.

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A limited representation agreement is an agreement where a lawyer agrees to undertake some services for a client, but does not agree to handle the client’s entire case. One example of a limited representation agreement is where a lawyer agrees to help a pro se litigant by writing briefs or discovery materials but does not agree to go to Court or handle depositions. Some courts have resisted these agreements and have sanctioned lawyers who have agreed to provide limited services to clients.

In Persels & Associates, LLC v. Capital One Bank, (USA), N.A., 2012-CA-001447-MR, the Supreme Court of Kentucky heard an appeal by three lawyers who entered into limited representation agreements with pro se clients and were sanctioned by a trial court judge.

Sarah Jackson and David Thomas, individual debtors, retained two lawyers to provide limited representation. According to the opinion, the limited representation agreements provided that neither lawyer “was required to sign pleadings, enter an appearance, or attend court proceedings.” Instead, the lawyers assisted the debtors in preparing pleadings. In 2011, the Circuit Court ordered the two lawyers to appear and show cause why they should not be held in contempt. After a hearing the Court held that the lawyers violated Kentucky’s Rule of Civil Procedure 11 and fined each of them $1.00.

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Source: GOESEL v. BOLEY INTERNATIONAL (HK) LTD., Court of Appeals, 7th Circuit 2015 – Google Scholar

This case concerns an appeal by a law firm of a decision by the district court to reduce a contingent fee award.

The parties agreed to a contingent fee under which the lawyers would receive one-third of any award and the expenses would be covered by the clients.

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A legal malpractice case requires careful analysis. Even if the lawyer was negligent in some way, did the negligence make any difference in the ultimate outcome? To evaluate a legal malpractice case, you must evaluate the underlying case as well.

Rodi v. Horstman, 2015 IL App (1st) 142787 is such a case. Rodi hired Horstman to handle an appeal of an unfavorable decision. It is undisputed that Horstman filed the notice of appeal one day late and the Appellate Court held that it had no jurisdiction. Rodi then sued Horstman for legal malpractice, but the trial court granted summary judgment for Horstman and the Appellate Court affirmed. The reason is that even if Horstman had timely filed the notice of appeal the appeal was a loser.

The Underlying Case:

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Beery v. Chandler, Dist. Court, ED Missouri 2015 – Google Scholar.

Plaintiff sued his former personal injury lawyer for legal malpractice, alleging that the lawyer negligently advised him to reject a settlement offer. The lawyer sued for legal fees under breach of contract, quantum meruit and unjust enrichment theories. Plaintiff moved to dismiss the claim on the ground that the lawyer was not licensed in Missouri.  Plaintiff noted that the Missouri state court had denied the lawyer a lien on the recovery on the ground that the lawyer was not licensed.

The district court rejected that argument apparently on the ground that the lawyer was licensed in Illinois and appears to have done work on the case. There is some suggestion that the lawyer indicated on his stationery that he had an office in Missouri.

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