e winter yes good morning on our sat i am gus winter the nashville tennessee bar i represent lucky capital management the trial court committed air when it dismissed lucky's legal malpractise claim against miller and martin in the course of its ruling on a rule twelve b six motion to dismiss lucky had acquired the legal malpractise claim against miller and martin through an assignment from miller and martin's client and will lay out the trial court concluded that the legal malpractise claim a rose out of a fraud committed against the assign a work and and accordingly have that the assignment of the legal malpractise claim therefore was invalid pursuant to georgia statute forty four twelve twenty four the trial court was wrong about this was lucky set forth in its first amended complaint was a legal malpractise claim against miller and martin that sounded in negligence not fraud specifically lucky alleged that the miller and martin lawyers knew or should have known that envelope was managing member jeff ritchie was stealing money from the company before you go further let me ask you a question motion to dismiss attached and reflected on ever dead tree exhibits it looked to me as that either was a judgment on the pleadings or a summary judgment but nobody has objected to the court yes except for the legal conclusions yes or i believe that's the case and i believe under georgia law and i understand we're in federal court under the federal rules of civil procedure georgia law requires an affidavit of an allegation of legal malpractise set forth in the first minute complaint and it's reinforced by the affidavit from the expert witness mr scott is that miller martin knew or should have known that mr stealing money it thale to report this information to its client and valero and also executed a loan document which had the effect of encouraging mr richie to steal further funds from them and will lay out that miller and assuming that lucky was investing in the company georgia law makes a distinction between the negligence of the attorneys miller and martin and the fraud committed by the managing member jeff ritchie and that distinction makes all the difference in the present case the controlling georgia decision on this issue is the case of villain away the versus first american title insurance company very similar facts in fill in a way that the georgia supreme court dealt with a case where a third party committed a fraud against the defendant attorney's client the fraud succeeded due to the negligence of the attorney the lawyers client then assigned that ball in allowing this fraud to succeed succeed because a non lawyer person was given the opportunity to hand over funds and it was not taken care of but making sure that it was taken that the law firm didn't make sure that its employees did what was posted it that's correct and that was mr allen i think it was i'm sorry mr allen yes so your honor what we have is where the georgia supreme court upheld the a sign of the legal malpractise claims because the assigned claim sounded in negligence but at the end it was that they didn't make the payment that's what the court sad yes let me tell you why i think what's troublesome about this area of the law and the third party effectually puts on a show you take the law firm and the lawyers and you take whoever was the victim and all this conversation takes place and and that party filing the lawsuit  lawsuit and let the time run you don't need to worry at all about it and the didn't put on the bed the testimony of the of the client it's just a kind of a mechanical thing yes and the point i'm trying to make in the the link and this is my point the connection between the bill in the way the case in the present case is that the georgia supreme court held that the fraud committed by the third party in the down way the case did not invalidate the assignment and that's exactly the point i'm making in this case where the fraud of the mansion member richie did not destroy the validity of the legal malpractise claim and the layout assigned to lucky that's my point out the trial court also committed air when it dismissed the fraudulent concealment the alternative fraudulent  part of the part of the malpractise all of it comes out of the aisle of a comes out of this so called malpractise no your honor that's not correct if it comes out of the professional relationship between the law firm and is that to have a lawsuit in which the the asset may have no role really they ass and they have to put on the spot on the of the play what transpired between the lawyer and the client all these conversations yes that's correct and that's what what lobbying was prepared to did but there is one is one possible answer to that conundrum that judge joe flood points to is that lucky was a member of the client yes that lucky is not a traditional outside asset neat and at the time of these  events and acts lucky was a member of an vallejo by virtue of its investment so it was on the inside not the outside yes your honor and i think that's a very valid point i was just coming to that part of that somber was like a stockholder and so there's no relationship between the lawyer and stockholder well in this case there was a judge jordan was touching upon the relationship because they i know they drew it they did they drew the agreement and more than that lucky as a member was entitled to be informed of the fraud committed by rich it's undisputed even the defendant agrees pool the c e o and richie they already knew they were participating in the obligation was to inform lucky as the next highest authority and that's where rule one point one three of the the procedural posture we had a motion to dismount mis filed in the case which was granted as two three counts of the complaint and the court left a count in the complaint that went into discovery that was aiding and abetting breach occurred in the state of texas between in vallejo a florida company and lucky a texas company and at the time of the assignment no one was thinking about the state of georgia but the reason this case was filed in georgia is because tennessee texas and florida all prohibit the assignment of legal malpractise klein georgia does now as well but at the time that the assignment was actually signed the statute as it existed at that time did not have a per violation or for say prohibition on the assignment of legal malpractise claims however what the statute did prohibit was the assignment of causes of actions for injuries arising from fraud to the assigne pitch thirty is plain to see leckie specific alleges that miller and martin committed malpractise by means underlined or emphasized of his otherwise alleged project concealment so it seems to me your position has been arising from is the is the language that is used in the statute that says courts courts have equated that to based on well any causal connection or relationship is what the georgia courts to said your honor and  allegations in the complaint make it clear that they are on the first amended complaint and that's exactly what they were saying what judge cohen did is he looked at the allegations in the first amended complaint and the first minute complaint is replete with in response to our motion to dismiss in their brief this is what lucky said about their count for legal malpractise they said the gravel none of the legal malpractise claims presented in the first amended complaint is that the law firm learned that jeff ritchie the managing member of its client was misappropriating the membership interest purchased monies that lucky was investing in him for layo and that miller and martin concealed the scent from bison from and a or unintentional knew or should have known negligence lack of care center set or i don't see a single word in count one or the reality cation claim in another part of the many complaint t suggests that him and him did anything fraudulent if you look at a two paragraph account one which would be paragraphs eighteen and nineteen i agree it's not there yana but everywhere else in the complaint it's over there it's over it i read it over again ok but where in one is there anything anything whatsoever that talks about fraud or even by religion in adopting an allegation someplace i agree in those two paragraphs there's nothing there paragraph eighteen and nineteen there is nothing  think the rule is that the court needs to look at the substance of the pleadings as opposed to just labels that are placed on them that's a different issue and then i'm talking about what the facts are alleged in count want either set forth in those two paragraphs response to the motion to dismiss this is what they said they said that grab a man that was mocked klotz concealment of this death by mr rich so the court looks at the substance of these allegations  claim again if i could just quote part of this very briefly the grab a man of the legal malpractise claims presented in the first amended complaint is that the law firm learned that jeff ritchie the managing member of its client  their own interpretation of what they were saying and based on that judge cohen made the correct decision and that's not what that's not what scott after the says and that's what they're not what the allegations say they talk about knew or should have known and should have disclosed it either because they knew it may be the case that lucky thought that m and m had committed actionable fraud but it may also be that lucky at the end of the day might not have had enough evidence to prove to a jury or to a judge that emon him engaged in actionable fraud but that doesn't mean that lucky didn't have enough evidence or didn't plead enough  allege that m and m committed negligence and the federal rules allow you to plead in the alternative maybe not proven the alternative but at a very beginning you can plead in the alternative you can plead fraud actionable fraud with intent or alternatively negligence and it seems to me that that's exactly what this complaint is it alleges actionable fraud in the to counts right the fraudulent concealment the aiding and abetting and all that and as judge chuck indicated it alleges pure run of the mill attorney negligence on count one given that you can plead in the alternative how in the world does count one not survive where you have to go back again to the language of c j forty four twelve twenty four that says if the injury arises from fraud to the assad or again the so you're saying that any time that a malpractise claim is based on fraud pre twenty thirteen you could not assign it yes or and give me give me one case in georgia that says that well if i got there's no case it specifically says that and they were that's the case it nor does nor does bell in a way to say that i'll take that i'll take that on its face that you are right about both of those points if that's the case how can a district judge dismiss as a matter of law a claim on which there is no dispositive interpretation of georgia law because the statute says that if the action is for injuries arising for all i know it was a summer i know what the statute says because you've told us a yesterday but you're telling me that there is no legal interpretation in georgia as to what arising out of fraud means and to whom it refers if there is no exposition of that phrase in georgia law how can you say as a matter of law that count one is barred by georgia law there are cases that interpret the phrase arising from and we've cited those in our brief and it says that almost causal connection or relationship satisfies the phrase arising from that's it has in the insurance context correct well if you think there's a there's an insurance coverage case there's another case where they've also used that but  instead of saying arising from they substituted that with based on based on what may now what villanova courts did baker partner is not what the villanova courts both of them did they used the phrase based on a cla person who is not a lawyer take money from an escrow account and close the account and not engage in fraud whether those are the facts your honor but the what i'm trying to say is there was no issue tell me tell me how that can not be actionable fraud as i'm trying to trying to do that your honor the issue envelop to waiver there was no argument that that had arose from fraud to the assigner the issue was whether there was a public policy in the state of georgia against the assignment of legal malpractise claims and is correct so it was malpractise that that set of f misappropriation and the words he stole the money that's not fraud unlike mr allen in the been a libby case richie's accuse of taking money should've taken that's not fraud isn't where they are less fortunate concealment by the misrepresentation justifiable reliance on them which is i don't see that anywhere when someone in charge of you know the c e o of this or the head guy in the limited liability company took money that he should have taken there's nothing to suggest he did pay a project he just did it he just took money what is a judge is saying you got to have a representation and reliance on the representation where you can also have f richie committed a fraud who was the victim to whom did he make a representation and who relied on it i'm not sure that we have that type of fraud in this allays are all right so it's a so it's nothing more than theft where case because there was no duty but seen yet and he was correct you have to have an underlying tort they have conspiracy but isn't the underlying tort the the wrongdoing by richie offer right yesterday he didn't talk about the tort committed by richie which allegedly the law firm participate in it was a coconspirator well on the on the fraudulent concealment claim there first must be a duty and there was no duty by my client to shotgun pleading it's just the opposite of a shotgun pleading you've got all these allegations in the front part of the complaint and you go to count one there's not a single religion of anything that preceded it or anything that comes after count one and i think that i probably some of the reason why there was this confusion as to what exactly was being played particular with regard to front because there are allegations of fraud out there but in my view they're not in count one agree with you on that but i think i see where some of th problem came about well yes aaron and the buck stops here in terms of the drafting of the pleadings and if they were confusing and confusing to the trial court that's certainly on me but i believe this court certainly understands that in a response to the rule twelve b six motion the pleading parties entitle to every nth inference and favorable construction of the allegations present in the complaint and as your honor stated count one paragraph eighteen and nineteen set forth a pretty garden variety negligence claim the one point i would like to make and to follow up and your honors last questions to  mr mock about conspiracy your honor is right is that there is an allegation in the conspiracy that the substantive acts setting aside completely for the moment for the sake of argument the fraudulent cmyk claim against miller and martin but richie's conspiracy his acts and the participation by miller and martin which defense counsel did not address is the drafting of the law of the loan document which gave camouflaging cover and serve to conceal and protect this ongoing well for a conspiracy they that the law firm complaint the motion a spece and a response then what is the pleading i understand but at any rate i submit that we have raised genuine disputes of material fact as to miller and move to the third case