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Capitol Hill Group, Inc. v. Pillsbury, Winthrop, Shaw, Pittman, LLC

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Brief Fact Summary.

PWSP represented CHG in bankruptcy proceedings. A dispute arose over CHG’s payment of PWSP’s attorneys’ fees. The bankruptcy court awarded the disputed fees, granting PWSP summary judgment. The district court affirmed.  CHG sued PWSP for legal malpractice in a subsequent lawsuit in District of Columbia court. PWSP removed the matter to federal court. The federal district court granted summary judgment

Judgment entered for a party because there is no genuine issue of fact and the party is entitled to judgment as a matter of law

for PWSP on the legal malpractice claims, which it held were barred by res judicata.

Synopsis of Rule of Law.

Res judicata, or issue preclusion, bars a subsequent lawsuit where there has been prior litigation that: involves the same claims or causes of action, between the same parties or their privies, in which there was a final valid judgment on the merits, by a court of competent jurisdiction.

Points of Law - Legal Principles in this Case for Law Students.

The failure to interpose a counterclaim does not necessarily act as a bar to later actions.

View Full Point of Law
Facts.

PWSP represented CHG in bankruptcy proceedings. An issue in the bankruptcy case involved a zoning dispute and CHG’s primary asset, commercial property. PWSP represented CHG in the zoning process. Subsequently, and after PWSP’s motion to terminate its representation of CHG was granted, a dispute arose over CHG’s payment of PWSP’s attorneys’ fees. The bankruptcy court awarded the disputed fees, granting summary judgment in PWSP’s favor. The district court affirmed.  CHG commenced a new action against PWSP for legal malpractice in District of Columbia court, alleging malpractice by PWSP in connection with an alleged failure to notify CHG of a Zoning Board of Appeals (ZBA) order and failure to raise a particular argument before the BZA. PWSP removed the matter to federal court. The federal district court granted summary judgment for PWSP on the legal malpractice claims, which it held were barred by res judicata.

Issue.

Were CHG’s legal malpractice claims barred by the doctrine of res judicata?

Held.

Yes. The elements of res judicata were satisfied, and the relationship between the claims was such that successful prosecution of the malpractice action would nullify the attorneys’ fees judgment or impair rights established in the first action.

Discussion.

The fee applications and the malpractice claims arose out of the same nucleus of facts, and the other elements of res judicata were satisfied. The successful prosecution of the legal malpractice action would nullify the attorneys’ fees judgment or impair rights established in the first action. The court rejected CHG’s assertion that it was not aware of the legal malpractice claim at the time of the first litigation.


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