Articles Posted in Legal Malpractice

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The Seventh Circuit has affirmed a decision to dismiss a legal malpractice complaint in which West Bend Insurance alleged that its former counsel committed legal malpractice in connection with the defense of a worker’s compensation claim. The claim set forth numerous deficiencies in the lawyer’s performance in the worker’s compensation case, including his unauthorized decision to admit liability. However, the complaint was dismissed because West Bend never explained why the alleged errors would have made a difference. Put another way, West Bend never alleged how the result would have been different in the absence of the alleged breaches of duty. Judge Ripple’s opinion sets forth the court’s reasoning on proximate causation in some detail and is worth quoting here:

There is no dispute that West Bend has described adequately the duty element in its malpractice claim. Nor is there any disagreement about the adequacy of West Bend’s narrative with respect to the alleged attorney conduct constituting a breach of that duty. In that respect, West Bend alleges that Mr. Schumacher, having assumed responsibility for the defense of the claim, failed to prepare adequately for the hearing, revealed inappropriately the defense theory of the case to Marzano’s counsel, and then, without authorization, conceded liability for Marzano’s workers’ compensation claim.[15]

The allegations with respect to causation and damages present, however, significant concerns. At the outset, we note that the treatment by the Second Amended Complaint of the underlying workers’ compensation claim, which, as we have explained, is central to an assessment of causation and damages, is markedly different from the treatment of Mr. Schumacher’s alleged litigation conduct. While the complaint describes the conduct in some detail, it describes the underlying workers’ compensation claim in rather summary fashion. Specifically, while the complaint identifies the injured party as John Marzano, it tells us nothing about his claimed injury or his claim against his employer. Instead, it summarily states that “[p]rior to August 2006, there existed certain factual defenses and a medical causation defense to the Marzano claim.”[16]

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This is an unpublished case which had an interesting result. Plaintiff was represented by the Defendant attorney in her divorce case. Her husband, David Whittlemore, was apparently in financial difficulties. David Whittlemore offered an unusual settlement term to his soon to be ex-wife. He claimed that his wealthy brother Harvey would guarantee his maintenance obligations to her. In 2011, David filed for bankruptcy and the plaintiff contacted her lawyer who, after some correspondence, revealed that the wealthy brother had never signed the guarantee. Plaintiff then brought a legal malpractice claim against her former attorney.

The court set forth the facts as follows:

On October 11, 2007, Ms. Whittemore and her husband, Mr. David Whittemore, placed a settlement agreement on the record. Under the agreement, David Whittemore agreed to make monthly alimony payments until December 2021. He also agreed to procure a guaranty for his alimony payments from his wealthy brother, Mr. Harvey Whittemore.

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Julia Williams and I represented David Goodson, an Illinois attorney, who was sued by First American Bank when a check he deposited turned out to be a fraudulent check. Goodson did not know that the check was fraudulent. Instead, he believed that the check was a payment of past due spousal support. We obtained a dismissal of the complaint in the District Court and the Seventh Circuit affirmed the dismissal. Julia Williams handled the oral argument and signed the briefs on appeal.

I won’t attempt to summarize the excellent opinion of Judge Posner.

Edward X. Clinton, Jr.

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This case, Fox v. Seiden, has already made two trips to the Illinois Appellate Court. It is interesting because it is the rare case in which the court granted summary judgment in favor of the plaintiff.

The underlying case was captioned Multiut Corp. v. Draiman. The current case was brought on behalf of Miriam Draiman, one of the defendants in the Multiut case. In 2001, the court found that Draiman’s husband had engaged in deceptive trade practices and assessed attorney fees against “the defendants.” Plaintiff sought fees of $1,317,026.85. There was a big problem with this finding in that Miriam Draiman was not found liable on the consumer fraud act count. Thus, the judge erred in awarding attorney fees against “the defendants.”

Seiden appeared for Miriam Draiman in the post-trial proceedings. The Appellate Court describes the alleged error as follows:

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Sometimes, for reasons that are obscure, the ARDC takes a set of facts that appear to prove negligence and makes a disciplinary complaint out of them. In the case of Barbara Ann Susman, the ARDC charged an immigration lawyer with: (a) failing to act with reasonable diligence, failing to promptly inform the client of an adverse decision, failing to keep the client reasonably informed, making a false statement to the ARDC, conduct involving dishonesty, failing to respond to the ARDC’s demands for information and engaging in conduct prejudicial to the administration of justice.

The facts demonstrated that Susman was hired by David Yonan to file an appeal in an immigration matter. On September 1, 2010, the Immigration Service denied his petition for permanent residence based on his status as an alien of extraordinary ability. Yonan had until October 4, 2010, to appeal. Yonan met with Susman but did not promptly pay the retainer she requested. On Saturday, October 2, 2010, Yonan made a deposit of the amount of the filing fee. Susman then took the appeal to Federal Express and believed that Federal Express would deliver the appellate papers by Monday, October 4. Some months later, the USCIS rejected the appeal on the ground that the notice of appeal was not received until October 5, 2010. Yonan declined to appeal that decision. Later, he retained another lawyer and moved to reopen his appeal.

The Panel ruled that the ARDC failed to prove a lack of diligence because Yonan did not pay the filing fee until the last minute. The Panel noted that the evidence showed that Susman acted with diligence:

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This opinion of the Seventh Circuit discusses a legal malpractice case arising out of a class action. The plaintiff, Carlos Rocha, brought a class action against Federal Express. He alleged that Federal Express did not properly classify his employment. Shortly before the underlying case settled, he fired his lawyers. Rocha then refused to participate in the settlement of the underlying case. The court dismissed him as a plaintiff without prejudice. Rocha then filed a legal malpractice case against the lawyers who had represented him.

The district court dismissed the legal malpractice case because Rocha’s claims were viable when Rocha terminated his lawyers. If the case was viable, the lawyers could not have made an error that caused Rocha to lose the case. The Court of Appeals agreed and affirmed. The court explains its reasoning as follows:

“In the present case, Rocha’s Fluegel claims were still viable in September 2012, when Defendants were discharged. As an initial matter, Rocha retained Johnson as counsel before discharging Defendants in September 2012.[2]

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Kelli Dudley is a foreclosure defense lawyer and is a superb advocate for the poor and other underserved populations of Cook County. The defendants in the case also defend foreclosures.

In an underlying case, Dudley, on behalf of Tonya Davis, filed a legal malpractice claim against several foreclosure defense lawyers alleging that they did nothing to keep Davis in her home. That litigation turned acrimonious.

Eventually, the defendants obtained a preliminary injunction in a state court case which prevented Dudley from contacting Davis. Ultimately the Davis v. Fenton case went to arbitration. The arbitrator awarded Davis damages for legal malpractice against Fenton. The arbitrator ruled in favor of Fenton on Davis’ other claims, including her claim that Fenton had engaged in unlawful housing discrimination.

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This is a legal malpractice case in which the plaintiff, Juakeishia Pruitt retained the Cockrell & Cockrell firm to pursue employment claims against Spillman College and other claims against other parties. According to the opinion, the firm failed to file the claims in timely fashion and an associate concealed that fact from Pruitt. The associate, Byron House, made further false representations as to the status of those cases in an effort to conceal from Pruitt that the cases had not been filed in timely fashion. The associate told Pruitt that her cases had settled and made payments to her from the firm’s operating account. The opinion states:

Subsequently, Pruitt met with another attorney, Delaine Mountain. During that meeting, House called Pruitt on her cellular telephone, and Mountain listened to that conversation. On January 18, 2012, Mountain made two telephone calls to Cockrell to discuss Mountain’s concerns regarding House’s handling of Pruitt’s discrimination cases. Cockrell twice confronted House in light of the information he had received from Mountain. Eventually, House told Cockrell that he had missed the statute of limitations on both discrimination cases; that there was no structured settlement in the Stillman College case; and that he had taken money for the alleged settlement payments from the Cockrell law firm’s general business account and trust accounts. The Cockrell law firm immediately terminated his association with the firm.

When Pruitt learned that her claims had not been filed on time, she sued for legal malpractice. The law firm defended on the ground that the legal malpractice statute of limitations had run. The trial court denied the law firm’s motion for summary judgment on the ground that the law firm had made fraudulent representations to Ms. Pruitt. The Alabama Supreme Court upheld the denial of summary judgment on the ground that the fraudulent actions by the associate were a separate basis for liability under Alabama’s Legal Services Act.

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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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This is another decision affirming, as time-barred, a legal malpractice case. Plaintiffs alleged that they hired Vedder Price to represent them in a commercial real estate transaction in 2003. Plaintiffs signed personal guarantees. The plaintiffs alleged that the lawyer defendants failed to advise them that one of other parties to the venture had signed a limited version of the personal guarantee. Plaintiffs claimed that had they known of the limited version of the guarantee they would not have signed the loan documents. Plaintiffs also alleged that the lawyer defendants failed to notify them that a transfer of a 10% interest in the project to Benjamin Nummy triggered a default under the loan documents.

It was undisputed that the lawyers gave the plaintiffs a complete copy of all the documents signed by all parties in 2003. In 2012, the bank notified the bank that the 2003 transfer to Nummy violated the loan documents and declared a default and sued for foreclosure.

Plaintiffs sued Vedder Price in 2014. The case was dismissed on statute of repose grounds (the alleged negligent act occurred more than 6 years before the lawsuit was filed). Plaintiffs alleged fraudulent concealment but this claim was rejected because the alleged fraudulent concealment consisted of the same allegations that supported the negligence claim. In other words there were no allegations that the lawyers took any action after the transaction to cover up their alleged mistake.

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