Some folks harbor a low opinion of lawyers. If the owners of LOP Capital feel that way, it would be easy to understand.
LOP Capital is a former client of Scott Pfeiffer, the former Greenville attorney who was disbarred and convicted of securities fraud for running an intricate scheme of cascading shell companies. LOP tried to sue Pfeiffer for legal malpractice, but that didn’t end well. And the lawyer LOP hired to sue Pfeiffer for malpractice? LOP is now countersuing him for malpractice, too.
The second lawyer, Nelson Chase of Mount Pleasant, is currently suing LOP for unpaid fees. Earlier this month, a South Carolina federal judge denied Chase’s motion for summary judgment on LOP’s counterclaim for malpractice, paving the way for a jury to decide whether Chase gave LOP adequate legal advice in pursuing its suit against Pfeiffer.
LOP alleged that the loan documents Pfeiffer had drafted for it were defective and advanced multiple claims against Pfeiffer, including the one for malpractice. Pfeiffer was subsequently sentenced to six years in prison for withholding information from investors in a separate matter.
South Carolina law requires plaintiffs suing for any kind of professional malpractice to include as part of their complaint an affidavit from an expert witness specifying exactly how the defendant was negligent. LOP did not include this required affidavit with its complaint against Pfeiffer, and its lawsuit was dismissed. Because LOP didn’t file its complaint until the statute of limitations had almost expired, the dismissal precluded LOP from filing a new malpractice claim against Pfeiffer. LOP voluntarily dismissed its remaining claims against Pfeiffer, saying that those claims would be more difficult to establish.
In his motion to dismiss the malpractice suit against him, Chase argued that he advised LOP that failing to obtain an expert affidavit would likely result in the trial court dismissing the claim against Pfeiffer. Chase produced emails from Michael Loprieno, LOP’s Illinois-based president, explaining that it was Loprieno’s decision not to hire an expert witness at the onset of the case.
But U.S. District Court Judge Bruce Howe Hendricks, accepting the recommendation of the magistrate judge, said that the emails were not the final word on the matter. Loprieno claims that Chase never told him or LOP that an expert’s affidavit was needed to file a claim for malpractice. He cited an email sent five days before filing the complaint in which Chase wrote, “If an expert witness is called, which I anticipate, you will be responsible for that cost as well,” which Hendricks said implied that Chase regarded expert testimony as something LOP could do without, at least for the near future.
Hendricks ruled that the emails did not, as a matter of law, preclude LOP’s malpractice suit against Chase.
“Chase may have advised the LOP Defendants that if they failed to obtain an expert affidavit, ‘the legal malpractice claim would likely be dismissed by the court,’ but Chase has not claimed that he advised his clients that an expert affidavit was required by statute to be submitted with the complaint and that without such an affidavit the legal malpractice claim would most certainly be dismissed,” Hendricks wrote.
The email exchanges between Loprieno and Chase suggest that Loprieno was laboring under the misperception that the expert’s affidavit could be submitted at a later date without any adverse consequences, and that it was preferable to wait for additional facts before submitting the affidavit, Hendricks added, finding that there was arguably a meaningful distinction between the advice Chase provided and the advice he should have provided regarding the absolute necessity of the affidavit and the time at which it needed to be filed.
LOP is also suing Chase for malpractice related to a different matter, contending that Chase improperly interfered with proceedings and settlement negotiations in the other matter in an effort to ensure that his bills were paid. In the same decision, Hendricks denied Chase’s motion for summary judgment on those counterclaims as well.
Chase is representing himself in the case. The LOP defendants are represented by Nathan Earle of Travelers Rest.
Earle said the case illustrates the need for attorneys to put their advice in writing and get their clients’ informed consent whenever giving clients potentially risky legal advice.
“The underlying case here was a malpractice case, and you would think that especially under those circumstances Mr. Chase would have been a little more careful to know what state law was concerning the requirement for filing a malpractice action,” Earle said.
The 11-page decision is Chase v. LOP Capital, LLC (Lawyers Weekly No. 002-198-14). A full opinion digest is available online at sclawyersweekly.com.
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