Do attorneys have an ethical obligation to state the law accurately? Even if there is an opposing attorney that works for the Bankruptcy Court? Is it legal malpractice?
Given the political season, you might think that it is up to the judge (or the media in the political realm) to determine if pleadings by an attorney advocating for his or her client are accurate. However a decision by the First Circuit Court of Appeals confirmed that a Massachusetts attorney who misstated the law, could, and in fact should, be sanctioned.
In the case entitled In Re Hoover (2016 WL 345748 first Circuit June 29, 2016 , a bankruptcy debtor filed for Chapter 11 reorganization. A creditor, Bank of America, which had a pending foreclosure sale at the time of the filing, set a new date for the foreclosure and filed a motion for relief of the Automatic Stay. This is typical of what happens in a bankruptcy case – the law says that all proceedings are stopped (or “stayed”) by the bankruptcy filing…but it also says that if a creditor has a security interest in property, they can file a Motion for Relief from the Automatic Stay in an attempt to get their secured property back. Those motions are generally allowed, and the foreclosures generally happen notwithstanding the bankruptcy proceedings.
In the Hoover case, an experienced bankruptcy attorney opposed the Motion for an Automatic Stay, asking the Bankruptcy Court to sanction the bank simply for rescheduling the sale (before the bank’s motion was allowed). While this may have been appropriate as a tactic, the brief included misrepresentations of the law and also misquoted the law. Noting that “Bankruptcy courts often need to act quickly” because of the circumstances of all parties the Appeals Court stated that the Bankruptcy Court should be assured that pleadings by “counsel are truthful.” A disingenuous filing is misleading to the Court – and of course does a disservice to the profession. Wherefore, the Bankruptcy Court sanctioned the attorney, and the District and Appeals Courts upheld the sanctions.
Is Sanction of Ordering Attorney to Attend Ethics Class Sanction Valid?
The Court’s sanction of Attorney Baker was an Order to attend an ethics or professional responsibility class, in person, at an accredited law school. This sanction was found to be acceptable by the Appeals Court considering that he had been previously sanctioned for similar conduct – the prior sanctions being merely “hefty” monetary penalties.
Is this valid? The Court says so. It’s also not that egregious of a penalty. If more attorneys recalled their ethics and professional responsibility rules, there would be more integrity and less mistrust of lawyers. And less attorney malpractice in Massachusetts.
Was Attorney Baker “Guilty” of Legal Malpractice?
We don’t know. This is because in a legal malpractice case the victim needs to have a cause of action in negligence against his or her attorney. While Mr. Baker clearly misrepresented the law, it was in the vein of zealously representing his client. In addition, the bankruptcy client would have to prove that he was harmed by his lawyer’s actions – did it delay his bankruptcy? Did it cost him money? Furthermore, what, if any, were the damages to the client? It is not clear from the Appeals Court decision that the client suffered. He likely received his discharge or reorganization.
Legal Malpractice As a Result of Attorney Misconduct
We get many calls from prospective clients who have valid claims of legal malpractice as a result of the negligent conduct of their attorneys. When the Bankruptcy Court, or any other court in the Commonwealth of Massachusetts, reports your lawyer to the Board of Bar Overseers, or sanctions your attorney, it’s a red flag. Was there legal negligence? Were you damaged in a way that can be quantified? If the answers to these two simple questions are yes, you may very well have a claim.
Call Attorney Neil Burns for a free legal malpractice consultation. You could have a case.