by Chris Graham and Joseph Kelly

Fromhart v. Tucker, et al, Case No. 5:11CV97 (N.D. WV July 3, 2013)

Tucker was sued by Fromhart for $700,000 in loans that were allegedly fraudulently procured and not repaid. Tucker filed a third-party complaint against attorney Thomas for legal malpractice. Thomas removed the case to federal court and moved for and received a summary judgment.

Thomas argued that Tucker has no standing to sue for legal malpractice because Thomas owed him no duty. Thomas argued he only represented Tucker’s companies – OVA and Mound City – and he didn’t represent Tucker individually.

Thomas’s most convincing proof was the engagement letter sent to Tucker regarding his representation of OVA and Mound City.

The District Court concluded:

“In this letter, Mr. Thomas repeatedly states that he has been retained ‘to undertake representation of Ohio Valley Amusement Company and Mound City, Inc. in their pending Chapter 11 bankruptcy cases.’ [citation omitted]. He also specifically requests that OVA and Mound City ONLY furnish him and his firm with a retainer. Id. Finally, Mr. Thomas briefs Mr. Tucker in this letter regarding his impressions of the state of the OVA/Mound City bankruptcy, and informs Mr. Tucker that it may become necessary for him to file for bankruptcy individually. However, Mr. Thomas clearly indicates that, if filing for bankruptcy individually becomes necessary, Mr. Tucker ‘will need to consult with another lawyer, as there would be a conflict of interest that would prohibit us from being the lawyers for you at the same time that we are representing your companies.’

As such, it is clear that Mr. Thomas only represented OVA and Mound City, and did not represent Mr. Tucker individually. It is equally clear that Mr. Thomas made this fact clear to Mr. Tucker. Further, as Mr. Thomas points out, absent evidence of special circumstances showing an arrangement otherwise, a corporation’s attorney does not owe an attorney/client duty to the corporation’s shareholders.”