This Kentucky woman was sitting home, minding her own business when a plane crashed into the house.  She hired an attorney.

"An English teacher at Pineville High School, Osborne was devastated by the crash, which destroyed her home and belongings. Her blood pressure skyrocketed and her diabetes flared, according to her doctor, and each time she returned to sift through the contents of her former home, she broke into tears, she said.

She thought Keeney’s fee was expensive, but he promised that she had a strong case against the pilot, who owned the plane.

The National Transportation Safety Board’s findings, while not admissible in court, said the probable causes of the crash were inadequate maintenance and the pilot’s decision to fly with a "known deficiency."

Before the pilot took off, a mechanic saw him spraying fuel from a squirt bottle into an engine, which then backfired and burst into flames. The pilot departed anyway but got only 50 feet off the ground before losing power and crashing into Osborne’s attic. The pilot and a passenger survived, but were seriously injured.

The month after retaining Keeney, they met with the company’s adjuster, who had already cut checks for $151,390 for the loss of her home.

Even though Keeney had done "nothing to earn it," Sitlinger said, Keeney took 20 percent — about $30,000. After paying off her $96,000 mortgage, Osborne was left with about $24,000.

A few months later, after Osborne painstakingly worked to draw up an inventory of the home’s contents, State Farm paid out another $72,051; Keeney took 20 percent — again, "for no work," Sitlinger said.

Keeney claimed he sent $5,573 to Osborne’s ex-husband, David Osborne, to cover items he had stored in the house, but David Osborne swore later in a deposition that he never received it.

When she inquired about a third check from State Farm, for $11,000 in replacement costs, she discovered Keeney had deposited the check in his personal account — rather than an escrow account, as required by ethics rules, Sitlinger said.

Keeney had endorsed her signature, which he said he had the authority to do under a contract he produced only after Osborne sued him. He also testified that she had authorized him to put the money in his personal account.

"That’s a lie," Sitlinger told the jury. "I can’t sugarcoat it."

Supersize it!  Not a Wendy’s advertising pitch. but this legal malpractice case took place in one.  This case is being cited for Federal jurisdiction and removal [not areas we cover often], but for us, the issue will be whether employees have standing and privity to sue attorneys hired by their employer.  We think not, and will follow.

"This consolidated action was initiated by plaintiffs, including present and former employees of defendant Café Express LLC (“CEL”). CEL is a restaurant established by defendant Augusta Foods, LLC (“Augusta”), with majority stock holder being defendant Wendy’s International (“Wendy’s”). Plaintiffs alleged, that in exchange for weekly payroll deductions, defendants CEL, August and Wendy’s agreed to arrange to file and prosecute the employees’ Applications for Alien Employment certification (“Applications”) under The Life Act Amendments of 2000, 8 U.S.C. § 1255 (i) (1) (B) and (C) (the “Life Act”). The Life Act enabled certain aliens to apply for an adjustment to permanent resident status, provided the Application was submitted by April 30, 2001.

The restaurant defendants arranged with various law firms to prosecute the Applications, but the plaintiffs contended the defendant attorneys failed to file the Applications by the deadline. Additionally, despite this filing error, the restaurant defendants failed to notify the plaintiffs until July of 2006 and continued to deduct weekly fees. The plaintiffs alleged the defendants were liable under the following legal theories: legal malpractice, breach of contract, negligence, negligent misrepresentation, unjust enrichment, restitution, conversion, breach of fiduciary duty, fraud or intentional misrepresentation. "

This case, similar tothose in which union employees are unable to sue an attorney provided to them by the union, will no doubt be reported again.  Follow with us.

IPOs mean big money, Securities trading means big money, and the REFCO IPO has led to a $1 Billion legal malpractice case.  This story is all about big money.

"A court-appointed trustee responsible for retrieving funds for Refco Inc. creditors has sought more than $2 billion in damages from a prominent Chicago law firm, three accounting firms and several investment banks that played a role in Refco’s 2005 initial public offering.

The trustee, Marc S. Kirschner, filed a lawsuit Tuesday against law firm Mayer, Brown, Rowe & Mawe; accounting firms Grant Thornton, Ernst & Young and PricewaterhouseCoopers; and Credit Suisse Securities, Bank of America and Deutsche Bank Securities, the investment banks involved in the $583 million IPO.

The IPO, Kirschner said in an interview, was the "cashing-out portion" of a long-running fraud. It came after years of building an illusion that Refco was a successful brokerage, an effort begun by its former Chief Executive Phillip Bennett, but one that could not have been carried out without the help of outside professionals. "

Bennett has pleaded not guilty to fraud charges connected to $430 million worth of hidden bad debt.

Law.Com reports: "A unanimous panel of the 4th District Court of Appeal upheld a $1 million legal malpractice judgment against the law firm Gunster Yoakley & Stewart awarded to the heirs of the Gannett newspaper fortune.

The case arose from a dispute over the estate of Charles V. McAdam Jr., a wealthy Palm Beach, Fla., resident who was married to Sarah Gannett — daughter of Frank Gannett, the founder of one of the largest newspaper chains in the country. His two sons sued Gunster, shareholder Daniel A. Hanley and JPMorgan for breach of fiduciary duty, constructive fraud, civil conspiracy and unjust enrichment.

On Wednesday, the 4th DCA panel, in an opinion written by Judge Mark E. Polen, said the "plaintiffs showed that their father’s intent, as expressed in his will, was frustrated by the negligence of Gunster Yoakley and that, as a direct result of such negligence, their legacy was diminished."

Attorneys for two sons of McAdam could not be reached for comment. Gunster Yoakley did not provide comment by deadline Wednesday. The firm’s attorneys, Louis Mrachek and Alan Rose of Mrachek Fitzgerald and Rose in West Palm Beach, did not return phone calls seeking comment. "

This case takes a graph to try to understand.  Here is a legal malpractice case in Texas, involving BP and an explosion.

Plaintiffs hire attorney Krist to sue BP, after an explosion.  Krist successfully sues BP and settles the case, taking no fee.  Krist represented the husband only, and not the wife in a loss of consortium claim.

Then Krist moves to the other side, and starts to defend BP in other explosion cases.  Plaintiff sues Krist, using a rival and antagonistic attorney to sue.  Claims that Krist settled for too little, should have represented wife, and sold plaintiff out.

"The high-stakes battle over whether Houston lawyer Ronald D. Krist should help defend BP from suits filed over a deadly explosion at the company’s Texas City refinery took another twist on Monday when a former client who had hired Krist’s firm to sue BP over the explosion filed a professional negligence suit against Krist, the firm and others.

Jose L. Elizondo, who filed Jose L. Elizondo v. Ronald D. Krist, et al. in state court in Harris County on Aug. 20, is one of four individuals who hired the Krist Law Firm to seek damages from BP for the 2005 explosion, which killed 15 people and caused injuries and property damage.

Elizondo is represented by John M. O’Quinn and Michael J. Lowenberg of the O’Quinn Law Firm of Houston.

In early 2006, Elizondo and three other clients accepted settlements — without filing suits — that Ronald Krist negotiated with BP. Krist subsequently signed on to help defend BP in other litigation related to the explosion. "

Small town law is a different animal.  NYC lawyers often have no experience, or forget how different law is in the outlying districts.  The NY Times recently ran a series of articles on justice courts upstate, and on the thousands of non-lawyer judges there.

Here is a shocking story.   Small town judge [actually a judge in several small towns] who also has a law practice believes X scratched his Maserati.  He has X arrested, and then, while the case is on the Judge’s docket, conditions a dismissal or a transfer to some other judge on restitution.

Conflict of interest?  Well, its hard to argue otherwise. "Hartzman ended up being criminally charged with scratching the car, and while the case was pending on Korpita’s docket, the judge pressured Hartzman to pay for the damage, the complaint says.

The suit, filed Aug. 13 in Newark, N.J., includes a civil rights count under 42 U.S.C. 1983, a deceit count and a malicious abuse of legal process count against Korpita, who sits in Rockaway Borough.

Hartzman also sued Korpita and the police department for malicious prosecution. And he claims that Korpita, the borough and the police intentionally or negligently inflicted emotional distress, falsely arrested and imprisoned him, and wrongfully enforced the law. The suit alleges that the police took Hartzman into custody for several hours without charging him.

Hartzman is seeking declaratory and injunctive relief finding that Korpita is unfit to serve on the bench and enjoining him from doing so. In addition, Hartzman is seeking compensatory and punitive damages. The suit is Hartzman v. Korpita, 07-3848. "

 

This interesting twist on an old fashioned desire to win an appeal comes from Texas.  Attorney brings legal malpractice case and loses.  He goes to a hearing with his own court reporter, saying it’s to capture any off the record comments by the judge, "in order to to capture for purposes of an appeal any off-the-record comments Walker might make during the hearing that explained the reasoning behind his decision. "

Don’t people use yellow pads anymore?

 

 

First, our disclosure.  We were a prosecutor, and we have done a little criminal defense work, but we have never been in this position, as told by Law.Blog

"A public defender in Ohio was arrested on Thursday for contempt of court after he declined to move forward with a misdemeanor assault trial he had been assigned just a day earlier. At the start of the trial he told the judge he was unprepared"  in Ravenna, Ohio

"Before trial, Judge Plough had reportedly given the public defender, Brian Jones, an extra two and a half hours to prepare. Jones was released from jail on Friday, and his contempt hearing is set for this Friday.

Plough didn’t comment to ABC News but told the Record-Courier: “The public defender’s office is not going to impede justice in Portage County."

Legal malpractice is not just about missed personal injury statutes, nor about simple failures in calendar practice.  Here is an anti-trust legal malpractice case involving Mylan Labs and the Eliot Disner law firm. The lab paid out more than $ 150 million in penalties and disgorgement.

"In June, Mylan Laboratories Inc. and UDL Laboratories, Inc., one of its subsidiaries, sued their former counsel, Eliot G. Disner and his firm, Eliot G. Disner, P.C., in the Circuit Court of Monongalia County, West Virginia (Morgantown), for what they claimed was negligence and breach of contract regarding advice he provided on antitrust issues. Here’s the complaint.

Mylan alleges that Disner committed malpractice in three ways. First, he "allowed Mylan to enter into the exclusive supply agreement with Profarmaco/GYMA [who were to supply Mylan with the "active pharmaceutical ingredients" for lorazepam and clorazepate for the generic versions of the drugs on an exclusive basis] without fully investigating the issues or apprising Mylan of the substantial risks." Mylan also alleges that Disner allowed it "to engage SST/FIS [another supplier of lorazepam and clorazepate] in discussions on a similar exclusive arrangement, introducing a damaging horizontal element into an antitrust equation." Finally, Mylan alleges that after the FTC initiated an investigation into Mylan’s conduct, Disner "offered no advice to mitigate the problems facing Mylan or suggesting the risks that Mylan faced — instead advising that the FTC would accept a harmless consent decree, that the FTC had no ability to seek damages, and that the states would drop their claims when the FTC dropped its claims."

Law Com relays this story of an attorney-executor who had control of an estate’s charitible contributions, and is now being sued for his selection of where to give away the money.

"A Pittsburgh no-kill animal shelter has filed a five-count lawsuit against a Pittsburgh attorney, alleging that he illegally reduced its portion of a wealthy widow’s multimillion-dollar estate.

Animal Friends Inc. claims in the lawsuit, filed in the court of common pleas, that Gregory Harbaugh of Houston Harbaugh abused his power-of-attorney status and diverted $1.2 million from four charitable organizations to three other charitable organizations with which he or his wife has financial ties.

The suit claims that Harbaugh secured power-of-attorney status in a questionable circumstance against Rita Conrady, whose "physical and mental condition made her an easy prey."

The suit also contends that Harbaugh breached his fiduciary obligations to both Conrady and to the originally named beneficiaries. The other counts in the complaint are breach of contract, intentional interference with an inter vivos trust, and fraud in the inducement. "