Articles Posted in Conflict of Interest

Published on:

Please note that I was one of the lawyers who represented the plaintiff in this case. The case was designed to challenge the confession of judgment by a law firm that had previously represented a bank that filed a collection lawsuit.

So, the Bank, represented by Ginsberg Jacobs filed suit on a promissory note and on personal guarantees. An associate with Ginsberg Jacobs then confessed a judgment against the plaintiffs. They sued alleging that the confession of judgment created a conflict of interest in that the law firm was representing opposing parties in a lawsuit.

The Defendants moved for summary judgment on the ground that the mere act of confessing a judgment did not create an attorney-client relationship. The District Court, in a thoughtful opinion by Magistrate Rowland, agreed with the defendants. The Court explained:

Published on:

This legal malpractice claim is a spin-off from other long running litigation filed by Prospect Development LLC against the City of Prospect Heights arising out of a real estate deal that went sour.  The defendant attorney in the legal malpractice action was Robert Kreger. Kreger was the general counsel of Prospect Heights until 2004.

The Underlying Case

The facts of the dispute are set forth in the Appellate Court’s 2012 opinion in the case captioned  Prospect Development LLC v. Village of Prospect Heights, 2012 IL App 103759-U. According to the Appellate Court, Prospect Development, which was owned by John G. Wilson, sought to develop an arena in Prospect Heights. The project was never completed. In 2004, the Village of Prospect Heights terminated the project. Prospect Development sued for breach of contract. The trial court found that Prospect Development had substantially performed the contract with the Village. However, the trial court also found that Prospect Development had unclean hands because it had secretly made loans to Robert Kreger, the general counsel of the Village. The trial court held that the secret loans constituted unclean hands and that the unclean hands barred Prospect Heights from seeking relief against the Village. Kreger had been a partner of a large law firm, Schiff Hardin and had acted as the general counsel for the Village of Prospect Heights. Opinion ¶ 2.

Published on:

The plaintiff, Cynthia O’Neal, brought a legal malpractice claim against her former lawyers. O’Neal, an owner of a restaurant chain that fell on hard times, alleged that her former lawyers had a conflict of interest when the represented her company and the opposing party in an assumption of a lease. The court rejected her claim on the grounds that she was unable to establish proximate causation.

In my experience, proximate causation can be difficult to prove. Lawyers make mistakes. Sometimes those mistakes breach the duty of care. The plaintiff must tie the negligent act to the damages suffered by plaintiff and come up with a plausible theory as to how the lawyers made things worse and caused the damage.

One area where it is very difficult to prove proximate causation is a legal malpractice claim in the foreclosure setting. The lawyer who defends the foreclosure may miss a deadline or make a legal error. However, that lawyer did not cause the default and did not proximately cause any damages.

Published on:

IN RE MARRIAGE OF WIXOM AND WIXOM, Wash: Court of Appeals, 3rd Div. 2014 – Google Scholar.

This is an appeal from a divorce case in which a lawyer (Robert Caruso) and his client (Rick Wixom) were held jointly and severally liable for a $55,000 sanction award. The lawyer and client were sanctioned because, in the underlying custody litigation, they made false charges about Rick’s ex-wife Linda.

Here is where the lawyer made an error. He appealed the sanctions against himself and filed an appeal for his client, Rick Wixom. The court explains how the lawyer threw the client under the bus:

Published on:

ARDC claims conflict of interest.

Filed August 24.

This case illustrates one of the problems with the ARDC process.  The underlying conduct took place in 2004.  The ARDC filed a complaint against the respondent in December 2008!  She answered in February 2009, but the case did not come to hearing until January 2012.  The decision was issued on August 24, 2012.