Source: https://lawprofessors.typepad.com/legal_profession/economics/
Timestamp: 2019-04-19 23:00:44+00:00

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The dispute here is between two firms that represented plaintiffs in a large antitrust class action. The appellant, Criden & Love, seeks from the Saveri Law Firm a larger share of the award of attorneys’ fees in the action, asserting contentions sounding in contract, tort, and unjust enrichment. The district court rejected all of appellant’s claims. For the reasons that follow, we affirm.
The relationship between the two firms in this case is a product of the antitrust laws. The Supreme Court held decades ago that the only consumers who can challenge anticompetitive conduct are those who purchase goods or services directly from the supplier. See Ill. Brick Co. v. Illinois, 431 U.S. 720 (1977). Since many buyers may be unwilling to rock the boat with their business partners, the universe of potential antitrust plaintiffs is therefore relatively small. Firms like Criden & Love, the appellant here, step into the void, finding plaintiffs willing to sue and pairing them up with large antitrust specialists who can pursue their claim. They work for a fee, which can be substantial. In the case of Criden & Love, the typical referral fee is 12.5% of the larger firm’s total fee.
In February of 2010, Criden & Love identified a plaintiff who was willing to challenge anticompetitive conduct in the titanium dioxide market. It referred this client, Isaac Industries, to two law firms, Berger Montague and Lieff Cabraser, at the usual 12.5% rate. Isaac Industries then brought its antitrust claim, alleging price-fixing for titanium dioxide. This case was consolidated with a similar case brought by Haley Paint.
In April of 2011, Lieff Cabraser became co-lead counsel over the consolidated action, known as the “TiO2 Litigation.” A third firm, East Coast Colorants d/b/a/ Breen Color Concentrates (“Breen”), joined the case as a plaintiff a few months later. Breen had no connection with Criden & Love.
The trouble began in May of 2012, when an antitrust partner at Lieff Cabraser, Joseph Saveri, left to start his own enterprise, the Joseph Saveri Law Firm. Prior to starting his own firm, while still working at Lieff Cabraser, Saveri had filed a notice to appear on behalf of Isaac Industries. Saveri’s new firm soon took on Breen, Isaac Industries’ co plaintiff, as a client in the TiO2 litigation, entering an appearance on its behalf on June 1, 2012. Saveri’s firm never had an agreement with Isaac Industries, which was still represented by Lieff Cabraser.
Saveri thereafter sought the lucrative lead counsel role, which he obtained in August of 2012. No firms in the case objected to his motion to become lead. Ultimately, the class action was settled for a considerable sum of money. The attorneys’ fees in the case totaled more than $54 million. As co-lead counsel, the Saveri Law Firm was awarded approximately $10 million, based entirely on work performed after Saveri left Lieff Cabraser. The other firms representing the plaintiffs, including Lieff Cabraser, Berger Montague, and Criden & Love, were also compensated for their work on the case. In addition, Criden & Love was paid referral fees from Lieff Cabraser and Berger Montague, pursuant to the referral agreements for Isaac Industries. All told, Criden & Love was awarded $ 2.8 million for its role in the case, including more than $900,000 for its referral agreements.
The dispute in this case centers around what happened after Saveri left Lieff Cabraser to start his own firm. Saveri called Kevin Love, a Criden & Love partner, to notify him of his impending departure. On the call, Mr. Love alleges that he told Saveri he would still expect payment of the referral fee that Criden & Love entered into with Lieff Cabraser. Both parties acknowledge that at no point during the call did Saveri accept the request for a referral fee. After Saveri’s firm was added as co-lead counsel, Criden & Love sent two emails to Saveri attempting to confirm the referral agreement, but Saveri did not respond to either message. Once the case settled and the fees were distributed, Saveri communicated to Criden & Love that they had no agreement and no referral fee would be paid.
the court held for Saveri on all counts. Joseph Saveri Law Firm, Inc. v. Michael E. Criden, PA, 2017 WL 3917003 (D. Md. Sept. 7, 2017). On Criden & Love’s contract theories, the court noted inter alia that the parties had never formed an express or implied contract. On the equitable claims, the court held that the “equity does not favor Criden & Love.” Id. Saveri was only compensated for work after leaving Lieff Cabraser, while Criden & Love was paid both for its own work on the case and for its referral of Isaac Industries. Finally, the court rejected Criden & Love’s fraud claim, finding the argument that Saveri’s failure to strike an appearance on behalf of Isaac Industries constituted fraud to be “unavailing.” Id. This appeal followed.
Both parties here are sophisticated actors and repeat players in the market for antitrust litigation. Both could have done more to clarify the terms of the relationship between them, and both failed to do so. It is not the job of the court to do this for them. In the absence of any sign that Saveri accepted the terms offered by Criden & Love, we must leave the negotiation where we found it. As such, we see nothing more than an offer that was never accepted. Since there are no disputed facts that would lead to a different conclusion, the district court was correct to resolve this question as a matter of law.
(1) Under District of Columbia law does a dissociated partner owe a duty to his or her former law firm to account for profits earned post-departure on legal matters that were in progress but not completed at the time of the partner’s departure, where the partner’s former law firm had been hired to handle those matters on an hourly basis and where those matters were completed at another firm that hired the partner?
(2) If the answer to question (1) is “yes,” then does District of Columbia law allow a partner’s former law firm to recover those profits from the partner’s new law firm under an unjust enrichment theory?
(3) Under District of Columbia law what interest, if any, does a dissolved law firm have in profits earned on legal matters that were in progress but not completed at the time the law firm was dissolved, where the dissolved law firm had been retained to handle the matters on an hourly basis, and where those matters were completed at different pre-existing firms that hired partners of the dissolved firm post-dissolution?
Our phrasing of the questions should not restrict the Court’s consideration of the issues. The Court may rephrase a question as it sees fit in order to best address the contentions of the parties or the specifics of D.C. law.
An opinion of the North Carolina Court of Appeals affirms a disqualification order based on the witness-advocate rule.
This case presents the question of whether a categorical exception to the applicability of Rule 3.7 of the North Carolina Rules of Professional Conduct exists in fee collection cases. Harris & Hilton, P.A. (“Harris & Hilton”) appeals from the trial court’s order disqualifying Nelson G. Harris (“Mr. Harris”) and David N. Hilton (“Mr. Hilton”) from appearing as trial counsel in this action based on their status as necessary witnesses. Because this Court lacks the authority to create a new exception to Rule 3.7, we affirm the trial court’s order.
On 10 June 2015, Harris & Hilton filed the present action in Wake County District Court against James C. Rassette (“Defendant”) to recover attorneys’ fees for legal services the firm had allegedly provided to Defendant prior to that date. The complaint asserted that Harris & Hilton was entitled to recover $16,935.69 in unpaid legal fees. On 13 November 2015, Defendant filed an answer in which he asserted various defenses, including an assertion that no contract had ever existed between the parties.
On 10 June 2016, a pre-trial conference was held before the Honorable Debra S. Sasser. During the conference, Judge Sasser expressed a concern about the fact that Harris & Hilton’s trial attorneys — Mr. Harris and Mr. Hilton — were also listed as witnesses who would testify at trial on behalf of Harris & Hilton. After determining that Mr. Harris and Mr. Hilton were, in fact, necessary witnesses who would be testifying regarding disputed issues such as whether a contract had actually been formed, Judge Sasser entered an order on 20 June 2016 disqualifying the two attorneys from representing Harris & Hilton at trial pursuant to Rule 3.7. On 27 June 2016, Harris & Hilton filed a notice of appeal to this Court.
Harris & Hilton does not dispute the fact that (1) Mr. Harris and Mr. Hilton will both be necessary witnesses at trial; (2) their testimony will encompass material, disputed issues; and (3) none of the three above-quoted exceptions contained within Rule 3.7 are applicable. Nor does it contest the fact that a literal reading of Rule 3.7 supports the trial court’s ruling. Instead, it asks this Court to adopt a new exception based on its contention that Rule 3.7 should not be applied in fee collection actions to disqualify counsel from both representing their own firm and testifying on its behalf.
Harris & Hilton argues that permitting a law firm’s attorney to serve both as trial counsel and as a witness in a fee collection case is no different than allowing litigants to represent themselves pro se. It is true that litigants are permitted under North Carolina law to appear pro se — regardless of whether the litigant is an attorney or a layperson. See N.C. Gen. Stat. § 1-11 (2015) (“A party may appear either in person or by attorney in actions or proceedings in which he is interested.”); N.C. Gen. Stat. § 84-4 (2015) (“[I]t shall be unlawful for any person or association of persons, except active members of the Bar . . . to practice as attorneys-at-law, to appear as attorney or counselor at law in any action or proceeding before any judicial body . . . except in his own behalf as a party thereto[.]” (emphasis added)).
However, the present case does not involve the ability of Mr. Harris or Mr. Hilton to represent themselves on a pro se basis. Instead, they seek to represent their law firm — a professional corporation — in a suit against a third party while simultaneously serving as witnesses on their firm’s behalf as to disputed issues of fact. It is well established that an entity such as Harris & Hilton is treated differently under North Carolina law than a pro se litigant. See LexisNexis, Div. of Reed Elsevier, Inc. v. Travishan Corp., 155 N.C. App. 205, 209, 573 S.E.2d 547, 549 (2002) (holding that under North Carolina law, a corporation is not permitted to represent itself pro se).
Harris & Hilton also makes a policy argument, contending that the current version of Rule 3.7 is archaic and fails to take into account the disproportionate economic burden on small law firms that are forced to hire outside counsel to litigate fee collection cases. However, in making this argument, Harris & Hilton misunderstands the role of this Court given that it is asking us not to interpret Rule 3.7 but rather to rewrite it — a power that we simply do not possess.
we cannot say that the trial court abused its discretion by applying Rule 3.7 as written as opposed to creating a new exception that neither appears within the Rule itself nor has been recognized by North Carolina’s appellate courts. Accordingly, we affirm the trial court’s disqualification order.
In February 2009, Menkes engaged Manheimer to act as co-counsel and provide advice in the action. Their written agreement provided that Manheimer would receive 20% of net attorneys' fees if the case settled before trial and 25% once jury selection commenced. Neither attorney informed the clients of Manheimer's involvement, although Manheimer believed Menkes had done so.
In August 2009, Menkes wrote to Manheimer unilaterally discharging him and advising him that his portion of the fees would be determined on a quantum meruit basis. Manheimer did not respond to Menkes; he did no further work on the case.
The court here affirmed the Appellate Division for the First Department.
We conclude that Menkes's agreements with Manheimer are enforceable and entitle Manheimer to 20% of net attorneys' fees. Menkes's attempt to use the ethical rules as a sword to render unenforceable, as between the two attorneys, the agreements with Manheimer that she herself drafted is unavailing. Her failure to inform her clients of Manheimer's retention, while a serious ethical violation, does not allow her to avoid otherwise enforceable contracts under the circumstances of this case (see Samuel v Druckman & Sinel, LLP, 12 NY3d 205, 210 ). As we have previously stated, "it ill becomes defendants, who are also bound by the Code of Professional Responsibility, to seek to avoid on 'ethical' grounds the obligations of an agreement to which they freely assented and from which they reaped the benefits" (Benjamin v Koeppel, 85 NY2d549, 556  [citation omitted]). This is particularly true here, where Menkes and Manheimer both failed to inform the clients about Manheimer's retention, Menkes led Manheimer to believe that the clients were so informed, and the clients themselves were not adversely affected by the ethical breach.
Incurred and future legal fees to defend criminal charges against former Massey Energy chief Don Blankenship must be paid by the company that acquired Massey, according to a Delaware Court of Chancery decision issued today.
This advancement action involves some unusual facts but an all too common scenario: the termination of mandatory advancement to a former director and officer when trial is approaching and it is needed most.
Plaintiff Donald L. Blankenship is the former Chief Executive Officer and Chairman of Massey Energy Company, which is now known as Alpha Appalachia Holdings, Inc. (“Massey”). Blankenship held those positions when there was a tragic explosion at a Massey subsidiary’s coal mine in West Virginia in April 2010, killing 29 miners. In June 2011, after Blankenship had retired from Massey, Alpha Natural Resources, Inc. (“Alpha”) acquired Massey. For several years after the explosion, Massey and Alpha (together, the “Defendants”) honored Blankenship’s rights to advancement and paid his legal expenses relating to various civil proceedings and a federal criminal investigation that had been launched as a result of the explosion.
In the wake of the indictment, Alpha stopped paying Blankenship’s legal fees. Alpha management, with approval from Alpha’s board of directors, then initiated a process to review the company’s indemnification and advancement obligations to Blankenship. Alpha focused on an unusual undertaking Blankenship had signed in April 2011 (the “Undertaking”), which states, in relevant part, that Massey’s indemnification and advancement obligations to Blankenship are “contingent upon [certain] factual representations and undertakings,” including a representation that, in performing his duties as a director and officer of Massey, Blankenship “had no reasonable cause to believe that [his] conduct was ever unlawful.” In late January 2015, after a process described below, Philip Cavatoni, an Alpha officer and Massey director, determined that Blankenship had breached that representation (the “Determination”). Based on the Determination, Alpha asserts that Blankenship is no longer entitled to advancement of any of his legal expenses from Massey.
Defendants must (1) advance Blankenship’s unpaid legal expenses incurred in connection with the federal criminal investigation and the Criminal Proceeding and (2) pay his reasonable expenses of litigating this action. Counsel shall confer and submit an implementing order within five business days, providing for the foregoing payments to be made within ten business days of entry of judgment.
A verdict for a plaintiff law firm for fees allegedly due on a contingent fee contract was reversed by the New York Appellate Division for the First Judicial Department.
Plaintiff, Bellinson Law, LLC, brought this breach of contract claim against its former client, defendant Robert Iannucci, to recover an unpaid contingent fee following its representation of defendant in a federal civil rights action. Pursuant to a Retainer Agreement and an Addendum to the Retainer Agreement (Addendum), defendant agreed to pay plaintiff a contingent fee if the case settled before jury selection was completed. However, when the case settled prior to trial for the amount of $2.125 million, defendant refused to pay plaintiff the agreed upon fee, asserting that plaintiff failed to perform under the contract. Plaintiff then commenced this action, seeking the unpaid attorney fees.
During the jury charge, the trial court presented the jury with a verdict sheet containing the three following interrogatories: (1) was there a contract between the parties? (2) did plaintiff perform its obligations under the contract? (3) was defendant obligated to pay plaintiff for its services under the contract? Following deliberations, the jury answered question one yes, concluding there was a contract between the parties, but responded no to question two, finding that plaintiff had not performed its obligations under that contract. When asked by the court, in response to the third question, if the defendant was obligated to pay plaintiff for its services under the contract, the jury answered "yes." Before the jury was discharged, defendant's counsel asked to speak to the court and a side bar was held. We do not know what was discussed at the side bar. The jury was then discharged.
This case presents an issue of first impression: whether an association that has provided support for litigation, without being a named party in that litigation, has engaged in protected petitioning activities for the purposes of G.L. c. 231, § 59H. The defendant, the New England Regional Council of Carpenters, appeals from a Superior Court judge's denial of its special motion to dismiss a suit by the town of Hanover (town) claiming that the defendant engaged in abuse of process in prior legal proceedings. Because we conclude that support of litigation constitutes protected petitioning activity within the meaning of G.L. c. 231, § 59H, and that here, the town did not demonstrate that the defendant's right to petition was "devoid of any reasonable factual support or any arguable basis in law," Office One, Inc. v. Lopez, 437 Mass. 113, 123 (2002), we allow the defendant's special motion to dismiss.
TOWN OF HANOVER vs. NEW ENGLAND REGIONAL COUNCIL OF CARPENTERS, SJC-11396.
A lawyer's attempt to recover unpaid fees failed in a decision affirming dismissal of the claim by the New York Appellate Division for the Second Judicial Department.
Except in limited circumstances, where an attorney institutes an action to recover a fee, the attorney must provide written notice by certified mail or by personal service of the client's right to elect to arbitrate and must allege in the complaint that the client received notice of his or her right to pursue arbitration and did not file a timely request to arbitrate (see 22 NYCRR 137.6). A plaintiff's failure to provide the defendant with written notice of his or her right to elect to submit the fee dispute to arbitration, and the failure to allege in the complaint that the defendant received such notice and did not file a timely request for arbitration, require dismissal of the complaint (see Herrick v Lyon, 7 AD3d 571). Here, the Supreme Court properly dismissed the complaint upon finding that the plaintiff failed to properly serve the defendant with written notice of his right to arbitrate the fee dispute, and upon the plaintiff's failure to allege in the complaint that the defendant received such notice and did not file a timely request for arbitration (see 22 NYCRR 137.6; Herrick v Lyon, 7 AD3d 571).
In addition, the Supreme Court properly found that the plaintiff failed to comply with the requirements of 22 NYCRR 1215.1 and failed to establish that he was entitled to recover legal fees in quantum meruit. Except in limited circumstances, an attorney must provide his or her client with a written letter of engagement or enter into a written retainer agreement explaining, inter alia, the scope of the legal services to be provided, the fees to be charged, and the expenses and billing practices (see 22 NYCRR 1215.1). An attorney's noncompliance with 22 NYCRR 1215.1 does not preclude him or her from recovering the value of professional services rendered on a quantum meruit basis (see Seth Rubenstein, P.C. v Ganea, 41 AD3d 54). Nonetheless, an attorney who fails to comply with rule 1215.1 bears the burden of proving the terms of the retainer and establishing that the terms of the alleged fee arrangement were fair, fully understood, and agreed to by the client (see id.). Here, the court properly found that the plaintiff failed to comply with 22 NYCRR 1215.1 and failed to establish that the terms of the fee arrangement were fair, fully understood, and agreed to by the defendant.
The District of Columbia Court of Appeals has affirmed an abritration award that resolved a dispute over the allocation of attorneys' fees in a class action suit that had been litigated in California.
The arbitration involved several attorneys and law firms, most based in the District of Columbia. After receiving the arbitrator's award, appellants... unsucessfully attempted to reopen the attorneys' fees issue in the California trial court. When that efort failed on procedural grounds, [they] filed a motion in the Superior Court of the District of Columbia to vacate the arbitration award on the ground that the arbitrator exceeded his powers and committed misconduct by denying them due process.
The class action case involved discrimination claims by television writers over the age of 40.
The Tennessee Court of Appeals has reversed and remanded an order dismissing claims brought against a Washington, D.C. attorney by a Memphis law firm.
The D.C. attorney sought the assistance of the Memphis firm in connection with a lawsuit filed in Maryland. A contract was entered into for the attorney and the firm to serve as co-counsel.
The Memphis firm sued the attorney for not paying one-half of the expenses, as provided for in the contract.
The Court reversed and remanded a summary judgment in favor of a lawyer and law firm on appellant’s claim for reimbursement of all or part of a $10,000 fee paid during representation of appellant in a criminal matter after he plead guilty in lieu of going to trial. The Court held that the written fee agreement between the parties for trial preparation and trial, consisting of letters between the parties, was ambiguous as to the question of whether appellant would be entitled to a partial reimbursement of the subject fee in the event that the case did not proceed to trial. In light of the ambiguous nature of the parties’ fee agreement, there were genuine issues of material fact that could not properly be resolved via summary judgment. Because the parties did not create a fee contract that addressed the issue of who was entitled to what in the event that a trial did not take place, the question would have to be resolved by a finder of fact.
NAIAD Inflatables of Newport, Inc. (NAIAD), engaged the law firm of Duffy & Sweeney, Ltd. (D&S) to defend it in a civil lawsuit brought in 2005 by the plaintiff, Stafford J. King, III. Soon, however, NAIAD became delinquent in its financial obligations to D&S. Concerned with both a large receivable and a looming trial date, D&S filed a motion to withdraw from the case. This motion was unopposed by the client or by opposing counsel. A justice of the Superior Court denied the firm’s motion. On the grounds of abuse of discretion by the hearing justice, the law firm timely appealed.
D&S filed a motion to withdraw based upon NAIAD’s failure to fulfill its financial obligations under the engagement agreement. Supported by an affidavit of counsel, the motion was properly certified and forwarded to all parties of interest in compliance with the Rules of Civil Procedure. Providing its client with ample notice, D&S made numerous requests for payments, sent reminder invoices, and warned NAIAD that D&S—based on a signed engagement agreement between the parties—would seek to withdraw as counsel if the client failed to bring the balance current. Further, D&S informed NAIAD that it would have the right to object before the Superior Court in the event that such a motion was filed. Denying the unopposed motion, the hearing justice cited Article V, Rule 1.16 of the Supreme Court Rules of Professional Conduct, and ruled that granting the motion would have a “materially adverse effect” on the interests of the clients.
In reversing the Superior Court’s denial of counsel’s motion to withdraw, the Supreme Court said that the hearing justice did not accord adequate weight to the hardship and substantial financial burden that would befall D&S if the law firm were required to continue in its representation of a nonpaying client. Moreover, the Court was of the opinion that the law firm’s request to withdraw was not presented at such a critical point in the litigation process that withdrawal would be detrimental to either the court or the client.
Imagine how difficult public debate in these partisan times can be for someone like me whose motto is "extremism in the pursuit of moderation is no vice." I haven't seen Inside Job, but I have read the reviews, good and bad, and I think I get the point. I confess to never having seen a Michael Moore "documentary," A Civil Action, or Erin Brockovitch. But this is from a reviewer, Keith Uhlich in TimeOut New York, who liked it, and it doesn't inspire me to fork over the twelve bucks: "Ferguson uses innumerable tricks of the slick-doc trade (pop-music montages; gotcha smash cuts; celebrity narration—in this case, Matt Damon). Even the title is a loaded, tragedy-invoking provocation." Nor am I enticed by the appeal to post-partisanship in the pursuit of outrage, as Uhlich describes it: "Ferguson’s trying to move beyond the political dichotomies that divide us into bellowing factions and show how rampant greed screws us all."
Since I'm about to fly off to Minneapolis to give a milk-toasty response (see above motto) to the question "Did Capitalism Fail?" (my answer: Capitalism Didn't Fail, But the Metaphors Got a "C"), I decided I ought to think for a little bit this morning whether I was wrong, and director Ferguson was right. I thought that particularly because my friend Frank Pasquale at Concurring Opinions also liked the movie a lot, and that means I have to take it seriously, if for no other reason that Frank has taught me so much on other issues. As I expected, Frank gets past the slick doc stuff (I cringe at the idea of watching the 60 Minutes-style "did you stop beating your wife?" questions) and suggests there are four arguments being made: (1) Wall Street compensation is loopy; (2) the Obama administration hasn't done anything to create reform, instead relying on the same bankers as the Bush administration; (3) the Obama administration is as taken with the revolving door cabal of "Goldman Sach alums and fail-upward regulators" in which it is no longer possible to determine who captured whom; and (4) the U.S. has turned into a financial (rather than mechanical, civil, bio, or electrical) engineering power bound to lose out to China and others in the long run. I also think Frank's review is honest in describing its own position (see contra my motto above): "I’ll be looking beyond the core of the economics profession for a compelling account of a fair and just society. When it comes to finance, progressives should also realize they have few friends in the current administration."
As you can see, I had no problem placing the Salem "witches," Saddam Hussein, and Andrew Fastow, one of the architects of the Enron scam, on the continuum. In the spirit of the movie, however, I wasn't quite sure where to place the rest of these names (or the myriad others - like God, the boogie-man, the Trilateral Commission, or the Bohemian Grove - that occurred to me).
My point is not that there are never culpable demons, but that sometimes those who we think are culpable demons are not. I have not yet been persuaded by the level of public discourse (Ann Coulter? Sarah Palin? Michael Moore? Glenn Beck? Jon Stewart? Stephen Colbert?) that we can say we've reached a level of rationality such that witch trials were then, and now is now. What is comforting is that at least I can have a reasoned and civil discussion with Frank, without the sound bites, even if we don't agree!
*UPDATE: Actually, I did come up with a reason or rationalization but it's almost as complicated as the investment vehicle, so I won't bother explaining it.
An attorney filed suit in Maryland Circuit Court for a declaratory judgment to enforce his claim to 50% of an award affirmed on appeal. He in turn appealed a decision that removed the case to the District of Columbia Bar's fee arbitration process and thereafter enforced the award in favor of the client.
...when [the attorney] elected to avail himself of the right to practice in the District of Columbia, he agreed to abide by the Rules established by the District of Columbia Court of Appeals. Pursuant to [applicable rules], [he] agreed to arbitrate a fee dispute with [the client] upon her request. [The attorney's] contention that there was no agreement to arbitrate fee disputes is without merit.
The court also rejected the contention that the issue between the parties was not a fee dispute.
Bluestone Coal and Bluestone Coal Sales, the petitioners herein, are companies engaged in the production and sale of coal. Both Bluestone companies are part of a conglomerate of twenty-nine affiliated closely-held companies owned and operated by James C. Justice, II (hereinafter “Mr. Justice”). These affiliated companies share one common General Counsel, Mr. Stephen W. Ball (hereinafter “Mr. Ball”), and the majority of these companies, including the two Bluestone companies involved in this case, are headquartered in the same office building in Beckley, West Virginia.
Mountain State, one of the respondents herein, owns and operates a coke plant in Follansbee, West Virginia, and purchases coal to convert into coke; Mountain State's principal place of business is in Wheeling, West Virginia. On October 5, 2007, Mountain State and Bluestone Coal Sales entered into a coal supply agreement whereby Bluestone Coal Sales agreed to supply all of the coal required by Mountain State's Follansbee coke operations. Bluestone Coal served as the guarantor for Bluestone Coal Sales' obligations under this agreement. When Bluestone Coal Sales failed to deliver the requisite amount of coal in accordance with the agreement's terms, Mountain State filed suit against both Bluestone Coal Sales and Bluestone Coal in the Circuit Court of Ohio County on September 9, 2008.
providing legal services for both Mountain State and Mr. Justice's companies in approximately 2005.
...it is apparent that the nature of Buchanan Ingersoll's representation of Mountain State in the underlying proceedings is “substantially related” to its prior representation of Bluestone Coal insofar as both the former and subsequent representations concern the Bluestone companies' performance, or lack thereof, under coal supply agreements under the factual, circumstantial, and legal contexts of the two cases.
Factually, the two representations are virtually the same. Both the Coal Sourcing case and the instant litigation involve the same type of contract: a coal supply agreement. The agreements both involve the same mine, i.e., the Keystone Mine, and the same coal from that same mine. In both proceedings, Bluestone Coal has been named as a party defendant with respect to the failure to deliver coal as specified by the subject coal supply agreements and is ultimately liable for any obligations arising thereunder.
Circumstantially, the two representations also are substantially related and strikingly similar insofar as “the current matter involves the work the lawyer performed for the former client.” Both cases allege deficient performance of a coal supply agreement, which is precisely the type of case in which Buchanan Ingersoll formerly represented Bluestone Coal. Specifically, Buchanan Ingersoll formerly represented Bluestone Coal as a defendant defending against allegations of a failure to perform a coal supply agreement in the Coal Sourcing case, and now is currently representing Mountain State as a plaintiff claiming that the coal for which it had contracted has not been delivered pursuant to the governing coal supply agreement in the instant litigation.
Legally, the two representations are nearly identical such that “there is a substantial risk that representation of the present client will involve the use of information acquired in the course of representing the former client, unless that information has become generally known.” ...Under the facts of this case, not only is there a substantial risk that the attorney could have used information obtained from the former client in the prior representation, there is actual evidence that such knowledge has been used to the former client's detriment. In both cases, Bluestone Coal was named as a party defendant. During the course of the Coal Sourcing litigation, Bluestone Coal asserted a defense of force majeure to excuse its nonperformance of the subject coal supply agreement. Reliance on this defense required Bluestone Coal to reveal its confidential coal supply agreements to its counsel. During the litigation initiated by Mountain State, Buchanan Ingersoll, on behalf of Mountain State, requested documents from Bluestone Coal regarding its prior reliance on the defense of force majeurebefore Bluestone Coal had filed an answer to Mountain State's complaint or had indicated what, if any, defenses it intended to assert in response to such claims. Because Bluestone Coal had not yet attempted to rely upon the defense of force majeure, and had not even had an opportunity to respond to Mountain State's complaint, it is apparent that Buchanan Ingersoll, from its former representation, possessed sufficient knowledge of Bluestone Coal to anticipate the defense upon which it may have relied in response to Mountain State's complaint. This strategy indicates that Buchanan Ingersoll used information it obtained from its former representation of Bluestone Coal to the detriment of its former client. Thus, because the subject matter of Buchanan Ingersoll's former and subsequent representations are virtually the same, it is clear that the third criterion for disqualification has been satisfied.
The Supreme Court of Ohio ruled today that an award of attorney fees in a civil lawsuit is distinct from an award of punitive damages, and the public policy of the state does not prevent an insurance policy from providing coverage for attorney fees when they are awarded solely as a result of an award for punitive damages.
Applying that analysis to a Cuyahoga County personal injury case, the Court found that an auto insurance policy issued to Linda Lahman provided coverage for a jury’s award of attorney fees to another motorist, Kimberly Neal-Pettit, who was injured in an auto accident caused by Lahman. The court’s 4-2 majority decision was authored by Justice Judith Ann Lanzinger.
Neal-Pettit was injured in 2003 when her vehicle was hit by Lahman, who was driving while intoxicated and fleeing the scene of an earlier collision. Neal-Pettit sued Lahman for damages arising from her injuries.
A jury awarded Neal-Pettit compensatory damages of $113,800 and an additional $75,000 in punitive damages. Based on a finding that Lahman had acted “with malice” in causing Neal Pettit’s injuries, the jury also awarded Neal-Pettit attorney fees that the court later set at $46,825 along with an additional sum for litigation expenses. Lahman’s insurance company, Allstate, paid Neal-Pettit the amounts awarded as compensatory damages, interest and expenses, but denied any coverage under its policy for either the punitive damages or attorney fees awarded by the jury.
Neal-Pettit filed suit against Allstate in the Cuyahoga County Court of Common Pleas seeking payment for the attorney fee portion of the jury verdict. The trial court granted summary judgment in favor of Neal-Pettit. Allstate appealed, arguing that it had not contracted to pay attorney fees and that an attorney-fee award is an element of punitive damages, which public policy prevents an insurer from covering. The 8th District Court of Appeals affirmed the trial court’s decision, holding that attorney fees are “conceptually distinct” from punitive damages and that attorney fees were not expressly excluded from coverage by the language of the Allstate policy issued to Lahman. Allstate sought and was granted Supreme Court review of the 8th District’s decision.
Finally, the Court disagreed with Allstate’s claim that it would be against public policy for an insurer to pay attorney fees on behalf of a policyholder when those fees are awarded solely as a result of a punitive damages award.
Justice Lanzinger’s opinion was joined by Justices Paul E. Pfeifer, Maureen O’Connor and Robert R. Cupp.
Justice Evelyn Lundberg Stratton entered a dissenting opinion, joined by Justice Terrence O’Donnell, in which she disputed the majority’s conclusion that an award of attorney fees that is based solely on an award of punitive damages is nevertheless separate and distinct from those punitive damages.
Chief Justice Eric Brown did not participate in the Court’s deliberations or decision in the case.
The Maryland Court of Appeals affirmed a trial judge's order that a husband pay his wife's attorney's fees in a case involving custody, visitation and child support for the couple's minor children. The wife's submissions documented legal work on her behalf by a non-profit domestic violence clinic that had represented her on a pro bono basis. The trial judge awarded the wife custody of the children and ordered the husband to pay $5,000.00 to the clinic for its legal work on her behalf.

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