Ensuing Professional Liability Implications with Homeowner or Condo Associations

Key Takeaways:

  • Make sure that the Homeowners Association (HOA)/Condominium board of directors includes protocols wherein its owners are aware of the rules (declaration and by-laws) and have appropriate expectations when living in the community.  
  • In litigation, courts sometimes intervene and substitute its finding for the board’s finding in accordance with the business judgment rule, but are prohibited from intervening where the board acted in good faith and exercised honest judgment in the lawful and legitimate furtherance of the HOA/condo.
  • Boards should regularly work
Continue Reading

Escrow Agent Responsibilities: Robot or Rogue?

Real estate transactions occur all the time whether in the residential or commercial context.  Notwithstanding a familial transfer, the arms-length transaction includes a buyer, a seller, and sometimes a bank or private money-lender who finances the deal.  In some of those situations, there is also an escrow agent whose role is simply identified in the contract to be the “holder of the funds” while certain conditions are met post-contract.  The escrow agent often keeps a fee for the services rendered, and becomes a mechanism for …

Continue Reading

The Sweetness of Quick Closure through Funds from Other Sources

In the professional liability world, errors occur.  To quote Forrest Gump, “*%&# happens!” These errors can carry great consequences, and can include payouts by insurers under E&O policies.  However, what happens when there is a possibility to rectify the error and place the would-be plaintiff in a position where they were before?  Also, how conceivable is it to utilize funds from other sources as a means to bring closure to claims.

Consider this example from a title dispute. In August 2010, plaintiff and two defendants …

Continue Reading

Be an Expert with CPA Experts through the AICPA Code

Most jurisdictions require that a plaintiff establish allegations of accounting malpractice through expert testimony. Moreover, accounting experts are often relied upon to establish damages. Accordingly, the vast majority of litigators, even those outside of the malpractice community, will encounter a CPA expert witness. This may be daunting for attorneys. Fortunately, there’s a handy, but underutilized, guide. The special reports to the AICPA Code of Professional Conduct include ethical standards required of every CPA. The reports provide a ready-made guide for evaluating the efficacy and admissibility …

Continue Reading

Title Insurer off the Hook for Closing Agent Misconduct

The closing of a home loan often involves multiple parties, and even a sophisticated buyer can be confused as to who represents whom. The individuals present can include representatives from the bank, real estate agents, title insurance agents, etc.  However, each person in the room has a specifically defined role, and it is important for all parties to be aware of what these roles are.

In a recent Pennsylvania case involving the misappropriation of loan funds, the Superior Court ruled that the role of a …

Continue Reading

Professional Liability for Employee Misconduct

Professionals are often entrusted with access to personal and financial information from their clients.  Professionals take great care to ensure that they protect this information from disclosure and that they comply with ethical guidelines regarding proper use of client funds.  However, even when professionals fully comply with the rules, there may be occasions where employees or other individuals who have access to the information through their professional employer use it for an improper purpose.  While professionals cannot always prevent employee misconduct, the actions they take …

Continue Reading

Risks of Client Indemnification Agreements

Professional consultation doesn’t always go as intended. Despite good intentions, there are always risks facing professionals that the representation will turn sour and lead to a malpractice claim. Clients also face risks and some sophisticated clients take steps to reduce exposure. For example, more corporate clients are attempting to reduce exposure by requiring counsel to sign indemnification clauses within the engagement agreement.  Many firms agree to represent clients pursuant to such clauses in order to develop or maintain business relationships, notwithstanding the additional risk.  However, …

Continue Reading

Does Privity Matter? Yup, According to a Recent Dismissal

Attorneys may be prepared for, or at the very least are aware of the risk of, claims raised by current or former clients. Generally, the first element in any malpractice claim is the existence of an attorney-client relationship.   The Restatement (Third) of the Law Governing Lawyers provides that an attorney-client relationship arises when, “a person manifests to a lawyer the person’s intent that the lawyer provide legal services for the person; and either (a) the lawyer manifests to the person consent to do so; or …

Continue Reading

Protect Your E-Filing Passwords

It wasn’t long ago when filing deadlines forced attorneys to rely on the speed and reliability of their process-server or messenger. How many filings were missed due to a flat tire or traffic? If the filing wasn’t stamped before the court closed at 4 PM, the filing could be considered late and the attorney left answering to the client. The dawn of electronic filing has changed this process. Many courts accept filing up to midnight of the due date and hand-delivery is no longer a …

Continue Reading

Sanctions for Improper use of the AC Privilege?

The attorney-client privilege does not provide an excuse to withhold all damaging documents. Documents in an attorney’s possession are not necessarily privileged and the refusal to produce discoverable materials may be grounds for sanctions. A Massachusetts court is currently considering whether a prominent, global law firm should be sanctioned for the allegedly imprudent conduct of a former partner. An appellate panel ruled that the trial court erred in deciding that the partner acted in good faith when he invoked the work-product doctrine to conceal key …

Continue Reading