Illinois Legal Malpractice Blog

The ABA Journal reported yesterday on a New York based 2nd Circuit Court of Appeals decision that came down this week reopening the case of an immigrant who was scheduled for deportation and jailed for nine months (forcing his wife and child into a homeless shelter) when his initial counsel 'failed spectacularly' by misinforming him about the date of a scheduled hearing resulting is his failure to appear and then failing to tell him of either the missed hearing or the deportation order (citing The Associated Press). The appeals court wrote, "[i]n immigration matters, so much is at stake - the right to remain in this country, to reunite a family or to work...When lawyers representing immigrants fail to live up to their professional obligations, it is all too often the immigrants they represent who suffer the consequences."  The court went on to state, "[w]e appreciate that unfortunately, calendar mishaps will from time to time occur.  But the failure to communicate such mistakes, once discovered, to the client and to take all necessary steps to correct them is more than regrettable - it is unacceptable.  It is nondisclosure that turns the ineffective assistance of a mere scheduling error into more serious malpractice."

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An article in the Chicago Daily Law Bulletin (subscrip. required), reported on a legal malpractice lawsuit that was recently filed against Illinois Attorney General, Lisa Madigan and two of her assistants by state police colonel Diane Carper alleging that the attorneys failed to adequately represent the officer in a federal case. 

According to the article, the malpractice lawsuit stems from two underlying cases.  In one, Randy Steidel spent 17 years in prison for the 1986 murders of an Illinois couple.  In 2004, Steidel's petition for habeas corpus was granted by a federal judge who found that acquittal would have been probable if Steidel's jury had heard all of the evidence.  Prosecutors then made the decision not to retry Steidel.  Steidel then proceeded to file a federal lawsuit against officials who originally investigated his case and state police officials who he maintained blocked a full reinvestigation of his case.

In 2000, Lt. Michaele Callahan was assigned to investigate the case and found evidence that undermined the case against Steidel and uncovered another potential suspect, a Paris businessman, however, after allegedly deciding the case was "too politically sensitive," Carper and others supposedly limited the investigation of the businessman to "intelligence gathering" and attempted to discredit Callahan's work.  This led to Callahan, in 2005, filing a federal complaint against Carper and other police officials asserting that they abused their authority as state employees and deprived him of his right to free speech under the Constitution. 

The attorney generals office initially represented Carper and the other two defendants in the Callahan litigation.  Madigan assigned two of her assistant A.G.s to the case.  One of these assistants A.G.s supposedly assured those involved that there were no conflicts of interest precluding them from representing all three of the defendants, and allegedly also reassured the defendants that there was little, if any, chance of the case not being dismissed on a motion for summary judgment and proceeding to trial.  

However, the judge denied the defendants' motion for summary judgment in mid-March 2005 and set a trial date for a few weeks later.  At that point, it is alleged that the A.G.'s office realized the potential for conflicts of interest among their clients  and authorized the hiring of an outside counsel to represent the three defendants two weeks before the trial was to start.  A jury then found Carper and one of the other defendants liable and awarded compensatory and punitive damages to Callahan.

According to the Law Bulletin article - In her legal malpractice complaint, Carper now maintains that Madigan accepted the defense of Carper which created an attorney-client relationship and delegated her duty to defend to two of her assistant A.G.s who breached their duty to Carper by "placing undue reliance on the motion for summary judgment focusing on the affirmative defense of qualified public official immunity, to the exclusion of adequate preparation for trial."  See, Diane G. Carper v. Karen L. McNaught, et al., No. 07 L 4513. 

This is an interesting case I will continue to follow.  Especially of interest to me is what possible defense the AGs will have as to why they did not recognize the conflicts sooner and advise the three defendants to get independent counsel.

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The ABA Journal reported today about a New Orleans lawyer, James G. Perdigao, who was recently indicted for stealing tens of millions of dollars from clients and his former law firm between 1991 and 2004 - the 59 count indictment includes a $30 million money laundering forfeiture if convicted.  One unusual thing about the case (other than the very large amount stolen) is that supposedly the lawyer still has most of the stolen money.

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Yesterday's Chicago Daily Law Bulletin reported on an Illinois Appellate Court decision this week that found a fee-splitting agreement between two law firms involving a federal conspiracy lawsuit did not apply to a related legal malpractice case handled by only one of the firms.  In affirming the circuit judge's decision, the appeals court found as a matter of law the legal-malpractice case was a separate action not originally included in the fee-sharing aggrement.  Justice Robert E. Gordon wrote, "Attorneys should act reasonably towards each other...While this court takes note of plaintiffs' arguments founded in equity that defendants should have paid plaintiffs a portion of the fee, we cannot find a legal basis on which  to require defendants to do so."  See, Paul B. Episcope Ltd., et al., etc. v. Law Offices of Campbell and DiVincenzo, et al., etc. (I will link to the decision when it is posted on the IL Courts Website)

UPDATE:  Here is the decision.

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Law.com recently reported, here, on an interesting New York legal malpractice case.  According to the article, the former partners of defunct New York law firm, Hall Dickler - known as a leading advertising law boutique - are facing a legal malpractice suit for failing to advise a company to file bankruptcy earlier than it did.  One of the lawyers involved in the case was quoted as saying that the case could allow a federal court to consider the question of whether lawyers can be held liable for advising on transactions that worsen a bankruptcy situation. 

The plaintiff supposedly took the position that only a Bankruptcy Court can determine whether a law firm's failure to advise a client to declare bankruptcy at a particular point in time is or is not malpractice.  However, the judge didn't seem to agree - withdrawing the case from bankruptcy court on the grounds that the malpractice claims were not "core" to the Chapter 11 proceeding and finding that the issue to be addressed is whether the defendants' legal advice to plaintiffs met the standard of care of a reasonable attorney in providing such advice under the facts presented.

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In this month's issue of the ABA Journal there is an interesting article on the recent Milberg Weiss Indictment and its ramifications of the on the legal profession and law firms as a whole.  The article addresses an issue being discussed around law firm water coolers across the country - should law firms ever be indicted?

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According to an article in the Boston Globe, a Massachusetts Judge recently ruled that a convicted murderer can proceed with a case against his former lawyer for libel after the lawyer allegedly discussed the defendant's personal history at a Continuing Legal Education Seminar and wrote a book about the case containing personal facts before the case went to trial.  The killer claims that his former lawyer shared information that he provided to the lawyer to aid in his defense.  The case deals with some key issues lawyers should always beware of when discussing a case they have been involved in - putting aside the libel issues which deal with the truth of what was said - lawyers cannot divulge attorney/client privileged information that is not part of the public record while speaking at seminars or writing an article or book without first attaining the clients consent. 

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Today, the Chicago Tribune printed an article, here, about white supremacist Matthew Hale's recently filed legal malpractice case.  Hale, who is currently serving 40-years in a Colorado prison for plotting to kill U. S. District Judge Joan Lefkow, is now suing his former attorney Tom Durkin for malpractice.  The 19-page complaint alleges Durkin "committed numerous acts and ommissions that fell beneath a reasonable standard of care" and which led to Hale's conviction for conspiring to kill the federal judge.  In one of the 62 points in the complaint that Hale claims illustrate how Durkin failed him as an attorney, Hale alleges Durkin "referred to me as a 'jerk' in closing argument." Hale is seeking $30 million in damages. 

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According to an article at CNNMoney.com, yesterday a Flordia federal judge ordered that two bickering lawyers resolve their scheduling dispute by playing a game of "rock, paper, scissors" on the stairs of the courthouse.  (Read the amusing order)

Judge Gregory A. Presnell of Orlando ordered the unusual measure after two Tampa lawyers could not agree on where to hold a deposition, even though both of their offices are in the same buliding just four floors apart.  

The judge characterized the disagreement as "the latest in a series of Gordian knots that the parties have been unable to untangle without enlisting the assistance of the federal courts," which led him to order each attorney "accompanied by one paralegal who shall act as an attendant and witness," to play the dispositive round of RPS on June 30 - with the winner being given the momentous prize of selecting the location of the deposition. 

Thank God someone in this case has a sense of humor.  Maybe during the next ridiculous procedural battle the judge can mix things up a bit an order a quick arm wrestling match. 

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There is an interesting article in todays New York Times, here, on the ongoing indictment of the law firm Milberg Weiss Bershad & Schulman.  The article gives more insight into how Milberg Weiss' "serial plaintiff" Howard J. Vogel is helping the federal prosecutors bulid their case against the firm.

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In my firm’s practice we have come into contact with the firm of Milberg Weiss Bershad & Schulman, and since the firms very public indictment last week talk around the water cooler at my office has centered around a very unknown question, “will the stain of the federal indictment keep clients away and destroy Milberg Weiss?” There have been a few interesting articles recently addressing this question and already things don’t look promising for Milberg Weiss.   See, this USA Today article  and an article from The Mercury News (subscription req.). While the firm can still practice law, you can’t help but think that its prominence will be greatly affected. 

According to the articles, with more than 500 active shareholder suits pending against public companies and in excess of $650 million in settlements last year, the New York based law firm was considered the “Tiffany” of the world of class-action securities litigation until last Thursday’s indictment accusing Milberg Weiss and two of its senior partners, David Bershad and Steven Schulman, of bribery, money laundering and fraud. The indictment alleges the firm and its two partners paid 11 million dollars in kickbacks to plaintiffs in 150 shareholders’ lawsuits from 1984 – 2005.

Two negative indicators of Milberg Weiss’ possible demise occurred on the heels of the indictment last week. Thursday before the indictment was handed down a Delaware judge said the firms legal woes made him reluctant to keep the firm as co-lead counsel for plaintiffs in a lawsuit challenging a large Russian oil producer’s takeover of a subsidiary, and the following day the Ohio Tuition Trust Authority (an agency which runs the state’s college savings program) dropped the firm as lead counsel in a suit against the Putnam American Government Income Fund. 

Milberg Weiss, of course, denies any wrongdoing or that the indictment will harm either the firm’s reputation or it’s business. They have set up a website specifically dealing with the firm’s legal problems, here. Only time will tell what the outcome for the firm will be, but I do have sympathy for the hundreds of employees -  lawyers and staff - who will most likely pay a big price for the wrongs of a few in the firm. 

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The New York Times reported today, article here, on the possible indictment of the prominent securities class-action law firm of Milberg Weiss Bershad & Schulman after a six-year federal investigation into whether the firm made illegal payments to clients. An indictment, while it would not prevent the firm from continuing to represent clients, would have dire consequences for its business. According to the article, the firm made a last-ditch attempt to stave off indictment last week when two of its senior partners, David Bershad and Steven Schulman announced they would be taking leaves of absence to prepare possible defenses, since it is believed that both lawyers are likely to face individual criminal charges for their roles in the supposed kick-back scheme.

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A fellow Illinois lawyer, Helen Gunnarsson, wrote an interesting article that was published this week in the Illinois Bar Journal on the increasing trend in lawyer “blawgging” – check out the article here. My colleague Steve Jakubowski, he writes the bankruptcy litigation blog, and I were just a couple of the many lawyers, including Judge Posner of the Seventh Circuit Court of Appeals, Ms. Gunnarsson interviewed for her article.

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There was an interesting article today in the Portland Press Herald, article here, following up on the legal malpractice trial I posted about last week stemming out of a settlement gone awry with Poland Spring Water owned by Nestle. According to today’s article, the testimony is raising more ethical questions. Testimony from a witness and attorney on Thursday called into question attorney Jan Schlichtmann's (who is not a defendant but was a witness for the plaintiff earlier in the trial and is the attorney John Travolta portrayed in the movie "Class Action") motives during settlement negotiations of the underlying case. Apparently, the ethics of one of the defense experts has also been called into question. The article also gives more insight into the background of the case. Three small water bottlers claim they were on the verge of achieving a $39 million settlement with Nestle (Poland Spring Water) back in 2003, only to have the deal scuttled by members of their own legal team who broke ranks and filed more lucrative class-action cases on behalf of consumers. The bottlers are now suing Thomas Sobol and his law firm, seeking to recoup the money they lost when the deal fell apart. The case-within-the-case was based on a claim that Poland Spring was mislabeling as spring water, since it is pumped from wells and could contain surface water. The three smaller competitors were seeking compensation for business they lost to allegedly mis-labeled water, and the lawyers were seeking refunds and quality protections on behalf of consumers, as well. All the ethical questions that keep arising in the trial seem to highlight the main focus of the case – where do a lawyers' duties lie when he or she represents multiple clients with competing interests?

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The Portland Press Herald reported today, article here, about a major legal malpractice trial that is going on in the U.S. District Court in Portland against Thomas Sobol, a leading specialist in class action litigation. During the trial, well known attorney Jan Schlichtmann (who was portrayed by John Travolta in the 1999 movie “A Civil Action”), a former friend and colleague of Sobols testified on behalf of the plaintiffs, three small water bottle companies that had hired him and Sobol to represent them in litigation against Poland Spring. According to the article,

[t]he trial…will hinge on questions of a lawyer’s responsibilities when representing more than one client. The testimony will shed light on the high-stakes world of national class-action litigation, in which millions are made and lost.

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There was an interesting article in Sunday's Chicago Tribune, story here, about the increase in corporate clients suing large law firms (100+ attorneys) for legal malpractice. According to the article, in the past corporate clients were unlikely to sue law firms but that has changed over the last 5 years due to cases like Enron. Corporations have fiduciary duties to shareholders and sharholders are holding their executives' feet to the fire. This greater accountability has led executives to evaluate if a corporation has a claim for malpractice against law firms that may have negligently represented the corporation.

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The New York Law Journal recently reported on an interesting case here. According to the article, a New York judge threw out a legal malpractice case brought by a group of brokers who claimed the law firm they retained gave them faulty advice leading to a violation of a rule of the National Association of Securities Dealers (“NASD”) and a claimed $30 million in damages.

The article goes on to explain that the judge found that the brokers were already obligated to follow NASD rules as part of their employment agreement and therefore, the proximate cause of the brokers’ injuries was not the law firm’s advice but the brokers knowing violation of the NASD rule. The brokers had an obligation to follow the NASD rules as part of their employment – they knew the rules and chose to disregard them – the brokers caused their own damage. See, Smookler v. Kronish Lieb.

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In September, after years of discussion by the Illinois bench and bar, the Illinois Supreme Court adopted rules requiring all active lawyers to log a minimum number of Continuing Legal Education ("MCLE") hours. A recent article in this month's Illinois Bar Journal summarizes what is known thus far of the rules and speculates on what the changes might mean for lawyers in Illinois. MCLE: Ready or Not, Here it Comes

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Here is an interesting article from the New York Times about the struggle some lawyers are faced with between being a good lawyer and being a financially successful one in today’s corporate America.

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According to the Cleveland Plain Dealer, last Friday, a jury awarded an ex-client $6.4 million in compensatory damages after finding that her former lawyer failed to adequately represent her. During the five week trial, the client admitted she didn't read the fine print on loan papers her lawyer drafted and later learned that in those loan papers she had agreed to transfer ownership of her company to her attorney's father, a Cleveland businessman, if she defaulted on her loan. A default did occur and the client lost her family's coffee business.

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Personal injury defense lawyers beware. According to an acticle in the ABA Journal eReport from October 14, 2005, an erosion of the relationship between insurance compaines and the attorneys they retain is to blame for an increase in malpratice claims against P.I. defense attorneys. The article reports on an ABA study of insured lawyers by the Standing Committee on Lawyers' Professional Liability. The study, "Profile of Legal Malpractice Claims," compared claims reported from 2002 to 2003 with those reported from 1995 to 1999 for 25 legal practice areas, and found that while legal malpractice claims against P.I. defense lawyers nearly doubled, the total number of legal malpractice claims for all other areas declined by almost 20 percent.

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