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Posts Tagged ‘statute of limitations’

Avoiding Legal Malpractice Tip: Don’t Sue Your Client For Fees

Posted on: June 17th, 2019

By: Greg Fayard

Sometimes clients don’t pay their attorneys’ fees. Should the unpaid lawyer sue his or her client for owed legal fees? While the lawyer certainly has the right to file suit, a lawsuit against a client can trigger a cross-claim for legal malpractice or breach of fiduciary duty. If you don’t want a lawsuit with your client, it is better to not file a lawsuit against your client. If, however, you have no choice (e.g., the amount is significant and the client is ignoring your collection efforts), make sure you file it after the statute of limitations has run on a legal malpractice claim. In California, wait more than one-year after you ended your representation or performed any legal work for the now delinquent former client. Better yet, before you decide to bring a claim for fees, conduct an analysis of any tolling provisions in the legal malpractice statute, such as when the delinquent client knew or should have known of any facts that could support a malpractice claim, or when the delinquent client suffered an “actual injury.”

Some lawyers prefer the slightly less formal process of resolving fee disputes through fee arbitration available through county bar associations, or the State Bar.

Regardless of the forum, before bringing a claim for fees, whether in fee arbitration or in court, double check your insurance policy to verify that a cross-claim for legal malpractice is a covered claim. Lastly, ask yourself, is paying your deductible and possible higher insurance premiums in future years worth filing a fee claim? More often than not, the answer is “no.”

If you have any questions or would like more information, please contact Greg Fayard at [email protected], or any other member of our Lawyers Professional Liability Practice Group, a list of which can be found at www.fmglaw.com.

Avoiding Legal Malpractice Tip: Do Stuff Early

Posted on: May 31st, 2019

By: Greg Fayard

Missing deadlines is a common source of lawyer malpractice. A blown statute of limitations can be most problematic, as the malpractice case focuses on the value of the underlying case (damages). A missed deadline usually is caused by one of three reasons: 1) simply not knowing the deadline; 2) a calendaring failure; or 3) believing you know when something is due, but you’re wrong. Some deadlines are well-known, but many are not. Well-known deadlines under California law, where I practice, include the five-year timeframe to bring a case to trial, or two years to bring a negligence claim. Other deadlines are less well-known, like the ten-year statute of repose to bring a claim for a latent construction defect, or whether transferring a case from Small Claims Court to the Superior Court is permissible after the limitations period for the Superior Court case has elapsed. (In California, it is not permissible. (Jellinek v. Superior Court (1991) 228 Cal.App.3d 652, 654).)

While waiting to the last minute to do something is of course better than forgetting a deadline, allowing the deadline to dictate when you do something puts the focus on the deadline as opposed to what may or may not be in the client’s best interests. So my legal malpractice avoidance tip is:  try to act before deadlines, not on them. That is—do stuff early.

 If you have any questions or would like more information, please contact Greg Fayard at [email protected], or any other member of our Lawyers Professional Liability Practice Group, a list of which can be found at www.fmglaw.com.

New York High Court Narrows Statute of Limitations Under Martin Act

Posted on: June 22nd, 2018

By: Ali Sabzevari

New York’s primary weapon aimed at fraud entitled the Martin Act was drastically hindered by New York’s high court, which found that the law’s statute of limitations was three years, not six years.  The case is People v. Credit Suisse Sec. (USA) LLC, 2018 NY Slip Op 04272, ¶ 1 (New York State Court of Appeals).

The Martin Act has been used to police the securities markets since the 1920s. This Act regulates the advertisement, issuance, exchange, purchase or sale of securities, commodities and certain other investments within or from New York.  It is one of the country’s oldest anti-fraud laws and is used by the New York Attorney General to file both civil suits and criminal charges against alleged violators of the Act.

In the Credit Suisse Sec. (USA) LLC opinion, the Court of Appeals noted that it had never before considered the law’s statute of limitations. Contemplating whether claims were governed by a three-year period or a six-year period, the Court ultimately held that the three-year term applies because of the fraudulent nature of the claims brought under the Martin Act.

This decision will have a big impact on claims brought under the Martin Act as well as the defense of such claims.  If you have any questions or would like more information, please contact Ali Sabzevari at [email protected].

Little Miller, Big Implications

Posted on: June 20th, 2018

By: Samantha Skolnick

In Georgia, when an individual performs work on a state construction project, they can file a lien for non-payment.  The lien is against the project through Georgia’s Little Miller Act. The claim itself is not against the state or county’s actual property. The claim is against a posted bond, and is a “Bond Claim” or “Little Miller Act Claim.”

In a recent decision by the Eleventh Circuit, the Court affirmed summary judgment for the surety based on Georgia’s one-year statute of limitations for little miller act claims. Strickland v. Arch Ins. Co., No. 17-106102018 WL 327443 (11th Cir. Jan. 9, 2018) (rehearing denied Apr. 4, 2018).

Strickland was tasked with providing sand to a paving company (“Douglas”) for the Georgia Department of Transportation (“GDOT”) as they worked on a road improvement project (the “Project”).  Arch Insurance Company (“Arch”) was the surety who issued payment and performance bonds for Douglas.  In 2007, GDOT declared Douglas in default and they were removed from the Project.  The surety brought in another company to complete the work on the Project. Strickland did not supply any sand after Douglas was removed from the Project.

GDOT determined that the Project was substantially complete in August of 2010 and in September 2010 made its punch list. The new contractor brought on by the surety finished the punch list in September 2011.  In March 2012, GDOT accepted Project maintenance responsibilities and made semi-final payment to Arch in July 2012.

In September 2012, Strickland directed a demand for payment on Arch’s payment bond.  Arch acknowledged the claim but requested additional documentation, which was not provided by Strickland.  In 2014, Strickland filed a lawsuit against Arch. The trial court concluded that there was no dispute that the project was completed and accepted in September 2011.  With that ruling, Georgia’s one-year statute of limitations on payment bond claims barred Strickland’s action and consequently Strickland appealed.

The Appellate Court rejected Strickland’s arguments, holding that “completion” and “acceptance” used in the statute relate to the actual work on the project and are not dependent on the ending of future contractual duties or on the public owner’s internal policies and procedures.

The main takeaway: under Georgia law, the date a public owner states that the project is “completed” or “accepted” does not dictate whether the statute of limitation is running.  Georgia’s one-year statute of limitations under Georgia’s Little Miller Act begins when the actual work is substantially completed. Punch list items do not need to be finished.

If you have any questions, please contact Samantha Skolnick at [email protected].

 

Using Summary Judgment during the Arbitration Process

Posted on: February 22nd, 2018

By: Erin E. Lamb

Many attorneys assume that once a case is in private arbitration, dispositive motions are against the rules and are no longer a useful tool to resolve cases. How could an arbitrator have the power to consider a dispositive motion? After all, arbitration is sold to all parties as a process that all parties must willingly opt into — in the interest of limiting the complexities of arbitration, not adding to them, as dispositive motions do. Most attorneys participating in arbitration therefore would never think of pursuing dispositive motions, even when faced with res judicata or statute of limitations issues.

This is an incorrect and unduly limiting view of the arbitration process. None other than the Supreme Court of the United States, has upheld the power of an arbitrator to adopt procedures necessary to give effect to the parties’ arbitration agreement. Stolt-Neilsen v. AnimalFeeds International, 559 U.S. 663 (2010).  It’s up to the arbitrator to determine procedural questions by looking at the arbitration agreement. In turn, most arbitration agreements invoke an arbitration providers’ rules. Most rules, including the most recent American Arbitration Association rules (last updated in 2009), indirectly give arbitrators expansive powers and wide latitude in the procedures used to give effect to the arbitration agreement.

The 2009 American Arbitration Association rules, still in effect ten years later, state that arbitrators are required to “take such steps as they may deem necessary or desirable to avoid delay and to achieve just, speedy, and cost-effective resolution of large, complex, commercial cases.” In fact, in AAA commercial cases, the rules directly address dispositive motions: “The arbitrator may allow the filing of and make rulings upon a dispositive motion only if the arbitrator determines that the moving party has shown that the motion is likely to succeed and dispose of or narrow the issues in the case.” The use of “only” makes the rule seem limiting; in reality, it directly gives arbitrators the ability to hear and rule on said motions. Multiple federal courts have affirmed arbitration awards where the arbitrator ruled on a motion for summary judgment or on summary disposition. Some arbitration provider’s rules even specifically allow for it – the JAMS rules specifically allow for the filing of dispositive motions even under objection from the other side.

Simply put, unless your arbitration agreement specifically, plainly, and expressly prohibits dispositive motions, an arbitrator is empowered to grant any relief necessary to reach a final determination of the matter, including dispositive motions. Only in the face of a specific written agreement would an arbitrator be acting outside the contractually delegated authority of the arbitration agreement. This is an important thing to consider for all attorneys in arbitration cases – and at the time of the agreement to arbitrate, not after.

If you have any questions or would like more information, please contact Erin Lamb at [email protected].