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The Supreme Court of Washington has held that a client who sues his former attorney for legal malpractice may not allege that the lawyer’s withdrawal from the underlying case was improper if that withdrawal was approved by a judge.

The court succinctly puts the issue this way:

In this case, former clients are suing their attorneys for legal malpractice based, in part, on the attorneys’ withdrawal from a prior case. But the attorneys obtained that withdrawal by court order. In the original case, the former clients appealed the court’s order approving withdrawal, and that appeal was rejected. The attorneys thus argue that collateral estoppel applies to bar a malpractice action based on their withdrawal. We agree. We hold that the fact of withdrawal by court order in an earlier proceeding is dispositive in a later malpractice suit against the attorney. Although other malpractice complaints unrelated to the withdrawal would not be precluded, a client cannot relitigate whether the attorney’s withdrawal was proper. If we are to have rules permitting attorney withdrawal, we must allow attorneys to have confidence in those rules. We, therefore, reverse the Court of Appeals.

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One of the more vexing issues in the area of legal malpractice is what happens when the plaintiff settles the underlying case. In most states, the plaintiff would have to prove that but for the negligence of the defendant attorney, he would have obtained a better financial result in the underlying case. North Carolina, however, holds that the decision to settle the underlying case gives the negligent lawyer a complete defense to the legal malpractice action. This is an unpublished decision, but it is worth reviewing because it illustrates how the decision to settle the underlying case protects negligent attorneys.

The plaintiff alleged that the lawyers failed to properly serve a breach of contract lawsuit.  The negligence alleged, if true, is fairly shocking:

On 5 May 2006, the Horne defendants filed a complaint against the Hill defendants in Pitt County Superior Court alleging breach of contract. However, the Horne defendants never served the Hill defendants with a summons or a copy of the complaint, the action was discontinued, and plaintiff was never informed about the status of the action. When plaintiff emailed the Horne defendants on 23 October 2006 to inquire about its status, defendant Horne II responded:

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In Cook County, if your case goes to trial, you need to bring a court reporter and get a transcript of the trial. If you don’t’ have one, it is very difficult to appeal.

We were recently confronted with a family law trial where there is no transcript and no record of what exhibits were submitted. An appeal involves an argument that the trial court made an error. How can you argue that there was an error when there was no record of what happened? It becomes almost impossible.  Illinois Supreme Court Rule 321 provides:

The record on appeal shall consist of the judgment appealed from, the notice of appeal, and the entire original common law record, unless the parties stipulate for, or the trial court, after notice and hearing, or the reviewing court, orders less. The common law record includes every document filed and judgment and order entered in the cause and any documentary exhibits offered and filed by any party. Upon motion the reviewing court may order that other exhibits be included in the record. The record on appeal shall also include any report of proceedings prepared in accordance with Rule 323. There is no distinction between the common law record and the report of proceedings for the purpose of determining what is properly before the reviewing court.

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West Virginia has suspended an attorney for 30 days for failing to file a client’s amended habeas corpus petition on time. This is another case in which disciplinary authorities have prosecuted a negligence case. The attorney was found to have violated Rule 1.3 (failing to act with reasonable diligence) and Rule 1.4(a)(3) (failing to keep the client reasonably informed about the status of the matter); and Rule 8.4(d) (conduct prejudicial to the administration of justice).

The record indicated that the lawyer was appointed to represent a pro se prisoner and that the lawyer eventually obtained leave of court to file the petition after it was due.

Source: Lawyer Disciplinary Board v. Palmer, W Va: Supreme Court of Appeals 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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This case (which is merely a complaint now that has not been proven) is a reminder that an attorney can be prosecuted by the ARDC for failing to safeguard client funds when he personally did not convert the funds. In this case, the allegations are that the lawyer’s partner converted funds and that the lawyer failed to prevent it. There are also allegations that suggest that the lawyer had reason to know that his partner might convert funds because he had converted funds in the past. The complaint alleges violations of Rule 1.15 and Rule 5.1(a). I have attached a link to the ARDC’s complaint. Again, the important thing to remember is that you can be prosecuted even if you did not convert funds.

Edward X. Clinton, Jr.

http://www.iardc.org/17PR0053CM.html

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This case is potentially important. It addresses a long-running issue – when a plaintiff must hire a legal malpractice expert. The Plaintiff must do so when expert testimony is needed to explain the standard of care to the jury. Here, the lawyer was hired to file a Medicaid application on behalf of an estate of a disabled person. The lawyer allegedly failed to file the application and the Estate was damaged. The trial court granted summary judgment on the basis that an expert was needed. The Appellate Court reversed because the only issue was an issue of fact: did the lawyer meet her obligations to file for Medicaid? The explanation of why the expert testimony was not necessary is particularly instructive and I quote it here:

There was an attorney-client relationship and a professional duty arising out of that relationship. The third element regarding the breach of duty is in dispute. The appellant did not provide expert testimony to substantiate her claim of legal malpractice regarding the third element. Flynn argues that Pollock’s errors were so obvious that expert testimony was not necessary to demonstrate that Pollock breached her duty. See, e.g., Friedland v. Djukic, 191 Ohio App.3d 278, 2010-Ohio-5777, 945 N.E.2d 1095, ¶ 27 (8th Dist.) (“Expert testimony is ordinarily required to establish the breach of duty in a legal malpractice case, unless the breach is within the ordinary knowledge of lay people”). We agree. Expert testimony as to the standard of care was not necessary because it is within the ordinary knowledge of lay people to determine whether there was a lack of communication between the parties and the lack of filing necessary paperwork could be a breach of duty. See, e.g., Phillips v. Courtney, 8th Dist. Cuyahoga No. 84232, 2004-Ohio-6015 (expert testimony as to the standard of care was not necessary because it was within the common knowledge of the jurors whether the attorney ensured that the application was filed within two years of the client’s termination of employment).

{¶14} Like in Phillips, it does not require expert testimony to determine whether Pollock’s potential lack of communication or failure to file the Medicaid application could constitute a breach of duty. Either Pollock has evidence that she performed the duties she promised the Lankford family, or she does not. It’s a question of fact not law. The Lankford family claims that Pollock did not fulfill her duties as outlined in their agreement. At this juncture of the case, the issue does not lie within the complexities of Medicaid law or estate planning. The issue deals with a question of whether Pollock took any action as it relates to what was agreed upon in the engagement letter. An ordinary layperson can make a simple determination as to whether Pollock did any work for the Lankfords.

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This is case is worth reading because it involved a law firm that did legal work for a client for a period 12 years, but never billed the client. The firm claimed that it had entered into an oral agreement with the client to defer billing until a parcel of real property was sold. When the property was sold, the lawyers delivered a legal bill for $274,850.64 to the client.

One can speculate that the client, who had not received any bills before that time, was enraged to receive a huge bill after that amount of time. She refused to pay.

The firm sued for (a) breach of contract, and (b) equitable estoppel. The client filed a motion to dismiss the breach of contract claim based on the statute of limitations and the statute of frauds. The motion to dismiss was denied.

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This case is instructive for plaintiff lawyers because it is a reminder that, if the client has filed for bankruptcy, the claim for legal malpractice may belong to the bankruptcy estate. Because the alleged negligence occurred before the bankruptcy petition was filed, the claim belonged to the bankruptcy estate.

Source: LABGOLD v. REGENHARDT, Dist. Court, ED Virginia 2017 – Google Scholar

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Recent developments in the news have caused me to reflect on this topic. When should a lawyer make a memo to the file?

There are news stories that former FBI Director James Comey made memos to the file to report on conversations he had with President Trump. Comey made the memos because he was concerned that Trump was asking him to violate the law or engage in some form of corrupt activity.  Comey would have been very concerned that he would later be accused of engaging in some impropriety or that Trump would make some claim about their meeting that would contradict Comey’s recollection. Comey is also smart enough to know that he needed to keep a copy of the memo to the file in his own personal papers so that no neer-do-well could destroy it after he was terminated.

A memo to the file should be made (and preserved in a way that proves when it was created) whenever the client (a) indicates that he may not follow legal advice; (b) he announces an intention to violate the law; or (c) he does not appear to be telling the truth.