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FREIVOGEL ON CONFLICTS WHAT'S NEW Home/Table of Contents Items posted here during the past thirty days will also appear on this What's New page. Items posted within the past ten days will appear In Ten Day Bulletin immediately below. Items older than ten days but less than 30 days will be posted in the Thirty-Day Holding Area, which follows. Ten Day Bulletin Waiver; Advance Waiver (posted March 22, 2019) Cedar Rapids Bank & Trust Co. v. Mako One Corp., 2019 WL 1283988 (8th Cir. March 21, 2019). Corp. hired Law Firm to draft a tax credit bond to finance a building restoration project. Bank purchased the bond. When a default occurred, Bank hired Law Firm to bring this foreclosure proceeding against Corp. Corp. moved to disqualify Law Firm. The trial court denied the motion. In this opinion the Eighth Circuit reversed, based upon an "inadequate" written advance waiver signed by Law Firm, Corp., and Bank, before hostilities broke out. The court said "the letter makes no pretense to elucidate any risk involved," only that the parties' interests "are or may be adverse." The letter also contained an unfortunate drafting error. There is more, but the reader should get the idea by now. Conflict Uncategorized; Rule 1.11 (posted March 21, 2019) Re: Nat'l Prescription Opiate Litig., 2019 WL 1274555 (N.D. Ohio March 19, 2019). From 2009 until 2017 Carole Rendon ("Rendon") was a lawyer in the office of the U.S. Attorney for the N.D. of Ohio ("the Office"). During that period Rendon represented the Office in an opiode task force, which included health professionals, state and local law enforcement, and others. Included were City of Cleveland ("City") and Cuyahoga County ("County"). In 2017 Rendon left government and joined Baker & Hostetler ("B&H"). After Rendon joined B&H, City and County joined in lawsuits against opiode providers, including Endo Int'l PLC ("Endo;" full name from press account). Rendon appeared for Endo. City and County moved to disqualify Rendon and B&H. In this opinion the court granted the motion. The court found that Rendon did not violate Ohio Rule 1.11(a), but did violate Rule 1.11(c). The court relied in significant part on a letter from a Senior Trial Counsel from the Office claiming that City and County did share relevant nonpublic information with Rendon while she was on the task force. Conflict Uncategorized (posted March 20, 2019) Jarvis v. Jarvis, 2019 WL 1254013 (Cal. App. March 19, 2019). Todd Jarvis and James Jarvis are the 50% owners of Jarvis Properties, a limited partnership ("LP"). They are at odds over what to do with property in the LP. James filed this action for partition against Todd and LP. Todd hired a lawyer for himself and and hired a different lawyer, William Roscoe, to represent LP. A California statute provides, in effect, that a 50% owner cannot act on behalf of a partnership. Therefore, James moved to disqualify Roscoe. The trial court granted the motion. In this opinion the appellate court affirmed. The court could not nail down precedent for this situation. While repeatedly emphasizing that this was not a conflict of interest situation, the court discussed California conflicts law extensively. The court did not say how LP's successor lawyer should be selected but seemed confident that the trial court would figure something out under its "inherent and equitable powers." Insurance Defense; One Client, or Two (posted March 20, 2019) Sentry Select Ins. Co. v. Maybank Law Firm, LLC, No. 2016-001351 (S.C. March 11, 2019). In this opinion, responding to a certified question from the federal district court, the court, in a 3-2 split, held that the insurer is not a client. However, the court said an insurer might bring a malpractice action against defense counsel if the malpractice was the proximate cause of the insurer's damage, and the interests of the insured and insurer are perfectly aligned. The dissent opined that the insurer cannot sue the law firm, including for negligence or under a third-party beneficiary theory. Arbitration (posted March 18, 2019) Summerville v. Innovative Images, LLC, 2019 WL 1219361 (Ga. App. March 15, 2019). Legal malpractice case. The only issue we will address is whether an agreement to arbitrate a malpractice claim was enforceable. The agreement in this case, while otherwise clear, did not explain the disadvantages of arbitration (no appeal, discovery, or jury). In this opinion the appellate court ruled the agreement enforceable. The court noted that ABA Op. 02-425(2002) would require such an explanation, but also noted that the Georgia Supreme Court had not yet ruled on the ABA opinion's applicability. Malpractice Liability (posted March 14, 2019) Salomon v. Matte-Thompson, 2019 SCC 14 (CanLII) (S. Ct. February 28, 2019). Plaintiff sought investment advice from her lawyer ("Lawyer"). Lawyer referred Plaintiff to an investment advisor ("Advisor"). During a four year period Plaintiff and her company invested $7.5 million with Advisor. During that period Lawyer remained supportive of Advisor, despite misgivings expressed by Plaintiff. In 2007 it became clear that the investments were fraudulent, and Plaintiff's money was lost. Plaintiff sued Advisor, Advisor's business associate, Lawyer, and Lawyer's firm. This appeal involves Plaintiff's claim against Lawyer (and his law firm). The trial court found for Lawyer. The Quebec Court of Appeal reversed outright, finding Lawyer and his firm owed Plaintiff for all her losses. In this opinion the Supreme Court affirmed the Court of Appeal. The principal issue was what a client would have to show to claim wrongful referral. We will spend little space on that. Part of the ruling found Lawyer in a conflict of interest. The factors leading to that finding included: (1) Lawyer and Advisor had been friends for many years; (2) Lawyer made disclosures about Plaintiff to Advisor; (3) Lawyer and Advisor worked together to convince Plaintiff not to withdraw her money; and (4) there were a series of payments back and forth between Lawyer and Advisor, including gifts to Lawyer, that had not been fully explained. MISCELLANEOUS ETHICS AND LIABILITY NEWS [Note: Items that do not fit under the conflicts categories below, but which we believe will be of interest to this audience will appear here and on the This and That pages.] CONFLICTS - UNCATEGORIZED [Note: These, too, will appear at the This and That pages.] Rule 1.11 (posted March 21, 2019) Re: Nat'l Prescription Opiate Litig., 2019 WL 1274555 (N.D. Ohio March 19, 2019). From 2009 until 2017
Carole Rendon ("Rendon") was a lawyer in the office of the U.S. Attorney
for the N.D. of Ohio ("the Office"). During that period Rendon
represented the Office in an opiode task force, which included health
professionals, state and local law enforcement, and others. Included
were City of Cleveland ("City") and Cuyahoga County ("County"). In 2017
Rendon left government and joined Baker & Hostetler ("B&H").
After Rendon joined B&H, City and County joined in lawsuits against
opiode providers, including Endo Int'l PLC ("Endo;" full name from press
account). Rendon appeared for Endo. City and County moved to disqualify
Rendon and B&H. In this opinion the court granted the motion. The
court found that Rendon did not violate Ohio Rule 1.11(a), but did
violate Rule 1.11(c). The court relied in significant part on a letter
from a Senior Trial Counsel from the Office claiming that City and
County did share relevant nonpublic information with Rendon while she
was on the task force. (posted March 20, 2019) Jarvis v. Jarvis, 2019 WL 1254013 (Cal.
App. March 19, 2019). Todd Jarvis and James Jarvis are the 50% owners of
Jarvis Properties, a limited partnership ("LP"). They are at odds over
what to do with property in the LP. James filed this action for
partition against Todd and LP. Todd hired a lawyer for himself and and
hired a different lawyer, William Roscoe, to represent LP. A California
statute provides, in effect, that a 50% owner cannot act on behalf of a
partnership. Therefore, James moved to disqualify Roscoe. The trial
court granted the motion. In this opinion the appellate court affirmed.
The court could not nail down precedent for this situation. While
repeatedly emphasizing that this was not a conflict of interest
situation, the court discussed California conflicts law extensively. The
court did not say how LP's successor lawyer should be selected but
seemed confident that the trial court would figure something out under
its "inherent and equitable powers." (posted March 18, 2019) Summerville v. Innovative Images, LLC, 2019 WL 1219361 (Ga. App. March 15, 2019). Legal malpractice case. The only issue we will address is whether an agreement to arbitrate a malpractice claim was enforceable. The agreement in this case, while otherwise clear, did not explain the disadvantages of arbitration (no appeal, discovery, or jury). In this opinion the appellate court ruled the agreement enforceable. The court noted that ABA Op. 02-425(2002) would require such an explanation, but also noted that the Georgia Supreme Court had not yet ruled on the ABA opinion's applicability. BANKRUPTCY (To read full article, click here) Nothing current. Nothing current. BOARD POSITIONS (To read full article, click here.) Nothing current. CHANGING FIRMS - SCREENING (To read full article, click here.) Paralegal (posted March 1, 2019) DL v. CL, 2019 WL 968052 (Haw. App. Feb.
28, 2019). In this divorce case a paralegal left the plaintiff's firm
and joined the defendant's firm. The plaintiff moved to disqualify the
defendant's firm. The trial court denied the motion. In this opinion the
appellate court affirmed. The defendant's firm demonstrated that its
screen was effective. CLASS ACTIONS (To read full article, click here.) (posted February 25, 2019) Glazer v. Reimer Law Co., 2019 WL
651599 (N.D. Ohio Feb. 15, 2019). Plaintiff, a lawyer, brings this case
pro se against Law Firm, claiming Law Firm conducted a foreclosure
against Plaintiff in violation of the FDCPA. The case purports to be a
class action. In this opinion the court granted a motion to strike the
class allegations because, in the Sixth Circuit, class counsel cannot
also be class representative. Plaintiff showed no signs of hiring other
counsel, so the court did not see the point in waiting for a motion to
certify the class to dispose of the class allegations. Nothing current. CO-COUNSEL/COMMON INTEREST (To read full article, click here.) Nothing current. Nothing current. CORPORATIONS (To read full article, click here.) CORPORATE FAMILIES (To read full article, click here.) CRIMINAL PRACTICE (To read full article, click here.) Nothing current. CURRENT CLIENT (To read full article, click here.) (posted March 1, 2019) Hammer v. City of Sun Valley, 2019 WL
958360 (D. Ida. Feb. 26, 2019). This case is one of many in a "food
fight" (our term) arising from the City's termination of Hammer as a
City employee. In this case Plaintiff Hammer is being represented by her
husband, Donoval. Donoval is also representing himself as a plaintiff
in this case. Defendants moved to disqualify Donoval. In this opinion
the magistrate judge denied the motion. First, the court held that the
arrangement did not violate Rule 1.8(i), notwithstanding state community
property laws. Further, the court found no violation of Rule 1.7(a)(2)
(material limitation) because the two plaintiffs' interests were
"generally aligned." Last, in the face of a Rule 3.7 objection, the
court held merely that Donoval could handle pre-trial matters. DERIVATIVE ACTIONS (To read full article, click here. Nothing current. ENJOINING CONFLICTS (AND OTHER NON-TRADITIONAL REMEDIES) (To read full article, click here.) Nothing current. EXPERT WITNESSES (To read full article, click here.) Nothing current. FORMER CLIENT (To read full article, click here.) Nothing current. Nothing current. HOT POTATO DOCTRINE (To read full article, click here.) Nothing current. INITIAL INTERVIEW - HEARING TOO MUCH (To read full article, click here.) Nothing current. INSURANCE DEFENSE (To read full article, click here.) One Client, or Two (posted March 20, 2019) Sentry Select Ins. Co. v. Maybank Law Firm, LLC,
No. 2016-001351 (S.C. March 11, 2019). In this opinion, responding to a
certified question from the federal district court, the court, in a 3-2
split, held that the insurer is not a client. However, the court said
an insurer might bring a malpractice action against defense counsel if
the malpractice was the proximate cause of the insurer's damage, and the
interests of the insured and insurer are perfectly aligned. The dissent
opined that the insurer cannot sue the law firm, including for
negligence or under a third-party beneficiary theory. One Client, or Two (posted March 4, 2019) Arch Ins. Co. v. Kupicki Draper, LLP,
2019 Fla. App. LEXIS 886 (Fla. App. Jan. 23, 2019) (from our good friends at Hinshaw & Culbertson). The court held that
insurance defense counsel retained by a casualty carrier to defend an
insured does not represent the carrier and cannot be sued for
malpractice by the carrier. Several federal court cases from Florida
have held to the contrary. They are gathered at our "Insurance Defense"
page under "One Client, or Two." INVESTING IN CLIENTS/STOCK FOR FEES (To read full article, click here.) Nothing current. JOINT/MULTIPLE REPRESENTATION (To read full article, click here.) Nothing current. LAWYER AS EXPERT WITNESS OR CONSULTANT (To read full article, click here.) Nothing current. Nothing current. MALPRACTICE LIABILITY/FEE FORFEITURES (To read full article, click here.) (posted March 14, 2019) Salomon v. Matte-Thompson, 2019 SCC 14
(CanLII) (S. Ct. February 28, 2019). Plaintiff sought investment advice
from her lawyer ("Lawyer"). Lawyer referred Plaintiff to an investment
advisor ("Advisor"). During a four year period Plaintiff and her company
invested $7.5 million with Advisor. During that period Lawyer remained
supportive of Advisor, despite misgivings expressed by Plaintiff. In
2007 it became clear that the investments were fraudulent, and
Plaintiff's money was lost. Plaintiff sued Advisor, Advisor's business
associate, Lawyer, and Lawyer's firm. This appeal involves Plaintiff's
claim against Lawyer (and his law firm). The trial court found for
Lawyer. The Quebec Court of Appeal reversed outright, finding Lawyer and
his firm owed Plaintiff for all her losses. In this opinion the Supreme
Court affirmed the Court of Appeal. The principal issue was what a
client would have to show to claim wrongful referral. We will spend
little space on that. Part of the ruling found Lawyer in a conflict of
interest. The factors leading to that finding included: (1) Lawyer and
Advisor had been friends for many years; (2) Lawyer made disclosures
about Plaintiff to Advisor; (3) Lawyer and Advisor worked together to
convince Plaintiff not to withdraw her money; and (4) there were a
series of payments back and forth between Lawyer and Advisor, including
gifts to Lawyer, that had not been fully explained. OF COUNSEL (To read full article, click here.) Nothing current. OPPOSING LAWYERS NEGOTIATING A LAW PRACTICE MERGER (To read full article, click here.) Nothing current. PARTNERSHIPS (INCLUDING LIMITED PARTNERSHIPS) (To read full article, click here.) Nothing current. SETTLEMENT AGREEMENTS (To read full article, click here.) Nothing current. STANDING (To read full article, click here.) Nothing current. Nothing current. UNDERLYING WORK PROBLEM (To read full article, click here.) Nothing current. WAIVERS/CONSENTS (To read full article, click here.) Advance Waiver (posted March 22, 2019) Cedar Rapids Bank & Trust Co. v. Mako One Corp.,
2019 WL 1283988 (8th Cir. March 21, 2019). Corp. hired Law Firm to
draft a tax credit bond to finance a building restoration project. Bank
purchased the bond. When a default occurred, Bank hired Law Firm to
bring this foreclosure proceeding against Corp. Corp. moved to
disqualify Law Firm. The trial court denied the motion. In this opinion
the Eighth Circuit reversed, based upon an "inadequate" written advance
waiver signed by Law Firm, Corp., and Bank, before hostilities broke
out. The court said "the letter makes no pretense to elucidate any risk
involved," only that the parties' interests "are or may be adverse." The
letter also contained an unfortunate drafting error. There is more, but
the reader should get the idea by now. Advance Waiver (posted February 27, 2019) Southern Visions, LLP v. Red Diamond, Inc.,
2019 WL 936666 (N.D. Ala. Feb. 26, 2019). In this case Southern is
suing Red Diamond for patent infringement. From 2009 until December 26,
2018 Law Firm represented Red Diamond "in various small matters from
time to time." In December 2018 Law Firm was representing Red Diamond in
three collection matters. On December 23, 2019 Law Firm began
representing Southern in this case. On December 26, 2018, while the
parties were fussing about the conflict, Law Firm discontinued
representing Red Diamond. Upon commencement of several Red Diamond
matters, Law Firm had Red Diamond sign broad advance waivers. Red
Diamond moved to disqualify Law Firm in this case. In this opinion the
court granted the motion. The crux of the decision, in our view, was
that Law Firm failed to obtain adequate informed consent, either when
the advance waivers were signed or in December 2018. The court said that
an advance waiver might work if the law firm was specific as to "types
of potential future conflicts." The court also said that suggesting the
client seek the advice of other counsel about the advance waiver might
help. None of that occurred here. [Our note: The opinion was 17 pages
- unnecessarily long. It contained discourses on the ethics rules
(primarily 1.7), conflicts law in the Eleventh Circuit and elsewhere,
advance waivers, and so forth.] WITNESS - ADVERSE - CURRENT/FORMER CLIENT (To read full article, click here.) Nothing current. Home/Table of Contents Website powered by Network Solutions® |