Articles Posted in Legal Ethics

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Chase sued to recover millions of dollars under a credit agreement "between Chase and entities owned and operated by [Winget]” and obtained an award of over $425 million. Winget’s personal trust was liable for the full amount. Winget, protected by a limitation in his personal guaranty, owed Chase only $50 million, which he paid. The parties then litigated attorneys’ fees and whether Winget was personally liable for Chase’s $12.6 million in fees and expenses. The Sixth Circuit held that despite Winget’s limited personal guaranty, he “is still liable for Chase’s costs and expenses associated with collection of the Guaranteed Obligation.” The district court then entered a final amended judgment against Winget and his trust. Rather than use the trust’s assets to pay Chase, Winget transferred the assets out of his trust and filed a new lawsuit, seeking a declaration that Chase had no recourse against those assets. Chase filed counterclaims, alleging that the transfers were fraudulent conveyances. The district court consolidated the new lawsuit with the previous litigation, calling it “the functional equivalent of post-judgment proceedings,” and granted one motion, awarding Chase another $2 million for expenses from June 2015 through November 2016. The court noted that “Chase’s efforts to collect the Guaranteed Obligations are ongoing.” The Sixth Circuit dismissed an appeal for lack of jurisdiction, reasoning that the order is not a “final decision” under 28 U.S.C. 1291. View "JPMorgan Chase Bank, N.A. v. Winget" on Justia Law

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The Debtors filed their bankruptcy petition in 2008. Grusin provided them legal advice before the filing and at the beginning of the bankruptcy case. Fullen filed the petition and represented them in the chapter 7 case. In 2011, the bankruptcy court granted the Trustee summary judgment in an adversary proceeding seeking to deny the Debtors’ discharge and disqualified both lawyers from further representation of the Debtors in that case. The Debtors hired new counsel, who obtained relief from the summary judgment order. Following a trial, in 2015, the bankruptcy court again denied the Debtors’ discharge. The Bankruptcy Appellate Panel affirmed. In 2012, the bankruptcy court granted CJV derivative standing to pursue a malpractice action on behalf of the estate against Grusin and Fullen. Malpractice complaints were filed in the bankruptcy court and in Tennessee state court. In 2014, CJV filed another adversary proceeding, seeking declaratory relief that the malpractice claims constituted property of Debtors’ estate. The Bankruptcy Appellate Panel affirmed the bankruptcy court in holding that the malpractice action for denial of debtors’ discharges based on errors and omissions contained in a bankruptcy petition, as well as pre and post-petition legal advice, was not property of the debtors’ bankruptcy estate. There was no pre-petition injury; the Debtors were injured by that negligence when their discharges in bankruptcy were denied. View "In re Blasingame" on Justia Law

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Mendoza-Garcia, then 16, came to the U.S. from Guatemala in 2004. In 2011 removal proceedings, he sought asylum and withholding of removal, stating that he was afraid to return to Guatemala because his hometown had been torn apart by violence after a mayoral election won through fraud. His merits hearing was scheduled for November 2017. One week before that hearing, his attorney moved to withdraw, stating that he told Mendoza-Garcia six week earlier about an outstanding obligation related to their 2011 representation agreement. Mendoza-Garcia was unable to pay and requested more time. The IJ informed him that financial difficulty would not justify a continuance. When asked a third time if he objected to his attorney’s withdrawal, Mendoza-Garcia said no. The IJ granted the motion; the attorney left. The hearing proceeded, with interpreters translating from English to Spanish and from Spanish to Aguacateco, Mendoza-Garcia’s indigenous language. Mendoza-Garcia stated, “I don’t fear any person in particular or a group, per se,” but “they made us" "get involved with a group to protect the village,” giving him a gun. He stated that he had been expelled from the village and had “no idea what might happen.” The IJ again refused a continuance. The BIA and Sixth Circuit upheld the denial of relief. Denying a continuance was not irrational, discriminatory, or a departure from established policies. This type of procedural due process claim requires a showing of prejudice; Mendoza-Garcia could not show that his “claims could have supported a different outcome.” View "Mendoza-Garcia v. Barr" on Justia Law

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Attorney Boland was an expert witness and defense counsel in child pornography cases. To demonstrate that pornographic images may be altered to appear that minors were engaged in sexual conduct when they were not, Boland purchased innocent stock images of minors and "morphed" them into pornographic images for use in criminal proceedings. The issue of whether Boland committed a crime in creating and displaying these images of child pornography was raised and Boland eventually voluntarily entered into a Pretrial Diversion Agreement, explaining and apologizing for creating the images. Two of the minors, depicted in the images Boland created, won awards under 18 U.S.C. 2252A(f), which provides civil damages for victims of child pornography. Boland filed a Chapter 7 bankruptcy petition; the minors filed an unsuccessful adversary proceeding, asserting their awards were non-dischargeable debts for willful and malicious injury under 11 U.S.C. 523(a)(6). The Sixth Circuit Bankruptcy Appellate Panel remanded. Collateral estoppel did not apply on the issue of whether Boland intended to injure the minors since intent was not actually litigated or necessary to the outcome of the prior litigation, but stipulations made through Boland's Diversion Agreement and judicial decisions concerning his liability to the minors established that Boland knowingly created and possessed pornographic images involving images of real children. The bankruptcy court did not consider the legal injury suffered by the minors as a result of the invasion of their privacy and reputational interests. Boland acted without justification, maliciously injuring the minors under 11 U.S.C. 523(a)(6). View "In re Boland" on Justia Law

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Plaintiffs brought medical malpractice claims in Ohio state court against a doctor who operated on them and against several hospitals where he worked. The plaintiffs allege that the judge presiding over their case, Judge Schweikert, and Chief Justice O’Connor of the Ohio Supreme Court were biased against their claims. In accordance with Ohio law, they filed affidavits of disqualification against Judge Schweikert, and requested that Chief Justice O’Connor recuse herself from deciding Judge Schweikert’s disqualification. They then requested that a federal court enjoin Chief Justice O’Connor from ruling on the affidavit of disqualification pertaining to Judge Schweikert and enjoin Judge Schweikert from taking any action in their cases before the affidavit of disqualification was ruled upon. The Sixth Circuit affirmed the dismissal of the claims. The Younger abstention doctrine applies. The ability of Ohio courts to determine when recusal of a judge or justice is appropriate and to administer the recusal decision process in accordance with state law operates “uniquely in furtherance of the state courts’ ability to perform their judicial functions.” View "Aaron v. O'Connor" on Justia Law

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Olagues is a self-proclaimed stock options expert, traveling the country to file pro se claims under section 16(b) of the Securities and Exchange Act of 1934, which permits a shareholder to bring an insider trading action to disgorge “short-swing” profits that an insider obtained improperly. Any recovery goes only to the company. In one such suit, the district court granted a motion to strike Olagues’ complaint and dismiss the action, stating Olagues, as a pro se litigant, could not pursue a section 16(b) claim on behalf of TimkenSteel because he would be representing the interests of the company. The Sixth Circuit affirmed that Olagues cannot proceed pro se but remanded to give Olagues the opportunity to retain counsel and file an amended complaint with counsel. View "Olagues v. Timken" on Justia Law

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After Hickory fired Carter from her job as a nursing assistant in 2007, Carter filed an unlawful discrimination claim with the Ohio Civil Rights Commission. That agency filed a parallel charge with the federal Equal Employment Opportunity Commission, under the Americans with Disabilities Act. For six years, the complaint inched its way through the state system. In November 2013, the Ohio Commission ordered Hickory to reinstate Carter and to pay her lost wages. Carter asked the EEOC for a right-to-sue letter. Because Carter had moved without notifying that agency, it mailed the letter to her old address. Over the next few months, Carter’s attorney, Gilbert, contacted the agency, and in November 2014 procured a copy of the letter dated February 2014. Carter filed suit in December 2014. The court concluded that Carter’s claim was time-barred because she filed it more than 90 days after the date on her right-to-sue letter and imposed a $25,995.32 sanction on attorney Gilbert for advancing a clearly time-barred claim. The Sixth Circuit affirmed. It is irrelevant that Hickory did not move for dismissal but waited until summary judgment to raise the statute of limitations; it instead contacted Gilbert and informed him of the flaws in his case. The court awarded fees and costs incurred only after that time. View "Carter v. Hickory Healthcare Inc." on Justia Law

Posted in: Legal Ethics

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Ayers, an experienced Kentucky criminal-defense attorney, was indicted in 2008 on five counts of failing to file state tax returns. Ayers represented himself throughout the 21 months between his indictment and trial, but never formally elected to do so. He never waived his right to counsel on the record, filed a notice of appearance, or moved to be allowed to proceed pro se. The court allegedly failed to inform him at his arraignment that he had a right to counsel and never subsequently sought to determine whether Ayers’s self-representation was a voluntary, intelligent, and knowing waiver of his right to counsel. When Ayers asked for a continuance a day before trial was scheduled to begin so that he could hire an attorney with whom he attested he was already in negotiations, the court denied his request and forced him to proceed pro se. Ayers was convicted. The Sixth Circuit reversed the district court’s denial of habeas relief. The Kentucky Supreme Court acted contrary to clearly established Supreme Court precedent when it held that trial courts need not “obtain a waiver of counsel” before allowing “experienced criminal trial attorneys” to represent themselves. Applying de novo review, the court concluded that Ayers did not validly waive his right to counsel. View "Ayers v. Hall" on Justia Law

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In November 2010, Hayes engaged Cybriwsky to represent him related to the denial of Hayes’s application for Social Security disability benefits. In February 2011, the case was remanded for further administrative hearings (42 U.S.C. 405(g)) because faulty recordings of the hearings rendered the record inaudible. On remand, the Administrative Law Judge entered a fully favorable decision for Hayes in August 2011. The district court affirmed in April 2012. The next month Cybriwsky sought attorney’s fees under the Equal Access to Justice Act, 28 U.S.C. 2414. The court granted attorney’s fees of $2,225 in August 2012. In April 2017, Cybriwsky moved, under 42 U.S.C. 406(b), seeking more than $11,000. in fees. He subsequently provided documentation of the fee arrangement, benefits paid to Hayes, and an itemized description of the work performed. By the time Cybriwsky filed his 2017 motion, the SSA had released the 25% of past-due benefits normally reserved to pay attorney’s fees; $5,300 was awarded to Hayes’s attorney at the administrative level and the remainder was released to Hayes. Any fees awarded to Cybriwsky would have to be recovered from Hayes, either directly or by having fees taken from Hayes’s monthly disability payments. The Sixth Circuit affirmed denial of the motion as untimely and determined that the circumstances did not merit the exercise of equitable tolling. View "Hayes v. Commissioner of Social Security" on Justia Law

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In Ohio, judges in all courts of record are selected by election. Ohio Code of Judicial Conduct, Canon 4, governs the fundraising and political conduct of judicial candidates. Platt, an Ohio attorney, formed the Platt for Judge Campaign Committee in 2013. Platt believes that parts of Canon 4 violate his rights to free speech, due process, and equal protection: Rule 4.1(A)(2), which prohibits a candidate from making speeches on behalf of a political party or another candidate for office; Rule 4.1(A)(3), which prohibits a candidate from publicly endorsing or opposing a candidate for another public office; Rule 4.4(A), which, save for three exceptions, prohibits a judicial candidate from personally soliciting campaign contributions; Rule 4.4(E), which creates a permissible window for soliciting and receiving campaign contributions; Rule 4.4(F), which limits the solicitation and receipt of contributions for candidates defeated before the general election; and Rule 4.4(G), which regulates the solicitation and receipt of contributions for candidates who die or withdraw from the election. The Sixth Circuit affirmed the district court’s rejection of all of Platt’s claims. Ohio’s rules strike the delicate balance between the Constitution’s commands and the state’s desire to protect judicial integrity. View "Platt v. Board of Commissioners on Grievances & Discipline of the Ohio Supreme Court" on Justia Law