Sunday, April 14, 2013

Hendry v. Pelland case brief

Hendry v. Pelland case brief summary
73 F.3d 397 (D.C. Cir. 1996)

Appellant clients challenged the order of the United States District Court for the District of Columbia that entered judgment in favor of appellee lawyers in clients' claim for breach of fiduciary duty, seeking punitive damages, compensatory damages, and disgorgement of the legal fees they had paid. Lawyers had counterclaimed for unpaid legal fees.

The court agreed with the district court's ruling that the record contained insufficient evidence for a reasonable jury to find that lawyers willfully disregarded clients' rights.

-Clients' allegations suggested lawyers acted imprudently or incompetently, but they fell far short of showing blatant wrongdoing necessary to show deliberate malice or conscious disregard of clients' rights; thus, the punitive damages request was properly denied.
-In seeking disgorgement of legal fees for a breach of lawyers' fiduciary duty of loyalty, clients needed only to prove that lawyers breached that duty, not that the breach injured them.
-Here, clients presented sufficient evidence for a jury to conclude that lawyers breached their duty of loyalty because they represented property owners who had conflicting interests.
-Thus, the judgment for lawyers on fiduciary duty claim was set aside.
-Finally, because clients had a valid breach of fiduciary duty claim, the court set aside the district court's ruling that precluded them from using that breach as a defense to lawyers' counterclaim for unpaid fees.

OUTCOME: The court affirmed the district court's ruling on punitive damages, vacated the court's ruling granting judgment as a matter of law to lawyers' on clients' fiduciary duty claim, and vacate its ruling and judgment on the counterclaim for legal fees. It remanded to the district court for a new trial on clients' fiduciary duty claim and on lawyers' counterclaim.

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