This discusses a slightly interesting point about a lawyer’s legal obligations in corporate derivative claims

Ron Simms and his brother own, through a collection of trusts and corporations, TP Racing, a partnership (actually an l.l.l.p; these folks were apparently sold every imaginable bell and whistle) that owns the Turf Paradise race track. TP sued Ron. He counterclaimed; the court dismissed his claims for lack of standing. Before re-filing them as derivative claims he asked the court to declare that his lawyers, Greenberg Traurig, did not have a conflict (because this had been the subject of earlier motions, each side having tried unsuccessfully to disqualify the other’s lawyer). TP objected, arguing that since derivative claims are brought on behalf of the business Greenberg owed TP a fiduciary duty, so it couldn’t also represent someone adverse to TP. Greenberg never actually represented TP nor did anyone think it did; the argument was entirely technical. The trial court bought it and disqualified Greenberg. Ron took a special action.

The Court of Appeals reverses. Cases from other jurisdictions allow such representation, considering the corporation to be only a nominal party in a fight between shareholders and managers. The court adopts this reasoning for partnerships. The corporation – or partnership – is not a client of the firm bringing the derivative claim and that firm, as opposed to its client, has no fiduciary duty to the corporation. TP’s position apparently rested mostly on an Arizona probate case that the opinion distinguishes fairly easily.

(link to opinion)

We haven’t seen a notice-of-claim case in awhile but this one shows that they’re still being fouled up.

Drew sued the school district because it didn’t renew his contract to provide special education services. His notice of claim set a two-week deadline for acceptance. The statute (12-821E) says  that a “claim . . . filed pursuant to this section is deemed denied sixty days after the filing of the claim unless the claimant is advised of the denial in writing before the expiration of sixty days.” So when he filed suit the district moved to dismiss, arguing that the statute requires that it have sixty days. The trial court granted the motion; the Court of Appeals affirms (treating this as an appeal from summary judgment since the trial court, having considered documents outside the pleadings, should have converted the motion).

Drew argued that he just had to wait sixty days before filing suit. But the precedent is pretty clear that the statute intends to give the government time to investigate and evaluate. A footnote says that the two weeks in question fell over the Christmas holiday so the district in fact had only a few days. But that confuses the issue: the holding is that the government has sixty days because the statute says so, not because of particular circumstances in a particular case.

Drew also argued that the district “set a trap” for him by not asking for more time before his offer expired. But “the notice of claim statute clearly places the burden on the claimant to make a statutorily compliant settlement offer.”

These are not close questions. The court addresses the most interesting argument in a footnote, so its not clear that Drew even made it. Why not ignore or sever the deadline and consider it void as in violation of the statute? Because courts can’t write parties’ letters for them. “[W]here a party’s intent ‘is expressed in clear and unambiguous language, there is no need or room for construction or interpretation and a court may not resort thereto.’”  (Presumably also because, though the court doesn’t say this, the claimant has the burden and the point is to clarify the issues and promote resolution, not make the parties argue for a year or two about what a letter meant at law that it didn’t say in fact).

The opinion mentions in passing that the district didn’t waive the statute, which suggests that government can. But with so many notice-of-claim cases on the books now, if you have to argue waiver then you made a mistake. Trying to cut corners on this statute is the sort of thing you could end up telling your carrier about some day.

(link to opinion)