Archive for October, 2012

Another Pennsylvania Judge in the News for the Wrong Reasons

Thursday, October 25th, 2012

We have previously written about judges with various problems, especially in Pennsylvania.   Disciplinary charges have now been filed against Philadelphia Court of Common Pleas Judge, Thomas M. Nocella.  Judge Nocella is no stranger to controversy, having admitted previously to being the recipient of political favors.

-Josh J.T. Byrne, Esquire

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Ethical Issues Regarding Letters of Protection

Tuesday, October 23rd, 2012

Here is an interesting opinion piece from the Hanford, California Sentinel regarding the enforcement of letters of protection (promises by attorneys to pay clients’ doctors’ bills out of lawsuit recovery, a type of medical lien).  Apparently, the California Bar used to investigate cases where attorneys allegedly disregarded letters of protection, but are now taking a hands of approach.  Letters of protection in general involve a number of interesting ethical and practical issues  for attorneys,  medical providers, and clients.  The most important ethical rule for both attorneys and medical providers is not to put their own financial interests in front of the clients.  The value of the letter of protection for the client should always be considered before signing a letter of protection.

-Josh J.T. Byrne, Esquire  (H.T. B.C.B.)

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Who Will Defend You?

Friday, October 19th, 2012

Most people understand that when they purchase insurance, they are agreeing to allow their insurer to select defense counsel for them should an action be brought against them.  Most attorneys understand that when defense counsel is assigned to a legal malpractice action defended by their professional liability carrier, there is the possibility of a conflict of interest between the desires of the client law firm and the designers of the insurer.  The Texas law firm of Coats, Rose, Yale, Ryman & Lee, when sued for legal malpractice, decided it could not abide by the provision of their insurance policy which gave their insurer the right to select defense counsel.  The law firm retained its own counsel, independently of its insurer, Navigators Specialty Insurance Co., and then sued the insurer when the insurer refuse to pay the attorneys fees.

In November 2011, U.  S.  District Judge Sidney Fitzwater granted summary judgment for Navigators.  Coats Rose appealed and a three-judge panel affirmed Judge Fitzwater’s decision earlier this week.  The appellate panel adopted Judge Fitzwater’s opinion which found both the law firm and insurer had the same incentive to defeat the claim, despite the insurers reservation of rights under the policy not to cover fraudulent willful violations of the statute.

Attorneys who represent defendants in legal malpractice actions are, as a rule, acutely aware of the potential for conflict in their cases.  The attorneys do all within their power to minimize that potential.  However, there are times when clients feel an attorney hired by their insurer cannot protect their interests.  On those occasions, the law firm is certainly entitled to hire its own counsel, but  they will generally have to do so out of their own pocket.

-Josh J.T. Byrne, Esquire

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Limitations of the Litigation Privilege Defense

Tuesday, October 16th, 2012

The New Jersey Superior Court, Appellate Division, has recently decided the case of Buchanan v.  Leonard.  The Appellate Division reversed in part the decision of the Law Division, which had granted summary judgment in this legal malpractice case on the basis of the litigation privilege defense.  The legal malpractice action arose out of the underlying legal malpractice action, which in turn arose out of a bankruptcy filing.

Mr. Buchanan had represented Earl and Sherri Kerr in the filing of a Chapter 13 bankruptcy petition, despite his advice to them that they would be better served by a Chapter 11 petition.  The bankruptcy was not successful, and the Kerrs lost their residence and a commercial property.

After the Kerrs lost the residence, they filed a legal malpractice action against Mr. Buchanan.  Mr. Buchanan was represented by Mr. Leonard, of the firm Morgan Melhuish, in the defense of legal malpractice action.  Mr. Leonard was retained by Mr. Buchanan’s insurance company Legion Insurance Company for the defense.   However in July 2003, Legion was declared insolvent, and the New Jersey Property Liability Insurance Guarantee Association ( NJPLIGA) assumed the defense obligations.   In April 2005, Mr. Leonard submitted to NJPLIGA a form seeking authorization to settle the litigation.  In his request Mr. Leonard referred to an August 21, 1993 letter Mr. Buchanan had written to the Kerrs stating that Mr. Buchanan agreed to inflate the value of a garage on the bankruptcy petition, as long as the Kerrs agreed they would indemnify him for any sanctions imposed for utilizing misleading figures.  Mr. Leonard wrote that this letter was “an admission of bankruptcy fraud.”  On May 16, 2005, a week before trial, NJPLIGA advised Mr. Buchanan that it was withdrawing coverage as a result of the August 21, 1993 letter.   There followed a declaratory judgment action, and in February, 2007, after a bench trial the law division held that Mr. Buchanan was entitled to coverage.

Mr. Buchanan then sued Mr. Leonard based upon the report to NJPLIGA stating that Mr. Buchanan’s conduct amounted to fraud, alleging that Mr. Leonard had been negligent in his representation of him by failing to protect his interest, and deliberately expressing an opinion contrary to his best interest.  In November 2011, Mr. McKinnon filed a motion for partial summary judgment.  Defendants opposed the motion and filed the cross-motion for summary judgment.  Defendants argued the claims were barred by the litigation privilege.  The Law Division granted summary judgment on all claims, stating that because they were based on Mr. Leonard statements in the settlement memorandum, they were covered by the litigation privilege.

In its decision reversing the Law Division, the Appellate Division noted the litigation privilege had been held not to protect attorneys from discipline for violating the Rules of Professional Conduct.  The Appellate Division held that by analogy the litigation privilege would not protect an attorney from a claim by his clients.  The Appellate Division relied on several California cases with similar holdings.

The takeaways from this litigation are to be aware of the likely limits of the litigation privilege, and for defense counsel to always keep in mind who their actual client is.

-Josh J.T. Byrne, Esquire

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Astounding Judicial Conduct

Friday, October 12th, 2012

The ABA Journal has posted video of retired Jefferson Kentucky Circuit Judge Martin McDonald insulting, threatening, interrupting, and belittling an apparently respectful attorney.  Even if joking, the judge’s threat to “strangle” defense counsel is astounding.  Although the entirety of the circumstances may not be revealed in these clips, the judge’s behavior is well out of bounds (the open robe, unbuttoned shirt, and loose tie, do not help to make the judge appear any more sagacious).  The judge’s behavior is consistent with a 2004 review by the Louisville Bar Association which ranked Judge McDonald dead last among Jefferson Circuit judges in every category, including being more than twenty points behind the next lowest judge in legal ability.

-Josh J.T. Byrne, Esquire

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Discipline Round-Up

Wednesday, October 10th, 2012

The latest in our semi-regular examination of recent attorney discipline in Pennsylvania includes: practicing while suspended; being caught by the police snorting coke; and  converting client funds.

Since August 1, 2012, there have been 7, disbarments, 15 suspensions,  5 reinstatements, and 2 public censures.

Attorney William M. Dickerson, a Philadelphia attorney, agreed to voluntary disbarment after continuing to practice law while on administrative suspension.  Mr. Dickerson was suspended from the practice of law in 2010, for failure to pay his attorney registration fees, and continued to represent people in criminal and immigration cases for the next two years.  Attorney John Francis Licari was also disbarred for continuing to practice while on administrative suspension.

Attorney Adam Marc Yanoff, a New Jersey attorney, also admitted in Pennsylvania, had recently been hired as an Assistant District Attorney in Philadelphia, when a police officer spotted him using a straw to snort a white powdery substance.  Mr. Yanoff subsequently entered a nolo contendere plea to possession of cocaine and marijuana.  Mr. Yanoff consented to a public censure from the Disciplinary Board.

Attorney Thomas Alvin Landis, a former Lansdale attorney, was suspended upon consent for five years.  Mr. Landis was suspended due to various errors related to the administration of two estates, including issuing checks to himself from the estate’s account and signing the executrix’s name to the check without her knowledge.  The Disciplinary Board noted that a five year suspension or disbarment were the standard punishments for attorneys who knowingly convert client funds.

-Josh J.T. Byrne, Esquire

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Is it a Patent Case or a Legal Malpractice Action?

Monday, October 8th, 2012

The Supreme Court of the Untied States has granted certiorari to a Supreme Court of Texas case, Minton v. Gunn which addresses the federal court exclusivity for a legal malpractice action arising out of a patent case.  Legal malpractice is generally a state law tort claim, but the federal courts have jurisdiction over claims arising under the patent laws.  The question, therefore, is whether the legal malpractice action “arises under” the patent law.  The Supreme Court of Texas found that it did, and that the Texas courts lacked jurisdiction over the matter.  There are several cases, relied upon by the Supreme Court of Texas dissenters, which set forth the four elements necessary to establish federal jurisdiction, elements the dissenters assert were not addressed by the majority:

federal question jurisdiction exists where (1) resolving a federal issue is necessary to resolution of the state-law claim; (2) the federal issue is actually disputed; (3) the federal issue is substantial; and (4) federal jurisdiction will not disturb the balance of federal and state judicial responsibilities.

-Josh J.T. Byrne, Esquire

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Attorney pleads guilty to theft of $10,000,000 of client funds

Thursday, October 4th, 2012

Theft of client funds is a sure way to get into legal hot water.  We have written before about lawyers who stole from clients, employers, and even attorneys getting into trouble because of what their partners stole, but few cases match the audacity of Douglas Arntsen.  Mr. Arntsen has pled guilty of stealing over ten million dollars from two clients and  using the funds to pay for visits to “expensive restaurants, sporting events and strip clubs.”  The former Crowell & Moring attorney fled to Hong Kong after learning of an investigation into the missing funds.

According to the District Attorney’s press release:

“The trust between attorney and client is sacred,” said District Attorney Vance. “This defendant utterly betrayed that trust by stealing large amounts of money from his clients before fleeing to Hong Kong. Today’s conviction holds him accountable for fraudulent conduct that violated the law, abused his clients’ trust, and cost them millions of dollars.”

As we have previously noted, theft will always lead to violations of the Rules of Professional Conduct.  Most obviously, a violation of law that reflects upon one’s honesty is a violation of RPC 8.4(b):

Rule 8.4 Misconduct

It is professional misconduct for a lawyer to:

(a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another;

(b) commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects;(c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation;

(d) engage in conduct that is prejudicial to the administration of justice;

(e) state or imply an ability to influence improperly a government agency or official or to achieve results by means that violate the Rules of Professional Conduct or other law; or

(f) knowingly assist a judge or judicial officer in conduct that is a violation of applicable rules of judicial conduct or other law.

-Josh J.T. Byrne, Esquire

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A Reasonable Break

Monday, October 1st, 2012

In March 2011, we posted on the plight of counsel in Newman Development Group v. Genuardi’s, 744 EDA 2010 (Pa. Super. 2010).  The Superior Court quashed an appeal of an $18,489,221.60 verdict because defendants did not file any post-trial or reconsideration motions after the trial court’s final verdict following a remand from the Superior Court.  Although the defendants had filed a motion for reconsideration of a January 15, 2010 opinion, they did not file any motion with respect to a subsequent February 25, 2010 decision.   Plaintiff argued that the failure to file a post-trial motion with respect to the February 25, 2010 decision resulted in a waiver of the issues on appeal pursuant to Pa. R.C.P. 227.1, and the Superior Court agreed.  The Superior Court rejected defendants’ argument that no post-trial motion could be filed because there was no trial following the remand.

The Supreme Court of Pennsylvania, in a unanimous decision authored by Justice Castille, has reversed, largely on the basis that Rule 227.1 speaks to “trials,” and the matter at hand “involves a gray area, where there are to be further proceedings below, but the proceedings do not amount to a new trial.”

The court further notes:

Our holding interprets this Court’s Rule as it is written.  This case has revealed, however, that there are circumstances and nuances, involving appellate remands, that the current Rule does not account for.  Accordingly, we will refer this issue to the Civil Procedural Rules Committee for an examination and recommendation of whether, in the Committee’s view, revisions should be made to the Civil Rules.

This is a sensible ruling, but does not detract from the warning that malpractice avoidance requires careful consideration of appropriate post-trial filings.

-Josh J.T. Byrne, Esquire

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