Monday, November 10, 2008

mortgage - particular debt v. open-ended; rules of prof. conduct do not create cause of action

Weiss & Associates v. Tulloch - Superior Court - October 30, 2008

Plaintiff law firm took several mortgages to secure payment of attorney fees by defendant. Plaintiff got a portion of the proceeds on two properties, then foreclosed on a third for alleged ongoing liability for attorney fees by defendants.

Held, the mortgage on the third property was not an open-ended one but a "formal documents of a specific character that should be strictly construed" to cover payments of a motrgage that covered only a specific advance of funds and nor more. Here, neither than note nor the mortgage indicated coverage of future attorney fees.

Judgment for plaintiff vacated and case remanded for entry of judgment for defendant.

Defendant's claim that plaintiff's violation of the rules of professional conduct, concerning conflicts of interest, was rejected. The rules address grounds for disciplinary action against attorneys and are not substantive law. A violation of the rules does not create a cause of action.