Articles Posted in Legal Malpractice

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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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Proximate causation is often the issue that defeats a legal malpractice case. In this case, even though a law firm failed to timely appeal an interlocutory ruling, there was no malpractice because the ruling was correct. Thus, even if the appeal had been filed on time, the plaintiff would have lost the case anyway.

The underlying case was litigated in the courts of the State of Oregon. Here, the plaintiff hired a law firm to give an opinion on whether an adverse ruling in a case could be appealed. The law firm essentially said that the ruling was interlocutory and that no appeal could be taken until the entire case was completed. To complete the case the plaintiff dismissed its remaining claims and appealed. The appeal was, however, dismissed because it was not timely.

Plaintiff then sued the law firm alleging that the law firm gave incorrect advice on the appeal deadline. The trial court granted summary judgment for the law firm. It held that plaintiff could not establish proximate causation, that is, but for the negligence, plaintiff would have obtained a better result in the underlying lawsuit.

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This is an important issue in legal malpractice cases. A lawyer represents a client in litigation. If the lawyer is granted leave to withdraw from that matter by the court, does that decision bar a legal malpractice claim by the client? The Washington Court of Appeals held that the withdrawal, even where approved by a court, does not collaterally estop a legal malpractice claim.

Generally, a litigant must establish four things to collaterally estop the other party from litigating an issue: (1) the identical issue was decided, (2) there was a final judgment on the merits, (3) the party against whom the doctrine is asserted must have been a party to the earlier proceeding, and (4) application of collateral estoppel will not work an injustice against the estopped party.

The court explained that two of the four factors required to establish collateral estoppel were not present:

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This is an opinion affirming the dismissal of a legal malpractice claim against divorce attorneys. Plaintiff alleged that her former attorneys did not “ascertain the full extent of her former husband’s income, and failed to make an adequate record before the matrimonial court regarding her former husband’s level of adherence to the tenets of Orthodox Judaism and the needs of their children not to have visitation with the former husband on the Jewish Sabbath and holidays.” The lawyers moved for summary judgment and the plaintiff, also a lawyer, filed a response in opposition to that motion. The court held that the client’s affidavit was insufficient to rebut the lawyer’s prima facie showing of entitlement to judgment as a matter of law. The court does not state why the affidavit was deficient but one may guess that the affidavit by the former client did not explain how the work done by the lawyers failed to meet the standard of care for a divorce lawyer involved in the divorce of an Orthodox couple.

Plaintiff may have been able to avoid this problem by hiring a divorce lawyer to act as her expert witness. She apparently chose not to go down that path and the result was unfavorable to her.

Edward X. Clinton, Jr.

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This is a decision of the Nebraska Court of Appeals reinstating a legal malpractice claim against a personal injury attorney even though the underlying case was settled.

The defendant attorney urged the client to accept a $45,000 settlement of a personal injury claim arising out of an auto accident. The plaintiff agreed to the proposed settlement, but then sued the lawyer for legal malpractice. The basis of her claim was essentially that the settlement was inadequate because she had suffered serious permanent injuries requiring medical expenses far exceeding the amount of the settlement.

The court explained:

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The plaintiff sued a lawyer for legal malpractice. The lawyer failed to timely report the legal malpractice claim to his carrier and the claim was denied. The plaintiff then sued the insurer directly with no success for the same reason. Because the lawyer failed to report the claim to the insurer, the claim for coverage was denied.

Do not ever retain an attorney who does not have insurance.

Source: McCarty v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, Dist. Court, SD Ohio 2016 – Google Scholar

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It is very common that someone will come into my office and explain that he is a victim of legal malpractice. Often, for reasons I don’t understand, the person waits more than two years after the underlying judgment before they contact me. By waiting this long, the statute of limitations has run and there is absolutely nothing we can do to help the plaintiff.

In Illinois the plaintiff has two years to file suit from whenever the plaintiff discovers the injury. Where there is litigation, discovery occurs when the underlying case reaches judgment.

In Belden v. Emmerman, the Illinois Appellate Court held that the statute of limitations begins to run when there is an adverse judgment against the injured party. The defendant moved to dismiss and the plaintiff argued that, because he filed an appeal of the adverse judgment, the statute of limitations did not start to run until the appeal was decided.

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