Posts Tagged ‘legal malpractice’

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Some General Materials on Legal Malpractice

Friday, April 19th, 2013

We have previously shared a number of web resources on legal malpractice avoidance.  The following are some readily available web resources on legal malpractice in general:

These materials, apparently course material from the New York County Lawyers’ Association, include a very general treaties on legal malpractice, as well as specific information for investment and accounting professionals.  While the materials are focused on New York law, they do provide a very good overview of legal malpractice in general.

The website Justia.com provides a short overview of legal malpractice without any citations for case references.  Of considerably more usefulness is American Bar Association’s 50 state survey legal malpractice law.  These materials, however, are available only to ABA members.

-Josh J.T. Byrne, Esquire

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Appeal Seeks to Broaden Scope of Who Can Sue Attorneys

Thursday, March 14th, 2013

The Blog of LegalTimes reports on oral arguments in a legal malpractice action by Boston-Maine Airways Corp. against Sheppard, Mullin, Richter & Hampton.  Summary judgment was granted to Sheppard Mullin, and Boston-Maine appealed arguing that  although it was not formally a Sheppard Mullin client, the representation of its sibling companies and a shared owner gave it standing to sue.

-Josh J.T. Byrne, Esquire

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The Superior Court’s Most Recent Legal Malpractice Ruling

Thursday, March 7th, 2013

On February 19, 2013, the Superior Court issued an opinion in O’Kelly v. Dawson, 421 WDA 2012.  Superior Court’s opinion by Judge Wecht upheld a legal malpractice verdict in favor of plaintiff, James O’Kelly who was represented by defendant/appellant, Michele S. Dawson, Esquire, in an underlying divorce.  The primary allegation was the attorney had not finalized an alimony agreement between the spouses, and as a result, a less favorable alimony award was entered by the master in the divorce action.  The appeal argued the spouses never agreed on all of the essential terms of the alimony agreement, and the statute of limitations barred legal malpractice action.

The Superior Court determined that the jury was presented with conflicting evidence with respect to whether the essential terms of alimony had been agreed upon, and found their decision that an agreement had been reached did not “shock the conscience.”  The Superior Court noted it could not put itself “into the jury’s place.”

The statute of limitations argument was not before the jury, but argued in a motion for summary judgment, as well as a post-trial motion.  The appellant had requested the issue of statute of limitations not be sent to the jury, but be decided by the judge.  The trial court found the statute of limitations was tolled by the equitable discovery doctrine until the date of the trial court order adopting the master’s recommendation.  On appeal, it was argued that no two reasonable minds could disagree the statue limitations barred the claim, and in the alternative, that the trial judge erred in not sending the issue to the jury with respect to the exercise of reasonable diligence by the husband in discovering the alleged error.  The court noted appellant argued before the trial court that no two reasonable minds could differ in finding that the plaintiff knew, or should have known, of the potential malpractice as of the date of the master’s recommendation, and therefore the issue should not go before the jury.  The appellant succeeded as to process, “but failed as to substance.”  While recognizing this would usually be an issue for the jury, the Superior Court found appellant could not “now be heard to assert that the trial court erred in granting Appellant’s request that the limitations issue be reserved for the court.”  The Superior Court found the argument that the issue should have been sent to the jury had been waived.  The Superior Court found the trial court “necessarily made a factual finding as to Husband’s reasonable diligence.”  The Superior Court noted that following the master’s recommendation, appellant had advised the husband the trial court would reject the master’s recommendation and order alimony to reflect the parties’ proposed alimony agreement.

Judge Colville filed a dissenting opinion.  The dissenting opinion was not published with the majority opinion.

Professional liability avoidance requires attorneys to be aware of the possibility of equitable tolling of the statute limitations.  While Pennsylvania operates under a strict “occurrence rule” with respect to the statute of limitations, the statute may be tolled if an attorney offers reassurances of a positive result after an alleged act of negligence.

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Does an Excess Carrier Have Standing to Sue a Defense Counsel?

Tuesday, February 26th, 2013

Claims Journal has a nice roundup of cases on whether a defense counsel retained by a primary insurer has an actionable attorney-client relationship with an excess insurer for purposes of a legal malpractice claim.  Last year we reported on two recent cases which permitted these types of claims, to some degree, despite the fact that they have been traditionally disfavored.  As we have previously noted, this is a fluid area of legal malpractice avoidance which remains a concern for defense attorneys.

-Josh J.T. Byrne, Esquire

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Gunn v. Minton Decided- Supreme Court Says Legal Malpractice Belongs in State Courts

Thursday, February 21st, 2013

We have been following the progress of Gunn v. Minton as it moved through the courts.  The Supreme Court of the United States has now issued its opinion: Gunn v. Minton, No. 11-1118 (U.S., decided February 20, 2013).  The Supreme Court has reversed the Texas Supreme Court, and held that federal courts do not have jurisdiction over a legal malpractice claim arising from a patent dispute.  Chief Justice Roberts delivered the opinion of the unanimous Court.

Applying the test we articulated in
Grable & Sons Metal Products, Inc. v. Darue Engineering
& Mfg., 545 U. S. 308, 314 (2005),
The Court applied the test articulated in Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U. S. 308, 314 (2005), to determine whether the legal malpractice claim “arises under” federal patent law for the purposes of removal.  Under Grable, the court held federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.  The Court acknowledged that resolution of a federal patent question was “necessary” to the legal malpractice case, and that the federal issue was also “actually disputed.”  The Supreme Court  found it was on the third prong of the Grable test the argument failed.  The court found that because “of the backward looking nature of the legal malpractice claim” the question was purely a hypothetical and would never change the “real-world” result of federal patent litigation.  The court noted that as patent jurisdiction is exclusively endowed in the federal system, even if a state court addresses a novel issue of patent law, the result would not be binding on a subsequent federal court considering the issue.
As a result of this decision, it is unlikely that legal malpractice cases going forward will be removed to federal courts simply because the resolution includes issues of federal law.
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Deadlines the Harsh Reality of Legal Malpractice

Monday, January 28th, 2013

As we have previously written, calendaring issues are the number one cause of legal malpractice actions, and good calendaring habits are the single most effective malpractice avoidance “best practices” available to attorneys.  Appellate deadlines are particularly thorny, as Pennsylvania attorneys were reminded by Newman Development Group v. Genuardi’s, 744 EDA 2010 (Pa. Super. 2010) (although subsequently ameliorated).  The United States Court of Appeals for the Second Circuit in New York, drove this home last week with its decision in Communications Network International v. MCI WorldCom Communications, 10-4588.  Attorney W. Mark Mullineaux, after moving from New York to Philadelphia to join the Philadelphia-based law firm, Astor Weiss Kaplan & Mandel (showing up in the blog for the second time this month), moved to reopen the time allowed to appeal, arguing his failure to update his email contact information on the Electronic Case Filing system, and thus receive notice of the judgment, was excusable neglect and no one was prejudiced.  The argument was made that Rule 4(a)(5) permits a district court to grant a motion for an extension to file notice of appeal where a party shows “excusable neglect or good cause.”  Rule 4(a)(6) allows the judge to reopen the time to file an appeal.  In 2010, Southern District Judge George Daniels granted the motion, but the Court of Appeals reversed.  The court determined Mullineaux was, as a  procedural matter, entitled to the relief, but the discretionary grant of relief was improper.  The court found: “The failure to receive Civil Rule 77(d) notice was entirely and indefensibly the fault of CNI’s counsel.”

Calendaring includes making certain your contact information is current and correct, and that dockets are followed.  The court specifically noted that in agreeing to electronic filing and notification, Mr. Mullineaux agreed to update his information.  Legal malpractice avoidance requires attorneys make sure they remain informed about the cases they are handling, especially as orders and judgments are entered.

-Josh J.T. Byrne, Esquire

But a divided U.S. Court of Appeals for the Second Circuit yesterday restated its “hard line” policy on excusable neglect for missed filing deadlines and said it was Mullineaux’s fault for failing to correct his contact information to reflect his move to Astor Weiss Kaplan & Mandel in Philadelphia
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Supreme Court Hears Arguments on Legal Malpractice Action

Friday, January 18th, 2013

The United States Supreme Court heard oral argument (transcript here) this week on what is probably the most significant legal malpractice case it has considered in several years.  As we have previously written the Supreme Court granted certiorari from a Texas Supreme Court case, Minton v. Gunn, to address the question of 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 main question in the case is what amounts to a “substantial issue” which would require the federal court to exercise jurisdiction of what would otherwise be a state law claim.  One of the main concerns of the justices is whether allowing the state court to decide the matter would create a situation where a state court might create new law on patents, as opposed to having a federal court potentially create new case law on legal malpractice.

-Josh J.T. Byrne, Esquire

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Legal Malpractice Based on Client Confidentiality

Thursday, January 10th, 2013

McDermott, Will & Emery is facing a legal malpractice action alleging a formal partner passed on to his family members confidential information related to a client’s patent applications.  The legal malpractice action is related to a long-standing intellectual property action between Theranos, Inc. and Fusiz Technologies, Ltd. over patents for technologies which would allow doctors to receive real-time information from small amounts of body fluids.  Theranos retained McDermott to prosecute patent applications on its behalf.  The complaint alleges former McDermott partner, John Fuisz, Esquire, gave confidential information regarding the Theranos patent applications to his father and brother who used them to secure their own patents.  Among other allegations, the complaint alleges this is not the first time John Fuisz has been accused of providing confidential client information to his father.  Not surprisingly, the complaint also alleges breach of fiduciary duty.

An attorney’s duty to secure client confidences is obvious.   Pennsylvania Rule of Professional Conduct 1.6 specifically relates to the confidentiality of information, and explicitly holds a lawyer shall not reveal information relating to representation of a client unless the client gives informed consent, except for disclosures that are impliedly authorized in order to carry out the representation, with a few specific exceptions.  Although professional liability actions arising out of intellectual property are small in number, the potential damages in such cases are enormous.  Malpractice avoidance requires all attorneys involved in the prosecution of intellectual property matters need to take reasonable measures to assure the client confidences remain confidential both within and outside of the firm.

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

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Supreme Court of Kentucky Repudiates the Impact Rule for Recovery of Emotional Distress Damages

Monday, January 7th, 2013

The “Impact Rule” has long been the standard plaintiffs must meet to recover emotional distress damages in a number of states (including Pennsylvania, with exceptions).  The Impact Rule generally holds a plaintiff may recover emotional distress damages only if he or she sustained some type of physical contact or injury.  On December 20, 2012, the Supreme Court of Kentucky rendered its decision in Keeney v. Osborne, a legal malpractice action, arising out of an underlying potential claim by a homeowner whose home had a small airplane crash into it.  Brenda Osborne, the homeowner, sued her attorney, Steven Keeney, because he did not file a claim against the pilot of the airplane, Clifford Queensberry, before the statute of limitations expired.  Ms. Osborne was in her house when Mr. Queensberry’s airplane crashed into its roof.  Ms. Osborne was not injured in any way, but alleged her pre-existing anxiety, depression, hypertension, insomnia, and diabetes were all exacerbated due to trauma resulting from the crash.

Mr. Keeney was retained within six months of the accident, but did not file an action against Mr. Queensberry within the one-year applicable statute of limitations.  Although, Mr. Kinney did eventually file a lawsuit, he did not respond to a motion for summary judgment based upon the statue limitations, and did not inform Ms. Osborne about the motion for summary judgment.  Ms. Osborne filed a legal malpractice action against Mr. Keeney.  Ms. Osbourne’s action also included claims for breach of contract and fraud and deceit.  The jury returned the verdict in her favor which included damages for loss of personal property, for pain and suffering from the airplane crash, for punitive damages against Mr. Queensberry, for legal fees paid to Mr. Keeney, for mental anguish resulting from Mr. Keeney’s representation, and $3,500,000 in punitive damages against Mr. Keeney.  The appellate court reversed the awards for emotional distress damages resulting both from the airplane crash and from Mr. Keeney’s conduct because there had been no physical impact.

The Kentucky Supreme Court found the trial court committed reversible error by improperly instructing the jury with respect to the suit-within-a-suit standard for determining legal malpractice.  The Kentucky Supreme Court reversed and remanded the matter for further proceedings.  However, the court explicitly held “a physical impact or touching is no longer required to recover for claims involving emotional distress.”  The Kentucky Supreme Court found the justifications for the impact rule were outdated, and noted that “at least forty jurisdictions have either rejected the impact rule or abandoned it.”  The Kentucky Supreme Court adopted the rule utilized in Tennessee, that recovery should be allowed only for “severe” or “serious” emotional injury.  The court defined serious or severe emotional injury as “where a reasonable person, normally constituted, would not be expected to endure the mental stress engendered by the circumstances of the case.”  The court held a plaintiff must present medical or scientific expert evidence to support the claimed injury or impairment.  The Kentucky Supreme Court also made this rule retroactive.

Attorneys on both sides of the bar must be aware of the evolving landscape regarding emotional distress claims.  While the Kentucky Supreme Court’s opinion dismissing the physical impact rule may allow emotional injury claims in cases where they would not have previously been allowed, the requirement of expert testimony may also restrict some emotional distress claims.

-Josh J.T. Byrne, Esquire

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Decisions Allowing Excess Carriers’ Legal Malpractice Claims Against Defense Attorneys Upheld (to some degree)

Wednesday, December 26th, 2012

Last year we noted a Mississippi Court of Appeals decision which permitted an excess insurance carrier to bring a legal malpractice action against its insureds’ lawyers.  These types of claims have traditionally been disfavored.  The Mississippi Supreme Court has now upheld that decision (Great American E & S Ins. Co. v. Quintairos, Prieto, Wood & Boyer, P.A., 2012 WL 4945958 (Miss. Oct. 18, 2012)) on its equitable subrogation basis, and reversed the ruling with respect to the legal malpractice claims.  The Mississippi Supreme Court found  there was no attorney-client relationship formed between the lawyer and the excess carrier.

In ACE American Ins. Co. v. Sandberg, Phoenix & Von Gontard, PC., 2012 WL 4573340 (S.D. Ill. Oct. 2, 2012), the United States District Court for the Southern District of Illinois denied defendants’ 12(b)(6) motions, and allowed two excess insurers to continue to assert legal malpractice claims against the insureds’ attorneys on both a direct legal malpractice and subrogation basis.  The insured was sued in a product liability action which was settled shortly after the trial judge struck all pleadings on the basis of defense counsel’s discovery abuses.  The excess insurers sued the insureds’ attorneys and their law firm.

The subrogation claims survived, which is not surprising because Illinois is one of the minority jurisdictions which has previously allowed these types of claims.  See, National Union Ins. Co. v. Dowd & Dowd, P.C., 2 F. Supp. 2d 1013 (N.D. Ill. 1998) (applying Illinois law).   The court also allowed the direct malpractice claims to continue because the excess carriers had pled they provided primary coverage to the policyholder.  The court did suggest this was an issue which should be raised again at the summary judgment stage.

While not sufficient to constitute a “trend,” the insurance defense counsel must be mindful that even if their client does not pursue a legal malpractice action, they are not completely isolated from the possibility of a legal malpractice claim.

-Josh J.T. Byrne, Esquire

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