Second Dismissal Affirmed, Based on the Law-of-the-Case Doctrine
After negotiating a plea from four felony counts to a single, criminal negligence claim, two North Carolina criminal defense attorneys stood accused of legal malpractice when their client’s sentence included a steep fine and prison time. The client claimed that he had been illicitly promised certain favorable terms, such as avoiding prison. During his plea hearing, after being sworn, the farmer concealed these terms from the federal judge, purportedly on the advice of his attorneys; when he claimed legal malpractice, the Court of Appeals affirmed dismissal of the legal malpractice claim, finding that he was equally at fault with regard to the illicit promises, otherwise known as being “in pari delicto.”
However, the Court had not dismissed other claims against the attorneys, including breach of contract, fraud, constructive fraud, and breach of fiduciary duty. At hearing, the Court of Appeals noted that the viability of these remaining claims were not before it. So, after remand, the defendants pursued Rule 12(c) motions for judgment on the pleadings, premised on the law-of-the-case doctrine.
This doctrine – well established in North Carolina and most other jurisdictions – holds that once a matter is decided in a prior decision, it becomes the “law of the case” and may not be later revisited. Plaintiff claimed that he was only in pari delicto with regard to the allegations in the professional malpractice claim; he had alleged different bases for relief in the other counts and argued that those counts should remain. Defendants pointed out that each of the later claims not only incorporated all factual allegations in the Complaint but also the factual and legal allegations from the previously dismissed legal malpractice claim.
The Court of Appeals agreed first with Plaintiff, that the first decision did not discuss the breach of contract, fraud, constructive fraud, and breach of fiduciary duty counts. However, the Court then noted that the same allegations at issue in the first dismissal were incorporated into each of these subsequent counts. Indeed, each count of the complaint began with language incorporating each previous factual and legal allegation. In affirming dismissal of all remaining claims, the Court of Appeals noted that the “allegations [incorporated throughout the Complaint] establish both appellants’ wrongdoing and also the legal holding that appellant is in pari delicto with defendants.” The nature of those allegations had already been determined in the first decision; they became the law of the case.
Freedman I may be found at 784 S.E.2d 644; Freedman II may be found at 2017 N.C. App. Lexis 321.
Dickie McCamey’s Joseph Nelson defended one of the two defense attorneys. He practices professional and institutional liability law throughout North Carolina and South Carolina.
|Joseph L. Nelson