In Credit Union Cent. Falls v. Groff, 966 A.2d 1262 (R.I., 2009) the attorney misappropriated funds in connection with two real estate closings. The court addressed the issue of whether the former attorney owed a duty of care to the credit union. The court held that since it was uncontested that the former attorney misappropriated loan proceeds, the credit union was entitled to recover on its claim of attorney malpractice.
Mr. Groff was acting as closing attorney for real estate transactions involving Credit Union Central Falls customers. The credit union provided Mr. Groff with a check in the attorney’s name to discharge two existing mortgages to ensure the priority of the credit union mortgage. Mr. Groff did not pay off the previous mortgages but made monthly payments on the prior loans to conceal their continued existence and instead used the money for personal ends.
Rhode Island ethical codes permit multiple representation if there is full disclosure, the clients consent in writing, and the attorney reasonably believes there will be no harm to either client. Although Mr. Groff was representing the credit union’s customers for these real estate transactions, Mr. Groff had a deep financial interest in maintaining a good relationship with the credit union and much of the closing attorney’s duties were directly intended to benefit the credit union. In McIntosh County Bank v. Dorsey &Whitney, LLP, 745 N.W.2d 538, 547 (Minn. 2008), the court reaffirmed its rule of law “that in order for a third party to proceed in a legal malpractice action, the party must be a direct and intended beneficiary of the attorney’s services.” It also went on to state that “the benefit to the third party must be ‘the end and aim of the transaction’ before the beneficiary may be called direct.” In this case, Mr. Groff was required to ensure that the credit union’s mortgage had priority and the borrowers authorized Mr. Groff to satisfy the credit union’s loan requirements. Therefore, the court found that the credit union, if not a client, was at the very least an intended beneficiary of the contractual obligations between Mr. Groff and the borrowers, and as such, the attorney owed the credit union a duty of care.
The court found in the credit union’s favor and that they are entitled to recover on its claim of attorney malpractice for Mr. Groff’s flagrant breach of his duty to use “ordinary care and skill” in the exercise of his profession. The court found summary judgment in favor of Credit Union Central Falls.
Wednesday, March 3, 2010
Minnesota: Lawyer Suspended After Leaving State for Professional Misconduct
In In re Sungtaek Cho, 764 N.W.2d20, (Minn 2009) the Minnesota Supreme Court suspended Sungtaek Cho from the practice of law for profession misconduct which included the neglect of client matters, failure to communicate with clients and failure to cooperate with the Director of the Office of Lawyer Professional Responsibility’s investigation.
The Minnesota Supreme Court affirmed that the lawyer was in violation of Minn. Rules of Professional Conduct 1.1, 1.3, 1.4 which dealt with attorney client relationship and 8.1(b) which deals with disciplinary matters. The lawyer was also in violation Rule 25, Rules on Lawyers Professional Responsibility (RLPR).
The lawyer also could not be found in the state or served personally with the petition for disciplinary action that was filed on October 5, 2007. The Minn. Supreme Court allows the lawyer one year to move from vacation of the order and for leave to answer the disciplinary petition. If the lawyer fails to appear within one year the allegations in the petition for disciplinary action would be admitted.
This case teaches the importance of a lawyers duty to their clients. Under Minn. Rules of Professional Conduct 1.1,1.3, and 1.4 a lawyer shall “provide competent representation to a client which requires legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation”, “shall act with reasonable diligence and promptness in representing a client” and a lawyer “shall communicate with their client”. If this is not done disciplinary action may result.
The Minnesota Supreme Court affirmed that the lawyer was in violation of Minn. Rules of Professional Conduct 1.1, 1.3, 1.4 which dealt with attorney client relationship and 8.1(b) which deals with disciplinary matters. The lawyer was also in violation Rule 25, Rules on Lawyers Professional Responsibility (RLPR).
The lawyer also could not be found in the state or served personally with the petition for disciplinary action that was filed on October 5, 2007. The Minn. Supreme Court allows the lawyer one year to move from vacation of the order and for leave to answer the disciplinary petition. If the lawyer fails to appear within one year the allegations in the petition for disciplinary action would be admitted.
This case teaches the importance of a lawyers duty to their clients. Under Minn. Rules of Professional Conduct 1.1,1.3, and 1.4 a lawyer shall “provide competent representation to a client which requires legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation”, “shall act with reasonable diligence and promptness in representing a client” and a lawyer “shall communicate with their client”. If this is not done disciplinary action may result.
Minnesota: Dual Representation
In Commonwealth v. Brown, 972 A.2d 529 (Minn. 2009), the court reversed and remanded the appeal of defendant Brown for a petition on post conviction relief based on claim of ineffective assistance of counsel due to conflict of interest when the trial court denied it.
Brown was not aware his attorney also represented the codefendant Bryant. Brown was told Bryant will testify against him and he was convinced to plead guilty for all counts of robbery, criminal conspiracy, and delivery of controlled substance. Brown was sentence to a ten to twenty year incarceration. The standard for an attorney’s ethical obligation is stated in the ABA Code under section 5-16 that the attorney must reveal and explain to each client the pros and cons of the same legal counsel representation.
However, the burden of proof lies in the party seeking the claim. The party does not have to show or prove actual harm but just the “possibility of harm” due to the dual representation. In this particular case, Brown received a lesser sentence than Bryant. The Court does not have the actual evidence to dispute that. Therefore, the court reversed the decision for Brown’s appeal and is remanding a hearing for Brown. The hearing is to determine whether the representation was ineffective which would “require the withdrawal of Brown’s plea.”
Brown was not aware his attorney also represented the codefendant Bryant. Brown was told Bryant will testify against him and he was convinced to plead guilty for all counts of robbery, criminal conspiracy, and delivery of controlled substance. Brown was sentence to a ten to twenty year incarceration. The standard for an attorney’s ethical obligation is stated in the ABA Code under section 5-16 that the attorney must reveal and explain to each client the pros and cons of the same legal counsel representation.
However, the burden of proof lies in the party seeking the claim. The party does not have to show or prove actual harm but just the “possibility of harm” due to the dual representation. In this particular case, Brown received a lesser sentence than Bryant. The Court does not have the actual evidence to dispute that. Therefore, the court reversed the decision for Brown’s appeal and is remanding a hearing for Brown. The hearing is to determine whether the representation was ineffective which would “require the withdrawal of Brown’s plea.”
Pennsylvania: Lawyer’s suspension vacated by the Supreme Court of Pennsylvania
In Re Counsel v. Debbie Ann Carlitz, 1336 No. 131 DB 2007. (March 26, 2008)
Following the submission to the Supreme Court of a Joint Petition in Support of Discipline, Debbie Ann Carlitz was suspended on consent for a period of one year and one day by Order of the Court dated March 26, 2008 according to the Disciplinary Board Rules Rule 277 Pa EE §§ 91.91-91.91 of. Petitioner requested review of this matter as she claimed that she did not enter into the consent discipline knowingly, freely or voluntarily. By Order of May 11, 2009, the Court remanded the matter for an evidentiary hearing. Office of Disciplinary Counsel and Respondent entered into Joint Stipulations of Fact and Law on August 27, 2009. The Hearing Committee accepted the Stipulations and based on the information contained therein, recommended that the Suspension Order be vacated and the matter remanded. The Joint Stipulations of Fact and Law support the finding that Respondent did not personally endorse the Joint Petition in Support of Discipline or expressly authorize anyone to sign the Joint Petition on her behalf. It is clear that Bonnie Sweeten, Respondent's paralegal, handled all aspects of the consent discipline and never revealed the circumstances to Respondent. Respondent remained ignorant of her suspended status until it was pointed out to her by a colleague. For these reasons, the Board recommends that the Suspension Order at 131DB 2007 be vacated and the matter remanded to the Office of Disciplinary Counsel for further consideration.
This case teaches the importance of the lawyer’s duty under Pa R.D.E. Rule 215 (e) and 215 (g) that states that an attorney has an affirmative duty to know the status of his privilege to practice law and comply with professional requirements in Re Anonymous No 123 DB 1996 (Simon Belli,111), 41 Pa.D. & C. 4th 290,299-300(1998). An attorney cannot continue practicing law after being transferred to inactive status for failing to fulfill continuing legal education requirements. An attorney must enter into the consent discipline knowingly, freely or voluntarily.
Following the submission to the Supreme Court of a Joint Petition in Support of Discipline, Debbie Ann Carlitz was suspended on consent for a period of one year and one day by Order of the Court dated March 26, 2008 according to the Disciplinary Board Rules Rule 277 Pa EE §§ 91.91-91.91 of. Petitioner requested review of this matter as she claimed that she did not enter into the consent discipline knowingly, freely or voluntarily. By Order of May 11, 2009, the Court remanded the matter for an evidentiary hearing. Office of Disciplinary Counsel and Respondent entered into Joint Stipulations of Fact and Law on August 27, 2009. The Hearing Committee accepted the Stipulations and based on the information contained therein, recommended that the Suspension Order be vacated and the matter remanded. The Joint Stipulations of Fact and Law support the finding that Respondent did not personally endorse the Joint Petition in Support of Discipline or expressly authorize anyone to sign the Joint Petition on her behalf. It is clear that Bonnie Sweeten, Respondent's paralegal, handled all aspects of the consent discipline and never revealed the circumstances to Respondent. Respondent remained ignorant of her suspended status until it was pointed out to her by a colleague. For these reasons, the Board recommends that the Suspension Order at 131DB 2007 be vacated and the matter remanded to the Office of Disciplinary Counsel for further consideration.
This case teaches the importance of the lawyer’s duty under Pa R.D.E. Rule 215 (e) and 215 (g) that states that an attorney has an affirmative duty to know the status of his privilege to practice law and comply with professional requirements in Re Anonymous No 123 DB 1996 (Simon Belli,111), 41 Pa.D. & C. 4th 290,299-300(1998). An attorney cannot continue practicing law after being transferred to inactive status for failing to fulfill continuing legal education requirements. An attorney must enter into the consent discipline knowingly, freely or voluntarily.
Oklahoma: Lawyer suspended for billing clients with false expenses
The Oklahoma bar association filed a complaint against a lawyer that violated the Oklahoma professional conduct in State ex rel. Okla. bar Ass'n v. Pacenza, 2006 OK 23, 136 P.3d 616. The Lawyer billed clients for travel expenses that she did not incur and work expenses that she did not do for the clients. The lawyer also explained that she was under stress when she billed clients for work she did not do, being that she was unable to spend as much time with her family. An employee figured out she was billing clients wrong when they found discrepancies in their records. The lawyer did say she felt bad but also called it a bad judgment call and wanted to spend time with her children but did not want to ask the law firm for time off. Did the lawyer violate Oklahoma professional conduct when billing clients for travel fees and work that was not real? Yes, she did not travel for clients or work on client cases even though she billed clients. The court also agreed that stress was not a reason for violating the Oklahoma professional code and for being dishonest. The lawyer violated the Oklahoma professional conduct 1.5, 1.15, 8.4(a), 8.4(b), 8.4(c), and Rule 1.3 of the Rules Governing Disciplinary Proceedings. The Oklahoma tribunal found the lawyer guilty and suspended her from working for a period of twelve months, receive psychological treatment, and to pay court proceedings. According to Oklahoma law the lawyer will have to inform clients if he or she is being suspended. The lawyer ended up having to pay 948.24 in ninety days from the day the opinion was stated.
The Oklahoma bar association also took action when the lawyer involved in this case was dishonest and his integrity tested. The lawyer didn’t tell his clients about a 300,000.000 tax lien on a property that they had bought, even after the clients made improvements to the property. A six month suspension was suggested but the courts decided to suspend the lawyer for two years and one day. Unfortunately there are a lot of cases like this. Many lawyers make mistakes if they intend to or not.
The Oklahoma bar association also took action when the lawyer involved in this case was dishonest and his integrity tested. The lawyer didn’t tell his clients about a 300,000.000 tax lien on a property that they had bought, even after the clients made improvements to the property. A six month suspension was suggested but the courts decided to suspend the lawyer for two years and one day. Unfortunately there are a lot of cases like this. Many lawyers make mistakes if they intend to or not.
Nebraska: Lawyer Disbarred for Failure to use the Attorney Trust Account
In State ex rel. NSBA v. Gallner, 263 Neb. 135, 638 N.W.2d 819 (2002), the Nebraska Supreme Court disbarred a lawyer from practicing law in the State of Nebraska, held in contempt of court and ordered to pay all costs associated with his failure to use an Attorney Trust Account and provide documentation for the monies from his client’s personal injury claim that was to be used to satisfy a physician’s lien. The lawyer failed to place the settlement proceeds for the physician’s lien into an Attorney Trust Account, and failed and refused to satisfy the lien.
The Nebraska Supreme Court affirmed the referee’s conclusions that the lawyer’s conduct violated several disciplinary and trust account rules and his oath of office as an attorney, in violation of DR 1-102(A)(1), (4), and (6); DR 6-101(A)(3); DR 9-102(A); Neb. Ct. R. of Discipline 9(E); and Neb. Ct. R. of Trust Accounts and Blanket Bonds 1 and 4.
The lawyer did not dispute or file a written exception to the referee’s report, and the relator filed a motion for judgment on the pleadings, under Neb. Ct. R. of Discipline 10(L) (rev. 2001). When no exceptions are filed, the Nebraska Supreme Court may consider the referee’s findings final and conclusive. See State ex rel. Counsel for Dis. V. Apker, 263 Neb. 741, 642 N.W.2d 162 (2002).
This case shows the importance of the lawyer’s duty under Rule 1.15 (a) that states a lawyer shall “hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property. Funds shall be kept in a separate account…with consent of the client or third person.” In addition, Rule 1.15 (d) states that “upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person…a lawyer shall promptly deliver to the client or third person any funds or property that the client or third person is entitled to receive.”
The Nebraska Supreme Court affirmed the referee’s conclusions that the lawyer’s conduct violated several disciplinary and trust account rules and his oath of office as an attorney, in violation of DR 1-102(A)(1), (4), and (6); DR 6-101(A)(3); DR 9-102(A); Neb. Ct. R. of Discipline 9(E); and Neb. Ct. R. of Trust Accounts and Blanket Bonds 1 and 4.
The lawyer did not dispute or file a written exception to the referee’s report, and the relator filed a motion for judgment on the pleadings, under Neb. Ct. R. of Discipline 10(L) (rev. 2001). When no exceptions are filed, the Nebraska Supreme Court may consider the referee’s findings final and conclusive. See State ex rel. Counsel for Dis. V. Apker, 263 Neb. 741, 642 N.W.2d 162 (2002).
This case shows the importance of the lawyer’s duty under Rule 1.15 (a) that states a lawyer shall “hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property. Funds shall be kept in a separate account…with consent of the client or third person.” In addition, Rule 1.15 (d) states that “upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person…a lawyer shall promptly deliver to the client or third person any funds or property that the client or third person is entitled to receive.”
Mississippi: Lawyer guilty of alienation of affection, breach of contract, and intentional infliction of emotional distress
In In re Pierce v. Cook, 992 So. 2d 612; (Miss. 2008), the Mississippi Rankin County Circuit Court found in favor of the plaintiff, Ernest Allen Cook, and awarded him $1,500,000 in damages. The court found the defendant, Ronald Henry Pierce guilty of alienation of affection, breach of contract, and intentional infliction of emotional distress after.
In the fall of 1997 Ernest Allen Cook Sr., wife Kathleen Susan Shorkey Cook, and minor son Ernest Allen Cook Jr., appointed attorney Ronald Henry Price to represent them in a medical mal-practice suit. In June 2003, Cook moved to California to pursue a career in the film industry. His wife and children stayed at their home in Mississippi. Cook frequently visited but despite the efforts Cook and Kathleen separated and ceased cohabitation in September 2000. Pierce was still representing them on the medical mal-practice case at this time. Around September 30, 2000, Pierce began an intimate relationship with Kathleen. October 2000 is when Cook became aware of this relationship and terminated Pierce as his attorney. June 3, 2002 Cook was granted a divorce from Kathleen. Soon after, Kathleen and Pierce were married and had a child together.
December 23, 2002, Cook filed a complaint against Pierce in the Circuit Court of Rankin County. He was accusing Pierce of alienation of affection, breach of contract, and intentional infliction of emotional distress. This was based on Pierce’s affair with Kathleen. June 20-23, 2006, the trial was held in Rankin County Circuit Court, presiding was Judge Samac S. Richardson. The Jury decided in Cook’s favor, against Pierce, and entered a judgment awarded to Cook in the amount of $1,500,000, June 7, 2006. Pierce went on to file a motion on September 27, 2006 for a new trial. The court denied it.
On October 25, 2006, Pierce appealed the trial court’s decision. In the matter of breach of contract, Pierce claimed that Cook needed to have sufficient testimony to prove malpractice. Hickox v. Holleman, 502 So. 2d 626, 635 (Miss. 1987). However, Cook stated he did not sue for malpractice but breach of fiduciary duty owed to him. It was found that Pierce had committed malpractice but in Byrd, 933 So. 899, 904 (Miss. 2006), there were some exceptions laid out for expert testimony. “The attorney who finds himself the defendant in a legal malpractice case, however, has a judge and the trial attorneys who are already experts.” So, Cook did not need expert testimony, he already had experts involved in the case. Another good point to bring up is that ordinary jurors have a normal level of intelligence and lay expertise to determine if an attorney has an affair with his clients husband is a breach of duty, and expert testimony would not lend guidance on this situation. The court found this issue without merit.
Pierce also appealed stating that Cook did not follow the statute of limitations. According to Smith v. Sneed, 638 So. 2d 1252, 1255 (Miss. 1994), in a continuing tort the statute of limitations does not begin until the date of the last injury. Cook’s divorce was granted June 3, 2002 and he filed the claim on December 23, 2002, so it was with-in the one year statute of limitation. Stevens v Lake, 615 So. 2d 1177, 1183 (Miss. 1993) it was decided that the continuing tort doctrine must have continuing incidences occurring after the initial incident. This is the case for Cook. Pierce took Kathleen on a trip to New Orleans, and they had sexual relations. Pierce flaunted his involvement with Kathleen in a local restraint in Jackson. There is also a tape of Pierce coaching Kathleen of what to say to Cook. Pierce called Cook on his Birthday to apologize for the situation with Kathleen. The Trail Court did not find err in the statute of limitations because of these events, until the divorce, and Cook did file with-in the statute of limitation. For these reasons the court found this issue to be without merit also.
“For the reasons stated in the Rankin County Circuit Court judgment entered consistent with the jury verdict against Ronald Henry Price and in favor of Ernest Allen Cook Sr., in the amount of $1,500,000, is affirmed.
In the fall of 1997 Ernest Allen Cook Sr., wife Kathleen Susan Shorkey Cook, and minor son Ernest Allen Cook Jr., appointed attorney Ronald Henry Price to represent them in a medical mal-practice suit. In June 2003, Cook moved to California to pursue a career in the film industry. His wife and children stayed at their home in Mississippi. Cook frequently visited but despite the efforts Cook and Kathleen separated and ceased cohabitation in September 2000. Pierce was still representing them on the medical mal-practice case at this time. Around September 30, 2000, Pierce began an intimate relationship with Kathleen. October 2000 is when Cook became aware of this relationship and terminated Pierce as his attorney. June 3, 2002 Cook was granted a divorce from Kathleen. Soon after, Kathleen and Pierce were married and had a child together.
December 23, 2002, Cook filed a complaint against Pierce in the Circuit Court of Rankin County. He was accusing Pierce of alienation of affection, breach of contract, and intentional infliction of emotional distress. This was based on Pierce’s affair with Kathleen. June 20-23, 2006, the trial was held in Rankin County Circuit Court, presiding was Judge Samac S. Richardson. The Jury decided in Cook’s favor, against Pierce, and entered a judgment awarded to Cook in the amount of $1,500,000, June 7, 2006. Pierce went on to file a motion on September 27, 2006 for a new trial. The court denied it.
On October 25, 2006, Pierce appealed the trial court’s decision. In the matter of breach of contract, Pierce claimed that Cook needed to have sufficient testimony to prove malpractice. Hickox v. Holleman, 502 So. 2d 626, 635 (Miss. 1987). However, Cook stated he did not sue for malpractice but breach of fiduciary duty owed to him. It was found that Pierce had committed malpractice but in Byrd, 933 So. 899, 904 (Miss. 2006), there were some exceptions laid out for expert testimony. “The attorney who finds himself the defendant in a legal malpractice case, however, has a judge and the trial attorneys who are already experts.” So, Cook did not need expert testimony, he already had experts involved in the case. Another good point to bring up is that ordinary jurors have a normal level of intelligence and lay expertise to determine if an attorney has an affair with his clients husband is a breach of duty, and expert testimony would not lend guidance on this situation. The court found this issue without merit.
Pierce also appealed stating that Cook did not follow the statute of limitations. According to Smith v. Sneed, 638 So. 2d 1252, 1255 (Miss. 1994), in a continuing tort the statute of limitations does not begin until the date of the last injury. Cook’s divorce was granted June 3, 2002 and he filed the claim on December 23, 2002, so it was with-in the one year statute of limitation. Stevens v Lake, 615 So. 2d 1177, 1183 (Miss. 1993) it was decided that the continuing tort doctrine must have continuing incidences occurring after the initial incident. This is the case for Cook. Pierce took Kathleen on a trip to New Orleans, and they had sexual relations. Pierce flaunted his involvement with Kathleen in a local restraint in Jackson. There is also a tape of Pierce coaching Kathleen of what to say to Cook. Pierce called Cook on his Birthday to apologize for the situation with Kathleen. The Trail Court did not find err in the statute of limitations because of these events, until the divorce, and Cook did file with-in the statute of limitation. For these reasons the court found this issue to be without merit also.
“For the reasons stated in the Rankin County Circuit Court judgment entered consistent with the jury verdict against Ronald Henry Price and in favor of Ernest Allen Cook Sr., in the amount of $1,500,000, is affirmed.
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