Michael Sean Quinn, Ph.D, J.D., Etc.*, AuthorLaw Office of Quinn and Quinn1300 West Lynn #208Austin, Texas 78703(o) 512-296-2594(c) 512-656-0503mquinn@msqlaw.com
(*Resumes: www.michaelseanquinn.com)
Commandment Three Was First Published as a Blog on January 16, 2015
Commandment Three Was First Published as a Blog on January 16, 2015
This Preface is attached to each of the parts, oppressive though that may appear.This blog is part (1/11th) of a collection called the ELEVEN COMMANDMENTS OF LEGAL ETHICS. There are 11 separate mini-blogs; they need not be read in any particular order. I have tried to keep them “together,” but cyber-success is not an inevitability when I am around. An early version* of it was published a decade or so ago. Before that very short speech versions were used as part of a day long CLE course ordered by the Supreme Court of Texas for new lawyers. Later for several years it was used in other CE or CLE contexts. All of this can be found on my Resume which is linked to (attached to) my website. www.michaelseanquinn.com. There are video versions somewhere in the cyber-sphere, and if not there in the cyber-world or in e-space and/or in the so-called “real world,” for sale. As old as it is, the collection–whether in print, in the “blogus-sky,” on a something like a motion picture–is not really out of date, except there are not explicit references it to legal ethics and the cyber world. At the same the obligations of the lawyers have not changed much, except now there is a new dimension to our confidentiality obligations and and out obligations to keep up to date. The “code numbers” are sometimes to the ABA Model Rules and sometimes to the Texas Rules of Professional Conduct. (*The term “version” means what it says: wordings change and ideas shift, tough the latter very little. Earlier version can be found entered on July 2, 2012 and on March 12, 2014.)
Some of the Blogs will contain supplementary additions. Those added after January 1, 2015 will probably be dated, barring oversight. Readers may note that many of the cites are Texas cases. This resulted from the history of the contents of these blogs.
Given the purposes and context in which the early versions of the essays were written, many of the legal rules explicitly numbered are from The Texas Rules that were built upon the ABA Model Rules.
These disquisitions are revisions something I wrote at least several years ago. First editions of these essays were begun some time ago. Somehow their print got locked in, to some degree, so some parts of the essays were thrown out of kilter and can’t be made right today. This is particularly true along the left margins of some of the essays.
COMMANDMENT FOUR: PERFORM PROMPTLY
Clients are a sort of customers. Lawyers need to figure out
what they need and what they want.
Clients, like customers, need to be pleased. Because the rendition of legal services is
complex and, to some degree, arcane, client-customers need to be educated as to
what to expect if they are ever to be pleased.
Clients may be customers of a very special sort, but they are customers
nonetheless. Unlike superficial
customers, clients are not always right.
Sometimes, lawyers have to help clients find their true interests. Sometimes, it is the responsibility of
lawyers to help clients figure out what they really want and want to do. This part of the practice requires
perception, restraint, judgment, tact, and discernment. Steven Keeva, Transforming
Practices: Finding Joy and Satisfaction
in the Legal Life 99 (1999). On
the other hand, clients are not patients, as classically conceived. They are not helpless, diseased, disabled,
sick, or in need of therapy, simply because they have come to a lawyer. Nor are they necessarily in need of
transformation. Lawyers are not
saviors. They are not redeemers. They can be helpful, and probably they should
know more about psychology than they do, but as a general rule, transformers
they are not. Id. at 106.
what they need and what they want.
Clients, like customers, need to be pleased. Because the rendition of legal services is
complex and, to some degree, arcane, client-customers need to be educated as to
what to expect if they are ever to be pleased.
Clients may be customers of a very special sort, but they are customers
nonetheless. Unlike superficial
customers, clients are not always right.
Sometimes, lawyers have to help clients find their true interests. Sometimes, it is the responsibility of
lawyers to help clients figure out what they really want and want to do. This part of the practice requires
perception, restraint, judgment, tact, and discernment. Steven Keeva, Transforming
Practices: Finding Joy and Satisfaction
in the Legal Life 99 (1999). On
the other hand, clients are not patients, as classically conceived. They are not helpless, diseased, disabled,
sick, or in need of therapy, simply because they have come to a lawyer. Nor are they necessarily in need of
transformation. Lawyers are not
saviors. They are not redeemers. They can be helpful, and probably they should
know more about psychology than they do, but as a general rule, transformers
they are not. Id. at 106.
If you were a client,
how would you like to perceive your lawyer?
As someone who is rendering services to me for a price? Someone who is doing something for
me (albeit for a price)? Someone who is being with me in a
time of trial? Keeva argues that lawyers
need to care for their clients. He
argues that we need to listen to them mindfully, empathetically, and with
imagination, listening for hints of what the client dare not tell us, no matter
whether it is about what he has done, what he has left undone, what has been
done to him, or who he really is. Keeva
is surely correct insofar as legal professionalism involves caring and
service. This does not mean, however,
contrary to the view of the International Alliance of Holistic Lawyers, that
lawyers must begin with mediation, as opposed to conflict, or that they must
open websites in which they announce themselves to be “attorney-healers.”
how would you like to perceive your lawyer?
As someone who is rendering services to me for a price? Someone who is doing something for
me (albeit for a price)? Someone who is being with me in a
time of trial? Keeva argues that lawyers
need to care for their clients. He
argues that we need to listen to them mindfully, empathetically, and with
imagination, listening for hints of what the client dare not tell us, no matter
whether it is about what he has done, what he has left undone, what has been
done to him, or who he really is. Keeva
is surely correct insofar as legal professionalism involves caring and
service. This does not mean, however,
contrary to the view of the International Alliance of Holistic Lawyers, that
lawyers must begin with mediation, as opposed to conflict, or that they must
open websites in which they announce themselves to be “attorney-healers.”
Keep in mind the
identity of the person (or entity) to whom (or to which) a duty of performance
is owed. It is the client and only the
client. Texas, has a strict rule of
privity. The Texas Supreme Court has
out-and-out held that lawyers involved in estate construction and
administration cannot be liable for malpractice to beneficiaries, and the like,
who are not their clients.
identity of the person (or entity) to whom (or to which) a duty of performance
is owed. It is the client and only the
client. Texas, has a strict rule of
privity. The Texas Supreme Court has
out-and-out held that lawyers involved in estate construction and
administration cannot be liable for malpractice to beneficiaries, and the like,
who are not their clients.
1. Quinn
Provocation on Estate Planning: May
not a testator or such create an attorney-client contract pursuant to which
one, some, or all beneficiaries are also made clients of the lawyer. If this is possible, might not a lawyer owe a
duty to a client to advise her of such a possibility?
Provocation on Estate Planning: May
not a testator or such create an attorney-client contract pursuant to which
one, some, or all beneficiaries are also made clients of the lawyer. If this is possible, might not a lawyer owe a
duty to a client to advise her of such a possibility?
2. Of course, the attorney-client
relationship is not completely contractual.
It also involves a status element.
relationship is not completely contractual.
It also involves a status element.
Perform
A. Legal Rules. These rules govern the Perform! aspect
of C4. That one word
commandment could be expanded to: Get
engaged and stay engaged. Or: Do your job now.
of C4. That one word
commandment could be expanded to: Get
engaged and stay engaged. Or: Do your job now.
1. Lawyers
must be competent at what they do.
Perhaps they should even be skilled.
must be competent at what they do.
Perhaps they should even be skilled.
2. 1.04(d): Contingency fee agreements
must be in writing, and there must be a method by which the contingency fee is
to be computed.
must be in writing, and there must be a method by which the contingency fee is
to be computed.
3. If a lawyer has actual or apparent authority to make promises on
behalf of a client, those promises will be enforced as against the client. Natare Corp. v. Aquatic Renovation
Systems, Inc., 987 F. Supp. 695 (S. D. Ind. 1997). The same applies to inaction by a
lawyer. It may bind a client. Rodgers v. Curators of the University of
Missouri, 135 F.3d 1216 (8th Cir. 1998); Sorensen v. Consolidated Rail
Corp., 992 F. Supp. 146 (N.D.N.Y. 1998).
In general, inactions of a lawyer are imputed to his client, at least in
civil cases. SEC v. McNulty, 137
F.3d 732 (2nd Cir. 1998).
behalf of a client, those promises will be enforced as against the client. Natare Corp. v. Aquatic Renovation
Systems, Inc., 987 F. Supp. 695 (S. D. Ind. 1997). The same applies to inaction by a
lawyer. It may bind a client. Rodgers v. Curators of the University of
Missouri, 135 F.3d 1216 (8th Cir. 1998); Sorensen v. Consolidated Rail
Corp., 992 F. Supp. 146 (N.D.N.Y. 1998).
In general, inactions of a lawyer are imputed to his client, at least in
civil cases. SEC v. McNulty, 137
F.3d 732 (2nd Cir. 1998).
4. 1.02(a)(1): Clients should make decisions concerning
“objectives and general methods of representation.”
“objectives and general methods of representation.”
5. 1.02(a)(2): Clients decide when and how to settle.
6. Lawyers are fiduciaries of their clients.
B. Performance. Completely incompetent work never constitutes
a performance. In re Boykins, 748
A.2d 413 (D.C.C. 2000) (attorney completely failed to figure out what he was
suppose to do). Ky. Bar Ass’n v.
Brown, 14 S.W.3d 916 (Ky. 2000) (attorney suspended for sixty days for
filing virtually incomprehensible appellate brief). Activities which are so poor as not to
constitute even a minimal performance, will also trigger malpractice actions,
as will be discussed below.
Nonperformance by reason of incompetence may trigger grievances as well
as malpractice cases.
a performance. In re Boykins, 748
A.2d 413 (D.C.C. 2000) (attorney completely failed to figure out what he was
suppose to do). Ky. Bar Ass’n v.
Brown, 14 S.W.3d 916 (Ky. 2000) (attorney suspended for sixty days for
filing virtually incomprehensible appellate brief). Activities which are so poor as not to
constitute even a minimal performance, will also trigger malpractice actions,
as will be discussed below.
Nonperformance by reason of incompetence may trigger grievances as well
as malpractice cases.
1. Neglect. Systematic neglect can lead to discipline, as
well as malpractice actions. Heinz v.
Admission for Lawyer Discipline, 28 S.W.3d 697 (Tex. App.–Corpus Christi
2000, aff’d). See In re
Roberts, 727 N.E.2d 705 (Ind. 2000).
In re Holland, 747 A.2d 1005 (R.I. 2000). Work which is neglected is neither performed
promptly nor performed at all. Frequently,
when lawyers are disciplined, it is said that they have neglected their clients
or their clients’ work. In re Keele,
783 So.2d 1261 (La. 2001); Kentucky Bar Ass’n v. Cartee, 39 S.W.3d 28
(Ky. 2001); Iowa Supreme Court Board of Professional Ethics and Conduct v.
Adams, 623 N.W.2d 815 (Iowa 2001); In re DeJean, 782 So.2d 566 (La.
2001); Dayton Bar Ass’n v. Long, 743 N.E.2d 880 (Ohio 2001); In re
Cozzolino, 767 A.2d 71 (R.I. 2001); In re Reichmanis, 544 S.E.2d 827
(S.C. 2001) (neglected a patent application); Office of Disciplinary Counsel
v. LaCour, 743 N.E.2d 395 (Ohio 2001); In re Quinlan, 541 S.E.2d 383
(Ga. 2001).
Some outrageous cases of lawyer poor performance go no where. In one case, a criminal lawyer failed to bring the attention of prosecutors and trial judge various data establishing that a child of 16 read at a first grade level, did not understand important propositions asserted to him and simple questions put to him and had an IQ of 63. The kid was found guilty of murder, and the court of appeals refused to take a serious look at the conduct of the case below and affirmed. A case seeking habeus corpus was filed in the federal system; the district court granted the writ; the state appealed; and the 7th Circuit affirmed in a blistering opinion. Sometimes federal courts report lawyer conduct to state bar associations. That was not done in this case, so far as the available records seem to say. Perhaps the passage of time made the report pointless. More than a decade has passed since the state trial occurred in 2002, the deceased child was caused death in 2001. See Newman v. Harrington, Warden, 726 F.3d 926 (7th Cir. 2013).
well as malpractice actions. Heinz v.
Admission for Lawyer Discipline, 28 S.W.3d 697 (Tex. App.–Corpus Christi
2000, aff’d). See In re
Roberts, 727 N.E.2d 705 (Ind. 2000).
In re Holland, 747 A.2d 1005 (R.I. 2000). Work which is neglected is neither performed
promptly nor performed at all. Frequently,
when lawyers are disciplined, it is said that they have neglected their clients
or their clients’ work. In re Keele,
783 So.2d 1261 (La. 2001); Kentucky Bar Ass’n v. Cartee, 39 S.W.3d 28
(Ky. 2001); Iowa Supreme Court Board of Professional Ethics and Conduct v.
Adams, 623 N.W.2d 815 (Iowa 2001); In re DeJean, 782 So.2d 566 (La.
2001); Dayton Bar Ass’n v. Long, 743 N.E.2d 880 (Ohio 2001); In re
Cozzolino, 767 A.2d 71 (R.I. 2001); In re Reichmanis, 544 S.E.2d 827
(S.C. 2001) (neglected a patent application); Office of Disciplinary Counsel
v. LaCour, 743 N.E.2d 395 (Ohio 2001); In re Quinlan, 541 S.E.2d 383
(Ga. 2001).
Some outrageous cases of lawyer poor performance go no where. In one case, a criminal lawyer failed to bring the attention of prosecutors and trial judge various data establishing that a child of 16 read at a first grade level, did not understand important propositions asserted to him and simple questions put to him and had an IQ of 63. The kid was found guilty of murder, and the court of appeals refused to take a serious look at the conduct of the case below and affirmed. A case seeking habeus corpus was filed in the federal system; the district court granted the writ; the state appealed; and the 7th Circuit affirmed in a blistering opinion. Sometimes federal courts report lawyer conduct to state bar associations. That was not done in this case, so far as the available records seem to say. Perhaps the passage of time made the report pointless. More than a decade has passed since the state trial occurred in 2002, the deceased child was caused death in 2001. See Newman v. Harrington, Warden, 726 F.3d 926 (7th Cir. 2013).
2. Moving. If a lawyer moves and fails to notify the
client where he can be reached, the lawyer will be subject to discipline. Kentucky Bar Ass’n v. Cartee, 39
S.W.3d 28 (Ky. 2001) [2001 WL 282663].
In one case, a lazy and incompetent lawyer failed to file motion for habeas corpus when incompetent counsel failed to pursue a capital murder correctly. Newman v. Harrington, 726 F.3d 929 (7th Cir. 2013)
client where he can be reached, the lawyer will be subject to discipline. Kentucky Bar Ass’n v. Cartee, 39
S.W.3d 28 (Ky. 2001) [2001 WL 282663].
In one case, a lazy and incompetent lawyer failed to file motion for habeas corpus when incompetent counsel failed to pursue a capital murder correctly. Newman v. Harrington, 726 F.3d 929 (7th Cir. 2013)
3. Illness. An attorney who is ill should either see to
it that his clients are taken care of or he should advise the clients to make
other arrangements. Not communicating and
not performing is unacceptable as an alternative. In re Starks, 542 S.W.2d 726 (S.C.
2001).
it that his clients are taken care of or he should advise the clients to make
other arrangements. Not communicating and
not performing is unacceptable as an alternative. In re Starks, 542 S.W.2d 726 (S.C.
2001).
4. Technical Knowledge. If L does not understand the non-legal
aspects of a project, L cannot be competent.
Is complete, in-depth understanding required?
aspects of a project, L cannot be competent.
Is complete, in-depth understanding required?
5. Lawyers are subject to discipline if
they neglect to tell their clients that their licenses have been
suspended. In re Keller, 624
N.W.2d 667 (N.D. 2001) (original problem: CLE deficiencies).
they neglect to tell their clients that their licenses have been
suspended. In re Keller, 624
N.W.2d 667 (N.D. 2001) (original problem: CLE deficiencies).
C. Making Promises: Lawyers should make promises (after thinking
about them and discussing them with the client) and then keep them. These promises should be
about them and discussing them with the client) and then keep them. These promises should be
1. Written. (Wade v. Comm’n for Lawyer Discipline,
961 S.W.2d 366 (Tex. App.–Houston [1st Dist.] 1997, no writ). This case illustrates how unwritten
contingency fees can go wrong;
controversies may develop as to the amount of the fee.)
961 S.W.2d 366 (Tex. App.–Houston [1st Dist.] 1997, no writ). This case illustrates how unwritten
contingency fees can go wrong;
controversies may develop as to the amount of the fee.)
2. Clear.
3. Limited and limiting.
4. Carefully considered.
5. Subject to rational revision.
6. Expressly revised if and as necessary.
D. Presumptive Invalidity. In many states, including Texas, contracts
formed between attorneys and clients during the existence of the client-lawyer
relationship are presumptively invalid and presumptively considered to be a
product of undue influence. Therefore,
the burden is on the attorney to demonstrate that the presumption is
false. “A contract entered into between
any attorney and client after the attorney-client relationship is established
is presumed unfair, and the attorney has the burden of showing the fairness and
reasonableness of the agreement.” Honeycutt
v. Billingsley, 992 S.W.2d 570, 582 (Tex. App.–Houston [1st Dist.] 1999,
writ denied), citing Archer v. Griffith, 390 S.W.2d 735, 739 (Tex.
1964). See also Vaughn v. King,
167 F.3d 347 (7th Cir. 1999).
formed between attorneys and clients during the existence of the client-lawyer
relationship are presumptively invalid and presumptively considered to be a
product of undue influence. Therefore,
the burden is on the attorney to demonstrate that the presumption is
false. “A contract entered into between
any attorney and client after the attorney-client relationship is established
is presumed unfair, and the attorney has the burden of showing the fairness and
reasonableness of the agreement.” Honeycutt
v. Billingsley, 992 S.W.2d 570, 582 (Tex. App.–Houston [1st Dist.] 1999,
writ denied), citing Archer v. Griffith, 390 S.W.2d 735, 739 (Tex.
1964). See also Vaughn v. King,
167 F.3d 347 (7th Cir. 1999).
E. Further Commentary on Contracts. No promise in the nature of a guarantee
should ever be made. Avoid
warranties. Sierra Fria Corp. v.
Evans, 127 F.3d 175, 182 (1st Cir. 1997).
(“[L]awyers–even high-priced lawyers–ordinarily are not guarantors of
favorable results. It is neither fair,
practical, nor legally appropriate to benchmark an attorney against a standard
of prescience. Thus, lawyers are not obliged
to relate in exquisite detail every fact or circumstance that might conceivably
have bearing on the client’s business decision or to anticipate remote
risks. By the same token, lawyers are
not expected to persist relentlessly when clients–especially clients who are
sophisticated businessmen–choose not to go forward after being suitably
informed of looming risks.”)
should ever be made. Avoid
warranties. Sierra Fria Corp. v.
Evans, 127 F.3d 175, 182 (1st Cir. 1997).
(“[L]awyers–even high-priced lawyers–ordinarily are not guarantors of
favorable results. It is neither fair,
practical, nor legally appropriate to benchmark an attorney against a standard
of prescience. Thus, lawyers are not obliged
to relate in exquisite detail every fact or circumstance that might conceivably
have bearing on the client’s business decision or to anticipate remote
risks. By the same token, lawyers are
not expected to persist relentlessly when clients–especially clients who are
sophisticated businessmen–choose not to go forward after being suitably
informed of looming risks.”)
F. More Commentary on Contingency Fee
Agreements. (Notice that the
discussion here is about the agreement and not about the fee itself. See C3 for discussion of the size
of legal fees.) Correctly conceived contingency
fee contracts are part of a lawyer’s performance.
Agreements. (Notice that the
discussion here is about the agreement and not about the fee itself. See C3 for discussion of the size
of legal fees.) Correctly conceived contingency
fee contracts are part of a lawyer’s performance.
1. Retainer Agreements. For an odd and rather fragmentary case in
which a vague retainer agreement caused problems for everyone, see Herter v.
Wolfe, 961 S.W.2d 1 (Tex. App.–Houston [1st Dist.] 1995, writ
dism’d). (The trial court held the
lawyer liable to the clients. The court
of appeals reversed and rendered over a dissent. The recitation of the facts by the Houston
Court of Appeals has the “feel” of a lawyer not doing his job. Probably, the presentation of the client’s
case against the lawyer was done much better.
This is a case the client should have won.)
which a vague retainer agreement caused problems for everyone, see Herter v.
Wolfe, 961 S.W.2d 1 (Tex. App.–Houston [1st Dist.] 1995, writ
dism’d). (The trial court held the
lawyer liable to the clients. The court
of appeals reversed and rendered over a dissent. The recitation of the facts by the Houston
Court of Appeals has the “feel” of a lawyer not doing his job. Probably, the presentation of the client’s
case against the lawyer was done much better.
This is a case the client should have won.)
2. New Contracts. Sometimes, cases evolve and new contingency
fee agreements must be written. These
must be done very carefully and all the conceivable contingencies must be
covered. Otherwise, fee disputes may end
up in court. See Mohamed v. Unum Life
Ins. Co., 129 F.3d 478, 479 (8th Cir. 1997) (“[T]his matter is before us
for the fourth time.”).
fee agreements must be written. These
must be done very carefully and all the conceivable contingencies must be
covered. Otherwise, fee disputes may end
up in court. See Mohamed v. Unum Life
Ins. Co., 129 F.3d 478, 479 (8th Cir. 1997) (“[T]his matter is before us
for the fourth time.”).
3. Delegation. Unless expressly forbidden, the
attorney-party to a contingency fee contract may delegate his responsibilities
to another lawyer. Referrals do not in
and of themselves constitute either novation or accord and satisfaction. Honeycutt v. Billingsley, 992 S.W.2d
570 (Tex. App.–Houston [1st Dist.] 1999, pet. denied).
attorney-party to a contingency fee contract may delegate his responsibilities
to another lawyer. Referrals do not in
and of themselves constitute either novation or accord and satisfaction. Honeycutt v. Billingsley, 992 S.W.2d
570 (Tex. App.–Houston [1st Dist.] 1999, pet. denied).
A
Thought Question: If the attorney
who is a party to a contingency fee contract refers the case on, and thereby
delegates his responsbilities under the contingency fee agreement, is he
vicariously liable for the performance of the referee-lawyer? Also, if the referral is negligently done, is
that legal malpractice?
Thought Question: If the attorney
who is a party to a contingency fee contract refers the case on, and thereby
delegates his responsbilities under the contingency fee agreement, is he
vicariously liable for the performance of the referee-lawyer? Also, if the referral is negligently done, is
that legal malpractice?
4. Referral Fees. A lawyer is not entitled to a referral fee
unless he or she is the lawyer of the person referred. The lawyer may represent a parent, or the
estate of a parent, without being the lawyer for the children. Trigo v. MuZoz Hockema
& Reed, 993 S.W.2d 419 (Tex. App.–Corpus Christi
1999, pet. denied). In this case,
successor lawyers settled with the Texas Guaranty Fund for low amounts. The settlement pot was split equally among
all the plaintiffs. It’s hard to see
what the complaint is here. If the
settlements had been allocated away from the one client the referring lawyer
represented, that might well have been a different story.
unless he or she is the lawyer of the person referred. The lawyer may represent a parent, or the
estate of a parent, without being the lawyer for the children. Trigo v. MuZoz Hockema
& Reed, 993 S.W.2d 419 (Tex. App.–Corpus Christi
1999, pet. denied). In this case,
successor lawyers settled with the Texas Guaranty Fund for low amounts. The settlement pot was split equally among
all the plaintiffs. It’s hard to see
what the complaint is here. If the
settlements had been allocated away from the one client the referring lawyer
represented, that might well have been a different story.
G. Questions:
1. Friendship. Can a lawyer and a client really be
friends? Is friendship really consistent
with the lawyer’s need to structure and limit the relationship? Can a lawyer really “exercise independent
professional judgment and render candid advice” to a close friend? See Rule 2.01. Charles Fried has argued that lawyering must
be understood on the model of friendship.
What he has in mind by the idea of friendship is significantly different
than most passing friendships.37
friends? Is friendship really consistent
with the lawyer’s need to structure and limit the relationship? Can a lawyer really “exercise independent
professional judgment and render candid advice” to a close friend? See Rule 2.01. Charles Fried has argued that lawyering must
be understood on the model of friendship.
What he has in mind by the idea of friendship is significantly different
than most passing friendships.37
2. Can a lawyer really be friends with an
employee of an organization which the lawyer represents? See Rule 1.12. If there are problems here, how do they fit
within lawyer work ethic?
employee of an organization which the lawyer represents? See Rule 1.12. If there are problems here, how do they fit
within lawyer work ethic?
3. Agency. How can lawyers actually be agents for
clients when clients do not have the right to control the details of the
lawyers’ work? They do not have such a
right. Trial strategy and tactics, for
example, are within the purview of the lawyers’ discretion. Sexton v. French, 163 F.3d 874, 885
(4th Cir. 1998). For Texas law on this
point, see Comment #1 to Rule 1.02.
clients when clients do not have the right to control the details of the
lawyers’ work? They do not have such a
right. Trial strategy and tactics, for
example, are within the purview of the lawyers’ discretion. Sexton v. French, 163 F.3d 874, 885
(4th Cir. 1998). For Texas law on this
point, see Comment #1 to Rule 1.02.
4. Multiple Lawyers: Sometimes, one client has independent lawyers
for different purposes, even in the same trial.
This is often a result of limitations consequent upon insurer
involvement. Thus, one lawyer may
represent a client insofar as he is a defendant, while another lawyer may
represent the client insofar as he is a third-party plaintiff. Sometimes, courts even let lawyers ask
questions. Gust v. Jones, 162
F.3d 587, 597 (10th Cir. 1998). This
situation requires real engagement and real dialogue, both with the client and
with cooperating counsel.
for different purposes, even in the same trial.
This is often a result of limitations consequent upon insurer
involvement. Thus, one lawyer may
represent a client insofar as he is a defendant, while another lawyer may
represent the client insofar as he is a third-party plaintiff. Sometimes, courts even let lawyers ask
questions. Gust v. Jones, 162
F.3d 587, 597 (10th Cir. 1998). This
situation requires real engagement and real dialogue, both with the client and
with cooperating counsel.
H. Phases of Performance. The following ten steps, if followed
religiously, though not necessarily rigidly, will enhance virtually any
performance:
religiously, though not necessarily rigidly, will enhance virtually any
performance:
1. Listen. Do this both deeply and carefully.
2. Explore With. Explore the problems with the client. Find out what the client believes
happened. Find out what the client feels
about what has happened. Find out what
the client thinks she wants. This stage requires dialogue.
happened. Find out what the client feels
about what has happened. Find out what
the client thinks she wants. This stage requires dialogue.
3. Explore About. Try to figure out in your own head what may
have happened and how to characterize it.
Also, try to figure out who the client really is. This observation applies to entity clients. They may not have souls but they do have
cultures.
have happened and how to characterize it.
Also, try to figure out who the client really is. This observation applies to entity clients. They may not have souls but they do have
cultures.
4. Explain. Talk to the client about what you think may
have happened and what you think the remedies might be.
have happened and what you think the remedies might be.
5. Plan. Think about what might be done, how long it
will take, how much it will cost, and so forth.
will take, how much it will cost, and so forth.
6. Promise. Of course, all promises should be tentative,
defeasible, and highly conditional.
Making commitments is a great motivator however.
defeasible, and highly conditional.
Making commitments is a great motivator however.
7. Execute. It is always easier to execute when you have
a plan to work from.
a plan to work from.
8. Report. Tell the client what’s going on.
9. Receive Feedback. Get the client to react. Listen!
Listen!
Listen!
10. Recycle. Repeat the process.
I. Communication. Every authority–all of them–on legal ethics
and effective lawyering emphasize the importance of communicating with clients
in a thorough and timely manner. It
should also be kept in mind that communications with clients should be both
truthful and understandable. This is no
easy task. Michael P. Maslanka, The
Top 10 Rules of Effective Client Communication, 63 Tex. Bar J. 218 (2000).
and effective lawyering emphasize the importance of communicating with clients
in a thorough and timely manner. It
should also be kept in mind that communications with clients should be both
truthful and understandable. This is no
easy task. Michael P. Maslanka, The
Top 10 Rules of Effective Client Communication, 63 Tex. Bar J. 218 (2000).
J. Estates and Trusts Work. “In the estate planning context, the lawyer
should discuss with the client the functions that a personal representative,
trustee, or other fiduciary will perform in the client’s estate plan. In addition, the lawyer should describe to
the client the role that the lawyer for a personal representative, trustee, or
other fiduciary usually plays in the administration of the fiduciary estate,
including the possibility that the lawyer may owe duties tot he beneficiaries
of the fiduciary estate. By doing so, the
lawyer better equips the client to select and give directions to
fiduciaries. The lawyer should be alert
to the multiplicity of relationships and challenging ethical issues that may
arise when the representation involves employee benefit plans, charitable
trusts or foundations.” ACTEC-50. “In the course of the estate planning process
the lawyer should assist the client in making informed judgments regarding the
method by which the client’s objectives will be fulfilled.” ACTEC-53.
In effect, this is a kind of mentorship;
it is a kind of teaching; it is
best accomplished by dialogue. It
requires listening.
should discuss with the client the functions that a personal representative,
trustee, or other fiduciary will perform in the client’s estate plan. In addition, the lawyer should describe to
the client the role that the lawyer for a personal representative, trustee, or
other fiduciary usually plays in the administration of the fiduciary estate,
including the possibility that the lawyer may owe duties tot he beneficiaries
of the fiduciary estate. By doing so, the
lawyer better equips the client to select and give directions to
fiduciaries. The lawyer should be alert
to the multiplicity of relationships and challenging ethical issues that may
arise when the representation involves employee benefit plans, charitable
trusts or foundations.” ACTEC-50. “In the course of the estate planning process
the lawyer should assist the client in making informed judgments regarding the
method by which the client’s objectives will be fulfilled.” ACTEC-53.
In effect, this is a kind of mentorship;
it is a kind of teaching; it is
best accomplished by dialogue. It
requires listening.
K. Termination. Terminating a client-lawyer relationship is
not something outside the attorney-client relationship. It is within the attorney-client
relationship. Consequently, lawyers must
observe the Rules of Professional Conduct when terminating relationships, and
they must be mindful of the fact that the timing and method of termination may
trigger malpractice exposure. Sanders, Bruin, Coll & Worley v. McKay Oil Corp., 943 P.2d 104 (N.M.
1997). Cortinez v. Supreme Court Committee on Professional
Conduct, 966 S.W.2d 251 (Ark. 1998).
not something outside the attorney-client relationship. It is within the attorney-client
relationship. Consequently, lawyers must
observe the Rules of Professional Conduct when terminating relationships, and
they must be mindful of the fact that the timing and method of termination may
trigger malpractice exposure. Sanders, Bruin, Coll & Worley v. McKay Oil Corp., 943 P.2d 104 (N.M.
1997). Cortinez v. Supreme Court Committee on Professional
Conduct, 966 S.W.2d 251 (Ark. 1998).
L. Letters. Frequently, lawyers prepare engagement
letters, retainer agreements, fee agreements, fee modification memos,
terminations, declinations to represent, and so forth.38 Often, with repeat clients, it is not
possible to have signed engagement agreements for every matter. Probably, there should be a letter accepting
and structuring every matter running from the lawyer to the client. This norm, however, is frequently
violated. Realistically, with long-time
clients, it is probably not possible to conform to the norm, as salutary as it
sounds.
letters, retainer agreements, fee agreements, fee modification memos,
terminations, declinations to represent, and so forth.38 Often, with repeat clients, it is not
possible to have signed engagement agreements for every matter. Probably, there should be a letter accepting
and structuring every matter running from the lawyer to the client. This norm, however, is frequently
violated. Realistically, with long-time
clients, it is probably not possible to conform to the norm, as salutary as it
sounds.
M. Estate Work. Remember:
There are other things which need to be discussed with individual client
as family context.
There are other things which need to be discussed with individual client
as family context.
N. Disabled Clients. Suppose a lawyer is hired to do one thing but
the lawyer comes to believe that the client is losing it. What may the lawyer do? What should the lawyer do? What must the lawyer do? “The lawyer may take reasonable steps to
protect the interests of a client the lawyer reasonably believes to be
disabled, including the initiation of protective proceedings. Doing so does not constitute an impermissible
conflict of interest between the lawyer and the client. However, a lawyer who is retained on behalf
of the client to resist the institution of a guardianship or conservatorship
may not take positions that are contrary to the client’s position or make
disclosures contrary to the provisions” requiring that a client’s confidences
be kept. ACTEC-57.
the lawyer comes to believe that the client is losing it. What may the lawyer do? What should the lawyer do? What must the lawyer do? “The lawyer may take reasonable steps to
protect the interests of a client the lawyer reasonably believes to be
disabled, including the initiation of protective proceedings. Doing so does not constitute an impermissible
conflict of interest between the lawyer and the client. However, a lawyer who is retained on behalf
of the client to resist the institution of a guardianship or conservatorship
may not take positions that are contrary to the client’s position or make
disclosures contrary to the provisions” requiring that a client’s confidences
be kept. ACTEC-57.
Promptly
The second word in
the commandment Perform Promptly! emphasizes that things need to be done
in a timely manner; that punctuality is important; that time is often of the
essence; that clients often want things done quickly. The clients need to know that attention is
being paid to them right now, and so forth. The rule encompasses punctuality, promptness,
and a prohibition of procrastination. It
could read, Act With Dispatch!
the commandment Perform Promptly! emphasizes that things need to be done
in a timely manner; that punctuality is important; that time is often of the
essence; that clients often want things done quickly. The clients need to know that attention is
being paid to them right now, and so forth. The rule encompasses punctuality, promptness,
and a prohibition of procrastination. It
could read, Act With Dispatch!
A. Legal Rules: Remember, we are commenting on the two-word
rule Perform promptly. We have
commented on the first part of the rule, the requirement that one “Perform!” Now we are commenting on the second aspect of
the rule, that performance must be done “Promptly!”
rule Perform promptly. We have
commented on the first part of the rule, the requirement that one “Perform!” Now we are commenting on the second aspect of
the rule, that performance must be done “Promptly!”
1.01: Lawyers shall not neglect legal matters
entrusted to them and they shall carry out their obligations to their clients
in a timely manner. There are two meanings of the term “neglect.” One of them is that the “neglecter” does nothing or nothing timely. The other one is that the person guilty of neglect does something but does it poorly, e.g., because of inattention.
entrusted to them and they shall carry out their obligations to their clients
in a timely manner. There are two meanings of the term “neglect.” One of them is that the “neglecter” does nothing or nothing timely. The other one is that the person guilty of neglect does something but does it poorly, e.g., because of inattention.
1. Focus
on limitations periods.
on limitations periods.
2. The bar requires that dues be paid on time. Nonpayment of dues leads to being kicked out
of the Bar. Legal work thereafter
constitutes the unauthorized practice of law.
of the Bar. Legal work thereafter
constitutes the unauthorized practice of law.
3. The courts require that requests for admissions be answered on
time.
time.
4. The courts require that lawyers show up on time.
5. Rules of civil procedure authorize default judgments if answers are
not timely filed, and the rules governing punctuality go on and on and on.
not timely filed, and the rules governing punctuality go on and on and on.
6. The Bar requires that CLE requirement be met timely.
B. Commentary
1. In
Brown v. The State Bar of Texas, 960 S.W.2d 671 (Tex. App.–El Paso
1997, no writ), the trial court ordered a public reprimand of an attorney who
had, in two separate divorce cases, permitted months to elapse between the
court decreeing a divorce and the entry of a final judgment. She prevailed upon appeal. In one case she was waiting for the Statement
of Facts, and while in another she sent a draft of the decree to the court, but
the judge became sick and died. The El
Paso Court of Appeals reversed the judgment of the trial court. What could the lawyer have done to move
things along more quickly and to have obtained the judgments punctually?
Brown v. The State Bar of Texas, 960 S.W.2d 671 (Tex. App.–El Paso
1997, no writ), the trial court ordered a public reprimand of an attorney who
had, in two separate divorce cases, permitted months to elapse between the
court decreeing a divorce and the entry of a final judgment. She prevailed upon appeal. In one case she was waiting for the Statement
of Facts, and while in another she sent a draft of the decree to the court, but
the judge became sick and died. The El
Paso Court of Appeals reversed the judgment of the trial court. What could the lawyer have done to move
things along more quickly and to have obtained the judgments punctually?
2. Punctually may seem like a small thing,
but it is not:
but it is not:
a. Showing up late makes people
angry. The more it happens, the more the
anger seethes.
angry. The more it happens, the more the
anger seethes.
b. Consistently showing up late is
self-destructive.
self-destructive.
3. Neglecting
Trial. A lawyer failed to show up
for trial. The judge assessed a monetary
sanction and required the lawyer to get an answering service, partly so that he
could be reached, and partly because he never returned his telephone calls–not
even to the court. The court of appeals
affirmed the sanctionability of such conduct, but asked the district judge to
give further explanation for the sanctions he imposed. That explanation is to be found at Specialized
Plating, Inc. v. Federal Environmental Services, Inc., 975 F. Supp. 397 (D.
Mass. 1997). This is a fascinating, odd,
instructive, and repugnant opinion–all at once.
4. Neglecting Appeals. When a lawyer neglects a criminal appeal, he
may suffer a serious sanction. In re
Howard, 721 N.E.2d 1126 (Ill. 1999) (There were other problems as well, but
the suspension was for two years.) Court
sanctions may also be appropriate where a lawyer neglects an appeal. In re Flannery, 186 F.3d 143 (2nd Cir.
1999). Consistent failure to comply with
court deadlines and procedural requirements not only violates both directives
of this rule, but also may warrant suspension.
See In the Matter of McCord, 722 N.E.2d 820 (Ind. 2000) (attorney
suspended from practice due to “consistent and pervasive” inability to comply
with the circuit procedural rules and deadlines). The court noted that this behavior, in
addition to violating the Indiana disciplinary rule pertaining to diligence and
promptness in representation, also violated the rule mandating that an attorney
provide competent representation to a client.
Id. at 823.
may suffer a serious sanction. In re
Howard, 721 N.E.2d 1126 (Ill. 1999) (There were other problems as well, but
the suspension was for two years.) Court
sanctions may also be appropriate where a lawyer neglects an appeal. In re Flannery, 186 F.3d 143 (2nd Cir.
1999). Consistent failure to comply with
court deadlines and procedural requirements not only violates both directives
of this rule, but also may warrant suspension.
See In the Matter of McCord, 722 N.E.2d 820 (Ind. 2000) (attorney
suspended from practice due to “consistent and pervasive” inability to comply
with the circuit procedural rules and deadlines). The court noted that this behavior, in
addition to violating the Indiana disciplinary rule pertaining to diligence and
promptness in representation, also violated the rule mandating that an attorney
provide competent representation to a client.
Id. at 823.
5. Neglecting Transactional Work. Even where there are no court-imposed
deadlines, attorneys may run into trouble for failing to diligently
perform. See Gilliam v. Ky. Bar Ass’n,
8 S.W.3d 571(Ky. 2000) (attorney publicly repermanded for failure to prepare
and file patent application).
deadlines, attorneys may run into trouble for failing to diligently
perform. See Gilliam v. Ky. Bar Ass’n,
8 S.W.3d 571(Ky. 2000) (attorney publicly repermanded for failure to prepare
and file patent application).
6. Neglecting Clients’ Business In
General. If a lawyer neglects a
client’s matters but does not cause injury, the lawyer has not committed the
tort of malpractice. On the other hand,
if a lawyer neglects a client’s matters, then–no matter what–the lawyer may
be subject to discipline. This is
particularly true when there is a pattern of neglect.39 Knowing and intentional neglect is much worse
than simply fouling up.40 As usual, the worst of all
situations arises when a client takes money and then fails or refuses to do
anything on behalf of the client. Columbus
Bar Association v. Wolfrom, 741 N.E.2d 510 (Ohio 2001). Obviously, if something bad happens in a
case, a lawyer must promptly notify the client.
Office of Disciplinary Counsel v. LaCour, 743 N.E.2d 395 (Ohio
2001) (case dismissed and lawyer failed to notify client).
General. If a lawyer neglects a
client’s matters but does not cause injury, the lawyer has not committed the
tort of malpractice. On the other hand,
if a lawyer neglects a client’s matters, then–no matter what–the lawyer may
be subject to discipline. This is
particularly true when there is a pattern of neglect.39 Knowing and intentional neglect is much worse
than simply fouling up.40 As usual, the worst of all
situations arises when a client takes money and then fails or refuses to do
anything on behalf of the client. Columbus
Bar Association v. Wolfrom, 741 N.E.2d 510 (Ohio 2001). Obviously, if something bad happens in a
case, a lawyer must promptly notify the client.
Office of Disciplinary Counsel v. LaCour, 743 N.E.2d 395 (Ohio
2001) (case dismissed and lawyer failed to notify client).
7. Unearned Fees. Unearned fees must be returned promptly. So-called cash flow problems do not justify
failing to return a fee, and they do not justify failing to discuss the matter
with the client. Id.
failing to return a fee, and they do not justify failing to discuss the matter
with the client. Id.
8. Slow Return of Funds. If a lawyer returns funds slowly, or sends
them on slowly this may lead to discipline.
In re McCann, 752 So.2d 155 (La. 2000). A line between being slow and simply stealing
is probably not a bright one.
them on slowly this may lead to discipline.
In re McCann, 752 So.2d 155 (La. 2000). A line between being slow and simply stealing
is probably not a bright one.
9. Bar Dues. In Satterwhite v. State, 979 S.W.2d
626 (Tex. 1999), the Texas Court of Criminal Appeals upheld an attorney’s
criminal conviction for falsely holding himself out as an attorney while he had
been suspended for failure to pay bar dues.
The judge sentenced the defendant to four and a half (!!) years in
prison. Although Satterwhite seems to be an unusually harsh decision, it
certainly reveals the importance of paying one’s bar dues on time. For a similar (though not as egregious)
result, see In re Quinn, 605 N.W.2d 396 (Minn. 2000) (attorney–not one
of the authors–publicly reprimanded and sentenced to two years probation by
state bar for practicing after being suspended for failure to pay dues and meet
CLE requirements), and In re Schrader, 523 S.E.2d 327 (Ga. 1999)
(Georgia has imposed one-year suspension for attorney who practiced in New York
without being licensed in that state). In
re Goodman, 19 S.W.3d 111 (Ky. 2000) ($500 fine and a published opinion that the poor devil’s
name on it). In re Halverson, 618
N.W.2d 191 (Wis. 2000) (public reprimand).
626 (Tex. 1999), the Texas Court of Criminal Appeals upheld an attorney’s
criminal conviction for falsely holding himself out as an attorney while he had
been suspended for failure to pay bar dues.
The judge sentenced the defendant to four and a half (!!) years in
prison. Although Satterwhite seems to be an unusually harsh decision, it
certainly reveals the importance of paying one’s bar dues on time. For a similar (though not as egregious)
result, see In re Quinn, 605 N.W.2d 396 (Minn. 2000) (attorney–not one
of the authors–publicly reprimanded and sentenced to two years probation by
state bar for practicing after being suspended for failure to pay dues and meet
CLE requirements), and In re Schrader, 523 S.E.2d 327 (Ga. 1999)
(Georgia has imposed one-year suspension for attorney who practiced in New York
without being licensed in that state). In
re Goodman, 19 S.W.3d 111 (Ky. 2000) ($500 fine and a published opinion that the poor devil’s
name on it). In re Halverson, 618
N.W.2d 191 (Wis. 2000) (public reprimand).
Lots and lots of Texas lawyers fall prey to
the virtually automatic elimination from the roles of the bar if a lawyer fails
to pay his or her dues after a reminder.
Firms can sometimes screw this up, but the lawyer is the one who is held
responsible. Question: Any chance a lawyer would have a law suit
against his law firm if the law firm’s responsibility is to pay the dues and it
failed to do so and the lawyer got into trouble?
the virtually automatic elimination from the roles of the bar if a lawyer fails
to pay his or her dues after a reminder.
Firms can sometimes screw this up, but the lawyer is the one who is held
responsible. Question: Any chance a lawyer would have a law suit
against his law firm if the law firm’s responsibility is to pay the dues and it
failed to do so and the lawyer got into trouble?
10. Woody’s Rule. The following rule is a specification upon a
much broader principle proposed by the great philosopher Woody Allen: 90% of all successful law practice
consists in showing up. See In re
Shull, 741 N.E.2d 723 (Ind. 2001).
much broader principle proposed by the great philosopher Woody Allen: 90% of all successful law practice
consists in showing up. See In re
Shull, 741 N.E.2d 723 (Ind. 2001).
11. Deliberate
Delay, “Hidding Behind the Log,” and “Benign Neglect.” Not every delay and not every omission to act
constitutes neglect. Sometimes, it is
better to defer taking depositions than to take them. Sometimes, it is better to wait than to
proceed. After all, memory fades, time
distorts; the will tires; attention wanders; and so forth. Alas, there are no litmus tests for
distinguishing sound tactics from sloth.
Delay, “Hidding Behind the Log,” and “Benign Neglect.” Not every delay and not every omission to act
constitutes neglect. Sometimes, it is
better to defer taking depositions than to take them. Sometimes, it is better to wait than to
proceed. After all, memory fades, time
distorts; the will tires; attention wanders; and so forth. Alas, there are no litmus tests for
distinguishing sound tactics from sloth.
DISQUISITION UPON THE EXPOSURE OF LAWYERS
TO CIVIL REMEDIES FOR FAILING TO PERFORM OR PERFORM PROMPTLY
TO CIVIL REMEDIES FOR FAILING TO PERFORM OR PERFORM PROMPTLY
Malpractice and
Ethics Rules. This outline is not
about malpractice. That is a subject for
a different paper. Nevertheless, the
legal rules governing lawyers–legal ethics–are related to malpractice. See Note, The Evidentiary Use of the
Ethical Codes in Legal Malpractice:
Erasing a Double Standard, 109 Harv.
L. Rev. 1102 (March 1996). The
ethics codes state that they are not designed for malpractice situations. There is an aura of unreality about
this. Courts sometimes forbid expert
witnesses in malpractice cases from referring to the ethical rules, but this is
almost never a problem. The expert
witnesses simply testify that some norm or other is customary, when it is also
an ethical rule. According to this note
writer, squeamishness does not make much sense:
Ethics Rules. This outline is not
about malpractice. That is a subject for
a different paper. Nevertheless, the
legal rules governing lawyers–legal ethics–are related to malpractice. See Note, The Evidentiary Use of the
Ethical Codes in Legal Malpractice:
Erasing a Double Standard, 109 Harv.
L. Rev. 1102 (March 1996). The
ethics codes state that they are not designed for malpractice situations. There is an aura of unreality about
this. Courts sometimes forbid expert
witnesses in malpractice cases from referring to the ethical rules, but this is
almost never a problem. The expert
witnesses simply testify that some norm or other is customary, when it is also
an ethical rule. According to this note
writer, squeamishness does not make much sense:
By creating the Model [and other] Rules of Professional Conduct and
the Model Code of Professional Responsibility, [as well as other codes], legal
professions’ governing bodies have provided comprehensible, accessible, and
enforceable rules of conduct for the nations’ exploding population of
lawyers. The fact that these rules were
designed specifically for application to the disciplinary context does not
overcome the logic, feasibility, or functional value of extending their application–at
least in part–to the malpractice context.
Unless they articulate more compelling reasons than those reflected in
present judicial thought, courts should drop any conviction that a blanket
prohibition on using ethics codes in the malpractice context is necessary as a
matter of law or wise as a matter of policy.
At the very least, the provisions of a jurisdiction’s ethics code that
relate to the facts of a malpractice suit should be admissible in helping to
establish the proper standard of care. Id.
at 1119.
the Model Code of Professional Responsibility, [as well as other codes], legal
professions’ governing bodies have provided comprehensible, accessible, and
enforceable rules of conduct for the nations’ exploding population of
lawyers. The fact that these rules were
designed specifically for application to the disciplinary context does not
overcome the logic, feasibility, or functional value of extending their application–at
least in part–to the malpractice context.
Unless they articulate more compelling reasons than those reflected in
present judicial thought, courts should drop any conviction that a blanket
prohibition on using ethics codes in the malpractice context is necessary as a
matter of law or wise as a matter of policy.
At the very least, the provisions of a jurisdiction’s ethics code that
relate to the facts of a malpractice suit should be admissible in helping to
establish the proper standard of care. Id.
at 1119.
Ethics rules are
quite frequently applicable to malpractice situations.41 For example, representing many parties at the
same time and in the same litigation can lead to client dissatisfaction and
hence to malpractice actions. Vinson & Elkins v. Moran, 946 S.W.2d
381 (Tex. App.–Houston [14th Dist.] 1997, no writ [dism’d agr.]). Also, breaches of ethical rules are not per
se malpractice. There is an intimate
connection, however. Under many
circumstances, breaches of those rules evidence negligence. Moreover, in malpractice suits, expert
witnesses will testify that lawyers have been negligent, and they will refer to
rules or principles which are the equivalent of the disciplinary rules, even if
they do not tell the jury that they are referring to that body of law. In some states, violations of disciplinary
rules constitute prima facie evidence of malpractice. Sears, Roebuck & Co. v. Goldstone and Sudalter, P.C., 128 F.3d 10, 19 (1st Cir. 1997). It is becoming easier and easier to do this,
since most of the ethics rules have been incorporated into the Restatement of the Law Governing Lawyers
(Third) (1998). The new Restatement (Third) was finally formally
approved once-and-for-all by the American Law Institute in 1998 although the
document did not come out in hardcover until 2000. The new Restatement
(Third) is a crucial document, and it should be in every lawyer’s
library.
quite frequently applicable to malpractice situations.41 For example, representing many parties at the
same time and in the same litigation can lead to client dissatisfaction and
hence to malpractice actions. Vinson & Elkins v. Moran, 946 S.W.2d
381 (Tex. App.–Houston [14th Dist.] 1997, no writ [dism’d agr.]). Also, breaches of ethical rules are not per
se malpractice. There is an intimate
connection, however. Under many
circumstances, breaches of those rules evidence negligence. Moreover, in malpractice suits, expert
witnesses will testify that lawyers have been negligent, and they will refer to
rules or principles which are the equivalent of the disciplinary rules, even if
they do not tell the jury that they are referring to that body of law. In some states, violations of disciplinary
rules constitute prima facie evidence of malpractice. Sears, Roebuck & Co. v. Goldstone and Sudalter, P.C., 128 F.3d 10, 19 (1st Cir. 1997). It is becoming easier and easier to do this,
since most of the ethics rules have been incorporated into the Restatement of the Law Governing Lawyers
(Third) (1998). The new Restatement (Third) was finally formally
approved once-and-for-all by the American Law Institute in 1998 although the
document did not come out in hardcover until 2000. The new Restatement
(Third) is a crucial document, and it should be in every lawyer’s
library.
Tort Not
Contract. Under Texas law, legal
malpractice is a tort, and the common law remedy for malpractice lies in tort,
and not in contract. Barcelo v. Elliott,
923 S.W.2d 575, 579 (Tex. 1996). This is
very odd in view of the fact that the foundation of the attorney-client
relationship is contractual. Melon
Service Co. v. Touche Ross and Co., 17 S.W.3d 432 (Tex. App.–Houston
[1st Dist.] 2000, __________) (“The attorney-client relationship is a
contractual relationship whereby an attorney agrees to render professional
services for a client. The relationship
may be expressly created by contract, or it may be implied from the actions of
the parties. Id. at 437.) Honeycutt v. Billingsley, 992 S.W.2d
570 (Tex. App.–Houston [1st Dist.] 1999, writ denied) (considering novation as
well as accord and satisfaction in the context of a contingency fee
agreement). This situation, it seems to
us, is a very odd one. Moreover, there
is some tension among Texas courts about the role of contract in attorney
malpractice litigation. See Roberts
v. Healey, 991 S.W.2d 873 (Tex. App.–Houston [14th Dist.] 1999, writ
denied) (summary judgment not complete because it failed to deal with a breach
of contract and breach of warranty allegations).
Contract. Under Texas law, legal
malpractice is a tort, and the common law remedy for malpractice lies in tort,
and not in contract. Barcelo v. Elliott,
923 S.W.2d 575, 579 (Tex. 1996). This is
very odd in view of the fact that the foundation of the attorney-client
relationship is contractual. Melon
Service Co. v. Touche Ross and Co., 17 S.W.3d 432 (Tex. App.–Houston
[1st Dist.] 2000, __________) (“The attorney-client relationship is a
contractual relationship whereby an attorney agrees to render professional
services for a client. The relationship
may be expressly created by contract, or it may be implied from the actions of
the parties. Id. at 437.) Honeycutt v. Billingsley, 992 S.W.2d
570 (Tex. App.–Houston [1st Dist.] 1999, writ denied) (considering novation as
well as accord and satisfaction in the context of a contingency fee
agreement). This situation, it seems to
us, is a very odd one. Moreover, there
is some tension among Texas courts about the role of contract in attorney
malpractice litigation. See Roberts
v. Healey, 991 S.W.2d 873 (Tex. App.–Houston [14th Dist.] 1999, writ
denied) (summary judgment not complete because it failed to deal with a breach
of contract and breach of warranty allegations).
Our conjecture as
to why legal malpractice is a tort involves several reasons. The contract simply sets up a
relationship. Legal malpractice is an
offense against the relationship, not against the contract. Contract law tends towards the precise,
whereas tort law tends to be more flexible and amorphous. Moreover, almost all contractual obligations
can be waived. The courts feel as though
they have much more flexibility in regulating favor when it comes to
torts. In addition, of course, mental
anguish damages are recoverable in tort, and not usually in contract, as are
punitive damages. Still, the theoretical
point at the foundation of all of this is the idea that legal malpractice is a
violation of a relationship, and not simply an agreement. Human relationships always have fuzzy edges,
and one of the driving forces in contract law is to make arrangements precise. Thus, lawyers are frequently advised to
formulate retainer agreements stating precisely what the scope of the
representation is. This is a good
idea. On the other hand, it is
inevitable that legal malpractice may arise outside the precise scope of a
specified relationship. Thus, in Moore
v. Yarbrough, Jameson & Gray, 993 S.W.2d 760 (Tex. App.–Amarillo 1999,
no pet.h.) a woman sued her husband for
divorce and physical abuse. Two separate
lawyers were utilized. The divorce
judgment came first. The husband set up res
judicata in the personal injury case.
He succeeded. The woman sued her
divorce lawyer for failing to advise her as to the significance of the divorce
in the judgment case. The lawyer
defended on the grounds that he was not prosecuting the personal injury case
and that that was outside the scope of his representation. The court rejected this gambit and said that
both lawyers–the divorce lawyer and the personal injury lawyer–should have
advised the woman about consequences of prosecuting the cases separately.
to why legal malpractice is a tort involves several reasons. The contract simply sets up a
relationship. Legal malpractice is an
offense against the relationship, not against the contract. Contract law tends towards the precise,
whereas tort law tends to be more flexible and amorphous. Moreover, almost all contractual obligations
can be waived. The courts feel as though
they have much more flexibility in regulating favor when it comes to
torts. In addition, of course, mental
anguish damages are recoverable in tort, and not usually in contract, as are
punitive damages. Still, the theoretical
point at the foundation of all of this is the idea that legal malpractice is a
violation of a relationship, and not simply an agreement. Human relationships always have fuzzy edges,
and one of the driving forces in contract law is to make arrangements precise. Thus, lawyers are frequently advised to
formulate retainer agreements stating precisely what the scope of the
representation is. This is a good
idea. On the other hand, it is
inevitable that legal malpractice may arise outside the precise scope of a
specified relationship. Thus, in Moore
v. Yarbrough, Jameson & Gray, 993 S.W.2d 760 (Tex. App.–Amarillo 1999,
no pet.h.) a woman sued her husband for
divorce and physical abuse. Two separate
lawyers were utilized. The divorce
judgment came first. The husband set up res
judicata in the personal injury case.
He succeeded. The woman sued her
divorce lawyer for failing to advise her as to the significance of the divorce
in the judgment case. The lawyer
defended on the grounds that he was not prosecuting the personal injury case
and that that was outside the scope of his representation. The court rejected this gambit and said that
both lawyers–the divorce lawyer and the personal injury lawyer–should have
advised the woman about consequences of prosecuting the cases separately.
If legal malpractice actions are tort actions, not
contract actions, then, presumably, a disappointed client, turned plaintiff,
has no action for legal malpractice based upon breach of an express warranty to
obtain specific results. Holy Loch
Distributors, Inc. v. Hitchcock, 531 S.E.2d 282 (S.C. 2000). Why then are lawyers so consistently told not
to promise specific results? Is it
because there may still be a contract in the nature of a guaranty? Isn’t that what warranty is? Is it because the promise might be a
statement of fact and therefore become a fraud case? Is it because the line between tort and
contract blurs when it comes to express warranties?
contract actions, then, presumably, a disappointed client, turned plaintiff,
has no action for legal malpractice based upon breach of an express warranty to
obtain specific results. Holy Loch
Distributors, Inc. v. Hitchcock, 531 S.E.2d 282 (S.C. 2000). Why then are lawyers so consistently told not
to promise specific results? Is it
because there may still be a contract in the nature of a guaranty? Isn’t that what warranty is? Is it because the promise might be a
statement of fact and therefore become a fraud case? Is it because the line between tort and
contract blurs when it comes to express warranties?
Attorney
Malpractice and the Attorney-Client Relationship. In general, an action for attorney
malpractice requires proof of the existence of an attorney-client
relationship. These relationships may be
created either expressly or impliedly through conduct. This is true in virtually all states. Sain v. Nagel, 997 F. Supp. 1002
(N.D. Ill. 1998) (conduct may have impliedly created an attorney-client
relationship). See Witzman v.
Gross, 148 F.3d 988, 990 (8th Cir. 1998) (the beneficiary of a trust had no
attorney-client relationship with the firm representing the trust and so had no
cause of action against the lawyer under Minnesota law.)
Malpractice and the Attorney-Client Relationship. In general, an action for attorney
malpractice requires proof of the existence of an attorney-client
relationship. These relationships may be
created either expressly or impliedly through conduct. This is true in virtually all states. Sain v. Nagel, 997 F. Supp. 1002
(N.D. Ill. 1998) (conduct may have impliedly created an attorney-client
relationship). See Witzman v.
Gross, 148 F.3d 988, 990 (8th Cir. 1998) (the beneficiary of a trust had no
attorney-client relationship with the firm representing the trust and so had no
cause of action against the lawyer under Minnesota law.)
In Texas, as in
many other–but not all–jurisdictions, only a client may bring an action for malpractice. Barcelo v. Elliott,
923 S.W.2d 575 (Tex. 1996).42 This situation seems to
come up in probate matters more than any other situation. Disappointed decedents would like to sue the
testator’s lawyer. They cannot. However, a beneficiary who is also an
executor can do so. Guest v. Cochran,
993 S.W.2d 397 (Tex. App.–Houston [14th Dist.] 1999, no pet.). It is worth remembering that not all services
an attorney may render imply the existence of an attorney-client
relationship. For example, merely
putting money in an attorney’s escrow fund does not create such a
relationship. Arons v. Lalime,
3 F. Supp.2d 314 (W.D.N.Y. 1997); Lucas v. Lalime, 998 F. Supp. 263
(W.D.N.Y. 1998). The lawyer would still
be a fiduciary, however. Incidental
remarks by a lawyer in the presence of a non-client do not necessarily imply
the creation of an attorney-client relationship, even if those remarks contain
directives. Parker v. Carnahan,
772 S.W.2d 151 (Tex. App.–Texarkana 1989, writ denied) (L does
something for C, and his activities also benefit a third party–no
attorney-client relationship.) Of
course, the mere filing of a class action does not establish an attorney-client
relationship between the filing attorney and the unnamed plaintiffs. Hence, an attorney following such an action
has no pre-certification duty to members of the pleaded class. Gillespie v. Sheer, 987 S.W.2d 129
(Tex. App.–Houston [14th Dist.] 1998, pet. denied). But see In re General Motors Corp. Pick-Up
Truck Fuel Tank, 55 F.3d 768, 801 (3rd Cir. 1995), cert denied 516
U.S. 824 (1995) (finding some fiduciary duties between filing attorneys and
members of the as-yet-uncertified class).
many other–but not all–jurisdictions, only a client may bring an action for malpractice. Barcelo v. Elliott,
923 S.W.2d 575 (Tex. 1996).42 This situation seems to
come up in probate matters more than any other situation. Disappointed decedents would like to sue the
testator’s lawyer. They cannot. However, a beneficiary who is also an
executor can do so. Guest v. Cochran,
993 S.W.2d 397 (Tex. App.–Houston [14th Dist.] 1999, no pet.). It is worth remembering that not all services
an attorney may render imply the existence of an attorney-client
relationship. For example, merely
putting money in an attorney’s escrow fund does not create such a
relationship. Arons v. Lalime,
3 F. Supp.2d 314 (W.D.N.Y. 1997); Lucas v. Lalime, 998 F. Supp. 263
(W.D.N.Y. 1998). The lawyer would still
be a fiduciary, however. Incidental
remarks by a lawyer in the presence of a non-client do not necessarily imply
the creation of an attorney-client relationship, even if those remarks contain
directives. Parker v. Carnahan,
772 S.W.2d 151 (Tex. App.–Texarkana 1989, writ denied) (L does
something for C, and his activities also benefit a third party–no
attorney-client relationship.) Of
course, the mere filing of a class action does not establish an attorney-client
relationship between the filing attorney and the unnamed plaintiffs. Hence, an attorney following such an action
has no pre-certification duty to members of the pleaded class. Gillespie v. Sheer, 987 S.W.2d 129
(Tex. App.–Houston [14th Dist.] 1998, pet. denied). But see In re General Motors Corp. Pick-Up
Truck Fuel Tank, 55 F.3d 768, 801 (3rd Cir. 1995), cert denied 516
U.S. 824 (1995) (finding some fiduciary duties between filing attorneys and
members of the as-yet-uncertified class).
Unlike malpractice,
lawyer grievances do not require the presence of an attorney-client
relationship. If an attorney converts an
investor’s funds to his own use, he may very well be sanctioned through the
grievance process. The reason is that
trust is of the essence to the attorney-client relationship and to the
efficient functioning of the legal system.
In re Manns, 685 N.E.2d 1071 (Ind. 1997).
(This case involved speculating in the international platinum
market. Any time a client is approached
by a lawyer to get involved in metals trading, the client should get a new
lawyer.)
lawyer grievances do not require the presence of an attorney-client
relationship. If an attorney converts an
investor’s funds to his own use, he may very well be sanctioned through the
grievance process. The reason is that
trust is of the essence to the attorney-client relationship and to the
efficient functioning of the legal system.
In re Manns, 685 N.E.2d 1071 (Ind. 1997).
(This case involved speculating in the international platinum
market. Any time a client is approached
by a lawyer to get involved in metals trading, the client should get a new
lawyer.)
Of course, many
states say that lawyers are sometimes liable for non-client for
malpractice. Texas rejects this
view. However, consider the following
interesting situation. Suppose L
drafts a prenuptial agreement for W-to-be knows that H-to-be is
not represented by counsel when–in fact– is rather stupid and hopelessly in
love. See Bonds v. Bonds, 83
Cal.Rptr.2d 783 (Cal. App. 1999). In
Texas, prenuptial agreements require that the party giving up rights be advised
by counsel. Will L see to it that
H-to-be is advised by counsel? Thought
Question: To whom does he owe this
duty? Imagine L being liable to
his client failing to advise a non-client to get no advice.
states say that lawyers are sometimes liable for non-client for
malpractice. Texas rejects this
view. However, consider the following
interesting situation. Suppose L
drafts a prenuptial agreement for W-to-be knows that H-to-be is
not represented by counsel when–in fact– is rather stupid and hopelessly in
love. See Bonds v. Bonds, 83
Cal.Rptr.2d 783 (Cal. App. 1999). In
Texas, prenuptial agreements require that the party giving up rights be advised
by counsel. Will L see to it that
H-to-be is advised by counsel? Thought
Question: To whom does he owe this
duty? Imagine L being liable to
his client failing to advise a non-client to get no advice.
Error In
Judgment/Honest Belief Rule. Under
Texas law, at one time a lawyer was virtually immune from malpractice if he
acted prudently on the basis of honest beliefs about the law even if his
acquisition or testing of those beliefs was negligent. That is no longer the case. Now the lawyer is held to a standard of
negligence in all contexts, even in the context of predicting the course of the
law. Cosgrove v. Grimes, 774
S.W.2d 662, 664 -65 (Tex. 1989). Some
other states are more equivocal on this issue.
“When the law is clouded because it stands unconcretized by precedential
pronouncements, a lawyer who acts in good faith and in an honest belief that
his advice and acts are well-founded will not be held responsible for failing
to anticipate how the law’s ambiguity will ultimately be resolved.” Manley v.
Brown, 989 P.2d 448, 458-59 (Okla.
1999). “In a negligence case for rendition of substandard legal
services, the primary issue is whether a lawyer’s conduct of litigation-related
defense fell below the acceptable professional standards. A lawyer who acts in good faith and honest
belief that his advice and acts are well-founded and in the best interest of
his client is not answerable for a mere error of judgment when dealing with a
point of law which has not been settled by a precedent-setting pronouncement
and about which reasonable doubt may be entertained by well-informed
lawyers. When the state law is doubtful
or debatable, a lawyer will not be held responsible for failing to anticipate
how the uncertainty will ultimately be resolved.” Id. at 452.
Question for thought: Is this an
honest belief standard or a negligence standard?
Judgment/Honest Belief Rule. Under
Texas law, at one time a lawyer was virtually immune from malpractice if he
acted prudently on the basis of honest beliefs about the law even if his
acquisition or testing of those beliefs was negligent. That is no longer the case. Now the lawyer is held to a standard of
negligence in all contexts, even in the context of predicting the course of the
law. Cosgrove v. Grimes, 774
S.W.2d 662, 664 -65 (Tex. 1989). Some
other states are more equivocal on this issue.
“When the law is clouded because it stands unconcretized by precedential
pronouncements, a lawyer who acts in good faith and in an honest belief that
his advice and acts are well-founded will not be held responsible for failing
to anticipate how the law’s ambiguity will ultimately be resolved.” Manley v.
Brown, 989 P.2d 448, 458-59 (Okla.
1999). “In a negligence case for rendition of substandard legal
services, the primary issue is whether a lawyer’s conduct of litigation-related
defense fell below the acceptable professional standards. A lawyer who acts in good faith and honest
belief that his advice and acts are well-founded and in the best interest of
his client is not answerable for a mere error of judgment when dealing with a
point of law which has not been settled by a precedent-setting pronouncement
and about which reasonable doubt may be entertained by well-informed
lawyers. When the state law is doubtful
or debatable, a lawyer will not be held responsible for failing to anticipate
how the uncertainty will ultimately be resolved.” Id. at 452.
Question for thought: Is this an
honest belief standard or a negligence standard?
Obviously, there
is at most a hair’s breadth distinction between negligence and well-intentioned
error in judgment. In any state using
the “Error in Judgment Rule,” plaintiff should argue negligence. In any state where the “Negligent Prediction
Rule” prevails, the defense should argue judgment.
is at most a hair’s breadth distinction between negligence and well-intentioned
error in judgment. In any state using
the “Error in Judgment Rule,” plaintiff should argue negligence. In any state where the “Negligent Prediction
Rule” prevails, the defense should argue judgment.
Texas
Malpractice and Criminal Defense Work.
When clients plead guilty, it is extremely unlikely that they will
prevail against a criminal defense lawyer, even if the criminal defense lawyer
has been negligent in providing advice with regard to the guilty plea. Peeler v. Hughes & Luce, 909
S.W.2d 494 (Tex. 1995) (a controversial decision from a sharply divided court43). In general, those who are convicted of crimes
have difficulty suing their lawyers for malpractice unless the convictions have
been reversed or vacated. Barnum v.
Munson, Munson, Pierce, Cardwell, P.C., 998 S.W.2d 284 (Tex. App.–Dallas
1999, no writ). It might be malpractice
for a criminal defense lawyer to knowingly permit his client to go to trial in
jail clothes. Oliver v. State, 999
S.W.2d 596 (Tex. App.–Houston [14th Dist.] 1999, pet. ref’d.). (In this case, appellate court held that it
was error for the trial court to insist that this happen.)
Malpractice and Criminal Defense Work.
When clients plead guilty, it is extremely unlikely that they will
prevail against a criminal defense lawyer, even if the criminal defense lawyer
has been negligent in providing advice with regard to the guilty plea. Peeler v. Hughes & Luce, 909
S.W.2d 494 (Tex. 1995) (a controversial decision from a sharply divided court43). In general, those who are convicted of crimes
have difficulty suing their lawyers for malpractice unless the convictions have
been reversed or vacated. Barnum v.
Munson, Munson, Pierce, Cardwell, P.C., 998 S.W.2d 284 (Tex. App.–Dallas
1999, no writ). It might be malpractice
for a criminal defense lawyer to knowingly permit his client to go to trial in
jail clothes. Oliver v. State, 999
S.W.2d 596 (Tex. App.–Houston [14th Dist.] 1999, pet. ref’d.). (In this case, appellate court held that it
was error for the trial court to insist that this happen.)
In Cantu
v. Texas, 993 S.W.2d 712 (Tex. App.–San Antonio 1999), a criminal defendant
was subjected to a sentence of forty years when he agreed to plead guilty on
Monday, whereas the state would have settled for ten years had he pleaded
guilty on Friday. The court of appeals
made it fairly clear that this result stemmed from the lack of preparation on
the part of the defendant’s lawyer. The
court described the result as “offensive,” but it stopped short of saying that
it was a legal mandate for reversal. Id.
at 723. It is troubling that a defendant must serve
thirty more years because he did not make up his mind before the weekend. The court found “practical truth” in the
position of the defendant-client that had his lawyer “been prepared and eager
for trial,” the state would not have insisted on the very substantial
sentence. Indeed, the “argument” has the
merit of common sense and captures the reality of the court room. A vigorous defense usually results in a
better plea bargaining position. But we
cannot say as a matter of law that this was ineffective assistance of counsel
considering the guilty plea a sentence within the legislative guidelines.” Id. at 723. The legislative guidelines prescribe a
sentence between 5 and 99 years.
v. Texas, 993 S.W.2d 712 (Tex. App.–San Antonio 1999), a criminal defendant
was subjected to a sentence of forty years when he agreed to plead guilty on
Monday, whereas the state would have settled for ten years had he pleaded
guilty on Friday. The court of appeals
made it fairly clear that this result stemmed from the lack of preparation on
the part of the defendant’s lawyer. The
court described the result as “offensive,” but it stopped short of saying that
it was a legal mandate for reversal. Id.
at 723. It is troubling that a defendant must serve
thirty more years because he did not make up his mind before the weekend. The court found “practical truth” in the
position of the defendant-client that had his lawyer “been prepared and eager
for trial,” the state would not have insisted on the very substantial
sentence. Indeed, the “argument” has the
merit of common sense and captures the reality of the court room. A vigorous defense usually results in a
better plea bargaining position. But we
cannot say as a matter of law that this was ineffective assistance of counsel
considering the guilty plea a sentence within the legislative guidelines.” Id. at 723. The legislative guidelines prescribe a
sentence between 5 and 99 years.
As a pleading
matter, the client wants to sue a lawyer for malpractice after having been
having been convicted in a criminal action, the plaintiff must affirmatively
plead innocence (or at least non-guilt).
Rodriguez v. Nielsen, 609 N.W.2d 368 (Neb. 2000). An obvious point, and repleader is almost
certainly everywhere allowed.
matter, the client wants to sue a lawyer for malpractice after having been
having been convicted in a criminal action, the plaintiff must affirmatively
plead innocence (or at least non-guilt).
Rodriguez v. Nielsen, 609 N.W.2d 368 (Neb. 2000). An obvious point, and repleader is almost
certainly everywhere allowed.
Ineffective
Assistance of Counsel and Malpractice.
Obviously, ineffective assistance of counsel entitles the defendant to a
new trial, but does it always constitute malpractice? This will hinge on whether the defendant is
ultimately convicted. But what about the
legal fees expended on the second trial?
For an ineffective assistance of counsel case where defense counsel
failed to call or personally interview witnesses who would have said that they
saw the decedent after the defendant supposedly killed him, see Lord v. Wood,
184 F.3d 1083 (9th Cir. 1999).
Assistance of Counsel and Malpractice.
Obviously, ineffective assistance of counsel entitles the defendant to a
new trial, but does it always constitute malpractice? This will hinge on whether the defendant is
ultimately convicted. But what about the
legal fees expended on the second trial?
For an ineffective assistance of counsel case where defense counsel
failed to call or personally interview witnesses who would have said that they
saw the decedent after the defendant supposedly killed him, see Lord v. Wood,
184 F.3d 1083 (9th Cir. 1999).
Defenses. When a client sues an attorney for
malpractice, or a liability carrier sues on a subrogation theory, the attorney
is entitled to set up affirmative defenses.
Presumably, these will apply to both the client and its managerial
representative. Reliance Nat’l Indem.
Co. v. Jennings, 189 F.3d 689 (8th
Cir. 1999). Disasters can be validly attributed to criminal lawyers who handle post trial matters, e.g., appeals and more importantly a motion for habeas corpus in the federal courts. Christeson v. Roper, 574 U.S. ____ (2015) (conflict of interest problem too).
malpractice, or a liability carrier sues on a subrogation theory, the attorney
is entitled to set up affirmative defenses.
Presumably, these will apply to both the client and its managerial
representative. Reliance Nat’l Indem.
Co. v. Jennings, 189 F.3d 689 (8th
Cir. 1999). Disasters can be validly attributed to criminal lawyers who handle post trial matters, e.g., appeals and more importantly a motion for habeas corpus in the federal courts. Christeson v. Roper, 574 U.S. ____ (2015) (conflict of interest problem too).
Limitations
Periods. It is two years, as befits
the tort of negligence. The question is
when does the limitations period begin to run?
Usually, it begins to run from the date of the injury. However, the discovery rule often applies so
that the limitations period begins to run when the client discovers or should
have discovered, the facts establishing the elements of a cause of action. Hughes
v. Mahaney & Higgins, 821 S.W.2d 154, 156 (Tex. 1991). According to Hughes, when malpractice
is committed in litigation, the limitation period is tolled until all appeals
in the underlying case are exhausted, at least so long as the client continues
to use the same lawyer in that litigation.
See also Murphy v. Campbell, 964 S.W.2d 265, 272-73 (Tex. 1997)
(limiting the tolling rule in Hughes to claims against a lawyer arising
out of litigation where the party must not only assert inconsistent positions,
but must also obtain new counsel). See Norman
v. Yzaguire & Schapa, 988 S.W.2d
460 (Tex. App.–Corpus Christi 1999, no
pet.) and Eiland v. Turpin, Smith, Dyer, Saxe & McDonald, 16 S.W.3d
461 (Tex. App.–El Paso 2000) (no equitable tolling for malpractice action
arising out of a bankruptcy proceeding), Edwards v. Kaye, 9 S.W.3d 310
(Tex. App.-Houston [14th Dist.] 1999, no pet. h.) (genuine issue of material
fact as to whether there was equitable tolling given delays in the service of
process).
Periods. It is two years, as befits
the tort of negligence. The question is
when does the limitations period begin to run?
Usually, it begins to run from the date of the injury. However, the discovery rule often applies so
that the limitations period begins to run when the client discovers or should
have discovered, the facts establishing the elements of a cause of action. Hughes
v. Mahaney & Higgins, 821 S.W.2d 154, 156 (Tex. 1991). According to Hughes, when malpractice
is committed in litigation, the limitation period is tolled until all appeals
in the underlying case are exhausted, at least so long as the client continues
to use the same lawyer in that litigation.
See also Murphy v. Campbell, 964 S.W.2d 265, 272-73 (Tex. 1997)
(limiting the tolling rule in Hughes to claims against a lawyer arising
out of litigation where the party must not only assert inconsistent positions,
but must also obtain new counsel). See Norman
v. Yzaguire & Schapa, 988 S.W.2d
460 (Tex. App.–Corpus Christi 1999, no
pet.) and Eiland v. Turpin, Smith, Dyer, Saxe & McDonald, 16 S.W.3d
461 (Tex. App.–El Paso 2000) (no equitable tolling for malpractice action
arising out of a bankruptcy proceeding), Edwards v. Kaye, 9 S.W.3d 310
(Tex. App.-Houston [14th Dist.] 1999, no pet. h.) (genuine issue of material
fact as to whether there was equitable tolling given delays in the service of
process).
In factually
complex situations, when the limitations period begins to run, when it is
tolled, and when it begins to run again, is often a factual matter. Ex parte Seabol, 2000 WL 681085
(Ala. 2000).
complex situations, when the limitations period begins to run, when it is
tolled, and when it begins to run again, is often a factual matter. Ex parte Seabol, 2000 WL 681085
(Ala. 2000).
Breach of
fiduciary duty cases against lawyers are governed by the two-year statute of
limitations. Thus, a breach of fiduciary
duties is not necessarily fraud which would fall within a longer limitations
period. Apex Towing Co. v. Tolin,
997 S.W.2d 903, 907 (Tex. App.–Beaumont 1999, pet filed) (a lawyer allegedly
failed to file limitation of liability action while defending a lawsuit
involving a vessel). Svenska Finans
Int’l BV v. Scolaro, Shulman, Cohen, Lawler & Bursten, P.C., 37
F.Supp.2d 178 (N.D.N.Y. 1999) (holding that the shorter three year statute of
limitations applied to the plaintiff’s breach of fiduciary duty claims).
fiduciary duty cases against lawyers are governed by the two-year statute of
limitations. Thus, a breach of fiduciary
duties is not necessarily fraud which would fall within a longer limitations
period. Apex Towing Co. v. Tolin,
997 S.W.2d 903, 907 (Tex. App.–Beaumont 1999, pet filed) (a lawyer allegedly
failed to file limitation of liability action while defending a lawsuit
involving a vessel). Svenska Finans
Int’l BV v. Scolaro, Shulman, Cohen, Lawler & Bursten, P.C., 37
F.Supp.2d 178 (N.D.N.Y. 1999) (holding that the shorter three year statute of
limitations applied to the plaintiff’s breach of fiduciary duty claims).
When the discovery
rule applies, the defendant-lawyers will bear the burden of proof as to when
the client discovered, or reasonably should have discovered, the facts
constituting the alleged legal malpractice.
Samuels v. Nix, 989 P.2d
701 (Cal. 1999). A lawyer’s private business dealing, even if
sanctionable, does not necessarily implicate the law firm by which he is
employed or of which he is a member. An
attorney’s acts in a business may not be sufficiently connected to the law
firm’s business to impose liability on it.
The mere fact that a lawyer’s employment situation may offer the
opportunity for tortious activity does not make the firm by which he is
employed liable to the victim of that tortious activity. Drew v.
Stanton, 603 N.W.2d 79 (S.D. 1999).
(This is standard agency law, but one might have thought the agency
rules would be expanded somewhat when lawyers and law firms are involved.)
rule applies, the defendant-lawyers will bear the burden of proof as to when
the client discovered, or reasonably should have discovered, the facts
constituting the alleged legal malpractice.
Samuels v. Nix, 989 P.2d
701 (Cal. 1999). A lawyer’s private business dealing, even if
sanctionable, does not necessarily implicate the law firm by which he is
employed or of which he is a member. An
attorney’s acts in a business may not be sufficiently connected to the law
firm’s business to impose liability on it.
The mere fact that a lawyer’s employment situation may offer the
opportunity for tortious activity does not make the firm by which he is
employed liable to the victim of that tortious activity. Drew v.
Stanton, 603 N.W.2d 79 (S.D. 1999).
(This is standard agency law, but one might have thought the agency
rules would be expanded somewhat when lawyers and law firms are involved.)
If a client has a
lawyer handling a case and that lawyer is replaced by another one who should have realized that the first lawyer
fouled things up, the statute of limitations will begin to run at the time the
new lawyer should have realized that things had been fouled up. Preblich v. Zorea, 996 P.2d 730
(Alaska 2000).
lawyer handling a case and that lawyer is replaced by another one who should have realized that the first lawyer
fouled things up, the statute of limitations will begin to run at the time the
new lawyer should have realized that things had been fouled up. Preblich v. Zorea, 996 P.2d 730
(Alaska 2000).
Attorney
Fiduciary Duties to Clients. People
can have different kinds of relationships.
The law recognizes this. Some
relationships involve a high degree of trust and require a high degree of
loyalty. These relationships are
fiduciary in nature. If A is a
fiduciary with respect to B, A must place B’s interest ahead of his
own. Attorney-client relationships are
like this. Fiduciary relationships
differ markedly from arm’s-length relationships. If A is in an arm’s-length
relationship with B, A may pursue his own self-interest ahead of any
interest of B, unless he has agreed to do certain things for B or
unless the tort law requires him in specific ways to attend to the interests of
B. Another way in which fiduciary
relations and arm’s-length relationships are dissimilar is in terms of the
levels of disclosure required. If A
is a fiduciary with respect to B, A must make full and complete
disclosure of all relevant facts to B.
The same is not true of arm’s-length relationships. There is at least one intermediate type of
relationship between fiduciary relationship and the arm’s-length
relationship. This is often called the special
relationship. The relationship
insurance companies have with first-party insureds exemplifies this type of
relationship. Some believe that when a
liability carrier is defending its insured, it stands in a special relationship
with its insured.
Fiduciary Duties to Clients. People
can have different kinds of relationships.
The law recognizes this. Some
relationships involve a high degree of trust and require a high degree of
loyalty. These relationships are
fiduciary in nature. If A is a
fiduciary with respect to B, A must place B’s interest ahead of his
own. Attorney-client relationships are
like this. Fiduciary relationships
differ markedly from arm’s-length relationships. If A is in an arm’s-length
relationship with B, A may pursue his own self-interest ahead of any
interest of B, unless he has agreed to do certain things for B or
unless the tort law requires him in specific ways to attend to the interests of
B. Another way in which fiduciary
relations and arm’s-length relationships are dissimilar is in terms of the
levels of disclosure required. If A
is a fiduciary with respect to B, A must make full and complete
disclosure of all relevant facts to B.
The same is not true of arm’s-length relationships. There is at least one intermediate type of
relationship between fiduciary relationship and the arm’s-length
relationship. This is often called the special
relationship. The relationship
insurance companies have with first-party insureds exemplifies this type of
relationship. Some believe that when a
liability carrier is defending its insured, it stands in a special relationship
with its insured.
Fiduciary Duty
Breaches. The phrase “breach of
fiduciary duty” is a multi-dimensional phrase.
Sometimes people think that it refers to the type of cause of action. We are inclined to think that it should be
conceptualized differently, because fiduciary duties can be breached in all
sorts of ways. We are inclined to think
that each of the following is a separate cause of action: negligent breach of fiduciary duty, grossly
negligent breach of fiduciary duty, deliberate breach of fiduciary duty, and
maybe some sort of strict liability for breach of fiduciary duty. We know of no elaborate worked-out legal
theory on these matters, so what we are saying is–to some degree, though not
entirely–conjectural. Perl v. St.
Paul Fire & Marine Ins. Co., 345 N.W.2d 209 (Minn. 1984) (“Breach of
fiduciary duty, such as disclosure of a client’s confidence or representation
of adverse or competing interests, may also be characterized as a breach by an
attorney of a standard of conduct, as distinguished from breach of a
standard of care (which encompasses negligent performance of professional
services, similar to malpractice liability in other professions). Id. at 213. (Emphasis added.) This language seems to imply that breaches of
fiduciary duty may be judged against different standards of care.) Settlement activity by a lawyer which is not
authorized by the client may violate fiduciary duties, and this is certainly
true if the lawyer causes settlement. Brown
v. Slenker, 47 F.Supp.2d 754 (N.D. La. 1999) vacated, Brown v.
Slenker 220 F.3d 411 (5th Cir. 2000) (vacating only because breach of
fiduciary claim did not go to the jury).
Breaches. The phrase “breach of
fiduciary duty” is a multi-dimensional phrase.
Sometimes people think that it refers to the type of cause of action. We are inclined to think that it should be
conceptualized differently, because fiduciary duties can be breached in all
sorts of ways. We are inclined to think
that each of the following is a separate cause of action: negligent breach of fiduciary duty, grossly
negligent breach of fiduciary duty, deliberate breach of fiduciary duty, and
maybe some sort of strict liability for breach of fiduciary duty. We know of no elaborate worked-out legal
theory on these matters, so what we are saying is–to some degree, though not
entirely–conjectural. Perl v. St.
Paul Fire & Marine Ins. Co., 345 N.W.2d 209 (Minn. 1984) (“Breach of
fiduciary duty, such as disclosure of a client’s confidence or representation
of adverse or competing interests, may also be characterized as a breach by an
attorney of a standard of conduct, as distinguished from breach of a
standard of care (which encompasses negligent performance of professional
services, similar to malpractice liability in other professions). Id. at 213. (Emphasis added.) This language seems to imply that breaches of
fiduciary duty may be judged against different standards of care.) Settlement activity by a lawyer which is not
authorized by the client may violate fiduciary duties, and this is certainly
true if the lawyer causes settlement. Brown
v. Slenker, 47 F.Supp.2d 754 (N.D. La. 1999) vacated, Brown v.
Slenker 220 F.3d 411 (5th Cir. 2000) (vacating only because breach of
fiduciary claim did not go to the jury).
Actions for
damages arising from breaches of fiduciary duty are like malpractice actions in
that they require proof of causation and damages. Unlike malpractice actions, they do not
require proof of negligent conduct since proof of breach of fiduciary duties is
enough. Chrysler Corp. v. Carey,
5 F. Supp.2d 1023, 1033 (E.D. Mo. 1998).
If a client fails to prove that a lawyer’s breach of fiduciary duty
injured him, there will be no recovery.
Courts are much more constrained in suits for breaches of fiduciary duty
than they are in motions to disqualify and motions for sanctions. In a motion to disqualify situation, all that
has to be proved is a breach of some duty (such as a conflict of interest), and
all that has to be proved in the sanction situation is that the breach is
egregious. Causation is not an
element. This is true for obvious
reasons. Motions to disqualify are
mostly prophylactic. (These observations
do not apply to actions seeking fee forfeiture on the grounds of breach of
fiduciary duties. Burrow v. Arce,
997 S.W.2d 229 (Tex. 1999). The reason
is that what a client buys when it engages a lawyer is loyalty. If a lawyer breaches at least some of these
duties of loyalty, the client has thereby been completely deprived of one of
the central services he was trying to buy.)
damages arising from breaches of fiduciary duty are like malpractice actions in
that they require proof of causation and damages. Unlike malpractice actions, they do not
require proof of negligent conduct since proof of breach of fiduciary duties is
enough. Chrysler Corp. v. Carey,
5 F. Supp.2d 1023, 1033 (E.D. Mo. 1998).
If a client fails to prove that a lawyer’s breach of fiduciary duty
injured him, there will be no recovery.
Courts are much more constrained in suits for breaches of fiduciary duty
than they are in motions to disqualify and motions for sanctions. In a motion to disqualify situation, all that
has to be proved is a breach of some duty (such as a conflict of interest), and
all that has to be proved in the sanction situation is that the breach is
egregious. Causation is not an
element. This is true for obvious
reasons. Motions to disqualify are
mostly prophylactic. (These observations
do not apply to actions seeking fee forfeiture on the grounds of breach of
fiduciary duties. Burrow v. Arce,
997 S.W.2d 229 (Tex. 1999). The reason
is that what a client buys when it engages a lawyer is loyalty. If a lawyer breaches at least some of these
duties of loyalty, the client has thereby been completely deprived of one of
the central services he was trying to buy.)
Foreseeability. Sometimes, conflicts of interest lead to
malpractice. Sometimes not. If a law firm hires a new associate who is
clerking for a judge, and the law clerk, while with the judge, continues to
work on a case in which the law firm is involved, though as a result the judge
recused himself after resolving case in favor of the law firm’s client, but the
case has to be retried, and comes out with a result which injures the client,
the law firm is not guilty of malpractice, because the conflict and the injury
were not foreseeable. Judicial
impartiality is presumed and § 455(a) of the Code of Judicial Conduct and
the Code of Conduct for Law Clerks “all place the burden of maintaining
impartiality and the appearance of impartiality on the judge and the law
clerk. First Interstate Bank of
Arizona, N.A. v. Murphy, Weir and Butler, 210 F.3d 983, 987 (9th Cir.
2000) (case involving a bankruptcy judge).
malpractice. Sometimes not. If a law firm hires a new associate who is
clerking for a judge, and the law clerk, while with the judge, continues to
work on a case in which the law firm is involved, though as a result the judge
recused himself after resolving case in favor of the law firm’s client, but the
case has to be retried, and comes out with a result which injures the client,
the law firm is not guilty of malpractice, because the conflict and the injury
were not foreseeable. Judicial
impartiality is presumed and § 455(a) of the Code of Judicial Conduct and
the Code of Conduct for Law Clerks “all place the burden of maintaining
impartiality and the appearance of impartiality on the judge and the law
clerk. First Interstate Bank of
Arizona, N.A. v. Murphy, Weir and Butler, 210 F.3d 983, 987 (9th Cir.
2000) (case involving a bankruptcy judge).
Causation. There are two issues involving
causation. A major question is has an
injury been caused? Answering this question
focuses on both injury and causation.
causation. A major question is has an
injury been caused? Answering this question
focuses on both injury and causation.
1. Injury: There must have actually been an injury
before there can be a legal malpractice case.
Thus, if a document creating an entity has been misdrawn, but nothing
bad has happened yet, then there is no malpractice action. Commerce Bank, N.A. v. Ogden, Newell, and
Welch, 81 F.Supp.2d 1304 (M.D. Fla. 1999).
before there can be a legal malpractice case.
Thus, if a document creating an entity has been misdrawn, but nothing
bad has happened yet, then there is no malpractice action. Commerce Bank, N.A. v. Ogden, Newell, and
Welch, 81 F.Supp.2d 1304 (M.D. Fla. 1999).
2. Causation Itself. Causation is frequently difficult to prove in
professional malpractice cases. Proving
cause in fact means proving that, but for the lawyer’s conduct, the client
would have achieved a better result. Rodriguez
v. Klein, 960 S.W.2d 179 (Tex. App.–Corpus Christi 1997, no writ). (A lawyer’s increasing his client’s
susceptibility to suit does not, by itself, constitute cause in fact). See also Day v. Harkins & Munoz,
961 S.W.2d 278, 280-81 (Tex. App.–Houston [1st Dist.] 1997, no writ). This case involved a legal malpractice action
predicated upon a medical malpractice action gone sour. It contains a short summary of the law
governing legal malpractice. Because
there was no doctor-patient relationship, the lawyer’s error could not possibly
have caused injury to his clients, therefore the lawyer prevailed. The Lesson: In complex cases involving malpractice,
proving causation is often crucial and difficult.
professional malpractice cases. Proving
cause in fact means proving that, but for the lawyer’s conduct, the client
would have achieved a better result. Rodriguez
v. Klein, 960 S.W.2d 179 (Tex. App.–Corpus Christi 1997, no writ). (A lawyer’s increasing his client’s
susceptibility to suit does not, by itself, constitute cause in fact). See also Day v. Harkins & Munoz,
961 S.W.2d 278, 280-81 (Tex. App.–Houston [1st Dist.] 1997, no writ). This case involved a legal malpractice action
predicated upon a medical malpractice action gone sour. It contains a short summary of the law
governing legal malpractice. Because
there was no doctor-patient relationship, the lawyer’s error could not possibly
have caused injury to his clients, therefore the lawyer prevailed. The Lesson: In complex cases involving malpractice,
proving causation is often crucial and difficult.
Here is a summary
of the Texas law of causation in the context of legal malpractice. “Cause in fact is a common element in both
negligence and DTPA actions. The test
for cause in fact is whether the defendant’s act or omission was a substantial
factor in bringing about the injury that would not otherwise have
occurred. Generally, the issue of
proximate cause tends to be a fact question although some causes in fact do not
constitute legal causation as a matter of law.
A plaintiff must plead and prove that the defendant’s negligence is the
proximate cause of his injury. . . .[an] act of negligence that
does no more than put a person in a particular place at a particular time is
too remote to constitute legal cause.” Roberts
v. Healey, 991 S.W.2d 873, 878-79 (Tex. App.–Houston [14th Dist.] 1999,
writ denied) (attorney’s failure to
obtain a protective order against his client’s estranged husband, where the
husband killed the client’s two small children and wounded her mother, did not
constitute actionable malpractice due to lack of causation).
of the Texas law of causation in the context of legal malpractice. “Cause in fact is a common element in both
negligence and DTPA actions. The test
for cause in fact is whether the defendant’s act or omission was a substantial
factor in bringing about the injury that would not otherwise have
occurred. Generally, the issue of
proximate cause tends to be a fact question although some causes in fact do not
constitute legal causation as a matter of law.
A plaintiff must plead and prove that the defendant’s negligence is the
proximate cause of his injury. . . .[an] act of negligence that
does no more than put a person in a particular place at a particular time is
too remote to constitute legal cause.” Roberts
v. Healey, 991 S.W.2d 873, 878-79 (Tex. App.–Houston [14th Dist.] 1999,
writ denied) (attorney’s failure to
obtain a protective order against his client’s estranged husband, where the
husband killed the client’s two small children and wounded her mother, did not
constitute actionable malpractice due to lack of causation).
It is especially
difficult to prove causation in business litigation where a complex deal is
involved. This is even more true when
the client business is in a deteriorating economic condition. For an interesting pair of decisions coming to
different conclusions on exactly the same facts, see Haynes and Boone v.
Bowser Bouldin, Ltd., 864 S.W.2d 662 (Tex. App.–San Antonio 1993), rev’d
896 S.W.2d 179 (Tex. 1995). The same
is true in construction cases, and it is most especially true in construction
cases which involve governmental entities.
Such cases often involve antecedent notice requirements of various sorts
which will destroy a contractor’s claim against the state, even if the lawyer
also fouls it up. Dan Nelson
Construction, Inc. v. Nodland and Dickson, 608 N.W.2d 268 (N.D. 2000).
difficult to prove causation in business litigation where a complex deal is
involved. This is even more true when
the client business is in a deteriorating economic condition. For an interesting pair of decisions coming to
different conclusions on exactly the same facts, see Haynes and Boone v.
Bowser Bouldin, Ltd., 864 S.W.2d 662 (Tex. App.–San Antonio 1993), rev’d
896 S.W.2d 179 (Tex. 1995). The same
is true in construction cases, and it is most especially true in construction
cases which involve governmental entities.
Such cases often involve antecedent notice requirements of various sorts
which will destroy a contractor’s claim against the state, even if the lawyer
also fouls it up. Dan Nelson
Construction, Inc. v. Nodland and Dickson, 608 N.W.2d 268 (N.D. 2000).
For an
extraordinarily complex attorney malpractice case in which causation was an
issue but in which–amazingly–the plaintiff prevailed, see McKnight v.
Gingras, 966 F. Supp. 801 (E.D. Wis. 1997).
For a case in which causation was not proved and the plaintiff failed,
see Viehwegh v. Mello, 5 F. Supp.2d 752, 759-60 (E.D. Mo.
1998). In this case, a former client
alleged that he suffered injury because of his attorney’s withdrawal from a
case before the filing of the lawsuit.
The client lost because the court found that he had six months in which
to find other counsel, and because he failed to prove damages. In Briggs v. Cochran, 17 F.Supp.2d 453
(D. Md. 1998), the court entered summary judgment against a physician who sued
his lawyer for malpractice because he had recommended that the physician
voluntarily surrender his license after an improper sexual relationship with
several patients. The court held that
the physician failed to present an expert witness on the likely outcome of
medical disciplinary proceeding.
extraordinarily complex attorney malpractice case in which causation was an
issue but in which–amazingly–the plaintiff prevailed, see McKnight v.
Gingras, 966 F. Supp. 801 (E.D. Wis. 1997).
For a case in which causation was not proved and the plaintiff failed,
see Viehwegh v. Mello, 5 F. Supp.2d 752, 759-60 (E.D. Mo.
1998). In this case, a former client
alleged that he suffered injury because of his attorney’s withdrawal from a
case before the filing of the lawsuit.
The client lost because the court found that he had six months in which
to find other counsel, and because he failed to prove damages. In Briggs v. Cochran, 17 F.Supp.2d 453
(D. Md. 1998), the court entered summary judgment against a physician who sued
his lawyer for malpractice because he had recommended that the physician
voluntarily surrender his license after an improper sexual relationship with
several patients. The court held that
the physician failed to present an expert witness on the likely outcome of
medical disciplinary proceeding.
Causation creates
other problems in legal malpractice cases.
For example, when the alleged legal malpractice occurs in the context of
appellate practice, judges, and not juries, are to decide causation questions. Millhouse v. Wiesenthal, 775 S.W.2d
626 (Tex. 1989). Moreover, in the
context of at least some fiduciary duty cases, the plaintiff need not prove
causation. For example, in some cases,
some fee forfeiture is automatic without proof of causation. This is not, of course, to say that the
forfeiture of an entire fee is automatically automatic. Burrow v. Arce, 997 S.W.2d 229 (Tex.
1999).
other problems in legal malpractice cases.
For example, when the alleged legal malpractice occurs in the context of
appellate practice, judges, and not juries, are to decide causation questions. Millhouse v. Wiesenthal, 775 S.W.2d
626 (Tex. 1989). Moreover, in the
context of at least some fiduciary duty cases, the plaintiff need not prove
causation. For example, in some cases,
some fee forfeiture is automatic without proof of causation. This is not, of course, to say that the
forfeiture of an entire fee is automatically automatic. Burrow v. Arce, 997 S.W.2d 229 (Tex.
1999).
When a law firm
sends a first-year associate alone to an important hearing on discovery
sanctions, and the associate loses, does the law firm face malpractice
problems? What are the issues of
causation here? See Reilly v. Natwest
Markets Group, Inc., 181 F.3d 253, 270-71 (2nd Cir. 1999).
sends a first-year associate alone to an important hearing on discovery
sanctions, and the associate loses, does the law firm face malpractice
problems? What are the issues of
causation here? See Reilly v. Natwest
Markets Group, Inc., 181 F.3d 253, 270-71 (2nd Cir. 1999).
If a
client/plaintiff dismisses a lawsuit and then sues her lawyer for malpractice,
she will have difficulty having causation as against the lawyer. Samuel v. Hepworth, Nungester &
Lezamiz, Inc., 996 P.2d 303 (Idaho 2000).
client/plaintiff dismisses a lawsuit and then sues her lawyer for malpractice,
she will have difficulty having causation as against the lawyer. Samuel v. Hepworth, Nungester &
Lezamiz, Inc., 996 P.2d 303 (Idaho 2000).
Lawyers and
Firms. Office-sharing arrangements
do not add up to a partnership, even on a partnership-by-estoppel theory, even
when there has been some loose talk in front of the client about there being a
firm. Gosselin v. O’Dea, 40 F. Supp.2d 45 (D. Mass.
1999). Obviously, these matters
are very fact intensive.
Firms. Office-sharing arrangements
do not add up to a partnership, even on a partnership-by-estoppel theory, even
when there has been some loose talk in front of the client about there being a
firm. Gosselin v. O’Dea, 40 F. Supp.2d 45 (D. Mass.
1999). Obviously, these matters
are very fact intensive.
Settlement. A lawyer may not settle his own malpractice
case with a client without advising the client to seek other legal advice. Office of Disciplinary Council v. Clavner, 674 N.E.2d 1369 (Ohio
1997).
case with a client without advising the client to seek other legal advice. Office of Disciplinary Council v. Clavner, 674 N.E.2d 1369 (Ohio
1997).
Expert Witness
Requirement. In most states, most of
the time, plaintiffs in attorney malpractice cases must utilize expert
witnesses. Brown v. Slenker,
220 F.3d 411 (5th Cir. 2000). However,
this is not necessary, in some states when the issues are within the “common
knowledge and experience of the layman.”
Keller v. Albright, 1 F. Supp.2d 1279, 1281 (D. Utah
1997). Probably, virtually any malpractice
action against an immigration lawyer would require an expert on legal
malpractice, since the practice is not widely understood by the general
public. Obviously, when the ethics rules
are somehow (whether directly or indirectly) used to set the standard for
negligence, expert testimony will be needed.
See Georgou v. Fritzshall, 178 F.3d 453, 456 (7th Cir. 1999)
(Easterbrook, J.).
Requirement. In most states, most of
the time, plaintiffs in attorney malpractice cases must utilize expert
witnesses. Brown v. Slenker,
220 F.3d 411 (5th Cir. 2000). However,
this is not necessary, in some states when the issues are within the “common
knowledge and experience of the layman.”
Keller v. Albright, 1 F. Supp.2d 1279, 1281 (D. Utah
1997). Probably, virtually any malpractice
action against an immigration lawyer would require an expert on legal
malpractice, since the practice is not widely understood by the general
public. Obviously, when the ethics rules
are somehow (whether directly or indirectly) used to set the standard for
negligence, expert testimony will be needed.
See Georgou v. Fritzshall, 178 F.3d 453, 456 (7th Cir. 1999)
(Easterbrook, J.).
Assignment of
Causes of Action. Legal malpractice
claims arising out of litigation are not assignable. Zuniga v. Groce, Locke & Hebdon,
878 S.W.2d 313, 318 (Tex. App.–San Antonio 1994, writ ref’d). In fact, no legal malpractice claims are
assignable. Vinson & Elkins v.
Moran, 946 S.W.2d 381, 396 (Tex. App.–Houston [14th Dist.] 1997, writ
denied). (holding that “the same public
policy reasons for prohibiting the assignment of legal malpractice claims also
bar the assignment of these other claims, [such as, claims for conspiracy,
violation of the DTPA or other intentional torts].” Id. at 396. Curiously, the Moran decision does not
mention breaches of fiduciary duty. In
at least one state, filing an assigned legal malpractice claim may be grounds
for sanctions. See Cardinal Holding
Co. v. Deal, 522 S.W.2d 614 (Va. 1999).
For a summary and critique of the law in this area, see Michael Sean
Quinn, On the Assignment of Legal Malpractice Claims, 37 S. Tex. L. Rev. 1203 (October 1996).
Causes of Action. Legal malpractice
claims arising out of litigation are not assignable. Zuniga v. Groce, Locke & Hebdon,
878 S.W.2d 313, 318 (Tex. App.–San Antonio 1994, writ ref’d). In fact, no legal malpractice claims are
assignable. Vinson & Elkins v.
Moran, 946 S.W.2d 381, 396 (Tex. App.–Houston [14th Dist.] 1997, writ
denied). (holding that “the same public
policy reasons for prohibiting the assignment of legal malpractice claims also
bar the assignment of these other claims, [such as, claims for conspiracy,
violation of the DTPA or other intentional torts].” Id. at 396. Curiously, the Moran decision does not
mention breaches of fiduciary duty. In
at least one state, filing an assigned legal malpractice claim may be grounds
for sanctions. See Cardinal Holding
Co. v. Deal, 522 S.W.2d 614 (Va. 1999).
For a summary and critique of the law in this area, see Michael Sean
Quinn, On the Assignment of Legal Malpractice Claims, 37 S. Tex. L. Rev. 1203 (October 1996).
Would it make any
difference whether the claim itself was assigned or whether the proceeds
of the claim were assigned? In Mallios
v. Baker, 43 Tex. S. Ct. J.
254 (January 8, 2000), a
five-person majority sidestepped this issue.
The majority stated, however, that even assuming that an assignment in
proceeds is the same as the assignment of a cause of action, if only a partial
assignment is made, the assignor may still pursue his claim. Id. at 256. (The majority, ever so gently, hinted that if
the assignment of a legal malpractice claim is void as contrary to law and
public policy, then the assignor would still have it and would have standing to
sue. It is difficult to see why an
attempt to make an assignment which was ultimately void would invalidate the
claim in the hands of the assignor.)
Four of the concurring justices indicated that they believed the
assignment was invalid. Justice Hecht,
writing for the group, emphasized the practical similarity between the
assignment of a cause of action and the assignment of proceeds. Without the assignment, the assignee would
not finance the litigation. Justice
Hecht indicates that this rule does not apply to transfers in bankruptcy or to
subrogation. Significantly, Justice
Hecht believes that it would be unfair to punish an assignor for executing an
invalid assignment. As a practical
matter, the claim may be worthless if the owner of the claim cannot or will not
prosecute it. He regards that as none of
the law’s concern. (Interestingly, two
justices who joined with the majority actually believe that legal malpractice
claims should be marketable and therefore assignable.).44
difference whether the claim itself was assigned or whether the proceeds
of the claim were assigned? In Mallios
v. Baker, 43 Tex. S. Ct. J.
254 (January 8, 2000), a
five-person majority sidestepped this issue.
The majority stated, however, that even assuming that an assignment in
proceeds is the same as the assignment of a cause of action, if only a partial
assignment is made, the assignor may still pursue his claim. Id. at 256. (The majority, ever so gently, hinted that if
the assignment of a legal malpractice claim is void as contrary to law and
public policy, then the assignor would still have it and would have standing to
sue. It is difficult to see why an
attempt to make an assignment which was ultimately void would invalidate the
claim in the hands of the assignor.)
Four of the concurring justices indicated that they believed the
assignment was invalid. Justice Hecht,
writing for the group, emphasized the practical similarity between the
assignment of a cause of action and the assignment of proceeds. Without the assignment, the assignee would
not finance the litigation. Justice
Hecht indicates that this rule does not apply to transfers in bankruptcy or to
subrogation. Significantly, Justice
Hecht believes that it would be unfair to punish an assignor for executing an
invalid assignment. As a practical
matter, the claim may be worthless if the owner of the claim cannot or will not
prosecute it. He regards that as none of
the law’s concern. (Interestingly, two
justices who joined with the majority actually believe that legal malpractice
claims should be marketable and therefore assignable.).44
Negligent
Misrepresentation. Although in Texas
only a client may sue an attorney for malpractice, Barcelo v. Elliott,
923 S.W.2d 575 (Tex. 1996), others may be able to sue a lawyer for negligent
misrepresentation. First National
Bank of Durant v. Douglass, 142 F.3d 802 (5th Cir. 1998). In this case, L made
misrepresentations to a bank on behalf of his client in the service of
obtaining a loan. See McCamish,
Martin, Brown & Loeffler v. F. E. Appling Interests, 991 S.W.2d
787 (1999). The McCamish, Martin
case is based upon § 552 of the Restatement
(Second) of Torts (1965). See Federal
Land Bank Ass’n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991). Ethics rules may, from time to time, be
implicated in negligent misrepresentation cases. See Texas Disciplinary Rule 2.02.
Misrepresentation. Although in Texas
only a client may sue an attorney for malpractice, Barcelo v. Elliott,
923 S.W.2d 575 (Tex. 1996), others may be able to sue a lawyer for negligent
misrepresentation. First National
Bank of Durant v. Douglass, 142 F.3d 802 (5th Cir. 1998). In this case, L made
misrepresentations to a bank on behalf of his client in the service of
obtaining a loan. See McCamish,
Martin, Brown & Loeffler v. F. E. Appling Interests, 991 S.W.2d
787 (1999). The McCamish, Martin
case is based upon § 552 of the Restatement
(Second) of Torts (1965). See Federal
Land Bank Ass’n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991). Ethics rules may, from time to time, be
implicated in negligent misrepresentation cases. See Texas Disciplinary Rule 2.02.
The McCamish,
Martin case raises at least as many questions as it answers, because
reliance must be justifiable in order for § 552 to apply. Justice Hankinson, who delivered the opinion
to the court, discoursed upon this matter at some length:
Martin case raises at least as many questions as it answers, because
reliance must be justifiable in order for § 552 to apply. Justice Hankinson, who delivered the opinion
to the court, discoursed upon this matter at some length:
In determining whether Section 552’s justifiable reliance
element is met, one must consider the nature of the relationship between the
attorney, client, and nonclient.
Generally, courts have acknowledged that a third party’s reliance on an
attorney’s representation is not justified when the representation takes place
in an adversarial context. This
adversary concept reflects the notion that an attorney, hired by a client for
the benefit and protection of the client’s interests, must pursue those
interests with undivided loyalty (within the confines of the Texas Disciplinary
Rules of Professional Conduct), without the imposition of a conflicting duty to
a nonclient whose interests are adverse to the client. Because not every situation is clearly
defined as “adversarial” or “nonadversarial,” the characterization of the
inter-party relationship should be guided, at least in part, by “the extent to
which the interests of the client in the third party are consistent with each
other.” Id. at 974.
element is met, one must consider the nature of the relationship between the
attorney, client, and nonclient.
Generally, courts have acknowledged that a third party’s reliance on an
attorney’s representation is not justified when the representation takes place
in an adversarial context. This
adversary concept reflects the notion that an attorney, hired by a client for
the benefit and protection of the client’s interests, must pursue those
interests with undivided loyalty (within the confines of the Texas Disciplinary
Rules of Professional Conduct), without the imposition of a conflicting duty to
a nonclient whose interests are adverse to the client. Because not every situation is clearly
defined as “adversarial” or “nonadversarial,” the characterization of the
inter-party relationship should be guided, at least in part, by “the extent to
which the interests of the client in the third party are consistent with each
other.” Id. at 974.
The court also based its opinion on § 73 of the Restatement (Third) of the Law Governing
Lawyers (1999), which concerns situations in which an attorney invites
a “non-client to rely on the attorney’s opinion or provision of other legal
services, and the non-client so relies[.]”
Section 73 prescribes reliance “so long as the non-client is not
too remote from the lawyer.” Id.
at 794-95. There is some tension between
the Barcelo case and the McCamish, Martin case. In Barcelo, the court eschewed
reliance upon the Restatement (Third) of
the Law Governing Lawyers and repudiated one of its rules, whereas in McCamish,
Martin, the court embraced a related section.
Lawyers (1999), which concerns situations in which an attorney invites
a “non-client to rely on the attorney’s opinion or provision of other legal
services, and the non-client so relies[.]”
Section 73 prescribes reliance “so long as the non-client is not
too remote from the lawyer.” Id.
at 794-95. There is some tension between
the Barcelo case and the McCamish, Martin case. In Barcelo, the court eschewed
reliance upon the Restatement (Third) of
the Law Governing Lawyers and repudiated one of its rules, whereas in McCamish,
Martin, the court embraced a related section.
Section 552
requires that the misrepresentation for the guidance of others must relate to
their business transactions and must be given in the course of advising on
business. If a lawyer tells a client
that a third person may, without breaking the law, tape videos of the client
having sex with a number of women, the lawyer has not committed the tort of
negligent misrepresentation with respect to the video artist, since the legal
advice was not given for the guidance of anyone in their business
transactions. Robinson v. Omer, 952 S.W.2d 423 (Tenn. 1997).
requires that the misrepresentation for the guidance of others must relate to
their business transactions and must be given in the course of advising on
business. If a lawyer tells a client
that a third person may, without breaking the law, tape videos of the client
having sex with a number of women, the lawyer has not committed the tort of
negligent misrepresentation with respect to the video artist, since the legal
advice was not given for the guidance of anyone in their business
transactions. Robinson v. Omer, 952 S.W.2d 423 (Tenn. 1997).
One typical
situation for negligent misrepresentation claims is in the presentation of
title opinions. Courts have held that
attorneys owe non-clients a duty to
provide a title opinion letter that is accurate, for example, with respect to
lien priorities. RTC Mortgage Trust
v. Fidelity Nat’l Title Ins. Co., 58 F. Supp.2d 503 (D.N.J. 1999).
situation for negligent misrepresentation claims is in the presentation of
title opinions. Courts have held that
attorneys owe non-clients a duty to
provide a title opinion letter that is accurate, for example, with respect to
lien priorities. RTC Mortgage Trust
v. Fidelity Nat’l Title Ins. Co., 58 F. Supp.2d 503 (D.N.J. 1999).
Suits By
Opposing Parties. In general, an
unsuccessful litigant cannot sue opposing counsel for a misrepresentation made
in the context of the contested litigation.
Mitchell v. Chapman, 10 S.W.3d 810, 812 (Tex. App.–Dallas
2000).
Opposing Parties. In general, an
unsuccessful litigant cannot sue opposing counsel for a misrepresentation made
in the context of the contested litigation.
Mitchell v. Chapman, 10 S.W.3d 810, 812 (Tex. App.–Dallas
2000).
This case also
holds that an unsuccessful litigant cannot sue opposing counsel for willfully
failing to produce a document. Let us
suppose that unsuccessful litigant would have prevailed, but for the lawyer’s
failure to produce the document. Let us
suppose that the lawyer actually refused to produce the document, fully knowing
its significance. As a consequence, the
lawyer unquestionably violated the rules of professional conduct, the discovery
rules, and probably court orders. What
remedies are there against the lawyer?
How can the unsuccessful litigant achieve justice when he is deprived of
it by the wilful conduct of the lawyer?
Is this kind of immunity really a good idea?
holds that an unsuccessful litigant cannot sue opposing counsel for willfully
failing to produce a document. Let us
suppose that unsuccessful litigant would have prevailed, but for the lawyer’s
failure to produce the document. Let us
suppose that the lawyer actually refused to produce the document, fully knowing
its significance. As a consequence, the
lawyer unquestionably violated the rules of professional conduct, the discovery
rules, and probably court orders. What
remedies are there against the lawyer?
How can the unsuccessful litigant achieve justice when he is deprived of
it by the wilful conduct of the lawyer?
Is this kind of immunity really a good idea?
Malicious
Prosecution. Finally, attorneys may
occasionally be named as defendants in actions for malicious prosecution based
upon the attorney’s actions in filing a prior civil suit. See, e.g., Bartal v. Brower, 993 P.2d
629 (1999) (Kan. 1999); Sheldon Appel Co. v. Albert & Oliker, 765
P.2d 498 (Cal. 1989); Toranto v. Wall, 891 S.W.2d 3 (Tex. App.
–Texarkana 1994, no writ). The elements
of such a cause of action generally include that (1) a prior action was
commenced by or at the direction of the defendant; (2) this action terminated in
favor of the defendant in that suit; (3) there was no probable cause for the
prior action; and (4) the prior action was instituted with malice. See, e.g., Appel 765 P.2d at 501; Texas
Beef Cattle Co. v. Green, 921 S.W.2d 203 (Tex. 1996). Some states require an additional “special
injury” element in order to prevail on such a claim; this element mandates some
interference with person or property other than that normally attendant upon
defending a lawsuit. See, e.g., Engel
v. CBS, Inc., 145 F.3d 499, 502 (2d Cir. 1998) (collecting New York
opinions); O’Toole v. Franklin, 569 P.2d 561, 564 fn.3 (Or. 1977).
Prosecution. Finally, attorneys may
occasionally be named as defendants in actions for malicious prosecution based
upon the attorney’s actions in filing a prior civil suit. See, e.g., Bartal v. Brower, 993 P.2d
629 (1999) (Kan. 1999); Sheldon Appel Co. v. Albert & Oliker, 765
P.2d 498 (Cal. 1989); Toranto v. Wall, 891 S.W.2d 3 (Tex. App.
–Texarkana 1994, no writ). The elements
of such a cause of action generally include that (1) a prior action was
commenced by or at the direction of the defendant; (2) this action terminated in
favor of the defendant in that suit; (3) there was no probable cause for the
prior action; and (4) the prior action was instituted with malice. See, e.g., Appel 765 P.2d at 501; Texas
Beef Cattle Co. v. Green, 921 S.W.2d 203 (Tex. 1996). Some states require an additional “special
injury” element in order to prevail on such a claim; this element mandates some
interference with person or property other than that normally attendant upon
defending a lawsuit. See, e.g., Engel
v. CBS, Inc., 145 F.3d 499, 502 (2d Cir. 1998) (collecting New York
opinions); O’Toole v. Franklin, 569 P.2d 561, 564 fn.3 (Or. 1977).
The special injury
requirement is consistent with a general hesitancy by courts to allow malicious
prosecution liability in all but the most extreme cases. Many state courts make statements to the
effect that this cause of action is generally disfavored. See, e.g., Appel, 765 P.2d at 502
(collecting California cases). Moreover,
some courts follow the Restatement (Second) of Torts position that attorneys are
not liable for malicious prosecution, the usual tests notwithstanding, if the
attorney either has probable cause or acts “primarily for the purpose of
aiding his client in obtaining a proper adjudication of his claim.” See Bergstrom v. Noah, 974 P.2d 520,
527 (Kan. 1999).
requirement is consistent with a general hesitancy by courts to allow malicious
prosecution liability in all but the most extreme cases. Many state courts make statements to the
effect that this cause of action is generally disfavored. See, e.g., Appel, 765 P.2d at 502
(collecting California cases). Moreover,
some courts follow the Restatement (Second) of Torts position that attorneys are
not liable for malicious prosecution, the usual tests notwithstanding, if the
attorney either has probable cause or acts “primarily for the purpose of
aiding his client in obtaining a proper adjudication of his claim.” See Bergstrom v. Noah, 974 P.2d 520,
527 (Kan. 1999).
Bivens
Cases. If an attorney procures a
court order, and then helps carry it out, the person adversely affected by the
court order may have a Bivens case against the lawyer. “Attorneys who assist in executing a federal
court order are federal agents acting under the color of authority and can be
held liable in a Bivens suit. Egervary
v. Rooney, 80 F.Supp.2d 491, 498 (E.D. Pa. 2000). (In this case, lawyers for a mother in
Hungary, obtained a court order to seize a child, possibly on the basis of
untruths, dealt with a seizure, and shipped the child off to Hungary. The father sued a variety of people,
including the attorneys acting for the mother.
The father had gotten no hearing.
The lawyers had proceeded under the International Child Abduction
Remedies Act, 42 U.S.C. § 11601 et. seq., which is a statute
implementing the Hague Convention.)
Cases. If an attorney procures a
court order, and then helps carry it out, the person adversely affected by the
court order may have a Bivens case against the lawyer. “Attorneys who assist in executing a federal
court order are federal agents acting under the color of authority and can be
held liable in a Bivens suit. Egervary
v. Rooney, 80 F.Supp.2d 491, 498 (E.D. Pa. 2000). (In this case, lawyers for a mother in
Hungary, obtained a court order to seize a child, possibly on the basis of
untruths, dealt with a seizure, and shipped the child off to Hungary. The father sued a variety of people,
including the attorneys acting for the mother.
The father had gotten no hearing.
The lawyers had proceeded under the International Child Abduction
Remedies Act, 42 U.S.C. § 11601 et. seq., which is a statute
implementing the Hague Convention.)
COURT
REGULATION OF SUB-STANDARD ATTORNEY CONDUCT
REGULATION OF SUB-STANDARD ATTORNEY CONDUCT
Court Sanctions. Getting sanctioned by a court is not always a
fate reserved only for losing counsel. Alexander
v. Local 496, 177 F.3d 394, 413-14 (6th Cir. 1999). In Texas, paralegals may not be sanctioned
under Rule 13, because they do not sign pleadings. Moreover, sanctions under Rule 13 must
specify the facts pursuant to which the sanction is being entered. Jimenez v. Transwestern Property Co.,
999 S.W.2d 125 (Tex. App.–Houston [14th Dist.] 1999, no pet.). A lawyer can be sanctioned under Texas
Rule 13 for making misrepresentations to a court in an affidavit. This is true even if the court does not
out-and-out accuse the lawyer of lying. Keever
v. Finlan, 988 S.W.2d 300 (Tex. App.–Dallas 1999, pet. filed).
fate reserved only for losing counsel. Alexander
v. Local 496, 177 F.3d 394, 413-14 (6th Cir. 1999). In Texas, paralegals may not be sanctioned
under Rule 13, because they do not sign pleadings. Moreover, sanctions under Rule 13 must
specify the facts pursuant to which the sanction is being entered. Jimenez v. Transwestern Property Co.,
999 S.W.2d 125 (Tex. App.–Houston [14th Dist.] 1999, no pet.). A lawyer can be sanctioned under Texas
Rule 13 for making misrepresentations to a court in an affidavit. This is true even if the court does not
out-and-out accuse the lawyer of lying. Keever
v. Finlan, 988 S.W.2d 300 (Tex. App.–Dallas 1999, pet. filed).
Lawyers can be
suspended or kicked out of federal practice, without being expelled from state
practice by federal courts. Sealed
Appellant 1 v. Sealed Appellee 1, 211 F.3d 252 (5th Cir. 2000). (There was an explosion at a petroleum
plant. L obtained the assistance
of “a long time employee of the petroleum manufacturer [whom the court called
“the insider”] who shortly thereafter began secretly assisting [L] for
money. If the court held that the lawyer
had offered a witness an improper monetary inducement.)
suspended or kicked out of federal practice, without being expelled from state
practice by federal courts. Sealed
Appellant 1 v. Sealed Appellee 1, 211 F.3d 252 (5th Cir. 2000). (There was an explosion at a petroleum
plant. L obtained the assistance
of “a long time employee of the petroleum manufacturer [whom the court called
“the insider”] who shortly thereafter began secretly assisting [L] for
money. If the court held that the lawyer
had offered a witness an improper monetary inducement.)
Illegitimately
removing a case from state to federal court can constitute a violation of
Rule 11 and can lead to sanctions against both the lawyer and the
client. Wallic v. Owens-Corning
Fiberglass Corp., 40 F.Supp.2d 1185 (D. Colo. 1999).
removing a case from state to federal court can constitute a violation of
Rule 11 and can lead to sanctions against both the lawyer and the
client. Wallic v. Owens-Corning
Fiberglass Corp., 40 F.Supp.2d 1185 (D. Colo. 1999).
Rule 11 in the
federal system is a very powerful weapon, but it doesn’t always work. In one case, a police officer-client tried to
dictate details to the lawyer. As a
result, the lawyer was permitted to withdraw, and there was no violation of
Rule 11. Whiting v. Lacara,
187 F.3d 317 (7th Cir. 1999). See Florida
Breckenridge, Inc. v. Solvay Pharmaceuticals, Inc., 174 F.3d 1227 (11th
Cir. 1999) (appellate court raises sanction issues on its own).
federal system is a very powerful weapon, but it doesn’t always work. In one case, a police officer-client tried to
dictate details to the lawyer. As a
result, the lawyer was permitted to withdraw, and there was no violation of
Rule 11. Whiting v. Lacara,
187 F.3d 317 (7th Cir. 1999). See Florida
Breckenridge, Inc. v. Solvay Pharmaceuticals, Inc., 174 F.3d 1227 (11th
Cir. 1999) (appellate court raises sanction issues on its own).
Statute-Based
Attacks Upon Lawyer Performance.
Lawyers have exposure for misconduct under a variety of statutes.
Attacks Upon Lawyer Performance.
Lawyers have exposure for misconduct under a variety of statutes.
a. Lawyers have liability both on their
conduct as lawyers and their conduct as people.
conduct as lawyers and their conduct as people.
(1) Lawyer qua
Lawyer: The majority of cases involve the RICO liability of attorneys
who represent clients charged with fraudulent activities.48 Since the landmark Supreme Court case of Reves
v. Ernst & Young,49 which held that in order to be liable an outside professional must
participate in the operation or management of the affairs of the RICO
enterprise, it has become harder to prove attorneys liable under RICO.50 However, where an attorney’s involvement in the
enterprise rises above mere counseling, liability may arise.51
Lawyer: The majority of cases involve the RICO liability of attorneys
who represent clients charged with fraudulent activities.48 Since the landmark Supreme Court case of Reves
v. Ernst & Young,49 which held that in order to be liable an outside professional must
participate in the operation or management of the affairs of the RICO
enterprise, it has become harder to prove attorneys liable under RICO.50 However, where an attorney’s involvement in the
enterprise rises above mere counseling, liability may arise.51
(2) Lawyer qua
Person: Of course, attorneys who embezzle client funds or otherwise
systematically defraud their clients may be principally liable for running a
RICO enterprise.52
Person: Of course, attorneys who embezzle client funds or otherwise
systematically defraud their clients may be principally liable for running a
RICO enterprise.52
b. Plaintiffs need to be careful about
bringing complex securities cases and RICO cases when the facts don’t come very
close to supporting them. Pelletier
v. Zweifel, 921 F.2d 1465 (11th
Cir. 1991).
bringing complex securities cases and RICO cases when the facts don’t come very
close to supporting them. Pelletier
v. Zweifel, 921 F.2d 1465 (11th
Cir. 1991).
2. Securities Laws: Federal and State. See Marc I. Steinberg, Corporate and Securities Malpractice (PLI
1992). Professor Steinberg, who
teaches at the Southern Methodist University School of Law, has revised
sections of this book several times over the last few years and portions of it
are available in a number of places. It
is a valuable compilation of cases and exposition of doctrine. Joseph A. Grundfest, Disimplying Private
Rights of Action Under the Federal Securities Law: The Commission’s Authority, 107 Harv. L. Rev. 961 (1994). (“Billions of dollars have changed hands in
private class action lawsuits alleging securities fraud.” Id. at 963.)
1992). Professor Steinberg, who
teaches at the Southern Methodist University School of Law, has revised
sections of this book several times over the last few years and portions of it
are available in a number of places. It
is a valuable compilation of cases and exposition of doctrine. Joseph A. Grundfest, Disimplying Private
Rights of Action Under the Federal Securities Law: The Commission’s Authority, 107 Harv. L. Rev. 961 (1994). (“Billions of dollars have changed hands in
private class action lawsuits alleging securities fraud.” Id. at 963.)
3. 28 U.S.C. § 1927. This statute states: “Any attorney or other person admitted to
conduct cases in any court of the United States or any Territory thereof who so
multiplies the proceedings in any case unreasonably and vexatiously may be
required by the court to satisfy personally the excess costs, expenses, and
attorneys’ fees reasonably incurred because of such conduct.”
conduct cases in any court of the United States or any Territory thereof who so
multiplies the proceedings in any case unreasonably and vexatiously may be
required by the court to satisfy personally the excess costs, expenses, and
attorneys’ fees reasonably incurred because of such conduct.”
Inherent Power Court. Courts possess inherent
power to regulate the conduct of lawyers, and this includes the power to
administer sanctions. See In re
Bennett, 960 S.W.2d 35, 40 (Tex. 1997).
power to regulate the conduct of lawyers, and this includes the power to
administer sanctions. See In re
Bennett, 960 S.W.2d 35, 40 (Tex. 1997).
Combinations. Sometimes, it is not clear why sanctions are
being applied, i.e., what the legal basis is.
Sometimes it is clear that they are justified under any one of several
bases, or some combination thereof. Cleveland
Hair Clinic, Inc. v. Puig, 200 F.3d 1063, 1068 (7th Cir. 2000). In this case, the lawyer defied a court
order, sulked, and possibly engaged with his clients in underhanded conduct,
after he failed to address the court in any candor. He got slapped with a huge sanction, any
objection to which he waived, because he sulked at the sidelines instead of
enforcing an evidentiary hearing. Id.
at 1066. This case is not only a vivid
cautionary tail, it contains a number of amusing balding jokes.)
being applied, i.e., what the legal basis is.
Sometimes it is clear that they are justified under any one of several
bases, or some combination thereof. Cleveland
Hair Clinic, Inc. v. Puig, 200 F.3d 1063, 1068 (7th Cir. 2000). In this case, the lawyer defied a court
order, sulked, and possibly engaged with his clients in underhanded conduct,
after he failed to address the court in any candor. He got slapped with a huge sanction, any
objection to which he waived, because he sulked at the sidelines instead of
enforcing an evidentiary hearing. Id.
at 1066. This case is not only a vivid
cautionary tail, it contains a number of amusing balding jokes.)
Exposure of
In-House Counsel. Business entities
seldom sue in-house counsel. There are significant exceptions:
In-House Counsel. Business entities
seldom sue in-house counsel. There are significant exceptions:
1. after a takeover,
2. during receivership, FDIC v.
O’Melveny & Meyers, 61 F.3d 17 (9th Cir. 1995),
O’Melveny & Meyers, 61 F.3d 17 (9th Cir. 1995),
3. by the bankruptcy trustee,
4. in-house counsel is wealthy (or has
received huge stock bonuses), and/or
received huge stock bonuses), and/or
5. there is malpractice insurance. (Could the existence of malpractice insurance
encourage lawsuits?)
encourage lawsuits?)
Sometimes, a
lawyer who is in-house at a corporation might represent others. In Texas, the other entity must be a client,
but this representation can happen through pro bono activity, multiple
representations (whether accidental or mandated) or moonlighting (whether forbidden, permitted,
or mandated). Palmer v. Westmeyer,
of 549 N.E.2d 1202 (Ohio App. 1998). (In
this case, in-house counsel for an investment company defended an officer of
another company, precipitating a
malpractice action. Not much came of
it).
lawyer who is in-house at a corporation might represent others. In Texas, the other entity must be a client,
but this representation can happen through pro bono activity, multiple
representations (whether accidental or mandated) or moonlighting (whether forbidden, permitted,
or mandated). Palmer v. Westmeyer,
of 549 N.E.2d 1202 (Ohio App. 1998). (In
this case, in-house counsel for an investment company defended an officer of
another company, precipitating a
malpractice action. Not much came of
it).
1. This cannot be done in Texas, as
already indicated. Zuniga v. Groce,
Locke & Hebdon, 878 S.W.2d 313, 316 (Tex. App.–San Antonio 1994, writ
ref’d). The Texas rule is the majority rule.
However, a few jurisdictions do not subscribe to that rule. See Richter v. Analex Corp., 940 F.
Supp. 353, 357-58 (D.D.C. 1996). See
above.
already indicated. Zuniga v. Groce,
Locke & Hebdon, 878 S.W.2d 313, 316 (Tex. App.–San Antonio 1994, writ
ref’d). The Texas rule is the majority rule.
However, a few jurisdictions do not subscribe to that rule. See Richter v. Analex Corp., 940 F.
Supp. 353, 357-58 (D.D.C. 1996). See
above.
3. There are also choice-of-law
problems. Probably, if a state holds the
assignment of legal malpractice claims to be contrary to public policy, it will
apply its own law.
problems. Probably, if a state holds the
assignment of legal malpractice claims to be contrary to public policy, it will
apply its own law.
Courts and juries
bend over backwards to protect lawyers from multiple representations. Some of the decisions are even a little
implausible. The following two cases
involve outside counsel, but they could easily have involved inside counsel.
bend over backwards to protect lawyers from multiple representations. Some of the decisions are even a little
implausible. The following two cases
involve outside counsel, but they could easily have involved inside counsel.
1. Courts: Wagoner v. Snow, Becker, Kroll, Klaris
& Kraus, 991 F.2d 1501 (9th Cir. 1993) (advice from corporate attorney
to senior officer regarding preferred stock).
& Kraus, 991 F.2d 1501 (9th Cir. 1993) (advice from corporate attorney
to senior officer regarding preferred stock).
2. Jury:
Innes v. Howell Corp., 76 F.3d 702 (6th Cir. 1996) (corporate
counsel not lawyer for corporate officer).
Innes v. Howell Corp., 76 F.3d 702 (6th Cir. 1996) (corporate
counsel not lawyer for corporate officer).
Legal Theory: Inside corporate counsel can be sued for
anything for which outside counsel could be sued. Typical areas include late filings, poor
black-white/up-down advice, and document errors. Inside counsel have all the protections that
outside counsel have. Judgment errors
are not actionable. Bad advice in highly
complex areas is seldom subject to malpractice.
See Donald C. Langevoort and Robert K. Rasmussen, Skewing the
Results: The Role of Lawyers in
Transmitting Legal Rules, 5 S. Cal.
Interdisciplinary L. J. 375 (1997).
(“Hopefully we have demonstrated that (a) business lawyers have
multiple incentives to overstate risks, (b) institutional mechanisms are
unlikely to ameliorate these incentives completely, and (c) a host of
social and psychological influences create a plausibility structure that allows
individual lawyers to avoid feeling disloyal in so doing. In other words, the climatic conditions are
right for overstatement to break out with predictable frequency.” Id. at 436.)
anything for which outside counsel could be sued. Typical areas include late filings, poor
black-white/up-down advice, and document errors. Inside counsel have all the protections that
outside counsel have. Judgment errors
are not actionable. Bad advice in highly
complex areas is seldom subject to malpractice.
See Donald C. Langevoort and Robert K. Rasmussen, Skewing the
Results: The Role of Lawyers in
Transmitting Legal Rules, 5 S. Cal.
Interdisciplinary L. J. 375 (1997).
(“Hopefully we have demonstrated that (a) business lawyers have
multiple incentives to overstate risks, (b) institutional mechanisms are
unlikely to ameliorate these incentives completely, and (c) a host of
social and psychological influences create a plausibility structure that allows
individual lawyers to avoid feeling disloyal in so doing. In other words, the climatic conditions are
right for overstatement to break out with predictable frequency.” Id. at 436.)
a. Plaintiff must prove causation.
b. Attorney errors may be subject to
arbitration, given an appropriate agreement.
Adelman v. Marek, 1992 W.L. 131715 (S.D.N.Y. 1992).
arbitration, given an appropriate agreement.
Adelman v. Marek, 1992 W.L. 131715 (S.D.N.Y. 1992).
Federal courts can
sanction lawyers for lying and for making frivolous arguments under 28 U.S.C.
1927, which prohibits lawyers from proliferating litigation needlessly.
sanction lawyers for lying and for making frivolous arguments under 28 U.S.C.
1927, which prohibits lawyers from proliferating litigation needlessly.
Attorneys
appearing before courts are probably not entitled to as many due process
protections as they are entitled to in the grievance system. In the case just discussed, lawyers in
grievance proceedings are not entitled to as elaborate and extensive series of
due process protections as criminal defendants are. In one case, after studying the record, a
trial court sanctions two lawyers for their conduct. The lawyers were given notice of these
sanctions, but “they were not allowed at that time to offer explanations for
their conduct. However, [the lawyers,
who were also the] appellants[,] subsequently filed a motion for
reconsideration of the sanctions in support of their motion, with arguments,
affidavits, and other exhibits. [T]he
[j]udge. . .considered appellants as arguments and modified his
original order accordingly. Thus,
appellants were given the opportunity to fully brief the issue, to respond to
the court’s findings, and to demonstrate that their conduct was not undertaken
in bad faith. Where, as here, the judge
witnessed appellants’ sanctionable conduct, discussed appellants’ justifications
for violating a court order during two contempt proceedings, and considered
their written explanations for misconduct, a separate hearing was not
required.” Id. at 1120.
appearing before courts are probably not entitled to as many due process
protections as they are entitled to in the grievance system. In the case just discussed, lawyers in
grievance proceedings are not entitled to as elaborate and extensive series of
due process protections as criminal defendants are. In one case, after studying the record, a
trial court sanctions two lawyers for their conduct. The lawyers were given notice of these
sanctions, but “they were not allowed at that time to offer explanations for
their conduct. However, [the lawyers,
who were also the] appellants[,] subsequently filed a motion for
reconsideration of the sanctions in support of their motion, with arguments,
affidavits, and other exhibits. [T]he
[j]udge. . .considered appellants as arguments and modified his
original order accordingly. Thus,
appellants were given the opportunity to fully brief the issue, to respond to
the court’s findings, and to demonstrate that their conduct was not undertaken
in bad faith. Where, as here, the judge
witnessed appellants’ sanctionable conduct, discussed appellants’ justifications
for violating a court order during two contempt proceedings, and considered
their written explanations for misconduct, a separate hearing was not
required.” Id. at 1120.
37 See
Charles Fried, The Lawyer as Friend:
Moral Foundations of the Lawyer-Client Relation, Yale L.J. 85 (1975). This essay has been reprinted a number of
times and it is summarized in Chapter 7 of Charles Fried, Right and Wrong 179ff (1978). See Michael Davis and Frederick Elliston, Ethics and the Legal Profession 132-57
(1986).
Charles Fried, The Lawyer as Friend:
Moral Foundations of the Lawyer-Client Relation, Yale L.J. 85 (1975). This essay has been reprinted a number of
times and it is summarized in Chapter 7 of Charles Fried, Right and Wrong 179ff (1978). See Michael Davis and Frederick Elliston, Ethics and the Legal Profession 132-57
(1986).
38 For a
helpful manual on these matters, see American Bar Association, Section of
Business Law, Committee on Law Firms, Documenting
the Attorney-Client Relationship: Law
Firm Policies on Engagement, Termination, and Declination (1999). (Approximately half of this short study consists
of forms, and it contains a helpful diskette.)
helpful manual on these matters, see American Bar Association, Section of
Business Law, Committee on Law Firms, Documenting
the Attorney-Client Relationship: Law
Firm Policies on Engagement, Termination, and Declination (1999). (Approximately half of this short study consists
of forms, and it contains a helpful diskette.)
39 Manchester
v. Kentucky Bar Ass’n, 34 S.W.3d 808 (Ky. 2001) (public reprimand),
In re Strait, 540 S.E.2d 460 (S.C. 2000). In re McGee, 540 S.E.2d 607 (Ga. 2001)
(lawyer disbarred after a pattern of doing nothing for several clients). In re Shibley, 522 S.E.2d 812 (S.C.
1999); In re Dennis, 991 P.2d 394 (Kan. 1999). Ky. Bar Ass. v.
Zimmerman, 11 S.W.3d 47, 2000 WL 217714 (Ky. 2000); Florida Bar v.
Williams, 2000 WL 218146 (Fla. 2000); Okla. Bar Assoc. v. Hopkins,
995 P.2d 1153 (Okla. 2000); In re Williams, 527 S.E.2d 541 (Ga. 2000); In
re Peckham, 606 N.W.2d 170 (Wis. 2000); In re Gilbert, 748 So.2d 427
(La. 1999); In re Righter, 992 P.2d 1147 (Colo. 1999); Iowa Supreme
Court Bd. of Prof’l Ethics and Conduct v. Erbes, 604 N.W.2d 656 (Iowa
2000); Iowa Supreme Court Bd. of Pfor’l Ethics and Conduct v. Lemonski,
606 N.W.2d 11 (Iowa 2000); In re Baehr, 605 N.W.2d 523 (Wis. 2000); Columbus
Bar Assoc. v. Reed, 723 N.E.2d 568 (Ohio 2000); In re Nichols, 752
So.2d 153, 2000 WL 166056 (La. 2000); Attorney Grievance Comm’n
of MD v. Tolar, 745 A.2d 1045 (Md. 2000); Ky. Bar Assoc.
v. Stevenson, 19 S.W.3d 112 (Ky. 2000).
See Office of Disciplinary Counsel v. Dahling, 737 N.E.2d 25
(Ohio 2001) (lawyer failed to file bankruptcy cases or return retainers more
than 30 clients and was permanently disbarred).
Toledo Bar Ass’n v. Peters,
721 N.E.2d 26 (Ohio 1999); see In re Razo, 720 N.E.2d 719 (Ind. 1999) (pattern of neglect warranted a
three-year suspension with stringent conditions for readmission); In re
Powers, 744 So.2d 1275 (La. 1999) (neglect also warranted three-year
suspension); In re Lowe, 522 S.E.2d 652 (Ga. 1999) (pattern of client
abandonment, coupled with failure to refund client fees, justified disbarment);
In re Samsky, 522 S.E.2d 653 (Ga. 1999) (disbarment proper for attorney
who twice failed to file divorce papers after accepting fees from
clients). A Lesson Even the Dumbest Lawyer Draw From the Many Many Cases
Cited in Support of the Maxim: “For
Heaven’s Sakes, Act Promptly!”
v. Kentucky Bar Ass’n, 34 S.W.3d 808 (Ky. 2001) (public reprimand),
In re Strait, 540 S.E.2d 460 (S.C. 2000). In re McGee, 540 S.E.2d 607 (Ga. 2001)
(lawyer disbarred after a pattern of doing nothing for several clients). In re Shibley, 522 S.E.2d 812 (S.C.
1999); In re Dennis, 991 P.2d 394 (Kan. 1999). Ky. Bar Ass. v.
Zimmerman, 11 S.W.3d 47, 2000 WL 217714 (Ky. 2000); Florida Bar v.
Williams, 2000 WL 218146 (Fla. 2000); Okla. Bar Assoc. v. Hopkins,
995 P.2d 1153 (Okla. 2000); In re Williams, 527 S.E.2d 541 (Ga. 2000); In
re Peckham, 606 N.W.2d 170 (Wis. 2000); In re Gilbert, 748 So.2d 427
(La. 1999); In re Righter, 992 P.2d 1147 (Colo. 1999); Iowa Supreme
Court Bd. of Prof’l Ethics and Conduct v. Erbes, 604 N.W.2d 656 (Iowa
2000); Iowa Supreme Court Bd. of Pfor’l Ethics and Conduct v. Lemonski,
606 N.W.2d 11 (Iowa 2000); In re Baehr, 605 N.W.2d 523 (Wis. 2000); Columbus
Bar Assoc. v. Reed, 723 N.E.2d 568 (Ohio 2000); In re Nichols, 752
So.2d 153, 2000 WL 166056 (La. 2000); Attorney Grievance Comm’n
of MD v. Tolar, 745 A.2d 1045 (Md. 2000); Ky. Bar Assoc.
v. Stevenson, 19 S.W.3d 112 (Ky. 2000).
See Office of Disciplinary Counsel v. Dahling, 737 N.E.2d 25
(Ohio 2001) (lawyer failed to file bankruptcy cases or return retainers more
than 30 clients and was permanently disbarred).
Toledo Bar Ass’n v. Peters,
721 N.E.2d 26 (Ohio 1999); see In re Razo, 720 N.E.2d 719 (Ind. 1999) (pattern of neglect warranted a
three-year suspension with stringent conditions for readmission); In re
Powers, 744 So.2d 1275 (La. 1999) (neglect also warranted three-year
suspension); In re Lowe, 522 S.E.2d 652 (Ga. 1999) (pattern of client
abandonment, coupled with failure to refund client fees, justified disbarment);
In re Samsky, 522 S.E.2d 653 (Ga. 1999) (disbarment proper for attorney
who twice failed to file divorce papers after accepting fees from
clients). A Lesson Even the Dumbest Lawyer Draw From the Many Many Cases
Cited in Support of the Maxim: “For
Heaven’s Sakes, Act Promptly!”
40 Bamberger
v. Kentucky Bar Ass’n, 36 S.W.3d 758 (Ky. 2001). In
re Taylor, 770 So.2d 335 (La. 2000).
Neglect when combined with a failure to communicate with a client is
also highly problematic. If a lawyer
willfully abandons a matter that is even worse yet. In re Childers, 540 S.E.2d 606 (Ga. 2001); In re O’Day,
539 S.E.2d 390 (S.C. 2000), and In re Rollins-Woods, 539 S.E.2d 60 (S.C.
2000).
v. Kentucky Bar Ass’n, 36 S.W.3d 758 (Ky. 2001). In
re Taylor, 770 So.2d 335 (La. 2000).
Neglect when combined with a failure to communicate with a client is
also highly problematic. If a lawyer
willfully abandons a matter that is even worse yet. In re Childers, 540 S.E.2d 606 (Ga. 2001); In re O’Day,
539 S.E.2d 390 (S.C. 2000), and In re Rollins-Woods, 539 S.E.2d 60 (S.C.
2000).
42 It should not come as any great surprise that
the ACTEC Commentaries are
completely contemptuous of this decision.
ACTEC-6. For a comprehensive
account of the Texas law of legal malpractice, see David Beck, Legal
Malpractice In Texas (Second Edition),
50 Baylor L. Rev. 547 (1998). Charles Herring, Texas Legal Malpractice & Lawyer Discipline (2d Ed.
1998). See also Ronald Mallen and Jeffrey M. Smith, Legal Malpractice
(4th Ed. 1996) (an authoritative, oft-cited four-volume affair covering all
states). Obviously, other states have
rich jurisprudences of malpractice. See
Seibert v. Nusbaum, Stein, Goldstein, Bronstein & Compeaux, P.A., 167
F.3d 166 (3d Cir. 1999) (malpractice for unauthorized settlement); Arena
Football League, Inc. v. Roemer, 9 F.Supp.2d 889 (N.D. Ill. 1998)
(professional indoor football league sued its outside general counsel for
malpractice and breach of fiduciary duties in connection with procuring
workers’ compensation insurance). See
also Ray Ryder Anderson & Walter W. Steele, Jr., Fiduciary Duty,
Tort and Contract: A Primer on the Legal
Malpractice Puzzle, 47 SMU L. Rev.
235 (1994).
the ACTEC Commentaries are
completely contemptuous of this decision.
ACTEC-6. For a comprehensive
account of the Texas law of legal malpractice, see David Beck, Legal
Malpractice In Texas (Second Edition),
50 Baylor L. Rev. 547 (1998). Charles Herring, Texas Legal Malpractice & Lawyer Discipline (2d Ed.
1998). See also Ronald Mallen and Jeffrey M. Smith, Legal Malpractice
(4th Ed. 1996) (an authoritative, oft-cited four-volume affair covering all
states). Obviously, other states have
rich jurisprudences of malpractice. See
Seibert v. Nusbaum, Stein, Goldstein, Bronstein & Compeaux, P.A., 167
F.3d 166 (3d Cir. 1999) (malpractice for unauthorized settlement); Arena
Football League, Inc. v. Roemer, 9 F.Supp.2d 889 (N.D. Ill. 1998)
(professional indoor football league sued its outside general counsel for
malpractice and breach of fiduciary duties in connection with procuring
workers’ compensation insurance). See
also Ray Ryder Anderson & Walter W. Steele, Jr., Fiduciary Duty,
Tort and Contract: A Primer on the Legal
Malpractice Puzzle, 47 SMU L. Rev.
235 (1994).
43 Suppose
the government offers C a deal through L, C’s lawyer: one year in exchange for a guilty plea to one
count. Suppose L does not tell C
about the offer. Suppose C goes
to trial and receives ten years on three separate counts. Suppose further that it is demonstrable that C
would have pled guilty had L told C about the offer. It seems to me that L may have been
negligent and has proximately caused C to suffer. But what has C suffered? Deserved confinement? Loss of income? In many states, negligence actions will not
lie for economic losses only. Still, the
rule in Peeler seems wrong.
Nevertheless, other jurisdictions follow it. Rodriguez v. Nielsen, 609 N.W.2d 368 (Neb.
2000).
the government offers C a deal through L, C’s lawyer: one year in exchange for a guilty plea to one
count. Suppose L does not tell C
about the offer. Suppose C goes
to trial and receives ten years on three separate counts. Suppose further that it is demonstrable that C
would have pled guilty had L told C about the offer. It seems to me that L may have been
negligent and has proximately caused C to suffer. But what has C suffered? Deserved confinement? Loss of income? In many states, negligence actions will not
lie for economic losses only. Still, the
rule in Peeler seems wrong.
Nevertheless, other jurisdictions follow it. Rodriguez v. Nielsen, 609 N.W.2d 368 (Neb.
2000).
45 18
U.S.C. § 1962(c) provides that “[i]t shall be unlawful for any person employed
by or associated with any enterprise engaged in, or the activities of which
affect, interstate or foreign commerce, to conduct or participate, directly or
indirectly, in the conduct of such enterprise’s affairs through a pattern of
racketeering activity or collection of unlawful debt.”
U.S.C. § 1962(c) provides that “[i]t shall be unlawful for any person employed
by or associated with any enterprise engaged in, or the activities of which
affect, interstate or foreign commerce, to conduct or participate, directly or
indirectly, in the conduct of such enterprise’s affairs through a pattern of
racketeering activity or collection of unlawful debt.”
48 United
States v. Frega, 179 F.3d 793 (9th Cir. 1999); Handeen v. LeMaire,
112 F.3d 1339 (8th Cir. 1997); Edmondson & Gallagher v. Alban
Towers Tenants Association, 48 F.3d 1260 (D.C. Cir. 1995); McDonald v.
Schencker, 18 F.3d 491 (7th Cir. 1994); Baumer v. Pachl, 8 F.3d 1341
(9th Cir. 1993); Weil v. Long Island Savings Bank, 77 F.Supp.2d 313
(E.D.N.Y. 1999); Madanes v. Madanes, 981 F.Supp. 241 (S.D.N.Y. 1997);
Congregacion de la Mision Provincia de Venezuela v. Curi, 978 F.Supp. 435
(E.D.N.Y. 1997); Turkish v. Kasenetz, 964 F.Supp. 689 (E.D.N.Y. 1997); Mason
Tenders District Council Pension Fund v. Messera, 958 F.Supp. 869 (S.D.N.Y.
1997); BCCI Holdings (Luxembourg) S.A. v. Clifford, 964 F.Supp. 468 (D.D.C.
1997); In re American Honda Motor Co., Inc. Dealerships Relations
Litigation, 941 F.Supp. 528 (D.Md. 1996); Krehling v. Baron, 900 F.Supp. 1574
(M.D.Fla. 1995); D’Orange v. Feely, 877 F.Supp. 152 (S.D.N.Y. 1995); Mathon v.
Marine Midland Bank, N.A., 875 F.Supp. 986 (E.D.N.Y. 1995); Streck v. Peters,
855 F.Supp. 1156 (D.Hawai’i 1994); Crowe v. Smith, 848 F.Supp. 1258 (W.D.La.
1994); Niccum v. Meyer, 171 B.R. 828 (N.D.Ill. 1994); Morin v. Trupin, 835
F.Supp. 126 (S.D.N.Y. 1993); In re Cascade Int’l Securities Litigation,
840 F.Supp. 1558 (S.D.Fla. 1993); Biofeedtrac, Inc. v. Kolinor Optical
Enterprises & Consultants, S.R.L., 832 F.Supp. 585 (E.D.N.Y. 1993); Yoder
Grain, Inc. v. Antalis, 722 N.E.2d 840 (Ind.App. 2000); Siragusa v. Brown, 971
P.2d 801 (Nev. 1999).
States v. Frega, 179 F.3d 793 (9th Cir. 1999); Handeen v. LeMaire,
112 F.3d 1339 (8th Cir. 1997); Edmondson & Gallagher v. Alban
Towers Tenants Association, 48 F.3d 1260 (D.C. Cir. 1995); McDonald v.
Schencker, 18 F.3d 491 (7th Cir. 1994); Baumer v. Pachl, 8 F.3d 1341
(9th Cir. 1993); Weil v. Long Island Savings Bank, 77 F.Supp.2d 313
(E.D.N.Y. 1999); Madanes v. Madanes, 981 F.Supp. 241 (S.D.N.Y. 1997);
Congregacion de la Mision Provincia de Venezuela v. Curi, 978 F.Supp. 435
(E.D.N.Y. 1997); Turkish v. Kasenetz, 964 F.Supp. 689 (E.D.N.Y. 1997); Mason
Tenders District Council Pension Fund v. Messera, 958 F.Supp. 869 (S.D.N.Y.
1997); BCCI Holdings (Luxembourg) S.A. v. Clifford, 964 F.Supp. 468 (D.D.C.
1997); In re American Honda Motor Co., Inc. Dealerships Relations
Litigation, 941 F.Supp. 528 (D.Md. 1996); Krehling v. Baron, 900 F.Supp. 1574
(M.D.Fla. 1995); D’Orange v. Feely, 877 F.Supp. 152 (S.D.N.Y. 1995); Mathon v.
Marine Midland Bank, N.A., 875 F.Supp. 986 (E.D.N.Y. 1995); Streck v. Peters,
855 F.Supp. 1156 (D.Hawai’i 1994); Crowe v. Smith, 848 F.Supp. 1258 (W.D.La.
1994); Niccum v. Meyer, 171 B.R. 828 (N.D.Ill. 1994); Morin v. Trupin, 835
F.Supp. 126 (S.D.N.Y. 1993); In re Cascade Int’l Securities Litigation,
840 F.Supp. 1558 (S.D.Fla. 1993); Biofeedtrac, Inc. v. Kolinor Optical
Enterprises & Consultants, S.R.L., 832 F.Supp. 585 (E.D.N.Y. 1993); Yoder
Grain, Inc. v. Antalis, 722 N.E.2d 840 (Ind.App. 2000); Siragusa v. Brown, 971
P.2d 801 (Nev. 1999).
50 Generally,
an attorney’s provision of legal services does not constitute “operation or
management” of the alleged enterprise as required by 18 U.S.C. 1962(c). Turkish v. Kasenetz, 964 F.Supp. 689, 694
(E.D.N.Y. 1997). “This is true even
where an attorney’s advice facilitates a client’s fraudulent scheme or assists
in its concealment.” Id. “But
where a lawyer’s actions are unrelated to representation of a client or
demonstrate a direct and independent role in the affairs of the enterprise,
such attorney may be held liable under RICO.
Id.
an attorney’s provision of legal services does not constitute “operation or
management” of the alleged enterprise as required by 18 U.S.C. 1962(c). Turkish v. Kasenetz, 964 F.Supp. 689, 694
(E.D.N.Y. 1997). “This is true even
where an attorney’s advice facilitates a client’s fraudulent scheme or assists
in its concealment.” Id. “But
where a lawyer’s actions are unrelated to representation of a client or
demonstrate a direct and independent role in the affairs of the enterprise,
such attorney may be held liable under RICO.
Id.
51 Liability
may arise where a lawyer advises the client on how to carry out a scheme
without detection, Biofeedtrac v. Kolinor Optical Enterprises, 832 F.Supp. 585,
589 (E.D.N.Y. 1993); where a lawyer mails fraudulent letters, Crowe v. Smith,
848 F.Supp. 1258, 1264 (W.D.La. 1994), but
see D’Orange v. Feely, 877 F.Supp. 152, 156 (S.D.N.Y. 1995)(holding that
attorney’s mailing of client’s fraudulent letters cannot be considered
predicate acts because they constitute legitimate conduct of attorneys acting
on behalf of client in course of pending litigation); and where the attorney
sits on the board of directors for the RICO enterprise and oversees fraudulent
activities, In re American Honda Motor Co., Inc. Dealerships Relations
Litigation, 941 F.Supp. 528, 560 (D.Md. 1996)(holding sufficient pleadings
which allege attorneys’ direct management role as paid directors).
may arise where a lawyer advises the client on how to carry out a scheme
without detection, Biofeedtrac v. Kolinor Optical Enterprises, 832 F.Supp. 585,
589 (E.D.N.Y. 1993); where a lawyer mails fraudulent letters, Crowe v. Smith,
848 F.Supp. 1258, 1264 (W.D.La. 1994), but
see D’Orange v. Feely, 877 F.Supp. 152, 156 (S.D.N.Y. 1995)(holding that
attorney’s mailing of client’s fraudulent letters cannot be considered
predicate acts because they constitute legitimate conduct of attorneys acting
on behalf of client in course of pending litigation); and where the attorney
sits on the board of directors for the RICO enterprise and oversees fraudulent
activities, In re American Honda Motor Co., Inc. Dealerships Relations
Litigation, 941 F.Supp. 528, 560 (D.Md. 1996)(holding sufficient pleadings
which allege attorneys’ direct management role as paid directors).
52 See, e.g.,
D’Orange v. Feely, 894 F.Supp. 159 (S.D.N.Y. 1995)(assessing RICO civil damages
against attorney who embezzled funds client entrusted to him pursuant to power
of attorney and as executor of estate), and Thomas v. Ross &
Hardies, 9 F.Supp.2d 547 (D.Md. 1998)(holding sufficient to state RICO claim
allegations that attorney persuaded homeowners to buy into fraudulent mortgage
scheme, and holding that law partnership may be liable under RICO for partner’s
actions within the scope of corporate representation).
D’Orange v. Feely, 894 F.Supp. 159 (S.D.N.Y. 1995)(assessing RICO civil damages
against attorney who embezzled funds client entrusted to him pursuant to power
of attorney and as executor of estate), and Thomas v. Ross &
Hardies, 9 F.Supp.2d 547 (D.Md. 1998)(holding sufficient to state RICO claim
allegations that attorney persuaded homeowners to buy into fraudulent mortgage
scheme, and holding that law partnership may be liable under RICO for partner’s
actions within the scope of corporate representation).
53 Stanley
Pietrusiak, Jr., Changing the Nature of Corporate Representation: Attorney Liability for Aiding and Abetting
the Breach of Fiduciary Duty, 28 St.
Mary’s L. J. 213 (1966). See
Donald C. Langevoort, Where Were the Lawyers? A Behavioral Inquiry Into Lawyers’
Responsibility for Clients’ Fraud, 46 Vand.
L. Rev. 75 (1993).
Pietrusiak, Jr., Changing the Nature of Corporate Representation: Attorney Liability for Aiding and Abetting
the Breach of Fiduciary Duty, 28 St.
Mary’s L. J. 213 (1966). See
Donald C. Langevoort, Where Were the Lawyers? A Behavioral Inquiry Into Lawyers’
Responsibility for Clients’ Fraud, 46 Vand.
L. Rev. 75 (1993).
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