Moving from Bankruptcy court to Federal District Court, the law firm again loses:
"Firm’s Bad Faith Leaves Bad Taste of $877,000 Malpractice Tab
New York Lawyer
April 10, 2007
Reprints & Permissions
By Leigh Jones
The National Law Journal
A Minnesota federal court has found Dorsey & Whitney liable for more than $877,000 for legal malpractice, breach of fiduciary duty and acting in bad faith for its role in a botched Indian casino deal.
Affirming a U.S. Bankruptcy Court decision issued last year, U.S. District Judge Donovan W. Frank ordered Dorsey & Whitney to turn over $887,440 in legal fees it received from former clients it represented in orchestrating a finance deal gone awry for the Akwesasne Mohawk casino in upstate New York.
In a 94-page decision, the judge determined that the 600-attorney firm breached its fiduciary duty of loyalty by representing two adverse clients at the same time and failed to inform its clients that it might have committed malpractice.
A spokesman for Dorsey & Whitney said the firm disagreed with Judge Frank’s decision, which it will appeal to the 8th Circuit Court of Appeals.
Edward Gale, a partner with Leonard, O’Brien, Spencer, Gale & Sayre, in Minneapolis, represented the plaintiffs. "