Genius Texas Legislature Is At It Again

In 2003, the Texas Legislature changed the landscape for residential construction litigation. They created the Texas Residential Construction Commission (TRCC)and also set up a “dispute resolution process” that most construction defect cases had to go through before proceeding in the court setting. The law is a disaster for homeowners. Cases sit in the process for ridiculous amounts of time and there is no real mechanism to enforce any finding of wrongdoing by the builders. In short, builders love the bill; homeowners hate it. It is such a resounding success that the staff of the Texas Sunset Commission (which reviews state agencies) issued a scathing report calling for abolition of the Commission, though the Commission itself voted in December to recommend keeping it with significant modifications.

It was apparently such a success that some legislators want to expand the provisions.  I received a draft of a bill today that has not yet been filed, but it would create a system similar to the TRCC for commercial construction disputes.  However, it goes further; instead of the ridiculous “dispute resolution process” in residential claims, the new bill appears to require arbitration for any dispute relating to a commercial construction defect, potentially including personal injury claims (though the bill itself is vague).

I don’t do commercial construction cases, but I do handle personal injury claims resulting from commercial construction defects.  Frankly, I’m appalled, and I hope all other lawyers would be too.  The legislature has done some ridiculous things, but even in the egregious medical malpractice limitations they didn’t seek to take away the right to a jury trial.

I’ll be tracking this bill and trying to keep the status updated.

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Please Use A Car or Booster Seat

car seatThe Austin American Statesman reported that an unrestrained 2 year old was critically injured after being ejected from his vehicle during a wreck.

As a parent, I don’t think there is anything we can do that is more important that protecting our kids.  And properly using a car seat or booster seat is one of the most important things we can do to help protect our kids.

The National Center for Health Statistics says that motor vehicle crashes are the leading cause of death for the 2-14 year old age group. And a lot of the problem is in Texas. Texas and California are neck and neck for the 1 and 2 rankings of the number of child deaths from car wrecks, and both states have almost twice as many deaths as the third ranked state.

Many of these deaths can be prevented by the proper use of car seats and booster seats. National Highway Transportation Safety Administration studies show that child safety seats can reduce the risk of fatal injury by 71 percent for infants and 54 percent for toddlers. And Center for Disease Control studies show that proper use of booster seats reduce the risk of injury by 59 percent.

The American Academy of Pediatrics has released its 2009 car seat guide, which summarizes as follows:

Infants: Infact seats and rear facing convertible seats. All infants younger than 1 year and who weigh less than 20 pounds should always ride rear-facing.

Toddlers/Preschoolers: Convertible seats. Children 1 year of age and at least 20 pounds can ride forward-facing. It is best to ride rear-facing as long as possible.

School-aged children: Booster seats. Booster seats are for older children who have outgrown their forward-facing car safety seats. Children should stay in a booster seat until adult belts fit correctly (usually when a child reaches about 4’9″ in height and is between 8 and 12 years of age)

Older children: Seat belts. Children who have outgrown their booster seats should ride in a lap and shoulder belt in the back seat until 13 years of age.

While all seats are important, I want to emphasize the booster seat requirement. Most parents are good about keeping their kids in car seats, but I see a LOT of kids that aren’t 4’9″ and don’t use booster seats. This is just dangerous.

Seat belts are designed for adults. If your child doesn’t meet the 4’9″ requirement, then the seat belts will not keep the child in position in a serious wreck. The child will be unrestrained and could be ejected or partially ejected from the vehicle, almost certainly killing the child.

I know there’s a lot of pressure from kids and even other parents to not use the booster seats, but as an attorney who only handles auto porduct liability cases told me, “I just tell other parents [who don’t require kids to use booster seats] that I’m glad to know I love my kids more than they love theirs.”

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Legal Malpractice By Neglect

A trial last week was a great example of a common malpractice scenario: simple neglect of the file. A jury rendered a $338,000.00 verdict against a lawyer that simply refused to prosecute a worker’s compensation claim. According to an article discussing the case, the lawyer was hired, but the case was dismissed for failure to prosecute and then the lawyer didn’t timely file a motion to reinstate the case.

During the legal malpractice case, the plaintiff obtained a summary judgment on negligence, and the only question at the trial was the damages. To find this, the jury was asked to determine the extent of the man’s disability, which would set the value of the claim.

It’s not uncommon to find cases where attorneys simply fail to prosecute the claims. We’ve seen several different reasons for this (from simple mistake to lawyer’s depression and disability), but a prevalent theme is the selection of the case. In many neglect cases, the attorney has taken a case that he or she just doesn’t want to work on. The case may be outside the attorney’s expertise; the client may be difficult to deal with; or the attorney may have made an initial error about the value of the case. Whatever the reason, many of these cases could be avoided by the attorney making better choices up front about case selection.

Posted on: January 21, 2009 | Tagged

What Martin Luther King, Jr Day Means To Lawyers

I wanted to write something as a tribute appropriate for this Martin Luther King, Jr. Day, but I was searching around for a something that inspired me, and I was coming up empty.  But then, a note in my inbox pointed me to a blog post from Kelly Erb at the Taxgirl blog.  Kelly put down thoughts better than I ever could so I’m going to excerpt her post here.  I do encourage everyone to read the full post.

From Kelly:

Later, I was preparing to write post about Martin Luther King, Jr. Day. I figured I’d just put up a copy of his famous “I Have A Dream” speech and call it a day. But as I researched, I found part of his autobiography which, I will confess, I have never read in full. And I saw something interesting: I knew that Dr. King had been arrested several times for various accusations, but I didn’t realize that he had been on trial for tax evasion.

Yep. On February 17, 1960, a warrant was issued for the arrest of civil rights leader Dr. Martin Luther King Jr. on charges of tax evasion. He was accused of allegedly falsifying his Alabama income tax returns for the years 1956 and 1958; he was the only person ever prosecuted under the state’s income tax perjury statute. It seemed like an inevitable victory for the government.

In his autobiography, Dr. King described the trial like this:

This case was tried before an all-white Southern jury. All of the State’s witnesses were white. The judge and the prosecutor were white. The courtroom was segregated. Passions were inflamed. Feelings ran high. The press and other communications media were hostile. Defeat seemed certain, and we in the freedom struggle braced ourselves for the inevitable. There were two men among us who persevered with the conviction that it was possible, in this context, to marshal facts and law and thus win vindication. These men were our lawyers-Negro lawyers from the North: William Ming of Chicago and Hubert Delaney from New York.

And something quite remarkable happened. On May 28, 1960, only after a few hours, Dr. King was acquitted by an all white jury in Montgomery, Alabama.

Dr. King said about his trial:

I am frank to confess that on this occasion I learned that truth and conviction in the hands of a skillful advocate could make what started out as a bigoted, prejudiced jury, choose the path of justice. I cannot help but wish in my heart that the same kind of skill and devotion which Bill Ming and Hubert Delaney accorded to me could be available to thousands of civil rights workers, to thousands of ordinary Negroes, who are every day facing prejudiced courtrooms.

And it dawned on me: no matter how many slick-haired, silver-tongued attorneys do their best to make a quick buck at the expense of the reputation of the profession, you can’t dispute that justice is attainable. And justice is good. And justice is important. And even if it is infrequent, it’s worth it when it happens.

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Go All In On Contingent Fees

I’m a few days behind on my magazines (actually, more than that judging by the pile on my desk) so I just got around to reading my January 5, 2009 Texas Lawyer, which contains an article entitled  DOWN MARKETS REQUIRE CREATIVE CHOICES: Use Flexible Fee Structuring To Add Clients In Tough Times.

In the article, the author, Philadelphia lawyer Gavin Lentz, makes some great points.  He states:

While many law firms seem to be bracing for disaster in this market, I see an excellent opportunity to generate new clients while also building an upside into your fee agreements. Although the current economic conditions are causing an explosion of litigation, many clients are experiencing extremely tight cash flow and cannot afford the usual fee structures.

Under these circumstances, how do you turn this to your advantage? The answer is multiple types of flexible-fee agreements that both new and existing clients will greatly appreciate. Firms that refuse to be flexible and creative in a down market risk losing clients and enhanced fees. I have already seen a number of clients that have been turned away by other firms because those lawyers are not taking the long-term view regarding client relationships and the economy.

Although current budget conditions may preclude clients from paying typical initial retainers and monthly fees, I have found that you can solidify your relationship with both new and existing clients by negotiating an upside reward for taking a risk to help clients through these difficult times.

To meet these problems, Mr. Lentz suggests using multi-phased fee agreements (flat fees based on portions of cases) or blended contingency agreements (client pays an initial flat-earned fee and then a percentage of the recovery after that).  But Mr. Lentz doesn’t go all the way.  Why doesn’t he ever suggest taking a case on a full contingent fee?  There are plenty of lawyers (including our firm or my friend Randy McClanahan who has a contingent fee blog) that routinely take commercial matters on a contingent basis.  And many of us have been doing it for years, not just now when times are tough.

Don’t get me wrong.  There are times and places for hybrid agreements (we’ve used all kinds of hybrid agreements in our practice), but leave open the possibility of a full contingent fee.  If you want to alilgn the interests of the attorneys and the clients, the best manner, when possible, is a full contingent fee.

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Sometimes Lawyers That Make Errors Can Get Off The Hook

The US Eighth Circuit Court of Appeals decided a case yesterday that demonstrates that ethics violations aren’t enough in legal malpractice claims.  Greatly simplifying the case, the law firm, Dorsey & Whitney, prepared a package of loans for an investment bank.  The investment bank sold the package to 32 independent banks who loaned the money to the Mohawk tribe for casino operations.

There were two problems with the firm’s advice.  First, at the time of closing, the National Indian Gaming Commission had not approved the project.  The firm told the investment bank to go ahead with the closing anyway.

As litigation cases are want to do, the deal went bad.  The banks sued the tribe for the amount due, and the tribe then claimed that the loans weren’t valid because the National Indian Gaming Commission had not given approval.  Some of the banks ended up suing the firm.  A U.S. Bankruptcy Court and a U.S. District Court both held that the banks were beneficiaries of the legal services, and entered substantial judgments against the firm.  In reaching the decision, the bankruptcy court noted:

If Dorsey can escape liability for activities that constitute malpractice in this situation on a standing defense, the integrity of these types of commercial transactions are at risk…It cannot be sued for malpractice by the loan participants because they do not have standing; it cannot be sued by Miller & Schroeder [the investment bank firm] because Miller & Schroeder has no damages.

The Eighth Circuit disagreed, finding that the banks were not clients of the firm and reversing the judgment.

One other item of note from the case was some additional conduct of concern by the firm that was unrelated to the holding of this decision.  After the deal went bad, a lawsuit was filed against the investment bank.  The firm was faced with the question of whether it could ethically defend the bank in the lawsuit when the heart of that case was whether the firm had given the proper advice.  The firm apparently had no problem with this, and chose to represent the bank in the lawsuit.  At least one court reportedly said a motive for the firm’s decision was the prospect of losing the investment bank’s business to a rival firm.

AmLaw Daily has its own synopsis of the case.

Posted on: January 14, 2009 | Tagged

Deaths From Austin Motorcycle Wrecks Double

Austin American Statesman writer Tony Plohetski reported this morning that in 2008, the number of deaths in Austin motorcycle crashes more than doubled.  From the article:

The deaths have become part of an alarming reality in Austin: The number of people killed in motorcycle crashes last year more than doubled from 2007, rising from eight to 18. Motorcycle deaths accounted for 31 percent of the city’s overall traffic fatalities in 2008, compared with 13 percent in 2007, according to police statistics.

Law enforcement officials said the increase appears to be following a national and statewide trend that they think is partially the result of more drivers finding cheaper transportation during last year’s gas price surge.

While state and national statistics are not yet available, anecdotal stories from officers around the state say that motorcycle deaths are increasing everywhere.

The article suggests two safety tips for riders:  (1) wear your helmet — while Texas has modified its mandatory helmet law, the best way to protect yourself is by wearing a helmet; and (2) wear bright clothing — a safety vest of other similar item will help others on the road see you.  Other safety tips are available at the Motorcycle Safety Group website, the Motorcycle Safety Foundation website, and the National Highway Transportation Safety Administration website.

I will also add that from our experience in handling motorcycle cases (including Mark’s trying one last month where a trucker ran over a motorcyclist), victims of motorcycle crashes shouldn’t expect a fair shake in the civil justice system.  No matter how hard we try, there is a bias among jurors and insurance adjusters against motorcyclists.  So, if you are a cyclist, realize that you are often the one best able to protect yourself.

And perhaps the most interesting part of the article, the chairman of the Texas Motorcycle Rights Association goes only by the name Sputnik.  Who knew?

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Blackwater’s Legal Malpractice Claim Is Thrown Out Again

I’ve chronicled the suit filed by Blackwater against its law firm, Wiley Rein. After losing a suit brought by the families of four employees who were killed in Iraq, Blackwater sued the firm saying that the firm committed legal malpractice by not invoking the proper statute in an effort to remove the suit from state court to federal court.

In a blog post made when the suit was filed, I wrote:

The reports on the suit are limited so it’s difficult to know the exact substance of Blackwater’s claims. But it’s hard to see from the information available how Blackwater can prove that it would have prevailed on the matter in federal court but lost in state court.

It turns out I was right.  On December 29, the legal malpractice claim was thrown out for the second time.  The cited article noted:

Two judges have now dismissed the case, concluding that Blackwater’s argument that a federal court would have ruled differently than the state court is purely speculative because the federal court might well have ruled that the private security company’s employees were not federal officers.

The case is a good example of showing the need to prove causation. It’s not enough that a plaintiff show that the lawyer made an error; the plaintiff must also show that the error caused harm to the plaintiff. In the litigation context, as in the Blackwater case, that is usually proven by proving the “case within a case.” If the lawyer represented a defendant in the underlying litigation, the client must prove that absent the lawyer’s error, it would have prevailed in the suit or at least been hit with a smaller judgement. Because Blackwater couldn’t prove that they would have prevailed in the absence of the error, they couldn’t make a legal malpractice claim. If the lawyer represented a plaintiff in the underlying litigation, the client must prove that absent the lawyer’s error, the client would have obtained a judgment and that the judgment would have been collectible. If the client can’t prove the case within a case then the client can’t win a legal malpractice claim.

Having said that, there is a growing trend among some jurisdictions, inlcuding Texas (though it’s not well settled), that allow a client to prove causation by presenting evidence that the lawyer’s conduct affected the settlement value of the case. This certainly makes sense given the falling number of trials.

Posted on: January 9, 2009 | Tagged

Blackwater’s Legal Malpractice Claim Thrown Out

We had earlier reported that defense contractor, Blackwater, filed a legal malpractice case against its law firm for failing to properly remove the case to federal court, where Blackwater thought the wrongful death claims brought against it would be dismissed. Today, the Blog of Legal Times, reports that the legal malpractice claims were dismissed. The trial judge dismissed the claims arguing that the damages were too speculative. It’s a tough argument to assert that the federal judges would rule on an issue differently than the state judges, who let the wrongful death claims proceed. However, the case was dismissed without prejudice, so Blackwater could re-file the suit at a later date.

Posted on: January 5, 2009 | Tagged

Saying “I’m Sorry” To Prevent Legal Mal Claims

A few weeks ago, I posted portions of a speech I gave that discussed  “8 Ways to Avoid Legal Malpractice Claims.”  Number 5 on that list was:

5. Say “I’m Sorry.”  If you make a mistake, you have an obligation to tell your client, and in the process, let them know that you’re sorry.  A simple apology goes a long way to reducing legal malpractice claims.

Today, Susan Cartier Liebel at her Build A Solo Practice blog had a post that provided a great story showing how effective an apology can be at helping avoid potential problems as a result of a mistake.

I would normally paraphrase the post, but doing so wouldn’t do it justice.  Please take one minute to read Susan’s post.

Posted on: January 3, 2009 | Tagged

Schuelke Law maintains offices in Austin, Texas. However, our attorneys and lawyers represent clients throughout the state of Texas, including Dallas, Houston, San Antonio, Forth Worth, El Paso, New Braunfels, San Marcos, Kyle, Buda, Round Rock, Georgetown, Lockhart, Bastrop, Elgin, Manor, Brenham, Cedar Park, Burnet, Marble Falls, Temple and Killeen. By Brooks Schuelke

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