Business Law: Malpractice Firm Case

1) Collect all Crosby cases in which a plaintiff alleges malpractice against a lawyer for failure to draft a shareholder or CCA that protects minority shareholders. As a threshold matter, the statute of limitations for legal malpractice actions is one year. Ohio Rev. Code Ann. § 2305.11(A). Generally, an individual shareholder may not bring a legal malpractice action against an attorney that is employed by the corporation itself. See e.g. LeRoy v. Allen, Yurasek & Merklin, 114 Ohio St. 3d 323. When a lawyer counsels a corporation, the lawyer has a relationship directly to the corporation and not to any of the shareholders. Ohio Rules of Prof 'l Conduct R. 1.13(a) (2011). In Ohio, courts adhere to a strict privity rule which states “‘attorneys …show more content…
Maloof failed to establish that Benesch, through its actions, owed a fiduciary duty or obligation to him in addition to the obligation it owed to the corporation, Level Propane.
A complaining shareholder has a direct action only if he is injured in a way that is separate and distinct from an injury to the corporation. Weston v. Weston Paper & Mfg. Co. (1996), 74 Ohio St.3d 377, 379, 1996 Ohio 148, 658 N.E.2d 1058, citing Crosby v. Beam (1989), 47 Ohio St.3d 105, 107, 548 N.E.2d 217.
A corporation is a separate legal entity from its shareholders, even when there is but one shareholder. An attorney 's representation of a corporation does not make that attorney counsel to the corporate officers and directors as individuals. Because the corporation is a separate entity from its directors and officers, causes of action belonging to the corporation may not be litigated by the officers for their own benefit.

LeRoy v. Allen, Yurasek & Merklin, 114 Ohio St. 3d
…show more content…
Roetzel & Andress, L.P.A., 2009-Ohio-2728 -- Limited Partnership
The law firm Roetzel & Andress (R&A) represented Schneider personally, not her companies. R&A told Schneider, who is the majority shareholder of the numerous companies, to stop selling unregistered notes. Schneider ignored and continued fraudulently selling the notes. It was argued R&A committed malpractice in connection with its representation of Schneider’s various companies by failing to " 'counsel ' its clients to cease their participation in a fraudulently sourced building project.
The Court found R&A did not commit malpractice as to the companies because Schneider, as president and majority owner, controlled this business entity, and her knowledge of the true nature of her illicit financing scheme must be imputed to her company. The firm had no duty to separately advise a minority owner.
Stuffleben v. Cowden, 2003-Ohio-6334 -- Close Corporation
Procedure: Defendants-appellants Gerald Cowden, Esq. and Cowden, Humphrey & Sarlson Co., L.P.A. (Cowden Humphrey) appeal the trial court 's decision granting plaintiff-appellee Brian Stuffleben 's (Stuffleben) motion to compel

Related Documents