A jury has delivered a $5 million legal malpractice verdict against a Detroit law firm in the U.S. District Court for Eastern Michigan. Jaffe, Raitt, Heuer & Weiss was retained to “vet” a Minneapolis-based office furniture manufacturer for potential acquisition for a client. The firm allegedly failed to advise the client concerning the buyer’s $3.26 million underfunded pension liability. In fact, the firm advised its clients that it had no exposure for the liability.
The U.S. District Court for the Southern District of New York has recently refused to dismiss a legal malpractice action against a law firm. A client sued his former counsel, Seward & Kissel LLP, for failing to conduct due diligence in the sale of an energy company.
Prior to the sale, the firm had furnished the client with an engagement letter, which broadly described the scope of its representation as “lead transaction counsel.” Further, the parties to the transaction had signed a letter of intent, which recited that each party could have their counsel conduct due diligence prior to the sale.
The suit claimed that the firm failed to perform a due diligence review of the potential buyer. When the sale closed approximately six months later, one of the buyer’s board members was charged with securities fraud and conspiracy, resulting in a class-action lawsuit seeking to delist the company from public trading.
The SEC did suspend all public trading of the buyer’s shares, rendering the sale worthless. The seller re-purchased the company for $900,000, less than the $7.5 million price negotiated with the original buyer.
The suit claims that Seward & Kissel negligently advised the client in the sale and failed to perform due diligence about the buyer, which would have revealed the securities fraud and conspiracy issues. The court denied Seward & Kissel’s motion to dismiss, noting that the firm’s letter of engagement was “facially broad” and lacked language to indicate that the firm would not perform a due diligence inquiry. The Court further stated that the firm had a duty at least to discuss whether a due diligence inquiry would be performed.
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Three Plaintiffs have filed suit in the Northern District Court of Illinois against an attorney, alleging legal malpractice. They claim that the Defendant failed to timely file their action in connection with an airplane crash.
On August 24, 2010, Henan Airlines flight 8387 crashed while attempting to land at Yichun Lindu airport in China. There were 96 passengers on board the flight, 52 persons survived the crash, including two of the Plaintiffs. The attorney, Monica Ribbeck, offered to represent the Plaintiffs in an action against Embraer, S.A., the manufacturer of the plane, and General Electric Company (“GE”), who manufactured the jet engines.
January 25, 2017. The Fourth District Court of Appeals in Washington, D.C. has ruled that a plaintiff may go forward with a legal malpractice suit against defense attorney, Robert Lithman, and associated law firms. The plaintiffs in the malpractice suit were his former real estate company R.S.B. Ventures Inc. and its principals, Nasser Mizrahi and Dr. Veronica Motiram-Mizrahi.
The suit involved the alleged mishandling of a $10 million lawsuit. Plaintiffs claim that Lithman failed to timely appear and respond to a motion to dismiss filed by the defendants in the underlying action. The Appeals Court agreed that dismissal of the action against Mizrahis was appropriate, concluding that there was no claim for malpractice because final judgment had not entered in the underling suit. Conversely, the Court permitted plaintiff, R.S.B. Ventures’ case to proceed because a final ruling in a related foreclosure action had entered.
The Texas Court of Appeals has reversed a trial court’s Order, granting a law firm and two of their attorneys’ motion to dismiss a legal malpractice action. The Defendants had asserted that Plaintiff’s legal malpractice action was barred by the statute of limitations. While the trial court had not specified its reasons for granting the motion, the Court of Appeals found that the trial court had abused its discretion.
The legal malpractice case arose from a 1992 suit in which several parties had sued the Plaintiff, seeking a declaration of rights regarding a water well. The Defendants in the present legal malpractice action had represented the Plaintiff. Plaintiff lost the case and appealed. During the pendency of his appeal, the Plaintiff filed for bankruptcy. In January, 1998, the Texas Court of Appeals reversed, in part, and remanded.
On July 31, 2002, the Plaintiff filed his legal malpractice action against the Defendants. That suit was subsequently dismissed in July, 2011 for lack of prosecution and final judgment entered on July, 2013. On June 24, 2015, Plaintiff re-filed his legal malpractice claim. The trial court dismissed, assessed sanctions of $8,500 and awarded attorneys’ fees to Defendants, designating the Plaintiff as a “vexatious litigant”.
A Manhattan Acting Supreme Court Justice has granted a motion to dismiss a claim against Skadden, Arps, Slate, Meagher & Flom, after ruling that the claim was time-barred under Oregon’s two-year statute of limitations.
Creditors of a bankrupt conglomerate had sued Skadden, in New York state court, after allegations that Skadden acted unethically in failing to disclose or obtain waivers for multiple conflicts.
This case involves a company, Henry S. Miller Commercial Company (“HSM”), who set up commercial property transactions by a buyer who claimed to be the beneficiary of a large trust fund. The buyer was in fact a truck driver who had no trust fund. When the deals failed to close, the prospective sellers were forced to liquidate their properties at a loss. They then sued HSM for fraud, and obtained a judgment in the amount of $8.9 million. HSM then sued its insurance carrier when it refused to pay the judgment. HSM eventually settled that action for close to $6 million.
HSM also sued its lawyers in the underlying case for legal malpractice and also for gross negligence. HSM asserted that the lawyers were grossly negligence for failing to name the truck driver in the underlying action. The trial judge in the legal malpractice action granted a direct verdict for the lawyers on the gross negligence claim, but permitted the legal malpractice claim to go forward. At trial, a jury found in favor of HSM in the amount of $4.6 million. The judge issued a final judgment with no monetary award, after applying the $6 million paid by the insurer. Both parties appealed.
The Fifth Circuit Court of Appeals reversed the directed verdict for the lawyers on gross negligence, and remanded the case for a new trial rejecting all other appellate issues. The Appeals Court found that the truck driver was a person the jury could have considered to be responsible for the unsuccessful real estate transactions, and that the lawyers’ failure to name him may have shifted additional liability on HSM. The court found that it was a factual question whether the lawyers were grossly negligence in failing to bring the truck driver into the case.
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.
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.