Archive for December, 2011

Opening up wrongful use of civil proceedings

Friday, December 30th, 2011

The Superior Court has issued an opinion which could spell big trouble for Pennsylvania attorneys.  The court’s decision in Betts Industries, Inc. v. Heelan, Pa. Super. No 328 WDA 2011, suggests that a wrongful use of civil proceedings claim can be brought when an action originally brought in Federal Court was dismissed as to federal claims, even though state law claims remain.  The court stated that a plaintiff can succeed in a Dragonetti (wrongful use of civil proceedings) action based on federal claims without a legitimate basis even if the same action includes “entirely legitimate state causes of action.”

The holding in Betts Industries is contradictory to a well established line of cases which state that wrongful use of civil proceedings will be judged by an action as a whole, not be individual claims.  In Laventhol & Horwath v. First Pennsylvania Bank, 18 Phila. 580, 583 (1988), aff’d. 573 A.2d 626 (Pa. Super. ), appeal denied, 593 A.2d 420 (Pa. 1990) the plaintiffs also premised their case on specific fraud counts in the underlying suit lacking probable cause even in light of the existence of probable cause for the remaining counts.   Judge Prattis identified the primary issue as “whether the fact that one element of a pleading may have been alleged without sufficient probable cause, may be used as a basis for initiating a suit against the attorney, of a party, under 42 Pa. C.S.A. § 8351 et seq., where the other elements and theories of that pleading, alleged by the party are supported by probable cause?”  The court determined it could not be.  The opinion in Laventhol & Horwath was cited with approval by the Eastern District of Pennsylvania in Rosen v. Tabby, No. Civ. A. 95-2968, 1997 WL 667147*7 (E.D. Pa. 1997).  The court in Rosen stated: “[U]nder Pennsylvania law, it is clear and certain that the probable cause to bring the underlying litigation relates to the entirety of the lawsuit, and not to some specific claim or claims within that suit.”

The decision in Betts Industries opens up the possibility of wrongful use of civil proceedings cases being brought even where the underlying action was ultimately won on the basis that a single claim among many was brought without probable cause.  Professional liability avoidance and defense just became a little more difficult.   As the man used to say: “Let’s be careful out there.

-Josh J.T. Byrne, Esquire


Another Pennsylvania Jurist Investigated

Tuesday, December 20th, 2011

The Supreme Court has removed Judge Michael J. Sullivan, the administrative judge for Philadelphia’s traffic court, amid an FBI probe into allegations of ticket fixing.  The Supreme Court’s Chief Justice, Ronald Castille, stated that an internal probe found tickets were regularly fixed for the politically connected.  This is, of course, not the first time a Pennsylvania jurist has been investigated, or worse, for improper conduct.

In vaguely related news, suspended attorney Robert Powell, was sentenced to eighteen months imprisonment for his part in the “cash for kids” scandal that has rocked Luzerne county over the last two years.  That scandal led to long imprisonment terms for two former judges, and a recent $17.5 million dollar settlement from the builder of the juvinial facilities at the center of the scandal, Robert Mericle.

There is no single solution to the problems of corrupt or corrupted jurists.  However, there are a number of organizations and individuals working to make a difference.

-Josh J.T. Byrne, Esquire


More lawyers getting in trouble

Friday, December 9th, 2011

We have blogged before about lawyers and Ponzi schemes.  The New Jersey State Supreme Court on Wednesday suspended the license of attorney Michael Kwasnik who has been charged with stealing $1.1 million from an elderly client in Cherry Hill (he has not yet been suspended in Pennsylvania), and is being investigated with respect to an $8.5 million Ponzi scheme.  Mr. Kwasnik was arrested in Alabama last month, with a passport and maps, after being turned in by a taxi driver who thought he was acting suspiciously.

In September 2009, Mr. Kwasnik was  added as a defendant to a lawsuit brought by the FTC involving home loan modifications, and ethics charges have been pending in New Jersey since December 2008.  The Philadelphia Inquirer has put together a good series of articles on Mr. Kwasnik.  If Mr. Kwasnik is convicted, he will certainly face disciplinary proceedings under Rule 8.4 of the Rules of Professional Conduct.

-Josh J.T. Byrne, Esquire (H.T. BCB)


Best practices tip- Client Letters

Thursday, December 8th, 2011

We have previously blogged about some of the good resources that are available from various professional liability insurers.  Recently Swiss Re (Westport Insurance) created a “PA Bar Risk Management Webinar” on the subject of documentation for lawyers.  Among the excellent information contained in this Webinar is sample language for several types of letters which should be regularly employed by attorneys.  Use of these letters is important in defining the scope of representation and managing client expectations, which are vital parts of malpractice avoidance.  Seven “primary” letters are identified in the Webinar: 1) engagement letter; 2) non-engagement letter; 3) non-client letter; 4) demand/expectation letter; 5) judgment call/rejection of attorney recommendation; 6) disengagement letter; and 7) closing letter.

While each of these letters can be vitally important, two of them strike me particularly as letters that are not used with sufficient frequency, and could prevent a significant number of legal malpractice cases if used with regularity.  Non-engagement letters are very important.  It is remarkable how frequently a client will hear a what an attorney believes is a clear “no” as “yes.”  Therefore, if a meeting with a potential client does not result in representation, the lawyer should send a non-engagement letter which includes:

• You have decided not to take their case

• don’t give opinion on the merits of their case

• warn them that a statute of limitations may exist that could bar their case (do not offer an opinion as to what the statute might be)

• advise them to contact another attorney immediately

The Webinar has provided some suggested sample language for non-engagement letters which we have been given permission to reprint:

In declining to take your case, we are not expressing an opinion about the merits of your position. We encourage you to consult with another attorney regarding your case if you so choose. Our decision not to accept this representation should not be interpreted as an adverse opinion about the merits of your case. We are not charging a fee for reviewing the materials you provided. We charge a fee only for opinions about possible claims. Because we have not provided you with an opinion, there is no charge.

Please note that the law limits the time within which individuals may file law suits. Allowing too much time to pass may forever bar you from asserting your claim. We are not providing our opinion as to the date by which you must file any law suit against [potential adverse parties]. We encourage you, however, to immediately contact another attorney if you wish to pursue your claim.

The Webinar also suggests language for when an attorney meets with a client who decides not to retain him/her:

It was a pleasure to meet with you on [date] to discuss [subject matter of consultation]. At the end of our meeting, you stated that you wanted some time to decide whether you wished to proceed with that matter. Unless and until you agree to proceed with [subject matter] and that we will represent you in that matter, you should not consider us to be your attorneys. We are not representing you at this time, and will not represent you unless and until you sign a formal engagement agreement.

Please note that the law limits the time within which individuals may file law suits. Allowing too much time to pass may forever bar you from asserting your claim. We are not providing our opinion as to the date by which you must file any law suit against [potential adverse parties]. We encourage you, however, to immediately contact another attorney if you wish to pursue your claim.

The another type of letter that is severely underutilized is what the Webinar refers to as the “Judgment call/rejection of recommendation” letter.  This is a letter which should be sent when the client makes a decision regarding the representation that could effect the outcome of the case, especially when a client rejects the attorney’s recommendation.  Unfortunately, there can be no set language for this type of letter, but it should outline the options presented to the client, the ramifications of each option and the choice the client made.  If the client is rejecting your recommendation, state that the client has selected an option that is not your recommendation.  Such letters, when used regularly, will go a long way to fulfilling your obligations under Pennsylvania’s Rule of Professional Conduct 1.4 (Communication), and are a good start in malpractice avoidance.

-Josh J.T. Byrne, Esquire (H.T. Elizabeth Whitney, Esquire/Swiss Re)