Articles Posted in Issues and Insights

Richard Thomas Robol, Esq., who aided in the recovery of treasure from a shipwreck, has been sanctioned by a District Court in Ohio for engaging in bad faith conduct during related litigation. Robol represented Recovery Limited Partnership (“Recovery”), the organization which discovered the wreck of the S.S. Central America, and recovered vast amounts of gold from it.

Through many years of litigation, Robol misrepresented himself to the Court, and apparently aided defendants by concealing gold-sale inventories, which the Court had Ordered his clients to produce. On June 10, 2016, the US Court of Appeals for the Sixth Circuit affirmed the District Court’s ruling, which had imposed sanctions on Robol in the sum of $224,580.

Dispatch Printing Company (“Dispatch”) initially filed the action in 2000, seeking an accounting of the gold recovered from the wreck. Following commencement of the action, the District Court had issued multiple Orders, directing Recovery to produce its financial records from the year 2000. Recovery produced only one inventory from sales to a California gold company in 2000, and claimed it had no other inventories in its possession. Robol repeatedly represented to the Court that there were no other records. More Contempt Orders followed.

The Indiana Court of Appeals has reversed the dismissal of a woman’s malpractice complaint against her attorney, finding that the trial court’s Rule 12(b)(6) Order was improper.

 

Elaine Chenore hired Attorney Robert Plantz in July, 2005 to pursue a claim for money damages against William Knight. Chenore was awarded approximately $11,000 in January, 2006. In December, 2006, Knight filed a Chapter 13 Bankruptcy Petition. Plantz was notified, and collection proceedings were stayed. Although Plantz informed Chenore of the bankruptcy petition, she did not receive notice directly from the Bankruptcy Court. Plantz told her to “wait until notified by the Bankruptcy Court” and that he was going to appear for her there.

 

In July, 2012 Chenore learned that Knight’s bankruptcy had been discharged and that he had paid 100% of the claims filed, but paid her nothing, because no Notice of Claim had been filed on her behalf. Chenore then sued Plantz, who moved to dismiss under Rule 12(B)(6), claiming the two-year statute of limitations for attorney malpractice had expired. Chenore replied that the statute of limitations had been equitably tolled, because Plantz never told her that he did not appear for her in the Bankruptcy Court. The trial court granted Plantz’s motion.

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Creditors of a bankrupt conglomerate have sued Skadden, Arps, Slate, Meagher & Flom in New York state court, after allegations that Skadden acted unethically in failing to disclose or obtain waivers for multiple conflicts. The plaintiffs are lenders and private equity funds owed over $90 million, who forced a company, Evergreen International Aviation Inc., to file for Chapter 7 protection in Delaware state court in late 2013. Jay Goffman, Esq. was also named as a Defendant, who heads Skadden’s corporate restructuring group.

The suit was filed after a Bankruptcy judge in Delaware granted the creditors derivative standing to sue Mr. Goffman and the firm. The suit specifically alleges that Skadden provided a broad scope of legal services to help operate various companies, all of which were controlled by               Delford Smith, a principal of Evergreen International Aviation, Inc., who operated his business empire out of Oregon.

The suit claims that Goffman gave priority attention to Smith’s personal interests at the expense of unrelated creditors. Smith died in 2014. According to the complaint, Smith was “the source of much of Goffman’s success as a business originator.”

The complaint details two “likely fraudulent transfers” in 2013, diverting cash and other assets, which would have been part of the bankrupt estate. First, there was a transfer of two aircraft, valued at $10.6 million, to Evergreen Vintage Aircraft, a non-profit controlled by Smith, apparently without consideration.

Second, in May, 2013, Evergreen International agreed to sell stock of its helicopter subsidiary to Erickson Air-Crane Inc. for $250 million in cash and other consideration. The complaint alleges that Skadden represented five different companies in the sale, including Evergreen International, its helicopter subsidiary, a separate holding company, and Smith.

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The Court of Appeals of the Seventh Circuit of the state of Illinois has affirmed a judgment in Estate of Stanley Cora v. John C. Jahrling. Attorney John Jahrling had represented Stanley Cora in a home sale with knowledge that there was a language barrier. Cora sold his home for $35,000, in spite of an approval showing fair market value was $106,000, and Jahrling also failed to include a requested life estate for Cora, which would have allowed him to reside in the upstairs apartment of the house rent-free for the rest of his life.

During the negations and sale, Jahrling could not communicate directly with Cora because Cora only spoke Polish. Jahrling relied on opposing counsel to communicate with his client. Following an attempt by the buyers to evict Cora from the upstairs apartment, he sued Jahrling for legal malpractice. Cora died in 2006 before trial, but his estate continued to pursue the case.

The Appeals Court ruled that Jahrling had acted as Cora’s attorney, relying on evidence Jahrling had received a payment from another attorney at the closing on the sale of his home. The closing documents also identified Jahrling as Cora’s attorney.

The Appeals Court also determined that Jahrling’s inability to communicate with his client, coupled with his reliance on opposing counsel for all communications was “unreasonable per se” and that the lower court had correctly relied on the discrepancy between the fair market value of the home and the sale price.

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ISSUE:

I was an investor in a ponzi scheme. I lost six figure numbers when the head of the scheme was arrested and jailed and has stated that he spent all his investor’s money playing in high stakes commodities trading. I was referred to this man by my accountant. Do I have any potential claims against this accountant?

INSIGHT:

The Supreme Court of Rhode Island recently upheld the dismissal of a legal malpractice claim.  In Audette v. Poulin, the beneficiary of a trust sued an attorney, who represented the trustee in a dispute between the beneficiary and the trustee.  Continue reading

Insight: The short answer is yes.  As a party to a lawsuit, you are responsible for paying the costs of litigation.  These expenses include court filing fees, medical record copying costs, deposition transcript fees, and expert witness fees.

As your attorney suggested, these costs are typically advanced by lawyer.  Upon successful resolution of the case, he will then deduct this amount along with his fee, and pay the balance to you.

Insight: If you believe that your wife is having an affair with her lawyer you may report him to your state’s attorney disciplinary committee.  Most states have adopted some form of American Bar Association Model Rules of Professional Conduct Rule 1.7 (a) (2), which states that a lawyer should not represent a client if there is a risk that the lawyer will be materially limited by his own interests.  This would include a personal relationship with a client and may be grounds to force withdrawal of the attorney’s representation.

Since your divorce is not final until the divorce decree is signed by the judge, any form of adultery, may be used to your legal advantage, as long as you live in a state that recognizes fault in divorce proceedings.  If you are able to prove that your wife is having an affair with her attorney during the divorce proceedings, you will have a better chance of obtaining custody of your children and may be entitled to a larger portion of the marital assets.

Insight:  Unless it would have some impact on your case, your attorney is not obligated to notify you of his pending disciplinary proceedings. You are always entitled to terminate your attorney’s services and hire another lawyer.  However, if you choose to do so, you likely will not be reimbursed for services already performed.

If your attorney is ultimately suspended or disbarred, he would have to notify you that he can no longer represent you, and you might arguably be entitled to reimbursement of your retainer, since he cannot complete his representation.

Insight: Most states have adopted some form of Model Rule of Professional Conduct 1.4, which requires attorneys to keep clients reasonably informed about the status of their legal matter and make timely responses to client’s requests for information.  The rule also obligates attorneys to provide sufficient information to clients, so that they may make informed decisions.

If you have made repeated attempts to contact your attorney, and have not received a response, you may wish to contact the division of your state’s bar that handles attorney disciplinary actions.  The bar may assist you in eliciting a response from your attorney, and may begin disciplinary proceedings if the attorney’s conduct was egregious.

In some circumstances, an attorney’s failure to communicate with a client would also constitute legal malpractice.  Failure to disclose material information to a client may also give rise to additional liability under your state’s consumer protection statute.  If you believe your attorney’s inadequate communication has adversely affected the outcome of your legal matter, you should consult a legal malpractice attorney.