Articles Posted in Attorney-Client Relationship

A limited liability company (LLC) is a distinct entity and the lawyer for the LLC does not represent the members, absent evidence to the contrary, such as an engagement letter. Cafe Holdings, Inc. v. Burke, Warren, Mackay & Serritella, 2024 IL App (1st) 230091 discusses this case and holds that the lawyer for the LLC does not represent the members and had no duty to the members. Thus, Cafe Holdings lawsuit against the lawyers for the LLC was dismissed. The dismissal was affirmed by the Appellate Court. The reasoning:

¶ 28 From what we can discern, on appeal, CHI does not address the first issue. CHI raises two arguments in its appellate brief. The first is that dismissal was premature in that questions of fact remain regarding the circumstances surrounding the settlement agreement and the assignment of the legal malpractice claim. Its second argument is that public policy, under the Learning Curve test, favors assignability here. In neither argument does CHI claim to have an attorney-client relationship with the Silver defendants. And as we review the pleadings below, CHI did not assert an attorney-client relationship between itself and the Sliver defendants before the circuit court, either.

¶ 29 CHI, in other words, does not challenge the trial court’s first ruling that the Silver defendants did not owe a legal duty to CHI, as CHI was not their client, and thus a legal malpractice brought cannot ordinarily lie. See Northern Illinois Emergency Physicians v. Landau, Omahana & Kopka, Ltd., 216 Ill. 2d 294, 306 (2005) (among other things, claim for legal malpractice must establish duty arising from attorney-client relationship). And CHI did not raise that argument below, either. So any such argument is forfeited twice over. See Ill. S. Ct. R. 341(h)(7) (eff. Oct. 1, 2020) (arguments not raised in appellate brief are forfeited); Hebert v. Cunningham, 2018 IL App (1st) 172135, ¶ 37 (argument not raised by appellant in circuit court is forfeited on appeal).

One area that can lead to claims against lawyers occurs when the lawyer accepts one part of a representation but declines to represent the client in another matter. Any declination should be communicated clearly to the client and confirmed in writing. If you don’t do that, the client may later bring a malpractice claim against you.

In Boukari v. Schwartzberg, LLC, 2024 NY Slip Op 01247 (March 7, 2024), the plaintiff hired the defendant firm to complete a Workers’ Compensation matter. The lawyers declined to represent the plaintiff in any personal injury action. Plaintiff sued alleging that the firm missed the statute of limitations on the personal injury claim. The Appellate Division held that summary judgment for the law firm should have been granted. The explanation: ”

“Plaintiff’s legal malpractice action should have been dismissed. Contrary to the motion court’s finding, the record conclusively established, as a matter of law, that defendants had clearly informed plaintiff during their initial meetings in May 2014, by way of unambiguous writings confirmed by plaintiff’s signature, that defendants were only assisting her in substituting counsel in a Workers’ Compensation matter and that they had declined to represent her in any personal injury action against the building owner or any third party arising from her slip and fall. Plaintiff opposed the motion only with an attorney affirmation. She did not submit an affidavit setting forth her version of the initial conversations with defendants or any other interactions that would support her attorney’s contentions that she was under a reasonable impression that defendants had agreed to represent her on a personal injury claim or that the law firm did not clearly disclaim representation (see Zuckerman v New York, 49 NY2d 557 [1980] [an attorney affirmation is insufficient to put before the court facts of which she has no knowledge]”

The Illinois Appellate court recently affirmed a grant of summary judgment in the case captioned Requet v. Stengel, Bailey & Robertson, 2023 IL App (3d) 210203-U. The opinion is unpublished, but it is worth reading. Requet was the managing member of PVY Development, an LLC engaged in developing and selling Walgreens stores. PVY retained the law firm of Coyle, Gilman, Stengel, Bailey and Robertson. Coyle personally converted funds belonging to PVY. Coyle was eventually disbarred. Stengel, Bailey & Robertson (Law Firm) formed in 2008 when those partners separated from Coyle. Requet sued numerous defendants, including the law firm, for legal malpractice, negligence, fraud and breach of fiduciary duty. Law Firm moved for summary judgment on the ground that there was no attorney client relationship between Requet and Coyle. Therefore, Law Firm owed no duty to Requet.

Requet argued based on Pelham v. Griesheimer, 92 IL 2d 13 (1982) that even though he was not a client of the law firm, it owed him a duty. To bring himself within the Pelham line of cases, Requet was required to show that the primary purpose of the attorney client relationship between Coyle and PVY was to benefit Requet. The Appellate Court agreed that Requet had not made that showing and affirmed the grant of summary judgment.

The reasoning:

A recent decision by the Ohio Court of Appeals, Meehan v. Smith, 2022 Ohio 2359 (8th Appellate Dist. 2022), is instructive on the difficulties that an expected beneficiary of a will or estate plan sues for legal malpractice. The expected beneficiary (daughter of the decedent) claimed that she was a client or intended beneficiary of the estate planning law firm that revised her mother’s estate plan.

{¶ 15} At the discovery deposition in this case, appellant testified that she never signed an engagement letter with appellees. She also testified that she personally never paid them any money (she only issued checks drawn from Teepee & Petunia’s accounts at her parents’ direction). However, appellant testified that when her parents initially sought estate planning services, and she and other family members met with appellee attorney Smith, “it was [her] assumption that he was representing the entire family.” Appellant testified that she had that assumption because Smith “would always say to [her] specifically if [she] had any questions to make sure [she] [s]hould give him a call.”

{¶ 16} Appellant further testified that she “felt [she] was being included” in the meetings with her parents and brothers, and Smith “represented the documents.” Donna’s estate planning also provided for the possibility that her 2018 trust funds could be used for appellant’s own estate planning — a point appellant relies on for her claim of the establishment of an attorney-client relationship. Appellant did admit that Smith never told her he was representing the entire family. She further admitted that Smith never told her he was representing her personally. She testified that Smith never told her in “those specific words” that he was her attorney, but she “felt like [she] was his client because [she] was included, as were [her] brothers that were there. It was [her] understanding that [Smith] was representing the family under the estate planning of [her] parents.” (Emphasis added.) The record demonstrates that appellant does not have any legal training.

It is generally well-settled that a party cannot sue the laywer who represents an opposing party. In the case Hitchcock v. USAA Casualty Insurance Company, (M.D. Florida) (6:18-cv-1986-ORL-28TBS), Hitchcock sued USAA after a she became subject to a large judgment in a personal injury action. She alleged that USAA should have settled the case within the policy limits. What makes her case interesting is that she also tried to sue USAA’s lawyers. The court dismissed that action on the ground that there was no attorney-client relationship between Hitchcock and the law firm. Nor was Hitchcock an intended third-party beneficiary of the attorney-client relationship.

http://www.clintonlaw.net

Ed Clinton, Jr.

One issue that arises frequently in legal malpractice cases is – to whom does the lawyer owe a duty? Here, a condominium owner sued the lawyer for the condominium association for breach of contract. The court dismissed the case and the Colorado Supreme Court affirmed the dismissal.

The Colorado Supreme Court followed well-settled law in holding that the association’s lawyer owed no duty to an individual condominium owner. The lawyer represents the association, an organization composed of individual members. Just because a condominium owner is a member of that group does not create an attorney-client relationship.

The Court reasoned that any other holding would hurt the lawyer’s duty of loyalty to his client, the Association. Further, allowing the lawsuit to proceed would allow “an unforeseeable and unlimited number of people” to make claims against lawyers.