March 18, 2013 § 2 Comments
Forbes v. St. Martin, et al., decided March 5, 2013, by the COA, is a tour de force on contingent fee contracts and their enforceability. If you do any contingent-fee work, this is a must-read for you. Actually, it’s a good opinion to read and examine as a case study in ethics.
The 41-page majority opinion was penned by Judge Griffis. The rest of the court went this way: “ISHEE, ROBERTS, CARLTON AND FAIR, JJ., CONCUR. BARNES, J., CONCURS IN PART AND THE IN RESULT WITHOUT SEPARATE WRITTEN OPINION. MAXWELL, J., CONCURS IN PART AND IN THE RESULT WITH SEPARATE WRITTEN OPINION, JOINED IN PART BY ROBERTS, J. IRVING, P.J., DISSENTS WITH SEPARATE WRITTEN OPINION, JOINED BY LEE, C.J. JAMES, J., NOT PARTICIPATING.”
James Forbes had suffered catastrophic injuries in a gas-station explosion in Biloxi. Through a series of events he came to be represented in his personal injury claim by St. Martin, a Louisiana lawyer. Rather than qualifying to proceed pro hac vice, St. Martin instead associated a Mississippi lawyer and kept a rather low profile in the case, advising Forbes and his wife in the background and letting Mississippi counsel, with whom he corresponded regularly, take the lead in the record of the litigation.
The PI case was settled eventually for $13.6 million, and St. Martin’s fees, which were to be divided with Mississippi counsel, were $4.6 million.
Forbes filed suit against St. Martin and the Mississippi lawyer, and their respective firms, seeking to void the contingent-fee contract. The complaint asserted claims for breach of fiduciary duty, professional negligence, fraud and misrepresentation, conversion, rescission, imposition of a constructive trust, quantum merit, attorney’s fees, and actual and punitive damages. The Mississippi lawyer and his firm were dismissed, and St. Martin’s malpractice carrier was added as a defendant.
Both Forbes and St. Martin filed motions for summary judgment, and the chancellor ruled in favor of St. Martin.
The COA reversed and remanded. The ruling is too involved to go into detail here, but the court ruled that Forbes had presented enough evidence that there did exist a genuine issue of material fact so that summary judgment should not have been granted. Some of the findings of the COA:
- St. Martin made over $100,000 in “cash advances” to the Forbes, which they spent on a Bahamian vacation, a Caribbean cruise, a car, a cell phone, and “other personal expenses,” in violation of Rule 1.8(e) of the Rules of Professional Coduct;
- Unauthorized practice of law by St. Martin in Mississippi;
- The first contingent-fee contract was made while Forbes was under influence of narcotics;
- The second contract may have been the product of misleading or even fraudulent advice;
- Portions of the contract pertaining to ability to settle without counsel and ability to terminate counsel were in violation of Mississippi’s professional conduct rules.
So St. Martin returns to trial in chancery unless he can convince the MSSC to take the case on cert. That could happen if the MSSC wants to clarify the law in this area. Or, the high court could let the case finish its run through the trial court and then entertain it later. With millions at stake, it’s inconceivable that a later appeal would not result no matter what the ultimate trial outcome.
An interesting aspect of this case is that it is in essence a malpractice claim based on breach of fiduciary duties, which is not the usual and customary avenue that plaintiffs pursue in these cases.
The question at the heart of this appeal is whether an out-of-state lawyer may enter into an agreement with a Mississippi lawyer for joint representation of Mississippi litigants in a way that the out-of-state lawyer may avoid coming within the restrictions of the Mississippi rules of professional conduct and the scrutiny of our courts. The answer of the COA is “no.”
A subsidiary question is raised in Judge Maxwell’s partially concurring opinion, which challenges the majority’s definition of the practice of law. Judge Maxwell would not define it as expansively as did the majority. In my opinion, if the supreme court decides this phase of the case merits a look, this will be the battleground issue.
August 2, 2011 § Leave a comment
Only yesterday morning, I posted here about the internet and the unauthorized practice of law, taking the position that internet legal-forms dealers are practicing law without a license and raising the question “I wonder what the state bar and the district attorneys are doing to rein this in?”
Well, ask and ye shall receive.
Yesterday afternoon I received an email from the state bar announcing that it filed a petition with the Supreme Court last Friday to amend the appellate rules and the rules of professional conduct to define more clearly the practice of law and to spell out sanctions available to the courts for those who are found to be engaged in unauthorized practice.
Apropos of what I said in my post yesterday is a provision making it clear that drafting legal documents and pleadings is in itself practicing law. There are many other provisions in what amounts to a sweeping and all-encompassing statement of what constitutes the practice of law.
I urge you to read these proposed changes and I encourage you to comment on them if comments are called for. If the Supreme Court accepts these, they will likely be sent to the Rules Committee, of which I am a member. If it comes to that, I will welcome any input.
As I said in my prior post, this is not about the legal profession or convenience for judges. It is about protecting the public. I commend the bar for addressing this problem.
August 1, 2011 § 3 Comments
It’s no secret that I am at least dubious about the efficacy and advisibility of lay persons representing themselves in court. My distaste for the practice rests primarily on the fact that most often it results in self-inflicted harm. Secondarily, I am concerned that lay litigants are unencumbered by any ethical or professional obligation of candor to the court and fair dealing with the other party.
Many lay-lawyers download forms from online vendors. The purveyors of these forms claim that they enable lay people to handle their own routine legal matters for less money than it would cost them to pay a lawyer.
My problem with that approach is two-fold:
First, how does a layperson decide that a legal matter is routine without some advice? How does a layperson know what the hidden pitfalls are if she has no one but a form to ask? Sure, she can check box A on the computer-downloaded form, but would box B be far more advantageous?
Second, is not the providing of legal forms in itself providing legal representation? The Mississippi Supreme Court answered the question in the case of Mississippi Commission on Judicial Performance v. Jenkins, 725 So.2d 162, 167 (Miss. 1998), in which the court stated:
” This Court defined the practice of law to include ‘… the drafting or selection of documents, the giving of advice in regard to them, and the using of an informed or trained discretion in the drafting of documents to meet the needs of the person being served. So any exercise of intelligent choice in advising another of his legal rights and duties brings the activity within the practice of the legal profession. Oregon State Bar v. Security Escrows, Inc., 233 Or. 80, 377 P.2d 334 (1962).’ Darby v. Mississippi State Bd. of Bar Admissions, 185 So.2d 684, 687 (Miss.1966).”
There is a class action lawsuit pending in Missouri raising the issue of unauthorized and inadequate practice of law by Legal Zoom, an online seller of legal advice via forms. The thrust of that lawsuit is that the company’s activities are inherently harmful to consumers because they violate the state’s public policy against unauthorized practice of law, which protects consumers. The trial judge has already overruled the company’s motion for summary judgment, and the company is mounting an ad campaign in the state to scare people into believing that their right of self-representation is under threat, and that lawyers are out to get their money.
We have seen our share of Legal Zoom-type documents and other internet lawyers in this district, but that’s not by any means all. We have shadowy individuals in the area who sell “secretarial services” in the form of complaints for irreconcilable differences divorces, PSA’s and judgments. Those clerk-typists are beyond a reasonable doubt unqualified to give legal advice. So what possibly qualifies them to prescribe the forms appropriate for a person’s legal problems, and to determine the appropriate content?
Caveat emptor, you might say. I answer: bull. Neither the legal profession nor the courts should countenance unqualified persons preying on unsuspecting laypeople. I wonder what the state bar and the district attorneys are doing to rein this in? After all, there is a state law making it a crime to practice law without a license.
As I have said before, I am all for self-representation. But I hate to see self-destruction. And I hate even more to see someone on the path to self destruction believing that they are protected by a piece of paper they bought off the internet or from a “secretarial service” with no legal advice to back it up.
This is not all about protecting lawyers or making it easier on the judges. This is all about making sure that the legal process produces as fair a result as possible, and that all who are involved in it deal with each other and the court with integrity and are fully informed of their rights and the ramifications of their actions.