According to the ABA Journal, an Iowa attorney is charged with felony counts of theft and fraudulent practice for allegedly obtaining nearly $178,000 in overpayments for his work as a contract attorney for the Iowa Public Defender.
An audit concluded that the lawyer claimed to have worked more than 24 hours on 80 different dates between 2007 and 2011. Four other contract lawyers also were identified in the audit as having over-billed and, as a result, were terminated from the program.
According to the ABA Journal, the Iowa State Bar Association President has called the audit findings “an isolated aberration, involving five lawyers,” adding that “a few bad apples do not spoil the barrel.” The Bar President stated that “any abuses of the program… need to be promptly corrected.”
For more information on Professional Liability Matters, contact Attorney Simon Brown at 603.410.1500 or a member of Preti Flaherty's Professional Liability Group.
Legal updates, news and commentary from Preti Flaherty's Professional Services Attorneys
Accounting Firms Shielded from Repeat Lawsuits from Taxpayers
Thursday, October 10, 2013
The Appellate Court of Illinois affirmed the decision to dismiss a taxpayer lawsuit against a school district’s accounting firm based upon a res judicata theory – that is a claim that was once brought or could have been brought between the same parties is barred.
In Lutkauskas v. Ricker, et al., 2013 Il. App. (1st) 121112, a taxpayer sued his school district’s accounting firm alleging that the accounting firm was complicit in violating the school code by allowing the district’s working cash fund to be depleted without a school board resolution. Despite the fact the taxpayers in this matter never brought suit before, the Court nonetheless determined the action was barred against the accounting firm based upon the doctrine of res judicata. In general, res judicata can only apply to bar an action when the same parties or their privies are involved. Here, the taxpayers argued they were not part of the previous action. In rejecting that argument, the Court ruled that a taxpayer action is derivative in that it was being brought on behalf of the school district. The key to the Court’s reasoning was that the claimed injury – the depletion of the working cash fund – was not personal to the taxpayers, but rather impacted the governmental entity.
While it remains to be seen whether courts in other jurisdictions would adopt the reasoning of the Illinois Court, it is a legal theory to be considered in defending a taxpayer action on behalf of a governmental entity or a derivative action brought on behalf of a corporation.
For more information on professional liability matters, contact Attorney Adam Shub at 207-791-3000 or a member of Preti Flaherty's Professional Liability Group.
In Lutkauskas v. Ricker, et al., 2013 Il. App. (1st) 121112, a taxpayer sued his school district’s accounting firm alleging that the accounting firm was complicit in violating the school code by allowing the district’s working cash fund to be depleted without a school board resolution. Despite the fact the taxpayers in this matter never brought suit before, the Court nonetheless determined the action was barred against the accounting firm based upon the doctrine of res judicata. In general, res judicata can only apply to bar an action when the same parties or their privies are involved. Here, the taxpayers argued they were not part of the previous action. In rejecting that argument, the Court ruled that a taxpayer action is derivative in that it was being brought on behalf of the school district. The key to the Court’s reasoning was that the claimed injury – the depletion of the working cash fund – was not personal to the taxpayers, but rather impacted the governmental entity.
While it remains to be seen whether courts in other jurisdictions would adopt the reasoning of the Illinois Court, it is a legal theory to be considered in defending a taxpayer action on behalf of a governmental entity or a derivative action brought on behalf of a corporation.
For more information on professional liability matters, contact Attorney Adam Shub at 207-791-3000 or a member of Preti Flaherty's Professional Liability Group.
Indiana Attorney's Comment on the Immigration Status of his Client's Spouse Leads to Suspension
Monday, October 7, 2013
According to the ABA Journal, an Indiana lawyer has been suspended for thirty days for making a comment about the immigration status of his divorced client’s spouse in correspondence sent to opposing counsel and the Judge in the case. Objecting to his client’s lack of access to his child, the attorney wrote:
“Your client doesn’t understand what laws and court orders mean I guess. Probably because she’s an illegal alien to begin with. I want you to repeat to her in whatever language she understands that we’ll be demanding she be put in JAIL for contempt of court. I’m filing a copy of this letter with the court to document the seriousness of this problem.”
According to the ABA Journal, the Indiana Supreme Court held that the attorney’s letter violated rules of professional conduct concerning demonstration of bias or prejudice, and conduct with no substantial purpose other than to embarrass, burden or delay a third person. The Court concluded that “accusing [the] mother of being in the country illegally is not legitimate advocacy concerning the legal matter at issue and served no substantial purpose other than to embarrass or burden [the] mother.”
In comments printed in the ABA Journal, the attorney said he disagreed with the Supreme Court’s ruling, noting that he had written the letter threatening contempt of court only after the mother had previously been found in contempt for violation of the lower court’s parenting order. In defense of his immigration statement, he said that “people who come into this country illegally are not respecting American laws.”
For more information on professional liability matters, contact Attorney Simon Brown at 603-410-1500 or a member of Preti Flaherty's Professional Liability Group.
For more information on professional liability matters, contact Attorney Simon Brown at 603-410-1500 or a member of Preti Flaherty's Professional Liability Group.
Mass Appellate Court Provides Another Reason to Ensure Indemnification Provisions Include Survival Clauses
Friday, October 4, 2013
Last week, the Massachusetts Court of Appeals ruled that a contractual indemnification clause does not necessarily survive termination, absent a survival clause keeping the obligation in force. While the Court applied Georgia law in reaching its decision, the principles that the Court applied would likely yield the same result using Massachusetts law.
In Fraco Products, Ltd. v. Bostonian Masonry Corporation, C.A. No. 12-P-933 (Mass. App. Ct., Sept. 26, 2013), an equipment manufacturer sold a piece of equipment to a masonry subcontractor on an installment payments basis. The contract included a “Transfer of Risk and Insurance” clause requiring the masonry subcontractor to indemnify the manufacturer from any losses caused by the equipment. The Transfer of Risk and Insurance clause did not state that it would survive the termination of the contract (while another section dealing with risk noted that that clause would survive termination).
After the final payment was made, there was an accident involving the equipment killing a passerby and two construction workers. The estate of one of the workers sued the manufacturer, and the manufacturer sued the subcontractor for indemnification.
The Court of Appeals dismissed the claim for contractual indemnity, stating that “Courts are to construe the language of an indemnification contract strictly against the party seeking indemnification.” The court went on to note that the “Transfer of Risks and Insurance” provision was “not followed by a survival clause.” Accordingly, since the “contract terminated by its own terms when [the subcontractor] made the final installment payment (sometime before the accident), the ‘Transfer of Risks and Insurance’ provision is not relevant here.”
This is another good reminder to contractors to make sure that their standard subcontracts include express language in their indemnification provisions that make clear that the subcontractor’s indemnification obligation survive termination.
For more information on construction law and professional liability matters, contact Attorneys Kenneth Rubinstein and Nathan Fennessy at 603-410-1500 or a member of Preti Flaherty's Professional Liability Group.
In Fraco Products, Ltd. v. Bostonian Masonry Corporation, C.A. No. 12-P-933 (Mass. App. Ct., Sept. 26, 2013), an equipment manufacturer sold a piece of equipment to a masonry subcontractor on an installment payments basis. The contract included a “Transfer of Risk and Insurance” clause requiring the masonry subcontractor to indemnify the manufacturer from any losses caused by the equipment. The Transfer of Risk and Insurance clause did not state that it would survive the termination of the contract (while another section dealing with risk noted that that clause would survive termination).
After the final payment was made, there was an accident involving the equipment killing a passerby and two construction workers. The estate of one of the workers sued the manufacturer, and the manufacturer sued the subcontractor for indemnification.
The Court of Appeals dismissed the claim for contractual indemnity, stating that “Courts are to construe the language of an indemnification contract strictly against the party seeking indemnification.” The court went on to note that the “Transfer of Risks and Insurance” provision was “not followed by a survival clause.” Accordingly, since the “contract terminated by its own terms when [the subcontractor] made the final installment payment (sometime before the accident), the ‘Transfer of Risks and Insurance’ provision is not relevant here.”
This is another good reminder to contractors to make sure that their standard subcontracts include express language in their indemnification provisions that make clear that the subcontractor’s indemnification obligation survive termination.
For more information on construction law and professional liability matters, contact Attorneys Kenneth Rubinstein and Nathan Fennessy at 603-410-1500 or a member of Preti Flaherty's Professional Liability Group.
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