In March 2004, the Kansas City law firm of Walters Bender Strohbehn & Vaughan filed a class action against 63 defendants for supposedly overcharging for mortgage fees. The firm, however, confused Wall Street banking behemoth Salomon Brothers with developer Berton Solomon’s “Solomon Brothers” St. Louis commercial real-estate company and sued the latter. (This was a double mistake since Salomon Brothers hasn’t existed since 1997, and is now part of Citibank after at least two name changes and two mergers.) Unfortunately, the plaintiffs refused to immediately drop Solomon from the suit, and he ran up (a remarkably cheap) $4000+ in legal expenses in the seventeen months of legal proceedings before he was finally dropped, $4000 that Walters Bender is refusing to pay. They’re not very happy about being sued in small claims court, and are fighting that suit, even though it will cost them more to do so than to pay Solomon’s bills. (Bill McClellan, St. Louis Post-Dispatch, Jun. 18).
Without a settlement, Solomon is unlikely to recoup his costs in the absence of showing malice, a required element in Missouri law; lawyers are immune from the consequences of mere negligence, because, they’ll be happy to explain, such liability might deter productive activity like scattershot lawsuits. If only the same protections applied to, say, practicing medicine or providing jobs or producing goods.
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malice–maybe not in the sense of being malicious, but certainly in the sense of willful indifference to the other guy. It would be fun to be a judge in this case. I’d have a lot of fun asking the questions of the attorneys who filed the suit. Hell, I’d want to talk to all of them in court.
I’m pretty sure Rule 11 requires that an attorney investigate claims made in any paper submitted to the court. “Reasonable inquiry under the circumstances,” if I remember the language. Perhaps Solomon should have approached the issue from that angle. Of course, it’s probably too late if he already has been dropped.
Like modern Rule 11, Missouri Rule 55.03 is toothless. It requires the victimized party to expend legal fees to draft a lengthy motion for sanctions, and then there’s a thirty-day grace period for the victimizer to withdraw the offending claims. And if the withdrawal happens, there’s no right of recovery of attorney’s fees.
Walters Bender et al should be required to eat the $4,000, since it was their error in filing that named the wrong defendant. Perhaps making the attorneys liable for mistakes such as this will slow the flood of lawsuits, eh?