Comprehensive Annotations to ACTEC Commentaries July, 2016
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Comprehensive Annotations to ACTEC Commentaries July, 2016 Notice to Users: This document contains all the cases, ethics opinions, and related secondary materials contained in the published version of the ACTEC Commentaries, plus a number of additional cases, ethics opinions, and related materials that are relevant to trust & estate practice but were deemed of lesser importance and so not included in the ACTEC Commentaries. It includes a thorough review of cases and ethics opinions up to the end of 2015. All have been organized by jurisdiction (federal or national materials first), with references to relevant Model Rules and several related topics to make electronic searching easier. Nonetheless, this compilation does not purport to be exhaustive of the ethics cases and opinions relevant to trust & estate practice. CASES Foreign Law England: Ross v. Caunters, 3 All England Reports 580 (1979). Rules 1.1. Topics: Malpractice. In holding that a will’s beneficiaries’ lack of privity of contract with the attorney-drafter of the will was no bar to an action for negligence, the English court observed: In broad terms, the question is whether solicitors who prepare a will are liable to a beneficiary under it if, through their negligence, the gift to the beneficiary is void. The solicitors are liable, of course, to the testator or his estate for a breach of the duty that they owed to him, though as he has suffered no financial loss it seems that his estate could recover no more than nominal damages. Yet it is said that however careless the solicitors were, they owed no duty to the beneficiary, and so they cannot be liable to her. If this is right, the result is striking. The only person who has a valid claim has suffered no loss, and the only person who has suffered a loss has no valid claim. 3 All Eng. Reports at 582-583. Federal Law Artromick Intern., Inc. v. Drustar, Inc., 134 F.R.D. 226 (S.D. Ohio 1991). Rules 1.1, 1.4, 1.7, 1.16. Topics: Disqualification. In this disqualification case the court found that a pre-existing lawyer-client relationship had terminated. It is unreasonable to continue to demand an attorney’s undivided loyalty for an indefinite period of time when the attorney’s last bill is both disputed and unpaid, and 1 when each of several new opportunities to use the attorney’s services is directed to another firm. Even if, subjectively, plaintiff did consider Mr. Dunn to be their attorney in January, 1990, that belief became objectively unreasonable at some point prior to that date. The precise date need not be identified: it is enough to conclude, taking into account all the relevant facts, that the relationship ended before Schottstein accepted this litigated matter. Heathcoat v. Santa Fe International Corp., 532 F. Supp. 961 (E.D. Ark. 1982). Rules 1.4, 1.7, 1.9. Topics: Disqualification. The court here found that the lawyer-client relationship between the individual plaintiff and her lawyer had ended after a will prepared by the lawyer had been executed by her in 1966 although in 1981 she received a form letter from the law firm. In the meantime, the individual lawyer who had provided the estate planning services had died. The salutation of the letter, which pointed out the significance of ERTA, was “Dear Friend.” Manoir-Electroalloys Corp. v. Amalloy Corp., 711 F. Supp. 188 (D. N.J. 1989). Rules 1.4, 1.7. Topics: Disqualification. In this case the court found that the lawyer-client relationship which was established in 1976 still existed in 1989. The law firm performed estate planning services for the client and his spouse in 1976, advised the client regarding the renegotiation of an employment contract in 1983 and 1984 and sent the client estate planning reminder letters in 1983 and 1988. Shearing v. Allergan, Inc., 1994 WL 382450 (D. Nev. 1994). Rules 1.4, 1.7. Topics: Disqualification. Here a lawyer was disqualified from representing a litigant whose interests were adverse to those of a corporation for which the lawyer had served as outside counsel although the lawyer had not been consulted for over a year. Estate of Heiser v. Islamic Republic of Iran, 466 F.Supp.2d 229 (D.D.C. 2006). Rules 1.5, 1.7. This decision is summarized in the annotations to Model Rule 1.7. Swidler & Berlin v. U.S., 524 U.S. 399 (1998). Rules 1.6. Topics: Evidence, A/C Privilege. [T]he general rule with respect to confidential communications … is that such communications are privileged during the testator’s lifetime and, also, after the testator’s death unless sought to be disclosed in litigation between the testator’s heirs. [Citation omitted.] The rationale for such dis- closure is that it furthers the client’s intent. [Citation omitted.] Indeed, in Glover v. Patten, 165 U.S. 394, 406-408 …(1897), this Court, in recognizing the testamentary exception, expressly assumed that the privilege continues after the individual’s death. The Court explained that testamentary disclosure was permissible because the privilege, which normal- ly protects the client’s interest, could be impliedly waived in order to fulfill the client’s testamentary intent. [Citations omitted.] United States v. Jicarilla Apache Nation, 131 S. Ct. 2313 (2011). Rules 1.6. Topics: Evidence, A/C Privilege. The litigation involved the federal government’s management of funds held by the government in trust for the benefit of the Jicarilla Apache Nation. The tribe sought discovery of documents and communications between the government and its lawyers concerning management of the funds, and the government asserted attorney-client 2 privilege. The lower courts nevertheless ordered disclosure because of the fiduciary exception to the attorney client privilege. The Supreme Court held that the fiduciary exception did not apply in this case. The Court discussed the history and purpose of the exception, and held that it did not apply here for two primary reasons: first, the advice given was for the benefit of the government in its governing role, as opposed to the circumstance of private trusts where the beneficiary is the “real” client. It was significant to the court that the government lawyers were not paid out of trust funds. Second, the Court distinguished between the common law duty of broad disclosure to beneficiaries of a private trust and the limited disclosure required by statute with respect to the tribe’s funds held in trust by the government. Other federal cases considering the fiduciary exception in the ERISA context have held that it applies to ERISA trustees. See Solis v. Food Employers Labor Relations Ass’n, 644 F.3d 221 (4th Cir. 2011); Harvey v. Standard Ins. Co., 275 F.R.D. 629 (N.D. Ala. 2011)(distinguishing Jicarilla); Moore v. Metropolitan Life Ins. Co., 799 F. Supp. 2d 1290 (M.D. Ala. 2011). United States v. Yielding, 657 F.3d 688 (8th Cir. 2011). Rules 1.6, 1.9. Topics: Evidence, A/C Privilege. Husband and Wife were charged with Medicare fraud. W died, and H subpoenaed files from W’s attorneys, claiming that as Personal Representative of her estate, he was waiving attorney-client privilege. He wanted to use the files to shift blame to W. Eighth Circuit held that trial court judge properly quashed the subpoena. “A personal representative of a deceased client generally may waive the client’s attorney-client privilege … only when the waiver is in the interest of the client’s estate and would not damage the client’s reputation.” H argued that W’s reputation was already damaged, but court held that waiving the privilege could cause further damage. Abbott v. U.S. I.R.S., 399 F.3d 1083 (9th Cir. 2005), aff’g Estate of Sexton v. C.I.R., T.C. Memo. 2003-41 (2003). Rules 1.7. It was not an impermissible conflict under Rule 1.7 for lawyer simultaneously to represent an estate before the IRS while also serving as an expert consultant to the IRS on an unrelated matter. In his role as expert consultant, he did not represent the IRS, so there were no adverse clients. Nor was there any evidence that lawyer’s representation of the estate was materially limited by the work he did for the IRS. Estate of Heiser v. Islamic Republic of Iran, 466 F.Supp.2d 229 (D.D.C. 2006). Rules 1.7, 1.9. Topics: Wrongful Death. This is a wrongful death action by the survivors of servicemen killed in a bomb attack in Saudi Arabia in 1996 against the State of Iran (and others) under the “state sponsored terrorism” exception to the Foreign Sovereign Immunity Act. The court here enters judgment against the defendants for more than $254 million after applying the state law of thirteen different jurisdictions. One of the issues before the court was whether plaintiffs’ law firm should be disqualified since it had represented the Government of Sudan, a co-defendant with Iran in a separate matter (see Owens v. Republic of Sudan, 531 F.3d 884 (D.C. Cir. 2008), where it would have been required to make an argument exactly contrary to that being made in this proceeding. The court refused to disqualify the firm. First, “the Firm has withdrawn completely from representing Sudan in Owens as Rule 1.7 states it must in such situations.” As soon as the conflict became apparent, the firm instructed its lawyers who were representing Sudan to withdraw from that representation. As it happened, unbeknownst to the firm’s managers, those lawyers ignored that instruction and continued, for a time, to represent Sudan.