Justia Civil Procedure Opinion Summaries

Former clients sued their attorneys for legal malpractice based, in part, on the attorneys' withdrawal from a prior ease. But the attorneys obtained that withdrawal by court order. In the original case, the former clients appealed the court's order approving withdrawal, and that appeal was rejected. The attorneys thus argued collateral estoppel applied to bar a malpractice action based on their withdrawal. The Washington Supreme Court agreed: withdrawal by court order in an earlier proceeding was dispositive in a later malpractice suit against the attorney. Although other malpractice complaints unrelated to the withdrawal would not be precluded, a client cannot relitigate whether the attorney's withdrawal was proper. “If we are to have rules permitting attorney withdrawal, we must allow attorneys to have confidence in those rules.” View "Schibel v. Eymann" on Justia Law

Defendants Beachcomber Management Crystal Cove, LLC (Management) and Douglas Cavanaugh (collectively, Defendants) challenged a trial court’s order disqualifying the law firm of Kohut & Kohut LLP (Kohut) from continuing to represent Defendants in the underlying matter. In March 2016, Plaintiffs filed this lawsuit on behalf of Beachcomber at Crystal Cove, LLC as a shareholder derivative action against Defendants. The complaint named the Company as a nominal defendant and alleged claims for fraud, breach of fiduciary duty, abuse of control, gross negligence and mismanagement, breach of duty of honest services, unjust enrichment, declaratory relief, and accounting. Plaintiffs alleged Defendants abused their position as the Company’s managers by diverting Company funds to other Cavanaugh entities, paying themselves unauthorized management fees, misallocating expenses the Company shares with other entities, and refusing to provide Plaintiffs complete access to the Company’s books and records. Defendants hired Kohut to represent them in this lawsuit, and the Company hired independent counsel, the law firm of Corbin, Steelman & Specter, to represent it in this lawsuit. In May 2016, Plaintiffs filed a motion to disqualify Kohut “from any further participation in this case” based on conflicts of interests arising from its past and present representation of the Company and Defendants. Specifically, Plaintiffs argued disqualification was required based on the conflicts of interest arising from: (1) Kohut’s concurrent representation of the Company and Defendants; (2) Kohut’s successive representation of the Company and Defendants concerning the disputes over the Company’s operations; and (3) the need for Kohut to testify in this lawsuit about the services it provided to the Company and Defendants. Here, the trial court concluded disqualification was mandatory because: (1) Defendants and the Company had conflicting interests because the Company is the true plaintiff in this derivative suit that Plaintiffs brought against Defendants on the Company’s behalf; and (2) Kohut previously represented the Company concerning some of the issues raised in this suit, and a substantial relationship therefore existed between that representation and Kohut’s representation of Defendants in this lawsuit. The Court of Appeal concluded the trial court erred because it failed to apply a more specific line of cases that governed an attorney’s successive representation of clients in a derivative lawsuit brought on a small or closely held company’s behalf against the insiders who run the company. View "Beachcomber Management Crystal Cove v. Super. Ct." on Justia Law

The Eighth Circuit found no violation of Fed. R. Civ. P. 11 or abuse of the judicial process in this consolidated appeal involving parties in a putative action. The court held that counsel did not violate Rule 41 in stipulating to the dismissal of the action and counsel had at least a colorable legal argument that the district court’s approval was not needed under Rule 23(e) to voluntarily dismiss the claims of the putative class. Therefore, the district court abused its discretion in finding that counsel acted with an improper purpose under Rule 11 and abused the judicial process by stipulating to the dismissal of the federal action for the purpose of seeking a more favorable forum and avoiding an adverse decision. Consequently, the district court also abused its discretion in imposing sanctions upon plaintiffs' counsel for the purported violation. The court reversed the district court's orders and remanded for further proceedings. View "Castleberry v. USAA" on Justia Law

The South Carolina Supreme Court accepted a declaratory judgment matter in its original jurisdiction to determine if Respondents-Petitioners Quicken Loans, Inc. and Title Source, Inc. engaged in the unauthorized practice of law (UPL). Petitioners-Respondents (collectively "Homeowners"), alleged the residential mortgage refinancing model implemented by Quicken Loans and Title Source in refinancing the Homeowners' mortgage loans constituted UPL. In addition to seeking declaratory relief, Homeowners' complaint also sought class certification and requested class relief. The Supreme Court found the record in this case showed licensed South Carolina attorneys were involved at every critical step of these refinancing transactions, and that requiring more attorney involvement would not effectively further the Court’s stated goal of protecting the public from the dangers of UPL. The Court therefore reject the Special Referee's conclusion that Quicken Loans and Title Source committed UPL. View "Boone v. Quicken Loans" on Justia Law

Seventh Circuit Rules 3(c)(1) and 28(a) require the same jurisdictional information for docketing and briefing. With an exception for pro se submissions, the court screens all filed briefs to ensure that they include all required information about the jurisdiction of both the district court (or agency) and the court of appeals. FRAP 28(b) allows the appellee to omit the jurisdictional statement “unless the appellee is dissatisfied with the appellant’s statement.” In consolidated appeals, the Seventh Circuit found the jurisdictional statements inadequate and stated that the appellee cannot simply assume that the appellant has provided a jurisdictional statement that complies with the rules. The appellee must review the appellant’s jurisdictional statement to see if it is both complete and correct. If the appellant’s statement is not complete, or not correct, the appellee must file a “complete jurisdictional summary.” It is not enough simply to correct the misstatement or omission and “accept” the balance of the appellant’s statement. In one case, the Attorney General stated: “Mr. Baez‐Sanchez’s jurisdictional statement is correct,” saying nothing about completeness, so the brief must be returned to the Department of Justice. The other jurisdictional statement states “Appellants’ jurisdictional statement provides a complete jurisdictional summary.” The court stated: Fine, but what about correctness? View "Bishop v. Air Line Pilots Association, International" on Justia Law

Petitioner Stevens Law Office appealed a trial court decision denying assignment of a future structured settlement payment from a fund administered by Symetra Assigned Benefits Service Company for legal services rendered by petitioner on behalf of beneficiary Shane Larock. Shane Larock retained petitioner to represent him in a child in need of care or supervision (CHINS) proceeding which he expected to follow the birth of his daughter in early 2016. As payment, petitioner asked Larock for a $16,000 nonrefundable retainer which would be paid through assignment of that sum from a $125,000 structured settlement payment due to Larock in 2022. Under this arrangement, the structured settlement payment issuer, Symetra Assigned Benefits Service Company, would pay petitioner $16,000 directly when the 2022 periodic payment became due under the original terms of the settlement. Larock agreed to the fee arrangement and the assignment. The trial court issued a written order concluding that it could not find that the fee arrangement was reasonable because, given petitioner’s ongoing representation of Larock, such a determination would be speculative. After review, the Vermont Supreme Court reversed and remanded so that the trial court can conduct the best-interest analysis required by statute before determining whether to deny or approve assignment of a structured settlement payment. View "In re Stevens Law Office" on Justia Law

The Second Circuit vacated the district court's order denying plaintiffs' motion for attorneys' fees and costs incurred in litigating an appeal and cross-appeal under 42 U.S.C. 1988. After the court affirmed on the merits, the district court awarded a reduced award of attorneys' fees. The court affirmed the award in a summary order, stating that each side was to bear its own costs. The district court then denied plaintiffs' motion for attorneys' fees. The court held that its reference to "costs" in the context of Federal Rule of Appellate Procedure 39 did not include attorneys' fees. Accordingly, the court remanded for further proceedings. View "Hines v. City of Albany" on Justia Law

Leonard was appointed to defend Ogoke, who was charged with wire fraud. Ogoke’s codefendant, Okusanya entered into a cooperation plea agreement. Based on the government's motion in limine, Judge Guzmán entered an order that “unless there is a showing that the missing witness is peculiarly within the government’s control, either physically or in a pragmatic sense, Defendant is precluded from commenting on the government’s failure to call any witness.” It was the government’s theory that Ogoke and Okusanya were coconspirators in the fraud. Okusanya appeared on the government’s witness list, but the government did not call him during trial. During his closing argument, Leonard made several references to Okusanya’s failure to testify. Judge Guzmán sustained an objection and struck that portion of the argument. Before the jury returned a verdict, Judge Guzmán issued an order to show cause as to why Leonard should not be held in contempt. The jury found Ogoke not guilty. The government declined to participate in the contempt proceeding, Leonard was represented by counsel, but no prosecutor was appointed. Leonard stated that he had not realized he violated the ruling, but later acknowledged his “huge mistake.” Judge Guzmán issued an order holding Leonard in contempt, 18 U.S.C. 401, and ordering him to pay a fine, finding Leonard’s explanation “incredible” given his extensive experience as a defense attorney. The Seventh Circuit affirmed the conviction as supported by sufficient evidence, rejecting procedural and due process arguments. View "United States v. Ogoke" on Justia Law

Nelson, an attorney specializing in asbestos defense, was employed by Tucker Ellis. In 2009, Nelson became a “non-capital partner.” Gradient was retained by Tucker Ellis to assist in litigation. Nelson exchanged emails with Gradient consultants about medical research articles relating to smoking and/or radiation (rather than asbestos) as causes of mesothelioma. After Nelson left Tucker Ellis in 2011, the law firm was served with a subpoena, seeking the production of all communications between Tucker, Ellis and Gradient regarding the research. Tucker Ellis produced the attorney work product emails authored by Nelson. After Nelson was subpoenaed for deposition, he wrote a “clawback” letter to Tucker Ellis, asserting the emails contained his privileged attorney work product and demanding they be sequestered and returned to him. Nelson sought a determination that Tucker Ellis had a legal duty to protect his attorney work product from improper disclosure to third parties Code of Civil Procedure section 2018.030. The court of appeal reversed the trial court, concluding that the holder of the attorney work product privilege is the employer law firm, Tucker Ellis, not Nelson, and had no legal duty to secure Nelson’s permission before it disclosed documents he created in the scope of his employment. View "Tucker Ellis LLP v. Superior Court" on Justia Law

In 2010, Walton sued Rossdale. Walton, a California attorney, maintained a “litigation factory” by placing dozens of email addresses on the Internet, collecting spam messages sent to those addresses, and then demanding compensation for supposed violations of the Consumer Legal Remedies Act, Civil Code 1750. Walton‘s lawsuit was dismissed with prejudice in 2012. The same day, Rossdale sued Walton, alleging malicious prosecution. Rossdale was a fictitious business name registered in Florida to a Florida limited liability company, Miami Legal. In 2016, Walton argued that the lawsuit should be dismissed because Rossdale was "a fictitious business name registered by a company that has now dissolved.” Miami Legal argued that all of its assets and liabilities had been transferred to Rossdale Delaware, which Miami Legal called its “successor in interest to the causes of action.” The trial court dismissed for lack of standing. The court of appeals reversed. Rossdale was only a fictitious business name; no legitimate standing or jurisdictional issue was raised. This case does not involve an individual seeking to sue under a fictitious name to protect his identity, does not invoke serious privacy concerns, and did not raise any supposed violation of any fictitious name statute. View "Rossdale Group, LLC v. Walton" on Justia Law