Source: http://freivogel.com/whatsnewcurrent.html
Timestamp: 2019-04-24 23:56:07+00:00

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Items posted here during the past thirty days will also appear on this What's New page. Items posted within the past ten days will appear In Ten Day Bulletin immediately below. Items older than ten days but less than 30 days will be posted in the Thirty-Day Holding Area, which follows.
Current Client (posted April 19, 2019) Blake Marine Group LLC v. Frenkel & Co., 2019 WL 1723567 (S.D.N.Y. April 18, 2019). Blake Marine, the plaintiff, performed services for Forward Marine in connection with a damaged barge in the Gulf of Mexico. Defendant, Frenkel is Forward's insurance broker. Frenkel admits it was supposed to obtain, but failed to obtain, an insurance policy for Forward that would cover Blake Marine's work. InsCo was the intended policy issuer. Forward Marine assigned its claims against Frenkel to Blake Marine. Blake moved to disqualify the law firm ("Law Firm") appearing for Frenkel. While Law Firm represents InsCo in other matters, there is no conflict here. Frenkel and InsCo are in alignment because they both agree that the policy did not issue. Moreover, InsCo, although not a party in this case, has hired other counsel in connection with this case.
Joint Representation (posted April 19, 2019) Platinum Props. Investor Network, Inc. v. Sells, 2019 WL 1670893 (S.D. Fla. April 17, 2019). Trademark infringement case with related state claims. Two law firms appeared jointly for the four named defendants. Plaintiffs moved to disqualify both law firms. In this opinion the magistrate judge denied the motion. The court found that the defendants' positions were "closely aligned" and that there was no conflict in representing all of them. Moreover, the defendants consented to the joint representation and were given an opportunity to consult with independent counsel.
Malpractice Liability (posted April 15, 2019) Pence v. Slate, 2019 WL 1560059 (Wis. App. April 11, 2019). Lawyer prepared Decedent's estate plan, including a trust to be funded by a life insurance policy. The Decedent appointed Lawyer's wife trustee. Prior to Decedent's death the trustee allowed the policy to lapse. The intended beneficiaries brought this case against Lawyer, Lawyer's wife, and several other defendants. Because the beneficiaries were not Lawyer's clients, the trial court granted summary judgment to Lawyer. In this opinion the appellate court affirmed. The court noted Wisconsin precedent holding that, with certain exceptions, non-clients may not sue lawyers. Two exceptions are fraud-related. An additional estate planning exception is where a non-client is harmed by lawyer negligence that "thwarted the intent of the . . . client." No exception applied to this case. As to the plaintiffs' claims that Lawyer had a conflict of interest, the court said that Decedent must have known about Lawyer's spousal relationship with the trustee. Plus, this was not a "meaningful conflict of interest for purposes of this case."
Investing; Business with Client (posted April 15, 2019) Calvert v. Mayberry, 2019 WL 1510451 (Col. April 8, 2019). Lawyer gave (lent?) $193,000 to Client with no written agreement and no compliance with Rule 1.8(a). Lawyer brought this case against Client to recover that money. The trial court granted Client summary judgment. The appellate court affirmed. In this opinion the Supreme Court affirmed. The primary basis for all three rulings was that an agreement made in violation of Rule 1.8(a) is not enforceable.
(posted March 27, 2019) Zloop, Inc. v. Phelps Dunbar LLP, 2019 WL 1320542 (W.D. La. March 22, 2019). In this legal malpractice case against Law Firm Plaintiff seeks production of 17 emails sent within Law Firm. In this opinion the magistrate judge recognized that law firms enjoy the same internal privilege as other entities. The focus was on emails involving Lawyer who was a partner in Law Firm and a member of Law Firm's ethics committee. The court discussed each email in detail. For those in which members of Law Firm were seeking advice from Lawyer the court found privilege and denied production. For those emails that did things other than seeking Lawyer's advice, the court required production.
(posted April 5, 2019) In Re Earl Gaudio & Son, Inc., 2019 WL 1429978 (C.D. Ill. March 29, 2019). We have written often of Section 327 of the Bankruptcy Act. It sets forth standards for the employment of professionals in bankruptcy proceedings. We have mentioned less frequently Rule 2014 of the Bankruptcy Rules, which sets forth disclosure requirements in connection with Section 327 applications. This includes disclosure of "all of the person's connections with the debtor, creditors", and other parties "in interest.". In this opinion the bankruptcy judge denied large chunks of compensation for Debtor's counsel ("Law Firm") and a corporate custodian ("Bank") for repeatedly failing to make required disclosures. They failed to disclose their work on trusts for Debtor's owners and involvement in state court proceedings directly involving Debtor and its property. The court also found Law Firm's accounting and billing accuracy woefully deficient. We see little point in providing further details here. We just wanted to re-emphasize the importance of Rule 2014 to bankruptcy practitioners.
(posted March 26, 2019) Int'l Designs Corp., LLC v. Hair Air Int'l, Inc., No. CV 17-8411-GW (C.D. Cal. Feb. 28, 2019). [Note: The following is based entirely on a Mondaq article, dated March 21, 2019. It is a rare corporate family case involving two subsidiaries with a common parent.] The plaintiff in this patent infringement case ("Sub 1") is a subsidiary of Parent Corp. The law firm representing the defendant ("Law Firm") represents a different subsidiary of Parent Corp., in another matter (not this one). The plaintiff moved to disqualify Law Firm. In this opinion the court denied the motion. We are waiting for the actual opinion, to confirm the facts, and before commenting on the court's reasons.
(posted April 19, 2019) Blake Marine Group LLC v. Frenkel & Co., 2019 WL 1723567 (S.D.N.Y. April 18, 2019). Blake Marine, the plaintiff, performed services for Forward Marine in connection with a damaged barge in the Gulf of Mexico. Defendant, Frenkel is Forward's insurance broker. Frenkel admits it was supposed to obtain, but failed to obtain, an insurance policy for Forward that would cover Blake Marine's work. InsCo was the intended policy issuer. Forward Marine assigned its claims against Frenkel to Blake Marine. Blake moved to disqualify the law firm ("Law Firm") appearing for Frenkel. While Law Firm represents InsCo in other matters, there is no conflict here. Frenkel and InsCo are in alignment because they both agree that the policy did not issue. Moreover, InsCo, although not a party in this case, has hired other counsel in connection with this case.
(posted March 27, 2019) Hewlett v. Utah State Univ., 2019 WL 1358857 (D. Utah March 26, 2019). Plaintiff was beaten and raped at Fraternity. In this case she sues the alleged assailant, University, Fraternity, and entities related to Fraternity. All Fraternity-related entities are represented by two law firms ("Law Firms"). Plaintiff also filed a state-court action against "24 former members or Chapter Officers" of Fraternity. Both actions involve the same allegedly tortious conduct. None of the state court individuals are represented by Law Firms. During discovery in this case Law Firms identified 110 individuals possibly having knowledge of relevant events. Also in this case, the court entered an order identifying which individuals would be deemed in the "control group" of Fraternity-related entities for Rule 4.2 purposes (officers, etc.). Plaintiff moved to disqualify Law Firms in this case. In this opinion the magistrate judge denied the motion. Plaintiff made vague accusations about Law Firms' alleged contacts with certain individuals, for which the court could find no support in the record. Otherwise, in the court's view, nothing in the foregoing relationships constitutes a conflict.
(posted March 25, 2019) Smith v. Smith, 2019 WL 1312867 (Ohio App. March 21, 2019). Divorce case. The court appointed GAL to look after the parties' minor child. H hired Lawyer. The problem is that Lawyer was already representing GAL in GAL's divorce case. W moved to disqualify Lawyer. The trial court granted the motion. In this case the appellate court affirmed. The court said that the possibility that Lawyer will have to cross-examine GAL in this case implicates Rule 1.7(a)(1) (direct adversity). The possibility that GAL will may make a recommendation adverse to H implicates Rule 1.7(a)(2) (material limitation).
DERIVATIVE ACTIONS (To read full article, click here.
(posted March 27, 2019) Harris v. City of Kansas City, 2019 WL 1367672 (D. Kan. March 26, 2019). Plaintiff was a fireman. He is suing for unlawful termination. One of the defendants is Plaintiff's local union chapter ("Union"). Plaintiff moved to disqualify Union's lawyer in this case ("Lawyer"). Prior to this suit, Union filed a grievance for Plaintiff. It went to arbitration, and Plaintiff lost. At various times Plaintiff met with Lawyer to discuss the case. The sole issue is, under Rule 1.9, whether Lawyer ever represented Plaintiff. In a fact-intensive analysis the magistrate judge found that Lawyer never represented Plaintiff. These union-member relationships are fraught with opportunities to argue that the union's lawyer also represented the member. The court discussed several other cases where the court sorted through these situations and found that the lawyer represented the union and not the member.
(posted April 10, 2019) Kanter v. Kanter, 2019 WL 1512345 (Cal. App. Unpub. April 8, 2019). While Lawyer 1 and Lawyer 2 were sharing office space, H came to Lawyer 1 about representation in this divorce case. After a brief meeting Lawyer 1 suggested H go to Lawyer 2, which H did. Lawyer 1 then moved his practice to Law Firm, while Law Firm was representing W. H moved to disqualify Law Firm. The trial court denied the motion. In this opinion the appellate court affirmed. The gist of of the appellate court's analysis was that Lawyer 1 never represented H and learned nothing of H's case during their meeting.
(posted April 3, 2019) Starr Indem. & Liab. Co. v. Young, 2019 WL 1442166 (D. Nev. March 31, 2019). In state court Audra Duvall sued a massage parlor and therapist for inappropriate sexual acts during a massage. In a complex series of events, that case settled. InsCo had issued a general liability policy covering the parlor and therapist. InsCo provided one lawyer to represent both under a reservation of rights. In this case the therapist sued InsCo for failing to provide a separate counsel for therapist in the state court action. In this opinion the court granted the therapist a summary judgement. The reservation of rights letter informed the therapist of his right to hire his own counsel. However, the court held that the letter did not provide enough information about the conflict between the therapist and InsCo, and InsCo did not obtain an explicit waiver of the conflict from the therapist. The opinion noted along the way that Nevada is a "two client" (our phrase) jurisdiction. The problem here was that there was a conflict between the two clients. The parties agreed that there was a conflict, but the opinion does not specify the precise nature of the conflict.
(posted April 15, 2019) Calvert v. Mayberry, 2019 WL 1510451 (Col. April 8, 2019). Lawyer gave (lent?) $193,000 to Client with no written agreement and no compliance with Rule 1.8(a). Lawyer brought this case against Client to recover that money. The trial court granted Client summary judgment. The appellate court affirmed. In this opinion the Supreme Court affirmed. The primary basis for all three rulings was that an agreement made in violation of Rule 1.8(a) is not enforceable.
(posted April 19, 2019) Platinum Props. Investor Network, Inc. v. Sells, 2019 WL 1670893 (S.D. Fla. April 17, 2019). Trademark infringement case with related state claims. Two law firms appeared jointly for the four named defendants. Plaintiffs moved to disqualify both law firms. In this opinion the magistrate judge denied the motion. The court found that the defendants' positions were "closely aligned" and that there was no conflict in representing all of them. Moreover, the defendants consented to the joint representation and were given an opportunity to consult with independent counsel.
(posted April 15, 2019) Pence v. Slate, 2019 WL 1560059 (Wis. App. April 11, 2019). Lawyer prepared Decedent's estate plan, including a trust to be funded by a life insurance policy. The Decedent appointed Lawyer's wife trustee. Prior to Decedent's death the trustee allowed the policy to lapse. The intended beneficiaries brought this case against Lawyer, Lawyer's wife, and several other defendants. Because the beneficiaries were not Lawyer's clients, the trial court granted summary judgment to Lawyer. In this opinion the appellate court affirmed. The court noted Wisconsin precedent holding that, with certain exceptions, non-clients may not sue lawyers. Two exceptions are fraud-related. An additional estate planning exception is where a non-client is harmed by lawyer negligence that "thwarted the intent of the . . . client." No exception applied to this case. As to the plaintiffs' claims that Lawyer had a conflict of interest, the court said that Decedent must have known about Lawyer's spousal relationship with the trustee. Plus, this was not a "meaningful conflict of interest for purposes of this case."
(posted March 22, 2019) Cedar Rapids Bank & Trust Co. v. Mako One Corp., 2019 WL 1283988 (8th Cir. March 21, 2019). Corp. hired Law Firm to draft a tax credit bond to finance a building restoration project. Bank purchased the bond. When a default occurred, Bank hired Law Firm to bring this foreclosure proceeding against Corp. Corp. moved to disqualify Law Firm. The trial court denied the motion. In this opinion the Eighth Circuit reversed, based upon an "inadequate" written advance waiver signed by Law Firm, Corp., and Bank, before hostilities broke out. The court said "the letter makes no pretense to elucidate any risk involved," only that the parties' interests "are or may be adverse." The letter also contained an unfortunate drafting error. There is more, but the reader should get the idea by now.

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