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Keywords

lawsuitdamagesattorneynegligencetestimonyfiduciarymalpracticepartnershipcorporationlegal malpractice
settlementdamagesattorneynegligencefiduciarymalpracticecorporationlegal counsellegal malpractice

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Cummings v. Sea Lion Corp., 924 P.2d 1011

Facts

Sea Lion Corporation, an Alaska Native corporation, was represented by Ronald Cummings from 1980 to 1990. During this time, Cummings had a contingent fee agreement with Larry Gillespie, who was involved in a business venture with Sea Lion. Cummings failed to disclose his financial interests in Gillespie's ventures, which led to Sea Lion incurring significant liabilities. After losing a lawsuit to Air Log, Sea Lion sued Cummings for professional negligence and fiduciary fraud, claiming damages for the losses incurred.

Sea Lion Corporation is an Alaska Native corporation organized pursuant to the Alaska Native Claims Settlement Act. Myron Naneng has served as a board member of Sea Lion since 1979 and as president since 1983. Cummings served as Sea Lion's general legal counsel from 1980 to 1990.

Issue

Did Cummings commit legal malpractice and fiduciary fraud by failing to disclose conflicts of interest and adequately advise Sea Lion Corporation?

Did Cummings commit legal malpractice and fiduciary fraud by failing to disclose conflicts of interest and adequately advise Sea Lion Corporation?

Rule

An attorney is negligent if they fail to use the skill, prudence, and diligence that other reputable attorneys would exercise under similar circumstances. Additionally, a fiduciary must fully disclose all material facts that could affect the client's rights and interests.

An attorney is negligent in the representation of a client if, within the scope of that attorney-client relationship, the attorney fails to use such skill, prudence, and diligence as other reputable attorneys in good standing commonly possess and would exercise under similar circumstances.

Analysis

The court found that Cummings had a duty to disclose his financial interests related to Gillespie's business dealings, which he failed to do. This nondisclosure was deemed material, as it could have influenced Sea Lion's decision-making regarding the partnership with Gillespie. The jury's findings of negligence and fiduciary fraud were supported by sufficient evidence, including testimony that Sea Lion would not have proceeded with the partnership had they known of Cummings' conflicts of interest.

The superior court correctly instructed the jury that Cummings could only be found liable if his professional negligence was the 'legal cause' of the injury.

Conclusion

The Supreme Court affirmed the lower court's judgment, concluding that Cummings was liable for both professional negligence and fiduciary fraud, and upheld the jury's award of damages.

Affirmed.

Who won?

Sea Lion Corporation prevailed in the case, as the jury found Cummings liable for professional negligence and fiduciary fraud, leading to significant damages awarded to Sea Lion.

Sea Lion Corporation prevailed in the case, as the jury found Cummings liable for professional negligence and fiduciary fraud, leading to significant damages awarded to Sea Lion.

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