Here is a Caroline Elephant blog blurb on the 7th Cir’s problem with briefs. 

 

"Hey 7th Circuit — Why Not Cut Lawyers Some Slack?

Howard Bashman, author of How Appealing, warns in an article ("Commentary: Have 7th Circuit Judges Gone Off the Deep End?") that the 7th Circuit judges Posner and Easterbrook risk becoming "fusspots and nitpickers" when they berate or sanction attorneys for minor and inconsequential mistakes. If you think that Bashman’s use of words like "fusspots and nitpickers" is a bit harsh, bear in mind that he’s merely quoting the honorable Judge Posner.

Bashman’s column discusses a recent 7th Circuit decision, Smoot v. Mazda Motors, that Bashman first wrote about in depth here at his blog. In accordance with the federal rules of appellate procedure and the Seventh Circuit’s local rules, the parties were required to set out a statement of jurisdiction and specify the basis for diversity jurisdiction and the amount in controversy. In Smoot, neither the plaintiffs nor the defendants provided an accurate statement of jurisdiction, so the court ordered the parties to provide supplemental statements describing jurisdiction. Again, as Bashman describes, the parties erred:

One of the statements said that the amount in controversy was $75,000, even though the applicable statute requires that the amount in controversy exceed $75,000 in order for diversity of citizenship jurisdiction to be proper. And because the insurance company defendant had its headquarters outside of the United States, and was created under the laws of another country, the basis for establishing diversity of citizenship was a bit more complex than in the average case.

The errors, albeit minor to many, caused Judge Posner, joined by Chief Judge Easterbrook to lash out at counsel:

We have been plagued by the carelessness of a number of the lawyers practicing before the courts of this circuit with regard to the required contents of jurisdictional statements in diversity cases. It is time … that this malpractice stopped. We direct the parties to show cause within 10 days why counsel should not be sanctioned for violating Rule 28(a)(1) and mistaking the requirements of diversity jurisdiction. We ask them to consider specifically the appropriateness, as a sanction, of their being compelled to attend a continuing legal education class in federal jurisdiction.

Judge Evans dissented, disagreeing with his colleagues’ characterization of the lawyers’ errors. Evans wrote:

Sure, the plaintiffs should have said the amount in controversy exceeds $75,000, not that it is $75,000. And sure, both sides stumbled on their declarations regarding the dual citizenship of the corporate defendants. But, at best, these are low misdemeanors; yet the court treats them like felonies. I would not label these minor flaws as ‘blunders,’ nor would I come close to saying this is ‘malpractice’ which must be stopped."

Bashman recognizes the importance of enforcing jurisdictional limits, but ultimately, he supports Evans’ approach. Bashman writes that there’s no reason to berate attorneys or elevate minor mistatements to the level of malpractice. Bashman also suggests that responsibility for ensuring jurisdiction lies with the federal district court and that judges should review the district court’s opinions to determine whether jurisdiction has been properly established.

Posted by Carolyn Elefant "

We reported on this turnaround doctor sues lawyer case last week.  Now, the trial is dalayed:

"Judge’s fall delays trial

A spirited legal malpractice trial under way in Cuyahoga County Common Pleas Court hit a bump Thursday after the retired judge hearing the case, Robert Lawther, fell in his Lakewood driveway, breaking his leg and wrist. The 79-year-old former mayor was in Lakewood Hospital where surgeons were preparing to operate. The trial is expected to resume on Tuesday with a new judge. Dr. Robert Muehrcke, 54, of Hunting Valley, sued his former lawyer, Robert Housel, whom he accused of mishandling several multimillion-dollar personal injury cases and failing to meet the legal requirements of Probate Court. Muehrcke was seriously injured in a 1996 automobile accident that ended his career as an orthopedic surgeon "

"Baron & Budd Alleges Ex-Shareholders Breached Duties by Planning Vioxx Venture With Lanie. 

The breach of contract suit Dallas lawyers Fred Baron and Lisa Blue filed against Dallas plaintiffs firm Baron & Budd over payments for the sale of their equity interest in the firm to shareholder Russell Budd just got a whole lot more interesting.

Baron and Blue allege in the original petition they filed in August that the firm and others including Budd conspired to deny them payments due under the sale contracts.

In the petition, Baron and Blue bring numerous causes of actions against the defendants, including breach of contract, breach of fiduciary duty, conspiracy to breach fiduciary duty, tortious interference, conspiracy to tortious interference, fraud or alternatively negligent misrepresentation, conspiracy to fraud, fraudulent transfer, conversion, legal malpractice, negligence, unjust enrichment, and alternatively promissory estoppel or quantum meruit.

The article.

This is an Appellate Division 1st Department case, in accountant malpractice, not legal, but the lesson is similar.  No continuous representation, as each tax year was different, staute of limitations lost on the malpractice, but fraud causes of action still permitted.

Mitschele, plaintiff-appellant v. Schultz, defendants-respondents

APPELLATE DIVISION
FIRST DEPARTMENT

"However, the fraud cause of action should not have been dismissed. Plaintiff alleges that in addition to committing malpractice by arranging her compensation and her declaration of earnings on her tax returns in a certain fashion, defendants committed fraud by falsely telling her this arrangement was "the absolute best way to do it" and "the way it’s got to be." It is asserted that this misrepresentation was made to her not in an effort to serve her interests, but for the sole benefit of Triad Corp., so as to allow the corporation to avoid certain payroll taxes and other taxes and expenses. Plaintiff asserts she relied on Schultz’s false assurances that her compensation had to be paid in this manner, and that she did not seek the advice of another accountant until March of 2001, when Schultz told her he could no longer handle her accounting or tax matters in view of her termination from Triad, and only upon consulting another accountant did she become aware of the falsity of their statements and of their malfeasance.

We reject the contention that plaintiff’s fraud claim must be dismissed as untimely because it is not "separate and distinct from the customary cause of action for malpractice" (see LaBrake v. Enzien, 167 AD2d 709, 711 [1990]). The La Brake case discussed the type of scenario in which an attorney commits legal malpractice by failing to properly commence a lawsuit, and then lies to the client with assurances that the matter is underway, and claims for both malpractice and fraud are interposed. The court there reiterated that "a defendant’s concealment or failure to disclose his own malpractice without more does not give rise to a cause of action for fraud or deceit separate and distinct from the customary malpractice action" (167 AD2d at 711). It looked to the case of Simcuski v. Saeli (supra), a case of physician malpractice followed by the physician’s concealment of the malpractice, with regard to the elements that must be established to prove a cause of action for fraud separate from the malpractice claim, concluding that without damages separate from those arising from the malpractice, a fraud claim is not made out (167 AD2d at 711-712).

Here, however, defendants’ alleged fraud is not simply the failure to disclose the malpractice based upon accounting errors. Rather, defendants are alleged to have perpetrated a fraud on plaintiff from the time they were retained to provide accounting services, in failing to disclose their concern with protecting the interests of another entity, namely, plaintiff’s employer.

The elements of a fraudulent concealment claim – concealment of a material fact which defendant was duty-bound to disclose, scienter, justifiable reliance, and injury (see Kaufman v. Cohen, 307 AD2d 113, 119 [2003]; and see Ozelkan v. Tyree Bros. Envtl. Servs., Inc., 29 AD3d 877 [2006]) – are all sufficiently pleaded by the claims which may be properly gleaned from the complaint: that defendants failed to inform plaintiff of their conflicted interests, despite their professional obligation to make such disclosure, inducing plaintiff to retain them and rely on their advice in the belief that defendants had undertaken to provide professional advice in her best interests. The incorrect advice and improper income declarations, which form the substance of the malpractice claim, constitute merely a portion of the factual predicate for the fraud claim. The fraud claim depends primarily on defendants’ failure to disclose their divided loyalties, and plaintiff’s justifiable reliance on their ability conscientiously to give her advice serving her own best interest, while the improprieties in the tax returns merely help to establish that plaintiff was injured and assess the extent of her injury.

As this Court said in Serio v. PricewaterhouseCoopers LLP (9 AD3d 330, 331 [2004]), when reinstating a fraud claim despite the prior dismissal, as time-barred, of accounting malpractice and related claims based upon the same professional relationship, fraud may still be "viable irrespective of whether some of the alleged acts and misrepresentations were mentioned in connection with the untimely causes of action sounding in professional malpractice."

Since plaintiff’s fraud cause of action is not merely a malpractice claim with a claim for concealment of malpractice superimposed on it, the parallel nature of the damages is not determinative of whether the fraud claim is governed by the shorter statute of limitations.

We are cognizant of the Court’s concern, expressed in Simcuski v. Saeli (supra), that we guard against permitting a fraud claim which is actually "subjecting [a professional] to greater exposure to liability [than the Legislature intended] in consequence of errors of professional judgment" (44 NY2d at 453). Here, however, since the fraud claim is not based simply upon errors in professional judgment, but is also "predicated on proof of the commission of an intentional tort" (id.), reinstating plaintiff’s claim of fraud is not contrary to legislative intention. "

Here is a law school problem:  Mom, Dad and Kid are riding along and are hit from the side by another car.  How many conflicts of interest can you find in this picture?  None of the attorneys representing plaintiffs, defendants, counterclaimants or counterclaimant defendants found a single problem, but the court determined that there were too many conflicts between mother driver, father owner, daughter passanger, mother counterclaim defendant, etc, to count.  At one point, the mother was arguing that her daughter had no serious physical injury as defined by the insurance law.

Here is the case cite:  Dorsainvil v. Parker, 3629/04
Decided: November 21, 2006

KINGS COUNTY