Sandra D. Glazier Presents “Joint Representation: Conflicts, Waivers, Privileges, and Retention Agreements” at 27th Annual Drafting Estate Planning Documents Seminar

Sandra Glazier 2017 webpage photoSandra D. Glazier has been selected by ICLE to present “Joint Representation: Conflicts, Waivers, Privileges, and Retention Agreements” at the 27th Annual Drafting Estate Planning Documents seminar at The Inn at St. John’s conference center in Plymouth (MI) on February 15, 2018.

Stacked with top Probate and Estate Planning speakers from across Michigan, this seminar provides 5.5 intermediate level CLE credits for eligible attorneys. Ms. Glazier made this presentation at the same seminar in Grand Rapids (MI) on January 18, 2018.

An attorney for more than 35 years, Sandra D. Glazier is known for her expertise and successful track record in probate litigation, estate planning, trust and estate administration, and family law matters. The cases Ms. Glazier works on tend to be very complex and require technical as well as legal expertise. She has represented contestants and proponents of estate planning documents, as well as fiduciaries, in significant trust litigation proceedings.

An AV Preeminent® rated attorney, Ms. Glazier is recognized nationally for her accomplishments and expertise in estate planning and probate litigation and is routinely requested to speak at some of the leading legal industry conferences across the country. She has been selected as a “Michigan Super Lawyer” by Thomson Reuters, the world’s leading source of information for the legal industry and has been recognized as a “Top Lawyer” by DBusiness, in the areas of probate, estate and family law. Ms. Glazier has had numerous articles published by some of the legal industry’s leading publications. and has taught “Valuation for Federal, Estate and Gift Tax Purposes” in a Masters’ level course.

Michigan Retroactively Applies Legal Malpractice Six Year Repose Statute to Bar Claims Arising Prior to Enactment of Statute

Phil SeltzerNortley v. Hurst, — Mich App —-; — N.W.2d —- (2017)(Michigan Court of Appeals, issued October 10, 2017, Docket #333240)(2017 WL 4526679)

Phillip E. Seltzer, Esq. of Lipson Neilson P.C., Bloomfield Hills, Michigan
Phone: 248-593-5000

In Nortley v. Hurst, the Michigan Court of Appeals held that Michigan’s six-year repose statute for legal malpractice claims applies retroactively to include claims based on facts that occurred prior to enactment and that may not have accrued until after enactment. This is true regardless of whether a plaintiff could not have reasonably discovered the legal malpractice claim or the existence of injury until a time after the enactment of the repose statute.

Plaintiff, Sarah Lynn Nortley, retained Dennis Hurst, of the law firm Dennis Hurst & Associates, in August 2008 to represent her in a divorce proceeding. A judgment of divorce as entered on June 12, 2009 – just 11 days before the tenth anniversary of the marriage. Plaintiff claimed that over 6 years later, after a conversation with her mother, she discovered a person could claim social security benefits through a former spouse if the marriage lasted ten years or more.

Nortley brought a legal malpractice claim against defendants on January 15, 2016, asserting that the failure of defendants to advise her that social security benefits were only available to a former spouse if the marriage lasted ten years or more.

On January 2, 2013 — three and half years after Nortely’s divorce was concluded and over three years before Nortley filed her malpractice claim, the Michigan legislature adopted a six-year statute of repose for all legal malpractice claims. MCL 600.5838b.

Defendants file a dispositive motion seeking summary dismissal under the six-year statute of repose claiming that it barred her claim. The trial court agreed. Nortley appealed claiming the trial court wrongly applied that repose statute because it went into effect after her claim accrued and it did not apply retroactively, would deny her due process, and would deny her a vested right in her cause of action for malpractice.

The Michigan Court of Appeals Decision
In affirming, the Court of Appeals noted that the statute of repose “reflects the reasonable legislative purpose of protecting professionals from stale claims.” “Generally, a new or amended statute applies prospectively unless the Legislature clearly and unequivocally intends for the statute to have retroactive effect.” However, an exception to the general rule presuming prospective application is a statute that is remedial or procedural in nature and whose prospective application will not deny vested rights.

Nortley contended the repose statute should not apply retroactively to bar her malpractice claim because the Legislature enacted it after her claim accrued and did not provide for retroactive application. Nortley argued her malpractice complaint was timely because she filed it within six months of discovering the existence of the malpractice claim, per the statute of limitations in Michigan. Under the limitation statutes, a person can timely file a suit either within two years from accrual of the claim – namely, from the last day the lawyer stops serving the plaintiff in a professional capacity on the matter giving rise to the claim (MCL 600.5805[1] and [6]) or within six months of when a plaintiff discovered or should have discovered the claim, whichever period is later. MCL 600.5838(2).

However, under the six-year repose statute, MCL 600.5838b(1)(b), accrual is not linked to a date of injury or its discovery but, instead, precludes any recovery after a fixed period of time, namely, it bars a legal malpractice claim “six years after the date of the act or omission that is the basis for the claim.”

The Court of Appeals rejected the argument that retroactive application would deny Nortley a “vested right.” The new repose statute did not prevent the filing of a timely claim because of an immediate preclusive effect. Nortley’s malpractice claim accrued after entry of her divorce judgment in 2009. When the repose statute took effect in 2013, she had more than two years to bring a timely claim within the six-year repose period.

The Court also rejected the argument that Nortley’s subsequent discovery of the malpractice claim should change the result. Noting that a statute of limitation bars a claim after it accrues, a repose statute bars a claim after expiration of a specified time period from a designated triggering event – in this instance, the defendant’s negligent act or omission. Accordingly, it may prevent a claim from accruing even if the injury or its discovery happens after the statutory period has expired. In sum, the repose statute “makes clear that the six-year period of repose caps the time for bringing a claim within six months of discovery.”

Finally, the Court rejected Nortley’s due process claim, noting a statute comports with due process if it “bears a reasonable relation to a permissible legislative objective.” Because the repose statute “reflects the reasonable legislative purpose of protecting professionals from stale claims” and its enactment did not have an immediate preclusive effect on Nortley’s claim, no due process violation occurred.

Significance of Decision
The case is significant for lawyer defendants sued for conduct springing from any alleged negligent act or omission over six years from the alleged negligence – regardless of whether that negligence occurred before the enactment of the repose statute. By their very nature, statutes of limitation and statutes of repose are arbitrary and do not discriminate between the just and unjust claim or the avoidable and unavoidable delay.

However, they all recognize the basic notion that a defendant has the right to be free, at some point, from stale claims and the increasing jeopardy of fading memories and lost evidence. Repose statutes attempt to cap or otherwise set the outside time parameter when such claims are deemed expired regardless of knowledge of a claim or the existence of injury.

Summary Dismissal Affirmed In Legal Malpractice Case Where Plaintiff Failed To Show That “Pertinent Decision Makers” Of Government Agency “Would Have” Agreed To A “Better Result” But For The Alleged Incorrect Legal Advice Given By Lawyer During Settlement Negotiations

Phil SeltzerManveen Saluja, M.D. v Honigman Miller Schwartz And Cohn LLP, et al, Unpublished Per Curiam Opinion of the Michigan Court of Appeals, issued March 16, 2017 (Docket No.330367)

Phillip E. Seltzer, Esq. of Lipson Neilson P.C., Bloomfield Hills, Michigan
Phone: 248-593-5000

In Manveen Saluja, M.D. v Honigman Miller Schwartz And Cohn LLP, et al, the Michigan Court of Appeals concluded that in a non-litigation context, where a lawyer’s alleged negligent advice led to an inappropriate settlement with a government regulatory agency, it is still necessary for a plaintiff-client to prove causation by demonstrating a “better outcome” “would have” occurred but for the negligence of the attorney.

Plaintiff doctor had a colleague (Dr. Kumar) who requested medical treatment for her mother (“M”), an elderly woman who lived in India. Plaintiff wrote prescriptions for fentanyl, a schedule II controlled substance, for M, knowing Dr. Kumar would obtain and deliver the drugs to India for his mother. During a six-year period, over 285 fentanyl patches were prescribed.

In 2012, Plaintiff received a call that DEA agents were at her office investigating. Plaintiff called Defendant law firm and talked with Defendant attorney Sprecher. After Sprecher briefly talked with a DEA agent, plaintiff was advised by Sprecher to comply with the investigation. After reviewing M’s file, a DEA agent explained in “an intimidating manner” that a $5,000 fine plus jail time exists for the offense. Plaintiff was then handed a form to sign, allegedly being told to sign it or go to jail. Plaintiff did not call Defendants. After signing the form, Plaintiff voluntarley surrendered her controlled substances privileges and had to surrender her DEA Certificate of Registration. Days later, local DEA offered to partially reinstate plaintiff’s privileges, but restricting her right to order certain controlled substances for three years. Her new lawyer (not Defendants) negotiated the restriction down to two years. A dissatisfied plaintiff contacted the DEA office in Washington D.C. Consequently, the local DEA withdrew the two year deal, but her new counsel later reinstated the three year restriction.

Plaintiff filed a legal malpractice suit, asserting defendants should have advised her she was not required to sit for the DEA interview and she should not have signed a voluntary release of her DEA privileges – the key bargaining chip needed to strike a better deal and achieve a better outcome that what was obtained.

Defendants moved for summary dismissal on the issue of causation. Defendants argued plaintiff could not offer evidence showing the actual negotiated outcome “would have” been “better” had plaintiff been given the purported correct advice. The motion was granted and the case summarily dismissed.

The Michigan Court of Appeals Decision
In affirming, the Saluja panel recognized the requirement of establishing a “suit with a suit” to show causation in legal malpractice — that is, that a plaintiff “would have been successful in the underlying suit.” However, because of no underlying litigation, the court applied an analogous rule: “plaintiff had to offer evidence that but for the malpractice, she would have received a better outcome than the one she received from the DEA”.

Plaintiff primarily relied upon expert testimony to establish causation. The expert testified at deposition if attorney Sprecher had provided “competent advice” – postponing the interview with DEA agents to allow an attorney to be present – “plaintiff never would have voluntarily surrendered her DEA registration.” Possessing the registration “was crucial” because “the registration represented a bargaining . . . ‘chip.’” By retaining that “chip,” there was a “good chance” plaintiff “would have kept her registration intact” instead of receiving a three-year restricted license on her ability to prescribe controlled substances. The expert stated that “good chance” meant “more probably than not and to a legal degree of certainty.”

However, the Saluja panel ruled the trial court correctly held the expert’s “testimony was inadequate to prove causation because it was too speculative.” Even though the expert “opined at . . . that plaintiff would have gotten through this encounter with the DEA with her license fully intact, he admitted, ‘I don’t know that [for sure].’” It was also “telling” he could not “specifically identify what plaintiff’s outcome with the DEA would have been” had attorney Sprecher given plaintiff the alleged proper advice. In particular, the court noted plaintiff failed to present testimony from any “pertinent decision makers” at the DEA to show how negotiations “would have been different had plaintiff not initially voluntarily surrendered her registration.” Accordingly, the expert’s “mere opinion that the outcome would have been different, without any supporting evidence, amounts to nothing more than mere conjecture and speculation” — inadequate to show causation.

In so ruling, the Saluja panel principally relied on another legal malpractice case, Pontiac School Dist v Miller, Canfield, Paddock & Stone, 221 Mich App 602; 563 NW2d 693 (1998), where the “suit within a suit” concept was not applied because of the non-litigation nature of the asserted malpractice. In Pontiac, plaintiff sued its attorneys for recommending a bond offering that allegedly required payment of excessive interest and insurance costs. Expert testimony posited the view that an alternative bond structure would have saved over forty-nine million dollars and, further, if the proper advice had been rendered, “a reasonably informed board of education would have adopted” the alternative proposal. However, no evidence was presented that the decision-makers — the board members — “would have” accepted the alternative proposal if the advice had been given, thereby making the expert’s opinion speculative.

Likewise, the Saluja court determined that, absent testimony from the “pertinent decision-makers” from the DEA showing what they “would have” decided if the supposed proper advice had been rendered, the expert’s subjective belief on this point was nothing more than conjecture on a possible outcome. Accordingly, summary dismissal by the trial court was affirmed.

Significance of Decision
The case is significant for lawyer defendants sued for conduct springing from a non-litigation negotiation/settlement/transactional context. Although the “suit within a suit” concept may not directly apply, a plaintiff is not relieved from the burden to establish that a defendant attorney’s actions were the necessary factual cause of an injury and that actual damages resulted from those actions — namely, that but for the conduct of the attorney, plaintiff “would have” obtained a “better” outcome. Saluja requires that, in non-litigation circumstances, a plaintiff must show the “pertinent decision-makers” on the other side of the negotiation/settlement/ transaction “would have” agreed to the “better outcome” if the proper advice by the attorney had occurred.

Without showing the difference between the negotiation position truly lost (the “better outcome” that “would have” been accepted) and the position a plaintiff actually obtained, any claim of a causal link to actual damages should be considered speculative. The case also demonstrates that expert testimony, discussing probable or likely outcomes, without a factual basis of what “would have” occurred, is legally insufficient to show causation and will be considered conjecture.

David Deutsch, Sandra Glazier, Kaleb Anderson, Dax Watson Appointed Equity Partners

Lipson Neilson New Equity Partners
The Lipson Neilson law firm is pleased to announce that attorneys David B. Deutsch, Sandra D. Glazier, Kaleb D. Anderson, and Dax R. Watson have been appointed equity partners of the firm.

“In addition to the tremendous talent and legal skills these attorneys bring to clients across the country, they all have proven to be leaders at the firm” says the firm’s President, Jeffrey Neilson. “They have the drive, commitment and vision necessary to continue the firm’s growth as we expand our national footprint.”

David B. Deutsch practices in the firm’s Bloomfield Hills office and specializes in a broad range of business and taxation matters, regularly counseling clients in estate and business succession planning, merger and acquisition transactions, and real estate transactions. He has acted as counsel in various business transactions such as mergers, acquisitions, sales of businesses and sales of medical practices, family business transfers, entity selection, and planning issues relating to corporations, partnerships and limited liability companies.

Sandra D. Glazier practices in the firm’s Bloomfield Hills office and is known for her expertise and successful track record in probate litigation, estate planning, trust and estate administration, and family law matters. An AV Preeminent® rated attorney, Ms. Glazier has had numerous articles published by some of the legal industry’s leading publications, and she continues to be invited to present on estate planning and probate litigation related topics at legal industry conventions across the country.

Kaleb D. Anderson practices in the firm’s Las Vegas office and specializes in the areas of homeowner & community associations, directors & officers, professional liability, insurance defense, and real estate. His experience includes actions before state and federal courts as well as administrative agencies. Mr. Anderson is regularly involved in litigation that shapes the landscape of community association law in Nevada. He has extensive experience representing financial institutions in creditor’s rights actions.

Dax R. Watson opened the firm’s Phoenix office in 2015 and has helped grow this office with additional attorneys and clients. His practice includes commercial litigation with an emphasis in real estate matters and professional liability defense. His clients include professionals in the fields of real estate, law, accounting, architecture, and engineering. Dax is also an experienced mediator that conducts private mediations and settlement conferences for all types of civil disputes, with a focus on real estate and commercial litigation disputes. He regularly appears and represents clients in regulatory matters before the Arizona Department of Real Estate and other state and federal agencies.

Founded in 1985, the Lipson Neilson law firm has grown from three founding members to thirty-four attorneys located in three states. Since its formation, the firm has also expanded its practice areas from business, tax and litigation to a full range of practice areas which now also include international law, real estate, professional liability, probate litigation, family law and estate planning. Lipson Neilson attorneys represent and provide counsel to clients throughout the country and around the world.

Joseph Garin, Jessica Green and Megan Hummel Named 2018 Mountain States Super Lawyers

Garin Green Hummel 2018Lipson Neilson is proud to announce that attorneys Joseph Garin, Jessica Green and Megan Hummel have been named 2018 Mountain States Super Lawyers. This is Joseph Garin’s 12th consecutive year on the Super Lawyers list. Selected as Rising Stars, this is Jessica Green’s 5th consecutive year and Megan Hummel’s 1st year on this list. Rising Stars must be either 40 years old or younger or in practice for 10 years or less; no more than 2.5% of lawyers in the region are named to the Rising Stars list.

Joseph Garin, the Managing Partner of Lipson Neilson’s Las Vegas office, was selected as a Super Lawyer based on his work in the Professional Liability, Nonprofit Organizations, Real Estate, Insurance Coverage, Employment Litigation, and Business Litigation practice areas. Mr. Garin is consulted nationally on the defense of professional liability claims, ethics, employment, insurance coverage disputes, director and officer claims, and risk management. He is the former Chair and current member of the Standing Committee on Ethics and Professional Responsibility to the Nevada State Bar; and a member of the Professional Liability Advisory Board for the national Claims & Litigation Management Alliance (CLM). Comprised of industry leaders from across the United States, this Board guides the development of extensive professional liability resources.

Jessica Green, an Associate in the firm’s Las Vegas office, was named a Rising Star based on her work in the Professional Liability, Employment & Labor, and Business Litigation practice areas. Ms. Green has defended many lawyers and law firms throughout the country during her career and is recognized as an emerging leader in Errors and Omissions (E&O), Employment law, and Insurance Coverage law. She has been a featured speaker at Professional Liability industry conferences.

Megan Hummel, an Associate in the firm’s Las Vegas office, was named a Rising Star based on her work in the Insurance Coverage practice area. Ms. Hummel’s practice is focused on insurance defense, commercial litigation, and appellate law. She speaks fluent Italian and is a member of the National Asian Pacific American Bar Association.

Thomson Reuters, the world’s leading source of information for the legal industry, uses a patented multiphase selection process to identify attorneys for its exclusive lists of Super Lawyers and Rising Stars. This process includes peer nominations, evaluations and independent research.

Founded in 1985, the Lipson Neilson law firm has offices in Las Vegas (NV), Phoenix (AZ) and Bloomfield Hills (MI). The firm is widely known for its excellence in the professional liability lines, offering invaluable insight and experience to its clients across all industries. The firm represents clients in Nevada, across the USA, and around the world.

Contact: Joseph Garin

Lipson Neilson Enjoys Hard Fought Victory: Federal Court Dismisses Multi-Million Dollar Trade Secret Claim Against Altair Engineering, Inc. and Key Employee

The Lipson Neilson team of Phillip E. Seltzer, C. Thomas Ludden and Samantha K. Heraud celebrated a long-sought victory in a case originally filed against their clients in 2007. After a 2014 adverse trial verdict was vacated by the trial judge, a new trial was ordered.

However, on December 13, 2017, Judge Avern Cohn granted a summary judgment motion to Defendants, Altair Engineering Inc. and a key software director, dismissing the claims brought by MSC.Software (“MSC”) for trade secret misappropriation. In his final decision, Judge Cohn found, “MSC has no admissible evidence to support its claim for damages,” and noted, “MSC concedes that its multimillion dollar damage claim is unsupported in light of the exclusion of [MSC’s expert’s] testimony and it does not challenge Altair’s reasoning.” The Judge’s decision finished with a reference to the famous T.S. Eliot poem The Hollow Men: “This is the way the world ends; Not with a bang but a whimper.”

MSC initiated the case in 2007 when it sued Altair and a number of former employees of MSC. MSC asserted sixty-three claims of misappropriation of trade secrets by Altair and its employees, along with a breach of confidentiality and non-solicitation agreements by the key employees.

With a team of lawyers at Lipson Neilson leading the charge, the Court summarily dismissed 58 trade secret misappropriation claims out of the original 63 alleged in pre-trial proceedings. In April 2014, after a two-month trial, a jury determined that three out of the remaining five trade secrets were misappropriated. The Jury awarded MSC $26.5 million in damages out of the 62 Million plus damages sought at trial.

However, on a motion to vacate that judgment brought by Lipson Neilson (working with the Boston law firm of Fish & Richardson), Judge Cohn vacated the jury award for the trade secret violations (over 26 Million) in November 2014. The opinion noted, among other things, the misconduct of MSC’s trial counsel in abusing his right to rebuttal closing argument by raising a damage theory previously barred by a prior pre-trial ruling. Finding that the argument impermissibly skewed the damage horizon in the case, the Judge ordered a new trial regarding damages for the three trade secrets the jury determined were misappropriated. However, after further discovery and expert testimony, the Judge’s ruling of December 13, 2017, resulted in summarily dismissing MSC’s trade secret claims in their entirety against Altair and its key employee.

The law firm of Fish & Richardson, Boston, MA, represented Altair during the post-judgment/new trial phase, with Lipson Neilson representing the key employees.

C. Thomas Ludden Submits amici curiae Brief to the United States Supreme Court in Brott v. United States

C. Thomas LuddenC. Thomas Ludden, head of the Appellate Practice Group at Lipson Neilson, P.C., recently submitted an amici curiae brief to the United States Supreme Court in Brott v. United States, Supreme Court Docket No. 17-712. In their brief, the amici, National Federation of Independent Business Small Business Legal Center, the Southeastern Legal Foundation, and the Cato Institute, contend that the Seventh Amendment Guarantee of a jury trial applies in lawsuits against the United States seeking vindication of a citizen’s constitutional rights. They further argue that the United States cannot condition the right to seek relief for violation of constitutional rights upon the waiver of the right to a jury trial.

“For over 800 years, the jury trial has been one of our fundamental guarantees of liberty,” says Mr. Ludden. “The Supreme Court should agree that the Constitutional guarantee of a jury trial applies to lawsuits by American citizens seeking to recover compensation for unconstitutional takings of their property by the federal government.”

A decision on whether the United States Supreme Court will accept this case for full briefing should be made by this coming spring. If granted, the United States Supreme Court could hear oral argument as soon as October 2018. Click here to view the brief as filed on the U.S. Supreme Court website.

C. Thomas Ludden specializes in appellate law, commercial litigation, and professional liability. Mr. Ludden also handles a broad range of commercial disputes, including commercial lease and other contractual disputes and intellectual property matters. Mr. Ludden was appointed by the Michigan Supreme Court to serve on the state’s Committee on Model Jury Instructions; the appointment is for a three-year term ending Dec. 31, 2018.

Founded in 1985, Lipson Neilson, P.C. has offices in Bloomfield Hills, Las Vegas and Phoenix. The firm represents clients in Michigan, Nevada, Arizona, across the USA, and around the world.

Contact: C. Thomas Ludden
Phone: 248-593-5000

Dax Watson Featured on My Home Group’s Real Estate Podcast Series

Dax Watson is a featured guest on My Home Group’s “My Daily Dose” Real Estate industry podcast series. Established in 2004 in Phoenix, My Home Group is a rapidly growing real estate company in Arizona. Dax Watson has extensive litigation and professional liability defense experience in the field of real estate. He has appeared and represented clients in every county in Arizona. In addition to his legal practice, Watson is approved to teach legal issues, agency and disclosure, and property management by the Arizona Department of Real Estate. He regularly teaches risk-reduction classes to, and seminars for, real estate Brokers throughout Arizona.

Dax Watson Returns: Part 1

Dax Watson Returns: Part 2

Dax Watson Returns: Part 3

Dax Watson Returns: Part 4

Dax Watson Returns: Part 5

Dax Watson, Managing Partner
Lipson Neilson’s Phoenix Office
5343 N. 16th Street
Suite 140
Phoenix, Arizona 85016

Sandra D. Glazier Co-Presenting American Bar Association Webinar “Disputes Over Estate or Trust Administration”

Sandra Glazier 2017 webpage photoSandra D. Glazier, a principal of the Lipson Neilson, P.C. law firm will co-present along with Laura Joy Lattman a webinar entitled, “Disputes Over Estate or Trust Administration”. Sponsored by the American Bar Association’s Section of Real Property, Trust and Estate Law, and approved for 1.50 general CLE credit hours, this webinar will be held on December 5, 2017 from 1:00 pm-2:30 pm EST.

It is not uncommon for disputes to arise during the course of administration of an estate or trust. This webinar will provide a lively discussion about several types of trust and estate litigation, including:

  • Accounting proceedings
  • Breach of fiduciary duty/surcharge
  • Removal of fiduciaries

You can click here to register for this webinar.

An attorney for more than 35 years, Ms. Glazier is known for her expertise and successful track record in probate litigation, estate planning, trust and estate administration, and family law matters. The cases she works on tend to be very complex and require technical as well as legal expertise. Ms. Glazier has represented contestants and proponents of estate planning documents, as well as fiduciaries, in significant trust litigation proceedings. An AV Preeminent® rated attorney, she has also been recognized by “Super Lawyers” in probate litigation and a “Top Lawyer” by DBusiness, in the areas of probate, estate and family law.

Ms. Glazier has had numerous articles published by some of the legal industry’s leading publications. In addition, she has presented on estate planning and probate litigation related topics for the American Bar Association, Notre Dame Tax and Estate Planning Institute, Kansas City Estate Planning Symposium, Michigan’s Institute of Continuing Education, Oakland County Bar Association, Wayne County Probate Court appointed attorney training, Wilmington Trust’s New York Trust Symposium and the Bloomberg BNA Estate and Gift Tax Advisory Board. She has also taught “Valuation for Federal, Estate and Gift Tax Purposes” in a Masters level course.

Contact: Sandra D. Glazier
Phone: 248-593-5000

Legal Malpractice Summary Dismissal Victory by Phillip E. Seltzer and Samantha Heraud

Phil and Samantha 2017As their initial response to a Legal Malpractice Complaint, the Lipson Neilson team of Phillip E. Seltzer and Samantha Heraud challenged the timeliness of the lawsuit under the applicable statute of limitations, after plaintiff terminated a Tolling Agreement. Plaintiff entered into a consent judgment of divorce, which contained a forfeiture provision that allowed for the complete forfeiture of any asset not disclosed at the time of the entry of the judgment.

Plaintiff failed to disclose his ownership and beneficiary status of a 1.5 Million Dollar life insurance policy on his sibling, who died six weeks before the entry of Judgment. Plaintiff’s ex-wife filed a post-judgment motion to enforce the forfeiture clause and obtain the proceeds. Plaintiff then sued his divorce lawyer for including the forfeiture clause in the Consent Judgment. While the underlying litigation over the forfeiture clause played out over the next two years, plaintiff and his prior lawyer (represented by the Lipson, Neilson team) negotiated a limited Tolling Agreement.

A key provision of the Agreement limited the tolling of the legal malpractice claims to those “as currently alleged” in the filed Complaint. It also expressly prohibited the filing of any new claim during the duration of the Tolling Agreement, unless the Agreement was cancelled by providing a thirty-day notice. The Agreement also confirmed that other claims or defenses were not waived or diminished by the agreement.

After plaintiff lost the forfeiture battle to retain the life insurance proceeds, he cancelled the Tolling Agreement. Under Michigan’s two-year statute of limitations, plaintiff only had three untolled days to file a timely complaint, once the 30-day termination notice period expired. Plaintiff’s new counsel eventually filed a new Complaint, but did so five days after the untolled time expired. The new Complaint also contained brand new claims of legal malpractice and new claims of breach of fiduciary duty (which has a longer statute of limitations).

The Lipson Neilson team filed a Summary Disposition motion in response to the Complaint. The Trial Court granted the motion and dismissed the new Complaint with prejudice, based on three findings:

    1. All claims were time barred under Michigan’s two-year statute of limitations, which started accruing from the date the lawyer discontinued serving the client regarding the matter out of which the alleged malpractice arose. In this case, discontinuance occurred on the date the matter was completed via entry of the Consent Judgment, even though additional communications between Plaintiff and the lawyer continued for months concerning the prior completed divorce matter;
    2. The new legal malpractice claims that were added, beyond the original claim, were independently time barred because they were not tolled under the terms of the Tolling Agreement and plaintiff could have cancelled at any time to timely bring those claims and did not; and
    3. The new Breach of Fiduciary Duty claim was also never tolled under the limited terms of the Tolling Agreement, as was now time barred. This claim was also deemed legally redundant of and subsumed in the time barred legal malpractice claim.

This case highlights the importance of “thinking ahead” at all stages in the litigation, including during the negotiation of any pre-suit agreements.