Articles Posted in Attorney-Client Relationship

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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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Scott v. Burgin, DC: Court of Appeals 2014 – Google Scholar.

The issue of privity frequently arises in legal malpractice litigation. A party lacks privity when the party did not have an attorney-client relationship with the lawyer. Recently, the privity rule has been relaxed by courts to allow lawsuits for legal malpractice by some persons who did not have an attorney-client relationship, such as the beneficiaries of an estate plan. Thus, a lawyer who breaches the duty of care in drafting an estate plan can sometimes be subject to suit by the beneficiaries who lost their inheritance.

Here, the plaintiff was the girlfriend of the decedent. She alleged that the lawyers for Kenneth Woodruff were negligent in failing to prosecute his divorce action against his wife. Burgin alleged that, had the divorce been obtained, she would have been eligible to receive certain retirement benefits upon Woodruff’s death.

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CRIMSON TRACE CORPORATION v. DAVIS WRIGHT TREMAINE LLP, 355 Or. 476 – Or: Supreme Court 2014 – Google Scholar.

This is an important issue in legal malpractice litigation – what happens to the communications between lawyers in a law firm and their in-house counsel. In this case the Oregon Supreme Court has recognized that those communications are privileged under the attorney-client privilege.

Oregon’s Evidence Code has a pertinent provision:

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You are an employee of a corporation. Something bad happens and the corporation’s internal lawyer (or an outside lawyer) tells you he wants to talk to you. When the interview starts, he tells you that he does not represent you, he only represents the corporation. You don’t think about the significance of this statement and you start talking. Later, the corporate lawyer prepares a report or refers you for prosecution, all in the name of protecting the company. You have fallen into a trap and you can’t get out.

When you hear that statement (I represent the corporation, not you), you need to understand this:

(1) the corporate lawyer is not here to protect me;

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